Can a $100K Family Ever Get Ahead?

Watch Daniel & Hannah’s original episode here: https://youtu.be/vn4VyUtE1j8 This episode brought to you by Abound Wealth. Take the relationship to the next level and become a client: https://moneyguy.com/become-a-client/ One year after appearing on Making a Millionaire, Daniel and Hannah return to show what really happens when life interrupts your financial plan. Between a totaled car, emergency surgery, Disney vacation, new debt, and unexpected expenses, this couple still increased their net worth from $104,000 to $154,000. Brian and Bo revisit the Financial Order of Operations (FOO), emergency funds, Roth IRAs, the 20/3/8 car-buying rule, renting vs. buying a house, retirement investing, and real-world wealth building. If you're in the messy middle balancing kids, debt, investing, and financial independence, this episode shows how consistent financial habits can keep you moving forward—even when life doesn't go according to plan. ⁠⁠⁠⁠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.

• 0:01Speaker 00

  This episode is brought to you by Google Chrome. You think you know a browser, but Gemini and Chrome, that's new. It can help you with practically anything on the web, like restoring a vintage motorcycle from a 50-page restoration blog, or finally break down that long article you've had open for weeks. Gemini and Chrome is here for it. Ready to make anything online make sense? There's no place like Chrome. Check responses set up required. Compatibility and availability varies 18 plus.

• 0:26Speaker 01

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• 0:45Speaker 02

  Last year, your total net worth was right at about $104,000. Annual income right there at six figures. Roughly a year later, our net worth is at $154,000. There is something on this net worth statement that was not on the other net worth statement. There was no debt previously. Now we have this whole new column on the ledger. We've got a car, and a vacation, and some furniture. What's going on there?

• 1:13Speaker 02

  Here we are. We get to sit down again. You guys came and hung out with us a year ago, and I'm excited to hear what's happened over the course of the last year. Give us a rundown. What happened immediately after the last time we sat down?

• 1:24Speaker 03

  It was a lot of fun. It was kind of like a whirlwind. It was, it was super fun just for us to be on here. It was a tremendous opportunity. And thank you guys for having us again.

• 1:30Speaker 02

  Absolutely.

• 1:31Speaker 03

  I'm not supposed to say the E-word. I said that last time.

• 1:34Speaker 02

  No, no, that's okay. You can say it. I like to share my lines. I like that.

• 1:37Speaker 03

  We were elated.

• 1:38Speaker 02

  Oh, look at that.

• 1:40Speaker 03

  Sorry. But we had a great time. Thank you guys for being gracious with us and having us on. Truly, I think we, we just were saying earlier, we were a little nervous, just kind of going out there and putting yourselves out there and talking about some stuff that is, you know, really important, obviously, personal finance and just some of the good and some of the, some of the bad that comes with that. But it was a great opportunity, and it was a good conversation started with family and friends. And I think it's been a great blessing.

• 2:02Speaker 02

  How'd the conversation go with you guys? Like, did you leave and have conversations? Or did you leave and you're like, okay, made it through that?

• 2:09Speaker 04

  Like, five minutes of that. You're like, okay, we did it. But it sparked good conversation ongoing. Like, it wasn't just for the first month or four or six months afterwards. It's something we've continued to talk about, which is, it's very beneficial. It's an open line of communication that I think sometimes in marriages, you know, money is, you handle the money. As long as I stay in my lane, then we don't have to talk about it. But it helps our communication and ultimately strengthens our marriage. So it's been good.

• 2:36Speaker 02

  Wonderful.

• 2:37Brian Preston?

  I was impressed. Y'all's comment section, everybody loved y'all as a couple, too. And that's not always the case, unfortunately. But the world loved y'all. So congratulations on that. Because this, by the way, comment section's not always right. But it's still, it doesn't hurt when, when, when they're so affirming of what y'all have as a couple as well.

• 2:55Speaker 03

  That was humbling. Very cool.

• 2:56Speaker 04

  It was interesting to see because we're not in any kind of space like this. The comments that we receive are from our children. And so...

• 3:03Speaker 02

  Did y'all read the comments?

• 3:04Speaker 04

  We did.

• 3:05Speaker 03

  We did, yeah.

• 3:05Brian Preston?

  See, I always, I kind of wish our guests didn't read the comments. Because like I said, we get more context because obviously, this is a public show. There's additional things going on that, um, and I just, I hope everybody will always treat people like they were sitting in the room with you. And that's not always the case with comment section. Sometimes you can get just far out of comment without thinking that there's a living soul beyond that.

• 3:30Speaker 04

  Yeah.

• 3:30Speaker 03

  But it was good. Some of it was used as fuel, too. You know, it's sometimes it's good to feel the pat on the back. Other times, it's good to go, hey, this guy and that, you know, they're doing this and that. That's, I wouldn't do that.

• 3:41Speaker 03

  The, the beauty of it, the personal finance is personal. And our journeys, you know, while it's very similar to a lot of people, ours is very unique in its own way. So to answer the other part of your question, did we come away with it a little nervous? Yeah, I think there was a little time where we went, hey, let's, uh, let's stay away from Money Guy content for a little bit. Let's just, we did that for, uh, I just needed like, I don't know, a couple of weeks to not watch the show every day or every week. But, um, but we came back and anyway, it's, it's been a lot of fun.

• 4:06Speaker 02

  Well, for folks who didn't watch the, the original episode, we kind of concluded, we gave you guys some homework. And I thought it'd be fun, interesting, exciting, maybe, to see, to kind of relook at the homework that we gave you and see, did you do it? Like, did you follow through on it? And then what changed? Because what's great about personal finance is personal. And we can set out like best laid plans, but sometimes life happens and things change. And I'd be curious to know if that's what happened over the last year for you guys.

• 4:32Brian Preston?

  Where's your red pen?

• 4:33Speaker 02

  I know.

• 4:33Brian Preston?

  You're gonna do homework. I felt, I was never getting homework.

• 4:36Speaker 02

  What color do you use?

• 4:37Brian Preston?

  What color do you use when you grade papers?

• 4:39Speaker 04

  I have flare pens, so it's all, I don't grade papers, but if I ever have a paper... You want to know what flare pens are?

• 4:45Brian Preston?

  Oh, what are flare pens?

• 4:46Speaker 04

  They're a mixture between like the best gel pen you've ever had and a marker or a Sharpie, and it doesn't bleed through on the paper.

• 4:52Speaker 02

  Oh, wow.

• 4:53Brian Preston?

  I see some flare pens in our future.

• 4:55Speaker 02

  Homework, get flare pens.

• 4:57Speaker 04

  A shameless plug for Paper Mate.

• 4:59Speaker 02

  This show brought to you by...

• 5:00Speaker 04

  I can't believe it.

• 5:01Speaker 02

  Flare pens, awesome. Okay.

• 5:03Speaker 03

  We're on the sponsorship.

• 5:03Speaker 02

  So one of the first things, one of the first things we, uh, we asked you guys, we kind of looked at your net worth statement. You're so kind to share one with us last year. We're gonna look at it again this year to see where you are. But there were some like, um, a number of different like older retirement accounts and stuff. We said, hey, one of the things you could do that could kind of simplify your financial life is look at maybe consolidating some of those older retirement accounts. A few phone calls, a few pieces of paperwork. Did you guys work through that exercise of consolidating and putting some of those accounts together?

• 5:27Speaker 03

  Why, I thought you were laughing. I was like, why are you laughing? Um, the first homework, no. We, we did not do a great job of that.

• 5:33Speaker 02

  We're not off to a great start.

• 5:34Speaker 03

  Red pen.

• 5:35Speaker 02

  That's fine. Any, any reason why? Like, is there any reason why you didn't work through that?

• 5:40Speaker 03

  Not necessarily, uh, other than laziness is a bad word to say. But truly, I think we...

• 5:48Speaker 04

  It wasn't a priority. I should say that. We didn't make it priority number one. I knew that we, correct me if I say it wrong, but pulling from investing, which was another part of the homework, and starting to go into the emergency fund, that is what, I think, within probably the first two weeks of being home, we did that. And that was the conversation. And then consolidating, we said, oh, yeah.

• 6:11Speaker 03

  Yeah, there's still some work to be done in the consolidation station.

• 6:14Brian Preston?

  Is part of it because you have to reach out to an old employer? Or is there, is there, is it logistics? What's, what's, what's the pain point?

• 6:23Speaker 04

  I probably do have to reach out to my employer. I'm pretty sure I do now that you say that. I'm not afraid to. I left on really good terms. We moved. That was the only reason we left. Because now that I'm thinking about it, I can't just call and say, hey, roll it over. I've got to call them.

• 6:35Speaker 03

  At the risk of sounding naive, just didn't...

• 6:37Speaker 02

  Don't know the process.

• 6:38Speaker 03

  Didn't do, didn't know the process. Didn't want to make a, you know, a fault or something like that.

• 6:42Speaker 02

  Well, it's interesting. For those who, maybe they didn't watch the original episode, how old are you guys?

• 6:45Speaker 03

  How old am I? You got it wrong earlier.

• 6:47Speaker 04

  You're 32.

• 6:48Speaker 03

  Sorry.

• 6:48Speaker 02

  32.

• 6:49Speaker 03

  32 and 30.

• 6:50Speaker 04

  And I'm 30.

• 6:50Speaker 02

  30, and then you've got kids at home?

• 6:52Speaker 03

  Yes, sir.

• 6:53Speaker 02

  How many kids you have at home?

• 6:54Speaker 03

  Two kids.

• 6:55Speaker 02

  All right. So when I hear 32 and 32 kids, that immediately sounds to me like sort of a messy middle type situation. It is not incredibly uncommon for folks in the messy middle to have financial stuff just kind of, I don't want to say fall to the back burner, but just not be top priority. And it sounds like that's exactly what happened for you guys. Hey, we have these other things we have to prioritize, and we're gonna put our attention on those things, and we're not gonna put our attention on these things. Sometimes that's okay. Like, when it comes to consolidating your retirement accounts, I'm gonna give you guys a pass. It's a thing that'll make your life easier a little bit. But is it the worst thing that you didn't do that? Not necessarily. It's much worse if you're like, oh, we didn't get our estate documents. We didn't do insurance. We didn't do that kind of stuff. But in terms of account cleanup, that's okay. But it is a reality that sometimes in the messy middle, we have competing priorities. We have to figure out where we're gonna put our, our effort and attention.

• 7:40Speaker 02

  So I'm gonna give you a pass on that homework.

• 7:42Brian Preston?

  I would at least like, just to ensure, the money is working, it's invested, it's in investments like index funds, low cost. Because I also gave you some homework on, go a little deeper dive on trying to, to get the best investments, lowest costs, index varieties if possible. As long as that's working, I think it's okay that it's in separate accounts. Just, that's more homework for down in the future.

• 8:03Speaker 03

  Yes.

• 8:04Speaker 02

  Oh, yeah, I guess I should keep homework for after this episode. Guess what the first one's gonna be?

• 8:08Speaker 04

  I'll take the fall for that one. It's my 403B. I need to roll it over.

• 8:12Speaker 03

  My 401K, too.

• 8:13Brian Preston?

  Y'all both had homework.

• 8:14Speaker 03

  It's our.

• 8:16Brian Preston?

  Very selfless. I appreciate that.

• 8:18Speaker 02

  Okay, so another thing we said is, hey, y'all ought to start doing an annual net worth statement. You ought to sit down and look at, okay, what's everything that we own? What's everything that we owe? Has that been a practice that y'all have put into place since we got together?

• 8:29Speaker 03

  Yes, uh, we, we used this awesome template that we got sent.

• 8:32Speaker 02

  Yeah.

• 8:33Speaker 03

  Where did we get that cool template? If you guys don't have one, I recommend buying one from the Money Guy show.

• 8:41Brian Preston?

  Are you using the tool or the template that we gave? Because the tool is the one that has the dashboard and all the calculators and so forth.

• 8:47Speaker 03

  And it was really cool to put that. You could see the whole story. We went even back to when we first got married and everything was negative. But it's been really cool and reassuring just to see that over the past couple of weeks, building into the past couple of years.

• 8:58Speaker 02

  Well, one of the best parts about tracking is that you actually do get to see progress. Hey, where were we? We did some things. Where are we today? And I thought it'd be really fun for us to look at because now we have these two data points. And we looked at your net worth statement last year. This is what it looked like. Last year, your total net worth was right at about $104,000. Annual income right there at six figures, with the bulk of your net worth being in your investment accounts. About $99,000, $100,000 of liquid investments that you guys had put together, which was awesome. Well, now, fast forward roughly a year later, our net worth is at $154,000.

• 9:34Brian Preston?

  Wow, look at that.

• 9:35Speaker 02

  So like, income has also increased as a household. Your investments went from $99,000 to $130,000 in roughly a year. So we've seen some really great things happen. Had we not been tracking, had you not done the exercise of like, you wouldn't know, right? Like, you wouldn't be able to look back and say, look at all these things that we accomplished. Now, there is something on this net worth statement that was not on the other net worth statement. There was no debt previously. Now we have this whole new column on the ledger. We've got a car, and a vacation, and some furniture. All right, what's going on there?

• 10:12Brian Preston?

  I'll start at the bottom, if that's okay.

• 10:18Speaker 03

  I think Brian said something, maybe don't get cute with it. Maybe we're getting a little cute with the furniture. We needed, there were need and wants, there's some, you know, maybe differences there, but we wanted an upgrade, needed some different things in the furniture realm, just growing family, you know, bedding, things like that furniture. And at the 0% APR, we're paying it monthly essentially, but we have 1,200 bucks left to pay it off.

• 10:47Speaker 02

  Okay, so what, walk us through, how much did you spend on the furniture? And then what are you paying monthly on that to knock it out?

• 10:52Speaker 03

  We are paying 52 a month to get, yeah, is that about right?

• 10:59Speaker 04

  Yes.

• 11:00Speaker 03

  Sorry, about 52 a month.

• 11:02Speaker 04

  Oh no, I'm glad you brought that one up. I know that one off the top of my head.

• 11:04Speaker 03

  Oh, very good.

• 11:05Speaker 04

  I know that payment.

• 11:07Brian Preston?

  So how much did y'all start off with though? How much was it, how much furniture was it?

• 11:10Speaker 04

  I want to say it was over $3,000.

• 11:12Speaker 03

  I think it was close to 3,000.

• 11:13Speaker 02

  3,000 dollars.

• 11:14Brian Preston?

  Obviously y'all are sending extra money then, because if you're only paying $50 a month and you're down to 1,200.

• 11:19Speaker 02

  I was doing the math.

• 11:20Brian Preston?

  That's $600 a year, that's not knocking it down.

• 11:23Speaker 03

  Yeah, we put a good bit down and then, anyway, it's down just to 52. It was for about two years, but we have, we started that about a year ago.

• 11:31Speaker 02

  Got it, okay.

• 11:32Speaker 03

  So we have.

• 11:32Speaker 02

  So that'll be gone in two years.

• 11:34Speaker 03

  About two years, excuse me.

• 11:35Speaker 02

  Based on those payments, okay. So that's the furniture, what about the, what's the vacation?

• 11:39Speaker 03

  That's getting really cute with it, I guess.

• 11:43Speaker 03

  Part of it was, you know, like I said, we were kind of clapping for ourselves. One of our goals was to get to that one times our income. And since we, when we got to that point, we wanted to have a small, you know, maybe a celebration.

• 11:53Speaker 02

  Celebrate the milestone.

• 11:54Speaker 03

  Took a family vacation, another good opportunity, good opportunity to get cute with it and paid off monthly. We went to, went to Disney World.

• 12:02Brian Preston?

  Oh, look at that!

• 12:04Speaker 02

  Now he's just baiting you, that's what it is, right?

• 12:06Speaker 03

  You ever been?

• 12:07Brian Preston?

  Disney's, Disney's a little, not as cheap as it was when I was taking the kiddos there, but it's, it's, it's, it's still great memories.

• 12:14Speaker 02

  So $1,050 left on that, what's the payment on that?

• 12:17Speaker 03

  100 a month.

• 12:18Speaker 02

  100 a month.

• 12:18Brian Preston?

  That was just for the parking.

• 12:21Speaker 03

  I think we got a balloon.

• 12:22Brian Preston?

  I'm kidding, of course.

• 12:23Speaker 04

  Yeah, we got a balloon and a bubble wand.

• 12:25Brian Preston?

  How much did y'all spend on that trip?

• 12:26Speaker 03

  It was a good chunk.

• 12:28Brian Preston?

  So, I mean, there is, what I'm amazed by is, because it's hard to go to Disney, it seems like, for less than $4,000? I mean, it's, it's, it's hard, see, y'all probably only have $1,000 left, and I do want to know about the car loan. Actually, I'll hit pause, because I want to hear about the car loan before we talk about cash.

• 12:44Speaker 02

  I didn't know where you were going, I was, I want to, I want to hear.

• 12:47Speaker 04

  Don't skip that one!

• 12:48Brian Preston?

  I don't want to, I don't want to miss out on all the death stories.

• 12:50Speaker 04

  You want me to do the car?

• 12:51Brian Preston?

  I feel like I'm just telling all the fun stories.

• 12:53Speaker 04

  I'll tell the car story.

• 12:54Brian Preston?

  You want to tell a fun story?

• 12:55Speaker 04

  The month of February was a lot of fun. We were cruising April all the way to January, and I think we went to the ER three times in the month of February, yeah. But the first one, one of them, she's great, she fell in the yard, couldn't walk, turns out she just didn't want to walk.

• 13:10Speaker 03

  Everybody's okay, I should say.

• 13:12Speaker 04

  Everybody's okay, sorry. This is the lead up to the car. I had an emergency appendectomy, but to start everything off, Daniel went to the ER because he was hit head on in a car crash.

• 13:21Speaker 02

  Oh wow!

• 13:23Speaker 04

  So totaled the car, and that is where we get.

• 13:26Speaker 02

  All that was in February?

• 13:26Brian Preston?

  What speed?

• 13:27Speaker 04

  All of it.

• 13:27Brian Preston?

  What speed?

• 13:28Speaker 03

  Gone about 35.

• 13:30Speaker 02

  Oh my gosh!

• 13:31Speaker 03

  It was, it was an intersection type thing, anyway.

• 13:34Speaker 04

  I mean, like, routine on the way home from work.

• 13:36Speaker 03

  Yeah, less than a mile from, from my house, kind of thing.

• 13:38Speaker 02

  You're okay, everything was?

• 13:39Speaker 03

  Everybody, yeah, I'm okay. And thankfully I was driving by myself, didn't have the girls or anything like that.

• 13:44Brian Preston?

  That's terrifying.

• 13:45Speaker 02

  So two emergency room visits?

• 13:47Speaker 03

  Three.

• 13:47Brian Preston?

  Three.

• 13:48Speaker 02

  Three emergency room visits.

• 13:49Speaker 03

  Back to back to back.

• 13:49Speaker 02

  And a totaled car. You know, one of the things that we had talked about, and we're kind of getting ahead of ourselves, but one of the things we said is, hey, last year, you never know when the unknown, unknown things are going to happen. We always talk about.

• 14:00Brian Preston?

  Life is going to happen.

• 14:01Speaker 02

  Proverbial bus, but you literally got hit by the literal car, and then you have the other things happen. How were you able to like, cover those, those emergency room visits and the car stuff? How were you able to pay for that?

• 14:14Speaker 03

  So, yeah, when we, not to get too far ahead of ourselves, but when we left here, the goal was to, you know, hey, we're spending a lot of money going outside of the foo, you know, out of order. So we started, we dialed all that back and really started getting aggressive into our cash, just so we could have the three to six months, and that was our goal. And we were getting really close to that goal, very, very close, on pace. Really excited about it too. And thankfully, just like we talked about, you never know when these things are going to happen, we were very blessed, maybe we had a bubble and in our minds, we thought we were invincible or, or something like that. Everything's going to go to plan. And then out of nowhere, on a random Tuesday, everything can, on a Monday, excuse me, everything can be very outside of your plan. So basically, we took a good bit of the cash and went towards, you know, Hannah had the,

• 14:57Speaker 03

  obviously, we have insurance and all that kind of stuff. But you don't plan for an emergency surgery, you don't plan for multiple trips to the ER, and then obviously, we had a car that was completely paid off.

• 15:07Speaker 04

  So that was hard.

• 15:08Speaker 03

  And the car that only had, you know, it had 70,000 miles on it, and I was going to drive it forever, it was a Honda Civic, it was great.

• 15:15Speaker 04

  Charlie's car is gone now.

• 15:16Speaker 03

  Yeah, we were, the goal was to give that car off maybe one day.

• 15:19Brian Preston?

  So all the medical, because even if you have health insurance, most medical nowadays, I mean, seems like emergency room visits are 500 bucks, it feels like, you know, surgery, you have a deductible typically. I mean, how much did y'all, do you know how much y'all had to come out of pocket for that stuff?

• 15:35Speaker 03

  It was in the thousands, for sure. It, it took, at that time, it probably took, overall, probably took close to half of what our savings were at.

• 15:42Speaker 02

  Well, I was going to ask, because last year, when we sat down, you had about, I think it was $5,000 in cash that you said up, we said, hey, let's, you know, let's dial down the Roth contribution, which is a hard thing for us to say, but it's the right thing to do in this situation, build up the, where was the emergency fund before February? Like, what number had y'all gotten up to?

• 16:00Speaker 03

  Kind of spitballing.

• 16:01Speaker 02

  Yeah, yeah, yeah, yeah.

• 16:02Speaker 03

  85 maybe, 8500 is my guess, something like that.

• 16:05Speaker 02

  So we're making like, some really good progress, moving towards that goal. And then this stuff happens, well, that's exactly what an emergency fund is there for. Like, one, it's amazing, I'm so happy everyone's okay and everyone's healthy, once you get past that, it's okay that this thing happens. So often, people think that the financial order of operations is, I go from step one to step two, and step two to step three, and it's this straight line up, and our life just moves, that's not the way the real world works, that's not the way that life works. And you guys are a great example of why it makes sense to have that emergency fund there in place, because had you not had it, what we'd be looking at right now would look very different than what we are getting to look at right now.

• 16:42Brian Preston?

  What I, what I like is that you didn't have to make any desperate decisions. I mean, you had the, the money to, to cover all the stuff. I'm also, I, I just did some loose math here, you know, you figure the medical stuff was at least three grand, you figure the, the Disney trip was probably around four grand, and then the furniture that y'all paid down is about two grand. There's $9,000 that y'all have used, whether it's all these things that have come your way, plus, we've still seen an increase, because I know y'all don't like to count that checking, because that's, that's just more of a clearing account, so it's more of your emergency reserves is getting close to $11,000. It was around five the last time y'all were here. Well done!

• 17:21Speaker 02

  Yeah.

• 17:22Brian Preston?

  I mean, and, and you can also, you can see your army of dollar bills, even though y'all feel like you're not doing what you're supposed to all the way, because you're still stuck in this cash stage, and we'll talk more about that, but to see your army of dollars grow close to 30% last year, I mean, it's pretty wild to go from 100,000 to 130,000. A lot of good stuff i- is building in the background, even though life didn't exactly go the way you wanted it to.

• 17:48Speaker 03

  Right.

• 17:48Brian Preston?

  Before we moved on, did you say what the new car is? Because I know you got rid of the Civic, what, how did the car buying transaction go? Did you stay within 238? I mean, I want to know more.

• 17:58Speaker 02

  That's just water, you know, that's water.

• 18:01Brian Preston?

  Do we need to put this little something in there? Because car buying experience is never easy either.

• 18:05Speaker 03

  Car buying was not a great experience. I feel bad I'm talking, you want to tell the more fun stories?

• 18:10Speaker 04

  What about my appendectomy?

• 18:11Speaker 03

  No. Please don't.

• 18:12Speaker 04

  It was great, wonderful!

• 18:14Speaker 03

  What a great time we spent. Most expensive hotel stay we had.

• 18:17Speaker 02

  Yeah.

• 18:18Speaker 03

  Okay, so.

• 18:19Brian Preston?

  Y'all are awesome.

• 18:23Speaker 03

  We know about 238, we love 238.

• 18:25Brian Preston?

  Uh oh, uh oh, we went foolish, didn't we? We went foolish, I can already tell, I can already see there's going to be an asterisk on this answer.

• 18:33Speaker 03

  There's an asterisk, but, and again, I hate breaking the rules, and I feel like we're just bending as many of them as we possibly can at this point, but we did a lot of the math, just to make sure that what we were doing wasn't a completely terrible decision, although it's not, this one's not going to get a pass. We got a Honda CRV, again, we have two small kids, driving a Civic was already difficult enough with just me in it, let alone having the two girls in it.

• 18:57Speaker 04

  Because you're 6'4".

• 18:58Speaker 03

  Okay, I'm slightly tall.

• 18:59Speaker 02

  Big guy, little car.

• 19:00Brian Preston?

  We make everybody look tall, you know, so.

• 19:02Speaker 03

  I'm also straight.

• 19:03Speaker 04

  So our kid's seat in the back is already just.

• 19:05Speaker 03

  So we, you know, we got a little bit bigger car, it is new, it was a, a new CRV, and it's not the, you know, it's a EX, it's not, we're not, nothing crazy. Overall, it was thir, oh, it's, good, it's on there, what it's worth today, it was about 32,000 and some change, and we put 50% down on it.

• 19:27Speaker 02

  Wow, okay.

• 19:29Speaker 03

  Just from the, you know, some of the cash we got back from the insurance, and we're paying, it's at 3.49%, so we're paying about 320 bucks a month now. So not 238, I'm not going to do that public math, but it's 50 something, something, how about that? 50 something.

• 19:44Speaker 02

  Look, you know what, 238 is a guardrail for like, hey, to get into a car, this is what you could do, I have no problem with you putting 50% down, right? Like, no, I would like for emergency fund to be fully funded, kind of hearing you did that, maybe that was a, a trade off that I wouldn't have chosen, but, what'd you say the car payment is?

• 20:03Speaker 03

  320.

• 20:04Speaker 02

  320. And so, 3.49%, not a crazy rate on an automobile right now, and how long did you finance it for, what was the term?

• 20:13Speaker 03

  60 months.

• 20:16Speaker 04

  It's okay.

• 20:18Speaker 03

  It's not okay.

• 20:19Speaker 04

  It's not okay.

• 20:19Speaker 03

  We're not gonna get a pass.

• 20:22Speaker 02

  You were doing so good.

• 20:24Brian Preston?

  I have the math.

• 20:25Speaker 02

  You were doing so good.

• 20:26Brian Preston?

  If the payment was, you can still keep it as a 60 month loan. They let you prepay them. If you just increased your payment to 498, it would be paid off within the three years.

• 20:37Speaker 03

  That's cool.

• 20:38Brian Preston?

  So I'll do the public math for you.

• 20:41Speaker 03

  Thank you.

• 20:42Brian Preston?

  So we just, there might be some potential to

• 20:44Speaker 03

  A little bit squeeze.

• 20:45Brian Preston?

  Throw a little bit extra. But that's still, I think you're going to leave some, some margin there for still doing life. But just make sure that you always stay ahead of the depreciation on the car. But you're, you're, you put down 50%, that's gonna keep you well ahead. But it just keeps, gets you out of the car games that much sooner.

• 21:01Speaker 03

  Yeah.

• 21:01Brian Preston?

  Cause what happens when all of a sudden Hannah's car needs to be replaced? We don't want to have two car payments.

• 21:06Speaker 02

  What's, what kind of car are you driving right now?

• 21:08Speaker 04

  2018 Toyota Highlander.

• 21:09Speaker 02

  Oh, it's practically brand new. So that's great. That's great.

• 21:12Speaker 03

  Yours is in good condition too.

• 21:13Speaker 04

  It's in great shape.

• 21:14Speaker 03

  It's also paid off.

• 21:15Brian Preston?

  But it, but y'all are a perfect case study, cause that's the same thing. I've had that happen twice with my wife's car is that it's the car accidents. It's the, the engine blows up or, you know, there's things that happen that you just don't count on. That you're like, oh crud, now I've got to make a decision, even though I was kind of hoping this would last another three or four years.

• 21:34Speaker 03

  Yeah.

• 21:35Speaker 02

  It's not that bad. It's not great.

• 21:38Brian Preston?

  Hindsight's 2020.

• 21:39Speaker 02

  It's not, it's not that bad. Over this past year, you've had some stuff happen, right? You had February happen, which was super intense. There, we also kind of went through some goals that you guys had about, here are the things we want to do. Here are the things we want to accomplish. What's changed or how have, you know, one of the homework items we gave is, hey, rethink your goals. Retalk about what's that look like? Do we want to buy a house? Where's that? How does that fit in? As you guys sit here today, having lived through the life that you've lived through, where are you in terms of your goals forward? Cause it's always great to kind of revisit those, or the goals we had last year, same goals we have this year. We still want to move in that direction. Where are you guys at there?

• 22:13Speaker 04

  Start with the house?

• 22:14Speaker 02

  Yeah, go ahead.

• 22:15Speaker 04

  So start with rent too?

• 22:16Speaker 02

  Whatever you want.

• 22:17Speaker 04

  So our rent last year was a thousand dollars.

• 22:20Speaker 02

  Okay.

• 22:20Speaker 04

  Which at the time I was itching to get out of the house. The, and everyone in the comments was like, wow, the biggest line there is the utility bill. It gets hot. It's a poorly insulated house, but it's at a very affordable rate for us. But now instead of a thousand dollars, it's 1250.

• 22:36Speaker 02

  Okay.

• 22:36Speaker 04

  So it went up 25%.

• 22:39Speaker 04

  We are still not itching to get out though, because you know, when you guys helped us walk through everything, putting, putting things into perspective. We're good where we are. We would much rather do the 1250 than take on a mortgage. That's a lot more than that. So, but saving for a house, have that saving account.

• 22:58Brian Preston?

  Still a goal.

• 22:58Speaker 04

  It's still a, it's a goal.

• 22:59Speaker 02

  But not something that has to happen immediately.

• 23:01Speaker 04

  Right. It's not immediate.

• 23:02Speaker 02

  Love that.

• 23:04Speaker 00

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• 23:58Speaker 04

  It can grow.

• 23:58Speaker 03

  It's a dream. I mean, it's definitely something we want. We haven't, our ideas and we like Zillow as much as anybody else. Shameless plug if that's another problem. But yeah, right now it's not, even at 1250 with a 25% increase, even if it were to go up, maybe our landlord watched the video. I don't really know, but I'm in, they're, they're great. It's a family friend and we, you know, like I said, we're blessed to have it even at 1250. I'm sure they could rent it higher than that.

• 24:21Speaker 02

  Sure.

• 24:22Speaker 03

  So.

• 24:22Speaker 04

  And I will say it helps on gas too. We don't think about that a lot.

• 24:26Speaker 03

  We're very close to everything.

• 24:27Speaker 04

  It's right down the street from where our kids go to school. So that is a huge blessing.

• 24:31Speaker 02

  I think so often there, and we talked about this last time, but it's worth repeating. Renting gets such a bad rap. People are like, oh, I'm just throwing money away, throwing money away, throwing money away. That's not the case anymore in terms of how expensive housing has gotten. We still love homeownership and we still think it's a wonderful goal when it makes sense. And for the circumstance you guys are in right now, I do think that renting is probably the best solution for you guys to be able to do the things you want to do over the long term. And that's okay. And I just want people out there to hear, it's okay to rent. You can still build wealth. You can still have your net worth go up by 50% in a year, even if you're a renter. And that's a totally okay thing to do.

• 25:11Brian Preston?

  Well, I think a lot of people, they have a recency bias in the fact that post pandemic, we watched housing go up over 50% in most markets. And everybody felt like, oh my gosh, this thing's running from me. I will say the last two or three years, we've seen things kind of level out to a degree. I mean, they're still going up slightly in some markets, but it's, it's not running from you like it was back, you know, from 2021 through 2023 period. So I think it's okay if y'all take a breather, get caught up on some of these other goals, build it up in the background. You're, you're going to be okay. You're, you're going to be able to have the, the time to make this dream happen for you.

• 25:50Speaker 02

  Brian, this is literally it. What we're doing right now is literally one of my favorite things that we get to do. Sitting across from other real people talking about their finance.

• 25:59Brian Preston?

  Yeah. You guys get to see this on Making a Millionaire, but we also do this for our clients every day at Abound Wealth.

• 26:06Speaker 02

  We get to dig in where they're at, figure out where the gaps are and find where we can optimize and build a plan that works specifically for them and for their financial goals.

• 26:15Brian Preston?

  If you've been watching this and thinking to yourself, hey, I want that. I want a professional with decades of experience in my corner, looking at my specific situation. We're here to help.

• 26:25Speaker 02

  Yeah. Here at Abound Wealth, we are fee only fiduciary advisors. That means that we are legally required to work in your best interest. And we love helping our clients optimize our army of dollar bills so that they can live their best lives.

• 26:39Brian Preston?

  If you've reached a point where you're ready for some help, go check us out at aboundwealth.com or click on the link right below. We'd love to connect and see if we're a good fit for you.

• 26:48Speaker 02

  That's right. Head to aboundwealth.com and let's see if we can do this for you two.

• 26:53Speaker 03

  What about schooling? Cause we talked a little about schooling last year. Has that changed? Still a goal, thinking about how you're gonna navigate that?

• 27:00Speaker 04

  So the Choose Act is something that is enacted in Alabama now. And you can apply to send your child to any school that is participating in it. So it's a lot of private schools. It'll send, let's like maybe three quarters. No, it's a set amount.

• 27:15Speaker 03

  Yeah.

• 27:16Speaker 04

  I don't know if I'm

• 27:17Speaker 03

  Six or seven thousand.

• 27:18Speaker 04

  Yeah. Seven thousand dollars.

• 27:19Speaker 02

  Okay.

• 27:19Speaker 04

  They will give you to put towards schooling for your child.

• 27:23Speaker 02

  It's just like a scholarship, basically a scholarship for kids to go to private K through 12 in the state of Alabama.

• 27:28Speaker 04

  Yes.

• 27:29Speaker 02

  That's awesome.

• 27:30Speaker 03

  We have to apply and we have to get it. I know there's a pool, our applications would start.

• 27:34Speaker 04

  We are not in the priority. So that is something we have to factor in, but.

• 27:40Speaker 02

  But it's an option that's

• 27:41Speaker 04

  It is an option. Yes.

• 27:42Speaker 02

  How'd you guys find out about that? Like what did you?

• 27:44Speaker 04

  It's highly advertised now in Alabama.

• 27:46Speaker 02

  Okay, got it.

• 27:46Speaker 03

  A lot of word of mouth.

• 27:47Speaker 02

  Well, I just, I think it's one of those things that people might not realize. Oh wow. My state has this thing where they have this opportunity that I can apply for that might be available.

• 27:56Speaker 04

  Yes. We know several families who have done the Choose Act and they've received it. So we're hopeful.

• 28:02Brian Preston?

  How old are your, are your, your girls right now?

• 28:04Speaker 04

  Five and I'll go ahead and say Ally's three.

• 28:06Brian Preston?

  Okay. So what, five at kindergarten already?

• 28:09Speaker 04

  Yes. Uh, in August, yes.

• 28:10Brian Preston?

  At your school? Cause I know that was one of the things we talked about. Okay.

• 28:13Speaker 04

  No, not at my school. Um, Daniel's mom is actually going to teach her.

• 28:17Speaker 02

  Okay.

• 28:17Speaker 04

  And that's a choice that, yeah, yeah.

• 28:19Brian Preston?

  It's at the same school she's currently at. It goes to kindergarten. So.

• 28:21Speaker 04

  And I say this unbiasedly, she's a phenomenal kindergarten teacher. I'd want to keep her there. She is worth every, every cent that we're making.

• 28:29Speaker 02

  You hear that mom? You hear that? She thinks you're great.

• 28:33Speaker 02

  That's awesome. Good. You guys are doing wonderful. You are in a fantastic spot. I love that we were able to have this conversation last year. That conversation wasn't the end of the conversation. It was kind of the beginning of the conversation. Allowed you guys to keep it going. And here we are a year later, you're in a great spot. I can't wait to see where you guys are three years from now, five years from now. Maybe some less Februaries between now and then.

• 28:54Speaker 03

  Oh man.

• 28:54Speaker 02

  But some great, you guys are just, you're doing it.

• 28:58Brian Preston?

  I am curious though. There are a few things.

• 29:00Speaker 02

  Okay.

• 29:00Brian Preston?

  Cash flow wise. I remember last time y'all were in here, you're, I was always so impressed and I gave y'all several compliments. Y'all's expenses, your monthly budget, your burn rate was right around $5,000 a month. So when the team presented to me your update and I saw it had the car payment built into it, cause it has the, the car payment.

• 29:18Speaker 02

  There's a 320 right there.

• 29:20Brian Preston?

  Instead of the 500.

• 29:21Speaker 02

  And it's got some debt payment in there at 157.

• 29:23Brian Preston?

  How are we still at 5,000? What did y'all cut?

• 29:26Speaker 03

  Uh, we got a little, I got a really exciting, uh, wild hair, I guess, on, um, you'd love that. You remember, uh, Christmas Eve? Christmas Eve, I spent a whole day talking to our wifi and insurance.

• 29:40Brian Preston?

  Oh, you went to all the ungrateful service providers.

• 29:43Speaker 02

  Let's go.

• 29:45Speaker 04

  Christmas Eve.

• 29:45Speaker 03

  It was totally worth it. It was Christmas Eve, you know.

• 29:48Speaker 02

  Daniels on the phone. That's when you decided to call them?

• 29:50Brian Preston?

  Dude, you do all your own insurances as well?

• 29:52Speaker 03

  I did, yeah. So, uh, anyway, we found, we've been with the same people for years and years, and we watched that number climb and climb and just talked with a couple of folks and just like that, we're able to cut, I don't, off the top of my head, I think for even just internet and phone, we were able to cut like seventy dollars or so per month.

• 30:08Speaker 02

  Just with a phone call, phone call, absolutely worth it then.

• 30:11Speaker 03

  Yeah, and insurance was even, um, better. It's not represented on here, because last year, our insurance was, you know, X. After the accident and a new car, our insurance was two X, almost three X. So I called and I thought, I thought that had to be a mistake. And they said, no, that's the, that's real rate. So after shopping that, we were able to get it down even below what X was last year. So, um, now the ungrateful service providers are gonna up it again now that I'm talking about it. But, um, yeah, we were able to keep a lot, and we cut a couple of small subscriptions, um, here and there. We don't have a ton of subscriptions, but, um, just little things like that.

• 30:44Speaker 04

  I gave you so much grief, but I do appreciate that.

• 30:46Speaker 03

  No, but that's in the moment, not the best timing, not the best timing, trying to get girls ready and stuff like that, but, uh, anyway.

• 30:53Speaker 02

  You know, it's kind of genius, because I gotta believe the person on the other end of the phone's like, this guy's calling me on Christmas Eve? Yeah, okay, whatever, I'm gonna do whatever, I wanna get home too, I'm gonna do whatever you want. It kind of was genius on your part.

• 31:02Speaker 03

  It was next level, there's some leveling there, yeah.

• 31:04Brian Preston?

  That's, and for anybody who doesn't know in the audience is that we, when we say ungrateful service providers, there's a lot of our service models that are set up to reward new customers, but not reward existing customers. So you have to be a proactive user of their products, and that's why we call them ungrateful, because they don't want to keep your business, you have to go advocate for yourself and get the best prices.

• 31:26Speaker 03

  And we were, we were able to lock in, um, just the phone and internet anyway, for five years. So that's not moving for five years, really excited about that.

• 31:33Speaker 02

  Well, I think what's so.

• 31:33Speaker 03

  And don't call them again.

• 31:34Speaker 02

  What's so encouraging, I think, to the folks out there listening, is that even though you added a car payment, and even though you have these two other debt payments that are kind of silly and being cute with it, but they're there, right? You got these two other car payments, and your rent went up by two, even with all those increases, because you guys were very diligent, you were able to keep your budget roughly the same. You were able to be an active participant in your financial life, command your army of dollar bills well, and even with those additional expenses, you guys were kind of able to stay net neutral. That's awesome. That's a great example of not allowing your lifestyle to creep, but allowing your lifestyle to improve and your budget to stay the same, which I think there's a lesson to be learned from that.

• 32:11Brian Preston?

  I, I am starting to think, I mean, how, y'all are, y'all are doing so well. What's your new update on when you think you'll be out of step four? Because that was the big focus from the last meeting, was that y'all, and, and I could know the frustration, because you want to get in step five, so you can start funding those Roth IRAs again. Um, especially when you see your army of dollar bills is growing so well. Y'all seem to be closer, I mean, our months, give us, give us a, a feedback on how fast we're going towards this.

• 32:40Speaker 03

  Before today, before we talked about getting the car payment to five hundred, we were gonna move the, uh, cash up, um, up to about three hundred and fifty is what we were thinking. Right now, we're doing two fifty a week into the high-yield savings, which gets about three point one percent, and that changes all the time, I feel like. Uh, standing today, um, we are closer to that eleven, I think it's eleven two, eleven three. Um, so originally, our goal was about sixteen thousand, that covers three months' living expenses, um, and some change, uh, and, excuse me, three months and the one thousand, that is, to cover the deductibles, so we're really close. I mean, I would say by October, that's bad math, maybe, but something like that, October, November.

• 33:17Speaker 02

  And I'll argue, if you, if you have three months of living expenses, you don't have to add the deductible on top of that, you can include that in that. So maybe the goal is really closer to fifteen thousand, I think sixteen thousand's okay, or like fifty one hundred, but somewhere in that ballpark, I think, once you get there, I'm gonna argue that for you guys, that is a fully funded emergency fund, or at least it's a, a well-funded emergency fund, where now you can start doing some of these other.

• 33:39Brian Preston?

  Well, and think about, I'll make the same point I made last time. If you, if you reach here, because Bo just found you another thousand dollars, maybe in September, you know, if y'all cross into this threshold in September, you still have until the following April to fund these Roth accounts. Y'all, y'all are gonna still be able to get some of this money in there. So we might only have to sit on the sideline, even with the chaos that y'all have had in the last year, you missed last year, you know, or whatever the, the year was. I think there's, I'm optimistic, because the good news is, you had money when the emergencies came, and the good news is, when it rains, it does pour, and that's what I, the point I made last time. But y'all probably do for a good, good patch, where, you know, knock on wood and, and prayers be answered,

• 34:21Brian Preston?

  you don't have the chaos y'all have had in the last year, because it just, it doesn't normally happen all at once like that. But y'all, so hopefully we get a good stretch, and y'all get some dividends from all your discipline.

• 34:34Speaker 02

  Well, and I think about, what was the car payment you calculated that needed to increase? Did you remember the number?

• 34:37Brian Preston?

  Yeah, I have it over here on this page.

• 34:39Speaker 02

  Four hundred ninety-eight. I'm so excited to think about, we know, if you continue on this zero percent payment plan that you're on, in ten months, you're gonna have, uh, the vacation paid off. In twenty-four months, two years, you have the furniture paid off, that's gonna free up a hundred and fifty bucks a month, that's gonna be free and clear capital. If you adjust the car payment, and you follow twenty-three eight, and you get it paid off, that's another four hundred ninety-eight, so five hundred, there's an extra six hundred and fifty dollars that, per month, inside of the next three-ish years, that you're gonna be able to deploy towards these goals. Well, if you're putting away the two fifty a week you're doing right now, then you have another six fifty a month you have to work with, you're gonna blow through getting the emergency fund filled up, and also getting Roths filled up, and building your army of dollar bills, and being able to save

• 35:24Speaker 02

  for house down payment, it's gonna be awesome.

• 35:25Speaker 03

  That's good stuff.

• 35:26Speaker 02

  It's gonna be great.

• 35:27Brian Preston?

  And you're also, that's probably when you start funding the sinking fund for a house down payment at that point, too, because if you remember from our previous discussion, just because y'all's, y'all had good employers that were pretty generous with your contributions, and the teacher retirement system, y'all were doing close to twenty-two percent just by, by funding the match and other things. And once you fund the Roths, I think you'll be pretty much back to that same category, to where you can feel really comfortable with funding the house down payment.

• 35:53Speaker 02

  Any questions you have for us, you think forward, you think about the direction you're moving, any questions we can answer for you guys, between now and when we do this again next year? Because let's say this is an annual thing now, I'm kidding.

• 36:03Speaker 03

  One of them you just answered, that was, uh, about the sinking fund, about the, you know, what does it look like getting back into Roth, going into the house payment? How would you, I guess, follow the food, that would be the best way to do it. Get in there and max that Roth and then.

• 36:14Brian Preston?

  Right, no, I would, I would, after you get, get the Roths funded, because you get to step six, and that's where I was saying, y'all were kind of, do the math to figure out what your savings rate is at that point, but assuming it's gonna be greater than twenty percent, because it was like twenty-two percent last time y'all were in here, then I would feel very comfortable with you guys, because you, that's really step five, that's close to having step six completely funded. That's where it's step seven, you say, wait a minute, maybe we amplify up our emergency reserve, which is step four, for having that sinking fund to, to, to fund this goal of housing. Because remember, with your first house, you can put down as little as three percent. And y'all had originally told us the goal was around three hundred thousand dollar purchase price. Um, I, I think that that starts working, and you can reach that ten thousand dollar, you know,

• 36:58Brian Preston?

  nine to ten thousand dollar down payment, pretty easily, within, you know, it starts stacking on top of each other, and you'll feel really good about it. We've still got a little time, I'd love to know what chaos or anything, because y'all said you've had conversations.

• 37:11Speaker 02

  You heard about February, February was chaos. That, they, that was the chaos.

• 37:15Brian Preston?

  I want to know, now that y'all are having such good communication about your money, has it unearthed or turned over a stone that, you know, previously wasn't? Because y'all weren't talking about it as much, because it seems like y'all are, y'all healthier with your conversations on money?

• 37:30Speaker 02

  We help your marriage, that's where we're going.

• 37:32Brian Preston?

  I mean, we're looking for some, some backpacking, padding.

• 37:35Speaker 03

  It's a, absolutely a net positive, for sure.

• 37:37Speaker 04

  We were raised differently with money, and so even, what, we're seven years into marriage? That's not a long time, but it's a good amount of time to kind of.

• 37:45Brian Preston?

  That can be a shaky time, by the way. Seven years is when you hear about that shaky seven-year itch.

• 37:50Speaker 04

  But we're still learning, even if it's not like the obvious, oh, I know that she likes to go spend, or I know that he likes to save. We're learning little micro things about each other, and even in money, that we didn't know, like in the first six years. It is things, yeah, we're going, oh, okay, I didn't realize that this was a priority, okay? We need to talk about if this needs to be a big priority, small priority, so.

• 38:12Speaker 03

  We definitely are still learning, and we revisited some of the, let's bring up old videos and stuff. One of the videos that you guys talked about even recently was talking about you and your marriage, and some things that are important to you that aren't.

• 38:23Speaker 02

  Champs, the one throw pillows, man.

• 38:25Speaker 03

  Some things that are important to you that aren't important to me, or vice versa. Uh, it's been, you know, we open up the conversation, and we have some of those line items in there for, hey, this is fun money, this is your fun money. Who am I to say what you're gonna do with your fun money? If we have everything automated, and we're doing the things that we set out to do with our plan, everything else is fair game, I guess, you know?

• 38:42Brian Preston?

  Is that where the furniture came from? Who pushed the furniture?

• 38:45Speaker 03

  I'm not gonna say who pushed or anything like that, we're definitely a team here.

• 38:49Speaker 02

  It was an us decision, obviously.

• 38:51Speaker 03

  And I love it, now I have, I have, uh, I have drawers now, I used to put all my stuff in plastic bins that we got from Walmart, so all my clothes were in plastic bins for like first four years of marriage.

• 39:00Speaker 04

  There's nothing wrong with plastic bins.

• 39:02Speaker 03

  I love them, I'm very frugal, so the plastic bins were cool, but now I got, you know, matching sets.

• 39:07Speaker 04

  Do you remember that it was breaking, though?

• 39:09Speaker 03

  It was breaking, yeah.

• 39:10Speaker 04

  The foundation of the furniture was breaking.

• 39:12Speaker 03

  No, it was, it was a need, it wasn't just a want.

• 39:14Brian Preston?

  The weight of your, your underwear and shorts and pants was breaking the plastic.

• 39:19Speaker 03

  So, yeah, I put my shoes on top of the, uh, I do have another question, this is gonna be a probably no-go territory, maybe, but it's a question that would came up nonetheless. Um, but we, we talked about.

• 39:29Speaker 04

  I'm scared.

• 39:30Speaker 03

  One of the, one of the line items we have is for, um, so I work at Publix, we have the employee stock.

• 39:36Speaker 04

  I know where you're going.

• 39:37Speaker 03

  And we feel very weird having just a, a large amount, I'm, I'm, again, not doing great math, but let's say it's like, it's more than ten percent, twelve and a half percent of our. Investment assets are in one holding or in one company. That just kind of makes us feel weird a lot of the time. Now, I love the company. I think it's going to do great. I don't work there anymore necessarily, but I hope it continues to do great. I always tell my friends that as long as public is doing well, my kids are going to go to college. So would it be a dumb idea to pull some of that out at the risk of, you know, what the tax burden might be and then fund some of those things like Roth or fund the rest of our cash to get us there? That way, we're not completely in one holding, I guess.

• 40:16Speaker 02

  Yeah, I don't think it's crazy. One of the things that you'll notice is that obviously it was a, it was a larger percentage of your portfolio last year than it is this year, right? Cause as your portfolio grows around it, it represents a smaller and smaller portion. But you're the person who likely knows the enterprise and knows the organization better than anyone else. Now, not being there, perhaps not as much. And so if it is something where you feel like you are overly concentrated there, there's nothing wrong with saying, hey, it's done well. It's performed well. I'm not tied to the company. I don't have any insight into that company. Cause the question I would always ask when I sit across from clients and do this, and it's the old ESPP, the $16,000. If I said, hey, guys, I'm feeling very generous right now and I'm going to write you guys a check for $16,000 just because I want to do that, but you have to invest it.

• 41:01Speaker 02

  Would you go buy $16,000 of public stock?

• 41:03Brian Preston?

  I would not.

• 41:04Speaker 02

  Would you would not do that? So every day that you make the choice to not sell a holding you have, you're kind of making that choice. Now, obviously there's some tax costs and some friction. If I gave you that $16,000, what would you do with it instead?

• 41:15Brian Preston?

  Oh, I'd, we'd fill up the cash immediately.

• 41:17Speaker 02

  We'd fill up our cash. We'd probably fund Roth IRAs, we'd buy S and P 500. And so if you're in the position where you are not as convicted around, oh, I want to be a holder in this. I want to be a shareholder. I like the individual stock. I don't think it's crazy. Do the exercise to figure out the tax impact and think through that. I don't think it's crazy to think about decreasing that position. And then you can use that to fund some of these other goals to accelerate the process.

• 41:41Brian Preston?

  The only asterisk I'll put on it is that you have to ask yourself, which column am I in? Am I a builder or am I a consumer? As long as all the things, the proceeds, take out the taxes, but the proceeds are going into the builder column. I think it's a, it's a win for the long term. Now, if any portion of this is to, to take your pain down so you can consume or, or do something easier, I don't love that because sometimes it's just, it's the same point I made the last time y'all were in here. I want the fact that you're not funding your Roth to hurt so that it keeps driving your positive behavior and discipline to try to fix it faster. Sometimes when we pull the easy button and just go squeeze the balloon and find assets somewhere else,

• 42:26Brian Preston?

  we don't get the behavioral benefit that we should. So as long as you guys are using that $16,000 only for builder column transactions, I think it works. Don't shortchange yourself on that.

• 42:38Speaker 02

  I happened to notice in your budget, there was a line for giving that was like $325 a month, right? That's something that you guys, it's important to you that you're doing. One of the things I immediately hear is, oh, I've got these highly appreciated shares over here of public stock, right? It's done well. If I were to sell it, I have to pay some capital gains. One of the things that I can do though, if I chose to use what's called a donor advised fund, have you guys heard of these, right? You can open up a donor advised fund at Fidelity Investment, Charles Schwab. Well, rather than giving that $325 every month to the organization that I'm giving that money to, I could donate appreciated shares to my charitable giving account and then I can give the 325 from there. So one of the things that you might want to do is if I just take 325, multiply it times 12,

• 43:23Speaker 02

  that's almost $4,000 a year that you're giving to, to an organization or various. You could fund that $4,000 with those public shares and the money you were giving, you can use to deploy to these other goals. And then you won't pay any taxes at all on those gains. Cause when you gift the appreciated security, you get a deduction for the fair market value and all those embedded gains go away. You don't pay them, the organization doesn't pay them. So that might be a way just to shift your cash flow a touch to be able to do what you're trying to accomplish without having to bear a tax burden to do it.

• 43:56Brian Preston?

  Well, and also realize the 0% capital gains tax for married couples is taxable income. It's right under $100,000. So I bet if y'all go and look at your, at your taxable income, y'all might have a little room.

• 44:11Speaker 02

  That's right.

• 44:12Brian Preston?

  For some of this to not even be taxable. So, and I would work within those confines because maybe you don't do it all at once. Maybe you, you, you go and you figure out how, how much of this can we get into the 0% capital gains, you know, column, because that's free. And then maybe if we fund charitable goals with some of this other portion, there's a really creative tax way that lets you fulfill the goals of still being a builder, but minimizing the taxes as much as possible.

• 44:41Speaker 03

  That's really cool.

• 44:42Speaker 02

  Love it. I'm glad I asked. We talked about not asking, I'm glad we asked.

• 44:47Brian Preston?

  No, that's, that's a, that's a powerful one. And y'all are in the perfect income threshold to where.

• 44:51Speaker 02

  You got two different options.

• 44:52Brian Preston?

  You've got a lot of planning opportunities. Cause that's what, you know, and it's not even the worst when you cross those thresholds is because it's 15% federal, but Alabama, y'all 5%?

• 45:04Speaker 02

  State income taxes.

• 45:04Brian Preston?

  I should know, but I don't. I think it's, I think it's around five. It's somewhere from five to six. All the, all those southern states that have income taxes are somewhere around the five to six range.

• 45:12Speaker 02

  We gave you homework last time. I want to give you some homework this time, all right?

• 45:14Speaker 06

  Ready.

• 45:14Speaker 02

  Number one, hey, you should consider consolidating some of your older retirement accounts. You know, those are some cash to clean up. Maybe that's a priority that you guys think about. Love that.

• 45:22Speaker 06

  I'll take that one.

• 45:23Speaker 03

  Why didn't I think of that?

• 45:24Speaker 02

  Keep building your emergency fund. I think a realistic goal for you guys should be somewhere between that 15 to $16,000 threshold. You're already doing that. I think you should have a serious conversation about potentially revamping your car payment so that you can fit it inside that 238. Brian already did the math for you. You take it from $320 a month up to $498 a month. You get that knocked out inside that 36 month window. And then you ought to look at last year's tax return, do a very quick projection. There's software you can use. You can do it through a spreadsheet. See how much room you have left in the 0% capital gains bracket this year. Consider liquidating the public stock at 0%. Or if you're over the 0%, maybe think about shifting how you do your charitable giving. Use a charitable giving account, charitable gift fund, gift appreciated securities, donate to your organization from there.

• 46:09Speaker 02

  And the money you were going to do to organizations used to fund some of these other goals. I think if you can do those things, you guys are going to continue on an awesome trajectory.

• 46:16Speaker 03

  Cool.

• 46:17Speaker 02

  You are awesome. Oh, you're awesome. Thank you guys so much for coming to hang out with us. Thank you for letting us get a peek behind what it actually looks like when you put a plan in place. And I think a lot of people are going to value getting to see that and getting to recognize that, holy cow, this stuff works. The food is actually there for, emergency funds matter. They do a thing. Thank you guys for being a living example of that actually happening.

• 46:38Brian Preston?

  And I'll, and I'll play the uncle part and the fact that I feel like a part of this, the consolidation, that didn't surprise me at all. It's because I think a lot of people run into the exact same wall y'all do is you just don't know how to do it. Cause that's where all of a sudden your simple financial life gets very complex. That's exactly, you, you have no idea. We have an entire team that that's what they do is logistically, they're, they're paperwork ninjas. They know how to call all the administrators. And so that stuff, that's, that's something that typically a good financial planning firm will help people out with. Also, I think you guys coming back, because y'all are our first kind of repeat offender here.

• 47:17Speaker 02

  Not offender.

• 47:18Brian Preston?

  But you know what I mean.

• 47:19Speaker 02

  Don't say offender.

• 47:20Brian Preston?

  You know what I mean.

• 47:21Speaker 03

  Call the red pen.

• 47:22Brian Preston?

  This is the, the accountability because I, I love the fact that it sounds like even there was a halo effect of the first time you came, it, it expanded your conversations for months after. I like to think that probably for the last week, as y'all knew y'all were coming back in town, there was probably like, oh my gosh, are they going to ask us about this? And there was, you know, it, it probably spurred a whole nother level of accountability and discussion on things. And I think that that's like all things, you know, we, we talk about health as wealth and other things. I'm the same way with accountability on what I eat, when I go to the doctor, when I go to the gym, because I'm trying to always, anytime I know I have to, to kind of be held accountable for the actions that I took, I straighten up a little bit. And I think a lot of people do that with, with their personal finances as well.

• 48:05Brian Preston?

  So I love that y'all got to let us shine a light on that and, and kind of show that this can be a beneficial thing from a behavioral standpoint, too.

• 48:15Speaker 06

  And it's, it's not just us. Obviously we talk about it because we shared the experience, but you know, people that we work with, they're excited that we had this experience. And so we've had the opportunity to share with them.

• 48:25Speaker 02

  I love it.

• 48:25Speaker 06

  And they go, well, who, who are they? My friends at school called them wise guys, so very sorry.

• 48:30Brian Preston?

  The wise guys.

• 48:30Speaker 06

  You are wise. Yes, you're the wise guys.

• 48:32Speaker 02

  We're like the mafia in Alabama.

• 48:34Brian Preston?

  The money man, the De Niro dudes. What else are they saying?

• 48:38Speaker 02

  That's amazing.

• 48:39Speaker 06

  But it's, it spurred conversations with our coworkers. And I have a, a friend who actually, I think she opened a 401k. Hi Emily. We started talking about these things. She's my closest friend at work and she said, well, what did you guys talk about? I was like, well, we talked about all these things. And she said, okay, I have a question about that later. And so we're even calling Daniel at work. So, I mean, there's a ripple effect. So thank you for.

• 49:02Speaker 03

  Thank you guys for what you do. Yeah, obviously you can see we're not perfect by any means. It's, it's been a difficult journey and, but it's been a fun journey. We're really excited just for the effort that we've put in. Thank you guys for what you do and how, I hope, I hope this reaches, you know, millions and millions of people. Not our video necessarily, but the, the work that you guys do.

• 49:20Speaker 06

  It's encouraging.

• 49:20Brian Preston?

  And the messy middle, because that's what, everybody is short on time. You're short on money and you're trying to figure out, how do I make this little go a long way? And y'all are a perfect example of a little can create huge ripple effects for the future. And I think that that probably spurs a lot of good conversations. Actually, we want to even talk to more people like you guys where yes, you make a good income, but it's not, your shovel's not so big that everybody's like, oh, um, of course they have money. You guys are a case study of that, yes, you can have good income, but it's really your discipline and your, and your good decisions that are, that are generating the fruit that's growing in the background. But if others want to apply to making a millionaire, where, where do they need to go?

• 50:04Speaker 02

  Yeah. If you want to be a guest on Making a Millionaire, you can go to moneyguy.com/apply. Or if you want to check out any of our resources, any of our free tools, you can go to moneyguy.com/resources.

• 50:14Brian Preston?

  And we already bragged about earlier, and I don't think we gave the website. Go to learn.moneyguy.com. If you also want to know about our net worth tool, I'm your host, Brian, joined by Mr. Bo, Money Guy team, out.

• 50:26Speaker 06

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

• 51:11Speaker 00

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