How Student Loans Are Crippling Americans (& What They’re Doing About It)

Student loans are reshaping education and your first decade of adulthood. We share how to lower the cost of a degree (scholarships, test prep, community college, in-state networking) and build a career-first plan that actually pays off. Stay for our Q&A on 20-3-8 Rule for multiple cars, how to build the right emergency fund, the right down payment for your second home, and so much more. ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Jump start your journey with our FREE financial resources⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Reach your goals faster with our products⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Take the relationship to the next level: become a client⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Subscribe on YouTube for early access and go beyond the podcast⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Connect with us on social media for more content⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Bring confidence to your wealth building with simplified strategies from The Money Guy. Learn how to apply financial tactics that go beyond common sense and help you reach your money goals faster. Make your assets do the heavy lifting so you can quit worrying and start living a more fulfilled life. ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠NordVPN.com/MONEYGUY⁠⁠⁠⁠ 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.

• 0:01Speaker 00

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• 1:01Brian Preston?

  Student loans. Man, how they are just messing up my favorite thing, which is education.

• 1:07Speaker 03

  Brian, I am so excited to talk about this because it seems like the educational landscape has shifted and folks today that are graduating or have recently graduated from higher education are facing a different problem, a different type of dilemma than generations past. And we want to walk you through what that looks like and maybe what people are beginning to do about that to try to help that out.

• 1:31Brian Preston?

  Yeah, well, I'm always glass half full. And I think that what I do, we'll give you the data, but also we're going to tell you how you can avoid this or navigate your way out.

• 1:39Speaker 03

  So it's really interesting. When you look at the stats, the average US undergraduate, the average, the average US undergraduate graduates with approximately $26,000 in student loans. And that's just very, very different, Brian. You, when you were coming through school, it was not commonplace for someone to come out of college with five digits worth of student loan debt.

• 2:08Brian Preston?

  Yeah, it's one of those, we love it. Education, I always say that, you know, even when we were doing the launch of Millionaire Mission, I talked about my own journey where I felt like education is really the ladder of opportunity because you can better yourself, doesn't matter where you come from. So it really troubles me when I see that somehow the system has gotten skewed to where cost of education's gone up, the amount of people going out there and having to go leverage it up and start out, when they come out into the world, instead of thinking about how do we start putting army of dollar bills to work for us, we have to think how we're going to pay back all these financial institutions. It just seems like a trap in a lot of ways. So we want to kind of help people

• 2:50Brian Preston?

  because what I'm seeing is also, this is playing out in decisions people are making. There's some data that's come out now with what are the younger generations doing to kind of address this headwind that's facing them. And a lot of them are putting off now, and we broke this out by generations, Gen Z, millennials, but you can see both Gen Z and millennials are putting off now, kind of improving themselves or taking opportunities for career advancement. If you look at it, they're definitely, they've soured on the thought and they're putting it off, additional education. That's probably with how much things cost, that might not be the worst thing, to be honest. And I am happy to report that the least of these three that we are reporting

• 3:30Brian Preston?

  is that Gen Z and millennials, 17% for the Gen Z, 13% for millennials are even putting off having children. So this is going to have a ripple effect for actually multiple generations because of this headwind or this kind of ball and chain that we've strapped on to our younger generations.

• 3:49Speaker 03

  But young Americans are catching on. I think the millennial, the millennials came through this, Gen Z is recognizing, and now even the next generation is recognizing this. And young Americans are becoming more and more resilient. They're now doing things like prioritizing affordability, thinking more about like career readiness and having a bigger focus on, okay, what are the long-term implications of this? I recognize that if I go take out tens of thousands of dollars of student loan debt, I'm going to have to carry that with me into my career. And frankly, Starting out in your twenties is hard enough already without having to also start in debt. So as we're looking at younger generations, we know that right now 54%, this is according

• 4:32Speaker 03

  to a survey done by Fidelity in 2025, 54% of high schoolers listed cost as the most important consideration for college. I'm excited about that, Brian. When I was coming through, it was much less about how much did college cost? And it was much more about the experience. Where am I going to have the best Saturdays? What's the most fun place to go? What's the most prestigious name? It seems like high schoolers now are beginning to recognize, man, maybe cost should factor into this equation some.

• 5:00Brian Preston?

  Yeah, I mean, how many, and look, the colleges are not blameless on this. I mean, when I look at, I was talking to somebody and they had a daughter who was going to, this is a major public university, and I found out that every one of them in their freshman year is going to have their own bedroom, their own bathroom, en suite. And I'm like, how much is this all going to cost? I mean, what happened to the cinder block dorms where you, you know, you silo the showers? I mean, because, look, I get it. I mean, as I get older, I'm bougier and bougier, but the thing is, is that we go to college. This key point, you go to college on how you can improve yourself academically while you're in this young stage of life where you can put up with anything.

• 5:44Brian Preston?

  You know, if there's ever a time in my life where cinder blocks and just rows of showers that I had to go share on the left side is showers, right side is commodes, this is the time when you're trying to improve yourself because there's going to be plenty of time as you improve yourself to go have your en suites and all the other things. I think we've lost the plot in some ways with how we've structured college.

• 6:07Speaker 03

  But again, there are some bright spots in terms of how the mindset is shifting. I just said that 54% of high schoolers have said that the cost of college is a super important consideration. Well, 61% of students listed career viability as their top goal for college, meaning when I go off to school, when I go get this vocation, it's less about the Experience and it's less about, oh, I just want to go do the college thing. And it's more about what is this preparing me for? How am I going to use this next step or stage to prepare me for when I enter into the real world? And it's wonderful that young people are beginning to think through that. And parents are beginning to educate their kids around making those decisions well.

• 6:50Brian Preston?

  So let's talk about, okay, I've thrown enough, you know, onto, onto education. Let's actually talk about how, what you can do to get yourself out of this. The first thing we always say is know the tools available to you. Look, I was guilty of this too. I remember when I went to college, I way underplayed how many scholarships I probably could have gotten. Because just nobody was ahead of me telling me how to do this. Another thing that I was shocked, now I'm glad for my daughter, because I have a senior in college, is that I had enough knowledge or people had shared, done the experience shares. We did an ACT prep and you realize just doing things like ACT prep, the amount of scholarships that my daughter qualified for just by boosting her standardized test scores.

• 7:35Brian Preston?

  I think me and my humble beginnings, I didn't know about all that stuff. I took that test, I mean, I probably got credit for my name. And then I probably, if you saw how the disparity between my English versus math on the SAT.

• 7:48Speaker 03

  Oh, I'm sure it wasn't that bad.

• 7:49Brian Preston?

  Oh, no, it was bad. I mean, it was really rough. If I had anybody who had knowledge ahead of me, we'd have been like, hey, let's go do some prep and let's see if we can push those numbers up. Because maybe you qualify for more financial aid. If you do that, you can take an active role in some of this.

• 8:04Speaker 03

  Another thing that you can do when it comes to making this decision is measure twice, cut once. We used to always say that the single largest decision that most people will make from a financial perspective in their life is to buy a home. Well, we know that the average age of first time home buyers is now at 38. That means that the college decision that you make will likely be the most expensive decision you make for the next two decades. So you want to make sure that you make it well. Make sure you're choosing a university or an institution that aligns with where you are financially. And don't forget that there are things like, hey, okay, maybe I don't. To go to the more expensive public university, maybe I can go to the local community college and I can do the two year school and I can do the things.

• 8:48Speaker 03

  They're going to get the cost down so that when I actually do graduate, I'm not saddled with a ton of debt trying to take it into the real world.

• 8:55Brian Preston?

  I wanna, I wanna tell people something that I tell this to all my neighbors and friends. This is a hack if you live in the southeast. I don't know, northeast, y'all are different. West, I don't know, you know, I don't Midwest, I don't know what y'all do either, but I know the SEC. I know the southeastern conference and I'm always amazed when parents move into our neck of the woods. And then I find out that they're touring like 20 colleges. I'm like, do you want, do you, where does your kid, where do they want to live? Post-college. That is the key thing you ought to do. And if they're going to live wherever they're going to live in the southeast. Go to the state university in that. And why do I say this? Go look at where all the governors are coming from. Go look at where the business owners are coming from.

• 9:39Brian Preston?

  Usually in the southeast because look, we have, and look, it all ties into great football programs, great business, bang for the buck. In-state tuition. It's just amazing, but I'm always, people go and run up out of state tuition and all these other things. And then I got this from my own father. You know, my father was a great football player, went down, he was from Columbus, Georgia, went to Baker High School, but then he went down to the state of Florida. Had a very successful collegiate career down there, but then he knew he was coming back to Georgia. Moved right back to the city of Atlanta after he graduated from University of Florida and he always said it was a big regret. Because all of his power structures were gone, you know, all of the benefits.

• 10:22Brian Preston?

  Meanwhile, when I was in the state of Georgia, I mean, it's amazing. If you go look at who I was in fraternities with, who I was in classes with. I know a lot of the power structure for the state of Georgia because I was in proximity to them. While I was at the University of Georgia. And that's why I'm always amazed when parents who in the SEC, you know, go, if your kids are going to live in the state of Tennessee. Like if my daughter had said she wanted to go to UT, a lot of people would be like, you're a bulldog. You would hate her. I'd be like, no. I love the state of Tennessee now, so I would have loved for her to go to Tennessee, because I think that in the long term, there's a lot of opportunity to have proximity to people that will have some impact with you and probably, you know, that network is strong.

• 11:06Brian Preston?

  But I'm always amazed when people send their kids all over the place and pay out of state tuition. They don't take advantage of the community colleges, because here in Tennessee, that's free.

• 11:14Speaker 03

  Yep.

• 11:14Brian Preston?

  I mean, there's all kind of great opportunities. Measure twice, cut once, don't let some college sell you on lifestyle, because they're not going to be there to pay the bills for you after you get out.

• 11:25Speaker 03

  Oh, and that was the last takeaway is that personal finance is personal. When you make your college decision, make sure you make the one that's right for you. Be careful, okay, well, I'm just going to send my kid to the school that I went to, because it was my alma mater. Or, hey, my kid wants to go to this school because it has the really fun Saturdays or what. Don't let someone else tell you why you ought to make this huge financial decision. You want to consider your unique circumstances, your unique goals that you have related to higher education, or that your children have related to higher education, and pursue those. Because what you don't want to do is get four years, five years, six years down the road and think, holy cow, what did I just do? And how am I going to get myself out of this pickle?

• 12:10Speaker 03

  And be okay and prepared to adjust. That's why I tell students all the time, or parents who have students that are graduating, hey, if your kid doesn't know what they want to do, they don't know what vocation they want to go into, there's nothing wrong with just starting, starting easy with a local community college to begin to get the core classes out of the way as you begin to develop and figure out what direction you want to go. That's not a horrible solution. So build in a plan and a strategy that's personalized for you.

• 12:39Brian Preston?

  Yeah, begin with the end in mind. Don't let some schools sell you on something. Go ahead and figure out how you can hit the ground running. Because the reality is, is five years, 10 years out of school, once you get the opportunity. Colleges are supposed to just open the door of opportunity for you. After that, it's, it's kind of just, it's, it's part of your who you are. It's your part of your pedigree, but it's not, doesn't define you completely.

• 13:03Speaker 03

  That's right.

• 13:03Brian Preston?

  And most people don't ask you, other than on Saturday, what, what shirts you're wearing for the football game.

• 13:08Speaker 03

  And it should be Georgia. Uh, so, uh, we love that we get to sit here. We love that we get to answer these questions for you guys. But we also love that we get to speak to the things that you actually care about. It's why every Tuesday at 10 a.m. we have our team out in the wings collecting your questions. So if you have something you want us to weigh in on, make sure you get in the chat right now. So with that, Creative Director Rebe, I'm gonna throw it over to you.

• 13:33Speaker 04

  Yes, I have some questions queued up. The first one is from Paximal. He says, "Congrats on 600K subs."

• 13:39Speaker 03

  Woo, let's go.

• 13:40Speaker 04

  We just hit that this morning, which is super exciting, so thank you for that. And then his question says, "Is it okay to do both step eight and nine of the foo at the same time? I automatically contribute monthly to 529s, but also throw the remaining surplus at the house. What do you think of doing two steps at once?"

• 14:00Brian Preston?

  Paximal's on to something here.

• 14:02Speaker 03

  Yeah, I, I, uh, here's my, I'm gonna tell you, you, you wrote the book on this, Brian. Uh, but I'm gonna tell you the way that I think through the latter steps of the Financial Order of Operations. Uh, once you pass through step seven, once you get into hyperaccumulation, once you're saving 25% of your gross income for the future, for your future goals, and you know that you're on track, you get to kind of pick and choose what you want to do with your money at that point. And for some people, it's, "Hey, I want to start saving for my kid's college." And for some people, it's, "Hey, I want to buy that vacation home. I want to upgrade to that luxury car. I want to do that home renovation." And for others, it's, "Hey, I just want to be debt-free. I'd love to start knocking out low-interest debt because that's one of my goals."

• 14:44Speaker 03

  So I think that once you get to step seven, what you quantify as an abundance goal, because for some people, an abundance goal may be prepaying low-interest debt. That's okay. You get to pick and choose, and you get to control your own destiny there.

• 14:58Brian Preston?

  Yeah, Paximal, I'm gonna go ahead and, this is something, I have so many people who come to us and say, "Hey, when I..." Started out, I was following this mantra. And I'm like, oh, you're a debt crusader. You know, you're trying to knock out the debt before everything else. And like, yeah, and I was like, but I usually have a question. Now, I was saying this was a hundred percent, but I think I'd ran, we ran across a making a millionaire couple that actually broke my hundred percent rule, which kind of made me sad a little bit because I forever, it wasn't scientific, but forever, everybody I'd asked this question, like, no, you're right. That's exactly what I was doing. So I found out that there, there is somebody that's outlier. Because what I found out when I've talked to, we've gone to FinCons, podcast movements, and when all these, you know, people who are in the personal finance community,

• 15:40Brian Preston?

  when I find out they paid off their house when they were 32 years old or so forth, I always ask them the question, I say, hey, I know you paid off your super low interest mortgage because you hate money really early, um, you know, when you're way beyond, you know, way earlier than 45 years of age while you're still in the make wealth phase. But answer this for me, were you at least saving and investing 25% first? And up until we recorded that episode of making a millionaire, the answer a hundred percent of the time was yes. So these people are already loading up the Roth IRAs, they were already maximizing their employer 401ks. And yes, they got to step eight of the financial order of operations. And they kind of looked at and said, you know what? I want to be debt free. I'd love to have this mortgage paid off. Knock yourself out.

• 16:23Brian Preston?

  We're, we're A okay with that because the reason we can say it's okay is because you're not skipping the make wealth phase. That's what, that's what a lot of people, because you hear the argument that, well, I want to de-risk my life. Well, I'm like, there's a bigger risk when you're in your twenties and thirties. You'll never be wealthy because you didn't build up enough dollars working in the background. Because once that money goes into the house, yes, you might have extinguished that 3% mortgage or 4% mortgage, but what could that money have become? What's the delta between what the interest rate on that mortgage was versus if you had this money out there compounding? Yes, I know your real estate is appreciating too, but it was going to appreciate whether you had a mortgage or not.

• 17:09Brian Preston?

  It's really what happens to that locked in equity. And that's the part, and look, a lot of people are going to say is like, Oh, you're one of those leverage guys. No, if you knew my mindset, it's more balanced. Is I think there's a time and a place. There's make wealth, there's maintain wealth, and then there's multiply wealth. I just want to make sure you get to the wealth phase and don't skip it. And that's why I think 45 years of age, you know, that you've, you've done the 25%. All these things need to be accomplished so that you don't get to my age now and go, yeah, I probably, that was probably a six figure mistake that I made by misprioritizing this.

• 17:45Speaker 04

  Well, Paximal, great question. Thank you for being here and it is your lucky day because it is a Tumblr day. So if you would like a Tumblr, just email [email protected] and we'll get one sent out to you, Paximal.

• 17:57Brian Preston?

  Can I tell you a cultural thing I noticed this morning?

• 17:59Speaker 04

  You can.

• 18:00Brian Preston?

  And I want to take credit for it. You know, you see these beautiful transformer tumblers that, you know, we have to model it both way. Oh, I'm, oh my gosh, it's naked. You can see what we drink now.

• 18:10Speaker 03

  We're not sponsored. Put this back in. Quick, quick editing team, blur it out.

• 18:16Brian Preston?

  This is, it is, it is a koozie, but it also can be transformed into a drinking. Bo, is this the one day you're not actually using it in the appropriate form?

• 18:27Speaker 03

  Did they, they, they washed it? The team has washed it. It's in the, it must be in the dishwasher.

• 18:31Brian Preston?

  Let me get to the point.

• 18:32Speaker 04

  That's a good.

• 18:32Brian Preston?

  The whole point was I was watching, we have the Today Show on in the morning. Okay. And you know, forever, we even have it, I make coffee with my, my, my wife, you know, in the, in the traditional, you know, ceramic coffee mug. But I noticed this morning, all over the Today Show desktop was a bunch of tumblers.

• 18:52Speaker 03

  Money Guy tumblers?

• 18:52Brian Preston?

  Just like, well, they have their today, but you know, somebody there was like, you know what? These transformer tumblers are pretty damn cool. So they have the exact, I mean, it looked very similar. He's just different logos. But I was like, we did it first, you know, welcome to the party.

• 19:10Speaker 03

  Today show.

• 19:11Speaker 04

  I do really like this Tumblr. I use it all the time.

• 19:13Brian Preston?

  Oh, I use it constantly. I mean, matter of fact, I was, we have like three of them at the house and there was, I, I accuse, I even called my college daughter. I was like, did you steal the tumblers and take them back to college? Cause I was one while I was trying to make my, my coffee to go. I sent a text.

• 19:28Speaker 03

  If you would like a Tumblr, I will hook you up.

• 19:30Speaker 04

  I was gonna say, I could probably get her one.

• 19:31Speaker 03

  You come see me, I will give you.

• 19:32Brian Preston?

  No, it was not. Look, she can have as many Tumblrs as she wants. It was more of what was access to when I needed it.

• 19:38Speaker 04

  She's even worked here before. She deserves a Tumblr.

• 19:39Speaker 03

  Got it, got it. It wasn't there when you needed it.

• 19:40Brian Preston?

  The reality was, they were all in the dishwasher.

• 19:42Speaker 03

  Oh, it was a you issue, not a her issue. They were, you just didn't look.

• 19:46Brian Preston?

  I think it's a multiple use issue. I was not, I, look, truthfully, I don't run things through the dishwasher that much.

• 19:52Speaker 04

  I was gonna say, I was surprised you put them in the dishwasher.

• 19:54Speaker 03

  It's a rinse and pourer, right?

• 19:55Brian Preston?

  But we have a lot of people in my household, won't say their names, they like to leave stuff, just, and then once, you know, it gets all caked in. Creamers and all the other stuff, and then you have to run it through the dishwasher to get, get it off. But if you rinse things out while they're hot and warm, it's amazing how water is the natural cleansing agent typically.

• 20:12Speaker 04

  Wild.

• 20:13Speaker 03

  Love that. Hey, uh, he said something interesting in that question. Uh, we had a Making a Millionaire episode come out yesterday with Dan and Soren. It was awesome. If you've not checked it out, make sure you go check out Making a Millionaire. If you want to know how you can know when we have new ones come out, make sure you subscribe right now. We are right on the cusp of coming to 700,000 subscribers, which will be awesome.

• 20:38Speaker 04

  On the cusp.

• 20:39Brian Preston?

  On the cusp.

• 20:40Speaker 04

  I was gonna say, next stop, 1 million, but okay.

• 20:44Speaker 03

  But if you have not subscribed, make sure you subscribe so you can know, uh, every time that we have a brand new Making a Millionaire episode come out. We have some awesome ones, uh, in the pipeline coming out for you guys.

• 20:54Brian Preston?

  That is the most bow thing ever.

• 20:56Speaker 04

  He'll now be saying, we're almost at 700 for as long as it takes to get to 700.

• 21:01Brian Preston?

  Seriously, I think I can, I think I can, I think I can.

• 21:04Speaker 04

  All right. Next question is from Cara W. It says, hi, money guys. My spouse and I will need to finance two cars at the same time. With 238, do we aim to have the combined monthly payments less than 8% of our income? Or two payments individually below 8%?

• 21:23Brian Preston?

  Cara's not gonna like my answer.

• 21:25Speaker 03

  No, go ahead and tell her. Go ahead and break it in.

• 21:26Brian Preston?

  It's actually 8% for both.

• 21:28Speaker 03

  For all car payments, all the auto payments you have. Have to be less than 8% of your monthly gross income. So whether you have one payment, two payments, five payments, 10 payments, you cannot exceed 8%. So some people really struggle with this. Like, guys, I can't do that. To which we respond lovingly, perhaps you should not have two car notes at the same time. Maybe is there a way you could figure out instead of replacing cars on the same schedule? Is there some way we could stagger them every three to four years? So that once I get this paid off, I'm able to then have another payment. So now I'm not, I don't have them both at the same time.

• 22:09Speaker 04

  Now, why is that 8% number so important, though? Can we talk about that?

• 22:13Brian Preston?

  Well, yeah, I mean, think about it, because not only are you going to have a car payment, realize, we want you paying cash for cars. That's the first thing we have to get past. We want you to pay cash, but we have a no hypocrisy policy. Where I know in the beginning of my financial career, I had to have a car loan. I couldn't pay cash, but I needed to have a job. So these things to make it work, the bridge that got me there was something like a 238, because I had to go take a loan. And what this does, the 20% down makes you have a little skin in the game. The three-year amortization, meaning you're going to pay it off within three years, is going to force you that you don't go beyond what your wallet or your purse can actually afford. And then the 8% is now going to work within all the other elements of your financial life. Think about housing is 25%.

• 22:58Brian Preston?

  Your car loan is 8%. We're trying to keep your total debt load below 35 to 40% at the maximum. Because what we want to do is make sure you can still save and invest for the future. You still have enough money to go bedazzle your basic life. If you go out there and you run up, you know, 50% for housing, 16% for your cars, and then whatever your student loans that you've been strapped with. Before you go look at and go, holy cow, there is not, it doesn't matter how opportun, you know, how good my career is or my job is currently, there is zero leftover for me. This is the component of discipline that we want you to structure your life so that you can actually live on less than you make. So that you can go ahead and start creating that margin

• 23:42Brian Preston?

  that given enough time creates the magical recipe of wealth.

• 23:46Speaker 03

  You know this weird phenomenon, phenomena, phenomenon that I've noticed recently that I didn't know was a thing?

• 23:53Brian Preston?

  Okay.

• 23:54Speaker 03

  Car shaming. You know what car shaming is? And I love this because financial mutants out there will so appreciate this. Sometimes financial mutants make the decision to drive a car because they could pay cash for it, or it was more reasonably priced, or it makes more sense for their family and their circumstance. And when you try to communicate this to the world around you, they look at you like you're crazy. Oh, why, why do you drive that car? That's insane. You should drive this, you should drive that. And I've had this conversation, no lie, at least five times in the last two weeks. I'm like, no, no, why should I drive that car? Why should we be driving that? Why should we change? The car that we have makes perfect sense for where we are and what we're doing.

• 24:37Speaker 03

  So for my financial mutants out there, don't let yourself be car shamed if you're making fantastic financial decisions with your automobile because they can be napalm for your financial life. Don't let the world try to tell you otherwise.

• 24:51Speaker 04

  Was that five different people that you had that conversation with?

• 24:53Speaker 03

  It was one dinner.

• 24:54Brian Preston?

  They all live in Bo's household.

• 24:56Speaker 03

  No, no, no.

• 24:57Brian Preston?

  We all think, this is, we just got insight into the battles that are going on in Bo's household right now.

• 25:04Speaker 03

  We went to a dinner, there were five couples, it was a birthday dinner the other night, five couples. It was nine versus one. Nine versus one trying to suggest to me what automobile we ought to drive.

• 25:15Brian Preston?

  Well, that's because your wife had primed the pump.

• 25:17Speaker 03

  Oh, yeah, yeah, yeah. She was the ringleader of the nine.

• 25:20Brian Preston?

  If y'all didn't know, Bo is still, you know, very functional minivan.

• 25:25Speaker 03

  It's so great.

• 25:26Speaker 04

  It's honestly really nice.

• 25:27Brian Preston?

  Really nice. And I think that there is a lobbying source in the household who wants to get outside of minivans.

• 25:34Speaker 03

  Oh, yeah.

• 25:35Brian Preston?

  That's what we, but we always knew the minivan in your, I, I knew, I'm sure Rebi did too. This was a pawn piece in a big chess game.

• 25:42Speaker 04

  Oh, for sure.

• 25:43Brian Preston?

  That has been played, but now that, that, a new piece is, is being played.

• 25:48Speaker 03

  Uh huh.

• 25:49Brian Preston?

  Yep. But I still, I do agree. I, I wanted to know what car shaming was because I, I do think it's one of those things where there's a time or place. It's back to cars depreciate. I mean, there's something, and look, I, I'm now at the stage where we drive nice cars, but I, I don't, I don't. I look at it and go, these things are consumption and napalm for your financial life because they depreciate like a rock. They cost a fortune to maintain. So go buy something that's reliable.

• 26:17Speaker 04

  Opposite car shames. Like if you're driving too expensive of a car.

• 26:21Speaker 03

  Yeah, that's right. That's the thing.

• 26:23Brian Preston?

  No, I'd rather somebody, I think in the beginning of your journey, the best thing you can do is be disciplined about the car you're driving. I still have the, if you ask me all the cars I've driven in my, my life, which ones still give me the biggest warm fuzzies? Now, there's an exception.

• 26:37Speaker 03

  The Cavalier.

• 26:38Brian Preston?

  The Jeep, the Jeep has an exception. You know, when I had that, because I was a season of life, that was more of a lifestyle of what I couldn't do at 16. Now I got to do as an older person. But that first car that I financed with the original 238, that Mazda 626 with five on the floor, and then it had the oscillating.

• 26:57Speaker 03

  We're also not sponsored by Mazda.

• 26:58Brian Preston?

  That oscillating, you know, vents, which I still don't understand why more car manufacturers don't put an oscillating vent. Think about every cool fan that you've ever had, like the fan I have in my office right now, I have a button I can put and the thing just, it rotates around left and right and it's kind of blows you here and then blows. The car did that. And I was like, this is the coolest feature I've ever had on a car.

• 27:21Speaker 03

  So Auto Manufacturing here that bring back the oscillating vents.

• 27:25Brian Preston?

  I love that Mazda. I thought it was the coolest car.

• 27:28Speaker 03

  I don't know how we got on this tangent.

• 27:30Speaker 04

  Just talking about cars.

• 27:31Brian Preston?

  You're talking about car shaming.

• 27:33Speaker 03

  We're wandering around in the woods.

• 27:34Speaker 04

  Bo was talking about car shaming.

• 27:36Brian Preston?

  Did you give a, did you give a Tumblr?

• 27:38Speaker 04

  I didn't. Kara W, if you get a Tumblr, if you would like a Tumblr, you get a Tumblr. Just email winner at moneyguy.com since we answered your question. All right. Next personal finance question is from Derek S. How do you determine if a three month or six month emergency fund is, is necessary for an emergency fund? My wife and I both have stable jobs and our home hopefully has gone through most of the major repairs recently. So how do they determine how much cash they need to have?

• 28:08Speaker 03

  Yeah, so this is one of those questions where personal finance is personal, but we can give you some benchmarks to think through. What we often say is, if you're someone, you mentioned, okay, you and your wife both have stable jobs. That's great. That's a solid indicator. The next question I'd ask is, okay, what does the income disparity look like? Is one of you a much higher earner than the other, or are you relatively equal yoked in your earning? And when you look at the living expenses your household has, what are those living expenses relative to either one of the individual incomes, right? If the answer that's, hey, we have a pretty modest lifestyle, we're both fairly equally yoked, we have stable jobs, then you may be one of those folks that a three-month emergency

• 28:51Speaker 03

  fund makes a lot of sense for. But if you're someone who's like, okay, well, living expenses are a little bit higher, we have a lot of fixed costs because we have mortgage, and we have auto loans, we're paying on student loans, and we have a couple of kids, and we have an income disparity, or it might be harder for one of us to find a job than the other, any of those that you answer in the affirmative would cause you to potentially expand your timeline out to that six-month of living expense timeline.

• 29:18Brian Preston?

  You laid it out nicely. I think that what I would always share is kind of where stage of life, too, is that I think somebody, when you're younger, even in that messy middle phase, like, let's just say a staff accountant. I mean, that's a great income, it's a stable thing. If you had two staff accountants that married each other, they both can probably be closer to three months because they check all those boxes you said. But if that staff accountant, fast forward 10, 15 years, and one of them now is the chief operations officer or the CFO of a mega corporation, and they have a very large salary, they're going to have to move probably to replace that income. If all of a sudden they got laid off. So

• 30:02Brian Preston?

  that's why the specialization, and that's why I see it all the time, like in my neighborhood, is that these are higher-earning people, sometimes their careers cause them, because there's just not as many opportunities, it's going to take longer to get that job. So that's why you need to, sometimes... The higher your income, the more scarce your, your skillset is, you probably want to go closer to six, maybe even beyond.

• 30:26Speaker 03

  Sure.

• 30:26Brian Preston?

  But for a couple that's in the messy middles and y'all are both, like you said, equally yoked and you're very close to your living expenses, the three months, you just had to go through the exercise. I actually detailed a lot of this also in Millionaire Mission. So you could go through the exercise of trying to figure out, you know, are you three months? Are you six months? But I, I know Bo gave a very good summary right there.

• 30:47Speaker 03

  And another thing, and people often forget to do this, but this is a great time to say this is we're coming up at the end of the third quarter, coming into the fourth quarter, sort of coming to the end of the year. One of our favorite things to do every single year is an annual net worth statement. We literally have a little celebration between the two of us when we do it and look at the numbers and it's so exciting. Uh, I would encourage you to do the same thing. Well, one of the things that you do every year, when you do your net worth statement, is you should review how much cash you have on hand. And as you're doing that, and as you're putting your cash on equivalents in that box on your net worth statement, I want you to think through, man, are our living expenses still the same that they were when we established that was our emergency fund?

• 31:27Speaker 03

  Because if you used to spend $3,000 a month, but now your living has expanded to now where you spend $5,000 a month, you want to make sure that your emergency fund represents that correctly. And far too often, people will have the emergency fund from a decade ago, not realizing it is not actually the emergency fund that they need in place today.

• 31:48Brian Preston?

  And then back to stage of life is that if you're somebody who's like about to land the plane in the next three to five years, you're going to see your cash reserves expand because just at retirement, you're going to go beyond three to six months too.

• 32:01Speaker 04

  Great. Well, Derek S., thank you for the question. Hopefully that helps you think through your emergency fund. And if you would like a Money Guy Tumblr, you can just email [email protected].

• 32:11Speaker 03

  A lot of people loving the Mario mug today. Just wanted to know, get some, get some comments.

• 32:16Speaker 04

  It is a good one.

• 32:16Brian Preston?

  I mean, I kind of, whatever I'm in the mood for, you know, I've been jumping back and forth. I have, of course, the Star Wars motif that I do with the stormtroopers and.

• 32:26Brian Preston?

  You know, blah, blah, blah, blah, you know, I don't know. Today was Mario.

• 32:30Speaker 04

  Why so not confident about it? I love the Mario mode.

• 32:34Speaker 03

  I'd be more excited about that.

• 32:35Brian Preston?

  All right.

• 32:37Speaker 04

  You guys are funny. All right, Brandon R. is up next. I'm being forced to relocate for work. Your guidance says to put 20% down on a house since this won't be my first house, but my wealth multiplier is above $15. Why no nuance on the 20% down for the second home rule? And that's true. So to recap, you like to say, put 3% to 5% down on your first home, but then on your second home, do 20% so you make sure you don't get out of your skis, right? So how should Brandon think about this?

• 33:13Speaker 03

  Yeah, I'd want to know, I want to know a little bit more specifics. Most often, when we tell people, hey, the goal is to put 20% down on your second home. It's because normally people make the decision for a second home because they are increasing lifestyle. I had the home that I started in, but now maybe the family's gotten larger, or I want to have a large, you know, I want to have a bigger yard, or I want to have whatever that thing may be. So it's literally a lifestyle decision that I want to upgrade and change homes. Well, if you're making a lifestyle decision, we want to make sure that you're making it the appropriate place in your financial journey. And that place is where you say, okay, I had this house that I put 3% to 5% down, and I likely have been in there for five to seven years because that's what I'm supposed to do when I buy a house.

• 33:56Speaker 03

  And over that five to seven year time horizon, the price of the house has probably increased. I've also been able to pay down the mortgage so that the debt has decreased. So I have a decent chunk of equity in this house. Well, the way that I make the decision to upgrade is, okay, I know that I have that equity plus any cash or capital I've accumulated. I can put 20% down on the next house. So it's okay for me to be making this lifestyle decision. Yours is a little unique, Brandon. I'd want to know some more specifics about your situation. For example, when did you buy this current home? Like, what were the, what were the details around the purchase of the current home that you're in? How long ago is that? Because if you bought- This home last year, but now you're having to move because of job change.

• 34:41Speaker 03

  There may be some extenuating circumstances that cause the mathematics to be a little bit different for you. But then the next question I would ask is, okay, this next home that you're going to buy when you move. Is it going to be a similar and comparable home to the one that you are leaving? Or when you buy the second home, are you upgrading? And I think that has to factor into the equation.

• 35:02Brian Preston?

  Well, here's what I think. He didn't say it, but I think Brandon is thinking this because he's having to relocate. And he already owns a house, but he's getting moved. I think he's thinking this is going to be his opportunity to become a real estate investor. Meaning that he'll go buy new house, leave his existing and start renting it out.

• 35:20Speaker 03

  He's going to sell it.

• 35:21Brian Preston?

  I think that's why he's asking the question because the, the natural assumption is that you would sell your existing home and use the equity of that. And anybody who's owned a home for the last three or four years has probably got the 20% just because of what happened with inflation and everything else. So this leads to me just putting on my inspector gadget hat is that he's, he's actually trying to keep the existing home. And, but he doesn't want to put down 20% when he moves into the new area. And, and that's why I want to give Brandon the, the why, because that's what he's asking for. If you look at the Fred data, meaning the data coming from the federal reserve on the typical American, and I don't want my financial mutants to be typical Americans.

• 36:03Brian Preston?

  All of their net worth increase is in their personal residence. You don't, when I see that like net worth of the typical American went up like 25, 30%. You're like hot diggity dog. Finally, people are saving, investing, they're watching the money guy show and you're like, nope. It's all home equity. Their actual financial assets did absolutely nothing different. There's a big risk sitting out there is that people don't start saving and investing.

• 36:27Speaker 03

  But wait till you see in an upcoming episode, what financial mutants do.

• 36:31Brian Preston?

  No, no kidding.

• 36:32Speaker 03

  That's a teaser. Keep going.

• 36:33Brian Preston?

  So Brandon, here's, here's why this is important to you. You just said your wealth multiplier is this. We want to make sure that you actually are, are doing what you're supposed to. Now you're going to say, well, Brian, that's why I'm asking if I can just put down 3% on the new house. No, what you're asking is can I be a real estate investor? Well, a real estate investor is step eight of the financial order of operations. So I just, look, we've had making a millionaires. You can get lucky and become incredibly wealthy doing things. We had a military couple that they had some additional subsidies coming from the government that they built up a tremendous net worth very quickly by never selling a house. And that is a very popular thing. But I also think that you can't sleep on the fact that you could take the $500,000

• 37:16Brian Preston?

  capital gain, if you're a married couple, tax-free, you know, use that with the new house, also use that to top off all the, you know, put down 20%, but take anything else to top off the financial order of operations. I'm not going to shy away from that because I like you building assets outside of just real estate equity. Because, and people are like, why? Because real estate's done so well historically. Real estate is very illiquid and it also is very, you know, capital intensive when things go bad. So I just want to make sure that you're not faking it and get caught swimming naked when the tide goes out, when real estate goes into the doldrums and you don't actually have any true financial assets to give you depth to get you through whatever might be

• 38:01Brian Preston?

  coming your way financially. Yep.

• 38:05Speaker 00

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• 39:00Speaker 03

  It's so funny. I didn't read that. I didn't, I did not read that.

• 39:03Brian Preston?

  What else would he be? If you already own a home because second, he wants to get, by the way, it's also.

• 39:08Speaker 04

  I think it's just hard.

• 39:09Speaker 03

  No, I think, here's what I think. I'm gonna, I'm gonna, I'll tell you what I think.

• 39:12Brian Preston?

  Okay.

• 39:13Speaker 03

  I think his job changed and he's moving out of this home before he wants to, but he hasn't been in there long enough to have built up 20% equity for the next one, right? He put 5% down and he's being, his hand is kind of being forced because of this relocation. But in his mind, because he's a rule follower and Brandon, I appreciate rule followers. He's saying, this is my second home. It's not my first home. It's my second. I gotta come up with 20.

• 39:38Brian Preston?

  We might give it the asterisk, you know, it's just like the government tries to give, has all these first time home buyer rules. And you're like, well, I owned a house. And you're like, Bo, you still might qualify as a first time home buyer. As long as, you know, there could be some crazy extenuating circumstances. Brandon, put in the comments, who's right though? Cause I, I still want to know, are you the woeful me, I bought this house 18 months ago and now I'm getting myself in a pickle of a situation? Or are you the potential real estate investor who's like, man, do you see how much I could turn this into rental property, out of state rental, which is less than ideal, by the way. I'd be curious to know what Brandon says.

• 40:16Speaker 03

  When you're putting in the comments, who's right, it's spelled B-O, not B-E-A-U. I just want to make sure you get that right.

• 40:23Speaker 04

  Oh, Hanson. Well, Brandon, as you're writing your comment and considering what Ryan and Bo have said, you can email [email protected] to get a Tumblr.

• 40:34Speaker 03

  Cause I just, I'm, I'm sitting here thinking, cause he, he asked it so nicely. He was, he said, hey, uh, but my wealth multiplier is above 15. Why don't I get so nuanced here?

• 40:45Speaker 04

  That's how I read it too. I guess we don't know for sure, but I read it.

• 40:48Speaker 03

  The wealth multiplier like leans it in your direction.

• 40:51Brian Preston?

  You can tell which one of us will be the disciplinarian in this, in this, with the kids popping them around.

• 40:57Speaker 04

  You guys are funny.

• 40:58Brian Preston?

  Waiting till your dad gets home.

• 40:59Speaker 03

  Yeah, you're Darth Vader around here. That's right.

• 41:01Brian Preston?

  No, I'm definitely not.

• 41:04Speaker 04

  All right. Well, this next question is for Brian. I mean, Bo, you're gonna have something to say too, but you'll see. This is a very Brian-esque question.

• 41:10Brian Preston?

  I'm gonna go grab a snack.

• 41:10Speaker 04

  No, stay here. Okay. It's from Eric1. It says, can I count my DVC Disney Vacation Club ownership towards the assets in my net worth? It was paid for in cash. Brian, you're the resident expert on Disney.

• 41:26Brian Preston?

  Oh, man. Don't use that word.

• 41:27Speaker 04

  You're also a net worth expert. What do you think?

• 41:31Brian Preston?

  Oh, man. Um, how do you value a DVC ownership interest? Look, I will say, out of all the, I don't love timeshares, as you can imagine. I mean, um, but the only one, unless it's in the Riviera, which, man, they, man, oh, man, did they screw up the Riviera, because that's such a beautiful property. Um, if you, if you're a Disney person, you know what I'm talking about. But, um, Disney Vacation Club is one of those unique things where it actually has done okay. Um, I will tell you, I have probably done three Disney DVC tours and, and always thinking, you know what, I am probably the person.

• 42:11Speaker 03

  Like with the intention to be.

• 42:12Brian Preston?

  Yeah. I have never pulled the trigger. I'm not a DVC member, um, even with all the perks, because it just, the thing, and, and that's not, is it A-Rich? How would you say that? Arch? A-Rich? A-Rich?

• 42:24Speaker 04

  I said A-Rick, but I didn't know.

• 42:26Brian Preston?

  That's not to say that it's not a good decision for your family. It's just that I didn't like, and it comes back to the root problem I have with all timeshares, is I don't like that they own my future decision-making with all the maintenance costs and those things. It, it doesn't matter, even if the property, or if, if there's an appreciation potential with it, there's an obligation sitting out there with what they can do with the maintenance costs, annual, ongoing maintenance, that just was a, a bridge too far for me. So that's why I was never able to hold my nose and, and get to the point that I could do, um, DVC, even just because it couldn't overcome that, that, that problem that all timeshares

• 43:07Brian Preston?

  have, is that they, they, they promise you this great vacation at a minimal cost, but as we all know in the background, what's going on is those maintenance costs keep going up every year and getting restructured, the capital calls, all that type of stuff, just makes it very expensive over the long term. And you don't get to just opt out. It's not one of those things where you, you cry uncle and say, I'm out of this. Now, you do have the potential where you can potentially sell. DVC, but because of all the caveats and because of the control that the market has an outside influence of Disney, because you know, if you go, if you've ever priced buying DVC property, you have to catch Disney when they're asleep, meaning that maybe that when

• 43:49Brian Preston?

  they're in, you wait for the world's worst time where Disney is struggling financially too, where they let some sleepers through on the, on the value where you could actually get, because they kind of control where the bottom is because they reserve the right to say, hey, if a deal's too, too good, Disney can step in and buy it for itself. So that's, I've given way too much, but it's.

• 44:13Speaker 03

  Can I dive in while, okay, I love all the Disney con. I'm trying to think through, because the question was, hey, can I put it on my net worth statement?

• 44:19Brian Preston?

  Well, the easy answer is no.

• 44:21Speaker 03

  Well, and I'm thinking.

• 44:22Brian Preston?

  It's more of a footnote for the obligation.

• 44:24Speaker 03

  And I'm thinking through like other things, other use assets that I might spend money on that may or may not show up on my net worth statement. I said, like a country club membership. Okay. I have a membership to a country club and technically I guess I could, I can, some clubs I can sell that when I sell the house or whatever. Should that show up on net worth statement? Ah, is there a chance in the future that when I sell the house, the membership associated with could go up in value? That's what they tell you when, when people get, get convinced to buy these. Okay. There's a chance, but is that, does that mean it's a net worth item? I don't know. What about ATVs, four wheelers, boats, other use assets that you have? Okay. Can I put them on my net worth statement? Sure.

• 45:06Speaker 03

  I can list them there. What I would be very, very careful of is I don't want to put anything on my net worth statement where the future outcome is not a high probability thing for me. It's like, I could put my investment accounts on my net worth statement because in the future, there's a high probability they're going to be worth more than they are today. I've got history that shows that. But if I paid X amount for a boat today and I'm going to use that boat and five years from now, I'm going to sell the boat. Is there a chance I'm going to sell the boat for more than I paid for it? Ah, is there a chance I'm going to pay more for this DVC property than I paid for it? So if I was gonna list it, at best, if I'm gonna put it on there, I'll put it on there at my

• 45:48Speaker 03

  cost, and then I'm probably not gonna increase it at any point in time. So that if it actually does turn into an appreciating asset at some point, the only time I'll ever recognize the appreciation on that is when I'm actually able to successfully dispose of it. So in my mind, I would not consider it an asset in that worst statement in the same way that I'll consider

• 46:07Brian Preston?

  It's a used property.

• 46:08Speaker 03

  It's a used property.

• 46:09Brian Preston?

  It's a used property, so it's more, probably more of a footnote so that your kids know what their obligation is if something happens to you.

• 46:17Speaker 04

  Yeah, that makes sense. So it's totally a rich one. I read it, Eric won. I'm so mad at myself, but it was all one word, so.

• 46:27Brian Preston?

  I did the same thing. You saw me, I was trying to phonetically figure out how to make this thing work.

• 46:31Speaker 04

  And then I was just like, I'm just gonna read it and go with it.

• 46:33Brian Preston?

  Have we heard from Brandon yet, by the way?

• 46:35Speaker 04

  We have not, that I've seen.

• 46:36Brian Preston?

  Come on, Brandon, what's going on here? I wanna know who's right, Bo or me? Is it me being like, oh, humbuggish and old man on the front porch, or is it Bo like, oh, what was you? Let's help you out?

• 46:48Speaker 04

  Well, a rich one, if you would like a Money Guy Tumblr, email winner at moneyguy.com.

• 46:53Brian Preston?

  So now I wanna know, a rich one, which property is his home property?

• 46:57Speaker 03

  What, what happened to Riviera?

• 46:59Brian Preston?

  They, you know, it's been a while since I did all my research on it, but, no, that's, that's one of, like, I love the, if you, the restaurant on top of the Riviera.

• 47:09Speaker 03

  That, the time that I went, isn't that where I stayed?

• 47:11Brian Preston?

  Did you stay there?

• 47:11Speaker 03

  Yeah, I'm pretty sure. It was, it was new? It's one of the newer ones?

• 47:14Brian Preston?

  Yeah, it's, it's new. It's nice. It's gorgeous. It's, um, but it's, um, they, they restricted, oh, gosh, you, you put me on the spot. I'm trying to remember, but they've restricted your ability to kind of, your marketer selling or using it for your, your, your, um, units on other properties or something. I'm totally blanking on what the, but there's a huge caveat that they only did it on the Riviera and it crushed the resale market on the Riviera time shares, that now, um, you know, you can get those at a much bigger discount because you're kind of locked in on that property versus a lot of the others you can trade out. And I think what Disney was trying to do, they got a little, little.

• 47:56Brian Preston?

  They, they, the market was so good on DVC. They're like, well, let's squeeze this a little, a little more in our favor. And I think the market kind of reminded them, hey, now there's, there's some things going on here. Somebody in the comments can probably, you know, who's closer, maybe even a rich one.

• 48:11Speaker 04

  Someone else said, if you resell Riviera, then new buyer can only use the points at Riviera. So it does sound like they're just like locking you in.

• 48:18Brian Preston?

  Huge restriction because that's what a lot of people will go buy at a cheaper property. And then they'll, you know, eventually use that to, for Grandfordian or other things, but they really restricted the Riviera, which was a very sad thing.

• 48:33Speaker 04

  Interesting.

• 48:34Brian Preston?

  Somebody, I knew somebody in the comments, because it's been a while since I've looked at it, you know, because like I said, I, I have been close enough to doing it that I back away and then long enough for me to forget what the catches are. And then I'll go back in and get all excited about it. And then I'll back away again and over research. But that's my personality is I over research and then forget, over research, forget.

• 48:53Speaker 03

  And at the end of the day. That's a great, that's a great, for those of you out there, it's a great mental accounting way to protect yourself from making bad purchases. Force yourself to do tons of research. And then if, at the end of the research, you still want to buy it, it's probably a good buy. And if not, it fizzles away and it wasn't.

• 49:07Brian Preston?

  I am not an emotional purchaser, but I am an emotional consumer, meaning that after I measure twice, cut once on something. And then when it works out well, I feel so much gratitude towards the exercise. I think sometimes the preparation and then the enjoyment are interconnected in that way.

• 49:27Speaker 03

  Rebi, I just saw a thing come through on the chat.

• 49:30Speaker 04

  Brandon has responded to the housing question. He said, are you ready?

• 49:35Brian Preston?

  Okay.

• 49:37Speaker 04

  Bo was right. I've been in the house for two years. He's been in the house for two years and I, and I don't have a lot of equity yet. So that makes sense. That is a tricky thing.

• 49:50Brian Preston?

  Brandon, I apologize. I misread it. I misread it.

• 49:53Speaker 03

  We don't ever want our, the money guy rules that we suggest as guardrails for you guys. We never want them to like harm you financially. So like, you've been in this house for two years, you put. 3% down, houses probably have not in the last two years gone up a ton in value. And you just haven't been able to pay down the debt a ton. And now you're having to move, probably want something you were planning on, job change, whatever. And you're like, man, okay, I'm buying a second house. I gotta do 20% now because that's what the rule says. That, that you're, you're missing the spirit of the rule in that, but I will tell you, there is a learning lesson here for you to take away, since I'm just gonna throw this out there.

• 50:36Speaker 03

  You bought this original house and you thought, I imagine you went through this, this thing, hey, I'm gonna, I'm gonna be in this house for five to seven years at least, and I can make the decision. And then that changed. Now you're moving to a new area. I would wonder, are, are you familiar with the area? Do you know the traffic patterns? You know, the parts of town you want to be in? Do you know the school? Like all those sort of things. It is not uncommon. And we see, we have clients that do this all the time, and I think it's a great idea. If it works for your family, there's nothing wrong with selling your current primary residence. Make sure you go ahead and like, take care of that transaction. And when you get to that new community, man, can I rent for six months to a year? Just to kind of figure out where I want to be and to make sure that I love this job. And I'm gonna be here for the next five to seven years.

• 51:20Speaker 03

  Cause what I want to do is, there's a really good chance that based on what you put down and what your closing costs were on that house, you may not have even like broken even at this point on the transaction cost to acquire the first home. So you want to be careful not just rinsing and repeating that if you're not somewhere that you're actually going to be able to be for the next five to seven years.

• 51:40Brian Preston?

  Well, I mean, I don't mind giving the additional context that I think that you gotta get out of the first transaction so that we can level set back to zero. Because I wouldn't want you, even if I gave you the asterisk and said, hey, since this was less than two years, you're kind of in this unique situation, you could go do three to 5% on the next. Because now you're gonna have two highly leveraged pieces of real estate outside of your control with a brand new job. This, this is a horror story writing itself. But if you can level set, get out of the old property, rent like Bo said. I do think that there's probably some grace just in the fact that. You never really got to live in the house. The rules are designed for you to live in that primary residence for five to seven years because guess what happens over that five to

• 52:24Brian Preston?

  seven years? No matter how bad your timing is, typically the time is going to be the cushion that protects you to where equity is building because of just inflation and other thing you paying down principal, you kind of have gotten caught. And that's why we do have that five to seven rule, year rule in there. So you can level set and then probably give yourself an asterisk to kind of, once you get it back to zero, restart the process, but don't, don't, and by the way, don't do, don't restart the process if you can't promise yourself that you go be in this area for five to seven years. If there's any chance to go relocate you again, then you've got to probably, you know, consider rent. It used to be corporations and others used to have these guaranteed or

• 53:08Brian Preston?

  protection programs. I knew a lot of Caterpillar executives that they, they would buy your house or pay you, make you whole on any negative equity. The great recession ruined that for everybody. Because now these corporations realize, oh my gosh, we cannot make that promise. There's a big risk. Real estate doesn't just only go up. So that, that game has changed completely. So you now need to, it puts more and more pressure on you, the, the potential homeowner to make sure you go through our checklist, go to money guy.com slash resources. Make sure you can fully and confidently go through that checklist so that you don't get caught in a situation, get moved way too soon.

• 53:46Speaker 03

  Love that. We went back and answered a question.

• 53:51Speaker 04

  But that's okay. Brandon gave us specifics. I loved it.

• 53:54Brian Preston?

  I had to triage it because I'm over here just popping Brandon around.

• 53:57Speaker 04

  He wants to be a real estate investor.

• 53:59Brian Preston?

  I thought I liked Brian.

• 54:00Speaker 03

  I just took a new job.

• 54:02Brian Preston?

  So shame on me. That's where trying to read between the lines. That's where the personal and personal finance really kicks in.

• 54:09Speaker 04

  For sure. Yeah. Thanks for sharing, Brandon. Glad that you chimed back in. All right, next question is from DeSante. It says, "Our army of dollars have been working hard for years, and we know we can stop saving and investing so much, but it's hard to slow down. Any advice on starting to wean, on start, to start the weaning process? Any advice on that? How do they slow down? How do they know it's time? How do they get used to that idea?"

• 54:38Speaker 03

  Well, first, here's, here's the exercise. And were there we's in here? We's and us's? Okay, yeah, so I'm gonna assume there's like a, a, a family unit here, or, or a couple. Here's the first thing I would do, and this is an exercise I've worked through. I would take all the money out of the equation, like completely forget about money, and let's assume that money was no object at all. You have all the money in the world to do everything in the world you want to do. What are some things you would do? Oh, okay, well, well, we would travel. Or, man, you know what? We'd redo the floors in the kitchen. Or, man, we'd really like to redo that backyard. Or we'd do the, do, do, do, do. And I want you to list out all the things that you would do if money were no object. And then I want you to go through, and I want you to kind of just mark through

• 55:22Speaker 03

  the things that are unrealistic if money is an object. Meaning, oh, you know, we would travel the world for 365 days. Okay, maybe that doesn't make sense based on current projections. Mark through that. But, man, redoing the hardwoods in the house, we could, and I would list those things. And then what I'd do is I'd figure out what that list looks like, and I'd have my list of eight to 10 things and be like, okay, is the way that I'm saving right now, this aggressive savings rate I have, that I'm gonna assume is much higher than 25% of your gross income, is it causing me to miss out on other things that I would like to be doing or that I would like to experience? And is the sacrifice that I'm making absolutely necessary? Or is there a world in which I can still save at the same,

• 56:08Speaker 03

  at the 25% or whatever the necessary savings rate is for me to hit my number, and still be able to do the things today that I would like to do? Because far too often, and we see, I don't want to call it a horror story that's too aggressive, but we see far too often, Brian, there are folks that defer, defer, defer, defer, defer, defer, and they get to 60, and they've got this huge pile of money, but then you look back and like, man, I wish that I would have done that trip in my 30s. I wish that we would have done the family vacations. Man, I really wish that we would have. Done the backyard, so I could have spent time there with kids while they were in the house. You don't want to have those kind of regrets. And so you want to make sure

• 56:49Speaker 03

  that you're not sacrificing all of today for tomorrow. Because the beautiful thing about compound interest and wealth building is you only have to sacrifice a little bit of today. If you can do it early and do it for a long time period. It's the folks who don't do that that have to sacrifice a lot of today for a great, big, beautiful tomorrow.

• 57:09Brian Preston?

  Look, I'll put it down like this, is that the easy answer is always tell people, you have to take inventory of where you are. This is why we talk about the net worth tool. This is why we talk about know your number, that resource that we have at learn dot money guy on that of just going through the exercise because you're trying to figure out you have the curve, behind the curve, or right where you're supposed to be. But also, what comes into play is where are you at in this journey? Because what I don't want to, look, we've done the millionaire, we've done our financial mutant survey, and we can't wait because we're actually recording that content.

• 57:37Speaker 03

  It's gonna be awesome.

• 57:38Brian Preston?

  Later day, and it's fabulous. You guys are phenomenal. But what I struggle with is financial mutants. So many of you guys are in your twenties and thirties, and you're right there close to the starting line, and you're crushing it, absolutely crushing it. But just because you haven't been in the journey long enough, your army of dollar bills just haven't reached that bowling point of having enough time to build traction or to reach the critical mass. So I always tell people, it's kind of a balance here. If you would lay out, you know, the wealth multiplier, look at all the multiples of, you know, for a 20 year old, a 30 year old, a 40 year old, a 50 year old, you'll quickly start to realize

• 58:20Brian Preston?

  that for twenties and thirties, it just hits differently than for somebody in their 40s or 50s. And where this played out in my life is, I told my wife is, look, if we could save and invest 25% of our gross income, when we get in our 40s, we'll be able to take our foot off the accelerator. And that's a choice at that point, do you actually do it? But you're at the actual point, you can do it. And the question you then ask yourself is, are we maximizing all the memories and things so I don't have regret when I'm in my 40s, 50s, and 60s and beyond? And I'm happy to report, I have zero regrets. I mean, I'm actually in the situation now where money just doesn't do as much. And that's what I talk about when I think employees are worried about

• 59:02Brian Preston?

  go sell the business or anything like, well, what can money do? What can an extra dollar do for me today? It's just not the same thing as what a dollar could do for me at 20s or 30s. So I'm insulated from the money stuff. And I get to it's a fabulous place to where you get to make decisions because of what you want to create or do in life with your family, with your friends, with with the Money Guy Show, with with our audience. That's what I want you to be able to maximize that as well. Because I think, you know, I've had so many financial mutants that write me that they're in their mid 40s, and their family hates going on vacation with them because they're doing

• 59:42Brian Preston?

  it so cheaply. I don't want you doing that. But I also don't want you living your fabulous 32 year old life, just because you got a big promotion, and you're making now 150 to 200,000 dollars a year. But yet, you're if you looked at your investable assets, you haven't even reached one time your annual salary yet. You're too close to the starting line, you know, so there's a balance here that we're trying to give you all the variables so that you can be the field general that navigates this well. But hopefully through those things, because if you lay the wealth multiplier, and then look at the timeline of happiness and satisfaction by age, you'll quickly

• 1:00:21Brian Preston?

  see that you have a journey there that you can fill in and put the personal in personal finance. But there's a path. And that's what we've built it with the Financial Order of Operations. We've built it with all the experience shares that I put in Millionaire Mission. Because I think you'll see that we have given you the guide that not only maximizes the math, but man, oh, man, am I a sentimental millionaire, where I'm trying to make sure you get to learn through what we've experienced by helping so many other millionaires with their journeys of there is a better way to do money. And we've tried to climb the mountain and shout it out to as many people as possible. Because what's funny is we went to I always screw up the title because I always want to say press publish, press publish.

• 1:01:05Speaker 04

  Mm hmm.

• 1:01:06Speaker 03

  Press publish.

• 1:01:06Brian Preston?

  So we went to that, that, that, um, that, that meetup conference. I don't know what you call those things where you get to meet up with other YouTubers. And it was funny is I never remember anybody's names, but there was some guy who was like an early YouTuber. Rebe's gonna be able to tell us who it is. And his whole presentation was is how rich he got, how young he was, and how he got there and realized how empty it all was. And, um, and he was basically like, turn around, go back. You got, there's more to life than this. And I think that that's what we have tried to spend a lot of time is helping you make sure you don't sleep, sleep through the phase of maximizing and making the wealth, building the wealth through compounding interest, but also that you're not a miser. So you get there and

• 1:01:50Brian Preston?

  realize how empty it is if you haven't done the right work.

• 1:01:54Speaker 03

  Love that.

• 1:01:54Speaker 04

  Love it. The YouTuber was Casey Neistat. I do feel like people might know that. So since you said I should say it. Um, that was fantastic.

• 1:02:02Brian Preston?

  I don't know who anybody is. I didn't know who Sir Richard Branson was.

• 1:02:06Speaker 04

  If we did. You did.

• 1:02:07Brian Preston?

  And by the way, he came to the table while I was in the bathroom. So I didn't get a picture. So it's okay. If you want to know, why doesn't Brian have a picture with Richard Branson? It's because I was in the bathroom. It's all right. That's the way it should be.

• 1:02:19Speaker 04

  I love that. Well, DeSanche, if you would like a Money Guy Tumblr, just email winner at moneyguy.com. Like Brian and Bo said, we are so excited because we are very soon going to be recording the exciting content that we are doing based off of the survey that you so generously took part in. Um, we broke our records from last year. We have so much great data and I'm really, really excited. So first of all, be sure you're subscribed to the channel. So you'll see when that episode comes out. And also if you took part in the survey, we'll be emailing you like a special note to let you know, hey, your data, like everything that you shared, your voice, it was, it was used to shape this episode. So

• 1:03:01Speaker 04

  watch your inbox and subscribe to the channel and be excited because that episode's gonna be great.

• 1:03:07Brian Preston?

  Man, I felt like we, we had a good time today. I, I definitely had a good time. We have a lot of content to record even after this live stream ends, but we don't, I think, you know, amazing day. It crossed 600,000. Uh huh. I mean, it's, I mean, we're about to record the, the Financial Mutants Survey and you guys showed up in force with so much so that we're even going to include it in the title, likely. I mean, as we're brainstorming this as we speak. Um, thank you. Thank you. We don't take this for granted. I mean, when people come and do studio tours and when we meet you out in public, hopefully you can tell from our expressions that this is, my heart just beams with happiness because this is so far beyond what we ever imagined.

• 1:03:49Brian Preston?

  The educator in me is just so tickled that, that Bo and I have created something and the rest of the content team. It's, it's truly magical and you guys are a big part of it. You are the heart of making that possible. Um, so I thank you for that. So please take advantage of all the free stuff. We, we're trying to load you up on purpose. If you go to moneyguy.com/resources, we'll love on you, give you tons of free stuff because we know if you do what we say and, and follow the lead of what we're trying to do, just the success will create complication and that leads to the next part of our relationship. You get to take it to the next level. Consider fulfilling the abundance cycle with continuing to work with us as in the professional capacity where we get to now personally know you and

• 1:04:32Brian Preston?

  turn the personal into personal finance. I'm your host, Brian, Mr. Bo Hanson, Money Guy team. Out.

• 1:04:39Speaker 03

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

• 1:05:12Speaker 06

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