Is $100K Enough Anymore? The Truth in 2025

22:43Brian Preston:I can't wait to see what's coming. We got through with our grueling recordings because they flew in. It's even worse for them because they flew in, immediately came here. And then so it was hours of recording, and then everybody just kind of parted their ways. And we said, you know, y 'all go on. And then Reby and Bo and myself got in the room like, we should have asked them to dinner and then i was like oh my gosh we did we probably should have asked them to dinner fortunately we then walked out of the building and they were on the street corner trying to figure out where they were gonna go so we did get to break bread and it was it was a great experience really was yeah it was super fun and the content that we made the videos that are coming out are gonna be really fun i'm really excited for y 'all to see them so watch for those our react video with graham comes out on monday so make sure you're subscribed to our channel so you know when that pops up and i don't think graham will mind me saying uh our episode of iced coffee hour with him is slated for sunday so just go subscribe there make sure you check out that too because that's a really fun conversation with you guys they did a great job and just it was fun seeing you get to have a bit more of a casual conversation it kind of you kind of talked about some things we always get to talk about on the show so it'll be really fun to see both of those really wonderful videos so thanks to graham and jack for coming out and recording with us it It was really fun.

23:56No, it was fun. It was one of those things that you look back and go, what do we get to do for a living? It's pretty daggone cool. This is a cool thing.

24:05Brian Preston:Yeah, it was a delight. So yeah, watch out for those fun videos. And I have to go backwards a little bit. Shelby, you get a Tumblr since we answered your question. Sorry, Shelby. Before Graham popped in the chat. That's okay. I just wanted to let her know. She can email winner at moneyguy.com if she wants a Tumblr. All right. Ready for another question? Yes, ma 'am. Lonzo has a question. It says, do you think a three to six month emergency fund is still sufficient with what seems to be a very competitive slash lacking job market and all the layoffs? It at least feels like more is needed now. What do you think?

24:45Brian Preston:Lonzo, it may very well be the case. One of the things that we say is we say that when you're in step four, Brown, will you hold that thing up for me? when you're in step four of the financial order of operations, you want to make sure you have a fully funded emergency fund. Well, one of the things you have to answer is what for me is a fully funded emergency fund? For some people, it might be three months of living expenses. For other people, it might be six months of living expenses, or even for people who are at or near financial independence, it may be 12 to 18 months of living expenses and readily available cash.

25:20Brian Preston:So if you're someone who works in a job that potentially is a high paying job that is very, very unique and specific to where if you were to lose your job, you would not be able to find equivalent employment in a short time period. It may be necessary for you to hold larger than six months of living expenses, depending on how many people you have, depending on you, depending on what your fixed expenses are, depending on how long realistically you think it would take for you to find employment. But I would also encourage you, if you are someone in one of those kinds of jobs where if something happened to your job went away and there was a chance you would not be able to get back to that job again, man, you better take savings so seriously after you build up that emergency fund.

26:08Brian Preston:We see this all the time with professional athletes. It's a really good example for us to conceptualize. Hey, I've got this job where I get to make all this money, but I might only make all this money for this very short period of time. and if this job goes away, I'm probably not going to be able to get another job making the same income. While you're in that position doing that, you want to make sure you are socking money away to prepare for whenever the end of that occupation does come. Lonzo, personal finance is personal, so you have to do your own personal triage of your situation. Another mitigator that Bo didn't mention was how many income streams or people are working in the house.

26:44If you have rental property income and you don't have much debt on the rental property, so it actually is offsetting some of your expenses, that's going to help. There's also, if you have a spouse that's working, that's going to help minimize this. But I'll play at the other side. Both throughout the example of a professional athlete. I have a number of my clients who work in the technology field. And the technology field is cruel when you get older. Because you make a great income, but then a lot of times you don't get to leave when you want to leave. I've dealt with a lot of executives and clients who the technology field kind of, you know, they part ways with you, even if it might be premature of when you're ready to part ways.

27:30So if you're feeling that pressure, Lonzo, because just by the way, it was implied with the way you wrote the question, you might be feeling that. Maybe you're in a sector that impacts where you live. I would rather have more than less because I've shared with you guys that a lot of my life story that has gone into millionaire mission and then gone into the financial order of operations is is that your gut can be very helpful in a lot of those in those situations is that you want to have your 3d glasses and the fact that have a plan it doesn't have to be that you're trying to leave a job or make a big life decision if you're starting to feel oh my goodness if I lost my job what does that mean?

28:10Actually put pen to paper, come up with a plan and look at this on the front end so you can adjust and react to what the plan is showing versus you having to react in the real time and having to make really hard decisions. So if you're feeling this pressure, do an actual plan to figure out, hey, what would happen if my income went away? And you can play this scenario when I talk about the 3D, that's the dream, that's the down to earth, that's the doo-doo, is what happened if I I lost my job and there are no jobs in where I live and I have to go move. And then I'm like, oh my gosh, if I have to move, that means we're going to have to sell the house.

28:46We're going to have to relook at the kids. The kids might even have to go to private school or they're going to have to find or the houses are going to be more expensive in this area or do the plan so that you can not react in real time that you'll actually be like, oh, I've been here. I've seen this. I know what I need to do and I'll be prepared for it. Love it.

29:04Brian Preston:That's great. Lonzo, thank you for being here and asking the question. Just email winner at moneyguy.com if you would like to cash in on your free MoneyGuy Tumblr.

29:36Brian Preston:connecting brands with the moments and fandoms that matter most. Learn more at Accenture.com slash Spotify. This episode is brought to you by Google Chrome. You think you know a browser, but Gemini and Chrome, that's new. It can help you with practically anything on the web, like restoring a vintage motorcycle from a 50-page restoration block, or finally break down that long article you've had open for weeks. Gemini and Chrome is here for it. Ready to make anything online make sense? There's no place like Chrome. Check responses set up required compatibility and availability varies 18 plus cam has a question next and he says he's a uga financial planning grad so i'm guessing you're gonna say he says number four pre-season by the way look at that look at that good update i think this year's gonna be our year i'm not i'm not willing to say that i think every year is gonna be our year let's be honest just stay off the i would i would prefer to be more like a Tennessee number 17 preseason because I just get nervous when they put us in so high up.

30:39Brian Preston:I just love that he just threw so much shade on Tennessee right there. He really did. I like that. He's kind of pleased with himself too. Believe me, there's so many Tennessee people around here with their sunflower orange or whatever that flower thing that they base it off of. So much animosity. I can think of another color that orange is. All right. Well, let's go back to Cam's question. He says, when folks retire early, what account do they withdraw from? Are they withdrawing their contributions from tax advantage accounts or are they withdrawing from an individual investment account? Bo, I'd love for you to kind of answer this, but I do think, because I've seen some of these fire posts out there, and it kind of makes me chuckle when there's strategies where people are saying, go yank out your contributions from your Roth as a bridge account.

31:31Because, you know, when you first retire, and I'm always like, I mean, I can understand on paper why that seems so cool, because it is a nice little escape hatch that you can pull tax-free, penalty-free, your contributions to Roth. But we don't actually see that typically happen in our practice because, man, oh, man, do people love their Roth accounts.

31:50Brian Preston:Yeah, I'll give you sort of the general advice. When you're building your army of dollar bills, generally you start with your Roth money. That's what most people build up first. And then you have your pre-tax money. And then you get into step seven, hyperaccumulation. You build your after-tax money. So that's how you, like, fill the bucket up. Well, then when you go to unfill the bucket, if you were just going to do this like as like generically as possible, you'd probably pull from the after-tax assets first, and then you'd pull from the pre-tax. The very last ones you'd pull from would be the Roth.

32:23Brian Preston:That's the theory that you would operate in. But the answer to your question about which bucket do retirees, whether the earlier traditional retirees pull from, the answer is it depends. It depends on a number of different factors based on their unique situation. So does early retirement for you mean age 55? Well, if so, now all of a sudden, if you had an employer-sponsored plan that you were participating in in the year that you turned 55, those are now all on the table. And then you have your after-tax assets. Yeah, you have your Roth. If you're retiring at 60, which technically is still early retirement relative to a full retirement age of 65, now you have access to all of those.

33:03Brian Preston:If you're retiring at 50, okay, well, now you got to get kind of creative in how you think through which buckets to pull from. And there's not like a clean answer like this is the way you do it. But we did do a show. Oh, my goodness. I forgot the name of it again. I called this out two weeks ago, the name of the show, the strategies if you're going to retire early. Three ways? Three ways to retire early that you may not know about. And we actually walk through, hey, here's some different ways. When you think about decumulation, here's some options that you might have at your disposal if specifically you want to be part of the fire, fine, or retire early movement.

33:42I think it's interesting. Roz, you're talking to a reformed CPA, meaning that I come from a public accounting background. So when I hear questions like this, I'm like, is this person a CPA? Because there's FIFO, first in, first out. That's where if you were trying to pull your Roth, since Bo's already shared, Roth is usually the first accounts people are filling up. Would that be your first? That would be the FIFO method. And then the more traditional of kind of what I was talking about is when you treat your Roth as a prized child or your precious, that would be the LIFO, last in, first out, meaning that since the Roth is the first one to go in, so you do the after tax would probably be your last in, so that would be the first out.

34:21That's, I think, better advice than the FIFO method, But the reality is, and this is what you'll quickly realize, we work with hundreds, soon to be thousands of people on helping them out with their personal finances, that personal finance is definitely personal. We don't give just bolt on one size fits all. It has to be very customized to what do you look like. Your account structure is going to be different depending upon what you were able to do from a tax advantage, what your income was at the time.

34:56Brian Preston:How about what sources of income you have in retirement? I was about to say you're a snowflake, but it's more like fingerprints. We're all different. We're all unique, and we try to reach you where you are and give you the best advice. And that's why we leave the lights on for you, and that's why we talk about you can try to keep your financial life as simple as possible. but the reality is success creates complication and that's why the abundance cycle does have a graduation point that we'll be waiting for you to help out with like brian said abound wealth leaves the light on for you if you're curious about that moneyguy.com there's a become a client button right there you can go click on it and check it out maybe even fill out a form if you think you are ready to talk about becoming a client but you also get the free stuff well yeah i always talk about the free stuff i thought i'd give abound a little love brian you know that's me That's the anti-sales meme.

35:46I'm like, oh gosh, we really just went hard. Maybe I ought to give him some free stuff to offset it. And that's what makes this show great.

35:51Brian Preston:Counterweight it. It's amazing. Did you give Cam his thing? No, Cam, you get a Tumblr. There we go. Speaking of free stuff, winner at moneyguy.com to get that free Tumblr, Cam. Can I throw a thing out there? Yes. This would be a really interesting, I don't know if this is a, I doubt this is a poll for the audience, but I'm going to throw it out there just in case it is. But you know, we do this, we do our wealth survey, right? We're asked these questions. I would be so curious next time we have a wealth survey come out or next time we can add this in there. Are you going to add a question when it's probably too late to add a question?

36:20Brian Preston:Well, I said the next time. Three of these are going to kill you. I didn't say when it was happening. I just said next time. I'm spitballing here. I'm getting an idea. I'd be curious to know for folks who are retired or are financially independent, are they pulling out of their Roth? We have this idea. Anecdotally, we know what our clients are doing. We know what our clients are doing. Pulling from those Roth dollars. We just don't like to do that. But I'd be curious, are there other folks like, oh, no, no, no, I'm totally doing this. I'm living off my Roth. That's a great point because maybe this is a perception of your – we all have our own biases built into things.

36:49Brian Preston:I'd love to pull the chat, but I don't know if – I think a lot of the chat is likely accumulators. They're probably not decumulators yet. Right. I wonder how many retirees we could reach and ask. It's just an interesting thing. We literally have just the best crop of audience in all of the Internet. We ought to ask them these kind of questions. Things that make you go, hmm. Hmm, maybe we will. That's all I'm going to say. Okay. Rob has a question for you guys next. How do all of the Money Guy rules work together? We say 25 % savings rate, 25 % on housing, 25 % on taxes, 8 % to my vehicle, with 17 % left.

37:32Brian Preston:How is this enough for bills and lifestyle? Bo, I want you to give color, but I think we have to be careful here because he says rules. Some of these are just assumptions. Yep. There's a difference between rules and assumptions because we do rules to try to give you some boundaries or things to protect yourself from. And real quick, before you respond, I do want to give the context. He says, I'm 25 making 75K. So that might help you answer. That's pretty fantastic for 25 years of age. But like 25 % to taxes? That's not happening. That's an assumption. Sometimes when we do our analysis, we'll try to put in conservative assumptions so you can figure out, hey, what is going to happen, what might not happen, but that's not actually a rule.

38:15Hopefully, your taxes are going to be a good bit lower than 25%.

38:18Brian Preston:Yeah, I was going to say, if you even just went and looked at your tax return based on that income, not knowing if you're married and have a household income or anything, but just based on that income, you're not actually paying 25 % in taxes. We work in a progressive tax system where even if your marginal rate is 22 or 24, when you actually add up the total tax that you pay, it's some number less than that. It's going to be, you know, has to kind of like work through the brackets. What's really interesting is like, how do all the numbers work together? Oftentimes they don't all work at the same time.

38:50Brian Preston:And that's what's beautiful about them. Like our expectation is not that, Hey, when you start out, you're going to have 8 % going towards an autumn payment, or you may for a season. And that season is no longer than 36 months, that may be a thing that's happening, or you may be at the place where you're spending 25 % on housing. But what we hope is those numbers aren't finite and stuck. They'll move through time. A lot of people don't get to start at a 25 % savings right out of the gate, but we want them to grow to that. When it comes to housing, we want you to buy a home if that's in your plan.

39:28Brian Preston:And maybe it gets close to 25 % of your gross income when you buy it, but hopefully as your career advances and as your income increases, the proportion of your income that that represents gets smaller and smaller and smaller. We have a great piece of content coming out. If you're not subscribed, make sure you subscribe right now to the channel where we're actually going to walk through financial planning strategies by income. Hey, if you've got a$40 ,000 income, what are the strategies you ought to be thinking about? If you've got 80, if you're 150, if you're 300, what are the things you ought to be thinking about?

40:01Brian Preston:How do you build wealth at those different income stratas? So make sure you subscribe for when that episode comes out. Yeah. And that's why I love a good system. That's what the financial order of operations is trying to do is reach you where you are. A lot of you guys, we're going to assume, especially when you're going through your first five steps here, is that your income is just not through the stratosphere yet. It might very much be an aspirational thing. You're right out in your first big job that's hopefully a career, not just a job. So it's going to be different than if you're somebody who's like me, who's, you know, in beyond 45, you know, in those peak earning years, it's going to be completely different.

40:42I'm going to, my group is going to be further down into the seven through nine on the financial order of operations, but that's the brilliance and the awesomeness of the FU is that it hits you. It's an all-terrain vehicle wherever you are in the journey and you will graduate through these things as you reach more and more success. But I think it's important to understand when you start out, we're trying to give you boundaries so that you don't fall into the consumption traps that the society tries to put on you, that social media tries to put on you. But then we also, as we get to step seven, eight, nine, we're trying to unleash you to live your best life, but also not feel exactly what Bo was sharing.

41:21I don't want you to, if you're seven figures and you have a car payment, what are we doing. If you are also seven figures and beyond step seven, eight, nine, and you look and you say, hey, my housing is only, you know, 16%. The guy said I can do 25%. Let's go buy the McMansion now. That doesn't make sense either because it doesn't reflect who you are, the why. We want you to understand that there's an analytical part of the money-making decision process, but there's also a very qualified or non-quantifiable side of money that's behavior, that's all the things to make sure you're living your best life.

42:00And we try to give you a balance on that. But I do think it's interesting because I've been thinking about, we've had some content go out where people go, man, you went hard on Dave. And I've been internalizing, what is the difference between Dave's system and the baby steps and then the financial order of operations is, I think Dave, without a doubt, has created an awesome system, but it's trapped for people who make less than$100 ,000. And that's just the reality. And I think that's why he teetotals on miss out on the 401k match and other things if you have any debt and all these things. And I think that sometimes we are just as guilty that we assume everybody has the potential to go beyond $100 ,000.

42:43And I think that that's why the world can exist for both of us, is you have to ask yourself and I'm willing to concede the ground that Dave is probably that 75 % of Americans that are never going to exceed the a hundred thousand dollars who are going to be trapped in all the consumption traps of the world. And then here we are more analytical and trying to help you maximize. It's true. Our bubble is probably smaller and I'm willing to concede that ground, but I think that's why it's important to, to, to be honest and transparent and say, I think we've created a better mousetrap, but you have to get yourself in a position to where you ask yourself, am I going to be better than most, you know, where I'm going to be able to have an income that's going to exceed this.

43:27Then I think the money guys have me covered on that. But if you know, you're going to be stuck on this, this, this treadmill of you better maximize every dollar that comes into your household because your income is probably never going to exceed that 80 to a hundred thousand dollars that's a thing too and and and i just like being transparent as i'm thinking through different systems and why does one work here and why does another one work here and i think a lot of my financial mutants in the audience we like there it is that's the key that unlocks the difference why these guys can be so respectful of each other but be completely different also is because we're speaking to different stages of your your income and success life love it well great

44:10Brian Preston:Rob I really appreciate the question And that you are here today And we would love to send you a money guy tumblr Just email winner at moneyguy.com SL Martinez Says my family started A 529 for me at a young age And it's grown to be Over 200k This is crazy What options are out there To efficiently draw down I'm 30 years old and my college was paid for by the military. Oh, isn't that wild? So what, this is just an interesting 529 type of question. What do you think? I want to know what you're going to say, honestly. Well, so a lot of times we get this question, hey, I've overfunded a 529. What are some options where I can begin to use those?

45:00Brian Preston:And again, SL, not knowing your unique circumstances, some of the general advice we give is one of the things that people don't realize is that when you have 529 assets, you can actually change the beneficiary. So if you have siblings and you saved a lot for the oldest sibling and the oldest sibling ends up not using all those dollars, you can then roll some of those funds to the next sibling and to the next sibling and so on. And so inside of your direct lineal family, you can change the beneficiary. So if you have younger siblings, perhaps who might need higher education expenses, your 529 assets could go there but i'm guessing if mom and dad saved up 200 grand for you and yanvi sims they probably save for them also well also the lineage can also be your children i mean so that's that's kind of exciting to think about because now at 30 years of age there's a chance that you're starting to think about kids but here's here's some good news now look 200 000 that's a that's a big matzo ball that's a big one um might have if i was your parents financial advisor at some point we might have had a conversation and be like, hey, we sure we want all this money going to 529s?

46:05You know, because there is, we run a lot of college planning stuff and we say we want to make sure we save for these goals, but we also don't want to overfund because how helpful would it have been to if your parents are that prolific with savers is if we could have been building up some custodial accounts in the background or, you know, even some custodial Roth IRAs and other things when you first started working, there would have been some things, but let's take you where you are right now. The good news is most improved for how to get money out of an overfunded account is probably 529s because now this is, I'm saying this more for our audience than you, because I get a feeling you didn't come out of school with any student loans since the military was involved.

46:47Um, but student, a portion of 529s can now be used to pay down student loan debt. Um, a portion of 529s can also be used to fund your Roth IRAs. I'm trying to think of, and then never forget that you can always cash a 520. I don't do all the other things first, but go through and try to figure out, because I hate paying taxes. I pay a lot of taxes. I want everybody to pay the government what you legally are obligated to, but I think the government does encourage you to be mindful and minimize your taxes as much as legally allowed is. But once you figure out, hey, there's no way that I've thought about my kids, I've thought about other things.

47:25You do get access to that money. You're just going to pay taxes and then a slight penalty on any of the earnings on that. And that's why some of you who are actually, if you're way overfunded and you get scholarships or you get offset money, a lot of you can then get access. I'm saying this for other people in the audience who are still in school and maybe realizing, man, we got way too much in 529. you can actually avoid the penalty if you could show that hey this money was offset with scholarships or other things you'd still have to pay the income taxes but that's why while you're in the moment of paying for education you've got and Bo's seen me do this but I have a daughter who's a senior in college right now I've been really trying to land the plane to make sure that we burned through the 529s and took advantage of everything because I knew that once the once she walked on the campus of college, the clock was ticking to make sure I understood this beautiful tool of 529s.

48:25We're on the clock now to make sure that we look at every year and maximize the opportunities on how we're funding college, but also closing out by the time they leave education to where this account is not so overfunded that we have to make decisions that cause us to pay taxes.

48:44Brian Preston:Man,$200 ,000 in a 529 left over after college? that's a lot that's big and thank you for your service that's pretty cool that's what by the way we have um we have cases when we've done making a millionaire we have seen people have huge incomes and then you find out that because they structured where they were going to work they worked at a hospital that was tied in with the the forgiveness on six-figure loans because they structured where they worked, that it forgave the loans, plus they still, you would think that, hey, if I did this, I'm probably not going to make any money until I get through that period of paying off the student loans.

49:26Because if they're going to write off six figures worth of student loans, I bet they're cutting my pay a lot. No, they pay good too. So guys, be creative on how you pay for college. I love hearing people going, militaries away, working off the student loans with structure. That's not even part of this question, but it's just this is why you need to be so purposeful with education and funding.

49:48Brian Preston:SL Martinez, thank you for the question. Just email winner at money guy dot com and we would love to send you a Tumblr as a thank you. KO is up next. It says I'm a 23, 23 years old, graduated and working now and saving 72 percent of my income. Living at home? I'm wondering. Let's hear the rest of the question. A lot of roommates. It might be in that fun time of life that you just, you know, if you can open a door and fit a bed in there, that's where people are. Bed? Who needs a bed at 23? I mean, I've slept in a closet in the early part of my life. In college. I want to hear more about that later.

50:24Brian Preston:Okay. The rest of the question says, I started investing weekly three months ago in a low-cost index fund and an inflation bond and increasing my emergency fund. Any advice? So this sounds like an eager financial mutant in the making just starting out. What do you think about his savings rate, his newfound investing, and beyond? Well, the first thing I heard is that, hey, I'm investing, but I'm still building my emergency fund. And that tells me just right off the bat, you've gone slightly afoul of the financial order of operations. Brian, will you hold the thing up? We believe that one of the things, especially early on, that you want to do is you just want to make sure you cover your risks.

51:06Brian Preston:Think about the financial planning pyramid, right? Like kind of goes like this at the bottom is like risk management and the biggest risk to a 23 year old likely is, man, what happens if my son has my job or what if I have a, like a big expense, like a car thing or a house thing or a medical thing or whatever. You just want to make sure that you have that emergency fund fully funded. So if you're still trying to build that up, I would believe that with a 72 % savings rate, you could get that thing fully funded pretty quickly. So I'd love to see you do that, chisel that off, have it compartmentalized and put it to the side.

51:40Brian Preston:Now, outside of that, I love that you're putting your money to work for you. I love that you're buying. I mean, weekly is a little aggressive. I don't know very many people that are that, you know. I wasn't doing it at 23. I do it now because I'm sick, but it definitely wasn't doing it at 23. But I love the fact that you're always buying. You're doing dollar cost averaging. But I love part of what you're doing is low cost index funds. But then I heard about this inflation protected bond. And the question that came to my mind was, man, okay, what's the strategy there? Like for dollar cost averaging, one, at 23, why are you buying inflation protected bonds?

52:17Brian Preston:Why is that part of your dollar cost averaging strategy? And is that the thing that you ought to be doing? Or might there be an easier solution for you? So you don't have to focus on what I'm buying. You get more to focus on how much am I saving, how much am I putting away. Yeah, I mean, there's so much to unpack here. First of all, Keo, well done. I mean, to be making that a good income and then able to save 72 % right out of the gates, that's pretty fantastic. And your future self is going to have just sloppy tears of happiness in the future and give you a big bear hug for making those decisions now.

52:55So I'm going to tell you, I'm all about stack it up early and often because if you went to moneyguy.com slash resources and played around with our wealth multiplier tool, you can see how valuable because you are a billionaire of time and you're actually exploiting that huge opportunity right now, whereas a lot of your peers, they don't realize how valuable or how rich they are of time, which is the actual most valuable resource when it comes to compounding growth and building. Now, the part about how you... I lost my train of thought.

53:30Brian Preston:The part about what you're investing in. He's doing the weekly dollar cost averaging. The easy answer I see in all the forums is VTI, VU. VTI is the total market index. VU is the S &P 500. Most young people, and this is where KO is a little different, most young people are like, I don't want any bonds. But then you find out that KO has some inflation protected bonds. You're like, well, that seems out in left field. I think for people who don't feel comfortable making investment decisions, and we take some flack on this because yes, they might have a little bit of bonds, but KO is already out there purposefully buying bonds on his own.

54:05I like the index target retirement funds because these things let you really only answer two questions. They say, hey, how much can I save and when do I need it? And then it does the rest. If you're trying to figure out, hey, how aggressive do I need to be now versus 10 years from now, 15, 20 years, it does all that for you. It has what's called a glide path where it will start off super aggressive while you're young and then get more and more conservative. For all the people out there who don't like target retirement funds, I hear you on the internal expenses for a lot of them, but that's why we use the index versions.

54:38When I tell you to go do your research and your due diligence, go check out the low-cost providers like Vanguard, Fidelity, Charles Schwab. every one of these glide path their glide paths might look a little different if you think one is more conservative than the other go chat find the one that's more aggressive and matches what your goal is you don't have to be a passive person on this but then i would challenge you go look at the internal expense ratios the cost for those indexed versions of you know with those three big providers and you're like holy cow these things are cheap all these people in the comment section are talking about how they don't like in that you know target retirement funds because of their costs.

55:15They're obviously not talking about the relatives that are the index versions of these things. And that's why we've tried to think this through for you so you can focus on maximizing your life and living your great, big, beautiful tomorrow.

55:28Brian Preston:Now, one just little small thing I'm going to add here, SL. You said, hey, I'm investing in index funds and I'm buying this stuff. I hope, because you said I'm 23, graduated working, I'm hoping that you're using the financial order of operations. Brian, will you hold that thing up? And when you're talking about this investing that you're doing, I hope it's happening inside of a Roth IRA or inside of a Roth 401k if your income substantiates that. Because at 23, with that kind of savings rate building up assets, the future looks super, super bright. So you might as well make it a tax-free bright future.

56:00I don't want to mess up KOs. You're going to tell him he gets a free Tumblr.

56:03Brian Preston:He does, yes. Winner at moneyguy.com. KO, just email us. I don't want people to think that I've lost my mind. during the middle of that question, did it feel like, was it an earthquake or somebody working on the building? I mean, because this is a big building. What are you talking about? You felt it. None of us felt anything. Now you're just being mean. I saw Reby's face. She felt the same thing. What is that? I think they're working on the HVAC. Is it the unit right above us? I think so. Yeah, that's what it felt like. It was a little tremor. I was like, whoa, that was a movement. Are they coming down to sit with us in a minute?

56:42Underneath this thing. Let's hope not. All the preservation questions started being asked. Hopefully that didn't show up in the audio.

56:49Brian Preston:Oh, man. Probably just on our faces, facial expressions. All right. Free present man. You're curious. They're still up there. Do you think we could have convinced him? Oh, no, there's nothing going on? No. We don't hear anything. I saw Reby's face. There's no way. Because Reby was like. Dead giveaway. way you know it's almost like i wish that we had somebody who might be on the front lines of knowing what's going on with this building and who could tell the content team hey they're working on the roof while we're recording this be nice if someone yeah new people over there sitting there that's on you guys you're the one that wears the chain with all the keys on it super super did you know that they're gonna be here no i don't know i just you know just come fix the stuff he's a great delegator Everything's fine.

57:31Everything's fine. So did you really not know they were up there? No, I haven't known they've been up here the last 10 times. Never mind. I won't pick on the super super then.

57:37Brian Preston:Listen, as long as, hey, I like having AC. I know that the air conditioning's working in here, and that's what I really care about. I'm okay with it. Nothing fell through the ceiling. We're good. All good. Did you give KO a Tumblr? I did. Awesome. So we're going to move on to Freerunner19. He's also going to get a Tumblr. His question says, what advice do you have for aspiring financial advisors? I want to work for a fiduciary practice, but I hear they are hard to find. So maybe you should speak to what fiduciary means and if it will be hard for Free Runner 19 to find. Yeah, so I'll talk a little bit about what fiduciary is.

58:12And then, Brian, why don't you talk about how to get an industry and things you ought to do?

58:16Brian Preston:Because not all financial advisors are created equal. We like the ones who take a fiduciary oath and fall on the fiduciary side of the equation, which means they are required by law to put their client's interests ahead of their own, meaning if a conflict of interest arises, they have to choose and do what's best for the client, not what's best for them. That's not the way the entire financial industry is structured or written. Some advisors don't have to operate under a fiduciary standard. 88%. Rather, they get to operate under a suitability standard. Say, hey, as long as I provide advice that's not negligent.

58:55Brian Preston:So long as it's suitable for the client, it doesn't necessarily have to be what's best for them and what's in their best interest. Again, I'm not throwing shade at the folks who work under that side. I'll throw in a little, you know, candy bars are suitable. A nutritionist is going to give you optimal. You know, that's the thing. You can consume a candy bar. Yes, it's suitable for human consumption, but should you? Probably not. But that's the difference between these standards when people don't know. So suitability versus fiduciary, you have to put the client ahead of your own interest. Okay, continue.

59:27Brian Preston:So one of the problems is that there are many more advisors and advisory firms out there that do not operate under the fiduciary standard than those that do operate under the fiduciary standard. So they're not the easiest things in the world to find. Well, we're still, now I'm happy to report because when I go, it's been a few years since I've talked to some of the capstone classes. but I think when I was doing those presentations years ago, it was like 5 % or 4 % or 5 % of advisors were fiduciary fee only. It does make me happy that I think it's exceeded 10 % now. So I think that this is a movement that is slowly but surely growing because I think people kind of expect it.

1:00:07I'd like to work with an advisor that when I make money, they're making money and things are aligned in those aspects. So if you want to be a financial advisor, um here's some let me tell you some don'ts first is that be careful because it's easy to call yourself a financial advisors and there's lots of firms that are structured to let you get in the door as fast and as easy as possible and you're gonna start dialing for dollars and what i mean by dialing for dollars they're gonna immediately ask you hey write down a hundred people you know that you can set a meeting that you can set up a meeting that could benefit from what we have to offer here.

1:00:45I would give you a big word of caution on that. Look, when you start doing anything, and this is financial planning, I come from an accounting, public accounting background, and I like how CPAs require this apprenticeship, essentially. And in financial planning, if you think about the CFP designation, it is supposed to have an apprenticeship portion, because you have to have years of service, plus pass an exam to show that you have the ability to do this. And why is there that runway period so important is because when you're green, you don't know what you just don't know. So if you go and start burning through your relationships of all your Sunday school teachers, your relatives, your friends, your families, they all love you.

1:01:27So they want to see you be successful. So they're going to that power, that consideration of love is going to overpower and have them consider working with you, even though you might be so green that the advice is just not that great or the products are just not that great but they love you so they're going to do it and here's where the sad cruel part of this is is that these industries are set up to have you dial for dollars capture a certain portion because they love you and then you wash out because it's not sustainable after you make it through your friends and family um you know that's not really a first list of 100 is easy the second

1:02:04Brian Preston:I mean, it's just hard. Plus, it kills the soul calling all these people asking for stuff. I don't know that it's a hard thing. But you wash out. The firm keeps your friends and family, and it's just built into the business model. So I would encourage you, here's the big don't. If you are aspirationally trying to do this, don't start dialing for dollars on your friends and family until you're at least an expert. I mean, you owe it to them because down the road, there's nothing wrong with your parents or your in-laws becoming a client after you're actually an expert on what you're doing. Don't burn those bridges because you might not get another.

1:02:46Now, you probably get to keep the in-laws and the parents that you can burn them once. They're probably still going to do it because they see you at Thanksgiving. but all those like your Sunday school teachers growing up, you know, a coach from, you know, a sports team that really took a shine to you. Probably not going to get to burn and get those again. If you burn them once, they're not coming back. So that's why I always tell people don't get out there and start selling. I know it's sexy because they get you. They're like, Hey, do you want to be a rock star? And you can make six figures in the first six months.

1:03:14If you just go sell this product, this many people, you're like, Oh, I can totally do this. That is a road to nowhere. you need to think more like a long-term thinker is that you're going to get good at this. You're going to build expertise, build up your credentials, your experience. So then as you start managing money, it is coming from a place of knowledge and wisdom, and it will be a win-win, just like the fiduciary model is instead of out there selling everything. I would tell you, you probably go on websites like was it napha um is it still what's um alan and kitsis they've got uh xy planning xy planning network um i'm trying to think of anybody else that i miss i'm trying to think of all the fiduciary organizations that you can go to conferences you can co-try to be in the orbit of these people so you can find out what what firms are in your area and start be proactive Go out, reach out to them.

1:04:15And then, by the way, what we tell people, we get a lot of people aspirational. We're always hiring, by the way. If you go look, matter of fact, in the studio right now, we have four new employees. We're not going to embarrass them, but we don't put a camera over there, fortunately for them. But we always, when people reach out, and a lot of them, I think all of them, I'll just say it, all of them, I'm very sure I'm on solid ground here. We're money guy listeners just like you. When they reach out and say, what do I need to do? We're like, hey, are you eligible to sit for the CFP? And then for a lot of career changers, we say, have you passed the CFP?

1:04:47So go do your research on, hey, how do I go take the curriculum to become eligible to sit for the certified financial planner exam? But what I like about that path, too, is that it lets you really try on all the subject matter. You get to go through it all. You don't have to quit your day job to do that. I mean, and that's a dip your toe in to figure out, is this something I really want to do? or is this something that maybe I need to make sure that I love it before I jump headfirst into it?

1:05:15Brian Preston:Love that. That's great stuff. Free Runner 19, thank you for being here, and I hope that helps you think through that. Email winner at moneyguy.com to get your free Tumblr. And you know what I've really loved? I have loved seeing how much the financial mutants are enjoying our compound interest calculator. Oh, yeah. I really mean that because that's one of our newest free resources, and we get to see how many people go to that page and how many submissions we've gotten. And it's amazing to see just how popular it's been since it's been released. And so that warms my heart. And I just wanted to thank you guys for checking it out.

1:05:50Brian Preston:But also give it a plug because people are really enjoying it. And if you have not used it or maybe even have more questions about what your money can turn into through the power of compound interest, go to moneyguy.com slash resources. It'll be right there at the top of the page along with all of our other free tools and free downloads. So go check that out. I think you just highlight the key point is this is this thing's living and breathing. If you haven't been to the money guy slash resources in a long time, go out there because we're always adding hubs. We're always adding tools. We're always adding new things to try to really keep people motivated.

1:06:23I know a lot of you know, a lot of this is because we know so many people are coming into our content every month. But even our longtime listeners and our people who've been part of the family for a while, don't get complacent on that. That's why also, if you haven't signed up to get on, that's one of the reasons we asked for your email address is because we sent out a weekly newsletter. We try not to harass or bother our audience. We actually don't harass at all. Not even try not.

1:06:49Brian Preston:We don't harass. So, I mean, we really try to be very mindful. It's more or less, I want your email address. I know who you are. I think I've shared with you guys, I started creating content in 2006 with the podcast originally. and I was such a knucklehead because I didn't ask for email addresses for, I mean, it might have been a decade. I mean, it really, I think about what a knucklehead I was is because with all the different platforms, all the people have come through. I just want to know who you are. So we're actually family at that point. So I, so we can stay in contact because you never know if platforms go come out of favor or if your, your contents maybe not going to be allowed here, there, so forth.

1:07:27I like knowing who you are so we can actually take this thing a little deeper and reach you where you are and hopefully give you a little nudge from time to time is that there's things that you could be doing a little bit better without being annoying. That's the goal. And that's why I think it ties in, Bo, Reby. There's a better way to do money, and we're always trying to help you become the best version of yourself, to call yourself a financial mutant. I'm your host, Brian, Mr. Bo, Reby, the rest of the content team. Money Got Team, out.

1:07:56Brian 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 the securities laws and regulations. Abound Wealth Management does not render or offer to render personalized investment or tax advice through The Money Guy Show. The information provided is for informational purposes only, may not be suitable for all investors, and does not constitute financial, tax, investment, or legal advice.

1:08:26Brian Preston:All investments involve a degree of risk, including the risk of loss.

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