How Student Loans Are Crippling Americans (& What They’re Doing About It)

21:28Brian Preston:For all car payments, all the auto payments you have have to be less than 8 % of your monthly gross income. So whether you have one payment, two payments, five payments, 10 payments, you cannot exceed 8%. So some people really struggle with this. I'm like, guys, I can't do that. To which we respond lovingly, perhaps you should not have two car notes at the same time. Maybe is there a way you could figure out, instead of replacing cars on the same schedule, Is there some way we could stagger them every three to four years so that once I get this paid off, I'm able to then have another payment so I don't have them both at the same time?

22:09Now, why is that 8 % number so important, though? Can we talk about that? Well, yeah. I mean, think about it. Because not only are you going to have a car payment. Realize, we want you paying cash for cars. That's the first thing we have to get past. We want you to pay cash, but we have a no hypocrisy policy where I know in the beginning of my financial career, I had to have a car loan. I couldn't pay cash, but I needed to have a job. So these things, to make it work, the bridge that got me there was something like a 23-8 because I had to go take a loan. And what this does, the 20 % down makes you have a little skin in the game.

22:43The three-year amortization, meaning you're going to pay it off within three years, is going to force you that you don't go beyond what your wallet or your purse can actually afford. And then the 8 % is now going to work within all the other elements of your financial life. Think about housing is 25%. Your car loan is 8%. We're trying to keep your total debt load below 35 % to 40 % at the maximum. Because what we want to do is make sure you can still save and invest for the future. You still have enough money to go bedazzle your basic life. If you go out there and you run up 50 % for housing, 16 % for your cars, and then whatever your student loans that you've been strapped with, before you go look at it and go, holy cow, it doesn't matter how good my career is or my job is currently, there is zero left over for me.

23:34This is the component of discipline that we want you to structure your life so that you can actually live on less than you make, so that you can go ahead and start creating that margin that, given enough time, creates the magical recipe of wealth.

23:46Brian Preston:You know this weird phenomenon that I've noticed recently that I didn't know was a thing? Okay. Car shaming. You know what car shaming is? And I love this because financial mutants out there will so appreciate this. sometimes financial mutants make the decision to drive a car because they could pay cash for it or it was more reasonably priced or it makes more sense for their family and their circumstance and when you try to communicate this to the world around you they look at you like you're crazy oh why why do you drive that car that's insane you should drive this you should drive that and I've had this conversation no lie at least five times in the last two weeks I'm like no no why should I drive that car?

24:29Brian Preston:Why should we be driving that? Why should we change? The car that we have makes perfect sense for where we are and what we're doing. So for my financial mutants out there, don't let yourself be car shamed. If you're making fantastic financial decisions with your automobile, because they can be napalm for your financial life. Don't let the world try to tell you otherwise. Was that five different people that you had that kind of? It was one dinner with five. We're all in Bo's household. No, no, no. We all think it's... We just got insight into the battles that are going on in Bo's household right now.

25:04We went to a dinner. There were five couples.

25:06Brian Preston:It was a birthday dinner the other night. Five couples. It was nine versus one. Nine versus one trying to suggest to me what automobile we ought to drive. Well, that's because your wife had primed the pump. Oh, yeah, yeah, yeah. She was the ringleader of the nine. if y 'all didn't know Bo is still you know very functional minivan it's so great it's honestly really nice it's so great really nice and I think that there is a lobbying source in the household who wants to get outside of minivans oh yeah we always knew the minivan I knew I'm sure Rebe did too this was a pawn piece in a big chess game oh for sure that has been played but now that a new piece is being played uh huh yep But I still, I do agree.

25:51I wanted to know what car shaming was because I do think it's one of those things where there's a time or place. It's back to cars depreciate. I mean, there's something, and look, I'm now at the stage where we drive nice cars, but I look at it and go, these things are consumption and napalm for your financial life because they depreciate like a rock. They cost a fortune to maintain. So go buy something that's reliable. Opposite car shames. like if you're driving too expensive of a car yeah yeah he's like yeah that's right that's the thing no i i'd rather somebody i think at the beginning of your journey the best thing you can do is be disciplined about the car you're driving i still have the if you ask me all the cars i've driven in my my life which ones still give me the biggest warm fuzzies now there's an exception the cavalier the jeep the jeep has an exception you know when i had that because i was a season of life that was more of a lifestyle of what i couldn't do at 16 now i got to do as an older person but that first car that i financed with the original 238 that mazda 626 with five on the floor and then it had the oscillating um we're also not sponsored by mazda that oscillating um you know vents which i still don't understand why more car manufacturers don't put an oscillating vent think about every cool fan that you've ever had like the fan i have in my office right now i have a button i can put and the thing just it rotates around left and right and it's kind of blows you here and then blows.

27:17The car did that. I was like, this is the coolest feature I've ever had on a car.

27:22Brian Preston:So, auto manufacturing, if you hear that, bring back the oscillating vents. I love that Mazda. I thought it was the coolest car. I don't know how we got on this tangent. Just talking about cars. You're talking about car shaming. We're wandering around in the woods. Bo was talking about car shaming. Where are we? Did you give a tumbler? I didn't. Kara W, if you would like a tumbler, you get a tumbler. Just email winner at moneyguy.com since we answered your question. All right. Next personal finance question is from Derek S. How do you determine if a three-month or six-month emergency fund is necessary for an emergency fund?

27:58My wife and I both have stable jobs and our home hopefully has gone through most of the major repairs recently. So how do they determine how much cash they need to have?

28:09Brian Preston:Yeah, so this is one of those questions where personal finance is personal, but we can give you some benchmarks to think through. What we often say is, if you're someone, you mentioned, okay, you and your wife both have stable jobs. That's great. That's a solid indicator. The next question I want to ask is, okay, what does the income disparity look like? Is one of you a much higher earner than the other, or are you relatively equal yoked in your earning? And when you look at the living expenses your household has, what are those living expenses relative to either one of the individual incomes?

28:43Brian Preston:If the answer to that is, hey, we have a pretty modest lifestyle. We're both fairly equally yoked. We have stable jobs. Then you may be one of those folks that a three-month emergency fund makes a lot of sense for. But if you're someone who's like, okay, well, living expenses are a little bit higher. We have a lot of fixed costs because we have mortgage and we have auto loans. We're paying on student loans and we have a couple of kids and we have an income disparity or it might be harder for one of us to find a job than the other. Any of those that you answer in the affirmative would cause you to potentially expand your timeline out to that six month of living expense timeline.

29:18You laid it out nicely. I think that what I would always share is kind of where stage of life too, is that I think somebody, when you're younger, even in that messy middle phase, like let's just say a staff accountant. I mean, that's a great income. It's a stable thing. that if you had two staff accountants that married each other, they both can probably be closer to three months because they check all those boxes you said. But if that staff accountant fast forward 10, 15 years and one of them now is the chief operations officer or the CFO of a mega corporation and they have a very large salary, they're going to have to move probably to replace that income.

30:00If all of a sudden they got laid off. So that's why the specialization, And that's why I see it all the time, like in my neighborhood, is that these are higher earning people. Sometimes their careers cause them, because there's just not as many opportunities, it's going to take longer to get that job. So that's why you need to, sometimes the higher your income, the more scarce your skill set is, you probably want to go closer to six, maybe even beyond. But for a couple that's in the messy middles and y 'all are both, like you said, equally yoked and very close to your living expenses, the three months, you just had to go through the exercise.

30:35I actually detailed a lot of this also in Millionaire Mission. So you could go through the exercise of trying to figure out, you know, are you three months? Are you six months? But I know Bo gave a very good summary right there.

30:48Brian Preston:And another thing, people often forget to do this, but this is a great time to say this is we're coming up at the end of the third quarter, coming into the fourth quarter. sort of coming to the end of the year, one of our favorite things to do every single year is an annual net worth statement. We literally have a little celebration between the two of us when we do it and look at the numbers and it's so exciting. I would encourage you to do the same thing. Well, one of the things that you do every year when you do your net worth statement is you should review how much cash you have on hand. And as you're doing that, and as you're putting your cash and equivalents in that box on your net worth statement, I want you to think through, man, are our living expenses still the same that they were when we established that was our emergency fund?

31:27Brian Preston:Because if you used to spend$3 ,000 a month, but now your living has expanded, now where you spend$5 ,000 a month, you want to make sure that your emergency fund represents that correctly. And far too often people will have the emergency fund from a decade ago, not realizing it is not actually the emergency fund that they need in place today. And then back to stage of life is that if you're somebody who's like about to land the plane in the next three to five years you're going to see your cash reserves expand because just with retirement you're going to go beyond three to six months too great well Derek S thank you for the question hopefully that helps you think through your emergency fund and if you would like a money guy tumblr you can just email winner at money guy.com a lot of people loving the uh mario mug today just wanted to know you get some getting some comments it is a good one I mean I kind of whatever I'm in the mood for you know I've been jumping back and forth I have of course the star Wars motif that I do with the stormtroopers and you know, blah, blah, blah, blah.

32:28You know, I don't know. Today was Mario.

32:31Brian Preston:I'm so not confident about it. I love the Mario mode. I'd be more excited about that. All right. You guys are funny. All right. Brandon R is up next. I'm being forced to relocate for work. Your guidance says to put 20 % down on a house since this won't be my first house, but my wealth multiplier is above$15. Why no nuance on the 20 % down for the second home rule? And that's true. So to recap, you like to say put three to 5 % down on your first home, but then on your second home, do 20 % so you make sure you don't get out of your skis, right? So how should Brandon think about this? Yeah, I'd want to know a little bit more specifics.

33:16Brian Preston:Most often when we tell people, hey, the goal is to put 20 % down on your second home. It's because normally people make the decision for a second home because they are increasing lifestyle. I had the home that I started in, but now maybe the family's gotten larger or I want to have a large, I want to have a bigger yard or I want to have whatever that thing may be. So it's literally a lifestyle decision that I want to upgrade and change homes. Well, if you're making a lifestyle decision, we want to make sure that you're making it the appropriate place in your financial journey. And that place is where you say, okay, I had this house that I put three to 5 % down, and I likely have been in there for five to seven years because that's what I'm supposed to do when I buy a house.

33:57Brian Preston:And over that five to seven year time horizon, the price of the house has probably increased. I've also been able to pay down the mortgage so that the debt has decreased. I have a decent chunk of equity in this house. Well, the way that I make the decision to upgrade is, okay, I know that I have that equity plus any cash or capital I've accumulated. I can put 20 % down on the next house. It's okay for me to be making this lifestyle decision. Yours is a little unique, Brandon. I'd want to know some more specifics about your situation. For example, when did you buy this current home? What were the details around the purchase of the current home that you're in?

34:33Brian Preston:How long ago is that? Because if you bought this home last year, but now you're having to move because of job change. There may be some extenuating circumstances that cause the mathematics to be a little bit different for you. But then the next question I would ask is, okay, this next home that you're going to buy when you move, is it going to be a similar and comparable home to the one that you are leaving? Or when you buy the second home, are you upgrading? And I think that has to factor into the equation. Well, here's what I think. He didn't say it, But I think Brandon is thinking this because he's having to relocate and he already owns a house, but he's getting moved.

35:12I think he's thinking this is going to be his opportunity to become a real estate investor, that he'll go buy a new house, leave his existing and start renting it out.

35:21Brian Preston:You know that he's going to sell it. I think that's why he's asking the question, because the natural assumption is that you would sell your existing home and use the equity of that. And anybody who's owned a home for the last three or four years has probably got the 20 % just because of what happened with inflation and everything else. So this leads to me, just putting on my inspector gadget hat, is that he's actually trying to keep the existing home, but he doesn't want to put down 20 % when he moves into the new area. And that's why I want to give Brandon the why, because that's what he's asking for.

35:53if you look at the fred data meaning the data coming from the federal reserve on the typical american and i don't want my financial mutants to be typical americans all of their net worth increase is in their personal residence you don't when i see that like net worth of the typical american went up like 25 30 you're like hot diggity dog finally people are saving investing they're watching the money guy show and you're like nope it's all home equity their actual financial assets did absolutely nothing different. There's a big risk sitting out there is that people don't start saving and investing.

36:28Brian Preston:But wait till you see in an upcoming episode what financial mutants do. No kidding. That's a teaser. Keep going. So Brandon, here's why this is important to you. You just said your wealth multiplier is this. We want to make sure that you actually are doing what you're supposed to. Now you're going to say, well, Brian, that's why I'm asking if I can just put down 3 % on the new house. No, what you're asking is, can I be a real estate investor? Well, real estate investor is step eight of the financial order of operations. So I know, look, we've had making a millionaires, you can get lucky and become incredibly wealthy doing things.

37:02We had a military couple that they had some additional subsidies coming from the government that they built up a tremendous net worth very quickly by never selling a house. And that is a very popular thing. But I also think that you can't sleep on the fact that you take the the the five hundred thousand dollar capital gain if you're a married couple tax-free you know use that with the the new house also use that to top off all the you know put down 20 percent but take anything else to top off the financial order of operations i'm not going to shy away from that because i like you building assets outside outside of just real estate equity because and people are like why because real estate's done so well historically realize real estate is very illiquid and it also is very, you know, capital intensive when things go bad.

37:48So I just want to make sure that you're not faking it and get caught swimming naked when the tide goes out, when real estate goes into the doldrums and you don't actually have any true financial assets to give you depth to get you through whatever might be coming your way financially. When you need to build up your team to handle the growing chaos at work, use Indeed Sponsored 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.

38:22Listeners 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. Wishing you could be there live for the big game. soaking up the atmosphere in a crowd.

38:41Brian Preston:But too often, life gets busy. Or the price holds you back. Priceline is here to help you make it happen. With millions of deals on flights, hotels, and rental cars, you can go see the game live. Don't just dream about the trip. Book it with Priceline. Download the Priceline app or visit Priceline.com. Actual prices may vary. Limited time offer. It's so fun. I didn't read that. I did not read that. That's what he means if you already own a home because the second he wants to get. By the way, it's also. I think it's just hard. No, I think here's what I think. I'll tell you what I think. Okay. I think his job changed and he's moving out of this home before he wants to.

39:23Brian Preston:But he hasn't been in there long enough to have built up 20 % equity for the next one. Right. He put 5 % down and he's being his hand is kind of being forced. So he has to have cash. But in his mind, because he's a rule follower and Brandon, I appreciate rule followers. He's saying, this is my second home. It's not my first home. It's my second. I got to come up with 20. We might give it the asterisk. You know, it's just like the government tries to give, it has all these first-time homebuyer rules. And you're like, well, I owned a house. And you're like, boo, you still might qualify as a first-time homebuyer.

39:53So as it wasn't in the last. As long as, you know, there could be some crazy, extenuating circumstances. Brandon, put in the comments who's right, though. Because I still want to know, are you the woeful me? I bought this house 18 months ago and now I'm getting myself in a pickle of a situation? Or are you the potential real estate investor who's like, man, do you see how much I could turn this into rental property out of state rental, which is less than ideal, by the way? I'd be curious to know what Brandon said.

40:21Brian Preston:When you're putting in the comments who's right, it's spelled B-O, not B-E-A-U. I just want to make sure you get that right. Bo Hanson. Well, Brandon, as you're writing your comment and considering what ryan and beau have said you can email winner at moneyguy.com to get a tumblr because i just i'm sitting here i think because he asked it so nicely he was he said hey uh but my wealth multiplier is above 15 why don't i get so nuance here that's how i read it too i guess we don't know for sure but i read it the wealth multiplier like leans it in your direction you can tell which one of us be the disciplinary in this in this with the kids, popping them around.

41:02Brian Preston:You guys are funny. Wait until your dad gets home. Yeah, you're Darth Vader around here. That's right. No, I'm definitely not. All right, well, this next question is for Brian. I mean, Beau, you're going to have something to say too, but you'll see. This is a very Brian-esque question. I'm going to go grab a snack. No, stay here. Okay, it's from Eric1. It says, can I count my DVC, Disney Vacation Club ownership, towards the assets in my net worth? It was paid for in cash. Ryan, you're the resident expert on Disney. You're also a net worth expert. What do you think? Oh, man. How do you value a DVC ownership interest?

41:41Look, I will say out of all the – I don't love timeshares, as you can imagine. I mean, but the only one, unless it's in the Riviera, which, man, oh, man, did they screw up the Riviera because that's such a beautiful property. If you're a Disney person, you know what I'm talking about. But Disney Vacation Club is one of those unique things where it actually has done okay. I will tell you, I have probably done three Disney DVC tours and always thinking, you know what? I am probably the person. Like with the intention to be. Yeah, I have never pulled the trigger. I'm not a DVC member, even with all the perks, because it's just the thing.

42:24And that's not, is it A-Rich? How would you say that? Arch? A-Rich? I said Eric, but I didn't know. That's not to say that it's not a good decision for your family. It's just that I didn't like, and it comes back to the root problem I have with all timeshares, is I don't like that they own my future decision-making with all the maintenance costs and those things. It doesn't matter even if the property or if there's an appreciation potential with it. There's an obligation sitting out there with what they can do with the maintenance costs, annual ongoing maintenance that just was a bridge too far for me so that's why i was never able to hold my nose and get to the point that i could do um dvc even just because it couldn't overcome that that that problem that all timeshares have is that they they they promise you this great vacation at a minimal cost but as we all know in the background what's going on is those maintenance costs keep going up every year and getting restructured the capital calls all that type of stuff just makes it very expensive over the long term.

43:28And you don't get to just opt out. It's not one of those things where you cry uncle and say, I'm out of this. Now you do have the potential where you can potentially sell DVC, but because of all the caveats and because of the control that the market has an outside influence of Disney, because if you've ever priced buying DVC property, you have to catch Disney when they're asleep, meaning that maybe that when they're in, You wait for the world's worst time where Disney is struggling financially too, where they let some sleepers through on the value, where you could actually get, because they kind of control where the bottom is because they reserve the right to say, hey, if a deal's too good, Disney can step in and buy it for itself.

44:15So I've given way too much.

44:17Brian Preston:Can I dive in while you're here? Okay, I love all the Disney con. I'm trying to think through, because the question was, hey, can I put it on my net worth statement? Well, the easy answer is no. It's more of a footnote for the obligation. And I'm thinking through other things, other use assets that I might spend money on that may or may not show up on my net worth statement. I said like a country club membership. Okay. I have a membership to a country club. And technically, I guess some clubs, I can sell that when I sell the house or whatever. Should that show up on my net worth statement? Is there a chance in the future that when I sell the house, the membership associated with could go up in value?

44:54Brian Preston:That's what they tell you when people get convinced to buy these. Okay, there's a chance, but does that mean it's a net worth item? I don't know. What about ATVs, four-wheelers, boats, other use assets that you have? Okay, can I put them on my net worth statement? Sure, I can list them there. What I would be very, very careful of is I don't want to put anything on my net worth statement where the future outcome is not a high probability thing for me. I could put my investment accounts on my net worth statement because in the future, there's a high probability they're going to be worth more than they are today.

45:29Brian Preston:I've got history that shows that. But if I paid X amount for a boat today and I'm going to use that boat in five years from now, I'm going to sell the boat. Is there a chance I'm going to sell the boat for more than I paid for it? Is there a chance I'm going to pay more for this DVC property than I paid for it? So if I was going to list it, at best, if I'm going to put it on there, I'll put it on there at my cost and then I'm probably not going to increase it at any point in time. So if it actually does turn into an appreciating asset at some point the only time I'll ever recognize the appreciation on that is when I'm actually able to successfully dispose of it.

46:07Brian Preston:So in my mind I would not consider it an asset in that war statement in the same way that I would consider other assets. It's a used property. It's a used property. It's a used property so it's probably more of a footnote so that your kids know what their obligation is if something happens to you. Yeah, that makes sense. So it's totally a rich one. I read it, Eric won. I'm so mad at myself, but it was all one word. I did the same thing. You saw me. I was trying to phonetically figure out how to make this thing work. I literally questioned it, and then I was like, I'm just going to read it and go with it.

46:38Have we heard from Brandon yet, by the way? We have not. Come on, Brandon, what's going on here? I want to know who's right, Bo or me. Is it me being like, oh, humbuggish and old man on the front porch? Or is it Bo like, oh, what was you? Let's help you out. Well, a rich one, if you would like a Money Guy Tumblr, email winner at moneyguy.com. So now I want to know a rich one, which property is his home property?

47:02Brian Preston:What happened to Riviera? You know, it's been a while since I did all my research on it. You sigh. No, that's one of them. I love the restaurant on top of the Riviera. that the time that i know where i stayed did you stay there yeah i'm pretty sure it was it was new so one of the newer ones yeah it's new it's nice it's gorgeous it's um but it's um they they restricted oh gosh you put me on the spot i'm trying to remember but they've restricted your ability to kind of your market or selling or using it for your your um units on other properties or something i'm totally blanking on with it but there's a huge caveat that they only did it on the riviera and it crushed the resale market on the riviera timeshares that now um you know you can get those at a much bigger discount because you're kind of locked in to right on that property versus a lot of the others you can trade out and i think what disney was trying to do they got a little little they they the market was so good on dvc they're like let's squeeze this a little a little more in our favor and i think the market kind of reminded them hey no there's there's some things going on here somebody in the comments can probably you know who's closer maybe even a rich one someone else said if you resell riviera the new buy can buyer can only use the points at riviera so it does sound like there's a huge restriction because that's what a lot of people will go buy a cheaper property yeah and then they'll you know eventually use that to for grand feridian or other things but they really restricted the the riviera which was a very sad thing interesting somebody i knew somebody in the comments because it's been a while since i've looked at it you know because like i said i i have been close enough to doing it then i back away and then long enough for me to forget what the catches are and then i'll go back in and get all excited about and then i'll back away again and over research but that's my personality is over research and then forget over research forget honestly that's a great that's a great uh For those of you out there, it's a great mental accounting way to protect yourself from making bad purchases.

49:05Brian Preston:Force yourself to do tons of research. And then if at the end of the research you still want to buy it, it's probably a good buy. And if not, it fizzled away. I am not an emotional purchaser, but I am an emotional consumer, meaning that after I measure twice, cut once on something, and then when it works out well, I feel so much gratitude towards the exercise. I think sometimes the preparation and then the enjoyment are interconnected in that way. Ruby, I just saw a thing. I saw something coming through. Brandon has responded to the housing question. He said, are you ready? Okay. Bo was right.

49:44I've been in the house for two years. He's been in the house for two years and I don't have a lot of equity yet. So here's a way. That makes sense. That is a trick. I apologize. I misread it. I misread it.

49:58Brian Preston:We don't ever want our, the money guy rules that we suggest as guardrails for you guys. We never want them to like harm you financially. So like you've been in this house for two years, you put 3 % down houses, probably have not in the last two years, gone up a ton in value. And you just haven't been able to pay down the debt a ton. And now you're having to move. Probably want something you were planning on job change, whatever. and you're like, man, okay, I'm buying a second house. I got to do 20 % now because that's what the rule says. You're missing the spirit of the rule in that. But I will tell you, there is a learning lesson here for you to take away since I'm just going to throw this out there.

50:40Brian Preston:You bought this original house and you thought, I imagine you went through this thing. Hey, I'm going to be in this house for five to seven years at least, and I can make the decision. And then that changed. Now you're moving to a new area. I would wonder, are you familiar with the area? Do you know the traffic patterns? Do you know the parts of town you want to be in? Do you know the school? All those sort of things. It is not uncommon. We have clients that do this all the time, and I think it's a great idea. If it works for your family, there's nothing wrong with selling your current primary residence.

51:10Brian Preston:Make sure you go ahead and take care of that transaction. When you get to that new community, man, can I rent for six months to a year just to figure out where I want to be and to make sure that I love this job and I'm going to be here for the next five to seven years. Because what I want to do is there's a really good chance that based on what you put down and what your closing costs were on that house, you may not have even like broken even at this point on the transaction costs to acquire the first home. So you want to be careful not just rinsing and repeating that if you're not somewhere that you're actually going to be able to be for the next five to seven years.

51:45Well, I mean, I don't mind giving the additional context that I think that you got to get out of the first transaction so that we can level set back to zero because I wouldn't want you, even if I gave you the asterisk and said, Hey, since this was less than two years, you're kind of in this unique situation. You could go do three to 5 % of the next because now you're going to have two highly leveraged pieces of real estate, um, outside of your control with a brand new job. This, this is a horror story right in itself. But if you can level set, get out of the old property, rent like Bo said, I do think that there's probably some grace just in the fact that you never really got to live in the house.

52:22The rules are designed for you to live in that primary residence for five to seven years, because guess what happens over that five to seven years? No matter how bad your timing is, typically the time is going to be the cushion that protects you to where equity is building because of just inflation and other things, and you paying down principal, you kind of have gotten caught. And that's why we do have that five to seven rule, a year rule in there. So you can level set and then probably give yourself an asterisk to kind of once you get it back to zero, restart the process. But don't, and by the way, don't restart the process if you can't promise yourself that you're going to be in this area for five to seven years.

53:00If there's any chance to go relocate you again, then you've got to probably consider rent. It used to be corporations and others used to have these guaranteed or protection programs. I knew a lot of Caterpillar executives that they would buy your house or pay you, make you whole on any negative equity. The Great Recession ruined that for everybody because now these corporations realize, oh, my gosh, we cannot make that promise. There's a big risk. Real estate doesn't just only go up. So that game has changed completely. So you now need to, it puts more and more pressure on you, the potential homeowner, to make sure you go through our checklist.

53:42Go to moneyguy.com slash resources. Make sure you can fully and confidently go through that checklist so that you don't get caught in a situation getting moved way too soon.

53:51Brian Preston:Love that. We went back and answered a question. We did. But that's okay. Brandon gave us a specific topic. Well, I mean, I had to triage it because I'm over here just popping Brandon around. He wants to be a real estate investor. I thought I liked Brian. I just took a new job. So shame on me. That's where you're trying to read between the lines. That's where the personal and personal finance really kicks in. For sure. Yeah, thanks for sharing, Brandon. I'm glad that you chimed back in. All right, next question is from Desanche. It says, our army of dollars have been working hard for years, and we know we can stop saving and investing so much, but it's hard to slow down.

54:32any advice on starting to wean on start to start the weaning process any advice on that how do they slow down how do they know it's time how do they get used to that idea well first here's

54:43Brian Preston:here's the exercise and were there we's in here we's and us's okay yeah so i'm gonna assume there's like a a family unit here or or a couple uh here's the first thing i would do and this is an exercise i'll work through i would take all the money out of the equation like completely forget about money and let's assume that money was no object at all. You have all the money in the world to do everything in the world you wanna do. What are some things you would do? Oh, okay, well, we would travel. Or man, you know what? We'd redo the floors in the kitchen. Or man, we'd really like to redo that backyard.

55:18Brian Preston:Or we'd do that, do, do, do, do, do. And I want you to list out all the things that you would do if money were no object. And then I want you to go through and I want you to kind of just mark through the things that are unrealistic if money is an object. meaning, oh, you know, we would travel the world for 365 days. Okay. Maybe that doesn't make sense based on current trajectory. Mark through that, but man, redoing the hardwoods in the house, we could, and I would list those things. And then what I'd do is I'd figure out what that list looks like. And I'd have my list of eight to 10 things and be like, okay, is the way that I'm saving right now, this aggressive savings rate I have that I'm going to assume is much higher than 25 % of your gross income.

55:56Brian Preston:Is it causing me to miss out on other things that I would like to be doing or that I would like to experience? And is the sacrifice that I'm making absolutely necessary? Or is there a world in which I can still save at the 25 % or whatever the necessary savings rate is for me to hit my number and still be able to do the things today that I would like to do? Because far too often, and we see, I don't want to call it a horror story that's too aggressive, but we see far too often, Brian, there are folks that defer, defer, defer, defer, defer, defer, and they get to 60 and they've got this huge pile of money.

56:37Brian Preston:But then you look back and like, man, I wish that I would have done that trip in my thirties. I wish that we would have done the family vacations, man. I really wish that we would have done the backyard. So I could have spent time there with kids while they were in the house. You don't want have those kind of regrets. And so you want to make sure that you're not sacrificing all of today for tomorrow. Because the beautiful thing about compound interest and wealth building is you only have to sacrifice a little bit of today if you can do it early and do it for a long time period. It's the folks who don't do that that have to sacrifice a lot of today for a great big beautiful tomorrow.

57:13Look, I'll put it down like this, is that the easy answer is always tell people you have to take inventory of where you are this is why we talk about the net worth tool this is why we talk about know your number um that resource that we have at learn.moneyguy on that of just going through the exercise because you're trying to figure out your head of the curve behind the curve or right where you're supposed to be but also what comes into play is where are you at in this journey because what i don't want to look we've done the millionaire we've done our financial mutant survey and we can't wait because we're actually recording that content later today and it's it's fabulous you guys are phenomenal but which i struggle with is financial mutants so many of you guys are in your 20s and 30s and you're right there close to the the starting line and you're you're crushing it absolutely crushing it but just because you haven't been in the journey long enough your army of dollar bills just haven't reached that that bowling point of of having enough time to build traction or to reach the critical mass so i always tell people it's kind of a balance here.

58:14If you would lay out the wealth multiplier, look at all the multiples for a 20-year-old, a 30-year-old, a 40-year-old, a 50-year-old, you'll quickly start to realize that for 20s and 30s, it just hits differently than for somebody in their 40s or 50s. And where this played out in my life, as I told my wife, is, look, if we could save and invest 25 % of our gross income, when we get in our 40s, we'll be able to take our foot off the accelerator. and um and that's a choice at that point do you actually do it but you're at the actual point you can do it and in the question you then ask yourself is are we maximizing all the memories and things so i don't have regret when i'm in my 40s 50s and 60s and beyond and i'm happy to report i have zero regrets i mean i'm actually in the situation now where money just doesn't do as much and that's what i talk about when i think employees are worried about go sell the business or anything I'm like, well, what can money do?

59:09What can an extra dollar do for me today? It's just not the same thing as what a dollar could do for me at 20s or 30s. So I'm insulated from the money stuff. And it's a fabulous place to where you get to make decisions because of what you want to create or do in life with your family, with your friends, with the Money Guy show, with our audience. That's what I want you to be able to maximize that as well. because I think I've had so many financial mutants that write me that they're in their mid-40s and their family hates going on vacation with them because they're doing it so cheaply. I don't want you doing that, but I also don't want you living your fabulous 32-year-old life just because you got a big promotion and you're making now$150 ,000 to$200 ,000 a year, but yet If you looked at your investable assets, you haven't even reached one time your annual salary yet.

1:00:05You're too close to the starting line. So there's a balance here that we're trying to give you all the variables so that you can be the field general that navigates this well. But hopefully through those things, because if you lay the wealth multiplier and then look at the timeline of happiness and satisfaction by age, you'll quickly see that you you have a journey there that you can fill in and and and put the personal and personal finance but there's a path and that's what we've built it with the financial order of operations we built it with all the experience shares that i put in millionaire mission because i think you'll see that we have given you the guide that not only maximizes the math but man oh man am i a sentimental millionaire where i'm trying to make sure you get to learn through what we've experienced by helping so many other millionaires with their journeys of there is a better way to do money and we we've trying to climb the mountain and shout it out to as many people as possible because what's funny is we went to i always screw up the title because i always want to say press publish press publish public press publish so we went to that that that um that that meetup conference i don't know what you call those things where you get to meet up with other YouTubers.

1:01:19And it was funny as I never remember anybody's names, but there was some guy who was like an early YouTuber. Reby's going to be able to tell us who it is. And his whole presentation was, is how rich he got, how young he was and how he got there and realized how empty it all was. And, um, and he was basically like, turn around, go back. You got, there's more to life than this. And I think that that's what we have tried to spend a lot of time is helping you make sure you don't sleep sleep through the phase of maximizing and making the wealth building the wealth through compounding interest but also that you're not a miser so you get there and realize how empty it is if you haven't done the right work love that love it the youtuber was casey neistat i do feel like people might know that so since you said i should say it um that was fantastic i am i don't know who anybody is i didn't know who sir richard branson was if we did We did.

1:02:11We did. And by the way, he came to the table while I was in the bathroom, so I didn't get a picture. So it's okay. If you want to know, why doesn't Brian have a picture with Richard Branson? It's because I was in the bathroom. It's all right. That's the way it should be. I love that. Well, DeSanche, if you would like a Money Guy Tumblr, just email winner at moneyguy.com. Like Brian and Bo said, we are so excited because we are very soon going to be recording the exciting content that we are doing based off of the survey that you so generously took part in. We broke our records from last year. We have so much great data and I'm really, really excited.

1:02:50So first of all, be sure you're subscribed to the channel so you'll see when that episode comes out. And also if you took part in the survey, we'll be emailing you like a special note to let you know, hey, your data, like everything that you shared, your voice, it was used to shape this episode. So watch your inbox and subscribe to the channel and be excited because that episode is going to be great. Man, I felt like we had a good time today. I definitely had a good time. We have a lot of content to record even after this live stream ends, but we don't, I think, you know, amazing day. Cross 600 ,000.

1:03:24Almost to 700. I mean, we're about to record the Financial Mutant survey and you guys showed up in force with so much so that we're even going to include it in the title, likely. I mean, that's we're brainstorming this as we speak. Thank you. Thank you. We don't take this for granted. I mean, when people come and do studio tours and when we meet you out in public, hopefully you can tell from our expressions that this is my heart just beams with happiness because this is so far beyond what we ever imagined. The educator in me is just so tickled that Bo and I have created something and the rest of the content team.

1:04:01It's truly magical. And you guys are a big part of it. you are the heart of making that possible. So I thank you for that. So please take advantage of all the free stuff. We're trying to load you up on purpose. If you go to moneyguy.com slash resources, we'll love on you. Give a go tons of free stuff because we know if you do what we say and follow the lead of what we're trying to do, just the success will create complication. And that leads to the next part of our relationship. You get to take it to the next level. consider fulfilling the abundance cycle with continuing to work with us in the professional capacity where we get to now personally know you and turn the personal into personal finance.

1:04:39I'm your host, Brian, Mr. Bo Hanson, Money Guy team. Out.

1:04:43Brian Preston:The Money Guy show is hosted by Brian Presson 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 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. All investments involve a degree of risk, including the risk of loss.

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