BREAKING: New Fed Data Reveals How Your Money Compare To Others Your Age

⁠⁠⁠⁠How does your income, net worth, and retirement savings compare to other Americans—and are you still middle class? Brian and Bo break down the Federal Reserve’s Survey of Consumer Finances figures discussed in this episode, covering family income, retirement account balances by age, cash savings, homeownership, and debt. Discover why higher incomes and growing investment accounts can coexist with financial strain, what the middle-income range means, and where comparisons can mislead you. Whether you’re building an emergency fund, paying off credit cards, or investing for retirement, use these numbers for perspective as you work toward your own financial goals. Jump start your journey with our FREE financial resources⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠Reach your goals faster with our products⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠Take the relationship to the next level: become a client⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠Subscribe on YouTube for early access and go beyond the podcast⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠Connect with us on social media for more content⁠⁠⁠⁠⁠⁠⁠ Bring confidence to your wealth building with simplified strategies from The Money Guy. Learn how to apply financial tactics that go beyond common sense and help you reach your money goals faster. Make your assets do the heavy lifting so you can quit worrying and start living a more fulfilled life. Learn more about your ad choices. Visit megaphone.fm/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Speaker 00

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• 0:47Brian Preston?

  Here's a question. Are you still middle-class according to the Federal Reserve?

• 0:52Speaker 04

  Brent, I am so excited about this. Not because I like defining class systems or stereotypes, but more, there is some really interesting data that's just come out that does not come out every single year. And so when it does come out, I think there's some interesting stuff that we can glean from, and this year was no different.

• 1:10Brian Preston?

  Yeah, just to kind of bring everybody up to speed is that I do get excited about some of these data points that come out every few years. The Federal Reserve, if y'all remember, we did content a few years ago when it came out because it was 2022, and we looked in and net worths were up close to 40% across the board.

• 1:30Speaker 04

  We were like, holy cow, finally, maybe the American public is realizing, hey, instead of spending every dollar that comes in, we ought to start saving a little bit of this.

• 1:39Brian Preston?

  But we found out it was more inflationary because it was housing values had gone up 37 to 40% and people had ridden that up. So here we are, fast forward three years, we got 2025 data. It will be interesting to see what data we can pull out of this so you can look at your own life and see if there's something to learn from this.

• 1:58Speaker 04

  And it's worth thinking, I mean, when we think about the last three years from sort of an economic and financial perspective, before we go through these numbers, you ought to ask yourself, how are things? Are things generally better feeling or worse feeling? What do I think these numbers are going to show? Because Brent, I thought it was kind of interesting when we compare where we are today, given what we know is transpired over the last three years versus where we were three years ago. So let's start just by talking about median family income. So when we look at Americans in general, back in 2022, the median family income was about $76,900. In 2025, the new data just came out, it has now increased up to $82,000. So a 7% increase over a three-year timeframe in 2025.

• 2:41Speaker 04

  Not horrible, maybe not super keeping up with inflation, but still positive movement in the right direction.

• 2:46Brian Preston?

  Okay, and then net worth, if you bring up median net worth, 211 to 216.

• 2:52Speaker 04

  I'm not excited about this. This one didn't give me this. How about this one? Median retirement account balance in 2022, $95,200. In 2025, $106,000. That's a double-digit increase, 11%. That's a good thing, right?

• 3:07Brian Preston?

  When you were doing the intro and you were like, so everybody look at your own life to figure out how this all pertains. I think this one here on retirement balances, if you really dug into the data like we did, we're kind of nerdy that way. This is what was so interesting. If you look at this by age category, look at the under 35, and this is the one, look, guys, I tell you all the time, we have lots of grace for our people under 35 because it does feel like if you look at who are the losers or the generation that's been impacted the most by the high inflation that we had post-pandemic, it's definitely the people under 35 because housing is way up, there's all kind of affordability, interest rates are way up, all these things. That's why you're seeing, you are seeing retirement balances for those under 35 actually

• 3:52Brian Preston?

  went down 10%, which is not what we want to see. For those 35 to 44 was up 18%, 45 to 54 up 21%. These are the people who are starting to get nervous about retirement. And then those probably in retirement is up 14%.

• 4:08Speaker 04

  Now, interestingly, Brent, when I see these numbers, I want to get super excited, but I don't know if the reason that these numbers are up are because people are doing better, they're saving more, or is this just a product of, if you think about the market from 2022, which was a bear market, a down year, coming through 23, 24, 25, and now almost through 26, the markets have done pretty well. So I don't know that this is so much because Americans are doing a better job putting money in their retirement accounts. I think it's just a function of the account's increase.

• 4:36Brian Preston?

  Yeah, hang in there and watch because I think as we close out the show, we actually have an overlay with the S&P 500 so we can answer that question.

• 4:43Speaker 04

  We'll look at some other, again, taking the snapshot of Americans. We'll look at homeownership. The homeownership rate in 2022 was 66.1%. It's actually down, not surprisingly, in 2025 to 65.6%. But I'll be honest, Brent, that's not as big of a drop as I would have guessed, given where interest rates and home prices are.

• 5:03Brian Preston?

  Yeah, if you just historically, the highest that number's ever been was back in 2004 at 69.1%. So back to pointing towards affordability with high interest rates and then coming out of that post-inflation, it's just homeownership is really taking a beating.

• 5:19Speaker 04

  All right, and then when we look at median savings, now this is not like savings rate, this is transactional cash on hand on the median. It was $8,800, now it's down to $8,200. So a 6% decrease of how much cash people are keeping on hand. And this includes checking accounts, same-day accounts, money markets, all of those types of things. I, personally, I don't think that seeing 8,200 there is a good thing.

• 5:46Brian Preston?

  Yeah, and then I'll close out this slide with just median debt, but this doesn't tell the whole story. Look at 2022, we were right around $88,000, we're still right around the $88,000. So this looks pretty flat, but we're going to go a little deeper into what does debt look like for Americans? But I'll tell you, the vulnerability stat, meaning how many people are delayed on paying their bills and so forth? Stick around with us because that is the one that a few alarms went off as mans. A lot more people are struggling just to get these bills paid off.

• 6:16Speaker 04

  Eye-opening and even heartbreaking. But let's talk first about the debt problem, which likely leads into that. When we look at the average American, the share of Americans right now carrying a balance on their credit card, so not paying it off in full every year, but actually, actually carrying a balance year over year has dropped from 45% down to 44%. So you'd say that's good, I guess, but it's still 44% of consumers are carrying a credit card balance, not ideal.

• 6:45Brian Preston?

  Yeah, and then median balance, pretty flat, $3,03100. Interest rate, look at this, this is a big shocker, and this is just sign of the times with interest rates. Close to 15% has gone up to 21%. You know, look, in a good year, we're hoping we make 10% on our investments. There's no way you'll ever get ahead if you're paying someone a bank 21%.

• 7:04Speaker 04

  Very similar things when we think about auto loans. For those who have an auto loan, the share of folks that have an auto loan is 32% down from 34% three years ago. The median balance has stayed pretty flat, right at $17,000. But again, sign of the times, interest rates, it was 4.9% was the average interest rate on automobile loan three years ago, and here we are today, average interest rate is 7.7%.

• 7:30Brian Preston?

  Yeah, when you see those interest rates, that's probably attributes to why you see less, you know, car loans. People would rather own these cars with cash, which we'd also prefer. Buy now, pay later, look at this one. This one is a big one. We went from families, 7% of people had discovered buy now, pay later back in 2022. Now it's 12%. That's almost doubling, and the median balance is a little over $400 on that.

• 7:54Speaker 04

  That's right. So, okay, you said, Brent, a second ago, obviously, America has a debt problem, and this is less than ideal. Well, I think what ends up happening is with this debt problem, it really highlights this idea that people are a lot more vulnerable than we realize. And there were some financial vulnerability stats in here that I thought were a little mind-blowing.

• 8:16Brian Preston?

  Yeah, look at this. Behind on any loan payment, back in 2022, it was 12%. Now we're up to close to 20%. That's a 61% jump.

• 8:27Speaker 04

  It's unbelievable.

• 8:27Brian Preston?

  60-plus days late was 4.9%, now it's 8.2%. It's a 67% jump. Median debt payments, I mean, that's even up 15%. I mean, debt payments above 40% of income. You know, we talk about trying to keep your housing costs down. We talk about, you know, why you have to have some margin there so you can save for retirement because of housing and other things. Imagine this, if your debt payments are greater than 40% of your income, like 9% of Americans are now, that's a 32% increase, how do you have money to do anything else?

• 9:03Speaker 04

  Yeah, it's

• 9:05Speaker 04

  I don't want to say tragic, that may be too aggressive, but these numbers are not trending and moving in the right direction. Not only are Americans racking up more debt, they're having a hard time paying it off. They're having a hard time navigating. And so the question becomes, or at least the question I'm trying to answer is, okay, are you middle class? When you think about where you fall right now, are you middle class? Are you lower income? Are you upper income? Well, according to Pew Research Center, they often define middle income as earning between two thirds and twice the median household income, adjusted for household size. So if we're gonna use that same math, let's talk about where quote unquote, the middle class was in 2022. If the median family income in

• 9:45Speaker 04

  2022 was right at $77,000, that means that the middle class range for middle class earners had been somewhere between $51,000 and $154,000. So now, fast forward to 2025, if we do the same exact mathematic, median family income in 2025, right at about $82,000, that would put the middle class range somewhere between $55,000 a year and $164,000 a year. So it has increased, it has slid a little bit up the income spectrum, but roughly the same as it was three years ago.

• 10:20Brian Preston?

  Yeah, and I want, I think, you know, let's bring this, this home so we can start taking some questions and answers to talk about what people actually have going on in their life. There are a few key takeaways here is, first of all, retirement account balances are up, but it's likely not because of savings. And Bo alluded to this earlier. If you look at the Vanguard account balances, because we thought this was a nice overlay, we've used this on other shows. If you look at this, this perfectly shows you how even, even with companies like Vanguard with a report 401k and so forth, retirement balances, you can see how market performance drives a lot, including what's going on in the Fred data, because you can see in 2021, the average account balances were 35,000, but then, all

• 11:03Brian Preston?

  of a sudden, we had 2022, which was a down year with the stock market. Look at the S and P 500 overlay. You see the market went down, all of a sudden, average balances went down to 27,000. The exact same things happened, you know, from 2023, 2024, 2025, those were all pretty good years, except for that first quarter of 2025. It is amazing when you look at that overlay. Everybody's like, 2025 was a good year, not the first quarter.

• 11:29Speaker 04

  Not when you think about the first quarter.

• 11:30Brian Preston?

  But it's, it is one of those interesting things is that I think you can do the exact same logic is look at the Fred data, the Federal Reserve data from 2022 to 2025, and you realize that increased retirement account balance didn't have much to do with behavior. It had more to do with just good performance with the stock market.

• 11:46Speaker 04

  So it is a positive, the market's increasing, but be mindful, if the only reason your account balances are going up is because the market's doing its hard work, reassess, am I saving the way I'm supposed to be doing? Am I putting my money where it's supposed to be going? I think another big takeaway is that those folks with debt right now, the people who do have credit card debt, or auto loans, or student loan debt, or fill in the blank, they're struggling. And it's difficult, and it's hard, even for them just to keep their heads above water right now. That's why we saw so many people in delinquency, or so many people paying late. It's a real consumption problem that we have right now in this country.

• 12:22Brian Preston?

  Yeah, and then I'll, I'll close it out with the hard, cold truth, which is, America has a savings problem. Look, I get there's, there's hard things going on with housing and so forth, but you can only, you, you focus on what you can control. And I would encourage everybody, even in these difficult times, you know, start somewhere. If you're in your twenties watching this, at least make sure you're getting that employer match, that's step two of the financial order of operations. And then let's try to then work towards maxing out our Roth IRAs, and then even putting more into the 401k. You've got to do something. You do not want to be average, because it is the, it's the average consumer that wakes up in their 60s and realizes, holy cow, I just didn't do enough in my twenties,

• 13:03Brian Preston?

  thirties, and forties to prepare for today. So I get it, we live in a consumer and consumption society, but you've got to do something. Just make something happen. Give us 5% and it will literally change your life.

• 13:16Speaker 04

  And when we answer the actual question, you know, has the middle class changed? Mathematically, yeah, it has. The, the income to be middle class increased about 7% on average across, from 2022 to 2025. But does that really matter to you? And I'm going to argue no, because we know a lot of people, Brian, who might be on the lower income threshold of that income range, and yet, they're living fantastic lives, doing the things that they want to do, saving the way they want to be saving, experiencing the things they want to be experiencing. And we have other folks that are higher on that end of the spectrum, or even above that spectrum, that are nowhere, nowhere where they need to be financially. And so when it comes down to what you're doing with your financial life, it really doesn't matter if you're classified as middle class, doesn't matter if you're classified

• 14:01Speaker 04

  of lower income or higher income. What matters is, are you a financial mutant? Are you doing the things with your dollars that you ought to be doing? Are you building for a great, big, beautiful tomorrow? Or are you just becoming a statistic, just like the average American around you? And I think that our audience is so unique, Brian, and we're going to talk about this more in some content we have coming up. You guys are different. You guys are not the statistics. You are the financial mutants, the reason that your financial life looks different than your peers.

• 14:30Brian Preston?

  Yeah, I think you have to choose your hard, you know, you can make really disciplined decisions while you're in your twenties and thirties, and especially if you're in that wealth window of 32 to 48, that we've talked about and done great content on. Even if you're in the messy middle, do something, because little decisions today can have huge results in the future. And if you want to get motivated, I encourage you, go check out that we did it, we asked 20,000 Americans how they manage their money. That's you, financial mutants. And wow, oh wow, if you're trying to figure out a pace setter for yourself, go and look at what our financial mutants are doing. I think it will really challenge you to try to be the best version of yourself.

• 15:07Speaker 04

  Brian, I love that we get to do this. I love that we get to sit here and we get to look at the Fed data, we get to go through survey stuff, we get to analyze that. But I also love that we can sit here and answer questions that you guys care about, the things that are most important to you. So if you have a question, you want to get our take on, you want us to weigh in on, we have the team out in the wings, ready to collect those questions. So make sure you get them in the chat right now. With that, Creative Director Rebe, I'm gonna throw it over to you.

• 15:34Speaker 05

  I've got some questions flowing into the hopper, but first, we have to celebrate really quick. In this episode on Friday, you mentioned we didn't have any abound clients in Vermont, and we said, Vermont, let's go. We need you to show up. And they did. As of this week, we officially have clients in Vermont, which puts abound wealth in all 50 states.

• 15:58Speaker 04

  That's wild.

• 15:59Speaker 05

  So we brought you guys a pancake breakfast and some Vermont maple syrup.

• 16:03Brian Preston?

  It smells beautiful.

• 16:04Speaker 05

  To celebrate.

• 16:05Brian Preston?

  I will, I will warn you. Temperature wise, I think this has been hanging out in the, in the editor's room for about an hour and a half. Based upon, based upon the, the spot check here, and the butter is not, it's not spreading.

• 16:18Speaker 04

  Oh, no, that spread pretty good, dude. That, here's what's so cool, Rebe. So obviously, we are, you know, we're, this is live right now. We can't eat this. Like, we have to answer questions and stuff, like.

• 16:29Speaker 05

  All right, bring it over here, let's go.

• 16:30Brian Preston?

  Oh no, I'm eating it.

• 16:31Speaker 04

  Are you about to eat right now?

• 16:32Brian Preston?

  Yes. Do you not know how the beautiful chemical reaction of if you put maple syrup and bacon together? Beautiful things. And then, because properly, did we get, where did we get these biscuits from? Are these buckets? Pockets?

• 16:47Speaker 04

  All right, all right.

• 16:48Brian Preston?

  So look, look, sop it up.

• 16:49Speaker 05

  He's giving a whole demonstration.

• 16:53Brian Preston?

  Put you a little bacon on there.

• 16:54Speaker 04

  Sop, that's a verb that a lot of our audience may not be familiar with. It means to carefully drink.

• 17:00Brian Preston?

  We'll start off, we'll do this southern style biscuit.

• 17:02Speaker 04

  Mm.

• 17:03Brian Preston?

  Mm. Then we're gonna get into that pancake with that maple syrup.

• 17:12Speaker 05

  All right, while you're sopping and digging in, I'm gonna ask a financial question. Bo is ready to go. Brian's chowing down.

• 17:21Brian Preston?

  It'll be fine, I'll be ready.

• 17:22Speaker 05

  But Bo is ready to answer Alex's question.

• 17:25Speaker 04

  I'll give you a dollar if you can, if you can finish the whole plate.

• 17:27Brian Preston?

  No, here's, here's where we've run into a material problem. The plastic fork. Anybody who's ever tried to cut pancakes, especially room temperature pancakes, you know, this is, this is a, an exercise in, in not working.

• 17:40Speaker 05

  All right. The question says, hey, Money Guy team.

• 17:44Speaker 04

  You gotta finish it.

• 17:45Speaker 05

  I'm giving a 30-minute personal finance talk to eighth graders tomorrow.

• 17:50Brian Preston?

  One more bite.

• 17:51Speaker 05

  If you could, oh my goodness. This is a good question, too. Alec, I am so sorry. You have a great question, we're gonna give you a great answer.

• 17:59Speaker 04

  Do you see all the crumbs? Do you see, you ate like a Tasmanian devil right here. Do you see this?

• 18:05Brian Preston?

  That's Gary's fault.

• 18:06Speaker 04

  That's.

• 18:10Speaker 05

  Well, for whoever's still here, here's a finance question.

• 18:16Speaker 05

  It says, "Hey, Money Guy team, I'm giving a 30-minute personal finance talk to 8th graders tomorrow. If you could only land three ideas with them, what would it be?"

• 18:28Speaker 04

  All right, three ideas. Here's what I want you to do, Brown. Well, will you pull up for me? Because an 8th grader is gonna be, what, 13 years old? Is that the age? Is that the average age of an 8th grader, right around there?

• 18:39Speaker 05

  Right around there, yeah.

• 18:39Speaker 04

  Will you pull up the wealth multiplier for number 13? Alec, here's what's so beautiful. By the time a child has gotten 8th grade, they've likely already learned about multiplication. They've learned about compound interest. They've likely learned about exponents, you know, depending on where they are in their curriculum. So, these kids can probably understand the mathematical concept of what happens to our dollar. So, if I'm talking to them, I want to make the math very, very real for them. And I want to say, hey, do you realize right now, if you are cutting grass, if you're babysitting, if you're trash can valeting, if you're scooping poop in neighbors' backyards, and you get a little bit of money, if you can just choose to put a little bit of that money to work for you over the long term, every dollar at age 13,

• 19:23Speaker 04

  where you are right now as an 8th grader, has the potential to turn into...

• 19:27Brian Preston?

  $177.

• 19:28Speaker 04

  $177.

• 19:31Brian Preston?

  Twice what a 20-year-old can do.

• 19:33Speaker 04

  I may even do something silly like a magic trick, like trying to turn $1 into $177, just to have it sink in how powerful it can be because they're starting so, so, so young. So, the very first thing that I'm gonna try to communicate to them is the wealth multiplier, the idea that their money can do something miraculous if they give it the time to do that. That's the first one I would say.

• 19:56Brian Preston?

  Yeah, and then even if you want to tell them, hey, how many of y'all want to be a millionaire? You realize for a 13-year-old, they only have to save $47 a month.

• 20:03Speaker 04

  It's unbelievable.

• 20:04Brian Preston?

  That's how you turn that $177 into even more powerful concept is because you ask them, if any of you want to be a millionaire, all you have to save is $47 a month. And I think a lot of them can, they can grasp what $47 is because that's probably just cutting one yard or two yards a month or babysitting, exactly. Bring it into those terms. And then let's focus on the three ingredients of wealth. The first one is discipline. You know, a lot of times when I talk to high school classes, I'm always telling them this magical power of deferred gratification. If you can learn to live on less than you make, which you'll already be just leaps and bounds ahead of your peers because most Americans live paycheck to paycheck. So, discipline, deferred gratification's the most important thing because that creates margin.

• 20:48Brian Preston?

  So, then you can have money or assets to start investing. And then, given it enough time, it will turn into something magical. And that's bringing it full circle back to the wealth multiplier.

• 20:59Speaker 04

  All right, so number one, we have a wealth multiplier. Number two, we have three ingredients. And I'll give you the third one. Now, look, this is a little bit of a hot take. I think this is so important. And look, it's gonna seem like it's premature, but I don't think it really is, especially for 8th graders. I would begin impressing upon them the idea that money is nothing more than a tool. My daughter, my nine-year-old right now, is obsessed with this idea. She says, "Daddy, hey Daddy, are you a millionaire? I know you're a millionaire, Daddy." And I'm like, baby. So, I try, I'm like, "Hey, why? What's it mean to be a millionaire? Why does that...? What's the thing?" And so, she'll kind of walk me through that. I'll be, "Okay, why does that matter? Okay, why does that matter? Okay, why does that matter?" And I want her to understand that numbers on a page are not the important thing. It doesn't matter how much money someone has. It matters, okay, what does that allow you to do?

• 21:43Speaker 04

  Does it allow you to create memories with family? Does it allow you to do this? And so, I'm trying to impress upon her that even though I want them to understand money is an important thing and it's super, a powerful thing in the world in which we live, it is not the end-all, be-all. And there's gotta be a why behind the reason we're making our decisions. Why every time she gets money, every time money comes in, we go through give, save, spend? Hey, why do we give? What's the reason? Hey, why do we save? What's the reason? Hey, why do we spend? What's the reason? And I want her to really grasp the idea that it's not a goal. It's not an idol. It's not this thing should be put on this pedestal. It's simply a tool that allows us to do the things that we want to do. So, I think if you can get, you know, hit them with the math, hit them with the behavior,

• 22:28Speaker 04

  and then hit them with the philosophy, I think those 8th graders will be incredibly well off if you do that.

• 22:33Brian Preston?

  I do have one. I think Bo just closed it with that third. I think I'm gonna encourage you to have four points because I think there's one more that you ought to put in after the three ingredients to wealth. And that's just the beauty of, instead of trying to beat the market, just being the market. And I always tell people, look, envision that you're in Epcot and you're riding Spaceship Earth and you're going up into the big, you know, golf ball. And, you know, you start off with the Willie Mammoth, you know, but then we, you know, discover paper and with the printing press. And then, you know, you got, whether it's gates or jobs in the garage that they're kind of making as they show computers, is that I want you to envision is how slow innovation has occurred over history and how, I really do believe in what's called

• 23:17Brian Preston?

  the law of accelerating returns is meaning things are speeding up at faster and faster paces to where now you, you, the younger generation, has the potential to be a part of this growing economy. And just show the beauty of what, just investing in something simple like the S&P 500 can do. And it's just, it's an optimistic outlook because, look, for young people, they have everybody in the world telling them why the system is against them. And I'm here to tell you that small, small decisions can create huge results if you just harness that power of what's coming. Owning stuff is the secret to success.

• 23:58Speaker 04

  Love that.

• 23:59Speaker 05

  Alec, thank you so much for your question. We'd love to send you a Money Guy Tumblr. Just email [email protected] to cash in on that.

• 24:07Brian Preston?

  Oh, no, you know, because that's what... Y'all don't realize, I fast in the morning. So, when they slap down here some pancakes, even room temperature pancakes and a biscuit, you know, I'm willing to give it a go.

• 24:20Speaker 04

  I stopped fast. I used to do that. I used to do intermittent fasting every morning. I had to stop doing it. I feel so much better not doing it now.

• 24:26Brian Preston?

  Well...

• 24:27Speaker 04

  Because I had a big breakfast now.

• 24:28Brian Preston?

  It's also, Bo, y'all have to realize, Bo wakes up like at 2:30 in the morning so that he can go work out at 4:00 in the morning. He does all these crazy things. So, he's probably already done, you know, a gazillion things in the day before it's even 7:00 a.m. So, his body does need the food. My problem is I'm fluffy right now. And you see, I have zero willpower. I mean, who else took an audit of their kid's Halloween basket? And like took all the Take Fives, Almond Joys. Those things were just gone night one because I went in there and I don't know why. Almond Joys, they used to be everywhere. Now, my daughter went out and I got two Almond Joys out of the entire huge bag. Snickers, Snickers are having a banner year.

• 25:12Brian Preston?

  If we were doing a market of probably 70% of candy bars are now Snickers. And then, I don't know, Take Five, which are Reese's with pretzels in them. This is a magical candy, but nobody's giving them away at Halloween.

• 25:25Speaker 04

  You know what I told myself? I told myself, I'm gonna allow myself one type of candy, not one piece, but one type. So, this Halloween, I've only been stealing my kids' Twixs. You know, like the little mini Twixs? That's the only, I was like, that's... I'm picking that this year because I wanted to go, I didn't want to go with Almond Joys because there only gonna be a handful of them. I don't know, I don't know why Almond Joys are a thing anymore.

• 25:45Brian Preston?

  I know how many exactly.

• 25:46Speaker 04

  But Twixs are like, okay, that's a, you know, it's like, there's left ones, there's right ones. Yeah, that's what I did. And I don't feel guilty. I ate the little like bite. I'm like, ah, it's a little, it's a little thing. It's a little thing.

• 25:58Brian Preston?

  How about you? Did you eat any Halloween candy?

• 26:01Speaker 05

  A little bit, yeah. I had a Twix, some gummy bears.

• 26:05Brian Preston?

  Do people like Twix?

• 26:06Speaker 04

  You don't like Twix?

• 26:07Speaker 05

  Yeah, it's great.

• 26:08Brian Preston?

  It's okay. It's not a Take Five.

• 26:10Speaker 04

  What's...

• 26:11Speaker 05

  Honestly, I didn't get many Twix because my husband kept eating them.

• 26:14Speaker 04

  A tier. Twix is somewhere between S and A for me.

• 26:17Speaker 05

  Yeah.

• 26:17Speaker 04

  It is somewhere between those.

• 26:19Speaker 05

  As far as just like generic Halloween candy?

• 26:20Brian Preston?

  It's cookie with caramel and chocolate.

• 26:22Speaker 05

  Yeah.

• 26:23Speaker 04

  Buddy, you just explained the recipe that makes it wonderful.

• 26:27Speaker 05

  What's not to like?

• 26:28Brian Preston?

  It's definitely C.

• 26:31Speaker 05

  All right, well, we're gonna move on to Shay's question. And in the meantime, if you're watching live, be sure to get your rapid-fire questions in. Just put RF at the beginning of your question in the YouTube chat, and we will be pulling some of our favorites, the best, whatever you want to call it, to use for our rapid-fire segment soon.

• 26:48Speaker 04

  Was the day a Tumblr day?

• 26:50Speaker 05

  Yeah.

• 26:50Speaker 04

  Did you give Alec a...

• 26:51Speaker 05

  I did.

• 26:52Speaker 04

  Did you hear that?

• 26:53Speaker 05

  Yeah, we're busy.

• 26:54Brian Preston?

  I was still probably processing, chewing my biscuit.

• 26:57Speaker 05

  All right, well Shay S. has a question.

• 26:59Brian Preston?

  How good would a biscuit right now with maple syrup on it be?

• 27:02Speaker 05

  It says...

• 27:03Speaker 04

  Honestly, I hope that'll throw it away. I'm gonna eat it after the show.

• 27:05Speaker 05

  I expect the same tax rate in retirement. What factors should I consider when picking Roth versus traditional? 11 years until retirement. Any blind spots to be aware of?

• 27:18Brian Preston?

  I would like to ask Shay, why do you expect you're gonna have the exact same tax rate in retirement? Because the reason that we make the assumption that tax rates create an arbitrage situation in retirement is because most people have earned income, meaning you have a job that you eventually retire from, and that creates the arbitrage. Are you already investor class Shay? Or do you have a daytime job? Because I need a little more, this is where the depends comes in is because I need to know why you say your income's gonna be the exact same in retirement.

• 27:47Speaker 04

  Yeah, because the factors, the factors I'll think of is if I think my income's gonna be the same, which side of that equation am I on? Am I on the like 37%? I'm in 37% tax bracket and I think that I'm never gonna be below that, right? All right, well, then, if you believe that tax rates are going to increase, not just your income, but the actual brackets in which you operate are gonna increase, then yeah, I could see why you would want to say Roth. But if you're in the lower tax brackets, 22%, 24%, you know, somewhere in there, you have to think about, do I think that my income is gonna go up and that's gonna cause me to bracket up? Or do I think there's gonna be a shift? And if the shift happens, how close to the thresholds am I? Because it's really interesting. When you look at like tax policy and tax adjustments, they don't always happen equally across all the tax brackets.

• 28:31Speaker 04

  So, I would figure out for the bracket that I fall into, how likely is it that that bracket is going to see an increase? Again, if you think about, the top tax bracket used to be 39.6% and it came down to 37%. And there's an idea that perhaps one day 37 will go back to 39.

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• 29:29Speaker 04

  You have to figure out where do I think I'm going to fall there? And realistically, am I not going to have some ability to manipulate that in the future? And when am I going to need to use these dollars? If I'm going to start saving in Roth and building in Roth, is that more for my future self to use those dollars tax-free? Or is that more of a legacy estate planning thing where that's going to be the assets that I want to leave to the second generation at some point in the future? I think you have to kind of like meld all those different ideas to truly see what your income is most likely going to look like when you get to retirement.

• 30:01Brian Preston?

  I have no problem. You're 11 years from retirement, so that probably puts you in your 40s or 50s. If you, if you look at your situation and you're just, and you're way ahead of the curve, you know, use our know your number tool to figure out if you're ahead of the curve. If you want to start thinking legacy planning wise and loading up on Roth dollars because you think it's, because it is better for your children to inherit Roth dollars versus traditional because of the tax-free growth and the 10-year deferment on that. But the other opportunity you might want to think about is are you going to have any years in retirement, at least in the 20%, 22% bracket? So you can think about Roth conversions as well, because that is, these are the, all the things we take into account as we're looking at people's financial situation.

• 30:45Brian Preston?

  Cause the blind spot you might not or are already thinking about, when you hit 75 and have to take those required minimum distributions, we won't want to be a tax bomb on you. So we have to try to begin with the end in mind.

• 30:57Speaker 04

  That's what I say, a lot of people that think about, oh, well, in retirement, you know, I would spend, spend a hundred thousand dollars while I'm working, when our time is spent a hundred thousand dollars. That's the tax bracket I'm going to be in. A lot of people forget that RMDs can artificially push you into higher tax brackets, even if you don't want to be there. So even projecting out, if you're 11 years away from retirement, let's assume you're retiring at 65, so that puts you at 54 years old. You get a 20-year runway before you're going to hit RMD age? Make sure you're modeling that to determine where you think it might make sense for you to be. Cause I think I'm seeing in the comments, a lot of people, oh, I'm going to have a pension. I make good money now and I have this pension, so I'm going to stay in the same place. It's not just about how much tax you pay any given year. What do I pay in the first year of retirement, second year of retirement?

• 31:39Speaker 04

  We try to think about what's the total lifetime tax bill I'm going to pay? And how do I optimize that or how do I minimize that in a way that makes the most sense for me?

• 31:50Brian Preston?

  But even, even in taking into account pensions, some states don't tax pensions the way, the same way they tax earning income. Like state of Georgia has a huge retirement exemptions for pension and social security and so forth. So all that comes into play and then you asked for additional blind spots. You know, if you use Bo's example, you're 55 and retiring at 65, Medicare kicks in and you have to worry about Irma surcharges and other things. Taxability of social security, all these things. This is what, what my favorite thing Shay is, this is when we're working through this with a client is these are the complications of success. And that's why we, we love helping clients. Cause often when clients get into retirement, you, if you ask yourself, what is my financial planner doing for me every year?

• 32:33Brian Preston?

  A retiree doesn't have to ask that question because if you look at the amount of tax projections and tax conversions and other things that we're having to do in those retirement years, this is exactly what we're talking about is that enjoy your simple life and all of our free resources. But when you get to the level where you have to actually to put, you know, the rubber hits the road of you actually executing some of the tax strategies. This is when we, we really do great work, I think, for clients.

• 32:58Speaker 04

  Love that.

• 32:59Brian Preston?

  It's definitely a complication.

• 33:01Speaker 05

  Shay S., since we answered your question, you qualify for a Money Guy Tumblr on us. Just email [email protected]. All right, next up is Ria's question, then we'll get to rapid fire. Ria says, for the 3525 rule, which is our home buying rule, what all is considered as part of that 25%? Is it just PNI, PITI, PITI and maintenance? Do we consider utilities, HOA fees? There are many quote unquote hidden costs of house ownership. So she's looking for some guidance on how to think about this.

• 33:38Speaker 04

  The way I would answer this question is this is a little bit like Burger King. You get to have it your way when you think about how you want to, how you want to design this. When we originally came up with 3525, the idea was that the 25% was going to cover PITI, principal interest.

• 33:56Brian Preston?

  I was just going to circle the middle one.

• 33:58Speaker 04

  Principal interest taxes and interest, however.

• 34:01Brian Preston?

  That's exactly what the intent was.

• 34:03Speaker 04

  That was the intent, however, if you're someone who says, hey, I recognize that buying a house is way more than buying the house. There are maintenance fees, there are utilities, there are HOA fees, there are these other things. If you want to lump all of those in and make sure that the sum total of those is below 25%, that's great. We're not going to fight you on that because what that means is your PITI is going to be 21%. And then there's going to be 4% that covers those others. There's, there's nothing that says you have to go all the way up to 25%. So if you want to be super conservative of that and you can afford to do that, that's a wonderful thing.

• 34:35Brian Preston?

  I don't think that's where the majority of the people are. Most people are trying to make sure that they can at least get into a house. So they don't need to be super conservative. They won't, they won't as much flexibility. So the only one, I agree with you on PITI, but the only one that catches me is like condo association fees. HOA fees typically aren't that bad. There's a few neighborhoods with gated entrances and other things.

• 34:57Speaker 04

  There are neighborhoods here that have like $800 a month HOA fees.

• 35:00Brian Preston?

  Those are gated communities. So if you're living in a gated community, you should go by your, your conservative. But a lot of people live in condos and those condo association fees, that seems to be an affordable place to go buy and invest in. Then you look in those condo fees, you're like, holy cow. A lot of that's driven by insurance as well. So just go in with those. I would, I would probably add condo association fees to the PITI.

• 35:29Speaker 04

  Love it.

• 35:30Speaker 05

  Ria, thank you for the question. If you would like a Money Guy Tumblr, just email [email protected].

• 35:35Speaker 04

  Can we tell people that don't, that aren't familiar? If, if you're someone who is in the market.

• 35:40Brian Preston?

  3525.

• 35:41Speaker 04

  Oh no, I wasn't going to do that.

• 35:42Brian Preston?

  Okay.

• 35:42Speaker 04

  I mean, I can, but no, I'm not going to do that. If someone is trying to buy a house, we have, we have like a wonderful hub out there that will walk you through all things home. I have a home buying checklist, we have our house affordability calculator. We have tons of tools out there at moneyguy.com/resources where you can go check all of that stuff out. Just so you can, for most people, a house is the single largest purchase you will ever make. You want to make sure you make it well. And so we want to equip you with the tools to do that.

• 36:10Brian Preston?

  And we're proud, we didn't have to amend our rules. You know, there's a lot of gurus out there that got caught flat footed realizing how of home affordability. We had a no hypocrite policy. So we were in sharing from the get-go is that, hey, if we only put down 3% to 5% on our first house, why shouldn't we share that with our audience? What makes us better than our audience? No, we're like, no, we're not going to be hypocrites. We're going to tell people the truth. And that's aged beautifully because we're just transparent and honest. Whereas I think a lot of gurus, you know, have had to go and amend because they realize they're on the wrong side of things right now.

• 36:42Speaker 04

  Yep.

• 36:44Speaker 05

  With that, it's time for our it does not depend rapid fire segment where Brian and Bo will answer your questions in 30 seconds combined or less. And they are not allowed to say it depends, but don't fear. At the end of the segment, we'll make sure if anything was left unsaid to truly answer your question, we will come back to it. With that said, let's get 30 seconds on the clock and here is your first question.

• 37:09Brian Preston?

  Who's going first?

• 37:10Speaker 04

  You can go, you know what? You go first.

• 37:12Speaker 05

  You go first.

• 37:13Brian Preston?

  Beauty before age. I'm going first. It's fine. I know, I know. I know, go ahead.

• 37:20Speaker 05

  Let's just give him this one. Let's just let him have it.

• 37:23Speaker 04

  If you were the beauty, but aren't you also the age?

• 37:25Brian Preston?

  Maple syrup, sweet.

• 37:28Speaker 04

  But you, what? Wouldn't both of?

• 37:32Speaker 05

  Okay, question number one. When do you move from budget to cash management? Even with 10K per month, the budget seems necessary.

• 37:43Brian Preston?

  Yeah, I think it's, um, if you have automated savings already going into your 25% beyond and you've, your spending seems to be automated in ways that everything's landing where it's supposed to, that's cash management. If you need accountability, that's budgeting.

• 38:01Speaker 04

  When your budget becomes muscle memory, you don't have to think about it. You're naturally staying inside of your categorical items. You don't have to think about it a lot. You are probably at the point where you have, where you're ready to graduate to a cash management plan where you automatically pay yourself first. A little long there, guy.

• 38:16Brian Preston?

  That's what you do. It's always the risk when I go first.

• 38:18Speaker 05

  Next question.

• 38:19Brian Preston?

  I'm not, I'm not a short, short form content type guy.

• 38:24Speaker 05

  Why don't you like gold? I've seen y'all's talks with people and you seem to not like it.

• 38:30Speaker 04

  I do like gold fish. And if you don't follow us on socials or follow any of that stuff, you won't know what that means. But we did a great thing with it. Gold is, is wonderful, but it's a precious metal. It doesn't do anything. It doesn't create any value. The only thing that makes gold more valuable is if the person who comes behind you is willing to pay more for it than you paid for it. I struggle with that.

• 38:47Brian Preston?

  It's also an asset that you have to pay to keep it safe. And there's, there's carry costs with it. There's transaction fees with it and it's not going to generate interest, rental income or innovate whatsoever. It's only going to be worth exactly what Bo said, if somebody pays you more.

• 39:02Speaker 04

  We have a great video, Ruby titled Fools Gold. If someone types that into the search.

• 39:06Brian Preston?

  It doesn't show up anymore. It doesn't show up anymore. Thank goodness.

• 39:10Speaker 04

  Should we put a link in the money verse?

• 39:12Speaker 05

  That's from the archived archive archives.

• 39:14Speaker 04

  In the money verse to Fools Gold?

• 39:16Brian Preston?

  That would definitely be premium content because I'm embarrassed by it.

• 39:19Speaker 04

  It was.

• 39:20Speaker 05

  This was before.

• 39:22Brian Preston?

  This is 2011.

• 39:23Speaker 04

  2011 YouTube Brian is what you get if you want to go check out.

• 39:29Speaker 05

  Maybe we'll put it in the money verse. Go to moneyguy.com/moneyverse if you want to see that video.

• 39:35Brian Preston?

  We're going to put that, we're going to put that out in the money verse?

• 39:37Speaker 05

  I don't know, but people, if we decide to, the money verse will know.

• 39:41Speaker 04

  These are our people.

• 39:42Speaker 05

  That's the first I've heard of that idea.

• 39:43Brian Preston?

  That ought to be a perk for my new book coming out. You know, my hot day book is you get to see Fools Gold.

• 39:50Speaker 04

  I wish, I wish we had like a screenshot of like just the, the like of fool's gold. I wish I had a screenshot of the player for that.

• 39:59Speaker 05

  You guys are so verbose today and all days, but especially today. All right, next question. The revised book Millionaire Mission releases soon. Can you let people know how to claim their preorder perks for those who don't know?

• 40:14Brian Preston?

  Okay, so you're going to go to moneyguy.com/millionairemission. We have all the details there on how to actually make your claim. Look, I didn't need all 30, did I screw that up?

• 40:25Speaker 05

  Yeah, there's a place where it says redeem your perks. Click on it on that page and it'll tell you what to do.

• 40:30Speaker 04

  I love it. I have nothing to add. I have, that's where you go to get the perks.

• 40:33Speaker 05

  Comes out next week, so go preorder now. Perks will be gone next week, Tuesday, November 10. Next question. How should we adjust retirement planning if we have a 10 plus year age gap?

• 40:49Speaker 04

  Yeah, it's, you, you have to think about it a little more in depth. Meaning you're gonna, the way that you draw social security will be different than similar aged folks. The way you're gonna think about medical insurance will be different. This is one of those things, how do you do it? You have to think about it differently. That's a horrible, that's a horrible answer to that question.

• 41:06Brian Preston?

  The safest way is base it off the older, older person. It's gonna be the most conservative. If you have other things going on, we have to sadly say the big D word.

• 41:16Speaker 04

  Let's, let's come back.

• 41:18Speaker 05

  That was such a cop out, Brian.

• 41:20Brian Preston?

  No, but I gave the answer based off the older person. That's the most conservative answer.

• 41:25Speaker 05

  Okay, we'll come back to that.

• 41:28Speaker 05

  Next question.

• 41:29Brian Preston?

  Look, that's a definitely, it depends.

• 41:32Speaker 04

  You know, if, you know, happens if you base it off the older person. Let's say the person's 65 about to retire and you're gonna base the withdrawal rate based on a 65 year old. But then you have a 55 year old spouse who's perhaps gonna like have to like live longer.

• 41:44Brian Preston?

  Depends part.

• 41:45Speaker 04

  Yeah, like you can't.

• 41:46Brian Preston?

  Welcome to the wonderful world of personal finance and financial planning.

• 41:48Speaker 04

  I agree with it depends. I don't agree with like carte blanche.

• 41:50Brian Preston?

  But if you ask me for a 30 second answer, I'm gonna say base it off the older person. Because if you ain't got it, you ain't got it.

• 41:56Speaker 04

  This is one to come back to.

• 41:58Speaker 05

  Next question. 30 seconds on the clock in case you needed reminded. What fool mistakes have you gone, have you guys made early on or still make?

• 42:12Speaker 04

  I got mine.

• 42:13Brian Preston?

  I mean, I didn't fund my Roth IRA. I mean, in the book, I've, I detailed my, my Roth IRA mistakes because I was just, I was starting a company. I didn't have money and it was just, it was tight. So it was just, so I don't know if it was a mistake, but it's definitely a regret.

• 42:27Speaker 04

  Cash, I was always very, very lean on cash until really a couple of years ago. Just because I was one of those like hyper optimizers and I didn't love keeping it. But now I keep an abundance of cash because I've seen how valuable it can be when the world is falling.

• 42:44Speaker 05

  When the world is falling.

• 42:46Brian Preston?

  I did that one too. That one's also detailed in the book. Lots of mistakes in my book.

• 42:51Speaker 05

  Next question.

• 42:55Speaker 04

  That's why I went through the editing process.

• 42:58Speaker 05

  All kinds of mistakes there.

• 42:59Speaker 04

  You should buy this book because there's so many mistakes in it.

• 43:03Brian Preston?

  It shows you don't have to be perfect and you can still end up successful.

• 43:06Speaker 05

  New York Times bestseller, mistakes. Okay, when is the taxable account more important to fund than the retirement account?

• 43:16Speaker 04

  Most often when you're going to retire early, you need to have access to your capital. So if you're gonna retire before the age of 59 and a half or before the age of 55, I would argue that's when the taxable account begins to take precedence over continuing to fund a retirement account.

• 43:29Brian Preston?

  But this is why this is bull crap. If you're going to retire early, you have to have a savings rate greater than 25%. You're not even gonna get to after tax until it's 25% or greater. So you go through the financial order of operations, it's undefeated.

• 43:42Speaker 05

  Spicy.

• 43:44Speaker 04

  I don't, I didn't say to not do the financial order of operations. But there is a point in time, if you are doing all the things and it's all in your 401k, but you're gonna retire at 53, you're gonna be like, oh, man, yeah, I need to probably shift. I need to probably.

• 43:57Brian Preston?

  I needed, because there is content out there just telling everybody the most important account is your after tax. And it's, it's just, it's malarkey.

• 44:04Speaker 04

  I disagree with that.

• 44:05Brian Preston?

  It's because anybody who's retiring before 55 or so, you have to have an aggressive savings rate. So you, I would tell you, run through the tax favorite things like Roth stuff. I'm blowing up because we're not, this, this is all part of the it depends, but.

• 44:20Speaker 05

  I'm not really sure why we're doing this segment anymore. It's fun though. Okay. Next question, we are planning to build a house within two years. We have money in a brokerage account that could pay for 60 to 80%. Should we use that money to pay for the build or just borrow to build?

• 44:41Brian Preston?

  Oh goodness gracious, you know, this one, because I immediately had four questions pop into my head.

• 44:47Brian Preston?

  Pass.

• 44:50Speaker 04

  What I would do is I would, I would assess where am I today with my current financial situation? Do I have a ton of assets that are currently working for me? If using the taxable assets would not deplete my ability to grow towards financial independence, I could use those. If I need those assets working for me, then I would likely choose to finance it so that I can keep those dollars working over the long term.

• 45:13Speaker 05

  Wonderful.

• 45:13Brian Preston?

  Consider our know your number calculator.

• 45:16Speaker 04

  It's great for free.

• 45:17Speaker 05

  What do you guys think of margin loans against a taxable brokerage account?

• 45:22Speaker 04

  There's a time and a place. Margin loans are an example, another example that similar margin loan is called a security backed line of credit, where it's worked similar, but it's often underwritten by a bank as opposed to the financial institution. They are fantastic tools for like short term or bridge financing. If you're trying to sell a house by another house.

• 45:41Brian Preston?

  Yeah, it's short term in nature is what I would tell people if you're gonna use margin. Make sure you have enough income to where it's actually a deductible expense for you as well. And then pay attention to the interest rates. A lot of times it's negotiable.

• 45:53Speaker 05

  And last but not least, when does a SEP IRA make sense over a solo 401k?

• 46:03Brian Preston?

  I mean, it's easier to set it up a SEP IRA, but you, you might be leaving big savings opportunities on, on the table by just going the easy path.

• 46:11Speaker 04

  Um, I, I actually, I would argue, I think solo 401ks are just as easy to, to open up as the SEP IRAs. Now, the only time where I think that a SEP IRA might take precedence is if you have an employee. If you have one employee, you can't do a solo 401k any longer. If you don't want to set up a traditional 401k, you do a SEP, which is remember what you put in for yourself, you gotta put in for the employee.

• 46:31Brian Preston?

  I had a better answer on that too.

• 46:33Speaker 05

  Well, then let's start our, maybe it does depend segment with that one. What do you, well, what else do you need to say about SEP IRA and solo 401k?

• 46:40Brian Preston?

  Button makes sense is if you have, you work like a W2 job and your employer has a really good 401k that you're already loading up, but you have some side gig money, like maybe you're doing speaking engagements because you're an expert in something. Or you're getting hired to do side hustle stuff and, and you can open up a SEP IRA on that separate income source without any issues because you're not going, the 415 limits have already been reached at your work likely. So you don't even care about getting the salary deferral. So you just want to get the, the 20% profit. Does that make sense? 20, 25%?

• 47:13Speaker 04

  It does. I think in that scenario, if you're someone who's still like perpetrating like a backdoor Roth or something like that, I'd probably still say go with a solo 401k.

• 47:20Brian Preston?

  That's another complication.

• 47:21Speaker 04

  You can do the same profit sharing into the solo 401k that you can do in the SEP, so.

• 47:25Brian Preston?

  Yeah, that's, that's a good point is that I will tell you, I've, I don't try to, I try to avoid SEP IRAs as much as possible because they blow up the backdoor Roth conversion strategy. And that's, I love tax free money. So just be careful. If you open up a SEP, you're shutting down your opportunity to do backdoor Roth contributions.

• 47:43Speaker 04

  Yep.

• 47:44Speaker 05

  You also said you wanted to come back to, how should we adjust retirement planning if we have a 10 plus year age gap? There was some discussion that Brian especially seemed to not finish.

• 47:54Brian Preston?

  I was just gonna share, that's exactly the type of scenarios where you, you actually just have to model it out. I mean, look, I love the 4% safe withdrawal rate. It's a great napkin planning rule when you're in your twenties, thirties and even forties. But as soon as you get to a situation where you're counting on making the decision off of what you put together, you've got to actually put in actual, you gotta model everything. You, you've gotta put in, hey, when is this person quitting work? When is this person, what's the debt? What's the actual, how often are we buying new cars? What are we carrying on into the marriage? There's all kinds of complications, when are required minimum distributions? How much of the money is retirement accounts versus taxable accounts?

• 48:35Brian Preston?

  So we can think about all these strategies and then you lay it out and then you stress test it. This is, this is one more reason when I say, take advantage of our simple stuff as long as you can. But when life gets complicated, don't assume you can do this all yourself.

• 48:50Speaker 04

  I, I was gonna just echo that because even if you have these two people that are 10 years apart, you can have a bunch of couples that all have a 10 year age difference and the planning will look very different for them. Sometimes there is an older male spouse and a younger female spouse. Well, now you have like a mortality issue, assuming that, you know, they're gonna live to the average life expectancy. And one of those is longer than the other. So you have this idea that one person is going to retire earlier, but likely need assets longer. And then you have to factor in, okay, well, whose assets or what assets are in what names? And are they pre-tax? Are they Roth? Or the vice versa, if you have an older female and a younger male, then you have to factor the mortality from the other side.

• 49:32Speaker 04

  And it's really, really nuanced and it, there are a thousand different variables that go into how you do that well. Sometimes the answer is, hey, older spouse, you retire early and we're gonna let younger spouse continue working. And sometimes it is, no, older spouse, you retire early and younger spouse, also the reason why older spouse is retiring early. So they can begin retirement and do those things and live that life. And, and it's not always mathematical in these situations. We have a number of clients, Brian, where we kind of counsel them through, hey, this probably makes sense. Even though you might not be quite ready to leave the workforce just yet for the life you want to live and the things you want to do. If you're gonna have these like go-go years, this is the plan that makes the most sense for you. It, that one just gets so, so, so nuanced.

• 50:13Brian Preston?

  And even social security gets complicated.

• 50:15Speaker 04

  Social security or like all of the RMDs, it all gets very, very complicated.

• 50:19Brian Preston?

  And if any of these are, if this is because, because you sometimes see bigger age differences in spouses when it's second marriages. And that even creates another dynamic.

• 50:29Speaker 04

  Yep.

• 50:29Speaker 05

  Yeah.

• 50:30Brian Preston?

  By the way, we deal with all this.

• 50:31Speaker 05

  Yep.

• 50:32Brian Preston?

  That's why, look, I know people hate it when we just don't give answers, but it really is so personalized and custom when you get to these, these type of discussions.

• 50:40Speaker 04

  You could give me 30 minutes to answer that question and unless you give me all the variables, I wouldn't be able to do it.

• 50:45Speaker 05

  Right. No, well said. And then

• 50:48Brian Preston?

  Oh gosh.

• 50:49Speaker 04

  That right there.

• 50:50Brian Preston?

  Oh my gosh.

• 50:51Speaker 04

  That is fool's gold.

• 50:53Brian Preston?

  There is so much to take in from this, because I got a seed bank ad in the background. I've got literal ammunition on the table because I want everybody to know, hey, you gotta, you gotta keep this stuff safe.

• 51:05Speaker 04

  And instead of slides, we just pull it up on, and Brian, whose desk is that you're sitting at? You remember?

• 51:10Brian Preston?

  Was that your desk?

• 51:11Speaker 04

  Yeah, it was my desk.

• 51:12Brian Preston?

  Your desk.

• 51:12Speaker 04

  You remember why we use my desk?

• 51:13Brian Preston?

  You know what, when this was a public video?

• 51:15Speaker 05

  Oh, I know why.

• 51:17Brian Preston?

  Most people, their favorite thing about this video when it was public was I had some phantom, I reached for the mouse in the wrong place and everybody caught it.

• 51:25Speaker 04

  So maybe, yeah.

• 51:26Speaker 05

  This was their first YouTube video ever.

• 51:29Speaker 04

  First.

• 51:29Brian Preston?

  Hey, this is back when I used to wear luxury watches too.

• 51:32Speaker 04

  Yeah, look at that.

• 51:33Speaker 05

  Wow.

• 51:33Brian Preston?

  I was so proud of that.

• 51:34Speaker 05

  Did you wear it just for the video? Did you wear it just for the video?

• 51:36Brian Preston?

  No, I used to wear it every day back then. This is back, you know, this is how you can tell when you're wealthy versus when you were trying to look wealthy. Is that back then I was trying to look the part, even though I look like I'm 12 in that picture.

• 51:49Speaker 05

  Being wealthy is better than looking wealthy. They've lived it.

• 51:51Speaker 04

  We have lived that life.

• 51:53Speaker 05

  They know. That is funny.

• 51:56Speaker 04

  Good work, team.

• 51:57Speaker 05

  Good stuff.

• 51:58Brian Preston?

  Be careful what you ask around this team.

• 52:00Speaker 04

  Can, can I just throw one other thing out there for the margin question?

• 52:03Speaker 05

  May.

• 52:04Speaker 04

  Margin loans or security backed lines of credit, I'm gonna speak about them both interchangeably. They are fantastic tools, but I would argue, I just want to caution people, just because you can doesn't mean you should. Cause I see far too many people that begin to use that as a planning opportunity. Oh, I've got these assets and I'm gonna borrow this money and I can then deploy the assets and I can lever and I can go invest this in something else or go buy real estate or whatever. Don't forget that like with all these things, security backed lines of credit, margin, margin loans, there, there is an equity component required. And if something happens and all of a sudden the economy hits the skids and all of a sudden dollars go down, you might be in a really precarious situation where now you get a margin call

• 52:45Speaker 04

  or that, that line of credit, you know, gets called and you have to figure out, how do I make this whole? How do I show up with that capital? I just think you want to be careful using, that's why we say they are very, they are, they are great, short-term bridge financing solutions. I would not use them as like long-term debt instruments. That's not what they're designed to do.

• 53:05Brian Preston?

  Also, I want to get clarification on the after-tax account is, um, a lot of people, look, if, you know, when I wrote the book, I have a whole section in there. I missed $10,000 of Roth IRA contributions and it aches me to my soul that I missed it.

• 53:23Brian Preston?

  I want you guys to know that that's why we created the Financial Order of Operations. There really is an order to do how you use each dollar. And I just want you guys to see through the game is a lot of times, you know, part of when you're doing content creation is you have to come up with a non, you have to come up with a creative way to stand out. And this is so, it's, it's on the content creator, what's your thing that makes you stand out from others? And some have chosen the path of, well, I will take, there's a lot of benefits to after-tax accounts, but I just don't want you to forego the benefits of your employer match to the tax savings of your 401Ks and 403Bs or the early access to 457s.

• 54:06Brian Preston?

  And even the tax-free growth of the Roth, just because a content creator has decided, hey, a take, nobody's taking is how valuable that after-tax. And that's why I bring it back to the fact that if you are retiring early, because it is definitely a powerful thing that our, you know, after-tax money doesn't have contribution limits. It doesn't have early access limitations. All those things are completely true. But if you're, if you're being honest and pulling it all together, nobody's retiring at 50 years of age without having a savings rate that's beyond 25% where you could go ahead and do all. It's not an or, it's an and.

• 54:44Brian Preston?

  And that's what I hate is because everybody, you see it in a lot of content, people try to do either or when the real answer is just not as sexy is and. Let me tell you why, how to do this well. And I apologize that we don't have more hot takes to try to get more eyeballs and views in. But I really am trying to make sure you guys know the best path, not just something that has a sexy sizzle to it, just so I can get your eyeballs a little bit easier. Does that make sense?

• 55:12Speaker 04

  Mm-hmm.

• 55:14Speaker 05

  Sorry, we don't have enough hot takes.

• 55:16Speaker 04

  No, you said, I'm sorry, we don't have more hot takes and for a second.

• 55:20Brian Preston?

  Oh, was I supposed to say cold takes?

• 55:21Speaker 04

  No, I thought you said hot cakes and I was thinking about the past, like, oh, we did have pancakes, but that's where I'm at.

• 55:26Brian Preston?

  No, they were room.

• 55:27Speaker 05

  I just thought it was funny.

• 55:27Brian Preston?

  They were not hot cakes. They were room temperature cakes.

• 55:31Speaker 05

  Oh my goodness. All right, let's do another question.

• 55:34Brian Preston?

  Where did we get pancakes, by the way?

• 55:36Speaker 04

  I have no idea.

• 55:37Brian Preston?

  Did we pay for buckets of pancakes too? Oh my gosh.

• 55:41Speaker 04

  Delicious.

• 55:41Brian Preston?

  That was an expensive prop we just put out there.

• 55:44Speaker 04

  Don't throw them away.

• 55:46Speaker 05

  They're not that expensive.

• 55:50Speaker 05

  All right. Ready for another question?

• 55:51Brian Preston?

  Did they only deliver two? Did y'all eat some of them? Inquiring minds want to know.

• 55:58Brian Preston?

  Oh.

• 55:58Speaker 04

  Yeah.

• 55:58Brian Preston?

  Snipes.

• 55:59Speaker 04

  Of course. Someone said, I think a hot takes episode would be fire. I don't, do, do we have hot takes? Ruby, do we have hot takes that are like, oh, this is a very different take?

• 56:08Speaker 05

  They're not as hot as some takes out there. So I don't know.

• 56:14Speaker 05

  What do you want me to say?

• 56:17Speaker 05

  You have some hot takes.

• 56:17Speaker 04

  I have, I can think of one.

• 56:19Brian Preston?

  What, what hot take do I have?

• 56:22Speaker 04

  Okay, I'll give you one. You ready for this?

• 56:24Brian Preston?

  Uh-oh.

• 56:25Speaker 04

  No, no, this is a hot take.

• 56:25Brian Preston?

  Your face was like, uh-oh, you're not gonna like one of them.

• 56:27Speaker 05

  Yeah, I want to know what you're thinking before I.

• 56:28Speaker 04

  This is one, this is just like, and this is like where we fall. I was watching, I was watching a creator of the day and he was going through this people's finances and he started like lambasting, uh, this individual because they were, uh, giving, they were, you know, tithing or giving to charity or whatever. And the person was like, hey, you're not in a financial position to be able to do this. Like you should not begin to do this. And that's one of those things, a lot of people will say, hey, you, you, you can't be generous until you reach a certain level of success or whatever. I think our hot take is a little bit different than that. I think we would argue that generosity can start at the very beginning of your financial journey. Even if it's not giving money, it might be giving time, resources, talents, attentions, whatever. Um, I think that's probably a hot take. I think a lot of people would disagree with that one.

• 57:11Speaker 05

  I like that take.

• 57:11Speaker 04

  Tesla, not being a luxury brand.

• 57:13Speaker 05

  I know, that's a hot take too.

• 57:14Speaker 04

  Uh, wrong take on your part.

• 57:16Speaker 05

  And see, you're like, that's not a hot take, but it is.

• 57:18Brian Preston?

  It's not a hot take.

• 57:19Speaker 05

  It is. It's a hot take.

• 57:20Brian Preston?

  A three or what? They looked, they got rid of all their luxury cars.

• 57:22Speaker 05

  That's why it's, I think that's why it's a hot take, because you are so confident about it. Like you can't see the other side on that one.

• 57:29Brian Preston?

  Hey, can I tell y'all, can I give y'all a Tesla take?

• 57:31Speaker 05

  Happy person and on that one, you're like.

• 57:32Brian Preston?

  Can I, can I give you all a Tesla take? Cause you know, I'm an expert on this and, um, nobody asked for this.

• 57:37Speaker 05

  Yeah. See, here goes a hot take.

• 57:39Brian Preston?

  Car was a gimmick so that it makes full self-driving that much easier for local municipalities and states and the federal government to accept the technology.

• 57:49Speaker 05

  There was a flying car?

• 57:51Brian Preston?

  Nobody asked for a flying car.

• 57:53Speaker 04

  You didn't watch the roadster release?

• 57:55Brian Preston?

  You don't even know about that?

• 57:56Speaker 04

  She said there was a flying car? You didn't watch the?

• 57:59Speaker 05

  No.

• 58:01Speaker 04

  Look, by the way. That's a hot take, honestly. That's a hot take.

• 58:04Brian Preston?

  I know somebody who was at the event and it really did do all those things. A lot of people still think it's like AI. And I was like, no, I know somebody who was at the event and it really did happen.

• 58:13Speaker 04

  Man.

• 58:13Brian Preston?

  But I think it moved the needle, the threshold of what people think is possible. So now full self-driving seems much more reasonable.

• 58:20Speaker 04

  And you would say that Teslas are not luxury automobiles.

• 58:23Brian Preston?

  Yeah, that's true. Go, you know.

• 58:26Speaker 04

  That's a hot take.

• 58:27Brian Preston?

  Look, I own one, so I, I have a conflict of interest. I feel like I always want to disclose. I have a no hypocrite try to disclose. But if you haven't gone and experienced full self-driving, I would encourage you to go check it out. It's pretty, it's pretty magical.

• 58:40Speaker 04

  Love it.

• 58:42Speaker 05

  All right. Let's do one more question.

• 58:46Speaker 04

  Trying to think of any of the hot takes we have.

• 58:47Speaker 05

  Oh my gosh, or do you just want to do more hot takes?

• 58:49Speaker 04

  Let's do a question. Let's do that.

• 58:50Speaker 05

  I mean, if you got more hot takes, I'll take them.

• 58:53Brian Preston?

  I mean, we could ask our team. I, I'd do that episode if we could come up with what we do. The problem is we're too honest and transparent.

• 58:59Speaker 04

  Put on the list, our hot takes and we'll do a show on that.

• 59:02Brian Preston?

  Be an empty show.

• 59:04Speaker 04

  It's just a, just one rapid fire.

• 59:08Speaker 05

  All right. Last question from RubyRocks5. How to overcome anxiety over time spent out of the market when doing a 401K direct split rollover from my old employer to my traditional IRA and Roth IRA? I'm 40 years old and behind the curve. These are, these are your people.

• 59:28Brian Preston?

  Ruby, Ruby, you are such a financial mutant. By the way, I have experienced this, I even experienced this as a financial advisor because I had like, uh, you know, clients that were even doing seven-figure rollovers, like we were rolling money over. And fortunately, a lot of times things have sped up. I will say technology has made a lot of this move faster. But there were moments in my career where you'd have a 401K or, you know, or a trustee to trustee transfer where literally the money would be out of the market for three to four weeks. And I can remember thinking, wow, if we have one of these months where the market's, you know, moved by seven to eight percent, this client's gonna hate me.

• 1:00:08Brian Preston?

  But I will, I will tell you, I think if in the grand scheme, you know, when in doubt, zoom out, you have to just realize this is proper structure and other things overrules what the, the timing of what the opportunity cost potentially could or could not be. You just have to, to grip rip and just, you know, expect the, the best, hopefully.

• 1:00:28Speaker 04

  What I, yes, agree with all of that. I'll give you one little tactic you can do, Ruby. I'd call my 401K provider, if it's a fidelity 401K or a Vanguard 401K or, you know, fill in the blank and I say, hey, I'm trying to transfer to a direct rollover. Is there any way, is there a mechanism when I do this rollover that I can transfer the assets in kind? Inside of my 401K, I own this index fund. Can I just transfer that in kind over here to my IRA rollover owning the same index fund? A lot of times the 401K institutions can do that. Now, sometimes they'll have to like liquidate, cut a check, mail a check, you deposit a check. And if that's the case, there's nothing you do. But sometimes if you are transferring from a fidelity 401K to a fidelity IRA

• 1:01:11Speaker 04

  or a Vanguard 401K to a Vanguard IRA, they will allow some positions of transferring kind. If you can do that, it doesn't matter if you're in or out of the market because you still hold that position even in the transition period. So that's a little bit of a hack that you can ask if you want to go just one step further. Not guaranteeing that you can do it, but it's a thing that's there. But again, if you zoom out, fast forward five, 10, 15, 20 years in the future, those handful of days while you were waiting for the transaction to complete likely will not have mattered at all.

• 1:01:42Brian Preston?

  Yeah. From a macro stance, uh, the, the structure is probably more important than those days of trading.

• 1:01:48Speaker 04

  Yep.

• 1:01:50Speaker 05

  RubyRocks5, thank you for the question. We are your people, so thank you for it. And if you would like a Money Guy Tumblr, just email [email protected]. I just need you to know that both of those breakfasts combined cost $8. So we are financial mutants.

• 1:02:05Brian Preston?

  We did the special.

• 1:02:07Speaker 05

  We have financial mutants in the building.

• 1:02:10Brian Preston?

  Well done. We ought to give this hack. Go ahead.

• 1:02:13Speaker 04

  Hey, we're not sponsored by this restaurant, so we don't get anything for this. There's no right, but Andy, if you're listening, we'd like free food. They have this thing, this local restaurant here in downtown Franklin called Pockets. They got this deal. They call it the 2004 throwback. And if what they did, you can order this breakfast and it's like two eggs, a meat, and maybe grits or hash, like something like that. And they charged the 2004 price. It was $4 for that. So what they did is the team got us two of those, eight bucks. Unbelievable.

• 1:02:46Brian Preston?

  Now, here's the, what's interesting, you typically have to eat, dine in person to get the four and a quarter price. So somehow we must have leveraged our relationship or gone in person to get that, because it doesn't work on the mobile order side or.

• 1:02:59Speaker 05

  We've got some strategic people in our crew.

• 1:03:02Brian Preston?

  But that's the hack. Next time you come to downtown Franklin, and by the way, if you're a hog molly like Bo and myself, I actually eat two of them.

• 1:03:09Speaker 04

  We get two.

• 1:03:10Brian Preston?

  Because here's the thing, most of their meals, most of their breakfasts are like 13, $14. So when you see that you can get two of these for like $8.50, you're like, what?

• 1:03:20Speaker 04

  I'll take two.

• 1:03:20Brian Preston?

  I'll take two of them. So hog molly it up and take advantage of the financial mutant opportunity.

• 1:03:26Speaker 04

  You know, it's embarrassing when you order two breakfasts when the waiter waitress is like, okay, on the first one, how do you want your eggs?

• 1:03:32Brian Preston?

  Yeah.

• 1:03:33Speaker 04

  Okay, on the second one, how do you want your eggs?

• 1:03:35Brian Preston?

  Well.

• 1:03:35Speaker 04

  Okay, what meat do you want with the first? Okay, what meat? And you're like, oh my gosh.

• 1:03:39Brian Preston?

  Yeah. Hey, there's no shame in our game when you're a financial mutant. If you find a hack, lean into it and just own it and say, hey, how many other smart people? Now, look, they might, please don't abuse this so they take it off our menu.

• 1:03:53Speaker 04

  Yeah, yeah, yeah. Don't, don't, and yeah, tell them, tell them you heard about them from us, but don't tell them we told you to do that.

• 1:03:59Brian Preston?

  That's good enough. All right, guys, we have a blast. How did we do this? We lost. If more than 10 of y'all stayed on board for that, I'll see you around when y'all come to see Pockets and have that breakfast and get you some maple syrup to sop it up. Thank you, Vermont. It's hard to believe, 50 states, because I think I was in such shock and awe that they surprised us by bringing out the pancakes with the biscuit, and I was hungry, that I really didn't, I didn't harp well enough that how incredible it is that we have so many financial mutants, that we're actually in all 50 states now. Thank you. We don't take that for granted. We appreciate you guys immensely. Thank you for coming on this journey. I'm your host, Brian, joined by Mr. Bo Rebe, the rest of the content team in the wings, Money Guy, out.

• 1:04:41Speaker 05

  The Money Guy Show is hosted by Brian Preston and Bo Hanson. Brian and Bo are partners with Abound Wealth Management. Abound Wealth Management is a registered investment advisory firm, regulated by the Securities and Exchange Commission in accordance and compliance with the securities, laws, and regulations. Abound Wealth Management does not render or offer to render personalized investment or tax advice through the Money Guy Show. The information provided is for informational purposes only, may not be suitable for all investors, and does not constitute financial, tax, investment, or legal advice. All investments involve a degree of risk, including the risk of loss.

• 1:05:17Speaker 00

  Your sausage McMuffin with egg didn't change. Your receipt did. The sausage McMuffin with egg extra value meal includes a hash brown and a small coffee for just $5, only at McDonald's for a limited time.

• 1:05:29Speaker 01

  Price and participation may vary. Promotion pricing may be lower than meal pricing.

• 1:05:32Speaker 06

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