Speaker 1: Episode one, Roth Iras explain. Welcome to the Frugal Friends podcast,
Speaker 1: where you'll learn to save money, embrace simplicity, and liver
Speaker 1: with your life. Here your host Jen and Jill m.
Speaker 1: Welcome to the Frugal Friends podcast. My name is Jen,
Speaker 1: my name is Jill, and today we are sharing with
Speaker 1: you are absolutely awesome interview with Barbara Guinty of Plan
Speaker 1: Financial The Future Rich Podcast. She is an amazing, amazing
Speaker 1: certified financial planner just like puts everything in really understandable
Speaker 1: terms and doesn't make you feel dumb for not knowing
Speaker 1: what you don't know. Yeah, it can be really hard,
Speaker 1: especially when you get it's hard to get really smart
Speaker 1: people on the podcast because they're so smart, it's hard
Speaker 1: for them to relate to everyone else who's like light
Speaker 1: years away. Yeah, they think the baseline is so far
Speaker 1: above the baseline actually is. Yeah, But I think Barbara
Speaker 1: does a really good job of like kind of explaining
Speaker 1: the basics but also elevating them. She definitely covered some
Speaker 1: things that I wouldn't like, wouldn't be a top of
Speaker 1: mind for me to talk about, and I talked about
Speaker 1: like raw eires every day, So I loved it. But
Speaker 1: first we have to thank our sponsors for this episode.
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Speaker 1: O s if you need a high yield savings account
Speaker 1: for any reason, that's the one we like right now
Speaker 1: and away for you to support the show. Also brought
Speaker 1: to you by the school bus. It was scary at
Speaker 1: first with all those competing questions, will the driver see me?
Speaker 1: How do they get the door to open? Will I
Speaker 1: trip up the stairs, where will I sit? And even
Speaker 1: though the worst case scenario to all of those questions
Speaker 1: does eventually happen, you know the driver doesn't see you.
Speaker 1: You do trip, there's nowhere to sit. We figure it
Speaker 1: out until finally we're enjoying jaw Breakers until our tongue blades,
Speaker 1: playing around to punch Buggy, and between trying to get
Speaker 1: truckers to honk at us from the back seat, you
Speaker 1: know where the cool kids sit the school bus. Much
Speaker 1: like financial planning for retirement. It's scary at first, but
Speaker 1: soon enough you know just where to sit and how
Speaker 1: long you can sleep in until you legit miss your
Speaker 1: ride the school bus? Anybody school bus? Yeah? Did you
Speaker 1: ride the school bus? I'm pelling I did. Yeah. Um,
Speaker 1: I never sat in the back. I was always a
Speaker 1: middle middle sit at least you figured out where. Much
Speaker 1: like my life now, I'm very much a middle sitter
Speaker 1: in anywhere I go. Like, I don't sit right in
Speaker 1: the front, I don't sit in the back. I'm very
Speaker 1: much a middle person. Did you eat jawbreakers on the bus? No?
Speaker 1: I didn't. Man, do you remember those things like the
Speaker 1: size of baseballs? And then you just keep licking I'm
Speaker 1: not into licking things. Well, like, that's probably good. Yeah,
Speaker 1: I prefer why you sat in the middle. Yeah, I
Speaker 1: also prefer very average candies to Anyways, enough about candy,
Speaker 1: let's talk about rath eyre As. If you are interested
Speaker 1: in more, a few episodes you should queue up to
Speaker 1: play after this. Our episode ninety four, that's our retirement
Speaker 1: one oh one episode we talked about kind of all
Speaker 1: of the tax advantage retirement accounts, and then we also
Speaker 1: have a recent episode, episode one understanding the stock Market
Speaker 1: with Bolaso Kunbi. That one was really great. We went
Speaker 1: through a lot of like terms and stock market basics
Speaker 1: and also touched on how they relate to the retirement accounts.
Speaker 1: And in this one, we're very much deep diving into
Speaker 1: the roth Ira. So get excited for Barbara and uh yeah,
Speaker 1: she's just she's an amazing podcast host, educator, certified financial planner,
Speaker 1: so smart, very excited to share this interview with you.
Speaker 1: Let's get into it. Bar Brett, thanks so much for
Speaker 1: coming onto the show. We are so happy to have
Speaker 1: you here. Thank you for having me. I'm excited to
Speaker 1: be here. This is a topic that we need to
Speaker 1: talk about for our listeners. Of course, because I'm selfless
Speaker 1: like that, but also for me, because I am selfish
Speaker 1: like that. I will be just honest from the jump
Speaker 1: that I am a frugal friend. I am not a
Speaker 1: retirement expert. So I will shamelessly be the representative for
Speaker 1: all of our listeners who hear these words and have
Speaker 1: big old question marks. We're just gonna We're just gonna
Speaker 1: get rid of the shame. Barbara, and I get good
Speaker 1: at that because I've heard some of your podcast and
Speaker 1: all of the people who are like I don't know, um,
Speaker 1: I don't know maybe, and you're so sweet, you're so kind, like, Okay, well,
Speaker 1: we'll figure that out together. I love it so much.
Speaker 1: That's what we're gonna do with everybody listening. Were you
Speaker 1: and Barbara and us, We're going to figure it out together.
Speaker 1: So let's there are no bad questions, oh kin, except
Speaker 1: there are. There are some really bad questions and things
Speaker 1: that we should know already, but you know what we don't,
Speaker 1: and and we better start learning now. I think the
Speaker 1: only I think the only bad questions would be like
Speaker 1: asking you about like your personal life, like intimate details
Speaker 1: of your personal life, Barbara, So um, don't do that
Speaker 1: when you go to a financial planner. But beyond that,
Speaker 1: no bad questions about retirement question. We've leveled the playing field.
Speaker 1: So that's where we're at. So Barbara, tell me some
Speaker 1: intimate details about your child, just kidding. What I really
Speaker 1: want you to do is tell us so, like define
Speaker 1: what is a rath ira, and like how does it work? Sure,
Speaker 1: so we'll start real basic. I will say that the
Speaker 1: rath ira, for people who listen to my podcast, I
Speaker 1: talked about it a lot, is one of my favorite vehicles,
Speaker 1: and it definitely is, and I have you know, but
Speaker 1: a lot of people don't know a lot about the
Speaker 1: rath and how it works. So the rath ira is
Speaker 1: So first we'll start with the word ira, which is
Speaker 1: an individual retirement account. And so there are two types
Speaker 1: of individual retirement accounts. One is the raw and the
Speaker 1: raw version of it means you're putting the money in
Speaker 1: after tax. You're not getting a tax break today. As
Speaker 1: long as you leave the money in the roth ira
Speaker 1: for five years um and you're older than fifty nine
Speaker 1: and a half, all that money comes out tax free.
Speaker 1: So that's really the high level explanation of it. We
Speaker 1: can make it more complicated from there. But let's start
Speaker 1: with the basics. So one reason somebody might do a
Speaker 1: roth IRA versus a traditional IRA, which is the other
Speaker 1: sibling in the IRA area, which is the pre tax
Speaker 1: when you're getting a tax break, is because you um
Speaker 1: are in the lower Usually it's ideal to do it
Speaker 1: when you're in a lower tax bracket, right because you're
Speaker 1: not getting a tax break today, you're anticipating getting your
Speaker 1: tax breaking in the future, ideally after fifty and a half,
Speaker 1: right when you're retired, and all that money grows tax defers,
Speaker 1: meaning you don't pay anything on it while it's growing,
Speaker 1: and then when you go to take it out when
Speaker 1: you're tired, it's totally tax for you, which is the
Speaker 1: biggest benefit of the raw THI array. Yeah, I think
Speaker 1: it's that tax, that tax, like pre tax, post tax,
Speaker 1: like those words that kind of like trip people up,
Speaker 1: but they're not like, it's not a complex like idea.
Speaker 1: It's just saying like, well, you're pre tax, you're contributing
Speaker 1: pre tax. That means like before income taxes are taking out.
Speaker 1: So the way to think about it is like the
Speaker 1: government is one your partner and everything right, the I
Speaker 1: R S is always your partner for the rest of
Speaker 1: your life. Right, we have a permanent partner here. They
Speaker 1: never go whether you want them or not, whether you
Speaker 1: want them or not, they're your partner and they're going
Speaker 1: to be with you through thin give it um. And
Speaker 1: so it's basically, when do you want to take that
Speaker 1: tax break. Do you want to get a tax break
Speaker 1: from your partner today or do you want to get
Speaker 1: a tax break from your partner in retirement? I want
Speaker 1: to It's either you're gonna have it now or you're
Speaker 1: gonna have it later. So it's the most simple way
Speaker 1: to think about it. Yeah, or And I think some
Speaker 1: people don't realize this, Like if you invest like outside
Speaker 1: of like your tax advantage retirement accounts, like just in
Speaker 1: a regular brokerage, then you are getting no tax break
Speaker 1: from your partner on either end, which isn't necessarily bad,
Speaker 1: but like why go there, Like why do robin hood
Speaker 1: before you can take advantage of your like tax friendly ones. Yes,
Speaker 1: because the thing is I R. S loves if you
Speaker 1: don't take advantage of the tax code. Right, So I
Speaker 1: like to explain the tax code, just like buying an
Speaker 1: aeroplane ticket. Right, So when you get on an airplane,
Speaker 1: which no one's done in a while. But when we
Speaker 1: get back on airplanes, there will be a person on
Speaker 1: that plane that paid zero for that ticket, right because
Speaker 1: they use miles and they were strategic, right, and they
Speaker 1: paid nothing to be there. And then they'll be the
Speaker 1: other person who bought that ticket that morning and paid
Speaker 1: top dollar. Right. That is exactly how our tax code works.
Speaker 1: It is up to you to learn it. It's an
Speaker 1: adversarial relationship that we have with the I R. S.
Speaker 1: It's up for you and it's your responsibility alone to
Speaker 1: learn how the tax system works and to understand it
Speaker 1: and to take advantage of it. Tax avoidance is perfectly
Speaker 1: legal and encouraged in our tax code. You just have
Speaker 1: to understand how our taxes work. Tax Evasion is what
Speaker 1: they get you where you go to jail. So we
Speaker 1: don't want to do that. But yeah, you don't want
Speaker 1: to do that. But tax avoidance, so deferring taxation, taking
Speaker 1: advantage of the tax deferred account, taking a tax break
Speaker 1: today versus in the future. Those are all encouraged in
Speaker 1: our tax code. And that's why I like to use
Speaker 1: the example of an airplane because everyone can relate to that.
Speaker 1: Usually with flying is somebody who's really strategic and got
Speaker 1: that ticket through zero dollars, and there's probably another person
Speaker 1: that's on that flight that paid five hundred. Right same way,
Speaker 1: with the taxes, people are able to reduce their tax
Speaker 1: bill and kind of by taking advantage of, like you
Speaker 1: just said, retirement plans and you know, not maybe doing
Speaker 1: a broker account, because they're taking advantage of pre tax
Speaker 1: and post tax for you know, with the ROTH and
Speaker 1: traditional or work plan in rather or whatever the combination
Speaker 1: is going to be. And so you're allowed to do that.
Speaker 1: That's called tax avoidance. It's perfectly legal, and I would
Speaker 1: say even encouraged with their tax code. Amazing, Barbara, I
Speaker 1: love how simplified that. I try to understand plane tickets. Yes, following,
Speaker 1: we're having a conversation about I RA S and I
Speaker 1: am following. Yes, And the person who got the ticket
Speaker 1: for free planned like way in advance to like earn
Speaker 1: those points and planned in advanced to buy that ticket.
Speaker 1: So that's literally the same thing too with the RATH
Speaker 1: I RA like, the earlier you start, the better chance
Speaker 1: you have aiding the most tax liability. Yeah, exactly. The
Speaker 1: person who bought the ticket that morning is going to
Speaker 1: pay the most, and they obviously planned the least. And
Speaker 1: I think it's not talked about enough, but I think
Speaker 1: one of the biggest advantages to being successful with your
Speaker 1: money is really time, which just means you're planning everything
Speaker 1: in advance. Yes, because time gets you so many advantages
Speaker 1: that you really can't You can't buy time, right, So
Speaker 1: if you or the person that got there in the
Speaker 1: morning to buy that plane ticket, well that's the price, right,
Speaker 1: if you want to seat, that's the price versus the
Speaker 1: person that was strategic about airline miles and credit card
Speaker 1: points and everything. Right, that time was invaluable. And it's
Speaker 1: the same thing with your retirement. The time is invaluable. Yes,
Speaker 1: And it's like when you have less money, you often
Speaker 1: have a little extra time, usually saying people with with
Speaker 1: no money have a lot of extra time. I get it,
Speaker 1: but you do have at least the time horizon on
Speaker 1: your side, even if you don't like have minutes in
Speaker 1: the day, but you do have that, like you know,
Speaker 1: twenty thirty years like of just money that can be
Speaker 1: sitting there. Yeah, and that's where the magic really starts
Speaker 1: to happen. Because I like to say so every ten years.
Speaker 1: Is can be really valuable with your retirement money because
Speaker 1: if your money is earning seven point two percent, it's
Speaker 1: doubling every ten years and the power of the double
Speaker 1: is incredible, right, because that's where you go from. We'll
Speaker 1: just use big numbers to get the point across, but
Speaker 1: that's where you go from four hundred thousand to eight
Speaker 1: hundred thousands, and that's just with time and having the
Speaker 1: money's invested. Yeah. Well it's a lot of money, a
Speaker 1: lot of stuff we can do with that amount of money,
Speaker 1: especially when you're frugal. Yeah. So for more definitions and explanations, Barbara,
Speaker 1: can you explain to us just the simple differences between
Speaker 1: a roth ira A and a four oh one K
Speaker 1: why someone might choose one over the other or both.
Speaker 1: So the big difference really is so the ira A, remember,
Speaker 1: is an individual retirement account. Anybody can do it. A
Speaker 1: four O one K is a work retirement plan, which
Speaker 1: a four oh one K. Whether you have a four
Speaker 1: O one K, you have four fifty seven, stop me
Speaker 1: if I get too many letters for seven or A
Speaker 1: four through B. They're all just the area you find
Speaker 1: the description essentially in the I R S. You know
Speaker 1: the I r C code, which is where they explain
Speaker 1: what they do. So a four O one case, usually
Speaker 1: with big public companies four O three B is going
Speaker 1: to be usually hospitals or school teachers. For fifty seven
Speaker 1: is going to be government workers. So we just think
Speaker 1: about IRA. A is one section meaning you do it
Speaker 1: yourself righte the d I Y, and then the other
Speaker 1: section being what work is going to offer you. So
Speaker 1: usually with the work plan, especially with the four oh
Speaker 1: one case, you have a rath option and then you
Speaker 1: also have your traditional option. The traditional works very similar
Speaker 1: to traditional IRA, and that the traditional um. If you
Speaker 1: choose a traditional for oll o ka, it's going to
Speaker 1: go in pre tax. If you choose a raw for
Speaker 1: ow one k, it's going to go in post tax.
Speaker 1: So I would say the biggest difference between a raw
Speaker 1: for owen k and the roth ira is going to
Speaker 1: be when you're using the rath component in a work
Speaker 1: retirement plan. Work retirement plans have a much higher contribution level,
Speaker 1: so you can put if you're under fifty nine hundred
Speaker 1: to max out your four ow one k at work
Speaker 1: and do the RATH in that, where if you're doing
Speaker 1: a roth ira, the limit on that is going to
Speaker 1: be six thousand dollars if you're eligible. There's an eligibility
Speaker 1: requirement with the roth IRA. If you earned too much,
Speaker 1: you're not eligible to do it at all. So with
Speaker 1: the four own K at work, not only is there
Speaker 1: no incomplementation on it, there's also the availability to max
Speaker 1: it out at a much higher level. And then this
Speaker 1: is where we're gonna get a little farther into retirement.
Speaker 1: So just stop me. But with your four OWNK at work,
Speaker 1: when you do go to retire, we have this fun
Speaker 1: thing called R and D. Either of you heard of
Speaker 1: this okay which is your okay, which is your required
Speaker 1: minimum distribution. So basically, the government says you have been
Speaker 1: deferring taxation on this account since you opened it. So
Speaker 1: let's just say you listen to the podcasts and you
Speaker 1: know to open your fur own K at the right
Speaker 1: page of twenty five, and you've been deferring it this
Speaker 1: entire time. Right, there's been no tax while you're growing
Speaker 1: these investments. At seventy two, the government mint says to you,
Speaker 1: and they just rolled it back it used to be
Speaker 1: seventy and a half, or they rolled it back to
Speaker 1: seventy two. At seventy two. You have to take a
Speaker 1: minimum amount out of your four ow one k, and
Speaker 1: that is determined by the lifetime factor table that the
Speaker 1: I r S puts out. Because you know, why would
Speaker 1: we use a percentage That would be too straight part,
Speaker 1: so we use a factor table get online. Because everybody
Speaker 1: loves factors, right, we wouldn't want to use a factor table. Essentially,
Speaker 1: it works out to be like a little bit over
Speaker 1: a three, So that's a Besides the contribution level the
Speaker 1: income limits, the other big difference between a roth bar
Speaker 1: ow one k and a roth ira is the roth
Speaker 1: bur own k has rm D on it. The roth
Speaker 1: ira does not have rm D on it. So you
Speaker 1: could pass on a roth ira like to your children
Speaker 1: and grandchildren whatever. You don't have to use it. You
Speaker 1: don't have to use it, which does not apply to
Speaker 1: the beneficiary. The beneficiary has a mandatory distribution. You could
Speaker 1: roll your four owne k over into a roth ira.
Speaker 1: I haven't raw four own k is haven't been around
Speaker 1: long enough, so as of now, it seems like you
Speaker 1: can take a rath for owen k and roll it
Speaker 1: over into a roth Ira and avoid the R and D.
Speaker 1: But the government might catch on to that with like
Speaker 1: all good things. Yeah, with all the things. They usually
Speaker 1: like they want the R and D so they can
Speaker 1: change the rules. I didn't see anything. I haven't seen
Speaker 1: anyone do it now where they got stopped. But a
Speaker 1: raw four own case haven't been around that long, right.
Speaker 1: The baby boomers are the ones taking the maximum r
Speaker 1: ds currently, so the government's not missing out on money
Speaker 1: with the raw for o K at this point. So
Speaker 1: maybe that would change on the road. But I do
Speaker 1: think you can get away with that, but I would
Speaker 1: give the disclaimer you should check with your financial advisor
Speaker 1: or c P A good well, yes, I think One
Speaker 1: of the questions I get asked a lot is like,
Speaker 1: I have an old four ohwe K, Should I roll
Speaker 1: it into a roth ira? Because I hear so much
Speaker 1: about rath iras. But like, that's why it's good to
Speaker 1: know the difference, because it's not necessarily a good idea
Speaker 1: to roll a traditional four oh n K into a
Speaker 1: roth I r R Is that I mean in your
Speaker 1: professional opinion, Like, is there ever a reason you would
Speaker 1: do that? So raw conversions are their own animals. So
Speaker 1: if we were to take a piece of paper and
Speaker 1: draw two lines down and have three columns. I would
Speaker 1: say you have your IRA s on like a little
Speaker 1: left side, so traditional and raw. You have your work
Speaker 1: retirement plans right four okay for through, be raw for traditional,
Speaker 1: and then on the third side of separate side and
Speaker 1: I would draw like a big line of around it
Speaker 1: would be your roth conversions, which are totally different animal
Speaker 1: and have totally different rules. So the four O one case,
Speaker 1: it's a yearly contribution in your year in December thirty one,
Speaker 1: your rath iras. The contributions are about text filing deadline, right,
Speaker 1: so you can do you know, if you're listening to
Speaker 1: this now, you can still make your twenty row FI
Speaker 1: a contribution if you meet the eligibility for it. Um.
Speaker 1: Rath conversions are a totally different animal m hm. So
Speaker 1: I do like roth conversions. I like them a lot.
Speaker 1: And I also like backdoor roths, which is like another
Speaker 1: way to do it with your work plan, which we
Speaker 1: can get into. It's kind of a fun strategy. But
Speaker 1: sometimes it makes sense for people to take your four
Speaker 1: own K and roll it into a roth. Sometimes it
Speaker 1: doesn't make sense. So there's a lot of variables. Because
Speaker 1: there is this thing called the pro rata rule, which
Speaker 1: you don't want to fall into. A nice way to
Speaker 1: describe the pro rata rule is if you put milk
Speaker 1: and coffee and then you try and take the milk
Speaker 1: back out, it's not easy to do that. Yeah, so
Speaker 1: once you mix money, so it has to be a
Speaker 1: very straightforward process to do the Rath conversion. So I'll
Speaker 1: give you an example of when I did one with
Speaker 1: my sister and it worked out perfectly. She had one
Speaker 1: four own kay. It was the only investment she had.
Speaker 1: We put her in her well, we I put her
Speaker 1: in her four own kay. She was totally oblivious. My
Speaker 1: poor sister never even had a lot. It kind of
Speaker 1: like my relationship with gen does things with my money,
Speaker 1: and I'm like, I trust you implicitly. Yeah, she got together.
Speaker 1: My sister never had WiFi. They always stolen from like
Speaker 1: a coffee shop bear By. And the reason why was
Speaker 1: because I had her like putting money in her form
Speaker 1: o kay. She was totally unaware that she could have
Speaker 1: had more money in her paycheck. But anyway, she went
Speaker 1: along with it. And then um, when she quit her job,
Speaker 1: she decided she was going to go to law school.
Speaker 1: But obviously she didn't have that plan she first quit
Speaker 1: her job and moved home, and I made her work
Speaker 1: for me, because you can't just sit around and like
Speaker 1: do nothing while I'm running the family business. And then
Speaker 1: she decided she was definitely not gonna do that the
Speaker 1: rest of her life and went to law school. So
Speaker 1: in the form one case, she had sixty dollars when
Speaker 1: right before law school started, that's what she had accumulated
Speaker 1: in her four O one k. Only investment she had
Speaker 1: was just the four one K. Went to law school.
Speaker 1: Obviously in law school was doing that full time, had
Speaker 1: no income. Law schools three years, I rolled her four
Speaker 1: own k every tax here twenty from the four owne
Speaker 1: K over into a roth ira. It ended up, I
Speaker 1: think over the three years costing around like seven dollars.
Speaker 1: My dad paid the tax bill for because she had
Speaker 1: no money, I wasn't going to pay it, so I dedicated, um,
Speaker 1: you've done. I set her up with it. So the
Speaker 1: key there was that she had no other accounts right,
Speaker 1: so there was no it was just the rolling K
Speaker 1: to the ross was very clean transaction, so we were
Speaker 1: not running into the brow rattle rule, which is where
Speaker 1: you can get messy. The other key was that we
Speaker 1: didn't withhold anything for taxes. A very common question when
Speaker 1: you're making that transaction is would you like to with
Speaker 1: both for tax It seems like a very prudent answer
Speaker 1: to say, yes, we'll hold something for taxes. I'm gonna
Speaker 1: frowe it. But under being under fifteen and a half,
Speaker 1: she would have fallen into the early distribution right taxes
Speaker 1: and penalties. So you don't want to take anything out
Speaker 1: because you're too young. So we rolled the whole thing
Speaker 1: over sixty over the course of three years fully into
Speaker 1: a roth now you know, post law school and with
Speaker 1: her age, what it will be worth in her retirement
Speaker 1: if it earns the seven point two percent compounding interest,
Speaker 1: she'd be worth about nine hundred thousand, which will now
Speaker 1: be totally tax free versus a taxable had she which
Speaker 1: she would have because she didn't know about it, just
Speaker 1: sat on it through law school and just left it
Speaker 1: in the forum. Kaye. So it's a very powerful tool.
Speaker 1: It just has to be done in the right scenario
Speaker 1: so it doesn't cause a problem. Yeah, and that made
Speaker 1: sense of her because her income was like for those
Speaker 1: literally years, yeah literally zero okay, sweet, So if your
Speaker 1: income zero and for some reason consult a financial planner
Speaker 1: about is that the backdoor roth is that what they
Speaker 1: call no that is a row conversion, Roth conversion, Okay,
Speaker 1: roth conversion, which I always like to say, like with
Speaker 1: the government, had to be careful about the wording. So
Speaker 1: the word is conversion versus contribution. Different rules for converging
Speaker 1: versus contribution. But and so very often scenarios where that
Speaker 1: would apply to people would be going back to law school,
Speaker 1: going back to graduate school, taking time off to have
Speaker 1: a child or take care of a parent. Some people
Speaker 1: just take a year off of work, right they're just
Speaker 1: burnt out and they're going to take a year off,
Speaker 1: that would be it. Or if you're starting a business
Speaker 1: and you're gonna be in a low income year, you
Speaker 1: could plan for it right like when I started, when
Speaker 1: I bought my business, which I thought meant I was
Speaker 1: going to have money initially. Wrong. Uh, that's a good
Speaker 1: time to do it too, where you're not making very
Speaker 1: much money. So there's a lot of opportunities throughout your
Speaker 1: life as long. So the way I like to think
Speaker 1: about it, it's like get out of free jail card
Speaker 1: if you're playing, you know, a game, So just keep
Speaker 1: that in your back pocket. If you know about about it,
Speaker 1: you can play that card anytime down the road, as
Speaker 1: long as you have the right situation and you can
Speaker 1: plan for those situations. That's how you get the free
Speaker 1: plane ticket. Yeah, planning. I love taking those plane rights
Speaker 1: on points al right. So what are some of the
Speaker 1: downsides of a rath. I r a because we love them,
Speaker 1: but that doesn't mean they are right for everyone. So
Speaker 1: I would say a downside for a raw would be
Speaker 1: the fact that you're not getting the tax break today,
Speaker 1: and some people need the tax break today. I currently
Speaker 1: don't live in New York City anymore, but I did,
Speaker 1: And so when you're living, for instance, in New York City,
Speaker 1: you're paying New York State, you're paying New York City,
Speaker 1: and then you're paying the fetes, so you're paying three taxes.
Speaker 1: So and I didn't live like I'm not in New
Speaker 1: York City anymore. I'm in a lower tax bracket from
Speaker 1: that situation, So a raw Winton made sense for me.
Speaker 1: They're right, I'm paying three taxes. I don't pay those
Speaker 1: three anymore. So it doesn't always make sense from a
Speaker 1: tax standpoint. You have to see where you're at tax wise. Also,
Speaker 1: one of the downsides with a rath Ira not talking
Speaker 1: about the forum on k here is there are those
Speaker 1: income limitations, so not everyone qualifies for them. So it
Speaker 1: just depends on your tax situation to see what is
Speaker 1: going to be in your best option. And the other
Speaker 1: thing to remember is it doesn't have to be one
Speaker 1: or the other. It's not black and white. So I
Speaker 1: like to try for most people, I think trying to
Speaker 1: take advantage and have a little bit in each of
Speaker 1: the different buckets is ideal because it gives you more optionality.
Speaker 1: And I really like optionality because you don't know everyone
Speaker 1: to oh, well, if you know where you're going to
Speaker 1: be in the future. I mean I don't know where
Speaker 1: I'm going to be in thirty years. Most people don't.
Speaker 1: And we don't know where the taxes are going to
Speaker 1: be in thirty years. Probably probably higher, but it would
Speaker 1: be great to think maybe they'll be lower. So there's
Speaker 1: so many variables we don't know. So I really like
Speaker 1: the idea of giving yourself options and just trying to
Speaker 1: take advantage of all the different aspects of retirement planning,
Speaker 1: and then that way you've a little bit of everything
Speaker 1: um and then you can just do more in one
Speaker 1: or the other, just depending on what your tax situation is. Nice. Yeah,
Speaker 1: I think well said, and I know you've mentioned Gen
Speaker 1: two in the past. I'm sure Barbara you would echo
Speaker 1: the same that it's a low annual limit, like six
Speaker 1: thousand dollars if even if you are eligible to contribute
Speaker 1: per year. Although I just learned to show you. Literally,
Speaker 1: I'm throwing myself under the bus here. I didn't realize
Speaker 1: that both my husband and I could open our own
Speaker 1: raw iras separately, right, I know, I know, I'm I'm
Speaker 1: putting myself out there because I am fully imagining. I'm
Speaker 1: not the only one like you take small steps and
Speaker 1: it's like, okay, I'm doing this thing. I'm doing good.
Speaker 1: Look at me. I'm a millennial like thinking, like forward thinking,
Speaker 1: and not not knowing everything about it yet. So I'm
Speaker 1: just sure that I never made that known to you.
Speaker 1: I think you did. You didn't tell me, but it wasn't.
Speaker 1: It was like a couple of months ago, and that
Speaker 1: was the first I was like, oh, this world is
Speaker 1: open to me. So, yeah, six thousand dollars per person,
Speaker 1: but if you're married, you know, then you're talking twelve
Speaker 1: thousand a year, and depending on what you make every year.
Speaker 1: That's you know, a significant chunk of money. And the
Speaker 1: thing to remember if you're married and maybe you're a
Speaker 1: stay at home parent, is you could do what's called
Speaker 1: the spousal row, meaning you don't have to because you
Speaker 1: have to have earned income to do it. But if
Speaker 1: you're married and one spouse isn't working the other you
Speaker 1: can qualify for the earn income by being married, so
Speaker 1: meaning one spouse can be staying at home and have
Speaker 1: no w two earnings and you can both contribute and
Speaker 1: separate accounts. That's the other thing. Sometimes people think they
Speaker 1: will give you, Like the most misconceptions I see with roth,
Speaker 1: people will think it's six thousand for both, so you
Speaker 1: can do twelve thousand, you can do six and an
Speaker 1: I R A and six or row like, no, it's
Speaker 1: six thousand, whatever combination you want to do. And then
Speaker 1: the other misconception I get is that um if as
Speaker 1: a married couple, the twelve the six between each can
Speaker 1: go into one of the accounts, so it could be
Speaker 1: just in your husband's name or just in your name.
Speaker 1: It has to be retirement accounts. It's tied to your
Speaker 1: soul security. They always have to be separate because I've
Speaker 1: had and people ask that. They're like, well, I just
Speaker 1: want it, it's I want it all in mind, and
Speaker 1: I'm like, no, it doesn't work that way. We have
Speaker 1: to separate the myself too. We're married, we love each other.
Speaker 1: Let's just stir it all together. Yes, I take care
Speaker 1: of it all. It's all gonna be in my dad.
Speaker 1: I'm like, no, we can't do it though. Way nice
Speaker 1: Try Susan. Yeah, I mean you would, you would want
Speaker 1: I can see how you want it to be in
Speaker 1: one account because then compound interests can like maybe like
Speaker 1: work for you faster more than if you have like
Speaker 1: a little bit spread into like a bunch of different accounts.
Speaker 1: But yeah, it's definitely good for individuals to have their
Speaker 1: own investments. That's a good thing. The reason why with
Speaker 1: retirement accounts is it's all tied to your social because
Speaker 1: it ties back to the requirementum distribution. Right, So that's
Speaker 1: how they're tracking it, right. They want to track that
Speaker 1: you're taking out even though the raw doesn't fall under it,
Speaker 1: they still it's still gets open and structured just like
Speaker 1: a retirement account. Mm hmm. Barbara, you are a financial
Speaker 1: goddess and you have so much knowledge. Honest to goodness,
Speaker 1: if I were to think, like, who do I admire,
Speaker 1: it is like c p a s and accountants, These
Speaker 1: detail oriented people who study vary in my estimation, boring
Speaker 1: things for the betterment of those around them. Like your
Speaker 1: level of detailed knowledge is amazing to me. I'm just
Speaker 1: gonna be honest. I probably will never get there. I
Speaker 1: will never be at your level, but that's okay. It's
Speaker 1: okay to have unattainable goddess sattus for those of us
Speaker 1: like myself. So I need to say that you you
Speaker 1: don't have to know. I have to know like all
Speaker 1: the infuers, like all the little bits and pieces, right
Speaker 1: because I just depends what I'm talking to what's going
Speaker 1: to fit for them. So I have to like know
Speaker 1: all of it to see how it works. As long
Speaker 1: as you understand like the basic concepts, that's perfect. Like
Speaker 1: that's what people just need to know, basic concepts just
Speaker 1: so they can know. Okay. I feel like this might
Speaker 1: be an opportunity where I can take advantage of me
Speaker 1: and then you just contact like your accountant or a
Speaker 1: CFP and then they can guide you through the rest
Speaker 1: of it. It just so that you can kind of
Speaker 1: be on the team and just be aware of like, okay,
Speaker 1: I had I'm switching jobs and taking a year up.
Speaker 1: This is an opportunity for me to take be proactive
Speaker 1: and take advantage of my finances. So as long as
Speaker 1: you just have those like instincts to say, okay, this
Speaker 1: is an opportunity for me. You don't have to know
Speaker 1: all the details because you know the other parts that's
Speaker 1: crazy about this is the details and the laws around
Speaker 1: it change, I would say almost usually, So even if
Speaker 1: you've learned it this year doesn't mean it's going to work.
Speaker 1: Next does mean next year. What a powerful concept where
Speaker 1: you're just like you just have to know like the
Speaker 1: basics and kind of like, no, you don't know what
Speaker 1: you don't know, so like kind of just knowing what
Speaker 1: you don't know, and like knowing, okay, I might have
Speaker 1: a chance to do this, then you know when to
Speaker 1: seek out somebody who does know. Like you don't have
Speaker 1: to be responsible for the knowledge of everything. You just
Speaker 1: have to know who to go to and when to
Speaker 1: go to them, and knowing when is it's so powerful
Speaker 1: because you save so much money versus like, oh, I
Speaker 1: just don't want to take the time to learn anything,
Speaker 1: So I'm gonna pay for somebody to do it the
Speaker 1: whole time. You know, you can take a little time
Speaker 1: to learn the basics and then like hand it over
Speaker 1: for the more complex things. Yeah, you just want to
Speaker 1: be an active participant. You don't have to be the
Speaker 1: one like driving the bus. You just want to be
Speaker 1: on the bus and be aware that you're taking a trip.
Speaker 1: But you don't have to be like doing directions or
Speaker 1: anything else. You just want to be on the trip,
Speaker 1: is the way I would describe it. And and so
Speaker 1: then the thing to know is any time there's usually
Speaker 1: a life change happening. Whatever the life changes, buying how
Speaker 1: is getting a new apartment, getting a new job, those
Speaker 1: are usually windows of opportunity in your personal finance life.
Speaker 1: So that's just always be aware whenever there's a change
Speaker 1: positive or negative. Losing your job feels negative, it could
Speaker 1: be really positive for your personal finances. So anytime there's
Speaker 1: one of those life changes, that's what I would say
Speaker 1: would be a good time to reevaluate your personal finances
Speaker 1: and then absolutely just talk to an expert so they
Speaker 1: can guide you through whatever the rules are at that time. Barbara,
Speaker 1: you had me at basic you always have children, you
Speaker 1: have me at basing. Take it back to the basics. Yeah,
Speaker 1: I can do that. I can unders stand that I
Speaker 1: won't be an expert on all the details, and especially
Speaker 1: not if it's going to change on me every year.
Speaker 1: But I think that that is part of the frugality
Speaker 1: piece of this. How do we plan for retirement? How
Speaker 1: do we be mindful and good stewards? And yeah, tell
Speaker 1: our money where to go in the right ways and
Speaker 1: not overpay, but also recognize where our own limitations are
Speaker 1: that we can do some upfront work and then, like
Speaker 1: you said, Jen and you Barbara, recognize when to bring
Speaker 1: somebody else in to kind of help make some of
Speaker 1: these decisions in the best way possible. Speaking of basics,
Speaker 1: where would you recommend, Barbara, someone to go to open
Speaker 1: up a roth ira? If they're like, all right, let's
Speaker 1: take one step at a time, this is the first step.
Speaker 1: What should they do? Well, I'm fully licensed, so I
Speaker 1: can't recommend a specific location. But um, because we have
Speaker 1: a lot of rules if you have a CFP or
Speaker 1: your license, which I'm both, we can't give a lot
Speaker 1: of information, which is probably why when people see us
Speaker 1: on podcast or show is very vague, and it's not
Speaker 1: because I want to be vague, but for all the
Speaker 1: compance that because not a lot of people know that.
Speaker 1: And it's so sad, like you know the most, you
Speaker 1: know so much. Yeah, you're so regulated and what you
Speaker 1: can say, um, and I think that's sad, but I'm
Speaker 1: super super people have no idea how regulate it. Like
Speaker 1: I'm not allowed of text message. My home address is
Speaker 1: like public information because apparently that's good for the public,
Speaker 1: not good for me. Yeah, there's like so many like
Speaker 1: font sized rules. There are so many rules. It is
Speaker 1: like the compliance manual is like like it's on page
Speaker 1: four section and I'm like, what you mean. When I'm
Speaker 1: in Utah, I can just like show up at your
Speaker 1: house and I know, I try and get this specific
Speaker 1: information because you know she's going there flats and mine
Speaker 1: as well. Just look up Barbara. While I'm there, maybe
Speaker 1: do some charcouterie and get the deeds on where to
Speaker 1: open my rock so you could open them at any
Speaker 1: financial institution. I will say that you would want to
Speaker 1: check with the financial institution where you would be happy
Speaker 1: with the investments, because remember the raw is just the vehicle.
Speaker 1: It's not the investment. So I would look if you're
Speaker 1: interested in doing a ROW, I would look for financial
Speaker 1: institution that you are happy with their investment selections, so
Speaker 1: when you open it, then you have the investments you
Speaker 1: want to put in it there. Yeah, that's super important
Speaker 1: because you will find like brokers and I think this
Speaker 1: is pretty common in like four one case and four
Speaker 1: fifty sevens and stuff like that, where there's maybe like
Speaker 1: three or four options that's all you get, and then
Speaker 1: you look at other places and there's like four hundred.
Speaker 1: So that makes a huge difference. Yes, And the reason
Speaker 1: for that is because with your work retirement plan, and
Speaker 1: the company chooses who's going to be their administrator, who's
Speaker 1: going to run that plan, and they choose I like
Speaker 1: to call the menu, right, those are your investment options,
Speaker 1: what the choices are. They choose those for you. They
Speaker 1: have that responsibility to put that together. When you're doing
Speaker 1: an individual into an I RAN and retirement account, you
Speaker 1: can choose wherever you want to open that whatever institution.
Speaker 1: So I always say I would just align it with
Speaker 1: what the investment choices, because you don't want to open one,
Speaker 1: let's say at investment company ABC, and then you don't
Speaker 1: like investment company ABC's investment options, right, so you should
Speaker 1: have opened it with investment company you know, d F
Speaker 1: and then you like those options better, so you want
Speaker 1: to investigate what the investment options are. But yeah, within
Speaker 1: an individual retirement account, it's your choice wherever you want
Speaker 1: to open it. I love that because then you can
Speaker 1: really control, like, like, you know, do I like this
Speaker 1: one with the lower fees or this one with the
Speaker 1: even lower fees, or do I like the robo advisor
Speaker 1: that like does it all for me? Or do I
Speaker 1: want to like create my own portfolio. I love the
Speaker 1: roth ira A for that that it gives you total control,
Speaker 1: and it can seem intimidating because you have so much control.
Speaker 1: But like Barbara said before, like you know the basics
Speaker 1: and then if it gets too complex, then you can
Speaker 1: seek somebody out with like more knowledge. Yeah, absolutely absolutely,
Speaker 1: speaking of total control and your choice. And the best
Speaker 1: time of the week, it's the of the week, that's right,
Speaker 1: It's time for the best minute of your entire week.
Speaker 1: Maybe a baby was born and his name is William.
Speaker 1: Maybe you've paid off your mortgage. Maybe your car died
Speaker 1: and you're happy to not have to pay that bill anymore,
Speaker 1: Duck bills, Buffalo bills, Bill Clinton. This is the bill
Speaker 1: of the week, Barbara. Every week we invite our listeners
Speaker 1: or in this case, our guests, to share with us
Speaker 1: their favorite film for this week, and I know you
Speaker 1: have one for us, and we are excited to hear it.
Speaker 1: I'm excited too, because you know, UM, a lot of
Speaker 1: times I focused so much on other people's finances, I
Speaker 1: forget to like look at my as closely. So I
Speaker 1: was doing a podcast. We're talking about refinancing, and I
Speaker 1: got off the podcast and I was like, I should refinance,
Speaker 1: and so I just refinance. And my first mortgage came
Speaker 1: in is on Friday, and I refinance to a much
Speaker 1: lower rate. And then also because the difference wasn't dramatic,
Speaker 1: it's I think it ended up being a hundred dollars
Speaker 1: more a month and I was paying, I cut ten
Speaker 1: years off the mortgage, so I'm saving over the course
Speaker 1: of the mortgage. I'm gonna stay like a hundred and
Speaker 1: eighty thousand by refinancing and lowering the number of years.
Speaker 1: So I was like pretty stoked. I never what I do.
Speaker 1: Here's your opportunity. We refinanced this uh in, and it
Speaker 1: felt so good seeing that six figure number. It's like,
Speaker 1: this is how much you're going to save on the
Speaker 1: cost of this house. Yes, it's so amazing, well done, Barbara,
Speaker 1: we just bought them home. Were a few years out
Speaker 1: from the refinancing process, but I am celebrating with you. Howing.
Speaker 1: It's it's so interesting how even increasing a bill can
Speaker 1: be exciting for what the long term benefit is. Yeah,
Speaker 1: that future thinking, I know, because it was a short
Speaker 1: so to Basically, I'm giving up a hundred bucks a
Speaker 1: month to save a hundred and eighty thousand, which is crazy.
Speaker 1: I'll take that all night. Well, if any of you
Speaker 1: all out there is listening and you want to submit
Speaker 1: your bill, whether it's about refinancing or something completely different,
Speaker 1: just your friend named Bill, visit for real Friends pod
Speaker 1: cast dot com, slash bill. Leave us your bill excited
Speaker 1: to hear it. Today's bill is brought to you by
Speaker 1: another podcast. If you like podcasts, you'll definitely want to
Speaker 1: subscribe to Frugal Living. It's sponsored by brad Steels, one
Speaker 1: of the longest running deal sites on the Internet, and
Speaker 1: it's chock full of savings hacks, financial tips and stories
Speaker 1: on how to live better for less. They just started
Speaker 1: their second season and they're covering a variety of topics
Speaker 1: you can easily apply to your own lifestyle, like the
Speaker 1: best times to buy TVs or flowers, love flowers, and
Speaker 1: how to safely shop online to avoid scams because scams
Speaker 1: still happen. You'll even meet a food waste warrior who
Speaker 1: talks about dumpster diving. Travis would like that, yes, And
Speaker 1: you'll hear from consumers just like you, as well as
Speaker 1: industry experts breaking down unique in different ways to shop smarter,
Speaker 1: which you know we absolutely love. Frugal Living is hosted
Speaker 1: by Jim Marcus, an editor of Brad's Deals, and is
Speaker 1: available anywhere you listen to podcasts, So subscribe to join
Speaker 1: the conversation and learn something new about frugal living. And
Speaker 1: now it's time for the lightning round. Boo boo. Okay,
Speaker 1: So for today's lightning round, we always get a little
Speaker 1: bit vulnerable, and Jill hates it because I'm a counselor
Speaker 1: as my day job, so UH love vulnerability, just not
Speaker 1: my own. But she's so good at it and that's
Speaker 1: why I try and get her to do it. So
Speaker 1: today we're talking about our rath i a opening stories
Speaker 1: and BROBERA. I know I didn't ask you specifically if
Speaker 1: you had a funny or interesting one, but like Jill
Speaker 1: and I have interesting stories around opening our Rathirias. But really,
Speaker 1: any funny or interesting um retirement account story that you
Speaker 1: have you can share with us here. So I learned
Speaker 1: about combating interests at sixteen. It was on The Today
Speaker 1: Show and I was like, this is amazing. I used
Speaker 1: to watch his day show when I got ready to
Speaker 1: show baby Today Show, and so they did it and
Speaker 1: it was like, if you're sixteen and you put away
Speaker 1: this amount of money, you'll have be a millionaire. And
Speaker 1: I was like, oh, that sounds great. So my day
Speaker 1: was my financial advisor obviously, and so I gave him
Speaker 1: the money and I found out when I went to
Speaker 1: go for college that he never put it in a raw.
Speaker 1: He put it in a five twenty nine to help
Speaker 1: favor my college. I was like, helping fund of my college,
Speaker 1: which is not what I was planning on. So I
Speaker 1: had to open another one, which is fine, but I
Speaker 1: was just like, Dad, that's not what I asked for.
Speaker 1: He was not like being a fiduciary. In that moment,
Speaker 1: we need to. We need to pay for college before
Speaker 1: you say for regirement. But it's fine. So now I
Speaker 1: have a round. I opened my own role. But yes,
Speaker 1: oh my gosh, that's good. Shout out to parents, all right,
Speaker 1: So mine would be when we So we paid off
Speaker 1: all of our debt, we paid off all of our
Speaker 1: student loans and everything, and we put our head in
Speaker 1: the sand for two years to get this done. And
Speaker 1: then when we came out, we were like, Okay, well
Speaker 1: now it's time to start investing. And we knew nothing
Speaker 1: about investing, like our parents didn't. Well, my parents didn't
Speaker 1: do it. Neither our parents talked about it to me
Speaker 1: or my husband. So like we just went with this
Speaker 1: dude that led a financial peace university class because we're like, oh,
Speaker 1: that's this seems appropriate, and he sells investments. And so
Speaker 1: we sat down and we had a meeting, and the
Speaker 1: whole meeting, I'm like, this feels weird, Like this field
Speaker 1: there's only four options like so, and it just like
Speaker 1: some of these fees feel weird. And I had no
Speaker 1: reason to think that, like nowhere in my like I
Speaker 1: had never heard of an index fund. I'd never heard
Speaker 1: of anything. But then so like where do you go
Speaker 1: when you feel weird and you want to learn stuff,
Speaker 1: you go to YouTube when you feel weird to learn stuff.
Speaker 1: You want to exercise, just go to YouTube. You go
Speaker 1: to YouTube. Um, and that's where I went, and I
Speaker 1: don't it's so bizarre. I don't know why. Like I
Speaker 1: wouldn't go to YouTube now to learn about investing unless
Speaker 1: it was like four X and options and stuff. But
Speaker 1: I did go there, and um, I ended up hearing
Speaker 1: this is way before I ever started a podcast. But
Speaker 1: I heard a video from Joe Saul sea Hi of
Speaker 1: stacking Benjamin's and Paula pant before anything, and they were
Speaker 1: talking about index funds and that one YouTube video. It
Speaker 1: wasn't even like a video of them, it was just
Speaker 1: a clip of a single podcast. I don't even know
Speaker 1: which podcast it was hers or his, I don't know.
Speaker 1: And uh, that led me to say, like, Okay, I'm
Speaker 1: gonna do it myself. I can do it myself. I'm
Speaker 1: going to do it myself. So I called me and
Speaker 1: I was like, hey, you can take care of my
Speaker 1: husband's investments, but like, I'm going to do it myself.
Speaker 1: And he's like, well, we can't really do that. And
Speaker 1: I was like, Okay, then I'm doing it all. And
Speaker 1: that was my last conversation with that man. Hey, I
Speaker 1: think it's so good that you went with your gut
Speaker 1: because if you are meeting with somebody and you don't
Speaker 1: have a good feeling, you should one percent leave. And
Speaker 1: then I feel like if they're ever pressure selling you
Speaker 1: on something like you need to do it today or
Speaker 1: you need to rush it also never a good sign.
Speaker 1: There is no rush with this stuff. Yeah, good tips. Yeah,
Speaker 1: that is a great tip. And I don't even know
Speaker 1: if they were pressuring me. I just got like a
Speaker 1: weird feeling. So and I wasn't even I knew nothing
Speaker 1: about retirement. So thank you to Joe. So I'll see hi.
Speaker 1: And Paula Pant I know you you're not listening, but
Speaker 1: thank you. I don't know, maybe maybe this will get
Speaker 1: back to them. I'm seeing a theme run through this,
Speaker 1: and it's making me realize the influence that we have
Speaker 1: as people in this space. For you, Barbara, the Today
Speaker 1: Show turned you onto investing Jen, it was you two videos.
Speaker 1: For me, it was a podcast. This podcast. Oh, we
Speaker 1: just get more and more progressive with it. But I
Speaker 1: opened to roth Ira A because Jen was like hey,
Speaker 1: we have this affiliate link through personal Capital, and if
Speaker 1: you open a roth ira a like with some company.
Speaker 1: I mean I used van Guard at the time, and
Speaker 1: you put a thousand dollars and more into it, then
Speaker 1: we can get this referral link and then we can
Speaker 1: post it to our audience and YadA YadA. So that
Speaker 1: was why I did it, to be able to get
Speaker 1: the twenty Amazon gift cards that came through the referral link.
Speaker 1: Oh the referral link didn't even end up working, and
Speaker 1: I was like, oh, well, what they wouldn't give you?
Speaker 1: I was like, you you don't know me. I've got
Speaker 1: a podcast and we have this many downloads, and they
Speaker 1: were still just like whatever, but they did give you
Speaker 1: the Amazon gift car. Eventually we at least one Amazon
Speaker 1: gift card anyhow, Uh that was why. And then I
Speaker 1: was like, okay, well, I guess I have this rath
Speaker 1: ir right now. But that was it. I opened it,
Speaker 1: I put a thousand dollars in. Okay, you go. You
Speaker 1: all know where this is going, those of you who
Speaker 1: who know anything about this stuff. That's all I did.
Speaker 1: I opened up a Vanguard account, put a thousand dollars
Speaker 1: in it, and left it, And then I start hearing
Speaker 1: Jen talk about, oh man, the number one mistake of
Speaker 1: people make is just opening one up and not choosing
Speaker 1: where to invest. And I'm like, I don't know, did
Speaker 1: I do that? Probably if if there's a number one mistake,
Speaker 1: I probably made it. But then I was I was
Speaker 1: too nervous to ask anybody, so I start youtubing that's
Speaker 1: where you go, right, like Jen said, that's where you go,
Speaker 1: And You're like nervous and something doesn't feel right, but
Speaker 1: no one wants No one was answering that question, like
Speaker 1: once it's in there, what do I do with it?
Speaker 1: Everyone wants to talk about, like here's how you go
Speaker 1: to van guard and set up an accoun I'm like,
Speaker 1: I'm not that much of a dummy, Like I know
Speaker 1: how to do that. Now I want to figure out
Speaker 1: how to invest it. Where do I go? And then Jen,
Speaker 1: I remember you saying that you did a video on it,
Speaker 1: so that I was searching your channel looking for your video.
Speaker 1: I couldn't find it. That's a sidebar, you might want
Speaker 1: to make it more obvious. Anyhow, Then one night I
Speaker 1: was hanging out at Jen's house and I finally worked
Speaker 1: up the courage to say so, I don't think mine's
Speaker 1: actually invested. And she was like, all right, let's check
Speaker 1: it out, and she like logs on. She's like, sure enough, Nope,
Speaker 1: it's been sitting in here for a whole year not
Speaker 1: doing anything. And it was more complicated than I thought.
Speaker 1: She's like typing in all these numbers and letters capitalized,
Speaker 1: and I'm like, how as a normal person would I
Speaker 1: have ever been able to do this. I'm I'm not
Speaker 1: a dummy, but that was complicated. It felt complicated to
Speaker 1: me anyway. Taking the investments, I feel like, is more
Speaker 1: intimidating than it needs to be. I can't have any
Speaker 1: help on that, unfortunately, just because of we're being licensed.
Speaker 1: But there is an easy way to have, like a
Speaker 1: formula to there's like some easier ways to do it,
Speaker 1: and there's some like auto plans that kind of take
Speaker 1: care of it for you. But yeah, that I would say,
Speaker 1: that's one of the big mistakes. And then the other
Speaker 1: one I would say, it's not putting a beneficiary on it.
Speaker 1: I did do that, yes, okayd have a beneficiary checked that? Yeah. No,
Speaker 1: it is definitely especially with like the discount online brokers
Speaker 1: that you know, that most people go with the Van
Speaker 1: Garden Fidelity. It's there's probably I mean, I think there's
Speaker 1: a reason why they're low cost is because they don't
Speaker 1: have a super like tech friendly intuitive um and I
Speaker 1: think they have like interface eight thousand options or something
Speaker 1: like when you go to search, there's like so many
Speaker 1: investment options. Yes, so yeah, I mean it's it is complicated,
Speaker 1: but there are definitely ways to simple ways to to
Speaker 1: do that for yourself if that's what you want to do.
Speaker 1: Otherwise you can go through a Boa advisor and they
Speaker 1: will do it for you. So yeah, man, thank you
Speaker 1: Barbara so much for sharing all of your wisdom. Seriously,
Speaker 1: you were so and we didn't even like touch the
Speaker 1: surface of like everything you know, So, like, where can
Speaker 1: people get more from you? Sure? So you can follow
Speaker 1: us on Instagram. Is probably the best Future rich podcast
Speaker 1: on Instagram. And then we also have a website Future
Speaker 1: rich podcast dot com. We created a roth Ira rath
Speaker 1: actually we call it all about roles because it's not
Speaker 1: just about the roth Ira download for the listeners. So yeah, so,
Speaker 1: and where can people get that? I didn't it's not
Speaker 1: in color, it's in it's a color PDF. So um
Speaker 1: on our website. You can get it so at Future
Speaker 1: Ridge podcast dot com and it's you put in your
Speaker 1: email address and then you'll get the download on all
Speaker 1: Things Roth. I love it. Thank you so much. Thank
Speaker 1: you Barbara for sharing all this, for holding our vulnerabilities
Speaker 1: and being kind with us. It's good to have a
Speaker 1: friend in this space. And thanks for sharing all of
Speaker 1: your knowledge while some of your knowledge. Thanks for being here.
Speaker 1: Thank you for having me. That was fun. I didn't
Speaker 1: think that I would say that after a talk about
Speaker 1: retirement accounts, but you know, I had fun. Yeah. No,
Speaker 1: Barbara just put a lot of insight out on the table.
Speaker 1: And I hope that even if you did kind of
Speaker 1: know what a rathira was or you'd heard of one,
Speaker 1: I hope that after this episode, like you feel confident
Speaker 1: about it and you have that baseline education because there
Speaker 1: are so many things that you can do on your own.
Speaker 1: You don't have to know everything about in investing to
Speaker 1: start investing. Yeah, and if you're like Barbara Jen or
Speaker 1: myself and hearing this causes a spark in you to
Speaker 1: go open and invest into a retirement account, please let
Speaker 1: us know. We're always hanging out in the Frugal Friends
Speaker 1: community group on Facebook, and we love to hear these
Speaker 1: updates and what the podcast has inspired you to do,
Speaker 1: or just the smart financial things that you're doing on
Speaker 1: your own, how you're being frugal, all these things. Absolutely,
Speaker 1: and thank you so much for listening. So we want
Speaker 1: to thank you for downloading the episode, subscribing, and leaving
Speaker 1: your kind reviews. It is the best way you can
Speaker 1: support the show without spending a penny, because it lets
Speaker 1: people know that we're a legit show. And for every
Speaker 1: one star review that complains about our voice and our laugh,
Speaker 1: we have a bunch of you giving us five star
Speaker 1: reviews about how cool the content is. So kind of
Speaker 1: like this one from am Wheel and it just happens
Speaker 1: to be five star ours and they say, do Jen
Speaker 1: and Jill have a secret? I love this one is
Speaker 1: get ready for this Jill. I listened to this podcast
Speaker 1: with my boyfriend. He said it sounded like to June
Speaker 1: Diane Raphael's talking about money, and he understood why I
Speaker 1: like it. June has historically been my doppelganger, so I'm
Speaker 1: feeling a little threatened. But whether it's Jen and Jill
Speaker 1: or simply to June's this is the best and most
Speaker 1: binge able personal finance podcast. Do I Wish I was
Speaker 1: June number three? On the cast obviously has a global
Speaker 1: pandemic normalized pretending I am June number three because we're
Speaker 1: all hard pressed for socialization right now, or June and
Speaker 1: June that friendly and warm in their convos that everyone
Speaker 1: pretends to do this and we do it anyway, even
Speaker 1: if there wasn't a pandemic. I guess you'll just need
Speaker 1: to listen to find out if you start lolling or
Speaker 1: making comments out loud. Welcome June number four, a first
Speaker 1: star Hall of Fame one a gas. I think that's
Speaker 1: the best word. Jaw dropped, probably because all of them
Speaker 1: job draw breakers on the bus, but also so excited.
Speaker 1: I think I even have tinges of goose bumps with
Speaker 1: how amazingly written, how connected, how thoughtful and funny and
Speaker 1: witty and adorable? Who knew? I got a review? Good
Speaker 1: hold and contain so much? Yeah? I so, I actually
Speaker 1: had to google June Diane Raphael and uh, she's an
Speaker 1: actress who has started on comedy programs such as Burning
Speaker 1: Love Something on Adult Swim and Grace and Frankie So
Speaker 1: and yeah, and she's beautiful, so like to have her
Speaker 1: as a doppelganger is a blessing. Well done. I am Wheel,
Speaker 1: am Wheel. Whoever you are good, You are a third.
Speaker 1: Good for you. Yeah, you are third and welcome to any.
Speaker 1: June number four welcome, you are safe, here to all you.
Speaker 1: June number four is we want to thank you our
Speaker 1: friends who share these episodes on social media. So when
Speaker 1: you share the latest episode and tag us on Facebook
Speaker 1: or Instagram, we're adding you to the monthly drawing. For
Speaker 1: every five tags and reviews we get each month, we're
Speaker 1: giving away a copy of the Frugal Friends workbook. It's
Speaker 1: just where you can get more from us, more content,
Speaker 1: more of our ideas, some of the visuals, the thoughts,
Speaker 1: it's questions. It's good do it with a friend, So
Speaker 1: keep leaving us reviews on iTunes or Stitcher, whether they
Speaker 1: are groundbreaking or very simple, we will take either. Send
Speaker 1: us a screenshot to Frugal Friends podcast at gmail dot com,
Speaker 1: and don't forget to tag us on social We see it. Bye.
Speaker 1: Frugal Friends is produced by Eric Sirian Jen. I feel
Speaker 1: like there's so many things that we could follow up
Speaker 1: on right now. YouTube. You being my own personal retirement
Speaker 1: financial planning expert. Italian food that you got for free
Speaker 1: for Kai last night. I don't know. I mean you
Speaker 1: want to say, I will say, okay. So on the
Speaker 1: Italian food, we went in there, we had going to
Speaker 1: pick food. Yeah, so sorry support this. We went in
Speaker 1: there and we had to buy one get one free
Speaker 1: promo and we went in there on kids Eat Free
Speaker 1: Day and we're like feeling good about ourselves, and then
Speaker 1: at the end of the dinner, the waiters like, I'm sorry,
Speaker 1: you can only use one of these promos at a time,
Speaker 1: and we're like, we would not have fed our child
Speaker 1: if we'd known that, and that's totally what did you choose? Well,
Speaker 1: we choose to buy away one free because ours were
Speaker 1: more expensive, but like we definitely could have fed him
Speaker 1: from our plates. Yes, you know that's what you normally do. Yes,
Speaker 1: And so it was a sad time, um, because we
Speaker 1: thought we were doing so well and then everything came
Speaker 1: crashing down in an instant. Did you at least have leftovers? Yes,
Speaker 1: which I ate for lunch today. And I also got
Speaker 1: a glass of wine Happy our promo, So it was
Speaker 1: actually I didn't realize it was happy our promo. So
Speaker 1: I got for half off, and so there was a
Speaker 1: wind there. So there were so many there were so
Speaker 1: many winds, but like they were just eclipsed by the
Speaker 1: major loss. The takeaway here is ask about all your
Speaker 1: coupes from the beginning. Yes, I mean it's a rookie mistake,
Speaker 1: but it really is. You should ask how many promos
Speaker 1: can I stack in this one meal. It can be
Speaker 1: embarrassing at first, but you keep living that frugal lifestyle
Speaker 1: and eventually it tears down all your pride and ego
Speaker 1: and you're just ready to put the coops on the table.
Speaker 1: Ask about their deals, Ask about how much things are
Speaker 1: when there's no prices listed next to it. That is
Speaker 1: a big pet peeve of mine. How are you going
Speaker 1: to list all this stuff on your menu and not
Speaker 1: put a price next to it? I just won't go
Speaker 1: to that restaurant if I see. If I look at
Speaker 1: a menu and there's no prices next to I leave.
Speaker 1: Or why ask I don't have any pride? How much
Speaker 1: is this? How much? How much? Because I know, I
Speaker 1: just know that it's high. If it's not gonna if
Speaker 1: you ain't gonna write it down, there's probably high. Yeah,
Speaker 1: I don't want to be here for that, and it's
Speaker 1: usually at these middle of the road restaurants too, or
Speaker 1: it's not like you're attracting the super wealthy, Like why
Speaker 1: why keep it a secret? Talking about secrets, those are
Speaker 1: the secrets that annoy me. The pricing, for sure, Just
Speaker 1: be transparent so I can know that I'm not going
Speaker 1: to order it.