Your 401(k) Might Be Costing You Thousands

Summary

Podcast Summary: Money Guy Show

Episode Title: Your 401(k) Might Be Costing You Thousands
Air Date: February 4, 2026
Hosts: Brian Preston & Bo Hanson

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Episode Overview

This episode of the Money Guy Show zeroes in on why your 401(k)—despite being an incredible wealth-building tool—might be quietly draining thousands of dollars from your future nest egg due to hidden fees, poor fund choices, and overlooked plan features. Brian and Bo break down the industry quirks, the importance of scrutinizing your investment options, and provide actionable strategies to help listeners maximize the full potential of their 401(k) plans.

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Key Discussion Points & Insights

1. The Power—and Pitfalls—of 401(k) Accounts

• Why 401(k)s Are Essential
  • "This is the first account that most millionaires cross into seven figures with." – Brian [00:30]
  • Tax incentives, employer matches, and profit sharing make 401(k)s outstanding vehicles for wealth-building.
• Not All 401(k)s Are Created Equal
  • Over half of the largest 401(k) plans include funds with revenue sharing (aka kickbacks) to the plan administrator.
    • "Of a thousand of the largest 401k plans out there, over half…had funds that shared revenue with the plan's administrator…" – Bo [00:56]
  • Not always a bad thing, but these arrangements "can be an expensive and costly thing." – Bo [01:18]

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2. Hidden Fees and Fund Selection Risks

• Sub-Account and Index Fund Fees
  • Even index funds in a 401(k) can have elevated fees compared to retail versions.
    • Example: A "Vanguard S&P 500" with an expense ratio of 0.5%+ when the true retail fund is below 0.10%. – Brian [01:58]
  • Always scrutinize the fine print and internal expense ratios.
    • "Pay attention to the way the index fund of your 401k is structured to make sure you're truly getting the low cost variety." – Brian [01:58]
• Proprietary and Closet Index Funds
  • ~40% of 401(k) investment options are affiliated with the plan provider; these may not be the best or lowest-cost funds.
    • "Those are not the best funds available, those are not the lowest cost funds…not the best performing either." – Bo [03:02]
  • Warning against active managers who simply mirror indices but charge more.

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3. Expense Ratio Example: The Long-Term Cost

• Comparing Revenue Sharing vs. True Index Funds
  • If two funds track the S&P 500, but one has a 0.67% fee (revenue sharing) and one a 0.015% fee (pure index), the difference, compounded, is massive.
    • "It could be in the hundreds of thousands of dollars category." – Bo [05:20]
  • Quote: "Price is what you pay, value is what you receive." – Brian [05:46]
• Conclusion: Scrutinize every option within your plan.

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4. Action Steps: Advocating for Yourself and Others

• Being Your Own Advocate
  • Ask your HR or plan administrator for low-cost index options; it's often easier to enact changes than you think.
    • "Empower yourself, empower your fellow employees. Do it in a tactful way…" – Brian [07:33]
  • Real-world example of a listener improving their company’s 401(k) by simply raising questions, leading to addition of better fund choices.
• Win-win Improvements
  • Lowering costs may save both employees and employer on administrative fees.
  • Advocating for 'safe harbor' plans is beneficial for all.

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5. Nuggets for 401(k) Success

• The Power of Simplicity
  • Avoid analysis paralysis from too many options—keep it simple and automatic.
    • "If you know what you can control, get out there and maximize those things. And then, set it, forget it…make it automatic for the people." – Brian [08:46]
• Set It and (Mostly) Forget It
  • Find the best, low-cost funds, automate contributions, periodically review for changes.

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6. Ask the Money Guy & “It Does Not Depend” Rapid Fire Segment (31:27)

Notable Questions and Answers:

Q1: Rollover conversion to Roth IRA—lump sum or dollar cost average?

• A: Lump sum is typically best, but use the “Goldilocks Rule”:
  • If the amount is <10% of your total assets, lump sum.
  • 10%-20%: DCA over 4 months.

  • 50%: DCA over 12 months.
    "Lump sum investing historically is the best choice, but markets are up more often." – Brian [12:36]

Q2: Lowering savings rate temporarily for life needs (e.g., new car, growing family)?

• A: It’s OK to drop to 10% briefly if it's for a big one-time need. Get back on track ASAP, but always try to get employer match.
  • "Money is nothing more than a tool that allows us to achieve our goals." – Bo [17:07]
  • "Make sure you get back on track as soon as possible, and never give up the free money from your employer." – Brian [18:11]

Q3: Backdoor Roth: Should you roll traditional IRAs into 401(k) to avoid the pro rata rule?

• A: Yes, but only if your 401(k) has good investment options/low fees. Check for after-tax basis in your IRAs, which could create further Roth conversion opportunities.
  • "Don’t roll after-tax dollars into your 401(k), or you’ll lose out on tax-free conversion potential." – Bo [22:45]

Q4: Too many sinking funds and too much in cash?

• A: Yes, it’s possible to be overly conservative—reassess if you’re keeping cash tied up that could be working for you. Focus on what’s needed for the next 3 years, then invest the rest for long-term growth.
  • "Too much of a good thing can all of a sudden turn into a weird obsession or bad thing." – Brian [28:18]

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7. Rapid Fire: “It Does Not Depend” (31:27–41:16)

Hosts challenged to answer quickly without saying “it depends”
Memorable moments:

• Best strategy if no 401(k): Traditional IRA (if deductible), if not then Roth IRA, then taxable brokerage. – Bo [32:28]
• $2,000 from Emergency Fund to Max Roth contribution?
  • "Yes, but don't make it a habit." – Bo & Brian [35:42]
• "88 $1 beers, or one $88 beer?"
  • “88 $1 beers would probably be all of my 2026 beer needs.” – Brian [35:08]

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8. Listener Q&A: Mortgage Rates, RSUs, and More

Q: Is a 6.625% mortgage "high interest debt"?

• Not for a home loan—focus on steps to refinance when rates drop, but don’t let perfect be the enemy of good. Don’t reset your mortgage amortization when refinancing. – Bo & Brian [51:43]

Q: Hedging income when paid in private RSUs at a tech company?

• Live/safe as if the RSUs don’t exist for now; maximize saving/investing outside the private shares to diversify your risk.
  • “Don’t have all your human capital tied into the same place you’re building investment capital. Concentration builds wealth, but diversification protects it.” – Brian [56:22]

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Notable Quotes

• "This is the first account that most millionaires cross into seven figures with." — Brian [00:30]
• "Price is what you pay, value is what you receive." — Brian [05:46]
• "A lot of people get so wound up thinking, ‘I can never not be exactly where I am.’…Money is nothing more than a tool that allows us to achieve and accomplish our goals. Money is not the goal in and of itself." – Bo [17:07]
• "If you can create the scenario where you say ‘hey, not only will this plan be better for me and I'll get lower cost options, but it's going to save you as the employer in terms of administration costs and it's going to be better for the coworkers’…" – Bo [08:07]

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Timestamps for Important Segments

• 00:06 – 08:46: Main discussion on 401(k) fees and pitfalls
• 08:46 – 10:09: Simplifying your 401(k): action steps for individuals
• 10:09 – 31:01: Q&A with listeners (IRA conversions, savings rates, sinking funds, etc.)
• 31:27 – 41:16: “It Does Not Depend” Rapid Fire round
• 46:02 – 50:58: Brian’s “caper” story about escaping Nashville’s snowstorm and traveling to Florida
• 51:01 – 54:21: Mortgage interest rate Q&A
• 54:46 – 58:13: Hedging RSU income as a tech employee

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Takeaways and Strategies

• Always review and compare the expense ratios within your 401(k)—even for "branded" index funds.
• Advocate for better fund choices with your employer or HR department; sometimes all it takes is asking.
• Don’t settle for proprietary, expensive, or “closet index” funds if better, cheaper alternatives exist.
• Keep your 401(k) allocation simple and automated, but review periodically for any plan or fee changes.
• Use the “Goldilocks Rule” when deciding on lump sum vs. dollar cost averaging lump sums.
• If paid in private stock (RSUs), live and save as if those shares don’t exist for safety.
• Refinance your mortgage wisely and don’t keep resetting your loan term when possible.
• It’s okay to temporarily adjust your savings rate for big life moments—but always get back on track.

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Tone & Style

Brian and Bo maintain their signature friendly, approachable, and sometimes humorous style. They stress simple execution, being proactive, and empowering yourself and others—plus, they’re always keen to share personal stories.

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Final Thoughts

401(k)s lay the groundwork for wealth, but only if you’re vigilant about hidden fees and fund quality. With a little extra legwork, and by asking the right questions, you can keep more of your money working for you—and maybe even help your coworkers along the way.

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For more resources, visit: MoneyGuy.com/resources

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End of summary.

Transcript

[A]

Your 401k is likely costing you thousands of dollars.

[B]

Brent, I am so excited to talk about this because we know that the 401k is an unbelievable tool available to most working individuals out there. And yet it can be, even though it's an amazing tool, it could be something that's potentially costing you and you likely have the ability to, to change that. That's what we want to talk about today.

[A]

Well, I mean, let's, let's talk about why are these so powerful? First of all, we know even from our own millionaire studies that we've done, this is the first account that most millionaires cross into seven figures with. And there's a lot going for it. If you think about, there's lots of tax incentives, you think about free money from your employer, the fact that you're getting profit sharing. There's a lot of things to get really excited about a 401k. So we want to make sure that you're doing it right.

[B]

But not all 401ks and 401k plans are accredited equal. There's actually a study done by the Department of Labor that found that of a thousand of the largest 401k plans out there, over half of those plans had funds that shared revenue with the plan's administrator, meaning that there was some sort of kickback, some sort of payment for the funds and the other investment options that were found in the plan. And so you may be wondering, well, is that for sure a bad thing? Well, not necessarily in every circumstance. But can it be a bad thing and can it be an expensive and can it be a costly thing? Absolutely.

[A]

Well, I mean, let's, let's talk about what does this mean when we find out that there's extra fees in there. We, we've seen this in several different ways. I remember when we've gone and reviewed 401k plans, you see sub account fees, even. What's amazing, usually this is an active account. You know, if you find out somebody, there's a money manager or there's something. But I've even been surprised that they have realized that a lot of investors want index funds.

[B]

That's right.

[A]

You even have to pay attention to the way the index fund of your 401k is structured to make sure you're truly getting the low cost variety. Because we even found there was a plan. I'm not going to say too many names, but there was a plan that was labeled as a vanguard S&P 500. And then when we looked at the internal expenses, we looked at all the fine print, we found out that this thing had an internal expense ratio that was over half a percent.

[B]

That's right.

[A]

When we know that the traditional Vanguard S&P 500 is less than 10 basis points. So you got to pay attention to this because it could cost you a lot of money in the long term.

[B]

Yeah. So you may see an expense ratio inside of a fund, and that expense ratio may be going, may be paid as a kickback back to the plan provider. So it's something that you want to make aware of because even though this is a hidden fee, it can really affect how many dollars stay in your back pocket. And there were some other really interesting findings in this study that was done by the Department of Labor. The average 401k of these thousand largest plans they looked AT offered about 22 different investment options.

[A]

That's a lot.

[B]

It's a lot. It's not insane, though. It's not hundreds. But about 40% of those available investments were affiliated with a 401k provider. Again, this is not inherently a bad thing. You're probably thinking, oh, I've got a Fidelity 401K, I've got Fidelity funds, I've got a Vanguard 401K, I've got Vanguard funds. But oftentimes when it's associated with the provider, when you see the same fund family there, there's a really good chance that those are not the best funds available. Those are not the lowest cost funds available, and oftentimes those are not the best performing funds available either.

[A]

Well, I think it's just, you have to. It requires an extra step. When I see proprietary funds, and like I said, you said a good one. Like, if you think about The S&P 500 at Fidelity, that's going to be low cost, the lowest cost, and that would probably fall into this 40%. And that doesn't necessarily mean it's bad, but it does mean you at least need to go follow all the asterisks, all whatever markings they put next to the internal expenses, so that you can figure out what are the fees and what are you paying? Because we just want to make sure you're not paying those proprietary fees on funds that are just. It's not necessarily in your best interest. And there's also be careful of the active managers that are essentially closeted index funds, but they're just way more expensive. Yeah.

[B]

Let's look at an example, and that's the closet index fund is a great example. A fund that is doing the same thing as indexes, but Charging a whole lot different. Let's think about two investors or two funds available inside of your plan. Let's say that one has a revenue share and the other is non revenue sharing, just a low cost index. And let's say that both of these funds aim or goal is to track the S&P 500. The S&P 500 return is 10%. Well, when you actually look at the underlying internal expense ratio, the fund that has a revenue share arrangement in place might have an expense ratio of like 0.67% where the actual indexed non revenue sharing version could be as low as.015%. So a fraction of a percentage point is what you're paying in a fee. Well, when you think about if the broad index itself is returning 10, the actual range return that you receive via the non revenue, non revenue sharing index could be something like 9.985 versus the revenue sharing fund which is like 9.33%. And even though these are the exact same funds tracking the exact same index with the exact same type of exposure, the results that you get as an investor are not the same. When you think about how meaningful could that difference be over the course of an entire working career? It could be substantial. It could be in the hundreds of thousands of dollars category.

[A]

Wow. I mean, that's why, look, pay attention to what you're paying and make sure you're getting value out of it. That's the thing, we don't like it when there's fees that don't technically add any value to what you're getting. If there's a much better index fund, get the lowest cost version of itself. Price is what you pay, value is what you receive. And we just want to make sure that those things are connected.

[B]

So what are some things that you can do? What are some key takeaways? And a lot of people don't realize this, that you actually have the power to be an advocate for your plan. So make sure you're asking the right questions. A lot of times we've actually had this happen where a big fan of the show reached out and said, Guys, my 401k is just not great. It's, it's a provider and the, I won't say the name of the company, but it's sub account fees. There's sub account fees and it's very expensive. And the employer match is not great. And it's just, it's District two can.

[A]

Fund it, you know, because it's old school.

[B]

And so we said, hey, why don't you ask Your HR department these questions, hey, why don't we have any low cost indices? Hey, why don't we think about a safe harbor plan? And we gave them basically these list of questions to ask. Well they took it to the HR department and they said yeah, sorry, honestly we set this up 10 years ago and we haven't looked at it. It's been on someone's desk. Where did you get this information? How do we improve? And we were actually able to come in and improve the plan, actually put in a low cost safe harbor type plan. So if you can ask the right questions, even if you can't change the provider, if you can't change a custodian, you might be able to say hey, can we just make some low cost index funds available rather than just having all these active funds, can we get an s and P500? Can we get an international index? Can we get a small cap index? And you might be amazed that having those changes take place in your plan is not as difficult as you might think.

[A]

Yeah, and that's, I mean you just hit on all the reasons on why you need to know your investment options in the plan. And look and it's on, it's on the responsibility list of being a fiduciary provider of a retirement plan for many employees that they should be paying attention to how good these investment investment options are. So, so empower yourself, empower your fellow employees. Do it in a tactful way because nobody likes employer doesn't want an employee that's out there just causing trouble for the sake of trouble. But if you truly can make things better for your coworkers and for yourself, let's go advocate for this.

[B]

Well that what you're doing there is you're creating a win win. If you can create the scenario where you say hey, not only will this plan be better for me and I'll get lower cost options, but man, it's going to save you as the employer in terms of administration costs and it's going to be better for the co workers. If we have a safe harbor plan, then maybe the ownership is going to be able to put more money in without having to worry about failing testing. There are ways that you can structure the conversation again to be an advocate for yourself because the 401k is an incredible account, it's an incredible tool. And if you're going to work an employer, you want to make sure you have the best 401k possible, the best 401k available.

[A]

And I like, look, we already said majority of plans, 22 funds, they add a lot of complexity. The win is typically keep it simple. That's right. If you know what you can control, get out there and maximize those things. And then set it, forget it. Make it automatic for the people. That's how you win the 401k game.

[B]

I love it, Brian. I love that we get to talk about this. I love that we can educate folks on things that they might not know, they might not be. They might know. Hey, I need to. I need to save and I want to save, but man, there's little nuances to the 401k into the investment options I didn't know about. I love that we get to sit in the spot where we can talk about those things and I also love that we can talk about the things that you guys care about. It's why we show up here every Tuesday morning at 10am Central to load you guys up. So if you have a question, if you want to get our take, if you want us to weigh in on something in your life, we have the team out in the wings collecting your questions right now. So make sure you get them in the chat with that creative director. Ribe, I'm going to throw it over.

[C]

To you queued up. But first, I need your help with something. I want to try a new segment called it doesn't depend. It's a rapid fire segment where Brian and Beau answer questions rapid fire style. And the one rule is they have to do it in under a minute and they can't use the words it depends.

[A]

Oh, wow. So look at you.

[C]

What I need you to do, if you are watching live and are active in our chat right now, if you have a rapid fire question, just put the initials RF in front of your question and. And then write out your question.

[B]

We can't say I will be choosing.

[A]

So here's what I think is funny. What y' all don't know. I love kind of sharing behind the scenes because by the way, I'm back in town. If y', all, if y' all didn't catch on, I'm actually here.

[C]

I am happy you're back. It's so much more fun when you're here.

[A]

Bo, right before we went live said, reby, we should do rapid fire. And I love that Reby is so fast acting. She's like, okay, if he's gonna make this and push me to do this rapid fire, I'm gonna at least make it hard on these guys. So let's take out it depends. Yeah.

[C]

I said, I'll make you. I'll make you a rapid fire segment. Bo, let's go.

[A]

I love it.

[C]

Let's go. So we are going to do some normal, tried and true money guy questions. But then we are going to do our it depend. It does not depend. It does not rapid fire segment between the 30 and 40 minute mark of today's show. So get those questions in the chat because yeah, I'm excited about it. We'll see what Brian and Bo say. But to kick off our Ask the money Guy, let's go to Ryan J's question. Up first. It says, hi Money Guy team. I love your content and Millionaire mission. That's awesome. My question is I recently did a rollover conversion from an old IRA to a Roth. It's about 45k. Should I dollar cost average over time or just throw it in all at once? What do you think?

[B]

It depends. I want to get them all out before we get to the rapid fire. I want to get them all out. We get this question a lot of times now. Yours is specific to the fact that you did a conversion. But a lot of times people will come into a large lump sum of money. Maybe they sell a business, they have a pension that pays out a lump sum, they sell a piece of land, they have a capital transaction, whatever the thing may be, and they come into a large sum of money. They want to think, man, I really want to put this money to work. But I'm so nervous because what if I put it in and then fourth quarter of 2018 happens or 2022 happens or 2008 happens? How do I decide when is the right time to put in? Or is the answer I should always dollar cost average. For those of you who don't know, dollar cost average means I'm going to buy a specific chunk on a specific timeline every single month or every single week or whatever your cadence is. And so the question that people often ask is, okay, which one is better and how do I know when and which one?

[A]

Well, this is what I love. At least our it depends. We give you some rules and because without a doubt, lump sum investing historically is the best choice, but markets up more often. Markets make money 8 out of 10 years. So you can, you know, right there, you know, hey, the edge is in my favor. If I get this money working asap, it's the one off stuff that really throws you off. So I hate it when people go all of a sudden binary where it's either on or off is either we're going to be lump sum or we're going to be dollar cost averaging. We're like, well, that's not the way real money management and good decision making works. Is what's the risk of this transaction to my entire financial life? Because look, if you got 45,000, but you have $1 million working in the background, throw it in there. Just get it to work ASAP. But what if this is the. You've only got $50,000 of investments and this 45,000 is now, you know, 90% of your holdings. We need to understand that there is some variation to what you need to do, and that's why it's called independence. But we give you rules. And that's why I'm gonna put the content team on quick. Let's see if they can do it. But we have a Goldilocks rule that works on trying to figure out whether you want to do lump sum versus dollar cost averaging. It's all tied to what is this as a percentage of your total investable assets. I was hoping that they were scrambling.

[B]

Oh, and there it is.

[A]

So impressive.

[C]

Give them a couple extra seconds. They got it.

[A]

I just need a little time. But look, we give you the rules right here. So R. Depends actually has an answer is because we say, look, if this is less than 10% of your total investable assets, put that money to work ASAP. Obviously, if this starts to get between 10 and 20, spread it out over four months. That way it's not really pausing the gain process too much, but at least is protecting you from that quick hit of losing 20, 30% in a small period of time. If this is over 50%, just like we talked about if this was 90% of your holdings, let's spread that DCA over 12 months. Just so you get this. You're setting up the automatic behavior that gets the money working, but it's now protecting you from the risk of the transaction.

[B]

Love it.

[C]

That's great. Ryan J. Appreciate your question, by the way.

[A]

Is that is the Goldilocks. I know now that we made the site so much more searchable. You probably can go to moneyguy.com and just search Goldilocks. But is this a resource?

[B]

It's going to pull up an episode, but it's not a resource.

[A]

Not a resource.

[B]

We have talked. We've talked about the rule book, right? We've. The money guy rulebook is on the. Is on the docket team.

[C]

They don't know it's on the docket.

[A]

But now. But the good news, the searchability of the website is so good now that you can go find this stuff just by us talking about it.

[C]

That's right, you can.

[B]

Are you seeing all these rapid fire questions? Oh, yeah, man. We just, if we took a minute.

[A]

Are they all money based or any of these, like, you know, you know, was Bo's bicep, you know, curl?

[C]

You'll have to wait and see.

[B]

Of all the lists, that's the weirdest one to come up with. But I like it.

[A]

I don't know.

[B]

I like it.

[A]

By the way, we have a new thumbnail that's working its way around the ranks. And I don't even know if Bo knows this because when Ruby sent me the draft of it and I was like, why is Bo flexing?

[C]

It's our new podcast.

[B]

It's our new podcast where you may be seeing it today.

[A]

I hope I don't start a fight. But Ruby goes, if you think that one looks flexing, you should have seen the other ones that we looked at.

[C]

He said, why is both flexing? I was like, that's all the photos.

[B]

I'm not.

[A]

So swole that you just can't help but hide those muscles anymore.

[B]

I don't know what to tell you. Health is wealth.

[C]

All right, let's go on to Jacob, the CPA's question. It says, is it okay to lower savings rate to 10% for one year? I'm 26 with one time saved, which is 81k. I'm guessing that's one time as income infu. Step six with baby number two. We need a new van and my wife's car won't fit two car seats and isn't reliable. We will do 23 8.

[B]

Yeah, Jacob, this is a great question because so many people, so many financial mutants out there, they think, guys, I'm going to put you on the spot content team, if you want to pull this up. So many people think the foo is a straight line. You go from step one to step two and step two to step three, and over the course of your career, it just goes straight from bottom left up the top right. But in reality, that's not how it often works. Life happens. We have things where we get married and we buy a home and we start a family and we have to replace a car and we have a job change and we have a fill in the blank on all the things. And so a lot of people get so wound up thinking, man, I can never go back. I can never not be exactly where I'm at, where I am. And you have to remember that money is nothing more than a tool that allows us to achieve and accomplish our goals. Money is not the goal in and of itself. And so the foo is supposed to be a guideline that helps move you towards your goals. The foo itself is not a goal. So, Jacob, if you find yourself in a situation where you're about to have baby number two, congratulations. That's amazing. Your wife's car won't fit two car seats. You have to upgrade. And the way that you're going to be able to save for that 20% down to go buy that automobile to follow 23, 8 is you have to back down your savings to be able to do that. That's okay. That's part of life. That's part of the financial journey. Can you do it? Absolutely. Now, what I love is at $81,000 saved up at age 26, you're already like, well ahead of the curve. Like, you're doing awesome already.

[A]

Yeah. You know the rules we talk about. By 30, you want to have one times. You're already well above that. What I would do to keep yourself motivated, just a little facets that will, you know, help you keep yourself on track. I have no problem with you bringing it down to 10%, but at least try to get the employer matches and all the things that get you free, you know, they level you up in a lot of really cool ways, like 50%, 100% guaranteed rates of return. It's hard to walk away from those things. But then also put the pressure on yourself to get on track asap. Feel like that there is a ticking time clock of compounding growth. Your army of dollar bills that are not growing through the wealth multiplier formula because you've made this decision, and I think that will keep you motivated. But being a CPA, 26, crushing it. I think this will just be a hiccup in your long successful life.

[B]

And congrats on baby number two.

[A]

Congratulations.

[C]

Great answer. Thank you for the question. Jacob, the cpa. We've got a question from Jeff P. Next. It says question for the team. Does it make sense to move my traditional IRAs back into my 401k to free up the backdoor Roth opportunity without triggering the pro rata rules? I'm male, 50, retiring at 65.

[A]

I mean, we don't know the details of the 401k that you're rolling it back in, but this is definitely a very viable strategy to open up the opportunity to do backdoor Roth conversion strategies.

[B]

So what I'll do is I'll explain what the backdoor is and what the strategy doing. I'd love you to think, Brian Times that it would make sense or would not make sense. Like what would you look for for it to or to not make sense? So for those of you that aren't familiar with what Jeff is saying is that if you make too much money to be able to contribute directly to a Roth ira, there is currently an opportunity where you can put money into a traditional ira, not take the tax deduction that makes it a nondeductible contribution and then you can convert that to Roth. Well, if you do that and you don't have any other outside IRA assets, so no IRA rollover, traditional ira, SEP ira, simple ira, you don't have any of those hanging out when you do that conversion. If all you're converting is after tax dollars and after tax dollars are all you have in your IRAs, then it is a completely tax free backdoor conversion. And so what Jeff is saying is, hey, I have these traditional IRAs that have pre tax money. Rather than having them sit there, I'm going to roll them into my 401k, into my employer sponsor plan, thereby reducing my IRA balances to zero and opening up my ability to do backdoor Roths. It's a wonderful strategy. A lot of people do it, A lot of people make that movement so they can do backdoors. But his question I think was does this make sense? So I'm trying to think about Brian times when it would not make sense to do that and implement that strategy.

[A]

Yeah, let me, let me give the two that just immediately. And I'm sure if, just in case my brain is not working as fast as yours, if you come up with additional on top of this easy low lying fruit is you have a horrible 401k with really expensive funds, really high fees and other things that way outweighs the putting the money in there. So that's the first thing. But if you work for a big company and you have a great 401k with low cost index funds, lots of options. Yeah, I think it makes a lot of sense at that point. There's also what if your income is not high enough to where you even need to do a backdoor Roth conversion contribution? A lot of people if your income and that's why I was scrambling because we're in a brand new tax year. So I don't want to give out bad numbers. But on the spot I should have already flipped over to this. You know, you can make contributions up to a Roth IRA. This is back in 2025 so I'm sure this has gone up for incomes where, oh, here we are. Here we are for a 20, 25, 236,000 to $246,000 for a married couple. For single, it's 150,000 to 165,000. So if your income is under those thresholds, you don't have to worry about the structure. You can just contribute directly to the Roth accounts. But if you're in a higher income situation and you have a really clean 401k with lots of opportunities, I kind of like it. I mean, this is why I resemble this in some ways, is that I love the Roth conversion strategies.

[B]

I'm going to give you one from experience where you just want to think through this. You know, oftentimes traditional IRAs are just sort of this kind of weird account that, like, it used to have your attention and then it loses your attention, then it comes back. And so we've seen this with clients where they had a traditional IRA that at some point in time they recognized, man, I want to do tax deferred savings, but I make too much to do a deductible contribution or I make too much. I already have a 401k, so I can't duck. But I'm just going to put money in my traditional ira and I do that for a few years and not really thinking about it. I end up having some after tax dollars in my traditional ira. Well, fast forward in my career and I change jobs and I roll a 401k in. And so now my traditional IRA has this big pot of money in there. It's not uncommon if you have a traditional IRA that there might be some what we call basis in that. Good call there. I'm literally thinking about two clients. We were going to do this strategy where we were going to roll their traditionals back into their 401ks. And we just asked them the question, hey, where'd the traditional money come from? Like, oh, well, it was a smatter and we used to contribute. And I was like, well, you guys have always worked for large companies. When you contributed, were you doing deductible contributions? Like, no, we were just looking for like a tax. We actually forensically went back, I want to say it was like 11 or 12 years on their tax returns and found every single year where they had made a contribution. We were able to unload for each or to uncover for each of them, like it was something like 60 or 70,000 thousand dollars of basis in those traditionals. And so what we were able to do is we were able to roll all the pre tax money into their 401k leaving behind just the basis so like 60, $70,000 of basis and immediately convert that basis that was already after tax to Roth. Had they not recognized that, had they not caught that, what they would have done is they would have rolled after tax dollars into a pre tax account, thereby putting it back inside the tax shelter, causing it to be taxed two times and missing out on tons, tons of Roth opportunity, Roth planning. So you want to make sure, Jeff, before you just willy nilly blanket roll money into your 401k from a traditional, you know where those traditional dollars came from because you don't want to mix up after tax dollars and pre tax dollars because there's a big planning opportunity. Otherwise well done.

[A]

Wow, that was awesome. I mean because I knew he was going, I was like, there's something I'm probably not, not coming up with. And the basis is a big, big determination that's going to help somebody and somebody's going to be like thank goodness I listened to that third point that BO just shared.

[B]

It was literally like hundreds of thousands.

[A]

That's a big one. It was a big one.

[B]

It was a big one. It was a big, big one.

[C]

That's good stuff. Jeff P. I hope that really helps you think through your question.

[A]

As I was going to say, that's what you want out of your financial advisor. And this is why we say your lifestyle starts off financially so simple. Because building wealth is not necessarily hard or even complicated. In the beginning. It's just a matter of making the things as simple and automatic as possible. But then as you have more and more success, things like that happen where all of a sudden your life gets complicated even though you are trying to keep things structured as simply as possible. And that's where we'll leave the porch light on. And we this you can tell we got the chops to make sure you navigate this well.

[B]

Love it.

[C]

It's good stuff. All right, your chance to get rapid fire questions in is coming to a close. If you're watching live right now, be sure to put an RF in front of your question. It will be part of our rapid fire segment in just a few minutes. But first we have Leah Feld 4397 and her question it says can you have too many sinking funds? We have a 6 month emergency fund plus funds for a new car, repairs, travel, etc. Combined this puts us at 140k plus in cash. Household income is 225k, they're 32 years old, 400k saved in retirement.

[A]

They're crushing it.

[C]

They are crushing it. So what do you think about.

[A]

Hang on. Before you take that off, let me just get. Because there's some. Lots of data here. I know you're faster, but go ahead and talk.

[B]

Well, the answer to the question is can you have too many?

[A]

Absolutely.

[B]

We've actually, we did a Making a Millionaire episode. If you've not, if you've not checked it out, make sure you subscribe right now to the channel so you can get updates every other Monday when we do one of these. Because a lot of people do this. They say, all right, I've got my emergency fund and I know that I need my three to six months of living expenses, but in addition to that, I might need to replace my car. So I'm going to have an additional sinking fund, but then I might have some home repairs and I have that. Then I've got this travel, then I've got. And all of a sudden you have these 8, 9, 10, 12 different sinking funds and you get yourself in the situation like Leo, where your household income is $225,000 and you have well over half of that amount in cash, which is likely way bigger of a cash cushion than you need because odds are not all of those things are going to hit at once. I'm going to buy a new car and I'm going to get the repairs and I'm going to have to travel and I'm going to need to tap into my emergency fund. You're not recognizing that dollars inside of sinking funds can be used for multiple purposes at different times. But I think financial mutants, we like to compartmentalize. We like to have our little nice little chunks. But it does get you in the situation where even though you guys are absolutely crushing it, you're probably in way more conservative of a posture than you actually need to be in.

[A]

Well, I think you're focusing on the minutia of it instead, really, you're focusing on with a fine. Like you need to pull the microscope back. Like you're looking at 10 times magnification, where maybe you just need one times and just look at it as a whole so you can get the overview that, hey, what is really, do I need the next three years? And then let's look at our emergency fund syncing funds in that scope of three years. And then, yes, let's keep that money. But if this is now this thing is starting to get where we have a full year's Salary. And we don't need that much, especially six figures. Multiple six figures. The way it's headed. Yeah, we've probably turned a good behavior into a hyper focus. And like all things in life, too much of a good thing can all of a sudden turn into a weird obsession or bad thing. And that's why we got to have perspective, got to have the why understand what is the purpose is because what I don't want you to do, especially did we get the age here.

[B]

I think 32 is how old they are.

[A]

If you're in your early 30s. Yeah, there it is, 32. I mean, your wealth multiplier at age 32. Huge. Is still 18 times. So you can imagine if you. If you're misjudging this by 20, 40, $50,000, all of a sudden, I mean, you're walking away from your future self having hundreds of thousands, hundreds of thousands of dollars working out there in your army of dollar bills. So. And especially if you're not at step eight, you know, because sometimes if you read Millionaire Mission, I share that cash can be a kind of a contrarian wealth builder. But that's well beyond the, you know, steps one through seven. That's when you are. You're stacking it up in the background. And now you're looking at how do I use cash as a magnifier of wealth? By having money when nobody else does during the, you know, any upcoming downturns. But if that's not. And you're young, let's make sure we're not leaving those army of dollar bills sitting on the sidelines.

[B]

32 with 400,000.

[A]

Oh, yeah. We definitely work with us. Is definitely in your future. Yeah. I mean, because that's incredible, y'. All. Well done. Golf clap. I mean, that's just really good stuff.

[C]

A golf clap. I like that. It is true.

[A]

If you. I don't have the handshake, you know, because. Was it Paul. Hollywood has the handshake. We got to figure out what we can do. I mean, I gu. So Bo. High fives, everybody. I'm a big high five. But maybe he's a high five too much, you know, around here, I think. No, you know, but so we gotta figure out what our money guy thing is when somebody's done something so well that we. Golf clap. Doesn't sound right either. But we'll figure it out.

[B]

We'll workshop it. We'll keep workshopping.

[A]

I got some really smart, creative people around us.

[C]

I don't know. We'll think about it. But as I was saying it is true that if you ever are at that level of complexity where you just don't know what you don't know and you want to make sure sure you get it right, go to moneyguy.com and click on Become a client. And you can just explore what it looks like to become a client of a bound wealth. We're always here for you when you need us. All right, we have reached that time in the show.

[A]

Oh, boy.

[C]

When it is time for our It does not depend rapid fire segment where Brian and Beau will answer a series of questions submitted by our live chat today in under a minute and they are not allowed to use the words and it depends.

[B]

All right. And so I want to make sure our production team. You're getting that timer going for us.

[C]

Yes, they are.

[B]

It's a minute combined. Right? Like the both of us have to answer inside of 60 seconds.

[A]

So I can't hog it because we know I'm the one that's going to hog the time if we're not careful. Okay.

[C]

I say yes and here is what I will. I will throw you a bone here. At the end of our questions, we will have a maybe it does depend segment where you can say all the things that you were just dying to say that you couldn't for the sake of time.

[B]

Love it.

[C]

Okay, be careful.

[A]

What we'll go.

[B]

We'll ping pong back and forth. Who starts.

[C]

So do it. Be short. I want to see you do rapid fire.

[A]

Going first. I'll let you go first.

[C]

All right. Okay, here we go. First question from Miris. Rant says best strategy if employer does not offer a 401k.

[B]

No 401k. Best strategy would be saving to a traditional IRA, assuming that you could deduct it. If not, then Roth ira, traditional ira, then after tax brokerage account.

[A]

God, I loved it. I mean, you crushed it because that's exactly the order. I would. I would do that as well.

[C]

He's already used up all this time.

[B]

What?

[C]

He just took so long to say I loved it. I loved it.

[A]

We didn't even hit a minute because, I mean, it was totally the Roth ira. I mean. And by the way, let me show you. Let me shake it like it's hot, like it's supposed to be. Because Andy Hill did a great job, but he didn't shake that thing like it was supposed to. When you get the foo, you shake this thing and then that's what. So you got to hit that Roth just like Beau said. And then when you get out to retirement. Since you don't have an employer match, you go hit the traditional ira. And if you don't have that, you go down here to step seven and you go start doing the after tax account.

[C]

So set it perfectly strong. You give Brian the minute he will use.

[B]

No, we 50 seconds.

[A]

Luke. We still have 50 seconds.

[C]

Next up, BP 6685 says 529 or Trump account.

[A]

Well, I mean, I think you take the free money from the Trump account for sure because free money's good. But we're finding out because these things are going to be treated just like normal IRA accounts. So there might be a Roth conversion opportunity in the future. We still think that 529s go get the free money because we love free money. But then we still love 529s as long as there's a why that education is going to be in the future.

[B]

Yeah, yeah.

[C]

Fred D. Asks DCA Roth IRA contributions or lump sum them in January.

[B]

Lump sum in January. Assuming your portfolio has reached the size to where the Roth contribution is immaterial relative to your total portfolio.

[A]

Yeah, if you've got, and I'll put numbers to it, if you've got over $60,000 of investable assets, then you probably should just have the strategy of just lump summing it in there. Know thyself if you're one of these persons because it's an annual thing. I love setting up dollar cost averaging. If your income is nowhere near the tippity top of the exclusion of you make too much, then I like setting up automatic behaviors to just buy every month when you get paid.

[C]

Zach P. Says, would you rather a one $188 beer or 88 $1 beers?

[A]

First of all, I have to know.

[B]

What a $88 beer tastes like.

[A]

I would need.

[C]

Honestly, I'd say that's like a fancy beer.

[B]

I was like, honestly, that's like a, that's like top 10 here. Eight $188 beer.

[A]

I would, I could do 88 beers at this age. Now, college age would have been different. That would have been my beer that I could do. I could last me an entire year. So it'd be option two. 88 $1 beers would probably be all of my 20, 2026 beer needs.

[B]

I would have not drank.

[A]

I would truthfully, that could probably been 2026 and 2027. Now college, that might have made it a, you know, two weeks. Maybe I shouldn't say it out loud. Two weeks.

[C]

I'm just not going to ask any more questions.

[A]

Remember I did go to Spinnakers and Club La Vila back when I was in high school, so things were a little different. I grew up feral.

[C]

Amber62654 asks, Is it okay to pull 2000 from the emergency fund to max out my Roth IRA for 2025?

[B]

Yes. Because one of the little known secrets about Roth is you can get to your basis penalty free, tax free if you have to, assuming that you have more in your emergency fund than just $2,000.

[A]

But don't turn it into a crutch behavior. This needs to be a one off thing that. Yeah. And that when you're running it so close in the beginning of behaviors and setting up good habits that yeah, I want you to maximize this by April. But then make sure in the next year your emergency fund is big enough that these things don't cross paths as easily. Love it.

[C]

All right, for these last five we're going to shorten the time to 20 seconds.

[A]

Wow, look at y'. All. We're doing too good with one minute.

[C]

I just speed it up so you have 20 seconds. You can't say it depends and then I will give you a follow up at the end. We're not going to have to say.

[B]

What you need to say.

[C]

Maxim be Ken Camp 3342 as a serious username says. Why do you say that Roth 401k depends on your marginal tax rate but still encourage backdoor and mega backdoor.

[B]

Roth backdoor, Mega backdoor come at different times. We encourage mega backdoor because whenever you can do Roth tax free you should do it. Doing Roth 401k is not tax free.

[A]

Well because look, if you're in a high tax bracket. God, I've seen I just self regulate myself. I need more time on that.

[B]

It costs you money to put money in the Roth salary deferral. If you have options to do pre tax, every dollar you put in saves you 30 cents in taxes. BackDoor Roth is not. You can do pre tax contributions and still do backdoor Roth.

[A]

Steve Harvey is making fun of me right now because I couldn't get that one right.

[C]

See I did stress you out there. Sorry Brian. Next is from anche11. What's Brian's favorite movie?

[A]

I mean the classic answer is like a Shawshank Redemption is like one. But then there's also like we were talking yesterday. It came up in A Princess Bride. Dude is a good one. I mean so it depends on what your flavor of what you consider awesome. Thank you for smoking. I mean that was a good one. Do you remember that one for a few years ago. There's. I could come. I could give you a list of five. I know Bo's gonna say probably Dark Knight.

[B]

I'd like to say. No, I'd like to say Star wars is Brian's favorite movie.

[A]

Well, I mean, that's.

[C]

Which one, Bo, come on.

[A]

What's yours?

[B]

The Star Wars.

[A]

Yours is not Star Wars. Christopher Nolan, Dark Knight for your.

[B]

The Dark Knight trilogy was fantastic. That was a good one.

[C]

Manny G asks how to determine when enough money is enough money.

[A]

I mean, it's a personal. I will tell you. This is. Gosh, look at you. This. You have to know.

[C]

He wants to say the words.

[B]

He wants to say the words. When you know who you are, what you value, and what brings you purpose and your money allows you to brain work so good.

[A]

That's the abundance definition right there on the levels of wealth. You're so smart.

[C]

All right, two more. What's Yalls general quote unquote rule for sudden extra money, like an inheritance bonus or a raise. Spend versus saving versus investing.

[A]

Spend a portion of it. If you have something that you felt like you've been deferring in life. We love you. Saving. Pay attention to how much you need to save. We have resources for you. And then no, if. Well, I was gonna say the Goldilocks rule, but I'm going to. This is. I'm not good at this.

[B]

Give, save, spend. And I think you should do all three of them when you have inflows of money where you are in your journey depends on how much you put in each.

[C]

Last but not least, Febreze me up asks, who's your favorite Star wars character?

[A]

Oh, that's. That's Boba Fett. I mean, I hate what they did with the show because if you went to my office and saw how I still have my original characters from the 1970s, the actual action figures, and I used to sleep with that little figurine. I mean, I remember I lost him out in the backyard for like two weeks, and it was like, I was devastated. And then when I found it, it was like a reunited. It was an incredible thing. So that's an easy one. I hate what Disney. I love Disney. But y' all know I hate what they did to that character through the series.

[B]

Lou Skywalker.

[C]

Great pick.

[A]

I'm not good at this.

[C]

That was so fun.

[A]

That's so mean. You realize I felt like we were all over back on the church softball field, and Bo is playing pitcher. He's playing shortstop. You know, he's calling which side of the field he's gonna hit the ball. And then they throw me out in right field. And then when the tournament comes, they say, brian, we brought some ringers in. We're not even gonna let you play anymore. So I felt like I was just a fish out of water.

[C]

The best part about the live streams is you being you and telling us all your stories and taking all the time. So that was just because you know too much.

[B]

It really is because you know too much. Like, you hear too much, you have too much experience. You can't unwind the thing.

[A]

I think we literally. If the content team, if my editors had chance to put it, you could see where my brain broke on some of those questions. You could actually see where the blue screen came up mid doors.

[C]

I did feel I was like, oh no, I've broken him now.

[A]

The blue screen came up. You're like, oh, heck, we're gonna have to control alt delete this thing.

[C]

Okay, well, okay. Financial mutants watching and listening. Let us know what you thought. I'm thinking 20 seconds might have been too short, but one minute, I do think 30.

[A]

I think we could do 20 seconds. Felt pressure, but I think I could do 30 seconds in the future.

[C]

Yeah. So we're fine. Let us know if you like doing this kind of thing to change.

[A]

We could do. But this might be like, you know, we've all had. Since I've already self proclaimed that maybe in my younger years I drank too much. I used to have friends that I would drink one beer to their three beers. So there was people even moving at faster speeds than me back in those days. So Beau could be the same way. We could restrict beau to 10 seconds or 20 seconds and me 40 seconds. Because know thyself and know what we're good at.

[B]

It's like handicapping, right?

[A]

Yeah, exactly. Like a golf stroke. That's probably. That's a healthier thing than drinking golf handicap. Oh, no.

[C]

That was fun. Okay, so now in. Do we need to have our maybe it does depend segment. Is there anything else you need to say to wrap that up that you feel like either responses to the game or responses to the question?

[B]

No, this is one I do want Brian to speak on because I get this all the time. It's amazing. I'll have a con a conversation with a potential client, someone who's reaching out, thinking about working with us, and I'll tell them, hey, what's going on? What are your issues? And I'm like, hey, tell me about your. Tell me your story. Tell me about all the stuff you got going on and I'll be amazed. I'll be like, hey, I make a super big income and I got my 401k and I got my after tax account and you know, that's pretty much it. Or maybe I have like an old rollover or something like, oh, you're what? You're not doing backdoor Roth IRAs or oh no, I don't. And I'm like, like why? Why not? And I think it's because people fall into that trap of well, do I really need to? Because that was the question. Why would I just do. If I'm going to do Roth, why would I just do Roth 401k? I think it does matter. Explain why doing a backdoor Roth versus opting to do a Roth salary deferral are not the same thing.

[A]

You'll see. And it's also, I mean, one of the things I was also, because I love mega backdoor Roth, but I don't do mega backdoor Roth because it doesn't fit for my situation. And what I mean by that is, is that if you're in a really high income tax bracket, you know, high marginal rate, say, you know, because the federal rate is 37%. But then it's truly more than that because you also lose some other things in the background. So it's just like when I do my taxes, I don't, it doesn't say I'm paying 37%. The effective rate is actually closer to 40%. And then because of all the surcharges and those type of things. And then if you live in a state that has an income tax, I mean we can get over 50% real quick. And so you understand very quickly that man taking a deduction right now is valuable. If I can save 50 cents on the dollar, essentially the government is funding half of your contribution. And then the thought that is down the road when you retire, especially if you retire before 75 years of age, you might have an opportunity where your income goes way lower, much lower tax bracket. Now we can control the taxation and do a Roth conversion at that point. That's why you're going to want to do traditional 401k contributions. But you still would probably want to do backdoor if you could structure your accounts in the ideal way. You then want to consider doing backdoor Roth contributions, meaning doing traditional IRA contributions. Then convert them if you have the right account structures. There's a lot that we're leaving unsaid there. And then the reason I Don't do like for myself a mega backdoor Roth convert because we could easily add after tax is it's back to the same thing. I'm in such a high tax bracket and I have the ability to structure the way my. A lot of self employed people can do cash balance plans and other things to where let's get that money out of the 40% tax bracket. But if you work for if you're an executive at a. Because we've seen it a lot of the car manufacturers that we've done 401k consulting for they have really good 401ks. They're in good tax situations to where a mega backdoor Roth makes a lot of sense for them because of the way their compensation it's not so high and they don't have any ability to control cash balance and all these other things. But yeah, they ought to get in there and get those huge Roth conversion opportunities.

[B]

Love that good stuff.

[C]

Good follow up. Glad we included.

[A]

No, I'm a good financial planner. I just. My brain works at a different speed. I mean it's just. I can't.

[C]

You're good.

[A]

I don't know. It ties into my slow storytelling draw. You know you just, you know you can't make this stuff. You can't bake a cake in five minutes. You just can't do it. No matter how much you want that chocolate cake, it's going to take a while for it to heat up in the oven and rise and do all the things it does.

[C]

True words.

[B]

I love it.

[C]

Someone in the chat was like I should have said country wise.

[A]

I should have said biscuits.

[B]

Biscuits.

[C]

There you go. Biscuits. Very on brand. All right. Want to do another just normal ask money guy question?

[B]

It's going to be hard to talk for more than 20 seconds but can.

[A]

We talk about the caper that I pulled off last week?

[C]

The caper.

[B]

Okay.

[C]

Sure, why not?

[A]

Y' all know Nashville was a hot mess. Cold.

[B]

No, it was a freezing day.

[A]

It was a freezer, literally zero degrees. I took my daughter to school.

[B]

This could not be a worse.

[A]

The public school system was still closed yesterday. So I went up the main road to take my daughter to school and I had no trouble. Today the public school system's back in so I will try to go my back roads to avoid all the traffic of the school traffic and halfway to work roads are still closed. There are trees literally everywhere. If you live in now Bo, somehow he lives in a part of the county that all their utilities are buried under the ground and they had no trouble whatsoever. But in my neck of the woods, I mean, it was catastrophic. I mean, my neighborhood was without power for three days. And the caper I pulled off is that I saw the storm. And this is, by the way, this is part of my, my heritage. I've done this before because I remember we. When we lived in Atlanta. Is that 2014?

[B]

I can't remember, but it was.

[A]

You know, it's the one when Saturday Night Live was making fun of us for. Because it said we just go to the safest place and go on Interstate 75. Because this whole city just was a hot mess in Atlanta for that because it's just in the South. We're just not wired for ice and snow and all the other stuff. I know y', all, everybody. I was about to make fun of my Yankee friends, but I won't say what they tell me. But back then in Atlanta, my wife woke me up at five in the morning and said, I got a crazy idea. This snowstorm is going to probably take out school for the week. Why don't we load up the kids and the pets and let's go down to Florida, go to Orlando. And we had such a great time doing it back in 2014, 2015, that this year, when that storm proposal came through, I said, why don't we fly, do it again? Because we've already got a history that we, we totally felt like we were getting away with something when we were down in Florida while everybody was struggling. Even called my college daughter and said, hey, you can't come home and wash laundry this weekend because we're, we're shutting off the water to the house. And she says, well, can I go? And we're like, yeah, come on, we'll redo. And I think it's because she had such warm memories of us doing this in 2014, because we really did feel like we were getting away. And once again, we got down to Florida. And I'm not saying this to rub it, because, I mean, our neighbors were making fun of us. All of our neighbors in Tennessee were like, you guys are nuts. But on day two or three, when the power was still struggling, they're like, can we come? And we did bring. We had some neighbors come stay with us down, down in Florida, too. But it was, it was. I felt like we got away with something. And the memory making with family members. My kids will never forget what we got to do last week.

[B]

Well, we're happy that worked. Well, we missed you here, though.

[A]

Well, I feel bad for Andy because I was planning I couldn't. Kudos. And he's a trooper because all through. I told Ruby when. Because everything went bad here in Nashville pretty quick. And I called Ruby because I don't trust Bo's opinion because I knew he was gonna tell me he was gonna be here no matter because he's got a monster truck. You know, Bo's got this macho truck that can go anywhere. And I think he gets excited when the weather turns a certain way because he feels like he can. You don't have to lock the hubs anymore, but he likes getting out there and getting with it. He even told me he got brand new tires. He's really excited to see what these things could do. So I trusted Ribi and I called her and I was like, look, this is the situation. I was like, surely Andy's not coming in town still? Because, you know, we've had all kind of crazy. She's like, no, Andy's getting on a plane. And I was like, God bless him. But I was like, I don't think that with school being out for the rest of the week and us still not even having power at the house, you know, I'm not. I'm not coming back with no power because I. I love Andy, but I like electricity more. Seriously. I mean, because you can't. You can't do anything without electricity.

[B]

I like Andy, but I love electricity.

[A]

No, it was a hot mess in my neighborhood. Oh, yeah. I mean, I didn't hear you guys offering to let me and my crew come stay at Yalls house.

[B]

You're welcome at the Hanson household anytime.

[C]

I didn't think you wanted to. You were.

[A]

Anytime I was. I was in a good place down there with the mouse.

[B]

I still owe you one. Honestly, I owe you a few. Few months rent free state.

[A]

I didn't want to. Truthfully. Bo had his own. You had your own issues. Leaking and all kind of other stuff.

[B]

It was.

[A]

It's.

[B]

It was rough. It was really, really. Water and cold temperatures is not great fun times.

[A]

Okay. I didn't mean to take. But it's just that it feels crazy. A moment in time. So much crazy stuff happened last week in Nashville. Not to share it with the audience because I didn't even really. We hadn't even talked about all that stuff with you guys either.

[C]

Right. Well, there you go. Now you know where Brian was last week.

[A]

Did John. Did we not put any pictures on social media? I guess not.

[C]

I guess. No, we did. We actually put it in our email list already.

[B]

Yeah, we did.

[A]

My wife actually Said, don't post those pictures.

[B]

Why?

[A]

She's like, that's gonna seem mean with everybody struggling through stuff. And look, my neighbors were struggling, but it's one of those things. Us, our little bit of happiness was not meant to be negative. It was just our caper.

[B]

You're just on a caper.

[A]

Probably do it again next year. No, next ice storm comes through in 15 years, we'll be probably on a plane headed to Florida.

[C]

Noted. We'll plan ahead. All right. Do you want to do one more question or maybe a couple? We'll see. Yeah, we've got one from.

[A]

Is Andy from Detroit? Where do we decide Andy was from? He's from Michigan.

[C]

Michigan, yeah. You know, I'm forgetting.

[A]

So they're wired differently. He's just like, oh, snystorm, man.

[B]

No big deal.

[A]

Mm.

[B]

It's a big deal down here.

[C]

Okay.

[A]

I mess up your transition, I'm.

[C]

Gonna butcher this username, but we're gonna go for it. Edu Brissenor. Edu Brissenor asks. Hi, you all. Thanks for what you do. I'm 28, married with one kid. Our mortgage is a 30 year at 6.625%. Does it count as high interest debt or is it further down the foo. No debt except the mortgage.

[B]

Thank you, E Dub. This is a pretty. It's a pretty easy question in my mind because oftentimes with mortgages, I think the mortgages are going to count as low interest debt. I think they're going to fall into step nine. I don't think they're going to be step three, high interest. And even 6.625% isn't even high relative to some new homeowners over the last two or three years. A lot of folks still have mortgage rates at like seven, seven and a half percent for a 28 year old. that rate, I do not consider that to be high interest.

[A]

No, I agree. Mortgages are kind of a unique thing in the fact because you have the option to refinance and you even have the option. Now, we're not quite there yet with 6.6, but once we get below 1%, you can start refinancing with no cost, meaning that the lender, you take a little bit of a premium on the rate. And once you get in a falling interest rate environment, which some indicators are that we might be headed that way, you don't refinance once, you might be able to refinance two or three times. That way, if you feel like you missed it, you can do it again. As long as the rates are still going down with this exception though, I need everybody to understand it's a math thing is that just because you refinance to take advantage of a lower interest rate, do not reset the term of your loan. Meaning that you don't go from a 30 year mortgage that you've been paying for four years refinance into another 30 year and then pay the terms like it's 30 years. No, you need to pay this at least like it's a 26 year mortgage or 25 or even a 20 year. Whatever you is fits into your financial situation. The resetting of the amortization is the biggest mistake people make and sometimes they even make sense to pay the closing costs. You have to do the math. We have a and we probably have some resources on the website to where you can figure out the break even analysis of whether you should take a premium on the rate or if you should just pay the closing costs on the refinance. I think that over the coming year to 18 months this is going to be a hot, hot issue that we're going to keep you front and center on is when should you take advantage of, of refinancing your mortgage.

[B]

Yeah, we have, we do have a deliverable a tool out there for you to go to moneyguy.com resource or if you just go to moneyguy.com and you can search in our search bar refinance, you'll find a lot of our content that we've released on that because you want to make sure you make that decision. Well, we should do a calculator for refinancing.

[C]

You think so?

[A]

That's another one. Yeah, I think that would be a powerful calculator freebie's like you guys love coming up with the ideas. I'm actually the rubber meets meeting the road moment.

[C]

That's what I'm here for. That's what I'm here for. All right, let's go to another question from Assorin. It says I'm starting a job at a large private tech company. A good percentage of my pay is in these private RSUs with yearly tenders. How would should I hedge against this income risk that comes.

[B]

Save like a banshee outside of the private shares. Right. So when you think about your comp package, right. I imagine you get some sort of salary. Right. So I'm just going to use round numbers because it's easy for me to think let's say you get $100,000 salary but let's say that another big chunk of Your comp comes in these private shares. Let's say it's another $100,000. You have $100,000. So on paper, on your tax return, you look like $200,000 a year income earner or most likely it's going to vest over a couple of years. And so it's not going to be the full. But you get the idea. Realistically, when it comes to budgeting and it comes to saving, it comes to you thinking about how you structure your financial life. I don't want you to behave and act like someone who makes $200,000 a year. I want you to behave and act like someone who makes $100,000 a year. Assuming those private shares are not liquid and there's nothing you can do with them, even though you might be saving them and they might be going towards your future with private companies, we never know exactly how that story is going to end. So what I want you to be careful of is having all of your wealth tied up and all of your wealth built up in this private enterprise where also your human capital is. Because if things go bad, you could lose your job, you could lose the value of your portfolio and be in a really, really rough spot. So what I want to see you doing is following the financial order of operations, building your assets and your accounts outside of the private shares. And then if you hit a liquidation event or if the company goes ipo, well, that's all going to be gravy and that's then going to become part of your financial life that's actually tangible that you can use.

[A]

Yeah, I mean, the big, biggest takeaway, because I'm thinking of all of our clients that we've dealt with. You know, RSUs are grants. So you made the decision to probably take less pay so that you could, because you were building in that these RSUs were going to hopefully have some value for you. But we've had clients that had stock option choices too, where they could defer up to a very high percentage. And some of these really paid off. The big takeaway I always share with people is don't have all of your human capital tied into the exact same place where you're trying to build investment capital. But concentration can create huge, huge wealth over term. So it's a balancing act. And that's why I would at least make sure that you had 15%. I'd prefer 25. But you might have taken a lower pay structure because of the RSUs, but that's why I have to give you a bottom threshold there, a minimum of at least 15% that you're saving and investing outside of the company. And then if they, you know, but then try to get that to as 25% as fast as possible because you, you know, I don't know if you have the win win or the best of both worlds is where their company hits you. You turn into a huge windfall wealth opportunity with the RSUs. But then also you're protected over here with your other savings that you get both. Now if it goes bad and sideways, at least if you're doing the 15 to 25% outside of your employer when it goes bad, if it went bad, you wouldn't be just left holding the bag and feel like you lost everything.

[B]

That's right.

[C]

That's great.

[A]

It's a balancing act. It really is. And we've helped clients with those type of situations because we try to take into account the math of the moment because some of these employers really give you incredible opportunities with how you structure these things. So we try to maximize that but also not just put ourselves out there completely naked.

[C]

Assor thanks for the question. We're glad that you're here asking it and helping you think through your personal financial situation because personal finance is personal and that's why we love answering your questions live every Tuesday at 10am Central and we will be back next Tuesday. But until then be sure to go to moneyguy.com resources take advantage of all of our free stuff, our calculators, our downloads plus our articles, episode archives and ultimate guides that will deep dive on a lot of the topics that we touched on today. So be sure to check out moneyguy.com we tried to make it really searchable and useful just for you so you can continue these conversations in your own life.

[A]

Guys, glad to be back in the saddle here. We have a blast doing this live content. Thank you for being a part of it. We don't take it for granted. We just had a big planning session off off site planning session yesterday. Can't wait to share some of the great stuff. You have no idea how excited I am to share some of the things that we've come up with for 2026. You guys make it all possible. I'm your host Brian, joined by Mr. Bo, joined by Ribi and the rest of the content crew that you can't even see that's sitting all around here and we have a blast making this type of content.

[B]

Moneyguy out the Money Guy show is hosted by Brian Preston and Bo Hanson. Brian and Beau are partners with Abound Wealth Management Abound Wealth Management is a registered investment advisory 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.