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7 Cashflow Milestones Worth Celebrating (2026 Edition)
00:28:44
Money Guy Show | Cashflow Milestones
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- [00:00]
A
One thing about financial mutants, we love tracking our progress. So today we're going to give you seven cash flow milestones to aim for and also celebrate.
- [00:10]
B
Brent, I am so excited because when it comes to net worth milestones and 401k milestones, it can take a long time to progress from one of the milestones to the next. But today's milestones can happen that much more quickly because you actually have control over these milestones.
- [00:28]
A
So I'm Brian, he's Beau, and we're financial advisors here to help you celebrate your cash flow milestones on the way to financial independence. And with that, let's dive right in.
- [00:45]
B
Yeah, Brian, the cash flow milestones that we're covering today are really more behavioral. They happen because of what you're actually doing with your money day in and day out, regardless of, of what else is going on, regardless of market factors. And some of them may seem very simple and easy and some of them may be a little bit harder and maybe might not even be pertinent to your situation. But I think that when you track and hit these milestones, it's going to give you that little bit of staying power in your financial journey.
- [01:16]
A
But let's be clear, even the small ones that might seem insignificant are going to have huge impacts on your future success. So don't overlook any of these. And, and we have built them in an order so that they're building upon themselves.
- [01:29]
B
That's right. So let's jump in with the very first one and this one. It seems so silly and yet most Americans have a hard time getting here. It's just being cash flow positive. This is the place where you are at a net zero from month to month. You're not living beyond your means.
- [01:45]
A
Yeah. This is one we tell you the, the first ingredient of the three main ingredients to wealth. That's discipline. You having that discipline to live on less than you make creates margin or the money that actually gets invested and you give that enough time. Magical stuff happens.
- [02:02]
B
Yeah. When you can get this net positive position, it actually flips the financial script into wealth building. Because at this point, when you are living on less than you make and when you are deferring some of your cash flow into the future, now you're not moving backwards anymore. You are actively moving forward. And if you're actively moving forward in your financial journey, that's a win.
- [02:26]
A
Now look, I understand that right now we're in this state where there's crazy geopolitical stuff going on, these even weird economic stuff with like cost of Education, cost of housing. And look, you don't have a lot of control over that stuff, but you do have control on you. Trying to figure out how can you be disciplined and live on less than you make.
- [02:44]
B
So what do we do? What are the steps? How do you get to zero? Well, it could be a lot of different things. It could be making the big changes. You might need to do something drastic. If you want something you've never had, you might have to be willing to do something you've never done. So it could be moving, selling your home, selling your automobile, changing jobs. It may require some drastic change to significantly alter your current financial state.
- [03:12]
A
And look, you might be. We give a lot of grace about credit cards, but you might realize you're not a credit card type person. You know, we say credit card uses ao, okay, but credit card debt, no way. So if you're actually like half of Americans and have credit card debt, then cut up those credit cards, make it where you can't use them.
- [03:31]
B
Or if you find yourself in a position where the job or career you're in is just not providing what you need it to be able to provide for you to live the life that you want to live, maybe it's time to look at changing careers. Or if you're in between jobs and you're just waiting for that absolute perfect job to show up, maybe you need to widen your net a little bit. Maybe now it might make sense to just get some jobs so that you can begin moving forward.
- [03:57]
A
And community resources. Look, if you live in an area with public transportation, maybe that's gonna be a great way. Instead of owning a car, if you've got a. I know this sounds ridiculous, but even libraries, instead of you using audible or buying the next book, these little decisions can have big results in the long term.
- [04:16]
B
And what these little decisions do is they allow you to move to our second milestone. So milestone number one was just being net positive. Milestone number two is sort of this wonderful thing where you get to the point where you are saving $100 a month. I know it sounds small, but if you've never been there before, it is a significant milestone.
- [04:37]
A
Well, this is the magical one for me. If you remember, I was sitting in economics class in high school and Mr. Morrow said, look, every one of you, if you just save $100 a month, you'll be a millionaire by the time you retire. And I was broke as a joke, working at local fast food joint. But I even thought at that moment in time, I can save a hundred dollars a month. And you know what, he was spot on. So you need to get to this step.
- [05:01]
B
So how do you do that? How do you do that? How do you save a hundred dollars? Well, it might be just lowering your fixed expenses. Do you have things like an ungrateful service provider, whether that be your cell phone provider or your insurance company or your utilities, or maybe you have subscriptions you're not using that you don't need anymore. If you can cut those down, it will increase the margin available where you can actually put those dollars to work.
- [05:24]
A
Well, I mean, we talk about the two levers. Lowering expenses, increasing income, and there's ways you can do this. And by the way, you got to eliminate the high interest debt. Look, these banks are making an absolute fortune off of you. If you're paying 20 plus percent, you've got to get the high interest debt under control.
- [05:43]
B
And all of these things, what they involve is being proactive. But you're likely if you. Again, if you want to be somewhere you've never been, you have to do something you've never done. You may need to adjust your behaviors. You may need to think about, okay, instead of eating out once a week, maybe I'm going to eat out every other week. Or maybe instead of shopping at the expensive, nice grocery store, I'm going to start buying in bulk. Those sorts of behavioral changes can make a meaningful difference in your financial life.
- [06:10]
A
And then let's. There's a lot of power in just tracking your expenses. If you want to talk about behavior, if you can see it, you can count. Now kind of try to internalize and, and know if this gives you clarity or confidence in what you actually can control.
- [06:23]
B
Yeah. Once you can see where your finances are, once you have a clear picture, it makes it very clear what you ought to be doing with your dollars and what you ought to not be doing with your dollars.
- [06:34]
A
There is definitely some clarity and confidence that comes from tracking. And bo what I have found in my own personal life, a really effective tool is Monarch.
- [06:42]
B
Yeah, Monarch is a personal finance app that tracks everything. It tracks accounts, investments, savings goals and spending. So you can see right there exactly where your money's going.
- [06:54]
A
And right now you can get your first year of Monarch for half off just $50 with promo code moneyguy.
- [07:00]
B
Now, Brian, we were talking about it because you said, hey, I actually use Monarch. It's something I say. And you were saying, one of the best things I like about it is that obviously we can, you know, put the, put the, the expenses in and we can categorize them. But you said the visual element was probably one of the most interesting things
- [07:15]
A
that you saw that Sankey diagram that they offer where you actually see the in, but you actually see how all the it gets spin out by the different categories and it's actually represented by the, the size of the expenses. It's really powerful because, you know, I like to think I'm an analytical person, but definitely seeing the visual cues has an impact as well.
- [07:34]
B
And right now we have a special discount for financial mutants. Use the code moneyguy@monarch.com to get your first year half off at just $50.
- [07:44]
A
That's 50% off your first first year at monarch.com with code moneyguy.
- [07:49]
B
And once you do this, once you're tracking it, once you see this, you can start saving a hundred dollars a month. And the idea becomes, okay, well why does this matter? Why is this significant? What can a hundred dollars actually do for me? But do you recognize if you could just save $100 a month over 10 years, you will have saved $12,000. But if you can put that money to work and let's say that you earn on average an 8% rate of return, that $12,000 could turn into over $18,000. Fast forward. If you can just do 30 years of saving $100 a month, just $100 a month, you would save $36,000, but you could have $150,000. And if you extrapolate this behavior over an entire working life cycle, 40 years of just saving 100 bucks a month, you will have saved $48,000, but you would have $350,000 working for that's 86% of the amount that you were able to build was your dollars earning dollars, not money that you actually had to put away.
- [08:52]
A
That's the key part that I want everybody because look, a lot of you are going to watch this content, get excited and start saving and investing. But if you quit in the first 10 years, you've lost the plot. Because look, the magical thing happens really between years, 20, 30 and even 40 years in the future is because the growing upon itself compounding growth, going from 35% appreciation all the way up to 86%. Stick with it early, often, stay consistent. You'll be rewarded.
- [09:22]
B
Now if you've been listening to our content for any amount of time, you know that we love the financial order of operandi. All the thing for me, one of the things we love about the financial order of operations is when you start doing this, when you start saving that hundred dollars A month. What are the places you're likely going to save? It is inside of your tax free account. Inside of an account like a Roth ira. Well, that actually is where our third milestone lives. Because when you're at the point where you are able to max out your Roth IRA at the annual contribution limit, that is a milestone worth celebrating.
- [09:52]
A
Yeah. And this one, by the way, in 2026, the maximum is 70$500 annually. If you're, you know, just normal contributing Roth IRA age, that's $625 a month. And here's what we like about this. Now what I like is that you have until all the way to tax day of 2027, that's April of 2027. To fully fund that. You got to get in there and take advantage of that.
- [10:15]
B
And why do we get so excited about Roth? What makes Roth so great? Well, one, you get to pick the provider. So you can pick a provider that has really low expenses, really low fees. The fidelities, the vanguards, the Charles Schwab's. When you put the money into the Roth IRA and it grows, it grows completely tax free. You don't have to pay any money as it grows. But then assuming that you pull it out at a certain age after 59 and a half, those distributions are completely tax free. So you pay tax when you earn the money and you never pay tax again. Again, because you get to pick the provider. The fidelities, the vanguards, the Charles Schwab's. You can choose the entire universe of investments. And Brian already mentioned this, you have flexibility on your contributions even if you can't fund that max out the full thing between January and December. You have all the way up until next year's tax filing deadline to get those dollars in your Roth ira.
- [11:11]
A
And here's another side benefit. Look, we know a lot of you want you like a system. And if you get actually load up your Roth ira, you get to move on to step six. You've officially graduated from step four five of the financial order of operations. That's something to be celebrated.
- [11:26]
B
That's a milestone in and of itself. Every time you move to another step of the financial order of operations, you should pause and think to yourself, yes, I am doing what I'm supposed to be doing. I'm moving in the right direction. And as you're doing that, as you continue to progress, you're likely going to end up at milestone number four. And this one, Brian, is so funny because you and I have talked about this one a ton. I don't know why this one felt so significant, but I know for both of us when we did this, when we were saving $1,000 per month, we were saving in the one comma club per month. It was a substantial achievement.
- [12:00]
A
Well, it does feel different, I think, because look, we know that the typical American struggles with basic discipline. There's even that stat out there that close to 60% of Americans can't even come up with a thousand dollars. So for you to actually be able to save and do this monthly, it felt huge. For me, it was such a big thing that my wife and I took a milestone moment to actually go out. It's not even there anymore, but Dante's down the hatch, which was in Atlanta, in Atlanta. It was a fondue place. It had a live alligators down there. It looked like a ship in the indoor, outdoor type experience. It was great. And I still have great memories of that because it was something to be celebrated. That's why I love that we create these milestones, is because as you're going through each of these big steps, make sure you are taking moments to build those blossoming memories because it just will feel that much sweeter to you in the long term.
- [12:51]
B
And look, depending on if you have like an employer match, Once you hit $1,000 a month in saving, there's a good chance that not only are you maxing out your Roth IRA, but maybe you're also maxing out your HSA. I mean, if you think about it, 625amonth will max out your Roth. And then if you're on the individual HSA contribution side, $366 a month will do that. That's $991 a month. And then you've maxed out all of your tax free accounts again. That is completing step five of the financial order of operations. A very significant milestone.
- [13:25]
A
Well, and a lot of you, you know, we, we talk about where's the typical American. And the median household income in the United States right now is just shy of $84,000. If you look at this thousand dollars a month, that puts you at a savings rate at right, 14.3%. Well, a lot of you are like, wait a minute, that's not the 25% that you say. Well, you're right, there's still close to, there's a little over 10% there. But more than likely your employer is putting in around 5%. You're right there at the 20% mark. A lot of magical things are happening when you get beyond 20% savings and investment rates.
- [14:00]
B
And again, why does this feel significant? I mean, obviously it feels cool today to be able to say, hey, I'm saving over $1,000 a month. But in terms of the impact, we just showed you what $100 a month can do, well, $1,000 a month can 10x that. If you take the same illustration, you say, I'm just going to save $1,000 a month for 10 years. That means that you will have saved $120,000. But that pot of money could be worth 184,000 if you can earn 8% on average. Fast forward to a full career of doing this. 40 years of saving $1,000 a month, where you will have only saved about $480,000. Over that 40 year period, the pot of assets that you save could have grown to over three and a half million. We are talking about multimillionaire status. Once you hit this milestone, it gets really, really exciting when you see the future of your wealth building journey.
- [14:58]
A
Yeah, I mean, that's why if you want to know how to really crank up the power of compounding growth, hit a Multiple starts at $100 a month. But it is definitely a celebration moment when you hit $1,000 a month.
- [15:10]
B
Now, most folks, Brian, we talk about saving and these savings milestones, but a lot of people are starting out. And even just getting to zero was hard or getting to net positive was hard. And a lot of people have debt, whether it be student loan debt that they have or auto debt, or they have mortgage debt, or they're satisfying some high interest debt. Another milestone we think that is worth celebrating and worth paying attention to is there will become a moment in your financial life where how much you're saving on a monthly basis, how much you're saving for your future self is greater than what your monthly debt payments are. Meaning that you are now able to put more aside for your future self than expenses that you're paying for for your past.
- [15:53]
A
Well, and let's put some numbers to this so you actually have some context. We went and pulled the actual data. If you look at what the typical American has going on, they actually have monthly payments of $1597, just shy of $1600 a month of debt service that they're having to pay.
- [16:12]
B
And that's mortgages, auto loans, personal loans, student loans, all those wrapped in.
- [16:15]
A
So if you reach the milestone that your savings and investment rate is exceeding this, that's a big sum that's actually going towards your army of dollars.
- [16:24]
B
And this is where these milestones are very subjective. You know, some of you, you might not have any debt, so you may hit this milestone very, very early. But others of you, if you do have the student loan and the mortgage and the auto loan, it may take you a long time to get here and that's okay. But once you get here, it is worth celebrating. It's worth acknowledging, okay, I've handled the past, I've taken care of my past self, now I'm going to start taking care of my future self. And what's amazing is when you do that, you can begin to build up momentum and you begin to build up speed on your wealth building journey. And before you know it, as you're doing that and as some of those debt payments fall off, as you no longer have the auto payment or no longer have the student loan payment, there's a really good chance that if you're following the financial order of operations, the next place you'll find yourself is in step six where you get to actually max out your employer sponsored retirement plan.
- [17:19]
A
This one, I wish I had the Dante's moment with $1,000 a month, but it was definitely one of. When I started consistently maxing out the 401k, it felt like an achievement because by the way, this is not a small number. Let's be, let's be clear and honest about this is that the standard contribution in 2026 is 24,500. So to max this out it means you have to have a savings rate of greater than $2,000 a month.
- [17:47]
B
And this one, you can't go back in time like you do with ira. You actually have to get this funded from January to December.
- [17:53]
A
Yeah, we put up on the slide. By the way, for those who are listening, I'll go and put this out there since you might not be watching this content. If you want to do a catch up meaning that you're 50 and beyond, it's 27 and $8 a month. For those that are qualifying for this brand new super catch up between ages of 60 and 63, it's just shy of $3,000 a month or 2,979 or $35,750.
- [18:19]
B
So if you are saving in your 401k and you're maxing it out, you are saving a substantial sum of money. And why do we love 401ks? What is it that makes them so great? Well first you get a tax benefit, right? So you either get a pre tax contribution and you save money on the taxes that you pay today or most 401k plans now even have Roth options. So I may not get a tax benefit today, but the money that I put in can grow tax free. And then while those dollars are invested inside the 401k, I don't have to pay pay taxes as it goes. They grow tax deferred. And then maybe our favorite thing, and this is the one, this is the thing I think that makes the 401k the most exciting is that the majority of 401k plans out there, the employer will say to hey, if you're willing to participate, if you put some money in, we are going to give you free money, we're going to give you an employer match, we're going to give you a safe harbor contribution, we'd give you a non elective contribution. So that not only are you saving for your financial future, but me, we as the employer are putting money in your account as well. It is literally free money.
- [19:28]
A
Well, and why do we think that 401ks are so important is the data shows this is that this is where I love that the behavior makes you be automatic with that you're consistent. It's letting you whether the market's volatile, whether it's going up, whether it's getting its teeth kicked in, you're buying in next month. And that's why it's very easy for people to see the data supports this is that the first account that hits the 2 comma club where actually people cross into millionaire status is typically that 401k account because of all the things that Bo just shared, the tax benefits, the free money, the consistent behavior, this is why this is so powerful for your long term success.
- [20:09]
B
And again when you do this, there's, there's a milestone in a milestone. Not only are you maxing out your 401k but once you've maxed out your 401k 403b, 440, you are continuing to move along in the food. Brian, hold the thing up for me again.
- [20:22]
A
Oh yeah, there it is.
- [20:23]
B
Now instead of being in step six, once you've maxed that out, now you move from step six into step seven. You're now getting into the hyper accumulation phase. And that actually takes us to milestone number seven. And this is that magic moment that when you are actually saving and investing 25% towards your future financial independence.
- [20:45]
A
Now this one's huge and a lot of you are probably saying, well why do y' all say 25%? That seems much bigger than a lot of the other, you know, people who are talking heads in the Personal finance space. And look, we have a reason is that because we know that the typical, you know, person who starts, the typical American who starts saving, investing, you guys don't figure out find our content when you're 21 years of age, I wish you would, most of you start saving and investing when you're 30 years of age. Well, that means you have to do a little bit extra work because you didn't start in your 20s. And we try to meet you right where you are.
- [21:20]
B
And those people that either start at 30 or maybe even the ones that start early, they, they likely want more flexibility. But we all know that life is not a straight line that goes from bottom left of the chart up to top right of the chart. They're often fits and starts. And so the earlier we can begin saving 25%, the earlier we can hit that number, the more freedom and flexibility we're going to give ourselves to. Either one, adjust to unforeseen circumstances in the future, or two, be able to purposefully shift and focus more on the things that we want to be doing and less on the things that we have to be doing.
- [21:56]
A
Well also, I mean, look, there's so much chaos and noise going on in the world right now between political noise that's out there, the geopolitical stuff out there with just what's going on with all the different countries of the world, and then even the noise of just all the cycle of what you can't control in your life. And that's why what I do like is that savings rate and investment rate, this is something you have direct control. And even if your intent changes, I love the additional flexibility. You just covered that because, like for myself, when I graduated college, I had this real hunger to know more, but also to put my money to work because I wanted to have resources, because I thought I wanted to lead the workforce at age 50 years of age. Well, I'm now beyond 50 years of age, but I actually still am happy I made those decisions. And that's why a lot of you, if you're just now thinking about this in a critical way that you never have, we've done the homework for you. All you have to do is go to moneyguy.com resources. We've actually got a great deliverable that you're going to want to know where you take and you choose what your age is, your anticipated retirement age. If you can give us those two variables, we can tell you what the estimated savings rate and investment rate needs to be for you to reach your financial goals.
- [23:16]
B
And when you do this again, when you start doing this, when you figure this out early, it puts you in control of your financial situation. Because once you start saving and investing 25% of your gross income, now you're moving from step seven, hyper accumulation into step eight. And this is likely where you begin to deploy your dollars in the ways that you want to. You want to think about paying for the kids education, maybe increasing the primary residence, maybe buying the different car, going on the nicer vacation. Once you've checked all the boxes and you're saving 25% of your gross income, it opens up freedom for you to now use your dollars in the way that you want to use them, completely guilt free.
- [24:03]
A
Yeah. The financial order of operations literally tells you what to do with your next dollar so you can live your best life and own your time that much sooner. I love it when we do these milestone episodes, Bo, because it lets people really take control of their army of dollars. And that's why we love creating this type of content. A lot of you are probably watching this and saying, hey, I've never thought about it in terms of, yeah, a hundred dollars a month is going to change my life in small steps. And then, hey, when I reach the point if a hundred dollars is great, $1,000 a month is going to be incredible. I mean, so there's just lots of things that are going on from a cash flow perspective. We want you to think about money differently because we truly believe that there is a better way to do money.
- [24:48]
B
Yeah. Use these milestones to motivate you to keep taking the next step, to keep moving in the positive direction towards your great big beautiful tomorrow.
- [25:00]
A
Now a lot of you, you're going to have a level of success because you're going to start thinking about this. Man, my simple life is starting to get more complicated. We're going to leave the porch lights on for you. That's the whole purpose of the abundance cycle, is the fact that we load you up with all the free stuff out there, but hopefully when you reach close to seven figures in success, you'll say, hey, those guys told me, here I am. Complexity my taxes, you know, saving for the kids, college, knowing how retirement, how estate plan and all that stuff is going to work. Maybe I should reach out to these guys. Like I said, we'll leave the porch light on. I'm your host, Brian, joined by Mr. Bo Money Guy out.
- [25:38]
C
The Money Guy show is hosted by Brian Preston and Bo Hansen. 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.