When Saving More Money Might Actually Hurt You

本站添加: 2026-05-30

[00:00:00]Saving money is a vital part of building wealth, but there are certain circumstances where saving more could actually be hurting you.

[00:00:07]>> Brent, I am so excited because today we're covering five situations where saving money could have real negative effects on your finances and potentially on your life. And we're going to show you how to avoid making these five mistakes.

[00:00:23]>> So, I'm Brian. He's Bo. And we're financial advisors showing you how to save today for your great big beautiful tomorrow. And with that, let's dive right in.

[00:00:37]>> Brian, saving is obviously a good thing.

[00:00:39]We talk about it all the time. We talk about how powerful it can be and how if you do it well, it can change your life.

[00:00:47]But in certain circumstances, there could be too much of a good thing.

[00:00:52]>> Yeah. Look, we're not trying to create some rage bait or clickbait type thing.

[00:00:57]This really is we wanted to highlight where a good behavior like saving can get you in trouble if you're not careful. Would that Bo give us number one?

[00:01:06]>> Yeah. Number one mistake we see is when you are holding too much cash and we say holding too much cash we actually mean instead of investing and actually putting those dollars to work for you.

[00:01:17]>> Yeah. And by the way if you think well nobody does that. No let me tell you this is a big problem. You know one of the big custodians out there Vanguard actually shared this this data point.

[00:01:26]We've we've done content on this in the past. Close to 30% of IRA rollovers are actually just sitting in cash 7 years later. Guys, 7 years is long-term investing. So that is the opportunity cost on that is huge.

[00:01:41]>> And look, this was a specific study done in 2015 from 2015 to 2022. But it doesn't stop there. Vanguard also found that 55% of direct contributions into employer sponsored retirement plans actually stay in cash for 12 months rather than going to be invested going to buy mutual funds, indexes, ETFs. It actually just sits in the plan in cash once it comes out of your paycheck.

[00:02:07]>> So, and by the way, we have a lot of our comments section and you guys, you're you're such financial mutants people cuz we use the word saving sometimes when we're talking about investing. Yep. And that's why I love that this is the kind of the perfect arena where we get to share. You're right guys, you financial mutants who are highlighting this fact is that yes, there is a difference between just saving versus investing.

[00:02:28]And the reason we want you to go beyond just saving is that inflation can completely gut your money in the long term.

[00:02:35]>> That's right. We have this general concept, this understanding that a dollar today will be less than a dollar tomorrow. And the reason is is because of inflation. Inflation is just the general increase in the prices of the goods and services that we buy over time, thus reducing the purchasing power of our money. And it's amazing if you stretch it out not just over a year or two years or three years, but you stretch it out over decades, that eroding power is very, very strong. We want to give you some numbers to kind of put some perspective on this because a $100 in cash today, fast forward 10 years, now it's only worth $74. Fast forward 20 years, it's only worth $55.

[00:03:20]The purchasing power is getting diminished. And in 30 years, now it's worth $41. But it's worse than that, Bo.

[00:03:26]It's not just what the purchasing power, it's also the opportunity cost of what you're tableabling by not getting the compounding growth.

[00:03:35]>> Yeah. you miss out on that compound growth. There's an error of commission.

[00:03:39]What you are doing, you're putting it in savings, but there's also an error of omission. You're not allowing your dollars to work for you. If you've been watching or listening to our content for any period of time, you know that we talk about the wealth multiplier. And it's this idea that when invested, when properly put to work, $1 for a 20-year-old has the opportunity, has a chance to turn into $88 by the time that person retires. That only works that only happens if you put the money to work. If you do not invest it, you're not going to recognize that 88 time multiplier.

[00:04:14]>> I always feel like it's a PSA whenever we show the wealth multiplier. All my 20 and 30somes who are watching this content, just do something. Look at this chart we have right here. Better than that, go to moneyguy.com/resources.

[00:04:26]You can look at your specific age. See what your wealth multiplier is. You might not have a lot of resources, but you literally are a billionaire of time.

[00:04:35]Leverage that powerful tool and you will be better for it. Now, Bo, I think this also is a good time for us to give a case study on what the typical American is doing and seeing how just putting the money in a bank, earning absolutely nothing versus somebody who's proactive and actually puts their army of dollars to work. Compare and contrast.

[00:04:55]>> Yeah. Now, if we think about average Allen, let's say that average Allen starts with $0, but he's going to put $10,000 into a savings account and he's going to earn the average rate of interest that the average savings account at a bank is paying right now, which is 0.38% per year. You heard that right. It's less than half a percent. If Allan were to leave that $10,000 in that savings account for 10 years, he's going to end up with $10,387.

[00:05:24]Bo, I know a lot of you are going be like, "Wait a minute, you guys only paid him 38%." How many people come through the doors as prospects and so forth that their checking accounts that are loaded up beyond what they need to be as just having as liquid cash for a clearing account are actually earning 0%.

[00:05:41]>> That's right. All the time.

[00:05:42]>> So, we're actually being generous when we say 38%. Because most of your brick and mortars are paying you absolutely nothing on your checking accounts. So, this is why you have to be proactive with your money. Don't let life just happen in your financial decision-making. I want you to be more like Manny the mutant.

[00:06:00]>> Yeah. When we think about Manny, let's say that Manny also starts with $0. But instead of putting $10,000 just in the savings account, Manny's going to invest those dollars. He's going to put the$10,000 into an index fund. And let's assume that over the next decade, Manny can average an 8% rate of return on those dollars. Well, that $10,000 that he deposited would now be worth $22,196.

[00:06:26]That's $113% more than what Allen had.

[00:06:32]>> That's why I think a lot of people when we're trying to train you to become a financial mutant, it's those incremental small decisions that you're making. The dollar amounts are not changing. It's your behavior. It's your actions. Little tiny actions can create big results. In this case, actually putting that extra cash to work is 113% improvement. And by the way, over time, that compounds even bigger. So, what do you do instead of just stocking it in savings? Well, you got to put your army of dollars to work. You have to recognize that I need my money, my dollars, working harder than I can. And if I put them in the savings account, they're not doing that. So, I want to make sure that I get them invested.

[00:07:12]>> Yeah. And I want you look, we talk about the 3 to 6 months emergency reserves, but actually do the exercise of seeing what you need in emergency reserves because we just showed you if you're boosting your sinking funds or your emergency funds bigger than they need to be, you're sitting on dollars that could be in your army of dollar bills that are working for the future. And then the second part of this was kind of back to that Vanguard study. Don't forget that it's a two-part transaction.

[00:07:38]Just because you saved the money, you now need to select the investments so that your money can actually work hard for you.

[00:07:45]>> And we actually have Brian, we hold the thing up for we actually have a financial order of operations to tell you what you should do and where you should put your next dollar. So start with the tax advantage accounts where you can get the most bang for your buck.

[00:07:57]We're talking about Roth IAS, HSAs, 401ks.

[00:08:02]Make sure those dollars are finding themselves in the right homes. I think a lot of people also, you're brand new.

[00:08:08]You you found our content. You you you're you have a big motivation to start letting your money work, but you just don't come from a household where you knew anything about money. You don't know where to go invest. That's a okay, you know, and it's easy. We often are saying just go get into into an index fund. And a lot of you are like, "Okay, an index fund that sounds great." And yes, usually we're talking about like a total market index or an S&P 500, but even that can sound daunting to a lot of people. Guys, you don't have to sleep on even index target retirement funds from the big providers like Charles Schwab, Fidelity Investments, Vanguard. Go out there and you can log in if you can answer how much you can save and when you need it. They have a product that leverages not only index funds but also diversification. Get out there and do that. And then in the background, you can be educating yourself and get even better with your investment knowledge.

[00:08:58]But in the meantime, you're not squandering that powerful component of compounding growth because you have time on your side.

[00:09:04]>> All right, Brian, we're talking about when saving can actually hurt you, when it can be detrimental. And mistake number two that we often see, and I think this is because again, people are approaching this from a noble place. We actually see people making mistake when they begin saving and investing while they still have highinterest debt on their balance sheet.

[00:09:23]>> Well, I I see people and like you you said the word noble. Look, you guys realize we all sometimes carry sins of the past. And you know, for a lot of people, it starts in college or right after you get out of high school. You get your first credit card and because you you lack some discipline initially, you run up a little credit card debt, but then maybe you come across our content, you go, "Oh my gosh, these guys are talking talking about the power of compounding growth. I got to get in there and get that." But the problem is if you don't do it in the right order of operation, you're actually still turning compounding interest against you and only making the bank rich. If you're not paying off that high interest, it's back to why the financial order of operations is your friend. And what do I mean by this? Let me give you the proof.

[00:10:09]>> The average interest rate on credit cards right now is 23.75%.

[00:10:14]>> That's insane. If you don't pay off that in step three of the financial order of operations, you'll never be able to leverage and maximize the power of compounding growth. And what you don't recognize is how widespread this is.

[00:10:27]According to the Federal Reserve, 45% one in two US adults actually carried a credit card balance at least one time in the past year. And I don't mean like they used a credit card and paid it off.

[00:10:38]They like carried a balance month over month and they were subjected to that on average 23.75%.

[00:10:47]So it's pretty obvious like why is this bad and why can't it hurt you? Well, it's not mathematically optimal. If I'm paying an exorbitant amount of interest but I'm investing and earning a lower rate of return, that is a reverse negative bad arbitrage situation.

[00:11:04]>> I want people to visualize this.

[00:11:05]Literally, you're strapping this weight to you and then walking into the ocean.

[00:11:11]And I don't care how good of a swimmer you are. If you're if you were walking into the ocean with weights like credit card debt, you will drown. You will never get ahead. So that's why we have to get you to pay off the high interest debt because it's going to slow down your progress. It's going to drown you.

[00:11:28]You've got to get out from underneath this. And then once again, we have a case study because what I what drives me crazy is people lose their perspective.

[00:11:35]They lose their focus. And like I said, they find our content. They'll say, "Well, you know what? I'll throw a few hundred bucks towards the credit cards.

[00:11:41]I'll throw a few hundred bucks towards my Roth IRA. That's how I'm going to get out of this." That is that is foolish.

[00:11:48]That's not using food. That is being foolish and still letting compounding interest work against you.

[00:11:53]>> And if don't just take our word for it, let's show you the actual numbers again.

[00:11:56]Let's take two investors. Let's take Average Allen and Manny the Mutant and their goal is to have a $20,000 emergency fund built up, but they're both going to be starting with debt.

[00:12:08]They both have $10,000 of let's assume it's credit card debt. And let's assume that they both have that credit card debt at a 24% interest rate. We're going to assume that average Allen and Manny both are going to put their money into a high yield savings account that can earn 4%. So, they have debt that's costing them 24 in a savings account that makes them 4%. They both have the same amount of margin. They have $500 a month with which they can pursue their goal. So, average Allen says, "You know what? I'm going to split it nice and easy. I'm going to put $250 per month towards my emergency fund and I'm going to put $250 a month towards my credit card debt."

[00:12:47]Well, what we find is that after five years or 60 months, average Allen has been able to build up his emergency fund. Remember the goal was $20,000. He has about $16,500, but he's still carrying a $4,300 credit card balance. So if you net those two out, his net position is about $12,250.

[00:13:08]That's where Allen sits. Manny, on the other hand, says, "You know what? I understand the financial order of operations. I understand that if I have high interest debt, I should extinguish that first. So, what I'm going to do is I'm going to pay $500 a month every single month on my credit card until I wipe that out. So, I will not have anything going towards my emergency fund. But once I get my debt completely knocked out, then I'm going to start saving $500 a month into my emergency fund. Well, now after five years, Manny actually has a savings accounts balance just over $18,000. Has no more credit card debt. So, he is almost $6,000 better off than Allan was, even though they spent and deployed the exact same amount of dollars.

[00:13:55]>> I think it's worth repeating and drawing attention to the fact that yes, you have close to $6,000 more, but you're also close to 50% better >> with the same pot of money.

[00:14:05]>> That's right.

[00:14:06]>> That's why it's all back to the incremental decision making. What small decisions are you making and stacking on a daily basis to live your best life?

[00:14:14]And that's where you will one day wake up all of you people in your 20s and 30s and if you're making the right decisions and even though you're going to have regrets or you're going to say am I doing this the right way you're bit get to be my age and you're going to look around and be like why do none of my peers have money and it's all these things that we're covering right now. So I'm telling you please listen to us make these decisions in your 20s and 30s so that you can wake up and be on the good side of decision- making versus having regrets in the future. So, what do you do instead? We want you to pay off that high interest debt before you start investing with the exception of your employer match. Your employer match, if you're getting a 50% or 100% match or return on those dollars, is greater than what you're paying on that high interest debt. So, we want you to get that. But once you get that, then we want you to attack that highinterest debt aggressively and get it off of your balance sheet.

[00:15:08]>> Now, a lot of you are saying, "What is high interest debt?" You'all know we we bring up the slide that draws a little controversy because that car loan column, but I don't mind saying we want you paying cash for cars, but we all know I've been broke as a joke. Getting out of college more, you know, aspirational with a good job versus having any money and I needed a, you know, the reliable transportation to get there. That's why we've created rules that yes, have some higher interest rates on there, but we want you focusing on the things that will get you out of debt. So, we put these thresholds in there on student loans, on car loans, and credit cards. And a lot of you are looking at those credit cards and go, "Wait a minute. I'm a financial mutant.

[00:15:48]Shouldn't I be leveraging that 0% interest rate offers at all the credit cards?" Guys, those are gateway opportunities. The credit card is hoping you walk through those thresholds, fall on your face, and then you end up like the rest of America where you're in credit card debt. Don't be like everybody else. Stay away even from the gateway credit cards with the 0%. That's not what Financial Mutants do.

[00:16:13]>> So if you don't know what to do, follow the food. Brian, hold the thing up for me. It's why we put this together. If you don't know what to do with your next dollar, you don't know how to appropriately attack your financial situation, go to moneyguide.com/resources, download our free deliverable, and you can truly know exactly what to do with your next dollar. If you're paying kind of paying off the high interest, but kind of doing a Roth and kind of have some money going into 529, that's not following the foo. That is foolish, which is foolish.

[00:16:49]Follow the foo and let it be your guide.

[00:16:51]>> You almost got it.

[00:16:52]>> I did it.

[00:16:53]>> You said it. It just It was a little a little >> I put the emphasis where I wanted it.

[00:16:58]No, that's a that was that was by design.

[00:17:01]>> Fuish.

[00:17:03]>> Moving on to number three.

[00:17:04]>> Mistake number three. And this is again we're talking about mistakes that can come from saving too much. And we see this oftent times of financial mutants.

[00:17:13]This is when you save, but the saving cause you delay some very important life milestones.

[00:17:19]>> This is where I've probably have turned into the old man, the sentimental old man on the front porch is because we do so many studio tours or we come across people in our lives and we'll say, "Hey, have y'all start, you know, where are you at?" and you know with your journey like well we want to have a family but >> we're waiting until we can do this like get this promotion or afford this or even and some people it's been like a step in the financial order of operations and the version of myself now is like oo because look I think you're going to be shocked I don't want you to miss out on the experiences of life if you want a family have a family don't wait until you have everything tied down because, you know, I have two daughters, but I'm at the age now where my oldest has graduated college, my youngest is, you know, we're we're working through things with her. I wish we'd had another.

[00:18:10]>> And I think that sometimes I was so organized with my finances that, you know, it's one of those things where I might have had the priorities in the wrong place. I also think about people, you get to be my age and you start noticing that some of your key loved ones, they're just not here anymore. And you're like, man, maybe I should have gone on more vacations. Maybe I should have traveled to go visit this person more. But sometimes we as financial mutants, we don't do these things because we think, hey, I'll save that money. You've got to be careful that there's a huge difference between the financial mutant versus making miser type decisions.

[00:18:42]>> You know, Brian, my oldest daughter's she's about to be 11 years old and my wife and I have be begun having this conversation that man that 11 years old that means, you know, Lord willing, she's going to be seven more summers, seven more Christmases, seven more Easter. We're like, holy cow, we cannot waste this time. Surely could we could we save more money? Could we invest more? Could we do another? Sure. We don't want to let even the future financial goals that we have of financial independence and all those things derail us from the present experiences that we cannot get back once the kids are grown. Once the kids are out of the house, you don't get to go back and let them be little kids again.

[00:19:20]So, if you're someone in the messy middle and you're just trying to do the best that you can, like, okay, well, I'll think about that in the future, in the future, in the future. I would encourage you to slow down and pause.

[00:19:31]And you can still create experiences and do wonderful things that don't have to cost a ton, but even they cost something and it's not the perfect ideal financial plan that you modeled out for yourself, that's okay.

[00:19:45]>> So that's experiences. We had a studio tour just yesterday that was talking about opportunities is that they were fortunate enough that they bought their first house through our teachings. They had only saved up 3% at right before the pandemic, bought their first house, and they were saying all their friends that were listening to other talking heads that were telling them they had to save 20% before they updated their rules, they missed it. Yep. They missed out on the financial opportunity to get in on housing. We've tried to create systems that reflect what we've seen with our financial adviserss, with ourselves. We have a no hypocrisy policy here. And that's why we understand that there are different rules for other things, you know, for different parts of your life so that you can live your best life, maximize your army of dollars, but also try to enjoy an experience every decade you're on this planet.

[00:20:35]>> Yeah. We talk about sacrificing a little bit of today for a great big beautiful tomorrow. Not sacrificing all of today.

[00:20:42]There has to be some sort of balance. So what do you do instead? How do you figure this out? Well, number one, you have to consider the cost. Have you actually sat down and thought, "Okay, well, I know that there's the mathematics, the mathematically optimal decision here, but is there an opportunity cost that I'm not measuring?

[00:21:01]Is there something that I'm going to spend, whether it be time, resources, effort, or energy that I'm not going to be able to get back, I'm not going to be able to create?" And make sure that if you are making that sacrifice, that that sacrifice is actually worth it.

[00:21:14]>> And then prioritize what matters. As we was talking about, if you're doing family planning, you don't have to wait until you afford everything. kids, they're not as expensive as you think they are. Now, look, down the road, they get really expensive with college and so forth, but in the beginning, if you think that you're going to be broken by diapers and baby food, I think you're going to find out it's not. Don't hold off so many years that you miss the opportunity.

[00:21:38]>> And if you want to be a homeowner, if you want to buy a house, that's okay.

[00:21:41]You don't have to wait till everything is lined up. That's why we come up with rules that allow you to experience that in a reasonable manner. If you're not familiar, when it comes to buying a home, we want you to follow 3525. You don't have to put down 20%. You can put down as low as 3% so long as you can be in that house for at least 5 to seven years. And the total housing costs that you incur do not do not exceed 25% of your monthly gross income. If those are all true in the affirmative, then I think you can get in a house. You can begin establishing roots. you begin whatever this phase of life for you needs to be. It doesn't have to be something that keeps getting pushed further and further and further out into the future.

[00:22:21]>> And then this this last tip is kind of an umbrella that sits on top of it. I want you to enjoy your life.

[00:22:27]>> You know, I think back, you know, I talk about the concept of bedazzling your basic life. Good memory building, blossoming memories don't have to be expensive. One of the fun things I get to do now, my wife and I went to Europe in our 20s and we did it on the cheap. I mean, it was embarrassingly cheap. It created a lot of funny things we laugh at now. But I get to compare and contrast that experience now to what the, you know, doing it the the the lux way that we get to do it, the bougie way. But I would never, never, never take away all those great opportunities to enjoy life, to make memories with loved ones who were there, you know, available then, but now we just had the blossoming memories.

[00:23:09]Don't let life get ahead of you all because you're trying to be a financial mutant, but maybe you're you're you're straying into financial miser territory.

[00:23:18]>> Brian, I think about our our own little story. You know, we sit here now, we have 50 plus employees here. We have billions of dollars under management as a firm. But I think back to, you know, we just last week had this team building event where it was like we had all these amazing ordurves and trivia. It was this wonderful thing and we rented out a place. I remember back in the day when you and I wanted to do a team building event. We would grab us two and maybe one or two other employees that would work for some >> and we would go to Golden Corral and that was the team building event. And I look back so fondly that was what we should have been doing. That was what members we should have been creating.

[00:23:51]And you're exactly right. It is so fun to sit here now and get to look back at how we bedazzled it then. It's an amazing thing and I think it even makes it more valuable the stuff that we get to do and now we get to experience now.

[00:24:03]>> Yeah. By the way, we probably didn't talk about this is what's great about blossoming memories. We don't remember the the kid who was probably reaching into the buffet instead. We just remember how great it was to be there as a team. That's what's great about blossoming memories. The memories get better and the bad stuff tends to fall off. And one of the things that is a natural repercussion of that is you end up building relationships. Because when you think about mistake number four, and this is one unfortunately we see end pretty bad in a lot of circumstances, is that often times you can be saving so much or so aggressively that it actually begins to create relationship friction.

[00:24:39]>> Yeah. And by the way, this is a this is a a condition that is just all over the place. 34% of couples fight about how much they should save. And this is one of those foundational issues that you see that leads directly to divorce and all kind of havoc within households.

[00:24:57]>> And so why does this hurt you or or how can this hurt you? Well, it can make your spouse or your kids or your loved ones miserable if you are constantly micromanaging. If you're constantly collecting receipts, if you're constantly saying, "No, no, no, no, no."

[00:25:15]And every single conversation you have is about money, it creates a pretty toxic environment. I I have a someone who's very close to me. When she was growing up, Brian, every time that uh a friend wanted her to like, "Hey, my friend's going to," her mom would always say to her, "Well, they give you gas money. They give you like every like" like it was never about creating memories, never about having experience.

[00:25:36]It's always about the financial implications. and it made her miserable.

[00:25:41]That is not a good way to live.

[00:25:43]>> Well, even like that stat that we had up the 34% of couples fighting about money.

[00:25:48]What's crazy is when you dive into the research, the study was showing this was on close to 5,000 couples. These types of agreements, these were the strongest disagreement types to predict divorce.

[00:25:59]Stronger than any other common marital disagreement. So that's why if you can't get the money right, guys, and the way you look at money and in relationships, you can really do yourself a lot of trouble in the long term because it can literally make you miserable if you're the person and tell yourself, do you resemble any of these things? Are you going on 16-hour road trips where you can afford but you're just too cheap or tight um that you're doing road trips instead of buying the plane ticket for your family members? Are you asking your spouse? I mean, I've had people come to me in my life, and I'm not talking about when you're in the budgeting. We all start the journey, you need to be disciplined. You need to have accountability, but after you've conquered the budgeting and you're now in kind of a cash management plan, if you're still asking your spouse for every receipt, you literally are probably growing a kernel inside of them that's going to become more and more costic and poison your relationship if you're not careful.

[00:26:59]>> You you've already said this. You have to understand that there is a difference between a fi being a financial mutant and being a financial miser. Being someone who's using money as a tool to optimize and maximize versus someone who's using money as a weapon to harm those that they love. So what do you do instead? How do you do this better? One of the very first things that you need to do is figure out how do I communicate with money? How do I have healthy, robust conversations with my spouse, with my friends, with my family members, my colleagues, whoever it may be? How do I communicate about money in a positive and healthy way?

[00:27:36]>> And look, don't mishar us. I do want you to take, if you're the financial person in your household, um, it's okay that you can try to get your spouse on the same page as you, but it has to come through good communication. It has to come in a very healthy way because you can create strange power dynamics if you're just trying to impose your will on your spouse. We just recently did a making a millionaire. And this couple, this was a strong dynamic. And look, and I'll tell you, a lot of you financial mutants who were out there leaving comments, you were hard on the spouse, the the non-working spouse. And I I tell you as the adviser who who was actually in the room with this couple, this was mutual a communication issue because yes, he was noble in the fact that he was trying to get them on the same page and reach some long-term financial goals, but he was not doing a good job with his wife of empowering her with the money as well to where it felt very restrictive and created a lot of strange power dynamics. You have to create a system to where you have good communication, where you have some flexibility, and where you're both on the same page.

[00:28:45]>> Yeah. You have to be able to be flexible and recognize, okay, I may be right mathematically, but I need to understand and be able to connect with my spouse, my significant other, my kid, my whoever that might be more emotional. Or you might say, hey, I am right emotionally.

[00:29:03]We need or we should do these things.

[00:29:06]But if it doesn't make sense mathematically, you have to figure out where you're going to marry those two ideas. You have to figure out what concessions you're going to come to.

[00:29:14]Brian, in my first year marriage, I had to learn so much about meeting my wife, where she was at in the middle. And once we were able to figure that out, we were able to have much healthier, much better conversations about money. And it led to us actually being able to use money as a tool with >> I remember because I mean we we've known each other for decades now and I remember you having simple fights over like shampoo.

[00:29:40]>> Oh yeah, absolutely.

[00:29:40]>> And that's why look you really do need to be flexible and you also need to be a little self-aware of where you are in your journey is because I think a lot of you financial mutants and that that the kind of you you teeter back and forth between financial mutant and sometimes financial miser with your loved ones is you run up the scoreboard. I think you will reach a point. Look, there's a reason I I turned in my tight wad card.

[00:30:01]You know, I used to market this show off of us being so good that we could pinch our pennies so tight. But I realized that there was a point, a transition point in my own personal life where I was not going to die a poor person and that some of this discipline that had served me so well in the beginning was now actually squeezing the life out of my loved ones and the happiness out of the relationship. So guys, be very purposeful to understand where you are in your journey because you're not going to get to take it with you anyway. Use money as only a tool. Now, let's maximize the memory building and all the things you can do with this powerful tool, but let's not squander it through miserly actions that is squeezing the life out of your relationships.

[00:30:43]>> All right, Bri, we've talked about four mistakes so far of what can hurt you or what can go bad if you save too much.

[00:30:50]This fifth one is a little interesting, but I think it might even be the most common one. And this mistake is folks who save without a plan. They don't have any sort of plan in place. And okay, well, why is this bad? How might this manifest? What might this look like?

[00:31:06]Well, it could take a couple different forms. Maybe you have an emergency fund that's too big or too small because you don't have a plan. Or maybe you're saving more than you need. Or maybe you're saving less than you need because you don't have a plan. Or maybe you're saving in the wrong place. The money that you're putting to work isn't actually going to work in the right place because you don't have a plan. Or maybe you're a good saver, but what you've designed is a system where you can constantly dip into that honeypot.

[00:31:34]You can always reach in and pull money out because you don't have a plan for those dollars. If you find yourself in one of these places, there's a really good chance that you don't actually have a plan. you have the discipline and you're able to save, but you don't have a plan for what you're doing and why you're doing it.

[00:31:50]>> And then the last point I' I'd say on this and why it can hurt you is that all of you who are financial mutants, you're going to reach the the stage like I did where you realize in the beginning of your journey, you're literally trading your time for money, you know. ly because you have to go to work out of obligation to pay the bills to provide.

[00:32:09]But there will come a time as time gets less and less in your life that you will start trading your money if you've done it right. So you own your time that much sooner. So it's very important if you want to own your time to know when you've crossed over that threshold. And if you don't have a plan, you will pass that point. And that's literally the definition of running up the scoreboard.

[00:32:30]And I just don't want you to die or leave this planet with regrets because you didn't get to maximize that component of time to live the best version of your life. So what do you do instead? Well, obviously you should build a plan. And part of building that plan is okay. Well, knowing how much should I save? Should I do three to six months in my emergency fund? Am I someone who's approaching retirement?

[00:32:54]Maybe I should have 18 to 24 months. Am I someone who based on where I'm at, I need to be saving 25% of my gross income so that I can live the life that I want to live on my terms the way that I want to live? And if you don't know how much to save or you don't even know where to start, we have a great resource for you.

[00:33:10]Go to moneyguide.com/resources and download our deliverable. How much should you shave? And how it's not how much should you shave? We haven't released that one yet. That one's coming out in the future. This one is how much should you save? David will show you based on your age and based on when you want to reach financial independence what your savings rate should be to be able to get there.

[00:33:31]>> And then you know we want you to own your time that much sooner. So where you save matters. That's why we've created the better mousetrap the better system that just naturally through the financial order of operations we're going to be in a very taxefficient way help you put not only are we going to keep you out of the ditch with the emergency fund but we're also going to be very tax incentivized or or favored with how we structure it. And then that's going to allow you to land on the three bucket strategy because when you get to step seven of the financial order of operations, you're going to start thinking about not only am I saving for the tax purposes, but how am I going to actually use this money? We've got you covered with the three buckets, three tax buckets where you know what to do with the pre-tax money, that's the employer match and so forth. The tax-free money, the Roth, that's going to be your favorite child. How do we maximize that thing? And then you think about your after tax, that's the bridge account to get you into retirement. Each of these things is gonna have a time and a place and it will be built into your plan.

[00:34:24]>> So again, we're talking about building a plan. It's knowing how how much to save and then where to save. And then I think a thing you have to always stay reticent of is why am I saving? What's the purpose behind the things that I'm doing? Maybe that purpose might be the motivation you need to keep you going even when things get hard or maybe even when things get messy. Or or maybe knowing why you're saving is, hey, I'm actually behind the curve. I'm saving so aggressively. so that I can get caught up to where I want to be because ultimately in the future I want to be able to do exactly what Brian said. I want to be able to trade my money for time so that I can own my time and live the life that I want to live.

[00:35:03]>> Yeah. So knowing I mean I love how we've done this like a journalist. We the the the how, the when, the why, the where.

[00:35:10]This is why it's so important to take control of your life is because you'll know when to do the right decisions, when to maximize things. And look guys, I get it. You're watching financial content. It's probably because you're doing a lot of things yourself. And in the beginning, your goal should be to keep your finances as simple as possible. But if you do this right and you're you're investing early and often, and you're maximizing the value of your time, you're also not sitting on too much cash. You're deploying your cash instead of letting it build up in the background. They will reach a point where your simple life through your success creates complexity. We're going to leave the porch light on for you.

[00:35:48]We'll be there. Instead of you having to face this, you're going into your retirement or you're going into your sevenf figureure portfolio and going, "I've never done this before. I don't know what I don't know. I don't know where my blind spots are. I just don't have the time to maximize this. We are here. We work with clients in 49 states.

[00:36:04]Come on, Vermont. Get in there and get some of that." We want you guys to know there is a better way to do money and we'll help you get there. So go to moneyguy.com become a client. Let us show you there is a better way and what the abundance cycle looks like. I'm your host Brian joined by Mr. Bo. Money Guy team out.