00:00 Speaker A
According to the 2025 mind over money study by Capital One and the Decision Lab, a majority of Americans are concerned about not having enough money, especially when it comes to saving for retirement and the rising cost of living. My next guest says that there are some key mistakes that can get in the way of building wealth. I want to bring in Brendan Schlagbaum who is the Budget Dog founder and personal finance expert. Brendan, good to have you here with us. You say waiting to start investing, keeping cash idle, ignoring fees, underestimating healthcare costs, and holding too much cash can be risky. So, let’s break these down one by one. Let’s start with waiting to start investing. Why is that one of the top mistakes you see?
01:24 Brendan Schlagbaum
You know, the biggest myth I hear is, I’ll start investing when I make more money. But the truth is wealth is created by starting early. So the whole key is to start early and small amounts really compound. The biggest wealth building factor by far is time. So waiting costs you time, and time is one of those things you just can’t buy back, unfortunately. I wish you could.
02:15 Speaker A
Oh, me too. So, why should you avoid keeping cash idle? This is another mistake that you see.
02:27 Brendan Schlagbaum
So as you guys know, most banks are offering, I don’t know, 0.00001%. So you can easily move that cash into a high yield savings account, things like Ally, things like Marcus by Goldman Sachs, and there’s not really additional risk and it’s really easy optimization. So it’s a no-brainer move for anybody out there holding cash in a typical checking account.
03:13 Speaker A
Now, there’s the conversation of fees that catch a lot of people by surprise. Why should investors pay close attention to fees?
03:28 Brendan Schlagbaum
So fees may look small, you know, you may have a half percent there, you might have 1% there. But over 30 years, the reality is that’s six to seven figures. And these are things like expense ratios, AUM fees, back end load fees, transaction fees. And you wouldn’t overpay for groceries, so why would you overpay for retirement? Let’s focus on low cost index funds and ETFs and just watch your investments grow fee free in the most easy way possible.
04:16 Speaker A
And so one of the other things that we hear far too often, especially those who are close to nearing retirement or in retirement, risks of underestimating health care costs. What do you see there? How can you kind of flip that on its head and reverse it and set better strategies?
04:43 Brendan Schlagbaum
Yeah, so health care is one of those big hairy things that are 30 years in the future. So most of us don’t think about this, but the reality is it’s one of the biggest expenses in retirement and people underestimate this. And I know from a personal situation how much healthcare costs can be because of my daughter’s situation. She has Dravet syndrome, and these bills have totaled over $200,000 per year the last three years. She’s only three years old. And plot twist, Medicare doesn’t cover everything. So things like long-term care, dental, vision, out-of-pocket costs, unfortunately, that’s not covered. So you need to have planning ahead with an HSA or something like that. So when the time comes, you have the money to take care of yourself and your family.
05:55 Speaker A
Yeah, very key reminder there. Finally here, while we have you, why should you avoid holding too much cash?
06:07 Brendan Schlagbaum
Yeah, so with inflation, I think I don’t think that’s a secret at this point in time, uninvested cash loses purchasing power every single year. And most people think this is safe, keeping money in a checking account like we talked about. But over 10 to 20 years, this is a real wealth killer. And the crazy thing is, $100,000 in 2020 or in the year 2000 is now $187,000 today. So the cost of inaction, the cost of doing nothing, is costing more than it’s ever been before.
07:06 Speaker A
Brendan, thanks for taking the time here with us today. Really appreciate the breakdown. Hopefully, we can use some of these mistakes that you’ve seen to course correct for some other folks viewing out there. Appreciate it.
07:28 Brendan Schlagbaum
Thank you.
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