Are You Richer Than Your Friends? (2025 Edition)

21:53Brian Preston:We've just now at this decade crossed over to where we have greater than one times our annual income. But that's not because of the discipline. That's just because incomes go down. Congratulations, Congratulations. You finally have more assets than you have in income. It's more likely not because of your good behavior. But our financial mutants, you guys that responded to the survey, on average, you have a median household investable asset of$2 million in your 60s. And our Abound Wealth clients are just a little bit ahead of that at$2.2 million. So when we think about the mile markers, we know that by age 60, we want you to have about 13.7 times your annual income.

22:33Brian Preston:And by 65, in order to be financially independent, a good mile marker to use would be about 20 times your annual income. Now, before you guys say this, we recognize financial independence is based on living expenses. So you may not need 20 times your annual income to be financial independent, but we don't know what your living expenses are. And it would be crazy of us to assume, okay, living expenses for someone living on the West Coast in the Bay is very different from someone living in the middle of the country in a rural town. So we're using multiples of income. So if you want to think about financial independence in your mid-60s, a nice rule of thumb mile mark would be 20 times your annual income.

23:15Brian Preston:And when we see how the average American stacks up to the financial mutant who stacks up the amount of wealth client, you can see that the average American is just at 1.4 times your annual income. whereas financial mutants, those that have been making the right decisions for an entire career are at 19 times and are bound wealth clients are at 22 times. You can see that those who made the decisions early on to make the hard decisions early are not having to make hard decisions later on in life. They're actually able to reap the fruit of their labor and hard work early on. Study and play. Come together on a Windows 11 PC.

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24:33Brian Preston:Spend less time searching and more time actually interviewing candidates who check all your boxes. Listeners of this show will get a$75 sponsored job credit at Indeed.com slash podcast. That's Indeed.com slash podcast. Terms and conditions apply. Need a hiring hero? This is a job for Indeed Sponsored Jobs. So I love because we are all about show you the numbers and give you the details. So we've given you the analytics, but that can only do so much. I think we have to now give context, put meat on the bones with how did we get here? And ultimately, it's going to be the behaviors of the financial mutants, of the abound wealth clients, and even the behaviors of the typical American.

25:11And this is what we want to talk about is because this is where the rubber meets the road. And you think about the first thing, the first trap that we always tell people, if you watch any of our by age content, we're always like, when you get out and you start working, please, please, please don't fall into the trap of debt. Because we look at debt as chainsaw dangerous, meaning that if you are using debt as a financial tool and you're not scared to death every time you use it, you are not using it appropriately. This should not be something that you're just willy-nilly opening up lines of credit, going out and getting loans on furniture, on saving money at Target and so forth.

25:50You will get yourself in a trap because we live in a consumption society telling you this is good, this is normal, but I'm here to tell you success will show you that this is actually a trap, and you better turn back, go the other way on it, and our data shows and confirms that.

26:07Brian Preston:So let's talk about the first area. When we say debt, the first thing that comes to most people's mind is credit cards. Okay, what does credit card look like inside of these three different strata? And so the first question we asked was, okay, do you use credit cards? And we found that 81 % of the average Americans use credit cards. They actually swipe plastic for purchase. When you compare that to financial mutants, when you compare that to you guys, 96 % of you said, yes, we use credit cards. And 97 % of our Abound Wealth clients say they use credit cards. Well, Brian, this must be wrong. This is saying the people with the most money are using credit cards.

26:49Brian Preston:Something must be off here. Yeah. Well, I think also you're looking at this like, wow, probably the only stat on this in this entire presentation that's going to make the typical American look more disciplined is credit card use. But don't you know, a little more context would show that the reason that 19 % of Americans don't use credit card debt is because a bank with a 10-foot pole wouldn't touch a lot of the general public. And that means that their credit score is so bad that they probably can't get credit card use. Because you can see in the real financial mutants, in the abound wealth clients, the majority of people who have good discipline and don't struggle with running up credit card debt, they do see the conveniences in credit cards.

27:27I have a no hypocrite policy here with myself, and I use credit cards all the time because I get travel bonuses. I get cash rebates. Sometimes I'll do transactions on websites. I'm like, man, I'm glad that this is not tied to my bank account. I like that I have some protection from these banking institutions. You see that with our clients. You see that with the financial mutants. The better question from a behavioral standpoint is, okay, so credit card use doesn't seem like it's that big of a deal. We even say that all the time. We say credit card use is A-OK, but credit card debt, no way. This is where, once again, rubber meets road.

28:07How many of our audience members, how many of our clients are actually not paying off their balance every month?

28:13Brian Preston:Yeah, we asked the question, okay, which of you, how many of you actually carry credit card debt from month to month. And we know that 46%, almost one in two Americans chooses to carry a credit card balance month over month, meaning they are paying interest. When you look at Financial Mutants, you guys, less than 10%, less than one out of 10 of you are paying credit card interest every month and carrying debt over. When you look at our bound wealth clients, it's less than 1%. And we want to know who that 1 % is. Bob, I was disappointed in the 1%. Because that means you have a significant net worth, but still maybe these are 0 % credit cards.

28:55That's the only thing I can consider because I was shocked when that even came up that we had somebody was carrying a credit card balance. But do you see how it's built different now? Does it like, whoa, wait a minute. There's some clarity in the way that we should look at money is that money is no more than a tool. You just have to know how the tools all work and make sure you're not working against the wealth building process.

29:20Brian Preston:Well, now money is a tool and a lot of things inside the financial world do evolve and change with time. So perhaps there's someone out there saying, man, credit cards. No, I get that. I used to watch the guy that said, don't use those. That's not a problem for me. So we said, okay, well, what about, even though we can be disciplined, the way that we consume is changing and the opportunities for us to consume differently are changing. So we asked the question of you guys, okay, well, how do you use or do you participate in buy now, pay later? Because it's different than credit cards and it does not accrue interest.

29:49Brian Preston:And so perhaps it's the more responsible way to consume. And we found that 31 % of average Americans, so three out of 10 folks say, yeah, I've used buy now or I use buy now, pay later. Of the financial mutants, only 12 % have admitted to using buy now, pay later. And for our bound wealth clients, it's less than 10 % of folks use buy now pay later well i think look here's the thing i know a lot of people they look at this buy now pay later even the financial mutants and abound wealth clients that are doing this the small percentage i bet they look at this kind of like the zero percent credit cards they think hey i see that i could use this as a tool arbitrage but i'm here to tell you i think that it's not worth the the the risk in some ways just like i'm not a huge fan of zero percent credit cards i'm not a big fan of buy now pay later because i know a lot of the research shows that consumption-wise, if you're using buy now, pay later, you typically spend 10 % more than people who are not using these services.

30:50So there is a risk associated with this, but I think there is something probably pretty teachable to say, man, people who seem to appear to be good with money seem to not be using this tool as much as the general public is.

31:02Brian Preston:Another thing I think is really interesting. Again, we're trying to dive into the behaviors that allowed financial mutants as well as our Abound Wealth clients look so much differently than the average American. And I think one of those behaviors has to do with something that most all of us will deal with or have dealt with, and that's automobile ownership. We say this all the time, that automobiles can be the number one wealth builder, wealth crusher in your financial life. They can be napalm for your financial life. And so is the way that financial mutants, there are the ways that financial mutants and abound wealth clients use cars different than the average American?

31:40Brian Preston:And again, the answers are resounding yes. We know that 63 % of Americans drive their cars for five years or less. We know that the average new car loan is somewhere around six, seven years. So people are borrowing money for longer than they are even driving their automobiles. So if that's what the average American looks like, I got to believe the financial mutants and abound wealth clients look different. Well, this is why every time we do auto content, I'm always amazed that the majority of Americans now are getting negative equity, meaning that they owe more than the car's worth. And this is where it is.

32:15You can see it. This is the proof is that if 63 % of Americans are driving cars less than five years, but the majority of them, because they can't really afford their life, but they can afford anything at$200 a month. So you just stretch that amortization out. They never own their financial life. and they drive around in what could be their future wealth. Now, compare and contrast that to my financial mutants. Look at this. You guys, 81 % of you are driving cars for seven years or more. Love that. 84 % of abound wealth clients are driving cars for seven years or more. And we know, look, most of our clients, you're either paying cash or you're definitely following the 23-8 rules.

32:56Do you see how quickly you start? You're wondering, how in the world, when I see all these income-slash-net-worth numbers, where's the separation point? Where's the A, B binary decisions that are leading to this big spread? This is a big one. Is it? It's because we just showed you that you think about the typical car loan,$600,$700,$800 a month. If you strap that behavior of what is going to cars is now going to index funds and growth assets, right here we're showing you, you drive your cars longer. The people good with money drive their cars longer, financing them less. That money is showing up on the net worth statement.

33:34The typical American is literally not doing this key step.

33:38Brian Preston:All right, let's talk about another type of debt that a number of Americans face. We know that right now, the average graduate, the average college graduate right now, is graduating with a loan balance of about$39 ,000. And we say all the time, we want you to follow the first year financing rule. We don't want you to borrow any more in college debt than you anticipate your first year salary to be. It is so exciting. We know that 93 % of you, 93 % of our financial mutants said, yeah, when I graduated, I had less than the average. I had less than$39 ,000 a student loan debt. Again, financial mutants look very, very different than the average American.

34:16Well, look, we ask 18-year-olds to make horrible long-term decisions for themselves for the future. And if you get this wrong, I'm here to tell you— You've been carried around for a long time. If you come out of college with$39 ,000 worth of debt and you're not making a good income to where you can pay that back in a few years in the future, that's a problem. But yet we have young people making this decision. That's why you should sit up in your chair right now. If you have kids in the house that are in middle school, high school, how do you make sure that you don't come out the other side? Begin with the end in mind.

34:53That's why we have the income rules. We want you thinking about what major am I going to do? What type of school? Because there's nothing wrong with community college. There's nothing wrong with being very strategic with where you go to school and how you structure it. Don't be a passive player in your financial life.

35:08Brian Preston:But debt and investments aren't the whole story. We know that even just having access to cash is a huge advantage, and it's an advantage that a lot of financial mutants and a lot of our Abound Wealth clients have. So we ask, okay, well, how do you handle cash? What's your thought on keeping liquid cash available? And we found that 46 % of Americans say that they have a fully funded emergency fund of three months. That means that there is 54 % that do not have a fully funded emergency fund. And yet, 85 % of our financial mutants said, I have emergency fund of at least three months of living expenses.

35:46Brian Preston:And 94 % of our Abound Wealth clients have at least a three-month fully funded emergency fund. What this suggests to us is that financial mutants and Abound Wealth clients recognize that unknown unknowns can come your way. And if an unknown unknown comes your way and you're unprepared for it, it has the potential to derail your financial life. Yeah, this keeps you from making desperate decisions because we know the majority of bankruptcies are caused by medical expenses and other things that just are not planned for. So this will protect you. That's why emergency reserves and cash is so important.

36:21It's not one step in the financial order of operations. It's actually two. It's steps one and it's steps four. Don't sleep on this. But, Bo, this is the part where, remember, when we were sharing all those net worth, we took out cash. It wasn't emergency funds that was even included in ours. It was really with the way the financial mutants, with the way the abound wealth, how they saved and invested. And I know you guys in the comment section, you always say, you got to say the word save so much, but y 'all are using it interchangeably, meaning with investing. I'll give you that. Yes, we should probably clarify that, but we think it's more of the behavior.

36:55When we're talking about saving, we're talking about also investing for the future. And savings rates and investment rates for financial mutants and abound wealth is just different than what's going on with the general public.

37:07Brian Preston:If you look at this from you guys, the 25 ,000 of you that responded, financial mutants, you can see the vast majority have savings rates above 16%. The numbers, if you're out there listening to the podcast, only about 2 % of you save less than 5%. About 5.5 % of you save 5 % to 10%. About 12 % of you save 11 % to 15%. 18.5 % of you save 16 % to 20%. 26.5 % of you save 21 % to 25%. And 32%, this is the big idea, 32%, almost 33 % of you. One out of three financial mutants say, I save more than 25%. I save and invest and build for my future more than 25%. Well, I mean, you think if you just add the retirees, you add the 25%, more than 25%, the 21 % to 25%.

38:01I mean, we're getting, you know, you're right at 60 % of those of you who filled this out. Because look, we know on how much you should save if you go to moneyguy.com slash resources, a number of you in your 20s, you know, so you might be doing exactly what you needed to be doing, even if you included 16 to 20%. Now this thing, we're close to 80 % of you guys out there are doing what you're supposed to if we just go beyond 15%. And a lot of you, because of your age, you can get away with it. You're just doing things differently. Because, Bo, the question I'm going to have is I want to know where Abound Wealth clients are.

38:35And then, of course, now I want to know, I've been so unimpressed with the general public. Where are those two numbers at?

38:41Brian Preston:Yeah, as you would expect, our Abound Wealth clients also fantastic savers. We have 20 % of Abound Wealth clients save 16 % to 20%. 43 % of Abound Wealth clients save 21 % to 25%. And 16 % of Abound Wealth clients save more than 25%. So as you can see, financial mutants, as well as Abound Wealth clients, are committed and disciplined savers. But when you think about the average American, you saw how the numbers were when it stacked up on net worth earlier in the 20s, 30s, 40s, 50s, and 60s. The average American has a 5.3 % annual savings rate. Yeah, see, there's what, want, want, want. Want, want, want.

39:23I mean, it's just, it's disappointing. Because it's, you know, it's one that's, and truthfully, that's probably, that's only getting you close to getting your employer match, you know, step two of the financial order operations. And you think about, we have a non-step process, a system, and to find out that the typical American never even gets out of step two, because they're running up credit card debt. They're not saving and investing like they should. Is there any reason that we should, I mean, I hate to say it, it disappoints me. It really does because I see so much potential. This is why, guys, we both come from humble beginnings.

40:01This is not us sitting up in our top of the mountain and just raising our nose and holding out our pinky finger and going, yes, the Grey Poupon is great up here. No, we come from humble beginnings, and I was just like you guys, broke as a joke and didn't know how money worked at all. And I'm just telling you, that's why education is the ladder out. If you guys can get your mindset right, and that's why I love the transition, because now that we've told you the numbers on the behaviors, let's talk about mindset. Because I don't want you guys, so many things in the world right now are saying, you can't do this.

40:36And I'm here to tell you, Bo is here to tell you, you can do this if you just do a few things that will work for you. So your army of dollar bills can be more powerful than even you can with your back, your brain, and your hands.

40:49Brian Preston:If you're even listening to the show right now, you've taken a step. in the right direction. Because one of the things we asked in our surveys was, hey, at what age did you begin thinking about finances seriously? At what age did you think, man, now is the time that I need to take hold and start grasping my financial future? I want to control my financial future so that my financial future does not control me. Well, the average American said that they figured it out at 33. Financial mutants said that they began taking it seriously around 25. That's the median. And then our About Wealth client said in the median that was before age 30.

41:26Brian Preston:What this is showing me is that if you can start thinking about it and you can start paying attention to it, you will recognize, man, if I can make some small decisions today, they don't have to be that hard. But if I put it off and put it off and put it off and wait till the future and let my 40-year-old self, my 50, maybe my 60-year-old self begin to think about that, well, then you have to start making some very, very hard, very, very difficult decisions. The earlier you figured out, the earlier you start thinking about it, the earlier you take it serious, the easier the journey can be on your path to financial independence.

42:01Well, it gets easy to say on paper, I'm going to take this serious at age 33, but if it doesn't actually result in actionable behaviors that actually is measurable for the future, you're dreaming. You didn't create a plan. You didn't create an action. You just dreamed. And I think that's what, unfortunately, the majority of Americans fall into. And then that transitions into what's their outlook on life. And sadly, now look, we got everybody on a happy year because I have done this type of research in the past where it's almost a coin flip to where there's actually been years where there's more pessimists in America than there are optimists.

42:38But right now, I guess good enough things are going on in the economy that 58 % of Americans identify as optimists. it's 75 % of financial mutants identify as optimists. 80 % of abound wealth clients. This is the part I'm telling you, you can take an active role in your life. You can be the victor and be the action hero. Villains and victims are never going to accomplish what they want to. I talk about that in Millionaire Mission. I'm here to tell you, I don't care where you come from. You can be the hero of your financial journey story. You just have to start making things happen.

43:15Brian Preston:Now, look, we don't want you to think, okay, this entire show is about how do I compare myself to others and how do I stack up? But I do think that we can look at other folks more successful than us or a little bit further along than us, and there are lessons that we can learn. This was a survey show where we kind of compared the average American to our financial mutants, to the Abound Wealth clients. But if you want a deep dive into what the financial mutants actually said on their surveys or what the abound wealth clients actually said on their surveys, we have two shows you could go check out.

43:45Brian Preston:You can go check out the show titled, We Asked 25 ,000 Americans How They Manage Money. The results may surprise you. Or, We Asked 1 ,000 Millionaires How They Got Rich. Here's what they said. Those are the other two survey shows where we do a deep dive. And what we want you to take away are the traits and the tricks and the mindsets and the ideas that really can help you do money better by learning from other folks that are doing money better. Well, I think, you know, because you said, be careful with comparison. And the saying is, comparison is the thief of joy. So you might be asking yourself, what's the difference between what you guys just did?

44:23Guys, we're trying to show you a trajectory. you're on a journey and you're going to have milestones all through this journey. And it's going to be very important for you to say, am I behind the curve? Am I ahead of the curve or right where I'm supposed to be? And as you can tell from the content and the data we've shown today, the typical American is beyond being behind. So we've got to give you the data points, not because you want to have envy, because you want to be jealous of somebody, because you just need to try to figure out, hey, how do I triage and look at my personal financial life and make sure I am doing everything I'm supposed to?

44:58And that's what we're here for. If you go to moneyguy.com slash resources, we will load you up with tons of free content, data, tools, dashboards, calculators. Everything's just waiting there for you because that way, if you're in your early 20s, if you're in your 30s, if you're in your 40s and you're excited and motivated to know what you can do, we'll meet you there. And if you do this long enough, and this is what we know, and this is why we call it the abundance cycle, that you will be rewarded is that all of a sudden those small little decisions that are very fruitful for your long-term self will create so much success that your simple life becomes wildly complex.

45:39And guess what? That's where we leave the porch light on for you. And we've realized that enough of you financial mutants, man, you already resemble our clients in a lot of ways. Maybe we just caught you a few years earlier in the journey before you become full on a bound wealth client, but this is your, your kind of your invitation. If you resemble and recognize yourself in those behaviors, but you just know, Hey, yeah, these guys are right. I crossed into seven figure and this is getting somewhat complex because I don't know what I don't know. I don't know where my blind spots are. This is my first time being here.

46:11And I'd love to have somebody who's done this hundreds, if not thousands of times, we are right there for you. Consider going to moneyguy.com slash becomeaclient, and we will hook you up. I'm your host, Brian Preston, Mr. Bo Hanson. For the rest of the Money Guy crew, Money Guy out.

46:29Brian 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.

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