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Money Guy Show
My First Market Crash. Is This Time Really Different?
01:00:40
Ask Money Guy | March 11th, 2025
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- [00:00]
Rebe
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- [00:49]
Bo Hanson
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- [01:15]
Rebe
My first big market crash. But is this time really?
- [01:26]
Bo Hanson
I am so excited to talk about this, and I know what you guys are thinking. Okay, no. No way can Beau actually be excited to talk about a downturn, about a market crash. But I actually am. And let me tell you why I am. Because I feel like there are so many voices out there and there is so much negativity. I don't think that what you are being told is accurate. I don't think that what most of us are being told is going to be the best thing for our future selves. So I'm so happy that we have this platform where we can speak to that, where we can share the information that is actually valuable for you guys that will actually help you do money better. That's what we do every Tuesday morning here at 10:00am Central Time. I forgot what time we do it.
- [02:10]
Rebe
At Tuesday morning work.
- [02:11]
Bo Hanson
That's what we do. We want to load you guys up with answers to your questions. So right now we have the team out in the wings collecting your questions. So if you have something, maybe you're nervous, maybe you're concerned, maybe you read something, saw something, heard something, you just want to know our take on that. Or maybe how you should think about it as you navigate your financial life. We want you to get your question in the chat right now. And with that, creative director Ribi, I'm gonna throw it over.
- [02:38]
Rebe
I want to start off with kind of my question about what you're saying.
- [02:42]
Bo Hanson
I love it. You're sitting in the seat you get to call the show.
- [02:44]
Rebe
Because here's the thing. You know, I have been following the money guy rules for several years now since I met you and Brian. And I'm finally kind of starting to see some of those financial milestones, like, in my sights. Right. Like, it's. It's exc. Exciting. It's great. It's working. And so I. I have a feeling a lot of our money guy family is kind of sitting in that spot too. Right. And so now when the market starts to go down, it's starting to feel a little bit worse. Right? Because now we have something to lose.
- [03:14]
Bo Hanson
You actually have something to lose.
- [03:15]
Rebe
Because the first time, obviously, this isn't like my actual first. First downturn, first of money, though. Exactly. Like, when you are losing, like, for example, like, 3% on 100k hurts a lot more than 3% of 1k.
- [03:30]
Bo Hanson
That's right. Yeah.
- [03:30]
Rebe
For sure. I've had personal friends, like, very smart, savvy, like, wonderful, awesome people, like, tell me, oh, I cashed out, because I'm just tired of seeing that number go down. I'm tired of losing that money that I put in. Like, it's not worth it. I'll put it back later. And academically, I know that this is not probably the right move, but. But what are we to do? Like, I feel like there are other millennials, early 30s people like me, or just people who are following the foo who see these headlines pop up, see this unstable economy, and are like, okay, is this actually bad? This feels different. This hits different this time. What would you say to people like me and people who are sitting in this position with me today?
- [04:13]
Bo Hanson
Well, first of all, if you're an investor out there and you've seen the volatility over these past few weeks and the dollar value of the change in your accounts was significant and made you feel uncomfortable, Pause for a moment and just think, man, what a testament to how good I've been at building wealth. I actually have built up enough money now that when the market goes down, that when it goes negative, that when I lose value, it's painful, it's substantial. There is material behind that. That's a sign that you've been doing the things that you're supposed to do. So I love hearing you say, hey, you know Very first downturn, who care. I didn't have a lot of money, now got a little bit of jingle and it hurts. And I see the numbers. So what should I be doing and how should I be thinking about that? Well, I think the very first thing we ought to do is we got a level set with where are we right now? As of.
- [05:03]
Rebe
Yes. Is this actually bad? What is happening right now?
- [05:06]
Bo Hanson
Right now if you go scroll through social media, you turn on the news, you're going to hear market crash pending doom, the sky is falling. But in reality, as we sit right here right now, when you think about the s and P500 present day, it's about 8 and a half percent off of its all time high. So it's down about 8 and a half percent from where it was earlier this year. If you look at the year to date performance, we're down about four and a half percent. So this is not like oh my goodness, what's happened now that doesn't mean that we're at the bottom and that doesn't mean that we might not see more pain to come potentially. What it does mean is that realistically right now we're less than 10% down right now. We were talking in pre show. Do you realize that since like the 50s, right? This is like way, way back most years the intra year average decline in the stock market as measured by the s and P500 is about 14%. So even if you think about on average the S and P makes somewhere between like 9 to 11% per year. And in like 8 out of 10 years the market's up. And yet in every one of those years intra year market loses like 14% at some point in it. We're not even at the average right now. So right now where we sit today we're down like 8 and a half percent off of the high. But let's assume that this is the beginning and let's assume that okay, maybe things are going to get more difficult, more turbulent, more volatile. It's helpful when we think about markets in terms of okay, when in doubt I zoom out. Is this time really different? There's a great illustration we've shown a ton of times over the years just comparing historical bear markets to historical bull markets. Right. And what I think is absolutely fascinating is when you look at this, I'll describe this for those of that are out there listening on Spotify or out on itunes. It shows how severe the bull market was, meaning how much money was made or how severe the bear market was, how much money was lost. And then it also shows the duration. How long did it last? How long was the bear market? How long was the bull market? And what's fascinating is when you look at this, you can see that just before you even, like, dive into the numbers, the market is up a lot more than it's down. It just spends a lot more time up and down. And when it goes up, it generally tends up a lot more than it goes down when it's down. If you look at the average tenure, the average duration of a bear market, and this is back from 1942 all the way through the end of last year, the average bear market loss. Again, this is average. This includes, like, Great recession, everything, about 32%. Right? That's. I don't want to downplay that. I don't want to make that seem like that's insignificant. It's about 32% down, but the average duration is only about 11 months. So most bear markets, most downturns, most pullbacks don't even make it for a full year. So you think about that on one hand and then you contrast that to the average bull market. Well, the average bull market goes up 150% on average.
- [08:02]
Rebe
Crazy 100.
- [08:03]
Bo Hanson
And it generally lasts for over four years, 4.3 years Again, if you just measure the averages from 1940 all the way until now. So if you are betting on which side of the equation going to fall on, markets more often than not are up. And more often spend time in positive territory than negative territory, even if on a short term, it goes up and down, up and down, up and down. So the question you ask is, okay, well, if I'm a millennial, what do I do? Or if I. If this. This feels. How should I feel? Comfortable? How should I feel?
- [08:33]
Rebe
Right.
- [08:34]
Bo Hanson
Let me tell you what you don't want to do. I'm going to be very honest with you. I do not know what the market's going to do over the next month. And I know that's shocking. I know you guys come here because you think we have all the answers. I don't know what it's gonna. I don't know what's gonna do over the next six months or the next 12 months or the next 18 months, and nobody does. So if you have this mindset where, hey, you know what? Okay, I'm just gonna. I'm gonna sell. I'm gonna go to cash. I'm gonna sit on the sidelines. I'm gonna wait for things to get better. I hate to break this to you. You do not have the ability to do that. And frankly, I don't think that anyone has the ability to time the markets in that way. So what do you do? How do you focus on this? Well, if you're a millennial and you're a young person and this is, again, this is so counterintuitive, you should be excited. Okay, I know I lost money. Markets are down. It's painful. You should be excited because right now, if the market's going down, the market continues to go down. Every dollar that you put to work, every dollar that you invest, every dollar that you put into your roth, into your 401k, into, you're buying at a discount, buying at a discount, buying at a discount, buying at a discount. Warren Buffett says, you know, when it's raining gold, you don't go reach for a thimble, you reach for a washtub. You want to grab as much of that gold as possible. I started investing in 2007. That was when, like my investing career started and I started putting money in a Roth iron. It wasn't a ton back then, it was like 20, 50, 100 bucks a month. But I remember going through 2008, having.
- [10:05]
Rebe
A crazy time to start investing and.
- [10:07]
Bo Hanson
Then going through the first quarter of 2009 because market actually didn't hit the bottom until March Nint of 2009. And I remember every $100 going in, going in, going in. Well, if you Fast forward to 2010, 2011, 2012, and I look back at those contributions that I made, even though it would have been easier to turn off the automatic savings to keep that money to build up cash, whatever, I look at how much those contributions made, it was wild. And one of our content Rogers, I think Nick said if you were just, if you would have just invested in the S&P 500 on March 9th of 2009, bottom of the Great Recession, it was, what was it, Nick? Like 700 plus percent or something like that. It's insane. So what do you have to do? You have to stay level headed. You have to keep your wits about you. And we say always be buying. So if you're a millennial, a young person, my mind, my financial mind actually warps and I start thinking, man, are there some areas I can cut back? Are there some ways? You know, I'm already doing all the saving, already doing the 25% plus, but man, can I save a little bit more? Can I put a little bit more to work for me? Can I find some way to get more dollars going? That's for my young people, just now, very briefly, I want to speak to the other segment of the population because there are some folks out there who are saying, man, Bo, I hear you, but I'm not 30 anymore. I've been working for 30 years and I'm getting close to retirement and I'm getting close to needing these dollars. It's why we tell you that your portfolio allocation should change. So your allocation should look different when you're in your 40s and 50s than it did when you're in your 20s and 30s. And so if you've been managing that appropriately, when you see these big swings where the market loses 3% in one, hopefully your portfolio, because it's well diversified, does not have those same swings. And if you have been building up your cash position and you have that six month emergency fund, or if you're someone who's getting close to retirement, you have that 12 to 18 months of living expenses, or maybe even 24 months of living expenses. If you're in retirement, you know that no matter what the market throws at you over the next 12, 24, maybe even 36 months, you have liquidity to keep you covered so you don't have to make desperate, dire decisions. And you can give your money time to recover, your money time to revisit. But one of the things I would do at this point, I think downturns are always wonderful for all of us to do this. Assess how you're feeling right, like right now, if you're thinking, oh, I am losing sleep at night, I can't stop looking at my accounts, I feel nervous, I feel anxious, there's a really good chance that one of two things is happening. Either you don't understand what's actually going on. That's why we have this show. It's why we do stuff like showing you bear markets and bull markets and talk about intra year declines. It's why we do sort of those things so that you can be more well educated. Or the second thing that could be going on is you might be in a portfolio that's not a great fit for you, or maybe you've skipped some of the steps in the financial order of operation, then you need to take this time to go say, you know what, I'm going to get my emergency fund in place, I'm going to go bolster the steps before where I was at now so that no matter what the market does, no matter what the economy does, no matter what this environment I'm in does, I know that I have a plan that's gonna be great before the stuff hits the fan. It's gonna be great while the stuff is hitting the fan. And when I look back, it will have been great even after the stuff has done been flung by the fan.
- [13:30]
Rebe
So are you saying I should be so excited, so excited for this downturn?
- [13:36]
Bo Hanson
Yes. Because this is where for young people, saving and building, if you are under the age of 40 right now, you should be licking your chops and holy cow, I can't believe I'm getting this on sale right now. How can I max out that Roth? How can I max out that? Just say, how can I get more into my 401k? And I assure you there's a high likelihood that if you can do that and you have the wherewithal to do that, your future self is going to look back and as Brian would say, give you a big old sloppy wet hug. I don't even know what that means, but that's what your future self will do. If you can stay disciplined, always be buying, stick to the plan, and don't let yourself lose your mind. Even when it seems like the rest of the world around you is losing.
- [14:19]
Rebe
Its mind, it's a great perspective. If you hang out with them, they make you a lot less nervous about this kind of thing. So I'm really glad that you're here because we love talking about these topics, sharing our experience, sharing some good food for thought. And that's why we're about to answer a bunch of your questions, all about personal finance. So we've got a few queued up, but keep, keep them coming, throw them into the chat, and we will choose some to answer. So are you ready to dive in?
- [14:44]
Bo Hanson
Was that okay?
- [14:45]
Rebe
I just, I get so excited.
- [14:47]
Bo Hanson
I legitimately get excited about this and people like it's. But the market's down and I'm losing money and it's negative. And look for my clients out there who still listen this. I'm not excited that you're losing money. I'm not. I'm not like, oh, great, we're making less money. That's not a good thing. But I recognize it for what it is. It's an opportunity for pruning, it's an opportunity for reinvestment. It's an opportunity for rebalancing, reallocating, loss harvesting. There are things that you can do in this moment to take advantage of it as a financial mutant and for folks who are positioned to do that, man, this, These moments are the difference making moments. And it feels so crazy. I'm talking about it like, we're down 50%. We're down eight minutes. That's the other part. But if it gets worse, if it gets. If it gets more dire, if it gets more volatile, have the mind about you that I'm going to do this differently than my peers. I'm going to do it differently than the person who's freaking out and selling and going to cash, because I understand how these things work and I understand how real wealth is built.
- [15:49]
Rebe
Yep. No, I love it. We do have a question that has to do with the current market downturn to kick us off from S. And he says, with the current market downturn, is it opportunistic to front load some of the 25% savings instead of spreading it out evenly throughout the year? Thanks. And honestly, this is echoing kind of what you're saying. So thinking about it in the terms of, okay, you should shoot for investing 25% of your gross income. What do you think of that idea?
- [16:17]
Bo Hanson
So. So I said this earlier, and I will reiterate it for you. Sand S or S or S. And I don't know what the market's going to do in the next month, in the next six months, next 12 months. If you can tell what the market will do or what the market is going to do, I will tell you the absolute most advantageous strategy. Absent that we don't know. And this is what's really, really hard about this. It's hard to catch a falling knife, right, because you don't know where the bottom actually exists. You could accelerate right now, say, okay, I'm saving 25%, but I see an opportunity. So I'm going to front end load my savings. And that may look great unless the market goes down another 25% from here. Well, then you would have been better off not doing it. So when I have people who are trying to figure this out, who are trying to think through this, my first answer is, always be buying. For sure. We always want you to be buying. So I would not say front end load today so that you cannot save tomorrow. But if you have little, like, thresholds in your mind, you know what, okay, I'm saving 150 bucks a month. If I see the market go down 10%, I'm going to increase my 150 to 200amonth. I'm going to figure out how to do that, how to make. I don't think that that is timing the market. I don't think that's trying to game the system. I think that's just recognizing when there's opportunity. And then if the market goes down 20%, okay, you know what? I'm going to go from 200amonth to 250amonth and I can play those games with myself so that I'm getting more and more excited, even though the rest of the world is getting more and more frightened. I'm trying to be greedy when others are fearful and fearful when others are greedy. This is a great time to be able to do that. So I don't think there's anything wrong with accelerating your savings, but I would not rob from your future saving self to do that. So if you're saving 25%, it's the only 25% that you're going to save. Rather than trying to get too, too cute with it. I would stick to the plan. Stick to the plan. Stick to the plan. Because what I want you to do is waste all that dry powder today and not have anything left the rest of the year. Because it, it might, it might get better or worse. It might get worse. Which is better.
- [18:22]
Rebe
We don't know.
- [18:23]
Bo Hanson
That's when you are saving.
- [18:25]
Rebe
Yeah. No, I was just. I had the financial order of operations sheet up because that's exactly what I was thinking too. Hey, this is great. A copy of that moneyguy.com resources, you too can have this lovely copy of the nine steps of the financial order of operations what to do with your next dollar. So yeah, I think that as long as you're cognizant of the foo and not like really hosing the first few steps in order to front load, that I like. I think what you said was great.
- [18:51]
Bo Hanson
I love it.
- [18:52]
Rebe
All right, we're going to move on to KG's question next.
- [18:57]
Bo Hanson
Can I throw one other thing out there?
- [18:58]
Rebe
Yes.
- [19:00]
Bo Hanson
We don't know what the future is going to hold. Have I said that enough that we don't. We don't have a crystal ball. But here's what I do know and this I do know with crystal clear clarity. We are going to continue pumping out content that speaks to whatever's going on in the world around us. And the only way you're going to know about the content we're pumping out is if you are subscribed. So if you like this and if you want to make sure that you are aware when we have a new Making a Million episode Making a Millionaire episode coming out on Mondays, or when we have a new live stream on Tuesdays, or when we have a new mini show coming out on Wednesdays and when we have a long show Coming out on Fridays. The only way you're going to know about that is if you are subscribed to the channel. So if you're not subscribed, you should subscribe right now.
- [19:41]
Rebe
Absolutely. All right. Ready for KG's question?
- [19:45]
Bo Hanson
Yes, ma'am.
- [19:46]
Rebe
It says, I'm saving each year towards major expenses like a new roof. That's not an emergency fund item. How much is too much to save for things like a roof, a new ac, a new boiler, or other major repairs? That's a lot of high yield savings account cash.
- [20:03]
Bo Hanson
Sure.
- [20:04]
Rebe
So this is like the how much cash is too much cash question.
- [20:07]
Bo Hanson
Well, so, kg, let's think about this for a moment. What is the emergency fund there for? It's for emergency. Now, I have no problem if you want to think about having an ongoing maintenance budget. Like, okay, I know I might need, what was it, a new roof, or I might need a new ac, or I might need a new boiler. But odds are you're not going to need all those things at the same time. So if you have a roof and you're like, man, okay, this roof is starting to age and I know it's going to cost X to replace it, I want to just start saving a little bit extra into my emergency fund. Great. If you're doing that, does that also mean that you need to have more money allocated for the boiler and more money allocated for the major repair and more money allocated for the next car and more money out? Maybe not, because all of these things are likely not going to hit at one time. What will keep you protected is if you do have that fully funded emergency. Will you hold up the thing for me, Remy? Step four of the financial order of operations says that I want to have three to six months of my living expenses in liquid cash. That's the oh money. What you're talking about is not oh money. It's the O money. Like the oh, I got this thing that came up. So if you begin to save on that, that's okay. And that's if you want to continue building that. That's wonderful. Where I see people getting problems in this is. And this where people, they'll do the envelope system and buddy, their envelopes could fill up the post office. Right? Because they have an envelope for this thing and for this thing, this thing and for this thing and for this. What ends up happening is there's a real opportunity cost of that. If I have all of these cash dollars and buckets, Even though cash right now is yielding great, it's still above 4% for a lot of high yield money. It's not going to do what the broad markets are going to do. And so if you just have all this cash sitting on sidelines waiting for the oh, and you're not maxing out your Roth IRA and you're not maxing out your HSA, you're not putting money into your 401k, you're not building up that after tax account. I would argue that you're not stewarding your opportunity. Well, you're not taking advantage of what's available to you. So there's nothing wrong with doing a little bit of it. But I'd figure out what's reasonable. So. All right, let's do some. I'm going to do some quick math here and I don't put public math. So this is pretty, pretty dangerous. Let's say that your emergency fund, you figure it up six months, you need $30,000 in an emergency fund. Boom. That's my emergency fund, okay? If I'm going to have a roof repair or I'm going to have some other major expense, none of my baseline living expenses, $30,000 will cover me for six months. Maybe I'm okay if I let that fund creep up to like $40,000. There's no science, there's no math behind that. I just said maybe It's. What's that? 130% bigger than what I would have had otherwise. So that if I have a roof, okay, I can do the $10,000 for that. Or if I have the other repair, I can do that for that. Even if I have to dip into my emergency fund to do that thing. That's okay. That's what the emergency fund is there for. So I have 10,000. I got to pull five out of my emergency to do 15 for the new roof. Great. Do that and then go back to step four and start building your emergency fund up again. I just don't want to see you sitting on tons and tons and tons of cash when realistically that cash could be working for you. KG didn't say how old they were, but I would encourage kg go to moneyguy.com resources, check out our wealth multiplier tool, and just ask yourself, okay, this $1, should I put it in this contingency double emergency fund, or could I go have it multiply my wealth by some factor of 88 times over, 23 times over, seven times over, whatever your age is, and make that determination?
- [23:36]
Rebe
Awesome. Great question, kg. Thank you for asking it and thanks for being here today. All right. Zach's question is up next. He says our first baby is due this month, so congratulations. First of all, we are working on step three, paying off 37k combined on two car loans. Should we pause step three to move to step four and build up reserves? With the baby coming, both our jobs are in stable industry, which is good news. And I think this is a question a lot of people face, right? What do you think?
- [24:12]
Bo Hanson
That's a hard one. I mean, I don't, I don't. Look, we don't have stumpers around here.
- [24:17]
Rebe
But I will say, let me give the caveat we do at the money guy show. Say, like, there's not like some perfect, magical financial time for you to have a baby. Like, that's a life personal decision. You can make it work in a lot of different financial situations.
- [24:31]
Bo Hanson
Right.
- [24:31]
Rebe
On a lot of steps of the food. So you'll notice you're okay.
- [24:34]
Bo Hanson
Well, you hold the financial oracle. Yes. You'll notice baby is not in here. Like, there's not. It's not like I got to get past this step to be able to do that step. Like, that's a different type of decision. That's a life decision, not a financial decision.
- [24:46]
Rebe
But here's what I also was thinking. Like, if they're on step three, that means they have their deductibles covered. So, like, say you have a high deductible plan. Okay, you're probably going to hit that. Hey, you have that covered. Like, this is all good news, right?
- [24:56]
Bo Hanson
So here's what. The only thing. This is where, Zach, your question. You remember when you used to take tests and you'd read it, you'd be like, I know this, I know this, I know this. And the last thing they throw into that question, you're like, oh, they got me. Right? We have a bunch of, a bunch of our associates here studying for CFP exam. And so they're like navigating all that right now, trying to figure that out. Here's what he said. He said that he's on step three, but the $37,000 is on auto loans.
- [25:20]
Rebe
Right?
- [25:21]
Bo Hanson
Right. And so one of the things I would ask you, Zach, is when you really assess this, are your auto loans in fact high interest debt? Like, because sometimes we say, you know, it's a little nuanced based on your unique situation. If this were credit card debt, that's a different thing. If you're paying 22% plus of an annual interest rate on that credit card.
- [25:40]
Rebe
Debt, that hurts a lot more than knockouts.
- [25:43]
Bo Hanson
Easy, right?
- [25:43]
Rebe
Yeah.
- [25:44]
Bo Hanson
You knock out the credit card debt. Because if you have an emergency, you know what you're going to do? You're going to swipe it right back on the credit card. So even if you're building up cash, like, right. It's like robbing Peter to pay Paul. It's. You want to attack that that way? If you have $37,000 of auto debt, here's the first question I'd ask you. Okay? Let's look at your payments, and let's look at your cars. And are we inside that 238 cocoon? Like, are we in our 238 cocoon? Did I put. Do I have 20% equity in the car? Have I been financing it for less than 36 months? And does the car payment not exceed 8% across both of them? 8% of my monthly gross income? If that's the case and you determine, okay, yeah, I've got an 8% car loan, but I'm in my 20s and, man, 8% stinks. And it's high. Ish. But maybe it's not high E for me, especially if I'm in 23 8. I don't think there's anything wrong with beginning to build up cash in step four of your emergency fund. But you have to determine, is the car debt actually high interest debt? Because when you have a baby and look, you've got a gaggle of kids now, right?
- [26:47]
Rebe
Yeah.
- [26:47]
Bo Hanson
There are expenses that you just don't expect. Like people like, oh, I gotta save her for the baby because I'm at the hospital, Bill. Yeah, that's part of it. But then you gotta get the diapers and the butt paste and this binky and that binky. And you try all the bottles and you get this thing and that, right? And you're like, holy cow, where did all this money go? If you could have a little bit excess cash and you can have that emergency fund, you can have that money built up. It just gives you the. Because, Zach, this is your first. This is your first baby. And. And look, we've both been there. It's not easy. It's wonderful. But there's going to be a stress that comes on. When I remember for me, when they gave me my. My first daughter, when they gave me that kid and said, here, you can take this home with you. I said, you are insane. I. I have no business. Taking this baby at the hospital is wonderful. The nurses knew what to do, and they'd come and they'd help, and it was great. And there's this stress, like, oh, wow. I'm in charge of this person. If you can do things as you navigate, like build up cash, like have an emergency fund, like have some reserves, so that that's kind of one less thing you got to think about. It's just going to allow you to focus on the main thing, which is, hey, figuring out how to be a new parent. Figure out how this new family circumstance that you're walking through works. So I would, so I took a long time to answer the question. I would figure out, are my. Are. Is my, are my auto loans, Is my auto debt actually high interest? Is it inside the 238 confines? If the answer is no, it's not defined as high interest based on my situation and it is inside of 23 8, I do think it's okay to begin building up some cash. If you're 37,000 is in credit card debt, you got to just knock that out, knock that out, knock that out, knock that out. Because your credit card, until you get it paid off is also your emergency fund, unfortunately. And far too many Americans find themselves in that spot.
- [28:48]
Rebe
And I also think it's worth noting, like, you're kind of also acknowledging the foo is not necessarily a straight line. We talk about that a lot.
- [28:55]
Bo Hanson
Do we have that thing? Can we pull that up?
- [28:56]
Rebe
We might have that slide. So if we do, we're pull it up. But like, especially if your baby's due in like a month and you're like, man, I would just really feel better if we put this, this X amount of dollars aside. Okay, do that for two or three months and have a deal that, hey, but by the end of that three months, we're getting back and we're aggressively paying off the cars, you know, like there's nothing. That's what real life is.
- [29:21]
Bo Hanson
I love it.
- [29:21]
Rebe
You know, so it's not like you're totally breaking the fu by doing that. And in fact, the foo is what it will keep you on track, that you won't just indefinitely stop that. It's going to like allow you to take that two to three month break because of life circumstance and then get right back on track and really not miss a beat.
- [29:39]
Bo Hanson
So I love it.
- [29:40]
Rebe
I think that was worth noting. Okay, that was a really good question. Thank you for sharing, Zach, and congratulations. We're excited for you. As Beau said, it's not always easy, but we're a big fan of babies and kids around here.
- [29:51]
Bo Hanson
I have a question.
- [29:52]
Rebe
Exciting stuff.
- [29:53]
Bo Hanson
We have a poll, we have a poll maker. Y'all have poll makers over there just with our financial me. Because obviously, like, stuff is going crazy. We talked about what to talk about. We want to talk about the market and the volatility and stuff. I want to know if our people are freaking out just because, like, are our financial mutants, like, here are the options. Yep, I'm freaking out. I don't like what's going on in the markets right now. Nope. I'm excited. I see this opportunity. Or three. I'm still trying to figure it out. I don't know which one. I would just be curious because here's what I want to believe. I want to believe that we are. And we. I'm saying this, financial mutants, we're a unique breed. We are a unique subset of the population that just sees the financial world differently. So I'm thinking they're going to be like, yep, I am. So I recognize this as an opportunity. I'm excited. But I'm just curious. So I would like to know what our financial.
- [30:43]
Rebe
We'll have to keep an eye on that. We're going to do another question and then we'll check out the results of that poll. But Sarah's question is up next. She says, I'm 43 and my husband is 47. We have our 401ks and IRAs, 100% in stocks. I plan on leaving them that way, but would love to hear your thoughts. And so would I.
- [31:04]
Bo Hanson
Sure. Okay. 100% stock portfolio. What that means is that you are at the whim of what the markets are doing now. When you say 100% in stocks, this is where I got to get a little nuanced. Do you actually mean that you have 100% of all those assets in stocks, Meaning I went and bought Nvidia and I bought Tesla and I bought Apple and I bought Home Depot and I bought. Fill in the blank. Fill in the blank. Fill in the blank. Fill in the blank. Or is what you're saying, hey, I've just got it all in equities, meaning I've got all S&P 500 and I've got all, you know, whatever. I don't know the answer question. I would tell you, here's what we believe in here and this is what we think makes sense when it comes to prudent investment management. We think that diversification makes a lot of sense even if you're going to invest in quote, unquote, all stocks. On the equity side, we like diversifying our equity exposure, meaning S&P 500 is wonderful, but we also like small cap stocks and we like domestic equities, but we also like international equities. And we also like things like real estate. Maybe you're investing like real estate investment trusts or that sort of thing, like publicly traded real estate indices. So there are ways you can be all stocks and still be diversified. Now, you said you're 43 and 47. You are not old, but you are not in your 30s either. And so one of the questions I would begin to ask you, like if you were coming to me as a client saying, hey, here's my portfolio, what should I do? I'd say, okay, first of all, let's talk about your risk tolerant capacity. How do you guys view risk? What's your personality? Are you guys aligned? Is one of you a cowboy and one of you grandma or vice versa? How do you guys individually look at risk? And does this portfolio make sense for both of you? So does it match your risk personality? And then I would ask, does it also match your risk capacity? When do you think you're going to need this money? Are you planning on retiring at 55? At 59 and a half? At 60? Is this something that inside the near future you may need these dollars? If so, I would argue that you should potentially be on some type of glide path. Maybe I should get an aggressive portfolio because I'm going to live well into my 90s. So some portion of these dollars has to pay for me for the next 50 years. But some portion might be needed in 10 years or 15 years. And as such, I should have a mix inside my portfolio of risk on assets. That's the equity stock piece, and then risk off or risk reduced assets. And if I put a solid mix together, then what I begin to focus on as an investor at this stage of life is not just how much money I make. So often people are like, return, return, return, return, return, return. How much can I make? How much can I make? How much can I make? Our opinion is that's the wrong question to be answered, the wrong question to be asking. The question that you should be asking is, how much money do I get to keep over the long term? Meaning that when the markets are up, if I have an aggressive allocation but well diversified with risk on risk off assets, then I should be able to grab a big chunk of that upside. But in times like right now, when the market is volatile, when I see down volatility, I'm not out there flopping with the market, I only have a portion, a fraction of that downside. Well, if I can get a majority of the upside and a fraction of the downside, and I can do that consistently through time, then I'm going to likely be able to build towards my ultimate financial goal. So is an all stock portfolio right for you? I don't know. I don't know you, Sarah. My bent, my bias would be we like, well diversified portfolios and we like to think about return on a risk adjusted basis. So if I don't have to be out there taking all of the risk and I take some of that risk off the table and still have a similar long term trajectory, long term rate of return based on the way that I've constructed and allocated my portfolio, a lot of people find themselves in a similar situation to you, Sarah. This is one of those areas where if you're like, I don't know, I, I've always been aggressive, I've always invested in stocks, I've always been equity heavy. I don't know how to adjust or how much to adjust or where to adjust. This is a great time where it might make sense to take the relation to the next level to think about. Man, I've only ever managed one portfolio. How wonderful it be if I had a team or an individual I could work with who's managed hundreds of portfolios, who've seen people that weren't just 43 and 47, but they were people that were 33 and 37 all the way until they were 53 and 57. And how did that look and how did they adjust and how they navigate. So perhaps you're in that situation where it might be time for spot check, someone to give you a second set of eyes. We call that here the abundance cycle. You've grown to the place where, man, I just wish I had a co pilot, someone to help me steer this ship. Well, we'd encourage you to consider giving us that shot. You can go to moneyguy.com work with us. Aboundwealth.com, work with us and our advisor, one of our advisors, would be happy to chat with you.
- [35:59]
Rebe
Absolutely. No, that was a great question, Sarah. Thanks for sharing and thanks for being here during the live stream today. We do have some of the results of that poll. Beau, you said, are you, are we, are you sweating the dip? That's how we said it. Like, are you feeling nervous right now? 57% said no. I am so excited.
- [36:18]
Bo Hanson
Awesome.
- [36:18]
Rebe
So those are some financial right there, right? 30% were very honest and said not sure yet. Okay, fair enough.
- [36:26]
Bo Hanson
All right.
- [36:26]
Rebe
And then only 12% said yes. And if that's the case, I'm Glad that you were here today. I'm glad that we're talking about this for everybody's benefit, but a good chunk of people, I think, are with us and needed that conversation.
- [36:39]
Bo Hanson
For the 42% of folks that were not the. I'm so excited. That's what we're here for. Yeah, we want to be. Look, man, I don't know if you do this, but you go, why am. I'm talking way more than I normally do? Because I'm on this soapbox. I don't. I'm happy with scrolling right when you're scrolling through your socials, when you're checking your news, when you're looking at all this stuff and it's just like, bad, bad, bad, negative, negative, negative, unrest, unrest, unrest. I hope that we get to be that beacon that's like, hey, this is just part of the process. It's gonna be over. Okay? That's what we do. This is how we build wealth. We look different than the world around us when it comes to how we make financial decisions. And that's why, you know, it's. I make this weightlifting joke all the time. People say, okay, in the beginning, people always ask you, why, oh, why'd you do that? Why'd you do that? Why'd you do that? Why'd you do that? But in the end, people always ask you, how. How'd you do that? How'd you do that? How'd you do that? Being a financial mutant is no different. So you're gonna make decisions today different than your peers make. And in the future, people are gonna look at you, be like, man, how'd you retire early? How did. How are you not freaking out when the world around you is falling? You're like, well, because I understand it. I'm a financial mutant. And they say, what's that? You say, well, let me tell you. Go to moneyguy.com and check it out.
- [37:58]
Rebe
It's true. I love it. Okay, ready for the next question?
- [38:03]
Bo Hanson
Yes, ma'am.
- [38:03]
Rebe
Speaking of, IB has the question. It says, what is the suggested thresh of how vested RSU should make my portfolio before I am over concentrated? I have 50k and they make up about 20% of my total portfolio. The rest of my portfolio is made up of ETFs and mutual funds. I have no debt. I'm 27, and I'll have about 70k more RSUs to vest. Vest this year. Okay. That was a lot of info.
- [38:34]
Bo Hanson
Yeah, yeah. So this is IB this is an incredibly common question. We have a lot of folks Work for companies where part of their compensation is just not in the salary that they make, but they also get equity incentive compensation. It might be in the form of options they might be able to participate in, like an employee stock purchase plan. In your case, there are RSUs, restricted stock units. Hey, I get granted this thing. If I work here for a certain amount of time, I get to unlock these things, the stock that then becomes mine. And so ib's question is essentially, how much is too much? Well, let me. I'll answer that question first. Our goal when it comes to any concentrated equity exposure is we really don't want it to exceed more than about 5 to 10% of your total portfolio value. So there, if you think about a number, what's my goal? 5 to 10%. However, it's not always easy to get there. You just told me that you have $50,000 of vested RSU's that represent 20% of your portfolio and you're about to get $70,000 more. That means, I'm doing some quick math here. It sounds like your exposure is going to go from 20%, probably closer to like 40% or somewhere in that ballpark. A lot of people get on this incentive treadmill that we call it, where there's new stuff coming in, new stuff coming in, new stuff coming in, new stuff coming in. And you might not be able to sell it quickly enough to get your exposure down. Or you may be saying, hey, I really, I work for this company and I believe it and I like it. Or there's an expectation at our company that you have to have at least this much exposure or, or, man, when I was granted these RSUs, when they vested, I didn't do anything and the stock is shot up. And now I've got these huge embedded gains. So that's why we tell people when it comes to RSUs and incentives and options, it's always great to have a plan in place to figure out how you're going to navigate that. Now, you mentioned the vested RSUs. For those of you that don't know when you get some equity exposure, there's two different ways you get it. Right? There's the vested. I get it, it's mine, I can sell, I can do what I want. There's unvested. For ib, I would say, hey, you also don't just consider the vest. You need to look at the unvested portion. If you have a lot of unvested. Right now he has 70,000 unvested. It sounds like that's going to vest this Year. I think you can be aggressive in how you divest your exposure because even if you're going to be aggressive in divesting that exposure, it's going to replace itself, it's going to be replenished, it's going to come back. Now you want to do it in a tax wise way. So that's why, like right now, when you're looking at the other parts of your portfolio and you're seeing what you have, this is a great time. When the market has some volatility, maybe I go do some loss harvesting. Hey, I sell some of my mutual funds, sell some of my ETFs, or maybe when I sell these RSUs, I'm able to sell some at loss positions that aren't going to have any adverse tax consequences and I can bank up those losses and I can use those losses against future potential gains. If you're someone who's like, oh, I don't know what to do, man, I like my company. I like the stock. It's done well, it's rewarded me. How do I navigate this? Whenever we don't know the yes, no, right, wrong answer to make or decision to do, we like to remove emotion from the equation. And so one of the things I would tell IB is if you're thinking about how to go from 20% down to 10%, maybe set yourself a timeline. Hey, every month I'm going to sell $5,000 of my vested RSU's. I'm just going to just like I would dollar cost average into the market. I'm going to dollar cost average out of the market. So if the company stock keeps going up, great. I'm making more and more and more money if it goes down, hey, it's okay. I sold last month. Capitalize. Sold last month, Capitalize. Sold last month, Capitalize. And that way you remove the emotion from and you have a systematic, pragmatic, prudent way to keep that exposure reined in, if you can. It's a long way of say, 5 to 10%.
- [42:21]
Rebe
Thank you for the summary. No, it's all good. I think that context was necessary. IB I hope that you found that helpful and really appreciate you asking the question. Yamileth has a question next. It says, I'm 30 and a doctor in a peds fellowship.
- [42:36]
Bo Hanson
Oh, sorry. My sticky notes. Y'all ever have these sticky notes?
- [42:39]
Rebe
Oh, yeah. He's having a crisis. Because they like, they open the two different ways. It's like the accordion style.
- [42:46]
Bo Hanson
If you were curious. Team. I don't like them.
- [42:48]
Rebe
Good to know we'll fix that. Maybe we'll probably forget, but maybe we'll fix it. Okay, are you ready for Yamileth's question? Yes, Yamilith. I'm pretty sure I'm saying that right. But maybe not love it. The question says I'm 30 and a doctor at Impedes Fellowship. I started with debt of 164k and three and a half years later I'm down to 58k at a 6.3% rate. And there's no employer match either, he included. Does the food change in long term debt payoff for four plus years with no investing. So this is that question where you know a lot of our doctors, lawyers, like people with these expensive long degrees. Does the food change for them?
- [43:39]
Bo Hanson
Okay, so here's something that I. Well, Yamileth, you've done something pretty amazing. So it didn't say. Did Yamath say when they came out of school?
- [43:52]
Rebe
I'm 30, he's 30. Yeah. So that gives you. So not too long and in three and a half.
- [43:57]
Bo Hanson
So three and a half.
- [43:57]
Rebe
And he said he's been paying it down for four plus years and then three and a half or he's planning to. Yeah.
- [44:02]
Bo Hanson
From three and a half down to 58. Does the food change and long term debt pay off four plus years with no investing. Here's one of the questions that I would ask. So 6, 6.3% if you've, you've ever gone and listened to R. Because I'm assuming this debt was student loan debt. That's a safe assumption. Right?
- [44:20]
Rebe
Right.
- [44:21]
Bo Hanson
So we think that the way that you determine, because where I imagine you're at right now is you're working through the financial order of operations. Ribi, will you hold the thing up for me?
- [44:31]
Rebe
Absolutely.
- [44:31]
Bo Hanson
And you're in step three and you're trying to figure out, okay, is this student loan interest, high interest debt or is it not? And now at 6.3% and 30 years old, you're kind of like right at that threshold. You're right at that threshold where you've gone from 164 to 58. Now, ah, here's, here's the problem. You're 30 now, so you've turned the page. And I would argue that someone in the 30s looks different than someone in their 20s. So where you have been aggressively paying off the student loans from 164 to 58. I don't know if that's what I would have said to do. Because if you go to moneyguy.com resources check out a wealth multiplier. And I just want you to go look at the wealth multiplier for a 27, 28, 29 year old. Every dollar that you can put to work for you, every dollar that you can plug into that wealth multiplier calculator will show you what it can turn into. Well, every dollar you put on the student loans is going to save you 6.3% in student loan interest. In my opinion, there's a really good chance that when you invest, when you put that money to work, you can likely do better than that for some of their 20s. But now that you flipped and you're in your 30s, we have these thresholds like if your student loan interest here, then you should pay it off and here, then you should pay it off and here you should pay it off. Well, now that you're in your 30 and your student loan interest is above 6%, I'd say, okay, well, now maybe it does make sense to begin paying that off. But I don't want you missing out on time. If you're a doctor and you have, I'm going to assume you're a pediatrician. It sounds like a high income. I'd love for it to not be an either or, I'd love for it to be a both because you have kind of missed out on that time in the 20s. I don't want you going another four years knocking out this debt, satisfying this debt, not getting money working for you, because I would have preferred you had some of that money working for you from 27 to 30. So the way that I would write this ship is I put together a timeline in my mind. Okay, I know I've got to pay another $58,000 off. I'm going to do that in three years, four years, five years, whatever that that timeline is. So I'm going to calculate that, I'm going to amortize that. I'm a figure the number and that's what I'm going to do to satisfy this debt, to knock out this not quite high, not quite low interest debt. But then I'm going to save like a banshee. I'm going to get aggressive building my resources because now at age 30, I'm probably seven, eight years behind my peers who've been saving for almost a decade. And I recognize that while I didn't get to capitalize on those early years of saving and building, what I get to do now is because of my big shovel, I get to make up for lost time and I get to hit that 25% savings rate and start saving aggressively for the future. So I would start thinking about not postponing, putting off investing, but how can I tackle both of these at the same time so that I can get the ball rolling on my wealth building journey?
- [47:33]
Rebe
Yeah, no, that was really good. Good thoughts. And yeah, I don't think the food changes, but there's like he had. There is a unique circumstance there. There is a higher income and higher debt and other opportunities that go right along with the food. Okay, we're gonna move on to Joe S question next. Next. It says, I've been saving for my wedding in September. Congrats. It's in September of this year. And it's invested. When are you supposed to sell to go from invested to a high yield savings account? And I might even go farther and say, when should you invest money that you're saving up for a big expense and when should you not?
- [48:18]
Bo Hanson
All right, Joe, buckle up.
- [48:21]
Rebe
Here we go.
- [48:23]
Bo Hanson
When it comes to investing, we want you to be investing dollars that you feel very confident you can walk away from for five years, right? Like we want. You give 60 months. Like, I don't need this money in the next 60 months. I'm gonna go away with it again. I don't do public math, but if you were getting married in September and right now, today it is March, we are not 60 months out. So when is the right time to free up that capital we are always going to subscribe to? One in the hand is more valuable than two in the bush. You've heard this common expression before. Money that you have today, you go ahead and lock in. You know you have it. You know you have it ready. Because here's what we don't know between now, March and September, we don't know what the market's going to do. Market could continue to fall, could continue to go down. We could see a big bear market. There could be a recession. We could go down 20%. Well, what if you're, you know, you got that money invested, you're waiting, waiting, waiting, and you know what you've saved? I've got, okay, I've got this $30,000 for a wedding, and then all of a sudden we have a 20% downturn from now to then, and that $30,000 turns into $24,000. Is that good math? I do that math.
- [49:33]
Rebe
I don't do public math either, but you get the idea.
- [49:35]
Bo Hanson
It turns down 20%. And now you're like, well, man, I needed 30, and I've only got 24, I got to make up 6,000 and then I have to go pull from my emergency fund. I have to go this. So I am of the opinion if, you know, you need that money in September and this is my compliance guy would say, hey, don't, don't give specific investment. This is not specific advice. In my experience though, I would consider selling today, I would consider going ahead and getting that cash because I don't know what tomorrow. The best time to have sold would have been last week or the week before, two weeks before or 60 months before so that I wasn't subjected to the market. And it's gonna, it's gonna be painful because I'm telling you to sell right now and the market's off 8 and a half percent from its high when it's down 4 and a half percent year to date, and I think it's down again today, that's painful. But not knowing the future, it could be more painful. Money in the hand today is more valuable than the unknown of what it could or could not be tomorrow. So I don't want you investing money that you're going to need in the next five years. If you know you have that wedding coming, you know it is pending, I would really consider going ahead and getting that capital available today. And then everything that you save between March and September that you're saving for that specific goal, don't invest it, don't put in the market, put in cash. High yield savings. Because if you put in high yield savings, it's still making like 4% right now somewhere roughly around there. That's a great rate of return on short term money. That, that's okay. It's much better than like negative rates of return.
- [51:06]
Rebe
Can I flip this just slightly to get your other perspective? So what if you decide you don't need this money for five years, so you do invest it, but then you still want to use it for something like, oh, my kid's wedding or something.
- [51:20]
Bo Hanson
Yeah.
- [51:20]
Rebe
How would you sell out of that? Because like what, what if Joe did invest it for five years? I'm not 100% sure.
- [51:27]
Bo Hanson
When the clarity around when you need the money begins to become critical. Crystal clear. Right. So, oh, you know, I've got, I've got daughter, my oldest daughter's 10 wedding. Nowhere in the near future. Nowhere in the near. You hear me boys? Nowhere in the near future, but one day it will be. And so, okay, I can save and I can dollar cost average and I can build up for that and I can save and save and Save. But okay. She gets significantly out of college and she decides, I'm gonna. I'm gonna get married, right? I'm gonna get married. We're gonna settle. Okay. This she's with. Okay. They're starting to get serious. Okay, great. It's beginning. Like, it's going in that direction. Okay, all right. Hey. I'm thinking the guy comes and is like, hey, Mr. Hansen, I want to marry your daughter. I'm like, you're knucklehead. You're not good enough for. But okay.
- [52:13]
Rebe
Oh, my goodness. I'm enjoying the scenario playing out.
- [52:17]
Bo Hanson
So then I began to have some clarity. I started saying, okay, it looks like this is going to happen. Looks like we're going to have this long. Okay. Just like I was dollar cost averaging into the market when it begins to take shape. And I know that we're two years out, three years out, I might begin dollar cost divesting out of it. I begin just slowly selling until I know the date. And then once that date is set, I'm like, okay, I know I need X amount for the wedding. I'm going to sell that today. I'm going to have that sitting in cash, and I'm just have it sitting in a high yield. This is the same thing. If you're not saving for a wedding, you're saving for a car, for a vacation, for that next home, for whatever that thing may be. If you have an abstract timeline that's more than five years out, by all means, invest dollar cost average. But as that timeline begins to get clearer and clearer and clearer, narrower and narrower and narrower, then you begin to start freeing up cash. Cash.
- [53:01]
Rebe
Cash.
- [53:03]
Bo Hanson
That's right. Liquidity is going to be your.
- [53:06]
Rebe
Did you say two to three years, though? You realize how unrealistic that is, right? Like, your daughter starts dating, you're like, oh, well, she's like three years out, and then she comes to you and she's like, we're ready to get married. We're going to get married in three months.
- [53:18]
Bo Hanson
What are you going to do? Just so y'all know. And hey, sweetheart, if you're listening to this, I think it's time that you hear this. I'm going to advocate for, like, the whole elope thing. I'll be like, hey, we can do the wedding, or dad will just pay for us to go off somewhere and we'll go to something and we'll all go have a trip and make an experience out of it.
- [53:39]
Rebe
Maybe she'll do it.
- [53:40]
Bo Hanson
I just think that makes sense.
- [53:41]
Rebe
Honestly. Maybe you should do it. If you're watching this, bear, bear.
- [53:43]
Bo Hanson
If you're hearing that, consider it. That's what daddy wants to do.
- [53:46]
Rebe
Or not. I don't know. All right. That was a good answer, though.
- [53:50]
Bo Hanson
Did you feel like, did you get the offer? Did your parents offer to do that?
- [53:53]
Rebe
Kind of.
- [53:54]
Bo Hanson
Didn't take them up. See, no one ever.
- [53:56]
Rebe
And see, there's a little part. There's a tiny part of me. It's like, maybe I should have, but we had a really nice day at our wedding, so I'm not mad about it.
- [54:04]
Bo Hanson
Weddings are wonderful. I love them. I would not go into debt for them and I would not sacrifice.
- [54:08]
Rebe
I agree with that.
- [54:09]
Bo Hanson
My future well being to pay for that. This is my hot Take this. This part you can write in pencil if you're taking notes. Everything else was pinned at this point, but this is pencil. I would not go into debt or like, sacrifice future financial well being to have some, like, big, wild, extravagant wedding. I think you can bedazzle your basic wedding also.
- [54:28]
Rebe
I completely agree.
- [54:30]
Bo Hanson
Thanks for coming to my TED Talk.
- [54:31]
Rebe
You're welcome.
- [54:32]
Bo Hanson
Second time I've used that joke today. Content true.
- [54:35]
Rebe
Yeah, it really, really kills around here. Okay, Want to hit another question?
- [54:40]
Bo Hanson
Yes, ma'am.
- [54:41]
Rebe
Huey has a question. It says, I follow your advice on choosing between Roth versus traditional 401k, but I am nervous about being overweight in one of those categories and giving myself fewer options in the future. How should I think about this?
- [54:57]
Bo Hanson
Well, if Brian were here, he'd tell you there's no such thing as being overweight. And Roth, too much Roth. But what happens most of the time is someone says, okay, guys, I listened to your rule on how to do pre tax versus traditional, by the way, as a way of reminder raves, this is the way we say it. If you take your marginal tax rate, so marginal is just the next dollar that you earn, what will be taxed at? You take your marginal federal rate, add it to your marginal state rate, combine those two. If it's below 25%, there's a good chance you should be doing Roth because you're in a pretty low tax bracket. If you add that marginal federal, you add that marginal state, it's above 30%, there's a good chance you should be doing traditional because you're saving like every dollar you put into your account can save you 30 cents in taxes, like a 30% imputed rate of return. So what we see a lot of times as people get to high earning, whether it be an individual household years pretty early on and they start maxing out their traditional 401ks and putting money in these tax deferred vehicles. And they can't do Roth because maybe they make too much money or maybe they don't have the right account structure to backdoors. And so they build traditional, build traditional, build traditional. And so Huey right here says, man, I just, I'm nervous about being over concentrated in one. And look, so I get that I would ask how old you are because like if you were in your 30s, I don't think you're gonna have, you're likely not gonna have a problem because there's a really good chance later on in your life when you retire, when you go to start pulling money out, depending on what your other income sources look like, depending on how you're following the food, depending on if you're building up at least 2 of the tax buckets, the pre tax bucket and then the after tax bucket, you get to pick and choose what you pay in taxes. We did a great Making a Millionaire episode where we showed them, hey, based on your income right now, guys, even though you have this large seven figure portfolio, we can manipulate your income in such a way where we can begin doing Roth conversions this year. Like we can pay taxes to convert pre tax assets to Roth and low tax brackets. That money is going to then become Roth and those Roth dollars are going to go tax free into the future. Into the future. I would argue for someone like Huey, there's a really good chance that you're going to have opportunities to do that later on. So again, back to this little analogy. One in the hand is worth is better than two in the bush. If I can get 30% plus tax savings today, well, man, I'm going to go do that, max out my 401k, get that 30% tax savings. And with that tax savings, then I'm going to go fund a backdoor Roth. If I can, or if I can't do that, then I'm going to go fund my after tax brokerage account and it's actually going to allow me to save more money for the future and give me more opportunities in the future. So I wouldn't, I would do the best you can. And then as you work through the food, as you begin defining what's the finish line, what's the end date look like, what's the end goal look like? You'll begin building the buckets based on your personal strategy, not just the generalized guideline strategy that we try to walk you through with the.
- [57:58]
Rebe
That was good stuff, Huey. Thank you for asking the question. Being here on our live stream today. And you know, if you're joining us for this live stream, you're probably a financial mutant. You probably see money a little bit differently and we would consider you either a millionaire or a millionaire in the making. And I just had to mention that is exactly why we have made that new show, Making a Millionaire. New episode out every other Monday, which means we have another one coming out next Monday.
- [58:26]
Bo Hanson
Next Monday, coming up.
- [58:27]
Rebe
Coming up. So I just wanted to.
- [58:29]
Bo Hanson
You have the thumbnail.
- [58:30]
Rebe
There's one. We're excited about this one. You know, we've tried to get some different financial situations in the chair across from you and this one's a really fun one. It's a different one, different situation than we've covered so far. So I just wanted to throw that out there. We made it for you. We hope these conversations are really helpful and you can kind of see yourself in some of these situations and hopefully gain a little bit of confidence and ideas for your own personal financial life.
- [58:58]
Bo Hanson
I love it. We love the whole idea. Just again, I got the hot seat. So why don't I just say, you know, we love that we do this show where we get to walk you through the abundance cycle. You get to learn, learn, learn, learn the idea of making a millionaires. We want to show you how that, how we actually apply it. When you learn these things that we share on the show, how does this get applied? What's this look like? Like in real life case studies, real life scenarios. So if you've not checked out Making a Millionaire, we'd love for you to do that. If you've not checked out our Wednesday mini shows, we'd love for you to do that. If you've not subscribed to the channel, we would love for you to do that. So that, you know, every time we put brand new content out because we believe that there is a better way to do money and we want you to own your financial future so that your financial future does not own you. I'm Bo Hanson here with creative director Rebe Money Guy Team out. The Money Guy show is hosted by Brian 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.