Money Guy Show: How to Build Wealth With A Negative Net Worth | Making a Millionaire

Hosts: Brian Preston & Bo Hanson
Guests: Carl (PA) & Laurel (5th Grade Teacher)
Release Date: December 8, 2025

Overview

In this episode of the Money Guy Show's "Making a Millionaire" series, Brian and Bo advise newlyweds Carl and Laurel, who are grappling with a negative net worth due to substantial student loan debt but are motivated by a high household income (~$200K) and strong saving discipline. Using the Financial Order of Operations framework, the hosts guide the couple in harmonizing three major goals: paying off student loans, buying a family home, and building long-term wealth through investing—all while addressing the emotional challenge of managing debt and the opportunity cost of waiting to invest.

Key Discussion Points & Insights

1. Financial Snapshot and Emotional Impact (Starts ~[01:00])

• Net Worth Statement:
  • Cash: ~$35,000
  • Investments: ~$23,000
  • Student Loans: Carl $110,000; Laurel $28,500
  • Current Net Worth: –$81,000
• Emotional Perspective:
  • Carl: “When we started, it was around like $228,232 as far as student loans. So it does feel good knowing that we’ve at least got that number way down.” –[02:48]
  • Both are motivated but feel pressure about the negative net worth.

2. Current Strategy: Debt Repayment Focus ([03:00]–[09:30])

• Carl has been heavily focused on paying down student loans using the “debt snowball” strategy.
• The couple avoids unnecessary debt (e.g., credit cards, car payments) and lives frugally.
• Investments are not a top priority but some retirement contributions are happening:
  • Employer 401A, 403B, pension (TRS), and some cash investments.
  • Automatic contributions (totaling ~$1,300/month), but mostly driven by employer contributions.

3. Home Purchase Plan & Living Situation ([04:00]–[06:00])

• Carl and Laurel live in Carl’s great aunt’s house (valued at ~$900,000, purchase price set at $450,000).
• Plan to buy the house from family in 1–1.5 years, likely with a traditional mortgage.
• Living rent-free enabled them to aggressively pay down debt.

4. Assessing Opportunity Cost & the Financial Order of Operations ([08:09]–[12:59])

• Hosts emphasize: Every decision (debt vs. investing vs. saving) involves tradeoffs (“opportunity costs”).
• Brian: “You have what it takes. You are. You have good income coming in. So you obviously have discipline…” –[08:22]
• The "Financial Order of Operations" is introduced as a systematic approach to prioritizing goals.
• Highest priority: Knock out true high-interest debt (>6%), but recognize that time is a powerful resource for building wealth through investing.

5. Nuances in Debt Strategy (Student Loans and Forgiveness) ([12:46]–[14:44])

• Title 1 school loan forgiveness: Laurel expects up to $17,000 forgiven if she meets a five-year teaching commitment.
• Brian: “If you are someone who's gonna take advantage of teacher loan forgiveness, it probably would not make a ton of sense to rapidly pay off that debt.” –[13:08]
• For Carl, one remaining loan at 6% interest (qualifies as “high interest”)—priority to pay off, others (~5%) are borderline and more strategic.

6. Cash Flow Analysis and Building a Plan ([13:22]–[20:35])

• Monthly cash flow:
  • Income: ~$11,300/month
  • Expenses: ~$4,100/month
  • Free Cash Flow: ~$7,000/month
• Emergency fund is healthy (over six months' expenses).
• Actionable recommendation: Use surplus cash and cash flow to eliminate the 6% student loan quickly.

7. Balancing Multiple Goals—Constructing the “70/30” Plan ([22:00]–[31:00])

• Proposed split: After eliminating high-interest debt and saving for a house, divide remaining cash flow:
  • 70% to investments (e.g. Roth IRA, 401k, index funds)
  • 30% to pay down the 5% student loans beyond minimum payments
• Bo: “We did exactly what you just said without knowing, as we did 70, 30.” –[24:45]
• Result: Loans paid off in ~5 years (vs 14 if minimums only); retirement savings could compound to ~$7 million by age 60.
  • Quote: “That $7 million at age 60 is about $121,000 a year [in today’s dollars].” –Bo, [31:17]

8. The Wealth Multiplier (Power of Starting Early) ([26:32]–[28:22])

• Brian uses the “Wealth Multiplier” to explain how time boosts investment growth.
  • Laurel (28): Every $1 invested today can become ~$30 by retirement.
  • Carl (32): Every $1 can become ~$18 by retirement.
  • “Time is cruel, it’s powerful, but it’s also very unfair. Now, if you waited three years... every dollar only has a chance to become 12.69.” –Brian, [27:34]
  • Urges immediate action so compounding can do the heavy lifting.

9. Behavioral/Educational Insights ([15:00]–[17:40])

• Carl’s initial struggle with credit cards and debt aversion (“Dave Ramsey” phase).
• Laurel attributes her saver mentality to family influence.
• Both have matured beyond impulsive spending and share a disciplined mindset.

10. Investment Order of Operations & Action Steps ([31:53]–[35:23])

• Investment priorities:
  1. Get all employer matches (401A, 403B, TRS pension).
  2. Max out Roth IRAs for both.
  3. If eligible, open and fund HSA.
  4. Contribute additional funds to 403B/401k.
• Actionable homework:
  • Reassess emergency fund and deploy excess cash.
  • Pay off the high-interest (6%) student loan ASAP.
  • Talk to a bank to confirm down payment requirements on the house.
  • Save ~$3,000/month toward home purchase if needed.
  • Decide on a split (e.g. 70/30) between investing and debt repayment for remaining loans.
  • Review plan regularly and adjust as needed.

Notable Quotes & Memorable Moments

• On Eliminating High Interest Debt:
  • “Realistically, you could knock out that 6% loan pretty quickly.” –Bo, [19:03]
• On Financial Priorities:
  • “Every financial decision you make has an opportunity cost associated with it.” –Bo, [00:58]/[24:45]
• On the Power of Investing Early:
  • “Every dollar could potentially become $29.70 at retirement.” –Brian, [26:43]
  • “If you waited three years... every dollar only has a chance to become 12.69.” –Brian, [27:34]
• On Opportunity Lost to Time:
  • “Time can be your most valuable resource, but it can quickly turn into your enemy if you neglect the wealth building process too long.” –Brian, [29:16]
• On Finding Balance:
  • “We're just trying to figure out how you balance that... I always remind people there's a risk you won't have as much on your army of dollar bills to pay for you when you're not working.” –Brian, [25:30]
• On Newfound Clarity:
  • “That's been the missing piece. I feel like that’s kind of how we found you guys... there’s definitely something else we could be doing that we should be doing.” –Laurel, [31:30]
• On Action Steps:
  • “Does this align with the plan that you already had in place?” –Bo, [33:15]
  • “Figure out your split with a free cash flow. Do we want to go 70, 30? Do we want to go 80, 20?... Rinse, repeat, reevaluate, and start building your great big beautiful tomorrow.” –Bo, [34:16]
• On the Roth IRA:
  • “It cracks me up that you opened a Roth account, but we haven’t really started funding this. Once again, that is—that’s the first step.” –Brian, [34:05]

Timestamps for Key Segments

• [01:00] – Introduction of Carl & Laurel's finances and negative net worth
• [04:00] – Living situation, house buying plans, and family support
• [08:09] – Discussion of opportunity costs and financial order of operations
• [12:46] – Nuances regarding student loan forgiveness for teachers
• [13:22] – Cash flow breakdown and emergency fund strategy
• [19:00] – Prioritizing elimination of high-interest debt
• [20:35] – Home purchase math: Down payment, timeline, and mortgage affordability
• [22:00] – Strategic allocation: 70% to investment, 30% to student loan repayment
• [26:32] – The “wealth multiplier” and the urgency of starting to invest early
• [31:00] – Projections for net worth growth and retirement income
• [33:15] – Step-by-step investment order of operations and actionable homework

Conclusion

Brian and Bo empower Carl & Laurel (and listeners) with the clarity, confidence, and framework needed to break free from debt anxiety, maximize compounding through early and steady investing, and use their high income to orchestrate simultaneous progress toward multiple life goals. Their tailored advice, emphasizing intentional tradeoffs and the cost of inaction, culminates in a practical, repeatable action plan—underscoring that personal finance is personal, but success is built on disciplined, informed decisions taken early and often.