WEBVTT - Ask HTM - Student Loans Blocking Roth IRA contributions, Tapping Retirement Funds After a Layoff, & Going with a Health Sharing Plan to Save Big #496 0:00:00.120 --> 0:00:02.880 Welcome to How the Money. I'm Joel and I am Matt. 0:00:02.920 --> 0:00:25.919 Today we're answering your listener questions. This is a listener 0:00:26.000 --> 0:00:29.560 Question Monday episode. Next week we'll have another interview for you, 0:00:29.600 --> 0:00:32.360 just like we did last week, but on the every 0:00:32.400 --> 0:00:34.760 other Monday's we have listener questions. Put it. Put it 0:00:34.800 --> 0:00:36.319 on your calendar so you know what you're getting into, 0:00:36.680 --> 0:00:38.720 so you can start looking forward to it, playing your 0:00:38.720 --> 0:00:42.360 months around the different episodes that we've got slated for 0:00:42.400 --> 0:00:44.640 you exactly. I think your life should revolve around your 0:00:44.680 --> 0:00:47.640 favorite podcasts, and so hopefully we make your list of favorites. 0:00:47.680 --> 0:00:50.159 Absolutely so. We've got five great listener questions to get 0:00:50.159 --> 0:00:53.200 to today. One of those is about how student loans 0:00:53.200 --> 0:00:55.760 can prevente you from contributing to a roth ira A. 0:00:55.880 --> 0:00:59.080 We've got a listener question who is potentially going to 0:00:59.200 --> 0:01:01.360 tap some retirement funds after getting laid off? We're going 0:01:01.400 --> 0:01:03.920 to tackle that one, as well as when to consider 0:01:04.000 --> 0:01:07.800 health sharing plans over health insurance in order to save 0:01:07.920 --> 0:01:10.200 some money. We got those three plus a couple of 0:01:10.200 --> 0:01:13.800 others today. As Uh, the NBA JAM spokesman would say, 0:01:14.000 --> 0:01:18.840 in my video game Growing Up Boom Shakolaka. What does 0:01:18.880 --> 0:01:21.000 that have to do? I don't know. Is that that 0:01:21.080 --> 0:01:23.920 was after like getting to two shots in a row, right, 0:01:24.040 --> 0:01:26.360 I think so? And he's like he's heating up. After 0:01:26.440 --> 0:01:28.920 four he's on fire. Four or five, he's on fire. 0:01:28.959 --> 0:01:31.600 I like, boom shakolaus to my favorite. But before we 0:01:31.880 --> 0:01:33.800 get to those questions, Matt, just a one quick tip 0:01:33.880 --> 0:01:36.840 I wanted to share is that, let's say you're taking 0:01:36.920 --> 0:01:38.920 ride chair and you and I were both one car families. 0:01:39.000 --> 0:01:41.080 I probably take ride chair just a little bit more 0:01:41.120 --> 0:01:43.040 than you, but I don't really take it all that often. 0:01:43.280 --> 0:01:45.959 But the other day I don't go anywhere. You just 0:01:46.000 --> 0:01:48.400 say no to plans. I just I just hanging hanging 0:01:48.400 --> 0:01:51.160 out around the house. So this past weekend I went 0:01:51.240 --> 0:01:55.040 to play disc golf friend. That's only simili true. It's 0:01:55.440 --> 0:01:58.040 also mostly true you're kind of a hermit. But so 0:01:58.120 --> 0:02:01.040 it was my friend's birthday and there was just no 0:02:01.080 --> 0:02:02.800 way for me to borrow the car because my wife 0:02:02.840 --> 0:02:05.080 was going to meet up with us later and it 0:02:05.200 --> 0:02:07.160 was too far a little bit too far for the bike, 0:02:07.280 --> 0:02:08.600 or if I tried to buy it would have been 0:02:08.639 --> 0:02:11.520 like really late. And so I was like, all right, 0:02:11.560 --> 0:02:13.239 I guess ride chair it is on this one and 0:02:13.320 --> 0:02:15.640 I on the hail and Uber. Yeah, I maybe use 0:02:15.760 --> 0:02:18.120 ride chair once a month. Um, trying to you know, 0:02:18.360 --> 0:02:20.320 not do it too often because it's expensive. And when 0:02:20.360 --> 0:02:23.079 I opened not as expensive though as buying a used 0:02:23.120 --> 0:02:25.160 car right now completely, you know, I mean, and so 0:02:25.160 --> 0:02:27.919 relative to what you know, the expenses that you're used to, yes, 0:02:28.320 --> 0:02:30.400 it's maybe a little more expensive than than what you 0:02:30.400 --> 0:02:32.200 would like to see. But for everybody else out there 0:02:32.240 --> 0:02:34.840 who is either looking to buy that second car or 0:02:34.880 --> 0:02:37.160 they're just just the cost of maintaining that second vehicle. Man, 0:02:37.360 --> 0:02:40.240 there's Uber and left charges. It's a small fee to pay, 0:02:40.280 --> 0:02:42.000 and we're going to have one car to drop in 0:02:42.120 --> 0:02:44.600 the bucket. And and so I opened the Uber app 0:02:44.600 --> 0:02:46.280 and it was like, I think it was like thirty 0:02:46.320 --> 0:02:49.760 eight or forty two dollars for overnight. So I take 0:02:49.800 --> 0:02:52.440 back five miles away and I think it's five miles away. 0:02:52.840 --> 0:02:55.519 And then but then I opened up the lift app 0:02:57.680 --> 0:03:00.880 and so it literally what a massive difference, same cheap car, 0:03:01.400 --> 0:03:03.720 like you weren't getting like the you know, Uber black 0:03:04.240 --> 0:03:06.280 would always choose the cheapest option. I choose to wait 0:03:06.320 --> 0:03:07.800 and save. I was like, I can wait ten minutes 0:03:07.800 --> 0:03:10.320 to save an extra five bucks. And so, yeah, that's 0:03:10.320 --> 0:03:13.760 one of those things where if you are a habitual 0:03:13.880 --> 0:03:15.560 ride chair user, or even if you just use it 0:03:15.600 --> 0:03:19.440 on occasion, have an account with both of these main apps, 0:03:19.520 --> 0:03:21.280 and then you know it takes almost no time to 0:03:21.280 --> 0:03:23.440 plug in your destination into both and kind of just 0:03:23.720 --> 0:03:27.400 see the price discrepancy. Literally, an extra thirty seconds or 0:03:27.480 --> 0:03:31.359 minute can save you bucks. Um, it's it's amazing how 0:03:31.600 --> 0:03:33.480 big the price difference can be. I just assumed that 0:03:33.520 --> 0:03:36.920 it would be a few dollars difference, but I didn't realize. No, no, 0:03:36.960 --> 0:03:39.440 the price can get cut in half. Yeah, totally worth 0:03:39.440 --> 0:03:41.480 it to shop around the different apps and see, you 0:03:41.560 --> 0:03:43.800 know who's offering the best rate. Also, another quick tip 0:03:43.840 --> 0:03:45.800 two is to make sure you've got your updated credit 0:03:45.840 --> 0:03:48.720 card information on file with both apps. That way, because 0:03:48.760 --> 0:03:50.600 you don't want to be in a situation where you 0:03:50.640 --> 0:03:52.920 see that oh my gosh, yeah I could save a 0:03:52.920 --> 0:03:55.360 ton of money and then they're like, oh card declined 0:03:55.440 --> 0:03:57.720 or please update your information. That's the kind of thing 0:03:57.800 --> 0:03:59.960 that also takes a little bit of foresight to make. 0:04:00.080 --> 0:04:03.280 And those prices are changing like every thirty seconds, like 0:04:03.280 --> 0:04:05.560 they're updating all the time. So yeah, you might end 0:04:05.600 --> 0:04:07.560 up paying ten bucks more just because I had to 0:04:07.560 --> 0:04:09.960 put my credit card information in So uh yeah, not 0:04:10.000 --> 0:04:12.440 a bad tip. Alright, let's let's move on. Matt. Let's 0:04:12.480 --> 0:04:14.560 mention the beer that we're having on this episode. This 0:04:14.560 --> 0:04:17.720 one is called Sour Bikini and it's by Evil Twin Brewing. 0:04:18.000 --> 0:04:20.839 We'll give our thoughts on this sour hoppy beer at 0:04:20.880 --> 0:04:23.920 the end of the episode, but for now, let's move 0:04:23.960 --> 0:04:26.279 on to listener questions. And if you have a question 0:04:26.279 --> 0:04:28.600 you want Matt and I to tackle in an upcoming episode, 0:04:28.800 --> 0:04:31.280 just go to how to money dot com slash ask. 0:04:31.560 --> 0:04:34.320 It's really simple to submit that question and we've got 0:04:34.360 --> 0:04:36.719 instructions for you there. Can't wait to hear from you. 0:04:36.760 --> 0:04:38.880 All right, let's get to that first one. This one 0:04:39.160 --> 0:04:43.120 is about health insurance. Hi, Matt and Joel really enjoy 0:04:43.200 --> 0:04:45.600 your podcast. My name is John and from the Portland, 0:04:45.640 --> 0:04:51.400 Oregon area. Question today is about medical sharing programs. I 0:04:51.480 --> 0:04:56.359 know that you've got some information on your website about those. However, 0:04:56.680 --> 0:04:59.760 I know that Joel mentioned that he had moved over 0:04:59.839 --> 0:05:02.040 to to a medical sharing program this year. I believe 0:05:02.800 --> 0:05:05.680 by listening to your podcast, I was just wondering how 0:05:05.720 --> 0:05:10.160 that's going, if you had any newer observations with your 0:05:10.160 --> 0:05:13.960 experiences with it. My situation is that I'm retired. I'm 0:05:14.000 --> 0:05:16.760 on Cobra from my former employer until the end of 0:05:16.760 --> 0:05:18.559 this year, and then I really need to do something 0:05:18.640 --> 0:05:21.400 next year. And with the cost of the premiums, even 0:05:21.400 --> 0:05:23.960 with Cobra, it's so expensive, and was really looking at 0:05:24.400 --> 0:05:27.520 a medical sharing program as an alternative to that. So 0:05:27.880 --> 0:05:30.039 if you have UM I'm about two and a half 0:05:30.120 --> 0:05:34.560 years from my medicare and my wife is about three 0:05:34.560 --> 0:05:36.080 and a half years from that. So wondering if you 0:05:36.120 --> 0:05:39.800 see any pitfalls or any suggestions or opinions that you 0:05:39.880 --> 0:05:42.760 might have in addition to the information that that you've 0:05:42.760 --> 0:05:45.920 provided so far. Thanks so much again, Really enjoy your show. 0:05:45.960 --> 0:05:49.039 Thanks for taking time to answer my question. All right, Matt, 0:05:49.200 --> 0:05:51.919 like John's question, and we haven't talked about health sharing 0:05:51.920 --> 0:05:54.240 companies in in a minute. It's been a minute. Yeah, 0:05:54.279 --> 0:05:57.560 and yeah, you have been on meta share your family 0:05:57.600 --> 0:05:59.960 for years and years now, so we'll get to kind 0:06:00.080 --> 0:06:02.200 some of your experience. But John's right, Like, I just 0:06:02.279 --> 0:06:05.200 signed up not too long ago with the same company 0:06:05.240 --> 0:06:07.000 year with with meta share, and it's been I don't know, 0:06:07.000 --> 0:06:09.400 seven or eight months now, I guess. And I actually 0:06:09.480 --> 0:06:12.680 joined up even though I still had Cobra eligibility with 0:06:12.800 --> 0:06:17.880 my prior company because those Cobra premiums were almost a 0:06:17.920 --> 0:06:22.520 month cost prohibitive, right, Yeah, so it sounds like you know, 0:06:22.560 --> 0:06:26.080 your previous employer, John was covering those costs. So good 0:06:26.080 --> 0:06:28.840 for you. But yeah, so far, so good in our 0:06:28.880 --> 0:06:31.680 meta share experiment. But we also haven't had any major 0:06:31.800 --> 0:06:33.880 incidents yet, and so you know, it's not like I've 0:06:34.080 --> 0:06:38.080 necessarily put our Medishare coverage to an extreme test. Yeah, 0:06:38.120 --> 0:06:40.520 we are in a similar boat where we've not actually 0:06:40.640 --> 0:06:43.520 had to fully utilize menis share yet. Which is the 0:06:43.560 --> 0:06:44.839 way to do it. That's what you want. You don't 0:06:44.839 --> 0:06:46.040 want to put it to the extreme test, like you 0:06:46.040 --> 0:06:47.800 don't want to be like I got cancer and it 0:06:47.839 --> 0:06:50.840 paid out, like you'd prefer, hopefully to not get some 0:06:50.880 --> 0:06:54.480 of something severe, right, no severe injuries, no terrible diseases. 0:06:54.520 --> 0:06:56.560 Although I will say that I say that we haven't 0:06:56.560 --> 0:06:59.440 fully util utilized it, but just having that there, I mean, 0:06:59.480 --> 0:07:01.440 it gives you usertain amount of peace of mind, right, 0:07:01.480 --> 0:07:03.120 And so I guess you could argue that we have 0:07:03.240 --> 0:07:04.720 been using it this and you know, I think we've 0:07:04.760 --> 0:07:06.600 had it now for over five years, you know, So 0:07:06.680 --> 0:07:09.760 let's kind of explain what these different health sharing companies are. 0:07:10.200 --> 0:07:12.280 And it is really important for us to say loud 0:07:12.320 --> 0:07:15.560 and clear that health sharing is not insurance. UH. It 0:07:15.600 --> 0:07:18.160 differs in a few different ways. It's it's first of all, 0:07:18.200 --> 0:07:21.440 it's not regulated like insurance companies are. Some people hate 0:07:21.440 --> 0:07:23.880 them because of this, but others love them for it. 0:07:24.200 --> 0:07:26.320 But these companies like they're they're basically a group of 0:07:26.320 --> 0:07:30.680 members who are pooling risks and resources, not unlike insurance. 0:07:31.560 --> 0:07:35.080 But they typically have similar religious or ethical beliefs as 0:07:35.120 --> 0:07:37.600 one another as well, and they usually have to sign 0:07:37.640 --> 0:07:41.000 a pledge stating that they'll abide by certain guidelines, certain behaviors. 0:07:41.200 --> 0:07:43.440 That's definitely the case for Meta Share, who Joel and 0:07:43.520 --> 0:07:46.520 I are both with. UH. If you're not particularly religious, 0:07:46.640 --> 0:07:48.640 Liberty health share they used to be one of the 0:07:48.680 --> 0:07:51.240 only options since you're not required to agree to any 0:07:51.280 --> 0:07:55.760 specific like doctrinal beliefs, but recently, said Era, they've been 0:07:55.800 --> 0:07:58.840 another option that's available that is completely secular with with 0:07:58.880 --> 0:08:01.960 no religious ties at all. And so these are worth 0:08:01.960 --> 0:08:04.600 considering because you know, although these companies aren't technically in 0:08:04.640 --> 0:08:08.440 the insurance business. They still behave like insurance, right, they 0:08:08.440 --> 0:08:11.840 still have insurance like vibes. You're gonna learn some different terms, 0:08:11.840 --> 0:08:13.680 some some different Lenko. Just like I said, instead of 0:08:13.680 --> 0:08:16.240 a family deductible that's gonna be reached with meta share, 0:08:16.280 --> 0:08:19.320 it's called an annual household portion. There's different terms, but 0:08:19.360 --> 0:08:21.920 they are very similar to the ones that insurance companies 0:08:21.920 --> 0:08:24.360 actually used as well. So if you jump into the 0:08:24.400 --> 0:08:26.400 health sharing game, if you decide that this is right 0:08:26.440 --> 0:08:28.920 for you, you're gonna have to learn some new terminology, 0:08:29.240 --> 0:08:31.440 but don't worry. It's not too difficult, and it will 0:08:31.480 --> 0:08:33.559 reflect kind of what you're used to with a traditional 0:08:33.600 --> 0:08:36.400 insurance provider. And and let's talk about why someone might 0:08:36.440 --> 0:08:38.240 do this mat I mean one of the main reasons 0:08:38.280 --> 0:08:41.240 people sign up for a health sharing program instead of 0:08:41.240 --> 0:08:44.319 getting traditional insurance. It's really just the cost savings, right, 0:08:44.320 --> 0:08:47.480 as John pointed out, that is the main check mark 0:08:47.600 --> 0:08:50.160 in in favor of ditching your current health insurance and 0:08:50.200 --> 0:08:53.600 going towards to a health sharing company. And the monthly 0:08:53.640 --> 0:08:56.440 premiums MATT for our family what we'd be paying on 0:08:56.480 --> 0:08:59.560 a traditional health plan through healthcare dot gov. I looked into. 0:08:59.600 --> 0:09:03.120 It was in the dollar a month range, which is 0:09:03.200 --> 0:09:05.000 still not quite as much as our Cobra was, but 0:09:05.000 --> 0:09:07.920 it's really expensive. In our our monthly share amount through 0:09:07.920 --> 0:09:11.400 menashare is in the two hundred and fifty range, So 0:09:11.800 --> 0:09:14.680 that's just a significant savings. Yeah, you heard Joe correctly 0:09:16.080 --> 0:09:18.200 to two hundred and fifty. Yeah, and a lot of 0:09:18.200 --> 0:09:20.880 people could see savings in that range if they offer 0:09:20.920 --> 0:09:24.560 health sharing instead of traditional health insurance. It's worth knowing 0:09:24.720 --> 0:09:27.120 noting that that you know, this health sharing coverage, it 0:09:27.160 --> 0:09:30.960 doesn't cover wellness visits and routine lab work since menashare 0:09:31.040 --> 0:09:33.720 views those types of visits and more as like planned maintenance. 0:09:33.920 --> 0:09:35.920 But you know what, they would argue, that's a good thing, 0:09:35.960 --> 0:09:37.439 and I think I would argue that's a good thing 0:09:37.600 --> 0:09:39.760 to un that's that's how we're able to keep costs 0:09:39.760 --> 0:09:41.959 down right exactly, are covering some of these things out 0:09:41.960 --> 0:09:44.960 of pocket where we are intentionally, whether that's shopping around 0:09:45.080 --> 0:09:47.240 or proactively going to see the doctor when it comes 0:09:47.280 --> 0:09:51.160 to certain ailments we might be experiencing. Yeah, and it's 0:09:51.200 --> 0:09:53.880 kind of like um car insurance. How you don't file 0:09:53.880 --> 0:09:56.400 a claim just because you get a flat tire and 0:09:56.440 --> 0:09:59.040 I think that's a better use of health insurance. The 0:09:59.160 --> 0:10:01.200 same thing with with home or insurance. You don't file 0:10:01.240 --> 0:10:04.280 a claim because a rock went through one of your 0:10:04.320 --> 0:10:06.960 window panes. You get that repaired on your own, And 0:10:07.000 --> 0:10:09.520 so that's kind of how these health sharing companies work. 0:10:09.800 --> 0:10:12.920 But wellness visits, you know, are eligible for sharing for 0:10:12.920 --> 0:10:15.640 for small children up to the ages of six. Um. 0:10:15.679 --> 0:10:17.520 There doesn't appear like that's the stage of life the 0:10:17.600 --> 0:10:19.840 year in John, if you're a couple of years out 0:10:19.880 --> 0:10:23.359 from being eligible for Medicare. But yeah, those cost savings 0:10:23.400 --> 0:10:26.320 depending on age and stage and your income can be 0:10:26.480 --> 0:10:29.000 significant if you're out for health sharing versus traditional health 0:10:29.000 --> 0:10:31.320 care insurance. Yeah, but keep in mind that these plans, 0:10:31.320 --> 0:10:33.640 they're not the best choice for everyone. So let's talk 0:10:33.679 --> 0:10:37.040 about who these plans make sense for, who they don't. John, 0:10:37.080 --> 0:10:38.959 this isn't going to be your situation. But if you've 0:10:38.960 --> 0:10:41.920 got health insurance through your employer, that's always almost gonna 0:10:41.920 --> 0:10:44.240 be the best spot for you because employers they often 0:10:44.240 --> 0:10:46.160 help subsidize a big chunk of the month that cost, 0:10:46.200 --> 0:10:49.079 of course, and also because of government subsidies, folks under 0:10:49.120 --> 0:10:51.679 a certain income threshold, they can make out like bandits 0:10:51.679 --> 0:10:55.440 by getting their coverage through healthcare dot gov. It's worth 0:10:55.440 --> 0:10:57.520 putting in your information to see what sort of subsidy 0:10:57.600 --> 0:11:00.439 you might qualify for if you're in a situation like this. 0:11:00.920 --> 0:11:02.720 The a c A. They made some big changes to 0:11:02.760 --> 0:11:06.640 how the subsidies are calculated and how much folks can get. 0:11:06.880 --> 0:11:09.559 A lot more folks qualify for greatly reduced pricing now, 0:11:09.600 --> 0:11:10.960 and so you know, don't run to one of these 0:11:10.960 --> 0:11:13.920 health sharing planes if you have a better option, although 0:11:14.000 --> 0:11:16.079 for you, John, it doesn't sound like that you necessarily 0:11:16.200 --> 0:11:18.120 have a better option. Yeah, yeah, it sounds like health 0:11:18.120 --> 0:11:20.679 sharing does make the most sense in this interim period 0:11:21.040 --> 0:11:24.120 for John until that or Cobra. Yeah, he gets to 0:11:24.360 --> 0:11:28.079 Medicare and and Corobra is just so dang expensive. It's 0:11:28.080 --> 0:11:30.000 gonna cost John an arm and a leg, and that's 0:11:30.040 --> 0:11:32.480 money that could likely be put to better use. And 0:11:32.520 --> 0:11:33.880 so yeah, if you're if you're one of these folks 0:11:33.880 --> 0:11:36.640 who can get a traditional healthcare policy on the exchange 0:11:36.960 --> 0:11:39.440 for a similar monthly premium to what you would have 0:11:39.440 --> 0:11:41.839 paid to one of the health sharing companies, well you'd 0:11:41.840 --> 0:11:46.120 suggest going in that direction because you're getting traditional health 0:11:46.120 --> 0:11:48.960 insurance for the same price. But if you make too 0:11:49.080 --> 0:11:51.600 much to qualify for one of these subsidies for a 0:11:51.640 --> 0:11:55.200 price break, and you feel comfortable agreeing to abide by 0:11:55.240 --> 0:11:57.240 the rules of the sharing company that you want to 0:11:57.280 --> 0:11:59.679 go with, and with the caveats right that these sharing 0:11:59.720 --> 0:12:02.320 company's come with, we think they can save you a bundle, 0:12:02.440 --> 0:12:04.880 and they do make sense for you know, a handful 0:12:04.880 --> 0:12:08.040 of people. It's also important to mention that anyone going 0:12:08.120 --> 0:12:11.079 this route really should have extra money in their savings account, 0:12:11.120 --> 0:12:12.840 right because you know, I want to have at least 0:12:12.920 --> 0:12:16.520 enough on hand to cover your maximum out of pocket expenses, 0:12:16.760 --> 0:12:18.960 and that means your annual portion in addition to some 0:12:19.000 --> 0:12:20.640 of those wellnesses that you're going to have to take 0:12:20.880 --> 0:12:23.439 that year, Matt. And so we actually have a health 0:12:23.559 --> 0:12:26.480 sharing review up on our website and Math specifically talks 0:12:26.520 --> 0:12:29.880 about his experience with Meta share in depth on that 0:12:29.920 --> 0:12:32.360 will link to that article in our show notes. But 0:12:32.360 --> 0:12:34.000 but John, it sounds like for you this is a 0:12:34.000 --> 0:12:35.640 good stop gap for the next you know, two and 0:12:35.640 --> 0:12:37.640 a half three years until you get that you know, 0:12:37.720 --> 0:12:40.559 retirement health coverage from the federal government. Yeah, and it's 0:12:40.559 --> 0:12:43.240 worth pointing out to that regardless of which plan you 0:12:43.360 --> 0:12:45.960 go with. Of course, that you do your due diligence, 0:12:45.960 --> 0:12:48.160 that you dive into the details and specifically that you 0:12:48.240 --> 0:12:52.080 look at some of the different exclusions, right, and so 0:12:52.760 --> 0:12:55.880 tobacco use, if you have any pre existing conditions, even 0:12:55.920 --> 0:12:59.080 if you have some prescriptions that cost a lot of money. 0:12:59.120 --> 0:13:00.679 These are all things that you need be aware of 0:13:00.720 --> 0:13:02.680 before you end up signing and going with one of 0:13:02.679 --> 0:13:05.240 these companies. Yeah, they're not regulated in the same way 0:13:05.280 --> 0:13:07.440 as the traditional health insurance companies, and this is how 0:13:07.440 --> 0:13:09.960 they might have different different standards when it comes to 0:13:10.240 --> 0:13:12.560 each of those things that you just mentioned exactly. So yeah, 0:13:12.559 --> 0:13:14.360 definitely something to be aware of, John, Best of luck 0:13:14.400 --> 0:13:16.440 to you. All right, We've got more questions to get to, 0:13:16.520 --> 0:13:20.720 including how student loans could make somebody ineligible for contributing 0:13:20.760 --> 0:13:22.719 money to a roth ira A. We'll get to that 0:13:22.800 --> 0:13:34.240 and more right after this break. We're back from the 0:13:34.240 --> 0:13:37.600 Breaklet's key movement. We've got another listener question here, and 0:13:37.720 --> 0:13:41.520 this one has to do with house hacking. Hi, Joel 0:13:41.520 --> 0:13:44.040 and Matt. My name is Nicole and I live in 0:13:44.080 --> 0:13:48.280 the Raleigh, North Carolina area, and I have a question 0:13:48.360 --> 0:13:51.160 for you guys. This is in regards to house hacking. 0:13:52.000 --> 0:13:55.240 I currently have a successful airbnb business running out of 0:13:55.280 --> 0:13:59.040 my home for the past four years. I'm also contributing 0:13:59.080 --> 0:14:01.599 to my retired and by maxing out my wrath I 0:14:01.840 --> 0:14:06.240 RA and I match my work retirement savings, and I 0:14:06.280 --> 0:14:10.440 also put money consistently in an online savings account. My 0:14:10.559 --> 0:14:12.800 fancy and I would really like to get on the 0:14:12.800 --> 0:14:16.680 house hacking van wagen. He also has a significant amount 0:14:16.720 --> 0:14:20.040 of money in a savings account from a family inheritance 0:14:20.080 --> 0:14:23.400 to be used for this purpose. The problem is we 0:14:23.520 --> 0:14:28.040 don't know how or where to start. We're just interested 0:14:28.040 --> 0:14:31.400 in purchasing a four plux as a rental property. I 0:14:31.520 --> 0:14:34.480 listened to your podcast every day and love all of 0:14:34.480 --> 0:14:37.920 the suggestions you give, but just don't know how to 0:14:37.960 --> 0:14:40.880 begin this process. Do we work with a real letor 0:14:40.960 --> 0:14:44.520 to find our first investment property. I know that we 0:14:44.560 --> 0:14:48.440 need to put down because this will be an income property, 0:14:48.480 --> 0:14:50.840 but I guess this first step is just scary for me. 0:14:51.360 --> 0:14:55.040 We really want to do this. I appreciate any insights 0:14:55.040 --> 0:14:59.040 that you can give me. Also, another question about a printer. 0:14:59.600 --> 0:15:02.800 What auto of the absent echo tank do you recommend? 0:15:02.960 --> 0:15:05.560 There are some models that are really expensive out there, 0:15:05.720 --> 0:15:08.520 just wondering what you would prefer. Thank you and have 0:15:08.600 --> 0:15:11.560 a great day. All right, Nicole, thank you for that question. 0:15:11.960 --> 0:15:14.160 And first of all, let's talk about house acting, because 0:15:14.200 --> 0:15:16.160 that is truly one of the best levers that you 0:15:16.160 --> 0:15:18.560 can use to increase your income and to reach financial 0:15:18.560 --> 0:15:21.920 independence more quickly. I love that you're pursuing this, but 0:15:22.040 --> 0:15:25.600 here's the bottom line. You are already house hacking. We 0:15:25.640 --> 0:15:28.800 believe that anytime you're using real estate, uh and so 0:15:28.840 --> 0:15:31.240 that whether that's a single room like you're currently doing, 0:15:31.440 --> 0:15:34.200 or whether that's a quadplex, if you are using that 0:15:34.280 --> 0:15:37.080 strategy to offset the single largest line atom expense that 0:15:37.080 --> 0:15:39.360 we have every month, which is housing, then you are 0:15:39.440 --> 0:15:41.920 house hacking. But we understand what you're getting at here. 0:15:42.000 --> 0:15:44.040 You know, you're you're looking for a new investment property 0:15:44.040 --> 0:15:47.960 where you will potentially have full time tenants. Emotionally, that's 0:15:47.960 --> 0:15:50.520 going to feel a lot different and it's financially much 0:15:50.520 --> 0:15:52.600 different as well. But we think this is a smart move. 0:15:52.640 --> 0:15:54.840 We think it's great that you are looking to diversify 0:15:54.920 --> 0:15:56.960 your streams of income here. Yeah, I love it too. 0:15:57.040 --> 0:15:59.920 And let's get to maybe some of Nicole's specific questions. 0:16:00.040 --> 0:16:04.280 She mentioned having to put down and Nicole is actually 0:16:04.360 --> 0:16:08.160 ideal to have saved up for a down payment on 0:16:08.320 --> 0:16:11.280 an investment property because that is what usually gives you 0:16:11.320 --> 0:16:14.400 access to the best rates and terms, whereas if it's 0:16:14.400 --> 0:16:18.400 a primary residence, down basically gets you into that rarefied air. 0:16:18.440 --> 0:16:21.800 But is what lenders want to see if it's an 0:16:21.800 --> 0:16:24.400 investment property we're talking about, So I would start talking 0:16:24.480 --> 0:16:27.200 to a couple of local lenders right now, discuss your 0:16:27.200 --> 0:16:30.080 plans with them, and start getting rate quotes. At least 0:16:30.120 --> 0:16:31.640 three quotes is what I would want in hand if 0:16:31.640 --> 0:16:33.120 how were you, so you can compare them and get 0:16:33.120 --> 0:16:35.680 the best deal. And then, yeah, you mentioned a quadruplex, 0:16:35.960 --> 0:16:38.920 that's an excellent choice. We we love that idea because 0:16:38.960 --> 0:16:42.080 you can still get conventional financing, a conventional loan for 0:16:42.080 --> 0:16:44.520 a home that's up to four units. So basically you're 0:16:44.520 --> 0:16:46.000 in a sweet spot there. If you tried to go 0:16:46.240 --> 0:16:48.560 any bigger, you would need to get a different kind 0:16:48.560 --> 0:16:50.960 of loan that is going to come with worse terms 0:16:51.000 --> 0:16:53.040 for you in all likelihood. So yeah, you're you're definitely 0:16:53.120 --> 0:16:55.200 jumping in with both feet here by going by going 0:16:55.200 --> 0:16:58.160 with a larger multi family property as opposed to you know, 0:16:58.280 --> 0:17:00.560 something like a single family home. But we're cool with 0:17:00.600 --> 0:17:03.480 that because yeah, it sounds like you and your fiance 0:17:03.880 --> 0:17:06.959 you're both in really strong financial positions. You've been accident 0:17:07.000 --> 0:17:09.320 retiring and getting that match doing the right thing for 0:17:09.359 --> 0:17:11.119 a whole lot of years. You already kind of know 0:17:11.160 --> 0:17:13.399 what you're doing on the house hacking front. This is 0:17:13.480 --> 0:17:17.440 just expanding basically out that house hacking business that you've 0:17:17.520 --> 0:17:19.840 kind of already begune totally. Yeah, but it can be 0:17:19.880 --> 0:17:22.800 daunting when you purchase your first income property. Uh, just 0:17:22.800 --> 0:17:24.640 just like you're talking about, Nicole. But it sounds like 0:17:24.960 --> 0:17:27.080 that you are doing your due diligence. You know what 0:17:27.160 --> 0:17:29.479 you want, you know what you're getting into, and so 0:17:29.520 --> 0:17:31.960 the next step is shopping for the right property. And 0:17:32.119 --> 0:17:34.840 like you mentioned, getting an agent is an important piece 0:17:34.880 --> 0:17:37.119 to this puzzle. And it's it's best to get an 0:17:37.160 --> 0:17:39.359 investor friendly agent, you know, because they're going to have 0:17:39.359 --> 0:17:41.600 a better idea of what you might be looking for. 0:17:41.800 --> 0:17:44.280 They often have access to deals that might not appear 0:17:44.560 --> 0:17:47.200 on the MLS because of their connections. You want somebody 0:17:47.200 --> 0:17:50.280 who's familiar with investors, not someone who's just looking to 0:17:50.359 --> 0:17:53.200 buy like their dream home. Um, and you know, you 0:17:53.320 --> 0:17:56.400 want to have done enough research on specific neighborhoods as 0:17:56.400 --> 0:17:58.640 well as your rent prices. To know a good deal 0:17:58.640 --> 0:18:00.560 when you see it, because in this market, it like 0:18:00.600 --> 0:18:02.840 you're gonna need to pounce quickly when the right cash 0:18:02.880 --> 0:18:05.920 filling property comes along. As soon as something comes available, 0:18:05.920 --> 0:18:07.879 that's not the time for you to sit down, do 0:18:07.960 --> 0:18:10.640 some research, start looking, you know, looking at comps. By 0:18:10.680 --> 0:18:12.879 that point, you you want to have already done the 0:18:12.920 --> 0:18:15.160 research and to already know what it is that you're 0:18:15.200 --> 0:18:17.520 looking at the minute that you see it. You want 0:18:17.520 --> 0:18:20.080 to make sure that when that property comes up for 0:18:20.119 --> 0:18:23.359 sale that you say, boom, that's a deal. I know 0:18:23.440 --> 0:18:26.240 it because I've done so much freaking research about this 0:18:26.240 --> 0:18:29.440 neighborhood that it stands out like a store thomp exactly. 0:18:29.520 --> 0:18:32.560 And it's important to to think through, like no in advance, 0:18:32.640 --> 0:18:34.520 how much work that you are willing to put in 0:18:34.960 --> 0:18:37.520 uh and what you are capable of if you're willing 0:18:37.520 --> 0:18:40.439 to take on subcontractors to finish out certain rooms, if 0:18:40.440 --> 0:18:42.120 there's some work that needs to be done on the property, 0:18:42.320 --> 0:18:46.320 because that will also be valuable time that's on your side. 0:18:46.400 --> 0:18:49.119 With the market that we're in, you don't have days 0:18:49.160 --> 0:18:51.280 and weeks like we used to ten years ago. Where 0:18:51.280 --> 0:18:54.240 properties just sat there and you got to, you know, 0:18:54.400 --> 0:18:57.240 casually peruse the listings and see what's available that is 0:18:57.280 --> 0:18:59.920 just not the situation, that is not the current environ 0:19:00.080 --> 0:19:01.960 mints um. And then one other thing too I wanted 0:19:01.960 --> 0:19:05.400