Are You Doing Better Than the Average American?

Money Guy Show

The Money Guy Show explores how listeners stack up financially against the average American and fellow 'financial mutants' through an annual

Key takeaways

• Median liquid assets for a 35-year-old American are around $37,000, but financial mutants aim to outperform averages rather than match them.

Main topics

• Median financial assets by age
• Financial self-assessment vs. average American

Notable quotes

"We want to look at how do you stack up to other financial mutants?"

Conclusion

Listeners are encouraged to participate in the annual Financial Mutant

Transcript preview

Speaker 3 (0:05) Back in the saddle, guys. Are you doing better than the average American? Brent, I am so excited about this because we know that our folks, they don't like to compare themselves. That's not what we do here. But it is great to just have an idea of where am I? Where are others? How do I stack up? How do I know if I am doing the same types of things that other financial mutants are doing? And today's show... It's all about figuring out how we are going to discern that. Speaker 1 (0:37) Well, I mean, look, if we want to just have a baseline, what is the median financial assets of the typical American if you exclude home value? Look at this. I mean, this is why, if you were using comparison, the typical American is not who you want to compare anything to. So if you're trying to do any type of pace setting. whatsoever just to know if I'm doing the minimum so I know if I'm ahead of the curve, behind the curve, right where I'm supposed to be, there needs to be a better way to know how to do money. Speaker 3 (1:08) Now, these financial assets, this is like checking, savings, retirement accounts, pension. It does not include vehicles, other types of assets, home equity, collectible. So if you're just thinking about kind of like your liquid portfolio, you would look at this. And if you're a 35-year-old, you say, hey, if I have a... more than $37,000 in liquid assets between my retirement accounts and my cash and my checking, I'm probably doing okay. But we know that even as valuable as this data can be as a checkpoint, a lot of you, a lot of the financial mutants out there, you don't want to be the average American. That's not who you compare yourself to. That's not who you want to stack up against. So we decided that there's a better way. Rather than seeing how you stack up, to the average American, we want to look at how do you stack up to other financial mutants? Speaker 1 (2:00) And with that, we're introducing our annual survey. Look, look, no, no, no. This is, this is the thing. Look, I know I'm a little rusty. I've took two weeks off and I, and I know we're sitting over there. We got, we got Reby in the wings and she's about to jump in, but this is one of my favorite things. If I could give you the vision, you know, of what motivated me when I started this all out is that. I had read The Millionaire Next Door, and I loved how that book shed light on the fact that millionaires were different than what Robin Leach on Lifestyles of the Rich and Famous was sharing. So imagine my happiness that we have now reached the level of success that we have enough viewers that we can every year survey not only our millionaire clients, but survey our audience so we can create content and make something beautiful. that's what I get excited about because the educator, the heart of the educator that I have really does. And I would beg and plead that you guys, I know you've probably done it every other year we've done it. Please do it again because we use this for content. Yeah, I think what's so great is a lot of people, Speaker 3 (3:04) we're not just looking for, hey, who are the financial mutants out there that are killing it? Who are those people out there that are in step nine and crush? We want to know wherever you are. Maybe you just found this and you're 45 years old and this is your... very first interaction, the money guy show, and you're starting to make good decisions. We want to know about that. Maybe you're someone who's been a father for the decade and you're doing all the things right. We want to understand where you guys are. And the reason we want to do that is so that we can create valuable content that helps all of you live better financial lives. Those of you that are ahead of the curve, those of you that are behind the curve, and those of you that are right on the curve, we use this to figure out how we customize, create, and curate content for your benefit. It's why we do it. So, Reby, if there are folks out there, and they're like, all right, I want to do it. I want to participate. I want to get my data in there so that I can be represented. What do they need to do? Step Speaker 2 (3:59) one, just complete the survey. Go to moneyguy.com slash survey. It only takes a few minutes to complete. What was that website again? Moneyguy.com slash survey, Bo. One Speaker 3 (4:08) more time. Speaker 2 (4:09) Moneyguy.com slash survey. Goodness. I'm going to say it more times. Well, they Speaker 3 (4:13) say whenever you want to learn somebody's name, like you meet somebody. Hey, Speaker 1 (4:16) Brian, Speaker 3 (4:16) it's so great to meet you, Brian. I feel like we just yelled Speaker 1 (4:18) Candyman in the mirror a few times. So say it with us. Moneyguy Speaker 2 (4:20) .com slash survey. Go there. Step one, complete the survey. We're going to compile that data later for a cool snapshot for multiple episodes of the show. Speaker 1 (4:28) Or Beetlejuice. Speaker 2 (4:29) And so that is step two. That's going to shape. the show. We truly have at least two episodes, if not more, in the works that's going to be based on this data. So we need everyone to show up for it. We have been so excited to see the participation, the engagement over the past couple of years. I love that this is now an annual tradition. So... Please show up and continue this annual tradition. Continue making it awesome and super valuable. That is what we're going to be doing. We're going to compare mutants to the average American to maybe our abound clients and break down more of this data to show you guys where everybody is in the audience and continue to create content. off of that. And then lastly, step three, once you fill out the survey, we will notify you specifically when those episodes are live. Like, hey, the episode that you helped shape is now live. We will send you an email and let you know that. And don't worry, we're not going to spam you. I just want to throw that out there. We love to connect with you via email because, um... Speaker 3 (5:26) That's where the algorithms don't matter, to be honest with Speaker 2 (5:29) you. It like actually just lets us connect with you. So our email newsletter, the Moneyverse Discord, that is a more direct, just like, hey, we're friends, we're connected. That's all that is. So we're not going to spam you. We're just going to notify you when, hey, you helped us do this. You took a few minutes of your time to help shape this show. And it is now out here for you to see and enjoy and interact with, to share with your friends, all of these things. So like Beau said. Go to moneyguy.com slash survey to participate. We cannot wait to see the results and to share this content with you. We really appreciate you making this such a fun annual tradition. Can Speaker 3 (6:04) I tell you one of the things I love about the survey? Yes. So we sit around as a team and obviously, you know, every year the survey has a lot of the same questions, right? Like, because we want to see like, how's that tracking through time? But every year we're like, hey, are there things that we didn't ask? Are there questions that we should ask? Hey, are there things going on out there in the financial world that we want to see? What are our financial mutants? What's our audience doing? How are they using these things? How are they thinking about these things? And so every year we have new questions, new angles, new thoughts, new ideas. And this year is no different. So I'm super, super excited once we get all the results back so that we can then dive into. Even some of that new stuff. I mean, the old stuff is great too. The annual stuff is so good, but I'm excited about some of the new questions on there this year. Speaker 2 (6:46) And this will only be open to take and participate in for a limited amount of time. Cause at some point we've got to shut it off and go compile the data and make the show. So be sure to get in on this. It's going to be open for a couple of weeks until September 30th. So make sure you get in on that sooner rather than later. Cause I would hate for you to miss out just because you didn't realize it was open for a limited time. limited amount of time. And like Bo said, I want everyone to take this. I'm looking at you. If you're in step one, take it. If you're in step nine, take it. I want to know. I want to know where everybody is. There's not. Was Speaker 3 (7:16) that Shia LaBeouf? Was that your Shia? Oh, Speaker 2 (7:19) here we go. Here we go. Just do it. But truly, we really do want you to do it and go take out the survey. Speaker 3 (7:28) That's Speaker 2 (7:28) awesome. Speaker 3 (7:29) Awesome. Hey man, can I tell you, it's so good to have you back. It is so good to have Speaker 2 (7:33) you back. I think I can speak on behalf Speaker 3 (7:35) of me, Reby, the Money Guy team, and the millions of people in the live stream right now. We missed you. Speaker 1 (7:41) Well, y'all probably noticed. Fast forward, I go on vacation. You're like, I wonder if Brian misses this. And then about day six, day six of vacation, all of a sudden the love letter started coming through on the Slack thread. I was like, guys, I really miss you guys. And then, you know, y'all gave me a few emojis. It was nice, but I was like, oh, I don't know if they're feeling the same way. So then I dropped another love letter in there. I really did. Look, I love going on trips with my wife. And we went with some dear friends over to Scotland. And I love the Scottish people are the friendliest people on the planet. I really do believe that. No, they are very, very friendly. I will say, you know, I have this ability where I can kind of interpret people's emotions a little bit. And this is just my opinion. They are the friendliest people, but there's a little bit under the surface of, I don't know if it's. Their history or what but a little bit of unhappiness there though. I just could sit and that's also probably the weather I mean the weather is schizophrenic because you know every 15 minutes. It's sunny clouds coming it rains It's sunny cloud cuz it would like an everyday thing. Yeah. No you had to literally The only thing that they got right on the because I should have brought shorts I was hot everywhere because we over air-conditioned in the south They overheat every building in Europe. I mean, it is because it's 60 degrees outside, but the buildings are all 80 degrees. Yeah. And it's always hot everywhere. But the best advice I got was to have waterproof shoes. And then also I had a rain, like a Patagonia, like real thin raincoat. And I had an umbrella that could withstand some wind. Love that. And that was needed. I had a little fanny. It was a shoulder. It wasn't a fanny pack. I've graduated past fanny packs. But, you know, there's a crossbody, and I kept my passports and my money. That's Speaker 3 (9:36) just a diagonal fanny Speaker 1 (9:36) pack Speaker 3 (9:36) is what a crossbody is. That's what it is. We've Speaker 1 (9:38) upgraded the fanny pack to crossbody now. Speaker 3 (9:40) It's Speaker 1 (9:40) no Speaker 3 (9:40) longer horizontal. Well, man, we missed you, and I'm so glad because now that you're back, one of the things we get to do is the same thing that we get to do every Tuesday at 10 a.m. Central Time. We get to load you up with the things that you care about. So if you have... a question right now. If there's something you want to get our take on, something in your life you want us to speak to, we have the team out in the wings collecting your questions. So make sure you get them in the chat right now because we believe that there is indeed a better way to do money and we want to help you do money better. So with that, Creative Director Reby, I'm going to throw it over to you. I'm Speaker 2 (10:17) ready. We're going to start it off with Epcot World Traveler 007. I'm an Speaker 1 (10:21) Epcot fellow world traveler. Speaker 2 (10:24) It says, when calculating net worth and investable assets, how do I treat the current value of a fully vested defined benefit or cash balance pension plan with my current employer? Speaker 3 (10:35) Ron, we get this question all the time because obviously we have our net worth template that you can get for free at moneyguy.com. We have the tool. You can go get it at learn.moneyguy.com. And we love tracking net worth annually to understand where you are. And when you do it every single year, you get to track, okay, How far have I come? How am I progressing? How are my financial decisions impacting my life? And I think one of the things you even wrote about, I think you touched on it in Millionaire Mission. I can't, yeah, you touched on it. A lot of people ask this question all the time. Hey, I've got this pension. I've got this defined benefit. I've got this thing. It's not exactly like a 401k or a four through B. How do I account for that on my net worth? How do I look at it? How do I think about where it falls? Speaker 1 (11:15) Well, it's a good thing this isn't part of the rapid fire because this one is, it definitely depends. Now, if you log into your pension website, a lot of them nowadays will have options to where you not only get to choose if you want to annuitize the pension, you know, when you retire, you know, you choose the survivor benefit. But a lot of them even have like a third option where they say, or you can just roll the balance over. Basically, we get... remove the obligation off of our balance sheet, and we're going to let you roll a portion of these assets into your own IRA of choice. If you have that rollover option, they'll give you what the account's worth. You can put that on that worst statement under retirement assets. I have no problem with that. Now, the problem is a lot of, because it is a defined benefit program, meaning that pensions are promises of future. income streams for your retirement. And a lot of websites are especially old school ones. They don't have a rollover option. They have just it's a promise of what they're going to pay you in retirement. And for that, it's because it's a promise only and it's not a rollover of the assets. I think it's more of what you put it on your footnotes as a disclosure of income streams you'll have in the future, just like you will have Social Security. And you use that as a planning technique where you'll lower how much money, you know, you figure out what you need in retirement. You'll subtract what you have coming in from pensions and social security. And then whatever's left over is now what you'll be required to come up with from your own assets to providing your retirement. But it doesn't actually show up on your net worth statement because it's a promise for the future unless it has some value to be able to roll it over. Love that. Speaker 2 (12:58) Fantastic. Speaker 1 (12:58) I didn't leave any meat on the bone for Speaker 3 (12:59) you. No, I thought you nailed it. I thought, you know, why do we not tell people, oh, well, just here's what you do. Here's the mathematical calculation. Why don't you just calculate the present value of the future cash flows of that pension? We want to be careful having too much of a false sense of confidence for some promise in the future that may or may not be there due to circumstances that are outside of your control. What are the things that you can control right now today? How much am I saving? How much am I building? How much am I putting away that I know is going to be there when I get there? And we don't hear about this as often, but in your career, there have been folks who were banking on, I'm going to have this pension. I'm going to have this guaranteed thing. And then something happens with that entity, organization, whatever. And all of a sudden that pension benefit they thought that was going to be there was changed and was different and was not what they thought it would be. We want you to be careful from having a false sense of security. Rather, we would want you to take hold and have some ownership in your future financial stability. Speaker 1 (13:58) This is just a one-off for Epcot 007 here, Epcot Explore. Go look at your annual report from your pension. Just make sure to see how well-funded it is. And then from there, you can take that data and go to the Pension Benefit Guarantee Corporation. It's essentially the government insurance. that they provide on many pensions. Not all pensions, by the way. That's the other thing you need to find out. Does my pension qualify for the pension benefit guarantee corporation's coverage? And then I would compare what you think you're going to get to what's guaranteed. And if it's over, what you think you'll receive is over what that guarantee amount is, the insured amount, you need to make sure your pension's well-funded because that would probably then... shape my decisions on how I'm going to use that pension for my future retirement. Love that. That's extra. That's what the financial planner typically does. Speaker 2 (14:56) Love it. Next question's from Kyle S. It says, good morning, Money Guy team. Would like your thoughts on HELOC versus saving up for a new deck? Estimated cost is 50K, no savings currently above our emergency fund. We have a 250K income, auto loans and mortgage are within the FOO, or Money Guy rules, it sounds like. So he wants a new deck. HELOC? versus just saving up for it. How should he think about this? No, Speaker 3 (15:25) okay. I want to be clear. And Kyle, I really need to know the answer to this question. When you say no savings currently above emergency fund, is what you mean by that? I don't have excess cash above and beyond $50,000. That's Speaker 2 (15:38) what Speaker 3 (15:38) I took Speaker 2 (15:38) it as. It Speaker 3 (15:39) does not mean I don't have any investments. Like I'm Brent, like I just, I don't have a 401k, an investment account, a Roth. I don't, because I would argue. If you are that early in your financial journey, we've got this great income, but you got this auto loans, these mortgages, but you haven't started saving yet and building doing something like adding a new deck. One, I would, I would want to have the question around the necessity of this. Is this a have to have, or a need to have, and I never want to be presumptuous and just assume that it's a, or I have to have, or I'll want to have, I never want to be presumptuous and say, Oh, that sounds like a want. Cause maybe the deck is unsafe or whatever. Right. But if you don't have anything else working for you, if