This 401(k) Trend is ABSOLUTELY DEVASTATING (And Getting Worse)

20:47And whenever we're in content meetings with Rebe, she is guilty of also. Okay, not whenever. It just happens to me from time to time. I am the opposite. I am like fully charged. You know, it's like I'm not worried about battery life. You know, we'll just go buy a new product before we worry about the whole battery life. But today, you know, we're in the final countdown.

21:05Brian Preston:So you drive a battery-powered automobile, right? How low will you let that? When I was growing up with my grandparents, my grandpa never let it get below half a tank. If it was half a tank, he was about to run out of gas. We'd always fill up at half a tank. You do that with the Tesla? No, what I do is I'll charge it up to 80%, and then that will last like three or four days. When it gets down to like 35%, 40%, I'll plug it in at night, and then it's back to 80%, good for another three or four days. What's the lowest you've ever let it get? Actually, you were in the car with me when we went to Kentucky.

21:41We went to Kentucky. And there was supposed to have been a destination charger at the hotel. And we pulled up to the destination charger. There were destination chargers there. But when we plugged them in the car, they had zero power to them. You know, they had cut the power to these things. So they were not working. So we did our speech in Kentucky at Murray State. And then we held our breath. And I think it got down to, it was one or two percent. You know, it was scary.

22:07Brian Preston:We have another fellow friend content creator here in town. They actually broke down the side of the road. Remember that? Remember that story? I don't know if that's called breaking down, but yes. He ran out of juice on the side of the road. That's as broke down as you can get in an electric car. You guys are funny. We made it, though. And there was. What was the name of that restaurant we ate at? The restaurant? It was a ripoff of Waffle House, but it was. Oh, the American Diner. Isn't that what it was? It was pretty awesome. We were not there. The American Diner. That was all you. Out of this world.

22:38Instead of you having to choose between grits and hash browns. They just give it all to you. It was an and. It wasn't or. It was and. You get both. I think you also got sausage and bacon. I mean, it was like everything. It was so good. All right. We're going to go on to the next question. It's from OG Laminated Foo. I think we've got a charger for Brian, so nobody panic. We will make sure he stays fully charged and able to answer your questions. But the question from OG Laminated Foo says, I'm a 24-year-old college student preparing a speech for my classmates on financial literacy and the power of compound growth.

23:19What message would you focus on to actually help change their futures? Speaking of changing the lives of the next generation, Beau, what would you say?

23:31Brian Preston:Okay, so the number one thing that I would try to get across, because whenever I give a speech or a talk, I always want to think about when the audience leaves, what are the small nuggets I want them to take? I'll generally have like a big nugget that I want them to take and then a few little like small nuggets I want them to take. In this particular case, OG, the big nugget I would want them to take away at 24 years old is just do something. You don't have to do everything right. You don't have to do all the things right. You ain't got to get every decision perfect. But if you can just start doing something, the 24-year-old that starts doing something, even if it's not perfect, is going to be way better off than the person who waits until 30 and does everything perfect just because time matters that much.

24:14Brian Preston:So I would just get the idea across. Hey, if it's 20 bucks a month, 40 bucks a month, 50, whatever the number is, just start doing something to begin saving for the future. I would remind them of the three ingredients to wealth. There's your presentation is because you have to. Nobody builds wealth if you can't get component and ingredient number one discipline. You have to live on less than you make. If you can live on less than you make, that creates margin, which leads to having money, which is ingredient number two. And if you put that money to work with enough time, the most valuable of your wealth-building ingredients is that magical component of time, especially for somebody in their 20s, is because you realize that compounding interest and compounding growth really is the eighth wonder of the world.

25:01And it's magical because your money can truly work harder than you can with your back, your brains, brain, or in hand. Back, your brains, and your hands. You know, only Bo has multiple brains that work as fast as his brain does. But I'm like, we're working at like 40, 30 percent, and we're hoping that it's enough to pull us through. You guys are funny. Thank you, OG Laminated Foo, for the question and the username. Crisis averted, by the way. Remarkable. Remarkable, by the way. I thought it would show a charge sign, but now I'm just seeing the number going up. It's like, you know, some things come into life.

25:38That's good. That's good. I'm glad to hear it. Well, hey, before we dive into our next question, submit your rapid-fire questions. Drop them in the live chat. Put RF at the beginning of the question so we know that you want them to answer it in 30 seconds or less. I do have a little twist for it today, so we're going to try that. So stay tuned. We'll do a question or two more. That's probably why she was in the office. Rapid-fire. Instead of sitting in that early content meeting, she was in there. What's the twist? You'll find out when we start the rapid-fire segment. Probably hammering in spikes on whatever weapons she has.

26:08It's just a little twist, but I think you'll like it.

26:10Brian Preston:What would you do if she actually brought up the shot collar? She's like, hey, we ordered this off the Amazon. It has been discussed. I mean, I'm the one that put on the sunglasses last week and the mullet. I feel like Brian is down for an adventure. After that show, we both donned the mullet and the other accoutrements. Did we put that on socials, Matt? Was that out on social? Yeah, so if you're not on socials, you're not subscribed. You miss out on all those little extras. Our Saturday newsletter has some great behind-the-scenes stuff and all of our awesome financial content. I love that. Social media, they put out the Sexiest Man Alive with me and a mullet.

26:48It is now the picture of one of my group threads. Oh, yes. I love that. I go on a golf trip once a year with all my neighbors from Georgia. I love that trip. It's coming up in like a week and a half, two weeks. But now that's what they're totally picking up. The memes are strong with our marketing team.

27:06Brian Preston:Brian, I love being a business owner, but I think people underestimate how fast things move from I've got an idea to, all right, now we actually have to build this thing. That's right. The idea is the fun part, but then you've got logistics, operations, marketing, all the stuff that actually makes the business run and work. And that part can really slow you down and it might even keep you from starting at all. Exactly, which is why having the right tools and the right partner can make all the difference. That's where Shopify comes in. Shopify is the commerce platform behind millions of businesses around the world and 10 % of all e-commerce in the U.S., from startups to popular brands like Chubbies and Allbirds.

27:46And they really make it simple. You can create a clean, professional online store with ready-to-use templates, and their AI tools help handle things like product descriptions and even improving your images.

27:56Brian Preston:They make it easy to build your brand, but they can also help you grow. Their email and social media tools can help you get your brand in front of the right customers. And everything works together, so you're not bouncing between a bunch of tools on different platforms. You've got inventory, payments, analytics, everything's all in one place, making your life easier and your business runs smoother. That's huge, because it means you can spend more time focusing on the big picture and less time getting stuck in the weeds. That's how you actually build something that lasts. Start your business today with the industry's best business partner, Shopify.

28:31and start hearing. Sign up for your$1 per month trial at shopify.com slash money guy.

28:39Brian Preston:Go to shopify.com slash money guy. That's shopify.com slash money guy. All right, let's go to Seth McFoo's question. Lots of good usernames today. He says, I'm starting a document for my wife with everything she will need to know if I pass, like life insurance, accounts, et cetera. Any suggestions for how to structure this? What should I include? We're 30 years old in the messy middle with all caps. I think you guys have a lot to say about this. It's funny, Bo. You and I just had a conversation about some of this yesterday. I'll tell you, Seth, one of the things that has been great for, of course, let me start off with level set foundational.

29:18Do a net worth statement. Boom. Net worth statement is going to be magical as a communication tool because it also leaves behind the breadcrumbs of what you have. Now, let's get into the nuts and bolts of how you get access beyond your life if you just so needed to. We use a password manager, my wife and I do. And I wanted to make sure she could get into all of our primary accounts if something should happen to me. And the thing is, everybody's now using two-factor or multi-factor. And she was like, well, how am I going to get into like, think about your custodian or think about your bank. What I have found, both my bank and my primary custodian allowed me to add my wife's phone number in addition to my phone number for security purposes.

30:08So now if she was trying to use the password manager to get into the account, we've actually added that to where she is not going to be kicked out because she couldn't pass the multi-factor.

30:19Brian Preston:Yeah, I don't have a ton to add to that because we'll do the exact same thing. I do a net worth statement. I want to list out all the stuff that we own, all the assets, all the liabilities. I also put on there where they are, so I don't just have like Roth IRA. I've got like Fidelity Roth IRA, and I'll even put like the last four of the account numbers. So if she's trying to shuffle through account statements or whatever, I want her to have some sort of identifying information to be able to find, okay, this is where the checking – and that's all about the institutions we use. Where do we bank?

30:50Brian Preston:Where's our checking account? account where uh where are investment accounts life insurance where's the actual life insurance policy where's the digital record of that and then i also go through with her hey i get hit by a bus who are the first phone calls you're going to make right like that's just something i want her to know hey something happens to me number one very first phone call call brian all right once you call brian then i kind of work through the you know down that list and i think it's just more because i am the one who who navigates the majority of our financial life and when we make decisions together, but I'm kind of like the implementer, if you will.

31:24Brian Preston:I want her to know how she can get to and get access to everything that she's going to need. And so I just put it on, and it's actually all on the network statement and then all in the footnotes page. So she has all that information in one place. And then I go over like any, you know, we also use a password manager, but also stuff like, you know, safes and that kind of stuff. Like I make sure she understands how do I get in there? What do I need to know? Where are the documents housed? All those parts and pieces. Yeah, that's why. And by the way, if you're like, oh my gosh, I don't even know where to start with a net worth statement.

31:55We have a free one. If you go to moneyguy.com slash resources, we do have a free one. And if you want the same one Bo and I use, if you go to learn.moneyguy.com, we actually have a net worth tool. And don't skip out on the footnote page because that's where you lay out all the life insurance, the kids' accounts, and all the other things that Bo was covering. And I even, And we have a section where I have people we work with, and that can be your life insurance agent. It can be your property and casualty insurance agent. It can be your CPA. It can be your attorney that did all the estate documents for you.

32:27That stuff is very helpful so that you're leaving behind breadcrumbs. And then I always tell people this is more so if you got stuck with a situation where you just don't know what somebody had and they passed away. Tax returns are a great forensic tool to go figure out where all the financial resources and assets are as well. But that's kind of when you're left holding the bag on something. This is I'd rather you be proactive so that you can get into the accounts, you know what's going on, and everybody has peace of mind.

32:58Brian Preston:Another silly one, and this happened this past year, not only because I'm helping out a client who unfortunately lost her spouse. And one of the things that she's, it's like, we pay off all of our credit cards, and I kind of knew, like, the ones that I used, but I didn't know all the credit cards. Like, all the different companies I need to reach out to and stuff that was in his name and in the business name. So I just started kind of keeping an inventory. Hey, just so you know, sweetheart, this is all the stuff that we're attached to, right? Like, so again, if something happens, these are all the places you need to go to know to look for stuff.

33:28Did you do that under the liability, like, even if you're paying your credit cards off, or did you put that under footnotes?

33:33Brian Preston:I did it in footnotes because I didn't want to, like, clutter up my network. Plus, you're paying it off monthly. That's right. Because actually, that's something I probably need to add to mine. I don't have that on there, and that's smart. That is smart. And yeah, I agree. It's not really a liability if you're not carrying that. The password manager would hopefully help on that a little bit just because I've labeled stuff in the share file. It's more I just wanted to know. Like, hey, okay, there's five credit cards. Yeah, those were great thoughts. Great questions, Seth McFu. Love that you're thinking through that and setting your household up for success.

34:04We'll do one more question and then dive into rapid fire. This question is from Tumblr Enthusiast. So everyone is really going for the usernames today. My wife and I, both 27, are in step five.

34:17Brian Preston:Let's go. An escrow shortage made our new payment 33 % of our gross income. Should we move on to step six or prepay principal to eliminate PMI and drop from 6.5 % to 5.75 %? All right, you got to let me think about this one a little bit. Well, let me while you're thinking about it. There's another variable that's also going in because we've even talked. There's several reasons housing's hard. Remember, we even have a show coming up that we're going to be releasing to help people kind of know how to navigate this in this unique time. But also because you're 27, and it's not uncommon that people stretch things when they're at the beginning of their career, especially like a house.

34:59I'd ask you, what's the opportunity that if you took three years of your upcoming income, if you levelized out your income, are you closer to 25 % then? Because I come from a public accounting background, so my pay went from apprenticeship where I was not making a lot of money, and then I started getting big jumps when I got my certifications and other things. I'd be curious if you have something in your career that's going to help minimize this because of upcoming income. And then I'd ask for other things that might, in the current situation, mitigate the situation. It's like if you live in a high-cost-of-living area, but you have great public transportation, and so you don't have the 8 % that most people have on 23-8 going to a car loan, that can help get you through, give you a little grace on this as well.

35:48But I will tell you that if you go through that exercise and you don't have it, we've got a bigger problem then.

35:54Brian Preston:Yeah, one, at 6.5 % or 5.75%, either one of those I don't consider high interest debt. That's not really part of the question. I just want to throw that on there for a home. I don't consider that to be high interest debt. I am a little curious, assuming that your mortgage payment was inside of 25%, the escrow adjustment, jumping it up 8 % seems significant. So I'd want to really dive into what was it that changed? And perhaps your insurance got a whole lot more expensive and more expensive insurance caused the escrow underfunding. So I may want to go shop my homeowner's insurance and say, okay, man, what happened?

36:30Brian Preston:Why was that the case? I did this for myself recently the last two years. I went and shopped all my property and casualty insurance, and I was able to save thousands of dollars a year by shopping my insurance. And as a result of that, because my homeowner's was part of it, when I got my escrow notice, I got a refund check for over escrow and my payment went down. So it was kind of a nice thing. If it went up because your property taxes went up a ton, I'd ask, okay, is that right? Is that accurate? Is that reasonable? Is that something that I should appeal? A lot of people don't realize this. If you feel like you have received an inaccurate, I don't want to say unfair, that's the wrong word to use, but an appraisal that does not match market, you can actually appeal the property tax record.

37:13Brian Preston:Say, hey, you said my house went up in value this much. I don't believe it did. This is what the tax rate should be. And I would try to dive into why it was such a significant increase year over year. And then exactly what Brian said, if it's unlikely I'm gonna get any reprieve there and my income will not grow to the situation where it's affordable, now I got to begin to make some decisions. Yeah. Those were great thoughts. Tumblr enthusiast, thank you for the question. All right. We are going to dive into our rapid fire segment. Remember the rules are Bo and Brian have a combined 30 seconds to answer your question, and they cannot use the phrase, it depends, or any similar phrases, or their time is canceled.

37:55Brian Preston:Both of our times or one of our times, Reby? Just asking for the audience. We will make the statement that it is both of your times. If one of you says it depends, you lose the opportunity to answer. Reby, I just want you to know I appreciate being your favorite. I bet you do. Thanks, Brian. Thanks. an added twist if you can work in a dad joke into your answer goodness since Brian started us off strong if you can do a pun a dad joke any kind of joke you get 10 points and whoever has the most points at the end of the round wins it's going to be hard enough to do it in 30 seconds but now we've got to add humor into it I'm up for the challenge let's just see what happens alright and remember at the end we will let you have our maybe it does depend segment where you can, you know, bellyache, explain, whatever you need to say that you didn't get to say.

38:49I will give you that. All right, ready to dive in? I'll read the first question, and then 30 seconds will be on the clock. First question, have you guys ever second-guessed the order of the Foo? If so, which step was it and why? And if not, why? I mean, mortgage debt has been the hardest thing recently just because when we saw interest rates go up to 7%, that was one of those things like, ee, that hurts a little bit. But then Bo and I had a conversation, and I felt very comfortable that, no, we don't consider mortgage debt even as higher debt because you can have the option to refinance.

39:27Brian Preston:We struggled a little bit early on. How do you prioritize Roth versus HSA? Are those different parts of the FU? And we just decided, no, no, let's just put them all in the same bucket. Nicely done. Next question. Why is ESPP in step two? Where was the dad joke? I didn't have one. So far, no one has done it. I'm 0 for 0 now. You're both at zero points. Here's the next question. Why is ESPP in step two? Wouldn't it be bad if the stock went down below the 15 % stock discount? I can put 15 % of my pay into this, but it would block a lot of other of my savings. What do you think? Why is ESPP in step two?

40:08Remember, it's usually on a lot of these ESPPs, it's the lower of the beginning of the quarter and the end of the quarter. So if it went down 15%, you'd probably be the beneficiary of the lower purchase price. And then remember, don't do oof. That's not a very good dad joke. Do foo in the fact that we want you to have a process to where you're actually turning that money into other investments. Oh, did I take it all? But we're so sad. I am so sorry, Bo. I am so sorry. Team, does he get credit for that dad joke? Did we get enough? Did we get the full dad joke? Yes? Okay, we're getting that. Brian gets 10 points.

40:49Can we get him over 30 seconds? Can we get him 15? Oh, y 'all are mean. What do you mean mean? You're a mean frog at the time. I was like, alright, we're at 20. You're answering the next one first. You can take as much time as you want. Alright, next question. I am 25 years old and recently got married. I have two times my income in life insurance through work, but should I be looking at a term policy as well?

41:19Brian Preston:Oftentimes, yes. A good rule of thumb is that you should have 10 times your annual income in term life insurance coverage. Again, that's a rule of thumb. It's not like a hard, fast rule, but that's a good place to start. so let me go ahead and give you the secret to marriage yes ma 'am

41:43that was my dad joke it's bad when you have to label your comedy I thought he was going to bring it back to life insurance but that did not happen zero points for that one but I really respect the effort thank you for playing along next question what is your favorite step of the foo and why I like step five I like the tax free growth and I like when I wrote millionaire mission the Armageddon reference at the beginning of the chapter

42:19Brian Preston:step seven do you know why step nine is afraid of step seven why because seven eight nine nicely done Your brain is amazing. That is beautiful. Ten points for Bo. Oh, that is brilliant. All right, next question. This is why you're a CFA. Hi, team. I have access to both a 403B and a 457B. After capturing my employer match, how should I prioritize contributions? How does the 457B that has a Roth option change the three-bucket strategy? I would without saying the bad D word I would go 457 because you can get access to it before you know it doesn't have an early withdrawal age to it and often times 403B's also have Roth options so I'd want to see did my 457 and 403B both have Roth options but holding them side by side I would err towards the 457 as well because you get access earlier we didn't get to put a dad joke and the only thing i would yeah that one i might need to put and say a little bit more all right we'll make a note next question do you see yourself ever signing up for a prediction market for entertainment purposes only of course the only way i had i had an associate show me the arbitrage that you can run on these things but when I find out how quick the providers jump in and limit your bets when they realize that you're running systems, no.

43:55Brian Preston:Prediction markets, it's more like gambling. I don't see it a whole lot different than going to the casino and doing that sort of thing. So that's something that you get utility out of, and it's not causing you to go in a bad direction. That's fine, but it's not for me. Nice, succinct answers. We didn't have the time to put a dad joke in there. He was trying. Brian, I feel like at the very end, he's like, two seconds. What joke can I add? All right. Next question. What are your thoughts on investing$500 ,000 from a 401k fund in a private real estate fund? I still have$1.5 million left in a 401k.

44:35Brian Preston:Investing the 401k assets in a private real estate fund? Yes. there's a lot of nuance there because when you're using qualified assets and you try to invest in private equity there are some unique things that take place the nuance I really should flag you for that personal finance is personal we'll leave the porch light on for you nice he was basically like I don't know go to aboutwell.com they'll tell you I love that alright next question if I want to buy a house in the next five years what's the best place to put the down payment and why

45:21well you know it's better to attract bees with honey nevermind this joke thing is not working out for me

45:31Brian Preston:cash is king for expenses that are going to happen inside the next five years. If you're 60 months in, I think building up in liquid cash for known expenses is likely the best decision. Why did chicken cross the road? Get the other side. The dad joke is killing me. This is not what I wanted to... When we brainstormed all the ways we could make this more fun... I think he got 10 points. That was a joke. That I could study up on. 10 points for Brian. That's horrible. I should not get those 10 points. You know what? Maybe next time we'll tighten up the rules. All right, last one. If you have the full cost for a house, should you put 20 % down and invest the rest or pay in full and invest the would-be mortgage payment?

46:22Brian Preston:Mathematically, you will come out better investing the larger balance earlier because it has longer time to grow. If you're just going to pay it in full and then invest the monthly payment, it's going to be hard for that monthly payment to ever catch the lump sum that you invested. Since I can't use the D word, if you're under 45, finance it. If you're over 45, pay cash. All right. All right. That concludes our It Does Not Depend rapid fire segment. We are, honestly, you guys came very close. I probably should have flagged your dancing around. It depends. But I'm going to give you some grace today.

47:01I don't know why. Just feeling nice.

47:03Brian Preston:Speaking of dancing. You know how to make a Kleenex dance? I do. Do you? Put a little bug? You put a little boogie in it.

47:15Unfortunately, that does not count towards your point because it was not in an answer. I love it because we did not feel like we did not have a lot of... I don't have a lot of dad jokes in me. I really liked seeing you try, though, which was the point. Honestly, seeing you try was probably my favorite part. I will say Brian did win with 20 points while Mo had 10. I watched when I was on my last spring training old man trip with my buddies. We watched some fighting at the end of the night on one of the channels. And I watched this boxer. The other guy was a better boxer, but this guy understood the rules.

47:47And every time they'd lock up, he was over there just barely tapping him on the face. He ended up winning because his punch rate and his accuracy or percentage was higher. I feel like that's all I did. I was the guy who was every time we lock up, I wasn't really getting any shots in. Nobody thought I was funny, but I was playing the game. You did play the game, and I appreciate that. All right, there were a couple that you said you wanted to come back to in our maybe-it-does-depend segment. Question two, Bo, you didn't get to answer, so I will give you a chance. It was about why are ESPPs in step two?

48:19I wonder why you didn't. You must have passed out.

48:20Brian Preston:So ESPPs don't all operate the same. You said, oh, well, what if the stock goes down 15 % of value? A lot of folks will choose to invest in their ESPP. They will take advantage of the 15 % discount, buy the stock. They will immediately then go sell. Now, that's going to be a short-term capital gain. You have to pay ordinary income tax on the discount element, plus on any gain that exists. But even doing that, you're coming out ahead. Because remember, it was free money. It was 15%. You pay ordinary income tax on the 50%. You're still net positive. I do see if you have a plan where you have to hold the ESPP for a year, you have to hold it for 18 months, there could be some risk there, and you have to kind of assess that on your own.

49:03Brian Preston:But if you have the ability to just liquidate automatically, I'm not as concerned about the stock price because I know right off the jump, I'm going to be in the black. The other one that was question number four, I think is the 403B and 457B. Sometimes your employer will structure it to where the match will be associated with the 403B, and then the 457 is kind of an additional add-on plan. So that's why if you have match, free money from your employer, get in there and get that free money, and then you might want to consider switching over to the 457. But that wasn't put into the way the question was asked.

49:39That's the it depends is because I don't want you to miss out on the dollar-for-dollar match from the employer just so you get into the better structure for early access of the 457. Yeah, good thoughts. We did have a couple at the end. While we don't give specific investment advice, there was a lot there that really did depend, right? The 20 % down or invest with investing or put the full, anything you want to say about that one?

50:03Brian Preston:Yeah, that one was hard. Okay, so mathematically, if I had a million dollars, not a million,$100 ,000 to invest a day or$500 to invest every month, it's going to be really hard for that$500 a month to catch that$100 ,000 invested. So mathematically, that likely makes the most sense. However, if you're at the stage and season in life, We do want to factor in risk and overall financial goals. If you are near retirement towards the end of your accumulation journey, you have this big portfolio already built up, there's nothing wrong with paying cash for houses. We have clients do this all the time.

50:37Brian Preston:They'll retire or think about relocating. They'll sell a house, and then they'll go to buy a house in another place. We don't say, hey, put 20 % down and finance 80 % and invest that. We say, no, no, pay cash for the house, but it's very much situationally dependent on where you are and what your ultimate financial goals are. If you'll visualize the journey to wealth building, is that say from age 20 to 45 is the make wealth phase, and then from 45 all the way to when you land the plane for retirement is the maintain wealth phase. The thing that people miss out on, if somebody came into a windfall of half a million dollars, like this example laid out, and you put it all into the house, and then your behavior never started creating your army of dollar bills, you didn't really make the wealth.

51:24You kind of went and bought a house and then how are you going to live off that money when you actually reach retirement is that you have to sell the house. And a lot of people, we're trying to take away as many variabilities and things that you have to make hard decisions when you get close to retirement because hopefully you're getting rewarded for the good decisions you made at a much younger age. So that's why I like for a young person, let's build your army of dollars so you actually make the wealth. It's not assured. So many Americans never actually build the wealth. Now, if you're getting this and you came into this$500 ,000 and you're 50 years of age, think, yeah, let's de-risk this thing.

52:05You're probably at a good place. Pay cash for it at that point because also the wealth multiplier is much lower. The opportunity cost is so much lower from a risk standpoint. That's the thing that drives me crazy is when I find out 30-year-olds aren't funding their Roth IRAs, aren't maxing out their 401ks, but they pay cash for a house? Okay, that's great. But man, oh man, look at what that could have become in the long term. And you think that you've de-risked, but there's still a risk. The risk is you never built wealth.

52:35Brian Preston:That's right. That's the thing that I think is never taken into account. I understand what risk is, but there's a balancing act on also making sure you build wealth in the background so your army of dollars and you can actually own your time that much sooner. This is why I don't do good on rapid fire. That was probably two and a half minutes. That's all right. On a 30 second question. Hey, you answered the question. People want to know. And then the last one that I had was the person with$2 million in their 401k. We definitely would, that would depend. I would want to custom look at your financial plan, Monte Carlo simulation, look at all your goals and then tell you if, and then I want to do the due diligence to find out.

53:15Brian Preston:Yeah, not all private placements are created equal. I mean, some of them are good, some of them, but a lot of them aren't. You know, a lot of people are sold off the sexy sizzle of this is what rich people do. I need to do some due diligence. How much of the managing partners or the general partners, their money is in the deal? How much of their mom's money is in the deal? There's all kind of questions I go into. And what's the percentage cost that they're charging on annual operating? There's all kind of things. And then how does that fit into your own personal goals? That's good stuff. That's why you guys are so good at what you do.

53:48I like it. All right. We do have time for at least one, maybe two more questions. So are you ready to dive in?

53:54Brian Preston:Can I share one thing? You can. You know what's really hard about dad jokes? My kids and I, or my family, we want to – See, this is why Bo had a head start on me. He has books. That's why I was going with this. My family went on this vacation, right, just like us, a little state park. It was awesome. It was wonderful. and we ate at Cracker Barrel because we're awesome and at Cracker Barrel there was a joke of dad books right there and my kids were like dad, dad, dad we want to get all these candy I'm like no candy but they're like dad we'll get this and I'm like alright we'll get the joke book and so we got it and I love a good joke I love dad jokes and they're fantastic my kids also love reading them and they don't listen to the show so this won't hurt their feelings they are horrible at delivering so do you know how bad it is like when they'll like read the joke and they'll say the punchline, but they kind of say it wrong.

54:45Brian Preston:And then I connect the dot with the punchline was supposed to be. And then I'm just sad because they missed a huge opportunity to deliver the joke. We did this all the way from Kentucky to Tennessee. That part was just, that part was for free. That's what you're supposed to teach. They're practicing. I know. I did. Sound and flexion. Your voice. Believe me. This is the mentorship. I know. That was what we're ready for. Guys, let's try it again. That's 7-8-9. That was dino-mich. That was actually really good. I was impressed. I was like, oh, not worthy. I was really impressed with that because it fit within the financial order of operations, too.

55:21Right. It was good. I mean, Bo only took one swing, but it was a good one. Hey, I've done no tangents today. Can I give one tangent? I wore this shirt on purpose because it is Master's Week. Oh, it is Master's Week. I get very excited about Master's Week. So, I don't know. That was my tangent.

55:37Brian Preston:That's the shortest tangent you've ever gone on is that I'm excited for Master's Week. week. You're allowed to say that. I love that. Great. All right. Let's go to another question. Guys, we've got another good username. It says, what's up, Foo? That's who's asking this question. It says, I'm sorry. What was the username? I missed that, Ruby. What's up, Foo? I just like the way she delivered it. That was kind of, she was, she was. Are you going to coach me on my delivery? No, no, no. He was awesome. I was actually a fan. Okay. Let's get to the question. It says, I'm 35. I have about 40 % of my investable assets in an old employer 401k.

56:10If I move it to my new 401k, the money will be uninvested for about a week. Don't like that. How do you think about this?

56:20Brian Preston:Yeah, this happens sometimes. Sometimes when we move assets, companies will require you to liquidate, cut a check, mail a check, check gets deposited, check gets reinvested. And I have clients ask me, hey, I'm so nervous about time out of the market. I'm so nervous. I'm so nervous. At the end of the day, it's a little bit of a coin toss. Because think about this. What if you sell today and the market's up? And over the next four days, the market goes down. And then you buy back in. You basically got some free return. You basically accidentally timed the market in the right way. Now, it could also go the other way.

56:51Brian Preston:You could sell today and the market's low. And then when you buy back in, the market's high. Hopefully, what you're hoping is that this does not happen in a week of extreme volatility. But by and large, even if that did happen, if you fast forward a year, three years, five years, 10 years, 20 years out into the future, it probably will not have mattered. Those four days probably will not have made a significant difference. So what's up, Fu, is I agree with Beau exactly. This is noise. This is not something. But now with that said, here's what you can do to set your mind at ease. I want you to completely research what the actual process is so then you can actually create contact points.

57:32If you know, okay, I'm going to have to place a trade to sell, and then, okay, how many days before the now the money, the check will be sent, you can then follow up. You can call back and say, okay, was the check cut on the day that you guys told? Okay, was it sent? And then you can expect, then when it's supposed to arrive, you can call to make sure that the receiving custodian actually received it. You can shepherd the process so that less stuff is likely to fall apart. That's what we do. That's one of the reasons. People are like, aren't you worried AI is going to take your job? I'm like, no.

58:05Have you seen how our admin team has to go shepherd transactions through? I think that element, plus all the government regulations and other stuff that goes with it, that part is going to be hard to just automate away. That's great. It doesn't mean they won't add tracking. There's definitely things that they could do, but having somebody call and go, hey, put my stuff to the front of the line is not going to go away.

58:31Brian Preston:And when in doubt, always, if you can, try to transfer assets in kind. A lot of times you can, hey, what I want to do is I want you to move. If I've got a 401k at Fidelity, I'm moving it to an IRA rollover at Fidelity. Oftentimes, if the investment options in there are publicly traded, it's not like pooled vehicles, They can do an in-kind transfer. Well, I owned S &P 500 over here. I can move it over here. It's just a much more efficient way to transfer. Whenever we bring on a new client and they have assets somewhere else, we transfer everything in kind that we can so that we can do the tax analysis to determine, okay, what's the appropriate way to diversify, to reallocate, whatever, understanding the tax consequences, but also minimizing that friction of actually being out of the market for any period of time.

59:17Brian Preston:So ask your provider if transferring assets in kind is an option. That's great. Good stuff. I think we have time for one more. Yeah, let's do it. One more. Let's do it. This one is from HomeReno238, and you will see why that is his username. 238 for Windows? If Windows will be$30 ,000 to$40 ,000, more than we would spend on a car and would last longer, can we use the 238 rule? I'm in step six and over$1.2 million saved under 40. Wow. He really like, I mean, he is making his case here. The 23-8 rule is normally for buying a car that you really just need for your family and you can't pay cash for.

1:00:00So what do you think about doing that for Windows? This is like you find out that, you know, apple and oranges are both fruit. So you're like, okay, since they're both fruit, I'll use the same. They're not the same. I mean, it's...

1:00:15Brian Preston:You can't make an orange pie? No, I'm trying to follow the analogy. I'm trying to follow the analogy. You can make an apple pie, but you can't make an orange pie. What I'm saying is that just because the$30 ,000 to$40 ,000 is similar to the purchase price of a car, it's a different transaction. Even though it looks like it, they're both transactions about the same size. But I love the... You're essentially a financial mutant creating games or systems to pay this off in a reasonable time. You've built$1.2 million and you're under 40 years of age. You do whatever you want on paying for those windows.

1:00:49I mean, that's perfectly fine, especially if that's a communication tool with your significant other.

1:00:53Brian Preston:Yeah, I think that there's nothing wrong with financing home improvements, especially if there's energy improvements like windows and that sort of thing. It's not like you're putting in a pool or something like that. So I don't think it's crazy. You can determine based on your own financial situation what's the appropriate way to finance that. Should I finance it over three years? Should I put 50 % down? How should I think about it? Nothing wrong with that. But I love the idea of you doing the improvement and paying it off quickly as opposed to dragging it out over the course of the rest of your mortgage.

1:01:23But don't expect to see a new slide on the Money Guy show with the 23.8 for windows.

1:01:30You heard it here first. There will not be an official rule for buying windows with leverage. Okay. Did I at least salvage the fruit analogy? No, no, no. I got it. I got what you were saying.

1:01:40Brian Preston:You know, Rebe helped me. I don't know if you heard it because I was kind of listening. I was listening with you this year and her with that year. She's like, you wouldn't say just because apples and oranges are fruit, you can make an apple pie using oranges. And like that, I kind of got that. It's funny you say it because marmalade is like my least favorite jelly. And that's a Southern thing that people always show up with marmalade. And I'm like, why would you put this and ruin toast with marmalade? Wow. Toast. You're writing words. Nah, we eat biscuits around here, brother. I know. What kind of Southerner are you?

1:02:07What are you doing? No, we're biscuits. You sop up stuff. I don't put jelly on my biscuits either because I'm using them to sop it up. Oh, man. Well, this has been fun. This has been a great live stream. Just because we turned the cameras off today does not mean the fun or the personal finance talk stop. Just go to moneyguy.com to see our full archive of content plus tons of free resources to help you continue the conversations. A special shout out to our brand new parenting resource, a guide to parenting for financial mutants. moneyguy.com slash resources where you can find that and more for free so be sure to check that out and we'll be back next Tuesday live at 10 a.m.

1:02:45Central here on YouTube and I want to thank the production team for helping me avoid crisis we got down to about 2 % on the battery, I'm happy to report we're sitting at 14 % so well done team, guys just like we pulled this thing up, we were flying it straight towards the ground, you can pull up your personal finances and live your best life with the financial order of operations. I'm your host, Brian, joined by Mr. Bo, the Money Guy team. 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.

1:03:29Abound Wealth Management does not render or offer to render personalized investment or tax advice through The Money Guy Show. The information provided is for informational purposes only, may not be suitable for all investors, and does not constitute financial, tax, investment, or legal advice. All investments involve a degree of risk, including the risk of the money.