How to Reduce Your Money Stress

Summary

Money Guy Show: How to Reduce Your Money Stress
Hosted by Brian Preston and Bo Hanson
Release Date: May 28, 2025

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Introduction

In the episode titled "How to Reduce Your Money Stress," hosts Brian Preston and Bo Hanson delve into the prevalent issue of financial anxiety among Americans. They explore actionable strategies to alleviate money-related stress, emphasizing the importance of proactive financial planning and empowering listeners with simplified wealth-building tactics.

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Understanding Financial Stress

Bo Hanson opens the discussion by acknowledging the widespread discomfort associated with money matters:

"Money and talking about financial topics, it just raises a lot of discomfort and a lot of anxiety. And I think that's pretty common across the American populace."
(00:12)

Brian Preston emphasizes the role of active participation in mitigating stress:

"Instead of just letting life happen, instead of just being a passive participant, you can actually take an active role and guess what plan. I think planning is the missing cog that can help people see the other side of this."
(00:34)

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The Power of Financial Planning

The hosts highlight findings from Empower's study, revealing that 78% of respondents experienced reduced stress when they had a written financial plan:

"Having a financial plan, having something actually written down helped reduce their stress."
(01:04)

Bo Hanson underscores the necessity of translating big financial dreams into actionable steps through writing and planning:

"If you actually want to see that dream become a reality, if you actually want to see your circumstances change from where they are right now, you have to actually write it down."
(01:45)

Brian Preston further elaborates on focusing efforts on controllable factors to ease anxiety:

"You're worried about decisions you made in the past or you're worried about your future... the big thing if I was giving advice on how do we get on the other side of this stress... is to first figure out what you can control."
(01:49)

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Financial Order of Operations

The duo introduces their Financial Order of Operations, a nine-step process designed to simplify wealth-building and reduce financial stress. Bo Hanson explains its effectiveness:

"Building wealth is really pretty simple. Not necessarily easy, but it's pretty simple. And the financial order of operations was designed to be a nine step process to help you begin putting your financial plan together."
(02:14)

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Role of Financial Advisors

Addressing whether everyone needs a financial advisor, Bo Hanson clarifies:

"Do you guys feel that everyone needs a financial advisor? And the answer is no."
(04:17)

They advocate for utilizing available resources like YouTube channels, books, and podcasts for general financial planning. However, when financial situations become complex, professional advice becomes invaluable:

"If you do grow to the level of complexity, where having a professional... can give you peace of mind knowing, okay, my plan is solid, my plan is sound."
(04:17)

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Listener Questions and Expert Advice

The episode features a series of listener-submitted questions, each addressed with thoughtful analysis and practical guidance.

1. Buying a Bigger Home and Using Equity (Ashley S.)

Question:
“We want to buy a bigger home in two to three years and keep our current home as a rental. Saving 20% down seems impossible without selling. With about 22% equity in our current home, should we consider pooling equity to fund the new down payment?”

Bo Hanson reframes the dilemma, cautioning against taking on excessive debt:

"The goals in my opinion seem to be in conflict with one another. Maybe we don't need to hold on to this house, maybe we should sell this house in order to be able to have a down payment."
(08:08)

Brian Preston adds a tax perspective, highlighting benefits of selling:

"If you live in this house two out of five years, you can write off or have tax-free gains on up to half a million dollars of gains."
(10:29)

Conclusion:
Sell the current home to free up equity for the new down payment, ensuring financial stability without over-leveraging.

2. Reducing Savings Rate Amidst Life Changes (Jamie L.)

Question:
“We are parents at 33 with an investable net worth of 3.2 times our income. With a 7-month-old, now is the time to step off the gas. Yet it brings stress. What do I do when math isn't enough to set my stress at ease?”

Brian Preston commends their financial position but urges a deeper analysis of the sources of stress:

"Look, you have a great net worth, but triage what is actually creating the stress in your life."
(16:32)

Bo Hanson uses a NASCAR analogy to illustrate the importance of finishing the financial race strong:

"It only matters where you finish. You don't get credit for leading most of the race."
(18:34)

Conclusion:
Assess and address the specific factors causing financial stress, ensuring that temporary reductions in savings align with long-term financial goals.

3. Calculating Savings Rate with Employer Contributions (Shoffman909)

Question:
“My employer has an annual $500 match but also contributes an annual discretionary 9% of my compensation. How do I calculate my savings rate?”

Bo Hanson and Brian Preston discuss the nuances of employer contributions, emphasizing the need to determine whether the discretionary contributions are consistent:

"If you make under a certain threshold, count the employer contribution. Otherwise, it may not be reliable."
(22:30)

Conclusion:
Evaluate the consistency of employer discretionary contributions before incorporating them into your savings rate calculations.

4. Early Aggressive Saving and Lifestyle Considerations (kaboom)

Question:
“I'm 21 and saving well above 25% of my income with the power of compound interest on my side. Is it a bad idea to be a semi miser temporarily until about 25 years old?”

Brian Preston shares personal anecdotes about disciplined saving, advocating for balance:

"Don't spend money simply for the sake of spending money."
(25:14)

Bo Hanson supports early aggressive saving while encouraging enjoyment of life where feasible:

"If there aren't things that you desire to spend money on, don't go out and spend money simply for the sake of spending money."
(28:44)

Conclusion:
It's acceptable to save aggressively in early years, provided it doesn't compromise essential life experiences and relationships.

5. Maximizing Employer Stock Plans (Robert C.)

Question:
“Should I include my Employee Stock Ownership Plan (ESOP) shares in my financial plan even though their value changes each year based on my company's performance and annual evaluation?”

Bo Hanson affirms the importance of including ESOPs in financial planning, advising careful assessment of their proportion in the overall portfolio:

"Absolutely, you should include that on your net worth statement."
(56:40)

Brian Preston cautions against over-reliance on company stock for financial independence:

"If it is the lion's share of your money, you should be scared."
(58:10)

Conclusion:
Include ESOP shares in your financial plan, but ensure they are balanced with other diversified investments to mitigate risk.

6. Handling High-Interest Graduate Loans (Christian G.)

Question:
“I'm 24, graduating from graduate school, no debt besides student loans. My undergraduate loans are low interest, but my graduate loans are 8%. Should I focus on paying those down as soon as possible or put extra money into investment accounts?”

Bo Hanson recommends prioritizing high-interest debt repayment:

"For someone in your 20s, 8% is pretty high interest on a student loan. Every dollar that I put in on the pre-tax basis will save me like 30 cents in taxes."
(47:28)

Brian Preston echoes the sentiment, emphasizing the substantial returns from eliminating high-interest debt:

"Paying down high-interest loans can provide an imputed rate of return that is hard to match with investments."
(49:13)

Conclusion:
Prioritize paying off high-interest graduate loans to reduce overall financial burden and improve long-term financial health.

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Personal Anecdotes and Engaging Stories

Throughout the episode, Brian and Bo share personal stories that illustrate financial principles in real-life scenarios. Notably, Bo recounts his first professional travel experience, highlighting frugality and prioritization:

"Right away, I slept on a cot in a hotel room with two bosses."
(31:08)

These anecdotes serve to humanize financial advice, making it relatable and tangible for listeners.

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Conclusion and Key Takeaways

Brian and Bo conclude the episode by reinforcing the importance of proactive financial planning and utilizing available resources:

"We do believe there is a better way to do money. And I just hope that when you reach that level of success... remember the abundance cycle."
(59:14)

Key Takeaways:

1. Active Financial Planning: Taking control of financial decisions significantly reduces stress and anxiety.
2. Financial Order of Operations: A structured, step-by-step approach to managing finances simplifies wealth-building.
3. Balanced Use of Advisors: While not everyone needs a financial advisor, professionals are invaluable in complex financial situations.
4. Prioritize High-Interest Debt: Eliminating high-interest loans should take precedence over investments to ensure financial stability.
5. Diversified Investments: Avoid over-reliance on any single investment or asset, such as company stock, to mitigate risks.
6. Lifecycle Financial Strategies: Adjust financial strategies to align with different life stages and circumstances.

For more in-depth guidance and free resources, listeners are encouraged to visit moneyguy.com/resources.

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Notable Quotes:

• "Having something actually written down helped reduce their stress." — Bo Hanson (01:04)
• "Planning is the missing cog that can help people see the other side of this." — Brian Preston (00:34)
• "If you actually want to see that dream become a reality, you have to actually write it down." — Bo Hanson (01:45)

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This episode serves as a comprehensive guide for individuals seeking to manage and reduce their financial stress through structured planning and informed decision-making.

Transcript

[Bo Hanson]

Foreign.

[Brian Preston]

Of the folks stressed about money and have anxiety. Bo, how do we fix this?

[Bo Hanson]

Brian, I am so excited to talk about this because I believe this is something we can fix. This is actually a statistic that we can impact, that we can improve. Because I think a lot of people feel this way. Money and talking about financial topics, it just raises a lot of discomfort and a lot of anxiety. And I think that's pretty common across the American populace.

[Brian Preston]

Well, I mean, we live in anxious times. And if you know anything about stress, anxiety, a lot of times it's because you're worried about decisions you made in the past or you're worried about your future, some big thing happening. But you know what could really help out with all of this? Instead of just letting life happen, instead of just being a passive participant, you can actually take an active role and guess what plan. I think planning is the missing cog bow that can help people see the other side of this.

[Bo Hanson]

Yeah. There was actually a study done by Empower, and they said, hey, how would you feel about this? And 78% of their respondents said having a financial plan, having something actually written down helped reduce their stress. Brown we talk about this all the time, and we see people who have, like, big goals or big visions or big dreams. One of the things we always say to them is, if you actually want to see that dream become a reality, if you actually want to see your circumstances change from where they are right now, you have to actually write it down. You have to have pen on paper so that you can come up with steps to move from where you are today to ultimately where you want to be when it comes to your finances. It's really no different.

[Brian Preston]

Well, and I think people will quickly realize a lot of the things they stress about are things they actually can control.

[Bo Hanson]

Yep.

[Brian Preston]

So the big thing, if I was giving advice on how do we get on the other side of this stress or anxiousness that you have, first figure out what you can control and not get caught up in all the noise of the media and everything else. And guess what? We have created the perfect what do you do with your next dollar guide? With the tried and true financial order of operations.

[Bo Hanson]

That's exactly right. Rather than having to guess, rather than having to try to figure out. Because a lot of people think, oh, okay, I got to write a financial plan or I got to figure, where do I start? What do I do? It does not have to be incredibly complicated. As a matter of fact, building wealth is really pretty simple. Not necessarily easy, but it's pretty simple. And the financial order of operations was designed to be a nine step process to help you begin putting your financial plan together. And what we love to see happen is when someone discovers this for the first time and they interact with the food for the first time, they say, man, I didn't know I could think about it that way. Man, I didn't know that I could have confidence in my financial life. If you can begin to do that, you can be One of these 78% of people who actually feel less stressed because you have an actual plan in place.

[Brian Preston]

I know that there's only about 40% of our audience that's actually subscribed. So a lot of you are brand new to these concepts. Hey, at a minimum, go out to moneyguy.com resources. We have tons of absolutely free stuff to really help you accelerate and jumpstart your journey so you can actually be in control and know what's going on with your money. Now for those of you who've been around for a while and you start to, man, I love whether these guys are doing the Making a Millionaire show where they're doing their reacts. I just feel like these guys always put me in a good place to know how to answer things. And you might be thinking, but I've had so much success from watching this content for the last decade that now I feel like I am the CFO or even the CEO of this seven figure enterprise and I just don't know what I know or should know. We like to let people know that. This same Empower research also shared that 65% of respondents said speaking with a financial professional was important or helped. And I think that's the big thing is, and that's why I love that we get to give away so much free content so you can be empowered to be the best version of yourself. But we're also kind of that backstop when you realize, oh my gosh, I have created a complexity because of my success. We're there for you.

[Bo Hanson]

I think people are amazed to hear us say, because we get this question all the time, do you guys feel that everyone needs a financial advisor? And the answer is no. I think with all the resources out there with YouTube channels and great books like Millionaire Mission and podcasts and all of these things available to you, a lot of folks putting together a financial plan is not something you necessarily need a professional to help you do. But just like Brian said, there are times and phases where if you do grow to the level of complexity, where having a professional, having a second set of eyes on your finances, someone who's navigated the thing that you're trying to navigate. Not just one time, not just two times, but maybe hundreds of times. That thing can give you a peace of mind knowing, okay, my plan is solid, my plan is sound. No matter what the world throws at me, I'm going to be okay.

[Brian Preston]

I thought you were about to turn into a commodore.

[Bo Hanson]

What?

[Brian Preston]

Because you said one time, two times. I thought you three times, lady, you know, but no, in all seriousness, we did want to give you once again we're load you up with free content. If you go out to moneyguard.com resources if you are at that cusp of figuring out do I need an advisor? We have the eight questions you ought to ask a financial advisor. These are the tough questions that probably, you know, the advisor, if they're not on the right side of the table from, you are probably going to be dread that you ask them these questions. So go out there, download this free resource and you'll be that much better for it and prepared to know, hey, is this person going to be kind of my teammate or the person that's going to put my interest ahead of theirs and actually get me to my great big beautiful tomorrow?

[Bo Hanson]

And if you're someone out there that says, man, I've been listening to these guys for a long time. I love what they say. I love the way that they talk about finances. I love the way that they look at solving financial problems. This is what we get to do in our day job. So if you are at that stage, we'd love for you to consider giving us a chance at abound wealth to talk to you about helping you put together a financial plan. And I would encourage you, when you talk to us, when you talk to one of our advisors here, you should have those eight questions in front of you because you should ask any advisor you're working with. Because what you ultimately want to do is make sure that the person you're working with, the person you're seeking counsel from, is someone that you feel comfortable with, someone you feel is can help you live your great big beautiful tomorrow. Because what I love to see, Brian, is when people can figure this out, when they can figure out, man, I don't have to be stressed about money. It doesn't have to be another thing creating anxiety in my life. It doesn't have to be another thing that's making me uncomfortable. It can actually be a tool, an asset, a resource for all of the things that I want to do in this life. That's a Pretty exciting thing to get to see.

[Brian Preston]

As I always say, we'll leave the porch light on for you. So come on through those doors. Let the abundance cycle be fulfilled.

[Bo Hanson]

And I love that. Not only helping clients one to one, I love that we get to sit here and speak to things that you guys care about, that we get to load you up with financial information. So right now, if you have a question that you want us to answer or you want to get our guidance on, we have the team out in the wings collecting your questions because we really do believe that there is a better way to do money, and we want to help you do money better. So with that, creative director Ribe, I'm going to throw it over to you.

[Reby]

Thank you. Bo. I have a question from Ashley. S. To kick us off, she says, my husband and I were 28. We want to buy a bigger home in two to three years and keep our current home as a rental. Saving 20% down seems impossible without selling. Or with about 22% equity in our current home, should we consider pooling equity to fund the new down payment? What do you think about this?

[Brian Preston]

Oh, man.

[Reby]

And we do say, I mean, she's aligning with our home buying rules for the second home. You do say it's better to get serious and put 20% down on that second home. So this is an interesting question.

[Bo Hanson]

Well, okay, I'm going to reframe the way that we say this, the way I think about this. Why? What do we say? We say that when you buy your second home, when it's time to upgrade, when it's tr, when you decide that, hey, we want to move into a second, a different home, we say that 20% down is no longer recommendation. It's a requirement. You have to put 20% down. And so Ashley said, hey, well, all right, I hear that, guys. Well, what if I just went and borrowed some more money off of this house that I have and I use that for the down payment, you're not exactly honoring the idea of the aura of what we're trying to get there. Because what we want you to do for that second home is we don't want you to take on more debt than 80% of whatever the value of that home is. So even if you're borrowing or collateralizing some other asset, you're still taking on the debt. So one of the things that I would encourage you to think about, Ashley, is that at 28, wanting to move into that bigger home, not being able to put down 20% and desiring to keep your current House as a rental, you have a lot of goals. But those goals in my opinion seem to be in conflict with one another. And so I think potentially you should go back to the drawing board and think through, okay, maybe we don't need to hold on to this house, maybe we should sell this house in order to be able to have a down payment so we can move in the new house or two potentially, maybe moving is not quite right for us just yet. We need a little bit longer to save, a little bit longer to build before we move into that second house. Agree, disagree. One of five.

[Brian Preston]

Well, I think that, I mean, and you basically were hitting it. I'm just gonna go a little deeper into Ashley's asking a step eight question when it sounds like her and her husband aren't necessarily in step eight of the financial order of operations is because, look, I get it, there's a lot of voices out there that say, just keep your existing home. Now, let me tell you, from a tax plan, you know, tax planning standpoint, I don't always love that because one of the biggest loopholes that the, the government has set up for people out there is that if you're married, filing jointly and you've lived in a house two of the last five years, and by the way, even if it's less than two years, you got relocated. There's even ways to accelerate that two out of five years. But if you live in this house two out of five years, you can write off or basically have tax free gains on up to half a million dollars of gains.

[Bo Hanson]

Huge.

[Brian Preston]

There's just not many things in the tax code that are that favorable because as soon as you turn this into a rental property, fast forward a few years, that evaporates, that goes away. So that's why. But here's the good news. You could do this for a year or two, figure it out. I just wouldn't probably deal with depreciation because it muddies the water on this whole decision. But it is one of those things where you don't have to make the decision all at once. But you've kind of answered your own question, by the way you asked. That is if you can't afford to put down 20% on this second home and you'd have to have the equity, and I don't want you going and taking a home equity line and paying prime plus two or prime plus one or even prom at these even higher.

[Bo Hanson]

Than what you're fixing.

[Brian Preston]

I mean, to see what a fixed mortgage would be on this, that's, that wouldn't be ideal. And that's not what our rules were. The heart of what we're trying to do is, is to keep you from, you know, keep using leverage in a potentially unhealthy way. Now that's why I say you do, you're doing a step eight is that I don't mind people getting into rental real estate. We would be hypocrites if we didn't. I just want people to get their financial foundation underneath them first by dealing steps one through seven completely. And then after you have your financial foundation, you then can get into step eight, which is going to open up a lot of things. Those abundance goals. If you want to get into residential rental properties, if you want to get into commercial rental properties, we're completely fine. But why do I have that? It's because the thing about real estate is, is it's very dangerous from what's called levered debt, is because it's outstanding when things go great, is because you can put down just a little bit of money. And if whatever this more valuable resource appreciates, whether it's 3, 5, 6%, since you only you finance the majority of this, you're getting an amplified return on this money. Well, that's great. Like I said, when things are going good, however, when the music stops and everybody's trying to find their chairs and we realize, oh my goodness, there's just the market is not what it used to be. But we still got to cover the mortgage, we still got to cover the repairs, we still got to cover all the maintenance and the ongoing costs. But I have all this levered debt and by the way, if I lost my job during this, you can see how this gets very ugly very quickly. And when it rains, it pours. Typically when bad stuff happens, they don't happen in isolation, is that you'll lose your job, the market value of this property will go down, your tenants will move out on you, likely all within a few months of each other. And I just want to make sure that you don't get caught making desperate decisions because this seemed on paper to be the perfect decision for you. So that's why I would. I'm probably leaning more towards what Beau was sharing. If you can't afford to do it, take that as the clue that maybe you take your tax free gain. Because it sounds like a lot of that 22% equity probably is the appreciation of the property. Take it tax free rolled into the new property and then make sure, you know, measure twice on where you at in the financial order of operations. Before you become the land baron or the real estate rental property person that take advantage of that part of money.

[Bo Hanson]

Love it.

[Reby]

Ashley S. Thank you for asking the question. It is your lucky day because since you asked or we answered your question, you get a money guy Tumblr because it's Tumblr day.

[Brian Preston]

I don't have.

[Bo Hanson]

I don't have mine. I don't have mine.

[Reby]

Brian does. Well, he. Yeah, he has his doctor.

[Brian Preston]

We just got rejected by the mic boom microphone boom. Didn't allow to go under. It's. It's now.

[Reby]

But you persevered well. Ashley, if you would like a Tumblr just email winner money guy.com and we'll send one out to you.

[Bo Hanson]

Hey, we had a ruby. We have a brand new millionaire making a millionaire.

[Reby]

Yes.

[Bo Hanson]

Episode go out yesterday.

[Reby]

I love this one.

[Bo Hanson]

It was awesome.

[Reby]

Oh my gosh.

[Bo Hanson]

It was a. For me, that was a fun one.

[Reby]

Yeah, it was one of my favorites.

[Brian Preston]

I'm not just saying that it dropped on a holiday, which you know, cause that episode was fire, but it did drop on a holiday. So I know there's quite a number of you that probably since you were out hanging out with the family, you know, remembering that you know what Memorial Day was about and you just weren't at the office so you didn't get maybe the notification. I would encourage you if you didn't check it out, go, go check it out. Because it was a good episode. I had a lot. The comments were very heartwarming too. And it was a great couple too.

[Bo Hanson]

Yep, I agree.

[Reby]

Yeah, very great couple. All right, Jamie L. Has a question. We're parents at 33 with an investable net worth of 3.2 times our income. With a 7 month old, now is the time to step off the gas. Yet it brings stress. What do I do when math isn't enough to set my stress at ease?

[Brian Preston]

I'd want to know more about the stress.

[Bo Hanson]

Well, I'd want to know more about the. Now is the time to. Let's. So let's play make believe here. Now is the time to take our foot off the gas. I'm assuming that what Jamie has discovered is I got a seven month old. I'm 33 years old. I am like squarely in the messy metal. Well, right now I have a thousand different obligations, one of which being a seven month old pulling me in a thousand different directions. There's not a ton of discretionary income left over. So out of necessity, I'm going to have to reduce my savings rate. That's What I think Jamie is getting at here, which is different than sometimes we tell people, hey, once you've been saving for a while, once you've built up to a certain level, once you are at that stage, it's okay if you want to back down your savings. I don't think 33 years old at the beginning of the messy middle is probably. Probably what that is. And so the question is probably, hey, how can I feel okay with that? I've done the math, and the math says that how can I be okay if just because of life happening, I'm not able to save at the clip that I want to save? I'm not able to build the clip that I want to build.

[Brian Preston]

Well, let me give a compliment before then we give the. The not so fun answers on this, is that if you and hopefully the team can pull this up, we have what people think foo looks like versus what the reality of foo is. Can the team pull that up?

[Bo Hanson]

Oh, yeah, they can.

[Brian Preston]

So we always think in terms of linear decision making. We think you go from steps 1, 2, 3, 4, 5, 6. But as we quickly know, life has quite a few curveballs with children, with job changes, with just emergencies that will pop up and you might have periods or seasons of your life where you actually have to take a step back. That's right. And now I want to give a compliment to Jamie, your family. Sounds like. Because we say when you're 30 years of age, it would, you know, a good benchmark that Fidelity's put out there. We've talked about it in a lot of our by age shows is one times your income. Well, you're at 3.2 times your income, so you're way ahead of the curve. So I can see the desire to potentially pull back now. I would, I would caution you from saying this is, you know, we're so far ahead of the curve. I don't. I can forever change my savings an investment strategy because I've done all this hard work. I think it's more important that you look at you and you triage your life of what's causing this stress. The messy middle. Is it because the house you're living in is too small? Is it that you're. All your money's going to daycare? And are there bigger life decisions you and your spouse need to be making right now that will help take out this stress or make you feel better? Or is this one of those things where you just know and I've been in this and Bo's been in it where a lot of people in the messy middle age. Is this just going to be a season where the next year and a half is just going to be embrace the suck? I mean, there's really no. You have to live in the. In what you're in, and you just have to. It's going to be crazy, but you're going to hang on tight and you're going to white knuckle this thing, and it's going to be okay. So I would. That's the first thing I would do is triage what is actually creating the stress in your life, and is this a moment in time, a season, or is this something that is more systemic and we need to now restructure financially how we're living our life? Because this is just not sustainable. That's going to really free up a lot of what you know, what you can do and what you can control and make decisions from that standpoint.

[Bo Hanson]

Brian, you're a big NASCAR fan, right?

[Brian Preston]

Well, I was growing up more of a Formula one fan. Now that, you know, that drive to survive kind of reprogrammed my brain a little bit.

[Bo Hanson]

I think this analogy applies to Formula One as well, but I'm gonna use NASCAR. So if you're in a race in their 500 laps, in this race that you have to complete and you are leading, you are ahead of the curve, you're at the front of the pack.

[Brian Preston]

As a long race, if you're driving 500, right, for four.

[Bo Hanson]

500, yeah. And you're ahead for 495 of these laps or of these miles, but you don't finish in first, do you get credit for leading those 495?

[Brian Preston]

They might give you a few points, but you don't. You don't actually get the training.

[Bo Hanson]

It only matters where you finish. And when it comes to our financial journey, it's no different. I love Jamie that you are at 3.2 times and you are out ahead of the curve and you have a solid head start, but it only matters that you had a head start if you make it all the way to the finish line. And I just see far too many people early on pull up because they've done the math. I have. I have a buddy who tells me all the time, bo, I'm going to have $12 million by the time I retire. Why would I save any more? And I'm like, dude, because you don't have $12 million today. Like, let's have that conversation. As you get closer and closer, I just think you have to be careful, especially young people. That are super motivated, super diligent, getting too comfortable. Having said that, you do have the freedom and flexibility now that if the messy middle is causing you to make some of these decisions, that's okay.

[Brian Preston]

But if it is a season, if this is something like, maybe one of the spouses is considering not changing careers because they realize how much money goes out to childcare, or maybe they look at their life and they go, you know, when we bought this tiny home that's, you know, 600 square feet, because I watched a lot of HGTV and they told us all of us were going to live in 600 square foot homes, and I need a little bit more. So, you know, we actually live our best life. Those are moments in time that I do. I think you're. You're spot on. I think umbrella that sits on life is I don't want people in their early 30s thinking that they've won the game already when they just might be in a season of life where it just. You have to take a step back to take two steps forward for the long term. It's just, that's why that triage, triage exercise of. Is this a season or is this a systemic thing that we need to fix? Because it's not sustainable. Don't skip out on that exercise.

[Bo Hanson]

Love it.

[Reby]

Jamie. L. Thank you for the question. If you would like a money guy Tumblr, we'd love to send you one. Just email winneroneyguy.com and we will send that out to you. All right, Shoffman909 has a question. My employer has an annual $500 match, but also contributes an annual discretionary contribution of 9% of my compensation.

[Brian Preston]

Wow.

[Reby]

Regardless of my contribution, how do I calculate my savings rate?

[Bo Hanson]

What's your income? Shoffman.

[Reby]

Shoffman, shoffman.

[Bo Hanson]

Because one, that's incredibly generous. Right. So it's. It was a 5% match, right?

[Brian Preston]

No, $500 match.

[Bo Hanson]

Oh, $500. I wrote.

[Brian Preston]

That's what I wrote. I get that wrong because that did seem. I went on a whole journey there because I was like, $500. That seems very limited and tight. But then at the end it was like 9% discretionary contribution. I was like, wow. So, you know, this went from being tight, wattish employer to incredibly generous employer. So I didn't understand the $500.

[Bo Hanson]

Yeah. And I'm really interested how their testing works. If it is a $500 or was it 5%? No, it's $500. Yeah. So. So, okay, you put in $500, your employer puts in $500 and then your employer puts in 9% on top of that. Well, the question ultimately becomes, do I get to include the employer match or do I not get to include the employer match? And fortunately for you shop and we, we have some rules around when you get to or do not get to do.

[Brian Preston]

Yeah, now look, if you're a single person making 100,000, married couple making 200,000, if you make over those levels, we want you to not count the employer contribution. And you're like, wow, that seems crazy. Didn't you hear my employers putting in 9%. The more money you make, the more responsibility falls on your shoulders. You're away from the social safety net of Social Security, your taxes will go up. There's just your lifestyle creep is more likely to be. Your consumption is going to be at a higher level. So we just, we create those rules so you can kind of quickly decide, do I get to count this if I don't? Now, if you're under a hundred thousand as a single person or 200,000 as a couple, then yeah, I think you have to. First you have to find out, I don't know how long you've been at this job, but you need to ask around to somebody who's been there a little bit longer than you be like, was this a one off? Because we had a great year last year.

[Bo Hanson]

I was going to say he called it a discretionary.

[Brian Preston]

Yeah, because there's a reason. I mean, we do discretionary contributions too. But I mean, I think anybody who's been here a while, you know that we have a goal that we're trying to do for our employees every year. And if you find out that your employer, because we have, we work with credit unions, we work with others that are very generous with what they pay their employees. And it is, you know, look, they are discretionary as well, meaning that if they had a really bad year and we all had to button down the hatches, they would not be able to make those. But the goal when things are all humming along is that we're going to make these contributions. I think then, yeah, you could count that. But if you find out that this was a one off, that, no, we hadn't got that since, you know, 2006, then you'd be like, okay, we can't count. This was a windfall moment because we had a really good year within the business. So do a little research and just, you know, then personalize it back to your financial life to where you're not blindsided by you Know, not saving for yourself because it is ultimately a tool that you want to make sure that you're maximizing if it's going to be ongoing and it fits into your personal savings and building goals.

[Bo Hanson]

Love that.

[Reby]

Fantastic. Schoffman909, thank you for the question. Thanks for joining us for the live stream. We'd love to send you a tumblr. Just email winneroneyguy.com Kaboom has a question for you. Hey, Brian and Beau, I'm 21 and saving well above 25% of my income with the power of compound interest on my side. Is it a bad idea to be a semi miser temporarily until, let's say about 25 years old?

[Brian Preston]

Well, it all depends on what you're living and what you feel like you're leaving behind.

[Bo Hanson]

Yeah, I want you to answer then. I want you to answer first because I gotta, I got, I got a thought on this.

[Brian Preston]

I mean, look, you're not gonna like. I mean, I was, I was tight when I was young. I even, we, we had this whole thing where we were tightwind nation, you know, thinking. I was so proud of how tight I was. And I've met a lot of other people who did the same thing. You know, they're financial mutants, but they definitely, definitely had miser moments of your life. But I don't think anybody, any of my friends would have said that I was missing out on life experiences because of money decisions. Now I will tell you, I do feel like I was a time miser because the first two or three years out of school, I was taking so many certification exams that I didn't get to go to. I mean, I've told this story before, but one of my best friends from college, a college roommate, still good friends with him, his wife, I mean, his fiance at the time, now they've got bunch of kids, successful marriage and everything else, but she's from the French Quarter. So we had a free place to stay during Mardi Gras for like every, for two years they went. Every two or three years they went. After we graduated college, I didn't get to go any of those years because I was always studying for exams. But I felt like the sacrifice in that season of life, of my time was worthwhile because the clouds were going to part if I could just pass all these certification exams, be done with it before we had, you know, before marriage, before kids and all the responsibility of life kind of corded off what I had control over. And I'm willing to say that money can be very similar to time because you are trading your time for that money. But just be mindful that this is a season in life versus if you're not leaving behind something to where your 50 year old self looks at that 25 year old version of yourself and goes, what the heck were we doing here?

[Bo Hanson]

Hot take here. I think it's okay to be a miser at a young age and here's why. Right. So when you become a client or like when I, when I would, when I sit down and talk to people who are thinking about becoming clients and I'm trying to assess their like financial personalities and what makes each, each of the these individuals unique. I have this hundred dollar question and this is the way the question goes. Say hey, if you were walking down the street and you found a hundred dollar bill laying on the ground, you pick it up, what's your first thought? And there's generally two camps. One camp is hot dog. I'm throwing this in my wallet, I got an extra hundred bucks. I'm a hold on to this, this is great. And the next thought is I pick it up and I look around to see what store is close by because I just got a free hundred dollars where I get to go spend that. And it kind of helps you figure out do I get more enjoyment, more fulfillment out of spending or saving. And by the way, neither of those is wrong. It's a financial personality. Well, for me, early on in my life I just really love saving. I just, it was more enjoyable for me to see how much I could save. So I was okay being a miser. Like I would wear shoes and they'd have holes in them and I just didn't, I didn't care. Like I would, you know, I would wear hand me down clothes a lot Brian, to have some clothes. But hey, here's some. I'd be like, oh, it's awesome. I would eat cereal. Now I don't like the cereal thing because the cereal thing was pretty unhealthy. Don't, don't do that. Don't, don't eat cereal every day because that's not super healthy for, for you. But I do think if there aren't things that you desire to spend money on, don't go out and spend money simply for the sake of spending money. Because don't worry, as life happens, as you get married, as you have kids, as your life progresses, as you're in the messy middle, there are going to be a myriad of things for you to spend your dollars on. So early on, if there's Just not a lot of stuff that you want to spend money on. I think it's okay to stack it. Stack it, stack it, stack it. And get a little bit ahead of the curve.

[Brian Preston]

I mean, look, I love our financial mutants. I was down in Disney Springs over the weekend down in Orlando, had a financial mutant come up to me, said he was 23, saving 40% of his income.

[Bo Hanson]

Love it.

[Brian Preston]

But since we were waiting outside the Gideon's cookie shop, I mean, he's obviously making great memories with his friends. So, I mean, I think that there is a season for us financial mutants. And I would be a hypocrite if I didn't tell you I was super tight and stingy. But I also had the perspective to know that what the. Why was behind some of that decision making? So it wasn't for the purpose of just having more without some. Some great big beautiful tomorrow behind that.

[Bo Hanson]

Love it.

[Reby]

Love it. I thought that too. Like, it depends on what? Yeah. Like, is it affecting your relationships or something?

[Bo Hanson]

Were you ever a miser?

[Reby]

Were you ever like, no, not really.

[Bo Hanson]

No, not your jam.

[Reby]

That wasn't really my jam. But, like, I respect it. And also, when you're young, you're just a little bit cheaper. And that's.

[Brian Preston]

I always wanted my friends to say I was good with money. Not. I never wanted them to get to the point to think, oh, gosh, we have to go through Preston because you don't want to be that friend, because we've all been around. So that's why I think that's probably in the decision matrix of your life, is it's okay if your friends know that you get a lot out of your money. That's the whole thing about being a financial mutant. Your money should go 5 to 7% further than a lot of your peers. But if you. If it becomes a. A limitation, meaning that your friends actually don't like being around you because you're just such a killjoy that should probably be internalized as well.

[Bo Hanson]

Yeah, yeah, I've got. Yeah, you. Like, you know when you're like, hey, let's all. Let's go on a guys trip. And like, yeah, let's go. And then someone's like, yeah, let's all stay in one room. And that room is going to be $40 a night.

[Brian Preston]

Bougie Bo doesn't get to come because you. When you're hopefully in your early 20s, you're still okay if you sleep on the fl. If somebody just gave you a corner of carpet and a sleeping bag, some.

[Reby]

Of those things when you're 20 aren't necessarily miser behaviors. Like it just. There's a line like you kind of have to discern where you go to.

[Brian Preston]

Europe and you stay in hostels in your 20s. Nobody thinks that's weird.

[Reby]

Yeah.

[Brian Preston]

If you do it now in your 40s with your family and your family.

[Reby]

Really wanted to stay.

[Brian Preston]

There's a time and a season for all things in life.

[Reby]

Right? Right. Okay. All that to say kaboom. If you would like a money guy Tumblr, just email winner moneyguy.com you want.

[Bo Hanson]

To hear a funny story?

[Reby]

I do.

[Bo Hanson]

Very first time I was able to travel as a professional. Right. This is the very first time me and Brian were going to a conference.

[Brian Preston]

Oh, gosh, I know what he's gonna say.

[Bo Hanson]

Me and Brian were going to a conference. I had a business partner and there was, we had.

[Brian Preston]

There was business partner who was my business partner. And.

[Bo Hanson]

And you know, this is back. This is not exactly miser Brian, but this is certainly tightwad Brian. And I mean, okay, there's only three of us and one of these guys, super young, he's like 21 year old, dude, you know, we're going to do, rather than us getting two rooms, what we're going to do is we're just going to ask him, hey, do you have a roll away cot that you can just roll into the room? So while we were at this conference, I slept, my very first professional experience as like an adult in the like big time financial advisor. Slept on a cot in a hotel room with two bosses.

[Brian Preston]

It was, I look at how we now when we travel on the book tour, Ruby was handing out key cards to rooms. I was like, goodness gracious, man, how the world has changed from the beginning of this thing where very different. Yeah. Bo, you know, rolled in the cot and said, here you go, boy.

[Reby]

You're welcome to everyone on the book tour.

[Bo Hanson]

So case in point though, when you're 20, at the time it didn't even seem that weird to me. I was like, okay, I guess this is right.

[Brian Preston]

Well, I mean, obviously I was still somewhat of a miser in my 30s because I had you sleeping on that cot. And me and my partner were like, yeah, we'll get in one hotel room for three of us.

[Bo Hanson]

That's totally fine.

[Brian Preston]

We didn't get bougie until later.

[Bo Hanson]

Much later.

[Reby]

Good story. All right.

[Brian Preston]

You had a good time on that trip.

[Bo Hanson]

It was a great time.

[Brian Preston]

Talking about key access, by the way, if you're young starting out and you know, and your boss is like, hey.

[Bo Hanson]

You want to be in a cotton my and be like, yeah, absolutely.

[Brian Preston]

Yeah. I mean, because I mean, think of all the exposure you were getting to the topper level management. Oh, yeah. You know, because that was good times.

[Bo Hanson]

It was a fantastic trip.

[Reby]

All right, next question.

[Bo Hanson]

I took us on that tangent. My bad.

[Reby]

Oh, I liked it though. It was kind. It was related. I appreciate that.

[Brian Preston]

Well, I mean, look, when I was in public accounting, we shared rooms on audits. We, you know, they put two of us in each room. We didn't get our own rooms.

[Reby]

But you got your own bed. Didn't get caught.

[Brian Preston]

Well, a bed is a cot, by the way.

[Reby]

Brian's like, listen, does anybody feel guilty.

[Brian Preston]

When they stick their kids on a rollaway bed in a hotel? No, I didn't feel guilty when Bo.

[Bo Hanson]

Was basically, I was a grown man. But that's fine. That's fine.

[Reby]

Oh man. Okay, are you ready for the next question?

[Brian Preston]

How bad would it be if we would have said both bring asleep?

[Reby]

It was one decision.

[Brian Preston]

Maybe this is not the firm I want to be.

[Bo Hanson]

Maybe I did not choose well on this fund.

[Brian Preston]

Oh man.

[Reby]

All right, Stephen B. Has a question for you guys. We are 35 with a 32% effective tax rate. We are investing 25% with me maxing out a Roth 457. Roth is 7% of our 900k total investments. We plan to retire in our early 50s. Should I keep maxing out my Roth?

[Bo Hanson]

All right, so this is a, this is.

[Brian Preston]

What was the savings rate again?

[Bo Hanson]

25%. This is a very nuanced question. So let me give you the high level. You are 35 years old. You get $900,000 portfolio, which is awesome. You're planning on early retirement in your early 50s, which is also awesome. And you're in a higher tax bracket. You said that when I add up my effective marginal federal rate and my marginal state rate and I combine those, it's 32%. Well, you know that our rule of thumb would suggest that if you add up your marginal rates and you're above 30%, then it generally lends itself to doing pre tax contributions because every dollar that I put in on the pre tax basis will save me like 30 cents in taxes. I can think of that as like a 30% imputed rate of return. So it's really hard to walk away from that current year tax benefit. If I'm below 25%, then Roth generally makes a lot of sense because there's a good chance that I'm in a pretty low tax bracket. Now and I won't likely be in a lower tax bracket in the future. So you do Roth. If that's the case. Where yours, Steven, gets a little bit nuanced is personal finance is getting kind of personal here because here's, here's some nuggets he gave us. Of the $900,000 portfolio, only 7% is Roth. I don't know what that means, that the other 93%, is it pre tax, is it, is it taxable? But this could very well be one of those scenarios where building up Roth assets based on beginning with the end in mind could make sense.

[Brian Preston]

Well, this is, I mean this thing, all terrain vehicle for your financial life. The financial order of operations is because you are square. Step seven, because step seven is where you're trying to figure out, oh man, how am I actually gonna use this money? Because steps one through six was keeping you from making desperate decisions, making sure you have cash reserves, making sure you're, you're tax efficient as possible. It's really step seven which says, whoa, how are we actually going to use this money when we need access to it? And that's where the three bucket strategy comes in. And you figure out where we're going next with the abundance goals at step eight. So I think that you know, you gave us a lot, but I also know to have 93% of your money not in Roth versus 7, that means that you're not, you're saving outside of doing just this Roth457. So I'd be curious, is that all pre tax money from previous jobs or other opportunities or is a lot of that money after tax? Because if you are thinking you're retiring at 50 or early 50s, a lot of times that's before 55 or even 59 and a half now you're in a 457. So there's some earlier access with 457s typically. But it is one of those things where I would just make sure that you've taken an account and an after tax account, hopefully some of those assets of that 93% of the $900,000 is in some of those things. So you have even earlier liquid access to the money. But I do think that, Steven, you are the part I get nervous about. Giving you a specific answer is because this is so focused on your situation that you probably ought to consider the abundance cycle and taking the relationship to the next levels because we try to give you guidance for what helps the masses. And you're kind of in that situation where your life now is about to get really complicated and you only have one retirement. But we've worked with thousands of people on this. You might want to have somebody who can kind of help navigate that so you're not going through the gauntlet all by yourself.

[Bo Hanson]

I love that you got a bound wealth.com money guy.com check out the Work with us page. But hopefully we gave it 35 at 900.

[Brian Preston]

Yeah, I mean a lot of great stuff there, but it's just hard to give generalized advice to, to help everybody in their audience on something that's so specific to, to, to, to his specific situation.

[Reby]

Makes sense.

[Brian Preston]

Stephen. How? Did I say the wrong name?

[Bo Hanson]

No, Steven.

[Reby]

No, it's Stephen.

[Brian Preston]

You flip pages, you know, lose the ability to see my notes.

[Reby]

Oh good, we got it. It's Steven. And Steven. If you would like a tumblr, just email winneroneyguy.com since we talked about your question. All right, the next question is from foogetaboutit.

[Brian Preston]

Fu getaboutit.

[Bo Hanson]

Clever.

[Reby]

Should we pay 1.2 million cash for our dream home as we retire early or get a mortgage? My wife and I, we're in our 40s, will both retire from the military in two years. We're on food step seven pensions cover our lifestyle and we have a $2.5 million net worth. So baked in this question is, is it better to dump all this cash and be completely mortgage debt free or get a mortgage?

[Brian Preston]

I mean this is one of those questions I do. I mean I just had a client, they're a little bit older than this, but they, they moved to another part of the country and they were building their dream home and we did, we made that, we looked at it so many different ways. We looked at should we do mortgage for a Porsche, should we pay cash? And it really depends upon, and I hate this but we're gonna have to say it. When you get in these type of decisions, we need to know how close to the quick you're cutting it. Now you got this great pension that sounds like it's covering a lot of your lifestyle. But you're also, you haven't retired. You don't know what your go go years are going to look like in retirement. So your, your expenses because thing about being a military family is you know that the military does a good job of that. They, they kind of COVID a lot of life. And so when you get out away from the, the military life, you might find that your scope of your expenses expand. That's right, to a degree. And I just want to make sure. We measure twice, cut once on what is your true burn rate or your expenses that will go, especially in those go go years. Because you're retiring young, really young, so more than likely you're going to want to travel more or you want to pick up some hobbies that are might have some expenses to them. You just need to kind of do the math on that, that type of stuff. And that's why I would. I hate answering this way, but it all depends. I mean it is because I could definitely see a path where I'd want you to pay for the, the house in cash, especially once you're over 45. But also see a path is that it's so hard to get money out of real estate without using debt and other things that we want to make sure that we don't deploy, lock those assets up into a primary residence until we've really measured this thing within an inch of its life to make sure that that is the right decision.

[Bo Hanson]

Yeah, with interest rates, you know, mortgage rates at like six and a half, seven percent. We have actually seen this go both ways. We've seen it where it made sense to pay cash completely because we ran through the Monte Carlo analysis, we did the same simulations, we recognized even if you suck $1.2 million out of the plan, the plan still has a high probability of success just based on remaining assets and pension income and Social Security income. And we've done it the other way. We said, hey, the only way that this is really going to work is if you have a mortgage and that mortgage is reasonable enough based on the income that you do have coming in that you can make it work. It's not just going to be black or white one way or the other. If I were sitting down with you, one of the things I'd walk through is, okay, what's it look like to pay it all in cash? Okay, if that doesn't work, then what other viable strategies might there be? I mean, we can go look at like a traditional 30 year mortgage. That's an idea. But there's even a scenario where maybe this window is the issue, where, okay, we're going to take on a mortgage for 10 years and we're going to have a 10 year mortgage to have this paid off. If we're retiring in our 40s is when they said they're retiring our 50s. If we're retired in our 40s, we still want to make sure that we're completely debt free by our mid-50s. How does that look? So I think the only way you can answer this is you have to kind of go come up with the different scenarios and iterate them through and see which one of those scenarios gives you the highest probability of success and most closely aligns with your ultimate goals. Your, your pensions might cover your living expenses, but does it cover like your travel or your one offs or weddings or gifting or other things that you might have to pay for in retirement? Or are you going to need liquid capital ready and accessible so that you can do those things? So there's like, there's a number of questions you'd have to answer before you'd be able to really say okay, yes, this is the path that makes the most sense.

[Brian Preston]

And let me give you one more mindset thing to think about. Primary residence. And even the way you say it's going to be our dream home, when I hear people talk in those terms, that is a use asset. I know on your balance sheet or your net worth statement, it's going to look great that you have this 1.2 and hopefully it's appreciating. It's going to be one and a half, maybe even 2 million at some point point in the future. But because it's your dream home, because it's your primary residence, it's where you're living, that's really not a working group of army of dollar bills anymore. It is something that is providing shelter. You're essentially benching that money. And that's a mindset thing. We want to make sure that we've really saying it's okay that we're taking 1.2 million of your army of dollars and basically saying y' all just sit over here, hang out. Whereas that could be money that should be working to replace so you get to, you know, can own your time that much sooner. That's why it's such a big lofty decision. I love going to tour of homes here in Franklin, Tennessee.

[Bo Hanson]

So fun.

[Brian Preston]

But when I see that these houses are selling for six, seven million dollars, I often think to myself, I'm like, who are the people that are taking six to seven million dollars out of their army of dollar. Because that's, that's not one retirement, that's multiple retirements. And then you find out that people are taking. Because I know by the way, one of my neighbors is a builder and I find out that a lot of these, because he does those tour homes, he does these dream homes and I find out that a lot of this stuff is financed and I'm like whoa, wait a minute, you mean that there are People that are buying these multimillion dollar homes with financing, it doesn't, it doesn't compute. And that's why $20,000, well that's, that's the thing that I, before anybody locks down that much money, I always say what's the opportunity cost? What's it replacement? Because if we know that a good retirement is three to five million dollars and you, I mean that is splendid retirement living, really good traveling, doing lots of things and then you find out that there's people that, that are essentially locking up that I don't know, there's a decision matrix that you've got to go through. And that's why we, we definitely take the relationship to the next level. So you can have somebody who's done this many times with other clients and can tell you compare and contrast what you might be signing up for.

[Reby]

That's great, that's great. Well foo, get about it. If you would like a MoneyGuy Tumblr to match your username, just email winneroneyguy.com and we would love to send one to you.

[Brian Preston]

But don't you assume when you see those big homes that those people have to be worth $50 million and then you find out no, that's not the case.

[Bo Hanson]

Well, someone just in the chat, hey, if you own a six million dollar house, you better be worth 100 million. That's probably a little bit of a stretch. I don't think you have to be that, I don't think you have to be that wealthy. But you're going to have some chops behind you. And in my opinion this is, this isn't perfect but like if you're going to buy a 6, 7, 8 million dollar home, I do think you need to be well healed enough that you're probably a cash payer going, going out.

[Brian Preston]

There to like, well the government doesn't even give you, you know what I mean, like 50 on mortgages.

[Bo Hanson]

So like if you're borrowing, you know, a couple million bucks for your mortgage, I'm like oh man, there's, well that's what surprised me.

[Brian Preston]

I, I remember when the tax law has changed where they capped it to where it's 750 on your primary residence. And I was like well I guess that changes the market now. Probably nobody, no who would cash buyers now because they're, they're not going to do. But that's not what I'm hearing when I talk, talk to my builder friends is that a lot of these people are financing this stuff.

[Bo Hanson]

It's wild. Is wild.

[Reby]

All right, ready for the next question?

[Bo Hanson]

Christian G. Wouldn't you love to see the financials of someone who got approved for like, like if you're a lender and you're thinking about loaning someone $6 million for a residence, like, what are you, what do you want to see when you go to extreme?

[Brian Preston]

That's an extreme. But I do think that there's a lot of two and three million dollar homes, especially in this neck of the woods.

[Bo Hanson]

Yeah.

[Brian Preston]

That are, that are financed.

[Bo Hanson]

I don't just. I do not disagree with that at all.

[Reby]

Yeah. Okay. Are you actually ready for the question?

[Bo Hanson]

Sorry.

[Brian Preston]

Sorry.

[Reby]

I mean, that was interesting, too, so I don't mind. But Christian G. Has a question for you. It says, hi, money guys. I'm 24, graduating from graduate school, no debt besides student loans. My undergraduate loans are low interest, so I'm not worried about that. But my graduate loans are 8%. Should I focus on paying those down as soon as possible or focus on putting that extra money toward investment accounts?

[Brian Preston]

Bo, this is good. What's funny is that we just had a Making a Millionaire episode where the person. And this is such an interesting thing about student loans is we. They're usually siloed in the different years that you went to school. They're not all the same. So it's okay if you, you don't have to say student loans. And it's all under one big umbrella. I've heard you talk about this before. It's okay if you kind of look and silo those, those different debts.

[Bo Hanson]

Yeah. Christian, as I'm thinking about your situation, I'd list out all my loans, all my undergraduate loans, all my graduate loans, and I'd have them by outstanding balance, and then I'd have my interest rate, and I would sort them by high interest to low interest. And if you do have some of these graduate loans at 8%, I'm going to argue, yeah. For someone Even in your 20s, 8% is pretty high interest on a student loan. So there's a really good chance that when you think about the, the how powerful your dollars can be, if every single dollar can return to you an imputed 8% rate of return, that's, that's pretty solid. So I would think I would probably prioritize really knocking those down. But as I begin to knock down those high interest graduate loans and I begin to move to some of these lower interest undergraduate loans, the loans for someone in their 20s that are like under 6%, then I think, I'm thinking, okay, well, I have to Be super aggressive. I can just sort of pay on these in a reasonable fashion, but then I can let my dollars begin working for me. And if your graduate loans are something that maybe you could knock out in the next two, three, four years, you're still going to be a 27, 28, 29 year old who has incredibly powerful dollars. You can go to moneyguy.com resources and check out our wealth multiplier tool. Even at 29, your dollars have the ability to be so powerful, it can grow so much that even though you missed a little bit of time knocking out that 8% debt, you can still make it up later on. I think that's the way that I would go about thinking about it and attacking it if I were looking to student wallet.

[Brian Preston]

And I love that the content team, because they, you know, obviously we had a little struggle pulling up the foo earlier or, you know, but man, they just, they just fly.

[Bo Hanson]

They got to quit.

[Brian Preston]

They just flexed on bringing up that wealth multiplier. If you're not going out to moneyguy.com resources and looking at some of the free tools and resources we put together, I think you're missing out because we really do try to accelerate your journey. Because as Bo shared earlier in today, we don't think everybody needs a financial planner right out of the gates. But I do hope that you'll come take advantage of all of our free stuff and then get so successful that you get so complicated that the success creates the need for some good financial planners. And you'll remember us.

[Bo Hanson]

And I'm hoping, and look, this is not always the case, but Christian, I'm hoping you did the work to say, okay, I'm going to go to graduate school, I'm going to get this advanced degree. And what this advanced degree is going to do, it's going to allow me to earn a higher income sooner. If that's the case and your shovel is able to get bigger earlier on in your career, hopefully that's going to equip you to be able to knock out these student loans more quickly than someone who was not able to have that same vertical mobility in their income. You hope that that's the way that it goes. If it is, then the graduate degree was a positive ROI endeavor and it's going to hopefully put you in a great place financially over the long term.

[Reby]

Fantastic. Christian G. If you would like a Tumblr, since we answered your question on the show today, just email winneroneyguy.com and we would love to send one to you.

[Brian Preston]

Rabi before you jump in the next question.

[Reby]

Yes, sir.

[Brian Preston]

Y' all said something that had me swimming all show. Oh, no, it's just, it's the date and I, you know, I didn't realize until, you know, and I, I should have brought this up at the beginning. Tomorrow will be the one year official anniversary of Millionaire Mission being released. And it's so wild that I had not given a lot of thought to. And you, Reby was the one that said, you realize tomorrow is the one year.

[Reby]

And I was like, birthday.

[Brian Preston]

Oh gosh. Because it is one of those things. And kudos to you, Ruby, because you. A lot of people said, man, that book tour y' all did was so good. Is that something your publisher set up? And I was like, no. I was like, look, I love my publisher. That's not a cut on the public. But it is one of those things where it was all Reby who set up the dates, set up the venues, you know, did all the structure of it all and it went as good as it possibly could. But it just blows my mind how you go through a life event that was an all hands on deck and you know, four years of your life because anybody. You don't write books. It is a check, it is a bucket list thing. It's just the world has changed so much that I think that that writing book is still a noble cause. But it's just that it's, it's so hard because of how much resources it takes and, and all the revisions and then you never feel like it's actually done. I mean, they violently had to take this thing away from me because I was, I just kept editing things more and more and more and more and it went about as good. And I remember Ribey and I set some goals that my agent had shared. Hey, you need to get sell this many books to reach this goal. And I think, you know, I told Ribi this morning when she told me, I was like, I'd love to know the numbers so that we can share, but I know if I. Based upon what I've just. We quit tracking it kind of to a degree once we blew past all those goals. You guys owe a lot. A big gratitude. Thank you. I mean, what's funny is just seeing how many people buy so many copies to give out to graduates to give out. Because we're also in that season of life right now where if you, you know, anybody in your life, whether it's college, high school, or just somebody starting out, I think this is a huge leg up. Or if you just know a 30 something year old relative that's just now has discovered that money can be a tool or it can actually work harder than you can. I really did try to write this to be the instruction manual to help those people get a leg up. And it's been very rewarding how many people have enjoyed it. And I still read the reviews one year in reading the review because look, it's one of those things. I don't do it as much as I was because it was a daily thing for a while. Now it's just like hey, I'm in between and I could use a pick me up and I'll go check. I'm like, oh my gosh, they're still doing. People are still posting reviews and it just, it warms my heart. It really does because it showed me. I can't imagine if we didn't, if we did this book and it didn't hit like ours did, it would be somewhat depressing. And I think a lot of authors, I think the authors. It is a lot of people put a lot of work in writing a book and then you find out that nobody reads your book. And it's probably sad, I mean but so I, but I feel very thankful and blessed that we did this and it actually hit in a really good way getting New York Times bestseller. I still never, I will for the rest of my life remember that I was in the airport with you, you and we got that news, got the call from the publisher and, and Beau run around hyping up. I think we probably sold four copies.

[Reby]

To people because he's like New York.

[Brian Preston]

Times best selling author. People like, who is he? You know, suppose out there being my hype man right from that. But man, I mean I just almost got a little choked up because it was just, it was one of those cool, cool life bucket list things. I don't know that I'm in a hurry to write another one but. But I definitely, I'm definitely glad we did it and I'm glad it hit the way that it did.

[Bo Hanson]

That's awesome.

[Reby]

For sure.

[Bo Hanson]

Happy anniversary.

[Brian Preston]

Yeah, I know, it's just wild really is life, life, life achievement.

[Reby]

All right. You want to do another question?

[Brian Preston]

Sure.

[Reby]

Let's go to Robert C's question. Should I include my employee stock ownership plan shares in my financial plan even though their value changes each year based on my company's performance and annual evaluation?

[Bo Hanson]

I'm going to say this tongue in cheek, Robert, and it's going to sound like I'm being super sarcastic. I'm not. But you realize all of your stocks, that everything that you own in your portfolio changes based on that company's performance and not have that annual evaluation, but like a daily evaluation. Right now, if you were a part of an employee stock ownership plan, you actually are an owner of your company, you own a piece of it. So absolutely you should include that on your net worth statement. And I would put a reasonable valuation, whatever the most recent valuation is, I wouldn't try to inflate it because, oh, I got the greatest covenant in the world. It's worth a gazillion dollars, whatever your ownership is actually worth. I for sure would put it on my net worth statement. But one of the things that I would really make, make sure that I'm measuring and looking at is, okay, when I look at that, relative to all of my other assets, relative to all of my other net worth, what does it look like in proportion if it's really, really big? And I'm basically banking my entire retirement on being able to redeem these ESOP shares? Okay, well, now you have a lot of financial capital as well as human capital tied up in this one company. It's a bit of a risky place, but if your ESOP is there, but you're still saving 25%, you're doing your 401k, you're doing your Ross, you're doing your HSN, you are building wealth outside of just your ownership and they're both kind of growing in tandem. That's what you want to see and that's a wonderful thing. So my answer to you, Robert, is absolutely. Should you include the value of the ESOP on your net worth statement and should you consider it as part of your financial planning? When you're putting together your financial plan? Absolutely, yeah.

[Brian Preston]

But do use it as a motivation point is that when you look at your annual net worth statement, exactly what Bo said, if it is the lion's share of your money, you should be scared is because that you already have your working capital tied into this place. You don't want your financial independence capital also tied in only one source, otherwise you're a little lopsided. And look, sometimes this happens. I mean, we've had, because this is an employee stock purchase plan or ownership plan. But there's also we have people who are part of employee stock purchase plans, ESPPs and other things or RSUs or stock options, and they also get very lopsided. It's just that you need to be very aware of what that means and have a little bit of fear of Man, I have so much of my financial life tied to this one provider. Is that okay? And it might be okay for a season, but I would definitely be trying to create a plan for how do I get these things separated so that I can dial down and this is part of that maintain wealth. You know, in the make wealth phase, you know, I guess this is great, I'm getting these wins. But definitely in the maintain wealth phase, you need to have some separation from your human capital to your financial independence capital. And, and that's either going to require you to separate service or, you know, sell the ownership or build up. That's what I'd prefer is you build up assets through your savings and investment rate as well.

[Bo Hanson]

Love that.

[Reby]

Love it. Well, Robert C. Thank you for the question. If you would like a money guy Tumblr, we'd love to send you one. Just email winneroneyguy.com as always, even when we turn the cameras off, moneyguy.com is full of free resources to help you continue these conversations and go even deeper. So make sure to check that out. Moneyguy.moneyguy.com resources in particular has tons of free calculators and downloads to help you on your financial journey and beyond. So be sure to check that out.

[Brian Preston]

This thing. You know what I love is this. Now it started off where Fridays were the days everybody got excited. It's because we had brand new shows and then we've added, we got Tuesdays, got super exciting because we do these live streams and everybody's like, hot dog these guys. Not only is it Friday, we're getting new shows, but we're getting new content on Tuesdays. And now here we are again. Mondays have become super exciting because we have Making a Millionaire releasing every other Monday. And then on the off Mondays that we're not doing a Making a Millionaire episode, we actually now starting to release react episodes.

[Bo Hanson]

That's right.

[Brian Preston]

So you guys, this is exciting. I mean, we are trying to load you up so you can accelerate your journey to financial independence. And you remember, hey, these are the guys that were planting the seeds of knowledge that allowed me to become the big best version of myself financially to build that great big beautiful tomorrow. Because we do believe there is a better way to do money. And I just hope that when you reach that level of success where you get the complications that we talked about, yes, your life can be simple in the beginning, but you do this well enough, you will start to have a complicated financial life that you'll remember the abundance cycle. You'll remember all those seeds we planted. You know, consider reaching out to work with us at abound wealth. Moneyguy.com we're going to leave that porch light on for you. I'm your Host, Brian Preston. Mr. Bo Hanson.

[Bo Hanson]

Moneyguy team out the Money Guy show is hosted by Brian 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.