OK. I think we're going to get started on our questions and answers. Jesse will be joining us shortly. Here he is. Come on down. I think one thing-- I think we'll start with the question of, for people who are saving and investing now, how do they balance their priorities, saving for retirement, maybe saving for kids' college, for a home purchase, for their emergency fund?

People have different priorities. The house is the one thing that you can buy and enjoy, and it generally goes up in value. Typically, I tell people to put their retirement ahead of the kid's college education. That's just my own personal viewpoint. There's a lot of discussion about funding 529 should the kid have skin in their game.

My answer was not a very good one. My parents paid for my college. I paid for my son's college. So you kind of have to have the discussion with the client about what their priorities are. And sometimes I try to shift their priorities, but ultimately, they have to agree to it.

Yeah, I think that's great. I also love the idea of building that kind of $1,000, like just have like $1,000 at some point that is easily accessible. I love that idea. But my priority system would be get to your magic number. Get to that savings rate number for your future self.

I mean, it wasn't until I actually sat across from people who could not retire, and I realized that the pain of that is so severe that it cannot be offset by anything purchased along the way, meaning that people would do anything to go back and change the fact that they had not saved enough over those decades to be able to stop working.

So I'm sure someday one person will be able to give me something else that they could have bought that would have been more important than the ability to stop working, but I still have not found that yet. So I always put that as the number one ranking. And then you can kind of be in and out of credit card debt.

Fancy free, don't save for the kids' college, take out tons of credit card debt and student loan debt. I guess that's fine, and it works, but maybe you won't be living and maximizing your happiness and utility with money. But I say just get that priority done. And then if you look at my pay yourself first kind of hierarchy, then second, get three to six months of emergency savings set aside.

You can take about five years sometimes for people to build that. And then I believe in setting up squirrel funds. And so you can do that either with YNAB. We have a lot of clients that use that tool that simulates those different buckets, or you can actually set up your own savings buckets at your bank account.

Call them different things-- vacation, home repairs, car repairs. I have a clothing savings, just all the pet savings. Oh my god, do you know how-- don't get a pet. Forget college savings, y'all. I just took my dog in. He got Rocky Mountain spotted fever. We're running about $3,000 so far.

And then I heard another guy pay $4,000 at the register. And another person flinched when they said $600. It's no-- it is crazy. Don't own a pet. There's your kid's college education right there. It's cute. Ran over. I don't know. The insurance-- the house always wins, right? I know, with pet insurance, house always wins.

This is true. But please don't make that decision. SC, I've got to disagree with you. Dogs are wonderful. So that goes back to Jesse and investing thoughtfully for what's important to you, right? Yeah, I also was going to say to get rid of your dogs. So-- No, that was a fantastic demonstration of different priorities.

I have nothing else to add. I'm starting with the emergency fund. So how should I invest my emergency fund? I mean, I am not nearly as experienced in the investing side as these three are. But it obviously needs to be liquid, safe, quickly accessible. Check those boxes. I think that money market funds are good for your emergency fund.

But I also-- for people who are in a very high tax state, you might want to use a treasury money market fund or just treasury bills. Just buy T-bills and roll three-month T-bills because you don't have to pay state income tax on that. Something very conservative. Unless you have access-- I mean, the stock funds are liquid.

So access to cash is more important than cash. And how much should be an emergency fund? I'm not a six-months or anything like that. If you work for the government, if you're an endowed college professor, your job is a whole lot more stable than if you're working for a startup company.

So how much should be in there, it depends. Like I said, the answer to just about every question, it depends. Couple of related questions about 401(k)s. Should people prioritize Roth 401(k)s or regular pre-tax 401(k)s? And where does the solo 401(k) fit in? Oh, I love solo 401(k)s. Who asked for that?

Great. OK, so generally, if you ask me, should I do Roth or pre-tax in my 401(k), I say yes. I'm not going to go to the mat on this. But generally, if you're kind of younger and you're not at your earnings potential, you're not making very much, choose the Roth.

And then if you're at a higher income-- no? I'm 100% in agreement. I'm shaking no. You stole exactly what I was going to say. OK, I was like, I don't want to disagree with you here. I agree with you on your network theory. I agree with you. Don't worry about it.

So anyway, that's something I wouldn't lose too much sleep over. A solo 401(k) is a really wonderful tool. If you own your own business, it's great. So I own a salsa dancing nightclub. And I think we're the only nightclub in America that has a 401(k). And we do. We have a solo 401(k) on our nightclub income.

So you, too, can set up a solo 401(k). There are some really wonderful providers of it. But I would suggest going to-- I love Vanguard. We have used theirs before. But I like the smaller ones, like Employee Fiduciary or Ubiquity. They make it a little easier for small business owners to set them up, rather than these bigger record keepers, like Vanguard White Labels, Ascensis.

These are just huge record keepers that are very unwieldy to work with. So make it easier on yourself. By the way, I have a solo-- sorry. I have a solo 401(k) and a solo Roth 401(k). And quite frankly, I'm not all that happy that Vanguard jettisoned and sold it.

Yeah. Neither am I. I was with Vanguard with my solo 401(k). They went to Ascensure. Ascensis. Ascensis. I'm sorry. Ascensis. And the very first thing I tried to do was I tried to make sure my allocation to my Roth was in stock, and my allocation to my pre-tax side was in fixed income.

Again, asset location. And you couldn't do it there. Unlike Vanguard, where you could have a Roth account and you could buy whatever you wanted in your Roth 401(k), and then they had the pre-tax side of your 401(k). You could buy bonds over there. Unfortunately, with Ascensure, it's much more difficult to try to get it that way.

They said, well, you need to make two contributions. And when you make your Roth contribution, you put the fund that you want that to go into. And then you get a weighted day, and then you make another contribution. And then if that's going to go to your pre-tax side, then you buy a bond fund with that.

I said, all I want is to be able to look at it and say, what's in my Roth 401(k)? What's in my pre-tax 401(k)? So sorry to belabor this, but I'm not happy with that transfer. And there have also been the issues with the census and people with the solo 401(k)s trying to move their money out.

I don't know if there's anyone in this room who has been in that bucket. Fidelity doesn't have a Roth solo 401(k) though. I expressed my dissatisfaction to the CEOs, Salim Ramji, the Vanguard CEO. And I got a call from a census, and they did fix it. So if you raise it a little higher, they will fix it.

When the advice that you have all shared here, thinking about the basics of saving, making meaningful decisions about how to spend your money and investing, I'm wondering how your advice differs if you're talking to people who are starting out in their 20s versus there are people who are in their 40s and 50s, and they're just kind of getting their act together.

I tell young people, as they get raises, try to keep their lifestyle fairly constant. Raise it maybe with inflation so they're not cutting their lifestyle. And I'm going to steal this from USC, pay yourself first. There are some things that you can do in your youth with both of your normal knees that you maybe can't do later in life.

And the only thing that we teach is that the context is most important to be thinking about spending in tenses instead of just spending in general. So if you were to think of past tense spending, it looks a lot like credit card debt. This is spending that happened in the past that you're still dealing with.

And present spending is pretty obvious what you might spend tonight. And then future spending is obviously you with an eye toward your future self. And there's no right answer to take the it depends kind of trump card answer. But it's interesting, when you're working with someone that's 25, their idea of future is 30.

And it throws you off a little bit. But they can still, when their context is correct, where they're feeling past student loan spending, they're feeling present wants, they're looking toward the future, they still, with that tension, can arrive at a mix, a balance that works for them. So there is no right answer.

But the only right thing to do is make sure that you hold all three spending tenses at the same time and start working on the answer. And for the people who are first focusing on this now in their 40s or 50s, what are the most important messages you would have for them?

I mean, again, I think it goes back to get your savings rate in order. And it's much easier, obviously, to ask a 22-year-old just starting their first job to sign up for 10%. And we're able to do that. We have a movement in Arkansas getting every kid coming out of college the information to save 10%.

And they're just going out and showing us screenshots of their Vanguard accounts. And it's really fun. And it's great. But what's hard is sitting across from someone who is 40 or 50, and they haven't been saving 10%. No one told them to do that. And they're just catching up.

And for them to get to a 25% savings rate or a 30% savings rate that might be necessary based on that table in order to retire by the time they're 65 might require downsizing a house. Maybe the child-- you've got kids. The kids don't want to leave the house, right?

These are very emotional decisions. But let me just tell you this. I have seen people make that transition. And I always say, you can always go back. You can always go back to the spending you had previously. But what people tell me is that the peace that they feel after making that decision, there is no amount of spending that can replace it.

So if you are in that place and you're inspired to do it, I don't think that you will ever regret it. We haven't seen anyone do it. I also want to do a shout out to the Pivot podcast. Sorry. Sorry, Catching Up Defy. I'm so sorry. Catching Up Defy podcast.

It is a really terrific one. We have seen people make the pivot that Bill and Jackie talk about in tremendous ways. And it's very inspiring for people who are wanting to make a big change and be able to get on track for retirement. I think your podcast is fabulous.

I have found that it's really, really hard to get somebody who's always been a spender to change behavior. There's some marginal things that can be done, like use cash, make it more obvious when you're spending the money. But it can be done, but I think it's very hard to be done.

And with Bogleheads, quite frankly-- and I'm absolutely guilty. My relationship with money is not healthy. I've been frugal. I realize I can't take the money with me when I go, but it's still hard for me to spend. And I have that problem with a lot of my clients. And I say, here's the advice that I have, but it's coming from a hypocrite.

Here's a question. What conversation should I be having with my financial advisor, who I never hear from? I think you start with saying, listen, you hypocrite. No, I'm just kidding. The best financial advisor is mostly a therapist, I think, and understands the psychology and the emotional side. Anyone can do the math.

I mean, AI, I guess, can do the math now. Maybe, I don't know. And so it really is a coach, someone that reminds you about your plan when you forgot that you set that plan, someone that reminds you what the goal is when you've forgotten. When emotions are louder than the plan, sometimes the best advisor can just kind of gently point you back to that plan.

Well, this is a touchy subject, quite frankly. So I started out as a broker for 10 years, and then I had my own money management company. And when I was a broker, I called myself a financial advisor. But in fact, I was trying to sell whatever product they were asking me to sell.

I wasn't really doing advice. I was selling something, whatever the brokerage company wanted me to. And then I figured that out. And then I said, OK, I really want to manage money. So when I started managing money, I was a portfolio manager, managing investment portfolios. And my goal was to bring in clients and manage their money so that I get paid higher fees.

I mean, was I a financial advisor at that point? We used to help them with asset allocation, and we used to do the fund selection. But I really wasn't advising them on how much they should take out or whether they should go ahead and take their Social Security money.

I wasn't giving them a lot of financial advice. I really wasn't an advisor. But I called myself a financial advisor. Now, when I'm finally doing what Alan Roth is doing, I think I can say I'm a financial advisor, because the only thing I do is give advice. So the first question I would ask, if your financial advisor is not calling you, they're probably not a financial advisor.

They probably sold you some products, or they're probably managing your money and don't want to hear from you, quite frankly. Because the best client, if you're managing somebody's money, the best clients are the ones who never call. Never call. You don't have to spend any time with them. You get the charge fee every single quarter.

Those are the best clients. We used to say that internally in the firm. Oh, those are the best clients. They never call. All right, so my point is that financial advice is a different business than selling products, or insurance, or managing money. It really is what Alan's been doing for many years.

I am not a life advisor. I am not a therapist. I'm still working on my own life. A lot of work to do. So I'm only taking clients that really understand and just need a little help in some of the complexities of getting out of some of the tax implications of getting out of complexities.

And I'm going to brag again. I have the worst client retention in the business, doing a one-time plan, giving them a roadmap of what to do going forward, because I don't know what the market's going to do next week, and I don't know what the market's going to look like four years from now.

So they won't hear from me. Other than my free monthly newsletter, they're welcome to get. And then occasionally, we talk and be friends, but I don't bill them for it. Here's the big thing you need to know. If you have a financial advisor, chances are you chose this person for a reason, right?

They're really friendly, maybe go to church together. So there are a lot of people in that situation where they just don't know how to break up with this person, because it feels so personal. But they're such nice people, right? They're all doing it for free, right? Oh, no, they're not, are they?

So let's say that you have $1 million with this person, and they have this 1% AUM fee. What is a 1% AUM fee? What is that? $10,000. Nice friend. Yeah. Then you're like, oh, OK, well, things are a little different now that I know how much I'm paying. And so this is where you can get a little bit more objectivity just by doing a little bit of research.

So what you want to do is pull up an email and say, hey, I was just at this conference. I'm learning a lot more about my money. And I'd like to know, there's this thing-- I don't really know what it all means, but maybe you could answer this question.

What's this AUM fee? Do you have one? And then are there fees on the funds themselves? I'm just trying to understand it all. And then you'll be switching financial advisors after that. There's a lot of financial advisor training on hooking the client by being their life advisor, and that's nothing I believe in.

So in this session, we've talked primarily about savings and investing. But I want to ask you to just-- what are some of the other really important messages you would give people here in the context of a 101 program on things beyond saving and investing that are really important for their financial well-being?

I have one interesting stat. And I was reminded of this when SC was talking about someone that's maybe 40 that's fallen behind and wished they would have. We've helped a couple million people probably go through and really kind of radically change the way they think about their money. And what happens is they start to spend their money on things they really care about.

A lot of times, that looks like paying off debt and investing. And so I've asked maybe a couple hundred people this direct question where I say, listen, you were living paycheck to paycheck just right at the edge for years. And then suddenly, you have this extra money. And you paid off thousands of dollars in debt.

And your net worth just completely transformed in short order. What was your secret? Did you get a big raise? Did you change jobs? Did you downsize and do a big financial big shift like that? And of those couple hundred people that I've asked, this isn't scientific, but it is true.

I have gotten the same answer every single time. And these are success stories that I'm talking to. But they'll say, well, we cut back on our spending. And that just means they spend differently. And I say, well, where did you cut back? And I'm not kidding you. 100% of respondents say they eat out less.

And so for all the talk about, gosh, how do I do this? How do I do this? I'm just telling you a response from a couple hundred people that suddenly found thousands and thousands and thousands of extra dollars over some meaningful period of time and that turned them around.

I don't know why that is, but it is. And so you can just take that one little nugget and not go out to eat tonight, I guess. I don't know what you'll do with it. You're on your own tonight, if I heard correctly. So yeah. Couple of things. Maybe I'm jumping in front here.

But have a will, have powers of attorney, financial powers of attorney, health care power of attorney. Do some real basic estate planning. So many people don't. And I see a lot of people who have trust accounts and they're not funded, there's nothing in it. You say, well, the will is going to do that.

Well, guess what? If the will does that, it means it goes through probate, which defeats the purpose of having the trust account to begin with. And the second thing is-- and again, if I'm jumping ahead-- insurance. Insure your most valuable asset, which is your ability to earn money. So have the correct life insurance, term life insurance, low cost insurance, and disability insurance.

Super great there. The other thing I would add that we didn't discuss is our time. And when I was younger, money was more important than time. But as I've got three children, and we've gotten closer to financial independence as a couple, my husband and I have realized that there is nothing more precious than our time.

And we have learned how to part with money, because you have to learn how to spend when you have been a significant saver, to buy back hours of our time. So we discuss that a lot, what the value of our time as a family is together and how much we're willing to pay for that.

So for instance, I have recently purchased a lot of my time back in my business by hiring people. So I don't have to work as much, and I can meet my daughter at the bus stop. That's really important to me. So you can also think about things a lot more differently when you start approaching financial independence.

It's a big reason to get there, because you're essentially not retiring. You're buying your hours, which I think is priceless, right? And I would say, have a healthy relationship with money. Determine what makes you happy. I remember as a kid, if I went to the movies with my friends, it would be over within two hours.

If I bought stuff, I could have it forever. I had it completely backwards. Similar, not exactly what you do, I see, but I define wealth in terms of years. Who's wealthier? Someone with $500,000 and needs $20,000 above Social Security to live on? They have 25 years worth of financial freedom.

Or somebody that has $20 million, but they need $10 million a year to live on. They have two years worth of financial freedom. They're poor. And who do you think is probably happier? Jesse, do you have any other thoughts for us on how to spend thoughtfully? Make those decisions of how to spend our money.

I mentioned already that the tense is, you just have to make sure that you have it in context. So a pile of money in a bank account only tells you how much money is in the bank account. It actually lies, really. It's a lie. And people will sometimes use that pile of money to say, I think I can afford this.

I think I can afford that. And they're wrong. That question of, can I afford something, or should I spend money on this, is a pretty stressful question. If you're living paycheck to paycheck, or if you're just in the habit of not spending, it also can stress you out. And so the only part that's really important is to make sure that you see that pile of money with purpose, and that purpose is yours.

But as you see it broken down with purpose, the answers do start to show themselves. It's not rocket science. It's not brain surgery. It's just you with the right context. And recognizing that money is, by definition, finite, and that finiteness, that scarcity, actually instructs you-- we often tell people that scarcity is clarity.

Meaning, the fact that you don't have an unlimited amount presses you to trade off and decide what's most important to you. Thank you. I think that's a great note to end on. I want to thank our panel for giving us a lot of really great specific pointers, but also, almost more importantly, giving us a framework to think about a lot of these questions around money.

Thank you all.