1 00:00:00,040 --> 00:00:03,040 Speaker 1: Welcome to How the Money. I'm Joel and I am Matt, 2 00:00:03,240 --> 00:00:26,000 Speaker 1: and today we are answering your listener questions. Yes, Joel, 3 00:00:26,160 --> 00:00:28,760 Speaker 1: listener questions. Man, this is a new favorite episode that 4 00:00:28,800 --> 00:00:31,600 Speaker 1: we do. We've got some fun ones coming up this episode. 5 00:00:31,760 --> 00:00:34,879 Speaker 1: We're answering a question about fund rise, some online real 6 00:00:34,960 --> 00:00:38,320 Speaker 1: estate investing. We have one about home warranties as well 7 00:00:38,440 --> 00:00:41,600 Speaker 1: as paying off debts that are in collections, plus a 8 00:00:41,640 --> 00:00:44,760 Speaker 1: couple of other fun ones that I'm excited to get to. Yeah, 9 00:00:44,800 --> 00:00:46,800 Speaker 1: this is gonna be fun. We've got some great questions 10 00:00:46,800 --> 00:00:48,199 Speaker 1: lined up and I think a lot of these that 11 00:00:48,240 --> 00:00:50,640 Speaker 1: are on probably a lot of our listeners minds, so 12 00:00:50,640 --> 00:00:52,959 Speaker 1: it should be cool. Matt. First, I wanted to take 13 00:00:52,960 --> 00:00:57,680 Speaker 1: a second and just celebrate. Dude, this is episode one hundred. Yeah, man, 14 00:00:57,800 --> 00:01:01,240 Speaker 1: cue the balloons in the Confettian stuff like that confetti 15 00:01:01,320 --> 00:01:05,040 Speaker 1: Canon's awesome. I am kind of blown away that we've 16 00:01:05,360 --> 00:01:07,479 Speaker 1: I mean, we set out to do this right, and 17 00:01:07,680 --> 00:01:09,479 Speaker 1: our goal was to always be like, let's make sure 18 00:01:09,480 --> 00:01:12,000 Speaker 1: we're doing this well enough. But at the very beginning, 19 00:01:12,000 --> 00:01:14,800 Speaker 1: I don't think either of us had huge aspirations for it. 20 00:01:14,880 --> 00:01:16,440 Speaker 1: We knew that this is something that would be fun 21 00:01:16,480 --> 00:01:19,039 Speaker 1: that we both enjoy doing. But to see that it's 22 00:01:19,040 --> 00:01:21,000 Speaker 1: gotten this far, Man, we're up to triple digits. You 23 00:01:21,000 --> 00:01:23,160 Speaker 1: can't beat that. Well, I mean, I guess you can. 24 00:01:23,240 --> 00:01:25,400 Speaker 1: If you go like quadruple digits, that's gonna be a 25 00:01:25,440 --> 00:01:28,039 Speaker 1: while that, Yeah, that'll be get our sight set that 26 00:01:28,120 --> 00:01:30,319 Speaker 1: far ahead. Maybe one of these days. But yeah, it's 27 00:01:30,360 --> 00:01:32,280 Speaker 1: really exciting to to think that we've produced and we 28 00:01:32,400 --> 00:01:35,160 Speaker 1: put out a hundred episodes. For me, it's been really fun. 29 00:01:35,200 --> 00:01:37,600 Speaker 1: It's been really fun to get to to create this 30 00:01:37,640 --> 00:01:39,640 Speaker 1: with my best buddy. At the same time, it's been 31 00:01:39,680 --> 00:01:42,480 Speaker 1: really fun to to get to know some of the listeners, 32 00:01:42,680 --> 00:01:45,520 Speaker 1: to read the emails. The Facebook group has been just 33 00:01:45,680 --> 00:01:50,200 Speaker 1: really exciting to see people asking questions, answering each other's questions. 34 00:01:50,400 --> 00:01:53,240 Speaker 1: It's been this really cool kind of community vibe. And 35 00:01:53,280 --> 00:01:55,120 Speaker 1: you know what, a hundred episodes deep, I feel like 36 00:01:55,160 --> 00:01:59,000 Speaker 1: we're still kind of tapping the surface figuring stuff out. Yeah, 37 00:01:59,280 --> 00:02:01,320 Speaker 1: like what this can be and what we can create 38 00:02:01,360 --> 00:02:03,960 Speaker 1: here with a group of like minded listeners that really 39 00:02:03,960 --> 00:02:06,560 Speaker 1: care about these topics. So I'm just really excited for 40 00:02:06,600 --> 00:02:08,400 Speaker 1: the next hundred to see kind of where that leads. 41 00:02:08,560 --> 00:02:10,200 Speaker 1: But I also just wanted to take a moment and 42 00:02:10,280 --> 00:02:12,639 Speaker 1: celebrate and be like boom, we're there. We've done a hundred. 43 00:02:12,919 --> 00:02:14,840 Speaker 1: It's good. It's good to reflect on that right And 44 00:02:14,840 --> 00:02:17,000 Speaker 1: more than anything too, we can't think our listeners enough. 45 00:02:17,040 --> 00:02:19,320 Speaker 1: I mean, without you guys, we would not be where 46 00:02:19,360 --> 00:02:22,400 Speaker 1: we are now. We wouldn't have obviously any listener questions, 47 00:02:22,400 --> 00:02:24,919 Speaker 1: but we wouldn't have that extra fuel. Man, when we 48 00:02:24,960 --> 00:02:27,280 Speaker 1: get these emails in and folks are talking about how 49 00:02:27,320 --> 00:02:29,480 Speaker 1: they've changed their lives for the better, it is just 50 00:02:29,560 --> 00:02:32,200 Speaker 1: so inspiring. That spurs us on when we're kind of 51 00:02:32,200 --> 00:02:34,760 Speaker 1: feeling like, you know, are we really gonna do another 52 00:02:34,800 --> 00:02:37,400 Speaker 1: recording or we're gonna really record this week. I'll be honest, 53 00:02:37,400 --> 00:02:39,960 Speaker 1: there's times there's some weeks where we're feeling greats, but 54 00:02:40,000 --> 00:02:42,920 Speaker 1: then there's other weeks to where we are doing it 55 00:02:43,000 --> 00:02:45,120 Speaker 1: because we've got this thing rolling and we don't want 56 00:02:45,120 --> 00:02:47,399 Speaker 1: to let our listeners down. And so I think our 57 00:02:47,440 --> 00:02:50,520 Speaker 1: listeners are such a crucial and integral part to this 58 00:02:50,520 --> 00:02:52,560 Speaker 1: show specifically. It's not like we're just kind of recording 59 00:02:52,560 --> 00:02:55,160 Speaker 1: ourselves cracking jokes, even though maybe at the beginning we 60 00:02:55,200 --> 00:02:57,240 Speaker 1: kind of started out that way where it's just you 61 00:02:56,680 --> 00:03:00,560 Speaker 1: and I kind of bantering on about random stuff. Quickly, 62 00:03:00,639 --> 00:03:03,760 Speaker 1: our attention has focused to our listeners and the changes 63 00:03:03,800 --> 00:03:06,280 Speaker 1: that they're making in their financial lives. Well, they've helped 64 00:03:06,360 --> 00:03:09,320 Speaker 1: us home the show too. They've helped make this show 65 00:03:09,440 --> 00:03:13,119 Speaker 1: better because I think we have changed direction. We've kind 66 00:03:13,120 --> 00:03:15,959 Speaker 1: of changed what the show looks like a little bit. 67 00:03:16,120 --> 00:03:18,600 Speaker 1: It still remains in essence the show that we started 68 00:03:18,600 --> 00:03:21,519 Speaker 1: out creating, but when it comes down to the specifics 69 00:03:21,760 --> 00:03:25,120 Speaker 1: of how the show actually functions and how it sounds, 70 00:03:25,400 --> 00:03:27,880 Speaker 1: I think that's changed a good bit and that's because 71 00:03:27,960 --> 00:03:31,399 Speaker 1: of listener feedback, and so we've taken it seriously. It's meaningful, 72 00:03:31,440 --> 00:03:33,359 Speaker 1: and we talked about that at the end of every episode, 73 00:03:33,360 --> 00:03:35,400 Speaker 1: like drop us a lot, and we actually read it. 74 00:03:35,440 --> 00:03:38,600 Speaker 1: We care, and it's true. Like we've changed the formatting 75 00:03:38,640 --> 00:03:41,080 Speaker 1: of the show and the way we do it because 76 00:03:41,200 --> 00:03:43,640 Speaker 1: we want it to be more accessible. We wanted to 77 00:03:43,720 --> 00:03:47,480 Speaker 1: be something that is meaningful, not just for us to create, 78 00:03:47,520 --> 00:03:50,080 Speaker 1: but for listeners out there to to listen to. Yeah, 79 00:03:50,080 --> 00:03:52,280 Speaker 1: we wanted to be impactful. And so this is episode 80 00:03:52,280 --> 00:03:54,920 Speaker 1: one and I actually just thought of how so on 81 00:03:54,920 --> 00:03:58,200 Speaker 1: our vangil we just rolled over You want to guess 82 00:03:59,240 --> 00:04:03,280 Speaker 1: a hundred thou Yeah, exactly. Nice. Nice. We we rolled 83 00:04:03,320 --> 00:04:06,160 Speaker 1: over a hundred thousand miles the other day, and sort 84 00:04:06,200 --> 00:04:08,680 Speaker 1: of like this show, when you have a car that's 85 00:04:08,880 --> 00:04:11,000 Speaker 1: hitting a hundred thousand miles, you and I know that 86 00:04:11,040 --> 00:04:13,960 Speaker 1: you're just getting started. Yeah, I think he's got a 87 00:04:14,000 --> 00:04:15,800 Speaker 1: long way to write. Exactly, You've got a lot of 88 00:04:15,840 --> 00:04:18,280 Speaker 1: runway left, and so that's not the time to pull 89 00:04:18,320 --> 00:04:20,400 Speaker 1: the plug or to start looking for a new car. 90 00:04:20,800 --> 00:04:23,880 Speaker 1: That's usually when I'm buying a car. Exactly. I was 91 00:04:23,920 --> 00:04:25,840 Speaker 1: actually super pumped because that's not something you get to 92 00:04:25,880 --> 00:04:28,120 Speaker 1: do every day, you know. See it go from five 93 00:04:28,120 --> 00:04:30,600 Speaker 1: digits to six digits again. I don't know. I'm not 94 00:04:30,640 --> 00:04:32,599 Speaker 1: trying to make some crazy metaphor here, but in the 95 00:04:32,600 --> 00:04:34,080 Speaker 1: same way, I think we're kind of just getting started 96 00:04:34,120 --> 00:04:35,880 Speaker 1: with this show. Man. It's been a blast so far. 97 00:04:36,240 --> 00:04:39,080 Speaker 1: And yeah, I'm looking forward to what else? How some 98 00:04:39,160 --> 00:04:42,080 Speaker 1: money has in store? Yeah, man, totally. And you know 99 00:04:42,120 --> 00:04:44,000 Speaker 1: what else, We've got a beer in store that we're 100 00:04:44,000 --> 00:04:47,160 Speaker 1: about to partake in on this episode. Uh, And this 101 00:04:47,360 --> 00:04:49,280 Speaker 1: one was so very thankful for the beers that our 102 00:04:49,279 --> 00:04:51,920 Speaker 1: listeners send into because yeah, actually a ton of fun, 103 00:04:52,000 --> 00:04:55,119 Speaker 1: amazing perk of having the best listeners, super fantastic beers, 104 00:04:55,120 --> 00:04:57,359 Speaker 1: and Russ sent us this beer. We had another beer 105 00:04:57,480 --> 00:04:59,320 Speaker 1: on the show last week that he sent us. This 106 00:04:59,360 --> 00:05:02,279 Speaker 1: one's called nin Diverse Unicorn. It's a double I p 107 00:05:02,440 --> 00:05:05,919 Speaker 1: A also from Pipe Works Brewing Company in Chicago. Follow 108 00:05:06,000 --> 00:05:07,440 Speaker 1: us on Instagram, by the way, if you want to 109 00:05:07,440 --> 00:05:09,520 Speaker 1: see the can art for the beers that we're drinking 110 00:05:09,560 --> 00:05:12,360 Speaker 1: every week. And this one is pretty ridiculous. This one's insane. 111 00:05:12,440 --> 00:05:15,200 Speaker 1: It's literally a Ninja in the unicorn fighting. The colors 112 00:05:15,240 --> 00:05:18,320 Speaker 1: the graphic are pretty intense. And let's see if the 113 00:05:18,400 --> 00:05:21,320 Speaker 1: beer is just as intense. Matthew. I'll let you know 114 00:05:21,400 --> 00:05:23,479 Speaker 1: at the end of this episode, man, But first we 115 00:05:23,560 --> 00:05:25,440 Speaker 1: want to let listeners know that they can simmit their 116 00:05:25,480 --> 00:05:28,200 Speaker 1: own questions at how do money dot Com forward slash 117 00:05:28,400 --> 00:05:30,760 Speaker 1: ask So Joel, want you go ahead and play our 118 00:05:30,800 --> 00:05:34,240 Speaker 1: first question for this episode. Hey guys, my name is 119 00:05:34,279 --> 00:05:38,120 Speaker 1: Tela from Washington State. I absolutely love your show. Thank 120 00:05:38,160 --> 00:05:40,760 Speaker 1: you for the information you've been putting out there. I 121 00:05:40,880 --> 00:05:44,080 Speaker 1: just finished your roth ira A podcast and it left 122 00:05:44,080 --> 00:05:46,800 Speaker 1: me with a two part question. In the next couple 123 00:05:46,800 --> 00:05:49,320 Speaker 1: of months, I plan on opening a roth ira A 124 00:05:49,600 --> 00:05:53,680 Speaker 1: and farther along investing in index funds. In your podcast, 125 00:05:53,800 --> 00:05:56,560 Speaker 1: you mentioned that you can put your index funds into 126 00:05:56,680 --> 00:05:59,560 Speaker 1: your roth Ira. So the first part of my question 127 00:05:59,800 --> 00:06:02,400 Speaker 1: is what does that mean exactly and how can you 128 00:06:02,600 --> 00:06:05,440 Speaker 1: go about doing that? The second part of my question 129 00:06:05,720 --> 00:06:08,640 Speaker 1: is are there any downsides of not putting an index 130 00:06:08,680 --> 00:06:11,400 Speaker 1: fund in your wrath? Ira? A thanks so much and 131 00:06:11,440 --> 00:06:13,880 Speaker 1: I already can't wait for your next show to you 132 00:06:13,920 --> 00:06:15,640 Speaker 1: that that is such a great question. You know, I 133 00:06:15,640 --> 00:06:19,320 Speaker 1: think at times these topics get a little nerdy, get 134 00:06:19,320 --> 00:06:21,640 Speaker 1: a little technical, and so I think it is helpful 135 00:06:21,680 --> 00:06:23,159 Speaker 1: for us to be able to take a step back 136 00:06:23,440 --> 00:06:25,600 Speaker 1: and kind of explain things in a way that's easy 137 00:06:25,640 --> 00:06:28,760 Speaker 1: to comprehend. And so putting index funds in a roth Ira, well, 138 00:06:28,760 --> 00:06:31,520 Speaker 1: that's something Matt. We're huge fans of investing in index 139 00:06:31,560 --> 00:06:34,280 Speaker 1: funds inside of your wrath. But I realized even just 140 00:06:34,320 --> 00:06:36,960 Speaker 1: saying that, even just those words, to some people, it 141 00:06:37,040 --> 00:06:40,920 Speaker 1: fall short of being an understandable explanation. Yeah, Jul, exactly, 142 00:06:40,960 --> 00:06:43,200 Speaker 1: like those are still not regular everyday words. And so 143 00:06:43,600 --> 00:06:47,200 Speaker 1: let's start first with an analogy. A good way I 144 00:06:47,200 --> 00:06:49,919 Speaker 1: think to look at your wrath, IRA is do you 145 00:06:49,920 --> 00:06:52,320 Speaker 1: think of it like an aquarium? Right? So your roth 146 00:06:52,400 --> 00:06:55,280 Speaker 1: ira like that account. It's an aquarium, not a terrarium. 147 00:06:55,279 --> 00:06:59,680 Speaker 1: Not a terrarium, aqua aquarium, okay, all right, it's stilled 148 00:06:59,720 --> 00:07:01,800 Speaker 1: to the wall water. And what you could do, though, 149 00:07:01,880 --> 00:07:03,880 Speaker 1: you can take your money right and you could drop 150 00:07:03,880 --> 00:07:06,240 Speaker 1: it straight into that aquarium and it would sink to 151 00:07:06,279 --> 00:07:08,839 Speaker 1: the bottom, and that would be kind of silly. Or 152 00:07:09,000 --> 00:07:10,560 Speaker 1: you can take that money and you can buy fish 153 00:07:10,560 --> 00:07:13,160 Speaker 1: with it, and those fish will grow and they'll swim 154 00:07:13,160 --> 00:07:15,520 Speaker 1: around within the aquarium, and you know what, that's what 155 00:07:15,680 --> 00:07:18,480 Speaker 1: the aquarium is made to hold. Just make sure you 156 00:07:18,520 --> 00:07:20,840 Speaker 1: get the fish that can live in harmony together and 157 00:07:20,840 --> 00:07:23,640 Speaker 1: not the ones that eata don't get paid a fish. 158 00:07:23,680 --> 00:07:26,040 Speaker 1: But what I'm saying, though, is that the aquarium it's 159 00:07:26,040 --> 00:07:27,640 Speaker 1: meant to hold fish, and like that's what it was 160 00:07:27,680 --> 00:07:30,000 Speaker 1: designed for. And on the flip side of that, like 161 00:07:30,040 --> 00:07:32,680 Speaker 1: the fish are gonna be happy in that aquarium, right, 162 00:07:32,680 --> 00:07:34,840 Speaker 1: Like it's not like you're trying to grow and have 163 00:07:34,880 --> 00:07:38,880 Speaker 1: your fish survived, say in a sink. They're not gonna 164 00:07:38,880 --> 00:07:40,680 Speaker 1: be happy in a in a sink right where there's 165 00:07:40,720 --> 00:07:43,280 Speaker 1: no fake plants or the the scuba man that kind 166 00:07:43,280 --> 00:07:45,240 Speaker 1: of floats around in there. And so I think that's 167 00:07:45,280 --> 00:07:48,920 Speaker 1: maybe the extent of like that that analogy, but essentially though, 168 00:07:48,960 --> 00:07:51,480 Speaker 1: like that's what a roth Ira is meant to do. 169 00:07:51,600 --> 00:07:54,040 Speaker 1: So you can put cash directly into your roth Ira 170 00:07:54,040 --> 00:07:56,520 Speaker 1: account and leave it there and not invest it, but 171 00:07:56,640 --> 00:07:58,160 Speaker 1: that's not what you want to do with that money. 172 00:07:58,280 --> 00:08:00,960 Speaker 1: That money is gonna be better spent but into index funds. 173 00:08:01,160 --> 00:08:03,000 Speaker 1: And since we're taking a step back, let's talk about 174 00:08:03,040 --> 00:08:05,720 Speaker 1: index funds. Let's talk about what index funds are and 175 00:08:05,880 --> 00:08:09,800 Speaker 1: their Matt and eyes preferred way to invest because ultimately, 176 00:08:09,840 --> 00:08:12,800 Speaker 1: they're the simplest, they're the easiest to understand, and they 177 00:08:12,840 --> 00:08:15,440 Speaker 1: achieve all the things that we really want to achieve 178 00:08:15,480 --> 00:08:17,480 Speaker 1: when it comes to investing. They make sure that your 179 00:08:17,520 --> 00:08:20,360 Speaker 1: money is well diversified and that your money is invested 180 00:08:20,520 --> 00:08:23,480 Speaker 1: at an incredibly low cost. Index funds are just the 181 00:08:23,520 --> 00:08:26,560 Speaker 1: best at achieving both of those things. And so Matt, 182 00:08:26,600 --> 00:08:29,320 Speaker 1: to continue with your aquarium example, which was lovely by 183 00:08:29,320 --> 00:08:31,640 Speaker 1: the like, yeah next nextly done. Never heard it quite 184 00:08:31,640 --> 00:08:35,839 Speaker 1: put like that. So uh so, basically you're putting these 185 00:08:35,840 --> 00:08:38,000 Speaker 1: fish in the aquarium, right And when you open up 186 00:08:38,000 --> 00:08:41,240 Speaker 1: a roth Ira tila, there are just a bunch of 187 00:08:41,240 --> 00:08:43,800 Speaker 1: different funds that you can choose from. Just like there 188 00:08:43,800 --> 00:08:45,320 Speaker 1: are a bunch of different fish at the pet store 189 00:08:45,360 --> 00:08:47,840 Speaker 1: that you can put in your aquarium, but our favorites 190 00:08:48,000 --> 00:08:50,959 Speaker 1: are index funds. That's our favorite fish. That's our favorite fish. 191 00:08:51,120 --> 00:08:53,199 Speaker 1: That's what we put in the aquarium. And the reason 192 00:08:53,240 --> 00:08:55,400 Speaker 1: that index funds are such a favorite for us is 193 00:08:55,440 --> 00:08:57,920 Speaker 1: that they achieve the main two goals that we think 194 00:08:57,960 --> 00:08:59,800 Speaker 1: are important when it comes to investing, and that is 195 00:09:00,120 --> 00:09:04,800 Speaker 1: wide diversification and low fees. It's also just really really simple. Yeah, 196 00:09:04,880 --> 00:09:06,520 Speaker 1: J Well, you know, I think that's the biggest sort 197 00:09:06,559 --> 00:09:08,680 Speaker 1: of hang up that folks have with roth Ira accounts 198 00:09:08,720 --> 00:09:11,000 Speaker 1: is that they seem like they're may be more complicated 199 00:09:11,000 --> 00:09:13,400 Speaker 1: than they really are. All brokerages are different, but a 200 00:09:13,480 --> 00:09:15,800 Speaker 1: lot of times your roth Ira account, like once you 201 00:09:15,840 --> 00:09:18,400 Speaker 1: open that, it doesn't look that different than an online 202 00:09:18,400 --> 00:09:23,120 Speaker 1: savings account, except that within that account you can purchase things. 203 00:09:23,320 --> 00:09:25,480 Speaker 1: So literally there's a buy button or a purchase button. 204 00:09:25,520 --> 00:09:27,400 Speaker 1: It's like this one extra step exactly you have to 205 00:09:27,400 --> 00:09:29,040 Speaker 1: take that you don't have to take when you're opening 206 00:09:29,120 --> 00:09:31,600 Speaker 1: up the same musiccount exactly because again, you can have 207 00:09:31,679 --> 00:09:33,480 Speaker 1: it there as cash, but you don't want it sitting 208 00:09:33,520 --> 00:09:36,559 Speaker 1: there as cash because due to inflation, you're essentially losing 209 00:09:36,600 --> 00:09:39,160 Speaker 1: money if you don't invest that money. And so these 210 00:09:39,160 --> 00:09:41,640 Speaker 1: are the literal steps. You open an account, you fund 211 00:09:41,720 --> 00:09:43,960 Speaker 1: that account, and you transfer over that money, and then 212 00:09:44,040 --> 00:09:46,400 Speaker 1: you actually click that buy, you click that purchase button, 213 00:09:46,640 --> 00:09:49,560 Speaker 1: and you purchase those low cost index funds. You can 214 00:09:49,600 --> 00:09:52,600 Speaker 1: start searching. One of our favorites is vt s a X, 215 00:09:52,600 --> 00:09:55,960 Speaker 1: which is Vanguard's total stock market index fund and and 216 00:09:55,960 --> 00:09:58,400 Speaker 1: that's it. It's really not any more complicated than that. 217 00:09:58,640 --> 00:10:00,960 Speaker 1: But again, depending on what brokerage go with, you know, 218 00:10:01,000 --> 00:10:04,680 Speaker 1: we recommend and one is our new favorite, but Vanguard Fidelity. 219 00:10:04,720 --> 00:10:06,600 Speaker 1: Both of those are going to have accounts that are 220 00:10:06,640 --> 00:10:09,600 Speaker 1: basically free and very easy to use. But I think 221 00:10:09,679 --> 00:10:11,520 Speaker 1: that you'll find once you kind of take those steps 222 00:10:11,520 --> 00:10:13,360 Speaker 1: and dive into it, it's really less complicated than it 223 00:10:13,440 --> 00:10:16,240 Speaker 1: might sound. And Tila, yeah, you also asked about the downsides, 224 00:10:16,320 --> 00:10:19,560 Speaker 1: the potential downsides. Well, the downsides I guess are that 225 00:10:19,600 --> 00:10:23,360 Speaker 1: you could choose other funds, likely more expensive funds, not 226 00:10:23,480 --> 00:10:26,720 Speaker 1: index funds, right, you could choose mutual funds that invest 227 00:10:26,840 --> 00:10:29,800 Speaker 1: in different sectors of the stock market. You can invest 228 00:10:29,800 --> 00:10:33,120 Speaker 1: in really high cost mutual funds or not. Well, diversified 229 00:10:33,200 --> 00:10:36,400 Speaker 1: mutual funds, those are potential pitfalls when you're choosing funds 230 00:10:36,440 --> 00:10:38,760 Speaker 1: to invest in inside of your wrath. You might even 231 00:10:38,840 --> 00:10:42,000 Speaker 1: choose to invest in individual stocks instead. Well, those are 232 00:10:42,040 --> 00:10:45,160 Speaker 1: big time downsides if you're choosing to invest in those 233 00:10:45,160 --> 00:10:47,679 Speaker 1: ways as opposed to investing in index funds inside of 234 00:10:47,720 --> 00:10:50,200 Speaker 1: your roth. Ira A And I think it's important to 235 00:10:50,280 --> 00:10:53,119 Speaker 1: say that there are a lot of really smart investors 236 00:10:53,320 --> 00:10:56,160 Speaker 1: that create investment portfolios that are a little more complex, 237 00:10:56,360 --> 00:10:59,480 Speaker 1: but for the majority of people, the majority of investors, 238 00:10:59,559 --> 00:11:02,760 Speaker 1: especially for someone just getting started and asking questions like this, Tila, 239 00:11:03,000 --> 00:11:05,520 Speaker 1: I think index funds are just the slam dunk best 240 00:11:05,520 --> 00:11:08,600 Speaker 1: decision because it makes your decision really simple and it's 241 00:11:08,760 --> 00:11:10,600 Speaker 1: the easy button to getting to where you want to go. 242 00:11:10,840 --> 00:11:13,600 Speaker 1: And Tila, maybe another's option that you're asking your question 243 00:11:13,760 --> 00:11:16,000 Speaker 1: is that you have the potential to invest in index 244 00:11:16,000 --> 00:11:18,720 Speaker 1: funds outside of a wrath in a regular brokerage account. 245 00:11:19,160 --> 00:11:21,120 Speaker 1: Certainly you could do that, but if you do have 246 00:11:21,200 --> 00:11:23,199 Speaker 1: a wrath as an option to invest in, I mean, 247 00:11:23,240 --> 00:11:25,640 Speaker 1: that's gonna be a much wiser decision for you when 248 00:11:25,679 --> 00:11:28,560 Speaker 1: it comes to the tax implications. And so you know, 249 00:11:29,000 --> 00:11:30,640 Speaker 1: I don't want to extend this too far, but harkening 250 00:11:30,720 --> 00:11:33,920 Speaker 1: back to the aquarium metaphor, in my mind, the rath 251 00:11:33,960 --> 00:11:36,080 Speaker 1: ira is the aquarium. It's like the perfect place to 252 00:11:36,160 --> 00:11:38,160 Speaker 1: have some great fish. If you're trying to have a 253 00:11:38,200 --> 00:11:41,240 Speaker 1: bunch of fish, say in your kitchen sink, that's less ideal. 254 00:11:41,480 --> 00:11:43,679 Speaker 1: That just doesn't nearly make quite as much sense. If 255 00:11:43,679 --> 00:11:46,240 Speaker 1: you already have an aquarium that's available to you. Yeah, 256 00:11:46,280 --> 00:11:50,079 Speaker 1: if you meet the income qualifications for investing in a wrath, 257 00:11:50,440 --> 00:11:53,600 Speaker 1: open a wrath, don't open a taxaball brokerage account, right, 258 00:11:53,880 --> 00:11:55,960 Speaker 1: all right, so Tila, good luck to you opening this 259 00:11:56,000 --> 00:11:58,920 Speaker 1: wrath and starting to invest in index funds. I promise 260 00:11:58,960 --> 00:12:01,400 Speaker 1: you when you look back thirty years from now, you'll 261 00:12:01,440 --> 00:12:03,200 Speaker 1: be really glad that you did. And by the way, 262 00:12:03,280 --> 00:12:06,040 Speaker 1: Matt wrote a really sweet article about in One finance 263 00:12:06,440 --> 00:12:08,720 Speaker 1: and kind of why it's become one of our favorite 264 00:12:08,760 --> 00:12:11,160 Speaker 1: investing platforms. That's on our site at how to money 265 00:12:11,160 --> 00:12:12,560 Speaker 1: dot com, and we'll link to it in the show 266 00:12:12,600 --> 00:12:15,240 Speaker 1: notes as well. And after the break, we're going to 267 00:12:15,280 --> 00:12:18,120 Speaker 1: get to a couple of questions about investing in real 268 00:12:18,240 --> 00:12:29,880 Speaker 1: estate online and the value of home warranties. All right, 269 00:12:29,920 --> 00:12:31,760 Speaker 1: we're back to the break, let's get to our second 270 00:12:31,840 --> 00:12:36,520 Speaker 1: question for this episode. Hey guys, I'm Dijon from Cleveland, Ohio, 271 00:12:36,679 --> 00:12:39,160 Speaker 1: and first things first, I love the show, keep up 272 00:12:39,200 --> 00:12:42,480 Speaker 1: the good work. My question is about reets are our 273 00:12:42,559 --> 00:12:45,400 Speaker 1: e I T s. I've been looking into doing this 274 00:12:45,600 --> 00:12:49,480 Speaker 1: and more specifically fund rise dot com. I just want 275 00:12:49,520 --> 00:12:52,679 Speaker 1: to get your what you think about fund Rise dot 276 00:12:52,760 --> 00:12:55,200 Speaker 1: com in our e I T s In general. I'm 277 00:12:55,240 --> 00:12:58,640 Speaker 1: I'm looking to get into the real estate of our owning, 278 00:12:58,760 --> 00:13:01,240 Speaker 1: you know, renting, being a land lord, and I feel 279 00:13:01,240 --> 00:13:03,440 Speaker 1: like this will be a good first step. Do you 280 00:13:03,440 --> 00:13:05,920 Speaker 1: guys think that that is a good first step or 281 00:13:06,000 --> 00:13:08,400 Speaker 1: should I just go the other route of you know, 282 00:13:08,520 --> 00:13:11,640 Speaker 1: saving for a down payment, buying my first property and 283 00:13:11,679 --> 00:13:14,560 Speaker 1: then becoming a landlord that way? Thank you very much, guys, 284 00:13:14,640 --> 00:13:17,040 Speaker 1: can't wait to hear it. All right, John, that's such 285 00:13:17,040 --> 00:13:19,520 Speaker 1: a great question. In Matt, we love talking about real estate, 286 00:13:19,559 --> 00:13:22,760 Speaker 1: so let's get into this one. First off, our primary 287 00:13:22,800 --> 00:13:25,440 Speaker 1: focus when it comes to investing in real estate is 288 00:13:25,480 --> 00:13:28,520 Speaker 1: buying physical property that you hold for the long term 289 00:13:28,559 --> 00:13:31,080 Speaker 1: that's close to where you are. But we realize that, 290 00:13:31,160 --> 00:13:32,880 Speaker 1: like you said to John, that there is a high 291 00:13:32,880 --> 00:13:35,560 Speaker 1: barrier to entry. There and it's not always possible for everyone. 292 00:13:35,600 --> 00:13:37,559 Speaker 1: So I think that's why a lot of people are 293 00:13:37,640 --> 00:13:40,600 Speaker 1: interested in online real estate investing, which is taken off 294 00:13:40,600 --> 00:13:42,320 Speaker 1: in the past few years. A lot of people in 295 00:13:42,320 --> 00:13:45,240 Speaker 1: our Facebook group Matt have been asking questions about fund 296 00:13:45,320 --> 00:13:47,760 Speaker 1: Raise in particular and some of these other online real 297 00:13:47,840 --> 00:13:49,959 Speaker 1: estate investing platforms. So I think it's about time we 298 00:13:50,040 --> 00:13:51,960 Speaker 1: talked about it. That's right, man, Let's dive in. So 299 00:13:52,000 --> 00:13:54,240 Speaker 1: let's talk about reats. And you know, he mentioned what 300 00:13:54,280 --> 00:13:57,080 Speaker 1: that stands for, but that's real estate investment trusts, and 301 00:13:57,080 --> 00:14:00,760 Speaker 1: broadly speaking, investing in reats allows you to buy small 302 00:14:00,800 --> 00:14:03,160 Speaker 1: shares of a company and they are the ones who 303 00:14:03,200 --> 00:14:07,319 Speaker 1: are actively purchasing and managing real estate. We have access 304 00:14:07,360 --> 00:14:10,520 Speaker 1: to publicly traded rets and we're able to buy and 305 00:14:10,600 --> 00:14:14,120 Speaker 1: sell those like regular stocks. I'm thinking of American Tower 306 00:14:14,200 --> 00:14:16,120 Speaker 1: is an example of that. A m T is there 307 00:14:16,160 --> 00:14:19,320 Speaker 1: ticker symbol, but we wouldn't really recommend that because that 308 00:14:19,480 --> 00:14:21,920 Speaker 1: is an individual company. You know, we just talked about 309 00:14:21,960 --> 00:14:24,800 Speaker 1: index funds in our last question. Even better would be 310 00:14:24,840 --> 00:14:27,760 Speaker 1: to check out Vanguard's real estate fund. Uh It's ticker 311 00:14:27,800 --> 00:14:31,240 Speaker 1: symbol is v n Q. It is much better because 312 00:14:31,280 --> 00:14:35,200 Speaker 1: it is more incredibly diversified. You could right have AMT 313 00:14:35,640 --> 00:14:38,200 Speaker 1: in your portfolio. But if you get a fund like 314 00:14:38,320 --> 00:14:40,840 Speaker 1: V and Q, well guess what's included n V and 315 00:14:40,920 --> 00:14:44,320 Speaker 1: Q American Tower Mt. And so that's a company that 316 00:14:44,400 --> 00:14:47,920 Speaker 1: specifically invests, again in real estate. So that is a 317 00:14:48,040 --> 00:14:51,200 Speaker 1: traditional rate that's publicly traded, which means that Matt, we 318 00:14:51,240 --> 00:14:53,160 Speaker 1: can buy and sell that at will, right like I 319 00:14:53,160 --> 00:14:56,040 Speaker 1: can own V and Q today, sell it tomorrow. That's right, 320 00:14:56,080 --> 00:14:57,960 Speaker 1: open market. You can buy it and unload it whenever 321 00:14:57,960 --> 00:15:00,880 Speaker 1: you want. So let's in contrast talk about Undise, which 322 00:15:00,920 --> 00:15:04,400 Speaker 1: is probably the most popular platform online for investing in 323 00:15:04,400 --> 00:15:07,000 Speaker 1: real estate. Yeah, it's like Kleenex versus tissues, right, it's 324 00:15:07,000 --> 00:15:09,600 Speaker 1: the name brand. Yeah, and honestly for good reason, because 325 00:15:09,640 --> 00:15:12,720 Speaker 1: they've done a really, really good job. They are probably 326 00:15:12,840 --> 00:15:16,160 Speaker 1: the best online platform for investing in real estate, at 327 00:15:16,200 --> 00:15:19,200 Speaker 1: least that I know of. With Fundraise, you're investing in 328 00:15:19,320 --> 00:15:23,240 Speaker 1: privately traded reads. Though as opposed to investing in a 329 00:15:23,280 --> 00:15:27,640 Speaker 1: read through Vanguard, investing through Fundraise means that you're investing 330 00:15:28,120 --> 00:15:31,600 Speaker 1: really in a non liquid way. You can't get in 331 00:15:31,800 --> 00:15:34,320 Speaker 1: and out of that investment like you can with a 332 00:15:34,360 --> 00:15:38,320 Speaker 1: traditional publicly traded real estate investment trust fund Yeah. And 333 00:15:38,320 --> 00:15:40,720 Speaker 1: the reason for that is when you are invested with fundraise, like, 334 00:15:40,760 --> 00:15:43,560 Speaker 1: your money is actually tied up in literal real estate, 335 00:15:43,920 --> 00:15:46,040 Speaker 1: like literal deals, it's in the deal they're making it happen. 336 00:15:46,080 --> 00:15:49,080 Speaker 1: They're they're doing the construction. Yeah, exactly, and so that's 337 00:15:49,080 --> 00:15:51,560 Speaker 1: why it's extremely difficult to pull your money out, and 338 00:15:51,600 --> 00:15:53,200 Speaker 1: sometimes they break it up quarterly. We're not going to 339 00:15:53,280 --> 00:15:57,120 Speaker 1: go into the details, but with publicly traded reads, it's 340 00:15:57,160 --> 00:15:59,760 Speaker 1: sort of like one layer higher. You're investing in a 341 00:16:00,000 --> 00:16:03,040 Speaker 1: company and they're the ones doing the investing. With Fundise, 342 00:16:03,280 --> 00:16:04,920 Speaker 1: your hands are a little more in the dirt, like 343 00:16:05,000 --> 00:16:07,440 Speaker 1: it is a little more active in the sense that 344 00:16:07,480 --> 00:16:10,960 Speaker 1: your money feels like it's more directly invested in real estates. 345 00:16:11,240 --> 00:16:13,240 Speaker 1: But like you said, you like with that comes the 346 00:16:13,240 --> 00:16:15,560 Speaker 1: downsides of your money being tied up. Yeah, so that 347 00:16:15,640 --> 00:16:17,680 Speaker 1: is one thing you need to take into consideration. Are 348 00:16:17,720 --> 00:16:21,200 Speaker 1: you okay with your capital being tied up for an 349 00:16:21,240 --> 00:16:24,400 Speaker 1: extended period of time. Another thing to take into consideration 350 00:16:24,600 --> 00:16:27,560 Speaker 1: is the fees, and Fundrise charges one of the lowest 351 00:16:27,560 --> 00:16:30,120 Speaker 1: fees out there for investing in real estate online. They 352 00:16:30,200 --> 00:16:32,920 Speaker 1: charge just a one percent fee to manage that money, 353 00:16:32,960 --> 00:16:36,640 Speaker 1: but there are sometimes other transaction costs involved in the 354 00:16:36,680 --> 00:16:39,160 Speaker 1: process that can be a little bit harder to see, 355 00:16:39,520 --> 00:16:42,080 Speaker 1: and so it's just important to note that the fees 356 00:16:42,160 --> 00:16:44,960 Speaker 1: are going to be higher when you invest in real 357 00:16:45,040 --> 00:16:48,440 Speaker 1: estate online through a site like fund rise, as opposed to, 358 00:16:48,480 --> 00:16:52,440 Speaker 1: like we mentioned, investing in a traditional publicly traded real 359 00:16:52,520 --> 00:16:55,600 Speaker 1: estate investment trust. Yeah, Joel personally like one percent kind 360 00:16:55,600 --> 00:16:58,880 Speaker 1: of sounds a lot. When Vanguard's real estate fund their 361 00:16:58,920 --> 00:17:03,120 Speaker 1: expense ratio is point one crazy small. Obviously, that's the 362 00:17:03,160 --> 00:17:06,040 Speaker 1: advantage of going with a company like Vanguard, something that 363 00:17:06,040 --> 00:17:09,480 Speaker 1: feels more like an index fund. However, the reason for 364 00:17:09,680 --> 00:17:13,240 Speaker 1: that is there is the potential for greater reward. Right 365 00:17:13,400 --> 00:17:15,879 Speaker 1: There's more risk involved when it comes to investing in 366 00:17:15,920 --> 00:17:18,240 Speaker 1: a company like fundise, but there's also the potential for 367 00:17:18,320 --> 00:17:22,240 Speaker 1: greater returns. Right now, fundis is touting double digit returns. 368 00:17:22,240 --> 00:17:25,120 Speaker 1: But what's important to mention here, though, is that those 369 00:17:25,119 --> 00:17:28,159 Speaker 1: returns have not been tested during a downturn in the 370 00:17:28,200 --> 00:17:30,240 Speaker 1: real estate market. Yeah. I know. We've actually had people 371 00:17:30,240 --> 00:17:33,400 Speaker 1: in our Facebook group that have mentioned their specific returns 372 00:17:33,440 --> 00:17:36,680 Speaker 1: investing in fund rise, and they've been good. Yeah, they've 373 00:17:36,680 --> 00:17:39,760 Speaker 1: been really really good over two or three or four 374 00:17:39,840 --> 00:17:42,359 Speaker 1: year period. I feel like we've seen people having a 375 00:17:42,359 --> 00:17:45,439 Speaker 1: lot of success investing their money in Fundrise. We just 376 00:17:45,480 --> 00:17:48,320 Speaker 1: want to paint a complete picture for you. And one 377 00:17:48,320 --> 00:17:51,720 Speaker 1: of those important things to note is that Fundise has 378 00:17:51,720 --> 00:17:54,480 Speaker 1: only been around for a handful of years, and so 379 00:17:54,600 --> 00:17:57,760 Speaker 1: we haven't actually seen how people's portfolios perform who have 380 00:17:57,840 --> 00:18:01,080 Speaker 1: invested their money through Fundise through a real estate downturn. 381 00:18:01,359 --> 00:18:03,960 Speaker 1: So that's just important to mention. And then John, your 382 00:18:04,000 --> 00:18:06,199 Speaker 1: next question was about whether or not this would be 383 00:18:06,200 --> 00:18:08,840 Speaker 1: a good first step when it came to kind of 384 00:18:08,880 --> 00:18:11,679 Speaker 1: getting your feet wet in real estate, and so what 385 00:18:11,720 --> 00:18:14,840 Speaker 1: I would say is that you know reats in general 386 00:18:15,000 --> 00:18:17,560 Speaker 1: and then fund Rised specifically too. It's good for a 387 00:18:17,600 --> 00:18:21,000 Speaker 1: diversification of your portfolio. However, I do not think it's 388 00:18:21,000 --> 00:18:23,639 Speaker 1: good though, as a way to try out landlording or 389 00:18:23,720 --> 00:18:27,600 Speaker 1: managing properties, because you're not Essentially, it's no different than 390 00:18:27,680 --> 00:18:30,440 Speaker 1: investing in the stock market. It might feel like you're 391 00:18:30,480 --> 00:18:32,800 Speaker 1: kind of getting more involved with real estate because these 392 00:18:32,840 --> 00:18:35,800 Speaker 1: are real estate funds, but reality, you know, you're not 393 00:18:35,880 --> 00:18:38,040 Speaker 1: the owner, you're not managing the property, so you're not 394 00:18:38,200 --> 00:18:41,320 Speaker 1: showing the property. You're not screening tenants. You're not the 395 00:18:41,320 --> 00:18:43,359 Speaker 1: one getting the calls or the text saying that the 396 00:18:43,400 --> 00:18:45,760 Speaker 1: toilet's broken or you know, whatever problems there might be. 397 00:18:46,160 --> 00:18:48,400 Speaker 1: It's not a good way necessarily to get a feel 398 00:18:48,440 --> 00:18:52,160 Speaker 1: for what's involved from a lifestyle standpoint when you own 399 00:18:52,320 --> 00:18:55,639 Speaker 1: a managed real estate. Yeah, and it's important also to 400 00:18:55,720 --> 00:18:58,520 Speaker 1: note that real estate should not be a huge percentage 401 00:18:58,520 --> 00:19:01,679 Speaker 1: of your portfolio. I of the idea of just waiting 402 00:19:01,680 --> 00:19:03,800 Speaker 1: and continuing to save up to buy that first house 403 00:19:03,840 --> 00:19:06,560 Speaker 1: like you mentioned as a potential possibility mom and pop. 404 00:19:06,640 --> 00:19:10,040 Speaker 1: Landlording has just so many specific benefits that Matt and 405 00:19:10,040 --> 00:19:12,480 Speaker 1: I think are valuable. But whatever you do when it 406 00:19:12,520 --> 00:19:14,800 Speaker 1: comes to real estate investing, just make sure that it's 407 00:19:14,800 --> 00:19:18,399 Speaker 1: a reasonable percentage of your overall portfolio. Don't over commit 408 00:19:18,400 --> 00:19:21,640 Speaker 1: your investing dollars specifically to real estate investing. You want 409 00:19:21,640 --> 00:19:24,280 Speaker 1: to be well diversified, and that means that a large 410 00:19:24,320 --> 00:19:28,160 Speaker 1: part of your investing dollars should be going towards investing 411 00:19:28,160 --> 00:19:31,480 Speaker 1: in the American and worldwide economy as a whole. Yeah, 412 00:19:31,520 --> 00:19:33,879 Speaker 1: And so assuming you're doing that, John, and even if 413 00:19:33,920 --> 00:19:35,960 Speaker 1: you do want to invest in your money in reats 414 00:19:36,080 --> 00:19:39,679 Speaker 1: or through eeraits, which is Fundises coined term for you 415 00:19:39,680 --> 00:19:41,720 Speaker 1: know what they offer. Make sure that you're still learning 416 00:19:41,800 --> 00:19:43,800 Speaker 1: and kind of gaining the knowledge of what it takes 417 00:19:43,840 --> 00:19:47,080 Speaker 1: to be a landlord or a manager of properties through 418 00:19:47,080 --> 00:19:49,920 Speaker 1: other means. You can look to local real estate investment 419 00:19:50,040 --> 00:19:52,240 Speaker 1: meetup groups like I mean, that's gonna be an incredible 420 00:19:52,280 --> 00:19:54,200 Speaker 1: way to meet other folks who are in the game. 421 00:19:54,320 --> 00:19:55,920 Speaker 1: You know, they've got their hands dirty. They're the ones 422 00:19:56,000 --> 00:19:58,640 Speaker 1: making the phone calls, they're the ones showing properties, doing 423 00:19:58,680 --> 00:20:01,000 Speaker 1: all that kind of stuff. That's just a fantastic way 424 00:20:01,000 --> 00:20:02,480 Speaker 1: for you to get a feel for what we call 425 00:20:02,800 --> 00:20:05,320 Speaker 1: the MoMA pop real estate investing, which it sounds like 426 00:20:05,359 --> 00:20:07,760 Speaker 1: what you're interested in, no doubt. All right, did John? 427 00:20:07,800 --> 00:20:09,760 Speaker 1: Good luck to you. I mean, we're just talking about 428 00:20:09,800 --> 00:20:12,680 Speaker 1: investing in homes. Well, what about home warranties? Let's get 429 00:20:12,720 --> 00:20:16,240 Speaker 1: to that. Hey there, Joel and Matt, this is Farking 430 00:20:16,359 --> 00:20:21,480 Speaker 1: from Baltimore. My husband and I recently purchased our first home. 431 00:20:22,280 --> 00:20:25,600 Speaker 1: Um in our realtor recommend that we get something called 432 00:20:25,640 --> 00:20:28,199 Speaker 1: a home warranty. What is your take on that and 433 00:20:28,240 --> 00:20:31,520 Speaker 1: how is that different from home insurance? Thanks you guys, 434 00:20:31,600 --> 00:20:34,120 Speaker 1: love listening to the podcast. Keep it up for hean. 435 00:20:34,280 --> 00:20:37,440 Speaker 1: Congrats on the first home. It's always an exciting time. 436 00:20:37,560 --> 00:20:39,600 Speaker 1: There's a lot to learn, a lot of decisions that 437 00:20:39,640 --> 00:20:42,200 Speaker 1: you're making, so hopefully our answer here will help you 438 00:20:42,240 --> 00:20:45,120 Speaker 1: along that path. Obviously, you have to have home insurance, 439 00:20:45,440 --> 00:20:50,280 Speaker 1: it's required by your lender. However, warranties are optional, uh, 440 00:20:50,320 --> 00:20:52,560 Speaker 1: and they're sold saying that they cover things that your 441 00:20:52,560 --> 00:20:55,800 Speaker 1: homeowners insurance doesn't cover. These were things as simple as 442 00:20:55,800 --> 00:20:59,359 Speaker 1: a broken dishwasher, busted furnace, things like that. Yeah, and 443 00:20:59,400 --> 00:21:02,199 Speaker 1: home warranty, the man, they sound so good, right, Like, 444 00:21:02,560 --> 00:21:04,280 Speaker 1: it sounds so nice to have this peace of mind 445 00:21:04,320 --> 00:21:07,880 Speaker 1: for five bucks that if anything goes wrong it's all fixed. Yeah, 446 00:21:07,920 --> 00:21:10,719 Speaker 1: sweet little catch all right, right, that's how it sounds. 447 00:21:11,280 --> 00:21:14,680 Speaker 1: But home warranty companies are notorious for being difficult to 448 00:21:14,720 --> 00:21:18,320 Speaker 1: work with and avoiding payout of claims. They're often hoops 449 00:21:18,320 --> 00:21:21,120 Speaker 1: to jump through, and most of the time I would 450 00:21:21,160 --> 00:21:24,840 Speaker 1: say they are not worth the price. Home warranty companies 451 00:21:24,880 --> 00:21:28,040 Speaker 1: get lots of complaints on the Better Business Bureau, and 452 00:21:28,080 --> 00:21:31,879 Speaker 1: that's because the fine print often doesn't reflect what's promised 453 00:21:31,880 --> 00:21:34,359 Speaker 1: on the front end. So basically, we just don't really 454 00:21:34,400 --> 00:21:38,960 Speaker 1: recommend home warranties. However, if you are looking at getting 455 00:21:39,000 --> 00:21:41,560 Speaker 1: one still you want to be sure that you know 456 00:21:41,800 --> 00:21:43,920 Speaker 1: what's covered. Just make sure that you read the fine 457 00:21:43,920 --> 00:21:46,719 Speaker 1: print if you do decide to go with one, because 458 00:21:46,760 --> 00:21:50,800 Speaker 1: for instance, you may only get a depreciated value of 459 00:21:51,040 --> 00:21:54,240 Speaker 1: a system if that system needs to be replaced. There's 460 00:21:54,280 --> 00:21:57,760 Speaker 1: also potential total pay out limits. It just depends on 461 00:21:57,880 --> 00:22:00,720 Speaker 1: the specific home warranty that you go with, So really 462 00:22:00,760 --> 00:22:03,280 Speaker 1: the responsibility falls to you as a homeowner to be 463 00:22:03,440 --> 00:22:06,439 Speaker 1: aware of what you're getting. Yeah, there's also deductibles that 464 00:22:06,480 --> 00:22:09,280 Speaker 1: you need to pay and meet every time someone comes 465 00:22:09,280 --> 00:22:11,920 Speaker 1: out to take a look at a potential issue, let's 466 00:22:11,920 --> 00:22:15,240 Speaker 1: say with your HVAC system or your dishwasher. And if 467 00:22:15,280 --> 00:22:18,480 Speaker 1: you really are only getting depreciated value on an item 468 00:22:18,560 --> 00:22:21,640 Speaker 1: like a dishwasher or an HVAC, well you're gonna feel 469 00:22:21,680 --> 00:22:24,080 Speaker 1: pretty cheated, I think by having spent the money on 470 00:22:24,080 --> 00:22:27,480 Speaker 1: that home warranty. And like Matt mentioned, potential total pay 471 00:22:27,480 --> 00:22:29,800 Speaker 1: out limits on some of these policies are just a 472 00:22:29,800 --> 00:22:33,000 Speaker 1: couple thousand dollars. So if you're spending five to get 473 00:22:33,000 --> 00:22:36,359 Speaker 1: a max potential benefit of two thousand dollars, that just 474 00:22:36,400 --> 00:22:38,240 Speaker 1: doesn't feel like a good place to put your money. 475 00:22:38,359 --> 00:22:40,280 Speaker 1: That's just not a good deal, right, Yeah, So the 476 00:22:40,359 --> 00:22:42,960 Speaker 1: best thing to do instead is to put that money 477 00:22:42,960 --> 00:22:45,080 Speaker 1: that you would have put towards a home warranty in 478 00:22:45,119 --> 00:22:48,960 Speaker 1: a savings account that's dedicated towards paying for repairs, potential 479 00:22:49,040 --> 00:22:52,040 Speaker 1: new appliances, any repairs to pop up that you have 480 00:22:52,119 --> 00:22:55,040 Speaker 1: to do to your house. And for you Farhan and 481 00:22:55,080 --> 00:22:58,520 Speaker 1: other people out there that are new homeowners or thinking 482 00:22:58,520 --> 00:23:01,800 Speaker 1: about becoming homeowners, it's a really good rule of thumb 483 00:23:02,160 --> 00:23:05,560 Speaker 1: for what repairs will cost annually for your home is 484 00:23:05,760 --> 00:23:08,120 Speaker 1: one percent of the purchase price. So if you bought 485 00:23:08,160 --> 00:23:11,440 Speaker 1: a two dollar home, well, just make sure to set 486 00:23:11,480 --> 00:23:16,960 Speaker 1: aside roughly two thousand dollars a year towards home repair expenses. So, Joel, 487 00:23:17,240 --> 00:23:20,080 Speaker 1: the reason I think that home warranties get pushed often times, 488 00:23:20,200 --> 00:23:23,600 Speaker 1: I think is because of realtors. I think a lot 489 00:23:23,600 --> 00:23:26,119 Speaker 1: of times they're suggested because the last thing that a 490 00:23:26,200 --> 00:23:29,080 Speaker 1: realtor wants if they are selling a home to their 491 00:23:29,080 --> 00:23:31,520 Speaker 1: client is they don't want them to move in. And 492 00:23:31,520 --> 00:23:33,520 Speaker 1: then all of a sudden stuff starts breaking and it 493 00:23:33,600 --> 00:23:35,880 Speaker 1: leaves like a sour taste in the mouth, and they're 494 00:23:35,920 --> 00:23:38,040 Speaker 1: not excited about their home, like, that's the last thing 495 00:23:38,040 --> 00:23:39,760 Speaker 1: that I realtor would want. And so a lot of 496 00:23:39,800 --> 00:23:41,920 Speaker 1: times you might see a home warranty being sort of 497 00:23:41,960 --> 00:23:44,440 Speaker 1: worked into the negotiations when it comes to closing on 498 00:23:44,480 --> 00:23:46,399 Speaker 1: a home, and if you can get the seller to 499 00:23:46,440 --> 00:23:48,360 Speaker 1: pay for a home warranty, I don't see anything wrong 500 00:23:48,400 --> 00:23:51,959 Speaker 1: with that. However, that's not something I would actively seek out. Instead, 501 00:23:52,000 --> 00:23:54,199 Speaker 1: make sure that you're talking to your realtor about getting 502 00:23:54,400 --> 00:23:58,760 Speaker 1: a really experienced home inspector. They may not be the cheapest, 503 00:23:59,040 --> 00:24:01,040 Speaker 1: but make sure it's one that your realtor has worked 504 00:24:01,040 --> 00:24:04,640 Speaker 1: with before, who is very adepts and very good at 505 00:24:04,680 --> 00:24:08,320 Speaker 1: finding all the issues with your house, including any systems 506 00:24:08,359 --> 00:24:10,840 Speaker 1: like h VAC, any issues with a roof, just those 507 00:24:10,880 --> 00:24:14,120 Speaker 1: things that could help you during the negotiating process. Yeah. 508 00:24:14,160 --> 00:24:17,959 Speaker 1: I think home warranties ultimately are typically sold as a 509 00:24:18,000 --> 00:24:20,960 Speaker 1: peace of mind sort of purchase that puts a homeowner's 510 00:24:20,960 --> 00:24:24,240 Speaker 1: mind at ease that this five covers me in case 511 00:24:24,280 --> 00:24:27,800 Speaker 1: anything major happens. Well, the problem is that that peace 512 00:24:27,840 --> 00:24:31,200 Speaker 1: of mind doesn't last very long when the problem actually arises, 513 00:24:31,400 --> 00:24:34,639 Speaker 1: because the home warranties almost never follow through like you 514 00:24:34,720 --> 00:24:37,560 Speaker 1: expect them to, so be very careful before you purchase 515 00:24:37,600 --> 00:24:39,960 Speaker 1: a home warranty. Make sure, like we said, you read 516 00:24:40,000 --> 00:24:41,760 Speaker 1: the fine print and you know what you're getting into, 517 00:24:41,880 --> 00:24:44,960 Speaker 1: because there are just a lot of potential pitfalls in 518 00:24:45,160 --> 00:24:48,159 Speaker 1: purchasing a product like this. So Farhan, hopefully you found 519 00:24:48,400 --> 00:24:51,040 Speaker 1: some of that advice helpful, or Gill. We have a 520 00:24:51,080 --> 00:24:53,920 Speaker 1: couple more questions, including one a really fun one about 521 00:24:54,200 --> 00:24:58,119 Speaker 1: a really dope electric truck. Man. Looking forward to tackling 522 00:24:58,200 --> 00:25:09,360 Speaker 1: that one here in a minute. Alright, we'll back Matt. 523 00:25:09,440 --> 00:25:11,919 Speaker 1: You know, I like electric vehicles and I'm really excited 524 00:25:11,960 --> 00:25:14,720 Speaker 1: to tackle that electric truck question. But first let's take 525 00:25:14,720 --> 00:25:19,800 Speaker 1: a question about paying off a debt that is in collections. Hi, 526 00:25:19,920 --> 00:25:22,679 Speaker 1: Matt and Jel. This is David. I have a question 527 00:25:22,680 --> 00:25:25,679 Speaker 1: about collections. Is it better to pay them off or 528 00:25:25,760 --> 00:25:28,680 Speaker 1: let them sit for seven years until they drop off 529 00:25:28,720 --> 00:25:32,840 Speaker 1: your credit? Um? Just wondering because I've gotten different feedback. 530 00:25:33,040 --> 00:25:34,800 Speaker 1: Some say that if you pay them off, it's not 531 00:25:34,840 --> 00:25:37,760 Speaker 1: really going to boost your credit score any because it 532 00:25:37,840 --> 00:25:40,119 Speaker 1: still takes that seven years to drop off your credit. 533 00:25:40,520 --> 00:25:45,000 Speaker 1: Just wondering. Thank you, Hey David, thanks for that question. 534 00:25:45,119 --> 00:25:47,320 Speaker 1: And man, I'm sorry that you're dealing with collectors. That 535 00:25:47,400 --> 00:25:49,960 Speaker 1: kind of sucks to be in that position, but hopefully 536 00:25:49,960 --> 00:25:52,240 Speaker 1: we can help out. The fact is, when it comes 537 00:25:52,280 --> 00:25:54,640 Speaker 1: to paying off your debt, it's hard to know the 538 00:25:54,680 --> 00:25:57,000 Speaker 1: actual effects that that will have on your credit score 539 00:25:57,320 --> 00:26:00,000 Speaker 1: because it depends on so many different things. It depends 540 00:26:00,080 --> 00:26:02,400 Speaker 1: is on the agency that you're getting your score from, 541 00:26:02,520 --> 00:26:05,320 Speaker 1: or you know what scoring model they're using. Sometimes certain 542 00:26:05,359 --> 00:26:07,600 Speaker 1: agencies will dismiss a bad mark if you pay it off. 543 00:26:07,840 --> 00:26:11,520 Speaker 1: Sometimes certain debts aren't looked upon nearly as negatively as others. 544 00:26:11,600 --> 00:26:14,639 Speaker 1: Medical debt for instance. Uh, sometimes the medical debt doesn't 545 00:26:14,680 --> 00:26:16,960 Speaker 1: nearly affect your credit score quite as bad as a 546 00:26:16,960 --> 00:26:20,280 Speaker 1: consumer credit card debt. But regardless, what's best, though, is 547 00:26:20,320 --> 00:26:22,760 Speaker 1: to go ahead and pay debts that you've agreed to, 548 00:26:23,119 --> 00:26:26,920 Speaker 1: even if they are past do right. Just because you 549 00:26:27,040 --> 00:26:29,879 Speaker 1: might be able to legally avoid payment, doesn't mean that 550 00:26:29,960 --> 00:26:32,480 Speaker 1: you should. Yeah, Matt, I completely agree. Part of this 551 00:26:32,680 --> 00:26:34,679 Speaker 1: is a moral issue, right, and I think it is 552 00:26:34,760 --> 00:26:38,080 Speaker 1: important to say that when you have taken a debt out, 553 00:26:38,480 --> 00:26:42,119 Speaker 1: it is I believe a moral obligation to repay that debt. 554 00:26:42,400 --> 00:26:44,719 Speaker 1: So there are other factors that become involved, and we'll 555 00:26:44,760 --> 00:26:46,639 Speaker 1: get into those, but I wanted to make sure we 556 00:26:46,720 --> 00:26:49,280 Speaker 1: mention that. So now let's go over how to pay 557 00:26:49,320 --> 00:26:52,119 Speaker 1: a debt that ends up in collections. Well, first you 558 00:26:52,119 --> 00:26:54,840 Speaker 1: want to send a debt verification letter to the creditor 559 00:26:55,200 --> 00:26:59,000 Speaker 1: to get proof that that debt is yours. Yeah, J Well, 560 00:26:59,080 --> 00:27:01,320 Speaker 1: you know, by the time them a debt goes to collections, 561 00:27:01,359 --> 00:27:04,399 Speaker 1: it's you know, long on left the original creditor, and 562 00:27:04,480 --> 00:27:07,520 Speaker 1: oftentimes that new collection agency like they don't have proof, 563 00:27:07,920 --> 00:27:10,760 Speaker 1: and sometimes it's gone from one collection agency to another. 564 00:27:10,800 --> 00:27:12,560 Speaker 1: Sometimes they only hang on to them for like six 565 00:27:12,600 --> 00:27:15,080 Speaker 1: months or so. And so what that means is sometimes 566 00:27:15,080 --> 00:27:17,800 Speaker 1: there can be errors and you might think you owe 567 00:27:17,880 --> 00:27:20,840 Speaker 1: that debt, but it's definitely worth checking to make sure 568 00:27:20,880 --> 00:27:24,639 Speaker 1: that that is actually your debt, yes for sure? All right, So, 569 00:27:24,680 --> 00:27:27,760 Speaker 1: the best case scenario when you're trying to figure out 570 00:27:27,760 --> 00:27:30,440 Speaker 1: how to pay a debt that has gone into collections 571 00:27:30,760 --> 00:27:33,280 Speaker 1: is to work out a settlement payment and to have 572 00:27:33,560 --> 00:27:37,520 Speaker 1: that account deleted fully from your credit history. And so 573 00:27:37,640 --> 00:27:41,240 Speaker 1: basically you're negotiating with this debt collector to make sure 574 00:27:41,280 --> 00:27:43,199 Speaker 1: that this happens, and you need to make sure that 575 00:27:43,280 --> 00:27:46,520 Speaker 1: you have all of this in writing before you actually 576 00:27:46,640 --> 00:27:50,360 Speaker 1: pay the amount that you've agreed upon. Basically, this collection 577 00:27:50,400 --> 00:27:54,679 Speaker 1: agency has no obligation to completely wipe this debt away 578 00:27:54,720 --> 00:27:58,560 Speaker 1: from your credit history, but you can negotiate that in 579 00:27:58,600 --> 00:28:01,719 Speaker 1: some instances, and that is the best case scenario you 580 00:28:01,720 --> 00:28:05,240 Speaker 1: could hope for. So again, asked to have the account 581 00:28:05,359 --> 00:28:08,760 Speaker 1: deleted from your credit history, and make sure to have 582 00:28:08,880 --> 00:28:12,160 Speaker 1: it in writing before you make the payment. Now, the 583 00:28:12,200 --> 00:28:15,320 Speaker 1: next best option for you is that, if your creditor 584 00:28:15,440 --> 00:28:18,120 Speaker 1: won't do this, you want to try to negotiate a settlement, 585 00:28:18,320 --> 00:28:21,480 Speaker 1: but then ask them to report it as paid in full. 586 00:28:21,880 --> 00:28:25,040 Speaker 1: This isn't nearly as good as having it deleted, because 587 00:28:25,200 --> 00:28:27,680 Speaker 1: you know, when it's deleted, it's like it didn't even exist. 588 00:28:28,160 --> 00:28:30,760 Speaker 1: If it's marked as paid in full, it definitely looks 589 00:28:30,800 --> 00:28:33,359 Speaker 1: better than than if you didn't and your credit score 590 00:28:33,440 --> 00:28:36,160 Speaker 1: will improve. I can't say how much, but it will 591 00:28:36,160 --> 00:28:38,720 Speaker 1: definitely help. And we're using the words settlement here, and 592 00:28:38,800 --> 00:28:42,160 Speaker 1: that means basically offering a certain amount less than what 593 00:28:42,240 --> 00:28:44,920 Speaker 1: you actually owe, and that is definitely possible when you're 594 00:28:44,960 --> 00:28:48,400 Speaker 1: negotiating with a collection agency to to pay less than 595 00:28:48,440 --> 00:28:51,440 Speaker 1: what you actually owe. It's best to start off offering 596 00:28:51,480 --> 00:28:55,480 Speaker 1: somewhere in the neighborhood of of what you actually owe them, 597 00:28:55,720 --> 00:28:57,960 Speaker 1: and if you're willing to pay a lump sum in 598 00:28:58,080 --> 00:29:01,479 Speaker 1: order to settle the debt, oftentimes a collection agency is 599 00:29:01,640 --> 00:29:03,880 Speaker 1: willing to take that offer. But so much of how 600 00:29:03,920 --> 00:29:07,600 Speaker 1: it impacts your credit is contingent on how that payment 601 00:29:07,880 --> 00:29:10,600 Speaker 1: is reported to the credit bureaus. And so that's why 602 00:29:10,680 --> 00:29:13,280 Speaker 1: having that account deleted is the best scenario. Paid in 603 00:29:13,320 --> 00:29:16,520 Speaker 1: full is the next best And so basically in third 604 00:29:16,520 --> 00:29:20,480 Speaker 1: place is settling the debt and having it reported on 605 00:29:20,600 --> 00:29:23,840 Speaker 1: your credit as a settled debt. It's not the best 606 00:29:23,840 --> 00:29:26,440 Speaker 1: case scenario because it looks like you didn't pay the 607 00:29:26,480 --> 00:29:28,960 Speaker 1: full amount of debt that you owed, but at least 608 00:29:28,960 --> 00:29:31,479 Speaker 1: it looks like some sort of resolution on your credit, 609 00:29:31,840 --> 00:29:33,520 Speaker 1: and that is at least somewhat of a good thing. 610 00:29:33,680 --> 00:29:35,880 Speaker 1: And so I want to come back to like having 611 00:29:35,920 --> 00:29:38,560 Speaker 1: that written record right, And so once you pay, like 612 00:29:38,640 --> 00:29:41,720 Speaker 1: once you've reached that settlement that agreed upon amounts, you 613 00:29:41,720 --> 00:29:43,720 Speaker 1: want to make sure that you keep proof of that 614 00:29:43,760 --> 00:29:46,040 Speaker 1: payment because the fact is, if you don't have proof 615 00:29:46,080 --> 00:29:48,320 Speaker 1: of that payment, and if you don't have that in writing, 616 00:29:48,360 --> 00:29:50,640 Speaker 1: that that's what they have agreed to do. All that 617 00:29:50,680 --> 00:29:53,000 Speaker 1: they do have in writing is that you owe x 618 00:29:53,040 --> 00:29:55,200 Speaker 1: amount of money that you haven't paid yet, and don't 619 00:29:55,240 --> 00:29:57,600 Speaker 1: be tricked by just someone saying something over the phone. 620 00:29:57,840 --> 00:29:59,600 Speaker 1: If we promised this is what's gonna happen. No no, 621 00:29:59,600 --> 00:30:01,360 Speaker 1: no, no no, you wanted in writing, you gotta see it, 622 00:30:01,560 --> 00:30:03,520 Speaker 1: and then after you make that payment. It's also good 623 00:30:03,520 --> 00:30:06,239 Speaker 1: to check your credit report to make sure that it 624 00:30:06,320 --> 00:30:10,560 Speaker 1: has updated properly. Oftentimes those reports get updated once a month, 625 00:30:10,800 --> 00:30:12,920 Speaker 1: so they can take thirty to forty five days before 626 00:30:12,920 --> 00:30:17,200 Speaker 1: you see that reflected accordingly. Basically, a debt in collections 627 00:30:17,520 --> 00:30:21,880 Speaker 1: is going to negatively impact your credit score for seven years, 628 00:30:22,120 --> 00:30:24,320 Speaker 1: and if you're just a couple of years into owing 629 00:30:24,360 --> 00:30:27,240 Speaker 1: this debt, it's gonna plague you for years and years 630 00:30:27,280 --> 00:30:30,280 Speaker 1: to come. So the best hope you have is to 631 00:30:30,400 --> 00:30:33,760 Speaker 1: settle something under the best terms possible for you. So 632 00:30:33,840 --> 00:30:37,240 Speaker 1: make sure to be kind but persistent when you're negotiating 633 00:30:37,360 --> 00:30:41,560 Speaker 1: with the collection agency and only agree to a resolution 634 00:30:41,960 --> 00:30:45,600 Speaker 1: that works well for you financially and also positively impact 635 00:30:45,640 --> 00:30:47,680 Speaker 1: your credit score at the same time. All right, Joel, 636 00:30:47,720 --> 00:30:50,920 Speaker 1: it is time for our fifth and final question. Let's 637 00:30:50,960 --> 00:30:54,120 Speaker 1: hear from Will. He's got a question about electric vehicles. 638 00:30:54,560 --> 00:30:57,360 Speaker 1: One of your favorite topics, Hi Mount and Joel. This 639 00:30:57,440 --> 00:31:01,240 Speaker 1: is Will from Modesto, California, a union carpenter, and I 640 00:31:01,360 --> 00:31:04,400 Speaker 1: work in San Francisco and the surrounding area. I never 641 00:31:04,400 --> 00:31:08,600 Speaker 1: really stay long on one location, and my commute averages 642 00:31:08,680 --> 00:31:11,200 Speaker 1: about sixty to ninety miles to pane on where they 643 00:31:11,240 --> 00:31:14,400 Speaker 1: sent me one way, so like, give a take on 644 00:31:14,640 --> 00:31:18,320 Speaker 1: sixty miles a day, that's kind of a lot. There's 645 00:31:18,320 --> 00:31:20,760 Speaker 1: a company called Rivian that is coming out with an 646 00:31:20,760 --> 00:31:24,800 Speaker 1: electric truck in the near future. Gets about four miles 647 00:31:24,800 --> 00:31:28,520 Speaker 1: a charge, has lots of storage areas, plus kind of 648 00:31:28,560 --> 00:31:32,640 Speaker 1: like Tesla features. The price is kind of a little 649 00:31:32,640 --> 00:31:37,320 Speaker 1: steep for me at sixty Would this hypothetically even make 650 00:31:37,360 --> 00:31:39,680 Speaker 1: any sense for someone like me to get? Because I 651 00:31:39,800 --> 00:31:43,800 Speaker 1: need a truck for work commute a lot. Thanks guys, 652 00:31:43,880 --> 00:31:47,320 Speaker 1: look for a dear answer. Oh my gosh, Matt, you're right. 653 00:31:47,360 --> 00:31:50,480 Speaker 1: I do love electric vehicles. I'm a little biased. We'll 654 00:31:50,520 --> 00:31:53,160 Speaker 1: just buy the truck already, Okay, I like it. Do 655 00:31:53,240 --> 00:31:55,960 Speaker 1: it make it happen? Well, this truck, in particular, the Rivian. 656 00:31:56,000 --> 00:31:57,719 Speaker 1: Have you actually seen pictures of this? Are you kind 657 00:31:57,720 --> 00:32:00,160 Speaker 1: of seen it in motion? Yeah? It looks incredible, a 658 00:32:00,280 --> 00:32:03,040 Speaker 1: very appealing vehicle, and Will, I understand your conundrum. And 659 00:32:03,080 --> 00:32:06,480 Speaker 1: I gotta be honest, trucks have gotten really, really expensive 660 00:32:06,720 --> 00:32:10,440 Speaker 1: over the last few years. The Ribvian does not seem 661 00:32:10,600 --> 00:32:13,960 Speaker 1: insanely priced when we're talking about brand new trucks like 662 00:32:14,040 --> 00:32:16,840 Speaker 1: it is expensive. Yes, it is probably going to be 663 00:32:16,840 --> 00:32:19,320 Speaker 1: a sixty five or seventy thousand dollar vehicle, but even 664 00:32:19,440 --> 00:32:21,840 Speaker 1: just regular gas engine trucks like a nice Ford F 665 00:32:21,920 --> 00:32:24,480 Speaker 1: one fifty or something like that. Man, they can get 666 00:32:24,680 --> 00:32:27,760 Speaker 1: kind of close to those numbers. Yeah, obviously brand new, 667 00:32:28,000 --> 00:32:32,000 Speaker 1: and that's not necessarily what we would recommend. Yeah, however, 668 00:32:32,400 --> 00:32:34,960 Speaker 1: you know, it's it's worth considering. But so Will specifically 669 00:32:34,960 --> 00:32:37,560 Speaker 1: you you mentioned that you're driving around a hundred and 670 00:32:37,600 --> 00:32:42,040 Speaker 1: sixty miles a day, and that is a ton of driving. Really, 671 00:32:42,040 --> 00:32:44,440 Speaker 1: this might end up being a tricky question. But luckily 672 00:32:44,480 --> 00:32:46,880 Speaker 1: we can kind of employ some math and that should 673 00:32:46,920 --> 00:32:50,760 Speaker 1: hopefully help us to help you make a good decision. Matt, 674 00:32:50,760 --> 00:32:53,880 Speaker 1: math is not my strong suit, but but I think 675 00:32:53,880 --> 00:32:56,480 Speaker 1: the basic calculations are easy enough that we can make 676 00:32:56,480 --> 00:32:58,680 Speaker 1: this happen. Right, Yeah, totally. And one of the things 677 00:32:58,720 --> 00:33:01,000 Speaker 1: that's made me think of was a recent episode that 678 00:33:01,040 --> 00:33:03,360 Speaker 1: we did about the best cars for frugal folks. And 679 00:33:03,400 --> 00:33:05,720 Speaker 1: we mentioned in that episode that the Tesla Model three 680 00:33:05,800 --> 00:33:09,360 Speaker 1: might actually be cheaper to own over three years than 681 00:33:09,400 --> 00:33:12,360 Speaker 1: a Toyota Camera. That's because there's so much less to 682 00:33:12,400 --> 00:33:15,280 Speaker 1: pay in fuel, and a Tesla Model three depreciate so 683 00:33:15,400 --> 00:33:18,320 Speaker 1: much less than a Toyota Camera. That's something we kind 684 00:33:18,320 --> 00:33:19,960 Speaker 1: of keep in mind as we discussed this, is that 685 00:33:20,040 --> 00:33:22,520 Speaker 1: the total cost of ownership is what we're looking at. 686 00:33:22,720 --> 00:33:24,959 Speaker 1: We're not just looking at the fuel cost, We're not 687 00:33:25,200 --> 00:33:28,040 Speaker 1: just looking at the sticker price. We're looking at that 688 00:33:28,080 --> 00:33:30,800 Speaker 1: total cost of ownership over a handful of years, and 689 00:33:30,800 --> 00:33:32,680 Speaker 1: that's gonna be the right framework to kind of help 690 00:33:32,760 --> 00:33:35,080 Speaker 1: us arrive at the right answer for this. I think 691 00:33:35,320 --> 00:33:38,360 Speaker 1: that's true, Joe. My biggest sticking point though, is that 692 00:33:38,440 --> 00:33:41,920 Speaker 1: it is man so tough to be the first one 693 00:33:42,000 --> 00:33:43,520 Speaker 1: to get this truck right, Like it's tough to be 694 00:33:43,600 --> 00:33:46,240 Speaker 1: the guinea pig buying the first vehicle that a car 695 00:33:46,400 --> 00:33:49,400 Speaker 1: manufacturer makes. I'm thinking about like the first versions of 696 00:33:49,400 --> 00:33:51,720 Speaker 1: the Tesla Roadster when it first came out. Man, that 697 00:33:51,760 --> 00:33:54,720 Speaker 1: thing was riddled with issues. Like even Elon Musk himself 698 00:33:54,840 --> 00:33:56,960 Speaker 1: he quoted at how like they just had so many 699 00:33:56,960 --> 00:33:59,800 Speaker 1: issues and how that first car was essentially a disaster. 700 00:34:00,640 --> 00:34:03,200 Speaker 1: But that being said, the Tesla was essentially the first 701 00:34:03,240 --> 00:34:05,120 Speaker 1: of its kind. And now that they sort of paved 702 00:34:05,120 --> 00:34:07,560 Speaker 1: the way a little bit, I think Rivian like they 703 00:34:07,640 --> 00:34:10,960 Speaker 1: might have much smoother sailing. Uh. The fact that Amazon, 704 00:34:11,120 --> 00:34:13,720 Speaker 1: I don't know, you saw they invested seven hundred million 705 00:34:13,760 --> 00:34:16,640 Speaker 1: dollars into Rivian. That's the vote of confidence that I 706 00:34:16,719 --> 00:34:18,799 Speaker 1: like to see. Yeah, most definitely. I agree with you 707 00:34:18,840 --> 00:34:20,960 Speaker 1: though about being the guinea pig on the first model. 708 00:34:21,280 --> 00:34:24,160 Speaker 1: That's a little nerve wracking. But let's get into the 709 00:34:24,239 --> 00:34:27,200 Speaker 1: specific math. So will Let's say you do actually drive 710 00:34:27,200 --> 00:34:29,680 Speaker 1: a hundred and sixty miles a day at an average 711 00:34:29,680 --> 00:34:32,120 Speaker 1: of twenty miles to the gallon and three dollars and 712 00:34:32,239 --> 00:34:34,520 Speaker 1: sixty three cents a gallon, And that's how much gas 713 00:34:34,520 --> 00:34:38,200 Speaker 1: actually costs in Modesta, California right now? Nice, I like it. Okay, 714 00:34:38,200 --> 00:34:41,040 Speaker 1: So we have the specific figures and gas fluctuates. It 715 00:34:41,080 --> 00:34:43,680 Speaker 1: can be even more expensive than that in California at times, right, 716 00:34:43,920 --> 00:34:46,319 Speaker 1: But that would be an estimated fuel cost of thirty 717 00:34:46,320 --> 00:34:49,359 Speaker 1: dollars a day, which let's say you're working twenty days 718 00:34:49,400 --> 00:34:52,400 Speaker 1: a month. That's definitely six hundred dollars a month in 719 00:34:52,480 --> 00:34:56,560 Speaker 1: fuel costs. Based on the national average for electricity costs, 720 00:34:56,800 --> 00:34:59,120 Speaker 1: the cost to charge an electric vehicle to take you 721 00:34:59,200 --> 00:35:01,560 Speaker 1: that same amount distance would be about a hundred and 722 00:35:01,600 --> 00:35:04,160 Speaker 1: forty dollars a month, So you would say roughly four 723 00:35:04,239 --> 00:35:07,719 Speaker 1: hundred and fifty dollars a month in fuel costs alone. 724 00:35:08,040 --> 00:35:10,160 Speaker 1: I think it's important to note that will scenario is 725 00:35:10,200 --> 00:35:12,560 Speaker 1: pretty rare. You know, most people are not going to 726 00:35:12,640 --> 00:35:15,279 Speaker 1: save that much money every month by going electric. Will 727 00:35:15,320 --> 00:35:17,960 Speaker 1: also lives in California, which is one of the highest 728 00:35:17,960 --> 00:35:21,000 Speaker 1: cost markets for gasoline, so it's important to note that 729 00:35:21,040 --> 00:35:24,520 Speaker 1: these circumstances are probably not applicable to most people thinking 730 00:35:24,560 --> 00:35:28,160 Speaker 1: about an electric car purchase. That's right, But for Will specifically, 731 00:35:28,280 --> 00:35:32,600 Speaker 1: he's looking at saving over five thousand dollars a year. Again, 732 00:35:32,680 --> 00:35:35,200 Speaker 1: and this is in fuel costs alone. This doesn't take 733 00:35:35,239 --> 00:35:38,120 Speaker 1: into account the regular oil changes and just all the 734 00:35:38,120 --> 00:35:40,279 Speaker 1: other fluids that need to be changed. You know, if 735 00:35:40,280 --> 00:35:43,040 Speaker 1: you're looking at keeping this truck ten years or longer, 736 00:35:43,520 --> 00:35:46,080 Speaker 1: this is not a bad idea. This is, of course, 737 00:35:46,120 --> 00:35:48,840 Speaker 1: assuming that you know, pay for the truck in cash. 738 00:35:49,239 --> 00:35:51,480 Speaker 1: We don't want you to have truck payments and Well, 739 00:35:51,480 --> 00:35:53,400 Speaker 1: this doesn't even taken into account what you mentioned as 740 00:35:53,400 --> 00:35:56,239 Speaker 1: far as the Tesla like features, which I'm assuming you 741 00:35:56,239 --> 00:35:59,440 Speaker 1: mean self driving features. If you're able to salvage a 742 00:35:59,440 --> 00:36:02,200 Speaker 1: couple of hours every single day that you could reclaim 743 00:36:02,239 --> 00:36:05,040 Speaker 1: and potentially do other work that you wouldn't be able 744 00:36:05,080 --> 00:36:06,839 Speaker 1: to do because you were driving, I've got to think 745 00:36:06,880 --> 00:36:09,160 Speaker 1: that there's some sort of admin work that you would 746 00:36:09,200 --> 00:36:10,840 Speaker 1: have to do, you know, when you're not out in 747 00:36:10,880 --> 00:36:13,839 Speaker 1: the field doing literal carpentry, that you would be able 748 00:36:13,880 --> 00:36:16,200 Speaker 1: to do in a vehicle. Man, for me, that would 749 00:36:16,200 --> 00:36:18,600 Speaker 1: be a huge selling point that every day there's time 750 00:36:18,600 --> 00:36:21,960 Speaker 1: I'm able to essentially harvest and puts a use so 751 00:36:22,000 --> 00:36:23,799 Speaker 1: that when I get back home, I'm not having to 752 00:36:23,880 --> 00:36:27,399 Speaker 1: spend additional time doing my job. Man for me, that 753 00:36:27,760 --> 00:36:30,279 Speaker 1: you know, reclaiming that time, that's a huge selling point. Yeah, 754 00:36:30,320 --> 00:36:32,480 Speaker 1: And not to mention just the fun factor honestly of 755 00:36:32,600 --> 00:36:36,040 Speaker 1: driving a truck like this sexy new truck, and not 756 00:36:36,160 --> 00:36:38,480 Speaker 1: just even how cool it looks, which that's for sure, right, 757 00:36:38,520 --> 00:36:40,719 Speaker 1: it's a really cool looking truck, but it's so much 758 00:36:40,760 --> 00:36:43,000 Speaker 1: fun to drive. Like when I got my niece on Leaf, 759 00:36:43,040 --> 00:36:45,520 Speaker 1: the driving experience was just so much more fun than 760 00:36:45,560 --> 00:36:47,879 Speaker 1: when I had my old school Ultima. I don't really 761 00:36:47,880 --> 00:36:50,440 Speaker 1: put a high premium on that. I wouldn't typically be 762 00:36:50,480 --> 00:36:52,320 Speaker 1: willing to pay a whole lot more. If the numbers 763 00:36:52,320 --> 00:36:54,440 Speaker 1: hadn't worked out for my Leaf, I wouldn't have done it. 764 00:36:54,560 --> 00:36:56,719 Speaker 1: I just would have stuck with my Ultima. But that 765 00:36:56,920 --> 00:36:59,320 Speaker 1: is kind of one of those intangibles that's nice to 766 00:36:59,440 --> 00:37:02,600 Speaker 1: at least think about. One thing I would mention to Will, 767 00:37:02,680 --> 00:37:05,080 Speaker 1: I think it's really important check with your insurance company 768 00:37:05,120 --> 00:37:07,440 Speaker 1: to see how much more it might cost to ensure 769 00:37:07,520 --> 00:37:09,719 Speaker 1: a brand new truck like this. There could be a 770 00:37:09,760 --> 00:37:12,440 Speaker 1: substantial difference there that could be kind of the make 771 00:37:12,520 --> 00:37:15,480 Speaker 1: or break item right there that tips the scales in 772 00:37:15,560 --> 00:37:18,839 Speaker 1: favor of either buying the truck or not. If the 773 00:37:18,880 --> 00:37:22,480 Speaker 1: difference in insurance costs is negligible and you're willing to 774 00:37:22,560 --> 00:37:25,520 Speaker 1: keep this truck for you know, eight to ten years, man, 775 00:37:25,560 --> 00:37:27,719 Speaker 1: I think this could actually be a really smart move 776 00:37:27,760 --> 00:37:30,360 Speaker 1: for you, and you'll probably get a lot more enjoyment 777 00:37:30,360 --> 00:37:32,600 Speaker 1: out of it over the years as well. The perfect 778 00:37:32,600 --> 00:37:34,719 Speaker 1: scenario would be that you could purchase one of these 779 00:37:34,800 --> 00:37:37,440 Speaker 1: a few years old, after you know the bugs have 780 00:37:37,480 --> 00:37:39,560 Speaker 1: worked out, and maybe the depreciation has kicked in a 781 00:37:39,600 --> 00:37:43,360 Speaker 1: little bit. However, that's not really applicable for you in 782 00:37:43,400 --> 00:37:45,920 Speaker 1: the situation. This is an electric vehicle. We talked about 783 00:37:45,920 --> 00:37:48,640 Speaker 1: how the Tesla, they hold their value, they don't appreciate 784 00:37:48,680 --> 00:37:50,960 Speaker 1: nearly as much because there is such a high demand, 785 00:37:50,960 --> 00:37:53,279 Speaker 1: because you would not be the only person looking to 786 00:37:53,360 --> 00:37:55,800 Speaker 1: buy a used Rivian. And so I just want to 787 00:37:55,840 --> 00:37:57,719 Speaker 1: mention that to all the folks out there who might 788 00:37:57,719 --> 00:37:59,879 Speaker 1: be wondering, like, why aren't they recommending the five year 789 00:37:59,880 --> 00:38:01,720 Speaker 1: old version of the Rivian. Well, you know, it doesn't 790 00:38:01,800 --> 00:38:04,880 Speaker 1: quite exist yet. Someday will the software will be updated, 791 00:38:04,920 --> 00:38:06,560 Speaker 1: the bugs will be worked out, and it will be 792 00:38:06,600 --> 00:38:08,879 Speaker 1: a little more affordable. But in the meantime, will can 793 00:38:08,920 --> 00:38:11,480 Speaker 1: expect to continue to pay about six hundred bucks a 794 00:38:11,560 --> 00:38:15,000 Speaker 1: month just towards gasoline alone? Will? Ultimately, Man, this is 795 00:38:15,000 --> 00:38:18,000 Speaker 1: a fun question to toss over, especially with my love 796 00:38:18,120 --> 00:38:20,680 Speaker 1: of electric vehicles. I mean, it's fun, but it's a 797 00:38:20,680 --> 00:38:22,719 Speaker 1: hard decision though. It is like I don't know that 798 00:38:22,800 --> 00:38:25,720 Speaker 1: I can say yes or no. And I think ultimately 799 00:38:25,800 --> 00:38:28,319 Speaker 1: some of those intangibles like the insurance costs could come 800 00:38:28,320 --> 00:38:31,560 Speaker 1: into play here. But really, I mean, for someone who 801 00:38:31,640 --> 00:38:35,480 Speaker 1: drives that much in a market where gasoline is so expensive, 802 00:38:35,840 --> 00:38:39,200 Speaker 1: buying a ridiculously expensive electric truck. That's not the craziest 803 00:38:39,200 --> 00:38:41,200 Speaker 1: thing I've heard today, that's for sure. But well, the 804 00:38:41,239 --> 00:38:45,080 Speaker 1: real question for you, though, is what podcasts do you recommend? 805 00:38:45,080 --> 00:38:47,319 Speaker 1: Because I gotta think with that much time on the road, 806 00:38:47,719 --> 00:38:51,160 Speaker 1: you must be listening to a ton of podcasts, maybe audiobooks. 807 00:38:51,520 --> 00:38:53,040 Speaker 1: Hit us up, let us know what you're listening to 808 00:38:53,160 --> 00:38:56,239 Speaker 1: other than our show How Do Money? But Joel, you 809 00:38:56,280 --> 00:38:58,080 Speaker 1: want to take it back to the beer. Yeah, man, 810 00:38:58,200 --> 00:39:01,960 Speaker 1: So today on the show we add Ninja Versus Unicorn. 811 00:39:02,200 --> 00:39:05,719 Speaker 1: It's Double I p a by Pipeworks Brewing Company, and 812 00:39:05,840 --> 00:39:08,920 Speaker 1: our listener Russ sent this one our way. Thanks again, Russ. 813 00:39:08,920 --> 00:39:11,800 Speaker 1: This beer, in particular had floral hop notes and a 814 00:39:12,000 --> 00:39:15,200 Speaker 1: nice bitter back end. I thought this beer was almost 815 00:39:15,280 --> 00:39:17,879 Speaker 1: as awesome as the can Art itself. Yeah. I feel 816 00:39:17,880 --> 00:39:20,040 Speaker 1: like it was very reflective of the Canart, like it's 817 00:39:20,080 --> 00:39:22,319 Speaker 1: like this battle going on, right. I felt like there 818 00:39:22,360 --> 00:39:25,040 Speaker 1: was sort of a hop assault going on in my mouth. 819 00:39:25,560 --> 00:39:27,239 Speaker 1: But with that, like you said, Joe, it has a 820 00:39:27,239 --> 00:39:31,879 Speaker 1: lot of hot florals going on, and I enjoyed it tremendously. Yeah. 821 00:39:31,880 --> 00:39:35,279 Speaker 1: I always a treat to enjoy beers from cities that 822 00:39:35,520 --> 00:39:38,240 Speaker 1: we can't get beer from. So that's cool. Thanks again, Russ. 823 00:39:38,440 --> 00:39:40,759 Speaker 1: All right, Matt, that's gonna do it for this episode, 824 00:39:40,840 --> 00:39:44,919 Speaker 1: episode one hundred of the How the Money Podcast. And 825 00:39:45,120 --> 00:39:47,399 Speaker 1: if you want show notes for this episode, you can 826 00:39:47,480 --> 00:39:50,560 Speaker 1: check out our website at how to Money dot com. Yeah, 827 00:39:50,560 --> 00:39:52,480 Speaker 1: I mean that's right, episode one hundred. You know, it's 828 00:39:52,480 --> 00:39:55,200 Speaker 1: good to celebrate these small winds kind of along the way. 829 00:39:55,480 --> 00:39:58,000 Speaker 1: And you know what, if you want to celebrate this win, 830 00:39:58,280 --> 00:40:00,400 Speaker 1: the small win with us, we would love for you 831 00:40:00,440 --> 00:40:03,560 Speaker 1: to leave a review over at Apple Podcasts. So, Joel, 832 00:40:03,719 --> 00:40:05,720 Speaker 1: that's going to be it for this episode. Man. Until 833 00:40:05,840 --> 00:40:08,760 Speaker 1: next time, Best Friends Out as Friends Out,