Money Guy Show: "I’m Losing 50% of My Income - What Now?"

Release Date: December 16, 2024
Hosts: Brian Preston and Bo Hanson
Guests: Megan (Senior Content Developer)
Episode Theme: Navigating a sudden 50% reduction in income and transitioning to a commission-based role.

Introduction

In the December 16, 2024 episode of the Money Guy Show, hosts Brian Preston and Bo Hanson delve into a pressing financial concern: coping with a significant income reduction. Titled "I’m Losing 50% of My Income - What Now?", the episode offers actionable strategies for listeners facing abrupt financial changes, particularly those considering a shift from salaried positions to commission-based roles. The discussion is enriched with real-life insights, practical advice, and engaging interactions, including a heartwarming segment celebrating Brian's birthday.

Main Topic: Transitioning from a Salary to a Commission-Based Job

Listener Question from Zach R. ([01:18])

Zach R. posed a critical question: "How would a potential job change from a secure salary job to a commission-based role? The new role would have a 50% cut in base pay, but essentially unlimited upside potential. What do y'all think?"

Bo Hanson's Perspective

Bo Hanson addresses the inherent risk-reward dynamics of such a transition:

"[Bo Hanson, 01:47] So, Zach, this is an interesting one because so obviously it sounds like there's a risk reward thing going on here. Right now I have a salary job where it's consistent and I can count on and know what's happening. Or I can move to a commission-based job where it's going to be a little more variable, a little more volatile. Nothing is guaranteed, but the upside is huge."

Bo emphasizes the importance of realistic assessment:

"Is this realistically an option I think that I will be successful doing... If I pursue this commission job, is it something where I think I actually have some success?" ([02:30])

He underscores the necessity of evaluating personal skills and the feasibility of succeeding without a robust business network:

"If you are someone like us who came from humble beginnings... there’s a really good chance I would not have been successful in that environment." ([02:55])

Brian Preston's Insights

Brian Preston complements Bo’s advice by focusing on strategic planning:

"I would love to know the timeline for success... put on your 3D glasses... don't just assume because it's in the brochure." ([03:41])

Brian advises listeners to develop a detailed transition plan, considering both optimistic and pessimistic scenarios, and to build a financial cushion:

"How do you bridge the time... start building up cash ASAP so that you actually can have the money, the flexibility so you don't stress out loved ones." ([06:10])

He uses a treasure-digging analogy to illustrate the necessity of sufficient resources:

"The digging for the treasure is... eight feet deep but you only have enough cash or power energy to get six feet." ([06:35])

Practical Steps for Transition

1. Assess Success Potential:
   • Determine if you possess the skills and network to thrive in a commission-based role.
2. Detailed Planning:
   • Understand the timeline for achieving financial stability in the new role.
   • Develop both optimistic and worst-case financial scenarios.
3. Aggressively Cut Expenses:
   • Immediately reduce living costs to accommodate the decreased income.
   • Avoid spreading out cuts; make substantial changes promptly to stabilize finances.
4. Build Financial Reserves:
   • Prioritize saving to create a buffer that alleviates stress during the transition period.

Personal Segment: Celebrating Brian's Birthday

Mid-episode, the hosts take a moment to celebrate Brian Preston’s birthday, adding a lighthearted and personal touch to the show. Bo Hanson and Megan surprise Brian with humorous gifts, including Mickey Mouse-themed items and a piñata, fostering a sense of camaraderie and relatability.

Brian Preston shares the backstory of the surprise:

"I had to pull over. I had to go buy my own sticker... I want to apologize, by the way." ([07:36])

This segment not only entertains but also strengthens the connection between the hosts and their audience, illustrating the supportive and friendly dynamic of the show.

Secondary Topic: Understanding Step Seven of the Financial Order of Operations (FOO)

Listener Question from Clinton M. ([15:33])

Clinton M. asks: "Can y'all go over step seven of the foo? I am 33 and completed step six. I make 52,000 a year with a net worth of $275,000. I'm starting my HSA in 2025. How do I know when step seven is complete?"

Bo Hanson Explains Step Seven

Bo Hanson introduces the Financial Order of Operations (FOO), a nine-step process designed to guide financial decision-making:

"Step seven is called hyper accumulation... it's the bridge between step six and step eight." ([16:41])

He highlights that step seven focuses on maximizing savings and utilizing tax-advantaged accounts tailored to individual goals, such as early retirement or investment in a vacation property.

Brian Preston's Detailed Breakdown

Brian Preston elaborates on the transition from foundational financial steps (1-6) to hyper accumulation:

"Steps one through six are really mechanical... They are trying to protect you from making desperate decisions." ([17:10])

"Step seven lets us... customize it so you live your best life." ([18:54])

Brian emphasizes that step seven involves strategic allocation of assets across after-tax, tax-deferred, and tax-free accounts, ensuring that financial growth aligns with personal aspirations.

Promotion: Financial Order of Operations Course

The hosts promote their Financial Order of Operations course, now available at a discounted rate of $49 for Black Friday, extended until the end of the year. This course provides in-depth guidance on advanced financial planning, particularly beneficial for those entering or completing step seven.

Brian Preston connects the course to their broader suite of financial tools, emphasizing their commitment to accessibility and value:

"We want to keep paying it forward... more generous we are, the more generous you guys are back." ([20:25])

Bo Hanson encourages listeners to consider the course as a perfect holiday gift for those beginning their financial journeys:

"Financial Order of Operations course is a fantastic place to start... especially for newlyweds, new college graduates." ([22:05])

Conclusion

In this episode, Brian Preston and Bo Hanson adeptly address the challenges of a sudden income reduction and the considerations involved in transitioning to a commission-based role. Through practical advice, personal anecdotes, and the introduction of valuable resources like the Financial Order of Operations course, they empower listeners to navigate financial uncertainties with confidence. The episode’s blend of strategic insight and personable interactions makes it a valuable resource for anyone facing similar financial dilemmas.

Notable Quotes with Timestamps

• Brian Preston ([03:41]): "I would love to know the timeline for success... don't skip on the worst of the worst."

• Bo Hanson ([06:10]): "If you can make the very base minimum 50% work, then if you do have success in the commission-based role and you are able to get back to your old income, all that's gravy at that point."

• Brian Preston ([06:35]): "The digging for the treasure is, it's eight feet deep but you only have enough cash or power energy to essentially get six feet."

• Bo Hanson ([14:22]): "What would you do if we told you we filled it full of money? There's nothing but just stacks of cash in there so that when it breaks open, it just rains down."

• Brian Preston ([20:25]): "When we ever create a new tool, a new course, it's more for the accelerating on the path because we know ultimately we think if you get successful enough complications going to find you."

Additional Resources Mentioned

• Financial Order of Operations Course: Available at learn.moneyguy.com for $49 until the end of the year.
• Financial Order of Operations Book: "Millionaire Mission" available on Amazon under $20.

The Money Guy Show is a production of Abound Wealth Management, a registered investment advisory firm regulated by the SEC. All financial advice provided is for informational purposes only and does not constitute personalized investment, tax, or legal advice.