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