He’s Working 60 Hours a Week to Retire Early… Is It Worth It?

Summary

Money Guy Show – Episode Summary

Episode Overview

Title: He’s Working 60 Hours a Week to Retire Early… Is It Worth It?
Date: May 25, 2026
Hosts: Brian Preston & Bo Hanson
Guests: Skyler (23) and Millette (26)
Theme:
This episode dives into the real-life story of Skyler and Millette, a young married couple with an impressive net worth and a shared dream of achieving work-optional status by age 50 or 55. Their path is fueled by disciplined savings, side hustles, careful planning, and open communication. The hosts analyze whether their extreme work ethic and financial discipline are worth it—and what trade-offs might lie ahead.

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Guest Background

Quick Facts (07:00–07:28)

• Ages: Skyler (23), Millette (26)
• Married: Since August 2024
• Net Worth: Almost $300,000
• Homeowners: Purchased home at 3.99% interest rate, $100k down
• Total Household Income: $173,000+ (with potential for $40–50k increase soon)
• Jobs:
  • Skyler: Civil Engineer (transitioning public sector), piano teacher, church pianist (total: 55–60 hours/week)
  • Millette: Office assistant for the state

“Do you realize how unique that is in this world in which we live?”
— Brian Preston, [07:13]

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Key Discussion Points and Insights

1. Early Financial Influences & Couple Dynamics

Money Habits Origin (02:04–04:23):

• Millette’s family struggled with debt; she became a super saver, putting away 50% of every paycheck:

  “I went the hyper-savings… I don’t want to ever not have money.” — Millette, [02:49]

• Skyler’s parents were frugal post-divorce; he “leeched” off their habits but with a perpetual scarcity mindset.
• Both believe in saving but for slightly different psychological reasons.

Getting on the Same Page (01:45–02:34):

• Early in the relationship, Skyler encouraged Millette to pay off her car lease and start investing.

  "He's the one that got me to do my first Roth IRA..." — Millette, [02:22]

• Communication is their relationship cornerstone.

2. Aggressive Savings, Investments & Sinking Funds

Savings and Investments Breakdown (09:10–11:16, 31:39–32:56):

• They adhere to a 25% savings rate focused on retirement and brokerage accounts.
• Use “sinking funds”—multiple buckets for everything from vacations and future car replacements to annual subscriptions and house repairs.
• Both use customized Google spreadsheet templates rather than automated apps.
• All major investments are at least discussed together; minor ones occasionally cause friction.

Net Worth and Real Estate (07:41–08:56):

• Bought a house in 2025 with significant equity due to a big down payment and builder incentives.

Detailed Savings Strategy (31:39–32:56):

• Skyler: 9% into 401k (with 3% match); maxing Roth IRAs for both; $1,000/month into taxable brokerage; considering house paydown vs. bridge account.
• Millette: 457 (Roth), pension participation, and careful tracking.

3. Quality of Life & Trade-Offs

Work-Life Tension (13:40–14:44):

• Skyler works 55–60 hours/week; says work volume is necessary to meet their 25% housing rule and current mortgage.

  “I feel like I work a lot, and I don’t get a lot of time to just sit and relax or hang out with Millette.” — Skyler, [14:00]

• Main struggle: balancing extreme saving and hustling with enjoying their early marriage years.

Short- and Long-term Goals (16:26–18:23):

• Plans to have kids in 3–5 years, with Millette hoping to be a stay-at-home parent for the early years.
• Scheduling intentional “fun”/travel once their home project phase is complete.

Budgeting and Lifestyle (12:33–13:12):

• Detailed trip budgeting, “conquering” Nashville by planning multiple activities in a single visit.
• Enjoy the act of tracking every expense manually.

Memorable Quote:

“I’ve never really thought about any other life without spreadsheets, I guess.” — Millette, [28:26]

4. Conflict and Communication

Money Fights (20:52–24:57):

• Minor disagreements center on timing of big purchases (e.g., Skyler’s impulsive $1,800 water softener buy after Vegas trip, [21:45]) versus Millette’s frequent small “hobby” buys (plants, Disney souvenirs).
• Sinking funds help, as money is allocated ahead of time.
• Clutter vs. spending is more of a pain point than overspending itself.

Quality of Life Reflection (44:43–47:25):

• Hosts encourage the couple (and financially “tight” listeners) not to lose sight of memory-making and to be okay spending guilt-free on joy once savings goals are met.

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Financial Projections & Planning Guidance

Are They on Track for Work-Optional at 50–55?

• Desired retirement spending: $120,000/year ($10,000/month after-tax).
• Currently spending ~$5,000/month (excluding sinking funds).

Projections (52:02–54:23):

• Continue saving $44,000/yr at 9.5% annual growth:
  • By 50: ~$5.8 million portfolio.
  • By 55: ~$10 million.
  • By 60: >$15.6 million.
• Even if income drops (Millette leaves workforce, side income goes away), and they only save 25% of $140k, they still stand to retire with $5–8 million by 50–55.

Big Takeaway:

“If you do it right early, you can do it light.” — Financial Expert, [54:23]

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Professional Optimization Advice

Tax and Account Strategy

• Consider a Solo 401(k) for side income (once not contributing to other 401ks in a year).

  “You could still defer $24,500… would save them almost $7,000 in taxes.” — Brian Preston, [51:07]

• Coordinate 401k, 457, and Solo 401k contributions to avoid excess deferrals.
• Roth vs. pre-tax: At their current tax bracket (~28% marginal), Roth still makes sense due to likely higher future earnings.

457 Benefit:

• No early withdrawal penalty, creating extra flexibility for early work-optional retirement.

Cash Allocation and Sinking Funds

• Emergency fund: They’re overfunded (suggestion: 3–6 months expenses is enough; surplus could be put to better work).
• Sinking funds could be simplified (major buckets: vacation, car, rather than minor recurring expenses).

“I would argue it’s a little over-complicated and over-conservative… when you add efficiency, generally you tend to add effectiveness.” — Brian Preston, [42:18]

Work-Life Balance Encouragement

“If I could go back in time… I’d have gone to more Tuesday night movies and coffee shops… I was so tight and so worried about saving every dollar… realistically, the behaviors I had in place, the plan likely was not going to break.” — Brian Preston, [43:44]

“If it brings you joy, if it brings you happiness, it’s okay to spend this money.” — Bo Hansen, [47:07]

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Notable Quotes & Moments (by Timestamp)

• [02:49] “I went the hyper-savings… I don’t want to ever not have money.” — Millette
• [07:13] “Do you realize how unique that is…?” — Brian Preston
• [14:00] “I feel like I work a lot, and I don’t get a lot of time to just sit and relax or hang out with Millette.” — Skyler
• [21:45] “He loved that water softener so much. The next week, he paid $1,800 to get one installed…” — Millette
• [28:26] “I’ve never really thought about any other life without spreadsheets…” — Millette
• [54:23] “If you do it right early, you can do it light.” — Financial Expert

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Timestamps for Key Segments

• [01:34] Relationship and early money philosophy
• [07:00] Age, net worth, and wealth-building story
• [09:10] Down payment and aggressive savings details
• [10:15] Sinking funds explained
• [13:40] Quality of life/work-life balance struggles
• [16:26] Family planning and future goals
• [20:52] How they handle spending conflicts/fights
• [31:39] Retirement savings and account allocations
• [35:56] Roth vs. pre-tax/tax strategy, self-employment
• [41:31] Are they “too cash heavy”?
• [44:54] Encouragement for spending without guilt
• [47:35] Show close and post-analysis of their plan
• [51:07] Dual 457 & Solo 401k tax benefits explanation
• [52:02] Projected portfolio numbers at 50, 55, 60
• [54:23] Gold star takeaway: “Do it right early, do it light.”

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Conclusion

Skyler and Millette are prime examples of financial “mutants” in their 20s—saving aggressively, maximizing account flexibility, and communicating well. The hosts reassure them that their discipline has put them far ahead of their peers, but also nudge them to embrace joy and flexibility now and as life changes occur. The unique intersection of their habits, relationship strengths, and systems makes them an inspiration—and a reminder that “doing it right early” opens doors for a richer, lighter future.

“You get a gold star. Did you hear that? You rocked this thing. Thank you so much for coming on.” — Brian Preston, [55:16]

Transcript

[Brian Preston]

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[Millette]

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[Skyler]

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[Brian Preston]

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[Skyler]

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[Brian Preston]

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[Skyler]

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[Brian Preston]

So let me ask you this question. There's a whole lot of life that's gonna happen between now and the time that you guys turn 50. Job changes, family changes. We so desperately want to have the entire plan planned out. If something were to deviate, if something were to throw you guys off of your plan right now, how would you handle that? How old are you guys?

[Skyler]

I'm 23.

[Brian Preston]

23.

[Millette]

26.

[Brian Preston]

26. How long have y' all been married?

[Skyler]

August of 2024, so about a year and a half. Awesome. Right?

[Brian Preston]

So we're still kind of in the early stages of this thing, right? Awesome.

[Millette]

Definitely.

[Brian Preston]

Well, how's it gone so far? Year and a half in for those that are. Because we have a ton of folks that are, like, getting married or about to get married. Any words of wisdom you'd share with them about what's worked well for you guys?

[Millette]

Communication. Like, a lot of, like, we just have conversations about everything. Like, at the end of the day, it's like, how was work? How's everything? We want to know everything about each other.

[Brian Preston]

So when y' all started dating, were y' all on the same page about most things? Like, like, when it comes to, like, money and finance, were y' all on the same page with money and finance, or do you have to get on the same page?

[Skyler]

We were. We were different. Yeah. She had a car lease when we were dating.

[Brian Preston]

Okay.

[Skyler]

And I. I straight up told her, like, you should pay that off before we get married, so. So luckily, she had the 10,000 in the savings she just threw it at the leash, paid it off. And I was like, okay, maybe she's serious about this. I can start introducing the other topics. And then everything after that was pretty easy.

[Millette]

He's the one that got me to do my first Roth IRA and is like, okay, you better start this account. This is what good financial people do. And I'm like, okay, I'll look into this. And he's the one that introduced me to all the financial things.

[Bo Hansen]

But I heard she had $10,000 already saved. So there was good behaviors. This was not a fixer upper. It sounded like the foundation was already there on good financial management at discipline.

[Millette]

Yeah.

[Brian Preston]

So how did you know that? Were you like, did your parents teach you about personal finance? Like, what?

[Millette]

No, completely opposite, actually. Like my family. I grew up in a family with a lot of credit card debt and struggling. So I was kind of seeing that, and I'm like, I want the opposite of that. I went the hyper savings, like, I would say, like, 50% of every single one of my paychecks. I don't want to ever not have money.

[Bo Hansen]

Sure.

[Millette]

So I went, like, the opposite route. Like, I want to make sure I have always money.

[Brian Preston]

They said, like, an example of what not to do when you wanted to.

[Millette]

And I kind of noticed that. Like, I noticed the struggle. And I'm like, I don't really want that for myself. Like, in a sense, like, I learned from that.

[Brian Preston]

Awesome.

[Millette]

So I always saved up, like, my money. And I did, like, when he said, like, hey, it's $10,000 to your lease. You can probably pay it now. Like, you should. Right. Like, if you have the money, you might as well.

[Skyler]

Yeah.

[Millette]

So I'm like, okay. I click the button and I have that done.

[Brian Preston]

What about you? So you obviously knew about personal finance, at least enough to share.

[Skyler]

My parents are very well off. They split when I was around, like, 10 years old. But luckily, both my mom and dad had a very good grasp on finances, and I kind of leeched off after them and then kind of took on their behavior. But it was kind of for opposite reasons. They never showed that they had money. I always thought we were poor until I finished high school. And they kind of had the opposite mentality. They were very cheap, like frugal misers.

[Bo Hansen]

Frugal?

[Brian Preston]

Yeah. He said the not with good words, and you threw in the good. There we go.

[Skyler]

And I kind of took that on as well, too. So I followed a lot of the same savings habits as malette, but for the different reasons. Just scarcity mindset is Never enough. You got to hold on to everything, and you never want to let any of it go.

[Brian Preston]

Did they talk to you about, like, did they teach you about money or did you just saw it like, oh, we. We pinch pennies.

[Skyler]

I saw the habits. I. They never really talked about it, especially after the divorce. They didn't really want to talk about after that. But slowly after I graduated high school, my mom started to open up. Like, here's what I invested in. Here's.

[Millette]

You know, why College and, like, going into the job field. I feel like parents started talking to you like, okay, now let's do this with money now that you're making money.

[Skyler]

Yeah, yeah. And it's a lot easier to talk to my dad now because we work in the same field. So he's also like, here, here's what I did. Here's what you should do here with your retirement accounts, that kind of thing. So it's getting a lot easier to talk to them. But in the beginning, it was very silent. Yeah, I kind of had to figure out myself.

[Brian Preston]

And you say same career field. What is it you do for a living?

[Skyler]

Yes, I'm a. I'm a civil engineer. I currently work on airports. So I do the designs and drawings for, like, any Runway projects or taxiway projects. But I'm currently in a transitionary period. I'm switching from the private sector for airport design to the public sector for flood control. So I'd be working on dams and channels and floodgates, that kind of stuff.

[Millette]

The brand new.

[Skyler]

Brand new career change.

[Millette]

Yeah, we're like in the midst in

[Brian Preston]

the same company or is, like, different?

[Skyler]

No. So I worked at a private company for the airports, and now I'm switching to a county government.

[Millette]

Like, I'm still in the. In the. In between period.

[Brian Preston]

Got it.

[Skyler]

Like, I put in my two weeks on Monday last week.

[Brian Preston]

Oh, wow.

[Skyler]

My last day is Friday this week, and then I start in a couple weeks.

[Brian Preston]

So what was it made you decide to make the change? Walk us through. Like, why the shit?

[Skyler]

With civil engineering? There's the two routes, public versus private. I've always wanted to try both. Before I settled in, my dad also did both, and he ended up liking the public better. So he's always trying to push me towards that side, but I needed to try it for myself, and an opportunity came up and I just had to jump on it because I knew I'd regret it if I didn't take it. So.

[Brian Preston]

And all the money, like, made sense. Like, it was the money.

[Skyler]

The base pay is about the same. But the government benefits are a little bit better.

[Bo Hansen]

Sure.

[Skyler]

I'm more in it for the experience because the more experience on different types of projects I can put on my resume, the more hireable I am in the future. Plus, I'm not worried about the pay currently during the transition because I'm in the process of getting my California professional engineering license. Okay. And once I get that, I'll get like a 40 to 50 grand bump

[Brian Preston]

just from getting the one license. You get like a 40 to $50,000 pay raise.

[Skyler]

Then I'll be able to actually stamp my own drawings and that kind of. That's where the money's at.

[Brian Preston]

That's awesome. But you guys are doing pretty good right now as it stands. What is it you do professionally?

[Millette]

I'm an office assistant for the state.

[Brian Preston]

Awesome. Yeah, awesome. Awesome. Well, you guys are so kind. You shared a net worth statement. And for two folks just starting out, it's incredible. It's kind of ballin'. Right? If you look at it right now, you guys have a total net worth of almost $300,000. I'll tell me, you said you're 23 years old.

[Skyler]

Yes.

[Brian Preston]

Right. And you said you're 26 years old and you guys have $300,000 net worth. Do you realize how unique that is in this world in which we live?

[Millette]

Yeah.

[Brian Preston]

And so you can see we've got a little under $60,000 in cash. You've got a checking account, emergency fund. We have some sinking funds. And then you have about $126,000 of investment assets, which is awesome. And you guys are homeowners. You have a home that's worth 565,000 with a mortgage that's about 456 and tons of equity in this house. I think there's a lot of 23 year olds and 26 year olds looking at this saying, holy cow, how could I be in there? How did you guys do what we

[Bo Hansen]

could buy that house? Because I see the interest rates also. 3.99%.

[Skyler]

Yeah. So we bought the house in July of 2025 last year, actually.

[Millette]

We're almost a year in.

[Skyler]

Yeah, we put 100,000 down. And the reason why we were able to get such a low rate is we financed directly through the builder. It was a new construction community.

[Bo Hansen]

I get it.

[Skyler]

So they were throwing all those incentives. Yeah. And it's always been my dream to own a house since I was like 18. So I've always been piling money into a brokerage account since I knew what I When I could. And then when we finally got married in 2024, we put our foot on the gas. And since I was living at my mom's house, she was only charging me 500 bucks in rent and split utilities. We were really taking advantage of that with our combination of the big boy jobs, the low expenses, shoving, you know, five, six grand a month for a year. And then at the end of the year, we looked at our accounts and we're like, hey, we have enough. Why don't we go start shopping for houses? And it was a complete surprise, actually. We. We were just driving through the neighborhood, and we saw a for sale sign, and we're like, let's go check it out. And then the lady was like, oh, by the way, we have this cool intro rate, the 4%. And we're like, all right, let's run the numbers. And then we looked at our budget with her 25% rule, and it worked. So we're like, let's move in.

[Bo Hansen]

Is it like a 30 year mortgage?

[Skyler]

It's a 30 year mortgage. It's an FHA.

[Brian Preston]

And so what was the. So did you reverse engineer the math to figure out putting $100,000 down? Like, what made you decide on such a. Such a big down payment for the first house?

[Skyler]

We were just drilled into our brains, the 20%. This is before I found you guys with your lower rule. So that's why. So once we knew starter homes in our area are about half a million dollars, so automatically, 100,000 down 20%. That's where we got that.

[Millette]

We always had that number in mind, like that $100,000 for a down payment. And that was like, the magical number. We started our marriage off with, like, maybe 50 grand in savings. But in, like, those first six months of marriage, we really buckled in, like, hey, no spend month. We're literally putting like into our savings account, like, five to 6,000amonth.

[Skyler]

Yeah.

[Millette]

That's really how we build up so much of the down payment. And a lot of you like, investing since you were a teenager into, like, actual brokerage account. He had a brokerage account since he was 18.

[Brian Preston]

Yeah.

[Millette]

So that was a lot of your work into it too.

[Bo Hansen]

What I want to is because I'm going to hit you on quality of life here in a minute to find out what you guys do for fun. But I need to know about savings rates because I want us to know how. How extreme we're going into this being achievers, because I'm every indication is y' all are hitting on all cylinders on Making stuff happen. So what's. What's the savings rate?

[Skyler]

We are currently at the 25% with just the retirement contributions and stuff going into, like, investments. But on top of that, you see, we have a lot of cash in our sinking funds because we have a lot of these little buckets that we just like to save for, like, these bigger expenses. Like, you can talk about a little more.

[Millette]

That's your thing. We do, like you said. That's interesting, because I. When I was, like, single, I was starting to do, like, these sinking funds, and it's like my little buckets of, like, 100 bucks for entertainment and, like, 100 bucks for a car or whatever. So as we got married, we combine these buckets and we have, like, eight. Is like saving up for a new car. Car registration. Like, we have all our. All of those buckets, like, annual things into those sinking funds as well, like the annual subscriptions and the car registrations and the car insurance. But we also have house maintenance, house improvement, entertainment. We have a little buckets for ourselves, the Skyler fund and Millette fund. Like, that's just money that we can spend on whatever we want. Like our hobbies. Yeah. Like, those are, like, how we save money and we work.

[Brian Preston]

Do you ever spend the money like you said? Like, like, the stuff you save up for yourself? Like, what? What?

[Skyler]

Yeah.

[Brian Preston]

What do you spend?

[Millette]

I spend it on my hobbies. He's, like, more conservative.

[Skyler]

I try to save it up, like my little I want bucket. But then whenever she sees something nice, I'll, like, buy it for. I'll be like, yeah. Happy birthday.

[Brian Preston]

So you spend up your bucket on her?

[Skyler]

Yeah, my bucket pretty much goes to her. But occasionally I'll get, like. I'll buy myself a new tool or, like, a new car part cars, mechanics, and just.

[Millette]

He fixes his own car.

[Skyler]

That's one of the ways we're able to save a lot of money is because I do all the repairs and maintenance on our vehicles.

[Bo Hansen]

Well, and here's the thing that I think is interesting is that, like, y' all have come to Nashville for. To record this show, and we asked you about it, and I. I mean, you packed three trips into one. One visit. I mean, because there was nothing on my list. Y' all went to Gaylord. You saw the Grand Ole Opry. You went to Broadway to do all the honky tonks. Y' all went to the Country Music Museum.

[Brian Preston]

It was everything.

[Bo Hansen]

It's like you came and you conquered this city.

[Millette]

Yeah.

[Bo Hansen]

In one fate, in one visit. So that's Just Yalls personality I get to feel. Is that correct?

[Millette]

I'm very much a planner. I need to have, like, what are we doing in the day? What is happening? And I like to know where our money's going. Like, we even have our own budget for the trip. Like, we. We make sure everything is allocated appropriately.

[Brian Preston]

How do you track your spending and your budgeting?

[Skyler]

So we just have a spreadsheet template through Google Docs, and over the last five years, I've molded it and tailored it to something that works for us and our lifestyle.

[Bo Hansen]

Have you ever thought about automating that with, like, a monarch?

[Skyler]

No, because I like the act of actually doing it after. Every time I buy something while I'm checking out at the grocery store, I'm entering it into my spreadsheet to make sure I don't forget.

[Brian Preston]

You're, like, doing Excel on your phone.

[Skyler]

Yeah. Using the Google Doc or the Google Doc.

[Bo Hansen]

Do you enjoy doing this as well?

[Millette]

I started it too, at the same time, like, even before we were single. We started this template by, like, kind of separately, but, like, same thing.

[Bo Hansen]

Okay, which country are we going to take over? I feel like you two is a.

[Financial Expert]

Is a force.

[Bo Hansen]

I mean, I'm trying to figure out where the chinks in this. This thing is, but y' all seem to be united in a lot of this.

[Brian Preston]

Oh, it's interesting. Right now, total household income for you guys is $173,000. And you just said, hey, you're about to get the certification where your pay is going to go up by 40 to $50,000. Right? So we're talking about a very young couple making north of $200,000 a year, which is just insane. Where are you guys going? What are the goals? Like what, when you think about what

[Bo Hansen]

are the struggles, I want to know also, what are y' all hoping to get out of this?

[Skyler]

Oh, yeah, One thing. Why the income is so high? I work three jobs on top of the civil engineering. I do private piano lessons, pulling in about $25,000 a year. And on top of that, I also work weekly at a church. They pay me about 200 bucks a week to play piano for the worship services. So I'm working maybe 55 to 60 hours a week just between those three jobs. So one of the chinks, I guess, is I feel like I work a lot, and I don't get a lot of time to just sit and relax or hang out with Millette. So I'd like to actually come down in the working. So I don't know how that factors in.

[Brian Preston]

But you said that's 50 to 60 hours a week.

[Skyler]

Yeah.

[Brian Preston]

What stops you from coming down?

[Skyler]

We only meet the 25% housing rule. If I keep that up. Yeah. Basically because of our mortgage being so high. Our monthly mortgage. Yeah.

[Brian Preston]

I think you share that. Your monthly mortgage. Right now, in terms of cash flow, I think it was a little over 3,300.

[Skyler]

Is that right? Yes.

[Brian Preston]

3,360amonth.

[Bo Hansen]

But you're also counting those sinking funds, aren't you?

[Skyler]

Yes.

[Bo Hansen]

Yeah, I think you're.

[Skyler]

We put a lot in there.

[Bo Hansen]

You got your. I think you got your thumb on the scale on. On your. On. On the pressure you're putting on yourself.

[Skyler]

Yeah, a little bit.

[Brian Preston]

50 to 60 hours a week working. What. What do y' all do when you're not working? Like, are you. Are you going out to movies and going to have liquids?

[Millette]

Lately, since we got a new construction house, we've been working on the yard, like making a yard for the last year. Every single weekend, we have something to do in the yard. And that's his job. But I tag along.

[Skyler]

I love it. Yeah. Since the background or backyards are completely unfinished, we've been putting in 1800 square feet of pavers by ourselves, building retaining walls, adding water lines, installing gutters, and I'm just YouTubing it, kind of figuring out how I. As I go, because I don't want to pay. I look at. We got some contractor quotes, and I was like, I could save so much money if I just invested the difference and did it myself. And I think it's fun. So that's what we've been doing in our downtime is just working on the house, pretty much.

[Brian Preston]

So, again, I want to think about the next 10 years. When you think about where you're at today and what you see your life looking at looking like 10 years from now, how's it look different? What things are different about you guys? In 10 years?

[Millette]

Hopefully we'll have kids.

[Brian Preston]

Oh, kids. You want to have kids?

[Skyler]

Awesome.

[Brian Preston]

Want to plan for a family? How many kids you guys want to have?

[Skyler]

I would like to. So it's easy to go on the rise of Disneyland, even. Yeah. She's a super.

[Brian Preston]

Who would have thought they planned that through. Who would have thought that?

[Skyler]

All right.

[Bo Hansen]

I'm a fellow Disney fanatic myself.

[Skyler]

That was one of the first things she saw when I showed her. One of your episode episodes was the partner style.

[Millette]

I loved it.

[Brian Preston]

All right. So want to have a family? When you have that family, will this house that you're currently in still work for a family of four. Great. That's not something we have to worry about. What do you think will change when you have kids?

[Millette]

I am hoping to, like, not have to work at least for the first, like, three to five years of the kid's life. The goal is for, like, Skyler's income to go up enough to cover my income.

[Bo Hansen]

I heard from a bird that he might make $40,000 more a year. That might just be once that certification comes in.

[Brian Preston]

But if there's. If we. If we add 40, but we take away the piano lessons and we take away the church, he got to keep. You got to keep working three jobs

[Skyler]

for that to work, or the goal is. No, but I know you kind of got to pick and choose what you want to do.

[Millette]

Yeah.

[Skyler]

If I cut back the extra jobs and just focus on the primary and she stays home, we go down to one income. I'd probably be hovering around 140 to 160.

[Bo Hansen]

When do y' all think you want to have kids?

[Millette]

I say three to five years because we're still young. We want to travel first and enjoy a little bit more of our 20s, and then hitting closer to 30s. Maybe.

[Bo Hansen]

If money wasn't an issue, would it still be three to five years? Or is it. Is the money making it extend out?

[Millette]

No, I think for sure three to five years. That's because I've always said, like, oh, I want to have kids around 30, and I'm 26. So that's why that's nearing the 30s.

[Bo Hansen]

Okay.

[Millette]

That's where I'm thinking.

[Bo Hansen]

And how close do you want to have the children? I think you've probably thought of these things because you seem like you're a planet exactly.

[Millette]

Around. No, no, no. Maybe two to three years apart. Because that's my and my brother's relationship. His and his brother's relationship is like that two, three year gap. And I think that's great. Like, as adults, we're great friends. Like, I like that relationship. Grew up together almost the same time.

[Brian Preston]

So you said one of the things you want to do is, like, enjoy your 20s before you have kids. Do you feel like you guys are doing that now? Like, are you enjoying the things that you're doing right now, or do you feel like, oh, we're pretty nose the grindstone every single weekend we're laying pavers and then I'm working three jobs?

[Millette]

I think we're easing up this year. Last year was very strict about saving up money. We got to get the house that's the goal in mind. We got the house and now we're like, okay, we got to finish the house. But now that the house is about to be done, now I'm like, okay, maybe we can start doing more trips. And, like, we already have a couple trips planned this year.

[Brian Preston]

Awesome.

[Millette]

So that's kind of where it's going. Like, all our money was going to the house. House is done. Now it's going to finishing the house. Almost done. So now we can start kind of living more.

[Brian Preston]

So what are some of the trips you have planned?

[Skyler]

We're going to be going to Japan next year for my brother's graduation trip. That'll be like a big trip with our families. And then I think we want to go to Mexico sometime.

[Millette]

Yeah. This year, go visit my family.

[Skyler]

Yeah.

[Millette]

My family lives in Mexico. So we'll be going maybe two times this year. And then like a friend's bachelorette trip in Utah next month. So, like, that's like more things that in the past we would have been like, oh, maybe, maybe not. Like, I don't know. And now it's like, yeah, we have some money to spend. Like, let's go have fun. Like, let's just do it.

[Brian Preston]

And are these like, the Japan trip, Mexico, Utah, these things that we have sinking funds for or are we just like, oh, we can do this out of cash flow?

[Skyler]

We have sinking funds for. That's part of the. One of the buckets in the 25 grand. Yeah.

[Brian Preston]

So one of the. You said there were eight buckets in there, right?

[Skyler]

Yes.

[Brian Preston]

And did I hear correctly? Like, one of the buckets was. Was registration for the automobiles?

[Skyler]

Yes.

[Brian Preston]

Is it very expensive to register automobiles in California?

[Skyler]

Not really, because our cars are so old. But since it is an annual expense, I think I put like $11.36 every month.

[Millette]

We put it there because all of those buckets are in a high yield sinking fund. So they are making money if we put them all together in that sinking fund. So it's just somewhere to pull money from so we don't have to stress about it, like, oh, we got to add it to the monthly budget. No, it's already in a sinking fund. Like, that's our logic behind that.

[Bo Hansen]

What do you fight about?

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[Bo Hansen]

Fight.

[Millette]

Not. Not really.

[Bo Hansen]

Y' all ever have a fight?

[Skyler]

Yeah, I still. Yeah, we do.

[Bo Hansen]

Fight about what? What's the issues that you'll fight about?

[Skyler]

Like, what are we eating tonight? Where do you want to go?

[Brian Preston]

Yeah, let me go and tell you that one doesn't change.

[Skyler]

Not really. Huge fights. I think we're still in the honeymoon phase. So we're still trying to figure each other out what makes each other mad. Luckily, we haven't hit that wall yet.

[Brian Preston]

What have you figured out so far? What do you think that you do that drives her nuts?

[Skyler]

I think a lot of the impulsive purchases. Sometimes you're the impulsive purchaser. I'm the impulsive purchaser. Yeah.

[Brian Preston]

I just heard that we're budgeting $11,

[Millette]

but it's also impulsive. Okay. We just had this earlier this year. We went to Vegas. We stayed at an Airbnb that had a water softener. He loved that water softener so much. The next week, he paid 1800 to get one installed on our house. That's the impulsive buys. He does.

[Skyler]

Yeah.

[Millette]

So I guess we do clash on that. I'm like, do you really need to buy that? Like, because he. He'll make the big, impulsive purchases. I'll go into the nursery and buy a little plant.

[Bo Hansen]

You all know what the definition of impulsive purchases, don't you? I mean, water softener.

[Financial Expert]

This is what we think.

[Brian Preston]

Yeah, it is.

[Financial Expert]

Golf clubs.

[Bo Hansen]

It's like, you know, exotic sports car. Without talking. I mean, he bought an appliance for the house. I mean, it's this.

[Skyler]

This is.

[Brian Preston]

Oh, was it the fact that y' all didn't have a conversation about it, or was the fact that he just experienced it, wanted it.

[Millette]

Because we had had that conversation, we said we were going to do it. From the time we got the house, we realized, oh, it has really hard water. Like, we should save up for it. And it was like a Save up for it in the future. Maybe after we're done with the backyard, we'll do it. But after that trip, within a week, it was installed. That was. Oh, wow. Okay. I guess we rushed that.

[Skyler]

Yeah, we always talk about big decisions like that, but it's. It's like, how long do we wait before we actually make the decision? That can be a point of conflict sometimes.

[Brian Preston]

So how did y'. All. How did y'. All, like, in that specific one, how. Where was the communication on how long you were gonna wait? Like you said, hey, we're doing it now. Hey, they're here to hook it up.

[Skyler]

I basically said, we started shopping. We're like, all right, we could. We could do this. We have enough. We have half the money in the sinking fund.

[Millette]

We had our sinking fund of house improvement. So that's money that we are allocating to improving the house. So he's like, hey, we already have 2500 in here. Like, the. The water softener is going to be about that much. Like, should we just do it? And I'm like, really? Like, go get quotes. Go get, like, the best people. Like, check on every single person that. Coming into our house, background, whatever, make sure they're certified. And he's like, oh, yeah, I found our neighbor. He works as a plumber. He does great work. And he'll charge us 25.

[Bo Hansen]

Yeah.

[Skyler]

And then we just cash flowed the rest because luckily we have quite a bit of discretionary money. After the end of each month, we just lower the amount we're putting in the sinking funds, and then we just apply it to whatever we want.

[Brian Preston]

All right, so impulsive purchases is what you think drives her nuts? What do you think that you do that drives him nuts?

[Millette]

I do a lot of little purchases, but for, again, hobbies. We live near Disneyland, so I like to go there a lot.

[Bo Hansen]

You're a season ticket holder, I'm assuming, though, right?

[Millette]

No, not this year. We. I used to be when I was single. It's really expensive. Like, their tickets are like sixteen hundred dollars for a passholder. So.

[Bo Hansen]

But how many times are you going?

[Millette]

Well, this year we've gone three times.

[Bo Hansen]

Okay. Well, okay. Yeah, you're right on the line.

[Millette]

My impulsive buy is like, I'll see the little trinket or the little pins or the little things, and I like to buy those collectibles. Right now, like, as of this year, I like getting into plants because now that we have a house, I'm trying to decorate it and do little plant things, and now I'm buying Like, pots and soil and how to repot the plants. And I'm learning all this, and he's, like, seeing that, like, another plant. Like, where are we gonna put this?

[Skyler]

Yeah. It's starting to look like Rainforest Cafe in our living room. Yeah.

[Millette]

So that's kind of the biggest, like, conflict. But it's.

[Brian Preston]

Is it the spending or the clutter that is the issue?

[Millette]

I think both. Like, I am clutter. Like, upstairs, we see our office, and you see his desk completely neat and perfectly good. In my office, since I don't really work there, I work at an office. My desk is just a mess. So that's really a big sticking point in our relationship.

[Skyler]

I say it's more the clutter. It's never an issue of can we afford it, because we know we always can. It's just like, do you need another one? That kind of thing, you know, because

[Millette]

he's very like, I like things I like. I have a lot of clothes. I have shoes. I see a purse I like. I'll just buy it. But he's like, I don't need another shirt. I don't need shoes. Like, he has the same.

[Brian Preston]

I just need a water softener. I don't need shoes.

[Millette]

Yeah, he has the same three pairs of shoes since hats, since college. Like, I don't think you've bought shoes since you've been out of college.

[Skyler]

Nope.

[Millette]

But he doesn't need that stuff. And for me, I like the little knickknacks, the shoes, the purse.

[Bo Hansen]

So far, I mean, y' all are, like, the ideal star students. I mean. So I'm trying to figure out, you came on Making a millionaire. Do you know? Because I actually read in the notes, you want to be a millionaire by the time you're 30.

[Skyler]

That.

[Bo Hansen]

Was there a why to it?

[Skyler]

No, that was just like, okay, that'd be cool to hit this number. But after I applied, after I submitted that question, I started running the numbers, and I realized, okay, that's not gonna happen unless we're saving, like, you know, 80% of our income. So I've kind of gotten away from that. Okay. I know it might not happen when I'm 30, which is fine. I don't plan on retiring when I'm 30. I'm just getting started in my career. But our end goal, we'd like to actually be, like, work optional, around, like, 50 to 55.

[Bo Hansen]

Okay.

[Skyler]

So that's where a lot of our, I guess, questions come from. We want to know if we're on the right track to do that based on Our current investing and savings rate. And the unfortunate thing is there's not a lot of people around us that we can kind of talk to. The people we can talk to are in similar financial situations, are a lot older. And then the people my age are still trying to figure out if, you know, what alcohol we buying this weekend, that kind of thing. So we're more like. We don't know where we're at. We don't know if we're behind the curve. On the curve. That kind of thing. Yeah.

[Brian Preston]

So, all right, let's talk about this. If we think about work optional, life around 50 to 55. All right, what's it look like? How much money do you need to be able to spend at age 50?

[Skyler]

So we would like to be at $120,000 after take home per year.

[Brian Preston]

How'd you come up with that?

[Skyler]

Yeah, $10,000 a month. And then that's what I based off all my calculations on having about $3 million invested.

[Bo Hansen]

But y' all don't spend $10,000 a month. You spend currently somewhere between five to six thousand dollars a month if you take out the sinking funds.

[Skyler]

That's true.

[Millette]

Yeah.

[Skyler]

That's based on the current. With the sinking funds. We don't want to stop the sinking funds, I guess even after we stop working, which is this is how our

[Millette]

wire buckets, giant buckets of money. Like, oh, If I have $10,000 on my entertainment fund, then, oh, I have. I can plan a big trip with that money. Like, I don't know. We just keep adding to those buckets every month. And as they grow, I can see the opportunity for more.

[Bo Hansen]

Do y' all ever worry about fatigue? Of. Cause, look, I was. I actually resemble y'. All. My wife and I resemble y' all a lot. But I will tell you, as you get in your 30s and 40s, you're not going to want to track every dollar forever. I mean, plus, it creates weird dynamics. Once you start staying home with the kids, it could be some weirdness, but you probably might take over the finances, even with the kids. It's just that I'm trying to make sure y' all grow into the best version of yourselves. Do you think you'll always want to stay on such a tight budget system versus what we call kind of a manage, you know, money system to where you kind of automatically have the money going, but then you just. If there's money left over, you go and live your best life. Give me some thoughts on that.

[Millette]

I mean, I've never really thought about any Other life without spreadsheets, I guess, because since we were teenagers, I love it.

[Brian Preston]

I mean, that's a T shirt that says, I've never thought about life without spreadsheets. Oh, that's amazing.

[Millette]

That's how we've been, like, in a way, growing up. Like, we've been. I've been doing it since I was 18. You've probably been doing it since earlier. Just kind of like, that's just the way of life. Like, we've been, like, tracking our spending. Like, like I said before, like, I'm kind of in a mindset that I'm scared to not have money. So, like, the spreadsheet is like a security blanket. I'm like, I make sure there's money there. And, oh, yeah, we have $500 left at the end of the month. Cool. Like, we can put that into, like, the brokerage account or, like, the more savings or even more entertainment. Like, if that month we want to do something extra. Oh, we have, like, $200 left at the end of the month. Let's just put it towards that. It's like a security that I've always, like, didn't grow up having. And now I see it like, oh, we have money left over at the end of the month. That's crazy.

[Brian Preston]

If the goal is work optional by 50, 55, and you just said, hey, I want about $10,000 a month after tax, $120,000 a year in today's dollars to be able to spend. And if we're going to, like, have two kids. Exactly. And they're going to be. Exactly. Probably three years apart. Because we're going to plan this through, and we're going to drop from 1. From 3 jobs down to 1 job, drop from 4 incomes down to one income. Can you do that on 140,000? Like, at $140,000, can you save 25%? If you save 25%, is that going to get you to this goal?

[Skyler]

We haven't actually run the numbers yet on that new income. Everything we've run is based on the now. I guess that's kind of our downfall because we're so focused on, like, what's happening tomorrow. And right now we're not thinking, like, one, two, three years in the future.

[Brian Preston]

So let me ask you this question. Let's say that we did the numbers for you. We ran it. We're like, hey, guys, it doesn't get there. Oh, man. It just. It doesn't. Oh, it doesn't work out. So you're gonna have to. If you you have to keep working three jobs until you're 50. How do you feel about that?

[Skyler]

Then that's what happens. I guess I don't make the rules

[Millette]

you don't want to.

[Skyler]

I just follow them.

[Brian Preston]

What I'm trying to illumine here is that there's a lot of life, 23 and 26. There's a whole lot of life that's going to happen between now and the time that you guys turn 50, right? I mean, just job changes, family changes, unknown unknowns that you're just not even prepared for. And I think so often we achievers and planners, we so desperately want to have the entire plan planned out where what we say on the show all the time is that when you're early on, when you're starting out at the beginning, it's more like throwing horseshoes, right? You're not trying to be laser precise. You just want to kind of get in the general direction. And we say get in the general direction. For most folks, if you can save 25% and I'm going to go and tell you, even at your age, 25% is not even going to be required to get there, you're going to be in a great spot. But what I hear is like, or what I worry about is if something were to deviate, if something were to throw you guys off of your plan right now, how would you handle that?

[Skyler]

The first thing would probably have to change would be our lifestyle. Stop saving that much into the extra buckets. That's where most of our margin comes from. And I think that'd be the easiest thing to kind of trim down if something did affect it and we weren't able to bring as much money in.

[Brian Preston]

So if the goal is 50 or 55, talk to us about where your savings, you said 25% savings rate. Walk us through. Kind of like your financial order of operations. Where's your savings going on a month over month basis right now?

[Skyler]

Yes. So I have 9% going into my 401k. There's a 3% match. I also have the Roth IRAs. Both of our Roth IRAs are getting maxed out every single year. And on top of that, we are putting $1,000 a month into a regular taxable brokerage account. Originally we earmarked this as a pay off the house early when the the balances meet up. But now we're starting to think it's going to be a bridge account because since our interest rate is super low, we'd rather just hang on to the mortgage like a.

[Brian Preston]

And it's like music to my ears.

[Skyler]

Yeah.

[Bo Hansen]

And that's at least until you're over 45.

[Skyler]

Yeah.

[Bo Hansen]

Because there's gonna be. With the kids, there's gonna be a lot of life. You want that margin just to make sure you're there.

[Skyler]

And I know you guys always say it's always good to have the ability to pay off the debt, then to just pay it off and then what

[Brian Preston]

retirement account for you?

[Millette]

Through my job, I have a 457 account. I put in 250 bucks a month paycheck into that, so 500amonth. And then I have a pension through my job because it's a state job. So I put 8% into it through my paycheck, but then I get reimbursed 3%. So it's really putting 5% of my. Okay, 5% out of my money.

[Brian Preston]

So they don't actually put the 3% into your pension. They pay it back out. They pay it back to me.

[Millette]

Yeah, put it back into my pension.

[Bo Hansen]

You sure they're not putting more money also into the pension?

[Millette]

I don't know. And I don't think so because usually

[Bo Hansen]

government pensions, like I know the government that I used to work with, we had our employees put in 8%, but when we were putting in 11%, the government was, because the mathematics worked out that we had to pre fund a ton of the assets because people retire at 50, 55 and you got to guarantee that that money's there.

[Millette]

Yeah. To like, for my job is a very entry level job and it's also not like a permanent job. It's only for three years. So to my understanding, it's only I, I put 8%, they refund me 3%. And then I'm sure as I get higher in the, I guess the government, but no, but not.

[Bo Hansen]

Well, what's the vesting do you know, on your pension?

[Millette]

I have no idea.

[Bo Hansen]

Okay, we probably want to find that out.

[Brian Preston]

On your 457. Is that Roth contributions going?

[Millette]

Yes.

[Brian Preston]

Awesome. And then on your 401k, everything's Roth.

[Skyler]

But that is at my current employer, when I switch to the new job, it's going to switch over to a pension and then a 457.

[Brian Preston]

So same likely going to be saving the same amount though, probably 12%.

[Bo Hansen]

You know what's great about those 457s?

[Skyler]

We don't actually know the difference between the 401.

[Bo Hansen]

You retire at 50, 55. There's no early withdrawal penalties.

[Skyler]

Really.

[Bo Hansen]

So it's going to be sweet. Yeah, it works. Out quite nicely with.

[Skyler]

We chose right because she had the option to do a 401k or 457 and we kind of just rolled the dice. We're like, choose one.

[Brian Preston]

Because it was the same. There's not matching.

[Skyler]

There's no matching. Okay, yeah.

[Brian Preston]

Then yeah, that's a great. Assuming the investment options are pretty good, that's a great way to choose. What questions do you have for us? What are some things that we could speak to or answer to be helpful for you guys?

[Skyler]

Since the. The profit sharing and the employer match at my current job goes into a pre tax bucket for the 401k as I'm leaving, should I take that money, pay the taxes on it right now, and then roll it into the Roth or should I leave it? Or that kind of. Because I also don't want to break that pro rata rule because I expect my income to go over the 240 limit with the backdoor Roth. That kind of thing. I don't want to. I'm really unfamiliar with those types of rules and tax strategies and all that. So I want to make sure I'm doing it right.

[Brian Preston]

Well, the great news is right now you don't have to worry about backdoor Roth because the income is below the threshold where you can contribute directly. But if it does go up, you would want to perhaps keep that intact. One of the things you want to check with both your 4 or specifically with your 457 provider with a new plan is will they accept rollovers from other retirement plans? Most will. Most will allow it. Some will have restrictions on there. But assuming that's the case, you can roll your 401k from your old employer into the 457 with a new employer. Potentially, you'll have to verify that because there are some unique nuances and rules you'll. You'll want to ch. Check on. But that's something that you have some time to figure that out. Because there's also nothing wrong with leaving your 401k if your current company is with a really good provider like a Vanguard or Fidelity or something like that, you can leave your 401k behind and still take advantage of the investment option there. You don't have to move it, don't have to roll it over. So that's something to potentially consider.

[Skyler]

Okay.

[Brian Preston]

On the Roth conversation y' all live in. I live in California. Right. So you're in a relatively high income tax situation federally and then.

[Millette]

Right.

[Brian Preston]

You add to that the state piece,

[Bo Hansen]

because what's your state income Tax at your income.

[Skyler]

I think it's like 14.

[Bo Hansen]

Well, it's probably, it's because. Because I think they, you know, it's 13, 14 once you're over. Okay, but I bet it's. I bet it's somewhere between 6 to 10%.

[Skyler]

Okay.

[Bo Hansen]

And then you're in the federal 22 bracket right now. So I mean it's just, it would break my heart to watch 30% just evaporate just for the sake of turning it into Roth when you all have the ability. Exactly what Bo said. You can go ahead and fund Roth on, you know, with your Roth IRAs every year because Yalls income is not that high and you'll likely couldn't choose Roth 457s or. That's one of the things we'll look at when you're trying to figure out Roth 401k or 401k versus 457. I'd love to know, do they offer Roth options on both of those? Because then if they have Roth457, that would be pretty powerful too.

[Brian Preston]

On your side income, the income that comes from the church, how do they pay you?

[Skyler]

I'm a W2 to the church and the piano is self employed.

[Brian Preston]

How much did you say you're going to be making through the teaching?

[Skyler]

24 grand. 24. It's about $2,000.

[Millette]

You have about what, 10 students?

[Skyler]

Yes, 10 students.

[Brian Preston]

10 students. So there's some fun stuff you can do in terms of like tax planning with that. Given that it's self employed income. Give us a side, you know, side income. Do you think I'll have to start making estimated payments on 24 grand? If his.

[Bo Hansen]

When you'll do your taxes. Are you getting refunds currently?

[Skyler]

No. We actually had to pay a lot last year because I filled out my W4 wrong. When we got married, I didn't do the extra withholding check so we just paid like eight grand. Oh wow. Last year. But luckily we had the money. It wasn't an issue. So now it's just more like a. Okay, lesson learned.

[Millette]

A lesson learned. Let's not do it again next year.

[Bo Hansen]

It all depends. Is your income going up? I mean, do you count on. I know it sounds like you make $40,000 more but hopefully there's some family planning that comes into play. It all goes into. Because a lot of times you just got to make sure you're paying greater than what you paid last year. And then once your income gets over a certain level, you got to pay them greater than 110% of last year. And if you were naturally getting pay raises and the withholding was naturally protecting you, then it's nothing wrong with you giving the government the money in April when you either file your extension or file your tax return because you wouldn't have any penalties. The big things is we're trying to make sure if all of a sudden your income started going down or you know, from other sources, but you're making it up through the side hustles.

[Commercial Announcer 2]

Yeah.

[Bo Hansen]

You want to make estimated tax payments because the worst tax in the world is those penalties because it's just unforced errors. It's just giving away free money. So it a little planning and it's gotten to the level. This is one of the things because you are doing so many things well that even for like a financial planner I would throw you all back in the water and say you're close but you know, you just basically need somebody to go through and do the math exercises with you and you know, and then make sure you're in the right path and wait until you add more complexity with success. And this is, but this is one of those areas where tax planning that I think that somebody could definitely add some value to the conversation.

[Brian Preston]

Then you said that you are changing jobs this year.

[Skyler]

Right.

[Brian Preston]

Contributing 9% to your 401k but it's 9% of the comp you've made so far this year. Right. And then with this new job, you're going to be paying into a pension, have access to 457.

[Skyler]

Yes, correct.

[Brian Preston]

So really unique thing this year you want to make sure you think about is with this side income there's even a potential you could do a solo 401k and you could potentially this year will be unique because you already contributed to a 401. But in future years you might be able to like make all of that income disappear because you can contribute to 457 through the government job and the 401k through the solar. Really, really exciting way to double dip on your retirement savings. Not that you guys necessarily be saving more.

[Bo Hansen]

That is a completely legal loophole in

[Brian Preston]

the way that you save. It's going to be a really good way to drive that income down super, super low. Because you're not participating in 401k elsewhere this year. You want to make sure you're careful. You guys self repair your taxes. You have an accountant.

[Skyler]

We had someone do it awesome for us.

[Brian Preston]

So this year the question you want to ask, and we'll mention this as we kind of Go through our planning is you'll want to make sure that you don't put too much into the solo 401k that you over contribute. Between what you did with your current employer and the new Solo 401k in those two, you're still capped at the 24,500. Yeah, that got real nerdy real fast.

[Skyler]

That's.

[Brian Preston]

There's some exciting things to do there. All right, what other questions do you have for us?

[Skyler]

One of the questions I have is, are we too cash heavy in the. In the sinking funds? Because the likelihood of us using all that money at the same time is very low. And me looking at it, I know cash is not making much money just sitting in the high yield savings account

[Millette]

he wants to invest.

[Bo Hansen]

Let me ask you, because this is. This is where. This is where I catch the financial mutants who are fibbing on both sides of this thing. You said you want us to plan for $10,000 a month?

[Skyler]

Yep.

[Bo Hansen]

What do you actually spend a month?

[Skyler]

We spend $5,000 a month.

[Brian Preston]

Like, that's actual spending.

[Bo Hansen]

Do you see how unique this is?

[Skyler]

That's only spending. Yeah. Bare bones, nothing else.

[Bo Hansen]

So emergency reserves wise, I mean, y' all probably would be fine doing six months, you know, three to six months. You know, I'd rather go a little conservative since you already have the cash. So if you think about that, you know, 30 grand and you guys have over 50. So, I mean, yeah, you're probably. You're in a pretty good place with your cash.

[Brian Preston]

And tell me, okay, so sinking fund, we have vacations. Those are big expenses. New car, big expense. What were the other ones? That was two. There was eight of the eight in there?

[Millette]

Yeah, like house maintenance and house improvement.

[Brian Preston]

Like house, like house improvement. Like, what's an example of a house improvement?

[Skyler]

Like, the water softener is improvement.

[Brian Preston]

Like an eighteen hundred dollars expense.

[Skyler]

And then so anything new that we want to add to the house that would probably increase the value, like landscaping, you know, installing gutters, that kind of thing. That's improvement. Fixing the stuff that's already there. Like a broken appliance or water here, that's the maintenance, and we separate it.

[Millette]

Like, I don't know if that's, like, in our brain or in my mind. Like, the buckets work like, oh, I have this much in this bucket, this in this bucket. But, like, should we be combining and making our life easier or is that, like, helpful?

[Brian Preston]

In my opinion, yes. But I want to be very careful not to impress our bias upon you guys, because if what you're Doing is working. There's something to be said for that. I would argue it's a little over complicated and over conservative. Because realistically, if you have $30,000 in an emergency fund, and that's truly an emergency fund, and you decide you want to go buy, and you decide you want to go out and buy a water softener, and you're telling me you have thousands of dollars of discretionary income every single month left over after you've done all your spending, then I would argue that $1,800 could just kind of probably come out of that. That is not something that necessitates a sinking fund. Now, replacing an automobile, going on a big trip makes all the sense in the world. But these little things like $11 a month for annual car registration, we do that. Perhaps we're majoring in the minors there. Again, I don't want to break your system because if it's working for you guys, and look, we desperately try to pull some conflict out and you guys don't have any yet. So I don't want to suggest you got to change things, but in reality, you probably could simplify, probably could streamline, be a little more efficient. And when you add efficiency, generally you tend to add effectiveness, which would prevent you from holding so much cash and maybe have some of that cash working for you.

[Bo Hansen]

I see y' all as having enough assets that we ought to definitely find out ahead of the curve, behind the curve, right where you're supposed to be. But then after that, you'll need a financial enabler in your corner.

[Brian Preston]

If I could go back in time, life has turned out pretty good for. But if I could go back in time and change one thing, when I was in my 20s, pre kids, I'd have gone to more Tuesday night movies and I'd have gone to more coffee shops, and I've done more of that little stuff. I was so tight and so worried about saving every dollar and hitting every single thing that I assumed that that sort of thing was going to break the plan when realistically, the behaviors that I had in place, the plan likely was not going to break. And I don't think that that survivorship bias just because I made it to the other side. I do think realistically I could have not focused so much on being perfect so early, and it probably would have allowed me to do more of those things. But again, sounds like you guys are already doing a lot of that. I just want you to recognize that's something that I'd go back well and

[Bo Hansen]

I would give you the guidance, doing exercises. A couple. Because y' all are a little different in the fact that you said you have little things like the trinkets from Disney. You know, you don't need a sinking fund. You just need to have a conversation. Is that we're just going to make sure that you get to do what brings you happiness without regret. And then the same thing for. For you, Skyler. Is it, you know, what are the things that there's like, nerdy little gadgets. Because I'm a gadget person, too, with the water softener.

[Skyler]

I would like a play car.

[Brian Preston]

Let's just make sure a play car.

[Skyler]

Like an extra car that I can, like, mess around with. And like a little car.

[Brian Preston]

I thought he meant like an RC car. I was like, dude, go get one.

[Skyler]

Because I've never driven a manual car before and I've always wanted to learn, but I need to buy one in order to learn.

[Millette]

So another one of your, like, hobby goals?

[Skyler]

Yeah. Because our cars are old. That's also one of our big goals. We or she wants to upgrade a car, but we have a Honda pilot. It's got 300,000 on it. And we also have a prius. It's got 220,000 on it. And they've lasted this long because I take care of my cars.

[Brian Preston]

Sure.

[Skyler]

But eventually we would like something new, and we're getting bored of the old reliable cars. We want something new. But that's one of my impulse buys. I'd like. I want a Honda fit, those little rally cars, and I want to modify it to be able to, like, drive in the desert, that kind of thing.

[Brian Preston]

But that. Not your daily driver. This is.

[Skyler]

No, not my daily driver. So that's one of my impulses I've been thinking about for.

[Brian Preston]

That's a wonderful sinking, fun thing to build for. Right.

[Millette]

Another one he has. It's the pilot's license.

[Bo Hansen]

Okay.

[Millette]

He has been talking about getting a pilot's license since I can remember.

[Skyler]

So since I work in aviation, I'm always on site on the airports, doing construction, doing the construction, management. So I'm always talking to the tower or the pilots, and I always see those guys flying up in the sky. I'm like, that'd be so cool to do it. But in California, it's going to be a 20 to $30,000 just to get a private pilot's license. And that's one of my other goals. But I don't know really where that fits in to the fu. There's no pilot's license step.

[Bo Hansen]

No, it Is, I mean, it's because those are kind of abundance goals.

[Brian Preston]

Once you're saving 25%, everything else is fair game. Honda Fit, rally cars, airline becoming a private pilot, all those things are fair game. Once you've checked the box and done what you need to do. They're not additional things you have to build into your budget. You get to spend freely. That's why we have the 25%, so that you can spend freely and not be concerned about it.

[Bo Hansen]

See, I feel like now we're starting to get the real stuff out. You wanted to make sure that y' all got the star student award first. You know, put the gold star next to you before you now. And you don't have to be bashful. If it brings you joy, if it brings you happiness, it's okay to spend this money. Because that's the thing sometimes with us financial mutants. We're so tight. When we're so good at saving and we're rewarded by it by building these nice net worth statements, it's okay for somebody to be in your ear going, do it. Go enjoy yourself. Because I want you to live this life with so much excitement and zeal that when you get to be my age, you go, well done.

[Brian Preston]

Awesome. We're excited to get to work. We'll put together a plan and see what path are you guys on. And is that path the path you want to be on? Yeah, I have a feeling it's gonna be.

[Bo Hansen]

Yeah, it's gonna be great.

[Brian Preston]

So awesome. Thank you guys so much.

[Skyler]

Thank you.

[Millette]

No, thank you guys.

[Brian Preston]

Brian, what an awesome conversation with Skyler and Millette. And honestly, I don't know exactly what to say because, man, they're doing a lot of stuff really, really good.

[Financial Expert]

This one threw me a little bit because I came in thinking I was going to bring in some old man

[Bo Hansen]

wisdom because I was like, look at

[Financial Expert]

these young financial mutants. There's no way they're doing everything right. Surely they're leaving something behind. Because I was like, it's not uncommon. We see people who are so amped up about saving for the future that they're doing that at the expense also of building memories and enjoying today and so forth. Surprisingly, when Skyler and Malek came in here today, they're actually not only great at saving and building wealth, but they actually have been doing a very good job of making memories. I mean, even the fact when they came to Nashville, they had like a hit list that took out the entire city in like a two day period as well. Really impressive couple.

[Brian Preston]

Yeah, they're doing a lot of stuff. Right. But they still have some unknown things coming their way. And so I think when we broke down their savings strategy, where they're at currently right Now, Skyler's putting 9% in his 401ks getting a 3% match. Millette's putting money into her 457. On the Roth side, they're both maxing out Roth IRAs. They have 1,000 bucks a month going the after tax brokerage account. So when you look at their savings rate, they're currently saving more than 25%. So they are doing exactly what you want a financial mutant to be doing. And this doesn't even factor in Millet's pension. So like they're doing the hard work even if there wasn't a pension there. The future looks pretty bright for them. When I, when I think about where they sit right now, I'd argue even at the young ages of 23 and 26, they're kind of like in step eight, that's where they are in the financial order of operations.

[Financial Expert]

So let's actually, let's see if we can actually add some value to these overachievers. I was happy to see, well at least happy to see we have an opportunity to have some value here. There's a unique thing with the fact that a 457 is on the table plus enough side income to where a Solo 401k could be really powerful.

[Brian Preston]

Yeah, it's really interesting. As he changes jobs, he's going to go from having access to a 401k to now a 457. And those exist in two different parts of the tax code. So one of the things he could potentially do with some of the side income he has coming in, I think he said it was like $33,000. Right now it's all taxable. And so if you were to receive that income, pay tax on it as a, as a self employed sole proprietor, he's going to pay about $9,200 just in federal and state income taxes. But if he were to in future years be able to open up a solo 401k, he could still defer 24,500 into that solo 401k. Rather than showing $33,000 of taxable income, he's only going to show about $8,500 just doing that. You know, shifting that 24,500 into the 401k would save them almost $7,000 in taxes in total. So it's a great tax savings opportunity. Not not that they necessarily need to be saving more, but it is an opportunity to save money in taxes. Now, there is one thing that we were talking about. He has to be careful this year because he's transitioning jobs. This year he was contributing to a 401k at his previous employer. So he's not going to be able to do a full 24.5into a solo 401k. He's gonna have to coordinate to make sure he doesn't run afoul of that salary deferral limit.

[Financial Expert]

Another great benefit of this is that because they are so young, adding flexibility in the system, that they did want to leave the workforce early, that 457 is not going to have their early withdrawal penalties.

[Brian Preston]

That's right.

[Financial Expert]

So one more planning flexibility element that they'll have not only with the tax savings of the Solo 401k, but also just having easy early access to the 457s.

[Brian Preston]

And they've already. They let us know that, you know, they're both doing Roth contrib, which we think makes a ton of sense for them. We did a little bit of analysis. It looks like they're going to be in the 28% total marginal marginal tax bracket. And so they kind of fall in that gray area where they could do Roth or they could do pre tax. It kind of depends on what their goals are. If they find the cash flows a little tight, that might lend them towards doing pre tax so that they free up monthly cash flow. But we do love at their ages loading up those Roth dollars. So it's a bit of a, of a personal decision for them based on where they ultimately want to go.

[Financial Expert]

Yeah, they're in that gray zone where I'd still probably just this is my personal opinion, probably lean more towards the Roth because I think they're going to have even bigger peak earning years in the future. And there's only. So you're only in your twenties for so long where you can really lean in heavily on that compounding growth and that wealth multiplier.

[Brian Preston]

So we've already acknowledged they're doing a lot of stuff. Right. So, you know, what kind of path does this put them on? What sort of trajectory does it put them on? We just had to. They continue saving at their current clip, which is a little under $44,000 a year starting right now at an average age of 25. And they save 25% of their gross income over the next 30, 40, 50 years. The numbers get really exciting again at their age, we assumed a 9.5% annualized rate of return. By the time that they get out to age 50, they have almost a $5.8 million portfolio. By 55, almost a $10 million portfolio, and then by 60, over $15.6 million. And even if you bring that back into today's dollars, they said they don't know exactly what their lifestyle needs are going to be, but they love, like, maybe $10,000 per month after tax based on what they're doing. They are well on their way to doing that, accomplishing that at some point between 50 and 55 years old now.

[Financial Expert]

But we know life has a sense of humor in the way that it throws curveballs. And, you know, and we were kind of joking around about the life planning. When children and other stuff. There is a chance that they could choose the, you know, a path where Millette stays home. What would it do? Would it blow all this up, or does it still look pretty rosy even if they did some family planning?

[Brian Preston]

Yeah, I think even if the side income were to go away and Millette were to stay home, I don't see a scenario where they don't save 25% for this household. That is sort of a given. So even if the income dropped down to $140,000 a year and they were saving 25%, which is $35,000 a year, they're still in an unbelievable trajectory. Almost 5 million by 50. Little over 8 million by 55, 13 million by age 60. Again, if they're looking for that, that magical, you know, $10,000 after tax, it's probably still happening somewhere around that magical 55. If they can just keep the good decisions they've been making up to this point rolling forward, future's bright for them.

[Financial Expert]

So if you do it right early, you can do it light.

[Brian Preston]

You do it right, you do it light.

[Financial Expert]

See, that's what I think that is the big takeaway from today's show, because I know this is gonna be one of those things where audiences go say, I'm like, man, where were the warts?

[Brian Preston]

You get away with a lot when

[Financial Expert]

you start early and do it often. Lots of gracing your great big beautiful tomorrow.

[Brian Preston]

But we also don't know what could change, right? Kids, family, job, circumstances. What I love is they've made the hard decisions to kind of put themselves a little bit ahead of the curve. Now they got to finish the drill. But I think that because they're doing so well so early, they're going to be able to handle whatever life throws at them. If they can continue to keep that mutant mindset moving forward.

[Financial Expert]

So if there's other financial mutants that want to come on Making a Millionaire, where do they need to go?

[Brian Preston]

Yeah, if you want to be a guest on Making a Millionaire, you can go to moneyguy.com apply or if you want to check out any of our free resources or tools, you can go to moneyguy.com

[Financial Expert]

Skyler Millette, you get a gold star. Did you hear that? You rocked this thing. Thank you so much for coming on. I'm your host Brian joined by Mr. Bo Money Guy team Out.

[Show Disclaimer Narrator]

The Money Guy show is hosted by Brian Preston and Bo Hansen. Brian and Bo are partners with Abound Wealth Management. Abound Wealth Management is a registered investment advisory firm regulated by the securities and Exchange Commission. In accordance and compliance with the securities laws and regulations, Abound Wealth Management does not render or offer to render personalized investment or tax advice through Making A Millionaire. 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. The guests featured on Making a Millionaire are not clients of Abound Wealth Management at the time of recording. Their participation should not be considered a testimonial or endorsement of Abound Wealth Management.

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[Skyler]

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So do like I did and have

[Skyler]

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