Buy Now Pay Later: The Data Revealed

Summary

Podcast Summary: Money Guy Show

Episode: Buy Now, Pay Later: The Data Revealed

Date: May 6, 2026
Hosts: Brian Preston & Bo Hanson

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Main Theme

This episode explores the rise and risks of "Buy Now, Pay Later" (BNPL) services and how they can undermine long-term wealth building, especially among younger generations. Brian and Bo dissect the data, share their personal experiences, and offer tactical strategies to avoid BNPL pitfalls in favor of intentional, future-focused financial decisions. They engage the Money Guy community with actionable advice and answers to live audience questions on related personal finance topics.

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Key Discussion Points & Insights

1. The BNPL Trap: More Harm than Help

• BNPL Explained: It allows consumers to split payments for goods/services into installments, often marketed as interest-free (02:51).
• Contrast with Credit Cards: While similar to credit, BNPL is promoted for day-to-day and large purchases with the lure of no interest.
• Widespread Use: 33% of U.S. adults used BNPL for large purchases in 2025; 23% used it for daily items like groceries and gas (02:51, 04:09).

Quote (Bo Hansen, 04:09):
“23% of US adults, so almost one in four, actually use it for daily purchases, things like groceries, things like gas, not large one time, singular purchases. And if you're doing that, that makes me really, really, really nervous.”

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2. BNPL's Impact on Wealth Building

• Deferred Payments Create a False Sense of Affordability: Small, repeated BNPL purchases can stack up, creating a web of ongoing obligations and hurting savings/investing efforts (05:56).
• Younger Generations at Risk: 49% of Gen Z and millennials use or plan to use BNPL in 2026—those with the “billionaire of time” advantage are most susceptible (04:46).
• Lost Compound Growth Opportunity: Instead of using time to multiply wealth, users trade long-term gains for short-term consumption.

Quote (Bo Hansen, 06:13):
“Rather than stacking up those future payments, I could actually take advantage of the wealth multiplier. Every single dollar that I can deploy, every single dollar that I can put to work and not consume has the ability to turn into $44 by the time that I retire if I'm a 25-year-old.”

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3. Behavioral Economics & Consumption Traps

• Increased Consumption: 85% of BNPL users spend more than if they had paid cash (07:13).
• Intentionality Is Key: Most financial innovations are designed for company profit, not consumer benefit. Be wary of offers designed to increase spending (07:57).

Quote (Brian Preston, 07:13):
“85% of users are actually having a higher—you know, they're spending more than if they had just paid cash... one of those things, if you are already struggling with some form of discipline... [BNPL] is not going to put you where you want to be.”

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4. Strategies for Avoiding BNPL and Building Real Wealth

• Live Below Your Means: The core principle to building wealth is to spend less than you earn (04:46).
• Set Up Sinking Funds: For large purchases, create dedicated savings accounts, use high-yield savings for planned expenses (08:44).
• Future Value of Money: Saving and investing today can multiply your dollars many-fold by retirement.

Quote (Bo Hansen, 09:13):
"Rather than having yourself tomorrow pay for something you consume today, have yourself today save for something you can consume in the future... When we save for the Future, we let $1 turn into $88."

• Be a Guide: Share insights with friends/family who might fall for BNPL traps—be the “guiding light” (09:50).

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5. Practical Q&A Highlights: Personal Finance Scenarios

Sinking Funds for Car Purchase (21:59)

• Strategy: If a major expense is 7 years away, consider a mix of brokerage (index funds) and high-yield savings to balance risk and opportunity (22:14-23:12).

When to Hire a Financial Advisor (24:14)

• Three Triggers:
  1. Gravity—Decision stakes are high.
  2. Complexity—Life/portfolio has become complicated.
  3. Time—You're too busy to handle important financial matters (25:41).

Leasing vs. Buying a Car (35:58)

• General Rule: Leasing is only justifiable at an advanced financial stage (step 8 of Money Guy's order).
• Exception: If you habitually change cars every 2-3 years, leasing may be less harmful than repeatedly buying new and absorbing max depreciation.
• Advice for Early Steps: Avoid leasing; buy the most reliable, affordable vehicle you can (39:58).

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Important Timestamps

• BNPL dangers and data: 01:03 – 05:56
• Wealth multiplier & opportunity cost: 05:56 – 07:13
• Behavioral traps of BNPL: 07:13 – 08:44
• Action steps against BNPL: 08:44 – 09:50
• Live Q&A: Car sinking funds, advisors, house buying, etc.: 21:59 – 57:17
• Rapid Fire (“It Does Not Depend”) Q&A: 41:29 – 52:59

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Notable Quotes & Moments

• Brian Preston, 01:51:
  “Sometimes there are things that make me feel like the system is designed to try to keep you poor. It does bother me... all the innovation that's going on in banking... seems to be making it easier for you to waste money on stuff.”

• Bo Hansen, 09:13:
  “Have yourself today save for something you can consume in the future. That's what we're all doing when we save for the future, we let $1 turn into $88.”

• Brian Preston, 29:09 (on resource download):
  “It is cool when you see articles written on some of the research and content deliverables that you do and you're like, all right, this is connecting.”

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Tone & Style

Upbeat, practical, and sometimes humorous, the hosts use real-life analogies and personal stories (even discussing pork rinds and working out) to make personal finance relatable and accessible.

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Summarized Takeaways

• BNPL is NOT your friend: It is designed to promote spending and can seriously harm your financial future by luring you into multiple, stacked, recurring payments.
• Younger generations are at greatest risk: Don’t sacrifice your wealth-building window for short-term gratification.
• Behavioral traps are real: Most financial innovations are more about increasing industry profits than helping your finances.
• Use intentional systems: Sinking funds, high-yield savings, and pre-committed investments are your tools for success.
• Share financial wisdom: Use your knowledge to help loved ones avoid common financial traps.
• Celebrate and optimize milestones: Take a strategic and measured approach as your financial situation evolves, including hiring advisors and making big purchases.

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Additional Resources

• MoneyGuy.com/resources: For calculators, checklists (including home buying and wealth multiplier), and other free financial planning tools.
• BNPL calculators and guides: Available on MoneyGuy’s site for deeper exploration.

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Final Word:
“If you can recognize how powerful your dollars are based on your age and your stage of life, it’ll change the way you think about consuming and saving.” – Bo Hansen (09:13)

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Stay tuned and be a financial mutant: Avoid traps, help others, and keep building confidence for a more fulfilled financial life.

Transcript

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[Brian Preston]

This financial crutch can lead to devastation.

[Bo Hansen]

Brian I am so excited to talk about this because I think it is something that the world needs to hear right now. Because, you know, in our world, in the world of personal finance, there are all sorts of tools and some of those tools are incredibly valuable and incredibly helpful. You know, one would be like a mortgage. A lot of people can't go pay for their house outright in cash, so they end up taking out a mortgage and borrowing money to do that. That's great. That's noble. That's a tool that can be used, can be used correctly. But there's another and I'm going to use tool in air quotes. There's another tool right now that a lot of people are using that I don't think is beneficial for them or for society as a whole.

[Brian Preston]

Hey listen, when we talk about sometimes there are things that make me feel like the system is designed to try to keep you poor. It does bother me when all the innovation that's going on in banking and consumption seems to be making it easier for you to waste money on stuff. Not not on necessarily on saving or building wealth. It's on how do we get more of your hard earned money into consumption. And if you didn't know, we're talking about bank buy now, pay later. But look, a lot of you right now, you're like, oh, you breathe out. You're like, I don't struggle with that because I can see where the trap is. Even though they put pine straw on it, I see the trap right there. You're right. You probably, as a financial mutant do see this trap. But Your friends, your family members, your peers, when we share some of these stats. So I beg of you, please pay attention, lean in, write notes. Because you might be the lifeline that keeps your friends and family safe from this trap, that they don't see the pine straw like you do.

[Bo Hansen]

Yeah. And if you've, if you've been living on a rock, buy now, pay later is exactly what it sounds like. You buy a good, you order a good, you check out with a good or service and rather than paying for it all up front today, you get to pay for it in installments in the future. Now it's a little bit different than credit cards and that sort of thing because supposedly interest does not accrue. So it's a different type of transaction. But what's interesting is we look at the data. This is according to Northwestern Mutual, 33% of U.S. adults used buy now, pay later options when making large purchases in 2025. So while it may not be widespread necessarily amongst financial mutants, one in three Americans last year were using it. I don't know about you Brian, but I feel like every single time I check out on something, no matter what it is, I'm offered the option.

[Brian Preston]

It's even worse when I go to pay my credit card bill. You know, I pay it seems like twice a month because I'm always so just want to make sure I don't have any interest carry costs. It never fails me that recently specifically I noticed that Chase is doing it for sure is that they'll have, hey, this transaction right here, you sure you don't want to spread that payment out over a few months? And you're like, come on guys, you know, let's get this thing paid off. Let's let it not run into any traps on the consumption side of things.

[Bo Hansen]

And so I imagine what, what financial mutants are thinking in their mind is o there's an arbitrage I can take advantage of if I'm going to buy this large purchase. If I'm one of these one in three Americans doing this large purchase, then maybe buy now, pay later is a way for me to game the system, beat the system. But if you dig into the deep, into the data a little bit deeper, 23% of US adults, so almost one in four actually use it for daily purchases, things like groceries, things like gas, not large one time, singular purchases. And if you're doing that, that makes me really, really, really nervous.

[Brian Preston]

Yeah, I mean think about it like if you are literally turning your tank of gas into four payments or installments, you're deferring the payment on just day to day consumption items. It's your lifestyle. And that's a, that's a big problem because remember, the secret to wealth building is you have to live on less than you make. So if you have things that are amping up your consumption and it is working against the long term wealth building. And you know, the previous slide we showed was it's 33, 33% for large. But here's what's scary. I don't know how many people are like me. We're just, we've aged out and we see this for the trap that it is. Because when you look at the stat that 49% of Gen Z and millennials, they will use this, are plan to use this in 2026, that is what really scares me. Because if you want to know who has the world by its tail, I know despite what's out there in the financial media, it's people that have the component of time where you're literally a billionaire of time. You can do anything if you've just point that power of time and your resources in the right direction. Compounding growth will change your future self.

[Bo Hansen]

What I think frustrates me is that it starts so simple. Okay, I'm going to buy now, pay later this one thing and I'm going to have these four payments into the future. Then I'm going to do it again, and I'm going to do again. So as my timeline goes further and further out, I just end up stacking these payments, stacking these payments, stacking these payments that all of a sudden I've got 100 different payments moving in 100 different directions, not recognizing that if I were to flip the script on that and I were to actually take advantage if I'm a young person, if I'm a millennial, if I'm a Gen Z, take advantage of time that's on my side. Rather than stacking up those future payments, I could actually take advantage of the wealth multiplier. I could recognize that, okay, instead of me Spreading out this $20 purchase over the next four months, I could take this $20 purchase buy in cash today and the next month I'm going to put some money to work. I'm going to have that operating form and if I'm a 25 year old, every single dollar that I can deploy, every single dollar that I can put to work and not consume has the ability to turn into $44 by the time that I retire. If I'm a millennial and I'm 35 years old. Every single dollar I put to work can turn into almost $13 by the time that I retire. If all I'm doing is stacking up my future payments, I'm missing out on this wealth building opportunity.

[Brian Preston]

Well, look, we, I feel like we already have a lot of slack in the system because we, you know, credit card use is okay for us. It's just a credit card debt that has the no way because we don't want to pay the crazy interest rates. But it is one of those things, I think that we all need to be aware Buy Now Pay Later a lot of research on the behavioral side of things. 85% of users are actually having a higher. You know, they're spending more than if they had just paid cash for this or some other structure. So just be aware that this is one of those things. If you are already struggling with some form of discipline where you're not hitting your savings or investment rate right where you want to. I don't know that the innovation of using Buy Now Pay later is going to be the thing that's going to put you where you want to be.

[Bo Hansen]

Yeah, this falls into the camp for me of just because I can doesn't mean that I should. Just because I could spread this out doesn't mean that spreading this out is what's going to be in my best interest, even the best decision. So what are some key takeaways? What are some things that we want you to be aware of? Well, when it comes to making consumption decisions, when you're checking out, when you're spending your dollars, recognize that most of these things are not built with your best interest in mind. Most of these things are built with a profit motive and, and interest in mind that if you make a poor decision, it works out better for the company that convince you to do that. So be careful. Falling prey to these consumer traps, they exist for a reason and that reason is not unprofitable to the company that's offering.

[Brian Preston]

And we want you to be intentional with every purchase. Look, on the day to day things I made the, you know, I made the example of the if you're using Buy now pay later for a tank of gas, that's a consumption decision. We don't want you stretching that out. And for big purchases, be intentional in the fact that you can have sinking funds, there's nothing wrong that says let's set up a lot of your banks online. Banks specifically will allow you to start allocating the money out and still let it be invested in a High Yield Savings Account. You can be intentional even with the

[Bo Hansen]

big purchases and then recognize the future power of your dollars. Rather than having yourself tomorrow pay for something you consume today, have yourself today save for something that you can consume in the future. That's what we're all doing. When we save for the Future, we let $1 turn into $88. We're making the decision, instead of me spending $1 today, I'd rather have the opportunity to spend $88 in the future. So if you can recognize how powerful that is based on your age and your stage of life, it'll change the way that you think about consuming and

[Brian Preston]

you be part of the change, be the solution for your friends and family. I know when we do content like this that a lot of my financial mutants, this is not you, but you are still the audience because you can still have the heart of an educator and be the guiding light for your friends and family so they don't fall into a prey. And if you fall prey to this, and then if you need stuff to help you kind of teaching tools or the teacher's manual, go to moneyguy.com resources we have the wealth multiplier calculator. We got graphics attached to this, animations. It can be really motivating so that you can, you know, not only use the education you're sharing with your friends and family, but also let them see what their army of dollars are actually worth.

[Bo Hansen]

There is a better way to do money. One of the best things you can do for your dollars is subscribe right now to the channel so that every time we put out brand new free content, you are aware of that and it lets us know that you're sitting out there because we want to know where you guys are. We love showing up right here at 10am every Tuesday morning, answering your questions, loading you up. There are things that you want to get our take on and we want to give you that take. So if you have a question right now, we have the team out in the wings collecting your questions. We believe there's a better way to do money. So get your question in the chat right now with that creative director, Ruby. I'm going to throw it over to you, Brian. I think one of the biggest surprises when you start a business is realizing you're responsible for every everything.

[Brian (Shopify Segment)]

That's exactly right. At the beginning. You're the marketing department, operations, hr, customer service, all of it.

[Bo Hansen]

Yeah. And it can be exhausting if you don't have the right systems in place, which is why having the right Tools and the right partner can be a game changer. That is where Shopify comes in.

[Brian (Shopify Segment)]

Shopify is the commerce platform behind millions of businesses around the world and 10% of all e commerce in the US from startups to popular brands like Allbirds and Untuck it and they help you

[Bo Hansen]

get up and running fast. You can build a great looking online store with ready to use templates and their AI tools can handle things like product descriptions and even improving your product images.

[Brian (Shopify Segment)]

Shopify can even help with the email campaigns and social media so you can actually reach customers instead of just building something and hoping people find it.

[Bo Hansen]

And everything from inventory to payments to analytics is all there in one place. So you're not wasting time trying to connect a bunch of different tools. And that's huge because it means you can spend less time on the mundane tasks and more time building something meaningful.

[Brian (Shopify Segment)]

So start your business today with the industry's business. Best business partner Shopify and start hearing. Sign up for your $1 per month trial at shopify.com money guy go to

[Bo Hansen]

shopify.com moneyguy that's shopify.com moneyguy yeah, you

[Brian Preston]

know what I noticed?

[Ruby (Creative Director)]

Questions?

[Brian Preston]

Yes, Bo says the same thing every week, but it really is wings. If you think about it like we have the wing over here and then we got the wing over here with the, the, the guys running the boards and then they're in the pilot's seat right there with the yolk in hand.

[Ruby (Creative Director)]

That was very literal.

[Bo Hansen]

I mean it's literally.

[Brian Preston]

I mean, because he does, he says the wings.

[Bo Hansen]

But if she's, if she's in the pilot seat and these are the wings, that means me and you're over here in the bathroom. No, no, we're in first class.

[Brian Preston]

First class.

[Bo Hansen]

Are you kidding me? We're sitting right behind the.

[Brian Preston]

This is the first class seats. These are lay flat seats.

[Bo Hansen]

Yeah. I love it.

[Ruby (Creative Director)]

Interesting. Interesting.

[Brian Preston]

Can you tell I'm going on vacation after this?

[Ruby (Creative Director)]

I was thinking we were talking in theater terms. You know, in the wings of the stage. That is an actual production.

[Bo Hansen]

That's where the actual expression comes from.

[Ruby (Creative Director)]

It's a legitimate.

[Bo Hansen]

I don't think it's an airplane express. It may be an aviation.

[Brian Preston]

I like the literal. I'm sure you're right. But it's okay in my, in the way my brain works. I had a whole nother way that

[Ruby (Creative Director)]

this is the way our money guy team in the wings of an airplane or of a production show.

[Brian Preston]

Let me. I like thinking Bo and I are in first class and you're flying the

[Ruby (Creative Director)]

plane and I'm flying the flight. I'm very honored, first of all. Okay, moving on from that, we do have some questions queued up. So get your questions in the chat. The first one is from Ken. It says, my company just announced they are going public. We have the opportunity to participate in a Founders Equity Day program. What are some yes and nos or things to watch out for?

[Bo Hansen]

Well, so this is, this is exciting. Let me kind of explain what's going on here. Ken works for a company that's owned by some private individuals or a private entity. And they said, you know what, we now want to be traded on a public stock exchange. We want to have a stock ticker similar to the way you think about like an Apple or a Home Depot or a Google or something like that. And since Ken works for them while they're a private company, he has the option, it sounds like where they're going to be able to buy in and participate in this initial public offering when they initially issue those shares out. And so for a lot of people, this can be an incredibly exciting thing. And a lot of folks have become very, very wealthy by having founder shares pre IPO for a publicly traded company. But I do love that Ken's asking the question, hey, what are some things I should think about? What are some things that I should be aware of and how can I decide and figure out does this actually make sense for me and my family?

[Brian Preston]

Well, there's a few things I'll write. I'll say the two quick things that popped in my mind. Well, I have a bunch of things. I'll go through these too. You know, a lot of times with your. When you have an IPO from the company and they're offering you this opportunity, you need to know what trading restrictions or trading windows you're going to have. Because a lot of people get super excited about IPOs. And as I've seen employees struggle with this is that, you know, the stock goes public and even if you play best case scenario and it pops, it goes way up, you can't sell like everybody else. Usually you're kind of restricted on that. And it's not uncommon that when the window opens and it's like everybody jumps off the boat at the same time that you get crushed. You know, like, how is this not a pump and dump? That's why, you know, you need to pay attention to what your, your, your trading windows. And that leads to the bigger things. When in doubt, zoom out. What do you really think about this company now? You already have your human capital, meaning you work for this company. But now that you're about to put some investment capital into it, is this part of your permanent portfolio or is it. Not that I don't. I just want you to go through that analysis. I'm not really saying to make this part of your permanent portfolio because that's going to be. The next thing is we're going to say, hey, get rid of a portion of it once you, you can, because you have so much human capital tied into it. But you do need to say, is this more sizzle or is there actually foundationally, this is a great company and this would be a great opportunity so that I can weather whatever crazy volatility happens during these IPO windows.

[Bo Hansen]

The other thing that I would ask in your specific situation is where am I in the financial order of operation? Probably hold that thing up for me. If you have a solid financial foundation and you have been following the steps and you've been building up a solid financial base, this may be an area where you want to take advantage of. But if you have a lot of like high interest debt out there, or you don't have a fully funded emergency reserve, or you don't have adequate dollars flowing into retirement accounts like health savings accounts or Roth IRAs, this may be premature for you. And what I want to see you do is get a lot of your capital invested in something that may not be liquid for a certain period of time when there are other stuff, other things that you should have been checking the box on. So I'd make sure that if you are going to participate, that you're at the stage of your financial journey where participation makes sense.

[Ruby (Creative Director)]

Fantastic. Well, Ken, thank you for your question. Appreciate you being here. We're going to go to Connor's question next. It says at what point does the benefit of tax diversification, Roth plus taxable, outweigh the immediate tax savings of traditional 401k contributions for high earners trying to catch up.

[Brian Preston]

All right, so I got two answers.

[Bo Hansen]

Okay, go. Yep, you do.

[Brian Preston]

There's two things that there's. There's really two things. You've got two levers. You gotta be paying attention to your current tax situation tied into your overall long term tax outlook. So, and that's why, if you notice we have slides that we pull up all the time, is that if you're young, in a low tax situation, because you're not in your peak earning years, that leads to like Roth Savings, it's pretty easy to do a Roth 401k so you can really maximize the tax free compounding growth. But if you're a person that's in peak earning years and you're paying close to half of your money of what you earn to taxes, both local as well as federal, then we got to think about that. Because maybe when you take your earned income off the table in a retirement, you might have a tax arbitrage situation where you could do Roth conversions or other things. And then the other part is it needs to be goals driven. That's why we have step seven of the financial order of operations is because so much of the early stages is taking advantage of all the tax opportunities that the government's built into our tax policies to incentivize you to save. It's when you get to step seven that says, hey, wait a minute, if you're part of the fire slash fine movement, you want to move on to a next endeavor and change jobs and have options to use your army of dollar bills, we better make sure we pay attention to the structure or makeup of each of these accounts so that we can actually fulfill those goals and have access to them.

[Bo Hansen]

Yeah, I wrote down two things and it's sort of an egg of what you said. When do you need the dollars? If you are doing like an early retirement thing, you need access and having an after tax account, maybe something that's incredibly valuable so you can get those dollars. And then the second thing I put is what's the ultimate purpose of the dollars? We have a number of clients that reach this position where we recognize that their qualified accounts are going to be so large that even with the tax planning we plan to do at financial independence at retirement, we're still going to have an issue of being able to convert dollars for long enough. And ultimately the reason why they might switch to building up the Roth dollars is more about legacy planning than it is about their own financial planning. So when you think about the dollars that you're saving, okay, I could get this current year tax benefit, but based on my financial circumstances, based on where I'm going to pull my dollars, based on the money I'm going to need to use, it's more advantageous for me to build up Roth dollars so that this is something I'm thinking for the next generation, something I'm building up there. So when will you need the dollars and then what's the purpose of the dollars? I think answering those questions will dictate when you should switch. And I should think about switching from pre tax to not exclusively prevent tax. Bless you yes.

[Ruby (Creative Director)]

Bless you.

[Bo Hansen]

You startled us all with your name immediately.

[Ruby (Creative Director)]

Well, Connor, thank you for the question. Remember, or I guess I'm telling you now. We are doing rapid fire today. The it does not depend rapid fire segment that will be coming up a little later in the show, probably between the 30 to 40 minute mark. So if you're watching live, add your rapid fire questions to the chat. Just make sure to put RF for rapid fire at the beginning. So we know that you want to be a part of that. So get those questions in. And in the meantime, we're going to keep answering your questions just at a normal speed.

[Bo Hansen]

Can I ask a question?

[Ruby (Creative Director)]

Sure.

[Bo Hansen]

You know, we. We announced and launched our brand new deliverable. We did last week. Can we do a poll? Has everyone checked it out? Did you guys go out and download that delivery? Because we are super, super excited. We even got some press on it this past week. There were some large institutions that grabbed it and kind of did a little write up on it which was super cool. We put a lot of work into it. If you've not checked out how much should you Save? Go to moneyguy.com resources. Download your free copy right now and let us know what you think because it's something we spend a lot of time thinking through to hopefully be super valuable for you guys. That part was for free.

[Ruby (Creative Director)]

Oh, I love it. Moneyguy.com resources definitely check out. How much should you save? All right, ready for another question? Let's do it. Kai Gunto230 says I'm about to pay off my 23,8 loan and I want to pay cash for a car in seven years. What's the most optimized way to do a sinking fund? High yield savings account or brokerage? If brokerage. When and how do I exit the market?

[Brian Preston]

See, Kai's got us a little bit because he said seven years.

[Ruby (Creative Director)]

I know it's right on that cusp.

[Brian Preston]

I mean that is getting on out there to where you know, this is gonna be a more of a diversified answer than just saying go straight cash.

[Bo Hansen]

I'll tell you what I would do if this were me. This is. So you write this in pencil. Cause this is sort of like an opinion here. I'd probably go sort of a half and half strategy, right? Like if I know that I want to pay cash the car in seven years, I'm going to save up. You know, I'm gonna do my time value money calculation, figure out how much I need to save up and I might have half of it go into a brokerage account, low cost index funds, half of it going to high yield savings account. Because I know realistically a lot of stuff changes over the course of seven years. I might get pay raises, I might get bonuses, my expenses might decrease, I might have other capital inflows that take place. So I want to be careful being all or nothing one way or the other. But I do think seven years is far enough out there that a sinking fund in pure cash, pure high yield money market, you're going to miss some opportunity there. But I also don't want to go hog wild and have all of, in a brokerage account and then in the moment when my car dies or when I need to replace it, the market's not at a great spot. I kind of like the 5050 approach.

[Brian Preston]

So let me, let me put it because I think Bose answers right on. So I would say if you, if you have the need for the car within the next three years, it's, it's a no brainer to do High Yield Savings Account cash only. That three to five years starts to become a gray zone where you can start introducing, you know, maybe we take, you know, 20%, 30% into investments five years and beyond. Now you're kind of in the territory where BO is on solid ground is that I think it's okay to have a balanced approach to where you have half of it in investments or index funds and then you can do half of it in liquid investments. That way just in case you have some flexibility in case decisions are forced upon you sooner than you planned, you're going to be able to weather it. Whether that comes in as the car breaks down in the next few years or even in the next three years, you have some market volatility, you have enough time frame, it's going to be a. Okay.

[Ruby (Creative Director)]

Feel good about that?

[Bo Hansen]

Good, love it. How's it?

[Ruby (Creative Director)]

Good question. Kai gunto230 all right, let's move on to Newberry Charles. His question is when's the point you should get a financial advisor? I just hit 1 million net worth this week.

[Bo Hansen]

Oh, congratulations to Comma club and I

[Ruby (Creative Director)]

want to thank you guys for that too. Been a blessing to learn from you all. Very kind but big milestone and we always talk about hitting these milestones, investing milestones, cash flow milestones. We've even got some shows coming up on that soon. So make sure you're subscribed here on YouTube. But what would you say to Newbery Charles? When should he think about hiring a financial advisor?

[Brian Preston]

Bo, you know there's a big difference between 1 million net worth and 1 million of investable assets. How does that shape the answer?

[Bo Hansen]

Yeah, because if you have a, if you had a million dollar net worth and 800,000, $700,000, if it's a liquid portfolio with different account types, different account structures, then I'd argue potentially a financial advisor makes sense. But maybe you hit a million dollar net worth and it's because you bought a home and you're in a high cost living area where the value of homes have gone up substantially. And so your $400,000 house turned into an $800,000 house. And there's not, not there's anything wrong with that, but that's a different level and different component of complexity than the other one. And so generally we say that it makes sense to hire a financial advisor when one of three things happen. Can I say the three things?

[Brian Preston]

Yeah, go ahead, go through the three things.

[Bo Hansen]

When one of three things happen. Number one, the gravity of your financial decisions is greater than you feel like navigating on your own. Meaning, man, okay, if I made a, if I made a 10% boo boo on $100,000, maybe it doesn't change my life, but I make a 10% boo boo on a million dollar net worth, well, now it's substantial. I just want to make sure, I want to make sure that I'm not missing anything. The second point is I just don't know what I don't know. Life has gotten complicated. My taxes are more complicated, my portfolio structure is more complicated. I have access to more accounts, whatever that thing may be. In your world, complexity is entered in and you're just nervous. I want to make sure that I know what I'm supposed to be doing and I'm not doing the things I'm not supposed to be doing. So there's like a complexity opponent. So number one is gravity, number two is complexity, and then number three is time. Often in our lives, as our financial, as our lives take shape, the important financial matters tend to fall to the back burner. Oh man, I'm in the messy middle and I know I should get life insurance, but gosh, I can't reach out to the agent or I know I need to do my estate documents, or I haven't rebalanced my portfolio in the last seven years just because I don't have time to look at it. If you find that really important financial matters are falling on the back burner, a good financial advisor can help keep the important stuff in front of you. So if you find yourself in one of those three areas or potentially all of those three areas simultaneously, that might be an indication that you should reach out to an advisor. So does that mean, hey, as soon as I hit a million dollar net worth, I have to have a financial advisor? No, not, not, not at all. And there are a lot of people who will never hire a financial advisor. And I'd argue that's okay. You'll have to decide for yourself. Okay, could I get value or is this something where I would have a greater sense of peace and a higher confidence in my future financial security by having a personal CFO on my side?

[Brian Preston]

And Charles, if you realize, hey, I think, I think I qualify or I definitely see a needle, I'd encourage you to go to moneyguy.com resources. We have the eight questions you should ask anybody you're considering for financial advisors. Because by the way, we're not all created equally. We just did a react recently where I was like, there's a huge difference between an investment advisor who's only just helping you shape allocation versus a full financial planner who's impacting all parts of your life, whether it's education, planning for the kids, retirement planning, estate planning, taxes going through. I mean, I feel like we pay for a lot of our fees by just not doing the tax return, but just making sure that all of your wishes are fulfilled or it's done or recorded correctly when you're filing those annual tax returns. That's the type of stuff that a financial planner should be doing for you. It's outside of even the investments so that you're getting that extra, what we like to call the alpha and the gamma and all the things that when you do look into the research on it, that a good financial advisor actually adds a lot of value to your life and frees up more time.

[Ruby (Creative Director)]

Love that, Love that. Update on our poll from the YouTube live chat. Have you seen our latest resource? We asked? 61% said, of course.

[Brian Preston]

Nice.

[Ruby (Creative Director)]

Gone and downloaded it. 39% said, going to check it out now.

[Bo Hansen]

Let's go.

[Ruby (Creative Director)]

That's what we like to hear.

[Bo Hansen]

But don't leave the stream. Do it, you know, check it out on a do tab and then come back and hang out with us.

[Ruby (Creative Director)]

Yeah. Oh, you can absolutely do that. But yeah, we're very excited about that resource. I'm, I think it's very powerful and very interesting.

[Brian Preston]

It is cool when you see articles written on some of the research and content deliverables that you do and you're like, all right, this is connecting. It's connecting with the general public. And I think, because the thing I like about this one because we've always been pretty consistent with the 25% savings rate, but we've known that the flaw in it was that for somebody who starts super early, you have such a powerful component of your army of dollars. Because time, being a billionaire of time, I didn't like it saying in the old version that you have 157%. What I like about this is this rubber meets the road is if you're starting early, this tells you, hey, maybe your savings rate goes as low as 15% in some situations or even 10%, but if you're somebody who kind of procrastinated, this is going to give you the tough love that you need. So it kind of meets you right where you are.

[Bo Hansen]

Yeah, I like that. It's not discouraging. A lot of people are saying, because we'll talk to 20 year olds like, guys, I love your stuff, but I'm never going to hit 25% so why should I even start? That was one of the biggest impetuses for us impeti is that the plural of impetus is implementing. No, I was looking for the plural of impetus, like multiple. That was one of the many reasons.

[Brian Preston]

That's an SAT word.

[Bo Hansen]

It was one of the many reasons

[Brian Preston]

I'm good at math.

[Bo Hansen]

It was one of the many reasons we did this one. Because we don't ever want building wealth to be discouraging. No matter where you are, no matter where you started from, the way your journey begins does not define the way that it ends. And we think this deliverable really shows that it doesn't take a whole lot if you can figure it out early. And that's. I'm excited that we now have one

[Brian Preston]

that shows that, listen, you and I both eat pork. Eat. Eat pork rinds.

[Bo Hansen]

Yeah, we do.

[Brian Preston]

We don't say the words empathize or whatever that is. That's not a pork rind type.

[Bo Hansen]

That's not a pork rind vocabulary.

[Brian Preston]

By the way, I love pork rinds, so that's not a compliment or cut if you like pork rinds yourself. I'm just saying that we're just everyday folks.

[Bo Hansen]

Yeah, I try to, I'm like, I'm trying to like eat healthier and do that kind of stuff. And I really, I can, I know too much. I convince myself that like, like pork rind. Oh. Like it's like a healthy snack because it's like protein. Right. I don't think it's healthy. I don't think pork rinds are good for me.

[Brian Preston]

My favorite thing is that I went to. These are like, I have a friend and he loves his. His, like, conversation starter is things that rich people and ultra poor people have in common.

[Bo Hansen]

Okay.

[Brian Preston]

And there's some funny things if you've seen people go on that. That line of thinking. But I actually had an experience where my wife and I were doing a staycation at the Hilton Conrad in Nashville.

[Bo Hansen]

Okay.

[Brian Preston]

And you know how these. These bougie fancy hotels or restaurants will do things sometimes you're like, huh. I'm on their, like, thing that they brought out that, you know, to open the meal were like fancy versions of pork rinds. And then when I was out in Vegas, we had a dinner and we were at some, like, meat heavy restaurant and they brought out pork rinds. And I was like, these are. They don't call them pork rinds, by the way.

[Bo Hansen]

Right, right, right.

[Brian Preston]

It's kind of like grits and polenta. You know, they're all related, but it's. But they don't call it. But if you. If you. If you know, you know, there's. That's a poor crime.

[Bo Hansen]

Whenever I see fried baloney on a. On a menu, I'm like, I've.

[Brian Preston]

Okay, now you might have actually broken the system. Is that they have not. Fancy people have not. I don't think I'm still. I don't think. I don't think fried baloney has cracked the hollowed hallways of. Of being what wealthy people do.

[Bo Hansen]

I know when I was a kid, that was like a big.

[Brian Preston]

That's like a good Roberts. If you go. If you go into the honky tonks in Nashville, you still go to the recession special, and they will get you a fried bologna sandwich, I think, at Roberts.

[Bo Hansen]

Have you ever had fried bologna before, Ruby?

[Ruby (Creative Director)]

Yes, when I was younger.

[Bo Hansen]

Okay. I wanted to guess. Are pork rinds big in Ohio?

[Ruby (Creative Director)]

I don't know. I don't think so. I never really had them much. I'm trying to think if I've actually had a pork rind.

[Bo Hansen]

Oh, well, I guess.

[Brian Preston]

Really?

[Bo Hansen]

Yeah.

[Ruby (Creative Director)]

But I don't know if that's just a me thing or if it's an Ohio.

[Brian Preston]

I mean, I literally. When I went down to Augusta a few weeks ago, I literally had a bag of pork rinds.

[Bo Hansen]

You know how I know she's never

[Brian Preston]

had on the road trip?

[Bo Hansen]

Because she ended the word with a D. She actually said pork rind. I don't know if you're listening to me and Brian. We're calling the pork rinds because that's what they are. It's like a R and a Y and an N and just a bunch of N that ends with an S. That's how you know.

[Ruby (Creative Director)]

That's how you know.

[Bo Hansen]

That's how you know I know.

[Brian Preston]

Another thing we gotta do with Rebi. How about boiled peanuts?

[Bo Hansen]

Have you not had boiled peanuts?

[Ruby (Creative Director)]

Don't make me say it.

[Bo Hansen]

Not had boiled peanuts. How'd you know?

[Ruby (Creative Director)]

No, I think I have had those, but I don't say it like you do. I say it like a Midwesterner.

[Bo Hansen]

How do you say it?

[Ruby (Creative Director)]

Boiled peanuts.

[Brian Preston]

Okay, that sounds. Okay, I didn't say that. Boiled.

[Bo Hansen]

It's not the exact same.

[Ruby (Creative Director)]

I think we're really the same. The same person. Okay, well, on that note, we are going to do rapid fire after the next question. So last chance to get your questions in. But until then, Skippy has a question

[Brian Preston]

for you next to Jeff. I like me some Skippy.

[Ruby (Creative Director)]

You're gonna love this question. Wait, what?

[Bo Hansen]

Skip, we both were thinking about peanut butter as soon as you said Skippy. That's. That's hilarious. Oh, man, I'm so hungry.

[Ruby (Creative Director)]

All right, the question. You're going to love the question even more. Are you ready for it?

[Brian Preston]

Okay, Bo, there's a lot going on

[Brian (Shopify Segment)]

in the world right now that affects small business owners like us, and much of it we just don't have control over.

[Bo Hansen]

That's right, Brian. We can't control things like interest rates or tariffs, but we can control how efficiently we operate. And automating things like payroll and HR is one of the best ways to get your time back and focus on what actually moves the needle.

[Brian (Shopify Segment)]

And that's why we love Gusto. Gusto is an online payroll and benefits software built for small businesses. It's all in one remote, friendly, and incredibly easy to use, so you can pay, hire onboard, and support your team from anywhere.

[Bo Hansen]

Gusto helps you save time with payroll, direct deposits, health benefits, even 401ks. And they have options for pretty much every budget.

[Brian (Shopify Segment)]

They even make it quick and easy to switch to Gusto. Just transfer your existing data, and you don't pay a dime until you run your first payroll.

[Bo Hansen]

Look, you can't control everything, but you can control how much time you save by automating payroll and HR processes.

[Brian (Shopify Segment)]

So try gusto [e-mail], and get three months free when you run your first payroll. That's three months of free [e-mail] MoneyGuy

[Ruby (Creative Director)]

when, if ever, is it better to lease a car rather than buy at the end of a lease, how do I decide on buying the car or moving on? Brian, I'll let you discuss.

[Brian Preston]

Okay, look, the easy answer. I'm going to give you all the easy answer, and then I'm going to level set with you. You need to be in step eight to even consider leasing a car of the financial order of operations. But then. Now, let's get down into the weeds on this. Is that I have actually leased my first car because I love my wife. And look, we make. Sometimes love is irrational and you see things for what they are. And I've told y', all, y' all have heard me, some of the biggest rants of my, of my broadcasting career have been on her prior European luxury suv. And to repeat the same mistake over and over is insanity. So I was like, at least we're going to mix this up. And instead of buying this horribly depreciating, expensive to operate vehicle, we're going to lease or rent this bad decision. So that's. That's what I've done. And then she, by the way, she is happy as she can be with that car because. And she does look good. And I pass her on the road in it every now and then, coming in and out of the neighborhood, going and doing things. I'm like, she looks good in that thing. But, you know, we're going to be able to get rid of this bad decision before it actually starts showing its warts.

[Bo Hansen]

So here's my. The question is, when, if ever, is it better to lease a car than buy? And so what we're asking is a comparative question, not an absolute question, because I would argue that auto leases are not a very sound financial decision, but there are consumers. I agree with you, Brian. In step eight, that's where it should happen. But we have people. And there I have someone in my life. It's a relative of mine who I love incredibly dearly. And she sent me a text message the other day and she said, hey, look what I just got. And it's a brand new car. And I'm like, whoa, what you. Why, why'd you get. You just. Your car's not that old. You just got that other car like three years ago. And she's like, well, guess what? I took it in for some service and they made me a deal I just couldn't. I couldn't turn down. Would you believe that I actually have a lower payment now?

[Brian Preston]

And it's all on the payment and

[Bo Hansen]

I borrowed it for even. It was even less time than my last car. And I'm like, no, all you did was, all you did was like reset. And so I kind of like walk through and explain the mathematics to her. In the situation where someone is trading out new cars every two, three, four years, if you are a buyer and you're buying those cars, all you're doing is paying for all the depreciation upfront. You just keep paying it over and over and over again. So if you're going to be that kind of consumer, there's a mathematical justification that leasing a car may actually be more advantageous than you buying the car, paying the depreciation, losing the value, rinsing and repeating. Now neither of those are good choices or good decisions, but that's a scenario where if that's the kind of consumer you're going to be, you'll likely save yourself some money by making that poor decision slightly better.

[Brian Preston]

Yeah, by the way, this, this vehicle that we are renting, it depreciates like a rock because I don't think anybody, by the way, you can go buy this luxury car, go look at these vehicles seven years in the future and you're like, why are they giving these cars away? It's because they have air suspension systems that definitely go need requirements. They're over engineered and they create a lot of trouble. So that was my thing was that they depreciate like a rock. And then I knew the maintenance because by the way, this one that we have, it's not only an over engineered car, it has an electric battery in it too. It's one of those plug in electric hybrids with a motor in it. And so that's why it didn't work. But I'm also being told we're getting a mid question update that Skippy, not Jif is in step three. So without a doubt you do not need to be leasing a car. You need to be. If you got high interest debt, you need to get something that gets you reliably from point A to point B. It's not to maximize the loving your relationship or how cool you look out there to society.

[Bo Hansen]

You got to figure out how to get your transportation costs down to as low as reasonably possible. I don't say as low as possible because I'm not specifically an advocate for like the go buy a thousand dollar clunker. I think oftentimes that can be more expensive. But buy the lowest priced, most reliable car that you can to get your car payment or to get your transportation costs as low as possible because you need all of that margin right now to be going to step three, knocking out that high interest debt car leases and buying new cars and replacing cars. Not where you need to be if you're in step three.

[Brian Preston]

I've got an update coming out to some things I'm not ready to share at all. But I've been writing a lot and Rebe knows she's read it, but timing of major purchases definitely matters. And if you're only in step three and you're a young person, you need to make these type of decisions. That's why step eight is going to be there to protect you. But most people are going to reach step eight until you know their wealth multipliers in a completely different place. So don't make fake purchases in your 30s or 20s, you know, let yourself actually have some, some success, you know, so that you can buy in those abundance goals. And maybe that's when you reward yourself with the fancy car.

[Ruby (Creative Director)]

Yep, that's great, Skippy. Thank you for the question. We're glad you're here.

[Bo Hansen]

And I think Skippy said they're new here, so. Hey, welcome Skippy. If you've not subscribed since we actually subscribe right now. So that way every time we put out brand new content, you will get updated so you can continue to do money better.

[Ruby (Creative Director)]

Love it. All right, it is time for it does not depend rapid fire segment where Bo and Brian will answer Bro and Brian, Chad and Braun questions in 30 seconds or less and I will give them the opportunity at the very end of the segment. Well, since they can't say it depends in the answer in the 30 second answer, we'll give them a chance at the end. Or now maybe it does depend segment where they can expound if they really feel the need to on the questions. Okay, so

[Bo Hansen]

are you guys ready?

[Brian Preston]

Yeah.

[Bo Hansen]

Did you just snort on air?

[Ruby (Creative Director)]

What is going on?

[Brian Preston]

It feels like, it feels like when we do these typically I take 25 and you get 5, so I apologize. Bo just said the quiet part out loud. You only get 15.

[Ruby (Creative Director)]

Are you guys gonna alternate who starts or are you just gonna go? Okay, who's starting?

[Bo Hansen]

This is a gentleman's game.

[Ruby (Creative Director)]

All right, Brian's up first then.

[Brian Preston]

Wow.

[Ruby (Creative Director)]

Are you ready?

[Brian Preston]

No, but let's go.

[Ruby (Creative Director)]

Should I make Bo go first?

[Brian Preston]

No, we go.

[Ruby (Creative Director)]

All right, Brian's first. All right, 30 seconds on the clock. Here's the first question. Where do, where does accelerated 401k loan repayment come into the foo?

[Brian Preston]

I mean, I think that's probably a. That's probably like a three. A step three type thing because you, you want to get that, that 401k loan paid off very quickly.

[Bo Hansen]

Step three, any 401k loan is a high interest loan because of the opportunity cost of those dollars. You should get that knocked out quickly.

[Ruby (Creative Director)]

Very well done, team. Next question. You Both used your 15 seconds.

[Brian Preston]

I like that. I'm like fishing around the dark and then Bo comes in definitively with an exclamation point and then he gives me still the fist bump.

[Ruby (Creative Director)]

All right, next question. I'm in the 25 to 30% tax rate. How do I determine if I should do Roth or traditional?

[Bo Hansen]

You need to look at your other accounts. How much pre tax money do you have? How much Roth money do you have? What is your timeline to being able to need those dollars? How young are you? How old are you? And based on the answer to those questions, it'll lean you one way or the other.

[Brian Preston]

Yeah, if you're young, Roth IRAs are going to be really powerful. All the compounding growth you get out of that. If you're older and you think your taxes will be lower in, in the future, you might want to take advantage of traditional.

[Ruby (Creative Director)]

All right, we're covering a lot of ground here within the time limits. Next question.

[Brian Preston]

Did we say it?

[Bo Hansen]

No, no, we didn't say it, but we were kind of like.

[Ruby (Creative Director)]

I mean, you did skirt right around it, but you, you gave the variables.

[Brian Preston]

I didn't say the D word.

[Ruby (Creative Director)]

None of them, actually. You didn't say any D words. Okay, next question. Is a concierge Doctor Worth it? Step 8. At 26 years old with 500k invested, yes.

[Brian Preston]

I mean, health is wealth and so you should act accordingly. Especially with the way technology and innovation is going on in medical science right now.

[Bo Hansen]

Money is nothing more than a tool that allows us to achieve our goals. For me, specifically, health and being as healthy as possible for as long as possible is super, super important to me. So for that concierge doctor is justifiable to the cost and something that if you're at that stage where you can afford it, I am a huge advocate for it.

[Ruby (Creative Director)]

Nicely done. All right, next question. If you're the trustee and ultimate beneficiary of an irrevocable trust, would you include said value in your net worth? Principal and corpus is protected from spend down per trust docs. That last part was confusing.

[Bo Hansen]

If you're the

[Ruby (Creative Director)]

start over, that last part was hard to read.

[Bo Hansen]

So you're the trustee and the beneficiary. You're asking, should I include the value of this trust in my net worth? But there are spendthrift provisions that don't allow me to get to the principal and corpus.

[Ruby (Creative Director)]

That's what it looks like. Yes.

[Bo Hansen]

Okay, got it. In that scenario, the trust is an income producing asset for you, not an actual asset. Yet it's likely if you're the beneficiary, you'll get it at some point. The future. I would treat it like an income source income statement item, not balance sheet items. So probably not on your network statement. I put in the footnotes.

[Brian Preston]

I was going to say the exact same thing because it's basically promises of future cash flow things. It's. It's. So it's no different than like Social Security or other things. Is that there's definitely going to be value for health, education, maintenance and support, but it's not something that you have access to. So you can't put it on the net worth. Oh, I went, I went a few seconds over.

[Bo Hansen]

I stole two from.

[Brian Preston]

Sorry, sorry.

[Ruby (Creative Director)]

Next question. New baby. What's the best account option for him

[Brian Preston]

and why are you at step eight, is the first question. If so, then I like custodial accounts for weddings and house purchases. I like 529s for education and priming the pump to make sure your kids are going to be productive with their labor.

[Bo Hansen]

Love both of those. I do not love people that get really, really aggressive and try for a newborn to do custodial. Ross. Because their baby's little baby mod. I would say stick to 529s or utmas.

[Ruby (Creative Director)]

The end.

[Bo Hansen]

I was gonna say depending on. But I didn't say it. I didn't say it. I didn't say it. I stopped. That's called discipline. That's one of the three ingredients of wealth creation.

[Ruby (Creative Director)]

Okay. Okay.

[Brian Preston]

You said the D word came to close to it.

[Ruby (Creative Director)]

I know. I. I didn't say it till I somehow take points away from that. But we'll let it slide. All right, next question. I would like to start working for myself soon. Next year or two. How can I best plan for my future as I transition from an employee to a self employed 29 year old?

[Brian Preston]

Who was supposed to go first?

[Bo Hansen]

You go first.

[Brian Preston]

Go put on your 3D glasses. There's some D words is you want to have your dream plan run the scenario for the next few years. You want to have the down to earth of what you actually think will happen. And then don't skip out on the do do plan meaning it doesn't go as you plan.

[Bo Hansen]

In addition to 3D glasses. Cash, cash, cash, cash, cash. Cash is the oxygen you'll need. As a small business owner, I would save up more than you think you need. So you can give it longer than you think it will take.

[Ruby (Creative Director)]

Wow. Well done.

[Brian Preston]

I felt like we even. We only had 25 seconds to start that one. There was some. Some because you kind of looked at

[Ruby (Creative Director)]

each other for the first couple seconds. All right, next question. Bo leg day, arm day, or cardio rank from favorite to least favorite Arm

[Bo Hansen]

day, favorite cardio, because then it helps you get ripped. But I love legs too, so I'm like, I like all three. I'd say one, then like, it's like a 2. A 2B. Deal.

[Brian Preston]

Why did that question get asked the bowl? Is it because he's a gigachad? And then everybody just assumed. I don't know. Did I say it depends?

[Bo Hansen]

I didn't say that, did I?

[Brian Preston]

Somebody just held it up.

[Ruby (Creative Director)]

Oh, really? Did they?

[Bo Hansen]

Did I say it? No. No.

[Brian Preston]

You guys, we have to say that

[Ruby (Creative Director)]

somehow you easily could have thrown it in. It depends.

[Brian Preston]

If we didn't say the male diaper or the adult diaper, then it doesn't count.

[Bo Hansen]

I. Look, I'm not gonna screw up a weightlifting question, right? Like, that's not one I'm gonna screw up. Me and the boys, we. We love our. We love.

[Ruby (Creative Director)]

Your time is up. Your time is up.

[Brian Preston]

Come back to it.

[Bo Hansen]

I.

[Brian Preston]

Are we still doing this? Did you even got a gift yesterday?

[Bo Hansen]

I did get a gift yesterday. Stay around after rapid fire segment. I'll tell you about the awesome gift we got yesterday.

[Ruby (Creative Director)]

Next question. When calculating your emergency savings, can you factor in a guaranteed severance from your employer?

[Brian Preston]

No.

[Brian (Shopify Segment)]

No.

[Bo Hansen]

Here's why. Being unemployed is an example of an emergency. But what if the emergency you have does not involve losing your job? What if it's car goes out, H Vac goes out, medical emergency. Some of those things where that severance doesn't pay out just because it's guaranteed. If you get severed, it's not necessarily guaranteed. And a lot of guaranteed severances say so long as you're not fired for. Cause like, what if you screw something up or something?

[Brian Preston]

Yeah, that was the only thing I

[Ruby (Creative Director)]

was glad is that time's up.

[Bo Hansen]

We're going back to guaranteed severance because I'm on the same. I'm on the same page as you.

[Ruby (Creative Director)]

We'll come back to it in our next segment. Okay, next question. Wife and I are age 35, with three kids and eight times our income invested. Wow.

[Brian Preston]

Wow.

[Ruby (Creative Director)]

Our dream home breaks the home buying rules and will cost five to six times our income. Since we are ahead of the curve, can we buy it?

[Bo Hansen]

You've got to stress test this to see because being ahead of the curve does give you flexibility. Now what I don't think you can do is allow your monthly note to be exponentially above the 25%. What you may be able to do is decrease your savings to build up the down payment to then be able to afford the home and get inside

[Brian Preston]

the affordability or even go see how ahead of the curve you are and be honest with yourself and maybe use a little bit of capital to increase your down payment so that that payment does reach within our 25%.

[Bo Hansen]

We're coming back to this one.

[Ruby (Creative Director)]

I am very impressed that you actually got a good answer there in that 30 seconds though, because that was a doozy. There's a lot of it depends in there. Okay, next question is slowly investing$50 per month in a cloud storage and AI focused fund like FSPTX2 non diversified. Currently investing roughly $400 per month at 23 years old. Am I too bullish?

[Bo Hansen]

23. 400amonth at 23.

[Brian Preston]

You're up. I look, we've been there, done that. I did the Internet fund when I was your age and I made money immediately and then ended up selling it at a loss eventually. So I still like nothing wrong with you dabbling it. But just don't, don't let it be your eating money.

[Bo Hansen]

I want to know what else you're saving because at $400 a month for a 23 year old, if you were just plop that in the SB500, go play with a wealth multiplier, see what that can turn into. I don't want you to waste opportunity. Nothing inherently wrong with those like sector plays. But that's more the, that's more the vacation stuff, not the main course. That's more like the dessert, not the main course.

[Ruby (Creative Director)]

There you go.

[Bo Hansen]

Over. She didn't call me.

[Brian Preston]

I'm sorry.

[Bo Hansen]

Thank you for taking a sip. She.

[Ruby (Creative Director)]

It was slightly over. I. I don't know why I had grace. I think I was just looking at the next question, which is our final question. Last but not least. Star wars or Star Trek and why and does BO know the difference?

[Brian Preston]

I mean we just, we just came through May 4th be with you. So I mean I'm going to choose Star wars and they've made it easier with the way they've handled the Star Trek franchise. But Star Wars, I would say Star

[Ruby (Creative Director)]

wars also because you know more about them.

[Brian Preston]

I do like them both though. And I hope that. I think that. I think the next decade's gonna be good for both franchises. I really do.

[Bo Hansen]

Are they still. They're still adding to both of them. They're still doing more stuff, I think.

[Brian Preston]

Yeah. There's. There's things in the works right now.

[Bo Hansen]

Star wars at. At Disney, like, the whole thing or whatever. Wild. I was very impressed by that. Like, the whole. Like, it was just. You do feel like in a different. Like in a different universe, man.

[Ruby (Creative Director)]

Very fun. Well, that concludes our It Does Not Depend rapid fire segment. Now it's time for our maybe It Does Depend segment, where Beau and Brian get a chance to expound on any questions they didn't have enough time to do. So I have one where you said you definitely wanted to come back. It was talking about calculating your emergency savings. Can you factor in a guaranteed severance from your employer? Did you have anything else to say on that?

[Brian Preston]

Yeah, that one. That one is. Look, the reason you have emergency reserves is to keep you from making desperate decisions. And part of what makes desperate decisions is your employer's cash flow coming in. And yes, they might tell you we have a guaranteed severance if we ever separated ways or we went out of business. But I bet if you read the fine print, you'll see exactly what Bo said is you're still an at will employee in a lot of cases. There's lots of outs for your employer. And we're trying to build independence outside of the obligations or your employer. So that means you need to stand on your own feet. I love that.

[Bo Hansen]

I don't have anything to add to that, because I do. I agree that, like, emergencies are the things that you're not counting on. They're the things that can come out of left field on a random Tuesday. I think your emergency fund should be a true emergency fund. And you should not try to find ways to shrink it or minimize it. Set it, let it hang out there, chisel it away, compartmentalize it, and then get under wealth building. But don't sacrifice it. Don't try to get too cute with it, because when you need it the most is when you will be the. Is when you will be the most thankful that you actually have it.

[Ruby (Creative Director)]

There.

[Bo Hansen]

That was guaranteed severance. There was another one.

[Ruby (Creative Director)]

Yes. About buying the dream home.

[Bo Hansen]

35.

[Ruby (Creative Director)]

They have eight times invested. There are 35 with three kids. I know you have more to say.

[Bo Hansen]

Yeah, because. Because here's what. All right, so this is. I'm going to reframe this for those of you that just got here. This 35 year old couple, they said they got eight times their income saved up in their investment portfolio. We say that by the time you get to 40, we want you to have six times your annual. So they're like, well ahead of the curve. Like, well, well, well ahead of the curve based on like sort of the, I'm going to say the averages, but kind of based on the milestone trajectory. What I'd want to figure out is, okay, well, what goals are you ultimately working towards? Like, what's the future? Because money is nothing more than a tool that allows us to do the things we want to do. One of the things that might matter to you at 35 is my kids are young, we're young. We want to have our dream home. There's no point in us waiting until we're 75 years old to finally be in our dream home and not be able to enjoy it. And because you're so far ahead of the curve, if you are ahead of the curve because of all the hard work you've put in, you give yourself some latitude and flexibility to make some different decisions that other people who have not been as diligent might not be able to make. So I would figure, okay, are we on track for retirement or financial independence? Whatever we're working towards, if we were to decrease our savings in order to save up for the down payment, in order to afford the house, what would that look like and how much would that change our trajectory? Because what I don't want you to do is be so far ahead of the curve and then you make this life decision and then you end up drastically behind the curve. You got to make sure that doesn't happen. But I'm all for people living their absolute best life today, so long as they're not sacrificing the ability to also live their best life in the future.

[Brian Preston]

Well, I think that's why that's the balance you just said. Is it? They're ahead of the schedule right now. Nothing wrong with you running scenarios where you take a little bit of that capital to boost the down payment so it fits within our, you know, our, our 25%, but then also run it the other side to if you're planning on leaving the workforce at 55, 60 years of age, make sure, what do you need to have so that you don't cut it to the bone. We want you just to basically have a little, you're cutting a little bit off out of your resources to make this life goal happen, but you're not cutting it so close that when you prune the bush that it actually doesn't grow back. So that's the delicate balance you have to do. Nothing wrong with you pruning and using your assets to live your best life. Just make sure you don't cut it so low that you've now jeopardize something that you were ahead of the curve and even potentially on easy street for life now.

[Bo Hansen]

Now, this is one of those areas where when I hear this question, the word immediately comes to my mind is, man, you're making a big decision that likely has a lot of gravity to it. Man, the, the, the consequences of this decision, if made correctly, can be huge in terms of how much life we get to enjoy or if made poorly, could be detrimental in terms of what it costs. There are extenuating factors where maybe you don't know what you don't know and you're unclear about what variables and how to test and how to stress test it. This is one of those things that you may very well be at that point in place. We're having a professional, having a guide, having an advisor on your side helping you navigate and weigh this decision and how it might play out and what it might look like could be hugely valuable. It's one, to either validate or devalidate the decision and then two, if it does work to give you the encouragement, yes, do this. Yes, it's okay. Yes, spend the money, live the life, make the improvement. Sometimes it's great just to have someone in your corner giving you that confirmation that, okay, I can do this and I'm still going to be okay.

[Ruby (Creative Director)]

Great thoughts. You know, you mentioned your 25% rule on housing. If you're curious about how to stay within the money guy guardrails to buy a house, go to moneyguy.com resources. We have a home buying calculator and a home buying checklist that you can download. Both of those are completely free. It'll give you some more insight on our 3, 5, 25 rule for buying a home. And I think that you'll find it very helpful if you're thinking through how to do this the smart way and even some of these more advanced areas of like how can you get it within that window in the situation we just talked about where they had some cash and some things to consider. So moneyguy.com resources just wanted to throw that out there before we dive into a final question if you guys are ready for it.

[Brian Preston]

All right.

[Bo Hansen]

Oh, no, I got one more.

[Ruby (Creative Director)]

You didn't work out your workout thing. I Was ready to get back to personal finance. Sorry.

[Brian Preston]

I still think we should answer one more, though.

[Ruby (Creative Director)]

That sounds.

[Bo Hansen]

I just want to say, it's so interesting.

[Ruby (Creative Director)]

So this is a both and situation.

[Bo Hansen]

You know, obviously, this personal finance show, but we care about health, obviously. We talk about it a lot. Brian has made tremendous strides for his health over the past couple years. I've tried to do the same thing, because health is wealth. It matters. We want to be able to live as long as we can, as well as we can. And so I work out every morning. Some dudes, we call our gym third base. It's the dudes of third bay that work out. And it's so funny. We talk about this sort of casually enough and tangentially, you guys catch on to it. And so yesterday, a package shows up, and our administrators open, and they say, guys, what did y' all order? What are y'?

[Ruby (Creative Director)]

All?

[Bo Hansen]

What did y'?

[Brian Preston]

All?

[Bo Hansen]

And I kind of saw that. Brian, what'd you order? And he looked at me like, what'd you order? We opened it. It turns out it was one of you. One of you actually said, hey, guys. Yeah, here's a picture of it. That's it. You guys said, hey, I just love so much that you guys talk about how health is wealth. And I happen. Here's my. The guy that wrote. He's one of the owners of this company, said, hey, I. I made some really good financial decisions, and I was able to become an owner in this company. And I just. You guys have added so much value to my life. I want you guys to stay safe when you're lifting. And they send us a bunch of workout gear. I just think. I think that's awesome. I think that it's amazing that you guys recognize that the stuff that we talk about here, the financial stuff and even some of the other stuff, it really is about living your best life, the best version of yourself that you can be. And so he sent that, and he sent an incredibly nice letter and write up with it. And I just. That's awesome. That kind of stuff makes us so happy.

[Brian Preston]

By the way, that's the first time I saw the. The poll results. How was that? Not like 95.5percent who thought I was gonna get excited about those things on

[Ruby (Creative Director)]

Instagram @moneyguyshow, if you want to follow.

[Brian Preston]

I do, but I think is.

[Ruby (Creative Director)]

Who do you think is more excited to use the equipment? Brian or Bo? And it was like, a pretty high. Well, I just.

[Brian Preston]

It was like 60.

[Ruby (Creative Director)]

46,040.

[Bo Hansen]

Yeah.

[Ruby (Creative Director)]

You.

[Bo Hansen]

You're. You're. Not excited about Bo.

[Brian Preston]

I think we know who actually lifts weight to where they need need a belt on versus. And then you, like, you even knew what this stuff was like, oh, this is. I can do. You can do muscle ups and pull ups. I was like, I don't even know what that is. And then Marcy and I had to go and look at the ankle things so that you can strap more weights on. What I don't need when I'm doing a pull up is more weight. I mean, I'm trying, I'm giving it all I got just to get what I got up, you know, I don't, I don't need to add more to it.

[Ruby (Creative Director)]

I agree. This is a very bow coded package we received. Right. But Brian believes health is wealth too. You've had a glow.

[Brian Preston]

I just believe in co ed classes where we're doing a lot of cardio, we're doing some dumbbells, getting on the treadmill, but we're not, we're not out there doing Olympic lifts, just trying to throw. Matter of fact, on days that I find out there's burpees, I'm like, oh, maybe I need to go to the

[Bo Hansen]

restaurant today or get a water.

[Brian Preston]

Water break, you know, during that burpee segment.

[Bo Hansen]

That's hilarious.

[Ruby (Creative Director)]

Oh, that's good stuff. No, I'm glad you went back to that. That was good. All right. Do you want to do one more question?

[Brian Preston]

Final question.

[Ruby (Creative Director)]

This is a fun one. It says, hey, MoneyGuy team, if you could go back in time, is there anything you would start spreading the word about earlier? And I'm thinking personal finance related. Yeah, of course.

[Bo Hansen]

You know, Well, I have. Okay, I have one. But you want to go first. I have one immediately that just hit me.

[Brian Preston]

Well, I mean, realize. I mean, I, I really do love index funds and Roth accounts are something I'm pretty, pretty passionate about.

[Bo Hansen]

Yeah. But I'm going to say you've always been passionate about those. So for those who don't know, Brian started this podcast back in 2006.

[Ruby (Creative Director)]

Honestly, you started sharing things you were passionate about pretty early.

[Bo Hansen]

Yeah. And so he was sharing index funds and Roth irs. Here's something I wish we could go spread the word about earlier. It wasn't until a number of years into our career that we actually synthesized and figured out a clean way to communicate the financial order of operations. It always kind of existed. You know, we. It was the amalgamation of, like, our experience and working with clients and being able to, like, put the information together, but that it wasn't around in that form in 2006. And man, if we could go back in time, I think it would have been cool. Starting in 2006. If we could have started.

[Brian Preston]

Like, the purity of this is much better because it's. There's lots of. There's. You talk about 10,000 hours to become an expert. There was a lot of, you know, really getting in the weeds to get this tied. The origin story on the financial order of operations, if you remember, was the 30 Minute Financial Plan. We did that show every year. You know, probably came about what. Because you were on the show then Bo. So it was probably 2000 with a food, you know. No, the 30 minute financial plan somewhere around there 2012. And then we kept doing that show and then finally we were like, you know what we go through the mindset or the order. And then it hit us. When I saw that LinkedIn post on the excuse my. My dear Aunt Sally. And I was like, you know, this is. We ought to own because there's a financial order of operations as well. And I agree that would have been better even if it came out even sooner.

[Ruby (Creative Director)]

I do love that though, because it goes to show you, like, the financial order of operations is truly baked in like tons of your life experience, tons of your client experiences. Like it was a long time in the making.

[Brian Preston]

Well, that's why. And that's why I love. You know, and by the way, this is probably a great way to close it too. I still am reading the Amazon reviews. I mean, and the good read reviews because a lot of you, like, I don't know, I wonder if he's still reading or. Yeah, I'm in there.

[Ruby (Creative Director)]

He doesn't.

[Brian Preston]

I love it. And you guys made me so happy because, I mean, it feels like the book as well as the financial order of operations are changing folks lives for the better. And I know that that's all driven by what we get to do with y' all in the wings, whether that's in the theater or on the airplane.

[Ruby (Creative Director)]

Either way.

[Brian Preston]

And I appreciate y' all being my, you know, co pilots with me or while I ride in first class.

[Bo Hansen]

That's true.

[Ruby (Creative Director)]

Am I a co pilot or am I the pilot? I don't know.

[Brian Preston]

You're the pilot.

[Ruby (Creative Director)]

Okay, so you kind of like stepped out of the cockpit and said here,

[Bo Hansen]

Rebecca, let's just say this is a

[Brian Preston]

private so that you're not locking the cockpit to make sure we don't come up there. We have free access to come from first class up into.

[Ruby (Creative Director)]

Okay.

[Brian Preston]

Or we're like southwest where all seats are first class.

[Bo Hansen]

Every seat on Southwest is first class, right?

[Ruby (Creative Director)]

Wow, this analogy is getting way too deep. But I do, I do like it. I appreciate everybody being in the wing so that we can make this show for you. And we'll be back Every Tuesday at 10am Central live streaming along with lots of other original content throughout the week. So be sure to subscribe wherever you're listening. And we will continue to show up here on the Money Guy show channel with brand new content talking about what matters to you about your personal finance and hopefully just helping you build that confidence so you can focus on what really matters and not just stay in the weeds or in the anxiety of personal finance. That's what this is all about. So be sure to subscribe and visit moneyguy.comresources for all that free stuff we talk about that we have made for you to help continue these conversations.

[Brian Preston]

I'm your host Brian, joined by Mr. Bo and the rest of the Money Guy Crew.

[Ruby (Creative Director)]

Money Guy out the Money Guy show is hosted by Brian Preston and Bo Hansen. Brian and Bo are partners with a bound 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.