X% of Young Americans Expect To NEVER Retire…

Summary

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Podcast Summary: Money Guy Show

Episode: X% of Young Americans Expect To NEVER Retire…
Hosts: Brian Preston & Bo Hanson
Date: March 4, 2026

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Episode Overview

This episode tackles the staggering statistic from a YouGov survey: 27.5% of Gen Z and millennial respondents think they’ll never retire or don't know when they’ll be able to. Brian and Bo set out to “turn that frown upside down” by sharing insights and proven strategies for building retirement confidence, even in a world with rising costs and economic anxiety. They dive into mindset shifts, tools for measuring progress, and practical steps to make financial independence not just possible, but likely—regardless of when you start.

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Key Discussion Points & Insights

1. Young Americans’ Retirement Anxiety

• Rising pessimism: Many young people feel priced out by high housing costs and inflation, thinking, “I can’t get ahead. I’ll probably never retire.” (Bo, 00:14)
• Survey says: Nearly 1 in 3 young adults expect to never retire or don't know when they might (Brian citing YouGov, 00:38).

2. The Power of Mindset: “Fire in the Belly”

• Having ambitious retirement goals (like retiring by 50–55) is vital, even if your plans change later (Brian, 01:39).
• Fulfillment from work is common, but financial independence should remain the aim.

3. “It’s Not Too Late”—The Value of Starting Where You Are

• Many success stories come from people who started late or in debt yet still retired comfortably by getting informed and making consistent choices (Bo, 02:13).
• Annual net worth statements are key tools, providing both a progress snapshot and a communication aid with partners (Brian, 02:45).

4. Wealth Building is Not Just for the “Special” or Rich

• Consistent savers—not just high earners or “silver spoon” babies—become millionaires:
  • 76.4% of surveyed millionaire clients got there by being savers/investors, not by inheritance or exceptionally high pay (Brian, 05:14).
  • About 80% are first-generation millionaires.

5. The Three Ingredients of Wealth Creation

• Discipline, consistency, and wise investment decisions matter more than high income (Bo, 03:34).
• Even teachers and modest earners can retire comfortably through smart, steady habits.

6. Action Plan: What Should You Do?

• Have a plan, no matter your starting point.
• Use tools like the “Financial Order of Operations” (FoO) as an all-weather guide (Brian, 06:49).
• Take personal accountability: “The best time to start…is right now. Today.” (Bo, 06:59)

7. Measuring Your Progress

• Use the “Know Your Number” course/tool to clarify if you’re ahead/behind/on track for retirement (Brian, 07:37).
• Adjust your approach based on real numbers—play with investment returns, inflation assumptions, and savings rates.

8. Financial Planning for Families with Disabilities

• Announcement of a new, robust resource: “Financial Planning for Children with Disabilities” to help families navigate ABLE accounts, tax benefits, and future planning (Ravi, 09:11).

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Notable Quotes & Memorable Moments

• On mindset and ambition:

  “I want you to come out with fire in your belly… I need you to have that fire in the belly.”
  —Brian Preston [01:39]

• About starting late:

  “How their journey started does not define how it ended.”
  —Bo Hanson [03:34]

• On wealth-building misconceptions:

  “Right around 80% of millionaires are first-generation. That means that there’s a lot of opportunity.”
  —Brian Preston [05:14]

• On planning:

  “Just because you want to retire one day does not necessarily mean that retirement’s going to happen. You have to put in the work.”
  —Bo Hanson [06:59]

• On small decisions over time:

  “Consistent small decisions to invest… will create your great big beautiful tomorrow.”
  —Brian Preston [04:27]

• Response to debt payoff vs. investing:

  “A lot of people want to be debt free so bad…they lose sight of recognizing that actually doing that is costing them on the back end…”
  —Bo Hanson [13:22]

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Timestamps for Important Segments

| Timestamp | Segment/Topic | |-----------|----------------------------------------------------------| | 00:14 | The retirement pessimism among young people | | 01:39 | Importance of early ambition and mindset | | 02:45 | Tracking net worth; why it matters | | 03:34 | Case studies: Success stories from humble beginnings | | 05:14 | What do millionaires have in common? Survey insights | | 06:49 | The Financial Order of Operations as a universal system | | 07:37 | “Know Your Number” tool overview and personalization | | 09:11 | Launch of ‘Financial Planning for Children with Disabilities’ | | 12:19 | Q&A: Saving vs mortgage prepayment at age 42 | | 20:24 | Q&A: Steps 5&6 of the FoO and what ‘maxing out’ means | | 23:46 | Q&A: Adjusting investment frequency in volatile times | | 29:34 | Q&A: Emergency funds late in life—how to triage | | 32:54 | Rapid Fire: Roth conversions, pensions vs savings rate, insurance choices, etc. | | 48:09 | Q&A: Down payment vs. investing for young homebuyers | | 53:07 | Q&A: Will the savings rate go up from 25%—math behind it | | 57:18 | Q&A: Creating judgment-free spending in couples | | 61:43 | The enduring trauma of … throw pillows |

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Additional Audience Q&A Highlights

• Prepaying mortgage vs. investing: Weigh opportunity cost, especially with rates as low as 3.6%—don’t let debt-avoidance strip away compounding returns.
• Pensions and savings rate: Early in career, ideally save 20–25% regardless of pension; closer to retirement, you can count the pension into your projections if confident in it.
• 529 plans: Count only toward college, not your 25% retirement savings.
• Going back to school late in life: Do a personal cost-benefit and ROI analysis.
• Finding a financial partner (tongue-in-cheek): Engage in financial communities like Reddit, Facebook, Discord—“Financial Mutant Mingle” is still just a joke.

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Memorable Banter & Personality

The episode included humorous asides:

• Brian and Bo rib each other (“Debt Avengers” vs. “Debt Crusaders”; cold medicine Brian at “73%” performance; back-and-forth about “throw pillows”).
• Pop culture references: The Greatest Showman, Back to School (Rodney Dangerfield), Christmas Story, even joking about creating “Mutant Mingle” for financially savvy singles.

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Resources & Tools Mentioned

• Annual Net Worth Templates
• Financial Order of Operations guide: moneyguy.com/resources
• Know Your Number course/tool
• Financial Planning for Children with Disabilities (new resource!)
• Home Buying Checklist and Calculator

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Closing Thoughts

Brian and Bo consistently hammer home that retirement is not reserved for the wealthy or “lucky.” Consistency, planning, and starting—even if late or from a negative place—are the true differentiators. The show’s tone is both encouraging and practical, aiming to equip listeners with tools, mindset, and motivation for a confident retirement journey.

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For full resources and more, visit moneyguy.com/resources.

Transcript

[Brian Preston]

Foreign. That frown. Upside down. Look. Percent of young Americans expect to never retire. We're gonna turn that upside down.

[Bo Hanson]

Brent. I am so excited about this because I genuinely believe that we can change this. I think a lot of young folks out there, they see all the stuff going on. They see housing prices increasing and cost of living getting more expensive, and they just feel like, man, I can't get ahead. I can't get ahead. I can't get ahead. I'm probably never going to get ahead. And I just don't believe that that's the case.

[Brian Preston]

Yeah, I mean, there's a drum beat. We pay attention. We try to just know what's going on out there in the world. And when a stat like this from. From YouGov comes out, 27 and a half percent of Gen Z and millennial respondents expect to never retire or don't know when they'll retire. I think we can be kind of the unlock, you know, decoder ring that can help these, help these people no matter what situation they're in.

[Bo Hanson]

Now. I want to maybe never retire or people who are a fine movement. Hey, I don't ever want to retire. I always do something. But I don't think that's the case. I think when I talk to young people today, there is this general sense of, oh, I'm not going to worry about retirement, because that's just not possible. I can. I can't even pay the bills. I can't even buy a house. I can't even fill in the blank. And it's amazing that. Brian, we've been doing this long enough now. We have so many different success stories, and we think about the clients with whom we work. We see success stories in the financial realm. It's not always the same story. They all look very, very, very different.

[Brian Preston]

Yeah, I won't look for a young person. I want you to come out with firing your belly. That if this is part of the financial independence next endeavor. I had that when I was young. I thought I was going to retire by the time I was 50 to 55 years of age. So I was saving accordingly. It wasn't until later that I realized, hey, I never want to retire because I actually get a lot of fulfillment out of what I get to do for a living. But for young people, I need you to have that fire in the belly. And that's why we want to go through some of the things we've seen. But we've got the solution to make sure you're on the right path. Yeah.

[Bo Hanson]

Again, when we think about the people that we've either interacted with at the show or the clients with whom we get to work. We've seen a lot of successful people who have had a successful retirement, even though they started late. A lot of times we'll do case studies where we'll talk about, hey, here's somebody who's figured things out at age 20 or age 25 or age 30. But the truth is, there's a lot of folks who really don't figure this out or don't catch on until later. And even those folks, when equipped with the right information, are still able to set themselves up for successful retirement.

[Brian Preston]

Also, you know, we talk about our favorite annual tradition is doing the annual net worth statement, because it's not only a great barometer of how things are going for you financially, it's a great communication tool with you and your significant others. But there's a lot of you who might be coming right out of college and you're like, well, why would I want to do something? Because all it's going to do is reinforce all the negative guys. It's actually a fortunate thing that if you can just know where you're beginning from. I look back, Bo started this thing pretty much from his early 20s and has an entire history of his wealth journey. I didn't even start tracking my net worth until I was in my early 30s. So there's a big branch of data that's just completely excluded and gone. You're going to look back as a financial mutant and be glad that you got to see the entire journey and get to see the entire vision of where you come from.

[Bo Hanson]

Yeah, a lot of our folks started in the negative. They started in the red. They started with debt. But how their journey started does not define how it ended. And they were able to go from a negative net worth by implementing the things we talk about buying, implementing the three ingredients of wealth creation, they were able to get to successful retirement. It was okay that they didn't start in a great spot because they were able to finish in a great spot. And it's even interesting that a lot of the retirees that we work with, they never had these. These huge incomes. They were never like the corporate executives. They're never the people making a million bucks a year. We have a lot of folks, but, you know, I'm thinking about Brian. We have school teachers who never, even as a household, crossed over six figures of income, but were disciplined and consistent savers. And we're able to have a very, very comfortable retirement by making wise Decisions

[Brian Preston]

throughout their working life, Consistent small decisions to invest in the markets and for yourself will create your great big beautiful tomorrow. I don't know how many times I feel like every, every week we share the same content on that. It's because I just know it, I see it, I live it. And the fact that if you just make small decisions, they really can have huge results for your future self.

[Bo Hanson]

And then another thing that we've seen with retires that are successful is that by and large, they're not special. And we don't mean like unkind. They're not special because everyone is special. But what we mean is there wasn't something unique about them that got them to financial independence and financial success other than one very specific behavior. Brian, we do this well survey.

[Brian Preston]

I want to make sure, because we, I want to set the ground here of a lot of people. When you're outside looking in, you think of the virtuosos or the people that are, you know, professional athletes, professional musicians, performers, they make a gazillion dollars. That's why they're rich. Or we think you have to be in the executive suite in the corner office and you have to make a lot of money that way or you have to be born into it with the silver spoon. I'm here to tell you, we, we survey our millionaire clients every year. And it's pretty consistent. 76.4% of our client survey respondents, these are millionaires, said they got to their first million being a saver slash investor. So, you know, you couple that with the data. When I remember when I read Millionaire Next Door, you look at some of the Ramsey data that comes out. And then even from what we find out from surveying our own millionaire clients, right around 80% of millionaires are first generation. So that means that there's a lot of opportunity. If you can just be, you know, early and often and consistent with your good behaviors, you will be rewarded.

[Bo Hanson]

So if you're a young person out there, frankly, if you're anyone out there and you're trying to figure, okay, what do I take away from this? What are the things that I ought to hold on to, Number one, no matter where you are in your financial journey, even if you are at the very, very beginning and you're about to graduate, or maybe you're, you're someone who is coming in for a landing at retirement, we want you to make sure that you have a plan in place. And if you don't know how to build a plan or you don't know what to do, with your next dollar, we have a system built for you.

[Brian Preston]

It's almost like, doesn't matter if it's raining outside, it doesn't matter if it's sunny outside. We got the all terrain, all weather, financial order of operations.

[Bo Hanson]

And if you want to get your free copy and go to moneyguide.com resources and download that. So not only do you need to have a plan in place, but one of the things we do want you to do is we want you to take accountability. Just because you want to retire one day does not necessarily mean that retirement's going to happen. You have to put in the work, put in the effort, actually build a plan, and then you have to begin executing that plan. I'm always struck Brahm, how many people just let life happen to them. Assuming, okay, well, I'll worry about that one day or I'll think about that in the future. No, the best time to start taking your finances seriously and start implementing your plan is right now. Today.

[Brian Preston]

Yeah. So let's, let's go figure out are you head of the curve, behind the curve, right where you're supposed to be? If you're right now asking yourself, man, I just wish that I knew where I was so I could use today to be exactly what Bo said be the day that I started making myself financially better. Go check out our, you know, know your number course. You know, it's actually better than a course. It's actually an executable tool to let you know exactly that answer. You put in the data, you even get to play around. What I love is you kind of goal seek on this thing. If you think that inflation is going to be high, we let you manipulate inflation. If you think your investment returns are going to be either below market or above market, we let you play around with that. We let you see what a few hundred dollars extra savings and investing can do for you to reach your financial goals. That's why go check out and figure out very quickly, are you ahead of the curve, behind the curve, or right where you're supposed to learn.moneyguy.com and know your number.

[Bo Hanson]

Reaching financial dependence and being able to retire does not need to be a frightening, daunting, or scary thing. We think that it realistically is attainable. It's why we put out all this free information. It's why that every Single Tuesday at 10am we show up right here so that we can answer your questions on your path to financial success. So if you have a question right now that you want us to weigh in on, if you have something you want to get our take on or our read on, make sure that you get it in the chat. Right now we have the team out in the wings collecting your question because we really do believe that there is a better way to do money. So with that creative director Ravi, I'm gonna throw it over to you.

[Ravi]

Love seeing the livestream questions roll in. I do need to tell you we had a very cool launch just in the past week, and I wanted to make sure everybody knew about it. Just in case you didn't see this come through on social media or email or just haven't had a chance to check it out. This is your reminder. Go to moneyguy.com resources. We just released a free, very robust resource. It's almost like an e book. So please go check this out if this applies to you. It's called Financial Planning for Children with Disabilities. It's going to help you navigate able accounts, tax benefits, and more. And it's all about helping you build a great big beautiful tomorrow for your child and for your family. And so I wanted you guys to know that that's out there because we get questions about this all the time. Brian. Right. And I am so excited that there's finally a concise place to point you.

[Brian Preston]

Yeah. And now look, you guys know this kind of hits very personal. You know, I've. I've been very transparent and open with my own journey, and that's what I felt. I know that this won't hit. This won't be as big of a release as when we do something that hits 100% of our financial mutants out there. But this is one of those that breaks my heart when I know people are on this journey just like I am. And you're trying to. You're just hungry for some basic information of where do you go. You're already kind of getting popped around with all your expectations on what life is going to be has just been shook. And then now you're supposed to navigate this not only from an emotional standpoint, but from a financial. This is. We don't know all the answers. And personal finance is definitely very personal. But I do like the fact that now we've created a resource so that if you are in this moment, you will at least know, hey, here's something. I can go and really get a resource to kind of know some of the basics so that I can not only heal from the emotional side of figuring out how to make the next step, but I can also just kind of know some of the basics so When I go talk to attorneys or set up accounts, I'll be in a better place for it. And the feedback on this has been awesome. I know, you know, for us that are in this community, it's not the easiest, you know, journey to go on and, but, but I like to know that we can create content that hopefully reaches you and helps you so that you can know that even though you might have some struggles, there's still better days to come.

[Ravi]

No, I love that. So moneyguy.com resources, a lot of attention and expertise and personal experience. It all went into this. So if you or someone you know is working through that, we would love for you to go check out financial planning for children with disabilities. So just wanted to give that a shout out and let you know it's there. Now it's time to dive into some questions from the chat. The first One is from Devo 6912. It says age 42 I invest approximately 20% so not 25% but I pay an extra $120 per month on a 3.6% mortgage at this rate, house paid off at age 62 and do not want mortgage in retirement. Money guy, thoughts? What are your thoughts?

[Brian Preston]

Well, I mean we just went over. You need to know if you're ahead of the curve, behind the curve, right where you're supposed to be. Age 42 is definitely one of those where your wealth multiplier. You're quickly about to be at that intersection point where you know your money is going to grow. So you know, age 40 it's seven times. You know, at age 50 it's only three times. So you're still there's a big difference between a 40 something versus somebody who's in their 50s. I just want to make sure you're not behind because you know we are still a long way from 3.6% mortgages. I mean I even think my cash is still paying pretty close to that. And I just want to make sure you don't get to age 60 or 62 and plan to retire and you just don't have as many options. You might, it might actually be the determining factor that says yeah, you know, you have to work until you're 65 versus retire at 60 or 62 because of this. And look, I want you to be debt free. Everything we've talked about is trying to create debt free retirements. But it's one of those things. I just want to make sure you do it at the right time and place.

[Bo Hanson]

Yeah, I would argue that personal finance is personal. And so one of the questions I'd ask you, Diva, is if you're going to lay out your goals, how would you prioritize your goals? Most folks, their primary goal from a financial aspect is that one day I want to be financially independent and then sort of a tertiary or secondary goal is, hey, I'd like to be debt free. If you tell me that, hey, you know what, being debt free is a larger goal of mine than financial independence, then okay, yeah, if you're going to devote and point resources towards that low interest mortgage, you can do that. But you need to understand the opportunity cost. You need to understand what you might be sacrificing. I'm putting this goal ahead of my other goal. And whenever we make decisions from a financial perspective to pursue one goal and not pursue another, oftentimes we don't get to go back in time. And at 42 years old, if you're going to prepay that 3.6% mortgage, you're not going to be able to go back and invest those dollars at age 42, 43, 44. When the wolf multiplier is so successful so. Or is so powerful. So I would have you think through what are my primary goals and then what actions can I take will most align with what those goals are? And the way that you would triage that is by doing exactly what Brian said. Am I ahead of the curve, behind the curve, on the curve? Do I not even know where the curve is? I think a lot of people want to be debt free so bad and they want to knock out the mortgage so bad, they lose sight of recognizing that actually doing that is costing them on the back end on being able to actually build towards.

[Brian Preston]

Well, a lot of this conversation is framed around risk. And a lot of people like Devo will probably say, hey, but I'm taking risk off the table by paying off this mortgage early.

[Bo Hanson]

A risk off the table.

[Brian Preston]

The thing and I detailed this pretty, pretty in depth in Millionaire Mission is that the reason I talk about when I like people to hit step nine, if you're going to pay off mortgages early, I like it to be post 45 because I just want to give you enough opportunity. While the column is on the compounding growth side of things, when you're under 45, let that wealth multiplier work for you, because I always see, I get it. Debt in retirement can add a risk element. But you know what's a bigger risk is that you actually get there and you just don't have enough money saved and you have to start making really hard decisions. And you look back and go, but is it really that big of a deal? Because, I mean, what do you say, $120 a month is that. I mean, if you look at now for a 42 year old, it's not as big of a decision as for a 28 year old, but it still can move the needle to a degree that you ought to at least go through the exercise to see what you're costing yourself by looking once again at our know your number course, to kind of play around with those assumptions. That's the beauty of having a tool that lets you not only adjust rate of return inflation, but also what your savings rate is. So you can see, hey, what is, what is this doing for me? You could even play around by making some assumptions with what that mortgage impact is in there as well. But look, it goes back to, I want you to be debt free. I just want to make sure that you live your best life and don't have regrets. And it just the arbitrage of somebody who's got a 3.6% mortgage. I mean, there's a lot of people right now that are kind of probably throwing, you know, tomatoes at the screen because they're like, what are you doing paying off a 3.6% mortgage? Because that's one of the things. It's one thing if you're prepaying a six and a half percent mortgage right now at age 42. It's another when you're paying off a 3.6. And you know, it just. You should know better at this point.

[Ravi]

Well, devo6912, thank you so much for the question. It is your lucky day because it's Tumblr day today.

[Brian Preston]

Hey, can I say one quick thing? He also gave up, you know, all my prepayment people that are Debt Avengers that are going prepay it, they always, they're usually saving, you know, 30, 35%. They're always above 25%. Devo tattled on himself when he's only saving 20%. You know, so that's. That, that's a problem right there. At least get yourself beyond 25% and then you can give yourself permission to prepay the debt.

[Bo Hanson]

I love how you call them Debt Avengers because it used to be Debt Crusaders. Now it's Dead Avengers.

[Brian Preston]

I mean, you know, by the way, can we go ahead and be clear on that? Because Crusaders is much better. I'm on and I'm cold medicine free today.

[Bo Hanson]

Okay.

[Brian Preston]

But Beau came in last week and he was like, hey, I think I'm under the weather.

[Bo Hanson]

No, this is.

[Brian Preston]

And I was like, oh, no. I was like. Because I always, you know. You know, they always say when your kids, you know, if you have somebody in the office that puts their kids in daycare, you just know that your immune system is about to get a workout to no daycare. I was, Bo is. Bo is like that child in daycare because he brings home every bug daycare. And then so, so I came in yesterday and I said, beau, okay. I said, I got it obviously from you. The gestation period is all of Williamson county is sick.

[Bo Hanson]

And he got it from me.

[Brian Preston]

I was like, what am I dealing with here? And you go, oh, good news. It's only one day. And I do want to give you credit because yesterday I was probably about a 45. Today I'm probably about 73%. So this thing does have a pretty quickly turnaround. So I want to get. Thank you for that at least.

[Bo Hanson]

I don't think it was me. I don't think it came from me.

[Ravi]

You never do, though.

[Bo Hanson]

Can neither confirm nor deny. So I don't know what to tell you.

[Brian Preston]

Always patient zero.

[Bo Hanson]

Oh well.

[Ravi]

Diva 6912 if you would like a money guy Tumblr. Since we answered your question on the show today, just email winner moneyguy.com all

[Brian Preston]

right, back to the point. That's why I said Avenger versus Crusader is that this thing is.

[Ravi]

Oh, that's because you weren't 100.

[Brian Preston]

It's humming. But it's not all, by the way.

[Bo Hanson]

So you're saying like a vengeance.

[Brian Preston]

No, I'm saying that it's just the, the. The elevator is almost there. Like it opened up and then the door open is like. Wait a minute. That didn't line up with the floor. Exactly. Like opposed to. It's the cold medicine. It's just like. And by the way, y', all, which I don't know behind the scenes is we mixed up our entire the way we're our recording schedule. We've already recorded like a react this morning. And I was like, whoa, we're coming out hot with not even 100% Brian. So it's Lord knows if this content's

[Ravi]

even 73 Brian is here today.

[Bo Hanson]

You know what 73% Brian is. Is better than 100% of most men. You know what I mean?

[Ravi]

True that.

[Brian Preston]

We'll see.

[Ravi]

Love it.

[Brian Preston]

It might be more entertaining.

[Ravi]

All right, we're going to move on to Brittany F's question. But if you are watching Live. We're going to do a rapid fire segment again today, so be sure to get your rapid fire questions in the chat. Just put RF at the beginning of your question. We'll know that is specifically for that segment. So we'll be prepping that in the background, get your questions in. But for now we're going to go to Brittany F's question. It says, hey money guys, at what point can you consider steps 5 and 6 of the Foo complete? Is it when your monthly investments hit a certain number? Is it year end when you actually max those out, max out those accounts?

[Bo Hanson]

Thanks, that's a great question. You know, I'm surprised I don't get asked this question that often. Right. So a lot of times when we say, you know, if you're brownie, hold the thing up for me. If you're following the financial order of operations and you get to step five, it says that you should max out your tax free account, you should max out your Roth ira, you should max out your health savings account. Well, a lot of folks don't max them out in one fell swoop. They don't just do 7500 or 4400. Right, right there. They start doing it monthly. Hey, I'm going to divide that out by month. I'm gonna save that. I would argue that when it comes to following the financial order of operations, if you are saving a monthly amount or a systematic amount that will max that out, I would say that you complete step five. So it's not at the end of the year once you fully fund the account, it's when the savings is going in. That will put you on pace to max out that account. So if you have a monthly amount that's maxing out your Roth and it's maxing out your HSA and a monthly amount that's also going to max out the 24,500 salary deferral in your 401k. I would argue even in January or February, before you had a whole entire year to do that, you've already crossed through step six. Agree, disagree, want to fight?

[Brian Preston]

Well, I think it's, this is what I love about the financial order of operations is because it really has been built for people in good incomes and it's been made for people with, you know, below average incomes and even above average incomes is because I think for people, we'll take it off somebody who makes somewhere between 85 to $100,000 a year, but not over that. You're likely going to max out step five because that's a dollar amount to load up the Roth ira, the health savings account. That's a dollar amount that will trigger you coming through step five, step six is going to be graduated from because you've reached a savings rate level. Once you exceed 25% you're not going to probably you're not going to hit if your income is not super high, you're not going to hit the maximum amount the government lets you. You're just going to hit the savings rate of 25% and that's why you

[Bo Hanson]

move to step 738,000. I think we cal before you'd max

[Brian Preston]

that's what I was pulling the category but I was like, you know what, Cold medicine Brian, no way in the world I'm going to be able to get to that math in time. So I just, that's what I'm trying to 375 playing horseshoes with the numbers here but it's but for people who are in a high income situation, you know when you get to yes, there's a good chance you will load up your 401K, 403B457 and step six and still not reach 25%. Well that's where step seven, the hyper accumulation kind of lets you come in and pick up the pieces. Look at the three account strategy to know how you're going to use the money. I'm very proud of the fact that this thing goes beyond just saying hey save this and keep going. It hits you. Whether you're just starting out, it hits you. If you're reaching that six figure status, it hits you. If you're making a million dollars a year, the financial order of operations will will help you walk through that process in the mindset.

[Bo Hanson]

Love that.

[Ravi]

That's great. Brittany F. If you would like a money guy tumblr, just email winneroneyguy.com JP has a question next. During times of geopolitical crisis, should I dollar cost average daily, weekly, monthly or wait for a correction? Do you look for a percent drop to add additional investments?

[Bo Hanson]

I'm so excited for you to answer this one first.

[Brian Preston]

Look, there's always going to be crazy stuff going on so I will tell you I don't change my behavior at all on this type of stuff. I just, you know, set it, forget it. Look, I've already been crazy enough that I'm doing weekly dollar cost averaging so I don't don't do daily. I think that starts to get a little, a little eccentric at that point. But I will tell you because I I alluded to this last week's live stream or in and with the collaboration we did with Austin and people have asked about it. I do. I will tell you my behavior does change though when some of the geopolitical or the economic stuff causes us to hit bear market status. When the market goes down 20%. You should go and think about man. I would immediately go ask myself, let's go look at like the s and P500 and others and see what the price to earnings ratio and other things are. Because a lot of times when you get to bear market status, the markets are irrational with they disconnect from the value of what the companies are. And then if you're on a. If you have extra money around laying around at that point, I think it's okay to kind of be opportunistic once we get there. If you. Historically I've never been. I mean now look, you have to grit, hold your teeth and grip it tightly because you might have more volatility. And that's why there's even an opportunity every 5% fall from 20%. Maybe you find a little bit more money if you have it. But it's one of those things where I don't change my day to day behavior off of just normal changes. It has to reach full bear market crisis mode for me to have a change in my consistent dollar cost averaging behavior.

[Bo Hanson]

But I want to speak to the average financial mutant out there because you have to understand what you're talking about. I agree 100% with.

[Brian Preston]

You have to be in step eight and have extra cash.

[Bo Hanson]

Yeah. It's the reason that we're able to do that is because in addition to saving the 25% plus of gross income, we're also able to build up cash for other endeavors and those sorts of things. And so because you have cash on the sidelines above your emergency fund and above your 25% savings that's sitting there there, you can have some opportunistic funds. If there's a pullback you can do

[Brian Preston]

something with or if you're doing a dollar cost averaging strategy, you can accelerate some.

[Bo Hanson]

Yeah. Or if your dollar cost averaging lump sum. But if you're someone who's just a consistent saver saving 25% of your gross and the cash that you have on the sidelines is really your emergency fund, you shouldn't change anything. Just let your DCA happen and happen and happen. This like accelerate is really for folks that are later on in the financial order of operations. Don't overcomplicate it. What you do is, as the volatility happens, as the geopolitical stuff happens, you just try to change your mindset to say, hey, I'm not changing any of my behaviors. But while the rest of the world is freaking out, while the rest of the world is so concerned about what's going on, I recognize that I'm buying it at opportunity. Buying it at opportunity. Buying at opportunity. You don't change anything that you're doing. What you change is what you're thinking. For the vast majority of financial mutants

[Brian Preston]

out there, hey, I appreciate you being my safety net, because I feel like we're at the circus, and, you know, I'm on the trapeze, and I'm, like, swinging up, and I'm trying to do a few somersaults, and then if I don't catch all the content, you're the. You're the net down there at the bottom that's gonna catch it and bring it up, you know, and also keep me from breaking down.

[Bo Hanson]

You know, what's funny is, in my mind, I saw, like, Zac Efron and Zendaya. Like, I saw that, but then he turned me into. I didn't even get to be one of the afterb.

[Brian Preston]

Whenever. I've told you my favorite song from that Greatest Showman album is where is the negotiation between Hugh Jackman and Zack? So I don't know why you turned yourself into the. The love interest there. It's a little weird.

[Bo Hanson]

I was not Zendaya. I was not. I want to be.

[Brian Preston]

Y' all didn't get that feeling. I mean, we didn't immediately put Bo in the Zac Efron. I'm the one.

[Bo Hanson]

I'd like to say the same. That keeps them safe. That's not.

[Brian Preston]

I'm the one on cold medicine, not you. Come on, keep it together.

[Bo Hanson]

It's not Zendaya in that.

[Ravi]

Now, Zendaya, who's Zac Efron? You can just ponder that.

[Brian Preston]

What's the name of the song? Somebody look it up, though. That has Hugh Jackman and. And Zac Efron, and they're, like, negotiating.

[Ravi]

I forget. I don't.

[Brian Preston]

It's a good song.

[Bo Hanson]

What is the name of that song?

[Ravi]

Oh, the Other side.

[Brian Preston]

The other.

[Bo Hanson]

Is that right? That is it. Yeah. The other side. That's right.

[Brian Preston]

It's a good one.

[Bo Hanson]

Look at that.

[Brian Preston]

I was hoping that. See, that's where the cold medicine's messing up. Because I was gonna, you know, sing a few bars of it, but it's just not there right now.

[Ravi]

We were deprived.

[Brian Preston]

Hey, Bo, do you remember what it was like in those early days when we started the company and we were trying to do everything ourselves?

[Bo Hanson]

Man, we were wearing, like, 28 different hats. You start the day thinking you're going to work on things like revenue and strategy, and by the end of the day, you're working on payroll forms and onboarding documents.

[Brian Preston]

Yeah. And if we're being honest, it wasn't always the best use of our time. And that's why we love Gusto. Gusto is an online payroll and benefits software built for small businesses. It's all in one remote, friendly, and incredibly easy to use, so you can pay, hire, onboarding, and support your team from anywhere.

[Bo Hanson]

And if you're a financial mutant, you'll love this. Gusto offers unlimited payroll runs for one monthly price. No hidden fees, no surprises, plus automatic

[Brian Preston]

payroll tax filing, simple direct deposits, health benefits, workers comp, even 401k options. Gusto makes it simple and has options for pretty much every budget.

[Bo Hanson]

Your time is valuable. Don't let paperwork eat up your day when you could be focusing on growing your business.

[Brian Preston]

So try gusto [e-mail] MoneyGuy and get. Get three months free when you run your first payroll. That's three months of free [e-mail] Moneyguy one more time.

[Bo Hanson]

Gusto.com MoneyGuy all right, we're going to

[Ravi]

do one more long form question, and then we're going to move into our it does not depend rapid fire segment. So be sure to get those questions in. Just put RF at the beginning on

[Bo Hanson]

rapid fire is going to be loose.

[Brian Preston]

I already feel, I feel, I feel like I'm in quicksand right now.

[Ravi]

I'm just like, all right, here's the next question. It says it's from the K2. Fowler. I'm 48, 500K in investable assets, no debt, 20% savings, trying to max Roth HSA, et cetera. But I don't have an emergency fund. Oh, I came to the foo late. Should I halt the 20% to build up the emergency fund?

[Bo Hanson]

I mean, yes, but hold on, but hold on, hold on. Let's think through this, right? Here's what I want to know. For the $500,000 that you have that's currently invested.

[Brian Preston]

Yeah.

[Bo Hanson]

What is it comprised of? Is it.

[Brian Preston]

How's it structured?

[Bo Hanson]

Is it 500 in a 401k, is it 500 across a 401k and a Roth IRA, or do you have some after tax brokerage account assets? Because whether you, you stop saving and Devote your full attention to the emergency fund or you liquidate some after tax assets to then fund. Your emergency fund is going to be dependent upon that. But I do think in your situation you can't be out there naked. I was going to say skinny dipping, but definitely be naked out there because you don't know when that emergency is going to happen. Emergency funds are there for the unknown. Unknown.

[Brian Preston]

Gotta go put some drawers on.

[Bo Hanson]

You gotta, you gotta put drawers on. He said you have to have an emergency fund in place to make sure that you keep your financial life out of the ditch when you're out there.

[Brian Preston]

Just like nobody wants to see a 48 year old man naked. So go ahead and get some drawers put on.

[Bo Hanson]

Prioritize the emergency fund is what we're saying.

[Brian Preston]

So let me bring this back in making you definitely need triage situation. You got to immediately figure out if you can fix this with if you have after tax investments, just do a reallocation and then go through the financial order of operations. You know, figure out what your highest deductible is. Get that employer match. And you've already said you're debt free, so you should be pretty good on that. So steps one and four are going to happen very quickly for you, all right. And then you'll be all covered up.

[Ravi]

That's fantastic. The K2 Fowler. If you would like a money guy tumbler, just email winneroneyguy.com we would love to send you one since we highlighted your question on the show.

[Bo Hanson]

He said put your drawers on is what he said.

[Ravi]

That would have been a great rapid fire answer. Just all he said was put your

[Bo Hanson]

drawers, put your drawers on.

[Ravi]

All right, speaking of it is now time for our it does not depend rapid fire segment where Bo and Brian Full page here, 60 seconds combined to answer your questions. And they are not allowed to say the phrase it depends. Now as a throwing them a bone, we always at the end have our maybe it does depend segment where they can air any grievances, expound on anything they didn't get to expound on. And we just have that there at the end to make sure all the bases are covered. So without further ado, let's move into our it does not depend rapid fire segment. First question says is it okay to pay taxes from the retirement account when doing a Roth conversion?

[Brian Preston]

No, I mean look, if you

[Ravi]

still got 48 seconds, are we done?

[Brian Preston]

You don't think if you have to

[Bo Hanson]

use the pre tax dollars to pay taxes, I'd argue you're someone who Roth conversions likely don't make sen.

[Brian Preston]

Your income is like nothing. You like retired early last year.

[Bo Hanson]

If your income is nothing, then there won't be any taxes due then.

[Brian Preston]

Yeah, then you could use that money for the minimal taxes.

[Bo Hanson]

I stand correct. If there's no taxes to pay, then sure you can.

[Brian Preston]

You know what I mean? The tax rates are so low on a Roth conversion that it makes sense when you've retired.

[Bo Hanson]

I think if someone only has pre tax assets and they have to then cannibalize some of those pre tax assets to pay the tax on it, you're likely not a candidate for Roth conversions.

[Brian Preston]

I agree with that.

[Ravi]

Wow, that was five seconds remaining. I guess nicely done.

[Brian Preston]

We didn't say depends, but that was ugly.

[Bo Hanson]

It was. There was a one word is an easy one. That was a great.

[Ravi]

I'm not fighting you on it.

[Brian Preston]

I actually, I was like when she said, should I pay my taxes? Yes.

[Bo Hanson]

And you just stop listening. Keep going.

[Brian Preston]

No, keep going.

[Ravi]

Next question says, how do you adjust the 25% savings rule when paying into a teacher pension?

[Brian Preston]

Oh, I get to go first on this one. I mean, I'd go find out because there's a funding, there's a formula, you know, whether the employers, you know, you're putting in 8 and they're putting in 12. Go figure out what that formula is. And you can, you can. As long as Your income's under 100,000 for an individual, 200,000 for a married couple, you can count it. And that's just. But you got to protect yourself and make sure that that pension's well funded by your employer.

[Bo Hanson]

I don't know if you're early on in your career. I wouldn't factor in the pension. I'd still try to save for 25%. If you're further along in your career and the pension is a higher likelihood of paying out and you know, kind of know what your number is and you know what your number is. Net the pension amount. I think you can adjust your savings then. But I would argue early on if you just don't even factor in the pin. If you can, if you can still save 20 to 25%, what you're going to do is set yourself up for more flexibility earlier on in life.

[Brian Preston]

You heard it from Bo, save more.

[Ravi]

Well, I just save more.

[Bo Hanson]

You always pin that on me like I'm the save more guy.

[Ravi]

Next question says, my employer pays for a good family, good family health insurance, no cost to me. Should I opt for a lower insurance to qualify for an HSA? Yes or no.

[Bo Hanson]

This person's under 26 and on the family plan.

[Ravi]

No, it said my employer pays for good family.

[Brian Preston]

Look, they have a catalog with the employer. When you have open enrollment, go look at your upcoming year. If you have life planning stuff like kids and other things, then you do the Cadillac version. If you get old like me and you got a bunch of medical procedures, then you do the Cadillac plan. But if you're healthy in 26 and nothing's coming up, take advantage of the high deductible plan. Assuming you do the exercise and the math works.

[Bo Hanson]

Math equation in four parts premium you pay for each plan, expected out of pocket costs on each plan. Any employer money that goes into each plan and then tax savings from each plan. You add those up and it'll tell you which one is most mathematically advantageous.

[Brian Preston]

Just like I said, you guys are

[Ravi]

getting way too good at 60 seconds.

[Brian Preston]

Okay, well, especially when he's a safety.

[Bo Hanson]

I'm Darth Vader. Which one are you? Who are you in the.

[Brian Preston]

Oh, I'm either Han Solo or Luke Skywalker for sure.

[Bo Hanson]

Are you kidding me?

[Brian Preston]

I know you want me to be chewy, but I'm. I'm better than that.

[Ravi]

Next question. Why is Brian never so excited for a topic only Bo?

[Brian Preston]

Oh, I'm. I think I. Naturally in life I'm excited. So I don't have to, I don't have to try to convince you guys I'm excited like Bo does. You just can tell. Anybody hangs out with me, you want me around.

[Ravi]

Love it.

[Brian Preston]

Even on cold medicine?

[Bo Hanson]

Even on cold medicine.

[Ravi]

Next question. Should 529 be owned by kids, parents or grandparents?

[Bo Hanson]

If your children are under the age of 18 or under the age of majority, they can't actually own the financial accounts themselves. There's going to have to be some other custodian on it, either a parent or a grandparent.

[Brian Preston]

And I'm okay. By the way. If it's your grandparents that are funding this, 529 put the grandparents and then put the beneficiary as the child. Because what that protects you from is the parents. What if they go and get access to that? You put it in the parents names and then they go and they have other ideas for how this money's used. If you funded it, structure it that way. Is that okay?

[Bo Hanson]

No, no, no, that's great. The only thing I'll throw out there sometimes when it comes to parents and grandparents funding, one thing that we remind people to think about is if they live in different states, whoever like it doesn't Matter who owns the account, but whoever's putting the money in the account. Sometimes a grandparent will give money to mom and dad, and mom and dad will put money in, but grandma and grandpa live in a state where it would have been deductible if they would have put it in directly. You want to factor in the tax

[Brian Preston]

benefits or the fact that if you're doing financial aid, time is up.

[Bo Hanson]

No, do financial aid keep going. She can't stop. Nope.

[Ravi]

That'll be.

[Bo Hanson]

I want to know what he's going to say.

[Ravi]

All right, next question.

[Brian Preston]

Grandparents sometimes can be better than parents.

[Bo Hanson]

I was thinking the same thing.

[Brian Preston]

Yeah.

[Ravi]

Hi, money guy team. My employer has both a traditional and Roth 401k with a 50% employer match up to the $24,500 limit. Any minor changes to steps 2, 5, or 6 of the foo with this special account.

[Brian Preston]

I really hope you don't have debt I really hope you don't have debt because I want you to get as much of that free money as possible.

[Bo Hanson]

Same answer, man. If you can get 12,000. I can't do the math. On my head. Half of $24,500. Is that 12? I can't do the math.

[Brian Preston]

12,250.

[Bo Hanson]

That's what I thought it was, but I didn't want to screw that up.

[Brian Preston]

That's even in cold medicine. I'm good at public math.

[Bo Hanson]

That's free money that if. If you can avoid walking away from. We'd love for you not to walk away from that, because the question was, do you adjust 2, 5, or 6? Well, 2 would suggest you get all of it, but you get all of it instead of doing your Roth. Well, maybe it makes sense to do.

[Brian Preston]

Well, you can do Roth.

[Bo Hanson]

Boom. So now you're doing tax free. And if you're gonna get the maximat, you're already doing six. So I think it's.

[Brian Preston]

Yeah. If your employer is that that generous. Get in there and get that. I love it.

[Bo Hanson]

Get in there and get it. He said get it.

[Brian Preston]

Yeah, just slop yourself around in it like a pig. And, you know, this is the. Literally. Next question.

[Ravi]

How old is too old to go back to school and change careers? 10 years out from retirement? 5 years out.

[Brian Preston]

Have y' all not seen Rodney Dangerfield and back to school? Isn't that the name of it? Is that the name of it? Was that the name of the movie? I have.

[Ravi]

No, I didn't.

[Brian Preston]

What was the name of the movie? Dangerfield.

[Bo Hanson]

There's no one in here where he

[Brian Preston]

was a high Diver. What is it? Back to school.

[Ravi]

You've wasted 16 seconds of your answer.

[Bo Hanson]

Keep answering the question.

[Brian Preston]

Well, look, here's the thing. You have to really. I will tell people.

[Bo Hanson]

Nailed it. Back to school.

[Brian Preston]

It depends on how good your career is. I have a lot of career changers that come to me and you have to figure out, are you ahead of the curve, behind the curve, or right where you're supposed to be? Did I say depend there? I hope I didn't. But you kind of have to do an assessment of yourself.

[Ravi]

I did say I wasn't listening.

[Bo Hanson]

Close enough. You need to do the analysis. Anytime there's a back to school conversation, there's a cost benefit analysis needs to take place. What will this cost me and what is the benefit on the other side? Sometimes that benefit is qualitative and sometimes it's quantitative. You need to make sure the roi, however you define it, justifies going back to school.

[Ravi]

That's it.

[Brian Preston]

I get no respect around here.

[Ravi]

Next question is that.

[Bo Hanson]

No, you nailed it.

[Brian Preston]

Absolutely horrible.

[Bo Hanson]

If I close, if I close my eyes and you do it, it's like he's sitting next to me.

[Brian Preston]

No respect.

[Ravi]

Next question says, can I count my two kids? 529 as part of my 25 savings.

[Brian Preston]

No way.

[Ravi]

I'm saving 15 in Roth, 401k and funding in HSA.

[Brian Preston]

You're not just step eight then? It doesn't sound like. I feel like I just did. I channeled my inner Bo Darth and that was. He's not at step eight.

[Ravi]

All right, Is that the end?

[Bo Hanson]

Howard Vader? Not a chance.

[Ravi]

He might be. All right, next question. If I'm 35, have enough saved for Coastfi and am on step nine, how can I find a partner to share it with?

[Brian Preston]

Say that one again.

[Ravi]

If I'm 35, I have enough saved for Coastfi and I'm on step nine, how can I find a partner to share it with?

[Bo Hanson]

If you go to moneyguy.com mutantmingle no,

[Ravi]

this does not exist yet.

[Brian Preston]

You're on the wrong show. I've been married for 27 years.

[Ravi]

40 seconds worth of advice.

[Brian Preston]

I mean, what am I going to tell people? Go to church and you know, and go hang out at the local bowling alley. I mean, I don't know where people meet these days.

[Bo Hanson]

I do think there are. There are tons of wonderful communities. If you want to go out there and check out the Reddit thread, if you want to go check out the Facebook page, you want to go check out the discord. There are all Kinds of great places where financial mutants hang out. I'm not saying use that to necessarily be your dating pool, but who knows if you're out there interacting with other like like minded individuals, who knows what kind of connections you can make whether it be in a romantic sense or just talking to people about sound solid financial decision making.

[Ravi]

Great. Last but not least, rapid fire question. When it comes to your money guy circus analogy, which of you is Zendaya and which is Zac Efron?

[Bo Hanson]

I think we both, I mean we

[Brian Preston]

all know the reality is I'm Hugh Jackman and Bo is Zac Efron. That's where the bow is. The one that screwed that whole thing up.

[Ravi]

That was such a nice answer, but he didn't answer the question.

[Bo Hanson]

You were doing a high dot. You were doing an acrobatic analogy.

[Brian Preston]

I don't know why you brought in Greatest Showman. There was no reference of greatest Showman when I was talking about you being my safety net.

[Bo Hanson]

Give me one other example of high divers besides or not high divers acrobats besides those two.

[Brian Preston]

I grew up going to Ringling Brothers every year for free by just doing the color contest out of the Atlanta Journal Constitution.

[Bo Hanson]

Isn't that where this came Isn't that where Greatest Showman came from? Barnum Bailey, Isn't that where that came from?

[Brian Preston]

You know better than that. I look back on my childhood by the way, since we have 18 seconds I went to every Braves game as a kid as well as to the circus off of just doing whatever giveaways they were doing at the AJC Financial

[Ravi]

mutant from a young age.

[Brian Preston]

Look at that.

[Ravi]

Love it. Well that does does it for our it does not depend rapid fire segment. I did cut you off a couple times so let's move into our maybe it does depend segment. Was there anything else you wanted to add? Clear the air on expound upon.

[Bo Hanson]

I want to, I want to make sure I didn't give bad advice here because I'm thinking through on if someone is in a super low tax bracket and they want to do Roth conversions. One of the things I would think through all you have are 401k assets but if you're in that low of a tax bracket is doing Roth conversions, even all that mud, all that advantageous meaning like accelerating taxes into the current year. If you're going to be in a low tax bracket anyways, you might be thinking for estate planning purposes or whatever. But then you'd have to think through like okay what are my kids financial tax situation look like I just Think if someone's in such a low income tax.

[Brian Preston]

It's a very specialized. But I will say, I will tell you, we've had prospects come through that have had seven figure 401ks and nothing else.

[Bo Hanson]

Yeah, for sure.

[Brian Preston]

And that's why you're like, holy cow. So you're financing cars, you're doing everything because you have access to no money. But these four. So there's a little bit of too much of a good thing.

[Bo Hanson]

But. But you wouldn't recommend those people do Roth conversions.

[Brian Preston]

Well, I mean, because they got to pay for their life somehow.

[Bo Hanson]

Right.

[Brian Preston]

I'd want to see the entire. But I'd be trying to figure out how we could get the three buckets filled up really quick in step seven in those situations. But I'd want to see the full picture. It's hard to do that on rapid fire especially.

[Bo Hanson]

There was one other one about 529 assets. And I think where you were going.

[Brian Preston]

Yeah, I just don't want people to. That's part. When we do financial order of operations, you always have to put your oxygen mask on first. And if you're trying to count your kids. 529 when you're not fully funding your own retirement, that could be. There's an issue there.

[Bo Hanson]

And then what was. I felt like there were two more.

[Brian Preston]

The trapeze.

[Bo Hanson]

This is dia, but this is my notes that I got.

[Ravi]

It's too rapid to remember.

[Brian Preston]

All I did was count to five. I mean, if you look. If you look at my notes, these are the worst notes. It says rapid fire, 25% traditional roth. And then 1, 2, 3, 4, 5.

[Bo Hanson]

It literally just says 1, 2, 3, four, five.

[Brian Preston]

I don't even know why I took notes. I should have drawn a picture of a unicorn or something.

[Ravi]

29 question. That was the main one I remembered. So I think you covered it.

[Brian Preston]

We did pretty good though, because I feel like sometimes I fill a buster and we're already. This thing's already at 55 minutes when we just get through the rapid fire.

[Bo Hanson]

I think we.

[Ravi]

I mean, you're doing too well at rapid fire.

[Brian Preston]

I should be sick all the time. I should go look the lamp post outside and get myself as sick as possible. So I give these answers. It's that much quicker.

[Bo Hanson]

Lick the lamppost.

[Brian Preston]

That's, you know, whatever public surface that's out there.

[Bo Hanson]

What's the Christmas story? Right. And that. The one where he gets his. His tongue stuck to the lamp post immediately. The picture I saw right there.

[Ravi]

So many movie references today.

[Bo Hanson]

I was Gonna say that. What. I was wondering if we could do a. Oh, like a rapid fire. But like, you. You have to use a movie reference to answer. You have to. Like. I'm trying to think about.

[Ravi]

You guys probably could do that, right?

[Bo Hanson]

You have to. Or you have to make an analogy on the spot to answer the question.

[Brian Preston]

Hey, somebody's noticed your. Your meathead. New addition to the back. The back. Back step back there.

[Bo Hanson]

Well, this is what happened. I think Caleb was.

[Ravi]

Or.

[Bo Hanson]

I think our production crew was feeling nervous like Brian's. There's so much that reflects Brian behind him and hanging out there. They're like, you know, we really need something.

[Brian Preston]

We need some meat in here for. For both.

[Bo Hanson]

Yeah. It was either that or a giant protein shaker.

[Ravi]

I know this was the more aesthetic

[Brian Preston]

option, but y' all miss out on so much when we don't have the cameras on. Is because BO is like. It was so warm that we opened the garage in the gym this morning.

[Bo Hanson]

It was great.

[Brian Preston]

This is things that make you happy.

[Bo Hanson]

If you've been working out, if you're. If you were a gym worker outer. And you've been in the. In the garage workaround. You've been in the garage all winter long, and it's, like, freezing, and you're bundled up. Today was the first day that we could actually, like, open the garage. It was. It was glorious.

[Brian Preston]

It's like I get a visual of, like, Arnold Schwarzenegger and Conan and the Barbarian, like, when they're all sitting around the campfire and the garage opening, like, whoa. You know, because y' all shirtless and. Oh, you know, just meeting it up.

[Bo Hanson]

You ain't wrong.

[Ravi]

Another reference. Look at that. You wouldn't be good at that segment. All right, let's do a couple more long form. Let's give the people what they want. This is Ask Money Guy, after all. Max C. Has a question. It says, hi, money guy. I'm 24 with 20% saved for a house down payment.

[Brian Preston]

Wow.

[Ravi]

Should I change to a 5% down payment and invest the rest? I have 30k in retirement. I'm living at home, and I have a 71k salary.

[Brian Preston]

Man. That's like. That's like a choose your own adventure on how rich do I want to be.

[Bo Hanson]

Yeah, 20% save for a down payment at 24 is amazing. One of the things I'd want to know a little bit more about is what. What price point of homes are you looking at? Because you've given us a lot of variables. We know your salary, so, you know, so now we know that we can calculate, okay, what's a 25% housing cost? Like what does that fit in there nicely? If we do a 20% down payment, if do a 5% down payment because that's going to dictate how much of that you should. But let's say that whether you do 5% or whether you do 20% based on the area in which you live, housing is going to be less than 25% of your gross income. Well, then you do have a choice to make. And I would argue for a 24 year old, if you go to moneyguy.com resources and you play with our wealth multiplier, you're going to see every dollar that you can deploy, every dollar that you can put to work is going to be unbelievably powerful for you over the long term. You may arrive at the conclusion that, well, man, yeah, I could put an extra 15% on my mortgage and it's going to save me some interest at I think 6.1 is what current history mortgage rates are at right now. Or perhaps I could deploy that. I could go make, you know, 55 times over on that money or whatever. I would work through that analysis to determine, okay, what do you said how rich I want to be. But it's a true answer. What do I really want my financial future to look like?

[Brian Preston]

Oh, man, I had so many things just flashed in my head when this question came up because look, we just had a Making a Millionaire episode where it was like I said, I love this couple. That episode just went live on Monday, by the way, where one had a duplex, one had a quadplex, and then they started dating during the pandemic and they're like, oh my gosh, we both house hacked and we made a fortune, fortune off of. It was just a fun little exercise. Max could if because you're 24, you, you didn't give us enough information. I don't know if you have a significant other. I don't know if you have roommates or considering having roommates. You could totally, one version of yourself could house hack if you have roommates and you could do a duplex, you could do a quadplex, you could do. You got really cool things that you could do that. And then the other thing, what I didn't hear you say is you had a significant other. And I, I would. If you're not going to do the house hacking, be careful about buying the house you think you're going to live in before you have a significant other because they might look at this house differently than you. So I always get nervous because I had an attorney, this has probably been a year now that came in. He says, hey, I love what you guys do, but I want to do this. And I have a very strong specialty in the legal profession. And I was like, he's like, what advice do you have? And I said, who does where you want to be? And he said, oh, that's easy, this person. I was like, well go. Go try to get a job there and be like, oh, but I bought a house already, so I'm kind of stuck in this community. I was like, no. Well, he screwed up because I want you to begin with the end in mind. And that's what Max, you're 24. Don't get caught in the achievers trap where you feel like the next thing you have to do is to go buy house. To go down that checklist of what achieving or successful people do, actually make sure it intersects with where you want to be in Life. Because you're 24, you might need to move. And you know, if you can't live in this house for five to seven years, that's a disaster. And for a 24 year old to lock themselves down without knowing, you know, who you're going to marry or what you want to do for a living, completely just measure twice, cut once.

[Bo Hanson]

We actually have a great resource you ought to go check out. It's called our home buying checklist. You know, things to think through before you make this huge life decision. For most folks, a home is the single most expensive thing you will ever spend money on. So you want to make sure that you think about it wisely and you make a well informed decision before you do that so that you don't have regrets like the attorney that Brian just mentioned.

[Ravi]

That's great, great call on the resource because we have the home buying calculator which is amazing and shows you the math. But the download the home buying checklist gives you some of those more intangibles like really thinking through the decision. So I love that. Max C. If you would like a money guy Tumblr as a thank you for asking a question today, just email winner moneyguy.com you know what's making me happy?

[Bo Hanson]

There's a lot of comments in here about other folks who get the open garage thing like open. Like it's a. If you know, you know, right? Like it just hits different man.

[Ravi]

Love it. All right, next question is from Brick House123 says, hey MoneyGuide team, I was Wondering if you are ever anticipating on having to increase the recommended savings rate for the foo beyond the current 20 to 25%. What factors would go into this decision?

[Brian Preston]

This is an easy one. I mean, because look, it's not like we just randomly said, you know what, we're feeling 15%. No, no, no, no. I feel like it's sunny. We open the garage, we could do 30% now. No. What? Actually, if you go to moneyguy.com resources, what should I save? Can the content team pull it up? What's the how much should I save? I got close. Y' all would have given me a point. I would have gotten three.

[Bo Hanson]

We call that a leaner.

[Brian Preston]

It'd have been maybe. But seriously, this is the intersection point. If you look at the typical American doesn't start saving investing until they're in their 30s. That's why you notice very nicely the intersection point is right around that 25%. But here's the reality of this. If I was restructuring this question. If you're somebody who's 22 years old and you start watching our content and then you go download that resource I just gave you, like, wait a minute, I get a lot for 15%. So maybe if. Because to tell a 22 year old that they need to be saving investing 25% sounds pretty aspirational. But then you go look at the intersection of math and life and you realize, oh, you don't have to because you got in there much sooner than the typical American did. Now if you're coming across our content and you're 42 years old, you will quickly realize, hey, I probably need to have a savings rate that's 30% or more, you know, depending upon how your employer's money and how your much you make is structured. So this thing's already a very mathematical driven solution. And you know, it's not something that Bo and I just got in a room and said, Hey, 25 sounds like, you know, it's a quarter of a hundred, so let's just do that. No, there was actually some, some math involved in this.

[Bo Hanson]

And you know, the conventional wisdom used to be save 10, save 10, save 10. And we started looking at it, we're like, man, there's a lot of people that are going to get to retirement. They're going to get there and pensions aren't here and people are saving later and houses, 10% just might not get it done for the average American. If the average American doesn't start saving for retirement until Sometime between age 30 and 33, 10% might not be the right number. And so that's one of the ways we said, hey, let's, let's come up with a number. Let's use the math to assign the highest probability of success for the most amount of people that can employ this specific strategy.

[Brian Preston]

Well, I think it's, you know, this is where I love that I've been doing this long enough that I know the history of a lot of things, is that I think about the books that inspired me. The Wealthy Barber, the Millionaire Next Door, and like the Wealthy Barber. Well, we all know David is Canadian, so they have a completely different retirement savings structure than we do. So his savings rate was much lower when he wrote that in the mid-90s. And then also a different, you know, safety net structure than what we have down here in the States. And then I think about, like, Millionaire Next Door. You know, that was back during the pensions because that was also in the mid-90s when that came out. And then even books that, you know, have come beside us. Dave came out with total Money makeover in the 90s. That was a lot of the same things that was talked about earlier with the pensions were much more prevalent back then. We're like the modern system that really, I feel like, is the intersection point of where what people are doing what the math says. And I'm proud of that fact is because a lot of these things got, you know, got really popular back in the 90s. But has anybody updated it? So I'd like to say our system is kind of tested and it's ready for you.

[Ravi]

That's great. Go to moneyguy.com resources and scroll down till you see how much can you save, and that will help you see a little bit, a little peek behind the curtain on the math that they were just talking about on how much you should save. And then also brick house 1, 2, 3. If you would like a money guy Tumblr, just email winner moneyguy.com all right, let's do one more from it's me, J. Tolentino. It says, my spouse and I are on step seven and want to add a judgment free spending amount to our budget. Any rules or advice for calculating how much we can spend to bedazzle our basic lives?

[Bo Hanson]

Is this judgment? I'm assuming this is going to be like yours and my judgment free. Like I can spend this much and you can spend this much.

[Ravi]

That's how I took it.

[Bo Hanson]

Is that the way that you interpret it?

[Ravi]

Yeah.

[Bo Hanson]

So what's the safe spending number where it's judgment Free. Do you and you and your wife have that, like, hey, up to this much? We don't not, not, not check in with each other, but it's kind of like, oh, yeah, yeah. No, no questions.

[Brian Preston]

I mean, the first of all, step seven, it's. This is really a step eight question is because that's. So you need to make sure you're saving and investing at least 25. So I'm assuming you're saying that you are beyond that point, and then it's very personal at that point. That's why, you know, the technical term is prepaid future expenses. But I always say the good time rock and roll title is the abundance goals. And that's more of a personal conversation. I know. You know, I don't. You know, I just. Because your question was, do we have. I mean, if my wife went and spent a few thousand bucks on something, I'd at least like to know about it.

[Bo Hanson]

Sure.

[Brian Preston]

But we don't really have accountability. I mean, I get. Deal.

[Bo Hanson]

One of the. I think one of the great things about having cash management plan and a systematic savings where you know that you're already funding the savings. In my opinion, it doesn't really matter. We don't have a check in because we know that we're already, like, funding the goals. We're already putting money in the pot, in the buckets. We're already giving the way that we want to give, and we're already saving the way that we want to save. So that way, when it comes to spending, there's not really, like, a lot of tension there because we're highly aligned on stuff. Now, as a courtesy in our marriage. And if my sweetheart, if you're out there listening, I love you. She tends to be the bigger spender than I am. She gets more utility out of spending than I do. But she is good. Like, if there's something she wants to, hey, I want to do this thing to the house, or I want to work through this renovation, or I want to whatever. She certainly, like, runs it by me, but it's not so much because she's worried about me judging her. It's because we like to do stuff together. We like to have these conversations. We like to talk about those sorts of things. And so one of the things I'd figure out, and this is just, I'm kind of, like, getting to the other side of this question. I don't really judge my wife on the things that she wants to spend money on because, like, you know, she values things differently than I do. Whether it Be throw pillows. I put less than zero value on those. Or even like hair care, skin care, or those sorts of things. And so I want us to feel like, hey, we can be on the same page for the goals that we're working towards, but when it comes to the way that we both individually consume, judgment's not even. Not even really a concern. It doesn't even really come in the lexicon.

[Brian Preston]

Well, one that came to my mind thinking about me, you know, like cars. You know, I'm in my 50s now, and I've been very transparent and confessional. My wife's new car is such a bad decision that we leased it. And I think about the.

[Bo Hanson]

Because if you're going to make a bad decision, you don't want to rent. You want to rent the bad decision,

[Brian Preston]

you don't want to. You don't want to own that bad decision. So it's, you know, there's a difference between making that decision in your 50s versus if we had done that in our early 30s just because we were saving 25. So I think that that context definitely comes into play is what's the obligation and what's the opportunity cost of anything that you're doing? Because I don't want people to get to step eight of the financial order of operations when they don't have a lot of money and think, hey, now I can go live this great life. Yeah. I mean, which I guess technically you could, as long as you just know what you're getting into and what the tell is for this decision. I mean, when I say tell, I mean, like, how long of an impact? Because obviously car purchases and big purchases is different than throw pillows.

[Bo Hanson]

And when I think about bedazzling the basic life, oftentimes I think that's a joint endeavor.

[Brian Preston]

Right.

[Bo Hanson]

Like, I don't think about, like, bedazzling my basic life and her bedazzling her basic life. I said, those are like the things that we do together that make both of our lives better. When I, like when I kind of go through that, and even when they're

[Brian Preston]

judgment free, it's just like, still, my wife knows I don't love the.

[Bo Hanson]

Oh, you're very judgy about the car.

[Brian Preston]

She loves that car. That's why every day she's like, I love this car. And I'm like, okay, I'm glad you love it.

[Bo Hanson]

My wife knows how I feel about throw pillows. So, you know, she sees comments.

[Ravi]

Someone said, bo bringing up throw pillows again. They live rent free. In his mind, you know, it's so funny.

[Bo Hanson]

Because here's the thing. This is, this is how you know that like trauma sticks around.

[Ravi]

Oh, dear.

[Bo Hanson]

She doesn't even really have like a throw pill. I just remember early on in our marriage that was the thing. We had so many.

[Ravi]

Like your first.

[Bo Hanson]

She probably hasn't bought a throw pillow in ages at this point. But like from early on in our marriage, it was an issue because I just perceived it as such a ridiculous waste of money.

[Brian Preston]

Can I, can I tell you something that I've learned? I learned this in the last two weeks on throw pillows. As you get into nicer throw pillows, they don't even come with the pillow.

[Ravi]

Oh, it's just like the sham. Like. Yeah, like.

[Brian Preston]

No, I'm talking about.

[Bo Hanson]

Yes.

[Brian Preston]

Like even the decorative pillows. Like you think, even these little cutesy small pillows. I saw my wife when they, then they arrived. It was just the, it's just the outside. It's the outside. And then you've got to go buy, when you buy these fancy ones, you're buying, you're paying a fortune for the. How it looks and then you have to go pay a fortune for the filler.

[Ravi]

How it feels, the comfort.

[Brian Preston]

Yeah.

[Ravi]

Softness level of the pillow.

[Brian Preston]

Oh, and believe me, I could say

[Ravi]

I'll show you some said throw pillows. Haunt Bose dreams. And on that note, thank you for joining us for this Ask Money Guy show. But for real, we love answering your questions whether they're long form or rapid fire. We love chatting with you about everything from throw pillows to 529. So we will be back here from Tuesday on Tuesday at 10am Central answering more of your questions. And until then, be sure to check out moneyguy.com because we are always adding new resources more to the archive of episodes making it more searchable than ever. So moneyguy.com is always there for you, even when we turn the cameras off. Thanks for being here, guys.

[Brian Preston]

We have a blast. Thanks so much. I'm your host Brian, joined by Mr. Bo. Rest of the content team, Money Guy out.

[Bo Hanson]

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 in compliance with the securities law, 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.