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- [00:01]
Brian Preston
This episode is brought to you by Lifelock. It's tax season and we're all a bit tired of numbers, but here's one you need to $16.5 billion. That's how much the IRS flagged for possible identity fraud last year. Now here's a good number. 100 million. That's how many data points Lifelock monitors every second. If your identity is stolen, they'll fix it, guaranteed. Save up to 40% your first year@lifelock.com podcast terms apply. Uh oh, am I in trouble with the irs?
- [00:38]
Bo Hanson
Brian, I am so excited to talk about this because sometimes we find ourselves in a situation where we might get a letter or might get a notice or might see something on our tax return that makes us say, yeah, now.
- [00:52]
Brian Preston
When I get those letters in the mail, I, I mean that's, that's, that's the only problem with informed delivery.
- [00:58]
Bo Hanson
Well, exactly. And you immediately come into my office and we talk about it. And we love that when these kinds of things happen in your life, we get to be the voice of reason. We get to explain to you what's going on, how you should navigate it, and what you need to know about that specific situation. We love that we can answer all these kinds of questions for you. So if you have a question and you want us to weigh in on it, we have the team right now in the wings collecting your questions in the chat. So if you want us to speak to something you're curious about, get it in the chat right now with that creative director, Reby. I'm gonna throw it over to you.
- [01:32]
Reby
Yeah, we're gonna kick it off with Joe's question. He says, I had a full time job last year and I have a side business. I didn't know I was supposed to be making quarterly tax payments and I am now getting hit with a penalty. How do you know when you're supposed to make the payments? And what do I do now that I owe this penalty?
- [01:53]
Bo Hanson
You know this, this is so funny because one of the things we do at the, in the wealth management firm at Abound wealth is we love to review all of our clients tax returns. Right? We want you to send us a copy of your tax return before you file so that we can look over and make sure everything was filled out correctly, make sure there are no mistakes. And what's so funny is it is always interesting because this happens sometimes. A client for the very first time ever, you know, it'll show, you know, amount that you owe or amount refunded and then like, like Two or three lines below that, it will show penalty. And immediately they'll be like, what's this? Whoa, whoa, whoa, whoa. What?
- [02:26]
Brian Preston
What.
- [02:26]
Bo Hanson
What happened? And I think a lot of people, especially in this economic environment we found ourselves in over the last 10 years, have begun to see this, because now we sort of live in this gig economy where it's not just your day job, it's not just your W2 wages, where your earned income is coming from, but a lot of people have side income. A lot of people get paid as independent contractors. A lot of people do gigs. And when that gig income reaches a certain level, it begins to impact your tax return in such a way where the IRS says, whoa, whoa, whoa, whoa. Wait. Wait a second there, fellow. Wait a second, lady. You did not pay us what you owed us when you owed us, and we have a problem with that.
- [03:06]
Brian Preston
Well, this is the part when. When you're an employee, a W2 employee, you start realizing, man, it's kind of nice that when I get my paycheck that there's already withholding for taxes. My employer is forced to pay for half of my Social Security and Medicare. So that's all covered. It just kind of automatically happens. But then when you do a side hustle, you realize you're treated as an independent contractor, so it all falls on your shoulders. So let's come back to the question that Joe had. Let's first lay out some ground rules. How do you know if you're in trouble or how to stay out of trouble? The IRS is constantly running. There's a calculation going on in the background. And here's what you need to know. You need to either pay 90% of current year's taxes as you make the money. By the way, this is not something where you just wait until December 31st and send them all, you know, send them 90%. You have to do this as you earn the income, or you have to pay 100% of prior year's taxes, unless you make $150,000. If you make over $150,000, then you need to pay 110% of last year's.
- [04:12]
Bo Hanson
Taxes, and that's in order to avoid any sort of penalty from underpayment for the year.
- [04:16]
Brian Preston
So long as you do that, that's a safe harbor prov. Irs. Now, look, I've been there. I've done a lot of tax preparation for. I did over. I mean, 16 years of tax prep, and it was not uncommon that people would get in this trap, that they'd realize, oh, my goodness, I Didn't make estimated tax payments. I made more income than I was anticipating. What do you do? How do you protect yourself? Or is there any way that you can work some, you know, magic to get yourself out of it? Let me tell you a little known thing that a lot of people don't realize is that if you do get caught in the quicksand of an underpayment penalty, first think about the fact did you earn this money all at once specifically? Maybe you got a big bonus in the fourth quarter or you did all because you're trying to pay for Christmas gifts or holiday gifts. So you went and did a lot of gig work in the fourth quarter specifically. If you can annualize your income based upon when you earned it, there's a chance you can minimize those underpayment penalties. So I want you to, if you get in trouble with an underpayment penalty, go look up annualized installment method and you'll fill out the form 2210 and you'll be able to figure out how you can minimize those taxes as much as possible. Because I was able to help a lot of business owners as well as self employed people who I would say look, let's go look at when you earn the income versus when you were supposed to make the payment and see if there's a way we could annualize this out to kind of lower that penalty down as much as possible.
- [05:42]
Bo Hanson
Now this is maybe a hot take in my opinion. I think paying estimated taxes, it's kind of annoying. Like I like, I don't, I don't love the process of it1, because the dates don't line up. You know, you got to pay them on April 15th and then you got to pay them on June 15th and then you got to Pay them on September 15th, then you got to pay them in January. It doesn't make any, it doesn't follow the normal like calendar stuff. And so if you've ever done our tax return and you've ended up owing, one of the things that either your tax preparer, the tax software will use will automatically do anytime you owe is it will immediately make a recommendation that you ought to start paying estimated quarterly payments and it'll give you a voucher amount to begin paying. So if you're someone who owed last money last year and you see it, you're like oh my gosh, now I got to start making estimates. That may not be the case because remember, if you are someone like John, like Joe, and you have day job where you do have W2 wages and you do have this side gig, it might be possible for you to just adjust your withholding on the day job. And if you can adjust it enough to withhold, you may not have to make those estimated payments. So it's one of those things things. If you're just slightly owing at the end of every year and you make enough in your day job, you may not have to go through the rigmarole of doing estimates. You could just adjust your W4, withhold more taxes from your normal paycheck and you may avoid having to run into the situation in the future.
- [07:00]
Brian Preston
Or if it's just a one off thing, maybe you just had some money come your way and now the tax prep software or your CPA is saying you need to make estimated tax payments. Make sure you go the extra step. Tell your tax preparer or input in on the software that no next year's income is going to be back to where it used to be. Because what I don't want you to do, I know money's tight in a lot of aspects. I don't want you making estimated tax payments and giving that money interest free to the government for a full year before you get it back. So that's why you got to be an active participant in your personal taxes, in your financial life. And this is once again another one of those reasons. When we tell people this is a complexity of success and if you find yourself, you're like, man, now I'm starting to have more and more struggles with not only my taxes but also my investments. This is why we take the relationship to the next level.
- [07:55]
Bo Hanson
Love it.
- [07:56]
Reby
Be an active participant. I like that. Joe, thank you for your question and we appreciate you being here on the livestream with us today. S. Sand has a question next. He says, my wife and I are in the messy middle and neither of us grew up with much. How can we teach our young kids to be good stewards and have an abundance mindset? Thanks.
- [08:18]
Bo Hanson
Yeah. So I think educating our kids so a lot of financial mutants have this story. Hey, I grew up in humble beginnings and because of things that have happened in my life, because of people that have supported me, because of work that I've put in, I've ended up in a better financial situation than I've started in. And with that better financial situation I started in, my kids are now experiencing a different childhood than I experienced. And perhaps some of the things that made me unique and equipped me to be able to attack the world the way that I have was some of those experiences I had when I was a kid, and now my kids aren't having them. So what do I do? My wife and I talk about this. It seems like on a weekly or monthly basis is how do we let our kids recognize that the way that we live and the opportunities we have might not be the norm. That might not be what everyone else is experiencing. And how do we get them to understand the value of making sound financial decisions? I talk about this all the time. You know, my kids are pretty young. I've got an almost 10 year old and almost 8 year old, and I have a 2 year old. So they're at, like, various stages of their understanding of finances. But one thing that we start very early on for our kids is anytime money comes. I got home yesterday, lemonade stand. It was awesome. It was so awesome. You would not believe, like, the guilt that these neighbors will just.
- [09:37]
Brian Preston
Oh, no. I know.
- [09:39]
Bo Hanson
They started tipping my kids.
- [09:40]
Brian Preston
Oh, my gosh.
- [09:41]
Bo Hanson
It was unbelievable.
- [09:42]
Brian Preston
I've drank, so I've gotten so many lemonades, I've thrown out because they have grass and all my other stuff are charging. And by the way, they charge you, like two bucks for these things. Yeah. So, okay, I think that's good.
- [09:57]
Bo Hanson
So my. My two little girls, they did this yesterday. It's awesome. They made. They made like 20 bucks in like 15, 20 minutes. It was wild.
- [10:04]
Brian Preston
You can only get away with that for a few times. Exactly. That's why I tell them, you know, ski to don't do this too often, because then people are gonna just be like, yeah, there they are, shaking us down.
- [10:14]
Bo Hanson
So I had this conversation as they're both, like, counting out the money, but it was actually an odd number. It's $21. Like, dad, it was 21. How do we split this up? We're like, well, me and mom supplied the supplies. You give us a dollar, then y'all can split the rest. That was how we split that up. And I said, well, anytime money comes into your possession, what do you do with it? And they know. It's almost like rote memory. Anytime we get money, we give, we save, we spend, we give, we save, we spend, we give, we say we spend. So if you can begin even instilling like, that kind of mindset in your kid as they begin to progress and as they begin to age, then you can start diving each into each one of those. Okay, now we're going to save. How do we save? And that's something that you did with your daughter was like, actually diving in. How do I actually save?
- [10:55]
Brian Preston
How do I. I Wrote down a few quick things because I've got older kids. I've got one that man get me all teared up if we think about how close she is to graduating college. And we just got back from spring break. And it's nice when you're older children who initially don't want to go on the trip, but then they find out where you're going and you're like, yes, I was able to bribe them to go one more year, because this stuff, you just. You're not guaranteed those memories. And it's just. You get so sentimental the older you get. Here's what I wrote down. I wrote down three key things, and it will. The last one is prime the pump, so I'll talk about that. But scarcity, I first want to tell you, I think one of the things that I always struggle with families who grew up with not much and now you have. You have more abundance in your life, and I see it with my neighbors and others, is that you're not doing a good job of adding some scarcity in your children's lives so they know how to handle resources or even understand how hard it is to come into resources. Because I think sometimes if you grow up in abundance, sometimes that can get lost. So I always. On the first car, my daughter paid for half of her first car, and then now we upgraded her once she got to college, but it was still something that was a huge, very reasonable paid. She drove it all through high school, and I thought that was a good thing to let her have some skin in the game on that first purchase. And then the other thing that I tell people, you don't have to be scarce on the memories, though. I think it's okay if you're taking your kids on good trips and memories, those things will serve them well. But you don't have to give them the nicest cars. You don't have to make sure that they. You just give them 50 bucks, 20 bucks, 100 bucks. Anytime they ask, it's okay to add scarcity in their life. The other thing I think you ought to do is, and this is my opinion, but I've just got a lot of experience seeing people who come from these backgrounds. I could look at Beau, I look at myself, is make them work. As soon as my daughter got to 14, 15, and then 16, once she was definitely mobile with a vehicle. I like kids working fast food. I mean, there are so many benefits to getting your kids working in the public. First of all, they need to learn the value of working. Your labor turns into money. There is something very valuable about understanding and appreciating that. You work hard, you make money, and it's a good thing. So when my daughter worked at Chick Fil A for those years, it was great because you realize the public's crazy, but you've got to still put on a happy face and be good with people. And those EQ skills will serve you for years to come. I remember there's some crazy stories I could tell you from working the drive thru at the Hardee's in my hometown. I mean, it was just, you get a lot of experience. I know you've told me all kind of stories when you were a server at Chili's all through those years. So make your kids work. I think it's important. I understand now, Bo, you might have a different point because I know you were an athlete all through that, and I think that's a whole nother work ethic that you can also give a lot of credit to. And then the last point, what Bo was talking about, I do believe you should prime the pump. Meaning that you want to. As you're trying to create good stewards, but also good productive adults, you need get them to understand that their money actually is not just for consumption. I love that Bo talks about the give, save, spend. But I think a lot of people, even beyond the giving and the saving, they get too carried away with the spending and actually never do the saving. So what I've done, as soon as my daughter started working, I said, you know what? We're going to open up a custodial Roth ira and I will match it dollar for dollar. Now, you have to stay within the limits of what? You can't fund a Roth IRA for more than your earned income. But that ties into the whole, let them spend some of the money. And I was amazed at how that was. It really was priming the pump of an engine or pouring gas in the carburetor. Because it was just amazing to watch how she would get some additional money. And she'd be like, hey, does that offer still stand that I can make a contribution to my Roth ira? And I'll be like, yeah, for sure. And I've watched. And what's also really cool is when you start getting those monthly statements and you compare how many hours she would have to work for what the money made just in that past month. And then if you want to go to moneyguy.com resources, go look at our wealth multiplier tool as well as our downloads. That stuff is so valuable because I mean you get an 18 year old where I'm doing this off memory, which is a mistake. You should never do stuff math off memory. But isn't it like $108 or somewhere around there? But for a 20 year old it's 88 times over and it's just so incredible. If you can use and by the way, if you go to moneyguy.com resources we actually have the wealth multiplier all the way down to one years of age. So if you want to get the grandparents all excited about your kids and making them have a pot of money at some point that they're saving for college, that's a great resource too.
- [15:54]
Bo Hanson
Love, love it too.
- [15:56]
Reby
Ssan, thank you for being here. I hope that question helps you think about parenting as you talk to your kids about money. And yeah, we just always appreciate these questions on the live stream. So onto the next one from Hero of the Table it says my income is on the edge of the limit for Roth IRA contributions. I intend to wait until January or February to make my contribution to either a Roth or traditional ira depending on where our income ends up. Should I put the monthly contribution into a high yield savings account or a taxable brokerage during the coming year?
- [16:34]
Brian Preston
So let me pull this apart Bo and then let you answer it. Is that really. This is a pretty simple question, but it's got a lot of fancy stuff on the front end. First of all, I want to give Hero the table. You are also the hero of don't pre fund the Roth IRAs if you are right on that threshold because you just create a lot of work for yourself. So this is if you, if you give Hero credit for being right on that. Now it's a question beau of how do you handle your cash to maximize it?
- [17:01]
Bo Hanson
Yeah, I think one of the things, you know, a lot of folks would say, oh well I don't want the money. Just sit there. I love the idea of dollar cost averaging. I'm going to just start dollar cost averaging into my after tax account or buy some index funds. And while you can do that, there is a risk that you run because when it gets to January, February of next year, what if you. I'm going to do math in my head because I can do this math. If you're doing $500 a month into your account and you were going to plan on putting 6,000 in an IRA, what if the market goes down and over the course of that time that 6,000 that you were going to put in there has turned into 5,000 now or 5,500, you have a little bit of a problem. So I would think one of the things you could do is I don't think it's crazy to think about parking in a high Yield savings account. But you said something really interesting. I'm going to wait till January or February and I'm going to see if I qualify for Roth or if I don't qualify for Roth. Now hear me out on this. Even if you don't qualify, but you are structured in such a way where you could do backdoor Roths, there's a really good chance you're going to say, hey, if I can do any type of Roth at all, I'm going to do it. So while I may be funding a traditional ira, I'm not going to fund it for the pre tax benefit of it. I'm not going to take the deduction on that. No, I'm going to do a non deductible contribution. Well, if you know you're going to do that anyways and you're already at the threshold to where you think you're going to cross over the Roth, you could still do backdoor Roths. A lot of people don't realize this. You don't have to make over the Roth income to do backdoor Roths. You can make under the Roth threshold and still do backdoor Roth, and it's totally okay. So for a lot of our folks, a lot of our clients who are right there at that threshold, like some years are over, some years they're under, but they want to go and get the money in Roth as soon as possible. We go and just do backdoors every year. Backdoors every year. And that's totally fine, totally permissible. And that way you're not necessarily having to wait that extra year. But if you're not in that situation, I think it's okay to park that money in cash. And then when you get to January, February, stroke the check, get it invested and let that money work for you. Agree? Disagree. Want to find out?
- [19:01]
Brian Preston
Well, I do want. I just want to make sure. We love backdoor Roth contributions. But remember, you have to have the right account structure.
- [19:08]
Bo Hanson
Oh, so if you comment the other day.
- [19:09]
Brian Preston
Well, no, I just know I've had a neighbor who called me all excited because he's like, man, I did the backdoor. And I was like, but don't you remember we talked on your back porch and you have a rollover ira? I was like, so you can't do a backdoor without screwing up the whole basis and how you're going to fit. He's like, oh my gosh. So I always put that disclaimer out there is that make sure you can't have any other IRA assets except for like an inherited IRA or Roth IRAs, because SEP IRAs blow it up. Simple IRAs blow it up. Rollover RAs blow it up. So just be careful about that. I don't disagree. If you, if you have the right account structure you can go ahead and plan accordingly. But you don't want to do 12 conversions. You still probably go end up in a very similar situation as Hero and you're going to be doing this as a one time transaction. I also want to answer the question about cash because we still, we're in that we're right there on the cusp of where things are probably going to change for cash is because forever everybody's going to your high Yield savings account. The banks that are still FDIC insured. But if you notice those are still paying 3.5 to 3.7, I think then you've got your money market mutual funds that are at the brokerage accounts. That's like your fidelities, your Vanguards and so forth. Those, they got as high as they were paying close to six and it was easy to get five. I've noticed those have slowly been coming down to where I now think you're in the low fours. But they're still ahead. But there will be if we get any more interest rate drops, we'll probably hit a crossover point at some point. And that's where Hero, if your question is, I would just go with what's easiest to say. If you already like I already had a taxable account like at one of the big brokerage companies. And then I also had a high yield savings account at like Ally or something like that. So I can sit there and I just maximize the one that's paying me the most. I mean it's because they're both secure. It's good. Look at the rates, do the research and then choose. But just know it's coming because as soon as rates go down, you'll see the banks will hold their rates higher a little bit longer than the brokerage companies. It's going to be almost immediate that those money market mutual funds will now be underperforming the high Yield Savings accounts.
- [21:25]
Bo Hanson
This is a brief aside. If you guys wonder if we read the YouTube comments. We do. If you wonder if we go through and read the subreddit thread. We absolutely do. And the other day did you see the comment that got somebody was like, oh, man, these guys talk about the backdoor Roth and I got so excited. But man, they didn't say anything about the pro rata rule. Man, these guys should really do some content on the pro rata rule. Every time we ever talk about it.
- [21:48]
Brian Preston
Every time I try to make sure I put the disclaimer in there.
- [21:51]
Bo Hanson
So that guy's just not deep enough in.
- [21:52]
Brian Preston
No, but my neighbor fell into the same trap. So I mean, I want to make sure that's why I put that disclaimer out there.
- [21:58]
Bo Hanson
We always talk about it.
- [21:59]
Brian Preston
I get it. I get excited and miss all kind of. I mean, it's easy. You get. You hear something like, man, I was told Roth was off limits. And then we get you all excited and then you're so excited you don't hear the disclaimer. So that's why I'm glad that we're giving it a little, little extra punctuation.
- [22:14]
Reby
Yeah.
- [22:14]
Bo Hanson
Like we do every time.
- [22:15]
Reby
Like you do every time. Yeah, our. Our actual shows that. Cover that more in full. Absolutely. Share those details. So you should go look those up on our YouTube channel or podcast platforms. All right.
- [22:26]
Bo Hanson
I will be doing a back door.
- [22:27]
Reby
Oh.
- [22:28]
Bo Hanson
Because I don't have any other one. Awesome.
- [22:29]
Brian Preston
That's great.
- [22:30]
Reby
Love to see it. All right, next question is from Heather B. It says I have a pension from my corporate employer. If I retire early, I can choose when to start receiving benefits up to 65. And it grows the later I wait. Should I start ASAP or push it back or take a lump sum. What do you think about this?
- [22:53]
Brian Preston
Oh, man, there is so much in that question.
- [22:55]
Bo Hanson
You won't believe our answer to this, Heather.
- [22:58]
Reby
It depends.
- [22:59]
Bo Hanson
Look at Ruby. Ruby got a nut. Yeah, it absolutely depends. And unfortunately, this is a mathematical equation. It's not incredibly uncommon for someone to have this option. Hey, when I retire, I can either take a lump sum benefit of my pensionable amount and I can take that lump sum and I can do a direct rollover into an IRA into a pre tax type retirement account, or I can annuitize the benefit and I can receive a monthly payout. And even when I annuitize, I can pick when I want to do that. I might start my annuity at 60 or 62 or 67. How do I decide? Well, what you have to do, unfortunately, is you have to break out a pen and paper. I'm just kidding. It's not really pen and paper. You got to break out a spreadsheet or some software or A calculator. And you have to look at, at the point in time that you make the decision which would be most advantageous. And this is a little bit of a cautionary tale. It's not always one way or the other. We have a lot of clients that when we do the analysis of the present value of their lump sum pension benefit relative to the present value of their future cash flows from the pension, the lump sum is way more attractive. And so we communicate, hey, it really makes sense to roll this over. And then we will have an exact different client who works for a different company with a different pension calculation. And the present value of their future income stream is way more than the lump sum value. So it makes sense to take the pension. So you have to actually sit down and do the math to determine which one is most advantageous. And here's what gets even crazier. We have clients who will be four, five, six years away from retirement. We're beginning to make these assumptions. And six years out, we'll say, okay, hey, lump sum made the most sense. Okay, four years out, hey, lump sum makes the most sense. Hey, we get 18 months out and now there's been a shift in interest rates, there's been a shift in the way they calculate the pension. All of a sudden, now the lump sum isn't the most advantageous, it's actually the annuitized benefit. So you have to do the math and redo the math all the way up until it's time for you to make the decision on how to take it.
- [24:58]
Brian Preston
This question immediately made me think of, you know, we got invited to go speak at Murray State to their athletic program and then Journey church. And it was a great experience. But we had in the Q and A after the church event, this was like one of the first questions that was asked to it. And I love it, and I hate when we have to say it depends. Of course it does depend. But I can at least give you because we're the king of creating order of operations. There it is with Millionaire Mission and other things. So here's the order of operations. I at least can give you on the thought process of how you should think about this is exactly what BO is talking about. You have to look at this pension and start doing some math calculations to figure out how fat was the design or how anemic was the design when they put this plan together. Because you might find out that there's their stated retirement age is lower than most plans and that they actually pay out larger sums to where if you calculated the rate of return of what that lump sum they're telling you each year is and what it will be paying out. From an annuitized standpoint, you might go, holy cow, I can't believe there's a reason they really want me to take this lump sum is because they really over promised and I'm in a really sweet situation. Or you might look at it and go, are you kidding me? That's all I get? I have this lump sum but they're only going to pay these benefits. You have to do that analysis first to figure out are you lump suming or are you actually going to take advantage of the pension. It's all about the assumptions on how this thing was designed. If you figure out this thing is a good pension, you don't want to take the lump sum because if it's anemic and it's not good assumptions, you're probably just when you retire going to do a trustee to trustee transfer. It's a tax free, tax deferred event. Or you just roll it over, there's not going to be any consequences at the moment and then you'll go invest that money and do it your own way. But if you figure out this thing is frothy and it's good now, you have to say, when do I need the money? Here's why you don't want to potentially immediately take it if you don't need the money is because it's going to increase your taxes. And then also if you're worried, well, maybe I'll die, well, yeah, but most pensions also have a survivor benefit, so it makes sense. Especially the way you describe this, Heather B. Is that the longer you defer, the bigger your benefits. If you don't need the money, let it kind of do its thing and then take it and do, you know, use the planning so it's got some longevity protection for you. But those are some things just to think about.
- [27:24]
Bo Hanson
For those of you who got glassy eye and you're like, oh, I don't have a pension, I don't have to think about these things. This thought process we just went through is the same thing that almost everyone in their 60s faces when they decide how they're going to take Social Security, it's the same way that you think about it. Do I begin drawing it early? Do I begin drawing it later? There's a benefit for drawing later. If I draw it early, are there other things I'm going to miss out on? Are there other implications I ought to be thinking through it Gets very nuanced. And it's so funny. All the people in the comments, they know our lines better than us. Personal finance is in fact personal. And the right answer for you is going to depend on your unique financial situation.
- [28:01]
Brian Preston
There is one flaw in your analogy there though, because it makes me want to fight Social Security's survivor benefit is.
- [28:09]
Bo Hanson
Oh yeah, horrible.
- [28:10]
Brian Preston
What is it, 255 bucks?
- [28:12]
Bo Hanson
Well, yeah, there's some.
- [28:13]
Brian Preston
Yeah. I mean there are some survivor, but if your parents. Look, I grew up in a house.
- [28:17]
Bo Hanson
My dad.
- [28:18]
Brian Preston
My dad died prematurely and my parents both never made a lot of money. Maybe about the same amount of money. So I'm a little bitter about how Social Security works because he paid the system for his. Paid in his whole life, died in his 50s and then since my mom and my dad made about the same amount of money. Pretty bitter about how that from a. You know, because that's why the first social media post I ever made before this is back when people blogged I came up with a Gen xcream or something like that. And it was my frustration.
- [28:52]
Bo Hanson
Was that your username.
- [28:53]
Brian Preston
That was the blog I was trying to start.
- [28:55]
Bo Hanson
It was Gen X Scream.
- [28:57]
Brian Preston
I was mad about Social Security. I was in. That was my main. Because it is. There is some things about from legacy planning. If you grow up poor. There are some things about Social Security that drive me crazy and we could fix a lot of this stuff. Both from that benefit could hopefully be updated in many ways just to make it better.
- [29:18]
Bo Hanson
Agreed.
- [29:19]
Brian Preston
But I think people are scared to. Elected officials don't like to touch or talk about Social Security. It's a fact.
- [29:26]
Reby
All right, that was.
- [29:28]
Brian Preston
Sorry.
- [29:28]
Reby
We have got a lot of good questions today.
- [29:30]
Bo Hanson
That was from Heather.
- [29:31]
Reby
That was from Heather B. And we really do appreciate that question. We hope that that helps you think through your pension and entails. All right, Thomas W's question is up next. Is 2% worth putting to a Roth IRA versus a Roth 401K? I get a 10% retirement match through my company and can put my contributions to a Roth 401k. What are the differences between a Roth 401k and Roth IRA? And then he added, I currently contribute 12% of my income plus the 10% match. I'm 22 years old and making near six figures. Oh, so doing well.
- [30:09]
Bo Hanson
22 years old making six figures. That's awesome.
- [30:12]
Brian Preston
Thomas didn't give the option that I'm going to say and then let you explain. Both.
- [30:16]
Bo Hanson
Both. Yeah, agree. Especially if you're 22 making near six figures. You got a high income and hopefully not a lot of high expenses. And so you have some margin there. I want to zone in on kind of the middle of the question because this is what I think real. The crux of your question. What are the difference in Roth IRAs and Roth 401ks? And there are a few worth noting, the most notable of which I think is with a Roth 401K, you can just put a whole lot more money there. Roth 401ks, you can take all the way up to $23,500 this year. Your salary deferral can be all Roth. With a Roth IRA you can only do $7,000 a year. So if you're just trying to sock away the most amount of money, 401k is going to line to do that. The other big benefit with a Roth 401k relative to a Roth IRA is that Roth 401ks have no income limits. So you can make a million dollars a year and you could still put all $23,500 into your Roth 401K. Once you make over a certain threshold as either a single individual or as a married filing jointly individual, you can't contribute to a Roth IRA anymore, at least not directly. You'd have to do a backdoor. So there are some benefits that the Roth 401k might pose over the Roth IRA. However, there are some benefits that the Roth IRA have over the 401.
- [31:29]
Brian Preston
Well, that's what I think you do. I can't believe we've made it into like the fifth or sixth question. And this is the first time we've said the financial order of operations will lead you the way is because you said something very key there, Thomas. Your employer gives you, I think up to 10%. You put in 10%, you get a match. So that's a step two. So you're going to do the Roth 401K just to maximize that match. But what I do like, and this gets to what Bo's question is step five. When you get to Roth IRAs and HSAs, what I like about the Roth IRA as the next step before you go and load up even more into the Roth 401, you get to control where. Because a lot of times your 401 now there's a lot of good ones. Maybe you work for a Fortune 500 company and it's with one of the low cost providers like a Fidelity, a Schwab, a Vanguard or something like that. And those things are rocking and rolling. But you even have to be careful if you have a Vanguard, because I've seen insurance companies, it's kind of that will put sub accounts, they'll make it look like a Vanguard and it will. But it's a sub account. They add all kind of fees on top of it and it's packaged into an insurance type product. So you have to do dial it down, look at those internal expenses to figure out. Whereas when the Roth ira, you control it all. I mean, you get to say, hey, I want the low cost option. I don't have to worry about how my employer chose the 401k provider. I don't have to worry about the fees that might be in that 401k. I'll just go do this low cost option. Roth Ira. It used to be there was some other unique things. It's not even worth. They modernized the tax law to where all those things about required minimum distributions and so forth, much more simple now. It has made it easier. So now it's a matter of how much can you save or need to save and can you maximize this moment and somebody your age? Because here's the thing. I know 25% savings rate is the freeing rate that we typically tell everybody, but there is a point where you are in such a unique situation at 22 years of age, almost making six figures that you have all the makings of somebody who's going to be able to build incredible wealth pretty early. But you have to. I would look at this as like you were a professional athlete. Is that professional athletes, the hard things for professional athletes is that they might earn 70% of their income in only four years. So if you squander while you're in these high income, it's kind of that I'm telling all kind of analogies, but it just comes to my mind that whole conversation Dave Grohl's father gave him when he got his first big check from nirvana was, you know, treat it like you're not getting any more. And then once you know, if you do this, you're 22 right now. By the time you get to your 30s, you're going to know your die is cast. Okay, now I can do like the know your number course or something. Figure off I'm ahead of the curve, behind the curve or right where I'm supposed to be. But when you're right at the beginning of the journey and you have a high income, it's important that you try to get your critical mass built up a base level of assets so that it just the money your army of dollar bills can start working for you as much as possible. I think sometimes people start young. By the way, that's not to I'm like, consider me your coach. I'm the one you could get. Yeah, you could probably bench press by yourself a certain weight. But if I'm over you, spotting you and making you do better, you will be stronger, you'll be faster, you'll be able to do this so much more. So that's the only reason I'm putting this extra pressure on you, is to make you better. You're already crushing it in a lot of ways.
- [34:55]
Bo Hanson
You get a good bench press analogy there. I'm in. I'm so in for that.
- [35:01]
Reby
Well, good answer all the same with the bench press analogy. Thomas W. Thanks for your question. MM has a question next. It says, my wife and I are 30 year old doctors at the end of our training. Congrats on that by the way. That's a long time household residency salary is 50k a year. We are about to start our careers and our salary will grow to 600k a year. How should we prepare? Unique situation here.
- [35:32]
Bo Hanson
Well, here's, here's the advice. So we obviously work with a lot of medical professionals who have gone through residency. Now they transition into this stage of their life. And here's the, here's the best piece of advice that I could give you. And I give this same advice to college students, if you can believe it. Even college students who come out of college going into the first job say, I want you to slow down and pause and just think about that. On your salary of $50,000 a year, you've been able to make it work. You've been able to live life and pay bills and do things. Maybe you haven't been able to do all the things you want to do, but you have been able to navigate living on that income. Don't automatically assume that when my income goes from $50,000 to $600,000, my lifestyle has to move just as rapidly. Man, if you could figure out, man, what if we made $600,000 for a few years and we still lived like we made 50,000, I tell my college graduates this too. Hey, if you get your very first job and you start making 50,000, 60,000, $70,000 a year right out of school and you can live the first few years like you were living as a college student, like the guy who was stretching 20 bucks for a whole week and you can master that. You'll be amazed at how much money that you're able to Stack up and how powerful that money can be for in the long term. So the best piece of advice I would give you guys is to stop and slow down. And I would have. Because it says it's a couple, right. They're both okay. I would have a cool off here. But hey, you know, we're going to do for the first six months we work, we're working, we're just going to focus on working. We're not going to go buy the BMWs, we're not going to go put the down payment on the house. We're not going to go do the this, that, this, the that, this, the that. We're just going to kind of let a few paychecks hit, ease into this and talk about, okay, what are our goals with money? What do we really do we care about having the $5 million house in the hills or is the reasonable house in our area that we want to buy and start a family and set roots and does that make more sense, at least at this present stage? Because that's the one thing I see. Sorry. Doctors get wrong is they rush into the lifestyle immediately.
- [37:43]
Brian Preston
Well, I want to talk about the mindset of. First of all, we don't know a few things that have not been shared, like student loan debt. It's typically doctors. Yeah, you go from making 50,000 to 600,000. But what you're not sharing with us is how much six figures of student loan debt do you have? Because that's built in. What's the interest rate on that? There's a reason we had the financial order of operations is you've got to triage your financial life to figure out, oh my gosh, you know, a lot of these student loans, I had to take six figures because I'm a doctor, I've been in school forever. Are much higher interest rates than I feel comfortable with. So that's going to come into the plan. The other thing is I want you to have the mindset because I think a lot of times I see doctors and look, you're going to get targeted because you have a great income, but you have a good income, but you're not wealthy. You know, there's a difference. You know, you can.
- [38:34]
Bo Hanson
They call that Henry. Right. High income, not rich yet.
- [38:37]
Brian Preston
Yeah. Because you might have big student loans. You have. So you have a lot of potential with that high income. But you ought to have the mindset you might very well be behind. And a lot of people. Wait a minute, didn't you HEAR they have $600,000? Yeah. Well, what if they have $300,000 of student loan debt, what if you realize that they're now in their early 30s? What's the wealth multiplier for a 20 year old? It's 88 times over. What's the wealth multiplier for a 30 year old? It's. So you can see how we've almost cut it in a quarter. From any of your friends that got the, you know, the finance or accounting degrees and, you know, graduated at 22. They've been, they've been out there putting in some steps already on building up net worth. So I just. Because I remember I had one of my early clients. Only reason they're not clients, because Mayo Clinic's benefits are so good that they stole them away. Which really upsets me because I loved having them as clients. But she used to, but I loved how she would advocate whenever her new doctors would come out of their residency and say, don't go buy the Mercedes, don't do it. I know you've been in school so long, you feel like you should reward yourself for all this hard work, but you've still got a little bit more in the journey because it's back to, you've got to build the critical mass. You have no assets working for you. It's all built upon your labor. At this point, you very well could have multiple six figures of student loan debt. But we've got to get all that under control so you can actually get caught up and you'll do it very quickly. That's why I'm saying a little ounce of preparation for somebody who's graduating with this type of situation is going to go a long way. But the problem I worry about is doctors because that high income is so strong, you can go to a bank, they'll give you a mortgage on probably a multimillion dollar house, they'll let you finance that Mercedes for 84 months and before you know it, you're going to be the typical trap of what have I done to myself? You know, And I, I've never, I'm going to have to work forever because by the way, we have doctors on staff here. And because let me tell you, medical profession has a lot of burnout and it's hard. And there's other things I think. Now, fortunately our doctor is because he was independently wealthy, he had a military life, he retired and he came in, but he just wanted to help in this way. But it is something, I see it all the time with doctors where they can get burned out. And I just. You want to have a plan to where your money can start working harder and for you than you can with your back. Your brains and your hands. Love it. You only have one brain with your back. I don't know why I put an S on that.
- [41:14]
Bo Hanson
And your hands.
- [41:15]
Reby
All of them. All of them. Well, mm, thank you for that question. And they did add some context and said, yep, they have a joint amount of about 400 cases. Student loan. So good that you talked about that.
- [41:26]
Brian Preston
So don't go crazy on lifestyle because the banks will let you do it. And you need to feel, you need to have the mindset of scarcity and that you're a little behind in the beginning. I hate to be like that because it seems on paper you're like, holy cow, we're gonna crush it. And you are. But you just. You gotta kind of. You gotta dig out of the hole a little bit.
- [41:44]
Reby
Give it a second.
- [41:45]
Brian Preston
Yeah. Before you do that. That's what. Once again, these two things can be your friend.
- [41:51]
Reby
Well, I was gonna say, too. They also said, thank you. Look forward to buying the book. So Millionaire mission fan in the making. All right, next up, we've got Calvin Awesome's question.
- [42:03]
Bo Hanson
Speaking of millionaire mission fan in the making, that sounded, like, eerily similar to Making a Millionaire. And I was gonna throw this out there if you guys have not checked out the new show that we're doing called Making a Millionaire, they release every other Monday. We had a doozy of one that released last week. Thank you guys for checking that out and hanging out with us and Phil. We have more episodes coming your way. Well, the only way to know when we release a brand new episode is if you're subscribed to the channel right now. So if you have not subscribed, make sure you click that subscribe button so that we know you are out there.
- [42:35]
Brian Preston
Hey, a little sidebar. I'm sure we'll do a formal. You did some type of update, right, on Phil?
- [42:40]
Bo Hanson
I did, yeah. Last week in our livestream, I gave a little bit of behind.
- [42:44]
Brian Preston
That's good. Okay.
- [42:47]
Reby
No mentioning it on this live stream. I thought you talk more about it. You were like, we already did that.
- [42:52]
Bo Hanson
Well, people were like, I wonder what happened. Well, Phil took a lot of our advice. Phil, he made some big changes after we recorded that, and it's awesome. I'm excited. I'm excited for Phil.
- [43:01]
Brian Preston
Yeah. We're recording another episode this Friday. I'll get excited.
- [43:03]
Bo Hanson
We are not with Phil. We are recording another episode this Friday. It's gonna be great.
- [43:07]
Reby
Love it. Okay. Back to Calvin Awesome's question. He says, me and my wife are about to have our first child.
- [43:14]
Brian Preston
Nice.
- [43:14]
Reby
And want to do a 529 plan. We're technically in step eight of the financial order of operations, which is awesome, but it seems fake because we don't own a home. Is the 529 still valid for us? Interesting way of thinking about this.
- [43:33]
Bo Hanson
Well, I want to give you, I want you to give yourself some grace if you're in step eight. And I'm going to let me articulate to you what step eight is. Brian, will you hold the thing up for me? You're getting your full employer match. You don't have any high interest debt. You have a fully funded emergency fund. You've maxed out your roths and your HSAs. You're maxing out your employer sponsored retirement plan. You're saving 25% of your gross income. You are at the 25% savings rate now preparing to have your first child. So that's not fake. If you're at step eight, that's not fake. You've done it. If you're at a 25% savings rate and you've worked through. That's awesome. Now the question becomes, and this is where I think you're facing some tension. You have to think about what your goals and priorities are because we talk about all the time, Brian. Money is nothing more than a tool that allows us to achieve the goals that we have, the things that are important. Obviously you know, financial independence is one. That's why you're saving. And it sounds like paying for your kids college is also a goal that you have because you're talking about open a 529, but you don't own a home. And one of the questions I would ask is, is home ownership on the radar for you? Is that something that you want to do? Is that a goal that you do have? Well, if it is a goal that you do have, you have to figure out how does that goal coordinate with the other saving that we're doing as well as coordinate with being able to pay for our kids college. Because I'm going to guess if your desire is to own a home, you probably want to own a home before this kid goes off to college. So it's going to be a nearer term goal than the college goal. And I think you just have to get serious about, okay, what are we actually working towards and do we have a timeline around when we want to be able to do that? And once you figure that out, it will then begin to define the priority that you place on either doing a step eight, 529 type thing or continue to build towards that down payment for a home.
- [45:24]
Brian Preston
Look, I'm just going to go ahead and say this. I first want you to go to moneyguy.com resources and look at our home buying checklist. You have to go through the checklist first. But I have a very strong opinion that if you are in because part of the checklist is gonna be, are you gonna be in this community for the next five to seven years. I bullied Beau into buying his first house. I feel like Beau and I jointly bullied Reby into buying her first house.
- [45:49]
Reby
You did.
- [45:49]
Brian Preston
I'm very grateful for that because. Look, I'll just go ahead and tell you there is a life arbitrage thing. There's a reason when the Federal Reserve releases the Fred releases the net worth data for the majority of Americans, it's like almost all of their net worth is in their home equity. Is because houses go up and you know, and it appreciates and plus it lets you grow roots. You meet your neighbors and community. I think about the fact that, Bo, you're going on trips with your neighbors. I know in the next month or two. I go on trips all the time with neighbors and do things. And I see the kids like, what's funny is my daughter, she goes to bed pretty. My youngest daughter goes to bed and she's like, dad, I was up late last night because the kids across the street were out there still playing basketball. Now, I don't know. And I heard them too. That ball was dribbling until 9. I was like, are they homeschooled? Where are these kids doing? I didn't understand how they were out. But it is so fun watching kids grow up and things. So that's my opinion on that. But also there's some financial part because, I mean, I play around with all these calculations looking at opportunity costs and so forth. That's why, if you notice when you look at all of our rules, first time home purchase, we're not like all those other gurus that tell you, hey, go save up 20%. We're like, no, get in there. 3 to 5%. Make sure it stays below 25% of your gross income. I know that's going to be the stretch with where things are with housing right now. But I do think homeownership, it's a little bit hard. It's actually much harder now with where interest rates are. But there is always the opportunity that interest rates, if they Come down, you're going to be able to refinance. Just don't be house rich, life poor. But. But it is something that I think can add a lot of value.
- [47:39]
Bo Hanson
I don't disagree with that.
- [47:41]
Reby
Well, that's good that you don't disagree with that.
- [47:43]
Brian Preston
I mean, didn't I.
- [47:44]
Bo Hanson
Do you feel.
- [47:44]
Brian Preston
Are you glad we bullied you into buying a house?
- [47:46]
Reby
Yeah, no, I truly am because I was really thinking I had to put 20% down. And so I was like, wow, I'm never getting a house. You know, that's how I felt at the time. And I know I see that same sentiment with our fellow financial mutants. So, yeah, I was like, my world was totally open when I found the money guy, home buying rules. I was like, oh, wait, I could potentially do this. And then I could.
- [48:07]
Brian Preston
And I'm still putting the caveat, you got to go do the checklist, because, I mean, we have some specific rules to make sure you and I did.
- [48:13]
Reby
The, like, they were really helpful. I did feel like those were, you know, they were really good guardrails.
- [48:19]
Brian Preston
So do you disagree with me because I kind of picked on you? No, no, no.
- [48:22]
Bo Hanson
I agree completely. I do. There's this, like.
- [48:25]
Brian Preston
Because you had a vision that you were gonna do everything out of. I think it was a two bedroom apartment over there.
- [48:31]
Bo Hanson
Yeah, we. So we sold our house in Atlanta, we moved up here, got the apartment. We're gonna do like, the like, super mobile lifestyle. Ended up finding out we were pregnant. I was like, well, okay, I guess we're gonna go from a two bedroom apartment to a three bedroom apartment. And you're like, what are you doing, bro?
- [48:45]
Reby
I mean, you can do that.
- [48:48]
Brian Preston
Unless he's changing jobs on me, which obviously not since we're partners, but it's. But it is what? I was like, yeah, this is crazy.
- [48:55]
Bo Hanson
I'm so glad that I did. But I do hate people feeling like I have to buy home. Have to buy home, have to buy home. Because I do see a lot of people.
- [49:02]
Reby
It doesn't have to be your goal to happen to be.
- [49:05]
Bo Hanson
For me, it's okay. You can become incredibly wealthy and reach financial independence and live the life that you want on your terms without owning a home or maybe without owning a home in this season, then that's okay. But just to be realistic, if it is a goal, you can't, like, ignore it and act like it's not a goal and think it's just gonna magically happen one day. You have to plan for it, especially in today's house.
- [49:26]
Brian Preston
We've actually, I should say that's a. That's a good point. We had a. Because we had a client in a very high cost of living area, you know, out there in California. They built tremendous financial independence, then bought a house later.
- [49:41]
Bo Hanson
That's right.
- [49:42]
Brian Preston
They rented the entire time they were making their peak earning years out there in that high cost of living area. But then they moved to an area that was where they passed by and all. So, I mean, that's unique. I should, I should be careful putting my opinions out there.
- [49:55]
Reby
Like, there's other factors too, because I remember, like we looked at like a three bedroom apartment and like the, the numbers were similar enough. Like if we found a house for this price and put this much down, like the numbers were close enough that it was like, yeah, this is probably a good idea, but that's not always the case.
- [50:11]
Brian Preston
But think about your husband. I mean, he's like a professional guitarist. He'd been miserable in an apartment. It. Because now you can turn the amp off. I mean, of course the kids are blowing that all up.
- [50:21]
Reby
Yeah, that's true. But anyway, for all of those reasons, kids, guitars, it was a good goal for us and I'm glad we did it and glad we had the money guy rules. And if you want the money guy rules, I have to mention moneyguy.com resources is where you can go and get all of those rules. You can use our interactive calculator to see what price of a home you could buy and play with the numbers. Or you can just download the PDF that walks you through all of the checklists that you need to think through to purchase a home in a smart way. All right, Ready for another question?
- [50:56]
Bo Hanson
Yes, ma'am.
- [50:57]
Reby
Julian D. Has a question. It says, I'm starting to talk about finances with my new partner. I haven't seen the details, but she has what sounds like a whole life policy. Worse, she described it as a great deal. What do I do now?
- [51:16]
Brian Preston
Well, I mean, this is. Beau's gonna say it. It depends. Because a lot of times now, Bo, you're gonna have a unique perspective because you worked for one of those big companies that, you know, the first thing to do is say, write down 100 friends and family and start calling Dollar for dollars. Essentially, I will say a lot of, you know, the first answer might not be just cash it in.
- [51:41]
Bo Hanson
Sure.
- [51:42]
Brian Preston
Because if you've had this policy for a few years, you've probably paid all the commissions, but how would you handle this?
- [51:49]
Bo Hanson
Well, it sounds like the question is, this is a new Partner. And we're beginning to talk about finances. Whenever a couple begins to talk about finances, I want to be very careful of you coming in so hard on. I'm right. That's why this question.
- [52:04]
Reby
There's layers, there's the relationship part.
- [52:08]
Bo Hanson
What I think is probably the best approach is to begin the journey of mutual education and mutual investigation. Okay, hey, you have this whole life policy is a great deal. Let's look at it. Let's actually look at the policy. Okay, how does this work? How much does it cost? What. What was the reason you have whole life. Are there people who are dependent upon your income? Is there some reason why you need permanent insurance as opposed to term term insurance? And you just kind of go through this litany of questions to determine, does this policy actually make the most sense for the person who is insured by it? And then you look at, okay, well, what are some other viable alternatives? Okay, well, we really want to have $500,000 of life insurance coverage. What if instead of having a whole life policy, we went and priced out term policy? How much would that cost? Is there a, Is there a difference? Is there a difference in premium price that would allow us to accomplish other things? Oh, wow. Okay, man. I could solve that problem that we were so concerned about by buying the term and potentially taking that, that difference in investing. Okay, well, now what are the best ways to potentially get out of this policy? Is it something we should surrender? Are there tax implications for doing that? Is this a policy that's super, super old and we've made it through the early cost and it's actually a pretty good policy? It's actually a policy that could be decent, but we don't really want to pay any more into it. Maybe we could do something like turn it into like paid up insurance where, okay, maybe it's not going to be worth a full $500,000, but we can do paid up insurance for $180,000 for the rest of my life, and it's just locked in based on the cash value. So there are a few different options that you have, but you have to go through this analysis of, okay, why do we have the policy? What would be the best solution to accomplish the goals that we had when we got the policy? And if we determined that this policy is not the best solution, what are the different alternatives available to me to potentially come up with a solution that is not this policy or to alter this policy so that it better fits with my financial situation? Did I answer that? No.
- [54:06]
Brian Preston
You got the paid up policy that's, that's, that's kind of where I was leaning towards. And then also don't just if there's a need, I always remind people because the, the thing you'll see down the comments when the insurance people come in is they'll say insurable, you know, insurability, you know, because if you have medical issues or something, if you already have an existing policy, don't just immediately cancel because you know, if you, if there's a chance there's a family history, you always want to make sure that you take that into account. Your health profile. And then if there is a need for the insurance and you decide how you look at it, you look at your health profile and you say I do want to replace this. You typically don't cancel the insurance until the replacement policy. If you decide to go term or something like that, go do the term first and then replace the policy or do paid up, you have options but then you always have to look at the taxability. So these are one of those things. That's another, once again, another complexity that we help clients out with is because there's just a lot of moving parts and variables, we try to give you as much as we can on a free show, but a lot of times it is back to the point that personal finance is very personal and we'd have to actually see the numbers to make sure we put you in the right place.
- [55:18]
Reby
Love it. Julian D. Thank you for that question. I hope that helps you think through this conversation and the coming conversations as you start this relationship. And we just really appreciate you being here on the live stream. If you want to continue these conversations in any relationship or in any context that we've covered Today, go to moneyguy.com resources because we have tons of free downloads and calculators that are all designed to help you dig into some of the details of what we've talked about, remind you of what these guidelines and money guy rules are so that you can actually apply them and customize them to your life. So be sure to go check that out. MoneyGuy.com resources and as always will be here every Tuesday at 10am Central answering questions, hanging out on the live stream and talking all things personal finance.
- [56:04]
Brian Preston
So I behaved today. You did you notice I didn't have a lot of inputs? I did actually.
- [56:09]
Reby
Not a lot of tangents.
- [56:10]
Brian Preston
Are we allowed to share the how the anything's about this set or anything? Are we not saying that?
- [56:15]
Bo Hanson
No. Caleb said not a chance. You cannot tell.
- [56:18]
Reby
Too late now.
- [56:18]
Bo Hanson
You can't tell this super exciting thing.
- [56:20]
Brian Preston
You know, here's what I've realized. Look, I've read the comments and people, some people, a lot of you, thank you. Who say, I love bronze tangents. But I realized there's a whole other people, probably my fellow CPAs are like, just give me the facts. And I'm like. So I was like, you know what? I'll wait until the end. That way I reward the people with all the tangents that came to my head while we were doing the show because I noticed we, you know, just a few seconds. So, Caleb, did you give me permission to share?
- [56:46]
Bo Hanson
He said, no, you can't share the very exciting thing happening in the studio.
- [56:50]
Brian Preston
So I get sentimental. No, but I do get sentimental out the fact that this set, which is kind of, you know, this is now our. Is this our third official set?
- [56:59]
Bo Hanson
It depends on how we count the early ones.
- [57:00]
Brian Preston
Because we did. The first one was in a conference room. First one was in a conference room. Bo and I literally breaking it down every time we recorded. And here's what's funny. We were recording a lot of those episodes at night after work. And let me tell you something that I never realized is that if you leave an open line open at night, like just an input line at night, radio waves are so powerful at night. AM radio waves. We actually had an episode that we had to throw away because it picked up AM radio.
- [57:32]
Reby
I still want to know what technology you were using.
- [57:34]
Brian Preston
No, it was on through a sound. I mean, but then it's a known thing.
- [57:38]
Bo Hanson
I would hold the antenna up at night.
- [57:41]
Brian Preston
Radio waves are stronger. That's why you can do Art Bell and all those companies, those guys could do AM broadcast across the country. And you know. Okay, continue on. Second set was the brick set. The brick set was beautiful because it was in this hundred plus year old building. But what y'all didn't know is that thing was a sweat box in the summer and then in the winter it was drafty and cold. So in between takes, we were constantly moving around. Then we got to this set. When we, after we bought the building, we updated the building and this set has been incredible and it's done so well. But we've decided we're going to modernize and even update this set. And that's going to be happening in just a few weeks. So we have maybe, I think two more recordings in this studio and then we're going to have a voila.
- [58:31]
Reby
Yeah, I mean, work will start. You won't see it for a little while. I Do want to say you're not going to see it in a couple weeks. We need a little extra time, but it's coming.
- [58:41]
Brian Preston
That's probably why you didn't want me to tell everybody.
- [58:43]
Reby
No, I mean, you can tell people.
- [58:44]
Brian Preston
And the other thing I was going to share at this point, it's gonna be really good. Did they see any comments on my new scar?
- [58:52]
Bo Hanson
I don't think anyone, I don't think anyone's mentioned.
- [58:54]
Brian Preston
I don't think he's.
- [58:55]
Bo Hanson
I don't think anyone's noticed. I don't think anyone's watching.
- [58:57]
Reby
It's not noticeable.
- [58:58]
Brian Preston
Okay. After we recorded the last time I was recording, I gave myself a full on black eye. Bloody black eye in the middle of the night. So Beau wanted me to share that with you guys for. For clicks, but I. For privacy. I didn't do it.
- [59:14]
Bo Hanson
But here's the thing. He said he's willing to. If 1 million subscribers by the end of the month, by the end of this month here, that he'll put it on social. One million of you guys subscribe. You can see the gnarliest black eye I have ever seen.
- [59:30]
Reby
It was pretty gnarly.
- [59:31]
Brian Preston
Yeah, it was pretty intense. I mean, if you've never had a black eye, let me tell you what's really weird is they run. So you get a black eye up here, but then a week later you're on vacation and this thing is just running around your eye. It's an amazing thing.
- [59:48]
Bo Hanson
It's pretty awesome. I mean, since it all went away, I mean, it's pretty scary when it happened, but it's all pretty cool.
- [59:52]
Brian Preston
Here's the other thing. You know what you do for a living when right after it happens, I'm laying on the floor, blood just, you know, I'm getting it all clean up. My wife goes, at least you recorded today. So I mean, that's where everybody thinks in terms of. At least you got the shows in before.
- [60:07]
Reby
I did think that too. I thought, well, I kind of thought like, oh, that would be crazy if he was on the live stream today with that big black eye.
- [60:13]
Bo Hanson
It was gnarly.
- [60:14]
Brian Preston
It was intense. You weren't okay. I think I've taken enough time. I just, I had to get it out of my system. But you see how disciplined I was and probably only six people were left in the room. But it's okay. Those six people who stayed around, you got rewarded for all the tangents and me being disciplined on that. And here's the thing. There's more to wealth than just the money that you're building up. I want to make sure you're building purpose you're building. Why we love creating this type of content. I'm your Host, Brian Preston, Mr. Bo Hanson, Reby, of course, and the rest of the content team.
- [60:46]
Bo Hanson
MoneyGuy team out the MoneyGuy show is hosted by Bryan Preston and Bo Hanson. Brian and Bo are partners with Abound Wealth Management. Abound Wealth Management is a registered investment advisory firm regulated by the securities and Exchange Commission. In accordance and compliance with the securities laws and regulations, Abound Wealth Management does not render or offer to render personalized investment or tax advice through the Money Guy Show. The information provided is for informational purposes only, may not be suitable for all investors, and does not constitute financial, tax, investment or legal advice. All investments involve a degree of risk, including the risk of loss.