All of Our Money Rules (And When to Break Them)

[00:01] exist for a reason. We want to give you financial guardrails to help you succeed. But what happens when life doesn't fit neatly into those because today we're going to cover all of our Money Guy rules, why they matter,

[00:16] and when it's okay to break them because as you guys know, personal finance is >> I'm Brian, he's Bo, and we're financial advisors here to help you build wealth and break the rules. And with that, let's jump right in.

[00:29] let's jump right in. >> [music] we're going to look at is one that I think a lot of people are familiar with, the Money Guy ecosystem. And it's our rule around buying a car, the 23/8

[00:47] car, whether it's new or used, we want you to put 20% down, we want you to not or 3 years, and we want your total payments to not exceed 8% of your

[00:59] monthly gross income. The reason we came up with this is way too many Americans are literally driving around in their wealth. Cars are the biggest wealth you to take into consideration that if you look at what the median income is,

[01:14] it's around $45,000 for individuals. >> sounds fine. That nothing crazy there. >> Okay, that sounds fine until you take into consideration that the average new car is now $50,000. There's a lot of people out there that are driving around

[01:28] year. >> And look, we know that a lot of "Only pay cash. Only pay cash. Only pay cash." And that sounds wonderful and it's great and we actually agree and subscribe to that idea

[01:41] your journey or you're just starting out or maybe you're in that messy middle, a lot of times paying cash is not an option and you have to have an to your JOB. >> So, let's talk about when do you break

[01:55] our rules, hm? When do you break 23/8? We just said it, Bo just and we we do echo this. If you if you're at the season of life that you can pay cash for a car, pay cash for the car. But if you need to get to your JOB to start the

[02:09] wealth building journey, we're A-okay [clears throat] as well with using 23/8. >> Another time when it might make sense to break 23/8 is if you decide you actually want to be more aggressive than 23/8. So, perhaps you want to put more down

[02:22] than 20%. So, that that way you can buy a more expensive car or get a nicer car. Maybe you don't want to finance it for the full 3 years or you don't want to use a full 8% of your monthly gross income. It's okay to break it if the

[02:35] up. >> But remember, this is not to buy luxury cars. This is really so that if you think about a family trying to extend it expensive minivan or something that's more functional, we still want you to

[02:49] understand that you don't use 23/8 for luxury cars and you got to make sure that your monthly investments still exceed that monthly car payment. This one also has to do with consumption, but this is a much bigger

[03:02] And we think that when it comes to buying your first home, we want you to buying your first home, we want you to follow 3/5/25 where you put down 3% as a down payment, you plan on being in the house for at least 5 years, and we want

[03:15] your total housing cost to not exceed 25% of your monthly gross income. even matter? Why are we focusing on this? The biggest financial decision that most people will make is their primary

[03:29] residency. You've got to make sure you understand the ins and outs so that you don't wrangle yourself where you're house rich, life poor, or you never future. >> the whole idea. The reason that we have

[03:42] this rule is so that you don't allow your financial life to get out of whack. We don't want you to have so much money going towards housing, so much money your head that it begins to either one, crowd out the other areas where your

[03:55] dollars should be going or even worse, an unknown unknown comes your way and >> So, let's talk about when do you actually break this? Is it Look, this one's this one's a little in that gray zone, but we're okay because we

[04:09] definitely personal. And I think a lot of you guys, especially with housing right now, we just came from a post-inflationary run-up of housing >> Very much. >> So, the affordability is a completely

[04:22] different equation now. So, a lot of you, maybe you're on the up and up with your income and you say, "Hey, this is where my income is, but I know in 2 years, 3 years from now my income will be here." And you're pretty assured cuz

[04:36] working the finance space, maybe you're, you know, an attorney or a doctor, we think it's okay to kind of spread that out and extend the budget a

[04:48] touch. Like cuz like I said, we're breaking rules here. If you know that not where you're at currently. >> the idea is if you go above 25% in the very near future, 1 2 3 4 years, it would be down below 25%. You need the

[05:03] income trajectory that. If you have an income trajectory that's just at the rate of inflation and it's not going to meaningfully move that needle on the 25%, then you might want to avoid it. Now, another time when you might want to

[05:15] category is if you live in a high cost of living area, it may literally be impossible to follow 3/5/25 if you're trying to borrow on one of the coasts or

[05:27] in a major metropolitan city. So, if you live in a high cost of living area, but there are other resources available to you like public transportation or things like that that cause the cost of living to come down, in those scenarios it

[05:40] the 25%. >> love is cuz we just gave you an the rule where you can maybe take this 25 up to 30% cuz you don't have the 8% of your income car payment, but realize even if you break this rule, you have to

[05:56] create margin because this doesn't take away from the fact that you've still got to save for the future. So, don't use this exception to the rule as a thing as just think that you're going to be you know, rosy days and rainbows and

[06:10] figure out how do you find margin in other areas of your life so that you can thinking about buying a home and you want to make sure you're doing it the numbers, we have a great tool for you. Go to moneyguy.com/resources

[06:25] and check out our home buying calculator. You can plug in your income, going to be, the interest rate you're assuming, the loan term, and it will tell you based on those factors how much home can you afford. This is a huge

[06:39] financial decision, so you want to make sure that you make it wisely. The next is a trap that a lot of young people fall into, is rule number three, which familiar with this, what we'd like you to do is when you're choosing how much

[06:54] student loan debt that you can take, go out there and check yourself by saying, "Hey, what's my first-year salary anticipated to be?" Don't let your >> All right, so why does this matter? Well, a lot of people are making one of

[07:09] their largest, most impactful financial decisions of their entire life when they are 18 years old. They are getting a lot of power to make a very big decision. They can have a huge impact later on in their life. As a

[07:23] matter of fact, right now, 44% of Gen Z'ers have an outstanding student loan balance. So, it's almost half of the Gen Z population has student half of the Gen Z population has student loans and 14% of all student loan

[07:37] borrowers owe more than $50,000. We just told you that the median single income in this country is about $45,000. 14% of borrowers owe more than that. And maybe even the most saddening statistic related to student loans, 24%

[07:54] or one in four adults that are responsible for the student loans either paying for their children, don't actually believe that they're ever going >> Well, I mean, it makes sense. If you actually go look at the research on how

[08:08] around, it's 20 years. >> Unbelievable. And these are decisions like I said that we we bring in this full circle, people made when they were 18 years of age. So, this is very scary stuff. It's okay to

[08:22] definitely be very strict and have guardrails, but all rules usually do about why it matters, but also when do you break this? >> Yeah, and if you are someone who's starting off, you understand that

[08:35] starting off with this huge amount of debt, it can derail the other areas of your financial life. It's hard enough coming into adulthood if you're starting field. It's hard. You're having to adjust to all the new intricacies of

[08:50] independence and being on your own. And if you combine with that the idea that you have this huge burden of debt that you're dragging behind you, it just >> Well, always when we I remember when we were coming up with this rule, I'm

[09:03] hoping that people will be a little more deliberate with what their major is and where they go to school so that they can actually not drag around this debt for 20 years. That's why I spend a lot of time in Millionaire Mission talking

[09:16] school. It matters what you major in because when we interviewed our clients, our millionaire clients, over 70% of our clients work in their field of study. >> Meanwhile, you can very compare and contrast that to the general population,

[09:30] 70% plus of the population don't even work in their field of study. So, we work in their field of study. So, we have a huge disconnect in education, but But now it's probably a good time to talk about when do you break this rule?

[09:44] >> Well, I think one of the times that you can break this is if you're someone who is pursuing a specialized degree and that specialized degree has a high likelihood, a high probability of producing outsized income. So, these are

[09:58] people like attorneys, uh doctors, medical professionals. If you're someone who's going to school for those, it might be necessary for you to rack up starting salary will be or what your

[10:11] understanding that the income is going to increase, that you will be able to future. Yeah, but I still I like that we put this little footnote on there is I still want you to keep an aim to keep the student loan as low as possible

[10:25] naturally going to have a much larger student loan debt because of how long you're in school. Let's not exasperate that problem by loading up on expensive about student loans. They'll let you pay for anything.

[10:39] >> I mean you can go buy a case of beer. How about student loan? You can go do fraternity dues. >> Do not fall into these traps, guys. Keep that student loan as low and small as possible. Your future self will thank

[10:53] our next rule. This is rule number four and this is one that we absolutely love and the rule is simply this. Always be buying. No matter what the market's doing, if the market's going up, you should be buying. If the market's going

[11:06] down, you should be buying. If the market is going sideways, you should be dollars to work. >> Well, I mean why why this matters to me is that I'm trying to create systems that take the emotion out of the

[11:19] process. A lot of people say, "What good is a financial advisor?" Well, big thing >> That's right. Because you got to have a system so that when the stock market gets beat up the two out of every 10 years, you're not looking for the exits.

[11:32] And then also, I want you to have the fortitude that when things are cheap and you get the best opportunities to buy when you can get the biggest discounts and the biggest growth factors, I want you to have a way to run in when

[11:45] everybody else is running out. And you know how you do that? Always be buying, where automatic for the people everything is happening every month, you emotions. >> So, if you're supposed to always be

[12:00] buying, well, when does it make sense to break this rule? Well, it's okay to stage of your financial journey yet. Brian, will you hold the thing up for you? We have a nine-step process that will tell you what to do with your next

[12:13] dollar. So, if you're someone who has not got your deductibles covered, you're not getting your full employer match, you have high interest debt, you've not built your emergency fund, you might not be at the place where your dollars

[12:26] those other parts of the financial order of operations. But once you get through of operations. But once you get through step four, then we want you to always be buying. Well, and also, when you retire. I mean this is the thing is that well

[12:39] you do get to a point where so good what's weird is we live in a consumption are actually really good at consuming and using their assets, but a lot of you financial mutants, we're great at saving and investing. I want you to know it's

[12:54] A-okay to when you get to that point, celebrate that you now have reached the celebrate that you now have reached the the threshold to where it's okay to use because you did all the hard work in the years earlier.

[13:06] >> All right, Brian. Let's talk about our next rule. This is rule number five. And encompasses a number of different things. These are our high interest guidelines. We get asked all the time, Brian, "All right, I love the financial

[13:20] they're sort of like these two different categories. There's step three, which is then there's step nine, which says pay off all the low interest debt. Well, how do I decide what's low interest and what's high interest? And why should I

[13:36] attack the high interest first?" Yeah, we we look, we tried to put some math to again in Millionaire Mission on risk-free rates of return and you know and then getting >> taking getting a return for the risk

[13:49] that you're taking. But at the end of the day, we still want you to pay off these debts. We want you to own your life. So, that's why student loans we do we base it down by age. We want you obviously when you're in your 20s, you

[14:02] can take more risk. We're okay that you might have a 6% student loan that you're your Roth IRA and other things. Car loans, to a lot of you, you have to get to your JOB to start building wealth. Of course, we want you to be paying cash.

[14:16] rule or when to break it, but it's understandable in the beginning you might have to take for a very short period of time an interest rate higher to your job. And then credit cards, a lot of people are shocked cuz we just

[14:31] have zeros all the way down. We'll talk about that in a minute cuz I think a lot of financial mutants are looking at this. They're falling into the dope trap out for them. So, why does this matter? Why does discerning what counts as high

[14:46] Because we want you to be able to strike that balance and recognize that there is deploy your dollars. We're not really doing two things. We want you to pay off

[14:59] liabilities knocked down, but we also want you to be building up the asset what counts as high interest and what counts as low interest allows you to discern how much to be going to each one of those buckets. So, when can we break

[15:15] this? As we already kind of shared with you, car loans, look, 23.8, but they we rate in there. >> 10% is a high car loan. I don't want to like act like it's not, but if you have a 10% auto loan and it fits inside of

[15:32] 23.8, we would argue that's okay. That's acceptable for someone in their 20s. Continue paying that on the 23.8 and use your resources to do something else quickly. And I I know we didn't put it in here, but I did think it was worth at

[15:47] least highlighting is that 0% interest rates. I know all my financial mutants something. It really is a rope-a-dope is that they're trying to get you the that first shot very low interest rate so you'll fall into their trap. Don't do

[16:03] kind of goes counterintuitive this when to break the rules, but I'm just telling there for you. >> All right, Brian. Rule number six. This want you if you're following the financial order of operations. Brian,

[16:18] you're following the financial order, by the time that you get to step number four, we want you to have a fully funded emergency reserve. And we consider a fully funded emergency reserve likely somewhere between three months of living

[16:31] expenses or six months of living expenses. And there are a number of one makes the most sense. >> Yeah, and I love that we've got it right know, you can compare and contrast these. Obviously, if you have a a good

[16:45] job with high job security or you could go get another job really quickly, that month. Whereas if you got low job security or you have to move across the country, you want to have a little more buffer. If you got multiple people

[16:57] to push you higher on the buffer. But if you and you have another spouse in the amount of money, that's lower. So, you can go through this list. You can figure months? But you're still probably trying to figure out why does this matter? And

[17:12] then Bo kind of alluded to this. This is what's going to keep you that margin of protection that's going to keep you from making the desperate decisions that like you go run up credit card debt, use payday loans, all the horrible stuff

[17:26] when you hit an emergency and you don't have the money in the bank. None of the options are good, so that's why we have emergency reserves to keep you safe from >> So, now we're trying to think through, okay, well, when does it make sense to

[17:38] okay, well, if you have high interest debt. Well, if you have high interest debt, you're in step three, you haven't made it to step four. So, by paying off breaking the rule. So, what is an example? We really need to think through

[17:51] the three to six month emergency fund rule. rule. We said if you're someone who has almost you're not quite there yet. And maybe

[18:03] we're getting towards March, towards April, and you haven't maxed out last year's Roth IRA contribution. It's okay in our mind if you take some of that >> for a moment for a moment and use that

[18:16] to retroactively fill up how much you have left in that Roth IRA bucket so dollars in cuz if you miss the Roth window, you don't get to go back in time and make those contributions in the future. So, but get in there. Use that I

[18:30] want you to be scared if you do this so that you're not letting this break glass moment last for that long. The other one is is that obviously when you reach folds to it is in the fact that you might be a person that when you get to

[18:45] operations, you want to expand cash so that you can play mini Warren Buffett like the next time we have a market downturn. The other side of this is retirement. I want when you reach to retirement now you're going to be living

[18:59] working. This is a point where you actually your cash reserves is going to go bigger. Is instead of it being three to six months, instead of it being three to six months, it might be 12 to 18 months. So, you can

[19:11] on when to break this rule. >> All right, Brian. Our next rule, rule number seven, has to do when you have a large windfall come your way. Maybe you received a pension payout. Maybe you sold capital asset. Maybe you received

[19:25] an inheritance. Whatever that thing may be, one of the questions we often get deploying these dollars? What should I do? Should I invest them all at once or that's why we came up with the Goldilocks rule. And basically we said

[19:41] you should determine at what pace to invest those dollars based on how big those dollars are relative to your total portfolio. So, if this windfall, this lump sum that's come your way, is less than 10% of your total portfolio, maybe

[19:55] you consider just investing it all at once as a lump sum. But, if this lump sum represents over half of your liquid portfolio, and it's a really big chunk, then maybe you want to dollar cost average, investing the same amount of

[20:08] money on a monthly schedule over the course of a full year, over the course volatility. >> I'm always amazed cuz there's a big part of the financial community is is that this is a debate between lump sum and

[20:21] dollar cost averaging. This is not a debate whatsoever is because I mean, statistically lump sum is superior. But, because personal finance is personal, it's exactly what you just covered both. Some of the times these

[20:34] windfalls are such large sums of money, there's a lot of emotional baggage, as well as financial risk. Cuz what happens that you come into the windfall of your lifetime, and then you invest into the 2008 market, and you watch 30 to 50% of

[20:50] your assets evaporate within a 6-month period. You would be just destroyed. So, that's why we are like, okay, yes, statistically it's better to lump sum, but sometimes decisions are so big, we have to come up

[21:04] with a way that we can make it systematic to protect us from the 2008 type things, but also, if we're very emotional people, and we find ourselves figure out the right time to get in, or the you know, cuz we're just so worried

[21:18] what will work you through the emotional side of that? A good system. So, our our you're not sitting on the sidelines too long, but also protect you from something really bad that could happen and derail your entire financial life.

[21:33] >> All right, so when should you break the Goldilocks rule? When is a time when maybe you don't follow these guidelines? Well, you have to know yourself, and you have to understand what is true about you, cuz it may be okay to break this

[21:45] rule if you know that no matter what, you're a financial decision maker. Maybe this lump sum, this windfall you came in that came in, is less than 10% of your portfolio, but maybe it's still a big chunk of money. If you have a $2 million

[21:58] portfolio, and you have $200,000 come as the Goldilocks rule would say, go ahead and invest that right now, lump sum all if I invest that, and over the course of the next few months, the market loses 5,

[22:12] the next few months, the market loses 5, 10, 15, 20%, I'm going to kick myself, and I'm going to have some angst, that's okay. Dollar cost average it. Allow yourself to remove the emotion from it. Know what kind of investor you are, and

[22:28] you should implement the plan and the strategy that gives you the highest probability of staying the course. >> And then this next exception is really couldn't help it. I was like, maybe this is too in the weeds, but I was like, you

[22:40] guys are going to love this. I will I have found when the stock market and the status, meaning they are down greater than 20%, these these investments, and you have to go, holy cow, maybe this opportunity is

[22:56] good. So, then I want you to understand, every time the market goes down below 20%, and then every 5% down increment on top of that, you might want to accelerate another month in your dollar cost averaging plan to take advantage of

[23:09] know, cuz I know you're sitting there thinking, well, Brian, this is exactly, but think about if you were in 2008, and the market lost 20 to 30% over that 3-month period, if you had a big lump sum, and you know that historically

[23:23] every time it went down 20%, and then went down every other 5% increment, if you lump summed in on those increments, you would be sitting pretty when you came out on the recovery. Cuz we all know the rubber band effect is that the

[23:36] the sharpness of the decline typically is also the sharpness of the recovery, that. >> But, remember, this is for lump sums.

[23:48] come in your way, because we have another rule as it relates to your paycheck, and the money that you have coming in on a systematic and consistent basis. And that rule is, we want you investing 25% of your gross income for

[24:02] retirement. These are dollars that are going into employer-sponsored plans, like 401(k)s, 403(b)s, that are going into IRAs, both Roth and traditional, going into HSAs. This is money going into an uh pension, or an ESOP, or

[24:17] this is even just money that's going into a taxable brokerage account. Now, it's supposed to be clear, these are for dollars that are for future financial independence. These are not dollars for the sinking fund for the car purchase,

[24:30] vacation. This is 25% going into future financial independence savings. Yeah, I know I think a lot of people don't realize, if you make under, in in the fine print, $100,000 for single individuals, $200,000 for for

[24:45] employer money. So, cuz we take a lot of flak for this number, because I think a lot of people out there, and there's other financial people who are saying, 10%, 15% is all you need to save. And I have to remind

[24:58] people, look, a lot of these systems were designed back in the '90s when we had pensions, when we had, you know, more comfort that the social safety net of the government was going to be there for us. But, then we we now know that

[25:10] shoulders, on our we have to take responsibility for ourselves. And then you couple that with we look at the statistical research and shows that most people don't even start investing until they're in their early 30s. So, you

[25:23] couple those two things together, you're like, whoa, we need to get serious about honest with people. Let's not give them some false hope. Now, look, if you're watching this and you're 23 years old, yeah, maybe that number is going to be

[25:36] everybody else, and you didn't start saving invest until you're 30, you need to lean into and understand that 25% is going to help you through this. start until they're 30, and we also know that for most people, life happens, and

[25:51] our savings rate when we start likely doesn't stay that way forever. There are unknown unknowns, and life changes. If you're investing 25% for retirement, starting at age 30, doing that, you would still have the

[26:04] ability to replace almost 120% of your pre-retirement income if you retire at conservative 6% rate of return. But, realistically, comes along. Kids come along. House comes along. Other things happen that

[26:20] likely might take you off. So, the earlier and sooner you can start saving 25%, the more of a head start you'll give yourself to figure out if there's >> So, let's talk about when do you break this? And I've already we've already

[26:33] encourage you go to moneyguy.com/resources, how much should you be saving? If you're somebody who's who's watching this content, and you're under 30 years of age, there's a good chance you're ahead

[26:45] savings rate accordingly. >> Or maybe you're someone who just has a unique season of life. Oh man, I just had kids, or I just moved, or I just changed jobs, or I just Those things happen, and your savings rate might have

[26:58] to take a hit because of that. That's okay. Let it happen, pull back, shore yourself up, and then get back to saving 25% as quickly as you can, and your one, look, and this is one that I've already alluded to a lot of this when we

[27:14] were talking about high interest debt, and and what is that by age? It's credit And y'all know this saying. I I I say it all the time is that credit card use, that's A-OK, but credit card debt, no way are we going to let you pay those

[27:29] charging. >> Yeah, that's why it matters. If you look at the average annual rate on a credit card, it is not favorable. It is literally compound interest working against you. So, that is the stick. But,

[27:43] there's also a carrot to using credit cards. There are financial benefits, including rewards, security, credit building, purchase protection. There are a number of different reasons why a credit card can be useful

[27:58] if you're using it right, but be chainsaw dangerous if you're using it >> So, when do you break it? Look, if you're like the 50-plus percent of Americans that are carrying a balance on your credit card, you're not a credit

[28:10] card person. So, you don't use this. You fall more in the camp of some of the the people who have to run a strict line, and not even use credit cards. They use debit cards and other things. It's okay, just know thyself. If you're not paying

[28:22] ahead. >> And look, don't don't assume that 0% offers are some amazing thing that they're not. They are not a reason to break this. They're not a reason to carry a credit card balance. If you're

[28:36] not paying your balance off in full every single month, no matter what the wrong. >> I I'll echo what I said earlier. Don't fall into the dope trap. That can be That can mean multiple things. It can

[28:48] what the banks are trying to do by giving you this 0% so you can fall in this trap. Or it could be about And I'm going to say it, it's just as dangerous as bad drugs. If you think about the drug dealers give you that first hit for

[29:01] addicted to be just like all the other consumption people of society. Don't >> All right, Brian, let's talk about our next rule. And this one centers around, how do I decide when it comes to 401(k) retirement plan contributions, how do I

[29:16] decide between doing pre-tax or Roth? And we have a little test you can do. If you take your marginal federal tax rate and your marginal state tax rate, and that the combination of those two is below 25%, you may want to prioritize

[29:32] Roth contributions. If, however, you find that your combined marginal rate is greater than 30%, you may want to focus on pre-tax contributions, cuz every dollar that you put in the pre-tax bucket can save you like 30 cents in

[29:45] taxes. It's a huge imputed rate of return at those tax rates. And if you're between 25% and you want to factor in other things like your unique age, your account structure. >> I mean a lot look, I come from a public

[30:00] accounting background. I've practically turned Bo into a CPA with how much of harped on taxes. Taxes are a big part of what's going to impact your financial life. So we we're always trying to find that tax arbitrage

[30:14] moment is how do we pay the least amount of taxes but leave the most amount of your army of dollar bills working. And you've got to be proactive with looking That's why when you're young, yeah, we

[30:26] probably not in your peak earning years. But you're crazy if you don't while you're paying close to 50%. Think about that. If you got 37% federal taxes and then you got state income taxes, you know, 6% depending on which state you

[30:40] live in, you can quickly see that close to half of your money is going to taxes. or FIAN movement and you think you're going to be leaving the workforce before you're 75, there might be a moment in time you can from an arbitrage

[30:54] standpoint pay a lower tax rate to convert some of these money into Roth. We want to take advantage of those low tax rates. But ultimately, it's so you dollar bills. >> Yeah, and we don't know what future tax

[31:09] policy is going to hold. So if you can have some tax diversification, no matter what future tax policy holds, you can remain in control. Literally, you can get to financial independence and you can pick and choose what tax rates you

[31:22] pulling out of. >> Now, and when to break it. Bo just came he get he's like, "Brian, I've been thinking about it. Yes, you're in the highest tax rate, but you're also getting into the age and you have a

[31:36] disabled daughter that will be able to use this money and actually stretch that money beyond. You ought to consider maybe using Roth in your retirement for the tax savings. That's okay cuz I'm

[31:49] will reach that point. This is when it's okay to break the rules." next rule. This is one again, if you listen to our show for any amount of time, you hear us say this all the time. We want you to follow the financial

[32:02] thing up. The financial order of operations is a nine-step process to help you know exactly what you should be doing with your next dollar. So here's the thing and I love this because we have come up with the financial order of

[32:17] >> That's right. >> know what happens if you get the FUO out of order? Oof. Oof. Did you hear that? >> Oof. That is the best dead joke I've heard all week and I would encourage you

[32:32] cuz look, we don't want you trying to do the financial order out of order, doing missteps because that is going to work against simplifying, making your money work harder than you can. So don't fall into the oof. Reaching financial goals

[32:48] is difficult enough on its own. But if you're all scattered in your goals, it's and move in the right direction. So what the financial order of operations allows you to do is it allows you to compartmentalize what the next goal is.

[33:01] high-interest debt knocked out. Okay, great, did it. Now I want to get my max out my Roth. Great. Max out my It gives you these small, tangible, attainable goals that will not only help you stay optimized but will serve as a

[33:16] mechanism to make sure that you stay on track. Yeah, and then if you're trying break it, personal finance is personal. And I've being honest, I've always tried to have a no hypocrite policy. There

[33:28] were moments when I was thinking about going into the entrepreneur life and I for the first two to three years I was doing the business. I wasn't moving on to step five like the financial order of operations would told me because my life

[33:41] needed me to have a boosted up step four. So it's okay if you look at your personal life and you know in this season, I've got to do things a little differently. I've also seen people who said, "You know what? I've got a growing

[33:53] family. I'm in the messy middle. For the next few months, I'm going to come up with that 3% down payment." That's outside of the financial order of operations, but we understand that personal finance is personal and we want

[34:05] you to live your best best life. But also, you need to feel like there is a buzzer and a ticking clock in the background that if you don't get back to the FUO, that your money will start working against you. It's okay to kind

[34:17] of come off the path for a moment in time, but just don't find yourself taking a nap and letting the FUO not work for you in the long term. All right, Brian, let's move on to rule number 12. And this is one we get asked

[34:29] know when it's the right time to consider taking the relationship to the advisor? We think there's really three points in time where people either hit one of these points or maybe some combination of these. And it's one, when

[34:42] your life circumstances gotten so complex you don't know what you don't Two, your time has got so limited that you recognize a lot of the important financial aspects of your life keep falling on the back burner. Or three,

[34:56] great that you don't feel comfortable navigating alone. It's when the $10 decisions start turning into $100,000 decisions. If you find yourself in one of those three areas or some combination of those, that might be an indication

[35:11] >> Well, and why this matters is I think a lot of people have the wrong idea. They think we don't like do-it-yourselfers. Are you kidding me? We have hearts of educators. We are literally on the front lines of making sure you know exactly

[35:23] understand that if we load you up, going to be rewarded. You don't need a financial advisor when you're starting out. But as complexity starts showing up, you're going to potentially need

[35:37] you don't make big mistakes. show. I've got the financial order of I'm just going to I'll wait till the day advisor. I'll just wait and I'll wait and I'll wait." A lot of folks don't

[35:51] planning that you can do early on. Yes, even in your 30s, even in your 40s, where if you make some small decisions, just a small one, two, three degree changes in your financial trajectory can have a huge impact later on in your

[36:06] actually benefit from hiring an advisor something like a really high income or a complex income structure, or they have financial life that a financial advisor might be able to speak directly to.

[36:20] >> So when to break this rule? Look, I I'm okay that some of you will never graduate beyond do-it-yourselfers. One of my heroes is Clark Howard and I'll never forget that one of my buddies who introduced us was his his accountant at

[36:35] talked about how Clark wanted to know how everything worked. And Clark would never ever probably be a financial planning client because he's just going to be one of those guys. But he's also not going to become the biggest troll of

[36:48] understands is that yes, there are going to be people who forever will be do-it-yourselfers and that's A-okay. But there will be a moment in time that for a lot of you, you're going to recognize the complexity is going to get to a

[37:01] don't know or you're worried about if you leave this earth tomorrow, what's going to happen to your loved one and who actually thinks about things the way you do as a financial mutant who can do this on your own. And that's when we're

[37:14] and you can consider going to moneyguy.com, look at the become a client section, and we we help you answer the questions and we help you live your best financial life. I'm your host Brian joined by Mr. Bo. Money Guy

[37:27] host Brian joined by Mr. Bo. Money Guy team out.