A Recession is Imminent? Do This Now.

23:43And I think we all need to be very careful and mindful of what that means. And I don't mean to be the old man on the porch screaming at the sky, but it is one of those big revelations that I had being without a mobile phone for multiple days. and then just the sweetness of understanding the human condition a little bit better. I love that. That's awesome.

24:04Brian Preston:I liked it. Good tangent time and report from the masters. But I think that's why there's restaurants that are now having people put their phones in these bags. I know comedy clubs do it too. I think I might look for some of that stuff. So it sounds like what Brian said. Obviously, we have our Discord channel where we all get to interact and kind of communicate and become friends sort of digitally. But man, Brian's advocating for like an in-person thing, right? Maybe we should do like a money guy meetup or something like that. Where everybody has to put their phone away. Where everyone has to look at that.

24:35Brian Preston:And you have to meet and talk to other financial mutants. Well, I think there's a human. I've often said this. Like I go, I love music. And there is something about you go to a concert, even for an artist that you don't love. But if you see an artist perform in person, there is something in us that makes us connect with other humans. And I think that we need to make sure we're just not disrespecting that because there is something wired in us to connect with each other more than there is to fight with each other, which it seems like the digital stuff hasn't necessarily – there's a lot of efficiencies that have been brought to life, but it doesn't necessarily make the relationship side of things better in my eyes.

25:17Brian Preston:Will you do a chat for me? I'm just curious. Ask these folks, hey, if we did like a Moneyverse meetup, would you travel to come to that? Let's ask them that. Would you travel to come to that? I would love that. I would love that. I mean, if we're going to talk about meeting face-to-face, we might as well figure out if our people – let's do it. I like it. I like the idea. I'm not going to – come on. You know me. You get to hear these, you know, me pontificate on things in person. Why not? A tangent time breakout session. We'll see. All right. Well, for now, we've got Kyle S.'s question. It says, how do you navigate retirement planning when you can comfortably live below the 80 % of pre-retirement income you guys normally recommend?

26:01Brian Preston:I'm a bit of a debt crusader now and plan to live modestly. What do you think? Yeah. Early on, we're talking about horseshoes, right? We want you moving directionally in the right direction. We want you saving 25 % of your gross income to move directionally towards this financial independence, this number that you have. But as you're moving along your financial journey, rather than you just implementing general advice, hey, I generally should invest in a target retirement index fund, and I should generally be saving 25%, and I should generally be doing these steps in the financial order of operations.

26:34Brian Preston:At some point, we want you to graduate from sort of the general guidance to the very specific guidance. Hey, for me and my personal situation, this is the goal that I'm trying to achieve. I want to, at age 60, be able to live off of 60 % of my pre-retirement income, or I know that I'm going to have expenses of$4 ,000 a month that I need to be able to replace. And as you begin, as that picture begins to become more and more clear of the ultimate finish line that you're moving towards, the steps that you'll take and the tactics that you'll begin employing will become more unique and specialized to your situation.

27:10Brian Preston:So how do you navigate retirement planning when you can comfortably live below the 80 %? You should arrive at the realization that perhaps 80 % income replacement is not what's necessary for me. What I really need is a 60 % or 50 % income replacement. And based on my savings rate, because I have such a low standard of living or relative to my income, low standard of living, I'm going to be able to save very, very aggressively. And I might be able to get there much more quickly than the standard path. That's totally okay. You got to figure out and define what that is for yourself. Yeah. I mean, Kyle, what Bo's basically sharing is expenses.

27:45When you get within five years of retirement, use your actual expenses. That's what's going to be more of the driving force of your success of how good your nest egg or your financial assets you've built up. I do want to address something you said there with the second part of this is a bit of a debt crusader now and plan to live modestly. What I don't know, Collins, you didn't put your age in this. So maybe you can share that with us. Because what I worry about is somebody who's in their 20s, 30s, and even early 40s before 45 years of age was when your wealth multiplier, if you don't know what that is, go to moneyguy.com slash resources.

28:20You can see what every dollar in your army of dollar bills could actually become if you invest it. Because I worry a lot of people when they do the debt crusading before 45 is you need to build your army of dollar bills up to kind of be there for you to actually work hard for you in retirement versus you just counting on your modest lifestyle to get through. And when I also worry about for 20 something, 30 somethings, when they're basing their retirement off of how modest they live now, I'm like, you still have a lot of life that's still going to happen. You know, There's a lot of people that if you don't think kids are going to blow up what's going on when you start planning for what their life looks like, all their activities, even college funding and those type of things for the future, you're misleading yourself.

29:06Because kids will definitely have a big impact on what your household expenses are. So you just need to be further beyond that so you can fully understand how am I going to have all my debt paid off once I'm 50 and beyond? How am I going to make sure that I know what my living expenses are? How do I make sure I get full launch on my children, getting them out of the house? All those things are going to help shape. But the driving factor you need to focus on is when you are five years from retirement, make sure you're using actual expenses to now start running all the Monte Carlo simulations and the risk factors and seeing how stress test this plan is versus just doing the rules of thumb.

29:45That's why the safe withdrawal rates and all those things are great for napkin planning. You need a real plan with real stress tests when it's actually going to be on the line and you have to live off this money. Love that.

29:57Brian Preston:K-pop Demon Hunter's Saja Boys breakfast meal and Huntrix meal have just dropped at McDonald's. They're calling this a battle for the fans. What do you say to that, Rumi? It's not a battle. So glad the Saja Boys could take breakfast and give our meal the rest of the day. It is an honor to share. No, it's our honor. It is our larger honor. No, really. Stop. You can really feel the respect in this battle. Pick a meal to pick a side. And participate in McDonald's while supplies last. Thanks, Kyle S., for the question. If you'd like a Money Guy Tumblr, just email winner at moneyguy.com. It's time to get your rapid-fire questions in the live stream chat.

30:37Brian Preston:Just put RF at the beginning of your question, and we will add it to our Rapid Fire segment pool of questions. We will be throwing in a fun twist today, along with the normal rules that Bo and Brian cannot say it depends in their Rapid Fire answers. So go ahead and get those questions in, and then in the meantime, we will ask our next long-form question. I'm ready for the twist to be that it depends is a totally acceptable answer. We can say that. That's fine. That's what I was supposed to say. I still, we had a great brainstorm. I don't think I'm going to say it publicly what it is. I don't know why we're not doing that.

31:10Where there ought to be a hat in the, maybe a master's hat. Should be here right now for us to do some things.

31:17Brian Preston:Did you get us one? I can probably find one at the house. All right. Next question is from Now Eman. It says, hey guys, after following you for two, after following your 23-8 car buying advice, how long do you recommend keeping the car to make owning it worthwhile? Is it seven years like home buying or something else? No. Look, I don't mind. Now, look. I just said look a lot. During my wealth accumulation and building years, so I would say sub 45, I was driving cars for over a decade. Now, look, I don't resemble that now. I know I've given up my tightwired car in a lot of ways, but it hasn't been to my detriment because there was a time and a place.

32:03I mean, you and I traded a car, that Lexus that I had. Back and forth a few times. I mean, I drove that car for 12, 13 years. And my wife's cars were always driven for a decade. You drive them as long as you feel safe in them. Yep. That's what I've always done. Now, there will be issues. Like my wife's Acura. We ended up having to give it away. She got a bad oil change where they stripped out the bolt that holds the oil and it had a leak and then the oil ran too low and then that car never ran the same it started burning oil and doing other things and i felt like i was like crud if we'd just if this thing had not had the issue probably been able to run this thing for another two years but it just got to where it wasn't safe anymore for my wife when it started burning oil and um so that's what i always based it off of but that lexus until i got it to you and you you you tore the engine all part.

32:54That car would have ran for another 30 years, I think.

32:57Brian Preston:It had a few drips. If you don't realize a car that's 12 or 13 years old is going to have a few drips probably coming out of it. It's okay. When I sold it back to you, it was a peach. I got it. Put a bunch of money into it, made it a lot better, then sold it back to you. It was awesome. This is not science, but me and Brian make this joke all the time when someone ever tells us, oh, hey, I just finished paying off my car. We're like, man, it sure does drive better, doesn't it? Because it always drives better when it's paid off. If you did 23, eight, meaning you financed it for three years or 36 months at a minimum, and look, there's no science to this.

33:30Brian Preston:You can write this in pencil at a minimum. I think you ought to drive it for as long paid off as it took you to pay it off. So if you're going to buy it and pay it off in three years at a minimum, I want you to drive it for three years with no car payment. Now, in reality, I want you to go farther than even six years total. But if you're buying used cars, I get it. But if you're buying a relatively new car and you can get seven, eight, 10 years out of it, I think that is awesome. And your future financial self will likely thank you for it. My wife right now desperately wants to get into a new car.

34:06Brian Preston:Like she wants a new car. I've heard some of those conversations. Like literally she looks, yeah, she, she's, she wants to be in a new car. But I'm like, Hey babe, there's a few reasons. One, the car that we're in right now is only like four years old, right? So it's still relatively, you know, relatively new. And at this stage of life, any new car that we get, any nice car, the kids are not at the age where they like take care of it and do the right thing. So some of it is like, hey, yeah, if you're in the messy middle and you have a car that has a bunch of chicken nuggets in it, maybe drive that car for a little bit longer so you can save future chicken nugget mishaps in the new car.

34:42The big thing to know is car Our transactions work against your wealth building. So the fewer transactions you can have while you're in that accumulation or make wealth phase, the better for your long-term success. Yep. Love that.

34:56Brian Preston:That's fantastic. Now, Eamon, if you would like a MoneyGuy Tumblr, just email winner at moneyguy.com. Can I throw one thing out there? You can. This part's for free. If you're someone who trades cars often, like I get a new car every three years, every four years, whatever, something like that. you're not at least driving for five years, you should at least entertain the idea of looking at leases, right? Because if you are, if the number of transactions is what is kind of like working against you and you're buying a car and buying a car and buying a car, there's a really good chance you're just paying for depreciation, paying for depreciation, paying for depreciation.

35:30Brian Preston:You might be one of those people that are better off leasing. So you at least ought to do the mathematics around that to make sure. I think that ought to be a step eight though. Oh, of course. I don't think if you're flipping cars before you're at step eight, you really are probably working against that make wealth phase first. Well, that's why somebody was being funny, like, oh, if I pay cash, I mean I'll have to drive it for a year. No, if you only drive your car for a year, you're probably doing it wrong. It's back to the key point. The lowest common denominator is vehicles. Now, look, somebody's going to point out, I got a 67 Mustang.

36:03I got a 57. I'm like, no, those are different types of car. the 99 % of cars that people are driving out there are working against their wealth building.

36:16Brian Preston:I thought I was going to sneeze. I was like, oh, this time is terrible. I thought you were dabbing what a good answer that was. I thought she got emotional. I was just like, oh, no, I'm going to sneeze. I'm going to sneeze. Did you just do another dab? She was the one that did it. I didn't dab. You did. You went to go protect yourself. That's two dabs in 2026. It's a good year for Brian Preston this year. I like this version of Brian Preston. All right. With that, it is time for our rapid fire segment. Our it does not depend rapid fire segment where Brian and Bo have a combined answer in 30 seconds or less to your burning questions.

36:49Brian Preston:And they cannot say the words. It depends. The added twist is that if you can work in the name of a fruit or vegetable into your answer, you get 10 points. And whoever has the most points at the end wins. Now, you cannot just say it's got to be organically. Right. Yeah, you can't just name fruits and vegetables. Oh, y 'all do it how you want to do it. I'm going to do it the way I want to do it. If you just start throwing out random vegetables for no reason, I will say. Yummy, yummy, yummy fruit salad. What? I just threw some wiggles in there. Wow. All right. Cool. All right. Okay, with that, we are going to dive in.

37:32Brian Preston:We're going to get 30 seconds on the clock and get to our first question. You guys ready? Yes, ma 'am. All right. It says, I'm getting married in a month. Do y 'all have any marriage advice, financial or non-financial? You pick. I would figure out which chores, because the first two years of marriage were the hardest for me, is figure out what chores y 'all are going to be doing around the house and figure out which ones you hate. Maybe outsource some or at least have clear roles on how y 'all are going to integrate everything. Yeah, I think communication is key. In the chores, some of you might like apples, some of you might like bananas.

38:05Brian Preston:is you got to make sure you understand which one is which and understand what the other person values. If you can do that early on in the marriage, you're likely going to set yourself up for long-term success. 20 points to Bo Hanson, and that's time. All right, next question. My brain just doesn't do it. I'm struggling. I feel like this is what Bo feels like in the ocean is because I am just trying to get an answer out. He had to take you down. Okay, question number two is, what is the benefit of traditional accounts for those who have pensions? Traditional accounts, meaning like pre-tax accounts?

38:39Brian Preston:I believe so. Like traditional retirement accounts. Well, even if you have a pension, but you're someone who's in a higher income situation, those pre-tax accounts will likely provide you with a very valuable current year tax benefit. I like the fact that you can build Roth assets too, which grow completely tax-free, and nothing gets you banana happy like a Roth. I can't even say it. It's so dumb. I'm so horrible at this. Nothing gets you banana happy? I really like bananas. Have you never seen a bingon? You know what? Ten points to Brian. A for effort. Revy loves me. This thing is so rude. You're still winning, Bo.

39:21Brian Preston:Okay. Next question I'm really looking forward to. What counts as a luxury car? Is it a dollar amount, a brand, a percentage of something? Well, look, it can't be a lemon. You want to make sure that you're getting a car that actually you can drive for a long time. You don't want to get one of these luxury cars that like is in the shop all the time. So when you think about luxury brands, I'm thinking like Mercedes, BMW, those types of things. No, you want your car to be a peach. That's the big thing. So it needs to really reflect how you feel about vehicles and your financial goals. See, this is the problem.

40:00I was so focused on the peach that I can't even answer the daggum question.

40:05Brian Preston:That was so good, too. All right. Ten points for each of you. We're going to come back to this one. Luxury brands. We will come back to it. That's one the people need to know. All right. Question four. When does step seven end and step eight begin? Yeah. Step seven is you're basically thinking how you, instead of just accumulating for the sake of accumulating, you think how you're actually going to use the money. So once you've kind of done the efforts of actually looking at your three buckets, pre-tax, after-tax, and tax-free, you can go... I'm not even going to do it. Go ahead, Bo. One through six is the main course.

40:42Brian Preston:And even getting into seven, that's the main course. Once you get into eight, once you get to 25%, you graduate pass, now we're adding the dessert. We're adding that peach pie, the apple pie, the cobbler. We're adding those pieces that make financial life so much happier. But you've got to do the base stuff first. The man is good. I mean, he is so daggum good at this. That was good at 20 more points to Bo. If you ever want to know proof of whose brain works faster, it is Bo Hansen. But you know, this isn't a game of speed. You know what I mean? It's a game of quality. That's right. And if we're going for quality over time, my money's on you.

41:14Brian Preston:True that. Next question. Been doing this for 20 years, you have. 20 years? Oh, podcast. Podcast, yeah. You're the OG. All right, next question. What was your favorite hole in Augusta and why? did somebody really ask that yeah hole 10 my father-in-law is the reason we even get to go to the masters and um he always the the three times i got to go with him he took us to hole 10 we'd set up on hole 10 it's got a false front it's fascinating and um it just makes me so kiwi happy

41:48Brian Preston:i was fortunate enough to get to go to the masters a few years ago i love setting up on like getting to go see Amen Corner. I loved being on we walked to 18 for a little bit and watched people come in and finish the round. And time. That made me kiwi happy. Brian, 10 points for you. All right. Next question. Is it best to take a lump sum or monthly pension payments and why? Look, you want to make sure you don't eggplant this thing up. So you really got to you got to you got to make sure you do the math. I mean, it really comes down it is a math because I've done this so many times that sometimes the lump sum is best and sometimes the pension.

42:27So you have to actually do the math on the situation. It's not a one size fits all.

42:32Brian Preston:It's not always the same either. One person may determine that lump sum made more sense. Another person might determine that the annuitized option made more sense. So like you said, you have to do the math. All right, 10 points to Brian. Next question. If I'm saving in a Roth 401k, Is it okay to use my Roth IRA for a first-time home purchase?

42:57It's less than ideal for me.

42:58Brian Preston:No, watermelon. That does not count. All right, is that all you have to say? You have 24 seconds. I want to squash that because it works against your tax-free growth. You need this money in retirement. So that's why we give you the 3 % down payment to work around this so you don't have to go use these type of really growing assets. Hats off to you, my friend. Ten points. A slow learner. You guys are now tied up on the fruits and veggies game, and we only have a few more questions left, so do with that what you will. If only you didn't have all that horsepower going to the growing the stash. I know, right?

43:37I could use that right now.

43:38Brian Preston:All right, next question. 29-year-old going to law school next year. Should I pay for it out of my investment account? Or take out a loan? And why? Now see, we need more. Brian just sat back. He was like, I refuse to answer this. No, it's just I need more information. If you have a large investment account, you could likely use that to pay for education, but there's a real opportunity cost to that. If you're going to borrow, you want to see what the interest rates are and that sort of thing, taking out a loan. you have to measure the pros and cons of each. I would typically say pay for it. We got to come back to that one.

44:23Brian Preston:All right. Next question. What is your suggestion for combining assets after marriage? I really do think it's bananas to go separate accounts. I mean, but I'm biased. I mean, I've been married almost 30 years. I've been married almost 30 years. And I don't know what that even was. But did you say something back? No, actually. Never mind. I've been married almost 30 years and it's just hard when to do things separately because power you want to take the power out of the money I think combining stuff at the front end makes a ton of sense great answers 10 points to Brian he's crushing me he's crushing you alright last one if we all vote for it would Brian grow a mustache a matching mustache to Bo before we agreed to that I would need to check with my wife because if my wife doesn't like mustaches, I'm not going to grow a mustache.

45:20Brian Preston:Aren't you sure? I was trying to come up with one. That wasn't bad. That wasn't bad. Should I give it to him? What does the room think? I think you 100 % should. Ken says yes. I think that Mrs. Preston would say, but yeah, absolutely. There is no way my wife is going to agree to a mustache. All right. With that last 10 points to Bo, we have ended the It Does Not Depend rapid fire with a tie. of 60 to 60. Look at that. Honestly, well done. You had a few drop-ins in there that I was very proud of. That makes me mango happy. I think I had the... Kiwi happy. Honestly, if I took out Brian's two fruit happy ones, then maybe it would be different.

46:00Brian Preston:We drink carbonated beverages. I've been doing this for 20 years, as y 'all said. I've never had where that created where I almost belched on there. Is that what that was? That's what that was. I was so horrified. That would have been so good. I was mortified by it. That's the reaction. I shouldn't be so confessional, but I wanted y 'all to know what happened. Literally, we had no idea. 20 years. I've never had that happen. It is now time for our Maybe It Does Depend segment where you get to go back to any questions where you didn't get a chance to say all that you needed to say. The first one I had flagged was question three about luxury cars.

46:36Brian Preston:What is luxury car? There's some nuance here. Obviously, it's the fancy brands you might be thinking, right? It's BMWs. It's Mercedes. It's those types of automobiles. But I would also argue, even if you're buying a normal brand, you're buying Honda, you're buying a Toyota, if you're going out and buying a Land Cruiser, that's still a luxury automobile. If you're going out and buying the highest end, top of the line. So, yeah, it's a little bit subjective because some brands have luxury versions of their cars and non-luxury versions. And some brands only have luxury versions and no non-luxury.

47:18Brian Preston:So you have to be realistic about what you're buying because what may be luxury to you may not be luxury to someone else. But you have to make sure you're doing that well so you don't blow up your finances. Remember the umbrella that sits on top of all this is the fewer amount of car transactions you can do while you're in the accumulation years, the better you're going to be. and the lower the footprint of each one of those transactions is better. That's why the first probably three cars I drove after I graduated, well, all through, were all used cars. And then when I transitioned to new cars, they were not luxury brands.

47:51And when I say luxury brands, I mean, we can all say the BMWs, the Mercedes. I used to say Tesla. No, I will tell you, I think that the threes and whys are some of the most affordable cars out there. So threes and whys, not luxury. Well, they don't even make the X's and S's anymore. Those are going away. So now pretty much you just have, I mean, and if you don't think that, go look down your street. I guarantee you that people are driving Model 3s and Ys like you do Honda Accords and Toyota Camrys. So I don't think they're luxury cars anymore. But I definitely think minimize the automobile transaction as much as you possibly can while you're in the accumulation and wealth building years.

48:30I love that.

48:30Brian Preston:The next one I had was about the law school one. Yes, because Brian didn't even answer. Will you reread that one to me? Because there's some stuff in there. Yeah, I know there's truly a lot of factors here. 29 years old, going to law school next year. Should he pay for it out of his investment account? So apparently he's got some investments. Or take out a loan. Here's the things that hit me immediately. I don't know the account structure because it's all after-tax assets. Some of this Roth assets or traditional assets. I didn't know that. And then I didn't know what are they offering on student loans is because, you know, student loans is a 7 % interest rate.

49:07Is this, you know, 4 % interest rate? I needed to know just a few more variables. But I mean, but I would prefer, obviously, if you have resources, if you can pay it off. But here's the thing. It also goes in, there's a third tangent here is that I want you to be thinking about the cost of the education in general, too. is I don't want you just because you have resources that you're like, well, let's just go pay and go to school here or do this. I mean, there's so many things that go into the answer, like where you live on campus, how you're building up the things, because that's what a lot of people take student loans, even for lifestyle.

49:43And that drives me crazy as well. So I'd want to have a discussion about what goes into education to give you the best result, because what's the best result. Get out of college and get into your professional life as cheaply as possible with the least amount of hangover from debt so that you can go live your best financial life.

50:02Brian Preston:I'd even want to know, and this is what you said, but how much is lost? Are you talking about a $20 ,000 law school education or$200 ,000 law school education? Because$20 ,000 and you have a big portfolio and you can pay cash, great. If you have to liquidate everything and go pay cash, that$200 ,000 education? One, I want you to assess why am I going to do the$200 ,000? Is there a justifiable reason to do that? And then two, is the opportunity cost of taking all of those dollars off of the playing field actually worth it? So there's a lot of deep nuance to that one. It's almost like finances personal.

50:39Brian Preston:Yeah, that is not a rapid-fire question. And yet it was. And yet Reby is the keeper of the keys. I mean, Bo, you didn't really get to finish your answer on your favorite hole in Augusta. Did you say all you needed to say? Oh, no, it was just cool. So when I went to the Masters, I got to go with Brian, which was awesome. And it was cool getting to see just because I've never experienced anything like that. It was just a wild, unbelievable experience. I wish I could remember specifically what hole was my favorite. I just remember seeing the holes that I've watched on TV so much. You know what I mean?

51:11Brian Preston:So just kind of cool getting to see it in real life. Tin is special to me. It really is because it makes me, I feel like when I'm out there, Masters does, I think that it really is. Like I said, it was a very big experience thinking about the social motor and the way they've crafted that thing. It does make you feel like you're connected to something. And being at Holton, because like I said, my father-in-law has been deceased for a number of years now, and knowing how special that hole was for him, it kind of gives you some. Some nostalgia. The hair on your arms kind of stands up a little bit and gives you the tingles, thinking about the legacy of having those memories and the blossoming memories of that I go back and hole 10s still look the same.

51:54They're going to put the pin on day two at the front of the false front there, and the golfers are going to hit up there, and it's going to be as slick as a tabletop, and it's going to fall off for some of them. It's fascinating, and it's just cool.

52:07Brian Preston:So fun. I figured you would have a good answer for that, and you did not disappoint. I appreciate that. All right. Fun rapid fire segment, guys. Let's do a couple more long form questions to wrap out this Ask Money Guy show. Next one is from Batman Foo Rever. It says, I live in a state where my employer must pay out my vacation days if I leave my job for any reason. Can I factor my accrued PTO into my emergency fund? I don't think that goes more into the retirement plan than it does into the PTO. because I know a lot of my education clients, we did use their excess retirement to kind of work on building the retirement plan to leave early.

52:49Brian Preston:It's not a fruit or vegetable, which you can't count those eggs till they hatch. That's a thing that could happen. That's a thing that likely could come your way. I don't think you can count it towards your emergency fund or even your retirement plan until that manifests because one of the things the emergency fund is there for are for emergencies. HVACs, losing your job could be one of those. But what if you don't leave your job? What if your emergency is a medical thing or an HVAC or something? It's not like you get that PTO paid out. You said you have to leave the job. Well, that's one emergency that it would be there for.

53:22Brian Preston:There's a plethora of other emergencies that could come your way. So I don't think you can count it towards that. I do think you can factor it into your accounting on when you retire and when you go into financial independence, especially if you're banking it. but I'm probably not listing that as a line item on my net worth statement every year. Because company policy could change. They may change the policy at some point in the future. Say, hey, we used to do this thing, but now we don't do that thing anymore. And so I'd be careful counting money that hasn't shown up and isn't a verifiable source of funds like a pension or something like that.

53:56And don't be trying to cut the corner off of emergency reserves. Financial meetings do this stuff all the time. We do mental accounting to figure out how we can get our cash reserves to be as small as possible because we think cash is trash or other things. No, this is going to be your layer of protection. Think about it as like a bulletproof vest in this crazy world we live in. The more margin and protection you can give yourself, the more protection you can be from desperate decisions. And I often have said in step eight, an extra healthy cash reserves. It also turns into, because my cash reserves has expanded over the years, and that's what's allowed me to buy assets when everybody else is panicking and freaking out when it comes to real estate and other things.

54:36All of a sudden, cash reserves can become a superpower when everybody else is without that very powerful resource. Good stuff.

54:45Brian Preston:I thought that was quite the leap to get from PTO to emergency fund. Did it make you twitch a little bit, see on the Batman, because you remember when you had to dress up as Robin? No, Brian, it didn't. I kind of blocked that out. Thanks for bringing back those memories. We just had a magical moment talking about the Masters, and you're going to bring that up. But, Bo, bring it back. I want to give you a compliment because I do pick on you a lot, but I want to give you a compliment because I bought you a large shirt last year too. This year, they don't fit your arms anymore. My goodness. I mean, when I walked in with you wearing this, I was like, Bo, do I need to get you an extra large just for your biceps?

55:19I mean, it's kind of crazy.

55:21Brian Preston:Oh, my goodness. I don't know what the diet is. Just like with investing, it's about consistency in time, consistency in time, consistency in time. Same thing when you go to the gym. You wake up, you go to the gym, good things happen. Y 'all should know, Bo gets up at like 4.15? 4.13 every morning. I don't know when you sleep, but he is at the gym with all these other bod men. They're just doing this thing. Me and the bod men. It's awesome. Great. I also need to give BatmanFooRever a Tumblr if he would like one. Since we answered his question, just email winner at moneyguy.com. Wanted to make sure you got your chance, BatmanFooRever.

56:01Brian Preston:All right, let's do another question. Blair T., what are you looking for? He's just looking around. I gave something on the set to be put on the set, and I didn't look. I came in so sideways for the show today, I didn't even look to see it, if it was there. It's a secret. It is there. You can't see it. in Brian's shot. There's an Easter egg. All right. Blair T. asks, for the three-bucket strategy, is the goal to be even? I'm 25 and can contribute more to my Roth 401k beyond 25%, but don't want to be retirement-rich and individual brokerage poor. Roth has 53k, and individual is 34k, I believe. That means two different accounts.

56:45Brian Preston:Would you agree with that? Yes. Yes. Being retirement rich is not necessarily a bad thing if it's all Roth and you're going to retire after 59 and a half, because then the Roth dollars are great. Most people, however, find themselves in a situation where they get an employer match. So that likely is going to go in the pre-tax bucket. And then most people want to leave the workforce, especially at higher savings rates before 59 and a half, or at least have some sort of flexibility to be able to do that. And so that's where the after-tax bucket comes in. A lot of people think three buckets, it should be a third, a third, a third, but the way that we're able to accumulate obviously doesn't allow us to arrive in that place.

57:26Brian Preston:I mean, you can think about just in terms of limits, like IRA limits are 7 ,500, but 401k limits are 24 ,500. And so it's a difficult thing to get them in nice, even buckets. The ideal mix is unique and specialized to you, depending on what you're want to do with it, what you want to do with the dollars and when you want to be able to utilize. Look, the people's structure, their tax structure is like fingerprints. I mean, they really are different for everybody that comes in. But I know that just from the financial order of operations, there's a good chance when you get through step six, you're going to be weighted towards retirement assets.

58:04And there's a good reason for that. If your employer is offering you dollar for dollar match, you got to get in there and get that. Because these are amplifiers that are going to help make your journey to building wealth that much faster. If you're saving your young person and your low tax rate, you're crazy if you're not taking advantage of the tax-free growth opportunity of those Roth assets. That's why we built in step seven, though, is because that's when you say, whoa, I've just come through all this tax-favored or free money that my employer's given. Now let's think about how we're going to use this, because I don't want to be 42 years old and not paying cash for vehicles because all my money, I'm a millionaire in my retirement accounts.

58:41But that's what step seven is going to help you look at is you're going to say, okay, maybe now I'm at the phase where let's start figuring out how we get some after-tax assets so that I can get into real estate or I can pay cash for my vehicles or I can retire at 55 versus 65. That's why I love having step seven. It's kind of a take a deep breath, think about how we're going to use this money, and now let's move on to step eight, which is abundance goals and prepaid expenses. That's why this thing really is your all-terrain vehicle. We've been managing money for collectively between the two of us 50 years.

59:17We've built this into the system so that it works. And we haven't been able to break it. I mean, that's what I'm very proud of what we've created because it really does help you live your best financial life.

59:30Brian Preston:Good stuff. Blair, if you would like a MoneyGuy Tumblr, just email winner at moneyguy.com and we'd love to send you one. this episode of Ask the Money Guy has made me Kiwi happy. I'll tell you what. So thank you for joining us today. We really appreciate it. We make this content for you. And remember, go to moneyguy.com slash resources for a huge library of free stuff that is all based on the topics we share here on the show. It's going to give you a little bit of a deeper dive, different calculators, different downloads that will help you continue to figure out what's going on in your personal finance situation and hopefully help you feel just that much more confident about your path forward.

1:00:08Brian Preston:That's what it's all about. So thanks for joining us, and be sure to check out moneyguy.com. Guys, I mean, I've gone on some tangents about what I got to experience last week at Augusta National with the Masters, and I appreciate y 'all just hanging in there with me on that, but it is more highlighting of the fact that money is only a tool. And if you're not doing things in your life to build up that social motor, to also make blossoming memories with your friends, family, and have connections, you're missing out. That's why we try to teach you so that you can understand, don't just be building up money for the sake of having money.

1:00:41Let's make it purposeful. Let's make it where it actually reflects who you are so you can live your best life and own your time that much sooner. I'm your host, Brian. Joined by Mr. Bo, Reby, and the rest of the content team, Money Guy team, out.

1:00:54Brian Preston:The Money Guy Show is hosted by Brian Preston and Bo Hanson. Brian and Bo are partners with Abound Wealth Management. Abound Wealth Management is a registered investment advisory firm regulated by the Securities and Exchange Commission in accordance and compliance with the securities, laws, and regulations. Abound Wealth Management does not render or offer to render personalized investment or tax advice through The Money Guy Show. The information provided is for informational purposes only, may not be suitable for all investors, and does not constitute financial, tax, investment, or legal advice.

1:01:26Brian Preston:All investments involve a degree of risk, including the risk of loss.