X% of Young Americans Expect To NEVER Retire…

16:04Brian Preston:You're taking a risk off the table.

16:05Bo Hanson:The thing, and I detailed this pretty in-depth in Millionaire Mission is that the reason I talk about when I like people to hit step nine, if you're going to pay off mortgages early, I like it to be post-45 because I just want to give you enough opportunity while the column is on the compound and growth side of things when you're under 45. Let that wealth multiplier work for you because I always see, I get it, debt in retirement can add a risk element. But you know what's a bigger risk is that you actually get there and you just don't have enough money saved and you have to start making really hard decisions.

16:44Bo Hanson:And you look back and go, but is it really that big of a deal? Because I mean, what do you say? $120 a month? Is that, I mean, if you look at now for a 42 year old, it's not as big of a decision as for a 28 year old, but it still can move the needle to a degree that you ought to at least go through the exercise to see what you're costing yourself by looking once again at our Know Your Number course to kind of play around with those assumptions. That's the beauty of having a tool that lets you not only adjust the rate of return, inflation, but also what your savings rate is so you can see, hey, what is this doing for me?

17:18Bo Hanson:You could even play around by making some assumptions with what that mortgage impact is in there as well. But look, it goes back to, I want you to be debt-free. I just want to make sure that you live your best life and don't have regrets. and it just, the arbitrage of somebody who's got a 3.6 % mortgage, I mean, there's a lot of people right now that are probably throwing tomatoes at the screen because they're like, what are you doing paying off a 3.6 % mortgage? Because that's one of the things, it's one thing if you're prepaying a 6.5 % mortgage right now at age 42, it's another when you're paying off a 3.6 % and you should know better at this point.

18:03Cold Medicine Brian:well Devo6912 thank you so much for the question it is your lucky day because it's Tumblr day today

18:09Bo Hanson:can I say one quick thing he also gave up all my prepayment people that are debt avengers that are going prepay it they're usually saving 30-35 % they're always above 25 % Devo tattled on himself when he's only saving 20 % that's a problem right there at least get yourself beyond 25 % and then you can give yourself permission to prepay the debt.

18:34Brian Preston:I love how you called them debt Avengers. Because it used to be debt crusaders. Now it's debt Avengers.

18:39Bo Hanson:I mean, you know, by the way, can we go ahead and be clear on that? Because crusaders is much better. I'm on, and I'm cold medicine free today. Okay. But Bo came in last week and he was like, hey, I think I'm under the weather.

18:55Brian Preston:No, this is.

18:55Bo Hanson:And I was like, oh, no. I was like, because I always, you know, you know, they always say when your kids, you If you have somebody in the office that puts their kids in daycare, you just know that your immune system is about to get a workout, too. No daycare. Bo is like that child in daycare because he brings home every bug. He is a child in daycare. So I came in yesterday, and I said, Bo, okay. I said, I got it, obviously, from you. The gestation period is five days.

19:21Brian Preston:All of Williamson County is sick, and he got it from me.

19:23Bo Hanson:I was like, what am I dealing with here? And you go, oh, good news, it's only one day. And I do want to give you credit, because yesterday I was probably about at a 45%. Today I'm probably at about 73%. So this thing does have a pretty quick turnaround. So I want to thank you for that at least.

19:38Brian Preston:I don't think it was me. I don't think it came from me.

19:41Cold Medicine Brian:You never do, though.

19:41Brian Preston:Can neither confirm nor deny. So I don't know what to tell you.

19:45Bo Hanson:Always patient zero.

19:48Cold Medicine Brian:Well, Devo6912, if you would like a MoneyGuy Tumblr since we answered your question on the show today, just email winner at moneyguy.com.

19:55Bo Hanson:All right. Back to the point. That's why I said Avenger versus Crusader, is that this thing is humming. Oh, that's because you weren't 100%. It's humming, but it's not. By the way, so you're saying like Avenger was an upgrade from the elevator. No, I'm saying that it's just the elevator is almost there. Like it opened up, and then the door opened. It's like, wait a minute, that didn't line up with the floor exactly like it was supposed to. It's the cold medicine. It's just like, and by the way, what y 'all don't know behind the scenes is we mixed up our entire, the way we were recording schedule.

20:27Bo Hanson:We've already recorded a react this morning, and I was like, whoa, we're coming out hot with not even 100 % Brian. So Lord knows if this content's even good.

20:36Cold Medicine Brian:73 % Brian is here today. You know what?

20:39Brian Preston:73 % Brian is better than 100 % of most men. You know what I mean?

20:43Cold Medicine Brian:It's true. True that.

20:43Brian Preston:We'll see.

20:44Cold Medicine Brian:Love it.

20:44Brian Preston:It might be more entertaining.

20:46Cold Medicine Brian:All right. We're going to move on to Brittany F's question. But if you are watching live, we're going to do a rapid fire segment again today. So be sure to get your rapid fire questions in the chat. Just put RF at the beginning of your question. We'll know that it is specifically for that segment. So we'll be prepping that in the background, get your questions in. But for now, we're going to go to Brittany F's question. It says, hey, money guys, at what point can you consider steps five and six of the FOO complete? Is it when your monthly investments hit a certain number? Is it year end when you actually max those out, max out those accounts?

21:22Brian Preston:Thanks. That's a great question. You know what? I'm surprised I don't get asked this question that often, right? So a lot of times when we say, you know, if you're following the financial order of operations and you get to step five, it says that you should max out your tax-free account. You should max out your Roth IRA. You should max out your health savings account. Well, a lot of folks don't max them out in one fell swoop. They don't just do 7 ,500 or 4 ,400 right it right there. They start doing it monthly. Hey, I'm going to divide that out by month. I'm going to save that. I would argue that when it comes to following the financial order of operations, if you are saving a monthly amount or a systematic amount that will max that out, I would say that you complete step five.

22:07Brian Preston:So it's not at the end of the year, once you fully fund the account, it's when the savings is going in that will put you on pace to to max out that account. So if you have a monthly amount that's maxing out your Roth and that's maxing out your HSA and a monthly amount that's also going to max out the$24 ,500 salary deferral in your 401k, I would argue even in January or February before you've had a whole entire year to do that, you've already crossed through step six. Agree, disagree, want to fight.

22:36Bo Hanson:Well, I think it's, this is what I love about the financial order of operations is because it really has been built for people in good incomes and it's been made for people with, you know, below average incomes and even above average incomes is because I think for people, we'll take it off somebody who makes somewhere between 85 to a hundred thousand dollars a year, but not over that. You're likely going to max out step five, right? Cause that's a dollar amount to load up the Roth IRA, the health savings account. That's a dollar amount that will trigger you coming through step five. Step six is going to be graduated from because you've reached a savings rate level.

23:14Bo Hanson:Once you exceed 25%, you're not going to hit, if your income is not super high, you're not going to hit the maximum amount the government lets you. You're just going to hit the savings rate of 25%. And that's going to move to step seven.

23:27Brian Preston:It's like$138 ,000, I think, we calculated before you'd maximize.

23:31Bo Hanson:That's why I was pulling the calculator, but I was like, you know what, cold medicine, Brian, no way in the world I'm going to be able to get to that math in time.

23:36Brian Preston:So I just, that's why I'm trying to play horseshoes with the numbers here, but it's,

23:41Bo Hanson:but for people who are in a high income situation, you know, when you get to, yes, there's a good chance you will load up your 401k, 403b, 457 in step six and still not reach 25%. Well, that's where step seven, the hyperaccumulation kind of lets you come in and pick up the pieces, look at the three account strategy to know how you're going to use the money. I'm very proud of the fact that this thing goes beyond just saying, hey, save this and keep going. It hits you whether you're just starting out. It hits you if you're reaching that six-figure status. It hits you if you're making a million dollars a year.

24:14Bo Hanson:The financial order of operations will help you walk through that process and the mindset. Love that.

24:21Cold Medicine Brian:That's great. Brittany F., if you would like a MoneyGuy Tumblr, just email winner at moneyguy.com. JP has a question next. During times of geopolitical crisis? Should I dollar cost average daily, weekly, monthly, or wait for a correction? Do you look for a percent drop to add additional investments?

24:44Brian Preston:I'm so excited for you to answer this one first.

24:47Bo Hanson:Look, there's always going to be crazy stuff going on. So I will tell you, I don't change my behavior at all on this type of stuff. I just set it, forget it. Look, I've already been crazy enough that I'm doing weekly dollar cost averaging. So don't do daily. I think that starts to get a little eccentric at that point. But I will tell you, because I alluded to this last week's live stream with the collaboration we did with Austin, and people have asked about it. I will tell you my behavior does change, though, when some of the geopolitical or the economic stuff causes us to hit bear market status.

25:24Bo Hanson:When the market goes down 20%, you should go and think about, man, I would immediately go ask myself, let's go look at like the S &P 500 and others and see what the price to earnings ratio and other things are. Because a lot of times when you get to bear market status, the markets are irrational with they disconnect from the value of what the companies are. And then if you're on a if you have extra money around laying around at that point, I think it's okay to kind of be opportunistic. Once we get there, if you historically, it's I've never been, I mean, look, you have to hold your teeth and grip it tightly because you might have more volatility.

26:05Bo Hanson:And that's why there's even an opportunity every 5 % fall from 20%, maybe you find a little bit more money if you have it. But it's one of those things where I don't change my day-to-day behavior off of just normal changes. It has to reach full bear market crisis mode for me to have a change in my consistent dollar-cost averaging behavior.

26:26Brian Preston:But I want to speak to the average financial mutant out there because you have to understand what you're talking about. I agree 100 % with it.

26:33Bo Hanson:You have to be in step eight and have extra cash.

26:35Brian Preston:Yeah. The reason that we're able to do that is because in addition to saving the 25 % plus of gross income, we're also able to build up cash for other endeavors and those sorts of things. And so because you have cash on the sidelines above your emergency fund and above your 25 % savings that's sitting there, There you can have some opportunistic funds. If there's a pullback, you can do something with.

26:56Bo Hanson:Or if you're in the dollar-cost averaging strategy, you can accelerate.

27:00Brian Preston:Yeah, or if you're dollar-cost averaging lump sum. But if you're someone who's just a consistent saver, saving 25 % of your gross and the cash that you have on the sidelines is really your emergency fund, you shouldn't change anything. Just let your DCA happen and happen and happen. This accelerated is really for folks that are later on in the financial order of operations. Don't overcomplicate it. What you do is as the volatility happens, as the geopolitical stuff happens, you just try to change your mindset to say, hey, I'm not changing any of my behaviors. But while the rest of the world is freaking out, while the rest of the world is so concerned about what's going on, I recognize that I'm buying at an opportunity, buying at an opportunity, buying at an opportunity.

27:36Brian Preston:You don't change anything that you're doing. What you change is what you're thinking for the vast majority of financial mutants out there.

27:44Bo Hanson:Hey, I appreciate you being my safety net because I feel like we're at the circus and, you know, I'm on the trapeze and I'm like swinging up and I'm trying to do a few somersaults. And then if I don't catch all the content, you're the net down there at the bottom that's going to catch it and bring it up and also keep me from breaking my net.

28:01Brian Preston:You know, what's funny is in my mind, I saw like Zac Efron and Zendaya. Like I saw that. Oh, yeah, that's a great showman. But then he turned me into the net. I didn't even get to be one of the acrobats. By the way, whenever I've told you

28:14Bo Hanson:my favorite song from that Greatest Showman album is the negotiation between Hugh Jackman and Zac Efron. I love it. So I don't know why you turned yourself into the love interest there. It's a little weird.

28:24Brian Preston:You did bring that upon yourself. I was not Zendaya. I was not. I want to be clear.

28:28Bo Hanson:Y 'all didn't get that feeling? I mean, we didn't immediately put Bo into Zac Efron. No, because I'm the one.

28:34Brian Preston:They're safe. They keep them safe.

28:37Bo Hanson:I'm the one on cold medicine, not you.

28:39Brian Preston:Come on. Keep it together. You guys are so funny. It was not Zendaya in that analogy.

28:43Cold Medicine Brian:It was Zendaya who's Zac Efron. You can just ponder that. What's the name of the song?

28:47Bo Hanson:Somebody look it up, though, that has Hugh Jackman and Zac Efron negotiating. And they're like negotiating.

28:52Cold Medicine Brian:I forget. I don't remember the name.

28:53Bo Hanson:It's a good song.

28:54Brian Preston:What is the name of that song?

28:55Cold Medicine Brian:Oh, The Other Side?

28:57Bo Hanson:The Other Side.

28:57Brian Preston:Is that right? That is it. Yeah, The Other Side. That's right. That's a good one. Look at that.

29:01Bo Hanson:I was hoping that. See, that's where the cold medicine's messing up because I was going to sing a few bars of it, but it's just not there right now.

29:07Cold Medicine Brian:We were deprived. When you want your spring break to feel like. And your kid's pool day to feel like. And your hotel bed to feel like. Ooh, and room service to feel like. Because at Hilton, hospitality feels like.

29:27Brian Preston:Your cabana's ready. Would you like fresh towels?

29:30Cold Medicine Brian:It matters where you stay. Book now at Hilton.com. Hilton, for the stay.

29:40Bo Hanson:This episode is brought to you by Nespresso. Introducing VirtuoUp, The latest in a long line of innovation from Nespresso. It's innovation you can touch, sense, and taste in every single cup.

29:53Cold Medicine Brian:With a three-second start, easy open lever, and dedicated brew over ice button, it's even easier to enjoy your coffee your way.

30:01Bo Hanson:Sip for yourself. Shop Virtuo up exclusively at Nespresso.com.

30:06Cold Medicine Brian:All right, we're going to do one more long-form question, and then we're going to move into our It Does Not Depend rapid-fire segment. So be sure to get those questions in. Just put RF at the beginning of your question.

30:17Bo Hanson:I feel like I'm in quicksand right now. I'm just like. All right.

30:23Cold Medicine Brian:Here's the next question. It says it's from the K2 Fowler. I'm 48, 500K in investable assets. No debt, 20 % savings. Trying to max Roth, HSA, et cetera. But I don't have an emergency fund. I came to the Foo late. Should I halt the 20 % to build up the emergency fund?

30:49Brian Preston:I mean, yes, but hold on, but hold on, hold on. Let's think through this, right? Here's what I want to know. For the$500 ,000 that you have that's currently invested, what is it comprised of? How's the structure? Is it$500 ,000 in a 401k? Is it$500 ,000 across a 401k in a Roth IRA? Or do you have some after-tax brokerage account assets? Because whether you stop saving and devote your full attention to the emergency fund or you liquidate some after-tax assets to then fund your emergency fund is going to be dependent upon that. But I do think in your situation, you can't be out there. Naked. I was going to say skinny dipping, but naked.

31:34Brian Preston:You can't be naked out there because you don't know when that emergency is going to happen. and emergency funds are there for the unknown unknowns. You've got to go put some drawers on. You've got to put drawers on, he said. You have to have an emergency fund in place to make sure that you keep your financial life out of the ditch. When you're out there just like...

31:55Bo Hanson:Nobody wants to see a 48-year-old man naked, so go ahead and get some drawers put on.

32:02Brian Preston:Prioritize the emergency fund is what we're saying.

32:04Bo Hanson:The emergency fund is the drawers in this analogy, correct? You definitely need a triage situation. You've got to immediately figure out if you can fix this. If you have after-tax investments, just do a reallocation. And then go through the financial order of operations. Figure out what your highest deductible is. Get that employer match. And you've already said you're debt-free, so you should be pretty good on that. So steps one and four are going to happen very quickly for you.

32:31Cold Medicine Brian:All right.

32:32Bo Hanson:And then you'll be all covered up.

32:34Cold Medicine Brian:That's fantastic. The K2 Fowler, if you would like a Money Guy Tumblr, just email winner at moneyguy.com. We would love to send you one since we highlighted your question on the show.

32:44Brian Preston:He said put your drawers on is what he said.

32:48Cold Medicine Brian:That would have been a great rapid fire answer. Just all he said was put your drawers on.

32:51Brian Preston:Put your drawers on.

32:53Cold Medicine Brian:All right. Speaking of, it is now time for our It Does Not Depend Rapid Fire segment where Bo and Brian take 60 seconds combined to answer your questions. and they are not allowed to say the phrase, it depends. Now, as a throwing them a bone, we always at the end have our maybe it does depend segment where they can air any grievances, expound on anything they didn't get to expound on, and we just have that there at the end to make sure all the bases are covered. So without further ado, let's move into our it does not depend rapid fire segment. First question says, is it okay to pay taxes from the retirement account?

33:33Cold Medicine Brian:when doing a Roth conversion? No.

33:41Bo Hanson:I mean, look. No.

33:47Cold Medicine Brian:I mean, you still got 48 seconds.

33:49Bo Hanson:Are we done?

33:51Brian Preston:You don't think... If you have to use the pre-tax dollars to pay taxes, I'd argue you're someone who Roth conversions likely don't make sense for us.

33:59Bo Hanson:What if your income is like nothing and you retired early last year?

34:03Brian Preston:income is nothing, then there won't be any taxes due.

34:06Bo Hanson:Then you could use that money for the minimal taxes.

34:09Brian Preston:I stand correct. If there's no taxes to pay, then sure, you can use the retirement.

34:12Bo Hanson:The tax rates are so low on a Roth conversion that it makes sense when you've retired.

34:17Brian Preston:I think if someone only has pre-tax assets and they have to then cannibalize some of those pre-tax assets to pay the tax on it, you're likely not a candidate for Roth conversions. I agree with that.

34:30Cold Medicine Brian:Wow, that was five seconds remaining. That was ugly. I guess nicely done.

34:34Bo Hanson:We didn't say depends, but that was ugly.

34:36Brian Preston:It was a one word is an easy one. That was a...

34:39Cold Medicine Brian:Great, I'm not fighting you on it. I actually, I was like, when she said, should I pay my taxes?

34:44Bo Hanson:Yes. You just stopped listening. No, keep going.

34:49Cold Medicine Brian:Next question says, how do you adjust the 25 % savings rule when paying into a teacher pension?

34:58Bo Hanson:Oh, I get to go first on this one? I mean, I'd go find out because there's a funding, there's a formula, you know, whether the employers, you know, you're putting in eight and they're putting in 12. Go figure out what that formula is. And you can, as long as your income's under$100 ,000 for an individual,$200 ,000 for a married couple, you can count it. And that's just, but you got to protect yourself and make sure that that pension's well funded by your employer.

35:25Brian Preston:if you're early on in your career I wouldn't factor in the pension I'd still try to save for 25 percent if you're further along in your career and the pension is a higher likelihood of paying out and you know kind of know what your number is and you know what your number is net the pension amount I think you can adjust your savings then but I would argue early on if you just don't even factor in the pen if you can if you can still save 20 to 25 percent what you're going to do is set yourself up for more flexibility earlier on in life.

35:55Bo Hanson:You heard it from Bo. Save more.

35:57Brian Preston:Well, I just... Save more. You always pin that on me like I'm the save more guy.

36:03Cold Medicine Brian:Next question says, my employer pays for a good family health insurance. No cost to me. Should I opt for a lower insurance to qualify for an HSA? Yes or no?

36:16Brian Preston:This person's under 26 and on their family plan?

36:21Cold Medicine Brian:No, it said my employer pays for good family health insurance.

36:23Bo Hanson:They have a Cadillac plan with the employer. When you have open enrollment, go look at your upcoming year. If you have life planning stuff like kids and other things, then you do the Cadillac version. If you get old like me and you've got a bunch of medical procedures, then you do the Cadillac plan. But if you're healthy in 26 and nothing's coming up, take advantage of the high deductible plan, assuming you do the exercise and the math works.

36:46Brian Preston:Math equation in four parts. Premium you pay for each plan. expected out-of-pocket costs on each plan, any employer money that goes into each plan, and then tax savings from each plan. You add those up, and it'll tell you which one is most mathematically advantageous. Just like I said.

37:02Cold Medicine Brian:You guys are getting way too good at 60 seconds. Well, especially when he's a safety man.

37:06Bo Hanson:If I'm Darth Vader, which one are you? Who are you in the... Oh, I'm either Han Solo or Luke Skywalker for sure.

37:13Brian Preston:Are you kidding me?

37:14Bo Hanson:I know you want me to be Chewy, but I'm better than that.

37:20Cold Medicine Brian:Next question. Why is Brian never so excited for a topic? Only Bo.

37:27Bo Hanson:Oh, I think naturally in life I'm excited. So I don't have to try to convince you guys I'm excited like Bo does. You just can tell. Anybody who hangs out with me, you want me around.

37:39Cold Medicine Brian:Love it.

37:41Bo Hanson:Even on cold medicine.

37:42Brian Preston:Even on cold medicine.

37:43Cold Medicine Brian:Next question. Should 529 be owned by kids, parents, or grandparents?

37:52Brian Preston:if your children are under the age of 18 or under the age of majority they can't actually own the financial accounts themselves there's got to be some other custodian on it either a parent or a grandparent and i'm okay by the way if it's your grandparents that are

38:09Bo Hanson:funding this 529 put the grandparents and then put the beneficiary as the child because what that protects you from is the parents what if they go and get access to that you put it in the parents' names and then they go and they have other ideas for how this money is used. If you funded it, structure it that way. Is that okay? No, no, no, that's great.

38:28Brian Preston:The only thing I'm going to throw out there is sometimes when it comes to parents and grandparents' funding, one thing that we remind people to think about is if they live in different states, whoever, like, it doesn't matter who owns the account, but whoever's putting the money in the account, sometimes a grandparent will give money to mom and dad and mom and dad will put money in, but grandma and grandpa live in a state where it would have been deductible if they would have put it in directly, you want to factor in the tax benefits.

38:51Bo Hanson:Or the fact that if you're doing financial aid.

38:55Cold Medicine Brian:Time is up.

38:56Brian Preston:No, do financial aid. Keep going. She can't stop you.

38:58Cold Medicine Brian:I don't know what he's going to say.

39:01Bo Hanson:Grandparents sometimes can be better than parents. I was thinking the same thing.

39:05Cold Medicine Brian:Hi, Money Guy team. My employer has both a traditional and Roth 401k with a 50 % employer match up to the $24 ,500 limit. Limit any minor changes to steps two, five, or six of the Foo with this special account.

39:22Bo Hanson:I really hope you don't have debt. I really hope you don't have debt because I want you to get as much of that free money as possible.

39:29Brian Preston:Same answer, man. If you can get$12 ,000, I can't do the math in my head, half of$24 ,500. Is that$12 ,000? I can't do the math in my head. It's$12 ,250. That's what I thought it was, but I didn't want to screw that up.

39:41Bo Hanson:Even on cold medicine, I'm good at public math.

39:43Brian Preston:That's free money that if you can avoid walking away from, we'd love for you not to walk away from that. The question was, do you adjust two, five, or six? Well, two would suggest you get all of it, but you get all of it instead of doing your Roth. Well, maybe it makes sense to do. Well, you can do Roth contributions. Roth, boom. So now you're doing tax-free, and if you're going to get the maximum match, you're already doing six, so I think it's awesome.

40:08Bo Hanson:Yeah, if your employer is that generous, get in there and get that. I love it.

40:13Brian Preston:Get in there and get it, he said.

40:16Cold Medicine Brian:Get it.

40:16Bo Hanson:Just slop yourself around in it like a pig. Slop. Literally.

40:25Cold Medicine Brian:Next question. How old is too old to go back to school and change careers? Ten years out from retirement? Five years out?

40:34Bo Hanson:Have y 'all not seen Rodney Dangerfield and Back to School? Isn't that the name of it? Was that the name of the movie? I have not.

40:40Brian Preston:What was the name of the movie? No one in here has to know.

40:44Bo Hanson:Where he was a high diver.

40:46Cold Medicine Brian:What?

40:46Bo Hanson:Is it back to school?

40:48Cold Medicine Brian:You've wasted 16 seconds of your answer.

40:50Brian Preston:Keep answering the question. Well, look, here's the thing.

40:52Bo Hanson:You have to really, I will tell people.

40:54Brian Preston:Nailed it. Back to school.

40:56Bo Hanson:It depends on how good your career is. I have a lot of career changes that come to me. And you have to figure out, are you ahead of the curve, behind the curve, or right where you're supposed to be? Did I say depend there? I hope I didn't. But you kind of have to do an assessment of yourself. I did say it.

41:12Cold Medicine Brian:I wasn't listening close enough.

41:13Brian Preston:You need to do the analysis. Anytime there's a back-to-school conversation, there's a cost-benefit analysis that needs to take place. What will this cost me, and what is the benefit on the other side? Sometimes that benefit is qualitative, and sometimes it's quantitative. You need to make sure the ROI, however you define it, justifies going back to school.

41:33Cold Medicine Brian:That's it.

41:33Bo Hanson:We're getting no respect around here. Next question.

41:36Brian Preston:Is that your writing? No, you nailed it. That's very good.

41:39Bo Hanson:Absolutely horrible.

41:40Brian Preston:If I close my eyes and you do it, it's like he's sitting next to me.

41:44Bo Hanson:No respect.

41:45Cold Medicine Brian:Next question says, can I count my two kids 529 as part of my 25 % saving? No way. I'm saving 15 % in Roth 401k and funding in HSA.

41:56Bo Hanson:You're not at step eight then, it doesn't sound like. I feel like I just did a channel my inner Bo Darth, and that was he's not at step eight.

42:06Cold Medicine Brian:All right. Is that the answer? I would not be Darth Vader. Not a chance. He might be. All right, next question. If I'm 35, have enough saved for Coast Fi, and am on step nine, how can I find a partner to share it with?

42:21Bo Hanson:Say that one again.

42:23Cold Medicine Brian:If I'm 35, have enough saved for Coast Fi, and I'm on step nine, how can I find a partner to share it with?

42:30Brian Preston:If you go to moneyguy.com slash mutantmingle.

42:33Cold Medicine Brian:No, that does not exist yet.

42:36Bo Hanson:You're on the wrong show. I mean, look, I've been married for 27 years

42:41Cold Medicine Brian:40 seconds worth of advice

42:42Bo Hanson:I mean, what am I going to tell people? Go to church and go hang out at the local bowling alley I mean, I don't know where people meet these days

42:50Brian Preston:I do think there are tons of wonderful communities If you want to go out there and check out the Reddit thread If you want to go check out the Facebook page If you want to go check out the Discord There are all kinds of great places where financial mutants hang out I'm not saying use that to necessarily be your dating pool but who knows if you're out there interacting with other like-minded individuals who knows what kind of connections you can make whether it be in a romantic sense or just talking to people about sound solid financial decision making great last but not least rapid fire question

43:22Cold Medicine Brian:when it comes to your money guy circus analogy which of you is zendaya and which is zach efron

43:29Brian Preston:I think we all know the answer.

43:31Bo Hanson:The reality is I'm Hugh Jackman and Bo is Zac Efron. Bo is the one that screwed that whole thing up.

43:37Brian Preston:That was such a nice answer, but he didn't answer the question. You were doing an acrobatic analogy.

43:43Bo Hanson:I don't know why you brought in Greatest Showman. There was no reference of Greatest Showman when I was talking about you being my safety net.

43:49Brian Preston:Give me one other example of acrobats besides those two.

43:55Bo Hanson:I grew up going to Ringling Brothers every year for free by just doing the color contest out of the Atlanta Journal-Constitution.

44:01Brian Preston:Isn't that where Greatest Showman came from? Barnum Bailey? Isn't that where it came from?

44:07Bo Hanson:You know better than that. I look back on my childhood, by the way, since we have 18 seconds. I went to every Braves game as a kid as well as to the circus off of just doing whatever giveaways they were doing at AJC.

44:21Cold Medicine Brian:Financial mutant from a young age.

44:22Bo Hanson:Look at that.

44:23Cold Medicine Brian:Love it. Well, that does it for our It Does Not Depend Rapid Fire segment. I did cut you off a couple times, so let's move into our Maybe It Does Depend segment. Was there anything else you wanted to add, clear the air on, expound upon?

44:37Brian Preston:I want to make sure I didn't give bad advice here because I'm thinking through on if someone is in a super low tax bracket and they want to do Roth conversions. One of the things I would think through, all you have are 401k assets, But if you're in that low of a tax bracket, is doing Roth conversions even all that advantageous? I mean, like accelerating taxes into the current year, if you're going to be in a low tax bracket anyways, you might be thinking for estate planning purposes or whatever. But then you'd have to think through like, okay, what do my kids' financial tax situation look like?

45:12Brian Preston:I just think if someone's in such a low income tax bracket.

45:15Bo Hanson:It's a very specialized. But I will tell you, we've had prospects come through that have had seven figure 401ks and nothing else. Yeah, for sure. And that's why you're like, holy cow. So you're financing cars. You're doing everything because you have access to no money but these four. So it is a little bit too much of a good thing.

45:33Brian Preston:But you wouldn't recommend those people do Roth conversions because they've got to pay for their lives somehow, right?

45:38Bo Hanson:I'd want to see the entire – but I'd be trying to figure out how we could get the three buckets filled up really quick in step seven in those situations. but I'd want to see the full picture. It's hard to do that on rapid fire, especially.

45:49Brian Preston:There was one other one about 529 assets. And I think where you were going.

45:54Bo Hanson:Yeah, I just don't want people to, that's part of it. When we do financial order of operations, you always have to put your oxygen mask on first. And if you're trying to count your kids 529 when you're not fully funding your own retirement, that could be, there's an issue there.

46:09Brian Preston:And then what was, I felt like there were two more. The trapeze, Zendaya. but this is my notes that I got

46:16Cold Medicine Brian:it's too rapid to remember

46:17Bo Hanson:all I did was count to five if you look at my notes these are the worst notes it says rapid fire 25 % traditional Roth and then 1, 2, 3, 4, 5

46:27Brian Preston:it literally just says 1, 2, 3, 4, 5

46:30Bo Hanson:I don't even know why I took notes I should have drawn a picture of a unicorn I remember stopping at the 529 question

46:37Cold Medicine Brian:that was the main one I remembered so I think you covered it

46:40Bo Hanson:we did pretty good though because I feel like sometimes I filibuster and this thing's already at 55 minutes when we just get through the rapid fire.

46:47Cold Medicine Brian:I mean, you're doing too well at rapid fire. Maybe I should be sick all the time. I should go lick the lamppost outside

46:52Bo Hanson:and get myself as sick as possible so I give these answers. It's that much quicker.

46:56Brian Preston:Lick the lamppost? That's, you know,

47:00Bo Hanson:whatever public surface is out there.

47:02Brian Preston:What's the Christmas story, right? Isn't that the one where he gets his tongue stuck to the lamppost? It's immediately the picture I saw right there.

47:11Cold Medicine Brian:So many movie references today.

47:12Brian Preston:I was going to say, I was wondering if we could do a rapid fire, but you have to use a movie reference to answer. You have to like, I'm trying to think about.

47:23Cold Medicine Brian:You guys probably could do that, actually.

47:24Brian Preston:Or you have to make an analogy on the spot to answer the question.

47:28Bo Hanson:Hey, somebody's noticed your meathead new addition to the back step back there.

47:33Brian Preston:Well, this is what happened. New set piece. I think Caleb was, or I think our production crew was feeling nervous. Because, like, Brian, there's so much that reflects Brian behind him and hanging out there. They're like, you know, we really need something.

47:45Bo Hanson:We need some meat. Get some meat in here for Bo.

47:49Brian Preston:Yeah, it was either that or a giant protein shaker. I know. So this was the more aesthetic option.

47:54Cold Medicine Brian:But I do like it.

47:55Bo Hanson:Y 'all miss out on so much when we don't have the cameras on. It's because Bo was like, it was so warm that we opened the garage in the gym this morning. It was great. The things that make you happy.

48:07Brian Preston:If you've been working out, if you were a gym worker outer and you've been in the garage worker outer, you've been in the garage all winter long and it's like freezing and you're bundled up, today was the first day that we could actually like open the garage. It was glorious.

48:21Bo Hanson:It's like, I get a visual of like Arnold Schwarzenegger and Conan the Barbarian, like when they're all sitting around the campfire and the garage opening, you're like, whoa, you know, because y 'all are shirtless and all, you know, just meeting it up.

48:34Brian Preston:You ain't wrong.

48:35Cold Medicine Brian:Another reference. Look at that. You wouldn't be good at that segment. All right. Let's do a couple more long form. Let's give the people what they want. This is Ask Money Guy After All. Max C has a question. It says, hi, Money Guy. I'm 24 with 20 % saved for a house down payment. Wow. Should I change to a 5 % down payment and invest the rest? I have 30K in retirement. I'm living at home, and I have a 71K salary.

49:04Bo Hanson:man that's like that's like a choose your own adventure and how rich do I want to be

49:07Brian Preston:yeah um 20 % save for a down payment at 24 is amazing one of the things I'd want to know a little bit more about is what uh what price point of homes are you looking at because you've given us a lot of variables we know your salary so you know so now we know that we can calculate okay, what's a 25 % housing cost? Does that fit in there nicely if we do a 20 % down payment, if we do a 5 % down payment? Because that's going to dictate how much of that you should. But let's say that whether you do 5 % or whether you do 20%, based on the area in which you live, housing is going to be less than 25 % of your gross income.

49:47Brian Preston:Well, then you do have a choice to make. And I would argue for a 24-year-old, if you go to moneyguy.com slash resources and you play with our wealth multiplier, you're going to see every dollar that you can deploy, every dollar that you can put to work is going to be unbelievably powerful for you over the long term. You may arrive at the conclusion that, well, man, yeah, I could put an extra 15 % on my mortgage and it's going to save me some interest. I think 6.1 % is what current mortgage rates are at right now. Or perhaps I could deploy that and I could go make 55 times over on that money or whatever.

50:24Brian Preston:I would work through that analysis to determine, okay, what do you said how rich I want to be, but it's a true answer. What do I really want my financial future to look like?

50:33Bo Hanson:Oh man, I had so many things just flashed in my head when this question came up. Because we just had a Making a Millionaire episode where it was, like I said, I love this couple. That episode just went live on Monday, by the way, where they both, one had a duplex, One had a quadplex, and then they started dating during the pandemic. And they're like, oh, my gosh, we both house hacked, and we made a fortune off of – and it was just a fun little exercise. Max could – because you're 24. You didn't give us enough information. I don't know if you have a significant other. I don't know if you have roommates or considering having roommates.

51:07Bo Hanson:You could totally – one version of yourself could house hack if you have roommates, and you could do a duplex. You could do a quadplex. You could do – you got really cool things that you could do that. And then the other thing, what I didn't hear you say is you had a significant other. And I would, if you're not going to do the house hacking, be careful about buying the house you think you're going to live in before you have a significant other, because they might look at this house differently than you. So I always get nervous because I had an attorney, this has probably been a year now, that came in.

51:36Bo Hanson:He says, hey, I love what you guys do, but I want to do this. And I have a very strong specialty in the legal profession. and he's like, what advice do you have? And I said, who does where you want to be? And he said, oh, that's easy, this person. I was like, well, go try to get a job there and be like, oh, but I bought a house already, so I'm kind of stuck in this community. And I was like, no, well, he screwed up. Because I want you to begin with the end in mind, and that's what, Max, you're 24, don't get caught in the achiever's trap where you feel like the next thing you have to do is to go buy a house to go down that checklist of what achieving or successful people do.

52:15Bo Hanson:Actually make sure it intersects with where you want to be in life. Because at 24, you might need to move. If you can't live in this house for five to seven years, that's a disaster. And for a 24-year-old to lock themselves down without knowing who you're going to marry or what you want to do for a living completely, just measure twice, cut once.

52:35Brian Preston:We actually have a great resource you ought to go check out. It's called our Home Buying Checklist. You know, things to think through before you make this huge life decision. For most folks, a home is the single most expensive thing you will ever spend money on. So you want to make sure that you think about it wisely and you make a well-informed decision before you do that so that you don't have regrets like the attorney that Brian just mentioned.

53:00Cold Medicine Brian:That's great. Great call on the resource. We have the home buying calculator, which is amazing and shows you the math. but the download, the home buying checklist, gives you some of those more intangibles, like really thinking through the decision. So I love that. Maxie, if you would like a MoneyGuy Tumblr as a thank you for asking a question today, just email winner at moneyguy.com.

53:18Brian Preston:You know what's making me happy? There's a lot of comments in here about other folks who get the open garage thing. Like open garage, like it's a, if you know, you know, right? Like it just hits different, man.

53:30Cold Medicine Brian:Love it. All right, next question is from BrickHouse123. It says, hey, Money Guy team, I was wondering if you are ever anticipating on having to increase the recommended savings rate for the FU beyond the current 20 to 25 percent. What factors would go into this decision?

53:50Bo Hanson:This is an easy one. I mean, because look, it's not like we just randomly said, you know what we're feeling? 15 percent. No, no, no, no. I feel like it's sunny. We opened the garage. We could do 30 percent now. No, actually, if you go to moneyguy.com slash resources, what should I save? Can the content team pull it up? How much should I save? I got close. You ought to give me a point. I would have gotten three. We call that a leaner. But seriously, this is the intersection point. If you look at the typical American doesn't start saving and investing until they're in their 30s, that's why you notice very nicely the intersection point is right around that 25%.

54:31Bo Hanson:But here's the reality of this. and if I was restructuring this question, if you're somebody who's 22 years old and you start watching our content and then you go download that resource I just gave, you're like, wait a minute, I get a lot for 15%. So maybe if, because to tell a 22-year-old that they need to be saving and investing 25 % sounds pretty aspirational, but then you go look at the intersection of math and life and you realize, oh, you don't have to because you got in there much sooner than the typical American did. Now, if you're coming across our content and you're 42 years old, you're going to quickly realize, hey, I probably need to have a savings rate that's 30 % or more, depending upon how your employer's money and how much you make is structured.

55:13Bo Hanson:So this thing's already a very mathematical-driven solution, and it's not something that Bo and I just got in a room and said, hey, 25 sounds like that's a quarter of 100, so let's just do that. No, there was actually some math involved in this.

55:28Brian Preston:And, you know, the conventional wisdom used to be save 10%, save 10%, save 10%. And we started looking at it. We're like, man, there's a lot of people that are going to get to retirement. They're going to get there and pensions aren't here and people are saving later. And how's it? 10 % just might not get it done for the average American. If the average American doesn't start saving for retirement until sometime between age 30 and 33, 10 % might not be the right number. And so that's one of the ways we said, hey, let's come up with a number. Let's use the math to assign the highest probability of success for the most amount of people that can employ this specific strategy.

56:05Bo Hanson:Well, I think it's, you know, this is where I love that I've been doing this long enough that I know the history of a lot of things is that I think about the books that inspired me, The Wealthy Barber, The Millionaire Next Door. And like The Wealthy Barber, we all know David is Canadian. So they have a completely different retirement savings structure than we do. So his savings rate was much lower when he wrote that in the mid-90s. And then also there's a different safety net structure than what we have down here in the States. And then I think about Millionaire Next Door. That was back during the pensions because that was also in the mid-90s when that came out.

56:43Bo Hanson:And then even books that have come beside us. Dave came out with Total Money Makeover in the 90s. That was a lot of the same things that was talked about earlier with the pensions were much more prevalent back then. We're like the modern system that really I feel like is the intersection point of what people are doing, what the math says. And I'm proud of that fact because a lot of these things got really popular back in the 90s. But has anybody updated it? So I'd like to say our system is kind of tested and it's ready for you.

57:19Cold Medicine Brian:That's great. Go to moneyguy.com slash resources and scroll down until you see how much can you save. And that will help you see a little bit, a little peek behind the curtain on the math that they were just talking about on how much you should save. And then also BrickHouse123, if you would like a MoneyGuy Tumblr, just email winner at moneyguy.com. All right. Let's do one more from It's Me, Jay Tolentino. It says, my spouse and I are on step seven and want to add a judgment-free spending amount to our budget. Any rules or advice for calculating how much we can spend to bedazzle our basic lives?

58:01Brian Preston:Is this judgment? I'm assuming this is going to be like yours and my judgment-free. Like I can spend this much and you can spend this much. That's how I took it. Is that the way that you interpret it? Yeah. So what's the safe spending number where it's judgment-free? Do you and your wife have that, like, hey, up to this much? We don't – not check in with each other, but it's kind of like, oh, yeah, yeah, no questions asked.

58:28Bo Hanson:First of all, step seven, this is really a step eight question. So you need to make sure you're saving and investing at least 25%. So I'm assuming you're saying that you are beyond that point. and then it's very personal at that point that's why you know the the technical term is prepaid future expenses but i always say the the good time rock and roll title is the abundance goals and that's more of a personal conversation i know you know i don't you know i i just because your question was do we have i mean if my wife went and spent a few thousand bucks on something i'd at least like to know about it sure but um but we don't really have accountability I mean, I get deal.

59:12Brian Preston:One of the, I think one of the great things about having a cash management plan and a systematic savings where you know that you're already funding the savings, in my opinion, it doesn't really matter. We don't have a check-in because we know that we're already like funding the goals. We're already putting money in the pot, in the buckets. We're already giving the way that we want to give. We're already saving the way that we want to save. so that way when it comes to spending there's not really like a lot of tension there because we're highly aligned on stuff now as a courtesy in our marriage and if my sweetheart if you're out there listening I love you she tends to be the bigger spender than I am she gets more utility out of spending than I do but she is like if there's something she wants to hey I want to do this thing to the house or I want to work through this renovation or I want to whatever she certainly like runs it by me but it's not so much because she's worried about me judging her it's because we like to do stuff together We like to have these conversations.

1:00:07Brian Preston:We like to talk about those sorts of things. And so one of the things I'd figure out, and this is just, I'm kind of like getting to the other side of this question. I don't really judge my wife on the things that she wants to spend money on because like, you know, she values things differently than I do, whether it be throw pillows, I put less than zero value on those, or even like hair care, skincare, those sorts of things. And so I want us to feel like, hey, we can be on the same page for the goals that we're working towards. But when it comes to the way that we both individually consume, judgment's not even really a concern.

1:00:44Brian Preston:It doesn't even really come in the lexicon.

1:00:45Bo Hanson:Well, one that came to my mind, thinking about me and my, you know, it's like cars. You know, I'm in my 50s now, and I've been very transparent and confessional. My wife's new car is such a bad decision that we leased it. And I think about the—

1:01:02Brian Preston:You've got to make a bad decision. You don't want to own it. You want to rent that bad decision.

1:01:06Bo Hanson:You don't want to own that bad decision. So there's a difference between making that decision in your 50s versus if we had done that in our early 30s just because we were saving 25%. So I think that that context definitely comes into play as what's the obligation and what's the opportunity cost of anything that you're doing because I don't want people to get to step eight of the financial order of operations when they don't have a lot of money and think, hey, now I can go live this great life. Yeah, I mean, which I guess technically you could as long as you just know what you're getting into and what the tell is for this decision.

1:01:44Bo Hanson:I mean, when I say tell, I mean like how long of an impact. Because obviously car purchases and big purchases is different than throw pillows.

1:01:51Brian Preston:And when I think about bedazzling the basic life, oftentimes I think that's a joint endeavor. I don't think about bedazzling my basic life and her bedazzling her basic life. those are like the things that we do together that make both of our lives better when I kind of go through that

1:02:06Bo Hanson:and even when they're judgment free it's just like still my wife knows I don't love the

1:02:09Brian Preston:oh you're very judgy about the car I think that's why every day she's like I love this car and I'm like okay I'm glad you love it my wife knows how I feel about throw pillows so you know

1:02:19Cold Medicine Brian:did you see the comments someone said Bo bringing up throw pillows again they live rent free in his mind you know it's so funny

1:02:26Brian Preston:because here's the thing This is how you know that trauma sticks around. Oh, dear. She doesn't even really have a throw pillow. I just remember early on in our marriage, that was the thing. We had so many.

1:02:36Cold Medicine Brian:It was like your first realization.

1:02:38Brian Preston:She probably hasn't bought a throw pillow in ages at this point. But from early on in our marriage, it was an issue because I just perceived it as such a ridiculous waste of money.

1:02:48Bo Hanson:Can I tell you something that I've learned? I learned this in the last two weeks on throw pillows. As you get into nicer throw pillows, they don't even come with a pillow. Oh, it's just like the sham.

1:02:59Cold Medicine Brian:No, I'm talking about, yes, even the decorative pillows.

1:03:02Bo Hanson:You think even these little cutesy small pillows. I saw my wife when they arrived, it was just the outside. It's the outside, and then you've got to go buy. When you buy these fancy ones, you're paying a fortune for how it looks, and then you have to go pay a fortune for the filler. How it feels, the comfort, softness level of the pillow. Oh, believe me. I'll show you some websites. It's a hard pass for me.

1:03:25Cold Medicine Brian:someone said throw pillows haunt Bo's dreams and on that note thank you for joining us for this Ask Money Guy show but for real we love answering your questions whether they're long form or rapid fire we love chatting with you about everything from throw pillows to 529 so we will be back here from Tuesday on Tuesday at 10am central answering more of your questions and until then be sure to check out moneyguy.com because we are always adding new resources more to the archive of episodes It's making it more searchable than ever. So moneyguy.com is always there for you, even when we turn the cameras off.

1:03:58Cold Medicine Brian:Thanks for being here.

1:03:59Bo Hanson:Guys, we have a blast. Thanks so much. I'm your host, Brian, joined by Mr. Bo, rest of the content team, Money Guy. Out.

1:04:08Brian 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. A Bound Wealth Management does not render or offer to render personalized investment or tax advice through The Money Guy Show. The information provided is for informational purposes only, may not be suitable for all investors, and does not constitute financial, tax, investment, or legal advice.

1:04:37Brian Preston:All investments involved...

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