Money Guy Show

Episode: “The Financial Rules Designed To Keep You BROKE”

Hosts: Brian Preston & Bo Hanson
Date: December 12, 2025

Overview

In this episode, Brian and Bo challenge some of the most widely accepted financial “rules of thumb,” arguing that many of them—while rooted in good intentions—can actually hold you back from building real wealth if followed blindly. They break down where these rules fall short, why they persist, and provide actionable, updated strategies for achieving financial independence in the modern economy.

Key Financial Rules Explored & When to Break Them

1. “Buy Low, Sell High”

[01:26 – 09:48]

Discussion Points:

• The classic advice to “buy low, sell high” sounds elegant but is dangerously misleading in practice.
• Behavioral pitfalls: Most investors can’t time the market, which often leads to missed opportunities.
• The Money Guy alternative: “ABB – Always Be Buying.”

Case Study:

They compare three hypothetical investors from 1980–2024, all saving exactly the same amount:

• Unlucky Olga: Invests only at market peaks.
• Billy the Best: Invests only at market bottoms (perfect timing).
• DCA Diane: Uses dollar cost averaging, investing automatically every month.

Memorable Quotes:

• “This is the part where it gets controversial. We think you should always, always break this. Now, look, always has a key component to what we think will actually create success, and that is understanding. ABB baby, always be buying.”
  — Brian Preston [02:40]

• “If you're always waiting on the perfect time to invest… you're likely going to wait too long and miss out on the growth.”
  — Bo Hanson [02:59]

Insights:

• Olga: Even investing at the worst times, she still turned $137k into nearly $1.6 million.
• Billy: With perfect timing, ends up with $2.5 million.
• Diane: Dollar cost averaging, she actually ends up with nearly $3 million.
• Consistency and time in the market beats trying to time the market.

Actionable Takeaway:

Don’t wait for the perfect moment—set up automatic investing and stick with it.

2. “Invest 10–15% of Your Income for Retirement”

[09:48 – 17:30]

Discussion Points:

• This rule comes from classic personal finance books and assumes early, uninterrupted saving.
• Most people start saving late (average age 36), making 10–15% insufficient.
• A fluctuating savings rate or late starts require higher contributions to catch up.
• Greater savings also provide flexibility to retire or pivot on your own terms.

Memorable Quotes:

• “If you go read some of those books... and they tell you 10% or 15% and think you're going to be a-okay, it just doesn't work as well.”
  — Brian Preston [12:31]

The Money Guy Rule:

• Save 25% of your gross income for retirement.
• What counts? 401k/403b/457s (including employer match), IRAs, HSAs, pension contributions, employer stock purchase plans, and taxable brokerage—if earmarked for retirement.

Age-based nuance:

• Starting in your twenties? 10–15% may be enough thanks to compounding.
• Start late or have interruptions? Strive for the full 25%.

Tool Mentioned:

• Use the savings rate calculator at moneyguy.com/resources to personalize your target.

3. “Live Debt Free”

[17:30 – 30:50]

Discussion Points:

• Debt can be dangerous—“chainsaw dangerous”—but used responsibly, it can help accelerate your financial journey.
• Most people will need debt for big purchases: homes, education, and possibly cars (for reliable transportation).

When to Break the Rule:

• First home purchase and education sometimes require debt.
• Car loans are permissible under strict guidelines.

Guardrails:

• Education: Never borrow more than your expected first-year salary.
• Car loans ("23/8 Rule"): 20% down, finance for no more than 3 years, payment <8% of gross income. “Think Corolla, not Land Cruiser.”
  — Brian Preston [21:31]
• Never let car payments exceed your monthly investments.

High vs. Low Interest Debt (Guidelines):

• Student loans: <6% in your 20s; <4% in your 40s before focusing on rapid payoff.
• Car loans: Accept higher rate in your 20s (briefly), but <9% in 30s, <8% in 40s.
• Credit cards: Only for convenience or rewards—never carry a balance.

Debt vs. Investing Case Study:

• Average Allen: Pays $1,000/mo to extinguish $50k student loan in 57 months, then invests.
• Manny the Mutant: Pays minimum, invests the difference throughout.
• Result: Manny accumulates ~$12k more after 10 years—and with compounding, this difference grows to more than $200k over time.

Memorable Quotes:

• “Credit card use is a-okay. Credit card debt? No way… you’re dancing with the devil.”
  — Brian Preston [25:14]

• “Small decisions can have big results.”
  — Brian Preston [30:50]

4. “Must Own a House (With a 20% Down Payment)”

[30:50 – 39:46]

Discussion Points:

• The “always buy a house, always put 20% down” rule isn’t realistic in today’s economy.
• For some, especially in high-cost areas or uncertain living situations, renting and investing elsewhere is strategic.
• Most Americans only build wealth through their primary residence (“use asset”)—this is a missed opportunity if you neglect investments outside your home.

The 3/5/25 Rule:

• 3%: Minimum down payment allowed.
• 5: Plan to be in the home at least 5 years (to absorb transaction costs and weather market swings).
• 25%: Monthly housing costs <25% of your gross income.

Additional Guidance:

• Don’t buy a home unless it fits your needs and you’re financially ready (sufficient emergency savings, in proper sequence according to their “Financial Order of Operations”).
• Use Money Guy’s home buying calculator and checklist to personalize numbers and double-check readiness.

Memorable Quotes:

• “I have a no hypocrisy policy… When I bought my first house… I only put down 3%… Let’s go ask all our financial advisors. How much did they put down on their house? We found out… They all put down 3–5%.”
  — Brian Preston [31:24]

• “If you’re buying your first house, you need to make a down payment of at least 3%. You don’t have to go all the way up to 20. It’s okay if you make a lower down payment as long as you plan to be in the home for at least five years.”
  — Bo Hanson [37:27]

Overarching Takeaways

• Personal finance is deeply personal; rules of thumb are just starting points.
• Consistency and behavior matter much more than perfection or timing.
• The “standard” financial rules emerged under very different economic circumstances—adapt them wisely for today’s reality.
• Use debt extremely carefully as a tool—not a crutch.
• Focus on growing assets outside of your primary residence for true independence.
• Take advantage of tools and resources to tailor strategies (see moneyguy.com/resources).

Notable Quotes (with Timestamps)

• “ABB baby, always be buying.”
  — Brian Preston [02:40]

• “If you’re always waiting on the perfect time to invest, one of two things is likely going to happen. Either you’re going to get the timing wrong… or you’re going to wait too long and miss out on the growth.”
  — Bo Hanson [02:59]

• “If you go read some of those books… and they tell you 10% or 15% and think you’re going to be a-okay, it just doesn’t work as well.”
  — Brian Preston [12:31]

• “Credit card use is a-okay. Credit card debt? No way… you’re dancing with the devil.”
  — Brian Preston [25:14]

• “Small decisions can have big results.”
  — Brian Preston [30:50]

• “I have a no hypocrisy policy. When I bought my first house… I only put down 3%… Let’s go ask all our financial advisors. How much did they put down on their house?… They all put down 3–5%.”
  — Brian Preston [31:24]

Segment Timestamps

• [01:26] Buy Low, Sell High — Why to Break This Rule
• [03:52] Investor Case Study — Olga, Billy, Diane Comparison
• [09:48] 10–15% Rule for Retirement Savings — Why It’s Outdated
• [14:22] The 25% Savings Rate — Components and Rationale
• [17:30] Debt-Free Life — When and How to Use Debt Responsibly
• [21:31] The 23/8 Car Rule — Guardrails for Responsible Car Loans
• [26:33] Debt Payoff vs. Investing — Student Loan Case Study
• [30:50] The “Must Own, 20% Down” Homeownership Myth
• [37:27] 3/5/25 Homebuying Rule — A Modern Approach
• [38:58] Two Critical Questions Before Buying a Home

Tone & Style

Brian and Bo employ a friendly, approachable, and slightly irreverent tone. They challenge sacred cows but remain grounded in actionable, date-driven logic. Their aim is to empower listeners with both motivational encouragement and robust analytics, so individuals can confidently make financial decisions based on their personal circumstances rather than outdated one-size-fits-all advice.

For calculators, checklists, and the referenced savings-rate tool, visit moneyguy.com/resources.

Summary prepared for listeners seeking an actionable, modern approach to personal finance, with clarity on when and how to break outdated “rules” for a wealthier, more flexible future.