Can You Achieve FIRE with Only Stocks? (Money Q&A)

Transcript:

On this episode of the Personal Finance Podcast, can you achieve financial independence with only stocks? On this episode of Money q and a.

Oh, what's up everybody? And welcome to the Personal Finance Podcast. I'm your host, Andrew from Master money.co. And today on the Personal Finance Podcast, we're gonna dive into your questions on this episode of Money Q and A. If you have any questions. Make sure you join the Master Money Newsletter by going to master money.co/newsletter.

And don't forget to follow us on Apple Podcast, Spotify, YouTube, or whatever your favorite podcast player is. And if you're getting value outta the show, consider leaving a five star rating and review on Apple Podcast, Spotify, or your favorite podcast player. And if you wanna follow along on YouTube, it's just my name, androgen Cola.

And if you search that, you will see all of the episodes pop up. On YouTube there and you can follow along with our outlines and some of the stuff that we are talking about on YouTube. So highly, highly recommend you check it out there too as well. Now, today we're gonna be diving into can you achieve financial independence with only stocks?

And a bunch more of your questions like, can you discuss life insurance options and what to get? How do get a leadership job? Without internship experience, what is the best way to navigate and pay off student loans? Should I sell my rental to pay off my 6.5% primary mortgage? That's a big one. Can you achieve financial independence with only stocks, or do you need real estate?

One person is getting a $220,000 inheritance and wondering what to do with it. How to have conversations with your partner about finances and the best points credit card for a wedding and travel hacking. So this is an action packed money q and a. It's more so a rapid fire money q and a. So we're gonna dive into each of these questions without further ado.

Let's get into it. Alright, so the first question is, I am a contract worker and I don't know what to do. My salary is not deducted for retirement. What should I do when it comes to retirement accounts? So if you are someone out there who is a contracted worker and you don't get access to traditional 401k.

If you don't get access to a traditional 401k, still wanna build for retirement, you have a number of different options. First is you can start with an IRA. So if you want to get something whereas a pre-tax deduction, then you can look at something like an IRA or a Roth IRA. Both of those are great places to start.

Uh, Roth or traditional is depending on your income in tax bracket, but those are a great place where anybody can open an IRA or a Roth IRH. Depends on your income limits, those types of things. But if you are looking for option one, that is the first place I'd look. Secondly. If you are self-employed, let's say for example they pay you into an LLC and you are a contract worker, you have an LLC where all of your clients pay you into that one location, then you can look at something like a solo 401k.

In fact, the solo 401k for solopreneurs or people who work by themselves is one of the most powerful accounts out there because you can contribute as the employee. And the employer, so you can get a lot more money into your solo 401k. So in 2025 alone, if you are under the age of 50, the total combined limit for those under the age of 50 is $70,000 that you can get in this account, and 77,500 for those between ages 50 to 59.

And if you're between the ages of 60 and 63, you can contribute up to. $81,250 into the solo 401k. So this is a very powerful account because you can be the employee and the employer and this can drastically increase the amount that you get into some of these accounts. Very, very powerful account, uh, to get started with.

So if you are someone who has an LLC and you're contractor and they're paying you into that LLCI would highly recommend at least looking into that and doing your research on that, uh, so that you can see if that would be a good fit for you. Then I would automate all my contributions monthly, making sure those are automatically going into those accounts.

And then keeping track of expenses too, because you're gonna deduct the business costs to lower your taxable income if you utilize something like this. So because you're flying solo, if you are flying solo, you have more flexibility, but you're also just gonna have more responsibility. So you wanna treat your retirement like a business expense.

And so it's really, really important to do that. So those are some of the options you have. You can look at an IRA, you can look at a solo 401k. Some of those are some of the easy ones to get started with. Can you discuss life insurance options and what to get? Yes. So this is something where we have a couple of episodes on this, but I'm gonna talk through some of the options that are available and what you can do based on those options.

So life insurance is actually pretty simple. There are a lot of complicated life insurance products out there. You may hear things like infinite banking. You may hear an IUL, which a lot of people on TikTok try to pedal I ls. You may hear someone say something like Whole life and all of these different policies may fit certain criteria, but for most of them, including an IUL or Universal Life, those are ones that I would avoid at all costs.

The fees are way too high, and typically you're lining someone else's pocket by investing in those. What do I mean by that? When you invest in some of these policies, you are paying sometimes 10 times more than what you would pay for, for just traditional. Term life insurance, which is what I have personally, and which is what everyone that I talk to who is in my circle, who asks me what should I do about life insurance.

Term life insurance is always the thing that I look for. So term life insurance is something that you can go out and get in. The way that it works is, let's say for example, that you're 30 years old. Well, if you're 30 years old and you wanna have life insurance up to the age of 60 for the next 30 years, you can buy.

Term life insurance for that term for 30 years, and you'll have coverage throughout that timeframe. Now, the idea behind this is that during that timeframe, you're also going to be building up wealth. So you're not gonna need life insurance after the age of 60 because you're gonna have retirement accounts that are fully funded that can cover your lifestyle and take care of your family at the same time.

And so term insurance, because it has this caveat where it terms when most people don't die before the age of 60. And so it terms because of that. This makes this type of insurance much cheaper. So it covers you when you need it, but then when you don't need coverage anymore, you don't have to make massive payments throughout the rest of your life to make sure somebody gets your life insurance benefit.

And so this is why I love term insurance 'cause it's so much cheaper. So for example. Sometimes life is gonna change and you're gonna reevaluate your insurance situation. So my wife and I were just looking at our estate plan, for example, and we wanted to make sure that whoever inherited our kids, like if my wife and I went on vacation, we got a plane accident and we both didn't make it.

Well, if we both didn't make it at the same time, who is gonna take our kids? So we identified who is gonna take our kids, and then from there we tried to identify, okay, well how are they gonna take care of our kids and deal with the financial responsibility of that? Well, we're gonna have some finances obviously in place for them, but in addition, if we get the right term life insurance policies, we can ensure that whoever takes care of our kids is covered by that term insurance.

It's gonna cover all the expenses. Then our money that we worked hard to build and grow over time can then go to our kids when they come of age in addition to some other things that'll be in the trust. And so we reevaluated how we looked at this and increased the amount of term coverage that we had.

And we went with PolicyGenius, which I highly recommend PolicyGenius. They are who I've gotten all my term insurance from. And they just make it super, super easy when you do this. And so usually you're gonna go out there and you're gonna just fill out some forms and usually. People will ask me, well, how much term insurance do I need?

Typically, my rule is anywhere from eight to 12 times your income. Uh, for me, I'm like right in the middle. I always get 10 times the income typically. And that usually is enough to be a okay if you have a super high income and you're like, well, they're not gonna need as much income if I didn't make it, uh, then that could be something where you reduce it a little bit or just figure out how much coverage is needed in order for them to get through the situation that arises.

And so overall term coverage is a great, great place. To get that started. So highly recommend PolicyGenius. I would check 'em out. LinkedIn, uh, they're also a sponsor of this podcast, but they're a sponsor of this podcast 'cause I use them. And so really, really great place, uh, to protect your loved ones. And again, insurance is not an investment.

If somebody is pitching you life insurance as an investment run, that is not the direction that you wanna be going in, in my opinion. The next question is, how do I get a leadership job without internship experience? This is a good question. Um, I think that there is a lot of things that you need to be doing in college outside of just going to class, making sure you get good grades.

In fact, your grades matter a lot less than what I'm about to tell you matters. I. In the long run when it comes to the real world. And so the biggest thing that you need to do is as you start going through college and as you get to the end of college, is a, you need to make sure that you are networking.

Now, one big way to network is obviously those internships. If you don't have internship experience, you're gonna have to start networking at a bunch of different events. Meaning that, what career path do you wanna take and what are some events surrounding that career path? Maybe there are career fairs out there.

We definitely need to go to those, even if it has a bunch of different careers there and start having conversations with people. But secondarily, you need to start networking at different events with. In the industry that you are targeting. So if you want to become an engineer, then what are some events that a bunch of engineers go to in order to learn more about their craft?

Are there events out there that you can go to, conferences or whatever else where you can start to meet people, shake hands, start chatting with people and starting conversations? This is a very important thing that you need to be doing. Because conferences, I cannot tell you. At first, I was anti conference and I was the person that was like, ah, what's the point of that?

But every time I go to a conference, I meet really valuable connections that become lifelong friends, but also lifelong contacts that we provide value to each other. And so this could be something where you can go and meet. Really cool people that are gonna help you find a job. They're gonna help you with entry-level roles.

They're gonna help you land at different firms if you're continuing on, uh, the engineering example, and they're gonna help you do a bunch of different things. Also, are there events where people in your industry go to volunteer? If there are, go out there and see if you can help and volunteer. Join clubs, join local nonprofits, look for side projects for some of those engineering firms.

Are there things that they hire out? Just contract labor. Can you work with contract labor? Now networking is, I cannot stress how important networking is. 70% of jobs now are landed via networking, and so you need to make sure that you are networking, networking, networking. I personally know for a fact I don't network enough.

This is something I'm continuously trying to work on. I need to network more. Everybody listening to this podcast needs to network more. The more people you know, the better off you will be in the long run, especially if you actually have valuable relationships with those folks. And then tailor your resume with leadership skills, not just titles.

So talk through problem solving, team coordination and all that kind of stuff. I know there's a lot of AI generated resume stuff out there. You can tailor it towards some of the specific things that you're thinking through. But it's really, really important to make sure that you're kind of thinking through this.

Networking, networking, networking. You're gonna have to meet more people. That is the only way to really get a leadership role without that internship experience. Now, entry level jobs, if you get into one the correct way, if you can't get a leadership role, is gonna help you. As long as there's room for growth, it's gonna help you tremendously in the long run too.

Especially if you take a job where you can learn a ton from somebody in the industry. Uh, so let's say for example, that you wanted to get into social media marketing. Well, if you wanted to get into social media marketing and. Gary V was out there looking for a, an assistant to help him with something.

Maybe it's not exactly what you wanna be doing, but if you become Gary v's assistant, you're gonna learn social media marketing and marketing very, very quickly because you went and were the assistant of someone who was some of the best in the game at this thing. So that is something I think you need to make sure that you understand, is that it's not always just about the titles, it's also just making sure that you find an avenue where you can learn a ton and then grow from there.

Number four, what is the best way to navigate paying off student loans? Alright, so first thing we're gonna do is we'll have an entire episode coming out on this topic because it's changed a lot since the last time I've done an episode. Last time I did an episode on this was probably two or three years ago.

Uh, so we are probably due for a new student loan episode because a lot of rules, a lot of regulations have changed from administration to administration. And so a lot of things are shifting. A lot of Americans are struggling with this, and so it's very, very important that we talk through this. I'm gonna give you a bird's eye view of kind of some of the things I would think through, but at the same time, again, know that we will be doing a full blown episode on this, uh, in the coming months.

First, I want you to start with clarity. So I want you to log into student aid.gov and understand your loan types. I want you to understand your interest rates. I want you to write this down and I want you to understand your loan servicer. You need to know what the heck you're dealing with here. If you don't know what you're dealing with, you are blind to what actions you need to be taking because if you have a high interest student loan, for example, if it's above a 6% interest rate, then I think you're dealing with something that you really need to make sure that you were taken care of.

If you have a lower interest rate, then you can make the minimum payments and kind of carry on going forward for a little while until you decide exactly what you wanna do with those student loans. Now, if you are struggling. Or you have low income to pay off that student loan. You can look at something like an income driven repayment plan, meaning you can get your payments reduced if your income is low.

So you can look into that. Uh, when you log into student aid.gov, there's gonna be some information on how to do that. If you work in public service, you can look into PS LF, which can help you get your loans forgiven after 10 years if you are not eligible for forgiveness. You can look into one of two options.

You can do the debt snowball or the debt wrecking ball, which is the debt avalanche. Same thing. The debt snowball means you order your student loans in order of balance, not interest rate, but of balance. And so lowest balance first, all the way to highest balance, and you pay off the lowest balance first.

Then you go to the next one, then you go to the next one. The debt avalanche is the reversed order, which is the mathematically fastest way to pay it off, but psychologically, the debt snowball is proven by tons of studies to be the way that most people actually stick with it and pay their debt off. And so with the debt avalanche, what you're doing is you're going highest interest rate.

To lowest interest rate in paying it off in that order. So that is the two options that you have for me. I'd probably do the debt snowball just for motivation. You know, you get the smallest balance, boom, that one's paid off one after another. Now if you only have one big giant student loan, then you're just gonna have one to attack.

Um, and so that changes everything. Also, if you have a really high interest rate, consider and see if you can refinance in some way, shape, or form, but only if you have stable income and don't need forgiveness options because once you refinance these. You can lose your forgiveness options down the line if you need some forgiveness options.

So just making sure that you think through that. Uh, but the plan depends on your goals. In that episode, I'm gonna kind of dive into all these different avenues and how to approach each of these avenues 'cause it's a bigger question overall. But I wanted to give you just some quick tips, uh, before that episode comes out.

Alright. Question number five is, should I sell my rental to pay off my 6.5% primary mortgage? Now, with this, it depends on a couple different factors. Now, number one. For the most part, I would not sell my rental to pay off my 6.5% primary mortgage. That rental, if it's an asset and if it's cash flowing, then it's probably not something I would sell.

When it comes to your mortgage, if your mortgage is slightly in that high interest debt range, it's not something that I am. Really quick to pay off because eventually you'll be able to probably refinance the mortgage, uh, long term. So when it comes to high interest debt, yes, your mortgage can fall into that high interest debt category.

But at the same time, this is the only caveat to that because it is not one that I would just race to pay off as fast as possible. Your mortgage is the only outlier that I would say that with. The reason is because it would take you years and years and years and years and years to pay that off. You would not reap the benefits of compound interest when it comes to investing your dollars long term.

But in addition, again, you could refinance your mortgage down the line, get a lower interest rate once those rates drop. And so that's the way I would kind of think about this. Now, if you don't wanna be in real estate anymore and you're like, I'm gonna sell this house and this rental property, and I wanna allocate those dollars somewhere else.

There's a couple of things that you can do. Again, you still don't have to go, you know, all in on your mortgage. What you could do is either take those dollars and invest them and, or, you know, index funds, ETFs, put 'em in retirement accounts, that type of stuff. But I probably would not pay off the mortgage.

I would just try to refinance it When rates drop. Now we don't know when rates are gonna drop. That's the risk that you have to take. Um, we have no idea when that's gonna happen, but for me, I would kind of wait till those rates drop, refinance, if I can get in the four. Four range, somewhere in the, around there, four and a half maybe.

And hope that, you know, this will make an impact. Honestly, you can also continue to refinance a few times if the numbers make sense. So if you get good at running the numbers on refinancing and what those closing costs are gonna be, uh, then you can refinance, you know, every percentage point or so. And just looking at the basis points and saying to yourself, okay, well I can look and I can refinance and it will still be, I'll still be better off than what the closing costs are currently costing me.

So, uh, couple of things to do there, but the point is, run the numbers and look at it. I would not probably sell a rental to pay off a 6.5% primary mortgage if it's cash flowing. So if it's a cash flowing asset, that's probably not something I would personally do, uh, if I were in your situation. Number six is can you achieve financial independence with only stocks or do you need a real estate?

Well, this is a really, really good question and there are countless examples of folks who have achieved financial independence only. With stocks and not with real estate. I'm gonna give you some examples and some things that you can actually use as motivation. Um, and then I'll explain it all after. So some examples are if you read the book, the Simple Path to Wealth, that is JL Collins.

He goes through exactly how he did it with only stocks and he actually bought just one index fund and that was it. Mr. Money Mustache is another great example of somebody who has done it, who lives a very frugal lifestyle, but it is a very interesting way. To think about it, you can read the book like Your Money or Your Life.

There's a ton of books out there that talk about this, but you can definitely achieve financial independence. You don't need to do, be a real estate investor in order to do that. So index in fund investors are gonna follow the 4% rule. So with real estate, what you do is you figure out how much cash flow you need to replace, how much money you need to make every single month.

With index funds and ETFs, we utilize something called the 4% rule, meaning that you build a portfolio up where you can draw down 4% of that portfolio every single year, and then you adjust for inflation there. After. And so say for example, you wanna spend a $80,000 per year, well, what do you need to draw down 4% up to get $80,000 per year, it's gonna be 2 million bucks.

So you can divide $2 million by that 4%, or you can look at $2 million and you could say, Hey, I need to draw down 4% every single year, and that's $80,000 per year. And so you could do the math that way, or you could just use the 25 x rule, which I always talk about, which is the simple way to get there in the reverse order.

Meaning that if you wanna spend, you know, a hundred thousand bucks a year. And you multiply that by 25, that's $2.5 million need to be invested in order to draw down every single year. And so you'll need to build up 25 times your annual expenses, whatever that number is. You identify how much you wanna spend in retirement.

You need to build up 25 times those annual expenses and then go from there. Now real estate isn't required, but also offers cash flow and diversification. So if you wanted to add real estate, you could, but it just is not something that is required whatsoever. You can just do it with one, you could do it with the other.

And it just depends on running the numbers and making sure the math. Works. If you don't wanna manage tenants, if you don't wanna manage toilets, if you don't wanna deal with, you know, replacing a bunch of roofs or any of that kind of stuff, then I would go with, you know, investing in stocks. It's a much easier route to go.

But if you do like that stuff and you enjoy having a tangible asset that you can see and feel and go to and you like managing the. Business of real estate, then that might be something where you can have a hybrid method. I go hybrid. Uh, I like to have both, but some people are not made for real estate. I could tell you that right now.

It's not fun for some people to have to get calls on tenants and toilets and all that kind of stuff, replacing tenants, those types of things. So the key point is to choose the vehicle that kind of fits your personality, that you're, you enjoy more. Uh, for most people, that's gonna be stocks, bonds, real estate.

You have to have more knowledge and you have to have an understanding of how to run the numbers. And so, by the way, if you wanna invest in real estate. We have a rental property calculator, uh, that we offer. I think it's 19 bucks. That's how I run all my numbers. We have an entire episode on it, but if you're interested in that, you can check that out.

Alright, so the next thing I wanna talk about before we jump into the next question is there was a massive data breach that exposed 184 million plain text passwords for Google, Microsoft, Facebook, and more. So if you haven't heard this story, we actually reported this story originally on our other.

Podcast called The Business Show, which is like Daily Market and finance news. And on that show we talked about this major cybersecurity incident that exposed more than 184 user credentials, uh, including passwords and emails from platforms like Google, Microsoft, Facebook. Apple, Instagram, Snapchat, and even financial and government services.

Now, this is a really important one because so many people were impacted. 184 million user credentials means that it could be up to half. The entire country was impacted by this one. So this was discovered by a cybersecurity researcher. And he found the data sitting on an unprotected file online, entirely unencrypted without password protection or anything like that, and stored in a single plain text file.

Now, it included usernames, it included addresses, login URLs, passwords for both mainstream tech platforms and critical services such as banking and healthcare portals. So. He also went in and he verified the identity of the breach and he started to call a couple of people that were on that list and they said, yeah, these are my credentials.

And he went through and kind of randomly was calling a bunch of different people there. And it suggests the file is reasonable and actionable. So this is a big deal and we report on these all the time because you need to know. But this is a really big deal for a number of different reasons. A, if you have passwords.

That you are using, like, Hey, it's my dog, Fido 2, 3, 4, 7. Like a very easy to identify password and you have it for multiple different websites. You need to change that plan. That needs to completely change right now because this is happening more and more and more, and you're gonna have to use those really unique passwords.

Like if you use Google passwords or if you use one password or whatever else, you need to make sure you're using a very unique password for each website now individually. I know it's annoying to have to keep track of, but that's why you use tools to help you keep track of it. Secondly, because they got this information, so they got this information, usernames, email addresses, login URLs and passwords from all these different platforms.

So if you think about like Google, like if you have a Gmail account, you could be compromised. If you have an Instagram account, you could be compromised all these different places. If that's the case and they just get a piece of your information, all they have to do. Find the rest of your information online in order for you to be dramatically compromised.

Meaning they can go to a different data broker and they could say to them, Hey, do you know any more information about this person? Can I buy it off of you? And these data brokers can sell your personal information to folks on the internet who get access to stuff like this. And what happens is once they get the rest of your information, now they can open bank accounts in your name.

Now they can open credit cards in your name. Now they can open student loans in your name. And this causes a massive problem. And so when that happens, I highly recommend that you utilize a service called Delete Me. So delete me as a service that removes your personal information online from all of these data brokers so that you are way less likely to get compromised if something like this happens to you.

184 million different usernames is not a joke here. The likelihood of your name being in there is much higher than some other data breaches out there. So making sure you button this up. Use unique passwords. Use a service like Delete me if you go to join delete me.com/pfp 20. You get 20% off their plans there.

I've been using Delete Me for years and they removed my personal information from thousands of different websites. If you don't use Delete Me, it's gonna take you hours and hours and hours to get that information removed. So I highly recommend them as. They save you time. It is not expensive at all, in my opinion, and so I would highly recommend you use Delete Me.

It is one of the best services out there. Also, when this kind of stuff happens, you need to make sure that you're informed and you need to make sure A, do I have the right plan in place if this was going to happen. Again, if you don't make some changes, make some shifts. Sometimes your protection plan online is just a gradual shift over time, and so making sure you make some of these changes and making some of the shifts can be very, very powerful.

We have episodes talking about how to have a protection plan online, but I just wanted to keep bringing that up. As these come up. The next one is my girlfriend is getting $220,000 upfront at age 23. She's debt-free, lives at home. What should she do? Well, first of all, this is a huge opportunity to make sure you do the right thing when you are that young.

$220,000 can go really, really far. Okay. Let's just have a fun little game of how far can these dollars go? Let's say, for example, that she took this 220. Thousand dollars and put it into an investment with a 8% rate of return. We're gonna, ah, let's go 10 because it makes all the haters mad. Google Yes. And P 500 historic returns.

That's what you're gonna get. Let's just do a 10% rate of return, then I'll do an 8% rate of return for the haters. All right? And so what we're gonna do is she's 23, if she invested this money for 37 years, so she wanted to keep it until she's age of 60. She wanted to invest those dollars over time, 37 years, and she didn't contribute another dollar to it, okay?

If she had that money invested. Compound nutrition is so cool. She would have seven million four hundred eighty thousand eight hundred and sixty eight thousand dollars, almost $7.5 million. Okay? That's at a 10% rate of return. Let's drop it to 8%. This is why that number is really important. $3.7 million at an 8% rate of return.

That's the difference between those two. When your retirement planning always be conservative with your rate of return. Uh, really, really important. But I do look at the historic rate of return and I'm like, well, let's see what the 10% is always, because I wanna know. Because that's what the s and p 500 has done for the last few decades.

And so it's really important to at least look at what's the possibility of this. Now, if she started to add $400 every single month, all of a sudden it goes to $9.1 million at a 10% rate of return, and at at an 8% rate of return, it goes to $4.8 million. A big difference on that 8% rate of return, it's almost a million dollar difference.

It's obviously a drastic difference on 10 too, but it's gonna be a big difference on how you can retire. So this is a huge windfall for a lot of folks. Now, let's just look at, let's just say she got a good job and she's really good with her finances and decided, okay, I'm gonna start investing a thousand dollars a month in the same account.

Well over 37 years. At that 8% rate of return, she'd gets 6.3 million, and at a 10% rate of return, she'd get $11.6 million just from investing an additional thousand. Now, let's say for example, she's like, eh, I don't wanna retire yet. I like my job. I'm gonna go 45 years. Well, that would. This is the crazy part.

If you just increase the time horizon, a thousand dollars a month with a 10% rate of return over the course of 45 years is $25 million. So that's where on, you're on the precipice of just making a drastic difference with just a couple more years if you invest these dollars. I'm saying all this to say first I love doing the numbers and just running the math on some of that stuff 'cause I'm a nerd about that.

But I'm saying all this to say, this is a huge opportunity and this is why it's a huge opportunity. Now, here's what I would do in your shoes. A. You're gonna do your own research. None of this is advice. I'm just telling you what I would do in your shoes. If I had $0 and I was starting from the beginning, a, I would follow the 1 3 6 method, which you can go to all the way up to six, and I would make sure I have an emergency fund in place for life.

Life matters to have protection there. And so I'd make sure I have six months of expenses there. Now she doesn't have that many expenses, so you could set aside 15 to 20,000 bucks in a high yield savings account because you don't pay rent currently. Uh, so that's one. Two, the Roth IRA is a very powerful place to put dollars when you're young.

Especially if you don't make a lot of money. Now, maybe you do make a lot of money, but if you don't make a lot of money, it's a very powerful place to watch your dollars grow, completely tax free, because your time horizon is so long, the majority of your growth is going to be tax free dollars. In fact, if you look at the numbers I was just running, let's see if I still have it here.

If you're looking at the numbers, I was just running. If you got to that $25 million balance over the course of 45 years, you would've contributed 540,020 $4 million would be completely tax free. If that was in a Roth, IRA, for example, now you can't get $220,000 in a Roth IRA all at once. But in that example, over time, you'd have a massive amount of money, is what I'm saying, invested into something like a Roth IRA, and a massive amount of it could be completely tax free.

So just thinking through that. Over time. Obviously you can't get that much in a Roth IRA for that scenario. You'd have to do some other things, which we've talked about in past episodes, but that's just an example. If you put 'em, let's say your Roth IRA grew to a million dollars, typically over the course of 30 years, we've used this example a number of times.

About 880,000 of that is going to be completely tax free. So it's really cool what you could do with a Roth IRA. Also, I would look at opening, if you have a 401k at your work, you could do that. Or, uh, if you run a business or something else, you can look at a traditional IRA. If you don't, you could open a traditional brokerage account, uh, and start investing the rest of the money there and, uh, growing that money over time.

And then you could also make sure that you have a written out investment plan. So if I were you, since you're so young, you can even talk to like a certified financial planner, but get a written plan, a fee only planner. Where you get a written plan where they're not taking a percentage of your assets under management and they put a plan together for you that's gonna help you grow this money to, based on your risk tolerance and all those different things.

And then don't rush into any big purchases. You know, doing things like buying a house at this age when you don't really know what you're gonna be doing with your life yet, or. Going out there and, you know, spending this money on stuff that will not matter in the long run is a very expensive mistake when it comes to compound interest.

You are so young and these dollars are so valuable that it is incredibly powerful. So if you haven't check this out yet, so if you go to master money.co/. Resources. We have something called the Wealth Builders Matrix, and in the Wealth Builders Matrix, it's a resource that shows you here is how much your dollars are worth based on how old you are and how long your time Horizon is, and it is a really cool resource to show every single dollar that you invest over time.

How much it's gonna be worth. And I love utilizing that resource. A lot of people like it too. So that's how I would think about this money is I would make sure that you are really careful how you use this. If I were in your shoes, I probably wouldn't spend any of it and I would keep all of it, uh, for future me, because it is so incredibly powerful what you could do with these dollars.

So that's how I would think about it. But just let me know if you have any other questions on that. How do you have a conversation with your partner about finances? So this is a really good question and you are in luck because the episode before this one came out, we did an entire episode on this, on like the ultimate guide on how to do this.

So if you go to master money.co/resources, you can get the resource on, uh, us talking through that. But at the same time, uh, what I want you to do is I'm gonna give you a quick bird's eye view of some of the stuff we chatted about in that episode so that you can, you know, get a starting point first.

We're not gonna open up with this conversation when we start to chat about this with, we need a budget. We need to make sure that we are tightening up. We need to cut back on our expenses. We need, we need, we need instead. Here's how I want the conversation to go. What do you want our life to look like in the next five years?

Start to dream about what you want life to look like, and here's why. Money is a tool, and money is a tool to get what you want out of life. For some people who put their money in retirement accounts, you know what they're saying with those dollars? They're saying, I want to be able to have financial freedom.

That's what they're saying with their dollars. You vote with your dollars with which what you want to do in life. If you say, I wanna put this into a designer handbag, you are sacrificing more hours that you have to work in order to buy that handbag. If you say, I want to go out and buy this brand new car, you are saying, I am willing to sacrifice more time, more energy, and more of my work.

In order to buy this depreciating asset. Which is a car. If you say, I wanna take my dollars and invest in real estate, you're saying, I wanna accelerate my path to financial freedom, invest in real estate. If you are saying, I want to spend more money on a vacation, you're saying I value the time spent with family and friends, and I want to spend more time and more money and energy.

On that. Do you see how your spending decisions are gonna dictate what you're really voting for? You're voting in life with your dollars, and so where your dollars flow and where your dollars go means that you are voting for a very specific thing. And so at the same time as you start to think about this, you say to your partner, where do we wanna be in five years from now?

Because this is gonna allow you both to dream together. This is gonna allow you both to have a conversation. Maybe it's, I wanna buy a house. I wanna have roots down and I wanna go out and buy a house, and I wanna be able to buy a nicer house than the one that we're in right now. Or maybe it's like, Hey, I want to have a little more time to spend with the kids, and I wanna have the flexibility to be able to reduce my workload so I could spend more time with the kids.

Or maybe you want to go on more vacations, or you wanna make sure that you're getting more in retirement accounts, or you wanna be debt free, whatever that is. Where do you wanna be in five years? Think about that first. What does your dream life look like? Okay, that's where you're starting. Then you wanna start to talk through your income.

Your debts, your spending habits in the episode we just had before this one, we talk through all the questions to ask with your partner. I highly encourage, if you're just starting off with this, to use a money date, meaning, you know, a 30 minute date every month to kind of talk through money and finances.

But always start it with dreaming about stuff. Always start it with the end goal in mind, because this is gonna help you get on the same page. There's no pointing fingers, there's no saying you did this or you did that. This is coming from a place that you both are on the same team and the same page. I truly believe that money talk should be about dreams and not spreadsheets.

And so making sure that it's a team effort is the most important thing. So congrats on even thinking about that. That's awesome. Uh, let me know if you have any other questions though. What is the Best Points Credit card for Wedding Plus travel hacking? Ooh, this is a good one. So if you guys don't know already, if you go to the personal finance podcast.com, we have a little icon at the top that says Best Credit Cards.

That is my credit card icon that will help you with all my favorite credit cards. It's Affiliate link. Yes, but it is, uh, all my favorite credit cards are out there, but we're gonna talk through some of these that I think are pretty good. So my Daily Driver, which is in my wallet right now, is the Chase Sapphire Preferred.

I've had it for a long time, and it is one. That has given me tremendous amount of benefits. I have a lot of Chase business cards and so having the preferred helps me kind of combine all those points into one so that I can utilize those four trips and Chase's Travel portal is absolutely fantastic, so that is a great one to look at.

Another really, really good one is the Amex Gold. So the Amex Gold card gets you four x on restaurants and has some great transfer partners as well. Having the flexibility is really powerful and so Amex has some great transfer partners. Chase has the best transfer partners in my opinion. Um, capital One is pretty good too 'cause they're flexible points.

So you can look at the venture, something like that. Uh, we have all those on our sites and you can kind of read through the differences and compare them. Uh, but those are some of the ones that I would start with. The Chase Sapphires a great starting point. The Amex Gold is a great starting point. The Capital One venture is another great starting point.

And then obviously never carry a balance, always paid off in full. We actually have an episode, uh, that we did, uh, recently about all of our credit card rules. Um, and that's a really good place to go there as well. But I would stack bonuses during major life events and you can travel for free on your honeymoon if you do that.

So really, really good stuff there. If you are looking for some of the big opportunities. Then looking at which one has the best signup bonus currently can also help you a lot in terms of how far you can stretch those points and those dollars. So we'll have a updated travel hacking, uh, episode. Chris Hutchins from all the hacks is gonna come back on here too.

We're gonna chat about some more optimized credit card stuff. He goes deep in the weeds. Um, so get ready for that one. It's gonna be a fun one. So, uh, without further ado that. Is the last question that we have for today. If you guys have any questions, make sure you join the Master Money Newsletter by going to master money.co/newsletter.

And don't forget to follow us on Apple Podcast, Spotify, YouTube, androgen cola on YouTube, or whatever your favorite podcast player is, and share this episode with a family member, friend, coworker, whoever you think would get value outta this episode. Can I thank you guys enough for being here? I truly appreciate each and every single one of you, and we will see you.

On the next episode.