The #1 Financial Regret of Americans (And How to Fix It)

This episode delves into the most significant financial regret among Americans, which is not saving early enough for retirement, and offers strategies to remedy this.

1. The biggest financial regret is not starting retirement savings early enough.
2. Time is a critical component in wealth building, alongside discipline and money.
3. Even small, consistent savings can grow significantly due to the power of compounding interest.
4. It's never too late to start improving financial habits and making positive changes.
5. Financial success doesn't require perfection, but it does demand proactive steps and regular reassessment of one's financial strategies.

1. The Biggest Financial Regret

The hosts introduce the topic by discussing the common regret of not saving early enough for retirement, supported by data from various demographic surveys. Brian Preston: "Not saving for retirement early enough is the biggest regret among Americans."

2. Importance of Starting Early

This chapter emphasizes the significance of starting financial planning early by leveraging time to maximize compound interest. Bo Hanson: "The earlier you start, the more your money can work for you."

3. Strategies to Overcome Regrets

Practical strategies and tools are provided to help listeners begin or improve their savings, highlighting the 'financial order of operations'. Brian Preston: "The best time to start investing was yesterday; the second best time is today."

4. Listener Interaction

Listeners' questions are addressed, providing real-world contexts in which the hosts offer tailored advice on personal finance management. Bo Hanson: "Even if you're starting late, there are steps you can take to significantly impact your financial future."

1. Start Saving Now: Begin with whatever you can, even if it's a small amount.
2. Utilize Financial Tools: Explore tools like retirement calculators to understand how much you need to save.
3. Increase Savings Gradually: As your income increases, incrementally increase your savings rate.
4. Avoid High-Interest Debt: This can derail financial progress.
5. Review Financial Plans Regularly: Ensure your saving and investment strategies align with your current financial situation and goals.

We recently found out that the number one financial regret of Americans is not saving early enough for retirement. We get where the guilt is coming from, and if you're feeling it, you're not alone. So here's what you can do about it today!

People

Brian Preston, Bo Hanson

Companies

Bank Rate

Content Warnings:

None

Brian Preston
The number one financial regret. And better yet, how to fix it. Brian, I am so excited about this because we don't want our people living with regret. We don't want your future self looking back saying, ah, man, I wish I would not have done that. Or I wish I would have done this.

Beau Henderson
So if we can help, open your eyes so that you do not fall prey to this regret, I think we'll have done the world a service. So let me ask you, Beau, were you surprised by this? I'm not, because I have access to our information, but. Right. Cause I see our information and we hear this over and over and over again.

I was not incredibly surprised by it, but I think the general public will be. Yeah, this was cause as Bo just alluded to, we do our own survey, but this is actually data coming from bank rate as the biggest regret of Americans financially. And guess what? Is not saving for retirement early enough. Not saving early enough.

People say, man, I wish I would have started sooner. I wish I would have started earlier. I wish I would have. I wish I would have. And this makes sense.

I think that most financial mutants out there, most folks recognize time is pretty stinking valuable. Yeah, I mean, it's one of those things. Procrastination seems like the viable thing when you're, you know, stuck with short on time, short on money. But then I think when you get a little older, a little wiser, and you see the power of compounding growth and what could have been, especially when you watch content like the money guy show, it really, really stings at that point. And Brian, you always talk about, like, when it comes to building wealth and when it comes to wealth creation, there are three main ingredients that we like to talk about all the time.

And one of those ingredients is, in fact, time. Yeah, discipline. Money and time. And you think about that discipline is living on less than you make. Living on less than you make creates margin or money.

Brian Preston
You use that second ingredient and you put it to work by investing for enough time. And by the way, that's the most powerful of all three ingredients. Voila. You have the recipe or the ingredients for wealth. It's so important.

Beau Henderson
It's such a big idea. This is where our wealth multiplier idea comes from. I mean, you see the koozies that we drink out of that say that this $1 beer cost me $88. Or you can go out to moneyguide.com resources. You actually do our wealth multiplier tool.

But we know that if you give your money a long enough timeline, if you let it work for you over a long enough period of time. What it can do is amazing. It can actually literally work harder than you can. It can generate more wealth than you're able to generate by yourself. But the key is you have to start.

And most folks say, man, you know what? I started, but boy, I wish I would've started sooner. So let's look at the actual data on this. Cause I kind of chuckled to myself because this thing went all the way to Gen Z and I was like, well, how could Gen Z even have regrets? But as you can see from the data, Gen Z, the typical starting age is 20.

Brian Preston
Oh, those are ancient at 20 years of age. Well, even the 20 year olds wish that they'd have started at 18. The millennials, who started actually at 27, wish that they had started at 22. The best generation ever, Gen Xers, they actually started at 36, but they wish they started at 26. And then the boomers started at 44 and wish they'd started at 33.

Beau Henderson
You see a common theme here. I mean, we have a wealth survey, Brian, that we do every year. We ask folks, hey, what are some words of wisdom you would share? What's some advice you would share? And over and over and over again, what we hear is, man, I wish I would've started earlier.

I wish it was. And these are people that are financially successful. They're people that have reached financial independence, and yet still they recognize that, man, if this would've clicked, if this light bulb would have gone off, it could have been impactful, it could have changed. And Brian, it's so interesting you talk a little bit. Matter of fact, you're probably going to talk about this.

We have something exciting going on. Oh, yeah, guys, moneyguy.com book tour. Yep, I am exercising the heck out of the muscle of giving a keynote speech. So I'd love you guys to join us on the book tour for, by the way, millionaire mission comes out May 28. I mean, we're coming up on a month now.

Brian Preston
Please get in there. Let's make an impact. And I'd also love for you to join us on the book tour as well. One of the things you're going to talk about is that you had a teacher who said, hey, if you could just start saving a $100. But what you wish, and you've said this, man, what I wish I would have done is not just heard that, but I wish you would have taken that and put that into action right there in that, what, junior senior year class.

Beau Henderson
Even you, the money guy himself, says, man, I wish I would've started well. I think everybody has financial regrets. I think that to error is to be human. And here's the good news for everybody that's out there. You do not have to be perfect to be successful over the long term.

Brian Preston
That's the great news all throughout the millionaire mission is I actually share with you all of mistakes. So hopefully you don't have to make those mistakes as well. And the origin stories for the financial order of operations, it's all in there. But let's talk about. And that, that's why, if everybody has regrets, if everybody errs, how do we actually fix this?

Since success does not require perfection? So the first step is pretty stinking easy start. Now, if you have done nothing, today is the best time to start. We always say the best time to have started investing was yesterday. So by default, the second best time is today.

Beau Henderson
So if you have not begun building, if you've not begun saving, if you've not begin exercising discipline to save a little bit of today for a bigger, more beautiful tomorrow, start right now. Yeah, I think it's one of those things where you think, okay, well, if I'm already behind, what do I do? You need to kind of assess what, what do you need to do? Because we've done a show that's coming out in the next week or two on milestones you ought to look at. And one of the things I found amazing is that, yes, we use a lot, it's somewhat sensational to say, for a 20 something, if you just save $100 a month, you could be a millionaire by the time you reach retirement.

Brian Preston
But a thing that I found, and we cover this in the milestone episode, if you increase that savings rate, even at a later date, you can make up a lot of ground. Yes, you don't have as much time working for you, but you can be disciplined enough to increase your savings and get serious about this and actually have a dramatic impact on your future retirement. And you may be wondering, okay, I want to start, but I don't know where to start. I don't know what to do. How do I navigate that?

Beau Henderson
Well, we have a tool for you. Brian, will you hold the thing up? We have nine tried and true steps of what you should do with your next dollar. So if you are at the very beginning of your journey and you don't know what to do, where to put your dollars, how to deploy them, follow the financial order of operations, because it is going to be the path or it's going to be the roadmap to get you from where you are today to ultimately, where you want to be in the future. So if you do not have that, go to moneyguide.com resources, download the free deliverable, and let it be the instruction manual for what you should do with your next dollar.

Brian Preston
And now, let's talk about how do you know where you are so you can play this game of catch up. There's nothing wrong with, you know, we have tools like know your number. We also have where, if you want to know how valuable, um, you know, 25%. If is. Is that enough?

Is that too little? I'd encourage you. Go to moneyguy.com resources. We will load you up with that data. And then the other thing that we would encourage you, you just heard, I mean, we are financial mutants, right?

Beau Henderson
We sit here and we share this information with you. We both say, hey, we have regrets. There are things that we wish we would have done differently, or things that we would have done differently if we could go back. Give yourself a break. The financial journey is just that.

It's a journey. It's not a straight line from where I am today to where I want to be in the future. So maybe you haven't made the best decisions, or maybe you got caught up in something you didn't want to get caught up in. Or maybe you didn't understand how debt works. That's okay.

If you are still breathing, you still have time to improve your circumstances. So give yourself a break, but take it seriously and get moving on the right path. And don't forget, how the journey begins does not have to define how it ends. So this is the perfect time to just do something, to make a commitment to be better for your great big, beautiful tomorrow. And we love that we get to put this together.

We love that we can help enlighten you on some of the mistakes that we've made. And we love that we can even answer your questions to have, hopefully help you prevent from making future mistakes. So right now, we have the team out adjacent to the wings collecting your questions, because we want to speak to the things that you truly care about. So right now, get your question in the chat with that, I'm going to throw it over to you. Producer Rebey.

Producer Rebey
Yes, sir. We've got a great question to start it off from Josh out on Facebook. He said, I'm a 28 year old teacher with zero debt and a growing pension, and I've maxed my Roth for two years. Nice. Also, I have a six month emergency fund and 40k in a high yield savings account for a down payment on a house.

So this is very exciting, but the question is, people are telling me that my pension will be enough. Am I doing too much by maxing out my Roth? No. Next question. No, I'm kidding.

Beau Henderson
No. Why? So a lot of people say, oh, you have a pension, you have nothing to worry about. Remember, a pension is just a guarantee for a future benefit. And what you're basically saying is, I hope that when I get to retirement, this thing that was guaranteed for me will be there.

And in our experience, most pensions do. I want to say most. A lot of pensions for, like, for teachers and for government employees, a lot of those pensions have remained intact. But what's amazing is folks who are able to still save and still put away 25% and still build their nest egg, even outside of their pension, what we see happening in their lives is they have more options earlier in life to do more of the things that they want to do. Because while your pension may be enough to replace a certain amount of your lifestyle, is that the lifestyle that you actually want to live post retirement?

Or might you have aspirations to do other things, like travel the world or be able to help family members or whatever that thing may be? Well, I think, Josh, you're not going to be able to get away from the fact that you're a financial mutant, and it sounds like you're a prolific saver and good with your money. So I would give you the counter argument to just counting on your pension is that, first of all, now government pensions, meaning for educators and so forth, probably going to be the about last course of where pensions get in trouble. But that doesn't mean even government pensions are fully funded. I mean, all you have to go read is a Warren Buffet letter to Berkshire, where he always talks about how governments have woefully underfunded all of their pension obligations.

Brian Preston
So that doesn't mean at some point, there might not be a very hard conversation, just. Just put it out there, but more than likely, everybody's gonna be fine. The second point, I'd point out why I said point twice there, I have no idea, is that you work 30 years as a teacher, I believe, most school systems, that gets you 60% of your pay. And then here's the other reality. If you became an educator, like at 22, 23, right out of college, you're going to hit that 30 year mark, um, right around early fifties.

I mean, and I'm. By the way, I'm very close. I'm right there at that age now. And I can tell you, you still are going to feel young, spry, energetic, and able to do a lot of stuff. So that means retirement.

If you choose to take it after 30 years and get that 60%, you're going to be active, you're going to want to travel, you're going to want to do things. The more money or the more discipline you put into your financial future, the more options you will have. You will own your time that much sooner, and that's really the purpose here. Now, with that said, I would encourage you every decade of your life. You're in your twenties currently.

Make sure you're doing enough to enjoy it. And I'm not saying you have to do it in an expensive way. I'm just saying bedazzle your basic life by making sure you are creating blossoming memories. You're traveling so you don't look back at 50 and go, man, I wish I just done a few more things in my twenties and thirties. So I think you're doing a lot of the things right, Josh.

But just don't. You don't have to come back. Because if you look back at your peers, I would dare to say, based upon the research I've seen, they're probably under saving. So don't. Don't feel shamed just because you're making a lot of good steps with your financial decision making.

Beau Henderson
Love it. Awesome. Josh, fellow financial mutant, thank you for that question. I hope that helps you as you think through that. Ruby.

You know, we kicked off this show with number one, financial regret that people make. You know what the top three are. Did you actually. Did you read the article? No.

So it was one, two, three were the top. Number two. Not subscribing right now to the money guy show. Number three, not getting your ticket for the book tour. If you happen to be near Atlanta, Nashville, Dallas or DC.

Cause we would love to see you there. Don't let that be one of the regrets that you have later this year. Look at that. Where are y'all hiding these things that you're putting across? I don't even have fancy graphics.

Brian Preston
If I had a cool sound effect, I would have made up something. I feel like maybe should I be dancing or something while that's. You've got all kinds of things pretty cool up our sleeve, Brian. But should we announce on, you know, where we are with sellouts and stuff? No.

Okay. I'll be quiet. Oh, I know you could. Yeah. We actually posted about Dallas has already.

Sold out the vip, so. And I think that they're doing. They're keeping numbers away from me, because on purpose, which I think is kind of entertaining, but also very scary, selling really well. So if you wanted one, truly, we would love to see you. You probably should go grab one, because we've been just blown away.

Producer Rebey
Like, wow, people really want to do the vip experience. Like, this is awesome. It's awesome. I think it's super awesome. Yep.

Brian Preston
And I'll go ahead and apologize to all my financial mutants. We don't control the ticket charges. Oh, like, the service fees. I know. I've already heard.

Every one of my buddies. We actually, like, factored that. Every one of my buddies, like, hey, I don't mind buying the tickets, but what's up with all these fees? I'm like, look, we're small potatoes. Just.

We don't control that. I know it's very anti financial, mutant, but it is what it is. You're funny. Anti financial mutual. Love it.

Well, I mean, once we get to Taylor Swift style, we'll be able to really negotiate those fees down. But at the entry point, I'm pretty. Sure Taylor Swift still had some hefty service fees. These are our. This is our.

I thought she fought that stuff. No, no. Okay. I don't know. I haven't.

Beau Henderson
I'm not stayed up on that. Nope. I didn't know when you're buying your heiress tour tickets if you had that all figured out. All right, are you ready for the next question? Mm hmm.

Brian Preston
Oh, we're answering questions today. Oh, we are. Some financial questions. Cool, cool, cool, cool, cool, cool. All right, Leandra has a question.

Producer Rebey
She says, y'all talk about bedazzling your basic life, especially in the early stages of wealth building. What have been your favorite bedazzled memories or ways that y'all have bedazzled your lives? So, for those of us watching, wanting to be dazzle our basic lives, what are some of your favorite ways that you've done that in the past? I'd love for you to start, Brian. Cause I know you got some.

Beau Henderson
That you got those locked in the chamber ready to go. I mean, I love. I mean, one of my favorite things. I even made the entire firm do one of them because I was just. I was like, these guys are gonna love it.

Brian Preston
If I love this so much. Surely the whole financial firm would love this. So when you. If you go to chattanooga, Tennessee, there is Ruby Falls, which is, you take this elevator shaft all the way underground. I can't remember if you're, like, 26 miles underground or something.

You're way underground, and then it's somehow, after you walk, I mean, as a kid, it felt like you walked 6 miles, but it's not that long of a walk. I mean, it's all lit up and stuff. But there's this huge waterfall that they have, like, music and lights and stuff that they play. I like Sea rock city. If you're anywhere in the southeast, you'll see every red barn or a lot of red barns will say, sea Rock city.

That stuff's fun. I've seen the Noah's ark. That's up. And then there's the creation museum out of Cincinnati. Um, I will tell you also on Bedazzle, that's all the road trips.

And then I've shared with you guys that in my early, in my mid to late twenties, my wife and I saved up for a few years and actually went to Italy on the cheap. I mean, we talking about bedazzle basic now, look, it was not a luxurious trip. We were, as y'all have heard me say many times, dragging our luggage, literally down the cobblestone streets. But it was definitely something that was great on blossoming memories, because all those funny things that were quirks or maybe inconveniences have turned into fun, blossoming good memories that we laugh about. But.

So those are some of the things. But road trips, do it yourself improvements at my house when I couldn't afford the nice stuff, and then also just going, saving up for a few years for that bedazzled basic european trip. I love it. I've got a few that came to mind really quickly. I just don't like spending money.

Beau Henderson
When I was younger. Imagine that. When I was younger, I really did not like spending money. And so I do the thing where if I ever went on a trip, on a vacation, right, I'm like, look, ordering, like, the cheapest thing off of the menu and drinking water and all this kind of stuff, which, there's nothing wrong with that. One of the things that we found early on in our marriage, that was great.

And a great way to bedazzle was going to an all inclusive like, right? So. And not all. All inclusives have to be super, super expensive. And not.

Not all inclusives have to be, like, super, super janky. There's some, like, middle ground there where you can do some really good stuff. And if you are a financial mutant who has apprehension about, like, going on a nice vacation and staying at a nice place and then also having to dole out money for nice food, all inclusives are kind of a wonderful solution there, because then you can get the good food, and you can go on the excursion, and you can have all the experience, and you already know what you're paying for it. So I don't know if that quite counts as bedazzling basic, but that's something we did early on in our marriage. That was awesome.

Another thing that I found really, really interesting is recognizing what the people around you love. A couple years ago, took the girls to Disney, and I was like, this is gonna be it. It's gonna be magical. And we did all the things, and we spent a gazillion dollars, and we just blew it out. You know what my kid's favorite part of Disney was?

Brian Preston
What? The pool at the resort. Absolutely. The pool at the resort. Fast forward.

Beau Henderson
We come back from that trip and have to go to a family reunion, and we stay up in this cabin in the north Georgia mountains, and, I mean, it's like a little Airbnb. Nothing. And I just let my kids go out and explore in the woods and, like, play in the creek. They still talk about it. To this day.

They don't ever talk about, like, the Disney trip. They talk about that. And so recognizing what your people love that trip cost, you know, next to nothing to go do that. And then you said, like, road trips and stuff. I have a group of guys.

Every year we go on a guys trip. We'll go somewhere and go play golf or something, and instead of buying plane tickets and flying all over, we'll all meet in a central location. We'll all drive to wherever we're going, because we recognize that half the fun for us is just getting to joke and laugh on the car ride down to wherever we are. And that's stuff that you can do both early on in life, and you can continue to do those things even later on in your wealth building journey. You know why your girls didn't have a good time at Disney?

Because we didn't take the Prestons. You didn't take Uncle Brian. Put it on. Idea half baked. Idea 1026 is we ought to organize, like, taking big crews down to Disney World so they could get a true money guy experience.

Producer Rebey
And the kids are coming on this, I take it. I mean, they have to, right, with Uncle Brian. Bring him in. Money guy, Disney World. There's no better time.

Brian Preston
That's where he screwed up. Do you know how heartbreaking it was for Mike? Oh, girls, would you love them? Cause, like, they were young and they were bickering and fighting, and they were tired. But, man, we got to that resort pool, they loved it.

Beau Henderson
And I was like, girls, we could have done this back home. Like, this was something. We could have solved this problem. But you know what? It's a memory and it's blossoming even right now.

Producer Rebey
So is it the. So good, he's so bad. So good. You guys are funny. All right, well, Leandra, thank you for your question.

Thanks for being here in the chat today. We've got another question from Jacob. He says, how does 23 eight apply to a two car household? Is it as simple as using 23 four and using your household income to come up with those percentages? Or, since we will not always be paying on two vehicles, is 23 six appropriate?

And then he also says, looking forward to Atlanta. Oh, whoa. Hey, that's fun. He must be coming. Moneyguy.com book tour.

Beau Henderson
Love it. Thank you, Jacob, for that. I love this. One of the things that you figured out and you kind of, it was laced into your question, and I find a lot of people, I don't know why this seems so common sense, but they don't think about it, stagger your auto purchases, right? 23 eight.

One of the big things we talk about is that, three, we never want you to finance a car for longer than 36 months or for three years. Well, what's great is if you can set it up so that when you buy your cars, you never have two payments going out at once. So, like, you know, if you're a seven to ten year car driver and you buy a new car, you just know your next car is probably not going to happen until year four, five six. You know, somewhere down the line, I think that is a great solution. Now, his actual question was, if we do have to buy two cars, and if we do have to think about that, how does 23 eight work?

Is it, does it, do I get to do it for both? Percent is a household number. If you think about it. Where's the origin? What's the why on this?

Brian Preston
If we know housing is 25%, car payments can't be more than 8%. You can see we're trying to get your overall debt number below that 35% number because more than likely people have another little debt, whether it's student loans or something. So that's why the 8% needs to be household. So I like the idea of staggering. If you need to buy two cars at once, you need to probably save a little bit longer or you need to both focus on those used cars because, I mean, that's, that's the thing.

I had somebody, I saw it on, on the comments section, somebody was talking about how this would never work for new cars, even corollas based upon certain incomes. Now they were using net numbers, which, by the way, is the first mistake. Cause when we talk about 23 eight, we're using your gross income. But still, I was sitting there thinking, when did we all get to start buying brand new cars right out of the chute? I mean, it was.

Beau Henderson
It was for me. Yeah, no, I mean, it was. I was well into my. I think my first new car was definitely in my thirties. And I've told you guys, I didn't even feel comfortable financially because of all the discipline and other things until I was in my early forties.

Brian Preston
So, I mean, this thing, we don't get to come out and all of a sudden hit the ground running and then get to celebrate ourselves by buying brand new cars. The nicest of nice, these rules are to give you the discipline to give you the structure so you can still make sure that you're saving and investing for the future. While time is so powerful that wealth multiplier, if you go to moneyguy.com resources, we have an entire portal that you can start playing around with, with tools and other things on there. So make sure you're checking that out, because that's, that's a scary thing. And remember, there's a rule that always gets left out of 23 eight.

Your monthly investments have to exceed your monthly car payment if you're not doing that, because I see a lot of people with $1,200 car payments out there on social media, and I'm like, I bet if we pull the curtain back, they don't have $1,200 going into the future. And that also means if you got a $1,200 car payment, you likely didn't use this for the Corolla. You used it more for something that the needle's pointing closer to the Land Cruiser. So don't use it for luxury vehicles. When you do go to buy the car, it doesn't have to be like four and four.

Beau Henderson
It can be six and two. I've got a really good buddy, and they're in an unfortunate position where, like, both of their cars are kind of at the end of their life, and they got a young family. And he said, okay, here's what I'm going to do. I know that 23 eight matters, and I know that you know where we're at right now, we can't pay cash for the car. So I'm going to go ahead and replace my car, but I'm going to buy a very, very affordable super inexpensive used car.

And I'm going to aim to get that paid off as quickly as possible so that when it's time to replace my spouse's car, which is the family car, the one that goes on road trips, we know that that car is going to be a little bit nicer. That car is going to. It's going to require a little bit more. The fact that they're even planning for it right now shows me that they are such financial mutants. So it's okay to even stagger the quality of cars that you're buying so that you can make sure it works inside of your financial ecosystem?

Brian Preston
Yeah, we've all been there and done that. Absolutely. You have to triage your financial situation, figure out what's the most functional for your family, and then it's okay. If one of you is driving around in a jalopy and he was happy. With you know what, he is super happy with his jalopies.

Beau Henderson
It gets me from a to b. That's what I needed to know. Especially once they're paid off, buddy, they. Drive better when they drive. You tend to drive those cars longer.

Brian Preston
Once they're paid off, you're like, hey, if I can get another year, think of how much depreciation I didn't have. I love it. The money Guy show is hosted by Brian Preston, a bound wealth management is a registered investment advisory firm regulated by the securities and Exchange Commission in accordance and compliance with the securities laws and regulations abound. Wealth management does not render or offer to render personalized investment or tax advice through the money guy show. The information provided is for informational purposes only and does not constitute financial, tax, investment, or legal advice.

Beau Henderson
The information provided is for informational purposes only and does not constitute financial, tax, investment, or legal advice.

Producer Rebey
The information provided is for informational purposes only and does not constitute financial, tax, investment, or legal advice.