Podcast Summary: Money Guy Show

Episode: Is it Impossible to Build Wealth in Your State? (Ranked)

Hosts: Brian Preston & Bo Hanson
Date: February 11, 2026

Episode Overview

This episode dives into whether it's inherently harder (or easier) to build wealth depending on which state you live in, considering cost of living, income opportunities, and strategies to succeed regardless of geography. Brian and Bo challenge the conventional wisdom that living in a high cost of living state is an insurmountable obstacle and provide both data and practical advice to help listeners build wealth wherever they call home.

Key Discussion Points & Insights

1. Does Location Make Wealth Building Impossible?

• Timestamps: 00:34–03:45

Brian opens by asking, "Is it impossible to build wealth in your state?" (00:34)
Bo sets the table: No two states are alike. Cost of living, job opportunities, and lifestyle vary widely and can impact one's financial life. (00:38–01:20)

Cost of Living: Highest vs. Lowest States

• National average cost of living (single adult): ~$56,000/year
• Highest:
  • California (+12.6%)
  • New Jersey (+8.9%)
  • Hawaii (+8.6%)
• Lowest:
  • Arkansas (-13.5%)
  • Mississippi (-12.7%)
  • South Dakota (-11.9%)

Noted: Nearly half of Americans cited cost of living as the biggest obstacle to saving money (03:13)

2. Case Study: California Carly vs. Arkansas Adam

• Timestamps: 03:45–06:55

Contrarian Approach: Expensive states offer more than just sticker shock; they can bring greater income potential.

Example:

• Carly in California: Cost of living ~$64,000/yr.
  • Income: $100,000 → After-tax: ~$72,000
• Adam in Arkansas: Cost of living ~$49,000/yr.
  • Income: $55,000 → After-tax: just under $45,000

Key Insight:

• Income opportunities in high-cost states often outpace the expense difference, leaving potentially more margin for wealth-building.
• "Even though Carly lives in a more expensive cost of living area... she likely even has more margin available to her to build wealth than Arkansas Adam does." – Bo (05:10)

3. Essential Wealth-Building Strategies No Matter Where You Live

• Timestamps: 05:50–09:51

Brian: The wealth creation formula is universal:

1. Live on less than you make (discipline)
2. Create and grow margin
3. Let time do the rest (compounding)

What Can You Control?

• Leverage the situation: In high-cost areas, ensure your vocation offers compensating income opportunity; if not, reconsider your locale (06:26).
• Assess your location: Even within a low-cost state, geography matters; "driving out of a 'bubble' drops costs significantly" (06:55).
• Own your choices: Increase income or decrease expenses—these are your two main levers (08:07).
• Consumption choices: Avoid lifestyle inflation; a “too expensive car” hurts wealth anywhere (08:53).

Memorable quote:
"No matter what geography you live in... building wealth and making wise and sound financial decisions is available to all of us." – Bo (09:51)

4. Rapid Fire Q&A – Key Personal Finance Takeaways

• Timestamps: 30:59–42:34

Unique Segment: "It Does Not Depend" Rapid Fire Round—Brian & Bo answer questions quickly, can't use "it depends."

Sample Topics and Insights:

• Teaching kids about money: Search “15-year-old savings” on Money Guy site for practical shows and resources (31:40).

• Should you keep contributing to a 401k if the employer match is suspended?

  • Prioritize next steps in the Financial Order of Operations (Roth IRA, after-tax brokerage, etc.) if investment options in plan are lacking (32:23).

• House down payment in brokerage account:

  • If goal is 3–4 years out, keep the majority in cash (for flexibility), consider small portion in short-term, low-risk investments (35:40).

• Encouraging a less frugal spouse:

  • Goal-based conversations and annual planning sessions recommended—“reverse engineer into mutant tendencies that will lead toward your goals” (37:16).

• Are annuities bad?

  • Most are poorly suited as first investment; don't liquidate without careful analysis (38:28). Fixed annuities acting as pensions are acceptable in certain situations; variable/equity index annuities are usually less favorable (43:49).

• When does a 401k loan make sense?

  • Almost never, unless in a dire last-resort scenario – “Never.” (39:16)

5. Listener Questions: Rules, Emergency Funds, & Behavioral Insights

• Timestamps: 20:36–29:48; 47:53–62:49

Why 25% of Gross Income for Housing?

• Upper limit/guardrail, not a spending target (21:11). Gross is a fixed number (less manipulable than net); offers grace for high-cost areas provided other financial order factors are strong (22:55).

Building Emergency Funds vs. Roth IRA Contributions

• At low fixed expenses, it's OK to “play the game” (contribute to both if the timeline to fully fund EF is short, or keep Roth contributions in cash until protected) (25:37–29:48).

When to Diversify Out of 100% Equities?

• If you’re young and at sub-critical-mass asset levels, total equity is acceptable—but know your trigger for reducing risk (age, dollar amount, etc.). “If now’s not the time... when is?” (59:37)

Renting vs. Owning in Retirement

• No imperative to own; just plan (with a buffer for future rent hikes) and budget rent as a core expense (53:58).

"Taking your foot off the gas" in wealth-building

• Balance between discipline and enjoying life is key. Don’t let “mutant” frugality rob you of experiences, but don’t abandon compounding unnecessarily early (48:11–53:02).

Notable quote:
"Money is nothing more than a tool. …I want you to balance out what’s the analytical needs plus the mindset, plus the memories I need to be building..." – Brian (50:00)

6. Announcements and Memorable Banter

• Money Guy Clips Channel: New YouTube channel dedicated to episode highlights and best segments (11:47).
• Job postings: Video editor and content developer roles open (62:49).
• Fun banter: Miser moments (wearing small diapers, splitting IHOP bills, three men sharing a hotel room on a cot) emphasize real-life financial frugality stories (33:32–35:21), and the camaraderie throughout keeps the advice accessible.

Notable Quotes & Moments

• "What is the simple ingredient to wealth creation? Live on less than you make, discipline. And that discipline creates the margin..." – Brian, 05:50
• "Those are really the only two options you have. But the more deliberate you are, the higher likelihood you’ll have of not letting cost of living be a determining factor." – Bo, 08:07
• "A too expensive car in California is going to drive just like a too expensive car will in Arkansas." – Brian, 08:53
• "No matter what stage of your financial life you’re in... building wealth... is available to all of us." – Bo, 09:51
• On balancing discipline and enjoyment:
  "There's a fine line between mutant and miser. Money is nothing more than a tool... Are you doing those things [to make memories]?” – Brian, 50:00

Key Timestamps

• 00:34: Main theme — Does location hinder wealth building?
• 01:20: Highest & lowest cost of living states breakdown
• 03:45: Cost of living as an obstacle for savings
• 04:19: California Carly vs. Arkansas Adam case study
• 08:07: Main wealth-building levers: income vs. expense
• 20:36: Why 25% of gross for housing?
• 25:37: Emergency Funds vs. Roth IRA dilemma
• 30:59–42:34: Rapid Fire Q&A ("It Does Not Depend" segment)
• 47:53: When to ease up on saving intensity
• 53:58: Renting in retirement vs. owning
• 59:36: Is 100% equities too risky up to $388k invested?
• 62:49: Free resources & job postings

Language & Tone

True to Money Guy tradition, the tone is conversational, practical, encouraging, and sprinkled with friendly ribbing and self-deprecating humor. The hosts stick to empowering listeners to control what they can, reminding them to be practical mutants but not misers, and to always be intentional with their finances regardless of circumstance.

Final Takeaway

Cost of living matters—but it's just one piece of a much bigger puzzle. Margin, discipline, intentionality, and using the unique career/income opportunities available in your area can help you succeed financially, wherever you call home. Personal finance is personal; control what you can, and tailor your strategy to fit your unique situation and goals.

Further Resources

• MoneyGuy.com Resources – for calculators, tools, and rule guides.
• New 'Money Guy Clips' YouTube Channel – for bite-sized highlights.

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