How 595,000 People Reached MILLIONAIRE Status (And How You Can Too)

Summary

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Money Guy Show: “How 595,000 People Reached MILLIONAIRE Status (And How You Can Too)”

Hosts: Brian Preston & Bo Hanson
Date: October 22, 2025

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Overview

This episode focuses on the surge in American millionaires, specifically highlighting how 595,000 new millionaires were created through one accessible strategy: maximizing the 401(k) retirement account. Brian and Bo dig into Fidelity’s latest data to explore why the 401(k) is still the unsung hero of wealth building, break down foundational principles for financial independence, and answer nuanced listener questions on topics from Roth conversions to effective charitable giving. Their conversational style is both encouraging and practical, reinforcing that the path to wealth is accessible with discipline, time, and the right strategies.

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Key Discussion Points & Insights

The Power of the 401(k): Road to a Million (00:44–11:21)

• Fidelity Data Highlight (01:27)

  • 595,000 individuals have reached millionaire status in their 401(k) accounts, up 16% from last quarter.
  • “Once you know it, that’s 595,000 individuals out of 24.6 million 401k participants...that’s about 2.4%.” – Bo Hanson [01:27]

• Why the 401(k) Works (02:35–04:26)

  • Debunks common social media skepticism about 401(k)s being outdated or less effective than crypto or whole life insurance.
  • Three ingredients of wealth:
    1. Discipline: Automates saving, hard to quit.
    2. Money: Employer matches are “free money.”
    3. Time: Compound growth accelerates over decades.
  • “All you have to do is select a number. I want to put in 5%, 10%, whatever that number is. And then you are off to the races without having to think about it…” – Brian Preston [03:35]

• Automatic Enrollment & Policy Changes (04:26–05:47)

  • Recent legislation encourages employers to auto-enroll workers, watering “the garden of opportunity.”
  • “If you look at the data...the government is encouraging employers to create automatic enrollment...the next generation is going to be rewarded for it.” – Bo Hanson [04:26]

• Get the Free Money (06:36–07:54)

  • Employer matches are vital; not maximizing means “literally leaving money on the table.”
  • “It’s a social media crime when I see people trashing...it’s only 3%. Only 3%?...That’s $1,500 if you make $50k. Every one of you.” – Bo Hanson [06:36]

• Order of Financial Operations (08:07)

  • Their nine-step “Financial Order of Operations”: after basic security, step two is never to miss employer 401(k) match.

• 401(k)s as Forced Savings (08:38–11:21)

  • 401(k)s and home equity are the most common sources of American wealth because they enforce “stick-with-it-ness.”
  • “There’s something magical about this whole compounding growth thing.” – Bo Hanson [09:36]
  • “For a 20-year-old, a dollar can turn into $88 if you can give it time.” – Brian Preston [09:36]

Listener Q&A Highlights

Roth IRA Contribution Limits (15:21)

• Can you contribute $7,000.49 to a Roth since the IRS rounds?
  • “Just because you can do something doesn’t mean you should… Stick to $7,000.” – Brian Preston [15:37]
  • Most custodians automatically enforce annual limits.

401(k) Contributions with Multiple Employers (18:00)

• Max salary deferral is across all employers: $23,500 (2025). Employer contributions can be higher but are subject to separate limits.
  • “Employers can do multiple sources…But with a 457 plan, you can double dip salary deferrals. That’s a major hack.” – Brian Preston [19:04 / 20:23]

Counting Credit Card Rewards as Savings (20:59)

• No—you shouldn’t count cash-back as “savings.”
  • “Saving is saving and consuming is consuming…credit card rebates are gravy, not savings.” – Brian Preston [22:13]
  • “Don’t get busy doing nothing—it’s just not worth it.” – Bo Hanson [22:56]

Investment Property Equity (26:02)

• Should you leverage built-up equity in low-mortgage investment properties?
  • Generally not, as re-leveraging at higher rates adds risk.
  • “You are now going likely further out on the risk spectrum...I don’t think that makes a ton of sense.” – Brian Preston [26:02]
  • Use properties for steady cashflow or as part of a broader diversified retirement plan.

Financial Advice Before Marriage (38:19)

• Key: Open communication about money, debt, accounts, and life goals.
  • “It’s amazing when one is a saver and the other is a spender—it creates a lot of friction.” – Bo Hanson [38:38]
  • “Secrets kill marriages…you want to have open conversations about what you have going on.” – Brian Preston [41:41]

Roth Conversions and Pension Income (44:09)

• Roth conversions aren’t always optimal—consider taxes, liquidity, and estate plans.
  • “It has to be a very deliberate calculation to make sure you’re taking advantage of the lowest tax rates possible.” – Bo Hanson [46:17]
  • “Retirement is not just a 4% rule. Roth conversions are nuanced and have huge implications.” – Brian Preston [50:02]

Donor-Advised Funds & Charitable Giving (58:00)

• Donor-advised funds work best when you have appreciated investments or want to bunch deductions. No minimum wealth level, but impact increases with complexity and assets.
  • “If you have appreciated holdings and you’re charitably inclined…you can start giving these appreciated holdings.” – Bo Hanson [58:21]
  • “Donor-advised funds are great for bunching, for tax efficiency, and for simplifying giving to multiple charities.” – Brian Preston [61:57]

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Notable Quotes & Memorable Moments

• “The system’s not stacked against you, it’s stacked for you if you just take a little bit today and build your great big beautiful tomorrow.” – Bo Hanson [10:53]
• “Building wealth is surprisingly simple—not easy, but simple.” – Bo Hanson [04:26]
• “Compound interest really can be the 8th wonder of the world.” – Brian Preston [09:36]
• Goosebump moment on auto-enrollment: “Is this like watering the garden of opportunity or what?” – Bo Hanson [04:26]
• Memorable digression: The team discovered they were all wearing matching Money Guy shirts by accident, leading to jokes about boy bands and sitcom entrances. [12:11–13:56]
• Health as Wealth: Brian opened up about fitness and lifestyle changes post-50: “I've kicked up the cardio side. I’m walking in the morning, walking in the evening…” [33:01–35:59]

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Timestamps for Important Segments

• Fidelity millionaire data: 00:44–02:03
• Key ingredients to millionaire wealth-building: 02:35–04:26
• Automatic enrollment & policy: 04:26–05:47
• Maximizing the employer match: 06:36–08:07
• 401(k) forced discipline & time: 08:38–11:21
• Listener Roth IRA question: 15:21–16:48
• Multiple job 401(k) contributions: 18:00–20:23
• Credit card rewards & savings debate: 20:59–22:56
• Investment property equity and risk: 26:02–31:46
• Financial advice before marriage: 38:19–42:41
• Roth conversions & retirement planning: 44:09–54:56
• Charitable giving funds/Donor-advised funds: 58:00–62:54

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Summary & Takeaways

The 401(k) remains America’s most reliable millionaire-making tool—and success comes down to discipline, taking employer matches, and giving your investments time to compound. The hosts encourage listeners to automate as much as possible, avoid financial shortcuts, and keep things simple but intentional.

Listener Q&A unraveled deep topics from charitable giving strategies and Roth conversion pitfalls to the realities of marital finance conversations and maximizing benefits at multiple jobs. Detailed answers reflected decades of experience, illustrating why “personal finance is personal”—there’s rarely a one-size-fits-all answer, but systematic planning is universally helpful.

Memorable moments included jokes about matching outfits, reflections on health and longevity, and candid advice for new couples and new millionaires alike. The episode’s tone is upbeat, pragmatic, and thoroughly rooted in real-world experience.

Key advice for aspiring millionaires:

• Embrace automation—especially for retirement accounts
• Maximize all available employer contributions
• Start early and let compounding work for you
• Make giving (and its tax benefits) part of your long-term plan
• Communicate openly about money in relationships
• Seek personalized advice when faced with complexity
• Remember: “Your great big beautiful tomorrow starts with a little action today.”

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For more resources, calculators, and guides, visit MoneyGuy.com.

Transcript

[Brian Preston]

I'm Scott Hanson, host of NFL Red Zone. Lowe's Nose Sundays are for football. That's why we're here to help you get your next DIY project done. Even when the clock isn't on your side. Whether that's a new Filtreat filter or Bosch and Cobalt power tools, Lowe's has everything you need to feel like the MVP of diy. So get it done and earn your Sunday Shop now in store and online. Lowe's official partner of the NFL.

[Sponsor Voice]

This episode is brought to you by Amazon Business. We could all use more time. Amazon Business offers smart business buying solutions so you can spend more time growing your business and less time doing the admin. I can see why they call it smart.

[Bo Hanson]

Learn [e-mail] 5945000 millionaires were minted using this tactic. And you can do it too.

[Brian Preston]

And Brian, I am so excited about this because we love being able to share stories of how people can reach financial independence. And for a lot of people, the road to financial independence has to pass through the 2 comma club. They want to hit that millionaire status. And we know right now that there are 595,000 people that have been able to do that one very specific way.

[Bo Hanson]

Yeah, I mean, this is one we kind of look quarterly that this data gets released. And it's kind of fun to celebrate because There was a 16% jump in the amount of millionaires. And should we share Bo let's show it to them. It's from Fidelity. You know, Fidelity is one of the largest 401k providers in the United States. And once you know it, that 595,000 individuals at the end of quarter two out, out of their 24.6 million 401k participants, that's about 2.4% for those that are really quick with their math. That's amazing. Yeah.

[Brian Preston]

And this is not incredibly surprising to us, while it may be incredibly surprising to you, because we know that from various studies, whether it be the millionaire next door or from the Ramsey Solutions study, or even from us doing our millionaire survey, we know that a lot of millionaires out there use the 401k as one of the very main tools to building their wealth. And for a lot of folks, it is the account that actually crosses in to that seven figure status. And it sounds like that number, just like we saw from Q1 to Q2, is growing and growing and growing.

[Bo Hanson]

Well, I mean, if you just, if your only information source is social media, you might be like, well, why would you do a 401k from everything I see, I should be doing whole life insurance and you know, crypto and all these other things. Because 401ks according to these guys are dogs. And let us show you why the 401k is the secret sauce. Why exactly what Bo shared. This is the biggest, the first account across into double comma seven figure status. For most people it's because it's got a lot working for it. And we want to go into the three ingredients of wealth. Just for those who don't remember, I'll go ahead and give you the summation. Discipline is the first ingredient. We're going to show you how the 401K checks that box. If you have enough discipline that creates margin in your life, you can create money from that. We're going to talk about how the 401k definitely gives you some money. And then the third and most valuable component is of course time with that bo, let's talk about why 401ks rock.

[Brian Preston]

Yeah. So discipline, discipline is the first ingredient to wealth creation. And 401ks are a fantastic mechanism for you to set something up that automates your discipline process. All you have to think is when you become eligible or when you get that job, or when you start with that new employer, they'll give you some wage deferral form or they'll give you login where you can go in and select how much do I want to put in your 401k? And for most folks you just go and you have to select a number. I want to put in 5%, 10%, whatever that number is. And then you are off to the races without having to think about it every pay period, without having to think about it every month, without having to do anything on your own. You, you can get this wheel spinning in motion all the way towards your wealth building great big beautiful tomorrow without having to waste a whole lot of mental calories.

[Bo Hanson]

I love that we actually said quit fighting it. Let's just go ahead and go with what Brian says. Automatic for the people. Because look, there's a lot of quit out there. We often tell everybody building wealth is surprisingly simple. Now don't mishear us. It's not easy because if it was easy, everybody would do it. But it is simple. And what I like is with a 401k it doesn't let people quit as easily. So the stick with it ness is getting easier and easier. And if you want to know what we mean by this, the government has been trying remember there are a lot of the Things we talk about the government, they do understand that from a policy standpoint, it's good if your citizens are saving and they're disciplined in their own right because more people who are financially independent don't need as much from the government. That can hopefully be just net providers of taxes. Yep. So. So if you look at the data that's coming out of what Vanguard and others are doing, the government has set legislation up to where it's encouraging employers to create automatic enrollment and they're giving additional incentives to employers for this. And man, oh man, is this like watering the garden of opportunity is because look at the. From 2006 all the way through 2024, the amount of plans that have auto enrollment and getting people to jump into automatic for the people always be buying and is really something that's going to be good and the next generation is going to be rewarded for it.

[Brian Preston]

Now look, we don't want you to take a passive role. We want you to be active in how you build for your future. But the system is now being set up in a way that even if you maybe miss it, or maybe you miss that enrollment window, or maybe you're going through all the HR forms, you don't see them, there are now automatic enrollments to get you moving in this right direction. But since you are a financial mutant and since you're going to track your net worth every year, and since you're going to be keeping an eye on this, you, if you are someone that was auto enrolled, it'd be a great time for you to go revisit and say, man, oh, I got auto enrolled at 3%. But you know what? I could really be doing 5%, I could be doing 10% or at the very, very minimum, I could at least be doing enough to make sure that I get that free money. Because another great benefit of 401ks is they oftentimes come with a free money component.

[Bo Hanson]

Well, this is the one that like, it's, it's a, it's a social media crime. When I see people on social media trashing, they're like, why do you care that you have a 401k gives you free money? It's only 3%. And I'm like, only 3, only 3%. Think about, I mean, have you done the math on that? If you, I mean if you make 50 grand, that's 1500 dollars significant right now. I walk in, I reach out through the screen, you know, like some sci fi movie, horror film, and I just, instead of doing bad things, I just plopped fifteen hundred dollars in front of you. Every one of you. Like that's a pretty cool trick. I'll take that. I love that. If you make a hundred grand as a household, $3,000, it's free and clear. That's pretty amazing stuff. And that's exactly what's happening with 401ks now. A lot of you are like, well your employers are counting on it. It's already built into your pay. Yeah. So you're crazy if you don't get on the table because I can tell you as people who hire, you know, dozens of people every, you know, every year to two years is that we do take that into account in your compensation. So when I find out that 25 to 30% of people are not maxing out their 401ks to get the full free money, don't leave that money on the table. It's just, it literally is money that should be working for you in your army of dollar bills.

[Brian Preston]

And it's so important, it's so valuable. When we think about how you should prioritize what you do with your money, it is literally step two of the financial order of operations. If you're not familiar, Brian, can you hold the thing up for me?

[Bo Hanson]

It's hidden under here.

[Brian Preston]

The financial order of operations is a nine step process to show you what you should do with your next dollar. Well after you get past step number one, step number two is don't leave any of the free money on the table. So if you participate in a 401k, 403b, 457, one of those types of plans and there is a matching component available, make sure you that you are getting that because once you figure out the discipline and now you have the money, now you can apply the third, the third ingredient of wealth creation, the most powerful one, which is time.

[Bo Hanson]

Well, think about it, 401ks. These are retirement accounts that don't make it easy for you to get access to the money because they're set up for your retirement. Where do we see when we get the Fred data, the Federal Reserve data on where Americans wealth is, it's usually in home equity.

[Brian Preston]

Yep.

[Bo Hanson]

Because what is that? That's a forced saving vehicle. You buy a house, you start just making monthly payments on your mortgage, it builds up the equity. The 401k is the next best thing because it once again it is defining your behavior and making the stick with it ness last where you actually get 10 years, 20 years, 30 years of compounding growth. And that's where the magic stuff is it starts really slow. You're going to feel like, man, this is slow. I'm going to quit after the next five. Fortunately, the 401k doesn't let you get access to the money. So you're like, okay, well I guess I'll just keep doing then. Voila, 20 years in the future. You're like, holy cow, this thing actually works. This, this, there's something magical about this whole compounding growth thing.

[Brian Preston]

It's actually, and we actually have an a concept, an idea that you've heard on this show a ton of times called the wealth multiplier. It's all we have these little koozies showing that for a 20 year old, a dollar can turn into $88. If you can give it time, compound interest really can be the 8th wonder of the world. So if you have a 45 year time horizon, $1 can turn into 88. If you have a 35 year time horizon, $1 CAN turn into 23. If you have a 25 year time horizon, $1 CAN TURN into $7. The earlier you figure this out, the more powerful your dollars can be. And a 401k is a great place to, to figure this out because it can likely set you up for huge financial success in the future.

[Bo Hanson]

I already can see people are going to see this and they're like, well wait a minute, I'm 23, I'm 27, I'm 32. Don't worry. Go moneyguy.com resources we have calculators, we have, we've gone all in on this wealth multiplier thing because we want you to get that excited about it. So go out and find out specifically what your wealth multiplier is and start thinking about how you spend your money differently, how you need to be saving and of course investing your army of dollar bills because of the wealth multiplier.

[Brian Preston]

Brian, I love that this quarter it was 595,000. I think after this episode is released, it's probably going to jump up to a million new people.

[Bo Hanson]

Well, and that's not just, that's just Fidelity. Think about Vanguard's another big 401k provider, Charles Schwab and there's a bunch of other small 401k providers. If you added them all up, I just get excited that it shows more and more people, especially through auto enrollment, hopefully through education sources like the money guy show you too can, can join the ranks. Don't let you know everybody out there telling you the system stacked against you. It's stacked for you. If you just take a little bit today and build your great big beautiful tomorrow.

[Brian Preston]

We love that we get to share this kind of information. We love that we can load you guys up because we genuinely do believe that there is a better way to do money. So Every Tuesday at 10am we like to show up right here and answer your questions and speak to the things that you guys care about. So if you have a question, if you want to get our take on something, right now we have the team out in the wings collecting your questions. Make sure that you get them loaded up, because, I don't know, maybe we're going to give some stuff away today. I don't know, maybe we're going to give some stuff away.

[Bo Hanson]

There's an elephant in the room, though. I didn't know. And I was trying to figure out, is this a like Boys to Men? Is this like New Kids on the Block? Is this in sync? Backstreet Boys? Maybe even we go back. Who did.

[Content Team Member]

Oh, wait, I know what it is.

[Bo Hanson]

Bo.

[Content Team Member]

I know what he's talking about. It took me all that time. I was like, where's he going?

[Bo Hanson]

Jackson? I mean, we all showed up today wearing the same outfits without even. I mean, we look like we're about to go on tour. We ought to kind of like, stand, get back to back and cross our arms together. I mean, we couldn't. What was funny is I walked in and I saw Bo, and I was like, dad Gummet, because I had on a completely different outfit. My wife, when I was in the making my coffee this morning, she goes, it's show day, and that's what you're gonna wear. Oh. And I was like. I was like, so it doesn't look good. Yeah, well, it was this black. It was a camo, but with black camo. And she's like, I don't know if that's on air already. So I was like, okay.

[Content Team Member]

I'm actually with Jennifer.

[Bo Hanson]

So I was like, it looked cool to me, but I guess, you know, conquering the money world in black camo was not doing it for my wife. So I was like, okay, I'll go change. And I put this on. And I walk in and I see Beau, and I'm like, well, crap, now it's gonna be like, we're gonna have the Arnold Schwarzenegger versus Danny DeVito twins reference. And I'm definitely gonna be the Danny DeVito. I don't know who's who.

[Brian Preston]

We'll leave it up to our imagination then.

[Bo Hanson]

Then Caleb on the content team goes, y' all look, and then, and then now y' all just need to know the lay of the land. Reby shows up a little. She always makes like the, the Kramer type entrance into the content meetings at 8:30. So she comes barreling in at the last minute into the content meeting. That didn't mean that in a bad way. I mean look, Kramer is one of the most popular people on Seinfeld. So your entrance is actually a good thing. And we, the whole content room just went, oh my God. She's wearing the same shirt, wearing the.

[Content Team Member]

Same brand, very close color, Money Guy logo, all of it.

[Brian Preston]

It's. It's unbelievable to me that if we were going to assign Bel Biv Devoe.

[Bo Hanson]

I'm trying to think of other sign.

[Brian Preston]

Sign.

[Content Team Member]

I've never been compared to Kramer before.

[Bo Hanson]

That's a compliment.

[Brian Preston]

Yeah.

[Bo Hanson]

It could have been Newman. By the way. He's a UGA grad. He did go to.

[Brian Preston]

He did go to.

[Bo Hanson]

I don't know if he grabbed but Ron Seacrest and Newman.

[Brian Preston]

Yep, both of them.

[Bo Hanson]

There we go. And the guy from Lost.

[Brian Preston]

I don't know that one.

[Bo Hanson]

Good looking guy from Lost.

[Brian Preston]

Is that who, Matthew Fox?

[Bo Hanson]

No, it was the other one. The one Sawyer. Sawyer.

[Content Team Member]

I don't know. I don't know their names.

[Brian Preston]

I'm sorry, I've never seen the show before.

[Bo Hanson]

And Brian and Bo.

[Brian Preston]

And Brian and Bo. That's.

[Bo Hanson]

That's UGA Alums. Alum. They put us up on the wall. It's like Sawyer. It's like Newman.

[Content Team Member]

Ron Cus, University of Georgia tv. And the fact that we are all matching.

[Brian Preston]

Did I say the thing? Hey Ruby, I'm gonna throw it over.

[Content Team Member]

I don't know if we did.

[Bo Hanson]

Sit down in the room. Quack, quack, quack, quack, quack, quack.

[Content Team Member]

It is Tumblr day.

[Bo Hanson]

There you go.

[Content Team Member]

As Brian just said, the tumblers, remember they are transformers. They can be hot beverage containers or cold beverage koozies.

[Bo Hanson]

Koozies or tumblers.

[Brian Preston]

Cold beverage koozies.

[Content Team Member]

So let's give away some tumblers and talk some personal finance. Interesting question from E Money. Up first, it says since the IRS rounds to the nearest dollar, can I technically put $7,000.49 in my Roth IRA? And of course the limit is currently $7,000 annually.

[Bo Hanson]

What do you think that one actually got? Because, I mean it's getting a little cold outside. So I got a little snot bubble that popped out a little bit there with that one. I was like, it got me, got me a little bit because that would make me like laugh A little bit. So. But when I saw this is a financial mutant question if I've ever seen.

[Brian Preston]

One, if my kids, E Money were asking this question, I'd say, kids, just because you can do something does not mean that you should do something. Just because you could potentially get away with something that's against the rules does not mean we should break the rules just to see if we can get away with it. That'd be my first answer. So if the Roth IRA limits are 7,000, you should indeed stick to 7,000, even if you thought you could figure out some backdoor way to get. But let me tell you this, and a lot of people don't realize this and a lot of people this is very helpful at the end of the year, most custodians, Fidelity, Charles Schwab, Vanguard, if you have auto contribution set up and maybe you have like your credit card rewards also, you know, your cash back also gets paid into your Roth IRA and you get to the end of the year and you didn't factor that. You're like, oh no, I'm going to over fund. Most custodians will cut off your contribution exactly right at 7,000. So most custodians won't even let you put in more than 7,000 even if you wanted to. So they kind of, they try to protect you from that. Now obviously if you, if you're changing custodians, you can run a foul there if you have other stuff like that going on. But I don't think it would be a super easy thing to do. But even it was easy, I don't think I'd recommend it.

[Bo Hanson]

I love where your mind is E Money. That's kind of like an Ocean's 11, 12, 13, 14 type strategy or Superman 2 or whatever where you basically get take a penny off of every transaction. I like where your brain's at, but unfortunately I think Bo's right. Even though the IRS probably would have be none the wiser, your custodian is going to be the gatekeeper that probably shuts that down.

[Brian Preston]

Could you imagine how boring Ocean's 15 would have been if it was 401k strategies was like how to get an extra 49 cents into my Roth IRA money edition.

[Content Team Member]

That's 49 cents.

[Bo Hanson]

We'd make an entertaining. We don't show up in our in our money swag. What could go wrong?

[Brian Preston]

Never catch on to.

[Bo Hanson]

It'd be a great caper.

[Content Team Member]

We'll do something. Emoney. Thank you for the question. I'm honestly pretty sure you have a tumblr but if you don't, it is Tumblr day. Email winneroneyguy.com all right, ICL is the next question. It says I will have two W2 incomes coming in and both offer 401k contributions. What is the max amount I can contribute? Also, is there a limit to how much employers can put to 4 can contribute to 401k?

[Bo Hanson]

What a great question.

[Content Team Member]

I know, right? Like this is a very unique and.

[Bo Hanson]

It lets us be kind of really nerdy and cool because we're going to say Icy. By the way, I thought that was a great rapper name until I saw how it's spelled and I was like, that makes me think of cola and cherry. So it's a little different. But you are limited by 450, what's called 415 limits. So the government, even if you have multiple employers or jobs, you only get to make one maximum contribution of salary deferrals into your retirement plans. And that goes for 403bs. That goes for 401ks. They're all under that code section 415. So for this year, was it 23,523.

[Brian Preston]

5.

[Bo Hanson]

So you could do 23,500. Now the crazy thing is, is you could do 12,500 at this one. You could do 11,000. Did I say 500 on that other one? So 11,000 over whatever. You could do whatever math you want to do to get to 23. 5, but that's it. Now here's the other part. But what happens to the employer portion? Do they have the same restrictions or is there, is there a really big opportunity there?

[Brian Preston]

Yeah, so this one is a little unique. 415 limits have salary deferrals of 23. 5, but they actually go all the way up to $70,000. If you're going to fully fill up that across your contributions and your employer contributions. Well, one of the things, even though the salary deferral aggregates, that 23,5 employer contributions do not aggregate. So you could have one plan where you have $70,000 a year going in. And then if you had another 401k that you had access to, while you as the employee could not put more money in there, your employer could elect to make an employer profit sharing contribution into that one. So you only get123.5. But employers can do multiple sources. Now, there is one small caveat that's worth noting and this might hit some of you. You mentioned Brian, you know, 401ks and 403bs and those different plan types, they aggregate across that 23. 5. However, there is one. There's one that does not aggregate because it's in a separate code section and that is a 457. So if you're someone who has access to a 401k plan or a 4.3b plan and also. Oh, 457, you can actually fill up those salary deferrals twice. You can do 23.5into the 401k, 403b and another 23.5into the 457. So you can double dip if you have that account structure combination available to you.

[Bo Hanson]

Yeah, that's a major hack. That's awesome.

[Content Team Member]

Good stuff. Icl. If you would like a money guy tumbler, we would love to send you one.

[Brian Preston]

Got thirsty.

[Content Team Member]

Just email where moneyguy.com you saw spill.

[Bo Hanson]

That's just like the icy machine.

[Brian Preston]

Yeah, it was. You were thinking it was like ice E. Like right, like that's.

[Bo Hanson]

I was like icl. Yeah. Coming out with a hot new track. And then I saw and I was like, it's like cherry and cola mixed.

[Brian Preston]

Nailed it.

[Content Team Member]

Delightful. Okay, next question is from jb. It says, can you count credit card rewards towards your savings rate?

[Brian Preston]

No question.

[Content Team Member]

It says in the question, hear me out.

[Bo Hanson]

He already can hear me. Hear me judging it.

[Content Team Member]

The next part says I have the Fidelity 2% cash back card that goes into my brokerage. Can I count this towards my savings rate. Smart, fancy, financial mutant or getting a little too cute with it? What do you think?

[Bo Hanson]

Yeah, I mean, I think it's getting a little too cute with it. Because also this falls under the category of. Because I saw somebody ask the question of why do you, after your certain level of income do you not get to count your employer is because we're trying to create structures to where you are very deliberate with every dollar comes into your army of dollar bills. Why would I want to give you a shortcut that lets you basically cut the corner off of 2%? By the way, hopefully you're not spending if you make this amount of money, hopefully you're not spending just as much on the credit card to count that as 2%. Just think about that. The logistics of trying to figure out how this. I guess it's not that hard because you'd be like, oh, $300 got deposited. 300 divided by whatever my annual income is. But still, I think it's not worth the squeeze of the fruit. I mean this is the hassle factor. Plus I want you saving as much as possible within reason. But as Will your basic life. But this is something that I don't think is worth it.

[Brian Preston]

Yeah, saving is saving and consuming is consuming. Now, if you're going to consume and you're going to make the decision to buy stuff, we love the idea of you doing it in a way that's as cost effective as possible. Maybe that's through a credit card where I have some reward structure. Maybe that's through some online portal where I get a discount. Maybe I'm using coupon codes, whatever that is. If you're going to spend money, we want you to spend as little as possible and get as good of a deal as possible. But that is a different line. That's a different behavior than the savings side. I would just consider credit card rebates. Rewards deposits are going in as like gravy and cherry on. That's a gross mixture as either gravy or a cherry on top. Not together.

[Bo Hanson]

Never mind.

[Brian Preston]

But it does not get to count as savings.

[Bo Hanson]

Well, and I think it also works against. I want you doing automatic for the people. And the fact that you set up automated processes make the good habits as easy as possible. And if you're doing some weird convoluted calculation where you say, well, I know I got rebate, you know, credit card rewards coming in this month, so let me make sure I leave enough room on my savings. It just, it's working against it. It's. Don't get busy doing nothing. It's just not worth the. The, all the factors in there. I'd rather you make it automatic and set up the monthly savings and investments and live your best life. Love that.

[Brian Preston]

I love. I love the fidelity card. Getting tons of love in the comments too.

[Bo Hanson]

Tons of love. Yeah, we use. I mean, I use that one. Not that fidelity gives us any. Thank you for, for being an advocate for them on that. I'm sorry, should I not have said that?

[Content Team Member]

So great cash back though, jb thank you for the question. For, seriously.

[Bo Hanson]

Well, I mean, behind the scenes, I.

[Content Team Member]

Hope that helps you not be too cute with it.

[Bo Hanson]

I mean, behind the scenes, like we, we like when we were approaching advertisers or others for like sponsoring the studio or whatever, you know, I don't know. I'll just be quiet. Get us in trouble.

[Content Team Member]

Brian's ready to spill some tea that I don't even know what he's going to spill.

[Brian Preston]

How'd you sleep last night?

[Content Team Member]

He's ready.

[Bo Hanson]

So good.

[Brian Preston]

I like this. This.

[Content Team Member]

Yeah, you can tell he's like.

[Brian Preston]

He's like four hour Brian. But I know you got more than four hours.

[Bo Hanson]

No, I got to get. No, this is because yesterday was four hour Brian and the previous day was five hour Brian. So seven hour Brian is like hot dog. This is what it's like when we actually charge this thing. I love it.

[Brian Preston]

This is what it's like when we charge this thing.

[Bo Hanson]

It's hilarious.

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[Content Team Member]

All right, we've got another question or well, did I give JB a Tumblr JB? If you don't have a Tumblr, email winneroneyguy.com since we answered your question. Now I'm gonna get to Doug P's question. It says, my question is what to do with equity in investment properties. I refinanced the mortgages on those, on those properties four years ago. Rates are at about 3.75%. The equity is just building up, just sitting there. Should he do anything with this? How should he think about this? He seems bothered. What do you guys think?

[Brian Preston]

I think a lot of people, whether it be your primary residence or whether it be investment properties, have this struggle. They end up thinking to themselves, man, all right, I got this piece of property. It's gone up in value. And I see all this wealth accumulating. I have all this built up equity inside of this illiquid asset, man, is it just wasting away? Should I be doing something else with that? I think that is flawed thinking. I think that's flawed logic. And I think that people who try to get like, really? Okay, I'm going to buy it and I'm going to, I'm going to have the equity increase and I'm going to go borrow against that equity. I'm going to go to deploy that. You are now going likely further out on the risk spectrum than I think you really want to go. Because one of the things that you're going to notice, Doug, is if the rates when you refinance are 3.75% and you're going to go now, try to tap into that equity, you are likely not going to get 3.75% again. You get something closer to six and a half, seven, seven and a half percent. Now, I just don't think that makes a ton of sense. Agree, disagree. 1.

[Bo Hanson]

Well, I think it's. You have to markets and have different. There's a time and a place, different decisions come into vogue. And with a higher interest rate environment. And you've got 3.75% mortgage rates on your rental property. Those are like. People are very excited about those rates. That's because that's allowing you to do multiple things. It allows you to have lots of flexibility on tenants, you know, because now you don't have to cover. That's the problem, I think a lot of people don't understand is that when you sell a piece of real estate, the previous owner might have had it at a 3 1/2% mortgage. When the new investor comes in and buys a piece of rental property and they're paying at six and a half percent, the carry cost on just making the note is much higher. And that probably means there's gonna be higher rent. Whereas I like that, you know, you have a lot of flexibility because this is gonna cash flow much easier at the 3.75. The way I'm handling this with clients. Cause I do have a number of clients who. They're doing it because remember, real estate in our eyes under financial order of operations is a step eight. That's right, of the financial order of operations. You won't have this probably because hopefully the typical financial mutant, you're not only going to have, you know, rental real estate. If you did this right in step eight, you're going to have Roth IRAs, you got 401ks, you're going to have taxable brokerage accounts. You're going to have a whole plethora of opportunities of how you're going to get access to money in retirement. So you can choose the most efficient and best one. And that's why I have clients that they, they love the real estate game. They've had tremendous success with it. But it's going to be part of their retirement plan as they kind of Simplify. Because note, real estate is not passive, despite what the brochure says. I mean, we, we own a number of real estate properties and if you go do it right, you're going to be in the weeds on it. And for some of my several real estate clients, we're going to, we're going to be divesting out of some of these properties, simplifying the financial life. And that's when we'll take that equity and roll it into the, to the diversified portfolio.

[Brian Preston]

At that point, I think another thing, and this might help, this was Doug, right, If you are doing an annual net worth and I do this, you don't have to do this, but this is what I do. And I know Brian does the same thing whenever it comes to real estate that I'm not planning on selling anytime soon, rather than valuing, valuing it on my net worth statement at market value, I instead value it at cost plus any improvements. So what it prevents me from doing is like looking at my primary residence. You know, I bought my house in this town a number of years ago. The housing market's gone really well. And so on paper, value of my house looks awesome. But I don't want to count that as part of my net worth because I'm not going to sell my primary house. It's where we're going to be, it's where we're going to stay, it's where.

[Bo Hanson]

We'Re going to live.

[Brian Preston]

So I value it at cost. I do the same thing for any long term investment properties I plan on holding. I think if you can do that, it will curb you from saying, man, I'm, I'm missing out on this opportunity. I mean, need to be capitalizing on this equity, I don't think that's necessary in order to keep building financial independence.

[Bo Hanson]

Well, I, I know I have several clients that have, because they bought real estate, residential rental properties in like 2009 or 2010. I mean these, these are key demo times that if you bought in, you couldn't do anything but make money. So these are large portions of their future retirement. I do like the fact of, you know, you have to be mindful that real estate is, is illiquid and you have to have a plan for how you're going to turn it into a liquid part of your retirement if you're not doing it through the cash flow. Because a lot of people now, if you're a person that loves real estate and you're going to be active even in retirement with it, because maybe you're retiring at 55, you know, there's nothing wrong that the cash flow is now essentially a pension. You've created your own pension. But for a lot of people, if you need access to the equity you're going to have, probably because I don't know that I want you in retirement, say 60 years old, going in and re leveraging the asset. I mean, because that really is pushing you out on the risk, on the risk spectrum when you're trying to be as financially independent and remove obligations off of your life because obligations are risk in retirement. So that's that. That's why I would think, build it into your total plan. This is the part where we talk about take the relationship to the next level. It's very personal in the personal finances. How do we take all these complicated decisions and successes you've had and now to streamline it into your best version of yourself? This is a big part of it right here is how do we take an illiquid asset, bring that in with all your liquid assets and find the most optimal from a tax efficiency as well as from risk, as well as how do we maximize the returns. These things all work together, but it gets complicated really quick.

[Brian Preston]

Love that.

[Content Team Member]

Fantastic. Doug P. Thank you for the question. Thank you for being here.

[Bo Hanson]

If you really doesn't love it because that's like, it depends. I hate giving it depends answers. But do you see how many variables are out there? I mean, it is. There's a lot of moving. It's a blessing.

[Content Team Member]

Heard very wise people say personal finance is personal, Brian. So I think you did great. Doug P. Thank you for the question. And if you would like a money guy tumblr, just email winneroneyguy.com and we would love to send one to you.

[Brian Preston]

I have a question. Can I ask a question?

[Content Team Member]

You may.

[Brian Preston]

You don't have to give me a Tumblr. I've got one.

[Content Team Member]

Okay.

[Brian Preston]

A lot of people in the comments. I've been seeing this in our, in our comments and I saw one just come through. People have been noticing you've been on a little bit of a fitness journey, right? Like they. People have been like commenting like, Brian seems to be doing all right. I just thought so one of the questions we got is, hey, what's Brian's fitness like? Like what this, this new Brian, what's he begun focusing on once he begin like diving, dialing into anything you want.

[Bo Hanson]

To kind of share. I don't mind because I want you guys are financial mutants and I find out when y' all come and do Studio tours that I am. When you. When the show creates an avatar of who their audience is, there's really two avatars currently, and it seems like it's Beau and Brian. I mean, because you guys come in and we. We all could be, like, hang out.

[Content Team Member]

Really? Yeah.

[Bo Hanson]

So. And that's not. That's not a guy girl thing, because, I mean, a lot of you, like, you're like my brother or my uncle or, you know, so it's so. But here's what's happened to me, and y' all have heard me talk about it. Health is wealth. When I crossed 40, I had that great sage advice from my former pastor, Gary. I was in a small men's group with him, and he had talked about. Because he was a few years older than me and in my late 30s, and he was already in his 40s, he's like, man, that fork in the road, you got to start exercising and hanging out. Bo is a great influence because, I mean, look at him. He's a specimen. So it makes you feel like you should be doing better. So in 40s, I was doing something. Nothing great. And then. But y' all know I've crossed into my 50s, and that. That kicks like a donkey. I mean, it really does not. Not that I feel like I'm going anywhere, but there's definitely some. I have a 50s hangover in the fact that my father passed away at 55, and I know I've got to be very deliberate with. And so I'm proactive with my health care, with making sure I'm trying to stay ahead. And. And I'm happy to report, like, because I'm. I'm proactive. I'm getting heart scans and all these things that you hear about, like, executive stuff, because I want to be giving you guys financial advice for decades. I don't want to be done with this thing because I like to think, even though I'm in my 50s, hopefully, you know, according to my. A lot of my trackers, I'm in my 40s from a health standpoint, and I want to be that way with the content creation, too, is that I've. I've kicked up, you know, the. The cardio side. I'm walking. I mean, truthfully, that is the.

[Brian Preston]

So when do you walk, Brian?

[Bo Hanson]

I walk in the morning. I walk in the evening. It's really. That's why. I will tell you, this is the first year I'm kind of depressed about daylight savings time because it's going to squeeze my window down because we're central Time here in Tennessee and Central time is the greatest thing in the world. Except for when we fall back, because I've already. Through my daughter, because she's now, because I probably because I put out these vibes. I've gone through Grok and asked it, hey, when. When are we going to have the least amount of light? And it's like December 1st through 11th. It's going to be dark here. Like 4:30. How stinky is that? I mean, that's just. That's not cool. Let's get on. Let's get on that fallback. We don't need to be falling back. I'd like it to be 5:30 if we could. But. But I've been walking. I still go to Orange Theory probably three to four times a week. I was doing that probably twice, but I've been doing that three to four times a week and. And I'm just not. And here's the other thing. It's. It's kind of like, what's that comedian? I love her because I saw her at the Grand Ole Opry recently. She's got the Netflix show now, but she was like, avoid the bread and the sugar. You know, Leanne. Leanne Morgan. Is that right? Is that the comedian?

[Content Team Member]

Yes, that's right.

[Bo Hanson]

But yeah, so I've been avoiding the bread and the sugars too.

[Brian Preston]

So I've seen you're doing a lot of walking. Walking in the mornings, walking in the evenings, even sometimes you'll get a midday after we have lunch or whatever, which I think is awesome. And what I think is really cool is on those walks, you've been doing something else, too.

[Bo Hanson]

Well, this is Bo. Y' all wonder where ideas come from. You know, we went to that press publish conference. Did I say that right? You did. And Beau was like, man, well, it's walking. You want to do something with that? You know, because I always. And we. So Bo and I created a notes database that we're sharing back and forth with just ideas. And we've got like a hundred of them. I mean, it's how. It's crazy how we know each other's brains and it's fun. I mean, I've just been having a blast kind of, you know, coming up with tidbits of parental advice or things I wish I'd have known when I was younger or just, I don't know that I'm going to share the. The Taco Bell three, two, one strategy yet, but I'm willing. But it might make it in there eventually. But. But I'm Definitely sharing a lot of funny things that I've figured out in life. And you guys, y' all been great. I love the comments that y' all are saying when you're. When you're watching these, because I think they're going out on Instagram. They're going out on TikTok and Facebook.

[Brian Preston]

Matt, what's our. What's our handle so I can throw it out there? The Money Guy show. If you go check out Money Guy show on Instagram, Money Guy show that it's Money Guy show on Instagram. MoneyGuy show on TikTok. If you want to have some tangent time with Brian, that's what these things are, what they're designed to be. So if you haven't checked that out, make sure you go, like, subscribe.

[Content Team Member]

I love them. They're very. They're very warm. Like, it makes me feel warm.

[Brian Preston]

Just like it's like going on a walk with Brian.

[Content Team Member]

It's like you're hanging out with Brian.

[Bo Hanson]

We also, I mean, a lot of time when we have studio tours, people say, brian, I love the tangents. You do. But. But from a content standpoint, it's not always great that I go on random tangents. I don't mean to. It's just how I'm wired. So this just gives me a creative way to put those in a place that's probably constructive for the content. Doesn't mean that tangents are going away. I can't help myself, but it at least gives them a little bit of.

[Content Team Member]

Oh, they're here to stay healthy. We're just finding the right places to put them. It's gonna be awesome.

[Bo Hanson]

Yeah, it seems like probably now live streams are probably gonna get a little extra. I mean, always get their portion.

[Content Team Member]

This always gets a little extra. We're just spreading the love. All right, Doug P. I did give you a Tumblr, I believe, but, you know, winner, moneyguy.com if I did not. And I have another question queued up from Austheboss 1216. It says, hello, Money Guy team. I am proposing to my girlfriend of two plus years this Thanksgiving.

[Brian Preston]

Let's go.

[Content Team Member]

Congrats.

[Bo Hanson]

Hope she doesn't watch the Money Guy Show.

[Content Team Member]

I feel bad. I want her to watch the Money Guy show, hopefully not ruin the surprise. The question says, could you share financial advice that you wish you knew before getting married? For context, they're both juniors in college. They're both savers. Thank you.

[Brian Preston]

Well, you know what? I think you've already. The fact that you've already made the Assessment, hey, we're both savers. Means that you've had some conversation around, hey, how do you look at money and what do you think about money? Because I think one of the things that couples can do really, really well before you enter into marriage and is have the conversation around finances. Hey, what does your balance sheet look like? And maybe don't make it sound that nerdy, but like, hey, do you struggle with credit card debt? Do you understand what a Roth like? So that way you can figure out, are you guys on the same page? Because it's amazing when you see two people come together and one is like an incredible saver and the other is an incredible spender, it creates a lot of friction. So if you can figure that out on the front end and begin working on, okay, how are we going to set up our financial situation so that we can be successful through this marriage, so that we can be successful through this partnership, it's going to be a lot easier than trying to figure that out as you go through it. So I think the fact that you and your girlfriend are already having those conversations around, okay, what do we want our future financial life to look like? What are our goals, both short term, intermediate term, and long term. I think communication is key. And the more you can have those conversations early on, the less surprised you'll be when all of a sudden you find out your spouse spends like, you know, 40 or 50 bucks on shampoo. Or you find out that throw pillows are a necessity inside of a household. If you can talk about stuff in the front end, you'll set yourself up for success.

[Bo Hanson]

I have a fun exercise for ask the boss. Now, it's not going to be video form because we've been doing this long enough that this doesn't have a video equivalent of itself. But back in 2012, Bo got married. That's how long we've been doing this. Because you're like, wait a minute, it's 2025. Yeah, we've been doing this show a long time. And one of the funnest shows I think I've ever done is I asked Beau a bunch of financial questions of what he thought marriage was going to be like. Now, I think we did a 2013 show where we did a year in the future. And but those are some just stellar content. So, Austin boss, if you want to, because that way you get to see here a young Bo talk about how he thought his wife wasn't going to spend more than like 20 buc on stuff.

[Brian Preston]

That was our check in number.

[Bo Hanson]

I couldn't was it 20 or 40? It was 40.

[Brian Preston]

40 bucks.

[Bo Hanson]

40 bucks. And I think I said the line even in that show. I was like, I bet her shampoo cost more than 40 bucks. So it's one of those things where it's fun to kind of hear and reminisce where Beau is a financial mutant. Get just getting married. What he was thinking, you might, you know, resemble yourself in listening to that content. Now here's where the advice is, is open communication. Of course, Bo kind of hit that y' all need to be talking about. First of all, don't skip out on the big life stuff. I mean, this is. I'm always amazed because it's going to. You're going to go ahead and just help you out tremendously if you start talking about, hey, where are we at with kids? Where are we at with religion? And then next is, you know, probably third on that is, hey, what do you think about joint accounts versus Are we going to keep things separate? How much debt do you have? I mean, you don't want secrets. Secrets kill marriages in a lot of ways. So you just want to have open conversations about what you have going on. Because, I mean, I've watched enough, you know, Christmas movies. You want to make sure that who you're marrying is not a princess or a prince and they just not telling you. And then that creates its own little diabolical thing that you'll have to work through. But it's. But it is one of those things, open communication. That wasn't. Y' all didn't even laugh, so.

[Brian Preston]

No, I gave you a chuckle.

[Bo Hanson]

And then I think, and then I think about what's the parable of the. Is it the magi or whatever is just try to be selfish. The gift of the magi. So you just want to go into marriage knowing that you're going to. It needs to be a selfless thing. And I think if both, if both people come into the marriage understand you have to give of yourself. You're, you know, you're setting yourself up for long term success and. But. And go through. I mean, I know. I think one of the important things I did was we did some counseling through our church or something like that just to kind of make sure we were priming the pump on the communication and other things.

[Brian Preston]

Things.

[Bo Hanson]

Because don't.

[Brian Preston]

Just.

[Bo Hanson]

Just because you have love and passion doesn't mean that you got all the boxes checked. You need to do a little, you know, measure twice, cut once. I'm making sure you all have good open communication.

[Brian Preston]

Love that and congratulations, by the way.

[Content Team Member]

Yeah, very exciting. Great advice, guys. Thank you, Austheboss, for your question. If you would like a money guy Tumblr. If you don't have one yet, just email winneroneyguy.com Next question is from Drew H. It says first time chatter, long time watcher, welcome. What are you laughing at, Bo Hansen?

[Brian Preston]

Did you not see the pump fake right there? That's fine. That's okay.

[Bo Hanson]

Well, here, I'll let you do something, Brian, because I was saying, you know, we have Making a Millionaire. We have Making a Millionaire, you know, would be a fun show because I had such a good time with Bo's show where we asked the questions we. And I don't know if Making a Millionaire, if we even have any candidates out there, but a show like that with two young people that are about to compare and contrast and talk about money.

[Content Team Member]

Didn't we have an engaged couple on?

[Bo Hanson]

That would just be fun. Maybe missed out because Bo was fun. I mean, I wish we could have gotten. If I could go back in time and put a young Bo and Jenna on the show and then we have Making a Millionaire that way, it would have been hilarious. It would have killed. It would have been a lot. Okay, go back to Drew H. Well.

[Content Team Member]

I'm sorry I interrupted you there, Brian.

[Bo Hanson]

No, you didn't. My brain is just like, it was a little delayed.

[Content Team Member]

Okay, back to Drew H's question. Wonderful. It says first time chatter, long time watcher. He's on Foo Step 8.

[Bo Hanson]

Congratulations.

[Content Team Member]

Is there a point where Roth conversions become counterproductive if your pension income will fill most of your retirement spending needs?

[Brian Preston]

I think the question that Drew is asking here is, can you have too much Roth? Now, I don't know your answer, Drew, so I want to like, think through that because let me explain to you a scenario where I've seen Roth conversions be slightly detrimental. Someone has a lot of pre tax assets and they have a little bit of after tax assets and they want to start converting to Roth. And so they retire early and they begin doing these Roth conversions so that they can move some of the pre tax, some of the pre tax bucket into the. Into the Roth bucket. Well, they end up using all of their after tax assets to pay the taxes on those Roth conversions. So they have finally find themselves in a point where all they have are Roth assets and pre tax assets. Now, if you're over 59 and a half, that's not necessarily a bad thing because you can get to that Roth money just as easy, if not easier than you could get to the after tax money. But if you're below 59 and a half and you don't leave yourself any dry powder to pay for living expenses, you could potentially have an issue. However, you said in your question, man, I actually have a pension that's going to be coming in. So if I have provided for my living needs and I'm going to have a pension coming in, what I'm likely concerned more about and thinking more about if I'm in your situation, Drew, is what are required minimum distributions going to look like for me at age 73 or if I'm younger at age 75 and I may want to begin doing Roth conversions now so that I don't have these huge RMDs later in my 70s and 80s. And I'm actually going to let my Roth converting be less of a strategy around how am I going to pay for my retirement living expenses? And more about, okay, what's my estate planning and legacy planning look like? Because Roth assets are some of the absolute best assets to ultimately get to leave to your heirs.

[Bo Hanson]

Here's my take on this. By the way, I love that you're already in step eight and I don't. Did Drew give us his age? He did not.

[Content Team Member]

He did not.

[Bo Hanson]

So I don't know how early in the process to be a step eight, but it's still pretty cool that you're thinking about Roth conversions. But here's. You need to know the negatives of Roth conversions because they also are part of why there's positives. Because our favorite account structure, you're not supposed to tell who your favorite child is, but I'll tell you, ours is Roth because they grow tax free. And man, we all get excited about tax free. But there's a game you're playing. You're hoping for tax arbitrage. That's the whole thing with Roth conversions, meaning that you want to be able to turn your pre tax assets, your tax deferred assets that are like in 401ks and other things because you know the government, there's a clock ticking in the background with required minimum distributions. You're trying to figure out how you and it doesn't matter, by the way, if you die with these, your, your, your heirs will eventually pay the tax. Somebody's paying the taxes on all those pre tax assets. So you're trying to figure out how do you get them in out of the tax structure with as little about as taxes as possible. Well, some people get so excited about Roth assets that they even when they're in peak earning years, they lose their mind and they start doing Roth conversions way too early. And when you're in a higher tax bracket, that is not a tax arbitrage situation. You're actually paying maximum taxes when you do that type of stuff. We'd much more prefer for you to find to play the tax arbitrage when hopefully you're out of your peak earning years, you drop your earned income because maybe you retired early, you're part of the fire fine movement and all of a sudden your tax rates go to the seller and you're able to essentially convert assets with minimal tax impact, minimal tax drag. Because taxes are a problem. Because what happens is is that you have to pay the taxes from some assets. And as BO just shared, a lot of times that comes from your taxable assets which might be your bridge account. If you're part of that part moving and you're retiring before you know, 59 and a half, that could be your bridge money that you're actually spending off of. There's also the opportunity cost of anything you pay in taxes. No longer is in your army of dollar bills working for you. That's why it has to be a very deliberate calculation to make sure that you're taking advantage of the lowest tax rate possible. That won't hurt your long term future, but you're also working against the cash flow. That's why once again this is another one of those when it might make sense sense to have a financial advisor is because this is what a financial planner does for you. It's not just asset. Everybody thinks a financial planner is just go put you in index fund and asset. No, a good financial planner is going to start doing running tax projections. They're going to start running through cash flow analysis of what retirement looks like in the first five to seven years. You know, what is it if you convert this amount this year versus then what's the opportunity cost loss by us doing this? Is this a truly an arbitrage or are we just paying taxes earlier than we should? This is what we do for a living. And I think people that's why whenever you see all the people who trash financial advisors, I'm like you haven't really talked to a financial planner because if you're all you're doing is investment management that's already been commoditized. You just go buy an index target retirement fund. You don't even need to hire a financial advisor. So if we're going to pay for this building and all these people in it, we Better be doing a heck of a lot more than that. And Drew, that's where actually we have to, you know, help you put the personal and personal finance of figuring out what your best path forward is. So that's the negatives of Roth conversions are taxes, reduction of taxable assets and then the opportunity cost. That money will never get to work again once you pay the government. So you just have to kind of understand those negatives and then figure out how you can find the most optimal time to work through because you do have that clock in the background with a required minimum distribution.

[Brian Preston]

The only thing I'm going to add to that, and this is just a practical thing, a lot of people think, all right, I want to see if I can do a Roth conversion. I'm going to go Google or I'm not even going to Google anymore. I'm going to use AI and say, hey, should I do a Roth conversion? It'll spit out, hey. Here are the pros of Roth conversions, here are the benefits and you give it all the details to give you some stuff. It's interesting. Whenever we do like a full Roth conversion analysis for a client, what we do is we lay out a best laid plan. Hey, you retire at 58. Here's our Roth conversion strategy that we're going to anticipate implementing from age 58 all the way out until age 75. It's really like 58 to 63 because you got Medicare surcharges, you got to figure out when social happens and after that it's from there until 75. So you lay out this best laid plan. But you know what actually happens in practice? Every single year you revisit iterate and adjust that plan. So it's not uncommon that we might start for the first three years of someone's retirement planning on this. But something changes, they move, they change states, they buy a piece of property, whatever that thing is. And all of a sudden now that plan that we were on needs to pivot, needs to shift. It is a dynamic process. A lot of people think that like, oh well, retirement's, you know, super easy. I'm just going to retire and I'm have 4% withdrawal rate and that's all there is to it. It is very nuanced. And Roth conversions are one of those that are very, very nuanced and can have huge implications over the lifetime of a financial plan.

[Bo Hanson]

And I'll tell you, just to kind of getting behind the curtain of what financial planners do, typically it's a two, two transaction discussion is because we'll start the end of the year, we'll kind of game plan at the end of the year what we think we're going to be able to do in a Roth con this year. But we don't actually pull the trigger on it until typically fourth quarter. And here's why. It's typically fourth quarter clients, you guys, and you're going to do this for yourself too. You have outside income sources that just come out of the blue. You're like, oh, but this happened. You're like, well crud, that kind of screws this up. Because now, because Bo just said it, you have to realize your Medicare, you know, there's, there's your Medicare premiums, your taxability, Social Security, all these things every year get reset. And we have to take that into account. And so that's why it's usually a two conversation conversion. It's because you have your best laid plan where you're kind of in the beginning of the year thinking about things, but then when you actually go to implement, you have to make sure that you double check all the variables that came into play.

[Brian Preston]

Love that.

[Content Team Member]

Fantastic. Well, Drew H, welcome to asking a question. He's a first time chatter, long time watcher.

[Bo Hanson]

So that was fun. This reminds me, I don't mean to belabor things, but I think about when I got LASIK surgery, you know, when I got LASIK surgery in the mid 2000s, and I'm sure it's this way now too, is that the robots had gotten so good that all you had to do was go to these. If you on the Sunday papers, if anybody even has a Sunday paper anymore, I'm sure they advertise just now on social media. You could get your eyes done for 500 a piece or something through Lasik. Back then, yeah, it was something cheap because you know, these places, these clinics were set up to basically just, you know, blow and go and you know, cut your eye and then cut, do it. And I'm sure for 90% of the people that was great. But it's, but for me, I was like, hey, I want to make sure.

[Brian Preston]

I only got two of these things.

[Bo Hanson]

I might be willing to stay and pay him $500. How about if I pay $4,000 and I get the same eye doctor as Greg Maddox, who you know is one of the world's greatest pitchers. That way when the robot doesn't, or some scenario hits that the robot doesn't like, I've got a world class person that's going to make sure that I don't Give up my eyeballs. Because I was just trying to say, just trying to. $3,500.

[Brian Preston]

It's not like a buy one, get one free.

[Bo Hanson]

Yeah. I mean it. Just because I'm only going to do this traction once. So maybe this isn't where I need to save my 3,000 bucks. So I feel like good financial manager. That's why we get a bad rap. Financial advisors, some. Look, now, there's a lot of people, I think if you're like, I was out with a great friend and he works with one of these. I'm not gonna say the name, but the custodians that do financial plan do financial planning and charge an asset under management fee. And I was like, are they looking at your property in casualty? Are they looking at you? Are you doing a tax projection or anything? I was like, no, they only do my investments. And they tell me they can't do anything outside of what they manage. And I'm like, is that even financial planning what they're doing for you?

[Brian Preston]

It's investment.

[Bo Hanson]

It sounds like they're just managing your money. So just be careful with that. There is a better way to do money. That's why we share so much. We try to give you the ins and outs of this thing. We agree. We probably jump in on the course when Ramit and others are trashing financial advisors. Like, yeah, that's probably not great financial planning. But if you actually see what is really going on behind the curtain, it's different. It's a little different, and it just hits differently. And you kind of know that. And I think that's where we're going, probably with all the AI stuff, too, is that, you know, the robots are going to get really good, but then you're like, is that really where I should save my money? Or is. Is. Is maybe some. Some personalization. Okay on that. Love that.

[Content Team Member]

Yeah.

[Brian Preston]

I don't know if you know this. A good friend of ours just popped into the chat. Did you see that? Did you. Are you aware.

[Bo Hanson]

So is it true that the Humphrey babies here. I think that everybody loved it. I said, so talk to us about baby Humphrey. Baby Humphreys. And what's funny is Humphrey, because I tried to do prep when we had Humphrey on and. And the story told was not any of the prep. It was the coolest thing. I had no idea. I'm realizing a lot of these content creators have really cool parents, and Humphrey is definitely one of them. His father, you know, flying unmarked planes for the CIA.

[Brian Preston]

No, no, don't tell him. If you don't know what he's talking about. You need to go make sure you.

[Content Team Member]

Listen to that episode, last week's live stream.

[Brian Preston]

See what I did there?

[Bo Hanson]

See, I'm good. I just tell it all. I just lay it out there for you. But welcome, Humphrey. We always love it when we have friends show up like that. Oh, that's hilarious.

[Content Team Member]

Incredible.

[Brian Preston]

It was a great episode. I think we have some more. I think there's more Humphrey content to come both.

[Content Team Member]

Yeah. Be sure to go subscribe to Humpy Yang's channel and to this money guy show channel because there's more coming pretty soon, actually.

[Brian Preston]

Very soon.

[Content Team Member]

Very soon.

[Brian Preston]

Very, very soon.

[Content Team Member]

Drew H. If you would like a money guy Tumblr, just email winner money guy.com. all right, next question is from just Josh and ya. It says, is there a certain level of wealth.

[Bo Hanson]

Time out.

[Brian Preston]

What my wife likes to read to our kids. Right.

[Bo Hanson]

Okay.

[Brian Preston]

Me, not a big reader. I don't mind admitting it.

[Content Team Member]

You like to read your kids.

[Bo Hanson]

Wait a minute. I hear that successful people have to read, like, 12 books a year.

[Content Team Member]

Darth Vader.

[Brian Preston]

I've read 12 books since I got out of high school. My wife is a great reader, though. So my kids want us, like, read stories or whatever. And so I'm like, this moose. This moose belongs to me.

[Bo Hanson]

No, your kids are reading, like, legit. They came by the other day and they had, like, all these autobiographies and stuff like that. I was really impressed.

[Brian Preston]

They are way, way cooler than I am. Here's what I was saying, though. My wife is what I call a vocal inflection reader. Meaning when she reads, she's gonna do the accents and she's gonna do the excitement. And what I just heard, Josh, Reby's that kind of mom. I bet you and Reb. You are an accent mom reader, aren't you?

[Content Team Member]

Not accent, but yeah. Like, I'm gonna have fun with it if I'm gonna sit and read a book.

[Brian Preston]

When you read. When you used to read to your kids, did you, like, change your voices and stuff?

[Bo Hanson]

Yeah, I think so. I mean, I think I. Right. Right now, if you put a kid's book in front of me, I probably would do it. Jump into that motion.

[Content Team Member]

I wonder if there's a correlation, because I think Brian and I were both theater kids in some respect.

[Bo Hanson]

I was a theater kid.

[Content Team Member]

There's some element of that. And so it just. Like you were not. So that's why.

[Bo Hanson]

That's why.

[Content Team Member]

Very small sample size.

[Bo Hanson]

But, Jock, you're the guy. I mean, we've all seen Revenge of the Nerds.

[Brian Preston]

What's funny is. No, we have. Me and you have seen it. You realize a lot of folks in this room have not seen Revenge.

[Bo Hanson]

I mean, Bo is the alpha betas or whatever. He's going around and putting everybody in the locker. I'm the one over there, you know, hanging out with the violin kids.

[Brian Preston]

That's hilarious.

[Content Team Member]

Okay, do you want to read Just Josh and Josh?

[Bo Hanson]

Yeah, let's get back on track.

[Brian Preston]

Just Josh and threw me off.

[Content Team Member]

Just Josh and ya says, is there a certain level of wealth where it makes sense to start using a charitable giving fund?

[Bo Hanson]

Oh, yeah.

[Content Team Member]

Or can that be done at any point in your financial journey? And I know this is one of those, like, I don't know, kind of like behind the scenes things that gets you guys really excited. So can you give us a little insight on.

[Bo Hanson]

Well, I definitely think it's something that it requires a little of your. I call it a boiling point indicator that you're doing well is because what makes these charitable giving funds, these donor advised funds, really powerful is that if you have appreciated holdings, it can be stocks, it can be mutual funds, it can be anything that's appreciated in your brokerage account. You can now, if you're charitably inclined, you can start giving these appreciated holdings if you're charitably minded to the charity from these donor funds. And then you get a tax deduction for the market value. The charity gets use of that market value, whatever the market values, because they're gonna liquidate it. And you never have to pay income taxes on that appreciated holding. So a lot of you. I mean, I have. I just did a transaction last week and the holding that I did had an appreciation of 166%. Amazing. So you think about what I was able to give to this charity is. I mean, it's amazing what I was able to give. And I'm going to get a tax benefit. They're going to get great use of this, and then I'm going to basically walk away from all that appreciation and paying income taxes on it. So it is. But it's not one of those things, I think, you know, it is one of those things where if you're brand new in the journey, you'll get excited about finding out about this thing. But the. It just might not have the juice yet. Until you have appreciated holdings. Do you disagree or disagree or agree or do you. I should have said that.

[Brian Preston]

Disagree or disagree or do you disagree?

[Bo Hanson]

Because you always say agree, disagree, or want to fight.

[Brian Preston]

I Don't want to fight ship, you're too fit. Now, I, I agree with you completely. But his question was, is there a certain level of wealth where it makes sense? I do not think it has to be level of wealth. And I wrote down sort of three different times that we see people do this. One you had already mentioned if you have any highly appreciated securities, even if you, hey, I mean, I bought this stock for $500 and it turned into a thousand, well, that's a great stock or that's a great holding that you could give to a donor advised fund. You could get the deduction and you can essentially wipe away those capital gains. So obviously gifting appreciated securities makes a lot of sense. The second time where a donor advised fund or charitable giving account can make a lot of sense is if you're someone who needs to do charitable bunching. Meaning, hey, I give. You know, like I give, I'm going to make up a number $10,000 to charity every year. But because the standard deduction is so high right now, every year I just take the standard deduction. So even though I'm giving to charity, I'm not really getting a benefit from that. Well, if you fall into that category, it might make sense for you to say, hey, instead of me giving 10,000 every year, I'm going to put $20,000 into my charitable giving fund this year. And I'm just gonna do that every two years. So one year I'll take the standard deduction and the next year I itemize, and the next year standard next year itemize. So if you need to bunch a donor advised fund or charitable giving account is great for, for allowing you to do that to actually get a tax benefit. And then here's the third, and this one's not as often talked about, but we see this with a lot of our clients. A number of people like to give to a lot of charities. I give to 25 different charities throughout the course of the year. Well, it's really hard to track down, okay, where's my giving receipt? And I got to get this and I got to list them all. If you're someone who gives to a number of different organizations or supports a number of different causes and you would like to consolidate what you have to keep track of, a charitable giving account is great for that because all you have to track is what goes into the charitable giving account. Even if you distribute it across a hundred different organizations, all that you have to report in your taxes is the one amount that went in. So it's a great tool for a consolidation when it comes to charitable giving.

[Bo Hanson]

And also it is interesting that you can if you're doing the bunching like Beau was talking about, you control when you distribute it later to the charity. So if you know your charity is kind of think about your church and you're bunching every two years, it doesn't mean you're only making contributions to your church every two years. You can actually still spread out your distributions to them so that their cash flow is not impacted either. It's a powerful tool for financial mutants once you get in. And what I like is because initially you see a lot of charities, they'd say hey, if you have appreciated stocks, let us know because they've set up their own brokerage account. But if you had mutual funds or ETFs, they were kind of not really ETFs but mutual funds for sure they had trouble. But I loved when these donor advised funds came around because a lot of I'm an index investor and all of a sudden now all of a sudden these index funds you could even give to charity much easier through these, these donor advised funds. That's it's a win win. A really cool thing.

[Brian Preston]

Love that.

[Content Team Member]

Love it. Well just Josh and ya, if you would like a money guy Tumblr just email [e-mail] I love what's going on [e-mail] so if you haven't been there recently, head over there, see all of the content that we launched.

[Brian Preston]

The new stuff like the new organization stuff in there, is that still not live yet? Stuff like on the website, you know how we've been working in the background for months and months and months and months. Is that live yet or is that still coming?

[Content Team Member]

Yes and I was actually just making a mental note to get some cool visuals of it so I could tell them about it next week. But since you are our loyal fans, yes there is some really cool stuff up there right now that we have finally launched a little soft launch that is going to help you find things even more efficiently. We have really common topics, trending topics that you can sort by and it will show you all of our ultimate guides, resources and full episodes that are covering those topics. So that should help you search and find content that matters to you even faster and better. So definitely go check that out. I'll be talking more about some of the stuff that's going on on the website in the coming weeks and months, but moneyguy.com definitely go check that out because we are always improving it and trying to make it the most valuable resource that it can be for our financial mutants. Because we really appreciate you guys and we're on this journey with you.

[Bo Hanson]

I get excited because I know when we do studio tours and others, people are like, holy cow. And I'm like, yeah, it's bo. And I don't know how to turn on any of this stuff anymore. So, I mean, that's a good. And it's kind of that way. I love that about the website too, because in the past, it was just a place to kind of just compile and keep a historical record of our. Of our content. But it has gone so beyond that now. Now we've become very deliberate that hopefully you guys in the audience too, you know that this is part of your wealth building journey. I mean, I was in Costco this weekend and I fell prey to going over and talking to one of these kiosk workers who were selling something that I've seen on TikTok. And I was like, oh, my God, this is actually gonna see the product in person. And I'm not gonna tell you what it is. It was embarrassing. But anyway, I was talking to this kid, I'll tell y' all off air later. But so this is what she's like, oh, so what do you do for a living? And I don't tell people, like, YouTube. So I just say, like, I'm financial planner. She's like, oh, my brother needs a financial planner right now. I'm like, okay, your brother needs a financial planner. He's not going to hire somebody that you helped fit this thing for. So she's like, well, where do I go now? I was like, just, if you go to Money, you just go to money.com, it'll be good. And she goes, so I just tell him to go to Money? I was like, yeah, I think she thought I was being weird.

[Brian Preston]

Why did you say I'm a financial advisor?

[Bo Hanson]

What am I supposed to say, though?

[Brian Preston]

Anytime someone says, hey, what do you do for a living? I say, we have a personal finance YouTube channel. That's what I say.

[Bo Hanson]

That sounds so. Everybody wants to be on YouTube. So I don't like to tell people I'm on YouTube.

[Brian Preston]

Oh, I don't want to. I don't want to tell people the one thing that everybody wants to know and wants to know more about.

[Bo Hanson]

I don't tell. I don't.

[Brian Preston]

No, no, you're right. Everybody's dying.

[Bo Hanson]

I tell everybody I work in finance.

[Brian Preston]

And what do they think? Oh, either one, he's going to sell me something or two. My brother's uncle's brother in law wants to come talk to you. That's all it ever is.

[Bo Hanson]

Okay? I don't even know why I brought up Costco at this point. I shouldn't have done that. I should be much better at saying, hey, give us a little bit of today and if you just put something to work, it's going to help you build your great big beautiful tomorrow. This is the worst closing in history. I'm your host Brian go to moneyguy.com resources trying to salvage it. Joined by Mr. Bohanson, the rest of the content team, MoneyGuy team out.

[Brian Preston]

The MoneyGuy show is hosted by Bryan Preston and Bo Hanson. Brian and Bo are partners with Abound Wealth Management. Abound Wealth Management is a registered investment advisory firm regulated by the securities and Exchange Commission. In accordance and compliance with the securities laws and regulations, Abound Wealth Management does not render or offer to render personalized investment or tax advice through the Money Guy Show. The information provided is for informational purposes only, may not be suitable for all investors and does not constitute financial, tax, investment or legal advice. All investments involve a degree of risk, including the risk of loss.