Do You Actually Need Private Equity to Become Wealthy?

Private equity is becoming more accessible to everyday investors—and it could eventually show up inside your 401(k) and target-date funds. But how does private equity actually work, and does it deserve a place in your investment portfolio? We break down private equity vs. the stock market, historical returns, illiquidity, leverage, the “2 and 20” fee structure, diversification, and the risks investors need to understand. Plus, we explain where alternative investments could fit within the Financial Order of Operations, why low-cost index funds remain the foundation for most investors, and what to research before putting retirement money into private markets. ⁠⁠⁠⁠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

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• 1:03Brian Preston?

  Here's a question. Do you actually need private equity to be successful?

• 1:07Speaker 03

  Brian, I am so excited to talk about this because I feel like we get asked this question a lot. Obviously, in the, in the world in which we live and the people with whom we interact, it seems like private equity has been historically and continues to be sort of this hot topic idea of, oh, well, this, this must be what wealthy people do. This must be the secret sauce that if you want to get into the upper crust, the upper echelon of society, you have to be a private equity investor.

• 1:33Brian Preston?

  Well, and, and look, this is, this has been part of the zeitgeist recently in the last month. Because if you want to find a persuasive personality to kind of make something happen, there's not a bigger name than Tony Robbins.

• 1:46Speaker 03

  That's right.

• 1:46Brian Preston?

  And he was on a podcast recently and he definitively said, you pretty much are not going to be successful going forward unless you have a private equity investment. And that's what, but of course now, what Tony, you need to understand, Tony is on the front row of a private equity investment. So you have to, you have to kind of realize his thumbs on the scale to a degree, but it's still, we ought to at least kind of look at what he said and then give some thought.

• 2:13Speaker 03

  Yeah, he said that private equity and private credit have now become a big part of the holy grail of investing, like the thing that you need to be doing. And the reason why this is pertinent for sort of everyday investors is that it sounds like now there's going to be access to these types of vehicles even inside of your 401k. So is it legitimate? Is it something you ought to know about? Is it something you ought to participate in? So here's what Tony said in this episode of Modern Wisdom with Chris Williamson.

• 2:43Speaker 04

  In the last 39 years, private equity has outproduced every stock market in the world for 39 straight years. Average private equity. Now, in this book, we interviewed 13 of the best in the world, right? Average has averaged 15.7% returns. The S and P 500 of those 39 years is 9%. 74% better per year compounded for 39 years. So if you put a million bucks in the S and P, you're pretty happy right now. You got just under 29 million, 28.7 million. If you put it in basic private equity, it's $293 million. The same money, same time, 10 times the return. So now the question is, how the hell do you get access? Cause there's a big difference between the big boys and the average boy.

• 3:29Brian Preston?

  Yeah.

• 3:30Speaker 03

  So there's a question, how do you get access? There's a big difference. Cause he lays out a compelling story, Brian, right? Oh, this is amazing. If you would have done this, you'd be better than the S and P. Instead of having $20 million, you'd have $70 million. So, or $200 million. So certainly private equity must be the answer.

• 3:47Brian Preston?

  Well, and it will, we're about to give you some, if you've never heard what is private equity, we'll give you some definition information. But then I want to go through a pros and cons. But there is something, I just want to, I want to put a pin in. Tony said 39 straight years. I think that's a little misstatement because it's not really 39 straight years. That means every year it outperformed. We're going to show you there's some chinks of that's not completely true. I think, and now look, he's going to pull up, he's using this, a lot of the same data. We were able to go backtrack and go and back test and look. And he's pulling data that yes, if you pull that timeframe, 39 years, average performance, now you, there's a big assumption there.

• 4:32Brian Preston?

  ROI is different than time weighted return, first of all. So cash flows and other things. The other thing that I think you've got to think about is, is that this was a low interest rate period of time, a lot of inefficiencies. I can't wait to show you all the rest of the answers. So make sure you stick around so we can actually see if 39 straight years is as legit as Tony made it out to be.

• 4:55Speaker 03

  But before we get there, let's talk about, in a nutshell, what is private equity? And generally, investing in private equity, participating in that type of investment means you're investing and getting access into something that the general public cannot. A real easy way to think about this is right now, if you wanted to go buy shares of SpaceX, you could go do it. It is publicly traded. It's out there. You could go buy shares right now. If however, you wanted to invest in SpaceX a year, two years, three years ago, it was not publicly traded. It was not available to the general public. You would have only been able to get access to that company through some type of private equity investing. And so it's different than normal index stock market investing. And this is a loose analogy that we use.

• 5:40Speaker 03

  We say that investing in private equity is a little bit like horse racing. If you are unfamiliar, you have no idea which horses are likely going to do the best. But if you're someone who maybe understands the breed, understands the sport, understands the stable, understands the jockeys, perhaps you have some sort of affinity for identifying which of the horses have the highest likelihood of performing well versus the ones that do not perform well. But you have to kind of be in the know to understand that. It's different from when we tell people, the average everyday investor and go out and buy a low cost index fund and you don't need to know any more than that.

• 6:17Brian Preston?

  Well, look, and, and I want to make sure we're, we're clear. We're not against private equity. I mean, I, I think about all the business groups we're members of, you know, EO and so forth. I mean, a good number of people I was in a group with were bought out by private equity companies. So that was their exit. We have a lot of clients that actually have companies that were bought out by private equity. We have clients that actually are using private equity to build wealth. So we're not against private equity. But there is a big thing that's about to happen that I want to make sure our audience is very aware of. And this is what Tony's kind of helping push, is that in the past, you had to be an accredited investor, meaning that a lot of the safeguards to the general public, to make sure you're not a crook and other things are going to be kind of,

• 7:01Brian Preston?

  they were suspended for accredited investors because they assumed you had a high enough net worth, high enough income that you were more advanced. You were exactly an accredited investor, somebody who has enough sophistication. You don't need the government to protect you. But now we're about to bring these type of investments down to the general public with as low, as small as investment is $2,500. That is a big threshold, a big material change that's about to happen. So let's transition into pros and cons. So I can tell you how this will now change as we bring this into the retail investor.

• 7:37Speaker 03

  So when we think about the pros, the benefits of private equity, one was exactly what Tony had laid out. It does have the potential for higher returns. Again, according to Cambridge Associates, private equity has delivered higher long-term returns in public equity markets, particularly when measured over several full market cycles. We're going to talk about that in a moment. But in general, when you think about people, you've heard about having success in private equity investments, you hear about these large, multiple outsized return variations.

• 8:05Brian Preston?

  There's also, it diversifies your portfolio. Look, if you're buying music catalogs and other things that are, you know, are companies that are not out there in the public, you know, sphere. Yes, this, these are diversifiers because these, these, these types of companies might act in a different way that's not correlated with the 500 biggest companies in the United States. That's a pretty cool thing to put in the brochure.

• 8:26Speaker 03

  And then another thing is it gets you private access to exclusive companies. Exactly what it says, it's private. It's not available to everyone. You get to own, participate and be a part of something that other people don't get to. So naturally there is some exclusivity associated with it.

• 8:42Brian Preston?

  Yeah. And so that's what, you know, cause think about this, the sexy sizzle of you can buy into music catalogs. You can buy into professional sporting franchises. You can buy into companies that are not available because they're all privately owned. This has some sexy sizzle and exactly sounds cool.

• 8:58Speaker 03

  That's right. Sounds super cool.

• 8:59Brian Preston?

  Okay. So that's why these things are very easy to sell because you get to do rich people stuff. And I think as people build wealth, they want to do rich people stuff. So now let's give the cons. The first thing is low liquidity. Look, one of the things that I know a lot of wealth management firms have used these because what, and a previous firm I worked that we, we did a lot of private deals because we love the low liquidity. Because if you want to protect your relationship, put a lot of your clients in something that they have to hold for seven to 10 years. So it is one of those things, even if you sell your company to a private equity, you are locking yourself in till the next cycle that they, they either recapitalize, sell, or do whatever they're going to do.

• 9:44Brian Preston?

  These are low liquidity events. So that you, and this is not like the S and P 500 where you can come in and out as much, as fast and or as often as you want, because it's very liquid. These things, you're kind of locked in.

• 9:56Speaker 03

  In addition to that, they're often very expensive. There's usually excessive fees and costs associated. A very common metric is what's known as the two and 20 fee structure. Where they'll take a 2% annual management fee and then 20% of the profits. And as you can imagine, that can become very, very expensive over a long period of time. Now the managers will tell you, no, no, we're making so much money. It's okay, we're going to participate that with you. But for the ones that don't make money, for the ones that don't perform outsized, they become very, very, very expensive.

• 10:24Brian Preston?

  Well, that's why I want to be clear. Two and 20, you had to, you were packaging this, like I said, the sexy sizzle was you were packaging that you had access as an advisor to companies, portfolios, and other things that the other people couldn't get into. So you were catching a huge premium for how exclusive you were and how good, and that's why it's shooting fish in the barrel is because you have access to something that the general public doesn't. And that's what the brochure has. If we bring this thing down to retail investors and we're still strapping in for two and 20, are you really getting the premium that in the past, that exclusive product

• 11:05Brian Preston?

  or the manager who had access to these type of things? I start to think it falls apart to a degree. And especially when you think about the packaging of leverage and interest rates and other things, this starts to feel like it's more of a product that selling more of could be profitable for the people selling it versus, I don't know if I think the market matches what is being put together.

• 11:28Speaker 03

  And then another piece of private equity, oftentimes there's a giant lack of transparency. You don't actually know exactly what you're investing in, or if you know what you're investing in, you don't know exactly how it's doing. A lot of private equity firms and the companies they own can disguise losses, they can inflate or adjust valuations. And investors often don't know that. They don't know, okay, when am I going to get my money out? When am I going to get my return of principal? When am I going to know what's the next thing happening in this? You kind of just put your money in, close your eyes, hold on and hope for a positive outcome. So when you think about all the cons, even though it sounds super cool to have these higher returns and this diversity and this

• 12:09Speaker 03

  exclusive access, in reality, private equity is fairly complicated, both in terms of how it operates as well as how you do it well as a normal, everyday investor.

• 12:20Brian Preston?

  So let's talk about should you invest in private equity? And we're going to get into the performance of this. The first thing, look, here's the reality. When you, when you, when you use the quotes of 39 years of best performance, a lot of times people are using Cambridge results for private equity and so forth. A lot of these numbers, I want people to realize have survivorship bias, you know, because the companies that have been around the longest, yes, and are the most successful, those are the numbers you want. It's kind of like looking at, you think about, now Berkshire Hathaway is a public company, but we all want to invest like Warren Buffett. Well, there's a lot of private equity companies, you want to invest like these best performing funds. And that's why

• 13:02Brian Preston?

  there's a huge spread, and even Tony said it at the end, between the top performing versus the lowest performing. And the survivorship bias on the long term is towards those top performing funds. And this is what I want to draw attention to. Tony said they beat for 39 straight years. That word straight is doing a lot of lifting and is probably wrong, because if you look at, if you look at what has happened over the last 10 years, you're like, wait a minute, I must not understand the key here, because if you look at Cambridge, that's the private equity index versus the S and P 500, that green line is the S and P, that green looks like it's actually doing better over the last year, the last three

• 13:41Brian Preston?

  years, over the last five years. Tony said 39 straight years. So obviously something, he cherry picked the data to show. And now realize, 39 years is doing a lot of heavy lifting, because go ahead and open it up to the 39, you know, if you go beyond, yes, now you look at this and here's the blue did so well. But ask yourself, past performance, what does the SEC always tell us? Past performance is not indicative of future performance. We are at all time high interest rates on deals right now. Do you think comparing interest rates at these high levels of what's going on is the same as where it was when we were

• 14:22Brian Preston?

  at a zero interest rate environment for everybody was using leverage to make deals work and to kind of grease the skids? I would tell you, I don't know. I would be more nervous about what this is going forward than just saying, hey, the last 39 years, it was the best performing.

• 14:38Speaker 03

  And I think maybe even the more telling statistic is if you look at the gap between top performing managers in the top quartile and bottom performing managers, when you look at private equity returns, that gap is about 19% from the top quartile of managers to the bottom quartile. When you compare that to actively managed mutual funds, so people that are buying inside of public markets and trading public market equities, the gap between the top quartile and bottom quartile of active managers is something like 2.9%. So it's a much wider margin. Yes, the ones who are good and are successful at private equity tend to do very, very well in that. But I would not say that by and

• 15:19Speaker 03

  large, that's all private equity investors. And so the question that you have to ask yourself is, all right, how do I know if I should be investing in private equity? How do I know if that is a reasonable asset class for me to begin allocating to?

• 15:33Brian Preston?

  Yeah. So let's talk about this. Like I said, we're not against private equity. I just think that there's a time and place, just like we tell you, hey, if you're going to go into doing real estate investing, we love real estate investing too. We typically want you to have your financial foundation underneath you first. That's why this is a step eight activity. That's why we say wait until after step seven, meaning you've saved and invested 25% of your gross income before you're adding private equity. This is kind of like the cherry and whipped cream on top of your sundae of portfolio building. This is not where you need to start your journey.

• 16:06Speaker 03

  And then this is kind of my hobby horse. When it comes to private equity, I want you to do your research. I get so frustrated when people come in, okay, but I'm ready to start investing. I want to go invest in private equity. I'm like, okay, great. What are you thinking? Like, I just told you, I want to go invest in private equity. I'm like, no, no, no. If you know someone, maybe you have a relative, a friend, a colleague who has some sort of insight into this startup they're doing or this thing, and you want to support them and you have capital, we can do that. Those types of private equity investments make all the sense in the world because there's some familiarity with it. If you're just trying to go out there and you're painting with a broad brush, I just want to go pick some private equity investments that are going to do well, I worry that you've already lost the plot. Because if you're going to deploy your money and you're going

• 16:49Speaker 03

  to saddle yourself with lack of transparency, lack of liquidity, excessive fees, you need to have some sort of deeper familiarity and understanding with where exactly you're deploying your capital. So I would argue before you do this, actually do your research. Do you understand if you're going to be participating in a private equity fund with some sort of general partner, do you understand how they perform? How much money do they have in it? What's their team experience? What's their track record? Why do you believe that this investment is the one that makes sense for you to put your capital into? And is the opportunity cost worth it? Do I genuinely believe that by locking my capital up over in this thing, it's going to outperform what I could do if I was just over here buying low cost index funds with full transparency and full liquidity?

• 17:34Brian Preston?

  Well, and I'll kind of close it out with, I think everybody comes out, and in this new, modern world where, you know, you're, you're red, you're blue, you're this, we like binary things where you're on this side or this side, and it's always either or. And I'm here to tell you, the real world, the Rillsville that I live, not at the brochure, it's more of an and, it's not an either or. And I don't like how Tony pitted private equity versus the S and P 500. The reality is, this is, both are tools in your wealth building journey. Don't sleep on the fact when you're getting your employer's free money in step number two of the financial order operations, or funding your Roth IRA, or

• 18:15Brian Preston?

  fully funding and maxing out your employer 401k. The S and P, the total market indexes, those things are going to crush it for you. But yeah, when you get to step eight and more mature, just like you might add real estate investing, you can consider private equity. It's not either or, it's and, and that's why I need you to make sure this makes sense for you. Just because you can, just because they lower the threshold to $2,500 and let it go into your 401k, doesn't mean you should. Make sure it fits in at the right time and the right place for your wealth management journey.

• 18:49Speaker 03

  And one of the best ways to figure that out is, do you know where you are in the financial order of operations? Have you actually walked through understanding what step you're on? If you don't have your free copy, you can go to moneyguy.com/resources and download your free copy to make sure before you get distracted, or before you take your eye off the ball on one of these other sexy type investments, you make sure that you have the basics covered. If you can do it that way, we believe that that is indeed a better way to do money. Brian, I love that we get to sit here. I love that we get to respond to Tony Robbins. We get to answer the things that he says that maybe aren't exactly spot on. But more than that, I love that we can sit here and we can answer your questions.

• 19:29Brian Preston?

  Every, we stuck the landing, six minutes, by the way.

• 19:32Speaker 03

  Yeah.

• 19:33Brian Preston?

  That's what, in pre-show prep, pre-show prep, they're like, hey, can y'all do this in the next six or seven minutes? So we don't get bogged down in it. And here we are, 18 minutes, close to 19 minutes later.

• 19:43Speaker 03

  You know how he said, like, I want to add a little bit to the pros and cons? As soon as he did that, I was like, all right, well, this six minutes gone. That's all right.

• 19:50Brian Preston?

  I'm sorry.

• 19:51Speaker 03

  Hey, that's fine. There's no time limit here. There's no time limit.

• 19:54Brian Preston?

  I'm not, I'm not designed for short form content.

• 19:57Speaker 03

  But here's the thing, our, our folks do love that not only do we get to wax eloquently about the things that we're passionate about, we also get to weigh in on your questions. We get to speak to the things that you guys are genuinely curious about. So if you have a question you want our take on, you want to ask us something about your financial life, or just about finances in general, make sure that you get them in the chat right now. We have the team out in the wings collecting those questions. And our goal is with the time that we have left to load you guys up. I thought you did great.

• 20:31Brian Preston?

  Well, and by the way, I'm, you know, Tony Robbins, look, if he wants to come on the show, we'd love to have Tony come on some point. So

• 20:38Speaker 03

  Tony, come on.

• 20:39Brian Preston?

  I hope he can sense, hey, we, because he's written other investment books that were actually pretty good. This one just, it felt a little self-serving. And look, I get it, but I just, I just want to make sure we shot our audience straight. So you knew what to do with your next.

• 20:53Speaker 03

  He has sat in so many, so many like rooms with billionaires. You know, he could come on and do like an episode of like Making a Billionaire? That would be pretty cool.

• 21:01Brian Preston?

  That would be cool.

• 21:02Speaker 03

  Just get some insights. I love it.

• 21:04Brian Preston?

  Probably got to wait for the next book. It's not going to be the Holy Grail book.

• 21:09Speaker 03

  Billionaire Mission.

• 21:10Speaker 05

  All right. Green Ivy 314 has a question. Are you ready?

• 21:16Brian Preston?

  I don't know. There's stuff all under my feet cords and I just, I have big, long legs and they, they don't go with cords. Keep going. I'm sorry.

• 21:23Speaker 05

  It all looks okay from here. I think you're doing good. All right. Question says I-

• 21:27Speaker 03

  Everything goes black.

• 21:28Brian Preston?

  That would be my luck is I employ it with my feet.

• 21:32Speaker 05

  I've become the money lady at work and yearly I have a workshop for my coworkers, 25 to 35 age group. What's going on in the financial world that I can include this year? Any other suggestions? If you had the ear of every 25 to 35 year old in your company, what would you say?

• 21:51Speaker 03

  Well, here, I, I think as a financial, as a financial educator, Green Ivy, I'd like to give you, I'd like to give you a cautionary warning. So often in the personal finance space, there becomes this idea of, oh, I've said that thing before. I need to, I need to find something different. I need to say something. I talked about this last year. Well, now I need to go talk about private equity. I need to go talk about Bitcoin or a couple of years. I need to go talk about NFTs or need to, there is nothing wrong with talking about the same stuff that you talked about last year. Cause oftentimes we need to be reminded because we have very, very short memories, both as human beings and as investors. So if I were talking to an entire group of 25 to 35 year old, 24 to 35

• 22:34Speaker 03

  year olds, the number one thing that I would do is I would drive home the idea and concept of the wealth multiplier. If you don't have a free copy, go to moneyguide.com/resources, feel free to use our resource. Feel free to even pull up our website and use our tool there and show these 24 to 35 year olds that every dollar that they can walk away from, every dollar they can sacrifice, every dollar they can defer for the future, has the unbelievable opportunity determined to turn into massive wealth for them later in life. Cause they need to hear that. They need to hear it at 24 and at 25 and at 26 and at 27, so on and so on and so on. So if I were trying to get one thing across to them, it would be to grasp that idea. Cause then if you can grasp that idea, then you get to start talking

• 23:18Speaker 03

  about X's and O's. Now let me talk about Roth IRAs. Let me talk about employer match. Let me talk about high interest debt. Then the financial order of operations can be the thing where you fill in all the other pieces, but you have to start, in my opinion, with the discipline piece.

• 23:31Brian Preston?

  Yeah. I was gonna say, look, cause the way money lady, Green Ivy, I love that she did it. Cause it's like Green Ivy, the money lady. She presented it in a way that she's looking for a current event to kind of a headline with some sizzle to it. So she can get people to show up. That's great. If you want to find something that's clickable to, to, you know, to put on the banner or the email subject line to get, to get as many people to sign up, but be careful. Cause behavior is more valuable than current events. I mean, I feel like the majority of what we're trying to do with our audience is help them to see that they can get distracted with the fear, the greed that the news media and everybody's putting out there. When really you need to be kind of zooming out and looking

• 24:15Brian Preston?

  at what are you going to do with your next dollar, with your employer match? Are you maxing out? Are you paying down the high interest debt? Are you building up the emergency reserves? So in case on a Tuesday, things don't work out like they're supposed to with a layoff or some other crazy thing that comes to your life. And then how does all the tax free stuff like Roth IRAs, health savings accounts, and then maxing out the employer plan? Those are the things that I think are powerful. If you want to then sprinkle into the presentation, some of behavioral stuff of to protect people, like I always find, most people are new to investing. The first time the stock market gets beat up, all the behavioral goodwill that we built up by showing through and so forth, it goes out the window because they freak out, you know, because the wealth multiplier doesn't

• 24:58Brian Preston?

  work unless you keep the money invested for the 20 plus years. So I always tell people, we did it, we've done several episodes. We even have one in the works because I've been working with the writers on shaping it over the case study on the best and worst investors. And you, and you find out that everybody's going to go through a market downturn. And if you can see, we, we showed, if you go through like the dot com, we've done content where we show a slide of the headlines that are so scary. But then if you, you know, stayed invested, yes, you lost, you know, 25, 30%, but if you stayed the course, you made it all back and then some because bull markets are so much bigger than bear markets. It's just one of those, that's what I think it's okay to sprinkle some of those things because

• 25:41Brian Preston?

  you can inoculate your people to not be so emotional. Cause your emotions go against the, the, the discipline and the behaviors that create success over the long term.

• 25:51Speaker 03

  Can I tell you one other thing that I would mention specifically to a group of 25 to, uh, 24 to 35 year olds? If they go to moneyguide.com/millionairemission, there is a brand new soft back version of the book coming out. This is a great book to start with for someone who's just now wanted to get excited, wanting to get introduced to personal finance, and they have this idea that one day I want to be a millionaire. One day I want to be financially independent. It's a great tool and resource for young folks to catch that fire of making sound financial decisions.

• 26:25Speaker 05

  Brian, did you know that there are only two more weeks for people to preorder that book and get our perks? Isn't that crazy?

• 26:32Brian Preston?

  Yeah, I know. It is. And look, I do, by the way, I'm still reading the comments on Amazon. Please go out there and put a new comment in. Cause the, one of the most recent ones was that some guy in England who said it's too basic. I'm like, you're not even in the United States. Don't, don't, don't leave me a comment from, you know, another country.

• 26:51Brian Preston?

  And then there's another one that's on there that's a negative review because Amazon ripped up his package. Like, and so he put a one star because the book showed up like a dog ate it. And I'm like, that is not where you read reviews for. That's where you go to customer service and fix it. So, but I am reading the reviews and you guys are awesome because this thing, you know, that's why I love that I got another bite at the apple to even fine tune it even more to improve the case studies, tell a few more stories. You know, you do, you realize how rare it is for your publisher to be so impressed with the first series. They said, hey, as it's coming out of paperback, we're going to give you permission. Go do more to it if you want to improve it. And that made me so happy because the first book was good, but it was taken from me. You know, they're

• 27:36Brian Preston?

  like, Brian, quit making changes. We have to go to, you know, we have to go to press with it. This one, I fully got to have a full relationship with it and say goodbye. And it just felt so much healthier. It really did.

• 27:47Speaker 05

  So weird.

• 27:48Brian Preston?

  I know.

• 27:48Speaker 05

  You're so funny.

• 27:49Speaker 03

  I'm gonna get a bunch of questions here.

• 27:50Brian Preston?

  I let it grow up completely, you know, because this is your baby. It's just this version got to fully develop. Whereas the other one was kind of ripped from my arms at some point.

• 27:59Speaker 03

  Hmm. That's, uh, that's even worse.

• 28:01Speaker 05

  Terrifying and tragic.

• 28:03Brian Preston?

  Let's get, let's move on. Let's move on.

• 28:04Speaker 03

  I don't like this analogy at all.

• 28:05Speaker 05

  Well, I was gonna say, um,

• 28:07Brian Preston?

  This is probably a live show.

• 28:08Speaker 03

  Are you seeing the question that keeps coming through? Hey, what are the preorder perks? What are the preorder perks? Are there preorder perks?

• 28:13Speaker 05

  They read my mind. There are. And so if you order today, between today and launch day, November 10th, you immediately get access to our private Discord channel in the moneyverse and a special mission crew role. And then every preorder gets a ticket to Brian's book club, which I am very excited and happy to announce that Brian's book club is going to have an exclusive Q and A live stream with Brian and the gang, of course, and an exclusive ask me anything with Brian in the moneyverse Discord. And yes, if you are in the moneyverse, you know, there's been a lot of speculation over what Brian's username is, but he has agreed to hang up his hat as a lurker and reveal his username and actually

• 28:56Speaker 05

  chat with us in an ask me anything. So if you want to know when those are going to happen, they will be happening after the book is released, obviously. And you will be the first to know if you get in that Discord channel and on the preorder list. To do that, go to moneyguide.com/millionairemission to order from your favorite retailer and to learn how to cash in on those preorder perks.

• 29:17Brian Preston?

  And then one last thing, and then I want to get to more questions is that if you noticed on a lot of the sites, they haven't set the full price. There's an asterisk usually on most of them. So I think, you know, usually with paperbacks, these things, the price comes down pretty quickly. So I think you're going to see, please go ahead and do the preorder, because if you notice in the asterisk, it says they're going to charge you the actual price that they, they, they settle on at the release date. So I don't think that that listed price is actually what everybody's going to pay. So read through, I know we're all financial mutants and that's why I want to, I want to make sure you go read the asterisks. I'm doing the heavy lift for you. So you can make sure you get the best deal possible.

• 29:53Speaker 03

  Are you going to be in the ask anything with Brian? Like, will you be there with him while he's doing it?

• 30:00Speaker 05

  Me and marketing mutant will be there.

• 30:02Speaker 03

  I'm just so, cause you know, cause our, hey, Brian, tell, tell us, tell us the things that are happening by the end of the year that we're not supposed to know about. Or hey, tell us about, you know what I mean? I want to make sure. Cause what y'all don't know is-

• 30:12Speaker 05

  We can't fully leave him unattended.

• 30:14Speaker 03

  He, whenever, whenever we don't tell y'all something, it literally bothers me. It's like, they need to know. We need to tell them. We want them to know.

• 30:20Brian Preston?

  I'm not gonna say what the thing is. I have a client, I had a client meeting yesterday and I love these clients, but I told them something I shouldn't have. And now every meeting, they're like, so when is that happening? And I'm like, gosh, I should have never told them because I do want to do it, but it's just, Rebi is going to beat me up because we have so many other things on the plate that I want to make this thing happen, but we've got to get through two other things first.

• 30:41Speaker 05

  Maybe someday I'll be the girl who doesn't want to beat you guys. I always have to play that role in these conversations. All right. Let's get back to some financial questions. That was good stuff though. Uh, Trey is up next. Are you ready?

• 30:55Speaker 05

  Firefighter, 38, in the 12% tax bracket.

• 30:58Brian Preston?

  Good.

• 30:59Speaker 05

  Pension starts at 54 and will fill lower tax brackets in retirement. Does this make Roth 457B contributions better than traditional today?

• 31:10Speaker 03

  Almost certainly. Again, we can't give you like full financial advice, but you're in this amazing spot. You know, what's interesting with a lot of firefighters, my father was also a firefighter. They do this thing where a lot of their shifts are like 24 hours on, 48 hours off. So they do this thing where they have, and then in that 48 hours that they're off, they begin finding what's their next career going to be, or what's their side hustle going to be, or what's their side gig going to be. And it creates this really interesting opportunity where you have access to this 457, where you can start saving, but even if you do have some sort of side gig or some other thing that you're doing, you actually have this other means and mechanism that you can begin saving on that side. So it's a really interesting thing. But if you look at where you are from an income tax standpoint, you're already in the 12% bracket

• 31:55Speaker 03

  and you're not filling that up, I would argue that following our rule of thumb, where if you add your marginal federal rate and marginal state rate, and the combined of those is below 25%, there's a really, really good chance that Roth is going to be a wonderful option for you. So doing Roth 457 contributions may very well indeed be more valuable than doing traditional contributions. But you want to make sure you review the plan because there are some unique things when you contribute to a Roth 457 as opposed to a normal 457. In terms of when you can access and what portions of the dollars you can access, so long as you make sure that you understand that, when you get to age 54, 55, and the pension starts, you will be sitting pretty. And hopefully you can let those dollars even continue to grow above and beyond that point.

• 32:39Brian Preston?

  So give some clarification on that and the fact that, because you know, normal 457s, the great thing is they don't have early withdrawal.

• 32:45Speaker 03

  That's right.

• 32:46Brian Preston?

  And you know, firefighters, since they do retire typically well below like 65, is there any issue with it being Roth versus traditional on early access?

• 32:54Speaker 03

  Yeah, when it comes to Roth 457 contributions, those earnings and stuff have to be in there until you get to 59 and a half. You don't get to pull those early in the same way that you do traditional. So that the, there's a chance that when you look at pots of money inside of your plan, they'll be bifurcated. You won't have access to all of it early. But if you have the pension starting, hopefully your pension will satisfy your living needs and you can let those Roth dollars continue to grow well into retirement.

• 33:19Brian Preston?

  Does it allow you to make withdrawals and then do you have to prorate it? Or can you take out your basis, your contributions?

• 33:26Speaker 03

  That's a great question, Brian.

• 33:27Brian Preston?

  So these are, by the way, this is why, it depends because you have to go read the plan documents.

• 33:31Speaker 03

  That's exactly right.

• 33:33Brian Preston?

  And that's what, look, and I'm not, that's why I tell you, things can get even on a great opportunity like this, where it's pretty much a no brainer, go do the Roth. You just need to begin with the end in mind is that even something that seems so valuable, you have to think about how you're going to use this money and then the complexities that will come and actually go do the homework of reading those documents.

• 33:51Speaker 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 block, 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.

• 34:18Speaker 01

  Born from the intensity of a night in the eternal city. Introducing Born in Roma Fragrances by Valentino. Feminine perfume Donna Born in Roma features juicy black currant, central jasmine, soft cashmerin, and warm vanilla. Masculine leaning but unisex womo has notes of fresh violet leaf, aromatic sage, green vetiver, and mineral salt. Shop holiday gifts at Macy's.com.

• 34:47Speaker 05

  Love it. Next question is from-

• 34:49Brian Preston?

  Good job. I didn't mean, you know, that's the problem with a live show.

• 34:51Speaker 03

  Yeah.

• 34:52Brian Preston?

  We get into the details and it, you can, it gets very hairy very quickly.

• 34:55Speaker 03

  I'm trying to remember because again, there's a lot of, there's just a lot, you know, we were hanging out with Jasmine last weekend. There's a lot of tax stuff up here, but some of it, ah, some of it doesn't stick. Even we have to like, kind of like revamp and refamiliarize ourself on specific esoteric rules. I don't remember them all, all the time.

• 35:12Brian Preston?

  Yeah. And by the way, I want the person who caught the comment that Bo made. I didn't even catch it in real time and I thought it was great. You were talking about code section I-10.

• 35:23Speaker 03

  Mm-mm.

• 35:23Brian Preston?

  No, tell me.

• 35:25Speaker 03

  I, I made a reference to code section ID10T in the tax code and there were a handful of folks in the comments that caught it.

• 35:31Brian Preston?

  Do you see this? This is why God really does have favorites. Because I mean, he should not be able to do all this and make jokes that go that layer deeper that I didn't even catch in real time. So well played.

• 35:42Speaker 03

  Oh, thanks, buddy.

• 35:44Speaker 05

  Megan's question is up next.

• 35:45Brian Preston?

  Okay.

• 35:46Speaker 05

  It says, if we're building our forever home, then we will never, that we will never sell, do we have to include it on our net worth? It seems misleading. So talk about how you include homes on your net worth statement and what that means.

• 35:59Brian Preston?

  Megan, we get in trouble for this one because we have shared it. Nobody likes this because you know what, you know what putting your personal residence at full fair market value does, especially after we go through a period where housing and real estate went up 50% in a three-year period. Everybody just loves how frothy that makes their net worth look. The problem is, is that when you're looking at what you're going to actually live off of during retirement, this might give you a false sense of, of, of what you have. So Bo and I, we did this before 2020, by the way. We've been saying this for years and taking arrows from people, but I think it holds. This is, once again, we show why we say what we do.

• 36:39Brian Preston?

  We do it more as an accounting concept of it is the lower of cost or market. And cost, by the way, includes your improvement. So whatever you paid for the house, plus whatever you put into the house, that's what you put it on your net worth statement for. People hate that. But I think what it does is it lets you see when you do your annual net worth statement, what do you really have for retirement? Now, look, if you ever relocate or move and downsize, that money shows up on your net worth statement once that transaction. But we like being more conservative with what shows up on that worst, net worst statement. So you actually know, am I legitimately a seven-figure retiree? Or am I a person that's counting on this run-up in my personal residence that I'm sleeping in at night?

• 37:24Speaker 03

  Yeah, I want to tell you, I want to tell you, Megan, oh yeah, yeah. If you want to leave your personal residence off because it's a used asset, you don't have to include it on, you don't have to include it on your net worth statement. Because again, you don't plan on selling it. That's fine.

• 37:37Brian Preston?

  But if there's debt, that seems, that seems wrong too.

• 37:39Speaker 03

  If you have a big mortgage on this, let's say that you're building your dream home and it's $2 million and you have $1.8 million of debt on it. And you're just like, oh, it's my, I'm not just going to ignore that. I would want to know when I look at my balance sheet, if I've got a $1.8 million matzo ball right there. Because one of the things that I need to be doing is paying down that debt, getting that off my balance sheet by the time I get to financial independence. So I think, my opinion, you should still include it. I love the idea, just like Brian said, including it at cost plus improvements, not because you're going to be misleading, not because you're going to inflate the value of the home, but because then you're going to have a realistic idea of what behaviors am I executing to impact my net worth?

• 38:23Speaker 03

  And the two things that should be happening, I'm saving, saving, saving. So my liquid investments are going up and I'm also continuing to pay down my debt. So my liabilities are going down. If both of those things are happening, my net worth should be growing. And I think if you don't get crazy with the valuation of the home, it's not going to be misleading.

• 38:39Speaker 05

  All right, grab your thumbs up, thumbs down paddles because we're going to play from the wings. I'm going to read a few headlines that are going on right now in the financial world. And Brian and Bo are going to give us thumbs up. This is news and we should pay attention to it. Or thumbs down, this is noise and we should move on with our life. So are you ready for the first headline?

• 39:03Speaker 05

  From the Wall Street Journal, inflation jump will push social security benefits up 3.6%.

• 39:16Speaker 05

  All right, you both said this is news. Why?

• 39:19Brian Preston?

  I mean, if you're, if you're close to retirement, you want to build that into your, your assumptions. Because it's very, you know, a lot of pensions don't have cost of living adjustments. Social Security does. So if it's part of what your cash flow is built off of, it makes sense. Now, if you're somebody who's watching this and you're 25 years old, it probably doesn't mean as much to you.

• 39:36Speaker 03

  Yeah, I was going to say the same thing. Most people that are depending on, what was the stat? 60% of Americans cite social security as their primary source of retirement income, or 60% of retirees, not Americans. And so that's like a really interesting thing. This is a pretty significant bump for a lot of people, especially as we've seen cost of goods and all that stuff increasing. So I think it is newsworthy because I think it affects a lot of Americans. One thing that I would do and I'd encourage you guys to do personally, if you're doing your own projections, we always try to model social security at a very slow growth rate. So like it might, we might model it at a 1%, 1.5% increase. So that when we see these closer to like historic inflation rates, it actually bolsters the plan a little bit, just that little nuggets for free. News.

• 40:19Speaker 05

  From CBS News, AI agents are roaming around consumers' bank accounts and banks aren't happy about it.

• 40:29Brian Preston?

  Well, I mean.

• 40:31Speaker 05

  Oh, we got some disagreement. Bo says it's news. Brian says it's noise. Why?

• 40:35Speaker 03

  That sounds terrifying to me.

• 40:36Speaker 05

  That sounds bad to me. I don't know if it's true or what, but it sounds bad.

• 40:39Brian Preston?

  But here's the qualifier. People are choosing to use agents to get into accounts.

• 40:46Speaker 05

  That's fair.

• 40:47Brian Preston?

  Whereas that headline makes it seem like there's these AI bots lurking around way like, "Hey, come over here, kid. Let me get into your account." That's just not the way this is going on. A lot of people are using agents, whether it's Claude, Grokbots and other things, and they're giving their user ID and password. And yes, the banks don't like it, but that headline makes it seem like it's an after-school special with these nefarious "I am robots" out there trying to get into your bank accounts.

• 41:16Speaker 03

  I think it's newsworthy only because cybersecurity has already been like this very difficult thing. And in my opinion, you write this in pencil, it's only gonna get worse and worse and worse and harder and harder and harder to make sure we're protected. Now that we even have like, perhaps there are nefarious agents out there doing something. And maybe there's an AI agent that gets access to something, not even because you intended for it too, but because of some unintended consequence. I do think that we all as consumers have to be even more diligent in terms of how we're securing our accounts, how we're making sure we stay updated on transactions that are happening in our accounts, how we're adding multi-factor authentication, all these different things. Now, I just think this is an example, even though it sounds like, you know, it makes it sound like Terminator or her maximum, you remember Maximum Overdrive?

• 42:01Speaker 03

  You remember that movie? Do you remember that movie?

• 42:04Speaker 05

  No.

• 42:04Speaker 03

  You don't remember that one. Even though it's making it sound like Maximum Overdrive, I think that we as consumers, as financial mutants,

• 42:11Brian Preston?

  I am robots so much better.

• 42:11Speaker 03

  have to stay like, super diligent to keep ourselves and our stuff protected.

• 42:17Brian Preston?

  By the way, go freeze your credit too. I will tell you, the phishing things are getting better and better. We had one come through the office internal chain today. Really, really good. Guys, if you're not hovering over to see who's sending these emails, and by, at some point, I'm sure they're gonna figure out easy ways to mask that as well. Just be very careful. That's why probably a good defense is also just going out there and locking your stuff down, whether it's multi-factor, whether it's freezing your credit. Be on offense for your defense so that you, you know, that the crooks, even if they get your stuff, can't do much with it.

• 42:52Speaker 05

  Well said. All right. Musk plans to gift SpaceX shares to kids through Trump accounts. That's from Bloomberg.

• 43:02Speaker 05

  All right, you both said it's news.

• 43:04Brian Preston?

  Well, look, this is not just an Elon Musk thing. Now, look, I'm curious to see when Elon does this. Cause Elon makes big, big announcements, splashy announcements, but there's precedent for this already. I mean, if y'all don't know if y'all saw, Michael Dell and his wife, what was it, six billion?

• 43:23Speaker 03

  Six and a half billion.

• 43:23Brian Preston?

  Six and a half billion dollars. And they, they put out there to, to go into these Trump accounts, to be administered through the Trump accounts. This is a pretty exciting thing. It's one thing, cause these billionaires are all coming out and now saying that they want to pay it forward. And man, oh man, we've been talking about the wealth multiplier, you know, for, for babies and the fact that, you know, every dollar's worth $647 for, for a brand new baby. And for these billionaires to now be coming out and saying, hey, we're gonna go start giving money to the next generation directly. Do you know how awesome that is? I mean, you think about what, what could happen. I don't care what you think about President

• 44:05Brian Preston?

  Trump, what you think about Elon Musk, or any of these other billionaires that are doing it. This is a good thing for the long term, if we start setting this stuff up, because that's one of the things I've often felt like, if you looked at what we put into social security, and, and look, I'm the guy that when President Bush back in 2000 said, we ought to privatize a small portion of social security for the younger generation, I was, you have no idea, young, younger version of me at 2000 was like, please, please, please, please. Here we are 25, 26 years in the future, and you look and you backtest what would have happened. And you go, man, somebody is finally doing the experiment to show, why do we waste

• 44:47Brian Preston?

  so much money and not build for the younger generation to let them see the power of compounding interest? This is exciting. I'm sorry to grandstand.

• 44:55Speaker 03

  No, no, no. I hope it, it's news, not because I think like, I hope he does it. Logistically, I wonder, I want to know how it'll play out. Like, who counts as a, as a kid? Is it like just babies? Or like, you know, I got three kids in my household that would love some SpaceX shares. So I love, you know what I mean?

• 45:10Brian Preston?

  Yeah. I mean, that's gonna be like with the Michael Dell thing, it was under 10?

• 45:13Speaker 03

  I think so, something like that. So, but I-

• 45:15Speaker 05

  Well, I was curious, how much is one share of SpaceX?

• 45:19Speaker 03

  I think right now it's like 150 bucks a share, isn't it?

• 45:22Speaker 05

  Right.

• 45:22Brian Preston?

  Yeah.

• 45:23Speaker 03

  But it's not, it's like a lottery ticket. It's not about what it's worth today. It's about what it could be worth. You know what I mean?

• 45:28Brian Preston?

  Remember, 88 times over.

• 45:30Speaker 05

  I was curious about that.

• 45:31Speaker 03

  149.69. I just nailed it within 31 cents.

• 45:34Speaker 05

  Wow.

• 45:34Speaker 03

  Come on. But I think it's awesome. I think it'd be a wonderful thing. And what a great conversation starter to have with your kids. Maybe 150 dollars isn't gonna change our financial life, but it allows them to understand, hey, like, if, if I was reading, my, my little boy's name is Stone, if I was reading Stone a book about rockets and spaceship and astronauts, do you know how cool it would be for me to tell Stone, hey, by the way, bud, you own a rocket company? And like, think about like, just entered, cause I'm beginning to introduce that idea to my 11-year-old, that we're gonna start buying stocks of companies. And I'm trying to ask her to think about what companies would you like to be owner of? These are like really fun conversations to get to have at a very early age. And the earlier our kids get that, the more valuable it can be over the long term.

• 46:19Brian Preston?

  I think about my daughter, when she started working and we opened up those custodial Roth IRAs, I thought it was fun when those statements come in monthly and you review and you say, "Look, you made $35 this month." And you say, "How many hours would you have had to work to get $35?" And then she, I could see the light bulb go off in her head. It's like, oh, wait, I could, there's another way for me to use my labor and time to go buy something that now will replace me having to use my labor and time. That's the powerful concept. We start that young enough, and people start thinking about how you own things to, to replace you having to work through labor. It could be transformational for the next generation.

• 46:59Speaker 03

  Yep.

• 47:01Speaker 05

  All right, good stuff. And last but not least, gentle giant Backpack declared winner of Alaska's Fat Bear Week, NBC News says.

• 47:09Speaker 03

  Oh, the bear's name is Backpack.

• 47:11Speaker 05

  So I believe we have a photo of Backpack, and it says, "After a week of fierce competition, Backpack emerged victorious as Fat Bear Week champion, the heftiest bear of Alaska's Katmai National Park and Preserve." So he's the big, big winner.

• 47:26Brian Preston?

  A lot of picnic baskets.

• 47:30Speaker 05

  Would not want him doing that.

• 47:32Brian Preston?

  That's pretty good.

• 47:35Speaker 05

  Hydro picnic baskets from Backpack.

• 47:37Speaker 03

  Did you see, did you see how much our content writer will just start to laugh at that one?

• 47:42Brian Preston?

  You'd have to be of a certain age to catch that though. A Yogi Bear reference there.

• 47:45Speaker 03

  That's exactly right.

• 47:46Brian Preston?

  Hey boo boo.

• 47:46Speaker 03

  That's, you know what? News.

• 47:51Brian Preston?

  No. No, that's feel good. I mean, that's, that's not on the front page, obviously, but, but, I mean, it's, it's probably, it's probably more valuable to know that than it is to, in the catch a Yogi Bear than some of the headlines that we all react to.

• 48:04Speaker 03

  I've done some, I've done some traveling here in the past couple, you know, past couple years, got to go to some cool places, have seen in the last two years, two bears in real life. And my whole life, I'm waiting to it. And I just, I think it's the coolest, coolest thing in the world. I think they're magnificent creatures. I'm, I'm, I think they're awesome. Terrifying, but awesome.

• 48:22Brian Preston?

  Yeah, I will say, I was on an Alaskan cruise, and we, we went for one of the bear experiences.

• 48:27Speaker 03

  Did you see?

• 48:28Brian Preston?

  Yeah, we had, we had a, we had a bear.

• 48:30Speaker 03

  That's polar bears, right?

• 48:31Brian Preston?

  No, no, no. It looked like it was brown, like a grizzly, but it's really a black bear, just with brown type fur. So it looks, it looked like, it looked a lot like that, but-

• 48:39Speaker 03

  Wasn't as fat as that one.

• 48:40Brian Preston?

  But, but it wasn't as fat. But I remember thinking, there's not enough safety. Where's, I need more guardrails. I mean, cause I couldn't believe that we were like watching, and the guy, yes, had bear spray, but I was like, this is, this shows how these, these, these animals must not really wanna attack, because they are, every day, they're bringing people to, cause this was not like they were at a sanctuary. These were legitimate out in the wild bears who were waiting by, at this salmon factory or whatever to, to try to capture the fish. And I was like, this does not feel safe, but that, that shows the nature of the bears is not to come attack us.

• 49:16Speaker 03

  Did you say these bears were just hanging out by the salmon factory?

• 49:19Speaker 05

  Is that real?

• 49:20Brian Preston?

  No, I think they, no, that's where, a lot of these fisheries is where these bears come.

• 49:25Speaker 03

  Fisheries makes more sense. I thought they just standing at the factory door.

• 49:29Speaker 05

  I was really sure what to imagine. I was like, where exactly?

• 49:33Brian Preston?

  Swim upstream and, you know.

• 49:35Speaker 05

  Okay, yeah. So the people are fishing for, okay, so everybody is gathering there. Yeah.

• 49:39Brian Preston?

  Look at that.

• 49:43Speaker 05

  Okay. Well, that was from the wings. Never disappoints. I'll tell you that. I have a spicy question for you next. Are you ready?

• 49:50Brian Preston?

  Uh oh.

• 49:50Speaker 05

  It could be, it's not a gotcha question because I know you're going to be able to answer it, but it's a good question. Are you ready?

• 49:57Brian Preston?

  Okay.

• 49:58Speaker 05

  Mr. Big Bad Bug 7 asked this question.

• 50:02Brian Preston?

  You just liked his name.

• 50:05Speaker 05

  Oh, man. He says, "Wife and I are 30 and have two and a half times our annual income invested for retirement."

• 50:13Brian Preston?

  Wow.

• 50:14Speaker 05

  "We started at 22."

• 50:15Brian Preston?

  Let's go.

• 50:16Speaker 05

  "The how much should you save resource that we have at moneyguy.com shows 15% savings at 25 may replace 20 or 100% of our income. Can we move from step six to step seven while saving 15%?"

• 50:34Speaker 03

  Well, I love what you've done, Mr. Big Bad Bug. Is you've assessed, okay, where am I? I know that you guys say that by the time I get to 30, I ought to have one times my annual income saved in liquid investments.

• 50:46Speaker 05

  But he has two and a half times.

• 50:48Speaker 03

  And you're smoking that. You're at two and a half. And so then you said, okay, well, let me assess where I'm at on my path and trajectory. If I, based on what I have now, I'm assuming you did use our know your number tool at some point to kind of navigate this, but based on where I'm now, if I save 15%, I'll be able to replace 100% of my income. Man, does that mean two questions? One, can I drop my savings rate from 25 down to 15? And two, can I change where I save? Because if you're asking to go from step six to step seven, what you're really asking is, hey, instead of putting all my money into my 401k pre-tax employer sponsored retirement account, can I now shift and begin putting more money into a taxable brokerage account that I might have access to? And I think the question they've really got to answer, Brian, is sort of a begin with the end in mind.

• 51:34Speaker 03

  What are they trying to accomplish? What do they want their future financial life to look like? When do they think they're going to need these dollars? Because I would argue, yeah, you could do that, but is that the most advantageous strategy at this point? Or might there still be some significant benefits to saving inside of that 401k, inside that employer sponsored plan, whether it be on the pre-tax side or even maybe on the Roth side, given your age?

• 51:59Brian Preston?

  Well, now, look, a lot of you, if it's how much should I save? I'd be curious what the age of retirement was because he might have, because I'm wondering if, because yes, 15% potentially works. I don't have our deliverable right in front of us, but if it's 65 or 60, he might want the option to retire earlier. And that's why, look, here's what's going on with Big Bad Bug. To have a two and a half times multiple at 30 years of age, he's been saving more than 15%. There is probably 25% and beyond. And you're essentially asking Mr. Big Bad Bug, I'm trying to say that quickly,

• 52:43Brian Preston?

  if you can take your foot off the accelerator. And before I'm willing to give you permission on that, you need to realize you are 30 years of age. You're much closer to the starting line than you are to the finish line. But I don't want to say no to you taking your foot off. Just gut check, because that's my gut, is you need to probably keep doing it longer because you're, like I said, closer to the starting line than the finish line. But I would ask you to ask yourself some, some serious questions. If you went down to 15%, where does the money go? I mean, is there something that actually is going to add tremendously to the value of your life? I think you're going to probably look at it and realize, no.

• 53:26Brian Preston?

  I mean, so you're just going to go consume more of the money? Because it realize there's also a double edged sword to this. If you increase what you spend at a younger age, what you require in the future also increases significantly.

• 53:40Speaker 03

  Right.

• 53:41Brian Preston?

  So that's why you need to be careful. That's why I've always practiced this thing called forced scarcity, especially until I got into my mid 40s, because I was on purpose trying to make sure my lifestyle stayed somewhat in check without giving up. I didn't want to be a miser. I wanted to be a financial mutant. I didn't want to give up vacations. I didn't want to give up creating memories. But on purpose was trying to keep my lifestyle in check. So my appetites didn't grow to a level that it was hard to replace it down the road. You know, because that's the point I've realized, you know, when you're younger, you don't have it completely figured out on what creates happiness for you. It takes a little bit of time and experience to figure out what things are out there that, you know, is it a bigger house? Is it a nicer car? Or is it going on nicer vacations?

• 54:25Brian Preston?

  You have to figure that out and it takes time and experience to figure out. And I don't want you to go ahead and cut off your savings rate at a young age just so you can go spend more. It needs to be a little more deliberate than that.

• 54:37Speaker 03

  Love it.

• 54:38Speaker 05

  That's great. If you want to go check out that resource, how much should you save for yourself? Go to moneyguy.com/resources. You can always use our free know your number tool there to see what you might need to have in retirement, based on your goals.

• 54:52Brian Preston?

  And by the way, the calculation on that is typically 80% replacement ratio, not 100%?

• 54:57Speaker 03

  Well, that's why, I don't know if he's using the know your number tool or the how much should you save resource.

• 55:02Speaker 05

  He said, "How much should you save?" See, I wonder if he misinterpreted it and it's really 80%. It would replace 80%. That's possible, but I don't know, I'm not positive either. But this has been great. You've asked some great questions. We love that you show up every Tuesday and we will be back Tuesday at 10 a.m. Central. Don't forget to go preorder Brian's book if you haven't yet. You only have two weeks left to get the perks and to help us support the mission of kind of showing the publishing world and the bookstores and all the things that this book should get out there. The message is important. That's what the pre-orders are really helping us do. So go to moneyguy.com/millionairemission if you want to be a part of that. We can't wait for you to see it.

• 55:40Brian Preston?

  And by the way, if you, if you're a Barnes and Noble or a local bookstore, maybe you support the local, you know, bookstores and you go in and you see that they don't have my current version, or you just want to go talk to the manager and say, hey, are y'all going to have the most recent version of Millionaire Mission that's coming out? Go ask, because that's actually how they drive those store sales is they want to know how much interest the local community has. And that's what made this thing a New York bestseller, a New York Times bestseller. The first time around was you guys. You know, I remember my publisher, we were all at the airport on the book tour when we got the call from the publisher. And you know, when the excitement in your publisher's voice, because it's not supposed to happen on your first book. So you guys made it happen last time.

• 56:25Brian Preston?

  I would ask you once again, because what this thing does is it's getting the message out. You know, we really, nobody writes a book unless it's like JK writing, you know, the, you know, Harry Potter. But if you're, most people writing books, this is not what's actually going to create all your wealth. This was more of just like the, the heart of the podcast was a passion project to help educate people. The writing the book is the exact same thing for me. You don't make a gazillion dollars writing the book, but I think that it's worth a gazillion dollars getting literacy into people's hands at a very affordable price. And that's why, you know, look, I could have kept this thing hardback for many years. Probably they would have ran a whole new pressing, a printing of it.

• 57:09Brian Preston?

  But what I wanted it to be more approachable, so you could give it as more gifts, get more people to hold this, this really great intro that I wanted for myself if I would have been the young version, getting out there, not knowing what to do with my next dollar. So thank you, thank you, thank you, thank you for the reviews. Thank you for all the support. We guys, we really do believe in the abundance cycle. Y'all make it all possible and we love that we get to create this type of content. I'm your host, Brian, joined by Mr. Bo, Money Guy team, out.

• 57:38Speaker 05

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

• 58:14Speaker 06

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• 58:44Speaker 07

  Stonefire naan is made with real buttermilk and ghee. It's the perfect flatbread for any occasion.

• 58:49Speaker 01

  I put out Stonefire naan with dips at every dinner party.

• 58:52Speaker 07

  I make naan grilled cheese when my daughter has friends over. I use Stonefire naan to reward the humans who do my bidding.

• 58:59Speaker 01

  Right. It's perfect for camping trips.

• 59:02Speaker 07

  Dance for it, feeble mortal.

• 59:04Speaker 01

  Sorry, is he talking to me or?

• 59:07Speaker 07

  Dance. Ha, ha, ha, ha, ha. From our tradition to yours, Stonefire. Together we naan.