We're diving into some seriously eye-opening insights from wealth strategist Andrew Gold, who shares his wisdom on generational wealth and the wild world of financial habits. One of the standout points is the massive wealth transfer that's about to happen—think 60 to 80 trillion dollars over the next couple of decades! It's crucial stuff, especially if you're part of that sandwich generation balancing the needs of both kids and parents. We’ll also chat about "financial genetics," which basically means our money habits often mirror what we learned from our parents. Plus, we'll touch on actionable tips like teaching kids the real cost of things and the importance of investing early. So, grab your headphones and get ready for a fun ride through the world of finance!
Takeaways:
Wealth strategist Andrew Gold highlights a massive wealth transfer of 60 to 80 trillion dollars happening in upcoming decades.
Understanding 'financial genetics' can help us break emotional patterns tied to how our parents managed money.
Teaching kids about the real cost of things is crucial for their financial literacy and future success.
Recognizing that saving too much can lead to negligent gratification is vital for maintaining life balance.
Andrew Gold provides actionable tips on 529 plans, UTMA accounts, and Roth IRAs for financial planning.
His mantra of thinking in decades, not days, encourages patience and resilience in investing.
Today we're digging into some really interesting stuff from wealth strategist Andrew Gold.
Speaker B:
Yeah.
Speaker B:
Specifically from his appearance on about that wallet, episode 315.
Speaker A:
Exactly.
Speaker A:
And our goal here is to pull out the practical bits, the actionable knowledge about generational wealth and, you know, financial habits.
Speaker B:
Especially important, I think, if you find yourself in that sandwich generation caring for kids and parents, financially speaking.
Speaker A:
Right.
Speaker A:
And the context Gold lays out is just massive.
Speaker A:
He talks about this huge wealth transfer coming up.
Speaker B:
Yeah, the numbers are staggering.
Speaker B:
Like 60 to 80 trillion dollars over the next, what, 20 or 30 years?
Speaker A:
It's incredible.
Speaker A:
And he mentioned something fascinating, how younger generations inheriting now maybe in their 30s.
Speaker B:
You'Re doing things differently, taking big chunks of time off right away, kind of.
Speaker A:
Like an early retirement, decades before their parents might have.
Speaker A:
Yeah.
Speaker A:
So let's get into his ideas.
Speaker A:
He mentioned something called financial genetics.
Speaker A:
What's that about?
Speaker B:
Well, it's this idea that how we manage money isn't purely logical.
Speaker B:
It's often tied to how we saw our parents manage money.
Speaker A:
So, like, if they were always worried.
Speaker B:
About scarcity, you probably absorb that worry, too.
Speaker B:
Even if your situation is different now.
Speaker B:
It's an emotional pattern.
Speaker B:
Hard to just think your way out of it.
Speaker A:
Okay, that makes sense.
Speaker A:
So how do you break that?
Speaker A:
He talked about his own kids, right?
Speaker A:
Ages 2 and 9.
Speaker B:
Yeah.
Speaker B:
His strategy is about teaching them the real cost of things.
Speaker B:
Bridging that gap, you know, between wanting something instantly and understanding the work it represents.
Speaker A:
Like his example of a $60 video game.
Speaker B:
Right.
Speaker B:
That could be a whole day's pay for someone working as a server.
Speaker B:
Yeah.
Speaker B:
Making that connection concrete.
Speaker A:
That's powerful.
Speaker A:
And it ties into this idea.
Speaker A:
He mentioned a kind of proactive shift.
Speaker B:
Happening that's parents realizing that the old way, you know, money is dull.
Speaker B:
Business just doesn't cut it anymore because.
Speaker A:
The costs kids face today, like college, are just so much higher.
Speaker A:
They need that early expos.
Speaker B:
Exactly.
Speaker B:
Prepare them for what's coming, including potentially managing that inherited wealth we talked about.
Speaker B:
He also mentioned showing kids their accounts grow.
Speaker A:
Ah.
Speaker A:
Compounding made visual.
Speaker B:
Yeah, Physically seeing the balance go up over time, especially when the market's doing well, it makes compounding, which can be abstract, feel real, makes patience pay off visually.
Speaker A:
Okay, so this all feeds into his bigger philosophy, Planning with purpose, not just ticking boxes.
Speaker B:
Right.
Speaker B:
It's about finding balance.
Speaker B:
And he defines that using those five.
Speaker A:
Pillars of wealth management, financial planning, investments, taxes, estate planning, and risk.
Speaker B:
And the key thing is how they all connect.
Speaker B:
Right.
Speaker B:
Your investment choices affect your taxes down the line which impacts your estate plan, it's all linked.
Speaker A:
Which brings us to a really important warning he gave about negligent gratification.
Speaker B:
Ooh, yeah, that one hits home for a lot of people.
Speaker B:
It's the trap of saving too much.
Speaker A:
Driven by that scarcity mindset.
Speaker A:
Maybe those financial genetics again.
Speaker B:
Could be you end up hoarding, maybe missing out on important moments like time with young kids because you're working constantly to save.
Speaker A:
Or putting off that dreamtrip until you're older.
Speaker A:
And maybe your health isn't up to it.
Speaker A:
Bad knees, like he said.
Speaker B:
Yeah, exactly.
Speaker B:
And for the sandwich generation, juggling saving for retirement, maybe helping kids and parents.
Speaker B:
That pressure makes this negligent gratification a real risk.
Speaker A:
So how do you avoid that?
Speaker A:
He had a take on retirement planning, particularly for older folks.
Speaker B:
Yeah.
Speaker B:
For those over 50 or 60, he suggested thinking in phases.
Speaker B:
Phase one, realizing, okay, my financial security is actually handled.
Speaker B:
I'm good.
Speaker A:
Okay.
Speaker A:
Phase one is recognition.
Speaker B:
Phase two is shifting focus to lifestyle, Maybe cutting back work hours, actually using that vacation time.
Speaker B:
And phase three, full retirement.
Speaker B:
Enjoying the fruits of that planning.
Speaker A:
Right.
Speaker A:
So let's pivot to some actionable investment tips he mentioned, especially for getting kids started.
Speaker B:
Okay.
Speaker B:
So he touched on three main accounts.
Speaker B:
First, the 529 for college savings.
Speaker A:
And he mentioned that recent change.
Speaker A:
Right.
Speaker A:
You can roll over some of it.
Speaker B:
Into a Roth IRA now up to $35,000.
Speaker B:
Yeah.
Speaker B:
Yeah.
Speaker B:
It adds flexibility.
Speaker B:
Though you could argue if it's a sign that 529s aren't quite keeping pace with college costs.
Speaker A:
That's a fair point.
Speaker A:
What else?
Speaker B:
They have UTMA or UGMA accounts.
Speaker B:
They're flexible.
Speaker B:
Sure.
Speaker A:
But the big catch, it becomes the child's asset at 18.
Speaker B:
Exactly.
Speaker B:
Which can seriously impact their eligibility for college financial aid because it counts heavily in that expected family contribution formula.
Speaker A:
Good warning.
Speaker A:
And the third, the Roth ira.
Speaker B:
Powerful, but the child needs earned income.
Speaker B:
Still, he mentioned that 30 by 30 idea.
Speaker A:
Get $30,000 invested by age 30 and.
Speaker B:
The compounding tax free could realistically get you to your first million by retirement.
Speaker B:
It shows the power of starting early.
Speaker A:
Okay, so for someone just starting out, maybe a young person, where do they begin?
Speaker A:
Avoid getting burned early.
Speaker B:
His advice was pretty clear.
Speaker B:
Start broad.
Speaker B:
Don't try to pick winning stocks right away.
Speaker A:
Use low cost ETFs, like index funds.
Speaker B:
Yeah.
Speaker B:
Things like Voo or Spy that track the S&P 500.
Speaker B:
You instantly get diversification across 500 top US companies.
Speaker B:
It helps build positive momentum without huge risks from speculating.
Speaker A:
Makes sense.
Speaker A:
What about crypto.
Speaker A:
Always a hot topic.
Speaker B:
His take was moderation.
Speaker B:
Everything in moderation.
Speaker A:
So not avoiding it entirely, but keeping it small.
Speaker B:
Like 1% to maybe 5% of your total portfolio.
Speaker B:
The thinking is if it goes to zero, you only lost a small bit, but if it ticks off, the upside could be significant.
Speaker B:
It's framed as a bet against, say, long term US Dollar devaluation versus Bitcoin's limited supply.
Speaker B:
A small calculated risk.
Speaker A:
Interesting logic.
Speaker A:
Okay, wrapping this up, looking at the big picture.
Speaker A:
Investing over the long haul.
Speaker B:
Yeah, his final thought, kind of his personal mantra was really powerful.
Speaker A:
Think in decades, not days or months.
Speaker B:
Decades.
Speaker B:
Bet on yourself, be patient.
Speaker B:
And remember that phrase for writing out the inevitable market ups and downs.
Speaker B:
This too shall pass.
Speaker B:
Have that mental resilience.
Speaker A:
Think in decades.
Speaker A:
That's a great takeaway.
Speaker A:
So that was our deep dive into Andrew Gold's insights from about that Wallet episode 315.
Speaker B:
Lots of practical stuff in there, definitely.
Speaker A:
And if you found this helpful, please subscribe to the show.
Speaker A:
Maybe leave us a five star review if you liked it.
Speaker B:
And absolutely check out the full episode 315of about that Wallet for even more from Andrew Gold.
