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In this episode, fellow physical therapist and educator Dr. Sylvia Son joins Mike to share her personal finance journey. They discuss the importance of getting started with investing, that investing is not gambling, the impact of money scripts and psychology on personal finance, recommendations for physical therapy students entering the workforce, and that financial wellness is much more than trying to maximize salary. 

Takeaways

• Now is the best time to start investing
• The importance of the employer match
• Owning the market is not gambling
• Importance of educating yourself and understanding where your money is going
• How scarcity mindset and loss aversion impede getting started in investing
• Considering job benefits holistically and not looking at salary in isolation
• Being rewarded from employers for increasing your skillset

Music: Perpetual Motion by Amarent via FMA (public domain)

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In this episode, Mike recaps the key insights from season one of Rehab your Finances. He explores the interplay between money mindset and numbers, highlighting how both play key roles in financial wellness. Mike emphasizes how the benefits of optimism and purpose extend beyond personal finance, as they are protective against job burnout and are associated with greater lifespan and happiness in retirement.

Takeaways

• Importance of cognitive optimism in financial health
• Role of mindset in personal finance
• Impact of money scripts and self-talk
• The importance of savings rate
• The value of tracking net worth
• Practical steps for financial planning and wellness

References

• Belief in Exercise May Make it More Effective

Music: Perpetual Motion by Amarent via FMA (public domain)

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In this episode, Mike examines the impact of caregiving on finances. After outlining income and job growth data for physical therapists, nurses, and educators, he outlines key factors impacting job satisfaction and burnout among these caregiving professions. He then discusses the impact of caregiving for young children and/or aging family members, highlighting the value of a supportive workplace and building out a financial buffer. Throughout this episode, Mike emphasizes the importance of autonomy, competence, social connections, and reasonable workload on job satisfaction and sustainable financial wellness.

Takeaways

• PT, nursing, and teaching median incomes and job outlook
• Factors impacting job satisfaction and burnout, including secondary traumatic stress
• At least 20% of US adults are caregivers
• Childcare costs impact businesses, too
• Unpaid family care exceeds $96 billion annually

References

• Physical Therapy job data
• Registered Nurses job data
• Kindergarten and Elementary Teachers job data
• High School Teachers salary income and job data
• Teachers Becoming Millionaires
• Physical Therapy Job Satisfaction
• Factors Impacting Physical Therapy Burnout
• Impact of Secondary Traumatic Stress on Healthcare Providers
• Hospital Worker Job Satisfaction
• Teacher Job Satisfaction
• Economic Impact of Child Care by State
• Economic Impact of Child Care Challenges
• Financial Toll of Family Caregiving
• Get Paid as Family Caregiver

Music: Perpetual Motion by Amarent via FMA (public domain)

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In this episode, Mike discusses money scripts - our hidden and often subconscious beliefs and stories we tell ourselves about money. He explores the impact of these scripts on our financial wellness, highlighting scripts which are correlated with lower net worth, lower income, and higher revolving debt. Mike highlights how our feelings about money are often uncorrelated to our actual money numbers due to the money scripts we unquestioningly follow. In this episode, Mike provides a framework for discovering and exploring the money scripts which may be holding you back from financial wellness.

Takeaways

• Money scripts - hidden drivers of financial behaviors
• Klontz Money Script Inventory
• Scripts: money avoidance, money status, money worship, and money vigilance
• Remit Sethi's money types
• Money types: avoider, optimizer, worrier, dreamer
• How you feel about money is uncorrelated to your financial numbers
• High professional achievement does not necessarily correlate to rational financial decisions

References

• Money Beliefs and Financial Behaviors: Development of the Klontz Money Script Inventory
• Discover the 4 Types of Money Scripts! (Video)
• How Clients' Money Scripts Predict Their Financial Behaviors
• Money Scripts: Why Do We Make Poor Money Choices?
• Evaluating the Klontz Money Script Inventory with a Diverse Sample
• Money For Couples
• Remit Sethi's 4 Money Types

Music: Perpetual Motion by Amarent via FMA (public domain)

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In this episode, Mike questions whether the "magic" number for retirement is truly $1.46 million, as suggested in a recent Northwestern Mutual Planning and Progress survey. He outlines how to project your retirement needs by first determining your anticipated expenses and then applying the 25x rule. Mike discusses the key assumptions underlying the 25x rule and the 4% rule, including recent revisions to the 4% rule. He highlights why rules of thumb rarely align with real-life findings, citing evidence that most retirees end up needing and spending less in retirement than these rules of thumb would indicate. He closes by emphasizing how retirement extends far beyond financial numbers, citing examples of the common habits shared by the happiest retirees. In this episode, Mike provides a holistic view on retirement planning which places the financial numbers within the greater context of meaning and purpose.

Takeaways

• Is $1.46 million the "magic" number for a comfortable retirement?
• The importance of knowing your estimated expenses in retirement
• Social Security - insolvency does not mean gone
• 25x rule and 4% rule - helpful for back of napkin calculations
• Key assumptions underlying the 4% rule
• Retirement risks: inflation, sequence of returns, healthcare
• Most retirees do not live solely off retirement portfolios
• Healthy financial habits now carryover into retirement
• Happiest retirees emphasize social connections, curiosity, and purpose

References

• Americans Believe They Will Need $1.46 Million in Retirement
• Social Security Website
• Status of Social Security 2026
• What is the Retirement Spending Smile?
• Why Most Retirees Will Never Draw Down Their Retirement Portfolio
• Five Lifestyle Secrets of the Happiest Retirees
• What The Happiest Retirees Know: 10 Habits for a Healthy, Secure, and Joyful Life

Music: Perpetual Motion by Amarent via FMA (public domain)

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In this episode, Mike demonstrates how annual returns and time spent invested interact to produce unbelievable results which seem like magic. He peels back the curtain on the magic of compounding, including an in-depth discussion of how to make it work for you instead of against you. He highlights how each percentage point makes a tremendous difference in long-term investing, which is why you should understand how expense ratios and financial fees impact your returns. In this episode, Mike provides actionable insights to empower you toward taking control of your financial plan and wellness!

Takeaways

• The magic of compound interest
• Analogy of the lily pad taking over the pond
• Rule of 72 for estimating doubling time
• Importance of time in the market
• Using a compound interest calculator
• Nominal vs real returns (and why you should care)
• Why 1.5% is a big deal

References

• Compound Interest Calculator
• Passive Fund Information
• Understanding Expense Ratios
• Morningstar: When Do Active Managers Win?
• Vanguard's VOO Hits 1 Trillion Dollars
• How Much Does a Financial Advisor Cost?
• In Defense of AUM Fees

Music: Perpetual Motion by Amarent via FMA (public domain)

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In this episode, Mike discusses how investment types can be considered across the categories of equities, fixed-income, and cash. He breaks down the general risk and return of each investment type, including how risk and return can be considered when determining asset allocation within the investment accounts discussed during the last episode. In this episode, Mike provides actionable insights to help you make intentional and informed investment decisions.

Takeaways

• Investments fit into three main categories
• Sending your money out to make money
• Risk and reward in investing
• Tax considerations in asset allocation
• Benefits of long-term investing
• The importance of diversification
• Psychology of investing and avoiding unnecessary risk

References

• What is a Bond?
• Evidence for All Equities Portfolio
• Asset Allocation and Taxes
• The Simple Path to Wealth
• The Psychology of Money

Music: Perpetual Motion by Amarent via FMA (public domain)

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In this episode, Mike compares types of investment accounts including tax-deferred, tax-exempt, and taxable. He discusses key features of each, including tax benefits, contribution limits, and age restrictions on accessing invested money. As each type of investment account carries a trade-off between tax benefits and flexibility, Mike encourages listeners to thoughtfully consider their current, short-term, and long-term financial goals when investing.

Takeaways

• Thinking of retirement accounts as age-restricted accounts for a holistic view of finances
• Contribution limits, tax considerations, and access to funds across the investment account types
• Early withdrawal penalties
• Record number of 401(k) hardship withdrawals underscores the importance of an emergency fund
• Rule of 55 and SEPP for accessing 401(k) early without penalty
• The retirement tax triangle and diversifying across the investment accounts
• "Paper millionaires" and the middle-class trap

References

• Record share of Americans taking hardship withdrawals form their 401(k)s
• How does a 401(k) loan work?
• What is the rule of 55?
• SEPP explained: Penalty-free early retirement withdrawals and IRS rules
• The middle-class trap that could keep you from FIRE (how to escape it)

Music: Perpetual Motion by Amarent via FMA (public domain)

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In this episode, Mike outlines the order of operations in personal finance. He emphasizes the importance of building a strong financial foundation by building up an emergency fund, getting the company match, and eliminating high-interest debt. Once that foundation is built, he highlights next steps to bolster your financial wellness.

Takeaways

• The why and how of building a strong financial foundation
• Debt snowball or debt avalanche - which is better?
• How to integrate math and money psychology into your order of operations
• How the order of operations can increase your financial confidence

References

• A snowball's chance: Debt snowball vs. debt avalanche
• The debt snowball vs. avalanche method
• The Simple Path to Wealth
• The Future is Now: Age-Processed Images Motivate Community College Students to Prepare for Their Financial Futures

Music: Perpetual Motion by Amarent via FMA (public domain)

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In this episode, Mike focuses on understanding net worth and its impact on financial health. He explores the relationship between income, savings rate, and net worth, providing a data-driven approach to improving your financial health. He highlights how considering net worth creates a positive shift in money psychology by considering long-term financial health within the context of personal values and goals.

Takeaways

• Net worth is a key metric of financial health and increasing net worth can lead to greater freedom and flexibility.
• Knowing which rung you are on within the net worth ladder leads to better financial decision-making.
• The data on net worth and millionaires reveals that increasing net worth is an accessible goal for everyone.

Chapters

• 00:00 Introduction to Net Worth
• 09:34 Conceptualizing Net Worth
• 19:22 Trends in Net Worth Data
• 27:18 Linking Episodes: 50-30-20 Method and Net Worth

References

• The Wealth Ladder
• The National Study of Millionaires

Music: Perpetual Motion by Amarent via FMA (public domain)

Contact: [email protected]

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