The Playbook to Build Wealth With An Average Income

19:49Brian Preston:Boom. You see how definitive that yes was? Yes. Okay, let me ask this question. Bo, does your wife like it when you have a stache? I do like it better when he has a beard and a mustache. Does your wife really? Yes. If she was here, I could ask him. Yeah, we'll call her. Let's call her live right now. Tim, get the phone out. Let's call her. We're more likely to get a kid to answer that. That's right. All right. Stoney 13 has a question. Speaking of, is there a kid? I was going to say, is that my son? Don't think he has a YouTube channel. Okay. Hey, money guys. I'm 26 with 60K per year and I'm saving 25%.

20:21Let's go. I'm swapping jobs soon and was curious how important it is to find a job with an insurance plan that offers a high yield an HSA, not a high yield savings account, health savings account if I am already saving 25 %? What do you think? We know you love the HSA.

20:39Brian Preston:Benefits in my opinion are toppings not the main course. Exactly. I was thinking whipped cream and cherries. That's it, man. These are the cherries and the whipped cream and the sprinkles. These are not the brownie. Because what you want to do is when you're going to find a job well like the brownie's at the bottom and you put the ice cream on it and you put whipped cream on that. We had lunch at the Tussum, or had dinner at the Tussum Emporium down there in Orlando. Unbelievable. I cannot recommend the desserts enough. I'm getting sidetracked, but it's a huge Sunday. Anyways, benefits are the accoutrement.

21:15Brian Preston:They are the sprinkles and that sort of thing. They're not the main thing you want to look for when it comes to a job. When it looks to a job, you want to look for where somewhere where I fit in culturally, where somewhere where my skill set will be valued, where somewhere that I have career trajectory, opportunity, vertical movement, those sort of things. And then once you narrow it down to a number of different jobs or positions or things that satisfy those, well, then you can start comparing the benefits. But I would never let the health insurance or the health insurance plan dictate the job that I took, because I think that you're focusing on the wrong thing.

21:48Brian Preston:If you're doing that, you're kind of majoring in the minors. And I think that there's a chance you can end up in a bad spot focusing on it. Yeah, I mean, if you've got two great opportunities, of course you're going to get to the point where you go through the big long-term impacts of this position. But then when you're trying to have a coin toss moment, yeah, then benefits have a place. But don't let that be the driving factor. Because we always say don't let the tax tail wag the dog. It's the same thing with we love health savings accounts, but it is not the driver of your financial success.

22:22you need to be thinking because investing yourself is one of the best things you can do.

22:26Brian Preston:And two other things. Don't assume because a company doesn't have a high-deductible HSA option that the health insurance benefits are bad. And don't assume that if they do have a high-deductible option with an HSA, that that's the one you should choose. Oftentimes, we steer clients and direct them, don't pick the high-deductible plan. Don't take the one with HSA because the other options might make more sense for you. They're more highly subsidized. They have lower deductibles. There's better benefits. It's a better fit for your family. So don't just assume because we love HSAs. That's always the default answer.

22:58Brian Preston:It's an option and something that you should investigate. But it's not just if it's there, I'm going to do it.

23:08Brian Preston:No, you're good. You know what? You know, actually, I just got stuck on. I was sitting here trying to think of a poll we could ask our audience on. But I was like, they're both good looking men. So I was trying to figure out what the cut was. because Magnum P.I. and Burt Reynolds, they are... Who is Bo? But then I was like, no, I need to find a nerdy mustache person. Ned Flanders. Is Bo more... I was trying to figure this whole thing out. I thought this was going to be HSA related and it was still mustache. I was already... How do I yell at this guy about mustaches? Before we move on completely, Stoney13, if you would like a Money Guy Tumblr, just email winner at moneyguy.com.

23:49Brian Preston:That's hilarious. Next question. Do you think we're in the fourth quarter of mustaches at least? Give me some rays of hope. I think we're in the renaissance, the rejuvenation of them. No, but there's a season. Look, you can ask Magnum P.I., Tom Selleck. He was like, man, when that stache went out of style, he's like, oh, man, it's a shame that that went out of style. But did he get rid of it? I don't think he did, did he? I don't think. You know what I mean? I don't know for sure, but I've only seen him with a mustache, I think. Interesting. Interesting. I'm sorry. I'll bring one. Maybe I forgot.

24:23I took off the gold chain. Let's bring this thing back. Reel it back in, Brian. Reel it back in. Next question is from Quilt Audit. It says, morning, I'm meeting with someone in my church to talk about finances with her, specifically to help her budget better. What would be the best place to start? What kind of doc should she prepare? What should she bring to this meeting? I was just curious. If you were going to sit down and somebody said, hey, I want help with my personal finances. Where would you start? You go to moneyguy.com slash resources, and it's an all-terrain, all-weather vehicle to tell you what to do with your next dollar.

24:58We've got you covered with the financial order of operations. What would you add to that?

25:03Brian Preston:Yeah, yeah. So I would say if I was going to sit down with someone from church and I was going to help them out, the starting point that I would want, I'd ask them to prepare a net worth statement. I want to know, hey, a list of all the things that you own and all the stuff that you owe, right? We have a great template. You can go to moneyguy.com slash resource. her so you can download a free one. You can actually email it to her, text it to her. She can then fill it out. Well, what you're going to uncover when she lists out all the things that she owns and all the things that she owes, you're going to see the types of investment account she has access to, the types of retirement plans she has access to.

25:32Brian Preston:You're also going to see the debts that she has. So that's like step number one. I want to know sort of like starting point. Step number two, I would then say, hey, bring me your last month of credit card statements or bank transactions or wherever, however you spend money. I want to see where your spending's going. Or maybe you tell her, hey, do a little bit of work. Let's go download a free app. There's a ton out there. You can use Monarch Money. You can use YNAB. You can use any of these. And just start tracking where your dollars are going. And then let's look at it after a month, after you've done it.

26:03Brian Preston:Because what I want to see is, man, holy cow, you realize that you have 25 % of your money every month going towards eating out or towards transportation costs or towards whatever that is and then I begin to triage that and then once I figured okay how much should be going into this bucket and this bucket and this bucket and this bucket I'd figure that out so then I'd figure out the margin then once I figured out the margin boom I'm coming to the financial order of operations how do I think about where I should be deploying these dollars am I getting my employer match have I knocked out all the high interest debt do I have a fully funded emergency fund am I putting money in my Roth and I would walk it through that sort of three-step process to get her on solid foundational footing moving forward.

26:43Look, the reality is most people, because you're going to eat at this lunch, so you're only going to have probably 20, 25 minutes of productive get it in there. That's why you're going to need to have something that speaks after the lunch, and that's why I love the free download, but also realize the backbone of Millionaire Mission is the financial order of operations. If you ever want to know the origin story, how it all came to be, how you go deep into it, And then this also allows the ground rules to come into play because even before you get to step one, there's some things that help you set the table of being good with money.

27:16So I think that I would use that as something just to kind of a parting gift so that after the lunch, more action can occur. Love that. That's great. And quack, quack, quack, quack. You almost took the words out of my mouth. Quill Audit, if you would like a Money Guy Tumblr, since we answered your question, just email winner at moneyguy.com. Let's do one more long-form question before we move into our It Does Not Depend Rapid Fire segment. Of course you do.

27:44Brian Preston:Did you see the meme of the week? If you're not on our email list. Did you see the meme of the week, Brian? So, one, you should follow us on all the socials. Isn't that right, Matt? We should follow us on all the socials. Matt rocking a stash, too, over there. I'm about to be. I'm overtaken over here. But the meme of the week that was on socials and also in our newsletter, letter and I think it was in our email this morning. Just fantastic. It was a representation of Reby during the rapid fire segment and it was chef's kiss. Or was it during the whole live stream? Maybe it's the whole live stream.

28:18Brian Preston:There we go. You got it. All right, let's move on to Jim's question. It says, how do I convince my spouse who is very risk averse to invest a portion of our cash reserve in the stock market. We have no debt and two years of expenses covered by our savings. I max my IRA only. I mean, look, this is something when I was writing Millionaire Mission, I was trying to get people to understand what feels safe in the short term can actually be risky in the long term. That's right. and what is risky or feels risky in the moment in the long term can actually be an incredible wealth-building opportunity. And that's exactly what the financial markets are.

29:04And you've got it, Jim. You've done the right thing, and that's why I love. Once again, the financial order of operations will help you because you'll be able to show your wife, look, we don't have high-interest debt. We've got emergency reserves set up. We need to now make this money start working harder than we can with our back, our brain, and our hands so we don't get beaten down by inflation so that we can actually grow this money over the long term. That's what actually starting a Roth IRA and then buying some index funds is going to do. And that's why I would sell the vision of where you want to be and sell the vision of, hey, don't you want to actually be able to let our money work harder than we can so we can go do trips, we can do whatever your thing is that you all love doing as a couple, share that vision so that you can build some collaboration there.

29:49Brian Preston:Yeah, I'm curious how old you guys are, because to have two years of expenses saved up in cash is a lot, unless you're right at retirement or pre-retirement. So I'd want to know that. And I love Brian's idea of starting with the why. What are we saving for? Why are we building? So let's say that you define, hey, we want to be retired one day, and we need to save a million bucks. Just making up a number. I would use math to show my spouse, hey, if we're just going to save in our savings account, and this is how much we can save, this is how many months, how many years, how many decades it's going to take us to get to a million dollars by just saving in cash.

30:30Brian Preston:And what you're going to find is, holy cow, we're not going to hit a million until we're 75, 85 years old. And then I would show her, hey, do you realize if we started investing these dollars, then we could earn a conservative, let's say 7%, 8 % annualized rate of return by investing in low-cost index funds, do you realize we would then be able to reach that goal 10 years, 20 years, 30 years sooner by doing that? And I would show her that, hey, we have the same goals. Let's talk about the different paths we could take to approach that goal. And then let's agree with one another. What's the most appropriate path?

31:04Brian Preston:What's the most efficient, most effective path to get there? And Do we have on our website, because we use it on show content all the time, the rolling 20-year periods of investing? I don't think that's a deliverable. Okay, that's more of a show topic type thing. But it's one of those magical things is that also a great thing for people who think that investing is risky. That's why we say don't invest unless you can do it for five to seven years is because, yes, in the short term there might be some volatility, but if you can stay invested for that five to seven years, there's actually an incredible track record that this is pretty consistent.

31:42And that's another thing I talk about in the book is the law of accelerating returns. And if you don't think we're living in those terms with how things just seem to be speeding up on innovation and the growth of the world, you're going to be able to make money off of that. As long as we don't make the robots that kill us, we're going to be able to grow this thing and make even more money off of the ever-expanding economy in Pizza Paw. Love that. Well, that's great. But look, it doesn't matter if the robots kill us at that point. Oh, that's not great. You know what I mean? You can't control that.

32:14That's outside of the control feature. There's no plan for that. Yeah, that really doesn't matter to the question. That's for the government. That's for other people who should be thinking about those things, not you. Jim, you don't have to think about the robots taking over the world, but you can think about what Brian and Bo shared while you email winner at moneyguy.com to cash in on your Tumblr if you would like one. Alright, it's Brian and Bo's favorite part of the show I was about to try to delay it Let's go ahead and do this It does not depend rapid fire segment Where they will answer

32:48Brian Preston:Did awful last week I just want to say, I did very poorly last week I thought about it all week I could barely focus on Oh, the sunglasses are going back on This is a job for the Maverick Let's get in there and do this thing So just a refresher on the rules Goose, are we ready? Brian and Bo will have 30 seconds combined to answer the question, and they cannot use the words, it depends. And I will be trying to listen. Don't get too cute with it. Don't say other phrases that mean it depends, okay? I will flag that. I thought that was funny to me. Now, I'll throw them a bone at the end, and we will have our maybe it does depends segment where they can say all the things they didn't get to say in the 30 seconds.

33:28So with that, let's dive into question number one. 30 seconds on the clock. When it comes to 401k max out step, should we opt to max out Roth or traditional or a mix of both? Don't say it. Majority of people, you'll be Roth IRA. I mean, I got to think that just time, if you maximize the value of time and young people, I love Roth because, you know, most employers now offer Roth. I think that's where a large portion of the population would do really well.

33:57Brian Preston:I agree to disagree. By the time you're maxing out, you're putting$24 ,500 into your salary deferral. If you're able to save that much money, you're likely going to be higher income, which is likely going to put you in a higher tax rate, which means that you're probably going to max on the pre-tax side. You ain't wrong. We got to disagree, and time is up. All right, question two. Why do you never mention public transit as a possible form of reliable transportation? Because we're too sour boys. There are a lot of places where it is possible. I know. Whenever I go to Europe or even D.C. or New York, I'm like, this is awesome, especially with the way the mobile apps make it work.

34:31We have to start the clock. So this will be a lot less expensive than 8 % of total income. Start the clock.

34:37Brian Preston:Agreed. Public transportation or like a walking community is an amazing opportunity for folks who can live in that place. We, neither one of us, have ever lived in a place like that, so it doesn't come to mind initially. That's just a little personal bias that we have. Yeah, I mean, I grew up when they built Fulton County Stadium and then even the TED later. They didn't have MARTA go to it. So, I mean, we're from Georgia. Georgia. Public transportation was never done well, so it's not part of our life. You know where public transportation was done well. Question's over. I get that. You know where they mastered public transportation really, really well?

35:13Brian Preston:When we were in college. At the University of Georgia, right? Wow. That was the... I didn't expect that to be the answer. I was part of that infrastructure. I know. You were one of the bus drivers. I was one of the bus drivers. But it was great. It was amazing how convenient it was to hop on a bus, get wherever you need it on campus. You knew the schedule. If I lived in a city where that was like an opportunity, that was a thing, that'd be fantastic. If I could make a gazillion dollars driving a bus, I might still be driving a bus. Listening to the Beastie Boys. All right. Way too fuck the system there, Bo.

35:44Let's get back to our 30 seconds.

35:45Brian Preston:That was a tangent. I was a tangent. Next question is, what is the money topic Bo and Brian differ on the most and who's right? Well, I mean, paying off debt. I mean, we fought on it for a long time, made it in the book, because Bo kept telling me I was bad with money or math because I was trying to pay off my low-interest mortgage. And I was right. What's really interesting is we actually do align on, I would say, almost 100 % of things financially. Because it's not like there's a lot of it's fairly black and white, cut and dry. There's not a ton to disagree on. Which question was that? So I'm going to put a number?

36:28Brian Preston:Three. Three. I'm making some notes, too. Just when we come back. He's making notes on things to disagree with. When we come back to that, I do want to say 2008. Okay. Oh. Next question says, if I retire before age 55, should I do 72T or a Roth ladder? Say it again. If I retire before 55, should I do 72T or a Roth ladder? I don't like Roth ladders. gosh, I want to say more. But 72T is complicated, but Roth is going to be your favorite savings. It's going to be your favorite child, so it's going to be the first in, last out. Nope. Okay, we'll come back to it. 72T. When the market is going down sharply.

37:16We're still at time. I'm so sorry.

37:17Brian Preston:We still have time. When the market is going down sharply, what are some financial mutant actions to take? Always be buying. Yeah, I mean, Always be buying. If your dollar cost averaging because you have a lump sum, once you get over 20%, every 5 % drop, you can accelerate another month forward on your plan. Well done. Look for opportunities. Yeah, I try to be opportunistic. Great. We still had time. Yeah, you got us off. We had 15 seconds. You took the time away. We're master communicators. Well, I put myself in there with master communicator both. All right. Next one is the real hard-hitting question.

37:58Comb or brush? I use both. Neither.

38:02Brian Preston:Ooh. Are you? I'm like... Yeah, dude. I just mess it up. No, I use a comb to part the hair, get the right part, because I'm not an animal. And then after I dry the hair, I got to run a brush through it to give it the poof. You know what? Do y 'all use utensils or your fingers and hands, right? We're getting quite the variety of answers from your fellow men. Are you comb a brush or are you fingers? Neither. I was going to say neither. He just wakes up and just shakes a little bit. Yeah, no, I just, you know, wet the hair real quick, tussle it, put some, like you know, this little, by the way, a money guy listener is the one who hooked me up with my hair stuff.

38:43Brian Preston:Pull a bit out of the air. A money guy listener is who hooked you up? Yeah, man. Somebody sends you product or something. It's the best product. We went way over on that one. It's the best product. Best product I've ever used. Let's move on to the next question. What should I do first? Pay down my mortgage at 3.25%,$29 ,000, or my student loan at 6.1%, which is$444 ,000? Student loan. Yeah, student loan. Especially how old is this person? Doesn't matter. Student loan. I mean, that one sounds easy. Let's do the student loan. Did you say$29 ,000 on the mortgage? That's what it appears, yes. So there's a debt snowball thing going here.

39:24Brian Preston:They're thinking, ooh, I'll pay off the lower one. I'll get that out. I think it's going to be suboptimal, especially when your interest rate in the student loan is twice as high as your mortgage, and the mortgage is appreciating, and it's super low interest, even almost as low as the risk-free rate, for sure student loan. Yeah, I agree. Next question. Which step of the foo would you place paying back a 401k loan that you took out before you were financially enlightened? yeah i mean that's yeah it's probably that's more of a it depends on the interest rate i don't need to know more detail all right you both lose the time why do i lose it i didn't say it depends you were a team you were a team moving on last time i got called for the pins he got the answer i am i give both credit he held up the three i was like i was thinking three and nine all right Next question, how do you know when it is the right time to tax loss harvest?

40:20Brian Preston:When you have losses inside your taxable account.

40:25Is that it? Short and sweet? Yeah, I mean, tax loss, yeah. As soon as the market starts getting, find the silver lining.

40:33Brian Preston:Sometimes you might have a position that you really like that you don't want to get rid of. I have this individual stock. It goes down. I still believe in the stock. I don't want to sell it, potentially miss out on the 30-day window. so I'm not going to loss harvest that. But indices that are easily replaceable when you got some losses. Somebody put justice for Bo in the chat. Right? Raby is... Jeez. All right. A couple more. Best strategy for handling mileage reimbursement. The rate is generous and we always have extra.

41:07Brian Preston:On taxes or like from the employer? I think from the employer. Yeah, it's from the employer. Best strategy on handling it? Track your mileage? I'm sure there's apps that are out there doing that for you. Always has extra what? Money. Track your mileage and report it and get your expense reimbursement. Automate the process. I don't understand the question. I mean, there's apps out there that will help you automate. I just wanted to know what you were going to say. Make sure you get every mileage that you're entitled to. Great. Last but not least, what really went through your head when you walked in and saw the mullet wigs on your desk this morning?

41:44I was like, what crazy thing are they trying to do? Especially when I saw the mustache for Bo. But then when I found out the admin team did it and April's full, I was like, yeah, come on, let's get in.

41:57Brian Preston:I thought it was our riding team that did it. And when I found out it was the admin team, I was like, oh, okay, that's on brand. I couldn't figure out the angle that the riding team was going with. I mean, let's face it, they're sitting on bouncy balls right now outside that door. Our admin team. They're not serious people. Our admin team is sitting on bouncy balls right now. They're not serious people. Health is wealth. They're not serious people. Hey, by the way, we desperately need a new administrator. So if you'd love to be an administrator for a financial advisor firm and you like building your core strength at work on a big bouncy ball, go to moneyguy.com.

42:32I like that you've committed to buying another one for the office. Oh, I'm sure. That's the other thing. I know this is not part of the 30th thing. You know these are corporate credit cards that are buying stuff. We are totally stretching the deductibility of all things when I see mullet wigs. One of our admins just messaged and said, let us live. So that's your message from them. All right. That finishes our it does not depend rapid fire segment. So now we will move on to where maybe it does depend segment where you can say what you didn't get to say. On the very first question about 401k, you guys disagreed.

43:07Do you have anything else to say on that? No, I think... Bo was fighting to not say it depends.

43:11Brian Preston:Yeah, so I said that if you're at a higher income, to be able to max out your step six, that means that you've already maxed out step five. That means you're putting$7 ,500 in Roth,$7 ,500 in Roth, either$4 ,000 or$8 ,550 or whatever the numbers are in your HSA, and now you're doing 20... I think we did the math when we did a Manny case study. You have to be making$137 ,000 as a household for 25 % to have you maxing out all those. So the odds are you're going to be in a higher income situation, which is likely going to justify you doing pre-tax if you're maxing it out. So my logic train was that only the top 10 % are going to be able to be in that situation.

43:50The 90 % are, you know, probably benefit from doing a Roth. So I went with the numbers because the real answer is Bo's answer, which is it depends. But I was like 90-10, let's go with the 90. I knew there was going to be a lot to say there. There was. I am saying Bo is right I know he loves hearing that as a master communicator but it is the 90-10 I was just trying to play the numbers I was curious for public transportation what percentage of even like the United States has that that's what I was wondering too I do think that I was under the impression that generally speaking that's not an option for a number of people public transportation had to be something that was really thought about in like the 1800s.

44:37Sure. Because now land and everything is so expensive. If you try to go put this stuff in, like cities now, goodness gracious. I mean, there's projects out there in California and others that have shown that it's a disaster to do it now. So these are decisions that you wish people would have made back when land was cheap. Because I was just thinking about why do we not talk about it more? And I think you're not wrong. There is some personal bias there, right? Like we've always lived in prison. But I do get it. But I think that that's pretty common, right? In Millionaire Mission, I do talk about on housing, that I think people who live in high cost of living areas, one of the hacks that you can break the housing rule of 25 % is when you have public transportation and you don't have a car payment, there are ways.

45:20I try to address it when I can talk in a format that's especially not 30 seconds. But it is awesome. I was just in New York City not too long ago, and it is crazy how you think you're going to get a ride share, and then you're like, why would I do that? That would take way longer. Remember when we went to New York and we gave Bo the New York treatment? We did. And we were like, hey, we can Uber and it would take 45 minutes to get everywhere or we can pull out our cool apps and just ride the public transportation. I mean, maybe we should talk about it more, but not everyone has it.

45:48Brian Preston:Quick Google search, it reminds me 55 % of Americans have access to public transportation while 45 % have no access at all. Yeah, but that stat, you have to be careful of stats because we just talked about the city of Atlanta has public transportation. But it's not effective. It doesn't go anywhere. Yeah, yeah, yeah. It's just like around here. We have buttles, shuttles riding everywhere. In my mind, I'm thinking New York City subway. So those stats would say you have, but you don't really have public transportation. Right. You've got the government trying to wink and nod that, hey, we got a bus out there.

46:18No, that's not really true. Nobody rides out.

46:22Brian Preston:On number three, you said 2008. It was what do the guys differ? I think I know you're doing this. Yeah, well, I think when Bo and I first started working together, because look, we all have a recency bias. And since Bo graduated when the market was literally getting its teeth kicked in, I think that for the first few years that you were managing money, you had some nervousness. Super conservative allocations. You were super conservative. But the market always lost 40%. And at that point, I was like, it's okay. I think you probably thought I was a cowboy. And I think we've now moderated where we're the same.

46:56Even though I'm getting older and probably more conservative, it's just one of those we all are shaped by what we've lived through.

47:03Brian Preston:That's right. The other one that I want to add just to, there was this question around, hey, for FIRE, should I do 72T? For those of you that aren't familiar, 72T is a way that you can access pre-tax assets prior to 59 1⁄2. You have to take substantially equal periodic payments. But there are some rules associated with it. You've got to make sure you do it right. you can't run a foul, or should I do a Roth conversion ladder where I convert to Roth, let it sit for a while, then I'm able to pull the basis out? We both ended up saying, hey, likely you want your Roth dollars to stay in the Roth accounts as long as possible so you're maximizing the tax-free growth for as long as you can because that's the real benefit to Roth.

47:41Brian Preston:So if you're giving us a binary option between conversion ladder or 72T, we're probably going to say 72T. However, we don't really love 72T either. We'd rather see you plan for it, build an after-tax account, or maybe have access. A lot of people don't realize if you are working at an employer and maybe you have this big IRA rollover over here from previous employers and you're planning on retiring at 55, you can always roll pre-tax assets into your current employer's 401k before you retire, thus opening your ability to access the assets from 55 to 59 nine and a half. So there are other ways to get access to those dollars that aren't quite as complicated.

48:22Brian Preston:We'd love for you to do one of those as opposed to either one of the Roth conversion or 17-10. And I'm not against Roth ladders. It's just, but when I've seen it, people come to us and they tell me, hey, I've built up this big Roth so I can do a Roth ladder and pull that basis out. The reality is, is then we look at all of your accounts and we look at what your tax rates and other things. And we're like, yeah, I mean, I know that that looks good on paper and it's a cool content piece, but you realize that money grows tax-free. If you die with that money, it gets to continue to grow tax-free and you're not going to die broke.

48:56I've seen how much money you have built up. And it's just in practice when I look at people's actual assets and I'm trying to create a real plan that's because personal finance is personal, usually we don't go start rating the Roth account first. It's usually first in because it's step number five of the financial order of operations last out because it is your favorite child when it comes to your assets. Because that's one, even Bo, like right now you've told me, you pulled me inside and go, hey, I know your income's tax rate's high, but what are you doing? You ought to be doing Roth contributions even to your, because I'm now in this legacy standpoint.

49:35And you're right. I mean, that's why I keep thinking about, yeah, I'd rather pay a little bit more tax to this so that my, daughter who's going to be living off this stuff. Because that's the other thing is I have an autistic daughter who, you break the 10-year rule on spreading beneficiaries out. If you have somebody who's developmentally challenged like my daughter is, she's going to be able to basically stretch this out over her lifetime, which is pretty incredible. Yes, I'm going to pay more taxes now, but creating an alternative stream for her is pretty powerful stuff. It's a good planning, isn't it?

50:08It is good planning.

50:09Brian Preston:there was one question where Brian said it depends and somehow you as just a dictator decided oh this is the way the game works now somehow y 'all are both disqualified and you lost points she wouldn't do that to me that's where I know I'm still Reby's favorite so my question is what was that question because I feel like I might have had something to say it was which step of the foo would you place paying back a 401k loan that you took out before you were financially enlightened. Okay, why do we dislike high interest debt? Because the high interest rate works against you aggressively, and we want your money to work for you, not against you.

50:53Brian Preston:I would argue that a 401k loan, irrespective of the interest rate, irrespective of the fact that you're quote-unquote paying your self-interest, you have taken valuable soldiers in your army of dollar bills off of the battlefield. So I would argue, let's get that 401k loan paid off as though it were step three. So I want you to knock that out, get that paid off, let your dollars start working for you, and then begin progressing through the financial order of operations. That's what I would have said had Reby been kinder and more equitable. But she wasn't. I will try again next time. By the way, we had some great brainstorms.

51:33Reby walked out of the room, so he probably won't get implemented. Oh, my gosh. But we are dropping some dimes in the content meeting. If they fill you in, we've got some great ideas. It's going to make the rapid fire. It terrifies me because I'm naturally not good at this already. But if we can implement this, you guys are going to absolutely love what we add to this. If Rebe signs off on it. Did y 'all tell her the idea? It's good stuff. Rebe walks out of the room and it's like, ooh, boss has left. I'm flattered I think I think I'll go with flattered Alright We do have some time left So let's get back to some long form personal finance Are you ready?

52:16Let's do it Alright Thewinkinator21 asks Hi money guy Where would an ESSP Or does he mean ESPP Fall into the Foo? Are those two different things? You can tell I'm thinking ESPP It's an employee stock purchase plan Yes That's what I'm assuming he meant So where would that fall into the Foo? I am putting 15 % of my take-home into the program, which means I can't max out my retirement.

52:42Brian Preston:It depends. I can say that now. You can say it. I know. I read it when you said it. I was like, okay. It depends on how your plan operates. For those of you that aren't familiar, ESPP is an employee stock purchase plan where your employer says, hey, we want you to participate in being an owner of this company. So we're going to allow you to buy shares in our company. Now, here's where it matters how the plan is structured. Oftentimes, what they'll do, especially if it's a publicly traded company, is they'll say, hey, we're actually going to let you buy at a discount. If you want to participate in ESPP, we're going to let you buy at a 15 % discount.

53:16Brian Preston:Or we're going to look at a trading window from day one of the quarter to day 90 of the quarter, and you get the lowest price in that window or whatever that is. if something like that is happening inside of your ESPP plan, we would argue that's a lot like free money. Like if I get a 15 % discount or if I get to buy at a lower price than market, that's my employer providing an opportunity for me to have some free money. And so we want you to take advantage of that aggressively. But. But. We love these employee stock purchase plans because it really is that good that you get a discount and then a lot of times they'll let you buy at the lower of the price at the beginning or the end of the quarter.

53:56That's why you got to get in and get there and get that. But here's the asterisk that goes at the end of that. You have your human capital. This will be part of your investment capital. You need those things to kind of decouple at some point because you're trying to build financial independence outside of your human capital. And if you have all your eggs in one basket, it can be great or it can be disastrous. And part of what we're trying to help you build is something that protects you, whether it's raining outside, whether it's cold outside, whether it's sunny outside. We want you to have an all-terrain plan.

54:31So that's why we love these type of opportunities. But we always say there are limits or create a system to where this is cleansing itself out to where maybe every year you automatically are then flipping it in to sell it and turn it into diversified holdings that can start building your army of dollars out. outside of the company you work for because it's just a risky thing. Y 'all have heard me tell the story of Lucent Technologies and other things. When I worked in Atlanta, I saw a lot of people that on paper were worth a lot of money, and it pretty much went to nothing because they had their human capital and their investment capital sitting in the exact same place.

55:11Love that. Love that. Well, hey, if you don't want to stop chatting, don't want to stop thinking about personal finance, even when we turn the cameras off today, no problem. Just go to moneyguy.com. Not only do we have tons of free resources and calculators that go deeper on some of the topics we've talked about today, we also can send you to the Moneyverse, our private Discord server where you can keep chatting with each other, asking questions, giving input and perspective and experiences. And we even just posted a poll up there about your savings rate today so you can compare notes with other mutants and talk about your goals.

55:46So if you want to do that, go to moneyguy.com slash moneyverse. All of that is on moneyguy.com. We're trying to make it better and better, more searchable for you every single day. So be sure to check it out if you haven't yet. Now, look, if you stuck around, because I think that we at least give Bo the opportunity. You've hung out with the Wizard. What was your favorite ride? Oh, yeah, yeah. What was your favorite ride at Universal?

56:09Brian Preston:You know what? I saw, my wife and I took our oldest girls down to Universal down in Orlando. Yep. And it was unbelievable. So much fun. The girls are big. We're at all the roller coasters. I got to see a number. I saw a bunch of you in the Nashville airports, a number of you in the Orlando airport. So some of you at the parks. Thank you so much for saying hello. It was wonderful to get to meet you. Wonderful for you to say that you watch the show. So thank you for that. It was awesome. I think the easy answer to your question is Hagrid's is just balling. It's an unbelievable ride, right? Like it's so good.

56:42Brian Preston:But also big fan favorites. Velocicoaster was a big fan favorite. And Hulk was a big fan favorite. So my kids crushed them all, right? And the real question that everybody wants to know, did you check a bag or did you gate check a bag or did you do carry-on? So here's what we did. I, going down in the Nashville airport, I had four carry-ons, my kids and I, so we took all carry-ons. We volunteered to gate check at the first notice. And it was one. We gave them the bags. We went and sat down. It was so easy. We'd land in Orlando We'd take it to And just you know what The Lord was smiling down on me As soon as I walked With the carousel All three of my Well three of the four Were just in order And I just pulled them right off So somehow you got To baggage claim Y 'all were so slow Off that plane That it was already In baggage claim I got a bunch of kids dude Yeah and it was So it was literally so easy And the way back It was not a full flight So we just carried them on And it was great That's a financial mutant hack Really?

57:44Free check bags It is

57:45Brian Preston:You know what I think Southwest now charges$35. Delta and all of them charged. It is a hack. If you want to check your bag, gate checking is probably the cheapest way to do it. It's amazing. It's the same way with your parents living in the basement. You want it to be a choice. You don't want it to be mandated. It's the reality of the situation. I love gate checking if you want to use it as a financial mutant hack. Sure. I don't like when the airlines tell me, hey, you, sir, you're now at this point in the line. we're going to take your bag even though you like to seal team six get off the plane and run to the cars as fast as you possibly can you know they i like it when bo can at his leisurely pace get off the plane but i want my family to attack and go and get the heck out of there as fast as possible and not have the airline hold me back i will tell you i uh when we got on the plane because they were like so we volunteered the first call hey if anybody wants to gate check i was like oh me we do so I did and then they did like three or four more calls we got on the plane so much overhead space I even sent you a picture I sent you a picture of it it was completely empty Ben so I do think they're pants on fire airlines we've caught on I don't know why I haven't figured out their game completely unless it's speeding up the process but those overheads are not really full they are fibbing to us and we've got to work on that but I couldn't help myself I wanted to know about Universal.

59:11I wanted to know about the gate check because that was something that just populated a lot of our live stream last week, how I got my, because I saw some money guy folks on the plane, but unfortunately they were right as I was trying to Karen out on the, on the flight attendant. So it is what it is. I'm your host, Brian joined by Mr. Bo. We'll see you next week. Money guy out. The money guy show is hosted by Brian Preston and Bo Hanson. Brian and Bo are partners with Abound Wealth Management. Abound Wealth Management is a registered investment advisory firm regulated by the Securities and Exchange Commission in accordance and compliance with the securities, laws, and regulations.

59:51Abound 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.