1 00:00:00,080 --> 00:00:02,400 Speaker 1: Welcome to How the Money. I'm Joel and I and 2 00:00:02,560 --> 00:00:24,400 Speaker 1: Matt and today we're answering your listener questions. Yeah, buddy, 3 00:00:24,600 --> 00:00:27,639 Speaker 1: this episode we are answering listener questions. Man, We've got 4 00:00:27,760 --> 00:00:30,760 Speaker 1: one about day trading. We're gonna talk about taking advantage 5 00:00:30,760 --> 00:00:33,199 Speaker 1: of a v A loan to purchase a home, and 6 00:00:33,360 --> 00:00:36,000 Speaker 1: we have a question pertaining to student credit cards. I'm 7 00:00:36,000 --> 00:00:40,240 Speaker 1: excited to get to those three plus two more me too, man. 8 00:00:40,640 --> 00:00:43,839 Speaker 1: I love the listener question episodes, so fun before we 9 00:00:43,880 --> 00:00:46,360 Speaker 1: actually start answering some of those questions. So, Matt, I 10 00:00:46,400 --> 00:00:50,520 Speaker 1: wanted to tell you about a recent travail I had travail. Yeah, 11 00:00:50,520 --> 00:00:54,160 Speaker 1: I'm using big Hords today down in Orlando, So I 12 00:00:54,520 --> 00:00:56,080 Speaker 1: told you, And I think I mentioned on the show 13 00:00:56,120 --> 00:00:59,200 Speaker 1: that we took the kids to Disney's, right, yeah, earlier 14 00:00:59,200 --> 00:01:01,240 Speaker 1: this year. Yeah, and it was. We had a great time. 15 00:01:01,600 --> 00:01:04,880 Speaker 1: Disney is prohibitively expensive. I don't recommend it to anyone, 16 00:01:05,160 --> 00:01:06,720 Speaker 1: but but we had a great time. It was. It 17 00:01:06,760 --> 00:01:08,840 Speaker 1: was super worth it. We the kids had a blast. 18 00:01:09,160 --> 00:01:11,679 Speaker 1: I was super impressed with our girls six and four, 19 00:01:11,840 --> 00:01:14,840 Speaker 1: and they both rode some bigger roller coasters, So I 20 00:01:14,880 --> 00:01:16,880 Speaker 1: was impressed with Yeah, I feel like it's a good 21 00:01:16,880 --> 00:01:18,400 Speaker 1: way to do it. Eddie has actually been asking a 22 00:01:18,440 --> 00:01:21,199 Speaker 1: little bit about six Flags, like like looking ahead towards 23 00:01:21,240 --> 00:01:23,000 Speaker 1: the summer a little bit. I'm like, you know what, 24 00:01:23,040 --> 00:01:24,600 Speaker 1: we could totally do six Flags. We've got one of 25 00:01:24,640 --> 00:01:26,120 Speaker 1: those here in Atlanta. It's a good way to kind 26 00:01:26,160 --> 00:01:27,880 Speaker 1: of test the waters a little bit, because I would 27 00:01:27,920 --> 00:01:30,440 Speaker 1: hate to get down to Disney and there's tons of 28 00:01:30,520 --> 00:01:32,520 Speaker 1: rides that you can't ride because maybe your kids are 29 00:01:32,560 --> 00:01:36,840 Speaker 1: too scared or too short, too short consideration for sure. Yeah, 30 00:01:37,000 --> 00:01:38,880 Speaker 1: but but I mean most of the rides, there's a 31 00:01:38,880 --> 00:01:41,720 Speaker 1: lot of rides for smaller kids, and and so, yeah, 32 00:01:41,760 --> 00:01:43,600 Speaker 1: my kids enjoyed the best of both worlds, which was 33 00:01:43,640 --> 00:01:45,920 Speaker 1: fun night. But the biggest problem I had driving through 34 00:01:46,000 --> 00:01:50,680 Speaker 1: Orlando is the tolls that they have there. Yeah, tolls suck. 35 00:01:50,760 --> 00:01:53,080 Speaker 1: Tolls all over the place. I will say, tolls make 36 00:01:53,120 --> 00:01:54,680 Speaker 1: a lot of sense. I think they're actually one of 37 00:01:54,680 --> 00:01:57,480 Speaker 1: the best ways to pay for the roads and to 38 00:01:57,680 --> 00:02:01,440 Speaker 1: maintain kind of the infrastructure of a city. But as 39 00:02:01,480 --> 00:02:05,080 Speaker 1: an outsider who doesn't deal with him very often, they suck. Yeah. 40 00:02:05,160 --> 00:02:07,040 Speaker 1: I just say having to slow down that much right, 41 00:02:07,120 --> 00:02:09,639 Speaker 1: like you're cruising along at seventy five miles per hour, 42 00:02:09,720 --> 00:02:11,200 Speaker 1: and then all of a sudden, it's like, oh, I 43 00:02:11,240 --> 00:02:13,600 Speaker 1: have to break it to zero, you know, and throw 44 00:02:13,680 --> 00:02:15,160 Speaker 1: some money in the bend, especially if you have a 45 00:02:15,200 --> 00:02:18,200 Speaker 1: sleeping baby and like they're like sleeping because of the 46 00:02:18,280 --> 00:02:22,120 Speaker 1: constant were the wheels or yeah, But so I at 47 00:02:22,160 --> 00:02:24,200 Speaker 1: one point I stopped at a toll and I was 48 00:02:24,240 --> 00:02:26,200 Speaker 1: ready to pay it. But you know, the thing is 49 00:02:26,240 --> 00:02:28,960 Speaker 1: with these antiquated toll boxes, if there's nobody there to 50 00:02:28,960 --> 00:02:31,480 Speaker 1: take the money, they're not taking credit cards either, and 51 00:02:31,520 --> 00:02:33,120 Speaker 1: so you have to have cash on hand. What am 52 00:02:33,160 --> 00:02:36,200 Speaker 1: I bad at having cash on hand? So my wife 53 00:02:36,240 --> 00:02:37,760 Speaker 1: had cash for a bunch of the tolls that we 54 00:02:37,880 --> 00:02:39,800 Speaker 1: that we hit, but then we had to have exact 55 00:02:39,880 --> 00:02:43,120 Speaker 1: change for this one toll we didn't have it. I 56 00:02:43,160 --> 00:02:45,560 Speaker 1: stopped and they're supposed to be brochures there for you 57 00:02:45,639 --> 00:02:47,400 Speaker 1: to know how to like pay it on the flip side, 58 00:02:47,440 --> 00:02:49,320 Speaker 1: like if you didn't have the cash. Yeah, I remember 59 00:02:49,360 --> 00:02:51,320 Speaker 1: pulling over to the side before, like over off the 60 00:02:51,400 --> 00:02:54,640 Speaker 1: little office or whatever. Yeah, but they were out of pamphlets. 61 00:02:54,680 --> 00:02:58,120 Speaker 1: There's nobody manning the station. Snap, And so I'm like, okay, 62 00:02:58,120 --> 00:03:01,200 Speaker 1: cool that I owe them seventy ense, but you an outlaw. 63 00:03:01,560 --> 00:03:03,640 Speaker 1: I don't know how to pay it, and so there's 64 00:03:03,639 --> 00:03:05,640 Speaker 1: like an email address you can send an email too. 65 00:03:05,680 --> 00:03:07,200 Speaker 1: I snapped the picture of it so I could email 66 00:03:07,240 --> 00:03:10,079 Speaker 1: them later when I got home, and I emailed them 67 00:03:10,080 --> 00:03:11,760 Speaker 1: to ask them about how I could get them. There 68 00:03:11,760 --> 00:03:14,040 Speaker 1: so many web sense and they they just want to 69 00:03:14,080 --> 00:03:16,240 Speaker 1: make it the most impossible task on the face of 70 00:03:16,240 --> 00:03:18,120 Speaker 1: the earth. Like, honestly, I'm not sure if I'm gonna 71 00:03:18,120 --> 00:03:20,400 Speaker 1: pay it at this point. So I want you. I 72 00:03:20,440 --> 00:03:21,799 Speaker 1: want you to so you are going to be an outlaw. 73 00:03:21,840 --> 00:03:23,840 Speaker 1: I think I don't know if they're gonna let me 74 00:03:23,880 --> 00:03:26,440 Speaker 1: back into Disney, into Orlando, into the state of Florida 75 00:03:26,480 --> 00:03:28,600 Speaker 1: in general. But yeah, what's your take on this, because 76 00:03:28,720 --> 00:03:31,040 Speaker 1: you know, when I got the reply email, they're like, yes, 77 00:03:31,120 --> 00:03:34,000 Speaker 1: please kindly send us a check in an mailed envelope. 78 00:03:34,000 --> 00:03:35,360 Speaker 1: I mean, the stamp is gonna cost me as much 79 00:03:35,360 --> 00:03:37,800 Speaker 1: as the toll itself. And then on top of it, 80 00:03:37,920 --> 00:03:39,800 Speaker 1: just like with all this information, half of which I 81 00:03:39,840 --> 00:03:42,400 Speaker 1: don't have or want to give them, and so yeah, 82 00:03:42,400 --> 00:03:44,200 Speaker 1: I was just kind of frustrated that there's not an 83 00:03:44,200 --> 00:03:46,040 Speaker 1: easier way to do it. I don't mind the toll system. 84 00:03:46,120 --> 00:03:48,280 Speaker 1: Just make it easy for me to pay. I agree, 85 00:03:48,320 --> 00:03:50,680 Speaker 1: they're right, Like it's annoying, like having to pay with 86 00:03:50,760 --> 00:03:53,800 Speaker 1: exact change or even just with cash. It's a huge 87 00:03:53,800 --> 00:03:55,320 Speaker 1: pan of the butt. Man, how much better would it 88 00:03:55,320 --> 00:03:56,640 Speaker 1: be if they could just get with the times and 89 00:03:56,680 --> 00:03:58,320 Speaker 1: they had just like a little then no address up 90 00:03:58,320 --> 00:04:01,360 Speaker 1: there or cash app But dude, you have to pay 91 00:04:01,360 --> 00:04:04,000 Speaker 1: it because like because you haven't paid it, like that's 92 00:04:04,040 --> 00:04:06,920 Speaker 1: the law, right just by by principle, I feel like, 93 00:04:07,000 --> 00:04:09,200 Speaker 1: I mean, it's it's not a lot of money, and 94 00:04:09,240 --> 00:04:12,080 Speaker 1: so I'm sure it feels silly just in the check 95 00:04:12,520 --> 00:04:14,920 Speaker 1: a paper check along for seventy cents, which you probably 96 00:04:14,920 --> 00:04:17,680 Speaker 1: don't have a ton of those laying around. But yeah, 97 00:04:17,800 --> 00:04:20,000 Speaker 1: I mean I guess the principle of it, like you 98 00:04:20,040 --> 00:04:21,640 Speaker 1: have to do it because then like where do you 99 00:04:21,720 --> 00:04:23,479 Speaker 1: draw the line? It's like, well, is it up to 100 00:04:23,520 --> 00:04:26,520 Speaker 1: you to decide that, like, oh, well, this is ten dollars. 101 00:04:26,960 --> 00:04:30,039 Speaker 1: It's an honor system, and it's kind of annoying, right, 102 00:04:30,080 --> 00:04:32,080 Speaker 1: Like there's a little bit of a slippery slope there. 103 00:04:32,080 --> 00:04:35,800 Speaker 1: I'm sure that you can easily recognize, well, okay, I'll 104 00:04:35,920 --> 00:04:37,840 Speaker 1: then I'll pay it. If you're telling me, I need 105 00:04:37,920 --> 00:04:40,039 Speaker 1: to go through the hassle of mailing off a check 106 00:04:40,120 --> 00:04:42,279 Speaker 1: to the state of Florida. I'll do it, but because 107 00:04:42,480 --> 00:04:44,440 Speaker 1: also to like if I did go back and I 108 00:04:44,480 --> 00:04:46,840 Speaker 1: got caught and arrested and put behind bars or something 109 00:04:46,920 --> 00:04:48,279 Speaker 1: like that, and then you know, we'd have to reach 110 00:04:48,279 --> 00:04:50,520 Speaker 1: out to listeners who live in Orlando to get them 111 00:04:50,560 --> 00:04:53,560 Speaker 1: to come. Yeah, it just it becomes a big hairy mess. 112 00:04:53,560 --> 00:04:55,840 Speaker 1: So all right, I'll pay it, but i'll do it 113 00:04:55,920 --> 00:04:58,080 Speaker 1: under protest. Yeah, you don't necessarily have to make it 114 00:04:58,120 --> 00:05:00,000 Speaker 1: easy for them, I guess right, Like, maybe you could 115 00:05:00,080 --> 00:05:02,320 Speaker 1: stick some like some junk mail in there with it 116 00:05:02,400 --> 00:05:05,240 Speaker 1: as you send it back. Perhaps as long as the 117 00:05:05,240 --> 00:05:06,880 Speaker 1: payment is in there, I guess they they would have 118 00:05:06,880 --> 00:05:09,200 Speaker 1: to take it, right, Yeah, yeah, exactly, So all right, 119 00:05:09,200 --> 00:05:11,240 Speaker 1: take my junk mail at the same time, stay in Florida. 120 00:05:11,520 --> 00:05:13,200 Speaker 1: Well what's funny too, is that the beer that we're 121 00:05:13,240 --> 00:05:16,400 Speaker 1: having this episode is actually from Florida, right, Yeah, So 122 00:05:16,440 --> 00:05:18,520 Speaker 1: Emily and I went by a great brewery there that 123 00:05:18,520 --> 00:05:20,200 Speaker 1: that you and I visited a couple of years ago, 124 00:05:20,400 --> 00:05:23,120 Speaker 1: called Ellipsus Brewing that make some awesome beers, And so 125 00:05:23,200 --> 00:05:25,080 Speaker 1: I grabbed a couple of crowlers for us so we 126 00:05:25,080 --> 00:05:27,200 Speaker 1: could have on the show. This one's called I'm already 127 00:05:27,240 --> 00:05:31,400 Speaker 1: pulled over fitting a car reference right, Well he uh, 128 00:05:31,839 --> 00:05:35,160 Speaker 1: you couldnot have picked up a more appropriate beer, right right, 129 00:05:35,400 --> 00:05:37,200 Speaker 1: I'm already pulled over, so Joel, you may as well 130 00:05:37,200 --> 00:05:38,840 Speaker 1: just pay. I should have paid. I wish I could 131 00:05:38,880 --> 00:05:40,880 Speaker 1: have paid right down and there, but I couldn't. But yeah, 132 00:05:40,880 --> 00:05:43,360 Speaker 1: so this is a raspberry sour. And we'll let everybody 133 00:05:43,360 --> 00:05:44,359 Speaker 1: know what we think of this one at the end 134 00:05:44,360 --> 00:05:46,760 Speaker 1: of the show. But Matt, for now, let's get onto 135 00:05:47,080 --> 00:05:50,159 Speaker 1: listener questions. And for everyone listening, anybody that wants to 136 00:05:50,360 --> 00:05:53,440 Speaker 1: have their listener question featured on a future episode, Well 137 00:05:53,440 --> 00:05:55,000 Speaker 1: it's super easy to do, so just go to how 138 00:05:55,040 --> 00:05:58,279 Speaker 1: to money dot com slash ask simple instructions there to 139 00:05:58,400 --> 00:06:01,400 Speaker 1: leave your voice message for us to feature on a 140 00:06:01,480 --> 00:06:04,360 Speaker 1: future episode. Let's get to the first one. Hey, Matt 141 00:06:04,400 --> 00:06:08,080 Speaker 1: and Droll, It's Drew currently in South Carolina. Love the podcast. 142 00:06:08,760 --> 00:06:10,960 Speaker 1: I say currently because I'm in the military and getting 143 00:06:11,000 --> 00:06:13,280 Speaker 1: ready to move yet again, and I'm hoping to buy 144 00:06:13,320 --> 00:06:16,120 Speaker 1: a house in my next duty station. My question surrounds 145 00:06:16,120 --> 00:06:18,359 Speaker 1: the v A loan, hoping for you to shed some 146 00:06:18,480 --> 00:06:21,520 Speaker 1: light on the intricacies of the v A loan, specifically 147 00:06:21,560 --> 00:06:23,599 Speaker 1: the decision to put no money down and roll up 148 00:06:23,640 --> 00:06:27,280 Speaker 1: closing costs into it. I know putting down is the 149 00:06:27,320 --> 00:06:29,560 Speaker 1: smart choice, and I have money put aside for a 150 00:06:29,600 --> 00:06:32,520 Speaker 1: down payment, but the market we are moving to is 151 00:06:32,520 --> 00:06:34,240 Speaker 1: probably going to be too much for me to be 152 00:06:34,320 --> 00:06:37,320 Speaker 1: able to put down and avoid p m I and 153 00:06:37,400 --> 00:06:40,839 Speaker 1: you know, as your advice would be much appreciated. Thanks well, Drew, 154 00:06:40,880 --> 00:06:42,800 Speaker 1: Thanks so much for your question, and thank you as 155 00:06:42,839 --> 00:06:45,480 Speaker 1: well for your service. We are we're glad to hear 156 00:06:45,480 --> 00:06:47,719 Speaker 1: that you're considering a v A loan because a lot 157 00:06:47,760 --> 00:06:50,520 Speaker 1: of members of the military aren't even aware that that 158 00:06:50,640 --> 00:06:53,159 Speaker 1: is an option to them. Fewer than ten percent of 159 00:06:53,200 --> 00:06:56,360 Speaker 1: the country's twenty five million veterans have taken advantage of 160 00:06:56,400 --> 00:06:59,080 Speaker 1: the benefits that they've earned with their service. It's a 161 00:06:59,080 --> 00:07:01,000 Speaker 1: great considerations. It is like you are off to a 162 00:07:01,040 --> 00:07:03,000 Speaker 1: good start. Yeah, Matt. We talked about some of the 163 00:07:03,040 --> 00:07:07,600 Speaker 1: benefits that are specific to military members and veterans back 164 00:07:07,640 --> 00:07:10,720 Speaker 1: in episode one sixty six where we had Doug Norman on, 165 00:07:10,760 --> 00:07:14,920 Speaker 1: who's a military retiree and a financial independence expert. So, Drew, 166 00:07:15,160 --> 00:07:17,160 Speaker 1: if you haven't listened to that episode, definitely we're checking out. 167 00:07:17,360 --> 00:07:20,200 Speaker 1: Let's quickly, Matt talk about what a v A loan is. Basically, 168 00:07:20,240 --> 00:07:23,080 Speaker 1: it is a non conventional mortgage loan that's issued by 169 00:07:23,080 --> 00:07:26,800 Speaker 1: private banks, but it's backed by the federal government, specifically 170 00:07:26,840 --> 00:07:29,040 Speaker 1: the Department of Veteran Affairs. That's why it's called a 171 00:07:29,120 --> 00:07:32,240 Speaker 1: v A loan, Right, and we get to the bottom 172 00:07:32,240 --> 00:07:35,640 Speaker 1: of it, and v A loans are specifically helpful to 173 00:07:36,000 --> 00:07:38,080 Speaker 1: lots of men and women who are serving our country 174 00:07:38,520 --> 00:07:40,120 Speaker 1: because it allows them to buy a home with no 175 00:07:40,200 --> 00:07:42,440 Speaker 1: money down, while at the same time not having to 176 00:07:42,440 --> 00:07:44,160 Speaker 1: pay p m I. Right, the biggest thing that we 177 00:07:44,240 --> 00:07:47,840 Speaker 1: have against buying a home without putting more skin in 178 00:07:47,880 --> 00:07:50,400 Speaker 1: the game is oftentimes the p M I right, and 179 00:07:50,440 --> 00:07:52,360 Speaker 1: at the same time, it's a little more risky the 180 00:07:52,600 --> 00:07:54,480 Speaker 1: more leverage you take on. So it's kind of both 181 00:07:54,480 --> 00:07:56,080 Speaker 1: those things at the same time. But with the v 182 00:07:56,120 --> 00:07:57,560 Speaker 1: A loan, you're at least taking p m I off 183 00:07:57,560 --> 00:08:00,320 Speaker 1: the table, which is a huge reason we prefer people 184 00:08:00,320 --> 00:08:02,720 Speaker 1: to put more money down when buying a home. Well, 185 00:08:02,720 --> 00:08:04,640 Speaker 1: before we dive into the v A loan, let's talk 186 00:08:04,680 --> 00:08:08,280 Speaker 1: about purchasing a home, Drew. There are some pitfalls when 187 00:08:08,280 --> 00:08:10,760 Speaker 1: it comes to buying a home if you'll be moving frequently, 188 00:08:11,080 --> 00:08:14,000 Speaker 1: the biggest being the money that goes towards closing costs 189 00:08:14,200 --> 00:08:16,200 Speaker 1: that you experienced up front, and then not to mention 190 00:08:16,280 --> 00:08:20,040 Speaker 1: the incredibly high cost associated with selling the home when 191 00:08:20,040 --> 00:08:22,040 Speaker 1: the time comes for that, and then beyond that, it's 192 00:08:22,040 --> 00:08:24,880 Speaker 1: typically years of paying your monthly payment before you even 193 00:08:24,920 --> 00:08:28,080 Speaker 1: have a decent amount that is going towards principle where 194 00:08:28,120 --> 00:08:30,040 Speaker 1: you're building up equity in the home. A lot of 195 00:08:30,080 --> 00:08:31,600 Speaker 1: times that's the argument you think, Okay, I want to 196 00:08:31,640 --> 00:08:33,040 Speaker 1: make sure I'm you know, at least paying myself. I 197 00:08:33,080 --> 00:08:35,080 Speaker 1: want to make sure that you know my monthly payment 198 00:08:35,080 --> 00:08:37,840 Speaker 1: that goes towards my housing, that that is building my wealth. 199 00:08:37,960 --> 00:08:40,680 Speaker 1: But in reality, those first few years, it's it's a 200 00:08:40,720 --> 00:08:43,160 Speaker 1: small sliver of your mortgage payment that actually is going 201 00:08:43,200 --> 00:08:46,400 Speaker 1: to the principle. Yeah, totally. And that's another reason why 202 00:08:46,679 --> 00:08:48,880 Speaker 1: it drew before we shoot down this idea, because I 203 00:08:48,880 --> 00:08:50,680 Speaker 1: think there are ways you can make it work. We 204 00:08:50,720 --> 00:08:53,760 Speaker 1: need to at least mention renting. Renting isn't all that bad. 205 00:08:53,760 --> 00:08:56,360 Speaker 1: We've talked about this before in an episode Matt that 206 00:08:56,400 --> 00:08:58,560 Speaker 1: we did called Why Your Home is a Terrible Investment, 207 00:08:58,840 --> 00:09:01,000 Speaker 1: And because For a lot of people, they think of 208 00:09:01,040 --> 00:09:03,320 Speaker 1: a home is a great investment, but oftentimes it doesn't 209 00:09:03,320 --> 00:09:05,680 Speaker 1: turn not to be the case, usually because of how 210 00:09:05,760 --> 00:09:08,280 Speaker 1: we buy homes. But you miss out on all the 211 00:09:08,320 --> 00:09:11,520 Speaker 1: major expenses up front when you rent, plus any surprise 212 00:09:11,520 --> 00:09:14,280 Speaker 1: home expenses that inevitably come up, because you know what, 213 00:09:14,320 --> 00:09:16,640 Speaker 1: that's the landlord's duty to fix those things. So, if 214 00:09:16,679 --> 00:09:19,240 Speaker 1: you think you're gonna be in this new location for 215 00:09:19,400 --> 00:09:22,840 Speaker 1: seven years or less, just rent, we we would advise 216 00:09:22,920 --> 00:09:27,120 Speaker 1: that buying is probably just not a great idea for you, Drew. However, 217 00:09:27,160 --> 00:09:29,440 Speaker 1: if you're really set on buying your own place, even 218 00:09:29,440 --> 00:09:31,080 Speaker 1: though you're not going to be there for at least 219 00:09:31,120 --> 00:09:33,880 Speaker 1: seven years, you definitely need to be comfortable being a 220 00:09:33,920 --> 00:09:36,640 Speaker 1: long distance landlord to take less of a financial hit 221 00:09:36,679 --> 00:09:38,839 Speaker 1: in the transaction. So, yeah, Joe, let's go ahead and 222 00:09:38,840 --> 00:09:41,200 Speaker 1: talk about being a landlord. Right. Even though you can't 223 00:09:41,240 --> 00:09:43,800 Speaker 1: purchase an investment property with av a loan, you can 224 00:09:43,880 --> 00:09:46,680 Speaker 1: purchase a home as an owner occupant and then you 225 00:09:46,679 --> 00:09:48,840 Speaker 1: can move out. That's my favorite way to buy homes 226 00:09:48,880 --> 00:09:51,360 Speaker 1: and become a landlord. Ye seriously, um, But typically you 227 00:09:51,400 --> 00:09:53,439 Speaker 1: need to occupy that home for at least twelve months. 228 00:09:53,440 --> 00:09:55,640 Speaker 1: There are some workarounds that kind of depends on your 229 00:09:55,679 --> 00:09:59,199 Speaker 1: specific situation, but if renting your place out is likely 230 00:09:59,679 --> 00:10:01,840 Speaker 1: makes or that you crunch the numbers of this home 231 00:10:02,120 --> 00:10:05,000 Speaker 1: as an investment property, one percent rule can be helpful here, 232 00:10:05,080 --> 00:10:06,880 Speaker 1: and that's when if you're pulling in at least one 233 00:10:06,880 --> 00:10:09,480 Speaker 1: percent of the purchase price of the home every month 234 00:10:09,520 --> 00:10:12,520 Speaker 1: and rent, then it likely will make a lot of 235 00:10:12,559 --> 00:10:14,920 Speaker 1: sense from a financial standpoint. You want to make sure 236 00:10:14,960 --> 00:10:17,680 Speaker 1: that you're not losing money every single month by becoming 237 00:10:17,720 --> 00:10:20,720 Speaker 1: a landlord. Yeah, man, it sounds like Drew is probably 238 00:10:20,800 --> 00:10:22,600 Speaker 1: going to have to think about this purchase in kind 239 00:10:22,600 --> 00:10:24,959 Speaker 1: of like a hybrid situation where maybe the first three 240 00:10:25,000 --> 00:10:26,840 Speaker 1: or four or five years he's living in the home 241 00:10:27,040 --> 00:10:29,320 Speaker 1: and then potentially running it out as long as he's 242 00:10:29,320 --> 00:10:31,360 Speaker 1: comfortable being a landlord. And if that's the case, like 243 00:10:31,400 --> 00:10:33,560 Speaker 1: the one percent rule obviously still great thing to aim for, 244 00:10:33,840 --> 00:10:36,240 Speaker 1: but a minimum, you know, we would encourage Drew to 245 00:10:36,240 --> 00:10:38,800 Speaker 1: to crunch the numbers and not be losing money on 246 00:10:38,840 --> 00:10:40,760 Speaker 1: that home or at the very least. Yeah, it's tough 247 00:10:40,800 --> 00:10:42,600 Speaker 1: to be a landlord in that situation well, and especially 248 00:10:42,640 --> 00:10:44,880 Speaker 1: too if he's gonna have management right like that's going 249 00:10:44,920 --> 00:10:46,959 Speaker 1: to be an additional cost associated with it if he 250 00:10:47,000 --> 00:10:49,160 Speaker 1: doesn't want being a landlord to be a part of 251 00:10:49,160 --> 00:10:51,760 Speaker 1: his actual life. Yeah, and and it's really really hard 252 00:10:51,880 --> 00:10:55,720 Speaker 1: to manage real estate from afar without having a professional manager. 253 00:10:55,720 --> 00:10:58,080 Speaker 1: And so yeah, we recommend that if you do move 254 00:10:58,080 --> 00:11:00,400 Speaker 1: away from the place where you live, unless you're running 255 00:11:00,400 --> 00:11:02,280 Speaker 1: it out to like a friend or somebody you know well, 256 00:11:02,600 --> 00:11:05,280 Speaker 1: that you do have a professional management company take over 257 00:11:05,360 --> 00:11:07,640 Speaker 1: for you, because it's just really hard to manage from afar. 258 00:11:08,160 --> 00:11:10,840 Speaker 1: But Drew, it sounds like you're acting in a financially 259 00:11:10,880 --> 00:11:13,720 Speaker 1: responsible way. You have the money saved up right, but 260 00:11:13,800 --> 00:11:16,080 Speaker 1: you're just preferring to use it for other things and 261 00:11:16,160 --> 00:11:17,719 Speaker 1: taking out a v a loan. So that sounds like 262 00:11:17,760 --> 00:11:20,000 Speaker 1: a solid option for you. It allows you to keep 263 00:11:20,040 --> 00:11:23,680 Speaker 1: some of that savings intact, hopefully funneling that towards investments 264 00:11:23,960 --> 00:11:26,520 Speaker 1: and saving for your future. Also to Man, I think 265 00:11:26,520 --> 00:11:29,480 Speaker 1: it's important to quickly note that the pen Fed Foundation 266 00:11:29,480 --> 00:11:34,600 Speaker 1: provides down payment assistance through something called their dream Maker's Program, So, Drew, 267 00:11:34,640 --> 00:11:36,520 Speaker 1: we would encourage you to take a look there. You 268 00:11:36,559 --> 00:11:38,520 Speaker 1: know what, it might make the buying of a home 269 00:11:38,559 --> 00:11:40,440 Speaker 1: even more of a slam dunk if you're willing to 270 00:11:40,440 --> 00:11:43,000 Speaker 1: become a landlord and you get down payment assistance through 271 00:11:43,160 --> 00:11:45,719 Speaker 1: the pen Fed Credit Union and their Dreammakers program, And 272 00:11:45,760 --> 00:11:47,559 Speaker 1: that's just kind of a cool thing and something to 273 00:11:47,559 --> 00:11:50,120 Speaker 1: be aware of. Nice. All right, man, we're gonna take 274 00:11:50,120 --> 00:11:51,800 Speaker 1: a quick break, But then after that we're gonna hear 275 00:11:51,800 --> 00:12:03,360 Speaker 1: from a student up in New York City. All right, Matt, 276 00:12:03,360 --> 00:12:05,800 Speaker 1: we're back in next question up. Well, student in New 277 00:12:05,880 --> 00:12:08,640 Speaker 1: York had a couple of questions for us. Actually, Hi, 278 00:12:08,760 --> 00:12:10,720 Speaker 1: Madam Joel. My name is Esther, and I'm from New 279 00:12:10,800 --> 00:12:13,880 Speaker 1: York City. I'm in my early twenties and currently in 280 00:12:13,920 --> 00:12:17,640 Speaker 1: graduate school. I'm looking to open my first credit card. 281 00:12:18,200 --> 00:12:21,840 Speaker 1: I understand that for people with no income, such as myself, 282 00:12:22,000 --> 00:12:26,840 Speaker 1: some options include student credit cards, secured credit cards, and 283 00:12:26,960 --> 00:12:32,160 Speaker 1: being added onto my parents credit card. Assuming that student 284 00:12:32,240 --> 00:12:37,400 Speaker 1: credit cards are the best option of those, what recommendations 285 00:12:37,440 --> 00:12:40,880 Speaker 1: do you have for all the types of student credit 286 00:12:40,880 --> 00:12:45,080 Speaker 1: cards that are offered by different banks and institutions. I 287 00:12:45,120 --> 00:12:48,600 Speaker 1: don't normally spend very much money on myself. Secondly, should 288 00:12:48,600 --> 00:12:50,360 Speaker 1: I apply for a credit card in the way to 289 00:12:50,440 --> 00:12:53,360 Speaker 1: be declined before applying for a different one, or should 290 00:12:53,400 --> 00:12:57,720 Speaker 1: I apply for several at once. Third, once I do 291 00:12:57,840 --> 00:12:59,679 Speaker 1: have my first credit card, is it true that I 292 00:12:59,720 --> 00:13:04,080 Speaker 1: should never closed to retain the length of the credit history? Fourth? 293 00:13:04,679 --> 00:13:08,320 Speaker 1: What disadvantages are there to having credit? I've never heard 294 00:13:08,360 --> 00:13:14,280 Speaker 1: any cons Five what resources do you generally recommend for 295 00:13:14,440 --> 00:13:17,959 Speaker 1: people like me who have zero knowledge and lack the 296 00:13:18,040 --> 00:13:23,640 Speaker 1: vocabulary to really understand personal finances. I think that how 297 00:13:23,679 --> 00:13:26,320 Speaker 1: to Money is a great resource, and I'm thankful to 298 00:13:26,360 --> 00:13:29,200 Speaker 1: be able to learn so much from each of your episodes. 299 00:13:29,800 --> 00:13:33,920 Speaker 1: Keep up the good work. Thank you, bye, yes there, 300 00:13:34,240 --> 00:13:37,280 Speaker 1: Thanks so much for the question. Great to hear from you. Questions, 301 00:13:37,280 --> 00:13:40,720 Speaker 1: Oh that's true, kind of you know, one thing you 302 00:13:40,720 --> 00:13:43,600 Speaker 1: said that kind of raised the red flag, which is 303 00:13:43,720 --> 00:13:46,120 Speaker 1: that you don't currently have any income, And so as 304 00:13:46,120 --> 00:13:48,240 Speaker 1: you begin your personal finance journey, you want to make 305 00:13:48,280 --> 00:13:51,520 Speaker 1: sure that you are using credit cards properly right as 306 00:13:51,559 --> 00:13:54,559 Speaker 1: a tool and as a method of payment for expenses 307 00:13:54,600 --> 00:13:56,760 Speaker 1: that you would incur anyways, you want to make sure 308 00:13:56,800 --> 00:14:00,160 Speaker 1: that you're not tempted to overspend um if that's as 309 00:14:00,200 --> 00:14:02,600 Speaker 1: you obviously want to, you want to avoid that happening altogether. 310 00:14:02,679 --> 00:14:04,559 Speaker 1: And if that's not something that you can avoid, you 311 00:14:04,640 --> 00:14:07,360 Speaker 1: might want to actually avoid credit cards altogether. Yeah, And 312 00:14:07,400 --> 00:14:09,599 Speaker 1: I think one important thing to mention too before we 313 00:14:09,640 --> 00:14:13,200 Speaker 1: get into Estra's the particular questions, there's something else that 314 00:14:13,240 --> 00:14:15,880 Speaker 1: we can bring to light, which is is that getting 315 00:14:15,920 --> 00:14:19,360 Speaker 1: authorized user status on one of your parents cards. Let's say, 316 00:14:19,400 --> 00:14:22,080 Speaker 1: if you if you have parents that handle their their 317 00:14:22,120 --> 00:14:25,000 Speaker 1: money and their credit well, is a good move, and 318 00:14:25,040 --> 00:14:26,920 Speaker 1: it's easy for them to do that from their account. 319 00:14:26,960 --> 00:14:29,040 Speaker 1: Once they've logged in, they basically add you to their 320 00:14:29,040 --> 00:14:31,640 Speaker 1: account using your name, your data, birth in, your social 321 00:14:31,920 --> 00:14:34,280 Speaker 1: uh and if they don't handle their credit well though, 322 00:14:34,480 --> 00:14:36,720 Speaker 1: skip this step because you don't want to be an 323 00:14:36,720 --> 00:14:39,920 Speaker 1: authorized user on someone's account. Basically, what they're doing is 324 00:14:39,920 --> 00:14:42,400 Speaker 1: they're they're adding you and and hopefully not giving you 325 00:14:42,440 --> 00:14:45,120 Speaker 1: the card, but just letting you benefit from their good 326 00:14:45,160 --> 00:14:48,080 Speaker 1: credit score. And so that's definitely one way to kind 327 00:14:48,120 --> 00:14:51,000 Speaker 1: of skip the line essentially of building credit, and you're 328 00:14:51,040 --> 00:14:53,840 Speaker 1: kind of gifted credit based on someone else handling it well. 329 00:14:54,400 --> 00:14:55,640 Speaker 1: And that's the one of the ways that you can 330 00:14:55,720 --> 00:14:57,440 Speaker 1: ensure that you're gonna get qualified for one of these 331 00:14:57,480 --> 00:15:00,280 Speaker 1: student credit cards is by knowing your credit school or 332 00:15:00,800 --> 00:15:03,360 Speaker 1: you can sign up at credit Carma or credit scorecard 333 00:15:03,360 --> 00:15:06,520 Speaker 1: dot com in order to be aware of just the 334 00:15:06,520 --> 00:15:09,280 Speaker 1: different movements and what's happening with your score. If you 335 00:15:09,360 --> 00:15:11,640 Speaker 1: have a solid score, like you can maybe skip the 336 00:15:11,640 --> 00:15:15,360 Speaker 1: student card altogether, uh and go straight to a full on, 337 00:15:15,680 --> 00:15:18,400 Speaker 1: you know, real world credit card. But if not, Discover 338 00:15:18,480 --> 00:15:21,080 Speaker 1: Card they offer some of the best cards specifically for 339 00:15:21,200 --> 00:15:24,120 Speaker 1: students on the market. What's important to note though, is 340 00:15:24,400 --> 00:15:26,280 Speaker 1: to go ahead and make sure and get a card 341 00:15:26,320 --> 00:15:29,520 Speaker 1: while you're still in school. It becomes more difficult after 342 00:15:29,560 --> 00:15:32,680 Speaker 1: graduation to get a card and begin that credit building process. 343 00:15:32,680 --> 00:15:35,000 Speaker 1: But while you're in school as a student, you know, 344 00:15:35,040 --> 00:15:37,080 Speaker 1: it's not a huge deal to the credit card companies 345 00:15:37,160 --> 00:15:38,760 Speaker 1: that you don't have much of an income. You know 346 00:15:38,840 --> 00:15:40,920 Speaker 1: that you might have some debt. Uh, there's a little 347 00:15:40,920 --> 00:15:42,640 Speaker 1: bit of leeway. But once you are out in the 348 00:15:42,680 --> 00:15:44,160 Speaker 1: real world and you've got that job, it's gonna be 349 00:15:44,200 --> 00:15:46,760 Speaker 1: a lot harder. Yeah, for those folks. Typically they have 350 00:15:46,840 --> 00:15:49,360 Speaker 1: to resort to secured credit cards, which involves like a 351 00:15:49,440 --> 00:15:51,920 Speaker 1: cash deposit and you have a lower credit limit, and 352 00:15:51,920 --> 00:15:53,840 Speaker 1: it's just a bigger pain. It could take you eighteen 353 00:15:53,880 --> 00:15:56,720 Speaker 1: months to graduate from a secured card to to a 354 00:15:56,720 --> 00:15:59,320 Speaker 1: big boy or big girl credit card. Right, So taking 355 00:15:59,360 --> 00:16:00,920 Speaker 1: advantage of the act that you are a student and 356 00:16:00,920 --> 00:16:02,960 Speaker 1: you do have access to those student credit cards and potentially, 357 00:16:02,960 --> 00:16:05,320 Speaker 1: if you have a good score, even better credit cards 358 00:16:05,360 --> 00:16:07,800 Speaker 1: with with better rewards and esther you asked about the 359 00:16:07,800 --> 00:16:10,560 Speaker 1: application process, applying for one card at a time is 360 00:16:10,560 --> 00:16:12,320 Speaker 1: the way to go. But but since you'll typically find 361 00:16:12,320 --> 00:16:15,600 Speaker 1: out instantaneously if you qualify for that credit card, since 362 00:16:15,640 --> 00:16:19,240 Speaker 1: you're likely applying online, you could immediately try it again, 363 00:16:19,640 --> 00:16:21,560 Speaker 1: you probably don't want to apply for more than a 364 00:16:21,640 --> 00:16:25,560 Speaker 1: couple as multiple hard inquiries will ding your score even more. 365 00:16:25,800 --> 00:16:27,680 Speaker 1: So that's why it's important to know your score when 366 00:16:27,680 --> 00:16:29,640 Speaker 1: you're applying, and it just kind of gives you a 367 00:16:29,640 --> 00:16:32,360 Speaker 1: sense of what cards you're going to be able to 368 00:16:32,440 --> 00:16:35,200 Speaker 1: get when you do apply. But, like Matt said, I 369 00:16:35,200 --> 00:16:37,280 Speaker 1: think getting a student credit card shouldn't be an issue 370 00:16:37,400 --> 00:16:39,400 Speaker 1: since you're a student. And the cool thing about credit 371 00:16:39,400 --> 00:16:41,840 Speaker 1: card and Matt, what you mentioned is they basically telegraph 372 00:16:41,920 --> 00:16:44,000 Speaker 1: to you whether or not you're going to be approved 373 00:16:44,040 --> 00:16:45,520 Speaker 1: for a credit card. And I kind of like how 374 00:16:45,520 --> 00:16:47,560 Speaker 1: they've done that. They know so much about you. Now 375 00:16:47,800 --> 00:16:50,240 Speaker 1: that they know everything about it, it feels like that 376 00:16:50,320 --> 00:16:52,800 Speaker 1: it totally feels like that they know Joel loves raspberry beer. 377 00:16:53,720 --> 00:16:56,080 Speaker 1: I'm really enjoying this one. And and so, yeah, they 378 00:16:56,120 --> 00:16:58,720 Speaker 1: know so much about you that they can tell you 379 00:16:58,840 --> 00:17:01,880 Speaker 1: with almost a hun uncertainty whether or not you're going 380 00:17:01,920 --> 00:17:03,040 Speaker 1: to be able to get that card or not, so 381 00:17:03,080 --> 00:17:05,840 Speaker 1: you don't even bother applying if you're going to get rejected. 382 00:17:06,040 --> 00:17:08,600 Speaker 1: And then you asked about not closing that credit card, right, 383 00:17:08,600 --> 00:17:11,360 Speaker 1: and that is completely true. Keeping your first card around 384 00:17:11,359 --> 00:17:13,120 Speaker 1: for a long time, even if it's not the card 385 00:17:13,160 --> 00:17:15,320 Speaker 1: that you use all the time, but just keeping that 386 00:17:15,359 --> 00:17:19,040 Speaker 1: card open has massive advantages for keeping your credit score high. 387 00:17:19,320 --> 00:17:22,280 Speaker 1: The only cons to having a credit card is just 388 00:17:22,320 --> 00:17:25,680 Speaker 1: the temptation to overspend. But there are actually no disadvantages 389 00:17:25,760 --> 00:17:29,440 Speaker 1: of having credit. It's actually not having credit or having 390 00:17:29,480 --> 00:17:31,920 Speaker 1: a bad credit score that you should be worried about. 391 00:17:31,960 --> 00:17:34,600 Speaker 1: We've previously talked about how you know bad credit like 392 00:17:34,640 --> 00:17:36,840 Speaker 1: it works its way into so many different aspects of 393 00:17:36,880 --> 00:17:38,960 Speaker 1: your life. And so I think it's smart essort that 394 00:17:38,960 --> 00:17:41,760 Speaker 1: you're getting started and you're building up your credit score now. Yeah, 395 00:17:41,840 --> 00:17:44,200 Speaker 1: for sure, all right. And Esther also asked about other 396 00:17:44,200 --> 00:17:47,320 Speaker 1: resources for learning about money, well books. I think first 397 00:17:47,359 --> 00:17:49,560 Speaker 1: of all, this podcast, for sure, this is all you need. 398 00:17:49,640 --> 00:17:52,520 Speaker 1: Esther don't turn anywhere else. I think it is important 399 00:17:52,520 --> 00:17:55,960 Speaker 1: to have like a number of of wise voices kind 400 00:17:55,960 --> 00:17:59,040 Speaker 1: of filling your your brain, your ears with money advice. 401 00:17:59,080 --> 00:18:01,119 Speaker 1: And so yeah, we would say to like we we 402 00:18:01,160 --> 00:18:02,800 Speaker 1: try to do a really good job on this podcast 403 00:18:02,840 --> 00:18:06,919 Speaker 1: of expounding you know, financial personal finance basics, personal finance 404 00:18:06,960 --> 00:18:10,560 Speaker 1: information in an easy to understand way that is helpful. 405 00:18:10,760 --> 00:18:13,880 Speaker 1: But having multiple viewpoints, having multiple different people who have 406 00:18:13,920 --> 00:18:16,840 Speaker 1: been studying and thinking about the subjects for a number 407 00:18:16,880 --> 00:18:18,800 Speaker 1: of years. I think it's really helpful to read a 408 00:18:18,800 --> 00:18:21,000 Speaker 1: bunch of books too, right, And so I would say 409 00:18:21,000 --> 00:18:22,919 Speaker 1: make it a goal to read three or four classic 410 00:18:22,960 --> 00:18:26,080 Speaker 1: personal finance books. A couple of recommendations that the richest 411 00:18:26,119 --> 00:18:28,320 Speaker 1: main in Babylon is kind of a good one to 412 00:18:28,400 --> 00:18:31,120 Speaker 1: be able to glean some timeless principles. There's a book 413 00:18:31,119 --> 00:18:32,960 Speaker 1: called I Will Teach You to Be Rich. It's a 414 00:18:33,040 --> 00:18:36,359 Speaker 1: terrible name, it sounds scammy. But Ramat Sati, who was 415 00:18:36,560 --> 00:18:38,280 Speaker 1: a guest on our show, Yeah, I don't know, a 416 00:18:38,320 --> 00:18:40,359 Speaker 1: number of months ago, he kind of wrote more of 417 00:18:40,359 --> 00:18:44,040 Speaker 1: a modern guide with practical, actionable tips, and he spot 418 00:18:44,080 --> 00:18:45,879 Speaker 1: on and in almost all the advice he gives in 419 00:18:45,920 --> 00:18:47,760 Speaker 1: that we we aligned with re Meat on a lot 420 00:18:47,800 --> 00:18:49,800 Speaker 1: of things. Yeah, Remain actually lives in New York City 421 00:18:49,800 --> 00:18:51,439 Speaker 1: as well, so you could probably look him up and 422 00:18:51,480 --> 00:18:53,560 Speaker 1: you know, do some stalking, show up at his apartment, 423 00:18:53,920 --> 00:18:58,320 Speaker 1: say hi, ask for him to sign your copy. Right. Yeah, 424 00:18:58,320 --> 00:18:59,879 Speaker 1: And one more book that we would recommend you check 425 00:18:59,880 --> 00:19:01,840 Speaker 1: out out esther, especially as you get more and more 426 00:19:01,840 --> 00:19:04,480 Speaker 1: into investing in particular, is the book The Simple Path 427 00:19:04,520 --> 00:19:07,520 Speaker 1: of Wealth, and that was written by our friend Jail Collins, 428 00:19:07,560 --> 00:19:09,840 Speaker 1: who was on the podcast not too long ago. So, yeah, 429 00:19:09,840 --> 00:19:11,800 Speaker 1: we try to get a lot of these people that 430 00:19:11,880 --> 00:19:14,280 Speaker 1: are are well known in this space, that are kind 431 00:19:14,320 --> 00:19:17,399 Speaker 1: of experts in in certain fields, in certain segments of 432 00:19:17,440 --> 00:19:20,120 Speaker 1: personal finance to come on the show too. And yeah, 433 00:19:20,320 --> 00:19:22,119 Speaker 1: basically though, there are a lot of timeless principles, but 434 00:19:22,119 --> 00:19:24,439 Speaker 1: there's also a lot of change in personal finance over 435 00:19:24,480 --> 00:19:26,200 Speaker 1: the years. Right, There's the Secure Act, which we've talked 436 00:19:26,240 --> 00:19:27,840 Speaker 1: about on the show. There's all sorts of things that 437 00:19:27,920 --> 00:19:30,479 Speaker 1: happened every year, tax code changes, stuff like that, and 438 00:19:30,520 --> 00:19:33,679 Speaker 1: so you know, at least on a podcast form, we 439 00:19:33,680 --> 00:19:35,960 Speaker 1: can keep up with the moving parts. Whereas a written 440 00:19:36,000 --> 00:19:38,400 Speaker 1: book that was written five or ten years ago, it's 441 00:19:38,440 --> 00:19:39,880 Speaker 1: not completely out of date. There's a lot of good 442 00:19:39,880 --> 00:19:41,800 Speaker 1: information in there, but keeping up with the changes in 443 00:19:41,840 --> 00:19:44,720 Speaker 1: personal finance, whether it's through a podcast or or reading newspapers, 444 00:19:44,920 --> 00:19:47,399 Speaker 1: would say that's important too. So, yeah, make sure that 445 00:19:47,440 --> 00:19:49,280 Speaker 1: you're not just reading a book that's ten years old 446 00:19:49,440 --> 00:19:52,040 Speaker 1: and assuming that everything is the exact time today, because yeah, 447 00:19:52,040 --> 00:19:54,399 Speaker 1: things do change over the years. All right, man, So 448 00:19:54,480 --> 00:19:55,880 Speaker 1: let's go ahead to hear from a listener now who 449 00:19:55,880 --> 00:19:58,439 Speaker 1: has a question about investing as well as a student 450 00:19:58,440 --> 00:20:01,400 Speaker 1: loan forgiveness program. Hi guys, my name is Jeffrey Hann 451 00:20:01,800 --> 00:20:04,480 Speaker 1: I am from Jacksonville, Florida. I just had a quick 452 00:20:04,560 --> 00:20:09,439 Speaker 1: question regarding the roth IRA versus a traditional IRA or 453 00:20:09,840 --> 00:20:12,760 Speaker 1: or four or three B. I know you guys advocate 454 00:20:12,840 --> 00:20:16,600 Speaker 1: for a roth IRA being the best retirement account to 455 00:20:16,640 --> 00:20:19,400 Speaker 1: contribute to, but I think I'm in a special situation. 456 00:20:19,400 --> 00:20:22,080 Speaker 1: I just want to get your thoughts. I'm currently doing 457 00:20:22,119 --> 00:20:26,640 Speaker 1: the public student loan forgiveness program, which you contribute your 458 00:20:26,680 --> 00:20:29,560 Speaker 1: minimum payment for ten years if you work for a 459 00:20:29,600 --> 00:20:32,639 Speaker 1: not for profit organization, and after that the remainder of 460 00:20:32,680 --> 00:20:35,840 Speaker 1: the loan is forgiven. They base your loan payment on 461 00:20:36,560 --> 00:20:39,200 Speaker 1: your net income, so the more you contribute to your 462 00:20:39,240 --> 00:20:41,639 Speaker 1: four or three B or four one K the less 463 00:20:42,440 --> 00:20:45,440 Speaker 1: monthly payment you have to do. And obviously you want 464 00:20:45,480 --> 00:20:48,520 Speaker 1: to pay the least amount of money to the loan 465 00:20:48,600 --> 00:20:51,840 Speaker 1: since you're gonna get it forgiven. So my question is, 466 00:20:51,880 --> 00:20:56,200 Speaker 1: in this circumstance, would it still be better to contribute 467 00:20:56,200 --> 00:20:58,439 Speaker 1: to a ROTH or should I continue to max out 468 00:20:58,520 --> 00:21:01,920 Speaker 1: my four or three B? Thank you well, Joel. Before 469 00:21:01,920 --> 00:21:05,199 Speaker 1: we answer Jeffrey's question, he's from Jacksonville, and you and 470 00:21:05,240 --> 00:21:07,480 Speaker 1: I we've been there a few times with our wives, 471 00:21:07,480 --> 00:21:10,200 Speaker 1: with our families, and I'm specifically thinking of the episode 472 00:21:10,320 --> 00:21:13,280 Speaker 1: we recorded with our wives at Jacksonville Beach. That was 473 00:21:13,320 --> 00:21:14,560 Speaker 1: a lot of fun. Man. We ought to do that 474 00:21:14,560 --> 00:21:16,600 Speaker 1: again soon. Yeah, we didn't do it on the beach though, 475 00:21:16,640 --> 00:21:19,919 Speaker 1: because seagulls and crap standing in our microphones, all that 476 00:21:19,960 --> 00:21:21,679 Speaker 1: kind of stuff. But yeah, no, that was a fun episode. 477 00:21:21,680 --> 00:21:23,359 Speaker 1: And yet this summer we're gonna have them on again, 478 00:21:23,440 --> 00:21:25,320 Speaker 1: so that should be really fun. That's the plan. At 479 00:21:25,359 --> 00:21:28,720 Speaker 1: least we'll get there. But yeah, Jeffrey brings up a 480 00:21:28,720 --> 00:21:32,280 Speaker 1: great question, Matt and I think basically our brief answer 481 00:21:32,320 --> 00:21:35,119 Speaker 1: would be, do neither of those things right? Should we 482 00:21:35,119 --> 00:21:37,119 Speaker 1: elaborate or should we leave it at that that's it. 483 00:21:37,200 --> 00:21:39,640 Speaker 1: Do neither. No, Yeah, for real, Jeffrey, don't max out 484 00:21:39,640 --> 00:21:42,400 Speaker 1: your four three B or contribute to a roth ira 485 00:21:42,400 --> 00:21:45,040 Speaker 1: at least for now. Right, we do love our raths, 486 00:21:45,359 --> 00:21:47,320 Speaker 1: but you are in a different position, Like you mentioned, 487 00:21:47,520 --> 00:21:50,639 Speaker 1: bloring your a g I your adjusted gross income in 488 00:21:50,720 --> 00:21:53,480 Speaker 1: order to have a smaller student loan payment. That is 489 00:21:53,520 --> 00:21:55,800 Speaker 1: a really smart path to take, and if you are 490 00:21:55,800 --> 00:21:59,440 Speaker 1: contributing to a ROTH, you won't be able to do that. Yeah, 491 00:21:59,520 --> 00:22:03,159 Speaker 1: the RATH is a great tool for most people, but 492 00:22:03,320 --> 00:22:07,720 Speaker 1: it's not necessarily the optimum strategy for everyone. And Jeffrey 493 00:22:07,760 --> 00:22:10,000 Speaker 1: is a perfect example here of when the ROTH is 494 00:22:10,040 --> 00:22:12,159 Speaker 1: not the best move. But let's talk about four or 495 00:22:12,200 --> 00:22:15,560 Speaker 1: three b's for a second. Map that's Jeffreys retirement plan 496 00:22:15,600 --> 00:22:18,040 Speaker 1: at work, and those are typically available to folks at 497 00:22:18,040 --> 00:22:21,000 Speaker 1: work at nonprofits and teachers. And when you contribute to 498 00:22:21,000 --> 00:22:23,360 Speaker 1: a four or three B, it does lower your adjusted 499 00:22:23,400 --> 00:22:25,159 Speaker 1: gross income, so it makes it look like you make 500 00:22:25,240 --> 00:22:27,840 Speaker 1: less money to the federal government, which is great. You're 501 00:22:27,840 --> 00:22:30,399 Speaker 1: gonna pay less taxes and it's going to affect how 502 00:22:30,480 --> 00:22:33,200 Speaker 1: much you're paying on your student loans. Right. The problem 503 00:22:33,280 --> 00:22:35,439 Speaker 1: with four or three bs though, and the reason we 504 00:22:35,480 --> 00:22:38,480 Speaker 1: don't typically like them is because of the limited investment 505 00:22:38,520 --> 00:22:42,560 Speaker 1: options you have, and those investment options are laden with fees. 506 00:22:42,800 --> 00:22:45,040 Speaker 1: Those fees can take a massive bite out of your 507 00:22:45,080 --> 00:22:47,560 Speaker 1: nest egg. Not every article I read about four or 508 00:22:47,560 --> 00:22:50,400 Speaker 1: three vs, they just look nastier and nastier and nastier. 509 00:22:50,480 --> 00:22:53,440 Speaker 1: There are surrender charges involved in four or three B s. 510 00:22:53,680 --> 00:22:57,200 Speaker 1: There are so many issues with these plans altogether. And 511 00:22:57,280 --> 00:22:59,680 Speaker 1: you know what, a typical expense ratio that we're talking 512 00:22:59,680 --> 00:23:02,879 Speaker 1: about at a company like Vanguard or Fidelity fluctuates somewhere 513 00:23:02,920 --> 00:23:07,320 Speaker 1: between literally zero and like zero point one percent, and 514 00:23:07,440 --> 00:23:09,240 Speaker 1: a lot of times these four or three B plans 515 00:23:09,280 --> 00:23:13,520 Speaker 1: are have fees above two percent, and that is crazy. 516 00:23:13,760 --> 00:23:15,920 Speaker 1: This sort of bite that takes out of your eventual 517 00:23:15,960 --> 00:23:19,240 Speaker 1: retirement is massive. And so yeah, if you can avoid 518 00:23:19,480 --> 00:23:22,040 Speaker 1: investing the majority of your money and a fee laden 519 00:23:22,080 --> 00:23:24,560 Speaker 1: four or three B, we would recommend avoiding it. Yeah, 520 00:23:24,560 --> 00:23:26,080 Speaker 1: that's one of the problems with the four three B 521 00:23:26,359 --> 00:23:28,040 Speaker 1: two is that like they do look like four oh 522 00:23:28,040 --> 00:23:30,560 Speaker 1: one ks like on the surface, like how they behave, 523 00:23:30,600 --> 00:23:33,120 Speaker 1: what you can contribute to them, It's all very similar, 524 00:23:33,160 --> 00:23:35,160 Speaker 1: except when it comes to the fees, and that's more 525 00:23:35,200 --> 00:23:37,800 Speaker 1: than enough to cause you to stay away completely. Yeah, 526 00:23:37,880 --> 00:23:40,800 Speaker 1: run away like Usain bolt Fast, said Jeffrey. So that 527 00:23:40,840 --> 00:23:42,159 Speaker 1: you know you might be asking them, well, what do 528 00:23:42,200 --> 00:23:44,639 Speaker 1: I do. What we'd recommend you to do then is 529 00:23:44,640 --> 00:23:46,320 Speaker 1: to make sure that you are getting a match if 530 00:23:46,320 --> 00:23:50,000 Speaker 1: your employer offers one, right, since you can't beat return 531 00:23:50,160 --> 00:23:52,720 Speaker 1: on your money. But then after that, you might not 532 00:23:52,840 --> 00:23:55,400 Speaker 1: want to go too hard investing in your four three 533 00:23:55,400 --> 00:23:59,040 Speaker 1: B because of those fees. Instead, open up a traditional IRA, 534 00:23:59,480 --> 00:24:01,600 Speaker 1: not a raw but a traditional array with one of 535 00:24:01,640 --> 00:24:04,120 Speaker 1: the low cost and investment companies we love and max 536 00:24:04,160 --> 00:24:06,360 Speaker 1: that out. Instead, you want to ensure that you are 537 00:24:06,480 --> 00:24:08,919 Speaker 1: lowering that a g I, which then in turn lowers 538 00:24:08,960 --> 00:24:10,920 Speaker 1: that minimum payment that you're paying for your student loan. 539 00:24:11,359 --> 00:24:13,880 Speaker 1: It's it's like a double win, right, because you are 540 00:24:13,960 --> 00:24:16,520 Speaker 1: lowering your a g I by investing for your retirement 541 00:24:16,680 --> 00:24:18,240 Speaker 1: and that also reduces the amount that you have to 542 00:24:18,240 --> 00:24:20,480 Speaker 1: pay towards your student loan. And then assuming that you 543 00:24:20,520 --> 00:24:22,200 Speaker 1: are putting your money in, you know, to a low 544 00:24:22,240 --> 00:24:25,879 Speaker 1: cost provider like Vanguard or Fidelity, it's like a triple win. 545 00:24:26,359 --> 00:24:28,760 Speaker 1: It's like a triple word score. Uh, you can't go 546 00:24:28,840 --> 00:24:30,760 Speaker 1: wrong by by doing that and Jeffrey, I think this 547 00:24:30,760 --> 00:24:32,879 Speaker 1: will be great as well, because ten years of doing this, 548 00:24:32,920 --> 00:24:35,119 Speaker 1: you're gonna have a nice nest egg saved up. And 549 00:24:35,119 --> 00:24:36,560 Speaker 1: then on top of that, you're also going to have 550 00:24:36,640 --> 00:24:39,000 Speaker 1: sort of the reinforced behavior, you know, like you do 551 00:24:39,040 --> 00:24:41,480 Speaker 1: anything for ten years, you're probably gonna keep doing that 552 00:24:41,520 --> 00:24:43,720 Speaker 1: after that ten years too. His student loans are gonna 553 00:24:43,720 --> 00:24:46,840 Speaker 1: be forgiven too. He's gonna be sitting pretty nice, right, Yeah, Jeffrey, 554 00:24:46,880 --> 00:24:48,080 Speaker 1: you're gonna be in a good spot. I like all 555 00:24:48,119 --> 00:24:49,960 Speaker 1: your heads at in lowering your a G I to 556 00:24:50,000 --> 00:24:52,320 Speaker 1: lower those student loan payments. But just go with the 557 00:24:52,359 --> 00:24:54,880 Speaker 1: traditional array instead of the phi laden four or three 558 00:24:54,880 --> 00:24:56,679 Speaker 1: B and you'll be all set. All right, let's hit 559 00:24:56,720 --> 00:24:59,120 Speaker 1: a couple more questions, including that one about day trading 560 00:24:59,320 --> 00:25:10,320 Speaker 1: right after the break. M alright, we're back from the 561 00:25:10,359 --> 00:25:12,560 Speaker 1: break taking listener questions, and this is gonna be a 562 00:25:12,600 --> 00:25:14,639 Speaker 1: great question because we're going to talk about two of 563 00:25:14,680 --> 00:25:17,840 Speaker 1: our favorite things. Hey, Matt and Joel, my name is 564 00:25:17,920 --> 00:25:20,760 Speaker 1: actually from Provo, Utah. First of all, thank you both 565 00:25:20,800 --> 00:25:23,200 Speaker 1: so much for the work that you're doing. I'm really 566 00:25:23,240 --> 00:25:25,920 Speaker 1: grateful to have your podcast, especially because I can find 567 00:25:25,920 --> 00:25:29,120 Speaker 1: the world of finances pretty intimidating, and you're both doing 568 00:25:29,119 --> 00:25:32,479 Speaker 1: an amazing job at lowering that barrier to entry. So 569 00:25:32,600 --> 00:25:35,320 Speaker 1: I have two questions. Feel free to answer both or 570 00:25:35,640 --> 00:25:38,720 Speaker 1: one of them. First of all, my husband and I 571 00:25:38,800 --> 00:25:42,080 Speaker 1: currently bank with the dreaded Wells Fargo, and I've been 572 00:25:42,119 --> 00:25:44,879 Speaker 1: wanting to change banks for a while. Now. I know 573 00:25:44,960 --> 00:25:47,520 Speaker 1: you guys have recommended a few different online banks like 574 00:25:47,600 --> 00:25:51,040 Speaker 1: Ally or c I t the only reason that we've 575 00:25:51,040 --> 00:25:53,560 Speaker 1: hesitated is because we're unsure of what's going to happen 576 00:25:53,600 --> 00:25:57,200 Speaker 1: to our credit scores. I myself have been with my 577 00:25:57,320 --> 00:26:00,000 Speaker 1: original bank for over ten years and the only credit 578 00:26:00,040 --> 00:26:03,119 Speaker 1: cards that I have are at Wells Fargo. What is 579 00:26:03,200 --> 00:26:06,199 Speaker 1: involved with switching banks? And if we switch, will I 580 00:26:06,240 --> 00:26:08,280 Speaker 1: have to cancel my credit cards with my old bank. 581 00:26:09,280 --> 00:26:11,879 Speaker 1: My second question is a good friend of mine is 582 00:26:11,880 --> 00:26:14,280 Speaker 1: currently working for a company that teaches people how to 583 00:26:14,400 --> 00:26:17,560 Speaker 1: day trade. I've been wanting to start taking the classes. 584 00:26:17,640 --> 00:26:21,240 Speaker 1: I went to a free orientation, but the classes themselves 585 00:26:21,320 --> 00:26:24,640 Speaker 1: cost several thousand dollars, and frankly, I'm unsure if it's 586 00:26:24,640 --> 00:26:27,400 Speaker 1: a scam or not. What is your opinion of day 587 00:26:27,440 --> 00:26:30,240 Speaker 1: trading and of the companies that claim to teach you 588 00:26:30,400 --> 00:26:33,560 Speaker 1: how to day trade and quote unquote hack the stock market. 589 00:26:34,119 --> 00:26:38,680 Speaker 1: Thank you. Actually it's a trap. Uh, well, it may 590 00:26:38,680 --> 00:26:41,120 Speaker 1: not be a trap, but we definitely don't think fondly 591 00:26:41,320 --> 00:26:43,080 Speaker 1: of day trading. And you know, we'll get to that 592 00:26:43,160 --> 00:26:45,639 Speaker 1: question here in a minute. But actually, thanks so much 593 00:26:45,640 --> 00:26:48,040 Speaker 1: for the kind words that we really appreciate. It's um first, 594 00:26:48,040 --> 00:26:51,280 Speaker 1: before that, we've got to get actually out of Wells Fargo. Yes, exactly, 595 00:26:51,359 --> 00:26:54,320 Speaker 1: like definitely ditched that Wells Fargo bank account. And I 596 00:26:54,320 --> 00:26:55,520 Speaker 1: feel like I can, you know, we can kind of 597 00:26:55,520 --> 00:26:57,679 Speaker 1: tease a little bit. I personally used to bank with 598 00:26:57,720 --> 00:26:59,720 Speaker 1: Wells Fargo, and I'm proud to say that I have 599 00:27:00,040 --> 00:27:02,159 Speaker 1: them to the curb long ago. Hi, I'm my name 600 00:27:02,200 --> 00:27:05,199 Speaker 1: is Matt, and I used to bank with Wells Fargo. Agree. Right, 601 00:27:05,440 --> 00:27:07,320 Speaker 1: there's so many issues Matt, of course, and we've've talked 602 00:27:07,320 --> 00:27:10,320 Speaker 1: about them on the show. But the former CEO of 603 00:27:10,440 --> 00:27:13,080 Speaker 1: Wells Fargo is barred from ever working in the banking 604 00:27:13,160 --> 00:27:16,639 Speaker 1: industry again. And that's so ridiculous. Those kind of those 605 00:27:16,680 --> 00:27:19,560 Speaker 1: kind of things never happened. Typically. It seems like when 606 00:27:19,560 --> 00:27:21,439 Speaker 1: when it comes to white color crime, there are very 607 00:27:21,480 --> 00:27:24,119 Speaker 1: few consequences in our current day and agent and and 608 00:27:24,119 --> 00:27:27,000 Speaker 1: that's sad because there are legitimate things going on where 609 00:27:27,040 --> 00:27:30,000 Speaker 1: people are being taken advantage of and hurt and their 610 00:27:30,040 --> 00:27:33,159 Speaker 1: credit scores maligned. But just to see at least a 611 00:27:33,200 --> 00:27:36,320 Speaker 1: small piece of justice because of the way that Wells 612 00:27:36,359 --> 00:27:39,000 Speaker 1: took advantage of their customers. I love seeing that. You know, 613 00:27:39,040 --> 00:27:41,359 Speaker 1: it's nice. It's nice to know that at least something 614 00:27:41,720 --> 00:27:44,520 Speaker 1: beyond just the slap of the wrist actually occurred. And plus, 615 00:27:44,560 --> 00:27:47,200 Speaker 1: it's just such a ridiculous thing to be banned for life, 616 00:27:47,720 --> 00:27:50,280 Speaker 1: like you had to have done something so terrible, Like 617 00:27:50,280 --> 00:27:52,440 Speaker 1: what if they're like Joel, you can't be on podcasts 618 00:27:52,480 --> 00:27:55,800 Speaker 1: ever again, Like he must have really screwed up. Man. 619 00:27:55,840 --> 00:27:57,760 Speaker 1: It's like being banned from baseball, right, I mean, look 620 00:27:57,800 --> 00:27:59,800 Speaker 1: what the Houston Nashrows did, and none of those guys 621 00:27:59,840 --> 00:28:02,440 Speaker 1: got banned from baseball. I mean, like that's another thing 622 00:28:02,480 --> 00:28:04,919 Speaker 1: where come on, I feel like the astros, oh, all 623 00:28:04,960 --> 00:28:07,119 Speaker 1: of us a little bit more than what happened. But actually, 624 00:28:07,119 --> 00:28:09,240 Speaker 1: you know you did mention ally, like I bank with Ally, 625 00:28:09,280 --> 00:28:11,320 Speaker 1: they're great, Joel banks with C I T. But there's 626 00:28:11,359 --> 00:28:13,640 Speaker 1: lots of great options, like Joel mentioned, there's Capital One, 627 00:28:13,640 --> 00:28:15,920 Speaker 1: they're great. We've heard great things about Marcus as well. 628 00:28:16,400 --> 00:28:19,480 Speaker 1: Just look at some of those online options, but don't 629 00:28:19,520 --> 00:28:22,080 Speaker 1: close the credit cards, right you mentioned those. If you 630 00:28:22,119 --> 00:28:23,920 Speaker 1: were to do that, that that would only hurt your credit score. 631 00:28:24,160 --> 00:28:26,639 Speaker 1: You can leave your checking and your savings accounts without 632 00:28:26,800 --> 00:28:28,960 Speaker 1: having to close your credit cards. Just be sure to 633 00:28:29,119 --> 00:28:31,880 Speaker 1: get another credit card that will definitely offer you some 634 00:28:31,960 --> 00:28:35,000 Speaker 1: superior rewards to the cards that you currently have, and 635 00:28:35,080 --> 00:28:37,640 Speaker 1: know that your credit scord will not be changed by 636 00:28:37,760 --> 00:28:40,080 Speaker 1: where you do your banking right like wherever it is 637 00:28:40,120 --> 00:28:42,320 Speaker 1: you have your checking account or your savings accounts, but 638 00:28:42,440 --> 00:28:45,720 Speaker 1: it would definitely be affected by closing those credit card accounts. 639 00:28:45,720 --> 00:28:47,080 Speaker 1: So in that case, you want to make sure that 640 00:28:47,080 --> 00:28:48,920 Speaker 1: you leave them open even if you're not going to 641 00:28:49,040 --> 00:28:51,240 Speaker 1: use them. The only instance that we might recommend you 642 00:28:51,240 --> 00:28:53,760 Speaker 1: close those credit cards is if they have an annual fee, 643 00:28:54,040 --> 00:28:55,880 Speaker 1: and at that point it's up to you whether it 644 00:28:56,000 --> 00:28:58,400 Speaker 1: is worth keeping those cards around in order to maintain 645 00:28:58,440 --> 00:29:00,520 Speaker 1: that history of credit. But if did want to kick 646 00:29:00,520 --> 00:29:02,520 Speaker 1: those fees to the curb, we'd recommend that you get 647 00:29:02,520 --> 00:29:05,360 Speaker 1: those new credit cards open first and then close those 648 00:29:05,400 --> 00:29:07,440 Speaker 1: old Wells Fargo credit cards. Yeah, man, I think we 649 00:29:07,480 --> 00:29:10,160 Speaker 1: need to debunk a myth too, that switching banks is hard. 650 00:29:10,720 --> 00:29:13,360 Speaker 1: I think a lot of people because they assume that 651 00:29:13,400 --> 00:29:15,960 Speaker 1: it's going to be this extended process or it's gonna 652 00:29:16,000 --> 00:29:18,280 Speaker 1: take a lot of time, they just don't do it 653 00:29:18,520 --> 00:29:20,800 Speaker 1: and they stay with a crumby bank. And not every 654 00:29:20,840 --> 00:29:23,280 Speaker 1: crumby bank is is taking advantage of their customers or 655 00:29:23,320 --> 00:29:25,400 Speaker 1: has done so, like Wells Fargo, but a lot of 656 00:29:25,520 --> 00:29:28,840 Speaker 1: banks just are providing poor customer service and zero rate 657 00:29:28,840 --> 00:29:31,280 Speaker 1: of return on your savings. So we would say get 658 00:29:31,360 --> 00:29:33,160 Speaker 1: rid of those banks and go to a place that 659 00:29:33,200 --> 00:29:35,720 Speaker 1: actually does pay you. And so, yeah, switching banks isn't 660 00:29:35,760 --> 00:29:38,400 Speaker 1: that hard, especially if you're opening up an account with 661 00:29:38,440 --> 00:29:41,600 Speaker 1: one of our favorite online banks. Open a new account 662 00:29:41,640 --> 00:29:43,600 Speaker 1: and then link it to your old account. Transfer money over. 663 00:29:43,800 --> 00:29:46,440 Speaker 1: It's super simple. Your new bank might even offer like 664 00:29:46,480 --> 00:29:49,880 Speaker 1: a switching service to help you transfer over auto payments 665 00:29:49,880 --> 00:29:52,440 Speaker 1: and direct deposits, and if they don't, we'll do it manually. 666 00:29:52,520 --> 00:29:54,560 Speaker 1: It's not that difficult. If you want to play it safe, 667 00:29:54,640 --> 00:29:57,000 Speaker 1: keep the old account around with some money in it 668 00:29:57,000 --> 00:29:58,640 Speaker 1: for a few months to ensure that you're good to 669 00:29:58,680 --> 00:30:02,440 Speaker 1: go and that no aumatic payments get missed. Basically, it's 670 00:30:02,480 --> 00:30:05,080 Speaker 1: easier and once you get settled at an online bank. 671 00:30:05,400 --> 00:30:08,240 Speaker 1: I mean, the services are so robust with the ones 672 00:30:08,280 --> 00:30:10,240 Speaker 1: that you mentioned and and some of the other ones 673 00:30:10,280 --> 00:30:12,720 Speaker 1: out there, that you're not going to miss a day 674 00:30:12,840 --> 00:30:15,080 Speaker 1: of banking with an old institution doing it the old 675 00:30:15,080 --> 00:30:17,560 Speaker 1: school way. You're gonna be so thankful that you migrated 676 00:30:17,600 --> 00:30:20,000 Speaker 1: to a bank that actually pays you money on your savings, 677 00:30:20,040 --> 00:30:22,560 Speaker 1: that pays you interest and at the same time offers 678 00:30:22,720 --> 00:30:26,560 Speaker 1: a bunch of other services, eliminates fees pretty much all together, 679 00:30:26,760 --> 00:30:30,160 Speaker 1: and then offers other services in addition that kind of 680 00:30:30,200 --> 00:30:32,680 Speaker 1: make the whole banking experience more robust. I mean, online 681 00:30:32,680 --> 00:30:34,880 Speaker 1: banking is just where it's at. And then actually to 682 00:30:34,920 --> 00:30:37,200 Speaker 1: your question about day trading, like we mentioned, that is 683 00:30:37,240 --> 00:30:40,120 Speaker 1: not something that we are fans of. You know, day 684 00:30:40,120 --> 00:30:43,640 Speaker 1: trading in and of itself is not necessarily a scam, 685 00:30:43,640 --> 00:30:48,000 Speaker 1: but those classes are often incredibly expensive and offer very 686 00:30:48,040 --> 00:30:50,800 Speaker 1: little in return. Those thousands of dollars that you're mentioning 687 00:30:51,040 --> 00:30:53,240 Speaker 1: that you would spend for those classes would be far 688 00:30:53,280 --> 00:30:56,560 Speaker 1: better spent as an initial investment into a roth ira 689 00:30:57,120 --> 00:31:00,280 Speaker 1: where you're invested in widely diversified index funds or a 690 00:31:00,400 --> 00:31:03,240 Speaker 1: target date retirement fund. Yeah, man, I think day trading 691 00:31:03,520 --> 00:31:05,080 Speaker 1: is one of those things. I think it was hot 692 00:31:05,080 --> 00:31:07,040 Speaker 1: in the nineties, back when the trade was was like 693 00:31:07,160 --> 00:31:10,200 Speaker 1: first getting launched and they had the bay. It was 694 00:31:10,240 --> 00:31:11,840 Speaker 1: at the nineties. That was like the early two thousands. 695 00:31:12,040 --> 00:31:15,120 Speaker 1: Maybe it's early you're older than you think, yeah, but yeah, 696 00:31:15,200 --> 00:31:16,840 Speaker 1: day training was like hot. You're right, yeah, yeah, it's 697 00:31:16,880 --> 00:31:18,400 Speaker 1: like the early two thousands. That's when it was hot. 698 00:31:18,600 --> 00:31:21,000 Speaker 1: And now I think it is back to a certain extent, 699 00:31:21,080 --> 00:31:22,720 Speaker 1: and people are seeing the hot market and they think 700 00:31:22,720 --> 00:31:24,360 Speaker 1: they can get in there and they can make a 701 00:31:24,440 --> 00:31:26,880 Speaker 1: quick buck. And actually, the way that these people that 702 00:31:26,880 --> 00:31:29,600 Speaker 1: are pitching day trading and day trading classes are making 703 00:31:29,600 --> 00:31:32,240 Speaker 1: a quick buck is by you paying them thousands of dollars. 704 00:31:31,760 --> 00:31:34,800 Speaker 1: It's the classes. And if they were super experts at this, 705 00:31:35,040 --> 00:31:37,280 Speaker 1: how come they're only charging you a few thousand bucks 706 00:31:37,440 --> 00:31:40,800 Speaker 1: to learn their massive secrets where they can unlock millions, right, 707 00:31:41,160 --> 00:31:42,920 Speaker 1: And you know, I do think day trading has gotten 708 00:31:42,960 --> 00:31:45,560 Speaker 1: more popular with the younger generations, with the twenty something 709 00:31:45,640 --> 00:31:49,040 Speaker 1: year olds and and thirties, their professional investing career has 710 00:31:49,120 --> 00:31:52,120 Speaker 1: only seen a bowl market, right, Like, this is something 711 00:31:52,120 --> 00:31:54,640 Speaker 1: we've discussed before, and so you look around and you 712 00:31:54,680 --> 00:31:57,080 Speaker 1: see just the market doing nothing but climb, at least 713 00:31:57,160 --> 00:31:59,600 Speaker 1: until recently, you think that, well, I can't lose. It 714 00:31:59,600 --> 00:32:01,120 Speaker 1: makes a lot of sense. It seems like it's gonna 715 00:32:01,120 --> 00:32:02,800 Speaker 1: be pretty easy to to beat the market and to 716 00:32:02,840 --> 00:32:05,360 Speaker 1: pick the winning stocks. But in reality that's not always 717 00:32:05,360 --> 00:32:07,640 Speaker 1: the case. As we've seen, there are corrections, and you know, 718 00:32:07,680 --> 00:32:09,480 Speaker 1: there is not a way for you to hack the 719 00:32:09,480 --> 00:32:12,640 Speaker 1: stock market. Yeah, and there are people to They're they're 720 00:32:12,640 --> 00:32:14,840 Speaker 1: always looking for an edge no matter what the stock 721 00:32:14,880 --> 00:32:17,800 Speaker 1: market conditions are. There are people short selling Tesla and 722 00:32:17,800 --> 00:32:22,360 Speaker 1: then Tesla ramps up another in the like a week's time. Uh, 723 00:32:22,400 --> 00:32:24,920 Speaker 1: that was a couple of months ago. And there's stories 724 00:32:24,960 --> 00:32:27,560 Speaker 1: in the Wall Street Journal of people losing hundreds of 725 00:32:27,600 --> 00:32:29,640 Speaker 1: millions of dollars because they short at the stock. So 726 00:32:29,680 --> 00:32:32,080 Speaker 1: there's always people looking for an edge. There's always people 727 00:32:32,320 --> 00:32:34,600 Speaker 1: looking for a way to make a quick dollar. And 728 00:32:34,640 --> 00:32:37,840 Speaker 1: that's just not our philosophy. We think that it's really 729 00:32:37,960 --> 00:32:40,080 Speaker 1: really hard to do that, if not impossible to do 730 00:32:40,120 --> 00:32:42,440 Speaker 1: that well. There's not even a system out there that 731 00:32:42,480 --> 00:32:44,160 Speaker 1: someone can teach you in order to do it well. 732 00:32:44,360 --> 00:32:47,680 Speaker 1: And so the only surefire way to build wealth every 733 00:32:47,680 --> 00:32:50,120 Speaker 1: time is to go about it in a really simple 734 00:32:50,120 --> 00:32:52,600 Speaker 1: manner and be in it for the long haul. All right, 735 00:32:52,800 --> 00:32:54,719 Speaker 1: let's get to the next question from listener in Tampa 736 00:32:54,960 --> 00:32:58,920 Speaker 1: about having too many credit cards. Good morning, Joel and Matt. 737 00:32:59,000 --> 00:33:01,440 Speaker 1: This is Chris from up UH. I love the show 738 00:33:01,480 --> 00:33:03,760 Speaker 1: and listening since the beginning. I really appreciate it. I 739 00:33:03,800 --> 00:33:06,840 Speaker 1: have a question now that my credit has recovered, I'm 740 00:33:06,880 --> 00:33:08,920 Speaker 1: getting a lot of credit card offers in the mail, 741 00:33:09,080 --> 00:33:11,160 Speaker 1: and I was just curious, is there too high a 742 00:33:11,240 --> 00:33:14,000 Speaker 1: number of new credit cards to apply for? Uh? The 743 00:33:14,240 --> 00:33:17,320 Speaker 1: percenge right looks really good on them, and already have 744 00:33:17,320 --> 00:33:19,640 Speaker 1: a couple of credit cards. I was just curious if 745 00:33:19,680 --> 00:33:22,040 Speaker 1: there's a danger of having too many, say four or 746 00:33:22,080 --> 00:33:25,400 Speaker 1: five credit cards after you've recovered. Thanks again and take care. 747 00:33:26,920 --> 00:33:30,040 Speaker 1: Hey Chris, congrats on getting your credit score backup. Sounds 748 00:33:30,040 --> 00:33:31,920 Speaker 1: like you're making some good decisions when it comes to 749 00:33:31,960 --> 00:33:35,160 Speaker 1: your money. There are two main dangers in applying for 750 00:33:35,200 --> 00:33:37,320 Speaker 1: too many credit cards. The first is that you'll use 751 00:33:37,320 --> 00:33:39,960 Speaker 1: them poorly and rack up lots of debts, and the 752 00:33:40,000 --> 00:33:42,160 Speaker 1: second one is the initial hit to your credit score. 753 00:33:42,200 --> 00:33:43,640 Speaker 1: So this is something you want to make sure that 754 00:33:43,680 --> 00:33:46,880 Speaker 1: you're aware of if you're planning to take out alone soon. 755 00:33:47,080 --> 00:33:50,360 Speaker 1: Maybe you are house shopping or even just considering a refinance, 756 00:33:50,640 --> 00:33:52,720 Speaker 1: you may not be able to get that nice interest 757 00:33:52,800 --> 00:33:55,200 Speaker 1: rate that is being advertised if your credit score takes 758 00:33:55,320 --> 00:33:57,520 Speaker 1: enough things and you get below a certain threshold. Yeah, 759 00:33:57,600 --> 00:34:00,600 Speaker 1: and and Chris, you honestly shouldn't be paying much tension 760 00:34:00,640 --> 00:34:03,200 Speaker 1: at all to the interest rate of a credit card 761 00:34:03,200 --> 00:34:06,680 Speaker 1: because you shouldn't be paying interest if you have a balance. 762 00:34:06,840 --> 00:34:09,439 Speaker 1: We would suggest transferring it to a zero balance credit card. 763 00:34:09,440 --> 00:34:11,600 Speaker 1: We've got an article about that on the site, how 764 00:34:11,640 --> 00:34:14,040 Speaker 1: you can transfer to a credit card and avoid paying 765 00:34:14,120 --> 00:34:16,520 Speaker 1: interest at least while you do have a balance. But 766 00:34:16,920 --> 00:34:19,480 Speaker 1: really the goal is to not pay interest on credit 767 00:34:19,480 --> 00:34:21,960 Speaker 1: cards ever. And so I don't even know what the 768 00:34:21,960 --> 00:34:24,080 Speaker 1: interest rates are on any of my cards because I 769 00:34:24,120 --> 00:34:26,720 Speaker 1: never end up paying it because I pay my balance 770 00:34:26,880 --> 00:34:29,000 Speaker 1: in full on time every single month. And if you 771 00:34:29,080 --> 00:34:32,359 Speaker 1: don't have a balance, well, it's not necessarily best just 772 00:34:32,400 --> 00:34:34,600 Speaker 1: to sign up for a card based on the offer 773 00:34:34,640 --> 00:34:36,759 Speaker 1: you get in the mail. Often the best sign up 774 00:34:36,800 --> 00:34:39,920 Speaker 1: offers and the best terms for credit cards are found online, 775 00:34:40,200 --> 00:34:43,000 Speaker 1: So we would recommend to you actually kind of dig 776 00:34:43,080 --> 00:34:46,480 Speaker 1: into how you spend your money and get a credit 777 00:34:46,480 --> 00:34:49,120 Speaker 1: card that is best suited for you and offers you 778 00:34:49,160 --> 00:34:52,440 Speaker 1: the best rewards based on the kind of spending that 779 00:34:52,520 --> 00:34:54,880 Speaker 1: you do. We've also got an article about that on 780 00:34:54,920 --> 00:34:57,640 Speaker 1: the site too that will help you identify. Okay, how 781 00:34:57,760 --> 00:35:00,399 Speaker 1: is it that I primarily spend my money? And what 782 00:35:00,560 --> 00:35:03,080 Speaker 1: card do I need that's gonna give me the best 783 00:35:03,080 --> 00:35:05,799 Speaker 1: rewards based on the way I spent? And you can 784 00:35:05,840 --> 00:35:07,360 Speaker 1: find that by the way at how the money dot 785 00:35:07,400 --> 00:35:09,279 Speaker 1: com slash credit cards. Yeah, that's the best way to 786 00:35:09,280 --> 00:35:11,000 Speaker 1: do it. Man. You want to make sure you're maximizing 787 00:35:11,080 --> 00:35:13,160 Speaker 1: those rewards, no doubt. And Chris, you know you're talking 788 00:35:13,160 --> 00:35:15,520 Speaker 1: about a specific quantity, a certain number of credit cards, 789 00:35:15,520 --> 00:35:17,560 Speaker 1: and we think having four or five credit cards in 790 00:35:17,600 --> 00:35:20,520 Speaker 1: your wallet from different issuers with different perks like that 791 00:35:20,520 --> 00:35:22,880 Speaker 1: can be an awesome way for you to take advantage 792 00:35:22,880 --> 00:35:25,720 Speaker 1: of some of those benefits if you pay the balance 793 00:35:25,719 --> 00:35:31,120 Speaker 1: in full every single month. I personally have, uh, Joel, drumroll? Please? 794 00:35:32,760 --> 00:35:34,319 Speaker 1: Do you want to guess how many cards that Kate 795 00:35:34,320 --> 00:35:38,360 Speaker 1: and I have? Fourteen? Are you? Seriously? That's exactly how 796 00:35:38,400 --> 00:35:42,399 Speaker 1: many I counted. I had no idea super wildly most 797 00:35:42,440 --> 00:35:44,600 Speaker 1: of them are mine, but I mean Kate, Kate has 798 00:35:44,600 --> 00:35:46,560 Speaker 1: a bunch as well. But yeah, like fourteen and do I. 799 00:35:46,560 --> 00:35:48,239 Speaker 1: I don't use every single one of those cards, but 800 00:35:48,280 --> 00:35:50,359 Speaker 1: we you know, we have those open. Only a couple 801 00:35:50,440 --> 00:35:52,600 Speaker 1: of them have annual fees, but we get enough benefit 802 00:35:52,760 --> 00:35:55,160 Speaker 1: from those that it more than pays for itself. But yeah, 803 00:35:55,200 --> 00:35:57,280 Speaker 1: fourteen cards. I don't think I would recommend most folks 804 00:35:57,280 --> 00:35:59,720 Speaker 1: to have that many. But I also have them organized 805 00:35:59,719 --> 00:36:01,759 Speaker 1: in my sell spreadsheets, and they're labled as to which 806 00:36:01,760 --> 00:36:04,360 Speaker 1: ones are supposed to be used for whichever specific scenario 807 00:36:04,400 --> 00:36:06,719 Speaker 1: I'm in. It's super nerdy, but this is the kind 808 00:36:06,719 --> 00:36:09,080 Speaker 1: of stuff I'm into. Well, yeah, I mean, if if 809 00:36:09,120 --> 00:36:11,839 Speaker 1: you're really into maximizing credit card awards, most people are 810 00:36:11,840 --> 00:36:13,799 Speaker 1: going to be benefit from having somewhere between what like 811 00:36:13,800 --> 00:36:15,799 Speaker 1: three and six cards. I think that makes a whole 812 00:36:15,840 --> 00:36:18,239 Speaker 1: lot of sense, right, And you know, the everyday two 813 00:36:18,280 --> 00:36:21,160 Speaker 1: percent cash back for all purchases that don't offer you 814 00:36:21,200 --> 00:36:24,600 Speaker 1: the higher awards for specific category purchases like, for instance, 815 00:36:24,640 --> 00:36:28,080 Speaker 1: dining out or gasoline or buying travel. You know, find 816 00:36:28,080 --> 00:36:30,000 Speaker 1: credit cards that are going to give you even higher 817 00:36:30,000 --> 00:36:32,600 Speaker 1: benefits in those categories, and then use a two percent card, 818 00:36:32,640 --> 00:36:34,760 Speaker 1: a two percent cash back card for for every other purchase. 819 00:36:35,000 --> 00:36:38,160 Speaker 1: But Yeah, hopefully that helps Chris again, congrats on getting 820 00:36:38,160 --> 00:36:41,080 Speaker 1: your credit score way back up there. That's that's huge, 821 00:36:41,320 --> 00:36:43,120 Speaker 1: And I hope you find a couple of credit cards 822 00:36:43,120 --> 00:36:44,960 Speaker 1: that are gonna work best for the way you spend. 823 00:36:45,120 --> 00:36:46,680 Speaker 1: That's how we like to approach it. And the best 824 00:36:46,680 --> 00:36:49,360 Speaker 1: thing Matt about credit card awards they don't get taxed. 825 00:36:49,840 --> 00:36:51,680 Speaker 1: I love that, that's true. Man. I still can't believe 826 00:36:51,719 --> 00:36:53,719 Speaker 1: you guess the number of freaking cards that I have 827 00:36:53,880 --> 00:36:56,560 Speaker 1: to mind meld, buddy, Yeah, for best friends. For a reason, 828 00:36:56,719 --> 00:36:59,719 Speaker 1: you're like going through my crap. I want maybe like 829 00:37:00,200 --> 00:37:02,920 Speaker 1: behind your back. All right, let's take it back to 830 00:37:02,960 --> 00:37:05,160 Speaker 1: the beer this episode and I were drinking, uh and 831 00:37:05,200 --> 00:37:08,080 Speaker 1: I'm already pulled over, which is I think it's just 832 00:37:08,120 --> 00:37:09,759 Speaker 1: so ridiculous that this is the beer that you happen 833 00:37:09,800 --> 00:37:12,440 Speaker 1: to pick up at Ellipsis. And then we told the 834 00:37:12,440 --> 00:37:15,200 Speaker 1: thing about the tall booth. All right, I have to 835 00:37:15,239 --> 00:37:18,200 Speaker 1: pay that after it we're done creating this episode. Well, first, 836 00:37:18,239 --> 00:37:20,040 Speaker 1: what do you think about this beer, dude? This beer 837 00:37:20,120 --> 00:37:21,960 Speaker 1: is I mean, I'm in heaven right now. This beer 838 00:37:22,000 --> 00:37:25,479 Speaker 1: is so good. It's raspberry, it's sour, and it's so 839 00:37:25,920 --> 00:37:28,839 Speaker 1: raspberry heavy. It tastes like raspberry jam. I would put 840 00:37:28,840 --> 00:37:30,879 Speaker 1: this stuff on my toast in the morning and eat 841 00:37:30,920 --> 00:37:33,320 Speaker 1: it before I go to work every single day because 842 00:37:33,719 --> 00:37:36,880 Speaker 1: it's just it's power packed with just a massive amount 843 00:37:36,880 --> 00:37:40,200 Speaker 1: of raspberry. So I think I like lightly fruited beers too, 844 00:37:40,360 --> 00:37:42,560 Speaker 1: but this one feels like it's got raspberry pure ray, 845 00:37:42,719 --> 00:37:45,479 Speaker 1: like just massive amounts of juice shoved into the beer. 846 00:37:45,800 --> 00:37:49,879 Speaker 1: So I'm happy. I don't know if you can tell 847 00:37:49,960 --> 00:37:52,440 Speaker 1: how thrilled I am to be drinking this, but I'm 848 00:37:52,520 --> 00:37:54,400 Speaker 1: very happy it was. It was excellent. Yeah, this is 849 00:37:54,440 --> 00:37:56,280 Speaker 1: a good one. It had a nice kind of ruby 850 00:37:56,400 --> 00:37:58,520 Speaker 1: I mean raspberry color right like it's it's nice and 851 00:37:58,560 --> 00:38:00,759 Speaker 1: kind of ruby red to be. I feel like this 852 00:38:00,880 --> 00:38:04,320 Speaker 1: reminded me so much of Captain Crunch crunch berries, specifically 853 00:38:04,320 --> 00:38:06,400 Speaker 1: because it had that berry flavor going on, but it 854 00:38:06,440 --> 00:38:08,839 Speaker 1: also had a nice weedy finish that sometimes you get 855 00:38:08,840 --> 00:38:11,080 Speaker 1: from Berlin of ice, you know, like you I'm talking about. 856 00:38:11,200 --> 00:38:12,960 Speaker 1: I wasn't allowed to have Captain Crunch by the way 857 00:38:13,000 --> 00:38:14,360 Speaker 1: I've grown up right now. Really that was one of 858 00:38:14,360 --> 00:38:16,839 Speaker 1: it was one of our treat cereals for a couple 859 00:38:16,840 --> 00:38:18,400 Speaker 1: of years now. Mean, it was off brands here all 860 00:38:18,400 --> 00:38:20,719 Speaker 1: the way for for us. For actually, if I think 861 00:38:20,719 --> 00:38:22,520 Speaker 1: about it, I don't even want to consider the amount 862 00:38:22,520 --> 00:38:25,759 Speaker 1: of like sugar that was in those cereals, right, we 863 00:38:25,800 --> 00:38:27,600 Speaker 1: consumed a lot of it. But yeah, I really enjoyed 864 00:38:27,600 --> 00:38:29,640 Speaker 1: this beer. Man. I'm glad you swung by Ellipsus and 865 00:38:29,680 --> 00:38:30,880 Speaker 1: you mentioned that you and I had been there. We 866 00:38:30,880 --> 00:38:33,200 Speaker 1: swung by there a few years ago for finn Con 867 00:38:33,600 --> 00:38:35,400 Speaker 1: back when it was in Orlando. So that was a 868 00:38:35,400 --> 00:38:37,000 Speaker 1: fun little brewery that you know, I got to visit 869 00:38:37,000 --> 00:38:38,520 Speaker 1: while we're down there. We went there with a few 870 00:38:38,520 --> 00:38:41,359 Speaker 1: of our friends. Are nerdy financial buddies, Yeah, exactly, and 871 00:38:41,440 --> 00:38:43,239 Speaker 1: it was fun to share this one with you, buddy. Yeah. Man, 872 00:38:43,239 --> 00:38:45,200 Speaker 1: All right, Well that's gonna do it for this episode. 873 00:38:45,360 --> 00:38:47,600 Speaker 1: For folks that want show notes for this episode, or 874 00:38:47,680 --> 00:38:49,400 Speaker 1: to check out some of the articles that that we 875 00:38:49,480 --> 00:38:52,360 Speaker 1: referenced during this episode, just go to how to Money 876 00:38:52,400 --> 00:38:55,120 Speaker 1: dot Com and you can find those waiting for you there. Yeah, 877 00:38:55,160 --> 00:38:57,440 Speaker 1: and Joe, we always enjoy taking listener questions, So if 878 00:38:57,480 --> 00:39:00,160 Speaker 1: you would like to submit a question that you like 879 00:39:00,239 --> 00:39:02,719 Speaker 1: to hear us answer on the show, go to how 880 00:39:02,719 --> 00:39:05,719 Speaker 1: to Money dot Com forward slash ask. All right, man, 881 00:39:05,719 --> 00:39:08,960 Speaker 1: Well that's gonna be. It's until next time. Best friends out, 882 00:39:09,040 --> 00:39:25,319 Speaker 1: best friends out, we out of here.