1
00:00:00,160 --> 00:00:02,640
Speaker 1: Welcome to How the Money. I'm Joel and I and

2
00:00:02,800 --> 00:00:25,800
Speaker 1: Matt and today we're answering your listener questions. M that's right, man,

3
00:00:25,840 --> 00:00:28,960
Speaker 1: this is a listener question Monday. We've got five fantastic

4
00:00:29,000 --> 00:00:31,240
Speaker 1: questions that I am excited to answer. We're gonna hear

5
00:00:31,280 --> 00:00:34,640
Speaker 1: from a listener who is asking about putting virtually all

6
00:00:34,680 --> 00:00:36,920
Speaker 1: of her expenses on a credit card. Some pros and

7
00:00:36,960 --> 00:00:40,000
Speaker 1: cons there. We're gonna answer another question as it pertains

8
00:00:40,040 --> 00:00:42,720
Speaker 1: to refinancing a house. When is it a good idea

9
00:00:42,800 --> 00:00:45,000
Speaker 1: to refinance and when is it not? And then we're

10
00:00:45,000 --> 00:00:46,919
Speaker 1: gonna answer a question too about what to do with

11
00:00:47,159 --> 00:00:50,800
Speaker 1: an extra five thousand dollars that they received as a gift.

12
00:00:50,960 --> 00:00:53,440
Speaker 1: Plus of course, buddy, we've got to surprise questions that

13
00:00:53,520 --> 00:00:57,360
Speaker 1: we don't announce. I love the surprise questions. Before we

14
00:00:57,360 --> 00:01:00,040
Speaker 1: get there, Matt, real quick, I wanted to mention a

15
00:01:00,440 --> 00:01:04,000
Speaker 1: listener in our Facebook group recently posted a story about

16
00:01:04,200 --> 00:01:08,600
Speaker 1: how Northwest Arkansas is paying people to move there. They're

17
00:01:08,600 --> 00:01:11,760
Speaker 1: paying people ten thousand dollars and they're giving you a

18
00:01:11,800 --> 00:01:14,280
Speaker 1: bike at the same time. You can choose either a

19
00:01:14,360 --> 00:01:17,640
Speaker 1: street bike or an an off road bike. And yeah,

20
00:01:17,680 --> 00:01:19,560
Speaker 1: because I guess there's just also known as mountain bikes.

21
00:01:19,560 --> 00:01:22,040
Speaker 1: Mountain bike. There's so many trails up there, apparently, like

22
00:01:22,400 --> 00:01:25,520
Speaker 1: road trails and off roading trails. We talked recently about

23
00:01:25,520 --> 00:01:28,360
Speaker 1: the cheap Scandinavian houses and people potentially moving there. Well,

24
00:01:28,360 --> 00:01:30,319
Speaker 1: if you don't want to quite go that far, maybe

25
00:01:30,319 --> 00:01:32,120
Speaker 1: northwest Arkansas is a good place for a lot of

26
00:01:32,160 --> 00:01:34,440
Speaker 1: people who don't necessarily love where they live right now.

27
00:01:34,560 --> 00:01:36,200
Speaker 1: Then you mentioned all the good biking up there. That's

28
00:01:36,240 --> 00:01:37,840
Speaker 1: not the first time that we've heard about all the

29
00:01:37,840 --> 00:01:40,080
Speaker 1: good biking they're up in Arkansas. I think we had

30
00:01:40,120 --> 00:01:43,080
Speaker 1: a listener question and he recommended that we should check

31
00:01:43,080 --> 00:01:46,080
Speaker 1: out Arkansas sometime because there's good beer, there's good biking.

32
00:01:46,400 --> 00:01:48,480
Speaker 1: And now there's this incentive, you know, ten thousand dollars

33
00:01:48,480 --> 00:01:51,200
Speaker 1: that should easily cover any moving costs when you and

34
00:01:51,560 --> 00:01:55,560
Speaker 1: I uproot our families and move out there. But but seriously,

35
00:01:55,560 --> 00:01:57,400
Speaker 1: like when you see something like this, does it actually

36
00:01:57,400 --> 00:01:59,720
Speaker 1: make you consider consider moving? You know, like you see

37
00:01:59,720 --> 00:02:02,720
Speaker 1: an oportunity, you see that there's someplace that you could

38
00:02:02,760 --> 00:02:04,760
Speaker 1: move to that has a much lower cost of living.

39
00:02:05,120 --> 00:02:07,760
Speaker 1: How much do you actually consider that? So so much

40
00:02:07,760 --> 00:02:09,760
Speaker 1: of it I think depends on how deep your roots

41
00:02:09,760 --> 00:02:12,400
Speaker 1: are where you live. Our roots are super deep, like

42
00:02:12,400 --> 00:02:14,440
Speaker 1: a hundred year old oak. It feels like because you

43
00:02:14,480 --> 00:02:16,520
Speaker 1: know so much of our neighborhood, so many of our

44
00:02:16,520 --> 00:02:19,680
Speaker 1: friends are are literally right here where we where we live,

45
00:02:19,760 --> 00:02:22,440
Speaker 1: and and my parents are really close, my sisters are

46
00:02:22,440 --> 00:02:25,160
Speaker 1: really close. So family wise, I mean, I'm probably not

47
00:02:25,160 --> 00:02:27,720
Speaker 1: gonna leave for ten thousand bucks and better bike trails.

48
00:02:27,760 --> 00:02:29,920
Speaker 1: It's just not gonna happen. But I think for for

49
00:02:29,960 --> 00:02:32,560
Speaker 1: a lot of people out there who, especially in a

50
00:02:32,560 --> 00:02:35,280
Speaker 1: pandemic where you can work from home, maybe your roots

51
00:02:35,280 --> 00:02:37,680
Speaker 1: aren't as deep somewhere, or you have been more transient.

52
00:02:38,200 --> 00:02:40,280
Speaker 1: One of these kind of things could get you interested

53
00:02:40,320 --> 00:02:43,320
Speaker 1: in a place like northwest Arkansas, and you might be like, cool,

54
00:02:43,400 --> 00:02:45,240
Speaker 1: I'm pulling the trigger if if it includes a bike

55
00:02:45,280 --> 00:02:47,600
Speaker 1: in some money. I mean, the bike is just kind

56
00:02:47,600 --> 00:02:49,400
Speaker 1: of like this bonus, Like the bike is there for

57
00:02:49,400 --> 00:02:51,280
Speaker 1: the headlines. So I hope it's not a huffy you know,

58
00:02:52,040 --> 00:02:54,000
Speaker 1: But I mean, this is something I feel like I'm

59
00:02:54,120 --> 00:02:56,320
Speaker 1: questioning more. I think for a lot of individuals, that's

60
00:02:56,360 --> 00:02:59,280
Speaker 1: allowed them to reflect a little bit right, provide a

61
00:02:59,280 --> 00:03:01,200
Speaker 1: little bit of interest action where they're like, yeah, I mean,

62
00:03:01,200 --> 00:03:03,840
Speaker 1: I'm I'm with you, right, our families were entrenched. It

63
00:03:03,880 --> 00:03:05,840
Speaker 1: feels like at this point and it does feel like

64
00:03:06,080 --> 00:03:08,640
Speaker 1: that we are this one year old oak right, Uh,

65
00:03:08,720 --> 00:03:11,079
Speaker 1: that that we can't be transplanted. But I do think

66
00:03:11,120 --> 00:03:14,040
Speaker 1: it's possible. I think, uh, it wouldn't be easy, but

67
00:03:14,200 --> 00:03:16,880
Speaker 1: you know, if there are enough benefits, and when you

68
00:03:16,960 --> 00:03:19,680
Speaker 1: have someplace that is significantly more affordable to live than

69
00:03:20,080 --> 00:03:21,880
Speaker 1: in the city here in Atlanta, and Atlanta is a

70
00:03:21,880 --> 00:03:24,280
Speaker 1: pretty affordable city, but there are places that are a

71
00:03:24,280 --> 00:03:27,000
Speaker 1: lot more affordable, and if that meants just a lot

72
00:03:27,080 --> 00:03:30,760
Speaker 1: more freedom over time, I mean, I'm thinking about like

73
00:03:30,800 --> 00:03:32,119
Speaker 1: the amount of time I would be able to spend

74
00:03:32,160 --> 00:03:36,119
Speaker 1: with my family enjoying other pursuits, traveling. It really makes

75
00:03:36,120 --> 00:03:39,080
Speaker 1: me considerate. And I think the biggest barrier would be

76
00:03:39,120 --> 00:03:41,480
Speaker 1: making sure that you guys would move with us, because

77
00:03:41,960 --> 00:03:44,080
Speaker 1: so that way we could continue to create the podcast.

78
00:03:44,800 --> 00:03:46,320
Speaker 1: But but yeah, you know, we kind of mentioned the

79
00:03:46,320 --> 00:03:48,040
Speaker 1: sweet spot when it comes to refinancing. I feel like

80
00:03:48,040 --> 00:03:49,720
Speaker 1: there could be a sweet spot when it came to

81
00:03:50,280 --> 00:03:53,680
Speaker 1: a small town that was affordable, that had good schools

82
00:03:53,680 --> 00:03:55,720
Speaker 1: obviously for the kids, but also you know, wouldn't hurt.

83
00:03:55,720 --> 00:03:57,960
Speaker 1: If there's a good brewery there as well, close to nature,

84
00:03:58,360 --> 00:04:00,000
Speaker 1: and if they don't have one, we opened the brewery.

85
00:04:00,040 --> 00:04:01,640
Speaker 1: I guess right, we could do that, man. Yeah, So

86
00:04:01,680 --> 00:04:03,400
Speaker 1: I mean, listeners out there, if you know of a

87
00:04:03,480 --> 00:04:06,160
Speaker 1: city that's maybe highly underrated, send it my way. I

88
00:04:06,280 --> 00:04:09,720
Speaker 1: might spend twenty minutes perusing Zillo, kind of getting a

89
00:04:09,760 --> 00:04:12,640
Speaker 1: feel for the real estate market there. That could inform

90
00:04:12,720 --> 00:04:16,040
Speaker 1: where I live next year. Who Okay, alright, so the

91
00:04:16,040 --> 00:04:18,680
Speaker 1: podcast potentially migrating, I don't know. We'll see. You're gonna

92
00:04:18,680 --> 00:04:20,520
Speaker 1: have to twist our arms in order to make that happen.

93
00:04:21,160 --> 00:04:22,839
Speaker 1: But but yeah, we'll post a link in our show

94
00:04:22,839 --> 00:04:26,520
Speaker 1: notes to to the article describing um the perks that

95
00:04:26,640 --> 00:04:29,080
Speaker 1: Northwest Arkansas is offering to people who are willing to

96
00:04:29,120 --> 00:04:31,000
Speaker 1: move there. It's pretty cool and it's just another one

97
00:04:31,000 --> 00:04:33,279
Speaker 1: of those things where a lot of people are moving

98
00:04:33,360 --> 00:04:36,080
Speaker 1: these days. Um, you know, if Northwest Arkansas hasn't been

99
00:04:36,080 --> 00:04:38,120
Speaker 1: on your list to consider what it might be. Now,

100
00:04:38,360 --> 00:04:40,040
Speaker 1: all right, Matt, let's move on to the beer that

101
00:04:40,080 --> 00:04:42,680
Speaker 1: we're having on this episode. This one's a black raspberry

102
00:04:42,720 --> 00:04:46,240
Speaker 1: sour from Westbrook Brewing Company there out of South Carolina,

103
00:04:46,360 --> 00:04:48,720
Speaker 1: making good stuff. Looking forward to having this one on

104
00:04:48,760 --> 00:04:50,760
Speaker 1: the show with you today, my friend. Yeah, and we

105
00:04:50,760 --> 00:04:52,240
Speaker 1: will share our thoughts on this one at the end

106
00:04:52,240 --> 00:04:54,160
Speaker 1: of the episode. But let's go ahead now shift to

107
00:04:54,279 --> 00:04:57,159
Speaker 1: listener questions before we get started here. Listeners can submit

108
00:04:57,200 --> 00:05:00,480
Speaker 1: their own questions by sending us a voice memo just

109
00:05:00,520 --> 00:05:02,400
Speaker 1: emailing that to us. It's as easy as that. For

110
00:05:02,440 --> 00:05:04,680
Speaker 1: full instructions, you can go to how some Money dot

111
00:05:04,680 --> 00:05:07,600
Speaker 1: com forward slash ask this without further ado, Joel, let's

112
00:05:07,600 --> 00:05:10,440
Speaker 1: get to our first question. Hello, Joel and Matt. My

113
00:05:10,520 --> 00:05:13,400
Speaker 1: name is Jenny, and I am calling from Bend, Oregon,

114
00:05:13,760 --> 00:05:16,960
Speaker 1: the home of the Shoots Brewery, among some other great

115
00:05:17,040 --> 00:05:20,880
Speaker 1: and famous breweries. I have a very simple approach to

116
00:05:20,960 --> 00:05:24,240
Speaker 1: credit card usage. I have just one card, and it

117
00:05:24,320 --> 00:05:28,159
Speaker 1: offers cash back for every purchase. I use it for

118
00:05:28,240 --> 00:05:31,400
Speaker 1: everyday expenses, and I pay it off weekly to make

119
00:05:31,440 --> 00:05:35,120
Speaker 1: sure I don't slip into debt. I've been thinking of

120
00:05:35,160 --> 00:05:38,160
Speaker 1: extending my credit card use by switching over some of

121
00:05:38,200 --> 00:05:41,240
Speaker 1: my monthly bills to my card, so I can get

122
00:05:41,279 --> 00:05:44,719
Speaker 1: cash back for money I'll already be spending every month.

123
00:05:45,320 --> 00:05:48,400
Speaker 1: What would be your advice or pros and cons on

124
00:05:48,480 --> 00:05:51,679
Speaker 1: switching over regular bills to be paid by credit card

125
00:05:51,839 --> 00:05:55,080
Speaker 1: as a way to earn more cash back or reward points.

126
00:05:56,000 --> 00:05:59,440
Speaker 1: Thank you and cheers, Jenny, thanks so much for your question.

127
00:05:59,520 --> 00:06:02,200
Speaker 1: By the way, organ and craft beer go hand in hand.

128
00:06:02,520 --> 00:06:05,679
Speaker 1: Uh in biking, speaking of great places to live, dude,

129
00:06:05,680 --> 00:06:08,560
Speaker 1: and discolf. Great discolf up in Organ there. Yeah, Uh

130
00:06:08,640 --> 00:06:11,520
Speaker 1: played some courses, they're good stuff. So uh yeah, I

131
00:06:11,520 --> 00:06:13,240
Speaker 1: don't know if Jenny's played or not, but Jenny, if

132
00:06:13,240 --> 00:06:14,920
Speaker 1: you haven't, and go check it out. And Jenny, it

133
00:06:14,920 --> 00:06:17,200
Speaker 1: sounds like you're using your credit cards in an incredibly

134
00:06:17,360 --> 00:06:19,880
Speaker 1: smart and wives way, so kudos to you on that.

135
00:06:20,360 --> 00:06:22,200
Speaker 1: And Matt and I we actually think that that all

136
00:06:22,279 --> 00:06:25,760
Speaker 1: regular bills should be paid with credit cards if you

137
00:06:25,760 --> 00:06:29,240
Speaker 1: can handle them responsibly like you're actually doing. Yeah, that's right.

138
00:06:29,279 --> 00:06:31,000
Speaker 1: And Jenny, you're asking about the pros and cons, and

139
00:06:31,040 --> 00:06:33,720
Speaker 1: so the biggest con is that using a credit card

140
00:06:33,800 --> 00:06:35,960
Speaker 1: could cause you to overspend. Right, This is maybe more

141
00:06:35,960 --> 00:06:38,919
Speaker 1: of an obvious con, but a study by analytics and

142
00:06:38,960 --> 00:06:41,480
Speaker 1: research company done in brad Street, they found that consumers

143
00:06:41,520 --> 00:06:44,760
Speaker 1: spend on average twelve to eighteen percent more when they

144
00:06:44,800 --> 00:06:48,080
Speaker 1: use their credit cards instead of cash. Essentially, you know,

145
00:06:48,120 --> 00:06:50,560
Speaker 1: it just makes it easier to make those purchases when

146
00:06:50,600 --> 00:06:52,680
Speaker 1: there is virtually no pain in the moment, when you

147
00:06:52,680 --> 00:06:55,680
Speaker 1: don't have to part yourself with some of that hard cash. Yeah,

148
00:06:55,720 --> 00:06:57,560
Speaker 1: they hand the credit card right back to you. It

149
00:06:57,600 --> 00:07:00,960
Speaker 1: doesn't feel like you're losing anything exactly. There's also this

150
00:07:01,000 --> 00:07:04,599
Speaker 1: older report published by McDonald's themselves, and they showed that

151
00:07:04,680 --> 00:07:08,680
Speaker 1: credit card users spent more than thirty more than cash customers,

152
00:07:08,680 --> 00:07:10,800
Speaker 1: and so just it's something to keep in mind how

153
00:07:10,880 --> 00:07:13,760
Speaker 1: using plastic essentially just softens the blow. It doesn't make

154
00:07:13,800 --> 00:07:16,080
Speaker 1: it feel quite as painful when you make those purchases.

155
00:07:16,360 --> 00:07:18,640
Speaker 1: And that means that people who use credit cards can

156
00:07:18,760 --> 00:07:22,680
Speaker 1: if they're not careful to mind the behavioral element of

157
00:07:22,680 --> 00:07:25,040
Speaker 1: of how they use it, they can spend more. And

158
00:07:25,320 --> 00:07:28,440
Speaker 1: using a credit card can be bad for your personal finances.

159
00:07:28,800 --> 00:07:31,280
Speaker 1: And related to that overspending is the fact that there

160
00:07:31,320 --> 00:07:33,920
Speaker 1: can be an almost two months delay before you have

161
00:07:33,960 --> 00:07:36,560
Speaker 1: to actually pay for that expense, right depending on whether

162
00:07:36,640 --> 00:07:39,800
Speaker 1: you made a particular credit card purchase during a billing cycle.

163
00:07:40,280 --> 00:07:43,000
Speaker 1: Unless you track your expenses diligently and keep up with

164
00:07:43,000 --> 00:07:46,480
Speaker 1: those statements, some people can find themselves way overspending and

165
00:07:46,520 --> 00:07:49,440
Speaker 1: their credit card spending limit is the only thing actually

166
00:07:49,520 --> 00:07:53,320
Speaker 1: raining them in preventing them from spending more. They're hitting

167
00:07:53,320 --> 00:07:55,920
Speaker 1: the limit um and they can't spend any further, and

168
00:07:55,960 --> 00:07:58,000
Speaker 1: that's not a good place to be. Yeah, if you're

169
00:07:58,000 --> 00:07:59,640
Speaker 1: not tracking it well, you can find yourself two muths

170
00:07:59,680 --> 00:08:01,840
Speaker 1: later into pretty deep hole, right, because if you continue

171
00:08:01,880 --> 00:08:05,200
Speaker 1: down that path of poor spending, of that behavior without

172
00:08:05,240 --> 00:08:08,120
Speaker 1: checking yourself, that could be bad news. But luckily, it

173
00:08:08,160 --> 00:08:10,440
Speaker 1: sounds like losing track of where your expenses are isn't

174
00:08:10,440 --> 00:08:12,960
Speaker 1: a problem for you, Jenny, since you pay your balance

175
00:08:13,000 --> 00:08:15,800
Speaker 1: off every week. We love that and I think it's

176
00:08:15,840 --> 00:08:18,120
Speaker 1: a great thing for more folks to consider. Yeah, let's

177
00:08:18,320 --> 00:08:21,000
Speaker 1: really quick mention what that means, Matt. Instead of paying

178
00:08:21,200 --> 00:08:23,600
Speaker 1: your balance off once a month, you know when the

179
00:08:23,880 --> 00:08:26,600
Speaker 1: when the bill is due. If you pay every single

180
00:08:26,640 --> 00:08:29,240
Speaker 1: week the balance that you've accrued, one, it's going to

181
00:08:29,320 --> 00:08:32,240
Speaker 1: lower your utilization rate, and then two, it's just going

182
00:08:32,280 --> 00:08:34,280
Speaker 1: to make sure that you're on top of your spending

183
00:08:34,320 --> 00:08:35,960
Speaker 1: a whole lot more. Or you could even go with

184
00:08:35,960 --> 00:08:37,959
Speaker 1: more of a hybrid approach. So I don't wait until

185
00:08:38,040 --> 00:08:40,680
Speaker 1: I received this statement, but I also don't pay it weekly.

186
00:08:40,720 --> 00:08:42,160
Speaker 1: I meet it right in the middle. I wait until

187
00:08:42,200 --> 00:08:43,680
Speaker 1: the end of the month, and then I make sure

188
00:08:43,720 --> 00:08:46,400
Speaker 1: whatever the current balances at that point, that we pay

189
00:08:46,480 --> 00:08:48,480
Speaker 1: for it. That way, we're not carrying purchases over from

190
00:08:48,559 --> 00:08:51,360
Speaker 1: one month into the next month's finances. And so those

191
00:08:51,400 --> 00:08:53,280
Speaker 1: are some of the cons But Jenny, the obvious pro

192
00:08:53,679 --> 00:08:56,040
Speaker 1: are the rewards that you snag just for using the

193
00:08:56,120 --> 00:08:58,600
Speaker 1: right payment method, and in particular because these are you're

194
00:08:58,600 --> 00:09:02,439
Speaker 1: talking about recurring monthly. Else there's less of a likelihood

195
00:09:02,480 --> 00:09:05,360
Speaker 1: that you're spending will change by putting those bills on

196
00:09:05,440 --> 00:09:08,080
Speaker 1: a credit card. So obviously that's the biggest benefit, but

197
00:09:08,080 --> 00:09:10,760
Speaker 1: there are actually a whole host of sort of lesser

198
00:09:10,800 --> 00:09:12,880
Speaker 1: known benefits that credit cards can offer. We actually did

199
00:09:12,920 --> 00:09:15,360
Speaker 1: an episode on this Joel way back, episode thirty six.

200
00:09:15,559 --> 00:09:17,640
Speaker 1: We talked about some of the hidden or some of

201
00:09:17,640 --> 00:09:20,560
Speaker 1: the lesser known benefits that you receive from paying with

202
00:09:20,600 --> 00:09:22,280
Speaker 1: a credit card. If you have to listen to that one,

203
00:09:22,280 --> 00:09:24,040
Speaker 1: we'd recommend you go check that one out. That's true.

204
00:09:24,120 --> 00:09:26,840
Speaker 1: So many things that you buy you will get an

205
00:09:26,840 --> 00:09:29,520
Speaker 1: extended warranty, or if you rent a car, you could

206
00:09:29,520 --> 00:09:31,959
Speaker 1: get rental car insurance. I mean, there are all these

207
00:09:32,000 --> 00:09:36,040
Speaker 1: additional perks to spending with a credit card that you

208
00:09:36,120 --> 00:09:38,960
Speaker 1: don't get when you use cash or debit card. And

209
00:09:38,960 --> 00:09:40,920
Speaker 1: so Jenny, it sounds like two. You've only got one

210
00:09:40,960 --> 00:09:44,200
Speaker 1: credit card. We would suggest applying for at least one

211
00:09:44,240 --> 00:09:46,760
Speaker 1: more and then maybe even another six months down the

212
00:09:46,840 --> 00:09:50,680
Speaker 1: road apply for a third. Three credit cards is typically

213
00:09:50,760 --> 00:09:53,480
Speaker 1: a solid number to have in your person or your wallet,

214
00:09:53,520 --> 00:09:55,520
Speaker 1: and it can allow you to earn higher awards by

215
00:09:55,520 --> 00:09:59,160
Speaker 1: putting the right monthly bills on the proper cards. Again,

216
00:09:59,280 --> 00:10:01,680
Speaker 1: as long as you and keep your spending under control

217
00:10:01,720 --> 00:10:03,439
Speaker 1: and it's not causing you to spend more than you

218
00:10:03,520 --> 00:10:06,360
Speaker 1: otherwise would, using the right cards for the right bills

219
00:10:06,480 --> 00:10:09,840
Speaker 1: is going to provide you the best rewards possible. Matt,

220
00:10:09,920 --> 00:10:12,160
Speaker 1: the m X Blue Cash Preferred is what we've talked about.

221
00:10:12,520 --> 00:10:15,280
Speaker 1: Using that in particular for groceries and for streaming. You

222
00:10:15,320 --> 00:10:17,520
Speaker 1: get six percent cash back on that. Yeah, and you

223
00:10:17,600 --> 00:10:21,480
Speaker 1: have recently joined the bandwag I joined your cults. You

224
00:10:21,520 --> 00:10:24,160
Speaker 1: are taking part of the six percent cash back at

225
00:10:24,200 --> 00:10:26,200
Speaker 1: grocery stores. You can't beat it. You just can't deny

226
00:10:26,280 --> 00:10:29,199
Speaker 1: how cal great that is for grocery spending. Welcome to

227
00:10:29,240 --> 00:10:32,440
Speaker 1: the club, And Jenny, if you're a Costco member, Costco's

228
00:10:32,480 --> 00:10:34,920
Speaker 1: credit card is really good too, in particular for using

229
00:10:34,920 --> 00:10:38,080
Speaker 1: on gas and travel and for purchases at Costco. And

230
00:10:38,120 --> 00:10:40,720
Speaker 1: then just a general two percent cash back card like

231
00:10:40,760 --> 00:10:44,319
Speaker 1: the City Double Cash or the Fidelity two percent cash

232
00:10:44,320 --> 00:10:46,880
Speaker 1: Back Rewards credit card. Those are two of my favorite

233
00:10:46,880 --> 00:10:49,880
Speaker 1: credit cards, and I use those basically for everything else

234
00:10:50,080 --> 00:10:53,120
Speaker 1: that doesn't have an additional perk to go alongside of it. So, yeah,

235
00:10:53,160 --> 00:10:56,200
Speaker 1: make sure you're using the right card for the bills

236
00:10:56,320 --> 00:10:59,199
Speaker 1: to maximize your rewards, while at the same time keeping

237
00:10:59,200 --> 00:11:01,679
Speaker 1: an eye on those balances and making sure that you're

238
00:11:01,679 --> 00:11:03,840
Speaker 1: spending is not getting out of control. That way, you're

239
00:11:03,880 --> 00:11:06,200
Speaker 1: getting the best of both worlds. Yeah. So obviously one

240
00:11:06,240 --> 00:11:08,320
Speaker 1: of the benefits of having these additional cards is having

241
00:11:08,360 --> 00:11:11,480
Speaker 1: kind of the specialized benefits. But by default, by getting

242
00:11:11,480 --> 00:11:14,000
Speaker 1: these other lines of credit, you you are also increasing

243
00:11:14,000 --> 00:11:16,640
Speaker 1: the amount of credit that's available to you, Jenny, which

244
00:11:16,760 --> 00:11:18,960
Speaker 1: hopefully will mean that when you do start putting some

245
00:11:19,000 --> 00:11:22,800
Speaker 1: of these recurring monthly utilities or other bills on these cards,

246
00:11:22,840 --> 00:11:27,480
Speaker 1: that it won't raise your utilization rate above um bare minimum,

247
00:11:27,480 --> 00:11:29,920
Speaker 1: but hopefully you're keeping it even under ten percent. That's

248
00:11:29,920 --> 00:11:31,560
Speaker 1: how you can really make sure that you're keeping your

249
00:11:31,600 --> 00:11:35,040
Speaker 1: your utilization rate really low, ideally around seven percent is

250
00:11:35,040 --> 00:11:37,720
Speaker 1: with the pro say so yeah, I mean, and she's

251
00:11:37,720 --> 00:11:40,640
Speaker 1: gonna be there if she's paying her her example, once

252
00:11:40,679 --> 00:11:42,559
Speaker 1: a week, she's paying off her credit card bill, her

253
00:11:42,640 --> 00:11:45,880
Speaker 1: utilization already low. So I'm not worried about Jenny really

254
00:11:45,920 --> 00:11:48,640
Speaker 1: from that standpoint, Jenny, get another credit card or two.

255
00:11:48,800 --> 00:11:51,640
Speaker 1: Those rewards are gonna be nice to have just from

256
00:11:51,679 --> 00:11:54,640
Speaker 1: putting your everyday spending on those credit cards. And by

257
00:11:54,679 --> 00:11:56,360
Speaker 1: the way, all three of those credit cards that we

258
00:11:56,440 --> 00:11:58,520
Speaker 1: mentioned are in an article on our website at how

259
00:11:58,559 --> 00:12:01,040
Speaker 1: to money dot com where we talk about our favorite

260
00:12:01,040 --> 00:12:03,160
Speaker 1: credit cards for how people spend. If you want to

261
00:12:03,240 --> 00:12:04,800
Speaker 1: check that one out, we'll put that up in our

262
00:12:04,800 --> 00:12:06,679
Speaker 1: show notes for this episode. All Right, we got more

263
00:12:06,760 --> 00:12:09,200
Speaker 1: questions to get to, including one about ditching a Wrath

264
00:12:09,280 --> 00:12:12,280
Speaker 1: account with ridiculously high fees. We'll get to that and

265
00:12:12,280 --> 00:12:24,400
Speaker 1: more right after this break. All Right, we are back

266
00:12:24,440 --> 00:12:26,000
Speaker 1: from the break, and let's go ahead now and take

267
00:12:26,040 --> 00:12:29,280
Speaker 1: a question about refinancing at home. Where is that sweet spot?

268
00:12:29,760 --> 00:12:32,720
Speaker 1: And then Joel, this is Ryan from Wilmington, North Carolina,

269
00:12:33,320 --> 00:12:37,120
Speaker 1: and I just had a couple of questions on refinancing

270
00:12:37,480 --> 00:12:40,760
Speaker 1: for a mortgage The first one is heard that it's

271
00:12:40,800 --> 00:12:43,800
Speaker 1: best to refinance when you can get at least two

272
00:12:43,800 --> 00:12:47,160
Speaker 1: percentage points lower on your interest rate. I just want

273
00:12:47,160 --> 00:12:50,240
Speaker 1: to get your thoughts on that. If there's a set amount,

274
00:12:50,440 --> 00:12:52,560
Speaker 1: I know more is better to get it down lower.

275
00:12:52,880 --> 00:12:55,240
Speaker 1: But I just wanted to get your thoughts on the two.

276
00:12:55,960 --> 00:12:58,800
Speaker 1: And then the last one is rolling the closing costs

277
00:12:58,920 --> 00:13:03,600
Speaker 1: into the finance loan amount, which wanted to think your

278
00:13:03,720 --> 00:13:06,040
Speaker 1: pros and cons on that. I love the show. You

279
00:13:06,080 --> 00:13:08,720
Speaker 1: guys are doing awesome, and I love the uh the

280
00:13:08,760 --> 00:13:13,600
Speaker 1: beer selections. Good job. Matt Ryan is from Wilmington's North Carolina,

281
00:13:13,679 --> 00:13:16,640
Speaker 1: and and there's good beers in Wilmington, North Carolina, New Anthem,

282
00:13:16,840 --> 00:13:18,120
Speaker 1: which is a beer that we've had on the show

283
00:13:18,160 --> 00:13:20,200
Speaker 1: before they are there to write it, sounds like you

284
00:13:20,280 --> 00:13:22,319
Speaker 1: enjoy the craft beer aspect of the show as well.

285
00:13:22,360 --> 00:13:24,719
Speaker 1: If you have not had any New Anthem beers, we

286
00:13:24,720 --> 00:13:27,440
Speaker 1: would highly recommend that. Although I'm guessing that's probably like

287
00:13:27,440 --> 00:13:30,959
Speaker 1: your daily that's probably your go to beer. I'm guessing

288
00:13:31,000 --> 00:13:32,960
Speaker 1: it's not even all that special for you being up there,

289
00:13:32,960 --> 00:13:34,719
Speaker 1: but yeah, we had it recently and man they were

290
00:13:34,720 --> 00:13:36,640
Speaker 1: so good. Yeah, when we get New Anthem down here.

291
00:13:36,640 --> 00:13:39,520
Speaker 1: I'm all over it because they're delicious. But yeah, Ryan,

292
00:13:39,559 --> 00:13:42,280
Speaker 1: let's get onto your question. And and maybe when you're

293
00:13:42,360 --> 00:13:46,880
Speaker 1: having that conversation about the lowering your mortgage interest right

294
00:13:46,920 --> 00:13:50,840
Speaker 1: by two percentage points, maybe you're talking to someone who's really,

295
00:13:50,880 --> 00:13:54,400
Speaker 1: really conservative, because the rule of thumb, typically, I would say,

296
00:13:54,679 --> 00:13:57,120
Speaker 1: is that even just a one percent rate cut will

297
00:13:57,160 --> 00:13:59,840
Speaker 1: make it worth it to refinance your mortgage. So if

298
00:13:59,840 --> 00:14:02,240
Speaker 1: you can get a rate of two points lower, that's

299
00:14:02,320 --> 00:14:05,120
Speaker 1: incredible and it typically will make refinancing more like a

300
00:14:05,120 --> 00:14:08,440
Speaker 1: slam dunk. Yeah, much less of a question. But rules

301
00:14:08,480 --> 00:14:12,000
Speaker 1: of thumb don't always cut it in all refinance scenarios.

302
00:14:12,000 --> 00:14:14,840
Speaker 1: There are certainly other things to keep in mind, and

303
00:14:14,880 --> 00:14:17,679
Speaker 1: there are specific numbers that you're gonna need to run

304
00:14:17,679 --> 00:14:19,480
Speaker 1: at the same time. Yeah, so let's go beyond the

305
00:14:19,560 --> 00:14:21,520
Speaker 1: rules of thumb there and and kind of dive into

306
00:14:21,520 --> 00:14:24,280
Speaker 1: your specific situation here, Ryan, you're gonna want to go

307
00:14:24,360 --> 00:14:26,880
Speaker 1: beyond just considering your payments and think about how much

308
00:14:26,920 --> 00:14:29,800
Speaker 1: you'll be paying an interest over the life of the loan.

309
00:14:30,400 --> 00:14:33,800
Speaker 1: You can quickly run an amortization schedule on your current

310
00:14:33,840 --> 00:14:36,120
Speaker 1: loan and on the new loan that you're considering. To

311
00:14:36,200 --> 00:14:38,560
Speaker 1: see how much you'll be able to save an interest

312
00:14:38,840 --> 00:14:41,280
Speaker 1: over the life of the loan. And the ideal spot

313
00:14:41,320 --> 00:14:43,040
Speaker 1: for you to land is to lower your interest rate

314
00:14:43,240 --> 00:14:46,240
Speaker 1: without adding too many years to your payoff time. And

315
00:14:46,240 --> 00:14:47,880
Speaker 1: so for instance, if you're ten years into a third

316
00:14:48,000 --> 00:14:50,920
Speaker 1: year mortgage, in that case, we would rather you look into,

317
00:14:51,040 --> 00:14:52,840
Speaker 1: you know, maybe a fifteen year or maybe a twenty

318
00:14:52,880 --> 00:14:57,040
Speaker 1: year mortgage versus going back into, you know, another thirty

319
00:14:57,080 --> 00:14:59,320
Speaker 1: year mortgage. That's the only sort of downside I guess

320
00:14:59,320 --> 00:15:01,680
Speaker 1: to refinance thing is that sometimes it kind of hits

321
00:15:01,680 --> 00:15:03,720
Speaker 1: the reset button on how long it is that you're

322
00:15:03,720 --> 00:15:06,280
Speaker 1: paying for that house of via the mortgage. Yeah. Yeah,

323
00:15:06,320 --> 00:15:07,960
Speaker 1: And for instance, if you'd been in a house for

324
00:15:08,000 --> 00:15:11,400
Speaker 1: ten years and then you refinance into another thirty year mortgage,

325
00:15:11,400 --> 00:15:14,080
Speaker 1: you're talking about paying off your house over forty years,

326
00:15:14,160 --> 00:15:15,920
Speaker 1: and that's just that's just too long in my book.

327
00:15:16,200 --> 00:15:18,120
Speaker 1: But um yeah, let's talk about the break even point.

328
00:15:18,160 --> 00:15:21,920
Speaker 1: To another consideration if you're looking to refinance is how

329
00:15:21,960 --> 00:15:25,120
Speaker 1: long you're planning to be in that house. Nerd Wallet

330
00:15:25,120 --> 00:15:27,240
Speaker 1: has a great REFI calculator that will link to in

331
00:15:27,280 --> 00:15:29,560
Speaker 1: the show notes that will help you know if a

332
00:15:29,600 --> 00:15:31,720
Speaker 1: refinance is the right move for you based on your

333
00:15:31,760 --> 00:15:35,960
Speaker 1: specific circumstances. They include, in particular, the all important break

334
00:15:36,120 --> 00:15:38,200
Speaker 1: even point, and that means how long is it gonna

335
00:15:38,240 --> 00:15:41,640
Speaker 1: take to make back those closing costs um in monthly payments,

336
00:15:41,640 --> 00:15:43,480
Speaker 1: And we prefer for the break even point to be

337
00:15:43,920 --> 00:15:46,760
Speaker 1: three years or less in most cases. Yeah, because beyond that,

338
00:15:46,960 --> 00:15:48,520
Speaker 1: I mean, who knows if you'll even still be in

339
00:15:48,560 --> 00:15:51,120
Speaker 1: that house, right, and so much less that loan exactly. Yeah,

340
00:15:51,120 --> 00:15:52,640
Speaker 1: you want to make sure that not only are you

341
00:15:52,800 --> 00:15:54,720
Speaker 1: living in the house and that you're reaping the benefits

342
00:15:54,760 --> 00:15:57,320
Speaker 1: from that, but that the savings will pay for that REFI. Yeah,

343
00:15:57,360 --> 00:16:00,240
Speaker 1: it's funny some people ask about refinancing and the like, well,

344
00:16:00,240 --> 00:16:01,960
Speaker 1: I'm probably gonna sell in a year or two and

345
00:16:02,040 --> 00:16:05,320
Speaker 1: almost never refinance. Yeah, it doesn't make sense to refinance,

346
00:16:05,360 --> 00:16:07,200
Speaker 1: even if the rate is you know, a point and

347
00:16:07,200 --> 00:16:09,800
Speaker 1: a half lower or two points lower. If you're gonna

348
00:16:09,840 --> 00:16:12,080
Speaker 1: sell in twelve eighteen months, exactly, you're just not gonna

349
00:16:12,120 --> 00:16:13,360
Speaker 1: make it back and it's gonna be more of a

350
00:16:13,360 --> 00:16:15,480
Speaker 1: hassle than it's worth. So ryan at the same time,

351
00:16:15,480 --> 00:16:18,760
Speaker 1: make sure to shop with multiple lenders before you make

352
00:16:18,800 --> 00:16:21,280
Speaker 1: a decision. If you're a Costco member. You mentioned Costco

353
00:16:21,360 --> 00:16:24,040
Speaker 1: again here. Uh, that is a great place to go

354
00:16:24,080 --> 00:16:27,120
Speaker 1: to get quotes um through through their mortgage refinance service.

355
00:16:27,160 --> 00:16:30,040
Speaker 1: Also look at better dot Com, Rocket Mortgage, and local

356
00:16:30,040 --> 00:16:32,960
Speaker 1: credit unions. Those are all great places to to shop

357
00:16:33,040 --> 00:16:36,080
Speaker 1: rates and to compare terms that could save you hundreds,

358
00:16:36,120 --> 00:16:39,000
Speaker 1: if not thousands of dollars in closing costs. You know,

359
00:16:39,040 --> 00:16:41,800
Speaker 1: if Aldi had mortgages, they would only offer the fifteen

360
00:16:41,840 --> 00:16:44,120
Speaker 1: year mortgage. It would be crazy cheap, and the underwriting

361
00:16:44,120 --> 00:16:47,720
Speaker 1: it wouldn't exist. It's just like instantaneous approval. They're just

362
00:16:47,760 --> 00:16:49,160
Speaker 1: gonna want to get you through that line as quickly

363
00:16:49,160 --> 00:16:51,000
Speaker 1: as possible. Well, they might screw things up if they

364
00:16:51,040 --> 00:16:53,080
Speaker 1: didn't do underwriting correctly though, But no, I agree. I

365
00:16:53,120 --> 00:16:55,040
Speaker 1: think that's all formula as an algorithm for the most

366
00:16:55,080 --> 00:16:57,680
Speaker 1: part these days too. But yeah, Aldi does everything well

367
00:16:57,720 --> 00:16:59,560
Speaker 1: with groceries. I mean, I could see him getting into

368
00:16:59,600 --> 00:17:02,400
Speaker 1: something else, maybe maybe some morgane refinancing. And Ryan, you're

369
00:17:02,400 --> 00:17:05,080
Speaker 1: asking about rolling the closing costs into the loan. We're

370
00:17:05,080 --> 00:17:08,520
Speaker 1: fine with that, especially if you're jumping on a really

371
00:17:08,600 --> 00:17:11,600
Speaker 1: really low rate. You know, if not paying the closing

372
00:17:11,600 --> 00:17:14,040
Speaker 1: costs out of pocket, if that allows you to prioritize

373
00:17:14,280 --> 00:17:16,760
Speaker 1: other financial goals like saving and investing. Then we would

374
00:17:16,760 --> 00:17:19,200
Speaker 1: say go ahead and roll those costs into the mortgage

375
00:17:19,240 --> 00:17:22,160
Speaker 1: into the loan amount. However, if you've got additional cash

376
00:17:22,240 --> 00:17:25,320
Speaker 1: on hand that you might otherwise spend frivolously, you know,

377
00:17:25,400 --> 00:17:27,200
Speaker 1: just like on a jet ski, let the see that's

378
00:17:27,240 --> 00:17:29,560
Speaker 1: that's like your classic go to of a of a

379
00:17:29,560 --> 00:17:32,040
Speaker 1: waste of money. If that's the situation that you might

380
00:17:32,119 --> 00:17:35,080
Speaker 1: see yourself kind of slipping into, we'd rather see you

381
00:17:35,160 --> 00:17:38,320
Speaker 1: pay for those closing costs now out of pocket, almost

382
00:17:38,359 --> 00:17:41,000
Speaker 1: as a means of forced savings, and be on that too.

383
00:17:41,240 --> 00:17:43,280
Speaker 1: It really is a great time to refinance with a

384
00:17:43,320 --> 00:17:45,920
Speaker 1: thirty year rates at all time lows these days. Yeah,

385
00:17:45,920 --> 00:17:47,960
Speaker 1: if you look at the stats, that are still millions

386
00:17:47,960 --> 00:17:51,200
Speaker 1: and millions and millions of American homeowners who could benefit

387
00:17:51,320 --> 00:17:53,959
Speaker 1: financially from doing a refinance right now, but a lot

388
00:17:54,000 --> 00:17:56,560
Speaker 1: of people still haven't jumped on it. And actually your

389
00:17:56,600 --> 00:17:59,960
Speaker 1: procrastination might be to your benefit because rates have continued

390
00:18:00,040 --> 00:18:02,680
Speaker 1: to sink lower. They're incredibly low right now. You could

391
00:18:02,680 --> 00:18:05,439
Speaker 1: potentially get a thirty year rate in the upper twos

392
00:18:05,560 --> 00:18:08,080
Speaker 1: or fifteen year rate below two and a half percent.

393
00:18:08,200 --> 00:18:09,520
Speaker 1: So if you're planning on being in that house for

394
00:18:09,560 --> 00:18:12,320
Speaker 1: a while, um, and you could save a substantial amount.

395
00:18:12,440 --> 00:18:15,080
Speaker 1: Refinancing makes sense for a whole lot of people these days.

396
00:18:15,160 --> 00:18:17,160
Speaker 1: But let's get to our next question, Matt. This one's

397
00:18:17,160 --> 00:18:19,840
Speaker 1: about a Wrath account with high fees and also having

398
00:18:19,840 --> 00:18:22,240
Speaker 1: to have a conversation with your dad about it. Hey,

399
00:18:22,320 --> 00:18:25,040
Speaker 1: Joel and Matt love the show. This is Owen from

400
00:18:25,040 --> 00:18:28,919
Speaker 1: North Carolina. I have a Roth IRA a account retirement question.

401
00:18:29,480 --> 00:18:32,080
Speaker 1: So I have two Roth accounts. One was started by

402
00:18:32,080 --> 00:18:35,080
Speaker 1: my dad when I was a teenager and one was

403
00:18:35,119 --> 00:18:37,680
Speaker 1: started by me a couple of years ago. The one

404
00:18:37,720 --> 00:18:40,400
Speaker 1: started by my dad has an expense ratio of one

405
00:18:40,560 --> 00:18:43,600
Speaker 1: point three two percent, and the Vanguard account I started

406
00:18:43,640 --> 00:18:45,639
Speaker 1: a couple of years ago has an expense ratio of

407
00:18:45,680 --> 00:18:49,280
Speaker 1: point one. I want to roll over the one that

408
00:18:49,359 --> 00:18:52,160
Speaker 1: my dad started into Vanguard and wanted to get your

409
00:18:52,200 --> 00:18:54,639
Speaker 1: thoughts first, because it's going to be difficult when I

410
00:18:54,640 --> 00:18:56,720
Speaker 1: tell him that I'm moving away from the same person

411
00:18:56,760 --> 00:19:01,480
Speaker 1: that's his financial advisor as well. Let me know your thoughts, guy. Thanks, ohhen,

412
00:19:01,520 --> 00:19:03,560
Speaker 1: thank you so much for that question. A man, it's

413
00:19:03,560 --> 00:19:05,600
Speaker 1: really cool of your dad to have started a roth

414
00:19:05,680 --> 00:19:07,840
Speaker 1: ira a for you, even if it is one with

415
00:19:07,960 --> 00:19:10,399
Speaker 1: super high fees. You know, if you look at the

416
00:19:10,400 --> 00:19:13,760
Speaker 1: performance of the SMPF i've hundred over the past fifteen years,

417
00:19:13,800 --> 00:19:15,359
Speaker 1: you know, which could have been when your dad opened

418
00:19:15,520 --> 00:19:18,159
Speaker 1: that account for you, you you see an average return of

419
00:19:18,400 --> 00:19:21,119
Speaker 1: over ten percent, and that includes the massive bear market

420
00:19:21,119 --> 00:19:23,840
Speaker 1: from the housing crisis. And so just a quick illustration

421
00:19:24,240 --> 00:19:27,640
Speaker 1: of how amazing compound interest is. And fifteen years ago,

422
00:19:27,800 --> 00:19:31,000
Speaker 1: the maximum contribution limit for a roth ira was four

423
00:19:31,040 --> 00:19:33,640
Speaker 1: thousand dollars, right, and so if you had invested four

424
00:19:33,680 --> 00:19:36,679
Speaker 1: thousand dollars every year for the past fifteen years right

425
00:19:36,760 --> 00:19:39,240
Speaker 1: now today, you would have over one hundred and fifty

426
00:19:39,400 --> 00:19:44,080
Speaker 1: thousand dollars. Wow, boom, that's impressive. That is amazing. Yeah,

427
00:19:44,160 --> 00:19:47,840
Speaker 1: So yeah, compounding is huge. The earlier you can get

428
00:19:47,840 --> 00:19:50,600
Speaker 1: your kids started with a wrath if they have earned income,

429
00:19:50,920 --> 00:19:53,080
Speaker 1: the better they will be. And it sounds like Ohen

430
00:19:53,200 --> 00:19:55,040
Speaker 1: is in a pretty good spot except for those fees.

431
00:19:55,040 --> 00:19:56,840
Speaker 1: So let's talk about that. Well, let's talk about this

432
00:19:56,840 --> 00:19:59,159
Speaker 1: combo as well, Matt, right, Um, Like you and I

433
00:19:59,200 --> 00:20:02,120
Speaker 1: we've talked a lot about how important but also how

434
00:20:02,119 --> 00:20:05,080
Speaker 1: difficult it can be to have financial conversations with people

435
00:20:05,119 --> 00:20:08,880
Speaker 1: that you love, UM, your significant other, your parents, a sibling,

436
00:20:09,240 --> 00:20:12,840
Speaker 1: but they are almost always worth having at the same time.

437
00:20:13,160 --> 00:20:15,920
Speaker 1: And for Owen, I think if his dad was intentional

438
00:20:16,119 --> 00:20:19,040
Speaker 1: enough with money to help him start funding a ROTH

439
00:20:19,080 --> 00:20:21,560
Speaker 1: in the first place, my guess is that if Owen

440
00:20:21,720 --> 00:20:24,560
Speaker 1: starts a conversation UM and talks about the impact of

441
00:20:24,600 --> 00:20:27,560
Speaker 1: fees on the future performance of this money that his

442
00:20:27,640 --> 00:20:29,800
Speaker 1: dad cared so much to set aside, that his dad

443
00:20:29,840 --> 00:20:32,720
Speaker 1: will be pretty receptive UM, and his dad will understand

444
00:20:32,840 --> 00:20:35,600
Speaker 1: why he's moving his money to a low cost company

445
00:20:35,840 --> 00:20:40,160
Speaker 1: like Vanguard, and he'll actually probably be proud and not bummed.

446
00:20:40,400 --> 00:20:41,720
Speaker 1: And I think, Owen, there's a way for you to

447
00:20:41,720 --> 00:20:46,040
Speaker 1: approach that conversation from a standpoint of letting your dad

448
00:20:46,040 --> 00:20:50,200
Speaker 1: know what you've learned, and less from a standpoint of well, Dad,

449
00:20:50,200 --> 00:20:51,800
Speaker 1: you screwed it up and now I'm here to fix it.

450
00:20:52,600 --> 00:20:53,960
Speaker 1: That's just not the way to go about it. But yeah,

451
00:20:53,960 --> 00:20:56,000
Speaker 1: if you approach it, well, I could see your dad

452
00:20:56,040 --> 00:20:59,000
Speaker 1: being incredibly receptive to you making that change. Yeah, having

453
00:20:59,119 --> 00:21:01,560
Speaker 1: some of that evidence there will certainly make that conversation

454
00:21:01,600 --> 00:21:03,720
Speaker 1: a lot easier and so Ohen you know, you'll likely

455
00:21:03,760 --> 00:21:06,239
Speaker 1: want to continue to appeal to his logos, you know,

456
00:21:06,320 --> 00:21:09,480
Speaker 1: like with the rhetorical what is it, rhetorical theorygal, where

457
00:21:09,480 --> 00:21:11,639
Speaker 1: it's like you can appeal to his emotions. No, no,

458
00:21:11,680 --> 00:21:14,840
Speaker 1: we're gonna appeal to his logic. Uh. So to drive

459
00:21:14,880 --> 00:21:17,800
Speaker 1: home how much that one percent fee could cost you, Like,

460
00:21:17,840 --> 00:21:20,960
Speaker 1: that could mean that you would have five ninety thousand

461
00:21:21,000 --> 00:21:24,040
Speaker 1: dollars less in retirement if you leave that money where

462
00:21:24,040 --> 00:21:26,640
Speaker 1: it currently is. That's like a lot less money matter, dude,

463
00:21:26,640 --> 00:21:29,840
Speaker 1: it is a ton less money. Uh, it's a big deal.

464
00:21:29,840 --> 00:21:31,800
Speaker 1: People don't get how big of a deal fees are. Yeah,

465
00:21:31,840 --> 00:21:34,399
Speaker 1: it can massively erode the amount of wealthy amount of

466
00:21:34,440 --> 00:21:37,159
Speaker 1: money that Owen could have in retirement. And again, this

467
00:21:37,240 --> 00:21:39,040
Speaker 1: is all things to compounding. You know the example I

468
00:21:39,040 --> 00:21:41,840
Speaker 1: gave earlier, that was only over a fifteen year period,

469
00:21:42,000 --> 00:21:43,399
Speaker 1: But you take that and you stretch it over like

470
00:21:43,440 --> 00:21:46,000
Speaker 1: a twenty or forty year period, and compounding goes from

471
00:21:46,000 --> 00:21:49,399
Speaker 1: this pretty impressive thing to this almost insurmountable kind of

472
00:21:49,440 --> 00:21:51,760
Speaker 1: thing when when you have it working for you, you

473
00:21:51,800 --> 00:21:54,359
Speaker 1: can almost not help but to see your wealth and

474
00:21:54,359 --> 00:21:57,080
Speaker 1: your money grow. So, yeah, helping your dad see the

475
00:21:57,119 --> 00:22:00,400
Speaker 1: impact of those fees and how a simple move actually

476
00:22:00,520 --> 00:22:03,440
Speaker 1: prevents you from paying those fees is a great conversation.

477
00:22:03,520 --> 00:22:06,640
Speaker 1: It's one worth having, especially since it impacts you so much.

478
00:22:06,680 --> 00:22:10,280
Speaker 1: Oh and so compare apples to apples. Calculate two scenarios

479
00:22:10,560 --> 00:22:13,680
Speaker 1: with the same rate of return, the same annual contributions,

480
00:22:13,800 --> 00:22:16,440
Speaker 1: but with different expense ratios. One if you were to

481
00:22:16,520 --> 00:22:18,440
Speaker 1: keep your wrath in the place that your dad initially

482
00:22:18,440 --> 00:22:21,879
Speaker 1: opened it with that one point three expense ratio, and

483
00:22:21,920 --> 00:22:24,399
Speaker 1: then the other one with your point one five expense

484
00:22:24,520 --> 00:22:27,320
Speaker 1: ratio with the number side by side like that, I

485
00:22:27,320 --> 00:22:30,000
Speaker 1: think it should make a really compelling case for going

486
00:22:30,040 --> 00:22:32,520
Speaker 1: with Vanguard, so much so that it would hopefully maybe

487
00:22:32,560 --> 00:22:35,320
Speaker 1: even encourage your dad to switch over as well. Maybe

488
00:22:35,320 --> 00:22:37,679
Speaker 1: your dad hasn't heard much about the mega impact that

489
00:22:37,760 --> 00:22:40,320
Speaker 1: fees can have on investment returns. I mean, you know,

490
00:22:40,359 --> 00:22:42,960
Speaker 1: one percent doesn't sound all that terrible, but when you

491
00:22:43,080 --> 00:22:46,239
Speaker 1: run the numbers, the impact is self evident. And so

492
00:22:46,320 --> 00:22:48,640
Speaker 1: I would hope approaching your dad with with some kindness

493
00:22:48,760 --> 00:22:51,840
Speaker 1: along with that compelling math would make for a really

494
00:22:51,920 --> 00:22:55,760
Speaker 1: good conversation um and potentially major savings for for both

495
00:22:55,760 --> 00:22:58,080
Speaker 1: of you on your investments in the future. Yeah. No,

496
00:22:58,200 --> 00:23:00,399
Speaker 1: and we noticed too that you're The expense ratio that

497
00:23:00,440 --> 00:23:02,400
Speaker 1: you mentioned with your Vanguard fund is point one five.

498
00:23:02,920 --> 00:23:05,240
Speaker 1: And I'm pretty sure he's looking at a target date

499
00:23:05,280 --> 00:23:08,399
Speaker 1: retirement fund because all those all those funds have expensed

500
00:23:08,440 --> 00:23:10,720
Speaker 1: ratios at point one five and so oh and if

501
00:23:10,720 --> 00:23:12,600
Speaker 1: that's you, good work man, that's a that's a great

502
00:23:12,600 --> 00:23:14,040
Speaker 1: way to go, good fund to be in. You don't

503
00:23:14,040 --> 00:23:15,520
Speaker 1: really have to think about it, just kind of set

504
00:23:15,560 --> 00:23:17,040
Speaker 1: it and forget it. So, all right, we got a

505
00:23:17,040 --> 00:23:20,160
Speaker 1: couple more questions to get to, including turning a primary

506
00:23:20,200 --> 00:23:23,000
Speaker 1: home into a rental home, and we'll get to two

507
00:23:23,000 --> 00:23:34,119
Speaker 1: more questions right after this break. All right, we are

508
00:23:34,160 --> 00:23:36,560
Speaker 1: back from the break. Before we get to that realistate question,

509
00:23:36,880 --> 00:23:39,600
Speaker 1: that question about the essentially the easiest way to become

510
00:23:39,640 --> 00:23:41,720
Speaker 1: a landlord. Before we get to that one, let's take

511
00:23:41,720 --> 00:23:44,640
Speaker 1: this question about what to do with five thousand dollars.

512
00:23:45,280 --> 00:23:47,440
Speaker 1: Hey guys, it's a list of from Chicago. Just wanted

513
00:23:47,440 --> 00:23:49,200
Speaker 1: to say, I'm my new we're gonna listening to the show,

514
00:23:49,240 --> 00:23:51,879
Speaker 1: but loving it so much. It has helped me because

515
00:23:51,880 --> 00:23:54,199
Speaker 1: I've always been good at saving and paying bills, but

516
00:23:54,280 --> 00:23:58,000
Speaker 1: working on the investing aspect. Recently, my dad gave me

517
00:23:58,080 --> 00:24:00,440
Speaker 1: five thousand dollars as a gift as he is starting

518
00:24:00,520 --> 00:24:04,159
Speaker 1: Chemo and received an insurance pay out. I am thirty,

519
00:24:04,320 --> 00:24:07,639
Speaker 1: I have a house, my car is paid off. I

520
00:24:07,720 --> 00:24:10,199
Speaker 1: have about a thousand dollars and credit card debt and

521
00:24:10,320 --> 00:24:13,479
Speaker 1: roughly eleven thousand and savings. I have a four oh

522
00:24:13,480 --> 00:24:15,520
Speaker 1: one K at work, which I have contributed to since

523
00:24:15,560 --> 00:24:18,320
Speaker 1: I was nineteen, and I have a small amount of stacks,

524
00:24:18,320 --> 00:24:21,399
Speaker 1: probably worth about two thousand dollars. However, I do not

525
00:24:21,480 --> 00:24:24,320
Speaker 1: have a wrath account. My house does need some updating.

526
00:24:24,480 --> 00:24:27,200
Speaker 1: My fence is currently held together by hopes and prayers,

527
00:24:27,480 --> 00:24:31,159
Speaker 1: and my furnace is ancient. That being said, the savor

528
00:24:31,240 --> 00:24:33,920
Speaker 1: and me wants to squirrel away the money for a

529
00:24:34,000 --> 00:24:37,400
Speaker 1: rainy day. But is it really for the best? Could

530
00:24:37,400 --> 00:24:39,439
Speaker 1: I somehow add this money to my four o one K?

531
00:24:39,800 --> 00:24:41,960
Speaker 1: Should I just use the cash to replace my fence

532
00:24:41,960 --> 00:24:44,600
Speaker 1: and avoid taking out alan through my credit union? Or

533
00:24:44,640 --> 00:24:46,639
Speaker 1: maybe it's put in a CD where it's still be

534
00:24:46,680 --> 00:24:50,880
Speaker 1: accessible but yields a slightly higher interest rate. Anyway, thanks

535
00:24:50,880 --> 00:24:54,359
Speaker 1: to advance guys, wishing you the very best. He LISTA.

536
00:24:54,359 --> 00:24:56,840
Speaker 1: Thanks for your question, and you know I first want

537
00:24:56,880 --> 00:24:59,040
Speaker 1: to say we wish you and your dad the very

538
00:24:59,080 --> 00:25:01,399
Speaker 1: best right now. I'm so sorry that he's going through

539
00:25:01,680 --> 00:25:05,400
Speaker 1: cancer treatment. What a tough thing, right obviously, and then

540
00:25:05,440 --> 00:25:07,200
Speaker 1: what a what a sweet thing for him to do

541
00:25:07,560 --> 00:25:09,520
Speaker 1: in the middle of this tough time, to to give

542
00:25:09,560 --> 00:25:11,760
Speaker 1: you some some cash to help you out. So yeah,

543
00:25:11,760 --> 00:25:13,880
Speaker 1: we want to, of course help make sure that you

544
00:25:14,040 --> 00:25:16,400
Speaker 1: make the most of that gift and use it well.

545
00:25:17,000 --> 00:25:19,239
Speaker 1: The first thing that Matt and I would say is

546
00:25:19,440 --> 00:25:23,600
Speaker 1: to trust the saver inside of you. I love that

547
00:25:23,640 --> 00:25:26,560
Speaker 1: your first instinct is to squirrel away the cash for

548
00:25:26,560 --> 00:25:28,879
Speaker 1: a rainy day, um or you know, it sounds like

549
00:25:28,960 --> 00:25:30,960
Speaker 1: those rainy days might be coming soon with the furnace

550
00:25:31,000 --> 00:25:33,159
Speaker 1: and the fence, and it sounds like too. After you

551
00:25:33,200 --> 00:25:35,680
Speaker 1: pay off that one thousand dollars in credit card debt,

552
00:25:36,000 --> 00:25:37,800
Speaker 1: which should be the first thing on your list, by

553
00:25:37,800 --> 00:25:39,919
Speaker 1: the way, you should do that immediately. Most of this

554
00:25:40,040 --> 00:25:43,280
Speaker 1: money should go into a straight up savings account. Obviously,

555
00:25:43,400 --> 00:25:46,760
Speaker 1: hope some prayers not typically a great strategy for funding

556
00:25:46,920 --> 00:25:50,199
Speaker 1: house maintenance. Um, you'll likely need a decent chunk in

557
00:25:50,240 --> 00:25:53,320
Speaker 1: the near future for repairs to your home. Especially in

558
00:25:53,359 --> 00:25:55,920
Speaker 1: the personal finance stratosphere, cash can get a bad rapp

559
00:25:55,920 --> 00:25:58,520
Speaker 1: it can become all about investing, and investing is great,

560
00:25:58,800 --> 00:26:00,840
Speaker 1: but at the same time, have that cash in the bank.

561
00:26:01,119 --> 00:26:03,879
Speaker 1: There's nothing better for peace of mind or for paying

562
00:26:03,880 --> 00:26:06,080
Speaker 1: for those things that that pop up. Yeah, it's totally

563
00:26:06,119 --> 00:26:09,439
Speaker 1: man and ALYSSA. One thing that's worth noting. You did

564
00:26:09,560 --> 00:26:11,840
Speaker 1: mention that you have eleven thousand dollars in the bank

565
00:26:11,920 --> 00:26:15,320
Speaker 1: currently in savings, right, and so depending on your expenses

566
00:26:15,359 --> 00:26:17,840
Speaker 1: every month, you know, that could be a pretty solid

567
00:26:17,840 --> 00:26:21,440
Speaker 1: emergency fund that you already have stashed away, but it

568
00:26:21,560 --> 00:26:24,000
Speaker 1: kind of all depends on your monthly expenses, and so

569
00:26:24,080 --> 00:26:25,880
Speaker 1: for you, it might be a good idea to put

570
00:26:25,880 --> 00:26:28,639
Speaker 1: an upper limit on how much you have stashed away

571
00:26:28,920 --> 00:26:31,080
Speaker 1: in savings. That way, you know, you can avoid having

572
00:26:31,119 --> 00:26:33,840
Speaker 1: to think about this regularly. It keeps you from you know,

573
00:26:34,040 --> 00:26:36,159
Speaker 1: constantly feeling like that you might need to save a

574
00:26:36,160 --> 00:26:38,440
Speaker 1: little bit more, but actually setting a limit to where

575
00:26:38,600 --> 00:26:40,280
Speaker 1: you know a goal so that you know once you

576
00:26:40,359 --> 00:26:42,160
Speaker 1: hit that number you no longer have to worry about

577
00:26:42,160 --> 00:26:44,680
Speaker 1: savings at that point. And for most folks around six

578
00:26:44,720 --> 00:26:47,560
Speaker 1: months is great, but if you are a little more conservative,

579
00:26:47,600 --> 00:26:49,520
Speaker 1: you can you know, even set aside up to twelve

580
00:26:49,560 --> 00:26:52,080
Speaker 1: months in your emergency fund. But any more than that

581
00:26:52,160 --> 00:26:54,880
Speaker 1: is just overkilled. We don't feel that that is necessary. Yeah,

582
00:26:54,920 --> 00:26:57,440
Speaker 1: and let let's talk about CDs to Matt Alissa through

583
00:26:57,480 --> 00:26:59,640
Speaker 1: that in there, is it a better idea to lock

584
00:26:59,680 --> 00:27:02,120
Speaker 1: your mond up for I don't know, eleven months a year,

585
00:27:02,240 --> 00:27:04,399
Speaker 1: two years in order to get a little bit of

586
00:27:04,400 --> 00:27:07,720
Speaker 1: a higher return. And actually one of our favorite CD

587
00:27:07,800 --> 00:27:10,600
Speaker 1: products is from Ally. They have a no penalty CD

588
00:27:10,680 --> 00:27:13,439
Speaker 1: product that's really good, that offers more flexibility than the

589
00:27:13,480 --> 00:27:16,479
Speaker 1: average bank offered c D. You're penalized a whole lot

590
00:27:16,560 --> 00:27:18,399
Speaker 1: less if you decide that you do need the cash

591
00:27:18,640 --> 00:27:21,920
Speaker 1: before the term is over. But currently CD rates, Matt,

592
00:27:21,960 --> 00:27:24,080
Speaker 1: they're not very good. They're virtually the same as what

593
00:27:24,160 --> 00:27:27,000
Speaker 1: you'd earn in a high interest savings account. So why

594
00:27:27,040 --> 00:27:29,639
Speaker 1: in the world would you go through the process of

595
00:27:29,640 --> 00:27:31,960
Speaker 1: tying your money up, good question to get the same

596
00:27:32,000 --> 00:27:33,960
Speaker 1: old rate that you can get on a savings account. Well,

597
00:27:34,320 --> 00:27:36,399
Speaker 1: it might actually make sense in some cases. And we

598
00:27:36,440 --> 00:27:38,160
Speaker 1: talked about this, I don't know a few months ago,

599
00:27:38,359 --> 00:27:40,520
Speaker 1: and you actually did this, Matt when we talked about it,

600
00:27:41,160 --> 00:27:43,400
Speaker 1: and I'm sure you're glad you did, because interest rates

601
00:27:43,400 --> 00:27:46,360
Speaker 1: have continued to drop in an environment where interest rates

602
00:27:46,359 --> 00:27:50,080
Speaker 1: are dropping. Locking in at an incredibly low rate in

603
00:27:50,119 --> 00:27:52,920
Speaker 1: the CD can actually make sense because race for savers

604
00:27:52,920 --> 00:27:55,399
Speaker 1: are continuing to decline. So when you locked in, do

605
00:27:55,400 --> 00:27:57,280
Speaker 1: you remember what your rate was at? Of course one

606
00:27:57,280 --> 00:27:59,920
Speaker 1: point three baby, don't mean to brag, but I've got

607
00:28:00,040 --> 00:28:03,560
Speaker 1: point seven percent on you, buddy. I mean, that's that's huge, right,

608
00:28:03,600 --> 00:28:05,480
Speaker 1: that was a really smart move. It is. I mean,

609
00:28:05,480 --> 00:28:07,439
Speaker 1: when you look at it from like a personage standpoint, right,

610
00:28:07,440 --> 00:28:09,400
Speaker 1: it's like, oh wow, that's more than twice as much

611
00:28:09,440 --> 00:28:11,600
Speaker 1: as you know what rates are currently, and like big picture,

612
00:28:11,720 --> 00:28:13,480
Speaker 1: it's not a huge deal. But at the same time,

613
00:28:13,520 --> 00:28:15,200
Speaker 1: if you know that you're going to have that money

614
00:28:15,280 --> 00:28:17,240
Speaker 1: set aside and that you're likely not going to need it,

615
00:28:17,280 --> 00:28:20,560
Speaker 1: why not lock it into a CD, especially one where

616
00:28:20,600 --> 00:28:22,639
Speaker 1: if you do need the money, you're not penalized exactly,

617
00:28:22,760 --> 00:28:25,440
Speaker 1: especially a flexible one, yes, like the Ally one. And

618
00:28:25,680 --> 00:28:27,719
Speaker 1: I agree, I think that can be a good spot

619
00:28:28,119 --> 00:28:29,960
Speaker 1: for a LISTA to put some of her money because

620
00:28:30,000 --> 00:28:32,280
Speaker 1: it offers kind of the best of both worlds. Yeah,

621
00:28:32,280 --> 00:28:35,040
Speaker 1: and we're not guaranteeing that high interest savings rates are

622
00:28:35,040 --> 00:28:38,320
Speaker 1: going to continue to drop, but they might, and so

623
00:28:38,480 --> 00:28:40,680
Speaker 1: let's zoom out to the big picture. Alissa, you know,

624
00:28:40,760 --> 00:28:43,440
Speaker 1: we love where your head is at. Investing beyond what

625
00:28:43,480 --> 00:28:46,160
Speaker 1: you already are putting into your workplace account is a

626
00:28:46,200 --> 00:28:48,400
Speaker 1: great goal, but we don't want you to do that

627
00:28:48,480 --> 00:28:50,920
Speaker 1: at the risk of not having the savings you need

628
00:28:51,120 --> 00:28:53,800
Speaker 1: in order to pay for some necessary repairs that you

629
00:28:53,840 --> 00:28:55,840
Speaker 1: need to take care of soon. So come up with

630
00:28:55,880 --> 00:28:59,440
Speaker 1: a plan to start investing as you accomplished that goal

631
00:28:59,480 --> 00:29:02,680
Speaker 1: of having at least six months of savings on hand

632
00:29:03,080 --> 00:29:05,160
Speaker 1: and then you know you're investing. Plan could be pretty

633
00:29:05,160 --> 00:29:07,600
Speaker 1: easy and straightforward. You could just start to contribute maybe

634
00:29:07,600 --> 00:29:09,840
Speaker 1: a hundred dollars a month to a roth ira A

635
00:29:10,000 --> 00:29:12,560
Speaker 1: with a company like Fidelity or m one Um. You

636
00:29:12,560 --> 00:29:15,240
Speaker 1: could even look at maybe Vanguard. Uh, that's another great

637
00:29:15,240 --> 00:29:17,320
Speaker 1: company that we mentioned in a in a question earlier

638
00:29:17,320 --> 00:29:19,800
Speaker 1: in this episode, but they do have a minimum investment

639
00:29:19,840 --> 00:29:23,640
Speaker 1: amounts of one thousand dollars. Yeah. Ultimately, just saving money

640
00:29:23,840 --> 00:29:26,640
Speaker 1: and never investing anything, um, you're never going to be

641
00:29:26,720 --> 00:29:29,080
Speaker 1: able to get ahead and really really save well for

642
00:29:29,120 --> 00:29:32,640
Speaker 1: the future unless you take advantage of these tax advantage

643
00:29:32,720 --> 00:29:35,640
Speaker 1: investment accounts like opening up your own wrath IRA and Alyssa.

644
00:29:35,680 --> 00:29:37,840
Speaker 1: It sounds like you're getting close. Make sure you run

645
00:29:37,880 --> 00:29:39,800
Speaker 1: the numbers on your expenses that you have at least

646
00:29:39,840 --> 00:29:41,920
Speaker 1: that six months saved up, and then start doing what

647
00:29:41,960 --> 00:29:44,040
Speaker 1: Matt said, and you can start even with just a

648
00:29:44,080 --> 00:29:46,280
Speaker 1: little bit that will get you going. Um. So, best

649
00:29:46,320 --> 00:29:47,959
Speaker 1: of luck to you, and best of luck to your

650
00:29:48,040 --> 00:29:50,600
Speaker 1: dad too as as treatment continues. That's right man. It's

651
00:29:50,600 --> 00:29:52,400
Speaker 1: almost like a dance, right. You want to have that

652
00:29:52,680 --> 00:29:55,880
Speaker 1: stability of having savings. That way your financial life doesn't

653
00:29:55,880 --> 00:29:57,720
Speaker 1: get up ended. But at the same time, like you said,

654
00:29:57,760 --> 00:29:59,560
Speaker 1: if you're only saving, you're not going to be able

655
00:29:59,560 --> 00:30:01,160
Speaker 1: to really get a head when it comes to your retirement.

656
00:30:01,200 --> 00:30:03,959
Speaker 1: Can never outpace inflation that way. That's right man. All right.

657
00:30:04,000 --> 00:30:06,520
Speaker 1: Next question is about real estate. Let's talk about the

658
00:30:06,560 --> 00:30:09,280
Speaker 1: easiest way that most listeners out there can get into

659
00:30:09,440 --> 00:30:12,600
Speaker 1: being a small time landlord. Hey, Joel and Matt, this

660
00:30:12,680 --> 00:30:14,840
Speaker 1: is Tim in Fargo, North Dakota. I've loved all of

661
00:30:14,840 --> 00:30:17,440
Speaker 1: your episodes, even the early ones. My wife and I

662
00:30:17,480 --> 00:30:21,320
Speaker 1: purchased our home in and we've paid down our balance

663
00:30:21,360 --> 00:30:23,840
Speaker 1: aggressively and expect to have it all paid off within

664
00:30:23,920 --> 00:30:26,200
Speaker 1: five years. At that time, we're looking to move into

665
00:30:26,200 --> 00:30:28,479
Speaker 1: a new house and use our old house as a rental.

666
00:30:29,120 --> 00:30:30,880
Speaker 1: My hope is to get a load and no interest

667
00:30:30,920 --> 00:30:33,240
Speaker 1: loan from family to make the down payment on the

668
00:30:33,240 --> 00:30:35,880
Speaker 1: new home and pay back that loan from the proceeds

669
00:30:35,880 --> 00:30:38,440
Speaker 1: of the rental. Are there any pitfalls that I should

670
00:30:38,440 --> 00:30:40,800
Speaker 1: be looking out for? Will the down payment loan from

671
00:30:40,800 --> 00:30:42,880
Speaker 1: my family make it more difficult to get a traditional

672
00:30:42,880 --> 00:30:45,760
Speaker 1: mortgage on the new home? Thanks again for all your advice, guys.

673
00:30:45,760 --> 00:30:48,280
Speaker 1: I've really enjoyed the show. Tim Thanks for your question. First,

674
00:30:48,280 --> 00:30:50,800
Speaker 1: I gotta say I love Fargo and not the town,

675
00:30:51,280 --> 00:30:53,480
Speaker 1: the movie and the TV show. I haven't actually been

676
00:30:53,520 --> 00:30:56,240
Speaker 1: to Fargo, although I'm sure i'd love it, but Joel's

677
00:30:56,240 --> 00:30:59,600
Speaker 1: a big fan of that wood chipper scene. So good,

678
00:30:59,640 --> 00:31:02,600
Speaker 1: so clad, sick, but really man, every every season of

679
00:31:02,640 --> 00:31:04,440
Speaker 1: the show. I was like surprised when they turned it

680
00:31:04,440 --> 00:31:06,000
Speaker 1: into a TV show because I was like, the movie

681
00:31:06,040 --> 00:31:07,640
Speaker 1: was so great, how can you even try to rip

682
00:31:07,680 --> 00:31:09,520
Speaker 1: off that? But it's been awesome. They like, it's been

683
00:31:09,520 --> 00:31:11,880
Speaker 1: a really really good TV show too. Um So I

684
00:31:11,960 --> 00:31:16,080
Speaker 1: highly recommend it if you're into wood chippers. Yeah, maybe

685
00:31:16,160 --> 00:31:19,680
Speaker 1: a little bit of violence, but um yeah. Congrats by

686
00:31:19,720 --> 00:31:22,520
Speaker 1: the way, Tam on making so much progress on paying

687
00:31:22,560 --> 00:31:25,240
Speaker 1: down your home. That's awesome shows a lot of dedication

688
00:31:25,520 --> 00:31:27,160
Speaker 1: and very cool too that you're able to get a

689
00:31:27,200 --> 00:31:32,240
Speaker 1: down payment alone, essentially from helpful family members. That's a really,

690
00:31:32,280 --> 00:31:34,640
Speaker 1: really fortunate thing to have. But man, let's talk about

691
00:31:34,640 --> 00:31:36,640
Speaker 1: how he can make that work without messing up the

692
00:31:36,640 --> 00:31:38,360
Speaker 1: financing he needs to get. Yeah, that's kind of a

693
00:31:38,400 --> 00:31:40,520
Speaker 1: unique situation that, Yeah, Tim, that you're in right where

694
00:31:40,520 --> 00:31:43,600
Speaker 1: you're able to borrow that money from family members. Um,

695
00:31:43,680 --> 00:31:45,320
Speaker 1: And I guess I want to mention that because I

696
00:31:45,360 --> 00:31:48,520
Speaker 1: think you need to be aware of the fact that

697
00:31:48,560 --> 00:31:51,720
Speaker 1: borrowing money from family how that could possibly change the

698
00:31:51,720 --> 00:31:54,320
Speaker 1: family dynamics a little bit. I think receiving a one

699
00:31:54,360 --> 00:31:57,280
Speaker 1: time gift doesn't concern me right because it's like, here's

700
00:31:57,280 --> 00:31:59,680
Speaker 1: a gift, do what you want with it, or we

701
00:32:00,040 --> 00:32:01,640
Speaker 1: back that you will put the stwards, you know, your

702
00:32:01,640 --> 00:32:04,440
Speaker 1: house or down payment something like that. But beyond that,

703
00:32:04,480 --> 00:32:07,160
Speaker 1: there aren't any strings attached. Versus having a loan, I

704
00:32:07,200 --> 00:32:09,400
Speaker 1: feel like that could potentially make things a little bit awkward,

705
00:32:09,520 --> 00:32:11,680
Speaker 1: you know, like you're sitting around and they're like, Hey,

706
00:32:11,720 --> 00:32:14,080
Speaker 1: how's the how's the loan repayment coming along? You know?

707
00:32:14,600 --> 00:32:16,320
Speaker 1: I feel like that can make things a little bit weird,

708
00:32:16,360 --> 00:32:18,720
Speaker 1: and so I don't know in those instances, that might

709
00:32:18,720 --> 00:32:21,920
Speaker 1: be a situation where instead of you know, paying down

710
00:32:21,920 --> 00:32:24,960
Speaker 1: your house that you're currently in aggressively to instead save

711
00:32:25,040 --> 00:32:27,200
Speaker 1: up for a down payment yourself. You don't necessarily have

712
00:32:27,280 --> 00:32:29,880
Speaker 1: to pay off that mortgage completely before you move out

713
00:32:29,920 --> 00:32:32,600
Speaker 1: of there, before you you know, convert that into a rental,

714
00:32:32,760 --> 00:32:35,640
Speaker 1: So instead of paying down that loan aggressively, focusing that

715
00:32:35,680 --> 00:32:38,240
Speaker 1: money towards, you know, creating your own down payment, I

716
00:32:38,240 --> 00:32:39,680
Speaker 1: see that being a good way that you could potentially

717
00:32:39,800 --> 00:32:41,800
Speaker 1: keep things a little more simple. Yeah, yeah, man, I

718
00:32:41,960 --> 00:32:45,040
Speaker 1: think that's a great point. So much of this whole thing,

719
00:32:45,200 --> 00:32:47,800
Speaker 1: there's so much of borrowing this money depends on what

720
00:32:47,840 --> 00:32:50,239
Speaker 1: your relationship is like with the family member loaning your

721
00:32:50,280 --> 00:32:52,520
Speaker 1: money and whether or not that's going to become a

722
00:32:52,520 --> 00:32:54,800
Speaker 1: big deal in the future. That you kind of gotta

723
00:32:54,840 --> 00:32:57,240
Speaker 1: put your hand to the wind and see where you

724
00:32:57,240 --> 00:32:59,440
Speaker 1: think the wind blowing in that, because you don't want

725
00:32:59,440 --> 00:33:01,760
Speaker 1: to get yourself in a position where you're compromising a

726
00:33:01,840 --> 00:33:05,000
Speaker 1: relationship over money, right, And I agree, like you said,

727
00:33:05,000 --> 00:33:07,600
Speaker 1: I'd rather still have a mortgage on the home I

728
00:33:07,600 --> 00:33:09,240
Speaker 1: currently live in that I'm now going to rent out.

729
00:33:09,600 --> 00:33:13,000
Speaker 1: And self fund this new home purchase, not take any

730
00:33:13,040 --> 00:33:15,600
Speaker 1: family money if it's going to alter a relationship and

731
00:33:15,640 --> 00:33:17,880
Speaker 1: it's gonna make the family dynamic weird. Yeah, and especially

732
00:33:17,880 --> 00:33:20,680
Speaker 1: considering where interest rates are right now, Right, if he

733
00:33:20,720 --> 00:33:22,880
Speaker 1: can potentially save up a down payment within the next

734
00:33:22,920 --> 00:33:24,719
Speaker 1: couple of years, there's a really good chance that he's

735
00:33:24,760 --> 00:33:27,280
Speaker 1: gonna be at these rock bottom interest rates. Uh, and

736
00:33:27,360 --> 00:33:29,560
Speaker 1: so I would hate I mean, in five years, six

737
00:33:29,640 --> 00:33:32,200
Speaker 1: years from now, those rates could still be pretty low,

738
00:33:32,240 --> 00:33:34,840
Speaker 1: but you know that right now, they're pretty much guaranteed

739
00:33:34,880 --> 00:33:36,640
Speaker 1: to be that low. Right, All right, Well, let's talk

740
00:33:36,640 --> 00:33:39,880
Speaker 1: about two. Let's get specifically to Tim's question, and well,

741
00:33:39,880 --> 00:33:41,960
Speaker 1: how could this family loan make it difficult to get

742
00:33:41,960 --> 00:33:44,320
Speaker 1: a loan from the bank. Well, the best way to

743
00:33:44,400 --> 00:33:47,280
Speaker 1: avoid complications is to have that money in your bank

744
00:33:47,360 --> 00:33:50,880
Speaker 1: account well in advance of applying for a loan from

745
00:33:50,920 --> 00:33:53,560
Speaker 1: a banker credit union. That banker credit union wants to

746
00:33:53,560 --> 00:33:56,480
Speaker 1: see that the money has been what's known as seasoned,

747
00:33:56,680 --> 00:33:58,720
Speaker 1: and so they'll typically ask right when you're applying for

748
00:33:58,760 --> 00:34:01,320
Speaker 1: a loan, for two to three months of bank statements,

749
00:34:01,560 --> 00:34:04,760
Speaker 1: and they're gonna ask questions based on any major deposits

750
00:34:04,800 --> 00:34:07,200
Speaker 1: that have come in over the prior two to three months.

751
00:34:07,400 --> 00:34:09,960
Speaker 1: So having that money deposited at least ninety days in

752
00:34:09,920 --> 00:34:12,399
Speaker 1: advance of applying for your loan is going to make

753
00:34:12,400 --> 00:34:15,239
Speaker 1: the process a whole lot smoother for you. It means

754
00:34:15,239 --> 00:34:18,520
Speaker 1: they're fewer who's to jump through, less questions asked, and

755
00:34:18,840 --> 00:34:22,080
Speaker 1: fewer potential delays in getting your loan approved. So, yeah,

756
00:34:22,160 --> 00:34:24,319
Speaker 1: make sure those funds are seasoned in order to make

757
00:34:24,400 --> 00:34:27,200
Speaker 1: that process easy. Yeah. Season like a good cast iron skillet,

758
00:34:27,280 --> 00:34:29,440
Speaker 1: you know, not not like salt and pepper seasoned. It

759
00:34:29,520 --> 00:34:31,160
Speaker 1: just needs to take time, like you have to actually

760
00:34:31,200 --> 00:34:35,200
Speaker 1: cook on it like a season. Yeah, exactly. So that's

761
00:34:35,200 --> 00:34:36,520
Speaker 1: what you need to do with your money. Here's him

762
00:34:36,520 --> 00:34:38,359
Speaker 1: that money needs to be in your accounts for Yeah,

763
00:34:38,400 --> 00:34:40,279
Speaker 1: ideally if you want to play it safe for three months.

764
00:34:40,520 --> 00:34:42,200
Speaker 1: And by the way, I love the strategy of renting

765
00:34:42,239 --> 00:34:44,719
Speaker 1: out a home that you used to live in. This

766
00:34:44,880 --> 00:34:46,600
Speaker 1: is something that our family has done all you have

767
00:34:46,680 --> 00:34:48,759
Speaker 1: done this multiple times now, and say, when you own

768
00:34:48,840 --> 00:34:52,000
Speaker 1: that home mortgage free, man, that means major cash flow

769
00:34:52,120 --> 00:34:55,080
Speaker 1: coming your way. That is awesome. It's obviously taken a

770
00:34:55,160 --> 00:34:57,440
Speaker 1: lot of dedication on your part, but man, keep up

771
00:34:57,440 --> 00:34:59,640
Speaker 1: the good work. Because it will feel so good to

772
00:35:00,040 --> 00:35:02,359
Speaker 1: to have that rental income coming in every single month,

773
00:35:02,560 --> 00:35:04,799
Speaker 1: no doubt. Best of luck him. Hopefully we didn't scare

774
00:35:04,840 --> 00:35:07,400
Speaker 1: you off too much from taking that family loan. It

775
00:35:07,480 --> 00:35:09,080
Speaker 1: all comes down to the family, you know, like like

776
00:35:09,280 --> 00:35:11,600
Speaker 1: they might have the most healthy family where they talk

777
00:35:11,640 --> 00:35:14,279
Speaker 1: about money openly. Nobody's ever holding anything over your head.

778
00:35:14,320 --> 00:35:16,360
Speaker 1: There's no weirdness going on, right, So if that's what

779
00:35:16,440 --> 00:35:18,160
Speaker 1: you have going on there with your family, it's almost

780
00:35:18,160 --> 00:35:20,560
Speaker 1: like this sort of secret personal finance weapon that you

781
00:35:20,680 --> 00:35:23,800
Speaker 1: have at your disposal. Again, not everybody has uh family

782
00:35:23,880 --> 00:35:25,520
Speaker 1: that's in a situation like that, But if you do,

783
00:35:25,719 --> 00:35:27,440
Speaker 1: and and it's not going to make things weird, then

784
00:35:27,480 --> 00:35:29,200
Speaker 1: go for it, man, no doubt. All right, Matt, let's

785
00:35:29,200 --> 00:35:30,879
Speaker 1: get back to the beer that we had on the show.

786
00:35:31,040 --> 00:35:34,479
Speaker 1: This was a black raspberry sour brewed by Westbrook Brewing

787
00:35:34,520 --> 00:35:36,400
Speaker 1: Company out of South Carolina. Who are your thoughts on

788
00:35:36,480 --> 00:35:38,400
Speaker 1: this beer, man, Dude, I really liked it. Westbrook They

789
00:35:38,440 --> 00:35:40,360
Speaker 1: makes some amazing beer, so it doesn't surprise me that

790
00:35:40,719 --> 00:35:42,720
Speaker 1: they knocked that out of the park with this series,

791
00:35:42,760 --> 00:35:45,840
Speaker 1: which is I believe the series is fruit would and Time,

792
00:35:47,040 --> 00:35:49,319
Speaker 1: which I love. You know, it get it's a seasoned beer.

793
00:35:49,400 --> 00:35:53,000
Speaker 1: Maybe it really is, but in particular that would for me.

794
00:35:53,080 --> 00:35:55,560
Speaker 1: It's what makes these sours so delicious is it's got

795
00:35:55,640 --> 00:35:58,919
Speaker 1: that oaky element going on. Um. But as we poured

796
00:35:58,960 --> 00:36:01,040
Speaker 1: a man, it had this beautiful ark red color. It

797
00:36:01,160 --> 00:36:04,279
Speaker 1: was tart and fruity. Uh, definitely has some sourness going on.

798
00:36:04,560 --> 00:36:07,279
Speaker 1: And to me, the sourdness almost had like the sauer

799
00:36:07,360 --> 00:36:10,040
Speaker 1: Kraut like flavor going on. It almost had like this

800
00:36:10,120 --> 00:36:13,560
Speaker 1: pickled cabbage flavor, which sounds really weird, but it really worked.

801
00:36:14,000 --> 00:36:16,680
Speaker 1: It was really acidic and really aggressive. But I really

802
00:36:16,760 --> 00:36:18,560
Speaker 1: liked it. Yeah. I liked it too. Man. I thought

803
00:36:18,600 --> 00:36:20,200
Speaker 1: the color was actually kind of like a crushed red

804
00:36:20,280 --> 00:36:23,040
Speaker 1: velvet sort of color. Yeah. Yeah, And the taste was

805
00:36:23,120 --> 00:36:26,640
Speaker 1: actually kind of similar. It was velvety, smooth, it was rich.

806
00:36:27,200 --> 00:36:30,200
Speaker 1: The raspberry goodness was so good mixed with the hint

807
00:36:30,320 --> 00:36:33,439
Speaker 1: of oak from how it was aged. Um, this beer

808
00:36:33,640 --> 00:36:36,160
Speaker 1: was delicious. It was bottled like two and a half

809
00:36:36,280 --> 00:36:38,440
Speaker 1: years ago and it's still holding up nicely. Man. This

810
00:36:38,520 --> 00:36:40,680
Speaker 1: is a bottle conditioned too, because they like introduce other

811
00:36:40,760 --> 00:36:43,800
Speaker 1: cultures and so it actually continues to develop within the

812
00:36:43,880 --> 00:36:47,279
Speaker 1: bottle and it makes it really delicious. Yeah, still tasting phenomenal.

813
00:36:47,440 --> 00:36:49,520
Speaker 1: Right now, has never been up to the Westbrooken person, No,

814
00:36:49,760 --> 00:36:51,719
Speaker 1: somehow I've missed it. I think I gotta go. It's

815
00:36:51,800 --> 00:36:53,880
Speaker 1: it's in South Carolina, but it's near Charleston. I think

816
00:36:53,920 --> 00:36:56,080
Speaker 1: it's a mount pleasant and I've literally never been there

817
00:36:56,120 --> 00:36:58,560
Speaker 1: in person, but for all the delicious beers I've had

818
00:36:58,600 --> 00:37:00,520
Speaker 1: from there, I feel like a road trip is do Yeah,

819
00:37:00,560 --> 00:37:02,480
Speaker 1: for sure. I gotta make that happen one of these days,

820
00:37:02,560 --> 00:37:04,359
Speaker 1: all right, and then we'll swing up to Fargo. Let's

821
00:37:04,360 --> 00:37:07,040
Speaker 1: do it. That's they're very close to. While we're at it, Yes,

822
00:37:07,120 --> 00:37:10,239
Speaker 1: why not? Your geography continues to astound me. How good

823
00:37:10,239 --> 00:37:12,240
Speaker 1: you are a geography? Yeah? Well, will we get to Fargo?

824
00:37:12,320 --> 00:37:14,520
Speaker 1: I really? I mean, if I love the movie of

825
00:37:14,560 --> 00:37:16,600
Speaker 1: the TV show so much, I gotta love the town too, right,

826
00:37:16,640 --> 00:37:18,960
Speaker 1: I love the people. It's inevitable. All right. Well, that's

827
00:37:19,000 --> 00:37:20,719
Speaker 1: gonna do it for this episode, Matt. For folks who

828
00:37:20,760 --> 00:37:22,719
Speaker 1: want show notes for this episode, just go to our

829
00:37:22,800 --> 00:37:25,279
Speaker 1: website at how to money dot com. Yeah, and we

830
00:37:25,360 --> 00:37:27,840
Speaker 1: really hope that you have enjoyed and found this episode helpful.

831
00:37:28,200 --> 00:37:30,080
Speaker 1: If you have, we would love it if you were

832
00:37:30,200 --> 00:37:33,280
Speaker 1: a subscriber if you were a regular listener. So wherever

833
00:37:33,360 --> 00:37:34,719
Speaker 1: it is that you're listening to this episode and make

834
00:37:34,719 --> 00:37:37,160
Speaker 1: sure you mash that subscribe button. Maybe even grab your

835
00:37:37,200 --> 00:37:39,479
Speaker 1: partner's phone as well, pull up podcasts on their phone

836
00:37:39,480 --> 00:37:41,239
Speaker 1: and hit subscribe as well. It can be a nice

837
00:37:41,280 --> 00:37:44,719
Speaker 1: little surprise for it early Christmas gift. Alright, man, that's

838
00:37:44,719 --> 00:37:46,759
Speaker 1: gonna be it for this episode until next time. Best

839
00:37:46,800 --> 00:38:00,120
Speaker 1: Friends Out, Best Friends Out. M