What Gen Z Gets Wrong About Money

Summary

Money Guy Show – Episode Summary: "What Gen Z Gets Wrong About Money"

Release Date: April 30, 2025
Hosts: Brian Preston and Bo Hansen

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Introduction

In this compelling episode of the Money Guy Show, hosts Brian Preston and Bo Hansen delve into the financial perceptions of Generation Z (Gen Z). They explore how social media influences Gen Z's understanding of wealth, compare generational attitudes towards financial success, and provide insightful advice to help younger listeners navigate their financial journeys effectively.

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Gen Z’s Skewed Perception of Financial Success

Brian Preston opens the discussion by addressing a fundamental issue: "Man, oh man, do Americans have a perception problem, especially Gen Z, with what is financial success?" (00:07) He highlights how social media presents a distorted view of reality, showcasing only the "highlight reels" of wealth, such as luxury cars and expansive homes. This portrayal leads Gen Z to falsely believe that financial success requires an unattainably high net worth.

Bo Hansen echoes this sentiment, noting that older generations often criticize younger ones for not understanding "real life" financial challenges. He emphasizes that for Gen Z, the perception of wealth is heavily influenced by these skewed representations, causing anxiety and unrealistic financial goals (00:15).

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Fidelity’s Study on Generational Wealth Perceptions

The conversation shifts to a pivotal study by Fidelity, which surveyed different generations on what net worth they associate with being financially successful. Brian shares surprising insights: while boomers and Gen X consider a net worth of around $1 to $5 million as markers of success, Gen Z respondents believe they need nearly $9.5 million to feel financially secure (01:10 - 02:25).

Bo Hansen elaborates on these findings, pointing out that Gen Z's expectations are "far outside the stratosphere" compared to other generations (02:25). This stark contrast underscores the generational gap in understanding and setting achievable financial goals.

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Reality Check: Top 10% Net Worth in America

Brian Preston provides a reality check by referencing research from Empower, revealing that to be in the top 10% of Americans by net worth, one needs approximately $2 million (02:54 - 03:10). This figure starkly contrasts with Gen Z’s expectation of nearly $10 million, highlighting a significant misconception.

He cautions Gen Z against being discouraged by these inflated figures: "Don’t let social media...make you feel like you’re poorer than you actually are. Any little activity or just process of starting your financial journey will yield tremendous results in the future" (03:20 - 03:49). Brian emphasizes the importance of initiating financial planning early, leveraging the power of compound growth over time.

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Income Expectations Across Generations

The hosts discuss another aspect of the Fidelity study: the income levels each generation associates with financial success. Bo Hansen details the findings:

• Boomers view an income of around $100,000 as financially successful.
• Gen X sets the bar at approximately $212,000.
• Millennials aim for $180,000.
• Gen Z, however, requires nearly $600,000 to feel accomplished (04:17 - 04:44).

Brian humorously connects this disparity to the allure of YouTube fame, suggesting that Gen Z's lofty income goals might be influenced by the visible success of online personalities: "Why everybody wants to have a YouTube channel...a false perception that everything out there, this is the way you have to have success" (04:39 - 04:46).

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Encouragement and Practical Advice for Gen Z

Despite the daunting figures, Brian and Bo offer encouraging words to Gen Z listeners. Brian advises: "Don't let somebody else pull you in the wrong direction and miss out on the greatest opportunity because you’re a billionaire of time" (04:46 - 05:24). He underscores the advantage Gen Z has in terms of time, which allows them to harness compound interest and build wealth steadily.

Bo Hansen reinforces this by highlighting the personalized nature of financial success: "Personal finance is indeed personal. So what defines financial success for you is very much dependent upon your circumstances" (05:24 - 06:04). He illustrates this with examples of clients who are financially successful at varying net worth levels, stressing that individual goals and situations should dictate financial strategies, not societal benchmarks.

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Listener Questions and Further Insights

The episode also features a segment where Brian and Bo answer listener questions, providing practical financial advice:

1. Electric Vehicles Decision (09:39 - 14:18): A listener named Jake inquires about leasing versus buying electric vehicles. Bo outlines the importance of understanding personal driving habits and the financial implications of leasing, while Brian shares his preference for long-term ownership to avoid continuous payments and leverage reliable transportation without financial strain.

2. Inheritance Management (18:24 - 27:17): Chris K asks whether to use an inheritance for a home down payment or to invest it. Brian and Bo emphasize the importance of evaluating personal financial goals, debt management, and investment timelines before making such decisions. They advocate for a balanced approach that aligns with individual financial journeys and long-term objectives.

These interactions highlight the show's commitment to addressing real-life financial dilemmas, offering tailored advice that aligns with each listener’s unique circumstances.

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Conclusion

In "What Gen Z Gets Wrong About Money," Brian Preston and Bo Hansen effectively dissect the financial misconceptions prevalent among younger generations. By juxtaposing Gen Z's unrealistic wealth standards with more attainable benchmarks, the hosts provide a clear roadmap for financial success that emphasizes realistic goal-setting, early investment, and personalized financial planning. Their insights encourage listeners to start their financial journeys with confidence, armed with knowledge and a balanced perspective on wealth.

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Notable Quotes:

• Brian Preston (00:07): "Do Americans have a perception problem, especially Gen Z, with what is financial success?"
• Bo Hansen (00:15): "There is a skewed perception of reality out there."
• Bo Hansen (02:25): "Gen Z definitely is skewing differently than everybody else."
• Brian Preston (03:20): "Don’t let social media...make you feel like you’re poorer than you actually are."
• Bo Hansen (05:24): "Personal finance is indeed personal. So what defines financial success for you is very much dependent upon your circumstances."

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Hosted by Brian Preston and Bo Hansen

Note: Abound Wealth Management does not offer personalized investment or tax advice. The information provided is for informational purposes only.

Transcript

[Brian Preston]

Man, oh man, do Americans have a perception problem, especially Gen Z, with what is financial success?

[Bo Hansen]

Brian, I am so excited to talk about this because oftentimes I think that it's not uncommon for one generation to suggest that the generation come behind them. Just they haven't got it figured out yet, or maybe they get something wrong or maybe they don't know what real life is. And I think that when it comes to finances, it is no different. Now worry that there is a skewed perception of reality out there.

[Brian Preston]

Well, let's face it, we live in a social media world where you have people out there putting their highlight reel, only not actually expressing what real life looks like and they're showing you their the latest and greatest cars, their new big houses. It doesn't surprise me at all that because we, we actually did content a few years ago, YouGov had a survey and people just think everybody's rich. And that's why I would tell you, when in doubt, just understand you are richer likely than you realize because social media is skewing your perception.

[Bo Hansen]

And so what's great is Fidelity had this wonderful study that came out and they said, hey, what do you perceive as wealthy? What. What net worth would you say defines someone being financially successful? And what I love about how this survey broke it out is the respondents were broken out by the generation to which they belong. So that way you could see how it's changed through time. And I thought the numbers were really, really interesting.

[Brian Preston]

Well, look at this. I mean, by the way, I mean, we pick on boomers, but boomers are actually the ones living in retirement. And yet they perceive what is financial success from a net worth standpoint is basically the old school. Million dollars, million bucks will mean your financial success if you're my generation, despite what everybody says that I'm a boomer too. No, I'm Gen X, the forgotten generation. We're little over 5 million. I was actually shocked by this when I saw the content from and the research from Empower is. I was like, wait a minute, that's much, much higher than what I perceive because I kind of, if you ask me what is financial success where you can probably let your money do all the work for you, 2 to 3 million dollars is a decent chunk of money. Millennials is close to 6 million. But Bo, I'll let you do the big unveil because this was, this is why we did the show title. What it is, Gen Z definitely is skewing differently than everybody else.

[Bo Hansen]

It was wild. Again, the question was, and this Is what would you define financial success? What net worth would you have to attain to become financially successful? And when it came to the Gen Z respondents, they said nine and a half million dollars, almost deca millionaire status in order to be financially successful. That is far different from millennials, far different than Gen X, and far outside the stratosphere of what you and I get to see in our day to day lives.

[Brian Preston]

So I think I always like to bring things back to reality. So we actually research what is the top 10%? If you're in the top 10% of Americans, what would your net worth be? And the research shows us it's actually $2 million.

[Bo Hansen]

2 million. So 2 million bucks to be in the top decile of Americans. And yet Gen Z thinks in order to just be able to call yourself successful, you have to have almost five times that.

[Brian Preston]

Now, what I, what I don't like about this is that if you have a perception that your number is so high on what you'll need, I just don't want you not getting out of the starting gates because you're like, well, if it's this overwhelming, why even start? Don't let social media, don't let the media make you feel like you're poorer than you actually are. Any little activity or just process of starting your financial journey will yield tremendous results in the future. So just do something today.

[Bo Hansen]

Now. Empower did not stop here. They didn't just stop at net worth. Said, okay, well, let's step away from net worth. What income level would be required for you to say someone is financially successful? And again, the respondents were broken out by the generation to which they belong. And I thought that this was kind of fascinating. The boomers, that class of respondent said that, you know, if you're right there at six figure status, if you're right at $99,000 of household income or individual income, that would make you financially successful.

[Brian Preston]

Yeah, boomers, 100 grand. They're living it, they're in it. Gen X. Here's my generation once again. $212,000, right?

[Bo Hansen]

Great living. Then you get to millennials, you get to my generation. They said, okay, if you're someone who makes $180,000, you are financially successful.

[Brian Preston]

But once again, Gen Z, Holy cow.

[Bo Hansen]

Almost $600,000 of income in order to be considered financial successful.

[Brian Preston]

I'm starting to realize why everybody wants to have a YouTube channel.

[Bo Hansen]

That's right.

[Brian Preston]

There's a false perception that everything out there, this is the way you have to have success. But do you see the disconnect so, like I said, I worry for Gen Z, the youngest generation. They think they don't make as much as their peers. They're worried that they have to have a huge net worth. Guys, don't fall into these lies. You have so much opportunity. This is still, I believe, the best time to start your financial journey. Don't let somebody else pull you in the wrong direction and you miss out on the greatest opportunity because you're a billionaire of time and you're a billionaire of time. That's going to make it so much easier to harness that power of compounding growth and put your army of dollar bills to work.

[Bo Hansen]

And remember, at the end of the day, personal finance is indeed personal. So what defines financial success for you is very much dependent upon your circumstances. Brian. We have clients who have large multiple seven figure portfolios and they would argue that they're not quite at financial independence yet. And we have clients who actually live in the realm below seven figure status. And they are financially independent, they are financially successful. So it is very much dependent upon you and your unique needs and circumstances. So when it comes to defining what financial success is and whether you're there or not, it matters a lot less what your neighbor has going on. It matters a lot more what's happening inside your bank account.

[Brian Preston]

By the way, just to give the rest of the story, the actual top 10% of U.S. income, $150,000, very different than 6. I mean, the only ones that got it right were those boomers that we all make fun. So pretty, pretty impressive. So, hey, you probably have realized I don't know if his bow got a haircut.

[Bo Hansen]

Oh, is that what you did?

[Brian Preston]

Is this the first time Bo's worn this shirt? No, this is.

[Bo Hansen]

That's a new thing.

[Brian Preston]

There's something that has changed and I just can't put my finger on it. Has anybody else. Have we been getting any feedback on this?

[Bo Hansen]

It's weird. In the chat nobody said anything, so it's super weird. I haven't seen anything. No, of course, we. This is Money Guy Studio. I don't know if this is 4.0, 5.0, but it depends.

[Brian Preston]

If you count the conference room.

[Bo Hansen]

If you count the conference room. We are so, so, so excited we get to share this with you guys. The team has been hard at work over the past couple weeks preparing this studio, trying to bring it up to speed with where we feel like the Money Guy enterprise is now. And I'm. I love it. Yeah, I love it. What if you. I know you don't have favorites. You can't pick favorites. But if you had to pick, like, hey, this is my favorite thing about the new set. This is the one that gets me the most excited. Is there something, is there something that sticks out to you? Like, I kind of love this.

[Brian Preston]

I mean, we got a lot. They put a lot of Easter eggs on here.

[Bo Hansen]

I mean, guy sitting next to him I think was his aunt. Is that what he's. That was that. That's the end.

[Brian Preston]

There's a lot of Easter eggs on this set here. I don't know. I mean, we've got enough Disney, Star wars stuff that that box is checked. I've got all my old books from when I started podcasting that that box is checked.

[Bo Hansen]

A new book up year, Millionaire Mission. By the way, if you haven't gotten your copy Millionaire Mission, you should totally do that.

[Brian Preston]

Coming up on the one year anniversary, May 28, Rebe's like, oh my gosh, that year went quick. I know. Exceeded all of our expectations. Publisher dropped by yesterday, still excited, trying to get us to do another book.

[Ruby]

Yep.

[Brian Preston]

Yeah.

[Ruby]

I was like, that's a great compliment.

[Brian Preston]

Yeah, it has been awesome. And by the way, still read the reviews if you're curious. So, so keep them coming because you guys have been generous. But also I'm hoping that it changes the next generation because that's what I wanted to write was the book. Book that I don't care if you're 22, just starting out. Kind of like where I was when I first was like, hey, I want to do money better to maybe the 30, 40, you know, 5 year old who's a little behind and says, hey, how can I catch up? We, we got you covered with, with Millionaire Mission.

[Bo Hansen]

Well, one of the goals was with Millionaire Mission, you wanted to change people's financial lives. And that's what we like to do here at the Money Guy show. It's why every Single Tuesday at 10am we want to load you up. We want to answer the questions and speak to the things that you are curious about. So if you have a question or you want us to weigh in on something you were curious about, you can get it in the chat. Right now we have the team out in the wings collecting your questions because we really do believe that there is a better way to do money.

[Brian Preston]

And I hear a rumor it might be a Tumblr day.

[Bo Hansen]

Thought that was going to make a better sound.

[Brian Preston]

Maybe if I put it down, you.

[Ruby]

Know, it was worth a shot. Worth a shot. But it is a Tumblr day, so if we answer your question on the live stream today, we would love to send you a Tumblr. And to kick it off, we actually have a question from Jake. So we're going to kick it off with Jake's question. This is DJ D, Jake, our friend Jake. He says, I work from home, so I drive very little. I would like to dip my toes into the electric vehicle market. With that market changing so fast, should I lease? Do leases ever make sense?

[Brian Preston]

Oh man. Jake, why are you, why are you pulling us into the deep end?

[Ruby]

I said let's go. Our question.

[Bo Hansen]

So let's start off. Let's start at the beginning. Jake, fantastic question. Let's start kind of at the beginning because I want, Brian, I want you to talk a little bit about electric vehicles and the shift and the change. But generally speaking, one of the things that we've always said is that most often when it comes to buying a car, if you're going to do it the right way, one, we want you to follow 23, eight. So that means you, when you buy the car you want, you put 20% down. We don't want you to finance it for any more than 3 years or 36 months. We don't ever want your payment to exceed 8% of your gross income. So assuming you've done that, most people come out ahead. If they can buy a car and own it for a nice long period of time, think five, seven, maybe even 10 years. But some people don't have that behavior. Some people don't exhibit that. They say, hey, I really like to be in new cars and I want to make sure that every car I'm driving is no more than three years old. And so I'm constantly in this, this habit of changing out and exchanging cars. And we have some clients who fall into that category. And what we said is if you are someone who is not a long term car driver because of the way automobiles often depreciate in the early years of their life cycle, if you're someone who's going to have the behavior of changing your cars out regularly, there is a mathematical substantiation to the fact that, that leasing may be more advantageous than owning in that scenario. Now, is that the, is that the best financial decision? I'm not going to sign off on that. But if you're going to exhibit that behavior, oftentimes leasing can make sense over buying if.

[Brian Preston]

But you have to negotiate it just like you do any car transaction. It's so, so frustrating is because even leasing is a negotiation opportunity and you have to kind of know, not to add homework, but you have to know kind of where the market is and then back into. You see their lease payments and try to figure out how much of the depreciation are you absorbing? How much of the depreciation are they absorbing? You can back into that and then don't sleep on the mileage. But here's my perception. I've always hated leases because my behavior has been buy a car because cars should get you from point A to point B and then drive them for a long time, eight plus years if possible. Because I mean, it's just, there's nothing but good that comes out of driving good, reliable transportation without car payments because.

[Bo Hansen]

They just drive better.

[Brian Preston]

But I will say there's been some things come out recently that were kind of just like, wow. I was like, that's, that's a deal. And it's probably a unique market because remember, sometimes like all markets, you get disconnected from value. I mean, that's why when we invest, we tell you to be consistent. Don't let your emotions. Because markets will go up, markets will go down. You've heard Warren, uncle Warren Buffett share with us. He's made analogies whether it's a farm or. But he's talked about all kind of other whether when you read Berkshire Hathaway, other assets, where if you have an irrational neighbor or friend or somebody who's offering prices every day, some days it's really high, some days it's really low, and some days it's all the same. You quickly start realizing that you ought to pay attention to what people are offering you. So I mentioned on the show briefly, few weeks, maybe even a month back, I got a notice for a lease for like a Model 3 Tesla that was like 200, $250 a month, very affordable. So, but, so Jake, I do think you have to do your research, know thyself to know your behavior. Because there is an element with the technology and the batteries and other things that I can understand why somebody want that. So make sure it's just not disconnected from your net worth and your journey. And then also understand the limitations of electric, electric vehicles. I love driving electric vehicle for day to day. I dislike it for road trips.

[Bo Hansen]

Road trips make it a little bit interesting.

[Brian Preston]

Yeah, I mean when we went to Murray State to talk to that athletic program and then, and then they all.

[Bo Hansen]

They all got a firsthand education on the woes of electric vehicle ownership.

[Brian Preston]

But I will tell you, we got nervous because in Kentucky that supercharger network is not Quite built out as much as I thought it was. So there are still some limitations to doing electric on road trips.

[Bo Hansen]

Love it.

[Ruby]

There you go. Well, Jake, if you do not already have a tumbler, which I don't know if you do or not, I feel like you must. But, hey, if I'm wrong, our latest version.

[Brian Preston]

He can get the new Jake. Jake can get the newest tumbler.

[Ruby]

We would love to send you one.

[Brian Preston]

Just so they can come to a studio tour.

[Bo Hansen]

There we go.

[Ruby]

Yes. Come for a studio tour. The new studio tour based upon meeting.

[Brian Preston]

His wife in Dallas. She would love that.

[Ruby]

She was so nice.

[Brian Preston]

She was very nice, but you can tell she's like, what are we doing? What are we doing? She was there for him.

[Ruby]

Yeah, absolutely. All right, Leandra Jo has a question next. She says, hey, money guys, I love the Making a Millionaire show. Thank you.

[Brian Preston]

Thank you.

[Bo Hansen]

Hey, for those that don't know, Making a Millionaire is a new show that we've rolled out. It airs every other Monday. So if you have not subscribed to the channel, you're not gonna want our new episodes come out. And we just had a banger drop this past week. Yesterday, actually. Right. Was it yesterday?

[Ruby]

It was yesterday.

[Bo Hansen]

Yes, yesterday.

[Ruby]

So you can see them sit down with real people and talk through their actual financial situations. So go check that out. Making a Millionaire. Thanks for the compliment, Leandra Joe. Her question is, where does tithing fit into the foo. Is it a step nine behavior? And, I mean, I know that generosity is really a heartbeat of our show. Right. So can you speak to that?

[Brian Preston]

Yeah, I mean, I'll start it off and then let Beau kind of generosity is rewarding. And so that's why if you've read Millionaire Mission, if you've subscribed to the channel, you know that this doesn't fit into steps one through nine. We actually think that this is a ground rule. That's why I covered it in the beginning chapter is that I think, you know, in the beginning, if you don't have money, be generous with your time. But as you start bearing fruit and start, you know, having money, I think because money is only an ample, you know, the more money you get, it's kind of an amplifier of who you are. So if you can understand and ground yourself, I think by being generous, and it will help you in the beginning, it will help you in the middle, and it'll help you even as you become very abundant in your success.

[Bo Hansen]

Yeah, I would just echo that. Generosity is indeed a ground zero thing. It's something that I encourage Folks to start at the very, very beginning of their financial journey before they're thinking about, you know, IRAs and financial independence. It is one of those things that I think makes a lot of sense to take place early on in your journey, because it's just like any other habit. I want to build really good habits early on. I want to build the habit of saving early on. I want to build the habit of investing early on. I want to build the habit of being generous early on. That's why with my kids, whenever money comes into their possession, I always tell them there are three things that we get to do with our money. We get to give it, we get to save it, we get to spend it. And I try to walk them through why all three of those matter and all three of those are important. And I love what you said because this is a wonderful exclamation point. Oftentimes when it comes to generosity, it's not. You know, we say all the time that wealth is more than just money. I would say that generosity is more than just money too. Maybe you're in the situation where you can't write big checks or you can't make large donations, but maybe you can volunteer your time, your, your talents, the other things that you can do to be generous to others. It may just be sitting down with that brand new person at work and say, hey, let me tell you how this job goes. Let me tell you what I've learned in my years here. Let me walk you through. Let me bring you under my wing. Even doing things like that and exercising and practicing generosity, our belief is that there is a ripple that you cannot quantify that happens when you do that, when you allow yourself to help others around you. And if we can all help the people around us, it's amazing how we are all better because of that. So I don't think it's a step in the foo. I don't think there's like a check mark or, or a checklist you go through before you can start being generous. I think we ought to all start from that position. We'll be amazed at how it impacts the way we make our financial decisions.

[Brian Preston]

Well said and abundant. Cycle fulfilled.

[Bo Hansen]

Love it.

[Ruby]

Love it. Leandra Jo, thank you for your question. If you would like a money guy Tumblr, we'd love to send you one. Just email winneroneyguy.com Next we have Chris K's question. It says, I'm receiving early inheritance of 100K. Shall I use this to increase a down payment for a house or Dollar cost average into a tax free bucket. I'm 32, I'm a full time single dad saving 25% of a 50k salary and I have a 30k in pension. What do you think this is a big sum of money for him. Like how should he think about this?

[Bo Hansen]

Well, can I speak to something first I think is really interesting? Yeah, this, this has nothing to do with this question. It has a little bit of this question. He said I'm receiving an early inheritance. I assume that what this means is that his parents, whoever this person in his life is that decided to leave them some money, said hey, rather than waiting until we pass, rather than like giving this wealth, pass this along posthumously, we're going to do it now while we're living. That's just a really interesting thing. I see a lot of people do it. I see that becoming a lot more common folks. And hey, rather than just leaving all this money to my kids when I leave, I'd rather get to see them use it and use it for like meaningful things now while I'm still here on this earth and able to like see them enjoy it and see. I just think that that's a really, really interesting thing. Now when we get down to his question, hey, how should I use it? This won't be super surprising. I think that our answer is going.

[Brian Preston]

To be it depends.

[Bo Hansen]

It depends, it depends.

[Brian Preston]

But we can give you some, some details and context on that is because first of all you said you're a single dad, 32. I mean I think with kids you're probably thinking education, you know, so setting roots for the kids to have friends, neighbors and schoolmates that they grow up with is an important thing. So I can understand why looking at a house would be important. But remember, we try to give grace in the financial order of operations and the fact that on your first house you only need to put down 3 to 5%. Now there is another thing sitting under the current with your housing is that we love for housing to be under 25% of your income. And you also shared another component is that your income, you know, is, is right around the national median. I mean it was right around because I think the national median income is around 50, 54,000. So. So yours is right there with it. A little bit extra of that gift could go towards the down payment to help offset that 25%. So that's one way to squeeze the balloon is you could minimize the down payment. That would leave more to invest or for emergency reserves and other things or you could put down a little bit extra to push the payment down. But more than likely you're still going to be able to have extra money to run into the financial order of operations to consider funding the Roth IRA to get into your retirement accounts that all of this should work together. But it is going to be a matter of sitting down, writing out your goals, writing out your objectives and then figuring out where the intersection points for your, you know, all these different profile points, where they intersect. That's the answer to the. It depends.

[Bo Hansen]

I think another thing that I'd want to know is what's your timeline for this home purchase? So it may actually be that you may, you may be doing both these dollars may be used for a future home down payment, but if that home down payment is 5, 7, 10 years in the future, well, there might not be anything wrong with dollar cost averaging those into a low cost index fund after tax portfolio right now and then being able to use those dollars for a down payment down the road. I think your timeline will likely dictate when which one makes the most sense. Awesome question.

[Ruby]

That's great, Chris. We would love to send you a Tumblr as a thank you for asking your question today. Just email winner moneyguy.com I'd like to.

[Bo Hansen]

Apologize to our production team.

[Ruby]

Okay.

[Bo Hansen]

I'm, I'm a flailer. When I talk, I flail.

[Brian Preston]

Oh, you keep hitting the boom.

[Bo Hansen]

I like, I'm pretty sure I just stuck my arm underneath a microphone cord and just like.

[Brian Preston]

So you're going it.

[Bo Hansen]

I'm, I'm still. Do you feel like you're still getting your bearings about you right now?

[Brian Preston]

It actually feels, I mean I think Ribi probably because now I think I'm just directly staring at Ruby all the time.

[Ruby]

I know we have. It is true.

[Brian Preston]

No pressure on you, Ribey. I'm gonna be able to quickly tell if I'm flailing over here. But no, I mean it's cool. I mean what's interesting is because we've now added some additional walls in the studio. So I don't see the entire content team. They're all over there lurking and hiding behind the wall as Nick leans forward. But so it's interesting. I mean when you come and see do studio tours. Yeah, you'll get to see some of the additional stuff. But I love it. I think it, the lighting looks great. I love the additional textures.

[Bo Hansen]

That's one of my favorite parts. For those of you who have come to the studio tour, you know me and Brian, we're not like super Short dudes. So it would not be uncommon. We'd be walking people around from the studio, and one of us undoubtedly would just take Nail the light every time, like this big, giant light. Well, now the guys have got them all pulled up and stuff, and so no one, unless you're like, seven and a half feet tall, should run into our lights anymore.

[Brian Preston]

I don't know. That one might be six, eight.

[Ruby]

This one you may still hit, but it's much smaller.

[Bo Hansen]

You got to try.

[Ruby]

Yeah, you got to really try for that one.

[Bo Hansen]

If you want to know, we're talking about. We'd love for you to come do a studio tour.

[Ruby]

All right, I have another question queued up. Ready for it?

[Bo Hansen]

Yes, ma'am.

[Ruby]

Daniel and Clara, say hello. We are thinking of buying our first home. We do have the cash for a 20% down payment, but with the current situation, is it better to just put 20% down for the down payment or put less and save the remaining for investments? What do you think?

[Bo Hansen]

Well, you're never going to guess the answer to this one. Daniel and Claire. The answer is it kind of depends. It kind of depends on where you are in your financial journey. You didn't tell us how old you guys were. You just said, hey, we've got 20% for a down payment on a house. You also didn't tell us, is this our first house or is this an upgrade? Because one of the things that we do kind of hold true to is on your first home, we're okay if you don't put down 20%. We're okay if you do 3%, 5%, some number less. But when it comes to upgrading, when it comes to improving, when it comes to increasing your lifestyle, we do say that you do have to put 20% down on your second home and any subsequent homes that you buy after that. So we don't know how old you are. We don't know which home this is, and we also don't know what the rest of your financial life looks like. I mean, one of the immediate questions I'd ask Brian is, have they been. Do you have the thing. Can you hold the thing up? Have they been following the financial order of operations? Where are they on their financial journey? Through the nine. Not through the nine steps. Through the nine steps of what to do with your next dollar. I'd love to know where they are. I'd love to know.

[Ruby]

I will say they did say their first home first. We know that. I know there's still some other details to talk about.

[Bo Hansen]

So then I would want to know where they are in their financial journey and where they are with building their assets. What those dollars in fact be better used going towards a down payment or would they be better used?

[Brian Preston]

Well, people are going media, I go and add it because they'll say well it's high interest debt because if they're paying you know, 6% or 6 and a half percent, 7 right now, you know, is, is that high interest debt. And our take is without a doubt take into account the interest rate but also know that there's probably going to be future opportunities with, with refinancing. So you just don't want to what? I think it's a balancing act because we all know Bo is the, the, the, the crew. He's not a crusader because crusaders is, is a thing. He's more of a wild, wild man, you know, cowboy out there. He's like, don't pay down any debt. I'm more of the balance.

[Bo Hansen]

I'm good at math.

[Brian Preston]

Well you know, once you get over 45, you start realizing, hey, maybe, maybe I need to balance out some of the risks profile of this thing a little bit more too. So I like paying down high interest or debt that has a higher interest rate to it. But it is one of those things where I would highly encourage you and I know Beau alluded to it, you really do need to look at the financial order of operations and what I even cross reference that with we do shows like net worth by age 401k by age. We even have know your number. And what I'm asking is because I don't know if you're behind the curve, on the curve or ahead of the curve because that's also going to play into this answer. Because if you've done no saving for the future and you're really putting yourself in a pickle of a situation, you're going to be house rich, life poor and you'll be like great, but I have a low payment on this. But if you never have an army of dollar bills working in the background, you've missed out. So I always like that balanced approach that gives you the best of all worlds where we try to really find that perfect Goldilocks where you put down enough to where you recognize the 25% of your gross income towards housing. And the down payment feels like you made an impact on, you know, getting it in there and having some equity and ownership in this house. But then you left enough, you know, in your savings and investment so you have an emergency reserves so you don't make desperate decisions, but you also have enough money to start working for the future so you can leverage the power of compounded growth.

[Bo Hansen]

Love that.

[Ruby]

Fantastic. Daniel and Clara, congrats on thinking about taking this first step of your first home. It's a big deal and we thank you for asking your question today on the live stream. We'd love to send you a Money Guy tumblr if you would like one. Just email winneroneyguy.com the money guy show.

[Bo Hansen]

Is hosted by Brian Preston and Bo Hansen. 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.