The Playbook to Build Wealth With An Average Income

We're kicking this week's livestream Q&A with a bang - and a mullet. That's right, Brian broke his ban on costumes for an April Fools' special! While we like to have fun, the wealth building strategies in this episode are still serious! Our opening segment focuses on how to do the right things with an average income. Then we answer your financial questions - including a rapid fire segment that brings the heat! ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠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. ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠DRINKAG1.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.

• 0:00Speaker 00

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• 0:31Speaker 01

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• 1:04Brian Preston?

  The playbook to build wealth with an average income.

• 1:08Speaker 03

  Brent, I am so excited to talk about this because we say that building wealth is available to everyone and we really do believe, we really do believe that, we really do mean that. And there's a lot of people out there that don't have huge incomes, don't have the six-figure incomes. And we think that even if that describes you, even if that's where you are right now in your financial journey, it is still possible for you to build meaningful wealth.

• 1:32Brian Preston?

  So let's reach people where they actually are. If you look at where the median income is per household here in the United States, it's a little under $84,000. Now, look, I get it because we used household. So that means for if you're married, that's two people. Yeah, it's gonna be tough and a lot of people are gonna be out there telling you, you can't do it at all. I think you can. It is doable if you have a plan.

• 1:55Speaker 03

  Yeah, you have to understand, if you want to win the game, you have to describe for yourself what winning looks like. You have to decide, okay, this is what the number looks like for me to be able to live the life that I want to. Live on my terms and do the things I want to do and and we got to give credit where credit's due. The fire community has done a wonderful job of this. Once they know what their objective is, once they've defined what the goal is, what the win is. They're able to really dive in and able to like stay sort of laser focused on moving in that direction. But I think the average American hasn't quite figured that out.

• 2:34Brian Preston?

  Yeah, I remember we did a making a millionaire with Danielle and this is the thing, I love this idea that she had where she was doing coast fire. Where we were like, hey, you can do this where, hey, why don't we show you what you need to save and be hot and heavy with the discipline? So that you can down the road, take your foot off the accelerator and actually make this retirement and this financial plan work.

• 2:57Speaker 03

  And what what we showed her was like, okay, once the objective was clear, like once we said, okay, this is what you have to do. And if you do this, then you'll end up here. It made it much easier for her to think, okay, I can execute and the same is true for you and your financial life, whether you're someone with a high income or low income, but we want to specifically speak to those folks who maybe feel like things are tight right now. Things aren't, uh, there's not a ton of excess sitting around when you think about where your earning power is right now. We want to kind of walk you through what the plan looks like and how you should think about it. And we thought about a little, a little bit of a sports analogy because uh, we think that when it comes to, especially if you have limited resources.

• 3:41Speaker 03

  The thing that you have to focus on first, and this may be a little bit counterintuitive. Is you have to focus on defense. Now, it may not be sexy. It may not be super exciting, but you've heard the expression, defense wins championships. Well, that's true when it comes to your personal finances as well.

• 3:59Brian Preston?

  Well, the first thing in defense is your emergency reserves because this is the margin for making those desperate decisions. They get you into debt, get you high interest credit cards and all the other bad things that lead to you being stuck and not getting out of the starting blocks of building wealth.

• 4:15Speaker 03

  Yeah, you need to define, okay, what is my emergency fund? Is it three months? Is it six months? How do I decide and then how do I get that in place? Cause exactly what Brian said, if you don't have that first step in place, it's really easy for you to get derailed. Now, the other, the next thing when it comes to defense, and this is one that we want to make sure, especially at lower incomes, it becomes, uh, it becomes tempting to try to skirt this one or try to get around. We've seen young people that really like to kind of like to fly naked, uh, not, not fly naked, uh, swim naked. When it comes

• 4:48Brian Preston?

  Skinny dip?

• 4:48Speaker 03

  Yeah, they like to skinny dip when it comes to health insurance. But we know that a lot of bankruptcy and a lot of financial, financial failure is due to medical expenses. Unknown unknowns coming your way. So we want to make sure that if you have a low income, don't just decide, okay, I'm going to go with the cheapest health insurance possible. Have the highest deductible possible because it does you no service if you have a health insurance plan in place, but it has a $15,000 deductible. There's no way you could even possibly meet that deductible. So make sure that you're not making foolish decisions. Maybe you're doing it from a noble place. You say, I want to really fund an HSA and I want to take advantage of that. But perhaps HSA is not the high deductible plan is not the best fit for you.

• 5:30Speaker 03

  Make sure that you're figuring out how to navigate the, the health insurance side of your equation.

• 5:36Brian Preston?

  Well, and then this next one, all right, all right, is having reliable transportation. Because look, I know that looking cool is important, but that's not actually what's going to build your first million dollars.

• 5:48Speaker 03

  That's exactly right. We know that, uh, cars can be financial napalm. That's why we have rules in place like 238 to make sure that you can stay inside the guardrails. And, and when you think about staying inside the guardrails, one of the single best things you can do, and it doesn't sound sexy. It doesn't sound super exciting, but especially if you have a lower income or limited resources, you have to figure out how to budget. How do I put together the matrix of where my dollars should go? And how do I stay inside those confines? Cause if I don't know where my dollars are going, I can't know if I'm wasting them, if I'm putting them in the right places. And once you put down the budget and then once you begin tracking your expenses, it becomes a little more

• 6:30Speaker 03

  Clear. Okay, this is where I can cut. This is where I can save. This is where I can triage my financial situation to hopefully get to move into the offensive.

• 6:37Brian Preston?

  Well, I mean, the reality is 83% of Americans say they overspend. So if you're not at least keeping track of what's going on, how are you ever going to get ahead and actually own that discipline that creates the margin so that you can actually put that money to work?

• 6:51Speaker 03

  And once, once you, okay, so once you've mastered defense, now you can think about the offensive side. What are the things that I can do to now start positively impacting my financial life now that I have sort of the risks in the defensive side covered? And the first thing is this might be the easiest time ever to figure out how to increase your skill set. Whether it be through advances in technology, whether it be through blogs, podcasts, articles, YouTube channels, whatever it may be, there are ways that you can increase your skill set, further your education, and ultimately hopefully make you more valuable either as an employee or potentially as an entrepreneur.

• 7:32Brian Preston?

  And then always try to find the, the edge. How can you make yourself stand out? And that way you can monetize that expertise and that skill set that Bo just talked about.

• 7:41Speaker 03

  And once you've figured out how to, how to monetize that, then we want you to really think through how do I, how do I be opportunistic?

• 7:48Brian Preston?

  That's right.

• 7:49Speaker 03

  How do I find the places where I can insert myself to give myself the highest likelihood, highest probability of a positive outcome? And this might mean changing jobs, looking at a different company. It might even mean changing geographies. I need to move to a different city or a different town where there are more opportunities. If you can sort of hone in and figure those things out as you've increased your skill set, figured out where the monetization opportunities are, and then capitalize on those opportunities, it puts you in a position to begin building towards the future.

• 8:18Brian Preston?

  It lets you keep the business up front and the party in the back, if you know what I mean, too.

• 8:25Speaker 03

  That's right. That's right. If you can keep the business up front, it allows you to keep your foot on the gas. It allows you to say, okay, I've done the hard parts. I've found the triage. I've created the margin. Now what I'm going to do is I'm going to start devoting myself to doing the right thing and continue to plow forward. And it's amazing that even if you don't have a huge income, if you don't have a ton of margin, a ton of resource, but you have a lot of time, even a little bit can do a whole lot for you. It's why we even talk about for a 20 year old, $1 has the ability to turn into $88 by the time that you retire. So if you can start early and stay consistent, even at low incomes,

• 9:07Speaker 03

  even with little margin, you can still build meaningful wealth over the long term.

• 9:13Brian Preston?

  So did you cover keep your foot on the gas?

• 9:15Speaker 03

  That was what I just said. That was what I was going through.

• 9:17Brian Preston?

  So guys, now look, if you want, I was hoping, I was like, cause look, I was like, how am I going to keep this straight is because this was all, I walked in the studio at, at 9:50.

• 9:29Speaker 03

  Yep.

• 9:29Brian Preston?

  And on our microphones was the mullet, the sunglasses and the chain.

• 9:36Speaker 03

  The mullets, mullets are back. Mustaches are back. I think aviators never went out and I guess gold chains are back. You, you look, you look pretty hip right now.

• 9:45Brian Preston?

  What the why? Cause you have to know your why. Is the admin team, I think they thought we were, they were going to pick on us because they had this sitting here. Now I picked it up and embraced this. Now I think you honored the fact that you said, Brian, I can't remember if it was a year ago, two years ago, you go, we're never doing costumes again. We swore off costumes. They don't help their gimmick. And I was like, all right, all right. Let's get in on this thing.

• 10:07Speaker 03

  And you said, let's dive right in.

• 10:09Brian Preston?

  So now look, I did, cause it is, it is a thumbnail day, which is the only thing I had to commit to this. So we probably have messed up the hair. So we'll see how this goes.

• 10:18Speaker 03

  Can you imagine if we did all of our thumbnails for the next month or so?

• 10:23Brian Preston?

  Did I screw it up? I mean, did it, it was still pristine. Okay. Ken gives me the thumbs up.

• 10:27Speaker 04

  I think you should just keep the glasses and the necklace on.

• 10:29Speaker 03

  I think so too.

• 10:31Brian Preston?

  All right. I don't know. Okay. Okay. We'll, we'll roll with this. This is. I can't grow a mustache, but I can sure wear some glasses.

• 10:38Speaker 03

  You can wear some glasses and I love.

• 10:40Brian Preston?

  By the way, if y'all didn't know, Bo is growing his stash out. I can't unsee it now that I see it. And y'all know that is a pet peeve.

• 10:46Speaker 03

  It's coming. It's summer. Hey, look, it's summertime. It's time for, uh, bare feet, shirts off, mustaches.

• 10:55Brian Preston?

  Oh, y'all should know, there was a whole outfit for Bo too. He just too cool for school. He didn't want to embrace.

• 11:01Speaker 03

  It wasn't too cool for school. I just felt like we needed some sort of balance, you know, yin and yang is what we like to. We love to be able to create balance. We like to restore order to the financial chaos in your lives. It's why we like to show up here every single Tuesday at 10 a.m. So we can load you up. We want to answer your questions and speak to the things that you care about. It's why we have the team out in the wings right now, collecting your questions. So if you have a question that you want to weigh in on, you want us to weigh in on, you want to get our take on something. You want us to speak to your situation, make sure that you get it in the chat. That you get it in the chat right now, because we really, we really do believe that there's a better way to do money. Are you stopped? I thought you were gonna come.

• 11:45Brian Preston?

  I mean, I wanted to, because we're gonna, we're gonna turn this into stuff.

• 11:47Speaker 03

  I figured we were this far in, we should, Ruby, didn't you think?

• 11:51Speaker 04

  I thought he might do it. Yeah.

• 11:53Speaker 03

  I honestly thought this was like a new you. I thought that maybe this would be.

• 11:56Brian Preston?

  It might be a new you with gold chain. Is this thing?

• 12:00Speaker 03

  Can't get the chain off.

• 12:01Speaker 04

  Okay, I was unaware that you have officially sworn off costumes.

• 12:05Brian Preston?

  Well, I think it was an unspoken rule. I think especially when I had Bo in the Robin outfit and I was wearing Batman.

• 12:12Speaker 04

  I feel like that really.

• 12:12Brian Preston?

  I probably had cast the die that this thing was dying.

• 12:15Speaker 03

  I think we did 12 costume episodes after that one. I'll tell you what, the pandemic was a real, it was a real.

• 12:22Speaker 04

  It was around 2020.

• 12:23Brian Preston?

  It was probably Tiger King.

• 12:24Speaker 03

  It was a real adventure.

• 12:26Speaker 04

  We had done some before.

• 12:27Speaker 03

  Yeah.

• 12:27Speaker 04

  And we went through a phase.

• 12:29Brian Preston?

  I think that's Mac. Why does it stick?

• 12:31Speaker 03

  That's how you know it's real.

• 12:34Brian Preston?

  So we must have, we have magnets or something over here.

• 12:37Speaker 03

  Uh, so with that, creative director, Ruby, I'm gonna throw it out.

• 12:41Speaker 04

  Yes, no, I have some great questions queued up. Keep dropping them in the live stream chat.

• 12:45Brian Preston?

  Admin team did that because April Fools is tomorrow and they never let a day early keep them from doing something fun.

• 12:51Speaker 03

  That's right.

• 12:52Speaker 04

  That's right.

• 12:52Brian Preston?

  And if you knew, if you've come for a studio tour.

• 12:54Speaker 04

  There was a lot of talk about mullets last week.

• 12:57Brian Preston?

  Yeah.

• 12:57Speaker 04

  And Brian in a mullet. There were some AI images of Brian in a mullet. So they just wanted to see it in real life.

• 13:02Speaker 03

  Did we, did we release the AI Braveheart, the Brian Braveheart?

• 13:05Speaker 04

  Oh, yeah.

• 13:05Speaker 03

  That was awesome. Hey, by the way, if you're.

• 13:07Speaker 04

  You're on our email list, you saw it. If you're in the Moneyverse, you saw it. It's out there.

• 13:11Speaker 03

  If you're curious.

• 13:11Brian Preston?

  I didn't see it on Tom's cover. Sexiest man alive. Is it, is it, are we still on, are we on the come on that?

• 13:15Speaker 03

  Have they gotten back, have they gotten back to us yet? I think we submitted. Okay, that's right. Um, if you wonder if this is an awesome place to work, it is. This is the kind of, these are the kind of shenanigans we do. And if you are someone who's out there looking for a work home, we have a few positions available. Ruby, where can they go to check out our available positions right now?

• 13:34Speaker 04

  Go to moneyguy.com and click on join the team, I think it says. Shoot, I'm gonna just double check. I'm telling you the right thing. Um, about and join the team. And we have all kinds of, I mean, we really do have all kinds of positions listed right now.

• 13:46Speaker 03

  We do. We need advisory. We need administrators. We need editors.

• 13:50Speaker 04

  Um, editor, writer, looking for some high quality, amazing team members who love Money Guy and personal finance. So go check that out if you're looking for a job. Um, okay, we do have some questions queued up. Let's start with egg, bacon and cheese, K7N.

• 14:07Brian Preston?

  By the way, you knew, Bo earlier.

• 14:09Speaker 04

  Oh, no.

• 14:09Brian Preston?

  Bo earlier asked for 10 scrambled eggs. So egg, bacon and cheese, you have no idea what you're doing to Bo right now.

• 14:16Speaker 03

  I'm so hungry right now.

• 14:17Speaker 04

  He legitimately did ask me to find him 10 scrambled eggs, but I was working, so I didn't. Sorry. Maybe that was my work. I don't know.

• 14:25Brian Preston?

  We need to hear the question though.

• 14:26Speaker 04

  Okay, the question says.

• 14:28Brian Preston?

  Bacon, egg and cheese.

• 14:29Speaker 04

  The question says, "Hi team, what is your advice on taking for retirement, taking from retirement accounts to buy a home? I am 40 years old, 104K gross income, single, 450K in retirement accounts. I will be in this home for more than five years." So we are starting off spicy. Should egg, bacon, cheese, bacon and cheese take from his retirement accounts to buy a home?

• 14:54Speaker 03

  What are our thoughts on taking? We don't like it. We know that there are certain provisions and certain rules where you can pull out certain money and be able to use it for that. But retirement accounts are there specifically for a thing, and that thing is your retirement. So if you and I were sitting down having a conversation, one of the questions I'd want to ask you is, "Okay, what other resources do you have? Is there a way, perhaps we maybe don't pull money out of retirement, but is there a way we could adjust our savings rate? Can we go back in the financial order of op-" Brian, can you hold the thing up for me? Maybe we've been in step five, step six of the financial order of operations, but perhaps we want to go back to step four so that we could begin building up so that we'd have a down payment, so we'd be then be able to use those dollars to acquire the home.

• 15:38Speaker 03

  And then I want to go through all the whys of homeownership. You said you're 40, you got 104,000 dollar income, 450,000 in retirement. You said you think you're going to be in the home for five years. I want to talk a little about that and ask the question, "Okay, why homeownership? What is, what's the reason behind? Is it just because this is the next box that you want to check? Or is there some other thing that's driving that decision making? I'd want to dive into that.

• 16:02Brian Preston?

  Well, you know, based it off, I come from a public accounting background, you always see T charts, you know, pros, negatives, and you kind of put the debits and credits in their places. And I start looking at this, and I know what you're thinking. You're like, "Hey, this is a big pot of money. I want a house." That's a positive, access to capital. But then on the cons column, look, any of this money, especially if it's traditional retirement money, there's some big friction cost to getting this money. Not only do you, now look, a small portion of it you could get access to. And not have the 10% early withdrawal, but you're still going to pay income taxes.

• 16:43Brian Preston?

  But then the majority of it, you would even have the 10% penalty if you really want to go whole hog on this thing and really load it up. And so that's a negative. And so there's a lot of transaction costs to get access to your money is big tax headwind. The other thing is, is you need this money for retirement. I mean, you're slightly ahead of the curve if you just think about the fact of you do three times your income, you're slightly ahead of the curve, but that's actually should be something that creates a wind to your back for the future because that means your army of dollars now are starting to get its separation where they compound on top of each other. Because remember that walk towards your first million, you're essentially potentially going to gut it if you start using that money right now.

• 17:26Brian Preston?

  This is when all the magical stuff happens. So that's another negative is that you actually need this money for financial independence in the future. So I would strongly encourage you to figure out, can you really afford this house? Or are you trying to force it by going out there and making your retirement accounts leaky? And I know that we've done a lot of stats and research on the fact that the majority of Americans, this is a trap that they fall into is that they go and raid their retirement accounts to fund a house, to fund a car, to fund a swimming pool in the backyard. And I'm telling you, don't do it because your future self will thank you for the discipline. Find another way to get into this house so that you can live your best retirement.

• 18:08Speaker 03

  Yeah. And if buying a house is, so you've kind of gone through the checklist and you've answered that, I would encourage you to go to moneyguy.com/resources, play with our home buying calculator because you've already told us your age, you've already told us your income, you know that when it comes to buying a first home, we subscribe to 3525. You don't have to put 20% down, you don't have to put 3% down, so long as you plan on being in the house for at least five years and the total housing costs don't exceed 25% of your income. So just kind of thinking through this logically, $100,000 income, $25,000 housing cost is kind of where you would be. And so I would use the calculator to back into, based on that number, how much house could I afford and how much down payment do I need to save? And it may not be super difficult to save for that down payment at

• 18:51Speaker 03

  3%, depending on the price of the home you're looking and not having to tap into the retirement accounts to do that.

• 18:58Speaker 04

  Well, egg, bacon and cheese.

• 18:59Speaker 03

  Delicious.

• 19:00Speaker 04

  Guess what? It's your lucky day because it's Tumblr day.

• 19:03Speaker 03

  Let's go.

• 19:04Brian Preston?

  Nice.

• 19:05Speaker 04

  So, since we answered your question here on the show, we would love to send you a Tumblr. Just email [email protected].

• 19:11Brian Preston?

  Oh, man.

• 19:12Speaker 03

  Could today get any better?

• 19:13Brian Preston?

  It's almost too much for people to handle. Bambo's stashing it up. Stash it up.

• 19:18Speaker 03

  We're coming.

• 19:19Speaker 04

  It's a good day. All right, I'm gonna move on to the next question, but if you haven't yet and you want to be part of our rapid fire segment, please submit your rapid fire questions into the chat. Just put RF at the beginning and they will be considered for our rapid fire. It does not depend rapid fire segment where Bo and Brian will answer your questions in 30 seconds or less and they cannot say.

• 19:43Brian Preston?

  Can I ask a question?

• 19:44Speaker 04

  Sure.

• 19:44Brian Preston?

  I guess I should raise my hand.

• 19:46Speaker 04

  Oh.

• 19:46Brian Preston?

  Is it Benson Boone? Why, why, why is the stash craze catching on? Cause I mean, go to church Sunday. When your pastor shows up with a stash, you know that we have reached critical mass for, for maximum stash hood. And I'm just trying to figure out where we go as a society from here.

• 20:03Speaker 04

  I didn't notice any particular.

• 20:06Brian Preston?

  I mean, who do I blame? Who do I blame for this? I'm just, I'm all behind the front porch, yelling at the sky.

• 20:12Speaker 03

  Brian wants to write a letter to somebody, he needs to know who to write the letter to. That's what he's going for.

• 20:16Brian Preston?

  I mean, do you ladies like stashes?

• 20:19Speaker 03

  Oh, is that Miles Teller? Is that Miles Teller from Top Gun?

• 20:23Brian Preston?

  Is that Top Gun?

• 20:24Speaker 04

  That's true, that was a moment for the mustache.

• 20:26Speaker 03

  Ken, dynamite.

• 20:27Brian Preston?

  Maybe that is a drop.

• 20:29Speaker 04

  And to answer your question, it depends. Your favorite answer. All right, let's move on to a long form question.

• 20:36Speaker 03

  She didn't answer the question.

• 20:37Brian Preston?

  She's like, we're just gonna move on.

• 20:39Speaker 04

  It depends. That's truly my answer and I stand by it.

• 20:41Brian Preston?

  Okay, so I don't know if you want his, his name on air, but your husband, do you like it when he has a stash?

• 20:47Speaker 04

  Yes.

• 20:48Brian Preston?

  Oh.

• 20:48Speaker 03

  Boom. You see how definitive that yes was?

• 20:52Speaker 04

  Yes.

• 20:52Brian Preston?

  Okay, let me ask this question. Bo, does your wife like it when you have a stash?

• 20:55Speaker 04

  I do like it better when he has a beard and a mustache.

• 20:57Brian Preston?

  If she was here, I could ask her.

• 20:58Speaker 03

  Yeah, we'll call her. Let's call her live right now. Hey, Tim, get the phone out. Let's call her.

• 21:03Brian Preston?

  We're more likely to get a kid to answer this.

• 21:06Speaker 04

  All right, Stony13 has a question.

• 21:10Brian Preston?

  Speaking of, is there a kid? Is that my son?

• 21:13Speaker 04

  I don't think he has a YouTube channel. Okay. Hey, money guys. I'm 26 with 60K per year and I'm saving 25%.

• 21:21Speaker 03

  Let's go.

• 21:22Speaker 04

  I'm swapping jobs soon and was curious how important it is to find a job with an insurance plan that offers a high yield, uh, oh, an HSA, not a high-yield savings account, health savings account. If I am already saving 25%, what do you think? We know you love the HSA.

• 21:38Speaker 03

  Uh, benefits, in my opinion, are toppings, not the main course.

• 21:43Brian Preston?

  Exactly. I was thinking whipped cream and cherries.

• 21:46Speaker 04

  That's it, man. It is, uh, these are, these are the cherries and the whipped cream and

• 21:50Speaker 03

  the sprinkles. These are not the brownie. Uh, cause what you want to do is when you go in to find a job, well, like the brownies at the bottom and you put the ice cream on it and you put whipped cream on that.

• 21:59Brian Preston?

  Melted lava cake.

• 22:00Speaker 03

  We were at the, we had lunch at the Tucson, or had dinner at the Tucson Emporium down there in Orlando.

• 22:04Brian Preston?

  It's good food.

• 22:05Speaker 03

  Unbelievable. I cannot recommend the desserts enough. It was, I'm getting sidetracked, but it was this huge Sunday. Anyways, benefits are the accoutrement. They are the, the sprinkles and that sort of thing. They're not the main thing you want to look for when it comes to a job. When it looks to a job, you want to look for where's somewhere where I fit in culturally? Where's somewhere where my skill set will be valued? Where's somewhere that I have career trajectory, opportunity, vertical movement, those sort of things. And then once you narrow it down to a number of different jobs or positions or things that satisfy those, well, then you can start comparing the benefits. But I would never let the health insurance or the health insurance plan dictate the job that I took because I think that you're focusing on the wrong thing. If you're doing that, you're kind of majoring in the minors and

• 22:50Speaker 03

  I think that there's a chance you can end up in a bad spot focusing on that.

• 22:53Brian Preston?

  Yeah, I mean, if you've got two great opportunities, of course, you're going to get to the point where you start, you go through the big, long-term impacts of this position. But then when you're trying to have a, you know, At the coin toss moment, yeah, them benefits have a place, but don't, don't let that be the driving factor. That's, that's, don't let, you know, because we always say, don't let the tax tail wag the dog. It's the same thing with, we love health savings accounts, but it is not the, the driver of your, your financial success. You need to be thinking, because investing yourself is one of the best things you can do.

• 23:25Speaker 03

  And two other things. Don't assume because a company doesn't have a high deductible HSA option, that the health insurance benefits are bad. And don't assume that if they do have a high deductible option with an HSA, that that's the one you should choose. Oftentimes, we steer clients and direct them, don't pick the high deductible plan. Don't take the one with HSA, because the other options might make more sense for you. They're more highly subsidized. They have lower deductibles. There's better benefits. It's a better fit for your family. So don't just assume because we love HSAs, that's always a default answer. It's an option and something that you should investigate, but it's not just, if it's there, I'm going to do it.

• 24:08Brian Preston?

  No, you're good. You know what, you know what, actually I just got stuck on?

• 24:10Speaker 04

  Okay, he did.

• 24:11Brian Preston?

  I was sitting here trying to think of a poll we could ask our audience on is, but they, and I was like, they're both good looking men. So I was trying to figure out where the cut was, because like Magnum P I and Burt Reynolds.

• 24:22Speaker 04

  What?

• 24:22Brian Preston?

  They are, you know, I was like, who is Bo? Who is Bo? But then I was like, no, I need to find like a nerdy mustache person. Ned Flanders is Bo Moore, you know, just trying to figure this whole thing out.

• 24:33Speaker 03

  I thought this was going to be HSA related and it was still mustache.

• 24:37Brian Preston?

  I was already, I mean, I'm just, how do I yell at this guy about mustaches?

• 24:41Speaker 04

  Well, before we move on completely, Stony 13, if you would like a Money Guy Tumblr, just email [email protected].

• 24:49Speaker 03

  That's hilarious.

• 24:50Speaker 04

  Um, next question.

• 24:51Brian Preston?

  Do you think we're in the fourth quarter of mustaches at least? Give me some rays of hope.

• 24:55Speaker 03

  I think we're in the renaissance, the rejuvenation of them.

• 24:58Brian Preston?

  No, but there's, there's a season. Look, you can ask, you can ask Magnum P I, Tom Selleck. He was like, man, when that stash went out of, and he's like, oh, man, it's, it's a shame that that went out of style. But, um.

• 25:08Speaker 03

  But did he get rid of it?

• 25:11Brian Preston?

  I don't think he did, did he?

• 25:11Speaker 04

  I don't think.

• 25:12Speaker 03

  You know what I mean?

• 25:12Speaker 04

  I don't know for sure.

• 25:13Brian Preston?

  Probably didn't get rid of the four inch inseam chest either.

• 25:15Speaker 04

  I think.

• 25:18Speaker 04

  Interesting, interesting.

• 25:19Brian Preston?

  I'm sorry, I'll, I'll, I'll bring, well, maybe I forgot, I took off the gold chain. Let's bring this thing back, reel it back in, Brian, reel it back in.

• 25:27Speaker 04

  Next question is from Quilt Audit. It says, morning, I'm meeting with someone in my church to talk about finances with her, specifically to help her budget better. What would be the best place to start? What kind of docs should she prepare? What should she bring to this meeting? I was just curious, if you were gonna sit down and somebody said, hey, I want help with my personal finances, where would you start?

• 25:49Brian Preston?

  Only there's something you go to moneyguy.com/resources and you could, it's an all-terrain, all-weather vehicle to tell you what to do with your next dollar. We've got you covered with the Financial Order of Operations. What would you add to that?

• 26:03Speaker 03

  Yeah, yeah, so I would say if I was gonna sit down with someone from church and I was gonna help them out, the starting point that I would want, I'd ask them to prepare a net worth statement. I wanna know, hey, a list of all the things that you own and all the stuff that you owe, right? We have a great template, you go to moneyguy.com/resources, you can download a free one, you can actually email it to her, text it to her. She can then fill it out. Well, what you're gonna uncover when she lists out all the things that she owns and all the things that she owes, you're gonna see the types of investment accounts she has access to, the types of retirement plans she has access to. You're also gonna see the debts that she has. So that's like step number one. I wanna know sort of like starting point. Step number two, I would then say, hey, bring me your last month of credit card statements or bank transactions or wherever, however you spend money, I wanna see where your spending's going.

• 26:48Speaker 03

  Or maybe you tell her, hey, do a little bit of work, let's go download a free app. There's a ton out there. You can use Monarch Money, you can use Ynav, you can use any of these. And just start tracking where your dollars are going and then let's look at it. After a month, after you've done it, cause what I wanna see is, man, holy cow, you realize that you have 25% of your money every month going towards eating out or towards transportation costs or towards whatever that is, and then I'll begin to triage that. And then once I've figured, okay, how much should be going into this bucket and this bucket and this bucket and this bucket? I'd figure that out. So then I'd figure out the margin. Then, once I figured out the margin, boom, I'm coming to the financial order of operations. How do I think about where I should be deploying these dollars? Am I getting my employer match? Have I knocked out all the high interest debt?

• 27:33Speaker 03

  Do I have a fully funded emergency fund? Am I putting money in my Roth? And I would walk it through that sort of three step process to get her on solid foundational footing moving forward.

• 27:43Brian Preston?

  Look, the reality is, is most people's, because you're going to eat at this lunch. So you're only going to have probably 20, 25 minutes of productive, get it in there. That's why you're going to need to have something that speaks after the lunch. And that's why I love the free download. But also realize the backbone of Millionaire Mission is the financial order of operations. If you ever want to know the origin story, how it all came to be, how you go deep into it. And then this also allows the ground rules to come into play because even before you get to step one, there's some things to help you set the table of being good with money. So I think that I would use that as a, something just to kind of a parting gift. So that after the lunch, more action can occur.

• 28:23Speaker 03

  Love that.

• 28:25Speaker 04

  That's great.

• 28:26Brian Preston?

  And quack, quack, quack, quack.

• 28:28Speaker 04

  You used, almost took the words out of my mouth. Quill Audit, if you would like a Money Guy Tumblr, since we answered your question, just email [email protected]. Let's do one more long form question before we move into our It Does Not Depend Rapid Fire segment.

• 28:43Speaker 03

  Is, did you see, did you see the meme of the week? If you're not on our email list.

• 28:48Speaker 04

  Did you see the meme of the week, Brian?

• 28:49Speaker 03

  If you, so one, you should follow us on all the socials. Isn't that right, Matt? We should follow us on all the socials.

• 28:54Brian Preston?

  Matt rocking a stash too over there. This thing, I'm about to be overtaken over here.

• 28:59Speaker 03

  But the meme of the week that was on, on socials and also in our newsletter, and I think it was in our little email this morning, just fantastic. It was a representation of Rebi during the rapid fire segment, and it was chef's kiss.

• 29:14Speaker 04

  Or was it during the whole live stream?

• 29:16Speaker 03

  Maybe it's the whole live stream. There we go.

• 29:19Speaker 00

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• 29:49Speaker 05

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• 30:20Speaker 04

  You got it. All right, let's move on to Jim's question. It says, "How do I convince my spouse, who is very risk averse, to invest a portion of our cash reserve in the stock market? We have no debt and two years of expenses covered by our savings. I max my IRA only."

• 30:39Brian Preston?

  I mean, I, look, this is something, when I was writing Millionaire Mission, I was trying to get people to understand what feels safe in the short term can actually be risky in the long term. And what is risky or feels risky in the moment, in the long term, can actually be an incredible wealth building opportunity. And that's exactly what the financial markets are. And you've got it, Jim, you've done the right thing. And that's why I love, you use, once again, the Financial Order of Operations will help you because you'll be able to show your wife, "Look, we don't have high interest debt. We've got emergency reserves set up. We need to now make this money start working harder than we can with our back, our brain in our hands, so we don't get beaten down by inflation, so that we can actually grow

• 31:24Brian Preston?

  this money over the long term." And that's what actually, starting a Roth IRA and then buying some index funds is going to do. And that's why I would sell the vision of where you want to be and sell the vision of, "Hey, don't you want to actually be able to let our money work harder than we can so we can go do trips? We can do whatever your thing is that y'all love doing as a couple. Share that vision so that you can build some collaboration there."

• 31:49Speaker 03

  Yeah, I'd want, I'm curious how old you guys are, because to have two years of expenses saved up in cash is a lot, unless you're like right at... Retirement or pre-retirement. So I'd want to know that. And I love Brian's idea of starting with the why, like what are we saving for? Why are we building? So let's say that you define, hey, we want to be retired one day and we need to save a million bucks. Just making up a number. I would use math to show my spouse, hey, if we're just going to save in our savings account and this is how much we can save, this is how many months, how many years, how many decades it's going to take us to get to a million dollars by just saving in cash. And what you're going to find is holy cow, we're not going to hit a million until we're

• 32:32Speaker 03

  75, 85 years old. And then I would show her, hey, do you realize if we started investing these dollars? And we could earn a conservative, let's say 7%, 8% annualized rate of return by investing in low-cost index funds? Do you realize we would then be able to reach that goal? 10 years, 20 years, 30 years sooner by doing that? And I would show her that, hey, we have the same goals. Let's talk about the different paths we could take to approach that goal. And then let's agree with one another. What's the most appropriate path? What's the most efficient, most effective path to get there? And I'd see if that kind of clicked and made a light bulb go off.

• 33:09Brian Preston?

  Do we have on our website, you know that, because we use it on show content all the time, the rolling 20-year periods of investing?

• 33:16Speaker 03

  I don't think we, I don't think that's a deliverable.

• 33:18Brian Preston?

  Okay, that's more of a, more of a show topic type thing. But it's one of those magical things is that also a great thing for people who think that investing is risky. That's why we say don't invest unless you can do it for five to seven years is because yes, in the short term, there might be some volatility, but if you can stay invested for that five to seven years, there's actually incredible track record that this is, is pretty consistent. It's, and that's another thing I talk about in the, the book is the law of accelerating returns. And if you don't think we're living in those terms with how things just seem to be speeding up on innovation and the growth of the world, then you're going to be able to make money off of that. As long as we don't make the robots that kill us, we're going to be able to grow this thing

• 34:00Brian Preston?

  and make even more money off of the ever-expanding economy and pizza pie.

• 34:05Speaker 03

  Love that.

• 34:07Speaker 04

  Well, that's great.

• 34:08Brian Preston?

  But, but, look, and it doesn't matter if the robots kill us at that point.

• 34:11Speaker 04

  Well, that's not great.

• 34:12Brian Preston?

  You know what I mean? You can't control that. That's outside of the control feature. There's no plan for that.

• 34:17Speaker 04

  Yeah, that really doesn't matter to the question, but...

• 34:21Brian Preston?

  That's for, that's for, that's for the government. That's for other people who should be thinking about those things, not you.

• 34:26Speaker 04

  Jim, you don't have to think about the robots taking over the world, but you can think about what Brian and Bo shared while you email [email protected] to cash in on your Tumblr if you would like one. All right. It's Brian and Bo's favorite part of the show, or it does not depend.

• 34:40Brian Preston?

  I was about to try to delay us by going on a tangent, but let's go ahead and do this.

• 34:43Speaker 04

  It does not depend rapid fire segment where they will answer.

• 34:47Speaker 03

  Did awful last week. I just want to say, I did very poorly last week. I thought about it all week. I could barely, I could barely focus on it.

• 34:56Speaker 04

  Oh, the glass, sunglasses are going back on.

• 34:59Brian Preston?

  This is a job for the maverick. Let's get in there and do this thing.

• 35:02Speaker 04

  So just a refresher on the rules.

• 35:04Brian Preston?

  Goose, are we ready?

• 35:05Speaker 04

  Brian and Bo will have 30 seconds combined to answer the question and they cannot use the words it depends. And I will be trying to listen. Don't get too cute with it. Don't say other phrases that mean it depends. Okay? I will flag that. Now, I'll throw my bone at the end and we will have our maybe it does depends segment where they can say all the things they didn't get to say in the 30 seconds. So with that, let's dive into question number one. 30 seconds on the clock. When it comes to 401k max out step, should we opt to max out Roth or traditional or a mix of both?

• 35:42Speaker 04

  Don't say it.

• 35:43Brian Preston?

  Majority of people, you're gonna be Roth, all right. I mean, I gotta think that just time, if you maximize the value of time and young people, um, I love Roth because you know, most employers now offer Roth. I think that's where a large portion of the population would do really well.

• 35:56Speaker 03

  Agree to disagree. By the time you're maxing out, you're putting $24,500 into your salary deferral. If you're able to save that much money, you're likely going to be higher income, which is likely going to put you in a higher tax rate, which means that you're probably going to max on the pre-tax side.

• 36:08Brian Preston?

  You ain't wrong.

• 36:09Speaker 04

  We gotta disagree and time is up. All right. Question two. Why do you never mention public transit as a possible form of reliable transportation?

• 36:19Brian Preston?

  Cause we're two southern boys.

• 36:21Speaker 04

  A lot of places where it is possible.

• 36:23Brian Preston?

  I know, whenever I go to Europe, or you know, even DC or New York, I'm like, this is awesome. Especially with the way the mobile apps make it work.

• 36:30Speaker 04

  We have to start the clock. So this will be a lot less expensive than 8% of total income. Start the clock.

• 36:36Speaker 03

  Agreed. We, public transportation, or like a walking community, is an amazing opportunity for folks who can live in that place. We, neither one of us have ever lived in a place like that, so it doesn't come to mind initially. That's just a little personal bias that we have.

• 36:50Brian Preston?

  Yeah, I mean, I grew up when they built Fulton County Stadium, and then even the Ted later, they didn't have Marta go to it. So I mean, we're from the side of the Georgia.

• 37:00Speaker 03

  Didn't make sense.

• 37:01Brian Preston?

  Public transportation was never done well, so we, it's not part of our life.

• 37:05Speaker 03

  You know where public transportation was done? Question's over, I get that. You know where they mastered public transportation really, really well? When we were in college, at the University of Georgia, right? Like that, that was the...

• 37:17Speaker 04

  I didn't expect that to be the answer.

• 37:19Speaker 03

  I know, you were one of the bus drivers.

• 37:21Brian Preston?

  I was one of the bus drivers.

• 37:23Speaker 03

  But it was great, it was amazing how convenient it was to hop on a bus, get wherever you needed on campus, you knew the schedule. If I lived in a city where that was like an opportunity, that was a thing, that'd be fantastic.

• 37:33Brian Preston?

  If I could make a gazillion dollars driving a bus, I might still be driving a bus. Listening to the Beastie Boys.

• 37:39Speaker 04

  All right.

• 37:39Brian Preston?

  It was good stuff.

• 37:40Speaker 04

  Way to fuck the system there, Bo. Let's get back to our 30 seconds.

• 37:44Speaker 03

  I wasn't, that was a tangent. I, I was a tangent.

• 37:49Speaker 04

  Next question is, what is the money topic Bo and Brian differ on the most, and who's right?

• 37:55Brian Preston?

  Well, I mean, paying off debt. I mean, that's what we, we fought on it for a long time, made it in the book. Because I was, Bo kept telling me I was bad with money, or math, because I was trying to pay off my low interest mortgage.

• 38:08Speaker 03

  And I was right. What's really interesting is, we actually do align on, I would say, almost 100% of things financially. Because it's not like there's, a lot of it's fairly black and white, cut and dry. There's not like a ton, there's not a ton to disagree on.

• 38:25Brian Preston?

  Which question was that? So you put a number?

• 38:27Speaker 04

  Three.

• 38:28Brian Preston?

  Three.

• 38:28Speaker 04

  I'm making some notes, too.

• 38:30Brian Preston?

  Just, when we come back...

• 38:31Speaker 03

  He's making notes on things to disagree with.

• 38:33Brian Preston?

  I do want to say 2008.

• 38:36Speaker 04

  Okay.

• 38:37Speaker 03

  Oh.

• 38:38Speaker 04

  Next question says, if I retire before age 55, should I do 72T or a Roth ladder?

• 38:48Brian Preston?

  Say it again.

• 38:48Speaker 03

  If I retire before 55, should I do 72T or a Roth ladder?

• 38:54Brian Preston?

  I don't like Roth ladders. Um, gosh, I want to say more, but um, 72T is complicated, but um, Roth is going to be your favorite savings. It's going to be your favorite child. So it's going to be the first in, last out.

• 39:10Speaker 04

  Nope. Okay. We'll come back to it.

• 39:12Speaker 03

  72T.

• 39:13Speaker 04

  When the market is going down sharply.

• 39:16Brian Preston?

  I'm so sorry.

• 39:16Speaker 03

  We still had time.

• 39:17Speaker 04

  When the market is going down sharply, what are some financial mutant actions to take?

• 39:22Speaker 03

  Always be buying.

• 39:25Brian Preston?

  Yeah, I mean, always be buying. If you have, if you're, if you're dollar cost averaging, because you have a lump sum, you can, once you get over 20%, every 5% drop, you can accelerate another month forward on, on your plan.

• 39:38Speaker 04

  Well done.

• 39:40Speaker 03

  Look for opportunities.

• 39:41Brian Preston?

  Yeah, I, I try to be opportunistic.

• 39:44Speaker 04

  Great.

• 39:44Speaker 03

  We still had time.

• 39:45Brian Preston?

  Yeah, you got us off. We have 15 seconds.

• 39:48Speaker 03

  You took the time.

• 39:48Speaker 04

  Production thought you were done.

• 39:49Brian Preston?

  We're master communicators. Well, I put myself in there with master communicator both.

• 39:54Speaker 04

  All right. Next one is the real hard hitting question. Comb or brush?

• 40:00Brian Preston?

  I use both.

• 40:00Speaker 03

  Neither.

• 40:01Speaker 04

  Ooh.

• 40:02Speaker 03

  Are you, I'm like.

• 40:03Brian Preston?

  Fingers?

• 40:04Speaker 03

  Yeah, dude. I just mess it up.

• 40:07Brian Preston?

  No, I use, I use a comb to part the hair, get the right part, because I'm not an animal. And then after I dry the hair, I gotta run a brush through it to give it the poof.

• 40:17Speaker 03

  You know what? Or do y'all, y'all use utensils or your hand, your fingers and hands, right?

• 40:23Speaker 04

  We're getting quite the variety of answers from your fellow men.

• 40:27Speaker 03

  Are you a comb or brush or you fingers?

• 40:30Brian Preston?

  Neither.

• 40:31Speaker 03

  Oh, I was gonna say neither. He just wakes up and just shakes a little bit. Yeah, no, I just, you know, wet the hair real quick, tussle it, put some, uh, like you, a little, this little, by the way, Money Guy Listener is the one who hooked me up with my hair stuff. Uh, pull a bit out of there.

• 40:44Brian Preston?

  A Money Guy Listener is who hooked you up?

• 40:46Speaker 03

  Yeah, man.

• 40:47Brian Preston?

  Somebody sends you product or something?

• 40:49Speaker 03

  It's the best product.

• 40:50Speaker 04

  We went way over on that one.

• 40:51Speaker 03

  It's the best product.

• 40:53Speaker 03

  Best product I've ever used.

• 40:54Speaker 04

  Let's move on to the next question. What should I do first? Pay down my mortgage at 3.25%, 29,000, or my student loan at 6.1%, which is 444,000?

• 41:08Speaker 03

  Student loan.

• 41:09Brian Preston?

  Yeah, student loan. One is especially how old is this person?

• 41:13Speaker 03

  Doesn't matter, student loan.

• 41:14Brian Preston?

  I mean, that one's, that one sounds easy. Let's do the student loan.

• 41:17Speaker 03

  Did you say 29,000 on the mortgage?

• 41:19Speaker 04

  That's what it appears, yes.

• 41:21Speaker 03

  So there's a debt snowball thing going here? They're thinking, ooh, I'll pay off the lower one. I'll get that out. I think it's going to be suboptimal, especially when your interest rate on the student loan is twice as high as your mortgage, and the mortgage is depreciating, and it's super low interest, even low, almost as low as the risk-free rate. For sure, student loan.

• 41:38Brian Preston?

  Yeah, I agree.

• 41:40Speaker 04

  Next question. Which step of the foo would you place paying back a 401k loan that you took out before you were financially enlightened?

• 41:50Brian Preston?

  Yeah, I mean, that's, yeah, it's probably, that's more of a, it depends on the interest rate. I don't need to know more detail.

• 41:56Speaker 04

  Oh, all right, you both lose the time. Thank you, Caleb.

• 42:00Speaker 03

  Why do I lose it? I didn't say it depends. Why do I lose it?

• 42:02Speaker 04

  You were a team. Moving on.

• 42:05Speaker 03

  Last time I got called for depends, he got the answer.

• 42:07Speaker 04

  I am change, hey, you said you wanted a change up. That's my change up.

• 42:11Brian Preston?

  I was thinking three and nine.

• 42:13Speaker 04

  All right, next question. How do you know when it is the right time to tax loss harvest?

• 42:19Speaker 03

  When you have losses inside your taxable account.

• 42:24Brian Preston?

  Yeah.

• 42:25Speaker 04

  Is that it? Short and sweet?

• 42:27Brian Preston?

  Yeah, I mean, tax law, yeah, as soon as the market starts getting, find the silver lining.

• 42:32Speaker 03

  Sometimes you might have a position that you really like that you don't want to get rid of. I had this individual stock. It goes down. I still believe in the stock. I don't want to sell it, potentially miss out on the 30-day window. So I'm not going to loss harvest that. But indices that are easily replaceable.

• 42:46Brian Preston?

  Good call.

• 42:47Speaker 03

  When you got some, when you got some losses.

• 42:50Speaker 04

  Somebody put justice for Bo in the chat.

• 42:52Speaker 03

  Ah, right? Reby is, geez.

• 42:56Speaker 04

  All right. A couple more. Best strategy for handling mileage reimbursement. The rate is generous and we always have extra.

• 43:07Speaker 03

  On taxes or like from the employer?

• 43:09Speaker 04

  I think from the employer.

• 43:10Brian Preston?

  Yeah, it's from the employer.

• 43:11Speaker 03

  Best strategy on handling it? Track, track your mileage?

• 43:15Brian Preston?

  I'm sure there's apps that are out there doing that for you.

• 43:18Speaker 03

  Always has extra what?

• 43:21Speaker 04

  Money.

• 43:23Speaker 03

  Track your mileage and report it and get your expense reimbursement.

• 43:26Brian Preston?

  Automate the process.

• 43:27Speaker 03

  I don't understand the question.

• 43:28Brian Preston?

  I mean, if there's apps out there that will help you automate, so you can make sure you get every mileage that you're entitled to.

• 43:34Speaker 04

  Great. Last but not least, what really went through your head when you walked in and saw the mullet wigs on your desk this morning?

• 43:43Brian Preston?

  I was, I was like, what in the, I was like, what crazy thing are they trying to do? Especially when I saw the mustache for Bo. But then when I found out the admin team did it and April's full, I was like, yeah, come on, let's get in.

• 43:56Speaker 03

  I thought it was our writing team that did it. And when I found out it was the admin team, I was like, oh, okay, that's on brand. I couldn't figure out the angle that the writing team was going with or where we were.

• 44:06Brian Preston?

  I mean, let's face it, they're sitting on bouncy balls right now outside that door.

• 44:09Speaker 03

  Our admin team.

• 44:10Brian Preston?

  They're not serious people.

• 44:12Speaker 03

  Our admin team is sitting on bouncy balls right now. That's what they do.

• 44:15Speaker 04

  Health is wealth.

• 44:16Speaker 03

  They're not serious people. Hey, by the way, we desperately, we desperately need a new administrator. So if you'd love to be an administrator for a financial advisor firm

• 44:24Brian Preston?

  Hope you have some core strength though.

• 44:25Speaker 03

  And you like building your core strength at work on a big bouncy ball, go to moneyguy.com.

• 44:31Speaker 04

  I like that you've committed to buying another one for the office.

• 44:33Brian Preston?

  Oh, I'm sure. That's the other thing. You know, I know this is not part of the 30 second. You know, these are corporate credit cards that are buying this stuff. We are totally stretching the deductibility of all things when I see mullet wigs, fake gold chains.

• 44:46Speaker 04

  One of our admins just messaged and said, let us live. So that's your message from them. All right, that finishes our it does not depend rapid fire segment. So now we will move on to our maybe it does depend segment where you can say what you didn't get to say. On the very first question about 401K, you guys disagreed. Do you have anything else to say on that?

• 45:08Speaker 03

  No, I think.

• 45:09Speaker 04

  Bo was fighting to not say it depends.

• 45:10Speaker 03

  Yeah, so I, I said that. If you're at a higher income, to be able to max out your step six, that means that you've already maxed out step five. That means you're putting 7,500 to Roth, 7,500 to Roth, either 4,000 or 8550, or whatever the numbers are in your HSA, and now you're doing 20. I think the math, we did the math when we did a Manny case study, you have to be making $137,000 as a household for 25% and have you maxing out all those. So the odds are you're going to be in a higher income situation, which is likely going to justify you doing pre-tax if you're maxing it out.

• 45:44Brian Preston?

  So my logic train was that only the top 10% are going to be able to be in that situation. The 90% are, you know, probably benefit from doing a Roth. So I went with the, the, the numbers. Cause the, the real answer is Bo's answer, which is it depends. But I was like 90, 10, let's go with the 90.

• 46:01Speaker 04

  I knew there was going to be a lot to say there. Um, there was.

• 46:05Brian Preston?

  But Bo's, I am saying Bo is right. I know he loves hearing that.

• 46:09Speaker 03

  That's my favorite thing to hear.

• 46:10Brian Preston?

  As a master communicator. Uh, but it is the 90, 10. I was just trying to play the numbers.

• 46:16Speaker 04

  Oh, I was curious, for public transportation, what percentage of even like the United States has that? That's what I was wondering too.

• 46:24Speaker 03

  That's a great question.

• 46:25Speaker 04

  Cause I do think that I was under the impression that generally speaking.

• 46:28Brian Preston?

  Governments have done things like, cause let's, let's face it.

• 46:31Speaker 04

  That's not an option for a number of people.

• 46:32Brian Preston?

  Public transportation had to be something that was really thought about in like the 1800s.

• 46:36Speaker 04

  Sure.

• 46:37Brian Preston?

  Um, because now land and everything is so expensive. If you try to go put this stuff in, like cities now, goodness gracious. I mean, there's projects out there in California and others have shown that it's a disaster to do it now. So you, these are decisions that you wish people would have made back when land was cheap.

• 46:53Speaker 04

  Cause I was just thinking about why do we not talk about it more? And I think you're not wrong. If there is some personal bias there, right? Like we've always lived in person.

• 47:00Brian Preston?

  But I do give, I look.

• 47:01Speaker 04

  But I think that that's pretty common, right?

• 47:03Speaker 03

  It's a lot of most people, yeah.

• 47:04Speaker 04

  Yeah, I think it is a majority.

• 47:05Brian Preston?

  In Millionaire Mission, I do talk about like on housing, that I think people who live in high cost of living areas, one of the hacks that you can break the housing rule of 25% is when you have public transportation and you don't have a car payment, um, there, there are ways.

• 47:19Speaker 04

  You could have some of them go around, yeah.

• 47:20Brian Preston?

  I try to address it when I can talk in a format that's not, especially not 30 seconds.

• 47:24Speaker 04

  But it is awesome. I was just in New York City not too long ago and it is crazy how like you think you're gonna get a rideshare and then you're like, why would I do that? That would take way longer.

• 47:32Brian Preston?

  Well, remember, we went to New York. Remember when we went to New York and we gave Bo the New York treatment?

• 47:36Speaker 04

  We did.

• 47:36Brian Preston?

  And we were like, hey, we can Uber and it would take 45 minutes to get everywhere, or we can pull out our cool apps and just ride the public transportation.

• 47:45Speaker 04

  So, I mean, maybe we should talk about it more, but not everyone has it.

• 47:49Speaker 03

  Quick Google search, approximately 55% of Americans have access to public transportation while 45% have no access at all.

• 47:53Brian Preston?

  Yeah, but that's stat, you have to be careful of stats because just like we just talked about, City of Atlanta has public transportation.

• 48:00Speaker 03

  But it's not effective.

• 48:01Brian Preston?

  It doesn't go anywhere. It's just like around here, we have butts, shuttles riding everywhere.

• 48:07Speaker 04

  In my mind, I'm thinking New York City subway.

• 48:08Brian Preston?

  So those stats would say you have, but you don't really have public transportation. You've got the government trying to wink and nod that, hey, we got a bus out there. No, that's not really, nobody rides that.

• 48:20Speaker 03

  We, uh, number three, you said 2008, it was what does, what do the guys differ? I think I know where you're going with this.

• 48:26Brian Preston?

  Yeah, well, I think when both, when Bo and I first started working together, because look, we all have a recency bias. And since Bo graduated, when the market was literally getting his teeth kicked in. I think that you, for the first few years that you were managing money, or, or, you know, you, you had some nervousness to it.

• 48:45Speaker 03

  Super conservative allocations.

• 48:46Brian Preston?

  Super conservative.

• 48:47Speaker 03

  Thought the market always lost 40%.

• 48:49Brian Preston?

  You know, and at that point I was like, it's okay. And I think you probably thought I was a cowboy and I think we've, we've now moderated where we're the same. Even though I'm getting older and probably more conservative, it's just one of those, we all are shaped by what is, we've lived through.

• 49:02Speaker 03

  Yep, that's right. The other one that I wanted to add just to, there was this question around, hey, for FIRE, should I do 72T? For those of you that aren't familiar, 72T is a way that you can access pre-tax assets prior to 59 and a half. You have to take substantially equal periodic payments, but there are some rules associated with it. You got to make sure you do it right. You can't run afoul. Or should I do a Roth conversion ladder where I convert to Roth, let it sit for a while, then I'm able to pull the basis out? We both ended up saying, hey, likely you want your Roth dollars to stay in the Roth accounts as long as possible. So you're maximizing the tax-free growth for as long as you can, because that's the real benefit to Roth. So if you're giving us a binary option between

• 49:42Speaker 03

  conversion ladder or 72T, we're probably going to say 72T. However, we don't really love 72T either. We'd rather see you plan for it, build an after-tax account, or maybe have access. A lot of people don't realize, if you are working at an employer, and maybe you have this big IRA rollover over here from previous employers, and you're planning on retiring at 55, you can always roll pre-tax assets into your current employer's 401k before you retire, thus opening your ability to access those assets from 55 to 59 and a half. So there are other ways to get access to those dollars that aren't quite as complicated. We'd love you to do one of those, as opposed to either one of the Roth conversion or 72T.

• 50:25Brian Preston?

  Yeah, and I'm not against Roth ladders. It's just, but when I've seen it, people come to us and they tell me, hey, I've built up this big Roth, so I can do a Roth ladder and pull that basis out. The reality is, is then we look at all of your accounts, and we look at what your tax rates and other things. And we're like, yeah, I mean, I know that that looks good on paper, and it's a cool content piece. But you realize, that money grows tax-free. If you die with that money, it gets to continue to grow tax-free, and you're not going to die broke. I've seen how much money you have built up. And it's just in practice, when I look at people's actual assets, and I'm trying to create a real plan, that's because personal finance is personal, usually we don't, we don't go start rating the Roth account first.

• 51:09Speaker 03

  That's right.

• 51:10Brian Preston?

  It's usually first in, because it's step number five of the Financial Order of Operations, last out, because it is your favorite child when it comes to your assets. Because that's one, even Bo, like, right now, you've told me, you pulled me inside, go, hey, I know your income's, tax rate's high, but what are you doing? You ought to be doing Roth contributions, even to your, because I'm now in this legacy standpoint. There's a number of reasons why it makes sense for you, yeah. And you're right. I mean, that's why I keep thinking about, yeah, I'd rather pay a little bit more tax to this, so that my, you know... Daughter who's going to be living off this stuff because that's the other thing is I have an autistic daughter who you know that's you break the 10 year rule on spreading beneficiaries out if you have somebody who's developmentally challenged like my daughter is she's gonna be

• 51:54Brian Preston?

  able to to basically stretch this out over her lifetime which is pretty incredible yes I'm gonna pay more taxes now but creating an alternative stream for her is is pretty powerful stuff.

• 52:06Speaker 03

  It's a good planning, isn't it?

• 52:07Brian Preston?

  It is good planning.

• 52:09Speaker 03

  There was one question where

• 52:11Speaker 04

  Haven't.

• 52:12Speaker 03

  Brian said it depends and somehow

• 52:14Speaker 04

  Somehow.

• 52:15Speaker 03

  You as just a dictator decided oh this is the way the game works now no somehow y'all are both disqualified if Brian

• 52:24Speaker 04

  And you lost points.

• 52:25Speaker 03

  And I lost.

• 52:26Brian Preston?

  She wouldn't do that to me. That's where I know I'm still Rebe's favorite.

• 52:29Speaker 03

  So my question is what was that question because I feel like I might have had something to say.

• 52:32Speaker 04

  You did. It was which step of the foo would you place paying back a 401k loan that you took out before you were financially enlightened?

• 52:40Speaker 03

  Okay, why do we dislike high interest debt? Because the high interest rate works against you aggressively and we want your money to work for you, not against you. I would argue that a 401k loan irrespective of the interest rate irrespective of the fact that you're quote unquote paying yourself interest you have taken valuable soldiers in your army of dollar bills off of the battlefield. So I would argue let's get that 401k loan paid off as though it were step three. So I want you to knock that out, get that paid off, let your dollars start working for you and then begin progressing through the financial order of operations. That's what I

• 53:23Speaker 03

  would have said had Rebe been kinder and more equitable.

• 53:28Speaker 04

  I will try again next time.

• 53:30Brian Preston?

  By the way, we had some great brainstormings. Rebe walked out of the room, so he probably won't get implemented.

• 53:35Speaker 03

  Oh my gosh.

• 53:35Brian Preston?

  But we were dropping some dimes in the content meeting. If we if they if they fill you in

• 53:40Speaker 03

  Did they tell you?

• 53:41Speaker 04

  I can never walk out of a room again.

• 53:42Brian Preston?

  Some great ideas. It's gonna make the rapid

• 53:44Speaker 04

  Always a mistake.

• 53:44Brian Preston?

  It terrifies me because I'm naturally not good at this already, but if we can implement this, you guys are going to absolutely love what we add to this if if Rebe signs off on it. That's

• 53:57Speaker 03

  Did y'all tell her the idea?

• 53:59Brian Preston?

  It's good stuff. Rebe walks out of the room and it's like, ooh, bosses left.

• 54:05Speaker 04

  I'm flattered, I think. I think I'll go with flattered. All right. We do have some time left, so let's get back to some long form personal finance. Are you ready?

• 54:15Brian Preston?

  Oh, let's do it.

• 54:16Speaker 04

  All right. The Winkinator 21 asks, hi, money guy. Where would an E S S P, or does he mean E S P P? Fall into the foo? Are those two different things?

• 54:26Speaker 03

  I'm thinking E S P P.

• 54:28Brian Preston?

  Employee stock purchase plan.

• 54:30Speaker 04

  Yes, that's what I was assuming he meant. So where would that fall into the foo? I am putting 15% of my take home into the program, which means I can't max out my retirement.

• 54:42Speaker 03

  It depends. I can say that now.

• 54:44Speaker 04

  You can say it. I know I bristled when you said it. I was like, okay.

• 54:47Speaker 03

  It depends on how your, how your plan operates. For those of you that aren't familiar, E S P P is an employee stock purchase plan where your employer says, hey, we want you to participate in being an owner of this company. So we're going to allow you to buy shares in our company. Now here's where it matters, how the plan is structured. Oftentimes what they'll do, especially if it's a publicly traded company, is they'll say, hey, we're actually going to let you buy at a discount. If you want to participate in E S P P, we're going to let you buy at a 15% discount. Or we're going to look at a, at a trading window from day one of the quarter to day 90 of the quarter. And you get the lowest price in that window, or whatever that is. If something like that is happening inside of your E S P P, E S P P plan, we would argue that's a lot like free money.

• 55:31Speaker 03

  Like if I get a 15% discount, or if I get to buy at a lower price than market, that's my employer providing an opportunity for me to have some free money. And so we want you to take advantage of that aggressively. But. But.

• 55:45Brian Preston?

  Here's, we love these employee stock purchase plans because it really is that good that you get a discount. And then a lot of times they'll let you buy at the lower of the price with the beginning of the end of the quarter. That's why you got to get in and get there and get that. But here's the, here's the asterisk that goes at the end of that. You have your human capital.

• 56:05Brian Preston?

  This will be part of your investment capital. You need those things to kind of decouple at some point because you're trying to build financial independence outside of your human capital. And if you have all your eggs in one basket, it can be great or it can be disastrous. And part of what we're trying to help you build is something that protects you, whether it's raining outside, whether it's cold outside, whether it's sunny outside, we want you to have an all-terrain plan. So that's why we love these type of opportunities, but we always say there are limits or create a system to where this is cleansing itself out to where you maybe every year you automatically are then flipping it in to sell it and turn it into diversified holdings that can start

• 56:49Brian Preston?

  building your army of dollars outside of the company you work for, because that's a, it's just a risky thing. Y'all have heard me tell the story of Lucent Technologies and other things. When I worked in Atlanta, I saw a lot of people that on paper were worth a lot of money and it pretty much went to nothing because they had their human capital and their investment capital sitting in the exact same place. Love that.

• 57:11Speaker 04

  Love that. Well, hey, if you don't want to stop chatting, don't want to stop thinking about personal finance, even when we turn the cameras off today, no problem. Just go to moneyguy.com. Not only do we have tons of free resources and calculators that go deeper on some of the topics we've talked about today, we also can send you to the Moneyverse, our private Discord server where you can keep chatting with each other, asking questions, giving input and perspective and experiences. And we even just posted a poll up there about your savings rate today, so you can compare notes with other mutants and talk about your goals. So if you want to do that, go to moneyguy.com/moneyverse. All of that is on moneyguy.com. We're trying to make it better and better, more searchable for you every single day. So be sure to check it out if you haven't yet.

• 57:55Brian Preston?

  Now, look, if you stuck around, because I think that we at least give Bo the opportunity.

• 58:02Brian Preston?

  You've hung out with the wizard. What was your favorite?

• 58:05Speaker 03

  Oh, yeah, yeah.

• 58:06Brian Preston?

  What was your favorite ride at Universal?

• 58:08Speaker 03

  You know what I saw? So I took my, my wife and I took our oldest girls down to Universal down in Orlando. Yep. And it was unbelievable. So much fun. The girls are big. We were all the roller coasters. I, I got to see a number. I saw a bunch of you in the Nashville airports, a number of you in the Orlando airport. So some of you at the parks. Thank you so much for saying hello. It was wonderful to get to meet you. Wonderful for you to say that you, you watch the show. So thank you for that. Uh, it was awesome. I think the easy answer to your question is Hagrid's is just ballin'. It's an unbelievable ride, right? Like it's so good. But also big fan favorites. Velocicoaster was a big fan favorite and Hulk was a big fan favorite. So all my kids, my kids crushed them all, right?

• 58:51Brian Preston?

  And the real question that everybody wants to know. Did you check a bag or did you gate check a bag or did you do carry on?

• 58:59Speaker 03

  So here's what we did. I going down at being in the Nashville airport. I had four carry ons, my kids and I. So we took all carry ons. We volunteered to gate check at the first notice and it was one. We gave them the bags, went and sat down. It was so easy. We get land in Orlando, we take it to, and just, you know what? The Lord was smiling down on me. As soon as I walked with the carousel, all three of my, well, three of the four were just in order. And I just pulled them right off.

• 59:26Brian Preston?

  So somehow you got to baggage claim. Y'all are so slow off that plane that it was already in baggage.

• 59:31Speaker 03

  I got a bunch of kids, dude. We, yeah. And it was, so it was literally so easy. And the way back, uh, it was not a full flight, so we just carried them on and it was great.

• 59:41Speaker 04

  That's a financial mutant hack.

• 59:43Brian Preston?

  Really?

• 59:43Speaker 03

  It is a, it is, you know what? Cause I think Southwest now charges what 35 bucks.

• 59:47Brian Preston?

  Delta and all of them charge. It is a hack. If you want, if you want to check your bag, gate checking is probably the cheapest way to do it. If it's a, but it's.

• 59:56Speaker 04

  Amazing.

• 59:57Brian Preston?

  It's the same way with like your parents living in the basement. You want it to be a choice. You don't want it to be mandated. I mean, don't you, that's the, it's the reality of the situation. That's actually really funny. I love gate checking if you want to use a financial mutant hack.

• 1:00:09Speaker 03

  Sure.

• 1:00:09Brian Preston?

  I don't like when the airlines tell me, hey, you, sir, you're now at this point in the line, we're going to take your bag, even though you like to seal team six, get off the plane and run to the cars as fast as you possibly can. You know, they, I like it when Bo can, at his leisurely pace, get off the plane. But I want my family to attack and go and get the heck out of there as fast as possible and not have the airline hold me back.

• 1:00:33Speaker 03

  I will tell you, I, when we got on the plane, because they were like, so we volunteered at the first call, hey, if anybody wants to gate check, I was like, oh, me, we do. So I did, and then they did like three or four more calls. We got on the plane, so much overhead space. I even sent you a picture. I sent you a picture.

• 1:00:50Brian Preston?

  No, it was empty.

• 1:00:51Speaker 03

  It was completely empty, Ben. So I do think they're.

• 1:00:54Brian Preston?

  Yeah. Pants on fire, airlines. We've caught on. I don't know, I haven't figured out their game completely, unless it's speeding up the process. But those overheads are not really full. They are fibbing to us and we've got to work on that. But I couldn't help myself. I wanted to know about Universal, I wanted to know about the gate check, because that was something that just populated a lot of our live stream last week, how I got my, because I saw some Money Guy folks on the plane, but unfortunately, they were right as I was trying to Karen out on the, on the flight attendant. So it is what it is. I'm your host, Brian, joined by Mr. Bo. We'll see you next week. Money Guy, out.

• 1:01:34Speaker 04

  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.

• 1:02:09Speaker 06

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