Boomer Parents: It's Time to Cough it Up

Show me your bracelets. Yeah!

Yes. That is excellent. Love that. So good. Thank you. So you are looking for a way to accumulate wealth, to make money, but you're not that into the whole stock-market thing. Now, can I give you the good and the bad news about the way you just laid out your thesis? The good news is you're sort of right. Nobody knows how to pick stocks. It's not because of computers. It's so great. It's just because you can buy an index fund and be a participant in stocks going up without having to pick something that is better than another thing. So the good news is that you absolutely have the stock market available to you. The bad news is that there probably isn't a better way to start accumulating wealth. So, Mark, what about Toby's penchant for sterling silver jewelry, as a wealth accumulation? As a wealth accumulation, a little bit, if that's what floats his boat. Yeah, sure. Yeah. OK, so when we say a little bit, this is a funny question because we're talking to you the week of the SpaceX IPO. So we're getting tons of people who are asking us, should I buy this? Should I buy this? So that's the ultimate in stock picking, right? And you say to yourself, well, I want in on this. So on one hand I say like, OK, well, you don't really need to do that. It's going to end up in an index fund. Fine. But if you wanted to do that, what I say is that any individual investment, anything-- like if you said it was silver futures, silver jewelry, crypto. Your best friend is starting a business, and you want to invest in it. I would say that if you keep the investment to that single idea, 5% to 10% of your invested assets, then you're fine. But if you're wrong, if all of a sudden you're wrong-- let's say, Toby, you're like, OK, I have $10,000 to invest in sterling silver jewelry. I have $100,000 or $150,000 that's invested. I'm going to take $10,000 and I'm going to use that as an investment. Then if the price of silver goes down dramatically and it even gets cut in half-- I was a commodities trader. It was my first job on Wall Street. So I've seen silver go up and down. If you're wrong and the whole thing moves against you, no big deal. But, Mark, what about the upside? The upside is there's a lot of upside. I was going to say, though, I do feel like we find this a lot with newish investors. We say, just buy an index fund.

It sounds boring. It sounds so boring. You're not picking the next hot stock, right? But, really, boring does truly work in this game. Toby, I think you are on your way. I feel comfortable. Just know that owning an index fund inside of your retirement account, that's great. This is a little icing on the cake. So let's try to make sure you get where you want to go. And if you have any more questions, anything else comes up and you want to gloat to us when silver goes to $10,000, you come back on the air and you say, you idiots. I should have done more than $10,000. OK? All right Stay tuned. Exactly. I love this question, especially because I had a step-grandmother, Mark-- you don't even know this-- my grandfather's second wife, who escaped when the Nazis were marching into the Hungarian village she lived in. Her mother handed her like a stack of gold jewelry. And so her whole life, all she wanted was to make sure she had her gold jewelry. It saved her life. Now, I know Toby's not talking about saving his life, but I think a lot of people love the idea of a tangible asset, something they can hold, they can see. It's a house or real estate. It's a precious metal. It's sterling silver. This satisfies this emotional anxiety around sometimes investing in something that feels very far from you. Yeah, sometimes people, especially newish investors, they don't really trust the stock market. They think the stock market is rigged against them. It's only for the rich, the wealthy, and they're just going to lose out. So I get it. I do get it. Today, Mark, we have Dave, who is joining us from the Nutmeg State. That is Connecticut. I'm very proud that I knew that. Hello, Dave. How are you? Doing great. What's going on, and what can we do for you? So me and my partner, we're both very enthusiastic listeners to the show. And we were just-- it's very important for us to have your blessing. Both of us have been working towards FIRE. We're not necessarily subscribed to the idea of retiring permanently, but we just kind of want to get a sense of what number would we need to hit in order to work if we wanted to. OK, Mark, do you want to just give them the number right now without knowing anything else? Yeah. All right, everyone, remember when FIRE was a thing? That is Financial Independence, Retire Early. Mark, do you remember the FIRE people that we interviewed? Vividly. Vividly. They came into a studio-- we're in the CBS News Broadcast Center, but we were downstairs in a much nastier studio. And these people came in, and they told us they had a million bucks, and they were traveling the world. And they were how old? 35? If that. If that. Maybe they were in their early 30s, and they had $1 million. And I said, that's it? I was shocked. The reason they were in studio, she had just written a book about the FIRE movement and retiring on basically $30,000 a year. And then they were going to travel the world. I said, well, what do you do with all your stuff? And she goes, it's right here. She pointed to a bag in the corner. And Mark said, oh, no, I can't do that. No. No. OK. So, Dave, how much do we-- so, listen, when you're thinking about any of these questions-- when I can retire. How can I make a different decision about my career? The biggest variable is, how much money do you spend? So you and your partner, do you have a big, fat lifestyle that we're trying to save for or what? So right now, our expenses-- and we've tracked them over the last few years-- land somewhere around $90,000. And so we would also estimate, obviously, without an employer health insurance plan, probably another $10,000. on top. Right. So we need to get you $100,000 a year. So how much money have you guys saved already in retirement versus nonretirement assets? Within the 401(k), in pretax dollars, we have $572,000. In the Roth portion of the 401(k), we have $231,000. With the 403(b) that my partner has, $30,000 there, and that's all pretax. And then outside of the employer plan, we have Roth IRAs with a bucket of cash in them, and that's about $178,000, an HSA with $73,000. And then the bridge account, which we say is the brokerage, that is at $1.469-- Holy smokes. Let's say $1 and 1/2 million. How old are you guys? Yeah, how old are you guys? So I am 40, and she is 36. What is the goal here, though? Let's just think about this. Are you working in a job that you hate? Are you thinking like, I want to do something different? When you're this age, if you're this young, my real question is, are you miserable doing what you're doing? So I really do enjoy the work. I enjoy working with my clients. And in that respect, the job is really fulfilling. It's just unfortunate because with my expertise, basically, I need to commute into the major cities. And so my commute is a bit of a bear. It's about 2 and 1/2 hours right now. You mean round trip or not each way? So each way. What? And so I think that's part of the challenge is, right now, I basically commute up. I rent a place, work during the week. And then, really, my time to live is on the weekends. And I think there's kind of this antsiness I feel in terms of transitioning to something where I can have a bit of a social life during the week. Yeah. I think you're very close. Here's what I'm hearing from you. We talk to people who are much older than you are, but they are voicing the same thing, which is, hey, I am working my ass off. Either my commute or the work itself is insane. And I don't know if I want to live my life keeping up this pace. Now, Mark and I come from more cut from the same cloth, which was we never questioned these things. No. We're just dopes. I mean, this is when people say to me, there's a difference in the generations. I'm like, yes, they are smarter than we are because we gave our entire lives over to our careers, and you can't get that time back, Mark. You just can't. No. I mean, there's something to be said for quality of life. You can just hear it in his voice. It's a struggle for him right now. I'm sure he loves making the money. He loves saving the money. But at some point, he wants to pull it back and get his life back. So what's the time frame? Yeah, well, how long do we have to get you out of this hellhole commute? So I would say-- I'm trying to think-- 12 days?

I could probably do it-- [LAUGHTER] Yesterday, you know? No, I mean, realistically speaking, I could probably keep this up for two to three years. But could you do something like-- OK, now that you have this chunk of money-- you've done this hard work of saving. Is it possible that you could transition into something else where you would make less money but have an easier commute and have similar level of fulfillment professionally but not kill yourself? Yeah, for sure. And I think downshifting to something-- variety is the spice of life. I think there's a lot of things that you could pursue in life that are interesting. So I think the question would be, can I find that thing and also sustain us? I mean, you've done the heavy lift. Absolutely. You've given yourself the opportunity to make a decision here. I'm going to give you the Aunt Jill blessing, the Jewish girl papal blessing of, you know what? You've killed it. You two are on your way to go wherever you want to go. So do you need a permission structure to do this? You've given it to yourself. And everyone else listening, you don't need $2 and 1/2 million to get here, but the reality is the whole point of saving money early is to give yourself these opportunities, Mark. I mean, this is the freedom that people are hoping for. And, in fact, if I may be so bold, it's kind of what allowed you to walk away from a standard 9:00 to 5:00 or 5:00 to 9:00, mostly, job where you could start doing stuff with me that was much more flexible, Where, honestly, if you stayed where you were, you would be making more money because I don't pay him that much. Three words, best decision ever. Yes. So, Dave, live your best life. I think this is a no-brainer. You don't need to retire early. It's your next thing. It's a way for you to take my book, The Great Money Reset, and reset your life so you don't have to commute, that you can really feel like, hey, we have put ourselves in a place to get to this point. And you know what, Mark? Having those options, it's huge. That's why you save, to give yourself these options. That's why you save, but it's also you have to give yourself permission to spend, right? So, Dave, when you figure out where you're ready to downshift, if you had to dip into some of your savings to cover that $100,000, don't do this too quickly. Take a breath. Get a pathway. You're there. You're totally there. I have no problem with this game plan. So now it's time for one of our favorite parts of the program. It's the TikTok takedown. If you see something in your feed that is kind of interesting to you and you want an opinion about whether it's legit or not or whether you should consider it. Should you take the advice or not? Send it to us. Clip that. Send it to us. Again, askjill@cbs.com. OK, let's watch this one, Mark, and get that blood pressure medication ready. Here's why you should never pay off your house. Here's your house. It's worth $100,000. That's what this stack is worth. And you've been told by Dave Ramsey and other people, I've got to get my house paid off because I'm going to be financially free. False. Most people will accelerate getting their house paid off by throwing extra money on their 30-year mortgage. And maybe after 20 years, you do it. You finally wipe it out. You own your house free and clear. I've got news for you. What do you have for retirement? You got nothing for retirement because you put all your focus in getting your house paid off. Instead, mortgage that house. Access the majority of this money. You know what I'd use it for? I'd go buy five more houses. Imagine those first five houses are each cash flowing $500 a month, but a few years later, you're going to sell those 5 for 15 more, and you're going to sell those 15 for 50 more. Oh my God. Now, imagine $500 coming off of every one of those houses. How many houses do you need to cover all of your expenses for the rest of your life? You could manage those homes yourself, or you could just hire a property management company, and guess what? They'll do all of it for you. Now go ahead and pay off your house if you want, but until that happens, don't. It'll be the biggest mistake of your life. The biggest mistake of your life. I was with that guy-- I was with him for the first 30 seconds. No, like the first minute, I was all in. Like, yes, do not pay down your mortgage. Keep that cash flow. Save for retirement. But then he makes the turn. The turn is tough, Mark. I mean, it was so hard for me to follow. What was he talking-- like put all your-- He basically is-- Buy five houses, then buy 50 houses, then 20. Ugh, ugh, ugh. What is he saying? OK, I think what he's saying is leverage your house, meaning borrow the money. Buy another piece of property. Create rental income. Now, I am not anti-rental-income. I mean, it's fine. It's just really hard to manage property, make money with that property, and there's huge risk, right? What's the risk? Everyone always talks about rental property as the greatest thing in the world, except then you've got a renter who trashes your place. Except you have a recession, and all of a sudden, you don't rent the place for four months. Except that you've got other priorities, and there's no liquidity-- That's it right there. --in the house. That's it. It's all about liquidity. I want to have my money in a taxable brokerage account where I can get my hands on it. Or you want to be putting money into a retirement account. So we have often talked to people who have made a ton of money with rental property. Yeah, sure. I'm not against rental properties. Am I against what this guy's saying? 100%. OK, so if you have a question and you think like, I've just got to be buying rental property because this guy with weird hair says I should, get in touch with us, askjill@cbs.com. Go to jillonmoney.com. Click the Contact Us button. We know that there are legitimate people giving decent advice on social-media streams. Let's find one. Please. We'd love to. Well, gang, that's the show. And if I'm wearing the same outfit show after show, you know that we are pretaping a lot of these first early shows. So come on, give us a little space here. We'll get there. If you've got a financial question, send us a video. Send us an email, askjill@cbs.com, or go to jillonmoney.com. Click the Contact Us button. We want to hear from you. This show is about you. We are here to help you navigate your journey. Thank you so much for listening, for watching. Like us. Promote us. Subscribe. Subscribe to us. Just make us really happy because then our overlords will renew our contract. That would be kind of fun, right, Mark? TBD. TBD is right. [MUSIC PLAYING]