All Episodes

June 24, 2025 23 mins

Send us a text

Find "Your Fiscal Physical" the book on Amazon at: rb.gy/3shpfk

If you have suggestions or feedback, please email us at: Podcast@AlchemyWealth.com

And, as always, STAY THE COURSE!

Mark as Played
Transcript

Episode Transcript

Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:01):
Welcome to the Fiscal Physical Podcast.
Join us each week as we sitdown with the founder of Alchemy
Wealth Management and author ofyour Fiscal Physical, Ryan
Nelson.
Tune in to gain valuableinsights and practical tips as
we simplify complex financialconcepts into digestible lessons

(00:22):
.
From budgeting to retirementplanning, this podcast is your
go-to resource for masteringfinancial literacy.

Aaron Hoisington (00:33):
Welcome everybody to this week's episode
of the Fiscal Physical Podcast.
My name, as always, is Aaronand as always, I'm joined by
Ryan Nelson, the founder ofAlchemy Wealth Management, a
published author.
Find his book on Amazon Highlyrecommend.
I'm actually looking at itright now too.
So good read.
Definitely something to a quickread too.

(00:54):
It's relatively digestible forpretty much everybody of every
skill level of reading.
So definitely check that out.
And, ryan, how are you?
I guess I should start withthat.
You definitely check that out.
And Ryan, how are you?
I guess I should start withthat.
You're sitting right there.
I am doing well.
How are you doing?
I'm doing well, my man.
You know, another beautiful dayhere in Reno, nevada is where
we call home.

(01:14):
So, hopefully, wherever youmight be listening from whether
it be Reno, sacramento, seattle,thailand, whoever you guys are
tuning in at we appreciate you.
And today, ryan, we're going totalk about understanding your
paycheck, breaking down thepaycheck.
So I'll preface that a littlebit with hopefully, everybody's
gotten a paycheck, who'slistening to this at some point

(01:37):
or has seen a paycheck in someregard?
But today we're going to breakdown what actually a paycheck
normally consists of.
Maybe pull back the curtain, Iknow when I first got my first
paycheck.
I was thinking back when I waswriting this episode about when
was the first time I got apaycheck, and I think I was 16
or 17.

(01:57):
I want to say something likethat, and I remember getting it
and being like, well, where'sall my money?
And then, two, I was like whatare all these items?
What am I doing with this here?
So some people still might havethat effect today, and so we're
hopefully going to peek behindthe curtain of what actually
goes into a paycheck and whatpeople might end up paying and

(02:18):
hopefully you guys will learnsomething.
But Ryan, go ahead and takeover my man.
Let's do it.

Ryan Nelson (02:22):
So, yeah, the two terms you may hear most likely
or most often around pay is likegross pay and net pay, and I
find those two terms to getmisused pretty often and
confused.
So let's start by clarifyingthat.
Sure, so gross pay iseffectively how much you're
earning, how much your employeris telling you earning.

(02:44):
So if it's your salary, it'syour salary.
If you're making $100,000 ayear, your gross pay is $100,000
a year.
If you're making $20 an hourand you worked 40 hours that
week, $20 times 40 hours is $800.
Your gross pay that week was$800.
So gross pay is the totalamount you've earned.
Now to your point.
There's going to be a bunch ofthese deductions and reductions

(03:05):
and things taken off of yourpaycheck and if we just said
somebody earns $800 in a weekwhen they see their paycheck or
it actually hit their bankaccount, $800 is not hitting
their bank account.
Some amount less than that ishitting their bank account,
right?
So what we call what's hittingtheir bank account, we call that
their net pay.
So gross pay is going to be thebig number, the front end,

(03:26):
before any of these deductionscome out.
The net pay is going to be sortof the final amount that
actually, after you net out allthese differences, it's what
actually hits their bank account.
So gross pay versus net pay Nowthe difference between those
two is all these deductions.
So let's start diving into those.
So one federal income tax thatis just money paid to the IRS

(03:48):
based on your income, right?
So you will in your W-4, youwill pick sort of how many,
you'll pick your elections andyou have a little bit of control
over there about how much willbe deducted and sent to the IRS
on your behalf.
So you can adjust yourwithholdings to try to increase
or decrease how much you'repaying to the IRS.
On the front end it won'tchange at all how much you pay

(04:12):
to them at the end of the year,right?
But it can help sort of adjustthroughout the year to try to
pay up the approximately rightamount so that at the end of the
year you don't owe a ton or geta huge refund Makes sense.
So federal income tax,obviously that's a big amount
that goes, it's withheld by youremployer and sent directly to

(04:32):
the IRS.
That's one of the big piecesthat come off right Sure.
Oh yeah, that's a big one.

Aaron Hoisington (04:35):
Yep, sam gets his, oh yeah.

Ryan Nelson (04:37):
Then there's state income tax.
It operates very, very similarto the federal income tax,
except it's going to be statespecific.
So you and I right, we livehere in Nevada the state income
tax is Zero.

Speaker 1 (04:50):
It's a nice percentage.

Ryan Nelson (04:52):
As far as taxes go, it's a pretty attractive one,
right it is?
Yes, so not every stateobviously has state income tax.
We are two examples of peoplewho do not have state income tax
, but most states do have stateincome tax.
So that just gets people who donot have state income tax, but
most states do have state incometax.
So that just gets deducted withthe employer deducts that from
their pay, sends that to thestate, similar to how the
federal one was withheld andsent to the IRS.
This is going to do the sameit's going to be deducted from

(05:15):
your paycheck and sent to yourstate by your employer.
This can get a little confusing.
So like, for instance, I liveddown back when I was doing
engineering.
I lived in Vegas but I actuallyworked in.
California Um and so I washaving, even though I lived in
Nevada I spent all of my time inNevada.
I drove like five miles intoCalifornia to work, Um, so I

(05:38):
used like five miles ofCalifornia state highway, Um,
and I still had to payCalifornia state income tax,
despite living in Nevada, right?
So this one can get a littlemore complicated if you're
living.
Same would be true if you'reliving in California but working
in Nevada California will stillget their state income tax.
So something just to payattention to there.

(05:58):
But Definitely.
Then on top of that there's likeFICA Social Security and
Medicare taxes.
On top of that there's likeFICA, Social Security and
Medicare taxes.
So FICA is the combination ofSocial Security and Medicare,
and we talked in a previousepisode about the
self-employment tax.
That's effectively this Just asa normal employer, you're

(06:20):
paying half and your employer ispaying half, right, yeah?
So you're paying 7.65% and youremployer is paying 7.65%.
So again, if we take thatemployee who is on a salary at
$100,000, they're going to owe7.65% of $100,000.
That's going to be $7,650.
They would be owed to FICA,Social Security and Medicare to

(06:44):
cover all of these differenttaxes, and then your employer
would also put that in on yourbehalf as well, right?
So, again, if you'reself-employed, you'd be paying
both sides of it, so over 15%,but if you're a W-2 employee,
you'd only be paying half of it,the 7.65%.
But that's another deduction,right?
Then you have health insurancepremiums, so a lot of employers

(07:04):
will be offering healthinsurance.
Oftentimes you're part of theirgroup health insurance policy
and so maybe there's potentialthat they're potentially
subsidizing it or getting you adeal, but you're still often
paying something for thosehealth benefits, and that is
typically going to get deducteddirectly from your paycheck,
right?
So whatever plan you end upchoosing, that could also

(07:25):
include dental and vision aswell.
So normal medical dental visionthat is often going to be
pre-taxed, so that would comeoff before you determine how
much you're being taxed, butnonetheless, it's again one of
those things that's beingdeducted from your paycheck.

Aaron Hoisington (07:40):
Oh yeah, these are adding up.
Yeah yeah, I know right, We'vebeen talking for a while here.

Ryan Nelson (07:45):
And then, on top of this, there's 401k
contributions.
Oh, yeah, a good 401k, yep, soyou may elect to contribute to
your 401k.
There's different types of401ks there's pre-tax and
there's Roth, and so there'spre-tax and after-tax 401k
contributions, and so they maysort of get deducted at a
different stage, either beforetaxes or after taxes, sort of

(08:08):
get deducted at a differentstage, be either before taxes or
after taxes, but nonethelessthis is again coming off of your
paycheck before the money hitsyour bank account, right.
So this could either lower yourtaxable income, depending on
which one you're doing, and youcould.
Again, a benefit here is youmight be getting an employer
match, which would sort of begetting thrown into your 401k as
well, coming directly from youremployer, which is nice.
But so any sort of businessretirement plan is typically

(08:29):
going to be deducted from yourpaycheck again before it hits
your bank account.
Then, on top of that, you may becontributing to an FSA or an
HSA.
So we had some podcasts aboutthat, flexible spending accounts
and health savings accounts.
Remember the FSA?
The flexible spending accountwas kind of that use it or lose
it account.
The HSA or the health savingsaccount, that's for people with

(08:50):
the high deductible healthcareplans and that's where they can
invest the money in there and itcan roll over year after year.

Aaron Hoisington (08:57):
Triple was it called triple advantage, yeah,
something like that.

Ryan Nelson (09:00):
Yep, so both the HSA and FSA, those contributions
are typically going to bededucted Not necessarily, but
oftentimes if it's anemployer-sponsored plan, it's
going to be deducted from yourpaycheck and be contributed to
your FSA or HSA.
Again, those are both going tobe pre-taxed but still deducted
from your paycheck.
And then, in addition to all ofthat, there could be other

(09:23):
potential typically benefits,but like union dues.
So as a part of a union, oftenthat's deducted times, that's
the dues are deducted from yourpaycheck.
Um, some, um some companieshave like gym memberships and
stuff that you can run throughyour paycheck and there'd be
some reasons why you want to.
You can potentially get apre-tax and stuff, but, um, you
might have like gym membershipcosts deducted from your

(09:43):
paycheck.
Things like parking or here wedon't really have it, but
there's some commuter benefits,typically for bigger cities.
And then, on top of all of this, some employees will offer
optional ESPPs that stands forEmployee Stock Purchase Plan.
Oh, okay, and that'd be avoluntary benefit you might be
participating in.

Aaron Hoisington (10:05):
We should do an episode on that Actually,
yeah, I was going to write thatdown.
I was like, yeah, that soundslike that's a good episode.

Ryan Nelson (10:08):
Yeah, absolutely yeah yeah, we'll have to do that
in a coming episode.
Those are good plans to talkabout, but, either way, this is
another thing that if you chooseto participate in the ESPP
employee stock purchase plan,it's another thing that's being
deducted from your paycheckbefore it hits your bank account
, right?
And then also, you could havethings like wage garnishments,
right, so your wages couldliterally be getting garnished

(10:30):
from your paycheck before ithits your bank account, and so
I'm confident that I probablyeven missed some things here.
Sure, oh yeah.
But in summary, you have yourbig things your federal income
tax.
You have your state income tax.
You have your FICA SocialSecurity Medicare costs.
You have your health insurancepremiums, fica social security
Medicare costs.
You have your health insurancepremiums, 401k contributions,

(10:54):
fsa or HSA contributions, uniondues, gym memberships, all of
those sort of one-off things.
And again, after you subtractall of that, what's left over in
his or her bank account?
That's your net pay.
So again, you have your grosspay.
That was your total pay.
You take out all of these smallto large expenses that end up
adding up.
Whatever is left over is yournet pay.
That's what actually hits yourbank account.
So, yeah, it is important tounderstand all these and get a

(11:18):
feel for what you actually owe.
And again circling back to onone of our more recent episodes,
we talked aboutentrepreneurship.
If you're an entrepreneur,right, if you're a W-2 employee
and you're receiving your W-2,your paycheck, all of this is
sort of being deducted from itautomatically and then you just
receive your net pay to yourbank and you don't have to
necessarily worry about this.
If you're your own businessowner and you're not getting a

(11:42):
W-2 paycheck, you're responsiblefor taking care of all of this
on your own, making sure thatthe money's going to the right
place, to either the federalgovernment, to the IRS, to the
state government, to Medicare,to your 401k, to your HSA right,
you're responsible for makingsure this all comes out and gets
paid to the appropriate place,people at the appropriate times,

(12:04):
right.
So it is important to, I think,know where all your money's
going really right oh yeah it.
Also, though, you should havethe capacity to be able to spot
errors.
So nobody's payroll system isperfect, and most people can
probably think of an example inthe past or know somebody where
their paycheck was wrong andsomething was happening, and if

(12:24):
you don't understand whatdeductions there should be, then
it'd be hard for you to kind ofcheck and make sure that you're
getting paid right.
So I think there's some value indoing some research and
figuring out more about thesedeductions and making sure which
ones apply to you and makingsure that your pay is right and
you have some obligation to makesure some of these are right.
So even if the error is in yourbenefit and you're like, oh, I'm

(12:44):
getting paid more Uh that mayseem good on the front end, but
there's going to be somenegative repercussions on the
backend, so even that you mightwant to catch as early as
possible, right, um, and so,yeah, I think it just helps
encourage sort of that.
It helps avoid any surprises atthe end of the year if you know
sort of the background of allof this, and it helps sort of
encourage this, this, thisproactive, future-looking

(13:08):
planning.

Aaron Hoisington (13:09):
No, I think that that's super well broken
down and you really hit on thepoint that I was hoping to
accomplish with this is beingable to want to understand of
where that money's going,because you think about it.
If you're making $100,000, welove round math here you get 26
paychecks a year.
If you get paid biweekly,you're roughly just under $4,000

(13:29):
a paycheck or something likethat.
Sure, so you're like okay, cool, I'm going to make it $100,000.
I'm going to make $4,000 apaycheck.
You start planning for that ifyou will.
And then you're like, oh, waita minute, I'm actually only
getting $2,500 a paycheckbecause of all these different
things.
The idea of like, hey, I'mmaking this amount of money,
it's like cool, but what are youactually making?

(13:51):
Sure To it, and I think that'sthe.
That's the big thing forbudgeting or planning, and I
always think that it's.
It's an interesting thing whenyou go to you know, we talked
about buying a house on the lastepisode and you go to get
pre-qualified for these certainthings and they ask what your,
you know, your, your, yourannual salary is in these
certain things and you're like,oh, cool, I make 100 grand.
And they're like, oh, awesome,great, you can afford XYZ.

(14:13):
It's like, well, actually Idon't make 100 grand.

Speaker 1 (14:16):
It goes into specific .

Aaron Hoisington (14:17):
It doesn't hit my bank account.
Does it go into certain thingsthat I can use, or assets?
Sure, but just having that inmind of like, oh, like it's not,
you're going to get thesethings deducted Once again.
This is if you're employed andyou're actually getting a
physical paycheck.
The second piece is justthinking about equating it.
Once again, you mentioned tothe entrepreneur place of all

(14:40):
those different things.
That in my head was just kindof spinning.
Thinking about these, I'm like,holy cow, you got to cover all
of these yourself.

(15:03):
Wow, that's incredible.
But, the big one too, is the airspotting.
I think that being able yeahyeah yeah, you're seeing all
these different things and oneunderstanding why they're there
and then also understanding likecool, I'm paying into this, got
to make sure that that's there.
So I think it's all a big, it'san important piece to know
exactly.
It might not be very sexy to golook at your paycheck every

(15:25):
week and break it down, but Ithink it's a good thing to be on
top of and at least be aware ofwhat's coming out and why
that's coming out specificallyYep.

Ryan Nelson (15:34):
So let's do a little quick trivia.

Aaron Hoisington (15:36):
Sure Sweet.

Ryan Nelson (15:39):
O-A-S-D-I.
So that is again one of the.
I kind of glossed over it inour initial thing, but that is
one of the things that will bewithheld.
So, o-a-s-d-i, what do youthink that stands for?

Aaron Hoisington (15:49):
Oh boy, oh boy , oasdi, I couldn't.
I had to Google this.
I didn't even know off the topof my head.
I have no idea even what any ofthose letters would mean.
I can't even Like theoccupational Okay, occupational
Advocacy, security, disabilityInsurance you got two words

(16:12):
right, all right, yeah, so itstands for old age survivors and
disability insurance.

Ryan Nelson (16:17):
Okay, so OASDI is social security.
Okay, there's a reason why wecall it social security, because
OASDI doesn't roll off thetongue, and old age survivors
and disability insurancecertainly doesn't roll off the
tongue.
But so anytime you see likeOASDI on your paycheck, that's
just social security.
Good to know.
Yeah, and social security isone of the things that makes up

(16:38):
FICA tax, and FICA stands forFederal Insurance and
Contribution Act.
So you take social security andMedicare.
That makes up FICA.
So Medicare and OASDI make upFICA.
So it's a little bit ofalphabet soup there?

Aaron Hoisington (16:52):
Yeah, it is.

Ryan Nelson (16:53):
So yeah, it can be a little bit.
When you're looking at yourpaycheck it could be maybe a
little overwhelming, buthopefully maybe this empowers
you to have a little moreknowledge there.

Aaron Hoisington (17:00):
Yeah, absolutely.
And plus, like we've mentionedon previous podcasts, the
resources that people have outthere and being able to, well,
hopefully, just call yourfinancial advisor and be like,
hey, what does this mean?
Because I know if I sent you acopy of my paycheck, ryan, you'd
be like, oh, that means this,this means that, or you'd ask
somebody and they'd figure itout for sure.
So, just being aware, beingcognizant, being financially

(17:22):
literate when it comes toactually where your money is
coming from, I think can be ahuge benefit.
And just a peace of mind too,Because if you don't know, what
you don't know.
We've talked about that before,and people are sometimes scared
to look stupid for asking thesequestions about like oh, what
does OASDI mean?

Speaker 1 (17:40):
Like, oh, you don't know what that means.
No, Nobody does.

Aaron Hoisington (17:41):
Nobody does, but it's provocative.
So, I think it's an importantpiece to just kind of plug to
make sure.
Hey, if you don't know, askyour employer.
Your employer should be able topoint you in the right
direction of what this actuallymeans.
Why are they taking this moneyout so big piece there, but
awesome, Ryan.

Ryan Nelson (17:58):
Anything else you want?

Aaron Hoisington (17:59):
to do before we move to the personal section.

Ryan Nelson (18:01):
No, that sounds great.

Aaron Hoisington (18:02):
Awesome, Sounds good man, Appreciate it.
Thank you everybody.
We'll be right back on theother side of this.

Speaker 1 (18:07):
And now to put the personal in personal finance.

Aaron Hoisington (18:18):
Welcome back everybody to this side of the
Fiscal Physical Podcast, stillhere with Ryan Nelson and Ryan,
I have a great question for youtoday.
I was really thinking aboutthis.
I laid in bed the other nightlike thinking about my answer,
so I'm curious what you're goingto say here.
So my question to you is whatis your ideal Saturday?
Paint me a picture If you couldchoose anything or things to do

(18:39):
on a Saturday, what would thatinsist of?
So Saturday specifically huhWell.
I say Saturday because this ismy logic on it.
Friday you're probably workingon a Friday.
Saturday you have that day off.
You don't have to go back towork the next day.
So you're still, relativelyspeaking, or whatever, but you
have that extra day to eitherrecover or spend it doing

(19:02):
whatever you want to do.
This is your perfect Saturday.
Like what?
Would you anticipate that?

Ryan Nelson (19:07):
being.
Well, what I was originallythinking was, if this was a
Sunday, my perfect Sunday wouldbe like being in Green Bay Sure,
watching, going to LambeauField and watching the Packers
play a football game that's justso fun.
And the tailgating beforehand,the game itself, the hanging out
afterwards, it's just all sofun.
But it was Saturday,specifically, and the Packers

(19:31):
play on Sunday.
It makes it a little tricky.
But during the playoffs theyplay on both Saturdays and
Sundays.
They do.
So I thought that'd be prettycool to do on a playoff game.
Sure, it's got to be evencooler, right?
So I think a playoff game inLambeau, in green Bay, going to
Lambeau, would probably be evenmore fun.

(19:51):
So that'd probably be my answer.
But with that being said, Idon't know if that's cheating or
not.
So I've been getting into golf.
I think just going and playingaround a golf is a lot of fun as
well.
So if I'm not able to travel toGreen Bay, I'll say golfing
here in town.
What about you?

Aaron Hoisington (20:07):
I love it have you ever been to a playoff game
?
Yet I don't think you have, Uhno, no, no I haven't Cool.
I'll just just check and see ifthat was a uh, but for me, man,
so it's funny that you thinkabout like, you're like cool,
this is how I.
Everybody's answer is going tobe different to that, but I, I,
I planned this out.

(20:27):
I was like cool, my perfectbreakfast.
I have a nice chicken friedsteak.
I come back and I hang out atmy house, I'm just chilling, not
doing much, and then I have abarbecue.
I host a barbecue where I have10 of my closest friends over.

Ryan Nelson (20:42):
Not 11.
Not 11, 10.
Not nine 10.

Speaker 1 (20:44):
10 is the specific number.
I've done the math.

Aaron Hoisington (20:47):
Otherwise it gets too crowded and I have 10
people over we end up barbecuing, we're playing lawn games,
we're tossing corn, we'reimbibing, we're just hanging out
enjoying a beautiful Saturday.
This Saturday happens to beabout 75 to 80 degrees out too,
so not too hot, but just hotenough.
And then that evening we attendsome sort of sporting event.

(21:09):
Nice, I'm right there with you.
I'm like it can be justsomething, you know, we hit a
UNR football game or we go to abasketball game or something
like that.
Really squeeze in all thethings that I like to do in one
day and then I can just sleepall day.
Sunday but, as a father and ahusband and just a busy person,

(21:29):
I don't have a lot of time to doall that.
It'd be pretty tough to squeezethat in on my own dime, but I
think that that would be myperfect Saturday if you will.

Ryan Nelson (21:39):
Let's get one on the calendar.

Aaron Hoisington (21:40):
I think that'd be a very worthy cause to
undertake.
So hopefully sometime in thefuture I'll circle back to this
and be like I had the perfectSaturday so we could talk about
that then.
But awesome, ryan.
Well, as always, appreciate it,my man.
Thanks everybody for tuning in,listening.
Hopefully you guys learnedsomething.
Hopefully it got you thinkingabout things.

(22:01):
As always, send your questionsto us.
We'd love them to be sent inText.
Email us atpodcastalchemywealthcom.
Whatever method you want tosend it to us, we'd love to
cover it for sure.

Ryan Nelson (22:18):
So, ryan, I'll turn it over to you to play us out,
as always, stay the course.

Speaker 1 (22:21):
Thank you for joining us for the Fiscal Physical
Podcast.
Until next time, happylistening and, as always, stay
the course.
Happy listening and, as always,stay the course.
If you have a question or topicsuggestions, please email us at
podcast at alchemywealthcom.
If you enjoyed today'sdiscussion, subscribe to the

(22:42):
podcast to ensure you never missan episode, and consider
leaving us a rating and reviewon your favorite platform.
This helps other listeners likeyou find the show.
For more resources, you canvisit Alchemy Wealth
Management's website atwwwalchemywealthcom or find your
fiscal physical the book onAmazon.
We'd be remiss if we didn'tmention that personal finance is

(23:02):
just that personal.
Please don't take anything wesay as advice.
The preceding content is forinformational and entertainment
purposes only.
It's not an offer or asolicitation, nor should it be
construed or relied upon for tax, legal or investment advice.
It doesn't consider yourpersonal financial situation or
objectives and may not besuitable for you.
Advertise With Us

Popular Podcasts

Crime Junkie

Crime Junkie

Does hearing about a true crime case always leave you scouring the internet for the truth behind the story? Dive into your next mystery with Crime Junkie. Every Monday, join your host Ashley Flowers as she unravels all the details of infamous and underreported true crime cases with her best friend Brit Prawat. From cold cases to missing persons and heroes in our community who seek justice, Crime Junkie is your destination for theories and stories you won’t hear anywhere else. Whether you're a seasoned true crime enthusiast or new to the genre, you'll find yourself on the edge of your seat awaiting a new episode every Monday. If you can never get enough true crime... Congratulations, you’ve found your people. Follow to join a community of Crime Junkies! Crime Junkie is presented by audiochuck Media Company.

24/7 News: The Latest

24/7 News: The Latest

The latest news in 4 minutes updated every hour, every day.

Stuff You Should Know

Stuff You Should Know

If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.

Music, radio and podcasts, all free. Listen online or download the iHeart App.

Connect

© 2025 iHeartMedia, Inc.