Everyday Investors Are Beating Fund Managers (Copy Their Strategy)

19:21Brian Preston:But go to moneyguy.com and you can subscribe to our email newsletter too. You remember when you said we got so good at this? Yeah, I know. You were like, we're doing so good. Let's just derail it a little bit. But now let's get it back on the rails. We have a question from FooFighter66 up next. It says, good morning, Brian and Bo. I'm 29 with one times saves. So I think he means one times his income saved. He's on his schedule. And he's on step five. My dad, 65, invited me on a 5K moose hunting trip next October. Likely his last. That's so sad. I don't like that we're already thinking through that.

20:00Brian Preston:But he says, I want to go but feel guilty. Thoughts? Go. Also, you got until next October. Go. I mean, so I would find out how long you can stretch out the payments. But, yeah, I mean, and then also, you know, look, you know your parents' situation better. I mean, but tell them your concerns, but you're going to make it happen and see if there's essentially a dad scholarship too. Dad, I really want to go, but if you could foot the bill, that'd be awesome. Is that a financial mutant? I mean, look, as a parent who's got now a graduated from college daughter who's, you know, gainfully employed, and I know I'm going to have to bribe her to probably in the best possible way.

20:39I don't really mean it. She likes spending time with us, but I for sure will be doing nice things to try to help incentivize, just like I helped her fund her initial Roth contributions when she was younger and starting in the workforce. I think there's nothing wrong with if your parents are in a good financial situation, just statistically, typically the parents are in a better financial situation than you just starting out. So that's the only reason I'm not, I'm not trying to turn you into a, you know, failure to launch. It's just one of those things that I thought was worth a conversation.

21:09Brian Preston:I just think far too often financial mutants, they miss out on some of the sweetness in life, and they miss on things they can't go back on because of the dollar figure. When I see $5 ,000 moose hunting trip, I don't know your financial situation, but I'm going to argue that I would imagine$5 ,000 is not like an insurmountable cost to overcome. Now, this is different than you said, hey, I want to go on a$50 ,000 safari with my dad. Then we'd have to pull the reins in. That's a little aggressive, but$5 ,000, depending on your circumstance, might be a very realistic thing where you're going to have the opportunity in the future to make more money, to save more money, to be able to afford this trip.

21:46Brian Preston:If this really is your dad's last hunting trip, you don't get to go back and have any more of this. Well, let me bring this into a better perspective is that that's a big thing, like the big lifetime memory of blossoming memories because we're not going to be here forever. Let's start putting, because that's a big thing, what small things can we do now to make this possible? Can you just make your meal prep for the next three or four months to where all of a sudden, every month you're saving an extra$200 or$300 just because of the way you're structuring decisions, small decisions that you're already doing?

22:21Are there things that you can sacrifice in the short term that will help make this or cut the corner off of this to where now maybe it's only$3 ,000 that's actually coming out of your savings or$2 ,500 versus the full$5 ,000 because you're going to make some lifestyle decisions that make up for the rest of it. Yeah.

22:40Brian Preston:I'm just so... I wouldn't miss the trip. I wouldn't either. You don't get to go. Here's the thing. He's saying he's already got one time his income saved, so he's slightly ahead of the curve. He's on step five, so he has an emergency fund. Sounds like you're employed. You know, I'm kind of like, you can make that happen. We're not... Money is just a tool to let you focus on what really matters. That's exactly right. time with your dad. I'd find a way to make it happen. I second that. But I would go turn over a few stones.

23:13What?

23:14Brian Preston:I thought Bo was going to say something. He just looked like he was going to. No. That was a look of affirmation. Affirmation. Well, FooFighter66, thank you for the question. Enjoy the hunting trip. Go get your tumbler. And if you would like to bring, keep your coffee hot while you're on your hunting trip, just email winner at moneyguy.com and we'd love to send you a Money Guy template. Where do you hunt for moose? Canada? Somewhere where it's cold. I don't know. I'm not a hunting expert. The northern part of the United States I think have moose too. I don't know what permits and stuff are. You ever seen a moose?

23:46No.

23:47Brian Preston:I'm going to... Only when I used to go to that crazy restaurant that had a fake moose that would talk to you. Oh my. It was like a steak restaurant. Oh, Stony River? No, it had something crazy. I think they've got a business now. There was a moose head that would talk to you every few minutes. No, it wasn't bull. Thanks, kid. Oh, my goodness. I'm actually going to. Somebody in the comments, I guarantee, will know what restaurant I'm talking about that went out of business. Later this summer, I'm going to Canada for the first time, and moose is on my list. I would like to see. I don't think I've ever seen a moose in real life.

24:26Brian Preston:Lots of Rocky and Bullwink growing up. All right. Well, we are going to do another question, but it is also going to be time for our rapid fire segment very soon. So get your rapid fire questions into the chat. If you're watching live, be sure to put RF at the front of your questions. So we know that you want it to be a part of that segment. And that'll be coming probably between the 30 and 40 minute mark. So stick around for that. All right. Boogaboo Creek. There it is. That's it. I knew it. Somebody in the audience would know it. Because they had one at Stonecrest. That was the one that we always went to.

24:58There was one in Fayetteville, Georgia.

25:00Brian Preston:Thank you. Thank you, Paul Bigness. It sounds like an animatronic nightmare. I remember they had one. It was part of the new mall development. I remember that. All right. Next question is from Gabib 1992. Sorry, I'm supposed to say it with confidence, but I didn't. You don't think that's Georgia Bib? Oh, Georgia Bib. Georgia Bib 1992. That's a good year, by the way. You can decide. 1992, a good year. I graduated high school. The question says, when investing in different account structures, like HSA 529 or Roth IRA, are you supposed to be invested in the same exact index funds throughout each account?

25:43Depends on where you are in your journey. In the beginning, getting the money in the right account structures is more important. You know, just following the financial order of operations and just, you know, maxing out your Roth, setting up your 401k, all those things are more important than even the specific investment. So that's why we like broad index funds, whether it's the S &P 500, or if you're even one of those people wants to use an index target retirement fund. But then down the road, as you build some wealth, you know, we will usually around step seven of the financial order of operations, you'll start thinking about the three buckets and the efficiency of those investments because of the taxes at that point.

26:23But in the beginning, I wouldn't get caught up in that. I would choose a really good operating index fund and just let it rip.

26:29Brian Preston:I agree with everything that you said. Do you want my hot take? Yeah. You know, sometimes when you're taking a test and they ask a question and you jump on the answer real fast, but then when you read it again, you're like, whoa, this is a trick question. I think this is one of those. Because what's really interesting is the three account types. He didn't say like, hey, when investing in different account structures, like like a 401k, IRA, traditional IRA, Roth IRA, should you do it different? He actually laid out three different, or she laid out three different tax-free account structures. 529s are tax-free, health savings accounts are tax-free, Roths are tax-free, which means that because they're taxed the same way, it is likely that the types of indices, the types of investments you're going to use in those three specific type of accounts probably will be pretty similar.

27:16Brian Preston:They probably will look kind of the same, again, depending on your timeline, because the 529, as you get closer to needing the dollars, would need to be dialed down a little bit. That was the only one that I was going to draw attention to. That one seems a little different. If you're early on, your kids are not close to college age, I bet it's going to be a lot of low-cost index funds across all three of those because they're all taxed the same way. I think it was a trick question. Yeah, I like that, but I would add the color that this is why I like in 529s, 529s, because remember, I think I'm somewhat of an expert now that I've had a daughter graduate college and we use the 529 to pay for it, is that I like the age-adjusted portfolios, the index variety.

27:57I was very fortunate that the provider of my 529s was using essentially index target retirement funds. And it was amazing how when we needed the money, it was there. And I love the fact that how it annualized and grew over those years and those small, small contributions I made when she was a itty bitty baby turned out to be and blossomed into a great 529 that helped pay for the first three years of college. It's awesome.

28:23Brian Preston:That is awesome. Well, GeorgiaBib1992. If you would like a MoneyGuy Tumblr, just email winner at moneyguy.com. I don't know if it was GeorgiaBib. It wasn't. Yeah, but I like it. Get creative. With confidence. So I did. And we're Georgia boys. So you can highlight the Georgia. Georgia. Georgia. GABib1992 knows who he is. My nephew just graduated from University of Georgia this past year. Nice. Go Dawgs. Dude, you know how fun it is watching a new grad walk through the arch for the first time? It was pretty cool. It was very sentimental. It was awesome. Such a bulldog thing to say. I was about to say, you wouldn't know about it.

28:56Brian Preston:No, I wouldn't know. All right. Next question is from TheBobbyB22. It says, hi, money guys. You talk about always be buying. That's right. If I can front load my 25 % to 35 % early in the year, can I take my foot off the gas to enjoy summers and holidays more? We'd still continue the 401k match. Yes, Bobby. The only curveball you have to watch out for is make sure your employer truly is going to give you that match. Because we have actually seen plans where they're structured, where they don't actually do the match, even if you front end load it, they cut off the contributions. We've seen that.

29:36So just make sure you do a little homework. But I'm okay if you, because statistically, it probably works out pretty good, you know, because eight out of 10 years, you know, you just have more money, more time for the money to work.

29:48Brian Preston:Yeah. I was going to say, the only thing you're going to miss out on is if you're front-end loading it consistently in the front of the year, you're going to miss out on some of the dollar cost averaging benefits. Like I'm thinking - That's true, volatility. Fourth quarter of 2018, you know, is a big opportunity to be buying. So if you have money going in every month, But are you still saving the appropriate amount if you're saving 25 % to 30 % in front and loading it so that you can take your foot off the gas later? Absolutely. And then the behaviorally, just know thyself, is that make sure you really are turning the spigot back on every year because part of the set it and forget it that I like is is that it kind of foolproofs you to a lot of the behavioral traps that we all fall into.

30:26And one of the ones when you're doing things from a structured timing standpoint, you just forget about it. you get busy, and then all of a sudden a month or two slips through the cracks, and you're like, wait a minute, I totally missed out on three or four months worth of savings. Just be careful with the behavioral stuff.

30:41Brian Preston:You talked about the true-up provision. Did you say the name true-up provision? No, I didn't say it. Okay. What you want to ask your HR, if you're thinking about doing this, you want to ask, hey, do we have a true-up provision? Meaning, so long as I put in X percent of my salary, even if it's not going in per paycheck, will I still get the employer match? If your company does not have a true up, they make you have to have money going in, you could miss out. So it's a really quick email to HR. Ask them. Not all plans have them. Not all plans don't have them. So you want to make sure you don't miss out on that money.

31:10I mean, I don't know if we need to explain that. But it's basically they're going to just apply the percentage each paycheck. That's right. So if you front-end load it, you're like, well, I got it all in there. But they might have only given that percentage off of each of those paychecks, and they're counting on giving you the rest later. but if you don't have any money going into the plan, you just don't get it because that's the way their matching is set up. And it kind of stinks when it's like that.

31:35Brian Preston:Oh, yeah, because you miss out on free money. Well, the Bobby B22, hopefully that helps you think through that decision. And if you would like to drink from a Money Guy Tumblr while you consider this, you can just email winner at moneyguy.com and we will send you one as a thank you. By the way, that was the most Bo and Brian thing ever. and the fact that I talk about the concept, and you came up behind me and cleaned up the thing by saying, hey, did you make sure you actually used the actual professional word that represents that concept you just said? This is why we work together well. Peter Byrne Jelly.

32:07Brian Preston:A lot of times people don't know the language. Like, oh, man, I got this great question I want to ask my HR. But HR professionals are often not financial professionals, and so even when you ask them the question, oh, no, no, yeah, we get a match. You want to be very specific because you want to make sure that it's kind of like artificial intelligence. The quality of the input will dictate the quality of the output. And so you want to make sure you're using the right vocabulary so whoever you're asking the question can get you the correct answer. Yeah, because if you go and ask them, say, hey, if I'm getting if I put 6 % in, I'm getting the full match, right?

32:38They're going, yeah! Oh, yeah, you're good. We match here. No, no, no. Let's get into the actual terminology. That's right.

32:47Brian Preston:All right. Next question is from SPLow603. how do I know when I... Close. 6 or 3. That's it. How do I know when I move on from step 6 to 7? My wife and I don't make enough to fill every account, but we are doing 25%. Are we on step 7? And can you expand on step 7? I'm 24, married, and with 195K. Wow. That's pretty awesome. 24, married, 195. 95. That's, you were certainly out ahead of the curve. Brian, you actually wrote the book on this. Yes. You wrote the book on how to progress through this. The most improved chapter when I was doing the original version of Millionaire Mission was really a step seven chapter after I was like, man, that now hits a little differently.

33:39And by the way, yes, I'm going to go ahead and answer for Sposs. You didn't put the T on there because that's not a special. You're about to make a tax joke. I know. I won't make the spouse joke. Sales tax joke. But I can't help myself.

33:54Brian Preston:What a CPA, am I right? Listen, you are definitely in step seven. It's because we've had this question come up because there's a lot of people that will make under$100 ,000 that will never reach the 401k funding limit for the year, but they have definitely reached the 25 % savings rate, especially if you include your employer match. So you should move to step seven, which the whole purpose of hyper accumulation or step seven is now instead of you thinking in the, because steps one through six are all very reaction or cause and effect, meaning that we got to have emergency reserves to keep you from making desperate decisions.

34:34We've got to get the free money from your employer because it's just that valuable. You can't pay a bank 20 plus percent and expect to be successful. That's why step three is set up the way it is. Emergency reserves helps you in case you get unemployed. Tax-free growth or tax-favored growth in step six are just too valuable not to pay attention to. Step seven is the first one of the steps that you get to take a breath and say, wait a minute, okay, all this has been cause and effect because of the tax policy or keeping myself out of the ditch. Now, how are we actually going to use this money? And that's why you get to take a deep breath and think about what's the ultimate goal for this money.

35:11Do I have the right account structure that's actually going to let me use that money in that way? And it's kind of a way for you to catch your breath, know how you're going to use the money before you start moving on to step eight, which is those prepaid expenses or abundance goals. And you once again get to work thinking about now how we're going to be using that money, even if it's outside of boring stuff like steps one through six are.

35:36Brian Preston:That was a fantastic answer. If you want to know even more, like if you'd like to know more, I'd encourage you if you've not picked up a copy of Miller and a Mission. It's a great read. You can read through that chapter, actually understand that. Or if you want to do a deep dive on the financial order of operations, you go to learn.moneyguy.com. Go take the financial order of operations course and actually see, okay, this is what went into it. This is how it was designed because it kind of walks you through that level of detail for each one of the steps that we work through. And remember when we did the food course redesign last year, we gutted the price on purpose because even though we made it much, much better and I felt like modernized and streamlined it, we gutted the price because we were trying to make it that much more approachable for everybody.

36:18We realized, hey, it's not about the money we're making out of this, it's more about getting more people in front of it. Exactly right.

36:24Brian Preston:That's great. Well, SPLOS603 or SPLOS603, thank you so much for the question. Just email winner at moneyguy.com if you would like a Money Guy Tumblr. Before we get to our It Does Not Depend Rapid Fire segment, what? What are you looking at me for? No, no, it's just us. You keep going. You're great. Okay. I was going to say we have a couple of really fun collabs coming up this week that I thought we should shout out. Some friends. Tell me more. Tomorrow, your episode with Marriage, Kids, and Money is going to come out where you talk about fire. It was awesome. So go check out Marriage, Kids, and Money with Andy Hill.

36:58Brian Preston:And then I believe on Sunday, your episode with iced coffee hour is coming out where you guys respond to some portfolio. I mean, you guys talk about so much stuff about investing. Well, you know, because we went on iced coffee hour again. They came in town, saw us. Jack and Graham actually let us see their portfolios and got our opinions on them. Hey, what do you guys think about these? If you want to see what we did. And I mean, look, and Bo was nice to them, but he also pointed out some blind spots that they might have. They asked for our opinion of what they're both doing financially in their portfolios, and we gave it to them.

37:33What's funny is that we're still getting texts from specifically Jack. He's very hot and heavy on a specific strategy. It will be interesting to see how it plays out.

37:43Brian Preston:So really good stuff coming up from two fellow financial creators. Actually, we have a few collabs coming up. I won't give them away yet. But we'd love to hear who you think we should collab with next. Oh, that's a great question. It's always fun. to meet different people in the space, even with different ideas sometimes. It's just fun to discuss and get to know them. And a lot of the time, you guys have given us some really wonderful ideas. So let us know who we should meet and collaborate next. I would love because, you know, there's things like I think about content creators that like every Saturday I watch Disney Food Blog with AJ.

38:16I've been trying to forever trying to figure out what's collab thing can I do with her. But I couldn't figure out how to make it work because I don't know. But I would definitely be open for us coming creative collaborations that we should be doing because it's good for everybody. You know, what's great about collabs is that you get to – you guys get introduced to somebody else who could hopefully add value to you. But then also we get introduced to their audience as well. So if you have any creative ideas, we're always open to thinking about those things.

38:49Brian Preston:It's fun to hear what you guys are thinking. So I just wanted to throw that out there. All right. But it is now time for our It Does Not Depend Rapid Fire segment where Brian and Bo collectively have 30 seconds to answer your financial questions. And they cannot say the phrase, it depends, or they are out or something like that. And then at the very end of the Rapid Fire segment, we will move on to our Maybe It Does Depend segment where they can say any of the things they felt like they just really needed to say but didn't have time to. so that is what we're going to do we are going to put 30 seconds on the clock and after I ask the first question we will be off to the races are you guys ready?

39:32yeah why do you always look nervous?

39:34Brian Preston:you're getting too good at this honestly that's only the first question okay kind of like you get a shot from the doctor it only hurts for the first second oh okay like the first shot only hurts I was like how many shots you get when you go? what are we are you going first or am I going first? I'll go first. Get out of the way. Okay. Question one. Is there ever a case for investing in a fixed index annuity? If yes, when would this be? Yeah, when interest rates are really above average high and you'd like to protect a chunk of the portfolio because you don't have a pension or some other cash flow thing that takes out the volatility.

40:18Brian Preston:For very super risk-averse investors who are terrified of any sort of market loss, but they need to turn a pot of assets into an income stream, annuities, specifically immediate fixed annuities, can be solutions for people in that scenario. Next question, what's your money vice? Something you enjoy spending on without a second thought. convenience. I am at the stage in life where if I can spend some money to have something done or something done on my behalf or something done more efficiently, I love the idea of convenience. I love of being able to buy back my own time.

41:01Brian Preston:Crud. Gadgets. Yeah, but what's the last gadget I bought? Your watch? Oh, yeah, I guess. Okay. You do love a good gadget. I buy gadgets. We're going to go gadget. And that's time. It was a splurge. Time is up. All right. How about experiences? How about going to theme parks? Honestly, I have - How about going on cruises? We'll come back to that one. Oh, that's what I should - I should say theme. No, no, no, no, no, no, no. We'll come back to it. Time's up. Okay. Next question. Around what percent of your clients are on the fire path? What is the average retirement age you see? What's it like in the real world?

41:33Brian Preston:I will be honest. Much fewer of our clients are true fire. Like financial independence, retire early, do nothing. we do have a lot of fine people because they are such diligent savers that when they get into their late 40s mid 50s they now have the opportunity they can either leave the job they have been doing or focus on their next endeavor yeah i would say i mean most of our clients are before 65 which is traditional so i think a large percentage are before 65 we don't have i can't think of any under 50 though i have a i have a handful okay never mind disregard guard.

42:12Brian Preston:Next question, is Roth 401k always the move if you will receive a pension when you retire? I love Roth IRAs because of also, assuming you've taken into account all the tax implications, because of the legacy, the tax-free growth, there's a lot of power with all Roth accounts. I don't like all whenever we say that. I would say if you're in a very high tax bracket, even if you have a pension, it would behoove you to save on a pre-tax basis, especially for the 30 % plus tax bracket, because you get 30 % tax savings this year, even if you are going to have pensionable income later on in life. All right, next question.

42:51Brian Preston:Is it worth it to participate in my company stock purchase plan if the discount is only 5 % and the money is held for three months with no interest? How much free money is not enough free money? You know what I mean? Because 5 % is still free money. And even hold it for three months, it's still a relatively minimal amount of period. It does sound, without knowing the other circumstances, I would say the ESPP is likely still falling into step two of the financial order of operations. Well, also, that 5 % discount, is it before? Because a lot of times it's the lower of either the beginning of the quarter or the end of the quarter.

43:23That might be enough juice to really push it over.

43:28Brian Preston:You guys are getting very good at this. Well done. Crushing it. Whatever. We're having – we've got a bunch of – it not depends to double back on. I do have two listed, so if there's more, let me know. I can't talk. All right, next question. Where is the best place to invest my money if I need to access it in five years? I mean, five years is right there on the line. It's probably going to be a balanced of some index funds, but a lot of liquidity so that you can offset any crazy things that happen from a timing perspective. I still think that right now the most attractive cash holding are high-yield money market mutual funds.

44:05Brian Preston:Most of them are paying somewhere between 3.4 % and 3.7%. Inside of five years, that's where I would hold my cash. That's where I am holding my cash. With two seconds to spare. There's more to add on that one potentially. All right. I'll make a note. But it's hard because that gets into financial planning. Oh, my goodness. You guys. Might as well say it depends. Fired. Okay. Next question. In step eight, I'm in step eight, have 220K and a brokerage intending to fund 100 to 150K of college starting in seven years. When and how should I start de-risking? Just like we talk about putting money to work by dollar cost averaging, whenever I know I have some sort of goal that's going to happen, I like the idea of reverse dollar cost averaging.

44:52Brian Preston:So if I think that I've got seven years to do this, I may begin slowly backing down the risk on monthly, quarterly, annual, you figure out the cadence basis to get to that thing by the time I get there. The only other thing I was going to say without saying the dirty word we're not allowed to say is make sure you really are in step eight. That's where step seven is for you to actually compare what you have to your goals and make sure you're not derailed. One second over, but I'll give it to you. Okay. Next question says, MoneyGuy team, what do you mean by graduating from target retirement funds?

45:26Brian Preston:What's next after that? Well, I think you get even more tax efficient with your investments because Roth, you love the tax-free growth. After tax, you love the liquidity and access to it. And then tax deferred, it's the least tax efficient. A target retirement fund is a generalized portfolio solution. Once you graduate past that, you move to a personalized, specific portfolio allocation meant just for you based on your income account structure, availability, goals, time horizon, risk tolerance, risk capacity. That was good. Two seconds over. I guess I'll give that to you too. Next question says, should we calculate savings rate off of gross income minus daycare expenses?

46:11Brian Preston:if the daycare expense is large and makes saving 25 % hard. No, you should not subtract it off, but you should give yourself some grace. This is a period. This is a season. You may not be able to save 25 % right now, and that's okay. Go to moneyguy.com slash resources. Check out our how much should you save deliverable. Even if you're young and you're not saving 25%, there's a good chance at lower savings rates, you still get where you want to be later in life. That's why we like the gross is because it doesn't let you do any of the what-ifs that a lot of people do. People hate that we use gross, but it's specifically for these purposes.

46:47Brian Preston:Right on time, even with the speedy talking. Man, if anybody's listening on one and a half or two times speed listening back. I feel like Bo just transformed himself into the micro machines disclosure gap. We may revisit that in the ending segment. It's only the last seven or eight seconds. I'm good for the first, like, you know, seven seconds. All right, next question. Should I combine retirement accounts from old employers or leave them be and why? Go to moneyguy.com slash resources. We have a great flow chart for you to answer a few yes, no questions, and you'll know the specific answer for your situation because it does have variability.

47:23Brian Preston:Four things you can do when you leave an employer. You can cash it out. Don't do that. You can leave it where it is. You can roll it to your new employer. You can roll it to an IRA rollover. The deliverable Brian just said will walk you exactly through how to make that decision. Well done. Man, that resource really did the heavy lifting on that, but it is a great resource. Moneyguy.com slash resources. Go grab it for free. It's going to ask you yes, no questions. That takes out the it depends. All right. Last but not least, what do you guys like to do on your days off?

47:52I mean, me and my daughter like to do errands, whether it's washing cars, going to pick strawberries, whatever you pick, fruit is available. That's what we like to do on the weekends.

48:03Brian Preston:Yeah. On days off for us, it's family time. We are still very much in the messy middle. So we're spending a lot of time in the pool right now, hanging out, doing that, being outside, going for walks, trying to drink in these kids' youth. My oldest is about to be 11, and I'm like, holy cow, she's – that's like seven more years, seven more summers, seven more Christmases. Also, because we were over, but it's the last question. I appreciate that my wife does usually a once-a-week date night plan. Like she just puts together something with a neighbor or a friend, and that's pretty cool too. Very good.

48:38Brian Preston:Well, that concludes our It Does Not Depend Rapid Fire segment. Thank you for your submissions and questions. Let's now go into our Maybe It Does Depend segment where we can talk about all the things you didn't get to say. I have a few marked. Can I go back to 12, though? Because even my own mom, because I had a bunch of family in town for graduation, and mom was like, so do you and Bo hang out on the weekend? My own mom says this. We get that question all the time. And I'm like, no. But not a – we don't purposely not a – She goes, oh, so y 'all don't like each other? And I was like, Mom, we hang out like every day for hours.

49:14And as a matter of fact, my productivity gets killed because I'm in Bo's office talking all the time. But on the weekends, we typically are doing independent stuff. And it doesn't mean that we don't –

49:23Brian Preston:It's not on purpose, though. We don't avoid – Yeah, I would still like – But what's funny is Bo and I have vacation. And you should know. I didn't even told you this. So it would be on air. It would be the first. My wife was talking because we were on a trip, just me and her, last week. And she's like, we ought to once a year do a trip with Bowen. I was about to say your wife's in. Oh, that's so nice. He was like, just because that would be really good to make sure that we, because we do get busy doing so many things that sometimes I feel like we don't do enough stuff out of the office. I'm for it.

49:52Brian Preston:You heard it right here. We're going to do it. They do indeed like each other, in case there was any question. Those are the funniest. There's some funny stories. Those are the funniest comments. Because that's also when the funniest stories, like your swimming ability and so forth came up from the last couple trips we did. Just think of the stories you could generate. We would have never known had it not been for that. The tangents we could have. All right, well, we did ask a question about what's your money vice, and I believe we ran out of time about something. Oh, and Brian couldn't think of anything.

50:18Brian Preston:Brian couldn't think of anything. I should have said theme parks. Theme parks. Theme parks are a huge money vice for me. You love cruises too. I do like cruises as well. Like something you can take your family to that's a big fun generator. Yeah. You will go for that. I think sometimes my wife, God bless her, because those things, if you think about it, I am definitely a stimulus seeker, and so is our youngest daughter. So we love high-volume, high-energy stuff all the time, and my wife is like, oh, my gosh. That's why I think she loved that we went to the beach last week. Meanwhile, after day one, we didn't get in a fight, but she was definitely disappointed because I was like, tomorrow we're going to have to find something else for me to do because I can only hang out on the beach.

50:58One day I start twitching.

51:00Brian Preston:You're not like a sit under the umbrella reed kind of guy? No. I just sat there and watched the water go in and out, in and out. And then I was like, all right, all right, this is pretty cool. What time is lunch? You know, it's just, I don't know, in and out. Do you ever, do you like snorkel and stuff? Is that a thing you do or no? Well, yeah, I mean, I don't have a problem doing it. It's just that water was a little chilled. Ah, got it. I didn't think it had enough sun on it yet in the season. Because I'll tell you, down there at the equator a few weeks ago, it was perfect. So that's what we did.

51:34Brian Preston:We were like hanging out and we'd go snorkel and go do that stuff. No, I do like that. Because a few years ago, we did it on a catamaran in the Grenadine Islands. And actually, it's one of the only vacations that I lost weight on. Now there's other reasons too, but it was a lot of great snorkeling. We'll just leave that up to your imagination. All right, there was another question about – Catamaran trip like I did it with a small, small, small, small catamaran. Oh, my goodness. Okay, moving back to personal finance, there was another question you guys kind of kept talking on, and I stopped you about what age your clients are retiring.

52:14Brian Preston:Did you have anything else you wanted to say on that one and what it looks like in real life? What does fire look like in real life? Was that the one? Yeah, you were saying, because I said we don't have any clients really under 50 who are retiring. You're like, well, I do. Yeah, we actually had someone in the chat say, hey, I'm a client. I'm under 50. No, no, no. That's not what we mean. Don't let the old guy say something. People that are like truly pursuing fire. Like I want to work aggressively for 10 years, 15 years, and be out of the workforce forever. What we most often have, we have a lot of like very high earners, very esteemed folks who want to do sabbaticals.

52:45Brian Preston:Hey, I want to take a year off, take two years off. We have a number of clients that have done that a number of times now. I got a client buying a Sprinter van right now. Yeah, and then we have some that are like, hey, I've reached financial independence, So now I get to choose what I do with my time based on what I want to do, not what I have to do. For some people, it's continue to do the same job because they love it. For others, it's shifting and volunteering or doing family stuff or whatever that thing may be. We do have a lot of folks that fall into that camp, but it's because they figured out saving early and often.

53:15Brian Preston:It's given them flexibility and options later on in life. So do you think like by definition, there are a lot of fire, like people retiring before or going to the next endeavor before 65, but maybe they're not that traditional idea of like, I'm fire and I'm saving 60 % of my income and like that kind of thing. Yeah. It just looks different. I don't think I have any people like in my ecosystem that like have young children that are like fully checked out and done working. Sure. Do you know what I mean? Yeah. Like maybe like older high school, college age, but like I don't have any like fire people pushing a stroller and they're done.

53:48Brian Preston:They're out. I mean, look, I'll ruin it for everybody is because this is what you ought to understand. again, the ideal is you get as much money as you can in an early enough age, so you own your time that much sooner. And I think you'll find out that most people, when you get to the point that money is nothing but just a tool that you're using, it's not something that controls you having to wake up to go to work anymore, you're still going to want to wake up and know what you're doing is having an impact in the world. At least that's what I have found is when I got to the top of the mountain and realize, oh, I have the level of money that I always thought I wanted is that it's not as cool as you think that you can just go buy anything.

54:26You need to have purpose. You need to have why. You need to have, there's more to it than that. And that's why I think a lot of people don't actually just completely tap out is because that seems not as cool as you think it is too. I think a lot of us have that daydream because you're stressed out. You don't control and own your time yet. So what do we do? It's the same thing when I was growing up, my dad used to, because he was in a high-stress situation at work, and we'd be riding down the street, and he'd be like, you see that guy mowing grass on the interstate? I wish I had his job. We all fantasize in some way to take the stress away, and that's why I try to give you the tools to go own your time that much sooner because when you truly do things because you want to and you have the power of you can say no to anything and everything, it just hits differently, And that's what I try to get to people.

55:17It's not really tapping out. It's just owning your time that much sooner. That's right.

55:21Brian Preston:Yeah, that was good. I also had a note to come back to where is the best place to invest my money if I need to access it in five years. Did you have anything else to say? Yeah, I thought the thing about like I keep all my liquid cash and a high-yield money market mutual fund right now is the best place, and that's where I keep my like sub five-year goals. But you said there was more you wanted to add to that. Well, I was just saying sometimes when you have a sinking fund or something where it's like five years in the future, you probably could put 20 % into 20 % of that or 30 % of that depending upon your risk variance or how hard it would hit you if all of a sudden that money was, you needed it and it was a downturn.

55:58You could try to juice things a little bit. I mean, think about some of our debt. You and I have some debt goals that we're paying down some commercial real estate. We've put some of that money in the market.

56:08Brian Preston:Oh yeah, for sure. And even though we know it's coming up in the not too far future. So, I mean, that's why I think there's nothing wrong with having a balanced approach to try to take advantage. Now, with that said, is if we get within three years of when we think we're paying off this debt and the market's at all-time highs, we might start winding it down because, you know, remember, pigs get fat, hogs get slaughtered. That's right. The only other thing I had on here, Raby, was, I think it was question number eight on the rapid fire, was we were talking about, should you do Roth? Roth 401k. Read that question again.

56:45Brian Preston:Roth? It was number eight? It was. I was just going to say Roth is my favorite child. I know as a parent, you're not supposed to name your favorite children, but of all count structures, I love Roth. It was the number second rapid fire question, but I think he wrote it as the eighth question overall. Oh, yeah. No, you're right. So it was the second rapid fire question. That was the eighth question of the day. Actually, I think it was the third one. First one was fixed indexed annuity. Second one was something else. That's that kind of thing. Hey, should I invest all of my money in a Roth 401k, even if I have a pension?

57:15Brian Preston:Oh, yes, not a 4. Okay, yeah, wow. We were speaking a different language there. Should I only invest in a Roth 401k if I'm going to have a pension later on? I said, hey, if you're a really high-income individual, even if you are going to have a pension, I think there's merit to getting the current present-year tax benefit doing that. Sure, because you can just do Roth conversions down the road. But I didn't want to poo-poo on Roth dollars because they are my favorite children. Well, we would never poo-poo on it. But the question was, I think the word all was in there, right? Like it was like this exclusivity.

57:42Brian Preston:If it makes sense to do all Roth, for sure. But the time when it doesn't make sense to do all Roth is if you're in a very high tax bracket, Roth can be costly. And so I would still think about maybe maxing out the pre-tax and then doing some backdoor stuff and that sort of thing. Well, that concludes our maybe it does not depend segment. You want to do one more? I'd say that was our best one. Really? You did pack a lot of meat into that rapid fire segment. I thought we did really good. It was good. Not to toot our own horns, but. But yes, let's do one more question. Let's do one more question before we close this thing out.

58:18Brian Preston:This one says, Brian has mentioned. Oh, this is from Tim R. Tim says, Brian has mentioned ABLE accounts in the past, but only briefly. When are they appropriate and when are they inappropriate? We may be eligible to contribute, but if we become ineligible, it seems bad. Do you have anything to say to them or point them to? Before you answer that question, because I think it'd be helpful if you're just like, what an able account is, how it operates. We've released, the thing that I'm thinking of is out there. Yes, that's why I knew you were talking about it. Okay. But what Bo's alluding to, we have a great resource.

58:53By the way, if you have anybody who has a special needs child or developmentally challenged child, we'd encourage you to go to moneyguy.com slash resources. We actually wrote an e-book. and originally when we did it, we were like, we were going to sell it. But then we're like, no, no, no, this is too valuable. So we're just giving it away. So if you just go out there and check it out. Now, look, it's not going to be the ultimate end all, but I think if you're just on this journey and you need something to kind of give you some overviews of some very key important concepts, go out there, please, because that's what the heart of this when we designed it was.

59:30Because I'm on this journey myself, and you've heard me talk about it in Millionaire Mission. I've talked about it on the show is I don't have to save for one retirement. I have to save for essentially two retirements because after I leave, I know whatever I have saved up or built up is it has to provide also for my youngest daughter. I like ABLE accounts because the way these things were designed and this is what Bo was alluding to, you know, years ago, they came up with 529s to help pay for college. Congress got together and said, hey, we need to incentivize families to be able to afford the rising cost of education.

1:00:04Let's come up with 529s. And the way that that structure was is that however you put money into these 529s, if you used it for qualified education expenses, it would be completely tax-free when you pulled the money out. Well, then somebody in Congress said, you know what, that 529 program worked out so well. Let's use the same code section, but let's make it for disabled people who have disabled children or family members. And they started off and it was a pretty tight qualification, but they've actually unbundled that and made it even easier to qualify. I think originally it was like under 26.

1:00:37Now they've pushed that up into the 40s or beyond. And then also earned income. If your disabled child had earned income, that would limit you to some degree. They've lifted that out to a degree. But the way these things are going to work is that you can put money in. Now you don't get a you don't get a deduction or anything, but you do get, they grow completely tax-free, tax-deferred. And if you use it for qualified expenses, which is pretty broad for disabled individuals, you can pull it out completely tax-free. And they also, up to the first$100 ,000, it's not going to disqualify you from social security and other federal benefits you might be entitled to.

1:01:17Now, there are limits. What I found is that when I started funding this, a state limit to how much these accounts could grow, but they've been indexing that. Like how big they could be at all. But they keep indexing it for inflation, and I haven't run into an issue because I was at first loading this up. I have pulled back to a degree because now I'm doing more complicated estate planning, and there are limits, and that's why you'll need to work with your specific situation. But I think for most people, it's a pretty good while before you have to worry about that. And there is that website, Now, screw this up every time.

1:01:51I think it's nrcc.org. Is it?

1:01:56Brian Preston:Dot org? Yeah, is it? Is it? No. That's not it. Type in ABLE Accounts National Resources. This is the problem with doing a live show. That's okay. Keep talking. ABLE, A-B-L-E-N-R-C.org. There you go. A-B-L-E-N-R-C.org. Yeah. If you go check it. that great website. It lets you go state specific because there are different rules depending on just like five 29s are state specific. Able accounts are state specific as well. So you need, that's why I love a good aggregation website that kind of gives you an overview. And I'm very proud of state of Tennessee was one of the front running states, very proactive on it.

1:02:39And I've been very pleased with their plan. Great. Did that help? Yeah, that was awesome.

1:02:44Brian Preston:It was great. Tim, thank you for the question. if you would like a MoneyGuy Tumblr as a thank you email winner at moneyguy.com we'd love to send you one and for anyone curious about ABLE accounts and more of the things that Brian was talking about remember we do have that deep dive ebook for free at moneyguy.com slash resources so be sure to check that out by the way somebody turn on the bat signal I hear that Erin Talks Money was in the room too she heard we were talking about collaborators and she's like ooh let me get in there on that she must I said Erin some folks were saying we should collab what do you think and she said yes Oh, and that's a great idea.

1:03:17Brian Preston:With lots of exclamation points. We should do that. Y 'all are so bad at this. I'm just saying it's an idea. We should do it. It's a great idea, actually. I think we should talk about that. So spontaneous. And look, if we did, if we happened to collab with Aaron, the way that you're going to know about it is if you subscribe to the channel right now, if you have not subscribed, if you're just renting your seat, make sure you click that subscribe button so when we have new content come out. By the way, the only thing. 48 % I looked you up last night. The only thing that comes out on this channel is new and original content.

1:03:51Brian Preston:So you will not get overrun. You will not get overloaded. Make sure you subscribe so that, one, we know you're out there, and, two, you can get updates when we have exciting, new, fun, cool collabs coming out. Last 28 days, I think 48 % of our traffic was still unsubscribed. That's only half of you. That's only 50 % of you. But that doesn't mean glass half full is 51 % are returning. The majority. That's true. The majority. Guys, there is a better way to do money. And, you know, we try to every day pour into you the better ways to even look at this tool because it does have limits to what it can and cannot do for you in your life.

1:04:27And we just try to help you become the best version of yourself. Also, own your time that much sooner because we really do want you to live your best life. I'm your host, Brian, joined by Mr. Bo, joined by Reby and the rest of the content team in the wings here. Money Guy, out.

1:04:43Brian 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.

1:05:16Brian Preston:All investments involve a degree of risk, including the risk of loss.