Financial Advisors Versus the Internet

⁠⁠⁠⁠Is viral financial advice helping you build wealth—or leading you toward costly money mistakes? Financial advisors Brian and Bo react to internet money gurus and break down the truth about 401(k) investing, Roth vs. traditional retirement accounts, financial advisor fees, real estate investing, tax deductions, and paying off your mortgage early. Should you cash out your 401(k) to buy rental property? Is paying a financial advisor 1% worth it? And when does a traditional 401(k) make more sense than a Roth? Discover how smart investing, tax planning, and the Financial Order of Operations can help you make better decisions for financial independence. 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

  The action's on the court and as the official beer sponsor of the NBA, Michelob Ultra is getting fans closer to the game with a chance to win courtside seats, merch and more. Visit michelobultra.com/courtside to enter. Michelob Ultra Courtside 26 to 27. No purchase necessary. Open to US residents 21+ Begins on October 1st, 2026 and ends on June 30th, 2027. Multiple entry periods. See official rules at michelobultra.com/courtside for free entry, entry deadlines, prizes and details.

• 0:30Speaker 01

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• 0:39Speaker 00

  My boss asked for results, so I opened my dashboard for the only positive sounding metric I had. Impressions.

• 0:47Speaker 01

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• 1:00Brian Preston?

  Welcome back to another react. What I've been told by the team is we're going to be reacting to us versus the internet. Brent, I am so excited to go toe to toe with what the internet has for us today. Let's check it out.

• 1:13Speaker 03

  Owning a stock is boring unless it goes up in value. Like, think about my Murcielago. I paid $275 for that car. The doors go up. It's worth 800 grand now. It's a manual V12. I get to drive it. I get to take it to car shows. I get to meet people. You own a stock, like, ho hum. If that car was still worth $275, I've still had a great experience.

• 1:32Brian Preston?

  Yeah. What about the maintenance? What about the insurance?

• 1:35Speaker 04

  I don't, I don't care if my stock goes up or down today. In all reality, when I go invest in a company, when I go buy shares in a stock or a mutual fund, I don't care what happens to the value today, tomorrow, the next day, because it's a long-term holding. I don't need to show it off to my friends. I don't need to ride in it. I know a lot of people who have lost their shirt buying and selling and trading cars, often not the same with the stock market.

• 2:00Brian Preston?

  Look, exotic cars, that's a hobby. It's, it's a cool hobby. What's the retail on one of those? More than you can afford, pal. But at the end of the day, I want my money, my army of dollar bills to work harder than I do with my brain, my back and my hands. The easiest way to do that, just buy the market through an index fund, let it be passive.

• 2:17Speaker 05

  Me and my wife, we don't go on vacations. We only go on business trips. I can't write off a vacation, so why would I go on one? It makes no financial sense for me as a self-employed business owner to be taking vacations when I can justify every single traveling trip to be a business trip if I think creatively ahead of time. I come up with a plan and I create an itinerary. This isn't rocket science. If you go somewhere where you're conducting business, you can make it a business write-off for you. I refuse to go on vacations when I know strategically how to leverage the tax code to take business trips every time I travel with my family and you should too.

• 2:48Brian Preston?

  Bo, we have three ingredients to wealth. There's discipline, living on less than you make. There is, that turns into the margin or the money that gets invested and then you give enough time. His content is so entertaining to me, coming from a tax background, and I want to give him credit. He has step number one, which is the discipline. This gentleman has the discipline that he doesn't tell us solely he's going on vacation, not to go visit the mouse or the wizard down in Florida. He's on a business trip.

• 3:16Speaker 04

  Yeah. Here's what I think is so interesting about Carlton and it makes me nervous because I do think a lot of what's so compelling about what he says is that there are glimmers of truth or there are shades of truth in all the things that he says. He said that you have to be really, really creative. In my experience, when it comes to the tax code, I don't want to be super creative. There is black, there is white, and I try to live outside of the gray because it's not worth the inherent risk of doing it the wrong way. So I would be cautious of taking that advice and applying it carte blanche.

• 3:48Brian Preston?

  Can you imagine you're, you're, you're on your business trip with your family and your wife wants to post like some beautiful pictures?

• 3:56Speaker 04

  Uh huh, babe.

• 3:57Brian Preston?

  Whoa, whoa, nope, babe. We got a gig going here.

• 4:00Speaker 04

  You don't, no, no Instagram.

• 4:02Brian Preston?

  No pictures of the mouse in the castle. This is a business trip. Don't, don't post that. We can't post that. This is a business trip deductible.

• 4:12Speaker 06

  Do not put all of your money in your 401K. Instead, do this. 401Ks are great if you just want to set it and forget it, take the safe route. But if you want to actually make real money on your investments.

• 4:21Brian Preston?

  Real money.

• 4:22Speaker 06

  Plenty of other avenues to pursue. One of the options, and this is the one that I use, is cash out your 401K. Use those funds as a down payment on a multi-unit property that you can house hack by living in one unit and renting out the others. That way, you're not just letting your money sit in an account that's earning a low rate. You're getting cash flow. You're getting tax benefits. You're getting appreciation and you're getting leverage options.

• 4:42Speaker 04

  It always frustrates me when these like internet experts act like all these things are mutually, mutually exclusive. If you want to do this, you can't do this. You got to go cannibalize this to do that. I don't know. It's true. We love investing in real, real estate.

• 4:55Brian Preston?

  I love house hacking. House hacking is great.

• 4:58Speaker 04

  But it's not something that you do at the cost of the other things that you are doing. And there's a hierarchy. Some people would even call it an order of operations by which, by which you should follow when it comes to making these financial decisions. But he just said, you know what? Scrap that and jump right to the end of the plan. I think that's bad advice.

• 5:17Brian Preston?

  You can do and.

• 5:18Speaker 04

  That's right.

• 5:18Brian Preston?

  You know what? You could house hack with a 3% down payment because it's your first house and you live in a portion of it. So if you buy duplex, quadplex or whatever, do the whole house hacking thing, but you don't have to go raid your 401K that has the free money that your employer is dumping in there. Make smart decisions. There is a better way to do money.

• 5:36Speaker 07

  Here's how much you need to be making to comfortably afford the Costco hot dog with 20 ounce soda. The Costco hot dog with the 20 ounce soda costs about a dollar 50 before taxes and fees. A standard down payment is around 20%, which means that you should roughly put around 30 cents down. And after taking the final price of a Costco hot dog with a 20 ounce drink, adding the 20% down, finance at 8% for a total of 60 months, you're left with a total monthly payment of roughly two cents a month. So for only two cents a month, you could technically have a Costco hot dog with a 20 ounce drink, but if you were to multiply this by 10%, you'll find your monthly gross income, then multiply this by 12 to find your annual gross income. You roughly should be making around $2.04 a year to be able to very comfortably afford this Costco hot dog with a 20 ounce drink.

• 6:14Speaker 04

  You know, this is super funny, but a lot of people, I think they do perch, they do approach their consumption decisions this way. Ooh, I don't know if I want to spend this much on that thing, but if I broke it down and I just paid for it over 19 months or over 36 months, over 60 months, man, it becomes a lot more affordable and a lot more palatable. Just because you can afford the monthly payment does not mean that you can afford that thing.

• 6:35Brian Preston?

  We should all just take a moment and pause on the dollar 50 Costco hot dog. Because what a genius, what a genius business concept this is, is because without a doubt, it's a loss leader. I think they've published, they lose money on these transactions. Look, I know hot dogs are horrible for my heart, but they taste so good. And these, these guys at Costco and a diabolical plan have put something that tastes so good, but is so bad for me, but at such a cost. I mean, you kidding me? I get a drink and this huge foot long like hot dog that's all beef and delicious. It gives me, I basically shake every time I go to Costco to like, Brian, don't buy it. Don't buy it.

• 7:21Speaker 03

  Here's why paying 1% to a financial advisor makes no sense. I'm Tyler, a former financial advisor and portfolio manager, and I used to charge 1% and it made no sense. Number one, if you retire with a million bucks and you want to follow the 4% withdrawal rule, you take home 30K, your advisor takes home 10K every year. Number two, over 30 years, that 1% could cost you between 25 and 30% of your total returns. And number three, the worst part, most advisors invest you in the exact same index fund that you could buy yourself in under three minutes. That's not advice. That's an expensive subscription for handholding. Very, very expensive handholding.

• 7:54Brian Preston?

  Two things really, really quickly. If all you're doing is paying an advisor, go out there and buy index funds. We agree. Don't do that. That's why he's a former financial advisor.

• 8:02Speaker 04

  Don't go pay an advisor to just buy index funds for you. If that's what you're doing, you're not getting your money's worth. But if you have a holistic financial advisor looking at all the different areas of your financial life, even though they do use index funds, what should be happening is even if they are charging you 1%, if they are charging you some fee, the value that they add to your financial life should be greater than the fee that they charge. Of course, if you're in a situation where all that's happening is 1% is getting leached off of your net worth of off of your portfolio, off of your wellbeing every year, that's not a favorable trade-off.

• 8:37Brian Preston?

  This is no different than buying toilet paper at Costco. Speaking of Costco, the bigger you show up with in bulk purchases, the cheaper it all gets. I mean, so it's such a math crime because they run this 1% and they'll get it to where you'll have, instead of having, you know, if you have 12 million in assets, they're still taking 1% off of 12 million. No.

• 8:58Speaker 04

  It's not the way it works.

• 8:59Brian Preston?

  This is not the way it works. It gets cheaper and cheaper and cheaper the bigger you get. But look, I get it. It's easy to do a math crime and then make yourself feel better and then go sell some other product because it's back to, at the end of the day, who's putting the interest of their clients first? Or is it the person that's legally just selling you something in suitability or has some product or does life insurance? Ask yourself these questions. That's why I always say, go to moneyguy.com/resources. We have eight questions you ought to ask your financial advisor. If they can't do it, then, then you're, you're barking up the wrong tree. Bo, I'm willing to bet there's someone watching or listening who's wondering if they should work with a financial advisor.

• 9:39Speaker 04

  Brian, if I were going to say an answer to that person of when it makes sense, there are really three times that we think it makes sense to reach out to an advisor. The first is when complexity finds you. What I mean by this is that your financial life has gotten more and more complicated. Now you realize you simply don't know what you don't know.

• 9:57Brian Preston?

  The second is when you don't have the time or even the desire to be the CFO of your financial life. Important stuff is falling on the back burner and you just don't have enough time to put in the effort it takes to do what you need to do.

• 10:10Speaker 04

  And the third is when the gravity of your decisions are bigger than you feel comfortable navigating alone. Because of your success, $100 decisions start turning into $100,000 decisions. And one tax decision or one bad investment move can literally be a six-figure mistake.

• 10:27Brian Preston?

  Look, this is likely the first time you're navigating wealth at this level, but we do this all the time. And having somebody on your team who's done this a thousand times can help you do this more efficiently and give you incredible peace of mind because we can help you uncover your blind spots.

• 10:45Speaker 04

  Yeah. If any of this sounds like you, just head over to aboundwealth.com or click the link below. We'd love to connect and see if we're a good fit for you.

• 10:56Speaker 00

  The action's on the court and as the official beer sponsor of the NBA, Michelob Ultra is getting fans closer to the game with a chance to win courtside seats, merch and more. Visit michelobultra.com/courtside to enter. Michelob Ultra Courtside 26 to 27. No purchase necessary. Open to US residents 21+ Begins on October 1st, 2026 and ends on June 30th, 2027. Multiple entry periods. See official rules at michelobultra.com/courtside for free entry, entry deadlines, prizes and details.

• 11:24Speaker 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.

• 11:33Speaker 06

  I remember telling my boss, it'll be good for the brand when leads were slow. Yeah, it, it wasn't.

• 11:41Speaker 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.

• 11:54Speaker 03

  Oof, great account, but the contribution limits are tiny. Three.

• 11:57Speaker 07

  Traditional 401k.

• 11:58Speaker 03

  Four. Hear me out here. A lot of us build wealth here, but every dollar is taxable on the way out.

• 12:03Speaker 07

  Cash value life insurance.

• 12:04Speaker 03

  Easy. Five, and I hope you give me some good ones next.

• 12:07Speaker 07

  HSA.

• 12:08Speaker 03

  Two. Triple tax advantage when you use it for retirement healthcare.

• 12:11Speaker 07

  Taxable brokerage.

• 12:12Speaker 03

  Definitely number one, if you're looking to retire early.

• 12:13Speaker 04

  James, I don't disagree with you a ton. I do have a little bit at a, I, I, look, HSA beating out Roth, I'm okay with, but I think I gotta move those into the one and two spot taxable brokerage number three, because most people, when they start out in their financial journey, we don't want to start a taxable brokerage account. We want to start with the Roth IRA, with the HSA, doing $50 a month, $100 a month. Get those accounts going because tax-free growth is so, so, so, so valuable. I agree cash value life insurance should be at the end. What was his number four? Is Roth IRA, oh, traditional 401k. Yeah, but, but, but if you're getting, if you're getting free money, I argue that one's gotta be a little bit higher up. So I love the way that you have the first four in the first four. We can throw the fifth one away.

• 12:57Speaker 04

  What the heck are you doing? But I think I would have rearranged it a little bit because I think if people start with a taxable brokerage account, they're missing a lot of opportunity in the front and whether it be through employer matching in that traditional 401k or through building tax-free dollars in your Roth and HSA.

• 13:11Brian Preston?

  Your Roth IRA, most of you, hopefully you're discovering this content in either your twenties or thirties. And yes, you're going to be capped out at putting around seven grand a year in this thing. But the, the thing is that seven grand, depending on what your wealth multiplier is, go to moneyguy.com/resources, look at what your wealth multiplier, for a 30-year-old, that's 23 times. So yes, it's small contributions, small impact on your daily life, but huge results for your future self. Do not sleep on the free money from your employer. Don't sleep on that you can load up your Roth 401k, your Roth IRA and your health savings account. It's almost like there's something that can tell you, an instruction manual, tell you what to do with your next dollar to live

• 13:54Brian Preston?

  your best life. And it's called the financial order of operations. Just like math has an order of operations, so do your finances and we perfected it.

• 14:01Speaker 03

  Hey, man. Nice house. Hey, if you don't mind my asking, what's your mortgage rate? Oh, we don't have one. Oh, are you renting? No, we actually paid off our mortgage eight years ago. Really? In your thirties? Why? Well, we wanted to lower our cost of living so we didn't need to work as much. After front-loading our investments until we hit coast fire and paying off our mortgage early, my wife and I now work two part-time jobs instead of two full-time jobs. This allows us to have more time for our marriage, more time to spend with our kids and more time to take care of our health. Huh. I never thought of it like that. When life costs less, you don't need to work as much. Exactly.

• 14:43Speaker 04

  All right. So we consider Andy a friend. I'm not gonna say, I'm not gonna say anything bad here. I'm not gonna go against him, but I, I will say, money is nothing more than a tool that allows you to accomplish the goals that you have in life. And for he and his wife, one of their goals was financial independence, retire early and being debt-free. And so they prioritize the financial decisions they make based upon those goals. Where I sit, in my position, I think if you have a super low interest mortgage in the two, three, four percent range, for a young person in their thirties, it's really hard to justify paying off that mortgage early when those dollars could potentially work harder for you elsewhere and give you the ability to be debt-free on a tighter timeline. But Andy's done great. I'm not gonna fault him. His plan worked for him, even though I would argue

• 15:28Speaker 04

  perhaps it's mathematically suboptimal, but behaviorally, it was perfect for him.

• 15:32Brian Preston?

  Andy's been on our show. We've been on Andy's show. I have additional context here and that's that Andy followed the food. He didn't pay off his mortgage until he was already in step eight of the financial order of operations, meaning he was already loading up and saving well beyond 25% in his Roth IRAs, his 401ks. He wanted to be debt-free that much sooner. I, I just want to make sure people who watch this content don't become, you know, debt crusaders where they pay off the mortgage before they're funding their Roth IRA, before they're, you know, maximizing their employer 401k and even setting up a brokerage account so they can do coast fire and live life on their terms. Andy also

• 16:15Brian Preston?

  was a, a hyper accumulator of saving. They had a very good income. They made really good decisions and they just prioritized it. They did want to be debt-free that much sooner so they could live life on their terms and own their time. My financial advisor is advising me to switch from contributing to the company's Roth 401k to a traditional 401k due to basically my income level and the amount of tax savings that I would receive now.

• 16:43Speaker 05

  Wow. Okay.

• 16:46Brian Preston?

  He sounds like somebody died.

• 16:47Speaker 05

  You need to get a new financial advisor that can actually do math.

• 16:52Brian Preston?

  That, that was kind of my, my guess, but I didn't know if there was any specific circumstance where, where that was beneficial. Yeah.

• 16:59Speaker 05

  So what do you, what do you, how old are you?

• 17:02Brian Preston?

  I'm 40.

• 17:03Speaker 05

  Okay. And how much are you going to be putting into the 401k?

• 17:08Brian Preston?

  Um, I'll basically be maxing it out.

• 17:10Speaker 05

  Okay. So you're gonna put in how much in dollars?

• 17:13Brian Preston?

  Um, about $24,000.

• 17:16Speaker 05

  Okay. We'll call it $2,000 a month. Okay. If I put that in the retirement calculator, that says that, um, you're gonna have at 65, 3.1 million. Okay?

• 17:28Brian Preston?

  I started zero. I'm sure she already has assets.

• 17:31Speaker 05

  25 years, you put in $24,000 and I'll have to add up what that is. You want to do that for me? Say, um, 25 years times $24,000 and everything above your contribution is taxable. So you're saying, what was the number?

• 17:47Speaker 04

  600,000.

• 17:48Speaker 05

  Okay, 600,000. So you, he's telling you to save taxes on 600,000 of the 3.1 million, but for doing that, you get to pay taxes on two and a half million.

• 18:01Brian Preston?

  Lovely.

• 18:02Speaker 04

  That's, you go.

• 18:04Brian Preston?

  Okay.

• 18:05Speaker 04

  You go.

• 18:05Brian Preston?

  Here's the thing, when your tax rate is between 25 and 30%, you know, if you add your state and federal, we think that that's kind of the, the gray zone where you take into account what your age is and other things. But once you're 30% or greater, especially if you're somebody who thinks you're going to leave the workforce anytime between 55 to 75, which is a huge window, by the way, uh, because that's when, that's, that's the window right before required minimum distributions. What if you could leave the workforce? Let's say like myself, if I'm paying 40% to taxes, but then I could retire at say 60 years of age, I have 15 years before the government mandates me to take the money out. Now I

• 18:49Brian Preston?

  don't have all this earned income that's driving my tax rates way up. I could go from 40% to potentially 15, 22%. I, I could manipulate the, or 12%, you know, we, we deal with this 12 or 24% on the marginal rates where we see clients, they drop from the highest, the 37% marginal rates, all the way down to 12% and they start doing Roth conversions. They legally get to manipulate the tax code. That's good planning because that spread between the 37 and the 12, you get to, you got the, the compound in growth while you were in those peak earning years, paying the highest possible tax rates. And then you got to convert it at a much lower tax rate.

• 19:32Speaker 04

  I just think about for this lady, she's 40 years old. She's in a higher tax bracket. Let's assume that she pays 32% marginal on the federal. We don't know her state. If she puts that $24,500 into the pre-tax side of a 401k, it's going to save her $7,800 in income taxes. That's enough money where she could go fund, she makes too much money so she can't do a Roth IRA, but she go do a backdoor Roth IRA. So not only is she saving the 24.5, she's also building tax-free dollars via some sort of like backdoor Roth at 7,800. You can think about that tax savings in this year as like a 30% imputed rate of return. She can do that every single year. And just like you said, when she moves into a lower tax rate environment in retirement, she'll be able to convert those dollars to Roth

• 20:17Speaker 04

  at much lower rates. This is the arbitrage here. I can either turn dollars into Roth today at a 30% tax bracket, or I can turn dollars into Roth tomorrow at a 12% tax bracket. It's a favorable trade-off. That current year tax benefit is so, so, so valuable, it is difficult to walk away from. That's why we do say, for most people, you start with Roth 401k contributions and you do that until your income hits that tipping point where the current year tax benefit is so valuable that you don't want to walk away from.

• 20:48Brian Preston?

  Yeah, it, it pains me because Dave does such a good job of getting people out of debt. But this is one of those things where I, I, I think there, you have to just say there's a better way to do money. And Dave's, Dave's, I, I would caution him, he's, he's thinking about all the benefits of the Roth, but not thinking about the tax arbitrage. Because look, we, we live in a progressive tax situation. The higher, more money you make, the more taxes you pay. You have to take into account the full context of somebody's financial life. If they're in the peak earning years with peak tax paying years, you have to ask yourself, is there going to be a period in the future where maybe they're leaving the workforce at 50 years of age, 55 years of age, where you can now optimize the tax

• 21:32Brian Preston?

  planning for the long term? And that's, that's, that's really the job of what a, a, a fee-only financial planner, planner does is they not only look at what you've got going on today, your current triage situation of your financial life, they look at your future life and say, how do we bring these things together? So you own your time, you live your best life today and tomorrow.

• 21:52Speaker 04

  Look, there's tons of financial content out there on the internet and a lot of it is really, really good. A lot of people we looked at today are fantastic financial commentators. But when it comes to what you should do with your financial life, now you should make your financial decisions, personal finance is personal. That's why we've come up with things like the financial order of operations to help you decide exactly what you should be doing so that you can live your great, big, beautiful tomorrow.

• 22:17Brian Preston?

  Guys, this was a blast. I don't know. I felt like it was, you know, us more of nibbling on the edges, helping the internet know how to do life just a little bit better. There is a better way to do money as we already shared with you. Go to moneyguy.com/resources, load up on the free stuff. We want you to live your best life. Get there that much faster because one day that success will create complication and we'll be waiting right there with the front porch light on. I'm your host, Brian, joined by Mr. Bo. Money Guy Team, out.

• 22:59Speaker 04

  Hey, Bo's here. When your next track starts, listen for the decisions that the artist makes. The vocal pushed right up front. The bass that waits half a beat. That sample from a 70's underground gem. Every choice deliberate. With Bo's, you'll hear it all. Your music deserves Bo's.

• 23:25Speaker 04

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