Loading summary
Transcript42 lines
- [00:07]
Brian Preston
Military Money Minute has a question for you. It says, super excited for the show. Dumb question.
- [00:14]
Bo Hansen
No dumb questions.
- [00:15]
Unknown
Right.
- [00:15]
Brian Preston
That's what I thought. That's why I'm asking it. Even though I'm maxing out my 401k at work, I don't feel like I'm saving enough. How do you deal with this feeling?
- [00:26]
Bo Hansen
This is. Brian, we've talked a lot about this because a lot of financial mutants have this. I don't know if it's insecure. I don't know if it's insecurity or lack of confidence. I'm not doing enough. I'm not saving enough. I'm not. It's one of the very reasons why we came up with the financial order of operations. Brian, will you hold the thing up? Can you hold the thing up for me?
- [00:46]
Unknown
Oh, yeah, I can do it.
- [00:47]
Bo Hansen
It's one of the reasons we came up with this nine step tried and true process of what to do with your next dollar. If you want your free copy, you can go to moneyguy.com resources and download yours. One of the reasons that we did that is we wanted to free financial mutants from that thought. Oh, am I doing enough? Oh, am I putting my money in the right places? Oh, I'm making the right decisions. If you can follow the financial order of operations and you can arrive at the place where you're saving 25% of your gross income for the future, for your future financially independent self, what that allows you to then do is free yourself from the guilt and the lack of confidence and am I doing enough? It's why we came up with the 25%. A lot of people think it's this restrictive thing that's going to make it difficult and hard and I've got to, like, strive to get there. It's actually the exact opposite. For true financial mutants. It is a liberating thing that once I get that, then I can spend abundantly on all the stuff that I want to spend on and all the areas that I want to spend because I know that I'm doing what I'm supposed to be doing in the places I'm supposed to be doing it for my future self. So one of the things I would ask military Money Minute is all right. If you're maxing out your 401k, what's your gross income? And are you at 25%? And have you been following the foo? And do you have a fully funded emergency fund? And have you done the Roth and have you done the hsa and have you Done all of these things. And if you have, then you can relax and know that you're doing the stuff that you're supposed to be doing.
- [02:23]
Unknown
I think about all the content that's out there in personal finance, you know, forever. Susie had tremendous success, is that people would call in and say, hey, I want to go get my hurt dog needs to have their leg fixed. And she'd be like, no, can you put them down? Hey, I haven't taken the kids on vacation in six years. Can I take the kids and lose Susie? No. I think truthfully, this is why as humans, sometimes I love the human condition. But there's other times you're like, man, sometimes we just like watching negative events occur in place. And that's where those shows. And even Dave, I think a lot of times people are kind of like going to a NASCAR event. There's more people listening to Dave to hear when is he gonna yell at somebody? Kind of like, you go to watch and see if there's going to be. You don't go car crash.
- [03:12]
Bo Hansen
You don't go for the left turns.
- [03:13]
Unknown
Or maybe a hockey match where you're hoping there's a fight. You know, I think it's the spectacle of those things that draws people in. And then here we are. We're kind of loading you up with all this financial mutant knowledge. But there is a true risk that I deal with all the time, is that anybody who's good with money, and you realize pretty quickly after you start learning the basics that you have a risk within yourself, is that you could very easily go from financial mutant to financial miser. That's a disaster, because it's going to make your loved ones around you miserable. You're going to miss out on a lot of life by thinking that this sum of money that's waiting out there at some point in the future is going to solve all your problems. And that's why we've tried to. And people think, why did y'all come up with this? Why are you selling this? Because we give away so much. And I think you guys get used to everything being free. But then every now and then, no, we can't answer this because finance really is personal. We need to give people a tool so they can figure out, are they ahead of the curve, behind the curve, or right where they're supposed to be. So that's why we came up with the Know youw Number course. It's not only a course, it's actually a tool. So you can actually type in all your data points. You can play around with your savings rate, the inflation rate, your rate of return, and it's gonna tell you, hey, are you on track to reach your goals? Are you behind? Cause one of my favorite things about being a financial planner, I think a lot of people get it wrong and they get this false impression by the Suzies, the Daves of the world, and that they think everything we do is that we are the break.
- [04:43]
Bo Hansen
Just the. No, no, no.
- [04:44]
Unknown
We are not the break. My biggest thing is to try to train financial mutants to enjoy and maximize this one life that you have now. Look, I don't mind being the bad guy when I need to be the bad guy, but most of the time I'm the coach telling you, hey, it's a. Okay, go live your best life. Because that's what. That's what our secret sauce is. I'm a numbers nerd, but I am the most sentimental person out there on the future. And I'm trying to help you get that perfect mix, that recipe that lets you get to be your older self and look back at your 20s, your 30s and 40s and go, man, I did that right. And yet I still have reached all my financial goals. And that's what we're building here with the money guy show. That's great.
- [05:28]
Brian Preston
Awesome, Great question. Thank you. Military money minute. And we are always appreciative of everybody being here and continuing to ask great questions. Jack W. Has another question for you guys. He says, I'm 18 headed to. I know, ready for tuning in.
- [05:44]
Unknown
18, that is. When I look at our demos, you know, we do great from 25 to about 45. We are locked in sweet spot.
- [05:52]
Brian Preston
Yeah.
- [05:52]
Unknown
You know, and we never have to worry when all the kiddos get brought in and they say, hey, is your content. Because we have to make sure, Jack, you are an outlier and that you're going to be the better for it. Because let me tell you, I don't even do it. Yeah, I do have it. 18. Every dollar an 18 year old has is worth $108. Wowzer.
- [06:14]
Brian Preston
So speaking of that, the question says I'm headed to college and wondering what's the best thing to do with my money investing wise. School is paid for, which is awesome. Congrats. And I do have minimal expenses. So we've got a young and true financial mutant on our hands right here. What would you tell him about investing while in college and personal finance in general?
- [06:40]
Bo Hansen
I'm going to go like theoretical and behavioral and you can go specifics if you want. Here's What I think is the best thing you can do at 18:1, the entire world is your oyster. You have your entire life ahead of you, which means you have so much opportunity to unleash the eighth wonder of the world, which is compounding interest. And so what's great at the age of 18 is you kind of can't screw it up unless you don't do anything. And so what I would encourage you to do is if you have minimal expenses and you have some sort of income coming in, maybe it's part time work, maybe it's even excess scholarship or grant money because you said school is paid for. One of the things I would encourage you to do is figure out how can I set up an automated investing plan. Maybe it's 20 bucks a month, 40 bucks a month, 50, 100, whatever the number is for, you start with something. And I don't mean like take $1,000 and go pick a stock and buy that stock today and hope that it does well, because that's like a 50, 50 gamble. Maybe you pick a good stock, maybe you don't pick a good stock. What I want you to do is I want you to put some money to work every single month and you can buy a low cost target retirement index fund or a low cost S&P 500 index fund and every single month have the same dollar amount, just go to work and invest fifty bucks a month. Fifty bucks a month. Fifty bucks a month. Fifty bucks a month. Because what I hope happens is as you go to college at 18 and you go through, let's say you're going to be in School for four years and you get to age 22 and you come out of school, I want you to look at that account that you've been dollar cost averaging into and I want your mind to be blown at what's happened just over a short four year timeline, how much those dollars have grown. And what I hope happens is that you get addicted to saving. So when you start your very first job now it's not okay. I'm only going to do 100 bucks a month. I'm going to do 5% of my pay, 10% of my pay, all the way up to 25% of my pay. And if you can do that as early as possible, you are going to set your future self up to have tons of flexibility and tons of choices on what your life is going to look like in the future.
- [08:46]
Unknown
Jack When I especially, I love when a young person catches our content because I'm going to go even outside of Money here because you're getting close to going to college. Be very serious about being deliberate on not just choosing a job, but a career that you want to do for the rest of your life that actually can be rewarding. I think so many students, when I talk to them and I say, what's your major going to be? And I find out they don't really know. They choose something that sounds interesting, but they haven't thought about what am I actually going to do with that major. Don't go because a class will be just interesting to you. I remember when I was at Georgia, well, I had an extra class because I had exempted out of some math classes. So they let me just choose anything. And was entomology is study of bugs.
- [09:36]
Bo Hansen
Okay. Yeah.
- [09:37]
Unknown
I was like, this is the most interesting class that I've ever taken. And I loved every day that I was in that class. And look, I'm sure there's some very successful bug doctors or bug studiers. But if I would have chosen my choice of career off of what I found exciting on class load, that was a heck of a lot more fun to go to that class than it was accounting.
- [09:57]
Bo Hansen
You mean governmental accounting and studying bugs are not the same.
- [09:59]
Unknown
I completely did. But that's why, Jack, you have to be purposeful with every second that you have, especially on a college campus, because it's not cheap. I mean, I will tell you, you need to be deliberate with your time on campus. So find a job that can be rewarding but also has a market value.
- [10:16]
Bo Hansen
What percentage of the general population ends up going to school and not even working in a field experience?
- [10:21]
Unknown
So let me give you because I love this stat and I love how just symmetrical it's come up in our last two surveys of our clients. 74% of people with college degrees do not work in their field of study. That is an absolute dumpster fire of decision making. Meanwhile, you look at our millionaire clients. We survey them. It's somewhere. It comes between 72 and 74% depending upon what year you look at our survey results. Do work in their field of study. Do you see how you allocate? Part of being successful is allocating your time and your resources much more efficiently than the rest of your peers. So get a good job. Second thing, you are a billionaire of time. That's right. You might not have much money, but you have so much time. You're literally a billionaire if you count how many seconds you still have left to be on this planet. Don't waste that huge opportunity, people. You're looking ahead of you, like, who are in their 30s, 40s, even 50s. Man, I hope I have that. You could have that. But they will never be able to have what you have, which is billions of seconds of time. Be very deliberate with that. I want you. Everything that you come into contact with, whether it comes with money or time, I want you to think about. Just like I tell you, a dollar has the potential to become $108, if you can understand that concept. You'll spend differently, you'll save differently, you'll give differently, because you understand what it's worth. And then I'm gonna give you the other side, which is a little softer once you put some of these things into motion. And that's why we give you the financial order of operations. Make sure you enjoy your 20s, make sure you, well, enjoy your teens, and then enjoy your twenties and then enjoy your thirties. Cause nobody likes a miser. But you gotta get the work in first, so then you can live your best life without regrets.
- [12:13]
Bo Hansen
Favorite date night or favorite activity to do in college on a budget, like not having tons of money. What was the that young Brian Preston said, now this is a good time. I would go do this when I was in college.
- [12:26]
Unknown
I mean, it's different. Like date nights. I don't mind sharing. Here was the game plan for a financial mutant. I would actually spend money on the first two dates because you had to set the hook and then, and then. But then after that, you know, it was cook at the house, go hang out with friends, do trivia nights and things like that. But you gotta set the hook first, you know, and actually take them somewhere nice. Take them to Olive Garden, but with buddies. I mean, you could. I use some of my favorite memories. I even go back to high school, is sometimes driving two things like go to a concert or something. The time in the car. You have five guys piled into a car and you're just goofing off on the way to a concert. The driving to the concert in the car was more fun than actually the concert. And that's what. So just make sure get around people you love spending time with and then just enjoy that moment. Because I will tell you, as an older guy, I look back on my life and you don't realize those lightning in a bottle moments that you take for granted in the moment. Then you get, you know, 20, 30 years beyond it and those people aren't around. Maybe they live geographically in different places. And you go, man, make sure you. You find people you care about and try to get as much time with them as possible.
- [13:36]
Bo Hansen
I love that.
- [13:37]
Unknown
I love that.
- [13:38]
Bo Hansen
Jack, you're going to do so good. Oh.
- [13:40]
Brian Preston
Oh, yeah. Jack, W. Really glad you're here. Thanks for submitting the question. All right, we've got a question from David L. He says, how should you save for a home using a high Yield savings account or a brokerage account with index funds? I'm curious what time horizon would make it safe enough to expect the higher returns from index investing? What do you think?
- [14:04]
Bo Hansen
So this is a. We get one. We get asked this question all the time as well, and I think a lot of people are curious. Now I can tell that David's been listening to our content because he kind of already set the table a little bit when it comes time to save for home. First question you have to answer is, how much do I need to be saving? Right. A lot of financial personalities out there will tell you that when you buy a home, you must put down 20%. That is not something that we subscribe to, nor is that something that we have practiced ourselves in our own financial journey. For first time home buyers, we give you a little flexibility rather than having to put down 20%, we think it's perfectly acceptable if you only are able to put down 3 and a half, 5, 10% on your first home purchase. We have an entire home buying checklist that you can go check out. You can go to moneyguy.com resources and check that out. But you have to define, okay, number one, how much money do I need to save? And then the second thing you have to determine is, all right, what's the timeline on which I need to acquire these funds? Am I buying a home in the next two, three, four years or do I not know what I'm going to buy? My home? I just have like this idea that one day I want to enter into homeownership. Because depending on those two answers will dictate how you should begin thinking about accumulating those.
- [15:22]
Unknown
Well, always look, cash versus access to cash. If you really want to know how I think about this, guys, I literally gave you.
- [15:31]
Bo Hansen
I wrote the book on in depth.
- [15:33]
Unknown
Story in Millionaire Mission on how I think. Because the biggest thing I run into with financial mutants is you guys think cash is trash and you do everything in your power to try to put it to work to actually your detriment when the music stops of bad things. Remember when it rains, it pours when bad things happen. So learn from me. Read the section on Millionaire Mission. It's really when we talk about doing rainy day done Right. With cash reserves, you're going to hear what a knucklehead I was because I thought I was so smart and you can learn from my experience. I would also give you a visual if something is a solid vision, meaning that it is in the future and you know in the next three years that you're going to do something that's liquid cash. I mean, because there's just nothing that. Cause you know it's coming up. There's always the chance that there's going to be a volatile moment. If you have equity investment, especially S&P 500, you could lose 40% in about a five month period and you'd be like, what the heck just happened? And you couldn't even react fast enough. Even you wouldn't want to react because, you know, nobody tries to catch a falling knife. It's a disaster. So that's what can happen. If you know something's happening in three years. However, maybe you're just in this stage of life and this is something you and I are now at this point like we have this commercial building and you and I have enjoyed this commercial building and we've decided, hey, we might want to do another commercial building. But we don't know. We're really waiting for the right time, the right opportunity, the right thing to come our way. So that's not a clear picture, that's a fuzzy picture and there's no time frame. It might be three years, it might be four years, it might be seven years in the future. Because there might need to be big economic thing to happen for this to be good for us. Because that's so fuzzy. I am going to treat that as more of an opportunity to where maybe I'm going to have a balance of a. Hey, I need. I know I have enough coming up. Plus I need emergency reserves. So this part here is going to stay in a high yield savings account because it's locked in. But maybe this part over here, because it's so fuzzy, I'm going to allocate a portion of this into investments so that money can actually grow and not just be sitting out there stagnant. So I would say take a picture of what you're looking at and how clear is it. If it's within three years, lock it down. If it's out there more in the future, it's going to be more of a balanced. Of probably a mix of cash plus investments.
- [17:57]
Bo Hansen
Agree fully.
- [17:58]
Brian Preston
That was great. Well, David L. I hope that that helps you think through that. Great question. We really appreciate you being here. We love hearing what's going on and your financial live so that we can speak to it and hopefully just help you think through it and discuss it and bring a little bit more clarity, helping you bring a little bit more peace of mind to your financial situation. What?
- [18:19]
Unknown
I said clarity. I was trying to stay on the whole theme.
- [18:22]
Bo Hansen
Y'all finish each other's sandwiches. You see that?
- [18:23]
Brian Preston
So cute. Love it, love it, love it. Well, hey, we do really love answering these questions. We're here every Tuesday, 10am Central. But in the meantime or over the holidays, if you ever need to keep these questions going, keep these conversations going, head to moneyguy.com moneyguy.com Resources in particular is just chock full of free resources that are meant to be there for you when you need it. So you can do a little bit of a deeper dive on some of these things that we're talking about or just have it documented so you can be reminded of it more often than just on our Tuesday livestreams or podcasts and all of that. So be sure to head to moneyguy.com, we're really grateful you're here, guys.
- [19:03]
Unknown
We love doing this and a big thank you to you guys. I even missed a key part earlier when I was talking about Jody did the studio tour. She made my day when she said she was looking more forward to meeting me than going to the Post Malone concert. So you can tell us financial mutants, you guys are wired a little differently and we don't take it for granted. And we love every moment that we get to create this type of content and give you all this information that we load you up with. If you go to moneyguy.com resources and remember what sits underneath all of this is that there's a better way to do money. So respect the foo. I'm your Host, Brian Preston. Mr. Bo Hansen. Money Guy Team out the Money Guy.
- [19:48]
Show is hosted by Brian Preston. 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 and does not constitute financial tax, investment or legal advice.