A Recession is Imminent? Do This Now.

The Wall Street Journal and Goldman Sachs just updated their recession predictions for 2026. What they aren't telling you? Recessions and market volatility hit differently depending on where you are in your financial journey. We're diving deep into Charles Schwab's recession tips while giving you our Money Guy twists so you can build a smarter path for all the ups and downs facing your great big beautiful tomorrow. Then, we answer your financial questions in our Live Q&A, and a new twist to our rapid fire segment: fruits & vegetables edition. ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠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.

• 0:06Brian Preston?

  So a lot of folks are saying a recession is imminent. What should you do?

• 0:10Speaker 01

  Brian, I am so excited about this because if you've been paying any attention at all, it seems like bad things are coming. There are a lot of people out there calling for a recession right now. There's a lot of things happening, goings on in the world that have people concerned. And I'm excited that we can sit here and be the voice of reason.

• 0:32Brian Preston?

  Well, I mean, let's face it, we've got, anytime we have conflicts going on in the world, the socioeconomic stuff, the geopolitical stuff, it's just, there's weird stuff everywhere. And then unemployment has popped up a little bit. The stock market, I mean,

• 0:49Speaker 01

  Up, down.

• 0:49Brian Preston?

  Yeah, but depending upon what week we look at this. I mean, when we came up with this idea last week, it was actually underwater. Then when we record this show today live, we're actually up 1%. So it starts making you wonder what's going on. So surely somebody has this figured out. So off to save the day as we see this stat, according to the Wall Street Journal and Goldman Sachs, is that Goldman Sachs has gone out there and put their reputation on the line here and says the probability of a recession has increased by 30%.

• 1:23Speaker 01

  30% chance.

• 1:24Brian Preston?

  That's a pretty big number.

• 1:25Speaker 01

  That's a big number. It is certainly better than the odds that the House has in Vegas. And so you would say, uh-oh, we should be worried.

• 1:35Brian Preston?

  Well, if you're watching this, you probably noticed a smile came across my face. And you're like, well, why in the world would Brian smile about a, yeah, I speak in third person. Why would I be smiling about a recession probability going up by 30%? And the reality is, is because... They don't really know.

• 1:53Speaker 01

  It's just a guess.

• 1:54Brian Preston?

  I mean, whenever, I mean, they, uh, wazoo, 30%. You know, they, they don't really, they don't, they really don't know. I've been doing this long enough that I've caught on to the reindeer games is that yes, it creates clicks, it creates headlines, but they, they don't really know. So if that's the case, what should you do?

• 2:14Speaker 01

  Yeah, I think it's really interesting. Uh, could there be a recession in the near future? Sure. Could there not be a recession in the near future? Also, sure. One of the things that we know is we know that the future is uncertain and there will be uncertain things that come our way. But if we allow the past to be an educator, to teach us something about what we've seen previously, it's really, really interesting. Look at this illustration. This is from First Trust, and this looks at war times laid over with just stock market performance, S and P 500 going back, well, it's not all the S and P 500, but the global stock market going back to 1928.

• 2:53Speaker 01

  And what it just shows is different conflicts that we've had globally over the last hundred or so years. And it's mapped to what's going on in the market. And you can see, uh, there's not a whole lot of time where there is not conflict. There's not a whole lot of eras or epics where there's not something going on in the world that would cause people to be nervous and unsettled and uncertain. And yet the market kind of just keeps climbing up that hill.

• 3:24Brian Preston?

  Well, and that's why, I mean, look, if you're, if you're looking at this visual right now, there is so much conflict in the world that it's almost impossible to read. The print is too small to, to make it out. And then I, I, I want you to, when in doubt, zoom out. And the fact that I want you to visualize the, the teachable concept here is, is remember how I'm always talking about if you believe in this ever-expanding law of accelerating returns, that the market and the economy is growing, you don't have to get caught up in this. All you have to do is realize, hey, I've got a yo-yo going up and down that I'm throwing down every Every day, every day the stock market's open is the yo-yo being thrown up and down.

• 4:07Brian Preston?

  But the good news is, is every day we're also walking higher and higher up this mountain top. And that's what, so look at, with that visual in mind of you, the investor, are the one throwing the yo-yo up and down, but you're walking to higher ground because of this ever-expanding economy that surrounds us. You can kind of say, yeah, look at this. This is pretty amazing that there's lots of volatility. There's lots of things going on, but we're going to higher ground in the long term. So it shouldn't matter what's going on with that day-to-day swing of the yo-yo.

• 4:39Speaker 01

  So we, there was, there was an article that came out and Charles Schwab wanted to give some recession tips, like if we're going into a recession or if that's something that's coming our way, or we might be heading in that direction. What are some tips? What are some things we can do? And so we just kind of want to give you the money guy take on the Charles Schwab tips to see if this is something that financial mutants ought to be applying. And the first was build up your cash reserves. Now, I almost like this. I almost like this because it says build up your cash reserves. I would argue, hopefully before the recession comes, before it gets here, you will have already had a cash reserve built up.

• 5:22Speaker 01

  I don't want you to wait for the recession and say, oh, now it's a time for me to start actually getting my financial house in order. But we do love when you do have cash reserves, when you have that three to six months of living expenses in place. Because when the unknown unknowns come your way, you can say, you know what? It's okay. I've got the next few months covered. I don't have to make desperate decisions. So if you can have cash reserves, if you can have that buffer, depending upon where you are in your accumulation or decumulation phase, it will allow you to weather that storm that much more smoothly.

• 5:55Brian Preston?

  So a lot of you are like, okay, give me, give me some details. Cash reserves is a pretty, what does that even mean? We try to help you out with that. If you look on the screen right now, we, we tell you the difference between three months or six months. And it really has to do with what your personal situation is because personal finance is personal. If you have high job security, you're not going anywhere, you feel like you are connected to this, this company and your job, that's three months, dual income, meaning you and your spouse both make about the same amount of money, that's going to lean you towards three months. You know, you got, it's easy to go find another job down the street doing what you're doing. You don't have dependents, flexible lifestyle, all that's three months. Now, if you go to the other side of this, and maybe you are the primary breadwinner,

• 6:38Brian Preston?

  we probably ought to have a little more cushion if that's the case. If you're worried, hey, if I lost my job, I have to literally move across the country to find another opportunity because this is a hard job to replace. Build up more margin, you got to have more protection to keep you from those desperate decisions. If you have lots of debt, you know, mortgages, high fixed costs, you got to make sure you're taken into account. That's the big part of this is because we want you to, exactly what Bo said, your cash reserves is what keeps you from making those desperate decisions when the sky and everything else is going to feel very chaotic.

• 7:15Speaker 01

  All right, so building cash reserves or having an appropriate cash reserve is tip number one. The second tip that they give, and this one is critical, and I think this is probably the most important one, is stay invested. Even when the market is going down, even when the recession looms, even when we enter bear market territory, one of the worst decisions you can make is hitting that capitulation point where you say, you know what? I can't take it anymore, I throw my hands up, I sell, I pull out, I go to cash. There's a high likelihood that if you do that, you're going to miss out on the recovery. If you miss out on those early days of recovery, there's a big chance that you miss out on a lot of the recovery in total. So you have to make sure that you have a portfolio in place that allows you to stay the course.

• 8:00Speaker 01

  It's one of the most heartbreaking things we see, Brian, when someone bails at the bottom.

• 8:03Brian Preston?

  Well, this is, this is one that's easy to read and say. Much harder to practice and that's why I would tell you, you need to ride or die with what you've got set up. You have to understand and let me tell you how to do this. Let me go ahead and give you the, the jump ahead to how you think about things differently like a financial mutant. I think it's better than stay invested is I think you go ahead, ride or die and you say, you know, let's, let's actually ABB this thing. Let's always be buying, baby. Because if you can go ahead and set up an automatic investment plan that even during recessions or even during market volatility that you're still buying into it, it's going to change your perspective. You'll actually get excited, especially if you've got decades before you actually need to live off

• 8:46Brian Preston?

  this money. You will say, you know what? This is where money is made is when everybody else is panicking, I'm actually going to be building and multiplying this money in years to come. Turn a negative upside down and turn it into something that's working for you in the long term.

• 9:01Speaker 01

  The next tip that Schwab gave us, they said, okay, if we're heading into recession, if you want to be able to survive some sort of recessionary pressure, figure out how to either boost your cash flow or cut your expenses. Well, you've heard us say this all the time. This is a huge Money Guy echo that when it comes to changing and impacting our financial lives, most of us really only have two levers we can pull. We can either figure out how we make more money, either at our current job with our current skill set, side job, side gig, something like that, or how do we spend less money? How do we cut our expenses? How do we find resources that were not there before that were being wasted? Well, if we're heading into

• 9:41Speaker 01

  recession and you can get as lean as possible on your expenses and as frothy as possible on your positive cash flow, again, you're going to set yourself up that much better to be able to weather the storm.

• 9:53Brian Preston?

  Bo, the last tip, this one caught us a little bit. We thought it was interesting.

• 9:59Brian Preston?

  This is what Schwab said, make strategic portfolio adjustments.

• 10:02Speaker 01

  Interesting.

• 10:03Brian Preston?

  What do you, what do you think of that?

• 10:04Speaker 01

  Uh, I say, eh, do not make strategic portfolio adjustments during a recession because if you're changing things, when the bottom's falling out, when things are scary, when the market has lost a lot of value, there's a really good chance that you're doing it at the wrong time. What you should have done instead is you should have had an appropriate portfolio that matched your unique risk tolerance, risk capacity, age, timeline, goals before the recession happened. So that way you could do it, exactly what Brian said, you could ride or die through the recession with it. If you find yourself making changes and trying

• 10:44Speaker 01

  to tweak things out of fear at the bottom, then I'm worried that you're doing it at the wrong time and you likely did not have the right portfolio going into the recession.

• 10:54Brian Preston?

  Now, look, when we started drafting these show notes, market was down, um, last week, there was more volatility. This week, who knows if we're out of it. Like I said, this, this is going to change from a week to week, day to day basis. But as we're recording this, the market's actually up 1% for the year. This is one of those things where maybe we throw a little life raft to Charles Schwab with these rules and be like, now that we realize, hey, maybe this is a time where you can say, level set, does my portfolio actually reflect what I need for the long term? You know, because if you're the, the 55 to 60 year old that thinks you're going to slam into retirement by taking your vu for life and all of a sudden now added diversification the year you retire, this is probably a

• 11:39Brian Preston?

  wake up call for you. Go ahead and start doing the planning steps you need to do right now so that you do have that portfolio, you have the asset allocation, you have the cash reserves, that you don't have to make any adjustments, no matter what the world throws your way, because you have a plan that reflects your goals, your desires, your risk. So here's the thing that we're trying to figure out now is, You need to understand, and this is the mindset I want everybody to understand, recessions and market volatility hit people differently depending upon where you are in this journey.

• 12:13Speaker 01

  Yeah, if you're someone who's in your twenties, early on, it's probably going to look a lot different than someone who is about to retire. Maybe someone who's already in financial independence, living off of their portfolio.

• 12:22Brian Preston?

  So, early accumulators, you should get excited. Let me go ahead and tell you recessions, volatility, these things are amplifiers to your wealth more than they hurt you because you just don't have as much in critical mass assets yet that you're actually, this is an opportunity for you to get money, I mean, get assets at cheaper prices and let that money grow upon itself. For those of you late accumulation, I resemble this, is that now it's more about you focusing on the asset allocation, your diversification, because you've already, you've got a lot to protect at this point. So, you need to make sure that, yes, you're still trying to grow the assets in the long term, but let's also make sure that we're not taking crazy risk and running up the scoreboard when we already have a lot of successes built in the rearview mirror.

• 13:07Brian Preston?

  And then the last group is decumulation. This is people who are actually living off the assets. Guys, it hits different when you are retired and you're facing volatility. And that's why this is going to be not only you, you kind of add to the late accumulation stage of diversification, asset allocation, but now you want to boost up your cash reserves. You want to boost up areas that make sure that no matter, even if the market is crazy for three to five years, you've got assets that keep you from making desperate decisions.

• 13:35Speaker 01

  Yeah, we want you to have a plan that's good before a recession type thing happens, during a recession type thing, and then even good after a recession type thing. It's one of the reasons why we've put together the Financial Order of Operations. If you've not gone to check it out, we hold this up, you can go get your free copy at moneyguy.com/resources. It is a nine-step process to tell you, hey, here's what you ought to be thinking with your next dollar. Here's how you can make sure your dollars are going in the places that they are supposed to be going, whether the market's looking good, the market's looking bad, or the market is just flat.

• 14:17Speaker 01

  Let it be your guide so that you can stay the course on building towards your great, big, beautiful tomorrow.

• 14:24Brian Preston?

  It's almost like there's a better way to do money.

• 14:27Speaker 01

  Ka-chow.

• 14:27Brian Preston?

  Ka-chow.

• 14:29Speaker 01

  Brent, I love that we get to sit here, that we get to hang out, that we get to do this. Uh, I love that we get to put this content out there. We get to talk about crazy stuff. I love that we have folks, Rebi, it sounds like, are willing to hang out with us even when the stream is going nuts, right? Sounds like we have all kinds of wild, wonky stuff going on. Thank you guys for hanging out with that. We love that we get to answer your questions and speak to the things that you guys care about and answer the stuff that you want us to weigh in on. So right now, if you have a question, we have the team out in the wings, ready to collect your questions. So make sure you get them in there because we really do believe there's a better way to do money. So with that, crib director, Rebi, I'm gonna throw it over to you.

• 15:11Speaker 02

  I have questions queued up, but first, I have a devastating poll to share, some results.

• 15:18Speaker 01

  Devastating.

• 15:19Speaker 02

  The question was asked, "Do we like Bo's mustache?" So-

• 15:23Speaker 01

  This can be devastating for you, I think, is what she means.

• 15:25Speaker 02

  Here's the good news. Only 18% said no. Okay?

• 15:30Speaker 01

  Okay.

• 15:31Speaker 02

  Here's the bad news. Only 29% said yes, because 53% said, "What mustache?"

• 15:39Speaker 01

  Oh, wow. Oh, that is cruel.

• 15:43Speaker 02

  Devastating.

• 15:44Speaker 01

  That is cruel.

• 15:45Speaker 02

  As previously stated. So I just needed to share that.

• 15:48Speaker 01

  I do not know who put that poll together, but it's time for your annual review. So, um- Man, that's harsh.

• 15:55Speaker 02

  Bo will be conducting your review personally.

• 15:58Speaker 01

  Wow.

• 15:59Brian Preston?

  That's good stuff.

• 16:00Speaker 02

  That is good stuff. So I just had to share that first.

• 16:02Speaker 01

  Somebody said, "Try dying the mustache." What if I came in as jet black on Tuesday?

• 16:07Brian Preston?

  It would look just like my koozie. It'd be very much, it'd be very much on brand at that point.

• 16:11Speaker 01

  That's amazing.

• 16:12Speaker 02

  All right. With that, let's dive into the personal finance question.

• 16:16Brian Preston?

  Do the mustache and the eyebrows.

• 16:17Speaker 01

  Oh, why you getting the eyebrows in? Nobody even said anything about the eyebrows.

• 16:21Brian Preston?

  You have eyebrows?

• 16:22Speaker 01

  Oh my gosh. That's messed up. Where are you guys at the first question yet, Rebi?

• 16:28Speaker 02

  We haven't. That was just, uh, first on the agenda.

• 16:32Speaker 01

  She did choose violence.

• 16:33Speaker 02

  All right. First question is from Foo4All.

• 16:37Speaker 02

  I'm 50 years old and married. When should old 401ks be moved to a rollover IRA or into the current 401k? Plus, old HSAs invested above the threshold moving to a new employer? So he's got all of these old accounts. When should they move over? The benefits of leaving them versus moving them? What do you think?

• 17:00Brian Preston?

  I mean, for most people, look, first of all, food for all. You're like everybody else because as financial advisors, we get to see behind the curtain of what people are actually doing in their personal financial life. And I make jokes in prospect meetings that when I look at somebody's, what they bring to me, it's like the quilt of their financial life. I can see what they were investing in by decade. I can see where they had accounts by different jobs. So people just leave stuff scattered all over the place. That's less than ideal.

• 17:31Speaker 01

  Yep.

• 17:31Brian Preston?

  Because we want you to have a concise, you know, we want this to be a system. We want it to be working harder than you can with your back, your hands and your brain. So the way you do that is you know exactly what's going on with every dollar in your army of dollar bills. And the best way to be active on that is I like when you leave a job. Let's try to, let's try to figure out if now if that 401k was outstanding, then maybe it's okay that you left it. But at least it wanted to be a deliberate decision. And that's why I want to encourage you to go to moneyguy.com/resources. We actually have a great decision matrix on what to do with, with old 401k assets. You know, when, when to do rollover IRAs?

• 18:10Brian Preston?

  We try to build this out for you because I like you to take in a proactive role and actually doing it right after you leave a job or starting a new job. So you're not scattering assets out all over the place over your career.

• 18:22Speaker 01

  Yeah, again, that deliverable, you can go to moneyguy.com/resources. And what it's going to tell you is really there are four choices that you can make whenever you leave an employer and have an old 401k. Now, I say four, it's really only three because cashing it out is never. Is almost never a good option, right? Because especially if you're under 59 and a half, you're going to pay ordinary income taxes as well as a 10% penalty to do so. So we're going to rule that out. Well, I can leave it where it is. I might want to do that if the current options are really, really good. The plan is really, really low cost. And maybe I'm executing some kind of strategy like a backdoor Roth, where I don't want to have any IRA assets. I could roll it into the new employer 401k. Again, if the options are good, the plan is low cost, and I want to keep my IRA balances to zero for some strategic reason.

• 19:07Speaker 01

  Or number three, I can roll it over to an IRA rollover. Well, then I can choose a custodian. I can then invest in the entire investment universe. There are no planned costs associated with that. There's only the underlying investment costs of the investments that I choose. That might be a viable option. So you should go check out that deliverable, follow the flow chart. And then HSAs are sort of the same thing. You may not recognize this, but not all HSA providers are created equal. Some will give you the option of like four or five options, and some have like monthly fees if you want to take advantage of the investments. Whereas other providers like Fidelity, really, really easy to open up an HSA, roll dollars into there, get it invested in like low cost index funds. So you have to assess how good is the one I'm with? How good is the one that I could move it to?

• 19:52Speaker 01

  And does it make sense to consolidate? But in almost all circumstances, consolidating down to as few different, unique pieces as possible is going to give you the highest likelihood of making sure you have a cohesive picture put together.

• 20:05Brian Preston?

  That's great.

• 20:07Speaker 02

  Well, that's great, Fooferall. Thank you for asking the question. It is your lucky day because it is Tumblr day. So if you would like to have a Tumblr of your very own, just email [email protected].

• 20:18Brian Preston?

  Reeve, can I? Oh, Tumblr. I didn't even make the sound because the icon quack, quack, quack, quack. I'm a little delayed there. I noticed you have a Masters mug.

• 20:28Speaker 02

  I do.

• 20:28Brian Preston?

  On display. Beau is wearing a Masters shirt.

• 20:31Speaker 02

  Uh huh.

• 20:32Brian Preston?

  I'm wearing a Masters shirt. I would like to share a huge. Human realization I had over last week.

• 20:41Speaker 02

  All right.

• 20:42Brian Preston?

  So I was, I was blessed that I got to go to the Masters last week. And what was really cool is I got to take my youngest daughter with, with us. She qualified under the Young Patron Program, which just fascinating, fantastic program. And the fact that Augusta National has like a member shake your hand and greet your child. It's just a really cool, cool experience. But here's what the bigger point I wanted to bring up to our audience. It is a big sociology experiment. Because if anybody's been to the Masters, and I ran into quite a number of you guys there.

• 21:18Brian Preston?

  You realize the big trade off is you have to, you have to surrender your phone. Like you don't get to take it in whatsoever. And that, that does, you know, at first on paper, that doesn't sound like a big deal. But if you're walking in at 7:30 in the morning and you're not coming out until six to 6:30 at night. I mean, there's almost a 12 hour period where you're completely disconnected from this new world we live in. And do this for multiple days. I had a realization hit me that, that kind of hit really hard on, on some human elements. And here's what I mean by this, is I think every time I go now to the airport, I go to the doctor's office. You go to DMV, you do anywhere where you sit around. What do we all do as humans now?

• 22:00Brian Preston?

  As we all immediately look down and we, you know, we kind of put up our guard and just bury ourselves in our phone to pass the time. When you're at Augusta National for the Masters, nobody has that comfy, you know, blanket to, to just dial into the data and so forth. So you're just sitting there with the other humans all around you. And what I realized in this sociology experiment was humans can't coexist in the same area for more than a period of time without just starting to have social interactions. So I'm at so, my, my social motor is fully like woken up and engaged because I spent the last four days just talking to random strangers. Just building relationships.

• 22:44Brian Preston?

  And you realize how much good as humans we are. I think this. Because we're all in these echo chambers now where that's why the politics is so divisive. That's why we all go home for Thanksgiving and we fight with our relatives and others because the world's different. But if we all could gin up our social motors to what we used to take for granted is just being in the room with other humans. We talked and engaged with each other. It was incredible. Whereas, and that's what something I'm trying to be a little more mindful of now that I've come out of that. And I don't know if I'll be like my granddad was at the grocery store that I go and I'm talking to everybody in the deli aisle. Or the, you know, at the pastries. But I'm probably going to be closer to that because I think that there is just something in the human condition.

• 23:29Brian Preston?

  And it hit me, the iPhone smartphone came out in 2008. We were quickly about to be at the 20 year anniversary to where we now had almost a full generation of people who have never experienced what it was like before we had smartphones. And I think we all need to be very careful and mindful of what that means. And I don't mean to be the old man on the porch, you know, screaming at the sky. But it is one of those big revelations that I had being without a mobile phone for multiple days. And then just the sweetness of understanding the human condition a little bit better.

• 24:01Speaker 01

  I love that. That's awesome.

• 24:04Speaker 02

  I liked it. Good tangent time and report from the masters.

• 24:08Brian Preston?

  But I think that's why there's restaurants that are now having people put their phones in these bags. I know comedy clubs do it too. I think I might look for some of that stuff.

• 24:17Speaker 01

  So it sounds like what Brian said, you know, obviously we have our Discord channel where we all get to like interact and kind of communicate and become friends sort of digitally. But man, Brian's advocating for like an in-person thing, right?

• 24:28Brian Preston?

  Well, no, I do like, I do like in-person stuff.

• 24:30Speaker 01

  Money guy meetup or something like that.

• 24:32Speaker 02

  Where everybody has to put their phone away.

• 24:34Speaker 01

  Look at that. And you have to meet and talk to other financial mutants.

• 24:38Brian Preston?

  Well, I think there's a human, I've often said this, like I go, I love music. And there is something about you go to a concert, even for an artist that you don't love. But if you see an artist perform in person, there is a, there is something in us that makes us connect with other humans. And I think that we need to make sure we're just not disrespecting that. Because there is something wired in us to connect with each other more than there is to fight with each other. Which it seems like we, the digital stuff hasn't necessarily, there's a lot of efficiencies that have been brought to life. But it doesn't necessarily make the relationship side of things better in my eyes.

• 25:17Speaker 02

  Well.

• 25:17Speaker 01

  Can, will you do a chat for me? I just am curious. Ask the, ask these folks, hey, if we did like a Moneyverse meetup, would you travel to come to that? Let's ask them that. Would you travel to come to like a?

• 25:26Brian Preston?

  I'd love that. I would love that.

• 25:28Speaker 01

  I mean, if we're going to talk about meeting face to face, we might as well figure out if our people, let's do it. I like it.

• 25:34Speaker 02

  I like the idea.

• 25:35Brian Preston?

  I'm not going, come on, you know me. You get to he- hear these pont, you know, me pontificate on things in person. Why, why not?

• 25:44Speaker 02

  A tangent time breakout session. We'll see. All right, well, for now, we've got Kyle S.'s question. It says, how do you navigate retirement planning when you can comfortably live below the 80% of pre-retirement income you guys normally recommend? I'm a bit of a debt crusader now and plan to live modestly. What do you think?

• 26:05Speaker 01

  Yeah, early on, we're talking about horseshoes, right? We want you moving directionally in the right direction. We want you saving 25% of your gross income to move directionally towards this financial independence, this number that you have. But as you're moving along your financial journey, rather than you just implementing like general advice, hey, I generally should invest in a target retirement index fund and I should generally be saving 25% and I should generally be doing these steps of the financial order of operations. At some point, we want you to graduate from sort of the general guidance to the very specific guidance. Hey, for me and my personal situation, this is the goal that I'm trying to achieve. I want to, at age 60, be able to live off of 60% of my pre-retirement income.

• 26:49Speaker 01

  I know that I'm going to have expenses of $4,000 a month that I need to be able to replace. And as you begin, as that picture begins to become more and more clear of the ultimate finish line that you're moving towards, the steps that you'll take and the tactics that you'll begin employing will become more unique and specialized to your situation. So how do you navigate retirement planning when you can comfortably live below the 80%? You should arrive at the realization that perhaps 80% income replacement is not what's necessary for me. What I really need is a 60% or 50% income replacement and based on my savings rate, because I have such a low standard of living or relative to my income, low standard of living, I'm going to be able to save very, very aggressively and I might

• 27:33Speaker 01

  be able to get there much more quickly than the standard path. That's totally okay. You got to figure out, define what that is for yourself.

• 27:41Brian Preston?

  Yeah, I mean Kyle, what Bo's basically sharing is expenses. When you get within five years of retirement, use your actual expenses. That's, that's what's going to be more of the driving force of your success of how good your, your nest egg or your financial assets you've built up. I do want to address something you said there with the second part of this is a bit of a debt crusader now and plan to live modestly. What I don't know, Kyle, you didn't put your age in this, so maybe you can share that with us. Because what I worry about is somebody who's in their twenties, thirties, and even early forties, before 45 years of age, was when your wealth multiplier, if you don't know what that is, go to moneyguy.com/resources, you can see what every dollar in your army of dollar bills

• 28:23Brian Preston?

  could actually become if you invest it. And because I worry, a lot of people, when they do the debt crusading before 45 is you need to build your army of dollar bills up to kind of be there for you, to actually work hard for you in retirement versus you just counting on your modest lifestyle to get through. And what I also worry about for 20 something, 30 somethings, when they're basing their retirement off of how modest they live now, I'm like, you still have a lot of life that's still going to happen. You know, there's a lot of, you know, people that if you don't think kids are going to blow up, what's going on when you start planning for what their life looks like, all their activities, even college funding and typing those type of things for the future, you're misleading yourself

• 29:05Brian Preston?

  is because kids will definitely have a big impact on what your household expenses are. So you, you just need to be further beyond that. So you can fully understand how am I going to have all my debt paid off? Once I'm, you know, 50 and beyond, how am I going to make sure that I know what my living expenses are? How do I make sure I get, you know, full launch on my children, getting them out of the house? All those things are going to help shape, but the, the driving factor you need to focus on is when you are five years from retirement, make sure you're using actual expenses to now start running all the Monte Carlo simulations and the risk factors and seeing how stress test this plan is versus just doing the rules of thumb. That's why the, the safe withdrawal rates and all those things are great for napkin planning.

• 29:49Brian Preston?

  You need a real plan with real stress tests when it's actually going to be on the line and you have to live off this money.

• 29:56Speaker 01

  Love that.

• 29:58Speaker 02

  Thanks Kyle S. for the question. If you'd like a Money Guy Tumblr, just email winner at moneyguy.com. It's time to get your rapid fire questions in the live stream chat. Just put RF at the beginning of your question and we will add it to our rapid fire segment pool of questions. We will be throwing in a fun twist today along with the normal rules that Bo and Brian cannot say it depends in their rapid fire answers. So go ahead and get those questions in and then in the meantime, we will ask our next long form question.

• 30:28Speaker 01

  I'm ready for the twist to be that rapid, that it depends is a totally acceptable answer. Like we can say that, that's fine. That's what I wanted.

• 30:35Brian Preston?

  I still, we had a great brainstorm. I don't think I'm going to say it publicly what it is. I don't know why we're not doing that where there ought to be a hat in the, maybe a master's hat should be here right now for us to do some, pull some things out.

• 30:46Speaker 02

  Did you get us one?

• 30:48Brian Preston?

  I can probably find one at the house.

• 30:51Speaker 02

  All right. Next question is from Now Even. It says, hey guys, after following you for two, after following your 23 eight car buying advice, how long do you recommend keeping the car to make owning it worthwhile? Is it seven years like home buying or something else?

• 31:09Brian Preston?

  No, for, look, I don't mind. Now, look, I just said look a lot.

• 31:16Brian Preston?

  During my wealth accumulation and building years, so I would say sub 45, I was driving cars for over a decade. Every now, look, I don't resemble that now. I know I've given up my tight wide card in a lot of ways, but it hasn't been to my detriment because, but there was a time and a place, I mean, you and I traded a car, that Lexus.

• 31:36Speaker 01

  Back and forth a few times.

• 31:38Brian Preston?

  I mean, I drove that car for 12, 13 years and my wife's cars were always driven for a decade. You drive them as long as you feel safe in them.

• 31:47Speaker 01

  Yep.

• 31:48Brian Preston?

  That's what I've always done. Now there will be issues like my wife's Acura. We ended up having to give it away. She got a bad oil change where they stripped out the bolt that holds the oil and it had a leak and then the oil ran too low. And then that car never ran the same. It started burning oil and doing other things. And I felt like I was like crud. If we'd have just, if this thing had not had the issue, probably been able to run this thing for another two years. But it just got to where it wasn't safe anymore for my wife when it started burning oil. And so that's what I always based it off of. But that Lexus, until I got it to you and you, you tore the engine all apart, that car would have ran for another 30 years, I think. It had a few drips. If you don't realize, a car that's 12 or 13 years old is going to have a few drips,

• 32:33Brian Preston?

  probably coming out of it.

• 32:34Speaker 01

  It's okay. When I sold it back to you, it was a peach. I got it. Put a bunch of money into it, made it a lot better than sold it back to you. It was awesome. This is, this is not science, but you know, me and Brian make this joke all the time. When someone ever tells us, oh, hey, I just finished paying off my car. Like, man, it sure does drive better, doesn't it? Cause it always drives better when it's paid off. If you did 238, meaning you financed it for three years or 36 months, at a minimum, and look, there's no science to this. You can write this in pencil. At a minimum, I think you ought to drive it for as long paid off as it took you to pay it off. So if you're gonna buy it and pay it off in three years, at a minimum, I want you to drive it for three years with no car payment. Now, in reality, I want you to go farther than even six years total.

• 33:17Speaker 01

  But if you're buying used cars, I get it. But if you're buying a relatively new car and you can get seven, eight, 10 years out of it. I think that is awesome and your future financial self will likely thank you for it. Um, my, my wife right now, uh, desperately wants to get into a new car, like she wants a new car.

• 33:36Brian Preston?

  I've heard some of those conversations.

• 33:38Speaker 01

  Like literally, she looks, yeah, she, she's, she wants to be in a new car. But I'm like, hey babe, there's a few reasons. One, the car that we're in right now is only like four years old, right? So it's still relatively, you know, relatively new. And at this stage of life, any new car that we get, any nice car, the kids are not at the age where they like take care of it and do the right thing. So some of it is like, hey, yeah, if you're, if you're in the messy middle and you have a car that has a bunch of chicken nuggets in it, maybe drive that car for a little bit longer so you can save future chicken nugget mishaps in the new car.

• 34:12Brian Preston?

  The, the big thing to know is car transactions work against your wealth building. So the fewer transactions you can have while you're in that accumulation or make wealth phase, the better for your long-term success.

• 34:24Speaker 01

  Yep. Love that.

• 34:26Speaker 02

  That's fantastic. Um, now Eman, if you would like a money guy Tumblr, just email winner at money guy.com.

• 34:33Speaker 01

  Can I throw one thing out there?

• 34:35Speaker 02

  You can.

• 34:35Speaker 01

  This, this part's for free. Uh, if you're someone who trades cars often, like I, I'll, I'll get a new car every three years, every four years, whatever, something like that. You're not at least driving for five years. You should at least entertain the idea of looking at leases, right? Because if you are, if the number of transactions is what is kind of like working against you and you're buying a car and buying a car and buying a car, there's really good chance you're just paying for depreciation, paying for depreciation, paying for depreciation. You might be one of those people that are better off leasing. So you at least have to do the mathematics around that to make sure.

• 35:07Brian Preston?

  I think that would be a step eight though.

• 35:08Speaker 01

  Oh, of course.

• 35:09Brian Preston?

  I don't, I don't think if you're, if you're flipping cars before you're at step eight, you really are probably working against that make wealth phase first.

• 35:18Speaker 01

  Well, that's why somebody was being funny like, oh, if I, if I pay cash, I mean, I'll have to drive it for a year. No, if you only drive your car for a year, you're probably doing it.

• 35:25Brian Preston?

  It's back to the key point. The lowest common denominator is vehicles. Now, look, somebody's going to point out, I got a 67 Mustang. I got a 57. I'm like, no, those are, those are different types of car. The, the 99% of cars that people are driving out there are working against their wealth building.

• 35:46Speaker 02

  Thought I was gonna sneeze. I was like, oh, this timing is terrible.

• 35:48Brian Preston?

  I thought you were dabbing what a good answer that was.

• 35:50Speaker 02

  No, no, I was just like, oh no, I'm gonna sneeze, I'm gonna sneeze, but pass.

• 35:53Speaker 01

  Did you just do another dab?

• 35:55Brian Preston?

  Well, she, she was the one that did it. I was just, I was reproducing. You did. Well, you, you went to go protect yourself.

• 36:01Speaker 01

  That's two dabs in 2026. It's a good year for Brian Preston this year.

• 36:04Speaker 02

  I like this version of Brian Preston. All right, with that, it is time for our rapid fire segment, our It Does Not Depend rapid fire segment, where Brian and Beau have a combined answer in 30 seconds or less to your burning questions, and they cannot say the words. It depends. The added twist is that if you can work in the name of a fruit or vegetable into your answer, you get 10 points. And whoever has the most points at the end wins. Now, you cannot just say apple.

• 36:35Speaker 01

  It's gotta be organically, right?

• 36:36Speaker 02

  Yeah, you can't, like, just because you say it, it has to be worked in.

• 36:39Speaker 01

  You can't just name fruits and vegetables.

• 36:40Brian Preston?

  Oh, y'all do it how you want to do it. I'm gonna do it the way I want to do it.

• 36:43Speaker 02

  If you just start throwing out random vegetables for no reason, I will say.

• 36:47Brian Preston?

  Yummy, yummy, yummy fruit salad.

• 36:51Speaker 01

  What?

• 36:52Brian Preston?

  I just threw some wiggle, wiggles in there.

• 36:55Speaker 02

  Wow.

• 36:56Speaker 01

  All right, cool.

• 36:58Speaker 02

  All right. Um, okay. With that, we are gonna dive in. We're gonna get 30 seconds on the clock and get to our first question. You guys ready?

• 37:06Speaker 01

  Yes, ma'am.

• 37:07Speaker 02

  All right, it says, I'm getting married in a month. Do y'all have any marriage advice, financial or non-financial? You pick.

• 37:17Brian Preston?

  I would, um, figure out which chores, because the first two years of marriage were the hardest for me, is figure out what chores y'all are gonna be doing around the house and figure out which ones you hate. Maybe outsource some, or at least have clear roles on how y'all are gonna integrate everything.

• 37:30Speaker 01

  Yeah, I think communication is key. In the chores, some of you might like apples, some of you like bananas. You gotta make sure you understand which one is which. And understand what the other person values. If you can do that early on in the marriage, you're likely gonna set yourself up for long-term success.

• 37:45Speaker 02

  20 points to Beau Hanson, and that's time. All right, next question.

• 37:49Brian Preston?

  My brain just doesn't do, I'm struggling. I feel like, this is what Beau feels like in the ocean, is because I am just trying to get an answer out.

• 37:57Speaker 02

  He had to take you down. Okay, question number two is, what is the benefit of traditional accounts for those who have pensions?

• 38:06Speaker 01

  Traditional accounts, meaning like pre-tax accounts?

• 38:09Speaker 02

  I believe so. Like traditional retirement accounts.

• 38:12Speaker 01

  Well, even if you have a pension, but you're someone who's in a higher income situation, those pre-tax accounts will likely provide you with a very valuable current year tax benefit.

• 38:22Brian Preston?

  I like the fact that you, you can build Roth assets too, which grow completely tax-free. And nothing gets you banana happy like a, like a, I can't even say it. It's so dumb. I'm so horrible at this.

• 38:37Speaker 01

  Nothing gets you banana happy?

• 38:39Brian Preston?

  I really like bananas. Have you never, have you never seen a minion?

• 38:44Speaker 02

  You know what? 10 points to Brian. A for effort.

• 38:46Speaker 01

  Rebby loves me. This thing is so rude.

• 38:49Speaker 02

  You're still winning, Bo. Okay. Next question I'm really looking forward to. What counts as a luxury car? Is it a dollar amount, a brand, a percentage of something?

• 39:04Speaker 01

  Well, it can't be a lemon. You want to make sure that you're getting a car that actually you can drive for a long time. You don't want to get one of these luxury cars that like is in the shop all the time. So when you think about luxury brands, I'm thinking like Mercedes, BMW, those types of things.

• 39:20Brian Preston?

  No, you want your car to be a peach. That's the, the, the big thing. So it needs to really reflect what you, how you feel about vehicles and your financial goals. See, this is the problem. I was so focused on the peach. That can't even answer the daggum question.

• 39:35Speaker 02

  That was so good too. All right. 10 points for each of you.

• 39:38Speaker 01

  We're going to come back to this one. Luxury brands. That's one, that's one the people need to know.

• 39:43Speaker 02

  All right. Question four. When does step seven end and step eight begin?

• 39:51Brian Preston?

  Yeah. Well, step seven is you're, you're basically thinking of how you, instead of just accumulating for the sake of accumulating, you think how you're actually going to use the money. So once you've kind of done the efforts of actually looking at your three buckets, pre-tax, after-tax, and tax-free, you can go.

• 40:07Brian Preston?

  I'm not even gonna do it.

• 40:07Speaker 01

  One through six is the main course and even getting into seven, that's the main course. Once you get into eight, once you get to 25%, you graduate pass. Now we're adding the dessert. We're adding that peach pie, the apple pie, the cobbler. We're adding those pieces that make financial life so much happier. You gotta, but you gotta do the base stuff first.

• 40:27Brian Preston?

  The man is good. I mean, he is so deck of good at this.

• 40:31Speaker 02

  Twenty more points to Bo.

• 40:31Brian Preston?

  If you ever want to know proof of whose brain works faster, it is Bo Hanson.

• 40:36Speaker 01

  But you know, this isn't a game of speed. You know what I mean? It's a game of quality. And if we're going for quality over time, my money's on you.

• 40:44Speaker 02

  True that.

• 40:45Speaker 01

  Been doing this for 20 years, you have.

• 40:47Brian Preston?

  20 years? Oh, podcast.

• 40:49Speaker 02

  Podcast, yeah. You're the OG. All right, next question. Uh, what's your, what was your favorite hole in Augusta and why?

• 40:57Brian Preston?

  Did somebody really ask that?

• 40:58Speaker 02

  Yeah.

• 40:59Brian Preston?

  Hole 10. My father-in-law is the reason we even get to go to the Masters. And, um, he always, the, the, the three times I got to go with him, he took us to hole 10. We'd set up on hole 10. It's got a false front. It's fascinating and, um, it just makes me so Kiwi happy.

• 41:18Speaker 01

  Uh, I was fortunate enough to get to go to the Masters a few years ago. I love setting up online, getting to go see Amen Corner. I loved being on eight, we went to 18 for a little bit and watched people come in and finish the round.

• 41:27Speaker 02

  And time. That made me Kiwi happy. Brian, 10 points for you. All right, next question.

• 41:36Speaker 02

  Is it best to take a lump sum or monthly pension payments and why?

• 41:44Brian Preston?

  Look, you want to make sure you don't eggplant this thing up. So you really gotta, you gotta, you gotta make sure you do the math. I mean, it really comes down, it is a math because I've, I've done this so many times that sometimes the lump sum is best. And sometimes the pension. So you have to actually do the math on the, on the situation. It's not a one, one size fits all.

• 42:02Speaker 01

  It's not always the same either. One person may determine that lump sum made more sense. Another person might determine that the annuitized option made more sense. So like you said, you have to do the math.

• 42:13Speaker 02

  All right, 10 points to Brian.

• 42:16Speaker 02

  Next question. If I'm saving in a Roth 401K, is it okay to use my Roth IRA for a first time home purchase?

• 42:26Brian Preston?

  It's less than ideal.

• 42:28Speaker 01

  No, watermelon.

• 42:29Speaker 02

  That does not count. All right, is that all you have to say? You have 20 more seconds.

• 42:34Brian Preston?

  I want to squash that because it just, it works against, it works against your tax-free growth. You need this money in retirement. So that's why we give you the 3% down payment to work around this so you don't have to go use these type of really growing assets.

• 42:52Speaker 02

  Hats off to you, my friend. 10 points.

• 42:54Brian Preston?

  A slow learner.

• 42:55Speaker 02

  You guys are now tied up on the fruits and veggies game, and we only have a few more questions left. So do with that what you will.

• 43:03Brian Preston?

  If only you didn't have all that horsepower going to the growing the stash.

• 43:06Speaker 01

  I know, right?

• 43:07Brian Preston?

  I could use that right now.

• 43:08Speaker 02

  All right, next question. 29-year-old, going to law school next year. Should I pay for it out of my investment account or take out a loan and why?

• 43:21Brian Preston?

  Now, see, we need more.

• 43:24Speaker 02

  Brian just sat back. He was like, I refuse to answer this.

• 43:26Brian Preston?

  No, it's just, I need, I need more information.

• 43:33Speaker 01

  If you have a large investment account, you could likely use that to pay for education, but there's a real opportunity cost of that. If you're going to borrow, you want to see what the interest rates are and that sort of thing, taking out a loan, you have to measure the pros and cons of each.

• 43:48Brian Preston?

  I would typically say pay for it.

• 43:50Speaker 01

  We gotta, we gotta come back to that one.

• 43:51Speaker 02

  We'll come back to that. All right, next question. What is your suggestion for combining assets after marriage?

• 43:58Brian Preston?

  I really do think it's bananas to go separate accounts. I mean, but I'm biased. I mean, I've been, I've been married almost 30 years. I've been married almost 30 years and I don't know what that even was, but um.

• 44:10Speaker 02

  Did you say something bad?

• 44:12Brian Preston?

  No, actually, nevermind. I've been married almost 30 years and it's just hard when, to do things separately because power, you want to take the power out of the money.

• 44:21Speaker 01

  I think combining stuff at the front end makes a ton of sense.

• 44:26Speaker 02

  Great answers. 10 points to Brian.

• 44:28Speaker 01

  He's crushing me now.

• 44:29Speaker 02

  He's crushing you. All right, last one. If we all vote for it, would Brian grow a mustache? A matching mustache to Bo?

• 44:40Brian Preston?

  Before we agreed to that, I would need to check with my wife. Because if my wife doesn't like mustaches, I'm not going to grow a mustache.

• 44:50Speaker 01

  Aren't you sure? Trying to come up with one.

• 44:54Speaker 02

  That wasn't bad. That wasn't bad. Should I give it to him?

• 44:57Speaker 01

  I think you should.

• 44:57Speaker 02

  What does the room think?

• 44:58Speaker 01

  I think you 100% should. And I think-

• 45:00Speaker 02

  Ken says yes.

• 45:00Speaker 01

  I think that Mrs. Preston would say, but yeah, absolutely.

• 45:02Brian Preston?

  There is no way my wife is gonna agree to a mustache.

• 45:06Speaker 02

  All right. With that last 10 points to Bo, we have ended the It Does Not Depend Rapid Fire with a tie of 60 to 60.

• 45:15Speaker 01

  Look at that.

• 45:16Speaker 02

  Honestly, well done. You had a few drop-ins in there that I was very proud of.

• 45:20Speaker 01

  That makes me mango happy.

• 45:22Brian Preston?

  I think, I think I had the-

• 45:23Speaker 02

  Kiwi happy.

• 45:24Brian Preston?

  You know-

• 45:24Speaker 02

  Honestly, if I took out Brian's two, uh, fruit happy ones, he, then maybe it would be different.

• 45:29Brian Preston?

  We drink carbonated beverages. I've been doing this for 20 years, as y'all said. I've never had where that created where I almost belched on air.

• 45:38Speaker 01

  Is that what that was?

• 45:39Brian Preston?

  That's what that was. And I was so horrified.

• 45:41Speaker 02

  That would've been so good.

• 45:42Brian Preston?

  And just, it just, I was, it was, I was, I was mortified by it. So it just, that's what the reaction. I shouldn't be so confessional, but I wanted y'all to know what happened.

• 45:51Speaker 01

  Literally, we had no idea.

• 45:52Brian Preston?

  20 years, I've never had that happen, so.

• 45:55Speaker 02

  It is now time for our Maybe It Does Depend segment, where you get to go back to any questions where you didn't get a chance to say all that you needed to say. The first one I had flagged was question three about luxury cars.

• 46:06Speaker 01

  What, what actually counts?

• 46:06Speaker 02

  So what means, what is luxury?

• 46:08Speaker 01

  As luxury car, because there's some nuance. Obviously, it's the, it's the fancy brands you might be thinking, right? It's BMWs, it's Mercedes, it's those types of automobiles. But I would also argue, even if you're buying a, a normal brand, you're buying, uh, Honda, you're buying a Toyota, if you're going out and buying a Land Cruiser, that doesn't, that's still a luxury automobile. If you're going out and buying the highest end, top of the line. So, yeah, it's a little bit subjective because some brands have luxury versions of their cars and non-luxury versions, and some brands only have luxury versions and no non-luxury. So you have to like, be realistic about what you're buying, because what may be luxury to you may not be luxury to someone else, but you have to make sure you're doing that well, so you don't blow up your finances.

• 46:57Brian Preston?

  Remember, the umbrella that sits on top of all this is the fewer amount of- Car transactions you can do while you're in the accumulation years, the better you're going to be and the lower the footprint of each one of those transactions is better. That's why the first probably three cars I drove after I graduated, well, all through is were all used cars. And then when I transitioned to new cars, they were not luxury brands. And when I say luxury brands, I mean, we can all say the BMWs, the Mercedes. I used to say Tesla. No, I will tell you, I think that the threes and Ys are some of the most affordable cars out there.

• 47:31Speaker 01

  Not like, so threes and Ys.

• 47:33Brian Preston?

  Well, they don't even make the Xs and Ss anymore. Those are going away. So now pretty much you just have, I mean, and if you don't think that, Google, look down your street. I guarantee you that people are driving Model 3s and Ys like you do Honda Accords and Toyota Camrys. So I don't think they're luxury cars anymore, but it's, but I definitely think the minimize the automobile transaction as much as you possibly can while you're in the accumulation and wealth building years.

• 47:59Speaker 01

  I love that. The next one I had was about the law school one.

• 48:03Speaker 02

  Yes, I said, cause Brian didn't even answer.

• 48:06Speaker 01

  Will you reread that one to me? Cause there's some, there's some stuff in there.

• 48:09Speaker 02

  Yeah, I know there's truly a lot of factors here. 29 years old, going to law school next year. Should he pay it, pay for it out of his investment accounts? Apparently he's got some investments or take out a loan.

• 48:21Brian Preston?

  Here's the things that hit me immediately. I don't know the account structure because this is all after tax assets. Is some of this like Roth assets or, or, you know, or traditional assets? I just, I didn't know that. And then I didn't know, what are they offering on student loans is cause you know, student loans is this 7% interest rate or is this, you know, 4% interest rate? I needed to know just a few more variables, but I mean, but I would prefer, obviously if you have resources, if you can pay it off, but, but here's the thing. It also goes in, there's a third tangent here is that I want you to be thinking about the cost of the education in general too, is I don't want you just because you have resources that you like, well, let's just go pay and go to school here or do that.

• 49:02Brian Preston?

  I mean, there's so many things that go into the answer, like where you live on campus. You know, how you're building up the things, because that's what a lot of people will take student. Loans even for lifestyle and that drives me crazy as well. So I kind of need, I'd want to have a discussion about what goes into education to give you the best result. Cause what's the best result? Get out of college and get into your professional life as cheaply as possible with the least amount of hangover from debt. So that you can go live your best financial.

• 49:32Speaker 01

  I even want to know like, and this kind of is what you said, but like, how much is lost? Like, are you talking about a $20,000 law school education? Or $200,000 law school education? Cause it's 20,000, you have a big portfolio and you can pay cash. Great. If you have to liquidate everything and go pay cash, that $200,000 education, one, I want you to assess, why am I going to do the 200,000? Is there a justifiable reason to do that? And then two, is the opportunity cost of taking all of those dollars off of the playing field? Actually worth it. So there's a lot of like, there's a lot of deep nuance to that one. That is not.

• 50:07Brian Preston?

  Finances personally.

• 50:08Speaker 01

  Yeah, there's not, that is not a rapid fire question.

• 50:12Speaker 02

  And yet it was.

• 50:13Speaker 01

  And yet Rebi is the.

• 50:15Speaker 02

  The only, I mean, Bo, you didn't really get to finish your answer on your favorite hole in Augusta. Did you say, oh, you needed to say?

• 50:21Speaker 01

  Oh, no, it was just cool. So I, when I went to the masters I was for, I got to go with Brian, which was awesome. And he's got, and it was cool getting to see just, uh, cause I had, I've never experienced anything like that. Like it was just a wild, unbelievable experience. Um, I wish I could remember specifically what hole was my favorite. I just remember seeing the holes that I've watched on TV so much. You know what I mean? And so just kind of cool getting to see it in real life.

• 50:43Brian Preston?

  10 is special to me. It really is. Cause it makes me, I feel like when I'm out there, masters does, I think that it really is, like I said, it was a very big experience. Thinking about the social, social motor and way they've crafted that thing. It does make you feel like you're connected to something and, and being at hole 10. Cause like I said, my father-in-law has been deceased for a number of years now. Um, and knowing how special that hole was for him, it kind of, it gives you some, some. The hair on your arms kind of stands up a little bit and gives you the tingles thinking about the, the legacy of having those memories and the blossoming memories.

• 51:21Brian Preston?

  Of that I go back and hole 10's go still look the same. They go put the, the pin and day two at the front of that, of the false front there. And the golfers go hit up there and it's going to be as slick as a tabletop and it's going to fall off for some of them. It's just, it's fascinating and it's just cool.

• 51:37Speaker 02

  So fun. I figured you would have a good answer for that and you did not disappoint. I appreciate that. All right. Fun rapid fire segment, guys. Let's do a couple more long form questions to wrap out this Ask Money Guy show. Next one is from Batman Foo Rever. It says, I live in a state where my employer must pay out my vacation days if I leave my job for any reason. Can I factor my accrued PTO into my emergency fund?

• 52:05Brian Preston?

  I don't think that. I think that goes more into the retirement plan than it does into the PTO. Cause I know a lot of my education clients, we did use their excess retirement to kind of work on building the retirement plan to leave early.

• 52:19Speaker 01

  It's not a fruit or vegetable, which can't count those eggs till they hatch. That's a thing that could happen. That's a thing that likely could come your way. I don't think you can count it towards your emergency fund or even your retirement plan until that manifests. Cause one of the things the emergency fund is there for are for emergencies. Losing your job could be one of those. But what if you don't leave your job? What if your emergency is a medical thing or an HVAC or something? It's not like you get that PTO paid out. You said have to leave the job. Well, that's one emergency that it would be there for. There's a plethora of other emergencies that could come your way. So I don't think you can count it towards that. I do think you can factor it into your accounting on when you retire and when you go into financial independence, especially if you're banking

• 53:03Speaker 01

  it. But like, I'm probably not listing that as a line item on my net worth statement every year. Because company policy could change. They may change the policy at some point in the future. Say, hey, we used to do this thing, but now we don't do that thing anymore. And so I just, I'd be careful counting money that hasn't shown up and isn't like a verifiable source of funds, like a pension or something like that.

• 53:26Brian Preston?

  And don't be trying to cut the corner off of emergency reserves. Financial meetings do this stuff all the time. We do mental accounting to figure out how we can get our cash reserves to be as small as possible because we think cash is trash or, you know, other things. No, this is going to be your layer of protection. Think about it as like a bulletproof vest in this crazy world we live in. The more margin and protection you can give. The more protective you can be from desperate decisions. And I often have said in step eight, an extra healthy cash reserves. I also turns into, because my cash reserves has expanded over the years. And that's what's allowed me to buy assets when everybody else is panicking and freaking out. When it comes to real estate and other things, all of a sudden, cash reserves can become a superpower.

• 54:09Brian Preston?

  When everybody else is without that very powerful resource.

• 54:14Speaker 02

  Good stuff. I thought that was quite the leap to get from PTO to.

• 54:20Brian Preston?

  Did it make you twitch a little bit seeing the Batman? Because you remember when you had to dress up as Robin?

• 54:25Speaker 01

  No, Brian, it didn't. I'd kind of blocked that out. Thanks for bringing back those memories. We just had a magical moment talking about the masters and you're going to bring that up.

• 54:33Brian Preston?

  Bring it back. I want to give you a compliment because I do pick on you a lot, but I want to give you a compliment. Because I bought you a large shirt last year, too. This year, they don't fit your arms anymore. I mean, you were, when I walked in, you were wearing this. I was like, Bo, do I need to get you an extra large just for your biceps? I mean, it is, it's kind of crazy.

• 54:50Speaker 02

  Oh, my goodness.

• 54:52Brian Preston?

  I don't know. I don't know what your, what the diet is.

• 54:54Speaker 01

  Well, just like with investing, it's about consistency and time, consistency and time, consistency and time. Same thing when you go to the gym. You wake up, you go to the gym, good things happen.

• 55:03Brian Preston?

  And y'all should know, Bo gets up at like 4:15?

• 55:06Speaker 01

  4:13 every morning.

• 55:07Brian Preston?

  I don't know when you sleep, but he is like at the gym with all these other bod men. You know, they're just, you know, doing this thing.

• 55:17Speaker 01

  Ah, me and the bod men. It's awesome.

• 55:19Speaker 02

  Great. Um, I also need to give Batman Forever a Tumblr if he would like one. Since we answered his question, just email winner at moneyguy.com. Wanted to make sure you got your chance, Batman Fu-Rev. All right, let's do another question. Blair T, what are you looking for?

• 55:38Speaker 02

  He's just looking around.

• 55:39Brian Preston?

  Because I gave, I gave something on the set to be put on the set and I was, I didn't look. I came in so sideways for the show today. I didn't even look to see if it was there.

• 55:47Speaker 02

  It's a secret. It is there. You can't see it. In, in Brian's shot, there's an Easter egg. All right, Blair T. asks, "For the three bucket strategy, is the goal to be even? I'm 25 and can contribute more to my Roth 401k beyond 25%, but don't want to be retirement rich and individual brokerage poor." Roth has 53K, an individual is 34K, I believe, that means two different accounts. Would you agree with that?

• 56:16Speaker 01

  Being, yes, yep. Being, uh, being retirement rich is not necessarily a bad thing. If it's all Roth and you're going to retire after 59 and a half, because then the Roth dollars are great. Most people, however, find themselves in a situation where they get an employer match, so that likely is going to go in the pre-tax bucket. And then, most people want to leave the workforce, especially at higher savings rates, before 59 and a half, or at least have some sort of flexibility to be able to do that. And so that's where the after-tax bucket comes in. A lot of people think three buckets, it should be a third, a third, a third. But the way that we're able to accumulate, obviously, doesn't allow us to arrive in that place. I mean, you can think about just in terms of limits, like IRA limits are 7,500, but

• 56:59Speaker 01

  401k limits are 24.5. And, uh, so it's a difficult thing to get them in nice even buckets. The ideal mix is unique and specialized to you, depending on what you're want to do with it, what you want to do with the dollars, and when you want to be able to utilize it.

• 57:15Brian Preston?

  Look, the, the people's structure, their, their, their tax structure is like fingerprints. I mean, they really are different for everybody comes in. And we, but I know that, just from the Financial Order of Operations, there's a good chance when you get through step six, you're going to be weighted towards retirement assets. And there's a good reason for that. If your employer is offering you dollar-for-dollar match, you gotta get in there and get that. That's because these are amplifiers that are going to help make your journey to building wealth that much faster. If you're getting, if you're saving your young person and you're a low tax rate, you're crazy if you're not taking advantage of the tax-free growth opportunity of those Roth assets. That's why we built in step seven, though, is because that's when you say, "Whoa, I've

• 57:56Brian Preston?

  just come through all this tax-favored or free money that my employer's given. Now let's think about..." How we're going to use this because I don't want to be 42 years old and not paying cash for vehicles because all my money, I'm a millionaire in my retirement accounts. But that's what step seven is going to help you look at is you're going to say, okay, maybe now I'm at the phase where let's start figuring out how we get some after tax assets so that I can get into real estate or I can pay cash for my vehicles or I can retire at 55 versus 65. That's why I love having step seven. It's kind of a, take a deep breath, think about how we're going to use this money. And now let's move on to step eight, which is abundance goals and prepaid expenses. That's why we, this thing really is your all

• 58:41Brian Preston?

  terrain vehicle. We've been managing money for collectively between the two of us 50 years. We've built this into the system so that it works and it's, we haven't been able to break it. I mean, that's what I'm very proud of what we've created because it really does help you live your best financial life.

• 59:00Speaker 02

  Good stuff. Blair, if you would like a Money Guy Tumblr, just email [email protected] and we'd love to send you one. This episode of Ask the Money Guy has made me Kiwi happy, I'll tell you what. So, thank you for joining us today. We really appreciate it. We make this content for you. And remember, go to moneyguy.com/resources for a huge library of free stuff that is all based on the topics we share here on the show. It's going to give you a little bit of a deeper dive, different calculators, different downloads that will help you continue to figure out what's going on in your personal finance situation and hopefully help you feel just that much more confident about your path forward. That's what it's all about. So, thanks for joining us and be sure to check out moneyguy.com.

• 59:42Brian Preston?

  Guys, I mean, I've gone on some tangents about what I got to experience last week at Augusta National with the Masters. And I appreciate y'all just hanging in there with me on that, but it is more highlighting of the fact that money is only a tool. And if you're not doing things in your life to build up that social motor, to also make blossoming memories with your friends, family and have connections, you know, you're missing out. And that's why we try to teach you so that you can understand, don't just be building up money for the sake of having money. Let's make it purposeful. Let's make it that, you know, where it actually reflects who you are so you can live your best life and own your time that much sooner. I'm your host, Brian, joined by Mr. Bo, Rebe and the rest of the content team, Money Guy team.

• 1:00:24Speaker 02

  The Money Guy Show is hosted by Brian Preston and Beau Hanson. Brian and Beau 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.