Smart Money Moves: Life Insurance, Emergency Funds, and The Rule of 55

Summary

Money Guy Show: Smart Money Moves - Life Insurance, Emergency Funds, and The Rule of 55

Release Date: April 21, 2025
Hosts: Brian Preston and Bo Hanson
Description: Empower your wealth-building journey with simplified financial strategies. This episode delves into essential topics like life insurance, emergency funds, and the Rule of 55, providing actionable insights to help you achieve your money goals efficiently.

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1. Navigating Life Insurance with Medical History

Question from Calvin ([00:36]):
Calvin, a 31-year-old married individual with a 10-month-old son, shares his concern about the high cost of life insurance due to his and his wife’s medical histories. Despite having supplemental life insurance through work, he seeks affordable options given their substantial net worth of $3.1 million and a household income of $400,000.

Brian Preston’s Response ([01:01] - [03:45]):
Brian commends Calvin's strong financial standing but acknowledges the challenge posed by their medical histories. He outlines two primary strategies:

1. Maximizing Employer-Sponsored Insurance:

   • Quote: “If you have group insurance, if you smoke or you have health issues, buy as much insurance as you can through your group because it’s usually got some underwriting tied to the pool of the entire group.” ([03:00])

   Brian emphasizes increasing coverage through the employer plan without undergoing individual underwriting, leveraging the collective rate.

2. Term Life Insurance with a Targeted Timeline:

   • Quote: “Get a term policy for 10 years. I know it's going to be more costly, but I’m going to figure out how to pay for that and work it into my budget.” ([02:30])

   He suggests securing a term policy that aligns with specific financial milestones, such as funding until the child is out of school or reaching financial independence.

Guest Insights ([03:45] - [05:33]):
An additional perspective reinforces the importance of utilizing employer-provided insurance to its fullest before exploring individual policies. The guest advises evaluating the net worth structure to ensure liquidity, highlighting that non-liquid assets like property won’t suffice for self-insurance.

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2. Balancing Emergency Funds and Retirement Contributions During Adoption

Question from Philip B ([05:33]):
Philip and his partner are in the process of adopting a baby and are contemplating whether to pause their 401k and Roth IRA contributions to fully fund their emergency reserve.

Bo Hanson’s Guidance ([05:56] - [09:05]):
Bo congratulates Philip and introduces the concept of the Financial Order of Operations, emphasizing the prioritization of emergency funds during significant life events.

• Quote: “Sometimes we can bring it up on the screen. A lot of people think it's just a stair step. You go from step one to step two, all the way up to step nine. No.” ([07:35])

Bo likens financial planning to a mission-critical operation, advising flexibility within the financial order to accommodate unforeseen events like adoption.

Brian Preston’s Advice ([08:25] - [10:10]):
Brian underscores the necessity of maintaining employer matches even when adjusting retirement contributions.

• Quote: “If you are working for an employer that has a free employer match, you can’t forego that.” ([08:51])

He recommends reducing contributions only to the level required to obtain the maximum employer match before reallocating funds to the emergency reserve.

Engaging Banter ([09:04] - [10:48]):
The hosts share light-hearted moments discussing the possibility of a dance-off to celebrate subscriber milestones, illustrating their approachable and personable hosting style.

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3. Understanding the Rule of 55 Amid a Job Layoff

Question from Kevin B ([11:05]):
Kevin, recently laid off, inquires about the implications of the Rule of 55 on his solo 401k, especially after making contributions post-layoff.

Brian Preston Explains the Rule of 55 ([11:27] - [15:31]):
Brian breaks down the Rule of 55, which allows penalty-free access to 401k funds if you leave your job in the year you turn 55 or later.

• Quote: “You have to be employed by your employer in the year that you turn 55 to be able to access it.” ([13:45])

He advises against rolling over the old 401k into a solo 401k to preserve eligibility under the Rule of 55. Instead, he suggests keeping the funds within the original plan to benefit from the rule.

Strategies and Hacks ([14:13] - [15:26]):
The hosts discuss strategic approaches to retirement planning, such as consolidating old 401ks into the current employer’s plan before separation to maintain Rule of 55 benefits. They also highlight the importance of diversifying and managing bridge accounts effectively.

• Quote: “If you do fully load up both plans, then you got to think into account not only the investment options, the internal expenses, but also how am I going to use this money in the future.” ([18:49])

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4. Maximizing Retirement Plans: 401A, 403B, and 457 Options

Question from MKF ([15:41]):
MKF, a 32-year-old married individual with a household income of $400,000, seeks advice on how to allocate contributions among a 401A, 403B, and 457 deferred compensation plans offered by his new employer.

Brian Preston’s Breakdown ([16:01] - [19:47]):
Brian explains the contribution limits and strategic allocation:

• Salary Deferral Limit:

  • Quote: “There is a salary deferral limit of $23,500 this year for those that are under 50.” ([16:05])

  Contributions to 401A, 403B, and similar plans aggregate under this limit.

• 457 Plan Exception:

  • Quote: “The 457 one is a little bit different. It’s not part of the same code section. So even if you are putting money in your 401A and 403B, you can still do another on top of that $23,500 into the 457.” ([16:54])

Brian advises prioritizing contributions to plans with employer matches (like the 401A) before maximizing contributions to other plans based on investment options and future withdrawal needs.

Strategic Advice ([17:16] - [19:47]):
He emphasizes evaluating each plan’s investment choices, costs, and potential for early withdrawals, especially with the unique benefits of the 457 plan for those planning early retirement.

• Quote: “No money got dance off happening.” ([10:10])

The discussion also touches on maintaining flexibility and alignment with long-term financial goals when managing multiple retirement accounts.

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5. Assessing the Opportunity Cost of Returning to School

Question from Logan L ([19:47]):
Logan contemplates quitting his job to pursue further education aiming to double his income, seeking advice on evaluating the opportunity cost.

Remy Hanson’s Comprehensive Approach ([20:21] - [26:59]):
Remy introduces the 3D Planning Method, advocating for a balanced approach:

1. Dream Plan:

   • Envisions the ideal scenario where goals are achieved without setbacks.

2. Down-to-Earth Plan:

   • Incorporates realistic assessments and contemplates potential challenges.

3. Doo-Do Plan:

   • Prepares for worst-case scenarios, ensuring contingencies are in place.

• Quote: “Just make sure you build that cash level to protect yourself.” ([22:25])

Remy emphasizes the importance of financial cushioning to navigate periods of uncertainty, such as the transition back to education and the accompanying income adjustments.

Brian Preston’s Insights ([23:25] - [27:42]):
Brian stresses the necessity of evaluating the probability of income doubling and aligning educational investments with realistic career outcomes.

• Quote: “What is the probability that the adjustment to my income will actually manifest if I go back and do that?” ([26:35])

He advises conducting a thorough ROI analysis and considering the stability of the expected income increase based on the chosen field of study.

Bo Hanson’s Conclusion ([26:59] - [27:42]):
Bo appreciates Logan’s question, reinforcing the value of meticulous financial planning and leveraging available resources for personalized advice.

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Conclusion

Brian and Bo wrap up the episode by encouraging listeners to engage with their resources at moneyguy.com for further financial guidance. They emphasize the importance of strategic planning in life insurance, emergency savings, retirement contributions, and major financial decisions like returning to education. The hosts maintain an inviting tone, assuring listeners of their support in navigating complex financial landscapes.

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Notable Quotes:

• Brian Preston ([02:30]):
  “I’m going to go get a term policy for 10 years...”

• Guest ([03:00]):
  “Buy as much insurance as you can through your group because it’s usually got some underwriting tied to the pool of the entire group.”

• Brian Preston ([08:51]):
  “If you are working for an employer that has a free employer match, you can’t forego that.”

• Remy Hanson ([22:25]):
  “Just make sure you build that cash level to protect yourself.”

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This episode of the Money Guy Show provides a wealth of information for listeners navigating critical financial decisions. From optimizing life insurance amidst medical challenges to strategically managing retirement contributions and assessing the true cost of educational investments, Brian and Bo offer actionable advice grounded in practical experience.

For more insights and personalized financial strategies, visit moneyguy.com and explore their extensive library of free resources and tools.

Transcript

[Brian Preston]

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[Bo Hanson]

Calvin's question is up next. He says, I'm married, 31, with a 10 month old son. My wife and I both have a medical history and it makes life insurance very expensive. We have supplemental life through work, but it's small. Our net worth is 3.1 million and we have a 400k household income, so that's a very good income. What options do we have?

[Brian Preston]

So when I hear 31 years old, $3.1 million net worth, $400,000 income, first option I think is you go to aboundwealth.com become a client now. I'm kidding, sort of. One, you're in an amazing spot, but you have recognized there is this unique thing if you have a medical history, sometimes getting life insurance. And by the way, we have life insurance. Two, to protect our income for those who depend upon it. Right? So if someone's dependent upon your ability to create income for their well being, whether that be kids or a spouse or dependent or whatever that may be, then you have an insurable need on your life. If something were to happen to you, that person would need your income to be replaced. And certainly with a 10 month old and as a married couple, it's not like you have an insurable need, but you've had a medical issue that has now caused you to have either trouble getting insurance or it causes your insurance to become very, very expensive. So what do you do? Well, there are generally two options. One I like a lot more, you said, okay, I do have insurance through my employer. One of the great things you can do is most employers, or not most, but a lot of employers will have some level of minimum coverage they provide for you at their cost. A lot of times what you don't realize is you can actually go to your HR department or you can go to your health, your, your insurance provider, say, hey, I know that my employer is giving me one time salary or two times salary and that's what they're paying for. Do I have the ability through work if I'm willing to pay for it myself to increase my insurance coverage? Well, when you do that through your employer sponsored plan, you don't have to get specific underwriting for you unless it's over a certain limit. But most times you don't have to go through medical underwriting. You just get underwritten in the same pool as your colleagues or the group that, that, that that insurance plan is under. So you might be able to say, okay, I get two times salary that the, that the company pays for. I'd like to increase that to another three more times salary or five more times salary and I'll pay the difference. You don't have to go through medical underwriting so you get the same rate. So that's option number one. Option number two, and this is assuming that you are insurable and you say, man, I really, really need this. You got to get granularly focused on your timeline. Okay, I've got a 10 month old. I just want to get the 10 month old out of school. Or maybe I want to get them till we reach financial independence. And if we know that our financial independence date is 10 years in the future, what I'm going to go do is I'm going to go get a term policy for 10 years. And I know that it's going to be expensive, it's going to be more costly than it would be otherwise, but I'm going to figure out how I can pay for that and how I can work it into my budget so that I can make sure that I have that need covered and that might be a way to be able to afford it as opposed to going to a 20 year term or a 30 year term.

[Unknown]

That's exactly. You've written that you. Once again we're sharing a brain because I had maximize that work insurance. This is teachable moment. If you have group insurance, if you have, if you smoke or you have health issues, buy as much insurance as you can through your group because it's usually got some underwriting tied to the pool of the entire group. If you're super healthy, you're out there running half marathons and you're doing all kind of other crazy things and biohacking, you probably want to go get underwritten by yourself. So don't load up necessarily beyond the free at work. That's just general advice. Do some research on your plan. I don't know your specifics. The other thing I like Bo's idea because remember insurance, specifically life insurance, is to build that bridge until you can self insure through financial independence. And I love the thought of if you can figure out probably is the Take the relationship to the next level. Is somebody calculating out how close are you to being at that self insurer market, especially having a net worth of 3.1 million at 31. And that was led to. My third point was make sure you look at your net worth structure when you're taking into account that self insurer or financial independent status. Because if 3 million of your 3.1 million is you just bought a house that all of a sudden an ocean developed right outside your door and now it's worth a fortune. I'm being facetious of course, but meaning that your property is all your value. That's not necessarily liquid and it can't be your financial independence unless you sell that use asset. Just make sure you look at your net worth structure so that when you think about self insuring because you're financially independent that you actually have access to liquid assets. Love it.

[Bo Hanson]

Awesome. Calvin, thank you for the question. Philip B's question is up next. He says, we are in the process of adopting a baby and we're trying to fully fund our emergency fund. Would you Recommend pausing our 401k and Roth IRA contributions until our emergency fund and adoption is funded? What do you think? This sounds like he needs help with the order of some things.

[Brian Preston]

Yeah. Well, here's what's so wonderful, by the way. Adopting. Awesome.

[Bo Hanson]

Yeah, that's cool. Congratulations.

[Brian Preston]

Something that changed my life. You know, I was adopted later on in life, so just a huge thing that you're doing there. But one of the reasons we constructed the financial order of operations is because people often have this question of what is it that I do with my next dollar. Brian, can you hold the thing up? We have this nine step tried and true process of where do I go? Where do I go? Where do I go? Well, when I hear Brian Phillip say, okay, I'm doing these things like I am funding my 401k and I am funding my Roth IRAs and I am doing these kinds of things. But now I have this goal. It sounds to me like perhaps Philip should move back in the financial order of operations and bolster one of the steps, specifically step four. You agree with that?

[Unknown]

Yeah, I do. This is. I was trying to think of a better movie, but the only movie that came to mind was like a Mission Impossible where you know, you've got a period of time where it's the mission critical. And I think having children or adopting. This sounds like a mission critical type thing is you realize, oh my gosh. Part of this whole caper saga of the plot of My life is. Is that for the next. I'm essentially able to turn off the alarm and Tom Cruise is going to drop out of the ceiling for like two minutes. And then I'm going to be able to have this baby, or I mean have. Adopt this baby. And then we're going to go back up into the ceiling and then we're going to go live our best life by saving and investing like the future. That's. I think that's the way I would look at veering. There's nothing wrong with the financial order of operations going back. Life happens. It's as we share with people. Sometimes we can bring it up on the screen.

[Brian Preston]

Can you guys bring that up?

[Unknown]

A lot of people think it's just a stair step. You go from step one to step two, all the way up to step nine. No. More than likely somehow in life there's going to be some curve ball that comes your way that makes you take a step back. I have no problem at all, especially for something like adoption. Philip, if you take a step back, load up the emergency reserve so you have all your contingencies covered. But here's the cautionary tale of it. Just like in the Mission Impossible films, eventually the laser beams are going to turn back on and you're going to blow everything up if you don't get out of there. So feel that sense of urgency that you actually need to get back on track as soon as possible. So go back, do this noble thing as well as grow your family, but then get back on track and respect the FU as fast as possible. Yeah.

[Brian Preston]

And as you are thinking about if you do decrease your Roth IRA contributions, you do decide to decrease your 401s, be true to the financial order. Can you hold it up one more time? Because one of the things I don't want you to do is if you are working for an employer that has a free employer match, you can't forego that. You can't not take advantage of. That is a step two item. So I would. If you decrease your 401k, just decrease it to the minimum level to get the maximum match and then go to step four. So make sure you're not running afoul of that.

[Unknown]

I think that's a good. Because that's for. That's like a 50 to 100% guaranteed rate of return. That's. That's worth. That's. That's also. That's a noble cause, too.

[Bo Hanson]

Yeah, that was good stuff. That Mission Impossible analogy just delighted me.

[Brian Preston]

Didn't know how he was going to bring that together.

[Unknown]

I didn't know if it was going to work. I was trying, you know, truthfully, I was thinking, because, you know, sometimes, you know, to save the bake shop, you got to go do a dance off or something. Like there's crazy movie plots.

[Brian Preston]

Was that Mission Impossible 7 or 8?

[Unknown]

That's what I was going different. I was like, mission impossible or is this to save grandpa's bake shop?

[Bo Hanson]

Hallmark or Disney Channel? Little different genre.

[Brian Preston]

You know, growing up as a kid, I thought there were going to be a lot more decisions that were decided by dance offs. And in my adult life, it just hasn't happened all that much. That and quicksand. I thought quicksand was going to be a much bigger issue.

[Unknown]

I felt so bad if you. Because, you know, social media team put something forward yesterday for me.

[Brian Preston]

You know, he's talking about. He's talking about that.

[Unknown]

Oh, no, no, don't say it. Because then people will know what we were talking about. And I was like, I can't do it because I will look. So I don't mind making a fool of myself. I don't, obviously. I mean, I do it every week on the show, but there are limits to how much I'm willing to just cringe myself up. So I was not a. Dancing would be one of those. Those type of things.

[Brian Preston]

Oh, you heard it first here. No money got dance off happening.

[Unknown]

No, Bo would probably be willing. Bo's down. Bo would totally break out his. His greatest Vanilla Ice impersonation and probably you just tear it up.

[Bo Hanson]

Well, if we ever do a dance off, we'll let you know. We'll make sure to record that. But I don't think chances are slim.

[Brian Preston]

If we get to 1 million subscribers by the end of the year, we will do a money guy dance off. If you have not subscribed.

[Unknown]

If we got to a million by the end of the year, I might even try to do that. That. That reverse worm that I used to do in the seventh grade. That would probably put me in traction.

[Brian Preston]

Worth the price of admission.

[Bo Hanson]

That would be fantastic. Not you injuring yourself, but seeing the reverse.

[Unknown]

A million. I might be willing to be laid up for a little bit, see what this 50 plus body could do. Might even do the dive into it now. That might break the whole thing right there.

[Bo Hanson]

That might. The enterprise might be done after that. That would be it. Okay, Kevin B. Has a question for you. He says, I was recently laid off. Do I lose the rule of 55 if I also have a solo 401k and have made contributions after the layoff. What do you think?

[Brian Preston]

All right, so let me, let me think through this.

[Unknown]

Also lay out, Bo, if you wouldn't mind, what rule of 55 is. In case you aren't familiar with it.

[Brian Preston]

Thank you for reminding me. So, for those of you that don't know, there is a rule that exists inside of 401k plans called the Rule of 55. And what it says is so long as you are employed by your employer in the year that you turn 55, so it doesn't have to be past your birthday, but in the year that you turn 55, if you are laid off or you retire, you're terminated, you can actually access those dollars penalty free before 59 and a half. For most of the times when we have qualified retirement accounts like 401ks, 403bs, etc. You have to wait till 59 and a half. But if you are employed in the year that you turn 55, you can actually pull those dollars out. You don't have to pay the 10% excess, the 10% penalty on that. So Kevin's question is, hey, if I was laid off, Does Rule of 55 apply? Well, you would have had to have been laid off in the year that you turned 55 or later and you could not have rolled your 401k out. Like you couldn't roll your company 401k into your solo 401k, then rule of 55 would not apply.

[Unknown]

It still needs to be in the plan.

[Brian Preston]

You have to leave it in in the plan where you were employed. Now his next question, okay, so that's one. You had to be past 55. He said, hey, well, we'll have any bearing if I have a side gig and I'm contributing solo. No, those won't matter. You can still access those dollars even if you have a solo 401k and you're doing a side gig and you're just using that to supplement. But you want to make sure that you don't co. Mingle, you don't roll the old plan out because as soon as you do that now, you are going to be subject to the 59 and a half, 10% penalty rules.

[Unknown]

Yeah, I think they're two separate things. As long as you kept that old 401k at the old 401k, it's an. They don't. The solo 401k and stuff doesn't come into play because that's, that's just not. That's different. Now if you did. Unfortunately, you found us a little too late. And you were like, hey, it'd be great if I consolidated everything and you rolled it all into either an IRA or that Solo 401K to consolidate. That's going to muddle up the works. And of course, just legal disclaimer, go talk to your tax professional to confirm. But that's our best take with the data we have.

[Brian Preston]

And another thing that I. And we have some clients who come to this, they say, hey, I've got this old 401k and I left my last job and I was 50 and I left my last job, but I left the 401k there so that rule of 55 would apply. That does not work. You can't just because you left it there, you can't wait till 55. You have to be employed by that employer in the year that you turn 55 to be able to access it. Now you want a cool little hack. Can I share the hack? Yeah, I'll share a cool little hack with you.

[Unknown]

I know what you're gonna say.

[Brian Preston]

If you do have old 401ks or you do have old IRAs, and you decide while you are still employed that you want to roll those dollars into your 401k. So now all of those are in that 401k at the company work and then you retire or you're terminated or you leave that employer after 55. All of those dollars are now subject to rule of 55. So it is a way to hack a little bit early type of time.

[Unknown]

See, I thought your hack was going to be a little different because we've also done some planning where we have, we have clients who come on board, they want to retire at 55 to 60. Let's say 55 to 60. They want to retire. We'll leave enough money in the 401k at the old employer that qualified for rule of 55 and then roll out. The portion that we don't think we'll need is that bridge account. Essentially because we can diversify it better. There's lower costs and other things, especially if the plan doesn't have great investment choices. That's another hack that we've been able to do from a planning method that's worked really well is leaving that bridge money in the old 401k so you can take advantage of Rule 55.

[Brian Preston]

It's a great add on.

[Unknown]

Yeah, that's what we're here for.

[Bo Hanson]

That's what you're here for. Kevin B. Thank you for the question.

[Unknown]

It's it's not going to be good.

[Bo Hanson]

What?

[Unknown]

Oh, we actually hit. I was. That's all. More him than me.

[Bo Hanson]

All right, let's move on to MKF's question. It says my new job provides access to a 401A 403B and a 457 deferred comp plan.

[Unknown]

Wow. Bingo. Hope he's got a good income.

[Bo Hanson]

Brian's already excited. He says my job mandates 10% to a 401A with a 14% match.

[Unknown]

Well, great.

[Brian Preston]

How do you butter.

[Bo Hanson]

How do I decide to max out the 403B, the 457 or a combo? We're 32, married, with a household income of 400K. So there's that big shovel. What do you think?

[Brian Preston]

Again, that website is aboundwealth.com Become a Client. This is awesome. So some things you need to know. We know that when it comes to saving salary deferral contributions into retirement plans, there is a salary deferral limit of $23,500 this year for those that are under 50. Now, that aggregates across some types of retirement plan. So a 401A and a 401K and a 403B, those all aggregate. So you can only put 23. 5 across the total of those. You can't do 23. 5 into each one of them.

[Unknown]

Those 415 limits, those four section 415 limits.

[Brian Preston]

However, when it comes to 457, that one is a little bit different. That one is not part of the same code section. So even if you are putting Money in your 401A and 403B, I'll talk about that in a moment. You can still do another on top of that 23.5into the 457, which is crazy. It's amazing.

[Unknown]

And that's why you typically see this with medical professionals and others, because you see this at hospitals and so forth, is that you can load up your 401k or 401a or 403b with all your salary deferrals. And then it feels like a cheat code. Up, down, up, down, left, right, left, right, ba that you get to all of a sudden, now you get to also put another $23,500,000 into the 457. You share that you have household income of 400,000. That's an incredible, incredible not only tax saving opportunity, but a way to turbocharge your future retirement building.

[Brian Preston]

So when you think about how to do this practically, obviously the 401A has a 14% match. If you put in 10%, you got to do that, right? Like you have to do that to get that match. Well then you got to decide, okay, that takes up 10% of my, you know, of my whatever. If I'm not fully at 235 at this point, how do I decide? I put the rest of my 401A or do I put the rest of my 403B? Well, what you actually need to do is you look at the two plans. I imagine since the 401A is matched, the 403B is not going to be matched. So you're going to want to look at it and say, okay, which one has the better investment options, which one has the lower cost solutions? And there's nothing wrong with doing the 10% in the 401A, doing the remainder in the 403B if the 403 is better, and then doing the full 23:5 and the 457. If you do that, you're going to have tons of either tax deferred or maybe this is Roth tax free dollars that are going to be working for you into the future. I think it's awesome.

[Unknown]

And one more rule, and this is once again, success creates complexity. But I love sharing the free advice because you'll realize, oh my gosh, there's a lot more going on here than I realize. 457s don't have those early withdrawals too. So if you plan on retiring before 59 and a half, you know, that's why you have to take into account the match. Definitely get the match. But then if you can't fully load up both plans, then you got to think into account not only the investment options, the internal expenses, but also how am I going to use this money in the future because maybe I need to take advantage of that 457 provision, not having those early withdrawal penalties. This is why I love what we get to do is because we get to bring it all together and create that custom personal finance plan for your level of success. But if you're not there, load up on the free stuff. We'll get you some. We'll leave the porch on the porch light on for you and we'll be waiting for you.

[Brian Preston]

We will leave the porch on for you.

[Bo Hanson]

The porch and the porch light.

[Unknown]

Yeah, I'll make sure the front steps are open.

[Bo Hanson]

Love it. MKF, thank you for the question. Again, moneyguy.com, we have all of our resources. Is there both the free resources and a become a client button that lets you just learn more about abound wealth and everything. Brian and Bo was just, were just talking about. All right, Logan L has a question for you. He says, how can I best figure out the opportunity cost of quitting my job and going back to school? Investing in a two and a half years of school could allow me to double my income. Do you have a resource for this or any thoughts?

[Unknown]

No. You know what he got put on them 3D glasses.

[Brian Preston]

Brian, why don't you walk us through? Because when I hear this and I hear I can go back to school for two years and it will give me a 100% increase in my income opportunity cost. I mean when I. I can think about the opportunity cost, but then I think about like roi and if that's legitimate and true.

[Unknown]

Now I want to throw another. Before I talk about the 3D glasses. Are you gonna be happy too? Because I don't, I don't want. Because I mean I see a lot of people chase the money, but make sure that those things also intersect with you wake up in the morning and this actually seems like something you want to do because that's an important. But now here's what I talk about with 3D glasses. Because look, I've gone through this entire endeavor myself and the fact that. But now mine was I had the clarity of trauma when my father passed away. I looked at my life in my late 20s and I was like, what am I doing? I work all the time. Yes, I make great income, but man, oh man, this is not the life I want to be living. And I was like, well, what am I going to do? And I was like, well, gosh, I've got to create a plan out. So what I did was I essentially wrote a personal business plan for myself. That's what the 3D glasses is. You go to do the dream plan. This is where everything hits just like you think it will. You are like, this is going to be awesome. I truly am going to double my income. It's only going to take me a little over two years. This is perfect. Now I want you to also do a down to earth plan. This is where, yeah, this is. Most things are going to work out like I think. But I'm probably going to build in some contingencies in there because life has a funny sense of humor of throwing things at you when you least expect them. And then of course, don't skip, this one's important. Has a funny little name to it. And especially if you have kids in the car under 10 who are watching this a doo doo plan because you want to make sure you plan accordingly. If this thing goes horrible, you leave your job that you currently have, you go back to school and there's probably going to be some cost to going to school and then you can't replace. You can't even. You go back right to the same type of job and income that you were. Do you have a plan to get yourself out of that as well and what you might find? Just like I found when I did these three plans, I was like, man, I'm going to need to build up a lot of cash now so that I actually have enough cash to bridge this period of adjustment. So it's not only the cost of the education, but it's just the cost of life, too. And for me, that took like a year and a half, that my wife and I just lived off of one income. Even though I had this plan that it was cooking in the background, I wanted to make sure I had enough capital of cash to get us through the scarcity moments so that it didn't blow up. Because I see this all the time, people have these good grand plans, but they just don't give themselves enough margin of cash to where they starve this thing before it has a chance of being successful. And then you're just bitter and upset that you didn't do that step. So don't only do the three plans, but also make sure you build that cash level to protect yourself.

[Brian Preston]

Remy, the question did it say income could double or income will double?

[Bo Hanson]

It says could allow me to double my income. So that is an important factor thing.

[Brian Preston]

I throw in because I've seen so many people do this. And Brian, I'm curious if you ever seen this. I'm using a very real practical example here. You ever had a friend say to you or someone in the community say, hey man, you know what I figured out? I'm going to go get my real estate license, I'm going to go pay for it, I'm going to go get it. And I know that when you sell real estate, the worst case, you're going to make a 3% commission. On the best case, you're going to make a 6% commission. So if I just said in the worst case, I make a 3% commission, every time I go sell a million dollar house, I'm going to make $30,000. So if I can just sell one house a month and make $30,000 every single month, all of a sudden make $360,000, of course I'm Going to go get my real estate license. That's easy money. And then you get into it, you're like, oh man, maybe this is a little bit harder. Maybe it doesn't quite work that way. So when I hear Logan saying, hey, I'm going to go back to school, I'm going to do this for two and a half years and it could double my income, I would ask for you to like realistically down, in a down to earth plan sort of way, what's the probability that it's actually going to double your income? You know, there are a lot of.

[Unknown]

Times like our industry is the same way. I mean, I think people, when they see highest paid professions and they find out that financial advisors do really well, realize most financial advisors wash out in the first two years because it's a sales profession. We're unique in the fact that you guys are so good to us with this abundance cycle that we get to focus on being great financial planners and the inbound marketing. But for most firms you go to, they say, write down a list of your hundred, friends, family and everybody and you start dialing for dollars, even though you know nothing about the profession or what to do. So just make sure you're getting. I think your point is get outside the brochure.

[Brian Preston]

That's right.

[Unknown]

And make sure this is real, not something that somebody's putting in the brochure to make you feel really good about it. But not disclosing all the hardship and other parts. Because like real estate, you know, I know my neighborhood alone, I mean, we're probably over 10 real estate agents just in, I mean, and that's only like 80 homes. I mean, so you think about that as a percentage, that is unbelievable. But the ones that are the killers, they have the networks. There's a lot that goes into it. There's a reason you see such disparity in income.

[Brian Preston]

But there are some professions where it is a more exact science. For example, if you're an educator and you know what the pay scales are, and you know, if I go back and get my master's degree and I go back and get my specialist degree, I am assured that once I do that, my income will increase this much. You can kind of bank on that a little bit more solidly. So I would, I would want you to answer the question, what is the probability that the adjustment to my income will actually manifest if I go back and do that? Because that's going to be the best way you're going to be able to assess the opportunity cost of two and a half years of school and all the sacrifice that would take versus the ROI on the other end when you actually get the new job and do the new thing and have the I.

[Unknown]

Do need to clarify on my neighborhood stop. Majority of those are the support incomes in the family. They're not the primary income. It's only those that have got the networks and have done the other things that it seems like it's a real. They're the breadwinners of it. And that's what I'm saying on the brochure it looks like. Yeah, we just do this. You make a lot of money. It's not always as easy as they put it out there to be.

[Bo Hanson]

Yeah. Nope. Good stuff. Logan L. Great question. Thanks for asking it. Thanks for being here with us as we answer your personal finance questions. We love doing this. We're going to keep showing up every Tuesday at 10am Central right here on YouTube and Facebook and on your podcast. If you're listening after the fact and if you want to continue these conversations we missed, we mentioned a lot of great resources, both free and otherwise and just every single place that you could fall into in your financial journey. We are trying to speak to it. Go to moneyguy.com resources and check out our library of free downloads and free calculators that are going to help you think through your personal finance situation today and beyond. So thanks for being here.

[Unknown]

I've got a great way to kind of close the loop on this. I used to love the Seinfeld because it was really a show about nothing, but they always would have a tendency, as they would bring the end of the show back around, to what the whole kernel of what the show was about in the first place. And if you remember, we started Today's show with 84% of Americans saying this is the key to financial success. I'm going to go ahead. This is the answer. I should have just said this and then dropped the microphone. Just throwing this thing over here is your money. Should work harder than you do. I'm your host, Brian Preston. Mr. Bo Hanson, MoneyGuy team out the.

[Brian Preston]

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.