Do You Think You'll ACTUALLY Be Able to Retire?

Most people decide whether retirement is possible for them without ever doing the math. Andrew runs the numbers on all three goals Americans say they want most, and the answers are better than the headlines suggest. 👉 Want personalized help from Andrew? Join Master Money Academy at https://www.skool.com/mastermoneyacademy/about 👉 Join Andrew’s FREE Investing for Beginners 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 👉 One-on-One Coaching Application Form: https://docs.google.com/forms/d/12UHo5Zmu1AyY_G4Gmbrcx9vThIZhxqFnaJ5dIihZL24/edit What You'll Learn in This Episode The confidence gap between what Americans want financially and what they believe they will get How to calculate your retirement number, and why to redo it every year What $500 a month becomes at 25 versus 35, and the million-dollar cost of waiting The checklist to clear before buying a house, including the one rule most people skip How to prioritize three goals competing for the same dollars The order of operations when a bonus or windfall lands The withdrawal sequence for retiring at 50 while staying under the ACA subsidy cliff How to find a flat-fee advisor to review your plan without handing over your assets A long-con dating app scam that ends in a fake investing platform 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 Hostinger → Build your website step by step at https://www.hostinger.com/ and use code PFP for 10% off Indeed → Get a $75 sponsored job credit at https://www.indeed.com/podcast Wayfair → Shop thousands of products for every style and budget at https://www.wayfair.com/ Leesa → Get up to 30% off mattresses plus an extra $50 off with promo code PFP at https://www.leesa.com/ Policygenius → Compare life insurance quotes for free at https://www.policygenius.com/ Monarch Money → The all-in-one financial tool + Get 50% Off at http://www.monarch.com/PFP 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 Favorite Travel Credit Cards https://milevalue.com/best-credit-cards/?aff=mastermoney Episode/s Mentioned The 1-3-6 Method For Building & Managing Your Emergency Fund https://youtu.be/rGdII_Z0hnw Buying a House VS. Investing In the S&P 500 (Which Is Better?) https://youtu.be/6iwf_4iQz0c Tool/s Mentioned Total Cost of Ownership Calculator https://mastermoney.co/total-cost-of-ownership-calculator/ Master Your Money Goals https://www.skool.com/mastermoneyacademy/classroom/f1e5f000?md=5db7fc1e56a1474fbbded14211cff084 The Stairway to Wealth https://mastermoney.co/the-stairway-to-wealth/ Watch Next 5 Ways to Go BROKE (By AGE!) https://youtu.be/1xm23NnneJM How to Evaluate a Stock Like Warren Buffett with Brian Feroldi https://youtu.be/posnNC99UFQ 12 Reasons You Need to Stop PLAYING SMALL with Money https://youtu.be/qFz3_-pLapg 19 Strategies to Pay Off Debt (FASTER!) https://youtu.be/WAnf4Z7PHjs How to Build a Portfolio If You Are Worried About An AI Bubble https://youtu.be/NhfJVhSTedA 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: Rank the three goals for yourself: home, debt freedom, retirement. Do you believe you will retire comfortably? Learn more about your ad choices. Visit megaphone.fm/adchoices

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• 0:00Andrew Giancola?

  On this episode of the Personal Finance Podcast, do you think you'll actually be able to retire?

• 0:14Andrew 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 through the question, do you think you'll actually be able to retire? 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 the show, consider leaving a five star rating and review on Apple Podcasts, Spotify, or your favorite podcast player. Now today, we're going to be diving into the question, hey, do you believe that you will actually be able to retire?

• 0:59Andrew Giancola?

  And in the second half of the episode, we're also going to answer a couple of your questions on the Q and A portion of questions listeners have sent in. We'll be answering those as well. But before we dive into this episode, I just have a quick announcement that we are taking on a small handful of people for one-on-one coaching. If you are interested in one-on-one coaching, you have to make $100,000 per year, or you have to have at least $100,000 to invest. But if you are interested in that, feel free to shoot me an email, [email protected], and we can send you back the application to see if you are a good fit. All right. So today, we're going to be talking about, do you think you'll actually be able to retire? Now SoFi did a survey, and they did this survey back in July

• 1:43Andrew Giancola?

  that was looking into people's traditional retirement goals and what they actually want to achieve with their money. And there has been some interesting stats that have been coming back on this survey specifically, because I think there's a lot of different financial goals that are telling for a lot of the country right now. And many young Americans still want some of those traditional American dream financial goals to be achieved, yet they don't know what to do next. And so in this episode, I'm going to dive into some of the interesting parts of these stats. And I'm also going to talk through how I would achieve some of these goals if I was either in my twenties, my thirties, my early forties, or even anybody else who has some of these goals in place. We're going to be talking through some of this stuff. Now, I want you to know something right now, is if you set financial goals

• 2:28Andrew Giancola?

  and you actually have a system to achieve them, I promise you, you're going to be able to achieve those financial goals. But if you're someone out there right now who is saying to yourself, well, I don't know if I can achieve it, and I'm just going to try to throw mud on the wall and see if it sticks, that never, ever works when it comes to your finances. I don't care if you're type B with your finances. You still have to systematically try to achieve some of those financial goals. Now, we have a system and a course inside Master Money Academy that we call Master Your Money Goals, and it's simply this. It's simply, hey, let's write down our goals and make sure we have those in place. And let's set up a system in order to make sure that we can accomplish some of these goals. And so I want you to know that I want every single person out there

• 3:10Andrew Giancola?

  to have the ability and the confidence to be able to achieve some of their goals. And so today, we're going to dive into a few of these. All right. First is that young Americans still want some of the traditional money goals. Well, what are some of the traditional money goals? Well, the study came back and showed that goal number one was to be to own a home. 67% of Americans still aspire to own a home, and 62% of them are confident that they will be able to own a home. So only 5% are still, don't have the confidence that they're going to own a home, even though they want to own a home. Another interesting stat was being debt-free.

• 3:49Andrew Giancola?

  63% aspired to be debt-free, but only 55% believed they will actually be debt-free. And I think that's an interesting statistic. So some people believe that they will never be debt-free, never in their entire life. That's not what I want for each and every single one of you. I want you to have the confidence to know that you can be debt-free, that you can do whatever you want in your life. Third, is 62% want to retire comfortably, but only 46% believe that they can. Now, I think retirement had the largest confidence gap by far, and fewer than half of millennials and Gen Z actually believe they'll be able to retire comfortably. So we're going to talk through some of these different statistics here today.

• 4:33Andrew Giancola?

  We're going to dive into how to achieve some of these things and some of the things that you may not have considered if this is part of your goal. All right. So perfect. The first one is only 46% of people think they'll retire comfortably. Now, why retirement feels less attainable for a lot of people is a number of different things. Number one is if you are younger, it feels pretty far away. And so a lot of people try to push things that are far away out of their mind. I have friends, I have family members who seem as though they have not thought about retirement a single time. They have not thought about how much they would spend in retirement. They have not thought about how they would retire. They have not thought about the ways they are going to invest for retirement. And I'm going to tell you right now, starting as early as possible

• 5:15Andrew Giancola?

  means that you will have the most comfortable retirement of anybody in your circle. If you want to be comfortable retiring, you need to start as early as you possibly can. Now, many of my listeners are in their thirties and forties. And if you are in your thirties and forties, listening to this and saying, ah, it's probably too late, I didn't start early enough, that is absolutely not true. You can absolutely transform your finances pretty quickly. But if you're in your twenties, my friend, you have the golden egg. You have the ability to be able to use time, and that is your most valuable asset when it comes to building wealth. Next is, most people don't know the retirement number. Now, I am a big proponent of making sure that you review your retirement number on a yearly basis. This means every single year, you calculate your retirement number,

• 6:00Andrew Giancola?

  have an understanding of what that number is, and you can make micro-adjustments year in and year out. So let me give you an example of this. Let's say, for example, you decide, I want to spend $120,000 per year in retirement. I feel as though that would be comfortable for me. Well, then you just do the math. Hey, what's the 4% rule? Or you can multiply it by 25, the amount that you want to spend every single year. So $120,000 times 25 means that your portfolio would need to be $3 million in order for you to be financially free. Now, that's quick back of the napkin math. There's other nuance that needs to come into play. But that is just a quick way to kind of think about this. Now, every single year, if you track your retirement number, all of a sudden, you only have to make micro-adjustments on a yearly basis instead of having to take big old swings when you track it every 10 years

• 6:44Andrew Giancola?

  or five years or whatever else. And so this allows you to just turn up the dial slowly or turn down the dial slowly without having any stress or worry. So I recommend every single year, folks track their retirement number so they can have an understanding of where this needs to be. Now, we're going to do a deeper dive episode on your retirement number and some of the things to consider, because there are things like healthcare. There are things like social security. There are things like pension funds. There are things like additional cash flow that you may have coming in that is going to help you calculate this number. Maybe you get an inheritance down the line, who knows? But there are things that are going to help you get more accurate depictions of what this number is that can help you as you start to plan this on a yearly basis. And then what my plan to do is, is for everybody in the Personal Finance Podcast

• 7:29Andrew Giancola?

  and the Master Money Community, we all track our retirement number on a yearly basis. Maybe we do it in the same month every single year so that we can all report back, hey, my retirement number was tweaked or adjusted or came to this. And that can be something I think would be super, super important. So the easy way to think about this back of the napkin math, but this is not perfect, and we will dive deeper into how to make it a little bit more accurate, would be, hey, what's your yearly spending in retirement? If you want to spend $40,000 per year, that's a million bucks. If you want to spend $60,000, that's 1.5 million. If you want to spend $80,000, that's 2 million bucks. If you want to spend $100,000, that's 2.5 million. You get the picture there. So every million dollars, you can spend $40,000 per year conservatively. And that's pretty conservative.

• 8:12Andrew Giancola?

  The 4% rule has been proven to be something that is extremely conservative over the course of the last couple of decades. And so that's something we can dive deeper into. Social Security, pension money, all that stuff would reduce the amount that you would need inside of that portfolio. So let's say, for example, you started to invest $500 per month. Well, if you started investing $500 per month at age 25 with an 8% rate of return, by age 35, you would have $91,000 in that portfolio. By age 45, you would have $295,000 in that portfolio. By age 55, at $500 per month with an 8% rate of return, you'd have $745,000 in that portfolio. And by age 65, you would have $1,750,000.

• 8:54Andrew Giancola?

  Well, this is a great position to be in if you just do that over that timeframe. And the total amount that you would have contributed would have been $240,000, and the growth would have been around $1.5 million, which is roughly 86% of the ending value is actually the growth. And so even if you're young, small amounts of money over time can grow to very large amounts of money. And more than half of that ending balance would be showing up in the last decade. Wow, isn't that cool? So when we think about compounding, one of the interesting things about compounding is it begins to accelerate. It begins to really, really accelerate the longer your time horizon. And so in this instance, right here, the example I just gave, $500 per month for someone who is starting at the age of 25.

• 9:39Andrew Giancola?

  So over the course of 40 years, the last decade from year 30 to year 40 is where over 50% of the returns came from. And I think that's super interesting when you look at some of this stuff when we think about compounding. So if you are trying to get started, look at $500 per month. That could get the ball rolling.

• 9:58Andrew 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 launch.

• 10:42Andrew Giancola?

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• 11:27Andrew Giancola?

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• 12:12Andrew Giancola?

  Just go to indeed.com/podcast right now and support our show by saying you heard about Indeed on this podcast. Indeed.com/podcast. Terms and conditions apply. Need to hire? This is a job for Indeed Sponsored Jobs. 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

• 12:57Andrew Giancola?

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• 13:47Andrew Giancola?

  All right. The second statistic I want to dive into is young adults are optimistic about homeownership. And in fact, I think this survey was interesting because it was more optimistic than originally anticipated. I think the housing market right now is in chaos. In reality, at the time I'm recording this, interest rates are at an all-time high. Now, this is something that, when interest rates are this high, many times, I would probably avoid buying a house during that timeframe because if it's above a 7% interest rate, I mean, if we're looking at high-interest debt just to get into a home, well, we're going to be paying significantly more than someone who got into a home in 2020 during those COVID interest rates. And so you can see how big of a difference this could be. But 67% aspire to own a home,

• 14:30Andrew Giancola?

  and 62% feel confident that they will achieve that goal. I think that's reassuring for the country. I think that's reassuring for how people are thinking about housing. But we've got to make sure that we understand what makes buying harder today. One is those higher mortgage rates and the rising prices. Prices are very high. Mortgage rates are rising. And so because of that combination right there, it becomes very expensive to own a home. In fact, owning a home right now or buying a home is a luxury. You've got to be making some pretty good money in most places in the country in order to buy a home. Why? Because you still have to factor in a lot of the other maintenance costs that are associated with the home. Let me just give you an example right now. I feel like every time I talk about houses,

• 15:15Andrew Giancola?

  I say, "Over the course of the last month, I have had a ton of different expenses when it comes to repairs on my home." That's because they never end. It feels like every single month, a new repair pops up. I've had to repair a number of different things over the course of the last month, in addition to other stuff that I've had to do around the house. And so the amount of maintenance costs that are associated with a home, you've got to factor that in. It's called total cost of ownership. If you've never done total cost of ownership, it is one of the most important calculations that you need to look at before buying a house. This means it's factoring in things like maintenance costs, things like repair costs, things like capital expenditures, things like insurances, things like your taxes, and every other piece of owning a home. All of those different areas are going to be really important.

• 15:59Andrew Giancola?

  And if you don't run the numbers on your biggest purchase overall, you could make a massive mistake that could cause you to become house poor. I don't want you to become house poor. Nobody else wants to be house poor because then you're stuck inside your house and you can't do anything all day. You do not want to be house poor. It is going to drive you backwards when it comes to your ability to build wealth, and it's going to rob you of your financial freedom. So you've got to be very careful when making home purchases. Homes have only appreciated, if you look at the Schiller Index, they've only appreciated anywhere from 2% to 4% over the course of the last couple of years. If you look at the difference between that and the S&P 500, it is a very big difference. We just did an entire episode on that last December, so you can check that out as well. We will link that up down below in the show notes, comparing the cost of owning a home

• 16:43Andrew Giancola?

  versus investing in the S&P 500. Plus, insurance costs are rising. So those costs are going to be associated with your home and with your vehicles and everything else in between. But insurance costs are rising every single year, and I think it's really, really important to make sure that you think about that. Now, across all ages, Americans are about twice as likely to call the ability to enjoy life a marker of financial progress as much as owning a home. So 59% versus 27% between those two. So the goal before you buy a house is you want to make sure that you have financial solidity, a foundation in place before you can buy a home. What does that mean? Well, one, you need to have a six-month emergency fund in place. Not three months, not two months. If you own a home, you need a six-month emergency fund in place.

• 17:27Andrew Giancola?

  Two is your high-interest debt needs to be paid off. You need to have zero high-interest debt whatsoever because adding additional liabilities to your balance sheet in addition to owning a home can be very detrimental and cause you a lot of stress and anxiety. Three is you want to have the down payment saved. Now, if it's your first home and you want to take out an FHA loan, I have no problem with that. If you want to put 5%, 10%, 15% down, I have no problem with that either. But if this is your second home and you're kind of rolling it into your forever home, I would like for you to have 20% down because it helps significantly, A, with the payments, B, but it also helps you long-term in terms of making sure that you don't have PMI insurance and all these other things. So having that down payment at 20% if it's your second home, I think, is important. And then closing costs also need to be saved.

• 18:11Andrew Giancola?

  Understanding that closing costs are expensive, they are something that you are going to have to deal with, and I would recommend having those closing costs saved as well. Also, the monthly payment needs to fit in your budget. If it doesn't fit in your budget, meaning 30% or less of your expenses for all housing costs, then you are overpaying on housing. And I can tell pretty quickly when I look at your budget that if you are spending 40% on housing, you're most likely financially stressed. If you're spending 33% on housing, you're most likely financially stressed, unless you're reducing spending in other areas. Plus, you still need to be able to invest for retirement after the purchase. If you can't invest for retirement after this purchase, then you should not be owning a home because that's your most important thing that you need to be focusing on. And then you need to plan on staying in that home

• 18:56Andrew Giancola?

  for at least 10 years, is my rule. Some people say seven years. I think it should be 10 years. The reason for that is if the housing market drops and we see a 50% correction, you need enough time to ensure that you can stay in that home so you don't have to sell the home at a loss because that's a big loss that you could be taking if you were forced to sell a home at a loss. So you need to make sure that you are going to be staying there for at least 10 years or longer. So homeownership is still part of the American dream, but it is something that you're going to need to consider. Hey, what are some of the things that I need to make sure I'm checking off before I do something like this? All right. The next one is becoming debt-free. So 63% aspire to be debt-free, but only 55% of people believe they will.

• 19:40Andrew Giancola?

  Now, the real objective is making sure debt never controls your financial life. And becoming debt-free means that you are freeing yourself from the lender. The borrower is a slave to the lender. I don't really want you to be in much debt whatsoever. And as you begin to get out of debt and become debt-free, the last thing I want you to do is go back into debt. Many times, people will fall back into debt because they did not save properly for specific expenses. And when that happens, that is where you can get yourself into trouble because you want before you have, meaning you want a specific item before you have enough cash on hand to be able to take care of it. Or you want to do a specific thing before you have enough cash on hand to be able to take care of it. This is why savings buckets become so important. I have fallen prey to this time and time again.

• 20:25Andrew Giancola?

  I've thought about it many times where I want to purchase something, and I say to myself, "Well, I don't have the cash on hand. Maybe I could pull from here or there or a different savings bucket in order to pay for this thing." No, don't fall into that temptation. And that's what it is. It's a temptation that happens to us time and time again. Save the cash in that category, and then you'll be able to pay for it stress-free, anxiety-free, and not have to worry. Don't fall prey to that temptation. I know how it feels. It's one of those things you want to do. Or if you go deeper into debt, it's one of those things you want to do.

• 20:57Andrew Giancola?

  A couple of things that I think many people should consider if you want to become debt free. And if debt freedom is part of your goals, it's part of everyone's goals, usually that listens to this podcast, then we want to make sure that we get rid of some of the debt that makes sense. So some of the areas are high interest debt, any debt above a 7% interest rate, that is a pants on fire emergency. I want you to pay that debt off outside of your mortgage. So you need to make sure that you are getting rid of that debt. But we also have things like credit cards, that is an emergency payday loans. Typically, those are emergencies, high rate personal loans, those need to be paid off aggressively. They need to be a huge portion of your debt pay down plan. Then we have what I like to call annoying debt. So this is going to be car loans. This is going to be lower rate consumer debt or student loans.

• 21:39Andrew Giancola?

  These debts are just like, ah, I don't want to make these payments anymore, but I gotta get rid of this debt. And it's a really frustrating, annoying thing. And then there's manageable debt, things like your mortgage or some low interest debt that you may have on hand. Maybe you have a car loan with a 0% APR or you have home repair loan for a 0% APR. You know, there's all of these different things that you could have on hand. Every debt payment, though, is going to rob you of the ability to be able to put it towards your financial freedom or towards things you actually value. And so if you're trying to, you know, move your dollars towards financial freedom, if you're trying to invest more so that you can become financially free, because the only way you can become financially free is investing your dollars. You can't stuff cash under a mattress, you can't just send cash wherever you want. No, you've got to invest your money.

• 22:22Andrew Giancola?

  And so if you are not investing right now and all your money is going towards debt payments, that means you are a slave to the lender. And so we need to get rid of that debt so that you can take control back, control of your finances and control of your life back so that you can move towards financial freedom. And that's what I want for every single one of you. I'm excited for you guys to do this because when you start to do this, all of a sudden you feel the pressure start to relieve and you have the ability to be able to take the next steps. So those are some of the things that I want you to think through. Now here's a couple of interesting things. The problem is, these are three of the biggest goals that people have in America. Again, they are becoming debt free, they are owning a home and they are retiring comfortably. And all three of these goals are competing for the same pool of money. How do you manage it all?

• 23:06Andrew Giancola?

  How do you make sure that you're going to stay on top of this? If you want to buy a house and you want to get out of debt and you would retire comfortably and you are splitting this between also your lifestyle spending and your, your savings and your investing and everything else, how do you actually make sure that you can accomplish some of this stuff? Well, first, it's a couple of things. One is to make sure that your expenses are within your constraints, meaning you're keeping your expenses below 60% of your income, your baseline expenses, your main expenses. They are between 50 to 60% of your income. And if you can get it below 50%, you're doing really, really good. Okay. Secondly, is if you can get rid of those high interest debt payments, those need to come next. And when you get rid of that debt, then it frees up cash flow for some of these other goals. But you're going to have to put these in order of priority.

• 23:50Andrew Giancola?

  My personal order of priority is obviously high interest debt, then retirement savings, then after that comes housing and any other big financial goals that you have. So that's the most important thing to think through is the order of some of these debts, how you're going to order this and how you're going to make all of this work. But here's an interesting stat that came out of this study. In the survey, 72% Americans said they, they would accept slower progress on financial goals to show up for family, take vacations and prioritize memories. And in fact, enjoying life today versus retiring comfortably are in conflict when you have a system to fund both. So you're trying to figure out, okay, well, how do I live for now, but also retire one day?

• 24:34Andrew Giancola?

  And if you have a system that funds both of these different areas, then you don't have to have this conflict in place. You don't have to worry about this anymore. If you have an automation system that is sending money towards your fun money, your lifestyle money, the money that you want to spend and enjoy life with, but also sending money towards retirement automatically, then your stress can be reduced. Spending on what you value works when investing happens first and automatically. And that's what I want most people to know. If you're investing first, then you're not going to stress about spending money on other stuff. If you start to pay yourself first, I want you to think of it as a bill. You're paying yourself first and then spending whatever is left over. This is a really, really powerful place to be in. But here's the thing, is time is one of the biggest advantages that most people has.

• 25:20Andrew Giancola?

  Let's say person A is age 25 and person B is age 35. And by the time they retire, if they invest $500 per month, the person who started at age 25 is going to have $1,750,000. The person who started at age 35 is only going to have $745,000. So the difference between starting at age 25 versus starting at age 35 is $1 million. And so it's absolutely crazy to see the difference there. Or if you reverse engineered this, the person who started at age 25 would only need $500 a month to reach 1.75 million by age 65, whereas the person who started at age 35 would need $1,170 per month in order to reach the same thing.

• 26:02Andrew Giancola?

  More than double is how much they would have to invest just for waiting a decade. And so the total amount that they contributed would also be $240,000 for the person who's at age 25 and $422,000 for the person who is age 35. So waiting 10 years costs them $180,000 in contributions. And so your income is going to decide how much fuel you have. But if you can fuel this early and often, as early as you possibly can, even if you're 35, the big difference between 35 and 45 is going to be massive. So getting those dollars going and getting them working for you right now is really, really important. So what's the order to consider here? Well, one is making sure you get that free money and getting your employer match. Two is making sure you get at least one month of expenses in your emergency fund

• 26:47Andrew Giancola?

  so that you can get started as your starter emergency fund. Three is making sure that you pay off that high interest debt, especially if it's above a 6% to 7% interest rate. Four is fully funding that emergency fund all the way up to three months. Once you get to three months, then you can get to six months eventually is the fully funded one. But at three months, you could start investing and then investing consistently in things like your 401k, your Roth IRA, your HSA and looking at our investing ladder for that. And then saving for major goals comes next. I think that is the big key for many of us and you got to make sure that you're automating this as much as you possibly can. So I want you to feel better about some of those big financial goals. I want you to feel better about some of the things that are going on right now in your financial life. I know each and every single one of you can do this, but you got to have a plan in place.

• 27:32Andrew Giancola?

  And if you listen to this show, you know, we are all about frameworks and plans to help you through this process. But I also want to motivate you to take action. And so every single one of you needs to take action on some of this stuff so that you can achieve these big three goals that this survey has come back and said people want to achieve. Again, it's buying a house, it's getting debt free and it's retiring comfortably. Those are three amazing goals that I want for each and every single one of you, but you gotta make sure that you have the plan in place and you're thinking through each one. Let me know down in the comments below, which one would you prioritize between those three? Which one matters most to you? Or would you rather just live life now and not prioritize any of those? Because I think it is pretty interesting to see how people are reacting to some of this stuff.

• 28:15Andrew Giancola?

  All right, now we're going to jump into the scam of the week, then we're going to get into some of your questions.

• 28:22Andrew Giancola?

  All right, so here is the scam of the week that I want to talk to. And this week is something that has been growing over the course of the last couple of years and it is the romance and long-term investment scams. Now, if you haven't heard of these before, they are pretty interesting in terms of how long of a play they have and how you have to be extremely cautious when you're on dating apps. So dating apps that are out there, things like Tinder or Bumble, there are folks on there who are trying to develop a long-term relationship with someone. And many times they are, you know, establishing relationships with multiple people at the same time. And they meet folks on Tinder, they meet folks on Bumble and some other locations. And they start to have this conversation with you and you start to develop this relationship.

• 29:03Andrew Giancola?

  Maybe you meet up a couple of different times, but their end goal is to try to scam you into investing into either a crypto or something else along those lines. And many people are calling this pig butchering. It's a very interesting term, but that's what law enforcement is calling this because the scammer spends a long time fattening up its victim before they actually take anything. And so this is something that I think a lot of folks need to watch out for or be careful with, especially if you don't know a specific person. If they begin to talk to you about investments and the ways that they're investing their dollars and how much money they're making with their investments, and it's pretty early on in the relationship and you don't really know this person whatsoever, that can be a huge red flag. And so if you're on the dating scene or if you're someone out there who is trying to make sure that you're protecting yourself,

• 29:48Andrew Giancola?

  be very, very cautious of the conversations that you are having with specific people. So here's a couple of red flags to look out for. Someone you have only met online and never in person or a live video call starts talking to you about investing. They steer you into a specific app or a website that you have never heard of before. This is typically how it happens. And ironically, you may be saying to yourself, I'm not going to fall for that. But if you develop a relationship with someone and you develop some sort of trust with someone, that's where this begins to happen. The returns are going to look steady, they're going to look a little high on the higher side. So like a 10, 12, 13% rate of return. And they're going to ask you to pay a fee before you actually join this website. A lot of times what happens here is once people create these relationships with folks,

• 30:31Andrew Giancola?

  then all of the sudden, they start to stir up urgency. They start to stir up this urgency, like you gotta get in this right now, otherwise you're going to lose your opportunity. I just want this for us. You know, those types of statements are going to be what you see when these begin to happen. So here's how to protect yourself. I think there's a couple of things that you want to make sure you do. One, if someone is giving you investment advice on a dating profile, maybe don't listen to them whatsoever. If it's on an Instagram DM or whatever else, that's another great red flag that I think you need to watch out for and only invest through well-known brokerages. Listen, if you are getting sent to a website you've never heard of, don't invest in that website. Don't put your money into that website. Instead, make sure you're only going through well-known brokerages. If it's a crypto

• 31:15Andrew Giancola?

  that you feel as though is going to go to the moon, make sure that you go through a Coinbase or wherever else you're actually investing your crypto from. Don't just do it somewhere where you've never heard of the place before. And in reality, real relationships don't come with a trading platform attached. And sometimes you may be listening to yourself. A lot of you guys are financially savvy. So you may be saying, who would ever fall for this? Who would ever do this? The number is staggering. It is rising on a yearly basis. And so we always, when it comes to these scams, want to spread the word, especially when it comes to financial scams, for you to protect yourself, because I don't want this happening to any of you. I have seen people fall prey to this via email, fall prey to this via text. But when it comes to dating apps and dating websites, if they're developing a relationship, that means they are trying to develop trust with you. And so you've

• 31:58Andrew Giancola?

  got to make sure that you are on top of this and you are not falling prey to this. Now, one of the best ways to combat against getting scammed online is removing your personal information from the internet. And so the best way to remove your personal information from the internet is a service that I absolutely love called Delete Me. With Delete Me, what they do is they take your information, if you Google your name, or your address, or your phone number in quotations, you're going to see your name pop up on all these different websites. What Delete Me does is they removes your personal information from those data brokers so that they can't have access to your personal information anymore and sell it to other scammers or anybody else. Because if a scammer gets a piece of your information, and they go and Google your name, they can find the rest of

• 32:40Andrew Giancola?

  the information. It's becoming way too apparent out there that a lot of these data brokers are flying under the radar, or they're just not following all the rules that they should be. And so Delete Me helps remove that personal information, gets it removed for you, and then sends you a report so that you know where your personal information is being removed. I absolutely love Delete Me. I have been using it for years. My wife has been using it for years. And it is one of the best services out there for a very inexpensive price in terms of what you get. It would take you hours and hours and hours and hours to do this. So definitely check out Delete Me. If you go to joindelete.me/pfp20, you get 20% off Delete Me by using that. So thank you so much to Delete Me for sponsoring the show. Now, let's get into some of your questions.

• 33:25Andrew Giancola?

  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 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

• 34:07Andrew Giancola?

  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. 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 did the year before.

• 34:49Andrew Giancola?

  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,

• 35:32Andrew Giancola?

  starting at just $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. One of the biggest things I tell people is when you pay off debt, you need a plan. Because when you actually see the finish line, everything changes. That's one of the reasons I love Monarch. Their debt-free simulator lets you see when you'll be debt-free based on your balances and your payments. You can even test different scenarios to see how much faster you could eliminate your debt by paying a little extra every single month. And one habit I personally use is my five-minute money drill. Every morning, I check Monarch, and I check my spending, I check my

• 36:16Andrew Giancola?

  accounts, I check my investments, and make sure everything is on track. That's what I love about Monarch. It helps you stop guessing and start making progress towards your financial goals. 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.

• 36:41Andrew Giancola?

  All right, the first question is from Nick. Nick says, hey, I found you for FIRE topics. My biggest question is if retiring early at 50, what is the order of account-type spending to maximize taxes while still qualifying for ACA subsidies? I want to understand the year-by-year strategy from 50 to 59 and a half. I'm aware of all the options, but it's hard to digest the literal order and amount to pull, assuming zero debt and trying to maximize for tax efficiency. So the enhanced ACA subsidies expired, so the 400% FPL cliff is back. And so in 2026, that number is about $84,600 for a couple, and $62,600 for a single person. And going $1 over means you lose

• 37:25Andrew Giancola?

  that entire subsidy. So you've got to be really cautious about where your income is and how you're actually making this happen. So the subsidy is based on AGI, not spending or cash, and the cost basis of brokerage and Roth contribution withdrawals don't count as income. So between ages 50 to 54, if you do something like live off the taxable brokerage accounts in cash, you can sell high basis shares first, and then any room left after the ACA target goes towards Roth conversions. Now, here's the thing about this, Nick, is each Roth conversion can be withdrawn penalty-free five years later. So the conversion at 50 funds age 55. Roth conversion ladders are really important to understand, and they are something that if you do mess them up, the tax implications can be big. So I want you to just make sure that you're careful when you're

• 38:09Andrew Giancola?

  doing Roth conversion ladders. Now, between ages 55 to 59 and a half, you can live off the ladder in the original Roth contributions with 72T as a backup. And the rule of 55 is not going to apply if you retire at 50, so we can't use that. So let me give you an example of this. Let's say, for example, a couple spends $80,000 per year from a brokerage at a 50% basis. Now, this creates $40,000 of MAGI, okay? That leaves about $40,000 for a Roth conversion, and federal tax is going to come out under $1,000. So after 59 and a half, you can keep converting up until Medicare at 65 to shrink those future RMDs, and then reset your MAGI target every single year because the

• 38:49Andrew Giancola?

  threshold may change. And so it's very important when it comes to this kind of stuff, to really think through the process year over year. So Nick, you're thinking about this in the right way, where if I was going to do this, I would make sure that I understood the tax implications of it on a yearly basis. So if I'm going to do a Roth conversion ladder, I want to make sure that what the first five years look like is probably going to be taxable, the next five years is then going to be you living off the ladder. And then from age 60 to age 65, that's where we can do some additional things and live off any retirement accounts. But then we just need to make sure that we understand the healthcare implications when we go through that decade. So let me know if you have any additional questions on that. I think it's super important for folks to think

• 39:30Andrew Giancola?

  through healthcare when it gets to their 50s, because that is the biggest surprise for most people.

• 39:37Andrew Giancola?

  All right, the next question is from Steven or Stefan. Hey, Andrew, to your listener and love your content. Well, thank you so much. I'm 45 years old and plan to retire in five years. Amazing. I ran my numbers 100 different ways and feel like I'm on the right track. I've never worked with a financial advisor, and I'm not interested in having one. However, I would like someone to look over my numbers and withdrawal strategies to make sure I'm not overlooking anything. How do I find someone who would do this with me? I feel like most advisors advertise with AUM. So what you're looking for here is an advice-only flat fee or hourly planner advisor. So you're looking for someone who is just going to do a flat fee to give you a financial plan that can look over your information. And I think it's a great question. It's really important to have

• 40:19Andrew Giancola?

  this in play. And that what they're going to do is they're going to review your plan once, and then never have to worry about managing your money in the future, or have your money in an AUM if you don't want to go that route. And so there's a couple of different places that you can look at this. One is you can schedule consultations with a couple of them, and you can look for a CFP that is only fee-based, interview a couple of them, and then kind of think through that. And expect it to be around $200 to $400 per hour, some of that range. But sometimes it's just one flat fee for the entire plan. So it could be up to like $5,000 for an entire plan, to kind of go through your situation and think through that, which is going to be significantly less expensive than paying 1.5% in AUM to an advisor or something like that. Some common blind spots, though, in your situation that I would ask them about, is

• 41:04Andrew Giancola?

  healthcare until 65, sequence of returns risks, and also not enough money accessible before the age of 59 and a half, and if you will or will not have that. And then also inflation assumptions can be very, very helpful, too. Now, if you want to talk to someone just for an hour, there are some websites and places that you can do that as well, where you can just talk to someone on an hour-by-hour basis, and they can kind of help you through some of those assumptions. But it's really important, and I think you're thinking about this the right way, to just find someone who is a flat fee or hourly planner that can help you through this process, who also has some experience in early retirement. Since you are retiring early, you want to make sure they do have that experience in early retirement that can help you through this as time goes on. So really important stuff, and I think that is a great question. But just finding that flat fee

• 41:49Andrew Giancola?

  advisor is what I would search for. And then interview three to five of them and see which one you like best.

• 41:56Andrew Giancola?

  All right. The next question I love is from Rishi. So Rishi says, Andrew, this year, much of my compensation will be in the form of a bonus coming soon. How do you recommend people treat large sum bonuses? Do they put it towards the mortgage, invest in an ETF? Everyone keeps saying a crash is coming. Love the podcast, by the way. So thank you so much, Rishi. This is a great question. I think, first of all, let's address the crash and we're going to reverse engineer this. Okay. So a lot of people say a crash is coming all the time. They've been saying a crash is going to be coming since 2010. And every single year, everyone has been just pounding the door, saying a crash is coming. A lot of people right now are saying there's an AI bubble. You know, a couple of years ago, it was the COVID crash. A couple of years before that, it was, you know, the housing crash. A couple of years before that, there were so many different reasons why the market could crash.

• 42:41Andrew Giancola?

  And year in and year out, there is a plethora. Boy, that's a good word. There's a plethora of reasons why the market could go down or the market could go up. But we don't make investment decisions based on if we think the market is going to go down or based on if we think the market is going to go up. Instead, we want to make our investment decisions based on our investment plan and we're going to invest every single month, no matter what. Now, could you get a bonus and you could invest a large lump sum and decide pretty quickly, oh, shoot, the market went down right after I invested this? Sure, people get unlucky all the time. But if that happens, if you stay invested over the course of the long term, you will still end up in a great position if you are a long-term investor, if you look at historic returns. And so we got to go back and look at historic returns and see, okay, even if the market goes down for some period of time,

• 43:26Andrew Giancola?

  look at the longest time horizon of the market and what direction did that market go? It went in one direction, which is up and to the right. And so we want to make sure that we look at history, we study history, we understand what has happened, even if there is pullbacks, it is okay. We just have to control our emotions and make sure that we are on top of our investing. So we don't have to worry as much about that stuff moving forward. So that's a perfect question, and I think that's a great starting point. Now, let's talk about thinking through a bonus. Okay? Here is how I think of through a bonus, and I think there's a number of ways that you could spend a bonus. But for many of us, we want to make sure first, we understand if this is much of our compensation, if this is much of the money that we're earning throughout the year, we want to do the most valuable things with that bonus first. Okay? First, we need to look at our emergency fund.

• 44:10Andrew Giancola?

  Do we have a six-month emergency fund? If not, maybe a portion of it goes through the 136 method, meaning one month of expenses, then paying off high interest debt. If you have anything above a seven, 6% to 7% interest rate, then the three months of expenses, and then ultimately getting to six months of expenses. Okay. So building out that protection plan of one month, high interest debt, three months, then you can start investing, then six months. Okay, that's our goal there. And if you haven't heard the 136 method, I would recommend checking out that episode because I dive deep into how to navigate all of this stuff. Secondly, though, is then, once you have that in place, then you can start to think about investing those dollars. And so I think investing is a really, really important thing. And if you have not hit the investments that you want to hit your retirement goals for the year,

• 44:54Andrew Giancola?

  next would be to invest those dollars. I personally, my favorite order is something like a Roth 401k or Roth IRA, then going to something like the HSA, then going to your traditional 401k or IRA, and then your taxable brokerage. Those are the places I like to look at that, investing in index funds and ETFs, target date funds, those types of things, and developing a broad-based portfolio based on your research. Those are some of the areas that I look at. Then after that, if you are hitting your retirement goals, you can spend some of this, you can enjoy some of this money on things that you value. Maybe you want to save some for a house down payment. Maybe you want to pay off your mortgage a little quicker. Maybe you want to spend a little bit on something that you like or go on a vacation or whatever else. Nothing wrong with that whatsoever.

• 45:37Andrew Giancola?

  Or maybe you want to pay off some low interest debt that's just annoying you. Maybe you've got some student loans or you've got a car loan there. All that kind of stuff is fine after the investment portion. Like, once you look at this and you say, all right, I've got my emergency fund in place, I'm hitting my retirement goals and I'm hitting my investment goals throughout the year, then you can go and kind of enjoy some of that money. And so a lot of times, I like to look at this in a way where, okay, let's say we hit all our goals, well, maybe 50% is going to go towards a bonus, towards my wealth building, and 50% is going to go towards things that I love. I want to go on vacation, I want to buy myself a nice watch, I want to just pay down some of the student loan debt that just annoys me, that's at a 3% interest rate. That's a great way to look at this, where you can kind of develop a system and a process of the order of operations. So I would put for you, the highest priority outside of, you know, the emergency fund, high interest debt, and investing,

• 46:22Andrew Giancola?

  what is your highest priorities? Put them in order and then go from there. That's going to be, that's going to help you, based on your values, make a value-based system outside of those first three, and that'll ensure that you are on track and enjoying some of that money, too. I want you to enjoy some of it. We don't want you just to save and hoard all of it. You need to make sure that you're having a little fun, too. So I think that's really important. So congrats on the bonus. I think that's amazing. Congrats on everything that you're doing thus far. And if you have any other additional questions, let me know.

• 46:51Andrew Giancola?

  Awesome. Well, thank you guys so much for listening to this episode of the Personal Finance Podcast. Again, if you guys have any questions, feel free to join the Master Money Newsletter and you can respond to any of those newsletters every single week, and we will possibly answer your question on the show. Also, if you want to work with me one-on-one, shoot me an email, [email protected]. We'll get you set up to fill out an application, see if you're the right fit, and then we can go from there. Also, if you want to do just weekly group coaching calls with me, join Master Money Academy, because that's what we do inside Master Money Academy. We have all of our courses there. I do a weekly group call in there where you can ask any questions that you want. I answer them live, and I answer questions every single day when you shoot me messages. So if you want to be able to message me, talk back and forth, Master Money Academy is the place for that.

• 47:36Andrew Giancola?

  And we teach you how to build wealth for you, your family, and we teach you how to invest, even if you're just getting started. So thank you so much for being here. I truly appreciate each and every single one of you, and we will see you on the next episode. Have you ever opened a brokerage account, looked at all the tickers, and then closed the app because you didn't know how it all worked? You're not alone. Most of us were never taught how investing works. So we wait for the perfect moment, but that moment never comes. That's why I built Master Money Academy. Inside, I teach you how to invest step by step, and you'll learn which accounts to open, in what order, and how to build your first portfolio. You're also going to learn how to pick index funds and ETFs with confidence instead of guessing. And you get access to live group coaching calls with me. You can bring your exact situation, ask your questions live,

• 48:20Andrew Giancola?

  and get real answers, all while learning from people who are working towards the same goal that you are. You don't need a lot of money to get started. Members come in with as little as $10 to get started investing, and it's just $25 a month. So head to mastermoney.co to join Master Money Academy today, and let's build your financial freedom together.

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