The $75K Lesson That Changed Their Financial Future

Introduction: Setting the Stage (0:00)

Bo: You have all of the opportunity in the world. You are literally at the front of your journey where what you’re going to be able to accomplish financially is going to be amazing if you do the things that you have to do early on to set yourself up for that. You guys have been young and you’ve been able to make less than ideal choices with large sums of money. The good news is if you can rein that in and if you can fix that and you can right the ship, then the future looks bright.

Meet the Couple (0:32)

Jonah: I used to fly out of Smyrna. And so I stayed in the area a little bit and the guy that we flew lives here in Franklin.

Bo: Oh. And so you were flying private out of Smyrna. Got it. And is the guy that you flew a name that we would know?

Jonah: Yeah. That’s awesome. Good for you. That’s super fun.

Bo: So did you do that before you went commercial?

Jonah: I did. I got crazy lucky in how it worked out. I was kind of like a hanger rat. And so I would go over to the private side of the hangars and just if there was a door open, I’d go in and start talking. A guy that I had met there and a little bit of connection with a guy that I went through flight school with linked me up with the guy that had all these contracts. And so I just got so busy I had to leave school. Yeah, and I went back and finished.

Bo: Okay. And so how long did you do that for? And then how did you transition from that to commercial? Walk us through the career history.

Jonah: So, a year and a half. I went to flight school for just about 12 months. In that time is when I met Caroline.

Bo: While you were at flight school. Were you in flight school, too?

Caroline: No. So we’re originally from Texas. Jonah went to flight school in Oklahoma. I flew down to Conroe for one of his lessons. Tulsa to Conroe is like maybe a 3 and a half hour flight in a little 172.

Jonah: Yeah. And so I met up with some old friends and they brought Caroline along. They asked, “Can we bring our friend Caroline along?” And I was like, “Yeah, all right. Sure, cool.”

Brian: Was it a down low thing? Like they were going to try to set y’all up?

Jonah: No. There’s actually a messier side to it — one of her friends was really into me, but I was not into her. And I made it very clear that we never hang out solo because I didn’t want her to get the wrong ideas. And so they brought Caroline along and we hit it off.

Bo: I bet that was great for the whole friend group, right? Like that worked out real well.

Jonah: Not really.

Caroline: We actually went to high school all four years together and had no clue about what the other one was.

Bo: You said y’all are from Texas, right? How big was your high school?

Caroline: Our graduating class was like 900.

Brian: Oh, wow. I thought I had a big class at like 230, but y’all had 900 in one class.

The Love Story and Career Timeline (3:13)

Bo: So you meet, you’re flying private – walk us through the timeline. How long before you got married?

Jonah: We met in January of 2016. We got married in November of 2016.

Brian: Moved quick.

Jonah: It was quick. Our whole dating scene was long distance. But I came from an airline family, so I was non-reving from Tulsa to Houston fairly regularly — at least once a month, if not a couple times a month. Just fly home on the weekend and come hang out.

Bo: So obviously 10 years this year. Happy tenure. What a way to celebrate by coming on Making a Millionaire.

Brian: So you were 19 years old when all this went down.

Bo: And what about you, Caroline? Walk us through your career background and history.

Caroline: So in 2017 I started in early childhood education — stayed with preschool and pre-K. I loved the small ones. I enjoyed teaching them. That’s pretty much what I did.

Brian: Well, I think I saw a picture – y’all have some small ones?

Caroline: We do. Maverick and Chloe. They’re 18 months old. They’re twins.

Bo: Did I hear a Maverick in there? Let’s go.

Jonah: I did not want the name Maverick initially, but Caroline had a little boy in her class that was Maverick. Sweetest thing ever. And I just fell in love with the name.

Caroline: He’s like, “Baby, they’re going to be made fun of.”

Brian: It’s like no, it’s better than Sue. That’s the name that gets you made fun of.

Bo: All right. So they’re 18 months old. You stay home with the children right now. Awesome. So airline pilot and stay-at-home mom. 29 years old, two kids.

The Net Worth Reveal (5:27)

Brian: You were kind enough to share with us a net worth statement. So to kind of level set — right now, as it stands at 29 years old, you guys have a total net worth of just under about $300,000. But you’ve got a really big shovel. Right now you guys are making like $420,000. Did you start making that like last month, or how long have you been making this type of money?

Jonah: From the beginning, my very first airline job was like $40,000 a year. So over the course of starting in 2018, 2019 was my first full year — I think with everything included it was just over $40,000. I was hustling, working really hard to try to get as many hours as I could because there’s an hour requirement to upgrade to captain. That’s when you can start feeling a little bit comfortable. Spending $100,000 on school and then going to making $40,000 is a pain.

Bo: Rough.

Jonah: But when you upgrade to captain, you’re looking at the time it was like $90,000 or so. So I was working really hard to get my thousand hours of flight time required to upgrade. And in that process, COVID happened, and we actually moved back to Texas. We were living in Washington and we weren’t sure what the industry was doing. When we moved back, I was thinking about maybe moving jobs — but in airlines when you move jobs, you reset. Start back at the beginning, no matter your experience.

Brian: Start back at the beginning.

Jonah: When COVID happened, I had the whole goal that at 25 years old I wanted to be at a major. It was supposed to be a little far-fetched. And at 25, coming into COVID, I thought if I make it to a major by the time I’m 30, that’ll be good. Well, after COVID, they did a whole bunch of early retirements. The airlines needed people really, really bad. So I made captain in December ’21 that’s around $90,000. I got hired by my current airline in June of ’22. And I only spent a year and a half as a first officer before I was able to upgrade to captain. That’s nearly unheard of. I put my bid in to upgrade to captain in Seattle where we live. I didn’t want to take any other base because I didn’t want to commute. I was surprised when it happened. It just got down to my seniority and they said, “You’re going to class.”

Caroline: And then we found out we were pregnant, which was huge. It was just like all these things started falling into place.

Brian: So how long have you been over $250,000? Pretty much the last two and a half, three years?

Jonah: January of ’24 we’re still within the first two years of making over that. Yeah.

The Quest for a Plan (9:00)

Bo: As we sit here today, 29 years old, you guys are in a great spot. What are the questions you have? What brought you on Making a Millionaire?

Caroline: Mainly having a plan.

Bo: Do you feel like you have a plan currently? What is your plan?

Caroline: Yeah, that’s where we’re like — we’re putting money in places, but it’s like what are we doing?

Jonah: I used the analogy this morning at breakfast that I feel like if we set out from Franklin and started walking west, we’re eventually going to get to California, but that’s maybe not the most efficient way. The most efficient way to get there — and we’re really fortunate, like our 401k contribution is insane. But I feel like Oh, we’re familiar.

Brian: I feel like we have quite a few clients that that work for this airline, too.

Jonah: We feel so fortunate and and I’m told nearly daily when I’m flying with guys. I’ve flown in my career, I’ve flown with two people younger than me. In the entire time that I’ve been doing it. And so, every guy that I’m flying with, usually, not always, but 40% of the times, military guys, and they’re like, “Man, you’re set up. like you’re going to be so good in retirement. And going back to the analogy of going west, eventually we’ll make it to to California, but there’s there’s got to be planning along the way. but I feel like we don’t have a plan really. We have these automated functions of the retirement, and everybody says, “You’re going to be good, you’re going to be good.” And I see that when I do the numbers, but I still don’t have a plan.

The Debt Tour (10:53)

Bo: So, I want to hear a little bit about you because you said, “Hey, we’re putting money in places.” In a moment, I want to know about the places that you are putting your money currently, but I do have some questions on the net worth because there are some things that we saw in there that were a little unique to us. You know, obviously, you bought a home and like a lot of homeowners, interest rates are not the same now that they were a number of years ago. So, your mortgage is at 7.125%. Which historically is fairly high, right? Like it’s not ideal. But then I see some other stuff on here and I see a line on here that I can’t make sense with what I know about you so far.

Brian: Well, it’s almost like you are like, “Okay, let’s just go on a tour of debt.” And let’s just, you know, I want to make sure that we turn over every rock that we possibly can. The student loans. Okay, I can get that. I understand where that came from. And 4.2 to 4.8 at 29 does not frighten me, does not concern me at all. Medical, I mean, we’re going to get to the bottom of that. And I at least like to see, I don’t know why you didn’t pay it off, but I see it’s 0%. So, okay, there’s probably some bad foolish type mentality that, hey, we should just keep this because it’s 0%. But then the one, it’s almost like you’re walking down the street on this journey. You said if you walk west, so on your journey there was a hole and it was titled 401k loan and you happened to step into it and you’re like, “Oh my gosh, I fell into a 401k loan.”

Jonah: Yeah.

Brian: Seriously, how did you end up with a 401k loan?

The First House Mistake (12:19)

Jonah: In 23, we bought our first house.

Brian: Okay.

Jonah: Yeah. Seriously. In 2023 we bought our first house just over 1,500 square feet, and it was our half of the duplex.

Brian: Most people who buy duplexes buy the whole thing. I just want to make sure, you bought half a duplex?

Jonah: Correct. We closed on that house September of ’23. Then I found out I got the upgrade to captain in November of ’23. This house was within our means at the time. But when the kids started crawling, we were like, man, we feel really cramped here and it was 1,500 square feet with no yard.

Brian: You said it was 1,500 feet?

Jonah: 1,500 square feet with no yard. So we were in the process of listing the house. Problem is we bought it in ’23 with a 7.625% interest rate and probably more than what it was worth. When we went to sell it, it just sat there.

Brian: People typically want to buy the whole duplex, not half.

Jonah: Right. So we started looking at other houses, we’d go from our 1,500 feet and walk into these other places and you can stretch your elbows, there’s a backyard, there’s swing sets for the kids. This house just spoke to us, so we bought that one without selling the old one. The 401k loan came out because my mentality was cash is king. I wanted liquidity to weather the storm between buying the new house and selling the old one, in case we had to rent it out — which wouldn’t have worked since our mortgage was like $4,600 with all things included.

Brian: And comps for half a duplex?

Jonah: We bought it for $530,000 and ended up selling it for $497,000. So we took a pretty big hit.

Bo: So you didn’t actually need the money from the 401k loan — you took it out as a mechanism to have liquidity.

Jonah: Yeah. And this was in ’23. We bought our current house in September of last year.

Jonah: And we bought our current house in September last year. So, September of 25. And so, that’s when you originated this 401k loan.

Jonah: Yeah.

Brian: It makes sense because I think probably borrowed $50,000. And yet here we are a number of months past that and you still owe about $49,000 on this. Can we, because when did you discover our content?

Jonah: About that time.

The Home Buying Checklist (15:51)

Brian: Okay. Because where I’m looking, I always try to look and figure out where are things going. If you go to moneyguy.com/resources, we have our home buying checklist and the first thing, because look, housing is a hot mess right now and you know that’s what one of the first questions is can you be in this house for the next 5 to seven years because that’s going to give you the ability to process if you overpaid for the house. That’s okay. Because time will heal all wounds and make it better and it doesn’t get you in this weird situation where exactly what happened to you guys. Life changes and you’re like, “Oh my god, this house doesn’t fit our needs.” So that’s the only thing I, and I’m not going to pick. Believe me, I told Bo before we came in here, I can’t wait to kind of in a fun way ask y’all some questions about some stuff I saw, right? But that’s one that I just, I didn’t plan on that being something, but it was just like, man, how much heartache would it have saved you if you’d have just not bought that first house?

Jonah: Absolutely.

Brian: Because you would have thought with a 5 to seven year mindset and quickly realize, hey, maybe 1,500 square feet with two kids, this isn’t going to work for 5 years. So, we better, maybe we should just rent. It sucks to rent, but let’s do it.

Caroline: Buying the first house when we were going into it, that was obviously the first place we ever bought. And so we were renting a house at the time. We’re like, “Okay, should we eat rice and beans and save?” But then that question comes into place where it’s like, okay, but can we do this right now? Are we going to be okay doing this right now? And I think that’s where we struggle. It’s like just because we can do it, does that mean we should?

Unforced Errors and the Achiever Trap (17:36)

Brian: And achievers, I pick on achievers. My financial mutants are definitely achievers. You guys, I mean, I already can see all the hallmarks of somebody who’s trying to just do the things like you’ve set goals for yourself. By this age I want to be here and so forth. When you force these decisions because it’s what you perceive what success is asking of you, it creates errors. It really is. It’s unforced errors that really sets you back from your long term goals of when you discover and get the wisdom from going through life. And that’s the thing I just want to make sure people understand, because I don’t want the next person who watches this Making a Millionaire, because we have been, and brainwash is too strong of a word, but we’ve definitely been influenced to say go buy a house as fast as you possibly can because that’s what successful people do. That’s what the American dream is. But y’all are proof that if you just not made that error, you don’t get into 401k loans. And you guys are going to be fine. I’m just picking on you only because I know we’ll be able to get you a solution on this, but it is a great educational moment for the next achiever that comes behind you that doesn’t fall into that mental trap of let me get through all these life things as fast as possible.

Jonah: Absolutely. And that’s what I thought. I thought, you know, a lot of my friends from flight school moved to other parts of the country and they were buying houses, but they were buying $200,000 houses, right? And I was just under the impression growing up, you know, you’ve made it when you bought a house. And Caroline and I have talked about that so many times and I did the numbers one time and about threw up because of how much money we lost on that house. I mean, probably like $75,000 altogether.

Bo: In your mid20s, right? There’s a substantial cost, the long-term opportunity cost of that.

Jonah: Absolutely.

Current Savings Strategy (19:33)

Bo: On your 401k right now, you have it listed at $192,000. I’m assuming that’s inclusive of the 401k loan. So, of that $192,000, $49,000 of that’s represented by the 401k loan.

Jonah: No. So it would be up, I think right now it’s like $208,000 and so when I pay back that 401k loan it’ll push it up to $50,000 essentially.

Bo: Got it. So it doesn’t include it, it’s netted out. Perfect. Great. So you said hey we’re putting our money in some places. Why don’t you walk us through here’s where we’re currently putting our money and I want to talk about from a savings standpoint first and then we’ll talk about from a spending standpoint. Fair?

Jonah: Fair.

Bo: Awesome. Walk us through how you’re saving presently and then tell us a little bit. You said the company match is or the company contribution super generous. For those that don’t know, kind of walk us through what that looks like.

Jonah: So, pretty much with all airlines, all major airlines, our contracts are about the same. And they put in a non-elective 18%.

Brian: Y’all heard that right. I knew the number already, but I was waiting for you. 18% non-elective, meaning no matter what you do, 18%. Now, you said you’ve been following our stuff. Your income’s over $250,000. Are y’all supposed to count that as your part of your savings rate?

Jonah: No.

Brian: Okay, we’ll get to that in a minute. I just want to put a bookmark though because that’s amazing. Nobody, I mean 18% and by the way, it’s not like they’re paying you small wages. I mean, that’s pretty powerful stuff.

Jonah: Yeah. So, 18% of that goes into the 401k. And then when it gets maxed out, I put in 7%. So in total there’s 25% that reaches the 415 limit, the maximum, well this year $72,000, and then recently they started that market-based cash balance for us. So once you reach the maximum, then they start contributing the rest of it to the market based cash balance.

Brian: Pretty sweet.

Jonah: Very much. I didn’t even, I didn’t know until I was putting together the documents. I never looked at that number and I was surprised that there was already $22,000.

Bo: Oh, there’s even more to it. It’s wild. But keep going.

Jonah: Yeah. So 7% to the 401k.

Bo: Pre-tax contributions, I’m assuming.

Jonah: Pre-tax. Yeah, pre-tax. Then we max out our HSA and then really it’s just been putting money into the emergency fund and there’s been so much cash movement over the last 6 months. Right before we bought the second house, there was a little over $80,000 in there.

The Budget Reality Check (22:30)

Bo: I’m going to repeat to you what I heard you say. Put 7% in my 401k and I max out my HSA. Right.

Jo: Yeah.

Brian: So, I got $24,500 going into my 401k, another, was it $8,750? Is that the number this year? Something like that going into the HSA.

Jonah: Yeah.

Bo: Right. Let me ask you this question. If we were to ask you, where are you in the FOO? Both of y’all listen to the show? Both of y’all familiar with our stuff that we talk about? You’re a huge fan is what I’m hearing.

Jonah: Huge fan. Big fan.

Bo: We have this framework called the Financial Order of Operations. It’s this idea of where should your next dollar go? There’s literally a book that details that, really walks through it. If we were to ask you where you think you are in the Financial Order of Operations, what would your answer be?

Jonah: High interest debt, step three.

Bo: Okay, awesome. You’re in step three. Because one of the things I think is interesting, you have a bunch of cash, right, sitting on the sidelines right now. I’m assuming you said that’s going towards the emergency fund.

Jonah: Yeah.

Bo: Walk us through, from the four of you guys, what does it cost to keep the household running every month? Like what’s your month over month burn rate?

Jonah: We have not been good about budgeting.

Caroline: Yeah, we’re not. I mean I feel embarrassed to say, like even you ask me that and it’s like crickets because I don’t, I know it’s not a good thing but I truly don’t know, but I know we’re in a good spot but I know enough to recognize what we spend over time.

Brian: When I saw this, I felt like these numbers that showed up on this budget, I was like, this felt like somebody was asked, like the IRS audited you and you’re quickly trying to backdate receipts and try to figure out how you can make the numbers show up because it just, it didn’t look like somebody who’s actually tracking expenses. So, how did how did these numbers come to be?

Jonah: So, I use Rocket Money. When I’m going through there, it fluctuates so drastically through the months. And so I went through and I looked at, for example, groceries and I saw $1,800 a month for groceries. And then other months it’s $1,000, right? And so I went to the higher end because as far as groceries go like our babies eat just loads of berries and berries get expensive.

Bo: So I’m looking at the, I mean when I looked at that grocery, berries is a lot of berries. I was like when I looked at $1,800, that’s a lot of berries.

Brian: Talk to me about, because there’s a few things on here that stood out. I mean the dining out, give me how that number came to be. Is that also just rocket money?

Jonah: A lot of that has, yeah, it’s rocket money. A lot of that has to do with when I’m out on trips. I don’t package my meals to go with me and then we kind of get on to the Uber Eats realm. Door Dash and Uber Eats.

Brian: And how about the personal care and entertainment?

Jonah: Personal care, a lot of, well not a lot of, but therapies, counseling.

Brian: Yeah.

Jonah: For Caroline. And then I kind of just mix together that with like getting Caroline’s hair done or my hair is pretty cheap but that and then I think also Caroline likes to buy books on her phone. So, we budgeted, I think, $300 or $400, $450 a month on buying books online.

Brian: Are you reading all these books?

Caroline: Yeah.

Brian: Okay.

Caroline: Well, I mean, but I just think of all these new things now being a stay-at-home mom. I’m like, what other things do I have that I can do?

Brian: It’s a lot of books.

The Spending Philosophy (26:28)

Bo: Yeah. Here’s the cold water. There’s nothing wrong with spending money. The way that, I think a lot of people expect when they sit down with financial advisors, it’s going to be don’t spend, don’t spend, don’t spend, don’t spend. Our goal is never to tell someone, “Hey, don’t spend money.” If you want to spend $1,800 a month on berries, that’s totally fine. If you want to spend money on books or hair care, we’re never going to fight someone on what they spend money on or even how much they spend. I mean, a lot of people are going to watch like, “Oh my gosh, they spend $15,000 a month.” That’s okay. So long as you’re not doing that first and not taking care of the stuff that you should be taking care of first.

Brian: Exactly.

The Opportunity Ahead (27:19)

Bo: You got to pay yourself first because right now you guys are at an 8% savings rate, right? That’s the math I did. $24,500 plus HSA based on your income. You have all of the opportunity in the world. You are literally at the front of your journey where what you’re going to be able to accomplish financially is going to be amazing if you do the things that you have to do early on to set yourself up for that. You guys have been in a unique position. You have a huge shovel. You make substantially more than the median income here in America. And what that affords you is the ability to be a little bit sloppy with how you make your decisions. What happens though, and we see this time and time again, we’ll see someone who comes in and they’re a potential client. They reach out and they say, “Hey, I’m thinking about retirement. I’m ready to retire.” And we’ll look at their account state. We’re like, “Okay, man. You’ve got a million dollars saved up. That’s great. A million dollars. How much do you spend a month?” And oh, well, we spend $15,000 a month, $20,000. Well, how much do you make? Oh, we make $400,000, $500,000. Wait, wait. You’ve been making that much money for that long and all you have to show for it is this? That’s getting the priorities way out of whack. And so when I see two young people sitting here with all the opportunity in the world but a little sloppy, it makes me think, okay, it’s time to recalibrate.

Bo: A lot of times we tell people, hey, you got to budget. A lot of folks have to budget out of scarcity. There’s just not enough money to be able to do the things that I need to be able to do. So, I got to create a budget to stay inside that. At your income level, you guys are no longer operating from a scarcity perspective, but now you have to operate from a responsibility perspective. We have this big income. And it’s going to be crazy because most of the time you don’t have to tell someone who makes almost half a million dollars a year, hey, you got to budget. But you guys probably do need to put some of that work in to figure out where is my money going and how much of my money should be going there because it doesn’t sound to me that in the last 10 years you guys have developed that muscle memory to be able to move into the place where you can be on a cash management plan. You guys were afforded the opportunity to skip some steps because of how the career works, but that doesn’t mean that you can skip those steps. Does that make sense?

Jonah: Yeah.

The Missing Money (29:27)

Brian: Well, I think this is incomplete is what, if I was grading your budget because $15,000 times 12, that’s $180,000 a year. You’re basically saving $30,000 if you took out the employer side. So you add those 200, that’s $210,000. Your income’s $420,000. What’s your net per month after all this, what is your paystub that comes in per month on average?

Jonah: On average, I budget off $20,000. It’s oftentimes more.

Brian: But is that what hits in your account?

Jonah: Yeah.

Brian: So, you got $240,000. So, there’s still even off that math, there’s $30,000 that’s just missing from these numbers. And we’re trying to get you to somewhere around $100,000 a year. Which by the way, let’s just absorb that. 29 year olds that can save $100,000 a year. And a lot of people like, “Wow, why put such a high goal on there?” The thing I worry about for you guys, I’m old enough that I’ve seen where airlines get themselves in some trouble. And you know, things are good as long as they’re good, but the economy can be cruel and all of a sudden what seems like can go on forever, the music stops. And that’s what worries me at y’all’s age is that you’re basing your entire success off of a promise for these contributions from an employer in the future. And that’s great. What I would prefer, we all ought to have our Dave Grohl moment. If you’re wondering what I’m talking about, Dave Grohl was in not only Nirvana, but he was also in Foo Fighters. And him and his father had a weird relationship, but he said the best thing his dad ever told him was when you get that first paycheck, you treat it like it’s never going to keep going like this. And I wish when I worked with all these professional athletes and others who had huge money coming in while they were very young, I needed somebody to give them that moment too, because you have a responsibility to get it right in the beginning. So then you know if you do this long enough, 5 years, 7 years, 10 years, you reach a critical mass where your assets get big, you can kind of then take a breath and go, you know what, I guess this system that is so lucrative and pay is going to stay together longer than I thought, but you can then do it out of a place of abundance and flexibility versus, you know, because nobody knows how long their career is going to be.

Rich vs. Wealthy (32:03)

Brian: And I think you have to have a scarcity mindset until it actually lasts because in a lot of ways your income coming in this big, this young, and so lucrative, you need to be a little nervous of it because you have a big income. You don’t have a big net worth. So you’re rich, but you’re not wealthy. And there’s a huge difference. And it ought to scare you because there’s one thing to come from being not having money then becoming rich, meaning you have a big strong income. But if all of a sudden the music stopped and now you, it’s worse because now you have a wife, you have two children counting on this and you go back to being poor because you didn’t make good decisions with it. There’s a weight that should be with that. And I worry because I mean you’re not the first person I’ve seen this. I remember back in my hometown. I remember I got a prospect and he was a very prominent attorney in the community. I was so excited. This guy wanted to be a prospect because he was a known entity making really good money. Really good money. And then I remember when he sent me his info, by the way he came to me, he wasn’t a young person at this point. And I was like oh how do you not have more saved? I mean, it makes me sad for people when I see them come to me in their 40s when they’ve made $400,000 plus for decades and then they don’t even have a million bucks saved up. You’re like, “What? What are you doing?” Now, I know you would have something assuming this employer keeps dumping money in there, but that’s a big assumption. And I just would, and that’s why I took away everybody, I went in the comments section like, “Why does this guy not let people count the employer match?” And I was like, well, because when you make over $200,000 a year, you’re counting on somebody else when you shouldn’t have to. And you ought to carry that responsibility because it’s exactly what Bo said earlier is that what stinks is if you don’t pay attention to this margin, you’re going to wake up one day and you’re going to be like, where’s our money going? We’re supposed to, because you’re going to hire a financial planner and they’re going to say the same thing. What do you spend a month? And you’re going to say, I spend $15,000. Malarkey, you don’t spend $15,000. You know, we can show you definitively based upon just backing into what you pay in taxes and what’s coming out net. There’s more coming out and you just don’t have a grasp on it right now.

Jonah: Yeah.

Brian: And I’m not trying to be harsh. But I just get so excited for somebody at y’all’s age and y’all’s income. Let’s do something because y’all get, you get it all. You get to do memories. You get to do awesome things with the kids. And you get to at the end of the rainbow get this pot of gold. That’s not something that’s given. Believe me, your comment section is going to be like these people got everything and I know that y’all have your own struggles, too. But I’m just telling you that I want you to be energized when you leave here to actually save and build this wealth.

Caroline: Yeah. It’s really nice to have you guys say something and to help us be aware, you know, because we only talk to each other about it. So, thank you.

Young with Large Sums (34:56)

Brian: Now, Bo, by the way, I talked to Bo this morning. He goes, “Oh, no, Brian. You’ve overprepared. You’ve got your mindset ready.” He goes, “Give these people a break because they’re 29 years old.” They’re 29.

Bo: And that’s what a lot of us, again, a lot of people are afforded the opportunity when we’re young and they make bad choices, they make bad choices with small sums of money. You guys have been young and you’ve been able to make less than ideal choices with large sums of money. The good news is if you can rein that in and if you can fix that and you can right the ship, then the future looks bright. Yeah. I mean, mandatory retirement age for most airlines is age 65.

Jonah: Yeah.

Bo: Do you see yourself likely flying all the way out until age 65?

Jonah: I do.

Bo: Yeah. You do? Okay. Because a lot of folks say, “Hey, if I’m really doing this well at 29, there’s a good chance that by the time I get to 40s, 50s, I might decide I want to do something else.” Well, those sort of flexibility and those sort of options are only available if you make the decisions now. And right now, you guys righting the ship will not require a lot of hard decisions. It’ll require a lot of discipline, but easy decisions. The longer you wait to fix that, the more difficult the decisions become to get the ship righted. Does that make sense?

Jonah: Yeah, absolutely.

The Car Leases (36:09)

Bo: Walk me through just one last question I had as we’re looking at your expenses. You have a Telluride lease and a Tesla lease. Are those actual leases, not auto payments?

Jonah: They’re leases. So I thought, well, you know, instead of these negative equities, which we haven’t ever rolled in any negative equity.

Bo: Instead of having any equity at all, let’s have negative equity, but we’ll just pay rent forever.

Jonah: At the time, I thought it was a good idea. Since listening to y’all’s content, I have realized very quickly that that’s not a good idea. The Tesla, I enjoy it, but I don’t think I’ll keep it at the end of the lease. The Telluride we will. So the plan is to pay cash for it at the end of the lease.

Brian: Got it. I would be curious because this does bring back to the goal number one of having a plan. And if we could go back and look at the net worth statement because I want to give you guys an opportunity, because when I was looking at this, it caught me off guard a little bit that I see a brokerage account with $3,900 in it. So I was like, man, at this level of income, they probably should be setting up automatic savings, not only into the retirement accounts, but probably into that after tax brokerage account. But then I see the kids savings accounts also, they’re right at $1,000.

Jonah: Yeah. So, the child’s savings accounts, that’s something that just autopulls $100 a month. And then the brokerage was also, I was doing $500 a paycheck into the brokerage until the whole house situation. So to go back to the, I really want to automate because I think that’s going to take the process of thinking out of it and it just happens. That was a big goal for us for 2026. We said 2026 is our year to get ourselves right because I feel like we’re playing with dynamite because we have the tools and we need to utilize the tools the way that it’s going to help us.

The Homework (38:17)

Bo: I love it. All right, I’ve got some homework for you guys. You ready? Obviously we’re going to go back to the drawing board and we’re going to put together a plan and I’m already so excited because we know, we are familiar with your employer and we know how the benefits work and so I’m super excited but I do think there’s some work that you guys ought to do. Number one, together, collectively, because when I ask you hey what do you spend a month you’re like it’s crickets. I’m like it’s totally okay if one of you is the finance person and the other one is not the finance person but in these early stages it does matter that you’re on the same page. While you may not be in the app and you may not be coding transactions, you guys should have a monthly come together where you’re like, “Hey, how’d last month look?” And y’all should be on the same page about that. So, I think you should both get on the same page about budgeting, both get on the same page about tracking, figuring out where your money’s going. One of the things that we’re going to do for you, and you guys can go and start this work, is we’re going to retriage the Financial Order of Operations. If the goal for our next dollar is to figure out where we are in the FOO, if I’m in this step, what do I need to do today to move through this step and then onto the next one and then onto the next one. So, we’re going to do some of that work for you and we’re going to put a timeline based on what we know to be true for you guys. There are also some opportunities you’re missing out on that we didn’t even really get a chance to talk about, but we’ll put in the plan. You have a rollover IRA with $1,400 and all that thing is doing there is just being real annoying and preventing you from doing backdoor Roth contributions. So, we’re going to talk about opportunity that might exist there. Your employer also has a really unique thing where not only can you do pre-tax contributions or Roth contributions, you can also do after tax contributions. And there’s a really unique thing about your employer where if you do those after tax contributions and you fill up your 415 limit, you don’t crowd out the employer. So the homework I want you to do is read a little bit on the pilot forum around the strategies that are involved there because there’s some really exciting stuff that you can be doing. And the big thing is I think you guys should sit down and talk about okay what do we want our future to look like? Right now we’re making decisions that make today look good and enjoy today, but we don’t want to make sure we’re sacrificing all of tomorrow for enjoying today. How do we strike that balance and carry the responsibility of this big shovel really really well so that we can give ourselves future flexibility and options?

The Path Forward (40:35)

Brian: I find myself sitting here because I couldn’t, I was like Brian put the calculator down, because I mean I sit there, what’s going to be frustrating for you guys and you have to promise me you’ll just finish the drill because it’s going to take us a few months to get you fixed is because immediately I can go, I’m just going ahead and laying out some, you just call them like shadows of what will be coming or foreshadowing. We’re going to have to boost up your emergency reserves. We’re going to have to tackle some of this debt. So, it’s just going to be frustrating to me because I see such an opportunity with the mega backdoor Roth. I see opportunities with let’s start loading up these Roth accounts. Let’s even start doing something for the kids. But we’re not going to be able to do any of that for a number of months because we’re going to just like hold, you know, just hold until you see the whites of their eyes because we have to get through unwinding some of these other decisions first. And that’s going to be somewhat frustrating because with your level of income, we’re going to want to go rip out of the starting line and we can’t, we have to go back and do remedial stuff to fix the bones of your financial situation. So hang in there with us. We’ll have a plan for you. And then what I look forward to though is that man oh man, we get you on the right path with this thing. It really is going to be automatic for the people at that point because this thing’s just going to start growing and you’re going to wake up one day and be like, “How did we get here?” And you’re going to have all the flexibility and opportunity in the world.

Jonah: Awesome. Very good.

Bo: Any final questions for us before we get to work?

Jonah: No. The only thing, I am expecting another $20,000 check that I didn’t have in the next few days.

Brian: Awesome. Well, that’s why the order of operations is going to be so helpful for you because it’s things like that that speed this process up. You’ll know what to do with your next dollar. So, it’s not going to be like, well, what are we going to do with that $20,000 that showed up? No, we’ll have a place, you’re like, oh yeah, that just cut off time. Think of that. Maybe that sped it up two months for us. And that’s going to be really cool from the implementation or triaging of your financial life. Awesome.

Bo: Awesome. All right, we’re gonna get to work.

Jonah: Awesome. Thanks, guys.

The Post-Episode Analysis (42:48)

Bo: Brian, what a fantastic conversation with Jonah and Caroline.

Brian: Yeah, I loved it. I mean, how often do you have somebody come to you in their late 20s just crushing it with the income potential? Well, it’s not even potential. It’s what they actually have, making over $400,000 a year. The only thing that kind of, there’s a few things that I did want to kind of full stop on. First of all, their investment assets are about half of where their income is and they’re about to cross into 30.

Bo: We got to get that up. We’ll cover more on that. The income has come along lately, right? The income has been the whole time because I do want to say that, you know, we talk about wealth creation and the three ingredients, right? They’ve certainly got time on their side at 29. It certainly seems like there should be a lot of margin based on the shovel. So, I think the one that we need to tweak and the one that we need to sort of maybe double down on is the discipline. That’s where I think they need to really focus their attention right now.

The Updates (43:41)

Brian: I did. We got a few updates that I want to make sure that we bring the audience up on the journey with us. You know, they have twins, baby twins. We found out, look, Jonah has life insurance through work, but we think that he ought to go buy more term life insurance outside of work and especially while young, healthy, and term insurance is going to be cheap. Going to be able to do that so we can level set and bring that up to a much better place. And then we also found they don’t have wills yet, which is a big thing that needs to be checked. We got to make sure all parents who watch this content, look, even if you think that the money will take care of itself, whether it’s through beneficiary designations or something else like that, if you want to know who’s going to take care of your kids, make sure it’s stated in a legal document. And that’s what a will is going to help cover.

Bo: And the good news is when you have young kids, it doesn’t have to be overly complicated. You just get it in place. You pay whatever the cost is for the documents. You kind of set it and forget it until it’s time to revisit. So, it’s just a box that they ought to check. So, once they knock out the life insurance, get the wills in place, then we can start focusing on the fun stuff. And what we really wanted to figure out is, okay, how much margin do they actually have to work with? And so, as we kind of went back and forth thinking about their budget, they said that realistically they could live on about $11,000 a month. The income that he has coming in after taxes was $22,000 a month. So, we have 22 coming in and 11. That means that we have $11,000 a month that we get to do something exciting with.

Brian: Now, we immediately were like, “Good. We’re going to finally be able to get rid of that crazy 401k loan.” But once again, we have another update that we found out. We reached out to them after the show recorded. We found out they had a big tax refund as well as they did take some of their cash reserves. I don’t know if I exactly love that idea.

Bo: I love it. Get rid of that 401k loan.

Brian: They were able to completely wipe out the 401k loan. It’s gone.

Building the Emergency Fund (45:32)

Bo: So now that that’s gone, that would be the high interest debt. It’s satisfied. Now we get to continue moving along in the Financial Order of Operations. And one of the things that you just said is they ended up taking some out of their emergency fund in order to be able to satisfy that 401k loan. So in my opinion, I think what they need to do is they got to build back up the emergency fund. They got to get back to a fully funded, since he is the primary income earner and since it is a large income, I’m going to argue that they need six months of living expenses inside of liquid cash available. So, if we know that it costs them $11,000 a month to live, they need at least $66,000 to have a fully funded emergency fund.

Brian: And based upon what’s kind of left over still, that, here’s the crazy part with the big shovel, probably a little over four months and they’ll be right at it. They’re going to knock, that’s like a hiccup more than anything.

Step Five Hyper-Accumulation (46:20)

Bo: So, once they get there, once they knock out the emergency fund, now we get to start saving. Now, we get to start building for the future. And just because they’re young and just because they have a high income and just because they have a lot of opportunity doesn’t mean that the FOO doesn’t apply. I love that even in their situation, we get to begin talking through the Financial Order of Operations and it still applies even to someone in their situation.

Brian: Well, this is the part where I get excited because I don’t want to just have only retirement assets like 401k. How about step number five accounts? And we found out Caroline, you know, we could do a spousal Roth IRA immediately for her through doing a backdoor conversion process. It would be really powerful. And then he, because he has a great 401k. We work with a lot of the pilots that work at the airline he works at. They have a great 401k that’s got index funds. It’s low cost. So we could roll his IRA up into that 401k and then he too could do backdoor Roth contributions.

Bo: That’s exactly right. As soon as he cleans up his account structure, he can put in $7,500 and do a backdoor Roth and then she can put in $7,500 to do a backdoor Roth. They’ve already noted they’re doing the health savings account. So, when they’re maxing that out, that’s another $8,750. Once they’ve done that, they’ve checked off step five of the Financial Order of Operations. Now, he gets to go to step six. And step six is now maxing out his 401k. Remember, the rules just increased to where now you can do $24,500. What’s interesting is even when he maxes out at $24,500 and maxes out his Roth and maxes out her Roth and does the HSA, they’re still only at 11 and a half percent savings rate. They’ve not even hit the 25%. So, if we want to then kind of fill in the blank, fill in the gap in order to hit a 25% savings rate, we think that in an after tax regular brokerage account, they ought to start saving $4,730 a month. And that would get them to a 25% savings rate.

Why 25% Matters (48:14)

Brian: And I want them to be at 25% because I know a lot of people think the easy button is take advantage because the employer is loading it up but we’ve been around the block for a while and I think to just assume that you’re going to be able to get 18% from your employer forever, and maybe it will, maybe it works out, but when you’re so young with such a big income I think you take that responsibility serious and you frontend load it with your own money and that way you’re pleasantly surprised. You can always, it’s easier to come off the gas than it is to try to catch it up later on, just assuming everything’s going to be okay just because of the employer.

The Projections (48:51)

Bo: What I think is amazing is that if they can begin doing this and they can really exercise this discipline muscle starting now at age 29, look at what happens if they can start. Right now they have $240,000 saved, but saving 25% of his gross income, about $100,000 a year. By the time they get to 45, their portfolio is worth over $4.7 million. By 55, $13.3 million. And this is astounding. By the time they get to 65, if nothing else changed, and they just stay on this current trajectory, assuming that they made a 9% rate of return based on their age, $34 million retirement portfolio.

Brian: Now, look, before I start shaking because that’s such a huge sum of money, we do need to kind of ground it in the fact that part of this is because they’re so young. I mean, these are people who are in their 20s. Inflation will have an impact. That’s why we did bring this back to present value of what the purchasing power. I thought it was interesting, at 45 they’re going to have the potential to, not even counting the employer portion, close to $120,000 a year, $10,000 a month. 55 close to a quarter of a million dollars. Age 65 a little less than half a million in today’s purchasing power. So that’s the part that’s exciting to me, yes those numbers but I think it’s hard to know when you go 20, 30 years in the future, we don’t know what these numbers really will be and that’s why you have to be careful but looking at the purchasing power and the cash flow, that’s really exciting.

Including the Employer Match (50:19)

Bo: Now you have already alluded to this. This does ignore, this does not pay attention to the fact that he does work for an incredibly generous employer and that employer is doing a huge match. And so if we look at the numbers and we factor in the employer match, not only is he saving 25% but then you get the 18% for the employer. Well, now you can see the numbers get even more astronomical. By 45, the portfolio could be worth $7.5 million. By 55, over $21 million. And then by 65, almost $55 million. And so, one of the questions that somebody would probably say, well guys, why on earth are you projecting $50 million? Surely he doesn’t need to be saving at this clip. Surely they could back down. And the answer may be that they could, but not yet. Because I want to remind you, even though this projection shows that they are on the path for a $55 million portfolio, as it stands right now, right now today, they have $240,000. $240,000 today is not $55 million tomorrow. That’s not even one times income. They need to begin progressing on this journey. And then as they do that, they may arrive at a conclusion that, okay, maybe we can do some other stuff. Maybe we can back down our savings rate or maybe we can take advantage of the mega backdoor Roth where we can start really front-end loading the Roth dollars we’re building up in the 401k but I think they have to get a little bit further down the line before they get to start making those kinds of assessments.

The Mega Backdoor Roth Opportunity (51:46)

Brian: Well, that’s what, because we do work with a lot of pilots from this airline. There’s a lot of them we race to get the money into the 401k because we’ve discovered they have the cash balance plan that they get to, it’s amazing. Even if you crowd out the employer, you still get the money. It’s insane. But I do think we need to come back and remind everybody because a lot of people watching this might go, “Well, wait a minute. When do I know if I get to count my employer match or not?” Remember, if you’re a married couple, it’s over $200,000. If you have that type of income, we don’t want you counting the employer match. And the reason is because with that type of income, there’s a great responsibility because you are beyond the social safety net of social security and beyond. You’re beyond the pension benefit guarantee corporation and all that it can do for you. Your benefit is so much that we just want to make sure that you’re being responsible with that big shovel.

Coast FIRE Scenario (52:35)

Bo: Now, Jonah and Caroline are a prime example of someone who right now I think that they just need sort of a simple plan to move them along the path, but they are rapidly going to get to the place to where life becomes more complicated and they might not know what they might not know and they’re going to be prime candidates for folks that potentially should take their relationship to the next level, should figure out how to get a personal plan built for them. But we just said, “Hey, let’s think of an example of something that could likely happen for like maybe they want to do a coast FIRE thing and he has a high enough income that they could even do like a coast FIRE that turns into fat FIRE. So it’s like coast fat FIRE potentially if they were to do that. We said okay what if they just save aggressively 25% until age 45 and then at age 45 maybe they pull off the savings and they just let the employer match continue to fall into the portfolio. Even at that level by 45 again saving that 25% they get to that $7.5 million but then if they’re able to just coast from that point that $7.5 million turns into $19 million by 55 with the employer match and still has the ability to turn into $48 million by retirement which if you back it into today’s dollars could create an income of over $600,000 a year. They are going to be in the driver’s seat where they get to choose what they want their life to look like assuming they get further down the path. They’re just not quite there yet.

The Next Five Years Matter (54:04)

Brian: Yeah. I mean, before we let these illustrations amp it up too much, I still want to focus the next 5 years are important to them. And but here’s the good news. They are going to be able to because I know they had a big goal of they wanted to make sure that they could fund the kids 529s and other things. You know, for a lot of people that’s, you have to defer it because we have to make sure you put on your oxygen mask before you can start funding. They’re going to be able to do it all. And that’s a really powerful and exciting planning thing that we’re going to be able to do for them. We don’t have to say, “Hey, be the bad guys. Don’t save for the kids college.” They can actually do it all.

Bo: I’m so excited that they came on, let us take a peek behind their finances. And man, they have a bright future. I’m so excited to see what they end up doing and where they are three, five, 10 years in the future.

Brian: Yeah. And this is, I mean, like I said, they’re in their 20s. So when you run illustrations because there’s so much time, they get big. I get excited because people like with this type of income, this much potential, you’ve already alluded to it, but this is what for financial planning clients, I love these annual meetings because instead of this being a projection where we were running it 5, 10, 15 years in the future, we actually get to spot check this every year, reshape the direction. It’s powerful and it’s fun. This is why it’s kind of like every year my own, you know, your home renovation tour financial edition. That’s what we get to do with people like Jonah and Caroline. And I just thank them for coming on.

Closing (55:28)

Brian: Bo, if others want to come on Making a Millionaire, what do they need to do to check it out?

Bo: Yeah. If you’d like to be a guest on Making a Millionaire, you can go to moneyguy.com/apply. Or if you want to check out any of our free resources, any of our free tools, go to moneyguy.com/resources.

Brian: Guys, I’m your host, Brian, joined by Mr. Bo. Money Guy team out.