Are You Actually Wealthy? Here’s How to Know.

20:58If you're in your 20s and 30s and you want to pay off a 2.5%, 3 % mortgage, I don't love it. but when you've done everything else so well that you're in step eight, it's your money. Do what makes you happy because you've paid respect to the other parts of the system. So doing it for peace of mind or whatever the goal is, is A-OK at that point because you made it through the financial order of operations. But if it's before that and you're like leaving money on the table with your 401k or you're not funding Roth IRAs, we need to work on that behavioral side of things.

21:30Brian Preston:A really quick exercise that I would do, and again, the reason why we have these tools out there available. If you go out to moneyguy.com slash resources, check out a wealth multiplier. If you and your husband are both 35, say, hey, let's just think about this. All right, we're at 18 months. Let's assume that maybe we need a 12-month emergency reserve because of a super conservative risk tolerance. If we just took that six months of additional emergency reserves we had and we put that into the market to go work for us, do you recognize our money multiplier at 35 is? 12.69. Is 12.69. Every one of those dollars that we could put to work could turn into$12.69 by the time we retire.

22:10Brian Preston:And it's going to be a big number. That's the opportunity cost you're walking away from. So I think perhaps just education would be a great way to start that conversation. Is it a Tumblr day? It is. I'm glad you can get the words out of my mouth. Quark, quark, quark, quark, quark. Since we answered your question on the show, you get a Tumblr if you'd like one. Just email winner at moneyguy.com. By the way, if y 'all are wondering what that sounds, because I have to remember, we have new audience members coming in every week. As a matter of fact, we had a React go out yesterday, and I thought it was hilarious.

22:42Somebody said, I accidentally clicked on the link, and then I finished the entire episode. Thank you for teaching financial literacy. I'm like another happy customer. We give out Tumblrs on Q &A days where this thing literally, as you see, I'm using it as a tumbler. Bo is actually, it's a koozie, I should say. Bo is using his as a tumbler.

23:02Brian Preston:I've got mine today, too. This thing has served multiple goals. So that's why I say it's a transformer and can change your life. By the way, mustache, just like Bo can't grow one, I can't grow one. You have to buy your own fake mustache just like Bo's. Love it. By the way, that does prove. Do you remember? I said, I'm never mean to Bo. And then you're like every day. Literally every single day. It's all right, though. All right, we're going to go to another question before we get your reaction to some of the announcement guesses. If it doesn't kill you, it makes you stronger. Buddy, you've been strengthening me for the last 20 years now.

23:38Brian Preston:Heck of a coach. If I wasn't picking on you, I didn't care about you anymore. That's what my coach used to tell me. Back in the day when I was learning how to swim, because I'm a pretty good swimmer, if you would have taught me, I bet you would have just thrown him in kind. Ah, throw him in there. He'll swim. Hey, let the record show, when he almost drowned in the ocean, I was positioned to save him. He did. He did save you. No, no, no, no, no. He was there had I needed to be saved. I positioned myself to his shoulder, behind him, so he couldn't drown me, and I could throw him on my shoulder. I mean, on my hip.

24:08Brian Preston:I was a much smaller guy back then, so he'd have had no problem getting me in. Oh, man. If this never gets resolved, let us know if you'll keep weighing in. By the way, because of all this conversation, we're going to go on another vacation together. Because we're like, man, we went on one couple's trip together. And look at all these stories that came out of it. If we did this again, it's just fruitful for the show. Can't wait. That's hilarious. All right, we're going to go to foolish parents question next. My wife and I are 27 years old with a baby arriving in weeks. Oh, congratulations. First of all, we are working our way through the foo.

24:44Brian Preston:What counts as high interest debt? We have a land loan at 7 % rate with a balance of 127K. What do you think? Give them some guidance. All right. Let's see how good our editing production team can be. We do have a little metric. It's a slide that we share all the time about what counts as high interest debt. How do I determine that? And so let's start with the easy stuff first. Credit cards, no matter the interest rate, they're high interest. Even if you have a 0 % credit card, we would argue that using a credit card is totally fine, but carrying a credit card balance, no matter the interest rate, is never okay.

25:23Brian Preston:So credit cards are always high interest debt. Well, then you step down to something like auto loans. Oh, look at this. Auto loans, we believe if you're going to go borrow money, you should fall into the 23-8 rule of thumb. So 20 % down, don't finance for any more than three years or 36 months, and your payment can't exceed 8 % of your monthly gross income. Well, if you're inside of the 23-8 framework, it's okay if we go through a season where car interest rates are higher. So if you're in your 20s, even if you have an 8 % or 9 % car loan, which is not ideal, if it's inside of 23-8, we would say that's okay.

25:58In your 30s, 9%, and then in your 40s, down to 8%.

26:01Brian Preston:And then student loans, same sort of metrics. If you're in your 20s and you have student loans below 6%, probably not high interest, 30s, 5%, so on and so forth. This one is really interesting though, because it's a land loan, which I'm assuming is some raw undeveloped land. They're probably going to build on in the future. That's going to be part of their homestead. That's the context we need is because there's two paths this could go on. If this is investment, like you own raw land for investment, I do kind of get that into potentially the higher interest category because of, you could look at that column for student loans and I would look at that and be like, 7 % is pretty high.

26:38So that likely could, with an asterisk on it, qualify step three. However, if this is land, exactly what Bo said, you purchased this for the thought that you were going to build on it and then turn this into your primary residence. Okay, now we have an issue because I look at this as an issue is that you could build a house on this land and then refinance into a much lower interest rate, or at least lower, like 6%, 5.5%, depending upon where markets are at the time that you close on the actual refinanced house. And if that's the case, I don't consider this high interest. It's just like mortgages.

27:16We always are very careful to say, if you have like a 7.5 % mortgage, I don't necessarily treat that immediately as high interest, because you always have the ability to refinance. Markets change constantly. There's deductibility of the interest, which lowers it down to a degree. So there are some features if this is part of something that's going to be your primary residence, that gets the asterisk. But if it's an investment, I would consider this high interest debt.

27:43Brian Preston:All right, let me give you some context. This is what I love about a live chat. Foolish let us know. We plan to build on land in four to five years and we placed a 15 % down payment. The total cost of land and our current unrelated mortgage is 25 % of gross income. We make about 150. We currently have 200 ,000 invested. So one thing you've immediately let me know there is, and the land is on a 15-year term, you have this other home, this other mortgage that you're paying. But I imagine once you build on this property and you build your new home, you're probably going to sell your old home. Well, assuming that's the case, I'm going to assume that all the equity or a lot of the equity in that is then going to come over to this new home that you're building.

28:25Brian Preston:So given that that's the case, and given the 7 % is likely a short-term thing, I don't know that I would consider that high interest in this situation and begin aggressively paying it down because there's a really good chance when you sell your other house, it will then extinguish this land loan that you have. And it sounds like they have a very healthy income, so they're hopefully able, and I heard the investments is$200 ,000. So yes, it's less than ideal that you have a 7 % interest rate on this, but I don't want you not funding a Roth IRA. I don't want you missing out on 401k contributions because you have this moment in time thing where over the next two to three, four years, as you said, this will be your forever home that you refinance into.

29:08So I think it's just an uncomfortable nuisance that you have to kind of make it through in this season of life. Agreed.

29:15Brian Preston:Well said. I mean, I like when we get more context. Well, that's because that's like a personal, So if that person was a client, these are the things that I would kind of try to navigate. Instead of giving you a blanket rule, I try to meet you, triage your financial situation, and meet you exactly where you are. Personal finance is very personal. Yeah, I love it. Foolish parents, if you would like a MoneyGuy Tumblr, just email winner at moneyguy.com, and we'd love to send you one. All right, let's have your reaction to some of these guesses. So something big is coming from MoneyGuy. And Brian, don't give it away.

29:51Is it Mutant Mingle?

29:53Brian Preston:Oh, the dating app. Lots of guesses. Let the record show. I was on vacation when this all came out. It's like the day, not that I'm like the break on anything, but it is interesting that I go on vacation and this is where you guys take the live stream. Well, you know what? That's a, who knows? Maybe it's Mutant Mingle. Is it Bo's Mutant Gym launching? Let's go. putting a brick and mortar. Oh, man. The Third Bay boys would be very, very excited about that. Oh, my God. Do y 'all have merch? We do have merch. We actually just ordered some brand new. We went sleeveless hoodies, trucker hats, and then we got tank tops.

30:34Brian Preston:Yes or no? Is it a flex or weird that his group of friends has merch? I want to yell nerd, but then you're like, can Mega Chads be nerds? I mean, it's just, I don't even know what to say about it. It just seems weird. Next guess is a giveaway of$1 million to every person on the stream.

31:17Brian Preston:Source the materials you need to keep your jobs moving. Just like that. At Lowe's. This episode is brought to you by Google Chrome. You think you know a browser, but Gemini and Chrome? That's new. It can help you with practically anything on the web. Like restoring a vintage motorcycle from a 50-page restoration block. Or finally break down that long article you've had open for weeks. Gemini and Chrome is here for it. Ready to make anything online make sense? There's no place like Chrome. Check responses set up required compatibility and availability varies 18 plus. You know, if I was trying to run for class president of the high school, that's the exact type of thing that I would say is because, you know, there's no accountability.

31:58Brian Preston:And pizza every day. Just making blanket promises. We get pizza, no homework, and you get a million dollars if you elect me to be class president of your high school. How about? You told us our rules where we could not say yes or no. So that's a maybe. That's true. That's a maybe. How about a new course? Oh. New course. Maybe. New course. Bow swim lessons? Maybe. What if it was bow swim lessons? What if you were teaching swim lessons? Given by Brian. That's it. Right? Like, get us. I'm a good, I have a heart of an educator. Oh, Hasselhoff and Efron over here. Mm-hmm. A new - No, you got it. Remember, remember, if you think greatest showman, I'm not, Hasselhoff's not in greatest showman.

32:37Brian Preston:Well, I was, you know, I was trying to say a theme. Hugh Jackman. I'm Wolverine in that case study. Okay, you're Wolverine. There we go. All right. A couple more. You're Wolverine High School Musical, is that what you're saying? Yeah, you're Zac Everett. He was a wrestler. He was jacked in Baywatch. Okay, we took that way in many directions. Keep going. Sorry, Reeves. As usual. How about a new on-screen personality so Brian can start planning for his retirement? Whoa. Okay, one, I love the idea of another personality. I do not like the idea of Brian retiring. Y 'all think I'm close to retiring?

33:06Brian Preston:Is there something you can tell us? I mean, look, I look in the mirror and I'm like, you know, I look pretty good for my age. But then things, comments like that, and I'm like, you know, okay. I don't plan on going anywhere. No, we also had some people in the moneyverse say, Brian is never retiring. No. No. I'm going to croak, and then they're going to come do studio tours, and I'm going to be leaned up against the wall in a glass case. Can we get Brian stuffed? Can we, like, attack the army, Brian? He did say one time that we could wheel his lazy boy into the set. I was like, okay. This is getting dark.

33:37It is. Really quick.

33:40Brian Preston:Last but not least, how about a money guy cruise? Oh, man. You'll have no idea. You're preaching to my heart. Honestly, Brian would love a cruise. That almost happened. He loves a cruise, and he's been trying to convince us of a cruise for a long time. You know, we had a joke. We had a joke because, you know, every now and then the Ramsey Solutions people will get these wild hairs. We were like, what if we did a takeover? What if we showed up at the cruise? What if we did a – we like totally, you know, just totally – what is this, a stowaway? You stowawayed on the Ramsey, and then we even – we probably couldn't get them.

34:10Brian Preston:We had a money guy meet up on the Ramsey cruise. Travel agents get like booking fees. Yeah. What if we came up with our own affiliate code for the Ramsey Solutions cruise and we marketed it as the financial mutant? That would be hilarious. That would be awesome. Can't confirm. That would be less work than putting on a cruise. Like, take over the Ramsey Solutions cruise. You do a good pirate. The money guy meetup on the Ramsey cruise. That'd be hilarious. Well, thank you for all of those guesses. That was fun. Keep them coming and definitely go to moneyguy.com slash early access if you're not on the list yet.

34:44Brian Preston:Although a number of you already are. So shout out to you. I look forward to talking more about the secret announcement. Where do they go to get that again? Moneyguy.com slash early access. Moneyguy.com slash early access to get on the list. All right, we're going to do another question and then hop into our segment. But first, the question is from CosmicPenguin101. Is this the Cosmic Penguin from the Moneyverse? Our friend Penguin. What's wild is, you guys wonder, do we read comments? Absolutely. Are we in the moneyverse? Absolutely, even though you don't know where he is. We are in there. Brian Mayer may not be.

35:19Brian Preston:Can't confirm or deny. We pay attention. We love that. Even though this thing has gotten bigger, it still feels like a family. So when I see, that makes me happy that Cosmic's still here. Well, he answered a good question. I'm excited to see what you guys say. It says, good morning, Money Guy team. In the step seven chapter of the book, Millionaire Mission, you discuss finding your why. Is knowing your why a requirement for completing step seven? If so, do you find that people's why still changes after step seven? This is a really important component of really everything we teach. Look, I think it, I don't want people to get stressed out because that's not, step seven is actually supposed to be the first step where you're saying, hey, all these other things were very kind of automatic for the purpose of either They're protecting you from yourself.

36:07That's what steps one and four from emergencies. Two, the free money is just so important. Three, high interest debt. You can never have wealth if you're paying 20 % plus to a bank. And then you get really excited about five and six because those are tax-favored investments. And seven is the one where you're supposed to say, how am I going to use this money? What makes me happy? And what's my relationship with money and how the rest of the world connects? So the why component is just to give you the context, the flavor of how you're supposed to live your best life. But I think a lot of people, you're probably going to get there.

36:44And if you've been good with money and you're analytical, a lot of you may have never even given thought to that. You're just like, hey, I think I wanted a million dollars since I've been in the fourth grade. And that's the exercise is because I don't want you to get overwhelmed with somebody flipping the script and saying, And hey, instead of being so goal oriented, let's actually start thinking about us and what makes the money kind of the tool that gives us our best life. So if you get there and you're not really sure on your way, that's okay. It's just like when I got to college, I didn't know I was going to be an accounting major.

37:19I mean, that's why you introduce concepts so you can slowly let it start working in your brain, even while you're sleeping, and it's processing behind the scenes. So don't get overwhelmed if you don't know your why just because you've gotten to step seven.

37:34Brian Preston:Yeah, and I want to give you guys some – I love the last part of this question. Hey, if so, do you find that people's why changes after step seven? I would argue, yeah, I think about our personal journeys. You know, we were fortunate enough that we both hit step seven a long time ago, and our why when we hit there was very different than our why today. As this show is growing and the firm is growing, the reason why we get to do it and the impact that we're able to have is so much different than it was when you first started hitting 25%. I think it's okay. I think so long as you're going through the exercise of revisiting your why and reassessing your why and rechecking your why and making sure that the decisions you're making still align with the why, if the decisions don't align, then ask the question, why am I doing the things that I'm doing?

38:20Brian Preston:So long as you're constantly working through that exercise, I think it'll help you stay on track. It's one of the things that my wife and I, we do these at the beginning of every year. We'll go to the net worth statement. I'll go over the, what do you do if I die thing? And then we do all of our trip planning. And then we ask the whys. Hey, why are we saving this money? Why are we building this wealth? Why do we want to do this trip? Why do we want to create these experiences? If you can work through that exercise, it just reminds you and it keeps it top of mind why you're making hard decisions when they're hard and why you get to make easy decisions when they're easy.

38:51Brian Preston:And it's okay that that changes through time. I think it's supposed to change through time as you mature. Yeah. I mean, you don't become completely different people, but you definitely evolve throughout your life. That's great. Wonderful. Well, Cosmic Penguin 01, it's my honor to give you a long-awaited Tumblr. So email winner at moneyguy.com if you want to cash in on that. All right. Next, we are going to move on to our From the Wings segment. This segment is where we get to get Brian and Bo's reactions to some recent headlines going on in the news right now. And they are going to tell us. Do we do these?

39:30Brian Preston:Yes, please. Look, we've trained you so well. You knew exactly where to get your thumbs up, thumbs down paddles. They're going to tell us, is this headline thumbs up news? We should pay attention for our financial lives or thumbs down. It's noise. It doesn't really hold any weight. So without further ado, I'm going to read the first headline. It says mortgage rates in the U.S. increase to 6.69 percent. Highest since July 2025. Is this news or noise? Ooh. All right. Bo says it's news. Brian says it's noise. Fight. Fight. Fight. Fight. Who do you want? Who should go first? Brian. Look, I even think the headline is hilarious in the fact.

40:12Highest since July 2025. Not July 2025. If you're going to try to hit me with a shock and awe stat, it needs to at least be like three years in the past. I mean, at least some type of season. That's why it's like we haven't reached this since. And they do something 90 days ago. And I'm like, how is this? The shock and awe gets pulled out when it was something like last week. I mean, that's the part. So, look, mortgage rates are constantly evolving. and I think it goes into the calculation of affordability and what you should do with your own personal finances, but I don't know that I necessarily think watching where mortgage rates are on a daily basis in your long-term planning is something to fret about.

40:58Brian Preston:Yeah, I'm going to agree with you. I don't believe watching on a daily basis is something that you ought to do, but I just think there's so many young people, and I'm going to classify young as people below 40 that really want to get into the homeownership side of things. Like it is a, it's probably one of the most difficult decisions to make right now in our present day for folks who have not already been on that side of the equation, trying to get in the home, trying to get your first one. And so I just think that mortgage rates are super important because that is a financial goal for a lot of people.

41:26Brian Preston:And so I just want you to be mindful of that. Not so much that, oh, they've hit an all time high, but more recognizing, okay, now might not be the right time for me to buy a house because a house isn't affordable, but I am I'm going to begin saving cash. I'm going to build up that down payment. I'm going to at least keep my finger on the temperature of, okay, where are mortgage rates? Because whatever goes up, generally speaking, should come down at some point or offer some sort of reprieve. So if mortgage rates get down to six, five and a half, five, maybe that introduces a more favorable time to buy for those folks who are trying to get on that side of the equation.

42:04Brian Preston:So I think it is newsworthy just because it's home related and so many people right now want to be in homes. I hesitate because I sent something to the whole money team over the weekend. I came across two or three pieces of information on that there's some glimmers of hope with housing, with home prices. Now, interest rates still stink, so that facet's not fixed. Would y 'all be interested if, because I know, look, I always hesitate because our show Rent Versus Buy did really well. So that makes me think, hey, there is an audience of people wanting to know our thought and our temperature on housing.

42:44But then there's also, I always like, if you're not in that season, are people even going to show up for that show? So, you know, let us know in the comments because I do, I've told the content team, I think I could do an update. It's probably in a Q &A, you know, Money Guy Answers. We could give you guys some feedback on what's going on with those first-time home purchases.

43:02Brian Preston:With the idea being it seems like prices are cooling off a little bit. Yeah, that's one indicator. That's one indicator. All right. But mortgage rates still stink. News from the stock market up next. Stock market today, major indexes are steady as S &P 500 looks to add to record high. That's from Investopedia. Both said noise. How count? if you think it's high now, wait till you see it 10 years from now, right? Like always be buying, baby. I think this headline cracks me up because it's like we need a little shock and awe, but things are the same as they were, you know, last week. So it's steady, but they are all-time highs.

43:48So it's like they're like, hey, let's put some sensation with our boring headline. Look, all-time highs just happen. You know, markets go up 80 % of the time. you know if you look at on an annual basis 80 percent of the time they're up 20 percent they're down so that's why you get two recessions typically um you know throughout the decades you know through a decade so there's a lot of as the economy is expanding and growing through innovation you're going to see more and more all-time highs yep i remember you know what's what's interesting bo we had a conversation probably right post 2008 where we were telling a client is like, hey, if you think that because the Dow had gone down to below 10 ,000 and I was like, you realize there will be a time when the Dow crosses 100 ,000.

44:35He's like, no way. And I was like, just give it enough time. It'll happen. It'll happen in your lifetime.

44:43Brian Preston:Next headline, Americans are spending plenty, but they're saving much less. That's from MarketWatch. Bo says news. Oh, Brian switched to news. Well, he looked at mine. He cheated. I did cheat. I did cheat. I didn't realize it, but I was like, let me see what Buzz's doing. Let me tell you why I think that's newsworthy. Americans are consumers. They have been for a long time. We thought when the pandemic happened and savings rates shot up, we're like, oh my goodness, people have woken up. They're going to change their behavior. No, it's just because they were trapped inside. They couldn't go spend.

45:16Brian Preston:As soon as we got out of the pandemic, as soon as stuff opened back up, people started spending money again. and we saw savings rates plummet again, we have a real deferred gratification, saving and building for the future problem in this country. So I think it is newsworthy. And the more we can talk about it, the more we can tell people, hey, the earlier you start, the earlier you figure this out, the less hard you have to work at it. It's real easy if you start early, but maybe you didn't start early. Maybe in your 30s, maybe in your 40s, maybe in your 50s, even though you have not done the things up to this point that you wish you would have done, The second best time to change your behavior if you can't go back in time is to change it today.

45:54Brian Preston:To start living in less than you make today, to start building for the future today, start saving for tomorrow today, and your future self will thank you. But I think so many Americans, they ignore it, they don't pay attention to it, and they let our feeds and all the stuff we're looking at it just pull the dollars out of our back pocket, and that's not the way it should be. There's a better way to do money. There's a better way to do your financial life. I mean, we live in a consumption society. I mean, you think about it, most industries are set up to try to help you spend all of your money.

46:26And that's why last week we had the whole conversation of what's our counterculture point here at the Money Guy Show. I think ours is that we actually try to help you be that financial mutant that actually builds and grows versus just consume and spends. And it goes beyond just, I know there are hard times. I know housing's expensive. I know we've been told lies about education and just go to college and it'll all turn out. There's a lot of negative stuff, and that's why I like that we get to be the voice to say, Let us show you how you can actually take whatever comes your way, give you the tools, give you the education, so that you can actually be counter to the consumption that surrounds us all.

47:07Brian Preston:Yep. There's video with this last headline. It says, Bear gets trapped inside SUV, honks horn all night. So if you want to know before you know it, say if it's news or noise, we can show you the video. All right. Well, talk about a rude awakening. I can't see. I can hear something, but I can't see anything. A bear somehow broke into a car and got locked inside. So a Colorado man did what... Well, what's your initial reaction? We just heard a Colorado man. Oh, there it is. There it is. Okay, here we go. Talk about a rude awakening. A bear somehow broke into a car and got locked inside. So a Colorado man did what any of us would do, right?

47:49Brian Preston:Wrong. He used a long rope to free the animal. What? Wow. That bear got stuck in the car. That's a giant bear in the front seat. You get bear rushed. And I heard honking all night. I thought it was a crazy neighbor. How would he be doing this? What are you going to do? Leave the bear in the car? How'd the car... Why are the windows all up? I opened the door. The bear took off into the woods. Buddy, look at that cameraman. It was gone. For those listening on podcast, a man is like putting a string around the door handle and going far away so he can pull it Or was this bear, like Yogi Bear, and walked up and opened the door?

48:26Because there was no broken windows. I bet you would open the door.

48:29Brian Preston:Because bears know how to do that stuff because they've been around people. But then they can't get back out. What would you have done? I don't know. Because, I mean, look, it's not like a, I mean. I call the authorities. Can't you just tell your car, hey, open doors? Somebody else can do that. No, I could. Hey, car, open doors. On mine, I could just open the doors with my mobile app. Could you imagine how heartbroken Brian would be if there was a bear in his Tesla? could you imagine honestly you know what I'd give it a ride I was gonna say it would just you'd give it a bear ride I'd put it on pet mode cool it down so it was comfortable in there and then I'd give it a ride you know what I like the idea that the guy went and got the rope I think I would have called a professional though I think I'd have called and been like hey wait a minute do you think local animal services is set up to get a bear out of I'm gonna be honest He looked like a well-behaved bear.

49:23Brian Preston:I think they're more prepared for it than I am. Yes. I don't know what their training is. It's more than mine. Has to be more than mine. I think they have some more resources, like protection. I don't know. I just think we'll let the authorities handle that. I say it's news. Yeah, I mean, it's news. Clearly, the guy that's talking. I love the pictures, the videos, all the things that let us have an extra angle. That's so much more. Somebody said, oh, it's going to be fun to clean that car. I didn't even think about that. Oh, yeah. I know. It really is quite a big problem. I was sitting there thinking that.

50:03Brian Preston:I was thinking bear scat. Bear scat all over that car. That's not a little boop, boop, boop, boop. I think I probably let some professionals do that, too. It's a different type of scat. Was that singing? It was a scat. Oh, man. You guys got that for free. You're welcome. All right, let's go back to the hopper and pull some more financial questions. This one's from Phil V5J. It says, I have a great employee-sponsored health plan where all the plans take nothing out of my paycheck. Whoa. Should I still do the high deductible plan for the HSA eligibility or take the Cadillac plan? This is the most financial mutant question.

50:39Brian Preston:No, we can't say no. We can't just come out and say no. We can't do that. We don't know all the situation. We don't know everything. We don't know - It sounds pretty fast. We don't know all the variables. It seems, that's the correct way to say this. It seems like the best solution for you would be to take the fully subsidized Cadillac insurance. Because even if you were to do the high deductible plan and you're able to contribute to an HSA and you got a tax deduction for the contribution to your HSA, there's a good chance that tax deduction is not going to be more than the premium that you're paying to be on the high deductible plan if you have fully subsidized.

51:17Brian Preston:So it seems it's highly likely that the fully subsidized option is gonna be the best, but you still need to do the math. You still gotta do the math just to make sure, but I'd be surprised to know if that wasn't the case. Yeah, and look, a lot of them, I don't know how big your company is, but a lot of companies, it's an issue for most small businesses because I'll just go ahead and confess it to you. It's one of the most expensive things we do for our employees and they hate us for it. because everybody complains about their health insurance. It doesn't matter how much money we sling at this thing.

51:49Brian Preston:They don't hate us, do you? You think they hate us? Well, I mean, because here's the thing. It's not our fault completely. It's every year it seems like, you know, I won't even say the provider's name, but it's like, is anybody shocked? It goes up 18%. It's 18 % to 22%. It seems like, how can something go up 18 % to 22 % every year? And it seems like that is what we deal with with health insurance. So you can imagine it's just hard to keep up when things are going up that much. But it is one of those things where I would ask you, and this is the point I was trying to make. A lot of small businesses, they want to give you or they try to do the right thing and give you health insurance.

52:28But what they might and they might have heard, hey, let's add a health savings account eligible high deductible plan. But they still just because of what they did last year, they just have all the money going into the Cadillac plan. You ought to ask your employer, hey, how much are you putting into that Cadillac plan per employee? And has anybody actually done a benefits analysis, especially if you have a young workforce? You know, if all of your employees are in their 20s and 30s, maybe the way you did it last year isn't the best benefit for the employees. And we ought to look at, hey, should this be a set amount per individual or family?

53:02And then that way you actually get true choice in the plan. Or what's the why? And that's what I'd be curious, whoever's designing these benefits, how it was structured and what the incentive, because if it was just done by what was done last year or five years ago or seven years ago, and they haven't, they've added the high deductible, but haven't actually put the benefits of, hey, the reason the high deductible was supposed to be put in there is because for young people who don't have a lot of medical need, this allows you to get a saving in the premium, but also to build assets for the future.

53:33You're really not honoring all of that if you just keep loading up the Cadillac plan. So there might be a discussion with your employer on what the why is, while one is heavily subsidized, and then the other one, yeah, you get to do a HSA, but man, oh, man, it would be nice if we kind of got to do the best of all things.

53:50Brian Preston:Love that. That's great. Well, Phil V5J, you get a Tumblr if you'd like one. Email winner at moneyguide.com since we answered your question here on the show. Ruby, you ready for this? I'm ready. Did you happen to see what kind of car it was that Bear was in? As you were talking. It was a Toyota Highlander, wasn't it? I came up with two answers. It was either a Toyogi or how about this one? It was a Subaru. Are you kidding me right now? Did you come up with that or did somebody put that in the comments and you thought that rose to the level of doing it? That's where my mind went. I was trying to come up with three.

54:27Brian Preston:I couldn't come up with a third one. The content team are fans. Content team are fans. You're welcome. No one guessed a joke book is what was coming up. I blame Megan. I blame Megan because of her daily riddle joke that we have every day. We're constantly doing these things every day. So you've decided let's go ahead and put this in the content. Subaru is pretty good. But it was a toyoga. Yogi. Yogi. Toyogi. Toyogi. Something to that one. Okay, that was for free. Almost as good as my scat. Extra bonus content. I thought I was going to get a bigger laugh from Justin. and he didn't give it to me.

55:06Brian Preston:That's fine. He's still mad at us. He's salty because we made fun of his hilarious react, which, by the way, I feel like the joke was put on us is because it was hilarious is because we were the butt of the joke. We were the hilarious part is they put some riddles and traps and other things in there, and we fell right into them. They didn't even have to put pond straw on it. We fell right into it. If you've not watched yesterday's React video, you should totally watch that after this live stream. There was a mutiny. Mutiny. There's no other word. Instead of financial mutants, we have financial mutinies with the content team.

55:46Financial mutiny. It's true. Go watch that video, especially around that six-minute mark. You'll see. There's supposed to be some sacred things with the content team and us when we create content. Nope.

56:00Brian Preston:Just remember, nothing is sacred here. If you want to watch that, it's called Financial Advisors React to Hilarious Money Clips, I believe. So go check that out. Lamborghini. It's good. It's got Brian and Bo and George Camel on the thumbnail, actually. That's pretty good. That's how you know you're in the right place. That's pretty good. All right, let's do another question. From Huskers2216. Hey, money guy. How does one spouse's pension that will replace 33 % of household living expenses in retirement affect the stock and bond glide path strategy nearing retirement? It has a max of 1 % cost of living adjustment.

56:38Brian Preston:Yeah, this is a more specific question to a general question that we get often. Hey, if I have pensions, if I have guaranteed income, how should I think about that in terms of portfolio allocation? Would it be appropriate? Would it make sense for me to think about my pension income as sort of a pseudo fixed income or risk off, risk reduced part of my portfolio so that with my liquid portfolio, could I be more aggressive? Could I have a higher equity allocation than I would otherwise, given I have this like guaranteed source of income? How would you answer that? What things would you tell them to look at to assess that?

57:12Maybe. It depends because I do have specific clients where they have enough pension income that it offsets all their needs. So we started and they have children and grandchildren that they want to leave a legacy for. So it did make sense to think more long-term than even what their life would be. Because the glide path is somebody who's in their 70s, you might be thinking, hey, this is going to be a super conservative portfolio to make sure the money's there and we don't get into risk capacity issues. But if all of a sudden they don't need the money and it's more about, hey, what can we grow this for, for either the charities we want to leave it to or our loved ones we want to leave it to, then that comes to play.

57:49Now, the question here, this isn't covering all of it. This is only 33%. So I'd want to build this as part of a bigger plan to see how much that moves the needle, but potentially this could allow you to, you know, dial down some of the risk-free or the risk-off asset class.

58:10Brian Preston:Only two things I would add to that. I'd want to know a little bit about the pension. Who's the sponsoring company? How well-funded is the pension? Like, is this a government pension or is this like a private company pension? Eligible for pension benefit guarantee corporation. And is your benefit how far above the minimum guaranteed benefit is your benefit. Because with a 1 % cost of living adjustment, odds are if we see historic average inflation somewhere around 3 % to 4%, the value of your pension will become less and less and less through time because it's not going to keep up with that. But then you'll likely have Social Security and other sort of guaranteed income sources.

58:44Brian Preston:So you want to kind of measure all of those things to determine, okay, for me personally, how should this affect my allocation? This is a great time when a lot of folks want to take the relationship to the next level. Okay, I'm making big decisions around allocation for the next 30, 40, 50 years. How should I think about this? What consideration should I put into this? Because two different people with two different pensions and two different portfolios with the same size might have two different solutions that make sense for each one of them.

59:17Brian Preston:Great. Huskers2216. You get a Tumblr. Email winner at moneyguy.com to cash in on that. Let's go for one more. Yeah. One more. Go Lucky Monkey has a question for you. Hi, Money Guy team. I bet they like bananas. They probably do. I have the ability to cash flow college, but also have subsidized student loans available. Should I take the loans and put the loan in a savings account to get the interest or just cash flow? Oh, man, Bo. Bo just squinted at his eyes and put his hand over his face. Let's see what he's going to say. Here's where my mind first went immediately. I need to know the numbers.

59:59Brian Preston:Like I have the ability to cash flow college. Does that mean your college is$2 ,000 to$3 ,000 a semester and you can cash flow that or you can go buy money? Or I have the ability to cash flow college. College is$40 ,000 a semester. The scale and scope of those are very different. I'd want to know that. And then I want to know what degree are you pursuing and what's the vocation look like after that? Are you going to have an ability, if you do pay cash, to then generate an income where you can replace that money that you forewent, foregoed, foregone, that you walked away from over the last three to four years?

1:00:36Brian Preston:I'd want to do that assessment to figure out, okay, what's the best use of those funds? And I do think in this case, size matters. The biggest question with education, because this is the one that I get the most ticked off about is the lie that has been told to young people about that. Just go to college and it'll all work out. And hence, now we've left with an entire generation where the most noble thing in the world is you bettering yourself by education and other things has been distorted in a way that now it is entrapping people with huge debt loads. So before I even did this stuff is exactly what Bo said is I want to know what's your degree going to be in and what are you going to do afterwards?

1:01:17Because before we even start talking about student debt and cash flow, I want to know that you're not going to leave college with more debt than what you can make in your first year out of school. Because we've even had people on Making a Millionaire who took jobs, got a degree in something, their debt was like a factor of three to what they were going to make. And that is a trap from the get-go. So put that on the shelf first, answer that. What's the ground rules of education? What am I going to make at the end of this? And then after that, I think it becomes more of scale, exactly what Bo was talking about, because if it's a small amount of money, I'm going to, oh, here we go.

1:02:01We got context. Read that out.

1:02:03Brian Preston:So college is$8 ,000 per semester, but I have grants covering$5 ,000. So for me, it'd be$3 ,000 in loans. I'm going into electrical engineering. Dude, this is awesome. I know my thought. What do you think? Should you take out loans or pay cash? I mean, at$3 ,000, see, this is where I need a little additional context. Because especially like electrical engineering, it's probably going to have co-op opportunities. There's going to be other things where if you have, because also it's your age, if you can be funding a Roth IRA every one of these years, I don't want you to forego doing that for, but, but if you are co-oping and you're going to be able to pay$3 ,000 off, but then go tell yourself, Hey, I'm going to also make an offer.

1:02:43I'd love for you to fund a Roth IRA and pay this$3 ,000 off every year you're in college. And I think you'll be a okay in life. Yeah. I love that answer too.

1:02:53Brian Preston:That's great. Well, go lucky monkey. Thanks for the question. Uh, if you'd like a money guide, electrical engineer grants and all the other stuff. We're going to be doing this show for the next 15, 20 years. Remember who planted the seed? Where, who was it? Who's playing all the apple seeds? Johnny, Johnny Appleseed. Remember Johnny Appleseed, Bo and Brian. Just call them Bo and Brian Appleseed. That's better than Johnny Appleseed, Bo and Brian. That's much better. Go lucky monkey email winner at moneyguy.com. If you would like your very own Money Guy Tumblr as a thank you for asking a question.

1:03:31Brian Preston:Remember, go to moneyguy.com slash early access. Get on the list. We're going to be having a lot of fun with some hints, some perks, some early access over the next undetermined amount of time. Well, I've determined it, but you don't know it yet. But you will if you get on the list. So definitely do that. I'm really excited to share what's coming and what we've been working on that we've made especially for you. guys thanks so much for joining us remember value that's what we're trying to load you up it's the abundance cycle fulfilled you get so much value that you learn these concepts you apply these concepts you reach a level of success that's why if you haven't gone to moneyguy.com slash resources we literally are creating a library for you to be the better version of yourself actually a financial mutant i'm your host brian joined by mr beau money guy team out the money The Money Guy Show is hosted by Brian Preston and Bo Hanson.

1:04:23Brian Preston: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. All investments involve a degree of risk, including the risk of loss.

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