Was His $120,000 College Degree a Huge Mistake?

At 28, Joe has gone from roughly $120,000 in student loan debt to a positive $70,000 net worth—but now he faces a major personal finance decision: should he aggressively pay off student loans or keep investing for retirement? Brian and Bo break down his budget, Roth IRA, HSA, Bitcoin, side hustle income, savings rate, debt avalanche strategy, and Coast FIRE goals to build a financial plan for his 30s. If you’re wondering how to pay off student loan debt, whether to invest while paying off debt, or how much you should save in your 20s, Joe’s financial journey shows just how powerful intentional money decisions can become.⁠⁠⁠⁠ 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.

• 0:02Speaker 00

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• 0:30Speaker 01

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• 1:00Speaker 02

  You start at negative 120, six years ago, and here you are with a net worth of 70,000. When you came out of school, what was your plan?

• 1:08Speaker 03

  After we took out these loans, I never touched them. I didn't know what was going on with them.

• 1:12Brian Preston?

  If you went from 120 down to 76,000.

• 1:15Speaker 02

  That's gotta be more than minimum payment.

• 1:16Speaker 03

  I didn't want to start paying down debt with nothing to my name.

• 1:19Speaker 02

  I can't remember how much your shoe collection was last year.

• 1:23Speaker 03

  Do you remember? I don't necessarily use it in like an arbitrage way where I'm trying to make money off of it.

• 1:28Brian Preston?

  So what is this? It's just a hobby?

• 1:30Speaker 03

  Collection, you know?

• 1:30Brian Preston?

  What will you do with them if you don't wear them?

• 1:32Speaker 02

  What about the crypto?

• 1:33Speaker 03

  If there is an opportunity to change the way that we do money, I'd like to at least have exposure to it.

• 1:37Brian Preston?

  Are you really changing the world with a Coinbase account?

• 1:40Speaker 03

  Not changing the world, it's a hedge.

• 1:47Speaker 02

  All right, Joe, so give us the background. Who are you, man? What's the background? Where do you come from and why are we sitting down here today?

• 1:53Speaker 03

  I applied because I think that what you guys do is absolutely amazing, first of all. So, thank you for that.

• 1:57Speaker 02

  Yeah, man.

• 1:57Speaker 03

  My story basically goes back to the good old get a college degree. The college degree that I got was something in like graphic design.

• 2:05Speaker 02

  Where'd you go to school at?

• 2:06Speaker 03

  I went to Wentworth in Boston, so right next to Fenway.

• 2:10Speaker 02

  What's funny is I went to a couple of years ago, I'm in this like entrepreneur group. We went, we got to go to Boston and we got to like go do Fenway. We actually got to take batting practice in the cages, not on the field, but like on the, in the background or whatever. That's a cool area. I had never been there before, had never like walked around, seen all that. It was awesome.

• 2:28Speaker 03

  So I, I ended up going there and not really like understanding what it is to take out a bunch of debt at the end of the day.

• 2:34Speaker 02

  You're not alone in that. A lot of folks, that's, that's their story.

• 2:37Brian Preston?

  Hey, give me the mindset, cause you know, you're not that far removed. We'll get what your age is here in a second. What does a student feel like when you're, so the young people who watch this can kind of watch out for the trap?

• 2:48Speaker 03

  The thing that I did was I just went to school and had fun. I mean, listen, I didn't do anything bad in terms of like, I got really good grades.

• 2:54Brian Preston?

  But did you use student loans for lifestyle?

• 2:56Speaker 03

  No, I actually didn't really use it for, I mean, a little bit maybe. I mean, I wanted to live off campus one year. So because of that, I took out a little bit of debt to go ahead and like get an apartment with some of my friends and stuff like that. But that wasn't super major, I don't think. More it was just like the degree that I got itself was,

• 3:12Speaker 02

  Off the college?

• 3:12Speaker 03

  Yes, was way outside of like some of the stuff that you guys preach today with, you know, being inside a certain amount of range of money so that you're not, you know, spending this incredible amount of money and then the job that you get out, straight out of school is, you know, not covering the amount of money that you had.

• 3:26Speaker 02

  How much does Wentworth cost? Like how expensive of a school is that?

• 3:29Speaker 03

  I feel like it just kind of depends on obviously what.

• 3:31Brian Preston?

  How much it costs for you?

• 3:32Speaker 03

  In total, all, everything in was $120,000.

• 3:35Brian Preston?

  120 grand. How much student loan debt you run up?

• 3:37Speaker 03

  That was it. That was.

• 3:38Brian Preston?

  Okay, so ran up 100, so no scholarships, no outside money, just student loans?

• 3:44Speaker 03

  And that's another thing that I would say that people really need to do and take part in is like, I was, I just didn't care. You know what I mean? I was like, hey, you know, like my mom, you know, we're taking out the loans.

• 3:52Brian Preston?

  What was your starting salary coming out of college?

• 3:54Speaker 03

  Around 65. So way outside of the guidelines that we would have liked to be in, just in the, in the beginning.

• 4:00Brian Preston?

  Going back in time, would you have changed colleges, changed majors? What would you have done differently?

• 4:05Speaker 03

  So I don't think I would have changed the major. I think a lot of the people that I met, you know, the experiences that you get, that's, you know, once you experience it once, you really wouldn't trade it. So it's like hard to say that you wouldn't do that again, right? But in terms of how much I would have paid, the things, the scholarships that I would have applied for, the off-campus housing that I would have gotten, like I would have definitely stripped a lot.

• 4:25Brian Preston?

  Would you have considered going to community college for two years and then transferring in or would that not be feasible?

• 4:29Speaker 03

  I honestly don't know. I, I feel like I would. I, you know, I don't think that I really took away anything from the experience if I did that. So.

• 4:36Brian Preston?

  And by the way, we're not here to, to go back and redo. We don't have the DeLorean.

• 4:41Speaker 03

  Of course, yeah.

• 4:41Brian Preston?

  So we're going to get you out of whatever situation you're currently facing. I'm just curious, because I think that's, it's truly something that all young people are facing right now. So if we can kind of put a, put a light to something that somebody can watch and be like, hey, I just, or maybe you've got kids that are close to going to college. I just want to kind of bring, shed a light on that because college is so noble, but it's, it's so noble that we've all fallen into its, it's kind of alluring trap of not thinking that there's, that you have to pay attention to what the end goal is. You know, we, we think it's all noble, just go to school and it'll all work out and get that degree. Just like you said, get the college degree.

• 5:16Speaker 03

  Yeah.

• 5:17Brian Preston?

  But if you don't know what you're actually going to be making your living and what the debt's at, you can find yourself in a bad situation.

• 5:22Speaker 03

  Exactly. And I mean, my, my dad's first, not first generation, my mom's first generation here. My dad moved here from Italy when he was 21. He didn't know the language, you know what I mean? So for me to have the opportunity to go to college, it was like, oh my God, this is like, I want my son to go through this, you know what I mean? And experience that. So I, you know, went straight into it. You know, I was like, this is exactly what I have to do regardless of the job that I was going to get outside of college and whatnot. And that put me in a pickle, um, straight out the gate. And then that's kind of when I found you guys. Like literally at that exact moment, I was like, I have to figure this out. I have to do something. There's got to be a better way to do it. Um, and started watching you guys back in 2020 because I graduated August 2020.

• 6:00Speaker 02

  Okay. So you're, and how old are you now?

• 6:02Speaker 03

  Uh, 28.

• 6:02Speaker 02

  28, all right. So 28 years old now and you graduated in 2020 and when you graduated, you had $120,000 in student loan debt.

• 6:09Speaker 03

  Right out the gate.

• 6:10Speaker 02

  If you did a net worth statement in 2020, were you like negative 120? Did you have anything else going on or was that?

• 6:15Speaker 03

  I probably had around $10,000.

• 6:16Speaker 02

  Okay. So it was like, you're starting from a hole. And again, I think a lot of young people find themselves in that position. What I think is really awesome though, you're 28 years old, so we're six years removed. You were kind enough to share a net worth statement with us. When we look at it right now, six years in the future, you are not at negative 120,000 anymore.

• 6:33Brian Preston?

  I mean, I was already impressed to take 120 down to 76 in a short period of time, pretty impressive.

• 6:39Speaker 03

  Yeah.

• 6:39Brian Preston?

  Already. And then to see that you actually have stacked on top, above and beyond the debt. Dude, you're, you're kind of painting like a, a sad story here and I'm trying to figure out how we can, you know, throw some rays of sunshine and then you've already done it. I mean, this is, this is already kind of a redemption story in the making right now.

• 6:57Speaker 03

  Yeah, definitely. And it was just through, you know, everything that you guys preach and also a lot of hard work at the end of the day.

• 7:03Speaker 02

  Well, I want to know more about that, right? So you start at negative 120, six years ago, and here you are with a net worth of 70,000. What'd you start doing? Like when you came out of school, what was your plan? You said you're making $65,000 a year. How'd you even find money to start chiseling away at this? Like what, walk us through what, what, what you did.

• 7:24Speaker 03

  So one of the blessings that I did have was being able to live with my family.

• 7:27Speaker 02

  Okay.

• 7:27Speaker 03

  That is.

• 7:28Speaker 02

  Like after school?

• 7:28Speaker 03

  After school, yeah. I stayed at home. So that definitely did wonders in terms of the ability to save some money. And then also just heavy budgeting at the same time. A mixture of those two things created enough margin for me to be able to go ahead and start the Roth and that was the beginning of my journey.

• 7:44Speaker 02

  I think it's so great for young people to hear that. You made the decision. Do you still live at home now or are you out on your own?

• 7:48Speaker 03

  I move out the 28th of this month.

• 7:50Speaker 02

  You've been living with your parents. Do you regret that decision? Do you, because you know, a lot of people, they graduate like, oh, I can't go back home and I gotta, not recognizing that it could be this wonderful opportunity if your parents are in a situation that that's a possibility to let you really start stacking cash and changing your future financial trajectory. If you were talking to a graduate right now that's trying to decide, okay, do I go back and live at home? Or do I just go huff it on my own? What would you say, what would you tell them?

• 8:16Speaker 03

  I would tell them that obviously personal finance is personal. That's number one. For me.

• 8:22Speaker 02

  Where'd he get that from?

• 8:23Brian Preston?

  I don't know. I don't know where I come from. That's an echo.

• 8:25Speaker 03

  That's exactly what I would tell them though, because it was like for me, there, that was the option. It was like, if I want to be able to, you know, move forward in my life post this, you know what I mean? Like that was the sacrifice that I had to make and I just wanted to be smart about it. Did I want to do it? No, not necessarily. But we all do a bunch of things that we don't want to do at the end of the day. Looking at it from a holistic view and not trying to sugarcoat it, I think is the best way to go about it.

• 8:47Speaker 02

  So you're living at home, you're saving money on rent. You said you started budgeting. How'd you set up your budget? How'd you know how much to pay towards student loans? How'd you know how much to spend eating out? Like how'd you design categorically where to put your money?

• 8:59Speaker 03

  I think I kind of worked backwards from it a little bit. I was more of just like, I really want to knock down this debt. And what's the best way for me to do that is to say, hey, I want to put this amount towards the debt to get rid of it in this amount of time. And then whatever was left over was the thing that I kind of played with.

• 9:13Brian Preston?

  So what is that plan right now? Cause it must be pretty aggressive to go from 120 down to 76.

• 9:18Speaker 03

  Yeah, I was probably saving for a long time. I was probably saving close to 40% of my income.

• 9:23Speaker 02

  That's awesome.

• 9:24Speaker 03

  Now, part of the reason why I also wanted to come on the show was to get your advice on some of the things that I can do moving forward now because I am moving out, right? I am moving out next month. Um, that is another expense that we see that's going to be on the, on the list. Um, and the savings rate is dropping dramatically to around 11% even though I found I'm, I'm living with someone. So that the price would be a little bit cheaper and um, you know, 11% is just not going to cut it for me though. So it's like, you know, building a plan around that and figuring that out would be awesome as well.

• 9:53Speaker 02

  Well, walk us through your current saving. When you think about where your dollars are going right now, how much are you putting on student loans and how much you putting into your other investment accounts? Like, how are you navigating that?

• 10:01Speaker 03

  I just maxed out the Roth every month religiously. In preparation for the show as well, I stopped doing all of the excessive investing that I was doing. And I kind of pulled back and said, based on what kind of recommendations I get here, at least I'll have a little pot of money to go ahead and make some decisions with.

• 10:15Speaker 02

  Yeah.

• 10:16Speaker 03

  Other than that, the debt is also something that we, I have to tackle that.

• 10:19Brian Preston?

  So the only thing that's set up automatically currently is just your Roth IRAs being fully funded.

• 10:23Speaker 03

  And then basically everything else that's outside of the budget just goes towards a savings account. And then I delegate that where I think it should be that month. So it's not like necessarily that it goes into the brokerage.

• 10:34Speaker 02

  About how much is going into that savings account? Like, what, what's the excess capacity with which you have to work every month?

• 10:41Speaker 03

  It was all of the rent, basically, that I'm going to start paying now.

• 10:44Speaker 02

  So about $1,700 a month is what you did have in excess, but now that's about to get consumed by, by rent.

• 10:51Speaker 03

  Exactly.

• 10:52Speaker 02

  And when we look at your student loans, you have a number of different student loans, number of different interest rates. How have you prioritized paying them down? Like, how, how, you, you have, you have a bunch of different ones, a bunch of different rates. What strategy have you employed?

• 11:03Speaker 03

  So I have done something that I think is kind of a sin over here.

• 11:08Brian Preston?

  Oh, what is this?

• 11:11Speaker 03

  I basically just make minimum monthly payments on everything and I didn't prioritize any of that stuff to begin with. And the reason why I say that that's kind of like a sin based on what we're doing now is because some of these interest rates are like really high. I didn't want to start paying down debt with nothing to my name, you know? And I understand that that may be a little bit out of order depending on the way that we look at things. But that was really what I, I wanted inflation to eat everything away.

• 11:34Brian Preston?

  But if you went from 120 down to 76,000, you obviously have been paying back.

• 11:39Speaker 02

  That's gotta be more than the minimum payments, right?

• 11:40Brian Preston?

  That's not the minimum.

• 11:41Speaker 03

  Well, that's the, the payment that we see there, the 1,500 is what I've been paying for. It's been five years now.

• 11:47Brian Preston?

  So it's not the, it's not like interest only. This is, this is, does have, what's the repayment window that, that you've elected?

• 11:54Speaker 03

  Oh, I don't know necessarily.

• 11:56Speaker 02

  10 years from graduation.

• 11:57Speaker 03

  It's probably a shorter, yeah, it's probably a shorter window pay. But I didn't, after we took out these loans, I never touched them. Like, I didn't know what was going on with them. I was not informed with anything. I didn't make any, you know, good decisions behind it. I kind of just let whatever happened, happened at the end of the day.

• 12:13Speaker 02

  So my guess is if we're six years into this and it's gone from, from there to there, we're probably on a 10-year amortizing note, paying $1,500. Do you know how much is going towards each loan? Like, if I asked you how much is going towards parent plus one, parent plus two? Do you know those numbers or it's just, you just know 1,500 total is going?

• 12:29Speaker 03

  I could probably break it up a little bit. I mean, I know that there's like 700, um, 700 for the private student loans or something like that. I honestly couldn't give you the exact details. I have it in a slide sheet.

• 12:42Speaker 02

  Sure.

• 12:43Speaker 03

  But not necessarily.

• 12:44Brian Preston?

  Yeah, we'll probably make that part of the homework because I can imagine we're going to have, you have competing goals here, so we're going to need to, to prioritize your goals. And we will use the interest rate because you have about $42,000 that we would probably want to be somewhat aggressive on. And then some of these others, they don't panic me as much. If you're balancing between funding a Roth versus paying down a low interest rate, you know, student loan, I'm going to want you still keeping that Roth going. So we'll have to work through the, the priority on that.

• 13:15Speaker 02

  And I want to give you, you said, okay, well, it's probably going to be a sin over here that you paid some of these down. We would argue at your age, in your twenties, not all of these would qualify as high interest. I think when we look at this, maybe perhaps one of them would fall into high interest, maybe two of them. But the others don't give us a lot of anxiety because we do think that your money could likely be deployed better elsewhere. But I need to understand about what you've been doing from an investment standpoint because I see two asset categories on here that I was, or three asset categories on here that I was not expecting to see from an investment standpoint. Now, Brian, you and I, every year, um, we do our net worth statements and we're buddies, right? So we're super close. We kind of share them with each other. I can't remember how much your shoe collection was last year. Do you remember? I don't remember what that was.

• 14:00Brian Preston?

  And, and full disclosure, Joe's, Joe's profile photo that kind of put him to the top of the heap. But I, I'm sure there's a fancy name for him, but they looked like Elmo shoes. I mean, so some of these, some of these shoes are eclectic. Is, is that a fair way to say?

• 14:15Speaker 03

  Yeah, 100%. Some of them are like, you know, a little bit of an investment. Some of them are just personal stuff. A lot of the things that I collect now are like 1990s, like Jordan retros that have never been worn with like the original box and stuff like that. And that's just something that's fun for me.

• 14:30Speaker 02

  So you don't wear them? This is not, you're not like showing these shoes off? You buy these shoes, hold them, it's a collectible type investment.

• 14:36Speaker 03

  Yes, exactly.

• 14:36Brian Preston?

  Have you made, like, you saying this is worth four grand, what do you have in this?

• 14:40Speaker 03

  Probably close to that.

• 14:42Speaker 02

  I was getting four grand.

• 14:43Speaker 03

  It's not.

• 14:43Brian Preston?

  The reason I ask is, look, we know people, like, and I've used this example before. We had a Disney pin collector who was incredibly good. We had, you know, you always hear the saying, the two best days to own a boat is the day you buy it and the day you sell it. But, but I gotta tell you, we had a client who knew the boat market so well that he was flipping them for profit left and right because there's a lot of inefficiency in the boat market. There's a lot of inefficiency in the Disney pin market, I come to find out. I would be curious, the shoe market, I have no problem if you want to do this. If you've created an expertise that lets you be the shark versus the lamb. But right now, are you shark or are you more lamb?

• 15:20Speaker 03

  I, I don't, I don't necessarily use it in like a, an arbitrage way where I'm trying to make money off of it.

• 15:25Brian Preston?

  So what is this? Is this a hobby?

• 15:26Speaker 03

  It's more just collection, you know?

• 15:27Brian Preston?

  What will you do with them if you don't wear them?

• 15:29Speaker 03

  Um, glass display cases, you know? Maybe that works at the end of the day.

• 15:34Speaker 02

  And honestly. How big is your apartment?

• 15:36Speaker 03

  I will say that this collection that I've been building has been since high school. It's not like something that I've just recently started dumping a bunch of money into.

• 15:42Brian Preston?

  Will this be displayed in your apartment?

• 15:44Speaker 03

  Uh, it depends. If you come over, I might hide them at this point, you know?

• 15:48Speaker 02

  How many, how many shoes does it take in a shoe collection to equal $4,000?

• 15:53Speaker 03

  Probably wouldn't be much if I had really, really high-end stuff, but you know, 30, 40 shoes.

• 15:57Speaker 02

  30, 40 pairs, 30, 40 pairs of shoes.

• 15:59Brian Preston?

  It's enough to take up a whole wall.

• 16:01Speaker 02

  What about, okay, so, you know, maybe that's not really an investment. Maybe that's more of sort of a use. This is a thing that you enjoy that you perhaps could sell, but it's not so much an investment.

• 16:09Speaker 03

  That's exactly what I would refer to as.

• 16:10Speaker 02

  Okay, so what about the $10,000 in gold? What's going on there?

• 16:13Speaker 03

  That is 100% just all jewelry. It's all, it's all handed down, uh, basically like.

• 16:21Speaker 02

  Okay, like family, family heirlooms.

• 16:23Brian Preston?

  Something that's passed on. You didn't go out there trying to buy gold and.

• 16:25Speaker 03

  Yeah, no, definitely not.

• 16:27Brian Preston?

  Okay, okay, okay, okay.

• 16:28Speaker 02

  So we got, we've got, we've got a use asset on here, the shoes, not really a use asset, but like a hobby enjoyment asset. It's like home decor. Gold is more of like a family heirloom. Okay, I'm, I'm feeling better.

• 16:39Brian Preston?

  I thought, I had visions that you're out there buying.

• 16:43Speaker 02

  I did too.

• 16:43Brian Preston?

  Ounces of gold or, or something, so.

• 16:46Speaker 02

  All right, so then what about the crypto? That's the third one that I'm like, all right, you know, when I see these other things, what's going on there?

• 16:52Speaker 03

  A little different. Um, the crypto is strictly just Bitcoin at the moment. And the reason why I gravitated towards having a percentage of my portfolio being in crypto is if there is an opportunity to change the way that we do money in that sense, I'd like to at least have exposure to it at the end of the day.

• 17:09Brian Preston?

  So you're keeping cold storage or, or do you have an account?

• 17:13Speaker 03

  It's just an account.

• 17:13Brian Preston?

  So like a Coinbase?

• 17:15Speaker 03

  Yeah.

• 17:16Brian Preston?

  Are you really changing the world with a Coinbase account?

• 17:18Speaker 03

  Not changing the world. It's a hedge, that's all. It's just a little hedge.

• 17:22Brian Preston?

  You realize, because this is the thing I always talk to crypto people. I mean, if you had a cold storage, I get it because you're kind of independent. You just don't lose pass codes or whatever else. But when you're part of Coinbase and other things, are you really changing the financial system? Because I don't know if you saw, the big stress test was, I mean, I, I've seen it with the, the Iran war that they're doing. You see it with the Canadian protesters. They went in and took wallets. So I mean, it, it seems like we have the illusion that we've created a new system, but it's not as independent as, as what's in the brochure. For me, it sure does seem like the governments have no problem navigating around these systems.

• 18:02Speaker 03

  Yeah, and I won't argue that point at all, right? It was more of just like, this is something that I've always just kind of bought and never sold. There was no, there was no gambling.

• 18:11Brian Preston?

  I've even dabbled. I've dabbled in Bitcoin.

• 18:13Speaker 03

  Exactly.

• 18:13Brian Preston?

  I was just always curious because I dabbled and then I got out because the, what got me was just the volatility of it. I, I just is, I, I couldn't believe how much we were ripping and riding on this thing all over the place. And matter of fact, the last time I, I talked about this, I was picked on because, you know, Bitcoin has gone where it went all the way up to what, 128?

• 18:35Speaker 03

  Something, something.

• 18:36Brian Preston?

  Yeah, 128,000 and then now we're back in the 60s? You know, it's, um, and then it's, it's just, it's, it's been a long ride. And that's the thing is that before we actually can treat it as, it's not a currency. And I don't think is because the pricing is going way up. Because if you're dealing, if you imagine if you're buying pizza, you know, using Humphrey Yang's example, and the pizza one day is going to cost you 10 bucks, but then the next time it's $64, you'd be like, heck, this isn't a good thing to pay for pizza with.

• 19:06Speaker 03

  Completely unsustainable.

• 19:07Brian Preston?

  So, so that's, so it's more of a speculative play.

• 19:10Speaker 03

  Of course.

• 19:10Brian Preston?

  And as long as it's a hobby, I'm okay. But the problem I'm worried about with you, Joe, you don't really have room. If you think about the pyramid of investing, speculating is kind of at the tippity top after you're at the fun stage of, hey, what do we do with all this money we got laying around? You're kind of still at the fundamental. Let's make sure these army of dollar bills have a purpose so that they can hopefully help me quit working so hard or, or at least extinguish some of this debt over here. I think it's the wrong time to be, to be jumping on the speculation train.

• 19:39Speaker 02

  And, and with the crypto, are you allocating to it, still allocating to it? Or do you have this position and you're just holding it?

• 19:45Speaker 03

  Yep, just a position that is holding, yeah.

• 19:47Speaker 02

  Uh, what about the HSA? Is that something that you're actively contributing to and letting invest and grow? Or are you using those dollars for current medical expenses?

• 19:55Speaker 03

  I actually got access to that this year.

• 19:57Speaker 02

  Okay.

• 19:58Speaker 03

  So I've been contributing to that and investing it, um, just per usual. So I think it's about a hundred dollars, $80.

• 20:05Speaker 02

  So if you had a, if you had a, uh, investment or a, um, a medical expense pop up, would you use that to pay for it or would you pay for it with outside resources?

• 20:13Speaker 03

  Um, probably outside resources. A, a lot of the money that can be invested is invested, so I'd rather not touch it at the moment.

• 20:20Brian Preston?

  What's your deductible? Do you know what your, your deductible is in your plan?

• 20:23Speaker 03

  No, I don't.

• 20:24Brian Preston?

  Because that's what I typically like people, if you're going to start investing the HSA, let's at least put the deductible kind of in a cash equivalent. And then that way we can go above and beyond. And I bet your deductible is going to be higher than 1,600.

• 20:37Speaker 02

  When I'm thinking about what's about to change in your life right now, you said you were kind of share your budget with us. Right now, once your rent starts, you're going to have about $5,000 a month flowing out, right? Like going out for expenses. Uh, how much extra, cause you're trying to figure out, how do I prioritize paying off the student loans, saving, building? How much extra margin are you gonna have on a monthly basis to fund some of these goals?

• 21:05Speaker 03

  That's the tough part.

• 21:06Brian Preston?

  What's your take home?

• 21:07Speaker 03

  There's, uh, my take home is-

• 21:10Brian Preston?

  Cause we see your salary, your salary was, or your pay was around a hundred and seven thousand?

• 21:14Speaker 02

  Nine thousand dollars gross a month.

• 21:16Brian Preston?

  Yeah, so, so what's your take home after your, your health insurance? And do you have a retirement plan?

• 21:20Speaker 03

  Uh, do not, no, I don't have one.

• 21:22Brian Preston?

  Your employer doesn't offer one, or you just chose not to be part of it?

• 21:24Speaker 03

  Doesn't offer one at the moment, no.

• 21:25Brian Preston?

  You gotta go out there and lobby them. Are you, are you an independent contractor, or are you a W2 employee?

• 21:30Speaker 03

  A W2.

• 21:30Brian Preston?

  How many employees does your company have?

• 21:32Speaker 03

  Thirteen, I think.

• 21:34Brian Preston?

  They don't have a 401K?

• 21:35Speaker 03

  No, not at the moment.

• 21:36Brian Preston?

  Come on, guys. Let's get this going, you know, send this, send this video to your boss and be like, hey, do you realize, especially boss man, you can, you realize how much money you can hide from the government legally with a 401K and do good work for your employees?

• 21:49Speaker 03

  I'll have to be the initiative on that one, for sure.

• 21:51Brian Preston?

  All right, all right, we can keep it going.

• 21:52Speaker 02

  All right, so nine thousand dollars gross income, what hits your checking account every month?

• 21:56Speaker 03

  So I do a little bit of side work, so that kinda like muddies the water in terms of what I actually get.

• 22:02Brian Preston?

  Is that in the hundred and seven?

• 22:03Speaker 03

  Yes.

• 22:03Brian Preston?

  Okay.

• 22:03Speaker 03

  Um, I, it's not a lot, it's, it's probably closer around ten thousand dollars a year of just, you know, side income. Um, so, you know, deducting that and whatnot, I probably have around five thousand, two hundred dollars to work with every month.

• 22:17Speaker 02

  Oh wow, so, okay, so if you have five thousand, two hundred dollars net coming in-

• 22:21Speaker 03

  Somewhere around there.

• 22:22Speaker 02

  We got forty eight hundred dollars going out, we really got four hundred bucks access to, to work with, is that right?

• 22:28Speaker 03

  Yeah.

• 22:29Speaker 02

  And is four hundred, is that, is that what you've experienced?

• 22:32Brian Preston?

  Well, no, wait a minute, you're letting him off way too easy.

• 22:34Speaker 02

  Well, I'm just doing math, forty eight hundred, fifty two hundred, I did math.

• 22:37Brian Preston?

  I have a screen here that says your income is a hundred and seven thousand, five hundred, and your net's fifty two hundred, there's a spread there, how much is this side hustle? It's more than ten grand then. But one of my favorite things about recording Making a Millionaire is every one of our guests has a different situation.

• 22:53Speaker 02

  That's so true, uh, one couple needs help getting out of debt, another person's trying to figure out retirement, and then there's the guy who's just spending way too much on horse massages.

• 23:02Brian Preston?

  Yeah, that's true, each person has different goals, different opportunities, and different blind spots, and it reminds me a lot of what we get to do every day here at Abound Wealth.

• 23:11Speaker 02

  Yeah, we sit down with our clients, we learn what's important to them, and we build a plan that's tailored to their life and their specific situation.

• 23:18Brian Preston?

  If you've been watching this conversation and thinking to yourself, hey, I wish someone would help me figure out my situation, we'd love to have that conversation with you, we're fee only, fiduciary advisors, and we're here to help.

• 23:30Speaker 02

  That's right, just head over to aboundwealth.com or click the link below, we'd love to connect and see if we're a good fit for you.

• 23:36Brian Preston?

  How much is this side hustle? It's more than ten grand then.

• 23:39Speaker 03

  No, no, it's not, well, maybe my, maybe my, uh, my income is a little bit higher, maybe fifty six or something like that, it's not that different.

• 23:49Brian Preston?

  Cause there's just too much of a spread here.

• 23:51Speaker 02

  Well, so if we take a hundred and eight thousand and you take ten thousand off of that, now we're gonna be at ninety eight thousand, if you take ninety eight thousand, you divide that by twelve, that'd be a gross monthly income of about eighty one hundred dollars, so we got eighty one hundred gross coming in, and you're saying that you're netting about fifty two hundred of that eighty one hundred?

• 24:09Speaker 03

  Yeah.

• 24:10Brian Preston?

  That would be a thirty six percent.

• 24:12Speaker 02

  Health insurance coming out of that?

• 24:14Speaker 03

  Yes.

• 24:14Speaker 02

  Okay, so health insurance.

• 24:15Brian Preston?

  How much is health insurance?

• 24:16Speaker 03

  That's a great question, I don't know.

• 24:18Brian Preston?

  Joe, give me a guesstimate, because this is the accountability side of things.

• 24:22Speaker 03

  Yeah, I, I really don't.

• 24:24Brian Preston?

  Five hundred dollars, four hundred dollars?

• 24:25Speaker 03

  Probably close to four.

• 24:26Speaker 02

  He's on a high deductible plan, so you're gonna assume it's gonna be one of the less expensive plans, so maybe it's like probably four to five hundred dollars individual for a high deductible plan, what, anything else come out of your paycheck, uh, other than your health insurance?

• 24:38Speaker 03

  Uh, well, the HSA, of course, um-

• 24:41Speaker 02

  And that's, you said about a hundred bucks, eighty bucks a month?

• 24:43Speaker 03

  Yeah, eighty bucks, a hundred bucks.

• 24:45Speaker 02

  Okay, keep going.

• 24:46Speaker 03

  That should be it, really.

• 24:48Speaker 02

  All right, so the math that we're doing is if you take eighty one hundred dollars minus eighty-

• 24:55Speaker 00

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• 25:23Speaker 01

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• 25:32Speaker 05

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• 25:40Speaker 01

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• 25:53Speaker 02

  Eighty two hundred dollars for HSA, that takes down to eight thousand, minus another four hundred or so for health insurance, that takes down to seventy six hundred, you gotta help us, seventy six hundred is what we've calculated should be hitting your checking account, but you say you only have fifty two to fifty six hundred, where are we, where are we missing?

• 26:10Speaker 03

  Yeah, it's gotta be in the side hustle income at that point.

• 26:13Speaker 02

  Okay.

• 26:13Speaker 03

  Uh, maybe I've overestimated the, the amount that I kinda get from that on a month-to-month basis.

• 26:18Brian Preston?

  Cause the reason we're squeezing on this is, we wanna, we wanna know-

• 26:21Speaker 02

  How much money do we have to work with?

• 26:22Brian Preston?

  Yeah, cause I mean, I don't wanna, I don't wanna give you false perspective that we're gonna be able to pay these student loans off in eighteen months.

• 26:29Speaker 02

  Yeah.

• 26:30Brian Preston?

  And then we find out, no, I mean, you couldn't even eat ramen and make that work. That's why the important part of personal finance is, is, is the quality of the data and, that we put into the system, because, especially for young people, I mean, we changed the variable on your rate of return from eight percent to twelve percent, and it looks like you could-

• 26:48Speaker 02

  Oh, you're great.

• 26:49Brian Preston?

  You could make it with twenty, twenty six cents a month, and you'd be all right, but it, but in the reality, I'm, I'm being facetious, of course, but that's why we have to get the data points right, otherwise, we're, we're, we're gonna give you false sense of security, and that wouldn't be doing you right either.

• 27:04Speaker 03

  Yeah, so net that's coming into my account on a month-to-month basis from my job, from my W2, is closer to around fifty six.

• 27:14Speaker 02

  Okay, okay.

• 27:15Speaker 03

  That, that's the number that I wanna work with, so, and then the side hustle income is sporadic, but I can make extra money on the side.

• 27:22Brian Preston?

  And what's the, what do you do with that side hustle money?

• 27:24Speaker 03

  So I'm a graphic designer and like a brand identity, uh, person, so I do a lot of logos, um, colorways, fonts, you know, advertising, and stuff like that for people.

• 27:32Brian Preston?

  Would it be okay if we earmarked that for specific purposes?

• 27:35Speaker 02

  That's kinda what I'm thinking, if we build a budget, or if we build a plan off of fifty six hundred based off of what you have going on, automatically going out, then essentially we assume like the side hustle money doesn't exist, and then when it does exist, that's what we wanna go deploy towards student loans, or towards building assets, or towards these other goals, just cause you're, you're pretty lean with your inflow and your outflow, so your side hustle's gonna be where all the margin exists, does that make sense?

• 28:00Speaker 03

  Exactly, yeah, I love that.

• 28:01Speaker 02

  And so realistically, if we're gonna operate on how much can you make side hustling, how difficult would it be for you to make ten thousand dollars a year side hustling?

• 28:09Speaker 03

  I would say not very difficult.

• 28:10Speaker 02

  Okay, great. How about twenty thousand dollars a year side hustling?

• 28:12Speaker 03

  Way more difficult, yes.

• 28:13Speaker 02

  How about fifteen thousand dollars a year side hustling?

• 28:15Speaker 03

  Still probably cutting it closer, I'd, you know-

• 28:17Speaker 02

  Okay, so ten thousand-

• 28:17Speaker 03

  The ten thousand is-

• 28:18Brian Preston?

  And that's giving it all you got, if we were really motivated to try to get this debt and other stuff out of here?

• 28:24Speaker 03

  Uh, giving it all I got, it's probably not, no, I probably could go a little bit harder, but I would say let's keep it at the ten.

• 28:30Brian Preston?

  Well, the reason, here's the reason from a mindset standpoint, you're young and single right now.

• 28:34Speaker 03

  Yep.

• 28:35Brian Preston?

  So you have, you, you know, this whole trade-off with how you use your time, um, you're gonna be, one day you're gonna blink and you're gonna turn around and be my age, and you're gonna find out, oh my gosh, I don't have this abundance of time, and it's not only just because you're getting older, but it's also because the older you're getting, it feels like there's more commitments, whether it's family and, and, you know, your business responsibilities or whatever, you just don't have as much control as you'd hoped, but that's okay if you've built up enough income and assets that you can start buying back your time with that, only if you've made really good decisions when you're in your twenties and you turned your time that was in excess at that point into assets that you own.

• 29:18Speaker 03

  Yeah.

• 29:18Brian Preston?

  But if we don't, but that's why we have to figure out how much capacity you have, so we can get aggressive, cause the only way this all works, we gotta get the debt paid off, and we gotta start owning stuff, and now you've done a good job, the fact that you have seventy thousand dollars of, of net worth above and beyond even this debt means you understood that, but you were also, you had a tailwind with the living at home. Now that we're gonna be out on our own, it gets, it gets a little more raw, and you've gotta be even more disciplined and, and, and purposeful with everything you do.

• 29:49Speaker 02

  Is the lease already signed, like the apartment?

• 29:51Speaker 03

  Yep.

• 29:52Speaker 02

  It's, this is happening.

• 29:52Speaker 03

  This is happening, yeah, we're making it happen.

• 29:54Speaker 02

  How, how'd you decide now is the right time for that?

• 29:56Speaker 03

  Partially just because I felt like I was at a point in looking at the numbers for myself-

• 30:02Brian Preston?

  Twenty years old.

• 30:03Speaker 03

  Yeah, twenty eight years old, A, first of all.

• 30:05Speaker 02

  I get it, but, I didn't ask you, I didn't ask you, Brian, why'd you, why are you moving out?

• 30:09Speaker 03

  But I also, I also felt like, I don't know, I, I had done, I had done the dirty work, I had, you know, made a lot of sacrifices and decisions for the past five, six years that if I don't push myself a little bit more and put myself in a situation where like, hey, I just have to make things happen, I have to go find a better job that makes a little bit more income, or I have to continue with the side hustle a little bit more in order to create that margin and that aggression that got me to do these things in the first place, right? Because the debt's dwindling down, it's almost like the tiger that's chasing you is dwindling, can we get a new tiger to chase you?

• 30:43Speaker 02

  A new tiger, yeah. All right, so, okay, we've talked a lot about where you are today and what you wanna see change in the near future, what about ultimately where you're heading? Like what, when you think about, and I don't necessarily, you're twenty eight, so I don't wanna go all the way to sixty five, but when you think about life at forty for you, how does life at forty look differently than it does today, and what do you want to say at forty that's true of your life from a financial standpoint?

• 31:07Speaker 03

  Yeah, from a financial standpoint, I'd say, obviously, we wanna get the debt knocked out, like, that's one hundred percent the number one thing that, you know, it's been with me for so long that I'm like, we just gotta get rid of this. Um, now, whether or not that's the best thing to do in terms of, you know- You know, cumulative money that I could make over time, you know, that would be where, why I'm on the show and what I want information from you guys for. And then besides that, I know you said you didn't want to push it all the way out to retirement, but you know, figuring out my numbers for some coast fire.

• 31:39Speaker 02

  Okay.

• 31:39Speaker 03

  Or type of retirement plan in that sense.

• 31:42Speaker 02

  When you think about coast firing, since you brought that up, when is the coast part? And when is the full retire part? You gotta give us those two numbers.

• 31:50Speaker 03

  Yeah, I think it would be landing close to that 45, 50 year mark. You know what I mean? It doesn't have to be, I enjoy working, you know what I mean? I really did find a passion and something that I like to do. So that's not a problem for me. It's more of just like, what can we do to kind of make it so that I can live my best life as early as possible with the decisions that I've made so far.

• 32:12Speaker 02

  So get to age 45, age 50, be able to coast then out until a full retirement age of 65.

• 32:19Speaker 03

  That would be awesome.

• 32:20Speaker 02

  Talk to us about inside the graphic design world, what does income opportunity look like? Are you, is the income you're making right now probably going to be the same thing you're going to make for the next 10 or 15 years? Or does it scale up? Is there a range? How, how does that work? How does your side hustle play into that?

• 32:36Speaker 03

  Yeah. So from my actual W2, I'm probably in the $92,000 a year range. Or whatever that math can 97 or wherever I'm at now. Senior graphic designers in my area can make, you know, 120, 140,000 dollars. So there's definitely a little bit of room to grow there. And then, you know, you get up to art director and other titles that are much more substantial. So.

• 33:00Speaker 02

  Is your desire to move into one of those roles? Like, do you want to be an art director and that sort of thing?

• 33:04Speaker 03

  The thing that I would say I'm debating at the moment is like, hey, do you really go off and do something on your own? I know that you had this experience, you know, going off on your own and really taking

• 33:13Speaker 02

  28 when he did it.

• 33:13Speaker 03

  Taking that gamble.

• 33:15Brian Preston?

  I was 28.

• 33:17Speaker 02

  Well, we might have some answers.

• 33:20Brian Preston?

  But, but full disclosure, now, look, I had a big life element. I lost my father. I wasn't really thinking rationally when I did it because I went from making right at six figures to I think my first year I made 17, $18,000. So not exactly a blowout success in the first year out of the gates.

• 33:38Speaker 03

  But it is a decision that you had to make and that you made and it actually worked out for you. So, you know, even if we do it in a somewhat better way than you did, which, you know, it could be, could or could not be possible. Like, I wonder if that's feasible for something like me, you know, because obviously there's the, if you want to do it yourself, like if I want to be a business owner.

• 33:55Brian Preston?

  Is this a serious thing or just an aspirational thing?

• 33:58Speaker 03

  I would say that it's more aspirational at the moment. And that's why I gave you the information on the actual job.

• 34:03Brian Preston?

  If you're serious, you've got, you've heard us talk about putting on your 3D glasses, where you have to actually lay out a business plan for what the next three to five years looks like, and then run it in three different scenarios. There's the dream of, and I can't believe all these people, these prospects just keep showing up all over the place. There's the down to earth is, hey, this is probably going to be hard to go get clients. Cause that's what I've, you know, a lot of people, a lot of people have passion. I can remember when I started my first company, I just thought everybody, because I was always a likable guy. I think I was perceived as a pretty smart guy growing up. So I thought as soon as I started my first company, all my childhood friends, parents and everybody would want to come.

• 34:42Speaker 02

  We can't wait to hire Brian.

• 34:43Brian Preston?

  Wait to hire Brian and either do, let him do our taxes or manage our assets or so forth. This was what the daydream was. And then when I went out on my own, the phone doesn't ring. And it was, I was shocked. I was like, obviously I have a false sense of myself, you know, because nobody, I, I should take that back. I had a neighbor who called my, one of my, my parents' neighbors, Mr. Ronnie Stewart, he actually reached out. And then one of the, the mother of one of my childhood friends, old Franny Fran, those were the only two that showed up. I mean, my in-laws didn't even show up at first. Well, there's, there, there's a post who loved me no matter what. Now, and my, my mother-in-law was going to see this and she's going to be upset about it.

• 35:23Speaker 03

  There it is.

• 35:23Brian Preston?

  But it, but that's why I tell you is you have to put on your 3D glasses because there's the dream of what you hope will happen. There's the down to the earth plan. And then truthfully, mine went more like the doo doo plan. And, and I think you have to kind of account for that. Now, the good news for me was I had saved up three years of what I thought I needed pretty much in cash. So that I had a little room for the doo doo to, to kind of get cleaned up. And, um, and that's, that's what it took for me to figure out how to, how to do this well. So if you are serious about doing the entrepreneurship side, you've got to create that cash flow plan and then figure out how you go get business. Cause that's the hard part. You can be the most talented person in the world, but if people aren't going to be able to find you, or you're not going to be able to go sell

• 36:08Brian Preston?

  that passion or that's talent to somebody, it doesn't matter how skilled you are. And that, that's the hard part that I found is that you can be smart, you can be talented, but if nobody knows you're out there with the sign on the door, it's, it's a dream.

• 36:20Speaker 03

  I agree completely. Yeah.

• 36:21Speaker 02

  When you hear that and you think about entrepreneurship, this is something you said this may be a little more aspirational. This isn't something you're trying to do in the next year, next two years, next three years. This is like, maybe down the road, one day I might want to do my own thing.

• 36:33Speaker 03

  Yes.

• 36:33Speaker 02

  But more if the stars align, not that's something I'm going to hard charge and drive towards. Am I hearing you correct on that? We've got some plans here. Our plan is we gotta figure out how do we get the debt knocked out? What's the strategy for that? Uh, how do we get to a good place in the near term? And then ultimately how to get to a good place, maybe by the time we're in our mid 40s in order to be able to do some sort of coast, coast fire and figure out what that looks like? What other questions can we answer for? What other things can we speak to that might be valuable?

• 37:00Speaker 03

  Being a saver and being someone who's been diligent for a really long time, my question would be like, how do you know when your lifestyle inflating versus you're actually making progress, you know, and you can actually start to afford some of the things that, um, the life luxuries that, you know, you can kind of bear the fruit of, of what your work is.

• 37:18Speaker 02

  At your age, I think it's a function of savings rate. If you can get to the point where you're saving 25% of your gross income, you don't have to worry about lifestyle inflating beyond that, right? Like if you have money left over after saving where you need to be saving, putting money in your retirement accounts, putting money in your Roth, doing your HSA, building your taxable account, having your emergency fund where it needs to be, and you're doing that on a systematic and automatic basis, getting that debt knocked out. If you want to move into the nicer apartment or buy the automobile or go on the trips, you get to do that and do it guilt free. You don't have to worry, oh, is it okay if I'm doing this? If I'm paying all the stuff I need to be paying first, I get to spend freely and, or guilt freely and enjoy what I'm doing. I have to second guess and have remorse over the decisions I'm making.

• 38:02Brian Preston?

  Yeah, we've got, um, by the time you're, this episode airs, we actually, so you're going to get some behind the scenes here, because the day we're recording it, our know your number course that we sell for a hundred dollars. We're actually converting that into a free calculator that's going to be on our website. So that way anybody who wants to know if they're ahead of the curve, behind the curve, right where they're supposed to be, I think it really pays, uh, you know, respect to what Bo was talking about. If you use that tool and you could see that you're ahead of the curve with having a good savings rate and being disciplined, it should free you to start living your better life, you know, because the problem is a lot of people, they base it off of their cash flows. The same thing when you show up at a car dealership, they don't add, try to help you figure out how much car you can afford. They say, how much

• 38:46Brian Preston?

  is your monthly car payment? And that's the opposite way of where you're supposed to live your life. I think you're supposed to kind of, you know, figure out what your, your income is, what your goals are, figure out how you build the lifestyle to where it matches that income and then the future goals. So then you can kind of bolt together the plan that actually fits within all those, those things. I mean, I already feel pretty good. Cause I think I've got your, your numbers figured out a little bit better and we'll, we'll go into, when we get into the full planning phase of it. I bet you're going to find that you have just on a monthly cash flow wise, about $9,600 a year. So if you think about that $9,600 a year, that's going to work out to be about $800 a month. You're going to be, we're going to be able to create some automatic plan, whether it's debt, whether

• 39:31Brian Preston?

  it's savings or investments. And this might tweak up or down a little bit, depend on what the, the planning team comes up with. And then I think probably of that side hustle, even accounting for taxes and so forth, hopefully you can come up with 9,000. You know, if you were pulling 10 to 11, you know, we can come up with, you know, another $800 a month or $750 a month. And if you do that, and I think if you really looked at where your income really is, I think it's probably a little overstated at 107,000. But where if we're closer to 100, if you're saving 18% of that, that's pretty close to 20.

• 40:06Speaker 02

  28 years old.

• 40:07Brian Preston?

  And, and you know, and that, that's a really good thing for somebody who's under 30 years of age. That's because a lot of times when Bo says 25%, that's somewhat aspirational for people in their twenties, because you just haven't had enough time for your natural talent to reach the level of experience where you have mastery. And then you reach those peak earning years. Most people's peak earning years is in their 40s and 50s. Um, but you're, you're well on that, that path. It's just a matter of being patient. That's the, that's the only thing that, that I see from, from looking at this is yes, your student loans are there. But I think if you're patient and we create a plan, you have the elements to, to be very successful here.

• 40:45Speaker 03

  That's awesome. Thank you guys so much.

• 40:46Speaker 02

  Well, I think I know what we need to put together. I've got some, I think we've got some good thoughts. I think we can do some good planning here.

• 40:51Speaker 03

  Thank you guys so much.

• 40:52Speaker 02

  Thanks, Joe.

• 40:53Speaker 03

  Appreciate it.

• 40:53Brian Preston?

  Joe, thanks for coming on. This has been great.

• 40:55Speaker 02

  All right, Brian, I'm gonna say it. Joe, I think Joe should be an inspiration to young people out there.

• 41:01Brian Preston?

  I mean, how do you start with in the hole 120 grand? And then you come out, and by the way, he's still in his twenties.

• 41:07Speaker 02

  Yep.

• 41:08Brian Preston?

  Come out the other side with a net worth positive by $70,000.

• 41:13Speaker 02

  It's wild. It shows that he was willing to make some difficult decisions, move towards his goals. I think he has a bright future, but there's some stuff that needs to triage today. Obviously, the big thing that came up, we look at his net worth statement. He has debt on his balance sheet that we need to get off. Right now, he has these five different student loans, and some of them, I'm gonna say, qualifies high interest, 6.75, over 6%, certainly high interest in the twenties. I'm gonna argue even that one at 5.5% because it's his biggest loan. Since he's about to be 30 in the next couple of years, I think those are for sure high interest.

• 41:47Brian Preston?

  How much of, how conflicted were you in the fact that because a big part of Joe's success has been, he lived at home. So that allowed him to be really, go hog wild with paying down the debt. Now, I get it. He's at that threshold, he goes, no mas, I'm moving out. He had a roommate and they're, they're going to go live their best life. But I was sitting there going, wouldn't it be cool if we just had a little bit more live at home so we could completely extinguish those student loans? Cause now it does make us, require us to make bigger, harder decisions.

• 42:16Speaker 02

  That's right. I definitely think that maybe if he could have just done it for a little bit longer, he would be able to get further along. But again, I think he's in a great spot.

• 42:23Brian Preston?

  Yeah.

• 42:24Speaker 02

  And, and for 28, Joe does have a big shovel. We discovered that his take home pay is somewhere right around $5,600 a month. And that doesn't even include the $10,000 a year in side hustle income he has coming in. And so when we think about his living expenses and where he's gonna be, he's gonna be spending about $4,800 a month. So he has about $800 a margin available. That's what's there.

• 42:48Brian Preston?

  And don't forget that $4,800 includes, I think, a little under $1,600 a month. It's like $1,550 that's going towards paying down debt payment. So he has a pretty small footprint.

• 43:00Speaker 02

  Yeah, when you add those two up, he's got about $2,350 that he can throw towards debt on a monthly basis. So when we model it out, it's pretty incredible in what he's gonna be able to do. If he just takes that $2,350 and begins applying it to the debt, and we just said, let's go with the avalanche method. Let's pick the highest interest rate and let's knock that down and then let's go to the next highest, the next highest, and next highest. He's gonna have the parent plus loan paid off in 11 months. The parent plus number, uh, first loan paid off in 20 months. Private student loan paid off in 32, the direct subsidized paid off in 35, and the direct unsubsidized paid in 37. Now, I, I know some people are saying, guys, guys, guys, guys, you said only three of them were high interest. Why do you have him paying off all five? Well, I just think that behaviorally, he's done such a good job of building assets.

• 43:44Speaker 02

  He's in a great spot, even when you look at his net worth in the asset column, that I think he's afforded himself the ability to give himself this behavioral win of just getting all of this debt knocked off of his balance sheet in the next couple of years.

• 43:56Brian Preston?

  Personal finance is very personal. And the good news for Joe is he did build up some wealth and some investable assets, even as he was paying down these student loans while he was living at home. Uh, look, there's a part of me, I, I felt a little conflicted and we ran it both ways to where we were like, hey, there is a path here where he is knocking out the student loans aggressively, but he's also funding his Roth IRAs. Cause I, I love the tax-free growth, but man, it did look compelling when you looked at, hey, if we just went with debt crazy, just call it a debt crusader, if you will, to pay off the debt and then still when you're in your early thirties, be able to then go ham on the saving and investing, i- it's, it's pretty exciting stuff.

• 44:38Speaker 02

  Yeah, we said that, okay, originally, if he just sticks to our plan of using that 2,300 a margin to pay off the debt, he's gonna have it paid off in around 37 months. But if he took that side hustle income and instead of doing the Roth IRA, instead of doing that, he just applied all of that and he had about $3,000 a month going towards his loans, he could have every single one of his loans paid off in 27 months.

• 44:59Brian Preston?

  So we're only talking about, we're foregoing essentially a year.

• 45:02Speaker 02

  Maybe eight or nine months.

• 45:04Brian Preston?

  Yeah, you know, in addition, between the two, that we're talking about one Roth contribution, difference between these two.

• 45:09Speaker 02

  That's exactly right. So he's gonna have to look at this and figure out, uh, what do I want to do? Do I wanna live more in the present by using my side income for lifestyle? Do I wanna take my side income money and max out my Roth, so I'm still building assets? Or do I wanna buckle down and limit the debt? He's gonna have to choose based on where he is, which one of those paths he's gonna go down.

• 45:30Brian Preston?

  So I wanna know more about the coast fire thing, cause it sounds, being so young, conquering so much debt, how, how does this start stacking up and how much momentum does it build and how quickly?

• 45:41Speaker 02

  Well, here's what we said, he's already done the hard work at his age of building up $100,000 in assets. So he said, okay, what if we jump forward, have all the debt, all the student loans knocked out, and let's get him to a 25% savings rate, starting at age 31, right?

• 45:55Brian Preston?

  Which will actually be less than what he's throwing at the debt.

• 45:57Speaker 02

  That's exactly right. He's actually gonna get a free lifestyle upgrade once those are gone. So if he just hits 25%, he'll be saving about $2,200 a month, starting at $100,000 at 28, saving $2,200 a month. By the time he gets to age 50, he will have amassed a portfolio, assuming a 9% rate of return of about $2 million. That's pretty wild. And so then we said, okay, well, if the idea is to coast, if he stops saving at 50 and he just lets that $2 million grow from age 50 out to age 65, without saving another dime, $2 million turns into almost $8 million.

• 46:38Brian Preston?

  Even in the, the content meeting, we had to pull out the financial calculators and make sure, it does really show the power of compounding growth is because to see that $2 million with just a little bit of momentum and consistent growth can grow that level was just, it was kinda shocking. They're like, let's check those numbers one more time to make sure that we're telling everybody the right thing.

• 46:58Speaker 02

  Look, Joe has a big shovel, but he's not this guy that's making hundreds and hundreds of thousands of dollars and he's not this, he's not doing anything like unbelievably remarkable. And I think that if he'll recognize, man, I'm in this situation, if I can knock out this debt, not carry it through the next decade with me, if I can focus on keeping my footprint small and building for the future, because he's so young, because he's already done a lot of the hard work, he's gonna have options later down the road to live the life that he wants to live on his term, the way that he wants to live it, if he can prioritize knocking some of this stuff out now.

• 47:30Brian Preston?

  Joe should definitely feel encouraged and, and realize that he's looking in a really good place from really hard decisions in the beginning, but now it's just, it's kind of building upon itself, the essential definition of compounding growth.

• 47:43Speaker 02

  That's right. He's a financial mutant and gonna continue to be a financial mutant.

• 47:46Brian Preston?

  Joe, we loved having you on. Bo, if more people like Joe wanted to come on and show how they can conquer their finances, where do they need to apply?

• 47:53Speaker 02

  Yeah, if you wanna be a guest on Making a Millionaire, you can go to moneyguide.com/apply. Or if you wanna check out any of our free tools and calculators, go to moneyguide.com/resources.

• 48:02Brian Preston?

  Joe, thanks again. And for the rest of you, remember, small, small decisions can have huge results and help you live your great, big, beautiful tomorrow. I'm your host, Brian, joined by Mr. Bo, Money Guy team.

• 48:16Speaker 06

  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 Making a Millionaire. 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. The guests featured on Making a Millionaire are not clients of Abound Wealth Management at the time of recording. Their participation should not be considered a testimonial or endorsement of Abound Wealth Management.

• 49:02Speaker 07

  Does anyone know where the bass is? Hey, Bo's here. When your next track starts, listen for the decisions that the artist makes. The vocal pushed right up front, the bass that waits half a beat, that sample from a seventies underground gem, every choice deliberate. With Bo's, you'll hear it all. Your music deserves those.

• 49:31Speaker 07

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