Pod Insights Money Guy Show Is a $100k Income STILL Enough to Buy the American Dream? | Making a Millionaire About this episode Daniel and Hannah are navigating the messy middle - raising kids, building careers, and working toward big financial goals (like homeownership and financial independence). We talk about budgeting on a $100K income, the tough trade-offs between Roth contributions and emergency savings, and the pressure to "do it all" while staying grounded. Can we help set an intentional plan today for their great big beautiful tomorrow?
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Transcript 11,638 words · 8 speakers
Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.
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0:41 Speaker 03 We feel like we're making as many right decisions as we possibly can. We're thin with this. We were frugal with that. We try to be good stewards. We try to set our future selves up for success. And then we still, at the end of the month, we're like, I'm doing something wrong.
0:52 Brian Preston? In the messy middle, you've now got to figure out what's the sacrifice? I'm seeing a lot of goals, but I'm seeing a lot of hard decisions.
1:05 Speaker 03 I'm Daniel. I'm 31 years old.
1:06 Speaker 05 And I'm Hannah. I'm 28 years old.
1:08 Speaker 03 And we're from Dothan, Alabama.
1:09 Speaker 05 And welcome to Making a Millionaire.
1:11 Speaker 06 I am so excited because this is the show where we get to talk to millionaires and millionaires in the making. And today is no different. We are joined by Daniel and Hannah. Guys, thanks so much for being here with us today.
1:22 Speaker 05 Thank you for having us.
1:23 Speaker 03 We're excited.
1:23 Speaker 06 We are. That's my line. That's my line.
1:26 Speaker 03 I didn't even mean to say that.
1:27 Speaker 06 So watch this walkthrough. Who are you guys? Like, what are your names? What are your ages? What do you do for a living? What's the family situation? Walk us through that real quick.
1:35 Speaker 03 I'm Daniel. I'm 31 years old and I work at a small business. We're a print shop and marketing and design firm. Been there for a couple of years.
1:43 Speaker 05 I'm Hannah. I'm 28. I am a music teacher at a local elementary school. Also teach computer science kind of on the side. We have two beautiful girls. We have Charlie, who is four, and we have Ally, who is one and a half.
1:55 Speaker 06 I love it. So when I hear a four-year-old and I hear a one-and-a-half-year-old, my mind immediately thinks messy metal. Y'all, would you say that you guys are in fact in the messy metal?
2:05 Speaker 05 Yes.
2:06 Speaker 06 Where you find you have nothing but tons of discretionary income and nothing but Tons of discretionary time and so life is super, super easy right now. Right? That's the way it is. Right? Obviously, obviously, that's the way all of us in our 30s and 40s and 20s feel like. That's awesome. Well, thank you guys so much for being willing to sit down and talk with us because I think a lot of people are in the messy middle and they're trying to figure out, how do we make all of this work? How do we line all of this up? And so you guys were kind enough to share with us a net worth statement showing, hey, this is kind of where we are today. So if you're okay, we'd like to kind of just run through that sort of level set. So when we look at your net worth statement, the first thing that I immediately noticed before I see anything else, Brian, there's no debt on this net worth statement.
2:47 Brian Preston? That's incredible.
2:47 Speaker 06 That is amazing. And that is, that, that's worth celebrating right here. You guys, did you, have you ever had debt and you paid it off? Or just you've stayed out of debt the whole time?
2:55 Speaker 05 I did.
2:56 Speaker 03 We did. We, um, when we got out of college, we came into, came into the marriage. Uh, I had a little bit of college debt. And we paid that off pretty quickly. This is before we knew about the steps or anything like that. But we just knew we kind of want to get that out of there as fast as possible is kind of the mindset.
3:11 Speaker 06 Love it.
3:11 Speaker 03 And I, I kind of felt bad bringing that into the, to the marriage. Hannah didn't have any debt and I, I kind of was bringing on this car payment and bringing on the student debt and whatnot. So.
3:19 Speaker 05 But that was our priority. We knew that financially going into our marriage. We knew that debt was the first thing that we wanted to tackle financially, along with saving.
3:27 Speaker 06 How'd you know that? Like, what, what was the thing that, how?
3:30 Speaker 05 The, the word debt just felt like it'd been thrown around somewhere. We'd heard debt, you know, that's a scary word. So we're just like.
3:36 Speaker 03 Four letter word.
3:37 Speaker 05 In order to grow, in order to grow financially with our family, we had hoped to pay off that debt first thing.
3:44 Speaker 06 I love it.
3:44 Brian Preston? I do want to celebrate, if you watch any of our net worth by age series, y'all are at a key crux point there is you crossing it to as a 30 year old and you're slightly over, you're slightly under, but so I, I give you all the benefit of the doubt that y'all are essentially 30 year olds. Is if you can have one times, if your investment assets can be one time your earnings, you're crushing it. You're way ahead of the curve. You're doing everything right. And when I look at your net worth, then look at your annual income, I recognize you guys are doing a lot and making it happen at such a young age. That's something to be definitely celebrated. I'm super excited for you guys to be on the show today.
4:24 Speaker 06 Yeah, as you guys sit here right now, you have a household income of a hundred thousand dollars and a net worth of about a hundred and four thousand dollars. Give us some feedback. How do you feel about that? Like, do you feel like, oh, man, we're crushing it. Life is great, or we're behind the curve, ahead of the curve? What sort of your feeling for where you are right now today?
4:41 Speaker 03 I think we're, it feels pretty good. I know that was kind of the goal was to get to that one time's you're, you know, kind of following the rules and whatnot. We had a whole five year plan ready. And we pretty much failed at that the first year and a half. We said we were going to start grinding, start working, go through, you know, rising through the ranks.
4:57 Speaker 05 Typical five year plan after you get married.
4:59 Speaker 03 Let's not have any children. Let's enjoy ourselves and all that. And then, you know, a year and a half later, we're blessed with our first born. So
5:06 Speaker 03 punt, you know, audible a little bit.
5:07 Speaker 05 We pivot.
5:08 Speaker 03 Yeah, we pivoted pretty good. But yes, this feels, this was definitely a goal of ours. So it's a, this is a, you know, little platinum for ourselves a little bit.
5:15 Speaker 06 I love it. So you've done a great job, Sev. You obviously have some investment assets. You've got, you know, you have two 401ks. It's like an old 401k with about eighteen thousand dollars and a new 401k or current 401k with about thirteen thousand. Any reason why those are different and not consolidated into one?
5:30 Speaker 03 That is definitely one of the topics we wanted to talk about today. It was just an old 401k and it was, I worked at a Fortune 500 company, so I left it there. It seemed like a good enough plan.
5:42 Brian Preston? So it's a really big custodian, like a Vanguard, a Schwab or a Fidelity?
5:45 Speaker 03 It's using Voya.
5:47 Speaker 06 Voya, okay.
5:48 Speaker 03 But yeah, it just seemed like it was a good enough plan. And truthful, I didn't know enough about the taxes, so I was afraid of touching it. I just thought this was working for me. I'll just leave it here. It seems like it's in a good enough. You know, I didn't get to exactly pick where the assets are exactly, but it was just kind of their aggressive fund, if you will. So I don't know all the breakdowns.
6:07 Speaker 06 What about the current 401k? Is it a good 401k? Good investment options? Fairly robust?
6:11 Speaker 03 I think it's fewer options on this one. Again, it's more of their just spread out into an aggressive portfolio, but this one is in a Roth 401k. The current one is.
6:19 Speaker 06 Great.
6:20 Speaker 03 So I'm glad they had that option.
6:21 Speaker 06 And so the old 401k is probably pre-tax. But one of the great things is even if you have an old 401k that's pre-tax and a new 401k that's Roth, most 401ks are That to hold both types of those assets. So even if you were to consolidate this into your new 401k, it's not like you would lose that money being pre-tax. It's not like it'd have to be converted to Roth. You could still bring it over pre-tax 401k to pre-tax 401k. In our experience, a lot of times, if your new 401k is good, it makes sense to have them in the same place just because it's easier to manage. Just having one account instead of two accounts allows you to have a better view and a better idea on ultimately what your dollars are doing and what direction that they're moving in. Makes sense? And then Hannah, you have sort of two different retirement things going on. You have a 403B
7:04 Speaker 06 that you're contributing to, and then you also have a TRS pension plan that you're paying into in the state in which you work.
7:11 Speaker 05 Yes.
7:12 Speaker 06 What always contributed to the, because a lot of, a lot of like educators, they don't do both. They might do one or the other. What made you decide to do the 403B?
7:21 Speaker 05 I worked at a private school my first two years. I kind of did it backwards. So I was in private school for those first two years. And when we talked about investing, they advised me do a 403B. And so I put that in. And then when I transferred, we moved. They told me, you know, eventually you're going to roll this over and life got hectic and crazy. And I'm not as financially responsible as I like to be. So I didn't roll it over. So it's currently still sitting there.
7:46 Speaker 06 There's an old 401k that's sitting there.
7:48 Speaker 03 What's, what's fun about that account is we kind of forgot that existed, actually. So that was an old, that was her old employer. She hasn't been there in four years. And then when we were kind of doing this, we remembered, hey, you have that 403B. We need to figure out what to do with that because I think actually it was paying, you know, it might be managed possibly. So we might want to look at that. But then we, we were shocked to see that it had 7,500 bucks in it.
8:10 Speaker 05 Yeah. I was worried it was all gone.
8:12 Speaker 06 One of the things that I love you just said is, hey, this exercise to come on, come on to Making a Millionaire. We had to like pull together all of our stuff and had to see what all we have and where it's all at. You know, that's not something you only get to do when you come on Making a Millionaire. One of the things you can do, and we love doing this every year is an annual net worth statement. And if you do an annual net worth statement at the end of every year, it allows you to see, oh my gosh, I forgot about that account. I didn't even know, there's 7,500 dollars I didn't even know that I had.
8:37 Speaker 05 Yeah.
8:37 Speaker 06 So that's a great exercise that you guys should Consider begin because I'm guessing you don't do that right now since you didn't know about that. That's a great exercise for couples to begin doing together just to make sure, hey, are we moving in the direction we want to be moving? And do we understand where all the parts and pieces of our financial life are? And it can be a great communication tool as well.
8:57 Brian Preston? It's a great communication. It's a great dashboard. It's just because these conversations we're having like on the old 401ks versus the new, what are the internal cost structures? What are the investments? Every year you're going to get a reminder, hey, maybe we can make this easier on ourselves by consolidating. Also, I mean, I thought when you're for such a young age, I did still see a lot of life in your net worth because it was so cool to me to also because y'all got Roth IRAs, you both have Ross. But then I liked, Daniel, you have, you worked at Publix. Was that in high school and in college? I'm assuming.
9:29 Speaker 03 I wish. I would advise anybody who is, you know, 15, 16, whatever, start working, work at a Chick-fil-A, a Publix, somewhere like that. But no, this is just in college. It was, I was broke. I ran out of my scholarship. I need to start paying for classes. It was time to grow up. And I said, you know what? I'm going to apply everywhere. Publix was the first person that called. So and it turned out to be great for me.
9:49 Brian Preston? Part of our content team is Daniel. He was a Publix guy. He always was very positive on the college experience on between scholarships and all the way they treat. So this, it warmed my heart to kind of see that sitting on the net worth statement. It looks like even for a college student, this was something that bared fruit that started creating assets that are going to compound over the long term for you.
10:12 Speaker 06 So here you guys are with $100,000 of investment assets. And so one of the questions we like to ask our guests here is if you are familiar with our content, you were telling us before how both of you are huge fans of the Monday Guy Show. Where would you say you are in the financial order of operations? And if you're not familiar, this is like a nine step process of what to do with your next dollar.
10:35 Brian Preston? I even wrote a book.
10:36 Speaker 06 There's, he literally wrote the book on this. Where would you guys say you are in the financial order of operations?
10:44 Speaker 05 I think step four.
10:46 Speaker 06 Step four.
10:46 Speaker 05 That's what we're currently working on.
10:47 Speaker 03 Yeah, definitely step four.
10:49 Speaker 06 Step four, building up.
10:50 Brian Preston? There's a lot of confidence. I love that you have this confidence about it.
10:54 Speaker 05 We're working on it.
10:55 Brian Preston? But yet, in a minute, we're gonna pull up what you're actually doing.
10:59 Speaker 03 We might have ping ponged a little bit in this step.
11:01 Brian Preston? No.
11:01 Speaker 05 That's gonna come up for.
11:03 Speaker 06 There we go.
11:04 Brian Preston? The accountability of this is all gonna come together. We're gonna see, man, are we really? Cause you are, by the way, we would agree you are indeed in step four.
11:13 Speaker 03 We should be in step four.
11:14 Brian Preston? But Bo, I'd like for you, can you walk us, walk our audience, you know, Hannah, Daniel through? What are they actually doing with their money?
11:23 Speaker 06 Yeah, so when we look at your cash holding, remember, again, you said that you have about $5,000 in cash right now across your current cash holding accounts. Well, you know that our goal for a fully funded emergency fund is somewhere between three to six months of living expenses. So I'm gonna pause here for a moment. Would $5,000 cover three to six months of living expenses for you guys?
11:45 Speaker 05 Absolutely not.
11:46 Speaker 06 No.
11:46 Speaker 05 No.
11:46 Speaker 06 Okay, so it is wonderful that you recognize, okay.
11:50 Speaker 03 That's probably one month.
11:50 Speaker 06 We are, we are in step four, right? But when we look at your saving strategy, when we look at how you've been accumulating and how you've been building dollars, this is what we see right now. Right now, Daniel, you're putting about $5,200 a year into your Roth. I know you guys do a lot of weekly saving, but we actually told it about $5,200 a year in your Roth. Hannah, you're doing about $5,200 a year Roth. Daniel, your 401K has about 5% going into it. You get a 5% match. I'm assuming you're maxing it out to get the match. You do have money going into your high yield savings account, so that is the step four part, building that of about $3,600. And then Hannah, you're required to put money into your pension, right? So you have to put 6% or almost a little over $2,800 into your pension.
12:32 Speaker 06 And by the way, that puts you at a 22% savings rate, what sounds awesome, right?
12:36 Brian Preston? And that's probably understated because it doesn't even include the TRS.
12:40 Speaker 06 That's right.
12:40 Brian Preston? Has some funding going in.
12:42 Speaker 06 That's right.
12:42 Brian Preston? It's just that's, it's much harder to determine what that number is because of the way they calculate it. But see, y'all are doing great.
12:48 Speaker 06 So we love seeing this, and that sounds awesome, except for, except for, when we asked you, where are you in the financial order of operations? All, everyone at this table agreed that you are solidly in step four. And yet, right now, I see that you have almost, or a little over $10,000 a year going into Roth IRAs. Do you know where Roth IRAs fall in the financial order of operations?
13:12 Speaker 03 After step four.
13:13 Speaker 06 After step four, it's actually the immediate next step. It's step five. And what's happened so far is I imagine because you don't have debt, I didn't see credit card debt. I didn't see that kind of stuff. You've not had an emergency happen that caused you to have to pay for it, that caused things to run out. But that doesn't mean that it's not going to happen. So right now you guys are living in sort of this uncertain precarious thing. So long as everything keeps working, it's okay. But as soon as something goes awry, as soon as that unknown, unknown expense happens, you guys are going to be in a rough spot.
13:45 Brian Preston? I would like to point to, I looked at your bank statement and I was trying to figure out all the money lines because it was hundred dollar galore. I mean, so is this you, Daniel, or you, is this, is this automated? That all these hundreds of dollars are going into all these different accounts? Or is this you like every time you get a little extra cash, you're in there and you're like, send them another hundred bucks? What is it? Is it automated or is it manual? It is automated.
14:09 Speaker 03 It's automated for both of us on Mondays, which typically, typically we.
14:14 Brian Preston? Because it was a lot of money line. I have a sickness myself. I mean, I, I dollar cost average every week with my investments. It really scratches the itch. But I also, I was, when I, when I looked at your statements, a curiosity, a question mark formed where I was like, based upon how active I see these money line investments going into all these different accounts. Do you dislike cash? Is there, is there a mindset thing? No, I don't, I'm not saying that to be funny. I'm just trying to, because you're in, you know, you're in step four, but I see this behavior where you're, you're creating this automation that's leaning it out as much as possible to get the money into the other accounts. What, what do you feel about cash? Is it, do you feel that's wasteful because it's not working? Give us, give us some insight.
14:58 Speaker 03 I don't think it's wasteful per se. I, I think kind of like you said, maybe we haven't had the unknown, unknown happen. We did kind of recently since, since having these conversations and whatnot, we had our washing machine broke on us. So that was an unknown, unknown.
15:11 Speaker 06 Yeah.
15:11 Speaker 03 That was fun.
15:12 Speaker 06 It's not cheap either, right?
15:13 Speaker 03 Not at all.
15:14 Speaker 06 That's an expense you don't count on that happens.
15:16 Speaker 03 I think we've just kind of been blessed that we haven't had something like that happen. We both know through this whole process, this is kind of thing we need to start doing is really protecting ourselves. Really for our, for our girls too. I mean, just not being so thin on, on the cash and whatnot.
15:31 Brian Preston? Cause it does create that, you know, desperate decisions is what we're trying to protect you from is because, and by the way, I, I think anybody who's decent with money and once you understand compounding growth and how your money can work harder than you can, we all immediately fall into this trap of like, well, let's get it in there as fast as possible because you get rewarded for that. But the cautionary tale is, is that you can't get caught without cash when life happens, because that's back to those desperate decisions where you end up going into credit card debt, or you end up just sacrificing or, or medical issues. There's all kinds of things that can come up that can really derail your financial life. And we just prefer, and for you guys, what I think is exciting
16:15 Brian Preston? is that you could correct this pretty quickly. It would not, now what you're, the way you're going, this is going to be like an aching pain that's just going to nag you for years. Cause your cash reserves is just, it's, it's anemic at how it's growing, but that could be quickly corrected if we actually turn that discipline towards actually correcting this problem.
16:37 Speaker 06 So when we ask you guys, what is your monthly burn rate? Like, how much does it cost you guys to cover the expenses every month? Do you have a bead on what that number is?
16:46 Speaker 03 Off the top of my head.
16:47 Speaker 05 Forty-one?
16:48 Speaker 03 Maybe more than that, but somewhere.
16:50 Speaker 06 Four, five thousand? You actually gave us a budget that we were able to look at. So we kind of have some insight into what it looks like. And you guys did a great job of sort of breaking it out in terms of needs. You know, what are the needs that you have? Your wants? What are the wants that you like to spend money on? And then you do have these savings buckets where money is flowing in. And so what we figured is that your total monthly expenses realistically are somewhere around like $5,100 a month. So right there at that 5,000. So because you guys are both working and you have a household income of a hundred thousand dollars and you make close to the same incomes, we think that that would substantiate, you could probably have about three months of living expenses as an emergency fund as opposed to some people need six. We think because you guys have some other stuff you're trying to do.
17:35 Speaker 06 That three months will make sense. So where we ultimately want you to get is to 15,000 and where you are right now is not at 15,000. Right. So Brian already mentioned this, we're moving towards this goal. And, and so how we're moving towards this goal. Well, a hundred dollars a month is going to the emergency fund. Well, it's gonna, gonna take a lot of months at a hundred dollars a month to go from where you are to where you need to be. Then we do have
17:59 Brian Preston? It's like rolling the dice. Maybe life won't happen this month. Hundred dollars more.
18:04 Speaker 06 But then we had this vacation fund and this house fund and we're going to talk more about those in a second. But it looks like those have just kind of been falling into the emergency fund. So maybe even like 300 a month in good months is kind of flowing there. Well, if you continue at that pace, working towards the three months of living expenses, it's going to take you a little while to get a fully funded emergency. It's gonna, you're gonna be in step four for the next three years and 10 months, assuming nothing bad happens. That's assuming no kid thing, no medical thing, no car thing, no water heater thing, no washing machine thing. I'm gonna go through all the things. It's still going to take you a long time. Generally speaking, when we think about the financial order of operations, we don't like ping pong. We like like laser diligent focus.
18:46 Brian Preston? Foo-ish is foolish.
18:49 Speaker 06 Look at that.
18:50 Brian Preston? So you got it. You got it. Cause it really does. We're trying to, your next dollar is the entire focus of what we're trying to do with the financial order of operations. And by you guys bouncing around here, it is the foolish and it's just, it's a worry. You're, you're opening yourself up to more risk than you probably recognize. And, and look, you've been rewarded because you said, nothing bad's happened so far, but being lucky can only last so long because life does have that strange sense of humor that things just will happen. And when, and sadly, when they happen, it rains, it pours. Is that you, you might have a situation where one of you loses your job, hopefully not, but it's the same time that the, the stock market's getting beaten up. And at the
19:35 Brian Preston? same time, maybe a car breaks down, maybe a piece of equipment in the house, like a refrigerator that you have to have breaks down. And all of a sudden you're like, how did all these things all happen? At the exact same time, what are we going to do? And it just creates a lot of turmoil and emotional anguish and desperation that just doesn't have to exist.
19:54 Speaker 06 So one of the things we think that you could do to potentially right the ship is if we, instead of doing the $800 a month through the Roth IRAs, which is technically step five, we really did laser focus on step four and try to get that emergency fund built up. If you were to shift those dollars into that, do you realize that you can have a fully funded emergency fund in one year? Like one year from now.
20:17 Speaker 03 That's awesome.
20:17 Speaker 06 You could have that knocked out because you know, and Brian talks about this in his book all the time, that steps one through four are really about, what do you say, keeping your life out of the ditch.
20:27 Brian Preston? Yeah.
20:28 Speaker 06 Right? They're about keeping your, so that then you can focus on five and beyond, which is really about building your great big beautiful tomorrow. And that's where we want you to get. And we think that realistically, if you were to shift that $800 from the Roth over to the high yield account, you could hit your emergency fund target in one year. How does that sound?
20:45 Speaker 05 That's awesome.
20:46 Brian Preston? Well, give us, give us some feel on that too, because there's a sacrifice there. I mean, you're not funding your Roth for, for a year.
20:53 Speaker 03 That does feel.
20:53 Speaker 05 It's gonna hurt you more than it'll hurt me.
20:56 Speaker 03 That does feel kind of hard for me to do, I think. But I, ultimately, I think that is the best thing for us for sure. And, and seeing the numbers on that, that's, that's pretty awesome.
21:06 Speaker 06 It's doable. It's doable.
21:07 Speaker 03 Without changing any other habit even.
21:09 Speaker 06 That's right. It's not even about like cutting or shift. It's just about shifting where the dollar.
21:13 Brian Preston? And I want you to marinate on that, that regret of not being able to do a Roth for the year because that will keep you honest and disciplined. So you don't drag this behavior on too long. Cause you know, you always worry when you transition an asset or a stream. Cause you got the, you've automated your wealth building to a degree with all these hundred dollar a month. You know, every few days, a hundred dollars goes to this account, this account. I mean, that, that's commendable in the way that it's, it is creating that automatic for the people wealth building strategy. But the problem is we're about to shut that down. And if you're not scared, you know, and focus every effort to build up this cash reserves, but then flip all that, the switches back on as fast as possible, we're losing out on
21:57 Brian Preston? the most valuable resource in your wealth building journey, which is time. So that loss of one year is expensive and you should bear that, but I want you to just feel like you have a timer working against you so that you'll keep yourself honest and get back on track as fast as possible.
22:13 Speaker 03 I think we would want to get back on it as soon as possible.
22:16 Brian Preston? Good. Maybe faster. I wanted to feel like an itch, man. I need to get this thing back fired up.
22:21 Speaker 03 I'll be eating PB and J's for a while to get us back on track.
22:25 Brian Preston? It will probably speed you up and maybe you don't have to miss a full year because here's the cool thing with Roth IRAs as well. You get until April of the following year. So if maybe things lined up, you could be like, good news. Yes, we got the cash reserves funded and we even, maybe we could throw the kitchen sink at the first few months to go catch up last year's. I mean, there were opportunities to even catch up beyond.
22:49 Speaker 05 That sounds great.
22:50 Speaker 06 So you may be thinking, man, we just spend a lot of time talking about cash reserves and like some pretty early on stuff. And the reason we do is because it matters. That's the thing. You have to cover your risks before then you can start focusing on the fun and exciting stuff. But once you do that, then we get to think about the fun and exciting stuff. And so this is where we want to ask you guys some questions. And I'm actually going to direct this hand at you first. All right. When you think about your financial goals or y'all's financial goals as a household, what are they? We say that money's a tool all the time. What are the things you want your money? What are the things you want your money to allow you to do?
23:25 Speaker 05 Currently, we would love to buy a house.
23:27 Speaker 06 Okay.
23:27 Speaker 05 That is one of our primary goals. We've been renting since we got married. So that's kind of up on the docket right now. But then long-term in life, we talked about this yesterday. I think when we retire, because we only had about a year and a half before we had a baby come along, we didn't get to do all the things that we wanted to do in our marriage. We didn't get to travel. We didn't get to spend that intentional time with each other. We do spend intentional time, but we didn't get as much of it. Right. Right. Just in between all the sleepless nights. So when we retire, putting all that money away, we want to be able to not only set our girls up, but also we want to be able to do things as well. You know, when the girls are gone, sad day, but.
24:09 Speaker 05 We'll get back to that, just, just you and I. So buying a house along with later in our life, that money helping us be able to live retirement, you know, intentionally with each other. And then also if we want to move close to our grandkids, because we've seen the benefit of that. We live down the street from Daniel's parents and it's amazing. So doing all those fun things, taking the grandkids to Disney, taking us to Disney, maybe without the grandkids.
24:34 Speaker 06 I love it. Daniel, I think you'd added that.
24:36 Speaker 03 I agree. No, that's, that's pretty much it. I mean, she nailed it.
24:40 Speaker 06 So we have two, two main goals. We want to figure out how to buy a house and we want to save for financial independence. Those are the two goals that we really, really want to lean into. Now you said something, you said that you live close to grandparents. Does buying a house, will that change? Like, so you've been renting and the house you're renting right now, what, what's your current monthly rent that you guys pay?
25:02 Speaker 05 We pay a thousand.
25:03 Speaker 06 A thousand?
25:04 Speaker 05 That's it. We're very blessed, which is hard to walk away from.
25:09 Speaker 03 Very hard to walk.
25:09 Brian Preston? That sounds, is that below market even in Dothan, Alabama?
25:12 Speaker 05 Absolutely. Yes, absolutely.
25:14 Speaker 06 And so, okay, so a thousand dollars per month in rent in Dothan, Alabama. Give us an idea, what?
25:19 Brian Preston? Is that like a one bedroom studio? What is this?
25:21 Speaker 05 It's three bedrooms, three bedrooms.
25:23 Speaker 03 It's three bedroom, two bath.
25:25 Speaker 06 Okay. So obviously this is, sounds like a pretty sweet situation, very low rent for a very nice home. What's the desire? Like what's behind wanting to buy a house?
25:34 Speaker 05 So our rental home, even though it is plenty of space for us, it's hard to walk away from the price that we're renting. It's an older home. And I, I know beggars can't be choosers. I'm, I'm picky, I think. I, there's a sense of home that I would love for our family to have. I want a house for our girls to grow up in. And I mean, again, beggars can't be choosers. We can't be down, we can't just be looking for a house down the street from the in-laws, even though we love them. It's just a, a place to call our own. And we want to do this long-term. So when we buy a home, we want it to be, you know, 10, 15 years. It doesn't have to be large and beautiful, just a newer home and then also a home that we can call our own.
26:13 Brian Preston? You you have a ha- a rental house in in a school system. At some point, these kids are gonna go to school.
26:19 Speaker 05 Right.
26:20 Brian Preston? Is the is the school system good there? Are y'all planning to private school for the kids? What what's what's the? Because that housing, that's typically the first thing when you start looking at real estate.
26:30 Speaker 05 Mm hmm.
26:30 Brian Preston? People immediately go down. It's even on the Realtor websites.
26:33 Speaker 05 Right.
26:33 Brian Preston? What are the rankings of the schools in the area?
26:35 Speaker 05 Right.
26:36 Brian Preston? So I felt like that's probably a a good thing to kind of discuss as well.
26:39 Speaker 05 Yeah, I love where I teach. I love our school system. However, I think when we
26:42 Brian Preston? Is that in the same? Are you? Do you teach in the same school system?
26:45 Speaker 05 I do, yes, as they would go to school. But we've had conversations and we think we would gear more towards private school.
26:52 Brian Preston? Hmm.
26:52 Speaker 05 We think that that extra, you know, it is an extra cost for us. But we think it would be worth investing in for their education and their learning environment.
27:01 Brian Preston? Is that?
27:01 Speaker 05 Going forward.
27:02 Brian Preston? I I started to ask for more clarifying.
27:04 Speaker 05 It's okay.
27:05 Brian Preston? Sometimes I see people who jump into the private school train, middle school and high school.
27:10 Speaker 05 Mm hmm.
27:10 Brian Preston? Or they or they start K through 12 in their lifers. What what were y'all thinking the whole way? Are you thinking partially?
27:17 Speaker 05 We've, again, kind of ping pong back and forth. Um, I would love for our children to go to school with me. I would trust our school to take care of them. Um, I love our teachers. Uh, so maybe after sixth grade or maybe after fifth grade. Because our school right now is a K five school.
27:33 Brian Preston? You're an elementary school teacher.
27:34 Speaker 05 I am, yes.
27:35 Brian Preston? Perfect.
27:35 Speaker 06 Now, when I asked you about financial goals, you didn't throw private school out there.
27:38 Speaker 05 I forgot about that one.
27:39 Speaker 06 Oh.
27:40 Speaker 05 That's a big one.
27:41 Speaker 06 It's a big, seems like a big one, right? It seems like one, um, that, because because I think all of us, we have financial goals. But one of the things we have to do is recognize, uh, money is a tool.
27:50 Speaker 05 Mm hmm.
27:51 Speaker 06 But money is also a finite resource. We have to figure out, like, if we have multiple goals, oftentimes, we might not be able to do all of those goals. And so we have to prioritize, how important are these goals? How much? Like, so let's walk through. You said, okay, you want to buy a house. What's the timeline? Like, when you guys think about buying a house, when when do you want to be able to buy a house?
28:11 Brian Preston? I think more.
28:12 Speaker 03 In the most conservative range, probably five years.
28:15 Speaker 06 Five years. Okay. And just so I know, what's kind of like the prices of housing that you guys would be looking for around your area? Like, what's a reasonable price estimate?
28:26 Speaker 03 Probably about $300,000.
28:28 Speaker 05 I think that's the max.
28:30 Speaker 06 300? Okay. Well, that's great. If we use that as the max, anything below that will kind of be kind of be like gravy, right? And so when you think about the order of priorities, and I want you to prioritize, you've given us three goals. Buy a house, I'm gonna say financial independence, but travel and get to spend time together again, and then private school. In your order of priority, how would you prioritize those? Which goals are the most important? To which goals are the least important?
28:57 Speaker 05 Buying a home is at the top. Then I want to say, well, because we could go back and forth, the private school is not something that we're totally set on. We would love for them to attend, but we're also okay with sending them to the school where I teach. We would love that. So I think we could go back and forth on those. And then, I don't want to say at the bottom, but I mean, like, this is something that we'll do incrementally, saving for, you know, financial independence. So right there in the middle, I think, home, buying, sending our children, you know, the school system.
29:32 Speaker 06 So it sounds like what I'm hearing from you guys is buying a house is the number one goal, and then I'm gonna press you on this. You said private school is kind of like the two-ish, but then, but also financial independence, because that's going to be sort of incremental thing that we do. What if the decision to send your kids to private school actually impedes your ability to build towards financial independence, or actually pushes that timeline back? Is that a conversation that you guys have had with each other?
29:57 Speaker 03 A little bit here and there. I think that is, financially, we would love to do both, but ultimately, we don't want to clip our own wings. However, we also see the benefits of sending our kids to, you know, there's a lot of great private schools in the area, and I think some of the... Educational steps that they could take would really, you know, help them out in the future, too.
30:15 Brian Preston? But you just gave us a wishy washy answer. What's the reality of, because I, I will tell you, this is when I was going through the notes, I think it's important, first of all, what would private school cost per child?
30:28 Speaker 05 It's about this, it would probably be the same as we're paying for daycare right now. I can't think, I think-
30:35 Speaker 03 A little bit more, but it's, it's in the same vein.
30:36 Speaker 05 Yeah.
30:37 Speaker 03 It's probably about 800.
30:38 Brian Preston? So $10,000 per student?
30:42 Speaker 05 Yes, around 10,000, 10 to 12.
30:44 Brian Preston? When I was looking at y'all's notes, I was like, man, literally, if they say that school, private school is another number two, it is going to change the way your retirement looks like because you have, you only have this much in resources. You're in the messy middle. We can pull up the budget again. Y'all are kind of already pretty lean. I mean, you're, you're not wasteful with your money. You're very deliberate with it and that's something to be commended, but in the messy middle, you've now got to figure out what's the sacrifice.
31:13 Speaker 05 Right. I'm immediately thinking, I don't want to be selfish and just immediately say, you know what? Cut the, cut the investments, send the girls to school. But at the same time, I trust the public school system where I teach and, you know, that private school is just an extra, it's vigorous. And, you know, as a parent, I want that for my child. We see our four-year-old is very bright and I want her to be pushed. I want her to excel, but at the same time, I do want to be selfish. I don't want to be selfish, but I do at the same time.
31:42 Brian Preston? I don't like you using the word selfish because we've done so much content where I worry about parents, you know, I use the analogy, it's the reason that kids' education typically is step eight. The financial order of operations is, is just like what you get on the airplane and the flight attendant tells you, you've got to put your oxygen mask on before you put on the kids. How cruel is it as you go through your life, you prioritize only your children, only to tell them upon graduation from college, we're so happy for you. Make sure, make sure that you're successful with your career because I have put everything I have into you. So.
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33:06 Brian Preston? Strike it big so I can move down underneath you. All right, you know, because I said, which by the way, I love, just like you're talking about parents living down the street is great. It's awesome when it's optional.
33:17 Speaker 06 When it's a choice.
33:18 Brian Preston? When it's a choice, because then you get to celebrate it. But when it's required and it's kind of anticipated, or it's, it's just, I don't know that I think that that is selfish to make sure you save for yourself. Because I want to release you of that. Because I can sense, like, it feels selfish. I don't, I don't get selfishness from it at all.
33:39 Speaker 05 Okay.
33:40 Speaker 06 Well, let's put some actual numbers to it, right? So, but you said your first goal was buy a house. So let's talk about that first. I don't know if you've spent any time at moneyguy.com/resources, but we have an entire home buying calculator, an entire resource there that you can use to figure out home affordability. And one of the things that's unique about the Money Guy Show versus other financial shows out there is that we have some unique home buying rules. And I don't know if you guys are familiar with this, but since you are first time home buyers, these apply. One of those things is you want to make sure that whatever house you buy, you can see yourself being in that area, in that house, for at least five to seven years. So first question, if you were to buy a house in the next five years, do you feel confident you're going to stay in the area that you're in for the next five to seven?
34:20 Speaker 05 Absolutely.
34:21 Speaker 06 Awesome.
34:22 Brian Preston? I even heard Hannah say it's 10 to 15.
34:24 Speaker 06 There, we're there. So, big check for that one. Next, and this is the one that I think is a little interesting. We don't require 20% down for first time home buyers. A lot of people say 20% down, 20% down, 20% down. Well, in this housing market that we're in, where prices have gone up dramatically and interest rates are high, 20% is really, really hard. You save for it and it feels like the house keeps running away from you.
34:47 Brian Preston? Plus, we'd be hypocrites if we, we didn't borrow that, our first house, we didn't put down 20%.
34:52 Speaker 06 We didn't buy one together, but neither one of our first houses did we put down 20%. So we think that when it comes to buying a first time home, you might be able to put down only 3% or 5%. Have you guys worked through that math? Have you worked through that thought process?
35:06 Speaker 03 Somewhat, yeah, not completely fleshed out, but yes.
35:08 Speaker 06 And then when you do buy housing, our goal is we want to keep your total housing cost below 25% of your gross income, right? So that's what you gotta think about from an affordability metric. So you were great. You told us that to buy a house on the high end, because let's be conservative, it's going to cost us about $300,000. Well, that's what it looks like. All right. For a $300,000 house, if we're going to do a 3% down payment, we got to come up with $9,000. So immediately, one of the things that I'm thinking is, all right, we said we're going to pull $800 away from our ROSS and we're going to shift it to the high yield savings account. And one year in the future, we're going to have a fully funded, high yield emergency fund. Well, then the natural is I'm going to get back to funding the ROSS, but, but if there's not extra money, we got to figure out how we get to that 9,000 because you don't want to just pull all of your emergency fund
35:53 Speaker 06 because then you're right back to where you started. So our cash savings may have to increase even beyond. And that's where what you guys can figure out is, okay, is this something we put everything towards until we hit the 9,000? Or if a house is really five years away, maybe we do some to the ROSS and some to the down payment. You all have to figure out which one of those makes sense. We know that when we buy a house, there are going to be some closing costs embedded. So we said, okay, if just closing costs another 3%, that's another $9,000 that's going to go in. So with that, if we were to put 3% down and have to get a mortgage for the rest, and we assume a 6.5% interest rate on a 30-year mortgage, your monthly mortgage payment's going to be about $1,839. Let me pause there for a moment. Give me some, because you said rents a thousand.
36:37 Speaker 06 Give me some feedback there.
36:39 Speaker 03 That'll take some movement. I think that'll take, you know.
36:43 Speaker 05 We had always talked about, you know, if we're going to buy a house, we need to find a mortgage or we, we need to buy and I don't even know what the verbiage would be, but so that we didn't pay much over what we're renting right now. So it always seemed like.
36:56 Speaker 06 So if a thousand dollars is, and because by the way, with a mortgage, and maybe you guys don't know this, not only do you pay principal and interest on the mortgage, there are also other costs, like insurance and taxes. So if we factor those in, and the fact that you're not putting down 20%, you're going to have PMI on your mortgage payment as well, your total mortgage payment. Not just the principal and interest is actually going to be almost $2,300. So again, we're paying a thousand right now and to go buy that $300,000 house that you desire is going to cost about $2,300 a month. Give me some thoughts and feedback on that.
37:30 Speaker 03 Scary.
37:31 Speaker 05 Yeah.
37:31 Speaker 06 It's scary, right?
37:33 Speaker 05 Yeah.
37:33 Speaker 06 Uh, when you think about your budget right now and you think about additional $1,300 a month having to go towards housing, how do you reconcile that?
37:43 Speaker 03 Sounds like some cutting, some smashing.
37:45 Speaker 06 Well, that's one option, Brian. There's generally when it comes to making financial decisions, there's two levers we get to pull, right? What are those two levers?
37:52 Brian Preston? You can either cut your expenses to the bone. We, I've already told, we've looked at your, you guys are not, it's not like, oh, out there like dropping the money around. Y'all are, y'all are pretty lean.
38:06 Speaker 05 That makes me feel good.
38:07 Brian Preston? You're making good choices, but that means that we, there's another lever.
38:11 Speaker 05 Right.
38:12 Brian Preston? You have to make more money and, um, and that, look, you're a teacher. You sound like you love teaching. We all know anybody who goes into education.
38:20 Speaker 06 They do it for the money, obviously.
38:22 Speaker 05 Absolutely.
38:24 Brian Preston? It's not the high spend. Now, look, it does have a very good retirement though. I don't want to minimize that is that, that you do this long enough. I mean, my, I'm this, I'm the son of a teacher and the grandson of a teacher. So I've, I've, I've experienced that in my own life. Daniel, your career, what is, because it sounds like y'all both love your jobs.
38:44 Speaker 05 We do.
38:45 Brian Preston? What's the upward mobility there? Yeah. I mean, what, is there, is there a chance, is there's going to be something that happens over the next three to five years, you know, this five year window that y'all, you've given us, that your income prospects are going to balloon?
38:56 Speaker 03 I don't know about balloon, probably, probably not balloon. Like I said, we're, I work at a small business now. Um, we're, I think 20 full-time employees strong. So as far as upward mobility, there, there could be something like that. It would be more, that would probably be more of an investment in itself, actually, you know, potentially buying out the, the boss or something like that, maybe one day.
39:18 Speaker 06 That was not one of the financial goals listed.
39:20 Speaker 03 That's not necessarily, not, not a goal necessarily. Maybe, you know, there, there are certain things like that that could happen, but as far as ballooning, no, I, I don't, I don't know where the upward mobility could be.
39:31 Brian Preston? It sounds like you love your job. You're working for a small business. You love your job, but I'm seeing a lot of goals. But I've seen a lot of hard decisions. I mean, cause and then that's what and and the part of me that wants to say and more is cause and here I'm just gonna be, I'm gonna be transparent with you. I grew up in a house where we had more love than money. My parents were super happy and I've detailed it in the book that I've realized the poorest of times for my parents when my dad lost his job was actually some of my favorite childhood memories. So I want to first free you as parents to know you don't have to have money to make kids happy and create great children who are fruitful and do great things in the world. Money's not going to be the thing that creates the great kids.
40:15 Brian Preston? But if you grew up, and I know you come from pretty humble beginnings too, is that you start, I always felt like I had a little bit of a chip and I don't know if it's healthy or not, but I always wanted a little bit more because I saw how much my parents struggled from the financial stuff. So I had this, this, this push that I had to go figure out how I was going to make things happen. And so I, I want to challenge you because here's what I see when I looked at y'all's situation and I'm not trying to stir the pot because more likely your boss and everybody else is going to see this stuff too. But, but, but no, but, but you have a moment in time right now where you're living in housing that is below market.
40:56 Brian Preston? That takes risk down a little bit because it creates margin for you to make some decisions in your life that maybe are a little further out on the risk spectrum to make your life the and better. What's more, so I want to, I want to just put that, plant a seed there. I don't know really if we're putting fertilizer on it or if it's even fertile soil, but it is one of those things is because y'all are young, you're still young enough and I always encourage people, take risk while you're young because even if you reach failure, you're, you're young enough, you can recover without much consequences. It's, it's when people try to take huge risk when they're my age now, that my like you, you put, you did it all out of order, but y'all are in a moment in time.
41:40 Brian Preston? Um, and maybe this is even a discussion with your, with your current boss is that, you know, is how do we reach your goals, but also I've got. Family goals, because as an employer, I mean, we have lots of employees. I'm constantly trying to make sure I'm keeping a pulse on how happy are the spouses? How do I feel like this person is reaching, has a career path ahead of them? So they don't feel like they're just floundering in a job. I want them, I want everybody here to feel like they have a career. So I hate to be the one when you're in this happy life that is bearing so much fruit. But I do feel like I need to be a little bit of the anvil that says, are you challenging yourself enough? Because I don't see you cutting a lot of expenses. I just don't.
42:25 Brian Preston? So you either have to decide, I'm happy with public school. I may be happy in this rental house as long as I possibly can to maximize that moment. And if that, if those two things don't work together, you have to choose another option. Like what's the and? How do I get more? As I was driving in this morning and I was looking at your situation and I was like, man, I just feel like these guys need a catalyst for somebody to challenge to say, if you want more, you're going to have to go choose your struggle. And it's either now or it's later. Because you're going to have to make some hard decisions.
43:07 Speaker 06 Or you can reset your expectations. I mean, one of the things that we modeled here is what's it like buying a $300,000 home? Well, it's going to cost you about $1,300 more than what you're paying for rent right now. If you were to buy a $200,000 home, those numbers obviously change. They drop. And so one of the things would be resetting expectations of how do we pull the levers that actually matter and kind of remove the stuff that doesn't matter a ton? Because again, you guys are in a great spot and you're doing great things. And you're fairly normal in terms of, you know, we all think that the financial order of operations is like the straight line. I go from step one to step two, to step three, to step four, to step five. In reality, that's probably not the case.
43:52 Speaker 06 And in you guys, it's probably not going to be the case. Your financial order of operations may look a lot different. Different. You may be kind of like, you know, going to step one and then step two and step three and you're in step four. And before you get to go to step five, you may stay there for a while because you're trying to buy a house or you're saving up for another goal. And then you begin working. What you want to make sure you don't do is the decisions you make today, whether it's how much house you buy or sending your kids to private school, puts you in the financial circumstance that where you cannot continue to improve, where you cannot continue to move towards some of those longer term goals. And you just stay stuck in the present place that you're at. Does that make sense?
44:32 Speaker 03 Yeah. We feel like we're making as many right decisions as we possibly can.
44:36 Speaker 06 You're doing great. You really are doing good.
44:37 Speaker 03 We're thin with this. We were frugal with that. We try to be good stewards. We try to set ourselves up, our future selves up for success. And then we still, at the end of the month, we're like, I'm doing something wrong. Obviously, you know, something's wrong. But ultimately, I think.
44:49 Speaker 06 And tell me this is true. And it seems like no one else has that same struggle.
44:52 Speaker 03 Nobody.
44:53 Speaker 06 Right now, everyone else is doing fine.
44:54 Speaker 03 They're all killing it.
44:55 Speaker 06 Let me tell you, it's not true. The messy middle, it is a, it is a group. We have different struggles, right? But everyone, you're not alone in this. I think a lot of people, especially right now in this economic environment, in this circumstance, a lot of people are feeling that. So take it from us who get to talk to millions of people a year. You're not alone.
45:12 Brian Preston? Social media is the highlight reel. Nobody ever gives you the reel.
45:16 Speaker 05 I was gonna say, I probably, you, again, you said you could eat peanut butter and jelly sandwiches every day. I'm the one who, I don't put pressure, I don't think, but I'm the one, I play the keep up with the Joneses game. I'm like, oh, look at this house. It's so nice. We can do that. Here, we can cut this and this and this, add this. So I feel like that is, we've had that conversation of, oh, I want to buy a house. But also, that's me, me talking. We definitely, as a couple, we want to buy. But Daniel's also the one who kind of keeps me grounded. He's like, but what if we stayed? I'm like, I don't want to stay.
45:51 Speaker 06 But I love that you have that communication. You realize how healthy that is to be able to talk those things out as a couple.
45:56 Speaker 05 It has been an option. I just, you know, I've got it in my head. But I, I mean, like, 100% willing to let it go. We want to do what is best for what, you know, the goals that. We've set for each other, what we want to do for our family, but also what we want to do for our lives when we're, you know, when the girls are in college and it's just us again.
46:15 Speaker 03 Yep. And we've talked even, even on the way up here.
46:18 Speaker 05 Lots of conversations.
46:20 Speaker 03 You know, hey, what if, what if we even picked up music lessons in the summer? You know, what if you start teaching keyboard?
46:24 Speaker 06 How do you make more money?
46:25 Speaker 05 That's been a conversation too.
46:26 Speaker 03 Just little things like that.
46:27 Speaker 06 All right. Before I give you your homework, any questions you have for us, anything we didn't answer that you want to get our take on?
46:33 Speaker 03 We did hit on it a little bit, but as far as, you know, putting some of those accounts together. So, you know, the old 403B, the old 401K.
46:41 Speaker 06 Yeah.
46:41 Speaker 03 Best way to do that.
46:42 Speaker 06 So, one of the, one of the things that I put on the homework is consolidate retirement accounts. It's one of the very first things. You have the ability, assuming your current 401K is pretty good, you can actually roll your old 401K into your current 401K. It's not going to be a taxable event and then it's going to be housed in the same place. For your 403B, you can either leave it in the 403B structure, which is okay. Nothing inherently wrong with that. Or you could go to a custodian like Fidelity or Vanguard or Charles Schwab and open an IRA rollover. And you could roll the 403B into an IRA rollover, maybe the same place where your Roth IRAs are. And so that way it's all in one place. That way you can see it all. You can keep track of it. And it just makes it that much easier to know what you have going on. It's as easy as a phone call.
47:24 Speaker 06 You literally call the 403B, 403B provider, hey, I want to roll this over. They'll send you some paperwork. You'll fill it out. Easy peasy. Same thing on the 401K. Hey, I want to roll this over to this one, the last with information. You can knock it out. I bet you could get it all done in less than half an hour.
47:38 Brian Preston? And I'll throw out, Hannah, for you, a creative option is you might want to reach out to TRS because you're so young. And see what the, the buy-in, if you could buy to, because you taught in private education for two years. You, you could reach out to TRS and, and they, they do, now you'd have to do the math because it's not always a good deal. But it's at least an exercise to see if you could buy in, buy two years at your age and so many years out. It might not be, you, you might find that these things tie up nicely. And if you want to accelerate your ability to have that, because that's longevity protection as well. Having that good pension, if you know you're going to be there. For the long haul, but it's not always good math, but it's at least something to consider.
48:21 Speaker 03 Option. Cool.
48:22 Speaker 06 Awesome. So step one of homework, think about consolidating retirement accounts. That's an easy thing that you guys can do.
48:28 Brian Preston? Can I add one thing to that homework? The easy way, because I think you're longing for us to give the details and it'll help the audience. Go look at the internal expenses of all the different investments. See if they have index funds. If one does and one doesn't, that's going to tell you, because they're going to go hand in hand. The internal expenses, index funds, and then diversification options is all going to be the things that you're going to use as the metrics to help you kind of navigate and figure out which one is better than the other.
48:56 Speaker 06 I love it. Next, you guys should start doing an annual net worth statement. You don't have to do it on 1231. That's when my wife and I do ours, but every year, hey, this is everything that we own. This is everything we owe and allows us to see, are the places we're putting our money aligning with the things that we place value on? We actually have a great template that you can use at moneyguy.com/resources. If you want a free template or if you want a tool, the whole dashboard, I'm going to learn dot moneyguy.com and check that out.
49:21 Brian Preston? That's the one we use.
49:23 Speaker 06 That is the one that we use. Third piece of homework, we think it would probably make a lot of sense. Since you are in step four, but you're kind of dabbling in step five, consider redirecting your Roth IRA contributions from the Roth into your high own savings account.
49:36 Brian Preston? Just for a little bit of time.
49:37 Speaker 06 So that you can build up your emergency fund. Feel the itch. So you can build up your emergency fund to $15,000, a full three months of living expenses.
49:45 Brian Preston? We're still in the beginning part of this year, so if you do it quick enough, maybe we even get a little catchy up at the next year.
49:52 Speaker 06 The big piece of homework for you guys is I think you should sit down and rethink your goals and priorities. Hey, what are the things that really matter to us the most? We really want to own a home. Do we really want to own a $300,000 home or might we be okay owning a $200,000 home? We really want to send our kids to private school, but does it have to be when they start in kindergarten? Or could we figure out how to space that out and prioritize what those goals are? Once you have those down, then you can do the math to figure out, okay, well, how much are each of these goals going to cost? And can we accomplish them based on our current income? And if we can't, how do we have that hard decision around, okay, we can either spend less money. Money, get the expenses down, which are already pretty lean, or how can we create more income? Can we do other things on the side? Can we increase our current vocation? What can
50:36 Speaker 06 we do to begin making more money so that we have a bigger shovel to be able to fund all of these resources?
50:42 Brian Preston? The big part of what makes the financial order of operations work is that everything in life is just an incremental decision. You know, if I make this decision, it's going to create this result. If I make this one, you guys have a lot, you gave us a lot. But I would just really, as a couple, you're already, you're fun to be with, you communicate well together. You'll just make sure you're now just using those resources, those talents to actually create the plan of the, what's the incremental decisions we need to be making? I like to say, here's a cleaner way to say it. What small decision are you going to make today to build that great, big, beautiful tomorrow? Daniel, and a thank you for coming on Making a Millionaire. Thank you for being so transparent.
51:25 Brian Preston? I mean, this was, this is not easy because it's not like we gave you all roses of how awesome your decisions are. Y'all got some hard work ahead of you. And but that's, that's also the sweetness of life. Hard decisions you make now can bear tremendous fruit later. And Bo, that's also a great price segue. If anybody else wants to know what hard decisions, or even the decisions that will bear fruit in their life, how can they join and be a part of Making a Millionaire?
51:51 Speaker 06 Yeah, if you'd like to be a guest on Making a Millionaire, you can go to moneyguy.com/apply. Or if you'd like to access any of the resources we shared on today's show, you can go to moneyguy.com/resources.
52:03 Brian Preston? Well, guys, I'm your host, Brian Preston, Mr. Bo Hanson, Money Guy team, out.
52:08 Speaker 06 Making a Millionaire is hosted by Brian Preston and Bo Hanson. Brian and Bo are partners at 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.
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