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Speaker 1: Welcome to Head of Money. I'm Joel and I am Matt.

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Speaker 1: Today we're answering your listener questions.

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Speaker 2: Yeah, boie, it's Monday, which means we get to hear

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Speaker 2: directly from listeners. We're gonna taken listener questions today. For instance,

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Speaker 2: we're gonna talk about the most important insurance product that

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Speaker 2: is probably not on your radar listeners. Actually, it's not

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Speaker 2: really a question as much of a comment that she's making.

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Speaker 2: We're gonna get to that. We're gonna talk about budgeting

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Speaker 2: on a variable income, as well as how much you're

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Speaker 2: gonna be paying in taxes when you sell your house.

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Speaker 2: That plus a couple other.

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Speaker 1: Things that we're gonna get to today. My friend, First,

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Speaker 1: let's get into something another listener cent our way. And

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Speaker 1: I love this because I feel like they had a

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Speaker 1: money community, so much crowdsourcing that goes on, and.

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Speaker 2: Like the feels more like a community as opposed to

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Speaker 2: coming from on high from Joel, right, not from me.

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Speaker 2: I don't know.

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Speaker 1: I'm not like making any laws, passing out the Ten

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Speaker 1: Commandments or anything like that. But so yeah, that's what

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Speaker 1: the Facebook group is so great about. If you are

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Speaker 1: on Facebook and you're not in the how to Money

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Speaker 1: Facebook group should totally join. I think we're at like

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Speaker 1: eleven thousand members and everyone just helps.

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Speaker 2: Each other out regularly. It's super sweet.

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Speaker 1: But then we get listener emails pretty regularly, multiple a day,

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Speaker 1: I would say, on average, and we got one from

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Speaker 1: Steven that stood out and he mentioned something that I

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Speaker 1: had not heard of. I'm like, I feel like I

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Speaker 1: got my ear to the ground when it comes to

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Speaker 1: what's going on in the financial fintech space. Well, it

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Speaker 1: turns out that credit bureau experience is getting into the

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Speaker 1: banking game, and I was shocked to see.

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Speaker 2: All that email. Yeah, thanks Stephen for sending that our way,

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Speaker 2: because I mean, first of all, why would you do

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Speaker 2: business any more business than you have to with a

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Speaker 2: credit bureau than you're required to. We're already basically forced

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Speaker 2: to against our will exactly. But they're calling it like

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Speaker 2: the smart money account, and it's being touted as a

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Speaker 2: way to boost your credit score because we're going to

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Speaker 2: count certain transactions to increasing your credit score. But then

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Speaker 2: like right below that claim, there's like this giant asterisk

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Speaker 2: and they're like, by the way, not all expenses, not

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Speaker 2: all purchases go towards that boost. It's basically results may vary.

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Speaker 1: It is there experience boost product that they're trying to

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Speaker 1: kind of put alongside now a sort of banking product

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Speaker 1: that they a proprietary banking product they're releasing, but.

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Speaker 2: It's grummy and like I think at most it's supposed

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Speaker 2: to be like what maybe ten or fifteen points if

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Speaker 2: it works perfectly right.

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Speaker 1: And the thing is, you can do the experience boost

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Speaker 1: thing without signing up for their bank account, so you

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Speaker 1: don't even have to you know, have a sort of

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Speaker 1: a relationship with them in order to get that benefit.

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Speaker 1: But the other problem is, like there's one you're doing

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Speaker 1: business with a company that hasn't really proven itself to

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Speaker 1: be very trustworthy. And then also you're not really getting

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Speaker 1: paid much of anything on the money that you're saving

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Speaker 1: inside of that on bank bank, I think was this

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Speaker 1: zero percent and.

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Speaker 2: I can't find anything.

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Speaker 1: I literally searched and went to multiple sites, So I'm

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Speaker 1: going to assume it's I'm going to assume zero somewhere

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Speaker 1: between zero and zero point one percent. Yeah, I mean,

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Speaker 1: because my easily offering, if it was solid, they'd be

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Speaker 1: touting it.

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Speaker 2: So yeah, yeah, and it's nowhere to be found, which

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Speaker 2: means it sucks.

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Speaker 1: Yeah, if you've been listening for any length of time,

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Speaker 1: you know that Matt and I we think the credit

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Speaker 1: scoring system it's important to play by the rules, but

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Speaker 1: that the credit bureaus are pretty awful what they do.

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Speaker 1: It's a game we all have to play. But don't

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Speaker 1: do business any more business than you have to with

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Speaker 1: these credit bureaus. So now that Yeah, Experience has a bank,

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Speaker 1: but it's a bank, I would say branks up there

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Speaker 1: with Wells fark in the bank least want.

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Speaker 2: To do business with. Yeah, Seriously, there are plenty of

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Speaker 2: other great options for you to check out, like cit

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Speaker 2: who's offering north of five percent on their Platinum savings account.

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Speaker 2: There are a lot of great options out there, but

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Speaker 2: C I T they are certainly leading the pack.

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Speaker 1: Yeah, and Experience just not one of the places we

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Speaker 1: want you to go when it comes to banking. You

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Speaker 1: don't need to consider them at all. But all right, Matt,

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

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Speaker 1: this episode. It's called Malpais Stout I guess by La

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Speaker 1: Cumbre Brewing. This one is the last.

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Speaker 2: Beer we have. Our friend Bob over in New Mexico,

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Speaker 2: our last New Mexican beer. Yeah.

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Speaker 1: Well, we'll give our thoughts on this one at the

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Speaker 1: end of the episode, but let's go ahead and get

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Speaker 1: to those listener Questions's got a lot of good ones

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Speaker 1: to get to today. If you have a question for us,

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Speaker 1: we'd love to hear it. We'd love to take it

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Speaker 1: maybe next week. You can find simple instructions for how

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Speaker 1: to submit your listener question at how toomoney dot com

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Speaker 1: slash ask. It's basically recording yourself on the app on

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Speaker 1: your phone sending it over our way via email.

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Speaker 2: Pretty simple. But Matt, the.

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Speaker 1: First question for today is about how to handle your

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Speaker 1: finances when you're self employed.

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Speaker 3: Hi, Joel and Matt. This is Teresa from American Canyon, California.

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Speaker 3: My question is on budgeting. I'm self employed, but I

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Speaker 3: would like to do a budget, but I'm not sure

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Speaker 3: where to start. My income can vary as much as

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Speaker 3: two to three thousand dollars a month. I want to

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Speaker 3: be able to do a budget without having to go

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Speaker 3: back over the last two years and average out what

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Speaker 3: I'm making and what I'm spending. Is are a better way?

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Speaker 3: Thanks a lot, and I really enjoy your show.

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Speaker 2: I've really learned a lot, all right, Teresa, thank you

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Speaker 2: for reaching out, and yes there is a better way

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Speaker 2: and uh, you know, yeah, budgeting on a variable income.

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Speaker 2: This is a common question, but I think it's one

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Speaker 2: we haven't tackled in a while. And it's an important

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Speaker 2: one too, for for all the solopreneurs out there, for

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Speaker 2: all of those folks who are taking more of the

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Speaker 2: entrepreneurial path. When you forsake that W two lifestyle, it

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Speaker 2: comes with some of that uncertainty about how much and

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Speaker 2: when it is that you're going to get paid. Yeah,

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Speaker 2: having been self employed for over fifteen years, it's something

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Speaker 2: I take for granted because, yeah, what is a W

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Speaker 2: two Joel? What is a regular paycheck? Though? What are

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Speaker 2: company benefits? These are things I know you've never really

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Speaker 2: got to experience them. I guess we do have our

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Speaker 2: own personal or our own company benefits, but it's a

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Speaker 2: little bit different when you're wearing both the employer hat

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Speaker 2: and the employee hat. Yeah, but something that you need, Yeah,

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Speaker 2: that is worth addressing when you are self employee. Teresa.

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Speaker 1: When I went from W two and come to kind

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Speaker 1: of going full time with the podcast, that was something

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Speaker 1: that felt like it was looming over my head, the

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Speaker 1: irregularity of the income. It was like, is there going

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Speaker 1: to be enough? And then it was also, well, howten's

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Speaker 1: it going to come in and what's what's the payment

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Speaker 1: cycle is going to be like? Because we get paid quarterly,

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Speaker 1: and so it just changes from essentially like clockwork, having

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Speaker 1: that paycheck being socked into your account every two weeks,

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Speaker 1: and so there's a mental shift that has to take

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Speaker 1: place when you get paid on a different cycle.

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Speaker 2: That's what they call the direct deposit, right jel Yeah,

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Speaker 2: which was incredible to me.

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Speaker 1: Part of me was like, you know what, I appreciate

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Speaker 1: the certainty so much that I would almost rather make

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Speaker 1: less and just have that certainty.

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Speaker 2: Granted that's not rational, but I guess there's a fear

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Speaker 2: associated with that. I do think that's something that keeps

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Speaker 2: some folks from stepping out on their own, is that uncertainty. Yeah?

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Speaker 2: I agree.

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Speaker 1: So let's talk about how now that you've had a

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Speaker 1: taste of the freedom there's no yeah back, Let's talk

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Speaker 1: about some of the things that you and I have

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Speaker 1: both done to kind of make that irregularity way over

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Speaker 1: our heads quite a bit less and and just how

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Speaker 1: to deal with it in general. Well, the first tip

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Speaker 1: is really to have extra savings on hand. This can

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Speaker 1: allow you to smooth out your income artificially, and we

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Speaker 1: typically recommend having something like three to six months worth

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Speaker 1: of expenses stuffed into a savings account for most people,

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Speaker 1: and if you're self employed, that numbers should be on

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Speaker 1: the higher end of things. So let's say you're fairly frugal,

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Speaker 1: duel income, no kids, household, and three months should be

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Speaker 1: enough for you to feel comfortable in most cases. But

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Speaker 1: if you're Teresa or Matt and Joel, that is, we

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Speaker 1: think that being self employed is worth. It's worth the

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Speaker 1: trade offs you have to make. But in order to

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Speaker 1: not freak out about a month or a quarter where

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Speaker 1: your income is not quite as substantial as you hoped

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Speaker 1: it would be, this is a crucial step to take.

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Speaker 1: Is to have a bigger buffer that allows you to

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Speaker 1: tap those funds in leaner times and then funnel more

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Speaker 1: of your income into that emergency emergency fund to beef

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Speaker 1: it back up during fatter times. Right, you might even

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Speaker 1: want to consider upping that amount to something like nine

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Speaker 1: to twelve months worth of expenses in savings. That's sounds

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Speaker 1: like a lot of cash to have on hand, and

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Speaker 1: it is, but as long as it's not preventing you

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Speaker 1: from reaching other financial milestones, it can be psychologically helpful

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Speaker 1: as a self employed person to kind of boost your

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Speaker 1: confidence that no matter what comes your way, you are

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Speaker 1: good to go. And so, Matt, I mean, just based

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Speaker 1: on kind of my personal finances, all the stuff that

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Speaker 1: I've got going on with rental properties, with self employ

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Speaker 1: self employment, I air on that side, even though maybe

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Speaker 1: maybe it's too cash heavy.

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Speaker 2: But for me it feels right, Oh absolutely, man. Yeah,

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Speaker 2: And like Teresa mentioned, like, there's really no need to

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Speaker 2: comb back over all of our financial transactions and expenses

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Speaker 2: over the past two years in order to come up

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Speaker 2: with a nice little budget. It sounds like overkill to me.

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Speaker 2: I think an easy path forward in getting started with

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Speaker 2: your budget is to simply look back over let's say

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Speaker 2: the last three months, and then have that be the

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Speaker 2: starting point for your new budget. You're able to essentially

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Speaker 2: base that on actual expenses that you've incurred recently, and

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Speaker 2: chances are those recent expenses are more likely going to

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Speaker 2: be reflective of what you're going to spend I think

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Speaker 2: moving forward, rather than what it is that you happen

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Speaker 2: to have spent two years ago and having that average.

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Speaker 1: In Yeah, let's be honest, prices have gone up over

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Speaker 1: the last two That is also true three to four

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Speaker 1: or five months of expenses are going to be way

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Speaker 1: more reflective.

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Speaker 2: And inflation plays a large role for sure when it

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Speaker 2: comes to maybe trying to create a budget from scratch

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Speaker 2: and just lifestyle.

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Speaker 1: Our lifestyle changes, so you got to have different values

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Speaker 1: fact to that in don't factor and pass to you

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Speaker 1: factor and current you.

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Speaker 2: And then on the income side of the ledger, I'm

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Speaker 2: guessing tree so that you have a pretty good idea

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Speaker 2: of what you're likely going to make next month compared

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Speaker 2: to what you've made recently, what you made last month.

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Speaker 2: So just start there and it's not gonna be perfect

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Speaker 2: right out of the gate, but that's just a good

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Speaker 2: place to start. And to be honest, it's never going

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Speaker 2: to be quote unquote perfect because there are always going

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Speaker 2: to things that pop up life. It happens, But don't

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Speaker 2: let that keep you from making strides towards some of

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Speaker 2: the different financial goals that you have. And when you

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Speaker 2: are able to measure your expenses and your income, what

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Speaker 2: gets measured gets improved. I think that's the maximum, isn't

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Speaker 2: that like measured gets managed maybe maybe somebody. So bottom line,

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Speaker 2: the ability just to start tracking this and start setting

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Speaker 2: some goals, even though they might be off by a

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Speaker 2: large amount, it's going to in the end result in

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Speaker 2: you achieving your financial goals faster.

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Speaker 1: Yeah, I mean, I think the number one thing is like, yeah,

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Speaker 1: to look at recent expenses, recent income then and it's

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Speaker 1: also crucial to have that bigger buffer. That's going to

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Speaker 1: prevent a lot of the worrying about what's going to

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Speaker 1: happen with your money in the future, because if you

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Speaker 1: have a significant amount set aside and savings, you're just

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Speaker 1: not freaking out about the possibility of a down month

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Speaker 1: or even a down year. And another one of the

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Speaker 1: ways to smooth out those bumps in the road, like

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Speaker 1: when you're paid late by a company you're working with,

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Speaker 1: which happens a lot when you're a solopreneur. You're like, oh,

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Speaker 1: I'm putting the work and then I've given them ninety

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Speaker 1: days to pay. Guess what we're at day eighty seven.

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Speaker 1: Are they going to pay on time? And those are

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Speaker 1: the kind of things that you have to contend with

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Speaker 1: when you're working for yourself. The other thing is to

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Speaker 1: really tweak your expenses that you don't find yourself going

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Speaker 1: over budget when that happens, so at least until you

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Speaker 1: get to that six month savings mark a bare bones budget,

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Speaker 1: having one at least created can be incredibly helpful, and

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Speaker 1: then you can move over to it in times of need.

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Speaker 1: We talked about that in depth in episode three sixty

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Speaker 1: two back in the day, but essentially what we're talking

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Speaker 1: about here is having some flexibility when it comes to

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Speaker 1: your monthly expenses, right, being able to vary them a

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Speaker 1: little and live leaner should circumstances require it. And you're

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Speaker 1: not hoping to have to live on your barebone barbones

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Speaker 1: budget in perpetuity. That is not the goal. That's no

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Speaker 1: way to live over the long period of time, but

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Speaker 1: it is a helpful way to be able to rain

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Speaker 1: in those expenses should circumstances require it. On basically flip,

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Speaker 1: being able to flip on a dime. And so of

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Speaker 1: course there are some payments and expenses that you're going

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Speaker 1: to maintain.

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Speaker 2: No matter what.

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Speaker 1: Gotta pay your rent or your mortgage every single month,

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Speaker 1: but that's of course still included in your bar bones

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Speaker 1: budget that you can meander over to, but just know

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Speaker 1: that there are other places that you can of course

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Speaker 1: flex other places you can cut back on. Eating out

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Speaker 1: is one of the easiest ones. Being flexible is important,

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Speaker 1: and it's particularly important, I think when your income is

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Speaker 1: a regular and especially when you don't have much of

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Speaker 1: that savings buffer on hand yet totally.

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Speaker 2: Yeah, I will say that can definitely be helpful. However,

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Speaker 2: if what we're talking about here is just a variable

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Speaker 2: income where you know that, like bottom line, like I

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Speaker 2: always end up with enough money at the end of

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Speaker 2: the year, not and who actually knows if that's going

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Speaker 2: to be the case, right, but based on previous years,

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Speaker 2: if you know that at some point you are going

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Speaker 2: to have not only enough on hand, but more than enough,

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Speaker 2: I think a bare bones budget, yes, it can be

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Speaker 2: helpful in order to sock away a little bit more

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Speaker 2: money to spend a little bit less. But this is

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Speaker 2: where having more cash on hand, having more that cash

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Speaker 2: cushion comes into play, because yes, there are some psychological

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Speaker 2: wins by pairing back a little bit. But if you know, say,

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Speaker 2: at the end of the year, you're going to get

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Speaker 2: some massive bonus, and that's going to be more than

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Speaker 2: enough to cover all your expenses. Then it's not necessarily

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Speaker 2: required for you to skill back on your expenses. It's

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Speaker 2: good to know that you can. And I think that's

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Speaker 2: the real power. That's like the strength of the bare

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Speaker 2: bones budget is to it's like training. It's like running.

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Speaker 2: You know, you see people running with like the vests

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Speaker 2: on Joel sinking out getting a vest didaism rucking. But

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Speaker 2: by doing that, it allows you to be stronger in

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Speaker 2: the instance where oh, in reality, I actually do have

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Speaker 2: to pair back on my expenses.

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Speaker 1: Yeah, most of the time, you're not going to need

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Speaker 1: to do some sort of ten mile walk with forty

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Speaker 1: pounds on your back. But like to know that you

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Speaker 1: can means it exactly can excel kind of without the

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Speaker 1: back on, right, that's why you're doing it. And so yeah,

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Speaker 1: I think you're right. I think just by creating the

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Speaker 1: bare bones budget, by knowing it exists and knowing you

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Speaker 1: can turn to it, that alleviates some of the pressure.

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Speaker 1: And it's it's pretty rare that people need to turn

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Speaker 1: to it unless it's like a case of job loss,

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Speaker 1: right or something more significant, not usually just because it

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Speaker 1: was a down month totally, especially like you said, if

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Speaker 1: you've got that that savings buffer built up significantly, exactly.

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Speaker 2: Yeah, So from personal experience, I will say there are

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Speaker 2: times when our emergency fund, or not even our emergency fund,

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Speaker 2: but just the margin that we dip into when cause

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Speaker 2: we get paid irregularly here with the podcas Castrol. And

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Speaker 2: even though I know that by the time we get

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Speaker 2: to the end of the year, I'm going we're gonna

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Speaker 2: have more than enough on hand, the months we're basically

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Speaker 2: we're not getting paid, and I do what we are

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Speaker 2: having to dip into a stockpile, the little war chest

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Speaker 2: that we've accumulated, we do spend less during those months

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Speaker 2: because it's sort of like this natural reaction of like, oh,

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Speaker 2: it's not fun to dipping our savings. Psychologically it's not fun.

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Speaker 2: And so the ability to scale back a little bit,

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Speaker 2: even though I don't necessarily have to a there's a

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Speaker 2: psychological win that you're able to experience in that way. Granted,

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Speaker 2: we're not scaling back in such a way that people

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Speaker 2: are like, oh man, they're really cutting back, are they Okay?

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Speaker 2: But there are these small tweaks that you can make

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Speaker 2: to remind yourself that, yeah, in reality, you aren't making

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Speaker 2: a ton of money this or in fact, maybe maybe none.

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Speaker 2: You don't have to like sell all your earthly possessions.

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Speaker 2: So yeah, you don't want to do anything too short sighted,

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Speaker 2: but it is kind of fun to modify your behavior

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Speaker 2: a little bit. That way, you're not completely insulated from

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Speaker 2: the fact that your income is go up and down

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Speaker 2: miss your self employed. The same thing when we talk

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Speaker 2: about moving the thermostat right, it's like you kind of

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Speaker 2: want to feel the pain just a little bit. You

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Speaker 2: want to That's why we hate budget billing, is because

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Speaker 2: we want you to do We want to imilated from

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Speaker 2: those actual expenses exactly.

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Speaker 1: Yeah, well, okay, what this really makes me think too

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Speaker 1: is a story from Genesis in the Bible when Joseph

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Speaker 1: he's he's worked for Pharaoh, mister technicolor jacket. Yeah, and

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Speaker 1: so so he has this dream that there's there's going

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Speaker 1: to be fat cows and lean cows, and ultimately what

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Speaker 1: he ends up he ends up interpreting this dream and

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Speaker 1: it means that there's going to be seven years of

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Speaker 1: plenty and then seven years of lean times of famine

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Speaker 1: essentially in the country. And so he does this great

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Speaker 1: job of building barns storing up during those fattened years

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Speaker 1: when things are going well, so that when the famine arises,

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Speaker 1: guess what all the other countries, even around Egypt, they've got.

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Speaker 1: They're like trying to try buy wheat from the Egyptians

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Speaker 1: because they've done such a good job of stockpiling. And

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Speaker 1: this is kind of the I think the mentality that

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Speaker 1: you want to have on when you budget on a

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Speaker 1: barying income, like and it makes it difficult if you

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Speaker 1: have too little in savings, if you haven't prepared for

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Speaker 1: the rainy days. Hopefully your income continues to grow, right,

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Speaker 1: and the variable income is just becomes this snowball that

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Speaker 1: grows and becomes bigger and you continue to crush it

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Speaker 1: in your career. But we're not guaranteed that, and so

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Speaker 1: it's so nice to have that a little war chest

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Speaker 1: to savings pile so that those lean times don't actually

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Speaker 1: overwhelm us and take us off course and prevent us

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Speaker 1: from reaching those bigger financial goals that we've got.

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Speaker 2: Totally. It kind of fills in those valleys a little bit.

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Speaker 2: So one other tip, Teresa, I guess, like from a

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Speaker 2: practical standpoint, I think what can be helpful because it

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Speaker 2: sounds like you're creating your first budget, and if it

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Speaker 2: sounds overwhelming, perhaps to also create a whole other budget

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Speaker 2: right where you're creating the bare bones budget. I think

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Speaker 2: just even simply on a separate sheet of paper, like

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Speaker 2: listing out some of the expenses that you have and

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Speaker 2: then ranking them in priority of things that you have

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Speaker 2: to pay, but then things that would be nice to

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Speaker 2: dedicate your resources towards. That way, when the time comes

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Speaker 2: from a practical standpoint, you're not scrambling trying to figure out, well, shoot,

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Speaker 2: I don't have enough money on hand. Well, if there

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Speaker 2: is a situation that arises when you don't actually have

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Speaker 2: enough money, you've got basically like a set of instructions

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Speaker 2: to guide you that you were able to establish maybe

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Speaker 2: during a period of time when you were feeling less stressed,

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Speaker 2: maybe when you're able to thoughtfully think through it. But

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Speaker 2: then simultaneously, I think it's really helpful to have a

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Speaker 2: set of instructions on hand that can help to create

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Speaker 2: like this order of operations when you have excess funds.

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Speaker 2: And this is literally something that Kate and I created

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Speaker 2: years ago of Okay, what is it that we actually

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Speaker 2: want to do with our money? Beyond day to day,

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Speaker 2: month to month kind of living. And for us it

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Speaker 2: was typically okay, there's the roth Ira bucket, so no

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Speaker 2: matter what, let's go ahead and fill that thing up.

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Speaker 2: But then after that, for us, typically it was real estate.

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Speaker 2: It was saving up money that's going to be a

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Speaker 2: down payment for another investment property. That way, in those

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Speaker 2: months where we did have excess funds, we weren't tempted

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Speaker 2: to squander that money. We weren't tempted to just like,

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Speaker 2: guess what, we're going to go to Europe. It was

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Speaker 2: a preemptied decision that we made to funnel those dollars

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Speaker 2: towards some of the different goals that we had.

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Speaker 1: That's like the other side of the cour right, is

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Speaker 1: when you're exactly like, hey, that the downside you want

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Speaker 1: to you wanna save like a pessimist of right, and

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Speaker 1: so you want to have enough in account in case

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Speaker 1: the worst thing happens. But then hopefully you're like, oh,

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Speaker 1: variable income, guess what made twenty five K more than

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Speaker 1: I thought I was going to this year?

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Speaker 2: What am I gonna do with that?

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Speaker 1: And so you should have an idea for where that

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Speaker 1: money goes beyond just once you have that savings buffer

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Speaker 1: built up. Hopefully some of it's going into something like

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Speaker 1: a solo four oh one, k right, and but but

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Speaker 1: then some of the others. If you reach certain benchmarks,

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Speaker 1: I think you should feel free to take that trip

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Speaker 1: to Europe too. Just make sure you have, like Matt said,

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Speaker 1: your pre planning and you're thinking about it and you're

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Speaker 1: not just like throwing money at whatever sounds nice in

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Speaker 1: the moment. So exactly, Yeah, Teresa, best of luck to you.

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Speaker 1: Though it's budgeting on a variable income takes a little

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Speaker 1: bit of getting used to, but you got this.

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Speaker 2: You can make it happen totally. Now.

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Speaker 1: We got more to get to on this episode, though,

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Speaker 1: including we're gonna talk about like what happens when you

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Speaker 1: sell a home, do you owe tax? Some people will

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Speaker 1: We'll actually get to that and more right after this.

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Speaker 2: Oh right, we are back from the break and we've

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Speaker 2: got a question from a listener and they also happen

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Speaker 2: to be new parents.

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Speaker 4: Hi, Jolan, Matt, this is Brianna from Louisville, Kentucky. Thank

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Speaker 4: you so much for the podcast. It's been very helpful.

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Speaker 4: I have a question about five twenty nine's. My husband

435
00:19:21,240 --> 00:19:24,000
Speaker 4: and I recently had our first daughter in April and

436
00:19:24,200 --> 00:19:26,919
Speaker 4: we set up a five twenty nine for her. We

437
00:19:27,000 --> 00:19:30,000
Speaker 4: do plan to contribute a small amount monthly, but currently

438
00:19:30,000 --> 00:19:33,280
Speaker 4: we're trying to decide what I guess the goal of

439
00:19:33,480 --> 00:19:35,800
Speaker 4: the account would be as far as like a number.

440
00:19:36,240 --> 00:19:38,000
Speaker 4: We don't want money to get stuck in the account

441
00:19:38,040 --> 00:19:39,919
Speaker 4: if she was to get a scholarship or you know,

442
00:19:39,960 --> 00:19:42,880
Speaker 4: decide not to go with a four year degree. Currently,

443
00:19:42,920 --> 00:19:48,320
Speaker 4: we're thinking about capping that number at what the regulations

444
00:19:48,680 --> 00:19:52,280
Speaker 4: say you can roll over to a roth in the lifetime.

445
00:19:52,880 --> 00:19:56,760
Speaker 4: It looks like that's maybe thirty five thousand currently a year,

446
00:19:56,840 --> 00:19:58,600
Speaker 4: So we're thinking maybe that should be our goal for

447
00:19:58,640 --> 00:20:01,439
Speaker 4: the account. Your input in that and kind of what

448
00:20:01,520 --> 00:20:05,320
Speaker 4: you think if there's any other equation or anything else

449
00:20:05,720 --> 00:20:09,000
Speaker 4: as far as determining like what the number should reach

450
00:20:09,080 --> 00:20:11,000
Speaker 4: at the five twenty nine account. Again, thank you so

451
00:20:11,080 --> 00:20:12,800
Speaker 4: much for the podcast. It's been helpful.

452
00:20:13,240 --> 00:20:13,440
Speaker 2: Matt.

453
00:20:13,480 --> 00:20:15,440
Speaker 1: Did you hear that cooing in the background was right

454
00:20:15,480 --> 00:20:17,440
Speaker 1: on que Pretty sweet. I think she kind of reached

455
00:20:17,440 --> 00:20:21,159
Speaker 1: down there and poked her. She's like, your chance to

456
00:20:21,200 --> 00:20:24,560
Speaker 1: be on a podcast, and you've done it well.

457
00:20:24,600 --> 00:20:24,919
Speaker 2: Brianna.

458
00:20:24,960 --> 00:20:28,119
Speaker 1: Thanks for your question and congrats on first kiddo, But

459
00:20:28,680 --> 00:20:30,399
Speaker 1: the best time, right, I just actually hung out with

460
00:20:30,440 --> 00:20:32,440
Speaker 1: somebody last night who just has a six month old,

461
00:20:32,760 --> 00:20:35,880
Speaker 1: and it is simultaneously the sweetest and the most sleep

462
00:20:35,880 --> 00:20:37,680
Speaker 1: to private lever you'll ever.

463
00:20:37,520 --> 00:20:40,800
Speaker 2: Be, right, I like seeing other folks who have babies. Now,

464
00:20:40,880 --> 00:20:43,359
Speaker 2: it's not something I plan to revisit.

465
00:20:43,040 --> 00:20:46,120
Speaker 1: Right, exactly what you might want to take some action

466
00:20:46,160 --> 00:20:48,560
Speaker 1: on that front, my frie. That's true, all right, but

467
00:20:48,600 --> 00:20:50,760
Speaker 1: how much did you actually contribute to a five twenty

468
00:20:50,800 --> 00:20:53,720
Speaker 1: one account? We'll offer our best thoughts on that. You know,

469
00:20:53,560 --> 00:20:56,000
Speaker 1: we've had to actually wait through similar questions in our

470
00:20:56,040 --> 00:20:58,679
Speaker 1: own families. But first things first, we don't want to

471
00:20:58,680 --> 00:21:01,960
Speaker 1: sound like hardline hard jerks, but the only time someone

472
00:21:02,000 --> 00:21:03,840
Speaker 1: should really be contributing to a five to twenty nine

473
00:21:03,880 --> 00:21:06,040
Speaker 1: plan is if they're already in money gear seven is

474
00:21:06,040 --> 00:21:08,480
Speaker 1: if they're in that upper echelon. They've achieved a lot

475
00:21:08,480 --> 00:21:10,600
Speaker 1: of that are the other money goals that they've had

476
00:21:10,680 --> 00:21:12,080
Speaker 1: set out in front of them. And it's not because

477
00:21:12,080 --> 00:21:14,119
Speaker 1: we're anti kids going to college. We want kids to

478
00:21:14,119 --> 00:21:16,440
Speaker 1: go to college, or at least a lot of kids,

479
00:21:16,480 --> 00:21:18,919
Speaker 1: but not every kid, because blue collar work and entrepreneurship

480
00:21:18,920 --> 00:21:21,280
Speaker 1: are the great routes are also important, right, but it's

481
00:21:21,320 --> 00:21:24,240
Speaker 1: because we're pro you investing and saving enough to be

482
00:21:24,280 --> 00:21:26,520
Speaker 1: able to retire. It's important to have most of your

483
00:21:26,520 --> 00:21:28,480
Speaker 1: debt paid off and to be funneling a decent chunk

484
00:21:28,520 --> 00:21:31,040
Speaker 1: of your income into tax advantaged retirement accounts.

485
00:21:31,080 --> 00:21:31,359
Speaker 2: First.

486
00:21:31,640 --> 00:21:36,200
Speaker 1: If you're not doing that, then you're investing for your child,

487
00:21:36,280 --> 00:21:39,200
Speaker 1: for their future college, for their future higher education needs

488
00:21:39,359 --> 00:21:40,679
Speaker 1: needs to be put on the back burner for the

489
00:21:40,680 --> 00:21:41,120
Speaker 1: time being.

490
00:21:41,560 --> 00:21:44,920
Speaker 2: That's right. And actually, we are much bigger fans now

491
00:21:44,960 --> 00:21:47,080
Speaker 2: of five twenty nine accounts these days than we were

492
00:21:47,160 --> 00:21:50,560
Speaker 2: a year ago. That's largely because of the added flexibility

493
00:21:50,600 --> 00:21:53,639
Speaker 2: that they now have. Unused funds for college can be

494
00:21:53,720 --> 00:21:57,080
Speaker 2: rolled into a roth IRA for your kiddo. They don't

495
00:21:57,119 --> 00:21:59,840
Speaker 2: end up needing all that muney or even much of

496
00:21:59,880 --> 00:22:02,560
Speaker 2: the money that you stalked away into that account. And

497
00:22:02,560 --> 00:22:05,119
Speaker 2: that's thanks to the Secure Act two point zero.

498
00:22:05,200 --> 00:22:07,920
Speaker 1: Yeah, we kind of did a whole episode detailing all

499
00:22:07,960 --> 00:22:10,439
Speaker 1: of the changes to retirement accounts that happened in the

500
00:22:10,440 --> 00:22:11,600
Speaker 1: Secure Act two point zero.

501
00:22:11,600 --> 00:22:13,600
Speaker 2: But it's in the five twenty nine. The changes to

502
00:22:13,640 --> 00:22:16,320
Speaker 2: those plans were some of the most significant, and for

503
00:22:16,359 --> 00:22:19,040
Speaker 2: the first time we're like, you know what, Yeah, we're

504
00:22:19,119 --> 00:22:20,879
Speaker 2: kind of getting behind the five twenty nine plans for

505
00:22:21,000 --> 00:22:25,280
Speaker 2: more folks than just those who were like, well, well

506
00:22:25,280 --> 00:22:28,280
Speaker 2: on far down the path towards their financial goals.

507
00:22:28,320 --> 00:22:31,879
Speaker 1: Specifically for folks who really want like the generational wealth

508
00:22:31,920 --> 00:22:34,160
Speaker 1: sort of thing. If that's a big focus of yours, well,

509
00:22:34,280 --> 00:22:37,119
Speaker 1: the five twenty nine early on in a child's life

510
00:22:37,359 --> 00:22:39,480
Speaker 1: to roth conversion combo can help make that out.

511
00:22:39,560 --> 00:22:41,920
Speaker 2: Yeah, it's a way to do that, but be sure

512
00:22:41,920 --> 00:22:45,119
Speaker 2: to look into the finer points, into the details. But

513
00:22:45,200 --> 00:22:47,399
Speaker 2: the main one with five twenty nine is that the

514
00:22:47,400 --> 00:22:50,760
Speaker 2: account needs to have been opened for at least fifteen

515
00:22:50,840 --> 00:22:53,400
Speaker 2: years before you can start to turn those five twenty

516
00:22:53,520 --> 00:22:57,000
Speaker 2: nine dollars into roth Ira dollars. And so what that

517
00:22:57,080 --> 00:22:59,639
Speaker 2: means is getting some money into the five twenty nine account,

518
00:22:59,680 --> 00:23:02,080
Speaker 2: now if it's just like twenty five bucks, because that

519
00:23:02,119 --> 00:23:05,399
Speaker 2: at least gets that clock ticking. That's something literally that

520
00:23:05,480 --> 00:23:07,760
Speaker 2: I did with for Kate, and I I don't know why,

521
00:23:08,000 --> 00:23:10,160
Speaker 2: but I thought, all right, twenty five bucks to open

522
00:23:10,200 --> 00:23:12,280
Speaker 2: an account and just to get the ball rolling. Now

523
00:23:12,280 --> 00:23:14,879
Speaker 2: I know I've got the options way far down the

524
00:23:14,960 --> 00:23:16,600
Speaker 2: road to be able to do something with that account,

525
00:23:16,640 --> 00:23:19,359
Speaker 2: were the rules to change to have different goals that

526
00:23:19,400 --> 00:23:21,440
Speaker 2: we might I don't. I don't know, that's the thing.

527
00:23:21,480 --> 00:23:23,840
Speaker 2: And so the ability to have that count, the ability

528
00:23:23,880 --> 00:23:26,120
Speaker 2: to get that thing open, in my mind, for twenty

529
00:23:26,160 --> 00:23:28,520
Speaker 2: five bucks is kind of a small price to pay

530
00:23:28,600 --> 00:23:31,159
Speaker 2: for something that might end up benefiting us, yea, like

531
00:23:31,200 --> 00:23:32,720
Speaker 2: in a major way. On it offers a lot of

532
00:23:32,720 --> 00:23:33,520
Speaker 2: feature flexibility.

533
00:23:33,520 --> 00:23:35,240
Speaker 1: There's no reason not to open it and put some

534
00:23:35,320 --> 00:23:36,840
Speaker 1: money in, even if you're not in money.

535
00:23:36,880 --> 00:23:38,520
Speaker 2: You're seven, you can do that step right totally.

536
00:23:38,600 --> 00:23:40,240
Speaker 1: But then once you get further along, that's when you

537
00:23:40,240 --> 00:23:43,320
Speaker 1: can prioritize making even further contributions to that account on

538
00:23:43,480 --> 00:23:44,280
Speaker 1: for your kid's behalf.

539
00:23:44,280 --> 00:23:46,560
Speaker 2: And I think the minimum amount's varied depending on the

540
00:23:46,600 --> 00:23:48,560
Speaker 2: different state plans, but I say twenty five bucks because

541
00:23:48,600 --> 00:23:51,479
Speaker 2: that's what the Georgia yeah five twenty nine plan requires.

542
00:23:51,520 --> 00:23:52,520
Speaker 2: Sometimes it's twenty bucks.

543
00:23:52,520 --> 00:23:55,600
Speaker 1: Sometimes you know, whatever, it's It's all you got to

544
00:23:55,600 --> 00:23:56,520
Speaker 1: do is tick in five bucks.

545
00:23:57,080 --> 00:23:57,880
Speaker 2: Yeah, exactly.

546
00:23:58,160 --> 00:24:00,400
Speaker 1: But it's also important to mention by the that you're

547
00:24:00,400 --> 00:24:02,400
Speaker 1: not going to get smacked around from a tax perspective

548
00:24:02,680 --> 00:24:04,720
Speaker 1: if your brilliant child ends up getting like tons of

549
00:24:04,720 --> 00:24:08,200
Speaker 1: scholarships there's there is a ten percent penalty for unqualified

550
00:24:08,200 --> 00:24:11,639
Speaker 1: withdraws on the earnings, not on your original contributions. But

551
00:24:11,840 --> 00:24:14,000
Speaker 1: if your kid ends up getting a like, let's say

552
00:24:14,000 --> 00:24:16,720
Speaker 1: a ten thousand dollars scholarship for instance, it actually counts

553
00:24:16,720 --> 00:24:19,560
Speaker 1: as a qualified withdrawal when you take out that amount

554
00:24:19,560 --> 00:24:21,480
Speaker 1: from the five to twenty nine plan. So you could

555
00:24:21,520 --> 00:24:24,240
Speaker 1: take ten k out of the five twenty nine plan

556
00:24:24,560 --> 00:24:27,720
Speaker 1: ten k of those earnings because of that scholarship, it's

557
00:24:27,720 --> 00:24:30,520
Speaker 1: still going to qualified as a qualified withdraw so the

558
00:24:30,560 --> 00:24:32,920
Speaker 1: ten percent penalty does not apply to those dollars that

559
00:24:32,960 --> 00:24:36,000
Speaker 1: you're taking out. Basically, you're not penalized because of the scholarship,

560
00:24:36,040 --> 00:24:37,359
Speaker 1: which is really important to know.

561
00:24:37,440 --> 00:24:39,200
Speaker 2: It almost feels if that were to be the case,

562
00:24:39,200 --> 00:24:42,679
Speaker 2: it almost feels like a disincentive for families to get

563
00:24:42,680 --> 00:24:44,800
Speaker 2: out there and apply for scholarships, because would you do

564
00:24:44,840 --> 00:24:46,440
Speaker 2: that if you've got all this money set aside in

565
00:24:46,480 --> 00:24:48,600
Speaker 2: your five pointy nine and you're gonna get penalized on that. No,

566
00:24:49,200 --> 00:24:50,480
Speaker 2: in reality, you're not going to be penalized.

567
00:24:50,680 --> 00:24:52,719
Speaker 1: It would make sticking money into your five twenty nine

568
00:24:52,760 --> 00:24:55,200
Speaker 1: a lot more risky, sure, because it's hard to plan

569
00:24:55,840 --> 00:24:57,639
Speaker 1: for that kind of stuff. So it's nice to know

570
00:24:57,680 --> 00:25:00,399
Speaker 1: that you're not penalized for that. And so yeah, basically

571
00:25:00,400 --> 00:25:02,040
Speaker 1: means there's not as much risk as you might think

572
00:25:02,080 --> 00:25:04,399
Speaker 1: of oversaving in that account. Plus you can always let

573
00:25:04,440 --> 00:25:07,359
Speaker 1: that money continue to grow for grad school for that child,

574
00:25:07,440 --> 00:25:09,600
Speaker 1: or for another kid that might come along, or even

575
00:25:09,600 --> 00:25:11,640
Speaker 1: if you decide to go back to school yourself.

576
00:25:11,359 --> 00:25:14,040
Speaker 2: So you can change up the beneficiary. Yeah, yep, So the.

577
00:25:14,080 --> 00:25:17,640
Speaker 1: Five twenty nine flexibility, it goes beyond just the roth.

578
00:25:17,680 --> 00:25:19,560
Speaker 1: It goes being all the way to being able to

579
00:25:19,640 --> 00:25:21,959
Speaker 1: change beneficiaries. If you have other kids, that money can

580
00:25:22,040 --> 00:25:24,160
Speaker 1: go towards them if they don't get the same sort

581
00:25:24,160 --> 00:25:26,520
Speaker 1: of financial aid, or if they go to college and

582
00:25:26,600 --> 00:25:29,480
Speaker 1: your firstborn doesn't. There are at least options for that

583
00:25:29,520 --> 00:25:31,359
Speaker 1: money and how it can be used in other ways.

584
00:25:31,480 --> 00:25:33,800
Speaker 2: Yes, right, But as far as your goals, as far

585
00:25:33,800 --> 00:25:35,840
Speaker 2: as how much money to have in that account, I

586
00:25:35,880 --> 00:25:38,199
Speaker 2: like where your head's that. The idea of trying to

587
00:25:38,480 --> 00:25:41,280
Speaker 2: get that account into that thirty five thousand dollars range,

588
00:25:41,280 --> 00:25:43,640
Speaker 2: but not too far beyond it. I think that makes

589
00:25:43,680 --> 00:25:46,160
Speaker 2: a ton of sense. I'm certainly not trying to save

590
00:25:46,240 --> 00:25:48,760
Speaker 2: up six figures for each one of my kids, Right,

591
00:25:48,840 --> 00:25:52,600
Speaker 2: So what six figures times four, that's a ton of money.

592
00:25:52,960 --> 00:25:55,320
Speaker 2: My goal ideally is to have somewhere like I'm thinking

593
00:25:55,440 --> 00:25:58,119
Speaker 2: in the forty to fifty sixty thousand dollars range in there,

594
00:25:58,640 --> 00:26:01,199
Speaker 2: And honestly, that's thing so kind of going back to

595
00:26:01,240 --> 00:26:04,200
Speaker 2: Teresa's question, that's something that we frontloaded, right, we had

596
00:26:04,200 --> 00:26:06,080
Speaker 2: a couple of years where we made a good bit

597
00:26:06,119 --> 00:26:09,040
Speaker 2: more than we normally did. Like earlier, I mentioned that

598
00:26:09,160 --> 00:26:11,320
Speaker 2: some of the different goals like I almost see them

599
00:26:11,359 --> 00:26:13,240
Speaker 2: as buckets that flow into one another. And so like

600
00:26:13,280 --> 00:26:15,879
Speaker 2: the first bucket that got filled up roth Ira Sweet,

601
00:26:16,200 --> 00:26:19,480
Speaker 2: next bucket investment property Sweet. In this case, we weren't

602
00:26:19,560 --> 00:26:22,119
Speaker 2: pursuing any more investment property. So another bucket that opened

603
00:26:22,160 --> 00:26:24,359
Speaker 2: up five twenty nine accounts, and so the ability for

604
00:26:24,440 --> 00:26:27,120
Speaker 2: us to Maxo's out for a couple of years. Personally,

605
00:26:27,200 --> 00:26:29,399
Speaker 2: I'm not hopefully not gonna have to put too much

606
00:26:29,440 --> 00:26:32,560
Speaker 2: more money into those accounts because I'm counting on the

607
00:26:32,600 --> 00:26:37,280
Speaker 2: dollars in there to continue to grow because they are invested.

608
00:26:37,640 --> 00:26:40,240
Speaker 2: And so that's something to note is you might need

609
00:26:40,240 --> 00:26:42,080
Speaker 2: to contribute far less in order to get to that

610
00:26:42,119 --> 00:26:45,159
Speaker 2: actual number if you are fully investing that money as

611
00:26:45,200 --> 00:26:48,280
Speaker 2: opposed to it sitting more conservatively. But in your case,

612
00:26:48,280 --> 00:26:51,600
Speaker 2: you're likely going to have something like seventeen ish years

613
00:26:51,640 --> 00:26:54,000
Speaker 2: to grow in the market. When you run the numbers,

614
00:26:54,240 --> 00:26:58,560
Speaker 2: one hundred dollars a month for about eighteen years, that's

615
00:26:58,640 --> 00:27:01,199
Speaker 2: gonna likely be right at that sweet spot of around

616
00:27:01,359 --> 00:27:05,480
Speaker 2: thirty five thousand dollars with compounding returns of five percent

617
00:27:05,600 --> 00:27:09,040
Speaker 2: factored in, which is pretty conservative. So hopefully that puts

618
00:27:09,040 --> 00:27:11,880
Speaker 2: your mind at ease from a budgeting standpoint, because I'm

619
00:27:11,880 --> 00:27:14,240
Speaker 2: not going to say that one hundred bucks a month

620
00:27:14,280 --> 00:27:17,160
Speaker 2: if that's not nothing, but it also seems pretty reasonable

621
00:27:17,280 --> 00:27:21,240
Speaker 2: when considering the insane cost of college and where it's

622
00:27:21,440 --> 00:27:23,640
Speaker 2: likely to go. It's not gonna be enough to put

623
00:27:23,680 --> 00:27:25,600
Speaker 2: the whole bill, no, no, no, a lot of schools

624
00:27:26,119 --> 00:27:29,119
Speaker 2: if there's not major financial aid attached to it. But

625
00:27:29,160 --> 00:27:30,760
Speaker 2: the truth is there are all sorts of ways to

626
00:27:30,760 --> 00:27:34,760
Speaker 2: get financial aid, and oversaving is a potential risk. But

627
00:27:34,840 --> 00:27:36,640
Speaker 2: if that, if that, I like that, Matt, If that's

628
00:27:36,640 --> 00:27:38,879
Speaker 2: your goal thirty five k If that's kind of the

629
00:27:38,880 --> 00:27:40,960
Speaker 2: sweet spot, you're aiming for, well, one hundred bucks a

630
00:27:40,960 --> 00:27:45,359
Speaker 2: month into one of those age based portfolios. That's super

631
00:27:45,359 --> 00:27:47,359
Speaker 2: low cost through a five twenty nine plans can be

632
00:27:47,400 --> 00:27:49,080
Speaker 2: the way to get there. It's kind of a tried

633
00:27:49,080 --> 00:27:51,600
Speaker 2: and true path based on when you run the numbers

634
00:27:51,600 --> 00:27:53,960
Speaker 2: that you're that's that's probably close to where you're going

635
00:27:54,040 --> 00:27:55,760
Speaker 2: to end up, absolutely, and I think that's going to

636
00:27:55,800 --> 00:27:58,000
Speaker 2: give y'all a lot of flexibility and a lot of

637
00:27:58,000 --> 00:27:59,760
Speaker 2: options when it comes to how it is that you're

638
00:27:59,760 --> 00:28:02,240
Speaker 2: going to spend that money. Joel. Let's hear from another

639
00:28:02,280 --> 00:28:04,879
Speaker 2: listener who happens to be from one of my favorite

640
00:28:04,920 --> 00:28:06,520
Speaker 2: cities I like to visit.

641
00:28:06,560 --> 00:28:09,120
Speaker 5: Hi Jola, Matt. This is Trish from Asheville, North Carolina.

642
00:28:09,359 --> 00:28:12,399
Speaker 5: I'm really enjoying your podcast and have learned so much.

643
00:28:12,920 --> 00:28:16,000
Speaker 5: Here's my question. My husband and I soldier house this

644
00:28:16,119 --> 00:28:20,080
Speaker 5: calendar year for an amount higher than the five hundred

645
00:28:20,119 --> 00:28:22,919
Speaker 5: thousand dollars deductible, so we are looking for ways to

646
00:28:22,960 --> 00:28:29,080
Speaker 5: reduce our tax burden. We have discussed contributing the thirty

647
00:28:29,160 --> 00:28:33,480
Speaker 5: thousand times two to our four oh one k slash IRA.

648
00:28:34,240 --> 00:28:40,280
Speaker 5: We have also discussed energy saving ideas for our rental homes.

649
00:28:40,360 --> 00:28:42,120
Speaker 5: We just don't know what the max is on that.

650
00:28:42,520 --> 00:28:45,920
Speaker 5: If you have any other ideas, we would greatly appreciate it.

651
00:28:45,960 --> 00:28:50,160
Speaker 5: We realize we have approximately fifty days to make these decisions.

652
00:28:50,800 --> 00:28:52,680
Speaker 5: Look forward to looking forward to hearing your answers.

653
00:28:52,720 --> 00:28:57,520
Speaker 1: Thanks so much, Matt, Ashville Beer Heaven. It's also Beer City, USA.

654
00:28:57,640 --> 00:28:59,800
Speaker 1: It's a beautiful place, a beautiful part of the country.

655
00:29:00,240 --> 00:29:03,360
Speaker 1: And so yeah, Trish, let's get to your question. You

656
00:29:03,360 --> 00:29:05,600
Speaker 1: mentioned you sold your home for a massive profit, which

657
00:29:05,640 --> 00:29:08,080
Speaker 1: is awesome, and yes, you're going to have a tax bill,

658
00:29:08,120 --> 00:29:10,680
Speaker 1: but really I would consider this a success tax and

659
00:29:10,720 --> 00:29:13,240
Speaker 1: we should discuss exactly how taxes work when you sell

660
00:29:13,240 --> 00:29:15,880
Speaker 1: a home though, because there's a lot of confusion. Basically,

661
00:29:15,920 --> 00:29:18,320
Speaker 1: when you sell a primary home, you actually don't typically

662
00:29:18,320 --> 00:29:21,480
Speaker 1: ow tax on the increase in value unless the value

663
00:29:21,520 --> 00:29:24,520
Speaker 1: has increased substantially. So maybe where you're at in Nashville,

664
00:29:24,680 --> 00:29:27,800
Speaker 1: maybe you bought long enough ago, or the market has

665
00:29:27,880 --> 00:29:31,200
Speaker 1: been so red fiery hot that you've actually managed to

666
00:29:31,600 --> 00:29:35,920
Speaker 1: exceed this number, creating this tax bill. So you mentioned

667
00:29:35,920 --> 00:29:37,840
Speaker 1: that you and your husband pocketed more than five hundred

668
00:29:37,840 --> 00:29:40,320
Speaker 1: thousand dollars in profit, and married folks are going to

669
00:29:40,320 --> 00:29:43,320
Speaker 1: owe tax on profit exceeding that number. Right, Single folks

670
00:29:43,360 --> 00:29:45,640
Speaker 1: are going to owe tax on profit exceeding half of

671
00:29:45,640 --> 00:29:47,960
Speaker 1: that Two hundred and fifty thousand dollars. And by the way,

672
00:29:48,080 --> 00:29:50,800
Speaker 1: the number isn't just over the amount you paid when

673
00:29:50,840 --> 00:29:52,880
Speaker 1: you bought the home. It's in excess of what's known

674
00:29:52,920 --> 00:29:55,520
Speaker 1: as the cost basis. And so your cost basis can

675
00:29:55,560 --> 00:29:59,000
Speaker 1: be increased by including fees and expenses associated with the

676
00:29:59,000 --> 00:30:02,160
Speaker 1: purchase of the home and combined with the home improvements

677
00:30:02,200 --> 00:30:03,480
Speaker 1: you might have made as well.

678
00:30:03,560 --> 00:30:03,920
Speaker 4: That's right.

679
00:30:04,040 --> 00:30:06,760
Speaker 2: Yeah, so not just so we're talking about transaction costs

680
00:30:07,040 --> 00:30:09,320
Speaker 2: when it comes to the purchase and sale of that home,

681
00:30:09,360 --> 00:30:12,840
Speaker 2: but also all the work that you've done along the way.

682
00:30:13,000 --> 00:30:15,200
Speaker 2: Don't disclude that or you're gonna pay too much in

683
00:30:15,240 --> 00:30:19,040
Speaker 2: debt exactly. Yeah, So let's just imagine, and this is, yeah,

684
00:30:19,120 --> 00:30:20,960
Speaker 2: silly hypothetical, but like let's say you about a home

685
00:30:20,960 --> 00:30:23,160
Speaker 2: for one hundred thousand dollars, you sold it for one million,

686
00:30:23,760 --> 00:30:26,800
Speaker 2: well married and single folks are going to have a

687
00:30:26,840 --> 00:30:29,680
Speaker 2: pretty large tax bill. Let's say if you bought it

688
00:30:29,720 --> 00:30:31,560
Speaker 2: for one hundred thousand dollars, let's say you put four

689
00:30:31,680 --> 00:30:34,680
Speaker 2: hundred thousand dollars into it. In that case, married folks

690
00:30:34,720 --> 00:30:38,080
Speaker 2: would still be able to sell that property without incurring

691
00:30:38,120 --> 00:30:41,320
Speaker 2: any tax bill whatsoever. And so hopefully you you do

692
00:30:41,400 --> 00:30:43,800
Speaker 2: have good records of any of the work, any of

693
00:30:43,800 --> 00:30:46,720
Speaker 2: the improvements that you've made, because by proving that you've

694
00:30:46,760 --> 00:30:49,280
Speaker 2: increased the cost basis of your home, which is what

695
00:30:49,280 --> 00:30:51,920
Speaker 2: you're doing, by keeping track of those expenses, you're able

696
00:30:51,960 --> 00:30:54,920
Speaker 2: to decrease the ultimate capital gains that you're gonna have

697
00:30:54,960 --> 00:30:55,320
Speaker 2: to pay.

698
00:30:55,360 --> 00:30:57,280
Speaker 1: So, for instance, Matt, the house that we moved from

699
00:30:57,400 --> 00:30:59,280
Speaker 1: when we moved up here to the Burbs, what last

700
00:30:59,320 --> 00:31:03,000
Speaker 1: summer we had put a significant amount of money into

701
00:31:03,040 --> 00:31:05,800
Speaker 1: the home remodeling it. Right now, it's a rental property.

702
00:31:05,840 --> 00:31:08,600
Speaker 1: At some point we'll sell it, but that big chunk

703
00:31:08,600 --> 00:31:10,840
Speaker 1: of money that we threw into the home, well, that's

704
00:31:10,880 --> 00:31:13,720
Speaker 1: going to help reduce capital gains cost that we might

705
00:31:13,760 --> 00:31:15,800
Speaker 1: have on that home. If it sells for more than

706
00:31:15,840 --> 00:31:16,600
Speaker 1: we think it would.

707
00:31:16,360 --> 00:31:17,640
Speaker 2: Are you going to sell it? That's actually that's the

708
00:31:17,680 --> 00:31:19,520
Speaker 2: big question. That's a big question too, because that's so

709
00:31:19,520 --> 00:31:21,959
Speaker 2: I mean, we did I don't know the answer, we

710
00:31:22,000 --> 00:31:24,600
Speaker 2: did sell ours? And the ability to go back this

711
00:31:24,680 --> 00:31:26,400
Speaker 2: is why it pays to be a money nerd, right,

712
00:31:26,400 --> 00:31:28,600
Speaker 2: The ability to go back and look at Excel docs

713
00:31:28,440 --> 00:31:30,880
Speaker 2: and see not only how much we paid on each

714
00:31:30,920 --> 00:31:32,800
Speaker 2: one of these different projects in a renovation, but then

715
00:31:32,840 --> 00:31:34,720
Speaker 2: to be able to add that up and realize, oh wow,

716
00:31:34,800 --> 00:31:37,240
Speaker 2: we had a lot into that home. The ability to

717
00:31:37,360 --> 00:31:40,320
Speaker 2: prove that we did not exceed that five hundred thousand

718
00:31:40,320 --> 00:31:43,120
Speaker 2: dollars as a married couple was huge. Yeah. Yeah, it's

719
00:31:43,160 --> 00:31:47,040
Speaker 2: just a massive benefit that is worth seriously worth looking at,

720
00:31:47,120 --> 00:31:49,240
Speaker 2: seriously worth considering, and it's a part of why the

721
00:31:49,240 --> 00:31:52,800
Speaker 2: IRS only allows folks to do that every two years. Yeah,

722
00:31:52,840 --> 00:31:56,240
Speaker 2: it's less of a concern now that home values have

723
00:31:56,360 --> 00:31:58,360
Speaker 2: kind of tapered off a little bit, But over the

724
00:31:58,360 --> 00:32:02,200
Speaker 2: past decade, the dramatic rise and prices, I mean, folks

725
00:32:02,240 --> 00:32:04,920
Speaker 2: were looking to maximize this benefit. And if they had

726
00:32:04,960 --> 00:32:08,560
Speaker 2: the ability to move every year and pocket a bunch

727
00:32:08,560 --> 00:32:10,760
Speaker 2: of money after doing renovations and then selling that home,

728
00:32:10,800 --> 00:32:11,320
Speaker 2: I think they would have.

729
00:32:11,400 --> 00:32:13,040
Speaker 1: Well, this is where live in flips, like what our

730
00:32:13,040 --> 00:32:16,000
Speaker 1: friend Carl does, one hundred percent can be depending on

731
00:32:16,160 --> 00:32:18,240
Speaker 1: how the market goes, marketing conditions where you live, and

732
00:32:18,600 --> 00:32:21,880
Speaker 1: how good you are at DIY craftsmanship around the house.

733
00:32:22,000 --> 00:32:23,880
Speaker 1: This can be one of those great ways to make

734
00:32:24,160 --> 00:32:26,720
Speaker 1: tax free income. And it's something he's done. We talked

735
00:32:26,760 --> 00:32:28,680
Speaker 1: with him. I don't remember what episode that was about

736
00:32:28,680 --> 00:32:30,960
Speaker 1: that like in depth, and it's something he's lead to

737
00:32:31,000 --> 00:32:33,960
Speaker 1: it really really well with over the years. But okay,

738
00:32:34,040 --> 00:32:37,600
Speaker 1: let's talk about maybe lowering lessening the tax bill. Besides

739
00:32:37,800 --> 00:32:39,840
Speaker 1: just thinking about the cost basis and looking at the

740
00:32:40,080 --> 00:32:42,400
Speaker 1: exact amount of money you've stuck in to improve that

741
00:32:42,440 --> 00:32:45,480
Speaker 1: home or the fees regarding buying and selling the home,

742
00:32:45,520 --> 00:32:48,000
Speaker 1: but capital losses from other investments can be used to

743
00:32:48,000 --> 00:32:50,440
Speaker 1: offset the capital gains from the sale of your home too.

744
00:32:50,800 --> 00:32:53,560
Speaker 1: So let's say, just hypothetical here, he bought bitcoin at

745
00:32:53,600 --> 00:32:55,440
Speaker 1: the top. Right, you've been looking for an excuse to

746
00:32:55,520 --> 00:32:57,760
Speaker 1: dump it. Now might be a great time to sell

747
00:32:57,840 --> 00:33:00,440
Speaker 1: right and take a loss because it'll save you moneycomme

748
00:33:00,480 --> 00:33:02,800
Speaker 1: tax time, and it's allowing you to get rid of

749
00:33:02,880 --> 00:33:05,600
Speaker 1: an investment you no longer have much use for. Right

750
00:33:05,720 --> 00:33:08,240
Speaker 1: helps you to cancel out some of the positive capital

751
00:33:08,280 --> 00:33:10,880
Speaker 1: gains from the house sale that you're going to see.

752
00:33:11,040 --> 00:33:13,600
Speaker 1: So it's a way of having that tax break be

753
00:33:13,640 --> 00:33:14,840
Speaker 1: the gift that keeps on giving.

754
00:33:14,920 --> 00:33:17,760
Speaker 2: I guess something like that. That's the silver lining for

755
00:33:17,920 --> 00:33:20,720
Speaker 2: having bought bitcoin at the top. But when it comes to.

756
00:33:20,800 --> 00:33:22,880
Speaker 1: The trish showing that money move right, but at least

757
00:33:22,880 --> 00:33:24,120
Speaker 1: it's saving you a little bit on taxes.

758
00:33:24,240 --> 00:33:28,360
Speaker 2: Yeah, So the large capital gains that she's experienced, let's

759
00:33:28,360 --> 00:33:32,200
Speaker 2: say you exceed that five hundred thousand dollars like Trish has, Well,

760
00:33:32,240 --> 00:33:35,680
Speaker 2: you're not paying ordinary income taxes on those gains either.

761
00:33:35,760 --> 00:33:39,840
Speaker 2: You're actually paying long term capital gains that tax rates

762
00:33:39,880 --> 00:33:45,280
Speaker 2: typically at fifteen percent. So in that semi extreme hypothetical

763
00:33:45,440 --> 00:33:48,520
Speaker 2: one hundred thousand to a million dollars example, the gain

764
00:33:48,640 --> 00:33:51,360
Speaker 2: is four hundred thousand dollars, Well, the tax bill would

765
00:33:51,360 --> 00:33:55,760
Speaker 2: simply be sixty thousand dollars. And that's actually that's relatively

766
00:33:55,760 --> 00:33:58,880
Speaker 2: good news because lots of high earners who are selling

767
00:33:58,920 --> 00:34:01,360
Speaker 2: an expensive home that has seen a lot of appreciation,

768
00:34:01,760 --> 00:34:04,280
Speaker 2: or often in a higher tax bracket, it might be.

769
00:34:04,680 --> 00:34:06,880
Speaker 1: Double that or something on some of those dollars, and

770
00:34:06,920 --> 00:34:09,520
Speaker 1: so the long term capital gains rate is more favorable.

771
00:34:09,600 --> 00:34:12,640
Speaker 2: Yeah, and Trish mentioned socking more money into tax advantage

772
00:34:12,640 --> 00:34:15,840
Speaker 2: retirement accounts those that's a move that we're always going

773
00:34:15,920 --> 00:34:18,719
Speaker 2: to be behind, the ability to reduce your agi your

774
00:34:18,760 --> 00:34:21,040
Speaker 2: tax burden in that way. But as far as making

775
00:34:21,040 --> 00:34:24,560
Speaker 2: some of those green upgrades to different rental properties, that could, again,

776
00:34:24,840 --> 00:34:27,880
Speaker 2: given the different tax incentives that the government has dangled

777
00:34:27,920 --> 00:34:30,480
Speaker 2: in front of us, especially folks who have who own homes,

778
00:34:31,040 --> 00:34:33,960
Speaker 2: and the desire for some folks to want to shift

779
00:34:34,040 --> 00:34:38,560
Speaker 2: towards greener energy upgrades. That could be a good way

780
00:34:38,600 --> 00:34:42,120
Speaker 2: to pay less in tax. But I wouldn't necessarily pursue

781
00:34:42,160 --> 00:34:45,120
Speaker 2: those things unless that is something that you ultimately want

782
00:34:45,160 --> 00:34:47,160
Speaker 2: to like that the improvements that you know you need

783
00:34:47,200 --> 00:34:50,000
Speaker 2: to make anyway, So I wouldn't necessarily, I guess, go

784
00:34:50,040 --> 00:34:51,799
Speaker 2: out of my way to make some of those improvements.

785
00:34:51,880 --> 00:34:54,040
Speaker 2: But if that's something you were already planning to do,

786
00:34:54,080 --> 00:34:56,560
Speaker 2: I think that can definitely be some a great tax

787
00:34:56,680 --> 00:34:59,160
Speaker 2: saving move to make as well. But that being said,

788
00:34:59,160 --> 00:35:03,000
Speaker 2: actually got to keep in mind the particulars of the

789
00:35:04,239 --> 00:35:06,040
Speaker 2: all of all the different things that were rolled into

790
00:35:06,080 --> 00:35:08,680
Speaker 2: the Inflation Reduction Act, which is where some of these

791
00:35:08,719 --> 00:35:12,200
Speaker 2: green energy credits come from. A lot of them only

792
00:35:12,239 --> 00:35:16,319
Speaker 2: apply to your primary residents, not necessarily to rentals, and

793
00:35:16,360 --> 00:35:19,000
Speaker 2: so it kind of it's a whole other can of worms.

794
00:35:19,040 --> 00:35:20,799
Speaker 1: I guess you're not going to get at that extra

795
00:35:20,880 --> 00:35:22,160
Speaker 1: sweet thirty percent bonus.

796
00:35:22,239 --> 00:35:23,960
Speaker 2: Like, yeah, like I did a couple of those.

797
00:35:23,840 --> 00:35:25,480
Speaker 1: Things actually this year, Matt, we put in like one

798
00:35:25,480 --> 00:35:27,120
Speaker 1: of those Douglas mini splits.

799
00:35:26,840 --> 00:35:28,239
Speaker 2: And we did.

800
00:35:28,480 --> 00:35:30,640
Speaker 1: They paid you to stick that thing, right, we did

801
00:35:30,680 --> 00:35:33,600
Speaker 1: some extra insulation. No, it's still costing money, not quite. Yeah,

802
00:35:33,680 --> 00:35:35,960
Speaker 1: but the federal government is definitely lifting thirty percent of

803
00:35:35,960 --> 00:35:38,520
Speaker 1: that load, which is which is nice. So, but the

804
00:35:38,760 --> 00:35:41,359
Speaker 1: problem is it doesn't work the same way. If you're

805
00:35:41,360 --> 00:35:43,240
Speaker 1: a landlord trying to do that to a rental property,

806
00:35:43,520 --> 00:35:46,360
Speaker 1: you don't qualify for the same tax credits. It's important

807
00:35:46,400 --> 00:35:47,120
Speaker 1: to note that.

808
00:35:47,120 --> 00:35:49,759
Speaker 2: That's right. Cool, We've got more to get to, including

809
00:35:49,880 --> 00:35:52,480
Speaker 2: we're going to talk about a listener who has recently

810
00:35:52,480 --> 00:35:55,239
Speaker 2: found herself in possession of more money than she thought.

811
00:35:55,320 --> 00:36:06,239
Speaker 2: We'll get to that plus another right after this. All right, Matt,

812
00:36:06,239 --> 00:36:06,520
Speaker 2: we're back.

813
00:36:06,520 --> 00:36:08,279
Speaker 1: We've got more money save me content to cover on

814
00:36:08,480 --> 00:36:11,200
Speaker 1: this episode. And you mentioned a listener has more money

815
00:36:11,200 --> 00:36:11,600
Speaker 1: than she thought.

816
00:36:11,640 --> 00:36:13,600
Speaker 2: She didn't like mug anybody and anything, did you. Yeah, no, no, No,

817
00:36:13,640 --> 00:36:15,279
Speaker 2: that's not how to money. Recommended it. And it's more

818
00:36:15,320 --> 00:36:17,680
Speaker 2: than finding a twenty in the winter jacket that she

819
00:36:17,719 --> 00:36:19,799
Speaker 2: recently pulled out of the closet. More than that. Yeah.

820
00:36:19,840 --> 00:36:21,160
Speaker 1: No, it's a good one, and it's I think a

821
00:36:21,200 --> 00:36:22,960
Speaker 1: trick that a lot of people can use to their advantage.

822
00:36:23,000 --> 00:36:25,000
Speaker 1: But in this section of the podcast, we're going to

823
00:36:25,040 --> 00:36:26,880
Speaker 1: cover a Facebook question in a week, but also like

824
00:36:27,080 --> 00:36:29,360
Speaker 1: we get some really good emails sometimes, Matt and so

825
00:36:29,640 --> 00:36:31,640
Speaker 1: listener Courtney sent this via email. She said, I'm a

826
00:36:31,680 --> 00:36:35,319
Speaker 1: little surprised I haven't ever once heard you mentioned long

827
00:36:35,440 --> 00:36:37,919
Speaker 1: term disability insurance. Of course I haven't listened to every

828
00:36:37,920 --> 00:36:40,080
Speaker 1: back episode, so you probably have at some point. I've

829
00:36:40,080 --> 00:36:42,759
Speaker 1: heard you mentioned life insurance many times though, but never

830
00:36:42,880 --> 00:36:46,200
Speaker 1: long term disability, which is interesting because it's probably as important,

831
00:36:46,239 --> 00:36:48,560
Speaker 1: if not more, if you become disabled and lose your

832
00:36:48,560 --> 00:36:51,080
Speaker 1: ability to earn. It's not just your dependence that are screwed,

833
00:36:51,120 --> 00:36:54,160
Speaker 1: but also you yourself. And there's often a ton of

834
00:36:54,200 --> 00:36:58,120
Speaker 1: new expenses when you become disabled, medical costs, home modifications,

835
00:36:58,320 --> 00:37:03,680
Speaker 1: plus things that were once luxuries like grocery delivery become essential. So, Matt,

836
00:37:03,880 --> 00:37:07,400
Speaker 1: I think Courtney her statement not a question here is

837
00:37:07,560 --> 00:37:09,360
Speaker 1: really helpful for all of us, for you and me

838
00:37:09,400 --> 00:37:11,480
Speaker 1: and for how to Money listeners. I mean, basically, she

839
00:37:11,560 --> 00:37:13,799
Speaker 1: mentions that she was suddenly disabled in this email by

840
00:37:13,840 --> 00:37:16,520
Speaker 1: a chronic illness and then it decimated her finances, and

841
00:37:16,560 --> 00:37:18,440
Speaker 1: she said I tell my friends all the time to

842
00:37:18,440 --> 00:37:21,239
Speaker 1: make sure they get long term disability insurance. And I

843
00:37:21,239 --> 00:37:22,719
Speaker 1: think she spot on. It's something that you and I

844
00:37:22,800 --> 00:37:26,680
Speaker 1: have covered just rarely, just highly infrequently.

845
00:37:26,160 --> 00:37:28,440
Speaker 2: And it's probably something we should mention more. Yeah, and Corney,

846
00:37:28,440 --> 00:37:31,239
Speaker 2: I hate that you've gone through both the physical and

847
00:37:31,280 --> 00:37:34,760
Speaker 2: the financial pain of this disability. And it's true life insurance.

848
00:37:34,920 --> 00:37:38,120
Speaker 2: It gets all of the press, largely because literally everyone

849
00:37:38,200 --> 00:37:40,839
Speaker 2: will die at some point. So because of that, it's

850
00:37:41,000 --> 00:37:43,560
Speaker 2: understandably on our radar. More were Actually we.

851
00:37:43,600 --> 00:37:45,600
Speaker 1: Talked to Old Testament earlier, Matt. There are a couple

852
00:37:45,600 --> 00:37:47,640
Speaker 1: of guys in the Old Testament who didn't die, right,

853
00:37:47,719 --> 00:37:50,160
Speaker 1: So that's true, I guess if you're one of the

854
00:37:50,160 --> 00:37:50,479
Speaker 1: the four.

855
00:37:51,320 --> 00:37:53,640
Speaker 2: But there are a decent chunk of folks who are

856
00:37:53,680 --> 00:37:56,840
Speaker 2: going to become disabled, and so because of that, disability

857
00:37:56,880 --> 00:38:00,040
Speaker 2: insurance should at least be a real consideration for a

858
00:37:59,880 --> 00:38:03,400
Speaker 2: lot of folks. Stats show that a quarter of Americans

859
00:38:03,560 --> 00:38:06,920
Speaker 2: are going to experience a disability, a disability you can't

860
00:38:06,960 --> 00:38:09,279
Speaker 2: even say that, right, that keeps them out of work

861
00:38:09,440 --> 00:38:12,680
Speaker 2: for three months or longer. And like your situation, Courtney,

862
00:38:12,800 --> 00:38:16,640
Speaker 2: most of those come from an illness, not necessarily an accident,

863
00:38:16,640 --> 00:38:19,520
Speaker 2: which means that we're all vulnerable it's not just the

864
00:38:19,560 --> 00:38:22,960
Speaker 2: folks who happen to enjoy skydiving or something like that.

865
00:38:23,400 --> 00:38:26,560
Speaker 2: And so while your workplace might offer some kind of

866
00:38:26,719 --> 00:38:31,280
Speaker 2: disability insurance, it's oftentimes usually short term. And I'm glad

867
00:38:31,320 --> 00:38:33,200
Speaker 2: that this is something that you've brought to our attention.

868
00:38:33,640 --> 00:38:36,279
Speaker 2: It's a good time to talk about long term disability

869
00:38:36,320 --> 00:38:36,560
Speaker 2: for sure.

870
00:38:36,600 --> 00:38:38,040
Speaker 1: Yeah, if you're a W two or you might have

871
00:38:38,080 --> 00:38:40,000
Speaker 1: some coverage, it's still probably not enough. If you work

872
00:38:40,040 --> 00:38:44,600
Speaker 1: for yourself or you are a freelancer, the chance you

873
00:38:44,680 --> 00:38:46,439
Speaker 1: don't have any coverage and you've got to go, Yeah,

874
00:38:46,480 --> 00:38:48,560
Speaker 1: you got to go buy it on the open marketplace.

875
00:38:48,920 --> 00:38:51,400
Speaker 1: And because of how much savings, by the way, we

876
00:38:51,440 --> 00:38:54,480
Speaker 1: want our listeners to have on hand, it's likely unnecessary

877
00:38:54,480 --> 00:38:56,879
Speaker 1: for most how to Money listeners, if you follow through

878
00:38:56,880 --> 00:38:59,680
Speaker 1: on that, to have a short term disability policy.

879
00:39:00,000 --> 00:39:01,680
Speaker 2: Were talking about the one with a duck.

880
00:39:01,880 --> 00:39:04,399
Speaker 1: Yeah, right, Yet you don't want that one. That one

881
00:39:04,400 --> 00:39:06,840
Speaker 1: costs typically a lot of money, and we'd rather have

882
00:39:06,960 --> 00:39:09,600
Speaker 1: you have savings on hand to avoid some sort of

883
00:39:09,600 --> 00:39:12,960
Speaker 1: short term disability claim. Long term disability, though, is different, right,

884
00:39:13,080 --> 00:39:15,759
Speaker 1: It's far more necessary. And it's important to mention that

885
00:39:15,800 --> 00:39:19,080
Speaker 1: these policies aren't inexpensive, right, They're not cheap, but you

886
00:39:19,160 --> 00:39:22,080
Speaker 1: can shop on a site like policy genius. But you're

887
00:39:22,080 --> 00:39:24,560
Speaker 1: typically talking about spending somewhere in the neighborhood of one

888
00:39:24,600 --> 00:39:26,840
Speaker 1: to three percent of your annual income to pay for

889
00:39:26,920 --> 00:39:30,160
Speaker 1: this policy. And again that's because there are so many claims,

890
00:39:30,360 --> 00:39:32,000
Speaker 1: so something like one in four or one in five

891
00:39:32,040 --> 00:39:35,400
Speaker 1: people are actually finding themselves in need of this insurance.

892
00:39:35,400 --> 00:39:38,880
Speaker 1: That's why it's not quite as cheap. One other insurance policy,

893
00:39:38,920 --> 00:39:41,200
Speaker 1: although it's not fool proof though, is to have more

894
00:39:41,239 --> 00:39:43,960
Speaker 1: cash on hand in savings. Right, so instead of having

895
00:39:43,960 --> 00:39:46,480
Speaker 1: three to four months worth of living expenses, knowing the

896
00:39:46,520 --> 00:39:49,560
Speaker 1: expensive reality that a disability could create in your life,

897
00:39:49,640 --> 00:39:51,239
Speaker 1: you might want to save like ten to twelve months

898
00:39:51,280 --> 00:39:54,040
Speaker 1: up instead. It's not going to be as robust of

899
00:39:54,080 --> 00:39:57,920
Speaker 1: a financial backstop, but I really do think, yeah, savings

900
00:39:57,960 --> 00:39:59,640
Speaker 1: alone isn't going to cut it for a whole lot

901
00:39:59,640 --> 00:40:02,080
Speaker 1: of people. On this front, it's nice to have more savings.

902
00:40:02,120 --> 00:40:04,640
Speaker 1: It's nice in particular to be able to self insure

903
00:40:04,680 --> 00:40:08,280
Speaker 1: against short term disability. When it comes to long term disability,

904
00:40:08,360 --> 00:40:11,000
Speaker 1: if you can't do the job that you're currently doing

905
00:40:11,320 --> 00:40:14,000
Speaker 1: because of some sort of illness, that besets you for

906
00:40:14,160 --> 00:40:17,280
Speaker 1: years and years on end, that long term disability policy

907
00:40:17,360 --> 00:40:19,840
Speaker 1: is going to become priceless. You're going to be thrilled

908
00:40:20,120 --> 00:40:23,560
Speaker 1: actually that you paid those semi expensive premiums because of

909
00:40:23,560 --> 00:40:25,640
Speaker 1: what it affords you in the aftermath of one of

910
00:40:25,640 --> 00:40:26,280
Speaker 1: those accidents.

911
00:40:26,640 --> 00:40:28,920
Speaker 2: That's right. Yeah, So that being said, this might be

912
00:40:28,960 --> 00:40:32,080
Speaker 2: an instance where we ask you to do what we

913
00:40:32,160 --> 00:40:35,000
Speaker 2: say and not what we do what we do because

914
00:40:35,040 --> 00:40:39,120
Speaker 2: it oftentimes comes down to risk and your willingness to

915
00:40:39,200 --> 00:40:42,640
Speaker 2: accept that risk. And I say that as a podcaster

916
00:40:43,640 --> 00:40:45,879
Speaker 2: like we basically joel you and I, like we are

917
00:40:45,880 --> 00:40:48,960
Speaker 2: in the knowledge knowledge work is basically what we do.

918
00:40:49,600 --> 00:40:52,840
Speaker 2: Our jobs aren't specifically tied to our physical ability oftentimes

919
00:40:52,880 --> 00:40:56,600
Speaker 2: to do the work that we do. Where we become disabled, injured, sick,

920
00:40:56,680 --> 00:40:58,440
Speaker 2: there's a good chance that I would be able to

921
00:40:58,480 --> 00:41:02,200
Speaker 2: continue to podcast, which is my main gig these days.

922
00:41:02,840 --> 00:41:04,759
Speaker 2: And so something for folks out there to consider is

923
00:41:04,920 --> 00:41:08,440
Speaker 2: how dependent on your physical movement is the work that

924
00:41:08,480 --> 00:41:10,400
Speaker 2: you do. So, for instance, like if you are a

925
00:41:10,400 --> 00:41:14,600
Speaker 2: physical therapist or like a coach or even a homebuilder

926
00:41:14,680 --> 00:41:16,480
Speaker 2: of high end homes that requires you to be there

927
00:41:16,480 --> 00:41:19,959
Speaker 2: in person, your ability to move around and physically lift

928
00:41:19,960 --> 00:41:22,439
Speaker 2: things up and all the things that you do swring

929
00:41:22,480 --> 00:41:26,720
Speaker 2: a hammer, it's going to require you to be physically well.

930
00:41:27,160 --> 00:41:29,680
Speaker 2: And in that instance, I could see long term disability

931
00:41:29,680 --> 00:41:32,319
Speaker 2: being something that someone in that position would want to

932
00:41:32,360 --> 00:41:35,479
Speaker 2: prioritize more. But I also think about too, like why

933
00:41:35,520 --> 00:41:38,239
Speaker 2: else haven't I personally gotten long term disability? And it's

934
00:41:38,239 --> 00:41:42,600
Speaker 2: also because of my relational status. I've got a wife, Kate,

935
00:41:43,040 --> 00:41:45,520
Speaker 2: and were I to become disabled, I would one hundred

936
00:41:45,520 --> 00:41:48,200
Speaker 2: percent know that she would be more than willing to

937
00:41:48,600 --> 00:41:51,520
Speaker 2: work and to basically for me to fall back on.

938
00:41:51,600 --> 00:41:54,120
Speaker 2: And the ability for her to earn some income when

939
00:41:54,160 --> 00:41:56,400
Speaker 2: I may not be able to is sort of another

940
00:41:56,440 --> 00:41:59,520
Speaker 2: way that I am personally able to assume some of

941
00:41:59,520 --> 00:42:01,719
Speaker 2: that races. If you're single, you have even more risk

942
00:42:01,760 --> 00:42:03,799
Speaker 2: in this m Yeah, right, one hundred percent. And so

943
00:42:04,360 --> 00:42:06,680
Speaker 2: those are just a couple instances. I guess too. If

944
00:42:06,719 --> 00:42:09,080
Speaker 2: you are an individual where you make a ton of

945
00:42:09,120 --> 00:42:12,480
Speaker 2: money and your partner doesn't have the ability to come

946
00:42:12,520 --> 00:42:14,960
Speaker 2: anywhere near matching what it is that you're making, Like

947
00:42:15,000 --> 00:42:18,480
Speaker 2: if you are like a heart surgeon or something like that, Okay,

948
00:42:18,520 --> 00:42:20,080
Speaker 2: that might be something that you might want to consider

949
00:42:20,080 --> 00:42:25,000
Speaker 2: because your ability to earn a large income is unparalleled. Yeah,

950
00:42:25,040 --> 00:42:27,640
Speaker 2: and so the ability to offset that with some long

951
00:42:27,719 --> 00:42:30,759
Speaker 2: term disability would probably be a lot money well spent.

952
00:42:30,880 --> 00:42:31,040
Speaker 4: Yeah.

953
00:42:31,040 --> 00:42:32,600
Speaker 1: And so even though we read the stat you're right,

954
00:42:32,640 --> 00:42:34,279
Speaker 1: like one in four people is going to experience some

955
00:42:34,320 --> 00:42:36,960
Speaker 1: sort of disability that could impact their ability to make

956
00:42:37,080 --> 00:42:40,120
Speaker 1: make an income. That risk also varies depending on what

957
00:42:40,160 --> 00:42:42,560
Speaker 1: you do and all the above, Right.

958
00:42:42,480 --> 00:42:45,440
Speaker 2: But kind of maybe how scrappy your mindset is as well,

959
00:42:45,440 --> 00:42:46,920
Speaker 2: because I feel like there might be some folks who

960
00:42:47,000 --> 00:42:49,200
Speaker 2: think this is all I ever have one wanted to do,

961
00:42:49,560 --> 00:42:51,480
Speaker 2: Whereas I guess my background, I think of all the

962
00:42:51,520 --> 00:42:53,640
Speaker 2: different kind of jobs and industries that I've been in,

963
00:42:53,680 --> 00:42:56,359
Speaker 2: and I think, Okay, if I for some reason could

964
00:42:56,360 --> 00:42:58,959
Speaker 2: no longer talk, I'll find something else to do. Yeah,

965
00:42:58,960 --> 00:43:01,400
Speaker 2: you'd have to find a new best Budy, But uh,

966
00:43:01,600 --> 00:43:03,879
Speaker 2: I've got some of the good luck with that. Yeah,

967
00:43:03,920 --> 00:43:06,000
Speaker 2: I just I I because.

968
00:43:05,600 --> 00:43:08,080
Speaker 1: This is like one of those things, like Courtney said,

969
00:43:08,120 --> 00:43:10,560
Speaker 1: like it's unexpected, right, and sure, and there are additional

970
00:43:10,600 --> 00:43:13,040
Speaker 1: costs that you incur before you just kind of dismiss

971
00:43:13,080 --> 00:43:14,200
Speaker 1: it out of hand. I think a lot of people

972
00:43:14,200 --> 00:43:17,440
Speaker 1: should at least consider it and seriously considered it, consider it. Yeah,

973
00:43:17,480 --> 00:43:19,880
Speaker 1: And when you're looking into policy, by the way, know

974
00:43:19,960 --> 00:43:22,160
Speaker 1: the details of any of the policy the policies that

975
00:43:22,200 --> 00:43:24,400
Speaker 1: you're considering purchasing. Right, there are lots of specifics that

976
00:43:24,440 --> 00:43:26,640
Speaker 1: are crucial to understand, like whether or not you're going

977
00:43:26,680 --> 00:43:28,879
Speaker 1: to be covered by an inability to do your current

978
00:43:28,960 --> 00:43:31,879
Speaker 1: job or whether the insurance company will you know, want

979
00:43:31,920 --> 00:43:34,919
Speaker 1: to ensure that your injury prevents you from doing any job.

980
00:43:35,160 --> 00:43:37,960
Speaker 1: So there are different classifications you probably want the kind

981
00:43:37,960 --> 00:43:40,359
Speaker 1: of insurance it'll probably cost a little bit more where

982
00:43:40,400 --> 00:43:43,600
Speaker 1: the insurance company says, oh, you became disabled, well the

983
00:43:43,640 --> 00:43:44,840
Speaker 1: way to think and we think you can do this

984
00:43:44,920 --> 00:43:47,160
Speaker 1: job over here, and you're like, but now what, no,

985
00:43:47,400 --> 00:43:49,640
Speaker 1: Like that's not that's that That can be a sticking

986
00:43:49,680 --> 00:43:52,279
Speaker 1: point in some of these policies. Also, know how long

987
00:43:52,320 --> 00:43:53,920
Speaker 1: the payments are going to last, Right, is this covered

988
00:43:53,960 --> 00:43:57,319
Speaker 1: for five years or until you reach retirement age? And uh, yeah,

989
00:43:57,360 --> 00:44:00,520
Speaker 1: so you can. You can also get long term disability

990
00:44:00,520 --> 00:44:03,279
Speaker 1: insurance via your employer, but there are some downsides to that,

991
00:44:03,320 --> 00:44:07,359
Speaker 1: including a tax downside. But another downside is not being

992
00:44:07,400 --> 00:44:09,640
Speaker 1: able to take it with you when you leave. So

993
00:44:09,680 --> 00:44:12,120
Speaker 1: we would say shop on the open market through an

994
00:44:12,120 --> 00:44:14,319
Speaker 1: aggregator site like policy Genius. That's going to be the

995
00:44:14,320 --> 00:44:17,840
Speaker 1: best way to score one of these long term disability policies.

996
00:44:17,960 --> 00:44:21,719
Speaker 2: Yeah, yeah, and you mentioned how long that benefit lasts.

997
00:44:22,160 --> 00:44:23,359
Speaker 2: One of the other ways you can get the cost

998
00:44:23,400 --> 00:44:26,080
Speaker 2: down to is by there's this thing called the elimination period,

999
00:44:26,120 --> 00:44:28,920
Speaker 2: which is the period of time from when you get

1000
00:44:28,920 --> 00:44:32,480
Speaker 2: disabled to before the benefits kick in. And oftentimes it's

1001
00:44:32,480 --> 00:44:35,160
Speaker 2: sort of like a premium I'm sorry, you're deductible, like

1002
00:44:35,200 --> 00:44:37,359
Speaker 2: on car insurance, and by default, oftentimes it's set really

1003
00:44:37,400 --> 00:44:39,880
Speaker 2: low because that's what looks attractive, but it's also what

1004
00:44:40,000 --> 00:44:42,479
Speaker 2: costs the most. Same thing is true when it comes

1005
00:44:42,480 --> 00:44:46,239
Speaker 2: to these elimination periods, where oftentimes the default will be

1006
00:44:46,320 --> 00:44:48,160
Speaker 2: thirty days, but if you can triple that and you

1007
00:44:48,200 --> 00:44:50,200
Speaker 2: bump that out to ninety days, all of a sudden,

1008
00:44:50,320 --> 00:44:53,600
Speaker 2: your monthly premiums go down significantly. So if it is

1009
00:44:53,600 --> 00:44:57,080
Speaker 2: something that you say that is not a risk, I'm

1010
00:44:57,080 --> 00:44:59,160
Speaker 2: willing to assume I do want to get long term disability.

1011
00:44:59,400 --> 00:45:01,520
Speaker 2: There are way like that where you are able to

1012
00:45:01,520 --> 00:45:04,680
Speaker 2: get the cost down to ward's not as egregiously extensive.

1013
00:45:04,680 --> 00:45:06,800
Speaker 1: That's where you want that combo of like self insuring

1014
00:45:06,800 --> 00:45:08,279
Speaker 1: you want skin in the game, because that's going to

1015
00:45:08,280 --> 00:45:10,719
Speaker 1: reduce your cost on the insurance that you might actually need.

1016
00:45:10,800 --> 00:45:13,439
Speaker 1: So Courney, thank you for your email. Thank you for

1017
00:45:13,600 --> 00:45:15,480
Speaker 1: reminding us to talk about this because we don't talk

1018
00:45:15,480 --> 00:45:18,279
Speaker 1: about it often enough. And good luck to all you

1019
00:45:18,280 --> 00:45:21,560
Speaker 1: had the money listeners out there looking into these long

1020
00:45:21,640 --> 00:45:24,160
Speaker 1: term disability policies, and Matt, let's do one thing, one

1021
00:45:24,200 --> 00:45:26,760
Speaker 1: last thing real quick. On Facebook this week, Jessica mentioned

1022
00:45:27,120 --> 00:45:29,520
Speaker 1: PSA to anyone new to budgeting like me. I just

1023
00:45:29,560 --> 00:45:31,880
Speaker 1: discovered that since my husband gets paid every other Friday,

1024
00:45:32,040 --> 00:45:34,320
Speaker 1: there are two months every year where he gets paid

1025
00:45:34,560 --> 00:45:36,640
Speaker 1: three times. Game changing revelation.

1026
00:45:36,760 --> 00:45:38,400
Speaker 2: So there's not a ton here to say, except for

1027
00:45:38,440 --> 00:45:41,719
Speaker 2: the fact that using an idiosyncrasy like this to your

1028
00:45:41,760 --> 00:45:44,359
Speaker 2: financial advantage, it just makes a lot of sense. It's

1029
00:45:44,360 --> 00:45:48,040
Speaker 2: purely a psychological play, because why not use that a

1030
00:45:48,040 --> 00:45:50,040
Speaker 2: regular pay cycle as a way to beef up your

1031
00:45:50,040 --> 00:45:53,200
Speaker 2: savings or even just to make a lump sum contribution

1032
00:45:53,480 --> 00:45:57,440
Speaker 2: to your retirement account. You can either plan for it,

1033
00:45:57,480 --> 00:45:59,440
Speaker 2: which is kind of the boring way, and plus that's

1034
00:45:59,480 --> 00:46:02,279
Speaker 2: kind of difficult to do when you're budgeting these two

1035
00:46:02,560 --> 00:46:04,600
Speaker 2: odd months where you get paid a little bit more,

1036
00:46:05,000 --> 00:46:08,239
Speaker 2: or you pretend it doesn't even exists. You plan and

1037
00:46:08,280 --> 00:46:10,960
Speaker 2: you budget based on the typical months, and then whenever

1038
00:46:11,000 --> 00:46:13,320
Speaker 2: that additional money does get infused into your account, you

1039
00:46:13,360 --> 00:46:16,000
Speaker 2: can take that money and use it towards achieving some

1040
00:46:16,040 --> 00:46:17,440
Speaker 2: of those other financial.

1041
00:46:17,000 --> 00:46:18,880
Speaker 1: Goals that you have, like a lump sum toss out

1042
00:46:18,880 --> 00:46:21,720
Speaker 1: of debt, or a pump student loan thrusting into the roth.

1043
00:46:21,600 --> 00:46:22,480
Speaker 2: Ira, whatever it is.

1044
00:46:22,680 --> 00:46:24,400
Speaker 1: I like that to it and to get You're right,

1045
00:46:24,400 --> 00:46:27,879
Speaker 1: it's psychological, right. It's not like you're actually making more

1046
00:46:27,880 --> 00:46:30,759
Speaker 1: progress than you otherwise would, but you're learning to live

1047
00:46:30,800 --> 00:46:33,120
Speaker 1: on less than you make, and you're also able to

1048
00:46:33,280 --> 00:46:35,640
Speaker 1: take a bigger bite out of some of those goals

1049
00:46:35,719 --> 00:46:38,279
Speaker 1: in one fell swoop, which can feel really rewarding. So

1050
00:46:38,840 --> 00:46:41,240
Speaker 1: I like that too. It reminds me of a tax refund,

1051
00:46:41,520 --> 00:46:43,960
Speaker 1: which is similar in that way, and a lot of people,

1052
00:46:44,040 --> 00:46:46,960
Speaker 1: a lot of personal finance experts, they hate the tax

1053
00:46:47,000 --> 00:46:49,960
Speaker 1: refund because it's this tax tax free loan to the

1054
00:46:50,000 --> 00:46:52,359
Speaker 1: government is what they call it, right, ye, interest free loan,

1055
00:46:52,400 --> 00:46:54,320
Speaker 1: interest free loan. Excuse me, it's not that it's something

1056
00:46:54,360 --> 00:46:57,520
Speaker 1: we recommend getting some sort of massive tax refund. I

1057
00:46:57,560 --> 00:47:00,120
Speaker 1: mean from an optimization standpoint, it's not the best approach.

1058
00:47:00,320 --> 00:47:02,239
Speaker 1: But from a cycle and I guess right now, with

1059
00:47:02,400 --> 00:47:04,960
Speaker 1: interest rates going up on savings, like, it's even worse

1060
00:47:05,560 --> 00:47:07,800
Speaker 1: you a little bit more, yeah than otherwise when savings

1061
00:47:07,880 --> 00:47:09,120
Speaker 1: rates for a half percent it was like, yeah, you're

1062
00:47:09,120 --> 00:47:11,279
Speaker 1: not really missing out on much. But from a psychological

1063
00:47:11,320 --> 00:47:13,400
Speaker 1: point of view, it can be a force method of savings.

1064
00:47:13,400 --> 00:47:16,880
Speaker 1: So for Jessica, for everyone else out there, using irregular paychecks,

1065
00:47:17,000 --> 00:47:21,040
Speaker 1: unexpected bonuses, and tax refunds right to reach a financial

1066
00:47:21,040 --> 00:47:23,879
Speaker 1: goal more quickly, it can be smart. Just don't use

1067
00:47:23,880 --> 00:47:27,239
Speaker 1: those lump sum payments to consume. Find it as this

1068
00:47:27,320 --> 00:47:30,160
Speaker 1: force method, like I said, of a way to achieve

1069
00:47:30,200 --> 00:47:33,080
Speaker 1: something that normally you felt might be off limits or

1070
00:47:33,120 --> 00:47:35,480
Speaker 1: might be difficult to hit. But those lump sums, when

1071
00:47:35,520 --> 00:47:37,640
Speaker 1: they hit your bank account, it can feel like, oh cool,

1072
00:47:37,680 --> 00:47:39,839
Speaker 1: now we've got the room to actually meet that goal.

1073
00:47:40,120 --> 00:47:42,440
Speaker 2: Or here. You know what, I actually will disagree with Joel,

1074
00:47:42,440 --> 00:47:44,200
Speaker 2: and I'll say, if you want to intentionally use that

1075
00:47:44,239 --> 00:47:46,799
Speaker 2: money to consume in a meaningful way, like hey, that's

1076
00:47:46,840 --> 00:47:49,120
Speaker 2: how you're able to fund, say, most of your summer

1077
00:47:49,200 --> 00:47:51,799
Speaker 2: vacation or something like that, I'm all for that. I'm

1078
00:47:51,840 --> 00:47:52,200
Speaker 2: all for.

1079
00:47:52,280 --> 00:47:55,480
Speaker 1: However, you can mentally account for this money and use

1080
00:47:55,480 --> 00:47:59,160
Speaker 1: it to your advantage saving and investing with the regular paychecks, right, absolutely,

1081
00:47:59,160 --> 00:48:00,640
Speaker 1: that comes first. If you're not and that, and you're

1082
00:48:00,719 --> 00:48:02,920
Speaker 1: using this as the way to meet those savings or

1083
00:48:02,920 --> 00:48:04,839
Speaker 1: investing goals that you otherwise wouldn't be able to hit,

1084
00:48:05,120 --> 00:48:07,080
Speaker 1: then you don't want to funnel it towards vacation. But

1085
00:48:07,120 --> 00:48:09,759
Speaker 1: if you've done the right stuff with the regular every

1086
00:48:09,760 --> 00:48:11,360
Speaker 1: two week paychecks, then yeah.

1087
00:48:11,200 --> 00:48:12,560
Speaker 2: You can use it for fun. Yeah. And if you

1088
00:48:12,640 --> 00:48:15,600
Speaker 2: haven't reached your retirement goals, then yes, use this money

1089
00:48:15,640 --> 00:48:18,000
Speaker 2: to make sure that your roth iray is maxed out.

1090
00:48:18,200 --> 00:48:21,160
Speaker 2: I think whatever strategies you can employ to make sure

1091
00:48:21,200 --> 00:48:24,040
Speaker 2: that this is working for you, I'm gonna get behind

1092
00:48:24,120 --> 00:48:26,400
Speaker 2: whatever approach you decide to take. I guess everyone's different.

1093
00:48:26,520 --> 00:48:29,120
Speaker 2: So all right, let's get back to our beer buddy.

1094
00:48:29,200 --> 00:48:32,839
Speaker 2: This was how'd you call it? Pronounce it la cumbre? Yeah,

1095
00:48:32,960 --> 00:48:37,359
Speaker 2: malpay stout malpace. This is a stout that has brewed there.

1096
00:48:37,400 --> 00:48:40,359
Speaker 2: Let's see an Albuquerque, New Mexico. And I also see

1097
00:48:40,360 --> 00:48:42,919
Speaker 2: on the canto that they won a silver medal back

1098
00:48:42,920 --> 00:48:45,640
Speaker 2: in twenty eleven night. Oh yeah, this is a this

1099
00:48:45,719 --> 00:48:47,399
Speaker 2: is an award winning beer. Drove out your thoughts.

1100
00:48:47,400 --> 00:48:49,440
Speaker 1: I've never been to Albuquerque, but it's on my it's

1101
00:48:49,440 --> 00:48:51,279
Speaker 1: on my to hit up list ever since. We talked

1102
00:48:51,320 --> 00:48:53,239
Speaker 1: with the couple that drove around in the van. Oh yeah,

1103
00:48:53,239 --> 00:48:55,840
Speaker 1: you remember what were their names? You can't believe that

1104
00:48:55,880 --> 00:48:59,160
Speaker 1: was early on. That was years Christy and I don't

1105
00:48:59,160 --> 00:49:04,040
Speaker 1: remember Chris, christ and Christie, So that was years ago.

1106
00:49:04,480 --> 00:49:06,640
Speaker 2: Well link to that one as well, but that was

1107
00:49:06,680 --> 00:49:10,120
Speaker 2: back when the living in your van, that nomadic life

1108
00:49:10,400 --> 00:49:14,080
Speaker 2: was pretty huge, and they basically got to share their

1109
00:49:14,120 --> 00:49:16,839
Speaker 2: experience and they were talking about how Albuquerque, how they

1110
00:49:16,880 --> 00:49:18,439
Speaker 2: loved it there, yeah, and how they thought they would

1111
00:49:18,480 --> 00:49:20,080
Speaker 2: end up end up living there once they did, that

1112
00:49:20,239 --> 00:49:21,040
Speaker 2: was to settle down.

1113
00:49:21,040 --> 00:49:24,840
Speaker 1: That was definitely like peak fan life. So this beer

1114
00:49:24,880 --> 00:49:26,680
Speaker 1: was really good and I dug it.

1115
00:49:26,760 --> 00:49:27,040
Speaker 2: I did.

1116
00:49:27,080 --> 00:49:30,120
Speaker 1: It's like classic milk stout at Nice pottit of milk stout.

1117
00:49:30,360 --> 00:49:32,080
Speaker 1: It tasted like a milk stout to me. It doesn't

1118
00:49:32,080 --> 00:49:33,080
Speaker 1: say it doesn't Does.

1119
00:49:32,920 --> 00:49:34,520
Speaker 2: It have actual lactose in it? I don't know.

1120
00:49:34,560 --> 00:49:37,000
Speaker 1: I'm not really sure, but it again, it tasted like

1121
00:49:37,000 --> 00:49:39,200
Speaker 1: a milk stout, and I'd say it was not too thick,

1122
00:49:39,480 --> 00:49:42,080
Speaker 1: but which made it like, especially for this time of year,

1123
00:49:42,200 --> 00:49:44,439
Speaker 1: kind of early fall, it's kind of what you want. Yeah,

1124
00:49:44,560 --> 00:49:46,360
Speaker 1: kind of a perfect fit for the first out of

1125
00:49:46,360 --> 00:49:49,520
Speaker 1: the season. At some point in December January, I'll be

1126
00:49:49,600 --> 00:49:52,440
Speaker 1: drinking the heavies, the big barrel aged ones. But for now,

1127
00:49:52,560 --> 00:49:54,319
Speaker 1: this is like the perfect.

1128
00:49:53,960 --> 00:49:58,200
Speaker 2: Colorqually concentrated beers that will be enjoying the way exactly.

1129
00:49:58,360 --> 00:49:58,400
Speaker 3: No.

1130
00:49:58,560 --> 00:50:00,920
Speaker 2: Yeah, it had all those dark and to flavors if

1131
00:50:00,960 --> 00:50:02,719
Speaker 2: you're into that. So for instance, if you like this

1132
00:50:02,920 --> 00:50:05,480
Speaker 2: like a Starbucks French roast or something like that, this

1133
00:50:05,640 --> 00:50:08,120
Speaker 2: is totally a beer I think that you'd enjoy. But

1134
00:50:08,160 --> 00:50:10,200
Speaker 2: it's funny that on the label it's a I guess

1135
00:50:10,200 --> 00:50:13,680
Speaker 2: their slogan is get Elevated. And I'll say that the

1136
00:50:13,680 --> 00:50:16,400
Speaker 2: beer it had like a nice lift to it. So

1137
00:50:16,440 --> 00:50:20,960
Speaker 2: the carbonation that accompanied the darker, roasty notes made it

1138
00:50:21,120 --> 00:50:23,680
Speaker 2: very enjoyable. Yeah, because it wasn't It's like the opposite

1139
00:50:23,719 --> 00:50:27,520
Speaker 2: of guinness. It feels kind of flat in your mouth.

1140
00:50:27,600 --> 00:50:30,920
Speaker 2: It's smooth. Yeah, it's good, but it doesn't have that lift.

1141
00:50:31,200 --> 00:50:33,240
Speaker 2: And with this you totally feel it on your tongue

1142
00:50:34,160 --> 00:50:37,399
Speaker 2: in conjunction with those darker flavors, but I enjoyed it.

1143
00:50:37,440 --> 00:50:40,520
Speaker 2: And Bob, thanks again for all the beers that you

1144
00:50:40,600 --> 00:50:44,080
Speaker 2: sent hour away. And it's always nice to enjoy beers

1145
00:50:44,080 --> 00:50:45,520
Speaker 2: that are being produced in a different part of the

1146
00:50:45,560 --> 00:50:47,719
Speaker 2: country for sure. Yeah again, New Mexico. It's on my

1147
00:50:47,719 --> 00:50:49,360
Speaker 2: short list. Got to make it out there. Let's do it.

1148
00:50:49,600 --> 00:50:51,960
Speaker 1: I've been once, but only to Gallop, New Mexico. My

1149
00:50:52,000 --> 00:50:54,000
Speaker 1: uncle lived there for a little while, but I haven't

1150
00:50:54,040 --> 00:50:56,560
Speaker 1: been to really any other parts, and I gotta.

1151
00:50:56,360 --> 00:50:58,719
Speaker 2: Hit those upside. You mean, let's do Albuquerque. I'm in

1152
00:50:58,800 --> 00:51:01,560
Speaker 2: without the wives. Just dude's trip out. We've never really

1153
00:51:01,560 --> 00:51:05,359
Speaker 2: done a boys trip before because got to know each other.

1154
00:51:05,760 --> 00:51:07,600
Speaker 2: You choset, my wife's som we like. We all got

1155
00:51:07,600 --> 00:51:08,960
Speaker 2: to know each other at the same time. So anytime

1156
00:51:09,000 --> 00:51:11,080
Speaker 2: we would go on little trips or even big trips,

1157
00:51:11,080 --> 00:51:12,920
Speaker 2: it was always the four of us. But maybe we

1158
00:51:12,920 --> 00:51:14,200
Speaker 2: should take a boys trip one of these days and

1159
00:51:14,239 --> 00:51:17,240
Speaker 2: we rent motorcycles. Oh sounds like somebody should be following

1160
00:51:17,320 --> 00:51:19,880
Speaker 2: us when making a documentary, right I'm thinking of is

1161
00:51:19,880 --> 00:51:24,719
Speaker 2: that you and McGregor where he did? Yeah, anyway, that's

1162
00:51:24,760 --> 00:51:27,120
Speaker 2: gonna be it for this episode, buddy. Until next time,

1163
00:51:27,200 --> 00:51:43,760
Speaker 2: Best Friends, out, best friends out yeah boy