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- [00:07]
Brian Preston
Low income, late start. What are you to do?
- [00:10]
Bo Hanson
Brian, I am so excited to talk about this because people ask us all the time, hey, based on where I am today, I think I may be behind or, I don't know, maybe I've made a mistake that is insurmountable. I want you guys to speak into it and we love that we get to speak into that kind of stuff. We love that we get to answer the things that you care about. We love it so much that Every Tuesday at 10am Central, we do a live stream where we want to answer your questions and load you up so that you can do money better. So with that, right now we have the team out in the wings collecting your questions so that we can load you up. So with that senior content developer, Megan, I'm going to send it over to you. Did you write that down? I just pulled out, thought about it.
- [00:54]
Brian Preston
I was sitting here thinking, there's no way he's going to stick this thought.
- [00:56]
Bo Hanson
About it all week.
- [00:57]
Megan
Fifth time's the charm. Boo. All right, we're starting.
- [01:03]
Brian Preston
Suburb dropping bombs over there.
- [01:05]
Bo Hanson
All right, cool, cool, cool, cool.
- [01:08]
Megan
All right, we're starting off with a question from mh. They say is there a good way to know how much to contribute if you are behind? I'm 32 years old with about $40,000 invested. I make $50,000 per year in gross annual income. I'm currently saving 25% between my 401k and HSA, including the match. I'm just honestly not sure how much more I could contribute realistically. But I like to have goals to work towards.
- [01:35]
Bo Hanson
Well, mh, first of all. Okay, so let me restate what I just heard. You're 32 years old, you've already accumulated $40,000 and you're saving 25% of your gross income already. So, like, when I read that, I'm thinking to myself, like, where are you behind? Like, are you even certain that you're behind? Or how did you even arrive at the conclusion you're behind? Because we have a great tool. If you go to moneyguy.com resource we have a wealth multiplier tool. And what it will show you is how much each dollar that you put to work can turn into by the time that you get to retirement. What I think is amazing is for a 32 year old, if you go look at what your wealth multiplier is. Ron, do you have a thing, do you know what the wealth multiplier is? Oh, gosh, he's got a cycle through.
- [02:19]
Brian Preston
Oh, my goodness. Yeah.
- [02:21]
Bo Hanson
All right, so for a 32 year old, Ron, what is the wealth multiplier?
- [02:25]
Brian Preston
32 year old it is 18.05.
- [02:30]
Bo Hanson
So if you just were to take that $40,000 that you have today and multiply that times 18.05, that would tell you what you're on track to have without saving another dime. And I bet that's going to be a pretty big number. So I'm curious, are you actually behind? But MH's question was, okay, if I am behind, if I do arrive at that conclusion, what are some ways that I should catch up or how do I think about catching up? What would you say?
- [02:56]
Brian Preston
Well, first I think when in doubt, zoom out. I talk about that for market volatility. But I also think it would be helpful in this situation for context. We just know, look, we aspirationally focus a lot of our content on trying to help 20, 30 somethings and even 40 somethings because of that whole component of compounding growth. But the reality is, is that if you do the research, the average age begin investing is 33 years of age.
- [03:27]
Bo Hanson
So already ahead of the curve by.
- [03:28]
Brian Preston
That context, MH is actually ahead of the curve when we talk about the 20 somethings. That's why we always talk about that 25% is aspirational in your 20s. We know that it takes a while to catch your footing to get inspired to even make this happen. I also want to give MH some additional context. I don't like to do public math, but I did bring a crutch of my public calculator here and I was going to type this in. So he makes $55,000. 25% works out to be about 13,750 a year. That's pretty aggressive. But he is counting as employer match. So I think a lot of people, if you have a very generous employer, this is actually very doable. So if we divide that by 12, we can come up with that's a little over $1,100 a month of investments. He says he has $40,000 already in his investment accounts. And I'm just going to use a conservative 8% ongoing. And we'll just say take him to 60. We're not even. I don't know if that's fire. That's not probably too aggressively fire, but it's earlier than 65, it's earlier than 67, you're right. So if you did 27 years times 12 months, that's 324 months. That puts him at, check this out. $1.6 million. $1,652,000. When he crosses into his 60s, I don't think you're really behind. Mh. I think it's just you need to reframe your perspective. Instead of being glass half empty, let's be glass half full.
- [05:02]
Bo Hanson
I love it.
- [05:03]
Megan
Wonderful. All right. Thank you so much.
- [05:06]
Bo Hanson
That was great. So good.
- [05:09]
Brian Preston
I mean, how many more props can I put in a question? I mean, we got calculators, we got deliverables, we got cups.
- [05:16]
Bo Hanson
Look at you.
- [05:16]
Brian Preston
I feel like Carrot Top. I've used that joke before.
- [05:20]
Bo Hanson
I often. I often think of you as Carrot Top in my mind.
- [05:25]
Brian Preston
Great. Bigger Carrot Top, though, right? When he was kind of like.
- [05:27]
Bo Hanson
No, that's. Oh, you're talking about. He is bigger Carrot. Yes. Yeah, he's. Did you know Carrot Top got super jacked as a thing?
- [05:34]
Megan
I'm not following any of this.
- [05:36]
Brian Preston
Did y'all know that I actually saw Carrot Top at live.
- [05:39]
Bo Hanson
No, you did not.
- [05:39]
Brian Preston
@ UGA.
- [05:40]
Bo Hanson
Did you really?
- [05:41]
Brian Preston
He came to UGA and did a whole stand up comedy routine. That's how.
- [05:46]
Bo Hanson
I mean, that was back in the day. This is before he, like, hit mainstream.
- [05:48]
Brian Preston
That shows. Carrot Top is my age, maybe a little older, since I was. You were a student and he was actually the performer.
- [05:55]
Bo Hanson
That's hilarious.
- [05:56]
Brian Preston
That's a.
- [05:57]
Bo Hanson
You even know who Carrot Top is? Does it?
- [05:59]
Megan
I don't.
- [05:59]
Bo Hanson
She. I was like, she has no idea. She has no context for this. He's a comedian.
- [06:03]
Brian Preston
You go to Vegas, you can probably still see him.
- [06:05]
Bo Hanson
He was a comedian. He is a comedian. And then he got super. He got super jacked. Like, he got super big and started lifting weights and he got super small.
- [06:13]
Brian Preston
I loved his stuff. A lot of people I felt like sometimes were hard on on Carrot Top, but I actually liked his prop comedy.
- [06:19]
Bo Hanson
We'll have to ask. You know, we have a resident comedian here on the Money Guy team. We'll have to ask him in show meeting what his thoughts on Carrot Top were. I'd be curious to know. Looks like it's thumbed up.
- [06:33]
Megan
All right, thank you, MH for your question. If you would like a Money Guy Tumblr, you can email winneroneyguy.com y'all ready for the next one?
- [06:42]
Bo Hanson
Yes, ma'am.
- [06:43]
Megan
All right, this next question is from themr. Broxley says my employer contributes 10% to an ESOP each year while also letting me contribute 8% to my 401k with a 50%. So 4% total match. I also work in an intense career at a CPA Firm Brian would know. How can I justify leaving this role with a 14% employee retirement contribution?
- [07:10]
Bo Hanson
You know, it's hard. It's really, really hard. So for those of you who do not know, an ESOP is an employee stock ownership plan where basically you get to become an owner in the company for which you work. So it's a little bit different than like a profit sharing contribution. You're actually receiving an employer contribution, in this case, 10% into ownership of the company. So as the company grows, as the company becomes more profitable, you get to benefit from that at some later date when you cash in your ESOP shares. Well, in addition to that, Mr. Broxley puts in 8% of his pay and his employer puts another 4% as a matching contribution. So there is indeed a 14% employer dollar figure going in, and some of it's going into a liquid 401k accountant that can be invested, and some of it's going into ownership of the company. Mr. Broxley, it certainly sounds like your company is trying to implement a plan where they want to incentivize people to be here and stay here long term and have an ownership stake. I would argue this is a very good example of some golden handcuffs. And so I think the question he's ultimately asking is, Brian, when we are measuring our current existence, the current life that we're living, the current job that we have, and we're measuring that against other options, other alternatives, how do we decide, is it actually worth leaving as the grass actually greener on the other side? Or are the situations sometimes too good that you can't even walk away from it?
- [08:34]
Brian Preston
Yeah. By the way, when you first gave this question, Megan, I thought you said Mr. Broccoli. Mr.
- [08:41]
Bo Hanson
Broccoli.
- [08:42]
Brian Preston
I'm so glad we had the name actually up on the screen because, I mean, for a few seconds it took me, I had to recalibrate the brain because all I could think about was broccoli. Okay, back on back in.
- [08:53]
Bo Hanson
So you heard the question, right?
- [08:54]
Brian Preston
I did hear the question. I mean, I will say 14% employer contribution is strong with some of it going to esom. So that's why I would definitely. This is a. A measure twice cut once type component because employers do this. You see it, we've seen it like Mayo Clinic doctors, all kind of people who will load you up because they want you to stay invested in their organization. And that's pretty noble. But you have to ask yourself, where am I going? Am I happy? Am I fulfilled? Am I living my best life even with a generous compensation? Structure. I would say if you're having doubts on that, maybe you want to create another plan. But that doesn't mean you execute the plan. It means you have to do the steps for it. You first have to take inventory of yourself. How marketable are you? How successful will you be if you go out on your own? He's already given us some indicator. He's got a background in public accounting.
- [09:52]
Bo Hanson
Sounds pretty marketable, right?
- [09:53]
Brian Preston
I'm going to come and give some specific thoughts on public accounting after I give the general stuff for everybody else and we'll nerd out for the accountants out there then I think you just got to know where you're going. This is the 3D glasses where you're talking about creating your own plan for the future. A lot of people think that when I say put on your 3D glasses, meaning you have a doo doo plan for how horrible can it possibly be? There's the down to earth, the reasonable plan, and then of course there's the dream plan. That's not just for starting a business. It's not for anything that's that exotic. It can be just for changing jobs or changing careers or any of the above because it's basically putting you in the mindset of looking at all the scenarios so you're not surprised and you can actually attack it. Now here's the specialized advice for the CPAs and don't send me hate mail if you work for a large CPA firm. I have a lot of. I mean, I graduated with an accounting degree, worked in public accounting. I have relatives because I try to convince everybody to become a public accountant because I think it is great training. But you will. Anybody who goes into public accounting, you're going to have a dilemma, career dilemma somewhere between years four and six is you either stay in public accounting or you probably need to kind of exit and go into consulting or do something else. I know quite a number of people that have stayed in and it's a great career. I mean, there is nothing wrong with it. But there is a lot of times with public accounting it's the issue of you only get paid when you're doing hourly work. And that sometimes can be hard. I mean, all my friends that stayed in public accounting and run large firms now, they just get burned out, they're tired. I mean, they make great incomes, they live a great life, but it's just sometimes they don't want to be on and it's so much so with how they get paid and so forth. So it's stressful. So it's not a negative towards accounting, but I think that fortunately this skill set is very marketable. Because if you think about what is the language of business, it is the financial statements. It's the income statements, it's the balance sheets, it's the cash flow statements. And guess who knows how to speak that fluently. It's the public accountant. There's a reason why so many CPAs run companies. There's so many reasons that you see public accountants that run real estate empires. It's because when you get really nerdy with the math, you have the foundation to be really successful in life. And that's why I try to encourage everybody who you know. I find out you have an aptitude towards math and you have an aptitude towards business. I usually try to talk people into it. And that's what this is. The same advice I'd give my niece who's working for a big six firm right now, but. Or big four. Big four, Big four, yeah. I'm old, so it's, it's one of those things. So I could just give you the exact same advice that I would give my niece.
- [12:46]
Bo Hanson
And I think if you're thinking through like, okay, how do I justify leaving? There are financial things that you have to think about. They're non financial, obviously. You talked about some of the non financial stuff like, are you, do you have a long commute? Do you not enjoy the people you work with? Do you not enjoy the people that you're working for? Those are all things that you have to factor in. But there are realistic financial aspects where sometimes it does make sense to stick it out in a less than ideal situation so that either you can get to the part of your career where you get to enjoy the fruits of your labor or to position yourself to be able to move somewhere else. We've seen people do this before where, oh man, I just, I'm in an industry and I just don't like this. I don't enjoy it, don't want to do the work, don't want to be part of this. They make a career shift and that made all the sense in the world. And then we see people who just say, man, I'm impatient, I don't want to wait, don't want to wait, don't want to wait. And they end up leaving an amazing opportunity simply because they were impatient or simply because the early stages got difficult. So in your circumstance, you have to assess which one of those is true. Should I continue to maybe do this? Maybe continue to save up, build up Begin with the end in mind to position myself to be able to make a career transition three, four, five, six years down the road.
- [13:58]
Brian Preston
Or.
- [13:58]
Bo Hanson
Or is now the best time to do that? And it's a weighing of both the financial pieces as well as the non financial pieces.
- [14:07]
Megan
Wonderful.
- [14:08]
Brian Preston
How much Am I getting beat up in the comments by any public accountants?
- [14:12]
Bo Hanson
No.
- [14:13]
Brian Preston
Any hate anybody or did anybody agree or does nobody care because maybe we don't have a. They're all working on tax planning right now.
- [14:20]
Bo Hanson
I'm about to say none of the public. This is almost tax season.
- [14:22]
Brian Preston
They're all doing compliance work right now.
- [14:24]
Bo Hanson
As actually in the chat right now.
- [14:26]
Megan
Maybe we'll see it later in the comments. All right, thank you so much, Mr. Broxley, for your question. Hopefully that gives you a lot to think about. If you're not.
- [14:35]
Brian Preston
I heard it again. Broccoli.
- [14:36]
Bo Hanson
Mr.
- [14:37]
Brian Preston
Broccoli.
- [14:37]
Megan
Broccoli.
- [14:38]
Brian Preston
Broccoli. By the way, it's not. You didn't say anything wrong. I just. My ears hear what they want to hear.
- [14:43]
Megan
It's because you were talking about carrots before.
- [14:45]
Bo Hanson
Carrot. Oh, can we have a vegetable in every question so far? Let's see. That'd be a fun game for me to play.
- [14:51]
Megan
Mr. Broxley, if you would like a Tumblr for asking a question, you can email winneroneyguy.com I did have broccoli last night.
- [14:58]
Bo Hanson
Funny enough. You won't believe this, so did I. My wife made this like new. This new dish I'd never had, she'd never done before. She crushed it. If you're listening, honey, you crushed it.
- [15:08]
Brian Preston
My wife went out with some neighbors last night. So it was me and Emory, you know, so we went to Cheddar's. Oh, I mean, that's a flash from Georgia because we never go to that place up here. And I got me a ribeye because, I mean, it was very affordable. My wife went to a steak restaurant last night and we compared and contrasted and I think she paid three times. What?
- [15:29]
Bo Hanson
Very different experience.
- [15:30]
Brian Preston
My ribeye Costa.
- [15:32]
Bo Hanson
That's hilarious. Oh, Megan, you're still here. Okay, yeah.
- [15:36]
Megan
This next question is from Sol Fu. He says, how does a future pension affect the Roth versus traditional calculation? The pension essentially puts me in a higher tax bracket at retirement.
- [15:50]
Bo Hanson
Man, that's a. That's a great question and not one that people often think about because the general line of thinking is that, okay, right now, if you're in a higher income situation, you may want to take advantage of pre tax contributions, build up pre tax assets because there's A good chance later in life you'll have the ability to convert some of those assets to Roth at lower tax brackets. And then even as you get into like required minimum distributions and that sort of thing, if you need to pull off of your Roth assets to supplement lifestyle, you can do that and control your tax situation. But Soul Food brings up a great question here. What if I'm going to have a pension and what if when I exit the workforce at 55, 60, 65, I'm going to have some sort of guaranteed income stream coming in? Well, that idea of me being able to convert assets later on in lower tax brackets may not be there. What if I'm someone, we have people in the chat all the time that, that say this, hey, you think that when you retire you're going to be in a lower tax bracket. But my experience is, is when I retire, because I did such a good job saving, I'm still in higher tax brackets. So there are people who do have that reality. So when that's the case, when that's the scenario, Brian, should you rethink how you do Roth versus traditional or are current day tax savings still super, super valuable and you take advantage of it while you can because that's what makes the most sense in the present time?
- [17:13]
Brian Preston
Well, I love this because this is actually a great kind of thought exercise when I talk about do a personal financial triage on exactly where you are with your finances. We all know that finance is going to be personal, hence personal finance. And for somebody who does have a pension, a lot of times when you have a job that offers you a very lucrative pension, your current income might be lower than if you were in a job that just offered the traditional defined contribution, not the defined benefit. Because that's always the trade off is because the defined contribution, like your 401ks, your employer is going to give you a match and then you have to fund it. But with a pension that's a defined benefit, they usually, because there's a premium on that, you might have a little bit lower income. So it goes through the exact same, you know, filter of if your income is lower now than it's going to be in the future, then obviously a Roth is outstanding because a Roth, if you, if you think about what's the why do we love Roth? You don't get a current tax deduction, you get tax free growth though that's the opportunity that you get with Roth contributions. So it makes complete sense. Somebody who has lower income now because they're in a very generous employer plan with a pension or something like that, but they're going to have much higher income in retirement because not only are going to have their retirement savings, but they're going to have this pension, they're going to have Social Security. You'll start stacking up all these things. And so you're going to be a higher tax break. By all means. You never go get the Roth conversion opportunity that you see a lot of people. However, there's a lot of people, high incomes now you're in a defined contribution plan and you do think you're going to be part of maybe the fire movement or fine movement and you're going to leave the workforce at 55. You're not going to start making required minimum distributions until your mid-70s. There is going to be a drop off of your earned income. You're not going to have any other cash flow. You're going to have three bucket strategy that's completely diversified so you'll be able to legally manipulate how your taxes work by that situation. If you're in a high tax bracket right now, but in a much lower in retirement, we want to go ahead and take advantage of traditional because the tax deduction now is much more valuable than it will be in the future when you likely can manipulate those tax rates easily. So Soul Food, I think that you're thinking about this, right? And the fact that yeah, if your pension is going to drive your taxes up in retirement, but you maybe you're in a lower tax rate right now and you also have decades of tax free growth that all those things are checks into the positive. For while Roth contributions are so valuable.
- [19:47]
Bo Hanson
Right now, the only other thing I throw in there is let's assume that you've projected this out and you think that you'll always be in the same tax bracket. Maybe you're in this working tax bracket and then when you retire you're going to be in the same tax bracket. Okay, well, if there's not that arbitrage, which way do I lean? I still think Roth makes a lot of sense because not only can Roth dollars grow tax free for your entire life without being subject to requirement minimum distributions at age 73 or age 75, they can also grow tax free for the first 10 years of your beneficiary's life. So it is a long timeline where if you can justify Roth and you're not walking away from a substantial tax benefit today to do so, I think Roth is great.
- [20:27]
Brian Preston
One final just word of caution though. Pensions, I know a lot of employers, you don't see as many pensions. A lot of governments have pensions and even governments have pensions because they were so underfunded for so long. They've changed the vesting for a lot of pensions from like five years to now. A lot of them have gone to where they might take 10 years to qualify. So just pay attention to what the vesting is on your plan because you don't really have anything until you know you've locked in some of those benefits. So read the fine print too.
- [20:58]
Megan
Wonderful soul food. Thank you so much for your question. If you would like a Tumblr for asking one, you can email winneroneyguy.com Brian, you did get some support in the chat for your public accounting comments.
- [21:11]
Bo Hanson
Look at that. Birds of a feather.
- [21:14]
Brian Preston
Well, it all depends on what your perspective is.
- [21:19]
Megan
The chat also says that they definitely prefer broccoli over carrots, in case you're curious.
- [21:24]
Bo Hanson
Who would.
- [21:24]
Brian Preston
I kind of like them both.
- [21:25]
Bo Hanson
I mean. Yeah, but if you had to choose one or the other, you're definitely going both.
- [21:29]
Brian Preston
I will give it this broccoli. I don't have to dip into ranch. I'm typically putting some carrots or, you know. Well, think about it. When you eat wings, have you ever.
- [21:37]
Bo Hanson
Dipped broccoli in ranches? Pretty fantastic also, but I don't.
- [21:40]
Brian Preston
I mean, I always just have steamed broccoli, like with a steak or something like that. Whereas carrots. The typical time I ate carrots, when you're eating hot wings and they're right next to the celery, you know, there's a.
- [21:51]
Bo Hanson
There's a place. This is a shameless plug. So if they're watching, they're gonna get, you know, this is free promotion for you. There's a little meet in three place here called Bishop's. Remember we used to eat there all the time and they'd always have this carrot souffle. You know what I'm talking about?
- [22:03]
Brian Preston
I think it was more sugar.
- [22:04]
Bo Hanson
And it was literally my kids.
- [22:06]
Brian Preston
I think you like the. I think you like the sugar.
- [22:08]
Bo Hanson
And I think that they love carrots because of that carrot souffle. And it literally just tastes like dessert because they put. They put marshmallows on. Have you been. Have you.
- [22:17]
Megan
I haven't. But that's so fun.
- [22:19]
Brian Preston
I mean, the first time I had it and it's. Once again, it's because you're. It's really a vector to get the sugar into your. Into your body. Because Thanksgiving for years. I love sweet potatoes. So you think you love sweet potatoes.
- [22:34]
Bo Hanson
No, you don't.
- [22:35]
Brian Preston
Still, I do. But it's really the melted marshmallows. It's the sugar that's poured. So when we ate this carrot souffle, I thought it was sweet potato souffle first time. And it was only until, like, the third time I ate it, they were like, no, this is carrots.
- [22:49]
Bo Hanson
This is carrots.
- [22:50]
Brian Preston
I'm like, oh, so it's the sugar is what I really like.
- [22:53]
Bo Hanson
Yeah. Hot take. Because we had to decide this at Christmas this year. You know, when I have. When it comes to sweet potato souffle, I don't prefer the marshmallows on top.
- [23:00]
Brian Preston
You like the pecans?
- [23:01]
Megan
Yeah, I agree. I'm not a big marshmallow person.
- [23:03]
Bo Hanson
Right. Like, I'll have a marshmallow s'more, but I don't want it on my vegetables. That's the way that I feel. General consistency.
- [23:08]
Brian Preston
Can you do both? Why do these things have to be an either or?
- [23:10]
Bo Hanson
See, that's. That's Brian Preston. That. That.
- [23:13]
Brian Preston
Because I love them all. I mean, let's throw it on there. Let's do. Let's put some pecans. Let's throw some marshmallows. Let's see what happens. There must be some chemical reaction that occurs because I'm not the first one to come up with that idea. I'm sure you do both.
- [23:26]
Bo Hanson
Nade does both.
- [23:27]
Brian Preston
Look at Nade.
- [23:29]
Bo Hanson
Thanksgiving at night. Rebel, I love it.
- [23:31]
Brian Preston
You're over 27, though, right? We're. All right. A little internal humor.
- [23:40]
Megan
All right, this next question is from Snow Crossfan. He says, I'm 45 and I have $44,000 in student loan debt and only $10,000 in retirement. Should I keep investing, prolonging out the student loan payments, or should I keep hitting them with all of my cash if they will be done in 18 months? So how do you decide? Student loans or retirement savings?
- [24:03]
Bo Hanson
Well, so this is a difficult question. So every. Every financial decision that we make has an opportunity cost associated with it. If I decide to buy X, that means that there's a plethora of other things I'm not buying. If I decide to spend X dollars, I'm making the decision to not save X dollars. Or if I'm going to make the decision between satisfying student loan debt, I'm going to go pay off this student loan debt, which means I'm going to decrease my debt balance. I'm going to save money and interest, or I'm going to go fund some other goal that I have, like funding retirement or saving for the Future, whatever. At 45 years old, you have to really think through, okay, what are my goals and what does the end of my plan look like? Am I building towards financial independence and is that a top goal that I have, or am I aiming to be debt free so that I can free up cash Fl and how would I prioritize those two goals? And depending on how you prioritize those goals as as well as factoring in the external factors like the interest rate on your student loan debt and the assumed rate of return you might have on your retirement assets, you need to make a determination, which one of these goals am I willing to and desire to pursue the most? And you have to make that judgment call because at 45, with $10,000 saved up for retirement, I would argue you're a little bit behind. But also having $44,000 of student loan debt, I would argue that it's hung around longer than we would prefer to hang around. So you've got to make some assumptions in your financial life to determine where will my dollars best be utilized to pursue the goal that is the most important to me?
- [25:41]
Brian Preston
So this question is, here's an easy way to put your mind in the way to find the solution. Please excuse my dear Aunt Sally. Little Pemdas.
- [25:51]
Bo Hanson
Little Pemdas.
- [25:52]
Brian Preston
If you think about it, if you were doing a math problem, you're trying to figure out, is it the parentheses, is it the multiplication, the division, the addition, what comes first? And that's exactly what Snow Cross is dealing with right now. The good news is we've created the all terrain system that just like it works in math, there is a financial system and it's called the Financial Order of Operations. If you go to moneyguy.com resources, you can download this if you really want to go deep, of course, my New York Times best selling book Millionaire Mission will kind of give you the origin story for all this. But here's the way Bo kind of gave you the things because there's variables that are going to determine what you need to do first. I don't love the fact that you're in your mid-40s with this much debt sitting out there. And that's why fortunately, when we get into the chapter on high interest debt, step three of the Financial order of Operations, we actually give you the details on what is high interest debt when it comes to student loans based upon it, and how that's influenced by age. So you can then figure out, is this something that needs to be part of step three or is this something I can defer down to step nine of the financial order of operations. So then you can get to work, you know, after the emergency reserves of step four into step five and get the Roth and so forth. But you just got a lot of variables that you're going to have to kind of figure out how you do that triage moment where you figure out where you are, what's going to be the best use for the next dollar that's in your army of dollar bills and then get to work and get serious. You know, look at 40 because he's 45 with $44,000 of student loan debt. These are things that you're fortunate that the guy talking to you, I'm older than that, so you're still young in my eyes. But we got to get to work and you got to be deliberate and don't let another day pass you by without attacking this.
- [27:43]
Bo Hanson
The Money Guy show is hosted by Bryan Preston and Bo Hanson. 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.