How to Retire in 12 Years or Less if You Started Late - Money Q&A

In this episode of the Personal Finance Podcast, we're going to do a Money Q&A about how to retire in 12 years or less if you started late. Today we’re going to answer these questions: How can you retire in 12 years or less? How to manage cash reserved for a Roth IRA? How to manage your savings bucket? How to unfreeze your credit fast? How Andrew Can Help You: Don't let another year pass by without making significant strides toward your dreams. "Master Your Money Goals" is your pathway to a future where your aspirations are not just wishes but realities. Enroll now and make this year count! Join The Master Money Newsletter where you will become smarter with your money in 5 minutes or less per week Here! Learn to invest by joining Index Fund Pro! This is Andrew’s course teaching you how to invest! Watch The Master Money Youtube Channel! , Ask Andrew a question on Instagram or TikTok. Learn how to get out of Debt by joining our Free Course Leave Feedback or Episode Requests here. Thanks to Our Amazing Sponsors for supporting The Personal Finance Podcast. Shopify: Shopify makes it so easy to sell. Sign up for a one-dollar-per-month trial period at shopify.com/pfp Chime: Start your credit journey with Chime. Sign-up takes only two minutes and doesn’t affect your credit score. Get started at chime.com/ Monarch Money: Get an extended 30 day free trial at monarchmoney.com/pfp Thanks to Fundrise for Sponsoring the show! Invest in real estate going to fundrise.com/pfp Indeed: Start hiring NOW with a SEVENTY-FIVE DOLLAR SPONSORED JOB CREDIT to upgrade your job post at Indeed.com/personalfinance Thanks to Policy Genius for Sponsoring the show! Go to policygenius.com to get your free life insurance quote. This show is sponsored by Better Help. Go to betterhelp.com/pfp and be on your way to your best self. Go to joindeleteme.com/pfp20 for 20% off! Links Mentioned in This Episode: The Bucket Method For Managing Your Savings (Master Multiple Savings Goals) The 1-3-6 Method For Building & Managing Your Emergency Fund Connect With Andrew on Social Media: Instagram TikTok Twitter Master Money Website Master Money Youtube Channel Free Guides: The Stairway to Wealth: The Order of Operations for your Money How to Negotiate Your Salary The 75 Day Money Challenge Get out Of Debt Fast Take the Money Personality Quiz 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.

• 0:00Andrew Giancola?

  Longtime listeners know, one of the best ways to build wealth is to increase your income. And one way to do that is by starting a side hustle. And that's one reason why I absolutely love Whatnot. Now, my son and I, we love collecting sports cards. And we've used Whatnot to buy and sell cards. It's been a really fun way to enjoy something we love together. Now, Whatnot is a live shopping platform where people sell everything from sports cards to clothing, electronics, and collectibles. And what's really cool about it is you can turn something you're passionate about into a business. And you could do it right from your phone. You don't even need a storefront or a website. So whether you're looking to make some extra money or find great deals on your next shopping trip, check out Whatnot.

• 0:44Andrew Giancola?

  Search Whatnot, that's W H A T N O T, in the App Store. Download and start selling right away. When I started the Personal Finance Podcast, I had no idea how big it could become. I just knew I had something I wanted to share, so I started putting it online. And looking back, I definitely wish I would have started a decade earlier. One of the horror parts about building something online, though, is making it look professional. A website used to mean hiring a developer, figuring out design, and potentially spending thousands of dollars. In fact, on my website, I spent tens of thousands of dollars. That's what impressed me when playing around with Hostinger's AI website builder.

• 1:27Andrew Giancola?

  I told it what kind of website I wanted, and I built the first version in minutes. No coding, no designer or developer needed. And Hostinger doesn't stop at launch. Their AI can help with SEO, website copy, email marketing, and more. Plus, your domain, website, email, and marketing can all live in one account, with plans starting at just $3 every single month. Hostinger builds your vision step by step. Create your website today. Go to hostinger.com/pfp and use code PFP for 10% off now. On this episode of the Personal Finance Podcast, how to retire in 12 years or less if you started late. Let's jump into Money Q and A.

• 2:26Andrew Giancola?

  What's up everybody and welcome to the Personal Finance Podcast. I'm your host, Andrew, founder of MasterMoney.co. And today on the Personal Finance Podcast, we're going to be talking through four of your different questions on this money Q and A. If you guys have any questions, make sure you join us on the Master Money Newsletter by going to MasterMoney.co/newsletter. And there we're going to be giving you a bunch of different insights and different tips on how to master your money. If you guys have any questions, you can respond to any of those newsletters that come out every single week. And don't forget to follow us on Spotify, Apple Podcast, YouTube, or whatever your favorite podcast player is. And if you're

• 3:09Andrew Giancola?

  getting value out of the show, consider leaving a five-star rating and review on Apple Podcast, Spotify, or giving that old thumbs up on YouTube. Really, really appreciate that. It helps us spread this message to other people that we believe anybody in this world can build wealth and we want to teach them how to do that. Now, today, we're going to be diving into four of your different questions. The first question is going to be talking through, hey, how can you retire in 12 years or less and giving a step-by-step plan on how to do that based on a specific situation? The second one is how to manage cash reserved for a Roth IRA. This person has enough cash reserved for their Roth IRA for next year and they want to figure out how to manage that cash. Next is how to manage your savings bucket. We talked through the bucket method in a recent

• 3:53Andrew Giancola?

  episode and we want to talk through, hey, how do I manage these savings buckets and make sure that they are properly allocated? And then lastly is how to unfreeze your credit fast. We had a listener send in a suggestion and we are going to go through how she actually unfreezes her credit in less than a couple of minutes. So I actually am really excited about that one. So that's going to be a cool little process there that we go through and kind of show you what she shared with us. So I'm really, really excited about that. So if that's something you're into, let's get into it.

• 4:23Andrew Giancola?

  All right. So the first question, Andrew, I was introduced to your podcast through a friend. I'm 47 years old and feeling like I missed the savings for retirement boat. I spent 20 years on disability and just two years ago returned to work. I've been fortunate to find my way into a job that I love, which is also paying me well enough that I feel like I can try to catch up on my retirement savings. I was hoping you could give me some of your insight into how you'd best tackle saving for retirement if you were in my shoes. Here is my situation. My wife and I would like to retire in 12 years. She'll be 58 and I'll be 59. My wife works in public education in Wisconsin as a principal. At 58, she will have her 30 years in and will be able to claim her pension. My mother was also a principal, so that's amazing.

• 5:05Andrew Giancola?

  She also has been contributing to a Roth 403B, which currently has a balance of about $110,000. As part of her compensation, when she retires, the district will carry her and I on their insurance plan for 10 years. Awesome benefit or until Medicare, whichever comes first. I started working in diagnostic imaging two years ago at my local hospital. I was putting 15% into a traditional 401k, which now has a small balance of $20,000. That's not small at all. That is a great starting point. I left that job to pursue work as a travel tech, and I am working for a medical staffing agency now. And my compensation is two-part. I give a living stipend, which provides roughly $1,100 a week in tax-free money, along with a taxed hourly wage.

• 5:50Andrew Giancola?

  My hope is to be able to save roughly $40,000 to $45,000 a year. I was thinking of opening a Roth IRA for both my wife and I to contribute the maximum $7,000 each using my tax-free living stipends, then try to max out my 401k. I plan to keep it simple and utilize the S and P 500 index funds from my accounts. It is likely that I'll be working for different travel staffing companies regularly, and as such, I'm concerned about what to do with my 401k accounts. Should I start collecting them like pets? I am also unsure what to do if I'm able to save more per year. So here's what we're going to do is I'm going to kind of go through what I would do in this scenario. Now, you are not in a terrible situation. Now, first of all, congratulations on finding a job that you love and that you enjoy.

• 6:34Andrew Giancola?

  I think that is really, really important in terms of being able to retire quickly. It's also amazing that your wife has been a principal over the course of the last. 30 years because what this does is the public school pensions are pretty good in terms of helping you kind of recoup some of those costs that you're going to need to be able to save for. And so factoring in all this stuff is really, really important. And I know this is going to be something where you're starting with $130,000 invested. And so over the course of the next 12 years, it is really important to start getting aggressive with how much you're investing. So let's do a little calculation here as we start to go through this process. First, we've got to figure out how much you want to spend in retirement. And so, once we figure that number out, what I would do is think through, you know,

• 7:19Andrew Giancola?

  how can I get to that point? Now, when you figure out how much you want to spend in retirement, we also need to subtract, A, the pension, and then next, we also need to subtract social security. Now, if you didn't work for 20 years, I'm not sure what your social security will land at, but if you can do that calculation and you add in social security plus the pension, then we'll be able to kind of factor in some of these costs on how much you actually need. So think about how much you want to spend every single year. Let's say, for example, after social security and after the pension, you need an additional $40,000 per year. Well, that means you're only going to need to get to a million dollars in your portfolio in order to be able to retire, which is a great spot to be in, based on some of your projections here. And so, let's say you can save $45,000 per year. I think, A, congratulations on making that your goal.

• 8:03Andrew Giancola?

  I think most people just kind of wave their hands in the air and say, hey, I'm not going to be able to even get, kind of get to that point in time. That is fantastic that you were able to save that every single year. So I'm going to give you a starting amount of $110,000, and I'm using an investment calculator from calculator.net. We actually have our own that I haven't launched yet. I've had it for a while, but we, we need to launch that out to you guys. We have our own that I'll kind of show you guys. And I'm going to use a 7% rate of return. When I am calculating retirement numbers, I always do it in a conservative way. The S&P 500, which is what you've talked about that you're considering investing in, has returned 9% to 10% over the course of the last 40 years, but I like to toggle it down to 7% because the last thing I want to do is overestimate where I'm going to be when it comes to retirement.

• 8:47Andrew Giancola?

  So you are starting at $110,000, you're in the S&P 500, $45,000.

• 8:52Andrew Giancola?

  per year and over the course of the next 12 years we need to figure out exactly where we're going to be and so if you need to figure that number out I just put in this calculator and here's the results is if you over the course of 12 years did that you'd have 1,052,721 dollars in that account so at 1,052,000 you can withdraw slightly over 40,000 dollars per year based on that 4% rule and still be able to preserve that well so you have the 40,000 dollars here from your portfolio you have the pension money coming in and whatever else is there whatever social security is available and those types of things and if you have any other benefits or any other income coming in you can factor those in and so let's say you know your pension covers a good chunk maybe your pension covers 40 grand I'm just making these numbers up your portfolio covers 40 grand and your social security comes in at another 20 to 30 to 40 depending on where you land I mean that is a pretty good retirement right there and based on what you're projecting out that is a very interesting retirement now where would I put this stuff where would I actually start doing investing those dollars and how can I kind of think through this process first is I love your idea of the Roth IRA contributions I think that is going to be really really important now you may depending on how much you both make I'm not sure exactly how much you both make I know how much you make but I'm not sure how much your wife makes I'm assuming you're probably toeing the line close to the limit and so because of that you could do a backdoor Roth IRA as well but getting that 7,000 annually into those Roth IRA contributions is going to be important because you get that tax-free growth over the course of the next 12 years and 12 years is a long time don't worry about you know this is not something where you're behind I just showed you you can get to a million dollars in that portfolio over the course of the next 12 years just by being diligent and that's at a 7% rate of return by the way let's actually as I'm talking here let's look at an 8% rate of return if you got 8% you'd have 1.13 million dollars if you had a 9% rate of return over the course of that timeframe then you'd have 1.2 million dollars and at a 10% rate of return just for kicks and giggles and I would not factor it this way is 1.3 million dollars over the course of the next 12 years really really good opportunity here and so because of that that could get you to 50 grand if you had a 10% rate of return and so because of

• 11:02Andrew Giancola?

  That we are in a great situation depending on how much you want to spend in retirement. And so I think that the Roth IRA is going to be the place if I was in your shoes. This is not, you know, if I was in your shoes, you can talk to a CFP if you want to an hourly rate. Do not let them take assets under management, but the Roth IRA contributions for you and your wife is a great place to start. Maxing out the 401k contributions is an excellent, excellent place to put the rest of your dollars up to that contribution limit of $23,000. And then, once you get over the age of 50, you get that ketchup contribution, which is going to be nice and juicy for you. And currently that ketchup contribution is going to get you all the way up to you could put $30,000 per year at the time recording this into that 401k.

• 11:44Andrew Giancola?

  It's actually going up next year again a little bit. So I think it's going up another 500 bucks. So that is going to be one that's going to be really, really important. And when you max out those 401ks, just keeping it simple, S and P 500 index funds are the way to go. You are doing the right thing there. And then what to do with the extra savings? So let's say, for example, that you max out those Roths, you max out those IRAs. Do you have a high deductible health plan? The likelihood of that may be no, because you're on disability. That's just me guessing because you were on disability. So that's just me guessing. So if you don't have a high deductible health plan, let's X out the HSA and we're going to go and look into what else can you do here? Well, I would consider a taxable brokerage account because that would give you the flexibility that you need. When you hit retirement age, especially if you retire a little early here, especially if you or your wife retires a little bit early.

• 12:29Andrew Giancola?

  It gives you some additional flexibility to be able to look at that. And so with those extra savings, that's where I would look at is a taxable brokerage account. You have that flexibility. It's going to allow you to do some great stuff there. And I just like to have diversified accounts and tax buckets. And then as your income allows it, you can do the backdoor Roth conversion. So that's really, really important as well. Now, if you have a bunch of different 401ks, that's not a problem whatsoever. And in fact, this is a really easy process to do because I know you were worried about having a bunch of different 401ks. There is a service that's free called capitalize that each time you get a new 401k, they can help you roll it over into a new account. But secondly, what you can do is you open a rollover IRA is what it's called. Okay. And a rollover IRA is just somewhere at Vanguard or Fidelity.

• 13:12Andrew Giancola?

  Wherever else and you take your 401k each time and you just roll it into those rollover IRAs. And that's going to allow you to control those investments and invest those dollars. That's where I put my old 401ks is I rolled them into a rollover IRA at Vanguard. And you can invest those dollars into whatever else you want. So each time you move jobs, you just roll it over into that rollover IRA. And then also just making sure you have those healthcare considerations. So I know your wife's pension has that health insurance coverage. Awesome, awesome benefits, at least until you hit that Medicare benefit. So that's going to be fantastic for you and it'll be a significant part of your retirement plan for sure in those early years. And I think for most people, they don't have that benefit, so it's really cool that you have that.

• 13:52Andrew Giancola?

  Next is having this in place means that you can focus on building up your retirement nest egg without worrying as much about healthcare costs. So that's another big, big piece that you really want to make sure that you are thinking through. So to review, I'd be taking these dollars because you are saving $40,000 to $45,000 a year. Awesome job. I'd be taking these dollars, putting them towards your Roth IRA for you and your wife. I'd be looking at the 401k and then I'd go back to a taxable brokerage account on the back end and start to put money in there. And that is how I would think through retiring in 12 years. And what is happening here is your savings rate is the catalyst to allowing you to be able to do this. Your savings rate is what is the huge, huge benefit. Now let's just look, for example, before I wrap this question up, let's just look, for example, if you went an extra three years, okay?

• 14:34Andrew Giancola?

  Let's say you did 15 years at a 7% rate of return instead of only 12. What would happen? Well, your portfolio would grow to 1.5 million at 7%. At 8%, it would grow to 1.57 million. At 9%, it would grow to 1.7 million. And then at a 10% rate of return, it would grow to 1.889 million, almost $1.9 million in 15 years. So if you wanted to work a couple of extra years and just invest those dollars and get them rolling because you are really want to get to a different number, you can absolutely do that in an extra three years and be able to still retire in your very early 60s and have a great retirement.

• 15:16Andrew Giancola?

  So congratulations on where you are. I am so proud of you just for even, you know, taking control of your finances. And what you are doing is absolutely amazing. I am so, so incredibly excited to see what you do. Please fill me in and keep me posted on what you decide to do because I love these stories. And I love talking through this stuff with people. So really, really excited. And when you hit retirement age, I'm inviting you right now. When you hit retirement age over the course of the next 12 years, this show is still going to be rolling. I want you to come on the show and let's talk about what you did. I think that's really, really cool stuff, really exciting. So thank you so much for sending in your question and good luck to you here.

• 15:51Andrew Giancola?

  My relationship with money has changed a lot over the years. Early on, I thought building wealth was about making more money. Now I know it's really about having clarity. When you know exactly where your money is going and whether you're on track, you make better decisions. That's one of the reasons I love Monarch. It's the personal finance app that tracks everything from your accounts and investments to your savings, goals and spending. So you can see your entire financial picture in one place. One habit that's made a huge difference for me is my five minute drill every single morning. I open Monarch, check my spending, investments, cash flow and net worth, and I'm done in just a few minutes. It gives me confidence that nothing is slipping through the cracks.

• 16:31Andrew Giancola?

  I also love the AI weekly recap because it'll flag spending changes, upcoming expenses, or shifts in my net worth before they become a problem. Instead of reacting after the fact, I can make adjustments early. It really feels like having a financial advisor in your pocket. Write your own money story with Monarch. Use code PFP at monarch.com to get your first year of Monarch Core half off at just $50. That's 50% off your first year at monarch.com with code PFP. If you've been listening to this show for a while, you know it's not just me anymore. It takes a great team behind the scenes to make everything happen. And if I had to hire someone tomorrow, I'd want someone who could jump right in and make an impact.

• 17:16Andrew Giancola?

  That's why I'd use Indeed Sponsored Jobs. When workplace chaos hits, Indeed Sponsored Jobs helps you reach qualified candidates faster. Your job gets boosted in search results, so you're spending less time searching and more time interviewing the right people. Plus, you only pay for ...result, which I absolutely love. Sponsored jobs posted directly on Indeed are 95% more likely to report a higher than non-sponsored posts. That's a huge advantage when you're trying to grow your business. Spend less time searching and more time actually interviewing candidates who check all of your boxes. Less stress, less time, more results. When you need the right person to cut through the chaos, this is the job for Indeed sponsored jobs.

• 17:59Andrew Giancola?

  And listeners of this show will get a $75 sponsored job credit to help get your job the premium status it deserves at indeed.com/podcast. Just go to indeed.com/podcast right now and support our show by saying you heard about Indeed on this podcast. Indeed.com/podcast. Terms and conditions apply. Need to hire? This is a job for Indeed sponsored jobs. It's kind of amazing how much can change in just a single year. Every summer, the kids are a little bigger, a little more independent, and life looks a little different than it did the year before. And it reminds me that while we can't predict the future, we can prepare for it. That's one of the reasons I like PolicyGenius. See, PolicyGenius isn't an insurance company.

• 18:43Andrew Giancola?

  They're an online marketplace that lets you compare life insurance quotes from some of America's top insurers, side by side, for free. And their licensed team helps you compare coverage, prices, and terms, answers your questions, and even handles the paperwork so you can get the right policy without the hassle. For me, having life insurance isn't about expecting something to happen, it's about knowing my family is protected so I can actually enjoy these moments together instead of worrying about what comes next. And with PolicyGenius, you can find 20-year life insurance policies, starting at just $276 a year for $1 million of coverage. Head to policygenius.com to compare life insurance quotes from top companies and see how much you can save. That's policygenius.com.

• 19:30Speaker 01

  This episode is brought to you by Google Chrome. You think you know a browser, but Gemini and Chrome? That's new. It can help you with practically anything on the web, like restoring a vintage motorcycle from a 50-page restoration block, or finally break down that long article you've had open for weeks. Gemini and Chrome is here for it. Ready to make anything online make sense? There's no place like Chrome. Check responses set up required. Compatibility and availability varies 18 plus.

• 19:54Andrew Giancola?

  All right, so the next question is, Andrew, can you walk me through or your thought process on how you go about distributing funds from your savings buckets to my Chase bank account to refund or pay off payments made for emergency expenses, travel, et cetera, typically made with my Chase Sapphire credit card? So for example, I use Ally Bank's high-yield savings account to create buckets for my emergency fund, vacation, travel, a new car purchase, saving for an engagement ring, and reoccurring payments towards a down payment on my first house, hopefully in the next three to five years, and house hacking if I can afford a duplex. Awesome idea. However, right now, I just pay for my flights, car expenses, et cetera, with my credit card, and I pay it off in full every month with a little bit of money that stays in my checking and savings account without ever doing anything

• 20:39Andrew Giancola?

  with the buckets I funded to set aside for my high-yield savings account. Should I pull what's left in my Chase accounts, keeping the minimum balances if required, and put that in a high-yield savings account to get the extra 4.2% interest, and then transfer cash out of these buckets back to Chase when I make these purchases? I feel like I've done all the work to set these buckets up and fully fund most of them with cash I have on hand, and I've maxed out my HSA, company IRA match, and Roth IRA, but then just let them all sit without using the money I've set aside for each of these buckets. Now, I put using in quotations, because I still pay for emergencies, travel, et cetera, with my card, but I never need to pull the money out of my Ally account because I have a few thousand dollars

• 21:23Andrew Giancola?

  in my Chase account from direct deposits. I hope this makes sense and you're able to help me out. I may just be a mental thing I need to get past, but I don't feel like I'm taking full advantage of the process just yet. Thanks for your time and keep doing what you do. Been a long time listener and I have learned a ton from you. Well, thank you so much for the question. First of all, Absolutely amazing job what you're doing here. And what you are doing, you're in a very, very good situation. This is an awesome, I wouldn't even call it a problem. This is just an awesome situation to be in. And the way that you've set up these disciplines and put them into place is really now showing the massive benefits of automating your savings buckets. And I want most people to kind of just listen to this question. Basically, what the problem comes down to is that he has enough of money to cover all

• 22:06Andrew Giancola?

  his emergency expenses when they arise, or other expenses that he saved up for. And so because of this, he doesn't have to pull from his savings buckets and ally. And so this is something I think that is going to be really, really important to kind of think through. And I do think it could just possibly be a mental block for you somewhat. So first of all, is I like my checking account to be pretty lean. And the reason why I like it to be lean, I like to have a little cushion there just in case some unexpected expense comes up and they pull from my checking account. That's so I don't have any issues. I do like to have a little bit of extra money there. But when you have your checking account lean, really all your checking account is, and if you've been a long time listener, you've heard me say this a bunch of times, is just a quick pass through. Now, because you are paying it on a credit card, it gives you enough time for you to

• 22:50Andrew Giancola?

  kind of accumulate enough funds to then just pay it off that card at the end of every single month. And so this is a problem, A, there's a couple of things you could do here. One is if you are looking to prioritize financial freedom sooner, one thing I would do is kind of look at my checking account when it comes to some of these expenses and say to myself, can I actually save more dollars and prioritize some more of those dollars into investments? That's the first thing I want to do. Because first on the list for me, priority wise, is I always think, can I get more dollars in investments? Why? Because I can pursue financial freedom faster and I can just set up more security in my life. So can I throw more dollars to, you're maxing out all these accounts, but can I throw more dollars into a taxable brokerage account? Can I set more dollars aside for maybe your house down payment that you have there?

• 23:36Andrew Giancola?

  Or what are some other priorities that I have? Secondly, is are any of these savings goal priorities not being hit fast enough? And if that is the case, can I take more dollars and put them towards that? Like I just mentioned, the house down payment, you said you're saving up for an engagement. Are you on pace for that, you know, thinking through some of those priorities? What do I value most within those priorities? Thirdly is you can beef up that emergency fund even more with some of the little extra additional cash you have on hand. What's happening here is you have these savings buckets set up and you're saying you're not using the funds for those saving buckets. I would use the money for what it is intended for outside of possibly the emergency fund. Now, let me explain what I mean by this. If you go on a trip and you save up cash for traveling on a trip,

• 24:18Andrew Giancola?

  I would use the money that you intended for travel and just transfer it back into checking. I know this is kind of a tedious process, but if you are meticulous about this stuff, it is something that I would want to do, especially for those short-term savings goals. It's kind of move the money back out and pay that off. Now, if you don't use the money and there are savings goals that are really important to you, another thing you could do is you could pay it off with your checking account. And in Ally, you can actually roll buckets over. If you don't want to do all these wacky transfers, like if you don't want to transfer to Chase just because it's kind of tedious. What you can do is you can roll the money that you had for travel, that portion that you had bookmarked and you can roll it into another category. And when you do that, that's just going to say, hey, I spent this money on travel.

• 24:59Andrew Giancola?

  I rolled it into another category and that'll kind of help with my, my savings goals for that month. So that's another thing you could do, but really compartmentalizing and just taking the money from Ally, putting into your checking account when you need to pay it off for travel, for example, is what I would likely do. And that's just a mental block that you kind of got to get past. And what really is happening here is maybe we can get a little more granular on, and it doesn't have to take a ton of work, but we can get a little more granular on what your expenses are and how much you should be carrying in that checking account so that you can get more dollars towards the things that you actually want them to do. Cause you can achieve a lot of these goals even faster if you can just funnel more cash over to some of these savings goals. Now, sometimes for some people, the psychology of just seeing all their buckets 100% full is like a really big reward value process that they absolutely love.

• 25:44Andrew Giancola?

  And so if you like that, uh, you know, more power to you and continuing your process. But I do like to have it more organized and compartmentalized where I want to pay off the certain things that I allocated cash for in my buckets. I want to use that cash for the things that I saved it up for. That's the first thing I would do is kind of look at, hey, how can I maximize this savings? So that I can take more dollars. So I'm not actually able to do this anymore. I'm not able to just pay off all the extra emergency expenses and extra things with the cash I have on hand in my checking account. Can I funnel that out into other areas to maximize my situation? It's always good to have a cushion in there. I'm not saying you don't need to have a cushion, but at the same time, can we even run a little leaner? Because if you're able to cover everything with it, we're probably carrying too much cash in that checking account.

• 26:28Andrew Giancola?

  So that's one big option. Number two is I would make that mental shift. So I would actively use these buckets. And because of this, this is a mental hurdle that you just got to get past is once you figure out I am going to start allocating more cash from checking into these buckets. Secondly, I want you to kind of get past that mental hurdle because now you are running leaner in your checking account. And so because you're running leaner in that checking account, now it is absolutely time to use those buckets. So when you start using those buckets, you just transfer it back to Chase when you are paying off the cards. You can look at some of the different areas of where you spent money. You can transfer it from Ally back to Chase and it's a very simple, easy process.

• 27:05Andrew Giancola?

  Now, one other category you can have, and a lot of people advocate for this, is a buffer category in Ally and/or stuff I forgot to budget for is what some people call it. But it's just like a little buffer category, which has a couple of grand in there that can help you kind of just cover any unexpected things that come up outside of what you want to allocate for your emergency fund or anything else. That's another thing you can have there just to kind of help you cover that mental roadblock. But besides one of that, just having those dedicated funds and actually using them is a big, big thing. A lot of people don't use their emergency fund. And this is what I talked about in the 136 method episode is because a lot of people like to keep their emergency fund. It's a badge of honor. They don't like to use it. I like for you to use it, which is why we use the 136 method, because then we're going to come back and we're going to actually just follow the 136 method

• 27:49Andrew Giancola?

  over and over again to replenish that emergency fund. And so it's something that I think you can kind of cycle over and over and over again. Now let's give an example here for just to make this easier for the listeners to is let's say, for example, you book a $1,500 flight. Okay. And you charge the $1,500 to your Chase Sapphire card. What I would do is right after After I booked that $1,500 flight, I would go into Ally and I'd move the $1,500 from my travel bucket over to Chase and into the checking account. And then when the credit card bill is due, you can pay off that $1,500 balance. Or if you pay it off sooner, you could do it that way as well. Now, you've heard me probably talk about that I pay off my credit cards weekly. This is another reason why I do it is because I can start to move money around a little bit

• 28:32Andrew Giancola?

  and figure out exactly what I spent money on in terms of stuff like that, like travel or emergency expenses, or if I spent money on a specific thing I've been saving up for. I can move it over and kind of get that covered weekly. So it's not just lingering in my checking account. The last thing you want in your checking account is just cash lingering because that means you're going to end up spending it on something else that it wasn't intended for. And so I like to kind of move that money around and pay it off quickly for that intended purpose. That is another thought that I, just to have, but that is something I always do is I just love the weekly credit card payoff. It doesn't help you in any way, shape or form, except to keep you organized. And so it's just something I like to do personally. So here's the steps. Let's get leaner on the checking account if we can.

• 29:16Andrew Giancola?

  And let's move cash from checking either. And if you're uncomfortable with this, use that buffer bucket if you need to to be able to move it over. You can also, if you're really, really worried about that, put it into a Chase savings account, short term, where you can have it there. And then if you kind of overspend in your checking, it'll pull it automatically back over your checking account. So that's one. Two is then we want to get over that kind of mental hurdle and that mental roadblock of not using our savings buckets. Let's make sure we use our savings buckets and let's put that together. And let's make sure we use our savings buckets. So each time you make a spend, let's transfer it over to checking and then you can pay off the credit card. If you're comfortable with doing it monthly, that's completely fine. But if you'd rather just kind of pay it off immediately, once you do that, then go ahead and do that too.

• 30:00Andrew Giancola?

  But if you'd rather pay it off when you transfer it, then you can go ahead and do that too. There's nothing wrong with that at all. That is another way to do it. So this is probably the most manual process of your finances that you would have to utilize. And if you're using savings buckets a ton, you may even want to kind of look at combining your high-yield savings account that has buckets with a checking account at the same time. Same bank if you want to kind of really optimize this automation. We could talk more about that in a future episode. But that's another option that you can have is to kind of optimize that automation where your checking account is in the same place. And it'll kind of automate it more seamlessly. That's another thought that you can have too. So mentally shifting over is really, really important, I think, on this one. And congratulations on all your efforts. I mean, this is absolutely amazing what you are doing.

• 30:42Andrew Giancola?

  And this is a fantastic problem to have and one that I have had in the past too. And it's one that I needed to kind of get over, but now I do it manually. But you can also do it automated and I'll kind of give some of those steps here in a future episode. And again, thank you so much for your question. Just amazing, amazing progress.

• 31:00Andrew Giancola?

  All right, the next question is about saving cash for their Roth IRA. So, "Hi Andrew, I already maxed out my Roth IRA for this year and I have the cash saved for my Roth IRA for next year. What should I do with this cash? I was thinking about investing this money so I can get a little more return on those dollars. Is this a good idea? What would you do in this situation?" So this is a great question and I actually have a very simple and quick answer. The thought process for any money that you are going to be using in the future for a specific purpose, whether it is five years or less, is going to be something that you need to make sure that you put only in a high-yield savings account. And the reason for this is to protect these dollars. Now, because you're going to invest this in a Roth IRA,

• 31:45Andrew Giancola?

  you could invest these dollars if you really, really wanted to. Now with the caveat that you could get this cut in half. We had a recession or something like that. That's just me saying that. There is no indication that we're going to have a recession that would cut it in half. But I'm just saying if that did happen, you have the caveat of understanding that that could happen. Or if the value goes down in a taxable brokerage account or something like that, then you're going to have to come up with the extra funds to be able to fund the rest to max out the Roth IRA. So that's the only caveat to this because the short timeframe, we're a couple of months away from the new year. You could invest those dollars, but me personally, I would put them in a high-yield savings account just to protect the seven grand and then making sure that over the course of the next three months, you could even put it in a three-month CD if you can lock in that rate. And then over the course of the

• 32:29Andrew Giancola?

  Three months when it matures and move it over to the Roth IRA and just max it out on January 1st. My favorite time of year is to max out those retirement accounts on the first of the year. So what you're doing is great. And in fact, historically, studies show that if you actually take a lump sum and invest it at the beginning of the every single year for these retirement accounts, as long as you've already, you know, maxed out the year before. That's actually a better way to invest overall because you're getting your dollars invested sooner and lump sum investing historically has proven to outperform dollar cost averaging at 78% of the time. So really cool stuff there that you have that available to you, but that's the quick answer and exactly how I would manage that money is I'd put in a high yield savings account, wait till January 1st, which is only a two and a half months away and then, and then go from there.

• 33:13Andrew Giancola?

  All right. So the last segment is going to be a listener wrote in and kind of talked to us about how they actually freeze their credit really quickly. And if you don't know about freezing your credit, this is a really important thing that you should do to protect your financial information. Now, one of the most important things that you should do is you should get your personal information removed by data brokers. So this last question is actually going to be brought to us by Delete Me. So Delete Me will actually remove your personal information from data brokers. One of the most frustrating things you'll ever do is if you've never gotten your personal information removed is you go out and you Google your name and you could do this in quotations, or you can do your address in quotations, or your phone number in quotations and see what comes up. And all of a sudden, you're going to see your personal information out there everywhere.

• 33:56Andrew Giancola?

  And the problem with this is that people who get a piece of your personal information can take that personal information and use it against you and try to scam you. So if they get a piece of your credit card information, or if they get a piece of a bank account number, something like that, they can Google and look you up and find the rest of your information. And the reason why this is happening is because data brokers have your information. They're allowed to present your information out there to other people. And so to get your information removed from these data brokers, the best way to do it is to use a service. So I use a service called Delete Me. It's the best service I've used in the last couple of years. If you go to joindelete.me.com/pfp20, you can get 20% off your plan with Delete Me. It saves you hours and hours and hours. Because a lot of times you have to go to these data brokers.

• 34:39Andrew Giancola?

  Data brokers and you have to write them a letter or you have to send them an email and they have all these steps you have to follow for each one. And they removed my information from thousands of different data brokers. It is well worth the time investment. I mean, that would have taken me the whole year to be able to. So they, they did it so quickly that it was absolutely amazing. So Delete Me is a great start to your personal financial protection plan, especially when, as we start to shop all the time online, there's so much more we're doing online. You can see financial fraud happening left and right. People are stealing social security numbers. It is so important that we do this stuff. The second most important thing is learning how to freeze your credit. Now, when you freeze your credit, what this means is that you're going to the three biggest data brokers and you're saying to them, hey,

• 35:23Andrew Giancola?

  I want to freeze my credit. Do not let anybody open a student loan in my name or a credit card in my name or anything else without me unfreezing my credit. So you go to the three major credit bureaus and you freeze your credit so that you do not have anything open in your name. It really does protect your finances and it's a really important thing. The problem with it is in the past, people have claimed, well, it's kind of tedious because you gotta go to each of the three major credit bureaus and freeze it. But we had a listener, Lauren from Nashville write in and she kind of gave us her process on how to do this. And I wanted to share it with you guys because I think this is so incredibly cool. And she wrote this amazing email to me. So first off, thank you for the work that you do. I've recommended your podcast to more people than I can count and I really appreciate your straightforward approach to making this stuff simple and actionable for people.

• 36:08Andrew Giancola?

  Thank you so much, Lauren. I have a hot tip for you to share with your audience regarding credit freezes. I've heard you mention a couple of times that you need to call in to freeze and unfreeze your credit. But you can actually do this entirely online now, which first of all, this is amazing because I have been literally calling in still. Like a caveman with that kind of stuff. I keep the three credit bureaus bookmarked so I can quickly log in, add a thaw and log back out. It lets you customize the dates as well, so you can unfreeze for a day, a week, till the end of the month, etc., for whatever suits your needs. So first of all, And I'll finish this in a second. This is a major breakthrough.

• 36:47Andrew Giancola?

  So here's the steps is Lauren says first thing she does is she bookmarks all three credit bureaus. And what I do with my bookmarks and maybe some of you do this too, is I try to keep them really organized. So like I'll have one for personal finance. Okay. And so you go to that bookmark, it would have the three major credit bureaus bookmarked in there. And then I could just click on it and then go to that website. Then she logs in and you can actually add the dates of how long you want to freeze your credit. Or if you want to unfreeze your credit or thaw your credit, then what you can do is you can do so for a day. You can do it for two days while you apply for credit cards, or maybe you're getting a mortgage or a student loan, you can do it for a week and then it frees your credit back again, which is absolutely amazing. I love this.

• 37:31Andrew Giancola?

  And so this is the power of more people are learning about freezing your credit. And I think the major credit bureaus know that and they don't want to take these phone calls. They'd rather you be able to do it online. So, so cool. So if you're applying for a credit card, you can choose a shorter timeframe. But if you're buying a house, you can set it to be unfrozen for longer. So you don't have to keep going back and forth. I love that. Just wanted to share that it's gotten even easier to manage this. And thanks to you, I froze it in the first place and now I can easily flip it on and off in about 90 seconds. So this is the 90 second system. If, you know, we'll call this the Lauren system. This is absolutely amazing. And I think this is so cool to be able to actually do this in a very quick way. So what we'll do is I'm going to go test this out and I'm going to go utilize this.

• 38:13Andrew Giancola?

  And I'll make a video on it so that you guys have, you know, the step by step instructions on how to do this. If I can blur out my information, then we'll go ahead and show you exactly how to do this step by step. So that you can learn how to unfreeze your credit and freeze your credit in 90 seconds. So thank you so much, Lauren, for sending this in. This is absolutely an amazing tip. And thank you guys for listening to this podcast because when you listen to this podcast, you are investing in yourself and that is the most valuable thing that you can do. Our goal is to bring you as much value as we possibly can. And so if you have any questions or suggestions, please shoot us an email. Join the Mastermind newsletter, respond there and we'll be able to kind of go through this process. I think it is such an amazing thing that you guys are listening to this show and investing in yourself. Listen, I hope you have a great rest of your week and we will see you on the next episode.

• 39:12Speaker 02

  Your sausage McMuffin with egg didn't change. Your receipt did. The sausage McMuffin with egg extra value meal includes a hash brown and a small coffee for just $5. Only at McDonald's for a limited time.

• 39:25Speaker 03

  Price and participation may vary. Promotion pricing may be lower than meal pricing.