Roth vs. Traditional, Dividend ETFs, and Catching Up in Your 40s (Money Q&A)

In this Q&A Andrew answers eight real listener questions, plus an AI privacy leak that could already have your data sitting in Google search results. 👉 Join Andrew’s FREE Investing for Beginner’s Masterclass: https://event.webinarjam.com/q05p7/register/0o8z9io?webinar_id=21 👉 Live Call Registration Form: https://docs.google.com/forms/d/e/1FAIpQLSeqIw5xncfn5tZbGG_U22iZ3BUmyHe9fPvBQaC1vW_x1D7bJA/viewform What You'll Learn in This Episode How to pick between a Roth and traditional 401(k) when there is no employer match Why the ETF versions of these funds let you skip the $3,000 minimum entirely Whether dividend ETFs like SCHD actually belong in a Roth IRA The right debt payoff order when you have cash in the bank and a car loan How to pull income from a brokerage account and stay in the 0% capital gains bracket What catch-up contributions look like at 50 and 60, and how to run your own catch-up math The AI setting to turn off before your chats end up in Google search results Start Here Join the community built to help you master your money, stay accountable, and reach financial freedom. 👉 Try Master Money Academy FREE for 7 days today! https://mastermoney.co/join/ 👉 Join Andrew’s FREE Investing for Beginners Masterclass https://event.webinarjam.com/q05p7/register/0o8z9io?webinar_id=21 👉 Join The Master Money Newsletter where you will become smarter with your money in 5 minutes or less per week Here! https://expert-hustler-605.ck.page/6aa7bb9a79 Partner Deals Indeed → Get a $75 sponsored job credit http://Indeed.com/personalfinance Wayfair → Up to 60% off | MEMORIAL DAY WAREHOUSE CLEAROUT http://wayfair.com Chime → Get more rewarding fee-free banking at https://www.chime.com/PFP Monarch Money → The all-in-one financial tool + Get 50% Off at http://www.monarch.com/PFP Gelt - Get 10% off your first year by mentioning “Personal Finance Pod” on the intake form; the CTA is to book a free discovery call at joingelt.com DeleteMe → 20% off with code PFP https://joindeleteme.com/PFP20/ Resource/s Car Insurance https://secure.money.com/pr/gc43ce394da5 Best HYSA https://secure.money.com/pr/r453ecf4d190 Stock Brokerage Accounts https://secure.money.com/pr/v8d06f8de92c Best IRAs https://secure.money.com/pr/oe09b73d1952 Tool/s Mentioned The 1-3-6 Method Emergency Fund Mastery https://mastermoney.co/the-ultimate-guide-to-managing-your-emergency-fund/ Total Cost of Ownership Calculator https://mastermoney.co/total-cost-of-ownership-calculator/ Compound Interest Calculator https://expert-hustler-605.kit.com/aefaaad27e Investment Calculator https://mastermoneyresources.com/investment-calculator-page Episode/s Mentioned The 1-3-6 Method For Building & Managing Your Emergency Fund https://youtu.be/rGdII_Z0hnw 5 Side-Hustles That Can Turn into a Full time Income! https://youtu.be/bEIzgYWLi1I 5 Side Hustles That Can Turn into a Full time Income! Part 2 https://youtu.be/10C4zt9w8NQ 5 Side Hustles That Can Turn into a Full Time Income! (Part 3) https://youtu.be/jEkKQZVYLSg 5 Side Hustles That Can Turn Into a Full Time Income (Part 4) https://youtu.be/DPQwY_U3lKY How to Pay No Taxes in Early Retirement, Debunking the Mortgage Fee Fiasco,and More With Katie Gatti https://youtu.be/2JThReUdrL4 The Simple Path to Wealth (With J. L. Collins) https://youtu.be/-02BNewBfbo Watch Next 5 Side Hustles That Can Turn Into a Full Time Income (Part 4) https://youtu.be/DPQwY_U3lKY Why Your Healthcare Costs Keep Rising with Dr. Jordan Grumet https://youtu.be/daPVY9WCCAw The System to Pay Cash For Cars (and NEVER Have a Payment Again!) https://youtu.be/kgmjjQEN3Xs Reset Your Money Mindset, Get Out of Debt, Save for a House & Understand Credit Scores (Money Q&A) https://youtu.be/JGoKB92rddo Are Trump Accounts Worth It? (And What's Actually Better) https://youtu.be/jJKCfTvTm0Q Connect with Andrew Instagram → https://bit.ly/Skool-Instagram TikTok → https://bit.ly/Skool-TikTok Facebook → https://bit.ly/Skool-Facebook Podcast → https://bit.ly/Skool-Podcast Youtube → bit.ly/Skool-Youtube Newsletter → https://bit.ly/Skool-Newsletter Website →⁠ https://mastermoney.co ⁠ X → ⁠https://x.com/mastermoneyco LinkedIn →⁠ ⁠⁠https://www.linkedin.com/in/andrew-giancola-45027b340 ⁠ Question for you: Which question in this episode sounded the most like your situation? Drop it in the comments. 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.

• 0:00Andrew Giancola?

  Now, if you watch this podcast on Spotify, Apple Podcasts, or YouTube, you've probably noticed the wood slat walls behind us. We wanted this podcast set to look professional, but also not be a project that was overly complicated. And I found these slat walls on Wayfair, and it completely changed this space. And it's now basically the background that you see in every single podcast or piece of content that we record. And that's one of the things that I love about Wayfair. You can shop thousands of products across different styles and budgets, use customer photos and reviews to see how things actually look in real homes, and find something that fits your space. They also have Wayfair verified products that are hand vetted by product specialists

• 0:41Andrew Giancola?

  using a 10-point quality inspection. And with more than 20 million verified five-star reviews, you can feel a lot more confident about what you're ordering. I've used Wayfair for this studio and our home, and I absolutely recommend them for your space. So transform your space with pieces that hold up to real life. Join Wayfair Rewards today and get 5% back on every single purchase. Head to wayfair.com or shop the Wayfair app for all things home. That's W-A-Y-F-A-I-R.com. Wayfair, every style, every home.

• 1:17Speaker 01

  Wayfair, every style, every home.

• 1:20Andrew Giancola?

  When I started the Personal Finance Podcast, I had no idea how big it could become. I just knew I had something I wanted to share, so I started putting it online. And looking back, I definitely wish I would have started a decade earlier. One of the horror parts about building something online, though, is making it look professional. A website used to mean hiring a developer, figuring out design, and potentially spending thousands of dollars. In fact, on my website, I spent tens of thousands of dollars. That's what impressed me when playing around with Hostinger's AI website builder. I told it what kind of website I wanted, and I built the first version in minutes. No coding, no designer or developer needed. And Hostinger doesn't stop at

• 2:03Andrew Giancola?

  launch. Their AI can help with SEO, website copy, email marketing, and more. Plus, your domain, website, email, and marketing can all live in one account, with plans starting at just $3 every single month. Hostinger builds your vision step by step. Create your website today. Go to hostinger.com/pfp and use code PFP for 10% off now. On this episode of the Personal Finance Podcast, we're going to answer your questions on this Money Q&A.

• 2:42Andrew Giancola?

  What's up, everybody, and welcome to the Personal Finance Podcast. I'm your host, Andrew, founder of mastermoney.co. And today on the Personal Finance Podcast, we're going to be diving into your questions on this Money Q&A. If you guys have any questions, make sure you join the Master Money newsletter by going to mastermoney.co/newsletter. And don't forget to follow us on Apple Podcasts, Spotify, YouTube, or whatever podcast player you love listening to this podcast on. And if you want to help out this show, consider leaving a five-star rating and review on Apple Podcasts, Spotify, or your favorite podcast player. Now, today on this episode, we're going to be diving into your questions. But I want to talk about

• 3:26Andrew Giancola?

  one quick announcement, is we are going to be doing some live calls, meaning we're going to have people call in live, and we're going to go through your specific financial situation, and the one thing that you are currently struggling with most. If you want to be a part of that, if you want to be a part of those live calls, we're going to put a form down below in the show notes for you to register for those live calls. And when we have that form in place, I want you to think through what the biggest problem that you want me to help you solve, because my biggest goal with this is to try to help as many people as possible solve their financial issues that they're currently having. Also, the folks we select to join the show, there will be some prizes, some freebies, and stuff that we're going to throw in as well. So

• 4:07Andrew Giancola?

  really, really excited to start doing that on this show. And if you feel as though that'd be fun content for you to listen to, to hear me interact with other people, or if you feel as though you want to be on the show, let me know in the comments down below as well. This is something we've been talking about for a little while now, and we're planning on doing that more. We want to be able to help people, real people, just like you, when it comes to your finances, and help you through some of your biggest money problems, because my goal is to bring you as much value as possible. My goal is to help as many of you as possible, and we want to create a million millionaire. So I'm really, really excited about that. Now, today, we're going to be diving into eight different questions. Plus, we're going to be talking about some privacy concerns that are out there that I want people to understand. And we're also going to go

• 4:49Andrew Giancola?

  into health corner at the very end, because I know you guys love health corner. So the first thing we're going to be talking through is we have a listener asking about Roth or traditional with their 401k, and they also have some other considerations in place. We have someone who is talking through some of their index funds and ETFs, and which combination of a two-fund portfolio they should be putting together. We have a couple of people with some cash saved, and they have truck loans and other debt in place, and they want to figure out which ones to pay off first. We're talking through someone's advisor told them to stop holding ETFs that are dividend-paying ETFs in their Roth IRA, and what should they do, and what's actually true. We have someone who is, wants to retire at 48 and needs to pull income from their taxable accounts, and figuring out how to do that without getting buried into capital gains taxes. Plus, we have

• 5:34Andrew Giancola?

  someone who has more than doubled their income and is investing really hard in their 40s, trying to play catch-up, and wants to know what they need to be doing. And we have someone climbing out of debt towards their first house, and wants a clear path on doing it all without feeling behind on retirement. So this is an action-packed episode. We also have an AI privacy concern that I said we are going to dive deeper into, and we're going to dive deeper into health corner as well. So without further ado, let's get into it.

• 6:05Andrew Giancola?

  All right. So the first question is from anonymous, actually. So how would you use AI to start to grow your business? And what AI automation opportunities do you see for someone looking to build a side hustle or new income stream? So for those of you who haven't heard our episodes talking through the side hustles that could turn into a full-time business episode, we are some of the first folks here to talk about AI businesses. In fact, some of the earliest ones we've ever done, we're talking through AI businesses recently, like right after OpenAI launched ChatGPT, we start to talk through some of the AI businesses that you could start. And there are a lot of AI opportunities out there. I also think, though, that people are over-indexing and over-leveraging towards AI, meaning that there's a lot of folks out there who feel as though AI is going to be the end-all, be-all. And I think there are, for sure, some things you

• 6:50Andrew Giancola?

  should be doing right now with AI. And we talk a lot about this in Master Money Academy. But there are also things that you most likely are probably over-indexing when it comes to AI. So I'm going to talk through some of the AI business ideas that I think could be available out there. But I'm also going to tell you step by step how I would think through this, because there's a lot of opportunity out there, a lot of opportunity that probably I don't even see right now, that you could start to look for this. So I want to kind of show you a framework on how to think about these first, and then we can dive into some of the opportunities. So number one is I want you to think about the problem. I want you to pick a problem first, not just the tool. And what do I mean by that? I want you to think through problems, especially when it comes to solving problems for other people. Because businesses that do very well, typically, they solve a

• 7:35Andrew Giancola?

  problem. What's an example of this? A business who will service your air conditioner in the middle of the summer, when your air conditioner goes down, and the business that can get out there in less than a day, is the business that you're going to want to go with, because you have a major problem. It's an urgent problem, and you need to get this problem solved as fast as you possibly can. That is solving a problem, and that is doing it in a way that's really going to help someone. So I want you to think about a bunch of different problems that are out there. And I want you to think about a bunch of industries that you know well. Maybe in the past, you were a dental hygienist, and you know a lot of the problems that happen inside of dental offices. You understand what dentists have to go through to try to get clients. You understand some of the operation procedures that dentists have to deal with. You understand some of the

• 8:19Andrew Giancola?

  headaches that dentists have to deal with when it comes to suppliers, or when it comes to making sure that they remind people for appointments, or making sure they answer the phones on time, all these different things. Every business has so many different problems involved with it. And if you have worked in an industry before, then you most likely know a number of those different problems. It doesn't matter what industry you were in. You could have been a nail tech in the past. Well, nail salons have tons of different problems. You could have worked for a tanning salon. You could have worked at a gym. You could have worked at a restaurant. But you know what the problems are, and I want you to think through a bunch of those. Now, number two is, once you come up with those problems, then I want you to come up with solution ideas. And you can start to use AI as an idea generator when it comes to this. But I want you to come

• 9:04Andrew Giancola?

  up with those solutions, and then validate those ideas as quickly as you possibly can. So you can have AI analyze a niche, for example, and let's just keep using the dental office as the example. You can have AI analyze that niche and say, is there actually demand there? Is there customers that would pay for some of these solutions that we're talking about? And what are the real competitors, and what are the real gaps here? Because if there are no competitors, specifically, if you do this in a local area, and there are no competitors in that area, well, you're going to have a nice opportunity to help a lot of different folks, especially when it comes to building some of these solutions. Now, maybe you don't want to do it in a specific niche. Maybe you want to do a broad-based solution. And if that's the case, you just want to make sure you are validating that. Now, when you're thinking about this, then you want to make sure that you're choosing the model that you want to go with.

• 9:47Andrew Giancola?

  So you could do something like a serviced based business where you set up AI systems into a business, or you set up AI systems for individuals. And then with that service, you can either do a couple of different things. One is you can have a setup fee plus a subscription fee. And/or two, you could do this with digital products. You could do this with content and an audience and try to, you know, first draw people to you and then you can help productize this. But there's a lot of different models that you want there. And so you want to come up with those ideas and ways to structure that. And then you want to build out that workflow for them. So you want to make sure that once you have the idea in place, then you have ways where you can, you can start to implement this, you can market this, and you can start to talk to people. What I would honestly do is I think local service-based businesses are the way to go.

• 10:29Andrew Giancola?

  I think having conversations with real people, seeing if there's real demand is going to be very helpful. In addition, if you're going to create content around this, and I think almost every business should have some sort of content plan at this point, especially in 2026. And if you are going to create content around this, use case studies. Use examples of real dentist office that can help you through this process. Use examples where you can show how you would implement some of these systems into specific offices. And then you can start to really make some traction here. If you can get into some of these franchises, or you can get into some of these locations that have multiple offices, that can be really, really beneficial for you and your business as well. So I think making sure that you test out this idea and seeing if it's something that

• 11:12Andrew Giancola?

  you can implement pretty quickly can be a very powerful thing. Now, what I would look for is industries where this can be passed along. So there are like, for example, the service-based industry, the industry for, you know, home services. So you can think of everything across the board from landscaping companies to cleaning companies, to lawn care companies, to pest control companies. Anything you could think of where it's home maintenance or it's home services. Those businesses typically, when you implement an AI infrastructure into one, you can do it into different industries. You can do it into different niches inside the home services industry. And so because of this, that's very easily replicatable into some of these other services. So it expands your outreach when it comes to implementing stuff like this.

• 11:55Andrew Giancola?

  I think business to business is the way to go when it comes to AI. Many business owners right now are just too busy. They're too busy to try to figure a lot of this stuff out. They're trying to get customers, they're trying to service those customers, they're trying to service their clients, and they're just not going to be working as hard as they possibly can to learn every single piece of AI like you would be. And so I really love, you know, looking at the service-based businesses and working with them, or looking at dental offices, or doctors' offices, or chiropractors. You know, there's all these different niches that you can go talk to where you want to find the companies that have money, that need efficiency, and they need your help. Because if you can solve their problems, they're going to gladly pay you. If you can't solve their problems, or you feel as though you're just offering a service that is fluffy and doesn't really do anything for them, which is what a lot of AI companies

• 12:40Andrew Giancola?

  do right now, well, that's not going to really get you anywhere. So I really think that you are thinking along the right track here. You just got to make sure that you do this in the right way. So thank you for sending in the question. If you have any other questions, though, on that, please let me know.

• 12:55Andrew Giancola?

  All right, the next question is from Kathleen. She says, hi, Andrew. I recently discovered your podcast a few months ago, and I have to say it's one of the best out there, offering solid advice. Well, thank you so much, Kathleen. I truly appreciate it. My company has an employee stock option plan, so they do not offer a 401k match. I max my Roth IRA and contribute to a brokerage. I earn about $160,000 per year, and I am torn between the Roth 401k and the traditional 401k, since there's no match either way. The tax bracket math seems similar, but with 25 years of compounding, I worry about the tax bill on traditional. What are your thoughts? So Kathleen, this is a wonderful question, and I think when you're looking at this, since

• 13:37Andrew Giancola?

  you don't have a match in either direction, then this is purely going to be a tax decision for you, as you can already kind of tell. And I think not having an employer match is just something that is A-OK, and it's still worth contributing to these accounts, but it is just one of those things that it's going to make, change the way we kind of think about this a little bit. So the size of your future tax bill is going to be something to consider. And when we think about our future tax bill, there's two options here. One is when you go to a Roth 401k, for listeners who don't know, the Roth 401k, you contribute money in that you've already been taxed on. So you've already been taxed on this money for your paycheck, but it grows tax-free, and you can pull the money out tax-free, meaning once the money's in the Roth 401k, you never have to pay taxes on those dollars again, even with the growth.

• 14:18Andrew Giancola?

  This is a really, really powerful thing, even when you're making a lot of money. This is a very powerful thing because it allows you to just not have to ever pay taxes again. Now, the traditional 401k means that you were putting money in from your paycheck, but it has not been taxed yet, okay? Then the money can grow, and then when you pull the money out, then you are taxed on whatever your tax rate is at that given time. So let's say you're making a lot less money in retirement. Well, you'll be taxed a lot less than you would right now. And so when you start to think about that, there are tax implications, but one is making sure that you pay taxes now, and then you never have to pay it again. And one is just deferring the tax bill to later on down the line, and hopefully you're making less money later on down the line.

• 15:02Andrew Giancola?

  Now, me specifically, I am someone who really loves Roth accounts. Now, many people will say, yeah, but you want to get the tax deduction in that given year. And sure, you absolutely may want to do that, depending on your situation. But I really love Roth accounts for a couple of different reasons. One is that I know how much tax I'm going to be paying in that given year, and I know in the future that it's taken care of, meaning the money is going to grow tax-free. Well, the growth of your money, especially since you are someone who is young, if you have 25 years of compounding that you're looking at this here, the growth of your money is going to be the majority over that timeframe, meaning that the money that you contribute will be minimal in comparison to that growth, especially if we get the same amount of returns as we have gotten over the course of the last couple of years.

• 15:46Andrew Giancola?

  And let me give you an example of this. I'm actually going to pull out my compound interest calculator here, and I'm going to look at how much this could grow over time. So let's just say, for example, that you maxed out your Roth 401k at $24,500 per year. So in the given year that I am recording this episode, the max to put in a Roth 401k is $24,500 every single year, okay? So if you had $0 contributed, which I know you already do, but if you had $0 contributed, we're going to look at this over the course of 25 years at a 7% rate of return. So when we pull this up, and you put $24,500 per year at a 7% rate of return over the course of 25 years, you'd have $1.549 million.

• 16:31Andrew Giancola?

  Now, of that, the total amount that you would have contributed would have been $612. And the amount of money that would be completely tax-free, that your money would have made, would have been $937,000. Now, this is only at a 7% rate of return. Let's look at this over the course of 30 years, because if you did this over the course of 30 years, the total contributions that you would have would be $735,000. This is the crazy part. And the amount of money that your money would have made would have been $1.5 million. Over double the amount that you actually contributed would have been the tax-free growth. The tax-free growth would never be taxed ever again, and the imbalance would be $2.3 million in that account over the course of 30 years. Now, this is at a 7% rate of return. Let me bump this up to a 10% rate of return, which is what we've used in the past, just to look at some of these numbers.

• 17:16Andrew Giancola?

  At a 10% rate of return, you'd have $4 million in this account. Your total contribution would be the same. They'd be $735,000, and you'd have $3.2 million is the amount of money that your money would have made. That's a lot of money to not have to pay taxes on. And so because of this, especially if you have a long-term time horizon, the growth of your money is really important. And if you have $4 million in a Roth 401k, and 3.2 million of it will never have to, 3.3 million, actually, $3.295 million will not ever have to be taxed ever. That, my friend, is a huge advantage, and it's a huge advantage for a lot of folks out there. These are obviously just examples. We don't know what the market is going to do over the course of the next 25 to 30 years. And if anybody tells you they know what the market is going to do over the course of

• 18:01Andrew Giancola?

  the next 25 to 30 years, don't listen to that person anymore. You got to understand that there are risks involved. But always, when we look at this, we need to make sure that we are running these scenarios based on historical math. And historically, we know the S&P 500 has returned to us on a very conservative note, if you're just down for inflation, at a 7% rate of return. But when you look at this in terms of what it's actually returned over the course of the last decade, for example, we're closer to 14%. It is absolutely wild, the run that we have been on over the course of the last couple of years. And so when you think about this, I would look into thinking about the, the edge that you have between the two. And the tax rates that you would pay in the future on the traditional 401k will depend on a couple of different things, but we don't know what tax bracket you're going to be in.

• 18:45Andrew Giancola?

  So for me specifically, even now, when I make a lot more money than I used to, I still am a big proponent of the Roth, because you get to defer taxes to the future. For me, it gives me surety. So you have to kind of decide when you're thinking between the two. Of would you rather take the risk and get the tax deduction now? But also know that in the future, you're going to have to pay taxes on those dollars, and you're going to have required minimum distributions, whereas the Roth you don't. And/or with the Roth, knowing I'm going to pay the amount of taxes that I'm paying now, and then I'm going to get that tax-free growth. And it's weighing those two things out. Now, as your income really increases, if you have a conversation with your CPA or your accountant, and they say to you, "Listen, Kathleen, you know, I think that, you know, you may be better off in a traditional 401(k) than a Roth,"

• 19:30Andrew Giancola?

  and they run the numbers for you, because that's what I would recommend, is having a CPA run the numbers for you. Then you can really have a concrete example of why that is. But if you're trying to decide between the two, I would definitely run the numbers in terms of what that compounded growth could be. In addition to how much you'd be saving in taxes, and that's how I would compare it. Because that's a bigger deal to me, long-term, especially as a long-term investor, than just how much I'm going to save in that one specific given year. Because when you save money on taxes in that one specific given year, then you've got to do something with those dollars. You have to actually take advantage of the opportunity cost. Otherwise, you're just saving the $7,000, or whatever that would be in the given year for your tax situation. And so if you are only saving $5,000, $6,000, $7,000 in that given year,

• 20:13Andrew Giancola?

  but you don't do anything with the money, you just spend the money, well, then the opportunity cost has been lost. And so we want to make sure that we are just thinking through all of these different scenarios, so we know what to do with the money. Because many people out there get this savings. They get the tax deduction on their traditional 401(k), for example, but then they get a return, or they get money back, or whatever else happens here, and then they don't do anything with that money. They don't put it anywhere that makes sense. And so in reality, they lost the opportunity cost of those dollars. And so we just want to make sure that we are thinking through that, and going through that in a way that makes sense for us. Now, you can also split this up. If you're like, "Hey, maybe I want a little bit of both," you can split it up, too. And that's something that you could also consider. So I'm a big proponent of the Roth. I contribute to a solo Roth 401(k). That's what I like to do.

• 20:57Andrew Giancola?

  But I also do additional contributions. Because it's a solo, I can do additional contributions that give me that tax deduction. So it just depends on exactly what your situation is, and how you want to think about this. But really good question, and I'm so glad you're evaluating it in this way. Let me know if you have any additional questions, and I'm always here to help.

• 21:17Andrew Giancola?

  All right, the next question is from Will. Will says, "Hi, I've been enjoying your podcast and have a couple of questions. I have a new Roth IRA, and my brokerage requires a $3,000 minimum per fund. So I'm limited to two funds my first year. Would you recommend VTSAX and VBT-LX, or go with two stock indexes like VTSAX and VTI-Ax? Also, given the S&P 500's heavy skew towards big tech, do you still recommend it for long-term investing, given how much the market has changed?" First, I want to say, awesome job. You're getting your dollars invested. I think that's really powerful, and the way that you're thinking about this is really, really important. Now, one thing to note is that these funds that you're listing here,

• 22:00Andrew Giancola?

  although they have $3,000 minimums, you can also look at the ETF versions. So if you wanted to have a more diversified portfolio, the ETF version is going to be something where if you're looking at a VTSAX, for example, the ETF version is VTI. So then you don't have those limits, and you don't have to worry about those limits at all. So you can look at the ETFs. And in fact, I like ETFs even more personally, because they're more flexible, and they're easier to get in and out of. And so when you see those, you can look at those, the ETF versions, and go that route. So VBT-LX, the ETF equivalent would be BND. So that's the bond fund for Vanguard. And so they have the ETF version, so you don't have to worry about those minimums or those limits. And that gets you started on the right foot, where you can have as many funds as you want to in that regard. So hopefully, that's helpful upfront.

• 22:44Andrew Giancola?

  Now, let's talk about your question here, because we have VTSAX. Portfolio one is VTSAX and VBT-LX, okay? So when we look at VTSAX, for those who don't know that, that is Vanguard's Total Stock Market Index Fund. So this is a fund that holds every single stock within the stock market. But it's heavily weighted with some of the top companies in the S&P 500. So I can pull this up right now. And when we look at VTSAX over the course of the last, you know, 10 years, 20 years, and 30 years, you can see a bunch of different things when we come to analyze this. Now, when I analyze an index fund and ETF, there's a couple of things that I want to look at. One is the expense ratio. So VTSAX has a 0.04% expense ratio, and there it is. The investment minimum is $3,000.

• 23:28Andrew Giancola?

  So again, you can do VTI, literally the same thing. It's the ETF version of this, and just do your research on that. But that is the ETF version of what you're looking at here. So really low fees. VTSAX, I own personally. VTI, I own personally as well. Really low fees, really great fund. If you ever read The Simple Path to Wealth, you know VTSAX is a core holding for someone like J.L. Collins, who's been on the show, and something that we can look at. So since inception, VTSAX has returned 9.11% to investors. Over the course of the last 10 years, it's returned 15%, which is just astronomical in terms of like what it's been doing over the course of the last decade or so. We've had just amazing, amazing years. Just so everybody who's been listening to this show the entire time,

• 24:12Andrew Giancola?

  that you know I've been talking about this fund for a long time. So this is kind of how I analyze funds, is I want to make sure I look at the fees. I want to make sure I understand what the returns have been over the long term, and I want to understand turnover ratios, things like that. If you haven't heard our episodes of how I analyze index funds and ETFs, we will link that up down in the show notes, so that you can check that out. Because it is, I think, helpful for people who are trying to evaluate index funds and ETFs. So that's the index fund you're looking at for there. And what I also look at is the top 10 holdings. So the top 10 holdings for VTSAX are going to be heavily weighted in terms of what you're looking at. So you're looking at Nvidia, Apple, Microsoft, Amazon, Alphabet, which is Google, Broadcom, Micron Technology, Meta, and Tesla.

• 24:54Andrew Giancola?

  So you have some pretty large companies within VTSAX, which I think can be very, very helpful. And then the second one is having a bond fund. So the bond fund would just be holding bonds there. The second portfolio you're looking at is the same VTSAX, the Total Stock Market Index Fund, which is great. It's a great core holding. And then VTI-Ax, which is going to be the international fund. Now, again, Vanguard has an international fund that's an ETF that you can look at, so you don't have to have that $3,000 minimum. But it's an all-stock, globally diversified portfolio that is going to allow you to have, you know, that international exposure. Now, for those of you out there who are thinking about this, if you wanted to have all three of these funds, just so you know, Will, you can have all three of these in the ETF version. That's the route I would go. But if you're looking at this and thinking through the international portion of their portfolio,

• 25:38Andrew Giancola?

  then that is a great international fund to be looking into if you want international exposure. So you can't go wrong with either of these portfolios currently, especially where you currently stand. Let me give an example of this. International funds, you want to hold to hedge against the US economy. It just helps diversify your portfolio into other regions throughout the world, so that you are not just all reliant on the US economy. Me specifically, though, my argument has been that I believe many of the companies in the US also do international business. And so for the most part, the top 10 holdings in something like VTSAX also have international exposure. Now, people would argue with me about this all day long. And in reality, a three-fund portfolio, and if you look at the Bogleheads, for example,

• 26:23Andrew Giancola?

  a Boglehead three-fund portfolio would have something like a US-based index fund, a international-based index fund, and the bond fund. So they'd have a three-fund portfolio of all three of these of what you're currently looking at. And you can do that with the ETF version. If you want to be fully diversified in a true three-fund portfolio, just look deeper into the Bogleheads and kind of how they structure some of those portfolios. For me specifically, though, I still currently do mostly all-stock portfolios, unless I am going to be living off that portfolio, and I am now in preservation mode instead of accumulation mode, then I typically will have my portfolios as all-stocks. And the reason for that is I want growth. I want to see my portfolio grow over time. And then I don't hold much international funds either. So I usually will hold more US-based stuff.

• 27:07Andrew Giancola?

  But if you want international exposure, and I get why people want international exposure, then more power to you. Add that into your portfolio, so you have that diversification. But for me specifically, I am more so heavily weighted in the US economy, because I think the US companies, when you look at the top 10 holdings of a US portfolio versus the top 10 holdings of an international portfolio, I want to own that US portfolio for sure. So really, really good thoughts here. You can't go wrong with any of these portfolios. But again, you can also mix them in as a three-fund portfolio with the ETF version. So hopefully, that helps answer your question. If you have any other questions about that diversification, though, just let me know. But I would definitely look deeper into the ETF version, because I think that's going to solve and answer your question. Because I think you're juggling two different portfolios, when in reality, you probably want all three,

• 27:51Andrew Giancola?

  and you can't have all three with the ETF version. So if that's the case, look into the ETF versions. Do your research on those, and then let me know if you have any questions.

• 27:59Andrew Giancola?

  Awesome. Next question is from Dominic. So Dominic said, I just turned 20 and have about $11,000 in my bank and about $3,000 in fidelity index funds. I owe about $5,500 on my truck, and I'm not sure what to do with my money. So Dominic, this is a great question. I'm going to walk you through how I would think about this. First, awesome job being 20 and having $11,000 in the bank. You can do some pretty cool stuff with that and have an additional $3,000 into your fidelity index funds. Congratulations to you. Most people have $0 when they get to be that age and have zero investments. So you've got your head start going here, and you owe about $5,500 on your truck. So here's how I would think about this. One is if you are working, then, and you have an employer match, you can look into getting that employer match. But if you're not working, if you're in college, or if you're working the trades,

• 28:44Andrew Giancola?

  or whatever else you're doing, no worries whatsoever there. But then, what I would do is make sure you have enough cash on hand for one month of emergency fund, okay? Once you have the one month in place, then what I would do is look at this debt, this $5,500. If your truck payment is above a 6% to 7% interest rate, I would be considering paying that off with some of my cash. So this would be considered high interest debt. So if you have any other debt outside of this, pay it off, get debt-free, and luckily, you have the cash on hand, and you're doing okay, to where you could kind of get rid of this debt, and then move on to the next thing, if it's high interest. If it's low interest debt, if you, you know, owe 2% or 3% on that truck, then you are okay keeping those dollars,

• 29:27Andrew Giancola?

  or investing those dollars instead, or moving on to some of the next steps that we always talk about. So if that truck payment is lower than the 6% or 7% interest rate, then what you can do is move on to the next step, which is getting to a three-month emergency fund. And so, once you have three months in place, then you have this safety net set up, where you have basically a fortified starter emergency fund, where you can then start investing as well. So breaking off, you know, half towards investments, half towards your emergency fund, until you get to six total months. Now, we talk about this in our episode called the 1-3-6 method to your emergency fund. If you haven't heard that episode yet, let me know. We also, if you go to mastermoney.co/resources, we have a guide on the emergency fund and the 1-3-6 method, if you have not heard that either. So I would highly recommend

• 30:09Andrew Giancola?

  checking both of those out, because that's going to get you started. Then, once you're there, then you can continue to invest, and continue to grow your dollars over time. You're young, getting as much money into investments as you possibly can early, is going to allow you to do a couple of different things. One is you could start to target what is called coast fire. Now, coast fire is where you get to a certain point in time, where you have enough money invested, where if you stopped investing that day, those investments would grow to enough to be able to allow you to retire at a traditional retirement age. Now, many people try to hit this first, and they try to hit this early and often, so they do not have to worry about savings in the future, if they don't want to. If they have an off month, if they feel as though they just want to live life, and they don't want to worry about savings anymore, you can get to your coast fire number and not

• 30:52Andrew Giancola?

  have to worry about it anymore. So coast fire is a wonderful, wonderful goal to have to start off. And then from there, you can really start to grow your money and your wealth. So that's the steps I would take. One-month emergency fund. Two, if this is high-interest debt, then pay it off, the $5,500. Three, if it's not high-interest debt, then you can continue to make the minimum payments, and start to save for your three-month emergency fund. Once you have that three-month in place, splitting it off half and half into investments and emergency fund, until you get to six months, is perfect. And then, once you get there, then you are A-OK. So that's the way I would think about this, and the way I would operate my money when it comes to building this up, especially since you're young, you can do some really, really cool stuff. But if you have any other questions on that, please, let me know.

• 31:32Andrew Giancola?

  Next question is from Nico. Nico says, hey, Andrew, I'm a longtime listener of the podcast, and I had a quick question regarding my Roth IRA holdings. My portfolio is split between VOO, which is 70%, which is Vanguard's S&P 500 ETF, for those of you who are listening, and SCHD. So SCHD, for those of you who are listening, is a dividend ETF by Schwab. I recently met with my company's financial advisor, and he mentioned I shouldn't be holding relatively high dividend-yielding ETFs in a Roth IRA. What are your thoughts on holding dividend growth funds like SCHD in a Roth IRA? Well, it's an interesting comment for him to make, because let's talk about the funds first, okay? A S&P 500 index fund is a growth fund, that's going to help you long-term, in terms of like, if you want

• 32:16Andrew Giancola?

  to build wealth, it's what I hold a majority of my portfolios in. And a dividend fund pays you income on a quarterly basis. And so, inside a Roth IRA, money grows tax-free. And so, when an ETF, that is a dividend ETF, is producing an income, that means you're not going to be taxed on those dividends. And so, many people who have dividend portfolios, they hold those dividend portfolios inside a Roth IRA, because they're not taxed on the income that that portfolio is producing. And so, when that is being said, I'm curious as to why that would be stated. There may be some personal situation on why that would be stated, but I would definitely double-check that, because for me specifically, I'd rather hold a dividend stock inside a Roth than I would inside of a taxable, because if you

• 33:01Andrew Giancola?

  have it in a taxable, you're going to have to pay more taxes, because it's producing those dividends. So that's one thing to definitely look into, and that would be kind of a red flag for me, if somebody was saying that, because I want to understand why that is, and what the reasons behind it are. The reason could be, because typically, like, something like SCHD produces an income, but it doesn't grow as fast. It doesn't grow as fast as like a VOO or a VTI would. And so, long-term, the total return on your money would be a little less than would be like a VOO or a VTI. So potentially, that could be the reason why. But for me specifically, I like having dividend stuff inside of the Roth IRA, and the reason for that is because it produces an income, that income does not get taxed. So if I was going to be holding dividend ETFs personally, that's where I would hold

• 33:43Andrew Giancola?

  mine, is in my dividend, would be in my Roth IRA. And so, that's how I would think about it. I would double-check to see why that is, and then have them, if they say, okay, well, you want the growth fund in there, then have them run the numbers and show you why, based on your specific situation, and what you're contributing. Otherwise, if they can't run those numbers, then figuring out the angle, the one that you want to take, in terms of like, the tax, you know, the tax is what is important to me. And so, that's the angle that I would look at, especially as your portfolio grows. Imagine you have a million dollars in a Roth IRA, and SCHD is producing 3.4%, or whatever it is, so that's $34,000 per year, you don't have to pay taxes on, it's just being produced by your portfolio. And so, that's where I like the Roth for this, for me specifically, is because of the income that's being produced. There's a lot of cool stuff that you could do with that.

• 34:28Andrew Giancola?

  I would definitely have them run those numbers, but for me specifically, I would keep any dividend stuff inside of a Roth, and that's the way I would look at it.

• 34:36Andrew Giancola?

  All right. So there is a new thing that is out right now, that I want people to understand when it comes to protecting your data and your information, when you're using AI tools. So this actually came up with Claude as of recently. There have been exposed search links, inside of people's actual Claude chats, have been put onto search engines, things like Google, for example. And Google has been indexing some of these Claude chats, and I'm going to show you exactly how this happens. So when you use Claude's share feature, meaning if you have a chat inside of Claude, and you want to share that chat with someone else, it actually creates a web link that can be indexed by search engines. And so, Google can find and index those links, meaning that if you send a link, and maybe you have a private chat that you are chatting through when it comes to Claude, and you want to

• 35:19Andrew Giancola?

  send it to a coworker, or you want to send it to your spouse, or you want to send it to a family member, and show it what it is saying, anyone searching the web can actually potentially stumble upon this when you share it. And so, this is going to be something that could even be sensitive data, it could be passwords, and because you pasted this into the prompt, it could be a really, really problematic thing. And so, by default, Anthropic can use your chats to train and improve its future AI models. And if you were on the free, or the pro, or even the Teams plan, when they remove personal identifiers, your conversations are still reviewed and stored, unless you manually turn this setting off. So I want you to make sure you're manually turning this setting off, is the first thing. Newer versions of Claude, and a lot of these other, even, there's a bunch of companies

• 36:03Andrew Giancola?

  out there that you could do this with, can interact directly with your computer, and read local files, use browser extensions, it can go into your Google Drive, it can run terminal commands, there's all these different things that can happen there. And so, you got to make sure you are extremely cautious, when it comes to some of this stuff, because I was seeing this time and time again, where if this gets indexed, people have been showing this on Reddit, and on X, and different places, where stuff that is very sensitive is getting indexed, because you're sharing it with someone else, it creates this link, this link is then indexed by Google, which is a huge problem for you. I don't want this to happen to you. So if you use Claude, even if it's just for casual tasks, the risks are low, but if you use it to paste company data, or medical info, or passwords into a chat, this data could be stored for training, and accidentally exposed online through shared

• 36:46Andrew Giancola?

  links. So if you want to turn this off, here's the exact steps, okay? Open up Claude AI, and sign into your account, then check your profile, go to Settings, and then click on the Privacy tab. On the left side of the panel, there's a toggle called Help Improve Claude, and you can actually turn that off, which is going to help you tremendously long-term on the privacy side. And you can also do this on mobile as well, but you want to turn these setting Help Improve Claude off. Also, don't share links to your chats. Don't do it with ChatGPT. Don't do it with Claude. Don't do it with perplexity. Worst-case scenario, pull it into a Google Doc if you want someone to see it and make a private Google Doc and send it over that way, or make a private Microsoft Word document and you can send it to them in that way. But don't do it with the chats, because if Google

• 37:29Andrew Giancola?

  starts indexing these, and they've already shown it, people's medical information have been exposed, people's passwords have been exposed. And if you know how to search on these Google things, then that's going to be really, really problematic. So make sure if you are sharing links on any of your chats, you try to turn that off or backtrack it so you do not have your privacy exposed. It's a huge, huge deal when it comes to this. Speaking of privacy, if you don't have a financial protection plan right now, and you don't have one in place, make sure that you listen to our episodes where we talk about how to develop a financial protection plan. We have multiple episodes on this. It is really important in 2026 and beyond to make sure you have that protection plan in place, because if you do not, you could be exposed to all different sorts of things like this. In fact, today, I just got my report from Delete Me, where Delete Me was

• 38:13Andrew Giancola?

  saying, hey, we removed your personal information from all these different websites. Now, if you don't know what Delete Me is, Delete Me is a company that will go to data brokers. Now, data brokers can put your information on the internet. If you Google your name, you Google your address, and you put it in quotations, or even your phone number, you'll see your information pop up on all these different websites. Well, Delete Me goes and removes that information, because it's dangerous to keep it on those websites, because if someone gets a piece of your information, and they're trying to find the rest of the puzzle, so they can open a bank account in your name, or they can open a student loan in your name, which happened to me, or they can open something else in your name, then you could have your identity stolen. So you want to make sure that you are removing your personal information from the internet, especially in the age of AI, where it is

• 38:56Andrew Giancola?

  way easier to find this stuff. It is way easier to find your information. You've got to fight back. And so Delete Me helps you fight back. So if you go to joindelete.me/pfp20, you can get 20% off of Delete Me. Again, this is a service I have been using for years. Literally just got my report today, because they continue to keep removing your personal information. But you can get 20% off if you go to joindelete.me/pfp20. If you have any questions on Delete Me, though, feel free to reach out to me, because they are a service, again, I've been using them for years. They've been a partner of this podcast for years now, because I truly, truly believe in them, and they save me so many hours. And in fact, when they send that report, they show me how many hours I've saved throughout the year, and it said 27 hours have already been saved throughout the year by just utilizing

• 39:40Andrew Giancola?

  Delete Me. So if you are serious about protecting your finances online, and you're serious about protecting your privacy online, then this is definitely something you want to do.

• 39:51Andrew Giancola?

  All right. So the next question is from Brittany. So Brittany says, I've really been joining your podcast. I'm 48 and a single mom to a 10-year-old. How do you best take regular income from your taxable accounts during early retirement while minimizing long-term capital gains tax? My long-term gains in Vanguard are high, because a lot of the money went in 10 to 15 years ago when I was a high earner. I have plenty in IRAs, too, but obviously can't touch those at 48. So a couple of things I want to talk about here, because I think there are some cool things that you could do here, and I truly appreciate the kind words, and congrats to you on being able to work on retiring early here. So long-term capital gains are going to have their own schedule, and the lowest bracket is 0%. So for 2026, if you can stay in that 0% bracket, that is going to be a

• 40:34Andrew Giancola?

  place that you could stay. So if you are early retired, for example, and your income sits below $66,200 for head of household, which a single parent with a dependent typically files as, so you could be filing as head of household, or below $49,450 as someone who is single, and the standard deduction is on top of that, which for head of household is $24,150 in 2026, means that you could have a meaningful amount that is the 0% tax bracket. So you could be paying, if you are filing head of household, we're looking at a little over $90,000 that is going to be in the 0% long-term capital gains bracket. Okay? Number two is only the gain portion of a sale is taxed, not the whole withdrawal. So I want you to understand something, is when you sell shares to generate income,

• 41:19Andrew Giancola?

  this does not tax the entire amount withdrawn, because the money that you put in does not get taxed. It's only the amount that is gained. So if you put $100 in, and then over the course of 15 years, that $100 grew to $400, well, then 300 of that is going to be taxed. The 100 will not be taxed. And so that means that there will be less overall that could be taxed than what a lot of people think there will be. They think the total amount is. It's not the total amount. It's got a basis involved there, and that's the amount that the money has grown. Now, we actually did an episode with Katie Gaddy from Money with Katie. She talks about kind of this same situation, where we kind of went through this on a deep dive. We could talk through how to pay almost nothing when you retire early with a taxable brokerage account. And we went through even doing Roth conversions, and some cool stuff that you could do there as well. So that would be an episode I would

• 42:03Andrew Giancola?

  definitely recommend listening to as we start to talk through this. But I think you are in a great situation, where if you keep your income to a certain level, or your income isn't above some of these thresholds, you could pay a minimum amount. Then, if it is above those thresholds, the rest of those dollars will be paid at 15%, unless you're making well over a half a million dollars a year, then it would be at 20%. So it's still lower than your overall income tax level. And so this is one of those things that you should be paying significantly less than during your working years. Now, if you're going to start withdrawing on some of this stuff, I would even have a conversation, even if it's a one-time consultation with the CPA, just to look at your specific tax implications when it comes to this stuff, if you're in the 0, 15, or 20%. But the highest it can go for long-term capital gains is that 20% rate. It can't go above that. And so if you're worried about it being taxed at like a 37% rate, or whatever else, it's

• 42:48Andrew Giancola?

  only 0, 15, or 20, depending on where you currently are right now. So that's what I would definitely look at. And you can also do conversions, and there are other things that you can do as well. But I would definitely have a conversation with the CPA, even if it's just a one-time consultation, just to look at this, make sure they have the tax strategy involved, and they know what they're talking about. But this is just based on your specific situation and your income. It's going to help you to understand exactly how this would work. I think you could be in a better spot than even you realize. So really great job, Brittany. I appreciate the question. If you have any other questions on that, please let me know.

• 43:19Andrew Giancola?

  My relationship with money has changed a lot over the years. Early on, I thought building wealth was about making more money. Now, I know it's really about having clarity. When you know exactly where your money is going, and whether you're on track, you make better decisions. That's one of the reasons I love Monarch. It's the personal finance app that tracks everything, from your accounts and investments, to your savings, goals, and spending. So you can see your entire financial picture in one place. One habit that's made a huge difference for me is my five-minute drill every single morning. I open Monarch, check my spending, investments, cash flow, and net worth, and I'm done in just a few minutes. It gives me confidence that nothing is slipping through the cracks.

• 44:00Andrew Giancola?

  I also love the AI weekly recap, because it'll flag spending changes, upcoming expenses, or shifts in my net worth before they become a problem. Instead of reacting after the fact, I can make adjustments early. It really feels like having a financial advisor in your pocket. Write your own money story with Monarch. Use code PFP at monarch.com to get your first year of Monarch Core half off at just $50. That's 50% off your first year at monarch.com with code PFP. It's kind of amazing how much can change in just a single year. Every summer, the kids are a little bigger, a little more independent, and life looks a little different than it

• 44:41Andrew Giancola?

  did the year before. And it reminds me that while we can't predict the future, we can prepare for it. That's one of the reasons I like PolicyGenius. See, PolicyGenius isn't an insurance company. They're an online marketplace that lets you compare life insurance quotes from some of America's top insurers, side by side, for free. And their licensed team helps you compare coverage, prices, and terms, answers your questions, and even handles the paperwork, so you can get the right policy without the hassle. For me, having life insurance isn't about expecting something to happen. It's about knowing my family is protected, so I can actually enjoy these moments together, instead of worrying about what comes next. And with PolicyGenius, you can find 20-year life insurance policies, starting at just

• 45:26Andrew Giancola?

  $276 a year for $1 million of coverage. Head to policygenius.com to compare life insurance quotes from top companies and see how much you can save. That's policygenius.com. If you've heard any recent episode of Health Corner, you know that I have spent the last few years trying to optimize my sleep. I've tried sleep trackers, cooling my room, changing my nighttime routine, all the different things. But nothing really matters as much as having the right mattress. And that's one of the reasons I love Leesa. A great mattress is one of those things that you use every single night, and you spend a third of your life sleeping. And it can make a huge difference on how you feel the next day. Leesa has mattresses

• 46:10Andrew Giancola?

  designed for different sleep positions and comfort preferences. And their sleep quiz can help you get matched in less than two minutes. Plus, they're designed, and they're assembled in the USA, and they come with free shipping, easy returns, and a 120-night free sleep trial. So go to leesa.com for up to 30% off mattress plus, and get an extra $50 off with promo code PFP. Exclusive for my listeners. That's L-E-E-S-A.com, promo code PFP, for 30% off mattresses plus, an extra $50 off. Let them know we sent you in the survey after checkout. Leesa.com, promo code PFP.

• 46:52Andrew Giancola?

  One thing I've learned from running multiple businesses is there's usually a gap between how you think work is getting done, and how it's actually getting done. And we've had times where we thought we knew the bottleneck, only to realize later, the real issue was somewhere completely different. That's exactly what today's sponsor, Scribe, helps solve. Scribe is a workflow AI platform trusted by 94% of the Fortune 500. And Scribe Optimize turns real workflow data into decisions your AI strategy actually needs, automatically capturing how work happens across approved apps, surfacing inefficiency and opportunities, with no interviews and no manual discovery, and no extra work from your team, which is

• 47:34Andrew Giancola?

  the key. And the live dashboard shows where work is happening, how much time it's taking, and where the biggest opportunities are right now. It automatically discovers workflows across multiple tools, then highlights your biggest inefficiencies, and gives AI-powered recommendations with estimated time-saving. You know I love saving time. It's also built with privacy in mind. It only runs across approved business applications, user-level data is anonymous by default, and sensitive information is automatically redacted and never leaves your firewall. To see optimization action, head describe.how/pfp and mention PFP for a 30-day risk-free trial. That's S-C-R-I-B-E.h-o-w/p-f-p.

• 48:17Andrew Giancola?

  All right. The next question is from Jaclyn. So Jaclyn says, I'm investing, but still trying to stop the bleeding with some spending. I didn't really start investing until recently and now we're in our 40s. I'm wondering if I'm doing enough damage control. We're investing one income and living off the other. More than doubled our income in the last year, sold our home in Apollo Beach, and downsized into a bungalow in Tampa. I'm worried it's still not enough. Are we doing enough to catch up? Well, first of all, Jaclyn, the stuff that you have done thus far, I really, really commend you on that. I think that is absolutely amazing that you were willing to take some of these drastic measures in order to start working towards building wealth. And the cool thing is you're in your 40s. And in your 40s means that you still have a lot of time for this money to compound. A lot of people who are in their 40s feel as though it's just too late or they're way behind or whatever else.

• 49:02Andrew Giancola?

  And sure, you could have started earlier and a lot of people beat themselves up about that, but I don't want you to beat yourself up about this because this is a situation where you still have time and you can catch up. And because you're saving one whole income, that is absolutely incredible. I mean, being able to save one income because you took some drastic measures, sold your house, moved to a bungalow, that is absolutely killer. I mean, you are really motivated and you want to make sure that you make this happen. So, starting in your 40s, the first thing I want to say, it still roughly leaves about two decades before you actually want to retire. My parents didn't retire until they're 65. I know a lot of people are working longer now and you may want to retire even earlier than that, but really, you know, accessing retirement accounts and some of those other things, you start to access those at the age of 60, 59 and a half.

• 49:44Andrew Giancola?

  And so because this, we want to make sure that we're thinking through, we still got a good time horizon here. We still got time left. 40s is still young. But secondly is, once you get to age 50, you have catch-up contributions available to you. So, when you get above age 50, you can start to contribute more to some of these accounts. So, a 401k catch-up contribution, for example, is $8,000. If you're over the age of 50, the IRA is another $1,100. And you can look at some of the other ones out there as well. There's super catch-up contributions after the age of 60 through 63, which is $11,250 that goes in place of the $8,000. So, there's a lot of catch-ups that you can do in terms of the contributions that you're putting into some of these accounts. And if you're saving one income, you should be crushing it on that front.

• 50:27Andrew Giancola?

  And because you downsized, because you downsized into a cheaper home, you lowered your overall target, you lowered the overall amount that you're going to need on an every month basis. Because if you were in a more expensive home, that means you would have to pay more of a mortgage and have this higher cost of living. But because you downsized, you downsized into a cheaper living situation, that allows you also to just not need as much. And so because of that, that's going to help you tremendously moving forward. And enough is going to be defined by your expenses. It's not a universal number, it's going to depend on each and every single person. So, here's how to do it quickly with the back of the napkin math. When you're looking at this, you say to yourself, okay, well, we spend $100,000 per year. Well, if you spend $100,000 per year, you can draw on 4% on a minimum by the time you hit retirement every single year.

• 51:10Andrew Giancola?

  Meaning that $2.5 million will get you to the point where you can spend $100,000 per year off your portfolio. But you're going to have things potentially like social security, for example. And so if you have social security and you make, let's say you have, you know, $25,000 per year coming in from social security. Well, then all of the sudden, now you only need $75,000 from your portfolio every single year. And so you can see how this math gets better because now that's a little less than $2 million that you would need invested in order to be able to retire. And so you have some opportunity here, you still have time, and you have the ability to really make this happen. And if you run a compound interest calculator, you may be saying to yourself, okay, let's say you're saving one income and you are saving that one income and let's say it's $40,000 per year.

• 51:54Andrew Giancola?

  I don't know what it is. If you were live on the call, I'd ask you. And $40,000 over the course of 20 years at a 10% rate of return, let's see where that lands. That's $2.29 million. And so, even if you were to continue to invest these dollars over the course of the next 20 years at a 10% rate of return, it's $2.2 million. Let's get conservative when we're planning for retirement. I like to get conservative. It's $1.639 million. And so if you have social security, if you have any other money saved up and you have, you know, you've already started, this is starting from zero, by the way. And if you have any other money saved up or invested already, then you should be getting a head start where you have enough time to make this happen. If you're saving more than $40,000, let's just say you were saving $60,000 every single year, that's $2.5 million at a 7% rate of return.

• 52:39Andrew Giancola?

  And at a 10% rate of return, that is going to be $3.4 million. The things that you're doing, if you're saving a good chunk of cash every year, you're doing some great stuff and you have some time for this money to compound. You have this time for this money to get to a point in time where it's going to serve you and that's what you want. Take a big, deep breath. We're going to get you there. So, take a deep breath, you're going to get there, I know it. I can see based on the tenacity that you have, that you have the grit and you have the wherewithal to make it happen. And that's what is so powerful about your situation is that you're willing to do the things that it takes to make this happen. So, congrats to you. Congrats to everything that you all are doing. And please, let me know if you have any other questions on that.

• 53:22Andrew Giancola?

  I'm always here to help. The next one is from Gabriella. So, Gabriella says, hello Andrew, my husband and I are at the beginning of our money journey. We made bad decisions and got into a lot of debt. We're now trying to pay off all of our credit cards and cars, then buy our first house. Because our employer matches, we have not put anything else into retirement so far. I'm trying to get a clear path to make sure we are really maximizing all potentials when it comes to money while also being able to buy a house for our two kids. Any help would be greatly appreciated. So, this is a great question, Gabriella, and I'm so glad that you're working towards these goals. I think that's really fantastic. Here's what I would say, a couple of things. One is first, looking at paying off those credit cards is going to be very important.

• 54:06Andrew Giancola?

  Credit cards are number one by far. So, if you're making extra payments towards the car and you're foregoing some of those extra payments towards the credit cards, I would focus solely on the credit cards first because the likelihood that your credit cards have the highest interest of all the debts would be really, really important. So, looking at those, they most likely have anywhere from a 15 to 35% interest rate. I'm not sure what the interest rate is on them, but that's probably where they land. And if that's the case, we want to make sure that we are identifying those and paying those off as fast as we possibly can. So, that's the pants on my, that's the emergency number one. Getting the employer match is great. And then also making sure we get to that one month emergency fund is also great. So, the order is employer match, one month emergency fund, getting rid of those, those credit cards is going to be important. Those are the first three steps.

• 54:50Andrew Giancola?

  Once we're there, then we have to, a couple of choices to make. We pay off the credit cards and we look at the car loans and say, okay, what is the interest rate on these car loans? If it is above 6% to 7% and it's like a 10, 11, 12% interest rate, which I've seen some people have, well, then we want to get rid of those car loans too. But if it's below that 6% to 7% interest rate, then we can look at making minimum payments in the car and continuing to start to think about building wealth. Meaning that, we want to make sure that we are putting dollars towards our retirement as well. And when I evaluate the, the difference between thinking about a home purchase and thinking about retirement, we want to make sure that you are thinking through those two things. Because a home purchase makes sense in some scenarios, but not all scenarios. And you want to run what we call total cost of ownership.

• 55:34Andrew Giancola?

  And so this is going to help you decide, should I buy in my area? Or should I rent in my area? And which one makes the most financial sense? So, when you're thinking about this, what I would say, and we want you to own homes here, we are pro owning a home here. I have owned a home for a very long time. But the math says differently in a lot of different regions. And so when we start to think about this, we have a free calculator if you go to mastermoney.co/resources, but you want to evaluate, okay, what does it cost to buy a home? What is the down payment? What are the closing costs? In addition, what are the maintenance costs of owning this home? What are the insurance costs? What are the taxes? All those different things need to be factored before deciding that you actually want to buy a home. Now, I know a lot of people want to plant roots and that be a reason to buy a home. But we just want to run the buy versus rent calculations because we also have to save

• 56:19Andrew Giancola?

  for retirement. And so when we're thinking about retirement and we want to save for retirement, we also want to evaluate, that is going to be, like for me specifically, that would be more important on my list, the saving for retirement than buying a house. Because homes over the long term, if you look at the, the data and the math, you can look at the Schiller index is what it's called. And the Schiller index will show you that homes have only appreciated about 3% over the course of the last few decades. Whereas, when you factor in total cost of ownership, whereas something like your investments, for example, are going to go anywhere from 7% to 10%. And like I just said in some of the earlier questions, up to 15% for like the S and P 500 over the last decade. And so 3% versus 15% is a very big difference when we look at the historic data. Now, future results are not going to be same as the historic results,

• 57:02Andrew Giancola?

  but we just want to make sure that we are looking at that, we evaluate our decision. And so I would recommend, check out our free total cost of ownership calculator, run the numbers on that to make that decision. Because if, if you decide, okay, well, maybe we want to get our retirements going first and get our dollars going towards retirement first, which is what I would tell you to do if you were talking to me, then I would make sure that I'm investing my dollars in the right places first, then I can go and buy my house. But I want to make sure I'm having my retirement plan in place. Otherwise, if you put all of your dollars into your home, that's a dangerous place to be. People who have too much of their net worth tied up into their home, but not enough into their future retirement accounts, are ones who are never going to be able to retire because you can't live off your home. You can't live off the money inside of your home, but you can live off your retirement accounts.

• 57:45Andrew Giancola?

  And so you just want to make sure that you're evaluating those decisions and looking at both sides of the coin there. So, if you have any other questions on that, please let me know. But that's the way I would think about it. So, at first, get through those debts, then I'd make the choice of, okay, once these are paid off, now let's run total cost of ownership and make sure this is actually something we want to do. Because saving for a house is also going to lose out on the opportunity cost of that down payment money being invested. And so that's the other side of that coin too. And you want to make sure that you are thinking through all of this. So, really great question and thank you so much for sending it in. If you have any other questions on this, please let me know.

• 58:18Andrew Giancola?

  All right. So last thing is we're going to do a quick health corner. So on health corner, a lot of you have loved this. I talk about the fitness and the health things that I am currently doing. And we have done a bunch of things in the past, even talking about sleep. We've talked about exercise, all those different things. And for this one, I've been testing out what we call the, and if you're watching on camera, you can see me holding it up right here, the Fitbit Air. So I have normally, I run a Garmin 970, a 4Runner 970 is my main watch that I normally wear. But when I wear a automatic watch like this, this is just a Seiko watch. And when I wear my automatic watch like this one, I like to still be able to track my steps and my health data and all that kind of stuff. And so the Fitbit Air just recently came out. It's 99 bucks. And when it came out, I was like, oh, this is awesome, because it's trying to compete with Whoop, and there's no subscription cost.

• 59:03Andrew Giancola?

  And so far, I've been using it, and I think it's great. I think for $99, it's one of those things that can, it can track your steps, it can track your sleep, it can track your fitness goals. And there's a paid version too, where they have like a coach and stuff like that. I don't think you need all that. I think if you are someone out there who is healthy, and you kind of understand what your metrics mean and what you're doing with them, then this is a great option for anybody looking for a low cost, subscription fee thing, that can help them just track some of their health metrics. If you don't have an Apple Watch, or if you don't have any of that other stuff, or an Oura ring, or whatever else, then this is a great option. And I've been using it over the course of the last two or three months, when the Fitbit Air first came out, just seeing, you know, how I like it, and if I, if I actually want to wear it. And so far, I think it's been wonderful,

• 59:46Andrew Giancola?

  especially when I'm wearing, you know, an analog watch, or a watch that doesn't, you know, track my steps or anything. Now, what I would love is, and I know they're working, I've seen people come out with these, but I would love like a little device that you could just put on a watch that is automatic like this, that would help, you know, be able to track your stuff while you wear a watch like this, so you don't have to have two devices. That's my hope, one day. But this thing has been great. If you are looking for something like that, I think it's, it's just a great, again, not sponsored, but just something I think is wonderful. And another thing I've been doing as of late, is I have been adding in what it called, what are called the fitness dailies. And so there's a guy, I think on TikTok, I'll try to find his thing and link it up down below. But he does these thing called the fitness dailies, where if there's like, a body part that he's working on, or if there's a piece of his fitness that he wants to work on, he'll do a daily

• 1:00:30Andrew Giancola?

  thing for about 30 days. And so, I've been doing this a lot. So I've been doing it with calisthenics, for example. So I've been adding in a lot more pushups throughout the day. So I'll do 2, 3, 400 pushups in a day, every single day, for a week or two, see how I feel. Sometimes my body gets a little tired after that. But I'll do that pretty frequently now, along with my lifting and my cardio that I do in the morning. But I'll do it just throughout the day. If I need a jolt, I'll drop down, do 30 pushups, whatever else, as long as time permits, and I'm able to do that. And it's been tremendous in terms of just feeling like I'm more energized throughout the day. And if I, my body feels tired, or if it feels wrecked, then I'll just pause, I'll stop, I won't do as many that day. But it has been really, really helpful. And the guy that was, that I saw doing this, does

• 1:01:14Andrew Giancola?

  it for all these different things. So like, if he's trying to, you know, improve his leg strength, he'll do it with legs, but just a lighter, you know, lighter amount, and just do a higher volume, that type of thing. So, I've been testing that out. I'll report back on how it's been going, but I've been doing it for about two or three weeks now, and really, really been enjoying it thus far. And so, it's worth testing out, or looking into, if that is something that you are interested as well. So, if you do anything like that, let me know down below, if you have any other health tips that you are working on, or if you want me to talk about any portion of my health that you feel as though you want to hear more about, please let me know, and we'll be happy to talk about it on this health corner. But thank you guys so much for listening to this episode. Again, if you want to submit your questions, please feel free to do so. Also, make sure you check

• 1:01:56Andrew Giancola?

  the live call link down below, and fill out the information, and we will see if we can schedule for the, the live calls. Really, really excited about that. And really appreciate each and every single one of you. Again, if you want to dive deeper with me, you can join Master Money Academy, the link will be down below, seven day free trial. We do weekly coaching calls, we have all of our courses in there, and a community of people who are all working to build wealth. So let me know, if you join that, would love to have you. We're doing a travel hacking masterclass this week, which is going to be fun. So, a lot of great stuff going on inside Master Money Academy. Thank you so much for being here, and we will see you on the next episode.

• 1:02:37Speaker 02

  Does anyone know where the bass is?

• 1:02:40Speaker 03

  Hey, Bose here. When your next track starts, listen for the decisions that the artist makes. The vocal pushed right up front, the bass that waits half a beat, that sample from a 70s underground gem. Every choice deliberate. With Bose, you'll hear it all. Your music deserves Bose.