What You NEED To Know About The Fed Meeting

22:59Brian Preston:Yep. Well said, guys. Thank you, Kevin, for the question. I have another question here from Leandra Joe. It says, you've given several people on Making a Millionaire, our show where you talk with real life people about their finances, you've given several of these people homework to simplify their retirement accounts. Should we always roll over 401ks from an old employer into the new employer's 401k or into an IRA? Both. There was only a deliverable. Somebody had created something that would let you go through a decision matrix to figure out what do you need to do with these assets. That's a great thing.

23:41Brian Preston:I love how Leandra asks this question always. That's just not a But that's not a word that we love to use because always is so certain and so finite. Does it often make a lot of sense to think about consolidating old retirement accounts? Yeah, but is that always the best? No. And so what Brian's alluded to, we have a great resource. If you go to moneyguy.com slash resources, we have a resource titled 401k flowchart. That's not what it's called, but that's basically what it is. It's what do I do with my old 401k? It'll actually walk you through the things to think through. Look at that. Bam. Got an old 401k?

24:23Brian Preston:Got them. Here is what to do with it. Because you really have four, but not actually four. You have three options. So option number one is if you have an old 401k, you could cash it out, take the money. That's never a good option unless you were in retirement planning on spending those dollars because if you're below 59 and a half, you're going to pay penalties. And if you're below 59 and a half, you're also going to pay taxes on those distributions. So cashing it out never makes sense. Well, then you got to decide, okay, do I leave it where it is? Do I roll it to my new 401k or do I roll it to an IRA?

24:54Brian Preston:How do I know, Brian, which one of those three it makes sense to do? What are the things I should think through? Well, I mean, you got to look to see what the internal expenses are, what the investment options are. You know, there's all kind of alternatives and opportunities because index funds, are Are they available? Because every plan is a little different. If you're with a big Fortune 500 company and a super low-cost plan, it's not going to benefit you to transition that into your new employer's plan if it's a small company with an insurance-based product. You should probably stay. That's why we give you the decision matrix is you'd probably be better off staying.

25:32But I could invert that and say, hey, if you worked for a small company, now you're going to a company that has a really kicking 401k plan, it is going to probably benefit you to figure out if there's a way you can consolidate and bring that into the the brand new plan because it's just that much better or maybe you go from bad small plan bad big plan and you look at and they don't have index funds they're expensive because it's just the golf buddy of the owner of your company who set up these different plans and then you go out and you you you you might that might benefit you especially if this is a large sum of money to consider rolling that into an IRA.

26:08But there's a things, homework is a great word because it means you have to do some research to figure out how this impacts you and your personal finance situation so that you can stick the landing on making sure this somewhat, it's not hard, but it's not a simple decision. You have to just go through the work and work through the exercise to make sure you're doing this right.

26:31Brian Preston:But if you download the deliverable, it will literally walk you through. Okay. Can you pull it up one time for me, team? It'll ask you questions. Is this your situation? Yes, do this. No, do this. Okay. If yes, then do this. If no, then do this. It literally kind of makes it dummy proof. That's a bad way to say it, but that's what we're going for because we want to make it as easy as possible, but you have to do the homework to make sure you're making the most optimal decision. Yeah. So we always say personal finance is personal. That's why we have moneyguy.com slash resources. so you can get that free, things like that free download and actually apply it to your situation.

27:05Brian Preston:So be sure to go take advantage. We did say the name of that so that our podcast listeners get that too, right? We did. Got an old 401k. Here's what to do with it. Got a 401k? I do think that's what it's called. Something very similar to that on the website. You would think that we would do a better job of memorizing the names of our deliverables. I know, honestly, I should know that. I can always tell you what they're about and what they tell you in the takeaway. I just... Well, remember, because we put a lot of effort in designing these things and making them, but it's always, it's just the catchy headlines always forget because I remember more of the substance than I do the sizzle.

27:37Brian Preston:It is called Gotten Old 401k, just double checked. Are you really good with names? No. Yeah, see, that doesn't mean, so like - If I meet you, right, like I might remember your face or I'll probably remember some nuggets of our conversation, but I'm just not great with names. And I even, you know, like the little trick they teach you where you meet someone and you're like, oh, hey, Rebe, it's so nice to meet you, Rebe. are you having a good day Rebe? You're like supposed to say their name three times right when you first hear it and it's supposed to solidify it in your mind. I've now, that's become so rote for me, it doesn't even work anymore.

28:08Brian Preston:And I'm like, I do it and I'm like, gosh, was it, oh, was it, what was her name? I'm not good at names. That's what I'm saying. Are you good at names? You, man, I feel like we're on the Jungle Book crew, you know, and they always, they say, there's the elephants. They're known for their incredibly long memory. And then you see another elephant. There's the elephants. They're known for that. That would sure help me with my job. Bo just asked me the same question twice. I felt like I'm on the Jungle Cruise, and he's the host. All right. Good to know. Someone's asked me. Oh, my gosh. I don't notice it.

28:41Brian Preston:No, it's because I keep popping my neck. Someone asked if my neck was sore. No, it's not. I just, you know, what's funny is I notice I'm always so self-conscious. We're just going off the rails here. Whenever Brian's talking, I always kind of lean like this, and I'm always looking this way at you. and I'm like, man, people are looking at my ear. I should probably do a better job of trying to do like this. Sit straight and look at him. But then I keep turning my neck and it's kind of a funky way. These are the things that go through my mind. It ain't broke. Don't fix it, though. You're fine. He did that so he could cross his arms and pop those pectoral muscles and biceps out.

29:14Brian Preston:That might be the real reason. When you need to build up your team to handle the growing chaos at work, use Indeed Sponsored Jobs. It gives your job post the boost it needs to be seen and helps reach people with the right skills, certifications and more. Spend less time searching and more time actually interviewing candidates who check all your boxes. Listeners of this show will get a$75 sponsored job credit at Indeed.com slash podcast. That's Indeed.com slash podcast. Terms and conditions apply. Need a hiring hero? This is a job for Indeed sponsored jobs. All right, let's get back to personal finance with Matthew C's question.

29:50Brian Preston:He says, are REITs a good strategy if you want to get into real estate without having to deal with owning rental properties? And REITs are real estate investment trusts. Maybe you could talk a little about what those are in case someone doesn't know. I love it. A REIT, exactly what Ruby said, is a real estate investment trust. And oftentimes, the way that they're structured is it's a holder of real estate or a holder of multiple different types of real estate. And so Matthew's question is, is that a good strategy if I want to get into it without having to deal with owning rental property? One thing you even have to discern is, okay, if I'm going to go buy a REIT, a real estate investment trust, how am I going to purchase that?

30:29Brian Preston:Am I going to purchase it through something like a publicly traded mutual fund or publicly traded ETF? Or am I going to go buy into like a private equity, private placement type REIT deal? Because even those are unique and distinct. I will tell you from an investment perspective, when we build out client portfolios and we look at allocations. We love investing in real estate and we love using real estate ETFs, real estate mutual funds, because it allows you to get very liquid public access to real estate across diversified modalities. So I'm not just buying a rental property or a piece of commercial real estate in a specific area, in a specific neighborhood, community, or town.

31:08Brian Preston:I'm able to go out and diversify broadly across there. So we think that REITs are a wonderful way, if you're going to buy publicly traded REITs, to get real estate exposure. Now, on the other end, if you're just trying to do a private placement where you're investing privately in a real estate investment trust and it's an illiquid holding or there's some specific period through which you have to hold it, that may or may not make sense as to the best way for you to begin to get your real estate exposure. You agree with that? Disagree that no that's a great lead into because like REITs are good but then they also leads to how about you know real estate mutual funds real estate index funds because we've we've used all of these we've used all three of those including you know in a former life I've even put people in private placements when I worked for a much larger actually I can't say that anymore because we've gotten to be big too but we're larger than they were back then but but yes that the firm I previously worked at was like doing those private deals.

32:06We do not do a lot. We don't do those private deals. I don't know why I was about to say a lot. We don't do those private deals. One of the things that I know just from our own investment committee meetings in the past was there was a period where a lot of just the real estate, whether it was REITs or REIT mutual funds or index funds, I should say, the way they were structured is they had a lot of malls and other things, because that's the nature of a lot of the commercial real estate. And there was some exposure risk. And so you wanted to have managers who were being very proactive and making sure that they were looking to the future on how they were making decisions for their real estate portfolio.

32:44So all that stuff comes into play, whether you're going to do an index fund and active management. I do think real estate is one of those inefficient marketplaces. As much as I love index funds, I absolutely love index funds. the right manager potentially could add some alpha to your performance so do some due diligence do some research so you're an informed investor to know hey what's the best structure to get my real estate and then the last closing parting comment on this is realize for the typical american every time i see the fred data from the federal reserve on where their net worth is americans don't have a real estate problem if they've if they bought a primary residence their problem is building up assets, investment assets outside of real estate.

33:29So don't sleep on the fact that you probably have a big real estate exposure just with your primary residence. Well, let's make sure we're building up some assets outside of real estate too.

33:39Brian Preston:I'm always amazed at how rarely people, and this is why if you don't do an annual net worth statement, you absolutely should. We have a free template you can use at moneyguy.com slash resource. Or if you want to go to the full on dashboard tool, You can go to learn.moneyguy.com. I'm amazed at how often people neglect that. Hey, okay, I've got my portfolio and I've got this much in large cap and I've got this much here and that much there. And then we ask the question, yeah, yeah, but you realize you also have this huge home that you own. That's a big asset on there. And then you have this other problem.

34:08Brian Preston:Like you have a ton of real estate exposure when you look at your global, your total portfolio allocation. A lot of people don't even realize they're real estate investors. Yeah, but we also, I mean, I always like to be transparent. We always tell people, we use the accounting term of lower cost of market or of cost or market. So whatever you paid for your house plus improvements is what we put on our net worth statements. A lot of people don't like that rule. And I do that is because for most of us, your primary residence is a use asset. And I don't want you inflating your net worth statement for something that provides shelter for your family.

34:44The only way you can turn it into an asset that's actually usable is to sell it or to go take debt on it, which neither one of those things are the easiest processes to go through.

34:55Brian Preston:Great. Learn.moneyguy.com if you want to check out the full version of that net worth tool. There's only four ways that I'm trying to think this. There's only four ways that our primary residences add value on our net worth statement. Right? Check me on this. Okay. You pay down the debt so the debt goes down. You don't have a mortgage anymore, so you wouldn't know about that. You make an improvement because we do cost plus, so whatever you paid for it plus. Or you sell the house. You end up selling it and you capitalize on the equity put in. It's only those three. In the fourth one, there's not one.

35:27Brian Preston:I think it's just those three. You were about to say refinancing or taking additional debt. Yeah, but even that, I don't like that. There was a season where I remember I had prospects who came to me where some advisors were out there essentially creating packaged products where you'd go get a home equity line and then you take the proceeds and put it in the markets it's so aggressive that's um i don't know that's not now the other side is my debt crusaders are gonna be like well that would mean you're you're just like dave and you want to pay off the mortgage i'm like no there's a lot of real estate friction costs that that's why also why i wouldn't just go out there and do the loans i'm I'm not that type of investor.

36:08All right.

36:09Brian Preston:Do It Hewitt has a question for you next. I need to buy a car after mine broke down. I have a sinking fund on top of my emergency fund to buy in cash. Sweet. Should I finance with 23.8 to maintain liquidity? Maybe 50 % down? I'm 29, married with two kids, and on step seven. What do you think? is he a candidate for the 23-8 car buying rule? How big is your portfolio? How old are you? What's your savings rate look like? What are your long-term goals? How is your account structure structured? What's your other debt look like? But if he's at step seven, I would put that means he's saving and investing greater than 25 % because he's given us the context of step seven.

36:57Brian Preston:And he has a separate sinking fund in cash. So he's got a lot of cash. I was about to make a statement. I was about to make a statement. I was about to say, just pay cash. But then I see 29. And that always scares me because when you're so young, you're just not guaranteed that you've had enough time to build the assets up underneath you. Yeah, I would need more data. So our preferences, and a lot of people don't recognize, our preference when it comes to buying automobiles, we want you to pay cash. We would love for every automobile you purchase you to pay cash for. Because that will keep you honest with what you can afford to buy.

37:32It keeps the eyes and the wallets all connected versus you just trying to look richer than you actually are.

37:38Brian Preston:So why should a 29-year-old not pay cash? I kind of get what you're saying. A lot of people can't pay cash or in order for them to pay cash, there is an opportunity cost that is greater than they should take on. And that's what I was saying for a 29-year-old. Man, if you're 29, you're right on that cusp of 30. And we say that for 30-year-olds, by the time you get there, if you want to be saving the way you should be, your liquid portfolio ought to be roughly equal to one times your annual salary. So let's assume that maybe you didn't get started until a little bit later on in your 20s and you've built up this sinking fund, but you're kind of behind on saving and investing.

38:12Brian Preston:Well, we know if you go to moneyguy.com slash resources, you check out the wealth multiplier. I don't know where it's at, but the wealth multiplier for a 29-year-old is almost 23 or is a little bit greater than 23 because I know it's 23 for a 30-year-old. And so that means that every dollar that you put to work can turn over 23 times by the time that you get to retirement. And so one of the questions I would think through is, okay, I could pay cash for this car, but does that make the most sense if those dollars could potentially do more for me by working inside of my portfolio, inside of my armor dollar bills?

38:46Brian Preston:Because being at step seven tells me what you are saving today. It does not tell me what you saved last year, the year before, the year before. So I'd want to know all of the other extenuating circumstances to be able to determine if financing could make the most sense for you or if you should pay cash. But let me give it the other side to give this thing balance. If this is a 29-year-old who's already well beyond one times their net, I mean, their investment portfolio is already greater than one times their income, and they have this money on top of their emergency reserves and they've gone and they appropriately have stuck the landing on steps one and four so their reserves are truly are fully funded.

39:28I'm going to probably err on them paying cash on this. Yeah, agreed. Because with that additional context, that's going to keep them from, it's probably going to keep them more in the Corolla to Camry versus thinking Land Cruiser. you know because that that's the thing is these cars they're such emotional decisions for a lot of people that people get themselves in a lot of trouble you know i have done content i've talked to you guys you know one of my biggest complaints is my wife's european car and um no you know because these but what's funny is we've had to and i'll do more content we've had to replace that car because the air conditioner went out and that's a disaster here in the south but when we were at the repeating the same silly mistakes again and going to a nice European dealership.

40:15It floored me to see how many young 30-somethings were in this dealership with tricycle motors crawling all over these nice leather seats. And I'm like, what are these people doing? That means toddlers.

40:27Brian Preston:What are they doing here? I mean, why are they here when they should probably be buying a much more affordable car? because what their value add and where the wealth building in the journey is is actually saving and investing as much in that bank as possible and investments versus buying you know something that you're going to look really cool in for all for just a you know for a period of time that that stuff drives me crazy there's a time and a place and that's i tried to make that point when i wrote millionaire mission when i talked about in the example i used in the book was buying a Corvette.

41:02For a 25-year-old to buy a Corvette versus the typical Corvette owner is actually in their early 60s, which Chevrolet doesn't want you to know that, by the way, because they want you to think that all the young, beautiful people are buying Corvettes when they're in their 20s and early 30s. No, they're buying them when they're really having a hard time getting in those low riding seats. Think about that because there's a time and a place it's better to be rich than to actually look rich. So I just want you to think about the timing of silly purchases like your European SUVs.

41:32Brian Preston:My, uh, my wife is on an airplane right now, so I know she's not watching the live stream. So I can say this, you know, she, she is not, not happy about the car that she drives. And like, she's cause she said, she tells me, Hey, I'm a car person, uh, which I'm like, all right, that's cool. Uh, and, and she's like, Oh, you look how beautiful that, Oh, look at this car. Oh, look, it's so beautiful. And this one's so beautiful. I'm like, babe, you know, it's not beautiful. Chicken nuggets smashed into those seats, uh, French fries underneath milkshake smoothie on the you ever had this thing and we've all every parent has ever had this right uh where a kid's in the back with a milkshake or a smoothie and the the straw flicks and it flicks the thing across the ceiling you know i'm talking about they just have a spoon of ice every parent knows right i don't want that in some fancy car so i keep telling my wife i'm like hey for this season for this season right now let's do this let's do this thing it makes the most sense or whatever and we're gonna have that time it makes me think about the 30 you're talking about the 30-year-olds that you see in the dealership with all the kids running around.

42:30Brian Preston:Even if you have the money, is that the right time to be driving that kind of thing? I just wish. It's back to that commercial where people walked around with numbers over the head. I just would love to know what people's investable net worth at the car dealership. Wouldn't that be so awesome? I would love to know because that way when I see the young 30-something with the kids looking at these expensive cars and I'm like, please max out your 401k first. you know, please let me know that that is taken care of, that you're doing 25%, that you're ahead of the curve, not behind the curve. Because I just don't think that's the exercise a typical American does.

43:06Brian Preston:Yep. She is full court pressing me. Well, I'm sure my situation doesn't help. No. You know the decision that we've made. And it's, but, you know, I kind of. Because she doesn't show the picture. She's like, see, see. I'm like, no, no, no. You know what? She's different. She didn't watch this back, you know. He didn't have milkshake on his ceiling. But we're in our 50s now. That's right. I will tell you, it's kind of like, you know, I was thinking about Simple Path to Wealth, Collins. Yep. JL Collins. We reacted to one of his videos and he was talking about you do reach a portion of life where it goes beyond finances if you've done it right.

43:42And that's what I had to, because I'm still a financial mutant. I'm not a tightwad anymore, but I'm definitely a financial mutant. Sure. Is that I've had to let go of some things that younger versions of myself wouldn't have. but that's because of the time and place argument is that it was better. I was in this discipline stage here because that's what was needed to create success. But to, to, to hold back from something that would bring happiness to my, my wife in my fifties is more miserly when that's not going to move the needle whatsoever. And, and the financial independence or even net worth discussion.

44:16Brian Preston:Yep. That's what I tell them. I keep telling them. I'm like, it's, you know, you do like your brave heart thing. Hold, hold. Oh, that's what I keep telling her. She's like, so whenever somebody asks, like, oh, hey, do you love the car that she drives? She's like, no, but don't worry. I'll be driving an awesome car when I'm 90. I'm like, okay, thanks. Thanks, sweetheart. You guys are funny. Or it could be in the early 50s. Or early 50s. Early 50s. Early 50s. How about late 40s? Early 50s still feels pretty good. How about late 40s? Late 40s. Come on, let's not rush this thing. I got little kids.

44:48Brian Preston:I got a two and a half year old. We got some time. he's got some chicken nuggets to get chicken nuggets we got to make it through you guys oh man okay so well okay yeah i'm gonna tell you this one thing uh so we bought this have i told this story on the name or we uh i don't know my wife got in a car accident a couple years ago she wanted to get a big suv so we got a big suv one of the it was like you know not like super swanky but it was fancy it was nice right and they had done this thing in this model year where they put the TV screens in the back, extended off the back seat. So it wasn't like built in.

45:23Brian Preston:It was like, it was like basically like an iPad. And it came from the factory like that. It wasn't, this wasn't an aftermarket. No, no, no. This is like, that's how they designed them. My middle daughter who is now eight, she was like three at the time or whatever. And I remember it was less than three weeks into owning that car. She put a foot like just right straight through that screen. And I was like, oh my goodness, are you kidding me? And that's why I told you, I was like, Not this season. Not this season. That car ended up breaking down a few times, and so we were able to get out of it, and it all worked out okay.

45:56Brian Preston:And now she's in the perfect car for our season and station of life right now. Listen, I am a self-proclaimed not a car person at all, so it's not really fair for me to speak to, but it is true. When you have kids, you're kind of setting them up for failure with that kind of thing. Right? Especially with little kids. Like, oh, I'm sorry, buddy. Why would you have a protruding? Because, you know, if you want rear entertainment, why would you have protruding screens? Here's what I'm realizing. If Bo, remember if you're king for the day exercise, Bo would mandate everybody in the messy middle just gets minivans.

46:26There we go. Because then your kids can't ding car doors for the people around them. You realize the middle shears. They don't put the screens right in front of you like they do in some of the SUVs. King for the day, Bo's putting everybody in a minivan. It just makes a lot of sense.

46:42Brian Preston:You just lost a lot of votes. It just made a lot of sense. Including your wife's. it's not elected official it's king king that's right there's no votes there just kidding oh man well we got to go on to some more questions that was some good otherwise this is gonna be the shortest q a we're gonna be like we're just talking about cars today um we have a foo question for you financial order of operations oh he's trying to break it it says what step of the foo would you think is the best time to consider a quote-unquote next endeavor. We got this. I'm currently in step seven of the FOO with five times of my yearly expenses in retirement.

47:22Brian Preston:So seems to be doing well. We don't have an age, but what do you think about planning for a next endeavor in light of the FOO? I want you to answer, because oftentimes when you use that language, next endeavor, that makes me think about the FIRE movement or what we like to talk about. It's not so much financial independence, retire early, it's financial independence, next endeavor, moving on to the next thing. But this, Caleb's question makes me think that this is more of a career shift thing. He's using Next Endeavor, but at what step of the food do you think it's time to consider changing, time to consider making a shift?

47:54Brian Preston:Is that the way that you're reading this, or are you thinking this is actually financial independence? Well, I mean, either way, I love because guess what, Caleb? You're in the right place, step seven, because so much of steps one through six is mathematical and features, meaning that we're trying to keep you from avoiding the desperate decisions of not having enough cash. making sure you're getting the free money from your employer. That's step two, avoiding the high interest debt. Step three, back to cash again, because we want to go beyond just emergencies, a little short-term emergencies with step four, step five and six are all about trying to build investable assets, but with a heavy dose of tax planning built into them.

48:32It's not until you get to step seven, where we go beyond just the basic behavioral things of saving and investing 25%, all the mathematics and the tax planning that goes into steps five and six, that seven is saying, hey, now that you're at this point that you made it through the basics of finances, how do we actually use these assets? And that's why I love in step seven is that we're taking really the temperature of are we ahead of the curve, behind the curve, right where we're supposed to be. And I love that you gave the concept that, you know, the feedback that you're five times your yearly expenses.

49:03but we don't have the context of how old you are what's your income and other things because you know well we do we know yearly expenses we don't know your income but it there's still more that i need the data points so i can make once again answer that question ahead of the curve behind the curve right where we're supposed to be and then you get to add the curve ball of not only of ahead of the curve behind the curve but how do i want to use this as a goal planning tool because it's one thing if you're extremely successful but then you put goals upon yourself If you're somebody who makes$100 ,000 and you're saving 25 % of it and you're doing really good things, but you tell me, hey, I want to be able to spend$500 ,000 a year in retirement.

49:44Well, look, that's going to require some big things for you to get out of these assets, to build up a big base underneath you. So your goals definitely impact what you need to be doing in step seven to reach it. And so there's just, that's why personal finance is very personal. And that's why I can give you all the free advice in the world to reach a level of success. But when it comes down to actually maximizing and implementing, that's where the abundance cycle always kicks in is because to reach you and help you maximize and become the best version of yourself. Once you get to be close to that seven figure status at two commas, we're going to need know more about you.

50:26That's why all of you who watch our content, you're like, gosh, why do these guys not give more content about the 50s and 60s? It's because so much of that is personalized to your fingerprints of your personal retirement and your life that it would be the most boring content in the world because it wouldn't catch a big net full of people. That's why it's so much better and easier if you were just creating content for everybody, just assuming they're in debt. It's because that is the majority of Americans. I feel like we're in much more shallow water with trying to help people navigate this and become maximizers of this.

51:06But I know you've had some ideas on how we expand that envelope even more. Sure do.

51:10Brian Preston:Can I ask him to opine a little bit here, Ribby? Are you okay with that? Sure. I'm going to expand the question a touch just because this wasn't exactly Caleb's question, but I think it was tangential and it'd be valuable. when is it or or what should your thought process be if you want to change careers or change jobs because i because i want to i want to like hone in on that because you have some experience both having done that as well as we've employed a bunch of career changers here how does someone think through that like when is that something you have to wait until step seven before you can change a job before you can shift a career before you can do something else not necessarily but it is going to require you to put on your 3D glasses.

51:49I mean, that's the thing. I think so many people, when you make big changes in your life, just make sure you've measured twice, cut once. You know, a lot of, a lot of what society will tell you is just let your, follow your passions. Maybe. I mean, but you better make sure you do your work because otherwise your passions can get you in a lot of trouble really quick. If you don't include some of the math and the reality of how you're going to come out on the other side better and actually survive this is because, And that's why I put on my 3D glasses with any big life decision. And by the way, I did this.

52:21You know, I have a no hypocrite policy is that when I went out to start my first company, I actually did the spreadsheets. Every now and then I go look at them for fun. I have them in my fire safe here at the office. Bo's seen them. It's kind of fun to go back and look at what I was thinking back when I started the, laid the groundwork for all this that we've built over the years. And for those of you who are brand new to our content, because I know constantly, if you look at our numbers, 40 % of you are brand new, constantly coming through the doors. When we say put on 3D glasses, I'm telling you, you have to, before you make any big financial decision that's going to jeopardize what you're doing, is you got to create three plans.

52:59And it's going to be customizable to what you're trying to accomplish. For me, I'm doing this off memory. I think I did a five-year look forward because I figured it was going to take me a few years to get the business up and running. And then I wanted to kind of know where the family was starting to catch traction on reaching, saving, and investing for the future. So I did a five-year goal for myself, and I did three different versions. I did the dream plan. Remember, we're talking about 3D, so there's going to be 3Ds here. The dream plan is living your best life. You catch traction sooner than you thought.

53:33Everything works out. You are going to be loaded and rich, and holy cow, this is awesome. Do that plan because it's very motivating to see what could be. And here's what's fun about that dream plan is that if you really do this right, even if it's slower than you anticipated, I bet you even do better if you look back at this 15 to 20 years in the future than even in that dream plan. Because we always think linearly, not in an exponential fashion like real success happens. So do the dream plan. It's healthy, but it's going to be much slower than you probably are anticipating. Then do the down-to-earth plan.

54:06This is what you really think is going to happen. I want you to be honest with yourself, put enough good stuff in, but also put in the things that are going to be struggles. Because for me, my next endeavor was starting a company. I wasn't good at getting business. It cracks me up. Everybody thinks that we're great marketers. I was not originally a good marketer. I was really good at building financial statements back in the day. Not so great at the marketing. So I had to build in that it was going to take a lot longer to get clients. That was the down to earth. And then don't skip out on the last one, which is the doo-doo plan.

54:36This is you'd make this, you go into this next endeavor and it is a complete failure. What does that look like? What are you going to do? What are you going to pivot? How are you going to survive that? It's much easier to do that on paper and in the planning process than it is to live it. So I always tell people don't skip out on doing that type of homework because you'll be better prepared for it. You'll also, that way when you're experiencing it, you'll be like, oh, I've been here. I've planned for this and I'll be okay. You know, so many things. What's funny is I think we have great instincts, Bo.

55:08And as I get older, I'm realizing like mental health, anxiety, other things. A lot of times the way you overcome any of these struggles is you have to address them head on because you're not that way. You're not worried about what's coming in the for you in the future or things that you struggle with in the past. You have to address and let these things wash over you completely. We're doing that. And that's what I'm telling you as instincts is we tell you to do this stuff on the financial side, see the numbers, actually experiencing the numbers so that you can be better prepared so it doesn't feel anew.

55:44Because, you know, anytime you do something novel or for the first time, it's going to feel awkward. So we've got to figure out how we get you reps or ways to experience it in the most healthy way possible. And that's why I love doing the planning. Love it.

56:00Brian Preston:Absolutely. That wasn't even a question. it was caleb had a question but we took it into we took it into some different you expanded upon it yeah that's astra if i could have you opine and she said yes yeah i mean if you're going to do a next endeavor you should think about everything you just said so i liked it we're not this will not be the longest questions we're not gonna break any question records here if you say so i do have another question queued up so we'll see what happens with this one we'll wrap the fire see how quick we can answer maybe five or six more let's go i don't know if that's gonna happen on this one but we'll see kyle s says hey money guys what are your thoughts on having a vehicle lease with a payment of 595 where my company refunds 175 per month as long as i'm in the lease i'm frugal in other areas of my life I don't know enough details here, Kyle.

56:59Brian Preston:The way that you framed your question makes it sound like there's some free money going on. Uh, Hey, if you spend 600, we're going to give you 200 back. I'm using round numbers here. So should I take advantage of this thing? Should I be willing to spend this money in order to get this money back? Well, if, when I think about it that way, It's no different than like when you go to a store and they're like, hey, if you spend$150, you get this back. If you spend, at the end of the day, if it's causing you to spend more money, it may in fact not be worth it. So what you have to do is you have to kind of look at your situation.

57:34Brian Preston:If I was going to go buy my own car, pay cash, not have the outflow, not have the lease, what would my capital outflow look like? And if I'm spending that money anyway, the money's already going out the door, or maybe I'm going to have a higher car payment and doing the lease is going to put me at a lower cash outflow and I'm going to get some cash back. I can do the analysis that way, but I would be careful of letting some sort of carrot or some sort of incentive encourage me or influence me to spend more money than I would spend otherwise. Agree, disagree, want to fight. We actually addressed this on one of our Making a Millionaire episodes where we had it.

58:12she came on and I'm blanking on the name right now. There was a car allowance. There was a car allowance. And what we unearthed, now I don't know if this is what Kyle's situation is, but she was going to get the money either way. It was what made it deductible. And then I think it was so obvious, and I'll just use Kyle's example. He just shared, was it$175 a month? Was what he's going to get back. Was what he's going to get from the employer. If you multiply that by 12, that's$2 ,100. Let me go ahead and just, that's great to get free. I love free money. But if you think about the typical car depreciates, $2 ,000 is a blink of the eye.

58:47Brian Preston:That's right. I mean, that is absolutely nothing. So you have to in doubt, zoom out. It's not only for the financial markets. It's also on what the big economic impact is. So I don't want you to go take on a bigger car, more than you can actually afford or need, just so you can get a$2 ,000 annual benefit that probably got absorbed in the first, the moment you drive that car off the dealer's parking lot. Because a lot of these deals with leases, especially going to make you flip this car every few years. Now, let me give you the other side of this. If you're in step eight and you're beyond financial decisions, this is a lifestyle choice because you realize that some decisions are beyond money, then okay, that's all right.

59:33But I don't want, it's back to what I talked about earlier in the show. I don't want young 30-somethings who have not maxed out the 401k, have not funded the kids' college plans, not done all these other very important things, but are somehow now expanding their lifestyle so they can look rich because it's much better to be rich than it is to look rich. And I want to make sure you do things in the right time or place.

59:56Brian Preston:I don't know your age, Kyle, but, man,$600 a month on a car lease, I'm just thinking if you're young and still building, $600 a month can do a lot of work for you in your portfolio. In the early ages, I do like, I mean, I think about my own journey with cars. I mean, some of the best driving cars are cars you can drive for 10 years, and they're paid off for seven of those 10 years. I mean, that's some good wealth-building years there if you have it. But I also want to make sure that because they're business owners, there's other unique things. I don't like absolute rules. I like the additional, you know, given the context.

1:00:32so people can make the best decision with their finances. But that's where the personal and personal finance come into play. Love it.

1:00:39Brian Preston:We understand that personal finance is personal. And like we have shared throughout this episode today in live stream, we have moneyguy.com slash resources there for you all the time to hopefully help you take the concepts and ideas that we talk about and apply them to your personal situation. So be sure to take advantage of that by going to moneyguy.com slash resources and browsing all of the free stuff that we have available to you about all of these different financial topics, whether it's buying a car, buying a house, rolling over your 401k. We have a lot of great resources there at moneyguy.com slash resources.

1:01:17Brian Preston:So thanks for joining us for the live stream and thanks for checking out those resources. And hopefully it's just going to help you feel even more confident with your personal finance decisions so you can focus on what really matters. Well, it's almost like there's a better way to do money, Reby. And here's what I want everybody who's out there watching to know. You don't have to figure this out yourself. If you're feeling like, we know from the stats, whether it's Millionaire Next Door, whether it's the Ramsey Solutions research, even from our own millionaire research, approximately 75 % to 80 % of millionaires are first generation.

1:01:53That's probably a lot of you guys who are watching this and you're like, oh man, I don't know what I don't know because I didn't grow up around money. I don't know how money completely works. We got your back. You don't have to figure this out all by yourself. Use the resources, use all the content we're creating so that you can have co-pilots to help you navigate this. All we ask, the only catch is, is that when you reach close to that double comma mark as your assets are starting to catch so much traction, they're like, whoa, can you believe I'm the CEO of this multiple seven-figure enterprise or what will be multiple seven figures at some point, consider the abundance cycle.

1:02:31Realize who planted the seeds of knowledge out there because we are the Johnny Appleseeds of personal finance so that you can then pay it forward with the abundance cycle. I'm your host, Brian Preston, Mr. Bo Hanson, Reby, and the rest of the content team. Money Guy team, out.

1:02:47Brian Preston: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. 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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