Should You Cut Your 401(k) When Money Gets Tight? How to Handle Higher Prices SB1920

Social Security checks are getting a raise because everything costs more. Joe Saul-Sehy, OG, and Doug are joined by a Brooklyn financial planner who works with creative people on lumpy incomes and Jesse Cramer of Personal Finance for Long-Term Investors to ask whether you should trim retirement savings when the budget squeezes. They play “Cut It, Keep It, or Crank It” and “Who Gets the Next Dollar?” with realistic households. The goal is to keep a temporary squeeze from turning into a permanent setback. What You’ll Walk Away With Why a Social Security raise is both good news and a sign your costs went upWhat a single inflation number misses about how prices actually hit your householdThe first signs your budget is leaking if you have never tracked your spendingA quick way to see price changes by scrolling through your online shopping cartsWhat “enoughness” means and how to use it when prices shiftWhen to cut your 401(k) contribution, when to keep it, and why many of the panelists would hold it at the employer matchWhy it is easier to keep a small retirement contribution going than to restart a stopped oneA financial triage order for deciding where each new dollar goesWhether to pay a car repair from cash or a credit cardWhy a 401(k) loan is rarely better than pausing contributionsWhy retirement comes before college savings, even for loving parentsHow to handle lumpy income and set aside taxes before a windfall arrivesWhy asking for what you need in a negotiation costs you nothingWhy This Matters Now Prices are rising unevenly, with groceries, gas, and airfare moving in different directions, and many people are trimming retirement savings to cope. Year-end is when budgets get reset and benefit elections get made, which makes it a natural time to decide your plan before the squeeze decides it for you. This episode gives you a framework you can use without feeling judged for being behind. From the Basement Doug’s trivia goes back to a sailor in 1492 who brought smoking home to Spain and got locked up for it, then to the giant settlement that came centuries later. He also confesses to once trying to smoke a Slim Jim, and nearly gets the guest’s name right while inventing a few new words. Everyone swaps stories about their love of the Sizzler salad bar, and OG tries to hold on to his lead for the “You suck the least” trophy. Resources Mentioned Creative Money: New Financial Rules for Artists, Innovators, and Misfits https://www.porchlightbooks.com/products/creative-money-aj-ayers-9798217180462: the guest’s new book, out Tuesday, Nov 10Personal Finance for Long-Term Investors https://bestinterest.blog/personal-finance-for-long-term-investors/: Jesse Cramer’s podcast See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

• 0:00Speaker 00

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• 1:03Speaker 02

  Good evening. I'm Ron Burgundy, and this is what's happening in your world tonight.

• 1:11Speaker 03

  Live from the basement of the YouTube headquarters, it's The Stacking Benjamin Show.

• 1:26Speaker 03

  I'm Joe Salsihi, and it's a good news, bad news kind of Friday. You want the good news first? You've got it. Grandma's getting a social security raise. So what could be bad about that? Well, that means inflation numbers are high and people are cutting everything from restaurant spending to their 401k plan. How do we negotiate this bumpy road? We'll share strategies. But that's not all. We're closing in on the final stretch of our year-long trivia contest. Can Jesse or our special guest AJ cut into OG's lead? We'll all find out halfway through today's show. And now, a guy who cut his haircut budget in half,

• 2:10Speaker 03

  which was easy because he's only had half the hair for years, it's Joe Salsihi.

• 2:17Speaker 00

  Oh, Doug, that wasn't very nice. Hey there, everybody. Happy Friday to you. Welcome to The Stacking Benjamin Show. I'm Joe Salsihi. Doug, talking about hair, is that why you wear a hat? So you're covering up your, your same problem as mine?

• 2:30Speaker 03

  You don't know. Nobody knows, for sure.

• 2:32Speaker 00

  Nobody, really? Nobody knows. There's probably a full mane of hair there. How are you today, man?

• 2:37Speaker 03

  You know, Joe, today I'm feeling like a fine wine. You know, I'm expensive to maintain, but I'm also getting increasingly bitter. So.

• 2:44Speaker 00

  Good. Yeah, you can't let it go too long.

• 2:47Speaker 03

  You gotta turn me a quarter turn every so often. You can't turn the lights on too bright, keep me out of direct sunlight.

• 2:54Speaker 00

  I remember there was a post on social media a few weeks ago saying, remember when you were a kid and you're like 11 years old and you would fall out of a tree or you'd fall off your bike? Now you just wake up wrong, you wake up funny, you, you know, it's, it's sad. We've got a great show today because there's great news, Doug. You mentioned it at the top of the show. Grandma's getting a raise. Social Security checks, according to information just a couple of weeks ago, the Consumer Price Index came out, Social Security Administration came out with their new numbers. Social Security checks are going up about 3.6% next year. Doug, that means $75 a month for mom, $75 a month more.

• 3:32Speaker 03

  On average.

• 3:33Speaker 00

  Yes, that's a lot of shrimp appetizer done at the Sizzler, man. It's good. There is a problem, though. The reason why grandma is getting a raise is because everything costs more. This isn't politicians saying grandma deserves more. This is just the way that they calculate numbers based on inflation. So when grandma gets a big raise, that means everything costs a lot more. And bad news on the other side of this, news out of Goldman Sachs also a couple of weeks ago says that working Americans are doing the opposite of what we tell them to do. They're actually saving less money for retirement, people backing down their 401k contributions, their retirement contributions to pay for today. So here's the question, Doug, we're going to be asking everybody. You ready?

• 4:19Speaker 00

  Ready? Should you actually cut your 401k contributions when money gets tight? If you do, how do you keep this temporary problem from being a permanent money disaster?

• 4:30Speaker 03

  Do we have some people here today, Joe, that are going to help us answer that question?

• 4:33Speaker 00

  Well, I'm glad you did. You said that because I was going to say, now that we know the problem, we know the stakes, let's use going to help us solve this. Let's start off across the card table from me. Mr. OG is here. You're pretty happy grandma's getting a raise, aren't you?

• 4:47Speaker 04

  I mean, it's 75 less dollars that mom gets to spend on my credit card. So yep, I'm sure it works out for me.

• 4:54Speaker 03

  Trickle down economics right there.

• 4:56Speaker 04

  That's right. That's exactly right. That's like literally 75 more dollars in my pocket. So go me.

• 5:02Speaker 00

  However, inflation is the cause of it. So who knows?

• 5:05Speaker 04

  It was like the thing I saw the other day about college football and how everybody's beating, you know, it's like you beat this team that beat that team that beat that team that beat that team that beat that team that beat you. And it's like, congratulations, you beat yourself, you know, like in this, this big Mobius loop.

• 5:22Speaker 00

  What was that old kid's song? I am my own grandpa, like the whole?

• 5:26Speaker 04

  Wait, what?

• 5:26Speaker 00

  Thing? No.

• 5:27Speaker 03

  Yeah, let's just move this along.

• 5:29Speaker 04

  Unaware of any grandparents songs about being your own grandpa. That sounds pretty weird.

• 5:33Speaker 00

  No. Jesse Cramer's here from Rochester, New York. Jesse, you know that there's this kid's song. You've heard it.

• 5:40Speaker 05

  Right. I think I'm really glad. So between myself and our very special guest today, we'll have some references that are, you know, beyond the baby boomer generation, right? We'll have some, I don't know how good I'll do it, Gen X, but Gen Y, Gen Z, maybe even Gen Alpha. I probably start to fail there, too.

• 5:57Speaker 00

  How are you today, man?

• 5:59Speaker 05

  Doing well, doing well. I'm excited for the conversation. We've got some beautiful weather up here, just gorgeous blue skies and colors in the trees and it's, it's hard to be unhappy.

• 6:09Speaker 00

  Well, we brought in somebody from the other side of New York from you. She runs a financial planning firm in Brooklyn, and she has a brand new book out where she's helping creative people who often have this, this problem where their money goes up and down and up and down, and often it's a lot of down and then few spikes up. AJ Ayers is here. How are you?

• 6:30Speaker 06

  I am great. Thanks so much for having me.

• 6:33Speaker 00

  Well, I'm super happy you could be here today. Tell us about your financial planning firm because you serve a very specific group of people.

• 6:40Speaker 06

  Yes. Well, first of all, we are lying to everyone because we named our firm Brooklyn FI, and we have about 24 team members and only one of them lives in Brooklyn, which happens to be me. I haven't left. I'm never leaving. I'm never leaving. This is the greatest place on earth. But yeah, so when we started the firm, my business partner Shane and I looked around and said, hey, we've got all these friends who are artists, musicians, photographers, and they're making real money. They're getting advanced checks. They're shooting the cover of Time Magazine, and there is no one out there who can help them because they don't have a million bucks. And by the way, they're 30 years old and they might have a million bucks in a few years. Maybe their company's going public. And so we thought, hey, why don't we start a firm that can serve people who don't necessarily

• 7:23Speaker 06

  have money today? And basically their entire net worth is going to be based on a few windfalls. And we don't know when they're going to happen, but they need, you know, complex tax and investment advice when they don't have any money. So it was a really weird business idea, but it did work. It did pay off. And serving creatives and their partners who often worked in the marketing department or the engineering department at tech companies, that turned out to be a really good marriage of the niches, both the creatives and the tech entrepreneurs and tech workers who would go through these IPOs. So that is how Brooklyn FI was born.

• 7:57Speaker 00

  That's fantastic. You know, you and I backstage before we started this show, I mentioned that my very first writing job after I was a financial planner was writing for a woman who coaches creatives in Los Angeles. And what's wild, AJ, that you know, that maybe a lot of people don't know is because money comes so sporadically, it's very easy to live this gigantic steak dinner lifestyle when you have money and then, you know, it's ramen noodles for six months. It's this boom bust lifestyle, isn't it?

• 8:27Speaker 06

  Yeah, we call it lumpy income. There's lots of different words for it. And there's lots of different ways to smooth out the waves, smooth out the lumps. But at the end of the day, which I think we'll talk about this, we got to have good habits, right? And what do creative people hate more than anything? Routine, being normal habits. So a lot of the struggle of helping creatives is, is frankly, just like a mindset shift and, and talking to them in a way that they can relate to and understand. And that's sort of why I wrote this book, which I happen to have a copy of right here.

• 8:56Speaker 00

  That you just got copies of?

• 8:58Speaker 06

  Yeah, it's, it's not out yet, but I got advanced copies.

• 9:01Speaker 00

  Comes out November 10th. We'll tell people how they can preorder it, but that's much later in the show. We'll tell you that at the end. Right now, we're going to help you solve what we hope is a lumpy problem, the fact that inflation reared its ugly head again with the CPI numbers. And so a lot of people cutting back, cutting back on their future to try to solve problems today. How do you do that? Well, that's why we asked AJ to come because she helps creatives do that all the time and it doesn't feel like there's enough money. And of course, OG and Jesse, they've been down this road many times with people as well. So I can't wait for the discussion. We have a couple of sponsors who help us keep on keeping on, bring special guests like AJ and Jesse and OG and even Doug.

• 9:42Speaker 06

  Oh, you're paying me? Cool. I didn't know that. Just kidding.

• 9:46Speaker 00

  We got to move it along.

• 9:47Speaker 05

  You're paying her?

• 9:51Speaker 00

  We make sure that, that we can keep bringing this to you for free. So we don't have to pay AJ. We, we're going to hear from those. Listen, you get all flustered now. We are going to hear from them. And then AJ, Jesse, OG, Doug and I, we're going to dive into, well, how to solve this problem when there's more month than there is money.

• 10:13Speaker 03

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• 11:16Speaker 00

  Well, you may know that chaos is the name of the game here in mom's basement. What with guests coming in and out, Cooper, the cat getting in the way, Doug being well, being Doug, the holidays make it even worse because it's all about food and big meals. And the problem is prepping for those takes forever. But what about those between meals, right? The meals between those huge, huge, huge bookends. Well, that's where factor comes in. Factor is made with high quality ingredients that you recognize and trust with over 175 banned ingredients. You always know you're eating something that's good for you, even when you don't have time. It's ready in two minutes, whether it's lunch between meetings or dinner after holiday shopping.

• 12:00Speaker 00

  Factor requires zero prep cleanup or effort from you or mom. So you can focus on everything else in your day. Factor even has heart smart options like the green goddess barramundi with tomato, rice, peas, kale, and green beans, or the enchilada style chicken and sweet potatoes. Those are so good. They're crafted with lean proteins, fiber packed fruit and veggies and healthy fats. Try those out. Your heart and your taste buds will thank you. For Cheryl and I, factor has been a great way for us to stay busy and focus on family life and beating mom at card games. I use factor and you should too.

• 12:44Speaker 00

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• 13:20Speaker 00

  All right, guys, here's what's going on. This is the news. So we got the numbers maybe mid October where the consumer price index went up 3.7%. Social Security checks were adjusted 3.6%. It always is crazy to me, by the way, that we have these two numbers that come out on the same day. They use two different calculations. They're very close, but why one part of the government doesn't talk to another? Nobody knows. What's weird about these numbers though, is that they're not even. The grocery store went up around 2%, a little less than 2% price at the grocery store. That was good news. But if you're somebody that travels, if you use a car, gasoline prices up by nine, I think everybody's heard that. And then if you're somebody that flies airline tickets over the past year have gone up 22%.

• 14:05Speaker 00

  The price of rent, some good news there, only 3.2%. So we've got this really lumpy inflationary data that's very frustrating. So depending on who you are, it might be hitting you hard or it might not be so. Oh gee, let's start with you. Grandma's raise, grandma's raise, good news, bad news, or just an attempt to keep her from falling behind?

• 14:26Speaker 04

  Well, I think that generally speaking, if your entire lifestyle is built into your social security wage, you're always going to feel a little bit behind because frankly, you know, that's not a lot of cash to begin with. I recognize that some people, you know, that's just kind of where they are and that's how life is. And so I would think that it's not so much of a raise as it's keeping pace, you know, based on the social security data and the inflation data. But this also is an important reason why I think from an investment standpoint, that you continue to think about investing long into your retirement years as being still investing your portfolio as opposed to somewhat of this broad brush stroke stuff that's still out there of like, oh, you're getting closer to retirement.

• 15:09Speaker 04

  You should be conservative because you know, as you've just pointed out, there's a whole bunch of things that have gone up a little bit higher than average inflation. You know, I'd probably put healthcare in there. I didn't hear you say healthcare. Undoubtedly that's through the roof also. And if you have fixed income sources like social security or like a pension or something like that, even if you start a little ahead of the game, you know, that's just going to catch up and get past it. So you need assets that are going to, you know, increase at a rate greater than that inflationary rate over time. So as it relates to social security increase, kind of a nothing burger. I mean, $900 is not zero a year. You know, if the average you said is $75 a month, but this is not extra money. This is keeping your lips above water money.

• 15:52Speaker 00

  Stay on a float. AJ, I just gave you how lumpy this is. What does a number like the consumer price index fail to show about what the average household's actually experiencing?

• 16:04Speaker 06

  It's an average. Most households experience hardship in clumps. And so yes, gas might be more expensive. And if you've got to drive 30 miles to work, like most people in this country who are going to have to rely on social security, you know, that's going to be a much, much bigger impact in your ability to stay afloat as a household than what, you know, CPI is telling us. Whereas for me in New York City, you know, we jokingly track things like the shrimp cocktail index, which is the price per shrimp in a shrimp cocktail, which does matter to me, right? You know, I don't want to pay $15 a shrimp. It's very expensive to go out and have a shrimp cocktail and martini in New York going to dramatically impact my life. No. So I feel like these national averages, unfortunately, we're, we're living in this K shaped economy

• 16:49Speaker 06

  where the rich are getting richer. And yes, things are more expensive and we complain about it, but the poor are getting poorer and have less access to all those resources you mentioned. So yeah, 75 bucks a month. Things are a lot more expensive than I think just adding 75 bucks a month.

• 17:03Speaker 00

  AJ, come to Texarkana, they give out brine shrimp at the Sizzler. You get like 7,000 of them.

• 17:09Speaker 04

  They're called crawfish.

• 17:12Speaker 06

  I heard you mention Sizzler in the intro and I was backstage and I was not allowed to interject, but I grew up on Sizzler and it remains one of my favorite. I love a salad bar. Like I'm a high load kind of girl and I love a Sizzler. That toast.

• 17:24Speaker 00

  Right on.

• 17:25Speaker 06

  That's my last meal for sure.

• 17:26Speaker 00

  What happened to the Sizzler? I mean, what happened to the salad bar? I mean, yeah, yeah, we've got a few Sizzlers around.

• 17:31Speaker 06

  It survived the pandemic. I was worried about it for a second.

• 17:35Speaker 00

  Of all the things to be worried about.

• 17:36Speaker 04

  That was what she was worried about most. AJ was like, if the Sizzler makes it, we're all going to be good.

• 17:41Speaker 00

  No. Jesse, AJ brings up this great point that, you know, you've got these different indexes based on what, how people spend money. It's going to hit them differently. The average person doesn't track their expenses, right? If you don't track where you spend money, where do you start seeing this inflation hit? Like, what are your first signs that the ship might be leaking?

• 18:03Speaker 05

  If you don't track your money, what are the signs? What are the signs that the ship is leaking? Yeah, well, I guess it's going to come up in things like over drawing a bank account or a monthly credit card payment that you don't have enough cash to actually cover or a check might bounce. I mean, right? Like if you're not actually tracking in some way, it's, I don't think that I used to, I'm trying to think of how I used to say it. It's like not, you don't have to track, you don't have to budget, but you can't do nothing. When it comes down to tracking money, like that's one of my principles that I kind of stand on is some people plan ahead on the month. They know they're earning $5,000 and they apportion that out through a budget and that's fine. And other people don't budget at all, but at least after the fact, they're looking at how they spent money and that's fine too.

• 18:47Speaker 05

  But the act of just not paying attention at all, boy, whether inflation is high or not is eventually going to lead to some circumstance where, you know, you do something stupid like, like bounce a check or overdraft or miss a credit card payment.

• 19:00Speaker 00

  And you're like, wait, what?

• 19:01Speaker 05

  Yeah. And now you really know the ship is leaking and you probably don't have enough data on hand to easily fix it either. Now you have to go back.

• 19:09Speaker 06

  Interesting thing.

• 19:09Speaker 05

  Yeah.

• 19:10Speaker 06

  About data is now we have the data because we all have Amazon carts and we all have Walmart carts and we all have Target carts. So a lot of us are ordering the same stuff every month, right? So if you're ordering your Listerine, your mouthwash, your eggs.

• 19:21Speaker 05

  Your shrimp cocktail.

• 19:22Speaker 06

  Your protein powder, your shrimp cocktail, you know, your, your Texas toast, you know what your cart was last month. I've noticed all these people posting all these memes of like, you know, last year, my grocery cart was $67 and now it's $111. We now have all this data because we all shop and we buy the same thing. So even if you don't track your expenses, you can start to see like, oh, wow. I, last time I bought AA batteries, they were half price. These are things that people need, you know?

• 19:49Speaker 00

  Yeah, just go back and scroll through your history.

• 19:51Speaker 06

  It's brutal. Don't do that.

• 19:54Speaker 00

  Oh gee, I think OG's on your team there. Like do not go back, OG, and look at your Amazon history.

• 20:00Speaker 04

  Oh, Amazon history? We just had a chat about this at my house. We've had more Amazon deliveries than days in the year.

• 20:05Speaker 00

  I thought about you the other day, OG. I saw a comedian, I forgot to capture it or I would have played it here. The guy's like, I work for Amazon now. I'm the guy that breaks down the boxes after my, after our latest order.

• 20:16Speaker 04

  Yeah. I had Claude take our transaction history from all of our credit card spend and put it into like a visual capitalist style of deliverable, basically that I could share with my family. What it created was a dot for every time my kids went to McDonald's, every five times they went to McDonald's. So it's like, you know, these dots and my son looked at it and he goes, well, it's not that bad, dad. There's only like 15, 16 dots there. That's not bad for the entire year. I go, each dot's five, William.

• 20:46Speaker 04

  Let's do Chick-fil-A and then Jimmy John's and sometimes it's better not to know. I gotta be honest.

• 20:52Speaker 00

  AJ, I want to divert away from this for just a second to bring up one of the concepts in your new book, because I think this is going to be important. You have this concept called enoughness. Can you talk about enoughness? And then I'm going to come back to inflation here and ask you some questions about enoughness.

• 21:07Speaker 06

  Yeah, I mean, the, the problem with all of us is we say things are too expensive. What does that mean? Can you literally not afford them? Does it mean that you're have, gonna have less for retirement? For me, when I wanted, when I set out to write a personal finance book, I thought, what's actually going to change people's lives? What is a concept that is going to get people to think like, oh, actually I'm okay? Because sure, we all know, we're all relatively educated personal finance media people and professionals, like, we all know what the answers are, right? Spend less than you make, invest for the long term. We've known the right answer for so long. So I came up with this idea of enoughness. It's based on other people's ideas. It's not like a silver bullet. It's be happy with what you have.

• 21:50Speaker 06

  Understand what little things that you like that can increase your happiness. For me, it is shrimp cocktail and martinis. And that is very important to me. And I know that even if I have no money or very little money, spending $40 on this one thing is going to make me very happy. So this concept of enoughness is look at what you have, take stock and think about where you're going and sort of always be striving and the, the liminal space between what you have today and where you could be, that's enoughness. And if you have that and you've identified it, you're going to be happier. That's my thesis.

• 22:24Speaker 00

  AJ, sticking with that, I think that's such an important thing to think about. What is enoughness for us, right? What am I really solving for? Cause a budget shouldn't be about less happy. It should be about building a moat around the things that make us enough and other things not having. What happens when inflation changes what enough actually costs?

• 22:45Speaker 06

  Yeah, I mean, this is what we're all dealing with right now, right? And the government's trying to solve it by increasing social security payments for those who are lucky enough to receive them. When inflation changes things like, you know, my whole book is about like pivoting, you know, if you can't afford the lifestyle that you have right now due to increasing costs, whether that's inflation or, you know, a bad rental market in your city, you know, you have agency and you can move, you know? If you can't afford your lifestyle, like I, I sort of feel like I sound a little harsh sometimes and people are like, well, that's not fair. I'm like, well, if you can't afford to live in your city, do you want to be $100,000 in credit card debt? No.

• 23:22Speaker 00

  Is it actually fair to yourself to stay there is the better question, I think.

• 23:25Speaker 06

  Exactly. Yeah. Exactly. So, you know, when things become untenable, you kind of have to do this evaluation of, you know, can I ride this out for a few months? Is this a temporary problem? Or is this something that's going to dramatically impact the trajectory of my life, which wink, wink, I think we're going to talk about later. Am I going to make changes that are going to be temporarily painful that will help me in the long run? Or is this so detrimental to my health and happiness and future that I need to do something drastic, like change careers or move cities or get out of a relationship that's a drag?

• 23:57Speaker 00

  Well, let's make some of this actually tangible. I got a game stackers. We're going to play a little game called cut it, keep it or crank it. So everybody tells you to save more for retirement. Great advice, very inspirational, be great on like a motivational poster. But what happens when you also need groceries? The car needs tires, the credit card company sending you love letters with a 24% interest rate? So here's what we're going to do. I'm going to show you guys a couple of stackers whose financial lives are getting squeezed. Each of you have to decide what happens to their retirement contributions. Do you cut it? Meaning do you temporarily reduce the 401k? Do you keep it? Do you maintain the retirement contribution because you've got maybe a better solution? Or three, do you crank it?

• 24:41Speaker 00

  Do you increase it because the bigger danger is going to be falling behind? All right. So it's, it's do we cut it, keep it or crank it? So here we go. Number one, Marcus, 35 years old, makes $85,000 a year. His 401k contribution is 10%. His credit card debt is 12%. Marcus has been told that a 10% contribution is a great retirement savings rate. He's pretty proud of that number. Unfortunately, his credit card company is even prouder of their number 24%. He wants to know whether he should reduce his 401k contributions to attack the debt. Do we cut it? Do we keep it or do we crank it? OG, let's have you go first.

• 25:23Speaker 04

  Can I ask a follow up question about Kevin or whoever this guy's name is?

• 25:27Speaker 00

  Marcus?

• 25:27Speaker 04

  Yeah. Marcus? Yes, sure. You can make up names. I can make up names.

• 25:32Speaker 05

  All right. You're a people person, OG.

• 25:36Speaker 04

  I definitely do scream people person. Like what the hell is your name again? Bob, Tim, Tom, whatever. Anyway, so is this a problem that Marcus is increasing or is this something that's been lingering for a while? Like it's just, you know, we've got a credit card balance. We're not really making any progress, but we're not getting any worse. What's the line there?

• 25:52Speaker 00

  Yeah, he had a few big chunks that made it, but it's kind of stayed at 12,000. He's been able to keep it there.

• 25:58Speaker 04

  Yeah, I like the idea of reducing the 401k contribution to the match, assuming that there's a match there for a short period of time to attack it. But I want to see the exact dollar amount go from 401k to, to debt payoff. Assuming that it's, this is not a systemic problem of like, I spend too much. It's like, I had a couple of bad things going on and I got a little bit behind. But only if it's a dollar for dollar thing. We're not going to guess them by golly here. We'll figure it out and make those automatic payments happen.

• 26:28Speaker 00

  Jesse, you like that?

• 26:30Speaker 05

  Yeah, I like that as my upper limit on how much I'd keep contributing to the 401k is up to the match. And then I think from a behavioral point of view, there's nothing wrong with Marcus just saying like, okay, I done goofed up. I got myself in this credit card debt. I'm just going to cut off 401k contributions for now and put as much as I possibly can against the debt. And, and similar to what OG said is like, he should be able to project forward a certain number of months and, and determine like, well, if I now take $1,800 a month and put it toward the credit card debt or whatever, it's probably too much, but whatever the math ends up being.

• 27:03Speaker 00

  Yeah.

• 27:04Speaker 05

  It should be paid off in 14 months. Like he should be able to figure that out and then execute on it.

• 27:08Speaker 00

  Now we've got, there's a lot of programs out there that do this, but even in Fieldkit, our app, we've got a debt payoff calculator. If I apply this directly to that, how will it shrink it? AJ, you've got this cool financial triage plan in your new book. How do you work through this using your financial triage?

• 27:24Speaker 06

  Yeah, I agree with OG. I am a big fan of never turn off your retirement contributions, even if you have to get it down to a 1% during like a really hard stretch. Like I just think it's very hard behaviorally to turn it off and then bring yourself to turn it back on. Chances are life doesn't get a lot easier, right? Right? You have the hardship. You gotta pull out the credit card, you pay it off, like something else is going to come up. So yeah, I have the financial triage plan, also known as a savings order of operations. And we basically just go down this list and it's like, hey, I think everyone should have a financial planner, but if for whatever reason you can't afford one, you don't want one, this is a framework you could always come back to. Step one, do you have high interest credit card debt? If yes, you gotta pay it off. Step two, do you have an emergency fund? We need to have that.

• 28:09Speaker 06

  So we have that cushion so we don't go back into credit card debt next time. Step three, contribute to your 401k. Obviously those three are kind of at odds with each other.

• 28:17Speaker 00

  Sure.

• 28:17Speaker 06

  But my recommendation here for you, Marcus, is keep that 401k contribution. I like OG, keep it up to the match. Like let's reduce it a little bit, but let's not kill it. And then let's aggressively pay off that credit card debt. There are probably other places in your life that you could temporarily turn down $12,000 in credit card debt, 85,000 salary. This is not, this is, you can, you can do this in a year, I think. I think you could do this about a year, maybe 18 months and not have to have your retirement suffer.

• 28:44Speaker 00

  That's exciting. I love like Jesse alluded to, and you just put a pin in knowing that if I stick to this, what my payoff date is, because that's where the excitement is. You kind of show people the top of the mountain and how cool it is when you get there and you're like, we're a year, maybe 18 months away. What could be bad about that? AJ, let's stick with you. The Rodriguez family, they make $110,000 a year. Their 401k contribution is 12%. They have $3,000 in emergency savings, but the bad news is with all this inflation over the last year, they have a shortfall every month of about $400. So that emergency savings has been going down every month. They have two kids, groceries, insurance and utilities have gone up. They're covering that monthly, like I said, with the emergency savings.

• 29:26Speaker 00

  So they're doing what every financial expert tells them to do, save aggressively for retirement, but they're borrowing money every month to keep the lights on. They're beginning to wonder if maybe they need to do something about their credit card. So do they reduce the 401k from 12 to four until they stabilize things? What do they do, AJ?

• 29:47Speaker 06

  Yeah, I mean, this is one of those situations, like $400 a month is sort of kind of like on the edge. So are there a few expenses we could cut? Could we turn down the retirement contribution 1% and, you know, cancel cable or something that we could live without? But I also have to go back and ask the question, is $400 going to become $800? Like, are there big or structural changes that we need to make in the family? Whether that's look for a higher paying job, easier said than done. Maybe look for a different school district that has cheaper or better after school care. Like if you're teetering towards the edge and you're trending towards debt every month and not being able to kind of get out of it, that's when we get to this question of what are the big changes we can make so we can get out of this without sacrificing quality

• 30:32Speaker 06

  of life?

• 30:33Speaker 00

  That is interesting, Jesse. AJ brings up, it's usually not black or white. There's, I mean, there's, you, you could change the way that your family just lives.

• 30:41Speaker 05

  There are so many dials to turn, right? There are so many dials to turn. It can be discretionary spending. It could be, you know, I think one of AJ's points was like, well, you have to live somewhere. So like housing expenses are mandatory, but do you have to live exactly where you live right now? It's a hard decision to make, but it's, it's a decision that is on the table. Similarly, like people say, well, the only way I earn money is through my job. And that's true, but, but do you have to work right there forever? Can you, can you figure out other ways to pad your income or over a long period of time to increase your income? I would say for this, um, what was their name again? The, the Rammstein family? No, for the Rodriguezes. I remember, I remember for the Rodriguezes. I would say in the short term, I would encourage them to try to identify to some discretionary

• 31:26Speaker 05

  spending that they could cut to at least eliminate that $400 monthly deficit. So that's the short-term solution. And I think the longer-term solution probably involves either increasing income or, or just finding some other things that would really move the needle in terms of decreasing their, their monthly spend.

• 31:44Speaker 06

  Give one of the kids away, right? That, that'll, you'll find your 400 bucks a month.

• 31:48Speaker 05

  Payment plan.

• 31:48Speaker 00

  That is so funny, AJ, because every parent is laughing with you because they know you're joking. And I know every person that I've ever met who doesn't have kids is like, oh, you're awful. That's horrible.

• 31:59Speaker 06

  As a new parent myself, I'm allowed to say that.

• 32:01Speaker 00

  I was gonna say, the second you crack that joke, I'm like, oh yeah, she's a mom. She's gotta be a mom. Cause as a father of twins, we've had days where I'm like, you know, yeah. OG, how much do you dive in with the Rodriguez family on their expenses? Like look line by line to see, you know, is there maybe some cuttable stuff here?

• 32:21Speaker 04

  Me personally, as it relates to like professional capacity, very little, honestly. But I don't necessarily think that that's our role. I was, I was thinking about this question. So I have a family member that's kind of going through some of this stuff right now, right? Kind of lives in a house that maybe is a little spendy for, you know, where we are lifestyle wise and, or income wise. And I think that far too many people have all of this, you know, stuff that's out there and then have too many like sacred cows that we can't do anything with. Right? It's like, well, no, I can't, you know, the school district, you know, you don't understand. Like it's the only one good, only good one in town. It's like, my wife went to the crappiest

• 33:04Speaker 04

  school district in Michigan, literally was the salutatorian, sorry. And, um, you know, went to the University of Michigan, like got a great education, did well in her career. Some of it's how much you put into it also. And I think there's so many lines in the sand that get drawn when in reality, if you're facing these things, I think you have to say, everything counts. You know, everything is on the table and some of it's income. We've talked about it many times on the show about how you can cut expenses only so much. You know, you still have to eat and, you know, heat your house and Doug doesn't believe this, but you do, you do have to shower on occasion, but you have unlimited income potential.

• 33:45Speaker 04

  You can attack it both ways. I don't know that it's my job to say Hulu's important or not important. I mean, I have a personal opinion about it, but it's for you to decide. But the reality is, is like, if you're trending in that direction, like AJ said of like, well, it's 400 now, but it might be 500, it might be 800. You know, you gotta do something eventually. So do you want to rip the Band-Aid off now? Or do you want to wait until it's really bad and you're maxed out on credit? Cause that gets ugly in a hurry.

• 34:11Speaker 00

  And that's where AJ, I like, and this is why I wanted to bring up this idea of enoughness. School district, is this enoughness or is this just fine? Your job, is this enoughness? Or is this just fine? Like really only you can answer those questions.

• 34:25Speaker 06

  Yeah. I mean, that's the hardest part of the financial advice that we're all saying is spend less money. Like that sucks to hear, right? We all know that. Like we all spend less money.

• 34:34Speaker 00

  Unsubscribe.

• 34:34Speaker 06

  More money. Yeah. Yeah. This show sucks. What am I doing? Just kidding. No, it's great. The idea of enoughness is like, not every single thing in your life is going to be firing on all cylinders at all times, right? You're going to have ups and downs. Early on in this whole me learning about money thing is like a weird right brain creative girl was like, oh, the US stock market, if you, if you look at a hundred years of history, it goes up and to the right, but there's all these blips along the way, right? There's the Great Depression. There's, you know, the seventies. And I was like, oh, that's kind of what life is like, right? You're going, you have a nice childhood, college is fine. You know, then your dad gets sick and you gotta leave your job and go home and take care of him. Then everything's trending and then you meet your partner and then they turned out to be terrible and you break off your engagement, you know?

• 35:16Speaker 06

  And so there's these like things to get through. So so much of like this idea of lumpy income also I think applies to like lumpy life. And if it's something that you think you can get through, tone down the 401k contribution, make a little adjustment. If it's something that's going to be really big, that's going to take you a few years to get through, might be time to think about bigger, sweeping lifestyle changes.

• 35:38Speaker 00

  It is interesting. It's these times when you're struggling a little bit that you make these big changes that really affect the rest of your life. It's never when you're high fiving yourself because things are going great. It's times like now when you find out, you know what? I cut that out of my budget and it was phenomenal. I never needed it. Or I moved and I had no idea that living in a smaller house is something I'd like, or whatever, whatever the thing might be. Hey, we are way overdue for what we normally do at halftime during our Friday shows. That's our Friday competition. We have this year-long competition going on between OG, Jesse and Paula Pant. AJ, today you are sitting in for teen Paula Pant.

• 36:17Speaker 06

  Wow. Big shoes to fill. Big fan.

• 36:18Speaker 00

  It means good news and bad news though. AJ, do you want the good news or the bad news?

• 36:22Speaker 06

  Bad news. Just tell it to me straight.

• 36:24Speaker 00

  Well, the bad news is you're not winning. Uh, because well, Doug, what's the score so far as we have maybe a month to go?

• 36:33Speaker 03

  Yeah, it's rough out here, Joe. I do not like where this is headed because we're back in a situation where the prince of darkness has an extended lead. Both Jesse and Paula today, AJ have 10 points. OG's, uh, he's getting his kick going. He's at 13 points.

• 36:52Speaker 06

  Okay.

• 36:53Speaker 00

  OG's up by three for the chance to bring home this beautiful Dollar Store trophy that says, you suck the least on the bottom. Jesse's trying to defend this. Jesse, you gotta defend this, man. This is high stakes here.

• 37:08Speaker 04

  There's a plan. Uh, there's a plan in place. Doug is ye of little faith.

• 37:13Speaker 00

  We better see if that plan starts today. The good news though, AJ, is because Paula finished last, last year and you're tied with Jesse, that means OG's going to guess first. Jesse will guess second. So you get to guess third, which is always great, but only one person knows what the question is, and that's neighbor Doug. Doug, what's on tap today?

• 37:33Speaker 03

  Hey there, stackers. I'm Joe's mom's neighbor Doug. On this day back in 1492, Christopher Columbus and his posse were out looking for a Burger King that was open late when they encountered something Europeans had never seen before. People smoking tobacco. One of Columbus's sailors, Rodrigo de Arrez, saw a bunch of the natives taking a smoke break and said, hey, guys, can I be one of the cool kids? He brought the habit back to Spain where people were understandably a little freaked out by a guy blowing smoke rings out of his mouth. In fact, according to the story, the Spanish Inquisition decided the only possible explanation

• 38:14Speaker 03

  was that Rodrigo was possessed by the devil. So they threw him in prison for seven years for smoking. Oh, maybe that's where the term the devil's weed came from. Probably. By the time Rodrigo got out, smoking had started catching on across Europe. So apparently the lesson was if you're going to introduce a new product to the market, make sure you get regulatory approval from the EU first. 506 years later, all these smokers got together to blame cigarette manufacturers for the whole mess. So here's today's trivia question. In the 1998 Tobacco Master Settlement Agreement, how many billions of dollars did the four tobacco companies agree to pay the states over

• 38:55Speaker 03

  the first 25 years? I'll be back right after I take a quick break. I'm just going to the bathroom. My son, I wouldn't do that anymore.

• 39:05Speaker 00

  OG, it is, uh, the great, the great cigarette, um, uh, what's it called? Oh my goodness.

• 39:15Speaker 04

  Settlement.

• 39:16Speaker 00

  Settlement, settlement. Thank you.

• 39:18Speaker 04

  Settlement of 98. You know, fun fact, the lead attorney for this was our neighbor. So.

• 39:23Speaker 00

  It was so weird.

• 39:25Speaker 06

  So you know the answer.

• 39:26Speaker 00

  Oh, AJ, every week the person lives in his neighborhood. It's amazing.

• 39:29Speaker 04

  Well, I mean, we have a pretty nice neighborhood, but this guy in particular, uh, blathered on and on and on about how big this settlement was. And, you know, even as a wee lad in 98, I remember this like, like it was yesterday. Now, now you did clarify this was, this was the settlement over the first 25 years.

• 39:47Speaker 00

  Correct.

• 39:48Speaker 04

  So I gotta adjust it a little bit because I do believe I had the full number. So I, I'm pretty confident that the, that the first settlement amount in billions was very close to five, but I'm going to say 4.9 because I think it was like 4.93, but I'll just say 4.9 billion, just so there's no confusion there.

• 40:10Speaker 00

  4.9 billion. Billion with a B dollars. Jesse, how many billions do you think that number's low or high?

• 40:17Speaker 05

  This isn't the per year for 25 years. This is the sum of 25 years.

• 40:21Speaker 00

  The sum of 25 years.

• 40:22Speaker 05

  Yeah. And by the way, that conquistador, didn't he have to cut $400 a month out of his budget? What was his name? What was his name?

• 40:34Speaker 00

  And you know where we found it? Smoking that, smoking that devil's weed. Right?

• 40:37Speaker 05

  I was going to say, if he stopped smoking cigarettes, he could probably, you know, anyway.

• 40:42Speaker 00

  There's a piece of it.

• 40:44Speaker 05

  So I was just doing some like mental math, like how many people smoke and how many people are going to sue and how much is the tobacco industry going to owe them in each case? And I ended up with a number bigger than OG by a, by a lot. So I don't know. I might be crazy here, but I'm going to go with my, my answer and say 200 billion dollars.

• 41:05Speaker 00

  200. Wow. We go from 4.9 to 200 billion, AJ. So you've got a wide field goal there.

• 41:13Speaker 05

  Doug's reaction.

• 41:14Speaker 00

  Between, between the two.

• 41:17Speaker 06

  Do I have to go between the two?

• 41:18Speaker 00

  No, no, you can go wherever you want. I'm just saying.

• 41:21Speaker 06

  My first thought is that OG is blowing smoke and that he just made that up.

• 41:26Speaker 04

  Me? Who, me?

• 41:27Speaker 00

  No, no.

• 41:28Speaker 06

  I remember the movie, I remember seeing the movie. I forget the actor's name who like plays. So that's my only reference point. Um.

• 41:35Speaker 00

  The Thank You For Smoking movie?

• 41:37Speaker 06

  Thank you for smoking.

• 41:38Speaker 00

  Aaron Eckhart.

• 41:39Speaker 03

  For smoking.

• 41:40Speaker 00

  Aaron Eckhart, right?

• 41:41Speaker 03

  That's a great movie.

• 41:42Speaker 06

  That guy. Yeah.

• 41:44Speaker 00

  Yeah.

• 41:45Speaker 06

  Love, I love, yeah. I'm a big fan of any like small person versus big evil company, Aaron Brockovich, A Civil Action, any of those. 5 billion seems 1992, 98.

• 41:59Speaker 00

  98.

• 42:01Speaker 03

  Eight.

• 42:01Speaker 06

  My gut is to say around five. I think it's nine billion, but just to make things interesting, I'm going to say 3.7 billion.

• 42:12Speaker 00

  3.7. So she thinks it's above OG, but you're going below.

• 42:18Speaker 06

  Yeah.

• 42:19Speaker 00

  Gotcha. All right. Well, we got 3.7 for AJ, 200 for Jesse and 4.9 for OG. Who's closest? We're about to find out. We'll be right back. Well, you may know the chaos is the name of the game here in mom's basement. What with guests coming in and out, Cooper, the cat getting in the way, Doug being well, being Doug, the holidays make it even worse because it's all about food and big meals. And the problem is prepping for those takes forever. But what about those between meals, right? The meals between those huge, huge, huge bookends. Well, that's where factor comes in. Factor is made with high quality ingredients that you recognize and trust with over 175 banned ingredients.

• 43:02Speaker 00

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• 43:44Speaker 00

  For Cheryl and I, factor has been a great way for us to stay busy and focus on family life and beating mom at card games. I use factor and you should too. So let's eat real stackers. Head to factormeals.com/ sb50off. Use code sb50off. And you know what? You're going to get 50% off and one free breakfast item per box for one year while supplies last until December 31st, 2026. That is code sb50off at factormeals.com sb50off at factormeals.com. See website for more details. There is a financial conversation that's coming to millions of American families and

• 44:29Speaker 00

  there's a pretty good chance nobody wants to be the person who starts it. Inheritance. And here's why that matters. An estimated $124 trillion to heirs and charity is expected to be transferred by Americans over the next 20 years. It's an extraordinary amount of money, but Kiplinger's research found that 51% of adults and their parents, get this, never talk about money. And there's a pretty big disconnect. 47% of parents expect to leave a meaningful inheritance while only 24% of adult children expect to actually receive one. Nearly 30% of parents don't even have a will in place. Maybe it's time we talked.

• 45:12Speaker 00

  Kiplinger calls it the trillion dollar talk, a conversation about inheritance, estate planning, wills, and the questions families should be asking before those decisions become urgent, because knowing what your family wants and having a plan for it can be one of the most important financial conversations you will ever have. Ready to start yours? Visit kiplinger.com to learn more about the trillion dollar talk and what this historic wealth transfer could mean for your family.

• 45:42Speaker 00

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• 46:26Speaker 00

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• 47:10Speaker 00

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• 47:35Speaker 00

  All right, OG, you kicked this off with $4.9 billion. Now that you've heard Jesse and AJ, what are you thinking? Feeling good?

• 47:42Speaker 04

  I just want to clarify that was per state, right?

• 47:48Speaker 00

  That tells me how you feel. Jesse, you're way up there at 200 billion. AJ's down back down there with OG. You think you got it?

• 47:57Speaker 05

  I don't know. I don't know. If 10,000 people a year, you know, like that's what I was like 10,000 people a year need a settlement.

• 48:04Speaker 06

  But it's just a settlement. It's not.

• 48:06Speaker 05

  Yeah, I know, but.

• 48:07Speaker 06

  It's a made up number by the courts.

• 48:09Speaker 05

  I get it. I get it. I just think there's a lot of people who smoke and it doesn't take many five, it doesn't take a five or six figure settlement times that many people times 25 years. If it's under $100 billion, I'm going to be, I'm going to need to figure it out.

• 48:26Speaker 04

  Wow. Are you going to start smoking? Start smoking.

• 48:31Speaker 04

  Feel like it's not worth it.

• 48:32Speaker 05

  I like my answer.

• 48:33Speaker 00

  AJ, 3.7, how are you feeling?

• 48:35Speaker 06

  I'm not feeling great. I'm going to go back to nine if I can change my answer.

• 48:40Speaker 00

  You may not. Welcome to the stacking Benjamins trivia. Nobody ever feels great about their answer. All right.

• 48:47Speaker 06

  This is like the opposite of like the questions they ask you at Google. Yeah. When you get an interview at Google, it's like, how many paintballs can fit in a 747? And you're like, I don't know.

• 48:56Speaker 00

  I got no idea.

• 48:57Speaker 06

  At least use arithmetic.

• 48:59Speaker 00

  AJ, that's next week's, that's next week's question. Don't foreshadow.

• 49:02Speaker 06

  You'll have to have me back.

• 49:03Speaker 00

  Doug, who's, who's winning this thing?

• 49:05Speaker 03

  Well, hey there, stackers. I'm internationally recognized tobacco historian and guy who once tried to smoke a Slim Jim because somebody told me it was a cigar. Joe's mom's neighbor Doug. I'll tell you what, terrible cigar, pretty good snack, once you get a little char on it. Before the break, I told you about Rodrigo de Jerez, the sailor who reportedly brought smoking back to Spain after sailing with Christopher Columbus. Again, according to the legend, the Spanish Inquisition threw him in prison for seven years because they thought he was possessed by the devil. By 1998, the United States had decided the tobacco companies were the devil and decided that they should help cover the healthcare costs associated with their products.

• 49:47Speaker 03

  The resulting agreement was one of the largest legal settlements in American history. So how many billions of dollars did the four major tobacco companies agree to pay over the first 25 years? Well, the correct answer was $202.3 billion higher than AJ's guess, 201.1 billion higher than OG's guess, and just six billion higher than Jesse's guess, which means Jesse is today's winner because the tobacco companies agreed to pay a staggering $206 billion.

• 50:22Speaker 05

  No way.

• 50:23Speaker 03

  Per state, per year.

• 50:25Speaker 00

  Apparently that neighbor of yours, OG, wasn't bragging enough. Didn't brag nearly enough about all the work that they had done. Imagine the lawyer fee on that one, right? How much money they got? They settled one of the big oil settlements here at the courthouse in Texcana. And there are some very wealthy attorneys that live here as a result of that.

• 50:45Speaker 06

  This goes to show you how little faith I have in the legal system. That's why I went low because I was like, there's no way this actually helped people. I know it was a big victory, but there's no way actual people got help from that.

• 50:55Speaker 00

  No, but somebody took home 200 and something billion dollars, AJ.

• 50:58Speaker 04

  I have a fun story about this. Maybe I'll share later.

• 51:00Speaker 00

  All right. Let's help somebody put a few dollars in their wallet. I want to play another game here in the second half, which is who gets the next dollar? We're going to go through some financial triage, which is a whole rubric in AJ's book. Most people aren't sitting around with unlimited money where wondering where to put it. They have very limited funds and they got to know what to do with it next. So here's the deal. Your jobs are going to be to tell me where the next $200 belongs. So our first victim here is going to be named Chris. Chris makes $92,000 a year. He has emergency savings of $1,500. He has $5,000 a credit card debt at 22%. His 401k contribution is 3%.

• 51:46Speaker 00

  Now his employer matches 100% up to 5%.

• 51:50Speaker 00

  He also has a car loan at 6%. He doesn't have a Roth IRA and he has a young child with no college savings and he wants to help make sure his kid goes to college. Jesse, we'll start with you. You gotta choose one. You can't split it for the win. I'm gonna put part here, part there. You gotta go with one. Where are you starting first?

• 52:12Speaker 05

  Does he live at a state with a lottery? No. $1,500 in the emergency fund, I think, is enough to like be that desperation emergency fund. It's not fully fledged, but it's the desperation emergency fund, which means I would apply this extra money he has to the credit card debt. That would be next on my priority list.

• 52:31Speaker 00

  22%. Is that why the 22%?

• 52:34Speaker 05

  Yeah, yeah, yeah. Really high interest rate.

• 52:36Speaker 00

  Yep. OG, thumb up, thumb down.

• 52:39Speaker 04

  Yeah, 100% to the credit card. I'm not in love with 1,500 bucks in cash, but it's better than zero. Already saving some money in a 401k, so let's, let's get rid of the credit card bills. Yep.

• 52:48Speaker 00

  AJ, I'm not gonna ask you for a me too. I'm wondering if in real life, you split that between the credit card debt and getting up to that whole 5% match?

• 52:58Speaker 06

  How old did you say this person was?

• 53:00Speaker 00

  He is, I got it, 39 years old.

• 53:04Speaker 06

  39? Ooh, yeah. I mean, at 39, I think we should be, it's time to save for retirement. So I would say, yeah, split the difference if you're allowing me to bend the rules.

• 53:14Speaker 00

  What is the opportunity cost here? AJ, if you can kind of break it down a little bit of choosing the wrong one?

• 53:20Speaker 06

  Choosing the wrong next best place to put your dollar. To me, it just makes the problem worse. And if you already have the bad habit, or you are, as we just talked about, if you already have the extra 400 that you're spending over what you're making, you're just kind of digging yourself deeper. Whereas if you put the money in the 401k, the reason why I love 401ks so much is that it's protected from you, right? It's protected from bankruptcy. It's protected from taxes on any investment gains that you make while it's sitting in there. But most of all, it's just protected from you. And the problem with emergency funds, you know, all of us, we're good savers. We put money in there. And then when something happens, what do we do? We go raid the emergency fund.

• 54:01Speaker 06

  It is much more difficult to raid your 401k by design, which a lot of the financial media has glommed onto as like a really bad thing. Like, you can't access it. It's like, no, you guys, that's the point, right? We gotta save for the long term. So let's put some, let's put a fence around it. So yeah, the opportunity cost can be very expensive. And, you know, I don't, I always try not to make people feel bad if they're behind. But, you know, 39, probably need to start increasing those contributions to retirement. We've got a few decades left. We don't have unlimited time. If you were 22, I would've said, yeah, whatever. You got time. Don't worry about it.

• 54:36Speaker 00

  Doug?

• 54:38Speaker 00

  Oh, I thought Doug raised his hand.

• 54:40Speaker 06

  Don't call on me.

• 54:42Speaker 00

  Doug's like, whoa, wait. Yeah, well, then I'm going to Jesse because we do this, for those of you that don't know, we do this live on YouTube Mondays. It's always fun on Monday to pretend it's Friday, by the way. Always a great time. So come hang out with us on Monday afternoons, 3:30 Eastern time-ish, maybe 3:45. But one of our stackers hanging out with us said, would it be better to just take out a loan on a 401k rather than stopping contributions when you get in trouble? What do you think about that, Jess?

• 55:10Speaker 05

  I don't think it would be better because taking principal out, right? We all make this probabilistic bet as investors that by having money invested, it will grow over time. And by having money not invested, that money that's not invested won't grow. And when you take a loan on your 401k, granted, you're taking a loan from yourself and you do only owe it back to yourself. And so you say, well, I'd rather take a loan from myself than take a loan from the bank. But you're removing money from the account that's no longer exposed to the investment markets for whatever duration of time that is. And yeah, I would rather just keep all the money in and dial down your future contributions. And I think mathematically speaking, you're probably gonna end up in a better place for that.

• 55:52Speaker 00

  Let's change the rules here a little bit. OG, how about this? Chris's car right now needs $1,200 in repairs and he's got to get it to work. He could pay cash, but that would nearly wipe out that emergency savings, or he could put it on the credit card. What would you do there?

• 56:09Speaker 04

  Cash. Why would you voluntarily pay credit card interest when you have the money? Like, that's the whole purpose of having money is to not have to do that. What you're doing is you're saying, I might have a future problem that would cause me to go to need this money, but you have a current problem that you need the money for. So why, maybe you do end up with a future problem that you also have to go into debt for, and that is what it is. But why would you voluntarily do that on the first problem? That doesn't make any sense to me.

• 56:44Speaker 00

  Let's say that AJ, he goes to work and he gets a raise. He has an extra $300 on top of this. So now he's funneling money toward that credit card debt. Does he put the next $300 toward the credit card debt? Or does he now start to go to two different places?

• 57:01Speaker 06

  I love using positivity for positivity. So I would say two different places. Split the difference between the credit card debt. Well, nah, let's wipe out the debt. I'm gonna go back. I don't like credit card debt. Yeah, let's get rid of the debt. Let's wipe the slate clean.

• 57:16Speaker 00

  That was like a whole ride we just took right there. Doug's on a roller coaster. Yeah, that's good, though. I like that. Jesse, do you agree? Let's wipe out the credit card debt now that he's got 500 instead of 200?

• 57:26Speaker 05

  Yeah, I think so. I think for most people, it's just easier to conceptualize, like, it's the number one thing, and I'm gonna attack the number one thing until it's gone. I just think it's probably actually also probably is financially optimal, too. But from a behavioral, I think it's easier for people to grasp. Also, not to, I hate to do this, but Doug, does your shirt say Frisky on it?

• 57:48Speaker 00

  Oh, sure does, baby.

• 57:49Speaker 05

  Frisky Apple Farm?

• 57:50Speaker 00

  Yeah.

• 57:51Speaker 05

  Is that how you pronounce it?

• 57:52Speaker 00

  Yeah, it is, actually.

• 57:53Speaker 05

  How about that? Shout out. Frisky apples.

• 57:55Speaker 00

  Hey, do you guys mind if we do a podcast? Would that be great?

• 58:00Speaker 00

  AJ, welcome to Stacking Benjamins right here.

• 58:03Speaker 06

  I'm sorry. I was on a call earlier and someone was talking about their AI agent, Hermes. You familiar with this? And they pronounced it Hermes.

• 58:13Speaker 06

  Lost my mind.

• 58:14Speaker 04

  You're like, slow down.

• 58:15Speaker 06

  I felt bad because I don't like to make fun of people, but I just like, I was like, you guys, I think it's Hermes, not Hermes.

• 58:22Speaker 00

  That's a, that is a costly, very costly AI agent right there.

• 58:26Speaker 04

  Basically, it's the same AI agent as any other leather bag, but it's 20 times as expensive.

• 58:32Speaker 06

  Exactly. Yes. And you can't get it. You have to beg them.

• 58:36Speaker 04

  First buy $50,000 worth of stuff from us, and then you can buy this other $20,000 thing from us.

• 58:40Speaker 06

  Exactly. Yes. Run up a $200,000 or token bill, and then you can use our agent.

• 58:46Speaker 00

  OG, when it comes to this idea of not saving enough for retirement, right? Not even getting all the way up to the match. But much sooner than this, he has a child that he wants to help with college. How do you rectify the college shortfall versus the retirement shortfall? Where do you go first there?

• 59:05Speaker 04

  You can't finance retirement. You're not obligated to go to college. You're not obligated to go to an expensive college. Retirement doesn't have scholarships based on your, you know, interests or abilities. So the only answer is you've got to take care of yourself first. And that's counterintuitive to parents because, you know, we want our kids to have a better life than we have. But it's actually a big disservice to them to, and we're seeing this a little bit more frequently now with this, you know, larger than normal kind of sandwiching of boomers where they've got grandma and grandpa, or grandma or grandpa still hanging on because, you know, healthcare is better than it was

• 59:46Speaker 04

  100 years ago. And then they've got their own kids that are having struggles on growing a family and, you know, adapting to life and all that other sort of stuff. And it's like, you know, getting pulled in a couple of different directions. The worst thing that you can do for your kids is be a burden to them in the future, especially financially, right at the time where they need all of their financial resources for their financial stuff, right? When they have their move across the country, or they have to save for their kid's college, or, you know, one person's not going to go to work anymore because it makes more sense to stay at home than to pay, you know, daycare bills or something like that. And then you're gonna say, oh, by the way, I'm out of money because I paid

• 1:00:26Speaker 04

  for your, you know, college. So, no, 100%, you get your retirement squared away. And then, and then we just teach junior how to be really good at chemistry or something, get a scholarship.

• 1:00:37Speaker 00

  I wanted to talk last about the, very much AJ, the topic of your book, which is people have variable income. We have stackers that earn commissions. We have stackers who are in the creative community who get paid big sums of money. Let's say that, you know, they're two thirds of the way through the year. They're expecting to make $120,000. They might be at $35,000 right now, right? How do you deal with the lumpiness of commissions or all this money that comes in in uncertain timeframes?

• 1:01:07Speaker 06

  Yeah, you gotta get ahead of it, especially if you've chosen this profession. You work in sales and, you know, you got a decent salary, but, you know, you're, you're expecting that higher number, that commission number. To me, it's like, it takes a few years. So it might take a year or two of kind of that scrimping in savings to build up that cushion. So you have your actual salary in savings. You have what you think that you should be worth and that you are able to earn, but that takes time. And unfortunately, people don't often have that time or that patience to get ahead. So what I actually tell people to do is never turn off your savings, even if you're in those kind of like, you know, feast and famine, when you're in that famine dip, still always be saving, always be contributing

• 1:01:50Speaker 06

  at least 1% to your 401k. Or if you're self-employed, to your solo 401k, or your IRA, or just a plain old savings account called savings. The other part, this is my area of expertise, is taxes. We cannot forget tax bills. And one of the greatest destroyers of wealth and sleep are surprise tax bills when you have lumpy income. So I hate to say this, folks, but if you are in a high income tax state like New York, we should be saving 40 to 50% of every dollar that we earn for taxes. Yeah, it hurts. It's horrible. And I'm talking about folks who are 1099, who aren't W2. If you're W2, you can do a little bit less. And then if you're not in a high tax state, shave off 8 to 10%. But that's what is going to be the difference between you having a

• 1:02:34Speaker 06

  successful, you know, cyclical, lots of windfalls, lots of commissions, creative life, or the one where you buy something, you get a windfall and you spend it, and you just are constantly in this state of wealth and poverty. And that hamster wheel is pretty exhausting.

• 1:02:49Speaker 04

  I was just gonna say, as somebody who wrote a check to the IRS today, I can, I can appreciate the, the pain and the, and the sourness of the day. Like, there are not enough smores pop tarts in my life to assuage the pain of

• 1:03:02Speaker 06

  To heal the wound.

• 1:03:03Speaker 04

  Of the check writing.

• 1:03:05Speaker 06

  So much of this is, is not like the, to me, true financial independence is not having to worry about money. And for most of us, that doesn't mean having unlimited money. For most of us, that just means having our savings on autopilot, having enough in the bank that we can sleep at night. And, you know, when a check comes in, knowing where it goes and knowing that, hey, I've got cash saved for taxes. And yeah, writing that check totally sucks. It never gets easier. But if you do it four times a year, it's a little bit easier. It's a little less painful.

• 1:03:33Speaker 00

  But I like that AJ a lot, that you've already thought through where this money's going. The money already has a plan ahead of time, so that you're not living that boom bust lifestyle we talked about. You know, oh, I got a big check. Let's go buy a big screen TV that I wasn't even planning on buying, you know, two, three weeks before.

• 1:03:47Speaker 06

  Yeah. And that's also kind of my, my advice is always like, if, if you were planning to buy the big screen TV, if it was in your life plan, by all means, buy the big screen TV. I'm not here to tell you not to do things that make you happy. What I have found in my work is that people are like, oh, I got a check. I gotta buy a vacation house.

• 1:04:04Speaker 00

  Forget the 80 inch TV. I gotta buy a vacation house.

• 1:04:08Speaker 06

  I'm like, when, where are we buying a vacation house in Rochester? I've, I've known you for 10 years. I've never heard you mention Rochester. So I am always like,

• 1:04:14Speaker 04

  It's a trash hole, isn't it? Who wants to buy a vacation house in Rochester?

• 1:04:19Speaker 06

  It was a small, it was a small windfall.

• 1:04:21Speaker 04

  It's great up here. That's right. Small windfall. Gets you a 4,000 square foot house.

• 1:04:26Speaker 00

  Jesse, you made this change yourself, right? Going from a consistent income, somebody else writing a check, to being a partner. How did you plan this out ahead of time?

• 1:04:37Speaker 05

  Yeah. Um, well, it's, it's funny, and I don't mind sharing a few details. I guess part of it is, is saving up, you know, tried to save up a bunch of money, tried to put together a plan for how long it would take me to get my income back to where it was before, and to kind of get the household back on its feet, so to speak. And, and part of it too, and maybe this comes down to either negotiating skills, or having very generous partners. But part of the deal was like, I was open and honest with my current colleagues. And I was like, hey, guys, I'll go open kimono and share my finances with you and show you how I'm kind of taking a step back in the short run to take a big step forward in the long run with all of you. And I'd appreciate, basically, I said, like, it would be helpful if somehow, some way I were made whole for this. And long story short, is

• 1:05:22Speaker 05

  we, we negotiated something that makes me feel a little bit better about my cash flow, at least in the interim. And, and so when you're changing jobs, or if you're going through something like that, just a good lesson that I've had over 15 years in the working world is to not be afraid of negotiation, and to not be afraid, just to throw the question out there and ask for something that benefits you. Because if you bring a lot of value to your employer, there's a good chance that they'll be happy to meet you in the middle.

• 1:05:47Speaker 00

  A good friend told me once, a good mentor told me once, that you're already at no, if you don't ask, you're already at no. So why not just ask? Maybe there's a yes. If they say no, you're at the same, you didn't lose anything by, by just asking. Well, I think that is a great place to leave this discussion. Thank you so much, everybody, because with these big inflation numbers, I think they worry people a lot. And if you begin with what is enoughness, to use AJ's term, and then think through your financial triage plan, I think you've got a good start on navigating this and whatever other hurdles life sends your way. Let's find out what's going on this. Oh, my goodness, we are in November. AJ's book comes out next week. AJ, we're going to go to you last to talk a little bit about the book. Oh gee, what's going on with you this weekend, man?

• 1:06:32Speaker 04

  I mean, pre-ordering dozens and dozens of copies of AJ's book, obviously.

• 1:06:36Speaker 00

  Duh.

• 1:06:37Speaker 04

  Eagerly waiting there, the arrival. Uh, this weekend, first weekend of November, sad to say, but my in-laws have left, you know, after just a short three week visit. So it really, really breaks my heart that they had to go.

• 1:06:51Speaker 03

  It just feels empty.

• 1:06:52Speaker 04

  Earlier this week. No, actually, this weekend, shout out to my wife's grandpa.

• 1:06:58Speaker 04

  Uh, they're having his birthday party this, this weekend. I cannot attend because I have after school activities on Saturday, but they're having his 100th birthday party.

• 1:07:05Speaker 00

  Wow.

• 1:07:06Speaker 04

  Shout out Grandpa K up in Michigan, living the life we all hope to be at 100. Still kicking it, still witty. Doesn't drive anymore. That's probably for the best, but otherwise doing really well, you know, healthy wise and, uh, you know, still sharp as a tack. So that's my goal, be 100 with a bunch of friends and have a big party.

• 1:07:27Speaker 00

  That's fabulous.

• 1:07:29Speaker 04

  Joe and Doug, you guys probably not going to attend my party at 100, but.

• 1:07:33Speaker 00

  Easy, you know, sitting right here. Jesse.

• 1:07:36Speaker 04

  Y'all are invited.

• 1:07:38Speaker 00

  Thank you very much. Jesse Cramer, what's going on at Personal Finance for Long-Term Investors, man?

• 1:07:44Speaker 05

  Just earlier this week, we released an episode about the history of retirement, which I was, I mean, I didn't know a lot about it. So kind of went down the rabbit hole of how did we get here to today's, you know, modern concept of what retirement looks like as opposed to maybe what it looked like 50, 100, 150 years ago. And then next week, publishing an episode just about these like tensions and conflating, conflicting goals in retirement. You know, one person wants to maximize their spending, another person wants to minimize the risk of ruin, another person just wants to give a lot of money away, and how these competing goals can lead us to, to different decisions.

• 1:08:19Speaker 00

  That's awesome. Man, that sounds like a good time listen for my favorite finance nerd. And that's a personal finance for long-term investors. AJ, thanks so much for joining us. It was great to get to know you. I was so excited to see that you had this new book coming out. And then I started digging into who you were and who you work with and all those records behind you. It's like somebody who, very much a kindred spirit. Tell us about the book, because Tuesday, Tuesday is the day. It's out on November 10.

• 1:08:50Speaker 06

  It's the day. Uh, I'm going to read the subtitle because I think it kind of sums it up. It's called Creative Money: New Financial Rules for Artists, Innovators, and Misfits. So yes, it is focused on creatives, but it's really for anyone who feels like the financial system doesn't serve them well. Uh, so people who feel left out, people who maybe think they're not great with money and have just kind of avoided it. I talk a lot about avoidance. We're all guilty of it. Uh, I have an IRS letter sitting on my desk that I have not dealt with, so much so that I started getting letters from people who could help me out with my IRS debt. And it was just quite literally avoidance of not paying it. I was fully capable of paying. And so it's me talking in my voice and basically saying like, hey, I know this stuff is really hard and you've been avoiding it, but like, I'm probably the only person

• 1:09:34Speaker 06

  who you're going to listen to because I used to be you. I used, I was an English major. I didn't even know what a 401k was 10 years ago. And then I went way too extreme because that's just my unfortunate personality. And I went back to school. I became a CFP. I started a wealth management firm. I became, and you know, I went way too deep into it. And hopefully that can be helpful to lots of people who are not going to do that, who are not going to go become CFPs and start wealth management firms. But I've been working on it for, you know, the ideas came from working with clients, what I learned about how people actually take advice, because I think as financial advisors, we have all these great ideas about, you know, how to retire and how to make money in the stock market and insurance. And at the end of the day, what do people actually do? So that's

• 1:10:16Speaker 06

  kind of what I internalized over five years of working with, with clients. And then I sat down and wrote a lot of it down. And now there's a book, which is crazy.

• 1:10:25Speaker 00

  It's so exciting. And just reading through it the last several days, what a fun read. And you're right, creative people very much, and not just creative people, so many people just avoid it. And they think if I don't look at it, it's going to get better, which isn't true. It's not true.

• 1:10:40Speaker 06

  Well, sometimes it's true. If you put money in the stock market, you don't look at it. It might get better.

• 1:10:44Speaker 00

  Yeah. I meant more of that letter you were talking about, or my credit card debt, or not building an emergency fund, whatever it might be. Yeah.

• 1:10:51Speaker 06

  My husband goes, are we okay? I'm like, yeah, sorry. I messed up. I didn't say

• 1:10:57Speaker 00

  And again, the book is Creative Money: New Financial Rules for Artists, Innovators, and Misfits. And it's out on Tuesday. You can preorder it, right? Today?

• 1:11:04Speaker 06

  You can. You can preorder it whenever you like, wherever books are sold.

• 1:11:07Speaker 00

  All right, stackers. That's going to do it for today. Thanks, everybody, for hanging out with us online. If you want to hang out with us and watch the show being made and participate, we've had a lot of participation today from our stackers online. Join us on Monday afternoons, nearly every Monday at 3:30 Eastern time. You can find us making the Stacking Benjamins Friday show. All right, Doug's gonna end this one. Doug, what should we have learned on today's show?

• 1:11:32Speaker 03

  Well, Joe first, take some advice from the woman who's apparently allowed to just make up words like enoughness, AJ Ayers.

• 1:11:42Speaker 06

  Almost got it.

• 1:11:43Speaker 03

  Making up her last name, AJ Ayers. She says, be prepared to make some big life decisions like moving or changing jobs. It may seem unfair, but it's more fairliness than being 100,000 in debt. Second, see, I just made up a word right there. Second, remember the thing Jesse said about the, the stuff. Even if you're not a line item budgeter, you'll know inflation is hitting you if your rent check bounces. And that's your sign. It's time to start some basic tracking. But the big lesson?

• 1:12:18Speaker 03

  Always consider the long-term costs of your decisions, because something that seems like a great idea today could come back to haunt you 500 years from now, which is why I'm starting to get nervous about that lifetime warranty I offered on the used mattress I sold out of mom's basement.

• 1:12:36Speaker 03

  Thanks to AJ Ayers for joining us today. Head to her website, ajers, yeah, ajers.com, where you can preorder her new book, which includes an entire chapter about me. It's called Creative Money: New Financial Rules for Artists, Innovators, Misfits, and哪儿 do wells. I'm one of those. We'll also include links in our show notes at stackingbenjamins.com. Thanks to Jesse Kramer for joining us today. Are you a short-term investor? Are you into macro corporate finance? Well, then don't bother listening to this guy's podcast because his podcast is personal finance for long-term investors. And thanks finally to OG for joining

• 1:13:19Speaker 03

  us today. Looking for good financial planning help? Head to stackingbenjamins.com/OG for his calendar. And if you notice, I never make fun of his credit because I'm afraid of it. This show is the property of SP Podcast LLC, copyright 2026, and is created by Joe Saul Sehi. You'll find out about our awesome team at stackingbenjamins.com, along with the show notes and how you can find us on YouTube and all the usual social media spots. Come say hello. And oh yeah, before I go, not only should you not take advice from these nerds, don't take advice from people you don't know. This show is for entertainment purposes only. Before making any financial decisions, speak with a real financial advisor.

• 1:14:03Speaker 03

  I'm Joe's mom's neighbor Doug, and we'll see you next time back here at the Stacking Benjamin Show.

• 1:14:19Speaker 03

  Maybe it's time we talked. Kiplinger calls it the trillion dollar talk, a conversation about inheritance, estate planning, wills, and the questions families should be asking before those decisions become urgent. Because knowing what your family wants and having a plan for it can be one of the most important financial conversations you will ever have. Ready to start yours? Visit kiplinger.com to learn more about the trillion dollar talk and what this historic wealth transfer could mean for your family.