1
00:00:00,200 --> 00:00:03,120
Speaker 1: Welcome to Head of Money. I'm Joel, I'm Matt.

2
00:00:03,279 --> 00:00:12,360
Speaker 2: Today we're answering your listener questions.

3
00:00:24,440 --> 00:00:26,599
Speaker 1: That's right, buddy, so let's get to it. We're gonna

4
00:00:26,640 --> 00:00:30,400
Speaker 1: hear from a listener who's asking about BNPL and we're

5
00:00:30,400 --> 00:00:33,040
Speaker 1: not talking about buy now, pay later. We're talking about

6
00:00:33,080 --> 00:00:36,680
Speaker 1: baby now, pay later. He snap new acronym. What could

7
00:00:36,720 --> 00:00:40,000
Speaker 1: go wrong? Why not? If that's something that they're offering.

8
00:00:40,000 --> 00:00:42,720
Speaker 1: That's what this listener is asking. We'll get to another

9
00:00:42,800 --> 00:00:46,240
Speaker 1: listener who's thinking about forcing some equity into his home

10
00:00:46,720 --> 00:00:50,200
Speaker 1: via a basement build out. We'll give our thoughts there.

11
00:00:50,600 --> 00:00:53,560
Speaker 1: And another listener she's in a tough spot. She's trying

12
00:00:53,600 --> 00:00:57,240
Speaker 1: to choose between saving some money versus paying off some

13
00:00:57,600 --> 00:01:00,200
Speaker 1: high interest rate credit cards. We'll share our thoughts there.

14
00:01:00,440 --> 00:01:03,320
Speaker 1: Plus we've got plenty more to get to today as well, buddy. Yeah,

15
00:01:03,360 --> 00:01:05,200
Speaker 1: all right, quick frugal or cheap for you? Though, before

16
00:01:05,240 --> 00:01:07,320
Speaker 1: we dive in, you know I love frugler cheap.

17
00:01:07,360 --> 00:01:09,080
Speaker 2: I know you do so, and I think I know

18
00:01:09,120 --> 00:01:11,200
Speaker 2: where you stand on this actually, because I was trying

19
00:01:11,200 --> 00:01:13,720
Speaker 2: to convince my wife that she wants some new tennis

20
00:01:13,720 --> 00:01:17,120
Speaker 2: shoes at but uh, the tin isshues are expensive, and

21
00:01:17,200 --> 00:01:18,840
Speaker 2: occasionally I'll wait for a sale to pop up, but

22
00:01:18,880 --> 00:01:19,720
Speaker 2: she was like, I need them soon.

23
00:01:19,800 --> 00:01:21,680
Speaker 1: Can you help me find a good deal. We're any

24
00:01:21,720 --> 00:01:23,959
Speaker 1: good deals to be had on the new version? Yeah?

25
00:01:24,080 --> 00:01:24,920
Speaker 1: Is that what she was saying?

26
00:01:25,240 --> 00:01:28,040
Speaker 2: Whereas me typically I load up when there's a sale.

27
00:01:28,080 --> 00:01:31,960
Speaker 2: I literally have like three boxes in my closet really

28
00:01:32,080 --> 00:01:33,640
Speaker 2: for the next pair of shoes to come down the pike.

29
00:01:33,640 --> 00:01:35,199
Speaker 2: When they're on sale. I get them and they're fresh,

30
00:01:35,200 --> 00:01:37,360
Speaker 2: and they've you've never worn, ever worn? Oh my god, yes,

31
00:01:37,640 --> 00:01:42,160
Speaker 2: just ready. You're like a borderline tissue order. So are

32
00:01:42,200 --> 00:01:43,400
Speaker 2: you talking about this? When I get a pair of

33
00:01:43,440 --> 00:01:45,520
Speaker 2: running shoes for like twenty five bucks that it's pretty

34
00:01:45,560 --> 00:01:47,200
Speaker 2: solid that they're.

35
00:01:47,000 --> 00:01:49,040
Speaker 1: Normally one hundred bucks or wh whatever. I'm going to

36
00:01:49,080 --> 00:01:51,640
Speaker 1: load up and twenty five dollars really yeah? Cheap? Yeah?

37
00:01:51,720 --> 00:01:53,760
Speaker 1: We kind of like I can log into my what

38
00:01:53,800 --> 00:01:56,000
Speaker 1: kind of heads are you running around it? I can

39
00:01:56,040 --> 00:01:58,160
Speaker 1: log into the back end of the site and show

40
00:01:58,200 --> 00:02:00,840
Speaker 1: you mighty cow recent orders. That's the affordable shoes. Are

41
00:02:00,840 --> 00:02:03,600
Speaker 1: you referring to the conversation we had at pizza movie night? Yeah?

42
00:02:03,720 --> 00:02:04,080
Speaker 1: Last week?

43
00:02:04,120 --> 00:02:09,120
Speaker 2: Okay, So okay, so you actually think helps convince Emily

44
00:02:09,200 --> 00:02:11,600
Speaker 2: that used pair of shoes I gently use pair of

45
00:02:11,600 --> 00:02:13,120
Speaker 2: shoes on eBay was the cause?

46
00:02:13,440 --> 00:02:15,600
Speaker 1: Did she say yes, yeah, oh that's great. So what

47
00:02:15,639 --> 00:02:17,160
Speaker 1: do you think, Well, she was so she was pushing

48
00:02:17,200 --> 00:02:20,919
Speaker 1: back against the idea of getting a pair of used shoes.

49
00:02:21,440 --> 00:02:24,959
Speaker 1: And this is something I've done multiple times. Kate's done

50
00:02:24,960 --> 00:02:26,440
Speaker 1: it as well. And I wonder if it was more

51
00:02:26,480 --> 00:02:29,120
Speaker 1: Kate being able to sort of sway her opinion, because

52
00:02:29,120 --> 00:02:30,760
Speaker 1: as opposed she looks at me and she sees you

53
00:02:31,160 --> 00:02:33,760
Speaker 1: to a certain extent when it comes to cheapness, but

54
00:02:33,919 --> 00:02:36,960
Speaker 1: like far less attractive version of me, a little bit shorter,

55
00:02:37,080 --> 00:02:40,480
Speaker 1: half Asian as opposed to half Norwegian. But no, I

56
00:02:40,480 --> 00:02:42,440
Speaker 1: think it's a fair question worth asking, you know, like

57
00:02:42,560 --> 00:02:45,280
Speaker 1: why is it that we feel so comfortable with buying

58
00:02:45,360 --> 00:02:47,920
Speaker 1: used homes or use cars. Of course, we're all about

59
00:02:47,919 --> 00:02:50,600
Speaker 1: buying used cars, but when it comes to clothing or

60
00:02:51,120 --> 00:02:53,720
Speaker 1: you know, let alone shoes, there's a little bit of

61
00:02:53,720 --> 00:02:56,160
Speaker 1: a negative connotation there. Folks are less willing to go

62
00:02:56,240 --> 00:02:59,320
Speaker 1: to the thrift store. Personally, I love you love used underwear,

63
00:03:01,360 --> 00:03:03,720
Speaker 1: definitely wouldn't do that. Of course. Well, I think that's

64
00:03:03,720 --> 00:03:05,600
Speaker 1: on the line somewhere this might be a helpful framework,

65
00:03:05,600 --> 00:03:07,919
Speaker 1: and so maybe that's it. I think there, let's introduce

66
00:03:08,520 --> 00:03:13,400
Speaker 1: an intimate scale, like there's this gradient, and the less

67
00:03:13,440 --> 00:03:15,960
Speaker 1: intimate an item is, I think, the more willing we

68
00:03:16,040 --> 00:03:18,760
Speaker 1: are to buy used for it to have been something

69
00:03:18,800 --> 00:03:20,239
Speaker 1: that someone else, because like you go into your home,

70
00:03:20,680 --> 00:03:22,639
Speaker 1: lots of people come through your house, you have guests over,

71
00:03:22,680 --> 00:03:24,720
Speaker 1: you have friends over. There's no part of your house

72
00:03:24,720 --> 00:03:28,360
Speaker 1: that's like up against your body, right, They're not like

73
00:03:28,400 --> 00:03:31,560
Speaker 1: coming into my bed right exactly. But when it comes

74
00:03:31,600 --> 00:03:35,200
Speaker 1: to clothing, and especially something like shoes or you know,

75
00:03:35,240 --> 00:03:39,680
Speaker 1: the more extreme case that's literally called intimates is underwear.

76
00:03:40,040 --> 00:03:42,720
Speaker 1: So I understand the pushback on that, but man the

77
00:03:42,760 --> 00:03:44,040
Speaker 1: ability to snag a deal.

78
00:03:44,200 --> 00:03:46,520
Speaker 2: I think the one question that's really important to ask

79
00:03:46,600 --> 00:03:48,640
Speaker 2: is how much usable life is left in this product,

80
00:03:48,680 --> 00:03:52,080
Speaker 2: Because if it is incredibly gently used and you're getting

81
00:03:52,120 --> 00:03:55,000
Speaker 2: a fifty percent discount essentially because someone worred a few

82
00:03:55,040 --> 00:03:57,440
Speaker 2: times and didn't love it or didn't fit quite right

83
00:03:57,440 --> 00:03:59,240
Speaker 2: and that's why they're selling it, then you're getting a

84
00:03:59,240 --> 00:04:03,200
Speaker 2: great deal. But if it has been let's say, through

85
00:04:03,360 --> 00:04:05,560
Speaker 2: half of its usable life, and you're getting a sixty

86
00:04:05,560 --> 00:04:07,960
Speaker 2: five percent discount, I'm probably not willing to make that

87
00:04:08,400 --> 00:04:10,920
Speaker 2: trade off. I would rather get the new thing and

88
00:04:11,040 --> 00:04:12,920
Speaker 2: get most of the us or all the usable life

89
00:04:13,000 --> 00:04:13,640
Speaker 2: myself out of it.

90
00:04:13,760 --> 00:04:16,599
Speaker 1: Totally agree there. Yeah, Like I'm not buying shoes that

91
00:04:16,760 --> 00:04:18,839
Speaker 1: look like they've been used, Like these are quote unquote

92
00:04:18,880 --> 00:04:20,440
Speaker 1: use shoes and maybe they were worn for like a

93
00:04:20,480 --> 00:04:22,800
Speaker 1: week or something like that, or maybe they're I don't

94
00:04:22,839 --> 00:04:24,800
Speaker 1: like a department store that unloads a whole lot of

95
00:04:24,960 --> 00:04:27,040
Speaker 1: open box shoes and so they've been worn around the

96
00:04:27,440 --> 00:04:29,320
Speaker 1: store as people have tried them on or something like that,

97
00:04:29,360 --> 00:04:31,360
Speaker 1: so they can't sell them. I'm totally fine with those

98
00:04:31,440 --> 00:04:32,720
Speaker 1: kind of shoes. I'm not looking for a pair of

99
00:04:32,760 --> 00:04:35,440
Speaker 1: shoes that look like they've been through the ringer already

100
00:04:35,640 --> 00:04:37,520
Speaker 1: and like the color is starting to fade, or there's

101
00:04:37,560 --> 00:04:40,280
Speaker 1: like a lot of tread missing. Nah, that's like it

102
00:04:40,440 --> 00:04:42,640
Speaker 1: was it last week. That's that's more along the lines

103
00:04:42,680 --> 00:04:44,640
Speaker 1: of like you buying your used tires where it's just

104
00:04:44,640 --> 00:04:46,240
Speaker 1: like where did you get these time? Yeah, that was

105
00:04:46,240 --> 00:04:50,520
Speaker 1: a bad idea as opposed to like a mismatched set

106
00:04:50,520 --> 00:04:53,080
Speaker 1: of tires that are brand new perhaps okay that feels

107
00:04:53,120 --> 00:04:55,080
Speaker 1: a little bit different, or a pair that was out

108
00:04:55,400 --> 00:04:57,560
Speaker 1: on the showroom maybe because of that has got like

109
00:04:57,680 --> 00:05:00,599
Speaker 1: kid fingerprints all over it or I don't know, I'd

110
00:05:00,680 --> 00:05:03,200
Speaker 1: be totally fine with but those tires on my car.

111
00:05:03,480 --> 00:05:06,040
Speaker 1: In a similar way, when it comes to shoes, I'm

112
00:05:06,080 --> 00:05:08,359
Speaker 1: not looking for a pair of shoes that are completely

113
00:05:08,400 --> 00:05:09,760
Speaker 1: worn out or Yeah.

114
00:05:09,600 --> 00:05:11,920
Speaker 2: This conversation is making me think that I need to

115
00:05:11,960 --> 00:05:13,600
Speaker 2: go to the thirst store again soon. It's been it's

116
00:05:13,600 --> 00:05:14,159
Speaker 2: been too long.

117
00:05:14,360 --> 00:05:16,839
Speaker 1: The three was great. Yeah, especially with kids. Kay was

118
00:05:16,880 --> 00:05:19,200
Speaker 1: just there, And especially when it comes to shoes for kids,

119
00:05:19,200 --> 00:05:21,599
Speaker 1: Oh my gosh.

120
00:05:20,680 --> 00:05:22,560
Speaker 2: They're not usually getting all the usable life out of

121
00:05:22,520 --> 00:05:24,479
Speaker 2: it because there's so much.

122
00:05:24,680 --> 00:05:26,719
Speaker 1: I mean, like, we buy almost what looks like brand

123
00:05:26,760 --> 00:05:28,640
Speaker 1: new shoes, and in a lot of cases and a

124
00:05:28,680 --> 00:05:30,640
Speaker 1: lot of instances, they are pretty much brand new, and

125
00:05:30,680 --> 00:05:33,400
Speaker 1: they're just shoes that the kids never wore. That's how

126
00:05:33,480 --> 00:05:35,919
Speaker 1: my five year old got a pair of Adidas Sambas,

127
00:05:35,960 --> 00:05:38,760
Speaker 1: like the indoor soccer shoe that was super dope. Yeah,

128
00:05:38,839 --> 00:05:40,359
Speaker 1: I'm not gonna go out and buy those, but I'll

129
00:05:40,440 --> 00:05:42,279
Speaker 1: certainly pick up a pair for three bucks. Sure.

130
00:05:42,360 --> 00:05:43,960
Speaker 2: Yeah, you know, that's a good point. I think all

131
00:05:43,960 --> 00:05:46,400
Speaker 2: for it, in particular for kids, stuff used is gonna

132
00:05:46,400 --> 00:05:48,440
Speaker 2: save you a lot of money. Those guys they grow

133
00:05:48,480 --> 00:05:50,520
Speaker 2: like weeds, you know, when they're when you're young. It's true,

134
00:05:50,520 --> 00:05:52,120
Speaker 2: all right, Matt, let's mention. The beer we're having on

135
00:05:52,160 --> 00:05:56,160
Speaker 2: this episode. This a tequila barrel aged stout from Wicked

136
00:05:56,160 --> 00:05:57,960
Speaker 2: Weed Brewing. It's a part of their Dark Art series.

137
00:05:58,000 --> 00:05:59,160
Speaker 2: We'll give our thoughts on this at the end of

138
00:05:59,200 --> 00:06:02,360
Speaker 2: the episode. And if you have a money question we'd

139
00:06:02,360 --> 00:06:03,760
Speaker 2: love to hear from you, just go to how to

140
00:06:03,839 --> 00:06:06,160
Speaker 2: money dot com slash ask for the instructions for how

141
00:06:06,200 --> 00:06:08,520
Speaker 2: to submit it. But really it's just recorda voice memo

142
00:06:08,640 --> 00:06:11,800
Speaker 2: emailing it over to us. Now, let's get to a question,

143
00:06:11,960 --> 00:06:14,720
Speaker 2: and this one is specifically about optimizing debt payoff.

144
00:06:15,120 --> 00:06:18,000
Speaker 3: I met in Jewel. I have two somewhat related questions.

145
00:06:18,640 --> 00:06:21,920
Speaker 3: The first is a medical bill related question. My wife

146
00:06:22,000 --> 00:06:24,880
Speaker 3: and I recently had our first baby and have about

147
00:06:24,880 --> 00:06:28,919
Speaker 3: a twenty seven hundred dollars bill that we owe. We

148
00:06:29,000 --> 00:06:31,720
Speaker 3: have the cash to pay it right away. However, the

149
00:06:31,720 --> 00:06:35,280
Speaker 3: hospital gives us ten months of interest free payments, so

150
00:06:35,320 --> 00:06:38,279
Speaker 3: at the end of those ten months or ten payments,

151
00:06:39,160 --> 00:06:41,520
Speaker 3: the bill would be totally paid for without any interest,

152
00:06:42,760 --> 00:06:44,360
Speaker 3: or I could pay it all on a lump sum

153
00:06:44,440 --> 00:06:48,360
Speaker 3: right now. But my thought is, since I have a

154
00:06:48,440 --> 00:06:51,480
Speaker 3: high yield savings account, I could just leave the emergency

155
00:06:51,600 --> 00:06:54,599
Speaker 3: or leave my emergency fund there and make the payments

156
00:06:54,680 --> 00:06:57,520
Speaker 3: and continue to gain interest on that money. Curious to

157
00:06:57,560 --> 00:07:00,960
Speaker 3: hear your thoughts about that. The second question is somewhat

158
00:07:00,960 --> 00:07:03,720
Speaker 3: related and has to do with HSA accounts. I have

159
00:07:03,760 --> 00:07:07,479
Speaker 3: a pretty full HSA account, money is still going into it.

160
00:07:07,600 --> 00:07:09,760
Speaker 3: I know you guys have explained the process of keeping

161
00:07:09,760 --> 00:07:13,440
Speaker 3: track of those records of medical bills and getting the

162
00:07:13,480 --> 00:07:15,880
Speaker 3: cash out later, but I was wondering if you could

163
00:07:15,880 --> 00:07:19,960
Speaker 3: maybe explain that again or direct me to an episode

164
00:07:20,280 --> 00:07:24,480
Speaker 3: that explains that in full details. Thanks love what you

165
00:07:24,520 --> 00:07:25,920
Speaker 3: guys do. Thanks for all your help.

166
00:07:25,960 --> 00:07:29,080
Speaker 1: That's yeah, this question actually was from Phil. He didn't

167
00:07:29,080 --> 00:07:31,000
Speaker 1: say his name, but of course he emailed his voice

168
00:07:31,040 --> 00:07:34,240
Speaker 1: memo over that's money faux pas, one fair Phil. And

169
00:07:34,280 --> 00:07:36,240
Speaker 1: he didn't say where he lives, so let's just pretend

170
00:07:36,400 --> 00:07:38,640
Speaker 1: this is Phil from Chicago. I don't know if that's

171
00:07:38,640 --> 00:07:41,680
Speaker 1: actually think say Maui, but Mali? Yeah, all right, why not?

172
00:07:41,680 --> 00:07:43,440
Speaker 1: I don't think we've ever heard from someone in Mali.

173
00:07:43,720 --> 00:07:47,680
Speaker 1: But congrats on the new baby, Phil, It's great. News

174
00:07:47,680 --> 00:07:50,000
Speaker 1: for you and your family. And I will say, twenty

175
00:07:50,000 --> 00:07:53,840
Speaker 1: seven hundred dollars. This is almost exactly what the average

176
00:07:53,840 --> 00:07:57,240
Speaker 1: cost of having a baby is today with insurance, which

177
00:07:57,320 --> 00:08:00,600
Speaker 1: isn't jump change, I'll say, but it definitely it certainly

178
00:08:00,800 --> 00:08:04,240
Speaker 1: could be worse because not being insured for that it

179
00:08:04,280 --> 00:08:06,120
Speaker 1: makes it a lot more expensive. This is something I've

180
00:08:06,120 --> 00:08:10,160
Speaker 1: had personal experience with having four kids. We have we

181
00:08:10,240 --> 00:08:11,680
Speaker 1: explored all the variety.

182
00:08:11,360 --> 00:08:13,120
Speaker 2: Of ways to pay for a baby because you have

183
00:08:13,200 --> 00:08:16,360
Speaker 2: traditional insurance for zero of the birth one we did

184
00:08:16,400 --> 00:08:19,720
Speaker 2: have traditional insurance for I think it was funny because

185
00:08:19,720 --> 00:08:22,360
Speaker 2: it was actually our second we got Kate on healthcare

186
00:08:22,600 --> 00:08:25,720
Speaker 2: dot gov plan, but the first one we're like, we're.

187
00:08:25,560 --> 00:08:27,960
Speaker 1: Going to do this cash pay up front. We're going

188
00:08:28,040 --> 00:08:29,880
Speaker 1: to get all the discounts. See how low we can

189
00:08:29,920 --> 00:08:32,000
Speaker 1: get this bad boy. And it wasn't that low. It

190
00:08:32,040 --> 00:08:34,440
Speaker 1: was around ten thousand dollars. Yeah, but it's.

191
00:08:34,320 --> 00:08:37,400
Speaker 2: Actually still significantly better than what most people who don't

192
00:08:37,400 --> 00:08:40,280
Speaker 2: have insurance pay for birth of a baby. But that's

193
00:08:40,280 --> 00:08:43,320
Speaker 2: still a lot of money, even still much more than Yeah,

194
00:08:43,360 --> 00:08:45,760
Speaker 2: exactly listenary that you just mentioned. But there are other ways,

195
00:08:45,840 --> 00:08:47,800
Speaker 2: I will say, because we tried different pat like so

196
00:08:47,840 --> 00:08:48,600
Speaker 2: we had health sharing.

197
00:08:48,880 --> 00:08:50,959
Speaker 1: We thought that would help with the cost. That didn't.

198
00:08:51,000 --> 00:08:53,680
Speaker 1: It doesn't. It does not. They don't cover that, and

199
00:08:53,720 --> 00:08:55,520
Speaker 1: we knew that as well. But we're hoping that that

200
00:08:55,559 --> 00:08:57,360
Speaker 1: with a different discounts that they offered, that we would

201
00:08:57,360 --> 00:08:59,120
Speaker 1: have been able to chip it down. I will say

202
00:08:59,160 --> 00:09:02,880
Speaker 1: our most affordable baby was the last one because we

203
00:09:02,920 --> 00:09:05,240
Speaker 1: got better and better at it. And it's also because

204
00:09:05,600 --> 00:09:07,560
Speaker 1: we didn't give birth in a hospital. We were at

205
00:09:07,600 --> 00:09:11,000
Speaker 1: a birthing center. And so for us, at least where

206
00:09:11,040 --> 00:09:12,880
Speaker 1: we live, there's a quote unquote, you know, a birthing

207
00:09:12,920 --> 00:09:15,880
Speaker 1: center that's not technically a hospital. They're associated with a hospital.

208
00:09:16,160 --> 00:09:19,080
Speaker 1: So if you are looking if there isn't an emergency,

209
00:09:19,080 --> 00:09:20,760
Speaker 1: for instance, and you're looking for that peace of mind,

210
00:09:21,160 --> 00:09:24,720
Speaker 1: it's they have the ability to get the birthing mother

211
00:09:24,760 --> 00:09:27,960
Speaker 1: over there super fast. But by avoiding the facility charge

212
00:09:27,960 --> 00:09:31,680
Speaker 1: of giving birth in a hospital our last kiddo, our son,

213
00:09:31,800 --> 00:09:33,360
Speaker 1: we were able to I think we were out the

214
00:09:33,400 --> 00:09:36,480
Speaker 1: door with like the prenatal care and everything. Total. Man,

215
00:09:36,559 --> 00:09:39,040
Speaker 1: we're somewhere around like seven to eight thousand dollars, which

216
00:09:39,080 --> 00:09:41,600
Speaker 1: is good a lot better than the other three, for sure.

217
00:09:42,080 --> 00:09:44,040
Speaker 1: I think it's a good tip for maybe some folks

218
00:09:44,040 --> 00:09:46,280
Speaker 1: out there, for everyone else out there who don't.

219
00:09:46,080 --> 00:09:49,959
Speaker 2: Have insurance center looking appropriate. Well, let's talk about Phil's question,

220
00:09:50,120 --> 00:09:52,920
Speaker 2: and let's first talk about the interest free payment question

221
00:09:53,000 --> 00:09:55,720
Speaker 2: that he presented. You know, it's similar to one that

222
00:09:55,720 --> 00:09:57,840
Speaker 2: we get about paying off a mortgage when you can

223
00:09:57,880 --> 00:09:58,960
Speaker 2: make more in a savings account.

224
00:09:59,040 --> 00:10:00,320
Speaker 1: Right, It's like kind of that ARB trash.

225
00:10:00,400 --> 00:10:04,160
Speaker 2: Can I keep the money in savings because I'm going to,

226
00:10:04,200 --> 00:10:08,000
Speaker 2: you know, necessarily exceed the return that I would get

227
00:10:08,040 --> 00:10:10,880
Speaker 2: otherwise paying down that debt more quickly, and I'll we're

228
00:10:10,880 --> 00:10:13,160
Speaker 2: talking about vastly bigger sums of money right when we're

229
00:10:13,160 --> 00:10:16,200
Speaker 2: talking about the mortgage question. But we do indeed prefer

230
00:10:16,240 --> 00:10:19,079
Speaker 2: folks to keep their savings intact along with their mortgage

231
00:10:19,200 --> 00:10:22,440
Speaker 2: pay it down as agreed, all else being equal. But

232
00:10:22,559 --> 00:10:24,800
Speaker 2: this question I think adds a little bit of nuance, right,

233
00:10:25,160 --> 00:10:28,199
Speaker 2: And there might be more similarities maybe with the interest

234
00:10:28,240 --> 00:10:30,600
Speaker 2: free loans that some furniture chains offer.

235
00:10:30,640 --> 00:10:31,800
Speaker 1: Matt. You've seen those commercials.

236
00:10:31,840 --> 00:10:34,400
Speaker 2: It's like no payment's no interest till twenty twenty nine,

237
00:10:34,760 --> 00:10:36,559
Speaker 2: and people are like, all right, let me go get

238
00:10:36,559 --> 00:10:38,400
Speaker 2: that couch, and why not I don't have to pay

239
00:10:38,400 --> 00:10:40,959
Speaker 2: a dime on it for a long time, but the

240
00:10:41,080 --> 00:10:44,360
Speaker 2: fine print will screw you over in a massive way

241
00:10:44,720 --> 00:10:47,479
Speaker 2: if you don't jump through the proper hoops. The penalties

242
00:10:47,559 --> 00:10:50,920
Speaker 2: are insanely steep. It's you know, essentially all the back

243
00:10:50,960 --> 00:10:54,320
Speaker 2: interest that needs to be paid ballooning the cost of

244
00:10:54,400 --> 00:10:57,000
Speaker 2: the couch you bot. And it's similar with some of

245
00:10:57,080 --> 00:10:59,079
Speaker 2: these hospital loans. Right if you don't pay off your

246
00:10:59,120 --> 00:11:02,800
Speaker 2: loan while promotional interest rate is in effect, you're gonna

247
00:11:02,800 --> 00:11:05,840
Speaker 2: also owe a lot of backloaded interest, which just makes

248
00:11:05,840 --> 00:11:08,080
Speaker 2: this much more of a risky maneuver. Whereas, like with

249
00:11:08,120 --> 00:11:10,240
Speaker 2: the mortgage, less risky you can always say I'm not

250
00:11:10,240 --> 00:11:11,680
Speaker 2: gonna pay it off now. Oh, but you know what,

251
00:11:11,800 --> 00:11:14,120
Speaker 2: six months later, the facts on the ground change. I'm

252
00:11:14,120 --> 00:11:15,760
Speaker 2: gonna choose to pay it off at this point in time.

253
00:11:15,960 --> 00:11:18,880
Speaker 2: But with this loan, if you from the hospital, there

254
00:11:18,960 --> 00:11:20,719
Speaker 2: is a chance that you screw it up and you

255
00:11:20,800 --> 00:11:22,360
Speaker 2: end up paying a lot more than you thought, and

256
00:11:22,400 --> 00:11:24,320
Speaker 2: it doesn't end up being kind of the zero percent

257
00:11:24,360 --> 00:11:27,560
Speaker 2: interest loan that sounded so appetizing at the beginning, that's true.

258
00:11:27,679 --> 00:11:30,280
Speaker 1: Yeah, So with that in mind, I'm not sure that

259
00:11:30,520 --> 00:11:33,520
Speaker 1: all that effort is worth the squeeze I'm probably not

260
00:11:33,600 --> 00:11:36,480
Speaker 1: gonna recommend for folks out there to do this. Because

261
00:11:36,520 --> 00:11:38,440
Speaker 1: you've got the cash, just go ahead, pay the bill,

262
00:11:38,480 --> 00:11:40,440
Speaker 1: be done with it. By doing that, you'll be able

263
00:11:40,440 --> 00:11:43,520
Speaker 1: to declutter your mental space. And it's not like you're

264
00:11:43,520 --> 00:11:46,360
Speaker 1: giving up much from a financial standpoint. If you so

265
00:11:46,480 --> 00:11:49,160
Speaker 1: crunching the numbers, I think you'll be giving up around

266
00:11:49,200 --> 00:11:51,920
Speaker 1: one hundred dollars in interest, which would have been taxable,

267
00:11:51,920 --> 00:11:54,720
Speaker 1: by the way, So keep that in mind. It's not

268
00:11:54,760 --> 00:11:57,160
Speaker 1: that I wouldn't reach down and pick up of eighty

269
00:11:57,200 --> 00:11:59,600
Speaker 1: bucks off the ground. It's just that I wouldn't attempt

270
00:11:59,640 --> 00:12:03,120
Speaker 1: to over optimize in this way. This decision that comes

271
00:12:03,120 --> 00:12:06,160
Speaker 1: with just the downside risks that Joel just spelled out.

272
00:12:06,480 --> 00:12:09,000
Speaker 1: If you find yourself not paying attention, and that might

273
00:12:09,000 --> 00:12:11,199
Speaker 1: happen right like right now you're thinking, I'm a pretty

274
00:12:11,240 --> 00:12:13,840
Speaker 1: buttoned up guy. Well like you might be having more

275
00:12:13,880 --> 00:12:17,000
Speaker 1: sleepless nights, you might have more brain fog setting in

276
00:12:17,160 --> 00:12:19,080
Speaker 1: than what you're typically used to.

277
00:12:19,120 --> 00:12:21,440
Speaker 2: I'm pretty sure my a qu drop by about eighteen

278
00:12:21,440 --> 00:12:24,240
Speaker 2: to twenty two points. Matt, Yeah, in those early days

279
00:12:24,240 --> 00:12:24,959
Speaker 2: of having a baby.

280
00:12:25,120 --> 00:12:26,959
Speaker 1: So I mean, and it comes down to the individual

281
00:12:26,960 --> 00:12:29,200
Speaker 1: comes back. I will say that, oh sure, yeah, yeah,

282
00:12:29,240 --> 00:12:31,880
Speaker 1: you're not as dumb as you used to do your babies.

283
00:12:32,320 --> 00:12:34,320
Speaker 1: But I guess I'm saying like, I don't know if

284
00:12:34,360 --> 00:12:36,600
Speaker 1: I would recommend this to most people if you are

285
00:12:36,640 --> 00:12:38,640
Speaker 1: like a robot, because I'm trying to picture myself in

286
00:12:38,679 --> 00:12:41,280
Speaker 1: this situation, and personally I think I would go through

287
00:12:41,280 --> 00:12:43,160
Speaker 1: with it. But it's because I know that, like I

288
00:12:43,280 --> 00:12:46,000
Speaker 1: set reminders on the calendar, I carve that money out

289
00:12:46,040 --> 00:12:48,960
Speaker 1: of accounts I ear market. I am incredibly disciplined when

290
00:12:49,000 --> 00:12:51,760
Speaker 1: it comes to maneuvers like this to ensure that I

291
00:12:51,760 --> 00:12:55,840
Speaker 1: don't end up completely forgetting and then having it go

292
00:12:55,920 --> 00:12:59,560
Speaker 1: into some sort of penalty interest territory. Yeah, certainly, if

293
00:12:59,600 --> 00:13:01,559
Speaker 1: we were talking talking about a large amount of money, right,

294
00:13:01,600 --> 00:13:03,240
Speaker 1: like let's say, if we were talking about eight hundred

295
00:13:03,240 --> 00:13:05,400
Speaker 1: dollars an interest as opposed to like eighty dollars an interest,

296
00:13:05,880 --> 00:13:09,000
Speaker 1: I think I would more widely recommend Hey, yeah, let's

297
00:13:09,040 --> 00:13:10,000
Speaker 1: jump through some hoops here.

298
00:13:10,000 --> 00:13:13,000
Speaker 2: The more hoops I'm willing. It makes me think of

299
00:13:13,040 --> 00:13:15,800
Speaker 2: getting like a bank account bonus with an online bank

300
00:13:15,920 --> 00:13:18,920
Speaker 2: versus one of kind of the big big banks.

301
00:13:19,040 --> 00:13:21,959
Speaker 1: And I did this like probably ten years ago, signed

302
00:13:22,000 --> 00:13:24,400
Speaker 1: up for a bank account with Chase, and man, you

303
00:13:24,440 --> 00:13:26,439
Speaker 1: had to go into the branch and it just took

304
00:13:26,480 --> 00:13:28,920
Speaker 1: a lot of time and old and I probably made,

305
00:13:28,960 --> 00:13:30,480
Speaker 1: you know, three hundred bucks for signing up for the

306
00:13:30,520 --> 00:13:32,600
Speaker 1: account for moving money around, but you have to make

307
00:13:32,640 --> 00:13:35,080
Speaker 1: like five to ten minutes of small talk with them, yeah,

308
00:13:35,160 --> 00:13:37,480
Speaker 1: to let them tell you on the other products, just

309
00:13:37,559 --> 00:13:40,480
Speaker 1: the hoops I had to jump through the rigmarole of

310
00:13:40,720 --> 00:13:42,400
Speaker 1: like eradicating that account.

311
00:13:42,400 --> 00:13:44,640
Speaker 2: When I was done, just wasn't worth it. Like it

312
00:13:44,720 --> 00:13:47,880
Speaker 2: was just such a frustrating experience. I was like, I'll

313
00:13:47,920 --> 00:13:50,520
Speaker 2: never do this again. And my eyes would like, especially

314
00:13:50,559 --> 00:13:52,920
Speaker 2: back in the day, Matt, like three hundred bucks when

315
00:13:52,920 --> 00:13:55,360
Speaker 2: you're twenty six years old or something like that. I mean,

316
00:13:55,360 --> 00:13:57,920
Speaker 2: that's a lot of money. And so I was I

317
00:13:57,960 --> 00:13:59,280
Speaker 2: was more than willing to do it. And then I

318
00:13:59,320 --> 00:14:01,440
Speaker 2: realized even if the end of it, it just wasn't

319
00:14:01,480 --> 00:14:04,520
Speaker 2: worth the effort. So I would, you know, take that

320
00:14:04,559 --> 00:14:06,760
Speaker 2: into account, maybe count the cost ahead of time. Phil

321
00:14:07,160 --> 00:14:10,040
Speaker 2: This sounds like maybe it would be easier to pull

322
00:14:10,080 --> 00:14:13,320
Speaker 2: off and you're not going to run into a giant

323
00:14:13,360 --> 00:14:17,200
Speaker 2: bank bureaucracy, but still there are potential pitfalls that you

324
00:14:17,240 --> 00:14:20,320
Speaker 2: have to be aware of onto his HSA question. Matt,

325
00:14:20,800 --> 00:14:23,080
Speaker 2: I think that this is a two for question. Two

326
00:14:23,160 --> 00:14:26,920
Speaker 2: questions to one. I think that actually the birth bill

327
00:14:27,120 --> 00:14:29,720
Speaker 2: offers the perfect case study. Because you now have a

328
00:14:29,760 --> 00:14:32,480
Speaker 2: medical bill of twenty seven hundred dollars that you mentioned.

329
00:14:32,640 --> 00:14:36,160
Speaker 2: You could of course tap your HSA for those funds now.

330
00:14:36,560 --> 00:14:39,680
Speaker 2: But because the HSA, the health Savings account is so

331
00:14:39,800 --> 00:14:42,600
Speaker 2: dang flexible, and we'll link to some of the articles

332
00:14:42,600 --> 00:14:45,800
Speaker 2: we've written about HSA's on howdomoney dot com in the

333
00:14:45,800 --> 00:14:48,200
Speaker 2: show notes. You know, Phil, you could continue to leave

334
00:14:48,200 --> 00:14:50,640
Speaker 2: that money invested so it grows for your future. You

335
00:14:50,640 --> 00:14:53,480
Speaker 2: could use cash that you have in savings to cover

336
00:14:53,560 --> 00:14:56,640
Speaker 2: this twenty seven hundred dollars an expense that you have.

337
00:14:57,200 --> 00:15:00,800
Speaker 2: And when you think about it, logically, just randomly picked

338
00:15:00,800 --> 00:15:03,400
Speaker 2: a number, okay, sixteen years, how much would twenty seven

339
00:15:03,520 --> 00:15:07,560
Speaker 2: hundred dollars grow to in a sixteen year timeframe. On average,

340
00:15:07,640 --> 00:15:10,960
Speaker 2: that money would quadruple. So, you know, a decade and

341
00:15:11,000 --> 00:15:13,200
Speaker 2: a half from now, Phil could take the cash out

342
00:15:13,480 --> 00:15:17,200
Speaker 2: based on his twenty twenty five expense. You could essentially

343
00:15:17,280 --> 00:15:20,880
Speaker 2: leave the remaining eighty one hundred dollars for future healthcare

344
00:15:20,880 --> 00:15:23,160
Speaker 2: expenses that would be the growth on the money you

345
00:15:23,240 --> 00:15:25,720
Speaker 2: invested inside of your HSA. So you pull the twenty

346
00:15:25,760 --> 00:15:28,960
Speaker 2: seven hundred bucks out then for whatever you needed for,

347
00:15:29,200 --> 00:15:31,160
Speaker 2: and yet you've still got a big bundle of cash

348
00:15:31,200 --> 00:15:33,480
Speaker 2: that's working for you, working for your future. And you

349
00:15:33,520 --> 00:15:36,040
Speaker 2: could do the same with other prior healthcare expenses, right

350
00:15:36,080 --> 00:15:39,200
Speaker 2: that you haven't tapped yet. I love the idea of

351
00:15:39,280 --> 00:15:41,280
Speaker 2: leaving that money put if you have enough cash on

352
00:15:41,360 --> 00:15:44,880
Speaker 2: hand to essentially foot the bill now, so that you

353
00:15:44,880 --> 00:15:47,520
Speaker 2: can grow your investments tax free for the future, yes.

354
00:15:47,520 --> 00:15:50,360
Speaker 1: Right, and that those remaining dollars you can tap for

355
00:15:50,400 --> 00:15:53,360
Speaker 1: any reason because money is fungible of course, as long

356
00:15:53,400 --> 00:15:56,240
Speaker 1: as you have the documentation proving you have other qualified

357
00:15:56,320 --> 00:15:59,320
Speaker 1: medical expenses. So what that means is that you do

358
00:15:59,440 --> 00:16:02,360
Speaker 1: need to keep up with your documentation, and so when

359
00:16:02,360 --> 00:16:04,080
Speaker 1: it comes to record keeping, like you don't have to

360
00:16:04,080 --> 00:16:06,560
Speaker 1: get fancy with it. This isn't some sort of super

361
00:16:06,640 --> 00:16:09,080
Speaker 1: sophisticated thing like I would just take a picture of

362
00:16:09,080 --> 00:16:11,080
Speaker 1: the bill to have a record, save it to like

363
00:16:11,120 --> 00:16:14,440
Speaker 1: a Google drive file for maybe that year, and then

364
00:16:14,480 --> 00:16:18,400
Speaker 1: just keep a running total in a Google sheet. You

365
00:16:18,400 --> 00:16:20,560
Speaker 1: can make an HSA receipt sort of a spreadsheet like

366
00:16:20,600 --> 00:16:23,480
Speaker 1: That's what I would do. But there are options using

367
00:16:23,480 --> 00:16:26,080
Speaker 1: different budgeting software out there, like personal capital or why

368
00:16:26,120 --> 00:16:30,280
Speaker 1: mapp where you can label healthcare transactions specifically and then

369
00:16:30,320 --> 00:16:32,440
Speaker 1: you can go back to it look it up. But

370
00:16:32,560 --> 00:16:35,160
Speaker 1: then within those proprietary sort of systems, there's still a

371
00:16:35,240 --> 00:16:37,920
Speaker 1: risk because are those sites going to be around forever?

372
00:16:38,200 --> 00:16:40,760
Speaker 1: Is this are these options or is this what do

373
00:16:40,800 --> 00:16:43,640
Speaker 1: you call it, usability that they're no longer going to

374
00:16:43,680 --> 00:16:45,920
Speaker 1: keep up with? Perhaps, So it's just something to keep

375
00:16:45,920 --> 00:16:47,840
Speaker 1: in mind. If it was me, I would do exactly

376
00:16:47,840 --> 00:16:51,320
Speaker 1: what I said, keeping up having that Google Drive folder

377
00:16:51,560 --> 00:16:54,400
Speaker 1: with for your HSA receipts and keeping a running total

378
00:16:54,760 --> 00:16:58,480
Speaker 1: of those of the date that expense was made, a

379
00:16:58,480 --> 00:17:00,880
Speaker 1: little description of it, the total dollar amount, and the

380
00:17:00,920 --> 00:17:04,440
Speaker 1: amount of that dollar amount that you have reimbursed to yourself,

381
00:17:04,720 --> 00:17:08,000
Speaker 1: and hopefully for a long period of time it'll be

382
00:17:08,000 --> 00:17:11,040
Speaker 1: none because you're allowing those dollars to continue to earn

383
00:17:11,160 --> 00:17:11,920
Speaker 1: and compound.

384
00:17:12,000 --> 00:17:13,720
Speaker 2: Yeah, Matt, even though you and I have never had

385
00:17:13,760 --> 00:17:17,360
Speaker 2: access to an HSA, Sadly, it is something we talk

386
00:17:17,400 --> 00:17:21,119
Speaker 2: about frequently on the show because it is this underrated

387
00:17:21,160 --> 00:17:23,880
Speaker 2: investment account that people can take part in if they

388
00:17:24,080 --> 00:17:27,080
Speaker 2: have a high deductible health care plan and they can

389
00:17:27,480 --> 00:17:30,159
Speaker 2: grow money for their future tax free. Like it's not

390
00:17:30,320 --> 00:17:33,440
Speaker 2: tax deferred, it's not a tax break in the here

391
00:17:33,480 --> 00:17:36,400
Speaker 2: and now. It's no tax on that money. Ever, if

392
00:17:36,400 --> 00:17:39,480
Speaker 2: you jump through the documentation hoops right, and if you're

393
00:17:39,680 --> 00:17:43,560
Speaker 2: spending that money on qualified healthcare expenses. But again, what

394
00:17:43,640 --> 00:17:46,320
Speaker 2: makes it so great is that you can incur the

395
00:17:46,359 --> 00:17:50,000
Speaker 2: healthcare expense now and not take the disbursement until decades

396
00:17:50,000 --> 00:17:52,080
Speaker 2: down the road. And this brings up another question like

397
00:17:52,119 --> 00:17:54,280
Speaker 2: do you even need to keep receipts And some people

398
00:17:54,280 --> 00:17:56,840
Speaker 2: would say, I don't even bother. And part of this

399
00:17:56,880 --> 00:17:59,000
Speaker 2: depends on when you want to tap those funds. So

400
00:17:59,040 --> 00:18:01,399
Speaker 2: if you don't need any HSA money, if you're like,

401
00:18:01,440 --> 00:18:03,199
Speaker 2: I'm not going to use it until I'm in my

402
00:18:03,280 --> 00:18:05,400
Speaker 2: mid sixties, well, if you don't need it until after

403
00:18:05,520 --> 00:18:07,919
Speaker 2: age sixty five, you might not even need to go

404
00:18:07,960 --> 00:18:11,000
Speaker 2: through the hassle of keeping receipts. But I think it's

405
00:18:11,000 --> 00:18:12,719
Speaker 2: a minor hassle and I think you still should if

406
00:18:12,800 --> 00:18:13,720
Speaker 2: you want to use your.

407
00:18:13,680 --> 00:18:15,439
Speaker 1: Yeah, it just gives you options to be able to

408
00:18:15,480 --> 00:18:18,359
Speaker 1: pull some of the money out before right full retirement.

409
00:18:18,800 --> 00:18:21,360
Speaker 2: And that's what by the HSA can be so powerful,

410
00:18:21,640 --> 00:18:24,080
Speaker 2: in particular for early retirees because you can start to

411
00:18:24,160 --> 00:18:26,919
Speaker 2: draw down on that fund when maybe other dollars that

412
00:18:26,960 --> 00:18:30,320
Speaker 2: you have investor for your future are just too hard

413
00:18:30,359 --> 00:18:32,920
Speaker 2: to get or they're going to cause too much financial headache. Right,

414
00:18:32,920 --> 00:18:35,480
Speaker 2: You're going to have penalties for accessing that money early.

415
00:18:36,080 --> 00:18:38,479
Speaker 2: And so, yeah, let's say you wanted to use your

416
00:18:38,600 --> 00:18:41,520
Speaker 2: HSA to pay for Medicare premiums, though later on in life, well,

417
00:18:41,520 --> 00:18:44,639
Speaker 2: you don't need receipts for that. Still, I guess I

418
00:18:44,760 --> 00:18:47,879
Speaker 2: just like the idea of tracking for flexibility purposes. The

419
00:18:48,040 --> 00:18:51,080
Speaker 2: HSA is just one of the best accounts because it

420
00:18:51,200 --> 00:18:53,840
Speaker 2: is so darn flexible. And also, don't forget that an

421
00:18:53,920 --> 00:18:58,119
Speaker 2: HSA can effectively turn into a traditional IRA later in life,

422
00:18:58,520 --> 00:19:01,280
Speaker 2: but then it loses one aspect of that triple tax advantage.

423
00:19:01,280 --> 00:19:04,439
Speaker 2: And the ideal at least is to get the triple

424
00:19:04,440 --> 00:19:07,160
Speaker 2: tax advantage on the majority of the dollars that you're

425
00:19:07,160 --> 00:19:09,359
Speaker 2: sticking in that account. Yeah, but what you're highlighting is

426
00:19:09,359 --> 00:19:11,320
Speaker 2: that you don't have to worry about overfunding that because

427
00:19:11,359 --> 00:19:13,359
Speaker 2: eventually you'll be able to draw down on that and

428
00:19:13,440 --> 00:19:15,320
Speaker 2: pay taxes all that income just.

429
00:19:15,240 --> 00:19:17,600
Speaker 1: Like you would with the traditional I ring. Yep, But Joe,

430
00:19:17,640 --> 00:19:19,000
Speaker 1: we got more to get to. We're gonna hear from

431
00:19:19,000 --> 00:19:22,159
Speaker 1: a listener who's expecting to make bank and the near future.

432
00:19:22,160 --> 00:19:32,640
Speaker 1: We'll hear from him plus others right after this. All right, Matt,

433
00:19:32,680 --> 00:19:33,159
Speaker 1: we're back now.

434
00:19:33,200 --> 00:19:36,440
Speaker 2: We got a question about making an investment in your home.

435
00:19:36,480 --> 00:19:37,680
Speaker 1: What's the best way to go about it?

436
00:19:37,880 --> 00:19:41,800
Speaker 4: Hey, guys, this is Shane from Madison, Wisconsin, somewhat new

437
00:19:41,840 --> 00:19:43,879
Speaker 4: listener and a first time caller, and I have a

438
00:19:43,960 --> 00:19:47,920
Speaker 4: question about finishing a basement and doing a home renovation.

439
00:19:48,200 --> 00:19:50,240
Speaker 4: My wife and I are expecting our first child in

440
00:19:50,280 --> 00:19:52,440
Speaker 4: a few months, so we're looking at ways to add

441
00:19:52,480 --> 00:19:55,200
Speaker 4: space to our current home. We did buy our home

442
00:19:55,240 --> 00:19:58,639
Speaker 4: in twenty twenty when rates were low, and therefore it

443
00:19:58,640 --> 00:20:01,080
Speaker 4: doesn't really make sense for us to and move or

444
00:20:01,119 --> 00:20:03,760
Speaker 4: do a cash out refinance. Rather, we're going to try

445
00:20:03,760 --> 00:20:06,800
Speaker 4: to finish the unfinished basements in this utilize the space

446
00:20:06,800 --> 00:20:09,560
Speaker 4: that's already there. We have about seven hundred square feet

447
00:20:09,640 --> 00:20:12,080
Speaker 4: looking to add a living space, bedroom, and a bathroom.

448
00:20:12,359 --> 00:20:14,400
Speaker 4: My question, then, is what are some of the best

449
00:20:14,440 --> 00:20:17,280
Speaker 4: ways to fund this? From my research, I feel like

450
00:20:17,359 --> 00:20:20,360
Speaker 4: a helock is a good option. However, rates are still

451
00:20:20,400 --> 00:20:23,280
Speaker 4: somewhat high on that. Do you anticipate rates continue to fall?

452
00:20:24,640 --> 00:20:27,240
Speaker 4: Any insight into a helock might be helpful. We do

453
00:20:27,320 --> 00:20:29,440
Speaker 4: have some money saved up, but not enough to fund

454
00:20:29,520 --> 00:20:32,560
Speaker 4: the entire project. It's probably about sixty thousand, maybe a

455
00:20:32,560 --> 00:20:35,240
Speaker 4: little bit more. Any advice on this would be appreciated.

456
00:20:35,600 --> 00:20:39,200
Speaker 4: And my beer recommendation is a Spotted Cow from Nuclaris

457
00:20:39,200 --> 00:20:42,880
Speaker 4: Brewing Company, very fitting for Wisconsin. Thank you, really enjoy

458
00:20:42,960 --> 00:20:45,680
Speaker 4: the show, have a good beginning start to twenty twenty five.

459
00:20:46,320 --> 00:20:49,480
Speaker 1: Oh right, how does Shane fund that basement? Before we

460
00:20:49,520 --> 00:20:51,640
Speaker 1: get nerdy with the money, let's talk about beer because

461
00:20:51,680 --> 00:20:55,040
Speaker 1: he mentioned new Glaris. Why does Spot Cow have such

462
00:20:55,080 --> 00:20:57,280
Speaker 1: a cult following? That's a good question. It is a

463
00:20:57,280 --> 00:21:00,720
Speaker 1: great beer, and Newclares makes them really good, solid beer.

464
00:21:00,760 --> 00:21:02,920
Speaker 1: But it's not like I feel like it carries to

465
00:21:02,960 --> 00:21:06,080
Speaker 1: blow your mind. It carries more cultural clout than the

466
00:21:06,119 --> 00:21:08,160
Speaker 1: beer itself. Does you know what I'm saying?

467
00:21:08,160 --> 00:21:10,560
Speaker 2: I think my favorite beers that Nuclarius makes are actually

468
00:21:10,640 --> 00:21:14,400
Speaker 2: some of the fruited beers. Yeah, really delicious, But yeah,

469
00:21:14,640 --> 00:21:16,440
Speaker 2: Spotted Cow. I guess it's just we had like a.

470
00:21:16,359 --> 00:21:19,000
Speaker 1: Blue like a wild blueberry something about a lake that

471
00:21:19,040 --> 00:21:21,640
Speaker 1: was that was a Nuclearius one maybebe that one maybe

472
00:21:21,840 --> 00:21:24,600
Speaker 1: new Uh, I don't I can't remember specifically. We haven't

473
00:21:24,600 --> 00:21:27,080
Speaker 1: had Spotted Cow. We have had it on the show,

474
00:21:27,359 --> 00:21:29,399
Speaker 1: but it was back in twenty twenty, back when Shane

475
00:21:29,400 --> 00:21:32,080
Speaker 1: was buying his house. We actually enjoyed it on the show.

476
00:21:32,160 --> 00:21:33,520
Speaker 1: I think you were up there for some reason and

477
00:21:33,560 --> 00:21:35,600
Speaker 1: you came back with some maybe. Well it's I feel

478
00:21:35,640 --> 00:21:38,320
Speaker 1: like you're the Michelle you're oh, could have been your

479
00:21:38,359 --> 00:21:40,760
Speaker 1: tenant at the time. She's she's from wiscond that's right,

480
00:21:40,800 --> 00:21:42,520
Speaker 1: that's right. I think her dad brought them down or

481
00:21:42,520 --> 00:21:44,440
Speaker 1: she brought some back for me. Yeah, yeah, that was fun.

482
00:21:44,520 --> 00:21:44,639
Speaker 5: Well.

483
00:21:44,680 --> 00:21:47,440
Speaker 2: I think Nuclarius too is one of the original independent

484
00:21:47,720 --> 00:21:51,119
Speaker 2: breweries from that region of the US and in Wisconsin.

485
00:21:51,480 --> 00:21:53,080
Speaker 2: And I've never made it out to the Bruphub, but

486
00:21:53,080 --> 00:21:56,480
Speaker 2: apparently like the their actual brewing system I believe came

487
00:21:56,520 --> 00:21:58,840
Speaker 2: over from Germany. It's super legit and it's like a

488
00:21:58,880 --> 00:22:02,000
Speaker 2: beautiful grouphub. So loved visits some day. Yeah, I thought

489
00:22:02,040 --> 00:22:04,480
Speaker 2: to the list of places the visit while in Wisconsin

490
00:22:04,600 --> 00:22:07,440
Speaker 2: for real, right, But let's get to Shane's question. Congrats

491
00:22:07,480 --> 00:22:10,000
Speaker 2: on the baby coming soon, by the way, and Matt

492
00:22:10,240 --> 00:22:14,040
Speaker 2: Shane asked about rates are headed. Where where rates going

493
00:22:14,200 --> 00:22:15,720
Speaker 2: in the near future.

494
00:22:15,520 --> 00:22:17,119
Speaker 1: Might make you feel better about taking out that he

495
00:22:17,200 --> 00:22:18,920
Speaker 1: lot because you're like, yeah, yeah, rates are going to

496
00:22:18,960 --> 00:22:19,200
Speaker 1: go down.

497
00:22:19,280 --> 00:22:20,879
Speaker 2: If rates are going to go down, then hey, the

498
00:22:20,920 --> 00:22:23,679
Speaker 2: he like does look less less bad, right, like a

499
00:22:23,720 --> 00:22:27,000
Speaker 2: solid option. But really it's anyone's guess. I mean, a

500
00:22:27,040 --> 00:22:28,959
Speaker 2: lot of folks were pretty certain that we were in

501
00:22:28,960 --> 00:22:31,879
Speaker 2: for dramatic rate declines in twenty twenty four and in

502
00:22:31,920 --> 00:22:35,080
Speaker 2: twenty twenty five. But all signs at least the Tea

503
00:22:35,119 --> 00:22:38,000
Speaker 2: leaves I'm reading Matt a point to rates remaining a

504
00:22:38,000 --> 00:22:40,359
Speaker 2: lot more sticky for the time being, which is great

505
00:22:40,359 --> 00:22:42,719
Speaker 2: news for savers, not so great for folks who want

506
00:22:42,760 --> 00:22:45,080
Speaker 2: to borrow big chunks of money. Though still I don't

507
00:22:45,080 --> 00:22:48,639
Speaker 2: think it means that Shane should not borrow any money

508
00:22:48,640 --> 00:22:51,800
Speaker 2: for this renovation. But I guess just know that kind

509
00:22:51,800 --> 00:22:55,960
Speaker 2: of predicting rate patterns where they're going, what's going to happen, Like,

510
00:22:56,040 --> 00:22:58,800
Speaker 2: I can tell you what I think, and it certainly

511
00:22:58,840 --> 00:23:01,359
Speaker 2: looks less likely rates are going to go down in

512
00:23:01,560 --> 00:23:04,360
Speaker 2: the near term. But it's been really fascinating to watch

513
00:23:04,359 --> 00:23:07,399
Speaker 2: people be so wrong in their predictions on rates and

514
00:23:07,400 --> 00:23:09,439
Speaker 2: what it would do at housing prices, and people have

515
00:23:09,440 --> 00:23:13,200
Speaker 2: been wrong on those economic predictions a lot in recent years.

516
00:23:13,240 --> 00:23:15,160
Speaker 1: Yeah, Man, the last four years, there's been a whole

517
00:23:15,160 --> 00:23:17,800
Speaker 1: lot of unprecedented territory that we've entered into. And I

518
00:23:17,840 --> 00:23:20,000
Speaker 1: feel like, if there's anything that we've learned or should

519
00:23:20,000 --> 00:23:22,480
Speaker 1: have learned, is that it's really tough to predict anything

520
00:23:22,480 --> 00:23:24,880
Speaker 1: after a pandemic, After the world shuts down, little humility

521
00:23:24,920 --> 00:23:28,359
Speaker 1: goes a long way totally. But the basement. I love basements, man,

522
00:23:28,600 --> 00:23:31,199
Speaker 1: I'm so jelly of Shane. I feel like out in

523
00:23:31,240 --> 00:23:34,560
Speaker 1: the Midwest, basements are They're a little more dim a

524
00:23:34,600 --> 00:23:37,480
Speaker 1: dozen like I think, like, I've got family in Missouri,

525
00:23:37,960 --> 00:23:40,520
Speaker 1: in Illinois, they've all got basements. They're amazing. They do

526
00:23:40,520 --> 00:23:43,399
Speaker 1: all sorts of awesome stuff down there, start businesses, extra

527
00:23:43,440 --> 00:23:46,000
Speaker 1: space for kids. And by doing that, Shane, you're talking

528
00:23:46,000 --> 00:23:48,719
Speaker 1: about increasing the value of your home and potentially being

529
00:23:48,760 --> 00:23:51,000
Speaker 1: able to use that space to increase your cash flow.

530
00:23:51,119 --> 00:23:53,800
Speaker 1: How think you didn't see that specifically all without having

531
00:23:53,840 --> 00:23:56,919
Speaker 1: to add any additional square footage. It doesn't sound like

532
00:23:56,960 --> 00:23:59,159
Speaker 1: you're planning on on running it out. You're likely going

533
00:23:59,200 --> 00:24:00,879
Speaker 1: to need it for the baby, but that is often

534
00:24:01,000 --> 00:24:03,480
Speaker 1: a part of the appeal for a lot of folks.

535
00:24:03,480 --> 00:24:06,440
Speaker 1: Because you got the walls, the roof, they already exist.

536
00:24:06,600 --> 00:24:08,560
Speaker 1: You might have to do a little waterproofing. I'm not

537
00:24:08,600 --> 00:24:10,520
Speaker 1: exactly sure how it works. Yeah, but it's just a

538
00:24:10,600 --> 00:24:13,919
Speaker 1: much more affordable endeavor than to, let's say, build an

539
00:24:13,960 --> 00:24:17,439
Speaker 1: adu from scratch, if that's even something that your city,

540
00:24:17,520 --> 00:24:21,040
Speaker 1: that your community allows. Basements are or where it's at. Man,

541
00:24:21,040 --> 00:24:21,520
Speaker 1: I love them.

542
00:24:21,560 --> 00:24:23,879
Speaker 2: I mean, think about Matt, you're actually adding square footage

543
00:24:23,880 --> 00:24:25,840
Speaker 2: to your house right now. How much cheaper is it

544
00:24:25,880 --> 00:24:27,760
Speaker 2: if the square footage exists? But you just have to

545
00:24:27,760 --> 00:24:28,840
Speaker 2: finish it, right.

546
00:24:28,760 --> 00:24:30,800
Speaker 1: I so wish that there was an unfinished basement that

547
00:24:30,800 --> 00:24:33,040
Speaker 1: we would have had. This is Yes, it's painful, this

548
00:24:33,119 --> 00:24:33,879
Speaker 1: is why Jelly.

549
00:24:34,680 --> 00:24:37,600
Speaker 2: Yes, yeah, so, I mean I think it makes sense

550
00:24:37,600 --> 00:24:39,760
Speaker 2: if you have the unfinished space. It's just so much

551
00:24:39,920 --> 00:24:42,679
Speaker 2: cheaper than the alternatives that Shane mentioned in particular that

552
00:24:42,720 --> 00:24:46,000
Speaker 2: he's got the locked in low rate, Like why go

553
00:24:46,080 --> 00:24:47,879
Speaker 2: and find another way to get the space you need?

554
00:24:48,000 --> 00:24:51,000
Speaker 2: This is going to be easily the most fiscally responsible

555
00:24:51,000 --> 00:24:51,520
Speaker 2: way of doing that.

556
00:24:51,640 --> 00:24:53,880
Speaker 1: Shean's probably got a thirty year locked in at three percent. Right,

557
00:24:53,920 --> 00:24:56,800
Speaker 1: he's not going anywhere exactly. So what about borrowing to

558
00:24:56,880 --> 00:25:00,760
Speaker 1: fund this renovation? Well, ideally, you know, always we'd like

559
00:25:00,800 --> 00:25:03,360
Speaker 1: to see folks save up and pay cash, but that's

560
00:25:03,359 --> 00:25:05,879
Speaker 1: a tall order. When we're talking about a sixty thousand

561
00:25:05,880 --> 00:25:08,240
Speaker 1: dollars renovation, you are likely going to have to borrow

562
00:25:08,520 --> 00:25:11,560
Speaker 1: at least for the renovation at rates that are nowhere

563
00:25:11,600 --> 00:25:13,840
Speaker 1: near what you saw in twenty twenty.

564
00:25:13,840 --> 00:25:16,560
Speaker 2: You might be a little shocked when you start looking

565
00:25:16,600 --> 00:25:20,399
Speaker 2: around at local borrowing options. You might be looking at

566
00:25:20,440 --> 00:25:22,280
Speaker 2: paying in the neighborhood of like, I don't know, eight

567
00:25:22,280 --> 00:25:24,560
Speaker 2: to nine percent, probably on a helock right now. Yeah,

568
00:25:24,680 --> 00:25:26,639
Speaker 2: part of it depends on your credit score. Hopefully you

569
00:25:26,680 --> 00:25:29,320
Speaker 2: got a high credit score. And that's particularly I would say,

570
00:25:29,880 --> 00:25:32,919
Speaker 2: from a local credit union. That is, from all the

571
00:25:32,960 --> 00:25:34,879
Speaker 2: data Matt and I have seen over the years, the

572
00:25:34,960 --> 00:25:37,960
Speaker 2: best place shop at a couple of local credit unions

573
00:25:38,000 --> 00:25:41,159
Speaker 2: because they have better borrowing terms than you're going to

574
00:25:41,240 --> 00:25:44,359
Speaker 2: get at most banks. That is just a majority of

575
00:25:44,400 --> 00:25:46,400
Speaker 2: the time sort of thing. And I don't think though

576
00:25:46,440 --> 00:25:48,919
Speaker 2: eight to nine percent rate should scare you off completely,

577
00:25:48,960 --> 00:25:52,320
Speaker 2: should cause you to avoid borrowing for this renovation, but

578
00:25:52,400 --> 00:25:54,240
Speaker 2: I do think it should cause you to keep expenses

579
00:25:54,280 --> 00:25:56,679
Speaker 2: as low as possible and then also make sure you

580
00:25:56,760 --> 00:26:00,879
Speaker 2: have a reasonable payoff timeframe that so you're going to

581
00:26:00,920 --> 00:26:03,760
Speaker 2: eradicate it and not keep it around for like, you know, eight, nine,

582
00:26:03,840 --> 00:26:04,800
Speaker 2: ten years to come.

583
00:26:04,800 --> 00:26:07,240
Speaker 1: More like three years or less. I think. I mean,

584
00:26:07,359 --> 00:26:10,119
Speaker 1: I just want you to be super careful about this.

585
00:26:10,200 --> 00:26:12,520
Speaker 1: I will say that the nice thing about going with

586
00:26:12,560 --> 00:26:15,040
Speaker 1: a helock is that if rates do end up dropping, well,

587
00:26:15,040 --> 00:26:17,040
Speaker 1: you're going to pay less on that debt moving forward,

588
00:26:17,080 --> 00:26:21,120
Speaker 1: which is great. Helocks they oftentimes, especially from local credit unions,

589
00:26:21,359 --> 00:26:24,200
Speaker 1: come with no closing costs, so that's nice. So just

590
00:26:24,240 --> 00:26:26,040
Speaker 1: shop around and see if you can find yourself the

591
00:26:26,040 --> 00:26:29,080
Speaker 1: best deal, and hopefully you don't even have to take

592
00:26:29,119 --> 00:26:32,639
Speaker 1: out a full sixty thousand dollars helock, since it sounds

593
00:26:32,640 --> 00:26:35,399
Speaker 1: like you do have some cash on hand, like I

594
00:26:35,400 --> 00:26:38,639
Speaker 1: wouldn't completely obliterate your emergency fund to pull us off,

595
00:26:38,680 --> 00:26:40,679
Speaker 1: but also don't be afraid to use some of that

596
00:26:40,760 --> 00:26:43,119
Speaker 1: cash to help minimize what it is that you're going

597
00:26:43,200 --> 00:26:45,879
Speaker 1: to borrow in order to pull this project off, and

598
00:26:45,920 --> 00:26:48,679
Speaker 1: maybe spend some time playing with a helock calculator as well,

599
00:26:48,720 --> 00:26:50,240
Speaker 1: because I think that might be able to open your

600
00:26:50,280 --> 00:26:52,720
Speaker 1: eyes as to what it is that you are signing

601
00:26:52,800 --> 00:26:55,280
Speaker 1: up for. Cause, like, let's say you are because I

602
00:26:55,680 --> 00:26:57,560
Speaker 1: played with the numbers a little bit before we hit

603
00:26:57,600 --> 00:27:00,560
Speaker 1: record and on a sixty thousand dollars loan at like

604
00:27:00,640 --> 00:27:03,040
Speaker 1: let's say eight and a half percent, you're looking at

605
00:27:03,080 --> 00:27:05,120
Speaker 1: it's like, okay, five hundred dollars minimum payment. That doesn't

606
00:27:05,160 --> 00:27:07,880
Speaker 1: seem too bad, but that's for the minimum payment. If

607
00:27:07,920 --> 00:27:10,320
Speaker 1: you were looking to eliminate this thing in like three years,

608
00:27:10,359 --> 00:27:12,400
Speaker 1: you're looking at putting somewhere close to an extra two

609
00:27:12,440 --> 00:27:16,560
Speaker 1: thousand dollars towards that thing every single month, which that's

610
00:27:16,600 --> 00:27:19,280
Speaker 1: a lot of money hard to scrounge up. Yeah, yeah, yeah,

611
00:27:19,480 --> 00:27:21,480
Speaker 1: I mean, I just I want I'm not saying this

612
00:27:21,560 --> 00:27:23,239
Speaker 1: to scare you, but this is a part of your

613
00:27:23,320 --> 00:27:26,000
Speaker 1: due diligence and making sure that you know what it

614
00:27:26,040 --> 00:27:28,400
Speaker 1: is that you're getting into. By going like, I don't

615
00:27:28,440 --> 00:27:29,919
Speaker 1: just want you to think about, well, no, this is

616
00:27:29,960 --> 00:27:31,480
Speaker 1: important to us, and this is what we're gonna do.

617
00:27:31,560 --> 00:27:33,200
Speaker 1: We'll find a way to make it work. And while

618
00:27:33,240 --> 00:27:35,280
Speaker 1: that might be true, if you do it, you will

619
00:27:35,320 --> 00:27:37,439
Speaker 1: find a way to make this work. I want you

620
00:27:37,520 --> 00:27:39,800
Speaker 1: to be able to know what you're getting into, to

621
00:27:39,840 --> 00:27:43,119
Speaker 1: be able to boldly make that decision. Your eyes are

622
00:27:43,160 --> 00:27:45,600
Speaker 1: wide open, and then man, go for it, go after it.

623
00:27:45,760 --> 00:27:47,560
Speaker 1: As long as you have taken those steps and you've

624
00:27:47,600 --> 00:27:48,200
Speaker 1: crunched the numbers.

625
00:27:48,200 --> 00:27:50,760
Speaker 2: It makes me think too that I don't know if

626
00:27:50,880 --> 00:27:52,960
Speaker 2: this basement or in no should cost sixty grand. I mean,

627
00:27:53,000 --> 00:27:55,280
Speaker 2: I guess it depends on what's going into it, but.

628
00:27:55,760 --> 00:27:58,320
Speaker 1: Say like a living a bed, and a bath. Yeah

629
00:27:58,320 --> 00:28:00,760
Speaker 1: as well, So I mean that sounds reasonable. Yeah, scens reasons.

630
00:28:00,800 --> 00:28:03,160
Speaker 2: But also think about, well, I don't know if I'm

631
00:28:03,200 --> 00:28:05,840
Speaker 2: going to get some some of the materials at like

632
00:28:05,960 --> 00:28:08,000
Speaker 2: the Habitat for Humanity restore.

633
00:28:08,760 --> 00:28:11,239
Speaker 1: Think about all the basement. No one sees this, it's

634
00:28:11,320 --> 00:28:12,160
Speaker 1: just the extra bedroom.

635
00:28:12,240 --> 00:28:14,040
Speaker 2: Think about the ways that you can cut a couple

636
00:28:14,119 --> 00:28:16,800
Speaker 2: grand off the cost here and there, and heck, maybe

637
00:28:16,840 --> 00:28:20,000
Speaker 2: you get the sixty thousand dollars reno down to forty

638
00:28:20,040 --> 00:28:22,399
Speaker 2: eight thousand dollars and you've saved up ten grands, so

639
00:28:22,440 --> 00:28:24,399
Speaker 2: all you're borrowing is thirty eight. Then I don't know

640
00:28:24,440 --> 00:28:27,040
Speaker 2: anything you can do to reduce the amount of money

641
00:28:27,200 --> 00:28:30,119
Speaker 2: that you're paying nine percent interest rate for for years

642
00:28:30,119 --> 00:28:33,840
Speaker 2: to come the better, So just maybe leave no stone

643
00:28:33,920 --> 00:28:37,040
Speaker 2: unturned on that so in order to just reduce the cost.

644
00:28:37,040 --> 00:28:38,840
Speaker 2: And you're right, Matt, the basement, it's like, it's not

645
00:28:38,880 --> 00:28:42,120
Speaker 2: like you're renovating the half bath on the main floor

646
00:28:42,160 --> 00:28:44,160
Speaker 2: that every guest uses and you're like, yeah, I want

647
00:28:44,160 --> 00:28:47,520
Speaker 2: the finest tile something like that, or a really nice sink.

648
00:28:48,000 --> 00:28:51,280
Speaker 1: It probably is can be a little more utilitarian down

649
00:28:51,320 --> 00:28:53,840
Speaker 1: in the basement. Yeah, and even this is good. I

650
00:28:53,840 --> 00:28:55,000
Speaker 1: don't know, I'm afraid this is going to sound a

651
00:28:55,000 --> 00:28:57,360
Speaker 1: little ratchet, but like, get what it is that you

652
00:28:57,480 --> 00:29:00,479
Speaker 1: need completed, completed, but then after that maybe you can

653
00:29:00,560 --> 00:29:02,640
Speaker 1: even start to click cash flow more of it. Right,

654
00:29:02,680 --> 00:29:05,160
Speaker 1: So let's say you put twenty into it. You're able

655
00:29:05,200 --> 00:29:06,920
Speaker 1: to use a space for what it is that you

656
00:29:06,960 --> 00:29:08,760
Speaker 1: want to use it for. But then maybe maybe over

657
00:29:08,760 --> 00:29:12,200
Speaker 1: the next couple of years you're able to cash flow

658
00:29:12,280 --> 00:29:15,360
Speaker 1: that thing. You've got that home equity available to you,

659
00:29:15,400 --> 00:29:18,240
Speaker 1: but you're not tapping that, and then you're gonna be

660
00:29:18,240 --> 00:29:20,520
Speaker 1: able to avoid paying an additional five or ten thousand

661
00:29:20,600 --> 00:29:23,640
Speaker 1: dollars in interest payments because it's something that you've been

662
00:29:23,680 --> 00:29:24,360
Speaker 1: able to avoid.

663
00:29:24,440 --> 00:29:26,600
Speaker 2: And don't sleep on Facebook Marketplace. I had a buddy

664
00:29:26,640 --> 00:29:29,640
Speaker 2: who just did a massive innovation, and he kept barking

665
00:29:29,680 --> 00:29:31,120
Speaker 2: at me about all the deals he was getting on

666
00:29:31,120 --> 00:29:33,440
Speaker 2: Facebook marketplace. Do you remember what's the best deal that's

667
00:29:33,560 --> 00:29:35,560
Speaker 2: still to you? I mean a range is one of

668
00:29:35,560 --> 00:29:38,160
Speaker 2: the things that he highlighted. He got like a really really.

669
00:29:38,000 --> 00:29:40,360
Speaker 1: Nice one and miking or a bluestar. It was something

670
00:29:40,400 --> 00:29:41,880
Speaker 1: I don't know what it was called wolf maybe is

671
00:29:41,880 --> 00:29:44,560
Speaker 1: what it was. I want to say, say it with

672
00:29:44,600 --> 00:29:46,880
Speaker 1: a V. I forget how much it was both supposed

673
00:29:46,880 --> 00:29:47,240
Speaker 1: to cost.

674
00:29:47,320 --> 00:29:49,040
Speaker 2: I want to say it was like a twenty thousand

675
00:29:49,080 --> 00:29:51,320
Speaker 2: dollars range, some crazy something like that, and he got

676
00:29:51,320 --> 00:29:52,640
Speaker 2: it for like less than half the price.

677
00:29:52,720 --> 00:29:56,160
Speaker 1: So even still, I know it's still expensive. Oh my gosh,

678
00:29:56,360 --> 00:30:00,320
Speaker 1: but I mean rich friends, he's got high intaste. It's

679
00:30:00,320 --> 00:30:01,000
Speaker 1: so expensive.

680
00:30:01,040 --> 00:30:03,560
Speaker 2: He's really storing like this beautiful old house and so

681
00:30:03,600 --> 00:30:05,959
Speaker 2: it's it fits in nicely.

682
00:30:06,040 --> 00:30:08,120
Speaker 1: But yes, you've had kids cooking touris for my blood.

683
00:30:08,120 --> 00:30:10,120
Speaker 1: You know what kind of stove we're cooking on over

684
00:30:10,720 --> 00:30:13,520
Speaker 1: It's one of them, like six hundred ones. So like

685
00:30:13,520 --> 00:30:15,440
Speaker 1: they got the electric although I will say with you

686
00:30:15,480 --> 00:30:17,480
Speaker 1: already the fancy stuff to make good tasting food and

687
00:30:17,600 --> 00:30:19,120
Speaker 1: that's what you need to keep in mind, Like, this

688
00:30:19,160 --> 00:30:21,040
Speaker 1: doesn't need to be a fancy space in order to

689
00:30:21,120 --> 00:30:22,840
Speaker 1: be able to grow your family. There's ways you can

690
00:30:22,880 --> 00:30:25,040
Speaker 1: do it, do it on the cheap. I'll quickly share

691
00:30:25,160 --> 00:30:27,920
Speaker 1: that adding a gas range to our project. We just

692
00:30:27,960 --> 00:30:30,280
Speaker 1: realized that might be something that we're in that we're

693
00:30:30,320 --> 00:30:34,960
Speaker 1: doing because our current electric range. We need the space

694
00:30:35,120 --> 00:30:37,640
Speaker 1: on the electrical panel because that it takes a whole

695
00:30:37,640 --> 00:30:41,240
Speaker 1: lot of amps to power the electric stove. And we're

696
00:30:41,280 --> 00:30:43,000
Speaker 1: talking it through and she's like, all right, we're like

697
00:30:43,080 --> 00:30:44,640
Speaker 1: right on the edge as to the amount of space

698
00:30:44,680 --> 00:30:47,080
Speaker 1: we need from an electrical standpoint, and our GC pointed

699
00:30:47,080 --> 00:30:50,600
Speaker 1: out that, hey, actually, if you don't have an electric range,

700
00:30:50,600 --> 00:30:53,400
Speaker 1: if instead it was gas, we could it wouldn't need

701
00:30:53,400 --> 00:30:56,200
Speaker 1: to be on that dedicated whatever breaker. When the HVAT

702
00:30:56,200 --> 00:30:58,680
Speaker 1: guy shows up to run natural gas to the new furnace,

703
00:30:58,760 --> 00:31:00,280
Speaker 1: maybe you run a line up there. And all this

704
00:31:00,320 --> 00:31:03,920
Speaker 1: time Kate's like her eyes got big, and she's like, oh, yes, yes, please,

705
00:31:04,200 --> 00:31:05,560
Speaker 1: this is going to save this money, babe. Don't you

706
00:31:05,640 --> 00:31:09,360
Speaker 1: understand you gotta spend some money to save some money.

707
00:31:09,400 --> 00:31:12,400
Speaker 1: I guess sometimes sometimes. All right, now, let's get to

708
00:31:12,480 --> 00:31:15,400
Speaker 1: another question. This one comes from a listener who's got

709
00:31:15,680 --> 00:31:18,960
Speaker 1: a retirement trade off question as he and his family

710
00:31:19,040 --> 00:31:19,920
Speaker 1: are set to move.

711
00:31:20,600 --> 00:31:23,160
Speaker 5: Hi Matt Angel, I'm kid from North Carolina and I

712
00:31:23,200 --> 00:31:25,800
Speaker 5: have a question regarding my wife's pension payout and an

713
00:31:25,800 --> 00:31:29,720
Speaker 5: IRA conversion. For some background, I'm in a PhD program

714
00:31:29,920 --> 00:31:33,400
Speaker 5: in chemistry and my wife is a school teacher. By default,

715
00:31:33,440 --> 00:31:36,960
Speaker 5: six percent of her salary goes toward our state's pension plan,

716
00:31:37,560 --> 00:31:40,160
Speaker 5: but in order to become fully vested in that plan,

717
00:31:40,320 --> 00:31:43,680
Speaker 5: she needs five years of service. I'm currently on track

718
00:31:43,800 --> 00:31:46,960
Speaker 5: to graduate later this year, which comes with a decent

719
00:31:47,040 --> 00:31:51,360
Speaker 5: probability of moving out of state, which means that once

720
00:31:51,400 --> 00:31:54,040
Speaker 5: we move, she will only have four years of service

721
00:31:54,120 --> 00:31:57,480
Speaker 5: contributed to the pension. She will she will be paid

722
00:31:57,520 --> 00:32:00,480
Speaker 5: out all of her contributions and growth that has happened

723
00:32:00,880 --> 00:32:03,400
Speaker 5: since she was hired, which will total around ten to

724
00:32:03,400 --> 00:32:06,560
Speaker 5: fifteen thousand dollars. I'm currently trying to look at two

725
00:32:06,560 --> 00:32:09,200
Speaker 5: options of where to put this money. One to put

726
00:32:09,200 --> 00:32:12,320
Speaker 5: this money into a traditional IRA through fidelity where we

727
00:32:12,400 --> 00:32:15,360
Speaker 5: both currently have our roths, or two to put this

728
00:32:15,440 --> 00:32:18,320
Speaker 5: money into her roth IRA and eat the tax bill

729
00:32:18,440 --> 00:32:21,000
Speaker 5: during the first year of my new higher paying job.

730
00:32:21,800 --> 00:32:24,760
Speaker 5: I'm leaning towards option two, as it is pretty likely

731
00:32:24,840 --> 00:32:27,880
Speaker 5: that because of the field I'm going into, our household

732
00:32:28,080 --> 00:32:31,440
Speaker 5: income may one day be over the limit to qualify

733
00:32:31,520 --> 00:32:34,240
Speaker 5: for ROTH contributions, and I would like to have the

734
00:32:34,320 --> 00:32:36,920
Speaker 5: backdoor WRATH as an option for her down the road.

735
00:32:37,400 --> 00:32:39,480
Speaker 5: I'm not sure though, if it makes sense to do

736
00:32:39,560 --> 00:32:42,320
Speaker 5: the conversion and pay the taxes or to go with

737
00:32:42,400 --> 00:32:44,440
Speaker 5: option one and wait to see if she's able to

738
00:32:44,560 --> 00:32:47,520
Speaker 5: roll those funds over into a new employer's four oh

739
00:32:47,560 --> 00:32:50,800
Speaker 5: one K or four fifty seven B plan after we move.

740
00:32:51,480 --> 00:32:53,360
Speaker 5: I am twenty eight and she is twenty six, so

741
00:32:53,400 --> 00:32:55,080
Speaker 5: we still have a lot of years before we plan

742
00:32:55,160 --> 00:32:58,840
Speaker 5: to retire. And I appreciate whatever advice you may have

743
00:32:59,000 --> 00:33:01,760
Speaker 5: on this topic. Thank you, and I love the podcast.

744
00:33:02,160 --> 00:33:04,280
Speaker 1: All right. Sounds like Kaide sitting in the catbird's heat.

745
00:33:04,320 --> 00:33:06,280
Speaker 1: Joel sounds like he's got a few options here laid

746
00:33:06,280 --> 00:33:09,760
Speaker 1: out before him. He's got a wife with a solid job.

747
00:33:09,800 --> 00:33:12,600
Speaker 1: He's got a pension, which is totally awesome. That's actually

748
00:33:12,640 --> 00:33:15,560
Speaker 1: that was a prerequisite for me marrying my wife. You've

749
00:33:15,600 --> 00:33:17,560
Speaker 1: got to like you got to come to the table's

750
00:33:18,360 --> 00:33:20,800
Speaker 1: dowry slash pension. It was all part of that pre

751
00:33:20,880 --> 00:33:24,000
Speaker 1: marriage negotiation, Matt, I will say, so his wife's pension

752
00:33:24,000 --> 00:33:27,520
Speaker 1: story is not uncommon. The days of staying in one

753
00:33:27,520 --> 00:33:31,000
Speaker 1: place for like decades, for like thirty years and getting

754
00:33:31,040 --> 00:33:34,680
Speaker 1: the max eligible pension. That's incredibly rare these days. It's

755
00:33:34,720 --> 00:33:37,040
Speaker 1: just not how folks are living their life. And for

756
00:33:37,120 --> 00:33:40,480
Speaker 1: folks or how businesses are living their lives, or exactly me,

757
00:33:40,520 --> 00:33:44,120
Speaker 1: they're like getting yanked left and right. But even for

758
00:33:44,120 --> 00:33:47,200
Speaker 1: folks who do have access to a pension for a while,

759
00:33:47,240 --> 00:33:49,120
Speaker 1: like they just may not be there long enough to

760
00:33:49,200 --> 00:33:51,640
Speaker 1: receive any benefit that's going to kind of move the

761
00:33:51,680 --> 00:33:54,200
Speaker 1: needle for them off in the future. We've actually had

762
00:33:54,200 --> 00:33:56,960
Speaker 1: some questions from some New Yorkers working in public service

763
00:33:57,160 --> 00:34:00,760
Speaker 1: who have a choice between a pension and four K

764
00:34:01,200 --> 00:34:04,320
Speaker 1: like product that we almost always well recommend the latter,

765
00:34:04,640 --> 00:34:05,440
Speaker 1: not the pension.

766
00:34:05,680 --> 00:34:09,440
Speaker 2: All right, So in this case, in Kaid's particular situation,

767
00:34:10,640 --> 00:34:12,280
Speaker 2: your wife is still going to be due some money

768
00:34:12,280 --> 00:34:14,239
Speaker 2: for her years of service, which is great, I mean,

769
00:34:14,320 --> 00:34:14,879
Speaker 2: that's the.

770
00:34:14,800 --> 00:34:17,480
Speaker 1: Way it should be. But what should you guys do

771
00:34:17,560 --> 00:34:19,840
Speaker 1: with those funds? Should you go wroth traditional should you

772
00:34:19,880 --> 00:34:22,759
Speaker 1: hold off? And this is in some ways, Matt kind

773
00:34:22,800 --> 00:34:26,239
Speaker 1: of a classic personal finance question. And it's interesting. We've

774
00:34:26,239 --> 00:34:28,560
Speaker 1: had different guests on the show who have said different things,

775
00:34:29,040 --> 00:34:32,360
Speaker 1: and I think you think there's some nuance to this argument.

776
00:34:32,520 --> 00:34:35,759
Speaker 1: It depends on some of the details. Some previous guests

777
00:34:35,760 --> 00:34:39,000
Speaker 1: would say roth, no matter what, always in forever. If

778
00:34:39,000 --> 00:34:41,200
Speaker 1: you have access to contribute money to a roth, that'd

779
00:34:41,200 --> 00:34:42,879
Speaker 1: be the ed slots of the world. That's right.

780
00:34:42,920 --> 00:34:44,960
Speaker 2: But then on the other side of the coin, some

781
00:34:45,400 --> 00:34:48,719
Speaker 2: of our former guests would say, always traditional. You can

782
00:34:48,800 --> 00:34:53,839
Speaker 2: plan better because you can essentially dial in your tax

783
00:34:53,880 --> 00:34:57,279
Speaker 2: bracket in future years by going traditional, and you can

784
00:34:57,320 --> 00:34:58,080
Speaker 2: always convert to a.

785
00:34:58,120 --> 00:35:00,520
Speaker 1: Roth down the road, as the Sean mulaney are. That's right.

786
00:35:00,560 --> 00:35:03,400
Speaker 2: So I think there's wisdom potentially on both sides of

787
00:35:03,400 --> 00:35:05,840
Speaker 2: the aisle, and so yes, there's nuance. There's debating this,

788
00:35:05,920 --> 00:35:08,920
Speaker 2: and rightly so, I tend to agree with Kid's analysis

789
00:35:08,920 --> 00:35:12,520
Speaker 2: here of putting this money into her wroth IRA and

790
00:35:12,719 --> 00:35:16,759
Speaker 2: just paying the fairly known tax bill. Since you've got

791
00:35:16,760 --> 00:35:18,839
Speaker 2: the ability to do so, I think why not get

792
00:35:18,880 --> 00:35:21,520
Speaker 2: more money into the wroth. I also just don't think

793
00:35:21,520 --> 00:35:24,520
Speaker 2: this decision needs to be a complex one, and I

794
00:35:24,640 --> 00:35:27,840
Speaker 2: typically just air towards the side of the wroth allah

795
00:35:27,920 --> 00:35:29,080
Speaker 2: at slot myself.

796
00:35:28,880 --> 00:35:31,520
Speaker 1: Kind to take the simplicity route. Yeah, And the reason

797
00:35:31,560 --> 00:35:34,320
Speaker 1: for that too is because you might not be able

798
00:35:34,360 --> 00:35:36,560
Speaker 1: to contribute in the future. And this is something you mentioned,

799
00:35:36,560 --> 00:35:38,479
Speaker 1: which this is actually a great problem to have because

800
00:35:38,480 --> 00:35:40,400
Speaker 1: it means you're going to be crushing it on the

801
00:35:40,400 --> 00:35:42,880
Speaker 1: income side. But if that is where things are headed,

802
00:35:42,920 --> 00:35:45,319
Speaker 1: it means funding the wroth to the max while you

803
00:35:45,400 --> 00:35:48,719
Speaker 1: can like right now, it's even more important because if

804
00:35:48,760 --> 00:35:51,680
Speaker 1: you foresee significant income escalation, taking that bird in the

805
00:35:51,719 --> 00:35:55,799
Speaker 1: hand from a tax perspective, that seems super wise. Why

806
00:35:55,800 --> 00:35:58,080
Speaker 1: not load up on the wroth in the years where

807
00:35:58,080 --> 00:36:00,520
Speaker 1: you can, where it's even available to you, where you

808
00:36:00,560 --> 00:36:03,200
Speaker 1: are eligible for it, and then you can take the

809
00:36:03,320 --> 00:36:06,160
Speaker 1: traditional route to save on taxes when your income is

810
00:36:06,280 --> 00:36:07,239
Speaker 1: sky high At that point.

811
00:36:07,280 --> 00:36:08,920
Speaker 2: Makes me think, man, if I had the offer of

812
00:36:09,040 --> 00:36:11,520
Speaker 2: eating as much brisket as I wanted to because I

813
00:36:11,520 --> 00:36:13,839
Speaker 2: wouldn't be able to eat it for a whole year

814
00:36:13,960 --> 00:36:15,880
Speaker 2: or something like that, I'm going to load up on

815
00:36:16,000 --> 00:36:18,560
Speaker 2: as much and I'm going to remember that day, probably

816
00:36:18,600 --> 00:36:20,120
Speaker 2: with fondness and a little bit of regret, because I

817
00:36:20,120 --> 00:36:23,000
Speaker 2: probably would have overdone it, and don't forget you do

818
00:36:23,040 --> 00:36:25,399
Speaker 2: have to be prepared to pay tax come April next year.

819
00:36:25,440 --> 00:36:27,799
Speaker 2: You mentioned you mentioned that, and you mentioned that you

820
00:36:28,200 --> 00:36:30,960
Speaker 2: had that cash on hand, which is great, So just

821
00:36:30,960 --> 00:36:32,560
Speaker 2: make sure to keep that cash on hand. It's probably

822
00:36:32,560 --> 00:36:35,239
Speaker 2: going to be I'm guessing a few thousand dollars, which

823
00:36:35,280 --> 00:36:37,719
Speaker 2: isn't insane, but you don't want to not have it

824
00:36:37,760 --> 00:36:39,839
Speaker 2: when the time comes. And the other reason I think

825
00:36:39,840 --> 00:36:42,080
Speaker 2: Matt to go straight to roth despite having to pay

826
00:36:42,120 --> 00:36:45,720
Speaker 2: taxes now is the backdoor wroth option that Kid mentioned,

827
00:36:45,880 --> 00:36:48,200
Speaker 2: because if you have money sitting in a traditional ira,

828
00:36:48,360 --> 00:36:50,799
Speaker 2: it just makes that move more complicated. And I like

829
00:36:50,840 --> 00:36:53,920
Speaker 2: the idea of not having money in a traditional ira

830
00:36:54,280 --> 00:36:57,280
Speaker 2: having it all in the wroth for simplicity's sake. From

831
00:36:57,360 --> 00:36:58,759
Speaker 2: that sort of money maneuver too.

832
00:36:59,000 --> 00:37:01,680
Speaker 1: I think it's highlighting here like he's did he say

833
00:37:01,680 --> 00:37:04,400
Speaker 1: he's a chemist, like and he's finishing, like he's getting

834
00:37:04,400 --> 00:37:06,600
Speaker 1: his PhD or something like that, he is going to

835
00:37:06,640 --> 00:37:08,319
Speaker 1: be making bank. And if you think that at some

836
00:37:08,400 --> 00:37:10,120
Speaker 1: point you're not going to be able to contribute to

837
00:37:10,200 --> 00:37:14,560
Speaker 1: a roth ira married filing filing jointly, that means I

838
00:37:14,560 --> 00:37:16,200
Speaker 1: mean this year at least like your that means your

839
00:37:16,200 --> 00:37:17,640
Speaker 1: income is going to be getting close to two hundred

840
00:37:17,640 --> 00:37:20,520
Speaker 1: and fifty thousand dollars, which again, great problem to have.

841
00:37:21,160 --> 00:37:23,439
Speaker 1: But what I'm pointing out here is that we're talking

842
00:37:23,440 --> 00:37:27,000
Speaker 1: about ten to fifteen thousand dollars. It's not a large

843
00:37:27,000 --> 00:37:29,200
Speaker 1: amount of money. Right now, it seems like it's a

844
00:37:29,239 --> 00:37:32,200
Speaker 1: large amount of money because you're still in school and

845
00:37:32,239 --> 00:37:34,520
Speaker 1: you're maybe you've only been living off of one income

846
00:37:34,560 --> 00:37:36,360
Speaker 1: and that income has been a teacher salary. But like

847
00:37:36,360 --> 00:37:37,839
Speaker 1: ten years from now, kid, that's going to be your

848
00:37:37,880 --> 00:37:41,319
Speaker 1: caviar budget. You know, future Caid is going to be

849
00:37:41,400 --> 00:37:45,879
Speaker 1: looking back at twenty seven, twenty eight year old Kaid thinking, Man,

850
00:37:45,960 --> 00:37:48,920
Speaker 1: I'm glad he made the right decision. But also future

851
00:37:48,960 --> 00:37:51,040
Speaker 1: kid is going to say to himself, I'm so glad

852
00:37:51,080 --> 00:37:53,040
Speaker 1: he didn't he didn't sweat the details when it came

853
00:37:53,080 --> 00:37:55,920
Speaker 1: to this, because yeah, I got that PhD in chemistry

854
00:37:55,920 --> 00:37:58,960
Speaker 1: and I'm working for the big chemistry company. I don't

855
00:37:59,000 --> 00:38:01,480
Speaker 1: know what chemistry. I don't know anything about kreem or

856
00:38:01,520 --> 00:38:02,239
Speaker 1: something like that. I don't know.

857
00:38:02,440 --> 00:38:04,560
Speaker 2: Oh yeah, and it's just a drop in the bucket

858
00:38:04,600 --> 00:38:06,600
Speaker 2: for the down payment on his yacht.

859
00:38:06,680 --> 00:38:09,440
Speaker 1: Yeah, I mean when you're making bank smaller amounts like that,

860
00:38:09,680 --> 00:38:12,160
Speaker 1: they don't quite matter as much. But I taking the

861
00:38:12,200 --> 00:38:15,759
Speaker 1: proper steps, digging into it, doing some research. Now. I

862
00:38:16,360 --> 00:38:18,799
Speaker 1: don't want to at all discount the effort that you're

863
00:38:18,800 --> 00:38:20,600
Speaker 1: putting into this right now, because you are doing the

864
00:38:20,640 --> 00:38:21,040
Speaker 1: smart thing.

865
00:38:21,120 --> 00:38:22,799
Speaker 2: Yeah, and so much of what you're trying to do

866
00:38:22,800 --> 00:38:26,320
Speaker 2: in this too is you're trying to potentially project future

867
00:38:26,360 --> 00:38:29,200
Speaker 2: tax rates in the United States, and you're also trying

868
00:38:29,200 --> 00:38:31,839
Speaker 2: to project your own future earnings, which neither of which

869
00:38:31,880 --> 00:38:34,560
Speaker 2: you can do perfectly. Of course, so we're all at

870
00:38:34,640 --> 00:38:36,880
Speaker 2: least partially shooting in the dark with a question like this,

871
00:38:37,200 --> 00:38:39,640
Speaker 2: But I think with that shot in the dark, there

872
00:38:39,680 --> 00:38:42,880
Speaker 2: are like shadows that we can see of future income

873
00:38:42,960 --> 00:38:45,279
Speaker 2: of what's going to happen with tax rates, even though

874
00:38:45,320 --> 00:38:48,200
Speaker 2: we can't see anywhere close to perfectly. All you can

875
00:38:48,200 --> 00:38:50,040
Speaker 2: do is make the best decision with the information you

876
00:38:50,080 --> 00:38:52,200
Speaker 2: currently have, and I would take the Roth position. I

877
00:38:52,239 --> 00:38:54,520
Speaker 2: actually did take the Wroth position, Matt. We talked about

878
00:38:54,520 --> 00:38:57,200
Speaker 2: this on the show, a cash out of a pension

879
00:38:57,640 --> 00:39:00,799
Speaker 2: that I had instead of it just seemed after running

880
00:39:00,800 --> 00:39:02,520
Speaker 2: the numbers, that was the best decision for me instead

881
00:39:02,520 --> 00:39:04,920
Speaker 2: of waiting to take the monthly payment of sixty five boom,

882
00:39:05,040 --> 00:39:08,880
Speaker 2: take the ROTH contribution, lump some invest that stuff, and

883
00:39:08,920 --> 00:39:11,200
Speaker 2: then watch it grow over decades to come, and never

884
00:39:11,200 --> 00:39:12,680
Speaker 2: have to pay tax on it again in the future.

885
00:39:12,760 --> 00:39:14,799
Speaker 2: I'm gonna have to pay tax in just a couple

886
00:39:14,840 --> 00:39:16,920
Speaker 2: of months at tax time. But I went into that

887
00:39:16,960 --> 00:39:18,879
Speaker 2: eyes wide open knowing that was going to be the case,

888
00:39:19,080 --> 00:39:21,279
Speaker 2: and I'm glad that I made that decision, even though

889
00:39:21,320 --> 00:39:24,640
Speaker 2: I can't say that it's the most optimized move to make,

890
00:39:24,680 --> 00:39:27,279
Speaker 2: because I'll only know that in retrospect, I can only

891
00:39:27,280 --> 00:39:29,759
Speaker 2: go based on kind of history and the data I

892
00:39:29,800 --> 00:39:30,319
Speaker 2: have on hand.

893
00:39:30,360 --> 00:39:32,239
Speaker 1: Although I will say I just thought something else, which

894
00:39:32,280 --> 00:39:35,759
Speaker 1: is that he mentioned paying the tax bill within during

895
00:39:35,800 --> 00:39:38,800
Speaker 1: his first year of employment after he gets his degree,

896
00:39:38,840 --> 00:39:40,640
Speaker 1: because that's what's going to force him to move. And

897
00:39:40,680 --> 00:39:43,120
Speaker 1: I have no idea about the pension that your wife has,

898
00:39:43,160 --> 00:39:44,759
Speaker 1: but if there's any way for her to cash out

899
00:39:44,840 --> 00:39:48,319
Speaker 1: sooner while you are only making a single salary, a

900
00:39:48,320 --> 00:39:50,080
Speaker 1: teacher salary, and you have the ability to pay the

901
00:39:50,080 --> 00:39:53,160
Speaker 1: taxes at that lower tax rate, I'd be interested in

902
00:39:53,280 --> 00:39:55,400
Speaker 1: somehow seeing if I could maneuver that. I don't know

903
00:39:55,400 --> 00:39:57,520
Speaker 1: if that may not even be an option. But again,

904
00:39:57,560 --> 00:39:59,399
Speaker 1: I just thought of the fact that you talked about

905
00:39:59,400 --> 00:40:03,040
Speaker 1: paying taxes with that new, bigger salary after you've moved.

906
00:40:03,280 --> 00:40:05,160
Speaker 1: But if there's any way to avoid that, I would

907
00:40:05,200 --> 00:40:08,359
Speaker 1: certainly be looking into that. Yeah, but Joel, you've got

908
00:40:08,360 --> 00:40:10,080
Speaker 1: more to get to. We are going to hear from

909
00:40:10,120 --> 00:40:12,759
Speaker 1: a listener who's looking to invest in a way that's

910
00:40:12,800 --> 00:40:15,840
Speaker 1: going to get him some guaranteed returns? Is it even possible?

911
00:40:15,920 --> 00:40:17,480
Speaker 1: We'll get to that more right after this.

912
00:40:25,320 --> 00:40:28,239
Speaker 2: We're back from the break, still taking your money questions. Man,

913
00:40:28,239 --> 00:40:30,160
Speaker 2: we got to get to the Facebook question of the week.

914
00:40:30,200 --> 00:40:32,759
Speaker 2: This comes from the how to Money Facebook group, which

915
00:40:32,760 --> 00:40:36,720
Speaker 2: if you're on Facebook and you want like minded folks

916
00:40:36,840 --> 00:40:39,920
Speaker 2: to offer money advice and to help help your fellow

917
00:40:39,960 --> 00:40:42,400
Speaker 2: listener out, you can just type in how to money

918
00:40:42,520 --> 00:40:44,640
Speaker 2: in Facebook and you'll find that how to Money Facebook group.

919
00:40:45,040 --> 00:40:46,600
Speaker 1: It's a check full of awesome folks.

920
00:40:46,640 --> 00:40:49,279
Speaker 2: All right, Matt, This question comes from Melissa. She says,

921
00:40:49,360 --> 00:40:51,440
Speaker 2: I'm living paycheck to paycheck and I'm not sure if

922
00:40:51,440 --> 00:40:54,280
Speaker 2: I should try to save or pay off high interest

923
00:40:54,480 --> 00:40:59,080
Speaker 2: credit card debt. This is a classic personal finance question, too, right.

924
00:40:59,560 --> 00:41:02,480
Speaker 2: I gotta say I'm sorry to hear this, Melissa, that

925
00:41:02,520 --> 00:41:04,839
Speaker 2: you're living paycheck to paycheck, And I don't know, Matt

926
00:41:04,880 --> 00:41:07,560
Speaker 2: how reliable. The stats are about like fifty to sixty

927
00:41:07,600 --> 00:41:10,080
Speaker 2: percent of Americans living paycheck to paycheck. That's the stat

928
00:41:10,440 --> 00:41:13,359
Speaker 2: we see every single year. I've seen some debunking of

929
00:41:13,360 --> 00:41:16,400
Speaker 2: that claim that more Americans actually have more cash on

930
00:41:16,440 --> 00:41:18,640
Speaker 2: hand than they let on and in some of those surveys,

931
00:41:18,680 --> 00:41:21,880
Speaker 2: or that the surveys that are done just aren't thorough enough.

932
00:41:21,920 --> 00:41:25,280
Speaker 1: It's the hardhearted researchers who are like, oh, they're fine.

933
00:41:25,800 --> 00:41:28,200
Speaker 1: I don't think that's what they're attempting to do. I think, okay, yeah, yeah.

934
00:41:28,200 --> 00:41:30,560
Speaker 2: I just think it's the ones who they stand to

935
00:41:30,560 --> 00:41:34,000
Speaker 2: benefit from the headlines of making it sound like more

936
00:41:34,239 --> 00:41:36,880
Speaker 2: Americans are living on the financial precipice. They just don't

937
00:41:36,880 --> 00:41:40,280
Speaker 2: have a detailed enough methodology in the look doing the survey.

938
00:41:40,719 --> 00:41:43,040
Speaker 2: But still that doesn't mean there's not too much of

939
00:41:43,040 --> 00:41:45,880
Speaker 2: the country who is living paycheck to paycheck, and it's

940
00:41:45,880 --> 00:41:47,880
Speaker 2: a real thing. They'd be utterly devastated if they were

941
00:41:47,880 --> 00:41:50,399
Speaker 2: to miss a single paycheck, which is something we want

942
00:41:50,400 --> 00:41:53,360
Speaker 2: people to avoid. You and I can't fix the tragic reality,

943
00:41:53,440 --> 00:41:55,160
Speaker 2: but we are trying to do our part when it

944
00:41:55,160 --> 00:41:58,279
Speaker 2: comes to financial literacy, because it does make us sick

945
00:41:58,360 --> 00:42:00,239
Speaker 2: realizing that there are a lot of people who are

946
00:42:00,239 --> 00:42:03,000
Speaker 2: in that situation. And the truth is there are actually

947
00:42:03,080 --> 00:42:05,960
Speaker 2: a lot more individuals in this situation who can do

948
00:42:06,360 --> 00:42:09,000
Speaker 2: more than they think about it. You know, the state

949
00:42:09,000 --> 00:42:11,680
Speaker 2: of financial literacy in this country is dismal, but a

950
00:42:11,719 --> 00:42:14,319
Speaker 2: little bit of financial literacy in your life, I think

951
00:42:14,600 --> 00:42:16,799
Speaker 2: can go a long way, especially for people kind of

952
00:42:16,800 --> 00:42:18,040
Speaker 2: living on the margins right now.

953
00:42:18,080 --> 00:42:20,479
Speaker 1: Totally, And this question is one of the first ones

954
00:42:20,480 --> 00:42:23,160
Speaker 1: we typically hear from anyone out there who we encounter

955
00:42:23,280 --> 00:42:26,480
Speaker 1: who is in a similar situation to yours, Melissa. And

956
00:42:26,680 --> 00:42:28,760
Speaker 1: the money gears that we created, I think they should

957
00:42:28,760 --> 00:42:32,000
Speaker 1: help to inform the answer to this perfectly and basically

958
00:42:32,320 --> 00:42:34,200
Speaker 1: to just go ahead and answer your question, should you

959
00:42:34,440 --> 00:42:38,400
Speaker 1: save or pay off that high interest credit card debt? Save? First?

960
00:42:38,719 --> 00:42:40,399
Speaker 1: We want you to a mass a two thousand, four

961
00:42:40,520 --> 00:42:44,680
Speaker 1: or sixty seven dollars emergency fund. And this is based

962
00:42:44,680 --> 00:42:47,640
Speaker 1: on old research. Maybe today that's more like three and

963
00:42:47,680 --> 00:42:50,239
Speaker 1: sixty something like that. Yeah, I would be curious to

964
00:42:50,320 --> 00:42:51,960
Speaker 1: run the numbers, maybe to even und it up to

965
00:42:52,080 --> 00:42:54,880
Speaker 1: I don't know, five thousand, but having a base in

966
00:42:54,920 --> 00:42:58,880
Speaker 1: your savings will be able to just alleviate some mental stress.

967
00:42:58,880 --> 00:43:01,600
Speaker 1: It's gonna sure that you can cover an emergency that

968
00:43:01,680 --> 00:43:03,400
Speaker 1: might come along. Because we want you to get rid

969
00:43:03,400 --> 00:43:05,440
Speaker 1: of that credit card debt for sure, but not until

970
00:43:05,760 --> 00:43:09,239
Speaker 1: you've saved up that bare minimum amount where you to

971
00:43:09,280 --> 00:43:12,600
Speaker 1: skip that step in instead and instead start chipping away

972
00:43:12,640 --> 00:43:14,319
Speaker 1: at your credit card debt. Like, yeah, you might make

973
00:43:14,320 --> 00:43:16,759
Speaker 1: a little bit of more progress, but then boom, you

974
00:43:16,800 --> 00:43:19,520
Speaker 1: got that big unexpected expense that comes up. You don't

975
00:43:19,560 --> 00:43:21,760
Speaker 1: have any cash on hand. Yeah, where does that charge go?

976
00:43:21,760 --> 00:43:23,440
Speaker 1: Goes right back on your credit card. It feels like

977
00:43:23,480 --> 00:43:25,680
Speaker 1: you made progress, then you end up sliding back down

978
00:43:25,760 --> 00:43:29,160
Speaker 1: to the same spot. It feels like you extended, extended

979
00:43:29,160 --> 00:43:32,279
Speaker 1: a whole lot of energy. And that's not the sort

980
00:43:32,280 --> 00:43:34,480
Speaker 1: of headspace that we want you in. Like it's like

981
00:43:34,480 --> 00:43:36,480
Speaker 1: shoots and ladders, Matt, Yeah, I guess.

982
00:43:36,520 --> 00:43:36,600
Speaker 5: So.

983
00:43:36,640 --> 00:43:38,200
Speaker 1: It's been a while since I've played. I played with

984
00:43:38,239 --> 00:43:41,040
Speaker 1: my son. He cheats every time. It's adorable, but because

985
00:43:41,040 --> 00:43:44,080
Speaker 1: I just don't think he realizes that cheater. But when

986
00:43:44,120 --> 00:43:46,560
Speaker 1: you start tackling your credit card debt, we want like

987
00:43:47,000 --> 00:43:49,360
Speaker 1: having that cash cushion on hand is going to allow

988
00:43:49,760 --> 00:43:53,080
Speaker 1: for that credit card debt payoff to be permanent, as

989
00:43:53,120 --> 00:43:54,799
Speaker 1: opposed to something that you slide back into.

990
00:43:54,880 --> 00:43:56,480
Speaker 2: But it really is like you hit the ladder, you

991
00:43:56,520 --> 00:43:58,000
Speaker 2: go up, and then you hit a slide and you

992
00:43:58,000 --> 00:44:00,480
Speaker 2: go back down. And that's what it feels like. I

993
00:44:00,520 --> 00:44:03,000
Speaker 2: think if your efforts are to pay off the credit

994
00:44:03,000 --> 00:44:05,880
Speaker 2: card debt without amassing any sort of savings, so I

995
00:44:05,920 --> 00:44:09,000
Speaker 2: do think, yeah, you're right, Matt. That initial emergency fund,

996
00:44:09,040 --> 00:44:11,360
Speaker 2: not the three to six months of expenses yet, just

997
00:44:11,400 --> 00:44:14,160
Speaker 2: that basic, bare bones y fund, that cash in the bank.

998
00:44:14,200 --> 00:44:16,160
Speaker 2: That's the first step. And then the next step is

999
00:44:16,160 --> 00:44:17,960
Speaker 2: to pay off the credit card debt. And depending on

1000
00:44:18,120 --> 00:44:20,040
Speaker 2: how much credit card debt you have, this could be

1001
00:44:20,040 --> 00:44:22,480
Speaker 2: a multi year process. So I just you know, for

1002
00:44:22,600 --> 00:44:24,840
Speaker 2: most people, it takes many, many years to get into

1003
00:44:25,239 --> 00:44:27,439
Speaker 2: a significant amount of credit card debt and then they're like, cool,

1004
00:44:27,480 --> 00:44:28,560
Speaker 2: can I get rid of it in two months? And

1005
00:44:28,560 --> 00:44:30,600
Speaker 2: the answer is typically no, Like, it's gonna take a

1006
00:44:30,640 --> 00:44:33,239
Speaker 2: little bit more of a sustained effort, but we want

1007
00:44:33,280 --> 00:44:35,920
Speaker 2: you to get beyond paying the minimum amount because that

1008
00:44:35,960 --> 00:44:37,800
Speaker 2: would keep you in debt for decades. We talked about

1009
00:44:37,800 --> 00:44:40,680
Speaker 2: this on a recent Friday flight. How you know the

1010
00:44:40,719 --> 00:44:43,240
Speaker 2: average credit card debt, Let's say it's in the neighborhood

1011
00:44:43,239 --> 00:44:45,520
Speaker 2: of ten grand. If you pay the minimum amount every

1012
00:44:45,520 --> 00:44:48,680
Speaker 2: single month, you're talking about multiple decades of being in

1013
00:44:48,719 --> 00:44:50,719
Speaker 2: credit card debt and a lot of interest that you're

1014
00:44:50,719 --> 00:44:53,879
Speaker 2: going to fork over in the meantime, and you're likely

1015
00:44:53,880 --> 00:44:56,000
Speaker 2: going to need to change some habits and reassess your

1016
00:44:56,040 --> 00:44:58,399
Speaker 2: spending too. A bare bones budget is something we talk

1017
00:44:58,440 --> 00:45:00,640
Speaker 2: about on the show We Haven article we'll link to

1018
00:45:00,640 --> 00:45:02,680
Speaker 2: in the show notes about it. It's not for everyone,

1019
00:45:02,800 --> 00:45:05,080
Speaker 2: and it's not for all time, but it could be

1020
00:45:05,200 --> 00:45:08,080
Speaker 2: a big help as like a short term maneuver, essentially

1021
00:45:08,280 --> 00:45:10,359
Speaker 2: to help you grow the gap between what's coming in

1022
00:45:10,640 --> 00:45:12,600
Speaker 2: and what's going out each month. That'll help you make

1023
00:45:12,840 --> 00:45:15,440
Speaker 2: progress on both the savings and the debt payoff fronts

1024
00:45:15,680 --> 00:45:18,799
Speaker 2: more quickly. So maybe a bare bones budget for two

1025
00:45:18,800 --> 00:45:21,520
Speaker 2: to three months, right saying listen, I'm cutting back to

1026
00:45:21,640 --> 00:45:24,160
Speaker 2: the bare minimum so that I can make more rapid

1027
00:45:24,160 --> 00:45:27,520
Speaker 2: progress in this goal. I think that's a good way

1028
00:45:27,560 --> 00:45:29,240
Speaker 2: to handle things for a lot of folks.

1029
00:45:29,280 --> 00:45:31,080
Speaker 1: Totally. And you said that the next step after the

1030
00:45:31,120 --> 00:45:33,120
Speaker 1: emergency fund was to pay off that credit card debt,

1031
00:45:33,160 --> 00:45:35,640
Speaker 1: but technically speaking, if when you look at the money

1032
00:45:35,640 --> 00:45:38,440
Speaker 1: gears and this isn't something that you asked about, Melissa,

1033
00:45:38,480 --> 00:45:41,600
Speaker 1: but make sure that you aren't skipping a match at

1034
00:45:41,640 --> 00:45:44,560
Speaker 1: your employee, at your employer, if that's something that's available

1035
00:45:44,600 --> 00:45:46,840
Speaker 1: to you, because even though you might have some high

1036
00:45:47,120 --> 00:45:50,600
Speaker 1: rate credit card debt, a match is either a one

1037
00:45:50,680 --> 00:45:52,720
Speaker 1: hundred percent return on your money or a fifty percent

1038
00:45:52,760 --> 00:45:55,160
Speaker 1: return on your money. And even with the worst credit

1039
00:45:55,160 --> 00:45:57,520
Speaker 1: cards out there, I got, like a retail like a

1040
00:45:57,520 --> 00:46:00,399
Speaker 1: Macy's credit card or something like that thirty four percent, yeah,

1041
00:46:00,560 --> 00:46:02,959
Speaker 1: or a credit card that has like a penalty interest

1042
00:46:03,040 --> 00:46:06,160
Speaker 1: rate that you're getting slammed with that's still at least

1043
00:46:06,160 --> 00:46:08,120
Speaker 1: twenty percent less than what it is that you'd be

1044
00:46:08,400 --> 00:46:10,160
Speaker 1: making on your money were you to get your match.

1045
00:46:10,200 --> 00:46:12,520
Speaker 1: So keep that in mind. But we understand your focus

1046
00:46:12,560 --> 00:46:15,640
Speaker 1: on savings and eliminating that credit card debt because it

1047
00:46:15,640 --> 00:46:18,000
Speaker 1: feels like the thing that is most urgent. But don't

1048
00:46:18,000 --> 00:46:21,759
Speaker 1: forget about the four to one K match. Assuming though,

1049
00:46:21,840 --> 00:46:25,040
Speaker 1: that you are now moving on to that debt payoff phase,

1050
00:46:25,640 --> 00:46:27,480
Speaker 1: like Joel said, this could take a really long time,

1051
00:46:27,880 --> 00:46:30,759
Speaker 1: and as you're trying to find ways to maybe optimize

1052
00:46:30,800 --> 00:46:33,240
Speaker 1: the best way to pay that down. We would recommend

1053
00:46:33,280 --> 00:46:36,360
Speaker 1: for you to check out a website called undebt dot

1054
00:46:36,480 --> 00:46:39,680
Speaker 1: it so it's undebted and in order to create a

1055
00:46:39,760 --> 00:46:42,320
Speaker 1: plan as to whether you should be taking more of

1056
00:46:42,360 --> 00:46:45,160
Speaker 1: the snowball method, whether it's more of an avalanche method,

1057
00:46:45,200 --> 00:46:48,319
Speaker 1: maybe a mixture of the two. If you are in

1058
00:46:48,400 --> 00:46:52,120
Speaker 1: completely overwhelming amounts of credit card debt, we would recommend

1059
00:46:52,280 --> 00:46:55,520
Speaker 1: to reach out to an organization like Money Management International.

1060
00:46:56,320 --> 00:46:58,640
Speaker 1: But all that to say, keep listening to the show,

1061
00:46:58,960 --> 00:47:02,279
Speaker 1: keep asking questions over in the Facebook group, and we

1062
00:47:02,280 --> 00:47:04,200
Speaker 1: would totally recommend for you to reach out to us

1063
00:47:04,239 --> 00:47:07,040
Speaker 1: directly if you think we can be of any help

1064
00:47:07,160 --> 00:47:07,799
Speaker 1: in any way.

1065
00:47:07,920 --> 00:47:10,800
Speaker 2: We issue the best of luck, Melissa. You're not alone

1066
00:47:10,920 --> 00:47:14,000
Speaker 2: in this predicament and you can call your way out.

1067
00:47:14,000 --> 00:47:17,000
Speaker 2: Many how to money listeners have and hearing those success

1068
00:47:17,000 --> 00:47:19,520
Speaker 2: stories matter of how people have been able to completely

1069
00:47:19,600 --> 00:47:23,720
Speaker 2: change their financial future, even with like a difficult past,

1070
00:47:24,040 --> 00:47:26,960
Speaker 2: it never ceases to amaze and inspire me. All right,

1071
00:47:27,040 --> 00:47:30,360
Speaker 2: let's get to another question from listener Andre. He says,

1072
00:47:30,360 --> 00:47:33,000
Speaker 2: does anyone know of a one year investment I can

1073
00:47:33,040 --> 00:47:35,560
Speaker 2: make that would guarantee more than a three to four

1074
00:47:35,600 --> 00:47:38,040
Speaker 2: percent return? I know of CDs that offered three to

1075
00:47:38,080 --> 00:47:39,719
Speaker 2: four percent, But I thought i'd ask if there are

1076
00:47:39,760 --> 00:47:44,080
Speaker 2: better options. Keyword here being guarantee is what Andre said.

1077
00:47:44,480 --> 00:47:48,719
Speaker 1: Nope, doesn't exist. That's the TLDR, at least not in

1078
00:47:48,840 --> 00:47:51,319
Speaker 1: action like a quote unquote investment. Because if you have,

1079
00:47:51,520 --> 00:47:53,440
Speaker 1: let's you know, if you've got a high to medium

1080
00:47:53,440 --> 00:47:55,879
Speaker 1: interest rate debt, well paying that off, I would say

1081
00:47:55,880 --> 00:47:59,640
Speaker 1: that would generate a quote unquote guaranteed return. But short

1082
00:47:59,719 --> 00:48:03,000
Speaker 1: term guaranteed investments that like, they just are not a thing.

1083
00:48:03,400 --> 00:48:05,919
Speaker 1: And so the choices that you have here, they're really

1084
00:48:05,960 --> 00:48:08,680
Speaker 1: just finding the best rates for storing cash. High old

1085
00:48:08,719 --> 00:48:12,080
Speaker 1: savings accounts they're great, but they're also not guaranteed. We've

1086
00:48:12,080 --> 00:48:15,279
Speaker 1: seen we've seen rates going down for savers as the

1087
00:48:15,320 --> 00:48:19,680
Speaker 1: FED has lowered interest rates slowly. CD rates they are

1088
00:48:19,719 --> 00:48:23,040
Speaker 1: guaranteed for a period of time, but then the starting

1089
00:48:23,120 --> 00:48:25,640
Speaker 1: rate of those can be a little bit less than

1090
00:48:25,800 --> 00:48:29,080
Speaker 1: what the highield savings accounts are currently paying. Bottom line,

1091
00:48:29,080 --> 00:48:31,440
Speaker 1: you should be able to get like a four ish

1092
00:48:31,719 --> 00:48:35,799
Speaker 1: percent rate without needing to actually investor or take any

1093
00:48:35,800 --> 00:48:36,239
Speaker 1: real risk.

1094
00:48:36,360 --> 00:48:38,600
Speaker 2: Yeah, and we're talking about a timeline that's that short,

1095
00:48:38,640 --> 00:48:42,400
Speaker 2: a single year. Sorry, there just isn't any investment that

1096
00:48:42,560 --> 00:48:45,920
Speaker 2: is worth partaking in because the risk is just too high.

1097
00:48:45,960 --> 00:48:48,480
Speaker 2: When we're talking about investing money, could the returns be

1098
00:48:48,560 --> 00:48:50,799
Speaker 2: significantly higher than that? Sure of course they could be.

1099
00:48:50,840 --> 00:48:54,000
Speaker 2: Think about the stock market in twenty twenty four. If

1100
00:48:54,040 --> 00:48:57,080
Speaker 2: you had stuck your the money in the stock market

1101
00:48:57,120 --> 00:48:59,880
Speaker 2: on January first and then taking it out on December

1102
00:48:59,880 --> 00:49:01,400
Speaker 2: thirty first, you would have.

1103
00:49:01,480 --> 00:49:03,080
Speaker 1: Forgive four percent twenty five percent.

1104
00:49:03,120 --> 00:49:04,880
Speaker 2: Maybe you would have done much better than sticking in

1105
00:49:05,040 --> 00:49:07,960
Speaker 2: a savings account, but that's not guaranteed. You could have

1106
00:49:08,000 --> 00:49:10,480
Speaker 2: experienced to hear like twenty twenty two. And I think

1107
00:49:10,520 --> 00:49:12,600
Speaker 2: the choice too, between a high yield savings account or

1108
00:49:12,640 --> 00:49:14,439
Speaker 2: a CD is actually kind of a tough one right now,

1109
00:49:14,560 --> 00:49:17,359
Speaker 2: because if you want to guarantee you go with a CD.

1110
00:49:17,640 --> 00:49:17,880
Speaker 1: You know.

1111
00:49:18,000 --> 00:49:19,800
Speaker 2: But here's the thing. You and I we don't expect

1112
00:49:19,920 --> 00:49:23,120
Speaker 2: yields to fall meaningfully for savers, but they could, and

1113
00:49:23,440 --> 00:49:25,400
Speaker 2: so much of that depends on the FED. It depends

1114
00:49:25,440 --> 00:49:28,399
Speaker 2: on the current administration and the best CD rates they're

1115
00:49:28,480 --> 00:49:30,879
Speaker 2: they're in that nine to thirteen month range right now,

1116
00:49:31,200 --> 00:49:33,719
Speaker 2: so right out a year timeframe.

1117
00:49:33,320 --> 00:49:34,440
Speaker 1: Which is perfect for Andre.

1118
00:49:34,640 --> 00:49:37,040
Speaker 2: Right, I would check out a site like Investipedia, bank Rate,

1119
00:49:37,080 --> 00:49:40,080
Speaker 2: Doctor of Credit. They typically list the best offers, and

1120
00:49:40,120 --> 00:49:42,240
Speaker 2: the best that I saw Matt as I was preparing

1121
00:49:42,280 --> 00:49:44,320
Speaker 2: for this question was Marcus and Synchrony. They seem to

1122
00:49:44,360 --> 00:49:47,640
Speaker 2: be paying top rates. But then you know ciit's high

1123
00:49:47,719 --> 00:49:50,160
Speaker 2: old savings account rate. It's just as good, if not better,

1124
00:49:50,360 --> 00:49:51,839
Speaker 2: than what those guys are offering.

1125
00:49:51,520 --> 00:49:51,960
Speaker 1: On a CD.

1126
00:49:52,360 --> 00:49:54,720
Speaker 2: But that's a savings account, and that rate is subject

1127
00:49:54,840 --> 00:49:56,960
Speaker 2: to change if the FED lowers rates by half a

1128
00:49:57,000 --> 00:49:58,920
Speaker 2: point or something like that. Guess what the rate you're

1129
00:49:58,920 --> 00:50:01,919
Speaker 2: earning on savings is going. So it's not guarantee you'd

1130
00:50:01,920 --> 00:50:04,920
Speaker 2: see a drop. Yeah, So yeah, I don't know if

1131
00:50:04,920 --> 00:50:08,600
Speaker 2: you feel comfortable with no guarantee. The high old savings

1132
00:50:08,600 --> 00:50:10,120
Speaker 2: account I think can make a lot of sense. If

1133
00:50:10,120 --> 00:50:14,120
Speaker 2: you want the set in stone, the contractually oblicated guarantee

1134
00:50:14,120 --> 00:50:17,360
Speaker 2: that you get with a certificate of deposit, then I

1135
00:50:17,360 --> 00:50:19,520
Speaker 2: think that can make a lot of sense. To just

1136
00:50:19,880 --> 00:50:22,160
Speaker 2: make sure you're not going down to your local financial

1137
00:50:22,160 --> 00:50:24,680
Speaker 2: institution brick and mortar and opening it up because the

1138
00:50:25,080 --> 00:50:28,440
Speaker 2: trade off that yeah, you might get there, Oh hey

1139
00:50:28,440 --> 00:50:30,920
Speaker 2: we got two percent rates on CDs right now, and

1140
00:50:31,360 --> 00:50:33,520
Speaker 2: that's just not competitive with what you're able to find

1141
00:50:33,560 --> 00:50:35,080
Speaker 2: if you just do you know a little bit of

1142
00:50:35,120 --> 00:50:35,600
Speaker 2: a sick.

1143
00:50:35,800 --> 00:50:38,440
Speaker 1: Standard, Yeah, a solid one online And all that note,

1144
00:50:38,480 --> 00:50:41,000
Speaker 1: I will say, don't go chasing returns. Don't go with

1145
00:50:41,160 --> 00:50:43,920
Speaker 1: like some sort of neobank that's promising a we are

1146
00:50:43,920 --> 00:50:47,720
Speaker 1: offering a four and three quarter money market account, because

1147
00:50:47,960 --> 00:50:50,520
Speaker 1: there's no free lunch. And if there's anything that we've

1148
00:50:50,560 --> 00:50:53,600
Speaker 1: learned about the neo banks, like nobody suspected that there

1149
00:50:53,640 --> 00:50:56,680
Speaker 1: might be a small regional bank that could collapse, but

1150
00:50:56,719 --> 00:51:00,279
Speaker 1: ever since Silicon Valley Bank, it's like, oh the I mean,

1151
00:51:00,320 --> 00:51:01,840
Speaker 1: that was always a risk, but now it feels a

1152
00:51:01,880 --> 00:51:04,480
Speaker 1: little more tangible, like a little bit more real of

1153
00:51:04,520 --> 00:51:07,200
Speaker 1: a risk. But then like, yes, you might get a

1154
00:51:07,200 --> 00:51:09,000
Speaker 1: slightly higher rate with some of these online banks, but

1155
00:51:09,080 --> 00:51:10,880
Speaker 1: there's other things that you're giving up as well, like

1156
00:51:11,200 --> 00:51:14,280
Speaker 1: actual customer service if you need to get ahold of them,

1157
00:51:14,680 --> 00:51:18,680
Speaker 1: or transfers that are happening in any sort of timely manner.

1158
00:51:19,440 --> 00:51:21,640
Speaker 1: I mean, so all I had to say, if it

1159
00:51:21,680 --> 00:51:24,279
Speaker 1: was me, I would not be looking to completely juice

1160
00:51:24,280 --> 00:51:26,240
Speaker 1: my returns by going with some of these new neo

1161
00:51:26,280 --> 00:51:28,920
Speaker 1: banks that you've never heard us talk about as opposed

1162
00:51:28,920 --> 00:51:31,040
Speaker 1: to the banks you hear is talking about all the time,

1163
00:51:31,120 --> 00:51:35,719
Speaker 1: like discover ally c It and even Marcus and Synchronylos

1164
00:51:35,719 --> 00:51:38,040
Speaker 1: are bunctioned Legit online banks too. Totally.

1165
00:51:38,560 --> 00:51:40,200
Speaker 2: All right, Matt, Let's get back to the beer we

1166
00:51:40,239 --> 00:51:43,000
Speaker 2: had on this episode. This one is a tequila barrel

1167
00:51:43,000 --> 00:51:46,000
Speaker 2: aged stout by Wicked we Brewing. What were your thoughts

1168
00:51:46,080 --> 00:51:48,400
Speaker 2: on this beastly stout, my friend?

1169
00:51:48,719 --> 00:51:50,920
Speaker 1: Yeah, it was big, wasn't it. So this is very

1170
00:51:51,000 --> 00:51:52,600
Speaker 1: similar to the one that we had a couple of

1171
00:51:52,600 --> 00:51:55,200
Speaker 1: weeks ago that was the rum barrel aged. This is

1172
00:51:55,280 --> 00:51:57,959
Speaker 1: just the tequila barrel. Yes, it's the same based out,

1173
00:51:58,239 --> 00:52:01,000
Speaker 1: I'm assuming. So it tastes tastes like it, I will say,

1174
00:52:01,239 --> 00:52:03,320
Speaker 1: I'm not sure if I tasted the tequila like in

1175
00:52:03,360 --> 00:52:06,759
Speaker 1: the rum barrel. It's there are clear rum notes. I

1176
00:52:06,800 --> 00:52:09,640
Speaker 1: think I remember saying it tastes like that there are

1177
00:52:09,719 --> 00:52:12,239
Speaker 1: raisins in here that have been soaked in actual rum

1178
00:52:12,280 --> 00:52:14,800
Speaker 1: that were like macerated and put back into the bottle,

1179
00:52:14,800 --> 00:52:17,239
Speaker 1: whereas this, there's no part of this that tastes like

1180
00:52:17,239 --> 00:52:20,480
Speaker 1: a margerita to me. What about you? Now? I will say,

1181
00:52:20,520 --> 00:52:22,640
Speaker 1: I got like maybe some of the earthy vibes a

1182
00:52:22,680 --> 00:52:25,040
Speaker 1: little bit. Yeah, yeah, that's a good way to describe tequila.

1183
00:52:25,080 --> 00:52:26,800
Speaker 1: It's kind of it's like tastes like soil, Yeah, like

1184
00:52:26,840 --> 00:52:27,360
Speaker 1: wet earth.

1185
00:52:27,480 --> 00:52:29,480
Speaker 2: Yeah, so I thought it had a little bit of that,

1186
00:52:29,560 --> 00:52:31,640
Speaker 2: but yeah, not nearly as much as the rum. But

1187
00:52:31,680 --> 00:52:35,359
Speaker 2: this was like big, burly, semi sweet, little earthy, and

1188
00:52:35,520 --> 00:52:38,800
Speaker 2: just incredibly complex. There were just a lot of different

1189
00:52:38,880 --> 00:52:41,840
Speaker 2: flavor notes going on, which just goes to shut that

1190
00:52:41,880 --> 00:52:44,600
Speaker 2: WI could weave. They make, they make great beer, and

1191
00:52:44,640 --> 00:52:47,120
Speaker 2: then the way they blend the beer. I feel like

1192
00:52:47,120 --> 00:52:49,399
Speaker 2: there's the blending is kind of like an underrated part

1193
00:52:49,400 --> 00:52:52,120
Speaker 2: of the process. And I don't know much about it,

1194
00:52:52,200 --> 00:52:54,359
Speaker 2: but from what I can tell, this is a well

1195
00:52:54,400 --> 00:52:56,920
Speaker 2: blended style because you're using multiple barrels and you're trying

1196
00:52:56,960 --> 00:52:59,320
Speaker 2: to create a finished product that's kind of seamless throughout

1197
00:52:59,440 --> 00:53:02,520
Speaker 2: all the bottles making. Yeah, and I don't know, man,

1198
00:53:02,760 --> 00:53:03,640
Speaker 2: I like this beer a lot.

1199
00:53:03,800 --> 00:53:05,160
Speaker 1: Yeah. I feel like you can take some of those

1200
00:53:05,160 --> 00:53:07,600
Speaker 1: brown sugar notes maybe, yeah, even a little bit of honey.

1201
00:53:07,640 --> 00:53:09,560
Speaker 1: It's almost as if it's a dark art to be

1202
00:53:09,560 --> 00:53:12,160
Speaker 1: able to pull something like this off. We are not

1203
00:53:12,200 --> 00:53:14,360
Speaker 1: paid by Wicked. We just a little disclaimer out there

1204
00:53:14,400 --> 00:53:16,719
Speaker 1: for folks, but we're willing to be. But that's gonna

1205
00:53:16,719 --> 00:53:18,520
Speaker 1: be up for this episode. The listeners can find our

1206
00:53:18,520 --> 00:53:20,480
Speaker 1: show notes to some of the different resources, some of

1207
00:53:20,480 --> 00:53:23,239
Speaker 1: the different articles that we mentioned during this episode up

1208
00:53:23,239 --> 00:53:26,080
Speaker 1: on the website at howtomoney dot com. Hey leave us

1209
00:53:26,120 --> 00:53:28,279
Speaker 1: a solid review if you've been enjoying the show and

1210
00:53:28,320 --> 00:53:30,920
Speaker 1: that's not something that you've done truly other than like

1211
00:53:30,960 --> 00:53:33,520
Speaker 1: telling a friend about the show and like making them

1212
00:53:33,600 --> 00:53:36,040
Speaker 1: subscribe to the show like that is the second best

1213
00:53:36,080 --> 00:53:38,319
Speaker 1: way to help the show out. Helps us to spread

1214
00:53:38,360 --> 00:53:41,920
Speaker 1: the word, helps others to get their money game together. Joel,

1215
00:53:42,040 --> 00:53:44,120
Speaker 1: that's what we like to see most. That's gonna be

1216
00:53:44,120 --> 00:53:46,160
Speaker 1: it for this one. Until next time, Best Friends Out,

1217
00:53:46,320 --> 00:53:47,720
Speaker 1: Best Friends Out.