The Truth About Early Retirement: What You Need To Know

20:39Brian Preston:Saving 25 % post-tax seems like a much larger savings rate compared to pre-tax. What would you say to Evan? So this is a pretty common question we get all the time because people recognize that - The vest is on now. The vest is on. Because people recognize that, okay, a dollar in Roth is not the same as a dollar in pre-tax. If I have a dollar pre-tax, I'm actually having a dollar plus my tax savings. So if I'm in a 22 % tax bracket, I have$1 plus 22 cents of tax savings. $1.22 pre-tax is equal to$1 Roth. So they are, in fact, not equivalent. And so we have a lot of financial mutants that want to really get in the nitty-gritty of the math on here and ask, okay, do we weight this different?

21:22Brian Preston:Should I think about this different? My simple answer is no. Because I told you so. No, it's not because I told you so. That's what you do. Don't you know when kids ask a parent a difficult question, it's like, no, because I told you so. No, because that's the way I said to do it. No, because what we want you focusing on is 25 % of your gross income. If you want to know why, go to moneyguy.com slash resources. We have a deliverable. How much should you save that says how powerful 25 % could be? Now, if you're doing this the way that you want to do it, because a lot of people are trying to think about, okay, am I optimizing?

21:54Brian Preston:Am I in the right place? If you're following the financial order of operations, Brian, will you hold that thing up for me? the financial order of operations is the thing that will lead you down the course of how should I do this? Okay, I'm going to do employer match. That's likely going to be pre-tax, maybe Roth. I'm going to get to step five. I'm going to be doing Roth, doing Roth. I'm going to get to step six. I'm going to be maxing out retirement. And I'm going to add up all of those. And so long as I'm following the financial order of operations and I'm saving 25 % of my gross income, I don't think you have to get any more complicated than that.

22:23Brian Preston:And if you're doing that well, over the course of a career, what's going to happen is when you get to financial independence, when you get to retirement, you're going to likely have these three distinct tax buckets that you've been able to fill up, where when that really matters is when you go to begin distributing and pulling your assets out. So I don't think you should waste a lot of mental calories in the front end thinking about the differences, because where it really manifests in value is in the back end when you start to pull those assets out. Well, look, I'm going to make you feel much better about this, Evan, and the fact that when you're younger, realize we've also built in the grace of that you get to count your employer match when your income's under$100 ,000 for a single individual,$200 ,000 for a married couple.

23:05That's going to, because most people who are in a lower tax situation, who are counting their employer match, you're going to do the Roth contribution. It's the most tax favorite. It's the better one. It's only the people who are in super high income situations, probably making over$200 ,000 for a married couple that they're going to choose because they're going to be in the greater than 30 plus percent marginal tax rate that are going to choose the pre-tax. And you're spot on. The Roth is so much more valuable, but that's also the pressure that that pre-tax contributor is going to have to put more in because they don't even get to count the employer match anymore.

23:40So you see how this works out in the wash. That's why we can tell you, focus on the behaviors you can control. We've already created the system that takes all of this into account. You're like, holy cow, this kind of, it's amazing. It's like a jigsaw puzzle. You start putting it together and you're like, oh, that's where those three pieces go. And it's like, because the system was designed to be very tax favored, but also to bring in the behaviors, we've already built this in. That's why when people write and say, why do y 'all even have that$100 ,000,$200 ,000 rule? We understand how the social safety net, we understand how tax policies, we've tried to build a better mousetrap, Take advantage of it.

24:18Brian Preston:Love that. Love it. Evan, thank you for the question. Do you feel better now that you're back to being Han Bolo? Honestly, I feel like the temperature dropped by at least 20 degrees over here. It was... Hang on. I got to practice. Stand to see. Oh. What do you think? Pretty good? Merry Christmas to me. That was amazing. That was for you guys. That was for you guys. I'm not known for a Chewbacca, but I was like, you know. You are now. You are now. All right, Chewbrian. That outfit is so good, though. It really is. It makes me want to put a Chewbacca head on. Clearly, it does. Don't say that too loud.

25:03Brian Preston:Literally, our production team will go out and get a Chewbacca head. Anyway. All right. Let's go on to the next question now. Tony G. He says, Can it make sense to put a car sinking fund into mutual funds instead of a high-yield savings account or money market account if you own your cars for seven-plus years? Yes, and here's why. My opinion. For sinking funds on shorter-term purchases, like what I'm going to call an automobile, I don't think a sinking fund should likely extend much past five years. We always say that if you're going to need some capital, need money inside of 60 months, you want that to stay in cash, and that's the only way where a sinking fund would come.

25:48Brian Preston:If you have an expenditure that's going to happen nearly a decade out in the future, I don't really think that you would consider that part of a sinking fund. I think you would consider that just part of your total investment portfolio that you're building inside of that after-tax account. So I do think it'd be okay for that money to go into low-cost index funds, part of your portfolio because I don't think that a goal seven years out, absent it being like a home or a big renovation or something like that, would fall into stinking fun category. You were spot on, but I want to tell you where the danger zone is so you can avoid it is if you're driving a car for beyond seven years, you know when you start getting nervous, like, oh, boy.

26:32Hope it cranks, hope it cranks, hope it cranks. I hope Betsy cranks up this morning. It's cold outside. And then you start, and look, if you've got kids and you've got a spouse and you know, and you're like, oh, gosh, I hope she's not calling because they broke down and Betsy because Betsy wasn't reliable anymore. When you're getting within a year, two years, don't get cute with keeping your stuff. Because what you don't want to have when it rains, it pours, meaning that bad news comes in multitude. I don't want you to get in a situation where the stock market's getting its teeth kicked in. you lose your job and the car breaks down and you sound like a country song at that point because you got really cute trying to get as much gain as possible.

27:16I want you to kind of understand and be honest with yourself is if you're getting into that halo period of a year, two years, even up to three years, you're like, hey, there's a chance. The market's in a great place right now. Probably got to replace this car in the next two years. I probably ought to come up with a strategy to start turning some of these investments into cash because I don't want to run this thing where literally one day wakes up and it doesn't crank anymore. I love that.

27:41Brian Preston:Yeah. Well, Tony G, really good question. Thanks for asking it. And I hope that helps. Next question is from Bags. It says, I am 39, have been steadily saving for many years. I have amassed 740K. Let's go. That's really great. However, only$150 ,000 of that is invested. The rest is in a high-yield savings account and money market account. How should I invest at this point? Okay, so he's asking the right questions now, but talk about where he's at and what he should be doing next. I mean, we got, look, Bags, we got you hooked up. We're even going to show you a resource here in a minute that's going to help you out.

28:25But I need to know more context here. is I'd love to know where did the money come from? Is this one of those things where he has an employer plan, that's where the$150 ,000 invested is, because that was forced upon him to save and invest? And then the$740 ,000, there's two things that could have happened. Either this person didn't feel comfortable saving and investing, so they just kind of, in a miserly way, just built up a bunch of cash in the background, or they've come into a windfall. I don't know how we ended up here, Bags, but either way, we've got to address that part. How did we get here?

28:57And then on the way out.

28:59Brian Preston:He did say he's been steadily saving for many years. So I think that's at least a little bit of a cue. But I think that's probably what the 150 is like an employer, a forced employer. Okay, so you're saying that could have been. Fair enough, yeah. Because those things typically make you get invested because they have a fiduciary on them. They have employee education meetings. But that pushed his hand. but then the taxable account over here that's just got a bunch of cash in it, it sounds like that just built up over time. Yeah, and so I think what you have to do is you have to – the first question I would ask you, Bags, is why?

29:34Brian Preston:Why do you have this much in cash? Absent an answer like this, oh, well, I'm saving up for a house or I'm buying in a partnership, I'm starting a bid, whatever. If that money is not accounted for for a short-term goal, but rather this is part of your long-term financial independence building, I would argue you probably have a little bit of a problem. Because I want you to go to moneyguy.com slash resources and check out our wealth multiplier. Because the wealth multiplier for a 39-year-old is going to be a little over seven times. Meaning every dollar that you save at 39 can turn over more than seven times by the time that you get to age 65.

30:11Brian Preston:So that money... 8.16. 8.16. So that money, just sitting in a high-yield savings account of money market, is not working as hard for you as it could be. We want that money to be working effectively and efficiently towards your financial independence. So I think there's a really good chance that a big chunk of that$600 ,000 you have in cash ought to be invested. So then the question becomes, well, how do I do it? Now, maybe you've been waiting for a downturn and maybe you've been scared of the market. Maybe you thought there was political or economic or global unrest and that had some sort of apprehension inside of you that made you not invest that.

30:47Brian Preston:What I would say is let's remove the emotion from this. And if I know that I have$600 ,000 of excess, or let's just say$500 ,000 because maybe you need to have$100 ,000 in cash for some reason, how can I systematically work this into the market over some period of time? Maybe it's$50 ,000 over 10 months. Maybe it's$25 ,000 over 20 months. I'm making up numbers here. You mean monthly, those are some, some, some. Yeah, you would invest that much every month so that that way, If the market does go down from this point, that's great. You're buying in at lower and lower and lower, lower levels. But if the market goes up, that's also great because last month's contributions making money and the month before and the month before.

31:27Brian Preston:It's literally a win-win situation that allows you to get your money invested and get your money to start working. Because right now, you have a lot of wealth sitting on the sidelines that could be doing a lot of very heavy lifting for you. Can the content team pull up the Goldilocks rule on dollar cost averaging? I bet they can because our content team is second to none. But here's what I'm going to tell you, Brian. There it is. Look at that. I was going to say, we just pulled it up recently. So here's the cliff notes of understanding this, Bags, is that obviously your amount is invested. Now, figure out how much you need in cash reserves.

32:05We want to cord that off and we want to protect it. But after you figure out what the difference is between what's emergency reserves and what needs to be considered invested, you could say, wow, that's substantially bigger than what my total invested assets currently are. So then you can take into account, okay, based upon the Goldilocks rule, is this going to be a four-month corrective measure? Is this going to be a 10-month or 12-month? We're going to hook you up. So go download this, moneyguy.com slash resources.

32:35Brian Preston:That's great. Moneyguy.com slash resources bags. Thank you for your question. Next up, we have Dan. You thinking about something? I was. What? He looked deep in thought. Is our Golden Locks rule a resource? Oh, it's not a resource. It's not a resource. I just don't. Bags, I don't want to send you to Wild News Chase. No, you're so right. I just, I was looking for the next question. It's one of our Money Guy rules, but it's not actually a resource. You can't go down on it. So there's nothing to go down on it. You can just see it in our shows. However, there is a show that we recently did that walked through all of them.

33:06Brian Preston:We don't have that out there? It's not a resource. It's a rule. Not yet. Well, add this to the Bo Hansen library wing, the Money Guy show, that whole diagram that we were coming up with, decision matrix. We also need to add the Goldilocks rule. We're building this library one brick at a time at this point. I'm not so sure. I do think some more things are coming for 2026. I'm not so sure that what the resource should be is the Money Guy rulebook. And what it is, it's a compilation of all of ours. We actually just did a great show. I can't remember the name of the show, but it just came out. 11 Money Rules, something like that.

33:41Brian Preston:It's 11 rules. 11 Money Rules that you should know to change your financial life just came out. And it kind of walked through, one of which was the Goldilocks rule. We should make a deliverable, the Money Guy rulebook. And we should have that out there. Bags, thank you for the recommendation. Well, I'm glad. Well, look, I'm glad you corrected it. I would have felt horrible if they went out there, the money got out called slash resources, and where's Goldilocks? Because if I was doing this, I'd go do it on the search bar, type in Goldilocks, and be like, these son of a guns. What's he talking about?

34:10Now, maybe if you wrote Goldilocks, our search parameters might be so good that it shows up that 11 rules show. I wonder if it will. I'm going to go test it.

34:18Brian Preston:We've actually been working on improving that. It's not what I want to know. All right. Well, I'm glad you caught that. I'm glad you caught that, Bo. I was looking at the questions. There's another show, Bags, that you could go check out, too, that would help. And I think the name of that show was The Truth About Dollar Cost Averaging That Most Investors Miss. It's another great one if you're thinking about how to get this money to work, how to get it working for you. That'd be another great episode to go check out. He just noticed it. He just noticed all the Christmas decorations. He just noticed the logo's different.

34:49Holy cow.

34:51Brian Preston:Did you notice we have a wreath? Oh, that was delightful. Here's actually what happened. And on the right side over here, I see our YouTube button. And I'm like, why is that hanging up? And I was like, where was that thing? And the thing is, I'm so bad on where Waldo is, is I couldn't remember where it was on the set. So I started working around. And I was like, oh, my gosh, they customized. I knew the trees. I knew the trees were here. I saw the trees. Christmas trees, yeah. Well done. But that I had not seen. Was that there when I walked in? It was. I guess the Santa Claus. It's been there the whole time.

35:28The Santa Claus face and hat got me so distracted. He was distracted by the beard and the hat, yeah. I also didn't notice, you know, they had put stuff in the lobby, some Christmas stuff in the lobby and some other specialized stuff this morning. They're like, hey, what do you think? And I had to go do a double take. So I just don't think I'm that observant.

35:46Brian Preston:It's so funny. He says that, that he's not that observant. But I happen to know this to be true because he has a skill that I have. If he walks into his house, and this is true, and he sees something out of place that's not where it's supposed to be, like, oh, hey, there's my keys or my spouse's keys, he just archives it away. That thing is out of place. I'm going to remember that later. So that later if someone comes and asks, say, hey, sweetheart, have you seen my keys? You know where it's at. You notice that kind of stuff all the time. But that's a different use of the brain. I can be unobservant of everything, but if I know there's something that is valuable that my wife is going to need, I will take a mental note when I see important things.

36:25I'm the same way.

36:26Brian Preston:No, I get it. I'm blind to things I don't actually have a use for today. I've learned there's a value to paying attention to valuable things that are out of place because it is many times, because in the house I am known as the finder. And I'm not really a finder. If you know me, I'm disorganized. But what I am is I have learned if I see something out of place, take a middle note and then follow it away. And then when they say, hey, I can't find this, I'll be like, here you go. I know where it is. That's pretty good. I literally noticed when my stapler has been moved. You've got some hot stuff.

37:03Brian Preston:You're different. This is why we're a good team. You're a little more wound, a little tighter on some of that stuff than I am. There's a reason why when you look at my phone and you see how many unanswered emails. That one, I don't like that one. I lose sleep over that. I know you lose sleep over yours. I lose sleep thinking about your fault. If it was really important, they'd reach back out. Yeah, that stresses me out. Even though I am a little more disorganized than Beau, that one, I don't go that far. That's hilarious. I shouldn't have said that part out loud. That's why they can reach out to other people here.

37:39Brian Preston:It's all good. Okay. Next question. Are you ready for it? It's from Dan4244. It says, I'm saving a lot each month into a high-yield savings account for a down payment on a house. Nice. Which is great. Do I get to count this money towards the 25 % savings goal since it will go to an appreciating asset? Nope. Next question. Here's what. That was innocent. I loved it. I didn't plan for us to synchronize that. He was trying really hard because he was like, this is going to go to an appreciating asset. and I get it. I get it. Tell them why. Does this count as discipline? Yes. Does this count as deferred gratification?

38:20Brian Preston:Yes. Does this count on living on less than you make? Yes. Is this a wonderful thing to do if home ownership is a goal of yours? Yes. What is the 25 % for? 25 % is saving for your future financial independence. Saving for a down payment on a home is saving for a current year, current time use asset. Those are two different goals. So saving for the down payment for the home, while it may eat up some of what you would have had going to 25%, it does not count towards that. What actually happens is you have 10 % going to this goal. And if you had to decrease your savings rate, you only have 15 % going towards that future financial independence.

38:59Brian Preston:This is the number that 15 % is what you need to get back up to 25. We do that on purpose because because we want you to attack short-term, intermediate-term goals ferociously so that you can get to them, solve them, and then get back to the long-term goal, not rest assured about, oh, okay, I'm doing the 25, I'm doing the 25, because that 25 % is not actively going towards your future financial independent self. Yeah, I see this as somebody like Dan, when he's trying to come up with a house down payment. It's not part of the emergency reserves, but it's like a bolt-on strategy to your emergency reserves, because what will happen is you'll have your three to six months, but then you might have this sinking fund for a down payment.

39:41But it is, and I'm glad you said it the way you did, is that you should be troubled that every month that you're saving, it's a very noble cause to do the down payment, but it is keeping you from hitting 25%, and that timer should be ticking in the background because you've gone to the wealth multiplier. You know what compounding interest can do for you. So that way you feel the pressure to get back on track as fast as possible. Love that.

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40:46Brian Preston:Spend less time searching and more time actually interviewing candidates who check all your boxes. Listeners of this show will get a$75 sponsored job credit at Indeed.com slash podcast. That's Indeed.com slash podcast. Terms and conditions apply. Need a hiring hero? This is a job for Indeed Sponsored Jobs. Great stuff. Do we answer all that? I think you did. Okay, yeah. And I mean, the main point was no, you cannot. And look - You explained why very well. You mentioned this, and I want to - This is just a brief aside. You said, well, hey, does it count as this? Because it's going towards an appreciating asset.

41:24Brian Preston:And while it is true that your house can't appreciate, And while it is true that your house can add to your long-term wealth, we would encourage you not to think about it that way. We want you to think about your primary residence as a use asset, as a thing that I am using and consuming today to put a roof over my head, to shelter me. I don't want you thinking about, oh, this is how I'm building wealth. Because I have some very good buddies. Like, oh, dude, the way I'm building wealth is just my house. I buy a house. It goes up in value. I roll it all into the next one. I buy another one. I roll it into the next one.

41:56And while that can work, I don't know that's the most efficient way to build towards financial independence.

42:02Brian Preston:And I would not bank my financial independence on that. Whether the house goes up or down, it provides shelter. And that's what matters for you. If it just happens to go up and happens to help you build wealth, I would consider that a cherry on top. I had a conversation. It was kind of an odd conversation because somebody I know who lives in a nice house already. And they were like, Brian, I've been thinking about selling and moving because I just think this price point is probably capped out. Man, I can't go any higher. We live in a neighborhood with a certain size lot. People just aren't going to pay too much more, whereas I was told by somebody in real estate that I could go buy this plot of land.

42:44I could put a really big house on it, and it's so inefficiently priced. This could be worth$3 million,$4 million. And I had to remind them that no matter how much it goes up to, it's a use asset. Yes, it's something you could sell. But I'm surprised. And we live in a very high cost of living part of America. And I see it all over social media where people will show a new house going in Brentwood or Northern Franklin and these castle-looking houses. And it is amazing to me that people are buying homes that essentially is a full retirement for most people. They're spending more than$3 million on a house.

43:20That is most people in America's full retirement, meaning if you had that money working for you, it can provide a very nice living perpetually versus if you just have it in the house, it's just there. So just be careful how you look at the house. I mean, there's nothing wrong if you're at the level of success as this is your step eight in abundance goals that you say, you know, this is we entertain, we raise money for charities, we want to host things, we want to do things, so I'm going to have a$5 million home or$6 million, because we have clients that are like that. And I think it's all, but it's secondary to having the financial foundation and their financial assets outside, investable assets have to be built up.

44:04You don't want to have a balance sheet that is house rich, life poor, and retirement asset poor. You just be careful of that because there's some weird mentality because of how much real estate ran up during the pandemic and a little bit after the pandemic with all the inflation. that there's some recency bias that I think people haven't really understood how these are distortions that it might not, just what happened a few years ago might not be the thing that is the way you're going to build your wealth going forward. That's right.

44:33Brian Preston:Yeah. No, that's good stuff. Dan, 42, 44, thank you for the question. We get where you're coming from, and we hope that helps you think about this house decision and your savings rate moving forward. I'm really happy to report if you go on moneyguy.com and search Goldilocks rule, all those shows pop up. I just needed to say. Let's go. Listen, I'm like, I'm, you know, part of working on all that. So I'm like very proud. I'm about to say it's because you have been working so hard on getting our website. So in more to come, but yeah, if you go to moneyguy.com and search what you're looking for, it is getting better and better and better.

45:04Brian Preston:It's all about trying to make it super findable, like all of the episodes, all the resources we've done. So just in case anybody did want, it's not, it's not an official resource, but you can go search it on moneyguy.com and it's all good. It's like if I did Goldilocks, they'd find it. I'd be like, oh, that goofy Brian. He just doesn't remember what's a resource and what's an episode. All right. Next question is from Jarrett N. It says, my emergency fund is running low and I have been having trouble refilling that bucket. Should I cash out after-tax assets? I could likely do so at 0%. I am the sole earner when we have three young children.

45:44Brian Preston:There's a lot there. What do you think about this? You're talking about taking, their income is low enough than they can do with capital gains at 0 %? Or maybe they have lost positions or something like that. Here's what I would really want to know, Jared. It sounds like things are pretty tight. The reason I say that, as you said, it's been really hard to rebuild up the emergency fund. What I want to know is how lean is your emergency fund? Because if you're a single-income household and you have three young children, I'm going to bet that the need for an emergency fund for you is probably going to be six months of living expenses.

46:16Brian Preston:Well, if things are already pretty tight month to month, and when you need six months, say you only have like two months, three months, if something bad were to happen, job loss, sickness, car goes out, whatever those things are, it could put you in a very bad spot very, very quickly. And you have a lot of people sounding like sole earner, meaning you have a spouse, three young children, meaning you have some dependents. There's a lot depending on you. I do think this is one of those unique circumstances where you have to triage and say, okay, if the you-know-what hit the fan, how quickly would things get bad?

46:52Brian Preston:If your emergency fund should be six months, but you've got four and a half, maybe not that dire. If it should be six months, you've only got one month, then yeah, maybe you should take advantage of those 0 % capital gains rates, potentially sell some of those taxable assets right now, the market's in a good spot, and get that emergency fund beefed up and bolstered up. Agree, disagree, want to fight? No, I agree. I mean, I definitely especially if you have after-tax assets, I would, because you've got to have emergency reserves, but then here's phase two of this triage moment in time for you and your family.

47:24Do you need to ask yourself, is this a season or is this just the way things are? Because if it's a season, I'm going to give you grace on the fact that, because if you're having to sell assets that were invested for the long term and you're having to go backwards in the financial order of operations to boost up the cash reserves, I'm okay in a season for you to kind of do that, to build the bridge so you can make sure you're okay, especially when markets are really good places financially. Go get that money and boost up the cash reserves. But if this is just the way it is, it's not a season, there's a bigger problem working under the surface here is that y 'all are spending everything that's coming in, and you've got to figure out how do we fix that because that's a bigger long-term problem because right now, if you're spending every dollar that comes in, every dollar, you make money, it goes right out the door.

48:18None of it lands on the net worth statement. None of it's going for long-term savings. None of it's going to the cash reserves. That's a problem. How do you, I mean, you're just going to keep bleeding out all your assets until before long. You can't catch back up. So that's why you have to be honest with yourself. Is this a season or is this just the way it is? if it's just the way it is, you've got a bigger problem, and that's when you have to start making big decisions like looking at your job. You have to look at the cars you drive, look at the house you live, look at where you live, and figure out activities, schools, all the things just to make sure that your lifestyle reflects where you really are in your financial world.

48:59Brian Preston:That's great. Thank you for the question, Jarrett. But, Reby, since it is Christmas season, we're here at the end of the year, any big Christmas wants in the Reby household? Anything big, like either your kids or you or John? Anything like, man, this is a big ask this year. Honestly, no. My kids are too little for it. So talk to me in a few years. How about you? This is really not. Like, we're just kind of excited about the Christmas spirit. Oh, yeah. We're in that nice pure of heart phase. In that sweet spot. No, my 10-year-old is asking for a cell phone, which we will not get. We are not doing, and that's not happening at least until she's 16.

49:47You can mark that down because I am very much against that for my 10-year-old.

49:51Brian Preston:And I don't know why. I don't know why. I think just because she heard that other kids older than her are starting to get that. Yeah, she's just seeing other kids. Absolutely not. 100 % hard pass on that. And my 8-year-old wants a hoverboard. I didn't even know they made those. That sounds cool. Is that a thing? I mean, is that just one of those ones with the single wheel? No. Like half the videos are people falling off. Yeah. I think she's confused. Is a hoverboard and a Segway? Those are different things, right? It's the two wheels that you kind of ride. Yeah, it's a Segway. So there's no handle on it, though.

50:20Brian Preston:It's a Segway, right? No, it's not. No, it's different. I mean, I'm sure Segway makes like a fancy one. Oh, you're talking about the one that looks like a skateboard with two wheels on the end? That's what she's talking about? I think so. Is that what you're saying? It's like a couple of times on a skateboard, but it's got things. It's something that you should just stay. If you're over the age of 30, do not get on this. They're the things with the two wheels on the side. No handles. You just stand on it. You're going to end up on AFV. But don't get on that. And yeah, there's lots of wipeout videos.

50:45Brian Preston:I won't get on a skateboard, bro. Are you kidding me? If you do, film it. Because I think they've gone beyond$10 ,000. He has no faith in you. But I don't think we're going to get that either. Yeah. Oh, wow. Yeah, there it is. That's what I was thinking of. Thank you. production to you. No way. My kid's eight. Is that... What's the age? She probably could do it. What's the age range for that? When are you supposed to get one of those? I'm not doing it for an eight-year-old. What about you? Anything in the Preston household? I told, because Thanksgiving I had a lot of family down to the Preston South location.

51:20And I loved it. I loved it. I got to cook a lot of breakfasts and I got to entertain people, make coffees. And so I want time more than I want stuff.

51:30Brian Preston:Look at that. So I like memories. And we're doing that for Christmas. As a matter of fact, I even showed you some text messages, you know, from when family's coming in town, and it's going to be really great. If we were going to dine in the Preston household and the money guy himself were making breakfast for us, what's he making? No, we do breakfast casseroles. Okay. And then we do some type of – Is it like eggs and sausage and that kind of stuff? Yeah, you put a layer of bread on the bottom of the casserole dish. You mix up the eggs with your spicy sausage. You're cooking it up? I mean, we do it as a family because you do this part of it the night before.

52:06Okay. That part's the day before. The day of is when you're just coordinating the logistics. Primarily, you're hanging out. You're making coffee for everybody, and then you've got to preheat the ovens, get the sweet rolls kind of rolled out and made, and then you put the casseroles in, You're kind of more of a logistics partner than you are a chef because you're just making sure everything comes out of the oven at the same time.

52:30Brian Preston:You heard it first here. Money Guy cookbook coming out in 2020. We'll leave that for Caleb. All breakfast casseroles. Does Caleb have a cookbook? Caleb Hammer has a cookbook. Does he have a cookbook? Oh, I think he does actually. We're not doing cookbooks. We'll leave that for him. That's awesome. That's really funny. Super funny. Want to do another question? Sure. All right. We've got one from Brad B. 1791, and it says, do you have any tips or recommendations on how to rebalance your asset allocation across multiple accounts? 401k, traditional, and Roth IRA for my spouse and I. For context, we're at 325k investable assets.

53:07Brian Preston:So here's what makes, for most accumulators, here's what makes rebalancing a little bit difficult. A lot of the accounts that you house, like a 401k or 403b or 457, you don't have unrestricted investment assets, access. Rather, you have to love the one you're with. You have a stable of investment options available to you that you have to choose from. And sometimes plans are really robust and really good and have a lot of diverse options. And sometimes they don't, and they're not great and they do make it difficult. And so I don't know what to talk about your unique and individual circumstance, Brad, but I imagine that's where some of the angst aligns, man.

53:44Brian Preston:Okay. I've got this 401k. I've got these accounts that I have limited options, but then I have this traditional in Roth where I have more options. How should I think about this? And there are ways to do that in different types of assets or taxed in different types of ways. But what I'm sort of caught by Brian here is not knowing Brad's specifics, just knowing he has about$325 ,000. I would even wonder, is he at the point, in your opinion, that it makes sense to go from like a generic generalized asset allocation to a more specific allocation, meaning I don't think it's crazy for Brad to think about a solution like a target retirement index fund or something along those lines.

54:24Even if it was like a three or four fund strategy, I wouldn't do things. At that level, I wouldn't do anything too fancy. Don't do what you think rich people do. Dance with the one that brought you there, and that's where index funds and that. I do think there's some value, though, to when you look at different assets or different investments in each of your different pots, you kind of hit on something. Like you look at your 401k, you might have a bunch of high cost mutual funds in there. And then you have one kind of like an index fund. It's like they, they labeled it something different, but it's, you know, all the other funds are like one, one percent or higher internal expenses.

55:05And then you got this one that's like 0.4%. Now, you know that index funds are basically free at 0.01, 0.02, but somehow in your 401k, the cheapest one is 0.4%, then you're probably going to want to go, you know, make the most of what is the best investment in that fund. And then if you're peeling, going out to the outer layers, what's the best location? You know, because different asset classes do better in taxable accounts versus tax deferred versus tax free and Roth. I would kind of look at those things if I was getting into it. But I think that those are all complexities that you might not have to get into unless you really feel like this is a skill set that you want to kind of invest in.

55:55I would rather you focus on the savings rate is so much more valuable. and a three to four fund strategy can work while you focus on getting more money into those accounts that much faster. Agreed.

56:10Brian Preston:Brad B. 1791, thank you so much for the question. All right, let's do one more from Cato. It says, is there ever a bad time to buy index funds? PE ratios are all-time highs and basic business fundamentals aren't being followed by many firms, while a few firms make up a huge percentage of the S &P. I'm going to steal a quote from Nick Murray Cato, and this is what Nick Murray said. He says, Cato, if you think the market's overvalued right now, if you think the market's high right now, wait till you see it in a decade. And the idea is that if you are an index fund investor, even if you invest at the world's worst time, I invest at the top of 2007, or I invest right before COVID, or I invest right before the dot-com bubble burst, or right at the end of 2021, whatever that is.

57:04Brian Preston:If you give yourself a long enough time horizon and you allow the money to work and you're consistently saving and investing, I don't think you have to worry about what is the price today. What's my entry point today? But rather, am I saving in the correct way moving into the future? because even if I'm overpaying now and even if PE is high now and even if S &P is highly concentrated now, odds are traditionally historically, the way the markets work, that five years from now, seven, eight, ten years from now, it's likely going to be higher because it is an ever-expanding pizza pie where innovation is continuing to happen, business and enterprise are continuing to take place, that likely, even if you're entering into it now, you're still going to be rewarded as a long-term investor.

57:53Brian Preston:So in my opinion, I don't think there is a bad time to buy index funds because that's why we always say always be buying. Hey, look, we have a new show coming out. I don't have the editorial calendar in front of me, so I don't know the release schedule. But it's financial rules that should be broken. And this ties into buy low, sell high. That's right. and we answered that when should you break this rule we say always is because I want to play this a different way Kato what if you're right what if we're at bad PE ratios what if you know yes a lot of the money on the index funds is layered market cap wise towards a lot of the AI companies what if you're right in the fact that that is the way things are right now what are you going to do are you just going to start stacking cash in the background or you go to a real estate, which is very non-passive.

58:49It's very active management, you know, and it's going to require leverage too. So what's the alternative? That's what I always ask people when they give me doomsday or they tell me why things are so bad. I'm always like, well, give me the counter. Let's work this out from the reverse engineered way. And usually you come to the point and it gets back to the same branch of the tree of where Bo was, is that in the long term, especially with an always be buying strategy, if you're buying in every month, this is all noise. And that's why when you heard Uncle Warren Buffett when his Berkshire Hathaway, he's used so many different examples.

59:26He's talked about farms. He's talked about, he's basically talking about inefficiency and prices pricing and why you have to just not let that noise throw you off with the, with the purpose of what you're doing is. And for most people, especially with an index fund, you're not trying to beat the market. You're trying to be the market because that's actually where the success is, is where we're going in the innovation and all the other things that Bo just said. I wouldn't get caught up in that. When people come to me with all this overvaluation and other things, I'm like, what are you doing? Every year is going to have a 14 % entry year switch.

1:00:05But even with that knowledge, I don't try to time it and catch it. I just ride the wave of always be buying. This is why I went from investing monthly to now investing weekly is because I'm like, well, heck, I'm going to at least catch the wave every week. So that's how I've countered this because I really have taken always be buying to the nth degree and it's served me very well. And then I just saw a report and I don't know anything just like, be careful who you get in your head because when it comes to investing, There's a lot of people who act very confident, but they don't know anything either.

1:00:40But I saw somebody saying that published a whole key report that markets not overvalued in all these AI stocks is because if you keep seeing the earnings from NVIDIA and some of these others, you're like, holy cow. These guys keep making, I mean, is it overvalued when they keep expanding and making more money and this is where the world seems to keep pushing? We don't know. And that's why I like index funds is because we don't have to know. That's right. We just control what we control, which is our behavior. And yes, be aware, be worldly, be mindful of what's coming, but also know what you can control.

1:01:16And behaviorally, this is something that I think that you're going to be better served by just being consistent than trying to be perfect in your timing. That's great.

1:01:26Brian Preston:That's great. Thank you so much for asking these questions. every Tuesday here on the Money Guy show at 10 a.m. Central. We will be here to talk personal finance. And in the meantime, be sure to check out moneyguy.com and moneyguy.com slash resources in particular has tons of great calculators and downloads to help you continue the conversation. And like Brian pointed out, if there's a topic that you want to know about or an episode you want to look up, go ahead and search for it. And you should be able to find what you're looking for. And we are continuing to just improve that process and hopefully make your financial life just that much easier.

1:02:00Brian Preston:So be sure to check out moneyguy.com. So you guys, I've tried to figure out how many different ways I can say we are so appreciative for how much you give us. I feel like it is agape love where it's undeserved love. And I feel like that's our audience. Definitely you load us up with more than we deserve. And hopefully we try to pay it forward. We really do. I mean, this show started with a pure heart to be an educator. I mean, I didn't even realize this was a business idea when we originally started doing episodes. I just wanted to be a school teacher and help people. And then this thing has taken on a life of its own.

1:02:40And we don't take any of that for granted. And it just means the world to us that the platform keeps growing upon itself. More of you guys keep showing up. And we're along for the ride. and we're going to keep sharing our heart, keep sharing our knowledge so you can understand that there is a better way to do money. And hopefully it's making your life better, making your family's life better. And we're hopeful and very happy to see 2026 come through the threshold any day now. I mean, we're so close, but thank you, thank you for all the support. And I'm wishing you and your family a prosperous new year.

1:03:17Money Guy team, out.

1:03:18Brian 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.

1:03:47Brian Preston:All investments involve a degree of risk, including the risk of loss.