Can You Still Buy a Home in 2025? | Ask Money Guy

20:01Brian Preston:Yeah. A lot of people, you get to choose. If your employer says, hey, if you participate in the HSA, I'm going to fund and put a thousand bucks in there. We see employers that do that all the time. They may say, hey, you have to use this custodian and this is where I'm going to put the thousand bucks. Or if they say, hey, if you want to be able to do salary deferrals, you want to be able to defer from your paycheck, your HSA contributions, you got to use this custodian, then yeah, you got to use that one. But for most custodians, if you've been able to build up assets over time, and Matthew, you're doing exactly what you said, hey, I'm actually investing these dollars and they're growing.

20:32Brian Preston:One of the things you can do is you can go open up health savings account and another low cost provider. One that we see a lot of folks like to use is Fidelity. They have an HSA that you can go open up. And while you may still have this HSA at your employer that maybe your employer puts money into or maybe your salary deferrals get into, over a certain threshold, I'm willing to bet that you could do a transfer of assets where you move some chunk of these HSA dollars over to a different custodian, whoever that custodian may be, where you get the entire open access to the whole universe of investments and you get to buy really, really low cost index funds.

21:07Brian Preston:You don't have to pay any of the ongoing maintenance fees like you're paying with your current one. So if your HSA balance is large enough to justify having two separate accounts, it may be something worth investigating to see if you can get those fees down. That's great. Yeah. Awesome. Matthew, thank you for the question. And I hope that that helps you with your HSA. Before you ask the next question, I always like to be transparent because I don't want people to see my face change every time I drink a slug of water and go, what is wrong? What is wrong? I made a horrible mistake. Is that, you know, because we obviously like to stay hydrated around here my water is lukewarm like they obviously just reloaded the fridge and when i just ran by and grabbed so this thing every time i take a sip i'm like you know sparkling water is great but hot sparkling water is not i got the what's so funny is i got the exact same we pulled it out of the same fridge and i got the exact same flavor so i wonder if i just happened to get lucky that i got a refrigerated one and you got a man yeah this is this is life by the way look at bo this is a salt salt shaker of talents guy got distracted on Bo got a little extra in there meanwhile he was this guy gets this much dollop here and keep it going keep it moving one of my greatest talents is knowing which one of the drinks is cold in the refrigerator obviously it is salt shaker of talents that's awesome cold drinks for Bo alright we have a question from DJ she's like I'm gonna ask a question I am gonna ask a question he says just found you guys a month ago.

22:40Brian Preston:It's a perfect time. I know. That's incredible. We're glad you're here. I don't have enough in my emergency fund. That's why it's perfect time. He says, I'm having trouble deciding to stop my HSA and lower my 401k amount, except the match. I'm at 423k in my 401k. Do I really stop all of those to fund my emergency fund more? I'm 40 years old. How do you think about this? So he's clearly digging into the financial order of operations and the step-by-step guide, which is amazing. What do you think? Because he did ask it in a nuanced way and the fact that he said, but obviously I want to keep getting the employer match.

23:20And that is, I mean, he is trying to follow the financial order of operations to a T because just as a reminder because there's a lot of you guys who discovered us every month. You know, the first, and I'll it just showed up on the screen that there was a food sighting so i got to make sure i show the laminated version of this thing um you know first step number one highest deductible covered that's so you don't want to make those desperate decisions number two is that free employer money because there's more than likely if your employer is giving you free money they're giving you that's like a guaranteed 50 to 100 rate of return depending on what their matching formula is number three we got to avoid that high interest debt because you're never going to get ahead if you're paying 20 plus percent to a bank and then here we are we land at step four which is the emergency reserves trying to get you to a fully funded emergency reserve so you don't have to worry about do you lose your job or have a big thing come your way i do think it's because you've been okay and the fact that you have a 401k with 423 000 as a 40 year old that's pretty incredible but i will say emergencies it's not if they happen it's when they happen um matter of fact we even have a chart that we show the way people think foo works versus what actually happens in reality and um i always remind people it's not uncommon that you're going to have things happen to you whether it's your choice that you buy like this example shows whether you buy a house or your car breaks down or you have the unfortunate thing of you lose a job is more than likely you're going to go back to that step four.

24:53I do think it's so important so you don't make those desperate decisions. Yeah, let's load that thing up. Get the free money from your employer, but let's make sure you're protected.

25:03Brian Preston:Yeah, I'd want to know, where is your emergency fund presently? Like how lean is it in terms of what you have access to? You know, we say that for most folks to have a fully funded step four emergency fund, you want somewhere between three months of living expenses to six months of living expenses. Well, if you're like five months and you're one month off, it shouldn't take you very long to build back that emergency fund so that then you could get back to the HSA and back to the 401k. If you are really, really lean and maybe you've only got one month of living expenses in your emergency fund, you're really out there on the risk spectrum.

25:38Brian Preston:You are far enough out that if one thing happens, if you have that medical issue or if you have that job loss or if you have that AC go out, if you have that fill in the blank and you don't have any liquidity available, the only way you're going to be able to satisfy that is likely to go even further back in the financial order of operations and put it on the credit card and go to step three and start accumulating high interest debt. And so we like seeing a fully funded emergency fund so that you can prepare and be prepared for those unknown unknowns. So yeah, if you have to stop the HSA to do that, if you stop the 401k, accept the match, do that.

26:13Brian Preston:I think that's okay. Let that be a motivating factor to get you to go solve that, fill that bucket up really, really quickly, and then get back to saving as fast as you can. Because even at 40 years old, every dollar is still pretty powerful. If you go to moneyguide.com slash resources and check out our wealth multiplier, every dollar for a 40 year old can still turn into seven dollars by the time you retire. So if you think about the work that you've done thus far to have four hundred and twenty three thousand dollars invested, take that, multiply it by seven. That's what you're on track for.

26:45Brian Preston:Even if you do have to take a temporary pause, a temporary hiatus, do it, fill up the emergency fund and then get back to saving as quickly as you can. And let the fact that that you're not saving as much as you want to be saving be the motivator that gets you out of that as fast as possible. Love it. Because that's what i always that's another reason i like it when sometimes you have to go back because it's going to give you the focus that you just won't be comfortable that because you know how valuable every dollar that you're missing out on getting to work is but hopefully will fuel you to get back on track as fast as possible love that thanks for the question dj and welcome to the money guy family that's my that's me is that you i don't know what i'm over here doing but i was like that's My shoes are making way too much squeaking noise.

27:30Brian Preston:Honestly, I thought it was an animal. I thought it was like a squirrel or a chipmunk or something. It sounded like someone was chewing through some lines here anytime. Nope, just nervous old Ticky Brian over here just moving his feet way too much. It's probably better than it being an animal in the walls or something where Bo was going. So we'll take it. Nervous old Ticky Brian. Next question is from a random guy on YouTube. Are we all? This is the random guy on YouTube. it says if stock if the if the stock market averages seven to eight percent annually why is a safe withdrawal rate four percent and not seven oh yeah it's a great question classic great question yeah i see this all the time um you know there's some people out there who say oh you know stock and actually if you think about the stock market like s &p 500 and you look at it over the last 50 60 70 years it's annualized somewhere like 10 or 11 so even better than the 7 % to 8 % that you're kind of throwing out there.

28:26Brian Preston:And we'll see some folks out there say, man, the market makes 10%. You should be able to withdraw 8%. You got a 2 % spread. You're going to be okay. There's a few problems with that. The number one problem of which the market doesn't deliver these nice little even chunks. If you were to plot out the S &P 500 return every year from like 1950 till now, it would be all over the place. There'd be, you know, up 20%, down 17%, up 6%, down 4%, up 13%. And it would be all over the place. And there would be no rhyme or reason or order to it. But if you were to average all those years, yeah, it would come up to one of those average numbers.

29:03Brian Preston:The problem is, is that what you want in a safe withdrawal rate is you don't want your cashflow that you're pulling to be going all over the place with the market. You don't want to be like, okay, man, this year I can live off of X dollars, but man, next year I going to live off 20 % less than I lived on last year. So that's why when they did the Trinity study, they arrived at a sustainable long-term safe withdrawal rate of about 4 % should be able to sustain all market environments, or at least historically has sustained all market environments since like 1950 without any of that really unfortunate sequence of return risk causing you to run out of money.

29:44Brian Preston:So the reason why it's not equal to the rate of return is because the returns are not linear in how they're delivered. But also, the returns that you earn aren't just market returns either. Well, I always also remind people is so many of us financial mutants, you know, we live this life where we make a good income, we're disciplined, we live on less than we make. But I will tell you, as you get to the point that you're actually walking through the threshold, that you're no longer going to be living off your income, but you're going to be living off of your capital, meaning your investments. It does some weird things to you mentally that a lot of people that I always tell people, we want to be more conservative with the assumptions because, and this is why, because there's also vu for life people, you know, they don't want to diversify.

30:35They don't want to do anything to minimize risk because they like maximizing those rates of returns because they're good financial mutants. But this is why we use a 4 % withdrawal rule also, not just a trinity, but it's also because it lets you see to be conservative for not only the sequence of returns risk, but also just that transition as you've got to think about how you're going to go into the fact of living off of your capital. And if the market gets its teeth kicked in in the first two years, you're going to freak out. I just want to go ahead and prepare you. And you can imagine if you haven't taken into account not only the planning, but also the allocation, there's just a lot of things that go into it.

31:17Now, if you're a person who wrote this random guy on YouTube and you're in your 30s and you're decades from retiring, rock and roll and go out there and build your best life. But always worry about somebody who's watching this content who's 50 years old. And maybe they know that they need to be thinking beyond just the basics. and that's where it's not even the 4 % safe withdrawal rate is going to keep you protected because we all know that your financial life is just like your fingerprints. It's very personal. And we all come in different shapes, different sizes, different account structures, different goals, different risk profiles.

31:52You got to get out there and get a plan that actually reflects what you look like, not just what some rule of thumb or some other way. That's where the personal and personal finance really does get specific to you so that you can live your best life.

32:05Brian Preston:Yeah. As a brief aside, the safe withdrawal rate or any sort of safe withdrawal rate calculation is good for helping you kind of calculate back of the napkin math, back of the napkin retirement planning, or maybe even a little more formalized than back of the napkin. But what happens for a lot of our clients, because we get to sit in the seat, we work with clients all over the country that are either approaching retirement, at retirement, near retirement, want to retire one day. What happens in actuality is that their withdrawal rates are never like a flat static 4%. You look at their lifetime cash flow from the time that they retire until the end of the planning period.

32:41Brian Preston:And they might have a series or a season where it's like, you know, 7%, 8%, 9%, 9%, 9%. And then social security kicks in and it's like, okay, well now it's down to 4%, 5%. Then this other thing happens. They sell this asset. Okay. Well, now it's down to like 2%, 1%. It is much more dynamic than a lot of people realize. 4 % is great to use for casting a future vision, giving you an idea of what the finish line looks like. But when you actually get to the finish line, it's not really a finish. It's the start of a whole new journey. And that journey is pretty dynamic when it comes to how you actually manage your capital over that season of life.

33:20Brian Preston:That's great. Random guy on YouTube. Great question. Thanks for being here. This episode is brought to you by Accenture. When your advertising operations fall out of sync, everything else follows. Spotify and Accenture are working together to reinvent the rhythm of ad sales, using automation, analytics, and smarter workflows to simplify campaign delivery and access better data across the business. The result? Less time spent on operations, more time connecting brands with the moments and fandoms that matter most. Learn more at Accenture.com slash Spotify. When you need to build up your team to handle the growing chaos at work, use Indeed Sponsored Jobs.

34:01Brian Preston:It gives your job post the boost it needs to be seen and helps reach people with the right skills, certifications and more. 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. Flax question is up next. Hi, Money Guy. We are on step nine. We will buy a newer vehicle in the next 12 to 18 months. We've got enough in a taxable account to buy the car in cash.

34:41Brian Preston:How do we know when to sell those assets to buy the car? I mean, I have my immediate thought. You want me to share my immediate thought? Yeah, go ahead and share your immediate thought. When it comes to near-term expenses, 12 to 18 months, I am always a proponent of one in the hand is worth two in the bush. I would rather have the capital today because I don't know what the market is going to do over the next 12 to 18 months. I may get greedy and say, okay, you know what? I'm not going to buy this car for a year, so I'm going to leave all these dollars invested over the next year, and then right before I go to the dealership, then I'll pull it out.

35:20Brian Preston:Well, what happens if COVID happens between now and the time that I get to the dealership? Or what happens if fourth quarter of 2018 happens? Or what if the entire calendar year of 2022 happens? And when I need that money the most, the market just happens to be down. If I know that I'm going to have this expense and I know that it's going to be in the next 12 to 18 months, I'm probably thinking today, man, I want to go and have that capital. I'm going to free it up. I'm going to place the trades. I'm going to have it available. And then what I can do is I can park it in like a high yield money market fund, earning like 4 % right now, but I don't have to worry about risk of loss of principal.

35:54Brian Preston:I think that's the way that I would think about it. Yeah. I mean, this just becomes an extension of step four, your emergency reserves. Sinking funds are a lot of people, when you have a known thing that you're planning for, it's not uncommon that you're, and we see it all the time with prospects who come in too, is that your emergency reserves, there's a portion that is definitely your three to six months, but then there's also additional cash reserves. And people always say, Hey, that's earmarked for my daughter's getting married in three years or two years or hey i need to buy a new car oh or we're saving up a down payment for a mountain cottage you know i see this stuff all the time so you financial mutants you naturally get it is that sometimes when you have things that are short-term goals meaning that they're going to happen in the next three years don't get cute exactly what bo said just make them an extension of your emergency reserves add those sinking funds on top maximize them we love high yield savings accounts and and other things that give you that security of cash and liquidity, but also let's maximize this like financial mutants are so that we're actually making a little bit of money on that as well.

36:57Brian Preston:Yeah, that's great. Congrats on being in step nine, Flack. Yeah, that's a big deal. And I hope that that helps you think through this next purchase. Cooper's question is next. It says, can you explain a tiered match for a company 401k? my new company offers 100 % of 1 % of a 1 % match and 50 % for a 1 % to 6 % match. Sounds like Cooper is confused. Yeah. Can you help him out? Sure. So basically giving them 4%. If they put in 6. 1 to 6 or 1 to 7? Was it 1 to 6? It says 1 to 6. He gets 50%. Okay. Yep, that's right. So they'll get 3%. No, it's going to be less than that, right? It's going to be less than that.

37:43Brian Preston:It's going to be less than that. So the way a tiered match works says, hey, for the first part you put in, we're going to do this. And then for the second part, we're going to do something different. So in this case, if you put in 1%, they'll give you 100 % match. So then they will put in 1%. Well, then when you put in your next percent, so now you're going to put in 2%, they're only going to give you 50 cents on that dollar. So you put in 2%, your match is 1.5%. You get the one that you put in plus half. And so you'd follow that math all the way up to six. So, you know, and I get real nervous because it's public math.

38:14Brian Preston:But if you're going from 2 % to 6%, 5%, 2.5%, 3.5 % match. That is right, right? Somebody fact check us on that. If you put in 6%, you get a 3.5 % match, 100 % of the first, and then the tiered part kicks in after that. So the question becomes, well, how much should I save? How much should I put in if I have a tiered matching structure, Brian? Well, on this one, I'd still put in 6%. You put in all of it. You want to get all the free money. How much free money do you not like? Because, now look, it's like a child. You know, you look at that first dollar, that first 1%, you're like, I love 100%.

38:49That's dollar for dollar. That's some good getting right there. But then you look at it and you go, you know, 50 cents on the dollar is still 50%. 50 % rate of return. There's not many accounts out there that are paying me 50%. So I'm getting all the 6%. I'm putting all 6 % so I can get my 2.5%.

39:07Brian Preston:There you go, Cooper. Go take advantage of that free money. all right Sergio has a question he says please tell us how y 'all feel about house hacking I am 35 and thinking about it so how do you feel about house hacking and can you give a little definition for the newbies you said what I said two and a half it's three and a half percent on oh on the last question yeah it's fine I just hate public math I was like that doesn't make Two and a half on six. It should be greater than 50%. Daggum it. Okay. Restart the question for Sergio. I apologize. It's just public math once again comes back, and it's like a yippity dog that ran up and bit my ankle, and now I'm sitting here trying to recover from it.

39:52Brian Preston:Three and a half percent. All right. Well, hey, cleared the air. We got that out of the way. You want me to tell you Sergio's question? Tell me Sergio's question. Is this going to blow it up, though? Because Rebe is supposed to be the one that reaches his question. No, I mean, Bo was the OG. He did it before me. Go ahead. what was sergio's question it said please tell us how y 'all feel about house hacking i am 35 and thinking about it how do you feel about house hacking i love house hacking brian what is house hacking house hacking is and i've covered this earlier is one of the great ways that you're you're maximizing the housing system legally because we all know well i mean i'm giving technical you're basically using other people's money to help you pay for your primary residence So that's probably the easiest way to talk about house hacking.

40:39And what I mean by that is that traditionally it could be roommates. So you buy a condo and you got two college buddies that you like hanging out. And you're like, hey, you know what? Instead of us all paying rent to an apartment complex, I'm going to buy this condo. Y 'all pay the rent to me. And you're essentially their landlord. That's house hacking. There's also you could buy a duplex. You could buy a quadplex. And you're just going to live in one of those parts of the house. So it's still your primary residence. So that's what house hacking is, is using other people's money to help you buy your primary residence.

41:09Now, why is this such an advantageous thing? It's because banks give you the benefit. When you live in the house, it's your primary residence. That means it's less risk to the lender because they're like, man, the last thing you're going to pass up on is giving up on the house that you live in because that's the shelter for you and your family. So they give you a preferred lending rate, a lower mortgage rate. Now, Now, where people run afoul of this is, is that whenever that lending question is asked, is this future purchase, is this going to be for your primary residence? We've done reaction videos where people constantly are saying, on going to buy a rental property and say, yeah, just tell them it's your primary residence that you qualify for the lower rate.

41:53That's mortgage fraud. That is fraud. And you're starting to see, because it seems so innocent. If I check this box or answer this question, I'll be safe. No, false. It's like, you know, you have to be careful of these things. That's why I love house hacking is because it's legal. It's legitimate. You are actually checking that box, getting the lower mortgage rate, but also getting other people's money to help you fund this housing purchase.

42:16Brian Preston:Two things that I added to that. When you think about house hacking, and this was Sergio, don't overextend. Far too often people say, oh, you know what I can do? If I bring in roommates and I have other people, I can buy a more expensive house. I can go further out on the cost spectrum because I have people offsetting. If you do that, there's a good chance you're going to put yourself in way too risky of a situation. Because what happens if those roommates don't show up? Or what if they do and then move? Or what if you have vacancy? Or what if it doesn't go the way that you think it should go?

42:46Brian Preston:So if you're thinking about house hacking, you should prepare the 3D plan. What's the dream scenario? What's the most likely scenario? And then what's that doo-doo scenario? What if things go really, really bad? Can I float this house by myself? So that's don't overextend on the financial side. The other thing that I would encourage you to think about is be careful not to overextend on the quality of life side. While house hacking is wonderful and amazing and it can be an incredibly valuable thing financially, it does not necessarily make sense in all circumstances. If you are someone and you have other people that live with you, like a spouse or like kids, you may not want to have somebody renting out a room.

43:25Brian Preston:You may not want someone else to be taking over your garage apart. You may not. So make sure that just because it could make sense financially, it also needs to line up on all the other non-financial stuff. Do I actually want to have a roommate? Do I actually want to have someone else's dishes in the sink? Do I actually want to go through these things? Because again, financially on the brochure, it can look amazing. But in actuality, if that's not the way that you want to be living your life, you don't want to do it strictly and solely for the financial reasons. I can't help but think when you just said that, is it's all because you're Big Spoons Hanson.

43:59From the four months that you and your wife lived with us as y 'all were moving up here, y 'all lived with us. And my oldest daughter, I let Bo know a few years ago that she actually, his nickname around the house was Big Spoons Hanson because while Bo lived with us, he was during his phase where the way he was saving money was just eating cereal. So he was using every big spoon, according to my daughter, that there was never any when she'd come down to need a spoon, old big spoon Hanson, and use them all.

44:31Brian Preston:You know, it's so funny because this was like, you know, over a decade ago that all this took place. It was the absolute best case house hacking scenario for me. And just a horrible decision for you. I had no rent coming down. You didn't get anything for that. He's not only using all the big spoons. I don't think that counts as house hacking. That's called freeloading. Me and Jenna, my wife and I, we were house hacking. I was going to say friendship. Who's going to count over here? It was great. Friendship, freeloading, I don't know. We didn't pay any rent for that. I didn't realize that I was scarring my oldest child also.

45:04Keeping her from those cereal spoons.

45:06Brian Preston:No, that's memories. That's childhood building is what that is. That's right. Big spoons, handsome. Life lesson. Oh, my goodness. All right. Ready for the next one? Yes, ma 'am. Just hanging 95 says, my wife has a 25 % match on her 403b with no cap. Great, I know. Is it irresponsible to work on maxing that out before building an emergency fund? We are 30 years old with a six-month-old. Gosh. This is a good food question. We get this one, though, and every time we get this one, I don't like this question. Stop asking this question. I don't like this question. They need to know. Well, yeah. I mean, this one's a pickle.

45:57Brian Preston:So let's talk about the logistics. Why does it hurt you? Yes, let's just talk about it. For those of you that don't recognize, you know, 403B operates the same way as like a 401K, where you can put up to$23 ,500 if you're under the age of 50. And so what this is saying is, hey, if we put in$23 ,500 all the way up to the salary deferral max, we're going to get a 25 % match on that. So if I put that 23 ,500 in there, I'm going to get$5 ,875 as a match. It's$5 ,875 of absolutely free money. And if I'm following the financial order of operations, Brian, we hold the thing up. Step two says, hey, I need to absolutely go get all the free money that I can go get, even before I pay off credit cards and even before I have an emergency fund.

46:42Brian Preston:And that is true. We do think that. That is the way that it's built. But man, just hanging, buried this thing in there, said I'm married. I got, was it six month old? I got like a brand new baby in the house. Six month old, yeah. And so again, I would be thinking about, okay. There's a risk overlay here. Where are the risks here? And if I literally have no liquidity and something bad were to happen. Now, I guess in theory, if something bad were to happen and you have credit cards and you have available credit, you could go put money on credit cards. You could rack up a bunch of credit card debt.

47:14Brian Preston:That seems less than ideal. So I would try to think through, is there some way we could do both? Is there some way we could get creative where we are able to build up an emergency fund? We are able to satisfy and complete step four. And at the same, not at the same time, but in also doing that, am I able to take advantage of this free employer match so that I have some risk management in place for my family as well? I immediately had a visual of a bell curve. And if you think about the financial order of operations, We have built the all-terrain vehicle that captures every Sigma for, I would say, 99 % of the population.

47:55The big meaty part of the ball curve. But good congratulations to Rebe for finding the needle in the haystack is that this is an outlier. So because of that, I'm going to tell you the financial mutants answer on this is that you have steps one through four. You've now, because of this question, you would have a connection between them. is because they are all interconnected. And the fact that you're going to have your highest deductible, we're already going to do that first because that's keeping you from making those desperate decisions. But now you have such a great match that you have a 25 % guaranteed rate of return up to 25 % of your spouse's income.

48:31That's pretty spectacular. So now we have to look at steps three and four from a risk standpoint. Obviously, we don't want you having high interest debt. I didn't hear that in your question, So I'm just going to assume we're out of that. So now we get to step four. I would have a very honest conversation with myself, especially if you have young children in the house. You've got this great opportunity is that you've got to risk assess because that's what it's back to the heart of what step one and step four is cash is so important in my financial world of operations that it actually has two steps.

49:02So we've got to respect that and say, what is my actual exposure here? And figure out, OK, what's is that three months? Is that four months? and then I would do exactly what Bo said is because the getting is so good on this 25%, I would now figure out how I can back into still respecting step four so that I could make that all happen. They're interconnected. Instead of this being what to do with your next dialer, you're kind of now having to think about steps one through four as interconnected because you are the outlier that's found the one in a hundred that you have an employer that is so generous that it kind of breaks the traditional systems.

49:44Brian Preston:I love it. I'm trying to think about what would I do. If it were me, if I were 30 and I had a six-month-old and this were available, I'd figure out how to do both. But it might mean that you're only doing 15 % because you have to fill up the employer. I was going to say, do you have to do all 25 right now? Right, yeah. You might only be doing 15 % because you're loading up a big chunk into that emergency fund. If you have a kid, you have to. But it's the same thing. I gave an answer earlier is that I always want there to be like a ticking clock in the background that creates emphasis and pressure is that that's why I think it is one of those things why they're interconnected is because maybe your wife only gets to do 12 to 15 percent towards her employer plan you know like gosh but I'm leaving half of that match on the table but no it's because for the next four months you're loading up that emergency reserves and now you're coming back and you're and maybe you're getting a bonus maybe she gets a bonus at the end of the year that you get to say, hey, I want to allocate 60 % of that bonus to go catch up and make sure I'm getting the full match on that.

50:41There's all kind of ways to really squeeze the balloon and really maximize this financial mutant opportunity.

50:49Brian Preston:Well, I think that was a great question. Thank you for being here and asking it. I feel like Rebe, you know, it is always trying to break the rules. She is. She's trying to break the system. That's me, a rule break. Can you imagine? She's in the power position. Imagine if the operator at Ramsey Solutions said, let's send Dave every question that tries to break his things, because Dave just doesn't break his rules. He just is like, no, this is the rule. This is it. You guys are like more. Honestly, you're a little more realistic in this way. You found the one. Congratulations. Sorry, that was my water bottle.

51:28We all got fidgety feet around here.

51:30Brian Preston:Yeah, I'm pulled, Brian. Oh, thank you. okay well done though Reby you too win a Tumblr today it's not even a Tumblr today now everybody's going to be mad at me for it come on Brian you get a one off Tumblr only you get a Tumblr I don't even win one that's hilarious alright Jason S has a question for you next he says what percent of your clients are asking to invest in Bitcoin and Ethereum. Ruby is feeling saucy today. And I would add, I've seen some questions just about what do you think about Bitcoin? How much of your money should be going towards Bitcoin that you're investing towards retirement in the future?

52:15I'm going to let Beau answer this first. No, bro, this one's you. Beau just came back from a weekend with a bunch of business people that he holds in high esteem. And he was telling me that deep conversations.

52:27Brian Preston:Topic of conversation. All right. What percent of your clients are asking to invest in Bitcoin or Ethereum? That's an easy answer on that one. Yeah, what would you say? What would you say percentage? I mean, of my clients, probably less than 3 % have asked that question. Yeah, and it's probably age demographic of your clients and that sort of thing. I would say mine's probably a little bit higher than that. Clients that are curious, not so much asking about investing in it, but more asking, what are your thoughts on this? How do you feel about this? And this one's really, really interesting because we've done a lot of content on cryptocurrencies and that sort of thing over the years.

53:06Brian Preston:And at the time, what we said was, hey, this is a very speculative investment. There's a lot of unknown unknowns. But what happens with any sort of early stage investment is that it's speculative in the beginning, but then things begin to kind of morph and change where it perhaps is less speculative only because there's more time, there's more understanding of it. And so I think one of the things that's really interesting is what do we think about Bitcoin or Ethereum? I'm going to speak for me personally. Is that fair? No, you can do it. It's not something that I am currently investing in. It's not something because there's some fundamental issues I have with what it is and how it specifically actually operates.

53:45Brian Preston:Like the thing that makes it more valuable is someone coming along behind and being willing to pay more for it. So a lot of people would like compare it to some sort of commodity like gold or something like that. And in that same vein, I personally am not investing in gold either. But there are some like interesting and compelling academic arguments about around what the future could potentially look like. But I'm not there just yet. I'm not there right now. But it is one of those things that I want to make sure that I'm staying informed and I'm staying educated and understand what is going on there and what's happening in that space.

54:20Brian Preston:So i'm watching and i'm learning and i'm understanding But for me personally, it's not something that i'm allocating dollars to right now because I cannot get over the fundamental threshold Of why it would be a positive return on investment for my dollars to go in there It's again It's the thing that makes it more valuable is somebody coming along behind me and being willing to pay more It's not something that at this point in time creates Innovation a product sells a service grows revenue that's not the way that it's operating right now so i'm still i'm still in the investigation so i dabbled in bitcoin and ethereum for for a bit because i felt like i had so many people throwing it my way i was like it it's not right for me to have an opinion on this unless i'm doing something to really better myself on understanding this and the first thing that shocked me about it and this is why i don't it's not a currency it is more of a speculative play I still stand by that because it does remind me of the way the volatility of a hard asset like a gold and other things is because it does the fluctuation in pricing on a daily basis was I got whipsawed by it.

55:28I was shocked that there was multiple percentage changes every day. And currencies don't move like that. Can you imagine that if you were trying to do daily transactions and the cost of a – because Warren Buffett always uses a can of Coca-Cola. And from the time I purchase – tell you I want this Coca-Cola, instead of it being$1.50, it's$2.25 or$2.50. Because there really are some wild swings, 5%, 6%. I know the numbers I just used was greater than five, but you catch the drift of if price is changed by the minute by percentages, it makes it hard to do cash type transactions. Then it goes to is it just a hard asset that you're investing in?

56:18Yeah, you could make an argument for is this a systemic risk protection? Just like you see people who are so wealthy that they go and, you know, once they're worth 10 million plus, maybe they could put, you know, a few million dollars in a trust in a Cayman bank account or some other sort of like contingency planning bank account or something just in case the America fell apart. OK, maybe maybe there's some value in that, but that's not the typical American investor has 10 million dollars plus and they should be worried about systemic risk. So it's it's back to your core problem. And then I'll tell you another thing that just is sitting out there and it troubles me is that when the IRS put on tax returns, the question right along the top, are you partaking or participating in crypto type transactions?

57:08That was a red flag for me of just what is the government trying to set up? Because I think a lot of people think that this is outside of government. This is why you buy and you do crypto. And yeah, maybe it is, but it seems like the government, you always have to pay your taxes. And I'm just telling you, be careful if this is something where, because there's a reason they're asking those questions on the return, is that there's potentially a trap laying in wait because they know if you have, you know, maybe if you have a cold storage wallet, they don't know about it. But it's still, this stuff is still somewhat traceable.

57:39And especially if you're dealing with Coinbase and some of these other wallets, they can see your transactions. A lot of people are always surprised. Like when you go through an SEC audit, a lot of you guys don't probably realize this. the SEC already knows all the transactions that our clients do. They ask us to show them when they ask these questions, but they already know it and they cross-reference them. It's kind of like you're matching transaction with the IRS. When they send you that letter, they're going to ask you, hey, show proof that you have this. They have a lot of this stuff is already reported.

58:12Their system's already, it's already part of it. And so that part of it, I understand people thinking that they have some protection from that, but I'm also telling you that what you perceive as insulation or protection from getting outside of government also could be the trap that could be trouble. I know I went, because I've tried, I've really thought about this in some heavy ways and I'm not against. Well, that's what. But it's just one of those things, I think it's just no, you have to do a lot of research and understanding because the thought answer of anybody who's doing crypto heavily is they tell you if you have any questions about it, you just don't understand it.

58:48And anybody who ever tells me I'm just not smart enough to understand it, that the dumb factor is why I don't get it, is I'm like, no, you don't know how much I'm trying to figure out how this fits. Because what a lot of people don't know, when you manage people's retirement, the weight of knowing that whatever decisions I make for you and for telling you you're okay, you're financially independent, you can walk through the threshold of no longer working, it takes an emotional toll. if you're doing this right, you feel that weight of making good decisions. So I've tried to make sure I'm understanding all these things.

59:25So I'll never tell a client, if they tell me they want to do this, good. But it's the same thing that I would tell them if they were telling me they're doing any other type of investment that has some type of speculation. Let's just not get crazy with it.

59:35Brian Preston:That's what I was going to say. When I invest my money, I'm not buying individual stocks. I don't think that is the highest probability outcome for me having long-term financial success. that doesn't mean that I would tell someone, hey, don't go own any individual stocks. If there is a company that you're interested in or a reason why you might want to purchase an individual stock of a company, I'm not going to fight you on that. And that's the position that I've taken with a lot of my clients who have questions around cryptocurrencies and Bitcoin specifically. If it's something that you do want to speculate in, there is nothing wrong with speculating, assuming you're at the point in the financial order of operations, where that makes sense.

1:00:13Brian Preston:where I begin to get very uncomfortable is when someone takes the position that this is the only way to build wealth and I am so deeply convicted by it that I'm going to go all in on that. That's where I'm like, ooh. Or cash reserves. People treating Bitcoin as a cash reserves equivalency, that scares me. The volatility would not substantiate that it would be an equivalent cash reserve. That's not the way that emergency reserves and liquidity exist. So if it is something that you are interested in, you just need to figure out, Is it part of my financial plan? Am I at the stage where that makes sense?

1:00:47Brian Preston:We're not going to fault you on that. We just think that when it comes to building wealth and building towards financial independence, presently there are other higher probability ways with a more proven track record to be able to get to that place. It's all under that umbrella. Make wealth, maintain wealth, and then multiply wealth. This is definitely something that if you're at that stage, I'm just not going to let you put 80 % of your assets in something because the maintain wealth, it scares me because there's just too much volatility. But that doesn't mean there's not individuals that are out there so convinced about this.

1:01:22I just know that I've worked with too many people that have been at that maintain wealth phase and then just took too much risk on that you don't want to go back to being poor. I can just tell you, you do not want to go back to being poor because you're not always guaranteed that you'll be able to get back to where you were. Yep.

1:01:40Brian Preston:That was a very deep conversation about Bitcoin. What about Rebe dropping bombs? Can I go Rogue one more time? While we're eating our lunch, we're going to be like, Rebe, you were just popping us around a little bit today. Give me some feedback later. I'll take it. I'm going to go Rogue one more time and say a lot of people want to know if you bought everybody ice cream with your$1 ,000 you won by lifting the motorcycle on the Bikes and Beard channel, our accidental collab. I was thinking. I was thinking after, you know, because I played the part of Jimmy Hart and I was running around. and I was doing you didn't want no nobody's old enough to get that I didn't get it I was trying to walk around get everything get the hype machine going I don't know if everybody heard the cheers afterwards and I could distinctly hear my voice in those cheers even louder because so I was wondering where my Jimmy Hart you know 10 % commission cut was there wasn't for those of you who don't know really cool YouTube channel is it Bikes and Beards or Bikers and Beards I want to make sure Bikers and Beards.

1:02:40Brian Preston:Bikers and Beards. Yes. Really cool YouTube channel. They were set out on the square here in downtown Franklin. If you've been to our office, you know our office is right here on the square. And a bunch of our folks went out there and he was doing a$1 ,000 giveaway. Hey, if you can lift up this motorcycle, it's$20. This one, it's$100. This one, it's$1 ,000. And so they had people crowded around just kind of like seeing how that went. And sure enough, we were able to go down there and lift all three of them. So we ended up getting$1 ,000 and it was awesome. He used the word we. and beast-moded that thing up.

1:03:12Brian Preston:It was a team effort, and it was super awesome. And no, I have not decided what to do with my$1 ,000. Maybe I'll go buy some Bitcoin. How much Bitcoin with$1 ,000 in cash? Bring it full circle. It wouldn't buy much. It would buy a lot more 10 years ago. Oh, man. Someone even recognized Mouth of the South. Man, I love that. That's such a good reference. I do resemble Mouth of the South. Uh-huh. It's literally, it was Jimmy Hart. That's actually about to jump in. My folks, this is why. I think younger people will be like, how is Brian even, why do they even have Brian on the show? I'll be like, trust me, there's enough of the audience out there that resembles me that they get it.

1:03:52Brian Preston:Oh, yeah. Oh, man. All right. You guys are cool. Remember, if you want to keep talking and keep thinking and keep applying about the things that we've talked about on the show today, just go to moneyguy.com slash resources. All of the calculators and downloads that we've mentioned are there free for you to use. So definitely go check that out. Moneyguy.com slash resources. We'll be back here at Tuesday, 10 a.m. Central live, answering your questions. Well, and by the way, we even gave a shout out to that clip of Bo. It was a little after the 22 minute mark for any of those that go find it in our newsletter.

1:04:25So if you're not, if you think that, hey, I don't want to sign up for this newsletter because it's just going to be boring stuff. No, we even put in there so you can see what a unit Bo is out there lifting up motorcycles in our newsletter. So this thing is fun. It's very on brand for all of you financial mutants where you get the best of the nerdiness, you get the analytics, but you also get enough of life sprinkled in there so that you can know, yeah, these are my folks. Guys, we absolutely love creating this type of content. I'm your host, Brian, joined by the unit, Mr. Bo, as well as by Reby and the rest of the content team.

1:05:00Money Guy team, out.

1:05:01Brian 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.

1:05:31Brian Preston:All investments involve a degree of risk, including the risk of loss. Hello. Look what TJ Maxx dragged in. The Devil Wears Prada 2 is now streaming on Disney Plus and Hulu. We are digital. We are downloadable. We are streamable. The fashion event of the year is certified fresh. Pull yourself together. We have work to do. Critics say it's smart and witty and the perfect sequel. That's all. Get runway ready for The Devil Wears Prada 2 on Disney Plus and Hulu. Rated PG-13. Close your eyes, exhale, feel your body relax, and let go of whatever you're carrying today. Well, I'm letting go of the worry that I wouldn't get my new contacts in time for this class.

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