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A
This episode is brought to you by Google Chrome. You think you know a browser, but Gemini and Chrome?
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That's new.
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It can help you with practically anything on the web, like restoring a vintage motorcycle from a 50 page restoration block. Or finally break down that long article you've had open for weeks. Gemini and Chrome is here for it, ready to make anything online make sense. There's no place like Chrome. Check responses set up required compatibility and availability.
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Veris 18
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A
so good, so good, so good.
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B
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C
Quit Saving money. Everything you need to know about Coast
- [01:03]
A
Fire Brian I am so excited to talk about this because oftentimes there are good things that come out of movements and there are good and exciting things that are worth talking about and worth taking advantage of. But sometimes I think there can possibly be too much of a good thing or maybe even a misunderstanding of how that good thing should be rightly applied.
- [01:26]
C
Well, look, the fire movement, Financial independence, retire early. We've always, you know, people call us the fire extinguisher because that whole retire early is a little unique. I always say people always go to the next endeavor. Fine movement. You know, it's that fine movement. But it is one of those things, one that seems to really be kind of in the conversations if you dabble in the world of the wonderful world of personal finance is Coast Fire. And I kind of can get this is because this is one of those things where I can kind of save heavily and then I can see light at the end of the tunnel and take my foot off the accelerator. How does this work?
- [02:02]
A
Yeah, I think if you're looking for the Webster's definition of what Coast Fire is, we didn't actually pull it, but this is what it is. It's when your current investments are projected at the level they are at today to grow to 25 times your annual expenses or by a traditional retirement age without you contributing any additional money. It's the idea that I'm going to save, save, save, save, save. Build, build, build, build, build. And once I hit a number, that number will allow me to coast to true financial independence so I can front end load all of my saving. I can then not use my dollars, let my army of dollar bills Grow and ultimately that army of dollar bills will be able to pay for my living expenses at some point in the future.
- [02:39]
C
Now look, we've, we've gotten some exposure to this. We even covered this on one of our Making a Millionaire episodes. We, we had a great guest. Danielle was on, and her goal was to get to $4 million.
- [02:50]
A
That's right.
- [02:50]
C
She felt like she had saved enough money and now she was going to take her savings rate down to 8%. Meanwhile, in the past, she had done 30, 40%. But when we did the analysis on this, we realized, whoa, hang on, put the brakes on. Because I think in your assumptions you might be pulling back a little too early.
- [03:11]
A
Yeah. So what we put together was, hey, by tweaking your assumptions, by making some adjustments, we were able to put together a plan that had her saving a little more diligently until age 40. She was trying to stop, frankly, too soon in her journey to where she wasn't actually going to be able to coast to where she wanted. But by saving diligently till 40, we put it together. And then at 40, she was actually able to drop her savings rate even lower than she thought, down to 5%. It's all about the variables that go into the calculation. And you want to make sure you get those variables right, because if you don't get them right, man, you can end up in a real pickle.
- [03:44]
C
Well, let's take it beyond just a Making a Millionaire guess. But we have, we've done a case study on what does Coast Fire Carly look like. Walk us through this.
- [03:52]
A
Yeah, so let's assume that we have Coast Fire Carly and she starts working in her first job at 25 years old, and she's going to aggressively save for the next decade. So from 25 to 35, she's going to do everything in her power, super high savings rates to build her assets all the way to 500, $500,000 by the time that she gets to 35. Well, she then wants to participate in Coast Fire, which means she's built up the half a million dollars she's not going to save anymore. She's not going to add any more to the pot. She's just going to let that $500,000 grow from age 35 out until age 65. Well, if she does that, and we assume that she has an 8% rate of return on average, just the $500,000 that she was able to build in her first 10 years of working, has the ability to turn into almost five and a half million dollars by traditional Retirement, she did a lot of hard work in the first decade, and then for the next three decades, she let her money do a whole lot of the hard work.
- [04:52]
C
Now a lot of you are going to look at that five and a half million dollars and be like, holy cow, that's a lot of money. And it is. I mean, it's the future equivalency. I'm going to bring this back to today's dollars, but it's just under 220,200, $220,000 a year. So when I hear that, I'm like, oh, that, that's a lot of money exploded. That's making a lot. But now we have to bring it back. And this is the problem with sometimes looking so far out in the future. It really messes with your orientation on what money is. Because you see five and a half million dollars, you see $220,000 of living expenses, you're like, what could go wrong? Well, the problem is you bring it back to today's dollars, it's still a healthy sum of money. It's $90,000.
- [05:31]
A
That's right.
- [05:32]
C
But it is a lot different than what I think a lot of us, when we see five and a half million dollars projected, that is not the same as five and a half million dollars today. And that's why it's probably a good time for us to kind of hit pause and say, hey, let's hit the pause button on, on, on coast fire and explain why is this so popular? What are the, the benefits? What's in the brochure, which is actually really good, but also what are some flaws or things you at least need to be mindful of so you don't fall in a trap?
- [06:00]
A
Well, so, okay, why is it so popular? I, they love the idea of taking their foot off the gas. We, as humans, we don't often like lots of discomfort, but we're willing to put up with some discomfort for a short amount of time if we can. And so people say, okay, I'm going to save really diligently, I'm going to do this really, really hard thing for a short period of time. And then once that period of time has passed, then I'm going to ease off, then I'm going to take my foot off the gas and it'll be a much more enjoyable experience.
- [06:27]
C
I do like that. Look, we talk about money is only a tool. And I think a lot of people think when they get to a million dollars or 2 million dol million dollars, their life is just going to get Easier. And I do like how Coast Fire is making these people think about work, life balance. How can I actually take more control, more enjoyment in spending in the present after I've done this period of being super disciplined? That is a positive and I do like that part of it. There's also comfort in knowing that your retirement is already well funded. If you're way ahead of the curve, you know your army of dollar bills is doing a lot of the heavy lift. That's also very noble because you're way ahead of the schedule on things. And it's nice having your money because you use discipline the right way.
- [07:12]
A
And if you do this correctly, if you follow Coast Fire, you're going to be able to actually increase your standard of living much earlier. You're going to have to have this super high savings rate very early on. But earlier than retirement you can drop your savings rate and you get to actually enjoy more of the present. So a lot of folks like that idea. I don't have to wait until my 60s or 70s actually live the life I want to live. I can start doing that in my 30s and 40s if I don't have to have such a burden to continue saving and continue adding dollars to my pot of money.
- [07:39]
C
Well, and that's why get to potential flaws. I mean, this is the thing. Reality is, it's not bad in concept. Is what happened is, is that life just has a cruel sense of humor. Is because when you think you have everything figured out is typically when you get punched in the jaw on a Tuesday afternoon with something in life. And it doesn't always have to be bad stuff. It could be good stuff, family planning and other things, you know, oopsies in that way. It's just sometimes life has other thoughts. And you have a tendency that if you're not careful, you might take your foot off the accelerator of savings a little too soon.
- [08:15]
A
That's exactly what we saw with Danielle. She wanted to stop saving in her mid-30s and unfortunately that just wasn't going to get the job done. Because in reality, if you are a Coast Fire participant and you think about your lifeline or your life cycle, it's a very long two stage time horizon. The time horizon from where you start coasting to true financial independence and then true financial independence all the way to the end of your life. And there are a lot of things that can change. There are a lot of variables that can affect the probability of success in the plan that you've laid out. And the earlier you try to do this, the more Variables enter the equation and the more small deviations those variables can have huge impacts to your plan.
- [08:58]
C
Look, this is the thing, we get a bad rap because there's a reason, just like financial planners on everything else, we say it depends. We just try to make sure everybody knows the variables. And that's why this is definitely a measure twice, cut once. Because for a lot of you high earning individuals, once you cross that threshold of leaving a well paid job or career, it's hard to fire that back up three to five years in the future if you've misjudged this. So let's go ahead and make sure you stick the landing. These are the variables that you probably should plan or the variables that could
- [09:29]
A
cause the plan to blow up if you don't think about them. Because what happens if your expenses end up higher than you thought? For Coast Fire Carly, what we've planned out is that at the end of her coasting period, when she hits true financial independence, she's banking on a portfolio that can provide about $90,000 of living expenses in today's dollars. Well, if her actual expenses are 110,000, 120,000 at that time in the future, 30 years from now, then she's going to have a problem.
- [09:57]
C
Well, I mentioned this. I kind of foreshadowed it. Life circumstances, you should go ahead and start planning for this is why do you think I tell everybody to put on their 3D glasses. You can kind of go where you think the ball will be on your financial life. Think about, you know, if you're not married when you're planning all this, go ahead and build that into the plan. If you, how about three family planning with kids and so forth. Go ahead and put, whether it's going to be two kids, three kids or no kids, have a plan for all of the above so that you're just not caught, you know, flat footed on this. And then also think about, you know, if you have to move to a different part of the country, what that might also require of you. Because that's the thing I've seen when I've seen people who have left early. It's the family planning. It's all of a sudden private school or daycare, like, holy cow, these things, these things are a lot more expensive than I anticipated. That's what we just want to make sure that you are. When we say measure twice, cut once, you're taking all this into account.
- [10:54]
A
And then even in terms of how you do your projections, what happens if the rate of return you actually end up Achieving is lower than what you expected. I mean, I think for Coast Firecarly we were relatively conservative with an 8% rate of return. But what if she would have done her projections off a 10% rate of return and she only achieved and 8%? That creates a problem or what if your assumptions around something like inflation are different? We, for Carly, projected back, okay, what if it's the annual inflation assumption of 3% over the next 30 years? Do you recognize that even just a small change can have a very significant impact for her? With a portfolio of five and a half million dollars? If we assume a 4% withdrawal rate, we said that that would generate about $90,000 of living expenses in today's dollars at a 3% inflation rate. If what she actually recognized over her coasting period though, were a 4% inflation rate, that $90,000 of spending would actually only have the same purchasing power today of about $67,000 in spending. That is a 25% reduction in purchasing power because of nothing that she did. Nothing that was inside of her control, but an external factor that impacted her plan.
- [12:07]
C
So now that we've given you the kind of the things to think about, the variables, I'd like to kind of pivot your mindset. This doesn't have to be an all or nothing. Just, you know, look, if you decide you want to be part of this movement, there's nothing wrong with you still getting your employer's match. There's nothing wrong with you still get it going out there and maxing out your Roth ira. If you're under those income thresholds, you're. Nobody ever regrets having more Roth dollars because these things have incredible legacy building from an estate planning and so forth. So I always remind people there is a. It's not all or nothing. There is some nice middle ground. Even if you want to be part of this movement.
- [12:48]
A
And if you are going to do this, I hope what you've discerned from this is that it makes Sense to measure 2, 3, 4 times and then remeasure and then remeasure and then check your progress and check your progress. Now, even if you were coast far, Carly, and you began to do this and you got into the first couple years of coasting and you recognized, oh man, inflation is higher than I thought, or, man, I got married or I had a kid, it's always okay to go back and revisit the plan, say, okay, I thought I was going to coast. Maybe now I need to start saving. Maybe now I need to start adjusting. Because if you can Adjust the plan as you go. It doesn't have to be 100% right at the very beginning, but the more accurate you can be in the beginning, the easier the path, the easier the journey will be. We are not fire extinguishers. We just recognize that fire can be dangerous. And if it's not handled correctly, you can burn yourself. But if you use it correctly, it can be an unbelievably powerful tool that you have at your disposal.
- [13:46]
C
Yeah, my biggest thing is I do love the fact of people owning their time that much sooner, because that's the part the why. If you know that when you wake up in the morning, you're doing what you're meant to do, not only are you going to be happier, you're going to feel more fulfilled with how you're using this powerful tool of money. And that's the biggest part. We want to empower everybody out there. And that's why I love that we get to do these live shows where we get to answer questions. It's always. It's a mystery of how what the. Every show has a different personality. So I'm curious to see what things take shape today.
- [14:22]
A
Yeah, I love that every Single Tuesday at 10am we show up right here to answer your questions. We have the team out in the wings collecting them. So if you have a question, something you want us to weigh in on, something you want to get our take on, make sure that you get it in the chat right now. Because we 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 Ribey, I'm going to throw it over to you.
- [14:45]
B
Yes, I've got some questions queued up from the live YouTube chat happening right now. We'll also be doing a rapid fire segment later in the show, but these questions are going to be pulled directly from the Money Verse, which is our Free Discord server. You can go join right now@moneyguy.com moneyverse if you want to submit for rapid fire or just see what people are submitting, you can go do that right now while you watch. But while we get the rapid fire stuff in the hopper, I'm going to start with some of our Questions straight from YouTube. Are you ready?
- [15:15]
A
Yes, ma'.
- [15:16]
B
Am. First one's from Tumblr Bait. It says. I just. I just read the usernames. Hi, MoneyGuy team. My wife, 33, and I, 38, have reached our coast fire number.
- [15:28]
A
Oh, let's go.
- [15:29]
B
We are trying to decide how rich we want to be later versus spending now. What's the difference between 2 and 4 million at 65? How about 4 and 8? These are some pretty different numbers, but I think it's an interesting question. How would you answer it?
- [15:45]
A
You gotta, you gotta run the numbers. Cause I think it's so interesting. Even as we were talking, Brian, in the live chat, people said, oh, wow, it's incredible. $5 million sounds like so much money, and it is. $5 million is a lot of money. But $5 million 40 years in the future would be the equivalent of a 4% withdrawal rate of $90,000 today. Inflation and the time value of money is a very real thing. And so the question you ask, well, how different? What's the difference between 2 million and $4 million? I'm going to argue that difference is going to be much smaller in the future than it is today. So you want to make sure you think you think through it correctly.
- [16:25]
C
That's why I like thinking about retirement in terms of consumption or living expenses. How much? What's your burn rate? Figure out what that number is. And then now I want you to stack on if you were, you know, doing all the things that give you the best version of your life. So if you're a golfer, if you're a traveler, whatever your hobbies, go ahead and bolt that on to in today's dollars, what that retirement will look like. Now we can project that on out, add an inflation factor of it, 3% to 4%. Whatever you feel comfortable, you'll quickly see, you'll start to put meat on the bones of what your planning should look like. You'll quickly see there's a big difference. 2 and 4 million, 4 and 8 million, those are going to have significantly different withdrawal numbers on them. But you also have to inflation adjust it because with your naked eyes it just. $2 million sounds like plenty. But if you're thinking you're not going to save another dime, that that $2 million goal might not be enough to get it all done.
- [17:28]
A
Yeah, and I just think this is an interesting thing from our experience. Now there are stories and it is a reality. There are people that get to the end of their life and they have a lot of money left over. And they recognize, man, I kind of didn't take advantage of the things I should have taken advantage of. Those are the financial misers. But let me tell you what we have never had. And, and I want to, I want to be careful using an absolute like never. But I think this is true. So check me on the fact, check me on this, we have never had someone get to financial independence or get to retirement and say, guys, I've just got too much money. I've just saved too much money. I feel too comfortable in my retirement. I feel too at ease, too at peace with the dollars I've saved. I think that most people say, oh, wow, I am not nearly as worried in retirement with my financial circumstances as I thought I was going to be. Or, man, I thought it was going to be a lot more difficult for my dollars to grow even after I left the workforce than they are. Those are realities. But I think Tumblr bait, I would not be so concerned. Okay, we got this coast number and we're going to hit this. Oh, man. If I have $8 million when I start retirement versus having $3 million when I start retirement, am I going to be upset about that? I don't think so. I think what you're going to recognize is it's going to give you more options, more flexibility, more choices that you get to make earlier on in life than you would get to make otherwise. Now, don't mishear me saying that you ought to not spend anything, not enjoy anything and wait until you're 95 to start using your money. That's not the case at all. But there's nothing wrong with going into financial independence, going into retirement with a little bit more of a frothy, your word balance than you think. You need to give you a little bit of extra comfort, a little bit of extra cushion, because there is a psychological thing that's going to happen when you're no longer working with your back and your hands and your brain and instead you're now having to let your dollars work for you. The more dollars that you have working for you, the more cushion and slack you have in the system, in our experience, the more peaceful and comfortable retirement and financial independence is.
- [19:28]
C
I mean, Tumblr bait didn't give us. He gave us ages 33 and 30 and 38. Probably a lot of the family planning is done at those, at those stages. I would just make sure that you are building in because usually all the fire movement people, including coast fire, save at such higher savings rates well beyond even 25%. Make sure that you're building enough in for today. I think there is a balance. Remember, and I covered this at the beginning of the show, it's not on all or nothing. I think that's the problem is that we all go to these extremes and that's where there's usually some nice common Ground that lets you make great memories with your family, but still let you get the free money from your employer, max out your Roth IRA and have this healthy life and the best version of your life where you have no regrets in the future.
- [20:15]
B
Love that Tumblrbait. Thank you for the question. It is your lucky day because your Tumblr bait worked. You get a money guy Tumblr just email winner@moneyguy.com? on the show.
- [20:26]
C
It just transformed.
- [20:27]
A
I got it. I got two things. Can I say two things before you do our next question? Number one, I was just informed that the money verse hates the word frothy. That's. That's what I saw. That. That's a thing that has been.
- [20:39]
C
Let it be noted. Bo said it today, not me.
- [20:41]
A
I did. I thought it was a thing. I guess it's not a thing. I'm late to that one. If you wouldn't mind, in the chat right now, give us some synonyms for the word frothy so that we can use other language that's more appropriate.
- [20:51]
C
Well, lathered. Ooh, no. Okay.
- [20:55]
A
I don't like that at all.
- [20:56]
C
No.
- [20:58]
A
And then someone said, hey, I love that.
- [20:59]
B
Good brainstorming. Good brainstorming. We'll keep working.
- [21:02]
A
We'll put that one. Hey, no bad ideas. Someone said, hey, I love the butterfly mug. Brian, you happen to have a new mug right here. You think you want to tell us?
- [21:11]
C
Well, I don't know if y' all heard. Dolly's got a new truck stop and I came y'. All. Now, look, I have not been to it yet, but I have a dear friend here in the office that who went. I think she might have gone on opening day and she came back with all kind of merch. And then I. Because I was so excited. I've watched at least two YouTube videos on Dolly's new. It's essentially like Dolly's versions of Bucky's.
- [21:33]
A
But you're watching YouTube videos on this.
- [21:36]
C
I already had half the family. The only one shout out to my wife. She threw the cold water on it. I was like, you realize I pulled it up on map. I mean, I didn't do it on map. I'm an old school guy. I pulled it up on ways and it was only gonna be like a 40 minute drive from the house to get the Dolly's truck stop. And I was like, you realize we could go eat. They have chicken and dumplings on the, on the menu and hold on.
- [21:58]
A
Chicken and dumplings at a gas station?
- [22:00]
C
Oh, no. They have A bar. They have a gas. They have a restaurant. This thing is legit. So I'm kind of excited to go check it out. I had. I had the girls all signed up to go. It was my wife that kind of threw the cold water. And it was probably because I bet it's loaded up. I probably need to let. Let the dust settle and then we'll. We'll go try to do this in the next two weeks. But. Yeah, Y' all know I'm a big Dolly fan. I'm always surprised. Like, you know, if you look around the set, you'll see some little Easter eggs to show our love for Dolly. The smartest, just sweetest. And she changes. For those of you who do not are now affiliated with Tennessee, Bo's kids, his daughters and son when they were. Everybody gets books. I mean, if you have a baby in the state of Tennessee, you get books. I mean, this is what puts. Elevates our literacy, probably from all the other states that when you're struggling with. This is sweet. Dolly Parton has made sure that everybody feels some love on this one. I think that should be celebrated. It's pretty incredible to be that generous. And that's why Dolly is universal.
- [23:04]
B
Yep, that's right. But I do like your mug. It says cup of ambition on the mug. Easy, by the way, which I think is.
- [23:11]
C
Yeah. You know, hey, what about, like a mug? I don't have fingernails, so I can't do the nine to five, you know, fingernail sound that she does.
- [23:17]
A
What if we did our next, like, our next Monday guy, like, little team meeting or like we had our next content meeting at. At the truck stop?
- [23:23]
C
Well, the problem is Dolly doesn't need us to draw crowds. No, no, no. I meant probably couldn't get it.
- [23:30]
A
No, I wasn't saying this was not the money guy meetup. I was talking about our team just going there for a meeting. It's all load up, and they got
- [23:39]
C
biscuits, they got chicken, and I mean, they got all this stuff.
- [23:43]
A
Biscuits. You.
- [23:43]
B
They.
- [23:44]
A
Caleb, don't have toast there. Huh? Interesting. Interesting, funny.
- [23:49]
B
Just a note. If you're ever having breakfast with Brian and Bo, don't order toast. Just. Just take my word for it. Just don't do it.
- [23:56]
C
Look, we. We love everybody, but if you're in the south, especially eating at a restaurant known for Southern breakfast, you get the biscuit, you get a cat head biscuit, you do not order toast. I mean, it makes. It does it kind of makes me want to turn the table over when you order toast.
- [24:13]
B
What a Tangent already just on question number one.
- [24:15]
C
I mean that's, come on. There's no. If you're looking at. That's the equivalent of somebody choosing like I don't want, I shouldn't do brands. A moderate hotel versus a luxury deluxe. Hotel toast is moderate. Biscuits, luxury.
- [24:34]
A
Wow. The three star versus five star.
- [24:36]
B
Okay, let's move on to the next question.
- [24:41]
C
The whole Ohio is coming out in. You see, look at. She's so uncomfortable.
- [24:46]
B
It's from Jason. It says, hey Money Guys, I'm 22 and just graduated college.
- [24:52]
C
Nice.
- [24:52]
B
I have $120,000 of student loans at 6%. Should I follow the foo while living at home with no expenses and invest and save as much as I can?
- [25:05]
C
Okay, now this is Jason, here's some layers.
- [25:08]
A
Here's one I want to know what's your degree in? Like what'd you go get your degree in?
- [25:13]
B
Great.
- [25:13]
A
And what are you doing professionally now? Like, what is your, if you don't mind sharing, I'd love to know your income. Because the question is, should I follow the financial order of operations? I always think that following the financial order of operations is a great answer. If you don't have your own copy, go to moneyguy.com resources and download your free copy. And one of the things that we do talk about in there is that there are two different segments for debt. There is step three, high interest debt. Brian, you show them the thing. And then there's step nine, low interest debt. And what you have to decide. And we actually talk about this throughout the course. And Brian, you talk about a millionaire mission. How do you decide and what do you determine is high interest debt versus low interest debt? And specifically for young folks like you, where does student loan interest fall?
- [25:59]
C
Look, I think because Jason gave us the, the details here is the deets are, is that this is at 6%. But the thing that kind of made us go oof was it's 120 grand. So I'm hoping, because you know, if you, if you're, if you're following anything in the money guy sphere, 120 grand of student loan debt. I'm hoping you're coming out of school making pretty big bucks. I mean, because that's a lot of debt. Now you could do all the above. And let me tell you what I mean by this. You can follow the financial order. You're living at home, meaning your footprint of expenses is pretty much nothing. You know, it depends on if your parents are making you pitch in or not. But you could run the gamut on this thing with your, your student loan debt. Get the. Get. Go ahead and build up a, you know, assuming you don't have any, you know, credit card debt or anything, get you some emergency reserves, get the Roth ira, load up your employer's retirement plan. You're going to get to 25% savings rate so quick because you're living at home that then every dollar above and beyond that, go and start extinguishing the debt. I mean, because I wouldn't. You could do some incredible things in about a year, year and a half. Yes, it's not cool to live at home, but with a high income. But you really should get ahead of this $120,000 because you just do not want that, that albatross just hanging around you for the next years. It's just go ahead and see if you can do all the above. And I think you can. Living at home, you're one of the unique people because you have zero responsibility other than, hey, let's get out of debt. Let's build our financial foundation, respect the financial order of operations and build your army of dollar bills while you're vanquishing the debt. You'll conquer the world. Conquer the world was a clarification because 120 grand. I'm counting on some pretty big things.
- [27:45]
A
What was the. Give me the screen name again.
- [27:48]
B
Jason Q. Jason.
- [27:50]
A
So I'm assuming this. This there was a Jason Quinn that just said I'm a. I'm a business major going into a sales rep position. I wonder if sales rep means like commission. You kind of got to go eat what you kill. Unclear. But I would do everything I can to get my shovel as big as possible as early as possible so that I can do exactly what Brian said and try to get this. Get out from under. What was the word you said? Albatross. Get out from under this albatross of debt.
- [28:16]
B
Albatross.
- [28:17]
C
Am I using that right word? I don't, I don't. I mean, if you saw my SAT scores, you're like, he shouldn't use words like that.
- [28:23]
A
Albatross meaning ray.
- [28:25]
C
Really good at math.
- [28:28]
B
Okay, Jason Q.
- [28:29]
A
Looks like what's a large web footed oceanic bird famous for its massive horseshoes?
- [28:40]
B
Yes.
- [28:41]
A
Metaphorically, it's a larger psychological, physical or social burden that feels like a heavy curse or inescapable handicap.
- [28:47]
C
Hey, there we go.
- [28:49]
A
Crushed it. Assuming you didn't meet the giant bird. You nailed it.
- [28:52]
B
I thought you meant the giant bird. I won't lie. But Jason Q, thank you for the question. You can email winner moneyguy.com and cash in on your Tumblr. Next question's from Joey. It says, hi, money guy team. We are 31 and 36 and are hoping for retirement in 13 to 15 years.
- [29:11]
A
Whoa, hold on. 31 plus 13 public math. Mid-40s is what we're looking at here.
- [29:15]
B
Some early retirement going on.
- [29:16]
C
Yeah.
- [29:17]
B
However, 99% of our retirement is in a 401k. We don't have Roth because we make too much 270k. Married, filing jointly. How do we access money?
- [29:30]
C
It's almost like the financial order of operations. If there was a step. Step number seven where it talks about hyper accumulation. What happens when you just going through the process of letting your 25% be tax incentivized only. And that's what Roth does, that's what your retirement plan does. It's step seven where we actually say, hey, take a break and say, how am I going to use this money? When am I going to use this money? And for yourself, since you're going to be trying to access this money in your mid to mid, late 40s to early 50s, you're going to need a bridge account. And the easiest answer to that is probably start building some after tax brokerage assets. Yeah. I'm assuming if y' all make beyond $270,000 as a couple, y' all can save a healthy account beyond the 25% or even a portion of the 25% if you're beyond getting free money from your employer and so forth. Let's start building off that after tax account so that when you get to mid-40s to 50s, you have a very large account that's going to give you lots of liquidity, lots of still lots of opportunity to grow the army of dollar bills. But it's just easier to. You don't have, you know, distribution limits, early withdrawal penalties or any of that stuff.
- [30:47]
A
I love that. I'm going to give a slightly different. Yes, I agree with Brian's answer 100%. I'm going to give just a slightly different answer because it's another side of the equation. Can I tease a thing that we just did? Ribi, is that okay? Can I talk about a thing that we just recorded and just did switch one because we.
- [31:01]
B
I know, I guess so now I want to know what you're thinking.
- [31:02]
A
So we just had a collaboration that was super, super fun this past week. Right.
- [31:06]
B
This is a good one.
- [31:06]
C
You talking about Carl and Mindy?
- [31:07]
A
Yeah, Carl and Mindy. We had many from bigger pockets money and it was just so great. We had to do a deep dive on their financial situation. And one of the things we uncovered was like this access to capital conversation they were having. A lot of folks find themselves in the position when they save diligently for a lifetime, for a career. They have tons of pre tax assets, tons of assets they can't get to. So one of the things I would encourage you guys to think about first, you said we don't have any Roth assets because we make too much money. Yeah. Once you're over whatever the income limit is at 270, you're over that limit. To do that, I'd be curious if you could do backdoor Roth contributions, make
- [31:42]
C
sure you have the right account structure.
- [31:43]
A
If you have, if you don't have any IRAs and it's everything's in 401k, you could potentially do backdoor. And so even building up Roth basis over the next 13 to 15 years and letting that dollars grow tax tax free would likely give you some sort of flexibility if you had to do it for early retirement. Even though it's not our favorite. But you said that one of you is 36. So I'm just thinking through the math. 36 plus 15 years, it's 51. Depending on how your 401ks are structured, if you could eke it out or maybe go to part time or whatever and you could get to age 55 and the year that you turn 55, so long as you're still employed with the company that sponsors your 401k, you can access your 401k dollars starting at 55 without having to pay the 10% penalty. So you were really close. You're with inside four years. Maybe if it was a part time thing or something like that, that you could potentially do that. But assuming that's not the case, we did a great show. I think it was a great show. And the title of that show was Four ways. Three Ways, Four ways to retire early that you may not know about. Is that the name? The team will put the name in the chat and we walk through a
- [32:49]
C
couple different, rolling their eyes going, which show was that?
- [32:52]
A
So we talked about how you can do Roth conversion ladders, talked about how you can access Roth basis, how you can build taxable brokerage accounts. And we talked about 72t distributions because one of the things that may potentially be interesting, may potentially be compelling to bridge that gap. If you are going to truly retire at 51 and have no income, no access, you could do what's called a 72T distribution to get you from 51 to 59 and a half. Now, I think Brian's method of building up a taxable asset by the bridge makes the most sense, is the one that makes the high has the highest probability of success, the most flexibility. But there are methods and mechanisms by which you could still retire early and get to name of that show was three ways to retire early that you might not know about. I was so close.
- [33:39]
B
You were very close.
- [33:41]
A
So I would encourage if you've not checked that out.
- [33:43]
C
I can't see Justin's face, but I can see Will's face. And Will was like, I don't know what he's talking about. But Justin was able to pull it out.
- [33:49]
B
Like I think we've done a show like that but I was, I just wasn't sure.
- [33:53]
A
No, I know we have matched up
- [33:55]
B
but you got it show because we're
- [33:57]
A
going through all the things.
- [33:58]
B
You got it. All right, we're gonna do one more question and then we're going to get to our rapid fire money verse style. And also Joey E. If you would like a tumblr thank you for your question. Just email winner moneyguy.com to cash in on that next question is from debit or debit or credit CPA nerd. Oh, I want to give some like retort back to that so bad, but I'm not going to. How did you personally overcome the guilt of upgrading your lifestyle once you hit financial escape velocity, at what point did you realize delaying gratification was turning into depriving yourselves?
- [34:40]
A
You want to answer this first? Let me answer this first.
- [34:41]
C
I mean, look, I think that it's all about the balance of your life because earlier in my career I was, you know, Beau has always been generous from jump street. You know, he graduates college and he's throwing out beyond 10% to charities and other things. It took a little. The financial mutant in me was like, well, I'll just do this later. And I don't think looking back on it, that's not the right path. I was hanging out with Beau. I started becoming more generous. So I never had guilt about the success because I felt like the more successful I was because I was doing a very healthy beyond 10% generosity of giving. We were growing this thing together where it was not only was my assets growing and my income growing, but also the organizations I could help and the charities and so forth. That meant a lot to me. It was more of the why of with family and realizing the scarcity of time with people you really care about and things you could do to make sure you're maximizing the memory making that made me say, hey, instead of us doing this as small as possible, let's make this really enjoyable. Because I don't want to shower my kids in gifts to where they're entitled. I want to shower them with memories to where they're more knowledgeable about life and how great it is to have a loving family and how you can use this tool of money to do really a lot of positive stuff. Those are the intersection points that I kind of had.
- [36:21]
A
Yeah, I would say that how did I personally overcome the guilt of lifestyle expanding? One of the things I did is in the financial order of operations allows you this. Once you get to a 25% savings rate, it should free you from thinking, oh, man, is it okay if I buy the nicer car? Is it okay if I go on the nicer vacation? Is okay if I do the home renovation or do the improvement? Because if you know that you're paying yourself first and you have your dollars automatically going in the places they're supposed to be going, it should be a freeing thing to let you recognize, okay, it's okay to do this. It's okay for me to spend. It's okay for me to let loose. It's okay for me, for me to let my lifestyle increase. So long as my lifestyle increasing does not crowd out me. Actually saving and building for the future, that's kind of the first part. That's how I escaped the guilt of it. And then when did I recognize that delayed gratification was depriving me of memories? For me, this is me personally. It was with my kids. It was me and my wife were having this conversation, like, okay, yeah, we're saving and we're building and things are going good, but we want to do this thing. And this thing might be very, very expensive. And we look at the cost of this thing, we go put it in the wealth multiplier and say, man, at our age, spending that much money on that thing is a substantial sum of money later in life. Like, if you just think about it. But our kids are only going to be young once, they're going to be in the house once, and we want them to be here building memories and want this to be the child of the takeaway. And even if we do this thing, while there is an opportunity cost of those dollars not being there in the future, it's not going to inhibit us from doing our other financial things, of reaching our other financial goals. And so it was okay. I recognize that money is nothing more than a tool that allows me to do the things that I want to do and accomplish the things that I want to accomplish, both in the future as well as now in terms of what I'm able to do with my kids and the experiences and the memories we're able to build and create. And so I think if you can have that balance, it's not about all deferred gratitude. We say deferred gratification is a wonderful thing and something you should exercise and something you should likely always exercise, but not complete and total absolute deferred gratification. Because if it's complete, total and absolute deferred gratification, tomorrow is not promised and you will not get back the moments that you are missing today, especially if you have young children in the house. So you got to figure out how you balance both of those things and don't let the financial achievement goal drive whatever crowd out your ability if you've reached escape velocity to expand lifestyle, or if you've not reached escape velocity, to figure out how to bedazzle your basic life today to create those memories.
- [39:00]
C
Also, look, I've had a few fellow creators who've reached out to me about housing purchases and other things, and I always bring it back to a grounding of what are the things that create fulfillment and happiness. When you do all the research, it's. It's relationships, it's the, it's your family, it's your friends, it's who you're hanging out with and making memories. Think about for your kids too. Because I often wonder, you know, if you go too far up on the food chain on housing. I think that's why we, when we do our millionaire study of our clients, you're. You're surprised? Yes, we have a few clients that have $10 million plus homes, but most of them don't. Is when I think you start thinking about, hey, I want to live in a neighborhood where my kids can go meet the other neighbor kids and play with. That probably is not going to be that. You get too far up on the thing. You price yourself out of family neighborhoods with lots of families in it. It's also, I vacation with my neighbors. I hang out on the weekends with a lot of my neighbors. And I was like, but my biggest pet peeve with my house is that I live in the valley of country music stars as they all live on hundreds of acres. And then I'm down in the this little valley on my, you know, 0.4 acres. So I mean, I can see my neighbors around me, which is a blessing and a curse when you want privacy. But so I, you know, I've entertained going for bigger land. But then I think about man, but then when you buy bigger land, because I asked my, my builder who I got to be friends when we were building our house, when he approached me about buying into another neighborhood, he was doing that had three to five acre lots of. I asked the superintendent who I was friends with, I was like, so are any of these neighbors talking to each other or are they just all kind of living in their big mega life? And he was like, no, none of them talk to you? And I was like, well, see, that's sometimes going too far up. I think you might crowd out the things that actually bring you the happiness and fulfillment so you don't have to. Just because you can doesn't mean you have to.
- [40:56]
A
So what you were saying is if you increase your lifestyle too much, you can price yourself out of enjoying life the way that you actually want to be able to enjoy life.
- [41:06]
C
Yeah, and also toys. We got more toys. I mean, like we were just talking to somebody. Like if you, if your hobby is, is private, being a private pilot. How often do we see private pilots start off with a Cessna, go to a Cirrus next, but then when they start going up into the other planes, all of a sudden this thing gets more and more expensive. Your cost per hour to operate. You can price yourself out. You can do the exact same thing on all the things that create happiness in your life too. So just be mindful of that stuff. Nothing wrong with you enjoying what you've created, but just understand the why and how it intersects with the things that bring you purpose and happiness.
- [41:42]
A
Love that.
- [41:45]
B
I love that too. And now it is time to give debit or credit. CPA a money guy. Tumblr. Just email winneroneyguy.com and we will love to send you one.
- [41:54]
A
Hey, can I apologize? I just had a visceral reaction and I said nerd. And I didn't even mean to. Like, I didn't even. Because I don't, I don't think CPAs are nerds. I have a lot of friends. One of my best friends is a cpa.
- [42:06]
B
Very best friends.
- [42:07]
C
You think anybody who's in this audience, we're all nerds.
- [42:09]
A
Okay, well, that's what I don't even.
- [42:11]
C
I don't even look at that as. I don't even look at that as a nerds take over the world.
- [42:18]
A
I just like, I'm a Nerd.
- [42:19]
C
I'm a. I'm a. Yeah.
- [42:21]
A
Okay. All right, well, hey, I'm not good
- [42:22]
C
at English, but I'm very good at math and nerdy stuff. So I kind of. I. I love the crowd of moniker of being a nerd.
- [42:29]
A
Debit or credit in your screen name. That's a bold choice. That's. That is basically says the guy that
- [42:33]
B
has a show called.
- [42:34]
C
You thought you were taking a shot at me.
- [42:36]
A
Because I did. Honestly, I did. As soon as it was like it was. It hit, you caught a stray. That was really directed at him. That's on me.
- [42:43]
B
You guys are funny. All right, it is time for our rapid fire segment. Remember, this is our It Does Not Depend rapid fire segment where Brian and bo get 30 seconds combined to answer your questions and they cannot say the words it depends.
- [42:56]
C
That's 15.
- [42:57]
B
Now we will say you are good at that. We'll have a segment at the end, the maybe it does depend segment where if you really need to say something you didn't get to say in the 15, 30 seconds with a Southern draw.
- [43:08]
C
That's probably only about eight, eight words.
- [43:10]
B
And also shout out again to the Moneyverse. All of these rapid fire questions are coming from our moneyverse discord server and all of the great financial mutants in there. So thank you for submitting. Are we ready?
- [43:21]
A
Yes, ma'.
- [43:21]
C
Am.
- [43:22]
B
Okay, question number one. 30 seconds on the clock.
- [43:25]
C
You can go first.
- [43:26]
B
Okay. Age 34, step nine of the foo with a 1.5 million investable portfolio spread evenly across three buckets, is 100% target date index funds still adequate?
- [43:39]
A
I would argue that you're at the point where you've likely graduated past a generic portfolio solution. Target dates are great generic solutions for the general public. You now, at this level of wealth, likely need a specialized solution built to your unique circumstances, time horizon, risk tolerance and goals.
- [43:54]
C
Yeah, because you're going to want to be more tax advanced. You don't want to look at the tax advantages. You want to look at how you're going to access the accounts. It's really more of a step seven operation. So I think you're beyond index target retirement funds.
- [44:07]
B
Question 2.
- [44:08]
A
But Bo, how do I do that? Well, you go to moneyguy.com a client. We will leave the porch light on for you.
- [44:13]
C
So we not going to see the questions, I guess y' all can't. Y' all don't have the ability.
- [44:17]
A
We don't usually do that. You got to active listen on the rapid fire.
- [44:21]
B
Okay.
- [44:21]
A
It really kicks it up A.
- [44:22]
B
Not all Right. All right, next question. What are your thoughts on being generous towards friends in need? I'm worried that monetary help instead of educational help will lead to an awkward dynamic in the friendship. You're first.
- [44:36]
C
Yeah, I, I, I, it can be awkward because sometimes people, even though you're trying to be generous, will think you're just showing off. So you have to be. I would be very nervous about loading people up you care about.
- [44:50]
A
In my experience, one of the best ways if you can do it is to do it anonymously if you really want to help them. And it's less about, less about you getting anything for it and more about actually helping someone in need. If you can find a way, okay, where's the bill due? Who's the person, whatever. And you can just satisfy that and not take credit for it. I think that's a great thing.
- [45:07]
C
I'll probably. We can give more on that later.
- [45:11]
B
Next question. Where should I save for a down payment for a house?
- [45:16]
A
If you're buying the house in the next five years, I think High yield Savings Account liquid cash is going to be your best bet. Make sure you hold it somewhere that can likely earn somewhere between 3.5 to 4%. If you're not getting that, you're probably not getting enough on your cash.
- [45:30]
C
Yeah, I mean, you can use money market, you know, mutual funds at the brokerage accounts like Fidelity Vanguard, or you can do the high yield savings accounts. Think, trying to think of which ones don't stay away from Capital One. But which ones, you'll never know.
- [45:48]
A
Ally is good.
- [45:49]
C
Ally is pretty good.
- [45:50]
B
All right, next question says, my wife and I, 27 years old, 230k income with an 800k net worth, are buying
- [46:00]
A
a new car at 27, you say?
- [46:02]
B
Yep.
- [46:04]
C
Give me those numbers again.
- [46:05]
A
27.
- [46:05]
B
27 years old, 230k income, 800k net worth.
- [46:10]
C
Shoot.
- [46:11]
B
They're buying a new 35k car to have something reliable for their first baby on the way.
- [46:17]
A
Oh, congrats.
- [46:18]
B
Should we sell stocks in our brokerage account or take on a 5% loan?
- [46:26]
C
Yeah, I think, I think you could. With this big. Assuming that 800,000 is liquid assets, I would look and harvest some losses and I would go and pay cash for this vehicle but use it in negotiation where you may be financed for a little bit, but you paid off quickly
- [46:40]
A
at a $230,000 income. I don't know what your living expenses are, but assuming there's margin in the system, I don't know how big your emergency fund is. Perhaps you could Borrow from your emergency fund, not trigger any taxes, and use that high income to rapidly pay back the emergency fund.
- [46:53]
C
That's a better answer.
- [46:55]
B
And within the time frame. Well done. Next question. What are the three things you would bring to a deserted island?
- [47:05]
A
A cell phone to call for help.
- [47:09]
B
That's such a cop out.
- [47:10]
A
Some MREs so that I can survive, and then a boat to get off the deserted island.
- [47:17]
C
Okay, I watch tv, so I know the answer is you need a fire starter. You need a tarp to keep you dry. And then you need a bow and arrow so you can hunt.
- [47:24]
A
Do you realize how much faster I'm getting off this island with my boat and cell phone?
- [47:27]
B
You are.
- [47:28]
A
Are you kidding me?
- [47:29]
B
You're camping out on.
- [47:31]
A
I'm out of here, dude.
- [47:32]
B
Brian's like, I'm set up to stay. Oh, my goodness.
- [47:35]
C
There's not gonna be any cell phone reception out there in the middle of nowhere.
- [47:39]
B
Well, at least he still has the boat.
- [47:40]
C
I have a Starlink phone.
- [47:41]
A
I have a boat. And. And I said MREs because I couldn't think of a third one, but yeah, I'd have a boat.
- [47:49]
B
Good answer.
- [47:50]
C
Nobody sets up a reality show with those. Nobody gives you. Okay?
- [47:53]
A
The worst reality show, I get off the island. You know what I mean? Hey, let me. You know what I'm not doing? I'm not swimming off that sucker. You see, people are saying that you
- [48:02]
B
need a life jacket.
- [48:03]
A
That should be number one.
- [48:05]
C
Hey, well, after we make it through rapid fire, you can ask me about swimming. I want to brag on the handsome family.
- [48:13]
B
Okay.
- [48:13]
A
Oh, okay. I have a feeling. Who's not?
- [48:15]
B
Let's do some more. Let's finish rapid fire. Next one says, should anyone in their 20s hold bonds in their portfolio at all, assuming retirement in their 50s and 60s?
- [48:27]
C
Only if it's in your index target retirement fund. I don't want you actively going out there and buying bonds in a mutual fund in your 20s. Typically, unless there's unique. You know, I don't want to say always, because there might. Might be a unique person.
- [48:41]
A
I think that target retirement index funds will likely have some fixed income exposure. But if you're just starting out early on and you're just buying low cost index, low cost S&P 500. I think that's totally fine.
- [48:54]
B
Totally fine. Heard it here first. Next question says, Brian regrets missing an early Roth contribution. You wrote about that in your book and have talked about it on the show. Are there any life experiences or purchases you regret delaying because you were too disciplined?
- [49:12]
A
I won't say regret delaying, but there are some purchases I made that I was like, man, that was so good. A really, really nice coffee maker was a gift I got myself and my wife when we got our first house once. I was like, holy cow, why didn't we do this earlier? A lot of the services we outsourced, like lawn was one that I should done that way earlier in life.
- [49:30]
C
I don't have a. I'm pretty happy with my life. I don't have a lot of regrets on.
- [49:34]
A
No. Is it things you wish you would have done earlier?
- [49:38]
C
I mean by adjoining rooms or when you go on vacation? Another one. Yeah.
- [49:43]
B
Yeah, that's it. We'll come back to it.
- [49:45]
A
Oh man, I. I got.
- [49:46]
B
I gotta think next question. So what counts for prepaying future expenses? I believe they're referring to step eight
- [49:54]
C
of the abundance goals.
- [49:56]
A
Go.
- [49:56]
C
Yeah, the big things. I mean this is when you can give to your kids college without regrets. You can get into commercial real estate. You can live in a little nicer lifestyle with a nicer car, nicer house. It's just all kind of. Yeah. Live your best life realistically.
- [50:12]
A
Steps one through seven are about building towards financial independence. Once you get sort of steps eight, it's those goals that exist before you get to financial independence. So whatever that intermediate term goal may be, that's going to be what those prepaid future expenses are.
- [50:25]
B
Nicely done. Three more. This one says how often to rebalance does it change with age or progression in the foo?
- [50:34]
A
It does change. It likely changes with size of portfolio more so than age or where you're at in the foo. What we do professionally at the firm is every quarter we look at the allocation. We're not always making changes. At least twice a year we look at rebalancing. Again, not often making changes, but look, looking for losses or capital gain avoidance. And then as life circumstances change.
- [50:52]
C
Yeah, I mean I wouldn't. I wouldn't be trying to do daily, maybe even quarterly in the beginning. If as long as you're looking at this once or twice a year, you should be good.
- [51:02]
B
Next question.
- [51:03]
A
Just because you're still. I still had a few seconds.
- [51:05]
B
No, we'll come back to it. Your time is up.
- [51:09]
C
You got to come back to every one of these pretty much.
- [51:11]
B
I know you are kind of roll with having too much to say today.
- [51:15]
A
Okay, 30 seconds.
- [51:16]
C
Not that long.
- [51:17]
B
Next questions. Are extended car warranties worth it on used vehicles?
- [51:24]
C
I don't think so, no. Basically the good decision is buying the vehicle that has good reliability built into the Manufacturing of it.
- [51:35]
A
I think one of the things, if you look at like gently used, like early on cars or maybe even buying a new car, One of the big benefits of buying new as opposed to, opposed to buying used cars, you do get the manufacturer's warranty and the early mileage warranty and all that kind of stuff. It's one of the things that kind of tilts the scales towards new purchasing instead of used purchasing. Right now.
- [51:55]
B
Right on the money. Brian looks like he has something to say, but too late. Last but not least, you've said a lot about biscuits and toast on this live stream. What if the toast is homemade sourdough bread?
- [52:08]
A
I love it, but I don't eat that for breakfast. And you put avocado on there and a fried egg that. But like, if I'm sopping up. If I'm sopping up. And that's the, that's the technical.
- [52:18]
C
He brought in avocado toast. I'm just saying that's what I put such a bougie.
- [52:22]
A
That's what I would put.
- [52:24]
C
I love sour. I love sourdough. And I, you know, cinnamon sugar on that would even be awesome. But for breakfast, you want biscuits, you can put some gravy on there, you can put some bacon on there. It's biscuits for the, for the win.
- [52:36]
A
Because here's the thing. The biscuit is like the all weather vehicle. If you want it to be savory. No, no, we're done. If you want the, if you want something savory, you can put an egg on there, you can put some sausage, you make a sandwich. That's great. Or you could put some honey on there or some jam or something like that. You can make it a dessert. It is so multifunctional.
- [52:53]
B
So is sourdough bread.
- [52:54]
A
Look, sourdough bread is wonderful. I'm not gonna, I'm not gonna.
- [52:57]
C
His wife makes sourdough too. So that's why you're. Somebody's hitting him below and look like
- [53:00]
A
you can do like sourdough cinnamon rolls. It's unbelievable.
- [53:04]
C
It doesn't, it still doesn't rise to the biscuit for breakfast.
- [53:06]
A
But it's not, Not a biscuit, right? These are different things. These are different things.
- [53:10]
C
Now, look, by the way, we're not talking about Pillsbury biscuits either. If you've ever had homemade biscuits where when you crack that bad boy open and you see the steam coming off of it, it's a little slice of happiness. I mean, even I'll give Cracker Barrel credit, you go to Cracker Barrel. And they bring out fresh right out of the oven biscuits. I'll tell myself, brian, you only go do one. Three biscuits later, I'm like, how did I end up here? And it's just biscuits.
- [53:36]
B
Pull you in a good millennial joke, after Beau mentioned avocado toast, someone wrote, bo's never going to be able to afford a home. That made me laugh. I was like, that's too real. Stop.
- [53:47]
A
That's funny.
- [53:48]
B
Okay, let's wrap up the show with our maybe It Does Depend segment. You did say you wanted to come back to a few questions, so I will honor that. Our very first question, the question asker said they had 1.5 million investable portfolio. And I did kind of cut you off when you were mentioning a pretty important resource that they may want to know about.
- [54:07]
A
Yeah, I was just saying that a lot of people, okay, I've done the target retirement thing and I did that. But now I do want to graduate to this more specialized solution, something that takes into account my unique circumstances, what I have, tax structure. That's exactly what we get to do in our day job. That's exactly what we get to help individuals just like you do. So if you think you're at that point where now the gravity of your decisions is so big because you have a million and a half dollar portfolio, I would argue at least have the conversation go to moneyguy.com become a client, and look at what it might be like to partner with a professional advisor.
- [54:39]
B
Love it. Also, you said you may have more thoughts on being generous toward friends and needs. Brian, what do you say?
- [54:46]
C
I've had a few. Because I want. I want to qualify that. I have had a few situations where, like, I had. I don't want to give too many details, but like somebody wasn't going to make a trip and I've approached them privately and I said, look, you being at this trip is more important than the money side of it. Let me help out. And I've had mixed bag. I've had one that it went swimmingly well and it's never been spoken about against and they got to come and I love it. And I have had another one that didn't go so well. So, I mean, I think it. You have to know who the. One of the things I wrote about in Millionaire Mission, one of Bo's superpowers, and why he owns part of the business with me is he says thank you incredibly well. To where when every time I try to be generous with him, he always overwhelms me with his thankfulness that I want to do more. Some people just don't receive generosity well. So you need to kind of base it off of the per. Because some people will bite the hand that feeds sometimes if you're trying to be helpful. But I've had other people where I've helped them through some really life tough situations and you see a lot of the fruit. So it's a case by case situation. I don't want you to be a miser just because you listened to us answer the question and we said no. There is definitely. It depends on this answer.
- [56:02]
A
And money can be so charged. If you are going to be generous, one thing you have to do, and this is like a self thing that you need to do if it's truly coming from the place of generosity, be very careful trying to receive something for it because I think so all too often you give somebody some money or you help them out with something, there's this expectation that like they now owe you something. That's not what generosity is. Generosity is, hey, I'm going to do this. And my wife and I have had to struggle this before. We've had some people that have been in some like tough spots and we were able to take care of a thing and then unfortunately we see that person go make a horrible financial decision and we're like, oh my gosh, that's not what it was about. It was about helping someone in need in a moment of need. And so I just think if. And I think when it comes to like doing that, you have to be careful like loaning money to people and that sort of thing. It's a real dangerous sticky game. So if you can remove yourself from it entirely and you have the means and mechanism to do that, in my experience that's been the best one.
- [56:59]
C
There is a way to be generous though without getting yourself in financial trouble.
- [57:02]
A
That's right.
- [57:04]
B
You also mentioned it was about Brian regretting missing an early Roth contribution. Is there anything else you may regret delaying?
- [57:13]
A
I didn't go through things I regretted delay. One of the best decision. This is for all of my young people out there, right. If you were someone early on and you are thinking about get or you're going to get married, right. And you're going to get married and this stuff. One of the best decisions my wife and I ever made. It was one of the very first decision we made was we bought a king bed. And I know that's so silly and so out there, but I'm amazed at how many counterparts that we have Right now, like good friends of ours, like, oh yeah, we have queen.
- [57:40]
C
I'm like, oh, what? You know, it's funny you say it,
- [57:44]
A
it was a game.
- [57:44]
C
First seven, eight years of my marriage, we were on a queen bed. And I remember when we got a king bed. But the problem is it ruins you because now when we go stay at somebody's house and it's a queen bed, I'm like, how did we fit on this for seven to eight years? We must have loved each other more back then because right now it's just tough. I mean, because I had that recently. We went and visited my mother in law and all she has at her place are, you know, is full and queen beds. So we, we slept on a queen bed. And look, it's funny you say that.
- [58:10]
A
That may be like millennial and bougie. Whatever. It was like, I was like, holy cow.
- [58:14]
C
This is the other two things I was gonna say adjoining rooms. Once I could afford to put my kids in an adjoining room next to us, I should have done that probably sooner. So you just get a little more space.
- [58:25]
A
And I still struggle with that one.
- [58:27]
C
And then the other thing is, is if something is beyond six hours of driving, we do flights. I mean. Cause that's, I don't know, it's anything, you know, maybe six to seven is gray zone, but anything. Because I remember when we were down in Georgia, I could drive to Orlando in six and a half hours and it seemed reasonable. I moved to Tennessee.
- [58:50]
A
You can't make that.
- [58:50]
C
I drove to Orlando and it, by the way, it wasn't 10 hours. Like the thing GPS told you it was like 11 with traffic. And I was like, never, ever, ever, ever. Because that's like an hour and a half flight.
- [59:02]
A
The, the, the last time that we did that drive was driving from. Or we drove to Orlando for Disney and we drove back and I never again. I was like, that, that broke me. Never again. Six hours.
- [59:14]
C
That last time I did it, after we went on a cruise, my oldest daughter, she got sick and was about to throw up in the car. So I pulled off the interstate and of course I chose this great. I chose this exit where I didn't realize that they had cameras on the, on the lights. It ended up being like $150 ticket because I did a U turn on an intersection work too, because I was trying to get her not to throw up in the car.
- [59:39]
B
Oh.
- [59:41]
C
So I wrote the check and I was like, this was probably paid for part of a flight with that ticket.
- [59:46]
B
All right. And last but not least, I did kind of cut you off on the rebalancing question and just wanted to make sure there wasn't anything else to say. We just ended it pretty quickly, I believe.
- [59:57]
A
I think we nailed. I think we nailed that.
- [59:58]
B
I thought you did pretty well. I just felt like there something you wanted to say?
- [60:01]
A
Financial mutants often think that we have to take action when it comes to decisions. Remember, you were awarded as an investor or as a financial decision maker based on the quality of the decisions that you make, not on the quantity of decisions you make. A lot of times when we look at client portfolios, one of the decisions we make around rebalancing is not to rebalance. Not to rebalance. Because oftentimes when you're rebalancing there are friction costs, there are taxes depending on account structure. So a lot of times we will make the active choice to do nothing and that's still an active choice. So if you are going to view your portfolio quarterly, twice a year, annually, whatever. Just because you're reviewing and looking at rebalancing does not mean that you absolutely have to rebalance because a lot of times you can actually underperform by overdoing that. That's what I was going to say.
- [60:53]
B
That's fantastic. Well, thank you so much for joining us. Every Tuesday at 10am Central, asking your questions, chatting with us on YouTube and in the money verse discord. We really appreciate you. We love chatting with the financial mutants and hopefully helping you grow your confidence in your financial situation so you can focus on what really matters. That's what it's all about. That's why we do the show and that's why we have moneyguy.com available for you at any time. Full of free resources, calculators and all of our shows archived. So be sure to go check it out.
- [61:22]
C
Yeah. Take advantage of the abundance cycle. There's a reason we give you so much free stuff is we want to give you value, value, value. Let you live your best life, own your money and your time that much sooner and then hopefully you're going to find is or you will find it's not. Hopefully it will happen. Your success will create complexity and you're going to remember who planted the seeds of success. We'll leave the porch light on for you. I'm your host, Brian, joined by Mr. Bo Reby, the rest of the content team. Money Guy out.
- [61:49]
B
The Money Guy show is hosted by Brian Preston and Bo Hansen. 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.