When Should You Make BIG Financial Decisions?

We're back answering your questions about your important financial decisions. From a young couple considering house hacking to someone unemployed for almost a year to an in-law who might not have enough, we're covering it all in this jam-packed Q&A! ⁠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.

• 0:00Speaker 00

  Your sausage McMuffin with egg didn't change. Your receipt did. The sausage McMuffin with egg extra value meal includes a hash brown and a small coffee for just $5. Only at McDonald's for a limited time.

• 0:12Speaker 01

  Price and participation may vary. Promotion pricing may be lower than meal pricing.

• 0:16Speaker 02

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• 0:47Speaker 03

  Rich has a question next. I am doing the glide path myself and was researching the bond funds is researching the bond funds. Is it as simple as purchasing taxable ones in Roth accounts and the non-taxable and the non-Roth accounts? Also, love the new studio. Thanks, Rich.

• 1:08Speaker 04

  So this is something that a lot of people might find surprising. The fixed income or bonds, another word for bonds or fixed income. The fixed income marketplace is wildly more complicated than the equity marketplace. And for those of you who are not familiar with finances, you'll think that's a hot take. It is, in fact, not a hot take at all. Because bonds are complicated and there is a lot that goes into the fixed income side of the equation. So just want to kind of start there. A lot of people think, oh, bonds, because they are more conservative, because they're lower risk, they must be a lot more simple. That's not the case. And so when it comes to thinking about, okay, well, I'm trying to figure out, how do I

• 1:52Speaker 04

  do a fixed income allocation? It gets really, really difficult. I mean, you just mentioned two pieces of it, right? So do I buy taxable bonds or do I buy non-taxable or like municipal bonds? Well, that is a piece of it, but then you want to talk about what type of bonds am I buying? Am I buying corporate bonds? Am I buying government bonds? Am I buying agency bonds? How far out on the yield curve do I want to go with my fixed income? What do I want the credit quality of my fixed income to be? Do I want them to be callable bonds, non-callable bonds? I want them to be convertible bonds? There is all kinds of. Complexity and nuance that happens inside the fixed income space. This is one of the reasons why we love that when it comes to like investing, when it comes to portfolio allocation,

• 2:36Speaker 04

  we like to focus on the big things that have the biggest impact. And for us, most often, it's more about asset allocation than it is about individual security selection. It's why we love index funds. We even love index funds in the fixed income markets.

• 2:51Brian Preston?

  But it is one of those things where, you know, because we all know I have just an affection towards index funds that is beyond the average American. I mean, I do, we do content on it, you know, a dollar cost average every week. But I will tell you, we have no problem buying index fund, index bond funds, but they're not always because it's such an inefficient marketplace. It's not always the best.

• 3:16Speaker 04

  Might not be all the time.

• 3:17Brian Preston?

  And it's not going to be the only bond investment that you do is because, I mean, bonds as Beau laid out are, can go all over the spectrum. And, you know, a lot of people, when they hear bond, they think that they're super conservative. There are actually bonds out there that are just as risky as equities. I mean, if you get into, and so that's why you have to be careful with how you structure. I will say in the beginning, but this is not you though, Rich, because you're talking about a glide path. A glide path is somebody who's retiring.

• 3:45Speaker 04

  On their way to finance independence.

• 3:46Brian Preston?

  That scares me a little bit is because you need to be kind of harnessing and looking at the complexity and making sure that you, you are landing this plane with all things considered appropriately. Now, we give you a lot of grace in the beginning of the journey. We're like, hey, just go buy the index fund just because your behavior of saving and investing is so much more important than the selection of the investment. But you're kind of on the backside of that. When you start talking about glide path and retiring in the next three to five years, man, you just don't know what you don't know. And this is just one question you have that's makes your life a little more complex is bonds. But I'd also ask, have you stress test your retirement plan? Or are you just going off the back of the math? Back of the napkin math of a 4% withdrawal rule?

• 4:30Brian Preston?

  I mean, there's, there's a lot that should go into your retirement planning that creates a Natural level of complexity that that's when I think you take the relationship to the next level. Now, you know, a lot of you, that's why we can give so much free content away is because your life in the beginning should be pretty simple, even financially, as we tell you the good behaviors. You start doing it. If we do our job well enough, success naturally creates complications. And that's where we kind of step in as advisors.

• 4:57Speaker 04

  I'll even throw one other thing out there. I don't know what your portfolio structure looks like. But even when I hear you saying, hey, well, should I just hold my taxable bonds inside of a Roth IRA or inside my Roth?

• 5:07Brian Preston?

  Oh, that scares me.

• 5:09Speaker 04

  Even when I think about not asset allocation, but asset location, if I have other places where I can hold my fixed income, even if it's in after tax accounts, or even if it's in qualified pre tax accounts, I might like to do that more so than Roth. So again, there's tons of nuance. It is a, and it is a stereotypical time that a lot of people think, man, maybe I should take this relationship to the next level.

• 5:32Speaker 03

  Good stuff. Rich, thank you for your question. I'm really glad that you were here to ask it.

• 5:36Speaker 04

  Prototypical, not stereotypical. It's a prototypical. Not stereotypical, there's no stereotype there.

• 5:41Brian Preston?

  If you saw my SATs, you know I don't get that.

• 5:46Speaker 03

  Well, Rich, what I was gonna say is if you would like a Money Guy Tumblr, just email [email protected]. We'd love to send you one since we answered your question today.

• 5:54Speaker 04

  Somebody just said, the studio chairs look way more comfortable. You know what?

• 5:58Speaker 03

  I think that the guys agree.

• 5:59Speaker 04

  They are. Way more comfortable.

• 6:01Brian Preston?

  They're also, these aren't, they're not boosted up.

• 6:04Speaker 04

  They're not barstool, we were like barstool height, now we are chair height.

• 6:07Brian Preston?

  Now we're normal chair height.

• 6:08Speaker 04

  Feet are flat on the floor.

• 6:09Brian Preston?

  And I like, I like this, I gotta tell you, the custom, whoever made the custom desk, it's gorgeous. It's really, really pretty. And we have.

• 6:18Speaker 04

  You can't show them that part.

• 6:19Brian Preston?

  You're not supposed to show that, Emma.

• 6:21Speaker 03

  It's a secret drawer. Not so secret anymore.

• 6:24Speaker 04

  Not so secret anymore.

• 6:26Speaker 03

  All right, ready for another question?

• 6:28Brian Preston?

  Sure.

• 6:28Speaker 04

  Yes, ma'am.

• 6:29Speaker 03

  Zach W. says, "Love the set. Thank you guys for the set love today. We're excited about it, too." Then he says, "Where does house hacking specifically belong in the foo? My wife, who's 24, and I, 30, have 150K of income. We're at step five. Is house hacking considered step eight, since it would be our residence?" What do you think? And can you define house hacking, just in case that's a new concept for someone?

• 6:56Speaker 04

  Since you're the guy that wrote the book on the foo, I'll say what house hacking is. You talk about where it fits in. So, a lot of people recognize that in this unique housing environment we're in, where the prices of houses have gotten really, really expensive, interest rates are not all that favorable right now, somewhere between 6% to 7%. The cost of home ownership has gotten really, really difficult, especially for young people trying to get into their first home. So, one of the ways you can get around this, or one of the ways you can try to just get on the ownership side, is by what's affectionately known as house hacking, where essentially, I buy a property, but I have someone else come into that property to help me pay for it. This could be buying a single-family home and having roommates, buying a duplex and renting out one side of the duplex,

• 7:39Speaker 04

  buying a quadplex and renting out three out of the four, and then you living on property on premises as your primary residence. What it allows you to do is own a thing, get into the ownership side, but have other people help you pay for it, so that way you get the costs down. It's a wonderful way to get early on real estate exposure in terms of your primary residence. Now, Zach's question is, "All right, I get it, understand it, makes sense. When do I do it? Is this a step eight type thing?"

• 8:08Brian Preston?

  I don't, you know, I look at it as, because, by the way, Zach, well done in the fact that you know when I think you get into real estate, traditional investing, meaning you buy single-family homes, apartments, whatever it is, um, commercial real estate, that is a step eight, because a lot of people jump into real estate way too early, and they don't realize that that whole element of leverage, that you get so super excited about how it can really help you on the way up as real estate appreciates, can also be the bane of your existence if you get into a bad real estate marketplace. So, it's just higher risk, and typically you need additional pockets or deeper pockets, so that you can cover those periods where the real estate marketplace may be stuck in a, the doldrums, or just drags bottom for a few years.

• 8:53Brian Preston?

  Now, let's bring it back to house hacking. What I like about house hacking, and this will kind of lead to the answer too, is that your banks will let you use a primary mortgage interest rate, which is cheaper. When you're living on premise, it's your primary residence, they give you better rates than if you were going out there and getting a residential rental property. You're going to pay a premium on that because you're not living there and it's an investment. This is a way that you essentially get to bring an investment property in with, and you're not breaking any federal laws.

• 9:22Speaker 04

  How about a lower down payment also?

• 9:24Brian Preston?

  You also get a lower down payment because you're putting the money in. So I look at this as, yes, it is a way to get into residential real estate investing, but it's also a better way to get into how can you afford, you know, a primary residence in this crazy new world we're in, where real estate ran above inflation and affordability has gotten into a bad place. But with all that said, now that I've told you how much I love it and praise it, you still have to make sure that you're running the numbers on that leverage to make sure you don't get out over your skis and you get yourself in a pickle of a situation. Because what happens if you go a few months to, let's just say, three to six months that you just can't find a roommate, or you find out the whole,

• 10:09Brian Preston?

  it's a roommate versus it's a duplex, you know, you just, there's things that go wrong.

• 10:13Speaker 04

  It doesn't work real well.

• 10:14Brian Preston?

  You need to still make sure you're conservative enough, that your emergency reserves and your down payment all reflect the risk of the situation. But we absolutely love house hacking. I think it's something that a lot of people should consider if you want to take that step. And you don't mind the hassle factor of essentially being a landlord as well.

• 10:33Speaker 04

  And I love it if you're gonna do it. Again, my experience, this is not like tried and true. It is a little bit easier to do when you're younger. So you said you guys are 24 and 30. This is the time that if this is something that you were going to try, and I didn't mention if you have kids or what the job situation is. I mean, you still, when you think about buying any home, we have, it is a home buying hub. You can go to moneyguy.com/resources. We have a checklist of things you need to think about when you buy a home. We have a home affordability calculator. I mean, make sure you work through these things first. But if you work through them and it makes sense for the life situation and circumstance you're in, I think house hacking could very well make sense.

• 11:14Speaker 03

  Fantastic. All right. Well, Zach W., thank you so much for the question. If you would like a Money Guy Tumblr, we'd love to send you one. Just email [email protected].

• 11:25Speaker 03

  Adam's question is up next. He says, "I've been unemployed for almost 11 months, and I'm wondering how low we should let our emergency fund get before we make big decisions like selling our house. What do you think?" Because this really is when the rubber meets the road, what that emergency fund is for, but there's some other factors at play here, too.

• 11:47Speaker 04

  I want to start by saying, Adam, first of all, I'm sorry. Unemployment is like an unfortunate, sad, not great thing. It's not a great place to be in. So I don't want to minimize it all because I recognize it's tough. That's a really, really hard spot to be in. But as it continues on, and as you find yourself 11 months into this thing, you probably are in the situation where you're starting to think, "Man, I got to make some really hard decisions." Now, what I would encourage you to think about is, what are all of the hard decisions I could make, and what are the ones that maybe make the most sense? Because what you said is, hey, should we make a big decision like selling our home? Well, maybe you got your home at a

• 12:32Speaker 04

  really good time, and it's in the part of town that you really want to be in. You got a really good mortgage rate on it, and your family's there, and you're building memories. Before I played that card, one of the things I might think there's, okay, are there other things that I might do? If I've been unemployed, I've not been able to replace the vocation I'm looking for for 11 months, might there be other employment opportunities that I could seek? Maybe it's in a field different from what I've been doing, or maybe it's below the level that I was at previously, but I just got to figure out how I get back in the game, how I get back on the employment side. Because I'd rather you be able to do that for a temporary time than make a permanent decision like leaving a home that you may not really want to leave, if you

• 13:16Speaker 04

  could see in the future, be five years in the future and look back. I'd just make sure that I would measure twice, cut once, before I made some of those huge decisions.

• 13:24Brian Preston?

  Well, I think you were leading towards how do you get back employed and the financial side. I want to talk about the behavioral side with, because by the way, Adam, 11 months, I think you are at the point, you've got to start making some big decisions. And here's what I know about life, and there's all kind of research to support this, the hedonic treadmill. You typically hear people talk about hedonic treadmill when it talks about consumption decisions. Because you know, you hear about lottery winners who go out there and they buy a new house, new car, new vacation property, they're just doing everything all at once. And they're not spreading out purchases or life decisions and enjoying it as maximum as possible. Well, you're in the opposite situation is that for good things in life,

• 14:09Brian Preston?

  you should spread out big decisions because you want to make sure you can enjoy the moment and celebrate those things. But when you face bad, difficult things, the research on the hedonic treadmill is, is that you should probably go ahead and do everything as fast as possible. Make your adjustments. Yeah. All the hard decisions, don't string them out because you're unhappy, your happiness factor will struggle because you'll be, you'll just keep having to make hard decisions. This month, we decided we were going to sell the house. This month, we had to get rid of one of the cars. This month, you know, you see how this just spreads out. This month, we decided we have to move to another part of the country. No, y'all sit down, come up with a plan, and then put that plan into action where you're doing all the things at once so you can get back to your baseline

• 14:53Brian Preston?

  happiness factor and start reaching success again, that much faster. That's what the research shows is that I think in 11 months of unemployment is that it's probably time to start really measuring twice, cutting once on the big life decisions. And don't forget, we often talk about, you know, put on your 3D glasses, is that there's nothing wrong as you're making those hard decisions. Do it in the 3D glasses way and the fact that you put your dream plan of, man, if we make these hard decisions now, this is where we're going to be back in no time to right where we need to be, the down to earth plan. And then what happens if you have the do do plan where it just doesn't ever recover? Because I've had a lot, I don't know, you know, Adam didn't give us his age, but I've

• 15:34Brian Preston?

  had a number of my clients that unfortunately, just the entire industry moved away from them at a certain age. And they essentially were quasi-retired from that industry because it's just. They got laid off, there were no opportunities for them, enough time went by and they had to pivot or consider themselves partially retired.

• 15:54Speaker 04

  Again, 11 months in, I think about trying to make those decisions sooner rather than later. The ultimate crux of your question is how low should we let our emergency fund get?

• 16:03Brian Preston?

  Don't let it just...

• 16:04Speaker 04

  You don't want to play with that fire because if you get to that uh-oh zone and you start having no other recourse, then stuff starts happening like, okay, it's not do I sell the house, it's man, can I save the house or do I have to walk away?

• 16:17Brian Preston?

  Desperation kicks in.

• 16:18Speaker 04

  You want to not put yourself in a situation where you have to make desperate decisions. So I would start figuring some of that stuff out sooner.

• 16:26Brian Preston?

  Time lets you be the owner of the flexibility and the timing of things. If you let it go too far, you get forced into action and then that's always, that creates desperation.

• 16:35Speaker 04

  That's right.

• 16:37Speaker 03

  Well, thank you for being here. Adam, we really are glad that you asked the question and we hope that that helps to give you something to think about. We would love to just say thank you and send you a Money Guy Tumblr if you'd like one. Just email [email protected].

• 16:51Speaker 00

  Your sausage McMuffin with egg didn't change, your receipt did. The sausage McMuffin with egg extra value meal includes a hash brown and a small coffee for just $5. Only at McDonald's for a limited time.

• 17:03Speaker 01

  Price and participation may vary. Promotion pricing may be lower than meal pricing.

• 17:06Speaker 02

  Hey Spotify listeners, when you travel with American Airlines, you'll enjoy comfort and convenience at every altitude. Before takeoff, unwind in the Admirals Club Lounge with curated self-serve offerings of hearty bites and refreshments. In flight, stay connected with high-speed Wi-Fi. Sponsored by AT&T. Your journey is designed to feel easy from the moment you check in to the moment you arrive. No matter where you're going, American gets you there. Book now at aa.com.

• 17:33Speaker 03

  Mason has a question next. He says, if I'm 23, thinking about fire or early retirement, what percentage split should I be doing between a 401k, Roth IRA, and brokerage? Or are all three, using all three, splitting myself too thin?

• 17:52Brian Preston?

  I think the question, he's getting into, these are important questions, but Bo, I think he's missing, there's a bigger question here that Mason needs to be addressing if he's part of the FIRE movement.

• 18:03Speaker 04

  What do you think that question is?

• 18:04Brian Preston?

  His savings and investment rate.

• 18:06Speaker 04

  The rate, not the split of where it goes, but how much am I ultimately saving? Because what you're counting, you know, a lot of folks, we say all the time, our goal for saving is we want you saving 25% of your gross, so we even have a deliverable, if you go to moneyguide.com/resources, it's not called, what can 25% do for me? It's called, how much did you save? And this shows that for like, normal retirement timelines, if you can save 25% of your gross income, you're going to set yourself up for a bright financial future. Well, folks who are in the financial independence retire early movement, they're trying to accelerate that timeline. So most often, 25% won't get the job done.

• 18:47Speaker 04

  You likely need to have a much more aggressive savings rate, much earlier on, if you want to seriously consider doing FIRE.

• 18:54Brian Preston?

  Yeah, that's, that's the big part I saw is that, Mason, we don't know, because 23, you're just starting out. This is more of an aspiration, I think, at 23. It's kind of like when I first started, I was like, hey, I want to make sure I save a lot so I can retire at 50 years of age. You're at the beginning of the journey, so the savings rate, and savings and investment rate is the most powerful thing you can do right now. And then, of course, I want you going through the financial order of operations, and that's going to be your guide on, hey, get that free money from your employer, probably at your age, you know, in the Roth account for sure, you know, load it up in those index funds, and then after you load up the emergency reserves, of course, go hit the Roth IRA, and then you can move on to loading up your, your employer 401K.

• 19:37Brian Preston?

  I mean, all these things, there's a reason we have a tried and true financial order of operations, but don't, don't, don't back into the wrong question. I mean, I think you gotta get the savings and investment rate right first, and then keep on, because I think that sometimes young people, they have a little bit of success, success in the first few years. You've still got to build critical mass. I think that's, I don't want you to have some false sense of that you've had success when you're only at the beginning of the starting line and yes, you start getting some wins, but you've got to stack up those wins and get into your 30s, 40s where you have critical mass and then now you really have flexibility. And then if you choose to retire, that's great, but you might choose it like I did when I got to 50 and then beyond.

• 20:20Brian Preston?

  I kind of love what I do for a living, so I don't plan on tapping out just yet.

• 20:24Speaker 04

  And if you are someone who is part of the FIRE movement or curious about the FIRE movement or curious about the FINE movement, we have tons of content out there. We have some more content coming out in the near future. Okay, what are the things that you need to be thinking about? What are the things that you need to be looking at? If I want to seriously attack it, how do I do that? So I'd encourage you, Mason, if you've not done this, go to moneyguy.com. You can go into our search, you can look for FIRE or FINE episodes and we have a whole catalog there, kind of walking through what are the things that you realistically should think about if you want this to be part of your financial future.

• 20:59Speaker 03

  Mason, thank you for the question. If you would like a Money Guy Tumblr, just email [email protected] and we would love to send you one.

• 21:07Speaker 03

  All right, Eric G. has a question next.

• 21:11Speaker 03

  He says, "I recently bought a new car for the family and put about 40% down with still 23K and a 6.5% interest rate over 48 months." So that's what's left on it. "I will be coming into 16K soon. Should I put all this toward the loan or invest it?" This sounds like he needs to know about the order in which he needs to do things.

• 21:34Speaker 04

  Eric, the question started off so good. It started off, it started off so good. Here's what I heard, I was like, "Man, Eric's question, 40% down." He said 23,8, "I'll see your 23 and I'll raise you 40%." And I was like, "Man, that's awesome." And he's like, "Okay, it's a 6.5%." Okay, that's not great, but it's not like crazy, crazy. But then he dropped the hammer on me and he said 48 months, four years that you financed this $23,000 outstanding. We don't love that because when it comes to buying automobiles, especially new automobiles, new to you, used, any automobile, when it comes to buying an automobile, we want you to follow 23.8, 20% down. You do not finance it for any

• 22:16Speaker 04

  more than three years or 36 months. And we don't want your car payment to exceed 8% of your gross income. So you have run afoul of 23.8 and your question is, well, how do I right this ship? Well, one thing that I love that he's done, Brian, is he has the equity in the car. If he put 40% down, he's satisfied that. So he's in a good spot. A lot of times we'll see people run afoul of the foo and they'll put 0% down and they'll finance it for long term, but immediately they're underwater. I'm betting in Eric's situation, he's not underwater right now where he owes more than the car is worth. But given he's not inside the foo constraints, how should he fix it?

• 22:55Brian Preston?

  Well, you got, you got two ways. And you kind of mentioned, you can either, if you come into some, some additional money, you can pay down the, the loan to where it's now your payments are going to cross payoff point at three years, or you can increase your monthly payments.

• 23:11Speaker 04

  Yep.

• 23:11Brian Preston?

  And if neither of those two seem like, now your, your situation seems like one of those two choices is going to be what you ought to do.

• 23:18Speaker 04

  There's one's gonna work.

• 23:19Brian Preston?

  Because, because you put down 40%, but there's other people who've asked this question that put down much lower down payments, you know, below sub 20%. And they, they've had to make harder decisions like, should I even be driving this vehicle right now? So that's how you correct and get on the right side of 23.8.

• 23:36Speaker 04

  Yep. But it's doable and, and, and you should do it. Like you should figure out, how do I right this? How do I fix this? Cause you may get away with it for a moment, but all of these, like anytime you like stray from a financial rule, you get away with it. Until you don't. And when you don't, you're like, man, why did I do this? Me and you were talking about the access to cash trap. Or like, you get away with it for a while, but then when you don't, ah, was that worth it?

• 24:01Brian Preston?

  Yeah, just make sure you're not, you're not, we know that with the Financial Order of Operations, a lot of people think it's a stair step where you just go from one to two, three, four, five, all the way up to nine. More than likely, you're going to have some setbacks. You go from six back down to four because you had to use some of your emergency reserves. So, yeah, that's, that's great that it got pulled right up. So I just tell you, understand that there's going to be seasons. Maybe it's a house down payment, maybe it's something to do with the kids, that you might get away from funding things like you want. It's okay, as long as it stays a season and doesn't become a permanent behavior. We want you to be feeling the pressure of, hey, man, I've got time is my ultimate power source for compounding growth.

• 24:45Brian Preston?

  Every month that I'm doing this wrong is a month that I'm probably messing up, reaching my maximum potential.

• 24:51Speaker 04

  Love that.

• 24:53Speaker 03

  Eric G., thank you for being here. As a thank you, we would love to send you a Money Guy Tumblr. So just email [email protected] if you would like to get one. All right, we've got a question from Cory S. It says, "My mother-in-law is planning to retire next June at 65. She only has around 300K in retirement and 80K in a standard savings account. She's scared to even move it to a high-yield savings account. How do I tell her she may not have enough?"

• 25:27Speaker 04

  Well, okay, it's hard when it's your mother-in-law, frankly, right? Like, sometimes really difficult.

• 25:34Speaker 04

  Sometimes having conversations with family members is really, really hard, even though you may be approaching it from a place of love and care and compassion. Relationships are messy and they're sticky. And oftentimes, especially if your mother-in-law's not asked for your guidance and advice, you may not just want to like voluntarily give it to her.

• 25:56Brian Preston?

  But I, with him knowing all the numbers, I think that they're probably, we can assume that there's

• 26:02Speaker 04

  Some sort of conversation with him. So this is, this is what I think could be helpful. Because one, again, one of the things you want to do is

• 26:10Speaker 04

  I think it might potentially be valuable to say, hey, mother in law, I know that you want to retire at 65. Hey, I'm not a professional financial advisor. I haven't done, you know, I haven't done this a ton. But you know, there are a lot of advisors out there who have helped hundreds of people work through retirement. Might it be valuable for us to sit down with someone who maybe charges a one-time deal, or maybe charges an hourly fee, and just have them do a retirement analysis, retirement scenario to make sure that there's nothing we haven't thought of. There's no rock we haven't overturned. There's no contingency we haven't planned for. And that way, what it does is it prevents you from being that person telling her, hey, no, you can't retire, but allows you to open the conversation around

• 26:54Speaker 04

  having a professional step in and maybe provide some light.

• 26:57Brian Preston?

  Well, and Corey, I want to give you some additional tools so you can continue the conversation, at least in a productive way. You're looking, everything you gave there was just assets on the net worth statement. That's the $300,000 retirement account, $80,000 in just a savings account that's probably underperforming a high yield or a money market mutual fund. What you didn't share with us was any cash flow, things that could come to her in retirement. That's going to be social security. Does she have any pensions? Because that's probably the first thing you need to track down is what are those cash flow impacts that will be coming in automatically between social security and potentially pensions? Because then that's going to offset. And then you need, the second thing you need to know is what are her monthly living expenses? Compare and contrast those cash flows that

• 27:42Brian Preston?

  are going to be coming into that. And what's left is the amount of monthly retirement cash flow that your portfolio is going to have to try to cover the difference through earnings and also through the principal. And that's the part where you'll quickly figure out, is this enough? Or do we have to make some hard decisions?

• 27:59Speaker 04

  Yeah. And so, again, personal finance is so personal. There are situations where $380,000 would be nowhere near enough for a 65-year-old to retire.

• 28:08Brian Preston?

  And there's others.

• 28:09Speaker 04

  And there are other situations where $380,000 would be plenty for someone to retire.

• 28:13Speaker 03

  Yeah, my first thought was like, is she already kind of frugal? Is her house paid? Like, we don't know.

• 28:17Brian Preston?

  Yeah, that's what I was thinking about. Retire is debt-free usually. If they're debt-free, you have social security coming in, and they have a small footprint of expenses. It might not be as dire as Corey originally thought.

• 28:28Speaker 03

  Right. And so, yeah, like, we may not want that much in retirement. We may have other goals, but I don't know. I wonder about that sometimes. Like, when you get to that point.

• 28:37Speaker 03

  But those are good, really good pointers for Eric.

• 28:40Speaker 04

  You said she wants to retire. Having conversations, hey, hey, mother-in-law. Okay, walk me through, why do you want to retire? What's the plan? Have you thought through this? Did you think about this? Did you think about this? What's your burn rate? Like, just asking questions can be an incredibly helpful tool to help kind of uncover some of that stuff.

• 28:57Speaker 03

  Yeah, no, really good stuff. Eric G., or, no, that wasn't Eric G., that was Corey. Sorry, I read Eric's question last. Corey, thank you for your question. We're really glad that you're here. Corey, if you would like a Money Guy Tumblr, just email [email protected]. As always, we are so glad to be here on Tuesdays at 10 a.m. Central. We're so glad to be back live with you today on our new set. So, thanks for joining us and just kind of having a fun kickoff, taking the new set for a spin. And remember, just because we turn the cameras off right now doesn't mean that the financial journey stops. Moneyguy.com/resources has tons of free calculators and downloads to keep the conversation going and hopefully to help you feel a bit more confident about your financial situation starting today.

• 29:42Speaker 03

  So, thanks for being here and be sure to go to moneyguy.com if you haven't already.

• 29:47Brian Preston?

  Well, I'm super excited. The content team crushed it. You know, I want to give shout out to Caleb, you know, Josh and others. And then, of course, the writing team and social media has kind of been giving you some previews behind the scenes. Everybody absolutely crushed this set. And, you know, we say there's a better way to do money. I think we found out today there's actually a better way to even have a new set. So, we're pretty excited about that. I thank you guys for joining us today. I'm your host, Brian, Mr. Bo, as well as Rebi. Money Guy team, out.

• 30:20Speaker 04

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

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