Average Salary By Age (How Do You Stack Up?)

Most Americans wildly overestimate what the people around them earn, and that gap in perception can lead to some costly financial mistakes. Financial Advisors, Brian Preston and Bo Hanson, break down real median income data by age, debunk the $500K myth, and show you exactly how discipline and savings rate can matter more than income when it comes to building lasting wealth. Then it's your turn! We answer live questions on HSAs, term insurance, car loan limits, and more (while having some fun out in the wings).⁠⁠⁠⁠ 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. Learn more about your ad choices. Visit megaphone.fm/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:01Speaker 00

  Hey, listen!

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• 1:06Brian Preston?

  Average income. You ever wondered how you stack up with your peers?

• 1:09Speaker 04

  Brent, I am so excited to talk about this because I think it's just innate in human nature. Whenever we start working or whenever we start hanging out with folks, and maybe you're not this way, but this question always comes up. I'm always like, I wonder what they have going on. I wonder where they are from an income standpoint. And it's more out of general curiosity, not for some of the more toxic reasons why people do that.

• 1:32Brian Preston?

  Now, come on, you know. And everybody always says, "Comparison is the thief of joy." So why even create this type of content? And I want to be straight with you. A lot of times, it's because I think the public perception of what your peers make is actually exaggerated on the other side, meaning we overestimate what everybody around us is doing. So it's actually good for you to find out the truth so that you don't have to fall into the consumption traps that are sat out there because it is so much... You're much more profitable if you're trying to keep up with the Joneses versus if you know what makes you tick.

• 2:07Speaker 04

  And Brent, I get asked this question all the time by my kids. Kids or by peers, they'll be like, oh, look, look at so and so. They've got the nice car, the nice house, or the fancy boat, or the whatever thing. And I'm like, hey, you recognize that's not, those things are not necessarily a sign of how much money someone has, or even how much money someone makes. They're more an indication of how much someone spends. And I think a lot of people live a life that is beyond their means. And I think when we level set on where average or median incomes, median salaries are, I think it'll be a breath of fresh air to most folks out there. Recognize, okay, maybe my perception is not actually accurate of what everyone else has going on.

• 2:46Brian Preston?

  So without, you know, beating around this too much more, let's see, actually see the numbers.

• 2:50Speaker 04

  So there was a study done, this is from the Federal Reserve, and this is the median salary by age. I know it says average, but this is actually the median because we wanted to not have the big outlier skew it. So this is an accurate representation by age of where folks in this country are right now. And what you can see is, if you think about the early folks starting out, coming out of college, college age to young adults, the median salary is about $40,000. That's age 16 to 24. Then, as you get from 25 to 34, it goes to about $60,000. From 35 to 44, about 72. 45 to 54, also about 72. 55 to 64, about 70, uh, 69,000.

• 3:34Speaker 04

  And then, once you get over 65, the median salary is about $62,000.

• 3:38Brian Preston?

  Yeah, so we, we highlight that those peak earning years, you really need to be paying attention to that 35 through 54. But I also like people focusing on, I know those early years where money is tight. Those are also the years that your money can do the most work, because you have the most time, compounding growth can do a lot more. But do you notice that myth that everybody around you is making $100,000? It's just not true.

• 4:02Speaker 04

  That's right. That's exactly right. When you look at this, there are not people on the median making the $100,000. Though it's really interesting too, is it's not the young people, again, on the median that are making the highest incomes. You can actually see that the peak earning years actually Happens somewhere around the mid 30s to mid 40s. So this idea that someone comes out of school and all of a sudden they're making hundreds of thousands of dollars. And they're 22 years old and they have the house and the beach house and the fancy car. That is not grounded in reality. That stuff that you see on social media that does not accurately reflect what the real world looks like.

• 4:42Brian Preston?

  And I just, you know, I just mentioned, people aren't making the hundred thousand that you thought. And there's even, I thought it was interesting that I remember, and I had the content team go pull this up. There was a YouGov survey that came out where they asked the population, how many of your peers make half a million dollars a year? And somehow 19% of, you know, people said, hey, 19% of people, you know, one in five are making half a million dollars a year. Even though that number is actually 1% of earners.

• 5:14Speaker 04

  It's wild. If you think about one in five people making $500,000 a year is so far outside of reality. So far away from what the real thing is, that it's actually less than one in a hundred people making that much money.

• 5:30Brian Preston?

  So let's focus on what you can control because you're not trying to keep up with the Joneses. You're not worried about these people you perceive as making the half a million dollars. Let's talk about how do you maximize that lever of income? Cause remember, there's really only two ways you can boost what you have on your net worth statement. You can either make more income or you can spend less money. We want to talk about how you focus on that.

• 5:55Speaker 04

  Yeah. And so what we want you to do is recognize, okay, what are the ways that I can maximize my income? Are there things I can be doing at my job, at my vocation, with my skillset to increase my skills? To further my career, to build what my shovel is. Because the bigger my shovel is, the more I can save, the more impactful it can be. But, and we know this from both the lives that we've lived as well as from work with clients. A big shovel is not absolutely necessary to build wealth. It's, it's helpful and it can be an asset. But if you don't have a big shovel, if you don't have a ton of money, if you don't have a ton of margin, then you can actually tap into the other two ingredients of wealth

• 6:39Speaker 04

  creation and they can be wildly powerful for you.

• 6:42Brian Preston?

  Well, that's what Bo talked about maximizing the income, but the second part of that is, and we always say this is, you know, you gotta live on less than you make. And that's when we talk about those three ingredients to wealth, uh, three ingredients to wealth, living on less than you make is the first key component. That's discipline.

• 6:59Speaker 04

  Yep.

• 6:59Brian Preston?

  It's exactly what Bo was talking about with creating that margin or the money that gets invested. And then if you give it enough time, that's why all of you who are in your twenties watching this, don't worry. I know you're not in your peak earning years, but you are a billionaire of time. And when you see how small incremental decisions can actually create huge results, I think it will change the way you look at money. And we have, actually have a great case study to show you how powerful just a little bit of change can be.

• 7:26Speaker 04

  Yeah. You can take two individuals with the exact same earning capacity, the exact same earning potential, but if you adjust their behavior, the results, the outcome is wildly different. So let's think about average Alan, and let's say that average Alan starts out making the median income at age 20, and he makes the median income from age 20 all the way out till age 65. And he's gonna have a 10% savings rate, which is still much higher than the national average, not quite 25, but much higher. Alan, over the course of his entire working career, goes from 20 years old to 65 years old, just saving 10%. His retirement portfolio, his financial independence portfolio would be

• 8:08Speaker 04

  worth almost $2.7 million.

• 8:12Brian Preston?

  Full stop. This is the thing that always gets me when I see the actual data for the typical American. This shows, we often say, look, all of us have the potential to build wealth, because here's somebody just doing 10%. Remember, a lot of you have employers that are doing close to 5% just off the cuff. So if you were just consistently and not touching the money from your twenties on, you would be worth close to $3 million at retirement. But the typical millionaire, I mean, typical American, not the millionaire. Just has no discipline.

• 8:41Speaker 04

  That's right.

• 8:41Brian Preston?

  And actually touches the money. We show you how leaky retirement accounts, or they just don't stay consistent to doing this. So we wanted to go a step further. We said, okay, this was if you just did 10%. What if you're a financial mutant and you took the 10% in your twenties, but then you added every time you got a pay raise, or every year you got a little bit better and added just 1% until you capped out at 25%? What would that 1% difference do for you?

• 9:07Speaker 04

  Yeah, what you can see is starting at 10% at 20, going 1% increased up until you get to 25%, and then saving 25% for the remainder of your career, rather than being like average Alan, who ended up with $2.7 million, which is wonderful, you could look like Manny the Mutant, who actually retired with $5.2 million, double the amount that Alan had, with the same earning trajectory. These are not two individuals with huge shovels. These are not two individuals with huge incomes. They both earned the median salary relative to their age range, but their behavior was different. So we want you to control the things that

• 9:49Speaker 04

  you can control and influence the things that you can influence. And one of the most powerful, most impactful things you can change is your savings rate.

• 9:58Brian Preston?

  Yeah, and don't let a case study just be the only thing you use to fill your head up with. We want you actually go to moneyguy.com/resources. Please go take advantage of our resource on where you actually can take where your current age is, when you want to retire, and we'll fill in the void and actually tell you what your savings rate needs to be. Please go look at this powerful resource. You'll be able to see specifically what you need to be doing in your situation. We're really proud of this. And that's why I want you to go take advantage of these resources. We're trying to load you up with so that you can go ahead and start planting the seeds today that are going to build that huge live oak tree that you're going to get shade under because your money will work harder than you can with your back, your brains, and even your hands.

• 10:40Speaker 04

  You don't need a huge income to build wealth, but you do need the three ingredients. You do need discipline. You do need to be able to create margin. And you need to apply that over time. And if you can do That wealth is attainable to anyone and we believe that so much that every Tuesday at 10 a.m. Central, we like to sit right here and load you guys up. We want to answer questions and speak to the things that you are curious about. It's why we have the team out in the wings right now, collecting your questions. So if you have a question for us, make sure you get it in the chat. That's thing number one. Thing number two, if you are not subscribed, make sure you subscribe right now. So we know that you are out there. Don't just rent your seat. We want you to own

• 11:23Speaker 04

  your seat here at the Money Guy Show. With that, Credit Director Rebe, I'm going to throw it over to you.

• 11:28Speaker 05

  Yeah, let's go. We're going to kick it off with a question from TCMR 4250. It says, "For an HSA, what documentation is needed to reimburse yourself for a past medical expense? For example, would an ER receipt along with the corresponding credit card statement be sufficient?" You guys are big HSA fans, so give them some thoughts.

• 11:50Speaker 04

  Yeah, I think a lot of people are have a misguided understanding. They think that, okay, every time I want to reimburse myself from my HSA, I'm going to have to like when I file my tax return, I'm going to have to attach those receipts and attach those bills and do that. That's not actually the way that it works. You're not required every time you take a reimbursement from your HSA to show justification. However, if the IRS ever were to ask and they ever were to come and request that information, you better make sure you have it. So don't get over it. Don't think, oh, man, I don't want to pull this money out because I don't want like the logistical nightmare. But if they ask for it, if you have to reproduce it, you better be able to do that or else it's going to be a taxable event to you. So go ahead.

• 12:34Brian Preston?

  Oh, no, no.

• 12:35Speaker 04

  Oh, you took a deep breath like you had a big thing to say.

• 12:37Brian Preston?

  Just getting ready. I thought you were giving me the handoff.

• 12:39Speaker 04

  Oh, okay. Well, you do yours and I'll tell you what I do.

• 12:41Brian Preston?

  You fake pun and I guess I was like, I guess we're going for the long route. So I just kept running. But it's, um, what I always tell people, I always go break down. The first thing with health savings accounts, you got to have the high deductible health insurance. That's the first thing to make sure you're on the right side of the law. The second thing is I was just go kind of go a little deeper on what the process looks like when you file the tax return is because a lot of people, I think if you understood the process, you'll know where, you know, how you ought to approach this is that what happens is, is when you have a high deductible health plan and then you're funding a health savings account. Every year, you're going to get a form, I think it's called, it's a 5498. It's the form that you'll get from the HSA provider that will tell you how much you either contributed,

• 13:25Brian Preston?

  or how much you've, you know, if you've taken any distributions from the plan. And if you get, if you're actually using the plan in the year that you actually take distributions for the qualified medical expenses, that's when they'll send you this 5498. Did I get it right?

• 13:38Speaker 04

  5498 SA.

• 13:40Brian Preston?

  SA, yeah.

• 13:40Speaker 04

  Dude, that's unbelievable.

• 13:42Brian Preston?

  Well, I mean, I'm a little nerdy on the taxes.

• 13:44Speaker 04

  It's like a sports car.

• 13:45Brian Preston?

  So, so all you're going to do is when you go and input any of the TurboTax, or you use a professional tax preparer, they're going to want to know, hey, what are the qualified expenses that you could show that match or exceed this number that we're showing on here? And that's when you will have your spreadsheet, you'll have your folder you scanned in with your receipts, and you're just going to tell your tax preparer, you're going to tell the tax preparation software, no, this is how much I spent. And then that's it. And then after three years, you can throw the receipts away. But the receipts are there just in case the IRS says, hey, we saw that on this date and in this tax year, you filed, you know, on your tax return that you had these qualified medical expenses. Can you show me the proof? You're going to say, yeah, I sure can.

• 14:31Brian Preston?

  And that's when you'll pull it out. But that's the cool thing. More than likely, you will do this tracking, you will keep these receipts, but then you'll file it at some point in the future. And then after three years, you can just basically throw them away. They're there just to keep you safe and protected. The big advantage is you're trying to build your health savings account. We want it where you're investing that money and it's growing upon itself. You're activating the compound in growth so that you can maximize what those dollars can be, where you not only got the tax deduction on the contribution, not only did you get the tax-deferred growth, but you're getting tax-free distribution. So you're triple tax advantage. That's how you maximize the health savings account.

• 15:12Speaker 04

  I'm just going to throw in there, here's what I specifically do. I keep, we have a digital record system, so I'm not like keeping physical receipts. I don't have like manila folders in a filing cabinet. I have them broken out by year, so. 2022, 23, 24. Every time I get a bill, I scan it in, I put the bill in. Every time I go to pay the bill, I have a spreadsheet where I keep a running total. You might be, well, why do you have the spreadsheet? That seems like redundancy. No, I want to know at any point in time, if I wanted to reimburse myself and say, I wanted to go pull $20,000 out of my HSA, I could just go look at any given year. Okay, 2022, I need to go find these seven expenses. Okay, I got those, I can reimburse myself. Or I take a picture on my phone, drop it in the digital vault, and it's that easy. I don't have to have a ton of paper, I don't have to have a ton of complication,

• 15:57Speaker 04

  but it is easy to get to, easy to replicate, easy to have a running total by year of what I have access to tax-free. You do the same, you do something different?

• 16:05Brian Preston?

  No, I'm pretty, I'm pretty close. I have, I have a spreadsheet and then, but I'll be honest, sometimes in some years, because remember, I'm running, because my youngest daughter, her private school is qualified, you know, is going to count as qualified medical expenses. So I haven't, I probably haven't been as diligent as adding up those folders every year. I should do what you're doing every year, I just haven't. So I mean, at some point, I will need to go do that exercise. I think it's smarter the way you're doing it, because it's, it's sitting there on go.

• 16:36Speaker 04

  That's right.

• 16:36Brian Preston?

  And you're ready, you know what you've, you have in, in contributions. And, you know, so that you can go figure, you know, what you, I should say, and what you have in expenses, so you can go know what your qualified amount is.

• 16:47Speaker 04

  Love it.

• 16:49Speaker 05

  Well, great, TCMR 4250, thank you for the question. That was a great breakdown, guys, thank you for that. Robert S. is up next. It says, I am in the messy middle.

• 17:00Speaker 04

  Welcome.

• 17:00Speaker 05

  I've been maxing out my 403B and contributing to other investments. Second child is on the way, and we may have to adjust our savings rate. How do you deal with the guilt of adjusting savings?

• 17:15Speaker 04

  Here's what you do, you take a deep breath, and you go.

• 17:20Speaker 04

  I'm not alone in this. I mean, there are messy middle folks all over the country who decide, man, okay, I gotta change homes, or I gotta go buy the house, or I'm gonna have the kid, I gotta change the car. And it's not uncommon for financial mutants to have to take a step back in their savings rate. So often, we think that the path to financial independence is this straight line of the foo. It's step one, and then step two, then step three, then step four, then step five. And it's this constant trajectory from bottom left to top right, and it's nice and smooth. But in reality, that's not the case. Both you and I, Brian, in our financial lives, building towards wealth, we've had fits and starts. We've had years where we had higher saving years, and years where we had lower saving years. Sometimes it was because of life circumstances that presented themselves. Sometimes it was because of other opportunities that we chose

• 18:05Speaker 04

  to pursue. That's okay. I think the guilt that you're feeling is an appropriate feeling, not something that you should be ashamed of, but it's something you ought to keep in check. You ought to let the guilt be motivated guilt, not like crippling, oh no, what am I doing? Is this okay? I'm a horrible person type guilt.

• 18:23Brian Preston?

  Well, look, first, if you want to make yourself feel better, go watch some of our Making a Millionaires, where we actually, at the end, when Bo and I meet back with our guest, or go back over our guest to kind of do the after-action reports, we always usually will show what their savings rate in the future will be. And because a lot of these people are in the messy middle and have a lot of life going on. And it's not uncommon that we see people who are saving very aggressively when they're much younger, but then they have these big life events happen. And then maybe their savings rate could only be 10% or 12% with the employer match. And all of a sudden, they're like, wow, it still works. And I love that we get to create that dynamic. And that's why I would encourage you. You need context. Before you start beating yourself up, Robert,

• 19:07Brian Preston?

  you gotta figure out, are you ahead of the curve, behind the curve, or right where you're supposed to be? Because you said something pretty key there. You have your second child on the way, but you've been maxing out your 403B.

• 19:17Speaker 04

  Which is huge.

• 19:18Brian Preston?

  Plus some. So anybody who's maxing out the 403B, these are above-average behaviors that I bet you're ahead of the curve. So you might get some goodwill. Because that's what I love about anybody who starts, who hits it heavy and often in the early years is because it gives you flexibility down the road. You might find that you have a huge dividend coming your way from your early discipline that's now going to let you, while life gets complicated, pull your foot off the accelerator of savings and investing, and you're still not behind because you did such a good job on the front end. But you won't know that unless you go through the exercise. That's why currently we want you to go to learn.moneyguy.com and look at our, you know, what's your number? And I think

• 20:02Brian Preston?

  you'll find out that you'll answer that question if you're ahead of the curve, and that's going to give you a lot of peace of mind.

• 20:07Speaker 04

  What, can I just share one, can I share one other thing?

• 20:10Speaker 05

  You absolutely can.

• 20:10Speaker 04

  Bron, you've known me for a long time, decades at this point. I used to be like super like buttoned up and everything had to be perfect. My desk had to be like perfectly neat and the savings rate had to be perfectly this and all these things had to be just absolutely wonderful.

• 20:24Brian Preston?

  A lot of those things are still true.

• 20:25Speaker 04

  And then the Lord was incredibly kind to me and gave me some kids and boy did I learn the beauty of imperfection once kids burst onto the scene. I think a lot of financial mutants, when they go from like pre-family thing to like the post-family thing, it's a wonderful exercise and understanding, hey, not everything has to be perfect. In terms of like cleanliness of the house, in terms of obedience, which is what I'm dealing with right now, in terms of your financial situation, it's okay if it's not perfect. Because if you're just moving in the right direction, putting one foot in front of the other, taking those steps, there's a really good chance that things are going to work out so long as you avoid making the really, really bad, really, really derailing decisions. I just

• 21:07Speaker 04

  feel like that's something that needs to be spoken out into the ether that, man, we get so like, ah, you were, you were this way, you were, you had to be this way.

• 21:16Brian Preston?

  You know, I've gotten old and sentimental in the fact that I think the things you are so panicked about when you're in these early years, you're going to look back on and realize much of it's much to do about nothing, but still do the keystrokes of, you know, savings rate, taking temperatures of where you are in your journey, but then make sure you don't miss out on this stuff. That's why we always talk about bedazzling your basic life. Is because I want you to make sure that you're enjoying every decade that you're on this planet. Because sometimes those financial mutants, we get so caught up in accomplish, accomplish, accomplish. That we miss some of the sweetness of each decade, even though it's chaotic.

• 21:52Speaker 04

  That's right.

• 21:53Speaker 05

  Yeah. Noel said, yeah, something that struck me, we don't know, Robert, your specific situation. Like Brian said, there's some homework you could go do to really make sure where you are. But like it's not, he didn't say, hey, I'm going to stop all saving and investing.

• 22:05Speaker 04

  Right.

• 22:05Speaker 05

  He said, I need to adjust it. I need to pull it back a little bit. Like, that still could be really good for you. You know, that's why we provide all of our resources and benchmarks. So you can kind of see where you are. So you can live the life you want to and have the experiences you want to. And have a second kid, which is so exciting. Congrats on that, too. All right, ready for the next question.

• 22:27Speaker 05

  Merenjock says, I know for the majority of people, term life is the best option. But you guys also say it depends. And for a small portion of people, whole life is better. What are some examples of when that's true?

• 22:42Speaker 04

  I want you to answer this one, but I want to, I want to clarify one little thing in that sentence.

• 22:46Brian Preston?

  I'm not saying, oh, it doesn't have to be whole life.

• 22:48Speaker 04

  Yeah, and, and we're not suggesting that whole life is better than term insurance in that circumstance. What you've heard us say in the past is that there are times when whole, when permanent life insurance is an acceptable solution to a problem that exists. That is not pitting them against each other, because we still think, even in those situations, someone likely needs term life insurance, but there are areas and times when permanent insurance.

• 23:15Brian Preston?

  Yeah, I mean, that's really, it's not term versus whole life. It's term versus permanent insurance, because whole life is a form of permanent insurance. But there's a lot of other versions of permanent insurance, too, that might even be a little more cost effective. And, and take a little of the pressure off of the annual premium. What I've actually experienced is I had a gentleman who was an entrepreneur, who came to me and he had tons of net worth, meaning because he had made some really key real estate investments. He had a really valuable business.

• 23:51Speaker 04

  Tens of millions.

• 23:52Brian Preston?

  Yeah, it was a lot of money, but his liquidity was nothing. And this was a time back when, now realize the exemption now on estates is

• 24:02Speaker 04

  A little over thirty million.

• 24:04Brian Preston?

  Yeah, I mean, it's a lot, you know, we've really indexed it, but back in the day, it was between six seventy-five to a million dollars on your estate. So we had a gentleman here who on paper was worth, you know, decamillionaire plus, who had zero liquidity. If he died tomorrow, his family would be screwed because you'd have to liquidate the businesses, you'd have to liquidate the real estate, all this stuff to come up with the estate taxes, and all these things are illiquid investments. So I looked at his situation and I was like, we're gonna have to immediately go buy you some type of life insurance so that you could at least extinguish this issue, you know, if you died prematurely.

• 24:47Brian Preston?

  And I remember, I mean, it was a very expensive premium for the five million dollars that we were able to go buy the insurance.

• 24:55Speaker 04

  But it was a necessary problem.

• 24:56Brian Preston?

  But it was a necessary thing. So that's when I have said, look, there are times when permanent insurance makes sense because you wouldn't, it wouldn't have made sense to do that with term at that moment in time. Now, the problem I have with the way insurance is sold in the industry is that most people who are coming and watching and consuming our content, you're the typical American that first, yes, you need to protect your family because if you died prematurely, it would leave your family in a horrible situation. But you also need to be saving and building wealth in the background. So at some point, you're self-insured because that's the whole purpose. If you can save and build enough assets, you don't need to go buy a life insurance from an insurance company because you will be able to pay for all of your expenses

• 25:39Brian Preston?

  out of the big nest egg that you've built up. So these things, they can be Happening at the exact same time. And that's why I love term insurance is because term insurance lets you just buy the actual coverage, the protection. None of the extra cash value or the other things. You're just on a yearly basis paying for the insurance. In the meantime, you're building up assets in the background so that 20 years in the future, 30 years in the future, you're self insured. Because what happens during that 20 or 30 year period? Your kids grow up and move out of the house. They don't need your income anymore. Hopefully you've built up enough money that you can now self insured from your retirement assets. Do you see how this all works? This doesn't have to be us versus the insurance agent.

• 26:24Brian Preston?

  This is the understand the way the financial components work in the insurance industry. So you can maximize it and use as a tool in your wealth building journey.

• 26:33Speaker 04

  I love that. Maren, I hope that helps. I hope that was helpful.

• 26:37Speaker 05

  I think it was. Thank you for the answer. Hey, remember if you are listening to these questions and you want to dive deeper or refresh, just go to moneyguy.com because we actually have an ultimate guide that's all about different types of insurances and how to think about it. So I just wanted to throw that out there. If we're talking about it on the show, we probably have a free resource, a calculator, or an ultimate guide that's kind of consolidating that information for you as well. Of course, you get a lot more nuance and it depends here on the show, which I love, so.

• 27:06Brian Preston?

  I know we didn't talk about, but I mean, like, we have a lot of our military families are always asking us. I know it's not ready for primetime yet, but I know behind the scenes, we're about to have, we're about to have a resource for our military families to go check out at moneyguy.com/resources as well. So I don't want to put you on the spot of how many, how long, how close to release it is, but you know, it's probably something in the next few weeks.

• 27:30Speaker 05

  Like, we are actively in the home stretch of that one, I can say that.

• 27:33Brian Preston?

  Because that's the thing, like, when we did the special needs release, you know, we have a free ebook out there for that. We're always trying to think about what are areas that we would love to just love on you guys and give away free resources. Because I know, I mean, if you remember, the origin of the Money Guy Show is, is that back in 2006, I looked around and I was like, holy cow. If you just, if I was my 22-year-old or 25-year-old version of myself and I'm just trying to figure out what to do with money to not waste time, not waste this resource so that I can actually live my best life, I was like, man, most people are out there selling commission products or they're trying to get in my back pocket. Wouldn't it be nice if somebody created an education platform where I could just learn how this worked? And that's what drove it. And that's

• 28:18Brian Preston?

  why we've tried to keep giving away free resources to make that, you know, the platform even stronger.

• 28:24Speaker 04

  And if you're sitting there thinking, man, I really want to know, like, I wish there was some way for me to know when you guys release these free resources. Whenever we have a new one come out, we always mention it in our weekend newsletter. So if you're not subscribed to our newsletter, I would highly encourage it. It's pretty ballin'. Like, it's a good, I actually find myself

• 28:44Brian Preston?

  I read it every week.

• 28:45Speaker 04

  Every single week.

• 28:46Brian Preston?

  That's not a fib. I really do read it. I even look for it if I've, if I don't, if I haven't seen it for that Saturday morning release.

• 28:52Speaker 04

  And here's what we don't do. We're not gonna like sell these email addresses. We don't spam you with all kinds of content. We just want to make sure that if you want really valuable, really helpful, sound financial advice, we can get it in your inbox. Team in the wings, if you wouldn't mind, somebody drop in a link to how to, like, where to go to subscribe.

• 29:06Speaker 05

  You can go to moneyguy.com and subscribe there. If you actually click on the very top, it says follow, it'll let you put your, put in your email address and get on our newsletter, Money Guy email universe.

• 29:16Brian Preston?

  That's also where they typically, like, when we go on vacation and they drop pictures beyond the scenes and other things, it's usually in the newsletter.

• 29:23Speaker 05

  That newsletter is fun. The team is in the wings making that really fun every week.

• 29:26Speaker 04

  I've also noticed it's where the team likes to make jabs at me. In, like, I read it now and I see that they're making jokes at my expense. It's offensive. I don't like it. I don't like it at all.

• 29:39Brian Preston?

  Guys, have y'all seen, anybody who's worked at the Ice Coffee Hour release that we had come out on Sunday?

• 29:45Speaker 04

  It's doing well. It's doing really well.

• 29:47Brian Preston?

  And I feel a little offended because I'm a victim of the forced perspective. You know, I'm a huge Disney fan. And, you know, you go look at Cinderella's castle, you're like, that thing is huge. And then you realize, oh, they tricked me with forced perspective. And then you find out Bo Hanson. We the way we sat up, those biceps, they are big. They are big, but I'm telling you, mine look much smaller because we put Bo closer to the. It's like if you ever, you know, Buddy the Elf, if you ever watch and you're like, man, those are some really cool tricks. It's all forced perspective when they made Buddy look so much bigger than everybody else. Who would have known that we did the exact same thing when we designed our sets?

• 30:25Speaker 04

  That was, uh, production team, I really appreciate it. I love the little boost. Thank you.

• 30:30Brian Preston?

  So it's Cinderella's castle, Bo's biceps. I even, my favorite comment, few things, few comments that came out is, um, the guy wrote, I'm a bodybuilder. I like how this guy is popping his pecs.

• 30:43Speaker 04

  Which was not true. That's, that's.

• 30:45Brian Preston?

  And then the other one, here's the one picking on me is like, when Brian gets his canker sore fixed, he can, um, come back. I guess because, look, my tongue is very active. I don't mean it. I chew on my tongue. I do it. It's just.

• 30:56Speaker 04

  My tongue is very active.

• 30:57Brian Preston?

  I have, I have, I don't know what's wrong. I see it too, guys, and I am so embarrassed, but I don't know what to do to control it.

• 31:03Speaker 05

  It's not that big of a deal.

• 31:05Speaker 04

  That's hilarious.

• 31:05Brian Preston?

  But people, you guys, the internet is undefeated on finding, if you have any insecurity from high school or in life, just go and get yourself on social media and there will be somebody who unearths and figures out something.

• 31:18Speaker 05

  We won't mention Bo's eyebrows in the comments he gets.

• 31:20Brian Preston?

  Oh, that's cruel.

• 31:22Speaker 04

  Why would you say that?

• 31:24Brian Preston?

  It's because, it's because.

• 31:25Speaker 05

  I was giving you a lot of flowers, you know?

• 31:26Brian Preston?

  I asked Bo this morning, cause he works out at like 2:30 in the morning. He wakes up so he can, you know, nurture and nourish these biceps, um, with his other gym rat buddies. And I asked him, I said, this morning, did y'all actually work out or did you just sit there and hold court and read the comments from the most recent shows? Cause they have to feel a part of your success.

• 31:45Speaker 04

  I, I do want them to know that the, the third bay boys, they're part of the, they're part of the process.

• 31:49Brian Preston?

  Y'all, y'all have like, do you have decals on the back of your cars?

• 31:53Speaker 04

  We have, we have, we have t-shirts and hoodies and tank tops. Uh, you've seen them. I've worn them before.

• 31:57Brian Preston?

  I just didn't know what it was.

• 31:58Speaker 04

  Yeah, yeah, yeah. That's it, man.

• 32:01Brian Preston?

  Y'all really do, y'all designed a logo and everything?

• 32:03Speaker 04

  Oh, yeah.

• 32:04Brian Preston?

  Was that like a chat GPT or did y'all actually bring somebody in?

• 32:07Speaker 04

  We've had the logo for a couple of years, so I think we probably had the logo pre-chat GPT. It's good. No, we got a whole, we got a whole branded thing here, brother.

• 32:15Brian Preston?

  Haven't y'all ever ridden down the interstate and like I saw, I was behind a car. I was trying to remember which type of car it was and I was like, I sixty-five boys. And like, you know, so somebody really enjoyed their friends so much that they came up with a logo and then put a decal on the back. That's, that's Bo and his gym buddies.

• 32:30Speaker 04

  You know, we don't, I, I wanna, I always wanna wear one of the shirts like on, on the show, but it doesn't have a collar. They're like t-shirts, you know, it wouldn't be, it wouldn't be like Money Guy Tuesday ready.

• 32:38Speaker 05

  It'd be a little strange, yeah.

• 32:39Brian Preston?

  That's a little, that's not good.

• 32:40Speaker 05

  I'm still used to seeing you guys in their collars.

• 32:42Brian Preston?

  It's not only for just living on less than you make, it's also knowing not to wear your gym rat shirts on a, on a, on a national show.

• 32:48Speaker 05

  All right, let's get back to a question because I do have, what?

• 32:51Speaker 04

  How quick this should change.

• 32:52Speaker 05

  I know, we gotta get back, I got a lot of questions.

• 32:54Brian Preston?

  We've only done three questions.

• 32:56Speaker 05

  Um, and I do have a fun segment for us to do. We'll probably do another question or two and then move on to our From the Wings segment. So stick around for that. We're gonna get Brian and Bo's reactions to some things.

• 33:08Speaker 00

  Hey, listen.

• 33:09Speaker 01

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• 34:07Speaker 04

  What's the other one?

• 34:09Brian Preston?

  You know, the, it depends.

• 34:11Speaker 05

  Rapid fire.

• 34:11Brian Preston?

  Rapid fire.

• 34:12Speaker 04

  I thought you were trying not to say it on purpose.

• 34:15Speaker 05

  All right, next question's from Luis. Can you explain the reason for thirty-six months being the limit for car loans? Why should I push to get rid of a super low interest car loan so quickly?

• 34:29Speaker 04

  Well, it's kind of, it's sort of mathematical based on the way that, that cars operate. Cars are one of these unique assets that we buy. We spend a whole lot of money on them and they become less valuable through time, right? And depending on how new the car you're buying is, the brand of the car that you're buying, and the cost of the car you're buying, oftentimes in the first couple of years of ownership, especially if you're buying a new one, that's when you see the most rapid decline in value. You see this huge thing where depreciation could wipe out anywhere from 40 to 60% of the car's value in the first three to four years. And so, the reason why we like the three years or 36 months is so that we can create

• 35:09Speaker 04

  an environment where, hopefully, ideally, you won't be underwater in your vehicle. You won't end up owing more on the vehicle than the vehicle's actually worth.

• 35:20Brian Preston?

  I'm gonna be meaner. I'm gonna be, because, look, the trap that you fall in with car purchases is if you expand out how long you can pay for the car, you can afford anything at a monthly amount. And that's what the car dealerships take advantage of you. That's why you see every year, it seems like, the average length that cars are financed keeps going further and further out. I think we're getting close to seven years at this point. So, on purpose, we tell you 36 months so that it puts as much pressure on what can you afford. That way, there's not separation from what your income, what you're hopefully building in the background is, and your ego on the car you should drive. It keeps it in check.

• 36:02Brian Preston?

  It's because if you have to pay this thing off in 36 months, first of all, you're not gonna get crushed by depreciation, and it's also going to keep you honest with what you really can afford. So that way, you take your income with the 8%, you take the down payment that you have to put down, and then you put the three years. You're going to end up with something that's gonna be reliable, and it's gonna be something that's also going to be reasonable, versus if you go out to 84 months, all of a sudden, now you're thinking, hey, I can afford a $75,000, $80,000 car because the monthly payment gets digestible. That's the opposite. We want your money working for you, not depreciating in something that's sitting in your driveway.

• 36:41Speaker 04

  And I think you said this, we always prefer if you can pay cash.

• 36:46Brian Preston?

  Yeah, of course.

• 36:47Speaker 04

  We get some flack on that. We love 238. 238 is amazing. It's a great tool.

• 36:51Brian Preston?

  Cash is king.

• 36:52Speaker 04

  But if you can pay cash, cash is ideal when it comes to purchase college bills. I just want to throw a little disclaimer out there. Another thing I want to throw out there, if you want to understand how detrimental this can be, we have an episode of Making a Millionaire coming out. And I'm not going to give you the details, but do you remember how much the car payment was? It was a thousand dollars a month for a car payment.

• 37:13Brian Preston?

  And it was 84 months.

• 37:16Speaker 04

  I was about to say, you won't believe how long this loan was for. Make sure you subscribe right now to see it when it comes out. That almost was beautiful. That was.

• 37:25Brian Preston?

  I'm sorry. This is why, this is why, that's why I'm, I'm like, fortunately, my wife is designed to not like surprises. Because I can't keep a secret. I just can't keep a secret.

• 37:35Speaker 04

  I was setting up the knock-knock and he said, interrupting Cal. You know what I mean? Like, he just, he didn't even let me build it. That was, you know what? So make sure you subscribe, check it out. It's a, and, and you won't believe what this couple did. Eighty-four a month car loan, thousand dollar a month car payment? You will not believe what they did next.

• 37:56Speaker 05

  Don't say anything, Brian. Leave it a surprise.

• 37:59Brian Preston?

  I'm not. They're a lovely couple, too.

• 38:01Speaker 04

  Lovely couple.

• 38:02Speaker 05

  Subscribe here, watch Making a Millionaire when it comes out every other Monday. All right. We are going to do our segment. Are you ready? This segment is called From the Wings, where the content team gathers some recent headlines. And we are going to get Brian and Bo's reaction to them. So Brian and Bo, in your drawer at your desk, you have thumbs up and thumbs down paddles.

• 38:26Brian Preston?

  Oh, look at we got props.

• 38:27Speaker 04

  All the hotties stepping up, props.

• 38:29Speaker 05

  No, did you?

• 38:30Speaker 04

  I'm not kidding me.

• 38:31Speaker 05

  We have props for this one today. We have thumbs up and thumbs down. So.

• 38:35Speaker 04

  I'll put some snacks in there.

• 38:36Speaker 05

  How this is going to work is I'm going to read one of the headlines. And you guys will tell me thumbs up, this is news, we should pay attention, here's why. Or thumbs down, this is noise, this is not going to have a big impact on our financial lives. All right?

• 38:50Speaker 04

  Got it.

• 38:50Speaker 05

  You ready?

• 38:51Speaker 04

  Yep.

• 38:52Speaker 05

  First headline is, inflation soared to 3.8% in April, driven by gasoline prices, from the Wall Street Journal.

• 39:03Speaker 04

  And, and, and the question is, is this news or is this noise?

• 39:06Speaker 05

  Yep.

• 39:10Speaker 05

  Oh, we got one vote. Both say it's noise. Why do you say so?

• 39:16Brian Preston?

  Well, I mean, you can't control. I mean, inflation, look, I want you to do the things we always tell you. I want you to look at your emergency reserves. Look at the things you can control. But this is a bigger game that's going on is that there's geopolitical stuff going on. There's the, you know, the Federal Reserve meeting and there's inflation concerns, but you can't control any of that. So focus on what you can control because I don't want these things creating you to freeze because you get analysis paralysis from too many data points.

• 39:44Speaker 04

  I don't want people. I'm going to give you the benefit of the doubt. I don't need to tell you that the prices of things has increased. Like if you filled up your gas tank, if you've gone to the grocery, like you've seen that, man, this is, the erosion of purchasing power is a real thing that takes place. So I don't think this is like news worthy as in, oh, I need to be actionable right now. I think inflation always exists. Now there it varies, right? A couple of years ago, it got as high as 9.3% and then we've seen it as low as 2% year over year change in recent memory. I think in the way that we build our wealth and think about the future, we ought to recognize that's why we should be investing. That's why we should be owning things.

• 40:25Speaker 04

  But I don't think knowing that it hit a certain number in a certain month should dictate any of our short term to intermediate term behavior.

• 40:35Speaker 05

  There you go. All right, this next one, this is an interesting one. Google SpaceX in talks to explore data centers in orbit. I knew he was going to say that. Bo says it's news.

• 40:49Brian Preston?

  Well, I mean, it's, it's news, but I mean, it's not actionable for you, but I mean.

• 40:54Speaker 05

  Oh, interesting filter.

• 40:56Brian Preston?

  I mean, it's, it's entertainment. It's reading for entertainment.

• 41:00Speaker 05

  Oh, but Brian is flipping his paddle back and forth.

• 41:02Brian Preston?

  So I think it's.

• 41:02Speaker 05

  Do not even say it depends.

• 41:04Brian Preston?

  Yeah, I think it depends.

• 41:05Speaker 05

  This is not the segment for that.

• 41:08Speaker 04

  Okay, go ahead, bro. I just think it's fascinating, right? Like, I think it's fascinating when you think about infrastructural. I made that word up. That's a real word, though, that I made up. Change, right? Like, how things change. We are now getting to the point, I was just saying the other day, that it might be more cost-effective, or if it hasn't happened now, it's moving in that direction, more cost-effective to, like, put servers or whatever on a satellite, shoot it into space, have it orbit, have solar panels up there, because it's outside the yellow zone, so it's getting all the power, yada, yada, yada. More cost-effective of that than you need to develop and build it down here. I just think that's a really interesting way that technology is advancing. And you think about even as like, this is where my mind sort of wanders to.

• 41:51Speaker 04

  Does that mean that, like, one day even real estate vesting is going to be like, like space real estate? Like, that's going to be a thing that you have to think about?

• 41:58Speaker 05

  That is crazy. Like, it's not out of the realm of possibility.

• 42:01Speaker 04

  Like, right now, like, we think about investors.

• 42:03Brian Preston?

  You don't know, but you know what I do know? Law of accelerating returns is that innovation and things like this are changing constantly. And if you want to invest something you can control, buy the market.

• 42:15Speaker 04

  Buy the market.

• 42:16Brian Preston?

  Don't try to beat the market. Buy the market, because guess what? One of the largest holdings in total market index or the S and P 500 is Google slash Alphabet. Guess what? SpaceX is probably going to go, I mean, it is going public. When it launches into the public, you know, world of us being able to invest in it, it's going to become an S and P or total market index investment. You're going to own it. So you don't have to waste your mental horsepower or time trying to figure these things out. You can just, instead of beating the market, be the market and then focus on how you live your best life.

• 42:49Speaker 04

  On that, I completely agree.

• 42:50Speaker 05

  Yeah. I think Brian turned his answer around. I think you said, basically-

• 42:54Brian Preston?

  Well, no, I think it's power. These are important things, but in the context-

• 42:57Speaker 05

  Because it's an education moment.

• 42:58Brian Preston?

  Of lens of what we're doing here with the Money Guy Show. It's, read this stuff if it fascinates you, but don't feel like it's something you have to hyper-focus on.

• 43:08Speaker 04

  You have to change your behavior for.

• 43:09Brian Preston?

  Yeah.

• 43:10Speaker 05

  I think this is just kind of like a, yeah, it's supporting the idea of law of accelerating returns and buying the market, right? I love that.

• 43:17Brian Preston?

  Wait, if you don't know what the law of accelerating returns, I talk about it in Millionaire Mission. It's something, I remember, you know, when intern Daniel, y'all know we love Daniel. Me and him, we were talking about this concept and then he was the one that said, hey, you know, there's actually a term for that called law of accelerating returns. It's where the pace of innovation actually speeds up. And that's why the change that will happen over the next 10 years will make the last 50 seem like it's standing still. And that stuff, it's crazy when you think about how fast things are moving and I feel it all the time. I feel it actually is a little, I mean, it creates a little anxiety to a degree is just because everything is moving so fast these days.

• 43:57Speaker 04

  But it's so interesting, you think about like, it was five years ago, we as like general consumers, we're not using artificial intelligence in the way that we are today. We weren't like playing with agentic type stuff, like that wasn't even, 25 years ago, is my math checking on? The iPhone wasn't even a thing.

• 44:14Brian Preston?

  It was 2008.

• 44:15Speaker 04

  Right, and now you have like multi-billion dollar businesses that can be operated singularly from a handheld. It's just, what will the world look like 10, 20, 30, 40 years from now? I just, it's fascinating.

• 44:29Brian Preston?

  It's back to the point that Apollo 11, you know, your phone has more processing than what landed on the moon.

• 44:37Speaker 05

  Crazy, so crazy. All right, we got a couple more. Next headline from Business Insider, the market has jumped the shark. Michael Burry says stocks may finally be at the precipice of a major reversal.

• 44:53Speaker 04

  Michael Burry has called 100 of the last one recessions back pre 2008, right? Like, that's the thing, like, he keeps saying, and I'm not picking on Michael Burry, that's, I don't want to like, single him out specifically. But oftentimes, someone who has credibility for making a singular call or being able to say, hey, I saw this thing coming and I rightly predicted it. They fall into the trap oftentimes in my experience where they begin doing that over and over and over and over again, over and over and over and over again.

• 45:25Brian Preston?

  We're supposed to vote, we didn't do, we didn't hold up anything.

• 45:29Speaker 05

  Oh, that's true. What are you doing?

• 45:30Speaker 04

  Sorry.

• 45:30Brian Preston?

  Breaking the game.

• 45:32Speaker 04

  We're not very good at games.

• 45:33Speaker 05

  You both said it's noise.

• 45:35Speaker 04

  Yeah. And so, nobody knows. Nobody knows what the market's gonna do in the next six months, nine months, 12 months, 24 months, 36 months. Anyone who tells you that they do know, in my opinion, is guessing.

• 45:50Brian Preston?

  One of my greatest achievements that nobody knows of is that back in 2002, when I was trying to, this is before podcasting, I was like, how in the world am I gonna get clients? I just wanna be an educator and show people how finance works. So I started writing a little, a column.

• 46:05Speaker 04

  Uh huh, in the local newspaper.

• 46:06Brian Preston?

  For the local newspaper.

• 46:06Speaker 04

  Henry Herald.

• 46:07Brian Preston?

  Too bad that probably hundreds of people read the Henry Herald instead of the millions that we get exposure to now. Because I actually wrote a piece in 2002 that was, it was actually the day before we reached the bottommost point of the stock market of 2002 on why everybody in the world should start investing. Because if you invest, when things are so bleak and horrible, you can average and expect these type of returns in the first 30 days to 12 months after a market V-shaped recovers. And I was spot, actually, we, in the article, I said, markets typically make 26.2% when they hit the dead bottom of a market. Fast

• 46:52Brian Preston?

  forward to a year in the future from when I wrote that article. It was like a 45% if you would have invested on the day that I wrote that article. The problem is, I didn't have a national publication for people to go, he was a genius, he spotted. And by the way, did I have a crystal ball? Did I have it figured? No. I just kind of was, I saw what was going on. I see how markets recover. That's what I was trying to share. That's what I was trying to educate. Michael did a great job of predicting something in the past.

• 47:19Speaker 04

  Seeing it.

• 47:19Brian Preston?

  But it's exactly what Bo said. He's predicted it over and over, but because he got it right once, he gets to make a career off of that. Just be careful. That is, that's why, without a doubt, this is noise. Because, previous thing, I was just talking about law of accelerating returns. There are going to be more and more all-time highs. There's also gonna be scary, scary bear markets that will come our way. But if you'll just always be buying and just hold your nose through it behaviorally, you're going to come out in a better place in the long term.

• 47:53Speaker 04

  Love that.

• 47:53Speaker 05

  All right, good stuff. Last one. Very interested to get your take on this. Is this news or noise? Male coyote swam two miles to Alcatraz Island. Twice as far as biologists had expected.

• 48:10Speaker 04

  Who found this one?

• 48:13Speaker 05

  For context, this coyote also escaped from Alcatraz. Quote, "There is no evidence the coyote is still on the island." So he-

• 48:20Brian Preston?

  But you said he escaped to it. This, because it says-

• 48:23Speaker 04

  He swam there and swam back.

• 48:24Speaker 05

  Swam there and swam back.

• 48:25Brian Preston?

  So he goes, so he went from like San Francisco to Alcatraz.

• 48:28Speaker 05

  Thirty-six men attempted fourteen separate escapes from Alcatraz. Nearly all were caught or did not survive the cold swift current. But this coyote did. What does it mean? News or noise?

• 48:40Speaker 04

  Are coyotes good swimmers?

• 48:42Brian Preston?

  Yeah, they got four legs.

• 48:45Speaker 04

  Look, I'm gonna go out on a limb. I don't think I'd make that swim. I'm gonna be honest. I know there's a lot, a lot of people are asking about my swimming proficiency. It's not good enough to go from the coast to Alcatraz.

• 48:57Speaker 05

  And back.

• 48:58Speaker 04

  And back. I mean, even if I made it there, the way back would probably get me.

• 49:02Brian Preston?

  Have you ever toured Alcatraz?

• 49:04Speaker 04

  No, I want to. Is it awesome?

• 49:05Brian Preston?

  Yeah, it's, it's pretty cool. Because you know, that's what, it's got a lot of history to it. That's where, you know, because we've made the joke, don't cheat on your taxes because taxes is how they got Al Capone. And Al Capone was at Alcatraz, so they show you all that stuff. And then there have been some escapes. Now, I thought, I thought in the asterisks on Alcatraz, they have like one or two people that they not quite sure if they made it.

• 49:26Speaker 04

  They never found them, right?

• 49:27Brian Preston?

  Well, here's the thing, you don't, when you're, when you're on Alcatraz, you can see the, the land. The where you'd have to swim to, and it looks like you could do it.

• 49:36Speaker 04

  And then you're, uh-

• 49:36Brian Preston?

  So that's why I think it's probably noise. This is noise, but it is if you've ever toured Alcatraz. It's interesting, like, oh, it took a coyote. But a coyote is not a human. And that's what, um, I, I don't know if, I, I don't think I could do it either.

• 49:51Speaker 04

  Was it Sean Connery? Wasn't, or wasn't there a-

• 49:54Brian Preston?

  Talking about The Rock?

• 49:55Speaker 04

  The Rock, yeah. That was Nicolas Cage, wasn't it?

• 49:57Brian Preston?

  Well, he's Sean Connery, Nicolas Cage. They're all, yeah, I think that's-

• 50:00Speaker 04

  They made it out, right?

• 50:02Brian Preston?

  Was it Alcatraz?

• 50:04Speaker 04

  I think so. Wasn't that somewhat- Okay.

• 50:07Brian Preston?

  It's a great movie.

• 50:08Speaker 04

  We've aged out of.

• 50:09Speaker 05

  Anyone from the wings have any cuts? I don't know that one.

• 50:12Brian Preston?

  If y'all ain't caught on, Bo actually is not old enough to watch any of these movies too. But because Bo's babysitter was the Superstation, you know, which is Channel 17, which is appropriate because Ted Turner just recently passed away and he definitely shaped my life. He shaped Bo's life. Because anybody from the Atlanta area, the Superstation was legit. I mean, between pro wrestling and all the movies that are edited down so that you now show them the real version to somebody, if you're trying to show them historic things, like you tell your kids, these are the greatest movies. Let me show you from my childhood in the.

• 50:42Speaker 04

  Turn it off in 10 minutes.

• 50:43Brian Preston?

  You're like, you cut it off, you're like, oh my God, on the Superstation, they didn't cuss that much. On the Superstation, they didn't have nudity like that, you know, it's, um, so Ted was, who would have known Ted was protecting us from so much?

• 50:52Speaker 04

  Hey, what?

• 50:53Speaker 05

  Who would have known?

• 50:54Brian Preston?

  And then also the stadium, I mean, a lot of my, you know, I remember when the Olympics opened in 96, the Ted.

• 50:59Speaker 04

  Yeah, buddy.

• 51:00Brian Preston?

  I mean, wherever they called it the Ted because of that stadium that was built.

• 51:03Speaker 04

  Because it was Atlanta Fulton County Stadium and then it was the Ted right after that, right? That was at the Olympics, is that when that started?

• 51:08Brian Preston?

  Yep.

• 51:08Speaker 04

  Look at that.

• 51:09Speaker 05

  Well, wow, that was a great conversation starter and what I'm hearing is the coyote story is news.

• 51:14Brian Preston?

  I still want to know what, what content member, member was like, this is the closer.

• 51:19Speaker 05

  It was just from the wings.

• 51:20Speaker 04

  How long you think it takes a, because they don't, they got four legs, but they can't, like, that's.

• 51:24Brian Preston?

  No, if you never, you don't have a dog.

• 51:26Speaker 04

  Is it doggy, I mean, it's doggy paddling, right?

• 51:28Brian Preston?

  We have a little chihuahua and every now and then, you know, we'll put the, we'll put the chihuahua in the, she can swim like a ferret. I mean, or swim like a, not a ferret, but what's the, what's the, what's the dog, the, the animals that you put in the water? You see them, they're so entertaining at the zoo.

• 51:42Speaker 04

  Ducks.

• 51:43Brian Preston?

  No. They always, because they, they're really fun to watch in a zoo.

• 51:47Speaker 04

  Hills?

• 51:48Brian Preston?

  No, gosh, you don't go to the zoo. Otters. My little chihuahua, it looks like an otter in the water.

• 51:53Speaker 05

  From the wings, they were tracking with you, Brian, they were tracking. Some people were.

• 51:58Brian Preston?

  That little, that little dog, that little, she's a chihuahua terrier. I should say it's probably the terrier that makes it just a good swimmer. It's not the chihuahua.

• 52:03Speaker 05

  Do you think she can make it to Alcatraz?

• 52:04Brian Preston?

  Chihuahua just makes her mean.

• 52:05Speaker 04

  That's unbelievable.

• 52:07Brian Preston?

  Except for my wife.

• 52:08Speaker 04

  Lily, Lily is not making it to Alcatraz.

• 52:10Brian Preston?

  Raise your hand if you've been bitten by a chihuahua in the last week.

• 52:13Speaker 04

  Lily, honestly.

• 52:14Brian Preston?

  I mean, whenever I take that dog out at night, there's a, there's about a 50% chance I'm getting bitten. Fortunately, her feet, her teeth are so just in a bad place that it doesn't hurt that bad.

• 52:24Speaker 04

  Lily is gonna get eaten by a fish and it would not be even that big of a fish. It would just be like a medium sized fish would eat Lily. 100%.

• 52:31Speaker 05

  I'm glad we covered that. Um, this has been From the Wings. Thank you for joining us. We do have some more financial questions to get to if you guys are up for it.

• 52:40Brian Preston?

  Let's do it.

• 52:40Speaker 05

  All right. We've got a little bit of a spicy one. I don't know. Interesting one.

• 52:46Brian Preston?

  The coyote wasn't spicy though.

• 52:47Speaker 04

  I was about to say.

• 52:48Speaker 05

  From Amber, it says, as a single person, buying a house seems out of reach. Is it a bad idea to buy with a friend? What should I consider?

• 53:01Brian Preston?

  I mean, this is where.

• 53:02Speaker 04

  Is a friend a roommate?

• 53:02Brian Preston?

  Fortunately, this is, it depends, doesn't cut us off at the teneas here. See, I think about one of our associates, his college buddy, think about this hack. He bought a house, I bought a, I can't remember if it was a town, it was a townhouse. That's what it was. And then he got his two college buddies to move in. Now, he was the only one on the mortgage.

• 53:21Speaker 05

  That's house hacking, yeah.

• 53:22Brian Preston?

  That's what I mean. So this could be, Amber could be house hacking too, because that's basically getting roommates other people's money to help you pay for the house. As long, Amber, I think this is great to have OPM to help you do this, house hacking, as long as your emergency reserves and your bench of financial resources is deep enough that if the roommates move out, it doesn't deep six your financial life.

• 53:43Speaker 05

  Here's the thing, I don't think she's talking about house hacking. I think she's talking about like both names are on.

• 53:49Speaker 04

  Hey.

• 53:49Brian Preston?

  I'm not putting the friend on the settlement statement too.

• 53:52Speaker 05

  Yeah, like they're gonna pull his money to get the, oh.

• 53:54Brian Preston?

  No, you gotta be careful.

• 53:55Speaker 05

  He's spicy. I knew this was gonna be spicy.

• 53:57Speaker 04

  He's, how's he a grin?

• 53:58Speaker 05

  I know, I was surprised.

• 53:59Brian Preston?

  I like house hacking.

• 54:00Speaker 04

  I think this is a.

• 54:01Speaker 05

  I think that's a good different, like a differentiator to cover.

• 54:03Speaker 04

  Amber, I love the idea. If you have a person who you know is going to be a roommate and you want to charge them rent, that's, that's wonderful.

• 54:10Speaker 05

  Yeah, but let's talk about why. Cause she's right. It's hard to come up with a down payment.

• 54:13Speaker 04

  But, but when you, when you go to buy. Something together, you're forming a partnership. I want to buy this thing. And it's, it's a little bit like a marriage. Like you've got to really understand and know what's going on with the counterparty. Brian, you and I have bought a number of commercial buildings together that you and I own, but we kind of knew going into it. We had like a history, we had a backstory. And I think what changes it is neither one of us live in those buildings. Because if you buy a house together, then what if one of you decides to go get married? Well, okay, does the spouse move in there or do then they have to move out? Or do they buy you out? And what, like, what do they pay for the house? And what if they can't pay you out?

• 54:55Brian Preston?

  And let me nerd out as the CPA here who's done tax returns. One of the things, because I've seen people buy like lake homes and beach homes.

• 55:03Speaker 04

  Oh, yeah.

• 55:03Brian Preston?

  Where they don't form a partnership. They just go buy it together like this. And it's a tax mess because what happens is whoever's name is first is the social security number that you're going to get the 1098 or whatever the mortgage interest is on. And then everybody else, forever as long as you own this property, you all list, you have to list the full amount of the 1098 and then you have to put a note on the tax return of the other people who are claiming the, the interest deduction on their taxes. So then when they put it on their taxes.

• 55:32Speaker 04

  And all regulars.

• 55:32Brian Preston?

  By the way, you're still likely to get a notice every year because of this, because it's just not clean from a perspective. That's why I like when we, yes, we have bought property together, but we formed partnerships.

• 55:43Speaker 04

  That's right.

• 55:43Brian Preston?

  To, to go do it. So there's only one tax ID associated with this. It works when like, when you and a spouse buy, since y'all are filing a tax return together, it doesn't matter that it's only on the first person's social security that's reported to the IRS. This just creates an administrative nightmare for your taxes every year. But it also creates a life mess in a lot of ways because at the end of the day, who, who's responsible for the house and the decisions that go on? That's why I like when one person is, if you're using this as a house hack, you know, you get to kick out, like you get, you get a spouse, you get to kick out your roommates. You say, hey, you know what? It was a great time, but when we go in a year from now, when we renew the lease, you know, I've got a spouse now. I don't need.

• 56:26Brian Preston?

  You as a roommate anymore and you, you, you, in a nice way, you, you come to an agreement to separate ways. If you both own it, how do you have that conversation? It's just weird.

• 56:36Speaker 04

  And so what I would do is I would rewind a little bit. Okay. You're a single person, but buying homes is I would, I would go through the exercise of, okay, why do I want to be a homeowner? What is it that I'm looking for? Like, what's the problem I'm solving? And can you answer in the affirmative, the questions we'd want you to answer to be able to buy a home? Do I see myself being in this location for the next five to seven years? Do I see my life circumstance staying the same? Meaning I'm likely not going to get married or I'm likely not going to have kids or whatever that thing may be. Is homeownership the right thing at this point in time? If you arrive at the conclusion that yes, it is, I think you would likely be better served continuing to maybe, maybe you go

• 57:20Speaker 04

  rent a place with this friend of yours so that y'all can split the rent. You can save a lot of money, build up. So that ultimately one day you can buy, but I think there are more risks than there are rewards. If you try to go buy a home with a non-spousal partner, just to get on the home.

• 57:40Brian Preston?

  Or finish the drill and like if you, if you say, hey, we're going to live in this for the next two years and then turn it into a rental property. Y'all go form a partnership and write out an operating agreement or a partnership agreement that lays out all these different things. Because begin with the end in mind and maybe then it works because, but just throwing it against the wall and hoping it all works out. And life's not going to make this messy. That's a disaster. That's why I always begin with the end in mind. And think through all the life changes and everything that's going to happen.

• 58:09Speaker 04

  That's right.

• 58:11Speaker 05

  That was a good and well-rounded answer. Amber, thank you for the question.

• 58:16Speaker 04

  We have a home buying hub she should go check out too.

• 58:18Speaker 05

  Oh, I love that. Go to moneyguy.com. Look at our ultimate guides for home buying. Also, we have two free resources. A home buying calculator and a home buying checklist that you can download at moneyguy.com/resources. I'm telling you, moneyguy.com, man, we just keep putting all kinds of stuff up there and then it is there for you.

• 58:36Brian Preston?

  Grow.

• 58:37Speaker 05

  That's the goal.

• 58:37Brian Preston?

  Learn, apply, grow, rinse and repeat. And then we create this abundance cycle all over again.

• 58:43Speaker 05

  Yep. So, um, yeah, whether you're ready to dive deeper, watch some old episodes, get some free resources, or take it to the next level and become a client. Moneyguy.com is your place to go. Even though we'll turn the cameras off today, we will be back at Tuesday, uh, every Tuesday at 10 a.m. Central. What?

• 59:01Brian Preston?

  I thought we were gonna do one more, huh?

• 59:03Speaker 05

  Oh, do you want to?

• 59:05Speaker 04

  Is that a plan? Brian wants to add some more questions.

• 59:07Brian Preston?

  Let's do one more.

• 59:07Speaker 04

  Let's go. He said, let's, he said, let's give the, the people came here for answers.

• 59:11Speaker 05

  Now I feel silly for going into my whole spiel.

• 59:14Brian Preston?

  New employees are in the wings watching too. So let's give them one more.

• 59:17Speaker 05

  All right, let's do one more.

• 59:18Brian Preston?

  One more for the folks.

• 59:19Speaker 05

  I just wasn't sure if he'd be able to do this one quick enough, but we'll go over. Let's go.

• 59:23Brian Preston?

  Let's give it one more.

• 59:23Speaker 05

  Let the people what they want. Let's give Brian what he wants.

• 59:25Brian Preston?

  Do it.

• 59:26Speaker 05

  All right. This one's from Unbelievable. It says, "My company offers an employee stock purchase plan, purchase program. Twice a year, employees can invest up to 10% of their base in company stock. The price of the stock is set at 15% below the 26 week low."

• 59:46Brian Preston?

  Wow.

• 59:46Speaker 05

  That's great. So he says help. So I think he's asking how to handle this.

• 59:51Brian Preston?

  Well, see, by the way, this is help in a good way. Cause you're like drowning in opportunity. Because and, and let me just, everybody who doesn't know, because God, we keep believing we made through a whole show and have not popped this thing around. This is why we just.

• 1:00:05Speaker 05

  Good thing we did this question.

• 1:00:07Brian Preston?

  The Financial Order of Operations, the reason that Unbelievable is having so much issue is that step number two is you gotta get that free money. When your employer is opening up the checkbook to load you up with free money, you say, "Thank you, thank you, thank you." And you try to maximize. So if you can't do 10% right off the, the get go, try to figure out how over the next year, two years, you get pay raises, you can maximize that free money.

• 1:00:34Speaker 04

  Yeah, I, I would say do everything in your power. This would be a step two thing in my mind to try to get to that 10%. And what's interesting is the way that I imagine your plan works, based on the familiarity we have with the SPPs is. Every pay cycle, you defer money into like this holding account. And then twice a year, it reviews, okay, you've built up all this money. 26 week, what was the low 50% discount you buy? I would imagine with your plan, because it's structured that way, there's not like a minimum holding period. So even if you were to think of liquidate that stock after it was acquired, after you purchased it. Yeah, you're going to pay ordinary income, but it's still free money. You're paying ordinary income tax when the stock is likely higher than it was in the 26 low plus 15%.

• 1:01:18Speaker 04

  Even after you net out the ordinary income taxes, you're still going to have substantial free money. Then you can go back to the financial order. Brian, you hold the thing up for me? Back to the financial order of operations. Okay, well now do I need to beef up my emergency fund even more? Don't you do the Roth, do you do HSA? If that money is there and it's available, I would try to do everything in my power to be able to take advantage of it. And then figure out how I invest and then how I divest and then redeploy.

• 1:01:44Brian Preston?

  Okay, so now that we got you all hopped up and excited about how good of an opportunity this is. Let's give you the other side is remember there is the risk that you already have your human capital, meaning your wages and your time tied into this company. You want to be very mindful not to build too much of your liquid investments into the same company. So that's why you do need to follow the shampoo bottle lead is that rinse and repeat. Meaning that after you take advantage of the situation, come up with a plan where every year you're kind of cleaning out, you're selling it, taking advantage of the money, putting it in, diversifying exactly what Bo was talking about through the financial order of operations and then repeat the process over and over again. Cause you just don't want to have too much of your money all tied up into your portfolio.

• 1:02:28Brian Preston?

  But yes, please take advantage of that free money because this stuff will amplify that wealth building journey.

• 1:02:36Speaker 05

  Don't worry, don't worry. I'm not going to give my whole spiel again. Just go to moneyguy.com, you'll love it. That's what I'm going to say. Thank you for being here for our Ask Money Guy show. We'll be back every Tuesday at 10 a.m. answering your personal finance questions and having a little fun.

• 1:02:50Speaker 04

  I want to throw one thing out there, can I? Cause we're at the very, this is the very end of the show, so it's probably not very many people out there. We have a lot of, a lot of exciting stuff coming out. I'm not going to tell them what it is, but I just think that you're not doing a good enough job telling people.

• 1:03:03Brian Preston?

  Oh my gosh, you just cut.

• 1:03:04Speaker 04

  How much exciting stuff is coming.

• 1:03:06Brian Preston?

  Get the shank through the security.

• 1:03:08Speaker 04

  End of this year. Like you, you know the things I'm talking about.

• 1:03:11Speaker 05

  This is coming up in my review.

• 1:03:12Speaker 04

  Remember the thing that I talked about that we're going to do?

• 1:03:14Speaker 05

  This is my review.

• 1:03:15Speaker 04

  People don't know about. Man, if you are not subscribed to the channel, if you're not our email newsletter, you're not going to know about some of the stuff we have coming and some of it, Brian already let the cat out of the bag.

• 1:03:28Speaker 05

  He's not wrong.

• 1:03:28Speaker 04

  We've got some new eBooks coming out, but we have things even bigger and better than eBooks that are happening later on. Uh, this, I can, I think it's this year. We, it's going to be this year. Uh, I just want you guys to be as excited as we are because we cannot wait to get it out into the light of the day.

• 1:03:46Brian Preston?

  So what happened was you made the eyebrow comment.

• 1:03:49Speaker 05

  I know.

• 1:03:50Brian Preston?

  Oh, that was the moment that Bo took his toothbrush and started forming a shank out of it right then. And that way he could get it through security and just do the attack right there undercover

• 1:04:01Speaker 05

  Alcatraz on the mind right now, I think.

• 1:04:02Brian Preston?

  Of the show. But, um, in all seriousness, I know, I know that Rebe's already done the closeout, but I will say, look, learn, apply, grow. That is the abundance cycle. You know, I love that our system lets you create the results before we ask anything of you. And that's why we'll leave the porch light on for you. If you've figured out, hey, your simple life has created this level of success that now this thing is, man, it's, it's just straight up complex. Consider working with us. I'm your host, Brian, joined by Mr. Bo, Rebe and the rest of the crack content team. Money Guy, out.

• 1:04:36Speaker 05

  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.

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