Q&A: Would You Spend $60,000 on a Wedding Knowing It Could Be $800,000 Someday?

23:16Paula Pant:And we're kind of lucky that we haven't for this long. So 7%, no matter what you do. And by the way, I think it's prudent that you said 7%. I would have done 7%, but it still is an Achilles heel. So here's what we would always do in our financial planning meetings. I would build milestones between here and that 2 million number. Where do I need to be every year to get there? And let's say, Paula, you're my client and And we come in and right now you're at 750 ,000-ish, let's say. And we get together and it's a year from now and you need to now be at 805 ,000. And we add up all your stuff and you're at 815 ,000.

24:02Paula Pant:Well, now we know we can do a few things. Number one is you could save less money today, which is really cool. Number two is you might be able to project an earlier retirement if you want it. number three is you could save the same amount but save it for other things let's say you like to travel you want to travel more today you're not prioritizing the 529 and you realize listening to what paula said at the beginning of this that you should now you divert some money toward another goal or you can just keep the status quo and keep building ahead knowing that you now have flexibility for what happens in future years when seven percent doesn't have you have a lot of options.

24:39Paula Pant:It's the same if you get behind. So if you have to have 810 and you're only at 780, well, now your options are, should I save more money? Do I ask for a raise? And then how do I come up with that money? Do we need to spend less money? Do we cancel stuff? Do we go ahead and realize that we have a deficit now? Do I retire later? Do I now retire later? My daughter didn't want to go to my university where I work, but now she's going to. I don't know what the options are. But again, you've got a lot of options. And the options are better, Paula, when you're looking at it 10 years before that you're not on the timeline than if you wait until two years before.

25:22Paula Pant:So I love these milestones along the way. And I think that you're still far enough away that having that 7 % number, I would just make sure that you're on it. And if you're not on it, what I like is, is that every time you look at whether you're ahead or behind, you then are in the driver's seat versus without that timeline. Here's what people want to talk about when they came into my office. What's going on with these politicians? There's a new thing about social security. What happens about interest rates? All this crap that's out of your hands. And I would go, okay, let's talk about that later.

25:58Paula Pant:You need to be at 810 ,000. Where are you? And immediately my client would go, oh, I'm at, let's see, I'm at 785. Oh, so do you think you should save more? You can control that, right? And then we start talking about how to do it. And all of a sudden, you put away all this crap that you can't do anything about and you focus on you and the goal. So essentially, Joe, what you're saying is that you've got two levers. One lever is your returns, the other lever are your contributions. And so 7 % is a great assumption, but check in with it, make sure that you're hitting minimum seven. And if you're not, then you have to pull the other lever.

26:32Yeah.

26:32Paula Pant:You got a course correct. Right. On the topic, Joe, of what's going on in the news, there is another piece, Mike, that I want you to pay attention to. And it is in addition to the 529 plan, there's also something called the 530A plan. 530A is also, depending on what side of the political aisle you fall on. 50 % of the population refers to it as a Trump account, and the other 50 % of the population refers to it as the Invest America account. If you're in the financial planning industry, you would call it the 530A account. So that's simply how I will refer to it. But your daughter is eligible for that.

27:13Anybody with a social security number who will be under 18 at the end of this calendar year, it is eligible for, you can open a 530A account for that person. So I would strongly encourage you to open and contribute to a 530A account. Now, your daughter is not eligible for the government contribution of 1 ,000, which is why a lot of people erroneously believe that this account is only for babies. That's actually not the case. The$1 ,000 is only for babies, but if you're a minor under the age of 18, you can have a 530A account. And the tax treatment on this is absolutely incredible. So I would, in addition to the 529, open that account for your daughter, contribute to it, your family, friends, your workplace, anybody else may contribute to it as well.

28:10there's up to an annual limit of$5 ,000, but it's an opportunity for your daughter to be able to grow massively tax advantaged money, like just massively, massively tax advantaged money.

28:24Paula Pant:I love the attention that you've given this, Mike, and the things that you've thought of, the fact that you think that you can exist on 160 ,000, as we've talked about before, Paula, I believe strongly that staying away from that jagged edge of the safe withdrawal rate is just a good idea for being happy because then you don't have to worry about whether your withdrawal rate remains safe as much. So I find that great. I think the questions he's asking are the right questions. Do I think about it? Is our money or separate funds? I like all the planning he's doing. Good stuff. What about the 529 plan like you do?

29:00Paula Pant:But there's got to be a reason for it. We just don't know. Yeah. Yeah. Well, thank you, Mike. Thank you for the question. And please call us back with an update. Call us and let us know how this plan progresses. We're going to take a moment to hear from the sponsors who make this show possible. When we return, we're going to hear from someone who is planning a wedding in New Zealand, wants to spend$60 ,000 on it, and is wondering, is that smart? Is that a financially savvy thing to do? That's up next. In business, there's no room for guesswork. Every shipment matters. Every deadline counts. When you're trying to keep operations running smoothly, the last thing you need is uncertainty.

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31:01Paula Pant:fandoms that matter most. Learn more at Accenture.com slash Spotify.

31:40welcome back our next question comes from abby

31:46Paula Pant:hey paul and joe my name's abby i'm a repeat caller i called you when i first went to graduate school to ask about investing for that and then i also called you after i got my first job and now I'm calling you to ask about my wedding. And before you can toast your spindrifts in support of my nuptials, I was wondering, do you guys have a rule of thumb or advice on how much to spend on a wedding? Perhaps a rule based on percentage of net worth or of income. My husband and I are tentatively planning to have our wedding in New Zealand, which will be at an all-in cost of around $60 ,000, which we can cash flow.

32:23Paula Pant:We have investments together in the range of$800 ,000, and we have an income of$400 ,000. It feels very much against the FI mindset to spend this much on a wedding, but I worked hard and picked up a lot of overtime to pay for it. However, I know if we invested that money, it could be worth$ % &$ % & in 40 years. Can't wait to hear your advice. Thank you so much. Abby, first of all, I love that I've been there through so many milestones and moments in your life. That is so beautiful to have been part of going to grad school and getting your first job and now your wedding. Now our Abby's getting married.

33:04Google ran this ad once. It was just an ad for Google. I don't know why they run this. Everybody knows what a Google search is, but they were basically just running an ad for the Google search bar. They ran that ad by showing this set of like search queries that was like, study abroad in Paris. And then it was like, how do I ask a girl out in French? First date ideas.

33:28Paula Pant:Oh, the whole timeline. You know where this is going. You see the whole progression. Visas to France. Oh, that's wonderful. Wedding rings, you know. And then the final one was like how to assemble a crib, right so it was like a this very very cute ad it showed how you use google searches across these milestones of your life and i got vibes from that when when abby called and talked about that's so cool yeah that's great i love this question and before we answer it though i do want to talk about something that abby the same thing that you thought always frustrates me about the quote fire movement is when people see the five lifestyle is rice and beans.

34:13Paula Pant:And there is an element of that. And it is my least favorite part of it. I think we have to dispel this myth that cheapening our existence is a better life. Whoever started that piece of the five movement needs to be shown the door. You need to take them and kick them out of the club because cheapening your life does not make it better. It doesn't. Less expensive can be better. We can even talk about that because that's going to be part of my answer, but cheaper is not better. Oh my goodness. Stop, stop, stop. But, but Abby, that's not you. That's, that's my trigger with people who think that fire means I, I do less than what I could.

34:57Yeah. Abby, so honestly, when you said, you know, I know that that money, if invested at 7 % for 40 years, would end up being a**. And the reason that I want to bleep that out is because it doesn't matter how much that money is going to be. What are you going to do with that? What's it for? However, the point, the whole point of money is not to amass more zeros in a bank account or in a portfolio, in a brokerage statement, right? The point is to have dry powder, to have a set of tools that you can use in order to construct the life that you want, to build the memories that you want, to do the things that matter most to you.

35:47Money is a physical manifestation of your values and your priorities. And so if this wedding is a priority to you, which it sounds very much like it is, then I don't care what that money would be 40 years from now because there's nothing that you would otherwise spend on 40 years from now that would be worth more than what that is worth to you today. Let me use another example. I was talking to Joe, a mutual friend of both of ours, and we were discussing this question you often hear in the personal finance community of, should you live in an expensive city like New York or San Francisco, or should you live in Texarkana, Texas.

36:38Yes. And he made an excellent point. He said, all right, calculate the differential and then ask yourself, what would you otherwise spend that differential on? If you would otherwise spend that differential on something extremely important, like, you know, if this is a, your kids can eat three meals a day versus your kids can only eat two meals a day type of a scenario, then obviously your answer is quite clear. You go to a lower cost of living place. But if you look at that differential and there's nothing in particular that you would necessarily spend it on, you're kind of like, I guess I could get a nicer pair of jeans.

37:24I don't know. I could buy a few extra sweaters. I could order DoorDash a little bit more often. Like, what the heck are you going to do with that money? My TV would be marginally bigger than it otherwise is. If you don't have anything that is a bigger priority, then why wouldn't you spend it on this thing that's going to be really influential? And so anyway, in that example, it's where do you live? But in your example, it's, do you make this memory that you will have for the rest of your life or not? All right.

37:57Paula Pant:Can I have a slightly different take? Yeah, go for it, Joe. So the average amount of money that people spend, I went and looked it up, Abby, when you called, just because I didn't know. I haven't kept up in a place that many of us have heard of called the Knot keeps a running index of what the average wedding is in America. It's$35 ,000 in 2026. So$65 ,000 wedding should be a very nice wedding. Now, the thing that we referenced earlier in the show is that for 10 years, I was in the wedding industry. Oh, that's right. As a DJ. I did weddings. I did fraternity parties. Like I did everything. I did all kinds of events.

38:38Paula Pant:But I saw some really expensive weddings. I was a piece of some really expensive weddings that were not awesome. And I saw some really inexpensive weddings that were super awesome. So what I wouldn't do is make the mistake of equating more money with a better experience because they can be two different things. And the thing is, I'm sitting in a spot right now and my daughter won't mind this. My daughter just got engaged. So we're about to have a wedding in our family. And we've been talking about this a lot and not really about the budget as much as what makes a beautiful wedding. what do you want it to look like?

39:24Paula Pant:And I think that's where you start. I think you start with, how is this a beautiful thing? Because if you're going to spend$60 ,000 on it, I would want it to be phenomenal. And I'll give you an example, a different example. I saw a TikTok video last week, Paula, where a guy paid$25 ,000 so that he could zipline into his own wedding and be unhooked from the zipline. And he said it was worth every penny. He must be a zipline enthusiast. Well, and I'm glad you made that point because from where I sit, it looked like throwing money away. Like seriously, throwing$25 ,000 away for 10 seconds for me.

40:02Paula Pant:But again, that's me versus him. And there is a difference and it is your day. All the years I was a financial planner, I've never heard anybody say, I wish I would have spent more money on my wedding. What I have heard people say is, I wish I would have had a more beautiful day. I wish I would have had more fun that day. I wish I would have had more. And what I saw were brides that had spent a lot of money being pushed around by the help that they hired to make sure that it ran. And they were so into, because they'd spent so much money, they were so into it being the perfect day for everybody else that they forgot that it was supposed to be their perfect day.

40:39Paula Pant:Spend time making it your perfect day, not making it everybody else's perfect day. I don't have a dog in the fight about 60 ,000 bucks. I don't. I have a huge dog in the fight when it comes to that$60 ,000 and having it work for you, if you're going to do that. I don't know. It's as much about more money or less money as it is about, um, you know, talking to people that have been there, getting different professional opinions about how do I make sure that this is a great day for me and a great day for my guests. Yeah. I guess start with the wedding that you want and then don't let money be the friction that causes you to shortchange the vision.

41:20Paula Pant:Yeah. And I also wouldn't have guilt around it. You know, the, to your point again, Paula, just to reiterate this, there's definitely some guilt around if I, if I invested this money, it would be who cares. Right. Who cares? Who cares? You know, somebody emailed me, This was many, many years ago, back when I used to write online frequently about world travel. I don't do that as much anymore. I mean, I still travel a lot. I just don't write about it. This is before remote work became popular. So at the time, the zeitgeist was what was called location independence. And I remember getting an email from, this is back when I used to check my email.

42:00Paula Pant:Oh, that was a long time ago. Yeah. I remember getting an email from this guy. You guys don't know how funny that is, by the way. I really don't. It's been like six years since I checked my email. You have no idea how funny that is. You checked email? Once upon a – in my youth, Joe, in my youth. And so he was like, I really want to – I think he was at a transition point, one of those natural transition points in life, like middle zone after undergrad, but before grad school, that band of time when you've got a lot of flexibility and what you do ultimately isn't really going to matter that much anyway.

42:39And he was like, I really want to travel. Like I've been reading all of these essays online and I love the idea of just going to Thailand or going to wherever. He was like, but I just keep running the numbers and thinking about how well, if I invested that money instead, it would be worth whatever by the time I'm 65. And this is the shadow side of the personal finance space. You know, we have to simultaneously talk to both audiences. We have to talk to the people who are neglecting the 65-year-old version of themselves. But we simultaneously also have to talk to people who are, who have taken the concept of quote-unquote delayed gratification too far.

43:26and are now simply deferring their life. There's an expression that I love, which is plan for the future, don't live in it. And if you overly are living in the future, then you neglect to live in the present. And that only leads to regret because you have certain windows of opportunity in any present moment that will not be there a decade from now.

43:53Paula Pant:We do underestimate time. We overestimate assets and we underestimate time, which is this precious asset, non-renewable asset that we don't think enough about, I think, in this community. I do want to reiterate this another way, Paulo, which is I just had a wonderful discussion with another friend of both years of mine. I got him, Jesse Mecham, who runs YNAB, which is great budgeting software. And Jesse and I were having this chat and he has learned through experience as he's gotten older. And I love how over time we learn these lessons, right? Where he was very militant about budgets early on.

44:30Paula Pant:And now he's graduated to what matters most is what the money's for. And he said something very poignant, which was some of the multi, multi, multi millionaires that he interfaces with are very unhappy, are incredibly unhappy people. And he said, because even though they have millions and millions and millions of dollars, they don't know what that money is for. They don't know what it's for. And so you could extrapolate this money, Abby, and have it go to a beeped out number. That's a pretty big number, right? You could have it get to that number, but what's it for? Here we know what$60 ,000 is for.

45:10Paula Pant:We know what it's going to do. And I would suggest, you know, through my experience in financial planning is Jesse's right on. Once you've assigned a home to that money, then the money becomes fuel and it becomes fun. But until then, it's just a pile of assets and it doesn't help you with what I think most of us are trying to solve for, which is happiness. Yeah. So solve for happiness. That's the takeaway. We're not solving for zeros on a brokerage statement. We're solving for happiness. Yeah. Now I will say this, if you had come here, Abby, and told us you want a$60 ,000 wedding, but your future meals for next week are uncertain, which is what we see far more often, our answer would have been hella different.

46:02Paula Pant:Incredibly different. This is all predicated on the fact that it's not affecting your future, that your future is fine. Exactly. Exactly. Yes. Yeah. So enjoy the wedding. Send photos. Send photos. You're going to have to open up your email to get the invite, Paula. All right. I will concede to check email if you send photos. Wow. You heard it here first. Hot take of the show, Afforders. I will check one email and it will be that one. I'll ask Rima to ping me. She'll be like, Abby sent her wedding photos. and then that will be the one email I open. You know, I would like to say that there's a nice chat going on YouTube.

46:44Paula Pant:If you want to hang out with us, we make this on YouTube. We have a lot of fun doing it. But a guy named some dude hanging out with us says, my wedding cost about$1 ,800 in Vegas before they closed the chapel in the Excalibur. Parents bought us a helicopter ride over the city at night. Fun and cheap. Lots of family made it. You know, it's in the eye of the beholder, Paula. It's in the eye of the beholder. For some people, they'd hear... In New Zealand, are you kidding me? Then the whole family can't make it. Inexpensive thing in Vegas, then the family can make it. Other people hear Vegas wedding, I'm out.

47:16Paula Pant:I'd rather have the destination. So it begins with you and the fact that it is this moment for you and the fact that you can afford it, whatever it might be. Beautiful. Well, thank you, Abby, for the question. And send photos. We are going to take one final break to hear from the sponsors who make this possible. And when we return, we're going to hear from a listener in Luxembourg who has a question about what behaviorally makes the most sense versus what mathematically makes the most sense. That's up next. Hey, Chicago. Class it up with Crocs. You know back to school is coming in fast. So why wait to find your new fave footwear?

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49:28welcome back our final question today comes from what did you know we're international we are international because the final question comes from luxembourg how about that

49:41Paula Pant:hi paula and joe thank you very much for this incredible podcast and all you do for the community. I really love the podcast and I've learned so much so far. I've tried to apply some advice on investments even here in Europe. My partner and I are both immigrants that live in Luxembourg. I'm 28 and my husband is 30 and we've been working in Luxembourg for three years now. Here in Luxembourg, there's an option to have an additional private pension minus the state pension, which is directly deducted from our salaries. The private pension option allows us to invest in mutual funds with insurance companies and the amount contributed per year is tax deductible from our tax return.

50:21Paula Pant:My partner and I contribute a total of 534 euros per month. Out of these, 11 euros are deducted as charges and also there is a 0.1 % fee for assets under management per month, making a total amount of 1.2 % per year. But the major benefit of this plan is that our tax liability reduces by about 1 ,500 euros per annum and the potential return on investment. The average return from the two mutual funds we are invested in from 2020 to 2024 is about 9 % and 10%, and we do have a 50-50 split in each fund. But the issue is that the contract is for a duration of 10 years. Cancelling the contract before the 10-year period expires requires all tax benefits received to be paid back to the tax authorities and there are some penalties attached.

51:14But since we just started the plan last year, the refund and penalty will not

51:19Paula Pant:be significant if we cancel now. My husband really wants us to keep the plan regardless of the fees since it's a contract and it forces us to invest always no matter the circumstances and we treat it as part of our monthly bills. But I'm thinking we can automate our investments in ETF directly and save up on the fees and also in Luxembourg if we keep the investments for more than six months we are not required to pay any capital gains tax too. We both have good investment habits because we have been able to save up to six months in emergency funds and we invested more than 30 ,000 euros in ETFs and across four individual stocks in three years.

51:59Paula Pant:So I believe all things being equal, we will be able to directly invest by ourselves. But I'm more concerned that instead of us continuing to invest in ETFs, we will be tempted to play around by investing in more individual companies, which can have a negative impact on our future goals. My question is, does it make sense to continue with the private pension contract or invest directly by ourselves in ETFs? Thank you so much for answering all our questions. this is a great question paula but we can't answer it yet because we have to give her a name she's anonymous i did some homework yes i did a little bit of homework i looked up famous people from luxembourg and there is a phenomenal chef named leah linster from luxembourg has had the gold michelin star has had a michelin star which is amazing since 1987 wow every year and to hang on to a Michelin star every year since 1987, because every year you have to get it again, is tough.

53:02Paula Pant:She's also the only woman ever to win gold at the, I'm going to pronounce this horribly, Bacouste Ore. She's the only woman to ever win gold there. And I think that she's cooking up a great question here. Oh, I see what she did there. So I think we should call her Leia. Leia, beautiful name. Leia, the thing that struck me at the end of your question. So, okay. Yes, the fee is high. 1.12 % is a high fee. But fundamentally, this is a question about behavior versus mathematics. And the thing that struck me was that you said that if you were to self-direct your investments, you might be tempted to invest in individual stocks.

53:46And that has higher risk, higher volatility, to use the technical term, higher standard deviation, meaning it zigzags a lot more. I think this is very much a question about knowing yourself, because if investing directly in ETFs yourself leads to one month saying, you know what, I don't want to go to an ETF. I'd like to take a flyer on an individual company. Then that ends up hurting you more than it helps. And to give an example of this, And I think I mentioned this on a previous episode within the last week or two. I have a friend. I think I said this either in the last episode or two episodes ago.

54:28You said you had a friend? I know. Yes, exactly. You opened your email and you have a friend? I know. Headlines. It's just somebody alerted the media.

54:40Paula Pant:Who was all invested, didn't have much investments, but had individual stocks. Yeah. And he's 48 years old. He has almost zero safe retirement. retirement and I tried to get him to go into index funds. And then I followed up with him a week later to see how it went. And he had bought into the SpaceX IPO. Oh my. And it was because he just couldn't resist the lure of individual stocks. And so I think there is a know yourself element because, Leah, if you end up buying into individual companies in a way that is outside of your plan, then that outcome is much worse. And actually, I want to make a statement here for the broader audience.

55:26It's one thing to have a plan that you're going to put 95 % of your assets into ETFs or index funds and then 5 % into individual companies. That's a plan, right? It's a different thing entirely to have a plan to put money into ETFs. And then at the last minute, be like, just kidding and put it into individual companies and stuff. So that's the differentiation. Yeah.

55:49Paula Pant:It's so annoying. I can't stand it when you go first and we agree so much. I wrote down mixed signals and I put knowing yourself versus knowing the fees. A lot of people know, focus on the fees and then wreck themselves because they're very smart at the fees and they're not smart at what am I going to actually do if I don't pay the fee? She says she's worried that if they don't switch, they're not in the best stuff. And he wants to stay because it's reliable and they built the habit, right? He recognizes, hey, we built the habit and we're going to keep doing this. And sometimes being locked in is some cool friction, right?

56:26Paula Pant:It actually is good. Locked in is not always bad because you keep doing the right thing. Then she says, well, we have good habits, but then turns around and says, but I'm worried that we might not keep the good habit. So I don't know. But what I do know is that just knowing how much knowing yourself matters more than the fees. And in this community, we worry so much about the fees. And yet I have seen people that have paid high fees to possibly the wrong person go far further than they would have had they've been left alone far further with the wrong person, the wrong fees. Could they have gone faster, better, more optimized?

57:07Paula Pant:A hundred percent, they could have done even better. But the fact that they did anything at all versus doing nothing, just won them the day, won them the day. So are fees important? Yeah, fees are important, but doing the... So So I would say this, Leah, that if you do remove yourself from the program, my question is, is what friction are you going to put between you and your money to make sure you keep doing the thing? And there's some great ideas. If you read James Clear's Atomic Habits, like the way people build these habits, you attach it to other things. You attach it to, you give yourself some good carrots to reach these goals at a time before you know it.

57:54Paula Pant:It's part of what you do every day. Yeah. So there's some cool ways to do it, but I don't know. Well, I would say even before habits. So the waterfall of priority is first automation and then habits. Sure. Because habits are our only behavioral things that you have to do for things that cannot be automated. Like brushing your teeth cannot be automated. So you have to - I get the feeling she's going to automate the money into a brokerage account easily. Like I get this feeling from her. She didn't say it, but when she goes, we have a good savings habit, we can do that. She'll set that up automatically because she knows that it's going to happen.

58:28Right.

58:29Paula Pant:I think her worry is once it's in that brokerage account, she takes it out of the index. Yeah. Yeah. The ETF. Yeah. Yeah. And that's the thing that struck me as well, because it's quite simple to automate money going into an ETF. But I think the question is the behavioral component of, will you then be tempted to touch it? I sometimes refer to that as un-automating the system. People sometimes set up these great automations and then un-automate their own systems. I've seen people really wreck their plan because they didn't have these checks and balances. The good news is I don't even remember these people's name.

59:09Paula Pant:Early in my career though, there was a couple and one thing that happened, And so the firm that I worked for and the timeframe that I worked, I started off in the age when there were very few fee-only planners. And I ended at a time when there was a collection of everything and I could charge people just a fee for advice and all nothing. I could do fees plus assets. I could do commissions. I could do all kinds of different things. But anyway, early in my career, it was all commissions where I was. So we were handed accounts when people would leave. They were these accounts. People wouldn't return calls to the current advisor, whatever.

59:46Paula Pant:And you could only serve so many people. So these advisors would unassign the account and then they'd hand them to new people. So I get these people's account. Well, for some reason, they answered the phone. And they had this growth fund, Paula, that they had had for many, many, many years. And they had forgotten about it. And the only reason why they answered my call was because I happened to say, you know, there's a lot of money in this fund. And the woman goes exactly how much money is in this fund? And I said, there's$90 ,000 in this fund. And she goes, well, way back in like 1983 or something, we put, you know, some ridiculous number, like four or 5 ,000 bucks in it.

1:00:27Paula Pant:And there's$90 ,000 here. Are you kidding me? And I go, yeah. She goes, that's amazing. So we get together, we do a full financial plan. They don't need the money. They have done really well without it. And now we put it to, to get an earlier retirement for them. They began calling me every other month because Paula, there were all of a sudden emergencies that came up. There were reasons why we had to touch it. They drained that$90 ,000 within three years. It was gone. It was 100 % gone. And it was just because they knew they had the money because we did the entire financial plan. I got to see their financial thing and they're like, yeah, nothing's going to happen again.

1:01:10Paula Pant:There's going to be nothing that comes up a couple of months later. Oh my goodness. You'll never believe it came up. You know why it came up? It came up because you knew you had this money and you couldn't keep your hand out of the cookie jar. Maybe not. Or maybe they were the most unlucky people ever and just became unlucky the second they knew they had$90 ,000 that they didn't know they had. Could be one or the other. I don't know. So I don't want to assume. However, you can hear my dripping sarcasm. Nice people, super nice people. But I think our brain does that. I think our brain goes, ooh, this money's available.

1:01:41Paula Pant:And when it's in the plan, the Luxembourg plan, it's not available. Right. There's a magic to having it not be unavailable. I don't know, Leah. I don't want to tell you what to do, but I think you guys have to really have it out about whether you are going to touch it or not. If you're not going to touch it, then move it. Well, I guess the way to conceptualize it then is to think of the fee as your quote-unquote insurance that guarantees that you don't mess with it. Yeah. That is like the payment that you make to secure that it's kept safe from natural human impulse. Yeah. A big part of money management, I think, is admitting that human nature is flawed and fallible and imperfect.

1:02:37Designing a financial plan that recognizes that to be human is to be imperfect and that recognizes that and sets up the safeguards accordingly. right? And if you have to pay a small fee that is like the I'm imperfect fee, right?

1:02:58Paula Pant:I love that name. Yeah. Yeah. Then I think if that fee leads to the outcome that you want, then it is well worth it. There are a few things that we don't know about this plan that I think we should bring up. And that is, and I'm only going to bring this up because this is the way that it is in the United States. If you decide to leave Luxembourg, I only say that because Luxembourg is a tiny country, right? If you leave Luxembourg for any reason, the average person changes jobs every what? 4.2 years, I think is still the number. So if you leave Luxembourg for whatever reason, what happens to that money?

1:03:36Paula Pant:Does it have to stay in Luxembourg? Is it easy to move? How does all that stuff work? I just want to know these. It almost goes back to Mike's question. Every plan has an Achilles heel. if you stay in it, like we just told you what we think the upside is staying in it. And that is the fee is the insurance. But besides that, what are the downsides to staying in it? Like if you build this up, like if you build up a 401k, you know, you're going to be paying a lot of tax later on. What are the issues with staying in this plan? And I don't, I don't know how this plan works. I don't know what the deal is with it.

1:04:11Paula Pant:So I think you want to look that up though. Hmm. Well, Leah, thank you for the question. And I love the discussion because this is the root of a lot of financial planning. It's, do you do the thing that on paper seems quote unquote, like more ideal, or do you do the thing that, that recognizes your own nature? Let me, can I just give one more example actually, as I'm thinking about this? It's so funny, Paul, because I just thought of an example too. So one other example, and I think a lot of people who are listening to this might be able to relate to this, the age old question of, do you keep your mortgage or do you pay off your mortgage?

1:04:53Particularly for anybody who has a mortgage with an interest rate that's less than 5%, right? So if you locked in an interest rate that was a three point something percent that you locked in in like 2019 or 2020, money. Do you keep the mortgage? Do you pay off the mortgage? And of course, mathematically, if you've got a 3.5 % mortgage interest rate, it makes sense to hold onto that mortgage, right? It makes sense to not pay it off and to put that money into investments. And so, Joe, we were just talking about this recently on your show. I made the decision, the mathematically unsound decision to pay off a, actually not just one, but multiple low interest mortgages.

1:05:39But I did that largely because I understand myself, I understand my own behavior and my own nature. And based on the other types of risk in my life, the inherent risk of being an entrepreneur, the inherent risk of running a company, as well as just based on like behaviorally, do I just want to deal with the added cash flow management or not? I made the decision to just simplify my life and reduce the amount of risk that I was exposed to by just paying off the mortgages, right? Does that mathematically make sense? No. Would I have a greater net worth if I had put that money in the year 2020 into index funds?

1:06:24Absolutely. I would have a much greater net worth today. Do I regret it? Nope, not at all. If I could invent a time machine and go back, I would have made exactly the same decision. Zero regrets.

1:06:37Paula Pant:And that's why you didn't invent the time machine because it would have been a waste of time. Exactly. Like why? Otherwise she would have invented the time machine. You know, it's funny just to take this fee idea to the extreme, the fee versus behavior. This is the thing that I saw a fair amount when I was a financial planner and talking to our friend OG about this. He still sees this from time to time, which is the person that goes, you know, I can't stand my company. I hate working for my company. I'm not giving those people, we'll say the word people, but change it. I'm not going to give those people any of my money, so I'm not putting any money in the 401k.

1:07:16Paula Pant:I'll show them. And then they end up Paula doing nothing to show the man that I'm not giving you anything. And OG has talked about what we were talking about this just a couple of weeks ago. He's like, you know, the owner of that company is not sitting around going, ah, I wish Joe would be putting money in the 401k because I'm not eating. It's going to be horrible. Like you're not hurting them at all. A, they don't run the 401k. They off it to somebody else, right? It's a benefit so they can do some cool tax things on their end. But yeah, you're just hurting yourself by not putting money into the plan.

1:08:00Paula Pant:And that's extreme. That's, Leah, not at all what you're talking about. But it just struck me that sometimes when people are like, I'm not paying those fees. You're like, the only person you're hurting is you. Hmm. Well, so Leah, thank you for the question. Best of luck with everything ahead. With Luxembourg. You kidding me? It looks beautiful. Every time I've seen, I've never been through Luxembourg, but Leah, it looks like you live in a gorgeous country. Absolutely. I'd love to visit someday. Joe, where can people find you if they'd like to know more? You know, what's interesting is there was a wild show that everybody's talking about on a different podcast.

1:08:41Paula Pant:I know that most people are talking about Afford Anything. And if they're not, they're talking about Stacking Benjamins. But there's a little show called Diary of a CEO. And they had on this gentleman who used to work for OpenAI, the company that makes ChatGPT. And his job was to do forecasting for them. And he quit. And they offered him$3 million to shut his mouth about what happened to OpenAI. And he said, no, Paula. so that he could say the things that he thinks. So what he says about AI and where he thinks it's headed isn't good. So we had a roundtable discussion where we asked you, what do you think of what happened on Diary of a CEO?

1:09:22Paula Pant:We asked OG. We asked our friend Jesse Kramer. And I love your opinions. You're not AI experts, but you guys have talked about money discussions. And let's say that this does come true. Let's say it doesn't come true. What do you do anyway? How do you frame this? How do you look at it? How do you live with the fear that this might happen? Like you guys answer a lot of great questions in that episode. So thank you. Yeah. So go find our, you don't even have to hear the diary of a CEO episode. We play the open. I really like Paula, your take, Jesse's and OG's take. It was a really interesting textured conversation.

1:09:58Yeah. So it was, it was a reaction episode. Yeah. Yeah. Yeah. Yeah. Roundtable reacts.

1:10:06Paula Pant:Yo, LOL about the fourth thing they said. Yeah. So that is on the Stacking Benjamins podcast, which you can find on your favorite podcast player. Thank you to all of you for being afforders. Thank you for being part of this community. We have a free fill outable workbook on the five pillars, financial psychology, increasing your income, investing, real estate, entrepreneurship. So if you want to, it's like a interactive fill in the blank. You can work through each of the five pillars and work through each of the five concepts. And it helps you put some thinking and some structure around your relationship with Double I Fire.

1:10:47You can download that. It's totally free at affordanything.com slash F-I-I-R-E. That's affordanything.com slash F-I-I-R-E. Thank you so much for being part of this community. I'm Paula Pan. I'm Joe Salciai. And we will meet you in the next episode. Oh, there's one thing we didn't say, which I promised Steve we would say. Steve. Steve. Hi, Steve. Steve has a webinar. Oh, yeah. Our esteemed audio editor, Steve, the guy who produces this sound effect.

1:11:26Steve is hosting a webinar on Tuesday, August 4th. It's at 3 p.m. Eastern, 12 p.m. Pacific. He's co-hosting it with Sean Mullaney, an advice-only financial planner, on how to legally avoid an expensive tax surprise. If you want to talk about the subsidy cliff, check out his webinar with Sean Mullaney on Tuesday, August 4th. We will have a link in the description and in the show notes on how you can register. Bam. You did it.

1:11:59Paula Pant:Thanks, everybody. Yeah, thank you. We do underestimate time. We overestimate assets and we underestimate time, which is this precious asset, non-renewable asset that we, we don't think enough about, I think in this community. The other thing that I would like to think about is, is the fact that I can't remember what I was going to say. This is a good YouTube moment right here. I'm still stuck on the fact that you don't answer your email. I love it.