Here's a question: Don't know if it's healthy or unhealthy, are you richer than your friends?

Brian, I am so excited that we get to talk about this because often times, understanding where we line up with our peers can be helpful. It can be

a valuable exercise, but on the flip side, it also could be negative and it could be detrimental. Well, I want people to always take an active role in their personal finances. I think you've got to—you've really got to—figure out what gives you purpose, what's the 'why', what

brings you tremendous happiness so you can lean into that. But you also need to kind of know and hold yourself accountable: Are you ahead of the curve? Are you behind the curve? Are you right where you're supposed to be? And also, I want to dispel something I see out there

in social media, especially in the personal finance circles. One of the housing hack things that are out there is it says, 'Go buy the cheapest house on a nice street of homes; it'll go up and it's going to make a lot more money over the long term. You know, you'll be in this

nice neighborhood and you got in cheaper than everybody else; your house will likely appreciate more than others.' However, there is something that is left unspoken about that: If you are the poorest person on your street, you surround yourself—you have set yourself up... There's a reason there's a saying,

health and your happiness. So, if we're telling you, look, comparison is the thief of joy, and you don't want to always be the poor friend that can't keep up, can't go out to eat, can't go on trips, you still need to kind of take an

inventory of where you are so you can actually be on the healthy side of this. Well, I'll take it a step further: I don't think there's anything wrong with looking at other successful people that have made good decisions and figuring out, how do I take some of the decisions

they've made and apply it to my situation? So it's more about making it a learning exercise than a comparison exercise. So I don't want you looking at someone else saying, "Oh, man, I should have what they have," or live in that house or drive that car, but rather say, "Oh, if

someone's had some level of financial success, what are the behaviors and things that that person is doing that maybe I should begin instituting in my life so that I could have a similar outcome?" And I think one of the best things you can do if you really want to

level up your financial success is make sure you subscribe and ring that notification bell so you can stay up-to-date on all of the content that we put out there for you every single week. Let's jump in. So first of all, there's already this misconception: what's the

difference between wealth and what's the difference between being rich? A lot of people get those two confused. Just because you have a good income, you might be rich, but it doesn't necessarily mean you're wealthy. So let's first just jump into, for all those people who want

To measure off of income, where do people fall? Well, I think this is maybe even an unfair metric because where your income falls is very much dependent on what part of the country you live in. I mean, a lot of times when we do our net worth

studies or income studies, we'll get people in the comments say, yeah, yeah, but I live in this part of the country or I live here. And there is some truth in that. So we thought about, in terms of comparing or thinking about where our income measures up, we know that the

median household income in the United States is about $81,000 right now, this year, according to the Census Bureau in 2024. But if we look at high cost of living areas like Hawaii, or Massachusetts, California, New York, and New Jersey, you can see that those median

incomes are significantly higher than the national average; they're at $96,000, $106,000, $95,000. So if you are above the median income, but you live in one of those areas, odds are you're probably not feeling super wonderful about how your

income stacks up. This is why you have to be careful with stats because, I even look at New York and you see it's very close to the actual median, but we all know like New York City is completely different than other parts of the state of New York. So, but this is probably if

you're living in one of those high cost of living areas. We know you're hurting; we want you to feel that way, but it still—it puts a lot of pressure on you that you still, even though you might be above the median in a high cost of living area, the good

News is, a lot of times, these places are also where some of the higher incomes are earned. Also, if you're someone who lives in one of these lower-cost-of-living areas, and perhaps your income is below the median, but you live in a low cost of living area, you might

be actually feeling pretty good. So, assessing where you are and where you live matters when you're thinking, 'Okay, how should I be feeling?' But we know that you guys don't consider yourselves to be the median; you're the financial mutants. And so maybe one of

the questions you have is, 'How do we stack up to other financial mutants out there? How do I look when compared to other folks who tune into financial content and make wise financial decisions?' And we thought that this information, this data, was

fascinating. We looked at gross household income by age. Yeah, this one—this one kind of blew my mind—because I gave you guys a lot of credit, my financial mutants. I knew you're already a special type of person, that you tune into a

financial show to figure out how you can do things better with your personal financial decisions. Little did I know you guys are smart, you're successful, and you're overachievers when it comes to the income category. Because check this out: We broke it out; we stratified it to

those that—and let's focus primarily on those that make over $100,000. I can remember when I was in my 20s, I aspired to break six figures by the time I reached age 30. And it seems like a lot of you guys not only aspired

to that, but you blew the doors off of it because check this one: it really blew my mind. For 20- to 29-year-olds, 54% of our financial mutants make over six figures. It's wild! I didn't reach that status until...

For 30- to 39-year-olds, 83% of you financial mutants that did our survey make over $100,000. For 40- to 49-year-olds, 87%; for those 50- to 59, 86%; and for even those 60 and beyond—a lot of these people even potentially retired—72%.

That's amazing! It's unbelievable. So you may be sitting there asking this question: Okay, well, what do I learn from this? Obviously, the median for financial mutants is very different than the national average. So what are some key takeaways? Well, if you look at

this and you recognize that you are below the median, what are some things you can do? Well, the very first thing is avoid lifestyle creep. Just because someone else lives in a nicer home or drives a nicer car or takes more extravagant vacations does not mean that

that needs to be part of what you're doing. If you find yourself continuing to chase that lifestyle, what you're going to end up doing is squeezing out your ability—certainly at a lower income—to be able to build the financial future that you actually want. But when all that

cost of living is factored in, there are two things that hit me: We often hear that you only have two levers to pull—you can either make more income or you can lower your expenses. If you live in a low cost of living area...

See the data we just shared. Maybe you need to cut your expenses even more to figure out if some of that can turn into additional savings and investments. However, if you live in a high cost of living area—as I've already shared, this is the answer here—is that for a lot

of people who live in high cost of living areas, there's also a lot of income opportunities, meaning you can make more money in those high cost of living areas than people who live in, you know, the sticks or the rural areas of America. So go ahead and see if there's

some additional opportunities for you to level up your income. And if you're someone who is above the median income, maybe you're one of those financial mutants doing even better—one, celebrate your hard work; that's incredible! Now you have a large shovel;

you have something that you can use to begin to build towards financial independence. But don't be complacent. Don't just because you make a high income, just because you're able to comfortably make ends meet, that does not mean that you don't have to take your

finances seriously; you don't have to make wise financial decisions. Because we all know it's less about how much money you make and it's more about what you do with that money—how you effectively use your shovel. And if only there were some system or some method or some mechanism

that could walk us through, as we're making income, what we should be doing with our next dollar. It's almost like there needed to be an instruction manual, an order of operations, if you will, on what to do with your next dollar. And that's actually what we've created with

The Money Guy Show even went a step further with *Millionaire Mission*, the book that came out this year. And you guys, by the way, thank you for all the support on that! But if you want to just get a free copy of this resource, just go

to money.com/resources. We'll go ahead and share it with you on what you should do with your next dollar, so you don't fall into the traps of the typical American. We want you to fall into the financial mutant category, where you're a maximizer of every dollar that comes

your way. And so when we think about how we stack up and how we compare with our friends or our peers or other folks in our financial situation, we have to think about—especially in the context of financial order of operations—where does it begin? Where does it start? And for

most folks, one of the early places that we begin to see some differences between financial mutants and non-financial mutants is in cash reserves. How are you—or how are your peers—managing that?  The thing is, that's going to effectively keep your financial life out

of the ditch. Well, unfortunately, the typical American does not do this well. Now, I want to give one of our writers credit here because I think he'd be sad if I didn't use this analogy. I don't know how good it's going to hit, but I feel like I

have to use it anyway. Just like when there's an emergency, what does our federal government do? They send in the National Guard—oh, that they've got to protect the home! So our writer, Nick, wanted everybody to realize, 'Look, just like when you have an emergency, you'

Need to have something in your army of dollars that you can send in, so he came up with the "cash" guard. Oh God, it hit worse than I thought! No, no, no, no! People out there in the audience are laughing. So, in your army of

dollar bills, just like we need a National Guard, you need a cash guard. And why is that the case? Because most folks don't do it. We know that right now 56% of Americans could not come up with $1,000 for an emergency without going

into debt. That is a problem, and that is a sad reality that exists right now in this country. Yeah, and this one scares me because that's when you make those desperate decisions. Life is going to throw some chaos at you, no doubt; you never know what's coming your way, and if

you just don't have $1,000, how are you going to cover your health insurance deductible? How are you going to cover it if you got in a car accident? That's why step one, highest deductible, covers the financial water operations; it's your first

level, so you're not making those desperate decisions. And we know that right now, uh, if you look, the average healthcare deductible in the United States is about $2,500. So if you have accumulated $2,500 and you have passed step one of the financial order of

operations, you're already, in the context of this show, richer than 56% of Americans that could not come up with that. So make sure that you're making the decisions that will prevent your financial life from falling off the rails. And this is more of doubling down

On the bad decision-making, we already knew Americans couldn't come up with $1,000. Well, you're not going to be surprised to learn that 72% of Americans don't have a fully funded emergency fund of 3 to 6 months. I wasn't

completely shocked by this. If 56% can't even reach $1,000, why would we expect 3 to 6 months to be even better? Of course, it's going to be a worse number. So again, thinking through the context here, if you are in step five

and you're funding a Roth IRA or funding an HSA, that means that you have already built a fully established emergency fund in Step 4. If you've done that, you're doing better than 72% of your peers out there. So then the question becomes, okay, if these folks

even were the median income in the United States, if they have this money coming in and they're not building it up in cash reserves and they can't even come up with $1,000 for an emergency, where's the money going? What is happening to it?

Yeah, well, that leads to consumption decisions unfortunately. And look, there is an entire industry out there trying to get you to easily part with the money you earn, and they just want you to spend it—not save it, not give it away—they just want you to spend it on their consumable goods and

a lot of times that's done through high credit card debt. Yeah, it's this idea that I can afford anything in the world one month at a time, a couple hundred bucks at a time. If I can swipe it, I can afford it. And far too many Americans are

falling into the trap of not living below their means, which is what you're supposed to do, and not even living at their means, but actually living beyond their means. They are literally robbing their future selves of financial independence by accelerating those consumption decisions into today.

If you are someone who finds yourself in that place, I think that you're doing it wrong; you're not stacking up well. That's why this is, once again, giving back to the financial order of operations; this is why this is step three. High interest debt—you've got to get that under control.

There's no way you'll ever get ahead if you're expecting to make somewhere between 8% and 11% out of the financial markets while you're paying somebody else twice that with credit card debts being over 20% these days. So that's why

we wanted to give you some guardrails or some ways you ought to think about this so you just don't fall into those same traps. Yeah, no, don't misunderstand us; we are not anti-debt zealots. That's why we even talk about low-interest debt and

it's okay if you have low-interest debt, and you can even push that all the way back to the end of the financial order of operations, back to step nine. But if you have high-interest debt, things that are often tied to consumption, well, that's something that has

to be prioritized before you start saving and investing, before you start building, and likely even before you build up a full emergency fund. So one of the questions we get asked all the time, Brian, is how do I know what counts as high-interest debt?

Debt: Does it change, and how do I quantify where it falls in my financial order of operations?  Yeah, so we figured we'd go ahead and, you know, cut to the chase, give you a head start on some things we've realized over

our time. So we even stratified this by age. Obviously, you're different in your 20s versus the journey you're on in your 40s, so that's going to change things. Student loans, for instance; we know

that's a noble thing, bettering yourself through education, but there is such a thing as too much of a good thing.  A lot of people have fallen into a lot of student loan debt, and that's why we always remind people of some key things. But let's give you the overview:

First of all, these categories: student loans. Looking at risk premiums, your age, the opportunity cost of what that money could do. For student loans, it's 6% for those with 26% or greater interest; it's over 6%. You may want to prioritize paying it off.

That counts as high-interest debt. In your 30s, it's going to be greater than 5%; 40s, greater than 4%. Now that's completely different than, like, car loans. Sure, car loans—look, I get it, these are higher percentages—but we also know that

the difference between student loans and car loans is that car loans, especially when you follow our 2-3-8 rule, are going to be extinguished and gone within 3 years. We're not going to let these things hang around and just punish you over and over.

Again, we're going to get them extinguished as fast as possible, so that creates a little bit more grace in how long, you know, the interest rates can be before you can focus on other goals. So if you're in your 20s, it's

greater than 10%; 30s, greater than 9%; in your 40s, it's greater than 8%; and then obviously, uh, credit cards are a zero-sum game. If you have credit card debt, we want you to get it paid off.

We have a little saying around here, Bri, how's it go? It goes, "Credit card use is okay, but credit card debt, no way!" And look, I get it; a lot of you financial mutants think you're just getting away with something incredible with these 0%

credit card introductory offers and playing the transfer game. Don't do it! These things are traps; they literally are traps that they're trying to get you to fall into because, instead of you addressing the behaviors that keep digging the hole deeper and deeper and deeper, you're just moving the shells

around the table and not actually extinguishing the debt. So don't fall into that trap because, also, what people don't realize about these things is a lot of times they accrue in the background; they have fees, like even transfer fees of 3 to 5% of the balance.

There's all kinds of little caveats or asterisks or small print that you can fall into a trap and you're like, "Uh oh, I didn't realize that. I thought I was so smart." No, the banks have fleets of people that are smarter working on this.

Stuff hoping that you fall into the trap and you're always going to be under their thumb. So what we've done is we've devised some rules to help try to keep you inside some guardrails when it comes to the times and areas where you

might use debt for student loans. We have a first-year financing rule: we do not want the total amount of student loan debt that you accumulate to be greater than your first-year salary. So if you're going to come out in the vocation that you're studying for and make $50,000 a

year, you want to make sure you keep your student loan balances below $50,000. When it comes to buying cars, you already alluded to this, Bri. We have our 20/3/8 rule: we want you to put 20% down, we don't want you to finance for any more

than 3 years, and you cannot let your car payments exceed 8% of your monthly gross income. Luxury cars do not apply; if you buy a luxury car, it has to be paid off within one year—same as cash—and under no circumstance should the amount that

you have monthly going towards your auto payments be more than the amount you have going towards your investments. If you can do that, if you can stay inside of those lines, inside of those guardrails, you're going to allow yourself to get through this debt, get it paid off,

and then get to this phase of life where you can start actually building for a great big, beautiful financial future. Well, what's amazing is I already went and talked about how consumption decisions trap a lot of people, and if you need more proof, just realize that

We're right at the halfway point, basically a fork in the road. That half of Americans are carrying a credit card balance every month. What was it saying again, Brian? Credit card use is AOK, okay, but credit card debt—no way. So you're saying that 50% of Americans, one out of

two, is not getting that second part; they're actually carrying the balance from month to month, letting compound interest actually work against them. Yeah, and realize a lot of these credit cards are charging greater than 20%. Matter of fact, there's even potential that I mean

the whole political season, one of the most bipartisan things that I saw coming out of the presidential election was multiple people saying, 'Hey, wouldn't it be great if banks were capped at like 10% on credit card debt?' Because it is crazy that we let the banks charge twice

what you can even hope to get out of the financial market. So don't fall into that trap. This is a Choose Your Own Adventure; you just get to choose if you're going to fall into this consumption trap that the banks have set up for you. If you

want to know how bad it is, like how steep the chasm is, look at this: the average American credit card balance—not that they're using, but that they are carrying over month to month—is a little over $7,000. That's those are dollars that are

accruing interest every single month. Now we're talking about how do you stack up to your peers and how do other financial mutants—and how does the average American work? Well, the average American, one out of two of them, carries a balance month-to-month, and that balance on

The average is about $7,000. And yet, when we did our financial mutant survey of tens of thousands of you and asked how you use credit cards, we found that 88% of you have no credit card debt. That's not to say you don't use

credit cards; you fall into the credit card *use* category okay, but you recognize that it can be absolutely detrimental to your financial wealth building. You said, "I am going to carry $0 over month-to-month and have absolutely no credit card debt." So go ahead and fall into the

comfort of the behavior that nine out of 10 financial mutants are paying their credit cards off every month. That's right, nine out of 10 financial mutants are doing this. You should do it too, because I've shared it many times: all of our seven-figure, eight-figure

clients—I don't have a single one of them that came to us as prospects and said, "You know what? I need you guys to help me tackle paying this credit card debt." It's just not the behavior that you see successful people struggle with. So if you are struggling

right now and you're trying to extinguish that debt, let's make sure that you go ahead and just cut it up, be done with it, and let's get on the right side of this. All right. So we've talked about the foundational stuff; we've

talked about cash reserves and consumption decisions. Now let's talk about the exciting stuff. Let's talk about the actual wealth-building behaviors of folks making sound financial decisions, how that stacks up to the average American, and how that stacks up to the

financial mutant because we know that when it comes to the financial order of operations, the early steps are all about building the foundation: steps one, two, three, four—foundational. But then, once we get into steps five through seven, now we're talking about building wealth; now we're

talking about doing something pretty exciting. Well, but we first—I mean, there's a reason it's step number two in the financial order of operations—is we have to get that free money from the employer. I want to think about this: if somebody came to you—we've done so many

401(k)s, but it's been a while since we've made this analogy—is that if every one of you guys who's watching right now, if somehow, in some creepy way, I knew where your home address was and I, like Ed McMahon, could just show up at your house

and I said, "Hey, I sent you a text. I said, 'Hey, by the way, um, go check your front door.'"  It wasn't Amazon that set off your Ring doorbell cam; it was me, and I set up outside your door. I set up $500 just sitting there waiting for you

in an envelope. Every one of you guys would immediately go to your front door and check and say, "Holy cow, he really did leave me $500!" You would just be so excited about it. And that's why that 50%–100% guaranteed rate of return that your

employer's offering you, if you will just contribute to your retirement plan, is so powerful that it made it to step two. Yep. Now I set that up with you where we've already figured out we're all going to just dash as fast as we can to see if

Brian actually gave you $500; meanwhile, when I pull the stats for what the typical American is doing, one in four Americans are not getting their full employer match. It's devastating! What are we doing? One in four Americans don't like free money—that's...

what I'm hearing. One in four Americans just wouldn't go to their front door to see if Brian was out there with a $500 envelope. And what that means is one in four Americans don't recognize just how powerful their dollars can be.

If you think about this, when you think about small, incremental decisions, it's small decisions over a long time period that can have a huge impact. We've talked about this in the past. We talk about, okay, if I could just save 1% more...

and I'm 25 years old, what does that practically mean for me? Well, that means that by the time I get to retirement, me saving 1% more today could replace 6.5% of my income when I get to retirement. At 35, if I can save 1%, it

Are You Richer Than Your Friends?

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