Speaker 1: Welcome to How the Money. I'm Joel and I and
Speaker 1: Matt's and today we are answering your listener questions. That's right, Joel,
Speaker 1: We've got a listener question Monday episode lined up for folks,
Speaker 1: and we've got five questions that we're gonna answer on
Speaker 1: this episode, including some ways that you can maximize your savings.
Speaker 1: We've got some grad school considerations that we're gonna talk through,
Speaker 1: as well as ways to avoid capital gains tax when
Speaker 1: it comes to selling uh some real estate. So we've
Speaker 1: got those questions plus two more. But first, man, we
Speaker 1: wanted to talk about software on your computer. Doesn't sounds
Speaker 1: so exciting. So recently we talked about how I had
Speaker 1: avoided updating the iOS on my computer for like multiple
Speaker 1: years in order from my old school Microsoft Excel to
Speaker 1: continue to work, right, because with an updates, I knew
Speaker 1: like that legacy version wasn't gonna work anymore. And we
Speaker 1: basically talked about how that was cheap, right, it was
Speaker 1: a cheap move to avoid the software patches, bug fixes,
Speaker 1: everything else that accompany a new software update. However, listener, Scott,
Speaker 1: he reached out to us and mentioned how we need
Speaker 1: to check out Libra Office. Had had you heard of
Speaker 1: Libra Office before he sent that email. I had not,
Speaker 1: But when he sent the email, he said that it
Speaker 1: was the newer version of Open Office, which was now
Speaker 1: defunct I think, right, or yeah, it changed or something. Yeah,
Speaker 1: and I remember open Office back in the day, but
Speaker 1: I totally forgot that Libra Office was the thing. Yeah.
Speaker 1: So this is an open platform software and they basically
Speaker 1: have all the different apps, all the different programs that
Speaker 1: you would typically use when you get like Microsoft Office
Speaker 1: or three whatever they're calling it now. Like they've got
Speaker 1: their document program that's called Writer Document and their equivalent
Speaker 1: to Excel is called CALC Spreadsheet. So I love how
Speaker 1: they've got it's totally white label generic names. But basically
Speaker 1: they are like old school versions of Microsoft that I mean,
Speaker 1: it's open source and so they've written it to be
Speaker 1: able to you know, it's compatible with newer Excel documents,
Speaker 1: like you can open the file formats that are that
Speaker 1: you currently use with you know, Word or Excel. However,
Speaker 1: it's not a Microsoft program and so it's open source. Uh,
Speaker 1: it means other folks keep up with it. And best
Speaker 1: of all, of course, it is completely free, so you
Speaker 1: can avoid paying you know, like what we talked about
Speaker 1: was paying that annual fee, uh that one time once
Speaker 1: a year cost to get a little bit of a discount,
Speaker 1: or you can go full on free avoid paying that altogether.
Speaker 1: And when we got that email from Scott Matt, you
Speaker 1: were like, all right, give this the shots. He immediately
Speaker 1: jumped on. I was like, what is this? What is
Speaker 1: this magic? And anywhere near is good? And you felt
Speaker 1: like it was definitely better than like the Google version
Speaker 1: that you were using, right yeah, I mean yeah, So
Speaker 1: what's great about like one of the great things about
Speaker 1: at least about CALC Spreadsheet is that you can, or
Speaker 1: in the whole platform too, you can create shortcuts, uh.
Speaker 1: And that's one of the cool things that you know,
Speaker 1: where you're bits, like say you are using like Google
Speaker 1: Sheets or Google Docs things like that. There's only so
Speaker 1: much that you can do within a web browser, right,
Speaker 1: but I love how you can go and create these shortcuts.
Speaker 1: You can create customized key strokes within these programs, and
Speaker 1: so you can get it to perform, you know, exactly
Speaker 1: like Microsoft Excel or even better, you know, you can
Speaker 1: kind of tailor fit it to to what, you know,
Speaker 1: whatever your specific needs are. Uh. So yeah, I just
Speaker 1: actually checked it out and I'm gonna definitely give it
Speaker 1: a go. Man nice all right, well yeah, if you
Speaker 1: can cut it down from eighty bucks a year to free,
Speaker 1: that's uh, that's what I'm saving. So host fig thanks
Speaker 1: to Scott for sending us an email. Now, we always
Speaker 1: learned from our listeners. I love that I learned from listeners.
Speaker 1: In the Facebook group, we get emails I feel like
Speaker 1: multiple times a day from listeners who have different suggestions
Speaker 1: and like, hey, dummies, what about this? And it's helpful
Speaker 1: because you know what you and I we don't know everything,
Speaker 1: not even close to it. And so it really does
Speaker 1: take the how of money community to help each other out.
Speaker 1: And those listener emails help a lot. They really mean
Speaker 1: a lot. So thank you Scott and other people for
Speaker 1: reaching out whenever we're wrong or we just like don't
Speaker 1: know something. All right, Matt, let's mention the beer that
Speaker 1: we're having on the show today. This one is called
Speaker 1: Seven Deadly Stounts. It's by Monday Night Brewing. They are
Speaker 1: around the corner from us, one of our favorite local brewers,
Speaker 1: and this is a particularly special staut that they brewed,
Speaker 1: and we're excited to have this one on the show today. Yeah,
Speaker 1: this is normally the kind of beer that we would
Speaker 1: have like on a really special occasion. So I don't
Speaker 1: know why we haven't cracked this thing open yet. Uh
Speaker 1: that I am really excited about sharing our thoughts on
Speaker 1: this beer at the end of this episode. Let's do
Speaker 1: it right. But for now, let's get onto the listener questions.
Speaker 1: And for folks that want to ask a question on
Speaker 1: any future on an upcoming Ask How the Money episode,
Speaker 1: just go to our website how to Money dot com
Speaker 1: slash ask. There are simple instructions there so you can
Speaker 1: submit your voicemail question and we hope to be able
Speaker 1: to take it soon. And Matt, let's get to the
Speaker 1: first one for this episode. This is from a listener
Speaker 1: who is trying to decide whether she should go to
Speaker 1: grad school abroad or stay stateside. Hi, guys, my name
Speaker 1: is Natalie. I'm twenty one and I'm from Central California.
Speaker 1: I'm graduating from UC Santa Barbara at this spring with
Speaker 1: no loans. I'm now deciding on to grad school to
Speaker 1: get my master's in public administration. Right now, my choices
Speaker 1: are between a two year program in California that costs
Speaker 1: about forty dollars before housing, or a one year program
Speaker 1: in Ireland that costs about twenty dollars after housing. This
Speaker 1: is my first time taking out loans. I'm concerned if
Speaker 1: I go abroad I won't have as good of an
Speaker 1: opportunity to network in order to get a high paying
Speaker 1: job back in California. But I'm also worried about taking
Speaker 1: out of forty loan. I studied abroad, so I am
Speaker 1: familiar and comfortable with the process of moving to Europe.
Speaker 1: But I don't want to miss out on networking if
Speaker 1: that's going to be the best decision career wise. I'm
Speaker 1: excited to hear what you guys think, so let me
Speaker 1: know in cheers. Natalie thinks so much for that question,
Speaker 1: and by cheers you actually mean Slancha, right. Yeah. Ireland
Speaker 1: is actually the only trip that Joel and I have
Speaker 1: taken abroad together. This is back before we had kids. Man,
Speaker 1: it was so much thinking, fun, beautiful country. Like I
Speaker 1: totally see myself going back there one of these days.
Speaker 1: The pub culture is wonderful in Ireland, so so much fun,
Speaker 1: live music. I mean, these are all things that I
Speaker 1: guess probably have been on hold, you know, for the
Speaker 1: past year, but I'm guessing that they are probably ready
Speaker 1: to fire things back up. But so you know, we'll
Speaker 1: try and not let our personal bias influence how we
Speaker 1: answer your question. And also to congrats on graduating with
Speaker 1: no loans and on continuing your education as well. Yeah,
Speaker 1: let's talk about loans, Matt for for just a second longer.
Speaker 1: On that note, this is a question I think for
Speaker 1: Natalie where she's going to want to be frugal and
Speaker 1: not cheap. This is something we've talked about with higher
Speaker 1: education before. I think, you know, obviously there is a
Speaker 1: student loan epidemic almost in this country right with with
Speaker 1: how they've got out of hand, and a lot of
Speaker 1: people owe so much money when they graduate from college,
Speaker 1: and we want people to avoid that, right, We want
Speaker 1: people to be smart about taking on college debt and
Speaker 1: not take on too much. But broadly speaking, when it
Speaker 1: comes to the cost of higher education, spending money now
Speaker 1: that will lead to advanced opportunities in the future isn't
Speaker 1: wasted money. And uh, I think it's healthy for Natalie
Speaker 1: had to have that uneasiness that she has about student
Speaker 1: loan debt, but also it's important to think of it instead,
Speaker 1: is money going towards increasing your human capital, which will
Speaker 1: pay dividends for decades to come. Although opting Natalie for
Speaker 1: that California program it doesn't necessarily mean that the increased
Speaker 1: costs are going to lead to more opportunity or greater
Speaker 1: pay in the future. It's kind of hard for Matt
Speaker 1: Night to really know without having, you know, a few
Speaker 1: more specifics. Yes, that is right. And something else to
Speaker 1: consider too, Natalie, is that, uh a two year program
Speaker 1: in California that costs forty thou before housing, Like that
Speaker 1: could end up costing you closer to sixty right, which
Speaker 1: is our seventy maybe? I mean yeah, seriously, And if
Speaker 1: you look at it that way, like that's closer to
Speaker 1: a forty thou dollar difference. Ireland is is one of
Speaker 1: the greatest spots on planet Earth, so going there while
Speaker 1: also getting the smaller price tag sounds pretty good in me.
Speaker 1: And you know, one of the key bonuses for opting
Speaker 1: for Ireland instead is that it's a one year program,
Speaker 1: not a two year program, And so this means that
Speaker 1: you are going to be on your way to launching
Speaker 1: your career and making money a whole year sooner, less
Speaker 1: money spent out of pocket and earning money sooner Like
Speaker 1: that sounds like a great combination to me. And another
Speaker 1: thought too is you know she's talking about networking, right
Speaker 1: how that's kind of like the biggest downside to going
Speaker 1: to Ireland. But if there's something that the pandemic has
Speaker 1: has taught us, I think is that there is so
Speaker 1: much that we can do from home in our sweatpants.
Speaker 1: Is I think if she wants to kind of you know,
Speaker 1: start that networking while she is abroad, so much of
Speaker 1: that can be done from the computer. You know. I
Speaker 1: think she could like start writing a blogs, you know,
Speaker 1: maybe start writing for other publications within the field that
Speaker 1: she's interested in, you know, launching herself into, and then
Speaker 1: just start sending out cold emails basically introducing herself. Uh,
Speaker 1: it's just gonna be a way that she's gonna allow
Speaker 1: herself to stand out. I think then just subscribing to
Speaker 1: a program, to your program in California, you know, like
Speaker 1: the grad who's in Europe in Ireland studying abroad. Like,
Speaker 1: to me, that's way more interesting and I think that's
Speaker 1: a great way to to stand out as well. Yeah,
Speaker 1: my friend Kim who was looking for work. She started
Speaker 1: just to kind of introduce herself to people on LinkedIn,
Speaker 1: and dude, I can't tell you how many calls that
Speaker 1: she set up, not even just like messaging back and
Speaker 1: forth or emails. It was like phone calls that people
Speaker 1: were like, Hey, let's go on the phone and chat.
Speaker 1: And yeah, So I feel like networking online is one
Speaker 1: of those things where people are craving human connection, even
Speaker 1: if it is just virtually. And so, yeah, I think
Speaker 1: you're right that the pandemic has taught us that we
Speaker 1: can network virtually, and and so I don't think, um,
Speaker 1: if you're intentional about it, that you're gonna be losing
Speaker 1: much in that regard. And not only I think you're
Speaker 1: you're gonna want to make that call. You know, your
Speaker 1: decision based on a number of different things, many of
Speaker 1: which Matt and I aren't privy to. Here, is it
Speaker 1: the connections that you're worried about missing out on, or
Speaker 1: maybe just that degree that you'll receive from a university
Speaker 1: in California look better to potential employers because that's something
Speaker 1: the factor into Can you use that maybe additional year
Speaker 1: to gain some valuable connections and work experience at the
Speaker 1: same time, and uh, again, don't be cheap when it
Speaker 1: comes to this decision. But also don't assume that more
Speaker 1: expensive equals more connections that's going to result in more
Speaker 1: pay Just because you're on site in California doesn't automatically
Speaker 1: mean that there's gonna be mixers going on that you're
Speaker 1: gonna be invited to where you get to show up
Speaker 1: and start, you know, shaking hands. I think that there's
Speaker 1: you know, we're probably gonna see more of that this fall,
Speaker 1: but I don't I can't imagine it's going to be
Speaker 1: in full force like it was pre pandemic as well,
Speaker 1: So I think that's definitely a consideration as well. Yeah,
Speaker 1: but Natalie, either way you go, you're in a strong
Speaker 1: position right now by not having any student loan debt.
Speaker 1: So best of luck as you move forward. And hopefully
Speaker 1: Matt and E's thoughts helped at least a little bit.
Speaker 1: But we got more questions to get to, including a
Speaker 1: listener who's worried that credit card debt might creep back
Speaker 1: up in his life. We'll get to that one right
Speaker 1: after this break. Al Right, we are back from the break,
Speaker 1: and we're gonna get to a question here soon about
Speaker 1: where to put some retirement money. But before that, let's
Speaker 1: get to that one, Joel that you mentioned about credit
Speaker 1: card debt kind of creeping back into this guy's life. Hey, guys,
Speaker 1: thanks so much for the podcast. We look forward to
Speaker 1: it every week. You've definitely helped me clarify law I
Speaker 1: thinks personal financial, giving me a strong action. Currently, I'm
Speaker 1: twenty nine years old. My partner and I are saving
Speaker 1: up for a house we'd like to purchase within the year.
Speaker 1: I just finished paying off twenty six dollars in debt.
Speaker 1: In the process of paying off the debt, I had
Speaker 1: closed a credit card. I noticed when I closed a
Speaker 1: credit card, my cardit score dropped about eighty points. Then
Speaker 1: I listened to one of your episodes where you discussed
Speaker 1: how useful and tac talent credit card can be one
Speaker 1: purchasing a host. I panicked, applied for another credit card,
Speaker 1: and got another credit card, where my credit card dropped
Speaker 1: again by about twenty points. I'm now worried that my
Speaker 1: old habits might creep in and I'll start spending on
Speaker 1: the credit card and carry a balance on it. I'm
Speaker 1: not sure if I should close it or if I
Speaker 1: should just hide it and put it away and keep
Speaker 1: on track with my saving Let me know what you think.
Speaker 1: Thank you so much. Anything can contribute will help. By
Speaker 1: the way, that question came from a listener named Matt,
Speaker 1: so he must be cool like my best buddy. Thanks.
Speaker 1: Do you think we get more questions from Mats or
Speaker 1: Mats for sure? Really? Well, it's just like a more
Speaker 1: common name. Yeah, it's kind of like John or nearly
Speaker 1: as many of us Joels out there, sadly, But Matt,
Speaker 1: congrats on the strides you've made it. I think it's too.
Speaker 1: It's definitely important to celebrate the debt payoff accomplishment that
Speaker 1: you've made. Being able to pay off twenty six dollars
Speaker 1: of debt is a huge sum of money. That's big. Yeah,
Speaker 1: it's worth celebrating with a nice beer or something like that.
Speaker 1: Seven Deadly stouts if you get if you can get
Speaker 1: your hands on one, yeah, already, I'm gonna tell you.
Speaker 1: I suggest it. So it's so good. But let's talk
Speaker 1: about why your credit score is so important too. If
Speaker 1: you want to buy a house within the year, Matt,
Speaker 1: closing cards is gonna crush your score and could cost
Speaker 1: you potentially thousands in interest over the life of the
Speaker 1: homeland that you're gonna get, and it could make that
Speaker 1: loan harder to get in the first place. And that's
Speaker 1: because credit scores are a bit convoluted, as we talked
Speaker 1: about Matt on the show. They're still massively important, though,
Speaker 1: even though they're kind of weird. Lenders are less concerned
Speaker 1: with the fact that you just paid off twenty six
Speaker 1: dollars in debt. They're not going to look at that
Speaker 1: and be like that guy, he's good with his money.
Speaker 1: We're gonna trust to make give them this home loan.
Speaker 1: That's just they have their their proprietary systems, that's how
Speaker 1: it works, and they're not factoring in how much debt
Speaker 1: you've gotten rid of in recent years. It's pretty dumb. Yeah,
Speaker 1: it is. They're more nervous about your credit score dropping,
Speaker 1: and they're less enthused by the fact that you just
Speaker 1: got rid of a bunch of debt, and that, in
Speaker 1: their mind, actually makes you riskier. The fact that you
Speaker 1: have a lower score even though you have less debt,
Speaker 1: which you know, Yeah, like Matt said, it doesn't really
Speaker 1: make all that much sense. Not how I would have
Speaker 1: devised the credit scoring model if it were up to me, Yeah,
Speaker 1: and you can't find some lenders who will actually take
Speaker 1: that into account, Like they'll do a manual underwriting where
Speaker 1: they look at all of your information, they'll see what
Speaker 1: you've been doing, and they'll kind of recognize the good
Speaker 1: behavior that you have exhibited. Right, But Matt, we we
Speaker 1: understand your desire to not go back in your credit
Speaker 1: card debt. Like, we're totally there with you. You You know,
Speaker 1: credit cards are, like we think, the best method for spending,
Speaker 1: but only if you use them properly, if you avoid
Speaker 1: maintaining balances. Uh and uh, you know, if you don't
Speaker 1: let your spending get out of control. But your instinct
Speaker 1: you know, to hide the card maybe and provide some
Speaker 1: behavioral barriers to using it, Like we we feel that
Speaker 1: as spot on. And so you know, we've talked about
Speaker 1: this before in the show. But literally putting your credit
Speaker 1: card on ice, you know, by putting it in a
Speaker 1: zip block bag full of water, can help prevent some
Speaker 1: destructive usage of that credit card. Also, too, there's more practical,
Speaker 1: maybe digital steps that you can also take by you know,
Speaker 1: doing something as simple as deleting your credit card information
Speaker 1: from from sites that you regularly use, you know, or
Speaker 1: deleting it from auto fill within your browser, basically any
Speaker 1: steps that make it more difficult for you just to
Speaker 1: hop on somewhere and make it purchase digitally. Yeah, and
Speaker 1: I think it's too man. It's worth including your partner
Speaker 1: in this. Right, you mentioned Matt that you're saving up
Speaker 1: for a down payment with your partner. We'll see if
Speaker 1: you can enlist the help of your significant other to
Speaker 1: help keep you on track. Also, if you're lucky, your
Speaker 1: partner is more of the money nerd, and if so,
Speaker 1: you have some built in accountability there. And even if
Speaker 1: it turns out that you're the money nerd who likes
Speaker 1: to spend, you can use your credit card for maybe
Speaker 1: like one or two recurring purchases like a power bill,
Speaker 1: and set them to out o pay. That way, the
Speaker 1: credit card remains active and helps your credit score. Even
Speaker 1: if you literally have like stowed it away inside the freezer,
Speaker 1: making it inaccessible to use on a day to day basis,
Speaker 1: it's still gonna be helping you out, and that's what
Speaker 1: you really want. It's not necessarily that you have to
Speaker 1: use your credit card for everything that you purchase, but
Speaker 1: it is having that credit card active using it regularly. Uh,
Speaker 1: even if it means you're not actually physically using it yourself. Yeah,
Speaker 1: just like the picture of the credit card in the
Speaker 1: bag of ice sitting there next to the audi ice cream,
Speaker 1: still doing its work even though you don't have to
Speaker 1: touch it. It's so good. Uh, it's a matt You know,
Speaker 1: it's crucial for your credit score to recover before you
Speaker 1: purchase a home. You know, like this could mean quite
Speaker 1: a big difference in the rate that you qualify for
Speaker 1: as well as your your monthly payment. And so keep
Speaker 1: an eye on your credit score and make changes based
Speaker 1: on what you see. And you can do this at
Speaker 1: a site like credit carma dot com. Oftentimes different you know,
Speaker 1: the different credit card companies online, when you log into
Speaker 1: the dashboards will have a little link there where you
Speaker 1: can see your credit score. There in credit CARDA specifically
Speaker 1: has this helpful score cards section that gives you a
Speaker 1: peek into what is specifically hurting your score. This is
Speaker 1: really important, but at the same time, we don't want
Speaker 1: you to stress out. You mentioned how this is a
Speaker 1: move that you want to make. Probably within the year,
Speaker 1: you can rebuild your credit score, you know, forty points
Speaker 1: by you know, you took to twenty point Ding's that's
Speaker 1: that's not great. But at the same time, you should
Speaker 1: totally be able to build that up when the time
Speaker 1: comes for you to sign up for a mortgage. Yeah,
Speaker 1: Matt's gonna get there. He's on his way. Just a
Speaker 1: couple of these tweaks to how you're handling those credit cards, Matt,
Speaker 1: and you got this. You got it licked, and you're
Speaker 1: gonna be able to get that mortgage. You're gonna get
Speaker 1: a great rate. I've got all the faith in you, man.
Speaker 1: All right, man, let's get to the next question. This
Speaker 1: one comes from listener Corey, and he wants to know
Speaker 1: where should he put money that he's investing for retirement.
Speaker 1: Should it keep going in four one k or is
Speaker 1: there a better move he can make? Joelan Matt love
Speaker 1: your podcast, Love all the information you guys are providing
Speaker 1: to make us all a little bit better financially. My
Speaker 1: question is regarding retirement accounts and where best to put
Speaker 1: your money. Currently, I work for employer that provides a
Speaker 1: four percent match when you can I contribute even to
Speaker 1: my company, and I'm trying to pick up every dollar
Speaker 1: I can for retirement. I started thinking about this when
Speaker 1: listening to you guys about where best to put my money.
Speaker 1: My question is is it better to pick up the
Speaker 1: match at your employer's plan and then put additional money
Speaker 1: into a roth Ira and espousal ira until they're maxed
Speaker 1: out and then go back to your employer's plan, or
Speaker 1: is it better to just contribute to in your employer's
Speaker 1: plan four oh one K plan, that is, until you
Speaker 1: max that out at the limit, and then if you
Speaker 1: can put additional money into a roth Ira or spousal ira.
Speaker 1: I should note that my company does provide an hs
Speaker 1: A plan which I do contribute to. I'm just determining
Speaker 1: where best to put my money whether it be in
Speaker 1: the roth ira accounts or in the rath pour oh
Speaker 1: one k accounts with the company after a meet the
Speaker 1: five percent match. Really appreciate your input, look forward to
Speaker 1: your response, and I definitely look forward to future podcasts
Speaker 1: and wish you guys continued success and all you guys
Speaker 1: are doing. Thank you so much, Corey, thanks so much
Speaker 1: for those well wishes, and we are glad that the
Speaker 1: information on here on the show has been helpful for
Speaker 1: you and your money. Let's go ahead and dive in.
Speaker 1: Let's start with the the kind of the most basic
Speaker 1: thing here. Let's talk about your match, right, it should
Speaker 1: continue to be your goal to to get that employer match.
Speaker 1: Since you're putting in eleven with the four percent match,
Speaker 1: you're investing of your pay. That is awesome, that's so good.
Speaker 1: But you know, if you can't do all of that,
Speaker 1: I think for some it might be be tough to
Speaker 1: say that much of their income dial back that four
Speaker 1: win K to full match status only for the time being,
Speaker 1: bringing your contributions down to five percent of your pay
Speaker 1: to get that full match first. That'll be worth it
Speaker 1: because at that point then you can invest in some
Speaker 1: even more tax advantage ways that we're going to now
Speaker 1: get to. Yeah, like the h s A. Right, Corey
Speaker 1: mentioned that he's got an h s A and it
Speaker 1: just slid it in there. Maybe I should just like
Speaker 1: let you guys know that I have this and Corey,
Speaker 1: that is you know a place we would encourage you
Speaker 1: to invest more of your money. So with those extra funds,
Speaker 1: as you pull back your four O one K contributions,
Speaker 1: put that money straight into your h s A instead
Speaker 1: and seek to max it out if you can. If
Speaker 1: you file taxes married filing jointly. The max you can
Speaker 1: put in in a year is sevucks. That's a that's
Speaker 1: a chunk of change, right, Matt, that you can start
Speaker 1: investing for the future. So hs as really are best
Speaker 1: if you use them as long term investment vehicles. A
Speaker 1: lot of people use these as a way to put
Speaker 1: money aside and then pay for medical expenses in that year,
Speaker 1: the very year that you put the money in. And
Speaker 1: you know, that's which makes sense because it's called a
Speaker 1: health saving his account. It's like, oh, this is for
Speaker 1: my health, right, but let's let's let's talk about your
Speaker 1: health down the road. We if you're listening to this show,
Speaker 1: you should think about it more of like a health
Speaker 1: investment account, right, you know, and because that's what it's
Speaker 1: really best at doing because of the way it's treated
Speaker 1: when it comes to taxes. So we would suggest that
Speaker 1: you check out your investment options that are available to
Speaker 1: you inside of that employer hs A plan, because if
Speaker 1: you can invest that money, letting it compound tax for
Speaker 1: you for decades, it's gonna be huge for you. And
Speaker 1: if you want to know more about the h s A,
Speaker 1: Matt and I we did a deep dive back in
Speaker 1: episode one oh five. There are just so many advantages
Speaker 1: to putting more of your investment dollars there as opposed
Speaker 1: to keeping them directly funneled into your four owe k instead. Yeah,
Speaker 1: and Corey he kind of mentioned there towards the end
Speaker 1: how his four O one k is actually a wrath
Speaker 1: for oh one k. And so sometimes, you know, we
Speaker 1: advise for folks to kind of diversify their tax liability,
Speaker 1: like it kind of makes sense from a diversification standpoints
Speaker 1: to say, all right, I'm gonna make some some pre
Speaker 1: tax investments. Now I'm almso gonna make some post tax investments.
Speaker 1: And so basically you have some funds in the future
Speaker 1: that you'll need to pay taxes on because you took
Speaker 1: the tax break earlier. But then you've also got the
Speaker 1: flip side because we don't exactly know where tax rates
Speaker 1: are going to be in the future. However, all that
Speaker 1: being said, tax rates are at historical lows, and so
Speaker 1: because of that, even though you have a roth floor
Speaker 1: one k going on, I think we're still gonna point
Speaker 1: you in the direction of not a traditional ira, but
Speaker 1: a roth ira, right, and so we feel that this
Speaker 1: is uh the next best bet after the h s A. Obviously,
Speaker 1: you know the max annual contribution there's six thousand dollars
Speaker 1: each for for both of you, for you and your spouse,
Speaker 1: and if you fully fund that, then you can go
Speaker 1: back and increase your four one K contributions up to
Speaker 1: the annual limit of nine. Getting to the point where
Speaker 1: you can do all of the above. It's a steep climb,
Speaker 1: but going in this order, we we feel that this
Speaker 1: makes the most sense from our perspective. And yeah, Corey,
Speaker 1: we wish you the best. You've got kind of like
Speaker 1: an audacious investing plan laid out before you, but it
Speaker 1: sounds like you're on the right track. Yeah, it's really
Speaker 1: hard to do and all of the above investing strategy
Speaker 1: like backing out all those accounts and that and then
Speaker 1: this and then after that do this. That's really a
Speaker 1: high bar, you know, to be setting for yourself. Not
Speaker 1: too high for how the money listeners. Yeah, I think
Speaker 1: a lot of how the money listeners, so they are
Speaker 1: looking to, you know, go that extra mile when it
Speaker 1: comes to their investments. And if you can doing all
Speaker 1: of the above, you can get the match contribute in
Speaker 1: max out in h s A and then max out ross.
Speaker 1: I mean that's that's huge. You're like, well on your
Speaker 1: way to financial independence if you are taking that you
Speaker 1: know all the above strategy. Seriously, Corey, keep up the
Speaker 1: good work man, keep making it happen. Are We got
Speaker 1: a couple more questions we want to get to, including
Speaker 1: can you avoid capital gains taxes when selling at home?
Speaker 1: We'll get to that and more right after this break.
Speaker 1: All right, now, it's time for that question about capital
Speaker 1: gains and specifically, uh, this involves some real estate. Hey,
Speaker 1: Matt Angel, this is Marie from Utah. I found you
Speaker 1: guys back into That's the nine Team when I was
Speaker 1: looking to best within my TSP and I've been hooked
Speaker 1: ever since. So this is a little bit involved. About
Speaker 1: four years ago, we sold are almost fully paid off
Speaker 1: investment property a little bit of a loss so that
Speaker 1: we could buy my brother in laws proper that is
Speaker 1: next door to our current home while he was going
Speaker 1: through a divorce. He's been renting it from us, but
Speaker 1: would now like to buy it back. We bought it
Speaker 1: for around two hundred and fifty it's now worth around
Speaker 1: four hundred thousand. We owe a hundred and fifty five
Speaker 1: thousand on it, and we've been depreciating it every year
Speaker 1: for around eight thousand, three hundred. We aren't looking to
Speaker 1: invest in another rental property at this time because of
Speaker 1: how the market values have increased, and honestly, nothing would
Speaker 1: be as great as having a property next door, so
Speaker 1: we still want to minimize capital gains as much as possible.
Speaker 1: Our current ideas are to max are two traditional TSPs
Speaker 1: as much as we can, to max the traditional IRA,
Speaker 1: and to donate some We are kind of stumped on
Speaker 1: what else to do. We also aren't really sure what
Speaker 1: else to do with the rest of the proceeds. Since
Speaker 1: we do have a fully funded emergency fund, we'd be
Speaker 1: maxing our retirement funds, and the only other debt we
Speaker 1: have is our own mortgage, which we will be refinancing
Speaker 1: at a two point three seven five Any ideas would
Speaker 1: be awesome. Thanks Marie, Thanks for your question. Man, I
Speaker 1: just have to say before we get into answering Marie's question,
Speaker 1: I feel like our listeners are crushing it. I feel
Speaker 1: like every question today is coming from a position of
Speaker 1: strength financially. People are in a good position, They've invested well,
Speaker 1: They're trying to maximize their opportunities make smart decisions, but
Speaker 1: It's just it's cool to hear how our listeners are
Speaker 1: just like taking the bull by the horns and they're
Speaker 1: doing a great job with their money. And Marie included
Speaker 1: like this is a question that's coming from a position
Speaker 1: of strength, like how do I potentially avoid some of
Speaker 1: the tax on the massive amount of money I made? Right? Mostuff? Yeah,
Speaker 1: I mean taking it back to like Natalie's question earlier,
Speaker 1: this is kind of like a five thousand level ask
Speaker 1: how the money episode? These are all very advanced questions
Speaker 1: where folks are doing an amazing job with their money.
Speaker 1: So that, yeah, definitely makes me really happy. And Marie,
Speaker 1: you know, first of all too, I'm glad that you're
Speaker 1: not asking us like what the fair price should be
Speaker 1: to sell that house back to your brother in law,
Speaker 1: because I feel that mixing family and money to other
Speaker 1: can kind of be you know, some tricky waters to
Speaker 1: wait into, and especially in your case, if you haven't
Speaker 1: you know, addressed the possibility of him buying the home
Speaker 1: back from 'all you know, back when he was going
Speaker 1: through the through that divorce, this could lead to some
Speaker 1: difficult conversations. But yeah, again you're not asking about that.
Speaker 1: Part of it sounds like you've identified the price and
Speaker 1: you're just moving on. There we go. I don't want
Speaker 1: to get into that. But let's talk about taxes. Everyone's
Speaker 1: other favorite topic. You know, people love to talk about.
Speaker 1: Taxes is just like an enjoyable, enlightening conversation for all
Speaker 1: of us, really light light table talking exactly. It's everybody excited.
Speaker 1: Let's let's talk about religion, politics and taxes like those
Speaker 1: are really fun topics of dinner conversation. But I will say, Marie,
Speaker 1: taxes are in most cases a sign of success, right
Speaker 1: that the better that you do, the more you'll owe.
Speaker 1: And you've done really well with this property, so you're
Speaker 1: gonna owe tax on it. But fortunately you'll owe taxes
Speaker 1: on the gain of this property at the capital gains rate,
Speaker 1: which is really favorable. It's fiftent in most cases. The
Speaker 1: only way to avoid capital game gains, ever, is to
Speaker 1: sell an asset in a year in which you made
Speaker 1: less than eighty thousand dollars including that gain. Uh So
Speaker 1: that means that Marie, you're not going to be eligible
Speaker 1: to skip out on any sort of capital gains tax um.
Speaker 1: That's the threshold for a zero percent capital gains tax rate.
Speaker 1: But of course, since your capital gains are so high
Speaker 1: on this property, that's impossible that sale price in accompanying
Speaker 1: gain alone will push your A G I pass the
Speaker 1: point of being able to avoid paying it. So sorry,
Speaker 1: but it is kind of a success tax in a way.
Speaker 1: You've been successful and you are going to owe uh
Speaker 1: taxes at the rate of fifteen percent in all likelihood
Speaker 1: on the games of this property. That's right. And you
Speaker 1: know the only way for most real estate investors to
Speaker 1: avoid capital gains taxes is either to to gain very little,
Speaker 1: which isn't a great game plan, let me hamstring myself,
Speaker 1: or order to roll that money into another property. And Marie,
Speaker 1: you touched on this, and so this is called the
Speaker 1: ten thirty one exchange for everyone else out there, it's
Speaker 1: it's listed under section ten thirty one and the I
Speaker 1: R S Code. That's why it's called the one exchange.
Speaker 1: IRS has all these catchy names, so sexy, and it's
Speaker 1: an excellent strategy that would allow you to minimize your
Speaker 1: capital gains taxes that you were to pay. Again, so
Speaker 1: we know that you said you're not interested in real estate,
Speaker 1: as you had it pretty nice with that house next door.
Speaker 1: But if you're looking to minimize taxes, we would highly
Speaker 1: recommend you consider a ten thirty one exchange, you know,
Speaker 1: like maybe sit down and consider what is it about
Speaker 1: having rental real estate that maybe you dislike the most.
Speaker 1: You don't like, say, for instance, if it's repairs and maintenance,
Speaker 1: like maybe for you, hiring a property manager makes the
Speaker 1: most sense. You talked about how having it next door was,
Speaker 1: you know, really nice, and so I'm guessing what that
Speaker 1: meant is that it was really nice to be able
Speaker 1: to go over there and make a repair or to
Speaker 1: check on something like that. And so if you're just
Speaker 1: not wanting it to be a part of your life
Speaker 1: as much, I could see that being a good instance
Speaker 1: for when you might want to hire a manager. Yes,
Speaker 1: you're paying them a percentage, but it would it be
Speaker 1: of the gains that you would realize from selling that
Speaker 1: property next door. That would be one really expensive property, right, Um,
Speaker 1: And yeah, I agree, Marie. I think it's worth considering
Speaker 1: doing a tent already want to change hiring a property
Speaker 1: manager so that you're not overseeing the rental property if
Speaker 1: that's what makes it daunting and uninteresting to you, It's
Speaker 1: really the only way to avoid the massive tax bill
Speaker 1: that you're gonna face when you sell this property. By
Speaker 1: the way, for everyone else out there, mat, I think
Speaker 1: it's important to clarify, Uh, this is the way it
Speaker 1: works when you're profiting from an investment property, not a
Speaker 1: primary residence. Taxes are way more favorable when you're selling
Speaker 1: your primary residence, and most normal folks aren't gonna owe
Speaker 1: anything in taxes when selling their home. And another option,
Speaker 1: by the way, worth considering for Marie is that if
Speaker 1: you created a company like an LLC, maybe you call
Speaker 1: it Marie's Holdings LLC. Like that, Yeah, fancy rate to it.
Speaker 1: It's better than the I R S name of one exchange,
Speaker 1: just as straightforward though, right, yes it is. Uh. Well then,
Speaker 1: and then if that LLC owned the property and sold
Speaker 1: the property, you might be eligible to open up a
Speaker 1: set bi ra so the company contributes to a retirement
Speaker 1: fund on your behalf up to fifty seven thousand dollars
Speaker 1: for last year fifty eight thousand dollars one. It's definitely
Speaker 1: worth considering, but we would suggest that you talk to
Speaker 1: a tax professional before you know, pulling off a complex
Speaker 1: maneuver like that. That's right, Yeah, So Marie, thank you
Speaker 1: so much for that question. We hope we have gotten
Speaker 1: you pointed in the right direction, and at least I've
Speaker 1: given you maybe a couple other ideas to consider, all right, Jill,
Speaker 1: Our next question comes from a listener who is looking
Speaker 1: to basically maximize her savings. Let's hear it. Hey, Jela Matte,
Speaker 1: my name is Brittany. I live in southern Illinois, about
Speaker 1: thirty minutes east of St. Louis. I absolutely love you
Speaker 1: guys podcast, and I listened to it religiously. I have
Speaker 1: a question about maximizing savings, and I like your input
Speaker 1: on mainly about mutual funds versus like a high interest savings.
Speaker 1: My husband and I currently have four one case and
Speaker 1: pensions through a work that we save about our income on.
Speaker 1: We also have about six months worth of savings saved
Speaker 1: up in UH savings account in our bank, and we
Speaker 1: also have like a fun money account for vacationing and
Speaker 1: that kind of thing. But I was wanting to try
Speaker 1: to see if there was anything we could due to
Speaker 1: get more bang for your buck, so to speak, help
Speaker 1: maximize the savings. As I said, any input that you
Speaker 1: can give would be greatly appreciate it. Thank you so much. Brittany,
Speaker 1: thanks for that beer recommendation. Of course, Matt and I
Speaker 1: always up for a good, solid beer recommendation. I think
Speaker 1: we've actually had a four hands beer on the show
Speaker 1: back in the day. It's been a minute, it has,
Speaker 1: But yeah. St. Louis has some has some good beers,
Speaker 1: has some great breweries. We've had side project before. A
Speaker 1: couple of weeks ago, we had something from Perennial Artisan
Speaker 1: Nails on the on the show. What it's called. It
Speaker 1: was delicious. Yeah, actually kind of similar to this beer. Yes, yeah,
Speaker 1: that's true. We'll talk about here on this episode. Yeah,
Speaker 1: but but we hear you, Brittany. Nobody is getting much
Speaker 1: bang for their buck these days when it comes to savings.
Speaker 1: So let's get to your question. The fact that you
Speaker 1: have a fully funded emergency fund is awesome. And on
Speaker 1: top of that, you have additional savings buckets for other
Speaker 1: goals that you're calling fun money. Let that put you
Speaker 1: in just an awesome spot. Financially, You're you're essentially the
Speaker 1: opposite of someone living paycheck to paycheck, right, um, And
Speaker 1: so yeah, congratulations are in order, Brittany. You're doing a
Speaker 1: great job. We feel your pain, though of wishing that
Speaker 1: your money was earning a higher rate of return. But
Speaker 1: it's important to remind yourself what this money is for.
Speaker 1: It's not to grow your wealth. It's there to preserve it.
Speaker 1: That's what savings are for. So that money is sitting there, safe,
Speaker 1: insecure in case something comes up, and those savings are
Speaker 1: going to keep you from racking up credit card tent
Speaker 1: if something were to happen that was unforeseen. Yeah, and Brittany,
Speaker 1: y'all are serious investors, which is great as well, but
Speaker 1: you know, having that emergency fund sitting there as cash
Speaker 1: will also keep you from potentially tapping those retirement accounts
Speaker 1: which come with a hefty fee as well. That's something
Speaker 1: that we were able to avoid last year with the
Speaker 1: care Is Act, right, the ability to tap into some
Speaker 1: four own case some retirement plans without that additional ten percent.
Speaker 1: But that's something that you want to keep in mind
Speaker 1: as well. So that being said, don't invest your emergency
Speaker 1: fund or your fund money, keep it liquid as cash.
Speaker 1: But you know, we definitely recommend you to look around
Speaker 1: to the different online high interest savings accounts that are
Speaker 1: out there. As of this recordings, c I T and
Speaker 1: ALLY are both offering point five percent on their savings accounts. Uh.
Speaker 1: And be sure to check out Allies No Penalty c
Speaker 1: D as well, even though they're you know, also just
Speaker 1: paying point five percent there as well. You're able to
Speaker 1: lock in the rate just in case rates drop even more. Uh.
Speaker 1: And of course, since it's penalty free, that means you
Speaker 1: can pull that money out of there really quickly without
Speaker 1: any of those penalties or fees, without getting penalized for
Speaker 1: pulling that money out early. Yeah, Matt, you jumped on
Speaker 1: that early on in the pandemic as rates were falling,
Speaker 1: and you're sitting pretty now in your no penalty c D.
Speaker 1: I mean literally, that was my our emergency fund. I
Speaker 1: was just like, you know what, Like, I don't think
Speaker 1: there is a high chance of us needing this emergency fund,
Speaker 1: but you still want it. They're just in case, but
Speaker 1: you also want access to it, which is why I
Speaker 1: feel like the Yeah, the no penalt d CD makes
Speaker 1: so much sense for that application. Yeah, especially in a
Speaker 1: falling interest rate environment and you're sitting it like three
Speaker 1: quarters of a percent higher than than most people are
Speaker 1: these days. I wish it was like closer to three
Speaker 1: or four percent higher, but it'd be nice. Yeah, not
Speaker 1: the case, right. That was a long time ago. We
Speaker 1: went interest rate. Wen says, an, we're earning that rate
Speaker 1: of interest. Uh, let's talk about two, Matt. Another option
Speaker 1: for Brittany here, Brittany, if you're under the income limits
Speaker 1: a RATH, opening a roth Ira for you and your
Speaker 1: husband is a great and flexible investing vehicle. Combined. That's
Speaker 1: an extra twelve thou dollars that you could be stocking away.
Speaker 1: And the best part of all is that your contributions
Speaker 1: can be withdrawn for any reason without paying any fees
Speaker 1: or taxes because RATH contributions are made with post tax money.
Speaker 1: And so Matt in an episode we did all about
Speaker 1: the roth Ira. That's something we talked about, is that
Speaker 1: the roth Ira has this potential to at least house
Speaker 1: a portion of your emergency fund if you've been diligent
Speaker 1: enough to handle money well throughout the years. And I
Speaker 1: think Brittany can start working towards that. If you do
Speaker 1: look at your cash stockpile and it starts to make
Speaker 1: your heart hurt and you wish that some of it
Speaker 1: was invested, I think you know it's it's it doesn't
Speaker 1: make sense to take all that money and invested, because
Speaker 1: then you're putting yourself at undue risk if something were
Speaker 1: to happen. But opening up a wrath and starting to
Speaker 1: stash money in there and working up to the point
Speaker 1: where the rath can be a small portion of your
Speaker 1: emergency fund is a worthwhile goal, and it can mean
Speaker 1: not having to have quite as much money sitting in
Speaker 1: a savings account the turning just very little, that's right.
Speaker 1: So yeah, Brittany, just keep in mind too. You know,
Speaker 1: this past year, a lot of people went through some
Speaker 1: some difficult situations, right, Like, I've got a feeling that
Speaker 1: you probably did pretty good. It sounds like you'll have
Speaker 1: some really solid and secure jobs. But imagine if you didn't, right,
Speaker 1: Imagine if you would have been in a situation where
Speaker 1: you had to go on unemployment, or in a situation
Speaker 1: where your hours were cut something like that. Hard times
Speaker 1: aren't always foreseeable, and so that is why we want
Speaker 1: to make sure that your emergency fund uh funds that
Speaker 1: you want accessible isn't invested, you know. And the other
Speaker 1: thing too, like you don't want to have money invested
Speaker 1: in the market that you're planning to take out within
Speaker 1: a year or you know, maybe even a couple of years.
Speaker 1: That's the kind of money you want to leave in
Speaker 1: the market for the long term. You want to make
Speaker 1: sure that you're avoiding that volatility, and you avoid that
Speaker 1: by keeping it placed more conservatively, no doubt. So, Brittany,
Speaker 1: best of luck moving forward, and don't feel so bad
Speaker 1: that your money is sitting there in savings not earning
Speaker 1: a lot. That's the boat we're all in. Yeah, it's
Speaker 1: a good thing. Uh and too, Brittany said, she listens religiously.
Speaker 1: I was gonna say, you do kind of have some
Speaker 1: like cult leader like tendencies. Thank you. I appreciate that.
Speaker 1: That's what I was going for it. I pulled it off.
Speaker 1: You do it? Well, okay, thank you? All right. Well
Speaker 1: let's get back to the beer that we had on
Speaker 1: this episode. This one was called Seven Deadly Stouts by
Speaker 1: Monday Night Brewing and Matt. This was a beer that
Speaker 1: literally they took seven different style say brewed, and they
Speaker 1: blended them together to create something unique and epic. What
Speaker 1: were your thoughts on this one? I would say that
Speaker 1: I think this is one of the best beers to
Speaker 1: have come out of Atlanta. Like it. It is that good.
Speaker 1: I mean, the flavor that they've packed into the stout.
Speaker 1: It makes you think that it's going to be crazy thick,
Speaker 1: you know, but like that's like, what's so amazing about
Speaker 1: this is that it doesn't it's not overly heavy. It's
Speaker 1: you know, the mouth feel the body. You drink it
Speaker 1: and you kind of switch it around a little bit,
Speaker 1: and and for the most part, it's pretty light compared
Speaker 1: to a lot of different stouts that would try to
Speaker 1: incorporate this amount of flavor, you know. And so the
Speaker 1: first thing I noted though, was like the vanilla flavor
Speaker 1: going on, like the vanilla, but then it's got like
Speaker 1: the dark chocolate roastiness going on. There's like some nice
Speaker 1: coconut vibes, uh, and there's also like some serious notes
Speaker 1: of hazel nuts. Like as I'm drinking it, like it
Speaker 1: totally made me think of New Tella, but New Teller
Speaker 1: that was also aged in like bourbon and brandy and
Speaker 1: whiskey barrels. Yeah, all the different barrels. But that's kind
Speaker 1: of New Teller really, It's true. But this was an
Speaker 1: amazing beer. I'm I'm kind of shocked that we just
Speaker 1: kind of pulled this one out randomly, but we're just
Speaker 1: like I mean, why not, you know, that's kind of
Speaker 1: the how the moneyway. It's not we're not living for
Speaker 1: the weekends, which is actually kind of like Monday Night's
Speaker 1: motto that weekends are overrated. But like we talked about
Speaker 1: on the show, craft beer is our craft beer equivalent,
Speaker 1: and so being able to enjoy something delicious like this
Speaker 1: during the week man while you and I record an
Speaker 1: episode that we can share a bottle like this is
Speaker 1: is a ton of fun. But yeah, what were your
Speaker 1: specific thoughts on this beer? Well, that was pretty meta
Speaker 1: to say that craft beer is our craft But I
Speaker 1: thought it was interesting, you know, reading up on this beer,
Speaker 1: like it took two and a half years to make
Speaker 1: this beer, and then then one of the things too,
Speaker 1: because it was these different staffs were aged for barious
Speaker 1: amount of times and different barrels, and then it took
Speaker 1: really an expert blender to mix those stouts together to
Speaker 1: create something like that's delicious. Sometimes combining a bunch of
Speaker 1: different beers like that, it might taste like you remember
Speaker 1: when you used to be like a suicide, like on
Speaker 1: the soft drink fountain machine and you get like, you know,
Speaker 1: some sprite, some cokes, some dr pepper, all that stuff
Speaker 1: and it would just it would taste horrible, Right, you
Speaker 1: weren't a good blender. Yeah, I guess not. That's what
Speaker 1: I'm saying is like, you know, drinking each of these
Speaker 1: stouts separately, I'm sure it was good. Typically combining them
Speaker 1: into something it's a really hard task and so it
Speaker 1: really shows that they that they were expert blenders when
Speaker 1: they made this beer. I agree. There were hints of
Speaker 1: all sorts of the ingredients that um we're in those
Speaker 1: base original stouts, like vanilla, like cinnamon, um and and
Speaker 1: coconut and some of the other ones as we definitely
Speaker 1: some cinnamon which brought us back to the Abraxis that
Speaker 1: we had recently. Yes, both both of these beers fantastic.
Speaker 1: I guess if was it Brittany, So she's up there
Speaker 1: and has access maybe to the perennial artist and nails.
Speaker 1: If you can get your hands on some of the
Speaker 1: bractsis Brittany, that is similar to what we're drinking right now,
Speaker 1: if you want to get seriously meato with it. Yeah. Yeah,
Speaker 1: So this beer was excellent, definitely, I agree, one of
Speaker 1: the best beers that's ever come out of Atlanta. Major
Speaker 1: winner from the folks over Monday night brewing and also
Speaker 1: kind of a random splurge on our parts, so it
Speaker 1: was cheers, all right. So that's gonna do it for
Speaker 1: this episode. We look forward to taking more listener questions
Speaker 1: in a couple of weeks, and you can always go
Speaker 1: and submit your listener question to be featured on an
Speaker 1: upcoming ask htm episode. There are simple instructions for how
Speaker 1: you do that on our website at how to money
Speaker 1: dot com slash ask. That's right, and if you've listened
Speaker 1: to our show and you found it helpful, we would
Speaker 1: love for you to share your appreciation for the show
Speaker 1: by heading over to Apple Podcast, leaving us a solid
Speaker 1: review over there that helps us to get the word
Speaker 1: out helps others to make sure that they are doing
Speaker 1: smart things with their money as well. So thanks in
Speaker 1: Advanced for that and Joel. Until next time, Best Friends Out,
Speaker 1: Best Friends Out.