Rachel Cruze

This is my dad's teaching from the old, old FPU.

But it's the little coat.

Do you remember this?

He had like different jars, like one was a IRA, one was a 401k.

And then there's like a little coat that he put over each one.

He was like, the coat is the Roth.

So if your investment has a Roth around it, that means you have funded those retirement accounts after you've paid taxes on your income.

So you pay all your taxes and then after tax income then goes into those.

Now, if it's before tax,

then again, that money is coming out before you pay taxes on your income.

And because of that, the government has to tax you on that because they did not tax you earlier on your income.

And then they tax you on all the growth.

And if you know anything about compound interest, your investments will grow, grow, grow.

So Roth is amazing.

Not everyone offers a Roth 401k, but if they offer it, like Jade said, take it and open up a Roth IRA and be putting 15% of your income into that.

But that won't probably be for another two years, Jade.

or year and a half after you pay off this debt and get a fully funded emergency fund.

But I'm so glad that you picked up the show and you actually are making progress.

You've paid off so much debt already, Jay.

So just keep at it.