Her Coast FIRE Plan Has Some MAJOR Holes | Making a Millionaire

25:31Then they get to be 46 or 43 anytimes, and they realize, oh, my gosh, the most powerful thing I have, which is compounding growth and the wealth multiplier, I was wrong. I wish I would kind of, yeah, I went too far into the Epicurean side of trying to maximize versus taking a spoonful or a little bit of deferred gratification to ensure that I, as a life well lived all the way through. Now, if you can tell me you're going to make 400, $500 ,000 a year in your forties and fifties, we can go live the hog life. I mean, just go for it. I mean, but I don't know that you can promise me that you can do that.

26:07No, I definitely can't. I guess my one question, so, and this was kind of a big push for me to apply on the show because I started watching Making a Millionaire. And, you know, you would say, okay, you're going to end up with$2 million. That means you have$40 ,000 to spend. And I was like, oh, that's really different than what I have. But I thought the spreadsheet, so I'm using a spreadsheet that's from like a financial influencer, I guess. Money Flamingo. They're like over in Australia, but they read Diwizira and they created this spreadsheet. So I thought that the dollar amounts were inflation adjusted.

26:45I think that's what it says on the spreadsheet so that I'm not actually going to end up, it's like 1.7 million of whatever that's worth in 30 years. Well, it depends on rate of return assumptions, right? So if you're using, if 7 % was the rate that they used as that, I would guess most likely that that was a nominal rate of return. You'd have to adjust for inflation. Now, if that was an inflation adjusted rate of return, what they're actually saying is that they believe inside your portfolio, you can achieve a 10 % rate of return, right? And they're showing you a net of inflation, 7%. I would argue, especially for a young person, while I think there's a real chance that you could earn 10%, I would not base my retirement wellbeing on that.

27:23I'd rather be much more conservative in my estimations. So that's why we were just using the math. If you said seven, we're going to apply a 3 % inflation rate to bring it back to today's time. Does that make sense? Yeah, and that is a rate I picked. Okay. Yeah, I put in that information. I actually had it much more conservative at 5%, but then I was watching your show and you guys used like 7.5 % and maybe I misunderstood. Maybe that's not inflation adjusted. Well, if you were using 5%, right, then you add a 3 % inflation, that would be like an 8 % rate of return. Now we are kind of aligned, right?

27:53Like that is more in the ballpark. The fact of the matter is we just don't know what the market's going to do. I mean, we have the historical of what the market's done, but there are seasons where the market does not perform as well as other seasons, and you don't get to control that necessarily. Now, fortunately, you are young, so you have a long enough timeline. Odds are the market's going to do pretty good for you. But in the die with zero vein, if we told you, hey, in our opinion, 8 % is not the savings rate you ought to be shooting for now. It ought to be something higher. Are there life sacrifices that you would be making?

28:25Are there things that you would not be able to do that you're able to do now that that would cause some friction? Because I want to make sure we're being like sensitive to that, right? Like, are you able to still enjoy your 30s and do the things you want to do, even if you had maybe not the 40 % savings rate, but some savings rate higher than 8 %? I think so. I mean, I might have to, I don't know, not eat out as much or I don't, you know, whatever the case may be. Maybe I can't get that nice Airbnb as, you know, I have to do a little bit less. But I don't think it would too much. I would rather play it safe.

29:00Like I'm a relatively risk-averse person. But, yeah, I was just kind of going by that spreadsheet. So at 1.7, I was withdrawing$132 ,000 a year. And that got me to like the$300 ,000,$400 ,000 left. And that's why if I had that data, because I'm curious to know if that was already inflation adjusted or if that's just in nominal dollars what it was at that point in time, because then that brings it back because$132 ,000 brought back to inflation is a much less. Because things are just going to cost a lot more than they do today. Definitely. And help me understand the mathematics here, right? So let's say you make$110 ,000, right?

29:39And you said you have a 36 % holdback for taxes, right? So$110 ,000, we're going to hold back$36 ,000. That means we're going to net about$70 ,000. So then you have a burn rate of$4 ,000, right? That's what you showed us on your budget,$4 ,000 a month. So$70 ,000 minus a$4 ,000 monthly burn rate. So it's going to be, what,$48 ,000. We're going to have$22 ,000 left over. It's my math, my math, math's on that, right? Yeah. In theory, that$22 ,000, this is after your living expenses and after your taxes. That would be what I would assume goes to savings. but you said you're saving 9 ,000. So we have like a pretty big deal.

30:15Yeah, that's the investing side. But you're thinking it's going to go to cars, it might go to other goals. Yeah. That's what you're thinking. Yeah, I also have like 600 for cash to save every month as well. Okay. So like my total savings. But that's for like the sinking fund for the car and for the house, right? Yes. Yeah, they're pretty much all. I mean, except, well, an emergency fund, I guess, is a little bit of a sinking fund. But yeah, I'd like to buy a house at some point. And I have like a travel fund because when I don't work, I don't get paid. So if I, this year I went to Croatia, which is really fun, for like nine or 10 days.

30:46I usually do like a big trip like that every year. And so I don't get paid for a third of the month. So I do have a travel sinking fund to just help out during that time. So I can kind of use that as income a little bit. Brian, do you remember when we decided to go all in on our YouTube channel, but we just didn't know if all the hard work was actually going to pay off? Oh yeah. It was a little scary at first because you have all the what ifs. What if nobody watches our videos? What if this doesn't work? What if we're just talking to ourselves? But thankfully, we took the leap. And honestly, it's been one of the best decisions we've ever made.

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32:37Instead, use Indeed Sponsored Jobs to find the right people with the right skills fast. It's a simple way to make sure your listing is the first candidate C. According to Indeed data, Sponsored Jobs have four times more applicants than non-sponsored jobs. So go build your dream team today with Indeed. Get a$75 Sponsored Job Credit at Indeed.com slash podcast. Terms and conditions apply. This is one of the reasons why I love the financial order of operations, right? Because it's this nine-step process we put together to help us kind of figure out where to put our dollars. When you think about this saving, you already said you got$600 going to cash.

33:13So let's move away from that for a moment. The$750 that you're investing on a monthly basis. So now walk us through how you're doing that. Because we saw you have a Roth IRA. We saw you have a solo 401k. How are you divvying out your dollars? Because I'm wondering if what I don't know is what's the appropriate savings rate for you. Well, I wonder if just doing some of the financial order of operations stuff would begin to answer that question for us. So walk us through on that$750 ,000, where does it go every month? Well, now that it's down to$750 ,000, most of it goes just into the Roth IRA to max that out.

33:45And then the rest of it goes into the Roth portion of my solo 401k. And I will admit, I feel like I kind of dance around the financial order of operations. I think I go through them, you know, where I was probably at five. I was maxing out both of those. I mean, not fully because solo 401k, you can set aside like 60 something thousand. I don't make it up. 72 in 2026. That's true. I can't do that. But, you know, now I'm kind of back to like, oh, my emergency reserves. I have to go back to, you know, to number four and go back to that. And so I feel like I kind of dance around to the different steps.

34:21And I don't know if that's the best. But that is the way it works. It's who-ish. It's who-ish. Yeah. Okay, so you max out your Roth IRA. That's$7 ,000. So then you have about$2 ,000 roughly going into your solo 401k, going into the Roth portion of your solo 401k. Yeah. And when I was saving a lot more, it's like a 60%, I think, savings, right? It was maxing out the Roth IRA, maxing out the employee Roth portion. Salary deferral. Yeah, which is the same limit as just a regular 401k. And then anything extra, I would either put it into that profit-sharing employer part. Wow, so you were doing over$2 ,500 a month.

34:58She said she was doing 60%. That's what you got to help me understand. We were at 60 % savings rate. Now we're at 8%. I guess if we include the 600 to cash, we're at like 15%. I did the math in my head. I could be wrong. 60 down to 15. How'd you arrive? Is that your personality, though? Are you just hot or cold? Maybe a little bit. But like I said, I think I just got a little tired, you know, and I developed like a lot of anxiety around it. Like, am I not going to have enough? But am I also just not doing anything in my life so I'm not having fun? Is that a thing of yours? I mean, even to do what you do for a living, I got to think to watch YouTube videos and be like, I could do this.

35:40I mean, there's something there with your personality is that you're either in love or hyper into something or you're just not, right? Yeah, I would say that, especially like my hobbies. I used to rock climb all the time. And then I got introduced to pickleball. And like, I can't have more than one hobby at one time. I mean, I'm seeing a trend here is that you're kind of, and that's what I would love to do is because it seems like investing became a hobby. And that's why you got up to 60%. But you're like, oh my gosh, it doesn't leave anything for life. And I'm a miser. So what I would love is for at the end of the day today is that you leave knowing, you know what, there needs to be a base level.

36:15It's more than 8%. but it doesn't have to be hog wild 60 % either. I want to leave some margin for life and just know that about yourself. I mean, we all have, I was just talking to Carter, who's our third in command here, that one of the things is I've gotten older, I've realized some of the quirky things about my own personality is my blessing, but it's also a curse. And that thing is if you have hyper focus, that's a blessing is because you're in this unique skill set that you wouldn't be able to do if you're just the typical person that walks down the street. But it can be the curse in the fact that you get distracted and go in a completely different place.

36:49And doing that at 33 with your savings and investing could be bad down the road if we don't get the math right to make sure you're saving to not have regrets later. Yeah. Yeah, I agree. And I think too, when I was really saving a lot, I used to be engaged and then I'm not. So living together for quite a while, which really brought down living expenses. And I did save up a lot of money to buy a house. Dave Ramsey is going to hate me. Bought a house a few months before we were supposed to get married. And then, you know, so I lost a lot of money in that. So I think that's a big part of the break too, because that happened in the beginning of 2024.

37:34Yeah. So I think that's why I just got, I was like, just a little tired of doing it all. You were trying to do a whole lot. It was an achiever mentality, just throwing it all in there. And there was a big income disparity. So I had, I was doing a lot of the, you know, a lot of, yeah, that kind of stuff. So on this, you mentioned earlier that you have this 36 % holdback for taxes. When you actually file your tax return every year. Are you actually paying 36 % effective tax rate? This is the first year. So basically, of course, my mom is my accountant in a way. She works under a CPA. So technically, he looks over all the tax stuff before it's submitted.

38:19But every year, it's basically just been my tax rate has increased. So when I started out, it was like 23%. COVID hit. I made like$30 ,000 that year. It was a bad time to start a new career. And then it went up to 30. And then, you know, so this was the first year of 36. I think last year was 30. And I did owe more than I had, you know, I pay the quarterly estimated taxes and then usually I have some leftover. So if I owe, I've already got that set aside. So I don't feel like I'm actually spending my money. But last year, I actually owed more than what I had. More than you had set aside. Set aside, yeah.

38:55And it kind of, I mean, I'm looking at the tax tables right now, and this is 2025's tax tables. As a single individual, you cross into the 22 % bracket around$48 ,000. So that means, that's why you can go a little less than that. But a lot of your income is subject to that marginal rate of 22%. What's the state income tax where you live? Is it five or six percent? I don't know. I mean, that's why I bet when you add a state income tax to your marginal, when you bring it back, that's where the 21%. And then Social Security and Medicare, the self-employment tax is 15.3%. I can see you've got good counsel.

39:33Yeah. I mean, this is the hard part. I think when people realize what they pay in taxes, because most people don't realize when you're a W-2 employee, you get wages. Your employer is paying 7.65 % on your behalf. Yeah. This is this thing that nobody realizes. That's why it doesn't seem like that big of a deal, but your employer is paying. Yeah, like insurance and the matching. All of that I don't get. You know, I'm paying$440, I think, starting next year for my health insurance. And yeah, there's no match. So all of that investment is just pure to me. Now, we just boohooed a little bit, but here's the good news.

40:06Even with the boohooing of the 36 % reserve rate, we're going to show you, you got this. And I was even going to a different place hearing, and this is true for a lot of single filers and especially entrepreneurs. one of the single best way to offer some reprieve on your tax return is to do that via a qualified retirement plan. So I love hearing that you have a solo 401k that you're taking advantage of, but you're doing the Roth portion of the solo 401k. And we love Roth. Like we think Roth is amazing, but with you being in that tax situation, it might be an interesting thing to ask either your mom or the person overseeing the taxes, hey, what if I shifted my Roth contribution, my Roth solo to pre-tax?

40:50And in doing that, does that actually create a mechanism for me to save more money? Yeah. If you just think about 2026, it's going to go to$24 ,500 that you can salary deferral into a solo 401k. And we're going to call it 30 % is your marginal tax rate once you do all in. That would save you like$7 ,300 in taxes. So walk me through this. If you could just max out your solo, you will save enough in taxes that you could then fund your Roth IRA. Well, in just doing those two things, you just saved$30 ,000 a year. Now I'm not suggesting that's where it needs to be, but I am wondering, are you even saving in the most efficient way for the strategy that you're trying to implement?

41:34Yeah, because that seems more, like I don't really even have to do anything except click a different button in order to do that. Because my solo 401k for the salary deferral, I can do both Roth and traditional. I get to pick. And then for the profit sharing, it's always going to be pre-tax. But I think that if you're able to fund, max out the Roth IRA, which you are, you may be reaching that threshold. This is hard for a lot of young people where Roth 401k might not make the most sense. Pre-tax may be the one that makes the most sense. And by shifting that, you decrease what you're paying to the taxes.

42:04You increase what you're actually saving. You increase what you get to keep in your back pocket. Yeah. I thought the financial advice that was common was once you get to the 24 % bracket is when you do more traditional. And if you're below that, then you focus on the Roth. So I was kind of - It depends on what you - Because you have, I bet, I'm pretty, I need to, I mean, I don't have a phone in front. I do that on purpose so I don't get distracted. But I think there's a state income tax in Maryland, isn't it? There definitely is. And it's probably pretty high. You're already, your marginal rate, if you add those two, if you add your state and your federal, you're probably getting close to 30 % right there.

42:40And that's the part you're missing. tax there too on top of it. And see, there's another. So there's a lot of incentive for you to. Yeah. And I'm in city limits. So it's probably more than, you know, two minutes down the road is literally the county. So you have to make a, okay, if your goal is, hey, I want to do this coast thing, I have these two options. I can either pay myself money and build my coffers or I can pay it to the government through taxes. Yeah. I would imagine you'd rather pay yourself and do that. So that even might be a mechanism because I just. An interest-free loan to the government, right?

43:10That's what they say. You're at 8 % savings. You are one of those people we talk about all the time. If you go to moneyguide.com slash resources, we have this deliverable said, how much could you save? And we talk about 25%, 25 % for 20%. You may very well be one of those cases where 25 % may not be the right number for you, right? That may not be what's required, but it might be 15 % or at least to give yourself options so that you can reach that tipping point. So you can reach that boiling point. So you can reach that time where then it actually does make sense to take your foot off the gas.

43:44I just think you've done it, my opinion, a little prematurely. Too early. Yeah. I would agree with that. Well, let me put some color with this is that it's back to the whole mindset issue. You told us, was it 2021? You've done all of this. Yeah. Maybe late 2020. So you went pretty crazy in a good way. In a good way. 60 % savings rate. In a good way. But now there's probably some scars from that. A little bit. For sure. I mean, because you've already shared with us some of the struggles from that. What I'm just trying to make sure is that we're closing out when we record this. You know, you're only four years into this journey of saving and investing.

44:26Yeah. To say, and it's back to Beau's analogy of a marathon runner. If you sprinted, you know, on a 26.2 marathon, and you sprinted like it was a 100-yard dash, it makes sense that you burned out and you're over there holding your side going, maybe I just didn't eat enough bananas. No, you just ran wide open for the first, you know, you acted like this was a 100-yard dash versus 26.2 miles. I still say with you only doing this for four years on a 30 to 40-year journey of building these assets so they can be an army of dollar bills to work for you, you're closer to the front line, to the starting point than you are, to midpoint, to the ending.

45:07That's where I get worried from a mentality standpoint when people tell me they're coasting. Because we have financial mutants all the time that are in their 20s making a great living, crushing it. Because they had a great living, they should be in the make wealth phase. You've got to get to exactly what Bo said. We call it the bowling point, the tipping point, whatever you can do to where now the assets, That's why we have the people say, why did you even come up with this Know Your Number course? We did the Know Your Number course so you know if you're ahead of the curve, behind the curve, or right where you're supposed to be.

45:40And you try to do that with this spreadsheet. We'd have to, after the show, we'll figure that out. But it is one of those things where I think you're so close to the starting line. I don't know that I think you're ahead of the curve yet. You are in this moment in time because we want you to have one times your income by age 30. Here you are at 33 with your well beyond one times. but does that mean you get to now take your foot off the – you need to be doing more than 8%. Yeah. Maybe a little bit because I was like pedal all the way down. Nowhere else. You're running the 100-yard dash. I do not think it's necessary.

46:12Yeah, and now I'm going like 20 miles an hour. Yeah, I don't think – you started walking, right? And you're at the place where you don't have to sprint anymore because of the hard work you did for the last four or five years. Yeah. But also walking probably would not serve you well. And so what I'm excited is that we're going to be able to show you, hey, here's what it looks like if maybe you change that a little bit. What if instead of doing this, we did this? And what are the outcomes? And what you do is the earlier you make those decisions, especially when you're young, the more flexibility you give yourself to really get to make fun decisions in the future.

46:40Because you may decide at 40, hey, I want to work two days a week. I want to take six months off. Whatever that thing is, and we'd rather you have more margin in the system to be able to do that than, uh-oh, I was a little too aggressive in my assumptions. What I want to know, Bo, is so we can make sure that we share with Danielle some of our thoughts, because you and I are going to huddle up on this. Do we have enough assumptions about what her dream expenses are for the future, what we currently have, so that we can kind of do some research on our own? Yeah, the only thing that's not incredibly clear to me, that I'd like to have a better beat on to be able to really crank through some numbers.

47:17You said that right now, hey, my living expenses right now are about four grand. And at four grand, I can do the things I want, the way I want, when I want. But one day, I'm not going to be working five days a week. Even when I'm working four days a week, I'm going to have one extra day that I'm able to go do something. And I wonder if that something might actually involve consumption, right? Does that go out of the cost? Yeah. I mean, it's probably pickleball. Yeah, right? So we got to get the really good paddles. We got to get the – so my question for you would be when we think about the – and this is another really hard thing to project when you're 33 years old.

47:49when you think about in that time where I'm either working less or not working at all, what would it cost in today's dollars for me to live the life that I want to live? That means go on travel and be able to replace the car and be able to play pickleball and be able to eat out and be able to all those things. Yeah, donate. Because I guess it would be more than 4 ,000, but you have to tell me, maybe 4 ,000 satisfies all that. What is that number for you to be able to really live the life that you want to live. I'm assuming this is in today's dollars. Yeah, in today's dollars. Okay. Because I think I'm of the mindset that I'd rather do a lot of the traveling and stuff now.

48:28And I probably won't do that as much in retirement because I already have terrible knees. I can't imagine when I'm 60 what they're going to be like. So I don't think I'm going to be doing anything super luxurious. But I don't know. I guess if I didn't have to say, like, because I guess you get to the point where you're not investing anymore. That's right. When you retire, you stop investing, right? You go from an accumulator to a decumulator. And maybe just cash for, you know, cars and the house, the AC brakes, whatever. So I would probably say, like, my current income right now. Like, if I didn't have to set aside as much money for investing, I think, you know, whatever that is in future dollars, like$110.

49:11Yeah, so$110 minus your tax burn, right? Because taxes could be an issue. So I had you at like$70 ,000 would be your net of tax number that's coming in. Yeah. Is that the magic number? Hey, if I had that coming in, I have to think about saving. I could cover the taxes. $70 ,000 a year. What's that a month? About$5 ,800. Yeah, I definitely think that that would be. All right, so now we have a target. Now we have a target to shoot for. And I do hope at some point I'll be a dual income. You know? Sure. Like I would like to get married at some point. Another reason why there are so many variables that can change between now and the time that you get to 37 and between the time you get to 60 and then by the time you've already told us you're going to die at 90, by the time you die at 90, that could change the circumstances.

49:55So all you can control right now is your behavior. And so what we'd rather you do is while you can, whatever cliche you want, strike while the iron is hot or take it, whatever, do that now. So that way, as some of these other variables do change, you'll be in an even better position to make that adjustment and to make that switch. And when we figure out it's not going to be 60 percent, it's going to be more than 8 percent. But whatever the number percentage we find out, what I like and what gets me excited is it leaves enough margin for you still to live a life. Because I think that's the problem.

50:26You made this into an all-in, you know, you had two speeds, wide open and then Snell's pace. Yeah. And there's so much before there that we could get you in a healthy place. But then it gives you the freedom to say, unlock and say, I'm going to automatically make it automatic for the people, set it, forget it. And then after that, I can go enjoy my life and do the die with zero thing. So I feel like I'm getting the mindset of enjoying the moment without sacrificing what the wealth multiplier and compound growth can do for you. Hey, this has been great. I'm excited. You're going to be in a great spot.

51:00And I'm excited we can do a little bit of number crunching and show you how there might be a better way to do money for you. Okay. Brian, how awesome was Danielle? Yeah, I think she holds a special place in my heart because I feel like the conversation we had with her is the same conversation I've had with a number of my friends over the years. But what's wild about Danielle is that she had like two gears. It was like she's like wide open, saving over 50 percent of her income to now she's like, hey, there's got to be do something different to the point she's bringing it all the way down to 8 percent.

51:34And that breaks my heart because I feel like there has to be an in-between. is noble what she wants to do, but I'm worried she's gone too far the other way. Well, and remember, this was her mindset. Hey, I want to do this, and I'm taking my foot off the gas, and I want to take my foot even further off the gas. And so we said, okay, let's figure out what that actually looks like for her. And remember, she said her goal in financial independence was to be able to spend$6 ,000 a month in today's dollars. And she wanted to operate under this sort of coast fire mentality. I'm going to save now, and then at$37, I'm going to back it down.

52:04So we said, okay, we need$6 ,000 a month per month in retirement. We're going to assume a 3 % annual inflation, 3 % annual salary increase. And we're just going to use her current pay of right at about$120 ,000 a year. And we said, okay, let's assume because she is young, she can earn 8.7 % annualized. And we know that she already has 165 ,000. So we said, all right, let's problem solve for her. Right now, if she's backing down her savings, what does it need to be from now until 37, from 37 on to be able to reach financial independence? I remember when you and I started brainstorming this on where the solution was.

52:40We're like, okay, 8 % seems like she's gone way too far with it. But so let's do something. We always talk about 25%. Maybe a good in-between starting place was 15%. Well, and this is what we found. If she just saves 15 % from now until 37, when she gets to 37, she'll have about$326 ,000 saved up. But then if she were to reduce that, she's going to take her foot off the gas. how much would she have to save to still be able to reach financial independence? The number was 12.5%. Yeah, see, that doesn't seem as exciting to me. Now, look, we're solving to try to get, because it looks like we need to get her as close to$4 million as possible.

53:19And I like where our mindset was with this 15%. But nobody, when we tell her, hey, guess what? Congratulations, you get to lower once you get to this point. Instead of doing 15%, we're gonna let you do 12.5%. It's gonna be a one, one, one. Rather, what we tell folks, and we say this all the time, I say, we want you saving 25%, 25%. The reason we tell people that is if you can do it early and often, you give yourself flexibility, you give yourself freedom in the future, and Danielle's no different. Now, she was saving some crazy number, like 60%. We said, look, I don't think that's necessary, but what does it look like if you actually follow the money guy rules?

53:54What does it look like if you do save 25 % of your gross income? Just for a little longer. Just for a little, and let's not pick 37. Let's say, what does it look like if you can save 25 % from right now at age 33 out until 40. That doesn't seem that tough. That's not crazy. I think we can do it. And it ties into our rules. It's very financial mutant-esque. And so this is what we found. If she can do that, just save 25 % from now until 40, she's able to turn$165 ,000 into$624 ,000. Okay, now we're getting somewhere. Okay, so we're at 624 by 40, and our goal is to get to around 4 million. How much could she then take her foot off the gas?

54:31How much could she back off if she did it then? It's wild that she could reduce her savings rate to 4.6%. That is coast fire. That's going to get a reaction. It's not exactly coast fire, but it's close to coast fire. I think that's what she's looking for. She was just trying to do it way too early. She was trying to pull her foot off the gas before she had actually reached the critical mass, reached the boiling point, reached the place where her dollars could actually work for. Well, and I know, you know, I envision Danielle seeing this information and saying, okay, I can stretch, do a stretch goal of 25%.

55:00that's half of what I was doing when I was doing crazy beyond 50%. But then we get to tell her she gets to save less than 5 % the rest of the way. That seems like coasting to me. And I think that's a win. And what's great is we even told her because she was a self-employed individual, we said, hey, we even think that there are some ways that you could think about how you're saving. Maybe doing the Roth solo 401k doesn't make sense. Maybe you should do the pre-tax solo 401k. And maybe you should really follow the financial order of operations. What I think is beautiful is if she were to do that, and we just assume that she follows the foo to a T, when she gets to financial independence, when she gets out to age 60, and we actually look at her three tax buckets, you can see that just by doing it that, she'll have about$1.3 million in tax-deferred assets.

55:44Right. $2.3 million in tax-free assets, and another$340 ,000 in after-tax. She will then, at that point, be able to pick and choose what her tax rate is because she's saved and built in a super efficient manner. I love how this is all laid out. Now, I want to play devil's advocate and try to pick this thing apart a little bit because she talked about die with zero a number of times. And so she might be willing to say, hey, this is great. But remember, I'm not trying to leave a legacy. I'm not trying to leave a lot of money. What do you say about that? Well, what I would tell her is this assumes that you work all the way till 60.

56:16You wait till 60 for financial independence, and this is assuming a 4 % withdrawal rate. In reality, if she can save at this clip and she can build the assets early on, what's most likely going to happen is she's going to give herself freedom and flexibility to potentially decide on a more quick timeframe. Maybe I want to be financially independent at 58, 55, 53. I don't know what the number is. She'll be able to define that, but only if she does the hard work now to set her future up, self up to make that decision. Well, and I also think, you know, the problem with, tell me you don't want to leave a legacy.

56:47You have to tell me what day you put on dying. When are you going to check out? That's the thing is you still have to get to some level of critical mass so that just in case you live to a ripe old age, that this thing doesn't completely fall apart around you. She has all the tools. She has everything necessary to be successful, but I think she does need to adjust the mindset. I think she went through some life stuff. She was a little burnt out, but if she can kind of recalibrate, recenter, redefine what her goals are, I think she's going to be in a great place to still be able to control her entire financial future.

57:18So let's go ahead and kind of recapping, what homework would you give to Danielle so she can go ahead and start working on this order and this plan tomorrow? Number one, I said she needs to beef up her emergency fund. She has$10 ,000 in reserves right now, but we said based Based on her living expenses, she should probably be closer to$18 ,000 to$24 ,000. Okay. We also said she probably ought to consider increasing her savings rate. Our recommendation, instead of 8 % right now, we would rather her go to 25%. If she can do that, she's going to give her 40-year-old self a lot of flexibility, a lot of options.

57:51We also said inside of a 401k, she may want to shift from doing Roth contributions to pre-tax contributions because being a self-employed individual, she does have a more cumbersome tax scenario. So switching to pre-tax would likely free up cash flow and allow her to have additional savings. So she could do those Roth contributions. That's right. If she could do the pre-tax solo, then she could then fund her Roth. She's going to be able to build her three distinct tax buckets and control her financial future. Now, I know this is going to have her saving a little longer than she initially planned, but when we show, I wish I could see her face when we say, hey, look, you just do this for a little bit longer at this reasonable level, and now you can coast only saving less than 5%, I think she's going to be pretty excited.

58:33I think, again, she has all the tools, all the ability to be able to do it. I think that she has a beautiful financial future if she can make some of these decisions today. Danielle, thank you for coming on the show. We had an absolute blast creating this type of content with you and I see so much opportunity. Go on this journey, please. 25 % just a little bit longer. Hold on just a little bit longer and awesome stuff is coming your way. If you would like to be a guest on Making a Millionaire, you can go to moneyguide.com slash apply. Or if you want to check out any of our free resources, go to moneyguide.com slash resources.

59:08I'm your host, Brian, joined by Mr. Bo. Money Guy team, out. Making a Millionaire is hosted by Brian Preston and Bo Hanson. Brian and Bo are partners at 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 Making a Millionaire. 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.

59:44All investments involve a degree of risk, including the risk of loss. The guests featured on Making a Millionaire are not clients of Abound Wealth Management at the time of recording. Their participation should not be considered a testimonial or endorsement of Abound Wealth Management.