This video from The Money Guy Show talks about the power of compound interest, which Albert Einstein called the 'eighth wonder of the world.' The hosts explain that compound interest helps your money grow exponentially, not just in a straight line, and can make up a huge part of your retirement savings. They use examples of how much money you can save by investing small amounts each month starting young. The video also answers viewer questions about paying off car debt, choosing your first investment accounts like Roth IRAs, and how pensions can affect your investment strategy.
Key Takeaways
1
Compound interest is described as the 'eighth wonder of the world' and is key to building wealth over time.
2
Unlike linear growth, compound interest works exponentially, meaning your money grows much faster by building on itself.
3
A 20-year-old investing a dollar can see it multiply by 88 times by age 65, assuming a 10% annual return compounded monthly.
4
Saving just $100 a month from age 20 to 65 can result in over a million dollars by retirement.
5
The Money Guy Show offers a free 'wealth multiplier' resource and a 'wealth multiplier hub' on their website to help people understand and utilize compound interest.
6
When deciding between paying off a car loan and saving for a house, consider the 'Financial Order of Operations' and prioritize getting the car loan to a manageable level (like a 36-month payoff period).
7
For beginner investors, start with the 'Financial Order of Operations' and consider opening a Roth IRA, which allows for tax-free growth and withdrawals in retirement.
8
Indexed Target Retirement Funds or broad market index funds (like S&P 500) are recommended for young investors due to their long time horizon.
9
A federal pension can allow for a more aggressive investment portfolio, but it's important to understand how it covers your future living expenses.
10
To motivate a spouse to save, focus on communication by discussing shared retirement goals and defining the lifestyle you want in the future.
11
Saving for a home down payment should generally be done in cash or cash equivalents, rather than pulling money out of a Roth IRA, to avoid stunting the long-term growth of your retirement assets.
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0:04
foreign
0:43
you want to be rich today we share the
0:46
secret Brian I am so excited about this
0:48
one because this is like bread and
0:51
butter for us this is something that if
0:53
you ask me what's the one thing that I
0:55
get excited to tell young people about
0:57
to teach people about investing it is
1:00
this very thing because it can light a
1:03
fire under the right person when they
1:05
hear it the right way I I want you to
1:07
lean in seriously if you are
1:08
aspirational if you want to have more
1:11
and make the most out of your money this
1:14
is what you need to know you need to
1:15
know about the eighth most powerful
1:18
thing the eighth wonder of the world
1:19
that's what Albert Einstein called it
1:22
compounding interest we're going to tell
1:24
you how to build your wealth off of all
1:27
the power and harness it completely so
1:29
you can maximize your money now this is
1:31
what makes compound interest so
1:32
wonderful you know we talk about all the
1:34
time how it can be a devastating Force
1:36
to your finances when you think about
1:38
credit cards and high interest debt it
1:40
can absolutely be Napalm for your
1:43
finances however when you let
1:45
compounding interest start working for
1:47
you when you let it be the wind at your
1:50
back on your wealth building Journey it
1:52
is amazing what can happen when it comes
1:55
to your financial picture yeah we wanted
1:57
to jump in because this is the thing
1:59
that um we've by the way
2:01
stay tuned because we have a brand new
2:04
deliverable we're gonna unveil on
2:06
today's show as well as a hub so that
2:09
you can get all of your questions
2:10
answered this will load you up
2:12
completely but here's what I get so
2:14
excited about is that this was the the
2:17
concept that changed my life I had an
2:20
economics High School teacher the morrow
2:22
moment if you will where Mr Mara Hood
2:24
shared guys if every one of you high
2:26
school students would save 100 a month
2:28
you could be a millionaire so with that
2:30
one statement he turned something that
2:33
seemed very Elusive and not possible to
2:35
where it sat right in front of me with a
2:38
very simple path and the question you
2:40
might be asked is okay well why does it
2:42
seem elusive why does something like
2:44
that sound so impossible and it's
2:46
because of the way our minds work when
2:47
we we think about our brains and we
2:50
think about the way that we think money
2:52
grows we sort of think in this linear
2:53
fashion okay if I'm at Point a today
2:56
well if I do this then I'll get to point
2:57
B and then I'll get to Point C and I'll
3:00
just kind of step in a linear fashion
3:02
forward however when it comes to
3:04
investing when it comes to Growing our
3:06
money that is not the case yeah
3:08
compounding works completely different
3:10
than a linear fashion instead of one two
3:12
three four five now you're talking about
3:14
two four sixteen and then you keep
3:18
stacking everything it's you know it's
3:21
it's exponential that's exactly right in
3:23
a lot of great ways if you look we
3:24
actually showed an example of what this
3:27
looks like if you compare and contrast
3:29
the two differences we have how our
3:31
mindset thinks and then we have the
3:32
reality so that's why if you can
3:34
actually let your money do the heavy
3:35
lifting you do the saving and the
3:37
discipline but if you do the work of
3:39
letting your money work for you it can
3:41
actually be up to 95 of your total
3:44
account value when you retire 30 or 40
3:46
years in the future and look we love
3:47
love it so much it's the reason why you
3:50
see us carrying these Koozies around it
3:51
says this one dollar beer cost me 88
3:54
because we know that a 20 year old has a
3:57
wealth multiplier of 88.35 that means
4:00
that every dollar that a 20 year old
4:02
invests if we assume a 10 rate of return
4:06
compounded on a monthly basis can turn
4:08
into 88 by the time they get to 65 it is
4:12
amazing how powerful your dollars can be
4:14
if you give them enough time to grow
4:17
yeah by the way when we say compounding
4:19
monthly this is one of those things
4:20
because people you pay attention to the
4:22
details your financial mutants we're not
4:24
talking about 10 a month that would put
4:26
you up there with all the billionaires
4:28
on the planet but here's what we do mean
4:30
you're gonna make ten percent annually
4:33
but it is compounding on a monthly basis
4:35
meaning there's 12 months in a year get
4:37
your financial calculators calibrated or
4:39
stick around and we'll tell you about
4:40
the money multiplier the wealth
4:42
multiplier Hub okay so think about this
4:44
right we talk about one dollar can turn
4:46
into 88 dollars for a a 20 year old but
4:48
that's not the way that we often think
4:51
about Building Wealth that's not the way
4:53
that we think about growing our money
4:55
through time let's talk about like a
4:57
practical example how can we illustrate
4:59
what this looks like in real life what
5:02
this looks like in practice so think
5:03
about this if you were to start at 20
5:06
and your goal is hey I'm starting at 20
5:08
I'm going to save every month until I
5:10
get to retirement until I get to age 65
5:12
and let's just assume that on average I
5:15
can make 10 a year how much will
5:17
different savings rates allow me to end
5:19
with well let's not just talk about 1.88
5:22
if you start saving 20 bucks a month now
5:24
Brian when you are crew chief you are
5:26
the leader you are the guy at Hardee's
5:28
in high school you could probably do 20
5:30
a month oh for sure you could have done
5:32
that so 20 a month saved every month
5:34
from age 2065 can turn into almost two
5:38
hundred and ten thousand dollars by the
5:40
time that you get to age 65. yeah the
5:42
fifty dollars a month could get you up
5:44
to a little over half a million dollars
5:46
hundred dollars a month there's my
5:48
Morrow moment you've talked about being
5:50
a crew leader for at Hardee's that's a
5:53
million and forty eight thousand dollars
5:55
so Mr Morrow actually under shot if we
5:57
started it I think I was 16 17 years old
5:59
at the time I'd have been worth a lot
6:01
more than a million bucks and look at
6:03
this if you save 200 a month as a 20
6:05
year old you'd have close to 2.1 million
6:08
dollars I want I think that's just so
6:11
worth reinforcing that even as a 20 year
6:14
old somebody at the very beginning of
6:15
your care maybe you're not even done
6:17
with school yet maybe you're just
6:18
working part-time I know that when I was
6:20
a waiter at Chili's Brian I could have
6:22
saved 200 bucks a month and just by
6:25
implementing that very simple Behavior
6:27
early on I would have been setting
6:29
myself up to be a multi-millionaire in
6:32
retirement it does not take a lot it
6:35
just takes a little bit of discipline
6:36
and a little bit of money and a lot of
6:39
time and you can build wealth so but a
6:41
lot of you watching this you're not 20
6:43
years old you're like you know what is
6:45
this what does this mean for a 27 year
6:46
old was this mean for 34 year old guys
6:49
don't worry we got you covered I want
6:50
you to go to moneyguy.com resources we
6:53
have a brand new deliverable that's
6:55
right yes we've already always in the
6:57
past had a wealth multiplier and you've
7:00
heard us talk about it numerous times
7:01
but then we also had the wealth
7:03
multiplier for young Savers you know
7:05
like let's modernize it so let's
7:06
actually bring these two resources
7:08
together so that way young old it
7:11
doesn't matter we have a resource for
7:13
everybody at moneyguy.com resources I've
7:16
actually hot off the laminator press
7:20
I mean look at this thing three pages of
7:23
beauty and just Brilliance that we can
7:25
motivate you with on how you can be
7:27
wealthy and load yourself up so go
7:30
download it right now and what I think
7:31
is so wonderful maybe you are the person
7:34
that wants to know what your wealth
7:35
multiplier is or maybe you influence
7:37
young people maybe you have children you
7:39
want to get them excited about saving
7:41
maybe there are college students that
7:43
you want to start on the right track
7:44
this is a great thing to send to them to
7:46
say hey just so you know this is how
7:49
powerful your dollars can be but maybe
7:52
you're out there saying you know okay I
7:53
need to know a little bit more I I
7:56
understand the deliverable but I kind of
7:59
I I kind of trust but verify I need to
8:01
understand what goes behind that we
8:03
actually have a brand new area on our
8:06
website that we're calling the wealth
8:07
multiplier Hub where you can answer all
8:11
questions wealth multiplier so if you go
8:12
to mondayguy.com and type in wealth
8:14
multiplier if you go to Google and type
8:17
in wealth multiplier you can find our
8:19
wealth multiplier hub and it will answer
8:21
some very valuable questions questions
8:23
like okay what's the actual formula like
8:25
if I want to calculate the 88 how do I
8:28
go about doing that or or you said 10
8:31
that's 10 percent seems crazy why would
8:33
I think that I can get 10 but what what
8:36
if I'm 40 am I still getting 10 we talk
8:39
about that on the hover maybe you even
8:41
have the question about inflation what
8:43
does inflation mean for my wealth
8:45
building Journey even that is addressed
8:48
on our wealth mode yeah I think anybody
8:49
who goes out there like I said
8:50
moneyguy.com go in the upper right hand
8:53
corner there's a search bar just type in
8:54
wealth multiplier we'll load you up I
8:56
mean anything and everything you could
8:57
think about this topic will get you
8:59
excited but also get you educated on it
9:01
but I also I want to give you another
9:03
little thing that I think you a little
9:05
Easter egg for money Guy family
9:08
Daniel created a baby Buffett I love it
9:11
if you go out there right I know it's
9:12
sitting out there on Instagram too and
9:14
if you gotta know how much entertainment
9:15
this brought to the entire firm here is
9:19
you'll see Daniel's art rendition that
9:22
he had created just to show you that one
9:24
dollar invested for baby Buffett could
9:27
be worth 647 dollars at age 65. that's
9:30
pretty powerful stuff absolutely amazing
9:32
we love it so if you've not checked out
9:34
the wealth multiplier Hub go check that
9:36
out go to moneyguy.com slash resources
9:40
and download the new deliverable because
9:42
we love getting you excited about your
9:46
personal finances we also love answering
9:48
your questions we love leaning into the
9:50
things that you guys care about so right
9:53
now we've got the team out in the wings
9:55
collecting questions because we want to
9:57
speak to the things that you care about
9:59
so with that creative director Ruby I'm
10:02
gonna throw it over to you awesome I've
10:04
got some questions cued up here so I'm
10:07
excited to get started we're going to
10:08
start it off with Whitney Evans question
10:11
did you say Whitney wooden Evans Whitten
10:14
Evan that was very is it two names with
10:16
and Evan that's kind of what I thought
10:18
wit and but it's not it's you know kind
10:20
of typed in uh
10:22
yeah it was like okay let's just go wit
10:26
and Evan okay keep going I'm sorry good
10:28
ready for their questions excellent
10:31
so fresh and so clean
10:33
the question is I have a car payment of
10:36
thirty thousand dollars over 60 months
10:39
for four point eight five percent I did
10:42
this before watching y'all they say I
10:45
can pay the car off within the next year
10:48
should I pay off the car or save for a
10:51
down payment on a house so I think this
10:55
is the age-old question of what should I
10:57
do when my car is very clearly not in
10:59
the 23 8 rule yeah and then how should I
11:02
prioritize these savings and paying off
11:04
and all of that yeah so a lot of people
11:06
have this brand they'll come to us say
11:07
hey I found you know I was doing some
11:09
internet research I've stumbled across
11:11
23A and then I realized oh man the car
11:13
that I bought did not align with those
11:16
rules I did not put 20 down or I
11:20
financed it for more than three years or
11:22
when I look at the payment it's greater
11:23
than eight percent of my monthly gross
11:25
income what are my options how do I rein
11:28
that in but wouldn't even have a
11:30
question like you know I've got this
11:31
thirty thousand dollar loan 60 months
11:33
4.85
11:35
what do I do to write the ship but even
11:38
above and beyond that I kind of want to
11:40
save for a house how do I balance the
11:43
different types of debt loads that I may
11:45
be carrying I'd be curious to know your
11:47
thoughts did wouldn't even give their um
11:49
their ages
11:50
they did not no ages okay so you know
11:53
because the the first thing let's triage
11:55
this thing because that's that's
11:56
actually the situation you've realized
11:58
you've already got the car in the garage
12:00
you're in this financial situation so we
12:02
kind of really do have to triage and
12:04
look at your situation I have to give
12:06
the disclaimer we don't know all your
12:08
assumptions as I just clarified when we
12:10
don't know your age other things so this
12:12
is more of just a general discussion on
12:13
this but here's what I do know I would
12:16
first run your car purchase through 23.8
12:20
just to know kind of know where you are
12:22
how do we get you out of this and
12:24
Salvage the situation without even
12:26
knowing where you are in the process so
12:27
we even have a calculator on the website
12:29
where you can do that go to
12:31
moneyguide.com check out our 23 8 Hub
12:33
and you can use the calculator to figure
12:35
out where your payment should now
12:36
obviously you know down payment's not
12:38
going to be you we're past that that
12:40
bridge you already know you've told us
12:42
you got 60 months on the financing we
12:44
don't like you going longer than 36. so
12:47
I and then the other part that we don't
12:48
know is what is this as a percent of of
12:51
your gross income that's coming in so
12:53
the first thing you're going to want to
12:54
do is let's go say hey what does it take
12:57
to pay this car off in 36 months not
13:02
what they financed it at 60 months
13:04
because there's a big difference between
13:04
three years versus five but let's
13:06
actually bring it into correct course
13:08
mode at three years now what does that
13:11
do when you compare that to your gross
13:13
income if it is way beyond your eight
13:16
percent then we have a problem we have a
13:19
big problem so now we have to course
13:21
correct and um I would then kind of move
13:24
to the secondary thing and I'm going to
13:26
pull it out because you know where how
13:27
much I love this thing you gotta always
13:29
respect the food if you go to
13:31
moneyguy.com resources you can get your
13:33
own copy too we have the financial order
13:35
of operations because 4.85 percent
13:38
doesn't freak me out for people under 40
13:42
years of age 27. yeah so 27 years so
13:45
definitely 4.85 is not the worst rate in
13:48
the world especially where interest
13:49
rates are right now but but if you look
13:51
at this and you're Way Beyond eight
13:53
percent you know and you're not saving
13:56
you don't have emergency reserves you
13:57
don't have Roth hsas you have you're not
14:00
doing anything with your retirement
14:02
accounts we this car is essentially a
14:05
leaded weight that's bringing you down
14:08
and your financial success is not
14:10
catching traction and this is where I
14:12
think you just rip the Band-Aid off you
14:13
get rid of the car yeah I know nobody
14:15
wants to hear that now look there's
14:17
gonna be a group that you're just such a
14:20
financial meeting because you've got me
14:21
thinking you're like hey I could pay
14:22
this off in the next year that means it
14:24
sounds like you got some money flowing
14:26
through so you have options actually if
14:28
you can course correct because you're
14:30
just living in abundance you're very
14:32
good at what you do for a living you
14:34
have money coming in you could actually
14:36
now pay this loan down to a point that
14:39
the 23 8 works for you or you could
14:42
figure out how you course correct
14:43
because maybe your income's high enough
14:45
that it's less than eight percent you
14:47
still could just recalibrate those
14:48
payments yeah I love what you said even
14:50
though what Nevin said they could pay it
14:52
off within a year if they do know that
14:54
there's this down payment they know that
14:55
their cash can make five percent maybe
14:58
what you can do is recalculate your
15:00
payment pay it off over that 36 months
15:02
and whatever excess you have let that
15:04
start going towards your down payment
15:05
fund so that way it's a Best of Both
15:07
Worlds making sure that you are still
15:09
living inside the confines of the money
15:12
Guy Rules I think that's great advice
15:13
yeah you just got to make sure this is
15:15
not the weight that's taking to the
15:16
bottom of your financial ocean instead
15:19
of letting you buoy up and and kind of
15:21
launch and let the power of compounding
15:23
interest build wealth for you that's
15:25
great
15:26
with Nevin thank you so much for being
15:28
here and submitting a question I hope
15:29
that really helps you out
15:31
next up is a question from great sageman
15:35
it says I am a beginner to investing
15:38
after doing some research I'm thinking
15:40
of opening an account with Fidelity for
15:43
investing but I'm just not sure I know I
15:45
don't want to make the same mistake in
15:47
my early 20s of just not investing
15:49
because I'm not sure so do you guys have
15:51
any advice if you're going to look at
15:52
what your first investment should be
15:55
what should you do
15:56
so it sounds like great I missed the
15:59
last part Great Sage Sage great sageman
16:01
has sort of two questions here Brian uh
16:03
what is the account type that I should
16:06
open that's question number one and the
16:08
number two what should I invest in I
16:11
want to talk a little about the first
16:12
one I think for any beginner whether
16:15
you're a beginner that is 20 years old
16:17
or whether you're a beginner that is 50
16:18
years old a great place to start is the
16:21
financial order of operations Brian will
16:22
you hold up the thing for me the
16:24
financial order of operations is a tried
16:26
and true nine-step process to tell you
16:28
what I should do with my next dollar so
16:31
when you're going through and you think
16:32
okay Steph one deductible's covered
16:34
that's likely just a savings account
16:35
okay step two employer match that's
16:37
going to be your employer sponsor 401K
16:39
403 b simple IRA got it all right step
16:42
three High interest debt that's not an
16:44
account gonna knock that out step four
16:45
emergency reserves okay I'm gonna have
16:47
that's probably still that high yield
16:49
savings account that I was using for
16:51
step one okay ah boom now step five now
16:55
Stephen now we're getting into account
16:57
types that you may want to consider
16:59
opening up and there are two that we
17:01
love specifically because they exist in
17:04
the tax-free side of the equation they
17:07
are health savings accounts and they are
17:09
Roth IRAs well you can only open a
17:11
health savings account if you are
17:13
participating in a high deductible
17:15
health insurance plan through your
17:18
employer so the first thing you check
17:19
says okay do I have a high deductible
17:21
plan if so can I put money into an HSA
17:24
well then you got to decide okay well
17:26
how am I going to use a health savings
17:28
account if you want to know more about
17:29
that I would encourage you go to
17:30
moneyguide.com type in health savings
17:32
account you'll find all thing HSA so
17:34
let's assume that you don't have that
17:36
going on I think that one of the very
17:38
best accounts one of the most wonderful
17:40
things for young folks or beginning
17:42
folks to start out with is a Roth IRA
17:45
because what Roth IRAs do is they allow
17:48
you to build tax free dollars that's
17:51
right you can grow a million dollars in
17:53
a Roth IRA and when you get to
17:55
retirement you are literally a tax free
17:58
millionaire tax-free millionaires
18:02
you know he's not talking about tax-free
18:05
but it's still super powerful that's
18:08
right if you think about tax-free
18:11
millionaire status there's a reason the
18:13
government Beau restricts these accounts
18:16
that's right that's why they do not let
18:18
if you make over too much money they say
18:20
not for you we don't want you to be a
18:22
tax-free millionaire so they also say
18:24
hey if you got money coming in well you
18:26
can't put more than 6 500 into this
18:29
account we're going to limit that guys
18:31
if the government's restricting this
18:33
thing has to be so good that you need to
18:35
get your money in there and let it
18:36
growing so you can actually let
18:38
compounding interest build that tax-free
18:40
millionaire status all right Brian so
18:41
I'll talk to a little bit about the
18:42
accounts that you should open why don't
18:44
you talk a little bit because I think
18:45
great was also asking all right what do
18:47
I invest it now where okay I got the
18:49
account now I don't want to make the
18:50
same mistake I made in my 20s when I was
18:52
not investing how do I figure out how to
18:54
start yeah this is and by the way great
18:57
sagement you're in your 20s do you
19:00
realize the biggest component to
19:02
Building Wealth is time and you if
19:05
you're starting in your 20s there are so
19:07
many paths to success that it's almost
19:09
impossible to screw this up if you just
19:11
start the process by just making it
19:14
happen today and I love you already
19:15
looking at one of the biggest low-cost
19:17
providers because we always talk about
19:18
like Fidelity Investments Vanguard
19:21
Charles Schwab those are the low-cost
19:23
providers out there now you are getting
19:25
to the question we told you about count
19:26
structure decisions with the financial
19:28
order of operations but once you're
19:30
actually with the provider like a
19:32
Fidelity that you've already
19:32
pre-selected you can start thinking
19:35
about some some unique opportunities now
19:37
look if you want to make this foolproof
19:39
you can't get behaviorally in a bad
19:42
place just think about how much can I
19:44
save and when when do I need this money
19:47
to be available for me and then you can
19:48
do what's called an indexed Target
19:50
retirement fund for somebody in their
19:52
20s I mean this thing likely you're
19:54
going to choose something like 35 40
19:56
years out in the future so that's going
19:58
to be like a 2065 fund so it's going to
20:01
be super aggressive and then but while
20:03
you're aggressive while you're young
20:04
it's going to load you up with all those
20:06
growth assets but then as you get closer
20:08
and closer to retirement it's going to
20:10
keep gliding down into a more
20:12
conservative path that's easy but I'm
20:14
also not going to get mad because a Roth
20:16
IRA account if you go where Beau was
20:18
talking that's type of account you're
20:20
not going to touch that for 20 30 40
20:22
years in the future anyway when you
20:24
retire with such a timeline I'm not ever
20:27
going to fight somebody if they tell me
20:28
hey I'm going to end up in an index fund
20:31
or a ETF they just buys like the total
20:34
market index the S P 500 those things
20:36
you you just can't go wrong with so many
20:39
opportunities at your age so I'm just
20:41
super excited for you great sageman
20:43
because this is the day that your life
20:46
changes this is when wealth becomes
20:49
almost inevitable if you just start
20:51
saving and investing in your 20s yeah
20:54
and keep the main thing the main thing
20:56
don't get lost in the details focus on
21:00
the things that have the most impact on
21:01
your wealth building Journey right now
21:02
and it is not your rate of return it is
21:05
your savings rate how can I start saving
21:07
today and then how can I try to save a
21:09
little bit more tomorrow if you do that
21:11
you're likely going to set yourself up
21:13
for tons of future success
21:15
awesome great sageman thanks for your
21:17
question thanks for being here we
21:18
appreciate it
21:20
we're going to move on to CJ's question
21:22
next
21:24
it says what are your thoughts on
21:26
considering a future federal pension as
21:29
my bonds slash less risky portion of my
21:32
portfolio allowing for riskier
21:35
allocations elsewhere
21:37
hmm
21:39
so a lot of times Brian would get the
21:41
question hey I've got a pinch and how
21:42
should I think about that in terms of my
21:44
savings rate right like I've either work
21:45
for the federal government or work for a
21:47
company that says hey I'm going to
21:48
provide
21:49
a specific benefit to you when you
21:52
retire well should that affect my
21:54
savings should I save less than 25
21:56
percent how should I factor then that's
21:57
not really what CJ is asking or CJ is
22:00
asking more of a composition question
22:01
when it comes to my asset allocation and
22:04
where I am on the risk Spectrum does
22:08
having access to a pension is having
22:09
access to a guaranteed retirement stream
22:11
at some the retirement income stream at
22:13
some point in the future allow me to be
22:15
more aggressive with my portfolio today
22:17
well the the short answer is yes it
22:20
definitely influences but I think that
22:22
CJ you're asking the wrong question are
22:24
you looking at this I want to I want to
22:25
see if I can adjust the angle of your
22:28
question so that you kind of have a
22:30
better understanding of really what
22:32
you're asking us so you work for the
22:34
federal government you have this pension
22:36
that's going to come in here's how this
22:38
typically plays out when we have a brand
22:40
new Prospect come in and we find out
22:42
they have a pension we then apply that
22:44
pension to what does their retirement
22:46
cash flow projections look like so if we
22:49
we find out let me give you some
22:51
examples so you can kind of visualize
22:52
this and think through it if you're a
22:54
person that is going to spend four
22:57
thousand dollars a month in retirement
22:59
and then you know that the federal
23:02
government your your hard work at the
23:03
federal government has resulted in a
23:05
pension that's going to generate four
23:08
thousand dollars a month to you in
23:10
retirement you can kind of compare those
23:12
things and go wow I'm so so my living
23:15
expenses are going to be covered by the
23:18
by this pension coming in that's pretty
23:21
powerful so if now with that
23:23
understanding that I have my Basics
23:24
covered can when I look at my actual
23:27
investment allocation outside of my
23:30
retirement cash flow man because I've
23:32
got the basics covered I could probably
23:34
have a more aggressive portfolio because
23:37
I can now start thinking about Beyond
23:39
myself I can think Legacy goal planning
23:41
and other things and that would probably
23:43
lead to you having a more aggressive
23:45
portfolio now let's go another way with
23:48
this let let's say that you look at this
23:51
and you say okay I've got a pension
23:52
coming in of two thousand dollars my
23:55
monthly expenses are four thousand
23:57
dollars and I'm just gonna exclude
23:59
Social Security because I would probably
24:00
with these low numbers I would probably
24:02
fix all this but we'd say we need two
24:04
thousand dollars a year from I mean a
24:06
two thousand dollars a month from the
24:07
portfolio we've got to figure out how we
24:09
structure our Investment Portfolio to
24:12
where there's gonna be enough
24:13
conservative stuff that's either
24:15
yielding through like interest income
24:17
because it's high enough right now that
24:18
that's potentially enough or Bond or or
24:21
safe assets that you know that you just
24:23
can sell off enough each month you can
24:26
then structure your asset allocation to
24:28
for for that cash flow in retirement but
24:31
that's really what we do for clients
24:33
that's how we work through things and
24:34
truthfully that's why CJ
24:36
I love giving you enough bread crumbs to
24:39
understand but this does get to the
24:40
point when you get closer to retirement
24:42
you're going to want a stress test
24:44
you're going to want to make sure that
24:45
you have your full Landing plan for your
24:48
financial life figured out and that's
24:49
why we tell people to take the
24:50
relationship to the next level because
24:52
that's the type of stuff we do for for
24:53
clients I love one of the things you
24:55
said Brad is you got to figure out you
24:57
got to think about the end like okay
24:59
what are my retirement living expenses
25:00
because even the pension is an income
25:02
stream not a current asset you're asking
25:04
can I think about it as a current asset
25:06
and Brian said no no you got to think
25:07
about as a future income stream well we
25:09
have a great tool you can check out
25:11
called know your number you're going to
25:12
learn.moneyguide.com it's course you can
25:14
work through that essentially helps you
25:16
to find that Finish Line well if you
25:18
know what if you don't know what your
25:20
number is it's going to be difficult for
25:22
you to understand how much of my number
25:25
will my pension replace well I would
25:27
encourage if you've not done it go check
25:29
out the course learn.moneyguy.com to
25:31
figure out okay what kind of Lifestyle
25:33
do I want to live in retirement I know
25:35
my pension is here now how do I go about
25:38
building that exact portfolio that Brian
25:40
just talked about so that I can hit that
25:42
number at the age that I would like to
25:45
hit that number
25:47
awesome cool I was just we got a lot of
25:50
questions coming in but CJ thank you for
25:52
that question we really appreciate you
25:53
being here and asking for that I do have
25:55
another One queued up from Leandra
25:58
she says I'm 30 and my husband is 38 and
26:02
we only have 16k in retirement
26:04
exclamation point
26:06
how should I go about convincing my
26:08
husband who has a laissez-faire attitude
26:11
about it that retirement should be a
26:13
major priority she said in all caps this
26:16
is a spicy one cause this is like
26:17
Financial Plus relational what do you
26:19
guys think yeah man this this one is
26:21
hard because one of the really hard
26:22
things to do about financial wealth
26:23
building is when spouses are not on the
26:25
same page one one spouse takes saving
26:28
seriously one spouse doesn't take saving
26:30
seriously one spouse takes uh spending
26:33
seriously one spouse does it take
26:35
spending and budgeting seriously and so
26:37
it causes some friction because you have
26:39
to make sure that if you want to have a
26:41
cohesive plan in place you both need to
26:43
have the same goal so here's the first
26:45
thing that I would tell Lee introduce so
26:46
she's 30 and she's 38 they got 16 000
26:49
saved the first thing I tell them to do
26:50
is go download the wealth multiplier all
26:52
right
26:53
you see me over here moving things in
26:56
position is because we are going to be
26:59
your resource you probably can even use
27:00
this video to kind of help you out on
27:02
this is that if you just understand yes
27:04
y'all don't have a ton of money saved up
27:06
yet but that's okay because guess what
27:08
you have in your favor
27:10
you the the the the the the path the die
27:13
has not been cast that you're locked in
27:15
to to not reaching all your financial
27:17
goals for the future because think about
27:19
this for a 30 year old every dollar
27:22
still has the potential to turn into
27:24
twenty three dollars by retirement so
27:26
that's a 20-fold increase now think
27:29
about for your husband you said he's 38
27:31
years old when I look at the money with
27:32
the wealth multiplier and guys I
27:34
encourage you go to moneyguy.com
27:36
resources we have a brand new wealth
27:38
multiplier on the website you can
27:39
download completely for free but you see
27:42
that instead of it being a 23 times
27:44
multiplier now it's a nine time
27:46
multiplier and that's just because the
27:48
older you get you have less time you
27:50
also get make less rate of return
27:52
because you usually have to dial down
27:54
the risk in your portfolio so y'all
27:56
y'all are right at that Crossroad of the
27:58
intersection of trying to figure out the
28:01
incremental decision you can make today
28:02
that's going to have a tremendous
28:04
benefit for the long term and that's
28:07
where I get excited for you guys because
28:08
you're still young enough you can course
28:10
correct go use the free resource of the
28:13
wealth multiplier but then I'd also
28:15
encourage you as y'all go deeper and you
28:17
feel like and you get his get his
28:18
interest peaked in this is how hard your
28:20
money can work so you don't have to work
28:21
so hard with your back your brain your
28:24
hands you can then go what's know my
28:27
number because if you if you partner the
28:29
well to multiplier whether you know your
28:31
number and you figure out how much you
28:33
need to be saving then you can quickly
28:35
realize and by the way when you're in
28:37
the world when you're in the know your
28:38
number course you could change spec hey
28:40
let's play a game here where we start
28:42
today and by the time we're you know
28:44
you're 62 or 65 whatever the exit point
28:47
is let's see how much we'd have to save
28:49
now go play with the Corsa and the tool
28:51
that's providing that course and delay
28:53
it by 10 years let's just take 10 years
28:55
off of your saving an investment
28:57
timeline and I think you'll see that by
29:00
a factor of of multiple you're going to
29:03
the workload on your shoulders is going
29:06
to go up exponentially and that's the
29:08
part that I would use for motivation
29:10
because I I think that you can see it's
29:12
such an easy lift it's such an easy task
29:14
if you'll just start now because if you
29:16
use the resources because it's not even
29:18
in this day and time it's so easy
29:20
because all you have to know is how much
29:22
you can save when do you need it and
29:25
between index Target retirement funds
29:27
between all the content we're creating
29:28
on moneyguy.com you can start the
29:31
journey today and create the best
29:33
version of your financial self yeah I
29:34
think I think communication is going to
29:37
be your biggest asset and how you
29:39
communicate with your husband and so I'd
29:41
ask him some interesting questions uh
29:43
husband question number one you want to
29:45
work forever oh no no no I don't I don't
29:47
want to work forever that doesn't sound
29:48
great well when you want to stop working
29:49
oh well I'd love to retire at 60. oh
29:52
okay awesome great love that we're going
29:53
to retire 60. what do you want to do
29:55
when we retire well I probably want to
29:57
travel so okay great how much we're
29:58
going to spend on traveling okay we're
29:59
going to spend this what else well you
30:01
know I always wanted to you know we got
30:03
some kids we got to pay for some
30:04
weddings okay great let's Mark we're
30:05
going to write that number down okay
30:07
what else you want to do well I'd love
30:08
to have the mortgage paid off okay well
30:10
we owe this much we know we've got to
30:11
have at least and you start just kind of
30:13
doing these line items of these things
30:15
that your husband wants to accomplish
30:16
later in life well as you're doing that
30:18
you are now defining what the goal is
30:20
well then it's a pretty easy
30:22
conversation okay here we are at sixteen
30:23
thousand we just figured out that with
30:25
all the stuff we got to pay for it's
30:27
like 500 000 the things that we want to
30:29
do by the time you're 60. we got to get
30:31
busy if we want to actually do those
30:32
things then we better start making
30:34
decisions now to start stepping in that
30:38
direction because when you can get goal
30:39
alignment then you can get Behavior
30:42
alignment but you got to get the goals
30:44
aligned first I think asking those
30:46
questions and building that dream is a
30:48
great way just to go about that I love
30:50
I'm a natural optimist so I always try
30:53
to lead and motivate through optimism
30:55
and give you the carrot on how good
30:57
things could be and y'all are at that
30:59
Crossroad it could be good but I do
31:00
think it's important when you're in a
31:02
situation like this where you are
31:03
disconnected I want to help motivate
31:06
through fear too is that one of the
31:10
saddest things for me is when I see
31:13
comments from people and I also see it
31:15
in content you know we cover a lot of
31:16
Caleb hammers content and stuff and and
31:18
we look at that and when he has people
31:20
who are in their 50s who have nothing to
31:24
their name
31:25
do you realize the course Corrections on
31:27
those things is such a hard decision I
31:30
mean you you have to work forever or you
31:33
have to basically live off and live at
31:36
such a minimalistic life that that
31:38
that's the only way you can create
31:40
success when you lose the element of
31:42
time and I hate to be because it just it
31:45
breaks my heart but y'all have so much
31:47
time on your side to course correct you
31:50
get to make easy decisions but if you
31:52
keep delaying it's going to turn into
31:54
hard decisions and hard decisions lead
31:57
to pain discomfort and it goes beyond
32:00
discomfort it's just excruciating at
32:02
that point and that's what I'm trying to
32:04
protect you from use that and you know
32:06
don't let us be the bad guy because I
32:08
want you guys spouses should have very
32:10
positive interactions but show him this
32:12
video and say let's do the easy lift now
32:15
you know because what you're saying that
32:16
we've started using that you came from
32:18
your old Sports terms do I do a light
32:20
yeah do it wrong do it long I mean and
32:23
that is kind of what you're facing so
32:24
get to where work today
32:26
awesome Leandra uh that was really good
32:29
guys first of all hopefully that helped
32:30
you um thanks for being here and thanks
32:32
for asking your question
32:34
next up we have a question from Spencer
32:37
he says what are the money guy's
32:39
thoughts on saving for a home in a Roth
32:43
IRA this is assuming you're already
32:46
saving 20 of your income between a Roth
32:48
401k traditional 401k and HSA so what do
32:53
you think about saving for a home in
32:54
general and using a Roth IRA as a
32:57
savings vehicle like that now Brian this
32:59
is where I'm a little rusty so I'm gonna
33:00
try to talk slowly in case Dale needs to
33:02
fact check this if we can't pull this
33:04
out of our minds but aren't there
33:05
limitations on how much you can use from
33:08
a Roth IRA for a first-time home
33:10
purchase they're like well I think he's
33:12
probably thinking he's going to pull the
33:14
basis out I mean then he's got but he's
33:16
whatever it has made while he was
33:17
building the assets work growing
33:20
tax-free got it but I think Spencer in
33:22
his and this we see this all the time
33:24
where and don't get busy doing nothing
33:26
because I see people who are very smart
33:28
Financial mutants and they're trying to
33:30
figure out how to trick the system but I
33:32
would I would encourage Spencer which
33:35
you need to be focused on is the
33:36
government restricts how much money you
33:39
can put in these accounts for a reason
33:41
so if you're putting it in to let it
33:44
grow for for a short period of time but
33:47
then pulling it right back out and yes
33:49
you got to keep the growth or the
33:51
interest that kind of built into it if
33:52
you pulled your principal but you've
33:55
actually now gutted it this is the same
33:57
reason we hate 401K loans because people
33:59
all the time talk to us about how great
34:01
401K loans are because the interest
34:03
rate's so much lower than Market or
34:04
other things or you're paying yourself
34:06
back but when you gut your retirement
34:08
assets to for for a need for today you
34:12
undermine what the compounding
34:14
opportunity could of what that asset
34:16
could actually be you have essentially
34:18
stunted its ability to maximize itself
34:21
and it always makes me sad and it sounds
34:24
like Spencer's a financial mutant so I
34:26
would encourage you where I would rather
34:28
you do is don't take away because you
34:30
have the get wealthy behaviors and you
34:32
have the stay wealthy behaviors and
34:34
getting wealthy behaviors is loading up
34:36
their retirement accounts but I can
34:37
understand and you probably in your ears
34:39
Whispering I'd like to buy a house how
34:41
do we do this that's why we give you
34:43
Grace when you're trying to get into the
34:45
home ownership Marketplace only put down
34:48
three to five percent on the very first
34:50
house now look second house when you
34:52
upgrade because you got more kids you
34:54
need more square footage you need a
34:56
little more yard for the dogs and all
34:57
the picket fence and all the other stuff
34:59
You're Gonna Roll the existing Equity
35:01
that you've made plus whatever you've
35:03
built up to get the full 20 but to just
35:06
get your foot in the door take advantage
35:08
of the three to five percent down
35:10
payment so you can still focus on the
35:12
get wealthy behaviors of fully
35:14
maximizing how cool it can be to save
35:17
and invest in Roth assets and the other
35:19
thing is just sort of a practical
35:21
application here you've heard us say
35:22
over and over again if you're going to
35:24
be buying a home or making a major
35:26
purchase anytime in the next 60 months
35:28
inside of five years you really want
35:31
that purchase to be saved in cash or
35:33
cash equivalents well great Point you're
35:35
thinking in your mind well I know right
35:36
now cash is paying 5 so I'm just gonna
35:39
leave my Roth dollars in cash and then
35:42
I'll do that well now you're handcuffing
35:44
one of the greatest benefits of Roth
35:45
because what you really want to have
35:46
inside of that Roth IRA or that Roth
35:49
401k are high growth assets because you
35:52
want to be able to stick it to the tax
35:54
man as hard as you can and get as much
35:56
growth as possible so if you're even
35:58
saving for a down payment the vehicle
36:00
through which you should be saving is
36:03
going to be cash for cash equivalents
36:04
and a Roth IRA is probably not the type
36:07
of account you want to hold that in
36:08
you'd probably rather hold that in uh
36:10
taxable brokerage account using a money
36:12
market mutual fund or a high yield
36:14
savings account using savings deposits
36:16
or something like that that's going to
36:18
be a better place to park that three to
36:21
five percent for that first time home
36:23
purchase down payment then trying to do
36:25
so in one of your retirement accounts
36:28
excellent
36:30
okay Spencer thanks for that question uh
36:32
we really appreciate you being here we
36:34
are ready to move on to Jordan's
36:36
question next
36:37
it says my company matches me 100
36:40
percent up to ten percent whoa that's a
36:44
lot it says this effectively means I'm
36:46
saving 20 of my income
36:49
should Roth IRA be my next goal and do I
36:53
have to Max it out even though five
36:56
percent wouldn't necessarily be maxing
36:58
it so how should you think about this
37:00
because this is a very unique
37:01
opportunity that he should definitely
37:03
take advantage of I mean first of all
37:05
George that's incredible right a 10
37:08
match on the 10 contribution that's
37:12
insane now like like they're like we've
37:14
seen a lot of like incredibly generous
37:16
employers out there that's big time yeah
37:18
that's big big but we ought to start a
37:19
movement called to have you hugged your
37:21
employer today I mean because that's
37:23
that's one that I would definitely go
37:25
he's attraction lawyer because
37:38
the generosity that's going in because
37:41
that means Jordan that your employer not
37:44
only are is it a place to work to get
37:46
your your wages you know to pay you for
37:49
a moment of your labor and time but they
37:51
also are trying to invest in in your
37:54
future success and that and we do the
37:56
same thing I love it I think the most
37:58
generous plan I've seen is we have an
38:00
employer we're actually going down there
38:02
in a few weeks just in case a few of
38:04
their their participants are are
38:05
watching
38:06
um where they put for pretty much every
38:08
dollar it turns into three dollars which
38:10
is kind of unheard of but but Jordan
38:12
you've got an incredible because what
38:14
makes yours incredible is it goes up to
38:16
ten percent because a lot of employers
38:18
will do dollar for Dollar on the first
38:19
three percent but to hear ten percent
38:21
and I'm assuming because you didn't put
38:23
it in the disclosure there's no cap on
38:25
that
38:26
um that that's fine nominal so now let's
38:28
get to your question because you're
38:30
saying hey my employer match my step two
38:33
of the financial order of operations I'm
38:36
already having to put 10 which is going
38:39
to be 20. do I get to count that that's
38:41
really kind of what this question is my
38:43
employer match counts so so I'm going to
38:45
chat so first thing we talk about you do
38:47
get to count your employer match as long
38:50
as you're close to the social safety net
38:53
of Social Security and other benefits
38:57
that are out there because what I but
38:58
because here let me give you the why on
38:59
this a lot of people will say look if
39:03
you're only going to make fifty thousand
39:05
dollars your entire career Social
39:07
Security is gonna cover a lot of that so
39:09
it's crazy for me to tell you you can
39:11
only count your contributions when you
39:14
have an employer contributing too
39:16
because that would be unfair you might
39:17
need more of that fifty thousand dollars
39:19
just to live your best life but if you
39:21
are somebody who's gonna make a hundred
39:23
thousand hundred fifty thousand two
39:24
hundred thousand as a household because
39:26
maybe you're a dueling com household
39:28
you're far away from what Social
39:30
Security can do so more and more of the
39:32
financial weight of independence and
39:34
retirement is going to fall on your
39:36
shoulders if you're on that scope of or
39:39
your path is that way I don't think you
39:41
should I think to count the employer
39:44
match you should challenge yourself so
39:46
take that into account now we get to
39:48
after you go through three paying off
39:50
the high interest debt four emergency
39:52
reserves to three to six months you do
39:54
get to your Roth IRA which is that's
39:56
where your question is okay if I I'm not
39:59
gonna be able to load it up if I put
40:01
five percent in so I would challenge you
40:03
if you feel like because somebody who's
40:05
in their 20s just starting out
40:08
I want you to focus on get wealthy
40:10
behaviors versus stay wealthy behaviors
40:12
your wealth and Success is Not
40:14
Guaranteed yet what happens if your
40:16
employer hits hard times and shuts this
40:19
down in the future or what happens if
40:21
your lifestyle expands Beyond where
40:25
you're now instead of living the the
40:27
lifestyle of a 20-something who focuses
40:29
on retirement and creates some forced
40:32
scarcity in their life so you have
40:33
automatic for the people automatic
40:35
savings and other things you just
40:36
expanded a lifestyle you went about the
40:38
nicer car we got the bigger house and
40:40
then life gets shattered before you've
40:42
actually built the foundation of wealth
40:44
building assets that would be a failure
40:45
so I would encourage you maybe you
40:47
should go beyond 25 yes that's the ideal
40:51
but there's nothing wrong with being an
40:52
overachiever I love it when I hear
40:54
people are conquering their finances and
40:57
becoming the best versions of themselves
40:58
you know it's funny bro we do an annual
41:00
wealth survey where we ask uh
41:02
respondents hey how did you build your
41:04
wealth ask them that question about them
41:06
and what's really interesting is not one
41:08
one time ever has someone said just oh
41:10
gosh I just I just saved too much I
41:14
started saving to now people say maybe I
41:15
worked too much or I focused too much on
41:17
my career that's a different thing no
41:19
one says oh man I just saved too much
41:20
and to my knowledge I'm trying to wreck
41:22
my brain here I can't think of one
41:25
person who's ever said to me man I maxed
41:26
out that Roth IRA and I wish I wouldn't
41:28
have no man I wished up that Roth IRA so
41:32
I think Jordan your situation even if it
41:34
does blow your savings rate past 25
41:36
percent you include the employer match I
41:38
think Roth dollars are so incredible I
41:41
would consider loading them up you bring
41:43
up a good point
41:44
um you know if you are an overachiever
41:46
and you have you're on a good career
41:48
trajectory where you're getting pay
41:49
raises where you could do maxing out the
41:52
Roth IRA
41:53
don't don't have the regrets I have you
41:56
know mine are mine are pretty noble and
41:57
the fact that there were a few years
41:59
where I was starting a company and money
42:01
was just so tight because I needed as
42:03
much cash to keep the company going and
42:06
just making sure we're keeping the
42:07
lights on then I in my upcoming book I
42:10
outline the actual opportunity cost of
42:13
what those Roth dollars I missed out on
42:16
are now worth because I've got the
42:18
hindsight of seeing what my other assets
42:20
have grown to I calculate that rate of
42:23
return and it's a huge regret now look
42:25
mine was Noble I mean those dollars were
42:28
needed the cash to keep the lights on
42:30
but I'm telling you Jordan don't have
42:33
those regrets if you have options and
42:35
choices maximizes Roth IRA dollars as a
42:39
reason the government's restricting how
42:41
much you can put in go attack to take
42:43
advantage of that and load up so you can
42:45
become the best version of your tax-free
42:47
millionaireself
42:49
awesome Jordan thank you for being here
42:51
thank you for the question I hope that
42:53
helps you out
42:54
we are going to go to mg's question next
42:59
MGS I know mg is that like money guys I
43:02
don't know I thought maybe it was a
43:03
shout out to us maybe it's his initials
43:05
I'm not sure
43:06
but either way here's mg's question
43:09
any advice on how to process external
43:12
Financial stressors I can't control I am
43:16
following the foo and feel secure
43:18
following the rules but I also feel so
43:22
defeated as rent and housing prices rise
43:25
dramatically so can you speak to kind of
43:28
the mental game of following the
43:30
financial order of operations in the
43:31
wealth building Journey yeah you know I
43:33
love that I love the way you framed the
43:36
very end of that sentence you said the
43:38
wealth building Journey it's a journey
43:41
right like it is it is an adventure and
43:44
frankly it's not that easy now perhaps
43:46
it's easier for some and harder for
43:48
others but for everyone we all face the
43:51
same things we all face periods of
43:54
scarcity we all face opportunity costs
43:57
we all face choices we have to make with
44:00
what we do with our dollars and how we
44:02
do those things now the board that some
44:06
of us are playing on might look a little
44:08
bit different than others but we all
44:10
have to face it so I think one thing you
44:12
can do is you kind of just breathe easy
44:13
and say you know what
44:16
I'm not going at this alone air everyone
44:19
is on a similar journey and everyone
44:22
kind of struggles on this journey now
44:25
one thing that I do love mg that you
44:27
said is I recognize that when it comes
44:29
to the financial World there are things
44:32
that I can control and there are things
44:35
that I cannot control first of all just
44:38
having the realization of that should
44:39
give you a little bit of stress relief
44:41
it's where you can focus on okay the I
44:44
can control my savings rate okay I'm
44:45
gonna do that I can I can control my
44:47
expenses okay I can do that I can
44:48
control how excellently I'll do my job
44:51
which will hopefully lead to me being
44:53
able to advance in my career okay I can
44:55
control that what are the things I can't
44:57
control man you know what I can't
44:59
control uh if I lose my job awesome
45:02
that's what step four emergency funds
45:04
are for you know what I mean I can't
45:06
control if I get in a car accident and
45:08
I'm disabled boom there's insurance that
45:11
I can go out and do man you know what I
45:14
can't control what happens with
45:15
inflation okay awesome I'm going to make
45:17
sure that I lock in my fixed expenses as
45:20
low as possible and I make sure that any
45:23
variable expenses I'm incurring I can
45:25
cut out I think you're already thinking
45:28
through it the right way by recognizing
45:30
there are things that I cannot control
45:33
and I'm gonna do my best given those
45:35
that I can but there are things that I
45:37
can control and on those things I'm
45:39
going to dive head first into how I keep
45:42
them where they need to be so I have
45:44
peace in the other areas of my financial
45:45
life I find out I think that the the way
45:49
mg has presented this is is good but I I
45:52
don't mind being self-reflective in the
45:54
during the pandemic I was part of a
45:56
men's small group and you know there's
45:58
all this crazy outside stuff you know
46:01
health related Financial related just a
46:03
lot of stresses General stresses out
46:05
there and you know and and I was
46:08
fortunate that I had this this group of
46:10
men and then we'd meet every week and um
46:13
you know we'd all just you found that
46:14
we're it was going around and we were
46:16
all lamenting about struggles and then
46:19
there was a a guy on the group Jason who
46:21
said something that I thought it just
46:23
stuck with me on anytime I face a lot of
46:25
stress he was like guys you you've got
46:28
to tend to your own garden I mean it was
46:30
there was some some grounding to this
46:32
biblically too but he was talking about
46:33
you can only tend to your own guard
46:35
Garden if you really removed the noise
46:37
and really get into it and that's why I
46:39
would tell you that you know and I think
46:42
about conversation I had with Daniel
46:43
last week we were looking at there was a
46:45
brand new thing that we're gonna
46:46
probably show you guys where we found
46:47
some web resources where you can really
46:50
kind of fine tune the decision of buying
46:53
versus renting like on your house in the
46:56
decision and right now like we were
46:58
looking at this area we live in in a lot
47:00
of ways it was almost hard to justify
47:03
buying a house
47:04
rent kept coming up over and over as the
47:07
winner because of all the crazy
47:09
assumptions with high interest rates
47:11
High purchase prices but this is what I
47:14
told Daniel at the end of the day I was
47:15
like look I'm old enough and I know you
47:18
just got to trust me because I am old
47:20
enough I've been around now from
47:21
multiple Financial Decades of actually
47:23
working and living within this reversion
47:26
to the mean is a real thing if the
47:29
market is distorting to where nobody can
47:31
afford to buy a house interest rates are
47:34
high this will change there will be
47:37
something and I'm an optimist so I'm
47:39
positive but I still think that there
47:41
will be something that adjusts I mean
47:43
think about what just came out last week
47:45
with New York not allowing Airbnb what
47:48
do you think that's going to do to the
47:49
real estate market in that area
47:50
everybody who went and speculated and
47:53
got into Airbnb is going to lose their
47:56
shirts that's going to dump a ton of
47:57
real estate on the market but nobody saw
47:59
that cut you couldn't necessarily know
48:01
so I'm telling you there I don't know
48:02
what it is and I'm not saying to to know
48:05
where the cards may fall but I just tell
48:08
you that when things get out of whack
48:11
there's usually a reversion to the mean
48:12
at some point in the process so I would
48:14
tell you back to to the question at hand
48:17
focus on what you can control which is
48:19
the financial order of operations all
48:22
the good decision making because the the
48:23
thing about luck when people talk about
48:25
luck it really is you being prepared and
48:28
then the opportunity comes across your
48:29
path at the exact moment so if you're
48:32
doing everything that we have in the
48:34
financial order of operations and you
48:35
have cash reserves and you've got money
48:37
going into Investments when the perfect
48:40
opportunity comes your way you know when
48:43
things go back to a reversion you're
48:45
going to be structured in a way that
48:47
people are going to look at you in the
48:48
future and go look how lucky that son of
48:50
a gun is and the reason it's not luck is
48:52
see you were prepared and you had assets
48:54
you had resources when nobody else did
48:57
and you were right there to take
48:59
advantage of the opportunity when it
49:00
shows up so so use that I know that
49:03
there's a lot of philosophical stuff and
49:05
we're very analytical Heavy Hitters but
49:08
I think that you needed to hear some of
49:10
that stuff so you can focus on what you
49:11
control can can control and then cut the
49:14
noise out that's going to keep you from
49:16
maximizing your opportunity in your
49:18
goals that's great mg thanks for your
49:21
question I hope that helps that was
49:23
great guys
49:24
we're going to move it forward to do it
49:26
Biggs question
49:29
he says here's a question I am 32.
49:32
already on step seven and eight of the
49:35
Foo I have no house and just inherited
49:38
one hundred thousand dollars that's
49:40
incredible so that is equal to my
49:43
retirement portfolio do I invest this
49:46
money or do I use it as a down payment
49:49
on a house so obviously those are two
49:51
big decisions and I mean the overarching
49:54
question is just like how should he
49:55
handle this inheritance well you know
49:57
it's really it's really interesting do
49:58
it big uh your question is should I
50:01
invest this money or should I use it for
50:02
down payment a house you're not asking
50:04
the right question the right question is
50:06
what are my goals is is one of my goals
50:09
to be a homeowner you said I'm 32 I'm on
50:12
step seven or eight so I'm saving like a
50:14
banshee I'm doing all the things but
50:16
maybe you're someone who renting makes
50:18
sense maybe you're someone who in the
50:20
geographic location and right now you
50:22
don't know that that's five to seven
50:24
years or maybe you're not married yet
50:27
and you think one day you might want to
50:28
be married or maybe you don't have
50:30
children yet and one day you think that
50:32
you do want to have children there are
50:33
circumstances in your life that would
50:36
substantiate renting for you makes sense
50:40
it's something that you should be
50:42
focused on right now not home home
50:44
ownership well if that's the case you
50:47
certainly shouldn't go buy a house
50:49
simply because you had this windfall
50:50
simply because you had this inheritance
50:52
you need to make sure that the financial
50:54
decisions you are making align with the
50:57
goals that you have and what's great
50:59
about your goals is that they are yours
51:02
just because you're 32 doesn't mean that
51:04
you have to own a house doesn't mean
51:05
that you have to go out and buy a piece
51:06
of property doesn't mean that that has
51:09
to be your story if that's not
51:11
ultimately something that you place
51:12
value on somewhere that you want to be
51:15
so to answer the question of what should
51:17
I do with it step one I would say Brian
51:19
Define what your actual goals are yeah
51:22
and I want to lean into because he
51:24
wouldn't have thrown
51:26
buying a house on there unless that's
51:28
not bouncing around in his head you
51:30
think so um because look let's let's use
51:32
you as an example
51:33
you got bullied into your first house to
51:36
a degrees because you found out your
51:37
wife was pregnant and then everybody in
51:39
the office at the time was like what are
51:40
you doing go buy a house four seconds
51:43
that's right I should say your second
51:45
home because you weren't but you were in
51:47
an apartment at the time because you'd
51:49
relocated to a different area so you're
51:51
right technically it was your second
51:52
home but you had gotten rid of the first
51:54
house so you were living in an apartment
51:55
at the time I think that do it big has
52:00
the goal of house there's nothing wrong
52:02
with looking because you're really
52:03
asking two questions on the on the the
52:06
kind of your prioritization and then how
52:08
you can lay that into the financial
52:09
order of operations answer the question
52:12
about the house first is if this is a
52:14
goal of yours now Bo's right the timing
52:16
might be in your area might be horrible
52:18
and you know when you do and we have
52:20
more stuff coming your way with some
52:22
content so you can help analyze should
52:24
you be renting versus buying but even if
52:26
you if the calculator says you should be
52:28
renting that means maybe in this moment
52:30
in time you should be renting but that
52:32
doesn't mean in the next three to five
52:33
five years we're not going to have some
52:36
course correction or reversion to the
52:38
mean that you shouldn't at least have
52:39
the cash on the sidelines to make the
52:42
purchase available to you right so so
52:45
that's why I first answer the question
52:47
am I going to buy a house in the next
52:49
three to five years if the answer is yes
52:51
then let's allocate what you think you
52:54
need put that in like a high yield
52:56
savings account maximizing getting as
52:58
close to five percent as you can and
53:00
then let's move to the second part of
53:02
the question which is now that we've got
53:03
the house goal at least accounted for it
53:06
doesn't mean we're going to take action
53:07
today because the Market's not perfect
53:09
for for my decision but you at least
53:11
have the resources Now set aside for you
53:13
now we can move to step two which is how
53:16
does this fit into the remainder this
53:18
fit into the financial order of
53:19
operations and if you still because you
53:21
said you gave us some some breadcrumbs
53:23
you're in Step seven you got this money
53:25
it came your way so it sounds like
53:28
you've either maxed out your retirement
53:30
accounts already or you your income's
53:34
low enough that you hit 25 without
53:37
maxing it out I'm going to tell you once
53:39
you figure out you know what if let's
53:41
just I'm going to make up a number I
53:43
don't know what your number is going to
53:44
be on what you need for the hospital
53:45
let's just say fifty thousand dollars
53:47
was left over at the end of the day
53:49
because you kept 50 for a down payment
53:51
or whatever you needed
53:53
um that 50 you might want to come back
53:55
and look at six to see if your income
53:57
was low enough that you still had some
53:59
some some meat on the bone for 22 500
54:02
you could come back to load up the
54:03
retirement accounts by having more of
54:05
your current income load up those those
54:07
accounts because you have more resources
54:09
to live off of to kind of trade this for
54:12
that to be more tax advantage with it if
54:15
you find that you're going to open
54:16
because step seven is when you start
54:18
thinking about the three bucket strategy
54:20
where you want to have not only tax
54:22
deferred which is your employer match
54:24
but also tax free like your Roth assets
54:26
but this is when you could open an
54:28
after-tax brokerage account you you
54:30
might want to put that money to work so
54:32
then the next question is going to be
54:33
they'll put it all together at once or
54:36
to a dollar cost average well we just
54:38
did a show on that and we actually have
54:39
a great brand new resource on this you
54:42
will compare it to your total investable
54:44
net worth and what you have out there
54:46
and if this is like a large percentage
54:49
of it if it's like 50 60 because you
54:51
already said the 100 is about what you
54:53
already have in investable assets then
54:55
you might want to spread that investment
54:56
out over five months you know spread or
55:00
if it's now because the house down
55:01
payment only a you know a blip to your
55:04
total net worth then just put it to work
55:06
within the financial order of operations
55:08
and live your best life I love it that's
55:10
great
55:11
do it big thank you for your question
55:14
Joe's question is up next
55:17
he says I've calculated that I'm ahead
55:19
of my retirement goals for my age
55:22
is it okay for me to slow down the
55:24
financial order of operations in order
55:26
to prioritize shorter term goals like
55:29
starting a business what do you think
55:32
man I love this Brian because one of the
55:34
things you you told me you said well
55:37
when you and your wife first got married
55:39
and you were starting out you said
55:41
sweetheart look if we can just save and
55:43
let's save save save save save save and
55:45
we make the hard decisions now in our
55:48
early 20s there's a really good chance
55:49
when you get to our 40s life will be a
55:51
little bit easier we can take our foot
55:52
off the pedal we can not save as
55:55
aggressively maybe we can do other stuff
55:56
because it sounds like your plan was hey
55:58
we'll be in this situation we know our
56:01
number we know we're ahead of the curve
56:02
we made the hard decisions early so now
56:04
we get to make some fun decisions later
56:06
is it okay if you know your number two
56:10
back down your savings two start
56:12
spending two start doing those sort of
56:14
things and how did you and your wife
56:15
navigate that process yeah this is a
56:18
great question there are a few
56:20
clarifying things we need from Joe first
56:21
I'd want to know you know obviously how
56:23
old is he
56:25
um because there's one difference if
56:27
you're ahead of the curve I mean we we
56:29
know I just saw it like last week the
56:31
net worth of like a 20 something even on
56:34
the high end of like the top 10 percent
56:35
is like twelve thirteen thousand dollars
56:37
because unfortunately a lot of people in
56:39
their 20s have a lot of debt and other
56:41
things so it's not hard to be ahead of
56:43
the curve but that still doesn't mean
56:45
somebody who's got twenty thousand
56:46
dollars that's ahead of the curve
56:48
doesn't mean that you're really
56:50
necessarily insured or assured that
56:53
you're going to reach Financial
56:54
Independence because you've done all the
56:56
get wealthy behaviors that you've
56:58
already way ahead of the curve on
57:00
funding so that's the first thing you
57:02
got to kind of know where you are in the
57:03
journey because if you you know when we
57:05
talk about Get Rich or get wealthy
57:07
behaviors versus stay wealthy behaviors
57:09
typically that Journey between age 20 to
57:12
45 is loading it up getting as many army
57:15
of dollar bills working for you as
57:17
possible so it is easy for somebody
57:19
who's really loaded up like I was
57:21
talking about my wife and I we could
57:22
save and invest front and load this so
57:24
by the time we get in our 40s we can
57:27
have a conversation and do a spot check
57:29
and you can use our know our number know
57:32
your number course at
57:33
learn.moneyguide.com to know where you
57:34
are to say yes we have now got reached
57:37
launch Point our assets are big enough
57:39
that they'll provide enough in resources
57:41
that I can take my foot off the
57:43
accelerator and and do some other goals
57:46
travel a little bit nicer and other
57:48
things but that's not what Joe Joe's
57:50
kind of I don't I'm assuming he's
57:52
younger than this 45 that I've thrown
57:54
out because now he's trying to figure
57:55
out more of the direction also I've got
57:57
some entrepreneurial desires too now I
58:00
you know and this is what this is what a
58:01
financial planner has to do is because
58:03
now I'm trying to figure out is this
58:04
like a side hustle thing or is this
58:05
something he's hoping to quit his
58:07
daytime job and actually do this full
58:09
time because those have two different
58:11
funding Necessities so just for a side
58:15
hustle that's something you can just you
58:17
know put some money on the side and
58:18
you'll be okay but if you all of a
58:20
sudden think that hey I've got a goal
58:22
the next 12 to 18 months I'd like to
58:24
leave my daytime job now you've got to
58:26
go put on your 3D glasses and and and do
58:29
the the the 3D plan I mean you have to
58:32
say okay I need to run a business plan
58:34
so I can figure out how much cash and
58:36
liquidity I need because just because
58:38
you're good at something you have
58:40
aptitude and talent you need the
58:42
resources to get you through the lean
58:44
period as you're getting your financial
58:45
foundation so run the 3D plan which
58:48
means you're going to run the dream oh
58:51
my gosh we're gonna be so rich this is
58:53
the dream this is why we do this the
58:55
Down to Earth this is what's likely
58:56
going to happen then you don't skip the
58:59
most important one is the doo doo plan
59:00
this is like oh my gosh this went so bad
59:02
I'm a fool I should never have done this
59:04
run those type those three plans so then
59:07
you can take a combination of the three
59:09
to figure out how much cash reserves you
59:12
need to boost up so you kind of can know
59:15
where you are and and I would tell you
59:17
I'd be a hypocrite if I didn't tell you
59:18
I did this in my 20s after my father
59:21
passed the way I had my My Moment of
59:24
clarity through trauma that I was like I
59:27
don't like how I'm living my life right
59:28
now yes we've been dual income yes we've
59:30
been loading up these savings it's been
59:32
easy but I feel like I want to go a
59:34
different path I had to build up and I
59:37
and we lived off of we lived we lived a
59:39
minimalistic life before I even knew
59:41
what that term meant off of one income
59:43
we saved the rest and I used those cash
59:46
savings to fund the first three years of
59:49
my operation and you'll probably need
59:51
that too Joe because it takes a while
59:53
um to to be successful in business I
59:55
mean I can tell you and I don't want to
59:57
go too far into too many tangents but
59:59
when I started my first company I took
1:00:01
went back to my hometown thinking
1:00:02
everybody was gonna remember how cool
1:00:05
and fun and what a good kid Brian
1:00:07
Preston was and everybody's going to
1:00:09
just line up to to to work with Brian
1:00:12
you show up you put your shingle out and
1:00:15
not a single person no no I had two
1:00:17
people show up I had um a neighbor down
1:00:19
the street Mr Ronnie I'll never forget
1:00:22
just all the thankfulness I was when he
1:00:24
showed up and then one of my best
1:00:26
friends still one of my best friends his
1:00:28
mother who's unfortunately passed away
1:00:29
now she also reached out and said hey
1:00:31
Brian I heard you you know you're
1:00:32
starting a company how can I help out
1:00:34
nobody else showed up so yeah that's why
1:00:36
you gotta run the doo doo plan too is
1:00:38
because more than likely there's gonna
1:00:40
be some things that Hiccup and don't go
1:00:43
like you plan
1:00:44
I think it's great that was good Joe I
1:00:46
hope that Brian's experience and just
1:00:48
everything he shared kind of helps you
1:00:49
out and gets you thinking in the right
1:00:51
direction we appreciate you being here
1:00:52
and hope it helps
1:00:54
okay Courtney's question is up next
1:00:57
it says hi money guy team hi any
1:01:00
thoughts on using permanent whole life
1:01:02
insurance to save for possible long-term
1:01:05
care expenses while avoiding future
1:01:07
taxes after fully funding a Roth IRA
1:01:15
I was tracking with with long-term care
1:01:18
and then whatever she's saying she
1:01:20
already already fully funded a Roth IRA
1:01:22
okay Daniel's smilings if you want to uh
1:01:24
I don't know if you need to clarify at
1:01:26
all but um using permanent whole life
1:01:29
insurance she's doing she's gonna get
1:01:30
out of jail hey I funded all my tax
1:01:32
incentivized savings yes I funded all my
1:01:34
taxes I've done my I've done my 401ks my
1:01:36
403 B's I've done the Ross I've got
1:01:38
nothing else left where I can really go
1:01:41
save money on taxes but you know what I
1:01:43
got a buddy it's a friend of a friend of
1:01:44
a friend who knows a friend who has a
1:01:45
cousin that told me there's this like
1:01:47
amazing way that I can start building
1:01:49
some tax-free dollars I can actually use
1:01:51
life insurance to do it and guess what
1:01:54
else I learned I learned that with
1:01:57
specific types of life insurance
1:01:59
policies well specific types of
1:02:01
universal perimeter Whole Life policies
1:02:03
there's actually an opportunity at
1:02:06
somewhere in the future where I can then
1:02:09
take that policy if I don't die yay for
1:02:12
not dying and I can actually convert it
1:02:14
into a different type of policy that has
1:02:16
a long-term gear benefit this is what's
1:02:18
happening now now I are there glimmers
1:02:22
of Truth and everything that Courtney
1:02:23
just laid out yeah there are pieces of
1:02:24
Truth in that the question that I would
1:02:27
have you ask Courtney that I want you
1:02:28
kind of sit and think through is all
1:02:30
right
1:02:31
is what I'm trying to accomplish is this
1:02:34
the most effective way for me to be able
1:02:37
to accomplish that meeting if I'm trying
1:02:40
to save for financial indoependence is
1:02:43
saving in an insurance policy really the
1:02:44
best way to do that or might I be better
1:02:47
served saving after all of my tax
1:02:49
incentivized stuff in just a regular
1:02:51
after-tax brokerage account if my goal
1:02:54
is to protect my family my loved ones
1:02:56
from my premature death and I want to
1:02:58
make sure there's a death benefit there
1:02:59
for them is permanent Universal or whole
1:03:02
life insurance the best way to
1:03:04
accomplish that or might there be a
1:03:06
better way to do that through low-cost
1:03:08
term insurance all right so now let's
1:03:10
fast forward if I know that inside of my
1:03:13
family genealogy the cause of death at
1:03:16
end of life tends to be long disease
1:03:19
right so Alzheimer's those types of
1:03:22
diseases where it's likely I'm going to
1:03:24
need some sort of Skilled Nursing Care
1:03:26
nursing home some some sort of extended
1:03:28
end-of-life care and it seems that
1:03:30
that's going to be likely outcome is the
1:03:33
best way for me to potentially plan for
1:03:35
that to be able to build money inside of
1:03:38
a whole permanent Universal type life
1:03:41
insurance policy now and then convert it
1:03:43
to some sort of long-term care policy or
1:03:45
buy some Rider that has a long-term care
1:03:47
benefit or
1:03:49
might I be better served
1:03:51
saving my dollars from now until I get
1:03:54
into my older age years to either
1:03:58
self-fund my future medical expenses
1:04:00
because I saved a pot of money so big or
1:04:03
just buy a traditional long-term care
1:04:06
insurance policy at that time
1:04:08
essentially by the insurance when I need
1:04:10
the insurance instead of buying the
1:04:13
insurance now when I'm super super young
1:04:15
and giving myself sort of a bailout
1:04:17
later on when I did not die and cash in
1:04:21
the life insurance policy yeah I mean Bo
1:04:24
is definitely more of the insurance
1:04:25
expert you actually spend some time
1:04:27
selling life insurance so I mean he
1:04:29
knows a little bit more so but no I
1:04:31
didn't mean that as a cut I mean it
1:04:32
really is depth of knowledge more so
1:04:34
than me mine's more of a philosophical
1:04:35
thing is because like I do think
1:04:38
insurance I'm loaded up with insurance
1:04:39
it's all term but I'm not against
1:04:42
permanent Insurance I've actually
1:04:43
referred out of permanent insurance for
1:04:45
clients I think the thing I'm sitting
1:04:47
here thinking about because I couldn't
1:04:48
tell what the why
1:04:50
where it was honed in on if it was
1:04:52
long-term care because long-term care
1:04:55
it's one of it's more of a peace of mind
1:04:57
subject matter because you know for
1:04:59
years I used to talk about the donut you
1:05:01
know of people who didn't have much
1:05:03
money you don't need to be thinking
1:05:05
about long-term care people have lots of
1:05:07
money you don't need to be thinking
1:05:08
about long-term care because you can
1:05:09
self-insure it's really the people who
1:05:11
are kind of in the past it was those
1:05:12
people kind of in that one to three
1:05:14
million dollars of assets because you're
1:05:15
worried about future ailments eating
1:05:18
away any ability to pass on assets or
1:05:21
even just have assets
1:05:23
um so there was definitely a market for
1:05:25
long-term care but just to give people a
1:05:27
quick history lesson long-term care
1:05:29
insurance like I said this is where my
1:05:31
me being around decades and having an
1:05:33
experience I'm now seeing the other side
1:05:35
of things long-term care I think the
1:05:37
insurance industry missed the mark they
1:05:39
were selling the heck out of these
1:05:41
policies
1:05:42
um and and now here we are we've got the
1:05:45
graying of America where a lot of these
1:05:47
policies are now have reached the point
1:05:48
where they blew up they didn't actually
1:05:50
work so guess what the result has been
1:05:52
on the way they structured those
1:05:53
original long-term care policies they're
1:05:55
sending out huge because they go to the
1:05:57
insurance commissioner and the insurance
1:05:59
commissioner goes yes you can you can
1:06:00
adjust these stated premiums because
1:06:03
you're doing it to everybody and we get
1:06:04
I mean I think I've seen so high as what
1:06:06
20 plus
1:06:08
you know basically say if you want to
1:06:10
keep your current coverage you're going
1:06:12
to have to increase your premium
1:06:13
payments at this level and it's Way
1:06:15
Beyond what they was stated when the
1:06:17
policy was sold to these and a lot of
1:06:19
our retired clients who are on fixed
1:06:20
incomes like what do I do and we have to
1:06:23
do all kind of analysis so the solution
1:06:25
from the insurance company has now been
1:06:28
okay we blew it up we our actuaries
1:06:31
screwed it all up they didn't get all
1:06:32
the assumptions right so let's do this
1:06:34
now let's go with permanent insurance
1:06:36
policies and put these riders for
1:06:38
long-term care on top so now we get the
1:06:40
the you know we got some
1:06:41
cross-pollination there with the the
1:06:43
cash value and so forth and it does seem
1:06:46
to
1:06:47
it had I don't know if it's been tested
1:06:49
yet but this is what the people I trust
1:06:51
in the insurance industry have shown me
1:06:53
is the new solution because the old
1:06:54
policies obviously were a failure
1:06:57
um but I just don't know if I completely
1:06:58
trust the industry I I've experienced
1:07:00
the failures for my clients on the old
1:07:03
version of long-term care now we're in
1:07:05
long-term care I don't know if we're in
1:07:06
2.0 or 3.0 but and they tell me they
1:07:09
have this new solution but it seems a
1:07:11
lot more expensive which probably
1:07:13
because I got burned on the first one
1:07:15
um and it just seems hard so you have to
1:07:17
know yourself Courtney and I hate that
1:07:19
we I'm wondering taking you on a journey
1:07:21
through the woods right now and I don't
1:07:22
mean to but I just want to make sure you
1:07:23
have all the variables when I've talked
1:07:25
about this to clients at the end of the
1:07:28
day it comes down what gives you peace
1:07:30
of mind for a lot of people analytically
1:07:32
I can show you all day long you can
1:07:34
self-insure you can do all kind of other
1:07:35
things like Beau talked about but if you
1:07:37
are a person and now you're reaching
1:07:39
middle age status and you saw your
1:07:41
parents struggle and and and eat away
1:07:43
their assets and you took care of them
1:07:45
and it just you know it's just such a
1:07:47
stressful thing that you're thinking why
1:07:49
don't I just ensure this away buy this
1:07:51
away this fear away then I've told
1:07:54
clients look if it gives you peace of
1:07:56
mind you have enough resources that
1:07:57
doesn't blow up your retirement plan we
1:07:59
can go and stress test it let's buy and
1:08:02
take this stress off of your plate I'm
1:08:04
okay with that but just make sure you do
1:08:06
all the exercises all the work that goes
1:08:09
into figuring out if this insurance
1:08:11
product is the best solution for you
1:08:14
versus being sold the insurance product
1:08:16
just because somebody's coming with you
1:08:18
just make sure you do your homework
1:08:19
because this is definitely one of those
1:08:21
due diligence topics that requires you
1:08:24
to to measure twice and only cut once
1:08:26
versus somebody to scare you to death
1:08:28
and then you go buy something and then
1:08:30
you have regrets later on there's a lot
1:08:32
that goes into this probably might even
1:08:34
be something that you want to consider
1:08:36
taking the relationship to the next
1:08:37
level and in the meantime at least go
1:08:40
out to moneyguy.com resources and find
1:08:42
the eight questions you should ask any
1:08:44
financial advisor or somebody selling
1:08:46
you Financial products to kind of know
1:08:48
where their motivation is that's great
1:08:50
awesome Courtney thank you so much again
1:08:52
moneyguy.com resources for that free
1:08:54
resource on the eight questions to ask
1:08:56
and then there's also a little become a
1:08:59
client button at moneyguy.com if you're
1:09:01
interested in seeing what it's like to
1:09:03
take it to the next level with a bound
1:09:04
wealth
1:09:06
all right next up we've got a question
1:09:08
from Stephen
1:09:09
he says I am curious to hear about why
1:09:12
the money guy show has increased their
1:09:15
promoted savings and investment rate
1:09:17
from 10 to 15 percent for younger Savers
1:09:20
several years ago in your videos
1:09:23
up to 20 and now 25 for All Savers I'm
1:09:28
honest I think this is a great question
1:09:29
first of all like why do we say 20 to 25
1:09:31
but I also thought man this guy's like
1:09:34
an OG like
1:09:36
he just went down the rabbit hole Yeah
1:09:42
where like I was meeting with somebody I
1:09:45
was meeting with somebody yesterday a
1:09:46
consultant and they're like you know
1:09:48
when we first met I knew you had a
1:09:50
successful Channel but I had no idea
1:09:53
you've been podcasting since 2006. I was
1:09:57
like yep long time been doing this for a
1:09:59
while you know no it shows how nerdy I
1:10:01
am not brilliant nerdy because I was
1:10:03
doing podcasting before anybody knew
1:10:06
what podcasting was
1:10:08
um to the point that my wife was telling
1:10:09
friends please don't pick on him he's
1:10:11
really energized about this and um and I
1:10:13
it really was a passion project in the
1:10:16
beginning and and realize let's look at
1:10:19
who were influencers on me
1:10:21
um when I even started this
1:10:23
Wealthy Barber Millionaire Next Door I
1:10:26
mean you can even you know it came in at
1:10:28
later I've gone through some of Dave's
1:10:31
books with The Total Money Makeover and
1:10:34
you look at what all the stuff that came
1:10:36
out in the 90s what did it tell people
1:10:38
to say Wealthy Barber was around 10
1:10:40
percent Dave talks about 15
1:10:43
is I have because realize a lot of time
1:10:46
has passed between 2006 to 2023 and the
1:10:50
world has changed significantly you know
1:10:52
now can you tell me the Social Security
1:10:54
is on firm footing I I can't I mean that
1:10:57
that's struggling and we've actually now
1:11:00
done the math we have a great resource
1:11:03
on showing what 25 can actually do for
1:11:06
you
1:11:07
um I'm trying to give the team enough
1:11:08
time to put it up there I can see them
1:11:10
scrambling but look at this this will
1:11:12
show you and this probably also will
1:11:14
lead to to what you're seeing Stephen is
1:11:16
that yeah of course somebody who starts
1:11:18
out when they're 20 years of age a
1:11:20
little goes a very long way but what I
1:11:24
found out the average the typical
1:11:26
starting point for people on their
1:11:27
journey to becoming Financial mutants is
1:11:30
not in the 20s unfortunately typically
1:11:32
they they catch a clue in their early
1:11:34
30s and all of our research shows you
1:11:37
need to be thinking at that 25 so now it
1:11:40
seems like since the net catches a lot
1:11:42
more people and impacts a lot more
1:11:44
people because that's the reality is 25
1:11:47
is what most people need to be doing if
1:11:50
you're a financial mutant and caught on
1:11:51
caught this concept you know when you're
1:11:54
15 years old or 20 years old of course
1:11:56
you can do less but should you I'm gonna
1:11:59
I'm gonna challenge you to be the best
1:12:01
version of yourself because let me tell
1:12:03
you what I have found the more you do
1:12:05
while you're young do you know how much
1:12:08
flexibility how many options you get
1:12:10
when you over achieve at a young age
1:12:12
because you you got to not only maximize
1:12:15
the component of time but time with
1:12:18
extra resources
1:12:20
telling you you almost get that Ric
1:12:23
Flair I mean because it gets really
1:12:24
exciting exactly right I think that
1:12:28
um what's amazing is what we're doing
1:12:30
like we talk all the time about like
1:12:32
Financial Independence but we also talk
1:12:35
about like this fifth level of wealth
1:12:37
this abundance this really leaning into
1:12:39
what is my purpose what do I value what
1:12:42
do I want to use the resources for well
1:12:44
what we found is the folks who can save
1:12:46
early and save often and they build up
1:12:49
their wealth early enough they get to
1:12:51
this place to where they start really
1:12:53
focusing okay what do I want this life
1:12:54
to look like all this money that I've
1:12:56
saved all this wealth that I've built up
1:12:57
it now gives me options it now gives me
1:13:01
Freedom it now gives me flexibility hey
1:13:04
I want to check out at age 50. great I
1:13:06
can do that I want to start volunteering
1:13:08
at 55 awesome yeah I had a 30 savings
1:13:11
rate now at 55 I can do what I want when
1:13:15
I want the way that I want what we have
1:13:18
found is that the earlier someone can
1:13:20
catch on a saving 25 percent of their
1:13:22
gross income if you don't don't have the
1:13:24
deliverable go down download at
1:13:25
moneyguide.com resources the sooner that
1:13:28
you can grab onto that the sooner you're
1:13:31
going to give yourself the freedom and
1:13:33
flexibility to start doing life on your
1:13:36
terms to recognize that money is just a
1:13:39
tool and now that I have stacked up my
1:13:42
tool chest I can go build whatever I
1:13:45
want to build and that gets a whole lot
1:13:47
of fun if you can figure it out early if
1:13:50
you can start moving in that direction
1:13:52
excellent well if you haven't already
1:13:54
yet subscribe because we love doing this
1:13:57
every week we love answering your
1:13:59
financial questions and we'll be back
1:14:01
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1:14:03
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1:14:09
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1:14:11
to moneyguy.com we've got tons of free
1:14:14
resources for you just waiting to be
1:14:15
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1:14:18
of fortify what you're hearing and
1:14:20
learning here on the show and hopefully
1:14:22
it continues to inspire you on your
1:14:24
wealth building Journey yeah this is
1:14:26
this has been fun well you know the the
1:14:27
start of this q a episode was our brand
1:14:31
new wealth multiplier we even have a
1:14:33
wealth multiplier Hub so I want to
1:14:35
encourage you to do two things you can
1:14:37
go to moneyguy.com resources download
1:14:39
the brand new wealth multiplier it
1:14:40
doesn't matter if you have a if you're a
1:14:42
brand new newborn who's just such a
1:14:44
financial mutant that you came out of
1:14:45
your your mother and you're ready to
1:14:47
start learning about money
1:14:49
if you're a 35 year old who's just
1:14:51
discovering this for the first time
1:14:53
moneyguy.com resources we have a wealth
1:14:55
multiplier resource for you now a lot of
1:14:58
you your financial mutants you want to
1:14:59
know the why you want to know the how
1:15:00
you want to know how we actually created
1:15:02
this thing go to moneyguy.com and then I
1:15:05
want you in the right upper right hand
1:15:07
corner there's a search bar and I want
1:15:08
you to type in wealth multiplier and we
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have a whole hub for you that's going to
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load you up with anything and everything
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including how we calculate all your
1:15:15
questions go check that out but here's
1:15:17
what the primary focus for me is
1:15:20
that wasting time
1:15:23
can be more expensive than wasting money
1:15:26
that's what compounding interest is
1:15:28
really if you boil it down the boil it
1:15:31
you know you said leave it there people
1:15:34
are rolling doubling balls across the
1:15:36
the screen right now as we speak but
1:15:38
seriously if you can focus on maximizing
1:15:41
every
1:15:43
ounce and minute and second of your time
1:15:46
to to Really prioritize towards your
1:15:48
best financial self you're on your way
1:15:51
to being a financial mute I'm your host
1:15:53
Brian Preston Mr Bo Hanson the rest of
1:15:56
the content team money got team out
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Wealth Multiplier Revealed: The Magic of Compound Interest!
The Money Guy Show