Home Prices Are FALLING, Mortgage Rates Are RISING

22:32Brian Preston:But if it doesn't match the life that you're trying to live, close to schools you want to be and the people you want to be and the community you want to be, and then you're not going to be happy there. So I would think about it from that standpoint. What house purchase is going to give you the highest quality of life? And then Bo just gave you all the, he gave a lot there because a lot of times it's the school system that's in the air. I would also add, what's the neighbors going to be like? Because that's who you're going to be hanging out with. That's who you're going to vacation with. That's who your kids are going to play with their kids.

23:01So highest quality of life. There's an adage that kind of just drives me crazy because forever you heard people say, hey, go buy the smallest, most affordable house and cheapest house on the nicest street you can. and that on financially that sounds like a great idea if you if you go and buy a four hundred thousand dollar house when all your neighbors live or seven eight hundred thousand dollar homes yeah your house probably is going to appreciate more because it's more affordable but it's back to the highest quality of life if you're broke as a joke because you you stretched as much as you could to get in this house and all your neighbors you know they're going on vacation they're traveling because maybe they're not as stretched as you and you feel poor all the time or you feel like you don't belong, what's that going to do to your personality and what's that going to do to your happiness factor?

23:52It's going to create a problem. It's going to create a problem. You know, there's so much happiness research that if you are the most successful out of the group you hang out with, your happiness gets skyrocketed because the people you're pacing yourself with, you feel really comfortable with yourself. They do this in education too. That's why it's always amazing. Everybody always wants to go to these Ivy League schools You're the valedictorian from your small town. You go to this Ivy League where everybody else is a valedictorian. You all of a sudden feel like you're lesser than, more than likely.

24:24No, everything in life you have to really take zoom out and get true perspective. Put yourself in a situation where you get to be the best version of yourself, not because you feel like you're lesser than or you've put yourself. Now, look, I like pacing myself. I've always tried to live around people that morally I like being with, that I feel like have good behaviors that are a lot of fun to be with. But I also try to be very perspective on what is this house going to do for me? And so I know I want Bo to give kind of the financial. Then I want to give you kind of the uncle's wisdom there on don't let this thing.

25:02It's not going to be just a financial engine. because I have had neighbors, like our houses have gone up in value where I live. And it's kind of unique because in Georgia, I was like, I don't even think you can make money. South Atlanta doesn't go, real estate didn't go up when all the houses I owned in South Atlanta moved to Nashville and like, oh, this is what it's like to actually have an appreciating asset. And that was just always a sad thing. I think we just had some bad timing on our houses in South Atlanta too. But it is one of those things where I had a neighbor who doesn't understand investing.

25:34and he was like, I think I need to upgrade my house so I can get more appreciation because we could make even more if this house was at this purchase price. And I was like, you realize house is just a use asset, you know, because at some point you're going to want to live in a house in retirement. It's better if you have your army of dollar bills and your Roth IRAs, your 401ks, your brokerage accounts, because that money you can consume or let it grow. And so you don't have to work so much with your back, your brain and your hands. Whereas your house, you have to make some hard decisions. And, you know, things that create unhappiness for me is moving.

26:09Because I told my wife, even though we live on a little tiny postage stamp in the Valley of the Country Music Stars, she's going to have to put me on that and bury me in that ditch in the backyard because I don't want to move again.

26:20Brian Preston:I thought we were putting you on set. Oh, yeah, that's right. I'm Han Solo in it. I'm Han Solo in it. Yeah, there we go. Carbonite rain. We're going to make me like Han Solo where I'm frozen and recorded right over there in the corner. I love that. I like that idea better. I feel like we went way all over the place on that answer. We're going to get to three questions on today's Q &A. Devo6912, thank you for the question. And if you would like a Tumblr, if you don't have one. Devo surely has a. I feel like you do. They have to have a Tumblr. If you don't have one, email winner at moneyguy.com because it is Tumblr Day.

26:57By the way, we found out PJ came by. You know, a lot of you guys were mad because we had a lot of questions from PJ.

27:03Brian Preston:We did like three. And I found out because I was like, surely, you know, PJ did not have a Tumblr. So even though he was taking flack from the audience that we always take his questions. Never on a Tumblr Day. He never had a Tumblr Day. So maybe I could be wrong about Devo too. That's why, yeah, my memory, we have a lot of tumblers away, so I just like to give a caveat. All right, next question is from Justin L. It says, with home prices fluctuating and potentially more change to come, how should existing homeowners factor this into their home value on their net worth statements? Look, this is one of the reasons why.

27:41We get in trouble. People get mad at us about this.

27:43Brian Preston:This is one of the reasons why. Well, not you guys. I guess you guys are one team. this is one of the reasons why on our net worth statements, we both like to value our homes at price we paid plus improvements. Like if you do some big capital renovation or something, you add that in there. And what it does is it removes all the funky business from you being like, oh, my net worth is way up or, oh, my net worth went way down or, oh, this is a great year. Especially if you're not someone who's in the market to sell your home and actually turn that into wealth. Like my house gone up in value a ton, but I'm not selling it.

28:14Brian Preston:I'm not going anywhere. It doesn't matter that that increased in value. So in my net worth statement, I'm just going to list it at cost. And then at some point in the future, when I end up selling it for more than what I paid for it, that's when I'll get to recognize that price appreciation on my net worth statement. In my mind, unless I'm going to turn it into usable capital tomorrow, there's no value in having that phantom appreciation on my net worth statement. The accounting term is lower of cost or market. because that's what you're doing is your cost of what you paid plus any additions. It's a use asset, so it keeps those distortions because there's way too many people that let the perceived appreciation of their house or the phantom appreciation of their house then impact their behavior thinking that they're millionaires on paper, but they didn't actually start building assets, army of dollars outside of the house they lived in.

29:09And that's not what you want to base your retirement off of. Now, look, if you are, maybe there's a lot of people that their house has appreciated. When you move to the lower cost of area or you downsize, voila, that money will show up on your net worth statement. So it's not like we're telling you to let that money disappear. I think it's just keeping you a little more sober and honest about what you have in usable, workable assets so that you can own your time that much sooner. Yep.

29:40Brian Preston:Love it. Justin, if you would like a Tumblr, just email winner at moneyguy.com. People howl about that answer. Your house has gone up a ton in value since you bought it. Do you? What do you value yours at? Just what I bought it for. And what you paid for it, right? But you watch. We'll get some comments on that one because people are like, I like seeing what my house is worth on there. And I'm like, all right. Because I will say it's gone up a ton in value, but it has also like come a little bit down. So you don't know what's going to happen. so I'm glad I didn't put it at that peak price. If your house goes up$50 ,000 in a year, but you didn't save any money, I don't want my net worth to go up by$50 ,000 just because Zilla said my house.

30:23Brian Preston:I want my net worth to reflect the behavioral things I'm doing, how much I'm putting in, how much I'm investing, how much I'm paying down debt. I want those things to be reflected, not this use asset that goes up or down. I really relate to it as a use asset. Like I'm not planning to sell it. No. I have to have a place to live. So like, yeah, I'm not getting that money for a very long time. Yeah, that's it. And who knows what that's going to look like. So yeah, no, I like the way you guys do it personally. All right. Next question is from SkillSnapsH5W. It says, hey, money guy, if my Roth IRA is fully funded and I get my employer match and I have no debt, can I contribute to a taxable brokerage?

31:05Brian Preston:What's the best way to invest in order to access funds before I retire? I'm 26 years old. So this is a young person doing really well. Oh, Skill Snaps got some skills, obviously, and good income. Is he being kind of foo-ish, though? What do you have to say about this? I don't know the income here, right? Where'd you get his income from? How'd you get that? Just because if you can fully fund your Roth IRA, if you don't, you know, you don't, and he says, I get my employer match, no debt, can I contribute to my taxable? Look, I'm just saying he has enough money that he's trying to figure out. He's on step six.

31:46He's trying to figure out. That's what I was going to say.

31:47Brian Preston:I think that one of the things I'd investigate is am I fully done with step five? Have I done, am I able to contribute to a health savings account to do that? And if not - I'm assuming he has emergency reserves. Maybe I shouldn't assume because you know what assuming does? What's it do? You know, you and me. Yeah, so I would think that you have access to a retirement plan because you get the employer match. I would consider, man, is there a really exciting tax incentive for me contributing to my employer-sponsored plan inside of Step 6? Whether that be on the pre-tax side and getting a current year tax benefit, or if I'm in a situation where Roth makes sense, I could do the Roth 401k.

32:26Why would you not want more Roth IRA? I mean, Roth 401k.

32:29Brian Preston:Well, we don't know his income. That was the whole point I was making. I don't know where he's at. I said, because he might live in a high tax state, even though he's below the Roth IRA income threshold. He didn't say he was doing backdoor, not backdoor. I see what you're saying. That's what I'm saying. I don't know his income, but it seems likely. He's 26, though. That's going to be a really big income for me to not want to do the Roth 401k. It seems likely that your employer-sponsored retirement account may be the best place for, again, socking money away before you jump to the taxable brokerage account.

32:56Because even if you want to retire early, I'd want to know what's going to happen to your career trajectory.

33:01Brian Preston:I want to know what's going to happen with your family situation. You don't have any debt now. Will you have debt in the future? Like you're thinking about buying a home, that sort of thing. There's some different things that go in there. That's why we have the financial order of operations. You don't have to overcomplicate it too early. If you can just follow the foo, you'll likely set yourself up in a good spot. And by the way, that's no shade to a taxable brokerage account. It's just, and look, I think that there's starting to be a little noise on this. It's because I've seen, and I think it's a branding thing.

33:26I've seen that there's some content creators that are out there trying to put brokerage accounts ahead of a lot of other accounts. And I'm like, okay. I mean, I know that's a branding thing that you're trying to go out there and get territory. Because that's, like I said, I've heard me give discussions where publicists will say, what's your thing that's different than everybody else? So there's this pressure to go out there and try to create your thing. I'm here to tell you, I don't let us get caught up in the branding game. I'm trying to tell you what to do to win this game of money. And those tax incentives, if you're a 26-year-old and you're not in like the, what would you, I mean 30-plus percent on the marginal rates of taxes, I mean even if you're low 30s, I'm still loving that Roth tax-free growth that could come in that Roth 401k.

34:16Don't sleep on those tax benefits. There's going to be plenty of time as you get older and build assets that you'll be able to load up that after-tax brokerage account because we love that account too, but it's a time and a place that you do these things.

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35:12Brian Preston:What propels you? Propel with Gatorade electrolytes. Well, Skill Snaps H5W, thank you for the question. If you would like a Money Guy Tumblr, just email winner at moneyguy.com. Next question is from Skippy. Hi, Money Guy team. That's because when it comes to Skippy, Brian, as a peanut butter, what do you think about it? You're a peanut butter connoisseur. I think you only end up with Skippy is because you went to Costco or Sam's and they were selling it, you know, in a two gallon container and it was really cheap. You're not a Skippy guy. I'm definitely not a Skippy guy. I'll eat it because I like all peanut butter.

35:50I'm an equal opportunity peanut butter eater.

35:52Brian Preston:If you want to know, if you're curious about Brian's thoughts on peanut butter or, you know, tasty pantry goods, make sure you're following us on socials. Make sure you go follow us. One, subscribe to the channel right now, but make sure you follow us out on their Instagram, out there on TikTok, on all the different places where you can find Money Guy content because, you know, you might just understand how Brian feels about pantry goods. We need to put Skippy's question back up because I was so focused on peanut butter. I didn't read the question. I don't think she asked it, did she? I didn't.

36:24Brian Preston:She didn't ask the question. I just saw I got taken down. We went straight to peanut butter. After we answer Skippy's question, let me tell you a side effect of doing that peanut butter recording. Well, nobody knows about that yet. It's not out yet. I'm sorry. And after Skippy's question, we're going to get to today's special segment. So we better answer this question. It's going to be a surprise. Surprise. Hey, Money Guy team. In respect to the FU, does deductibles, step one, count towards my emergency fund, step four, or are they completely separate from each other? Brian, you wrote the book on this.

36:54Brian Preston:Common question from the FU. You wrote the book on this. No, I often say that emergency reserves are so important, it gets two steps in the financial order of operations. The deductibles covered, your highest deductible covered, more specifically, is to keep you from making desperate decisions. That's the first part of it. But then I want you to just, you know, because we know free money from your employer, It's hard to beat a 50 % to 100 % guaranteed rate of return. You're never going to get rich if you're paying a bank 20-plus percent with credit cards and so forth. And then, of course, we want you.

37:26Second step of the FU that's emergency reserves is step four, three to six months. Of course, you can include that because they work together. It's just more of an indicator of, hey, are you going with your next dollar in the right order of operations to make it through this process?

37:43Brian Preston:I've got nothing to add to that. I didn't leave you any guess. No, I mean, this is a pretty straightforward question. Yes, it absolutely counts as part of it. They are distinct in how you operate through them, but by the time you get to four, one just gets incorporated right on in there. So I'll tell you the rest of the story is because you're going to see, I'm going to give you guys some definitive guidance on how awesome peanut butter is and maybe which brands are the better ones. But I did this for the channel, and I love peanut butter, and I have a whole history with peanut butter because it got me through some poor times.

38:13Brian Preston:I have a whole history with peanut butter. But I will tell you, eating, consuming that much peanut butter caused some distress for my stomach. And then I had to go on the AI agents and I said, hey, is something wrong with me? Because why am I struggling so much today? And it's because of all the oils in the peanut butter. Did you really eat that much that day? I ate a lot of peanut butter. Because, see, I screwed up. When they put all the first one, because they were all brand new things of peanut butter. And I mean, that's exciting. We open up a brand new container of peanut butter. That's true.

38:50Brian Preston:I do remember the first one. I put a spoon, a big spoon. We used a big spoon. It was a large spoonful. And I was like, you would have thought I was trying to get rid of hiccups, that big old spoonful that I put in there. I was like, I'm in trouble. Well, Skippy, thank you for the question, the peanut butter tangent. And as a reward, we would like to give you a Tumblr if you don't have one yet. The things I do for the show, though. Have you? Email winner at buddyguys.com, Skippy. Boat practically drowns itself. I'm willing to consume large sums of peanut butter. I was basically a water polo player right there.

39:17Brian Preston:What's your thought on Incrustables? Because I'm also peanut butter. I'm huge peanut butter. Well, I've got different types of sandwiches I like. But do you have a history with peanut butter? I don't. I mean, we've been together for a while, but I wouldn't say we have a history, I don't think. Look, the whole reason I've even brought up peanut butter is because Bo has this unhealthy thing he's sharing about his fascination with cereal. and I think if you're going to look for the thing you're doing to bridge the gap when you don't have money, it's not ramen and it's not cereal like Bo says. It's peanut butter.

39:50That is the thing that I think is really valuable.

39:55Brian Preston:Matter of fact, I sent you guys some pictures of my favorite peanut butter snack. Yeah? You asked about Uncrustables though? But I was asking about Uncrustables, yeah. Look, you're paying a huge premium to cut the crust off of you. I like Uncrustables. I mean, what's funny is I don't know what, who owns Uncrustables? Is it Smuckers or? That sounds right. No, is that right? Probably. Am I right? Last time I was at Disney, they were handing out free Uncrustables. And I was like, wow, this is the coolest thing. That's your dream day. I hadn't had an Uncrustable in quite a while because I'm too cheap to pay for that premium.

40:28I'll cut my own crust off. And they're good. They're really good. And I'll also share Kristen on social media brought over a box because it didn't make its way into the bit that we were doing. She brought in an Uncrustable that was honey and peanut butter. Oh, have you not had that before? Oh, no, no. Not the Uncrustable version. If you want to know, and we're way not doing financial stuff right now.

40:52Brian Preston:You are so off topic. We'll get back on point after this. Back before we lost, you could have peanut butter in schools. I'm old enough that you could have peanut butter at school. So that's a thing that's gone away. So much so that the lunchroom ladies, they would make these peanut butter sandwiches that you're like, why does my peanut butter not taste this way at home? It's because it was peanut butter and honey. Peanut butter and honey, yeah. And that's what the Uncrossable sells a version that is. I will give you permission to go buy that because it has that lunch lady approved taste that's hard to recreate at home.

41:25Brian Preston:Buddy, you take that peanut butter, that honey, and you just add a little bit of banana in there. There might be some. Oh, goodness. Nah, look. What is that called? Bo. What is that called? Go ahead and tell them. No, do not say it. No, say it. Do not. How about this, guys? That is Bo's favorite peanut butter snack. Let's see if you as the audience can name what Bo calls these snacks. So you got a half a piece of bread, you got a full piece of bread that you're having with a full banana. And honey drizzled over the top. And it's holding the banana. What do you call Bo's favorite snack? The mutants just got to see full mom, Reby, come out.

42:03Brian Preston:I said, you will not. It has a name. It does have a name. Reby, what's that next question? Okay, we actually, the very next thing. We're not going to say the name. We're asking the audience to guess what the name is. I'm actually very excited about our next segment. Can I just say? Yeah, me too. It's a very good one. Today we're going to do Moneyverse Milestones. We are going to celebrate some money milestones from the Financial Mutants, Real Life Financial Mutants. They have posted these in the money verse, our financial meeting discord channel. It's free to join, go to moneyguy.com slash money verse.

42:39Brian Preston:We just crossed 10 ,000 members in the money verse. Can you believe that? That was last week. So I just wanted to give a shout out. Um, it is a thriving little community we have there, uh, or actually a very large community we have there. So thank you for being a part of that. And there is still room for more people to come and join in the conversation. We have a channel on there where people share their milestones. Maybe you don't have somebody that you can talk to about hitting net worth milestones or financial wins in your life. People can share that in the money verse because we get it. So I'm going to read a few to you guys and I'm going to get your thoughts, reactions, and we're going to take a minute to celebrate.

43:17Brian Preston:The first one is from Wessie 20. They are homeowners at 23 and now engaged. It says, just finished building our first home at 23 years old. We have 65K combined in Roth IRAs, 120K gross income, and 90 to 100K equity in our home. Also, we're engaged. And they shared a photo from their engagement as well. What did the fortune say? It looks like it says. It says, a lingering question will be answered happily tomorrow. Oh, did he have that? Did they have that made? Or was that just? I think it was coincidence. They did not specify that I know of. If anybody from the Moneyverse knows more, let me know.

43:59Brian Preston:But I thought that was very cute. I know somebody else who liked nuptials at an early age. I wasn't that young. I wasn't that young. You're 24. Yeah, that's not 23. I was 24. Yeah, yeah, yeah. That's right. That's right. You resemble this. I mean, 23 and engagement is probably going to be at least six months. Yeah. Okay, yeah, that checks. That checks. I'm with you. I mean, I'm just telling you that if you got all that going on at that age, be fruitful and multiply because that is just awesome. Y 'all are making the world a better place, and I'm super happy for you guys. I am so happy that you guys are engaged and getting married.

44:38Brian Preston:I was actually more impressed at 23 years old as homeowners. No, that's a cute thing. I know. We kind of lazed over that. That's very rare. Back when houses were a nickel. Very rare. It was easy to say you bought a house early, but to do it at this point, That's impressive. That's super impressive. Those are all wonderful milestones worth celebrating. Kudos to you guys. The next one is from Jake. It says, a summer of working nights in a cheese factory has paid off. I maxed out my Roth, and I've saved enough for a nice road trip this spring. Look, Jake, you've earned it. I love this. Hey, you're getting that cheese.

45:15Brian Preston:This is what it's about. Good job. maxing out. By the way, if you ever, if you go, like, one of the things when you go to Europe and you go to, like, France and you go into a cheese place where they make cheese, I love cheese, by the way. Cheese should be on everything, but it stinks. It reeks. Have you been into a cheese place? You won't believe this. No. It really stinks. So Jake earned that Roth contribution. You go enjoy your vacation and hopefully you'll get your smell back at any time now. At 19 years old, I had not maxed out a Roth IRA. That is outpacing. By the way, 19 years of age, because that's younger than 20, 97.61.

45:58That's better than 88 times over. That's 97.61. So, Jake, every dollar you save and invest. So, what are we at, 7 ,500 this year? 7 ,500, yep. 7 ,500 times 97.61. I need to do that again. Hang on. Let me do that again. 97.61 times 7 ,500. That's not a typo. $732 ,000. That's wild.

46:28Brian Preston:Just that one Roth IRA contribution has the potential to turn into over$700 ,000. I thought this was excellent financial mutant behavior for a 19-year-old. I think it's great. Even just the fact that he said, and I saved up for a nice road trip this spring. I was like, shut up. Go do that road trip. For seeing what you want to do and actually saving up for it. Like, that's amazing. The future is bright. Dazzling that basic life. So congrats to Jake. All right. Lastly, C-Dog says, my retirement date is confirmed. After 20 years with my company, I submitted my retirement date of January 1st, 2027.

47:05Brian Preston:New adventures already lined up. So he listened. He knows what he's retiring to. And that made me really happy. Here's what I hope C-Dog did. I hope C-Dog stress tested the plan, worked through all the iterations of, okay, what does retirement look like? What, you know, how are we going to travel? How are we going to replace automobiles? What are we going to do for healthcare? How are we going to, if we have kids, how is that going to factor in the financial situation? And stress tested it and ran it through Monte Carlo and has a high probability of success that, hey, if I leave work and I retire as of 1-1-2027, I have a high probability of success, high comfort level that we are going to be okay, that is absolutely a thing worth celebrating.

47:46Brian Preston:And congratulations, C-Dawg. That's huge. Yeah, by the way, when I wrote this, I wrote S-E-A-D-O-G. So shame on me because I actually saw on the screen. D-A-W-G. It was C-D-A-W-G, dog, like a good Georgia bulldog is. So congratulations, C-Dawg. That's a milestone that's well-deserved. I'm glad you also know what you're retiring to. And just keep playing that up. Every year do the net worth statement. Come up with, you know, if you have a significant other, come up with what the travel looks like for the coming year, what the goals are. And I think you'll find that you can enjoy that next phase because you put all the hard work already in.

48:28It's DGD. If you know, you know.

48:31Brian Preston:We have loved seeing all of the stories, all of the questions. We can say that, but we can't say what your banana sandwich was. Stop going back to my snack. You're really ruining my thunder today. I'll tell you why. You're doing awesome. You keep going. No, but what I was going to say is I really have loved seeing all of the stories and questions, conversations shared in the Moneyverse. If you want to join, now is a great time because we actually have a special announcement. We are going to do a content team, Ask Me Anything, on Wednesday, September 30th at 3 p.m. Central. So if you haven't joined the Moneyverse yet, or if you haven't just been in there for a while and need to fire up your Discord account, now would be a great time because we are going to be doing an exclusive Ask Me Anything event on September 30th.

49:17So check that out.

49:18Brian Preston:But there are guardrails on that, right? They can't ask you stuff about us. I mean, what's the title of it, though? Right. They could ask you what your sandwich is called. Maybe that's where it will be revealed. I'm not revealing it. Maybe somebody else on the content team will reveal it. Oh, man. Go to moneyguy.com slash moneyverse if you want to join our Discord and be part of that AMA. That's next week, right? Yeah, next week. Can't wait for it. It'll be really fun. All right. That concludes our Moneyverse Milestones segment. Thank you for partaking and being a part of that. We are going to move on to questions.

49:56We do have a lot of guesses for what this sandwich is called, for what it's worth.

50:04Brian Preston:My personal favorite is, let's see, where did it go? I want to remember correctly. That's a good one. That's pretty good. The Bonana PB sandwich. Oh, Bonana. The Bonana peanut butter sandwich. That's clever. That was cute. That's clever. Banana extravaganza. Foo Nana butter sandwich. Okay, you're just trying to get us to like you. get in there. I love it. All right. If there's more content team that I need to see, let us know. We're going to do another question in the meantime. Let's go to Bland Hound's question. It says, hi, The Money Guy Show. My wife and I are 27 and 25. We now make$210K a year, which is huge.

50:49Brian Preston:And our$220K in low interest debt, which is also huge. That's big too. But it's low interest. mostly student loans. Is it ever okay to prioritize this debt in the interest of starting a family? What do you think? You know, it's always interesting. We get these questions around, hey, is it ever okay? I want to just pause there for a moment and remind you money is nothing more than a tool that allows us to accomplish the things that we want to accomplish with it. And not all of us have to have the same goals. We can have different goals. And depending on the hierarchy of our goals, it will influence the way we make our financial decisions.

51:29Brian Preston:So like what you're asking, hey, is it ever okay for me to have this goal and pursue this goal? Of course that's okay. What you have to recognize is, is there an opportunity cost? If I pursue this one goal, is there some other goal that might be adversely affected because I chose to pursue this goal? I would argue for you guys at 27 and 25, if we're solely and strictly thinking about mathematics, beginning to pay off low interest debt may not be the mathematically optimal solution for you. Because for a 27 and 25 year old, we know the wealth multiplier is not the food. We know the wealth multiplier.

52:06For a 25 year old, it's 44.04. And for a 27 year old, it's 33.8.

52:11Brian Preston:So for every dollar that you invest, that has the potential by the time you retire to turn into somewhere between 33 and 44. Whereas if you're satisfying low interest student loan debt at 3%, 4%, yeah, you're going to save on that interest. But is that the best use of those dollars? So is it okay to shift your priorities and use your money to pursue a priority that matters to you? Absolutely. Is it mathematically optimal and might it be expensive to do so? That's also the case because I know how much money you make and I know how much you have in high interest debt. I don't know how much you've saved.

52:45Brian Preston:I don't know where your current investment balances are. I think if I had that, it'd be a little bit easier to give you a concrete answer. Blan Hound, we've actually given you the answer. It's called Millionaire Mission and the Financial Order of Operations. Once you get to step eight of the Financial Order of Operations, you can do whatever the heck you want with your money. You know, what's funny is that this week right now is when, or it was this weekend, was FinCon. and all this weekend I was getting texts from friends that we typically see when we go out to FinCon and one of them is Andy Hill.

53:21So he reached out just saying, hey, Joe Salciha, JC, I was hearing from all kind of, Wes I know was one of the keynotes this year, I believe. And then we'll even say hello to PT because he's the founder of all that stuff. So really good people. And one of the things I know when Andy confessed that, yes, he prepaid his low interest mortgage early, but it was after he was already following the food type things where he was maxing out his retirement. He had his emergency reserves. He loaded up his Roth, all these things. So I think if you've got a bunch of student loan debt, but you have a very healthy income like that, knock it out of the park, get to step eight as fast as you possibly can, and then start throwing some bucks at that student loan and I think you'll extinguish it in no time because it's not gonna be hard at all with that big of a shovel to still make it through the like I said four five six um so you can start building step number eight ASAP love that thank you for the question bland

54:24Brian Preston:hound we appreciate you being here and if you would like a money guy tumblr email winner at moneyguy.com by the way another person Brian Feraldi yeah he was me and him were trading text last night because he was like, did you go? I got FOMO. I didn't go this year. And I was like, no, I didn't go either. And he was like, are you going next year? So it is funny because we all make friends. A lot of people you guys follow their content. We really do meet these people and have conversations. We were talking to Humphrey Yang yesterday. So it's kind of, it's so interesting that a lot of the people you follow, we do become friends and it's kind of fun to go to these conferences and see these people.

55:02Brian Preston:Let's go to another question from Chandler P. It says, my wife and I are renting, saving$1K per month for a down payment, buying in one to two years, depending on rates. Is a 3.75 % high yield savings account best to protect that capital? Or should we use broad index funds for growth? Chandler, if you're buying in the next one to two years, that means you need those dollars to be readily available for you in the next one to two years, I think you got to go high yield savings account. The risk is you could save that$1 ,000 a month and you could be buying into low cost index fund. You could have that.

55:40Brian Preston:But what if when the perfect house becomes available, the house that you've been waiting for, that you're ready to move on, but the reason it became available is because the economy hit the skids and the market went down and the price of that house dropped because the seller didn't have to get out of it. And now that money you need for a down payment is 15%, 20 % lower than you wanted it to be. you would be absolutely sick. So I think anytime you have an expense that is inside of the next four to five years and you're saving for it, you got to save for it in purely liquid, safe cash. High-eiled savings account, a great way to do that.

56:14Brian Preston:Money market mutual fund, great way to do that. Anything beyond that five-year timeline, I think you could look at low-cost indices, but for where you're at and what you're looking for, I think you go high yield. Well, I see what Chandler's thinking, because look, there's what we call a financial mutant trap sitting out there. And I fell into this trap too, is that if you go look, I mean, since 2022, the stock market's been on a tear. So, you know, if you know you have this house down payment that's coming up in the next, you know, 18 to 24 months, you know, like, man, the money I've already saved up could be worth, I mean, I could have, you know, I could have annualized 12 to 18 % for these next two years.

56:56Man, my money would be almost 20%. It'd be 20, 30 % more than it is right now. This is a no-brainer. I'm a financial mutant. But Chandler, I'm here to tell you it's a trap. It's because you need that money. And look, we love investing. But investing can be very volatile in a short period of time. And what would you feel if you needed this money in 18 months, and then all of a sudden the market's down 20, 25 %? You would be like, how was I so foolish? because I thought I'd have access to this money versus it actually being in cash and actually having cash. Access to cash is not the same as being cash.

57:36Don't outsmart yourself. I think a lot of financial mutants try to get really cute, trying to maximize and get themselves really caught up in a risky situation. So don't fall into that trap. Yep.

57:49Brian Preston:Well, great question. Thank you for asking it. I just lost your username. That was Chandler P. Chandler P. That was it. Chandler P. Email winner at moneyguy.com, and we would love to send you a Tumblr. All right, let's do one more. You know what? People gave us a hard time. We're asking PJ Dad Life's questions two or three times. Are you about to do it? I'm doing it again. And it's a Tumblr? But he knows he got a Tumblr. He already got a Tumblr, though. So is it? You know what? That's a cost-saving measure. Well done, Revy. I don't know if you saw this earlier in the chat. PJ did say, hey, you should ask one of my questions.

58:28Brian Preston:And if you ask one of my questions, I would like to bequeath my Tumblr to another one of our popular commenters. You know what? I think that's okay. I think that that is okay. You heard it from the money guy himself. I want to make sure we're careful about this whole proxy tumbling. But I still think this is... Proxy tumbling. Because, I mean, we had a good time talking to PJ. I think it's okay for this situation. Did y 'all catch the name of who he wanted to give it? I did, actually. I didn't see. I don't know. You were going to say it? I didn't see who it was. I'll reveal it at the end of this question.

59:05Brian Preston:PJ Dadlife says, hey, Money Guy team, if you are already saving 25%, how do you know when it's okay to loosen up and spend more instead of always trying to save the next dollar? PJ, I've got a great tool for you. You want to go to moneyguide.com slash resources and play with a Know Your Number tool. Because what that's going to do is that's going to tell you, am I ahead of the curve? Am I behind the curve? Am I right where I need to be? And if it turns out, based on the hard work that I've done up to this point that I'm at, that holy cow, I am well on my way to the finish line. And to even get to the finish line, I don't have to keep saving at the same rate that I have been saving.

59:41Brian Preston:Or I don't need to save more than 25%. When you have answered that in the affirmative and you have a high level of confidence, your trajectory is high probability for success, I think that's when you can begin to take your foot off the pedal, if you so choose. Now, a lot of people say, I don't want to take my foot off the pedal. I'm going to keep doing this. And rather than waiting to retire at 60 or 65, maybe I'll look at exiting the workforce five, six, seven years sooner than I thought. I think that's totally okay too. But that's how I would do the analysis to make that decision. Well, look, use the tool because the Know Your Number really is going to give you that knowledge of if you truly are ahead of the curve.

1:00:22But also, turn on your senses to the people that you care about. I mean, because you're going to get to an age of we know real success starts kind of taking traction in your late 30s, early 40s. And this is also the phase where your kids are starting to get a little older. You've got to start planting seeds, guys, that you want to be the good time rock and roll family members that when they leave the nest, that they actually come back. Yep. So you don't want to be, you know, I've learned this lesson. You know, my daughter came to me because we love cruising, but I got to the point where I was buying blow-up mattresses to take on the cruise ship so that my oldest daughter could just sleep on a blow-up mattress.

1:01:02It's a bit much. She was like, Dad, you know, I'm like, come on, this is a deal. This is still all the food you can eat, all the shows. And she's like, I'd kind of like to have my own bed. Why don't you just sleep with a pillow? And I'm like, I don't want to sleep in the same bed with my sister anymore. And I'm like, you know what? I kind of get it. And I realized I was being a little too tight with things. And I was not setting the hook to get her to come back in the future. So there are going to be indicators. I've had other of you financial mutants who have written me that, you know, you're driving 12 hours to go on vacation instead of buying plane tickets.

1:01:37Or there are indicators that you might look. There's nothing wrong that you were using your financial mutant skills to really respect that first ingredient in the wealth building process of disciplined living on less than you make. But there will come a point where it's diminishing returns because your army of dollar bills has gotten so big, especially 40s and beyond that now you're like, what are we doing? The incremental difference on some of these sacrifices. And that's why I do have an updated version of Millionaire Mission coming out. It's a paperback version. I put a whole section in there on you can't take it with you.

1:02:14And when you can start really letting go of things, because I've started, it's even got me leasing a car. Goodness gracious. Every month I'm like, what are we doing in the Preston household? But it is one of those things where I think you have to hold on loosely once you've measured twice, cut once. You know you've set the foundation and you're getting beyond steps eight and even nine of the financial order of operations. I want you to use money to the fullest to enjoy this life that you have. Love that.

1:02:45Brian Preston:Love it. Well, PJ Dadlife, thanks for the question. and we are going to honor your request to hand over the Tumblr you just won to Bo Hanson Spotter. Oh my gosh. We have seen your username in the chat. So you know what? Happy to give you a Tumblr. If you don't have one yet, Bo Hanson Spotter, just email winner at moneyguy.com. Thanks for being here. If you haven't yet, fill out the Financial Mutant Survey. Go to moneyguy.com slash survey. We only have one more week before we shut that off and create the content. So get in on it. I do think it's important, you know, chicken or the egg. Bo is already in good shape, but we have now created a positive reinforcement is that Bo's going to be my age and he's going to still probably be doing shirtless photos.

1:03:34I mean, don't y 'all feel like we're creating, we've created an animal here? Let's not make that face, Reby.

1:03:39Brian Preston:I was just like, are you, you not now have the reputation that you're just out there making shirtless photos? I mean, that's just what you do. I do, but do you not follow his wife's feed? I'm not even on social media and I hear about this stuff. Shots fired. Shots fired so hard. I don't love Bo. But look, if I had Bo's physique, I would probably be like, why is Brian on the Money Guy show shirtless again? I mean, or at least in tank tops. I mean, there's a reason all my shirts have sleeves. Hey, when we do the merch store, can we do Money Guy tanks? Is that a thing we can add? That is not the first cut, is it?

1:04:14We're going to put tank tops in the store first. I think there's... Nothing but money. There's a better way to go to a merch store. So, guys, we love creating content. Thank you for tuning in. Still two weeks back from vacation. This is my second week back from vacation, so thank you as we're still working the rust off of this thing. But we're having a blast. We don't take for granted. Do not forget to do the survey because we're creating content off of what you guys share, and it's valuable because everybody who, you know, we all come into this process. We know 80 % of millionaires are first generation.

1:04:48So there's going to be a lot of people currently and in the future who just don't know what to do with their next dollar. It's nice if we can give them affirmations, give them the path, give them the data that lets them know this is the way to treat this powerful tool. I'm your host, Brian, joined by Mr. Bo Reby. Rest of the content team, Money Guy, out.

1:05:08Brian Preston:The Money Guy Show is hosted by Brian Preston and Bo Hanson. Brian and Bo are partners with Abound Wealth Management. Abound Wealth Management is a registered investment advisory firm regulated by the Securities and Exchange Commission in accordance and compliance with the securities, laws, and regulations. Abound Wealth Management does not render or offer to render personalized investment or tax advice through The Money Guy Show. The information provided is for informational purposes only, may not be suitable for all investors, and does not constitute financial, tax, investment, or legal advice.

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