Let's Talk About The CoastFIRE Epidemic

Coast FIRE has exploded in popularity, but is it really the financial freedom strategy people think it is? In this episode, Brian and Bo break down how Coast FIRE works, who it benefits, and the biggest retirement planning risks many people overlook. You'll learn how investment growth, compound interest, inflation, savings rates, and future lifestyle changes all affect whether you can truly stop saving for retirement early. Using real-world examples and practical retirement planning scenarios, we explain why reducing your savings rate may be smarter than quitting altogether—and how to avoid one of the biggest mistakes future retirees make: coasting too soon. 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.

• 0:00Speaker 00

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• 0:31Speaker 01

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• 1:06Brian Preston?

  Quit saving money? Everything you need to know about coast fire.

• 1:10Speaker 03

  Brent, I am so excited to talk about this because oftentimes, there are good things that come out of movements. And there are good and exciting things that are worth talking about and worth taking advantage of. But sometimes, I think there can possibly be too much of a good thing, or maybe even a misunderstanding of how that good thing should be rightly applied.

• 1:33Brian Preston?

  Well, look, the fire movement. Financial independence, retire early. We've always, you know, people call us the fire extinguisher because that whole retire early is a little unique. I always say people always go to the next endeavor.

• 1:45Speaker 03

  The fine movement.

• 1:46Brian Preston?

  You know, it's that fine movement. But it is one of those things, one that seems to really be kind of in the conversations if you dabble in the world of, the wonderful world of personal finance, is coast fire.

• 1:57Speaker 03

  That's right.

• 1:58Brian Preston?

  And I kind of can get this is because, you know, this is one of those things where I can kind of save heavily and then I can see light at the end of the tunnel and take my foot off the accelerator. How does this work?

• 2:09Speaker 03

  Yeah, I think if you You're looking for the Webster's definition of what coast fire is. We didn't actually pull it, but this is what it is. It's when your current investments are projected at the level they are at today to grow to 25 times your annual expenses by a traditional retirement age without you contributing any additional money. It's the idea that I'm going to save, save, save, save, save, build, build, build, build, build. And once I hit a number, that number will allow me to coast to true financial independence. So I can front-end load all of my savings. I can then not use my dollars, let my army of dollar bills grow, and ultimately, that army of dollar bills will be able to pay for my living expenses at some point in the future.

• 2:45Brian Preston?

  Now, look, we've, we've gotten some exposure to this. We even covered this on one of our Making a Millionaire episodes. We had a great guest, Danielle was on, and her goal was to get to $4 million. She felt like she had saved enough money, and now she was going to take her savings rate down to 8%. Meanwhile, in the past, she had done 30, 40%. But when we did the analysis on this, we were like, whoa, hang on, put the brakes on, because I think in your assumptions, you might be pulling back a little too early.

• 3:17Speaker 03

  Yeah, so what we put together was, hey, by tweaking your assumptions, by making some adjustments, we were able to put together a plan that had her saving a little more diligently until age 40. She was trying to stop, frankly, too soon in her journey, to where she wasn't actually going to be able to coast to where she wanted. But by saving diligently till 40, we put it together, and then at 40, she was actually going to be able to drop her savings rate even lower than she thought, down to 5%. It's all about the variables that go into the calculation, and you want to make sure you get those variables right, because if you don't get them right, man, you can end up in a real pickle.

• 3:50Brian Preston?

  Well, let's take it beyond just a Making a Millionaire guest. Bo, we've done a case study on what does coast fire Carly look like. Walk us through this.

• 3:58Speaker 03

  Yeah, so let's assume that we have coast fire Carly, and she starts working in her first job at 25 years old, and she's going to aggressively save for the next decade. So from 25 to 35, she's going to do everything in her power, super high savings rates, to build her assets all the way to $500,000 by the time that she gets to 35.

• 4:19Speaker 03

  Well, she then wants to participate in Coast Fire, which means she's built up to half a million dollars. She's not gonna save anymore. She's not gonna add anymore to the pot. She's just gonna let that $500,000 grow from age 35 out until age 65. Well, if she does that, and we assume that she has an 8% rate of return on average, just the $500,000 that she was able to build in her first 10 years of working, has the ability to turn into almost five and a half million dollars by traditional retirement. She did a lot of hard work in the first decade, and then for the next three decades, she let her money do a whole lot of the hard work.

• 4:58Brian Preston?

  Now, a lot of you are gonna look at that five and a half million dollars and be like, "Holy cow, that's a lot of money." And it is. I mean, it's the future equivalency, I'm gonna bring this back to today's dollars, but it's just under $220,000 a year. So when I hear that, I'm like, "Oh, that's loaded."

• 5:15Speaker 03

  That's a lot of money.

• 5:16Brian Preston?

  That's making a lot. But now, we have to bring it back. And this is the problem with sometimes looking so far out in the future. It really messes with your orientation on what money is, because you see five and a half million dollars, you see $220,000 of living expenses. You're like, "What could go wrong?" Well, the problem is, you bring it back to today's dollars, it's still a healthy sum of money. It's $90,000.

• 5:37Speaker 03

  That's right.

• 5:38Brian Preston?

  But it is a lot different than what I think a lot of us, when we see five and a half million dollars projected, that is not the same as five and a half million dollars today. And that's why it's probably a good time for us to kind of hit pause and say, "Hey, let's hit the pause button on Coast Fire and explain, why is this so popular? What are the benefits? What's in the brochure, which is actually really good? But also, what are some flaws or things you at least need to be mindful of so you don't fall in a trap?"

• 6:06Speaker 03

  Well, so, okay, why is it so popular? I think that people generally, they love the idea of taking their foot off the gas. We, as humans, we don't often like lots of discomfort, but we're willing to put up with some discomfort for a short amount of time if we can. And so, people say, "Okay, I'm gonna save really diligently. I'm gonna do this really, really hard thing for a short period of time." And then, once that period of time is passed, then- Then I'm gonna ease off, then I'm gonna take my foot off the gas and it'll be a much more enjoyable.

• 6:33Brian Preston?

  Well, I do like, look, we talk about money is only a tool and I think a lot of people think when they get to a million dollars or two million dollars or three million dollars, their life is just gonna get easier. And I do like how Coast Fire is making these people think about work-life balance. How can I actually take more control, more enjoyment in spending in the present? After I've done this period of being super disciplined? That is a positive and I do like that part of it. There's also comfort in knowing that your retirement is already well-funded. If you're way ahead of the curve, you know, your army of dollar bills is doing a lot of the heavy lift. That's also very noble because you're way ahead of the schedule on things and it's nice having your money because you use discipline the right way.

• 7:18Speaker 03

  And if you do this correctly, if you follow Coast Fire, you're gonna be able to actually increase your standard of living much earlier. You're gonna have to have this super high savings rate very early on, but earlier than retirement, you can drop your savings rate and you get to actually enjoy more of the present. So, a lot of folks like that idea. I don't have to wait until my sixties or seventies to actually live the life I want to live. I can start doing that in my thirties and forties if I don't have to have such a burden to continue saving and continue adding dollars to my pot of money.

• 7:45Brian Preston?

  Well, that's why I get to potential flaws. I mean, this is the thing, reality is, it's not bad in concept. It's what happened is, is that life just has a cruel sense of humor. It's because when you think you have everything figured out, it's typically when you get punched in the jaw on a Tuesday afternoon with something in life, and it doesn't always have to be bad stuff. It could be good stuff, family planning and other things, you know, oopsies in that way. It's just, sometimes life has other thoughts and you have a tendency that if you're not careful, you might take your foot off the accelerator of savings a little too soon.

• 8:21Speaker 03

  That's exactly what we saw with Danielle. She wanted to stop saving in her mid-thirties and unfortunately, that just wasn't going to get the job done. Because in reality, if you are a Coast Fire participant and you think about your lifeline or your life cycle, it's a very long two-stage time horizon. Time horizon from where you start coasting to true financial independence and then true financial independence all the way to the end of your life. And there are a lot of things that can change. There are a lot of variables that can affect the probability of success in the plan that you've laid out. And the earlier you try to do this, the more variables enter the equation and the more small deviations those variables can have huge impacts to your plan.

• 9:03Brian Preston?

  Look, and this is the thing, we get a bad rap because there's a reason, just like financial planners on everything else, we say it depends. We just try to make sure everybody knows the variables. And that's why this is definitely a measure twice, cut once, because for a lot of you high earning individuals, once you cross that threshold of leaving a well-paid job or career, it's hard to fire that back up three to five years in the future if you've misjudged this. So let's go ahead and make sure you stick the landing. These are the variables that you probably should plan for.

• 9:34Speaker 03

  Or the variables that could cause the plan to blow up if you don't think about them. Because what happens if your expenses end up higher than you thought? For Coastfire Carly, what we've planned out is that at the end of her coasting period, when she hits true financial independence, she's banking on a portfolio that can provide about $90,000 of living expenses in today's dollars. Well, if her actual expenses are $110,000, $120,000 at that time in the future, 30 years from now, then she's going to have a problem.

• 10:03Brian Preston?

  Well, I mentioned this, I kind of foreshadowed it. Life circumstances, you should go ahead and start planning for. This is, why do you think I tell everybody to put on their 3D glasses? You can kind of go where you think the ball will be on your financial life. Think about, you know, if you're not married when you're planning on this, go ahead and build that into the plan. If you, how about family planning with kids and so forth? Go ahead and put whether it's going to be two kids, three kids, or no kids, have a plan for all of the above so that you're just not caught, you know, flat footed on this. And then also think about, you know, if you have to move to a different part of the country, what that might also require of you. Because that's the thing I've seen when I've seen people who have left early, it's the family planning, it's all of a sudden private school or

• 10:49Brian Preston?

  Daycare, you know, like holy cow, these things, these things are a lot more expensive than I anticipated. That's what we just want to make sure that you are when we say, measure twice, cut once, you're taking all this into account.

• 11:00Speaker 03

  And then even in terms of how you do your projections, what happens if the rate of return you actually end up achieving is lower than what you expected? I mean, I think for Coesfar Carly, we were relatively conservative with an eight percent rate of return. But what if she would have done her projections off a 10% rate of return and she only achieved an eight percent? That creates a problem. Or what if your assumptions around something like inflation are different? We, for Carly, projected back, okay, what if it's the annual inflation assumption of three percent over the next 30 years? Do you recognize that even just a small change can have a very significant impact? For her, with a portfolio of five and a half million dollars, if we assume a four percent withdrawal rate,

• 11:43Speaker 03

  we said that that would generate about $90,000 of living expenses in today's dollars at a three percent inflation rate. If what she actually recognized over her coasting period, though, were a four percent inflation rate, that $90,000 of spending would actually only have the same purchasing power today of about $67,000 in spending. That is a 25% reduction in purchasing power because of nothing that she did, nothing that was inside of her control, but an external factor that impacted her plan.

• 12:13Brian Preston?

  So now that we've given you the kind of the, the things to think about, the variables, I'd like to kind of pivot your mindset, this doesn't have to be an all or nothing. Just, you know, look, if you decide you want to be part of this movement, there's nothing wrong with you still getting your employer's match. There's nothing wrong with you still getting, going out there and maxing out your Roth IRA if you're under those income thresholds. You're, nobody ever regrets having more Roth dollars because these things have incredible legacy building from an estate planning and so forth. So I, I always remind people, there is a, it's not all or nothing. There is some nice middle ground, even if you want to be part of this movement.

• 12:54Speaker 03

  And if you are going to do this, I hope what you've discerned from this is, That it makes sense to measure two, three, four times and then re-measure and then re-measure and then check your progress and check your progress. Now, even if you work coast far carly and you began to do this and you got into the first couple of years of coasting and you recognized, oh, man, inflation is higher than I thought, or man, I got married, or I had a kid, it's always okay to go back and revisit the plan and say, okay, I thought I was going to coast, maybe now I need to start saving, maybe now I need to start adjusting, because if you can adjust the plan as you go, it doesn't have to be 100% right at the very beginning, but the more accurate you can be in the beginning, the easier the path,

• 13:37Speaker 03

  the easier the journey will be. We are not fire extinguishers. We just recognize that fire can be dangerous, and if it's not handled correctly, you can burn yourself. But if you use it correctly, it can be an unbelievably powerful tool that you have at your disposal.

• 13:52Brian Preston?

  Yeah, my biggest thing is I do love the fact of people owning their time that much sooner, because that's the part, the why. If you know that when you wake up in the morning, you're doing what you're meant to do, not only are you going to be happier, you're going to feel more fulfilled with how you're using this powerful tool of money, and that's the biggest part. We want to empower everybody out there, and that's why I love that we get to do these live shows where we get to answer questions. It's always, it's a mystery of how, what the, every show has a different personality. So I'm curious to see what things take shape today.

• 14:28Speaker 03

  Yeah, I love that every single Tuesday at 10 a.m. we show up right here to answer your questions. We have the team out in the wings collecting them. So if you have a question, something you want us to weigh in on, something you want to get our take on, make sure that you get it in the chat right now, because we do believe that there's a better way to do money, and we want to help you do money better. So with that, Creative Director Rebi, I'm going to throw it over to you.

• 14:51Speaker 04

  Yes, I've got some questions queued up from the live YouTube chat happening right now. We'll also be doing a rapid fire segment later in the show, but these questions are going to be pulled directly from the Moneyverse, which is our free Discord server. You can go join right now at moneyguy.com/moneyverse. If you want to submit for rapid fire or just see what people are submitting, you can go do that right now while you watch. But while we get the rapid fire stuff in the hopper, I'm going to start with some of our questions straight from YouTube. Are you ready?

• 15:21Speaker 03

  Yes, ma'am.

• 15:22Speaker 04

  First one's from Tumblrbait. It says,

• 15:26Speaker 04

  I just, I just read the usernames. Hi, Money Guy team. My wife, 33, and I, 38, have reached our coast fire number.

• 15:34Speaker 03

  Oh, let's go.

• 15:35Speaker 04

  We are trying to decide how rich we want to be later versus spending now. What's the difference between 2 and 4 million at 65? How about 4 and 8? These are some pretty different numbers, but I think it's an interesting question. How would you answer it?

• 15:51Speaker 03

  You gotta, you gotta run the numbers because I think it's so interesting. Even as we were talking, Brian, in the live chat, people said, oh, wow, it's incredible. $5 million sounds like so much money. And it is. $5 million is a lot of money. But $5 million, 40 years in the future, would be the equivalent of, at a 4% withdrawal rate, of $90,000 today. Inflation and the time value of money is a very real thing. And so the question you asked, well, how different, what's the difference between 2 million and 4 million dollars? I'm going to argue that difference is going to be much smaller in the future than it is today. So you want to make sure you think, you think through it correctly.

• 16:31Brian Preston?

  That's why I, I like thinking about retirement in terms of consumption or living expenses. How much, what's your burn rate? Figure out what that number is. And then now I want you to stack on, if you were, you know, doing all the things that give you the best version of your life. So if you're a golfer, if you're a traveler, whatever your hobbies, go ahead and bolt that on to, in today's dollars, what that retirement will look like. Now we can project that on out, add an inflation factor of it, 3% to 4%, whatever you feel comfortable. You'll quickly see, you'll, you'll start to put, you know, meat on the bones of what your, your planning should look like. And you'll quickly see there's a big difference, 2 and 4 million, 4 and 8 million.

• 17:15Brian Preston?

  Those are going to have significantly different, you know, withdrawal numbers on them. But you also have to inflation adjust it because. With your naked eyes, it just, $2 million sounds like plenty, but if you're thinking you're not going to save another dime, that that $2 million goal might not be enough to get it all done.

• 17:34Speaker 03

  Yeah, and I just think this is an interesting thing from our experience. Now, there are stories, and it is a reality, there are people that get to the end of their life, and they have a lot of money left over, and they recognize, man, I kinda, I kinda didn't take advantage of the things I should have taken advantage of. Those are the financial misers. But let me tell you what we have never had. And I want to be careful using an absolute like never, but I think this is true, so check me on this, fact check me on this. We have never had someone get to financial independence, or get to retirement and say, guys, I've just got too much money. I've just saved too much money. I feel too comfortable in my retirement. I feel too at ease, too at peace with the dollars I've saved. I think that most people say, oh, wow, I am not nearly as worried in retirement

• 18:20Speaker 03

  with my financial circumstances as I thought I was going to be. Or, man, I thought it was going to be a lot more difficult for my dollars to grow, even after I left the workforce than they are. Those are realities, but I think Tumblr bait, I would not be so concerned. Okay, we got this coast number, we're gonna hit this. Oh, man, if I have $8 million when I start retirement, versus having $3 million when I start retirement, am I gonna be upset about that? I don't think so. I think what you're gonna recognize is it's gonna give you more options, more flexibility, more choices that you get to make earlier on in life, than you would get to make otherwise. Now, don't mishear me saying that you ought to not spend anything, not enjoy anything, and wait until you're 95 to start using your money. That's not the case at all. But there's nothing wrong with going into financial independence,

• 19:05Speaker 03

  going into retirement with a little bit more of a frothy, your word, balance than you think you need, to give you a little bit of extra comfort, a little bit of extra cushion. Because there is a psychological thing that's gonna happen. When you're no longer working with your back, and your hands, and your brain, and instead, you're now having to let your dollars work for you, the more dollars that you have working for you, the more cushion and slack you have in the system. In our experience, the more peaceful and comfortable Retirement and financial independence.

• 19:34Brian Preston?

  I mean, Tumblr bait didn't give us, he gave us ages 33 and 38. Probably a lot of the family planning is done at those, at those stages. I would just make sure that you are building in, because usually all the fire movement people, including Coast Fire, save at such higher savings rates, well beyond even 25%. That I make sure that you're, you're building enough in for today. I mean, I think there is a balance. Remember, and I covered this at the beginning of the show, it's not an all or nothing. I think that's the problem is that we all go to these extremes. And that's where there's usually some nice common ground that lets you make great memories with your family, but still let you get the free money from your employer, max out your

• 20:15Brian Preston?

  Roth IRA and have this healthy life and the best version of your life where you have no regrets in the future.

• 20:21Speaker 03

  Love that.

• 20:22Speaker 04

  Tumblr bait, thank you for the question. It is your lucky day because your Tumblr bait worked. You get a Money Guy Tumblr. Just email [email protected] since we answered your question on the show.

• 20:32Brian Preston?

  It just transformed.

• 20:34Speaker 03

  I got it, I got two things. Can I say two things before we do our next question? Number one, I was just informed that the money verse hates the word frothy. That's, that's what I saw that that's a thing.

• 20:44Speaker 04

  That has been so.

• 20:45Brian Preston?

  Let it be noted, Beau said it today, not me.

• 20:47Speaker 03

  I did, I thought it was a thing. I guess it's not a thing. I'm late to that one. If you wouldn't mind in the chat right now, give us some synonyms for the word frothy so that we can use other language that's more appropriate.

• 20:57Brian Preston?

  Well lathered?

• 20:59Speaker 03

  Ooh.

• 21:00Brian Preston?

  No? Okay.

• 21:01Speaker 03

  I don't like that at all. And then someone said, hey, I love.

• 21:05Speaker 04

  Good brainstorming, good brainstorming. We'll keep, we'll keep workshopping.

• 21:08Speaker 03

  We'll put that one on. That's, hey, no bad ideas here. Someone said, hey, I love the butterfly mug. Brian, you happen to have a new mug right here. Anything you want to tell us?

• 21:17Brian Preston?

  Well, I don't know if y'all heard, Dolly's got a new truck stop. And I came, now look, I have not been to it yet, but I have a dear friend here in the office that who went, I think she might've gone on opening day. And she came back with all kinds of merch. And then I, because I was so excited, I've watched at least two YouTube videos on Dolly's new, it's essentially like Dolly's versions of Bucky's.

• 21:39Speaker 03

  But you're watching YouTube videos on this?

• 21:40Brian Preston?

  Oh, I came, I already. Had half the family, the only one, shout out to my wife, she threw the cold water on it. I was like, you realize I pulled it up on map. I mean, I didn't do it on map. I'm an old school guy. I pulled it up on Waze and it was only gonna be like a 40 minute drive from the house to get the Dolly's truck stop. And I was like, you realize we could go eat. They have chicken and dumplings on the, on the menu and.

• 22:04Speaker 03

  Hold on, chicken and dumplings at a gas station?

• 22:06Brian Preston?

  Oh, no, they have a bar. They have a, they have a restaurant. This thing is legit. So I'm, I'm kind of excited to go check it out. Um, I had, I had the girls all signed up to go. It was my wife that kind of threw the cold water and it'll probably, cause I bet it's loaded up. I probably need to let, let, let the dust settle and then we'll, we'll go try to do this in the next two weeks. But yeah, y'all know I'm a big Dolly fan. I'm always surprised, like, you know, if you look around the set, you'll see some little Easter eggs to, to show our love for, for, for Dolly, the, the smartest, just sweetest. And she changes, for those of you who do not, are now affiliated with Tennessee, Bo's kids, his daughters and, and son.

• 22:48Brian Preston?

  Everybody gets books. I mean, if you, if you have a baby in the state of Tennessee, you get books. I mean, this is what puts elevates um, our literacy probably from all the other states that, that when you're, when you're struggling with this. His sweet Dolly Parton has made sure that everybody feels some love on that. I think that, that should be celebrated. It's pretty incredible to be that generous and that's why Dolly is universal.

• 23:10Speaker 03

  Yep.

• 23:12Speaker 04

  That's right. Um, but I do like your mug. It says cup of ambition on the mug that he's using, by the way, which I think is.

• 23:18Speaker 03

  What about like?

• 23:19Brian Preston?

  I don't have fingernails, so I can't do the nine to five, you know, fingernail sound that she does.

• 23:23Speaker 03

  What if we did our next stop, like our next money guy, like little team meeting or like we had our next content meeting at, at the truck stop?

• 23:30Brian Preston?

  Well, the problem is Dolly doesn't need us to draw crowds.

• 23:34Speaker 03

  No, no, no, I meant just our team. No, no, I didn't know. I wasn't saying, this was not the money guy meetup. I was talking about our team just going there for a meeting. So I'll load up and.

• 23:45Brian Preston?

  They got biscuits, they got chicken and I mean, they got all the stuff.

• 23:49Speaker 03

  Biscuits, Caleb, they have toast there? Huh, interesting, interesting, funny.

• 23:55Speaker 04

  Just to note, if you're ever having breakfast with Brian and Bo, don't order toast. Just, just take my word for it. Just don't do it.

• 24:02Brian Preston?

  Look, we, we love everybody, but if you're in the South, especially eating at a restaurant known for Southern breakfast.

• 24:08Speaker 03

  You get the biscuit.

• 24:09Brian Preston?

  You get a cat head biscuit. You do not order toast. I mean, it makes, it does, it kind of makes me want to turn the table over when you order toast.

• 24:19Speaker 04

  What a tangent already, just on question number one.

• 24:22Brian Preston?

  I mean, that's, come on, there, there's no, if you're looking at, that's the equivalent of somebody choosing like a, and I don't want, I shouldn't do brands. A moderate hotel versus a luxury deluxe hotel.

• 24:36Brian Preston?

  Toast is, is moderate, biscuits, luxury.

• 24:40Speaker 03

  Wow. The three star versus five star.

• 24:43Speaker 04

  Okay.

• 24:45Speaker 04

  Let's move on to the next question, alright?

• 24:47Brian Preston?

  The whole Ohio is coming out in there. You see that? You see, look at, she's so uncomfortable.

• 24:52Speaker 04

  It's from Jason. Um, it says, hey, money guys, I'm 22 and just graduated college.

• 24:58Brian Preston?

  Nice.

• 24:59Speaker 04

  I have $120,000 of student loans at 6%.

• 25:03Speaker 03

  Oh, wow.

• 25:04Speaker 04

  Should I follow the foo while living at home with no expenses and invest and save as much as I can?

• 25:11Brian Preston?

  Yeah, okay, now this is.

• 25:13Speaker 03

  Jason, here's, here's, I want to know, um, what, what's your degree in? Like, what'd you go get your degree in?

• 25:19Speaker 04

  Great question.

• 25:20Speaker 03

  And what are you doing professionally now? Like, what is your, if you don't mind sharing, I'd love to know your income.

• 25:27Speaker 03

  Um, because the question is, should I follow the financial world of operations? I always think that following the financial world of operations is a great answer. If you don't have your own copy, go to moneyguy.com/resources and download your free copy. And one of the things that we do talk about in there is that there are two different segments for debt. There is step three, high interest debt. Brian, you show them the thing? And then there's step nine, low interest debt. And what you have to decide, and we actually talk about this. This throughout the course and Brian, you talk about the millionaire mission. How do you decide and what do you determine is high interest debt versus low interest debt? And specifically for young folks like you, where does student loan interest fall?

• 26:05Brian Preston?

  Well, look, I think, because Jason gave us the details here is the deets are is that this is at 6%. But the thing that kind of made us go, oof, was it's 120 grand.

• 26:15Speaker 03

  A lot.

• 26:15Brian Preston?

  So I'm hoping, because you know, if you're following anything in the Money Guy sphere, 120 grand of student loan debt, I'm hoping you're coming out of school making pretty big bucks. I mean, because that's a lot of debt. Now, you could do all the above, and let me tell you what I mean by this. You can follow the financial order, you're living at home, meaning your footprint of expenses is pretty much nothing. You know, it depends on if your parents are making you pitch in or not, but you could run the gamut on this thing with your student loan debt, get the, go ahead and build up, you know, assuming you don't have any, you know, credit card debt or anything, get you some emergency reserves, get the Roth IRA,

• 26:56Brian Preston?

  load up your employer's retirement plan, you're going to get to 25% savings rate so quick because you're living at home, that then every dollar above and beyond that, go start extinguishing the debt. I mean, because I wouldn't, you could do some incredible things in about a year, year and a half. Yes, it's not cool to live at home, but with a high income, but you really should get ahead of this $120,000. Because you just do not want that albatross just hanging around you for the next year. So it's just, go ahead and see if you can do all the above, and I think you can, living at home. You're one of the unique people because you have zero responsibility other than, hey, let's get out of debt, let's build our financial foundation, respect the financial order of operations,

• 27:40Brian Preston?

  and build your army of dollar bills while you're vanquishing the debt, you'll conquer the world.

• 27:45Speaker 00

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• 28:15Speaker 05

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• 28:45Speaker 04

  Conquer the world.

• 28:46Brian Preston?

  Well, it's a clarification, because 120 grand, I'm counting on some pretty big things.

• 28:51Speaker 03

  What was the, give me the screen name again?

• 28:54Speaker 04

  Jason Q.

• 28:55Speaker 03

  Jason, so I'm assuming this, this, there was the Jason Quinn that just said, I'm a, I'm a business major going into a sales rep position. I wonder if sales rep means like commission, you kind of got to go eat what you kill. Unclear. But I would do everything I can to get my shovel as big as possible, as early as possible, so that I can do exactly what Brian said and try to get this, get out from under, what was the word you said, albatross? Get out from under this albatross of debt.

• 29:22Speaker 04

  Albatross.

• 29:23Brian Preston?

  Am I using the right word?

• 29:24Speaker 03

  I don't, I don't.

• 29:25Brian Preston?

  I mean, if you saw my SAT scores, you'd be like, he shouldn't use words like that.

• 29:30Speaker 03

  Raby, you can go ahead and do the same.

• 29:31Brian Preston?

  Really good at math.

• 29:34Speaker 04

  Okay, Jason Q, looks like...

• 29:37Speaker 03

  Well, it's a large web-footed oceanic bird famous for its massive wings.

• 29:40Speaker 04

  I thought you were talking about Jason.

• 29:42Brian Preston?

  I'm close. I'm once again playing horse shoes with the English language.

• 29:46Speaker 04

  It's a bird, yes.

• 29:47Speaker 03

  Metaphorically, it refers to a psychological, physical, or social burden that feels like a heavy curse or inescapable handicap.

• 29:53Brian Preston?

  Hey, there we go.

• 29:54Speaker 03

  Crushed it. Assuming you didn't mean the giant bird, you nailed it.

• 29:57Speaker 04

  I thought you meant the giant bird, I won't lie. But Jason Q, thank you for the question. You can email [email protected] and cash in on your Tumblr.

• 30:08Speaker 04

  Next question's from Joey. It says, "Hi Money Guy team, we are 31 and 36 and are hoping for retirement in 13 to 15 years."

• 30:16Speaker 03

  Whoa, hold on, 31 plus 13, mid 40s is what we're looking at.

• 30:21Speaker 04

  Yeah, some early retirement going on. However, 99% of our retirement is in a 401K. We don't have Roth because we make too much. 270K, married, filing jointly. How do we access money?

• 30:35Brian Preston?

  It's almost like the Financial Order of Operations, if there was a step, step number seven, where it talks about hyperaccumulation. What happens when you're just going through the process of letting your 25% be tax incentivized only? And that's what Roth does, that's what your retirement plan does. It's step seven where we actually say, "Hey, take a break and say, how am I going to use this money? When am I going to use this money?" And for yourself, since you're going to be trying to access this money in your mid to late 40s to early 50s, you're going to need a bridge account. And the easiest answer to that is probably start building some after-tax brokerage assets.

• 31:17Brian Preston?

  I'm assuming if y'all make beyond $270,000 as a couple, y'all can save a healthy account beyond the 25% or even a portion of the 25% if you're beyond getting free money from your employer and so forth. Let's start building off that after-tax account so that when you get to mid 40s to 50s, you have a very large account that's going to give you lots of liquidity, still lots of opportunity to grow the army of dollar bills, but it's just easier to, you don't have, you know, distribution limits, early withdrawal penalties, or any of that stuff.

• 31:52Speaker 03

  I love that. I'm going to give a slightly different, yes, I agree with Brian's answer 100%. I'm going to give just a slightly different answer because it's another side of the equation. Can I tease a thing that we just did, Rebi? Is that okay? Can I talk about a thing that we just recorded and just did?

• 32:05Brian Preston?

  I'm curious which one, because we have a few.

• 32:07Speaker 04

  I know, I guess so. Now I want to know what you're thinking of.

• 32:09Speaker 03

  So we just had a collaboration that was super, super fun this past week, right?

• 32:11Speaker 04

  This is a good one, actually.

• 32:12Brian Preston?

  You're talking about Carl and Mindy?

• 32:13Speaker 03

  Yeah, Carl and Mindy. We had Mindy from BiggerPocketsMoney.

• 32:15Speaker 04

  From BiggerPocketsMoney.

• 32:16Speaker 03

  And it was Just so fun. Great. Uh, we got to do a deep dive on their financial situation. And one of the things we uncovered was like this access to capital conversation that they were having. A lot of folks find themselves in the position when they save diligently for a lifetime, for a career, they have tons of pre-tax assets, tons of assets they can't get to. So one of the things I would encourage you guys to think about, first, you said, we don't have any Roth assets because we make too much money. Yeah, once you're over, whatever the income limit is at 270, you're over that limit to do that. I'd be curious if you could do backdoor Roth contributions, right?

• 32:47Brian Preston?

  Make sure you have the right account structure.

• 32:49Speaker 03

  If you have, if you don't have any IRAs and it's everything's in 401K, you could potentially do backdoor. So even building up Roth basis over the next 13 to 15 years and letting that dollars grow tax-free would likely give you some sort of flexibility if you had to do it for earlier retirement, even though it's, it's not our favorite. But you said that one of you is 36, so I'm just thinking through the math, 36 plus 15 years, it's 51. Depending on how your 401Ks are structured. If you could eke it out, or maybe go to part-time or whatever, and you could get to age 55, and the year that you turn 55, so long as you're still employed with the company that sponsors your 401K, you can access your 401K dollars starting at 55 without having to pay the 10% penalty.

• 33:32Speaker 03

  So you are really close, you're within side four years, maybe if it was a part-time thing or something like that, that you could potentially do that. But assuming that's not the case, we did a great show, I think it was a great show, and the title of that show was Four Ways, Three Ways, Four Ways to Retire Early That You May Not Know About. Is that the name? The, the team will put the name in the chat. And we walked through a couple of different.

• 33:55Brian Preston?

  They're all rolling their eyes going, which show was that?

• 33:58Speaker 03

  So what, we talked about how you can do Roth conversion ladders, talked about how you can access Roth basis, how you can build taxable brokerage accounts, and we talked about 72T distributions. Because one of the things that may potentially be interesting, may potentially be compelling to bridge that gap, if you are going to truly retire at 51 and have no income, no access, you could do what's called a 72T distribution to get you from 51 to 59 and a half. Now, I think Brian's method of building up a taxable asset and by the bridge makes the most sense. It's the one that makes the high, has the highest probability of success, the most flexibility. But there are methods and mechanisms by which you could still retire early and get to. Name of that show was Three Ways to Retire Early That You Might Not Know About.

• 34:43Speaker 03

  I was so close to it.

• 34:45Speaker 04

  You were very close.

• 34:46Speaker 03

  So I would encourage you, if you've not checked that out.

• 34:49Brian Preston?

  I can't see Justin's face, but I can see Will's face and Will was like, I don't know what he's talking about. But Justin was able to pull it out of the dirt.

• 34:55Speaker 04

  I was like, I think we've done a show like that, but I was, I just wasn't sure.

• 34:59Speaker 03

  No, I know we have. Still a trap up here, guys.

• 35:01Speaker 04

  But you got it.

• 35:02Speaker 03

  You remember that show because we're going through all the things.

• 35:03Speaker 04

  You got it. All right. We're going to do one more question and then we're going to get to our rapid fire money verse style. And also Joey E, if you would like a Tumblr, thank you for your question. Just email [email protected] to cash in on that.

• 35:17Speaker 04

  Next question is from debiter debit or credit CPA.

• 35:23Brian Preston?

  Nerd.

• 35:27Speaker 04

  Oh, I want to give some like retort back to that so bad, but I'm not going to. How did you personally overcome the guilt of upgrading your lifestyle once you hit financial escape velocity? At what point did you realize delaying gratification was turning into depriving yourselves?

• 35:46Speaker 03

  You want to answer this first or me answer this first?

• 35:47Brian Preston?

  I mean, look, I think that it's all about the balance of your life in the, in the, because earlier in my career, I was, you know, Bo has always been generous from, from Jump Street. You know, he graduates college and he's throwing out beyond 10% to charities and other things. It took a little, the financial mutant in me was like, well, I'll just do this later. And, and, and I don't think, looking back on it, that's not the right path. I was, you know, hanging out with Bo, I started becoming more generous. So I never had guilt about the success because I felt like the more successful I was, because I was doing a very healthy beyond 10% generosity of giving.

• 36:31Brian Preston?

  We were growing this thing together where it was not only was. My assets growing and my income growing, but also the organizations I could help and the charities and so forth that meant a lot to me. It was more of the why of with family and realizing the scarcity of time with people you really care about that and things you could do to make sure you're maximizing the memory making that made me say, hey, instead of us doing this as small as possible, let's make this really enjoyable. So because I don't want to shower my kids in gifts to where they're entitled. I want to shower them with memories to where they're more knowledgeable about life and

• 37:16Brian Preston?

  how great it is to have a loving family and how you can use this tool of money to do really a lot of positive stuff. Those are the intersection points that I kind of had.

• 37:26Speaker 03

  Yeah, I would say that how did I personally overcome the guilt of lifestyle expanding? One of the things I did is in the financial order of operations allows you this, once you get to a 25% savings rate, it should free you from thinking, oh, man, is it okay if I buy the nicer car? Is it okay if I go on the nicer vacation? Is it okay if I do the home renovation or do the improvement? Because if you know that you're paying yourself first and you have your dollars automatically going in the places they're supposed to be going, it should be a freeing thing to let you recognize, okay, it's okay to do this. It's okay for me to spend. It's okay for me to let loose. It's okay for me to let my lifestyle increase so long as my lifestyle increasing does not crowd out me actually saving and building for the future.

• 38:11Speaker 03

  That's kind of the first part. That's how I escaped the guilt of it. And then when did I recognize that delayed gratification was depriving me of memories? For me, this is me personally, it was with my kids. It was me and my wife having this conversation, like, okay, yeah, we're saving and we're building and things are going good. But we wanted to do this thing and this thing might be very, very expensive. And we look at the cost of this thing. We go put it in the wealth multiplier and say, man, at our age, spending that much money on that thing is a substantial sum of money later in life. Like, if you just think about it. But our kids are only going to be young once, they're going to be in the house once, and we want them to be here building memories, want this to be the childhood to take away.

• 38:51Speaker 03

  And even if we do this thing, while there is an opportunity cost of those dollars not being there in the future, it's not going to inhibit us from doing our other financial things of reaching our other financial goals. And so it was okay. I recognize that money is nothing more than a tool that allows me to do the things that I want to do and accomplish the things that I want to accomplish, both in the future as well as now, in terms of what I'm able to do with my kids and the experiences and the memories we're able to build and create. And so I think if you can have that balance, it's not about all deferred gratification. We say deferred gratification is a wonderful thing, it's something you should exercise, it's something you should likely always exercise, but not complete and total absolute deferred gratification. Because if it's complete, total, and absolute

• 39:36Speaker 03

  deferred gratification, tomorrow is not promised, and you will not get back the moments that you are missing today, especially if you have young children in the house. So you've got to figure out how you balance both of those things, and don't let the financial achievement, goal, drive, whatever, crowd out your ability. If you've reached escape velocity to expand lifestyle, or if you've not reached escape velocity, to figure out how to bedazzle your basic life today to create those memories.

• 40:06Brian Preston?

  Also, look, I've had a few fellow creators who've reached out to me about housing purchases and other things, and I always, I always bring it back to a grounding of what are the things that create fulfillment and happiness? When you do all the research, it's, it's relationships. It's the, it's your family, it's your friends, it's who you're hanging out with and making memories. Think about for your kids, too, because I often wonder, you know, if you go too far up on the food chain on housing, I think that's why when we do our millionaire study of our clients, you're surprised. Yes, we have a few clients that have $10 million plus homes, but most of them don't. Is when I think you start thinking about, hey, I want to live in a neighborhood where my kids can go meet the

• 40:47Brian Preston?

  other neighbor kids and play with, that probably is not going to be the, you get too far up on the thing, you price yourself out of family, neighborhoods with lots of families in it. It's also, I vacation with my neighbors. I hang out on the weekends with a lot of my neighbors. And I was like, but my biggest pet peeve with my house is that I live in the valley of country music stars, is they all live on hundreds of acres. And then I'm down in this little valley on my, you know, 0.4 acres. So I mean, I can see my neighbors around me, which is a blessing and a curse when you want privacy. But so I will, you know, I've entertained going for bigger land. But then I think about, man, but then when you buy bigger land, because I asked my,

• 41:30Brian Preston?

  my builder, who I got to be friends when we were building our house, when he approached me about buying into another neighborhood he was doing, that had three to five acre lots. I asked the superintendent who I was friends with, I was like, so are any of these neighbors talking to each other? Or are they just all kind of living in their, their big mega life? And he was like, no, none of them talk to you. And I was like, well, see, that's sometimes going too far up. I think you might crowd out the things that actually bring you the happiness and fulfillment. Yeah. So you don't have to, just because you can, doesn't mean you, you have to.

• 42:01Speaker 03

  So what you were saying is if you increase your lifestyle too much, you can price yourself out of enjoying life, the way that you actually want to be able to enjoy life.

• 42:11Brian Preston?

  Yeah. And also toys, we got more toys. I mean, when we, like, we were just talking to somebody, like, if you're, if your hobby is, is private, being a private pilot, how often do we see private pilots start off with a Cessna, go to a Cirrus next, but then when they start going up into the other planes, all of a sudden this thing gets more and more expensive, your cost per hour to operate, you can price yourself out. You can do the exact same thing on all the things that create happiness in your life, too. So just be mindful of that stuff. Nothing wrong with enjoying what you've created, but just understand the why and how it intersects with the things that bring you purpose and happiness.

• 42:48Speaker 03

  Love that.

• 42:50Speaker 04

  I love that too. And now it is time to give debit or credit CPA a Money Guy Tumblr. Just email [email protected] and we will love to send you one.

• 43:00Speaker 03

  Hey, can I apologize? I just had a visceral reaction and I said nerd and I didn't even mean to like, I didn't even, because I don't, I don't think CPAs are nerds. I have a lot of friends. One of my best friends is a CPA.

• 43:11Speaker 04

  One of his very best friends.

• 43:12Brian Preston?

  You think anybody who's in this audience, we're all nerds?

• 43:15Speaker 03

  Okay.

• 43:16Speaker 04

  Well, that's why I was like.

• 43:17Brian Preston?

  I don't even, I don't even look at that as, I don't even look at that as a derogatory thing. Nerds take over the world.

• 43:24Speaker 03

  I just like.

• 43:24Brian Preston?

  I'm a nerd. I'm a, I'm a proud nerd.

• 43:26Speaker 04

  Yeah.

• 43:26Speaker 03

  Okay. All right. Well, hey.

• 43:28Brian Preston?

  I'm not good at English, but I'm very good at math and nerdy stuff. So I kind of, I, I, I love the crowd of being, the moniker of being a nerd.

• 43:34Speaker 03

  Debit or credit in your screen name? That's a bold choice. That's, that is basically the CPA life.

• 43:40Brian Preston?

  You thought you were taking a shot at me because of CPA.

• 43:42Speaker 03

  Honestly, I did. As soon as it was like, it was, it hit, you called a stray that was really directed at him. That's on me.

• 43:49Speaker 04

  You guys are funny. All right. It is time for our rapid fire segment. Remember this is our, it does not depend rapid fire segment where Brian and Bo get 30 seconds combined to answer your questions and they cannot say the words, it depends.

• 44:02Speaker 03

  That's 15.

• 44:03Speaker 04

  Now, we will say, uh, we'll have a segment at the end, the maybe it does depend segment where if you really need to say something you didn't get to say in the 15, 30 seconds.

• 44:13Brian Preston?

  Well, the Southern draw, that's probably only about eight, eight words.

• 44:16Speaker 04

  And also shout out again to the Moneyverse. All of these rapid fire questions are coming from our Moneyverse Discord server and all of the great financial mutants in there. So thank you for submitting. Are we ready?

• 44:27Speaker 03

  Yes, ma'am.

• 44:27Speaker 04

  Okay. Question number one, 30 seconds on the clock.

• 44:31Brian Preston?

  You can go first. Okay.

• 44:32Speaker 04

  Age 34, step nine of the foo, with a 1.5 million investable portfolio spread evenly across three buckets. Is 100% target date index funds still adequate?

• 44:45Speaker 03

  I would argue that you're at the point where you've likely graduated past the generic portfolio solution. Target dates are great generic solutions for the general public. You now, at this level of wealth, likely need a specialized solution built to your unique circumstances, time horizon, risk tolerance and goals.

• 45:00Brian Preston?

  Yeah. Cause you're going to want to be more tax advant, you don't want to look at the tax advantages. You want to look at how you're going to access the accounts. It's really more of a step seven operation. So I think you're beyond index target retirement funds.

• 45:13Speaker 04

  Question two.

• 45:14Speaker 03

  But Bo, how do I do that? Well, you go to moneyguy.com slash become a client. We will leave the porch light on for you.

• 45:19Brian Preston?

  So are we now going to see the questions? I guess y'all can't, y'all don't have the ability to put the questions for us.

• 45:24Speaker 03

  You got an active listen on the rapid fire. It really kicks it up a notch.

• 45:28Brian Preston?

  All right, all right.

• 45:29Speaker 04

  Next question. What are your thoughts on being generous towards friends in need? I'm worried that monetary help instead of educational help will lead to an awkward dynamic in the friendship.

• 45:42Speaker 03

  Your first.

• 45:42Brian Preston?

  Yeah, I, I, I, it can be awkward. Um, cause a lot, sometimes people, even though you're trying to be generous, will think you're just showing off. So you have to be, I would be very nervous about loading people up you care about.

• 45:55Speaker 03

  In my experience, one of the best ways, if you can do it, is to do it anonymously. If you really want to help them and it's less about, uh, less about you getting anything for it and more about actually helping someone in need. If you can find a way, okay, where's the bill due? Who's the person, whatever? And you can just satisfy that and not take credit for it. I think that's a great thing.

• 46:13Brian Preston?

  I probably won't, we'll, we can give more on that later.

• 46:17Speaker 04

  Next question. Where should I save for a down payment for a house?

• 46:22Speaker 03

  If you're buying the house in the next five years, I think high yield savings account, liquid cash is going to be your best bet. Make sure you hold it somewhere that can likely earn somewhere between three and a half to 4%. If you're not getting that, you're probably not getting enough on your cash.

• 46:36Brian Preston?

  Yeah, I mean, you, you can use money market, you know, mutual funds at the brokerage accounts like fidelity, Vanguard, or you can do the high yield savings accounts. Think, um, trying to think of which ones, stay away from Capital One, but we, which ones? But I have a story on that.

• 46:53Speaker 03

  Ally is good.

• 46:55Brian Preston?

  Ally is pretty good.

• 46:56Speaker 04

  All right. Uh, it's next question says, my wife and I, 27 years old, 230K income with an 800K net worth, are buying a new car.

• 47:07Speaker 03

  At 27, you say?

• 47:08Speaker 04

  Yep.

• 47:09Brian Preston?

  Give me those numbers again.

• 47:11Speaker 04

  27 years old, 230K income, 800K net worth.

• 47:15Brian Preston?

  Shoot.

• 47:17Speaker 04

  They're buying a new 35K car to have something reliable for their first baby on the way.

• 47:23Speaker 03

  Oh, congrats.

• 47:24Speaker 04

  Should we sell stocks in our brokerage account or take on a 5% loan?

• 47:31Brian Preston?

  Yeah, I think, I think you could with this big, assuming that 800,000 is liquid assets, I would look and harvest some losses and I would, I would go and pay cash for this vehicle. But use it in negotiation where you maybe finance for a little bit, but you paid off quickly.

• 47:46Speaker 03

  At a $230,000 income, I don't know what your living expenses are, but assuming there's margin in the system, I don't know how big your emergency fund is. Perhaps you could borrow from your emergency fund, not trigger any taxes and use that high income to rapidly pay back the emergency fund.

• 47:59Brian Preston?

  That's a better answer.

• 48:00Speaker 04

  And within the timeframe, well done. Next question, what are the three things you would bring to a deserted island?

• 48:10Speaker 03

  A cell phone to call for help.

• 48:15Speaker 04

  That's such a cop out answer.

• 48:16Speaker 03

  Some MREs so that I can survive. And then a boat to get off the deserted island.

• 48:23Brian Preston?

  Okay, I, I watch TV, so I know the answer is you need a fire starter, you need a tarp to keep you dry, and then you need a bow and arrow so you can hunt.

• 48:30Speaker 03

  Do you realize how much faster I'm getting off this island with my boat and cellphone than you are? Are you kidding me?

• 48:34Speaker 04

  It sounds like you're camping out on the island.

• 48:36Speaker 03

  I'm a roughie. I'm out of here, dude.

• 48:38Speaker 04

  Brian's like, I'm set up to stay. Oh, my goodness.

• 48:41Brian Preston?

  There's not gonna be any cellphone reception out there in the middle of nowhere.

• 48:44Speaker 04

  Well, at least he still has the boat and MRE.

• 48:46Brian Preston?

  He has a Starling phone.

• 48:47Speaker 03

  I have a boat and, and I said MREs because I couldn't think of a third one. But yeah, I have a boat.

• 48:55Speaker 04

  Good answers.

• 48:55Brian Preston?

  Nobody sets up a reality show with those. Nobody gives you, okay, it'd be the worst reality show.

• 49:00Speaker 03

  Episode one, I get off the island. You know what I mean?

• 49:04Speaker 03

  Hey, let me, you know what I'm not doing? I'm not swimming off that sucker.

• 49:07Speaker 04

  I was gonna say, you see people are saying that you need a life jacket. That should be number one.

• 49:11Brian Preston?

  Hey, well.

• 49:11Speaker 04

  That should be number one.

• 49:13Brian Preston?

  After we make it through rapid fire, you can ask me about swimming. I want to brag on the handsome family.

• 49:18Speaker 03

  Oh, okay. I have a feeling who's not getting bragged on.

• 49:21Speaker 04

  Let's finish rapid fire. Next one says, should anyone in their twenties hold bonds in their portfolio at all, assuming retirement in their fifties and sixties?

• 49:32Brian Preston?

  Only if it's in your index target retirement fund. I don't want you actively going out there and buying bonds in a mutual fund in your twenties typically unless there's unique, you know, and I want to say always because there might, you might be a unique person.

• 49:47Speaker 03

  I think that target retirement index funds will likely have some fixed income exposure, but if you're just starting out early on and you're just buying low cost index, low cost S and P 500, I think that's totally fine.

• 49:59Speaker 04

  Totally fine. Heard it here first. Next question says, Brian regrets missing an early Roth contribution. You wrote about that in your book and have talked about it on the show. Are there any life experiences or purchases you regret delaying because you were too disciplined?

• 50:18Speaker 03

  I won't say regret delaying, but there are some purchases I made that I was like, man, that was so good. A really, really nice coffee maker was a gift I got myself and my wife. We got our first house. Once we was like, holy cow, why didn't we do this earlier? A lot of the services we outsourced like lawn was one that I should have done that way earlier in life.

• 50:36Brian Preston?

  I don't have, I'm pretty happy with my life. I don't have a lot of regrets on.

• 50:40Speaker 03

  No, is it things you wish you would have done earlier?

• 50:44Brian Preston?

  I mean, by adjoining rooms or when you go on vacation?

• 50:48Speaker 03

  Another one?

• 50:48Speaker 04

  Yeah, that's it. We'll come back to it.

• 50:51Speaker 03

  Oh, man, I got, I got, I got a thing.

• 50:53Speaker 04

  Next question. So what counts for prepaying future expenses? I believe they're referring to step eight of the.

• 51:00Brian Preston?

  Abundance goals. Yeah, the big things. I mean, this is when you can give to your kids college without regrets. You can get into commercial real estate. You can live in a little nicer lifestyle with nicer car, nicer house. It's just all kind of, yeah, is live your best life.

• 51:17Speaker 03

  Realistically, steps one through seven are about building towards financial independence. Once you get sort of steps eight, it's those goals that exist before you get to financial independence. So whatever that intermediate term goal may be, that's going to be what those prepaid future expenses are.

• 51:31Speaker 04

  Nicely done. Three more. This one says, how often to rebalance? Does it change with age or progression in the foo?

• 51:40Speaker 03

  It does change. It likely changes with size of portfolio, more so than age or where you're at in the foo. What we do professionally at the firm is every quarter, we look at the allocation. We're not always making changes. At least twice a year, we look at rebalancing. Again, not often making changes, but looking for losses or capital gain avoidance. And then as life circumstances change.

• 51:58Brian Preston?

  Yeah, I mean, I wouldn't, I wouldn't be trying to do daily, maybe even quarterly in the beginning. As long as you're looking at this once or twice a year, you should be good.

• 52:08Speaker 04

  Next question.

• 52:08Speaker 03

  Just because you're, I still had a few seconds.

• 52:11Speaker 04

  No, we'll come back to it. Your time is up.

• 52:15Brian Preston?

  You have to go to come back to every one of these, pretty much.

• 52:17Speaker 04

  I know. You are kind of roll with having too much to say today. Okay.

• 52:21Brian Preston?

  Thirty seconds is not that long.

• 52:23Speaker 04

  Next question. Are extended car warranties worth it on used vehicles?

• 52:30Brian Preston?

  I don't, I don't think so.

• 52:31Speaker 03

  No.

• 52:32Brian Preston?

  Buy, buy, basically the good decision is buying the vehicle that has good reliability built into the manufacturing of it.

• 52:41Speaker 03

  I think one of the things, if you look at like gently used, like early on cars, or maybe even buying a new car. One of the big benefits of buying new as opposed to buying used cars, you do get the manufacturer's warranty and the early mileage warranty and all that kind of stuff. It's one of the things that kind of tilts the scales towards new purchasing instead of used purchasing right now.

• 53:01Speaker 04

  Right on the money. Brian looks like he has something to say, but too late. Last but not least, you've said a lot about biscuits and toast on this live stream. What if the toast is homemade sourdough bread?

• 53:14Speaker 03

  I love it, but I don't eat that for breakfast. And you put avocado on there and a fried egg, that, but like if I'm sopping up, if I'm sopping up, and that's the, that's the technical term.

• 53:24Brian Preston?

  He brought in avocado toast.

• 53:25Speaker 03

  I'm just saying, that's what I would put.

• 53:26Brian Preston?

  Such a bougie son of a gun.

• 53:28Speaker 03

  That's what I would put.

• 53:30Brian Preston?

  I love sour, I love sourdough and I, you know, and cinnamon sugar on that would even be awesome. But for breakfast, you want biscuits. You can put some gravy on there. You can put some bacon on there. It's biscuits for the, for the win.

• 53:42Speaker 03

  Because here's the thing, the biscuit is like the all-weather vehicle. If you want it to be savory, no, no, we're done. If you want, if you want something savory, you can put an egg on there, you can put some sausage, you make a sandwich. That's great. Or you could put some honey on there or some jam or something like that. You can make it a dessert. It is so multifunctional.

• 53:58Speaker 04

  So is sourdough bread.

• 54:00Speaker 03

  Look, sourdough bread is wonderful. I'm not gonna, I'm not gonna like

• 54:03Brian Preston?

  His wife makes sourdough too, so that's why you're, somebody's hitting him below.

• 54:06Speaker 03

  And look, like you can do like sourdough, cinnamon rolls, all there, it's unbelievable. I'm a big fan.

• 54:10Brian Preston?

  It still doesn't rise to the biscuit for breakfast.

• 54:12Speaker 03

  But it's not a biscuit, right? These are different things. These are different things.

• 54:16Brian Preston?

  Now, look, by the way, we're not talking about Pillsbury biscuits either.

• 54:19Speaker 03

  No, we're talking about real cat heads.

• 54:21Brian Preston?

  If you've ever had homemade biscuits, well, when you crack that bad boy opening, you see the steam coming off of it, it, it's a little slice of happiness. I mean, even, I'll, I'll give Cracker Barrel credit. You go to Cracker Barrel and they bring out fresh, right out of the oven biscuits. I'll tell myself, Brian, you only go do one. Three biscuits later, I'm like, how did I end up here? And it's just biscuits pull you in.

• 54:43Speaker 04

  A good millennial joke after Beau mentioned avocado toast, someone wrote, Beau's never going to be able to afford a home.

• 54:51Speaker 04

  That made me laugh. I was like, that's too real. Stop.

• 54:53Speaker 03

  That's funny.

• 54:54Speaker 04

  Okay. Um, let's wrap up the show with our maybe it does depend segment. You did say you wanted to come back to a few questions, so I will honor that. Um, our very first question, uh, the question askers said they had 1.5 million investable portfolio and I did kind of cut you off when you were mentioning a pretty important resource that they may want to know about.

• 55:13Speaker 03

  Yeah, I was just saying that a lot of people, okay, I've done the target retirement thing and I did that, but now I do want to graduate to this more specialized solution, something that takes into account my unique circumstances, what I have going on.

• 55:23Brian Preston?

  Tax structure.

• 55:24Speaker 03

  That's exactly what we get to do in our day job. That's exactly what we get to help individuals just like you do. So if you think you're at that point where now the gravity of your decisions is so big because you have a million and a half dollar portfolio, I would argue it's at least have the conversation, go to moneyguy.com slash become a client and look at what it might be like to partner with a professional advisor.

• 55:45Speaker 04

  Love it. Also, you said you may have more thoughts on being generous towards friends and needs, Brian. What do you have to say?

• 55:51Brian Preston?

  I've, I've had a few, because I want, I want to qualify that. I have had a few situations where like I had, I don't want to give too many details, but like somebody wasn't going to make a trip and I've approached them privately and I said, look, you being at this trip is more important than the money side of it. Let me help out and I've, and I've had a mixed bag. I've had one that it went swimmingly well, and it's never been spoken about again. And they got to come and I love it. And I've had another one that didn't go so well. So I mean, I think it, you have to know who the, one of the things I wrote about in Millionaire Mission, one of Bo's superpowers and why he owns part of the business with me is he says thank you incredibly well to where when every time I

• 56:34Brian Preston?

  try to be generous with him, he always overwhelms me with his thankfulness that I want to do more. Some people just don't receive generosity well. So you need to kind of base it off of the person, because some people will bite the hand that feeds sometimes if you're trying to be helpful. And that's, but I've had other people where I've helped them through some really life tough situations and you see a lot of the fruit. So it's a case by case situation. I don't want you to be a miser just because you listened to us answer a question and we said, no, there's definitely, it depends on this answer.

• 57:08Speaker 03

  And money can be so charged. If you are going to be generous, one thing you have to do, and this is like a self thing that you need to do, if it's truly coming from the place of generosity, be very careful trying to receive something for it. Because I think so all too often, you give somebody some money or you help them out with something, there's this expectation that like they now owe you something. That's not what generosity is. Generosity is, hey, I'm going to do this. And my wife and I have had to struggle this before. We've had some people that have been in some like tough spots and we were able to take care of a thing. And then unfortunately, we see that person go make a horrible financial decision. And we're like, oh my gosh, that's not what it was about. It was about helping someone in need, in a moment of need. And so I just think if, and I think when it comes to like doing that, you have to be careful,

• 57:52Speaker 03

  like loaning money to people and that sort of thing. It's a real dangerous sticky game. So if you can remove yourself from it entirely, and you have the means and mechanism to do that, in my experience, that's been, that's been the best one.

• 58:04Brian Preston?

  There is a way to be generous though, without getting yourself in financial trouble.

• 58:08Speaker 03

  That's right.

• 58:10Speaker 04

  You also mentioned, uh, it was about Brian regretting missing an early Roth contribution. Is there anything else you may regret delaying?

• 58:18Speaker 03

  Uh, I didn't go through things I regretted delay. Uh, one of the best, this is for all of my young people out there, right? If you were someone early on and you are thinking about get, or you're going to get married, right? And you're gonna get married and this stuff. One of the best decisions my wife and I ever made is one of the very first decisions we made was we bought a king bed. Uh, and I know that's so silly and so out there, but I'm amazed at how many counterparts that we have right now. Like good friends of ours, like, oh yeah, we have a queen bed. I'm like, oh, what?

• 58:48Brian Preston?

  You know, it's funny you say it.

• 58:49Speaker 03

  It's a, it was a game changer.

• 58:50Brian Preston?

  First seven, eight years of my marriage, we were on a queen bed. And I remember when we got a king bed, but the problem is it ruins you. Cause now when we go stay at somebody's house and it's a queen bed, I'm like, how did we fit on this for seven to eight? We must've loved each other more back then because right now it's just tough. I mean, cause I had that recently, went and visited my mother-in-law and all she has at her place are, you know, is full and queen beds. So we slept on a queen bed, but it's funny you say that.

• 59:16Speaker 03

  That may be like millennial and bougie, whatever. It was like, I was like, holy cow, this is.

• 59:21Brian Preston?

  The other two things I was gonna say, adjoining rooms, once I could afford to put my kids in a adjoining room next to us. I should've done that probably sooner. So you just get a little more space.

• 59:31Speaker 03

  I still struggle with that one.

• 59:32Brian Preston?

  And then the other thing is, is if something is beyond six hours of driving, we do flights. I mean, cause that's, I, I don't know, it's anything, you know, maybe six to seven is gray zone, but anything. Cause I, I remember when we, when we were down in Georgia, I could drive to Orlando in six and a half hours and it seemed reasonable. I moved to Tennessee.

• 59:55Speaker 03

  You can't make that drive.

• 59:56Brian Preston?

  I drove to Orlando and it, by the way, it wasn't 10 hours like the, the thing GPS told you. It was like 11 with traffic. And I was like, never, ever, ever, ever, cause that's like an hour and a half flight.

• 1:00:07Speaker 03

  The, the last time that we did that drive was driving from, we drove to Orlando for Disney and we drove back and I'll, never again. I was like, that, that broke me. Never again. Six hours.

• 1:00:19Brian Preston?

  Well, I can say that last time I did it after we went on a cruise. My oldest daughter, she got sick and was about to throw up in the car. So I pulled off the interstate and of course I chose this great. I chose this exit where I didn't realize that they had cameras on the, on the lights. It ended up being like a hundred and fifty dollar ticket because I, I did a U-turn on an intersection where to, because I was trying to get her not to throw up in the car.

• 1:00:45Speaker 03

  Oh.

• 1:00:46Brian Preston?

  So I wrote the check and I was like, this was a, could probably paid for a part of a flight with that ticket.

• 1:00:52Speaker 04

  All right. And last but not least, I did kind of cut you off on the rebalancing question and just wanted to make sure there wasn't anything else to say. We just ended it pretty quickly, I believe.

• 1:01:02Speaker 03

  I think we nailed, I think we nailed that.

• 1:01:04Speaker 04

  Nailed it. I thought you did pretty well. I just felt like there was something you wanted to say.

• 1:01:07Speaker 03

  Financial mutants often think that we have to take action. When it comes to decisions, remember you're awarded as an investor or as a financial decision maker, based on the quality of the decisions that you make, not on the quantity of decisions you make. A lot of times when we look at client portfolios, one of the decisions we make around rebalancing is not to rebalance, not to rebalance. Cause oftentimes when you're rebalancing, there are friction costs, there are taxes, depending on account structure. So a lot of times we, we will make the active choice to do nothing and that's still an active choice. So if you are going to review your portfolio quarterly, twice a year, annually, whatever, just because you're reviewing and looking at rebalancing does not mean that you absolutely have to rebalance.

• 1:01:52Speaker 03

  Because a lot of times you can actually underperform by overdoing that. That's what I was gonna say.

• 1:01:59Speaker 04

  That's fantastic. Well, thank you so much for joining us every Tuesday at 10 a.m. Central, asking your questions, chatting with us on YouTube and on the Moneyverse Discord. We really appreciate you. We love chatting with the Financial Mutants and hopefully helping you grow your confidence in your financial situation. So you can focus on what really matters. That's what it's all about. That's why we do the show and that's why we have moneyguy.com available for you at any time, full of free resources, calculators and all of our shows archived. So be sure to go check it out.

• 1:02:28Brian Preston?

  Yeah, take advantage of the abundance cycle. There's a reason we give you so much free stuff was we want to give you value, value, value, let you live your best life, own your money and your time that much sooner. And then hopefully you're going to find is, or you will find, it's not hopefully, it will happen. Your success will create complexity and you're going to remember who planted the seeds of success. We'll leave the porch light on for you. I'm your host, Brian, joined by Mr. Bo Rebe, the rest of the content team, Money Guy, out.

• 1:02:55Speaker 04

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