Podcast Summary: Money Guy Show – "Beginner’s Guide To Investing (2025 Edition)"

Release Date: April 11, 2025

In this comprehensive episode of the Money Guy Show, hosts Brian Preston and Bo Hanson delve into the fundamentals of investing, tailored specifically for beginners stepping into the financial markets in 2025. Aimed at demystifying the complexities of investing, the duo offers actionable insights, debunks common myths, and provides strategic guidance to help listeners build and grow their wealth effectively.

1. Introduction to Investing

The episode kicks off with a robust introduction to the world of investing, emphasizing its pivotal role in wealth creation. Bo Hanson expresses his enthusiasm for the topic:

“Investing is the path that most millionaires take to get to wealth. And it is this wonderful, beautiful, amazing thing that you can do where you can actually have your dollars work harder than you do.”
— Bo Hanson [00:12]

Brian Preston shares a personal anecdote about his early career aspirations:

“I knew I wanted my money to work for me. I didn't want to be in this thing all by myself or just my labor.”
— Brian Preston [00:54]

2. Who Should Invest?

Addressing the fundamental question of who should invest, both hosts agree unequivocally:

“Everyone should have the opportunity where their money works just as hard as they do.”
— Brian Preston [03:09]

However, Bo Hanson adds a crucial caveat, stressing the importance of financial preparedness:

“Everyone should be an investor so long as you're at least past step one of the Financial Order of Operations.”
— Bo Hanson [03:09]

They recommend securing emergency funds before venturing into investments, directing listeners to their Financial Order of Operations resource available at moneyguide.com/resources.

3. Debunking Common Investing Myths

The hosts tackle prevalent misconceptions that deter individuals from investing:

• Myth 1: I'm Too Young to Invest

  Brian Preston passionately refutes this myth, highlighting the unparalleled advantage of time in wealth accumulation through compound growth:

  “You are a billionaire of time. Every ounce of your time that you actually put into investing is going to exponentially benefit you.”
  — Brian Preston [04:10]

  Bo Hanson introduces their Wealth Multiplier Tool, encouraging young listeners to explore their potential growth based on age and savings:

  “Being too young is not an appropriate excuse to not invest. It should be one of the number one reasons why you start investing.”
  — Bo Hanson [06:12]

• Myth 2: I'm Too Old to Invest

  Brian Preston counters the notion that age limits investment opportunities, emphasizing that it's never too late to make your money work:

  “Anybody is too old to put their money to work.”
  — Brian Preston [06:48]

  They discuss Target Retirement Index Funds as a solution for investors at any stage, ensuring asset allocation aligns with retirement timelines.

• Myth 3: I'm Too Broke to Invest

  Recognizing financial constraints, Brian Preston advises starting with even minimal contributions, asserting that "something is better than nothing":

  “If you can just save 1%, look at how much this is going to do for your future self.”
  — Brian Preston [09:45]

  Bo Hanson reinforces this by highlighting that investing doesn’t require substantial funds to begin:

  “You don’t have to have a ton of money. You just need something.”
  — Bo Hanson [09:45]

4. What to Invest In

The conversation transitions to the various investment vehicles available to beginners:

• Stocks: Direct ownership in companies like Apple or Nvidia, allowing investors to share in the company's growth.

• Bonds: Loans to companies or governments that pay interest over time.

• Mutual Funds & ETFs: Pooled investment options that offer diversification by bundling multiple assets, making them ideal for those starting with smaller investment amounts.

Brian Preston expresses a particular affinity for Index Funds, citing their simplicity and efficiency:

“Instead of trying to beat the market, why not just be the market.”
— Brian Preston [15:06]

Bo Hanson highlights the impressive historical performance of the S&P 500 Index Fund:

“If you were just buying that one index over that time period, you would have experienced a 538% rate of return.”
— Bo Hanson [16:34]

5. Diversification and Target Retirement Funds

To navigate varying risk tolerances based on age and retirement goals, the hosts introduce Target Retirement Index Funds. These funds automatically adjust asset allocations as the investor approaches their retirement date, simplifying the diversification process.

Brian Preston emphasizes the blend of benefits these funds offer:

“They allow you to take advantage of low cost, tax efficiency, and diversification without all the chaos.”
— Brian Preston [19:53]

6. Where to Invest: Understanding Account Types

Navigating the plethora of investment accounts can be daunting. Bo Hanson and Brian Preston categorize accounts based on their tax treatments:

• Tax-Free Accounts: Includes Roth 401(k)s, Roth IRAs, and Health Savings Accounts (HSAs) that offer tax-free withdrawals in retirement.

• Tax-Deferred Accounts: Traditional 401(k)s, IRAs, and other retirement accounts where taxes are deferred until withdrawal.

• Taxable Accounts: Standard brokerage accounts without specific tax advantages but with more flexibility.

Bo Hanson advises assessing one’s combined marginal tax rate to decide between pre-tax and Roth contributions:

“If your combined marginal tax rates are above 30%, you ought to be doing pre-tax contributions.”
— Bo Hanson [26:07]

Brian Preston adds that younger investors or those with estate planning goals might still benefit from Roth accounts despite higher current tax brackets.

7. When to Invest: The Pitfalls of Market Timing

The hosts vehemently discourage attempts to time the market based on political climates or short-term market fluctuations. They present compelling data to illustrate the dangers of such strategies:

Brian Preston shares a case study comparing two investors, "Panic Pat" and "Manny the Mutant":

“Pat would have accumulated $670,000, but Manny, who stayed consistent, ended up with $1.25 million.”
— Brian Preston [34:31]

Additionally, a historical analysis from 1988 to 2023 demonstrates the significant financial losses incurred by missing just a handful of the best-performing days in the market.

“If you miss 30 days, instead of your investment being over $400,000, it’s down to $71,000.”
— Brian Preston [35:21]

They advocate for a consistent investment approach:

“Always be buying, ABB baby, Always be buying.”
— Bo Hanson [36:14]

8. How Much to Invest: The Primacy of Savings Rate

Addressing the critical question of investment amounts, the hosts highlight that savings rate often outweighs rate of return in determining long-term wealth:

Brian Preston encourages listeners to start investing with whatever they can afford, emphasizing incremental increases:

“Just do something... something is better than nothing.”
— Brian Preston [37:18]

Bo Hanson reinforces this by illustrating how higher savings rates can outperform even investors with exceptional returns:

“If you save 25% with a 10% return, you can outperform someone saving 10% with a 25% return.”
— Bo Hanson [38:07]

They also promote their How Much Should I Save tool, available at moneyguy.com/resources, to help listeners determine optimal savings rates based on their age and financial goals.

9. Conclusion and Key Takeaways

Wrapping up, Brian Preston and Bo Hanson reiterate the simplicity and accessibility of investing when approached with the right strategies and mindset:

“Investing does not have to be complicated. It requires discipline and tuning out the noise.”
— Bo Hanson [41:31]

They encourage listeners to utilize available resources, such as those on moneyguy.com/resources, and consider professional advice as their financial lives grow more complex.

“You can either own your financial life or your financial life will own you.”
— Brian Preston [42:40]

Notable Quotes with Timestamps

• Bo Hanson [00:12]: “Investing is the path that most millionaires take to get to wealth...”

• Brian Preston [03:09]: “Everyone should have the opportunity where their money works just as hard as they do.”

• Brian Preston [04:10]: “You are a billionaire of time...”

• Bo Hanson [06:12]: “Being too young is not an appropriate excuse to not invest.”

• Brian Preston [09:45]: “If you can just save 1%, look at how much this is going to do for your future self.”

• Brian Preston [15:06]: “Instead of trying to beat the market, why not just be the market.”

• Bo Hanson [16:34]: “You would have experienced a 538% rate of return.”

• Bo Hanson [26:07]: “If your combined marginal tax rates are above 30%, you ought to be doing pre-tax contributions.”

• Brian Preston [34:31]: “Pat would have accumulated $670,000, but Manny, who stayed consistent, ended up with $1.25 million.”

• Bo Hanson [36:14]: “Always be buying, ABB baby, Always be buying.”

• Bo Hanson [41:31]: “Investing does not have to be complicated. It requires discipline and tuning out the noise.”

• Brian Preston [42:40]: “You can either own your financial life or your financial life will own you.”

Resources Mentioned

• Financial Order of Operations: moneyguide.com/resources
• Wealth Multiplier Tool: moneyguy.com/resources
• How Much Should I Save Tool: moneyguy.com/resources
• Millionaire Mission Episode: Available on the Money Guy Show platform
• Target Retirement Index Funds: Discussed within the episode for diversified investment strategies

Disclaimer: The hosts, Brian Preston and Bo Hanson, are partners with Abound Wealth Management, a registered investment advisory firm. The information provided in this episode is for informational purposes only and does not constitute personalized financial, tax, investment, or legal advice. All investments involve risk, including the potential loss of principal.