Vanguard Predicts Market Collapse in 2026 (Are They Right?)

17:55Bo Hanson:And here's where these things have gotten even better. And I'm sorry to totally filibust this thing. No, no, you're doing great. Is that if you think about now you can use it for trade schools, you can use it K through 12. They've also used to be if you did it K through 12 for like private school and other things, it was capped at$10 ,000 a year. They just boosted it to$20 ,000 a year. So these things, and now even you can fund Roth IRAs when they first come out into the workforce with 529s. They've really created a lot of avenues that even if your kid's not traditionally college bound, you're going to be able to find use for this money.

18:29Bo Hanson:And then here's the catch all that even catches, you know, for later. If you think there's a chance you might have grandbabies, meaning your children will have kids, even if they don't go to college, there might be an opportunity to roll those assets over to even their own children or another family member. Pretty powerful stuff.

18:45Brian Preston:There's a lot more escape hatches than there used to be. And if you're thinking about this one, did William say how old his children were? Did he mention that? He did not. If you've got a really young kid, you're like, man, I just don't know how this is changing. There's nothing that says you have to do all of your savings in that vehicle. You can do both. It's an and instead of an or. Maybe figure out, okay, what's the lowest level I can fund to get the tax benefits? or maybe I just want to shoot for a 50 % of college or 75 % of college to come from the 529 and we'll make up the rest in the brokerage account.

19:16Brian Preston:There's nothing wrong with doing that. You have to determine, okay, what's the best way? But it's an incredibly efficient vehicle to save for that goal.

19:25Bo Hanson:I'm going to say something. This is probably not a great show, but we ought to do an and versus an or show. It's because there's so many concepts in the financial world. It's just like when we hear people talk about Roth IRA or your 401K. It's usually an and. But a lot of people ask questions. They're looking for either or. And we're like, no, it's and. That's probably not a great show.

19:47Brian Preston:Let's put that on the title list of really clickable titles. And or or. The and or show. The Money Guy and or show this week. Would you click on that show?

19:55Bo Hanson:I'm really good at kind of doing some of this stuff. Maybe I'm not the greatest for coming up with the next show idea.

20:01Brian Preston:No, I think you've got to get all the ideas out there, right? and then one-on-one's going to stick. Hey, there's no bad idea in content creation. They just don't all make it all the way out to the public.

20:09Bo Hanson:Oh, no. With YouTube, you quickly find out if it's a bad idea.

20:14Brian Preston:Well, William H., thank you so much for your question. We're going to do a few more questions, but in the meantime, let's prep for our rapid-fire segment. This is our It Does Not Depend rapid-fire segment. So if you would like to submit a question that Brian and Bo have to answer in under 60 seconds together. My least favorite section of the show. No. Oh, you don't mean that. Just drop your question in the chat. Make sure you put RF for rapid fire in front of it so we know that you want to be part of that segment. And then remember at the end of the segment, we will have a maybe it does depend segment where you guys get to hash out anything that was left unsaid by your rapid fire answers.

20:54Brian Preston:I love that. All right. So we'll be watching the chat.

20:57Bo Hanson:I was trying to think of something that Bo doesn't like to do that we can make him. The low lying fruit is swimming. Don't dare. No, but we're not going to go there because I do that too much. I pulled that one too much. I'm trying to think of what else we could pull that Bo's not good at. The problem is he's good at everything, so it just doesn't hold water. But I'm like, it's so unfair that part of why I think this appeals to everybody is they like seeing me squirm because I'm not good at it.

21:19Brian Preston:Literally, before you even got it out, Jake said, RF, that was Kimbo Swim. Like, he literally got that. You have planted this seed in the minds of our folks that I can. It's not. You guys can answer that very soon. It's more like a fact sharing. I can swim. I can swim. We should ask that and just hear you both in tandem. Brian goes, no. Bo says, yes. Next question. All right. Speaking of next question.

21:42Bo Hanson:If we ever do, you know how I always say, hey, if we hit like a million subscribers, we're going to do this. If we ever find the content team in the ocean together, we can test this. Probably. If we ever happen upon that scenario. Back when, this is pre-anybody, I think Bo's the only one other in the room. Bo and I, when we abound wealth, kind of started taking roots here in Tennessee. We went to the team and we said, hey, when we reach this asset under management level goal, I'm going to take everybody on a cruise.

22:14Brian Preston:We're going a big, firm cruise. You were a plus one on a cruise.

22:16Bo Hanson:And we quickly, we hit this goal. And I remember I was so excited. We're going to go on a firm cruise. And then I started, and there was only like five employees, six employees. It was not many of us. and so this wasn't even going to break the bank but I was so I went around and I quickly saw that the only people that wanted to go on a cruise together was me and and our spouses because everybody else was like oh we want we actually hit that number oh okay let me see if my calendar is open so I actually had to amend the giveaway and I was like okay would you rather I went and did a poll with our five or six employees at that time and I was like okay it's an all expense for you and your spouse to go on this cruise or I can give you an extra cash bonus.

22:59Bo Hanson:It was me, you, and Carol. And everybody else picked a bonus. It must have been more than five or six because it was me, you, and Carol wanting to go on the cruise. Everybody else took the cash option. It's a shame. And I've realized to never joke about that I was going to... So I don't want to know if the content team would want to go to the beach or not with us.

23:18Brian Preston:He just doesn't want to know. Because it would break my heart because I would like to go to the beach

23:23Bo Hanson:so we could not only, in addition, to spend time with the content team, we could do the exercise of throwing Bo out in the ocean. And I would be on ready. Don't worry. I would be able to get up behind him and save him and pull him in. But that's probably never going to happen. I think Reby would probably want to go to the beach with us.

23:41Brian Preston:He would go to the beach, yeah. Sounds fine. Cruise. Money guy cruise.

23:44Bo Hanson:I don't want to. Nobody else volunteer. I don't want to know. I do not want to know if you want to go to the beach with us because it might break my heart.

23:52Brian Preston:Oh, man. All right. Let's dive into Jacob's question next. It says, hey, my wife, who's 35, and I, 30, will make over$200 ,000 for household income for the first time this year. That's awesome. Which is, you know, a big milestone. At a young age, too. Mm-hmm.

24:06Bo Hanson:Go on, player.

24:09Brian Preston:Go on, player? Isn't it play on, player? Isn't that the way that's the question? I make up own stuff, Bo.

24:14Bo Hanson:I don't know. I don't know. My brain, it creates its own universe. Go on, player.

24:19Brian Preston:The next part of the question says. Don't hate the player.

24:21Bo Hanson:Hate the game.

24:25Bo Hanson:Okay, keep going. I'm sorry. So Jacob continues. Step all over your question.

24:29Brian Preston:We both work for a private company, I believe, giving us ESOP shares, ESOP shares. Can we still include the shares in the 25 % we can't buy in? Well, this is – okay, so what is your 25 % savings? savings, for us, it's the behavioral number that you're putting away, right? Like, so why do we want you to save 25 %? It's, hey, if I make$100,$1 ,000,$10 ,000,$100 ,000, I'm saving 25 % of that gross for the future. Now, you're in this situation where it sounds like your employer is gifting you ESOP shares. Now, not all ESOPs are created the same. And for those of you who don't know, this is a unique entity structure where all of the employees, or at least all the participants in the ESOP are actually owners of the company.

25:20Brian Preston:So it's an employee-owned company, and ESOP stands for Employee Stock Ownership Plan. Well, if you're just being gifted those shares, it's nothing behavioral that you're doing. And so can that be included on your net worth statement? Is that part of your overall net worth? Absolutely. But at a high income, at a$200 ,000 income, should that replace or take part in your 25 % savings rate? Brian, as I'm thinking through this, I think it's a lot like an employer match at that level. And what do we say about a employer match?

25:53Bo Hanson:I'm willing to go hard in the paint on that this is a twofer. By the way, Jacob, you guys, you just shared. You're across 200 ,000, and you all are young, 35 and 30. You have two big risks for you in the long-term future. First of all, because I saw this in the comments section over the weekend. Somebody goes, why is it$200 ,000 for married couples and$100 ,000 for a single individual on this 25 % where we get to count the employer versus not count? It's because of that social safety net. And realize the more success you have, the more responsibility falls on your shoulders. If you're a person, if you never make more than$80 ,000 a year as a household, as an individual, Social Security is going to probably pay you$20 ,000,$25 ,000,$30 ,000, depending on how much, where cost of living is at the time and inflation and so forth.

26:47Bo Hanson:That's going to cover a big chunk of your retirement, especially if you're only living on 60 % or 70 % of what you made. But for somebody who's making two, three, four, because you're assuming at y 'all's age, y 'all's income keeps going up. And you start, if you spend based upon what your income is, it's going to require a big pot of money to replace that. So that's one risk you have there is that you're far away from the social safety net. So you better be saving accordingly because you probably have bigger taste, bigger consumption. So you need to plan accordingly. The second thing I worry about with an ESOP is the viability of the company.

27:24Bo Hanson:Now, this could be huge for you, no different than Bo and I are small business owners. On our net worth statements, that potentially could look big, but the reality is we don't get to use that. It's not liquid yet. It's not liquid. It's kind of just something that's sitting out there. It's a cherry on top of your sundae. It's not necessarily promised to you. So I would worry because what happens, and we've seen this, by the way, where you have this every year you get an annual valuation or whatever, and it tells you how much this thing's worth. That might turn into something that creates even more financial success for you, but it might not.

28:01Bo Hanson:We've seen businesses that have collapsed, and then you don't get that valuation. And what if you were now counting that with your high income? You didn't save what you could have because you're like, ah, I got that ESOP just sitting over there. What if that didn't come out? You might have an, uh-oh, what do we do now? So that's why I consider this a twofer. You should definitely be trying to build up your 25 % of your gross income savings habit because you have two risks. You have that you're building up well beyond the social safety net. Number two is you're not promised that ESOP will turn into big money for you down the road, necessarily, if the company ever runs into any financial issues.

28:39Brian Preston:And if it does turn into big money and you have been saving, What that means for you is you have flexibility and options earlier in life. If you guys can begin saving that 25 % at 30 and 35, life's going to look really, really good in the 40s and 50s where you're going to be able to do what you want because you want to do it, not because you have to do it. And that's a fantastic place to be in.

29:00Bo Hanson:The big thing is it's okay. If you under-expect and you plan accordingly, then you get – because that's what I did. When I planned on retiring at 50 and now here I am beyond 50, I don't want to, it's not really a bragging as you get older beyond 50, but I love the additional flexibility. It's not hard for me to process. I get more flexibility and options. What I don't want you to do is start off poor. You build up some success, but then because of unfortunate things and not good planning, you go back to being poor. That hurts. I can tell you that that doesn't feel good whatsoever. So that's more of a risk than it is if you are over optimistic on your assumption planning and then you you find or you underestimate your assumptions and then you pleasantly get surprised that that's a better case study.

29:48Bo Hanson:Love it. Better planning objective.

29:51Brian Preston:Well, Jacob, thank you so much for the question. We appreciate it. We're going to do one more before our rapid fire. So, gosh, so I, you know, this is a show. This is you're he's putting on a show. You love this. You love the rapid fire. I know you do. I can see it. I can see your face.

30:08Bo Hanson:I love Tuesdays. I love show days. I woke up excited to come in here.

30:12Brian Preston:This may be the end of the rapid fire segment.

30:14Bo Hanson:I kind of blacked out on that this rapid fire is now becoming a weekly thing.

30:19Brian Preston:Oh, man. We actually have a fun addition to the rapid fire segment today, too. So if you're watching, stay tuned.

30:25Bo Hanson:Yeah, that's what we need.

30:26Brian Preston:All right, let's just do a normal Q &A question, though. Here we go. It's from HRJ7656. It says, Hi, Money Guy team. I'm 33 and work in the trades and will get a pension at retirement. This is my first year maxing out a Roth IRA as well. I've heard I should keep my age in bonds in the account. Should I follow this or go harder with stocks since my pension is very stable and well-funded in our union? That's what it means. Yeah, there's two things. Since you brought up the big one, I'll leave that one for you. you have to be careful on these rule of thumbs. Hey, when it comes to investing, my allocation should be X.

31:07Brian Preston:And you can hear, hey, I want to hold my age in fixed income or I want 100 minus my age in equities or fill in the blank on whatever metric you're using. You need to be really, really careful about that because if I were reviewing your portfolio, now not knowing your unique risk tolerance, your unique risk horizon, risk capacity, having an idea of your time horizon, but not knowing your other wealth, I don't know that I'm going to recommend a 33-year-old have 33 % of their assets in fixed income. That seems like way, way, way overly conservative to me, most likely. So I worry that if you keep 33 % of your assets in fixed income or in conservative investments, your wealth multiplier is not going to be what it could be.

31:52Brian Preston:And if you know what I'm talking about, go to moneyguide.com and slash resources. You can play with our wealth multiplier tool. And you can actually put in there your age and how much you're saving. Just think about that Roth IRA, that 7 ,500 that you're going to max out for the first time this year. And look at what that can turn into by the time that you get to age 65. Now, the wealth multiplier is precipitated upon the fact that that's going to be a growth type investment, a growth type asset. If you have 33 % of that in bonds or fixed income or CDs or cash or whatever, there's a really good chance that you're not going to recognize that.

32:29Brian Preston:and that's probably going to be overly conservative for where you're at. But, Brian, you bring up another point. Just based on the type of account, that has to factor in also.

32:37Bo Hanson:Yeah, I mean, there's two things that hit me hard on this. I think about a lot of my early career when I started my first financial company was I had a lot of educators that were clients. And now I've worked with these people for 20-plus years, and I've gotten to experience what it's like to work with all these educators in their retirement years. And what's amazing to me is that for a lot of these educators, they don't spend a lot of money. I mean, they have very low expenses. And then a lot of them went and worked in the central office. And a lot of those formulas, it's the last three, your highest three years.

33:13Bo Hanson:So their pensions cover 85 % to 100 % of their retirement and living expenses. So we found out we never even really touched their financial assets. You're crazy if you don't take into these type of things exactly what you brought up with the question, your cash levels or your pension levels, because those might be able to offset and act as the conservative side of your investment portfolio. So that's the first thing, because I will confirm that you're right to even think about that. But the second thing is what Bo is alluding to that ties into Roth accounts, the superpower of them is they grow completely tax-free.

33:56Bo Hanson:So if you think about the decades that you're going to have compounding growth working for you, the fact that they're growing completely tax-free is something that you ought to maximize. That's why I always, you know, when I talk about in Millionaire Mission, you want growth assets in your Roth IRA because you want to stick it to the man legally as much as possible to grow that. Now, you don't want to be so aggressive that you potentially could lose the money because it's not a place for speculative investing, but it is definitely a place that you want to maximize growth opportunities. So I don't know that I would recommend putting such a high level of conservative assets in the Roth.

34:35Bo Hanson:When we talk about the three-bucket strategy, you're going to have after-tax assets, tax-deferred assets, and then you're going to have tax-free assets. When you put together your own personal jigsaw puzzle of your allocations by different account structures, you're probably going to put your aggressive stuff in those Roth accounts. And you're going to put your conservative stuff in that tax-deferred account because you're going to already pay ordinary income taxes when you pull that money out anyway. So let's go ahead and put conservative stuff in there. It's going to be taxes, ordinary income.

35:05Bo Hanson:So that way they work together. As you can quickly see, even if we give you all the detailed pieces, this gets complex really quick. That's why I always tell clients your hardest years are typically those retirement years as you're trying to figure out how we use the money in the three bucket strategy. When you get to that level of complexity, that's where we leave the porch light on so you can consider taking the relationship to the next level.

35:26Brian Preston:And then just one last thing I'll throw in there is you're thinking about your allocation. This is your first year maxing out your Roth IRA, and you're kind of caught up on how do I allocate, what do I do, where should I put it. This is one of the reasons why we love target retirement index funds. Because at your age, if you pick a long-dated target fund, 2060, 2065, you kind of figure out which one makes sense. The vast majority of that target retirement index fund is going to be on the equity side anyways, and it's going to do the natural allocating for you so you don't have to overcomplicate it.

36:00Brian Preston:You just got to answer two questions. When do I think I might need this money? When am I going to retire? Or when am I going to turn 59 and a half for a Roth? And then how much can I save? You focus on those things and let the market do its job of allowing compound interest to be the wind at your sails. Wind at your back. The wind in your sails at your back. He's like warming up, physically getting ready for the intense sprint of the rapid fire segment. And he's right to be doing that because it is time for our It Does Not Depend rapid fire segment where Brian and Bo will answer your questions in 60 seconds or less.

36:40Brian Preston:Combined. 30 seconds each. And they cannot say it depends or they're disqualified from answering.

36:48Bo Hanson:By the way, before you start, I'm not trying. I am delaying it on purpose a little bit. Guys, I've been saying we need a buzzer or something. You ought to have seen that weak sauce that came into the content meeting this morning. And Rebe was even embarrassed. Like, no, we can't use that. We're trying to figure out if we're going to do this, if we're going to do it. Just you wait. We need to find a way to really almost, not the shot caller. I think that might have been not a great suggestion.

37:12Brian Preston:That was your idea.

37:13Bo Hanson:But we should probably have something that at least wakes you up a little bit if you break any rules.

37:19Brian Preston:All right. We are going to dive into the segment. But remember, at the very end, we will have our— You sure you want to start this? Maybe it does depend segment where you can say all the things that you didn't have time to say and expound upon if you wish. Okay. Kayak gets my flight, hotel, and rental car right. So I can tune out travel advice that's just plain wrong.

37:39Bo Hanson:Bro, Skycoin. Way better than points. Never fly during a Scorpio full moon.

37:45Brian Preston:Just tell the manager you'll sue. Instant room upgrade. Stop taking bad travel advice. Start comparing hundreds of sites with Kayak and get your trip right. Bad advice? You talking to me? Kayak. Got that right. Spring is here, and there's a whole new way to chai at Starbucks that's made perfect for you. Choose your sweetness, dial it up, or keep things light. Add a touch of pistachio, a hint of strawberry, or vanilla. Or make it a spring classic with lavender. Because this season, there's endless ways to chai at Starbucks. So, with that, let's dive straight into question number one. Was there something unique?

38:28Brian Preston:You said there's a different thing about this one? Yes. Now, everyone watching is going to be able to see the timer counting down. Oh, so they're going to know if we screw it up. Great.

38:36Bo Hanson:Look at us. Making an investment in the timers.

38:39Brian Preston:Or not well. All right. All right. It says, the first question, I know you love Roth, but with two incomes, we have Roth 401k, Roth 403b, Roth 457, and MBD Roth. How much is too much of a good thing? There's no such thing as too much Roth, but I want to make sure based on your income, you're not missing out on current day tax benefits. If you're in a higher tax bracket, 30 % or above, when you make your contributions to retirement accounts, you'll likely want to think through, man, if every dollar I save could save me 30 cents in taxes. So you can't have too much Roth unless you're sacrificing current year big tax savings to build those Roth assets.

39:22Bo Hanson:I disagree. There is too much Roth if you find that you're miserable in life because you're a miser. I have clients that have, they so want to just stick it to the government as much as possible that they're not going on vacations. They're not enjoying the moment. Family members are uncomfortable around them because they're completely so tightwattish that it's not even fun to be in their presence. That's the bounce. Look, I love Roth. Go out there and maximize it, but do not lose your life to where you look back with regret.

39:55Brian Preston:And, wow, stuck the landing. Well, I see a timer. I see a

40:00Bo Hanson:timer now. Y 'all have wised it up, but now last week I was like, there's a timer?

40:04Brian Preston:I love the disagreement. I audibly gasped. That was fun. All right, next question says...

40:10Bo Hanson:Get as much as you want. Be a pig and stop. Save for the end segment. Save it. He was asking a tactical question.

40:16Brian Preston:60 seconds are up. Oh, we're coming back to this one. Next question says, focus on HSA, Roth, or emergency first at 25. I mean, come on.

40:29Bo Hanson:This isn't even a question. Follow the financial order of operations. There's no guesswork in this. That's why we tell you step one, you've got to get your highest deductibles covered. You ask, then we've got to get off the debt, we've got to get the free money from the employer, that's actually number two. And then, you know, then you get into the HSA and the Roth. I guess if you're trying to figure out, do you do HSA or Roth? You know, we like the HSA because it's a triple tax advantage a touch more.

40:55Brian Preston:But one of the ones was emergency funding there, right? Yes. So emergency fund has to happen before this, right? So it's got to be step four. If you follow the foo, you will not be led astray. Love it. Next question. Can I take his 20 seconds? What's the best way to get over not wanting to spend money? It's a hard one because some people do not get as much utility from spending as they do from saving. So the first thing I figure out is, is there another party involved? Is there a spouse? Are there kids? Are there other people who might get utility from spending? and you don't love the spending, but you love the memories and you love the things that you can create.

41:36Brian Preston:You love what the money allows you to do. So I would focus on those things and it might help you loosen the purse strings a touch.

41:44Bo Hanson:Money is only a tool. So go out there and do an audit of happiness. What actually makes you happy? What do you spend? Is it getting coffee? Is it going on trips? Is it buying gifts for people you love? Is it being charitable with organizations that you feel like are making the world a better place? there is something that moves the needle for you emotionally as well as reaches you from a happiness as well as fulfillment standpoint, go out there and lean into that so that you can walk away from the regret. Because I don't want you to be a miser. I want you to be a financial muse.

42:15Brian Preston:Wow. When Ryan can see the countdown, he nails it.

42:19Bo Hanson:I think this might be like Rocky IV. Now that I have the tool, I feel like maybe week three of doing this, it's starting to feel like I'm getting into a groove. Look at him. He's getting a little confidence. I'm getting a little draining. I feel like, you know, by the way, you're Dolph Lunker. Well, it's just because you see it's the workout. Oh, because Dolph had all the tools. You see Rocky Balboa dragging railroad ties in his gray sweatsuit. That's me right now. So I'm Drago. Of course you're Drago. Of course I'm Drago.

42:49Brian Preston:Okay, there you go.

42:50Bo Hanson:I mean, you told us you eat cereal with no shirt on. I wear a shirt everywhere.

42:56Brian Preston:All right, moving on. The next question says, assuming Roth conversions makes sense in your situation, where do they fit in the Foo? Assuming Roth conversions. If it's backdoor Roth conversions, step five. Backdoor Roth conversions in step five. If it's Roth conversions, like I'm converting my pre-tax assets to Roth, meaning I'm incurring a larger tax liability than I would otherwise, I'm going to argue that's a later stage, like a step seven-ish in there.

43:27Bo Hanson:That's step eight.

43:28Brian Preston:I said step seven-ish. Like once you get to saving 25 % Roth conversions,

43:33Bo Hanson:it's kind of part of it. I'll give you that.

43:36Brian Preston:You just want to disagree. I do like to disagree, but actually I think Bo,

43:41Bo Hanson:to bring it back on his face, I think Bo stuck the landing on that because I do think backdoor Roth contributions are step five. I think when you get into doing conversions, that's more of a step seven and eight of the financial order of operations.

43:56Brian Preston:What I'm noticing is when you can see the timer, you're so much more efficient. He's so efficient. You're good at this. If they only did 40 seconds, could you still get it in, you think, now that you see the timer? The timer helps. You better watch out. We're going to change it up for next week. The timer definitely helps. Next question says...

44:08Bo Hanson:Imagine what it's going to be like when I have the shot collar on.

44:12Brian Preston:Wild times. Next question is favorite Olympic event.

44:17Bo Hanson:I have watched so much figure skating and ice dancing.

44:20Brian Preston:That's a good one.

44:21Bo Hanson:So, I mean, that's... I even... personal disclosure, I actually set my DVR, my YouTube TV to record all those, those events. And I've watched a lot of them. This is the first year I've... Bo's like the Olympics are on?

44:36Brian Preston:I'm like, what, the Olympics? Yeah, I've not been watching a ton. But a lot of people here have been watching a ton. So when I walk past their desks, I can see it. First year I knew that two-person luge was a thing.

44:48Bo Hanson:Oh, you've seen all the stuff on social media.

44:50Brian Preston:I've seen all the stuff. and I was like, I want to know more about this. There's a lot of sports like that.

44:55Bo Hanson:Things that make you go, hmm.

44:56Brian Preston:It's a wild thing. So two-person luge. And by the way, the question didn't specify Winter Olympics, so I bet you could have chosen a summer thing.

45:04Bo Hanson:No, but we're all thinking about the Winter Olympics right now. By the way, the other one that just blows my mind because it's like shuffleboard is the one where all the brooms out.

45:12Brian Preston:What's that? It's fishing. Not fishing. Fishing? What's it called? What? Is it curling? Curling. Curling. Curling. I was like, fishing? No, I wasn't fishing.

45:20Bo Hanson:That was the ones I've seen everybody have.

45:22Brian Preston:We're out of time. We're on to the next question. The next question is, is having six figures in cash overkill in a high-yield savings account? Oh, that's mean. That was so close. That is such a mean question. It does not depend. If you are not at financial independence and you've not built up your asset base to where now your circumstance justifies that much cash, you could be missing out on a lot of opportunity by having that cash sitting in a high yield.

45:55Bo Hanson:I would bring it back to what is your income and what are your living expenses is in paying respect to the three to six months. And then are there additional factors that need to be taken into consideration? If you're, if you own a business and you have a lot of employees, that's naturally going to push your cash up. Or if you're in step eight of the financial order of operations, you might decide to use cash as more of a wealth builder, an opportunity thing to go out there and grab it because you have cash when nobody else does. But otherwise, let the financial order of operations be your guide.

46:26Brian Preston:Beautiful. Next question says, you often talk about the three-bucket tax strategy. Since Roth is so good and I'm not trying to lower my taxable income, why would I contribute to the other two buckets? Go.

46:41Bo Hanson:I don't mind sharing that Bo and I had a whole conversation at the coffee machine this morning where he's trying to convince me that I ought to quit doing pre-tax contributions.

46:49Brian Preston:You're not supposed to tell them that.

46:50Bo Hanson:And just do Roth only. Well, because, I mean, for legacy planning, because I'm never going to be in a low-tax situation based upon where the size of my retirement assets are.

47:04Brian Preston:I think a lot of people at lower incomes that don't justify doing pre-tax will likely build the majority of their assets in Roth. They're going to do Roth IRAs. They're going to do Roth 401k. They're going to have an emergency reserve that kind of serves as that after-tax bucket, even though it's cash. And so the only way their pre-tax bucket would possibly get built is if their employer contributions are going in pre-tax. So it's not uncommon for someone to get two financial independents at that level with all Roth assets, emergency reserve cash on the side, and a little bit of pre-tax because of the employer match.

47:39Brian Preston:Great. Very efficient. Next question says, getting married next month, how does the Money Guy team recommend on bank account structure? We both work and have the same income. Oh, is it your turn, my son?

47:54Bo Hanson:If you're young and there's not any complications like kids from a previous marriage, I would prefer everybody just be joint. I prefer joint accounts because it takes the power out of the money. And by the way, even if y 'all make the same income now, You're not promised that in 10 years from now or even five years from now when you start having children and other things that one of you might decide to stay home with the children. You want to take the power out of the money.

48:18Brian Preston:My opinion is that joint accounts and joint assets is the best structure. Although we have a number of clients that do keep things separate. And that's okay. There are just different things you have to think through there. But if you're asking for a newly married couple, the best way to navigate it, my advice would be to join everything. Great answer.

48:36Bo Hanson:See, I keep wanting to take his extra time because I think we'll come back to that one.

48:41Brian Preston:We'll come back. We'll come back. Two more for our rapid fire segment. This next one says, 27 male and 32 female. Should I put more than 5 % on the first home if we have$100 ,000 saved for a down payment on a$350 ,000 to$400 ,000 home?

48:59Bo Hanson:I would want to know, are you ahead of the curve, behind the curve, or right where you're supposed to be? So go to learn.moneyguy.com to see if you're ahead of the curve, behind the curve, right where you're supposed to be. Because, look, there's nothing that says, I love if you can put down 20 % on a house. What I'm trying to do is give you options so that you can get into a house, but also not stray too far away from the financial order of operations. I don't want you to be house rich, life poor. I want you to have the perfect balance of financial assets, housing assets, and so forth.

49:28Brian Preston:32 years old, 27 years old? Yes. $100 ,000 down payment,$350 ,000 house? Yes. I'd want to look at your other accounts to see, do you have a solid financial foundation in place where those dollars are going to grow towards financial independence? Because if you're behind the curve, it might not make sense to put 20 % down. It might not make sense to put$100 ,000 down. You should go to moneyguy.com slash resources. You should go check the wealth multiplier, see what those dollars can turn into. If you put them to work, it might be more efficient than putting them inside the mortgage. Right up to the end.

50:01Brian Preston:All right. Last but certainly not least, South Dakota resident here. What does it look like to be a client of you all? You mentioned last week that you don't have any from South Dakota. I think that's the only state we're missing.

50:15Bo Hanson:First of all, you hear harp music. And then it's like a dream sequence. And you're like, holy cow, I didn't know it could be this good. And then we might even have some extra swag we throw your way for being the 50th state that we have clients in. We need to go audit that to make sure we haven't made some audacious claim without knowing if it's true, but we definitely could make it a celebratory moment if we had all 50 states covered.

50:40Brian Preston:People ask all the time, what is it you do for clients? And the most simple way we can say that is our goal is to serve as your personal CFO, meaning any financial question you have, anything that comes up in your financial life, we want you to feel like you have a team in place that can help you navigate that, that can help you answer that. Yes, we talk about tax strategy. We talk about investments. We talk about portfolio. But we also want to talk about the other stuff. How does your long-term goals align with the short-term decisions you're making? How do you make sure your family's protected?

51:09Brian Preston:How are you making sure that your legacy lives on the way you want to? We want to serve as your personal CFO. Woo! The timer goes faster at the end. I do have a sidebar. You just want to give me a little grace. We're lucky because we have now reached the end of the It Depends Rapid Fire segment, and we are moving into the Maybe It Does Depend segment where you can say all the things.

51:31Bo Hanson:I chuckled. I was entertaining myself because I was like, harp music. That's such an interesting thing to say, and then it hit me. It's probably influenced. I don't want to break anybody's confidence, but we do have a content member that has a child that's taking harp, right? A harpist. See? So this stuff actually could happen. You come in from South Dakota, I might get them to pull out of school to come in here and play the harp.

51:55Brian Preston:Oh, I love that. Okay, one thing that you did not get to say for our South Dakota financial mutant, if you go to moneyguy.com and click on become a client, that's how you actually start the process. You kind of left out a key piece, but I added it back in. You're welcome. Yeah, that'll let you see how to get the conversation started. It'll give you a form to fill out and connect with one of our advisors.

52:17Bo Hanson:Here's the thing. I know on question five and six, I put asterisks next to them because I had additional stuff to say, but I dumped so much data out of my brain to make this 30-second segment. I had no idea.

52:29Brian Preston:Six figures in cash. Number five was, what if I have six figures in emergency cash? Is that too much?

52:35Bo Hanson:Well, I mean, that one is for sure it depends. Right? What does it depend on? Yeah, what does it depend on? I tried to. The way I tried to do that one was actually go through the variables because most people, look, most financial mutants actually go the side of not having enough cash because you feel like cash is trash. So this is, you're already in, it's unique if you're building up extra cash in the background. So I was trying to give you all the ways in the financial order of operations that it could potentially work. I don't remember what my other point was besides that.

53:07Brian Preston:There are people out there, and we have clients of this,$100 ,000 represents their emergency fund. No, they have to.

53:13Bo Hanson:We have quite a few clients. I mean, I'm guilty of it. I carry so much cash because of all the businesses and other things, and I've been rewarded for having that cash when things are bad. I mean, because I'm telling you, when you have cash and nobody else does, when markets go really ugly, and you'd think every time, every two years out of every decade when we go into these dark periods where the economy goes into a recession, you'd think, hey, I ought to have a little extra cash if you're in step eight of the financial order operations. but so few people do it. It's like me and Warren Buffett.

53:47Brian Preston:Well, I like to think I'm in that category too. You too, Bo. There might be things like a... Me, Bo, and Warren Buffett. There we go, the three of us. There you go. It's a big island. It's a club. Or there might be opportunities. There might be a building that you were looking at comes available and now you can move on that. Or there might be an opportunity to renovate or whatever that thing may be.

54:06Bo Hanson:But don't mishear us. Don't be loading up the cash if you haven't even funded your Roth IRA.

54:10Brian Preston:Yeah, no, that's cash built up after the 25%. That's step eight behavior. It's really a step eight thing. This one was getting married joint finances was number six, if you have anything to say on that.

54:22Bo Hanson:Yeah, that one is, look, because I do prefer joint accounts because I've seen it, the success I have in my own marriage, and I've been married. My wife and I were trying to figure it. We did figure it out, but now I'm getting confused because of the math we were doing. I think I'm in my 28th year. or my 29th year close to 30 years of marriage and a joint and i like the fact that since we both came into the marriage it's worked out well but but as a financial planner i have very unique things i have knowledge of seeing clients come in where maybe they met in their 30s or you know 40s and had children from other marriages and or there's different count structures where maybe like the parents of one of the spouses set up accounts when they were kids, and there's weird dynamics with that that you have to keep some assets separated.

55:13Bo Hanson:That's why a financial plan, these are complications that it's hard for me to say one size fits all. But I know in generality, if you come into the marriage with no assets or you're just starting out, I always try to take the money as a power source out of the equation so it doesn't create weird dynamics later.

55:29Brian Preston:Even in that situation, because I've got some clients right now getting married later in life. Successful assets are not evenly distributed. And one of the things we've talked about is, hey, let's make sure we keep all this stuff separate. Let's make sure we have the appropriate protections in place. But hey, once you guys come together, everything here on Ford is joint. And I think that's great.

55:48Bo Hanson:All the earnings are jumping into a joint account. That's right. And it takes the power. Yeah, it's still on the same.

55:54Brian Preston:In my mind, I still call that joint finances. and even if you have separate finances, it's really, really important. You want to operate on joint goals. I have not seen this happen with clients yet where they said, hey, my money is my money and my spouse's money is my spouse's money. Buddy, I hope that they're okay to retire when I get to retirement. They have to have cohesive goals that, hey, even though we might be doing things separately and we have separate structures and the allocations might be a little unique, we're working towards a common goal. And those common goals are goals that we have as an enterprise in a household.

56:26Brian Preston:If you can structure it that way, the separate account thing works. But if it's all like, hey, what I do with mine is mine and what they do with theirs is theirs, and there's no conversation around that, it's just likely going to be a very inefficient structure when it comes to goals, when it comes to saving, when it comes to taxes. There has to be some sort of at least integration around the purpose behind the dollars.

56:48Bo Hanson:My most uncomfortable client meetings are clients that are running these separate accounts. Because, man, oh, man, it's just so weird, especially when you have success. And by the way, you can't even – I know everybody immediately jumps to stereotypes in their head. No. I see it on both sides on the power structure play. And then when you start talking about paying off the house, and they're like, well, who's paying? I'm not taking it out of my account. I covered this. I put the deck on last year, and you're like, oh, my gosh. Guys, chill out. We're in this together, remember? It's so funny, but it highlights to me.

57:31Bo Hanson:That's why I get a front-row seat to seeing success is I see the possession of the assets when people – it's mine, mine, mine, and that's so two become one. Maybe that's traditional, but I just think about it. But one of the things my wife and I have rules, we never throw in a fight. You don't say we're going to get divorced or you bring that up. That's no-go land. And then another one, nobody talks about who makes the money. Because if that ever comes up, I know it's probably a fight that's going to take weeks to heal from. It's not one that we come back to two hours from now and we say, hey, wasn't that ridiculous?

58:11Bo Hanson:No, don't talk about who makes the money. Yeah.

58:14Brian Preston:No, that's good stuff. Another thing that you mentioned, Brian, I remember you said if you want to know your head of the curve, behind the curve, right on the curve, go to moneyguy.com. I wanted to call out a few specific resources, and maybe you had one in mind, but I know we have the Prodigious Accumulator of Wealth Calculator. So you can literally go plug in some of your like, oh, my age and how much I have saved, and it will kind of give you a sliding scale of like, oh, yeah, you're where you need to be. Or, oh, wow, you're a prodigious accumulator of wealth. Like, you're a financial mutant.

58:43Brian Preston:Or, hey, you're a little behind. Brian, here's some stuff you can look at to catch up. So be sure to go to moneyguy.com slash resources and maybe check that one out. Did you have anything else in mind, Brian? That was the one that came to my mind.

58:53Bo Hanson:No, I mean, there was the Know Your Number course. Know Your Number at Lauren, Not Money Guy. Just the spreadsheet to know so you can go out there. I'm excited whenever we get to share some of the updates that we're doing on some of these things too in the future as well. I'm not going to say any more. I know.

59:07Brian Preston:I love it. We have like a built-in like teaser strategy in everything we do. It's a built-in teaser strategy. It's called Brian. Brian can't keep a secret Oh that's hilarious By the way for someone who poo pooed the entire rapid fire segment I felt like you crushed it

59:23Bo Hanson:I mean self rating myself I felt like I was much I felt like I was a Vanguard analyst I under predicted what I was going to do and then I came in much harder Yeah I mean that's what me and Vanguard

59:36Brian Preston:Like an Olympic gymnast you stuck the landing over and over and over again

59:39Bo Hanson:So maybe I like this

59:40Brian Preston:Oh, I love it. All right. Want to do one more long-form question for good measure? Yes, ma 'am. Travis W. says, hey, guys, congrats on the Clips channel. Thanks. That's very nice of you. Oh, hey, tell them about the Clips channel. For those who don't know about it. We bring it up one time last week.

59:54Bo Hanson:It's 57 minutes in.

59:56Brian Preston:What are we doing?

59:57Bo Hanson:We should have brought this up at the front end. The Clips channel.

59:59Brian Preston:Guys, we're going to keep having the Clips channel. We can talk about it as much as we want anytime.

1:00:04Bo Hanson:I did, too.

1:00:05Brian Preston:I forgot. Tell the people. Tell them about the thing. Tell them about it. You can now go to subscribe to the Money Guy Clips channel because we heard you. And we are now at a point where we were able to make this happen. All highlights of our episodes that we were posting on our main channel are now posted exclusively to the Money Guy Clips channel. So if you like that kind of content and want the bite size, you can go there. And now on the Money Guy Show channel where you are used to coming that you know and love, that is posting only all original long-form content there. and we hope you like it.

1:00:39Brian Preston:So far, very positive feedback. Thanks for your support on both channels and we're excited about the future. People keep asking why we did it. It's because you guys asked for it. We heard feedback. Totally. Man, it'd be great if you guys could bifurcate, if you could separate those two. And so we did it. We did it for you guys. But call to action,

1:00:55Bo Hanson:because I mean, please go subscribe and then tell your friends and family about it. Because here's the thing. We know that the machine's going to be ticked off at us for probably a few months. because anytime you change anything of the data, the way you're feeding it to the algorithm, you have to wait for the monster to kind of give you, it's like the Wizard of Oz telling you yay or nay if this was a good idea. So we need you guys organically. We don't ask for a ton, but I'd love for you to tell friends and family about us so we can hopefully make it through the doldrums of upsetting the machine.

1:01:29Brian Preston:I think we're going to be just... Was there a question there? There was a question. There's a question that started. There's a question in there somewhere. And Travis was just being nice and said, congrats on the Clips channel, which is so nice. But his actual question said, my wife and I are saving for a down payment. Should we also be bolstering our emergency fund to our predicted monthly burn rate? Or does that come later? Well, I think a lot of people, when they think about acquiring a home, they immediately think about down payment. Down payment, down payment, down payment. They don't recognize.

1:01:58Brian Preston:There are other costs that come with home ownership.

1:02:01Bo Hanson:Yeah, there are.

1:02:02Brian Preston:Immediately after closing.

1:02:04Bo Hanson:Ladders.

1:02:06Brian Preston:Lawnmowers.

1:02:07Bo Hanson:Blondes. Let's just name a bunch of things. Trash cans. Toilet paper holders. Keep going, dude. You're crushing it. I mean, no, I could think of all the things that we have to buy. You're not wrong. I mean, all these things that you don't think about. Cleaning supplies.

1:02:20Brian Preston:And so one of the things you want to do is you don't want to just save just enough for the down payment. It's nice if you get a little bit of cushion in there. Because, one, there are likely to be closing costs associated with your mortgage that you either have to roll into the mortgage or you have to pay outside of the mortgage, but then you are going to have those getting in the home costs, moving costs, toilet paper holders, all the things that he just mentioned. So whenever someone's saving for a house, we always tell them, hey, save a little bit beyond that. Yes, I do think it makes a ton of sense to bolster your emergency fund, to get a little bit more cash in there so that it's more of a smooth and seamless transition, even on the other side of homeownership.

1:02:56Bo Hanson:Well, begin with the end in mind. Plus, also, I think about a good quarterback. he doesn't throw where the receiver is currently. He throws to where the receiver is going to be when the ball intersects with him. And that's exactly, I like what you're doing there is that, because I do think, especially on that first house, that 3 % to 5 % house down payment, it does, because it takes a period of time to build it up, it does become kind of an extension of step four, the financial order of operations and your emergency reserves. So I like you kind of bolstering your emergency reserves, not only for the 3 % to 5 % down payment, but also what the new updated burn rate is on your household because there will definitely be an impact with having the new house and the carry cost.

1:03:39Brian Preston:Love it. Well, thank you so much, Travis, for the question. We will be back here Tuesday at 10 a.m. Central taking your questions live on YouTube. And until then, make sure you go to moneyguy.com and check out all of the free resources that we've made for you and also subscribe to both channels, the money guy show and money guy clips if you haven't yet because then it lets us know you're out there and really helps us just spread the word about uh these powerful financial principles that we all know and love and that have really made a difference in all of our lives so thanks

1:04:10Bo Hanson:for your support earlier uh there was somebody who said hey how do i get to feel better about spending more money and i said go do a happiness audit figure out which makes you happy i hope you guys know because beau even at the coffee we talk about big life things he's like you're ever retiring and you guys make me so happy i think the answer is probably no um because i y 'all are part of my happiness factor is i'll come in to see you sit down every tuesday and recording these shows knowing that our content's intersecting seeing the reviews even of of millionaire mission on amazon and goodreads it means the world to us and it really puts me in a happy place knowing we are changing the world for the better to help personal finance become that much easier so Thank you for tuning in.

1:04:55Bo Hanson:I'm your host, Brian, joined by Mr. Bo. Reby and the rest of the content team, Money Guy, out.

1:05:04Brian 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.

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