Money Guy Show – August 20, 2025

Episode: Are You Middle Class In Your State? (And Why It Doesn’t Matter)
Hosts: Brian Preston & Bo Hanson

Episode Overview

Brian and Bo dive into the often-discussed topic of "middle class" in America—specifically, what it means to be middle class in your state, and (more importantly) why your income label matters far less than financial behaviors. The episode weaves in practical personal finance tactics, encourages wealth-building mindsets, and fields a variety of listener questions about cars, mortgages, insurance, and more, all with the hosts' characteristic warmth and humor.

Key Discussion Points and Insights

What Does It Mean to Be Middle Class?

[00:52–02:17]

• The hosts reference data from Visual Capitalist and SmartAsset; the range for "middle class" household income varies dramatically by state, from $49,000 (Mississippi) up to $90,000 (Maryland).
• The national average for a "middle class" income is about $69,000.
• Key Question: Does knowing your income bracket actually matter to your financial outcome?

Notable Quote:

"It's not about moving from middle class to upper class. It's about recognizing that there are three key ingredients when it comes to wealth creation. And one of those ingredients is margin." — Bo [03:36]

Why Financial Labels Don’t Define You

[02:17–04:40]

• Brian and Bo emphasize that your financial label is less important than your actions.
• Behaviors—saving, living below your means, and focusing on margin—matter more than hitting a particular income milestone.

"There are times in our life that our incomes were... on the lower side, but that didn't define us at the time. It was more of the behaviors, the discipline..." — Brian [02:37]

Building Wealth: Focus on Margin, Not Just Income

[03:36–05:37]

• Expand the Shovel: Look for opportunities to increase income, but also maximize the gap between spending and earning (the "margin").
• Encourage listeners to pursue side hustles, advance careers, or find ways to create more financial breathing room.

Financial Order of Operations ("FOO"): Your All-Terrain Vehicle

[04:01–04:40, 07:49–10:32]

• The Financial Order of Operations is outlined as a framework for all stages of wealth-building.
• Early steps focus on securing free employer retirement money, avoiding high-interest debt, and building emergency reserves.
• Later steps transition to "hyper-accumulation" (step 7: personalizing wealth-building strategies for your goals) and "prepaid future expenses" (step 8: major non-retirement spending, like college or lifestyle upgrades).

“Personal finance is so personal. There’s a huge difference between somebody who says I’m going to retire at 55 versus somebody who... will work until 65 or 67. Your goals are completely different.” — Brian [09:13]

Listener Q&A Highlights

Hyper-Accumulation vs. Prepaid Future Expenses

[07:27–11:38]

• Step 7 (Hyper-Accumulation): Focused on aggressive, goal-specific investing after maxing standard retirement savings.
• Step 8 (Prepaid Future Expenses): For college, large purchases, or “abundance goals” once financial independence is secure.

Car Buying Rules: When to Pay Cash, When 23/8 Applies

[12:53–17:35]

• 23/8 Rule: 20% down, no more than a 3-year loan, payments <8% of gross monthly income. Not just for new cars; applies to any "new-to-you" vehicle.
• Cash is preferred, but the rule is a responsible fallback for those starting out—or whose savings are focused on wealth-building.

“If you're buying a luxury brand and you're gonna try to use 23/8 to justify it, our opinion is you are buying more car than you can afford.” — Bo [15:51]

Mortgages vs. Investing & The "Dave Ramsey" Straw Man

[20:21–29:12]

• Brian refutes the straw man: investing while having a mortgage ≠ taking out a loan just to invest.
• Advocates a balanced approach: invest early for compounding, don’t rush to pay off a low-interest mortgage if it sacrifices investing.
• The Financial Order of Operations allows for both mortgage payoff and aggressive investing.

“I’m not picking on Dave... But I am here to try to clarify... the earlier you start investing, the better off it will likely be for you in the long term.” — Brian [21:07] & Bo [26:14]

Whole Life Insurance: Keep, Surrender, or Change?

[29:55–37:48]

• There is no one-size-fits-all. Evaluate: policy details, surrender period, and paid-up options.
• Most should favor term insurance for pure protection and direct surplus toward Roth IRAs or other investments.
• Whole life can make sense later in life/for high-earners, but usually not for early-stage savers.

Using Home Equity for a New House

[38:16–41:54]

• Fine to use home equity for a down payment, but keep extra liquidity for unforeseen expenses in a move.
• Prioritize continuing to fund retirement and not letting home value dominate your net worth.

Hitting the Million-Dollar Mark: What’s Next?

[44:23–50:07]

• With $1 million in investments at age 46, consider more personalized, tax-efficient strategies.
• Reasons to seek professional help: complexity, accountability, implementation, contingency for family.

“It’s one thing—we love index target retirement funds—but there is going to come a time... especially crossing into seven figure status, you’re going to be like, man, if I know I’m retiring before 59½, I better make sure I have access to some capital that’s not penalized...” — Brian [46:38]

The Most Overlooked Financial Step for 30-Somethings?

[52:06–56:16]

• Bo: Replenishing emergency funds (step 4 of FOO) is often missed in the “messy middle” of adulthood.
• Brian: High-interest debt (step 3) can snare the general population, but for financial “mutants,” keeping margins and cash reserves is key.

Memorable Moments & Quotes

• “Behavior is likely much more important, much greater than your income.” — Bo [04:40]
• “If paying cash would cause you to deviate from your other long term financial goals, then we allow you to do 23/8...” — Bo [15:32]
• Genuine laughs, workshop-style banter about merch (tumbler vs. hats) [43:00–44:08]
• Honesty about personal failings (Brian’s garage door saga) as an analogy for financial procrastination [47:46–51:14]

Timestamps for Key Segments

• [00:52] – What “middle class” means by state
• [02:17] – Why labels don’t matter; focus on behavior
• [03:36] – Increase your margin: income-boosting strategies
• [04:01] – FOO: The basics and why they matter
• [07:27] – Step 7 vs. Step 8 of FOO explained
• [12:53] – When (not) to use 23/8 for car buying
• [20:21] – Mortgage vs. investing and Dave Ramsey’s straw man
• [29:55] – Whole life insurance: Should I keep it?
• [38:16] – Using home equity as a down payment
• [44:23] – What to do after reaching $1M in savings
• [52:06] – The most-overlooked FOO step for 30-somethings

Closing Thoughts

Brian and Bo challenge listeners to look past arbitrary income categories and instead focus on disciplined financial behaviors and margin creation. The conversation closes with encouragement to leverage financial education, community, and consistent annual reviews—and an abundance-mindset approach to building wealth.

For free downloadable resources mentioned (Financial Order of Operations, savings guides, etc.), visit moneyguy.com/resources.