At 38 years old, with $360,000 in combined annual net income and zero retirement savings, the caller known as E on The Ramsey Show had a problem that the numbers made impossible to ignore. He and his wife had done a lot right: built two businesses, paid down debt aggressively. But they had skipped the step that compounds most powerfully over time.
The hosts pushed back immediately.
What the Ramsey Hosts Actually Said
George Campbell ran the projection live on air: “From 38 to 65, you guys invest $4,500 a month, you never make more than $360,000 at 10% return on average, you’ll have $7.4 million.” That figure is what Campbell said on the show and should be understood as an illustrative projection, subject to real-world variation. The 10% figure reflects the long-run average annual return of the U.S. stock market, though any given 27-year stretch will vary.
Jade Warshaw anchored the strategy in the Baby Steps framework: “Baby step 4 is you’re investing 15% of your gross income every single month. And once you’re doing that, it’s kind of like that’s the set it and forget it.” On a $360,000 income, 15% works out to $4,500 a month — which is exactly where Campbell’s projection starts.
The advice is directionally correct. Starting at 38 with nothing is a real problem, and the urgency to begin immediately is justified. The $7.4 million number is aggressive but not absurd given the income level and time horizon.
Why the Rental Property Math Matters Here
E also asked whether to pay off the investment property, which carries a $223,000 balance at 5.99% interest. The property is worth approximately $275,000 and generates about $600 a month after expenses.
Campbell framed it bluntly: “Is it more than 2% of the headaches in my life?” That question carries real financial weight. A rental generating $600 monthly represents less than 2% of the household’s annual income. The opportunity cost of the mental bandwidth and management time may genuinely exceed the return.
Warshaw redirected the priority to the primary mortgage: “Since that’s where your bodies lay down to sleep every night, that’s what I want to solve for, is how can we make that debt-free first?” The primary mortgage balance is about $323,000. The sequencing logic here is that retirement investing at 15% comes first, then accelerated mortgage payoff.
The current federal funds rate sits at 3.75%, and the 10-year Treasury yields 4.42%. A 5.99% mortgage on the investment property carries real cost in a market where the 10-year Treasury yields 4.42%. Paying it off before retirement investing would cost E and his wife years of compounding at the exact moment compounding matters most.
Who This Advice Fits — and Who Should Think Twice
The Baby Step 4 framework works cleanly for someone in E’s position: high income, no consumer debt, a clear runway to retirement. At 38 years old with a 27-year horizon to 65, the math on consistent monthly investing is powerful. The hosts recommended Solo 401(k)s and working with a SmartVestor Pro to structure the accounts correctly, which makes sense given the self-employment income.
The advice fits less cleanly for someone earlier in their career with variable income. If the $360,000 is tied to two businesses that could have a bad year, locking into a $4,500 monthly investing commitment requires an honest assessment of income stability. The national savings rate fell to 4% in Q4 2025 — a reminder that most households are not in a position to invest 15% of gross income. E’s situation is genuinely unusual, and the advice reflects that.
The Step That Actually Comes First
If you are in a similar position — high income, late start, debt still on the books — the sequence matters more than the dollar amount. Confirm you have an emergency fund in place (E had $82,000 saved, which covers this). Then calculate 15% of your gross income and start there, using tax-advantaged accounts first. A Solo 401(k) allows self-employed earners to contribute both as employee and employer, which raises the annual ceiling considerably above a standard IRA limit.
The core lesson from E’s call is simple: Invested income builds wealth. Earned income sitting idle does not compound. At $360,000 a year with nothing saved, the gap between earning and building had grown for two years. The moment to close it is the one you are in right now.
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