About this video

• Video Title: How She Built $380k by 38 (Without a Six-Figure Job)
• Channel: The Money Guy Show
• Speakers: Bo Hansen, Brian Preston, Rachel (Guest)
• Duration: 35:29

Overview

This video features a discussion with Rachel, a 38-year-old single mother who has accumulated $380,000 in net worth despite not having a six-figure income. The hosts, Brian Preston and Bo Hansen, review her financial situation, investment portfolio, and savings strategies. They also address her concerns about over-saving and potentially missing out on present experiences, as well as analyze her life insurance policies to determine more optimal financial strategies.

Key takeaways

• Financial Achievement: Rachel, at 38, has achieved a net worth of $380,000 with an annual income of $83,000, demonstrating that significant wealth can be built without a high salary.
• Savings Strategy: She has a strong savings rate, contributing 12% to her 401k, receiving a 9% employer match, and maxing out her Roth IRA, resulting in approximately a 29% savings rate.
• Investment Portfolio: Her investments total around $140,000, with a significant portion in Roth accounts ($19,000 in Roth 401k and $80,000 in Roth IRA), indicating a good strategy for tax-free growth.
• Retirement Projections: "3D glasses" analysis shows that even with a conservative 6% annual return, her projected retirement portfolio could reach $2.4 million, and with a 10% return, it could reach $5.6 million, suggesting she is on track for comfortable retirement.
• Life Insurance Analysis: The discussion highlights potential inefficiencies in her current life insurance policies, particularly a "return of premium" policy and a whole life policy for her son, suggesting that a "buy term and invest the difference" strategy might be more financially beneficial.
• Maximizing for Son: By redirecting funds from less optimal insurance policies towards investments, her son could potentially have significantly more financial assets by age 65 ($1.4 million vs. $127,000 from the policy illustration).
• Present vs. Future: A key theme is balancing saving for the future with enjoying the present, with the hosts encouraging Rachel not to sacrifice current experiences if she is already on track financially.