Speaker 1: Episode four ten, How much Cash should You Have Saved?
Speaker 1: With Brian Preston of The Money Guy.
Speaker 2: Welcome to the Frugal Friends podcast, where you'll learn to
Speaker 2: save money, embrace simplicity, and live your life. Here your
Speaker 2: hosts Jen and Jill.
Speaker 1: Welcome to the Frugal Friends podcast. My name is Jen,
Speaker 1: my name is Jill, and today we are talking about cold,
Speaker 1: hard cash. How much should you have? How much do
Speaker 1: you want to have? What can it do for you?
Speaker 1: So many people talk about how sexy investing is, and
Speaker 1: nobody talks about how sexy cash is. Right, So, but
Speaker 1: how much should you have? And that's what we're talking
Speaker 1: about today with Brian Preston. He is a financial advisor,
Speaker 1: he's one of the host of The Money Guy show,
Speaker 1: and he has so much to say on so many topics,
Speaker 1: so we thought we'd ask him about the least interesting one.
Speaker 3: But first, this episode is brought to you by Chippies,
Speaker 3: salty crunchy goodness that no sandwiches complete without. Kind of
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Speaker 3: don't wait to treat yourself to all the freebies, savings
Speaker 3: tips and spending hacks in our free newsletter called the
Speaker 3: Friend Letter Virgal Friends podcast dot com. To sign up
Speaker 3: get them in your inbox. Chippies the only thing that
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Speaker 1: That is offensive, as somebody who makes peanut butter and
Speaker 1: jelly sandwich every single day of her life. Not for
Speaker 1: myself always, but I chippies. Chippies are the investments of
Speaker 1: the snack world, right, So what would cash be.
Speaker 4: Just the peanut butter and jelly cash is.
Speaker 1: The peanut butter crackers. Peanut butter crackers are bad. They're
Speaker 1: not a good snack. They're not a good in addition
Speaker 1: to a sandwich.
Speaker 4: Why is this offensive to you?
Speaker 1: That?
Speaker 4: Were you not serving chippies with your peanut butter and
Speaker 4: jelly sandwiches.
Speaker 1: Not for my child, I serve goldfish.
Speaker 4: Oh yeah, that's good. That's fine. That's fine for them.
Speaker 3: I'm talking about for grown adults, for grown women. We
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Speaker 1: All right, let's talk about cash. We're talking so a lot.
Speaker 1: When you hear about cash, you hear about save a
Speaker 1: starter emergency fund save a full emergency fund, and we
Speaker 1: don't we don't really talk about cash savings outside of that,
Speaker 1: we maybe talked about sinking funds. We're using different verbiage
Speaker 1: in this conversation to try and get your head out
Speaker 1: of the traditional do this do that kind of rhetoric
Speaker 1: and make you really think about how much cash do
Speaker 1: I need to be saving in my cit high Yield
Speaker 1: Savings account Frugal friendspodcast dot com, slash cit SO. And
Speaker 1: we're going to do that with our friend Brian Preston
Speaker 1: of The Money Guy Show on YouTube and podcast. He
Speaker 1: is a brilliant financial advisor, has a team of forty
Speaker 1: people you know at their advisory firm, and he just
Speaker 1: wrote a book after creating free content since two thousand
Speaker 1: and six, which if you've ever created content, you know
Speaker 1: that's a long time to be in the game. So
Speaker 1: he has seen the rise and fall of a lot
Speaker 1: of financial fads. He's been in the game for a
Speaker 1: long time. And he's written a book called Millionaire Mission
Speaker 1: A nine steps them to level up your finances and
Speaker 1: build wealth. And so he has spent twenty five years
Speaker 1: financial planning. So they have over six hundred thousand followers
Speaker 1: across all their social channels. So we are just going
Speaker 1: to talk about one part of that. Actually it's two
Speaker 1: parts of the nine step system, and it's the savings part,
Speaker 1: so we.
Speaker 4: Do get to a little bit of investing.
Speaker 3: So we don't want to totally throw you off there,
Speaker 3: but super great conversation.
Speaker 4: Let's get into it.
Speaker 1: Brian, Welcome to Frugal Friends podcast. We are delighted to
Speaker 1: have you on. Even after several technical difficulties, the Internet
Speaker 1: has still provided us a safe haven for this interview
Speaker 1: and we are grateful.
Speaker 5: Haven't we all had those problems. Any content creator knows exactly.
Speaker 5: The ghosts of the machine is a real thing. So
Speaker 5: Jin Jill, thank you so much for having me on.
Speaker 5: I'm super excited about this.
Speaker 4: It's a delight.
Speaker 3: I'm so glad we persevered, especially because this is such
Speaker 3: a top of mine question for people how much should
Speaker 3: I have saved? And of course we know that there's
Speaker 3: not some pie in the sky number, but it's helpful
Speaker 3: to talk with experts on what could we be aimed
Speaker 3: for because without that aim we're going to be kind
Speaker 3: of a little bit floundering.
Speaker 4: So really, please, this conversation finally happen.
Speaker 1: Yes, absolutely, so you were we're talking a little bit
Speaker 1: about the stuff that's in your book, and it's only
Speaker 1: like one sliver of it, right, the savings parts. So
Speaker 1: let's get into that. Though. You say the first step
Speaker 1: to becoming a millionaire is covering your deductibles, So like,
Speaker 1: how did you Because everybody says a starter emergency fund
Speaker 1: should be different for different reasons, how did you land
Speaker 1: on that and how do we do it?
Speaker 5: Well? Look, I'm not the first one to come up
Speaker 5: with a system on how to handle your money. It's
Speaker 5: just the but I think it's my thirty years of
Speaker 5: managing money, doing feeling, financial planning, and then even my
Speaker 5: own journey from pretty humble beginnings to building wealth, and
Speaker 5: I started thinking about what actually derails people from just
Speaker 5: getting out of the starting gates, and really it's the emergencies.
Speaker 5: It's the if you look at how many bankruptcies are
Speaker 5: caused by medical things or medical issues where people can't
Speaker 5: pay bills, you quickly realize that if you want to
Speaker 5: give yourself a head start or make sure your journey
Speaker 5: into financial freedom doesn't get derailed, we've got to cover
Speaker 5: the big catastrophic risk first. This is why when you
Speaker 5: see a system that says one thousand dollars or two thousand,
Speaker 5: that might be enough, but why don't we kind of
Speaker 5: make you bulletproof to a degree. And what I came
Speaker 5: up with is, you know what, the first thing that
Speaker 5: you could do is just figure out what your highest
Speaker 5: insurance deductible is, since we're going hopefully a good financial
Speaker 5: mutant is going to ensure a way any of these
Speaker 5: catastrophic things. So go right down, what is your deductible
Speaker 5: on your renter policy or your homeowner policy, your auto policy,
Speaker 5: or your medical policy at work. And then whatever the
Speaker 5: highest number is, that is the number you should have
Speaker 5: in step one, because that then lets you kind of
Speaker 5: be protected from the big catastrophic risk that could derail you,
Speaker 5: and then let you move on to the wealth building part,
Speaker 5: where you start letting your money work and invest in
Speaker 5: paying off debt and so forth.
Speaker 4: Nice.
Speaker 1: What do you usually find is like an average among
Speaker 1: your clients of what that highest deductible is.
Speaker 5: Well, it depends, I mean, because the thing is is
Speaker 5: that health insurance has gotten to be a harder and
Speaker 5: harder finance issue for everyone. I mean here in the office,
Speaker 5: because you know, I'm up to close to forty employees
Speaker 5: now is that health insurance is one of the most
Speaker 5: expensive things I pay for and one of the most
Speaker 5: hated things that my employees and I pay for. So
Speaker 5: it's it's ours is even though I'm subsidizing it heavily,
Speaker 5: it still might be you know, three to four thousand dollars,
Speaker 5: whereas I think if you work for like a Fortune
Speaker 5: five hundred company that has that traditional health insurance plan,
Speaker 5: maybe it's only fifteen hundred dollars. So that's why it
Speaker 5: is important to actually don't skip the step of saying, hey,
Speaker 5: let's just do a thousand or two thousand. I'm sure
Speaker 5: that's enough. No, actually go pull the documents and see
Speaker 5: what your insurance deductibles are so you don't find yourself
Speaker 5: in an oopsey situation, especially if you're in one of
Speaker 5: those high deductible health plans that put more of it
Speaker 5: on you so that you can have lower insurance premiums
Speaker 5: on the monthly basis.
Speaker 1: Yeah, it is so interesting because so many people choose
Speaker 1: a high deductible plan so they have access to a
Speaker 1: health savings account yep, without realizing like the difference it's
Speaker 1: going to be in the deductible like our deductible I
Speaker 1: think is like a hovering around five thousand. That's that's
Speaker 1: our family deductible, So like, yeah, that's that's quite a bit,
Speaker 1: but it would cover there's literally no emergency for us
Speaker 1: that would be more than five thousand. I think of
Speaker 1: like things like if your AC goes out in the
Speaker 1: middle of July, like being able to afford emergency repair.
Speaker 1: That's like kind of like my biggest concern for my
Speaker 1: emergency fund. But yeah, it can It's very much can Berry.
Speaker 1: And I think like the health insurance is probably the
Speaker 1: biggest that I've seen.
Speaker 3: Yeah, I think it's such a helpful metric because historically
Speaker 3: I have viewed the medical deductible as kind of the
Speaker 3: baseline for what you should base your emergency fund off of.
Speaker 3: But it's really helpful to hear you say all of
Speaker 3: your other types of insurances, even renter homeowner car insurance,
Speaker 3: these are pieces I have not considered factoring into it. Granted,
Speaker 3: those deductibles are much lower than my medical, but I
Speaker 3: think it's really helpful to pull it on altogether. And
Speaker 3: you kind of described that as almost like the baseline.
Speaker 3: I'm curious if there's anything else that you would describe
Speaker 3: as being a part of these emergency reservesen just mentioned. Sure,
Speaker 3: I mean, well, a see, but I don't know what's
Speaker 3: your definition.
Speaker 5: You make a good point, though, and this is why
Speaker 5: in the financial order of operations that my non step system.
Speaker 5: Of course, everybody who's watching listening this can go to
Speaker 5: money dot com, slash resources download it completely free, and
Speaker 5: then of course there's millionaire mission. But cash reserves specifically
Speaker 5: gets two steps in my system. And what I mean
Speaker 5: by that we just talked about highest deductible covered is
Speaker 5: step one. That's just so your life doesn't get in
Speaker 5: the financial ditch for an unforeseen emergency that could happen,
Speaker 5: especially medical or a car accident or something like that.
Speaker 5: But then that also frees you up. Let's quickly talk
Speaker 5: about steps two and three. Step two is the employer match.
Speaker 5: You know, I'm always shocked. We've done some research, and
Speaker 5: depend on what study you look at, between thirty twenty
Speaker 5: to thirty percent of participants or employees that have access
Speaker 5: to a four to one K don't max out their match.
Speaker 5: And if your employers offering you fifty cents on the
Speaker 5: dollar or dollar for dollar matching, that's like a fifty
Speaker 5: percent or one hundred percent guaranteed rate of return. There's
Speaker 5: just very few things that are that strong and that
Speaker 5: important for your financial future. So that's why that's step two,
Speaker 5: even before paying off in step three the high interest debt. Now, look,
Speaker 5: credit cards right now are charging over twenty percent. It's
Speaker 5: hard to get ahead when you're paying twice as much
Speaker 5: an interest to your credit card company is what you're
Speaker 5: hoping to earn on your investments. So that's why it
Speaker 5: is important to conquer those those punitive debts as fast
Speaker 5: as possible, but don't leave behind the highest deductible cover,
Speaker 5: don't leave behind the fifty to one hundred percent guaranteed
Speaker 5: rate of return by your employer. But then, of course
Speaker 5: pay off those high interest debts. But then that tells
Speaker 5: me to move to step four, which is that second
Speaker 5: cash option in my system, which is expand your emergency
Speaker 5: reserves or rainy day done right, because not all emergencies
Speaker 5: are the healthcare type or the auto accident. You know,
Speaker 5: I make the example in the book that maybe you
Speaker 5: drop your iPhone into the commode by accident. You know,
Speaker 5: there's things that can happen that cause trouble, or the
Speaker 5: hot water heater goes out in your house. You still
Speaker 5: need to be able to have emergencies the money to
Speaker 5: cover that, plus what happens if you get laid off
Speaker 5: and you need something to cover three six, maybe even
Speaker 5: beyond that if you work in an industry that's harder
Speaker 5: to cover, or you have more people that are requiring
Speaker 5: your income that are counting on you. That's why we
Speaker 5: have two cash reserve setups within the financial order of operations.
Speaker 4: Yeah, that's a helpful delineation and kind.
Speaker 3: Of the timeline of this can wait when we talk
Speaker 3: about prioritization, because most of us can't do all of
Speaker 3: it all at once, and so having some of these
Speaker 3: other voices helping us to discern what is a good
Speaker 3: order for my money when it's not unlimited, and being
Speaker 3: able to define that. Some of it does have to
Speaker 3: do with being out of work, and some of it
Speaker 3: does have to do with these kind of nuisances. They're
Speaker 3: not like you say, a medical emergency, but you still
Speaker 3: need to pay for them quickly. I mean like maybe
Speaker 3: you could be without AC for a little bit of time.
Speaker 3: You won't die necessarily, but.
Speaker 4: You do want to have the money.
Speaker 1: You still die in the summer, which is why this
Speaker 1: is my biggest fear. I would like to know if
Speaker 1: there are any but from what you've seen with your clients, like,
Speaker 1: are there any emergencies that have come up or people
Speaker 1: have had to use their emergency fund where you were like,
Speaker 1: oh my gosh, I would have never thought of that.
Speaker 1: I have never thought that as an emergency, like would happen?
Speaker 5: Well, I mean they're like, we just did our annual
Speaker 5: wealth survey for all of our clients and we asked
Speaker 5: them and I think this this is probably a little
Speaker 5: different than what you mean, but I still think it's
Speaker 5: a pretty cool thing because it shows the power of
Speaker 5: having cash as well as having resources and following a
Speaker 5: good system. Is like we ask clients, we say, money
Speaker 5: is no more than it's just a tool. That is,
Speaker 5: it's not it's not something that you centralize your life,
Speaker 5: but it is a very effective tool to help you
Speaker 5: fulfill things. And we asked our clients what are the
Speaker 5: things that money is a tool, have really helped you with?
Speaker 5: And one of my favorite things was how many in
Speaker 5: vitro fertilization people shared that they they had they were
Speaker 5: having troubles growing their family. That so that in its
Speaker 5: own right, that's an emergency because we all know that there's,
Speaker 5: you know, this season of life that you're you're, you're, you're,
Speaker 5: you're having children, other things, And I think it's so
Speaker 5: awesome that you know, what if something like that happens
Speaker 5: in your life, and it's nice if you have resources
Speaker 5: or you have savings so you can figure out where
Speaker 5: to prioritize your life. Of course, there's always the cash
Speaker 5: as a wealth builder as well, so I think about
Speaker 5: even in my own life, and I detail this in
Speaker 5: Millionaire Mission too, is cash can be a contra wealth builder,
Speaker 5: meaning contra in the fact that people just don't think
Speaker 5: about it. It's a sleeper, but when everybody else is broke,
Speaker 5: think about collapses of like two thousand and eight with
Speaker 5: a great recession and the stock markets getting beaten up.
Speaker 5: I have a friend who bought five thousand dollars worth
Speaker 5: of applestock in two thousand and eight. That's now where
Speaker 5: he still owns it. By the way, I can see
Speaker 5: his accounts and it's worth close to half a million
Speaker 5: dollars because he had cash to buy when others didn't.
Speaker 5: I think about the fact that, like this building that
Speaker 5: we're recording it, I was able to buy this because
Speaker 5: we had cash because during the pandemic the current owner,
Speaker 5: the owner before us was kind of nervous about some things.
Speaker 5: So it's not uncommon that cash can be that sleeper
Speaker 5: wealth builder. But you don't even get those opportunities unless
Speaker 5: you're at least practicing having cash reserves. I'm always shocked,
Speaker 5: and you'll probably keep up with this stat too. Bank
Speaker 5: Rate every year releases what percentage of Americans cannot come
Speaker 5: up with one thousand dollars? And you know, I start
Speaker 5: annoying this team here because I'm like, have they released
Speaker 5: it yet? Because you can set your clock it's going
Speaker 5: to be around sixty percent of Americans can't come up
Speaker 5: with one thousand dollars. This year it's fifty six percent.
Speaker 5: So I'm just telling you the majority of our peers
Speaker 5: are not keeping cash and that that really, you know,
Speaker 5: limits your ability to build wealth and resources. And I
Speaker 5: even think people are good with money make a mistake
Speaker 5: because they think they have access to cash, so they'll
Speaker 5: instead of actually having cash reserves, They'll say, well, I
Speaker 5: have an investment portfolio that could always liquidate, or they
Speaker 5: think I have a home equity lot that I could
Speaker 5: at least write a check off of and I'm telling
Speaker 5: you I've been there, done that, made those mistakes. You
Speaker 5: won't to actually have legitimate cash reserves. That's why it
Speaker 5: gets two steps in our system.
Speaker 1: That's such, that's such a new concept, like not an
Speaker 1: emergency fund, not just for bad emergencies, but for emergency
Speaker 1: opportunities because that like something similar happened to us. We
Speaker 1: had we are airbnb hosts, and when Airbnb went on
Speaker 1: the stock market, we had the opportunity to buy it
Speaker 1: at IPO and like we're not connected in any way,
Speaker 1: like we don't have the opportunity to buy IPOs ever,
Speaker 1: so like we had cash that we could just you know,
Speaker 1: buy some of that, And yeah, you're right, Like that's
Speaker 1: we should have it for emergency opportunities as well, like
Speaker 1: unforeseen opportunities. What a what a great refrain.
Speaker 5: Yeah, I think this is one of the unique things,
Speaker 5: and this is realized. I actually work in the industry.
Speaker 5: I have my own journey that I've built and I've
Speaker 5: tried to share. I've thrown the kitchen sink at sharing
Speaker 5: all these unique things that I've kind of picked up
Speaker 5: with myself and my clients. Because I think that that
Speaker 5: is a contra or a different mindset than most people
Speaker 5: think about cash. They think about it's boring. You know,
Speaker 5: cash is trash, but not not if you really understand
Speaker 5: the power of having resources when everybody else doesn't. That's
Speaker 5: why in the book, I actually I say that cash
Speaker 5: is like the air we breathe. We all take it
Speaker 5: for granted until you're underwater. And that's the truth. That's
Speaker 5: the reality that most Americans get themselves into that situation.
Speaker 5: So you cannot don't respect the access to cash or
Speaker 5: having the actual cash on hand.
Speaker 1: So how do we know when it's time to decrease
Speaker 1: or increase the amount we have in cash? As life
Speaker 1: of alves because there is kind of a law of
Speaker 1: diminishing returns, right, So like, how do we gauge how
Speaker 1: much cash to be saving?
Speaker 5: Yeah, we're having that keep point cash. The whole purpose is, yes,
Speaker 5: it can be a wealth builder, but also it's just
Speaker 5: to keep your financial life out of the ditch. So
Speaker 5: you have to you're right. I mean, I don't want
Speaker 5: everybody to have sixty percent of their money in cash
Speaker 5: waiting for the next failure, because you'll be waiting a
Speaker 5: long time. Typically, markets in the financial world is up
Speaker 5: eight out of ten years, so you actually do want
Speaker 5: to make sure that you're growing your wealth and investing
Speaker 5: for the long term. So when people ask me how much,
Speaker 5: and that's why I spent on an entire section of
Speaker 5: how to do rainy day done right, is that think
Speaker 5: about these type of things. Are you three months or
Speaker 5: you six months? You hear all these financial commentators say
Speaker 5: three to six months, but they never give you the clarification.
Speaker 5: And I'm willing to actually go a little beyond common
Speaker 5: sense on this, and I always say, look, if you're
Speaker 5: like an accountant or an engineer, and there's jobs in
Speaker 5: every town and you could replace your job very easily.
Speaker 5: It's a very portable job. You know, three months, especially
Speaker 5: if you're a single person, you probably could do three
Speaker 5: months cash reserves no problem. If you live in a
Speaker 5: household where both spouses work and have good incomes, you
Speaker 5: can be closer to three months, because if one gets
Speaker 5: laid off, you've got the fill in from the other spouse. However,
Speaker 5: if you live in a house where maybe one spouse
Speaker 5: is stay at home raising the kids and then the
Speaker 5: other spouse is out there working, you probably want to
Speaker 5: go six months and beyond. If you're if you work
Speaker 5: for a company and you're in a high paid job,
Speaker 5: and your job you know, hey, look I make a
Speaker 5: great living, but it's very focused in this geographic area.
Speaker 5: Or maybe it's going to take me nine months to
Speaker 5: go get a new job because of what I do
Speaker 5: is so specialized. Have cash reserves that reflect that risk
Speaker 5: that's sitting out there, or you know, so there's you
Speaker 5: can see you can triage very quickly where is your
Speaker 5: risk at based upon this three to six months, and
Speaker 5: then we even give the guidance. As you get close
Speaker 5: to retirement, you might see that your cash reserves actually
Speaker 5: swells up to eighteen months and beyond, because then you
Speaker 5: walk through a whole new risk where now you're worried about, Hey,
Speaker 5: next time the market goes down, I no longer can't
Speaker 5: just say, well, it's all right, I'll just buy through it.
Speaker 5: I'll just keep working. It'll be okay. You're now going
Speaker 5: to deal with the psychological impact of hey, I'm no
Speaker 5: longer working, I'm living off of what my financial resources do.
Speaker 5: This is going to hit me emotionally different than it
Speaker 5: ever has before. So you need to have a little
Speaker 5: extra cushion in cash, so you don't make any of
Speaker 5: those emotional reaction decisions that we see so often when
Speaker 5: we're researching this type of stuff.
Speaker 3: Do you have any recommendations on how often someone should
Speaker 3: reevaluate this number? Is it an annual kind of thing?
Speaker 3: Is it just at every job change, at the birth
Speaker 3: of a kid? When do you think this should be reevaluating?
Speaker 5: You just laid off all. I mean, you just named
Speaker 5: off of a lot of the key things. It is
Speaker 5: obviously when big life things are happening, job changes, growing family,
Speaker 5: you know, or something is changing in your household. But also,
Speaker 5: I mean one of the habits that I talk about
Speaker 5: because I always say, make the good habits as easy
Speaker 5: as possible so that you can automate your wealth building.
Speaker 5: I love having the habit of doing an annual net
Speaker 5: worth statement. So every year when I do my annual
Speaker 5: network statement, automatically, I'm looking at where cash is. It's
Speaker 5: just like when we were show prepping, I knew I
Speaker 5: was having this interview. Interview. You guys asked a question
Speaker 5: about cash reserves and how I process that personally, and
Speaker 5: I was like, that's no problem, I have that right
Speaker 5: on my network statement. I'll be able to share that
Speaker 5: and I think that's why it's an important habit if
Speaker 5: you are monitoring your net worth, because not only will
Speaker 5: it help you with cash reserves, it will know how
Speaker 5: your dettload is. It will let you know how your
Speaker 5: assets or your investments are performing relative to your income.
Speaker 5: There's all kind of cool metrics and dashboards you can
Speaker 5: use to just make sure you're financially in a healthy
Speaker 5: and a good spot.
Speaker 4: Yeah, this next question might come as a little bit
Speaker 4: of a curveball, so that's all right, do with it
Speaker 4: what you will.
Speaker 3: But some of this conversation is making me think back
Speaker 3: to the times that I was full time social work,
Speaker 3: and I know we've got a lot of teachers listening
Speaker 3: and people who just are not high income earners, and
Speaker 3: I remember when that was, when I was fully in
Speaker 3: that space hearing conversations.
Speaker 4: Like this and being like, yeah, that'd be great.
Speaker 3: I'd love to have all of my insurance deductibles paid
Speaker 3: and all of my three to six months extra in
Speaker 3: case I'm out of work, and all of these things.
Speaker 3: But it feels so unattainable. I'm curious if you've got
Speaker 3: clients like what you say to them, And of course
Speaker 3: sometimes it can just look for ways to earn more.
Speaker 4: But are there any.
Speaker 3: Pieces that you've utilized to help people kind of move
Speaker 3: through these steps? If the steps feel like, man, it's
Speaker 3: going to take me so long to get to that point,
Speaker 3: what would you say to that personally?
Speaker 5: This is a great question, and this is one of
Speaker 5: the things I focus on a lot in the mindset
Speaker 5: because I think all of us who work in personal finance,
Speaker 5: especially the content side of it, we focus on the
Speaker 5: math a lot. I think we're just naturally math minded people,
Speaker 5: but that's only half the equation. You also have to
Speaker 5: have the mindset right, and I think that, especially in
Speaker 5: the current there's a lot of voices on social media.
Speaker 5: We just did a whole show yesterday on is the
Speaker 5: economy Doomed? Because it just seems like there's this doom
Speaker 5: speak everywhere and everybody. It's hard to be an optimist
Speaker 5: when you're struggling financially. So I always tell people this
Speaker 5: is why it's important to know what the next small
Speaker 5: decision you can make. And that's why I did create
Speaker 5: a system is because you know, you think about math.
Speaker 5: Going back to math minded people, pimdos the reason it's
Speaker 5: so awesome when you think about the order of operations.
Speaker 5: You have to solve math this way to get the
Speaker 5: right answer, and a lot of ways finance is the
Speaker 5: same way. That's why I try to give you what
Speaker 5: to do with your next dollar. So if you are
Speaker 5: feeling overwhelmed with the journey, because if you're thinking about man,
Speaker 5: I have not only we call it the messy middle
Speaker 5: where you got the family, You're short on time, you're
Speaker 5: short on money, and all these things are pulling on you,
Speaker 5: and you're like, oh my gosh, how am I going
Speaker 5: to conquer this when I have so many things that
Speaker 5: feel like they're working against me. If you can know
Speaker 5: just what small decision, what's the next thing to focus on,
Speaker 5: you won't get overwhelmed by all the other stuff. Now
Speaker 5: let's get to the actual nuts and bolts of how
Speaker 5: do you actually do this. That's why I love that,
Speaker 5: like step one, and I know we spend a lot
Speaker 5: of time on that's just going to keep you protected.
Speaker 5: It's safe, but it's still going to let you move
Speaker 5: on to step two, especially if you're a teacher or
Speaker 5: somebody else. What I love about this is because later
Speaker 5: in the book you'll see I have a savings and
Speaker 5: investment rate, but everybody's going at the cuff. They'll they'll
Speaker 5: be like that's high, you know, cause I say twenty
Speaker 5: to twenty five percent, Like, how do you do that? Well,
Speaker 5: I say, well, wait a minute. If you have household
Speaker 5: income under two hundred thousand dollars, you can count your
Speaker 5: employer match. And a lot of teachers have pension contributions
Speaker 5: that are you know, eight to twelve percent of their
Speaker 5: income is going in to fund this pension. We're right there.
Speaker 5: We just cut what you're portioning you have to save
Speaker 5: and invest down to maybe ten percent or somewhere between
Speaker 5: ten to fifteen percent. So that'll lets you get back
Speaker 5: to that step two, and then you can look at
Speaker 5: the debt. And then I love when we get into
Speaker 5: the roth iras of like step five, because then you know,
Speaker 5: it doesn't take a lot to move the needle. Did
Speaker 5: We did a case study on a recent show for
Speaker 5: somebody out of very modest income, but they still reach
Speaker 5: seven figure status. Because if you just will do something,
Speaker 5: just start the process of letting compounding growth, you'll find
Speaker 5: that ninety four to ninety five percent of your terminal
Speaker 5: meaning your account value at retirement, is the growth, not
Speaker 5: your investment it's the growth, but you have to actually
Speaker 5: get the initial investment in, even if it's a little bit.
Speaker 5: I don't care if it's fifty dollars a month. Just
Speaker 5: do something because it builds on top of itself. But
Speaker 5: you have to start the process somewhere.
Speaker 3: It's such a beautiful reality for us medium income earners
Speaker 3: that we can still find ourselves decades down the road
Speaker 3: with a significant amount of money because of investing, and
Speaker 3: particularly investing for retirement, which you started to talk on that,
Speaker 3: and I'm curious if you have more to say about
Speaker 3: percentages of income that you would recommend people invest for retirement.
Speaker 4: Why those percentages? What's kind of the baseline there?
Speaker 5: Yeah, and I know I keep throwing it back to
Speaker 5: my website, but we really do try to give away
Speaker 5: tons of free stuff so people can have these answers
Speaker 5: to help them through their journeys. On money Go dot
Speaker 5: com slash resources, we have a deliverable titled what twenty
Speaker 5: five percent can Do for You, And what we do
Speaker 5: is it's kind of a chart. It's really cool how
Speaker 5: it's laid out in a grid system where it will
Speaker 5: show if you're saving twenty five percent by age that
Speaker 5: will replace at retirement, and you'll quickly see that somebody
Speaker 5: who's in their twenties, if you're saving twenty five percent,
Speaker 5: you're going to retire with more money than you actually make,
Speaker 5: meaning it will replace greater than one hundred percent of
Speaker 5: probably what your retirement income is. So that maybe that
Speaker 5: means you can dial it down, But if you're starting
Speaker 5: your thirties, you're going to see that, hey, probably somewhere
Speaker 5: between twenty to twenty five percent is still going to
Speaker 5: get you somewhere between that eighty to one hundred percent
Speaker 5: replacement of your income at retirement. And then if you
Speaker 5: started your forties and beyond, there's still a chance forties
Speaker 5: is not a disaster. You're going to be able to
Speaker 5: replace sixty percent, and you stack on top of that
Speaker 5: social security, you're going to be okay. But you ought
Speaker 5: to at least have some type of metric to know
Speaker 5: what savings rate will replace what, and I think very
Speaker 5: few financial content creators are showing that mass so that
Speaker 5: way you can kind of know what every dollar can
Speaker 5: do for you and kind of you know, looking your
Speaker 5: own situation and figure out how you're going to apply
Speaker 5: this on your sete avings. Obviously, the earlier you start,
Speaker 5: the better and easier. This is so maybe somebody in
Speaker 5: the twenties can start somewhere around fifteen percent, but if
Speaker 5: you start at forty forty five, you might have to
Speaker 5: save and invest greater than twenty five percent. So there's
Speaker 5: there's a whole behavior as well as an action report
Speaker 5: to show you what to do.
Speaker 1: Yeah, I love like so the common thought is to
Speaker 1: just wait and then invest more later, but the math
Speaker 1: is so inverse, Like, if you invest that like twenty
Speaker 1: five percent in your twenties, you can invest less and
Speaker 1: less and less down the road, and overall what you
Speaker 1: put into your retirement is going You're going to save
Speaker 1: so much money by investing more in your twenties and
Speaker 1: thirties than waiting till your forties. That's so what we
Speaker 1: did was we invested like fifty percent of our income
Speaker 1: in our twenties, and then we had our kids in
Speaker 1: our thirties, and then we just kind of like cut
Speaker 1: that like all the way down to sometimes not investing
Speaker 1: at all. And we're still gonna be okay because we
Speaker 1: invested before we had kids. So I know a lot
Speaker 1: of our listeners don't have kids yet, and it's a
Speaker 1: great time to use all that money that you would
Speaker 1: be spending in diapers and just train yourself to live
Speaker 1: without it. Now, train yourself to live without it.
Speaker 5: In chapter I have a chapter called bullying point. Now
Speaker 5: that sounds like I'm saying bowling. I don't know why
Speaker 5: I can't say boiling, but I'm trying to talk to
Speaker 5: you out because people they give up way too soon.
Speaker 5: And so I use the chapter that sits in between steps,
Speaker 5: you know, when we get to step seven and beyond
Speaker 5: where you're getting, beyond the basics. I want to motivate
Speaker 5: people because I feel like if you're younger, you need
Speaker 5: to kind of know how important those early years are.
Speaker 5: So that's why we have a case study in the book.
Speaker 5: And it's not like I came up with this. I
Speaker 5: see this all all over the place. I remember the
Speaker 5: first time I went and talked to a high school class.
Speaker 5: I had some curriculum from a credit union that I
Speaker 5: was using, and it made the same point. You take
Speaker 5: somebody who saves and invests from twenty to thirty, meaning
Speaker 5: ten years only, and then you compare that to somebody
Speaker 5: who starts saving and investing at thirty. All the way
Speaker 5: to age sixty five. Even though the person who saves
Speaker 5: from thirty to sixty five is go save like three
Speaker 5: times the amount that the person saved from twenty to thirty,
Speaker 5: they just can't catch or beat the person who saved
Speaker 5: and invested from twenty to thirty because the value of
Speaker 5: time is just so powerful. Really to your point, Jen
Speaker 5: as you were kind of sharing that, and that's why
Speaker 5: we always tell people back to the website I hate
Speaker 5: and help it. But if you go to money go
Speaker 5: dot com slash resources, we have our wealth multiplier and
Speaker 5: what I like to show people and you see it
Speaker 5: on this koozy is if you knew like a dollar
Speaker 5: for a twenty year old is worth eighty eight dollars,
Speaker 5: it has the potential to become that. A dollar for
Speaker 5: thirty year old only has the potential become twenty three dollars.
Speaker 5: A dollar for a forty year old only has the
Speaker 5: potential to become seven dollars. A dollar for a fifty
Speaker 5: year old that's where I'm at, only has the potential
Speaker 5: to become three dollars. You'll look at money completely differently,
Speaker 5: and that's why if you're anywhere in between those ages,
Speaker 5: if you'll go to the website. We actually give you
Speaker 5: the wealth multiplier by every age, so even for your babies.
Speaker 5: So if you have like children and you're like, well,
Speaker 5: I want to make sure I'm saving something for them,
Speaker 5: you know, so they can take advantage of their one
Speaker 5: hundred plus multiplier. Let's do it. Because that's why I
Speaker 5: think when you're young and you're in your twenties, you're broke.
Speaker 5: I always broke as a joke through most of my twenties.
Speaker 5: Plus life's pulling at you. So you're like, I just this.
Speaker 5: I can't do this. The system's working against me. But
Speaker 5: if you just do fifty dollars a month, it would
Speaker 5: change your life. I mean that's where I had an
Speaker 5: economics teacher in high school. Whatn't part of the curriculum.
Speaker 5: I detail this in the first intro chapter of the book.
Speaker 5: He came in one day, and I don't know if
Speaker 5: it was out of regret or if it was just
Speaker 5: he had learned this concept of compounding growth. But he goes, Guys,
Speaker 5: if every one of you would save one hundred dollars
Speaker 5: a month, you'd be a millionaire by the time you
Speaker 5: were retired. And I was working at the Heartys drive
Speaker 5: through at the time making three dollars and eighty cents
Speaker 5: an hour because I'm old, and I remember thinking I
Speaker 5: could save one hundred dollars a month even making three
Speaker 5: dollars and eighty cents, and that put me on this
Speaker 5: journey to think about what money can become in a
Speaker 5: completely different way. While everybody out there is saying you can't,
Speaker 5: you can't, you can't, the system stacked against you. Meanwhile,
Speaker 5: I have a teacher sells me one hundred dollars a
Speaker 5: month is going to change my life. Sign me up.
Speaker 1: Yeah, Oh my gosh, that's amazing. I have one last question,
Speaker 1: and this one's mostly for me. What percentage of your
Speaker 1: net worth would you say is reasonable to have in cash?
Speaker 1: Or what is average? Or should I not be asking
Speaker 1: that question?
Speaker 3: Now?
Speaker 5: This is something I thought about this question, and I
Speaker 5: want to I want to clarify this a little bit.
Speaker 5: And the fact because I thought about that net worth
Speaker 5: is one thing and then investable assets is something completely different.
Speaker 5: Because like if I told you as a percentage of
Speaker 5: my net worth, my cash is probably one percent or less,
Speaker 5: so that seems really small. But then if I clarify
Speaker 5: that and I say my cash as a percentage of
Speaker 5: my investible assets, meaning like IRA's four one k's, you know,
Speaker 5: my taxable accounts, all the things that you think about
Speaker 5: that you go live off of in retirement, that number
Speaker 5: seven and a half percent. So you see how there's
Speaker 5: a little bit of clarificate, because I mean it gets
Speaker 5: this is what I make the point on the show
Speaker 5: all the time. Money becoming wealthy is incredibly simple, but
Speaker 5: that doesn't necessarily mean it's easy. And what I mean
Speaker 5: by that is is you get more and more successful,
Speaker 5: your life is going to get complicated naturally, even if
Speaker 5: you're trying to keep your life as simple as possible.
Speaker 5: So you take somebody like me. I started this journey
Speaker 5: off very simply no money and started the process. But
Speaker 5: now if you saw my tax return with all the
Speaker 5: k ones, the commercial real estate, the multiple ventures, the
Speaker 5: forty employees, you know, it's just that's why my situation
Speaker 5: is different. But I want to make sure a highlight.
Speaker 5: Don't get caught up in as a percentage of net worth.
Speaker 5: Look at it in terms of what cash can do
Speaker 5: to replace the expenses of your life. Know what your
Speaker 5: burn rate is, know what your monthly household cost is,
Speaker 5: so then you can have the cash to use as
Speaker 5: a resource when you need it's that's really the purpose
Speaker 5: of it is to cover those those desperate times, but
Speaker 5: also to keep a little bit once you get to
Speaker 5: step eight of my system, I don't want you hoarding
Speaker 5: cash waiting for those great opportunities. I want this to
Speaker 5: be kind of an amplifier after you've built the financial
Speaker 5: foundation underneath you through steps one through seven. But I
Speaker 5: do like step eight having a little extra cash, especially
Speaker 5: if you have employees or people counting on you. You've got
Speaker 5: to protect yourself and them so that the uncertainty doesn't
Speaker 5: take you out.
Speaker 1: Speaking of multipliers, something that is not full of unsod certainty.
Speaker 4: It is, but in a good way.
Speaker 1: Significant percentage of this episode the bill of the week.
Speaker 2: That's right, it's time for the best minute of your
Speaker 2: entire week.
Speaker 1: Maybe a baby was born and his name is Williams.
Speaker 1: Maybe you paid off your mortgage, maybe your.
Speaker 2: Car died and you're happy to not have to pay
Speaker 2: that bill anymore.
Speaker 6: That's bills, bffalo bills, Bill Clinton. This is the bill
Speaker 6: of the week, So Brian.
Speaker 1: Every week we ask our listeners and our guests to
Speaker 1: share with us their bill for the week, and we
Speaker 1: would love I have yours.
Speaker 5: I thought about this because you kind of got you.
Speaker 5: Guys were very generous. You gave me heads up about this,
Speaker 5: and I gotta tell you my answers improved since y'all
Speaker 5: very transparent shared. We had some technical problems the first
Speaker 5: time we try to do this. I had two answers.
Speaker 5: I had the personal finance answer for I think most
Speaker 5: people out there, and then I have any of your
Speaker 5: entrepreneurs or business owners that are out there. I have
Speaker 5: a little tip and it's not endorsed. I don't get
Speaker 5: paid for sharing this, but I can't help because I'm
Speaker 5: just so excited about it. And that's how nerdy I am.
Speaker 5: But for everybody, I think you really ought to automate
Speaker 5: your bill pay process. So when I think of bills,
Speaker 5: I think of automating your bill paid, just like I
Speaker 5: talk about inevitable automatic wealth building with your investing. I
Speaker 5: think that if you can set up as many of
Speaker 5: your bills to be paid in an automated fashion. I
Speaker 5: think about my utilities, I think about my insurance policies
Speaker 5: and other things. I have those things and I get notifications.
Speaker 5: Because I'm that nerdy, I actually want to see what
Speaker 5: the numbers are but I do make them pay automatically
Speaker 5: because I think that if I can automate that thing,
Speaker 5: all those processes, it will make my life easier for
Speaker 5: my business owners. Something I've discovered. I was having the
Speaker 5: worst time with some of my bigger vendors. They wanted
Speaker 5: me to pay them ach. I reached out to my
Speaker 5: bank and I said, hey, I need to start paying
Speaker 5: these people ach and they are like, well, that's hard
Speaker 5: for businesses, we don't necessarily do that. So I started
Speaker 5: doing research and I found this company, and I found
Speaker 5: out all these big fortune five hundred companies use it too.
Speaker 5: It's bill dot com and it is It is revolutionized
Speaker 5: how I'm paying bills to all my vendors. Now, I
Speaker 5: guess I get no endorsement from that. I get no fees,
Speaker 5: no affiliate. I don't do any of that junk. But
Speaker 5: it's just when I find something that's cool, I tell people.
Speaker 5: So now I have one of my administrators, we can
Speaker 5: do all this stuff. So those are my two bills
Speaker 5: of the week.
Speaker 1: Yes, we have been paid via bill dot com before.
Speaker 5: That is a legitimate recipient, that expensive for relative to
Speaker 5: the time. Like now I find myself like if I'm
Speaker 5: stuck at an airport or I'm stuck somewhere, I can
Speaker 5: just open up my bill out and then I'm like
Speaker 5: paying vendors left and right. And truthfully, I think all
Speaker 5: the people who work with us love it because they're
Speaker 5: getting paid quicker. Because in the path I was batch
Speaker 5: bill paying, I was putting everything in a Nila folder,
Speaker 5: you know, right by my administrator, and then once a
Speaker 5: month I was coming in there like Ebenezer Scrooge and
Speaker 5: writing checks and sending them out to everybody. Now it's
Speaker 5: just as they come in, they get paid, and I
Speaker 5: feel like I'm just more efficient and automated.
Speaker 1: And I like that.
Speaker 5: Back to that automate and make your wealth building journey inevitable.
Speaker 5: It doesn't just have to be on the investing, it
Speaker 5: can be on the bill pay as well.
Speaker 1: Yeah, it's crazy. As people who have personal finance podcasts
Speaker 1: and as listeners of personal finance podcasts, we think that
Speaker 1: everybody has their bills automated. That's like step one. And
Speaker 1: then I listen. Then I listened to other I was
Speaker 1: listening to ramit Seti's podcasts and he had a couple
Speaker 1: on who did not have their bill. They made quarter
Speaker 1: million dollars a year did not have their bills automated. Thanks,
Speaker 1: and I was like, it's still not not everybody does it.
Speaker 1: So if you're listening to this and you assume everybody
Speaker 1: does it, don't tell your friends to go automate their bills.
Speaker 1: We can't reach everyone. We all have to work.
Speaker 5: Thanks for making you go look at a bank's financial
Speaker 5: report and you'll realize, no, a lot of people haven't
Speaker 5: automated a lot of things in their life because they're
Speaker 5: bouncing checks, they're you know, they're they're they're paying all
Speaker 5: these mispayment fees. There's all kinds of things that you
Speaker 5: will just avoid yourself that heartache. If you can automate
Speaker 5: your life.
Speaker 3: If you all who are listening want to or have
Speaker 3: worked smarter, not harder, or you've got an app called
Speaker 3: bill dot com, or you are a bill, you've.
Speaker 1: Helped your friend automated bill.
Speaker 3: Yes, visit Frugal Friends podcast dot com slash bill, leave
Speaker 3: us your bill. We are ready for it. And now
Speaker 3: it's time for the line round.
Speaker 1: So that last question for the interview is kind.
Speaker 3: Of a.
Speaker 1: Teaser, a teaser if you will to the lightning round,
Speaker 1: and it is what percentage of your net worth is
Speaker 1: in cash. Let's get vulnerable.
Speaker 4: This isen's vulnerability. We call it the lightning round pot.
Speaker 1: It's vulnerability round is what it really is.
Speaker 5: Brian will like as I shared kind of earlier, net
Speaker 5: worthwise is probably one percent, but if you look at
Speaker 5: my investible assets, it's seven and a half percent. But
Speaker 5: I have forty employees and a lot of people counting
Speaker 5: on me, and that's not even counting the cash in
Speaker 5: my companies. So it's just me sharing. But I also
Speaker 5: shared earlier in the interview that I use cash as
Speaker 5: as an opportunity builder because I'm beyond step eight of
Speaker 5: the financial order of operations.
Speaker 1: Well, we are not at step eight or be so,
Speaker 1: so this is this will just be vulnerability for Jill
Speaker 1: and I. So for me, it is three percent, which
Speaker 1: is we just finished a two year renovation. We bought
Speaker 1: two years ago. We bought a fixer upper, and we
Speaker 1: reserved cash in order to cash flow renovations, and we
Speaker 1: just finished up those renovations. And so I went from
Speaker 1: having this large cushion of cash for several years to
Speaker 1: now just having three percent. I almost feel naked. It's
Speaker 1: very It makes me feel very vulnerable. This is my
Speaker 1: vulnerability around. I went to the bank this morning because
Speaker 1: we had a we had an insurance check that we
Speaker 1: needed to deposit, and I looked. They gave me the
Speaker 1: receipt with my updated balance before and after, and I'm like, ah,
Speaker 1: it's just so little.
Speaker 4: But do you have your deductibles covered?
Speaker 6: Like?
Speaker 4: Do you still have to.
Speaker 1: Have my emergency funds not in that account? So yeah,
Speaker 1: I have my emergency fund.
Speaker 4: Are you not counting that as part as this this
Speaker 4: three percent?
Speaker 5: No?
Speaker 1: I am, okay, I am, it's just like the amount,
Speaker 1: so spoiler, this is not the best practice. But we
Speaker 1: kept that money in our regular checking account, like our
Speaker 1: spending checking account for years, so that's why it felt.
Speaker 1: But I never counted that money as spendable money because
Speaker 1: I knew what it was for. I guess not everybody
Speaker 1: can do that. That's why we tell people to keep
Speaker 1: it separate, but we did not. So yeah, but now
Speaker 1: that money is just all gone and everything looks like
Speaker 1: a regular account and it feels but.
Speaker 5: You feel pressure. That's the important part. I mean, I
Speaker 5: tell people I think all through life, that's why we
Speaker 5: talk about the messy middle of life is that I
Speaker 5: think it's it's common everybody thinks when you go through
Speaker 5: like a system like financial order operations, it's going to
Speaker 5: be steps one, two, three, four, five, six, all the
Speaker 5: way through nine as you're just walking up a set
Speaker 5: of stairs. But I found you'll go from to step
Speaker 5: five and then you'll bounce back to step four because
Speaker 5: of a home renovation or something it's or maybe you
Speaker 5: get laid off. There is going to be volatility or
Speaker 5: change within your whole process. So I love the fact
Speaker 5: that of what you just shared, Jen, is that you
Speaker 5: still you feel it's low, and you feel some pressure
Speaker 5: that's going to make you self regulate and probably fix
Speaker 5: this or get it back on to where you feel
Speaker 5: comfortable that much sooner.
Speaker 1: I know. But now I have to figure out what
Speaker 1: is comfortable because I have the emergency fund right. I
Speaker 1: just am so used to having like quite a bit
Speaker 1: of money in the churn.
Speaker 5: Only there were the resource to spend money.
Speaker 1: Holds up his books for them.
Speaker 3: It is tough to define your enough, I think, because
Speaker 3: I think when you're so dead set on save, saving,
Speaker 3: saving for this, then it can feel difficult to then
Speaker 3: move your mindset into investing and not touching it and
Speaker 3: not having those numbers available to you. My current percentage
Speaker 3: of net worth that I have in cash is ten percent.
Speaker 3: That's more reflective of my entire net worth than it
Speaker 3: is about me making poor decisions. So that ten percent
Speaker 3: is just what we need. I've got my three months
Speaker 3: of living expenses and oll of our deductibles covered with
Speaker 3: that amount, and the net worth just isn't that high
Speaker 3: at this point in life.
Speaker 1: So that's the.
Speaker 4: Amount of cash we need to have.
Speaker 1: But you're still in your early thirties, Yeah you got
Speaker 1: you have four months.
Speaker 5: Sound, you still have so much time to catch up.
Speaker 5: I think you're in a great place. Jill. Don't be
Speaker 5: too hard on yourself. The big thing is you're doing
Speaker 5: something for sure.
Speaker 3: Appreciate that. Well, you've plugged a lot already.
Speaker 4: But we're gonna to be one last chance to tell
Speaker 4: our people from you.
Speaker 5: I promise, because I see content like that and you're like,
Speaker 5: oh my god, this is just an infomercial. But we
Speaker 5: really have tried to give away so much free information
Speaker 5: because it's all we call it the abundance cycle. I
Speaker 5: just want people to come get as much of the
Speaker 5: free stuff as they can because it is self serving.
Speaker 5: I mean, if you do this well enough and you
Speaker 5: reach a level of success, there is you know, other
Speaker 5: asks that come. But while you're in the growth part,
Speaker 5: take the free stuff. So that's why I'll give two plugs.
Speaker 5: Of course, moneyguid dot com is our main hub, but
Speaker 5: if you go, if you add slash resources tons, that's
Speaker 5: where all the free stuff lies. And then of course
Speaker 5: right now, I poured my life in soul for the
Speaker 5: last few years into Millionaire Mission. We've been creating digital
Speaker 5: content since two thousand and six, when I started podcasting.
Speaker 5: I've never done traditional media like a book, but I
Speaker 5: really instead of and it's my philosophy of back to
Speaker 5: that abundant cycle, I didn't hold back. So this isn't
Speaker 5: one of those things where you have to buy the
Speaker 5: book and then I tease you into hiring me before
Speaker 5: you get the actual nuts and bolts and details. I
Speaker 5: actually give you the actual answers. I mean, if you
Speaker 5: go through this book, everything that is just like you
Speaker 5: guys are just talking about if the mindset part, you know,
Speaker 5: you feel like you're trying to figure out the math
Speaker 5: of it. But I'm very hard on the mindset and
Speaker 5: the fact that I'm such a sentimental sap. Now that
Speaker 5: I've gotten older and I realize what money can and
Speaker 5: cannot do, I'm trying to tell people in each phase
Speaker 5: of your life to still live your best life, but
Speaker 5: dazzle your basic life if you can't afford much, because
Speaker 5: it just goes so fast. So there's a balance between
Speaker 5: the math and then that the journey, and I really
Speaker 5: try to pour that in. So if you get a
Speaker 5: moneyg dot com slash millionaire mission, I really do hope
Speaker 5: people will see that perfect intersection of both the money
Speaker 5: and mindset. And then if you're really if you just
Speaker 5: want to be nosy, the last chapter of this book,
Speaker 5: because it ties into Yall's question about cash reserves and
Speaker 5: other things, tells you exactly what I do with my money.
Speaker 5: So and I even pick on people. When you read
Speaker 5: that chapter, it says, did you actually read the book
Speaker 5: or did you just go jump to the back to
Speaker 5: see how I.
Speaker 4: Nice?
Speaker 1: I loved that your basic life. I want you. I
Speaker 1: want you to have a hat that says basic with that,
Speaker 1: don't all do it?
Speaker 5: I mean I was talking to my wife about this
Speaker 5: is that you know sometimes and look, I'm all about
Speaker 5: the all inclusives and going on those romantic trips. But
Speaker 5: sometimes all you need to bedazzle your basically life, just
Speaker 5: go on the evening walk, you know, when the weather's
Speaker 5: good and everything's green and you're in the spring. That
Speaker 5: costs absolutely nothing, and you'll find that you might have
Speaker 5: just as good of a time just having those conversations.
Speaker 5: I think about this past weekend. We have a warranty
Speaker 5: claim on a mattress, so we loaded up the entire
Speaker 5: family and we're riding around to these different stories trying
Speaker 5: to find these different versions of this manufacturer's mattress so
Speaker 5: we can get it. And I told my wife the
Speaker 5: end day, I was like, you know, I know that
Speaker 5: that was not what the kids would think would be
Speaker 5: a fun day, but there was actually some fun. You know,
Speaker 5: it's just good family time. So just as I say,
Speaker 5: time in the market is more important than timing the market,
Speaker 5: spending time with your family is more important than the
Speaker 5: money you're spending on expensive vacations or stuff that likely
Speaker 5: they'll forget.
Speaker 4: Yeah, so true.
Speaker 1: Well, thank you so much for joining us, Brian.
Speaker 5: This has been well, I'm glad we made it happen.
Speaker 5: This was a blast. Y'all were a lot of fun
Speaker 5: and thank you for being so generous with your time
Speaker 5: and let be on the show.
Speaker 4: Yeah, thanks for being here.
Speaker 1: I'm still thinking about that emergency funds, not just for
Speaker 1: the negative emergencies, but for emergency opportunities. And yes, it's niche.
Speaker 1: It's not something that you need or is even one
Speaker 1: hundred percent advisable to do with your emergency fund unless
Speaker 1: you're in a really good place financially. But that is
Speaker 1: something that we have done before and we're able to
Speaker 1: do on a whim because of having that emergency fund.
Speaker 3: I think you've really got to have cash reserves for
Speaker 3: a while before you start going on a limb thinking, oh,
Speaker 3: we haven't had a rainy day in a while, so
Speaker 3: I'll just use this for you name it.
Speaker 1: I'm thinking once in a lifetime opportunities, like buying real
Speaker 1: estate in two thousand and eight, once in a lifetime opportunity,
Speaker 1: buying commercial real estate in twenty twenty, once in a
Speaker 1: lifetime opportunity.
Speaker 3: Yeah, but again, you've got to have a pretty good
Speaker 3: understanding of the economy, what's happening your money, the type
Speaker 3: of risk that you can hold. That it's not as
Speaker 3: not common advice that I would give to every person,
Speaker 3: and I would call that cash reserves, not dipping into
Speaker 3: your emergency fund, because if your emergency fund is there
Speaker 3: for your true emergencies, the life threatening things that can
Speaker 3: go on, we do not want to be compromising that cash.
Speaker 1: This is so true, This is one hundred percent true.
Speaker 1: But I still love the refrase.
Speaker 3: Yeah, yay, yeah, yes, And I think I love how
Speaker 3: he was saying, once you get comfortable having that cash,
Speaker 3: once you've exercised that muscle and you kind of understand
Speaker 3: the seasons of your cash flow.
Speaker 4: Yeah, having some extra cash lying around can be helpful.
Speaker 1: Absolutely. Thank you so much for listening. I hope that
Speaker 1: you got something out of this conversation about cash, and
Speaker 1: if you did, we would love it if you would
Speaker 1: leave a review. We love reading your kind reviews, kind
Speaker 1: of like this one from l John T fifty five says,
Speaker 1: I thought I've heard it all. Just happens to be
Speaker 1: five stars. I am loving the tips and new frugality
Speaker 1: tips I'm learning. I especially love the food and meal
Speaker 1: planning tips, which is my hardest. Also the resell and
Speaker 1: eBay tips. Thank you. Great distinction between cheap and frugal.
Speaker 1: Keep going. This distinctive frugal mindset has helped us really
Speaker 1: prioritize how we're spending money, and for me has given
Speaker 1: me permission to buy some things I really do value
Speaker 1: but might have talked myself out of before.
Speaker 3: Thank you, Thank you, el John T fifty five. I'm
Speaker 3: so glad that you're finding some fresh perspectives. There's so
Speaker 3: much that has already been said but is still worth repeating.
Speaker 3: But then it is helpful when you find some kind
Speaker 3: of like new perspectives or new ways of saying it
Speaker 3: that help some of these concepts click. So I'm glad
Speaker 3: you found that here. If you all are listening, you've
Speaker 3: liked the show for a while, or even you've liked
Speaker 3: it for a short time, and you haven't left a
Speaker 3: review yet, please do so. It really really does help us.
Speaker 3: It's a free thing you can do to show your support.
Speaker 3: And we love free.
Speaker 1: We love free. And once we hit one thousand reviews
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Speaker 1: treat we should reward ourselves with, just.
Speaker 3: Like what are you about to give away?
Speaker 1: We're gonna we're gonna reward ourselves or the little treat
Speaker 1: and we're gonna let you.
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Speaker 1: So definitely Frugal Friends podcast dot com get the friend letter,
Speaker 1: See you next time. Frugal Friends is produced by Eric Sirianni.
Speaker 3: Speaking of cash Jen yesterday, I so I keep like
Speaker 3: actual cash. I mean, I'm sure most listeners know that
Speaker 3: when we talk about cash emergency fund, we're keeping it
Speaker 3: in a high yield savings account.
Speaker 1: Yeah.
Speaker 4: None, we're earning it dollars.
Speaker 3: Yeah, but I do have some actual cash in my home.
Speaker 1: That you hid in your Christmas box so they can
Speaker 1: find it.
Speaker 4: Lol.
Speaker 3: I forget if I actually did that. I don't think
Speaker 3: I did, because Eric was silling everyone. Yeah, well no
Speaker 3: I have. Well I'm not gonna tell you exactly where
Speaker 3: I keep it, but I keep it in a safe space.
Speaker 1: I'm here all I could take it from me?
Speaker 6: Huge show.
Speaker 1: Can we walk there now?
Speaker 3: We're not with our not with our microphones. No, it's
Speaker 3: not close enough to touch right now. Anyhow, we've been selling.
Speaker 3: Eric and I have been selling a lot.
Speaker 4: I don't know. We're just going on a rampage.
Speaker 3: He's selling a lot of different music equipment so that
Speaker 3: he could buy a different thing of music equipment.
Speaker 4: And I don't know, as we've as.
Speaker 3: We've gotten to the end of our innovation and clearing
Speaker 3: out the garage and cleaning that up, we've just like
Speaker 3: been selling stuff on Facebook marketplace. So I finally thought
Speaker 3: I should count that, I should see how much money
Speaker 3: we have there. And because we've just been like shoving
Speaker 3: cash into where I it is, that we keep it.
Speaker 1: Not close enough to touch right now, yeah, not behind
Speaker 1: the Neon sign.
Speaker 3: And I laid it all out on the desk and
Speaker 3: counted it, and it was twenty five hundred dollars.
Speaker 1: Wow.
Speaker 3: I know this is like over a year of selling things,
Speaker 3: but still, but then I kind of got a little
Speaker 3: bit sad because I realized that that's what I need
Speaker 3: every single month to cover my mortgage and utilities. Like
Speaker 3: it looked like a ton of money on the table,
Speaker 3: and I'm like, I need this amount, Like this would
Speaker 3: just cover one month of me living here and using
Speaker 3: the water and electricity.
Speaker 1: We did that when Travis sold his motorcycle, he got
Speaker 1: two thousand for it, and I was like, this covers
Speaker 1: daycare for two months. Yeah, in two months, this is gone.
Speaker 3: And like what took us about a year of selling
Speaker 3: things on Facebook Marketplace would only cover one month. However,
Speaker 3: it also could highlight the flip side of that that
Speaker 3: you can bring in that amount of month, that amount
Speaker 3: of money monthly to be able to keep covering that.
Speaker 3: And then it just makes me feel like money space.
Speaker 1: You can't there's a limit, right, you can't sell everything.
Speaker 1: You can't keep selling exactly. Yeah, and it took that
Speaker 1: long to get that amount of money. But yet, yeah,
Speaker 1: jobs can pay. It could be more than that. It
Speaker 1: could be a fun experiment to sell. Have a goal
Speaker 1: just to go through your house and sell as much
Speaker 1: as you can to pay for one mortgage payment. You're like,
Speaker 1: I don't want to go through and sell in basement
Speaker 1: wrink places. Too much work. What if your goal was
Speaker 1: just to sell enough to earn one mortgage payment and
Speaker 1: then once you did that, then you got rid of everything.
Speaker 3: Yeah, it's fine, right, there is an engine sight. You
Speaker 3: don't have to keep going with it.
Speaker 1: There you go. There's a fun little challenge. Wow for
Speaker 1: June and July. There's your summer challenge right now, of it.
Speaker 1: Have fun