What You NEED To Know About The Fed Meeting

Summary

Podcast Summary: Money Guy Show – "What You NEED To Know About The Fed Meeting" (September 24, 2025)

Hosts: Brian Preston & Bo Hanson
Theme:
Dissecting the recent Federal Reserve interest rate cuts and exploring what it means for your wallet, investments, housing, and broader financial planning. The hosts unravel economic trends, behavioral advice, and respond to listener financial questions—cutting through the noise on what really matters for your money management.

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Main Theme Overview

The primary focus is the Fed's quarter-point interest rate cut. The episode seeks to make sense of what this policy move truly means for everyday savers, investors, homebuyers, and their future financial decisions. The discussion is packed with practical strategies, market context, and actionable tips for wealth-building, framed within the Money Guy’s famous financial order of operations.

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Key Discussion Points & Insights

1. Understanding the Fed's Decision and Its Implications

• Context & History:
  • Recent Fed meeting produced a 0.25% interest rate cut, with guidance toward two more possible cuts this year. However, nothing is set in stone; future moves will depend on economic data.
  • Inflation has ticked up slightly, still above the Fed's 2% target, though not at levels seen in the post-pandemic period. The job market is softening, and unemployment is rising a bit (01:03–03:46).
• Quote:

  “There's a tricky little conundrum that they're trying to figure out how to navigate.” — Bo Hanson (02:38)
  “Stagflation ... the solutions are not as easy when you reach those types of moments now.” — Brian Preston (03:46)

• Stagflation Concern:
  Early-stage signs echo the difficult stagflation period of the Carter era—a scenario where inflation and economic stagnation clash—making policy solutions less straightforward.

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2. How Rate Cuts Affect Personal Finances

A. Investing

• Behavior Over Headlines:
  • Lower rates have historically boosted markets, but hosts caution against trying to 'market time' off headlines.
  • Automation and the "Always Be Buying" philosophy are crucial; avoid knee-jerk reactions to Fed decisions (05:55–06:56).
• Quote:

  “Focus on the things that you can control. Automate, always be buying, have a plan in place and stick to that plan.” — Bo Hanson (06:56)

B. Housing

• Interconnectivity with Rate Cuts:
  • Fed rate changes affect short-term rates directly (credit cards, car loans), but mortgage rates are more closely tied to the 10-year Treasury.
  • Mortgage rates are currently at a 3-year low (~6.1%) but homebuying should be driven by life needs—not market timing (07:45–08:40).
  • Use available resources like the Money Guy home buying checklist for sound decisions.
• Refinancing:
  • Consider if current rates are ~1% lower than existing mortgages; use spreadsheets and calculators before acting.

C. Savers

• Navigating the New Normal:
  • Cash yields (on savings) have normalized to 2–4% after a decade of near-zero, which is healthier for retirees.
  • Don’t expect a return to pre-2022 ultra-low mortgage or savings rates; balance between savers' needs and borrowers’ costs is key (10:33–12:44).
• Quote:

  “If you think that we're going back to 3% mortgage rates or ... a quarter of a percent on your savings account, I just don't see that.” — Brian Preston (12:44)

D. Planning Takeaway

• Long-term financial plans should hold up regardless of macro changes. Avoid knee-jerk behavior; optimize by automating savings, checking for refinancing, and using high-yield accounts for emergency funds (13:04–14:18).

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Listener Q&A Highlights

1. Gold vs. Stocks (14:18–21:15)

• Should you own gold?
  • Gold is a “holder of value,” not a working asset (produces no yield).
  • Outperformance over short time frames can mislead; focus on fundamentals and efficiency for guarding against inflation or value storage.
  • Small allocations (under 5%) are okay if personally meaningful, but don't overexpose your portfolio.
  • Quote:

    “The only way I make more money on gold is if the next person ... will pay more than I paid. It’s a holder of value. It’s not a working asset…” — Brian Preston (15:59)

2. Rolling Over Old 401(k)s (22:04–26:46)

• Not always necessary; evaluate fees, investment options, and personal circumstances with their "Got an Old 401k? Here’s What To Do With It" flowchart resource.
• Quote:

  “Homework is a great word ... you have to do some research to figure out how this impacts you and your personal finance situation.” — Brian Preston (25:11)

3. Using REITs for Real Estate Exposure (28:18–33:30)

• Publicly traded REITs, mutual funds, and ETFs offer diversification and liquidity—good entry to real estate investing versus direct rental property ownership.
• Be aware of your existing real estate concentration via your home when considering more exposure.

4. Buying Cars: Cash vs. Financing (34:45–43:15)

• Prefer cash purchases, but young savers must consider opportunity costs (money compounding in investments).
• Apply “2/38 Rule,” but context is key: prioritize portfolio growth over flashy or expensive vehicles in your 20s and 30s.
• Notable Moment:
  Humorous banter about family vehicles, kids’ messes, and resisting aspirational auto purchases until later in life.

5. Planning a 'Next Endeavor' / Changing Careers (45:32–54:32)

• Once at Step 7 (solid foundation + investing), you have the flexibility to pursue career changes.
• Employ "3D Glasses" planning: create dream, down-to-earth, and “do-do” (worst-case) financial plans before making big life moves.
• Quote:

  “Put on your 3D glasses. ... Dream plan ... down-to-earth plan ... do-do plan ... see the numbers so you can be better prepared.” — Brian Preston (50:19–53:30)

6. Leasing Cars with Employer Subsidy (55:03–59:12)

• Don’t get lured into overspending just for a subsidy—$2,000 per year is often eaten up by car depreciation.
• Wealth is built by long-term, practical car decisions—buy, pay off, and drive for years.
• Quote:

  “…much better to be rich than it is to look rich. I want to make sure you do things in the right time or place.” — Brian Preston (57:21)

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Memorable Quotes & Moments

• On behavioral discipline:

  “The market's always forward looking ... but buying a house should be more of a life decision and less of a market timing decision.” — Bo Hanson (08:40)

• On market reactions:

  “We got a little too addicted to that [low rates] in the past. I think we’re going to be a little more measured.” — Brian Preston (05:55)

• Joking about cars and names:
  Fun exchanges about car messes, minivans, learning people's names, and referencing the Jungle Cruise (26:41–27:39; 44:33–45:19).
• On the 'Abundance Cycle' and giving back:

  “When you reach close to that double comma mark ... remember who planted the seeds of knowledge... We are the Johnny Appleseeds of personal finance.” — Brian Preston (60:03)

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Timestamps for Important Segments

• Fed Meeting Analysis & Implications: 00:05–04:58
• Investing in Light of Rate Cuts: 05:55–06:56
• Housing & Refinancing: 07:33–10:17
• Interest Rates for Savers: 10:33–13:04
• Main Planning Takeaway: 13:04–14:18
• Gold as an Investment: 14:18–21:15
• Rolling Over Old 401(k)s: 22:04–26:46
• REITs and Real Estate Exposure: 28:18–33:30
• Buying Cars & the 2/38 Rule: 34:45–43:15
• Changing Careers & Next Endeavor Planning: 45:32–54:32
• Leasing Cars with Employer Subsidies: 55:03–59:12

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Resources & Actionable Takeaways

• moneyguy.com/resources:
  Access checklists, calculators, and decision matrices for buying homes, rolling over 401(k)s, net worth tracking, and more.
• Emphasized Behaviors:
  • Automate savings and investments.
  • Make decisions based on life, not attempts to time the market.
  • Periodically review net worth and total allocation.
  • Always consider your long-term plan; avoid trends and panic reactions.
• Personal Finance is Personal:
  Every major decision (car buying, rolling over retirement accounts, job change) should be contextualized for YOUR circumstances, goals, and current step in the Money Guy’s financial order of operations.

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Final Thought

The episode reinforces that foundational habits and long-term plans matter infinitely more than sudden economic headlines. Use the policy changes as an opportunity to optimize, not overhaul, your financial life. “It’s better to be rich than look rich”—and the Money Guy team is here to keep you on that disciplined, winning path.

Transcript

[Bo Hanson]

Foreign.

[Brian Preston]

I don't know if you guys heard, the Federal Reserve Met dropped some interest rates. What does that mean for you?

[Bo Hanson]

Brian? I am so excited to talk about this because the financial world is constantly changing and there are decisions that are made and these decisions get a lot of press. This most recent Fed meeting was no different. There's been a lot of people postulating and hypothesizing, okay, is this good, is this bad? What does it mean? Was it the right call? And so we hope that we can put a little bit of logic and calm headedness to what's going out there in the financial.

[Brian Preston]

I mean, I like to think that we are your source for what to do with that next dollar. There's a reason we have the financial order of operations. So when big financial stuff happens, whether it's tax legislation or now the Federal Reserve changing their stance on interest rates, we want to kind of cut through this stuff because you're, you're trying to figure out what does this mean, you know what? But I want to, before we jump into what this means for your wallet, we want to give you some context.

[Bo Hanson]

Sure.

[Brian Preston]

Because I think what a lot of this, a lot of the posturing that is going on is people know that the Federal Reserve has a tricky job ahead of them. Bo. And we decided we would kind of share. You know, inflation is one of those things where you keep hearing that coming up. So we were like, let's go ahead and just show everybody. What is everybody saying about cpi? And he said, we at least come off the mountain. I mean, because look at what this thing looked like from the spikes of late 2020 all the way to 2023 is where we built that mountain. It was kind of scary.

[Bo Hanson]

It was. But we're still above the target. The Federal Open Market Committee has said, hey, we have this target of 2% inflation and we're still slightly above that. And over the past couple months we have seen a slight tick up. You've already mentioned it's not to the levels that it was back immediately post pandemic, but it is starting to turn up. And so there is some concern. Okay, is inflation a problem? Is that something we need to address? Is that something we need to be aware of? But that's not the only problem that they're facing.

[Brian Preston]

Yeah. The other thing I keep hearing the news media talk about is, is the job market. And if you look at this, it is a little concerning is we're not as white hot with people getting new jobs and opportunities being out there. Unemployment's actually Ticking up to a degree. I've seen some anecdotal stuff where people are posted headlines of, you know, how many search queries are going on about foreclosures and other things. So there's definitely some concerning things making you say, hey, this is, this is a little concerning. Is the market softer than maybe we had hoped in a lot of ways.

[Bo Hanson]

Now, look, none of, none of this stuff in and of itself like signals like, oh, disaster, recession, and in fact, that GDP growth is still expected to be around 1.6% this year. So still positive economic growth. However, there is a unique problem that's going on. The tricky part is, is that even though both of these problems exist, the solution is not incredibly crystal clear. Because if you think about it, okay, we have this problem of inflation and looks like it could potentially be ticking up. So what is one probable, one possible solution, one way to combat that? Well, we could increase rates, we could raise interest rates, and that would serve to stave off inflation. Okay, got it, Check. But what about this other problem we have, this job market problem where jobs are slowing down and unemployment is slowly starting to tick up. Okay, how do we combat that? Well, we decrease interest rates. Okay, well, so in order to solve one problem, we have to do X, but in order to try to solve the other problem, we have to do. Yeah, it's a tricky little conundrum that they're trying to figure out how to navigate.

[Brian Preston]

Well, the thing nobody wants to say out loud because we really haven't faced anything. You hear from time to time they throw the word out, but really, since President Carter, you know, fellow Georgia boy. Stagflation, Stagflation. Because this is one of those things where when you have inflation but you have an economy that might not be doing as well as hoped, you're like, oh, my gosh, well, how do you get yourself out of this? Because the solutions are not as easy when you reach those type of moments now. So there's to be determined, and we don't have all the answers for you. We just want to kind of lay out for you. But here we can tell you what the Federal Reserve has actually said and what they did from the meeting and what they ended up coming out with is that they cut rates by a quarter of a percent and they even gave guidance that there's potential for two more rate cuts by year. Now, that's not a guarantee. There's a good chance that as data comes in, they will change or posture to go in a completely different way. But it is, it is Something that we are like, hey, now that the Fed has voted to lower interest rates, what does this mean for you? How do you plan for this? Because there's a lot of big things that you're probably trying to navigate.

[Bo Hanson]

Yeah. A lot of people are asking, okay, okay, it happened, it happened last week. What's that mean? What's that mean? And the answer is not a whole lot just yet, because here's what we do know. We do know that massive changes are not coming. They were not saying that, hey, we're going to have these huge drops or these huge raises. So it doesn't look like that's what's going to happen. Even though they've sort of hinted that, okay, we could potentially see some additional rate cuts, even that is not set in stone. So when you think about your personal finances, when you think about the decisions that you make related to some of the policy changes that come through, we want you to think about the, the different areas that this could affect. And the first would be investing. So, Brian, when you think about, all right, Federal Reserve just said they're going to cut rates and potentially there could be additional rate cuts. And generally speaking, when rates get cut, the market goes up. But there wasn't like this huge thing that happened last week. What does that mean for the everyday investor? How should they change their behavior?

[Brian Preston]

Well, historically, look, investors love when interest rates go lower because the cost of business gets cheaper. You see more people use leverage to invest. You see people, the stock market, typically, it's like almost like a steroid for investing. We got a little too addicted to that in the past. I think we're going to be a little more measured about the interest rates and using it as a sweetener or a juicer for the investing. But right now I think it's one of those things where I don't know that it really changes the direction or the headwinds that much. It's more about. It's back to what does your behavior do? Because we're still big fans of can you automate the process? Can you make sure you just strip out this noise around you and always have focus on having an always be buying type mentality and then just know that what you need money to do for you as a tool and not let this be something that you feel like your market timing or reacting to the headlines because that's not actually going to help you be successful with your investment process.

[Bo Hanson]

Yeah, you want to be very careful. Letting forces outside of your control end up controlling your behavior. So focus, focus on the things that you can control. You already said it. Automate, always be buying, have a plan in place and stick to that plan. So that's what you should do from an investing standpoint. But another big thing that's getting a lot of publicity right now is okay now that rates have been cut, now that rates are coming down and potentially it could come down even further. What does this mean for housing? Because housing in this country right now has been a big problem for a number of Americans. So is this drop and potential future drops going to be a boon for housing?

[Brian Preston]

So now this is. First of all, I got to make sure I clarify this because it's something that can, it can get easy to get confused is the fact that what the Federal Reserve, the rates that they cut don't impact actual housing.

[Bo Hanson]

Not directly.

[Brian Preston]

It's because it's what they're, it's impacting your credit cards, your car loans, all those short term interest rate type things. But even with that said, they're all interconnected. It's like a relative. So you, you know, because the federal, the housing uses the 10 year treasury rate and it is. Here's some good news because I love sharing good news. Interest rates for mortgages are at a three year low right now. I think the headline I saw from CBS was 6.1% somewhere around there, 6.1 was the average. So that's a positive. But it is one of those things where just pay attention to what's going on, you know and because markets are always forward looking. So this means that a lot of, since you see interest rates coming down even on the long term rates, it means a lot of people out there or a lot of investors are kind of pontificating that this is a trend that will probably continue. We'll start seeing lower interest rates and the market's trying to get ahead of that.

[Bo Hanson]

But if you are someone who's in the market to buy a home, we would say that buying a home should be more of a life decision and less of a market timing decision. Certainly you want to pay attention to rates and you want to pay attention to inventory, you want to pay attention to what's going on in prices. But at the end of the day, buying a house should be because it makes sense for your life and your life circumstance, not because, ooh, rates just got cut a quarter percent. Now it's my time to move. And so if you are someone who wants to know about what you should think through when it comes time to buy a house, go to moneyguy,.com resources, make sure you check out our home buying checklist. You can check out the home buying affordability calculator to make sure that you're making that decision. Well, so that's kind of the first piece people that want to buy. But now, Brian, there are a lot of people that are thinking, man, okay, with the rates coming down, does this mean that I need to refinance? You know, you said it's a three year low in terms of mortgage rates right now. If I'm someone who got a mortgage a year to three years ago is now when I need to go ahead and rush to pull the trigger to refi.

[Brian Preston]

Well, I mean personal finance is very personal. But what I would kind of take into account is, is the mortgage rate 1% lower than what I got. And if it is, I would start, you know, crank up the spreadsheet, whip out the calculator and start figuring out where. How does this pertain to me? And I'd even probably go on our website, moneyguy.com, go look at our resources, go look at our ARC, search our archives. We've done a lot of content on refinancing and maybe even you even consider before you do refinancing, rate modifications, other things, I'm going to give you the terminology so you can have a great place to start your research. But this is something that there potentially could be some opportunities for you.

[Bo Hanson]

All right, so we've talked about what rate cuts could mean for investors. We talked about what it could be for home buyers or homeowners. But then there is sort of a third group of people that falling interest rates could have an impact on. And we've just kind of dubbed these savers. What does this mean, Brian, for our savings account?

[Brian Preston]

Well, this is, I'm going to give you kind of a behind the curtain. I'm just giving you my thoughts on this is that I think that once again the Federal Reserve as well as the market in general are trying to figure out how you navigate interest rates on savings for the long term. Because real as we went for over a decade where you made absolutely nothing on safe investments or perceived safe investments like your cash and cash equivalents, what did that mean for older investors? It meant that you had to go out on the the risk spectrum. You had to go put your money to work to actually get any yield whatsoever.

[Bo Hanson]

Yep.

[Brian Preston]

I think when people because realize we did this, like I said, for over a decade. So I think everybody was worried, hey, whenever we flip the switch to go back to higher interest rates, what is that going to do to the markets? Because we've been essentially taking this drug of steroids for the economy for so long, they flipped the switch and fortunately the whole thing just didn't implode upon itself. A lot of people were nervous. So I think now that we've come to the other side where we're now at these high interest rates, from a historical standpoint, the market's probably thinking, hey, there's a balance here, that it would be nice for older investors, just like traditionally and historically, to be able to get 2, 3, 4% just on their cash equivalents, a risk free rate of return. Let's not go back to zero like we were. But, but how do you navigate that to. Because there's a balance here. Older investors need to get something without having to take risk. But yet if you keep interest rates too high, younger investors who are trying to buy stuff through debt like, you know, houses, cars and everything else, they're paying a higher premium on this. So you can now quickly see where the rubber meets the road on how, how does the economy navigate this? So I think that my prediction is, or my thoughts are we're going to see some continued pressure down with interest rates, but we're not going back to where we were. If you think that we're going back to 3% mortgage rates or you think that we're going back to where you're making a quarter of a percent on your savings account, I just don't see that.

[Bo Hanson]

It seems unlikely.

[Brian Preston]

I think because we passed that threshold where we were able to turn interest rates back on and it didn't completely implode the system. Why would they want to go back? I know yes, it would be great in the short term to juice the returns, but it would, it would not be great for the long term viability of things.

[Bo Hanson]

So I think the big thing, the big takeaway we would have you take away from this meeting last week is that when you have a financial plan in place, a really good financial plan should be good before economic circumstances change. It should be good during economic changing circumstances and it should be good after. That's why we don't think that there should be a lot of knee jerk reactions from you as an investor, as a homeowner or as a saver. But we do want you to be mindful of it. Are there things that you ought to be doing or ought to be changing? Should you be automating, increasing your saving, buying more consistently, refinancing the house, beefing up your emergency fund, moving it to high yield. These are all things that you can do to optimize your financial life. And that's what we are in the business of doing. We believe that there is a better way to do money. And we show up every Single Tuesday at 10am to help you guys do that. And one of the ways, Brian, that we love getting to do that is by answering your questions. So right now we have the team out in the wings collecting your questions. If you want to get our take, if you want us to weigh in on something in your life, make sure that you get your question in the chat. So with that creative director Ribe, I'm going to throw it over to you.

[Reby]

From Kevin to kick us off. It says, why don't finance guys ever recommend gold? It has outperformed S and P since the year 2000. I figured you'd have something to say about this.

[Bo Hanson]

I think it's always so funny when people pick any specific investment or specific asset class. Like, hey, why don't you guys recommend this stock? It outperformed the S and P from this date to this date. Or why don't you pick this asset class? Because this outperforms this date to this date. And what's really interesting is if you move your timeline, whenever you're like comparing two different types of investments, if you move the timeline, there are going in most circumstances to be periods where one investment outperforms another and other periods where that same same investment underperform. So one, it's a little bit of a flawed argument trying to decide on a specific time frame, how to frame your investment decision making. Rather we think instead of looking at specific time periods or time frames, it makes sense to step back and look at the fundamentals of an investment decision. Why am I or why does this specific type of investment or type of asset make sense in my situation? And when we think about comparing something like the 500 largest publicly traded companies in the United States relative to a precious metal piece of bullion, a commodity, they are not the same. And the risk and reward characteristics they offer are not the same. Would you agree with that, disagree with that, want to fight about that? And what are the reasons why you don't get super excited about gold?

[Brian Preston]

Yeah, I wanted to, I wanted to give the basics of what my thoughts on gold are. Is what is it? Gold is a holder of value. That's really how you have to look at gold. It's a way to kind of, you can look at it against inflation as an inflation hedge. You can look at it as something that if all else breaks free, that since there's a limited quantity of gold on the planet, this could potentially be a holder of value for you to barter and sell goods. Now, now that we've kind of understood what gold is, let's talk about how you actually use it in a marketplace. Is that as an investment? What do I look for when I invest? Is that one of the key things I want to know is what is this yield? I mean, because when I buy real estate, yeah, when I buy real estate, when I buy stocks, when I buy bonds, I'm like, if I'm going to use my. I'm going to trade my labor to create this money, and now I'm going to use that and put it to work, what is it going to pay me back? And unfortunately, gold has zero yield, meaning that it's not going to pay me rent that adjusts for inflation. It's not going to pay me dividends, it's not going to pay me interest. The only way I make more money on gold is, is if the next person that comes along in the marketplace is willing to pay more than I paid. It's a holder of value. It is not a working asset, meaning that, you know, if I have a lump of gold right here, you know, let's just say I built this table out of gold. Or like our video editors in a recent video, they just started stacking gold all around us. We could come back in 10 years and that gold would not change. It's not a grown. It was not like a basket of rabbits. And all of a sudden you have more rabbits. It is just the same amount of gold. So then you ask yourself, okay, well, what's. If it's just a holder of value, what does this mean? Are there any downsides? Well, also remind people, when you have something that's a holder of value and a good size of value for a small amount of goods, people can rob you. So now we have the problem of we have to pay to keep it safe. We have to pay to. To how you turn this into currency? Because it's not like in old days. I always think when people buy gold, I'm like, what is this actually going to do? You think that you're buying this? The question always comes up when the economy is going to crud. Neighbors will come to me and be like, how much gold do you own? And I'm like, why do you want the gold? And they always like, because this place is going to crap. And I'm like, okay, let's follow that line. Of thought all the way through, your thought is that when this system implodes, meaning, let's say the United States just completely poof, Goes away, you think that having gold in an account is going to be the way that keeps you protected from this systemic risk? And they're like, yeah. And I'm like, that doesn't seem viable to me. I mean, it seems. Because if you have to hold it, the weight, the quantity, it's just going to be hard to protect it because somebody's going to come along with guns or something else. And just if the system loses laws and we go to complaints, complete chaos, how is gold going to protect you? That's why I'm not willing to say. I mean, you have to have gold with ammo, with water, with food, with gardens. It just is a preposterous thing. And after, you know, I don't look at it that way. So that now that I've thrown a lot of cold water on this investment, let me tell you now, when people approach me about it and say, hey, Brian, I want to buy some gold, I'm like, great, how much do you want to own? And as long as it's less than, you know, 5%, 6%, I'll be like, all right, let's go figure out how we do this. Or we go buy this in your ira. We go buy this, the etf. How do you want to. How do you want to do this? A little can go a long way for you. But if somebody comes to me and say, I want 25%, because I think the whole system's going to crud. So I want to load it up, I think there's a bigger discussion there. And then I always say, I don't. That's not. I don't think that this is going to give you the protection you think it's going to give you.

[Bo Hanson]

Yeah, I love the way even frame the question, Kevin, was, why don't finance guys ever recommend gold? Not say, it's not that we don't ever recommend gold. It's that what we try to do is we look at problems that exist and we try to find, okay, what are the most effective and efficient ways to combat that problem? Okay, so I'm concerned about inflation. Well, do I think gold is the best way to combat inflation? No, I think there are other ways to do that. Okay, well, I want a store of value. Do I think that gold is the absolute best way to store value? No, I think there are other things that can do that. And so oftentimes, when you go down that line of thinking of, okay, I have a problem. What's the most efficient and effective way to solve that problem? Oftentimes gold just doesn't rise atop the list. But personal finance is incredibly personal. So if you're someone who wants to have an allocation to gold, we're not going to fight you on that. We're going to tell you where the guardrails, where the boundary should be, and why it may be less than optimal or less than the most efficient solution. But if that is your investing bent, I'd say that's okay.

[Brian Preston]

Yeah. And past performance is not indicative of the future. Always. I mean, that cherry picking since 2000, I'd have to go facts. Check that first. I don't, I haven't done that. But it just seems very. I mean that would make me. Reversion to the mean. To the mean is a real thing. Did it have its best days? Because we just came through some uncertain periods and now are we going to be stagnant for another 20 years? Because what's funny, I'm old enough that I made it through the last inflationary fear period back in the 70s and 80s. And it's funny how there were periods where gold was just trash. Because when you have really big concentrated returns, there might be a period of time where it's not so concentrated. Because reversion of the mean is a real thing.

[Bo Hanson]

Yep.

[Reby]

Well said, guys. Thank you, Kevin, for the question. I have another question here from Leandra Jo. It says you've given several people on Making a Millionaire, our show where you talk with real life people about their finances. You've given several of these people homework to simplify their retirement accounts. Should we always roll over 401ks from an old employer into the new employer's 401k or into an IRA?

[Brian Preston]

Both. There was only a deliverable. Somebody had created something that would let you go through a decision matrix to figure out what do you need to do with these assets.

[Bo Hanson]

That's a great, that's a great thing. I love how Leander asked this question. Always. That's just not a, that's not a. It's not a word that we love to use because always is so certain and so finite. Is it often? Does it often make a lot of sense to think about consolidating old retirement accounts? Yeah, but is that always the best? No. And so what Brian's alluding to, we have a great resource. If you go to moneyguy.com resources, we have a resource titled 401k flowchart that's not what it's called, but that's basically what it is. It's what do I do with my old 401k? It'll actually walk you through the things that they do. Look at that bamboo. Got an old 401k. Here is what to do with it. Because you really have four, but not actually four. You have three options. So option number one is if you have an old 401k, you could cash it out, take the money. That's never a good option unless you were in retirement planning on spending those dollars. Because if you're below 59 and a half, you're going to pay penalties. And if you're below 59 and a half, you're also going to pay taxes on those distributions. So cashing it out never makes sense. Well, then you got to decide, okay, do I leave it where it is? Do I roll it to my new 401k or do I roll it to an IRA? How do I know, Brian, which one of those three it makes sense to do? What are the things I should think through?

[Brian Preston]

Well, I mean, you got to look at your. Yeah, look to see what the internal expenses are, what the investment options are. You know, there's all kind of alternatives and opportunities that because index funds, are they available? And because every plan's a little different. If you're with a big four Fortune 500 company and a super low cost plan, it's good, it's not going to be, it's not going to benefit you to transition that into your new employer's plan. If it's a small company with an insurance based product, you should probably stay. That's why we give you the decision matrix is you'd probably be better off staying. But I could invert that and say, hey, if you worked for a small company, now you're going to a company that has a really kicking 401k plan. It is going to probably benefit you to figure out if there's a way you can consolidate and bring that into the brand new plan because it's just that much better. Or maybe you go from bad small plan, bad big plan and you look at and they don't have index funds, they're expensive because it's just the golf buddy of the owner of your company who set up these different plans and then you go out and you, you might not, might benefit you. Especially if this is a large sum of money to consider rolling that into an ira.

[Bo Hanson]

Yep.

[Brian Preston]

But, but there's a, there's a things. Homework is A great word because it means you have to do some research to figure out how this impacts you and your personal finance situation so that you can stick the landing on making sure this somewhat. It's. It's not hard, but it's not a simple decision. You have to just go through the work and work through the exercise to make sure you're doing this right.

[Bo Hanson]

But if you download the Deliverable, it will literally walk you through, okay, can you pull it up one more time for a team? It'll ask you questions. Is this your situation? Yes, do this. No, do this. Okay, if yes, then do this. If no, then do this. It literally kind of makes it dummy proof. That's a bad way to say it, but that's got. That's what we were going for because we want to make it as easy as possible. But you have to do the homework to make sure you're making the most optimal decision.

[Reby]

Yeah. So we always say personal finance is personal. That's why we have moneyguy.com resources. So you can get that free things like that free download and actually apply it to your situation. So be sure to go take advantage.

[Brian Preston]

We did say the name of that so that our podcast listeners get that too. Right?

[Reby]

We did the. Got an old 401K.

[Brian Preston]

Here's what to do with. Got a 400 101.

[Reby]

Something very similar to that on the website.

[Bo Hanson]

You would think that we would do a better job of memorizing the names of our delivery.

[Reby]

I know. Honestly, I should know that I can.

[Bo Hanson]

Always tell you what they're about and what they tell you. And the takeaway, I just, well, remember.

[Brian Preston]

Because we put a lot of effort in designing these things and making them, but it's always. It's just the catchy headlines. Always forget. Because I remember more of the substance than I do the sizzle.

[Reby]

Are you called gotten old 401k? Just double checked.

[Bo Hanson]

Are you really good with names?

[Brian Preston]

No.

[Bo Hanson]

Yeah, See that? So like similar if I meet you right, like, I might remember your face or I'll probably remember some nuggets of our conversation, but I'm just not great with names even. You know, like the little trick they teach you where you're supposed you meet someone, you're like, oh, hey, Ruby. It's so nice to meet you, Ruby. Are you having a good day, Ruby? You're like supposed to say their name three times right when you first. First hear. And it's supposed to solidify in your mind. I've. Now that's become so rote for me. It doesn't even work anymore. And I'm like, I do it. And I'm like, gosh, was it. Oh, was it. What was her name? I'm not good at names. That's what I'm saying. Are you good at names?

[Brian Preston]

Man, I feel like we're on the jungle boat crew, you know, and they always, they say, there's the elephants, they're known for their incredibly long memory. And then you see another elephant, there's the elephants, they're known for. That would sure help me with my job. Bo just asked me the same question twice, so I felt like I'm on the jungle cruise. And he's. He's the host.

[Reby]

All right, Good to know.

[Bo Hanson]

Someone's asked.

[Brian Preston]

Oh, my gosh. They, they didn't. I don't notice.

[Bo Hanson]

No, it's because I keep popping my neck. Someone asks, my neck was sore. No, it's not. I just, you know what's funny is I notice I'm always so self conscious of this. This. We're just going off the rails here. Whenever Brian's talking, I always kind of lean like this and I'm always looking this way at you, and I'm like, man, that's kind of. People are looking in, like, at my ear. I should probably do a better job of trying to like, do like this, sit straight and look at him. But then I keep turning my neck and it's kind of a funky way. These are the things that go through my.

[Reby]

Broke, don't fix it, but you're fine.

[Brian Preston]

He did that so he could cross his arms and pop those pectoral muscles and biceps out.

[Reby]

That might be the real reason. All right, let's get back to personal Finance with Matthew C's question. He says, Are REITs a good strategy if you want to get into real estate without having to deal with. With owning rental properties? And REITs are real estate investment trusts? Maybe you could talk a little about what those are. Doesn't know.

[Bo Hanson]

I love it. A reit, exactly what Ruby said is a real estate investment trust. And oftentimes the way that they're structured is it's a holder of real estate or a holder of multiple different types of real estate. And so Matthew's question is, is that a good strategy if I want to get into it without having to deal with owning rental property? One thing you even have to discern is, okay, if I'm going to go buy a reit, a real estate investment trust, how am I going to purchase that? Am I going to purchase it through something like a publicly traded mutual fund or publicly traded etf, or am I going to go buy into like a private equity, private placement type REIT deal? Because even those are unique and distinct. I will tell you from investment perspective, when we build out client portfolios and we look at allocations, we love investing in real estate and we love using real estate ETFs, Real Estate Mutual funds, because it allows you to get very liquid public access to real estate across diversified modalities. So I'm not just buying a rental property or a piece of commercial real estate in a specific area, in a specific neighborhood, community or town. I'm able to go out and diversify broadly across there. So we think that rates are a wonderful way if you're going to buy publicly traded rates, to get real estate exposure. Now, on the other end, if you're just trying to do a private placement where you're investing privately in a real estate investment trust and it's an illiquid holding or there's some specific period through which you have to hold it, that may or may not make sense as to the best way for you to begin to get your real estate exposure. Do you agree with that? Disagree with that?

[Brian Preston]

No, because that's a great lead in to. Because, Mike, REITs are good, but then they also leads to. How about re, you know, real estate mutual funds, real estate index funds. Because we've, we've used all of these. We've used all three of those, including in a former life, I've even put people in private placements when I worked for a much larger. Actually, I can't say that anymore because we've gotten to be big, too. We're larger than they were back then. But. But yes, that the firm I previously worked at was like doing those private deals. We do not do a lot. We don't do those private deals. I don't know why I was about to say a lot. We don't do those private deals. One of the things that I know just from our own investment committee meetings in the past was there was a period where a lot of just the real estate, whether it was REITs or REIT Mutual funds or index funds, I should say the way they were structured is they had a lot of malls and other things just because that's the nature of a lot of the commercial real estate and there was some exposure risk. And so you wanted to have managers who were being very proactive in making sure that they were looking to the future on how they were making decisions for their real estate portfolio. So all that stuff comes into play. Whether you go to do an index fund and active management. I do think real estate is one of those inefficient marketplaces. As much as I love index funds, I absolutely love index funds. The right manager potentially could add some alpha to your performance. So do some due diligence, do some research so you're an informed investor to know, hey, what's the best structure to get my real estate? And then the last closing parting comment on this is realize for the typical American, every time I see the fred data from the Federal Reserve on where their net worth is. Americans don't have a real estate problem if they've, if they bought a primary residence. Their problem is building up assets, investment assets outside of real estate. So don't sleep on the fact that you probably have a big real estate exposure just with your primary residence. Well, let's make sure we're building up some assets outside, outside of real estate too.

[Bo Hanson]

I'm always amazed at how rarely people and this is why if you don't do an annual net worth statement, you absolutely should. We have a free template you can [e-mail] resource or if you want to go to the full on dashboard tool, you can go to learn.moneyguy.com I'm amazed at how often people neglect that. Hey, okay, I've got my portfolio and I've got this much in large cap and I've got this much here and that much there. And then we ask the question, yeah, yeah, but you realize you also have this huge home that you own and that's a big asset on there. And then you have this other problem like you have a ton of real estate exposure. When you look at your global, your total portfolio allocation, a lot of people don't even realize they're real estate investors.

[Brian Preston]

Yeah, but we also, I mean I want to, I always like to be transparent. We always tell people we use the accounting term of lower cost of market or of cost or market. So you, whatever you paid for your house plus improvements is what we put on our net worth statements. A lot of people don't like that rule and I do. That is because for most of us your primary residence is a use asset. And I don't want you inflating your net worth statement for something that provides shelter for your family. The only way you can turn it into an asset that's actually usable is to sell it or to go take debt on it, which neither one of those things are the easiest processes to go through. Great.

[Reby]

Learn.moneyguy.com. if you want to check out the free full version of that net worth tool.

[Bo Hanson]

There's only four ways that I'm trying to think this. There's only four ways that our primary residences add value on our network statement. Right. Check me on this.

[Brian Preston]

Okay.

[Bo Hanson]

You pay, you pay down the debt. So the debt goes down. You don't have a mortgage anymore, so you wouldn't know about that. You make an improvement because we do cost plus. So whatever you paid for it, plus. Or you sell the house, you end up selling it and you capitalize on the equity put in. It's only those three. And the fourth one, there's not one. I think it's just those three.

[Brian Preston]

Like refinancing or taking.

[Bo Hanson]

Yeah, but even that, I don't want that.

[Brian Preston]

I mean, there was a, there was a season where I remember I had prospects who came to me where some advisors were out there essentially creating package products where you'd go get a home equity line and then you take the proceeds and put it in the markets.

[Bo Hanson]

Dude, so aggressive.

[Brian Preston]

That's. I don't know. That's not. Now the other side is my debt crusaders are going to be like, well, that would mean you're, you're just like Dave and you want to pay off the mortgage. I'm like, no, there's a lot of real estate friction costs. That. That's why. Also why I wouldn't just go out there and do the loans. I'm not that type of investor.

[Reby]

All right, do it. Hewitt has a question for you.

[Brian Preston]

Next.

[Reby]

I need to buy a car after mine broke down. I have a sinking fund on top of my emergency fund to buy in cash.

[Bo Hanson]

Sweet.

[Reby]

Should I Finance with 238 to maintain liquidity? Maybe 50% down. I'm 29, married with two kids, and on step seven. What do you think? Is he a candidate for the 238 car buying rule?

[Bo Hanson]

How big, how big's your portfolio? How old are you? What's your savings rate look like? What are your long term goals? How's your account structure structured? What's your other debt look like?

[Brian Preston]

But if he's just step seven now, I would put that means he's saving and investing greater than 25% if it's step. Because he's given us the context of step seven and he has a separate.

[Reby]

Sinking fund in cash.

[Brian Preston]

But Bo is right. I was about to make a statement. I was about to make a statement. I was about to say just pay cash. But then I see 29 and that always scares me because when you're so young, you're just not guaranteed that you've had enough time to build the assets up underneath you. Yeah, I would need more data.

[Bo Hanson]

So our preference is, and a lot of people don't recognize our preference when it comes to buying automobiles. We want you to pay cash. We would love for every automobile you purchase you to pay cash for.

[Brian Preston]

Because that will keep you honest with your what you can afford to buy. You know, it keeps the, the eyes and the wallets all connected versus you just trying to look richer than you actually are.

[Reby]

So wait, so why should a 29 year old not pay cash? But I kind of get what you're saying.

[Bo Hanson]

A lot of people can't pay cash or in order for them to pay cash, there is an opportunity cost that is greater than they should take on. And that's what I was saying for a 29 year old man, if you're 29, you're right on that cusp of 30. And we say that for 30 year olds, by the time you get there, if you want to be saving the way you should be, your liquid portfolio ought to be roughly equal to one times your annual salary. So let's assume that maybe you didn't get started till a little bit later on in your 20s and you've built up this sinking fund, but you're kind of behind on saving and investing. Well, we know if you go to moneyguy.com resources, you check out the wealth multiplier. I don't know where it's at, but the wealth multiplier for a 29 year old is almost 23 or is a little bit greater than 23, because I know it's 23 for a 30 year old. And so that means that every dollar that you put to work can turn over 23 times by the time that you get to retirement. And so one of the questions I would think through is, okay, I could pay cash for this car, but does that make the most sense if those dollars could potentially do more for me by working inside of my portfolio, inside of my armored dollar bills? Because being at step seven tells me what you are saving today, it does not tell me what you saved last year, the year before, the year before. So I'd want to know all of the other extenuating circumstances to be able to determine if financing could make the most sense for you or if you should pay cash.

[Brian Preston]

But let me give it the other side. Give this thing. Balance is if this is a 29 year old who's already well beyond one times their investment portfolio is already greater than one times their income. And they have this money on top of their emergency, their emergency reserves and they've gone and they appropriately have stuck the landing on steps one and four. So their reserves are truly are fully funded. I'm going to probably error on them paying cash. I love this. Yeah, agree. Because that with that additional context that's going to keep them from, you know, it's probably going to keep them more in the Corolla to Camry versus thinking Land Cruiser. You know, because that's the thing is these cars, they're such emotional decisions for a lot of people that people get themselves in a lot of trouble. You know, I have done content and I've talked to you guys. You know, one of my biggest complaints is my wife's European car. And no, you know, because these. But what's funny is we've had to. And I'll do more content. We've had to replace that car because the air conditioner went out and that's a disaster here in the South. But when we were at the repeating the same silly mistakes again and going to a nice European dealership, it floored me to see how many young 30 somethings were in this dealership with tricycle motors, you know, crawling all over these nice leather seats. And I'm like what, what are these.

[Bo Hanson]

People that means toddlers doing?

[Brian Preston]

What are they doing here? I mean, why are they here when they should probably be buying a much more affordable car? Because what their value add and where the wealth building and the journey is is actually saving and investing as much in that bank as possible and investments versus buying, you know, something that you're going to look really cool in for just a, you know, for a period of time. That, that stuff drives me crazy. There's a time and a place and that's. I tried to make that point when I wrote Millionaire Mission when I talked out in the example I used in the book was buying a Corvette. You know, for a 25 year old to buy a Corvette versus the typical Corvette owner is actually in their early 60s, which Chevrolet doesn't want you to know that by the way because they want you to think that all the young beautiful people are buying Corvettes when they're in their 20s and early 30s. No, they're buying them when they're really having a hard time getting in those low riding seats. Think about that. Because that's what there's a time and a place. It's better to be rich than to actually look rich. So I just want you to think about the timing of silly purchases like European SUVs.

[Bo Hanson]

My wife is on an airplane right now, so I know she's not watching the live stream. So I can say this. You know, she is not happy about the car that she drives. And like she, because she said, she tells me, hey, I'm a car person. Which I'm like, all right, that's cool. And, and she's like, oh, you look how beautiful that is. Look at this car. Oh, look, it's so beautiful. And this one's so beautiful. I'm like, babe, you know what's not beautiful? Chicken nuggets smashed into those seats, French fries underneath, Milkshake smoothie on the. You ever had this thing and we've all, every parent has ever had this, right, where a kid's in the back with a milkshake or a smoothie and the, the straw flicks and it flicks the thing across the ceiling. You know what I'm talking about?

[Reby]

Or they just have a spoon of ice cream.

[Bo Hanson]

Every parent knows I don't want that. I know some fancy car. So I keep telling my wife, I'm like, hey, for this season, for this season right now, let's do this. Let's do this thing. It makes the most sense or whatever. And we're going to have that. It makes me think about the 30. You talking about the 30 year olds that you see in the dealership with all the kids running around, even if you have the money, even if you just. Is that the right time to be driving that?

[Brian Preston]

I just wish it's back to that commercial where people walked around with numbers over the head where you can see. I just would love to know what people's investable net worth.

[Bo Hanson]

Oh, wouldn't that be awesome at the car dealership. So awesome.

[Brian Preston]

I mean, I would love to know because when I that way, when I see the young 30 something with the kids, you know, looking at these expensive cars and I'm like, please max out your 401k first. You know, please let me know that that is taken care of, that you're doing 25%, that you've, you're ahead of the curve, not behind the curve because I just don't think that's the exercise a typical American does.

[Bo Hanson]

Yep, she's hard. She is full court pressing me.

[Brian Preston]

Well, I'm sure my situation doesn't help, you know, the decision that we made. And it's, but you know, I, I.

[Bo Hanson]

Show the picture, she's like, see, see?

[Brian Preston]

No, no, no.

[Bo Hanson]

You know what?

[Reby]

Watch this bathroom.

[Bo Hanson]

He didn't have milkshake on his ceiling.

[Brian Preston]

But we're in our 50s now, and that's what I will tell you. It's kind of like, you know, I was thinking about Simple Path to Wealth Collins.

[Bo Hanson]

Yep.

[Brian Preston]

JL Collins. We reacted to one of his videos and he was talking about you do reach a size a portion of life where it goes beyond finances if you've done it right. And that's what I had to. Because I'm still a financial mutant. I'm not a tightwad anymore, but I'm definitely a financial mutant. Sure. Is that I've had to let go of some things that younger versions of myself wouldn't have. But that's because of the time and place argument is that it was better I was in this discipline stage here. But because that's what was needed to create success. But to. To. To hold back from something that would bring happiness to my. My wife.

[Bo Hanson]

Sure.

[Brian Preston]

In my 50s is more miserly when that's not going to move the needle whatsoever in, in. In the financial independence or even net worth discussion.

[Bo Hanson]

Yep. That's what I tell. I keep telling my wife, but I'm like, it's. You know, you do like your brave heart thing.

[Brian Preston]

Hold. Yeah, hold.

[Bo Hanson]

That's what I keep telling her. She's like, so whenever somebody asks, like, oh, hey, do you love your. The car that she drives? She's like, no, but don't worry, I'll be driving an awesome car when I'm 90. I'm like, okay, thanks. Thanks, sweetheart.

[Reby]

You guys are funny.

[Brian Preston]

Or I just like being in early 50s or early 50s. Early 50s.

[Bo Hanson]

Early 50s.

[Brian Preston]

Early 50s. Still feels pretty good.

[Reby]

Late 40s, late fort.

[Bo Hanson]

Come on, let's not rush this thing. I got little kids. I got. I got a two and a half year old. We got. We got some time.

[Brian Preston]

He's got some chicken nuggets to get through.

[Bo Hanson]

Chicken nuggets. We got to make it through, you guys. Oh, man. Okay. So. Well, okay. Yeah, I'm gonna tell you this one. So we bought this how I told this story on the We. I don't know. My wife got in a car accident a couple years ago. She wanted to get a big suv, so we got a big suv.

[Brian Preston]

One of the.

[Bo Hanson]

It was like a, you know, not like super swanky, but it was fancy. It was nice, right? And they had done this thing in this model year where they put the t. The TV screens in the back extended off the back seat. So it wasn't like built in. It was like. It was like basically like an iPad.

[Brian Preston]

And it came from the factory like that. Wasn't this an aftermarket?

[Bo Hanson]

No, no, this is like that's how they design them. My middle daughter, who is now 8, she was like 3 at the time or whatever. And I remember it was less than three weeks into owning that car. She put a foot like just right straight through that screen. And I was like, oh my goodness, are you kidding me? And that's why I told. I told you. I was like, not, not this season. Not this season. That car ended up breaking down a few times. And so we were able to, you know, get out of it and it all worked out okay. And now she's in the perfect car for our season and station of life right now.

[Reby]

Listen, I am a self proclaimed not a car person at all. So it's not really fair for me to speak to. But it is true when you have kids, like, you're kind of setting them up for failure with that.

[Bo Hanson]

Right?

[Reby]

Like, especially with little kids. I'm sorry, buddy.

[Bo Hanson]

Why would you have a pro? Like, because, you know, like, if you want rear entertainment, why would you have protruding screens?

[Brian Preston]

Here's what, here's what I'm saying. Here's what I'm. I'm realizing. If both. Remember the. If you're king for the day exercise, Bo would. Would mandate everybody in the messy middle just gets minivans because then your kids, then your kids can't ding car doors for the people around them. They don't put the screens right in front of you like they do in some of the SUV's. King for the day Bo's putting everybody in a minivan.

[Reby]

It just makes you just lost a.

[Bo Hanson]

Lot of votes it just made.

[Reby]

Including your wife's.

[Bo Hanson]

Yeah.

[Brian Preston]

That's why it's not elected official. It's king.

[Reby]

King. That's right. There's no votes there. Just kidding.

[Bo Hanson]

Oh, man. Well, we ask more questions.

[Reby]

We got to go on some more questions. That was some good stuff.

[Brian Preston]

Otherwise, this is going to be the shortest Q and A. We're going to be like.

[Bo Hanson]

We're just talking about two questions.

[Reby]

We have a foo question for you. Financial order of operations.

[Brian Preston]

Oh, here's where you be trying to break.

[Reby]

Says, what step of the Foo would you think is the best time to consider a quote unquote, next endeavor?

[Brian Preston]

We got this.

[Reby]

I'm currently in step seven of the Foo with five times of my yearly expenses in retirement, so seems to be doing well. We don't have an age, but what do you think about planning for a next endeavor in light of the Foo?

[Bo Hanson]

I want you to, I want you to answer because oftentimes when you use that language, next endeavor, that makes me think about the, the fire movement or what we like to talk about. It's not so much financial independence, retire early, it's financial independence, next endeavor, moving on to the next thing. But this, Caleb's question makes me think that this is more of a career shift thing. He's using Next endeavor. But at what step of the food do you think it's time to consider changing? Time to consider making a shift? Is that the way that you're reading this? Are you thinking this is actually financial independence?

[Brian Preston]

Well, I mean, either way I love because guess what, Caleb, you're in the right place. Step seven because so much of steps one through six is mathematical and features meaning that we're trying to keep you from make avoiding the desperate decisions of not having enough cash, making sure you're getting the free money from your employer. That's step two, avoiding the high interest debt. Step three, back to cash again. Because we want to go beyond just emergencies, a little short term emergencies with step four, Step five and six are all about trying to build investable assets, but with a heavy dose of tax planning built into them. It's not until you get to step seven where we go beyond just the basic behavioral things of saving and investing 25%, all the mathematics and the tax planning that goes into steps five and six that seven is saying, hey, now that you're at this point that you made it through the basics of finances, how do we actually use these assets? And that's why I love in step seven is that we're taking really the temperature of are we ahead of the curve, behind the curve, right where we're supposed to be. And I love that you gave the concept that, you know, the feedback that you're five times your yearly expenses. But we don't have the context of how old you are, what's your income and other things. Well, we do. We know yearly expenses, we don't know your income. But there's still more that I need the data points so I can make once again answer that question. Ahead of the curve, behind the curve, right where we're supposed to be. And then you get to add the curve ball of, not only of ahead of the curve, behind the curve, but how do I want to use this as a goal planning tool? Because it's one thing if you're extremely successful, but then you put goals upon yourself if you're somebody who makes $100,000 and you're saving 25% of it and you're doing really good things. But you, you tell me, hey, I want to be able to spend $500,000 a year in retirement. Well, look, that's going to require some big things for you to get out of these assets to build up a big base underneath you. So your goals definitely impact what you need to be doing in step seven to reach it. So there's just, that's why personal finance is very personal and that's why I can give you all the free advice in the world to reach a level of success. But when it comes down to actually maximizing and implementing, that's where the abundance cycle always kicks in is because to reach you and help you maximize and become the best version of yourself, once you get to be close to that seven figure status, that two commas we're going to need know more about you. You. That's why all of you who watch our content and you're like, gosh, why do these guys not give more content about the 50s and 60s? It's because so much of that is personalized to your fingerprints of your personal retirement and your life that it would be the most boring content in the world. Because it depends. It wouldn't catch a big net full of people. That's why it's so much better and easier if you were just creating content for everybody, just assuming they're intentional. Debt is because that is the majority of Americans. I feel like we're in much more shallow water with, with trying to help people navigate this and become maximizers of this. But I know you've had some ideas on how we expand that envelope even more. Sure.

[Bo Hanson]

Do, can I, can I ask, do you mind, can I ask him to opine a little bit here? Ruby, are you okay with that? I'm going to expand the question a touch just because this wasn't exactly Caleb's question, but I think it was tangential and it, it'd be, it'd be valuable. When is it or, or what should your thought process be if you want to change careers or change jobs? Because, because I want to, I want to like hone in on that because you have some experience. But both having done that as well as we've employed a bunch of career changers here. How does someone think through that? Like when is that something. You have to wait until step seven before you can change a job, before you can shift a career, before you can do something else?

[Brian Preston]

Not necessarily, but it is going to require you to put, put on your 3D glasses. I mean, that's the thing, I think so many people, when you make big changes in your life, just make sure you've measured twice, cut once. You know, a lot of, a lot of what society will tell you is just let your follow your passions maybe, I mean, but you better make sure you do your work because otherwise your passions can get you in a lot of trouble really quick if you don't include some of the math and the reality of how you're going to come out on the other side better and actually survive. This is because that's why I put on my 3D glasses with any big life decision. And by the way I did this, I have a no hypocrite policy is that when I went out to start my first company, I actually did the spreadsheets. Every now and then I go look at them for fun. I have them in my fire safe here at the office. Beau's seen them. It's kind of fun to go back and look at what I was thinking back when I started to laid the groundwork for all this that we, that we've built over the years. And for those of you who are brand new to our content because I know constantly, if you look at our numbers, 40% of your brand new constantly coming through the doors. When we say put on 3D glasses, I'm telling you, you have to before you make any big financial decision that's going to jeopardize what you're doing is you got to create three plans and I would, you know, and it's going to be customizable to, to what you're trying to accomplish. For me, I'm doing this off memory. I think I did a five year last look forward because I figured it was gonna take me a few years to get the business up and running. And then I wanted to kind of know where the family was starting to catch traction on reaching, saving and investing for the future. So I did a five year goal for myself and I did three different versions. I did the dream plan. This, remember we're talking about 3D. So there's gonna be three Ds here. The dream plan is living your best life. You catch traction sooner than you thought, everything works out, you are going to be loaded and rich and hopefully, holy cow, this is awesome. Do that plan because it's very motivating to see what could be. And here's what's fun about that dream plan is that if you really do this right, even if it's slower than you anticipated, I bet you even do better if you look back at this 15 to 20 years in the future than even in that dream plan. Because we always think linearly, not in an exponential fashion like real success happens. So do the dream plan. It's healthy, but it's going to be much slower than you probably are anticipating. Then do the down to earth plan. This is what you really think is going to happen. I want you to be honest with yourself. Put enough good stuff in, but also put in the things that are going to be struggles. Because like, if, you know, for me, my next endeavor was starting a company, I wasn't good at getting business, it cracks me. Everybody thinks that we're great marketers. I was not originally a good marketer. I was really good at building financial statements back in the day. Not so great at the marketing. So I had to build in that it was going to take a lot longer to get clients. That was the down to earth. And then don't skip out on the last one, which is the do do plan. This is you make this, you go into this next endeavor and it is a complete failure. What does that look like? What are you going to do? What are you going to pivot? How are you going to survive that? It's much easier to do that on paper and in the planning process than it is to live it. So I always tell people, don't skip out on doing that type of homework because you'll be better prepared for it. You'll also, that way when you're experiencing it, you'll be like, oh, I've been here, I've planned for this and I'll be okay. You know, so many things. What's funny is I think we have great instincts, Bo. And as I get older, I'm realizing like mental health, anxiety, other things. A lot of times the way you overcome any of these struggles is you have to address them head on because you're not that way. You're not worried about what's coming for you in the future or things that you've struggled with in the past. You have to address and let these things wash over you completely. We're doing that and that's what I'm telling you as instincts is we tell you to do this stuff on the financial side, see the numbers, actually experiencing the numbers so that you can be better prepared so it doesn't feel anew because you know, anytime you do something novel or for the first time, it's going to feel awkward. So we got to figure out how we get you reps or ways to experience it in the most Healthy way possible. And that's why I love doing the planning.

[Bo Hanson]

Love it.

[Reby]

Absolutely.

[Brian Preston]

That wasn't even a question. Caleb had a question but we took it into. We took it into some different.

[Reby]

Expanded upon it.

[Bo Hanson]

Yeah, that's asked her if I could have you opine and she said yes.

[Reby]

Yeah, I mean if you're going to do a next endeavor, you should think about everything you just said. So I liked it.

[Brian Preston]

We're not. This will not be the longest questions. We're not gonna break any question records here.

[Reby]

If you say so. I do have another question queued up, so we'll see what happens with this one. Kyle.

[Bo Hanson]

Rapid fire. See how quick we can answer maybe five or six more.

[Brian Preston]

Let's go.

[Reby]

I don't know if that's gonna happen on this one, but we'll see. Kyle S Says, hey, money guys, what are your thoughts on having a vehicle lease with a payment of $595 where my company refunds $175 per month. As long as I'm in the lease, I'm frugal in other areas of my life.

[Bo Hanson]

I don't know enough details here, Kyle. The way that you framed your question makes it sound like there's some free money going on. Hey, if you spend 600, we're going to give you 200 back. I'm using round numbers here. So should I take advantage of this thing? Should I be willing to spend this money in order to get this money back? Well, if. When I think about it that way, it's no different than like when you go to a store and they're like, hey, if you spend $150, you get this back. If you spend at the end of the day, if it's causing you to spend more money, it may in fact not be worth it. So what you'd have to do is you have to kind of look at your situation. If I was going to go buy my own car, pay cash, not have the outflow, not have the lease, what would my capital outflow look like? And if I'm spending that money anyway, the money's already going out the door. Maybe I'm gonna have a higher car payment and doing the lease is going to put me at a lower cash outflow and I'm get some cash back. I can do the analysis that way. But I would be careful of letting some sort of carrot or some sort of incentive encourage me or influence me to spend more money than I would spend otherwise. Agree. Disagree.

[Brian Preston]

One of. Well, we actually addressed this on one of our Making a Millionaire episodes where we had. She came on and I'm blanking on the.

[Bo Hanson]

There's a car allowance.

[Brian Preston]

Yeah, there's a car allowance. And what we. What we unearthed. Now I don't know if this is what Kyle's situation is, but she was go get the money either way. It was what made it deductible. And then I think it was so obvious. And I'll just use Kyle's example he just shared. Was it $175 a month was what he's gonna get back he's gonna get from the employer. If you multiply that by 12, that's $2,100. Let me go ahead and just. That's great to get free. I love free money. But if you think about the typical car depreciates, 2000 bucks is a blink of the eye.

[Bo Hanson]

That's right.

[Brian Preston]

I mean that is absolutely nothing. So you have to. You have to in doubt, zoom out. It's not only for the financial markets. It's also on what the big economic impact is. So I don't want you to go take on a bigger car more than you can actually afford or need just so you can get a $2,000 annual benefit that probably got absorbed in the first the moment you drive that car off the dealer's parking lot. Because a lot of these deals with leases especially go make you flip this car every few years. Now let me give you the other side of this. If you're in step eight and you're beyond financial decisions, this is a lifestyle choice because you realize that some decisions are beyond money, then okay, that's all right. But I don't want. It's back to what I talked about earlier in the show. I don't want young 30 somethings who have not maxed out the 401k. I've not funded the kids college plans, not done all these other very important things, but are somehow now expanding their lifestyle so they can look look rich. Because it's much better to be rich than it is to look rich. And I want to make sure you do things in the right time or place.

[Bo Hanson]

I don't know your age, Kyle, but man, $600 a month on a car lease. I'm just thinking if you're young and still building, $600 a month can do a lot of work for you in your portfolio.

[Brian Preston]

In the early ages. I do like. I mean I think about my own journey with cars. I mean some of the best driving cars are cars you can drive for 10 years and they're paid off for seven of those 10 years. I mean that's, that's some good wealth building years there if you have it. But I also want to make sure that because they're business owners, there's other things, unique things. I don't like absolute rules. I like the additional given the context so people can make the best decision with their finances. But that's where the personal and personal finance does come into play.

[Bo Hanson]

Love it.

[Reby]

We understand that personal finance is personal. And like we have shared throughout this episode, today in Live stream, we have moneyguy.com resources there for you all the time to hopefully help you take the concepts and ideas that we talk about and apply them to your personal situation. So be sure to take advantage of that by going to moneyguy.com resources and browsing all of the free stuff that we have available to you about all of these different financial topics. Whether it's buying a car, buying a house, rolling over your 401k, we have a lot of great resources [e-mail] resources. So thanks for joining us for the live stream and thanks for checking out those resources and hopefully it's just going to help you feel even more confident with your personal finance decisions so you can focus on what really matters.

[Brian Preston]

Well, it's almost like there's a better way to do money. Rebi and what here's what I want everybody who's out there watching to know is you have to figure this out yourself. If you're feeling like we know from the stats, whether it's Millionaire Next Door, whether it's the Ramsey Solutions research, even from our own millionaire research, approximately 75 to 80% of millionaires are first generation. That's probably a lot of you guys who are watching this and you're like, oh man, I don't know. What I don't know because I don't, I didn't grow up around money. I don't know how money completely works. We got your back. You don't have to figure this out all by yourself. You use the resources, use all the content we're creating so that you can have co pilots to help you navigate this. All we ask, the only catch is, is that when you reach close to that double comma mark as your is, your assets are starting to catch so much traction. They're like, whoa, can you believe I'm the CEO of this multiple seven figure enterprise? Or what will be multiple seven figures at some point? You know, consider the abundance cycle. Realize who planted the seeds of knowledge out there because we are the Johnny Appleseeds of personal finance. So you can then pay it forward with the abundance cycle. I'm your host Brian Preston, Mr. Bo Hanson, Reby and the rest of the content team.

[Bo Hanson]

Money Guy Team Out The Money Guy show is hosted by Brian Preston and Bo Hanson. Brian and Bo are partners with Abound Wealth Management. Abound Wealth Management is a registered investment advisory firm regulated by the securities and Exchange Commission. In accordance and compliance with the securities laws and regulations, Abound Wealth Management does not render or offer to render personalized investment or tax advice through the Money Guy Show. The information provided is for informational purposes only, may not be suitable for all investors, and does not constitute financial, tax, investment or legal advice. All investments involve a degree of risk, including the risk of loss.