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Speaker 1: Welcome to How the Money. I'm Joel Matt and today

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Speaker 1: we're answering your listener questions. That's right, Welcome to the

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Speaker 1: latest episode of How to Money. And in this particular episode, Joel,

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Speaker 1: we're taking five wonderful listener questions. You sort of like

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Speaker 1: a true pro there. Did you like that it felt

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Speaker 1: a little more like radioee, more of your background as

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Speaker 1: opposed to my background, which is like, what's up, dude,

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Speaker 1: I'm like, Matt just became Bob Barker for a second.

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Speaker 1: We do have a fantastic ask How the Money episode

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Speaker 1: and a few of those questions that we're gonna get

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Speaker 1: to today. A listener is wanting to know some of

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Speaker 1: the different ways to get a reluctant spouse on board

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Speaker 1: with a kind of just a financial plan essentially. Another

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Speaker 1: listener has a question of five nine accounts, and this

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Speaker 1: one in particular, it's kind of a follow up to

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Speaker 1: the secure Act two point oh episode we did not

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Speaker 1: too long ago. And another listener he's wondering if he

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Speaker 1: should become a landlord. In particular, he is moving abroad.

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Speaker 1: It doesn't necessarily seem like these two things compute that

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Speaker 1: they add up, but in fact, they do, and we'll

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Speaker 1: get to why that is the case later on in

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Speaker 1: the episode, for sure. All right, Matt, but before we

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Speaker 1: get to that, you uh oh, it looks like my turn. Okay, yeah,

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Speaker 1: you leave us off here. I'm confused because we currently

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Speaker 1: share Disney Plus. So I wrote down, we'll just cut

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Speaker 1: to the punchline, which is until they cut down on

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Speaker 1: password chairing. I've got my Disney Plus subscription refunded, and

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Speaker 1: which is why you're confused. Yeah, I was like, is

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Speaker 1: that all about? Well, you know that last year I

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Speaker 1: sold a TV that we had. It was a Roku

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Speaker 1: I don't know, high sense, and it's got the Roku TV,

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Speaker 1: Roku os or whatever built into it. And previously we

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Speaker 1: had purchased Disney Plus subscription. And so I sold that

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Speaker 1: TV at the end of last summer beginning to fall

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Speaker 1: and guess what I forgot to do? Cancel. I forgot

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Speaker 1: to cancel that stupid thing and cannot log in anywhere

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Speaker 1: else but your TV to do that. Well you can

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Speaker 1: if you remember too, I forgot. Uh. It seems to

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Speaker 1: be a recurring theme here that you forget to cancel

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Speaker 1: you're streaming. This is why it is. Well, first of all,

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Speaker 1: I guess what I'm doing. I'm making a case here

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Speaker 1: for budgeting, for at the very least for tracking your expenses,

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Speaker 1: because if I wasn't doing that, if I'm just like,

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Speaker 1: all right, I know, I do a pretty good job

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Speaker 1: of keeping up with all of my subscriptions, boom charge

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Speaker 1: that would have slipped through the cracks. I would not

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Speaker 1: have seen the fact that, because you know, life gets busy,

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Speaker 1: life gets complicated with we're getting hit with a lot

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Speaker 1: of different expenses in life. And I probably wouldn't have

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Speaker 1: batted an eyelash at the fact that ten dollar charge

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Speaker 1: from Disney plus that's oh yeah, that's right, that's what

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Speaker 1: we're doing. But because I was manually entering in my expenses,

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Speaker 1: I was I thought, wait a minute, that expenses out

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Speaker 1: of place, and so I hopped on the horn, picked

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Speaker 1: up the phone. That's a layman stern for I gave

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Speaker 1: Roku a call and I told them what was up,

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Speaker 1: and they immediately said, yeah, no problem, will cancel that

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Speaker 1: and we will immediately refund you. They did that, and

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Speaker 1: so I guess this is also I'm making a case

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Speaker 1: for picking up the phone. Don't be afraid to pick

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Speaker 1: up the phone and make a phone call, uh, because

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Speaker 1: something like this you can most definitely get refunded back

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Speaker 1: to you. But yeah, I wanted to share that because

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Speaker 1: otherwise I would have fallen into the very large swath

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Speaker 1: of Americans who underestimate how much you're spending, yeah, every

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Speaker 1: month in subscriptions, because I was about to become a

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Speaker 1: statistic and I'm glad that we did not. Yeah, No,

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Speaker 1: I'm glad you found that too. And I think you're right.

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Speaker 1: I think there's a lot of people who, yeah, one

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Speaker 1: underestimate and then too, they're not checking their expenses closely

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Speaker 1: enough and they don't realize and stuff like that happens,

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Speaker 1: and so they are bleeding money in different areas and

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Speaker 1: they don't know where the wounds are. And it's important

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Speaker 1: to know where the wounds are so then you can

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Speaker 1: apply the proper sized band aid to that wound. That

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Speaker 1: is right, my friend. All right, well, good, thanks for sharing. Uh,

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Speaker 1: let's let's move on. Let's mention the beer we're having

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Speaker 1: on this episode. It's called thick hydra. This is an

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Speaker 1: interesting looking soury on Matt and oh, yes it is,

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Speaker 1: yes it is, so we'll give that's the th y

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Speaker 1: y k which is how you should normally spell it.

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Speaker 1: You're supposed to spell thing right. So yeah, we'll give

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Speaker 1: our thoughts on this one at the end of the episode.

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Speaker 1: But Matt, let's get onto listener questions. And if you

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Speaker 1: anybody out there listening, if you're like, hey, I've got

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Speaker 1: a money question I want to ask Matt and Joel, well,

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Speaker 1: we would love to take it. Just go to how

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Speaker 1: to money dot com slash ask for simple instructions. Basically,

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Speaker 1: you just gotta record your voice, say your name, where

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Speaker 1: you where you live first, and then yeah, stage your question,

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Speaker 1: send it over to us in the form of a

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Speaker 1: voice memo. Hopefully we can take it on an upcoming episode.

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Speaker 1: But let's get to our first question for today, and

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Speaker 1: this one is about having that conversation with your significant

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Speaker 1: other about the family finances. Hey, Joel, Hey Matt, this

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Speaker 1: is Steven from South of Nashville. I have a household

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Speaker 1: budget question for you. Guys. My wife has had a

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Speaker 1: hard time accepting budget conversations, requests, general suggestions, or nudges.

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Speaker 1: The typical quote is we haven't had an issue yet,

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Speaker 1: or why do we need a budget? Is there a

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Speaker 1: budget conversational script or set of checkpoints that would help

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Speaker 1: me in expressing a rough estimate of when our money

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Speaker 1: comes in, where it goes, and what it has spent on.

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Speaker 1: Is helpful to know before it happens. There's their documented

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Speaker 1: data that supports budget acceptance of a significant other improves life,

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Speaker 1: liberty and the pursuit of happiness. What works when negotiating

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Speaker 1: the existence of a home budget, and that they are

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Speaker 1: not just unicorns, or that the user of budgets will

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Speaker 1: not implode with knowledge if used appropriately, Always curious, always

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Speaker 1: learning your fans. Stephen from South Nashville. Life liberty and

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Speaker 1: the pursuit of happiness matter. Isn't that what we're all

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Speaker 1: after here? Yes? It is. And anytime a declaration of

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Speaker 1: independences evokes when we're talking about budgets, I am going

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Speaker 1: to be for that. Conversations like double nursery right there. Yeah,

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Speaker 1: by the way, we were in or he mentioned he's

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Speaker 1: in Nashville. We were in Nashville not too long ago.

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Speaker 1: I don't think we were in South Nashville. We literally

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Speaker 1: ate at a taco stand next to a gas station

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Speaker 1: and it was delightful, so cheap Charlie's I think is

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Speaker 1: what it was like, what it was called and also

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Speaker 1: right near there was this awesome Of course we were

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Speaker 1: attracted to the name cheap is literally in the name,

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Speaker 1: but it had it had great reviews. I was gonna

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Speaker 1: mention there's a coffee shop, renting store or right nearby

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Speaker 1: as well. That was a board game like a board

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Speaker 1: game cafe. That place was awesome. If we had more time,

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Speaker 1: we would have like planted down there for a while

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Speaker 1: all of our favorite board games plus others that, uh,

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Speaker 1: I've never seen before. But Stephen, to address your wife's

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Speaker 1: typical response, you know where she says that we haven't

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Speaker 1: had any issues yet, so why should we budget? Well,

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Speaker 1: I would say it's for a similar reason that we

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Speaker 1: have insurance plans in place, even though we rarely use them. So,

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Speaker 1: for example, most folks they've never had their their house

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Speaker 1: burned down. That doesn't mean it's pointless to have homeowners insurance, right,

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Speaker 1: It's still a really good idea to have a policy

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Speaker 1: like that in place. And so we want to make

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Speaker 1: plans like a pessimist, even though we are optimists at heart,

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Speaker 1: and we just want to make sure that you are

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Speaker 1: better prepared for the future, even though things that maybe

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Speaker 1: from a financial standpoint it sounds like life, it's been

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Speaker 1: a fairly smooth sailing for you, but that doesn't necessarily

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Speaker 1: mean that you're not going to have less income in

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Speaker 1: the future. Maybe one of you get slaid off from work,

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Speaker 1: or maybe you just take a pay cut, or on

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Speaker 1: the other side of the equation, maybe it's not an

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Speaker 1: income problem, but maybe it's it's an expensive problem. God forbid,

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Speaker 1: maybe one of you get sick and you've got a

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Speaker 1: lot a lot more medical bills down the road. So

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Speaker 1: it's just important to get a plan like this in place.

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Speaker 1: That way you are prepared. This is one of those

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Speaker 1: instances where it makes sense and it's important to dig

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Speaker 1: the well before you're thirsty. In a sense, that's what

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Speaker 1: budgeting is. Yeah. Well, and aside from the worst case scenario, Matt,

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Speaker 1: which you you outline something particularly dreadful that could happen

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Speaker 1: to them as a couple, because you know that's your

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Speaker 1: noomsday person. Um, I get that, but there are I

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Speaker 1: was choking on the beer, but it is truly thick there.

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Speaker 1: But I mean, aside from those worst case scenarios, which

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Speaker 1: is true, something something awful could happen, and you want

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Speaker 1: your finances optimized and button up for that reason, Well,

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Speaker 1: even just on those small things, it's gonna allow you

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Speaker 1: to achieve your goals much more quickly and efficiently by

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Speaker 1: having a plan in place. And I think Steven knows this.

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Speaker 1: He's just trying to commnce his wife, wants to bring

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Speaker 1: her on board. But just like something that you you

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Speaker 1: mentioned just a second ago out with your Disney Plus,

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Speaker 1: it's those little sorts of things where it's like if

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Speaker 1: you're just swimming by blissfully unaware of potential leaks in

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Speaker 1: the ship, like you could be redirecting those dollars to

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Speaker 1: meet bigger, better goals that you have, but they're just

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Speaker 1: kind of floating away into the ether because you don't

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Speaker 1: have a planning because you're not paying attention. Yeah, that

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Speaker 1: that sounds like an uh an efficient system. Sure, that's

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Speaker 1: if it's leaking like that. Yeah, And so that's what

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Speaker 1: the budget is. It's a plan for your money. And

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Speaker 1: you might like things a little more organized and button up.

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Speaker 1: And maybe she's more of a free spirit, Stephen, but

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Speaker 1: you know she might have heard you mentioned a budget

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Speaker 1: a bunch of times, which just kind of tuned it out.

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Speaker 1: I think that's the case for a lot of bubbles,

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Speaker 1: is they hear a word like budget, and most people

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Speaker 1: are particularly like turned off or repulsed by the idea

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Speaker 1: of a budget, which I understand, like the word has

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Speaker 1: gotten kind of turned into something that it's that it's

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Speaker 1: not in our opinion. So what we think is you

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Speaker 1: kind of need to reframe that conversation to a certain extent,

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Speaker 1: right And uh, and maybe she doesn't know that budgeting

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Speaker 1: is something that really matters to you. My guess is

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Speaker 1: that if you tell her how important this is to

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Speaker 1: you as an individual, why it matters so much, what

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Speaker 1: kind of impact you think it's going to have on

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Speaker 1: your family finances, the more likely she is to get

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Speaker 1: on your side. And so it's just it's hard to

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Speaker 1: just flat out reject your spouse when they're sharing a

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Speaker 1: deep personal desire. And so if you're saying we need

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Speaker 1: to budget, that's one thing. But if you're saying, hey,

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Speaker 1: I love you and this thing really matters to me,

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Speaker 1: can we talk about it? Like, Uh, she's probably not

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Speaker 1: going to give you the heisman when start you start

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Speaker 1: the combo like that totally. Yeah, it's important to connect

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Speaker 1: the dots so that she sees how important this really

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Speaker 1: is to you you personally, because if not, it just

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Speaker 1: feels like a random suggestion, right or worse, it even

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Speaker 1: feels like nagging, She's likely to respond differently. And so

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Speaker 1: another approach that we want you to use is to

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Speaker 1: have a conversation about your hopes and dreams. So aside

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Speaker 1: from the fact that this is personal to you and

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Speaker 1: this is something that you want to see in y'all's

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Speaker 1: lives together, let's talk about like some of the tangible

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Speaker 1: things that you could both chase after and how your

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Speaker 1: money is going to impact your ability to achieve those dreams.

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Speaker 1: I mean that there have to be things that your

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Speaker 1: wife wants that that y'all don't have. Right. Um, there

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Speaker 1: are likely going to be trips or vacations that you

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Speaker 1: want to take. There's gonna be maybe a business that

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Speaker 1: you want to start, uh, And these things are directly

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Speaker 1: impacted by your ability to save and invest more money now.

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Speaker 1: And so maybe that's the problem, right, like that you'll

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Speaker 1: haven't set any goals that that are audacious enough. Maybe

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Speaker 1: you want a bigger house, maybe you want to enlarge

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Speaker 1: in your family. Like, there's all sorts of things that

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Speaker 1: the money can help fund. Those things that might seem like, oh,

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Speaker 1: I gotta push that off in the distance. But if

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Speaker 1: you can handle it your money better together now, it

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Speaker 1: might push those things up into the one near terms.

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Speaker 1: Or maybe you just haven't identified those things at all,

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Speaker 1: Like maybe it's just something that where again you're just

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Speaker 1: kind of floating along and life seems pretty good, but

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Speaker 1: there are more ambitious things that you could chase after,

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Speaker 1: and so we would recommend to sit down together. Maybe

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Speaker 1: you can map out some of the amazing things that

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Speaker 1: you want to accomplish together, because budgets, they really are

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Speaker 1: just a roadmap so that you can reach those shared

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Speaker 1: goals more quickly. Yeah, again, budgets get a bad rap

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Speaker 1: and there's usually like, hey, how can we cut back

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Speaker 1: on all the things we care about so that we

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Speaker 1: can just stop spending money and start saving for our

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Speaker 1: retirement so when we turn seventy we're not destitute. That's

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Speaker 1: not what a budget is. A budget is truly helping you,

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Speaker 1: like you said, Matt, sit down and figure out how

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Speaker 1: to funnel your money to achieve the goals that matter most.

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Speaker 1: And if you're talking about it like that, it's that's

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Speaker 1: a harder concept to reject too, because yeah, they are

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Speaker 1: likely goals that you're saying no to yourself, right, like,

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Speaker 1: why would you You're basically rejecting your own goal. Yeah,

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Speaker 1: and it's a lot easier to cut a subscription or

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Speaker 1: to cut recurring a spense out of your life when

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Speaker 1: you know that you're putting that money now towards something

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Speaker 1: that you're more excited about. It just makes that trade

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Speaker 1: off a whole lot. It makes you excited to make

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Speaker 1: the trade off instead of feeling like you're depriving yourself.

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Speaker 1: And so I think you know, based based on your question, Stephen,

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Speaker 1: it's it sounds like right now you feel like the

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Speaker 1: onus is on you if it's going to happen. It's

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Speaker 1: you're kind of like fighting uphill against your wife in

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Speaker 1: in hopes that you can achieve some of those goals.

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Speaker 1: But you gotta bring her in on the conversation. You

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Speaker 1: both have to have skin in the game, and there

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Speaker 1: are ways to do it again invoking that personal element,

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Speaker 1: invoking the goals that you both have together, and then

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Speaker 1: creating kind of a shared mindset for how you're going

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Speaker 1: to tackle it. I don't have some sort of like

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Speaker 1: silver bullet recommendation of how you can brainwash her into

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Speaker 1: realizing that a budget is a really important thing to do,

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Speaker 1: and in fact, that might be the exact opposite right

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Speaker 1: approach that you should be taking. Trying to brainwash your wife,

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Speaker 1: but actually get out of stop Watch and slowly moving

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Speaker 1: back and forth so that you know she'll respond, uh

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Speaker 1: the way you want or to no matter what. That's

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Speaker 1: that's not possible even your languages. Combat of silver bullets.

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Speaker 1: You know, Well, my my grandpa, I don't know. I

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Speaker 1: think I told you about. This's not a vampire. My

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Speaker 1: grandpa was a pastor and a psychologist and he tried

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Speaker 1: to hypnotize me once when I was a kid, and

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Speaker 1: I don't think it actually worked, But I guess, I

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Speaker 1: guess some people are more susceptible to hypnosis than others.

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Speaker 1: And my mind, it's just too strong man, just too strong.

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Speaker 1: It's like a lock box. But yeah, it was. So

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Speaker 1: was Steven's wife's exactly. And so I think Steven's gonna

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Speaker 1: have to take this multi pronged approach like to help

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Speaker 1: her come around on budgets and and on creating. Don't

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Speaker 1: call it a budget. Maybe sometimes the terminology we've got

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Speaker 1: this like firewall, and it's like budgets sound awful. Use

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Speaker 1: a different word, because if that's the word, that's maybe

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Speaker 1: setting her off and saying I don't want any part

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Speaker 1: of that. That's another thing to keep in mind. The

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Speaker 1: way you talk about it matters, Uh, even from a

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Speaker 1: terminology aspect. You can just call it the program that

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Speaker 1: we're gonna follow to allow us to buy this lakehouse,

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Speaker 1: or it's just a plan for your money, a rock

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Speaker 1: star money plan, like whatever you want to call it.

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Speaker 1: Like that might be a more fun way to kind

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Speaker 1: of get her involved and get her excited about it.

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Speaker 1: But I really do think that them working together that

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Speaker 1: might be at the core this as well, because I

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Speaker 1: mean he mentioned like in his question, he mentioned he

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Speaker 1: said something about like a script or different points that

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Speaker 1: he can follow, And I think a lot of this

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Speaker 1: might be less uh. I think there's less of an

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Speaker 1: onus on him to figure it out and to come

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Speaker 1: up with a plan as opposed to listening and figuring

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Speaker 1: out what it is that they can achieve together. And

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Speaker 1: look at you spoken like a guy that's been married

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Speaker 1: for a decade over here. Yeah, wow, listening, man, I

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Speaker 1: know who would have thought listening. But Stephen, I will say,

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Speaker 1: if you want a little numerical evidence to throw in

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Speaker 1: there in your inner conversations, a little bit of data.

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Speaker 1: The folks over at why not that's you need a

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Speaker 1: budget who were fans of They say that the average

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Speaker 1: new user saves six hundred bucks and the first two months,

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Speaker 1: and an additional six thousand dollars over the first year.

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Speaker 1: And just think, you know, like, what could y'all do

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Speaker 1: with an extra six thousand dollars having shown up without

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Speaker 1: you even hardly trying. I guess is it would go

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Speaker 1: a long way towards funding some purchases or some of

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Speaker 1: those experiences, or maybe some of those life changes that

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Speaker 1: you both would love to see happen. And so and

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Speaker 1: in this way, I'm even hesitant to have even presented

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Speaker 1: that data because again, we don't want you necessarily to

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Speaker 1: to use that as a cudgel, but we want you

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Speaker 1: to for you to both be working towards whatever your

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Speaker 1: shared goals might be together. Yeah, agreed, But I do

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Speaker 1: think that that that data, a little bit of it

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Speaker 1: might be helpful. And as you talk about it, to say, listen, like,

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Speaker 1: we're doing great, but think about the things we could

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Speaker 1: do if we just planned a little bit better, And

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Speaker 1: maybe that can fuel her ability to dream about like

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Speaker 1: what this money could do on your behalf to reach

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Speaker 1: some of those cool goals that you have, which I'm

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Speaker 1: sure everybody has goals. Everybody has wants and desires, and

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Speaker 1: money is not always the thing holding you back, but

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Speaker 1: sometimes it is. And if if we can make better

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Speaker 1: money plans as a family, as a couple, then it

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Speaker 1: allows us to achieve some of those goals sooner. And

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Speaker 1: I think that's awesome. I think it's cool that money

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Speaker 1: can do that for us. Absolutely, but um so, yeah,

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Speaker 1: even best of luck, let us know how it goes.

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Speaker 1: And Matt, we've got more questions to get to, including

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Speaker 1: we've got a frugal or cheap question. This one kind

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Speaker 1: of involves social mores when you visit your local brewery.

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Speaker 1: We'll get to that and more right after this. All right, man,

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Speaker 1: we are back and we will get to that beer

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Speaker 1: related frugal or cheap, But first let's hear from a

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Speaker 1: listener who has a question about some updates to a

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Speaker 1: retirement account. Hi, Matt and Jewel aj here from Iowa City.

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Speaker 1: Thank you guys very much for all of the amazing

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Speaker 1: content that you put out on your podcast. Thank you

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Speaker 1: also for the recent episode over the Secure two point

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Speaker 1: oh act. I had a follow up question regarding the

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Speaker 1: nine roll over into your roth ira A updates to

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Speaker 1: the account. I'm in the lucky situation that my parents

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Speaker 1: back when I was born, contributed to a five nine

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Speaker 1: plan in my name. This account has been over open

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Speaker 1: for over fifteen years and all of the money in

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Speaker 1: it has been there for over five years. As I

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Speaker 1: elected to go to a college in which I didn't

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Speaker 1: have to pay tuition, I was hoping to save this

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Speaker 1: money and invest it for my future children's college if

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Speaker 1: they so choose. My question is I max out my

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Speaker 1: wrath i A every year in addition to my wife's

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Speaker 1: roth ira every year. Does it make sense instead of

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Speaker 1: contributing to our wrath ira A to instead roll over

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Speaker 1: up to the maximum amount amount that we're able to

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Speaker 1: from our plan to our roth ira A plan, then

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Speaker 1: contribute to the five nine plan instead for the additional

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Speaker 1: tax savings. Thank you guys very much again for all

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Speaker 1: of the content that you put out. If you guys

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Speaker 1: are ever in the Iowa or Iowa City area, you

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Speaker 1: definitely have to check out Big Grove Brewery. They have

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Speaker 1: a bunch of excellent I p A s. See you guys,

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Speaker 1: A J. Thank you so much for that brewery recommendation,

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Speaker 1: and Jill real quick. Folks may have noticed that I

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Speaker 1: said retirement account before or A J launched into his question.

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Speaker 1: I wasn't necessarily trying to mislead folks, but in a way,

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Speaker 1: the new updates to the five nine plan allow it

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Speaker 1: to act like a retirements retirement plan. We'll get to that.

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Speaker 1: Before right now, it was literally just a tool to

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Speaker 1: save for college, and then there were updates a number

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Speaker 1: of years back that said now you can use it

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Speaker 1: for private school. And now it's like, wait a second,

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Speaker 1: the five twenty nine account has potential uses for future

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Speaker 1: retirement savings for your kiddos as well. And uh, I

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Speaker 1: just want to say I'm glad A J. Stayed awake

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Speaker 1: during that episode. We didn't want to put anyone to sleep,

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Speaker 1: especially while they're driving listening to the podcast Driving off

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Speaker 1: the Road just kind of like, okay, guys, like these

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Speaker 1: arcane details of the past, the smooth dulca tones of

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Speaker 1: us talking secure act two point I know, but this

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Speaker 1: there there was a lot of information that we had

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Speaker 1: to give out in that episode because it's going to

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Speaker 1: impact a lot of people moving forward. There were just

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Speaker 1: a lot of changes to retirement accounts and other accounts

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Speaker 1: that might not have been considered retirement accounts but now

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Speaker 1: can be. And it sounds like a J already had

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Speaker 1: like a solid plan to keep that five nine as is,

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Speaker 1: but to change the beneficiary to his kid, and that

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Speaker 1: would give it a lot more years to grow for

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Speaker 1: their future education. Which is cool, keep that nesting growing

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Speaker 1: for decades longer since you didn't need to use it.

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Speaker 1: But yeah, here's the thing. You might find yourself in

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Speaker 1: a similar scenario, which is not the worst one ever,

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Speaker 1: where there's just an overflowing amount of money sitting there

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Speaker 1: in that five account by the time your kid goes

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Speaker 1: to college if they opt to do something similar, right,

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Speaker 1: if they go to a cheaper school, or if they

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Speaker 1: avoid college altogether because maybe they start a famous rock

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Speaker 1: band and they're like, who needs college? Or they pull

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Speaker 1: a Bill Gates and invent the next great thing and

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Speaker 1: they don't they don't need it, right, So you're gonna

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Speaker 1: want to be strategic about how you approach this meaningful sum.

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Speaker 1: And I think some of these new changes might benefit

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Speaker 1: a J in his specific Situation's right, Yeah, a J,

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Speaker 1: He's just got money coming out the five twenty nine,

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Speaker 1: and so we're not exactly sure how much money he's

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Speaker 1: gotten there. You know, there could be uh thirty five

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Speaker 1: thousand dollars or there could be a hundred and thirty

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Speaker 1: five thousand dollars. Uh. So it's hard to come up

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Speaker 1: with a specific and firm plan. But I will say

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Speaker 1: that I really like the the idea of splitting the

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Speaker 1: baby with these funds here, you can hopefully leave some

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Speaker 1: of the money in there for your kiddos while then

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Speaker 1: rolling the maximount you're able to roll over into your

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Speaker 1: roth ira A each year moving forward, and then changing

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Speaker 1: the beneficiary at a later date. And then yes, since

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Speaker 1: you'll have leftover funds that would have been used to

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Speaker 1: contribute to a ROTH, you can start sticking those funds

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Speaker 1: into a fresh five nine account for your kids while

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Speaker 1: getting a helpful additional tax break like you mentioned, I

430
00:20:33,880 --> 00:20:36,280
Speaker 1: think you're gonna be able to to avoid a like

431
00:20:36,320 --> 00:20:38,800
Speaker 1: a six percent income tax on those funds there in Iowa,

432
00:20:38,840 --> 00:20:41,280
Speaker 1: which is pretty sweet. I'll take a six percent bonus

433
00:20:41,480 --> 00:20:43,280
Speaker 1: on money that I that I invest any day of

434
00:20:43,280 --> 00:20:45,480
Speaker 1: the week. That's the state tax break that you'd be

435
00:20:45,520 --> 00:20:48,879
Speaker 1: missing out on were you too. Instead take the simpler path.

436
00:20:49,320 --> 00:20:52,160
Speaker 1: You know, before the security point oh past, you would

437
00:20:52,160 --> 00:20:54,440
Speaker 1: have just changed the beneficiaries, rolled that over. We'll not

438
00:20:54,560 --> 00:20:57,440
Speaker 1: rolled it over, change the beneficiaries. They would then receive

439
00:20:57,720 --> 00:20:59,720
Speaker 1: the money from that five nine. If you would have

440
00:20:59,720 --> 00:21:02,800
Speaker 1: done that and then just continue to invest in your

441
00:21:02,800 --> 00:21:05,240
Speaker 1: wrath ires, you'd be giving up that six percent Iowa

442
00:21:05,920 --> 00:21:09,399
Speaker 1: income tax break that you're now going to receive with

443
00:21:09,440 --> 00:21:11,800
Speaker 1: this new plan of action that you've got lined up. Yeah, yeah,

444
00:21:11,800 --> 00:21:13,680
Speaker 1: money is fungible. But when you do it this way,

445
00:21:13,760 --> 00:21:15,880
Speaker 1: when you use the funds, by taking the funds out

446
00:21:15,880 --> 00:21:19,560
Speaker 1: of the account, rolling them into your wrath and then contribute,

447
00:21:19,600 --> 00:21:21,680
Speaker 1: making that contribution to the five nine on your kids

448
00:21:21,760 --> 00:21:25,360
Speaker 1: behalf yourself, you're just yeah, you're maximizing, you're optimizing, you're

449
00:21:25,359 --> 00:21:27,640
Speaker 1: getting more of a benefit. And and the great thing

450
00:21:27,680 --> 00:21:30,120
Speaker 1: is that this account, it already meets the aging threshold

451
00:21:30,160 --> 00:21:33,160
Speaker 1: that's required, Matt Cool. So there's not even extra time

452
00:21:33,160 --> 00:21:35,320
Speaker 1: that you're gonna need to wait necessarily, although kind of

453
00:21:35,320 --> 00:21:38,119
Speaker 1: there is, so hold on one second, but yeah, but

454
00:21:38,200 --> 00:21:41,040
Speaker 1: that's exactly what this law change was designed to do, right,

455
00:21:41,160 --> 00:21:43,360
Speaker 1: to make sure that there was someplace else at five

456
00:21:43,760 --> 00:21:46,760
Speaker 1: nine plan funds could go without having to be subject

457
00:21:46,760 --> 00:21:49,520
Speaker 1: to a penalty. And this is why previously, before Secure

458
00:21:49,520 --> 00:21:51,720
Speaker 1: Act two point oh, we were much more hesitant about

459
00:21:51,800 --> 00:21:53,680
Speaker 1: encouraging parents to stock away a ton of money for

460
00:21:53,720 --> 00:21:56,760
Speaker 1: their kids college. But now that there's a mechanism for

461
00:21:56,800 --> 00:21:58,960
Speaker 1: you to get that money out of the five account,

462
00:21:59,080 --> 00:22:02,159
Speaker 1: we're bigger fans them. And by the way, hopefully we

463
00:22:02,200 --> 00:22:04,240
Speaker 1: made it clear in this episode, but the rollout dates

464
00:22:04,560 --> 00:22:06,800
Speaker 1: on the Secure Act two point out changes are all

465
00:22:06,840 --> 00:22:10,120
Speaker 1: across the board, which makes it particularly difficult and annoying

466
00:22:10,160 --> 00:22:14,800
Speaker 1: actually to discuss all the changes. For instance, give a

467
00:22:14,880 --> 00:22:18,400
Speaker 1: random example, able accounts the aide there was an age

468
00:22:18,480 --> 00:22:22,080
Speaker 1: change in eligibility, but that doesn't take place until and

469
00:22:22,119 --> 00:22:23,880
Speaker 1: so there are a lot of frustrated people because they've

470
00:22:23,880 --> 00:22:27,160
Speaker 1: read about this, but it doesn't actually kick in for

471
00:22:27,240 --> 00:22:29,600
Speaker 1: a few more years. So that's just kind of one

472
00:22:29,640 --> 00:22:32,240
Speaker 1: of the annoying things. And and on this particular thing,

473
00:22:32,280 --> 00:22:34,879
Speaker 1: when it comes to the five nine Roth rollover, you

474
00:22:34,920 --> 00:22:37,680
Speaker 1: have to wait until January in order to be able

475
00:22:37,720 --> 00:22:40,720
Speaker 1: to do this. So yeah, you can't actually start rolling

476
00:22:40,720 --> 00:22:44,640
Speaker 1: over those funds this year, but get ready to start

477
00:22:44,680 --> 00:22:47,280
Speaker 1: doing it eleven months from now. And if you haven't already.

478
00:22:47,600 --> 00:22:50,560
Speaker 1: Go ahead and open those accounts for your kids asap.

479
00:22:51,040 --> 00:22:53,040
Speaker 1: That way you can start the clock aging on those

480
00:22:53,080 --> 00:22:55,040
Speaker 1: accounts too, in order to set you and your kids

481
00:22:55,119 --> 00:22:58,560
Speaker 1: up for the most financial flexibility possible. That's right. That'll

482
00:22:58,600 --> 00:23:01,120
Speaker 1: get that clock ticken and you will have more options

483
00:23:01,119 --> 00:23:04,119
Speaker 1: in the future as a result. Joel, let's get to

484
00:23:04,200 --> 00:23:07,639
Speaker 1: that that beer question. Specifically, this is a listener, and

485
00:23:07,680 --> 00:23:10,920
Speaker 1: he wants to know if his actions, if his behavior

486
00:23:10,960 --> 00:23:14,360
Speaker 1: within a brewery are acceptable, whether he is being frugal

487
00:23:14,600 --> 00:23:17,760
Speaker 1: or cheap. Hi, guys, my name is Pete. I live

488
00:23:17,800 --> 00:23:21,239
Speaker 1: in Lancaster, Pennsylvania, and I have a question if I

489
00:23:21,320 --> 00:23:25,040
Speaker 1: am frugal or cheap. There's a local brewery that I

490
00:23:25,040 --> 00:23:28,119
Speaker 1: go to quite a bit, and they have a great

491
00:23:28,119 --> 00:23:32,520
Speaker 1: beer that is seven dollars poor. They also have a

492
00:23:32,600 --> 00:23:36,960
Speaker 1: second beer which is the same exact price. Then they

493
00:23:36,960 --> 00:23:41,320
Speaker 1: have a third beer which is eight fifty. But all

494
00:23:41,359 --> 00:23:44,919
Speaker 1: that is is a fifty fifty mix of the first

495
00:23:44,920 --> 00:23:49,959
Speaker 1: two beers. So when I want that third beer, I

496
00:23:50,040 --> 00:23:53,359
Speaker 1: actually order one of the first beer and one of

497
00:23:53,359 --> 00:23:57,119
Speaker 1: the second beer and a glass of water, and then

498
00:23:57,160 --> 00:23:59,560
Speaker 1: I pour out the water and I mixed the first

499
00:23:59,680 --> 00:24:03,439
Speaker 1: beer and second beer together at the table, thus saving

500
00:24:03,480 --> 00:24:07,040
Speaker 1: me a dollar twenty five. So I have been called

501
00:24:07,160 --> 00:24:09,960
Speaker 1: cheap for doing this, but I don't see the point

502
00:24:10,080 --> 00:24:13,600
Speaker 1: in paying an extra dollar twenty five when I'm just

503
00:24:13,720 --> 00:24:18,320
Speaker 1: getting the same amount of beer. So my question to

504
00:24:18,359 --> 00:24:23,480
Speaker 1: you is am I being frugal or am I being cheap? Thanks? Guys,

505
00:24:23,920 --> 00:24:26,399
Speaker 1: all right, Matt, what's wig in pete? Frugal? Cheap? What

506
00:24:26,440 --> 00:24:30,439
Speaker 1: do you think? Well, it depends. There's a It depends

507
00:24:30,480 --> 00:24:32,120
Speaker 1: on how he's going about it. Right. If he's doing

508
00:24:32,119 --> 00:24:35,399
Speaker 1: it like right there in front of the bartender, you

509
00:24:35,400 --> 00:24:37,240
Speaker 1: can rub their face in it, and that's not staring

510
00:24:37,280 --> 00:24:39,000
Speaker 1: them in the eyes while they hate them two beers.

511
00:24:39,040 --> 00:24:41,400
Speaker 1: And he just dumps out the water without looking at it,

512
00:24:41,400 --> 00:24:42,879
Speaker 1: pours it on the floor. That would be kind of

513
00:24:42,880 --> 00:24:47,080
Speaker 1: a jerk. A mop over here. I was actually gonna say,

514
00:24:47,119 --> 00:24:50,440
Speaker 1: that's actually the one of the potentially cheap things. Don't

515
00:24:50,560 --> 00:24:53,240
Speaker 1: ditch the water, Just drink the water, drink all sixteen

516
00:24:53,280 --> 00:24:55,680
Speaker 1: ounces of it, and then makes your beer together. Maybe

517
00:24:55,680 --> 00:24:57,439
Speaker 1: that's maybe that's one thing, but no, they're gonna be

518
00:24:57,440 --> 00:25:01,360
Speaker 1: fully hydrated exactly and dump it. And there's always dog

519
00:25:01,400 --> 00:25:04,440
Speaker 1: bowls that breweries, that's always go water the bushes, bring

520
00:25:04,480 --> 00:25:07,200
Speaker 1: their dogs, yeah, or just hydreat yourself, Pete. But I

521
00:25:07,200 --> 00:25:09,240
Speaker 1: would say I think Pete in a lot of ways

522
00:25:09,480 --> 00:25:11,720
Speaker 1: is he's a man after my own heart, because I'm

523
00:25:11,720 --> 00:25:14,400
Speaker 1: all about finding ways like to maximize what I get

524
00:25:14,440 --> 00:25:17,600
Speaker 1: when I'm buying stuff, and like, for instance, if I'm

525
00:25:17,600 --> 00:25:19,560
Speaker 1: in the grocery storemat it takes me a lot longer

526
00:25:19,600 --> 00:25:21,959
Speaker 1: to go through the grocery store than it takes for Emily,

527
00:25:22,000 --> 00:25:24,600
Speaker 1: because I'm so much more price conscious. That's why I

528
00:25:24,600 --> 00:25:26,120
Speaker 1: like all the because I don't have to think nearly

529
00:25:26,160 --> 00:25:28,080
Speaker 1: as much. But if I go to Kroger, they decide

530
00:25:28,119 --> 00:25:30,600
Speaker 1: for you exactly. But if I go to kroger Man,

531
00:25:30,640 --> 00:25:33,480
Speaker 1: I'm like staring there looking at which of these eighty

532
00:25:33,520 --> 00:25:37,040
Speaker 1: two catchups is best on a unit based pricing scale.

533
00:25:37,359 --> 00:25:39,639
Speaker 1: And so it takes me a minute to check out

534
00:25:39,640 --> 00:25:41,560
Speaker 1: all the options. And I know that sounds ridiculous, but

535
00:25:41,560 --> 00:25:42,960
Speaker 1: that's just how my brain works and I can't turn

536
00:25:43,000 --> 00:25:45,480
Speaker 1: it off. And so yeah, I guess I get where

537
00:25:45,480 --> 00:25:48,160
Speaker 1: Pete's coming from. And I'm always down to do something

538
00:25:48,160 --> 00:25:50,919
Speaker 1: a little quirky to save a few bucks. So I'm

539
00:25:50,960 --> 00:25:53,880
Speaker 1: gonna say that this is a frugal beer loving move

540
00:25:54,680 --> 00:25:57,160
Speaker 1: largely though, based on the fact that you're not hurting

541
00:25:57,160 --> 00:25:59,440
Speaker 1: anyone else in the process. Like when I'm standing there

542
00:25:59,440 --> 00:26:02,520
Speaker 1: at the grocery or looking at that universe pricing, it's

543
00:26:02,520 --> 00:26:05,200
Speaker 1: only me who's wasting his time, right, uh, And I'm

544
00:26:05,200 --> 00:26:07,320
Speaker 1: not necessarily hurting anyone else by scoring the deal. And

545
00:26:07,359 --> 00:26:09,000
Speaker 1: I think Pete's doing the same thing. If he's not

546
00:26:09,400 --> 00:26:12,160
Speaker 1: rubbing the bartender's nose in it, if he's if he's

547
00:26:12,160 --> 00:26:14,600
Speaker 1: not dumping the water on the ground, like, if he's

548
00:26:14,960 --> 00:26:17,040
Speaker 1: doing it in a way that's respectful, I don't see

549
00:26:17,040 --> 00:26:19,280
Speaker 1: any problem with it. I think it's frugal, that's right. Yeah,

550
00:26:19,359 --> 00:26:21,399
Speaker 1: A big so. Back when we first introduced the idea

551
00:26:21,440 --> 00:26:24,520
Speaker 1: of being frugal versus being cheap, a big factor that

552
00:26:24,560 --> 00:26:27,879
Speaker 1: goes into crossing over the line into cheap category is

553
00:26:27,920 --> 00:26:31,240
Speaker 1: when you are imposing that cheapness upon somebody else. Essentially,

554
00:26:31,320 --> 00:26:34,520
Speaker 1: if you're if you're burdened with that cheapness all by yourself,

555
00:26:34,520 --> 00:26:37,400
Speaker 1: well that's that's totally fine, that's on you. But forcing

556
00:26:37,440 --> 00:26:40,359
Speaker 1: others to suffer through that cheapness with you, whether or

557
00:26:40,400 --> 00:26:42,480
Speaker 1: not they want to or not, I think that's an

558
00:26:42,480 --> 00:26:45,240
Speaker 1: instance where you're being cheap as opposed to frugal, But

559
00:26:45,480 --> 00:26:47,160
Speaker 1: something else that comes in mind too, Like, I think

560
00:26:47,200 --> 00:26:49,520
Speaker 1: the only way that this might actually, like straight up

561
00:26:49,520 --> 00:26:52,399
Speaker 1: be a cheap move is if you find yourself drinking

562
00:26:52,880 --> 00:26:55,760
Speaker 1: more beer than you than than you other otherwise would.

563
00:26:56,240 --> 00:26:58,720
Speaker 1: So it makes me think of getting groceries at Costco, right,

564
00:26:59,160 --> 00:27:02,240
Speaker 1: and maybe maybe we'll call this the bother of buying

565
00:27:02,240 --> 00:27:07,000
Speaker 1: in bulk, oh bother you Yeah, but but oftentimes like

566
00:27:07,040 --> 00:27:09,439
Speaker 1: you are able to score a pretty good deal by

567
00:27:09,480 --> 00:27:12,560
Speaker 1: buying in bulk, right, but if that leads you to

568
00:27:12,880 --> 00:27:17,640
Speaker 1: over consumption, then maybe you're not actually coming out ahead, right.

569
00:27:17,680 --> 00:27:20,399
Speaker 1: And so if purchasing the pre mixed beer for what

570
00:27:20,480 --> 00:27:22,920
Speaker 1: he's like a dollar fifty more pete, if that keeps

571
00:27:22,960 --> 00:27:26,679
Speaker 1: you from purchasing two beers when one beer would have

572
00:27:26,960 --> 00:27:29,600
Speaker 1: been able to suffice, then maybe you're actually being a

573
00:27:29,640 --> 00:27:31,920
Speaker 1: touch cheapier. Like. And so the reason I bring this

574
00:27:32,040 --> 00:27:33,840
Speaker 1: up is because it makes me think back to when

575
00:27:33,840 --> 00:27:36,960
Speaker 1: we joined Costco last fall and we saw our grocery

576
00:27:36,960 --> 00:27:39,879
Speaker 1: bill skyrocket, and I think a part of that was

577
00:27:40,040 --> 00:27:44,800
Speaker 1: the skyrocket over thirty three higher. And we've had multiple

578
00:27:44,840 --> 00:27:48,800
Speaker 1: months now. November and December grocery budgets were back in line,

579
00:27:48,960 --> 00:27:53,040
Speaker 1: literally thirty three plus percent lower. Granted both of those

580
00:27:53,080 --> 00:27:56,360
Speaker 1: months included travel where we weren't at home, So you're

581
00:27:56,400 --> 00:27:59,520
Speaker 1: finding Costco is the only culprit here, Matt. But well,

582
00:27:59,560 --> 00:28:01,720
Speaker 1: all the is just so much more stinking affordable. And

583
00:28:01,720 --> 00:28:03,639
Speaker 1: so the reason I highlight that example is because that

584
00:28:03,720 --> 00:28:06,640
Speaker 1: was an instance where we were essentially we were buying

585
00:28:06,640 --> 00:28:08,680
Speaker 1: in bulk. And so in a similar way, I see

586
00:28:08,720 --> 00:28:10,840
Speaker 1: Pete buying his beers in bulk. He's buying two beers

587
00:28:10,840 --> 00:28:14,520
Speaker 1: in order to meet his need for that sweet, sweet

588
00:28:14,520 --> 00:28:17,200
Speaker 1: blend of that third beer. Uh. In the same way,

589
00:28:17,240 --> 00:28:19,960
Speaker 1: we were forced to buy that pack of three milk

590
00:28:20,040 --> 00:28:22,440
Speaker 1: when maybe only one would have sufficed. You know, maybe

591
00:28:22,440 --> 00:28:25,240
Speaker 1: only we needed that one half gallon as opposed to

592
00:28:25,280 --> 00:28:27,680
Speaker 1: buying the box of three organic milks, Right, you know

593
00:28:27,680 --> 00:28:29,760
Speaker 1: what I'm talking about? Uh. And so that's I think

594
00:28:29,760 --> 00:28:31,560
Speaker 1: something important to keep the mind. Pete. If you're just

595
00:28:31,600 --> 00:28:34,959
Speaker 1: stopping in and you're always buying two beers when otherwise

596
00:28:35,000 --> 00:28:36,640
Speaker 1: you would have maybe just grabbed one and gotten out

597
00:28:36,640 --> 00:28:38,680
Speaker 1: of there, I think you might be paying a little

598
00:28:38,680 --> 00:28:41,320
Speaker 1: too much to like the principle of the fact that

599
00:28:41,400 --> 00:28:44,880
Speaker 1: you're overpaying for beer as opposed to in practicality, Like,

600
00:28:44,920 --> 00:28:47,160
Speaker 1: in in practice, what is going on here is you

601
00:28:47,200 --> 00:28:50,160
Speaker 1: are actually potentially over consuming. Yeah, Like let's say you

602
00:28:50,160 --> 00:28:51,760
Speaker 1: went out on a date and it was buy two entrees,

603
00:28:51,800 --> 00:28:54,920
Speaker 1: get one free, and that by yourself, and you're like,

604
00:28:54,960 --> 00:28:56,840
Speaker 1: I'm just gonna eat three, and I mean that that

605
00:28:56,840 --> 00:28:58,800
Speaker 1: would You're right, That would be just an example where

606
00:28:59,000 --> 00:29:03,160
Speaker 1: you're you're making a add decision purely based on the price,

607
00:29:03,720 --> 00:29:05,520
Speaker 1: the pricing of it, and it's probably just not in

608
00:29:05,560 --> 00:29:09,640
Speaker 1: your best interest from like a physical consumption standpoint. So

609
00:29:09,680 --> 00:29:11,160
Speaker 1: I think you're right. Man. If it's like, oh, it's

610
00:29:11,160 --> 00:29:13,640
Speaker 1: gonna let me drink more than I probably should or

611
00:29:13,680 --> 00:29:16,760
Speaker 1: otherwise would, then that would be kind of a cheap move.

612
00:29:17,160 --> 00:29:18,840
Speaker 1: But um, I also get the impulse and I don't

613
00:29:18,880 --> 00:29:20,480
Speaker 1: mind mixing my own beers if it's going to save

614
00:29:20,480 --> 00:29:23,080
Speaker 1: me a dollar fifty. And I think it's also one

615
00:29:23,120 --> 00:29:25,400
Speaker 1: last thing it's important to mention in answer to Pete's question,

616
00:29:25,600 --> 00:29:28,480
Speaker 1: is that frugality is great, but it only goes so far.

617
00:29:28,600 --> 00:29:33,400
Speaker 1: And I think sometimes people who are frugal minded, who

618
00:29:33,640 --> 00:29:37,200
Speaker 1: where frugality is the solution to most of their money problems,

619
00:29:37,840 --> 00:29:41,080
Speaker 1: they often leave other money saving possibilities on the table,

620
00:29:41,120 --> 00:29:42,600
Speaker 1: they don't really think about them. And it's not that

621
00:29:42,640 --> 00:29:45,440
Speaker 1: you shouldn't be concerned with saving a buck here or there.

622
00:29:45,800 --> 00:29:47,600
Speaker 1: I do think a penny saved is a penny earned

623
00:29:47,760 --> 00:29:51,200
Speaker 1: after all. But I also it's also true that some

624
00:29:51,320 --> 00:29:54,920
Speaker 1: ultra frugalits they obsessed so much over a dollar here

625
00:29:55,000 --> 00:29:57,920
Speaker 1: or a few cents there, and that's just really to

626
00:29:57,920 --> 00:30:00,040
Speaker 1: the detriment of more meaningful money moves that the and

627
00:30:00,240 --> 00:30:02,640
Speaker 1: make that would have a much bigger impact on their finances.

628
00:30:02,680 --> 00:30:05,520
Speaker 1: So I think the other phrases don't be penny wise

629
00:30:05,560 --> 00:30:08,480
Speaker 1: pound foolish, right, And I think sometimes that can happen.

630
00:30:08,560 --> 00:30:10,280
Speaker 1: And I know that from personal experience. I know that

631
00:30:10,280 --> 00:30:12,840
Speaker 1: because I know myself and I have learned and I

632
00:30:12,880 --> 00:30:16,960
Speaker 1: have grown from that kind of uh penchant. Like that's

633
00:30:17,000 --> 00:30:20,520
Speaker 1: who I was. I'm so detailed, so thoughtful about some

634
00:30:20,520 --> 00:30:22,960
Speaker 1: of those pennies, and then not thinking about some of

635
00:30:22,960 --> 00:30:25,480
Speaker 1: the bigger ways I could earn more or save more

636
00:30:25,560 --> 00:30:28,280
Speaker 1: in a bigger scale, concerned more about the dollar extra

637
00:30:28,320 --> 00:30:30,000
Speaker 1: I was paying for a beer that was pre mixed

638
00:30:30,360 --> 00:30:33,400
Speaker 1: versus an ongoing bill, or just drinking beers at home

639
00:30:33,760 --> 00:30:35,600
Speaker 1: to save that money. Whatever it is. So like I

640
00:30:35,680 --> 00:30:39,080
Speaker 1: just think they don't find that case of beer and

641
00:30:39,080 --> 00:30:40,600
Speaker 1: I like to go out to the I like to

642
00:30:40,640 --> 00:30:42,160
Speaker 1: go out to a brewery with a friend, Like I'm

643
00:30:42,160 --> 00:30:44,440
Speaker 1: not I'm not against paying more because you're out in

644
00:30:44,480 --> 00:30:46,960
Speaker 1: public and getting a coffee at a coffee shop. Like,

645
00:30:47,120 --> 00:30:48,840
Speaker 1: we hate that that that's railed against so much in

646
00:30:48,840 --> 00:30:52,040
Speaker 1: the personal finance space. But just make sure that you're

647
00:30:52,080 --> 00:30:56,200
Speaker 1: not so frugally inclined that you are missing some of

648
00:30:56,240 --> 00:30:58,680
Speaker 1: the other bigger ways that you could be making bigger

649
00:30:58,680 --> 00:31:01,160
Speaker 1: strides with your personal finance. This totally. Yeah, it's important

650
00:31:01,200 --> 00:31:04,360
Speaker 1: to kind of keep that frugality in perspective, but at

651
00:31:04,400 --> 00:31:06,760
Speaker 1: the same time, bring on all of your frugal or

652
00:31:06,800 --> 00:31:09,280
Speaker 1: cheats because it's a lot of fun to dive into

653
00:31:09,280 --> 00:31:12,480
Speaker 1: the weeds and get super ultra nerdy with it. I'm

654
00:31:12,560 --> 00:31:14,240
Speaker 1: sping forward to going out and having beers with Pete

655
00:31:14,240 --> 00:31:16,560
Speaker 1: one of these days. You're not gonna embarrass me, Pete,

656
00:31:16,640 --> 00:31:19,840
Speaker 1: And in fact, we'd probably do the same thing. But

657
00:31:19,920 --> 00:31:22,680
Speaker 1: we've got a couple of beers together. Hey, yeah, we

658
00:31:22,720 --> 00:31:24,320
Speaker 1: get We got a couple more questions to get to

659
00:31:24,440 --> 00:31:28,480
Speaker 1: during this episode, including that landlording question, as well as

660
00:31:28,520 --> 00:31:30,960
Speaker 1: one involving a roth Ira A. We will get to

661
00:31:31,000 --> 00:31:43,160
Speaker 1: both of those right after this. All right, Matt, Let's

662
00:31:43,200 --> 00:31:46,400
Speaker 1: get to a couple more questions on this ask htm episode.

663
00:31:46,560 --> 00:31:49,880
Speaker 1: And yeah, everybody has access to a roth Ira, including

664
00:31:50,040 --> 00:31:52,720
Speaker 1: this next listener, but she's not sure if it makes

665
00:31:52,760 --> 00:31:55,720
Speaker 1: sense to contribute to her wrath first or to that

666
00:31:55,760 --> 00:31:59,080
Speaker 1: workplace account. Let's get to it. Hi, this is Lauren

667
00:31:59,200 --> 00:32:03,360
Speaker 1: from Houston to Exis. I love your podcast. So I'm

668
00:32:03,360 --> 00:32:06,120
Speaker 1: working as a speech therapist for a school district in

669
00:32:06,200 --> 00:32:09,960
Speaker 1: Houston that allows us to use Vanguard or Fidelity for

670
00:32:10,080 --> 00:32:13,320
Speaker 1: our four oh three B accounts. The thing is that

671
00:32:13,400 --> 00:32:17,480
Speaker 1: my school districts does not provide a match. My question

672
00:32:17,640 --> 00:32:20,520
Speaker 1: is should I contribute money to the four H three

673
00:32:20,520 --> 00:32:24,440
Speaker 1: B or contribute mostly to the roth Ira that I

674
00:32:24,520 --> 00:32:28,520
Speaker 1: currently have with my bank. And if I should go

675
00:32:28,600 --> 00:32:31,320
Speaker 1: ahead and contribute to that four H three B, how

676
00:32:31,400 --> 00:32:35,440
Speaker 1: much do you suggest I contribute? Thanks so much? All right, Lauren,

677
00:32:35,600 --> 00:32:38,680
Speaker 1: First of all, good on your four or three B provider.

678
00:32:38,720 --> 00:32:41,160
Speaker 1: Did she say she had access to both Fidelity and

679
00:32:41,280 --> 00:32:44,640
Speaker 1: van Guards. That's pretty fantastic those are I mean, those

680
00:32:45,160 --> 00:32:47,960
Speaker 1: those two players, along with Schwab, have like the lowest

681
00:32:47,960 --> 00:32:50,440
Speaker 1: cost funds in the industry. Typically there are a few

682
00:32:50,440 --> 00:32:54,360
Speaker 1: other players that prioritize low cost funds, but man, those

683
00:32:54,360 --> 00:32:56,320
Speaker 1: are two of the best. Exactly. Yeah, there's a lot

684
00:32:56,360 --> 00:32:59,240
Speaker 1: of four three B accounts out there where folks only

685
00:32:59,280 --> 00:33:01,520
Speaker 1: have access to those high cost funds. But you're one

686
00:33:01,560 --> 00:33:04,000
Speaker 1: of the lucky ones there, Lauren. Um. But let's get

687
00:33:04,040 --> 00:33:06,720
Speaker 1: to it. A wrath or a four or three B

688
00:33:06,920 --> 00:33:09,880
Speaker 1: which one takes priority? Uh? And I would say if

689
00:33:09,920 --> 00:33:13,760
Speaker 1: you did have a match on that four or three B,

690
00:33:13,840 --> 00:33:16,200
Speaker 1: our answer would be different because we'd say to go

691
00:33:16,200 --> 00:33:18,480
Speaker 1: ahead and get that full amount of that match and

692
00:33:18,520 --> 00:33:22,000
Speaker 1: then invest the rest in a roth ira with all

693
00:33:22,080 --> 00:33:24,120
Speaker 1: the additional dollars that you're looking to sock away with

694
00:33:24,120 --> 00:33:27,240
Speaker 1: all of the leftover money. But because your employer doesn't

695
00:33:27,280 --> 00:33:30,640
Speaker 1: offer one, we want you to take the exact opposite approach.

696
00:33:30,960 --> 00:33:33,840
Speaker 1: We want you to fund your roth ira A first

697
00:33:34,240 --> 00:33:36,320
Speaker 1: and then stick any additional dollars that you're looking to

698
00:33:36,400 --> 00:33:39,360
Speaker 1: invest inside of that four three B. Again, you know,

699
00:33:39,480 --> 00:33:41,640
Speaker 1: fortunately your four or three B isn't isn't one of

700
00:33:41,640 --> 00:33:44,160
Speaker 1: the awful ones, But that roth ira is just a

701
00:33:44,200 --> 00:33:47,360
Speaker 1: more flexible account. Uh. And we won't bore you with

702
00:33:47,400 --> 00:33:49,840
Speaker 1: a long explanation of why but taxes are likely going

703
00:33:49,880 --> 00:33:52,120
Speaker 1: to be going up in a couple of years. Uh,

704
00:33:52,160 --> 00:33:55,400
Speaker 1: and so paying taxes now and then never meaning taxed

705
00:33:55,440 --> 00:33:57,800
Speaker 1: on that money ever. Again, we think that's why that

706
00:33:57,920 --> 00:34:00,080
Speaker 1: is the approach that that we would take ourselves. And

707
00:34:00,200 --> 00:34:02,440
Speaker 1: it's not just prognostication on your part. Map You're not

708
00:34:02,480 --> 00:34:05,080
Speaker 1: just like shooting from the hip here. There is an

709
00:34:05,080 --> 00:34:08,800
Speaker 1: actual law that's going to expire in that will raise

710
00:34:09,120 --> 00:34:11,960
Speaker 1: tax rates on a meaningful chunk of the population, and

711
00:34:12,000 --> 00:34:15,120
Speaker 1: so it's wise to plan around that. And so it's

712
00:34:15,160 --> 00:34:17,200
Speaker 1: not just tax rates, though you mentioned the flexibility. I

713
00:34:17,239 --> 00:34:19,640
Speaker 1: think that's important to mention and that stands no matter what.

714
00:34:19,680 --> 00:34:22,680
Speaker 1: That stands, no matter what happens with tax rates moving forward,

715
00:34:23,000 --> 00:34:25,000
Speaker 1: and I totally agree with your assessment. I would also

716
00:34:25,000 --> 00:34:27,120
Speaker 1: I would say yes, Rath first four or three b

717
00:34:27,719 --> 00:34:31,200
Speaker 1: second in her case. But there's a caveat here because

718
00:34:31,200 --> 00:34:33,160
Speaker 1: we need Lauren to make a change on that. Rath

719
00:34:33,239 --> 00:34:35,359
Speaker 1: are right front if she's going to make that her

720
00:34:35,400 --> 00:34:38,839
Speaker 1: number one retirement account. She mentioned quickly in passing there

721
00:34:39,120 --> 00:34:42,560
Speaker 1: that her wrath is with a bank that got that

722
00:34:42,640 --> 00:34:46,200
Speaker 1: might got scared a little singular keywords that she said,

723
00:34:46,280 --> 00:34:48,920
Speaker 1: and I was like, Okay, that's not good. If her

724
00:34:49,000 --> 00:34:51,279
Speaker 1: rath is with the bank, then her four H three

725
00:34:51,280 --> 00:34:54,800
Speaker 1: B is likely a better options. But she can change

726
00:34:54,800 --> 00:34:57,800
Speaker 1: that and it's not terribly difficult. So some banks, actually

727
00:34:57,880 --> 00:35:00,600
Speaker 1: I will say very few, though offered d SIT Retirement

728
00:35:00,600 --> 00:35:03,280
Speaker 1: Accouncil to low fees. Ally for instance, has Ally Invest

729
00:35:03,360 --> 00:35:06,040
Speaker 1: and that's a decent investing product. It's one of the

730
00:35:06,080 --> 00:35:08,120
Speaker 1: few solid ones out there. But for the most part,

731
00:35:08,560 --> 00:35:12,319
Speaker 1: banks are solid for money you want to save, but

732
00:35:12,960 --> 00:35:15,520
Speaker 1: crappy for money you want to invest. You're gonna want

733
00:35:15,520 --> 00:35:18,400
Speaker 1: to do you're investing with a low cost brokerage company

734
00:35:18,560 --> 00:35:20,960
Speaker 1: and you're banking with an online bank, and you don't

735
00:35:21,040 --> 00:35:23,359
Speaker 1: want to mix the two. That's a recipe for paying

736
00:35:23,400 --> 00:35:25,880
Speaker 1: higher fees than you need to. And so yeah, we

737
00:35:25,920 --> 00:35:28,239
Speaker 1: would say move that roth Ira directly to one of

738
00:35:28,239 --> 00:35:30,879
Speaker 1: our phase Vanguard Fidelity SWAB. Those are a few of them.

739
00:35:30,880 --> 00:35:33,359
Speaker 1: There are other good players as well, but those are

740
00:35:33,480 --> 00:35:35,960
Speaker 1: three of the top notch ones who've been around a

741
00:35:35,960 --> 00:35:38,440
Speaker 1: long time. And this is what's known as a trustee

742
00:35:38,440 --> 00:35:41,640
Speaker 1: to trustee transfer. It shouldn't be terribly difficult. If you

743
00:35:41,640 --> 00:35:43,920
Speaker 1: want help. Capitalize is a great company that will help

744
00:35:43,960 --> 00:35:45,480
Speaker 1: you do that. For free. You can go to how

745
00:35:45,520 --> 00:35:48,720
Speaker 1: money dot com slash capitalize and read my review. I

746
00:35:48,760 --> 00:35:50,839
Speaker 1: helped move my wife's four oh one k into an

747
00:35:50,840 --> 00:35:54,640
Speaker 1: IRA capitalized made it super simple. But this is something like,

748
00:35:54,880 --> 00:35:57,319
Speaker 1: we don't want you to keep that roth IRA with

749
00:35:57,400 --> 00:35:59,719
Speaker 1: your bank. If you move it to a low cost

750
00:35:59,800 --> 00:36:03,000
Speaker 1: broke which firm and you're investing in your rock they're

751
00:36:03,120 --> 00:36:05,920
Speaker 1: as opposed to a bank, then it makes complete sense

752
00:36:06,040 --> 00:36:08,399
Speaker 1: to prioritize the roth first. That's right. And also don't

753
00:36:08,440 --> 00:36:11,480
Speaker 1: forget that you can still contribute to your roth IRA

754
00:36:11,640 --> 00:36:15,600
Speaker 1: for last year as well. The limit two is six

755
00:36:15,600 --> 00:36:19,239
Speaker 1: thousand dollars sixty dollars for this year, so that's a

756
00:36:19,239 --> 00:36:22,400
Speaker 1: grand total of twelve dollars. That's a lot of money. Uh,

757
00:36:22,440 --> 00:36:27,360
Speaker 1: So prioritize getting that roth maxed out before April eighteenth,

758
00:36:27,760 --> 00:36:30,919
Speaker 1: and then work on funding your roth IRA for this year.

759
00:36:31,320 --> 00:36:33,239
Speaker 1: And then you asked, you know about how much you

760
00:36:33,280 --> 00:36:35,799
Speaker 1: should be stalking away in total in this case, then

761
00:36:35,840 --> 00:36:39,000
Speaker 1: how many additional dollars should you be investing within your

762
00:36:39,120 --> 00:36:42,160
Speaker 1: four three B That's a tough question. In an ideal world,

763
00:36:42,200 --> 00:36:44,160
Speaker 1: we would love for you to max out your roth

764
00:36:44,360 --> 00:36:47,280
Speaker 1: IRA every year and then also get some money sucked

765
00:36:47,320 --> 00:36:50,239
Speaker 1: away in that four three B as well. Um, and

766
00:36:50,280 --> 00:36:52,640
Speaker 1: I know this is a tall ask, a tall order,

767
00:36:52,960 --> 00:36:55,120
Speaker 1: but we would love for you to max out that

768
00:36:55,200 --> 00:36:58,000
Speaker 1: fourth three B if possible. Uh. And the reason it's

769
00:36:58,040 --> 00:37:00,600
Speaker 1: a a very big ask is because that is a

770
00:37:00,640 --> 00:37:04,960
Speaker 1: total just in the fourth three B that's for this year.

771
00:37:05,000 --> 00:37:08,040
Speaker 1: For to max out both those accounts in any single year,

772
00:37:09,160 --> 00:37:12,080
Speaker 1: at least that would be dollars, which is just more

773
00:37:12,120 --> 00:37:15,440
Speaker 1: than most people. I don't know, Lauren might she might

774
00:37:15,440 --> 00:37:18,440
Speaker 1: be really getting after it an incredible savings right because

775
00:37:18,440 --> 00:37:21,240
Speaker 1: she her you know, her cost of living is, she's

776
00:37:21,360 --> 00:37:23,400
Speaker 1: really keeping it in check. It's just important that we

777
00:37:23,440 --> 00:37:27,520
Speaker 1: all have limitations. And it's maxing out multiple retirement accounts.

778
00:37:27,520 --> 00:37:30,320
Speaker 1: It's just not uh in the realm of possibility for

779
00:37:30,360 --> 00:37:32,960
Speaker 1: most people exactly. But if Lauren, if you're if you're

780
00:37:33,000 --> 00:37:34,920
Speaker 1: asking it, and hey, I've got all this money, how

781
00:37:35,000 --> 00:37:37,600
Speaker 1: much should I be investing? Go for it? You can

782
00:37:37,640 --> 00:37:40,000
Speaker 1: do it. More power to you. But so much depends

783
00:37:40,000 --> 00:37:42,120
Speaker 1: on your current financial situation and just some of the

784
00:37:42,120 --> 00:37:44,560
Speaker 1: other goals that you that you have, right and if

785
00:37:44,600 --> 00:37:46,440
Speaker 1: maybe you're put saving up for a down payment for

786
00:37:46,440 --> 00:37:48,320
Speaker 1: a home, or maybe there's a bunch of travel that

787
00:37:48,360 --> 00:37:50,479
Speaker 1: you want to do, or or even a certain amount

788
00:37:50,520 --> 00:37:52,440
Speaker 1: of money that you're looking to give away. But if

789
00:37:52,480 --> 00:37:55,120
Speaker 1: you're excited to invest for your future and you have

790
00:37:55,200 --> 00:37:57,200
Speaker 1: more money that you want growing for you that goes

791
00:37:57,360 --> 00:38:01,200
Speaker 1: above and beyond just that ROTH contribut limit and socking

792
00:38:01,200 --> 00:38:03,160
Speaker 1: it away in a four three B, that is a

793
00:38:03,200 --> 00:38:05,239
Speaker 1: smart call to go ahead and take that, get that

794
00:38:05,280 --> 00:38:07,600
Speaker 1: tax break, throw some of those pre tax dollars into

795
00:38:07,640 --> 00:38:10,160
Speaker 1: that four three B, and even though you're not necessarily

796
00:38:10,200 --> 00:38:13,200
Speaker 1: getting a match, that can still be a fantastic move

797
00:38:13,239 --> 00:38:16,239
Speaker 1: for you. And you're creating two different tax buckets that

798
00:38:16,280 --> 00:38:20,600
Speaker 1: will and you're just in overall sacking more money away

799
00:38:20,600 --> 00:38:22,560
Speaker 1: for your future, which is a good thing. You don't

800
00:38:22,600 --> 00:38:25,000
Speaker 1: want to do with the detriment of leading equality life

801
00:38:25,239 --> 00:38:28,279
Speaker 1: now right You don't wanna cut back so hard to

802
00:38:28,280 --> 00:38:30,279
Speaker 1: say for your future that you're missing out on things

803
00:38:30,360 --> 00:38:31,920
Speaker 1: that matter in the here and now. You know, want

804
00:38:31,920 --> 00:38:33,880
Speaker 1: to pick those craft beer equivalents in your life so

805
00:38:33,920 --> 00:38:37,759
Speaker 1: that you're able to enjoy your life right now while

806
00:38:37,800 --> 00:38:40,080
Speaker 1: you're saving an investing wealth for your future lives In Texas,

807
00:38:40,080 --> 00:38:44,400
Speaker 1: maybe her craft beer equivalent is some brisket barbecue that

808
00:38:44,480 --> 00:38:47,880
Speaker 1: would be awesome, like brisket and beer are like tops

809
00:38:47,920 --> 00:38:49,879
Speaker 1: for me for sure. But let's get to that last

810
00:38:49,960 --> 00:38:51,799
Speaker 1: question that we that we're gonna take on this episode. Matt,

811
00:38:51,880 --> 00:38:56,080
Speaker 1: this one is from a listener who is moving to

812
00:38:56,160 --> 00:38:58,880
Speaker 1: Japan and he's not sure if landlording makes sense in

813
00:38:58,920 --> 00:39:01,520
Speaker 1: that case. Hey, Matt and Joel. My name is j

814
00:39:01,680 --> 00:39:03,439
Speaker 1: C from Virginia Beach and I have a question about

815
00:39:03,440 --> 00:39:06,719
Speaker 1: rental property loans. I'm moving from my current home with

816
00:39:06,840 --> 00:39:09,400
Speaker 1: orders to Japan next year, and we plan on renting

817
00:39:09,400 --> 00:39:11,919
Speaker 1: out our current house as our first rental property while

818
00:39:11,920 --> 00:39:14,480
Speaker 1: we are living overseas for the next few years, probably

819
00:39:14,560 --> 00:39:18,200
Speaker 1: until around We intend to move back to the States

820
00:39:18,200 --> 00:39:20,760
Speaker 1: after my tour in Japan and buy another home wherever

821
00:39:20,800 --> 00:39:23,319
Speaker 1: we're stationed next, whether it's a new state or back

822
00:39:23,320 --> 00:39:25,879
Speaker 1: in Virginia, while continuing to rent out our current home.

823
00:39:26,440 --> 00:39:28,399
Speaker 1: We use the v A loan on two point five

824
00:39:28,400 --> 00:39:30,840
Speaker 1: pc interest rates buy our house and wondering if we

825
00:39:30,880 --> 00:39:33,560
Speaker 1: should refinance to a conventional loan so we can use

826
00:39:33,600 --> 00:39:35,719
Speaker 1: the v A loan for our next home upon our

827
00:39:35,719 --> 00:39:39,520
Speaker 1: return from Japan, or continue the loan and mortgage we

828
00:39:39,640 --> 00:39:42,040
Speaker 1: have and use a conventional or fh A loan to

829
00:39:42,040 --> 00:39:45,480
Speaker 1: buy our next house. Little benefits to REFI outweigh the

830
00:39:45,520 --> 00:39:47,759
Speaker 1: costs that come with it. When should I REFI? If

831
00:39:47,760 --> 00:39:50,319
Speaker 1: I do it, I'm only concerned that the past of him.

832
00:39:50,320 --> 00:39:52,879
Speaker 1: Can we potentially earn from running our house those first

833
00:39:52,920 --> 00:39:56,040
Speaker 1: few years would go straight to helping with the refinancing costs,

834
00:39:56,560 --> 00:39:58,759
Speaker 1: but also thinking about the fact I'd save myself the

835
00:39:58,800 --> 00:40:00,800
Speaker 1: down payment on our next home. They find eligible to

836
00:40:00,840 --> 00:40:02,960
Speaker 1: use the v A alone again, since I believe there's

837
00:40:03,000 --> 00:40:06,200
Speaker 1: limitations after you use it the first time, we will

838
00:40:06,239 --> 00:40:08,239
Speaker 1: be using our property manager while we are gone in

839
00:40:08,320 --> 00:40:10,000
Speaker 1: upon return to the States, would like to buy a

840
00:40:10,080 --> 00:40:12,239
Speaker 1: duplex and running out the other unit as our second

841
00:40:12,239 --> 00:40:15,239
Speaker 1: rental property. Thanks for taking up my question, and if

842
00:40:15,280 --> 00:40:16,919
Speaker 1: you ever come up to the Sun five seven area,

843
00:40:17,040 --> 00:40:19,200
Speaker 1: we would love to recommend the awesome breweries here. Thanks

844
00:40:20,080 --> 00:40:22,480
Speaker 1: j C. First of all, thank you for your service

845
00:40:22,480 --> 00:40:25,960
Speaker 1: to our country. Uh And secondly, I love that you're

846
00:40:25,960 --> 00:40:28,160
Speaker 1: going down this path of becoming a landlord, and not

847
00:40:28,320 --> 00:40:31,400
Speaker 1: just that, but you are planning to house hack with

848
00:40:31,520 --> 00:40:35,520
Speaker 1: your next home purchase, which is an awesome approach. It's killer.

849
00:40:36,160 --> 00:40:38,799
Speaker 1: We've always said that going in that direction when you're young,

850
00:40:39,040 --> 00:40:41,440
Speaker 1: how that can change your financial future, I think more

851
00:40:41,480 --> 00:40:45,600
Speaker 1: than almost any other decision, allowing you to to supercharge

852
00:40:45,600 --> 00:40:49,040
Speaker 1: your wealth building in a massive way. And for everyone

853
00:40:49,080 --> 00:40:51,520
Speaker 1: else out there who's not in the military, who may

854
00:40:51,520 --> 00:40:53,759
Speaker 1: not be as familiar what a with what a v

855
00:40:53,880 --> 00:40:57,280
Speaker 1: A loan is. It's alone that's guaranteed by the Department

856
00:40:57,320 --> 00:41:01,040
Speaker 1: of Veterans Affairs, thus the v A part uh and

857
00:41:01,080 --> 00:41:04,600
Speaker 1: it often has generous benefits like not having to come

858
00:41:04,680 --> 00:41:07,520
Speaker 1: up with a down payment. It's a sweet little park. Yeah,

859
00:41:07,560 --> 00:41:12,279
Speaker 1: and our country offers generous benefits to military military service members, Matt.

860
00:41:12,400 --> 00:41:14,400
Speaker 1: We actually talked about that in great detail back with

861
00:41:14,440 --> 00:41:17,600
Speaker 1: Doug Norman, because there's just a lot of things that

862
00:41:17,920 --> 00:41:20,480
Speaker 1: even a lot of people who are in the armed forces,

863
00:41:20,560 --> 00:41:22,600
Speaker 1: no matter what branchs they are in, they don't know

864
00:41:22,800 --> 00:41:25,200
Speaker 1: about the parks that are available to them. And so

865
00:41:25,360 --> 00:41:28,520
Speaker 1: I would encourage anybody who is serving or know somebody.

866
00:41:28,760 --> 00:41:31,239
Speaker 1: That's an episode back back. I forget what number it was,

867
00:41:31,280 --> 00:41:32,480
Speaker 1: We have to go back and look, but that's an

868
00:41:32,520 --> 00:41:35,160
Speaker 1: episode that's worth listening to because there's so many things

869
00:41:35,200 --> 00:41:38,399
Speaker 1: worth taking advantage of if you are a service member.

870
00:41:38,480 --> 00:41:41,719
Speaker 1: V A loans being one of the best perks available

871
00:41:42,080 --> 00:41:44,839
Speaker 1: and uh so, yeah, we'll get to that whether whether

872
00:41:44,920 --> 00:41:46,680
Speaker 1: or not you should refinance in just a second, but

873
00:41:47,280 --> 00:41:49,319
Speaker 1: I want to quickly touch on the property manager thing.

874
00:41:49,640 --> 00:41:52,360
Speaker 1: And I'm so glad that j. C. Ment mentioned that

875
00:41:52,400 --> 00:41:54,760
Speaker 1: he's planning on hiring someone to help manage this property,

876
00:41:54,800 --> 00:41:58,840
Speaker 1: because yeah, when you're talking about doing this from Japan,

877
00:41:59,239 --> 00:42:01,920
Speaker 1: which is a fourteen our time difference, that'd be really tough.

878
00:42:02,000 --> 00:42:04,560
Speaker 1: It'd be tough to be a good landlord in those circumstances.

879
00:42:04,600 --> 00:42:06,960
Speaker 1: And so, uh it's you're more likely to be able

880
00:42:07,000 --> 00:42:08,800
Speaker 1: to get those uh, those texts in the middle of

881
00:42:08,800 --> 00:42:13,160
Speaker 1: the night, because hey, it's the middle of the right Yeah, exactly, exactly.

882
00:42:13,280 --> 00:42:14,800
Speaker 1: And it's one thing to manage that property from a

883
00:42:14,800 --> 00:42:16,759
Speaker 1: couple of counties over or even just a country, but

884
00:42:17,239 --> 00:42:20,280
Speaker 1: from uh yeah, halfway around the world, it's a different

885
00:42:20,320 --> 00:42:22,560
Speaker 1: ball game. And so a property manager, we would say,

886
00:42:22,600 --> 00:42:25,200
Speaker 1: just make sure you vet them thoroughly and you get

887
00:42:25,200 --> 00:42:28,000
Speaker 1: someone who's experienced, because you want to find someone who

888
00:42:28,160 --> 00:42:30,600
Speaker 1: who knows what they're doing. They are going to take

889
00:42:30,600 --> 00:42:32,520
Speaker 1: a cut of the rent amount often in the realm

890
00:42:32,560 --> 00:42:35,120
Speaker 1: of ten, but it's well worth it, and and make

891
00:42:35,160 --> 00:42:38,280
Speaker 1: sure that you're running the numbers with this expense in mind,

892
00:42:38,800 --> 00:42:40,520
Speaker 1: but again, take the time to find someone who's going

893
00:42:40,600 --> 00:42:43,080
Speaker 1: to treat the property and your tenants the way that

894
00:42:43,160 --> 00:42:45,560
Speaker 1: you would. You don't want to just hire the first

895
00:42:45,560 --> 00:42:47,880
Speaker 1: person in the Yellow Pages, not that anyone looks at

896
00:42:47,880 --> 00:42:50,040
Speaker 1: the Yellow Pages anymore, but you want to make sure

897
00:42:50,120 --> 00:42:52,719
Speaker 1: you interview a few folks, you get some testimonials from

898
00:42:52,719 --> 00:42:54,799
Speaker 1: other people who have used them, so you can find

899
00:42:54,800 --> 00:42:58,719
Speaker 1: a property manager that makes sense for the property that yeah,

900
00:42:58,760 --> 00:43:00,960
Speaker 1: you're planning on running out right, and so j C.

901
00:43:01,160 --> 00:43:02,840
Speaker 1: Let's get to the heart of your question. Should you

902
00:43:02,880 --> 00:43:08,000
Speaker 1: refinance this two and a half percent loan? No freaking way. Uh,

903
00:43:08,040 --> 00:43:11,440
Speaker 1: you've got like a unicorn rate. It doesn't exist anymore.

904
00:43:11,440 --> 00:43:14,960
Speaker 1: It's a rare and dying breed, and we're not likely

905
00:43:14,960 --> 00:43:18,120
Speaker 1: going to see that for some time potentially. Ever, only

906
00:43:18,239 --> 00:43:20,280
Speaker 1: time will tell whether or not there's sub three percent

907
00:43:20,320 --> 00:43:22,880
Speaker 1: mortgage rates will be something that we get to see again.

908
00:43:23,160 --> 00:43:25,319
Speaker 1: And Plus, if you're looking to refinance, you'll be doing

909
00:43:25,360 --> 00:43:29,440
Speaker 1: that now as an investor into a conventional loan, meaning

910
00:43:29,680 --> 00:43:31,760
Speaker 1: that the interest rate it wouldn't be in the market

911
00:43:31,840 --> 00:43:34,360
Speaker 1: rate of like maybe around six percent, which is I

912
00:43:34,400 --> 00:43:36,400
Speaker 1: think when it's around these days. It would likely be

913
00:43:36,480 --> 00:43:39,440
Speaker 1: even higher, sometimes up to a point higher refinancing. It

914
00:43:39,480 --> 00:43:43,040
Speaker 1: also comes with additional costs UH, closing costs in addition

915
00:43:43,320 --> 00:43:45,400
Speaker 1: to giving up your your POSH rate and some of

916
00:43:45,440 --> 00:43:47,879
Speaker 1: those other v A loan perks UH, So we would

917
00:43:47,920 --> 00:43:51,719
Speaker 1: recommend for you to most definitely leave that loan intact.

918
00:43:52,120 --> 00:43:54,880
Speaker 1: You know, having that epically low rate's gonna lead to

919
00:43:54,920 --> 00:43:57,319
Speaker 1: increased profits, which means then you'll be able to to

920
00:43:57,360 --> 00:44:00,640
Speaker 1: build up a cash lump sum fairly quickly for that

921
00:44:00,719 --> 00:44:03,680
Speaker 1: next real estate purchase if that isn't the cards for you,

922
00:44:03,800 --> 00:44:06,560
Speaker 1: or whatever, you know, whatever other additional financial goal you

923
00:44:06,640 --> 00:44:08,920
Speaker 1: might have, means you're going to have more of a

924
00:44:08,960 --> 00:44:11,279
Speaker 1: profit margin so that you can yeah, continue to build

925
00:44:11,320 --> 00:44:13,719
Speaker 1: up that savings you're right map for that next real

926
00:44:13,840 --> 00:44:15,920
Speaker 1: estate investment you want to make. And on top of that,

927
00:44:16,120 --> 00:44:18,279
Speaker 1: j C it's important to mention there's often a lot

928
00:44:18,280 --> 00:44:20,839
Speaker 1: of confusion about how you can use a v A loan.

929
00:44:21,600 --> 00:44:23,560
Speaker 1: The thing is you actually have the ability to utilize

930
00:44:23,560 --> 00:44:26,480
Speaker 1: that v A loan again on an additional property as

931
00:44:26,520 --> 00:44:29,160
Speaker 1: long as it's going to be your primary residence. You're

932
00:44:29,160 --> 00:44:32,680
Speaker 1: not necessarily limited to a certain number of properties that

933
00:44:32,719 --> 00:44:34,440
Speaker 1: you can purchase with a v A loan, there's just

934
00:44:34,520 --> 00:44:37,319
Speaker 1: a limit on what's called the entitlement that you have

935
00:44:37,440 --> 00:44:39,920
Speaker 1: access to. And so the standard v A loan limit

936
00:44:40,040 --> 00:44:42,840
Speaker 1: is I believe seven hundred and twenty six thousand dollars

937
00:44:43,160 --> 00:44:46,640
Speaker 1: like plus some change, yeah, like seven or something like that.

938
00:44:46,800 --> 00:44:49,000
Speaker 1: But it can be higher in certain regions based on

939
00:44:49,200 --> 00:44:51,680
Speaker 1: cost of living. So in certain parts of California it's

940
00:44:51,719 --> 00:44:53,640
Speaker 1: more than a million dollars, right, So it just depends.

941
00:44:53,640 --> 00:44:56,719
Speaker 1: In parts of Virginia, actually, yeah, because they're expensive there,

942
00:44:56,719 --> 00:44:58,719
Speaker 1: it's closer to a million as well. Sure, So the

943
00:44:59,000 --> 00:45:02,799
Speaker 1: v A loans, they the limits vary by county, so

944
00:45:02,960 --> 00:45:04,680
Speaker 1: where you'll end up purchasing in the future has a

945
00:45:04,680 --> 00:45:07,880
Speaker 1: pretty big impact on you know, if you're gonna have

946
00:45:07,920 --> 00:45:09,719
Speaker 1: to come to closing with the down payment or not,

947
00:45:10,080 --> 00:45:12,560
Speaker 1: or if you're going to have plenty of v A

948
00:45:12,680 --> 00:45:16,040
Speaker 1: loan entitlement left for this next home purchase. Will link

949
00:45:16,080 --> 00:45:18,680
Speaker 1: to the table that lists out those limits county by county,

950
00:45:18,719 --> 00:45:20,920
Speaker 1: but that is we'll put those in our show notes

951
00:45:20,960 --> 00:45:22,399
Speaker 1: at how the Money dot com. But that's kind of

952
00:45:22,480 --> 00:45:24,239
Speaker 1: what you're gonna want to look at because that will

953
00:45:24,280 --> 00:45:27,160
Speaker 1: help you see whether you're you and I'll help you

954
00:45:27,200 --> 00:45:30,560
Speaker 1: determine a budget really also for the next property you

955
00:45:30,600 --> 00:45:33,399
Speaker 1: plan on buying a couple of years down the road, exactly. Yeah,

956
00:45:33,400 --> 00:45:36,160
Speaker 1: this is an awesome benefit for those who served our country.

957
00:45:36,200 --> 00:45:38,799
Speaker 1: And how much you have left will depend on how

958
00:45:38,840 --> 00:45:40,960
Speaker 1: much of your entitlement you've already used, as well as

959
00:45:41,040 --> 00:45:44,080
Speaker 1: where you're going to purchase in the future. But j C,

960
00:45:44,239 --> 00:45:46,759
Speaker 1: you've got an incredible plan moving forward. You never know

961
00:45:46,800 --> 00:45:49,279
Speaker 1: what the future holds, so we would recommend take these

962
00:45:49,320 --> 00:45:52,840
Speaker 1: years abroad to just intentionally sock away money to fund

963
00:45:52,920 --> 00:45:55,399
Speaker 1: your your next financial goal, you know, stashing that money

964
00:45:55,400 --> 00:45:59,040
Speaker 1: inside a high yield savings account or maybe maybe even

965
00:45:59,080 --> 00:46:02,400
Speaker 1: I bonds, right, so that you are prepared to continue

966
00:46:02,640 --> 00:46:04,920
Speaker 1: to build that rental portfolio up. You know, when you

967
00:46:04,960 --> 00:46:08,560
Speaker 1: come back Stateside. You mentioned this is your first investment property,

968
00:46:08,600 --> 00:46:10,400
Speaker 1: your first rental property, so it sounds like this is

969
00:46:10,440 --> 00:46:13,840
Speaker 1: something that you're planning to continue moving forward. Housing prices

970
00:46:14,040 --> 00:46:16,440
Speaker 1: have gone up in recent years, but that does not

971
00:46:16,560 --> 00:46:20,120
Speaker 1: mean that this can't be an incredible financial path for

972
00:46:20,160 --> 00:46:22,640
Speaker 1: you moving forward. For sure. Yeah, you could totally use

973
00:46:23,080 --> 00:46:24,560
Speaker 1: you know, if the numbers make sense and if you

974
00:46:24,600 --> 00:46:27,440
Speaker 1: have enough entitlement left on that v A loan limit.

975
00:46:27,760 --> 00:46:30,440
Speaker 1: You might be able to buy that duplex, live in

976
00:46:30,480 --> 00:46:32,480
Speaker 1: half of it for a while, and and then have

977
00:46:32,520 --> 00:46:34,319
Speaker 1: been saving up over those couple of years and then

978
00:46:34,320 --> 00:46:37,000
Speaker 1: buy another property, like just accelerating your ability to make

979
00:46:37,040 --> 00:46:39,719
Speaker 1: progress and repeat. Yeah for sure, So the v A

980
00:46:39,760 --> 00:46:42,239
Speaker 1: loan it sounds like it looks like depending on what

981
00:46:42,239 --> 00:46:44,960
Speaker 1: you paid for that first for that first home, you

982
00:46:44,960 --> 00:46:48,479
Speaker 1: you'll probably have some money left over, some eligibility left.

983
00:46:48,719 --> 00:46:50,360
Speaker 1: But yeah, that depends on where you live, what you

984
00:46:50,360 --> 00:46:52,719
Speaker 1: spend on the first one, all the above, So best

985
00:46:52,719 --> 00:46:55,399
Speaker 1: of luck. J C. Thanks again for your service and

986
00:46:55,440 --> 00:46:58,279
Speaker 1: thanks for submitting your question. All right, Matt, let's move on.

987
00:46:58,360 --> 00:46:59,560
Speaker 1: Let's get back to the beer that we had on

988
00:46:59,600 --> 00:47:02,680
Speaker 1: this episod. This one was called thick Hydra. It was

989
00:47:02,960 --> 00:47:07,520
Speaker 1: a sour ale with passion fruit, mango, BlackBerry, and the

990
00:47:07,520 --> 00:47:09,840
Speaker 1: most random beer ingredient we've ever had to beer, probably

991
00:47:10,040 --> 00:47:12,080
Speaker 1: funnel cake. Fun o cake? Were you picking up on

992
00:47:12,120 --> 00:47:14,720
Speaker 1: the Oh, by the way, this is from Mortalis, which

993
00:47:14,880 --> 00:47:17,040
Speaker 1: I don't think we've ever So we've talked about this

994
00:47:17,080 --> 00:47:20,000
Speaker 1: brewery before because they make really expensive beers, very expensive.

995
00:47:20,280 --> 00:47:22,600
Speaker 1: It's like thirty four times. Yeah, so I bought a

996
00:47:22,680 --> 00:47:24,879
Speaker 1: single can because I was curious because they were selling

997
00:47:24,920 --> 00:47:26,359
Speaker 1: it in singles. I was like, there's no way buying

998
00:47:26,360 --> 00:47:28,160
Speaker 1: a four pack. And I'm glad I didn't. I will say,

999
00:47:28,160 --> 00:47:31,759
Speaker 1: because it's a good beer. It's good, it's not four pack.

1000
00:47:32,239 --> 00:47:35,799
Speaker 1: So it reminds me a lot of tripping animals. They've

1001
00:47:35,840 --> 00:47:38,280
Speaker 1: got a lot of fruited sours that have a whole

1002
00:47:38,320 --> 00:47:41,000
Speaker 1: lot of fruit in them, as well as what's this

1003
00:47:41,320 --> 00:47:45,759
Speaker 1: coastal Sunshine? What brewery makes those beers? Was that Humble Forager? Yes, yea,

1004
00:47:46,200 --> 00:47:47,959
Speaker 1: it kind of reminds me of those as well, which

1005
00:47:48,280 --> 00:47:51,719
Speaker 1: both of those breweries have more expensive beers, but not

1006
00:47:51,800 --> 00:47:54,120
Speaker 1: this expensive. And I think a part of why they're

1007
00:47:54,160 --> 00:47:56,760
Speaker 1: charging so much is because of the quantity of fruit

1008
00:47:57,120 --> 00:47:59,280
Speaker 1: that's in this beer. And so I made the missing

1009
00:47:59,280 --> 00:48:03,920
Speaker 1: funnel cake cheap. But I a party. I poured almost

1010
00:48:04,000 --> 00:48:05,799
Speaker 1: the first half of the beer into your glass, and

1011
00:48:05,840 --> 00:48:09,040
Speaker 1: then I'll start pouring mine, and it's it really slowed down.

1012
00:48:10,880 --> 00:48:15,080
Speaker 1: The viscosity of the second half of this beer was impressive.

1013
00:48:15,160 --> 00:48:18,200
Speaker 1: Yours looked like the smoothie that my wife makes from

1014
00:48:18,200 --> 00:48:20,200
Speaker 1: my kids in the morning. Uh. And so we actually

1015
00:48:20,200 --> 00:48:22,320
Speaker 1: we traded like halfway through and you sampled mine, I

1016
00:48:22,360 --> 00:48:25,480
Speaker 1: sampled juice. Yours definitely had a lot more effervescence going on.

1017
00:48:25,800 --> 00:48:27,759
Speaker 1: Mine had a lot more of the fruit. So it's

1018
00:48:27,760 --> 00:48:31,120
Speaker 1: like pulpy almost. I definitely feel like I got my

1019
00:48:31,120 --> 00:48:34,120
Speaker 1: my my serving of fruit for today, and let's be honest,

1020
00:48:34,160 --> 00:48:35,799
Speaker 1: that's the way to get it in your beer. But

1021
00:48:35,840 --> 00:48:37,600
Speaker 1: I will say I did. I definitely enjoyed this beer.

1022
00:48:37,600 --> 00:48:40,279
Speaker 1: I enjoyed all of those flavors altogether. And honestly, now

1023
00:48:40,400 --> 00:48:42,920
Speaker 1: I'm smelling it like you can smell the can. You

1024
00:48:42,960 --> 00:48:45,000
Speaker 1: can pick up some of those like funnel cake pastry

1025
00:48:45,239 --> 00:48:47,879
Speaker 1: notes that I didn't taste as much in the actual beer. Yeah,

1026
00:48:47,920 --> 00:48:49,359
Speaker 1: it was just there a little bit on the back

1027
00:48:49,440 --> 00:48:52,160
Speaker 1: end picking up Maybe I'll touch more of that cinnamon,

1028
00:48:52,280 --> 00:48:55,200
Speaker 1: some of that like buttery batter action going. Yeah, the

1029
00:48:55,840 --> 00:48:57,880
Speaker 1: sugar from the fruits was definitely noticeable, Like it was

1030
00:48:57,880 --> 00:48:59,560
Speaker 1: sweet from that regard, but I got you think of

1031
00:48:59,560 --> 00:49:01,560
Speaker 1: like powder sugar. Yeah, but there was a little bit

1032
00:49:01,600 --> 00:49:03,640
Speaker 1: of that powder sugar funnel cake sweetness too. So it's

1033
00:49:03,680 --> 00:49:06,080
Speaker 1: like this comma was like, but it wasn't overly sweet.

1034
00:49:06,360 --> 00:49:10,640
Speaker 1: It wasn't my favorite beer. Definitely not worth how expensive

1035
00:49:10,640 --> 00:49:12,480
Speaker 1: it is. I don't think for the price is that

1036
00:49:12,520 --> 00:49:14,960
Speaker 1: only make like these massive freak things. So I don't know,

1037
00:49:14,960 --> 00:49:16,480
Speaker 1: but I haven't had any of that. I would. I'm

1038
00:49:16,600 --> 00:49:18,200
Speaker 1: willing to try some of the other stuff, like if

1039
00:49:18,239 --> 00:49:20,160
Speaker 1: a good n p A or a stout something like that.

1040
00:49:20,239 --> 00:49:21,839
Speaker 1: It was a very good beer, but I guess when

1041
00:49:21,880 --> 00:49:24,600
Speaker 1: we're talking about value, which is something we care about,

1042
00:49:24,800 --> 00:49:27,359
Speaker 1: I don't know that the value was there even though

1043
00:49:27,400 --> 00:49:30,680
Speaker 1: it was solid beer offering a good sour. It's just

1044
00:49:30,880 --> 00:49:32,600
Speaker 1: probably there's probably a lot of other beers i'd pick

1045
00:49:32,680 --> 00:49:35,040
Speaker 1: up before this one exactly. Yeah, man, I could not

1046
00:49:35,080 --> 00:49:36,839
Speaker 1: agree more. But that is going to be it for

1047
00:49:36,840 --> 00:49:39,560
Speaker 1: this episode. You can find some of the different resources

1048
00:49:39,600 --> 00:49:41,680
Speaker 1: we mentioned during this episode up in our show notes

1049
00:49:41,719 --> 00:49:44,520
Speaker 1: at how to money dot com, including those v A

1050
00:49:44,600 --> 00:49:48,440
Speaker 1: loan limits sorted out by county. And I know you

1051
00:49:48,480 --> 00:49:51,200
Speaker 1: are so used to hearing podcast hosts asked for this,

1052
00:49:51,480 --> 00:49:53,440
Speaker 1: but if you have not left us a review or

1053
00:49:53,480 --> 00:49:56,480
Speaker 1: a solid rating wherever it is that you listen to podcasts,

1054
00:49:56,520 --> 00:49:59,000
Speaker 1: it really does help the show. Ultimately, it allows us

1055
00:49:59,000 --> 00:50:01,279
Speaker 1: to continue to create this podcast. Boor and Buffett said

1056
00:50:01,280 --> 00:50:03,040
Speaker 1: he wouldn't come on until we got five thousand reviews.

1057
00:50:03,360 --> 00:50:05,000
Speaker 1: So get on a guys world, the world, the past.

1058
00:50:05,760 --> 00:50:08,640
Speaker 1: We're more than halfway there, so but let's hope he

1059
00:50:08,719 --> 00:50:11,759
Speaker 1: makes it until we get to that point. Oh I

1060
00:50:11,800 --> 00:50:15,800
Speaker 1: love him, but he's old. Charlie Munger just turned ninety nine. Unbelievable, amazing,

1061
00:50:16,000 --> 00:50:17,800
Speaker 1: but all right. That's gonna do it for this episode

1062
00:50:17,880 --> 00:50:20,839
Speaker 1: until next time. Best Friends Out and best Friends Out