Your 401(k) Might Be Costing You Thousands

22:03Brian Preston:So I'm trying to think about, Brian, times when it would not make sense to do that and implement that strategy. Yeah, let me give the two just immediately. And I'm sure just in case my brain is not working as fast as yours, if you come up with additional on top of this. Easy low-lying fruit is you have a horrible 401K with really expensive funds, really high fees, and other things that way outweighs putting the money in there. So that's the first thing. But if you work for a big company and you have a great 401k with low-cost index funds, lots of options, yeah, I think it makes a lot of sense at that point.

22:40There's also, what if your income is not high enough to where you even need to do a backdoor Roth conversion contribution? You know, a lot of people, if your income, and that's why I was scrambling because we're in a brand new tax year, so I don't want to give out bad numbers. But on the spot, I should have already flipped over to this. you can make contributions up to a Roth IRA. This is back in 2025. So I'm sure this has gone up for incomes. Oh, here we are. Here we are. For a 2025,$236 ,000 to$246 ,000 for a married couple. For single, it's$150 ,000 to$165 ,000. So if your income is under those thresholds, you don't have to worry about the structure.

23:28You can just contribute directly to the Roth accounts. But if you're in a higher income situation and you have a really clean 401k with lots of opportunities, I kind of like it. I mean, this is why I resemble this in some ways is that I love the Roth conversion strategies.

23:45Brian Preston:I'm going to give you one from experience where you just want to think through this. Oftentimes, traditional IRAs are just sort of this kind of weird account that like it used to have your attention and then it loses your attention and then it comes back. And so we've seen this with clients where they had a traditional IRA that at some point in time, they recognize, man, I want to do tax deferred savings, but I make too much to do a deductible contribution or I make too much. I already have a 401k, so I can't deduct, but I'm just going to put money in my traditional IRA. And I do that for a few years and not really thinking about it.

24:18Brian Preston:I ended up having some after-tax dollars in my traditional IRA. Well, fast forward in my career and I change jobs and I roll a 401k in. And so now my traditional IRA has this big pot of money in there. It's not uncommon if you have a traditional IRA that there might be some, what we call basis in that. I'm literally thinking about two clients. We were going to do this strategy where we were going to roll their traditionals back into their 401ks. And we just asked them the question, Hey, where'd the traditional money come from? Like, Oh, well, it was a smattering. We used to contribute. And I was like, well, you guys have always worked for large companies, when you contributed, were you doing deductible contributions?

24:56Brian Preston:Like, no, we were just looking for like a tax. We actually forensically went back, I want to say it was like 11 or 12 years on their tax returns and found every single year where they had made a contribution, we were able to unload for each or to uncover for each of them. Like it was something like 60 or $70 ,000 of basis in those traditionals. And so what we were able to do is we were able to roll all the pre-tax money into their 401k, leaving behind just the basis, so like$60 ,000,$70 ,000 of basis, and immediately convert that basis that was already after tax to Roth. Had they not recognized that, had they not caught that, what they would have done is they would have rolled after-tax dollars into a pre-tax account, thereby putting it back inside the tax shelter, causing it to be taxed two times and missing out on tons of Roth opportunity and Roth planning.

25:49Brian Preston:So you want to make sure, Jeff, before you just willy-nilly blanket roll money into your 401k from a traditional, you know where those traditional dollars came from because you don't want to mix up after-tax dollars and pre-tax dollars because there's a big planning opportunity otherwise. Well done. Wow, that was a high five. That was awesome. I mean, because I knew he was going, I was like, there's something I'm probably not coming up with and the basis is a big, big determination. That's going to help somebody and somebody's going to be like, thank goodness I listened to that third point that Bo just shared.

26:21It was literally like hundreds of thousands of dollars a Roth. No, that's a big one. It was a big one.

26:24Brian Preston:It was a big, big one. That's good stuff. Jeff P., I hope that really helps you think through your question. I got really dirty. Your question's got a high five on the answer. That's what you want out of your financial advisor and this is why we say your life starts off financially so simple because building wealth is not necessarily hard or even complicated in the beginning. It's just a matter of making the things as simple and automatic as possible. But then as you have more and more success, things like that happen where all of a sudden your life gets complicated, even though you are trying to keep things structured as simply as possible.

26:59And that's where we'll lead the porch light on. And you can tell we got the chops to make sure you navigate this well. Love it.

27:06Brian Preston:That's good stuff. Alright, your chance to get rapid fire questions in is coming to a close. If you're watching live right now, be sure to put an RF in front of your question. It will be part of our rapid fire segment in just a few minutes. But first, we have Leah Feld 4397 and her question. It says, can you have too many sinking funds? We have a six month emergency fund plus funds for a new car, repairs, travel, etc. Combined, this puts us at $140 ,000 plus in cash. Household income is$225 ,000. They're 32 years old, $400 ,000 saved in retirement. They are crushing it. They are crushing it. So what do you think about all their cash?

27:52Hang on, before y 'all take that off, let me just get, because there's lots of data here. I know you're faster, but go ahead and talk.

28:00Brian Preston:Well, the answer to the question is can you have too many? Absolutely. We did a Making a Millionaire episode. If you've not checked it out, make sure you subscribe right now to the channel so you can get updates every other Monday when we do one of these. Because a lot of people do this. They say, all right, I've got my emergency fund, and I know that I need my three to six months of living expenses. But in addition to that, I might need to replace my car, so I'm going to have an additional sinking fund. But then I might have some home repairs, and I have that. Then I've got this trap. And all of a sudden, and you have these 8, 9, 10, 12 different sinking funds, and you get yourself in a situation like Leah where your household income is$225 ,000 and you have well over half of that amount in cash, which is likely way bigger of a cash cushion than you need because odds are not all of those things are going to hit at once.

28:51Brian Preston:I'm going to buy a new car, and I'm going to get the repairs, and I'm going to have to travel, and I'm going to need to tap into my emergency fund. you're not recognizing that dollars inside of sinking funds can be used for multiple purposes at different times but i think financial mutants we like to compartmentalize we like to have our little nice little chunks but it does get you in the situation where even though you guys are absolutely crushing it you're probably in way more conservative of a posture than you actually to be well i think you're you're focusing on the minutia of it instead it really you're you're focusing on with a fine, like you need to pull the microscope back.

29:28Like you're looking at 10 times magnification where maybe you just need one times and just look at it as a whole so you can get the overview that, hey, what is really do I need the next three years? And then let's look at our emergency funds slash sinking funds in that scope of three years. And then, yes, let's keep that money. But now this thing is starting to get where we have a full year's salary and we don't need that much, especially six figures, multiple six figures, the way it's headed. Yeah, we've probably turned a good behavior into a hyper-focus. And like all things in life, too much of a good thing can all of a sudden turn into a weird obsession or bad thing.

30:12And that's why we've got to have perspective, got to have the why, understand what is the purpose of this. because what I don't want you to do, especially, did we get the age here?

30:20Brian Preston:I think 32 is how old that is. If you're in your early 30, yeah, there it is, 32. I mean, your wealth multiplier at age 32 is still 18 times. So you can imagine if you're misjudging this by$20 ,000,$40 ,000,$50 ,000, all of a sudden, I mean, you're walking away from your future self having hundreds of thousands of dollars working out there in your army of dollar bills. And especially if you're not at step eight, because sometimes if you read Millionaire Mission, I share that cash can be a kind of a contrarian wealth builder, but that's well beyond steps one through seven. That's when you're stacking it up in the background and now you're looking at how do I use cash as a magnifier of wealth by having money when nobody else does during any upcoming downturns.

31:14but if that's not and you're young let's make sure we're not leaving those army of dollar bills sitting on the side of the arms

31:20Brian Preston:32 with 400 ,000 oh yeah we definitely work with us is definitely in your future I mean because that's incredible y 'all well done golf clap I mean that's just really good stuff a golf clap I like that it is true if you ever have the handshake you know because Paul Hollywood has the handshake we got to figure out what we can do I mean I guess Bo high fives everybody. I'm a big high fiver. But maybe he's a high five too much around here. No. So we've got to figure out what our money guy thing is when somebody's done something so well that we... Golf clap doesn't sound right either, but we'll figure it out.

31:59Brian Preston:We'll workshop it. We'll keep workshopping it. I've got some really smart, creative people around us. I don't know. We'll think about it. But as I was saying, it is true that if you ever are at that level of complexity where you just don't know what you don't know and you want to make sure you get it right, go to moneyguy.com and click on Become a Client, and you can just explore what it looks like to become a client of Abound Wealth. We're always here for you when you need us. All right, we have reached that time in the show. Oh, boy. When it is time for our It Does Not Depend Rapid Fire segment where Brian and Bo will answer a series of questions submitted by our live chat today in under a minute, and they are not allowed to use the words it depends.

32:42Brian Preston:All right, and so I want to make sure our production team, you're going to get that timer going for us. Yes, they are. It's a minute combined, right? Like the both of us have to answer inside a 60-seks. So I can't hog it because we know I'm the one that's going to hog the time if we're not careful. I say yes, and here is what I will throw you a bone here. At the end of our questions, we will have a maybe-it-does-depend segment where you can say all the things that you were just dying to say that you couldn't for the sake of time. Love it. Okay? Be careful with your answer. We'll ping pong back and forth who starts.

33:14Brian Preston:So be short. I want to see you do rapid fire. You go first? I'll let you go first. All right. Okay. Here we go. First question from Meris Rantz says, best strategy if employer does not offer a 401k? No 401k best strategy would be saving to a traditional IRA, assuming that you could deduct it. If not, then a Roth IRA, traditional IRA, then after-tax brokerage account. God, I loved it. I mean, you crushed it because that's exactly the order I would do that as well. He's already eased up all his time. What? He just took so long to say, I loved it. I loved it. No, we didn't even hit a minute because, I mean, it was totally the Roth IRA.

33:52I mean, and by the way, let me shake it like it's hot, like it's supposed to be. Because Andy Hill did a great job, but he didn't shake that thing like it was supposed to. When you get the foo, you shake this thing. And then that's what – so you got to hit that Roth just like Bo said. and then when you get out to retirement, since you don't have an employer match, you're going to go hit the traditional IRA, and if you don't have that, you're going to go down here to step seven, and you're going to start doing the after-tax account. Starting off strong.

34:16Brian Preston:You give Brian the minute, he will use the minute. No, we have 50 seconds. We still have 50 seconds. Next up, BP6685 says, 529 or Trump account? Well, I mean, I think you take the free money from the Trump account for sure, because free money is good, but we're finding out, because these things are going to be treated just like normal IRA accounts, so there might be a Roth conversion opportunity in the future, we still think that 529s, go get the free money because we love free money, but then we still love 529s as long as there's a why that education is going to be in the future. Yeah. Yeah. Fred D.

34:50Brian Preston:asks, DCA Roth IRA contributions or lump sum them in January? Lump sum in January, assuming your portfolio has reached the size to where the Roth contribution is immaterial relative to your total portfolio. Yeah, if you've got, and I'll put numbers to it, if you've got over$60 ,000 of investable assets, then you probably should just have the strategy of just lump summing it in there. Unless, now know thyself, if you're one of these persons because it's an annual thing, I love setting up dollar cost averaging. If your income is nowhere near the tippity top of the exclusion of you make too much, then I like setting up automatic behaviors to just buy every month when you get paid.

35:32Brian Preston:Zach P says would you rather a $1.88 beer or$88.01 beers what first of all I have to know what an$88 beer tastes like honestly I had the same thought that's like a fancy beer that's like top tier $1.88 beer I could do 88 beers at this age now college age would have been different that would have been my beer I could last me an entire year. So it would be option two. 88$1 beers would probably be all of my 2026 beer needs. I would have not drank any beer since college. Truthfully, I could probably be in 2026 and 2027. Now, college, that might have made it two weeks. Oh, my goodness. Maybe I shouldn't say it out loud.

36:20Two weeks.

36:22Brian Preston:I'm just not going to ask any more questions on that. Remember, I did go to Spinnaker's and Club La Vila back when I was in high school. So things were a little different. I grew up feral. Amber 62654 asks, is it okay to pull$2 ,000 from the emergency fund to max out my Roth IRA for 2025? Yes, because one of the little-known secrets about Roth is you can get to your basis penalty-free, tax-free, if you have to, assuming that you have more in your emergency fund than just$2 ,000. But don't turn it into a crutch behavior. This needs to be a one-off thing. that when you're running it so close in the beginning of behaviors and setting up good habits, that yeah, I want you to maximize this by April, but then make sure in the next year your emergency fund is big enough that these things don't cross paths as easily.

37:10Love it.

37:11Brian Preston:All right, for these last five, we're going to shorten the time to 20 seconds. Wow, look at y 'all. We're doing too good with one minute that y 'all had to speed it up. I just want to see what will happen. So you have 20 seconds. You can't say it depends, and then I will give you a follow-up at the end. We're not going to need it. You have to say what you need to say. I'm not going to need it either. Maxim B. Ken Camp 3342, that was a serious username, says, why do you say that Roth 401k depends on your marginal tax rate but still encourage backdoor and mega backdoor Roths? Backdoor and mega backdoor come at different times.

37:46Brian Preston:We encourage mega backdoor because whenever you can do Roth tax-free, you should do it. Doing Roth 401k is not tax-free. Well, because, look, if you're in a high-tax bracket, God, I'm seeing... I just self-regulate myself. I need more time on that one. It costs you money to put money in the Roth salary deferral if you have options to do pre-tax. Every dollar you put in saves you 30 cents in taxes. Backdoor Roths is not. You can do pre-tax contributions and still do backdoor Roth. Steve Harvey is making fun of me right now because I couldn't get that one right. See, I did stress you out there. Sorry, Brian.

38:21Brian Preston:Next is from Onshay11. what's Brian's favorite movie? I mean the classic answer is like a Shawshank Redemption is like one but then there's also like we were talking yesterday it came up in a Princess Bride is a good one I mean so it depends on what's your flavor of what you consider awesome Thank You for Smoking I mean that was a good one do you remember that one a few years ago I could give you a list of five I know Bo's gonna say probably Dark Knight I'd like to say I'd like to say Star Wars is Brian's favorite movie Well, I mean, that's... Well, which one, Bo? Come on. What's yours? The Star Wars...

38:58Brian Preston:Yours is not Star Wars. No, no, no. Christopher Nolan, Dark Knight for you. The Dark Knight trilogy was fantastic. It was a good one. Manny G asks, how to determine when enough money is enough money? I mean, it's a personal... I will tell you, this is... Gosh, look at you. You have to knock at you. He's so mad. He wants to say the words. He wants to say the words. When you know who you are, what you value, and what brings you purpose, and your money allows you to be that person. Your brain works so good. That's the abundance definition right there on the levels of wealth. You're so smart. All right, two more.

39:38Brian Preston:What's y 'all's general quote-unquote rule for sudden extra money, like an inheritance, bonus, or a raise? Spend versus saving versus investing. Spend a portion of it if you have something that you felt like you've been deferring in life. we love you saving, pay attention to how much you need to save. We have resources for you. And then,

40:03I was going to say the Goldilocks rule, but I'm going to. I'm not good at this.

40:08Brian Preston:Give, save, spend, and I think you should do all three of them when you have inflows of money. Where you are on your journey depends on how much you put in each. Last but not least, Febreze Me Up asks, who's your favorite Star Wars character? Oh, that's Boba Fett. I mean, I hate what they did with the show. Because if you went to my office and saw how I still have my original characters from the 1970s, the actual action figures. And I used to sleep with that little figurine. I remember I lost him out in the backyard for like two weeks and I was devastated. And then when I found it, it was like a reunited.

40:46It was an incredible thing. so that's an easy one I hate with Disney I love Disney but y 'all know I hate what they did to that character through the series

40:55Brian Preston:Luke Skywalker

40:59Brian Preston:Great pick I'm not good at this That was so fun That's so mean That was so fun for me You realize I felt like we were all over back on the church softball field and Bo is playing pitcher he's playing shortstop you know he's calling which side of the field he's going to hit the ball and then they throw me out in right field and then when the tournament comes, they say, Brian, we brought some ringers in. We're not even going to let you play anymore. So I felt like I was just a fish out of water. My favorite part about the live streams is you being you and telling us all your stories and taking all the time.

41:32Brian Preston:So that was just purely for fun. It's because you know too much. It's really because you know too much. You hear a question. You have too much experience. You can't unwind the thing. I think we literally, if the content team, if my editors had a chance to put it, you could see where my brain broke on some of those questions. You could actually see where the blue screen came up. When you just gave up mid-20 seconds, I did feel bad. I was like, oh, no, I've broken him. No, the blue screen came up. You're like, oh, heck, we're going to have to control-alt-delete this thing. Okay, well, okay, Financial Mutants watching and listening, let us know what you thought.

42:02Brian Preston:I'm thinking 20 seconds might have been too short, but one minute felt a little long. I do think 30, I think we could do 20 seconds felt pressure, but I think I could do 30 seconds in the future. Yeah, so you guys let us know if you like doing this kind of thing to change it up. We could do Bo. This might be, like, you know, we've all had, since I've already self-proclaimed that maybe in my younger years I drank too much. I used to have friends that I would drink one beer to their three beers. So there was people even moving at faster speeds than me back in those days. So Bo could be the same way.

42:33We could restrict Bo to 10 seconds or 20 seconds and me 40 seconds because know thyself and know what we're good at.

42:41Brian Preston:It's like handicapping, right? Yeah, exactly, like a golf stroke. That's a healthier thing than drinking. golf handicap. Oh, no, that was fun. Okay, so now we need to have our maybe-it-does-depend segment. Is there anything else you need to say to wrap that up that you feel like either responses to the game or responses to the questions? No, this is one I do want Brian to speak on because I get this all the time. It's amazing. I'll have a conversation with a potential client, someone who's reaching out, thinking about working with us, and I'll tell them, hey, what's going on? What are your issues?

43:12Brian Preston:And I'm like, hey, tell me your story. Tell me about all the stuff you got going on. And I'll be amazed. I'll be like, hey, I make a super big income, and I got my 401k, and I got my after-tax account, and that's pretty much it. Or maybe I have an old rollover or something. I'm like, oh, you're not doing backdoor Roth IRAs? Oh, no, I don't. And I'm like, why? Why not? And I think it's because people fall into that trap of, well, do I really need to? Because that was the question. If I'm going to do Roth, why wouldn't I just do Roth 401k? I think it does matter. Explain why doing a backdoor Roth versus opting to do a Roth salary deferral are not the same thing.

43:50Brian Preston:You'll see. And it's also, I mean, one of the things I was also, because I love mega backdoor Roth, but I don't do mega backdoor Roth because it doesn't fit for my situation. And what I mean by that is, is that if you're in a really high income tax bracket, you know, high marginal rate, say, you know, because the federal rate is 37%. but then it's truly more than that because you also lose some other things in the background. So it's just like when I do my taxes, it doesn't say I'm paying 37%. The effective rate is actually closer to 40 % because of all the surcharges and those type of things.

44:24And then if you live in a state that has an income tax, I mean, we can get over 50 % really quick. And so you understand very quickly that, man, taking a deduction right now is valuable. if I can save 50 cents on the dollar, essentially the government is funding half of your contribution. And then the thought that is down the road when you retire, especially if you retire before 75 years of age, you might have an opportunity where your income goes way lower, much lower tax bracket. Now we can control the taxation and do a Roth conversion at that point. That's why you're going to want to do traditional 401k contributions, but you still would probably want to do backdoor.

45:04If you could structure your accounts in the ideal way, You then want to consider doing backdoor Roth contributions, meaning doing traditional IRA contributions and then convert them if you have the right account structures. There's a lot that we're leaving unsaid there. And then the reason I don't do, like for myself, a mega backdoor Roth convert, because we could easily add after tax, is it's back to the same thing. I'm in such a high tax bracket, and I have the ability to structure the way a lot of self-employed people can do cash balance plans and other things to where let's get that money out of the 40 % tax bracket.

45:39But if you work for – if you're an executive at a – because we've seen it in a lot of the car manufacturers that we've done 401k consulting for. They have really good 401ks. They're in good tax situations to where a mega backdoor Roth makes a lot of sense for them because of the way their compensation is not so high. And they don't have any ability to control cash balance and all these other things. But, yeah, they ought to get in there and get those huge Roth conversion opportunities. Love that.

46:08Brian Preston:Good stuff. Good follow-up. Glad we included the follow-up. No, I'm a good financial planner. I just – my brain works at a different speed. I mean, it's just I can't – You're good. I don't know. It ties into my slow storytelling draw. You can't make this stuff. You can't bake a cake in five minutes. You just can't do it. No matter how much you want that chocolate cake, it's going to take a while for it to heat up in the oven and rise and do all the things it does. True words. I love it. This episode is brought to you by Indeed. Stop waiting around for the perfect candidate. Instead, use Indeed Sponsored Jobs to find the right people with the right skills fast.

46:45Brian Preston:It's a simple way to make sure your listing is the first candidate C. According to Indeed data, sponsored jobs have four times more applicants than non-sponsored jobs. So go build your dream team today with Indeed. Get a$75 sponsored job credit at indeed.com slash podcast. Terms and conditions apply. This episode is brought to you by Nespresso. Introducing Virtual Up, the latest in a long line of innovation from Nespresso. It's innovation you can touch, sense, and taste in every single cup. With a three-second start, easy open lever, and dedicated brew over ice button, it's even easier to enjoy your coffee your way.

47:25Brian Preston:Sip for yourself. Shop Virtuo up exclusively at Nespresso.com. Someone in the chat was like, give Brian time to think. I should have said biscuits. Biscuits. There you go. Very on brand. All right. Want to do another just normal Ask Money Guy question? It's going to be hard to talk for more than 20 seconds. But can we talk about the caper that I pulled off last week? The caper? Okay. Sure. Why not? Y 'all know Nashville was a hot mess. No, it was freezing here. It was a freezing mess. It was literally zero degrees. I took my daughter to school today. Hot mess could not be a worse adjective. The public school system was still closed yesterday, so I went up the main road to take my daughter to school, and I had no trouble.

48:09Today the public school system is back in, So I tried to go my back roads to avoid all the traffic of the school traffic. And halfway to work, roads are still closed. There are trees literally everywhere. If you live in – now, Bo, somehow, he lives in a part of the county that all their utilities are buried under the ground, and they had no trouble whatsoever. But my neck of the woods, I mean, it was catastrophic. I mean, my neighborhood was without power for three days. And the caper I pulled off is that I saw the storm. and this is by the way this is part of my my heritage I've done this before because I remember when we lived in Atlanta was that 2014 I can't remember but it was you know it's the one when Saturday Night Live was making fun of us because it said we just go to the safest place and go on Interstate 75 because this whole city just was a hot mess in Atlanta for that because in the south we're just not wired for ice and snow and all the other stuff I know y 'all everybody I was about to make fun of my Yankee friends but I won't say what they tell me.

49:12But back then in Atlanta, my wife woke me up at 5 in the morning and said, I got a crazy idea. This snowstorm is going to probably take out school for the week. Why don't we load up the kids and the pets and let's go down to Florida, go to Orlando. And we had such a great time doing it back in 2014, 2015, that this year when that storm proposal came through, I said, why don't we fly down to Florida and do it again? Because we've already got a history that we We totally felt like we were getting away with something when we were down in Florida, while everybody was struggling. Even called my college daughter and said, hey, you can't come home and wash laundry this weekend because we're shutting off the water to the house.

49:52And she says, well, can I go? And we're like, yeah, come on. Yeah, you can't. We'll redo. And I think it's because she had such warm memories of us doing this in 2014 because we really did feel like we were getting away. And once again, we got down to Florida. And I'm not saying this to rub it because, I mean, our neighbors were making fun of us. All of our neighbors in Tennessee were like, you guys are nuts. But on day two or three when the power was still struggling, they were like, can we come? And we had some neighbors come stay with us down in Florida too. But I felt like we got away with something.

50:22And the memory-making with family members. My kids will never forget what we got to do last week.

50:27Brian Preston:Well, we're happy that worked well. We missed you here, though. Well, I felt bad for Andy because I was planning. I couldn't. Kudos. Andy's a trooper. because all through, I told Reby because everything went bad here in Nashville pretty quick and I called Reby because I don't trust Bo's opinion because I knew he was going to tell me he was going to be here because he's got a monster truck. Bo's got this macho truck that can go anywhere and I think he gets excited when the weather turns a certain way because he feels like you don't have to lock the hubs anymore but he likes getting out there and getting with it.

50:57He even told me he's got brand new tires and he's really excited to see what these things can do. So I trusted Reby and I called her and I was like, look, this is the situation. I was like, surely Andy's not coming in town still because we've had all kinds of crazy. She's like, no, Andy's getting on a plane. And I was like, God bless him. But I was like, I don't think that with school being out for the rest of the week and us still not even having power at the house, I'm not coming back with no power because I love Andy, but I like electricity more. Seriously. I mean, because you can't do anything without electricity.

51:30Brian Preston:I like Andy, but I love electricity. No, it was a hot mess in my neighborhood. Oh, yeah. I mean, I didn't hear you guys offering to let me and my crew come stay at y 'all's house. You're welcome at the Hanson household anytime, brother. I didn't think you wanted to. You were in Florida. I was in a good place down there with the mouse. I still owe you one, honestly. I owe you a few months rent-free stay at the Hanson house. No, I didn't want to. Truthfully, Beau had his own. You had your own issues. Oh, yeah. Cools leak in and all kind of other stuff. It was rough. It was really, really. Water and cold temperatures is not great.

52:01Brian Preston:Fun times. I didn't mean to take, but it's just that it feels crazy at a moment in time. So much crazy stuff happened last week in Nashville. Not to share it with the audience. We hadn't even talked about all that stuff with you guys either. Well, there you go. Now you know where Brian was last week. Did we not put any pictures on social media? I guess not. No, we did. We actually put in our email list. Yeah, we did. My wife actually said, don't post those pictures. Why? She's like, let's go see Mean with everybody struggling through stuff. And look, my neighbors were struggling, but it's one of those things.

52:37Us, our little bit of happiness was not meant to be negative. It was just our caper.

52:42Brian Preston:You're just on a caper. It's all good. I'm glad you're happy. We'll probably do it again next year. Next ice storm comes through in 15 years, we'll be probably on a plane headed to Florida. Noted. We'll plan ahead. All right. Do you want to do one more question? Or maybe a couple. We'll see. Yeah. We've got one from. Is Andy from Detroit? Where did we decide Andy was from? He's from Michigan, Detroit? Michigan, yeah. I'm forgetting the United City. So they're wired differently. He's just like, oh, it's an ice storm. No big deal. It's a big deal down here. Okay. I'm going to butcher this username, but we're going to go for it.

53:19Brian Preston:Edu Brissonor? Edu Brissonor asks, hi, you all. Thanks for what you do. I'm 28, married with one kid. Our mortgage is a 30-year at 6.625%. Does it count as high-interest debt, or is it further down the foo? No debt except the mortgage. Thank you. E-Dub, this is a pretty easy question in my mind because oftentimes with mortgages, I think the mortgages are going to count as low-interest debt. I think they're going to fall into step nine. I don't think they're going to be step three, high-interest. interest, and even 6.625 % isn't even high relative to some new homeowners over the last two or three years.

54:02Brian Preston:A lot of folks still have mortgage rates at like 7%, 7.5%. For a 28-year-old at that rate, I do not consider that to be high interest. No, I agree. Mortgages are kind of a unique thing in the fact because you have the option to refinance. And you even have the option. Now, we're not quite there yet with 6.6%, but once we get below 1%, you can start refinancing with no cost, meaning that the lender, you take a little bit of a premium on the rate, and once you get in a falling interest rate environment, which some indicators are that we might be headed that way, you don't refinance once. You might be able to refinance two or three times.

54:41So that way, if you feel like you missed it, you can do it again as long as the rates are still going down. With this exception, though, I need everybody to understand, it's a math thing, is that just because you refinance to take advantage of a lower interest rate, do not reset the term of your loan, meaning that you don't go from a 30-year mortgage that you've been paying for four years, refinance into another 30-year, and then pay the terms like it's 30 years. No, you need to pay this at least like it's a 26-year mortgage or 25 or even a 20-year, whatever fits into your financial situation.

55:14The resetting of the amortization is the biggest mistake people make. And sometimes it even makes sense to pay the closing costs. You have to do the math. We probably have some resources on the website where you can figure out the breakeven analysis of whether you should take a premium on the rate or if you should just pay the closing costs on the refinance. I think that over the coming year to 18 months, this is going to be a hot, hot issue that we're going to keep you front and center on is when should you take advantage of refinancing your mortgage.

55:45Brian Preston:We do have a deliverable, a tool out there for you if you go to moneyguy.com slash resource or if you just go to moneyguy.com and you can search in our search bar, refinance. You'll find a lot of our content that we've released on that because you want to make sure you make that decision well. We should do a calculator for refinancing. You think so? I think so. I think that would be a powerful calculator. Ruby's like, you guys love coming up with the ideas, I'm actually the rubber who meets the road. That's what I'm here for. That's what I'm here for. All right. Let's go to another question from Asorn.

56:24Brian Preston:It says, I'm starting a job at a large private tech company. A good percentage of my pay is in these private RSUs with yearly tenders. How would should I hedge against this income risk that comes?

56:42Brian Preston:save like a banshee outside of the private shares, right? So when you think about your comp package, right, I imagine you get some sort of salary, right? So I'm just going to use round numbers because it's easy for me to think. Let's say you get a$100 ,000 salary. But let's say that another big chunk of your comp comes in these private shares. Let's say it's another$100 ,000. You have like a$200 ,000 a year income earner, or most likely it's going to vest over a couple years, and so it's not going to be the full, but you get the idea. Realistically, when it comes to budgeting and it comes to saving, it comes to you thinking about how you structure your financial life, I don't want you to behave and act like someone who makes$200 ,000 a year.

57:25Brian Preston:I want you to behave and act like someone who makes$100 ,000 a year, assuming those private shares are not liquid and there's nothing you can do with them. Even though you might be saving them and they might be going towards your future, with private companies, we never know exactly how that story is going to end. So what I want you to be careful of is having all of your wealth tied up and all of your wealth built up in this private enterprise where also your human capital is. Because if things go bad, you could lose your job, you could lose the value of your portfolio and be in a really, really rough spot.

57:59Brian Preston:So what I want to see you doing is following the financial order of operations, building your assets and your accounts outside of the private shares. And then if you hit a liquidation event or if the company goes IPO, well, that's all going to be gravy. And that's then going to become part of your financial life that's actually tangible that you can use. Yeah. I mean, the biggest takeaway, because I'm thinking of all of our clients that we've dealt with, you know, RSUs are grants. So you made the decision to probably take less pay so that you Because you were building in that these RSUs were going to hopefully have some value for you.

58:33But we've had clients that had stock option choices, too, where they could defer up to a very high percentage. And some of these really paid off. The big takeaway I always share with people is don't have all of your human capital tied into the exact same place where you're trying to build investment capital. But concentration can create huge, huge wealth over term. So it's a balancing act. and that's why I would at least make sure that you had 15 % I'd prefer 25 % but you might have taken a lower pay structure because of the RSUs but that's why I have to give you a bottom threshold there a minimum of at least 15 % that you're saving and investing outside of the company and then try to get that to 25 % as fast as possible because I don't know if you have the win-win or the best of both worlds is where their company hits.

59:27You turn into a huge windfall wealth opportunity with the RSUs, but then also you're protected over here with your other savings that you get both. Now, if it goes bad and sideways, at least if you're doing the 15 % to 25 % outside of your employer when it goes bad, if it went bad, you wouldn't be just left holding the bag and feel like you lost everything.

59:49Brian Preston:That's right. That's great. It's a balancing act. It really is. And we've helped clients with those type of situations because we try to take into account the math of the moment because some of these employers really give you incredible opportunities with how you structure these things. So we try to maximize that, but also not just put ourselves out there completely naked. Asorn, thanks for the question. We're glad that you're here asking it and helping you think through your personal financial situation because personal finance is personal. and that's why we love answering your questions live every Tuesday at 10 a.m.

1:00:23Brian Preston:Central. And we will be back next Tuesday. But until then, be sure to go to moneyguy.com slash resources, take advantage of all of our free stuff, our calculators, our downloads, plus our articles, episode archives, and ultimate guides that will deep dive on a lot of the topics that we touched on today. So be sure to check out moneyguy.com. We tried to make it really searchable and useful just for you so you can continue these conversations in your own life. Guys, glad to be back in the saddle here. We have a blast doing this live content. Thank you for being a part of it. We don't take it for granted.

1:00:57We just had a big planning session, off-site planning session yesterday. Can't wait to share some of the great stuff. You have no idea how excited I am to share some of the things that we've come up with for 2026. You guys make it all possible. I'm your host, Brian. Joined by Mr. Bo. Joined by Reby and the rest of the content crew that you can't even see that's sitting all around here, and we have a blast making this type of content. Money Guy, out.

1:01:22Brian Preston:The Money Guy Show is hosted by Brian Presson and Bo Hanson. Brian and Bo are partners with Abound Wealth Management. Abound Wealth Management is a registered investment advisory firm regulated by the Securities and Exchange Commission in accordance and compliance with the securities laws and regulations. Abound Wealth Management does not render or offer to render personalized investment or tax advice through The Money Guy Show. The information provided is for informational purposes only. may not be suitable for all investors, and does not constitute financial, tax, investment, or legal advice.

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