Podcast Summary: Money Guy Show – "Is THIS a Secret Investing Hack?"

Release Date: December 23, 2024

Hosts:

• Brian Preston
• Bo Hanson

Overview:
In this engaging episode of the Money Guy Show, hosts Brian Preston and Bo Hanson delve into advanced financial strategies, addressing listener questions and offering expert insights on optimizing Health Savings Accounts (HSAs) and the pitfalls of leveraged investing. The conversation is enriched with personal anecdotes, practical advice, and a touch of humor, making complex financial topics accessible and relatable.

1. Optimizing Health Savings Accounts (HSA)

Listener Question: HSA Rollover Concerns
Timestamp: 00:07 – 03:25

Brian Preston introduces a listener query from "Bedazzler," who is considering rolling over their employer-contributed HSA due to high fees and limited cash options with their current provider. Bedazzler's employer contributes $3,000 annually to the HSA, but the existing provider offers minimal cash value and high fees.

Nick's Insight:
"There’s nothing wrong with having multiple HSA accounts. We have a lot of clients who do this. They'll have one at the company with the provider to get the employer money and another that they fund separately."
— Nick, [00:40]

He explains the nuances between captive and non-captive HSA providers, emphasizing the importance of retaining the employer's contributions while potentially opening a Fidelity HSA for better investment options.

Bo Hanson's Advice:
"Go talk to your HR or your benefits people to find out if it's a captive plan or if you actually have the opportunity for even them to contribute to different plans."
— Bo Hanson, [02:00]

Bo underscores the value of advocating for better HSA providers by presenting alternative options like Fidelity to HR departments, aiming to secure more cost-effective and growth-oriented plans for employees. He encourages listeners to leverage their collective voice to enhance their financial benefits.

2. The Risks of Leveraged Investing

Listener Question: Leveraged Stocks as Investments
Timestamp: 07:00 – 13:06

Joe H. poses a question regarding the viability of investing in 2x leveraged S&P 500 funds for long-term gains, suggesting that multiplying the S&P's historical annualized return could yield significant profits.

Nick's Explanation:
"The problem is, whenever you get into options or any type of derivative, there's often a time component associated with it. They reset on a daily basis, so the only time you really make money is if you catch a momentum string or have a bunch of large up days in a row. It’s gambling, not investing."
— Nick, [07:34]

He elaborates on the concept of time decay and how daily resets in leveraged ETFs can erode potential gains over time, making them unsuitable for long-term investment strategies. Nick categorizes leveraged funds as speculative tools rather than reliable wealth-building instruments.

Bo Hanson’s Agreement and Caution:
"This is not investing, this is completely speculating. If you're considering it, it should only be a very small portion of your portfolio and treated as a hobby."
— Bo Hanson, [09:01]

Bo concurs with Nick, highlighting the speculative nature of leveraged ETFs. He warns about the emotional toll and potential financial setbacks caused by the volatility of these instruments, especially during market downturns. Bo advises using leveraged funds only as a minor, controlled part of one's investment strategy, if at all.

3. Practical Financial Strategies and Listener Engagement

Applying the Financial Order of Operations
Timestamp: 13:06 – 15:36

As the discussion on leveraged investing concludes, the hosts transition into broader financial advice, emphasizing the importance of adhering to a structured financial plan.

Nick’s Encouragement:
"One of the best ways to figure out how to do money better is by Millionaire Mission or the financial order of operations."
— Nick, [13:49]

He promotes foundational financial strategies, such as the financial order of operations, to help listeners build wealth systematically and avoid common pitfalls. The hosts encourage listeners to engage with their resources, including subscribing to their channel and exploring their website for further guidance.

Bo Hanson’s Gratitude and Final Thoughts:
"We are very thankful for you guys. Every day we get to create content and work with people across the country. If you follow what we share, your life will get complicated for good reasons."
— Bo Hanson, [14:22]

Bo expresses heartfelt appreciation for the listeners, highlighting the reciprocal relationship between the hosts and their audience. He underscores the value of applying the shared financial principles to achieve a more fulfilled and secure financial future.

4. Notable Quotes

• Nick on HSA Accounts:
  "Don't want to walk away from that $3,000 employer contribution. Cause that's free money."
  — Nick, [00:40]

• Bo on Leveraged Funds:
  "This is not investing, this is completely speculating."
  — Bo Hanson, [09:01]

• Nick on Leveraged ETFs:
  "Levered investing or using lever-type products is not a great way to build wealth because it's not a long-term wealth-building strategy."
  — Nick, [07:34]

• Bo on Financial Gratitude:
  "We're very thankful for you guys. Your life will get complicated for good reasons."
  — Bo Hanson, [14:22]

5. Final Takeaways

• Optimize Your HSA:
  Explore the possibility of rolling over your HSA to a provider like Fidelity for better investment options while ensuring you retain employer contributions.

• Avoid Leveraged ETFs for Long-Term Investing:
  Recognize the speculative nature of leveraged funds and prioritize stable, long-term investment strategies over high-risk, short-term gains.

• Adhere to Financial Order of Operations:
  Follow structured financial plans and foundational strategies to build and sustain wealth effectively.

• Engage and Advocate:
  Communicate with your HR department about better financial benefit options and actively participate in enhancing your financial well-being.

Resources Mentioned:

• Visit moneyguy.com for more financial guides and resources.
• Explore the Millionaire Mission and financial order of operations for structured wealth-building strategies.

Disclaimer: Abound Wealth Management is a registered investment advisory firm regulated by the Securities and Exchange Commission. The information provided in this podcast is for informational purposes only and does not constitute financial, tax, investment, or legal advice.