Speaker 1: Welcome to Out of Money.
Speaker 2: I'm Joel and I am Matt and today we're going
Speaker 2: on a millionaire mission with Brian Preston.
Speaker 3: That is right, Yeah, we're talking about what it takes
Speaker 3: to be a millionaire because our guest today he claims
Speaker 3: that anyone can become rich. Now that doesn't mean that
Speaker 3: it's going to happen overnight, right, But how quickly you're
Speaker 3: able to achieve that goal, it's going to largely depend
Speaker 3: on your mindset. It's going to depend on how effectively
Speaker 3: you're able to put your army of dollar bills to work.
Speaker 3: That's a Brian line right there.
Speaker 1: But it's just one of the top things for sure
Speaker 1: that Brian.
Speaker 3: Preston covers in his new book, Millionaire Mission that just
Speaker 3: came out last month. And Brian, he's a financial advisor.
Speaker 3: He's got over twenty five years of experience. He's so
Speaker 3: he's actually an og podcaster. He started back in two
Speaker 3: thousand and six, which means that back when he was
Speaker 3: getting nerdy with personal finance. That's when I was listening
Speaker 3: to like muggle Cast, listening to like Harry Potter podcasts. Right,
Speaker 3: So obviously he's a co host of the Money Guy Show,
Speaker 3: and just last year alone they had over forty one
Speaker 3: million views over nine million downloads. Brian, we're excited to
Speaker 3: get nerty with you today and talk about all things
Speaker 3: personal finance. Thank you for joining How to Money.
Speaker 4: By the way, I love the intro, but I have
Speaker 4: to ask because I felt like there's a little tone
Speaker 4: on it. You guys do believe that anyone can be
Speaker 4: a millionaire, don't you. I want to make sure we're
Speaker 4: all on the same page, because that's why I feel
Speaker 4: like so much out in the world right now is
Speaker 4: telling folks that the world's against them. But I'm telling you,
Speaker 4: I think it's actually the best time. I mean, I
Speaker 4: look at the beginning of my journey, when you had brokers,
Speaker 4: you had to pay through you, you only could do
Speaker 4: loaded commission funds, index funds were unheard of. And now
Speaker 4: it's like all that stuff is so behind us, and
Speaker 4: anybody and everybody has.
Speaker 1: Opportunity easier than ever. That's for sure.
Speaker 3: I think if anything asked the first question has swung
Speaker 3: the other way, though, which is I feel like more
Speaker 3: than ever, folks are saying that it's it's it's something
Speaker 3: that you can do tomorrow.
Speaker 1: But obviously the way. It takes time.
Speaker 3: It takes time, and you and I show approach to it.
Speaker 2: So okay, hold on, yeah, we can't get in the conversation.
Speaker 2: That's the first question. Matt and I we like to
Speaker 2: drink craft beer, Brian, and we will splurge on craft beer.
Speaker 1: But we're doing the right thing.
Speaker 2: We're saving investing at the same time, so we can
Speaker 2: become millionaires too. What is that sports for you though?
Speaker 2: What is the thing you spend a lot of money
Speaker 2: on while you're still doing the smart stuff with your money.
Speaker 4: It's a great question. Two things immediately popped in my mind.
Speaker 4: The first one, I love going to movies. And when
Speaker 4: I go to movies, and I think this is payback
Speaker 4: because of all the bad things I was doing when
Speaker 4: I was younger, trying to cut them out of the money.
Speaker 4: Was always by buckets of popcorn, and I always buy
Speaker 4: a big coke because that's that's just what I do
Speaker 4: with movies. But when I was in high school, I
Speaker 4: had the seven dollars date night where I'd only go
Speaker 4: to movie dollar movies and I'd also smuggle in my
Speaker 4: goobers and candy and ask my date to bring it in.
Speaker 4: And even I was known in the summer months to
Speaker 4: cut through the bathroom to maybe watch two shows. So
Speaker 4: I feel like I'm paying back all my my bad
Speaker 4: decisions are or cost cutting measures when I was younger,
Speaker 4: by paying full, full loaded bore on the popcorn and drinks.
Speaker 1: So I love it. Okay.
Speaker 2: The first time we met Brian, I don't know if
Speaker 2: you remember, Oh, I remember. I convinced you it was
Speaker 2: we were going to a conference. We landed the airport
Speaker 2: at the same time to hop in a bus to
Speaker 2: get to the conference instead of in an expensive uber.
Speaker 2: Tell me, I'm just curious, like, how did you feel
Speaker 2: about that? Because at the time I make you a
Speaker 2: little uncomfortable, Like how do you feel about taking the money?
Speaker 4: No, I still think about the and I don't know
Speaker 4: how how deep you want me to go into this.
Speaker 4: But it was bo and I get there and you
Speaker 4: were you just you were a fun Guymediately, once we
Speaker 4: all realized we were all going the same place, You're like, hey,
Speaker 4: why would you take a I can't remember how. Maybe
Speaker 4: it was the uber, but you're like, I think it's
Speaker 4: four dollars if you just want to ride on the
Speaker 4: on the public transportation. So we jumped on this and
Speaker 4: bah wah, you recruited. It wasn't just me and ba
Speaker 4: it was some other people too. Don't say their names
Speaker 4: because I think they it was that meeting that they
Speaker 4: hated us because they scouted at us at every conference
Speaker 4: I ever went to after that, But it was. And
Speaker 4: you also we had stops along the way where you
Speaker 4: took us by, you know, cocktail establishments and other things.
Speaker 4: So it was it was it went beyond what it
Speaker 4: was billed as is just a savings measure. It was
Speaker 4: actually turned into a guided tour, which was incredible.
Speaker 1: See you didn't have to pay a dime for that.
Speaker 1: I mean, that's that.
Speaker 4: No, I mean I think you could tell. That's why
Speaker 4: I sent you the text jealous, because I mean we
Speaker 4: always every time I've hung out with you, we always
Speaker 4: have a blast at conferences, and I was like, we
Speaker 4: got to.
Speaker 1: Talk about this stuff. Yes, okay.
Speaker 3: So so speaking of buses, Bright, I didn't realize, first
Speaker 3: of all, A that you went to UGA. I'm a
Speaker 3: fellow Georgia grad, but go b you had the most
Speaker 3: coveted job on campus. You drove the UGA bus. Tell
Speaker 3: me about that, because like, I don't think there's any
Speaker 3: campus job that was paying. It was like at the
Speaker 3: time when I was there was something like I think
Speaker 3: it was over twenty bucks an hour.
Speaker 4: Oh wow, let me tell you times have changed. You're
Speaker 4: telling me all you're doing is making me feel old.
Speaker 4: So when I went to UGA, two things happened. When
Speaker 4: I got there on campus for the first time, and
Speaker 4: there was the first I was like, I have two goals,
Speaker 4: begin with the end of mine. I wanted to be
Speaker 4: an orientation leader because I thought those guys and girls
Speaker 4: were that had the coolest jobs.
Speaker 1: Ever.
Speaker 4: Then when I saw that they were letting students drive
Speaker 4: these huge buses around campus, I was like, that has
Speaker 4: got to be the coolest job ever. So I failed
Speaker 4: on actually becoming an orientation leader. I don't know how
Speaker 4: the stars never aligned for that to actually work. But
Speaker 4: I made it my mission to become a bus driver,
Speaker 4: and sure enough they trained me. I got my commercial
Speaker 4: driver's license and I actually drove for three years at
Speaker 4: the University of Georgia and I was good enough. This
Speaker 4: is a problem. I was so good that I got
Speaker 4: promoted to be a student trainer, and all that meant
Speaker 4: was the last year I didn't actually get to drive
Speaker 4: the bus anymore. I just rode around with other student drivers,
Speaker 4: making sure they were doing good work. But I loved it.
Speaker 4: If I could make a million dollars a year driving
Speaker 4: a bus, I would do it. I mean it was truly,
Speaker 4: it was the coolest job.
Speaker 1: Did you What was it?
Speaker 4: Orbit?
Speaker 3: Was the East Campus Express? What route were you driving?
Speaker 4: I drove? I drove them all. I mean I driven.
Speaker 4: The one I drove that I liked. I chose to
Speaker 4: was the Millage bus route a lot because I just
Speaker 4: liked that one. But I did do family housing. I
Speaker 4: did a Orbit, I mean the other one. Here's here's
Speaker 4: a hack, A college hack is I would drive the
Speaker 4: special of the bus at night for disabled individuals because
Speaker 4: there was really only one or two people around campus,
Speaker 4: but they were required to have this because the buses
Speaker 4: back then didn't allow access forelchairs. I would basically take
Speaker 4: the same people down to the bars every night and
Speaker 4: then go back to the bus depot study, and then
Speaker 4: wait for them to call me to go pick them
Speaker 4: up and then take them back to their dorms. So
Speaker 4: I felt like it was the greatest gig. And get
Speaker 4: back to what it paid. I was making seven dollars
Speaker 4: and twenty five cents an hour and that was the
Speaker 4: best paying job on campus. Wow, back in the day.
Speaker 4: So you can tell things have changed a lot.
Speaker 1: Was this a bus or was this a horse drawn carriage? Right?
Speaker 1: So I'm not clearing, just kidding, just kidding. Okay, let's
Speaker 1: move on. Let's talk about your book.
Speaker 3: Enough about Georgia and the buses.
Speaker 1: Your book is called Millionaire Mission, and it's a.
Speaker 2: Great goal and you've just just at the very beginning
Speaker 2: we talked about how, yeah, you think this is a
Speaker 2: goal that anybody could achieve, all right, but flip side
Speaker 2: of that question, is it a good enough goal? Like
Speaker 2: do you think a million dollars is going to be enough?
Speaker 2: And retirement for most folks who talk about how much
Speaker 2: you got paid back then how much bus drivers get
Speaker 2: paid now? Inflation's a real reality. Is a million dollars
Speaker 2: enough to shoot for?
Speaker 4: It might not be for when certain people get there,
Speaker 4: but you can't get to three million without the first million.
Speaker 4: And that's why, I mean, one of the things I
Speaker 4: love to share with people and I call it and
Speaker 4: I say it in a funny way, and I don't
Speaker 4: know where I get it from, but bowling point or
Speaker 4: you know, is you're trying to get your assets to
Speaker 4: reach the size of critical mass. And I always tell
Speaker 4: people getting to that first one hundred thousand dollars is
Speaker 4: so important and that probably will take you like seven years,
Speaker 4: but people just don't realize the second I mean, the
Speaker 4: last five hundred thousand to get to your first million
Speaker 4: will likely only take seven years too, because that's just
Speaker 4: the power of compounding growth is it builds upon itself.
Speaker 4: So if you can get to a million dollars, you're
Speaker 4: going to get to three million much much faster. So
Speaker 4: I agree. I think inflation is going to pull things
Speaker 4: down or make people have more, but it still doesn't
Speaker 4: change the behavior that's going to create the success of
Speaker 4: the situation.
Speaker 3: Yeah, more than anything, I think folks just need to
Speaker 3: get used to the idea that they're likely going to
Speaker 3: need not just a million, but even more than that,
Speaker 3: because I think to a lot of folks that sounds
Speaker 3: like a large sum of money. But like you said,
Speaker 3: I think it. I think folks are going to be
Speaker 3: arriving at that point of where the portfolio is going
Speaker 3: to get that large sooner than they think. So you
Speaker 3: start your book talking about high school, So take us
Speaker 3: back to that point we don't want to hear you
Speaker 3: talking about anymore about how you were saving money on
Speaker 3: your dates or anything like that. But take us back
Speaker 3: to your economics class and share how that inspired you.
Speaker 4: Yeah, mister Morrow, Themorrow Moment, as I've coined it, is
Speaker 4: because and what's funny is because I've written this book,
Speaker 4: I've actually had some high school fellow Henry County High
Speaker 4: School Warhawks reach out to me. And one of them,
Speaker 4: I have a friend named Alicia, and she was like,
Speaker 4: mister Morrow, And I was like, were you in that
Speaker 4: class with me? And she's like yeah. And I was like,
Speaker 4: do you remember the one hundred dollars a month came out?
Speaker 4: And she goes, no, but I didn't care anything about money.
Speaker 4: But she goes, man, he was salty. And I was like, yeah,
Speaker 4: he was salty. And I've often thought about the fact
Speaker 4: that I don't think mister Morrow was bringing this out
Speaker 4: if he wanted to just necessarily pay it forward, it
Speaker 4: wasn't part of the curriculum. I think this was out
Speaker 4: of a place of regret because he came into class
Speaker 4: and he said, if you you guys, with every one
Speaker 4: of you, if you'd save one hundred dollars a month,
Speaker 4: you could become a millionaire. And I remember thinking whoa
Speaker 4: because at the time I was working at the Harty's
Speaker 4: drive through three dollars and eighty cents an hour, and
Speaker 4: I was like, even though I'm working fast food, I
Speaker 4: think I could save one hundred dollars a month. And
Speaker 4: it was that simple instruction that kind of lit my
Speaker 4: mind on fire and made me realize, Hey, this compounding growth,
Speaker 4: because that's really what he was talking about is something
Speaker 4: pretty magical that if I give my life enough time
Speaker 4: and have the actual desire to putting money to work,
Speaker 4: I could make this happen.
Speaker 1: So is that, mister Morrow math?
Speaker 2: Is that like what's behind the koozy that you use
Speaker 2: on your YouTube show that I think is what this
Speaker 2: one dollar beer costs me eighty eight dollars?
Speaker 4: Well, it is. It's built into it because we have
Speaker 4: on our website if you go to money Go dot
Speaker 4: com slash resources, we have a wealth multiplier which we
Speaker 4: show what every dollar has the potential to become based
Speaker 4: upon your age. And you're exactly right. I mean, the
Speaker 4: reason we have these koozies pre pandemic. We were invited
Speaker 4: to come set up a table for recruitment at a university,
Speaker 4: and then so I was like, you know, what would
Speaker 4: be fun to show all these college kids what a
Speaker 4: dollar could become if they'd start investing. I was like,
Speaker 4: let's make a koozie. They're cheap. Let's just say this
Speaker 4: dollar beer could cost you eighty eight dollars, because that's
Speaker 4: what it is for a twenty twenty one year old.
Speaker 4: And then COVID happened and the koozies weren't needed, so
Speaker 4: I decided to start giving them out to people and
Speaker 4: using them on the show. But that's actually the true
Speaker 4: origin story. But it is hitting on that wealth multiplier concept.
Speaker 1: Yeah, what do you say to folks?
Speaker 3: So obviously one of the reasons mister Morrow was so
Speaker 3: salty on the idea was he was just mad that
Speaker 3: he didn't start investing when he was in high school.
Speaker 3: But for there are a lot of folks a who, yeah,
Speaker 3: they are investing now, but there's a lot of folks
Speaker 3: who might be hearing this message for the first time.
Speaker 3: What do you say to those folks, the folks who
Speaker 3: didn't start investing, maybe until their forties or fifties, do
Speaker 3: you think that they still have an opportunity to catch up.
Speaker 4: Actually, I just describe that in Millionaire Mission. I cover
Speaker 4: that because I don't want everybody think that this book
Speaker 4: was written for only twenty to twenty three year olds.
Speaker 4: This book, I think everybody has their eighty eight times
Speaker 4: over opportunity because the reality is just a component of time.
Speaker 4: And even though you might not discover investing until you're
Speaker 4: thirty five years old, more than likely you're going to
Speaker 4: live beyond late sixties, early seventies. There's going to be
Speaker 4: some dollar in your investment pool that is going to
Speaker 4: get that eighty eight times opportunity. So this is not
Speaker 4: something just for young people. Now that it is something
Speaker 4: I will tell you the longer you wait to start,
Speaker 4: because you remember, we all say early and often is
Speaker 4: how you should do investing. So if you start later,
Speaker 4: I think it does. It doesn't mean your army of
Speaker 4: dollar bills don't don't have the opportunity to compound. It
Speaker 4: just means you probably will have to have a higher
Speaker 4: savings rate just because you're playing catch up to a degree.
Speaker 2: Yeah, So the scarcity mindset, Brian, you talk about that
Speaker 2: in your book, and I think the scarcity mindset can
Speaker 2: be like a double edged sword. You can you can
Speaker 2: have such a scarcity mindset that you are kind of
Speaker 2: stuck and you don't find any way to make progress.
Speaker 2: But you talk about something called that you call forced scarcity.
Speaker 1: So what do you mean by that? Why is that powerful?
Speaker 4: Well? I think force scarcity. Remember, part of what you're
Speaker 4: doing when you start your wealth building journey is you
Speaker 4: got to make habits automatic. I love making things where
Speaker 4: they just happen, no matter there's no behavioral traps or
Speaker 4: anything you fall into. So you want to make the
Speaker 4: good habits as easy as possible and the bad habits
Speaker 4: as hard as possible. If you set up an automatic
Speaker 4: investment plan, or you also set up an automatic debt
Speaker 4: payment plan, every dollar has a purpose. And what I
Speaker 4: like about that when I say create a force scarcity moment.
Speaker 4: Every time I got a pay raise while I was
Speaker 4: trying to get to that initial twenty to twenty five
Speaker 4: percent savings and investment rate, is I would just try
Speaker 4: to allocate, like on a sixty forty ratio, I try
Speaker 4: to put sixty percent towards increasing my savings and investment
Speaker 4: and then I'd let my lifestyle expand by forty percent.
Speaker 4: So you know, of whatever that pay raise amount so
Speaker 4: I kept that healthy ratio until I reached my goal.
Speaker 4: So that way, you don't let your lifestyle choices or
Speaker 4: the lifestyle creep get in front of your investments. Because
Speaker 4: a lot of people, you can get them excited about
Speaker 4: funding their roth IRA one time, but how do you
Speaker 4: get them to do it for five years, ten years?
Speaker 4: Because it's that consistency of behavior that actually creates the wealth.
Speaker 4: But a lot of people lose interest or they get distracted,
Speaker 4: and you've got it. That's why they automatic behaviors are
Speaker 4: what's going to carry you through that and understanding always
Speaker 4: be buying, of course, because that takes out the volatility
Speaker 4: and then force scarcity. So you're not just letting your
Speaker 4: money sit in the account and you invest what's left over.
Speaker 4: You actually pay yourself first and invest on the front
Speaker 4: side and you spend on the backside.
Speaker 1: It's right.
Speaker 3: Yeah, those tax advantage accounts are just a part of
Speaker 3: your formula for success. I feel like respect the financial
Speaker 3: order of operations like that is y'all's mantra.
Speaker 1: You know, you hammer it home every EVERISA show.
Speaker 3: Yeah, I mean, and it's similar to our money. Why
Speaker 3: is the order of operations crucial to success? Why is
Speaker 3: it so important to individual's abilities to become a millionaire?
Speaker 4: Well, I mean I've seen it, you know. In the
Speaker 4: nice intro, y'all said that I've been doing this for
Speaker 4: going on three decades now of doing financial planning, and
Speaker 4: I could and I've always been a math nerd. I mean,
Speaker 4: i just couldn't help myself and I when I found
Speaker 4: out about pem doos. You know, please excuse my dear
Speaker 4: aunt sile And you realize math has an orderly flow
Speaker 4: that you have to do it in that order or
Speaker 4: you don't get the correct answer. In a lot of ways,
Speaker 4: finances are the exact same way. It's just it's structured
Speaker 4: in a way of kind of how do you balance
Speaker 4: the risk of life but also the maximization of time,
Speaker 4: and those things are in a lot of ways are
Speaker 4: in conflict with each other. So I've tried to give
Speaker 4: you the steps where you keep yourself out of trouble,
Speaker 4: but you also don't miss out on that moment of
Speaker 4: getting your army of dollars working as fast as possible.
Speaker 4: So that's that's what I've built with the nine step
Speaker 4: system that's in the financial world of operations.
Speaker 2: So you're just talking about the math, but you also
Speaker 2: talk about the mindset, and that's obviously crucial, right, It's
Speaker 2: part of it is like you're just saying, like, not
Speaker 2: getting someone to fund the roth ira just once, but
Speaker 2: getting toro do it on repeat, getting them excited about
Speaker 2: the ongoing process. One of the stats that stuck out
Speaker 2: to me in your book, you mentioned the lion's share
Speaker 2: of millionaires. Eighty percent of millionaires have an optimistic mindset.
Speaker 2: And I am kind of an eternal optimist myself, but
Speaker 2: why is that so crucial for people's ability? Like how
Speaker 2: come millionaires are more optimistic and less pessimistic?
Speaker 1: And yeah, is it?
Speaker 2: Oh, I've started building wealth and so now I'm starting
Speaker 2: to think good things about the future, Like what came first?
Speaker 1: Do you think?
Speaker 3: No?
Speaker 4: I do think. I think it is a mindset where
Speaker 4: you see opportunity versus all the obstacles that keep you
Speaker 4: from doing something. And I think that's an important thing
Speaker 4: for any success in life in a lot of ways,
Speaker 4: because I mean, you think about it, even if you
Speaker 4: were talking about your relationships, if you went into every relationship,
Speaker 4: whether it's you know, romantic or business or just transactional
Speaker 4: for everyday life, if you went into it thinking everybody's
Speaker 4: out to get you, You're probably going to do a
Speaker 4: lot less positive activities in your life, whereas if you
Speaker 4: just go into it looking for the best of the moment.
Speaker 4: I think it kind of is self affirming in a
Speaker 4: lot of ways. So if you're always looking for the opportunity,
Speaker 4: because that's what a lot of people say, what is luck?
Speaker 4: You know, luck because everybody says, hey, you must be
Speaker 4: lucky or you had luck in your pass and look,
Speaker 4: I will say luck is very important. But what luck
Speaker 4: is is that intersection point between you being prepared and
Speaker 4: then something, a moment of opportunity presents itself, and those
Speaker 4: two things intersect and you jump on it. If you're
Speaker 4: a pessimist, you're probably going to miss out on that moment.
Speaker 4: I look back at my own life and you just
Speaker 4: don't know the little decisions you're making that actually are
Speaker 4: having the big impacts. You never will know those things
Speaker 4: until later. But that's why if you have that positive mindset,
Speaker 4: you're more likely to take those positive steps forward versus
Speaker 4: being so held back and restricting yourself.
Speaker 3: Yeah, and I mean, aside from it also being a
Speaker 3: mindset thing, I mean it I think if you're an optimist.
Speaker 3: You've also looked at the numbers because you've seen that, hey,
Speaker 3: the stock market goes up three out of four years,
Speaker 3: and what that means is you most likely should be investing.
Speaker 3: So it's it's like a little combination of both. I
Speaker 3: think optimism based on historical reality exactly. It's like a combination.
Speaker 3: It's melding history, numbers, and your attitude, I think, all
Speaker 3: in one package. But Brian, a rule of thumb that
Speaker 3: y'all like to encourage folks towards as a twenty five
Speaker 3: percent savings rate. The standard device is ten percent. It's
Speaker 3: clearly not enough in our opinion, But why is twenty
Speaker 3: five percent the key.
Speaker 1: Number for y'all?
Speaker 3: And I would like to hear your share just like,
Speaker 3: how rigid do you think that advice is in your
Speaker 3: mind for especially for folks maybe who are just getting started,
Speaker 3: or maybe for folks who are a little bit further
Speaker 3: down the path.
Speaker 4: Well, I don't mind given clarification, because when I came
Speaker 4: out of college back in the mid ninety I mean,
Speaker 4: Wealthy Barber was a big influence on me, and that
Speaker 4: book talks about ten percent, and then you know about
Speaker 4: the same time, now I had not read it until
Speaker 4: much later. But you know, Dave Ramsey has his you know,
Speaker 4: his whole thing is fifteen percent, and you hear me
Speaker 4: say twenty to twenty five percent, Like, why are you
Speaker 4: so aggressive? Well, the world has changed a lot since
Speaker 4: the nineties. Social Security is more questionable on what it
Speaker 4: means for people, especially you know, if you're young, who
Speaker 4: knows if social Security is going to be there for you.
Speaker 4: Pensions are not exactly making a comeback. I mean, they're
Speaker 4: a rarity. So I think it does put more and
Speaker 4: more on our shoulders that you have to kind of
Speaker 4: plan accordingly that the financial responsibility is going to follow
Speaker 4: on you. However, let me let me say this because
Speaker 4: this is something I always try to clarify. Part of
Speaker 4: that twenty to twenty five percent, if your household income
Speaker 4: is less than two hundred thousand dollars, you can count
Speaker 4: your employer match in that. So if you work for
Speaker 4: a generous employer that's offering you six to eight percent
Speaker 4: of your income, you can quickly see now all of
Speaker 4: a sudden that twenty five percent is going to be
Speaker 4: brought back to you know, maybe seventeen percent on your side.
Speaker 4: The other eight percent's go come from your employer. So
Speaker 4: but it's a balance. You do need to do the math.
Speaker 4: Don't skip the step and make sure you do have
Speaker 4: that higher percentage of your gross income going towards the
Speaker 4: future because you go to need it. You know, everybody
Speaker 4: who's all part of the Yogo movement and thinks that that,
Speaker 4: you know, they have to live for today because tomorrow
Speaker 4: is not promised. The research shows you're probably going to
Speaker 4: live to a ripe old age, see better plan.
Speaker 2: Accordingly, it makes me think about the I'm sure you
Speaker 2: saw this. The Yale professor who released a study about
Speaker 2: consumption smoothing and.
Speaker 4: That one that does does that one burn you know?
Speaker 1: Yeah, we're frustrated by it too. Yeah.
Speaker 4: When I see that, it bothers me. I had somebody
Speaker 4: just post that on a comments section on one of
Speaker 4: my one of my shows. I'm trying to remember which
Speaker 4: show it was, but I was like two days ago
Speaker 4: and I was like, you gotta be kidneys who wrote this.
Speaker 4: The banking system. I mean, it's really frustrating.
Speaker 1: Man.
Speaker 2: I had a similar responsibily saw that. But there is
Speaker 2: like there's a lot of untrue to that. We combat
Speaker 2: of that in a massive way on our show. But
Speaker 2: there's also truth to the fact that, like you don't graduate,
Speaker 2: get your first job and start most of the time,
Speaker 2: most of the time saving twenty five percent. Although I
Speaker 2: think that's a good goal to have, So I guess, like,
Speaker 2: I don't know how variable is that advice? And yeah,
Speaker 2: it's like, is that the goal to have or is
Speaker 2: it like, man, whatever it takes right now, sell your car,
Speaker 2: in your child in order to you know, make sure
Speaker 2: you hit that savings goal.
Speaker 3: No.
Speaker 4: And I think you know if you once you read
Speaker 4: Millionaire Mission, you'll know. My mindset is definitely in your twenties.
Speaker 4: I think it's aspirational. That's why I give you the
Speaker 4: how you every time you get a pay raise, you
Speaker 4: increase it. I do think by the time you're in
Speaker 4: your thirties, you know you ought to really be getting
Speaker 4: close to saving and investing twenty five percent. And there's
Speaker 4: actually math behind that. If you when you go to
Speaker 4: money go dot com slash resources, we have what twenty
Speaker 4: five percent can do for you, and we have it
Speaker 4: by age. And you'll notice anybody who starts saving and
Speaker 4: investing when they're in their twenties, it really doesn't take much.
Speaker 4: I mean, even if you were doing that fifteen percent
Speaker 4: that other people talk about. I mean, you would be
Speaker 4: crushing it as a replacement of your working income at retirement.
Speaker 4: But once you get into your thirties, you'll start seeing
Speaker 4: that twenty to twenty five percent is important by the
Speaker 4: time you reach forty. If you haven't started by forty
Speaker 4: and you're not doing twenty five percent, you might have
Speaker 4: to start thinking about what is your your retirement self
Speaker 4: might have to make you know, you either have to
Speaker 4: subsidize your retirement income, You're going to have to have
Speaker 4: a higher savings rate. There's things that you have to
Speaker 4: that Procrastination or putting it off doesn't mean that you
Speaker 4: won't reach your goals. It just means it's going to
Speaker 4: be some obligation or requirement to get it back on track.
Speaker 4: And when I think about that, you mentioned that Yell study.
Speaker 4: What I don't like about that is the most valuable resource.
Speaker 4: When I talk about the three ingredients to wealth building,
Speaker 4: time is the most valuable one. And it's I'm trying
Speaker 4: to mean, while I'm out there trying to tell people
Speaker 4: repeat Themorrow moment, if you could just say fifty dollars
Speaker 4: a month, one hundred dollars a month. I don't care
Speaker 4: what it is, just do something because the money you
Speaker 4: have at sixty five years of age, ninety five percent
Speaker 4: of that is probably going to be the growth of
Speaker 4: the account if you started young enough, because the compound
Speaker 4: and growth is that powerful. If you tell somebody, hey,
Speaker 4: go ahead and spend while you're young, because you're going
Speaker 4: to get pay raises in the future and it's going
Speaker 4: to be okay to catch up, they're not giving enough
Speaker 4: value to the time component. And that just breaks my
Speaker 4: heart because like buy now, pay later, and other things
Speaker 4: like that, everybody is trying to help make consumption easier,
Speaker 4: and I'm like, that is the opposite problem we have
Speaker 4: where we have a problem in America on is people
Speaker 4: actually saving a little bit today for that great, big,
Speaker 4: beautiful tomorrow. So don't don't add to the problem of
Speaker 4: consumption that we already have by saying, hey, go spend more.
Speaker 4: You're young, you're fabulous, go live your best life. That
Speaker 4: is a fool's gold. It reminds me of you know,
Speaker 4: Pinocchio when they go to Pleasure Island. You know, like, oh,
Speaker 4: you go to turn into a donkey if you're not careful.
Speaker 1: It's true.
Speaker 3: All right, We've got so much more to get to
Speaker 3: with you, especially just when life gets messy. How it
Speaker 3: is that we prioritize some of the different goals that
Speaker 3: we have.
Speaker 1: We'll get to that more right after this. All right,
Speaker 1: we're back to the break.
Speaker 2: We're still talking to with Brian Preston. We're talking about
Speaker 2: becoming a millionaire. But man, one of the hardest parts
Speaker 2: of life to get through in order to achieve millionaire
Speaker 2: status is Brian's what you refer to as the messy middle.
Speaker 2: And some of those years, especially now, it's like the
Speaker 2: Sandwich generation. You've got kids, and then you've got parents
Speaker 2: you need to help out who might not have saved
Speaker 2: enough themselves. Can you define the messy middle, because there's
Speaker 2: a lot of how to money listeners I think in
Speaker 2: that phase of life.
Speaker 4: Yeah, Man, I tell you, if you're in the messy middle,
Speaker 4: you'll know you resemble this if you feel like you're
Speaker 4: short on both tom because you've got you know, your marriage,
Speaker 4: you've got children, you've got your job responsibilities, you've got
Speaker 4: the commune unity that you're also trying to be active
Speaker 4: with your neighbors and so forth. But then you also
Speaker 4: feel like you're short on money because there's so many
Speaker 4: things pulling on both your time and your resources that
Speaker 4: you just burning it on both ends and you're like,
Speaker 4: how in the world am I going to make it
Speaker 4: through this? And I always am super sympathetic to all
Speaker 4: of my audience that's in this phase, and by the
Speaker 4: way I've been in this phase, I've shared my journey
Speaker 4: where sometimes I feel like, also for successful people, we
Speaker 4: already have this mindset we've got to achieve, We got
Speaker 4: to go keep hitting all the life achievements as fast
Speaker 4: as we possibly can. And I'm always like, guys, slow
Speaker 4: it down, deep breaths, this is going This season will pass.
Speaker 4: Just don't get distracted, don't stop doing what you're doing.
Speaker 4: But it's okay to actually recognize that we all struggle
Speaker 4: when you have all these life things. And I even
Speaker 4: in the book, I put some charts to let people
Speaker 4: know because I felt like there would actually be some
Speaker 4: coping or at least some relief and you're not in
Speaker 4: this alone. Where I show people's incomes versus you know,
Speaker 4: disposable income versus obligations, or disposable time versus you know,
Speaker 4: you know, what they've got going on, and I'm hoping
Speaker 4: people will realize, yes, those days are long, but the
Speaker 4: years are short, and to kind of hang in there.
Speaker 4: You'll make it through it, but just don't lose the
Speaker 4: plot on keeping some basic things going on to work
Speaker 4: for your financial future.
Speaker 3: And I saw those charts that you've gotten there, Brian,
Speaker 3: and so like it's it's clear, like there's clear evidence
Speaker 3: that truly, I mean, what is it.
Speaker 1: It's life satisfaction.
Speaker 3: Also is like at a nat or like at the
Speaker 3: stage in life the amount of financial responsibility is like
Speaker 3: an all time high. But I think for a lot
Speaker 3: of folks, like there might be folks like in their
Speaker 3: twenties who are saying, hey, I'm not in my thirties yet,
Speaker 3: and I feel like the messy middle is here, you know.
Speaker 3: And so like there's something about when you get older, obviously,
Speaker 3: as you mature and get wiser, like you look back
Speaker 3: on the past and it's easy to kind of forget
Speaker 3: all the hardship that you're going through. But like that
Speaker 3: doesn't discount think think what a lot of younger folks
Speaker 3: are dealing with now. And so I think a lot
Speaker 3: of times it feels like that that messy mental it's
Speaker 3: just constant, Like it's like it hits you in your twenties,
Speaker 3: you feel it certainly in your thirties as folks are
Speaker 3: starting to have kids, if that's a part of their plan,
Speaker 3: they're trying to achieve other financial goals like.
Speaker 1: When they're in their forties.
Speaker 3: But yeah, so I guess how would you encourage folks
Speaker 3: to maybe set financial priorities As you got all these
Speaker 3: goals and you're trying to pick which ones you want
Speaker 3: to pursue. How do you talk folks through that?
Speaker 4: Yeah, we've been talking. We've even got some content coming
Speaker 4: down the pipe called financial tug of war. And I
Speaker 4: feel for young people right now because we just came
Speaker 4: through the post pandemic and the huge inflation that came.
Speaker 4: And then you take into account also the way they're
Speaker 4: fighting inflation is by jacking up interest rates. I mean,
Speaker 4: there's a lot working against people, and I can see
Speaker 4: the frustration that would feel. But I want people to
Speaker 4: know that I really do believe in reversion to the mean.
Speaker 4: And that doesn't mean I think the housing prices are
Speaker 4: going to drop. I just think that it will take
Speaker 4: time and some of this stuff will mellow. From a
Speaker 4: historical perspective, but that doesn't mean you just need to
Speaker 4: sit back and wait for an opportunity to present itself.
Speaker 4: I think you actually have to start figuring out how
Speaker 4: you navigate this well for yourself. So let me give
Speaker 4: you some examples. One of the first things I talk
Speaker 4: about is, like y'all mentioned buying a house, because I
Speaker 4: imagine that is a hard, hard thing right now. This
Speaker 4: is one of the things I love about Millionaire Mission
Speaker 4: and the financial order of operations. A lot of gurus
Speaker 4: out there that were telling from the rooftops you had
Speaker 4: to put down twenty percent on your first house, and
Speaker 4: then they've had to come hat in hand and say, well,
Speaker 4: maybe ten percent because of how things are. Our rules
Speaker 4: have never changed because I've always tried to be as
Speaker 4: transparent as possible. I went and asked all of my
Speaker 4: financial advisors because I internally knew how I paid for
Speaker 4: my first house, and I ask all my financial advisors
Speaker 4: who work with me, and I say, how much did
Speaker 4: y'all put down? When we found out the lion's share
Speaker 4: of financial advisors put down three to five percent on
Speaker 4: their first house. I'm not talking about the upgraded house,
Speaker 4: the second house. You know, when you go to the
Speaker 4: bigger house for the kids. Talking about that first house
Speaker 4: three to five that's what I put down on my
Speaker 4: first house. Now you can kind of look at it
Speaker 4: as an extension of your step four of the financial
Speaker 4: order operations of your cash reserves. You might want to
Speaker 4: just boost up your cash beyond the three to six
Speaker 4: months so you can get in that first house. And
Speaker 4: that's how we're we're kind of navigating these things. Is
Speaker 4: take where it is, what's going on right now, how
Speaker 4: do you adapt and still reach your goals, but also
Speaker 4: don't walk completely away from what your future self is
Speaker 4: going to need as well. And that's why it's back
Speaker 4: to that Pemdos example. You have to know the orderly
Speaker 4: flow for how to handle every dollar that comes into
Speaker 4: your control, and we've tried to lay that out for everyone.
Speaker 2: What's your overall philosophy on debt? I mean, I know
Speaker 2: that you don't love it. You don't you're encouraging the
Speaker 2: most nefarious kinds of debt or anything like that. But
Speaker 2: you're also not a hardliner all debt is bad dude, either.
Speaker 2: So how do you think about debt? And do you
Speaker 2: think that like some wealth or some debt can actually
Speaker 2: help accelerate people's ability to build wealth.
Speaker 4: Yeah, I'm just not a debt crusader because I just know,
Speaker 4: once again, I don't want to be a hypocrite. I
Speaker 4: look at my own life and I'll look at how
Speaker 4: I've used debt. I mean, like, right now, I'm struggling
Speaker 4: because I have my primary mortgage. I could strike a
Speaker 4: check to pay it off. It's seventy five thousand dollars,
Speaker 4: but I just having a hard time just writing that
Speaker 4: check because it's two and a half percent interest rate.
Speaker 4: I know. It's not to brag, it's just to give you,
Speaker 4: guys that I really do struggle with some of these
Speaker 4: decisions as well. So here, but let me tell you
Speaker 4: what I've done from a mathematical standpoint, because I've tried
Speaker 4: to balance that when you're young does get wealthy behaviors
Speaker 4: that you need to focus on. When I say young,
Speaker 4: I mean under forty five years of age. Your wealth
Speaker 4: multiplier is so powerful before age forty five that if
Speaker 4: you're trying to pay off a two and a half
Speaker 4: to three percent mortgage before you're saving twenty five percent,
Speaker 4: you have really missed a key opportunity. However, I think
Speaker 4: when you flip the script. Once you get over forty
Speaker 4: five and you've built success, so now it's stay wealthy behaviors.
Speaker 4: We ought to focus on, how do we de risk
Speaker 4: our lives so we actually can stay wealthy and stay
Speaker 4: successful over the long term. But all means, let's pay
Speaker 4: off some of those low interest debts, because now it's
Speaker 4: not a matter of maximization, it's a matter of, hey,
Speaker 4: how do we take some variables off of the playing
Speaker 4: field so that we actually get to keep what we have.
Speaker 4: But it does break my heart when I find out
Speaker 4: a thirty two year old is paying off a three
Speaker 4: or four percent mortgage, especially if they haven't started saving
Speaker 4: and investing twenty five percent.
Speaker 3: Sure, okay, so while we're talking about houses, your guideline
Speaker 3: is for folks to keep their their total home expenses
Speaker 3: under twenty five percent of their gross income, which is
Speaker 3: harder to do these days. And especially for somebody who's
Speaker 3: getting into that first home and they're putting down a
Speaker 3: smaller amount, they're going to see you're going to see
Speaker 3: higher interest payments, You're gonna see a higher mortgage amount.
Speaker 3: I guess I'm curious where things are. Just folks you're
Speaker 3: talking to, are you getting any pushback on that advice
Speaker 3: of the keeping your housing costs under twenty five percent.
Speaker 4: Yeah, this is how Just for clarification, I'm also a
Speaker 4: big proponent, especially for those under forty five, get the
Speaker 4: thirty year mortgage, give yourself as much time, because that
Speaker 4: also allows you to buy a little bit more house.
Speaker 4: You couple that with that lower down payment. I think
Speaker 4: it gives you some flexibility. But by all means, especially
Speaker 4: my listeners that are I like to call my coastal listeners,
Speaker 4: you know, the New York's, the California is, they struggle
Speaker 4: with some of these things. So I say, well, let's
Speaker 4: let's be I want to be honest with you, because
Speaker 4: my system is adaptable. If you live like in New
Speaker 4: York and you don't even own a car, I mean,
Speaker 4: then I'm going to give you a little more grace
Speaker 4: on the twenty five percent. And I talk about this
Speaker 4: in the book, because you don't have the five to
Speaker 4: eight percent that's probably going towards transportation that somebody who
Speaker 4: lives in the suburbs of maybe the Southeast or the
Speaker 4: Midwest has. So if you're in those places especially have
Speaker 4: had been ravished by inflation, I try to give you
Speaker 4: the grace to work through that. But I do think
Speaker 4: for the majority of people out there listening to this
Speaker 4: and hopefully reading Millionaire mission, I would love you to
Speaker 4: have the austerity or the discipline to try to keep
Speaker 4: it at twenty five percent. And the reason is is
Speaker 4: because I want you to be able to not only
Speaker 4: have a house to live in, I want you to
Speaker 4: be able to save for the future, and then I
Speaker 4: want you to be able to make memories. You've got
Speaker 4: to have some margin to live life, to spend some money,
Speaker 4: and that's what I try to put the mindset in
Speaker 4: the book of It. Yes, I'm a maximizer of the math,
Speaker 4: but man oh Man is a guy who's now in
Speaker 4: his fifties. I want you to enjoy every decade ye're
Speaker 4: on this planet. And if you just lock yourself in
Speaker 4: a room for twenty five years until you pop out
Speaker 4: of the toaster of and is a millionaire, I think
Speaker 4: you will have missed a lot of the sweetness of life.
Speaker 4: So that's why I try to help you to balance
Speaker 4: that so you can really have a life well lived.
Speaker 3: Yeah, we totally agree with the nuance that you're bringing
Speaker 3: to the conversation here, because yeah, I mean We're not
Speaker 3: guaranteed these additional decades. We're not even guaranteed additional years
Speaker 3: or even days. And I like that balance that you
Speaker 3: strike because, like even the housing conversation, sometime you buy
Speaker 3: a home, sometimes you move. There are things that you
Speaker 3: do that don't financially make sense. But there is more
Speaker 3: to life than just the finances and trying to find
Speaker 3: ways to optimize every single dollar. And yeah, I mean
Speaker 3: that's one of the things I love about just how
Speaker 3: you've written the book. You constantly kind of go back
Speaker 3: to this. But it's good that you know the numbers
Speaker 3: and you know that you know how things work. But
Speaker 3: what are your life goals? What do you want your
Speaker 3: life to look like? Yeah, yeah, I'm curious actually too,
Speaker 3: as folks are. I think there's a lot of folks
Speaker 3: out there and they don't feel financially prepared even to
Speaker 3: have kids, because that's another massive expense. But in my mind,
Speaker 3: that's another one of those sort of life goals, right,
Speaker 3: it's just like, oh, well, this is a huge goal
Speaker 3: of ours, this is what we want our life to
Speaker 3: look like.
Speaker 1: What would you say to those.
Speaker 3: Families, to folks who are trying to weigh the pros
Speaker 3: and cons of having kids.
Speaker 4: Yeah, Man, kids is a big thing, and I definitely
Speaker 4: think this one is one that you want to have
Speaker 4: both the math and the mindset, right. But I think
Speaker 4: also my perspective of coming at this from somebody who's
Speaker 4: in their fifties who's had children, my thoughts toward this
Speaker 4: is a little more sentimental than just the math. And
Speaker 4: I think about the fact of I think a lot
Speaker 4: of people, especially us, financially minded people or financial mutants
Speaker 4: if you read any of my content, is we are
Speaker 4: always worried about affording our kids. But I want to
Speaker 4: tell you get outside of that to a degree because
Speaker 4: I and here's where life is somewhat unfair, is that
Speaker 4: when you're in the having children's stage, you're typically in
Speaker 4: what we call the messy middle, where you're both without money,
Speaker 4: you're without time, and for me having the perspective of
Speaker 4: having older children, but also I don't even mind sharing
Speaker 4: that I have the facet of a child that will
Speaker 4: likely have to live with me for the rest of
Speaker 4: my life because she's got her own struggles, she's on
Speaker 4: the spectrum and we'll need some assistance. But even with
Speaker 4: those type of struggles, I still in this new phase
Speaker 4: of life. I look back on raising these children in
Speaker 4: this messy middle and I have all these blossoming memories.
Speaker 4: And for those who don't know, when I talk about
Speaker 4: blossoming me, this is where there's a tendency with us humans.
Speaker 4: Is that as you get more time beyond when you're
Speaker 4: going through struggles or going through events of life, you
Speaker 4: find that when you look back on the memories, they
Speaker 4: actually get better with time. Some of the negative stuff
Speaker 4: falls off, or it becomes a funny antidote or something
Speaker 4: that makes the story that much more special or the
Speaker 4: memory that much more special. And I think that happens
Speaker 4: as a parent, for sure. And so that's why when
Speaker 4: you hear all these voices in society right now saying, hey,
Speaker 4: don't go get married, don't have kids, I'm here to
Speaker 4: be that counter voice to tell you I'm on the
Speaker 4: other side of that. And I even heard my own daughter,
Speaker 4: you know, my oldest daughters and just she's in her twenties,
Speaker 4: and she was expressing that she had concerns about having
Speaker 4: children because she didn't consider herself a kid person. And
Speaker 4: I was like, honey, I'm the exact same way. I
Speaker 4: would never classify myself as the kid person who wanted
Speaker 4: to go smell all the babies and all that stuffs
Speaker 4: you see people. But I am one of those people
Speaker 4: that even if you're not a kid person, I can
Speaker 4: pretty much promise you when you get that blessing of
Speaker 4: a newborn, you're going to love that child. And and
Speaker 4: and what's unfair, because I keep talking about the unfairness,
Speaker 4: but this is important that you have this context. Is
Speaker 4: that I know for me is that as I've gotten
Speaker 4: older and I'm getting more sentimental, your your children will
Speaker 4: get more and more independent. And that's just one of
Speaker 4: those things that you'll struggle with. And that's why I've
Speaker 4: often thought, man, if I had to do this all
Speaker 4: over again, we might have had kids a little sooner.
Speaker 4: We might have had even more kids, because I as
Speaker 4: I enter this wisdom phase of life, I've realized money
Speaker 4: is just a tool, and it's a balance of both
Speaker 4: that math the mindset, but also having the life well lived.
Speaker 4: And I do think that there is a sweetness to
Speaker 4: having children, even if you have struggles. It's just it's
Speaker 4: one of those things that I've really looked into on
Speaker 4: my life. But I'll also have liked to share it
Speaker 4: and kind of pay it forward. So people who are
Speaker 4: on that balance are trying to figure out how to
Speaker 4: be good with money but also make sure I have
Speaker 4: that life well lived. And even if I'm considering children,
Speaker 4: these are the things I've experienced after, you know, thirty
Speaker 4: years of saving and investing in twenty years of being
Speaker 4: a parent.
Speaker 2: Yeah, I mean, that's beautifully said, and I'm curious to
Speaker 2: hear you talk. You talk about in the book about
Speaker 2: the opportunity cost of debt, and so we've talked about
Speaker 2: maybe some of the reality that certain kinds of good
Speaker 2: debt can accelerate your ability to build wealth. Maybe don't
Speaker 2: shy away from I mean, don't take on as much
Speaker 2: student loan debt as you possibly can, but also don't
Speaker 2: like avoid it completely.
Speaker 1: Or maybe you're.
Speaker 2: Buying a house, Hey five percent down is enough to
Speaker 2: make sure that you realize that dream. But then there
Speaker 2: are other kinds of debt where there's a massive opportunity costs. Right,
Speaker 2: it's not just that you're paying for past purchases, but
Speaker 2: it's what that's preventing you from being able to do right.
Speaker 4: So debt, I think it's important to remember debt is
Speaker 4: definitely dangerous, but at the end of the day, it's
Speaker 4: still is a financial tool. And I like to say
Speaker 4: on the show all the time is that you have
Speaker 4: to begin with the end in mind. And when I
Speaker 4: say that, what I'm actually talking about is that when
Speaker 4: you talk about the concept, especially in this situation, debt,
Speaker 4: you have to ask yourself are you using debt to
Speaker 4: build or using debt to consume? And you mentioned a
Speaker 4: few examples in the question, but let's talk about like
Speaker 4: student loans. Student loans have the opportunity to be really
Speaker 4: good for you if they give you the opportunity to
Speaker 4: earn more money or build a better financial life for yourself.
Speaker 4: But that all comes back to the earning potential. What's
Speaker 4: the actual return on investment that you will actually get
Speaker 4: off of taking on that student loan debt? Is it
Speaker 4: going to actually increase your earning potential over life? So
Speaker 4: that's why you've got to pay attention to where do
Speaker 4: you go to school. You're going to pay attention to
Speaker 4: you what's your major in school? And those type of
Speaker 4: things will impact that return on it investment. And then
Speaker 4: you know, I try to stay away from all the
Speaker 4: consumption debt. You know, that's why I try to avoid
Speaker 4: the high car payment, try to avoid the credit card debt,
Speaker 4: because that's just all spending, that's all consumption, that's not
Speaker 4: actually trying to help you build anything. And I think
Speaker 4: it's important to talk about the power of leverage debt
Speaker 4: because I would be a hypocrite if I didn't share that, Yes,
Speaker 4: I have used debt to actually multiply my wealth, especially
Speaker 4: when I look at some of the things I've done
Speaker 4: later in my financial life of doing commercial debt and
Speaker 4: other levered products. The reason this works is because when
Speaker 4: you use debt to build, you're only putting down a
Speaker 4: small sum of money as a down payment on the
Speaker 4: asset that you're purchasing with the debt, and is the
Speaker 4: total asset goes up in value, and since you've only
Speaker 4: put down a small amount, you're getting full return on
Speaker 4: the full market value of the asset that can be
Speaker 4: exponentially bigger. So that's the good side of using leverage debt.
Speaker 4: But remembers this cuts both ways, because where this gets
Speaker 4: dangerous is that when you're putting down such a small
Speaker 4: amount of money on such a big asset and then
Speaker 4: you're financing it through interest, especially these higher interest rates
Speaker 4: we're facing right now if anything in your assumptions goes wrong,
Speaker 4: you're now responsible for the carry costs, the maintenance, and
Speaker 4: all the other expenses that come with that on the
Speaker 4: entire endeavor. And you can see how very quickly this
Speaker 4: can go sideways and destroy your financial life. So I
Speaker 4: always tell people, you know, it's back to bringing this
Speaker 4: full circle if you've got to begin with the end
Speaker 4: in mind and the fact that there's nothing wrong with
Speaker 4: debt if you're disciplined, there's nothing wrong with using leverage debt.
Speaker 4: I think on big assets or good assets, you know,
Speaker 4: like your first house with only putting down three to
Speaker 4: five percent as long as it stays below your twenty
Speaker 4: five percent of your gross income. Or when you get
Speaker 4: to step eight of the financial order of operations, where
Speaker 4: you have your good financial foundation underneath you and you
Speaker 4: want to start investing in either residential or commercial real estate,
Speaker 4: that works because you've actually got the assets to support
Speaker 4: you in case the debt goes sideways. But if you
Speaker 4: try to fake it until you make it, I think
Speaker 4: you'll find out very quickly that debt can be chainsaw dangerous. Yes,
Speaker 4: it can be effective, but it also can damage you
Speaker 4: to the point where you'll never be.
Speaker 1: Able to recover.
Speaker 2: We've got more to get to with Brian, including we're
Speaker 2: going to hold his feet to the fire. How does
Speaker 2: the financial advisor model work? And what does he think
Speaker 2: of his profession these days. We'll get to some questions
Speaker 2: on that when we get back from this break.
Speaker 3: All right, we are back from the break, and just
Speaker 3: a second ago, Brian, you're talking about we were talking
Speaker 3: about paying interests, we're talking about debt, and you're talking
Speaker 3: about being transparent. We'll talk to us about the pay
Speaker 3: metal for advisors because in your book you say this,
Speaker 3: you say that everyone who works in finance has a
Speaker 3: conflict of interest and you're included in that. Oh yeah,
Speaker 3: for sure, I appreciate the honesty. But yeah, what I
Speaker 3: want to know is, like what questions should individuals have
Speaker 3: about how their advisors get paid and the services they
Speaker 3: should expect, you know, just to at least bring some
Speaker 3: of these conflicts out in the open as the folks
Speaker 3: are starting to have those conversations.
Speaker 4: Yeah, I feel like that there's some things unique things
Speaker 4: going on in social media where they're you know, essentially
Speaker 4: not telling the complete truth on everything. Like we just
Speaker 4: covered this first, I'll give you the short answer, I
Speaker 4: like thee only fiduciary advisors. But the thing, and by
Speaker 4: the way, if you're looking at this is the category
Speaker 4: of people that actually join NAPA x Y Planning Network
Speaker 4: or Garrett and they actually, in addition to the government
Speaker 4: fiduciary standard, they actually sign o saying that hey, I
Speaker 4: am prioritizing that I'm going to put my client's interest
Speaker 4: ahead of my own. That's only around two percent of
Speaker 4: the entire industry of financial planning. Now what has got
Speaker 4: a lot of attention is that there are three different
Speaker 4: models within that fee only. There is body hour, there
Speaker 4: is retainer, and then there's the traditional AUM model. And
Speaker 4: I feel like a lot of there's people going after
Speaker 4: the AUM advisors because it's traditionally around one percent of
Speaker 4: assets under management. They take that one percent and then
Speaker 4: they do a cool math exercise where they say, hey,
Speaker 4: if you grow your assets to ten million dollars, if
Speaker 4: you pay an advisor, it would only be seven point
Speaker 4: nine million or something like that. What they fail to
Speaker 4: tell you that is is it's is your assets get bigger,
Speaker 4: your fee actually goes down. So they're actually overstating the
Speaker 4: fees by almost twice as much because I know, for
Speaker 4: like an R model, once you have three million dollars,
Speaker 4: it drops down too point seventy five. Once you're five million,
Speaker 4: it's a half a percent, and that dramatically changes it.
Speaker 4: And then you take into account the Vanguard and the
Speaker 4: Russell study, it says, get outside of the investments. I mean,
Speaker 4: we bought in funds for our clients, so it's not
Speaker 4: like we're even trying to beat the market. That's not
Speaker 4: what you hired a financial advisor. If you have a
Speaker 4: financial advisor and how they're doing is managing your investments,
Speaker 4: you're probably not in the right place, because yeah, maybe
Speaker 4: there's some discussion on that. And that's by the way,
Speaker 4: I am the person that in two thousand and six said,
Speaker 4: you know what, I hate that the only people I
Speaker 4: can actually help build wealth are super successful families. So
Speaker 4: I'm going to start just giving it away. And I've
Speaker 4: kind of had this whole abundant cycle mantra for eighteen
Speaker 4: years where I've just been given away so much information.
Speaker 4: But the thought is also and by the way, it
Speaker 4: didn't start this way, but I've realized later on that yes,
Speaker 4: we have started meeting clients this way. Is that I
Speaker 4: don't want you to come to me until you feel
Speaker 4: like complexity is kicking you all over the place. You know,
Speaker 4: if you're simple, meaning that you're just on the journey
Speaker 4: trying to get a twenty to twenty five percent, you
Speaker 4: have your first child, and you're you know, after you
Speaker 4: got married, and you just need to buy some term
Speaker 4: life insurance and you need a will. Your situation so simple,
Speaker 4: you shouldn't hire anybody. We give you so much free advice.
Speaker 4: That's where you should be. But you will find as
Speaker 4: you own businesses, as you own real estate, as your
Speaker 4: tax return is going all over the place, as your
Speaker 4: tax margin rates are going up, as your distribution and
Speaker 4: you know, all those things kick in with tax planning.
Speaker 4: You're like, man, I've only done this once. It should
Speaker 4: be nice to bring somebody in who's done this before.
Speaker 4: And that's where I feel like, you know, it's actually
Speaker 4: a deal. I mean, because if you're when you're when
Speaker 4: you have a three million dollar portfolio and the market
Speaker 4: loses twenty percent, I mean, if you if you walk
Speaker 4: away from six hundred grand right there because you were like,
Speaker 4: well I'm right, or die to total market or s
Speaker 4: and P five hundred and you didn't and you're not
Speaker 4: doing all the estate planning everything else. I think you
Speaker 4: go find it hits a little different than when you
Speaker 4: have one hundred and fifty or three hundred thousand dollars
Speaker 4: and you lose that same ten or twenty percent. Beginning,
Speaker 4: you don't even have the complexities. So I always say, look,
Speaker 4: I think it's like most things, there's what looks good
Speaker 4: on the chart in social media, but personal finance is
Speaker 4: very personal and I look at it no different than
Speaker 4: like I read Outlive by Peter Atia, you know, on
Speaker 4: for medical stuff, and I think it's great that he
Speaker 4: wrote this book that laid out how to be better
Speaker 4: with your own personal health. But nobody ever gets mad
Speaker 4: at Peter that the way he makes his living is
Speaker 4: that for very successful people, he runs a high end
Speaker 4: concierge medical practice. And by the way, I go to
Speaker 4: a high end medical concierge practice. I pay a lot
Speaker 4: of money to go to my doctor because I want
Speaker 4: him to have a relationship with me and not have
Speaker 4: to treat me as just a file that he pulls
Speaker 4: from the wall or digitally to see. I want him
Speaker 4: to know, hey, Brian struggles with this. He's paying a
Speaker 4: lot of money to me so he can keep his health,
Speaker 4: because he's worth a lot more alive than he is dead.
Speaker 4: I think your finances are the same way.
Speaker 3: Now.
Speaker 4: Of course I have a conflict. I've worked in this industry,
Speaker 4: but I think that if you know me, and that's
Speaker 4: what I tried to lay out in the book, you
Speaker 4: know where my heart is. You can tell tell what
Speaker 4: I'm trying to do with that heart of an educator
Speaker 4: to get people to be the best version of themselves.
Speaker 1: I love all the.
Speaker 4: People who come and tell me what a scoundrel I
Speaker 4: am as they're taking all my free information, and I'm like,
Speaker 4: just keep taking the free stuff. I could use a
Speaker 4: lot less of you throwing dirt on me on the
Speaker 4: way out, but please, I want This is an abundance
Speaker 4: mindset that I have. That's why I wrote a book. People,
Speaker 4: I had a guy postos. I see you've completed your
Speaker 4: millionaire mission by writing that book. I'm like, you have
Speaker 4: obviously never written a book.
Speaker 1: Yeah, the economics of book writing it not great.
Speaker 4: It's not I would make a lot more money selling
Speaker 4: another course or go and taking a sponsorship. We are
Speaker 4: very purposeful that we don't do a lot of that
Speaker 4: stuff because I really do have this mindset. I want
Speaker 4: you to know how money works. I want you to
Speaker 4: be good with your money, maximize the moments. And that's
Speaker 4: why I don't have a problem talking about how I
Speaker 4: get paid, because I really do believe it. And that's
Speaker 4: why I give everybody that roses is that I think
Speaker 4: there's a place for hourly advisors. I think there's a
Speaker 4: place for retainer advisors. But I also think that for
Speaker 4: high end klon I'm not going to apologize. I think
Speaker 4: there's a great place for that ongoing relationship because nobody
Speaker 4: ever talks about the dumbar principle either. You know, it's
Speaker 4: a lot of research that shows humans just don't do
Speaker 4: well beyond one hundred and fifty relationships. And I think
Speaker 4: about that a lot. With every one of my advisors
Speaker 4: and even myself, we respect those numbers, Whereas I think
Speaker 4: a lot of other firm layouts or fee structures they
Speaker 4: maximize five hundred relationships, four hundred relationships, and that's just
Speaker 4: a different service model is not something I believe in.
Speaker 4: So I try to give free to everybody that can
Speaker 4: take free. But if you want personal time, that's expensive
Speaker 4: because I only have so much time, and my advisors
Speaker 4: only have so much time.
Speaker 2: Yeah, yeah, I mean just succinctly what you were just
Speaker 2: saying there. You say in the book success has the
Speaker 2: side effect of complexity, and I think it's so true that,
Speaker 2: like you're doing the DIY stuff over a number of years,
Speaker 2: you're kind of in the messy middle, training to navigate,
Speaker 2: trying to contribute to those retirementcounts, trying to grow your
Speaker 2: net worth, and then at some point you might hit
Speaker 2: a spot in your life where you're like, I feel
Speaker 2: like I'm in over my head. I feel like I
Speaker 2: need maybe some of them more of that, you know,
Speaker 2: tax advice, because I'm getting into some new territory, and
Speaker 2: that's maybe when an advisor becomes necessary. I think sometimes
Speaker 2: it's like, you're twenty two, you don't need a financial advisor,
Speaker 2: but hey, maybe you will when you're forty. THROO, hopefully
Speaker 2: you will if you've had that much success. One of
Speaker 2: the other things you say is that success and a
Speaker 2: high savings rate mean that you can fund what you
Speaker 2: call abundance goals. That sounds like a lot of fun
Speaker 2: are what are abundance goals?
Speaker 4: Well, I mean for a lot of people, it's just
Speaker 4: you know, now as we load up the kids college
Speaker 4: funds and those type of things. But I also can mean,
Speaker 4: you know, those once in a lifetime trips for me
Speaker 4: it was you know, I drive a little bit nicer
Speaker 4: car now because I was just you know, these are
Speaker 4: the things where you do it for yourself, not to flex,
Speaker 4: like you know, I feel like that's where our society
Speaker 4: is now, is that we tell you how go go
Speaker 4: show everybody how successful you are. But I think that
Speaker 4: like you know, you get to a point with like
Speaker 4: step eight, you can now do the nicer retirements, you
Speaker 4: can need it, the nicer restaurants, You can do things
Speaker 4: because your automatic wealth creation system is already that up
Speaker 4: for you. So now that the margin or spread from
Speaker 4: some of those life decisions just not gonna hurt you
Speaker 4: like it would if you were skipping out on the
Speaker 4: roth IRA or maxing out your employer plant. It's all
Speaker 4: beyond that. And also real estate, I mean, I love
Speaker 4: real estate, but you just got to, like I said,
Speaker 4: it's time or place on where if you're going to
Speaker 4: jump into that.
Speaker 3: Make some of those smart decisions early on follow of
Speaker 3: the sacrifice, you too can drive that Tessa Plaid enjoy
Speaker 3: like you do Probalyan. But uh hey, if if folks
Speaker 3: wanted to get more Brian Preston in their life worship folks,
Speaker 3: go for that.
Speaker 4: No, man, I've been hanging out at the same place
Speaker 4: for the last eighteen years. You can just go to
Speaker 4: moneyg dot com and you know, and that's why I
Speaker 4: love that I get to hang out with with you
Speaker 4: guys and and see you when we get in those
Speaker 4: creator communities. Is because this is fun. If I can
Speaker 4: help hold the ladder for someone to become a better
Speaker 4: version of themselves, We're gonna keep doing this. I know
Speaker 4: you guys are part of that. But I'd love if
Speaker 4: you want to go check out money do dot com
Speaker 4: and if you want free stuff, because leaning back on
Speaker 4: that I give tons of free stuff, just go to
Speaker 4: moneyguide dot com. Slash resources will load you up with
Speaker 4: all kind of downloadable tools and resources.
Speaker 1: Awesome, Brian, always a pleasure, my friend. Thanks so much
Speaker 1: for coming on the show today.
Speaker 4: I can't wait to see you guys soon.
Speaker 3: Yeah, hopefully we will see Brian seeing we didn't mention this,
Speaker 3: but did he mention that he's up in Tennessee.
Speaker 1: He's not that far from us. Here in Atlanta. Close. Yeah,
Speaker 1: we're real close, Southeast Unite.
Speaker 3: Awesome conversation though with Brian preston his new book Millionaire Mission.
Speaker 3: But yeah, Joel, did you have a takeaway? I feel
Speaker 3: like we covered a lot of ground and we're able
Speaker 3: to get a lot of some of the you know,
Speaker 3: like rules of thumb, the points of view that Brian
Speaker 3: espouses and talks about there on his show.
Speaker 1: But yeah, what was your big takeaway for today?
Speaker 2: I think the biggest takeaway I had was when he
Speaker 2: said make the good habits as easy as possible, make
Speaker 2: the bad ones as hard as possible, and like he
Speaker 2: was speaking even at the end there towards our human
Speaker 2: propensity to do things that aren't in our own best interest.
Speaker 2: And part of that is not saving enough. Part of
Speaker 2: that is maybe ill timed investments or trying to time
Speaker 2: the market. And oh, hey, market set at all time high.
Speaker 2: Maybe I should just, like I don't know, pull money
Speaker 2: out for a little bit, stickening cash because cash is
Speaker 2: paying more. But then look what happened. What's happened with
Speaker 2: the markets over the past eighteen months. Like it's a
Speaker 2: foolish thing to do, right, And a financial advisor would
Speaker 2: potentially help you avoid some of those mistakes.
Speaker 1: Well.
Speaker 2: But I think it's so true is when we make
Speaker 2: the good habits easy instead of having to make a
Speaker 2: decision every single time to do the right thing, if
Speaker 2: we put it on an autopilot and the decision is being
Speaker 2: made in our behalf without you know, really our brain
Speaker 2: having to do anything for us, like make the decision
Speaker 2: once and then put it on repeat, that's such a
Speaker 2: great way to help yourself out. And so I like
Speaker 2: that agree the bad habits, maybe something as simple as
Speaker 2: like putting the phone out of your room at night
Speaker 2: or something like that, if you're trying to watch less
Speaker 2: TV on your phone, like that's a habit thing, or
Speaker 2: laying out your clothes to run the night before, Like
Speaker 2: those are little things to make the good habits easier,
Speaker 2: make the bad habits, you know, less easy to succumb to.
Speaker 3: I totally agree. You want to minimize your ability to
Speaker 3: make financial, like long lasting financial mistakes.
Speaker 1: Specifically, MY big takeaway.
Speaker 3: Is going to come down to him sort of reflecting,
Speaker 3: like he was talking about how he's you know, he's like,
Speaker 3: I'm in my fifties now, and he's thinking back to
Speaker 3: what it is that is most important to him. And
Speaker 3: when it comes to your money, man, it is like
Speaker 3: there's a fine line to walk as you're trying to
Speaker 3: balance optimizing your dollars to you know, to reach your
Speaker 3: different financial goals with the things that make life worth living.
Speaker 3: Like it's just so hard, like and what he's talking
Speaker 3: about there are relationships, and so I think that's just
Speaker 3: so important for us. Even though this is how to
Speaker 3: money and we're talking about all the different things that
Speaker 3: you can do with your money in order to in
Speaker 3: order to grow your net worth, at the end of
Speaker 3: the day, oftentimes it does come down to things that
Speaker 3: we already have, the things that we overlook, the things
Speaker 3: that we take for granted. And man, because what you
Speaker 3: don't want is to be at a ripe old age
Speaker 3: and you're looking back on your life and to have
Speaker 3: a whole lot of not financial regrets or I guess
Speaker 3: they could be financial, the fact that you maybe work
Speaker 3: too much or save too much, or held on to
Speaker 3: money as opposed to deploying some of those funds to
Speaker 3: be able to add to memories, to allow those memories
Speaker 3: to blossom into kind of you know, the things that
Speaker 3: your kids and your friends of family that they talk about.
Speaker 2: Yeah, yeah, it's easy to go so hard notices to
Speaker 2: the grindstone that you miss out on the things that
Speaker 2: really matter along the way, and then you end up
Speaker 2: with a big nest egg and you're like, but I
Speaker 2: was like, way too focused on that. And that's why
Speaker 2: I think the craft beer equivalent really can be helpful
Speaker 2: to a lot of people. Like that is something we
Speaker 2: intentionally spend money on. What's that for you? Like, call
Speaker 2: that out in your life, write it down, talk about
Speaker 2: it with your partner, and think through those things. What
Speaker 2: is it we're intentionally spending money on in the here
Speaker 2: and now while we're trying to do the smart thing
Speaker 2: for our future. There's got to be the balance. There's
Speaker 2: got to be some of both, that's right. So, speaking
Speaker 2: of Kraft Beer, you want to introduce the beer that
Speaker 2: you know all right day. I found this one at
Speaker 2: the beer store. This is by Service Brewing. It's called
Speaker 2: Savannah Banana Beer, and the Savannah Bananas are like a
Speaker 2: minor league baseball team with all sorts of goofy antics
Speaker 2: in the what is that southeast corner of the state.
Speaker 2: And yeah, Matt, so this is an ale brewed with bananas.
Speaker 1: What were your thoughts on.
Speaker 3: It definitely had notes of banana. So well, I'm going
Speaker 3: to share a little peak behind the curtain as to
Speaker 3: what our life is like here in the office. You know,
Speaker 3: this beer tastes like it tastes like the water that
Speaker 3: we filter through our Brita filter in the summer. Because
Speaker 3: here is why everything on our fridge tastes like bananas.
Speaker 1: No, it's not because of this beer.
Speaker 3: It's because in the summer, every morning, you and I
Speaker 3: we both eat a banana as we're enjoying our coffee,
Speaker 3: which is.
Speaker 2: Pretty weird, I guess when you not really, I mean,
Speaker 2: who doesn't we like eat a bana at the same time.
Speaker 1: It's really it's odd, I guess.
Speaker 3: So yeah, it's kind of as we're kind of catching up,
Speaker 3: but with it being warmer, I don't know, the flies
Speaker 3: find the banana peels that we will throw in the trash,
Speaker 3: and then you get those fat, slow flying fruit flies whatever,
Speaker 3: and they.
Speaker 1: Just like take over the office.
Speaker 3: And so as the temperatures start to rise in the summer,
Speaker 3: we take our banana peels and we throw them in
Speaker 3: the freezer to kind of like walk away the smell.
Speaker 3: And then at the end of the week we dump
Speaker 3: it in the trash. That was your wife's ideah, throw
Speaker 3: it away, I guess it was. Yeah, But what that
Speaker 3: does is it makes our It makes our water tastes
Speaker 3: like banana, and that's what this beer tastes like. It
Speaker 3: tastes like a beer that has been stored in the
Speaker 3: same fridge as well, frozen bananas.
Speaker 2: You put bananas next to anything, and the taste of
Speaker 2: banana will get in used into whatever. That If you
Speaker 2: put your banana next to your bag of anything, like
Speaker 2: your bread, whatever, your bread's gonna start taste like banana.
Speaker 1: It's amazing. It just kind of like imfiltrates. Really, maybe
Speaker 1: that's what they did with this beer.
Speaker 3: All they had to do is just like it's just
Speaker 3: like a banana warehouse.
Speaker 1: Yeah, next to where they rot the beer. Maybe just
Speaker 1: by being in the general vicinity in the same building.
Speaker 3: It was hard for me to get past that the
Speaker 3: fact that, oh, this say, is just like the water
Speaker 3: that we poured from our britta filter.
Speaker 2: Well, it wasn't like heavy on bananas. It was pretty
Speaker 2: very very light banana, like a solid pill light on
Speaker 2: the banana. So yeah, very approachable and just kind of fun.
Speaker 2: Because even though I've not been to a Savannah Bananas game.
Speaker 1: It's yet. Yeah, we need to do it.
Speaker 3: It'll be it should be a lot of fun, like yeah,
Speaker 3: I mean they like dance the whole time. It's it's
Speaker 3: kind of ridiculous. I'm sure for folks who actually love
Speaker 3: to watch baseball, they're like, this is so annoying. But
Speaker 3: evidently it's a fun time for the whole family. But
Speaker 3: I will make sure to link to Brian's website where
Speaker 3: you can check out his new book, where you can
Speaker 3: check out him and Bow. They are the hosts of
Speaker 3: The Money Guys Show, and you can find all that
Speaker 3: up on the website at howtomoney dot com.
Speaker 2: No doubt, let's gonna do it for this one. Until
Speaker 2: next time, best Friends Out and best Friends Out.