Episode Summary: "Laid Off at 51: Are We Ready to Retire? | Making a Millionaire"

Podcast Information:

• Title: Money Guy Show
• Hosts: Bryan Preston and Bo Hanson
• Description: Bringing confidence to wealth building with simplified strategies from The Money Guy. Learn how to apply financial tactics that go beyond common sense to help you reach your money goals faster.
• Episode: Laid Off at 51: Are We Ready to Retire? | Making a Millionaire
• Release Date: June 23, 2025

Introduction

In this compelling episode of the Money Guy Show, hosts Bryan Preston and Bo Hanson engage with Chris and Heather, a dynamic couple from Tennessee, both aged 51. Earning a combined income of approximately $225,000 through salaries and rental income, Chris and Heather boast a net worth nearing $2.5 million. However, a recent unexpected layoff for Chris throws their financial independence into question. This episode delves deep into their financial journey, challenges, and the strategies they employ to navigate this pivotal moment.

Meet Chris and Heather

Host's Introduction:

[00:52] Bryan Preston: "Today we're talking to Chris and Heather. They're both 51 years old and live in Tennessee. They make about $225,000 between their salaries and rental income and they have a net worth of almost two and a half million dollars. A recent layoff has left them wondering, have they hit financial independence? Let's dive in."

Background:

• Chris: With 29 years in software development, Chris has accumulated significant experience and investment assets, including rental properties.
• Heather: Transitioned from being a florist to working with the city's gas department, Heather brings a diverse professional background to the table.

The Impact of the Layoff

Initial Reactions:

[02:08] Bryan Preston: "So how'd you guys get here? What's your story? How did you end up where you are today?"

Heather’s Concerns:

[00:58] Heather: "I get freaked out. I don't like it. I don't want to touch a retirement yet. I don't want to go anywhere near it. I want it to sit there as long as possible because I don't know what the future brings and I just want them to work."

Chris’s Perspective:

[20:04] Chris: "One thing happened when the thing went south in 2008...it was a scary point in time for us...our faith is the really important thing. ...if we have us and our family and we live in some dumpy little apartment, you know, who cares?"

Building Wealth: The Journey So Far

Early Savings and Investments:

[04:10] Bo Hanson: "Wow. And so that's a good decision." [05:24] Bryan Preston: "What I want people to hear is you'd have to know exactly what you were doing, and you'd have to get every single decision right. But you got one decision right. And that one decision was, hey, we're going to start saving pretty early, and we're just going to let that money work. Am I accurately encapsulating?"

Challenges Faced:

• 2008 Great Recession: Chris's loan to his father resulted in a significant financial setback.

[06:10] Chris: "We took a big hit right around the time of the 2008 Great Recession, and I had loaned my dad a big sum of money...and he lost it all."

Budgeting Struggles:

[08:04] Bryan Preston: "Is that what caused you to start thinking about, you said earlier, I didn't even think about it. Is that the catalyst that made you start focusing on focusing on it and taking it seriously?" [09:05] Bryan Preston: "Like, we can get out of this hole."

Current Financial Status

Net Worth Breakdown:

[02:59] Bryan Preston: "You have about $100,000 in cash. You have about 1.7 in investment assets, another $630,000 in rental properties, which is amazing."

Savings and Investments:

• Cash Reserves: Approximately $100,000.
• Investment Assets: Around $1.7 million.
• Rental Properties: Valued at about $630,000.
• Additional Savings: Heather and Chris are diligent savers, contributing significantly to HSAs, Roth IRAs, and 401(k)s.

Commitment to Saving:

[18:40] Bo Hanson: "By the way, congratulations for being in that post. 50 as a fellow person will make Bo feel like the entrepreneurs." [18:56] Chris: "We have been saving about 21% of our gross income. We've got about $47,000 going into your HSA. You're maxing that out. We're both maxing out Roth IRAs at $16,000 each."

Retirement Analysis and Projections

Initial Projections (“Dream Plan”):

[28:19] Bryan Preston: "What you can see is each one of these bars is an individual year of your retirement...you retire at 65 with about three and a half million dollars. Your portfolio would start providing for your living expense need...leave behind about $8.3 million in today's dollars for the kids."

Adjusting for Layoff (“Doo Doo Plan”):

[31:19] Bryan Preston: "So what's the spend number? How much could we actually spend starting right now every month for the rest of our lives and still have a high probability of success." [37:29] Chris: "60,000, that's not a big deal. I could make that."

Monte Carlo Simulation Results:

• Dream Plan: 98% probability of success.
• Doo Doo Plan: 37% probability when retiring immediately post-layoff.
• Adjusted Spending ($10,500/month): Near 80% probability of success.

Key Insights:

• Flexibility is Crucial: Balancing between spending and income generation is essential.
• Tracking and Adjusting: Continuous monitoring of expenses and adjusting spending habits can significantly impact retirement readiness.

[42:34] Heather: "It's definitely peace of mind. Knowing the route isn't all uphill."

Strategies and Next Steps

Options to Improve Retirement Prospects:

1. Increase Income: Chris considers shifting to a passion-driven job in competitive robotics, potentially earning an additional $60,000/year.
2. Reduce Spending: Adjusting their monthly expenses to a sustainable level, such as $10,500 from $12,000.

Homework Assignments:

[45:34] Bryan Preston: "Figure out what system you guys are going to implement together so that you have confidence around the tracking that you're doing." [45:34] Bryan Preston: "Build the next steps... Is it brush up on your resume? Is it begin making connections? Is it start looking for the opportunities that can give you paid gigs?"

Balancing Passion and Income:

[38:55] Chris: "Robotics is really expensive and I would like to be able to help people who don't have as much money to be able to participate...I could still make pretty good money doing that."

Conclusion: Resilience and Forward Planning

Hosts’ Reflection:

[35:02] Bryan Preston: "Because you saved 25% of your gross, because you practiced deferred gratification, because you thought about the future, you are in a position right now that when life threw an unknown unknown at you...you get to choose what your next pivot looks like."

Chris and Heather’s Takeaway:

[43:01] Heather: "Absolutely." [43:27] Bryan Preston: "When you have enough savings and a solid plan, unexpected setbacks don’t derail you. You have options and guardrails to navigate through uncertainty."

Final Words:

[42:32] Bryan Preston: "That's a testament to your early discipline and strategic planning. You’re in the driver's seat defining what the next phase of your life looks like."

Notable Quotes with Timestamps

• Bryan Preston on Early Saving:

  [05:24] "What I want people to hear is you'd have to know exactly what you were doing, and you'd have to get every single decision right. But you got one decision right. And that one decision was, hey, we're going to start saving pretty early, and we're just going to let that money work."

• Heather on Budgeting:

  [12:39] "The budget that we have, it's like I still kind of in my head fall back to where we were at. ... sometimes I get really bad at it and I don't put my receipts in."

• Chris on Financial Setbacks:

  [20:33] "One thing happened when, when the thing went south in 2008...our faith is the really important thing. ...if we have us and our family and we live in some dumpy little apartment, you know, who cares?"

• Bryan Preston on Options:

  [37:51] "You have options. You have good options. Not hard options either."

Key Takeaways

1. Early and Consistent Saving Pays Off: Chris and Heather's disciplined approach to savings and investments has secured a substantial net worth, providing a foundation to navigate unexpected financial challenges.

2. Flexibility and Adaptability: Life events, such as job loss, require reassessing financial plans. Being flexible with spending and income generation is crucial for maintaining financial stability.

3. Importance of Budgeting: Continuous tracking and adjusting of expenses ensure that living within means remains sustainable, especially during retirement.

4. Multiple Income Streams: Diversifying income through salaries, rental properties, and potential side ventures like competitive robotics can enhance financial security.

5. Emotional Resilience: Maintaining a positive mindset and focusing on what truly matters—family and personal fulfillment—helps in managing financial stress.

Moving Forward

Chris and Heather stand at a crossroads, faced with the reality of Chris's layoff. However, their solid financial base, coupled with strategic planning and disciplined saving, equips them to navigate this challenge. By exploring opportunities to increase income and adjust spending habits, they can realign their financial trajectory to ensure a comfortable and fulfilling retirement.

For listeners inspired by Chris and Heather’s journey or those facing similar financial uncertainties, this episode underscores the importance of proactive financial planning, flexibility in the face of change, and the enduring value of disciplined saving.

Resources & Further Engagement:

• Join the Conversation: Interested in similar financial discussions or becoming a guest? Visit moneyguy.com/apply.
• Access Free Resources: Explore valuable financial tools and guides at moneyguy.com/resources.

Disclaimer: The hosts, Bryan Preston and Bo Hanson, are partners at Abound Wealth Management, a registered investment advisory firm. The content provided in this episode is for informational purposes only and does not constitute personalized financial, tax, investment, or legal advice. All investments carry risks, including the risk of loss. Abound Wealth Management and the Money Guy Show are not liable for any investment decisions made based on the information provided.