Home Prices Are FALLING, Mortgage Rates Are RISING

Home prices are falling in parts of the U. S. housing market, but does that mean 2026 is finally a good time to buy a house? We break down falling home prices, mortgage rates, housing inventory, first-time homebuyer affordability, and why new construction can now cost less than existing homes. You’ll also learn what today’s changing real estate market means for buyers and sellers, how to know how much house you can afford, and why our 3/5/25 home-buying rule can help keep housing from squeezing the rest of your financial life. ⁠⁠⁠⁠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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• 1:06Brian Preston?

  Mortgage rates are up, home prices are down. What do you need to know?

• 1:10Speaker 03

  Brent, I am so excited about this because I think, I think this is going to be a little glimmer of hope for a lot of people that have been overwhelmed and disheartened and frustrated with how difficult it has been to get on the home ownership side of the housing equation.

• 1:29Brian Preston?

  Before we get into this important stuff, I do think it's important that we make sure we remind everybody, guys, we're doing our millionaire survey right now. Make sure you get in there. We only have what, another week left on this? So go check it out and what's, what's the website on that, Reeves?

• 1:45Speaker 04

  Moneyguy.com/survey.

• 1:47Speaker 03

  That's Moneyguy.com/survey.

• 1:50Brian Preston?

  Now let's jump into what, what I think is really worth talking about. Bo, there is a slide that just blows my mind. If we could pull that up. Look at this, guys, you know, forever it has seemed like, and this makes common sense to me, is that new homes typically cost more than existing homes because, you know, when you buy a new home, you know, hey, nobody's poured grease down this sink, you know, it's, it's, it's one of those, seriously, you know, nobody's dog has gone over here and peed on this carpet or in this corner right here. There are definitely things about that we're in the, and historically, we're willing to pay a premium for that new house, but I want you to see something here.

• 2:30Brian Preston?

  Look on this chart and you'll see here in the last few months now, because of how bad the real estate market is, and we'll get into why this market is so bad, home builders have realized, hey, we either need to, we need to start giving incentives, not only on the interest rates, but we need to start dropping prices so we can move inventory. And you have this weird dynamic now where new home prices are actually less than existing home prices. So you're trying to figure out, what does this mean?

• 3:03Speaker 03

  Yeah. If you're curious, the median sales for existing homes has dropped now to $429,000 and the median sales price for new homes is down just under about 411,000. So if you look at the numbers, new home prices have dropped about 15% over the past four years. So we've seen sort of a steady, albeit not incredibly fast, but somewhat steady decline. And according to Realtor, the national median asking price fell for the 10th consecutive month in August. So we've seen a month after month after month after month of houses beginning to fall, of houses beginning to go down. Now, I don't want to over, overstate this because housing is still expensive and it's

• 3:45Speaker 03

  still difficult. It's not like we're in a moment where all of a sudden housing affordability is way, way, way, way up, but I do think these are glimmers of hope. I do think that these are, are things that if you are in the market or you are someone who's thinking about buying, thinking about doing this, that your ears should perhaps be perking up because maybe there are some things that you should begin paying attention to.

• 4:05Brian Preston?

  Well, and also a lot of you might be looking at this chart and just as much awe as me and you go, does this just mean that we're in this new, you know, paradigm where existing home prices are going to be more than new? No, we, no, we're just in a place where I think that there is a, and we're going to get into this in a minute, there's a lot of reluctance for your, your, your sellers to adjust to the new norm of what's going on, the reality of the world. And we're going to give you all the answers so you know what to do to, to really take advantage of this marketplace as much as you can.

• 4:39Speaker 03

  So let's talk about what's actually driving home prices right now. What's the thing that's causing them to move? And number one, we think is that there's actually a growing inventory of homes available in the market across the country. We're starting to now see that inventory begin to catch up with demand that existed as a lot of people were beginning to relocate after COVID, after the pandemic. And it's been this game of catch-up that's now finally starting to get there.

• 5:09Brian Preston?

  Well, we had all these, the huge, huge relocations. We had all these, you know, a lot of home building got stagnated in a lot of ways to not keep up with demand. So you got to a point that in 2022, we got to home inventories were less than 400,000. Now, as of August of 2026, there are now more than 1.14 million active listings. So, and I'm not saying that we have a like, inventory is at all time highs from like, if you go look at all history, but it is definitely, you've seen where we're started catching up in a lot of ways and you're starting to see that impact pricing.

• 5:48Speaker 03

  And interestingly, US home sellers now outnumber buyers by a little over 560,000 and that's a 58% gap. It's very, very different than we have seen in recent memory. So I think it would not be too bold or too aggressive to say that if you're going to name the type of market this is right now, in the moment that we are in presently, I think even with expensive homes, I think it's a buyer's market right now.

• 6:18Brian Preston?

  Yeah, definitely a buyer's market, but, but with an asterisk on it. But I do, before we move on, because I just, I like everybody to take in the, breathe in deep the history of what you're looking at when, because when you see charts like this, this is what I've been telling you guys is that a lot of, a lot of times we have what's called recency bias. We go through a market dynamic and we just assume what happened last year will happen again, but we've gone through some crazy historic stuff and sometimes you get so numb to just how big these movements are. Look at what happened pandemic from 2020 to 2023. Do you see the spike of buyers?

• 6:56Speaker 03

  Yep.

• 6:57Brian Preston?

  I mean, the, the separation from sellers to buyers, no wonder most people's homes appreciated greater than 50% is because you just got a distortion in the marketplace. Well, because of that distortion, I feel like, and we still don't know where this all goes, but you can see we're getting back to the healing process. Look at the number of sellers versus buyers. This is going to take a period of time to work through the system when you have crazy distortions like this.

• 7:25Speaker 03

  Yeah, we're talking about, okay, what are the things, what are the things impacting home prices? Right now, I think the second one is stubbornly high interest rates are creating an environment where sellers are not as easily able to sell their homes as they have been since hitting historic lows in 2022. Mortgage rates have now climbed and are pushing close to 7% for a 30-year fixed mortgage. 7% is not historically a low mortgage rate for home buyers.

• 7:58Brian Preston?

  Well, look, this is the thing. I think a lot of us out there are pretty frustrated. You, you've got the 7% mortgage rate, but you also have the crazy high prices. I mean, because even on the earlier chart, existing home prices, you're like crud. I mean, this is just yuck. I mean, you hold, you, you have to hold your, your nose whichever way you're going with this transaction because it just, the, the high interest rates plus what's going on with pricing, it's just, it's, it's just not great.

• 8:29Speaker 03

  It's crushed affordability and as a result now, homes are sitting for longer currently around 60 days and pending home sales are at some of their lowest levels in history. In July, pending home sales of existing homes dropped to the second lowest mark on record. So right now, again, this is something where sellers are having a harder time selling their homes, which I think is creating an environment for buyers that are positioned well to likely be able to capitalize on that.

• 8:59Brian Preston?

  And you said, and I think it's worth an echo because it is the third reason, is that home affordability, it just stinks. I mean, and look, usually when we try to do these Q and A shows, we, I always like to have one shock and awe stat to show you guys. If we can find a really good chart to kind of give you a teachable moment out of, this one is such a dynamic topic that I feel like every one of these three points has a chart that you're just like, how does your jaw not hit the floor when you see this? And the next one is just the housing affordability. If you look at what the Federal Reserve, they track this. And if you look at what the median income is, and really if you're thinking

• 9:38Brian Preston?

  about in terms of affordability, is it greater than 30% of your median income or is it less than 30%? If it's less than 30% compared to, to median income, then it's somewhat of an affordable period. And you can see that all the way from really 2009 to, to the, the beginning of the pandemic.

• 9:59Speaker 03

  Been fairly aligned.

• 10:00Brian Preston?

  You could, you could say, hey, affordability of housing was, was in, you know, in a, in a pretty good place, but then post pandemic, really from 2021 on that 2022 spike, you can see now we've got separation to where as a percentage of income, housing affordability just, it's in the cellar. It stinks.

• 10:19Speaker 03

  And as a result, there are fewer first time home buyers right now than ever before. The ones who end up do actually buy, do end up buying a home are taking a lot longer to do it. When you look at the numbers, again, this is according to the National Association of Realtors, the typical age of a first time home buyer, not just a home purchase, but one buying their very first home, has climbed to a high of 40 years old. So there are less people able to move on homes and they're having to wait longer to do it because affordability is so difficult right now.

• 10:52Brian Preston?

  So let's bring this all together. What does this all mean? And look, we live in a society now where our media is always trying to put us on high alert because they know that they get your ears, they get your eyes. So, you know, the easy thing to say is, oh my God, this is going to be something that is going to be a, a, a situation where housing prices are going to get crushed. Everybody's going to lose 20, 30% overnight, but I'm here to tell you, I think it's much more nuanced than that. Yes, this is a buyer's market. I stand by that fact that we shared earlier, but you just need to know the nature of real estate by itself is that this it's not a

• 11:34Brian Preston?

  fast-moving marketplace. It's not like the the stock market where we're used to what's called V-shaped recoveries, meaning that markets get overheated, they get crushed, you get into bear market status, and then you get that V-shaped recovery where it comes up. Real estate is so much slower moving is because a lot of people are going to be anchored to their prices. I mean, because think of how many people, we see content all the time where people are like, I'm a millionaire. And you're like, okay, you're a millionaire. How are you a millionaire? And they say, well, look at my equity in my house.

• 12:06Speaker 03

  I bought my house in 2020.

• 12:07Brian Preston?

  You're like, are you a millionaire? Because you know, just because on paper, your house, you bought it for $500,000, $600,000, and now it's worth $1 million. Yes, on paper, you have a lot of equity. But you know, I got caught in this, and this is why education sometimes can be very expensive for people, is because I got caught up in this too. You know, pre 2000, I had a house that on paper was worth a lot of money. And then I had a home equity line instead of cash reserves. I was like, I'm loaded. And then we saw trees don't grow to heaven. And you know, and all the adages that, you know, God didn't make any more, you know, land. So real estate is always going to go up. We have learned that that that might not be the case, especially

• 12:51Brian Preston?

  when you have a distortion in the marketplace. But what I'm here to tell you is that we are in an adjustment period right now. But it doesn't mean that you have to get in a hurry to find your answer. I do think that now let's break this into segments. Let's talk about sellers. Look, if you're trying to sell a house in this market right now, you better be honest with looking at what that house is worth. Because if you're anchored to what Zillow told you a year and a half ago, you're probably going to have your heart broken a little bit. I have this going on, even in my own neighborhood, is because a house across the street that had a home gym, swimming pool, golf simulator, it went under market, it went under contract like that. But

• 13:33Brian Preston?

  a person up the street who has a bigger home was thinking, oh, my gosh, I'm going to make a gazillion dollars because this house sold. And their house has been sitting for weeks on weeks, going on months, because they just assumed that all houses are going to be snapped up. No, it's going to matter. Your location is going to matter, the type of house, the features, all those things matter. So if you're a seller, you better sharpen the pencil, make sure it's a really good price, and it's with the market. Because this is not one where you just say, let's see if we can get it. If you're a buyer, don't get in a hurry. You don't have to. I think that a lot of this, you know, look, I know a person that y'all all know, we trade techs, he's doing an upgrade right now. If you're a person that's looking at, you've been sitting

• 14:17Brian Preston?

  on the sidelines, you have lots of capital, probably not a bad time to upgrade or start looking at the marketplace with all this inventory. If you're looking to build and you have capital, you know, lumber costs are in the cellar right now. It's because there's so little demand on these type of things, you're starting to see that price impact. But don't feel like you have to get in a hurry. I feel like so many things in the news cycle is like, react, get scared. No, this is going to be a slow correction process, but you can start choosing your shots. You can start looking and paying attention, but you're going to have to measure twice, cut once, because the math is still going to stink because of these high interest rates.

• 14:56Speaker 03

  And if you are someone who is a buyer, if that is the side of the equation you're on, we want you to make that decision, take a little bit longer. Maybe it's the slower market gives you a better choice to do the analysis. And we've got tools available for you. You can go out to moneyguy.com/resources, then check out our home buying calculators. That way you can make sure, okay, is this home that I'm buying, even though rates are still high, even though prices are still elevated, maybe they've come down a touch, but still elevated, am I going to make sure that I'm buying a house that's going to make sense for me long term? And I'm not going to get myself in a situation where I'm house-rich and life-poor. Go check out the calculator, make sure you're doing that. And when you buy a home, make sure you subscribe

• 15:39Speaker 03

  to our 3-5-25 rule, where we want you to put, if it's your very first time home, you don't have to put 3% down. You don't have to put 20% down, so long as you're going to be in that home for at least five years, and your total housing expenses don't exceed 25% of your gross income. If you can follow those rules and stay inside those confines, it'll prevent you from getting too far out over your skis.

• 16:03Brian Preston?

  During the this big run-up in housing, when we had low inventory numbers, it was not uncommon. You had to make yourself stand out in the marketplace. You were waiving inspections. You were waiving appraisals. I'm so happy we're back to, it's not normal. This is still a weird, distorted market, but at least the common sense that you have the time, that's what I'm telling you, you don't have to get in a hurry necessarily, because now you can. Go do the full inspections. Go make sure that this house is not covered in mold, has water issues, has termites. Do all the things to protect yourself, because this is a big, big purchase. But then also, you now

• 16:44Brian Preston?

  have the privilege or luxury or opportunity that appraisals will matter again, especially with what's going on. So so make sure you're building all that into your due diligence period. You don't have to get in a hurry and waive your rights or waive your, you know, all the things that typically go in this transaction, is because this is such a big thing. Slow down, make the right decision, use our calculators, go to our checklist, go to moneyguy.com/resources, because a lot of you, I remember the first time I showed up for the first house I ever bought, I showed up with a checkbook. And I'll never forget that real estate agent, he looked across the table, and he was like, did you bring, we don't have funds for the closing. I was like,

• 17:26Brian Preston?

  I got a checkbook. He's like, I'm sure he was thinking bless his heart. Because this is all the things, if you don't know what you don't know, we're going to try to load you up so you can make this complicated decision with at least the knowledge to make the variables work in your favor. Because I'd rather you be an educated consumer, instead of just letting it happen to you. Because that's like most things in life, the more you know about the process, the more you know about the transaction, the better and more empowered you will be.

• 17:56Speaker 03

  I love that. The the more you know about, the more you don't know, the more empowered you can be. It's why we love that we get to do this. It's why every single Tuesday at 10:00 a.m. We get to sit in these chairs and answer questions that you care about, speak to the things that you're curious about. So if you have a question, you want to get our take on, we have the team out in the wings collecting your questions right now. So make sure you get them in the chat so that we can help you not know less things that you don't know about.

• 18:28Brian Preston?

  Yeah, no, you, what's funny, I was trying to figure out if it was a circular reference, when you said, know the things you don't know about. I was like, is that even possible? But I was like, I think I pulled it off.

• 18:39Speaker 03

  That's what we do here. That's, and with that, created by Director Rebe, I'm going to throw it over to you.

• 18:44Speaker 04

  With that, first up, don't forget to take our Financial Mutants survey. Like Brian said, go to moneyguy.com/survey. Why do you want to take it? Oh, it's just going to inform what we create and talk about on the show for the next year. That's all. No big deal. Also, we're going to have two specific episodes releasing, sharing and unpacking the survey data, comparing it to the average American, et cetera, et cetera, et cetera. And we really want your voice and your situation and where you are to be a part of that and to impact the type of content we're going to create. So that's the why. All it takes is a few minutes of your time, go to moneyguy.com/survey. We would love for you to be a part of that. And I'm pushing

• 19:26Speaker 04

  this because we only have one more week that this survey will be open. Do you have something to say, Brian?

• 19:32Brian Preston?

  No, no, and I wasn't trying to interrupt. Yes, yes. I just get excited and realize, I'm only two weeks back from vacation, so I haven't gotten good at this yet. But it is one of those things where I'm listening to like a relationship book right now. And it's funny is that they're basing a lot of the advice in here.

• 19:48Speaker 03

  Is it how to win friends and influence people?

• 19:50Brian Preston?

  We're not going to talk about what the title of the book is. But but but a lot of the surveys had 1,200 participants in it that they're doing. And what I think, I mean, you know, I know Ramsey and them have talked about they're doing the world's biggest, they always do that, talk about, you realize our audience is big enough, and you guys are part of something, is that we are literally, we get enough of your input. I think this is some of the biggest populations that are sharing their knowledge. And the fact that we get to create teachable information off of this, just warms, the educator heart is just so warmed up by this, is because remember, this whole journey started when I read in the in the late 90s,

• 20:30Brian Preston?

  The Millionaire Next Door. And you think about what Danko and Dr. Stanley did, is just amazing. And now if we get to carry that legacy forward by you guys filling out the survey so that we can create content that lets the next generation know, or people who are trying to figure out how money works, that's powerful stuff.

• 20:49Speaker 03

  Love it.

• 20:49Speaker 04

  Love it. Moneyguy.com/survey to be a part. With that, let's dive into some questions. I've got a couple home buying questions first to go with the topic, and then we'll dive into some other financial topics. First one's from Devo6912. He says, what are the Money Guide team's thoughts on buying a quote unquote, good enough house and investing more versus buying in a nicer area and hoping for levered appreciation, but having less money to invest? How do you think through weighing all of these options?

• 21:21Speaker 03

  Well, I think it's, I think the second one is easier to justify. Oh, I'm gonna buy the nicer house because it's gonna be an investment. It's gonna be a better opportunity. And while that may or may not be true, what I would try to do is, Devo, I try to strip you down to the why behind your decisions. What are the things when it comes to housing that really, really matters to you? When it comes to housing, I really want to be close to my job so that I have a short commute. I really want to be in a good school system so that my kids, I really want to have a yard. I really want to be proximate to the gym that I, whatever those things are, I would base my housing decisions more on those things

• 21:58Speaker 03

  that are gonna have a truer impact on your level of happiness, level of day-to-day satisfaction than I would on strictly the financial metrics. Like, oh, I'm gonna buy this house because it might appreciate more. In our minds, while primary residences can go up in value and they can increase your wealth, and they certainly have done that for the past couple of years, at the end of the day, they're use assets. And they should be treated as such. What is the best use of this asset in my life? And which house is going to allow me to accomplish that goal? I would let that be the driver of my decision-making, not strictly, okay, which house is gonna appreciate more?

• 22:39Speaker 03

  And because you can buy the greatest house in the world, in the best neighborhood in the world, that's gonna appreciate more than any other house in the world. But if it doesn't match the life that you're trying to live, you know, close to schools you want to be, and the people you want to be, and the community you want to be, and then you're not gonna be happy there. So I would think about it from that standpoint.

• 22:58Brian Preston?

  What house purchase is gonna give you the highest quality of life? And Bo just gave you all the, he gave a lot there. Because a lot of times, it's the school system that's in there. I would also add, what's the neighbors gonna be like? Because that's who you're gonna be hanging out with, that's who you go on vacation with, that's who your kids are gonna play with their kids. So highest quality of life. There's an adage that kind of just drives me crazy. Because forever, you heard people say, hey, go buy the smallest, most affordable house, and cheapest house on the nicest street you can. And that on financially, that sounds like a great idea. If you, if you go and buy a $400,000 house when all your neighbors live, or $700,000, $800,000 homes,

• 23:42Brian Preston?

  yeah, your house probably is gonna appreciate more because it's more affordable. But it's back to the highest quality of life. If you're broke as a joke because you stretched as much as you could to get in this house, and all your neighbors, you know, they're going on vacation, they're traveling because maybe they're not as stretched as you, and you feel poor all the time, or you feel like you don't belong, what's that gonna do to your personality? And what's that gonna do to your happiness factor?

• 24:07Speaker 03

  It's gonna create a recipe for trying to keep up with the Joneses.

• 24:10Brian Preston?

  You know, there's so much happiness research that if you are the most successful out of your, the group you hang out with, your happiness gets skyrocketed. Because the people you're pacing yourself with, you feel really comfortable with yourself. They do this in education, too. That's why it's always amazing, everybody always wants to go to these Ivy League schools. You're, you're the valedictorian from your, you know, your small town. You go to this, this Ivy League where everybody else is a valedictorian. You all of a sudden feel like you're lesser than, more than likely. No, everything in life, you have to really take, zoom out and get true perspective. Make your, put yourself in a situation where you get to be the best version of yourself, not because you, you feel like you're lesser than, or you've put yourself. Now, look, I like pacing myself.

• 24:55Brian Preston?

  I've always tried to put, live around people that morally I like being with, that, you know, I feel like have good behaviors, that are a lot of fun to be with. But I also try to be very perspective on what is this house going to do for me? And so I know, I want Bo to give the kind of the financial, then I want to give you kind of the uncle's, you know, wisdom there on, don't let this thing, it's not going to, it's not gonna be just a financial engine. Because I have had neighbors, like, our houses have gone up in value where I live. And it's kind of unique, because in Georgia, I was like, I don't even think you can make money. And South, South Atlanta doesn't go, real estate didn't go up when all the houses I owned in South Atlanta moved to Nashville. And like, oh, this is what it's like to actually have an appreciating asset.

• 25:39Brian Preston?

  And that was just always a sad thing. I think we just had some bad timing on our houses in South Atlanta, too. But it is one of those things where I had a neighbor who doesn't understand investing. And he was like, I think I need to upgrade my house so I can get more appreciation, because we could make even more if this house was at this purchase price. And I was like, you realize, a house is just a use asset, you know? Because at some point, you're gonna want to live in a house in retirement. It's better if you have your army of dollar bills and your Roth IRAs, your 401Ks, your brokerage accounts, because that money you can consume or let it grow. And so you don't have to work so much with your back, your brain in your hands. Whereas your house, you have to make some hard decisions. And, you know, things that create unhappiness for me is moving.

• 26:24Brian Preston?

  Because I've, I told my wife, even though we live on a little tiny postage stamp in the valley of the country music stars, she's gonna have to put me on that and bury me in that ditch in the backyard, because I don't want to move again.

• 26:35Speaker 03

  I thought we were putting you on set.

• 26:37Brian Preston?

  Oh, yeah, that's right. I'm Han Solo in it. I'm Han Solo in it.

• 26:40Speaker 03

  Yeah, there we go.

• 26:42Brian Preston?

  We're gonna make me like Han Solo, where I'm frozen, you know, and recorded, you know, right over there in the corner.

• 26:49Speaker 03

  I love that.

• 26:50Speaker 04

  I like that idea better.

• 26:51Brian Preston?

  I feel like we went way all over the place on that answer.

• 26:54Speaker 04

  No, it was good thoughts.

• 26:55Brian Preston?

  We're gonna get to three questions on today's Q and A.

• 26:57Speaker 04

  Devo6912, thank you for the question. And if you would like a Tumblr, if you don't have one.

• 27:03Brian Preston?

  How, Devo surely has a.

• 27:05Speaker 04

  I feel like you do.

• 27:05Brian Preston?

  They have to have a Tumblr.

• 27:07Speaker 04

  If you don't have one, email [email protected], because it is Tumblr day.

• 27:12Brian Preston?

  By the way, we found out PJ came by. You know, a lot of you guys were mad because we had a lot of questions from PJ.

• 27:18Speaker 04

  We did like three.

• 27:20Brian Preston?

  And I found out, because I was like, surely, you know, do we, PJ did not have a Tumblr. So even though he was taking flak from the audience that we always take his questions.

• 27:30Speaker 03

  Never on a Tumblr day.

• 27:31Brian Preston?

  He never, he never had a Tumblr. So maybe I could be wrong about Devo, too.

• 27:35Speaker 04

  That's why, like, yeah, my memory, we give a lot of Tumblers away, so I just like to give a caveat. All right, next question is from Justin L. It says, with home prices fluctuating and potentially more change to come, how should existing homeowners factor this into their home value on their net worth statements?

• 27:54Speaker 03

  Well, this is, this is.

• 27:56Brian Preston?

  We get in trouble, people get mad at us about this.

• 27:58Speaker 03

  This is one of the reasons why.

• 27:59Speaker 04

  Fight, well, not you guys, I guess you guys are one team.

• 28:01Speaker 03

  This is one of the reasons why, on our net worth statements, we both like to value our homes at price we paid plus improvements. Like, if you do some big capital renovation or something, you can add that in there. And what it does is it removes all the funky business from you being like, oh, my net worth is way up. Or, oh, my net worth went way down, or, oh, this is a great year. Especially if you're not someone who's in the market to sell your home and actually turn that into wealth. Like, my house gone up in value a ton, but I'm not selling it. I'm not going anywhere. It doesn't matter that that increased in value. So in my net worth statement, I'm just gonna list it at cost. And then at some point in the future, when I end up selling it for more than what I paid for it, that's when I'll get to recognize that price appreciation on my net worth statement.

• 28:46Speaker 03

  In my mind, unless I'm gonna turn it into usable capital tomorrow, there's no value in having that phantom appreciation on my net worth statement.

• 28:54Brian Preston?

  The accounting term is lower of cost or market. And because that's what you're doing, is your cost of what you paid, plus any additions. It just, it's a use asset, so it keeps those distortions. Because there's way too many people that let the perceived appreciation of their house, or the phantom appreciation of their house, then impact their behavior, thinking that they're millionaires on paper, but they didn't actually start building assets, army of dollars, outside of the house they lived in. And that's not the, what you want to base your retirement off of. Now, look, if you are, maybe you, you know, there's a lot of people that their house has appreciated.

• 29:32Brian Preston?

  When you move to the lower cost of area, or you downsize, voila, that money will show up on your net worth statement. So it's not like we're telling you to, to let that money disappear. And I think it's just keeping you a little more sober and honest about what you have in usable, workable assets, so that you can own your time that much sooner.

• 29:53Speaker 03

  Yep.

• 29:55Speaker 04

  Love it. Justin, if you would like a Tumblr, just email winner@moneyguy.

• 29:59Brian Preston?

  People howl about that answer.

• 30:00Speaker 03

  Your, your house has gone up a ton in value since you bought it. Do you, what do you value yours at?

• 30:05Speaker 04

  Just what I bought it for.

• 30:06Speaker 03

  And what you paid for it, right? Like.

• 30:08Brian Preston?

  But, but you watch, we'll get some comments on that one. Because people are like, I like my, I like seeing what my house is worth on there. And I'm like, all right.

• 30:15Speaker 04

  And look, we. Because I will say, it's gone up a ton in value, but it has also like, come a little bit down.

• 30:20Speaker 03

  Right?

• 30:21Speaker 04

  So I, you don't know what's gonna happen.

• 30:22Speaker 03

  Yep.

• 30:24Speaker 04

  So I'm glad I didn't put it at that peak price.

• 30:26Speaker 03

  If your house goes up $50,000 in a year, but you didn't save any money? You know, I don't want my net worth to go up by $50,000 just because my house, just because Zilla said my house.

• 30:37Speaker 04

  Yeah.

• 30:38Speaker 03

  I want my net worth to reflect the behavioral things I'm doing, how much I'm putting in, how much I'm investing, how much I'm paying down debt. I want those things to be reflected, not, you know, this use asset that goes up or down.

• 30:51Speaker 04

  I really relate to it as a use asset. Like, I'm not planning to sell it.

• 30:54Speaker 03

  No.

• 30:55Speaker 04

  I have to have a place to live. So, like, yeah, I'm not getting that money for a very long time.

• 31:00Speaker 03

  Yeah, that's it.

• 31:01Speaker 04

  And who knows what that's gonna look like? So, yeah, no, I like the way you guys do it personally.

• 31:07Speaker 04

  All right, next question is from SkillSnaps H5W. It says, hey, Money Guy, if my Roth IRA is fully funded and I get my employer match and I have no debt, can I contribute to a taxable brokerage? What's the best way to invest in order to access funds before I retire? I'm 26 years old, so this is a young.

• 31:29Brian Preston?

  That is awesome.

• 31:30Speaker 04

  Young person, doing really well.

• 31:32Brian Preston?

  Oh, SkillSnaps, got some skills, obviously, and good income.

• 31:36Speaker 04

  Is he being kind of foo-ish, though? Like, what do you have to say about this?

• 31:39Speaker 03

  Yeah, I don't, I don't know, I don't know the income here, right? Well, I don't, how'd you get, where'd you get his income from? How'd you get that?

• 31:46Brian Preston?

  Well, just because if you can fully fund your Roth IRA, if you, you don't, you know, you don't, and he says, I get my employer match, no debt, can I contribute to my taxable? Look, I'm just saying, he has enough money that he's trying to figure out. He's on step six. He's trying to figure out.

• 32:02Speaker 03

  That's what I was gonna say. I think that one of the things I'd investigate is, am I fully done with step five? Have I done, am I able to contribute to a health savings account to do that? And if not.

• 32:11Brian Preston?

  I'm assuming he has emergency reserves. Maybe I shouldn't assume, because you know what assuming does?

• 32:15Speaker 03

  What's it do?

• 32:16Brian Preston?

  You know, you and me?

• 32:20Speaker 03

  Yeah, so I would, I would think that you have access to a retirement plan because you get the employer match. I would consider, man, is there a really exciting tax incentive for me contributing to my employer sponsored plan inside of step six? Whether that be on the pre-tax side, pre-tax side and getting a current year tax benefit, or if I'm in a situation where Roth makes sense, I could do the Roth 401k.

• 32:41Brian Preston?

  Why would you not want more Roth IRA, I mean Roth 401k?

• 32:44Speaker 03

  Well, we don't know his income. That was the whole point I was making. I don't know where he's at. I said, because he might be living in a high tax state, even though he's below the Roth IRA income threshold, he didn't say he was doing backdoor, not backdoor.

• 32:52Brian Preston?

  I see what you're saying.

• 32:53Speaker 03

  That's what I'm saying. I don't know his income, but it seems likely.

• 32:56Brian Preston?

  He's 26, though. That's gonna be, that'd be a really big income for me to not want to do the Roth 401k.

• 33:01Speaker 03

  It seems likely that your employer sponsored retirement account may be the best place for again socking money away before you jump to the taxable brokerage account. Because even if you want to retire early, I'd want to know what's going to happen to your career trajectory. I want to know what's going to happen to your family situation. You don't have any debt now. Would you have debt in the future? Like you're thinking about buying a home, that sort of thing. There's some different things that go in there. That's why we have the financial order of operations. You don't have to over complicate it too early. If you can just follow the FOO, you'll likely set yourself up in a good spot.

• 33:32Brian Preston?

  And by the way, that's no shade to, to, to the taxable brokerage account. It's just, and look, I think that there's starting to be a little noise on this is because I've seen, and I think it's a branding thing. I've seen that there's some content creators that are out there trying to put brokerage accounts ahead of a lot of other accounts. And I'm like, okay. I mean, I know that's a branding thing that you're trying to go out there and get territory. Cause that's like I said, I've heard me give discussions where publicists will say, what's your thing that's different than everybody else? Is this pressure to go out there and try to create your thing? I'm here to tell you, I don't let us get caught up in the branding game. I'm trying to tell you what to do to win your, at this game of money. And those tax incentives, if you're a 26 year old

• 34:15Brian Preston?

  and you're, and you're not in like the, what, what would you, I mean, 30 plus percent on the marginal rates of taxes, you, I mean, even if you're like low 30s, I'm still loving that Roth tax free growth that could come in that Roth 401k. Don't sleep on those tax benefits. There's gonna be plenty of time as you get older and build assets that you'll be able to load up that, that after tax brokerage account. Cause we love that account too, but it's a time and a place that you, that you do these things.

• 34:48Speaker 00

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• 35:15Speaker 01

  Blowing ad budget on metrics that look great. Till the CFO sees them, that's bull spend. And marketers are calling it out in dashboard confessions.

• 35:25Speaker 05

  I remember telling my boss, it'll be good for the brand when leads were slow.

• 35:31Speaker 05

  Yeah, it, it wasn't.

• 35:33Speaker 01

  Cut the bull spend. LinkedIn lets you target by company, job title and more. Advertise on LinkedIn. Spend $250 on your first campaign and get a $250 credit. Go to LinkedIn.com/campaign. Terms and conditions apply.

• 35:47Speaker 04

  Well, skill snaps H5W. Thank you for the question. If you would like a money guy Tumblr, just email [email protected]. Next question is from Skippy. Hi, money guy team.

• 36:01Speaker 03

  That's because. When it comes to Skippy, Brian, as a peanut butter, what do you think about it?

• 36:06Speaker 04

  You're a peanut butter connoisseur.

• 36:07Brian Preston?

  I think you only end up with Skippy is because you went to Costco or Sam's and they were selling it, you know, in a two, two gallon container and it was really cheap.

• 36:15Speaker 03

  You're not a Skippy guy.

• 36:16Brian Preston?

  I'm definitely not a Skippy guy. I'll eat it. Cause I like all peanut butter. I'm an equal opportunity peanut butter eater.

• 36:22Speaker 03

  If you want to know, if you're curious about Brian's thoughts on peanut butter or, you know, tasty pantry goods, make sure you're following us on socials. Make sure you go follow us. Uh, one, subscribe to the channel right now, but make sure you follow us out on their Instagram, out there on Tik Tok and all the different places where you can find money guy content. Because you know, you might just understand how Brian feels about pantry goods.

• 36:47Brian Preston?

  We need to put Skippy's question back up because I was so focused on peanut butter. I didn't read the question.

• 36:51Speaker 03

  I don't think she asked it, did she?

• 36:52Brian Preston?

  Oh.

• 36:53Speaker 04

  I didn't.

• 36:53Speaker 03

  She didn't ask the question.

• 36:54Brian Preston?

  Okay, okay. I just saw I got taken down.

• 36:56Speaker 04

  We went straight to peanut butter.

• 36:57Brian Preston?

  After we answer Skippy's question, let me tell you a side effect of doing that peanut butter recording.

• 37:03Speaker 03

  Well, nobody knows about that yet. It's not out yet.

• 37:05Brian Preston?

  That's all right. Go ahead.

• 37:05Speaker 04

  And after Skippy's question, we're going to get to today's special segment. So let's, we better answer this question. It's gonna be a surprise.

• 37:14Brian Preston?

  Surprise.

• 37:14Speaker 04

  Hey, money guy team. In respect to the FOO, does deductible step one count towards my emergency fund step four, or are they completely separate from each other?

• 37:24Speaker 03

  Brian, you wrote the book on this.

• 37:25Speaker 04

  Question from the FOO.

• 37:26Speaker 03

  You wrote the book on this.

• 37:27Brian Preston?

  No, the, the, I often say that emergency reserves are so important. It gets two steps in the financial order of operations. The deductibles covered, your highest deductible covered more specifically, is to keep you from making desperate decisions. That's the first part of it. But then I want you to just, you know, because we know free money for your employer. It's hard to beat a 50 to 100% guaranteed rate of return. You're never going to get rich if you're paying a bank 20 plus percent with credit cards and so forth. And then of course, we want you, second step of, of the FOO, that's emergency reserves is step four, three to six months. Of course you can include that because they work together. It's just more of an indicator of, hey, are you going with your next dollar in the right order of operations to make it through this process?

• 38:13Speaker 03

  I've got nothing to add to that.

• 38:15Brian Preston?

  I didn't leave you any gas.

• 38:16Speaker 03

  No, I mean, this is a pretty straightforward question. Yes, it absolutely counts as part of it. They are distinct in how you operate through them. But by the time you get to four, one just gets incorporated right on in.

• 38:26Brian Preston?

  So I'll tell you, the rest of the story is, because I, you're gonna see, I'm gonna give you guys some definitive guidance on how awesome peanut butter is and maybe even which brands are the better ones. But I did this for the, the, the channel and I love peanut butter and I have a whole history with peanut butter because it got me through some poor times.

• 38:44Speaker 04

  I have a whole history with peanut butter.

• 38:47Brian Preston?

  But, but, but I will tell you, eating, consuming that much peanut butter caused some distress for my stomach. And then I had to go on the, the AI agents and I said, hey, is, is something wrong with, because why am I struggling so much today? And it's because of all the oils in the peanut butter can cause some.

• 39:06Speaker 04

  Did you really eat that much that day?

• 39:07Brian Preston?

  I ate a lot of peanut butter. Cause see, I screwed up. When they, when they brought, put all the, the, the first one, because they were all brand new things of peanut butter. And I mean, that's exciting. We open up a brand new container of peanut butter.

• 39:19Speaker 04

  I do remember the first one.

• 39:21Brian Preston?

  I put a spoon, a big spoon. We used a big spoon.

• 39:23Speaker 04

  Large spoonful.

• 39:23Brian Preston?

  And I was like, you would have thought I was trying to get rid of hiccups. That big old spoonful that I put in there. And I was like, I'm in trouble.

• 39:30Speaker 04

  Well, Skippy, thank you for the question, the peanut butter tangent. And as a reward, we would like to give you a Tumblr if you don't have one yet.

• 39:37Speaker 03

  Have you?

• 39:38Speaker 04

  Email [email protected].

• 39:39Brian Preston?

  Bo practically drowns himself. I, I, I'm willing to consume large sums of peanut butter.

• 39:43Speaker 03

  Drowns himself. I was basically a water polo player right there. Um, what, what's your thought on Uncrustables? Cause I'm also peanut butter. I'm huge peanut butter and I'm peanut, well, I've got, I've got different types of sandwiches I like.

• 39:55Speaker 04

  But do you have a history with peanut butter?

• 39:57Speaker 03

  I, I don't, I mean, me and, uh, we've been together for a while, but I wouldn't say we have a history. I don't, I don't think.

• 40:03Brian Preston?

  Look, the whole reason I've even brought up peanut butter is because Bo has this unhealthy thing he's sharing about his fascination with cereal. And I think if you're going to look for the thing you're doing to bridge the gap when you don't have money, it's not ramen and it's not cereal like Bo says, it's peanut butter. That, that is the thing that, that I think is really valuable.

• 40:24Speaker 03

  I, I, matter of fact, I sent you guys some pictures of my favorite peanut butter snack. Yeah. Right?

• 40:31Brian Preston?

  You asked about Uncrustables though?

• 40:32Speaker 03

  But I was asked about Uncrustables. Yeah.

• 40:33Brian Preston?

  Look, you're paying a huge premium to cut the crust off of you. I like Uncrustables. I mean, what's funny is I don't know what, who, who owns Uncrustables? Is it Smuckers or?

• 40:42Speaker 03

  That sounds right.

• 40:44Brian Preston?

  No, is that, is that right?

• 40:45Speaker 04

  Probably.

• 40:45Brian Preston?

  Am I right on that? But last time I was at Disney, they were handing out free Uncrustables. And I was like, wow, this is the coolest thing.

• 40:53Speaker 04

  That's your dream day.

• 40:54Brian Preston?

  I hadn't had an Uncrustable in quite a while because I'm, I'm too cheap to pay for that premium. I'll cut my own crust off. And, um, they're good. They're really good. And I'll also share Kristen on social media brought over a box because I, we just didn't, it didn't make its way into the bit that we were doing. She brought in an Uncrustable that was honey and peanut butter.

• 41:14Speaker 03

  Oh, have you not had that before?

• 41:15Brian Preston?

  Oh, no, no. Not the Uncrustable version. If you want to know, and we're way not doing financial stuff right now.

• 41:22Speaker 04

  You are so off topic.

• 41:22Brian Preston?

  I know. We'll get back on point after this. Back before we lost, you could have peanut butter in schools when I'm old enough that you could have peanut butter at school. So that's, that's a thing that's gone away. So much so that the lunchroom ladies, they would make these peanut butter sandwiches that you're like, why does my peanut butter not taste this way at home? It's because it was peanut butter and honey.

• 41:43Speaker 03

  Peanut butter and honey. Yeah.

• 41:44Brian Preston?

  And that's what the Uncrustable sells a version that is, I will give you permission to go buy that because it has that lunch lady approved taste that it's hard to recreate at home.

• 41:54Speaker 03

  Buddy, you take that peanut butter, that honey and you just add a little bit of banana in there and.

• 41:59Brian Preston?

  There might be some, oh goodness.

• 42:00Speaker 03

  Nah, look.

• 42:01Brian Preston?

  What is that called, Bo? What is that called? Go ahead and tell them.

• 42:05Speaker 04

  No, do not say it.

• 42:06Brian Preston?

  No, say it.

• 42:07Speaker 04

  Do not.

• 42:08Speaker 03

  How about this, guys? Uh, that is Bo's favorite peanut butter snack. Let's see if you as the audience can name.

• 42:14Speaker 04

  What would you call this snack?

• 42:16Speaker 03

  What Bo calls the snack.

• 42:17Brian Preston?

  So you got a half a piece of bread, you got a full piece of bread that you're having with a full banana.

• 42:23Speaker 03

  And honey drizzled over the top.

• 42:24Brian Preston?

  And it's holding the banana.

• 42:26Speaker 03

  What do you call Bo's favorite snack?

• 42:30Speaker 04

  The mutants just got to see full mom Reba come out. I said, you will not.

• 42:33Speaker 03

  She said that.

• 42:36Brian Preston?

  It has a name.

• 42:37Speaker 03

  It does have a name. Reba, what's that next question?

• 42:39Speaker 04

  Okay. I, we actually, the very next thing.

• 42:41Brian Preston?

  We're not gonna say the name?

• 42:42Speaker 03

  We're asking the audience to guess what the name is.

• 42:47Speaker 04

  I'm actually very excited about our next segment. Can I just say, it's a very good one. Today, we're going to do Moneyverse Milestones. We are going to celebrate some money milestones from the Financial Mutants, real-life financial mutants. They have posted these in the Moneyverse, our Financial Mutant Discord channel. It's free to join. Go to moneyguy.com/moneyverse. We just crossed 10,000 members in the Moneyverse. Can you believe that? That was last week. So I just wanted to give a shout out. It is a thriving little community we have there, or actually a very large community we have there. So, thank you for being a part of that. And there is still room for more people to come and join in the conversation. We have a channel on there where people share their milestones.

• 43:31Speaker 04

  Maybe you don't have somebody that you can talk to about hitting net worth milestones or financial wins in your life. People can share that in the Moneyverse because we get it. So, I'm going to read a few to you guys and I'm going to get your thoughts, reactions, and we're going to take a minute to celebrate. The first one is from Wessie20. They are homeowners at 23 and now engaged. It says, "Just finished building our first home at 23 years old. We have 65K combined in Roth IRAs, 120K gross income, and 90 to 100K equity in our home. Also, we're engaged." And they shared a photo from their engagement as well.

• 44:12Speaker 03

  What did the fortune say? It looks like it says-

• 44:14Speaker 04

  It says, "A lingering question will be answered happily tomorrow."

• 44:18Speaker 03

  Oh, did he have that? Or did they have that made? Or was that just-

• 44:23Speaker 04

  I think it was coincidence. They did not specify that I know of. If anybody from the Moneyverse knows more, let me know. But I thought that was very cute.

• 44:30Brian Preston?

  I know somebody else who liked nuptials at an early age.

• 44:34Speaker 03

  I wasn't that young. I wasn't that young-

• 44:36Brian Preston?

  He was 24.

• 44:38Speaker 03

  Yeah, that's not 23.

• 44:39Brian Preston?

  I was 24.

• 44:39Speaker 03

  Yeah, yeah, that's right. That's right, that's right.

• 44:41Brian Preston?

  You resemble this. I mean, 23 and engagement is probably going to be, an engagement is going to probably be at least six months.

• 44:47Speaker 03

  Yeah? Okay, yeah, that checks. That checks, I'm with you.

• 44:51Brian Preston?

  I mean, I'm just telling you that if you've got all that going on at that age, be fruitful and multiply because that is just awesome. Y'all are making the world a better place. And I'm super happy for you guys.

• 45:04Speaker 03

  I'm so, I am so happy that you guys are engaged and getting married. I was actually more impressed at 23 years old as homeowners.

• 45:11Speaker 04

  No, that's a cute story. I know. It kind of plays there. That's very rare.

• 45:15Brian Preston?

  Back when houses were nickel.

• 45:16Speaker 04

  Very rare.

• 45:16Brian Preston?

  It was easy to say you bought a house early, but to do it at this point, that's impressive.

• 45:21Speaker 03

  That's super impressive. Congratulations. That is, those are all wonderful milestones. Worth, worth celebrating. Kudos to you guys.

• 45:30Speaker 04

  The next one is from Jake. It says, "A summer of working nights in a cheese factory has paid off. I maxed out my Roth and I've saved enough for a nice road trip this spring."

• 45:42Speaker 03

  Look, Jake, you earned it. Hey, you're getting that cheese.

• 45:44Speaker 04

  This is what it's about.

• 45:45Speaker 03

  Good job. Maxing out.

• 45:47Brian Preston?

  By the way, if you ever, I mean, if you go, like, one of the things when you go to Europe and you go to like France and you go into a cheese place where they make cheese. I love cheese, by the way. Cheese should be on everything, but it stinks. It reeks. Have you been into a cheese place?

• 46:03Speaker 03

  You won't believe this, no.

• 46:05Brian Preston?

  It really stinks. So Jake earned that Roth contribution. You go enjoy your vacation. And hopefully you'll get your smell back any time now.

• 46:14Speaker 03

  19, at 19 years old, I had not maxed out a Roth IRA. That is, that is outpacing-

• 46:20Brian Preston?

  By the way, 19 years of age? Because that's younger than 20. 97.61, that's better than 88 times over. That's 97.61. So Jake, every dollar you save and invest? So what are we, at 7,500 this year?

• 46:36Speaker 03

  7,500, yep.

• 46:37Brian Preston?

  7,500 times 97.61. Woo! I need to do that again. Hang on, let me do that again. 97.61 times 7,500. Oh, that's not a typo. $732,000.

• 46:56Speaker 03

  That's wild. Just that one Roth IRA contribution has the potential to turn into over $700,000.

• 47:04Brian Preston?

  I had to do that math twice.

• 47:05Speaker 04

  I thought this was excellent financial mutant behavior for a 19-year-old.

• 47:09Speaker 03

  I think it's great.

• 47:09Speaker 04

  Like, even just the fact that he said, "And I saved up for a nice road trip this spring." I was like, shut up!

• 47:14Brian Preston?

  Go do that road trip.

• 47:15Speaker 04

  We're seeing what you want to do and actually saving up for it. Like, that's amazing and making memories. Bedazzling that basic life. So, congrats to Jake. All right, lastly, Seadog says, "My retirement date is confirmed. After 20 years with my company, I submitted my retirement date of January 1st, 2027. New adventures already lined up." So he listened. He knows what he's retiring to, and that made me really happy.

• 47:41Speaker 03

  Here's what I hope Seadog did. I hope Seadog stress-tested the plan, worked through all the iterations of, okay, what does retirement look like? What, you know, how are we going to travel? How are we going to replace automobiles? What are we going to do for healthcare? How are we going to, if we have kids? How is that going to factor in the financial situation? And stress-tested it and ran it through Monte Carlo and has a high probability of success that, hey, if I leave work and I retire as of 1/1/2027, I have a high probability of success, high comfort level, that we are going to be okay? That is absolutely a thing worth celebrating and congratulations, Seadog. That's huge.

• 48:18Brian Preston?

  Yeah, by the way, when I wrote this, I wrote S-E-A-D-O-G. So shame on me because I actually saw on the screen. It was C-D-A-W-G, dog. Like a good Georgia Bulldog is. So, so congratulations, Seadog. That's a milestone that's well-deserved. I'm glad you also know what you're retiring to. And just keep planning that out. Every year, do the net worth statement. Come up with, you know, if you have a significant other, come up with what the travel looks like for the coming year, what the goals are. And I think you'll find that you can enjoy that next phase because you put all the hard work already in.

• 48:58Speaker 03

  It's a D-G-D. If you know, you know.

• 49:01Speaker 04

  We have loved seeing all of the stories, all of the questions.

• 49:04Brian Preston?

  We can say that, but we can't say what your banana sandwich was?

• 49:08Speaker 03

  Stop going back to, stop going back to my snack.

• 49:11Speaker 04

  You're really ruining my thunder today, I'll tell you what.

• 49:13Speaker 03

  You're doing awesome. You keep going.

• 49:16Speaker 04

  No, but what I was going to say is I really have loved seeing all of the stories and questions, conversations shared in the Moneyverse. If you want to join, now is a great time because we actually have a special announcement. We are going to do a content team Ask Me Anything on Wednesday, September 30th at 3:00 PM Central. So, if you haven't joined the Moneyverse yet, or if you haven't just been in there for a while and need to fire up your Discord account, now would be a great time because we are going to be doing an exclusive Ask Me Anything event on September 30th. So, check it out.

• 49:48Speaker 03

  There are guardrails on that, right? Like, they can't ask you like stuff about us.

• 49:51Speaker 04

  I mean, what's the title of it, Bo?

• 49:52Speaker 03

  Right?

• 49:52Brian Preston?

  They could ask you what your sandwich is called.

• 49:56Speaker 04

  Maybe that's where it will be revealed.

• 50:00Speaker 04

  I don't know, I'm not revealing it. Maybe somebody else on the content team will reveal it.

• 50:06Speaker 04

  Oh, man. Go to moneyguy.com/moneyverse if you want to join our Discord and be part of that AMA. That's next week, right?

• 50:15Speaker 03

  Yeah, next week.

• 50:16Speaker 04

  Can't wait for it. It'll be really fun. All right, that concludes our Moneyverse Milestones segment. Thank you for partaking and being a part of that. We are going to move on to questions. We do have a lot of guesses for what this sandwich is called, for what it's worth. My personal favorite is, let's see, where did it go? I want to remember correctly. That's a good one.

• 50:41Speaker 03

  That's pretty good.

• 50:42Speaker 04

  The Bo Nana PB Sandwich.

• 50:44Speaker 03

  Oh, Bo Nana.

• 50:45Speaker 04

  The Bo Nana Peanut Butter Sandwich.

• 50:47Speaker 03

  That's clever.

• 50:48Speaker 04

  That was cute.

• 50:49Speaker 03

  That's clever.

• 50:49Speaker 04

  Banana Extravaganza, Fu Nana Butter Sandwich. Okay, you're just trying to get us to like you.

• 50:56Speaker 03

  Trying to get in there.

• 50:59Speaker 04

  All right, if there's more content team that I need to see, let us know. We're going to do another question in the meantime. Let's go to Bland Hound's question. It says, "Hi, the Money Guy Show. My wife and I are 27 and 25. We now make 210K a year, which is huge. And are 220K in low-interest debt, which is also huge.

• 51:23Brian Preston?

  That's big too.

• 51:24Speaker 04

  But it's low-interest, mostly student loans. Is it ever okay to prioritize this debt in the interest of starting a family? What do you think?"

• 51:33Speaker 03

  You know, it's always interesting. We get these questions around, hey, is it ever okay? I want to just pause there for a moment and remind you, money is nothing more than a tool that allows us to accomplish the things that we want to accomplish with it. And not all of us have to have the same goals. We can have different goals and depending on the hierarchy of our goals, it will influence the way we make our financial decisions. So like what you're asking, hey, is it ever okay for me to have this goal and pursue this goal? Of course that's okay. What you have to recognize is there an opportunity cost. If I pursue this one goal, is there some other goal that might be adversely affected because I chose to pursue this goal?

• 52:18Speaker 03

  I would argue for you guys at 27 and 25, if we're solely and strictly thinking about mathematics, beginning to pay off low interest debt may not be the mathematically optimal solution for you because for a 27 and 25 year old, we know the wealth multiplier is not the foo. We know the wealth multiplier.

• 52:36Brian Preston?

  For a 25 year old, it's 44.04 and for a 27 year old, it's 33.8.

• 52:41Speaker 03

  So for every dollar that you invest, that has the potential by the time you're tired to turn into somewhere between 33 and $44. Whereas if you're satisfying low interest student loan debt at 3%, 4%, yeah, you're going to save on that interest, but is that the best use of those dollars? So is it okay to shift your priorities and use your money to pursue a priority that matters to you? Absolutely. Is it mathematically optimal and might it be expensive to do so? That's also the case because I know how much money you make and I know how much you have in high interest debt. I don't know how much you've saved. I don't know where your current investment balances are. I think if I had that, it'd be a little bit easier to give you a concrete answer.

• 53:22Brian Preston?

  Blandhound, we've actually given you the answer. It's called Millionaire Mission and the Financial Order of Operations. Once you get to step eight of the Financial Order of Operations, you can do whatever the heck you want with your money. You know, what's funny is that this week right now is when, or it was this weekend, was FinCon. And all this weekend I was getting texts from friends that we typically see when we go out to FinCon and one of them is Andy Hill.

• 53:51Speaker 03

  Yep.

• 53:51Brian Preston?

  So, you know, he reached out, you know, just saying, hey, Joe Saul, see you. Hi, JC. I was, I was hearing from all kinds of Wes, I know was one of the keynotes this year, I believe. So, and then we'll even say hello to PT because you know, he's the founder of all that stuff. So really good people. And one of the things I know when Andy confessed that yes, he prepaid his low interest mortgage early, but it was after he was already following the foo type things where he was maxing out his retirement. He had his emergency reserves. He loaded up his Roth, all these things. So I think if you've got a bunch of student loan debt, but you have a very healthy income like that, knock it out of the park. Get to step eight as fast as you possibly can, and then start throwing some bucks at

• 54:36Brian Preston?

  that student loan. And I think you'll extinguish it in no time because it's not going to be hard at all with that big of a shovel to still make it through the, like I said, four, five, six, so you can start building step number eight ASAP.

• 54:50Speaker 03

  Love that.

• 54:53Speaker 04

  Thank you for the question, Blandhound. We appreciate you being here and if you would like a Money Guy Tumblr, email [email protected].

• 55:00Brian Preston?

  By the way, another person, Brian Ferraldi.

• 55:02Speaker 03

  Yeah.

• 55:03Brian Preston?

  He was, me and him were trading texts last night because he was like, did you go? I got FOMO. I didn't go this year. And I was like, no, I didn't go either. And he was like, are you going next year? So it is funny because we all make friends. A lot of people, you guys follow their content. We really do meet these people and have conversations. We were talking to Humphrey Yang yesterday too. I mean, so it's kind of, it's so interesting that a lot of the people you follow, we do become friends and it's kind of fun to go to these conferences and see these people.

• 55:32Speaker 04

  Let's go to another question from Chandler P. It says, my wife and I are renting, saving one K per month for a down payment, buying in one to two years, depending on rates. Is a 3.75% high yield savings account best to protect that capital? Or should we use broad index funds for growth?

• 55:55Speaker 03

  Chandler, if you're buying in the next one to two years, that means you need those dollars to be readily available for you in the next one to two years. I think you gotta go high yield savings account. The risk is you could save that $1,000 a month and you could be buying into low cost index fund. You could have that, but what if when the perfect house becomes available, the house that you've been waiting for, that you're ready to move on, but the reason it became available is because the economy hit the skids and the market went down, the price of that house dropped because the seller had to get out of it. And now that money you need for a down payment is 15%, 20% lower than you wanted it to be, you would be absolutely sick. So I think anytime you have an expense that is inside of the next four to five years

• 56:37Speaker 03

  and you're saving for it, you gotta save for it in purely liquid, safe cash. High yield savings account, a great way to do that. Money market mutual fund, great way to do that. Anything beyond that five year timeline, I think you could look at low cost indices, but for where you at and what you're looking for, I think you go high.

• 56:54Brian Preston?

  Well, I see what Chandler's thinking because look, there's a, what we call a financial mutant trap sitting out there. And I fell into this trap too, is that if you go look, I mean, since 2022, the stock market's been on a tear. So you know, if you know you have this house down payment that's coming up in the next, you know, 18 to 24 months, you know, like, man, the money I've already saved up could be worth, I mean, I could have, you know, I could have annualized 12 to 18% for these next two years. Man, my money would be almost 20%, it'd be 20, 30% more than it is right now. This is a no brainer. I'm a financial mutant, but Chandler, I'm here to tell you it's a trap is because you need that money.

• 57:37Brian Preston?

  And look, we love investing, but investing can be very volatile in a short period of time. And what would you feel if we, if you, if you needed this money in 18 months and then all of a sudden the market's down 20, 25%? You would be like, how was I so foolish? Because I thought I'd have access to this money versus it actually being in cash and actually having cash. Access to cash is not the same as being cash. Don't be, don't outsmart yourself. And I think a lot of financial mutants try to get really cute, trying to maximize and get themselves a little, really caught up in a risky situation. So don't, don't fall into that trap.

• 58:17Speaker 03

  Yep.

• 58:19Speaker 04

  Well, great question. Thank you for asking it. Your user, not, I just lost your username.

• 58:24Speaker 03

  That was Chandler P.

• 58:25Speaker 04

  I was looking at the money verse. Chandler P, that was it.

• 58:27Speaker 03

  Chandler P.

• 58:28Speaker 04

  Email [email protected] and we would love to send you a Tumblr.

• 58:34Speaker 04

  All right, let's do one more. You know what? People give us a hard time for asking PJ Dad Life's questions two or three times.

• 58:41Speaker 03

  Are you about to do it?

• 58:42Speaker 04

  I'm doing it again.

• 58:42Speaker 03

  And it's a Tumblr, but he knows he got a Tumblr.

• 58:44Speaker 04

  He already got a Tumblr though.

• 58:45Brian Preston?

  So is it, you know what? That's a cost saving measure. Well done, Reevee.

• 58:49Speaker 03

  I don't know if you saw this earlier in the chat. PJ did say, hey, you should ask one of my questions. And if you ask one of my questions, I would like to bequeath my Tumblr to another one of our popular commenters.

• 59:06Brian Preston?

  You know what? I think that's okay. I think that that is okay. I don't, I want to be careful. I want to make sure we're careful about this whole proxy tumbling, but it's, but I still think this is, this is because I mean, we had a good time talking to PJ. I think it's okay for this situation.

• 59:23Speaker 03

  Did y'all catch the name of who he wanted to give it?

• 59:26Speaker 04

  I did, actually.

• 59:27Speaker 03

  Did you? I didn't see, I don't know.

• 59:29Speaker 04

  You gonna say?

• 59:30Brian Preston?

  I didn't see who it was.

• 59:31Speaker 04

  I'll reveal it at the end of this question. PJ Dad Life says, hey, Money Guy team, if you are already saving 25%, how do you know when it's okay to loosen up and spend more instead of always trying to save the next dollar?

• 59:47Speaker 03

  PJ, I've got a great tool for you. You want to go to moneyguy.com/resources and play with a know your number tool. Cause what that's going to do is that's going to tell you, am I ahead of the curve? Am I behind the curve? Am I right where I need to be? And if it turns out based on the hard work that I've done up to this point that I'm at, that holy cow, I am well on my way to the finish line and to even get to the finish line, I don't have to keep saving at the same rate that I have been saving or I don't need to save more than 25%. When you have answered that in the affirmative and you have a high level of confidence, your trajectory is high probability for success. I think that's when you can begin to take your foot off the pedal if you so choose. Now, a lot of people say, I don't want to take my foot off the pedal.

• 1:00:28Speaker 03

  I'm going to keep doing this and rather than waiting to retire at 60 or 65, maybe I'll look at exit workforce five, six, seven years sooner than I thought. I think that's totally okay too, but that's how I would do the analysis to make that decision.

• 1:00:44Brian Preston?

  Well, look, use the tool because the know your number really is going to give you that, that knowledge of your, if you truly are ahead of the curve, but also turn on your, your senses to the people that you care about. I mean, because you're going to get to an age of, we know real success starts kind of taking traction in your late 30s, early 40s. And this is also the phase where your kids are starting to get a little older. You've got to start planting seeds, guys, that you want to be the good time rock and roll family members that when they leave the nest, that they actually come back.

• 1:01:17Speaker 03

  Yep.

• 1:01:17Brian Preston?

  So you don't want to, you don't want to be, you know, I've learned this lesson, you know, my daughter came to me because when we love cruising, but I got to the point where I was buying blow up mattresses to take on the cruise ship so that my oldest daughter could just sleep on a blow up mattress because then we could squeak. She is like, dad, I'm. You know, I'm like, come on, this is the deal. This is, this is still all the food you can eat, all the shows. And she's like, I'd kind of like to have my own bed.

• 1:01:42Speaker 03

  I'd just sleep with a pillow.

• 1:01:43Brian Preston?

  And I'm like, you know, I don't want to, I don't want to sleep in the same bed with my sister anymore. And I'm like, you know, I kind of get it. And I realized I was being a little too tight with things and I was not setting the hook to get her to come back in the future. So there are going to be indicators. I've had other of you financial mutants who have written me that, you know, you're driving 12 hours to go on vacation instead of buying plane tickets. Or there are indicators that you might look, there's nothing wrong that you were using your financial mutant skills to, to, to really respect that first ingredient in the wealth building process of disciplined, living on less than you make. But there will come a point where it's diminishing returns because your army of dollar bills

• 1:02:26Brian Preston?

  has gotten so big, especially 40s and beyond, that, that now you're like, what are we doing? The, the incremental difference on some of these sacrifices. And that's why, you know, I do have an updated version of Millionaire Mission coming out. It's a paperback version. I put a whole section in there on you can't take it with you. And when you can start really letting go of things, because I've started, it's got, even got me leasing a car. Goodness gracious. Every month I'm like, what are we doing in the Preston household? But, but it is one of those things where I think you have to hold on loosely. Once you, you've measured twice, cut once, you've know you've set the foundation and you're getting beyond steps eight and even nine of the financial order operations.

• 1:03:09Brian Preston?

  I want you to use money to the fullest to enjoy this life that you have.

• 1:03:14Speaker 03

  Love that.

• 1:03:15Speaker 04

  Love it. Well, PJ Dad Life, thanks for the question and we are going to honor your request to hand over the Tumblr you just won to Bo Hanson Spotter.

• 1:03:25Brian Preston?

  Oh my gosh.

• 1:03:28Speaker 04

  We have seen your username in the chat. So you know what? Happy to give you a Tumblr. If you don't have one yet, Bo Hanson Spotter, just email [email protected]. Thanks for being here. If you haven't yet, fill out the financial mutant survey. Go to moneyguy.com/survey. We only have one more week before we shut that off and create the content. So get in on it.

• 1:03:49Brian Preston?

  I, I do think it's important, you know, chicken or the egg. Bo is already in good shape, but we have now created a, a, a positive reinforcement is that Bo's going to be my age and he's going to still probably be doing shirtless photos. I mean, don't y'all feel like we're creating, we've created an animal here.

• 1:04:07Speaker 03

  Let's not make that face, Rebe.

• 1:04:10Speaker 04

  I was just like, are you, you not now have the reputation that you're just out there making shirtless photos?

• 1:04:14Speaker 03

  I mean, that's not a thing that I do, but.

• 1:04:16Brian Preston?

  Do you not follow his wife's feed? I'm not even on social media and I hear about this stuff.

• 1:04:20Speaker 04

  Shots fired. Shots fired so hard.

• 1:04:26Brian Preston?

  I don't love Bo. It's just that, but I look, if I had Bo's physique, I would probably be, y'all'd be like, why is Brian on the Money Guy Show shirtless again? I mean, or at least in tank tops. I mean, there's a reason all my shorts have sleeves.

• 1:04:38Speaker 03

  Oh man, hey, when we do the merch store, can we do Money Guy tanks? Is that a thing we can add?

• 1:04:42Brian Preston?

  That is not the first cut, is it? We're going to put tank tops in the store first. So I think there's.

• 1:04:46Speaker 04

  Nothing but Money Guy tank tops.

• 1:04:49Brian Preston?

  Merch store. So guys, we love creating content. Thank you for tuning in. Still two weeks back from vacation. This is my second week back from vacation. So thank you, as we're still working the rust off of this thing, but we're having a blast. We don't take for granted. Do not forget to do the survey because we're creating content off of what you guys share. And it's valuable because everybody who, you know, we all come into this process. We know 80% of millionaires are first generation. So there's going to be a lot of people currently and in the future who just don't know what to do with their next dollar. It's nice if we can give them affirmations, give them the path, give them the data that lets them know this is the way to treat this powerful tool. I'm your host, Brian, joined by Mr. Bo Rebe.

• 1:05:34Brian Preston?

  Rest of the content team, Money Guy, out.

• 1:05:38Speaker 04

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

• 1:06:13Speaker 06

  Hey, Bo's here. On your next track, listen for the decisions. Distortion on the bass, the vocal right up front. Every choice deliberate. With Bo's, you'll hear it all. Your music deserves Bo's. Now at Kroger, your points add up to more ways to save every trip. Use them your way to take dollars off groceries at checkout or save at the pump. You can even save up to $35 on your next fill up. Same points, more choices. And with low prices on fresh, quality food, plus digital and personalized offers tailored to how you shop, your dollar goes further. Redeem your points online or in the app. Kroger, fresh for everyone. Restrictions apply. See site or store for details.