Financial Advisors React to UNBELIEVABLE Money Clips

0:00Brian Preston:When you need to build up your team to handle the growing chaos at work, use Indeed Sponsored Jobs. 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. Low energy, unfocused, foggy, you might be dehydrated. Whether it's hot yoga, over 100 degree weather, or too much sun.

0:40Brian Preston:Gatorlite, with a specialized blend of five electrolytes, was scientifically designed to help move fluids into the body faster for rapid rehydration. Shop now at retailers nationwide. Gatorlite, hydrates faster than water. Is it in you? Symptoms noted are signs of mild to moderate dehydration. Consult a healthcare professional if symptoms persist. I've been told we have unbelievable clips to react to. I don't know if this means mythical, urban legend, or just straight up false, but more to come. I am so excited because I don't know if unbelievable means like unbelievably good or unbelievably bad.

1:14Brian Preston:Let's dive right in. If the next 30 years look like the last by 2055, you will see prices like this. What are they going to look like? How much do you think an average home will cost in 2055? I think we're going to creep into the millions. Millions. Yeah, I'm going to say like$1.4 million. So the average price now is what? Around$500 ,000? Yeah, because you're talking all across the country. The price of an average home in 2055 would be$1.6 million. That was a phenomenal guess by me. How much is a new car going to be in 2055 if the next 30 years look like the past? So I think now, I think the average one's like$25 ,000,$30 ,000.

1:47Brian Preston:Let's just triple it. Why not? Let's go like$80 ,000. Okay. It would be$128 ,000. I don't know. That's more than a six-digit salary. How much would average rent be in 2055? It's going to be up there, Brian. It's definitely going to be up there. I mean, average rent now got to be around$2 ,000,$3 ,000. Okay, let's just throw out a guess, put like$6 ,500. Exactly. Whoa. On the money, how much would gasoline be per gallon in 2055? Gas right now is already skyrocketing. Yeah, what is it, like$4? I paid like$4.50 today for gas. Yeah, it's high. I think it's going to be$9. It would be$16 per gallon.

2:20Brian Preston:You can't charge someone that. I agree. It's got to slow down. So this is the math I would love to see, because they took some specific industries to specific products, and they looked at the last 30 years. And it'd be interesting to see what the rate of growth over those things was in the last 30 years because what they're saying is accurate. Inflation is real. It is a thing that causes the price of goods to increase in time. So hearing that the average cost of a home would be about$420 ,000,$450 ,000 now, but$1.6 million in 2055, that's not insane. That doesn't blow my mind. I do think, though, realistically, there are some things that have grown at a pace over the last 30 years that will not increase.

3:00Brian Preston:One of the ones that comes to my mind immediately is the price of higher education. That is something that I would argue has outpaced the rate of inflation that will likely have to revert to the mean. But some of these other things, like homes and automobiles, it didn't surprise me too much. Look, this is more of a perception or brain exercise. I mean, even in my lifetime, I remember my grandmother bought an Oldsmobile and it was less than$3 ,000. Fast forward to the car that I got used many years after it was new, a 1984 Chevy Cavalier. The sticker price on it was less than$10 ,000, I believe.

3:36So now with cars being$30 ,000,$40 ,000, you can see the exact same thing is going to happen. My parents' first house that when I was five years old we moved into was$60 ,000. What year was that? That was 1978. So here's the secret to all this. Own stuff. That's right. Go out there and use your time, your labor to create an income that then you can live on less than you make that creates the margin that you actually put to work by buying assets that appreciate. You'll keep pace. You won't have to worry. Don't let this stuff scare you. Just act accordingly. My dad died with about 800 or 900 grand to his name, and he should have spent more of it.

4:18Brian Preston:My dad was so terminally cheap that I don't think he ever really had a chance to enjoy his money. At some point, assume you're going to get a 4 % return on your money. Assume that at some stage that 4 % is more than your burn. Could we spend a little bit more money on travel, on maybe fixing up our house, on maybe giving a little bit of money away to things we're passionate about or people who could use some help? the whole point of being as responsible as you've been and working as hard as you've likely worked is that at some point money means nothing from zero to 18. It kind of means way too much.

4:48Sometimes

4:48Brian Preston:everything 18 to 70 or 80. And then as you get towards the end of your life, it means nothing again. Money is meant to be at some point spent. I think this is absolutely right. I think that a lot of people, there's no point in trying to be so frugal and so tight that when you leave this earth, you leave behind a giant pile of money if that was not your goal. But on the flip side of that, the sad truth is most Americans are not in that position. If you look at the average retirement savings for the average American above the age of 65, it's like$185 ,000 that they've saved up. So I do agree. Folks that have been good with money, folks that have built up, folks that have built wealth absolutely should spend and use that money to accomplish the goals they have in life.

5:30Brian Preston:And if you're one of those people, you should take that to heart. But if you're one of those people that says, see, they said I shouldn't save. They said I should spend. If you have not done the hard work of actually building the wealth, you're getting your steps out of order. Don't go with the die with zero mentality until you're squarely ahead of the curve. This is something I love to give, not financial mutants, but financial misers. I always, but I think the majority of Americans are way behind. That's why I always say, hey, there's a scale out there. There's the super conservative, way hyper save type of people.

6:02Then there's the die with zero. They go read this book too early. I love die with zero if you're a miser mentality and you need to get a little nudge. But if you're looking for the better way to do money, I still think if you think about millionaire mission, we give you right dead in the middle. Let you maximize the memories, but also build your army of dollars so you don't have to work so hard in

6:22Brian Preston:the future we bought a house that we can't afford we have 44 days to make our first mortgage payment on august 1st let's just let that sink in for a little bit because i'm stressing not only that but we have to paint our house before we move in there's a hardwood flooring all over the house which needs to be refinished which we have also never done there's just a lot that's going to be happening within the next couple weeks that we have no idea how we're going to make it through we also have three girls that are four and under and i'm also pregnant with our fourth goodness gracious. This is literally our dream house and there's no way I'm letting this house go.

6:56Brian Preston:We got to make this my full-time job. All right. First, I feel for millennials and Gen Zers out there trying to get on the home ownership side of things because it's hard. It is hard out there to get on the home ownership side, but she said something really interesting. She was like, hey, we're buying this house. We're going to get in here and we have to paint before we come in. Do you? I don't to refinish the hardwoods. Well, if that's a cost that I had not planned on, don't know how I'm going to do that. Perhaps that would have changed my decision to buy that particular home. Or I figure out if I can't even make the mortgage payment, I'm probably not going to start immediately working on renovations, building up the house.

7:34Brian Preston:There's a really good indication there that I've bought more house than I can afford. If the mortgage payment is giving me anxiety before I even start the renovations that are necessary for me and my family of six, soon to be seven, to move in. Successful people sometimes have a habit of stacking too many things at once. You just heard her. They have how many kids? I think four were the one on the way, right? Is that even mathematically possible? You hear about, was it Irish twins or whatever? I mean, so you do the math on that. You're like, wow, that's a lot. Maybe some of them just regular twins.

8:08Maybe that could be the case, but it seems like a lot within a little bit of time. And then she did give a clue when she was talking about, hey, we have to make our first mortgage payment. It makes me wonder, are they doing too much too fast? I remember my very first home that we purchased, we actually had empty rooms for literally, we built out rooms over years. So, I mean, we lived in this house for like seven years and it wasn't until like year four that some of those rooms actually ended up getting the paint or the furniture that they needed. And I think that's a healthy thing. You're supposed to spread out the good decisions, let them absorb and process.

8:43I even know every time I've made huge financial decisions, whether it's buying a new house, taking a mortgage, or even when we've done commercial real estate and other things, I have this weird, icky feeling. This is the worst. As the debt and the size of the transaction kind of works its way through me emotionally. So to do that, plus have a new baby coming in the house, plus feel like you have to go do all these DIY. I worry just burnout is a real risk, plus putting too much stress. And look, I'm just going to go ahead and say it. That many chemicals while you're also in the pregnancy phase?

9:15I don't know that that's what I would want to do. But let's kind of be, let's slow it down. You're going to live a long, fruitful life. So let's kind of get those, spread out those good things so we can enjoy it over a period of time versus doing it all at once.

9:32Brian Preston:When you need to build up your team to handle the growing chaos at work, use Indeed Sponsored Jobs. 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. Low energy, unfocused, foggy. You might be dehydrated. Gatorade Zero powders have been scientifically designed to help improve hydration balance in the body.

10:13Brian Preston:With a clinically proven electrolyte blend and no artificial colors or flavors. Great tasting hydration no matter where you're going. Shop now online or at retailers nationwide. Gatorade hydrates better than water. Is it in you? Symptoms noted are signs of mild to moderate dehydration. Consult a healthcare professional if symptoms persist. I'm looking for a simple, traditional house. It's always been my dream to have a two-story house with five bedrooms. I'd also love for it to have lots of windows, tons of natural light and a nice yard. If it has a pool, even better. And if it has a lake view, that would be perfect.

10:48Brian Preston:The only thing is I need 100 % financing because I don't have any money for a down payment. Right now I'm making about$2 ,000 a month depending on the month. This is a good use of AI. I don't want the house to be more than$150 ,000 either. So yeah, let me know what you can find for me. It's so true. I have this conversation all the time with people that have very unrealistic expectations around what money can and cannot do for you. Obviously, with what she's looking for, but the price range and budget that she should be looking for, those two are misaligned. I think that's called cognitive dissonance, when there are two things that exist that are opposite to one another that are both truths.

11:30Brian Preston:look who knows so much i think she has to go back to the drawing board to figure out okay what actually makes sense in my situation yeah let's hit a big three you know come up with the three big things you know for a lot of people especially if you have children it's gonna be like school system it's gonna be number of bedrooms you know and things like that and then you can always put the whipped cream and cherry on top later by repainting rooms making them nicer. And then of course, financially, when it's feasible, you can upgrade. I mean, that's, that's, that's kind of the way things work is we're just trying to, a lot of times, that's why we give three to 5 % grace on the first house purchases.

12:07We're trying to get you just on the home ownership train. But I mean, that was great in real time, you know, showing how the type of house and then watching it come back down to, you know, essentially launch all the way down to where it's re-entered into the earth, that would have burned up on re-entry just based upon some of the goals that she had. All right, Beau, before we move on, let's do a shameless plug for Abound Wealth.

12:35Brian Preston:I have no shame because I'm mighty proud of the work that we get to do for our clients every single day. Here at Abound Wealth, we're fee only. We're fiduciary advisors. That means we're legally required to work in your best interest. And we love helping our clients optimize their army of dollar bills so they can live their best life. And before you leave a mean comment about us self-promoting, keep in mind, Abound Wealth helps us keep this entire thing going, creating free content, growing the team, and changing the financial landscape. We're honored you're watching and listening. And we hope you use this content to help you learn, apply, and grow your army of dollar bills.

13:13And when your financial life gets complicated, it'll happen. We'd love for you to come back to where it all started. That's the Money Guy Show and Abound Wealth.

13:21Brian Preston:If you're ready to take the relationship to the next level, check us out at AboundWealth.com or click the link below. This is how much money I retired on in 2021. That is the amount of money I had left a year and a half later. 2022 was rough. Dude, what are you doing? What are you spending your money on? It wasn't me. It was a bad market. Guys, a year and a half after that, that is what I had. It still wasn't back to what I retired on. another year after that it took me to get back to above where i was when i retired on three and a half four years what is this called sequence of returns risk what did i do to get back nothing nothing i left my investments how they were eventually it will come back guys just do not panic in a bad market if you are a new retiree this is why your withdrawal rate in the early years of retirement matters so much you want to pick a lifestyle that is sustainable over the long term.

14:15Brian Preston:It's why the 4 % or 4.7 % withdrawal rate gets so much attention. Because even if you do a 4 % or 4.7 % withdrawal rate at the beginning of retirement and you see a bear market, you see the downturn, you see the 2022, you see the 2008, your portfolio can weather that. But if you go into retirement thinking, oh, you know what? I can pull out 8%, 9%, 10%. And all of a sudden, now you have one of those bad sequences of returns. We have a bear market in the first couple of years. it becomes devastating. And instead of taking four years, three years to get back to making money, it could take you six, seven, eight years to get back to where you were.

14:50What John Dutton didn't tell us there was how much he was pulling out. He says, I'm retired. But based upon those numbers he shared, I don't think he was pulling money out. I think he had outside income sources or something, or he was pulling out a sustainable withdrawal rate. Minuscule. I don't know because of the way he talked about the sequence of the account balances. that's more of what i would have to do the math we don't do public math because we see this for the first time with you guys but it looked like it was a very minimal pullout ratio spend money

15:20Brian Preston:recklessly because it's easier to make more money than to pinch penny like dude if you only have twenty thousand dollars blow it on your dream car blow it on your dream vacation then you have a taste then you have a taste of what it's like to spend money it's like a shark once you get a taste of that blood. You need more. You're going to work 10 times harder to get those things. It's the highest form of manifestation. Manifestation is a small group of people that have life hacked, that they are entertaining enough that they can go out there and act a fool in some aspects of their life and get rewarded for it.

15:56And then just assume everybody can do this. I wish I was, I had a friend like this. Have you seen, I mean, it'd be like real world entourage. That's right. You know, if you have a friend, they can go out there and get clicks by acting just crazy in life. But for the majority of people, act accordingly. This is not going to work. This is actually going to be a recipe for disaster.

16:14Brian Preston:Togi, in our opinion, there is a better way to do money. I'm going to argue there's an easier way to do money. Rather than having to hit home runs every single time you step up to the plate, if you can just hit a few singles and start putting those together, that will give you a batting average that can get you into the Hall of Fame instead of put you in the poor house. I'm doing Dave Ramsey's worst nightmare and I'm planning a vacation while I am$23 ,000 in debt because life is for living. I think life is a lot more fun when you have something to look forward to. Also, I'm not going to have PTO forever.

16:43Brian Preston:I have literally over 100 hours of PTO that I've been banking and saving up. I deserve a vacation and I want to use that vacation to go explore, to go make memories. So I'm currently planning a trip to the Pacific Northwest and I'm soaked about it. A lot of people might think that's irresponsible. Like, oh, you should really be putting that money towards debt. And like, yeah, I could be putting that money towards debt. You're right. I should maybe put that money towards debt. The reality is I haven't taken a vacation in over a year and my job ends in a year. And I think this will be the last vacation I take before my job ends.

17:14Brian Preston:What happens when your job ends? What happens when your job ends? Okay. Okay. Um, we want you to go on vacations. We want you to make memories. We want you to have experiences. We want you to be able to enjoy life because you are right. Life is worth a living, but that does not mean that life is worth the living with an expensive price tag. There are plenty of ways that you can still create memories, experiences, do things that do not cost money where you could still be putting money towards that debt, getting out of that$23 ,000 debt, and also preparing for the time when your job ends. What does that mean?

17:45Brian Preston:If I was in$23 ,000 of debt and I knew my job was ending, I would be terrified not knowing what the next steps are. I desperately need to know that she has a plan. She needs a foosighting in her life. And I've got, I've got it right here. Here's the solution because just walking through, she's currently got a job. So hopefully she's got her highest deductible covered. Hopefully she's getting the employer match. I have no idea what the interest rate is on that debt that she was 23 ,000. It ain't low. It ain't going to be low. And then it also, to your point, you get to step four because one in four are your emergency reserves.

18:21This is also going to get you past what happens when you lose this job, since it sounds like she's just a contractor and she knows she has a term certain on her career. You deserve vacation. Okay. I'm willing to go a little bit with you and say, look, hard work, you know, what can re-energize you taking a little time off, but you got to bedazzle your basic life and do stuff that doesn't cost a lot of money. And this might be something where, Hey, do we have a sleeping bag in a tent in the back or is this something where we're just going and staying with family and friends? That's just a recipe.

18:53If you're running up more debt and you feel like you're entitled to this, all you're doing is you're creating the secret recipe that is just going to explode in your face. It's kind of like when you see people put the Mentos in the Coke and then they're shocked. She's building up a Coke Mentos bomb and doesn't even realize it because She's thinking that she can do this on her own time and it's all going to be okay. Act accordingly when you have desperate times with just a little bit of runway. You can save yourself from this bad, bad moment in time.

19:26Brian Preston:This episode is not sponsored by Coke or Mentos. And we don't, by the way, don't do that. Don't do it. Put a disclaimer somewhere. So I haven't done, I've just watched YouTube videos. I feel like we'll save that for the jackass people. Isn't that the name of their show? Now we got to put explicit on this show. No, or beat me. But isn't that what the guy from Dukes of Hazzard was? Yeah, yeah, yeah. Johnny Knoxville. That's it. Johnny Knoxville. What were the frugal... Hey! JC and some big guy. What were the frugal, unsexy habits that allowed you to have money to invest? Back then, Publix would sell cereal.

20:01Brian Preston:Two for one. So I would go to Publix and I'd buy 14 boxes of cereal every Sunday. I'd eat that all week and that's what I had. Those muscles aren't powered by cereal. We got the$8 paper blinds we put on the windows, and that was there until I sold the house. My wife, not a huge fan, but man, were we saving money. What was the cereal of choice? Well, so if I was trying to eat healthy, it was hunting up bunches of oats because that's healthy cereal. But if I wanted something fun, I'd go Lucky Charms, and I'd bounce back and forth with those. And then Cinnamon Toast Crunch, that was like the weekend deal.

20:32And were you like pouring whey milk in there? I know. Because to get those muscles, there's no way just all carbs all the time is fuel in that machine.

20:40Brian Preston:It's amazing what youth in your 20s can do, right? That's better than any sort of supplement out there. You sure about that? Obviously, look, that was, I was trying to be incredibly frugal early on, create margin, begin to save. That's not necessarily the advice that I would give you. I don't think that's super healthy. I don't think it's something that you should do. But in my world, that was a way that we were able to create margin, begin saving, and then the way that we bedazzled our basic life is we would go Cinnamon Toast Crunch on the weekends. How did you do a whole interview without breathing?