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

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Speaker 1: Today we're talking about the money gears. Ordering your money

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Speaker 1: decisions properly, right, buddy, We are revisiting the money gears.

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Speaker 1: This is a topic that we've touched on before. This

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Speaker 1: is actually a term, a phrase that we've coined, so

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Speaker 1: this is proprietary information gear. But the money gears are

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Speaker 1: so important. They are a core philosophy essentially, and how

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Speaker 1: it is that we talk about money here on the show.

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Speaker 1: It informs how we answer listener questions. It informs what

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Speaker 1: you and I what we do even with our money.

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Speaker 1: And so because of the importance of this, it's been

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Speaker 1: I don't know, like two three hundred episodes since we've

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Speaker 1: last dedicated in hire episode to the money gears, we

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Speaker 1: felt that they were certainly worth revisiting and they're that important.

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Speaker 1: And it's it's April's Financial Literacy month actually interestingly enough,

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Speaker 1: that's right, So we're like, it's the only special month

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Speaker 1: that we Nah, I take that back, there's other special

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Speaker 1: months that we care about as well. I mean National

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Speaker 1: IPA Day, that's something we care a lot about. But

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Speaker 1: I think it's important for us too. Yeah, tackle this

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Speaker 1: again because it's been a while and because yeah, why

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Speaker 1: not in the month of April kind of talk about

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Speaker 1: a subject that really, when you're talking about like where

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Speaker 1: you start from, knowing the order of operations, when, when

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Speaker 1: to do what with your money is an important topic

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Speaker 1: for us to cover. That's true, man. But first I

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Speaker 1: wanted to share a quick little story I guess with you.

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Speaker 1: So last night was our date night. Thank you by

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Speaker 1: the way for coming over and watching the kiddos one time.

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Speaker 1: It was less eventful than the one before where there

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Speaker 1: was a sick hit on hand. Don't you don't share

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Speaker 1: that one. I'm not going to share details. It was rough.

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Speaker 1: I don't want to spoil anybody's meal. Maybe you're eating

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Speaker 1: your lunch right now as you see the episode. Usually

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Speaker 1: they're uneventful and I get to like listen to a

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Speaker 1: podcast or watch a movie. Sorry about that that one

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Speaker 1: was on It was rough. But either way, Kay and

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Speaker 1: we were last night, we were sitting there, we were

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Speaker 1: talking and we were just k was actually reflecting on

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Speaker 1: how our lives right now. They look a lot different

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Speaker 1: than we could have foreseen them looking like they and

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Speaker 1: this is a good thing, right, this is a good thing. Basically,

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Speaker 1: she's been spending a lot of a lot more time

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Speaker 1: recently volunteering, and she would not have expected that she

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Speaker 1: would be doing that as to the degree that she's doing.

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Speaker 1: But we were just reflecting on how awesome it is

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Speaker 1: for her to be able to do those things right,

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Speaker 1: and like, we're just so fortunate that we are in

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Speaker 1: a decent fancial place. And it got me thinking about

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Speaker 1: the show and how it is that we do talk

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Speaker 1: about money here because oftentimes, like what the world tells

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Speaker 1: us essentially right, it's just to live for now. There

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Speaker 1: aren't things in the future that you should be thinking about,

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Speaker 1: that you should care about. And even if you're fairly

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Speaker 1: responsible with your money, there's always the thought that, oh,

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Speaker 1: I can I can always make more money off in

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Speaker 1: the future. But really, dude, that's not guaranteed. It's like

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Speaker 1: counting your chickens for the hatch. Yeah, and not only that,

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Speaker 1: but so like you might not be able to earn money.

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Speaker 1: Like let's say something bad comes along and yeah, like

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Speaker 1: you've counted your chickens before they've hatched, and you no

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Speaker 1: longer have those But just even when it comes to

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Speaker 1: goal setting, I'm just constantly reminded that our goals are

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Speaker 1: constantly shifting. Like you know that just generally speaking, your

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Speaker 1: goals are off in a certain direction, and that you're

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Speaker 1: striving towards just health in these different ways, but what

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Speaker 1: specific things that you're striving after that can change fairly dramatically,

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Speaker 1: and so I guess I'm just making an argument for folks.

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Speaker 1: This is one of the big reasons why we talk

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Speaker 1: about handling your money well here on the show, is

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Speaker 1: because you never know what different goals you might have

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Speaker 1: for yourself, often to the future. And that's where I

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Speaker 1: think absorbing extra money that you might have into your

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Speaker 1: budget to spend in the here and now when you're

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Speaker 1: like it could be worth more to you down the

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Speaker 1: line at some point, depending on what changes happen in

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Speaker 1: your life. So I think it's I think it's really

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Speaker 1: it's a good point, Matty, and I think sometimes we

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Speaker 1: are and it looks different for all sorts of folks, right, Like,

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Speaker 1: I mean, it could look vastly different depending on who

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Speaker 1: you're talking to, what their life, you know, and what

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Speaker 1: those future financial goals might look like. But either way,

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Speaker 1: the steps that you take now to prepare for those things,

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Speaker 1: those all look similar, and that actually kind of ties

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Speaker 1: into like what we're talking about today, like with the

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Speaker 1: money gears. Yeah, but I too. I'm glad that I

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Speaker 1: had such a high savings, right, even though it cost

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Speaker 1: me certain things early on, because as our goals, as

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Speaker 1: our lives have changed, we just have a lot more

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Speaker 1: flexibility than we otherwise we have had. You know, if

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Speaker 1: we had just kind of spent all that money that

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Speaker 1: was coming in or most of it, and having a

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Speaker 1: high savings, right, it really gives you a lot more options,

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Speaker 1: especially as the year's progress. So totally, man, having those conversations,

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Speaker 1: having those check ins is good, and it's good you're

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Speaker 1: reminded of just like, yes, how far you come and

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Speaker 1: the abilities that Yeah, like volunteering, man, that's the thing.

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Speaker 1: A lot of people wish they could do that, even

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Speaker 1: when they get to retirement age. They're like, man, I

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Speaker 1: wish I could spend more time volunteering, but I gotta

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Speaker 1: keep working, And yeah, I hate that. That's a tough

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Speaker 1: position to be in. That's why it's so good to

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Speaker 1: prepare in advance, even before you have some of these bigger,

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Speaker 1: loftier goals that you know that you might be pursuing

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Speaker 1: exactly all right, So let's mention the beer or having

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Speaker 1: on this episode. This one is called Vinology Simion by

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Speaker 1: Monday Night Brewing. They're good, that's right, Okay, cool, But

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Speaker 1: Matt and I we drink a craft beer every episode

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Speaker 1: because it's something that we prioritize spending money on in

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Speaker 1: the here and now while we're also saving for the future.

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Speaker 1: It's kind of like the opposite of what we just

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Speaker 1: talked about. But you have to enjoy some of the

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Speaker 1: there's the fruits of your labor in the here and now.

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Speaker 1: There's a balance to strike, and that's oftentimes what we're trending,

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Speaker 1: which is always there's always tension in that. Yes, yeah,

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Speaker 1: but it's a good kind of tension that we all

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Speaker 1: have to wrestle with continually. But Matt, let's move on

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Speaker 1: to the subject at hand, which is the money gears.

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Speaker 1: That's what we're talking about, how to order your money

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Speaker 1: decisions properly. And Matt, I was listening to this podcast

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Speaker 1: about history and this guy listen to other podcasts, not

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Speaker 1: many except for hours. Well, I listen to ours on repeat,

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Speaker 1: just you know, to hammer everything. Okay, right, but but no,

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Speaker 1: this was this particular episode of this history podcast was

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Speaker 1: about the Vikings, and they're like basically discovery of Greenland.

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Speaker 1: And the cool thing is before modern instruments of wayfinding

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Speaker 1: were created, Like folks a thousand years ago, we're able

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Speaker 1: to get to and from Norway in Greenland, which is

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Speaker 1: just kind of mind boggling. No Google Maps or anything

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Speaker 1: like that. They're able somehow to get through this this

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Speaker 1: these massive trunks of ice and this incredibly long distance.

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Speaker 1: I want to say it's like fifteen hundred miles or

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Speaker 1: something like that from its pretty way to great That's

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Speaker 1: a long way to go in like a rudimentary ship.

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Speaker 1: And and even some of them made it all the

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Speaker 1: way to North America hundreds of years before Columbus, who

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Speaker 1: somehow gets all the credit. Yeah, Leeferrickson I think was

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Speaker 1: the guy. Yeah, you've heard of that. I've heard back

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Speaker 1: like the twelve hundreds, and there might have even been

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Speaker 1: people from from Norway before him. Yeah, But they had

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Speaker 1: an incredible knowledge about wayfinding and it allowed them to

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Speaker 1: yet to navigate these treacherous waters. They were using like

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Speaker 1: Milana style ways to get around right. Uh, which is it, MAUI?

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Speaker 1: The teachers are how to navigate in that movement? Oh yeah,

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Speaker 1: I think so well, so DEMI God right, and not

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Speaker 1: completely without peril. Some people got lost at sea never

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Speaker 1: made it back, but it's still impressive. And I think

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Speaker 1: while some of us might see our personal finances as

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Speaker 1: like this limitless ocean that feels completely unnavigable, too hazardous

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Speaker 1: for us to venture in, too, we want to help.

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Speaker 1: And the thing is knowing where you're starting from and

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Speaker 1: where you're headed it makes it a whole lot easier

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Speaker 1: to find your way. Yeah, you know, I don't even

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Speaker 1: know if they had maps back then. If so, I'm

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Speaker 1: I'm sure that they weren't all that great. But this

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Speaker 1: episode is essentially going to be a map that is

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Speaker 1: going to assist you in reaching your financial goals. And

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Speaker 1: though I don't you know, know anything about the Vikings,

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Speaker 1: like I know that they didn't have smartphones, right, well,

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Speaker 1: they also they did some pretty bad stuff too well,

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Speaker 1: and those are my people. I'm not gonna lie, so

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Speaker 1: maybe I should feel bad about it. There's a lot

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Speaker 1: of good and bad when you look back into the past.

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Speaker 1: But so like I'm talking about technology, I'm talking about smartphones,

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Speaker 1: and so that means that there were no modern apps

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Speaker 1: that we use on our phones all the time right

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Speaker 1: that we all take for granted. And one of the

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Speaker 1: greatest features about using ways or maps on your phone

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Speaker 1: is the ability to hit that little triangle that that

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Speaker 1: current location button and then it immediately zooms into where

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Speaker 1: you are at that very moment. And that, in a sense,

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Speaker 1: that's what we're doing today when it comes to you

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Speaker 1: and your finances, were we're gonna help you to locate

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Speaker 1: your financial situation so that you can then start moving

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Speaker 1: in the right direction. Yeah, yeah, And if you don't

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Speaker 1: know kind of your starting point, it's sure it's sure

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Speaker 1: hard to figure out which direction you're going right and

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Speaker 1: we we really believe it going in the wrong order

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Speaker 1: can screw up folks, even if they have the best intentions.

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Speaker 1: So if you start investing, let's say, before you've saved

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Speaker 1: a dime, you're getting things out of whack. And it's

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Speaker 1: similar to baking a cake, right, putting ingredients in at

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Speaker 1: the wrong time, you might screw up the recipe. And Matt,

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Speaker 1: you actually kind of did this a little bit early

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Speaker 1: on in your kind of personal finance journey. Yeah, yeah,

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Speaker 1: I mean so essentially it was so you're talking about

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Speaker 1: my roth Ira, Yeah, Well okay, so which We love

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Speaker 1: roth iras and we want people to have a rothira,

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Speaker 1: but you maybe opened one up too soon. Yeah, And

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Speaker 1: it's because I heard about investing and I thought, oh,

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Speaker 1: that's something I need to participate in. And I was

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Speaker 1: earning money, like from a real job for the first

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Speaker 1: time post graduating. That being said, I did not have

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Speaker 1: enough money on hand to get me through a little

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Speaker 1: like a little rough patch in my life where I

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Speaker 1: was changing locations. I was moving back to Atlanta, and

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Speaker 1: so that caused me to have to sell some funds

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Speaker 1: when otherwise I would not have wanted to do that.

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Speaker 1: I would have wanted to have kept that money invested

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Speaker 1: for the long haul. And so basically we're just we're

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Speaker 1: talking about this because we don't want you to become

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Speaker 1: like me. Don't want to be the poster child for

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Speaker 1: what not to do. We don't want you to make

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Speaker 1: the same mistakes. Right. Well, I did something similar in

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Speaker 1: a way. I paid off student loans that we're at

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Speaker 1: basically like a two percent interest rate before I prioritize

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Speaker 1: other things. So we'll talk about that too later on.

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Speaker 1: But like all the different topics that we cover on

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Speaker 1: the show, are you know, good practices and disciplines. It's

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Speaker 1: not like we're encouraging folks to do anything that's going

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Speaker 1: to take them further from their financial goals, unless your

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Speaker 1: craft beer habit maybe is getting a little bit out

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Speaker 1: of hand. Let's hope not. But the order that you

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Speaker 1: tackle all these different strategies and practices is vitally important.

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Speaker 1: It's going to make the difference in how financially prepared

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Speaker 1: you feel and how prepared you actually are. And so

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Speaker 1: if you can see the plot points on the way

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Speaker 1: to your destination, figure out where you are, but then

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Speaker 1: also be familiar with the route that you're going to take,

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Speaker 1: it makes a journey far less daunting. And so, you know,

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Speaker 1: we kind of want to put these pieces together and say, yeah,

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Speaker 1: we talk about all these different things all the time,

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Speaker 1: but the order that you do them in just matters

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Speaker 1: a lot. And so like, let's lay that order out today.

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Speaker 1: That's right, And so let's talk about why we call

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Speaker 1: these the money gears, And the reason for that is

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Speaker 1: because biking specifically, that's one of our favorite things to do.

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Speaker 1: If you've been listening to the show for any amount

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Speaker 1: of time, you know that, and so it just made

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Speaker 1: sense for us to use bike gears as a way

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Speaker 1: to describe how we move through money decisions within our lives. Joel,

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Speaker 1: you and I we both bike to work every single day.

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Speaker 1: We encourage biking for physical but also financial reasons. But

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Speaker 1: the gears on a bike are pivotal. Like that pivotal,

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Speaker 1: it's extremely tough to bike up a gargantuan hill just

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Speaker 1: using like one of your big fast gears. Even honestly

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Speaker 1: getting rolling to begin with, that can be extremely tough

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Speaker 1: if you're on too high of area. It can just

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Speaker 1: be so incredibly frustrating if you don't understand this basic concept.

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Speaker 1: And so if you properly use the gears on your bike,

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Speaker 1: it's gonna allow you to arrive at your destination a

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Speaker 1: whole lot less sweaty, and you're gonna have a whole

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Speaker 1: lot more fun in the process. And similarly, if you

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Speaker 1: use your money gears properly, we think, dare say, we

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Speaker 1: know that you will arrive at your financial destination with

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Speaker 1: a whole lot less financial stress along the way. Yeah, agreed.

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Speaker 1: And every individual, by the way, is going to move

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Speaker 1: through the money gears at a different pace. Some of

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Speaker 1: you are shooting for fire fire movement, the financial independence

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Speaker 1: retire early. You want to retire at thirty seven with

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Speaker 1: a million or more in your investment accounts, more power

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Speaker 1: to you. And you might be saving fifty plus percent

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Speaker 1: of your income something like that, which is awesome. Others,

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Speaker 1: you might have just started learning about personal finance. This

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Speaker 1: might even be your first How to Money episode. Who knows.

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Speaker 1: You might not even have an emergency fund set up

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Speaker 1: at all. You might have four kids or five kids

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Speaker 1: or something like that. More mouse defeat, which means that

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Speaker 1: progress is going to happen more slowly, Like everybody is

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Speaker 1: in a different boat, and there's no shame, that is true.

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Speaker 1: Shame is not a part of kind of how we

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Speaker 1: talk about money on this show. Our goal at How

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Speaker 1: to Money is to offer helpful advice to folks all

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Speaker 1: throughout that spectrum. And so the thing is, the money

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Speaker 1: gears are accessible for everyone, no matter where you currently

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Speaker 1: are and no matter how long it's likely going to

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Speaker 1: take you to reach those money goals that you have.

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Speaker 1: That's right, yeah, And the money gears they make sense

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Speaker 1: from a purely rational and from a like a numbers

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Speaker 1: and monetary standpoint for sure. Right, Like what we're going

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Speaker 1: to share with you today, if you opt to follow

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Speaker 1: the order that we're laying out. They're going to help

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Speaker 1: you to build wealth over time while also reducing how

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Speaker 1: much you have to worry about money in general. But

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Speaker 1: the money gears they also help from a psychological aspect

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Speaker 1: as well. It's not that you're just making financial progress,

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Speaker 1: but that you are doing it in a way that

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Speaker 1: is that's emotionally satisfying. And when you're encouraged by your progress,

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Speaker 1: you're likely going to keep it up. You're going to

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Speaker 1: keep doing the thing that you're winning at, which is

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Speaker 1: only going to lead to even more financial progress. And

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Speaker 1: so it's important to point out too, it's not just

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Speaker 1: the numbers from a psychological from an emotional standpoint too,

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Speaker 1: you are going to be in a much healthier place. Right.

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Speaker 1: So I feel like I should use an illustration here

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Speaker 1: based on biking. And so when I go for neighborhood

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Speaker 1: with my kids, got daughters who are nine and seven,

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Speaker 1: and so they're on their geared bicycles and they can

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Speaker 1: lose steam if they're going up a hill and if

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Speaker 1: they're in the wrong gear, and it just feels so

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Speaker 1: defeating to be going up that gear. We're like usually

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Speaker 1: heading towards one of those little free libraries in the

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Speaker 1: neighborhood to see if there's like some free books or

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Speaker 1: something that we can snag. And I always like, when

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Speaker 1: one of my girls is struggling, I say, what gear

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Speaker 1: are you in? And I'm just encouraging them to like

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Speaker 1: pull it down a couple notches, right, because if you're

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Speaker 1: going eighty to that little gear, yeah, I think they

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Speaker 1: have eight eight gear bikes maybe, or seven or eight gears,

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Speaker 1: I forget how many they have. But when they're in

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Speaker 1: gear six trying to go up a steep hill, man,

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Speaker 1: you're talking about like a real slog, a lot of

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Speaker 1: sweat and just a lot of frustration. But if they

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Speaker 1: can dial it back down to gear two, yeah, maybe

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Speaker 1: the going is going to be a little bit more slow,

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Speaker 1: but actually not really because while it feels like it's

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Speaker 1: going more slow, at least you're keeping steady and at

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Speaker 1: least you're moving up the hill with regularity. And so yeah,

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Speaker 1: that's just something that's always the questionable, what gear are

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Speaker 1: you in? Can we move it back down so that

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Speaker 1: you can continue this momentum so you can keep climbing

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Speaker 1: and not basically have to like stop and walk your

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Speaker 1: bike up the hill, which which just like, man, that

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Speaker 1: that's like a that's a frustrating thing too. Yeah, that's ours. Yeah,

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Speaker 1: And to extend the metaphor, there is a place, there's

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Speaker 1: a time and a place for those taller gears. Yeah,

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Speaker 1: but it's after you've it. It's once you're going down

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Speaker 1: the other side of the hill, right like that, and

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Speaker 1: that's when it's fun. But oftentimes we're trying to shortcut

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Speaker 1: to what we think is going to be the faster,

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Speaker 1: funner gears, but we're not in the position to be

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Speaker 1: able to handle some of those taller gears. And and

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Speaker 1: so that's just a preview that we will talk about

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Speaker 1: some of those more fun gears that hopefully everyone listening

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Speaker 1: to this episode, well we'll be able to attain here

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Speaker 1: in short order. Yeah, I agreed. Well, in these gears,

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Speaker 1: I want to say also they stand the test at time,

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Speaker 1: like we came up with them a few years ago.

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Speaker 1: But the truth is, no matter the economic environment, we've

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Speaker 1: seen some changes, some shifts in the economic environment over

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Speaker 1: the past few years. Of course, you can still use

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Speaker 1: our money Gears formula to decipher what it is you

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Speaker 1: should be doing with your money. Next the macro economic

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Speaker 1: reality might sometimes cause us to make small tweaks in

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Speaker 1: our decision making, but when it comes to these broad

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Speaker 1: based money gears, it doesn't really have an impact. That's true,

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Speaker 1: kind of the order of operations that we feel is

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Speaker 1: most important for your money. Okay, So we are going

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Speaker 1: to get into all of the seven money gears. We're

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Speaker 1: going to describe them in detail, and we'll discuss how

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Speaker 1: you should be progressing their proper order for things. We'll

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Speaker 1: get to all the fine details on that right after this.

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Speaker 1: All right, man, we are back from the break and

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Speaker 1: it is now time for us to dive into these

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Speaker 1: money gears. And so there's seven money gears, and of

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Speaker 1: course we're going to start with money gear number one,

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Speaker 1: which is the basic emergency fund. Let's kind of make

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Speaker 1: a case for having an emergency fund. There's a brand

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Speaker 1: new study from Secure Safe and they found that seventy

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Speaker 1: five percent of Americans are stressed about their finances and

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Speaker 1: then those increased levels of stress or then impacting of

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Speaker 1: their productivity at work, which is not a good thing,

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Speaker 1: of course, And I mean saving up a basic emergency

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Speaker 1: fund that's not going to bring on like full on

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Speaker 1: economic security and relief to everyone out there, but it

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Speaker 1: is an underrated, massive first step to take that's going

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Speaker 1: to really alleviate a lot of money anxiety for folks

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Speaker 1: out there. And so, when you've got that basic emergency

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Speaker 1: fund of two thousand, four hundred and sixty seven dollars

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Speaker 1: set aside in your savings account for any sort of

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Speaker 1: emergency that could arise, you've got the beginnings of some

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Speaker 1: real financial power, and so we don't want you to

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Speaker 1: be a part of it. Here's another stat of the

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Speaker 1: fifty seven percent of Americans who can't access one thousand

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Speaker 1: dollars in a financial emergency. Essentially, this is living paycheck

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Speaker 1: to paycheck, which simply means you're dependent on that next

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Speaker 1: deposit showing up in your account to you know, every

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Speaker 1: two weeks. When you are living in that kind of

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Speaker 1: a state, when you're living on the financial edge like that,

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Speaker 1: it has all sorts of cascading consequences, and we don't

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Speaker 1: want you to be living with that day to day stress. Yeah,

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Speaker 1: there was another study recently about how a lot of

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Speaker 1: people if they lost their job tomorrow, they would have

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Speaker 1: a really hard time buy groceries, and so it's very

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Speaker 1: very similar. There's a lot of people living in this

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Speaker 1: sort of state in our country. And I will say

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Speaker 1: it's not always the fault of the individual, right, but

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Speaker 1: there are still a lot of things I think we

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Speaker 1: can do as individuals to bring power back into our lives.

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Speaker 1: And this is the first step. This is the first way,

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Speaker 1: that's the first part of the process to get some

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Speaker 1: of that financial power back in your life. And really,

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Speaker 1: when you think about it, when you boil it down,

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Speaker 1: this could be a reality for more people. Even though

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Speaker 1: the stats make it seem dire that most people are

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Speaker 1: not in this position, I think more Americans really could

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Speaker 1: get into this position, Matt. And let's talk about the

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Speaker 1: reason we picked the number two, four hundred and sixty seven,

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Speaker 1: Because it's very specific, very very specific. It's not a

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Speaker 1: random number. We just decide it up, right, We didn't

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Speaker 1: pull it straight out of our butts or anything like that.

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Speaker 1: But basically, economists did some research a couple of years back,

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Speaker 1: and they specifically found that having this amount of money

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Speaker 1: on hand would allow people to navigate most financial emergencies

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Speaker 1: without a problem, without breaking a sweat. And so with

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Speaker 1: inflation roaring, we might need to adjust this number at

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Speaker 1: some point. It might be like twenty seven sixty seven

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Speaker 1: or something, But right now we're gonna stick with twenty

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Speaker 1: four hundred and sixty seven. I think partly I love

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Speaker 1: that it's not a round number because it makes it

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Speaker 1: easier to remember. And if you've got that much cash

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Speaker 1: on hand, you're at a low risk of not being

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Speaker 1: able to afford an emergency that comes along, which is

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Speaker 1: really just a really really crucial thing for most people.

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Speaker 1: When most people aren't able to do this, you're already

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Speaker 1: living counter culturally, just achieving money year number one. Yes,

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Speaker 1: And by the way, that money should be in a

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Speaker 1: high yield savings account, and typically you're going to find

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Speaker 1: that with an online bank because they pay the best rates. Yeah,

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Speaker 1: we want you to ditch your local brick and mortar

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Speaker 1: one of the bigger banks like that because they ain't

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Speaker 1: paying jack well. Also, they're probably feeing you, which is

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Speaker 1: prohibiting you from being able to amass that sort of

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Speaker 1: emergency fund we need you to have. That's right. Yeah,

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Speaker 1: And by the way, an emergency is not needing Christmas

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Speaker 1: presents here at the end of the year, because that's

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Speaker 1: a known expense. It happens at the same time every

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Speaker 1: single year. It's an expense that you should be budgeting for,

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Speaker 1: and you've got plenty of time to start saving. The

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Speaker 1: emergency fund is for bigger money and financial messes that

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00:19:06,240 --> 00:19:10,159
Speaker 1: pop up, like a transmission failure on your car, but

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Speaker 1: not the oil change that you need, or not tires,

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Speaker 1: because again, those are things that you can plan for.

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Speaker 1: It's for something like a job loss, something that you're

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Speaker 1: not expecting to happen. Not for a regular expense. It's

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Speaker 1: not because tickets to Hawaiian on sale right exactly, That's

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Speaker 1: not what this is for. Yeah, And so in order

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Speaker 1: to achieve this level, this is going to involve you

429
00:19:29,480 --> 00:19:32,840
Speaker 1: tracking your spending and cutting back in some different areas

430
00:19:33,040 --> 00:19:35,440
Speaker 1: and specifically, if you need some ideas for the best

431
00:19:35,440 --> 00:19:37,600
Speaker 1: places to start trimming, we'd recommend for you to check

432
00:19:37,600 --> 00:19:40,960
Speaker 1: out episode two sixty. That's when you talked about seven

433
00:19:41,000 --> 00:19:43,000
Speaker 1: specific things that you can do this week in order

434
00:19:43,040 --> 00:19:44,800
Speaker 1: to cut back and save. And then we want you

435
00:19:44,880 --> 00:19:47,760
Speaker 1: to put that money in a special savings bucket. That's

436
00:19:47,800 --> 00:19:50,520
Speaker 1: what they call them over at ally. But essentially, we

437
00:19:50,640 --> 00:19:54,560
Speaker 1: want you to put some parameters around what it is

438
00:19:54,560 --> 00:19:56,400
Speaker 1: that you can use this money for, because we want

439
00:19:56,400 --> 00:19:59,080
Speaker 1: you to use them for actual emergencies, not just because

440
00:19:59,160 --> 00:20:00,399
Speaker 1: you want to be able to go hang out with

441
00:20:00,440 --> 00:20:02,640
Speaker 1: your hang out with your buds. Yeah, ear market for sure,

442
00:20:02,680 --> 00:20:04,679
Speaker 1: so that it's really only for that intended purpose. And

443
00:20:04,840 --> 00:20:07,760
Speaker 1: if it takes siphoning fifty bucks out of your account

444
00:20:07,760 --> 00:20:11,960
Speaker 1: every month and putting it into another bank altogether to

445
00:20:12,040 --> 00:20:14,600
Speaker 1: build up this emergency fund, this two thousand, four hundred

446
00:20:14,640 --> 00:20:17,280
Speaker 1: and sixty seven dollars, do that, Like, whatever it takes

447
00:20:17,280 --> 00:20:19,200
Speaker 1: to make sure you have this achieved and that you're

448
00:20:19,200 --> 00:20:21,359
Speaker 1: not going to touch it is important. And then if

449
00:20:21,359 --> 00:20:23,840
Speaker 1: you're already here, congrats. If not, this is the number

450
00:20:23,880 --> 00:20:25,479
Speaker 1: one goal. This is the first thing that you need

451
00:20:25,520 --> 00:20:27,960
Speaker 1: to be working on. Gear number one. But let's move on, Matt,

452
00:20:27,960 --> 00:20:32,120
Speaker 1: gear number two stagging your company match. And we want

453
00:20:32,119 --> 00:20:34,080
Speaker 1: all how the money listeners to be investing, but we

454
00:20:34,119 --> 00:20:36,080
Speaker 1: don't want them to and I hate to harp on

455
00:20:36,200 --> 00:20:37,879
Speaker 1: your mistake, but we don't want people to make that

456
00:20:37,920 --> 00:20:40,800
Speaker 1: mistake of opening up a retirement account before they're ready,

457
00:20:41,200 --> 00:20:42,840
Speaker 1: and because then you might need to pull that out,

458
00:20:42,840 --> 00:20:44,440
Speaker 1: you might need to pull that out, that money out

459
00:20:44,440 --> 00:20:46,480
Speaker 1: at a loss, and that's not a great position to

460
00:20:46,480 --> 00:20:49,119
Speaker 1: be and when you're getting started and so over the

461
00:20:49,160 --> 00:20:51,480
Speaker 1: long term, this is really how you grow wealth in

462
00:20:51,560 --> 00:20:55,040
Speaker 1: order to become truly financially free savings. A loan isn't

463
00:20:55,040 --> 00:20:57,080
Speaker 1: going to get you there, and so money Gear number

464
00:20:57,080 --> 00:20:58,760
Speaker 1: one gives you a taste of freedom, right, it gives

465
00:20:58,760 --> 00:21:01,160
Speaker 1: you more than you have you living paycheck to paycheck.

466
00:21:01,320 --> 00:21:04,600
Speaker 1: But Money Year two is pushing you further in that direction.

467
00:21:04,880 --> 00:21:07,600
Speaker 1: So if you have a company retirement plan and if

468
00:21:07,640 --> 00:21:10,920
Speaker 1: it comes with an employer match, contributing enough to get

469
00:21:10,960 --> 00:21:13,919
Speaker 1: the full amount of free dollars is really important. That's clutch.

470
00:21:14,160 --> 00:21:16,919
Speaker 1: And so that's just the next move we want you

471
00:21:17,000 --> 00:21:19,640
Speaker 1: to make. Some companies they're going to offer a dollar

472
00:21:19,720 --> 00:21:22,320
Speaker 1: for dollar match, which I love. I think it's wonderful.

473
00:21:22,640 --> 00:21:25,879
Speaker 1: If yours does that, you're even better off. Others do

474
00:21:25,920 --> 00:21:28,400
Speaker 1: something like fifty cents on the dollar. If you contribute

475
00:21:28,440 --> 00:21:31,360
Speaker 1: something like six percent, they'll put in three. Either way, though,

476
00:21:31,640 --> 00:21:34,359
Speaker 1: it's impossible to get a better return on your money

477
00:21:34,400 --> 00:21:36,880
Speaker 1: than the company match, because even if it's just fifty

478
00:21:37,000 --> 00:21:38,359
Speaker 1: er cents on the dollar, where else are you going

479
00:21:38,440 --> 00:21:41,880
Speaker 1: to get a better return on your investment than that?

480
00:21:41,440 --> 00:21:43,959
Speaker 1: And that's why this is such a huge financial priority,

481
00:21:43,960 --> 00:21:46,080
Speaker 1: and really it's Yeah, it's got to be number two

482
00:21:46,359 --> 00:21:48,560
Speaker 1: in the order of operations. Yeah, you know, it also

483
00:21:48,600 --> 00:21:50,560
Speaker 1: helps to just get the ball rolling when it comes

484
00:21:50,560 --> 00:21:53,399
Speaker 1: to investing, which is of critical importance for your future.

485
00:21:53,400 --> 00:21:57,440
Speaker 1: And so more companies are automatically enrolling you into the

486
00:21:57,840 --> 00:22:01,040
Speaker 1: different workplace retirement plans that they offer, and a lot

487
00:22:01,080 --> 00:22:03,800
Speaker 1: more employers actually will be required to do this on

488
00:22:03,960 --> 00:22:07,160
Speaker 1: your behalf starting next year. But you may not even

489
00:22:07,160 --> 00:22:09,120
Speaker 1: have a clue as to how much money that you're

490
00:22:09,119 --> 00:22:12,080
Speaker 1: putting in your FRO one K or maybe your four

491
00:22:12,160 --> 00:22:14,159
Speaker 1: or three B, and so we would recommend for you

492
00:22:14,200 --> 00:22:17,159
Speaker 1: to log into your company's the back end right like

493
00:22:17,160 --> 00:22:19,960
Speaker 1: the employee portal, make sure to check how much you've

494
00:22:19,960 --> 00:22:22,920
Speaker 1: got going towards your retirement savings. And if you have

495
00:22:23,440 --> 00:22:27,000
Speaker 1: the financial ability to cut back in some areas in

496
00:22:27,160 --> 00:22:30,560
Speaker 1: order to increase your contribution to that full match level,

497
00:22:30,960 --> 00:22:33,600
Speaker 1: we would highly recommend it, because again, this is money,

498
00:22:33,840 --> 00:22:35,960
Speaker 1: Like you are not going to see a return on

499
00:22:36,040 --> 00:22:38,160
Speaker 1: your investment as much as you're going to see with

500
00:22:38,200 --> 00:22:40,520
Speaker 1: an employer match. Yeah, and if it means cutting back

501
00:22:40,520 --> 00:22:42,359
Speaker 1: on taco Tuesdays where you go out to eat and

502
00:22:42,440 --> 00:22:45,320
Speaker 1: you just make tacos at home or stake Sundays, I

503
00:22:45,359 --> 00:22:47,000
Speaker 1: don't know if that's a thing, but I would like

504
00:22:47,040 --> 00:22:48,919
Speaker 1: that to be a thing. But if it means kind

505
00:22:48,920 --> 00:22:52,399
Speaker 1: of cutting back on some more expensive endeavors so that

506
00:22:52,440 --> 00:22:54,399
Speaker 1: you can funnel one or two percent more to make

507
00:22:54,440 --> 00:22:56,960
Speaker 1: sure you're getting the full match, we would say that's important.

508
00:22:57,000 --> 00:22:59,399
Speaker 1: And then it's such a high financial priority, and really

509
00:22:59,600 --> 00:23:01,920
Speaker 1: it's still we're still the beginning of the money gears here,

510
00:23:02,160 --> 00:23:05,520
Speaker 1: so this is an important step that we want everyone

511
00:23:05,600 --> 00:23:08,400
Speaker 1: to achieve. We don't want you leaving, Like I said,

512
00:23:08,400 --> 00:23:11,040
Speaker 1: that free money and the best return on your money

513
00:23:11,080 --> 00:23:14,760
Speaker 1: possible on the table, And if you can't contribute enough

514
00:23:14,760 --> 00:23:16,360
Speaker 1: to get the full match right away, set a goal

515
00:23:16,359 --> 00:23:17,639
Speaker 1: for when you're going to be able to do it,

516
00:23:17,920 --> 00:23:20,320
Speaker 1: like investing two percent more every time you get a

517
00:23:20,359 --> 00:23:22,280
Speaker 1: raise so that you're able to hit this level in

518
00:23:22,320 --> 00:23:24,239
Speaker 1: the next year or so. And if you don't have

519
00:23:24,280 --> 00:23:26,960
Speaker 1: a plan for when you can achieve this, it's probably

520
00:23:27,000 --> 00:23:29,640
Speaker 1: going to fall off your radar. So making that plan

521
00:23:29,920 --> 00:23:31,879
Speaker 1: to achieve this money gear in the near future is

522
00:23:31,880 --> 00:23:34,200
Speaker 1: crucial because it means if you got the plan and

523
00:23:34,240 --> 00:23:36,520
Speaker 1: you're implementing it, it's going to happen, as opposed to

524
00:23:36,640 --> 00:23:39,080
Speaker 1: leaving it to chance, which I don't know about you, Matt.

525
00:23:39,119 --> 00:23:41,080
Speaker 1: When I leave things a chance, they don't get done,

526
00:23:41,280 --> 00:23:43,959
Speaker 1: and it's more wishful thinking at that point, knowing that

527
00:23:43,960 --> 00:23:46,160
Speaker 1: it's something that you should do, as opposed to clear

528
00:23:46,240 --> 00:23:48,840
Speaker 1: actionable steps that you can take. Yeah, and it's important

529
00:23:48,840 --> 00:23:50,960
Speaker 1: to mention a caveat here too, because make sure you

530
00:23:51,040 --> 00:23:54,119
Speaker 1: take into consideration how long it takes for any matching

531
00:23:54,119 --> 00:23:57,360
Speaker 1: dollars that your employer contributes to vest like, how long

532
00:23:57,480 --> 00:23:59,399
Speaker 1: is that vesting period? How long have you been at

533
00:23:59,400 --> 00:24:01,760
Speaker 1: that employer, Because if it takes a while and you

534
00:24:01,760 --> 00:24:03,479
Speaker 1: don't plan on being with this employer for long, if

535
00:24:03,480 --> 00:24:05,560
Speaker 1: you're already shopping and looking for jobs down the street,

536
00:24:05,840 --> 00:24:09,000
Speaker 1: it doesn't necessarily make sense to make this as high

537
00:24:09,040 --> 00:24:11,800
Speaker 1: of a priority. But for most people, this is the

538
00:24:11,800 --> 00:24:14,120
Speaker 1: next money goal to be aiming for after you've secured

539
00:24:14,560 --> 00:24:17,359
Speaker 1: that basic emergency fund. And if you don't get a

540
00:24:17,400 --> 00:24:19,680
Speaker 1: company match at all, sorry, but you can just keep

541
00:24:19,720 --> 00:24:22,040
Speaker 1: peddling and move on to money gear number three. That's right,

542
00:24:22,160 --> 00:24:26,560
Speaker 1: which is paying off high interest rate debt and credit cards.

543
00:24:26,560 --> 00:24:30,159
Speaker 1: They're the likeliest culprit here. That being said, we're actually

544
00:24:30,160 --> 00:24:33,359
Speaker 1: fans of credit cards specifically as a method of payment

545
00:24:33,400 --> 00:24:37,280
Speaker 1: because of the different benefits and rewards protections that they offer.

546
00:24:37,640 --> 00:24:40,399
Speaker 1: But that being said, just about fifty percent of Americans

547
00:24:41,080 --> 00:24:43,639
Speaker 1: they're not paying off their balance on time. They're not

548
00:24:43,640 --> 00:24:46,720
Speaker 1: paying those off in full, which means they've got lingering

549
00:24:46,800 --> 00:24:49,800
Speaker 1: credit card debts. They're carrying those balances over a month

550
00:24:49,840 --> 00:24:52,760
Speaker 1: to month, and considering that the average credit card interest

551
00:24:52,840 --> 00:24:55,480
Speaker 1: rate is like in the twenty percent range, at this point,

552
00:24:55,520 --> 00:24:58,960
Speaker 1: your credit card debt has become a bigger problem than ever,

553
00:24:59,359 --> 00:25:01,480
Speaker 1: and ditching that debt as soon as possible that should

554
00:25:01,520 --> 00:25:04,840
Speaker 1: be a very high priority, not a top priority, because

555
00:25:04,920 --> 00:25:07,159
Speaker 1: that would be getting your emergency fund set aside. But

556
00:25:07,280 --> 00:25:09,600
Speaker 1: third down the list paying off that high interest rate debt.

557
00:25:09,760 --> 00:25:13,240
Speaker 1: And personal loans or other high interest car loans, they

558
00:25:13,280 --> 00:25:17,040
Speaker 1: can actually easily fall into this money gear as well,

559
00:25:17,080 --> 00:25:19,560
Speaker 1: as they tend to have some higher interest rates. But

560
00:25:19,560 --> 00:25:21,800
Speaker 1: it's important to point out that is not the type

561
00:25:21,840 --> 00:25:24,400
Speaker 1: of loan per se that causes it to go into

562
00:25:24,440 --> 00:25:27,280
Speaker 1: money gear three, but it's the rate that is associated

563
00:25:27,520 --> 00:25:29,800
Speaker 1: with the loan. There's higher rates that should cause you

564
00:25:29,840 --> 00:25:32,440
Speaker 1: to set your sights upon it, and so typically we

565
00:25:32,560 --> 00:25:36,320
Speaker 1: define that as about seven percent or higher. Anything below

566
00:25:36,400 --> 00:25:38,000
Speaker 1: that we want you to kind of kick that can

567
00:25:38,000 --> 00:25:39,520
Speaker 1: down the road a little bit. There are some other

568
00:25:39,560 --> 00:25:42,200
Speaker 1: priorities that we want you to turn your attention to first,

569
00:25:42,400 --> 00:25:45,720
Speaker 1: but certainly anything in the double digits, and we would

570
00:25:45,720 --> 00:25:48,280
Speaker 1: say even you know, once you start getting around seven percent,

571
00:25:48,320 --> 00:25:50,000
Speaker 1: and that's kind of up to you whether or not

572
00:25:50,040 --> 00:25:52,320
Speaker 1: that's something you want to tackle now, but definitely anything

573
00:25:52,400 --> 00:25:54,960
Speaker 1: higher than that falls into money gear. And number three, Yeah,

574
00:25:55,040 --> 00:25:56,199
Speaker 1: like how you said, it's not the type of loan

575
00:25:56,280 --> 00:25:58,280
Speaker 1: some people might say, Okay, what about my auto loan? Well,

576
00:25:58,280 --> 00:26:00,240
Speaker 1: it depends what the interest rate is right now and

577
00:26:00,440 --> 00:26:01,879
Speaker 1: whether or not that should be a top priority or not.

578
00:26:01,880 --> 00:26:03,600
Speaker 1: If you got one of those, you know, one point

579
00:26:03,680 --> 00:26:06,880
Speaker 1: nine percent aprs on that car for four years ago

580
00:26:07,280 --> 00:26:09,600
Speaker 1: and you're almost done paying it off, well, just paid

581
00:26:09,640 --> 00:26:12,440
Speaker 1: off as agreed, because that's actually that's not bad at all.

582
00:26:12,480 --> 00:26:14,639
Speaker 1: That's not a bad form of debt necessarily at this

583
00:26:14,680 --> 00:26:16,800
Speaker 1: point in time. But if you're like I had bad

584
00:26:16,840 --> 00:26:20,640
Speaker 1: credit I got that eighteen percent car loan, that's a

585
00:26:20,800 --> 00:26:23,040
Speaker 1: very very different ball game that we're talking about, And

586
00:26:23,040 --> 00:26:26,040
Speaker 1: so it's really important to assess not the kind of

587
00:26:26,119 --> 00:26:28,720
Speaker 1: loan that it is necessarily, but more than anything, the

588
00:26:28,760 --> 00:26:30,919
Speaker 1: interest rate in the terms associated within us, right, it's

589
00:26:30,920 --> 00:26:32,800
Speaker 1: about the numbers. Yeah, And I think this is also

590
00:26:32,800 --> 00:26:35,480
Speaker 1: a time to kind of tell people, hey, we prefer

591
00:26:35,520 --> 00:26:37,760
Speaker 1: you to stop using these forms of debt altogether. And

592
00:26:37,800 --> 00:26:41,080
Speaker 1: then if you can't actually afford the vehicle without taking

593
00:26:41,080 --> 00:26:43,720
Speaker 1: on some sort of high priced loan, it's probably not

594
00:26:43,760 --> 00:26:45,600
Speaker 1: worth it, and it would behoove you to look towards

595
00:26:45,880 --> 00:26:48,520
Speaker 1: a lower cost form of transportation. And so we want

596
00:26:48,520 --> 00:26:51,000
Speaker 1: all how to Money listeners to hopefully avoid this kind

597
00:26:51,040 --> 00:26:53,760
Speaker 1: of debt moving forward. That the best possible thing once

598
00:26:53,800 --> 00:26:55,439
Speaker 1: you get out of money Gear three paying off this

599
00:26:55,480 --> 00:26:57,879
Speaker 1: high interest rate debt would be to ensure that you

600
00:26:57,960 --> 00:27:00,800
Speaker 1: never fall back into that by avoiding all these kinds

601
00:27:00,840 --> 00:27:03,080
Speaker 1: of the worst kinds of loans really in the future.

602
00:27:03,359 --> 00:27:06,080
Speaker 1: And so to really tackle money your number three, it's

603
00:27:06,119 --> 00:27:09,520
Speaker 1: important to create a debt payoff plan. We just talked about,

604
00:27:09,520 --> 00:27:12,520
Speaker 1: Matt how important these plans are. And writing down all

605
00:27:12,520 --> 00:27:14,159
Speaker 1: your debts on a piece of paper or in like

606
00:27:14,160 --> 00:27:16,840
Speaker 1: a Google sheets or Excel file that's going to go

607
00:27:16,880 --> 00:27:19,320
Speaker 1: a long way. Documenting all those debts, listing out how

608
00:27:19,400 --> 00:27:21,240
Speaker 1: much you owe, what the interest rates are, so you

609
00:27:21,280 --> 00:27:22,840
Speaker 1: can look up smack dab in the face and see

610
00:27:22,920 --> 00:27:24,720
Speaker 1: kind of what you're dealing with. And if you want

611
00:27:24,720 --> 00:27:27,560
Speaker 1: to go digital, that's fine too, a site like undt

612
00:27:27,760 --> 00:27:29,760
Speaker 1: dot it that can help you kind of come up

613
00:27:29,840 --> 00:27:32,840
Speaker 1: with this plan for the order and the approach for

614
00:27:32,920 --> 00:27:36,000
Speaker 1: paying that debt off. Facing the facts though is just

615
00:27:36,320 --> 00:27:38,920
Speaker 1: a necessity here, and so whether you want to take

616
00:27:38,960 --> 00:27:41,679
Speaker 1: the avalanche or snowball approach, that can be really up

617
00:27:41,720 --> 00:27:43,840
Speaker 1: to you. We've got an article will link to in

618
00:27:43,880 --> 00:27:46,240
Speaker 1: the show notes about kind of how to make that decision.

619
00:27:46,520 --> 00:27:50,040
Speaker 1: The snowball approach kind of prioritizes psychology, the avalanche approach

620
00:27:50,400 --> 00:27:53,400
Speaker 1: prioritizes math, and depending on kind of you know, what

621
00:27:53,440 --> 00:27:55,600
Speaker 1: debts you have, what you owe, and what the interest

622
00:27:55,680 --> 00:27:58,880
Speaker 1: rates are, it's going to determine probably which which route

623
00:27:58,880 --> 00:28:00,800
Speaker 1: you choose to take. Yeah, well, I want to mention

624
00:28:00,840 --> 00:28:03,280
Speaker 1: too that back in the day, you and I would

625
00:28:03,400 --> 00:28:06,160
Speaker 1: say one hundred percent you should be taking the avalanche approach.

626
00:28:06,240 --> 00:28:08,240
Speaker 1: You should be focusing on the debts in your life

627
00:28:08,240 --> 00:28:11,399
Speaker 1: that have the absolute highest rates. But what we were

628
00:28:11,400 --> 00:28:14,480
Speaker 1: discounting is the psychology involved and the fact that if

629
00:28:14,560 --> 00:28:17,879
Speaker 1: you were so convinced by the you know, the different

630
00:28:17,880 --> 00:28:20,440
Speaker 1: interest rates in the numbers, that likely you wouldn't have

631
00:28:20,480 --> 00:28:23,240
Speaker 1: gotten into debt in the first place. A lot of times,

632
00:28:23,240 --> 00:28:26,320
Speaker 1: just like with the money gears, there are psychological wins

633
00:28:26,359 --> 00:28:29,600
Speaker 1: that come along with kind of taken getting some of

634
00:28:29,600 --> 00:28:31,760
Speaker 1: those wins and then using that momentum to build upon

635
00:28:32,080 --> 00:28:35,000
Speaker 1: some of the bigger, more audacious goals that you're striving after.

636
00:28:35,040 --> 00:28:36,440
Speaker 1: The same thing can be true when it comes to

637
00:28:36,760 --> 00:28:40,040
Speaker 1: paying off your debts. A lot of times, by eliminating

638
00:28:40,040 --> 00:28:43,440
Speaker 1: the smallest balances that can add fuel to the fire

639
00:28:43,480 --> 00:28:46,200
Speaker 1: and can give you the the kind of encouragement that

640
00:28:46,240 --> 00:28:49,600
Speaker 1: you need to continue on with that plan. And so

641
00:28:50,400 --> 00:28:53,520
Speaker 1: math's great, but if Matthew doesn't actually get the job done,

642
00:28:53,560 --> 00:28:55,920
Speaker 1: because it's not getting you to actually follow through and

643
00:28:55,920 --> 00:28:59,040
Speaker 1: take the action, then the math isn't enough. Absolutely. Yeah,

644
00:28:59,080 --> 00:29:01,800
Speaker 1: So yeah, I think that's that's really important thing to mention,

645
00:29:02,120 --> 00:29:03,920
Speaker 1: and so I'm glad you brought that up. And it's

646
00:29:03,920 --> 00:29:06,240
Speaker 1: also important to mention that if you encounter a setback,

647
00:29:06,400 --> 00:29:08,040
Speaker 1: don't let that get you down. Don't let that like

648
00:29:08,360 --> 00:29:12,040
Speaker 1: push off money gear three, it's important to keep pushing through.

649
00:29:12,080 --> 00:29:14,240
Speaker 1: Because it took you a while to get into this debt,

650
00:29:14,240 --> 00:29:16,320
Speaker 1: it's gonna take a little a little time to climb

651
00:29:16,360 --> 00:29:19,400
Speaker 1: out of it. If let's say you a transmission goes

652
00:29:19,440 --> 00:29:22,080
Speaker 1: bad in your car and you're working diligently on money

653
00:29:22,080 --> 00:29:23,560
Speaker 1: gear three and it feels like you got to go

654
00:29:23,560 --> 00:29:25,480
Speaker 1: back to money gear number one for a second because

655
00:29:25,480 --> 00:29:28,920
Speaker 1: you got to re up that emergency fund. That happens,

656
00:29:29,160 --> 00:29:31,960
Speaker 1: but just remember that's what the emergency fund is there for.

657
00:29:32,280 --> 00:29:34,400
Speaker 1: And boy, isn't it a good thing you took that

658
00:29:34,440 --> 00:29:38,239
Speaker 1: step before that emergency came down the pike. We're all

659
00:29:38,240 --> 00:29:41,240
Speaker 1: gonna have financial setbacks along the way, but that doesn't

660
00:29:41,280 --> 00:29:44,120
Speaker 1: mean that we abandon the gears and just throw in

661
00:29:44,160 --> 00:29:45,640
Speaker 1: the towel. What we do is we kind of go

662
00:29:45,680 --> 00:29:48,240
Speaker 1: back at it and we might have to dial back

663
00:29:48,280 --> 00:29:52,200
Speaker 1: a gear in order to continue making progress. But that

664
00:29:52,240 --> 00:29:55,680
Speaker 1: doesn't mean we've lost. It means we're just delayed in

665
00:29:55,680 --> 00:29:57,600
Speaker 1: our effort to win, which I feel like actually kind

666
00:29:57,600 --> 00:29:59,760
Speaker 1: of sounds like a high school Friday Night lights coach

667
00:30:00,360 --> 00:30:03,880
Speaker 1: that speech, But really, that's that's what's happening. It's really

668
00:30:03,920 --> 00:30:05,560
Speaker 1: give us that pep talk, Joe. Yeah, Well, and we're

669
00:30:05,880 --> 00:30:07,600
Speaker 1: we are going to be delayed. We're not going to

670
00:30:07,680 --> 00:30:09,720
Speaker 1: get there maybe as quickly as we thought. But hey,

671
00:30:09,760 --> 00:30:11,560
Speaker 1: that kind of stuff happens to like all of us, Matt,

672
00:30:11,640 --> 00:30:14,200
Speaker 1: you and I included like stuff. Stuff happens, so we

673
00:30:14,280 --> 00:30:16,600
Speaker 1: didn't expect and it might push back the timeline just

674
00:30:16,640 --> 00:30:19,040
Speaker 1: a little bit, but it doesn't erase the fact that

675
00:30:19,040 --> 00:30:21,720
Speaker 1: we're still going hard for that same goal. That's right. Yeah,

676
00:30:21,760 --> 00:30:23,600
Speaker 1: it doesn't erase the progress that we've already made. And

677
00:30:23,640 --> 00:30:26,120
Speaker 1: so so far the money gears, we've discussed our money

678
00:30:26,120 --> 00:30:28,600
Speaker 1: Geared number one, which is the basic emergency fund, money

679
00:30:28,600 --> 00:30:31,400
Speaker 1: gear two, which is snagging that company match, and the

680
00:30:31,520 --> 00:30:35,160
Speaker 1: number money geared number three paying off high interest rate debt,

681
00:30:35,440 --> 00:30:37,520
Speaker 1: and no matter what, you need to go in that order.

682
00:30:37,560 --> 00:30:41,080
Speaker 1: But what do you do once you have graduated from

683
00:30:41,160 --> 00:30:43,360
Speaker 1: money Geared number three, once you've paid off that last

684
00:30:43,600 --> 00:30:46,480
Speaker 1: high interest rate debt? And that's when things get maybe

685
00:30:46,480 --> 00:30:49,080
Speaker 1: a little more fun. We'll talk you through those gears

686
00:30:49,240 --> 00:31:02,160
Speaker 1: right after this. Let's keep going with the money Gears

687
00:31:02,240 --> 00:31:04,480
Speaker 1: episode we talked to the first three. I feel like

688
00:31:04,560 --> 00:31:07,480
Speaker 1: the first three kind it is kind of that uphill climb, right,

689
00:31:07,520 --> 00:31:09,840
Speaker 1: you're kind of getting and now we're starting to cress

690
00:31:09,880 --> 00:31:11,640
Speaker 1: the hill here as we're getting too. Four through seven,

691
00:31:11,680 --> 00:31:14,400
Speaker 1: let's say four, we're kind of at the top of

692
00:31:14,480 --> 00:31:16,880
Speaker 1: the hill. That's like kind of where we've reached equilibrium,

693
00:31:17,080 --> 00:31:19,000
Speaker 1: and then five, six and seven is where we start

694
00:31:19,040 --> 00:31:21,840
Speaker 1: kind of going downhill, and that is just such a

695
00:31:21,840 --> 00:31:24,320
Speaker 1: good feeling to have kind of the wind flying in

696
00:31:24,320 --> 00:31:27,440
Speaker 1: your face yours, it's momentum is on your side. So

697
00:31:27,600 --> 00:31:29,720
Speaker 1: it starts getting more fun, right well, mostly because you're

698
00:31:29,720 --> 00:31:32,360
Speaker 1: not you're you're paying much less of your money towards

699
00:31:32,400 --> 00:31:35,520
Speaker 1: other people, which is like that's the that's what feels

700
00:31:35,520 --> 00:31:37,840
Speaker 1: like the uphill slog or you're overcoming kind of passed

701
00:31:37,840 --> 00:31:41,200
Speaker 1: indiscretions typically in those first few money gears, and now

702
00:31:41,240 --> 00:31:44,000
Speaker 1: it's like boom, I'm proactively funding my future, which is

703
00:31:44,000 --> 00:31:46,960
Speaker 1: a completely different way of thinking about things. So yeah,

704
00:31:47,360 --> 00:31:50,400
Speaker 1: I agree, that's really it's a really important way way

705
00:31:50,440 --> 00:31:53,880
Speaker 1: to distinguish it. But money gear number four is when

706
00:31:53,880 --> 00:31:56,840
Speaker 1: you're able to fully fund your emergency fund with three

707
00:31:56,920 --> 00:32:00,400
Speaker 1: to six months worth of monthly expenses and sayings and

708
00:32:00,440 --> 00:32:02,560
Speaker 1: there's kind of a bunch of little nuance we've got

709
00:32:02,560 --> 00:32:04,440
Speaker 1: to talk about in this one too, but we're going

710
00:32:04,480 --> 00:32:06,720
Speaker 1: back to the savings well for money gear number four,

711
00:32:06,960 --> 00:32:08,640
Speaker 1: you know, that was kind of where we started at

712
00:32:08,680 --> 00:32:11,200
Speaker 1: money gear number one, but now it's like, Okay, cool,

713
00:32:11,280 --> 00:32:15,000
Speaker 1: you saved a little, then you invested a little, then

714
00:32:15,240 --> 00:32:17,680
Speaker 1: you paid off the worst kinds of debt. Now it's

715
00:32:17,680 --> 00:32:19,080
Speaker 1: time to go back to saving a little bit. And

716
00:32:19,440 --> 00:32:23,040
Speaker 1: some might find our prioritization of savings before investing more

717
00:32:23,320 --> 00:32:26,160
Speaker 1: a bit controversial. I don't think so, though, And like

718
00:32:26,440 --> 00:32:28,360
Speaker 1: we realize that there can be a degree of fomo

719
00:32:28,440 --> 00:32:30,880
Speaker 1: fear of missing out as you're seeing the markets climb

720
00:32:31,000 --> 00:32:33,160
Speaker 1: and you're just patting your bank account, but it makes

721
00:32:33,160 --> 00:32:36,080
Speaker 1: the most sense for you to have a solid savings

722
00:32:36,120 --> 00:32:39,080
Speaker 1: backup before you start to ramp up your investing efforts.

723
00:32:39,360 --> 00:32:41,680
Speaker 1: It's great that you kicked off your journey to financial

724
00:32:41,720 --> 00:32:45,040
Speaker 1: freedom with the basic kefund, but two four hundred and

725
00:32:45,120 --> 00:32:48,239
Speaker 1: sixty seven dollars, while that will insulate you from some

726
00:32:48,280 --> 00:32:51,680
Speaker 1: of the worst possible financial emergencies, it's only going to

727
00:32:51,720 --> 00:32:53,600
Speaker 1: be able to get you so far right, And so

728
00:32:53,880 --> 00:32:56,520
Speaker 1: having that three to six months worth of backstop or

729
00:32:56,600 --> 00:32:58,880
Speaker 1: the expenses set aside, is going to be able to

730
00:32:59,360 --> 00:33:01,880
Speaker 1: provide you with it a lot of stability that would

731
00:33:01,880 --> 00:33:04,240
Speaker 1: allow you to weather most financial storms. Like a lot

732
00:33:04,280 --> 00:33:06,560
Speaker 1: more than just two thousand bucks in the bank is

733
00:33:06,560 --> 00:33:08,880
Speaker 1: really gonna really gonna do for you. But that being said,

734
00:33:09,200 --> 00:33:12,240
Speaker 1: if you find yourself in a financial situation where things

735
00:33:12,240 --> 00:33:15,840
Speaker 1: are looking a little difficult, you might find yourself reverting,

736
00:33:16,040 --> 00:33:18,959
Speaker 1: like pairing back on your expenses a little bit. And

737
00:33:19,000 --> 00:33:21,360
Speaker 1: that's where it pays to have a bare bones budget.

738
00:33:21,400 --> 00:33:23,760
Speaker 1: We talked about that back in episode three sixty two.

739
00:33:24,080 --> 00:33:27,040
Speaker 1: But it's great knowing that you've got solved three to

740
00:33:27,080 --> 00:33:29,800
Speaker 1: six months, but by knowing that you can pair back

741
00:33:29,840 --> 00:33:31,400
Speaker 1: a little bit, there's a there's a chance you can

742
00:33:31,400 --> 00:33:35,160
Speaker 1: even extend that to six to nine months. Yeah, of

743
00:33:35,400 --> 00:33:38,280
Speaker 1: bare bones living, but let's talk about whether you need

744
00:33:38,720 --> 00:33:41,400
Speaker 1: three or whether you need six months worth of saving, Like,

745
00:33:41,400 --> 00:33:43,200
Speaker 1: how do you that's a big gap. So people are like, yeah,

746
00:33:43,200 --> 00:33:45,720
Speaker 1: how do you decide? Which one? Do I choose for myself? Guys? Well,

747
00:33:45,800 --> 00:33:48,280
Speaker 1: some of it depends on your job. Some of it

748
00:33:48,280 --> 00:33:50,760
Speaker 1: depends like it depends on the stability of your income.

749
00:33:50,880 --> 00:33:54,640
Speaker 1: For instance, are you a ten year professor at a

750
00:33:54,680 --> 00:33:58,080
Speaker 1: well respected university or are you like a like a

751
00:33:58,120 --> 00:34:04,240
Speaker 1: crypto TikTok influencer. The complexities of your specific situation that

752
00:34:04,320 --> 00:34:07,800
Speaker 1: should inform just how much you are salking away within

753
00:34:08,160 --> 00:34:10,640
Speaker 1: money year number four. But there are so many different

754
00:34:10,640 --> 00:34:13,239
Speaker 1: factors that you need to take into account, like when

755
00:34:13,280 --> 00:34:15,279
Speaker 1: it comes to income, does your spouse work right? Like

756
00:34:15,320 --> 00:34:17,400
Speaker 1: do you have a partner or a significant other and

757
00:34:17,520 --> 00:34:20,440
Speaker 1: they're also bringing an income, Well, guess what, you now

758
00:34:20,480 --> 00:34:23,880
Speaker 1: have diversified multiple streams of income. Or on top of that,

759
00:34:23,920 --> 00:34:25,640
Speaker 1: let's say you have an investment property and that also

760
00:34:25,680 --> 00:34:29,040
Speaker 1: generates some income as well. Well, maybe there's a I

761
00:34:29,040 --> 00:34:30,719
Speaker 1: don't know, maybe that's a bad example because there are

762
00:34:30,719 --> 00:34:33,800
Speaker 1: emergencies that pop up with the investment property, endity capital

763
00:34:33,920 --> 00:34:36,600
Speaker 1: laying around for that that also Yeah, but like so

764
00:34:36,760 --> 00:34:38,120
Speaker 1: like the number of kids you have, the number of

765
00:34:38,120 --> 00:34:41,080
Speaker 1: folks who are dependent upon you earning an income. But

766
00:34:41,160 --> 00:34:43,560
Speaker 1: it also just comes down to how much appetite you

767
00:34:43,600 --> 00:34:45,960
Speaker 1: have for risk, because you could it could just be you.

768
00:34:46,360 --> 00:34:49,120
Speaker 1: Maybe you don't have a partner or a family, and

769
00:34:49,200 --> 00:34:51,880
Speaker 1: maybe you do have a job that is highly stable

770
00:34:51,920 --> 00:34:54,160
Speaker 1: and you've got a great income. That doesn't mean that

771
00:34:54,200 --> 00:34:58,240
Speaker 1: you should automatically only have three months worth of living expenses.

772
00:34:58,280 --> 00:35:00,640
Speaker 1: Depending on your personality, you I want to have a

773
00:35:00,680 --> 00:35:02,759
Speaker 1: side just no matter what, I want to have a

774
00:35:02,800 --> 00:35:06,120
Speaker 1: healthy six six months worth of expenses set aside. Where

775
00:35:06,160 --> 00:35:07,560
Speaker 1: you might have a friend that you could always move

776
00:35:07,560 --> 00:35:10,120
Speaker 1: in with who's like, hey, I've got this poolhouse or

777
00:35:10,120 --> 00:35:12,440
Speaker 1: something like that, You're always welcome to hang. Yeah, and

778
00:35:12,480 --> 00:35:14,839
Speaker 1: that might give you more confidence to have a little

779
00:35:14,840 --> 00:35:16,960
Speaker 1: bit less cash or family, like if you have family

780
00:35:16,960 --> 00:35:18,600
Speaker 1: in the area who are there to support you as

781
00:35:18,600 --> 00:35:19,880
Speaker 1: well that like all of you, I know, I can

782
00:35:19,880 --> 00:35:22,600
Speaker 1: always put your tent in your backyard, and that means

783
00:35:22,960 --> 00:35:24,880
Speaker 1: I need less cash on hand. Right, you can write,

784
00:35:24,880 --> 00:35:27,520
Speaker 1: Matt camp out in the little playhouse there, and you're

785
00:35:27,560 --> 00:35:29,719
Speaker 1: more than welcome to stay. Yeah. See that gives me.

786
00:35:29,880 --> 00:35:33,600
Speaker 1: Family tosses you out hope. Now, yeah, if it was

787
00:35:33,640 --> 00:35:35,120
Speaker 1: all of us, we need a bigger ten, I think.

788
00:35:35,320 --> 00:35:37,719
Speaker 1: But but yeah, so that's money geared. Number four is

789
00:35:37,719 --> 00:35:41,000
Speaker 1: that that fully funded emergency fund going beyond just the

790
00:35:41,040 --> 00:35:43,920
Speaker 1: basic two four six seven number, which we outline as

791
00:35:43,960 --> 00:35:45,960
Speaker 1: kind of the bare minimum. And I think that's going

792
00:35:46,000 --> 00:35:48,319
Speaker 1: to give you even more confidence moving forward when it

793
00:35:48,320 --> 00:35:50,840
Speaker 1: comes to changing jobs or maybe even going out to

794
00:35:50,920 --> 00:35:53,760
Speaker 1: pursue your own work, saying you know what, I'm ready

795
00:35:53,760 --> 00:35:56,160
Speaker 1: to leave my job start my own business. Well, if

796
00:35:56,160 --> 00:35:58,480
Speaker 1: you the more cash you have on hand, the better, Right,

797
00:35:58,520 --> 00:36:02,320
Speaker 1: it gives you runway and time to maybe make income

798
00:36:02,360 --> 00:36:04,759
Speaker 1: that's not quite as robust. And I mean ideally, if

799
00:36:04,760 --> 00:36:06,120
Speaker 1: you're going out there to start your own thing, you

800
00:36:06,200 --> 00:36:08,160
Speaker 1: probably save even more than that, because this is really

801
00:36:08,160 --> 00:36:10,040
Speaker 1: just an emergency fund. You're gonna want to plan on

802
00:36:10,120 --> 00:36:12,400
Speaker 1: top of that. But that's money. Gear number four is

803
00:36:13,040 --> 00:36:17,120
Speaker 1: having more money in savings, in liquid savings, in a

804
00:36:17,120 --> 00:36:19,680
Speaker 1: bank account. And Matt, you mentioned the online bank accounts

805
00:36:19,680 --> 00:36:22,120
Speaker 1: being the best, well money your number five, that's true.

806
00:36:22,120 --> 00:36:23,839
Speaker 1: Moving into next once you kind of got that one

807
00:36:23,880 --> 00:36:26,480
Speaker 1: taken care of, and that's to invest more intact sheltered

808
00:36:26,600 --> 00:36:29,160
Speaker 1: retirement accounts. And then now we're getting back to investing,

809
00:36:29,200 --> 00:36:31,239
Speaker 1: so you can see how it's kind of like we're

810
00:36:31,320 --> 00:36:33,160
Speaker 1: running the gamut up and then we go back to

811
00:36:33,239 --> 00:36:35,239
Speaker 1: kind of square one to a certain extent, but just

812
00:36:35,280 --> 00:36:38,640
Speaker 1: like a heightened version of that thing. So yeah, going

813
00:36:38,680 --> 00:36:41,600
Speaker 1: to now investing step number two, which is money Year five.

814
00:36:41,800 --> 00:36:43,120
Speaker 1: It kind of makes me think of like moving a

815
00:36:43,120 --> 00:36:45,440
Speaker 1: piece of furniture, Like you move one side up a

816
00:36:45,480 --> 00:36:46,880
Speaker 1: little bit, and then you move the other side a

817
00:36:46,920 --> 00:36:48,400
Speaker 1: little bit, Like if you're trying to fit into a

818
00:36:48,440 --> 00:36:50,120
Speaker 1: tight corner. Yeah, like if you're trying to move addresser

819
00:36:50,160 --> 00:36:51,680
Speaker 1: in or something like that, you don't just like slam

820
00:36:51,680 --> 00:36:53,640
Speaker 1: it in like all one side and then do the

821
00:36:53,680 --> 00:36:54,960
Speaker 1: other like you kind of like ease it in. You

822
00:36:55,040 --> 00:36:56,520
Speaker 1: go back and forth. I feel like that's what we're

823
00:36:56,520 --> 00:36:58,600
Speaker 1: doing with our money here. Yeah, exactly. And when you

824
00:36:58,640 --> 00:37:01,600
Speaker 1: do it incrementally and kind of go back and forth

825
00:37:01,880 --> 00:37:05,280
Speaker 1: between saving, investing in debt payoff, it's going to ensure

826
00:37:05,360 --> 00:37:08,800
Speaker 1: that you're not going too hard on one Leaving yourself

827
00:37:08,800 --> 00:37:11,440
Speaker 1: exposed in another area of your finances keeps you from

828
00:37:11,440 --> 00:37:14,920
Speaker 1: scuffing up your financial walls, yes, or breaking off a

829
00:37:15,000 --> 00:37:17,839
Speaker 1: leg of that mid century dresser, which we've all done

830
00:37:17,880 --> 00:37:20,120
Speaker 1: if you move it inappropriately, right. But yeah, I think

831
00:37:20,120 --> 00:37:22,080
Speaker 1: one of the biggest mistakes that folks make is that

832
00:37:22,120 --> 00:37:24,640
Speaker 1: they often go straight to money gear number five because

833
00:37:25,120 --> 00:37:27,840
Speaker 1: once they learn about investing, they immediately think this is

834
00:37:27,880 --> 00:37:30,320
Speaker 1: what they should be doing, but they haven't laid really

835
00:37:30,320 --> 00:37:33,520
Speaker 1: that financial foundation that's required to dedicate more dollars in

836
00:37:33,520 --> 00:37:36,120
Speaker 1: this direction. You keep beating that Matt invested into roth

837
00:37:36,160 --> 00:37:38,480
Speaker 1: Ira too soon launch. I just want to make you

838
00:37:38,520 --> 00:37:40,040
Speaker 1: look as bad as possible in this episode. That's what

839
00:37:40,040 --> 00:37:42,839
Speaker 1: I'm going for. But like they always talk about putting

840
00:37:42,880 --> 00:37:46,239
Speaker 1: the cart before the horse, and I think we all

841
00:37:46,239 --> 00:37:49,160
Speaker 1: know instinctually what that means, even though I've never actually

842
00:37:49,239 --> 00:37:52,160
Speaker 1: in person seen a horse pulling a cart. But like

843
00:37:52,280 --> 00:37:54,840
Speaker 1: we need some new modern day examples, I think I

844
00:37:54,880 --> 00:37:58,120
Speaker 1: think we do. But if we start investing before we

845
00:37:58,320 --> 00:38:01,799
Speaker 1: have the proper cash reserves in the bank, we could

846
00:38:01,800 --> 00:38:04,280
Speaker 1: be leaving ourselves, like I said, exposed. And so, which

847
00:38:04,320 --> 00:38:06,520
Speaker 1: tax sheltered accounts are we talking about here? We're talking

848
00:38:06,560 --> 00:38:09,720
Speaker 1: about hsas, iras and four O n ks in particular.

849
00:38:09,760 --> 00:38:11,840
Speaker 1: We have an article all about hsa is up on

850
00:38:11,880 --> 00:38:14,240
Speaker 1: the website, which are one of our top favorite retirement

851
00:38:14,239 --> 00:38:16,680
Speaker 1: accounts that most people don't think of as a retirement account.

852
00:38:16,880 --> 00:38:18,920
Speaker 1: And if you're in the military, we're talking about funneling

853
00:38:18,920 --> 00:38:21,920
Speaker 1: money into your TSP, your thrift savings plan and jo

854
00:38:22,040 --> 00:38:27,040
Speaker 1: pumping more dollars into these accounts, these tax advantage retirement accounts.

855
00:38:27,080 --> 00:38:30,120
Speaker 1: Increasing your contribution level is going to over the years,

856
00:38:30,360 --> 00:38:33,319
Speaker 1: pay huge dividends in your pursuit of financial independence. But

857
00:38:33,480 --> 00:38:35,759
Speaker 1: it's money gear number five for a reason. You really

858
00:38:35,760 --> 00:38:38,359
Speaker 1: got to do those first four first, that's right, man. Yeah,

859
00:38:38,360 --> 00:38:41,800
Speaker 1: So let's talk now about how much money to invest

860
00:38:41,840 --> 00:38:44,759
Speaker 1: within these tax sheltered retirement accounts because a lot of

861
00:38:44,760 --> 00:38:47,120
Speaker 1: money experts out there, they're going to say that ten percent,

862
00:38:47,239 --> 00:38:49,440
Speaker 1: that that is the number to strive for. It's going

863
00:38:49,480 --> 00:38:51,720
Speaker 1: to go out doctor evil and say one million wells,

864
00:38:52,600 --> 00:38:56,160
Speaker 1: maybe for you, depending on what your fine number is.

865
00:38:56,400 --> 00:38:58,360
Speaker 1: But when it comes to how much you should be

866
00:38:58,360 --> 00:39:01,360
Speaker 1: stoking away towards retirement, we think fifteen percent, that that

867
00:39:01,480 --> 00:39:03,000
Speaker 1: is a much better goal to have. It's going to

868
00:39:03,040 --> 00:39:07,880
Speaker 1: allow you to achieve your destination of financial freedom much sooner,

869
00:39:07,960 --> 00:39:11,960
Speaker 1: Like we're talking about years, like even decades. By being

870
00:39:12,040 --> 00:39:14,520
Speaker 1: able to increase the amount that you're putting towards retirement,

871
00:39:14,600 --> 00:39:16,680
Speaker 1: you can shave somewhere close to ten years off of

872
00:39:16,719 --> 00:39:20,239
Speaker 1: your kind of retirement goals by by investing just five

873
00:39:20,239 --> 00:39:22,640
Speaker 1: percent more. Yes, right, yeah, so fifteen percent of your income.

874
00:39:23,080 --> 00:39:25,520
Speaker 1: And for some higher earning folks out there, this is

875
00:39:25,560 --> 00:39:28,799
Speaker 1: going to mean that they will quickly max out their

876
00:39:28,840 --> 00:39:32,840
Speaker 1: contributions to these different tax advantaged accounts fairly quickly, assuming

877
00:39:32,880 --> 00:39:35,759
Speaker 1: that you have a much higher income. But others out

878
00:39:35,800 --> 00:39:38,840
Speaker 1: there might find that they hit that fifteen percent of

879
00:39:38,840 --> 00:39:42,080
Speaker 1: their income invested mark and they still have some room

880
00:39:42,160 --> 00:39:45,359
Speaker 1: left in those accounts to contribute, and that's okay, right,

881
00:39:45,400 --> 00:39:48,360
Speaker 1: Like if that's you. We actually don't want you investing

882
00:39:48,440 --> 00:39:51,920
Speaker 1: any more than that, because there are some other financial

883
00:39:51,920 --> 00:39:55,080
Speaker 1: priorities that we think that you should get to before

884
00:39:55,600 --> 00:39:58,680
Speaker 1: an even higher percentage of your income is going towards retirement.

885
00:39:59,000 --> 00:40:01,200
Speaker 1: We don't want you again, like you're moving that dresser

886
00:40:01,239 --> 00:40:02,719
Speaker 1: into the corner. We don't want you to get too

887
00:40:02,719 --> 00:40:04,759
Speaker 1: far ahead of things with one side before you kind

888
00:40:04,760 --> 00:40:06,319
Speaker 1: of make a small correction on the other. You don't

889
00:40:06,320 --> 00:40:08,640
Speaker 1: want to snap that hairpin leg, those beautiful mid century

890
00:40:08,640 --> 00:40:11,000
Speaker 1: hairpin legs. Don't want to do that. And it's important

891
00:40:11,000 --> 00:40:12,799
Speaker 1: too to give a quick word of warning here, Matt,

892
00:40:12,800 --> 00:40:14,880
Speaker 1: because a lot of people think of investing as socking

893
00:40:14,920 --> 00:40:16,759
Speaker 1: money into that account, and that is part of it.

894
00:40:17,080 --> 00:40:19,880
Speaker 1: But it turns out that fifty three percent of Americans

895
00:40:20,000 --> 00:40:22,480
Speaker 1: have at least some of their retirement dollars in straight

896
00:40:22,560 --> 00:40:27,319
Speaker 1: up savings account vehicles savings like vehicles inside of that

897
00:40:27,400 --> 00:40:29,520
Speaker 1: tax advantage to account, like a roth IRA or a

898
00:40:29,520 --> 00:40:31,960
Speaker 1: four ohin K, And that's not good. Like we want

899
00:40:31,960 --> 00:40:34,960
Speaker 1: to make sure that your retirement money, it's not isn't

900
00:40:34,960 --> 00:40:36,719
Speaker 1: just put into the right vehicle and then left to

901
00:40:36,800 --> 00:40:39,879
Speaker 1: sit in a money market account. Although some of those

902
00:40:39,880 --> 00:40:41,480
Speaker 1: are earning a little more than they used to. I

903
00:40:41,480 --> 00:40:43,799
Speaker 1: think Fidelity is paying a suite ray to return, but

904
00:40:43,840 --> 00:40:46,000
Speaker 1: it's still not as high over the years as you're

905
00:40:46,000 --> 00:40:48,439
Speaker 1: going to get investing in the stock market as a whole.

906
00:40:48,640 --> 00:40:50,799
Speaker 1: And this is not an investing episode, so we're not

907
00:40:50,800 --> 00:40:52,360
Speaker 1: going to go into a bunch of details, but we

908
00:40:52,400 --> 00:40:55,319
Speaker 1: have an article about investing for beginners up on the

909
00:40:55,360 --> 00:40:57,880
Speaker 1: site at howtomoney dot com. Will link to that article

910
00:40:57,960 --> 00:41:00,200
Speaker 1: in the show notes, but make sure that, yeah, you're

911
00:41:00,200 --> 00:41:02,160
Speaker 1: not just like throwing some money in that account and

912
00:41:02,200 --> 00:41:05,879
Speaker 1: calling it a day. You're actually buying funds, preferably low

913
00:41:05,880 --> 00:41:09,200
Speaker 1: cost index funds inside of those retirement accounts. That's right.

914
00:41:09,239 --> 00:41:11,000
Speaker 1: So after that, you're going to be moving on to

915
00:41:11,040 --> 00:41:13,440
Speaker 1: money Year number six, which is knocking out some of

916
00:41:13,440 --> 00:41:16,879
Speaker 1: that lower interest rate debt and specifically, like we're talking

917
00:41:16,880 --> 00:41:21,160
Speaker 1: about student loans, maybe some of those more attractive car loans.

918
00:41:21,520 --> 00:41:23,160
Speaker 1: Basically any of the debts that you have in your

919
00:41:23,160 --> 00:41:25,120
Speaker 1: life that you did not address back in Money your

920
00:41:25,200 --> 00:41:27,800
Speaker 1: number three. It's an important note here that you could

921
00:41:27,880 --> 00:41:30,960
Speaker 1: put your mortgage in this category, but they are typically

922
00:41:31,000 --> 00:41:34,680
Speaker 1: the least important debt to pay off early, especially because

923
00:41:34,719 --> 00:41:37,600
Speaker 1: you can probably earn more, even just in a basic

924
00:41:37,640 --> 00:41:41,000
Speaker 1: savings account, than what your current mortgage interest rate is.

925
00:41:41,560 --> 00:41:43,600
Speaker 1: Most people have a mortgage rate of less than four percent,

926
00:41:43,640 --> 00:41:45,520
Speaker 1: A lot of people have it in the low threes,

927
00:41:45,560 --> 00:41:48,279
Speaker 1: and you can straight up easy in savings earned four

928
00:41:48,320 --> 00:41:51,760
Speaker 1: plus percent. I think ninety nine percent of all outstanding mortgages.

929
00:41:51,880 --> 00:41:55,439
Speaker 1: Mortgages right now are currently less than what the thirty

930
00:41:55,480 --> 00:41:57,680
Speaker 1: year rate is at the moment. Makes sense that being

931
00:41:57,680 --> 00:41:59,359
Speaker 1: sent like at this point, you've already got the worst

932
00:41:59,360 --> 00:42:01,560
Speaker 1: debts paid off, but now you can focus on some

933
00:42:01,600 --> 00:42:04,600
Speaker 1: of these lower priorities, some of these low hanging debts,

934
00:42:04,800 --> 00:42:07,040
Speaker 1: some of this low hanging debt fruit and student loans,

935
00:42:07,040 --> 00:42:09,760
Speaker 1: they would typically be included here. But that being said,

936
00:42:10,160 --> 00:42:12,319
Speaker 1: we've got all these caveats. You don't want to be

937
00:42:12,320 --> 00:42:14,440
Speaker 1: baying off your student loans now because of course the

938
00:42:14,480 --> 00:42:18,160
Speaker 1: payment pause and the potential for forgiveness, but even still,

939
00:42:18,480 --> 00:42:20,480
Speaker 1: we want you to save up in case that doesn't

940
00:42:20,520 --> 00:42:23,600
Speaker 1: actually go through. It's helpful for you to sort of

941
00:42:23,600 --> 00:42:26,040
Speaker 1: like we talked about setting up that initial emergency fund

942
00:42:26,239 --> 00:42:29,080
Speaker 1: where you are making small withdrawals or making a payment

943
00:42:29,120 --> 00:42:31,520
Speaker 1: to yourself into another account. You also want to do

944
00:42:31,560 --> 00:42:35,080
Speaker 1: something similar with the payment the amount that might resume

945
00:42:35,480 --> 00:42:37,960
Speaker 1: once student loans fire back up. We want you to

946
00:42:38,040 --> 00:42:42,600
Speaker 1: be prepared for those student loans resuming. But car loans helocks,

947
00:42:42,640 --> 00:42:45,160
Speaker 1: these are all good examples of some of the low

948
00:42:45,160 --> 00:42:48,319
Speaker 1: hanging debt that is not so ridiculous that you knocked

949
00:42:48,360 --> 00:42:50,239
Speaker 1: it out earlier. Yeah, your helock rate might have gone

950
00:42:50,239 --> 00:42:51,600
Speaker 1: from three and a half to six and a half

951
00:42:51,640 --> 00:42:54,080
Speaker 1: percent or maybe even a little bit higher, and so

952
00:42:54,200 --> 00:42:56,840
Speaker 1: it might have been a lower priority a couple of

953
00:42:56,880 --> 00:42:59,080
Speaker 1: years ago, and now it's becoming a higher priority. And

954
00:42:59,120 --> 00:43:01,839
Speaker 1: so you find yourself money Gear six and you say, great,

955
00:43:01,880 --> 00:43:03,479
Speaker 1: now it's time for me to knock this thing off

956
00:43:03,560 --> 00:43:07,239
Speaker 1: because I've got that money money saved, I've got I'm

957
00:43:07,280 --> 00:43:09,520
Speaker 1: investing a decent chunk fifteen percent of my pay now,

958
00:43:09,719 --> 00:43:12,440
Speaker 1: so that helock now, I got my eyes set on

959
00:43:12,480 --> 00:43:14,920
Speaker 1: that choker or same thing with a car loan, let's

960
00:43:14,920 --> 00:43:17,239
Speaker 1: say it's four or five percent. Money Gear number six

961
00:43:17,360 --> 00:43:19,239
Speaker 1: is the time to kind of knock that thing out,

962
00:43:19,480 --> 00:43:22,440
Speaker 1: get rid of it, because being debt free other than

963
00:43:22,520 --> 00:43:24,920
Speaker 1: mortgages is a great goal to have kind of at

964
00:43:24,960 --> 00:43:27,839
Speaker 1: this point in when it comes to your financial progress.

965
00:43:27,680 --> 00:43:29,759
Speaker 1: That's right, Yeah, I want to mention too, that there's

966
00:43:29,760 --> 00:43:32,440
Speaker 1: a chance that you stall out here in money gear

967
00:43:32,560 --> 00:43:35,239
Speaker 1: number six or honestly even like money gear number five,

968
00:43:35,239 --> 00:43:37,560
Speaker 1: where you're investing more in those retirement accounts. It takes

969
00:43:37,560 --> 00:43:39,880
Speaker 1: a lot of work to invest up to fifteen percent

970
00:43:40,000 --> 00:43:42,640
Speaker 1: of your income and even fully funding it overnight. Yeah,

971
00:43:42,640 --> 00:43:44,600
Speaker 1: even fully funding your emergency fund. We've got three to

972
00:43:44,640 --> 00:43:47,160
Speaker 1: six months worth of expenses. I mean, there's a chance

973
00:43:47,200 --> 00:43:49,320
Speaker 1: that you could be in these money gears for years,

974
00:43:49,560 --> 00:43:52,959
Speaker 1: depending on your financial situation. And so, whereas the first

975
00:43:53,000 --> 00:43:55,880
Speaker 1: three money gears are designed for you to get some

976
00:43:55,880 --> 00:43:57,759
Speaker 1: of those quick wins and you're able to build off

977
00:43:57,760 --> 00:44:00,359
Speaker 1: of that momentum, some of these later money gears might

978
00:44:00,440 --> 00:44:04,840
Speaker 1: be yeah, years where you're slogging away where it doesn't

979
00:44:04,960 --> 00:44:07,239
Speaker 1: feel like that you're making much finished progress, but you

980
00:44:07,239 --> 00:44:09,680
Speaker 1: are making progress, and that's so important. But you're right,

981
00:44:09,719 --> 00:44:11,879
Speaker 1: it feels like it if you're like, man, it's it's

982
00:44:11,960 --> 00:44:14,200
Speaker 1: a month number fifteen of me trying to get to

983
00:44:14,239 --> 00:44:18,200
Speaker 1: that three month worth of like expenses in my savings account.

984
00:44:18,440 --> 00:44:20,319
Speaker 1: That makes sense, Like, it makes sense that it takes

985
00:44:20,320 --> 00:44:22,239
Speaker 1: a while to get there. And again, I think it's

986
00:44:22,239 --> 00:44:24,080
Speaker 1: important to come up with like a plan of attack

987
00:44:24,200 --> 00:44:27,479
Speaker 1: when it comes to paying off these lower interest rate debts,

988
00:44:27,520 --> 00:44:30,440
Speaker 1: to pay the minimums on all of them except for

989
00:44:30,480 --> 00:44:32,920
Speaker 1: one that you're prioritizing the most. That gives you more

990
00:44:32,960 --> 00:44:35,440
Speaker 1: focus when you're just kind of a sailing one at

991
00:44:35,480 --> 00:44:38,360
Speaker 1: a time, as opposed to kind of spreading your resources

992
00:44:39,080 --> 00:44:41,360
Speaker 1: thin trying to pay a little bit more on every

993
00:44:41,360 --> 00:44:44,040
Speaker 1: single debt. And then once you get one paid off,

994
00:44:44,239 --> 00:44:47,480
Speaker 1: you set your sights solely on another one, and oftentimes

995
00:44:47,520 --> 00:44:50,160
Speaker 1: that's going to give you the most success and it's

996
00:44:50,200 --> 00:44:52,920
Speaker 1: going to help you advance more rapidly when it comes

997
00:44:52,960 --> 00:44:54,920
Speaker 1: to paying off those debts. That's right, man. Yeah, So

998
00:44:54,960 --> 00:44:57,040
Speaker 1: after money your number six, where you're knocking out that

999
00:44:57,080 --> 00:44:58,840
Speaker 1: lower interest rate debt, you are then moving on to

1000
00:44:58,920 --> 00:45:01,480
Speaker 1: money gear number seven, where you are going after some

1001
00:45:01,560 --> 00:45:05,359
Speaker 1: of those bigger financial goals like you just mentioned all,

1002
00:45:05,480 --> 00:45:07,520
Speaker 1: Like this is an awesome place to be. This is

1003
00:45:07,520 --> 00:45:09,200
Speaker 1: what you're going downhill on your bike at like thirty

1004
00:45:09,200 --> 00:45:12,080
Speaker 1: miles an hour, full on, like especially you, Matt with

1005
00:45:12,080 --> 00:45:15,319
Speaker 1: your long hair just blowing in the window in the wind. Man,

1006
00:45:15,440 --> 00:45:17,319
Speaker 1: You've you've paid off all the debts in your life

1007
00:45:17,320 --> 00:45:20,040
Speaker 1: except for maybe that mortgage. If you own a home,

1008
00:45:20,239 --> 00:45:23,719
Speaker 1: you're also investing quite a bit already too. Basically, the

1009
00:45:24,000 --> 00:45:27,160
Speaker 1: world is your oyster. You couldn't look to funnel maybe

1010
00:45:27,160 --> 00:45:29,359
Speaker 1: some money towards starting your own business, if that's something

1011
00:45:29,360 --> 00:45:31,680
Speaker 1: you've always wanted to do, changing how it is that

1012
00:45:31,680 --> 00:45:33,520
Speaker 1: you get to spend your time and the folks you

1013
00:45:33,520 --> 00:45:37,719
Speaker 1: get to help. Maybe that means just a sweet renovation

1014
00:45:37,880 --> 00:45:40,200
Speaker 1: there at your home because that's something that you've always

1015
00:45:40,239 --> 00:45:43,239
Speaker 1: wanted to do. It could mean going on an international

1016
00:45:43,320 --> 00:45:46,239
Speaker 1: vacation doing that if that's something that you want to

1017
00:45:46,239 --> 00:45:49,279
Speaker 1: prioritize in your life, or even honestly, just having a

1018
00:45:49,360 --> 00:45:53,239
Speaker 1: larger cash cushion where you are removing some of the

1019
00:45:53,239 --> 00:45:56,239
Speaker 1: potential for financial insecurity in the future, right just to

1020
00:45:56,280 --> 00:45:58,080
Speaker 1: having some more that money on hand that gives you

1021
00:45:58,239 --> 00:46:01,200
Speaker 1: the options to participate in an opportunity that might come

1022
00:46:01,280 --> 00:46:03,200
Speaker 1: up that you're you're not even aware of, sort of

1023
00:46:03,200 --> 00:46:05,440
Speaker 1: like we were talking about there at the at the

1024
00:46:05,480 --> 00:46:07,640
Speaker 1: beginning of the episode. But yeah, Money Gears number seven

1025
00:46:07,680 --> 00:46:10,040
Speaker 1: opens up just the whole world of possibilities. It can

1026
00:46:10,120 --> 00:46:13,040
Speaker 1: mean giving more money away, which is awesome absolutely, Like

1027
00:46:13,239 --> 00:46:15,600
Speaker 1: what's your favorite nonprofit? You're like, I wish I could

1028
00:46:15,600 --> 00:46:17,440
Speaker 1: give him five grand a year, maybe now you can,

1029
00:46:18,080 --> 00:46:20,279
Speaker 1: or maybe it could say you could say I've always

1030
00:46:20,320 --> 00:46:21,880
Speaker 1: wanted to work thirty hours a week, but man, I

1031
00:46:21,920 --> 00:46:23,880
Speaker 1: just have not been able to. But once you get

1032
00:46:23,920 --> 00:46:26,880
Speaker 1: to this place of financial security, you don't have nearly

1033
00:46:26,880 --> 00:46:29,040
Speaker 1: as many deaths in your life, except maybe that mortgage

1034
00:46:29,080 --> 00:46:31,480
Speaker 1: still hangs around. But you've been contributing to retirement accounts

1035
00:46:31,520 --> 00:46:33,240
Speaker 1: for quite a while, You've got a lot of cash

1036
00:46:33,320 --> 00:46:35,680
Speaker 1: in the bank, and you say, great, now it's does

1037
00:46:35,719 --> 00:46:38,600
Speaker 1: the time I can live now on a smaller salary.

1038
00:46:38,640 --> 00:46:40,600
Speaker 1: Like there are all sorts of just options that open

1039
00:46:40,680 --> 00:46:42,839
Speaker 1: up to you when you hit money year number seven,

1040
00:46:43,000 --> 00:46:45,280
Speaker 1: which is a beautiful thing to see and a beautiful

1041
00:46:45,280 --> 00:46:46,799
Speaker 1: thing to be able to enjoy. Yeah, and by the

1042
00:46:46,800 --> 00:46:49,040
Speaker 1: way you mentioned giving, I want to mention too, I

1043
00:46:49,080 --> 00:46:51,960
Speaker 1: mean personally, you and I like we've given money throughout

1044
00:46:52,040 --> 00:46:53,839
Speaker 1: all the different money gears. I wanted to point out

1045
00:46:53,840 --> 00:46:55,960
Speaker 1: that it's probably a good idea, a good idea to

1046
00:46:56,080 --> 00:46:58,440
Speaker 1: not wait until money year seven where you feel like

1047
00:46:58,520 --> 00:47:01,160
Speaker 1: that you are in a position of financial security in

1048
00:47:01,239 --> 00:47:03,880
Speaker 1: order to give out of abundance, as opposed to that

1049
00:47:03,920 --> 00:47:06,480
Speaker 1: being a discipline in the practice that you participate in

1050
00:47:06,840 --> 00:47:10,040
Speaker 1: throughout your personal finance students, This just allows you to

1051
00:47:10,080 --> 00:47:11,759
Speaker 1: do it maybe in a bigger way than you've been

1052
00:47:11,760 --> 00:47:13,759
Speaker 1: able to do up in exactly right, And this could

1053
00:47:13,800 --> 00:47:15,680
Speaker 1: be a great time too to start saving up for

1054
00:47:15,760 --> 00:47:19,239
Speaker 1: your kids, because up until now, really the pity the

1055
00:47:19,360 --> 00:47:21,759
Speaker 1: priority should be funding your own retirement and should be

1056
00:47:21,840 --> 00:47:24,840
Speaker 1: kind of making sure that your home is financially a

1057
00:47:24,880 --> 00:47:27,960
Speaker 1: financially secure place that you're not going to have to

1058
00:47:28,000 --> 00:47:30,040
Speaker 1: be dependent on your kids when you kind of do

1059
00:47:30,120 --> 00:47:33,680
Speaker 1: reach retirement age when your work life is over. But

1060
00:47:33,880 --> 00:47:35,560
Speaker 1: the next thing. Find some people want to get the

1061
00:47:35,600 --> 00:47:37,040
Speaker 1: cart before the horse on this one too, Matt, And

1062
00:47:37,040 --> 00:47:38,640
Speaker 1: they want to start saving for their kids when they're

1063
00:47:38,640 --> 00:47:41,600
Speaker 1: in money gear two, three or four when the time yet,

1064
00:47:41,600 --> 00:47:43,960
Speaker 1: because it feels like the selfless things right right, But

1065
00:47:44,000 --> 00:47:46,560
Speaker 1: the reality is it's it's the oxygen mask that we

1066
00:47:46,600 --> 00:47:48,359
Speaker 1: always talk about on the airplane. You got to do

1067
00:47:48,560 --> 00:47:50,680
Speaker 1: put the oxygen mask on yourself first before you put

1068
00:47:50,680 --> 00:47:52,319
Speaker 1: it on the child next to you. I mean, that's

1069
00:47:52,320 --> 00:47:54,080
Speaker 1: what they recommend on the airplane videos. And so I'm

1070
00:47:54,120 --> 00:47:55,720
Speaker 1: just going to trust that they know what they're talking about.

1071
00:47:55,840 --> 00:47:57,560
Speaker 1: And I think the same thing is true when it

1072
00:47:57,560 --> 00:47:59,719
Speaker 1: comes to your money. So money year number seven is

1073
00:47:59,719 --> 00:48:02,680
Speaker 1: a time to start prioritizing a five to twenty nine

1074
00:48:02,719 --> 00:48:05,480
Speaker 1: plan for your kid if you expect them to go

1075
00:48:05,520 --> 00:48:07,279
Speaker 1: to college, or if you want to kind of get

1076
00:48:07,320 --> 00:48:11,600
Speaker 1: the ball rolling to put money into an IRA for

1077
00:48:11,640 --> 00:48:14,160
Speaker 1: them or roth IRA. So just to note that's where

1078
00:48:14,160 --> 00:48:16,440
Speaker 1: this fits in if you're planning on saving money for

1079
00:48:16,520 --> 00:48:18,719
Speaker 1: your kids. It kind of falls under money gear seven

1080
00:48:18,760 --> 00:48:20,960
Speaker 1: as well, that's right. Yeah, and just we hope that

1081
00:48:21,000 --> 00:48:23,480
Speaker 1: you get to enjoy the ride down that mountain because

1082
00:48:23,480 --> 00:48:25,879
Speaker 1: this is where you shouldn't be stressed about the stuff. No, yeah,

1083
00:48:25,880 --> 00:48:27,759
Speaker 1: it should be fun decisions. This is a part of

1084
00:48:27,800 --> 00:48:31,400
Speaker 1: the ride where we're almost where gravity is almost working

1085
00:48:31,400 --> 00:48:34,319
Speaker 1: more for you than what you can actually accomplish by

1086
00:48:34,320 --> 00:48:36,239
Speaker 1: pumping your legs as hard as you possibly can. Yeah,

1087
00:48:36,280 --> 00:48:38,360
Speaker 1: this is almost at the point to where you're financially independent,

1088
00:48:38,400 --> 00:48:41,279
Speaker 1: which is where your money is actually working harder for

1089
00:48:41,360 --> 00:48:43,640
Speaker 1: you than what it is that you can actually accomplish

1090
00:48:43,680 --> 00:48:46,560
Speaker 1: with the hours that you've got that are allotted to

1091
00:48:46,640 --> 00:48:49,040
Speaker 1: you during the day. And so you know, with the

1092
00:48:49,080 --> 00:48:51,919
Speaker 1: money gears. It's just important to note that going out

1093
00:48:51,960 --> 00:48:54,040
Speaker 1: of order, it can honestly, it can be like throwing

1094
00:48:54,080 --> 00:48:57,360
Speaker 1: a wrench into your personal finance situation, but smoothly shifting

1095
00:48:57,440 --> 00:48:59,600
Speaker 1: through the money gears that can help you to make

1096
00:48:59,600 --> 00:49:02,560
Speaker 1: progress more swiftly. And so no matter where you are,

1097
00:49:02,600 --> 00:49:05,120
Speaker 1: there's always going to be room for progress. And Joel,

1098
00:49:05,160 --> 00:49:06,759
Speaker 1: you know you were you were talking about going out

1099
00:49:06,800 --> 00:49:09,480
Speaker 1: of order? You mentioned baking or what do you say

1100
00:49:09,560 --> 00:49:11,719
Speaker 1: something about cooking? Yeah, if you put the ingredients in

1101
00:49:11,760 --> 00:49:13,480
Speaker 1: at the wrong time, wrong place, especially when you're mixing

1102
00:49:13,480 --> 00:49:16,360
Speaker 1: wet and dry. Apparently I'm not like a hardcore baker,

1103
00:49:16,360 --> 00:49:17,839
Speaker 1: but I know that that can kind of throw things off.

1104
00:49:18,120 --> 00:49:19,839
Speaker 1: Kate is in your cake. When it comes to like

1105
00:49:19,840 --> 00:49:22,560
Speaker 1: making sauces, that you can like break the sauce, I

1106
00:49:22,600 --> 00:49:26,239
Speaker 1: think that's the term, okay, Like, but essentially what we're

1107
00:49:26,239 --> 00:49:30,040
Speaker 1: talking about here is this mathematical term which is communativity,

1108
00:49:30,800 --> 00:49:34,359
Speaker 1: And that's this concept where the order where it doesn't matter,

1109
00:49:34,520 --> 00:49:37,200
Speaker 1: right Like, that's like three plus two in two plus three,

1110
00:49:37,360 --> 00:49:39,600
Speaker 1: that's going to give you the same result. But this

1111
00:49:39,719 --> 00:49:43,360
Speaker 1: doesn't work as the complexity ramps up. But when it

1112
00:49:43,360 --> 00:49:46,080
Speaker 1: comes to your personal finances, the order it matters in

1113
00:49:46,080 --> 00:49:48,000
Speaker 1: a major way, right, Like, we're not talking about something

1114
00:49:48,000 --> 00:49:50,440
Speaker 1: as simple as as one plus one, and we want

1115
00:49:50,440 --> 00:49:52,120
Speaker 1: to make sure that you are on the right track,

1116
00:49:52,200 --> 00:49:54,040
Speaker 1: that you are doing things in the right order. There

1117
00:49:54,080 --> 00:49:57,279
Speaker 1: truly is an optimal way to go about achieving your

1118
00:49:57,320 --> 00:49:59,560
Speaker 1: different financial goals. Yeah, if you're looking for a visual

1119
00:49:59,600 --> 00:50:02,160
Speaker 1: by the way, this you can go to hotmoney dot com.

1120
00:50:02,200 --> 00:50:04,080
Speaker 1: You can click start here and you can kind of

1121
00:50:04,080 --> 00:50:06,560
Speaker 1: we list out the money gears. So if you're saying, hey,

1122
00:50:06,680 --> 00:50:09,359
Speaker 1: I appreciate the audio, guys, I'd like to see a

1123
00:50:09,440 --> 00:50:12,440
Speaker 1: visual setup of what this looks like. Well, you can

1124
00:50:12,520 --> 00:50:13,919
Speaker 1: kind of run through them all. You can even print

1125
00:50:13,920 --> 00:50:15,759
Speaker 1: it out or whatever, keep it on hand. But I

1126
00:50:15,760 --> 00:50:17,600
Speaker 1: think it's going to be helpful for a lot of

1127
00:50:17,600 --> 00:50:19,880
Speaker 1: people meant to hear this and then to actually visually

1128
00:50:19,880 --> 00:50:23,239
Speaker 1: see it and then to identify again where they're at

1129
00:50:23,600 --> 00:50:26,480
Speaker 1: inside of this order of operations, so they can know

1130
00:50:26,800 --> 00:50:29,600
Speaker 1: kind of what they're tackling. And just like we're talking

1131
00:50:29,640 --> 00:50:31,319
Speaker 1: about when coming up with a debt payoff plan, well,

1132
00:50:31,360 --> 00:50:33,560
Speaker 1: if you know where you're at in this money order

1133
00:50:33,600 --> 00:50:36,319
Speaker 1: of operations, inside of these money gears, it basically tells

1134
00:50:36,320 --> 00:50:37,919
Speaker 1: you what to work on, It tells you what's next,

1135
00:50:38,040 --> 00:50:39,799
Speaker 1: gives you insight into where you are, which I think

1136
00:50:39,840 --> 00:50:42,080
Speaker 1: can be like so helpful so profound if you're kind

1137
00:50:42,080 --> 00:50:44,239
Speaker 1: of like I don't know where to go from here,

1138
00:50:44,360 --> 00:50:46,640
Speaker 1: which a lot of people find themselves even if no

1139
00:50:46,680 --> 00:50:49,120
Speaker 1: matter which money gear they're in, that sometimes you can

1140
00:50:49,440 --> 00:50:52,200
Speaker 1: feel stymied because you're just not sure what the next

1141
00:50:52,280 --> 00:50:53,840
Speaker 1: step to take is. And if you start going in

1142
00:50:53,880 --> 00:50:55,919
Speaker 1: the wrong direction, it feels like there's a thousand things

1143
00:50:55,920 --> 00:50:59,040
Speaker 1: that you could possibly do, but really there's just truly

1144
00:50:59,160 --> 00:51:01,640
Speaker 1: is one thing that you should be doing right. So, yeah,

1145
00:51:01,680 --> 00:51:05,000
Speaker 1: I think that this is just hopefully helpful as people

1146
00:51:05,000 --> 00:51:07,600
Speaker 1: are trying to figure out, based on their own specific

1147
00:51:07,680 --> 00:51:10,680
Speaker 1: personal finance scenario, where they are and kind of what

1148
00:51:10,719 --> 00:51:13,840
Speaker 1: they should be tackling immediately when it comes to their money.

1149
00:51:13,880 --> 00:51:15,400
Speaker 1: But let's get back to the beer mat that we

1150
00:51:15,440 --> 00:51:19,759
Speaker 1: had on this episode. This was a Venalogy Semione by

1151
00:51:19,920 --> 00:51:23,080
Speaker 1: Monday Night Brewing, like a kind of a beer wine hybrid. Yeah,

1152
00:51:23,160 --> 00:51:24,680
Speaker 1: what was your take on this one? Yeah, it's a

1153
00:51:24,719 --> 00:51:28,600
Speaker 1: hybridized American wild flavor dale And I'm not sure about

1154
00:51:28,600 --> 00:51:31,560
Speaker 1: that whole flavored part, but as opposed to like an

1155
00:51:31,600 --> 00:51:34,760
Speaker 1: actual ale, but I guess flavors in this beer are solid.

1156
00:51:34,880 --> 00:51:36,920
Speaker 1: I think there are different requirements as to what you

1157
00:51:36,960 --> 00:51:39,239
Speaker 1: can call an ale and so if they're actually taking

1158
00:51:39,239 --> 00:51:41,239
Speaker 1: it and then like maybe mixing it, I think maybe

1159
00:51:41,239 --> 00:51:43,799
Speaker 1: they actually have to say it's flavored as opposed to

1160
00:51:43,920 --> 00:51:47,799
Speaker 1: brood gotcha. But yeah, man, this had some serious I

1161
00:51:47,800 --> 00:51:51,560
Speaker 1: don't know what kind of grapes are semione, but I

1162
00:51:51,560 --> 00:51:56,040
Speaker 1: would say white wine grapes. Yeah, it definitely drank, like yeah,

1163
00:51:56,080 --> 00:51:58,080
Speaker 1: some of the I don't I know like very little

1164
00:51:58,160 --> 00:52:02,080
Speaker 1: about white wine, say, but there are more beers coming out.

1165
00:52:02,080 --> 00:52:04,160
Speaker 1: They're trying to be like wine beer hybrids, and I

1166
00:52:04,200 --> 00:52:06,800
Speaker 1: kind of appreciate the direction this is going in. I

1167
00:52:06,880 --> 00:52:08,680
Speaker 1: guess it doesn't mean you actually kind of want to

1168
00:52:08,680 --> 00:52:12,480
Speaker 1: try more funky wines, because I've had a couple and

1169
00:52:12,520 --> 00:52:14,799
Speaker 1: I'm like, man, these actually some of the funkier wines

1170
00:52:14,800 --> 00:52:17,360
Speaker 1: I've had lean more in the craft beer direction, and

1171
00:52:17,400 --> 00:52:19,359
Speaker 1: this almost leads more in the wine direction. So there's

1172
00:52:19,360 --> 00:52:22,279
Speaker 1: almost like some overlapdowns, like you're meeting in the middle. Yeah, yeah,

1173
00:52:22,280 --> 00:52:24,520
Speaker 1: which is fascinating. And this one was like super tart,

1174
00:52:25,000 --> 00:52:28,640
Speaker 1: but yeah, also a little oaky, so oh definitely. Yeah,

1175
00:52:28,640 --> 00:52:30,480
Speaker 1: it had a lot of oak going on. It reminded

1176
00:52:30,520 --> 00:52:32,799
Speaker 1: me of some of the different so a lot of

1177
00:52:32,800 --> 00:52:35,920
Speaker 1: beers they'll age them in footers, which are these basically

1178
00:52:35,960 --> 00:52:38,959
Speaker 1: like giant, giant wine barrels. And so if you happen,

1179
00:52:39,120 --> 00:52:41,160
Speaker 1: maybe you're listening and you're just laughing at us because

1180
00:52:41,160 --> 00:52:44,200
Speaker 1: we know nothing about wine. Look for some of those

1181
00:52:44,200 --> 00:52:47,160
Speaker 1: different ails that are food or age, because they're gonna

1182
00:52:47,320 --> 00:52:50,120
Speaker 1: have a lot of those oaky characteristics that are oftentimes

1183
00:52:50,120 --> 00:52:54,120
Speaker 1: associated with wines. You're gonna then find those similar notes

1184
00:52:54,480 --> 00:52:56,919
Speaker 1: within those beers. Yeah, I think a lot of wine

1185
00:52:56,960 --> 00:52:58,640
Speaker 1: lovers can get into some kinds of beer, a lot

1186
00:52:58,640 --> 00:53:00,439
Speaker 1: of beer lovers can get into some kind a wine.

1187
00:53:00,480 --> 00:53:02,080
Speaker 1: I think there's more overlapp than maybe we give it

1188
00:53:02,080 --> 00:53:04,359
Speaker 1: credit for it. And sure, I just it's a very

1189
00:53:04,920 --> 00:53:06,160
Speaker 1: maybe it's just a lack of space in my brain.

1190
00:53:06,239 --> 00:53:08,120
Speaker 1: It's a very culture for it. I think that's the

1191
00:53:08,120 --> 00:53:10,560
Speaker 1: biggest thing is that like in my mind, you know,

1192
00:53:10,680 --> 00:53:13,320
Speaker 1: what do you picture when you think of a vineyard,

1193
00:53:13,360 --> 00:53:15,120
Speaker 1: It's like, you know, that's kind of Uppercruss, it's kind

1194
00:53:15,120 --> 00:53:17,480
Speaker 1: of fancy rest craft beer. It feels it feels more

1195
00:53:17,520 --> 00:53:19,200
Speaker 1: like every second a lot of like beards and plaid.

1196
00:53:19,360 --> 00:53:21,200
Speaker 1: So that's when I think of when I think about

1197
00:53:21,200 --> 00:53:23,920
Speaker 1: the craftier culture. But yes, that's gonna do it for

1198
00:53:24,000 --> 00:53:25,920
Speaker 1: this episode. If you want show notes with links to

1199
00:53:25,920 --> 00:53:28,120
Speaker 1: some of the stuff we mentioned, including kind of seeing

1200
00:53:28,120 --> 00:53:30,120
Speaker 1: the money gears like written out so that you can

1201
00:53:30,160 --> 00:53:32,960
Speaker 1: consume them that way, we'll have those at your disposal

1202
00:53:33,080 --> 00:53:35,840
Speaker 1: on our website at howtomoney dot com. That's right, and

1203
00:53:35,840 --> 00:53:38,240
Speaker 1: we'll see you back here on Friday with our Friday

1204
00:53:38,239 --> 00:53:40,720
Speaker 1: Flight episode, where we're gonna tackle some of the biggest

1205
00:53:40,760 --> 00:53:43,720
Speaker 1: stories that we've come across this week how those stories

1206
00:53:43,760 --> 00:53:46,560
Speaker 1: impact your money. So don't forget to hit the subscribe

1207
00:53:46,560 --> 00:53:49,160
Speaker 1: button if you are not already subscribed to the podcast.

1208
00:53:49,520 --> 00:53:51,960
Speaker 1: But buddy, that's gonna be it for this one. Until

1209
00:53:52,000 --> 00:53:54,560
Speaker 1: next time. Best Friends Out, Best Friends Out,