Expecting a Layoff? Do This.

We kick off this week's livestream with a topical question from Christian A: "I’m a federal worker, 26, and facing potential layoff. How should I prepare?" We'll walk you through Christian's situation and more in today's Q&A episode! 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.

• 0:00Brian Preston?

  Here's a timely question. If you're expecting a layoff, what should you do?

• 0:08Speaker 01

  Brent, I am so excited because a lot of times, life will throw us some curveballs and there will be some unknown unknowns that come our way. And we want to make sure that we're prepared for those unknown unknowns, at least as best we can be. And right now is no different. I love that we get to be a resource for you guys, that you have questions and we can load you up with answers. It's why we do this live stream every Tuesday at 10 a.m. We have the team right now out in the chat collecting your questions. So if you have a question you want us to weigh in on, make sure you get it in the chat so that we can load you up. With that, Creative Director Rebe, I'm going to throw it over to you.

• 0:47Speaker 02

  Yep, we've got the question from Christian A. to kick us off. It says, "I'm a federal worker, I'm 26, and facing a potential layoff. I have about 55K in my TSP, 25K traditional, and 30K in Roth. If laid off, should I keep my money in the TSP or move it to an outside account?" And what else should he be thinking about if this is a potential thing that might happen in the near future?

• 1:13Brian Preston?

  Yeah, that's the part that stuck out to me is I appreciate that Christian's trying to figure out what to do with the TSP. First of all, compliment to Christian, 26 years old, already with $55,000 saved up.

• 1:24Speaker 01

  It's amazing.

• 1:25Brian Preston?

  From a wealth multiplier standpoint, that is incredible.

• 1:28Speaker 01

  55 just in the TSP, 25 in traditional, and another 30 in Roth. He's got a lot of money saved up.

• 1:33Brian Preston?

  Yeah, so this is, this is pretty incredible, but, um, but doesn't make it any easier when big life changes, or even the fear or potential for something big like a layoff coming your way? What do you do in those situations?

• 1:46Speaker 01

  Yeah, so obviously, a lot, and a lot of people, a lot of our clients are faced with this right now. They're saying, "Hey, there's a lot of uncertainty, there's a lot of things coming down, or we really don't know what tomorrow looks like." And that can be true for anyone. I mean, Brian, we've worked with clients even outside of this current, present time, where large companies will have reduction in force, so there will be mass layoffs. And so, one of the things that you always want to make sure you're doing is keeping your financial house in order so that if something like that does come your way, you're prepared for it. One of the things, it's why we put it in the Financial Order of Operations. Brian, do you have the thing that you can hold up? You know, one of the reasons why we suggest that you have a fully funded emergency fund is so that if something were to happen, if you were to be out of employment, if there

• 2:31Speaker 01

  were to be a reduction in force, if there were to be a layoff, you know that you have three to six months of living expenses where you can keep the lights on, keep food on the table, keep your rent or mortgage covered, and still be able to go out there and search and find for new jobs. So, one of the very best things you can do if your employment is uncertain is make sure that you're not skipping steps of the foo or following too lean on your cash reserves because your emergency fund is the thing, in fact, that can keep you out of the ditch. And then behaviorally, I always think it's a great thing, if you are someone who's nervous about your vocation or nervous about the role in which you operate, I would begin looking around saying, okay, are there other jobs, are there other positions, are there other opportunities where my skill set would be valued? If I've been working

• 3:16Speaker 01

  in this specific job or this specific sector, is there a natural translation to another type of job or another type of skill set? And are there people I know that are already in that field, working for that company, doing that type of role? And how can I even now begin to connect with those people? Not with a very clear ulterior motive, but just in a means and method of understanding what's available out there. Because the more legwork you can do and the more relationships you can build, before you get to that dire circumstance of, oh, my gosh, I've got to find something tomorrow, the better prepared you can be if that is what comes your way.

• 3:51Brian Preston?

  I don't want to lose the fact, I want us to make sure we come back to Christian's main question about the rollover or keep it in the TSB because I have some thoughts on that. But I feel like that this is such a big topic that I want to make sure we cover some of the, the, the big macro issues because this, this issue is going to go beyond Christian. A lot of people are probably curious about this. And that's why I think about my, my, my 3D glasses. Did you hear me talk about big life decisions? Make sure you put on your 3D glasses when you're creating plans. Job changes or layoffs are no different. You could, you could run a 3D plan where, and just to remind you with that what I'm talking about is, is you've got your, your, man. Your daydream, your, your dream plan is things are going to go as good as they possibly could.

• 4:36Brian Preston?

  That's for somebody who maybe if you get laid off, all of a sudden, you know, there's a job right down the street that pays you even more.

• 4:43Speaker 01

  Or maybe you don't get laid off.

• 4:44Brian Preston?

  Or you don't get laid off at all. That, that's, that's going to be that easy one that the status quo, you're copacetic, you don't have to worry about it. And then there's what you actually think will happen is that, hey, there's probably a better than 50 50 shot that I'm going to get laid off. So I need to start planning, what does this mean? And then of course, the do to is, man, I get laid off, but also I have to renew my lease. Um, my car, you know, blows a rod, you know, there's all these things that can happen at once. And here's why I think you need to do, to put on your 3D glasses is because, and I would think about it from a geographic standpoint to, you know, the micro decisions you have to make versus the macro is that if, if you think about in terms of, maybe this is just going to be a hiccup.

• 5:25Brian Preston?

  Whereas you, you, there's, you know, you don't get laid off or, you know, or you, you get laid off, but there's a job right down the street that you could easily roll into. Cause maybe you're, I didn't know if Christian gave us what his, their, their feature, their, their job function was, but like accountants, you can roll into another job pretty easily. Engineers, others quickly fall into a new, new role. Or, you know, make sure you're building out the plan where it's a big change. Like you've geographically have to up change, you know, move to a completely different part of the country. Don't short change. Do the planning now so that nothing surprises you. That's the biggest thing is to do the exercise so that you can experience it kind of in a virtual way versus the reality of it slapping

• 6:10Brian Preston?

  you around and you not actually having a plan forward on how you're going to navigate this.

• 6:14Speaker 01

  Now with his actual question, okay, if, if this does happen, how should I handle my TSP? Well, we actually have a great resource available. I don't know if we can pull up the resources, but if you go to moneyguy.com/resources, we have a resource of what to do with an old 401k. Well, your TSP is no different. It's an employer sponsored retirement plan, and you have a few different options when it comes time to leave jobs or to change your employment. Uh, you, you have four, but you really only have three, because this fourth one is not an option at all. The fourth option that you do not do. Is you do not cash it out and far too many people, I want to say, what is it, Brian? Forty-one percent of people say that when I leave my job, I ended up cashing out a 401k, cashing out my TSP. I paid taxes, I paid penalties, awful decision, don't do that.

• 6:59Speaker 01

  So then it really comes down, you have three choices that you can work through. You can either leave the money behind, you can take it to your new employment, or you can roll it into an IRA rollover. How do you decide which one?

• 7:10Brian Preston?

  Well, I mean, let's, let's talk about through savings plans specifically. Here, here's what makes them unique. First of all, dirt cheap. I mean, I think the internal expenses for a TSP plan is around point zero four percent.

• 7:21Speaker 01

  Look at you.

• 7:21Brian Preston?

  I mean, that's, that, that's, that's practically free. Now, there's, there's a caveat there. The, the asterisk is, is there's only really five investments. You know, they, they really grouped these things. So it's kind of restrictive, you know, you're not going to, if you're, this is your area to get a lot of diversification. It's, it's not, you don't have as much control as if you rolled this thing into your own IRA. So I would, I would take that into account and then I'd figure out is what do you think you want to do with this money? I, I can already tell Christian's a financial mutant. You're going to want to keep this in a tax favored way. Nothing wrong if you, if you look at it and it may be the new job, wait, you don't have to do anything. Here's the good news, don't get in a hurry.

• 8:02Brian Preston?

  This is not something, because you can, especially at these asset levels, you can keep this money there forever. You know, there's no, so there's no hurry up and making a decision is not a requirement in this situation. I would focus on the, the employment and the career stuff, but then after the dust settles on all that, then you can look at it and say, hey, okay, yeah, I had to change jobs. My new employer, man, they have a great low cost plan and, and they have all these great investment options. It's one of the big providers, maybe it's a Vanguard, a Fidelity, a Charles Schwab. You're like, well, hey, I could match that point zero four with some of the index funds that are in this. Then you can make the decision, yeah, let's roll this into the new 401k. Or maybe you get to the new job and you say, hey, it looks like the golf buddy of the owner

• 8:47Brian Preston?

  of this company set this thing up. It's got all these sub account fees and all these other expensive things. I either need to keep it in the through savings. Plan or I need to roll it over to an IRA so that I have complete control over what I'm doing. These are the type of mindsets or the decisions you'll have, but I still stand by. Let's get you through the employment stuff first. Make sure that emergency reserves has got a lot of love on it. And that you, you know, batten that up. Look at all your expenses. Making sure that you don't have a lot of subscriptions and other things that are somewhat wasteful.

• 9:17Speaker 01

  Love it.

• 9:17Brian Preston?

  I, I, I went on some tangents. I can tell you I was entertaining you.

• 9:20Speaker 01

  No, no, I loved it. You make sure that.

• 9:22Brian Preston?

  No, whenever you look over a review, I'm like, oh gosh.

• 9:25Speaker 01

  No, that emergency fund needs to have a lot of love on it. I agree with you. I. A lot of love. Here's another thing you can do. We know that the world is rapidly changing right now. And one of the things that we're trying to do is make sure we stay abreast of that. So if you're not subscribed to the channel, make sure you subscribe right now. So as the world changes, there's new information for us to put out there, you will be notified when we put new content out.

• 9:45Brian Preston?

  Well, I, I mean, it's funny you say that is because like I think about when we got nominated for some of these crazy content awards. And it was back during 2020 and we had people when we went to one of those influencer events and they're coming like, man, all the, the PPP stuff, they were like, your channel was the channel I'd go to. And I was like, that's crazy. Cause we're, we're, we're normally not current events channel. We're typically just how do you make great financial decisions with your life? But don't worry if all of a sudden things with the tax code start changing very rapidly. Now, I will tell you, I don't typically do content off of just rhetorical statements that a politician says. I typically wait until you actually see, cause you know, Congress is who sets tax policy.

• 10:29Brian Preston?

  I wait until that stuff kind of gets through some of the, the horse trading and other things that they do behind the scenes. Before we waste you, I, I look, I realize I'm wasting a lot of good clicks. Cause we could come up with some really great clickable titles and get you all excited to come in. And then you find out this thing is not even anywhere close. So we try not to waste your time and we try to be very direct and open with you about that.

• 10:51Speaker 02

  Love it. Love it. Well, Christian, thank you for the question and we are really hoping the best for you. And we hope that if nothing else, this helps you feel a little more prepared for whatever happens next. So thanks for being here and asking your question and it is a Tumblr day.

• 11:04Brian Preston?

  Hey.

• 11:05Speaker 02

  Since we answered your question, we'd love to send you a Tumblr as a thank you.

• 11:09Brian Preston?

  I thought last week was a Tumblr.

• 11:10Speaker 02

  Was it?

• 11:10Brian Preston?

  I think. Oh, you're good. The admin team is like, be so mad. Just when you open that studio door, they're gonna be waiting for you outside there with their arms crossed going, I can't believe.

• 11:21Speaker 02

  Why don't you just let me have this? Just go with me.

• 11:23Brian Preston?

  Hey, I'm all for it. Hey.

• 11:25Speaker 02

  I thought you liked giving away tumblrs.

• 11:27Brian Preston?

  That's the bad cops out there. We're all for give Tumblr for you, Tumblr for you. Everybody gets tumblers.

• 11:33Speaker 02

  Confirming before, but lucky for you.

• 11:35Brian Preston?

  The gatekeepers out there though.

• 11:36Speaker 02

  I've said it now. It's Tumblr day. Email [email protected] if you would like one.

• 11:40Brian Preston?

  Yeah.

• 11:41Speaker 02

  I really thought today was a Tumblr day, so I'm just going crazy.

• 11:44Brian Preston?

  Hey, we're with you.

• 11:45Speaker 01

  Reba, you have the control. Whatever you want.

• 11:46Speaker 02

  I do have the control.

• 11:47Brian Preston?

  We can't wait to watch the show after the show.

• 11:51Speaker 02

  All right. Next question is from Micah. He says, I have an opportunity to invest in a duplex, but it would become a large portion of my net worth. I am on foo step five, but well ahead of where I need to be in savings. What should I be thinking about?

• 12:11Speaker 01

  So, so Micah, this is a great, um, this is a great question because a lot of people, uh, a lot of people ask us this. Hey, I've been doing all the stuff that I was supposed to be doing. I've been following the financial order of operations. Brian, will you hold the thing? For those of you that don't know, we have a nine step tried and true process. You can get your free copy at moneyguy.com/resources. And you've been following the financial order of operations. You've been doing the things that you're supposed to be doing. You've been building up your assets and building up your resources, but then all of a sudden, an opportunity presents itself. In this case, it's Micah has an opportunity to invest in duplex. Oftentimes it might be some business investment or you might be able to make partnership at the firm that you work or something like that. And you say, man, okay, I've been doing everything I'm supposed to be doing,

• 12:56Speaker 01

  but now there is this capital outlay required in order for me to do this thing. That I think I want to do. And so you have to assess, all right, if I am to pursue this, what are the risks that I'm taking on? And what's the opportunity cost that I'm giving up? You've heard us talk all the time about, we love real estate investing. A lot of people think because of what we talk about and because of the financial order of operations, we're anti-real estate and that could not be further from the truth. But here's what we do know. When you invest in real estate, if it does not go dream plan, and it does not go down to earth plan, and it goes doo-doo plan, it can get really, really ugly, really, really fast. And we've seen that happen. So before I would be able to tell you, Mike, oh yeah, it's okay if you kind of take this quote,

• 13:39Speaker 01

  unquote, risk on this duplex, I'd want to see your other foundational financial footprint to make sure that, okay, if you do this, and maybe the duplex doesn't rent, or maybe there's a repair that you have to cover, or maybe there is a fill in the blank, you're not going to leave yourself completely out there naked. Because when I hear that you're in step five, it does not suggest to me that you're in step seven. And generally, we see like, real estate and those types of investments happen once you get to hyper accumulation. Agree, disagree, want to fight?

• 14:07Brian Preston?

  Yeah, I wrote down a few quick notes. Um, look, let me tell you why I love real estate, but the same blessing that makes it so awesome is also its curse, is that the reason you can make wealth with real estate is because you're using leverage. Think about it. You put down a small down payment, you go borrow, historically, at lower rates, right now, you're not getting a great deal on the interest rates on it. So you better be very purposeful with your decision making. But you're borrowing the debt. And then we know capital assets, just the nature of the way the world is, there's going to be inflation, there's going to be appreciation. And if you're, you know,

• 14:49Brian Preston?

  you from a cash flow perspective, you put a small amount down, but the asset, the fair market value of the asset is appreciating at the full value, not just at what you put down as capital. So it's very quickly, a great opportunity to build wealth, because you look at, you're like, hey, I put down $30,000 on this thing, it appreciated over $30,000 just last year. It's 100% rate of return on paper. You're like, wow, this thing's a no brainer. But here's the curse. Because it's debt, you borrowed the money that you don't have, you're counting on people to make payments in the background so you can keep it. If all of a sudden they quit making payments, you have to now carry that weight. And if it doesn't work out, most people

• 15:33Brian Preston?

  just can't sustain those payments long enough during the desert of bad periods in real estate that they end up losing the assets and it ends up pulling them all the way down. So there's a better way to do money. And let me tell you, that's why the Financial Order of Operations is your friend. Without a doubt. Now, Bo, he's like playing horseshoes with the Financial Order of Operations because I actually consider real estate to be a prepaid future expenses or abundance goals, step eight. But here's the thing, I put an asterisk on it. I'm gonna put an asterisk on it because Micah's let us know, he's only on step five. So right there, you think that's a disqualifier. But here's the asterisk. He said it's a duplex.

• 16:16Brian Preston?

  And there is a caveat that I'm going to tell you, let you have the potential to consider doing real estate earlier, and that's house hacking. If Micah tells me that he's going to live in half of this duplex, and it's all fits into the scope of housing allowance, and he's looked at his cash reserves, and maybe he's beefed up his cash reserves enough to where now this thing gets a lot less risky from a leverage standpoint, because he's living in half of it. By the way, it's also going to be great for the bank, because the banks go love that you're actually living on property. Instead of it being an investment property, where they're going to charge you a much higher premium on the mortgage rate, you get to say this is your primary house. And you get the better rate, and you're not

• 17:00Brian Preston?

  fibbing about it, you're not creating any false narratives that get you in trouble with the law if you got caught on it. So that's what I would tell you, Micah, is that if you're telling me that you're looking at this duplex as a house hacking opportunity, you still have to go do all the work. I'm not giving you permission to break the foo. But I'm telling you that you can consider getting into real estate a little bit earlier, and a duplex is the perfect way to house hack. Because by the way, you're also gonna be a better landlord. If you live next door to the people that you're renting to, guess what? You're gonna be able to tell if they're tearing up your place. You'll probably hear them tearing it up. So you're gonna be much more likely to keep your eyes on what's going on with that tenant. And you're probably, truthfully, you'll

• 17:44Brian Preston?

  also keep the bad elements away because they know, hey, if this guy owns it, he's, I'm gonna be under his thumb. Yeah, it's, I'm probably not gonna be able to change engines in the living room like I've told you horror stories that I've experienced with some of my clients who did rental property.

• 18:02Speaker 02

  Great. You really covered some bases. I was just making sure there was nothing else. You wanted to tell Micah.

• 18:07Speaker 01

  Cause he called me out on the financial.

• 18:08Speaker 02

  I kinda did, but I'll let it, I'll let it go.

• 18:11Brian Preston?

  But also, Bo, Bo, look, now I was sick last week. So there's no telling because you know, I've been on cold medicine and everything. Isn't telling what's coming out of my mouth today.

• 18:20Speaker 01

  Or anytime ever, if we're gonna be honest.

• 18:22Speaker 02

  I don't think it's any cold medicine.

• 18:24Brian Preston?

  But you said, earlier today, you already said, you said, you might be in a translation. And I was like, Bo meant transition. But he said, translation. And I was like, Bo is so, I'm the one that plays horseshoes with the English language. So it made me feel, it made my heart feel good because Bo is perfection. I'm, I'm kind of the one, I mean, look how fly he's looking today with that outfit and stuff. I mean, that's why he has to put, he has to put a smudge by mispronouncing a few things or maybe getting not everything perfect on foo, just because looking so fly and, um, you know, it's good. It makes all the rest of us feel better about ourselves.

• 18:59Speaker 01

  He's so kind.

• 18:59Speaker 02

  Okay. Well, Micah, thanks for the question. Yeah, I want to make sure I give him a Tumblr since I have sanctioned this as Tumblr Day. Just email winner at moneyguy.com if you would like a Tumblr, Micah. All right. Van Smacker has a question for you.

• 19:16Brian Preston?

  Van Smacker?

• 19:17Speaker 02

  Van Smacker.

• 19:18Brian Preston?

  Like you're smacking that van door closed or?

• 19:23Speaker 02

  Can take that however you want. All right, it says, "What are the pros and cons of filing married or filing separately? Considering it to reduce student loan payments." They have 200K in student loans to lawyer, and my income is double my wife's. So they have 220K household income. Lot of information there, but what do you think about pros and cons of filing married versus filing separately?

• 19:48Speaker 01

  Yeah, this is a really, really interesting one because in most scenarios, and Brian, you've been an accountant for like 100 years. So in most scenarios, when it comes to filing, it's often more advantageous to file married filing jointly than married filing separately. When you look at where the tax brackets are, when you look at credit exclusion, when you look at deduction availability, generally speaking, married filing jointly is more advantageous than married filing separately. But there are some unique scenarios, and we've seen this with some of our clients where when you actually run it and you look at the married filing jointly return versus the married filing separately return, there may be reasons why it might make sense to do that. One of them could potentially be student loan, if you're on some sort of like income repayment

• 20:30Speaker 01

  plan or something like that, or you're trying to qualify for deductions that you would not qualify for otherwise. Here's what's really, really great about your question, because not knowing your specific situation, not knowing what your actual tax return looks like, we won't be able to tell you which is most advantageous. But most accountants and most softwares, even if you're self-filing, will allow you to test this. So you can actually run one iteration, married filing jointly, and you can see what the overall tax liability for the household is. And then you can change your election to married filing separately, and you can look and see, okay, what changes, what things adjust, what things are available versus not available, how to file the other way, and you can make a determination based on, okay, which one of these is going to make the most sense.

• 21:13Speaker 01

  But you just need to make sure that you recognize that there are things that will be affected by how you choose to file. For example, Roth eligibility or that sort of thing will change based on your filing status. So you want to look at your entire financial picture before you make that election.

• 21:29Brian Preston?

  Yeah, look, I like always sharing the fountain of knowledge, especially when the fountain of knowledge is fruitful. You're like, man, that was great that you shared that. But this was one. Because my answer is kind of your answer, Bo, is that I think you have to go just do the work. You have to look at both. I would go, you know, I know all the professional softwares that I worked with in my 16 years of doing taxes, all allowed this feature where you could compare, it was just by clicking a button, as long as you, when you were setting up every one of the inputs, you better make sure you put the ownership, is this an individual, whose name is this in, you know, which spouse is this attributed to, or is it joint?

• 22:10Brian Preston?

  You have to basically divvy up all the income sources, but assuming you put all the inputs into the software correctly, usually there's a button you can click that lets you then compare and contrast these two different features. It wouldn't surprise me, I'd love if somebody in the comments section, since it's a live show, tell us, does TurboTax let you do this? Because I mean, I just haven't had a lot of experience with Intuit or any of the others. You know, I've dealt with their professionals, Lacer and other things, but let us know. I will speak in terms of filing separately versus jointly. Typically, what I've experienced in my professional career is that somebody has to be have something so bad going on that it stinks so bad that you don't want to be associated with it.

• 22:54Brian Preston?

  And that's when you file separately, like you- It's more because of a behavioral thing, a strategic thing. It's like if you, you know, there's all kind of, like I'll go the extreme. Somebody's doing criminal stuff, you don't want to be filing a joint return with them. You know, if somebody has tremendous debt to the point that they're probably filing bankruptcy and you don't want to attach your good financial record to it, you probably want to get away from that by filing separately. If somebody has tremendous risk in their life, you know, maybe they're doing a job that could get is highly litigious and they can get in trouble, that's when you consider filing separately versus jointly. Because you're just trying to, like I said, it's typically things that something smells so bad or has so much risk to it that you're trying to create as much separation from it as possible.

• 23:39Brian Preston?

  And the reason that is, is because there's a lot of financial stuff that you miss out on when you file separately versus jointly, you know, it's, so it's, that's my take on it. And I hate that I can't give you a, I love it when I can definitively tell you, yeah. The 401k funding limit, once you're this age is this and, you know, and do it, go and maximize it. This one, you're going to have to actually do the work and then actually see what the inputs come out of.

• 24:03Speaker 01

  And I would encourage you, don't be penny wise and pound foolish. Obviously, it sounds like for this question, one of the reasons you're trying to do it is so that you can drive down the required student loan repayment. And while that may make sense, that may be advantageous, make sure that that singular goal that you have is not causing you to miss out on other things that could be happening inside of your financial picture. So often, we see people get focused on one outcome, or one goal, or one strategy, that they lose sight that there are other unintended consequences around that decision. So make sure you look at the total picture before you decide which way to file. And this might be a great time where it does make sense to work with a professional tax preparer, who can give you the ins and outs about why you should or should not file one way or the other.

• 24:46Brian Preston?

  Well, that's why I would do, you'd have to do a tax projection or something that goes through the entire exercise, because you just don't know unintended consequences you might. Yes, it might help you on this student loan repayment, but then you might, you know, mess up all kind of other things with, you know, you had a capital gain or something that now gets allocated to one and you'll get to spread it. It could be a mess.

• 25:08Speaker 02

  Yeah, so you definitely want to measure twice, cut once, as they say. Hopefully, that gives you some things to think about, Van Smacker. If you would like a Tumblr, just email [email protected] as a thank you for asking your question.

• 25:20Brian Preston?

  Hey, can you give us a question? Let's feel smarter. Because I hate it when we don't, when we answer a question, I feel like we, we gave them more questions than answers.

• 25:28Speaker 02

  That was, that was the right answer.

• 25:29Speaker 01

  I thought that was a wonderful answer.

• 25:30Speaker 02

  You gave him a ton of good things to think about.

• 25:32Brian Preston?

  Like I said, I'm on cold medicine, so who knows how good that, you know, it is one of those things where, I don't know, there's just a lot of variables and levers to pull on that. And I hate when we can't give definitive answers for somebody to plan off of.

• 25:45Speaker 01

  So he wants, you want a question? No variables, no levers?

• 25:48Brian Preston?

  No, it's more of a statement. Go ahead. Do what you're gonna do, Reeves.

• 25:51Speaker 01

  You do you, you do you, he said.

• 25:53Speaker 02

  I know that you can't tell him definitively.

• 25:55Brian Preston?

  Did you get a Tumblr on that one?

• 25:57Speaker 02

  He did get a Tumblr.

• 25:58Brian Preston?

  Van Smacker.

• 25:59Speaker 01

  Van Vacker.

• 26:00Brian Preston?

  Van Smacker.

• 26:01Speaker 02

  Tumblr was given.

• 26:03Speaker 02

  All right, Nova S. has a question up next. It says, hi team, I will be starting a new job next week.

• 26:09Brian Preston?

  Is that like a 66 Nova, or is that something from the stars?

• 26:13Speaker 02

  I don't know, just Nova.

• 26:14Brian Preston?

  Keep going.

• 26:15Speaker 02

  That's the name.

• 26:16Speaker 01

  That got an audible laugh.

• 26:18Brian Preston?

  From the comedian.

• 26:21Speaker 02

  I don't know if that's good or bad. All right. Back to the question. I will be starting a new job next week. Do you have any tips or things to keep in mind for 401k rollovers? For context, most of my money is in a Roth 401k and my employer match did not vest. So that is unfortunate. What should he be thinking about?

• 26:41Speaker 01

  Man, so this is so funny. I literally have this issue with a client. And client, if you're out there listening, you're going to know exactly what I'm talking about. They have this idea that, man, okay, I've got this unvested money inside my 401k. Well, I don't want to roll over my 401k and I don't want to roll over into an IRA because then I'm going to lose that unvested money. And what I had to remind them of is unless you go back to work for this employer, you're never getting that money. It's gone. If it's not vested, the only way for you to get back into getting that money is to go work for that employer to continue working towards your vesting timeline. So.

• 27:15Brian Preston?

  But, there is an exception on one thing.

• 27:18Speaker 01

  Tell me more.

• 27:19Brian Preston?

  If the employer has profit sharing.

• 27:21Speaker 01

  Sure.

• 27:22Brian Preston?

  And they don't pay it out until the following year, you might want to wait for that money to hit before you roll the money out.

• 27:29Speaker 01

  Of course.

• 27:29Brian Preston?

  Because it's not uncommon that you leave an employer, you are vested for a portion, they make a profit sharing contribution in say, June of the following year. It's just easier versus you getting a notice that, hey, you have $2,200. And then worse, because you already rolled that money out, and because you're now less than $5,000, they just send you a check with taxes withheld and then you know you've got penalties. It's better to kind of make sure you know that your 401k experience is completely over and fully funded or unfunded, see, before you roll it out.

• 28:03Speaker 01

  And so as you're trying to navigate this, we have a great resource, you can go to moneyguy.com/resources, about what to do with an old 401k. You really, generally speaking, have four choices, but you only have four, you've really got three because you don't want to do the cash out part. One of the unique things about what you said you have going on is, hey, most of my assets are in a Roth 401k. Well, we love that because one of the beautiful things you can do is when you roll over a Roth 401k, you have the option to roll it into a Roth IRA where you can choose the custodian you want to work with. Do I want to put it in a fidelity plan or a Vanguard plan or a Schwab plan or a fill in the blank? So you can choose the custodian, you can choose your own investment mix inside of that. One of the beautiful things about doing that is there's a good chance it's going to be lower cost if you do that.

• 28:47Speaker 01

  And one of our favorite things is if it is a Roth 401k and you do roll it into a Roth IRA, you don't have to worry about blowing up your ability to do future backdoor Roth conversions. Cause oftentimes, one of the reasons why we'll tell someone to roll an old 401k into a new 401k is we want to make sure they keep intact the ability to do backdoor Roth IRA contributions. If you roll that 401k into an IRA rollover, now you've subjected the dollars when you convert to the pro rata rule. So there's a whole list of things that you ought to think through when you're trying to decide what to do with this. But I do feel like the fact that it's Roth makes it a little bit easier.

• 29:26Brian Preston?

  Definitely makes it a lot easier. Now it's just a matter of what options do you have? You know, investment wise and you got, you're in a good situation.

• 29:35Speaker 01

  And so, so one of the things he asked was, hey, any tips that I should keep in mind? Since he's brand new to this new company, brand new to the new employer, what things should he look for inside of his new 401k to decide if it's a good plan or not? Like, how can you tell if your new 401k is a good one?

• 29:52Brian Preston?

  Pay attention to the custodian. I mean, and then look at the custodian to see what investments. And by the way, sometimes you have to be careful because there's a lot of insurance companies that will then, like, and I don't know, I think they've modernized a lot of this stuff so you don't fall into it. But these sub account fees, because I remember I had a, there was, I'm not going to name, there was a life insurance company that had a Vanguard funds all in there for. But you looked at it, you're like, oh, Vanguard's cheap. You know, these things are, you know. You know, point, you know, 0.1% internal expenses on their index fund or something like that. And then you look at the, read all the documentation for the 401k and you say, no, it's actually one and a half percent. You're like, well, how in the world does a Vanguard

• 30:34Brian Preston?

  fund have a one and a half percent cost? It's because they had stacked in a bunch of subaccount fees and other things. So I would actually go read the, you know, all the, the summary plan description, all the documents that you, when you become a new enrollee into a 401k, they're going to give you a bunch of disclosures. Actually go look at it. Go see, you know, who's actually the custodian? What are the internal expenses? What other fees are you paying in this 401k? And what are your investment options? There you go. If you see index funds, that's probably good key that you have a low cost options, but just make sure it's index funds with the benefit of low operating expenses, not index funds that still are costing you over 1% per year to have. That feels a little counterintuitive. Love it.

• 31:19Speaker 02

  Moneyguy.com/resources, if you want to go grab that, what to do with your 401k resource. We get questions surrounding that a lot. That's why we made that resource, kind of put all the basics in that one little package for you. So go grab that. It's free. And Nova.

• 31:34Brian Preston?

  Huh?

• 31:35Speaker 01

  Did you like that one better?

• 31:35Brian Preston?

  What do you mean?

• 31:36Speaker 01

  Did you like that question? Did you feel better about being able to give it?

• 31:38Brian Preston?

  Oh, I feel like we added some value. Plus, we had a resource that came up on the screen. I mean, whenever a resource pops up on the screen, yeah, we got them on that one. That was a good one.

• 31:47Speaker 02

  Nova, if you would like a Money Guy Tumblr, just email [email protected].

• 31:52Speaker 01

  Hey, can I throw out one, one thing really quickly? For folks who might be visiting with us for the very first time, I don't know if you know this, we have a brand new show that just rolled out called Making a Millionaire and it's pretty awesome. We have a lot of fun. We had our second episode debut last Monday, not yesterday, but the Monday before, which means the next one's coming out.

• 32:12Brian Preston?

  Next Monday.

• 32:12Speaker 01

  Next Monday. So if you are not subscribed to the channel, make sure you subscribe right now so that you get notified when our new content comes out. We love that we get to do this stuff for you guys and we hope that it is incredibly valuable for you. So thank you for allowing us to be part of your financial journey.

• 32:29Brian Preston?

  Hey, do you know which episode's coming out next?

• 32:32Speaker 01

  Oh, yeah, that's a good one.

• 32:36Brian Preston?

  Y'all didn't hear that.

• 32:39Speaker 02

  No, no, it's a really, it's a really good one.

• 32:42Brian Preston?

  Everybody just got to see our reaction, like, oh.

• 32:45Speaker 02

  That's what's coming on Monday. Okay, a question from JP is up next. Hello, I'm 22 and about to get married. Congratulations, first of all. That's exciting. What are some practical ways to get me and my lady on the same page financially? Which that made me chuckle. Good question, though.

• 33:05Brian Preston?

  Bo, you're an expert of this.

• 33:06Speaker 01

  So let me tell you, on the way to the honeymoon.

• 33:10Speaker 02

  Can I finish it? He did say a little bit more. He said, we both believe in investing and saving, but I want to ensure communication is the same, because that is different than just philosophy, right?

• 33:20Brian Preston?

  Because I will, I'll pick on you, but then I'll let you give a lot of details. My wife and I, we actually did some premarital type counseling before we got married to talk about communication and other things. I think that's actually very helpful. I really do, because you might find out in those conversations how things you think, the way you look at the world or money, and how your spouse or future spouse looks at, might be more different, because we all grew up in different houses, different mindsets, and it's kind of good to kind of get some of that on the table and have somebody in between, whether it's a pastor or a counselor. It's just good to have somebody as a third party there. And I think it's a good exercise. How could having open

• 34:03Brian Preston?

  conversation about big life things not benefit you in the future? Now, I want to pick on Bo.

• 34:09Speaker 02

  Okay.

• 34:10Brian Preston?

  We did a show, and you can find it in the archives. It's going to be from 2012?

• 34:15Speaker 01

  Yep, that's, yep, that's right.

• 34:17Brian Preston?

  So that's how long we've been doing this, guys. So 2012, there was a show, it's going to be before June.

• 34:23Speaker 01

  I think the name of it was Love, Marriage, dot, dot, dot, and Finances. Look at that still.

• 34:28Brian Preston?

  So I had Bo, I wrote down a bunch of great questions for Bo, because I knew he was just going to make all kinds of mistakes. Now, he's been married so long, he's a veteran of this thing. But I think it was some question, like I said, how much would your spouse? Be able to spend before they have to come talk to you about it.

• 34:47Speaker 01

  Yeah, like what's the check in number?

• 34:48Brian Preston?

  I think your number was like 20, 30 bucks.

• 34:50Speaker 01

  It was $40.

• 34:50Brian Preston?

  And I was like, Bo, I bet her shampoo costs more than that.

• 34:53Speaker 01

  You would be right.

• 34:54Brian Preston?

  And he was like, no, there's no. And then this knucklehead, you really did plan on your honeymoon. Y'all are gonna have all these financial conversations.

• 35:03Speaker 01

  The flight, what else can you do on a flight?

• 35:04Brian Preston?

  Now that, I mean, I would encourage everybody to go listen to the show. It's great entertainment. But I would ask you now, as a guy who's been married unbelievably, I mean, you've been over married. Are we 13 years this year?

• 35:17Speaker 01

  This year will be 13 years.

• 35:17Brian Preston?

  That's incredible. Wow, makes me feel old. Cause I got to see this thing from inception on. What have you learned?

• 35:24Speaker 01

  Yeah. So I do think that communication is wonderful. And before, Ruby, if you're okay with this, before I talk, because me and Brian have both been married for like a long, long time and we bring like financial stuff into it. When you got married, was there something that you and your husband did to like get on the same page? From a communication standpoint, specifically around finances, was there something that you're like, hey, this is, this is how we did it, how we navigated it?

• 35:46Speaker 02

  I will say what I wish I had was our food course. I don't even mean that cheekily.

• 35:50Brian Preston?

  Wow, look at that. Ruby finds a product placement in the answer. Well, that's brilliant.

• 35:55Speaker 02

  I'll say the, I'll say more real answers before that, but genuinely, I think that kind of thing is really helpful. I remember he had listened to some financial like audiobook before. We didn't know you guys at that point. So we really missed out.

• 36:08Brian Preston?

  He's a big guy. I'm a little scared of him. So I'm not gonna hold that against him.

• 36:11Speaker 02

  But um, that, and that, that just started the conversation. So honestly, it was more, there was a while where we would do weekly budget meetings or like just have like a check in about, hey, here's what we're spending, here's what we want to do. And we had like some high level goals. I remember, we were both working full-time jobs and not making very much money, but we were trying to like save one whole paycheck. I remember that was like our goal that we had. And so like, we had a goal that we were working towards and like the reasons behind it. So like, if anybody wanted to stay home with kids one day, we could do that. And then we would try to check in on the minute things weekly. That was what we did at the beginning. Wow, that feels so long ago.

• 36:48Speaker 01

  I love it. One of the things that I learned is that. Equal voices and equal opinions matter. You know, I came into my marriage, I was already a CFP, was already a CFA, had been managing money, was living in this world. And so I thought I knew everything about finances. I thought I had all of the right answers. And I was very quick to let my bride know that I had all the answers. I had it all figured out. And what I came to recognize as our marriage has moved on is that when it comes to money and finances, it's not binary, right answer, wrong answer. It's not, not that. What it comes down to is what are your ultimate goals? What are the things that you derive value from? And what do you want to allow your money to do to help you hit those goals?

• 37:30Speaker 01

  And once I started realizing that I could not impose my goal of living as cheap as possible and saving as much as possible and investing as much as possible and doing and sacrificing as much. I could not impose those goals on my wife. And I had to let her have space to communicate, hey, here's what I want our life to look like. Here are the things that I value. Here's how much I care about throw pillows. And I had to have that conversation with her and let that be an open conversation. And now what I've recognized is that as we've aged and as we've matured, a lot of the things that we want are now the same things. Hey, we want to do this to the house. We want to create this memory for the kids. Or we want to work towards this financial goal.

• 38:12Speaker 01

  It's because we've had an ongoing, continuous back and forth conversation where we're both able to speak into it. We joke all the time. If I were completely in control of our marriage, it'd be the most boring marriage in the world. And we'd have a gazillion dollars saved up. And if she was in control, it'd be the most fun marriage in the world. We'd be dead broke. And yet, here we are in that wonderful middle ground. And that's what I think a good partnership does. It finds the middle ground that works for all parties concerned.

• 38:40Brian Preston?

  I love, I have real stuff here, but you said something that made me think of, because like I said, I've seen this thing from inception on. And I remember when Bo had a house back in Georgia. And, um, and you know, and he had this house before the marriage. And when, when, when she came on the scene or whatever, you wouldn't turn the, the heat on. Not in the winter time. In the winter. I mean, there was like a, it's like almost like the pipes would have to be freezing outside for Bo to turn the, the, it's just things like that. Remember this is the guy that also, when he lived, because him and his wife lived with us for like four months when they were moving up here to Tennessee. And my oldest daughter still talks about how Bo used all the big spoons because he was eating cereal.

• 39:24Brian Preston?

  Every meal was a, was cereal because he was trying to save money. It's amazing that he's been able to feed these muscles with, um, just carbohydrates from, from general meals. It was truly amazing, but, um, okay, here's, here's what I wrote down as greatest hits. Be intentional. And what I, I'm serious about this. And look, I'm going to tell you to do the hard thing. Don't skip leg day on this one is budgeting. I hate budgeting. Nobody likes budgeting. It's not sexy. It's not fun, but I think in a brand new marriage, y'all should probably be very collaborative. Sit down, actually write down where you think money, what money's coming in, what money's going out. It is built into the food course is Rebe, you know, to kind of echo

• 40:06Brian Preston?

  something Rebe said, but do the budget at least in the beginning. So you can get that muscle memory and build a cash management plan where it's automatic for the people and the money just starts going where it's supposed to go naturally. And then you can graduate out of where, so 10 years into marriage, you're not asking for your spouse every receipt that they have because you don't have to do that after you've done it long enough that you developed the muscle memory. But do the budget. The second greatest hit is do the net worth statement. Look, one of the things I didn't start doing my net worth statement until my very early 30s, and I regret that tremendously. So use at 22 years of age, y'all starting out as a marriage. If y'all do the angle net worth statement, you're going to be amazed. Even if that number is negative

• 40:45Brian Preston?

  or even zero in the beginning, it's okay, because you're going to build essentially your story arc and be able to every year, go back and review it and see how the assets have changed. See how much debt has been paid down and kind of just see where the wins and losses are. So y'all can talk about it because then it's a great conversation piece. For the next thing I was gonna tell you, and this ties into the intentional part. I have an annual skip day now. And I love, you know, I, you, I look back on my high school days. One of my favorite memories was senior skip day. And by the way, my daughter, when she went through and had her senior year, I let her skip because I loved it. I mean, it is such a, it's, but it's, it's such, it's, it's crazy because, but you feel naughty

• 41:26Brian Preston?

  doing something that's actually good because it was organized. Like we went bowling online. I think she went and did some organized thing, but, and it's the same way with this. So even though it feels like you're naughty and the fact that you're skipping work for a day to, to hang out with your spouse, you're actually going to be very intentional about it and you're going to go to a coffee shop or, or somewhere, go have breakfast together and you go sit down and you review the net worth statement. You go review your goals for the year. You go review the goals from last year. And you're gonna kind of craft out, what, what trips are we doing this year? It can be so fun. And, um, and it really is, is, is a great, meaningful way to, to communicate and build in the marriage.

• 42:05Speaker 01

  Love it.

• 42:06Speaker 02

  Wonderful.

• 42:07Brian Preston?

  Marriage skip day.

• 42:09Speaker 01

  Marriage.

• 42:09Speaker 02

  Marriage skip day.

• 42:10Brian Preston?

  We make that, this could be another, just like I want to have Money Guy Supper Club. We can have marriage skip day.

• 42:18Speaker 01

  Money Guy.

• 42:18Brian Preston?

  Cause remember, Money Guy Supper Club is where everybody's gonna, you do the food, food course. Well, you know, while, you know, trade houses every month, they'll go to a different house and, and do the, the thing. So we can have marriage skip day.

• 42:29Speaker 01

  You and nine friends, uh, here's our, here's our desire for you. You and nine friends, we're gonna do a progressive dinner, nine courses. And each course, you're gonna go through one of the steps of the food all the way through. This writes itself, Nick, I think.

• 42:46Brian Preston?

  He laughs at my stuff. He don't laugh at yours.

• 42:48Speaker 02

  But if you want to know more about the food course, of course, I'm a little biased, I'm here, but I, it is a really good course. And if you're looking for something to spur some of those conversations and learn how each other communicates about money.

• 43:03Speaker 02

  What your goals might be as a couple, go to learn.moneyguy.com and at least check out the food course. It's a new, very low price. So honestly, it's a great, great intro to personal finances and all things money guy.

• 43:18Brian Preston?

  We got it all backwards. We made it better and cheaper. Those things aren't supposed to work together.

• 43:22Speaker 02

  That's accurate.

• 43:23Brian Preston?

  You're supposed to, you're supposed to charge more when you make something better. We're like, nah.

• 43:27Speaker 02

  We don't always do things the traditional way like that, but it's better for you. So go to learn.moneyguy.com and check it out.

• 43:35Brian Preston?

  Do what we want.

• 43:36Speaker 02

  All right. JP, if you'd like a Tumblr also, go to.

• 43:40Brian Preston?

  Look at that, giving away more money.

• 43:42Speaker 02

  I am.

• 43:43Brian Preston?

  You give it a Tumblr.

• 43:45Speaker 02

  Email winner at moneyguy.com.

• 43:47Brian Preston?

  Take that, Snipes.

• 43:49Speaker 02

  They're mad at you today.

• 43:52Brian Preston?

  She's not gonna be mad at me. It's not me, it's Rebe.

• 43:54Speaker 02

  Okay. Big Shoe has a question next.

• 43:58Speaker 01

  She is scared.

• 43:59Speaker 02

  I have a large income at my first job. How do I plan my savings in case I never make this much again? Should I mega backdoor max or put some in brokerage so I have access to the funds earlier? Thanks. What do you think?

• 44:16Speaker 01

  I, I love this question because a lot of people find themselves in this situation. I mean, the, the clear and obvious, obvious example is like professional athletes, right? You make it through and you sign this big contract. You're making this huge income at a very, very early age. But we all know the life cycle of most professional athletes career wise is not all that long. You make this great money for a very short time period. But even if you're not a professional athlete and you're not someone who lives in that world, it's not uncommon for young folks today, especially if you work inside a unique industry like the technology industry where you have some like very high earning years, very early on in your career, but it is not clear and it is not apparent if that's going to continue

• 45:00Speaker 01

  to hold, if that's going to be the case forever. So what do you do and how do you capitalize on that? Well, my advice, and this is the same advice that I give professional athletes when, I mean, I literally, I was talking, I was talking to a guy earlier this week and I literally gave him this advice. I said, hey, right now, while you're making this kind of money. Save like a banshee because these days might not always be here. Now you still have to balance like, how do I enjoy the present, make members of day and do things today? But if you know that you are in a very unique, very high income situation, in my opinion, it makes sense to take advantage of as many different savings opportunities as possible. So if you have access to like a mega backdoor Roth or your 401k, yeah, I love seeing you do that. If you can do an employee stock purchase plan, yeah, I love seeing you max

• 45:44Speaker 01

  that out and do those things early on and keep your lifestyle and your living expenses, your fixed expenses as low as possible, at least until you start building up that base. Because what happens is as you build that base, then you reach the, what point do you reach, Brian? You reach that bowling point, right? And then, the bigger the numbers get, the bigger the numbers get, the bigger the numbers get. But you gotta get there first. Would you agree, I mean, Brian, you've talked to tons of young folks who make tons of money. How do you counsel them to think about that moment in time lightning?

• 46:15Brian Preston?

  Well, I mean, there's, there's several things. I mean, I haven't told a good Dave Grohl story in a long time. Um, you know, Dave Grohl and his father had a very contentious relationship. But when he got, started getting his first checks from the Nirvana days, his dad, who was more buttoned up, business type, um, had told his son, he said, hey, look, you know, you, you need to be a little scared. Assume these checks are not going to keep rolling in. This might be just a moment in time. So you need to act accordingly. And Dave says, look, I took that to heart and I started saving that money, putting it to work. And I think that's what, you know, and also I have some experience. I worked with a lot of professional athletes at the second firm I worked at. And it used to make me

• 46:59Brian Preston?

  so sad. Actually, first and second firm did a lot of professional athletes. So, but, um, it made me so sad to see these players that would be getting these seven figure paydays. But they, it didn't matter if I would tell them, they still wouldn't listen. Cause I think it's just human nature is we just have this recency bias. We think what's happening today will happen tomorrow and will happen 10 years from now. And it's just not the case. I mean, if you're, for a lot of people who make great money, that's why income stats are always skewed is yes, somebody might make a million dollars in a year, but they'd never tell you, did they make a million dollars for 10 years? No, more than likely, a lot of people make a million dollars, then two or three years later, they're making $200,000 because they had a really good.

• 47:40Brian Preston?

  Bonus year or something else. So you just, you need to know that sometimes you might be making 20 years worth of income in three years. And you need to act accordingly. Now, here's the good news. If you do this, if you actually act disciplined and use the financial order of operations, it's not like you have to go in this thing cold. That's what cracked me up about Big Shoe is because Big Shoe is like, is there a way I need to, yeah, think about it through the food is because I've walked you through because this thing's going to do multiple things. It's going to build up your cash reserves to keep you from making desperate, bad decisions. It's going to keep you away from debt. It's going to let you start investing in the most tax favored way possible. But then it even breaks free in step seven and says, hey, once you get beyond

• 48:23Brian Preston?

  25%, what do you need to do in step seven? When you think about hyper accumulation, this is when you say, when am I going to use this money? When am I going to need this money? Because maybe I need to save more than 25% or maybe I'm copacetic and actually can stop right here and even recalibrate from 25%. You don't know that without doing the exercise. But what I like about this, if you plan this way, is the worst thing that can happen to you is you get more freedom and flexibility in the future to change course. If you defer and you say, you know what, I'm making great money now. I'll just wait three, I'll start doing this three years from now because I'm sure I'll be making great money then. There's no way to get it back. The water doesn't go back up the hill

• 49:07Brian Preston?

  and you have to more than likely, you might get caught in a desperate situation and then with a lot of regret, a lot of wishing, man, if I'd have just done things a little differently and I'd be in a different place. That's why our situation works better because it's just like me. I thought for sure I was retiring by the time I was 50. So when I was in my early twenties, I was like, I'm going to save so that I can retire at 50 years of age. I guess what? You guys make my job so much fun that I got in my 40s and I was like, I will never retire. But I was like, am I mad that I saved as much as I did? No, I get to do even more stuff where I don't even worry about the money with it. I'm like,

• 49:50Brian Preston?

  yeah, hey, Caleb, go redecorate and do things all differently in the studio and spend this much more money. It's not because it's tied to anything, but it will probably pay itself back. And that's what I love about the freedom and the flexibility when you don't have to make decisions out of obligation. You get to make them out of your passion, out of your desires. And that's why owning your time, owning your money, owning your life that much sooner. So Big Shoe, act accordingly. You know, if you have a good income coming in, but you're not sure that a good income will come forever, then be serious.

• 50:23Speaker 01

  And in terms of setting yourself up for success, when you have a big income, you can either have a large savings rate or a large lifestyle. You make the choose. It's a balloon that you squeeze one way or the other. If things don't go your way in the future and the income goes away, it is much easier and much less painful to back down your savings rate than to try to back down your lifestyle. So if you're really nervous about this money not sticking around long term, make sure you don't live a lifestyle that requires this level of income for you to maintain that standard of living.

• 50:58Brian Preston?

  Hey Boo.

• 50:59Speaker 01

  Hey Boo.

• 51:00Brian Preston?

  I said Boo. Hey Boo. You know what they say about big shoes?

• 51:05Speaker 01

  Tell me more.

• 51:05Brian Preston?

  Big socks.

• 51:07Speaker 02

  That's what they say.

• 51:08Brian Preston?

  I didn't get a laugh from Nick on that one. I should have stopped one for one. Now I'm one for two.

• 51:14Speaker 02

  Got a little overconfident.

• 51:15Brian Preston?

  Yeah. That one didn't even foul off the wall either. That was just a swing and a miss.

• 51:22Speaker 02

  Well, Big Shoe, if you would like a Money Guy Tumblr, just email [email protected].

• 51:27Brian Preston?

  Come on, Nick. Can you give me a little bit on that?

• 51:30Speaker 01

  Sick burn.

• 51:33Speaker 02

  He said, uh, he'll give it to him when it's good, you know?

• 51:37Brian Preston?

  We don't have to, you don't have to convey the messages. That's actually one of the powers of them not having microphones.

• 51:46Speaker 02

  I only convey some of them.

• 51:48Brian Preston?

  See, I gotta laugh on that one. Okay, we're two for three now. Picking that percentage, right? Oh, get me in Hall of Fame.

• 51:55Speaker 02

  Okay. Uh, next question is from David L. It says, how do you avoid comparison from others' financial picture? I'm 32, two kids under two, new house, within the Money Guy rules. My wife is in a new, is in a job transition. How do we stay encouraged? Sounds like the picture of the messy middle, Bo.

• 52:18Speaker 01

  Bro, you are in.

• 52:19Brian Preston?

  I love this question.

• 52:20Speaker 01

  You are in the messy middle. Uh, the messy middle is this stage and station of life where all of a sudden you wake up and you're like, I've got no free time. I've got no discretionary income. I've got a thousand different things pulling me in a thousand different directions. And I feel like I'm stretched so, so, so thin. And because I feel that way, one of the things that I naturally do to cope is I look around at people around me. I'm like, man, it doesn't seem like they're struggling the way I am. It doesn't seem like they're as tired, doesn't seem like they're freaking out. It becomes very easy in this season to begin to compare yourself with other people. And so how do you stay motivated? How do you stay, uh, level set? Well, the first thing I would tell you, and this is what my wife and I talk about because you, you know, we got three little kids that, I mean, we don't, they're not under two.

• 53:05Speaker 01

  We got one that's right at two. We're like, you know, it doesn't matter what other people have going on. So someone else, we go out to a restaurant and someone else's kids are like perfectly behaved and they're, you know, crocheting right there and our kids are just taking tater tots and flinging them across the restaurant. I'm like, hey, this is our life right now and this is our season and this is our family and this is our us. And that's okay. It doesn't matter what other people around us are doing because what we care about is our family and what we're doing. And your finances are no different. So if you and your wife have a solid line of communication, we say, hey, This is why we're making the decisions that we're making. We want to be able to pay for these two kids to go to college. We want to be able to be financially independent. We want

• 53:48Speaker 01

  to be able to provide memories and create a lifestyle that our kids are going to look back fondly on. And we're going to make sure that we don't have to move in with them in the future. If you guys have clearly defined the goals and the things that actually matter to you, it does not matter what anyone else has going on. And oftentimes, in the world in which we live today, most of what you see other people have going on is kind of fake or pretend anyways. Agree? Disagree? Want to fight?

• 54:15Brian Preston?

  I had so many ideas just popping in my head. None of this is probably going to work, but I'm just going to go with it. You know, I'll buy the cold medicine. I was thinking about, because I had an initial thought that I immediately wrote down, but I was like, but where did that come from? And I think about when I was a kid, the few times I got picked on. I've told you, you guys all know the Johnny Thaxton and the Andy Suttle stories. Second grade over my, my pick and pay shoes and then in seventh grade in shop class. You know, and I remember as a kid, you go home and you tell your parents, you know, before my dad would, you know, after a while, he's like, you need punch, punch them. But, you know, before that, he but suddenly picking on you because they're jealous of you. Now,

• 54:55Brian Preston?

  that is such as a kid logic that works. But now as an adult looking, I'm like, that was, what the heck was he talking about? But it, but it is, it is a great skill set to break the illusion of who cares, you know, what's going on? Because that, what I wrote down immediately was you've got to break the matrix. I think the system wants you to be broke. I mean, we have the entire world trying to get you to overconsume. We have everybody, you know, it's just like one of the big custodians out there just changed how they're doing the default cash management where it's hosing you out of an extra percent or two. I'm not going to say any names, but it, but it, there's stuff like that. I'm like, goodness gracious, the system continues to show me they don't want you to have money. So if you can understand

• 55:40Brian Preston?

  that the matrix is broken. That you've got to completely retrain your brain to where more likely your friends, you can love them, you can go on vacation with them, your relatives, you can love them, you can do it, but realize they're probably horrible with money too. So you can't even use the comparison of all the things you see in their life or what you see on social media and it brings you like, man, I don't know if I love what's going on in my life because they make me feel bad. Realize it's all fake. They're giving you the highlight reel. And that's why I spent so much, and we had a studio tour come by yesterday and they go, guys, those last two chapters just crushed it. Those last, Millionaire Mission,

• 56:20Brian Preston?

  I basically tell you why you got to focus on your why and knowing what makes you happy. And you know, and I caught on at a really young age because my dad got laid off when I was in middle school and I realized that when we had some of the happiest days of our lives, when my parents were in their broker's stages of life because my dad was around and we were doing crazy funky vacations, like going to timeshare presentations. It was such an education for me because I realized how disconnected happiness was from money. And that's why, David, you've got to spend some time knowing, take inventory, it's all built into the book, it's built into our food courses. Take inventory of who you are, what brings you happiness, what really makes you drive to do things and then cut out

• 57:03Brian Preston?

  the noise. Lean in, look, of course, our conflict is we think that we have the better message, but I really do believe it. I think if you hang out with us enough, we have this side effect of creating success. That's why it's called the abundance cycle is that we just keep loving on you. I try to break the matrix message so that you can feel empowered to live your best life and not get caught up in having the latest, greatest, moving the goalposts, you know, after you probably are in a place where you're pretty happy. I mean, there's a lot of things that I think that don't let the system. Convince you to outspend your happiness to where you actually end up can over consuming to the point that you actually took away your opportunities for living your best life.

• 57:47Speaker 01

  A few tips on how to stay encouraged to use as a tail end of your question. Date night for you and your wife, steal away, get away from the kids and just till you go out and just remember it's a time to reflect on, hey, things, yeah, life is crazy, life is stressful, life is wild, but you know, it is pretty good. It's pretty sweet. We've got wonderful things going on in our life. Ain't no net worth statement. You do that, that allows you to keep the long-term perspective on, okay, yeah, even though right now things feel tight and we're pulled thin, we're ultimately working towards a great, big, beautiful tomorrow. And then on those date nights, when those conversations define, what are the things that make you happy? What are the things that you actually derive value from and do more of those things? And what I think you're going to find is that they're probably not

• 58:30Speaker 01

  things that cost a lot of money, especially not at this station and season. I'll let you give away a Tumblr, then I'm gonna tell a story.

• 58:37Speaker 02

  Great. I am going to give away a Tumblr to David L. We really appreciate you asking your question. Just email [email protected]. Story.

• 58:44Speaker 01

  This is more just for me, so I hope you guys enjoy this. It's been like so cold in Nashville. Like it's been, last week it was like seven degrees, which for like southern was just like so stinking cold. But yesterday it was beautiful.

• 58:58Brian Preston?

  And today's beautiful.

• 58:59Speaker 01

  And today is beautiful. So I got home and my, I've only had, I had two girls and now I've got a little boy who's two years old. And I'm like, you know what? My daughter's had volleyball practice. So I was home with Stone and I was like, you know, we're just gonna go outside. We're just gonna go outside. And you know what he did? And because he's two and he's walking around, he's kind of starting to talk. He went and found a stick. Buddy, do you know how happy he was with that stick just swinging around? When, again, this is my first boy, went up to a tree and just crushed the tree with a stick. And I was like, this is it. This is exactly what the messy middle is supposed to be, watching my son pick up a stick and go whack a tree with. And I was like, you know what? That was probably my best part of yesterday. It didn't cost me a dime, didn't cost me any money

• 59:43Speaker 01

  at all. And I think the more that we can reflect and recognize those things, whatever those things be for you, maybe it's a good workout, or a really good run, or waking up early in the morning, or whatever that thing is, if you can begin to focus on those things, some of the busyness, craziness, hecticness, and stressfulness of life can just fall away. But it takes intention and it takes effort. You have to be willing to put yourself in the mindset to recognize those things.

• 1:00:08Brian Preston?

  You telling that story last week, I'll just say his name, Carter, our third in command here, he sent us a message to me and Bo, this is the risk of dealing with online personalities. And he said, "Top three best day of my life," because they went on a family vacation, and his oldest son, who's not that old, they're doing diamond ski. By the way, I don't ski. You know, you ski. Most poor kids don't ski. But anyway, best, top three, he told me yesterday, he was like, "Yeah, I had to, I had to be careful how I worded that because I got in trouble because my wife started counting down, 'Wait a minute, we have three kids,

• 1:00:48Brian Preston?

  we've gotten married.' How can you say this is the top three?" But I did, but it is amazing. I'm telling you, that is experiences over stuff is where the jam is because forever, his son is going to remember that day. He's going to remember that day. And that's the stuff that just gives me the tingles on the arm and makes the hair stand up is because I can, I can visualize those things with my own life. You know, that's why people wonder why in the world I love going to Disney World so much. And you know, when I've lost my father at a young age, and then I still think about going between Peter Pan and It's a Small World, and those things is priceless. And that's why, you know, money is only a tool,

• 1:01:33Brian Preston?

  and you have to figure out how to use it and extract as much of the value of happiness and really purpose that you can. And it's not going to be in the stuff. I can tell you that. I've been poor, and now I've been wealthy. And yes, it's nice. I love that I can go buy concert tickets and do all this other stuff. But I can, but it still doesn't change the way the relationship stuff works.

• 1:01:56Speaker 01

  Love that.

• 1:01:57Speaker 02

  That is very well said. I mean, one of our Mission here is to help you, help take some of the stress out of the personal finance part of your life so that you can actually focus on what really matters, whether that's out there with the, playing with a stick with your two-year-old, or the big moment of you got to take your kid out on the slopes. Like, it's really about that relationship, right? And actually what matters to you. So that's why we do what we do. That's why we're here every Tuesday at 10 a.m. Central, answering your questions. And that's why moneyguy.com/resources is chock full of free resources to help you go deeper on what we talked about today. So be sure you check that out.

• 1:02:36Brian Preston?

  Guys, I mean, I've loved it. I felt like today was a fun day.

• 1:02:39Speaker 01

  Every day.

• 1:02:41Brian Preston?

  We do have a good time. Two for three on some jokes with comedian Nick. That's a good thing.

• 1:02:47Speaker 01

  Did he get two?

• 1:02:48Brian Preston?

  We got to preview that, I previewed that Caleb might be doing some crazy things in the studio here.

• 1:02:54Speaker 01

  Of course he would say that.

• 1:02:55Brian Preston?

  Rebi did some product promotion throughout the day. I mean, what was some, pretty cool. I'm proud of that.

• 1:03:00Speaker 02

  Oh, I talked about the food court. I was like, I don't know.

• 1:03:02Brian Preston?

  Yeah, that was a compliment. I mean, look, my stuff is so bad that you can't even tell when I'm giving you compliments and compliments anymore. But I think if you, if I could boil it down to one statement is there is more to wealth than abundance than money. And man, are we blessed to hang out with you guys. We do not take you for granted. Please subscribe. Please keep supporting us. And we're going to keep doing this because we really do believe in abundance and just loading you guys up. I'm your host, Brian Preston and Mr. Bo Hanson, Money Guy team, out.

• 1:03:34Speaker 01

  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.