Reacting to Viral Money Clips with Erin Talks Money

Summary

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Money Guy Show Episode Summary

Episode: Reacting to Viral Money Clips with Erin Talks Money
Hosts: Brian Preston & Bo Hanson
Special Guest: Erin of "Erin Talks Money"
Date: August 25, 2025

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Overview

This episode brings together Brian, Bo, and Erin to break down and react to a series of viral money clips circulating on social media. The trio discusses key financial concepts—like compounding interest, the psychology of saving vs. spending, the real definition of wealth, homeownership myths, and strategies for reaching financial independence—with humor, personal stories, and plenty of practical advice. This is an accessible, engaging discussion aimed at demystifying wealth-building and helping listeners approach financial decisions with more clarity and confidence.

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Key Discussion Points & Insights

1. Compounding and Consistency: The Roth IRA Scenarios

• The hosts kick things off by analyzing a viral clip where different people approach a $10,000 bonus differently—some invest once, some consistently, others spend it.
• Key Message: The single most powerful strategy is not just one-time investing, but continuous, habitual investment. Compounding works magic over decades.
• [01:15] Bo Hanson:

  "I wish there was a third option... someone who said, 'I'm gonna do my Roth this year, and then I'm gonna keep doing it every single year thereafter, because then imagine what those numbers would have been.'"

• [01:23] Brian Preston:

  "Compounding interest, really is that eighth wonder of the world."

2. Systematizing Success: Automate Your Savings

• Automating investments is highlighted as a game-changer, with personal anecdotes about friends who gave up after early negative experiences.
• [02:09] Brian Preston:

  "Automate. Automate and automatic for the people."

3. The Psychology of Retirement and Spending

• The next viral clip discusses why even wealthy people struggle to spend in retirement due to decades of frugal habits and guilt over withdrawals.
• Key insights include:
  • The difficulty of "flipping the script" from saving to spending
  • The benefits of practicing retirement behaviors before full retirement
  • Advocating for phased retirement to ease psychological transitions
• [03:01] Bo Hanson:

  "It is not a comfortable thing. It's why we tell all of our retirees... start practicing what retirement is going to look like."

• [04:12] Erin:

  "I also like advocating for a phased retirement... if you have some income coming in and you're getting comfortable spending a little bit more with a lesser income, I think that makes it easier."

4. High Income vs. Wealth: "The Poor Rich"

• A viral take on how high earners in high-cost cities are sometimes “poor rich”—living paycheck to paycheck due to lifestyle inflation and high taxes.
• The group stresses that net worth matters more than high income; the key is saving and investing efficiently.
• The myth that you have to live in urban, high-cost areas to succeed is challenged—remote work and geographic arbitrage are now options.
• [05:28] Bo Hanson:

  "There's a difference in being rich and being wealthy. It's the folks who can turn their income—whether it is high or not—into wealth through... maxing out your 401k... index funds, doing it consistently over time."

• [06:36] Erin:

  "Just make sure you put your money to work for you. I know regardless of your income."

5. Teaching Kids About Money

• Reaction to a heartwarming clip of a mom teaching her young daughter about saving, interest, and investing.
• Guests recount their own childhood money experiences, emphasizing early hands-on exposure to money concepts.
• [08:56] Brian Preston:

  "For this mom to sit down with her daughter and not only model good behavior, but also start sharing some of those building blocks... this mom daughter duo is maximizing that time."

• [09:15] Erin:

  "Use money with your kids so they can actually touch it. Because nowadays everything is so digital, they can't get a concept of it."

6. Financial Independence is Not a Number—It's a Lifestyle

• JL Collins offers inspiration: true financial independence comes from living below your means, not income size. Examples range from athletes who lost fortunes to everyday earners who built wealth.
• [10:05] JL Collins (clip):

  "Independence is not a set number. It's a different number for everybody."

• [11:29] Brian Preston:

  "Villains and victims never win... you have to figure out how you can be the hero of your own story."

7. Homeownership Myths: Buy vs. Rent in Retirement

• The team responds to a creator’s viral opinion that you don't need to own a home to retire comfortably—there are pros and cons, and flexibility can be an advantage.
• Key theme: There's no one-size-fits-all formula; success depends on your personal goals and situation.
• [15:02] Bo Hanson:

  "You do not have to own a home. There's nothing says you have to be a homeowner. Although home ownership is great..."

8. The Snowball Effect: Compounding Milestones

• Fast-tracking wealth: The journey to $1 million isn’t linear; after the first $100K, compounding accelerates growth.
• [16:39] Brian Preston:

  "The reason these facts are true is because of the power of compounding... as your nest egg grows, it does more and more of the heavy lifting."

9. How to Retire Early: The Three Key Factors

• Know your annual spend, aim for a high savings rate, and boost income—but avoid lifestyle creep.
• [19:14] Erin:

  "I would say also plunging for a little bit more longevity... because the life expectancy... is actually in your 80s, so assume you might live a little longer."

10. Decision Paralysis and Putting Money to Work

• Some listeners "freeze" after a windfall, afraid of making bad investment choices—guests laugh over a humorous Dave Ramsey + Mario Kart clip but ground the convo with advice: Doing nothing is also a choice, and not a beneficial one.
• [22:51] Erin:

  "You live below your means, you invest. I feel like the saying is, you cannot screw this up."

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Notable Quotes & Memorable Moments

• Bo Hanson on investing consistency: [01:15]

  "Then imagine what those numbers would have been..."

• Brian Preston on compounding: [01:23]

  "Compounding interest, really is that eighth wonder of the world."

• Brian Preston’s advice to beginners: [01:45]

  "Don’t max out your Roth all at once. Start doing it $500 a month or whatever you can... trick yourself into being consistent."

• Erin on kids and money: [08:08]

  "I started investing at 8... My first stock I ever did was Campbell Soup."

• JL Collins (clip): [10:05]

  "Independence is not a set number. It's a different number for everybody."

• Brian Preston: [17:00]

  "You might be further along than you think."

• Erin (on setbacks and stay-the-course): [18:16]

  "Put your blinders on and run your own race. Don't pay attention."

• Brian Preston: [19:44]

  "Guys, do better... start at the 5 to 7%, but then every time you get a pay raise, let 60% of that pay raise go towards increasing your savings and investments..."

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Important Timestamps

• 00:24 Viral Roth IRA decisions & compounding power
• 02:09 "Automate and automatic for the people"
• 03:01 The spending side of retirement: Guilt and psychology
• 05:28 High income ≠ financial independence—difference between rich and wealthy
• 08:10 Childhood money lessons and parental influence
• 10:05 JL Collins: Financial independence for people at all income levels
• 13:18 Homeownership: Decision-making in retirement planning
• 16:39 The compounding journey to $1 million
• 19:04 The three key levers for early retirement (spending, saving, income)
• 22:36 Mario Kart meets financial paralysis: Why action matters

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Final Takeaways

• There is no "one right way" to build wealth: automate your savings, focus on habits, and customize your approach to fit your life stage and values.
• Compounding is your best friend; start early and be consistent.
• Investing confidence is built through action, not perfection—make informed choices but avoid paralysis.
• Your path to financial independence is a function of your lifestyle, not your income alone.
• Teach the next generation about money—simple lessons early on make all the difference.
• Homeownership is not mandatory for everyone; flexibility and personal goals drive the decision.
• The true wealth-building journey is less about chasing arbitrary milestones and more about clarity, self-awareness, and smart behaviors carried out over time.

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Erin's sign-off:

"I'm only on YouTube and Erin Talks Money." [23:12]

Brian’s closing note:

"Go to moneyguy.com and then take advantage of all our free stuff moneyguy.com/resources." [22:59]

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Transcript

[A]

Welcome back, moneyguy family. We got a special react for you today with Aaron from Aaron Talks Money joining us today. I can't wait to see what the content teams put together.

[B]

Brent, I am so excited that we have Aaron with us today. Thank you so much for being here.

[C]

Thanks for having me. I'm so excited.

[B]

That's my line. You can't say that's my thing.

[C]

I'm borrowing it for your show.

[B]

There we go.

[A]

Perfect.

[B]

All right, let's see what clips we have today.

[D]

Wow. I got a $10,000 bonus at my first job. I'm going to take 6,500 and put it in my Roth IRA and then never contribute another DOL until I hit 65.

[A]

Wow.

[D]

I also got a $10,000 Bonus at my job, but I'm going to use it to go on vacation. I could die tomorrow. I have the rest of my life to invest. Well, I guess I should start saving for retirement now. I'm going to put $500 in my Roth IRA every year until I hit 65. What about you? I don't know. I haven't touched my Roth IRA since I put that 6500 in it when I was 21 years old. I've been investing in other things, but not my Roth. Well, I've put $10,000, my Roth IRA. Let's see what we got. $25,000. Okay. What do you have? You only put like 6,500 in there when you were kids.

[A]

Let's see.

[D]

My Roth IRA is currently worth $178,000. Wow. I made $170,000 completely passively and it's tax free. I should have invested sooner.

[C]

Well, I mean, the end part. Yes, that's right.

[B]

I wish there was a third option of the person who said, you know what? I'm going to do my Roth this year, and then I'm gonna keep doing it every single year thereafter because then imagine what those numbers would have been.

[A]

I always love. This is compounding interest, really is that eighth wonder of the world. I would encourage everybody if now discovering this concept. Go to moneyguy.com resources play around with our wealth multiplier because it is truly amazing to see what small decisions become. Just give them enough time.

[C]

Make sure you're not contributing once.

[A]

That's it. That was the part.

[C]

Once is kind of painful.

[B]

It was one of my biggest gripes when I had friends growing up. I'd say, hey, guys, you got to do a Roth. Got to do a Roth. Got to do a Roth. And this was like 2007, 2008, they did it one year and then great recession happened and they're like, oh, this investing thing is horrible. I tell people now, don't max out your Roth all at once. Start doing it $500 a month or whatever you can. So that way you trick yourself into being consistent. And if you can do that over the long term, it gets real exciting.

[A]

Automate. Automate and automatic for the people.

[B]

I thought you were about to start singing. I thought he was about to break out in a song right there.

[A]

Here's why people with more than enough.

[B]

Money still struggle to retire. Tyler.

[A]

I'm a former financial advisor and portfolio manager. If any of this is helpful, check out my free newsletter by clicking the.

[B]

Link in my bio.

[A]

Number one, they can't shift gears. After decades of saving, they physically can't spend without guilt. It feels irresponsible even when the math says they're fine. Number two, they fear the first withdrawal.

[B]

That first dollar spent feels like a cliff. It's not.

[A]

It's a long, slow stroll downhill and.

[B]

You packed a very nice picnic.

[A]

Number three, they forget that health has a clock, too. The best travel years are often in your 60s. Don't save every trip for your 80s.

[B]

Unless you're really into cruise ship oxygen tanks.

[A]

That's your thing.

[B]

That's awesome.

[A]

You do you. This is spot on.

[C]

I would also add Travel in your 30s and your 40s and your 30s.

[B]

So not even just wait till retirement.

[C]

Yes. Like save a piece, but also make sure you're still living today.

[B]

I think it's wild that so many people think, oh, I'll, I'll never have trouble spending money. But it's not true. For financial mutants, folks out there that are really good at building wealth. You spend your entire working career saving, saving, saving, saving, saving. Then all of a sudden, this magic thing is supposed to happen that as soon as I retire, I. I'm supposed to have comfort with spending. It is not a comfortable thing. It's why we tell all of our retirees, before you actually pull the plug, before you actually get there, start practicing what retirement is going to look like, what you're going to spend money on, what hobbies you're going to pursue. And if you do that, you're likely to set yourself up for success.

[A]

Well, I also think it's so interesting. For our entire working career, a lot of your spending behavior is tied a lot to your income. And then when you transition to now where you're living off of your net worth, it just does some crazy things. Mentally that it's hard for financial mutants and people who've always been rewarded for saving to now flip the script and not only now start consuming what they spent decades building, but also realize, oh my gosh, I don't have the backdrop of additional income coming in. This is one of my favorite things as a financial advisor. I love telling people, not the no that the Suze Orman made famous in the 90s, it's more of the yes and let's do more because I want you to live your best life.

[C]

I also like advocating for a phased retirement because for us who have trouble spending, saving is easier. I think if you have some income coming in and you're getting comfortable spending a little bit more with a lesser income, I think that makes it easier.

[A]

Typically to make a good living, you have to live in an urban center in a blue state where the taxes are high. If you're making two or three hundred thousand dollars in San Francisco or in New York, you're probably paying somewhere between 40 and 45%. If you're really killing it and making kind of over a million dollars, which sounds like a lot of money and it is a lot of money. You paying over 50% in taxes and then you roll in the expenses of living in those cities. A lot of these people I would deem as the poor rich and that is they make a lot of money, they don't have a lot of money. Wealth isn't about how much you make, it's about how much you save. Think about forced savings plans. A house can be a forced savings plan. Finding the money for a down and building up equity in your house, any sort of tax advantaged vehicle at your employer max out. And some are offered even if you're self employed. Low cost index funds, ETFs. Don't delude yourself that you think you can pick stocks better than anyone else. You can. You want to find someone great at it, who's really cheap. That's called an index fund or an etf. Man, Scott covered a lot there. Yeah, I mean there was. We were all over where you have to live, how you're going to invest. I mean he's just like, he tried to pack it all in.

[B]

Well, I love where he started. There is a difference in being rich and being wealthy. There's a difference in folks who have a high income and a high net worth. And the folks that are actually able to be financially independent aren't necessarily the folks who just have high income. It's the folks who can turn their income whether it is high or not into wealth through some of the strategy said maxing out your 401k plan, saving to your employer sponsored plan, using index funds, doing it consistently over time.

[C]

And I think today's world is a little bit different in that we have remote work and you can have a great job and live in a low cost of living area.

[B]

Right.

[C]

So if you can keep your savings.

[A]

That was the biggest thing I was thinking because I think Scott first set up a premise that I don't completely agree with that you have to live in an urban area with massive taxes to be successful. We deal with, we have an entire client base that's all across the entire United States. And there's a lot of very successful people that recognize hey, how much I pay in taxes is just as important as where I'm investing the money. And so they have found ways to not only expand how big the shovel is or their income, but also trying to minimize the taxes and then putting those index funds so that they can really maximize their wealth building opportunity.

[C]

I think his biggest point was just make sure you put your money to work for you. I know regardless of your income.

[A]

Low cost index funds.

[C]

Yes.

[A]

That spending savings and your investing, which last time I put towards your account or something like zero. No, your investing account actually has $3,737. Look at that. That's a lot. What do you have to do? I have to. To put them in either spending savings or. And how much do you get? Eight. Why? Because I'm eight. I need to pay your interest, pay you 10 cents for every dollar in here. So how much in savings do you have? 1001-201301-31131 times $0.10 equals $13.10 paid to you for keeping your money in savings. Having your money in savings is good when you're working towards other goals so that you can earn the interest. 10, 11, 12, 13. With that money you can choose to do what you want to do. You put it back in your savings and keep, let it keep growing. You can put some in investing, some in spending just like you do your normal allowance. Okay, I'm going to put one in here. I'm going to put the $2 in here and put $10 investor $10 in investing. It's going to grow a lot. Okay, now with your allowance, two in there. 1, 2, 3 and 3 and 3. 13 and investing. Do the math. How much I have now?

[C]

3,750.

[A]

Wow.

[C]

This might be my childhood. I started investing at 8 and like, this is kind of like how we would do things.

[B]

Is that how it went where you. Did they sit you down?

[C]

We didn't have like the envelopes. I didn't get paid interest from my parents. But I walked into the bank, which at the time was Old Kent, and I would look at my deposit slip, but we got to go through the paper and I would pick my stocks. My first stock I ever did was Campbell Sou Soup. And then I did Disney.

[B]

How'd you decide on Campbell soup?

[C]

Ah, because I liked the Campbell.

[B]

Because I liked Campbell suit. I love that.

[C]

Did you see the cartoon kids ever? They got little chubby cheeks.

[B]

I love it. What I think is amazing is parents put so much pressure on themselves. Oh, I got to teach my kid about money. And I got to tell them it does not have to be more complicated. If you can start with age appropriate behaviors early on. Okay, when I get money, I'm going to give, save, spend. Okay, when I save, this is where I put it. This is what happens and this is how interest works. And if you get kids excited about that and recognizing that, man, if I don't consume this, actually let it work for me. And that takes hold at the age of 8 years old. Man, the future is bright.

[A]

That video warmed my heart for this mom to sit down with her daughter and not only model good behavior, but also start sharing some of those building blocks. This mom daughter duo is maximizing that time and I just, I love it. Like I said, heartwarming. Incredible. Good job. Well done, mom.

[C]

My two cents is going to say use money with your kids so they can actually touch it. Because nowadays everything is so digital, they can't get a concept of it. So doing something like this and speaking to your point of who has investments in college, because this was my exposure and I started my Roth when I was maybe like 17 or 18. Anyone I dated in life, I was like, do you have a Roth ira? You don't? We should be setting one up for you.

[B]

I love that.

[C]

So even if the relationship didn't work out, they had a Roth.

[A]

That's great. Pay and afford financial independence.

[E]

Independence is not a set number. It's a different number for everybody. So I've known people who've made millions of dollars a year and they will never be financially independent because they have constructed lifestyles that cost every bit of that.

[A]

And then they broke rule number one.

[B]

They spend more than they earn.

[E]

Right? I mean, Mike, damn near Mike Tyson made something on the order. One of the all time great boxers, an incredible athlete. Made something at $400 million and it just bled through his finger. He didn't know how to handle it. He was surrounded by sharks taking bits and pieces out of it. Tragic, tragic story. When he lost, it wasn't because he didn't do. Wasn't making enough money. The same token, I've known people who've never made more than $50,000 a year who have achieved it. You know, I have another book called Pathfinders, which is a hundred stories of people who have found the simple path to wealth, Reddit, and have implemented it from all around the world.

[A]

Yeah.

[E]

One of the things I love about that book is some of the stories in there are from people who started from incredibly humble beginnings. I mean, there's a guy in there who was a migrant fruit picker. When he started, he was. When he was writing his story for us, he was worth half a million dollars. There was a woman in there who said, you know, when I was a kid growing up, the rich people, they were the ones who had flush toilets. Right. So I love those stories because there's a pushback in this country. And you touched on a little bit earlier when you were talking about making, say, $46,000 a year, there's a pushback that says, oh, you know what, that sounds great, but that's only for people with really big incomes. That's only like for tech, tech people and that kind of stuff. And that's not my experience.

[A]

Man, oh man, JL Collins is a just massive influence on a lot of people. You can see why he's so persuasive. I think what he's also hitting at. There is something I even covered in my own book, Millionaire Mission, is that villains and victims never win. So it's, it's really. You have to figure out how you can be the hero of your own story. No matter what situation you're put in, whatever your income is, you can do it if you just understand the power of time, understanding on living on less than you make that. That was a powerful clip.

[B]

Yeah. I love how he started talking about lifestyle is so important. I think the number one reason a lot of people don't reach financial independence is because of the Joneses. Because we're trying to keep up with some artificial lifestyle of someone else and not our own true personal lifestyle. We have the same experience at our firm where we'll have folks who have never made over a hundred thousand dollars a year and they are financially independent, doing everything they want to do the way they want, on their terms. And we have other folks who've been incredibly successful with a lot of zeros that are not there yet. And it's all dependent upon lifestyle. So if you can figure out early on in your life, what's the dream life that I want to live and what are the things that matter to me and what are the things that I actually find value and you can work towards that goal. Financial independence does not escape you no matter where you are in the socioeconomic class.

[C]

And I think wealth just magnifies who you are. If you're good with money and you make more money, you're better with it. You make better decisions. If you are bad with money or make some not so stellar decisions, you make bigger mistakes with bigger zeros.

[A]

It is always important to remember it's better to be rich than to look rich. And I think that that's the big part. If you, if you're very familiar or have come across JL Collins content, he really does walk through the path of like the title of the book, simple Path of Wealth. And it is those basic things of living on less than you make and just maximizing all those opportunities.

[D]

You need to own a home to retire. This comes up a lot because I don't plan to buy a home anytime soon and I probably won't have a paid off home by the time I retire. And I get a lot of comments saying I'm never going to retire if I'm a renter. I think the reason people feel so strongly that you can't rent in retirement is because honestly, for a of people it has been true. Homes have been kind of like a forced savings. We all have housing costs. Might as well get equity and appreciation while you're at it. People are also really worried about the rising cost of rent eating into retirement savings. So while I agree for some people you may need to own a home to retire, there are a lot of things that get missed in the conversation. Like the opportunity costs of a down payment versus investing, interest rates, maintenance costs, flexibility, location. Ultimately, retirement is just a number. And that number can include rent or mortgage. It's just going to be a larger number. There's no rule that says you have to retire at 65 with the paid off house. And for me, buying a home would actually push back my retirement timeline because instead of investing aggressively, I would have to save for a down payment. My monthly housing costs would increase drastically if I wanted to live in the same location, which would mean I'd have less money each month to invest and I'd have to keep an Even beefier emergency fund for home repairs. It's just important to remember what's true for you might not be true for another person. And most people out there with really strong views are just projecting their own experiences. It all comes down to what you want out of life, when you want to retire, what you want your lifestyle to be today and in retirement. If you want to live in the same place forever or move around if you plan prefer a city or a rural area, so many factors will come down to what makes sense for you financially. So no, you do not need to own a home to retire and it actually might be holding you back.

[C]

I think there's very good points there. I don't think you need to own a home to retire, but I also think when you're 20 or 30 and saying, oh I I'm not going to go into retirement with a paid off home, you don't know what your life is going to look like. At 60 or 70, you don't know when you're going to retire. Life's a little unpredictable.

[B]

I love that. I think that homeownership is wonderful and it is a great way to to build wealth. Now homes in and of themselves are not necessarily wealth builders. They're use assets, but they're use assets that do generally appreciate in value. But in order to be financially independent, you do not have to own a home. There's nothing says you have to be a homeowner. Although home ownership is great and we have a lot of clients who spend their entire working lives as homeowners. And then when they retire, they decide to be renters because it gives them maximum flexibility. It allows them to go where they want and do what they want and really own their time. And there's nothing wrong with that.

[A]

Every few years the Federal Reserve releases their data on net worth. For the typical American, sadly, the only way it's been increasing really over the last decade is through increased equity and homeownership. Everyone who's thinking about retirement, you have to build up assets, start saving and investing. The earlier you start, the better. Get that pebble rolling down the hill with a small decision today to start saving and investing for the future and then you will own your life that much sooner.

[C]

So whether you're renter or saver, invest, love it.

[B]

If you are someone who's thinking about buying a home, we have tons of great resources. You can go to moneyguy.com resource you check out our home buying hub. We have a home buying checklist, home buying calculators for most Folks, it is the largest purchase that you ever make if you choose to make that purchase. So you want to make sure you do it right if you are going to do it. Here's a crazy investing statistic. Once you have $100,000 invested, you're 25% of the way to getting $1 million. And once $300,000 invested, you are more than halfway to reaching $1 million.

[A]

The reason these facts are true is because of the power of compounding.

[B]

As your nest egg grows, it does more and more of the heavy lifting.

[A]

To grow the total.

[B]

This is why going from zero to $100,000 invested takes about eight years, which.

[A]

Is a quarter of the total time.

[B]

But going from 900,000 invested to 1 million only takes about one year.

[A]

So if your portfolio is less than.

[B]

A million dollars, you might be further.

[A]

Along than you think. Man, couldn't say it better. And I love the angle that 300,000 is actually 54% of the way because that's presented a different way than most people think. Because we think 50% of the way is probably 500,000. No, you're. Because the power of compounding, it's just spot on.

[C]

Is there anything that feels better than when your portfolio is doing more of the work than you?

[B]

What's wild? And if you want to play this again, we have a compound interest calculator. You can go play with this. Go to moneyguy.com resources. It's amazing what you can if you give yourself long enough time. How little work early on can lead to big, big, big numbers. If you were to increase how much you save and see how fast you can get that 300,000. What's amazing is now you don't just say, okay, how close am I? How far am I along to a million? But how far along AM I to 2 million, 3 million, 4 million? It gets really exciting really, really fast.

[A]

And do this for me. Lean forward and promise me you're not going to quit in the first 10 to 15 years just because the market can goes down. That's part of the process. It's a feature. It's not something that's bad that's happening. Don't give up. Because I think the problem with most people, you see that stat, you get excited. But there's a whole lot of quit that happens because a market downturn or something in life happens. You have to stay consistent to let the process do the magic.

[C]

I always say, put your blinders on and run your own race. Like, just don't pay attention.

[B]

The average American retires at age 64.

[A]

But the life expectancy of an American is merely 77 years old. And most of our lives we're taught that when we reach our 60s, that's when we can retire. But you can retire early if you know these three things. Number one, how much you spend. A good rule of thumb is to take your spend per year and multiply it by 25. That means if you want to spend $40,000 per year in retirement, you need 40k times 25 or a million dollars of a nest egg. And that's going to let you withdraw from it as it appreciates in value from investments. Number two is your savings rate. The more you save, the faster you can retire. Because if you can live on much less, you don't need as much money. The average American Savings rate is 4.5%, which is abysmal. We should aim for higher. And number three, your income. The more income you make, the easier it is to retire.

[B]

But you need to ensure that you.

[A]

Aren'T blowing your cash on things not within your means as you get paid more. It's pretty strong. I mean, I agreed with every one of the things that Humphrey just shared.

[C]

I would say also plunging for a little bit more longevity because the life expectancy of someone in their six 60s. Well, if you make it to your 60s is actually in your 80s, so assume you might live a little longer, but spend and save.

[A]

That's great. I'm the oldest guy here, so I really love that.

[B]

And I think that 25 times is a great rule of thumb if you're retiring around normal retirement. But if you are someone who is retiring much earlier, you want to factor that in because your money needs to last a whole lot longer. But everything he said, I think was spot on. If you figure out those three things, you really can set yourself up financially.

[A]

The other big thing is just he said the average savings rates around 5%. Guys do better. I mean, there's a reason. I know we say 20 to 25% and a lot of you are probably right now starting out and you're saying that's aspirational. I get it. Start at the 5 to 7%, but then every time you get a pay raise, let's 60% of that pay raise go towards increasing your savings and investments. And before you know it, you'll wake up and you'll be saving and investing 20, 25% of your income. Just make sure you're doing something something, because I feel like so many people set it and forget it in the wrong way. Instead of, you know, setting it, forgetting it. With positive habits, a lot of us are setting and forgetting the positive, but only at a much smaller portion, and then letting lifestyle creep just control the rest of their life.

[C]

And if you increase it whenever you get the bonus or Even just, like, 1% a year, you're not going to notice.

[B]

You won't even notice.

[E]

Okay, and so you've got 250,000 sitting in the bank.

[A]

Yeah.

[E]

Why?

[A]

Which. Yeah, exactly. Because I. I sold a business, and.

[E]

For a lot of money.

[A]

So I've got that money sitting there, and I. I want to admit, invest it wisely, but I don't want to make any wrong decisions.

[E]

Okay, well, I mean, nobody.

[A]

Nobody wants to make wrong decisions.

[E]

So wait a minute.

[A]

I'm doing something wrong here. So somebody's genius. Okay, I'm gonna put this. The calculator, because I'm Do a little.

[E]

Bit of math here and try to.

[A]

Bravo. There we go. Yeah. So you need, like, $8 million. Content team. I don't know where y' all found that clip, but bravo. I mean, it took me for a split second. I'm all into Dave talking and this gentleman's problems, and I'm like, oh, wait a minute. Because Dave looks like. So, like, he was just in. What was going on on that pad. I was like, that is when you play Mario Kart. You're like that.

[B]

It's not that intense to the call.

[C]

And I'm just like, I hope Dave wins here.

[B]

So I think it's interesting, a lot of people, this guy said, hey, I got $250,000.

[A]

Good old.

[B]

Somebody had to listen to it. I got 250 grand sitting in this account. Oh, it's not working for me. What Dave is saying, hey, you got to have a bit. There's a big number you got to get to. You need to take that $250,000, put it to work so that it can work for you. Because saving is only half of the equation we have to do is we have to save the dollars. But then.

[A]

But I don't want to make any.

[B]

Wrong decisions so that it can compound through time so that one day you can reach financial independence and play Mario Kart as much as your heart desires.

[C]

I agree with both you and Dave, but I was watching Mario Kart.

[A]

I was, too. I mean, all I remember is that it's like Mario kart and then $8 million. That was what I got out of that video. So y' all would have to play it again for me to actually give advice to that gentleman. Bravo. I mean, I love it. Context was way off, I'm sure. But whoever did that, genius. I love it, man.

[B]

I love these videos. Right? Because a lot of people are saying, hey, building to financial independence, making wise financial decisions doesn't have to be all that difficult. It's incredibly simple, even if it's not that easy. But the earlier you figured out, the more impactful it can be over the long term.

[C]

You live below your means, you invest. I feel like the saying is, you cannot screw this up, Aaron.

[A]

This is a blast.

[C]

So much fun, guys.

[A]

If you want to know more and know how to maximize your wealth building journey, make sure you check us out. Go to moneyguy.com and then take advantage of all our free stuff moneyguy.com resources. Aaron, if they want to check out your stuff, where do they need to go?

[C]

I'm only on YouTube and Aaron talks money.

[A]

Until next time, I'm your host, Brian Preston. Bo Hanson. And of course, Aaron. For a special episode, Money Got Team.