Podcast Summary

Money Guy Show

Episode: How She Built $380k by 38 (Without a Six-Figure Job) | Making a Millionaire
Hosts: Brian Preston and Bo Hanson
Guest: Rachel
Date: November 10, 2025

Episode Overview

In this "Making a Millionaire" episode of the Money Guy Show, Brian and Bo speak with Rachel, a 38-year-old single mom from Colorado who has amassed a $380,000 net worth despite never having a six-figure salary. Rachel shares her financial journey, concerns about spending, and strategies for saving for both her own retirement and her son's future. The hosts provide her with personalized feedback, modeling out her financial future through multiple scenarios, and offer actionable advice on investment strategies and insurance products. The episode is filled with practical insight, moments of vulnerability, and the reassurance that financial security is possible with consistent habits—even without a high income.

Key Discussion Points & Insights

Rachel's Background and Money Mentality

• Rachel is a single mom to a nearly nine-year-old son and works as a tech writer for an engineering firm, earning about $83,000/yr.
• She struggles with guilt and anxiety around spending on vacations or home improvements, fearing unforeseen setbacks.

  “I'm just afraid like I'm gonna spend a bunch of money and then something is gonna happen and I'm not gonna have that anymore.” — Rachel (01:44)

Net Worth Breakdown (Age 38)

• $380,000 total net worth
• Major investments:
  • $140,000 in a traditional 401(k)
  • $19,000 in Roth 401(k)
  • $80,000 in Roth IRA
  • ~$34,000 in traditional IRA
• Emergency fund: $30,000+
• Consistently saves ~29% of her income (including employer match)

Early Good Habits

• Started saving diligently after securing a job post-college, using bonuses wisely for student loans and retirement accounts.

Addressing Financial Anxiety and Past Experiences

• Rachel’s conservative approach is influenced by her parents’ risky decisions and financial setbacks.

  “I might be overcorrecting… because I save so much money, I'm wondering if I'm doing my present self a disservice because I'm too thrifty.” — Rachel (05:17)

Future Modeling: Is She on Track?

Dream Scenario: 10% Annual Return

• At current savings rate and portfolio:
  • Projected nest egg at 65: $5.6 million
  • Equivalent to ~$100k/year (in today’s dollars) of pre-tax retirement income

  “You get a pay raise.” — Brian Preston (07:03)

Realistic Down-to-Earth Scenario: 8.3% Return

• Using "wealth multiplier" methodology:
  • Portfolio at 65: ~$3.85 million
  • Can generate ~$67,000/year, which replaces ~80% of her current income

  “We think it looks pretty good, pretty great.” — Bo Hanson (10:56)

"Doo-Doo" Scenario: 6% Return

• Portfolio at 65 drops to $2.4M (yielding ~$41,000/yr), but this is still considered sustainable—before factoring in Social Security and paid-off mortgage.

  “Even in the do do scenario, it looks pretty good.” — Bo Hanson (08:30)

Mile Markers

• Rachel is on target to hit the show’s financial independence benchmarks, such as having 1x income invested by 30, 3x by 40.

Rachel’s Reaction:

“It does make me feel a lot better. Makes me feel hopeful for like what I can give my son for sure.” (11:26)

Adjusting the Path: Potential to Save More

• Bo notes her projections are conservative, with no increases in savings or income modeled.
• Rachel’s mortgage will be paid off in 2045 (freeing $1,200/mo), and she will receive a $15,000 life insurance “return of premium” lump sum in 2038.

Insurance Review & Advice

Return of Premium (ROP) Term Life Insurance

• Rachel and her son’s father bought ROP term policies for estate protection, but weren’t aware of cost inefficiency.

• Brian cautions that ROP and permanent life insurance policies are often marketed as investments, but typically cost more than pure term and are less efficient.

  “Every dollar that you can put to work or put with purpose while you're young... has an exclamation point on it.” — Brian Preston (15:14)

Whole Life Policy for Son

• Rachel pays $70/mo for a $100k whole life policy on her son (currently $1,100 cash value).
  • Future values: $3,400 at 18, $9,300 at 30, $46k at 65 (guaranteed)
  • With paid-up additions, $127k possible at 65

Comparing to "Invest the Difference"

• Bo runs a comparison:
  • If $70/mo is invested at 9% from age 9:
    • $15,000 at 18 (vs ~$7,000 with the insurance policy)
    • $58,000 at 30
    • $1.4 million at 65
  • During working years (age 25-55), term insurance is in place for realistic needs; outside those years, funds are invested.

  “Which one gets you more excited?”— Bo Hanson (28:33) “Definitely the 1.4.” — Rachel (28:33)

Accessibility and Risks

• After-tax investment accounts (UTMA/UGMA) would give her son easier access at age of majority, but also require education and oversight.

Hosts' Recommendation

“If I'm gonna be using $70 a month to do something for my son... might it make sense to surrender that policy and divert that $70 a month elsewhere?” — Bo Hanson (33:22)

Rachel’s Takeaway

• Appreciates the clarity and plans to re-evaluate her insurance policies.

  “You don't know what you don't know. And so I appreciate that.” — Rachel (34:04)

Portfolio Diversification and Next Steps

• Rachel inquires about her current investment mix and accounts.

• Bo reassures her that she’s following a good strategy (prioritizing tax-advantaged accounts, healthy savings rate), and doesn't recommend major changes.

• Suggests considering starting a regular after-tax investment ("Step 7" of the Money Guy "Financial Order of Operations") if she wants future flexibility or early retirement.

  “Keep doing what you're doing, but also... if there are things you feel like you're missing out on, you are on track, you are on pace.” — Bo Hanson (37:07)

Notable Quotes & Memorable Moments

On life balance:

“I don't want to sacrifice getting to create memories and doing things today just to have some slightly bigger pot of money later. If I know that I'm already doing the stuff that I'm supposed to be doing.”
— Bo Hanson (00:00, echoed at 36:16)

Personal financial anxiety:

“I might be overcorrecting… because I save so much money, I'm wondering if I'm doing my present self a disservice because I'm too thrifty.”
— Rachel (05:17)

On investment projections:

“Your $140,000 plus that savings... you get to like $5.6 million.”
— Bo Hanson (06:25)

On permanent vs. term life insurance:

“I'm telling you, when we talk about the better way... the hard part is the saving. Let's actually just do the easy part...putting the money to work.”
— Brian Preston (29:43)

On financial parenting:

“If you can instill that in a nine year old, my kids are around that same age. That's awesome.”
— Bo Hanson (33:12)

Timestamps for Important Segments

• 00:00 – 05:17: Rachel’s background, money mentality, and spending anxiety
• 05:29 – 11:26: Investment breakdown; models for future retirement (dream vs. realistic vs. “doo-doo” scenario)
• 12:12 – 14:13: Rachel’s future cash flow accelerators (mortgage, insurance lump sum)
• 14:13 – 28:33: Deep dive on life insurance; ROP and whole life pros/cons; invest-the-difference strategy
• 28:34 – 34:18: Custodial investment accounts, accessibility, teaching kids good habits
• 34:18 – 37:07: Portfolio review, diversification, and personalized next steps
• 36:16: Key life philosophy on balancing saving and living
• 37:07 – End: Rachel’s homework and closing encouragement

Actionable Takeaways

• Rachel should revisit her insurance products, especially whole life, and consider redirecting premiums into a custodial investment account for her son.
• She can afford to slightly relax her rigorous saving—her future projections are strong, giving her permission to enjoy life now.
• Continues to follow the fundamentals: regular investing, prioritizing tax-advantaged accounts, living below her means.
• As her income grows and mortgage is paid off, increasing taxable investing will offer more flexibility for early retirement or legacy goals.

Final Thoughts

The episode illustrates how consistent, smart financial habits can yield impressive results—even without a huge income. The key lessons include the power of investing early, the importance of understanding financial products (especially insurance), and granting oneself the grace to both save and enjoy life. Rachel exemplifies the "Money Guy" ethos of intentional living, making her financial journey an inspiring case study for listeners everywhere.