1 00:00:00,120 --> 00:00:02,880 Speaker 1: Welcome to How the Money. I'm Joel and I'm Matt, 2 00:00:03,279 --> 00:00:25,680 Speaker 1: and today we are answering your listener questions. Yeah, Joel, 3 00:00:25,720 --> 00:00:28,400 Speaker 1: As always, we have five listener questions that we're gonna 4 00:00:28,400 --> 00:00:32,240 Speaker 1: answer on this episode. We've got a long distance landbloording question, 5 00:00:32,479 --> 00:00:34,640 Speaker 1: We've got a question out of Philly as to whether 6 00:00:34,720 --> 00:00:37,519 Speaker 1: or not bankruptcy is a good move or not for them, 7 00:00:37,560 --> 00:00:39,239 Speaker 1: And we have a listener asking how she can get 8 00:00:39,240 --> 00:00:42,040 Speaker 1: her sister invested in her wrath I ra a. So 9 00:00:42,080 --> 00:00:44,280 Speaker 1: we'll share our thoughts on those questions, plus a couple 10 00:00:44,280 --> 00:00:46,600 Speaker 1: of others. Should be fun. As always, man, how are 11 00:00:46,560 --> 00:00:49,440 Speaker 1: you doing today, Joel, I'm freaking phenomenal. My friend glad 12 00:00:49,479 --> 00:00:51,720 Speaker 1: to be here with you. More than anything. It's nice 13 00:00:51,760 --> 00:00:53,480 Speaker 1: to get together with my best buddy, have a beer, 14 00:00:53,600 --> 00:00:56,120 Speaker 1: talk about money. I mean, that's why we started this thing. Yeah, 15 00:00:56,120 --> 00:00:58,200 Speaker 1: that's right, man. I wanted to share something real quick 16 00:00:58,240 --> 00:01:01,480 Speaker 1: with you. I noticed the other A got home from 17 00:01:01,520 --> 00:01:04,160 Speaker 1: Target and looked at the receipt and at the bottom 18 00:01:04,160 --> 00:01:05,920 Speaker 1: of the receipt there was a little notice on there 19 00:01:05,920 --> 00:01:08,360 Speaker 1: and I saw the letters hs A the ATENNO went 20 00:01:08,480 --> 00:01:10,320 Speaker 1: up right. That caught my attention because I thought what 21 00:01:10,319 --> 00:01:13,360 Speaker 1: what's this about an h S A and Target is 22 00:01:13,400 --> 00:01:14,880 Speaker 1: now I don't know how long have you been doing this, 23 00:01:14,920 --> 00:01:17,720 Speaker 1: but they are putting the total amount that you may 24 00:01:17,720 --> 00:01:21,160 Speaker 1: have spent on H s A eligible goods at the 25 00:01:21,160 --> 00:01:23,040 Speaker 1: bottom of the receipt. It's just a little notice that 26 00:01:23,080 --> 00:01:25,679 Speaker 1: gets your attention. And they're also including the amount of 27 00:01:25,720 --> 00:01:27,760 Speaker 1: tax that you pay as well, and so that's just 28 00:01:27,840 --> 00:01:30,160 Speaker 1: great that they are making it easier to keep track 29 00:01:30,240 --> 00:01:32,960 Speaker 1: of these expenses. We recently did an episode on hs 30 00:01:33,040 --> 00:01:34,800 Speaker 1: A S. Pretty much the only thing that sucks about 31 00:01:34,880 --> 00:01:36,280 Speaker 1: h s A S is that you have to keep 32 00:01:36,360 --> 00:01:39,120 Speaker 1: up with receipts, and it's gonna be even tougher. Say, 33 00:01:39,120 --> 00:01:40,240 Speaker 1: if you go to the store and you have a 34 00:01:40,280 --> 00:01:42,319 Speaker 1: bunch of stuff mixed into the receipt, it's a lot 35 00:01:42,319 --> 00:01:44,399 Speaker 1: of paperwork. But when they have it broken down like 36 00:01:44,440 --> 00:01:46,840 Speaker 1: that at the bottom for purchases that are going to 37 00:01:46,880 --> 00:01:49,680 Speaker 1: be potentially reimbursable, that will allow you to pull money 38 00:01:49,680 --> 00:01:51,960 Speaker 1: out of your hs A down the road. Man, I 39 00:01:51,960 --> 00:01:54,240 Speaker 1: saw that as a huge win. Made me think that 40 00:01:54,640 --> 00:01:56,720 Speaker 1: some folks over at Target are listening to our podcast 41 00:01:56,760 --> 00:01:58,160 Speaker 1: and find you know, this is something that we can 42 00:01:58,200 --> 00:02:01,440 Speaker 1: do for our customers. Why they are listening, and if 43 00:02:01,480 --> 00:02:03,600 Speaker 1: they are, thanks Target folks. And I gotta say, that's 44 00:02:03,600 --> 00:02:06,400 Speaker 1: another check in the box for a reason. My wife 45 00:02:06,400 --> 00:02:09,160 Speaker 1: would be like, yeah, let's go to Target today because 46 00:02:09,160 --> 00:02:11,560 Speaker 1: she loves Targets. So man who doesn't. And man, I 47 00:02:11,560 --> 00:02:13,400 Speaker 1: gotta say. My friend David came out to me after 48 00:02:13,440 --> 00:02:15,240 Speaker 1: he listened to the hs A episode and he said, 49 00:02:15,800 --> 00:02:18,320 Speaker 1: it's completely changed the way he's investing his money. He's 50 00:02:18,320 --> 00:02:20,680 Speaker 1: putting more money into his hs A and he's starting 51 00:02:20,680 --> 00:02:23,040 Speaker 1: to invest that money instead of letting it just sit there. 52 00:02:23,360 --> 00:02:25,720 Speaker 1: So yeah, H s A is super cool. And Target 53 00:02:26,000 --> 00:02:28,240 Speaker 1: helping those uh, those folks with an H s A 54 00:02:28,320 --> 00:02:30,840 Speaker 1: out very nicely. Did you ever say tar J, you know, 55 00:02:30,880 --> 00:02:32,959 Speaker 1: get all boogie with it? I feel like ten years 56 00:02:33,000 --> 00:02:37,000 Speaker 1: ago folks were saying tar J, but I wasn't into it. No, 57 00:02:37,120 --> 00:02:38,880 Speaker 1: that wasn't me, But I hear I hear people say 58 00:02:38,919 --> 00:02:41,760 Speaker 1: it from time to time. It's like calling Atlanta Hotlanta. 59 00:02:41,960 --> 00:02:44,720 Speaker 1: Just don't do that. That's always all right, Matt. Let's 60 00:02:44,720 --> 00:02:46,960 Speaker 1: mention the beer that we're having on this episode today 61 00:02:46,960 --> 00:02:49,720 Speaker 1: on the show, we're having Moku imperial I p A 62 00:02:50,160 --> 00:02:53,680 Speaker 1: by Lonni Chai Brewing Company out of Hawaii and listener 63 00:02:53,760 --> 00:02:57,800 Speaker 1: Cody sent this one our way, So, uh, Cody, Aloha, 64 00:02:57,880 --> 00:03:00,000 Speaker 1: and thank you for sending this one to us due 65 00:03:00,160 --> 00:03:02,720 Speaker 1: We appreciate it. Yeah, thanks, Gutty. We're looking forward to 66 00:03:02,760 --> 00:03:05,080 Speaker 1: talking about this one at the end of the episode. 67 00:03:05,400 --> 00:03:07,040 Speaker 1: All right, Matt, let's get onto the topic at hand. 68 00:03:07,040 --> 00:03:09,600 Speaker 1: We're taking listener questions, and if you've got a question 69 00:03:09,639 --> 00:03:11,520 Speaker 1: you would like Matt and night at tackle on the show, 70 00:03:11,560 --> 00:03:13,880 Speaker 1: we'd be happy to do it. You can submit your 71 00:03:13,919 --> 00:03:16,800 Speaker 1: question quite easily just by going to how to money 72 00:03:16,840 --> 00:03:19,600 Speaker 1: dot com slash ask and we'd love to feature your 73 00:03:19,680 --> 00:03:22,000 Speaker 1: question in an upcoming episode. But let's get to the 74 00:03:22,000 --> 00:03:25,400 Speaker 1: first one for this week right now. How's it going, guys. 75 00:03:25,480 --> 00:03:27,960 Speaker 1: My name's Forest and I live in Wilton, Colorado. I 76 00:03:27,960 --> 00:03:30,640 Speaker 1: have a question about a real estate versus market investment. 77 00:03:31,080 --> 00:03:32,960 Speaker 1: My wife, Felicia, and I bought the town house five 78 00:03:33,040 --> 00:03:34,920 Speaker 1: years ago and we've decided that we want to move 79 00:03:34,960 --> 00:03:37,240 Speaker 1: to the beach, but don't know whether we should sell 80 00:03:37,240 --> 00:03:39,960 Speaker 1: the house and invest the profits or keep it as 81 00:03:39,960 --> 00:03:43,240 Speaker 1: a rental property. The remaining principle is a hundred forty 82 00:03:43,280 --> 00:03:46,360 Speaker 1: five thousand, but the estimated values two hundred and seventy 83 00:03:46,360 --> 00:03:50,200 Speaker 1: five market rent is around six fifty in our neighborhood. 84 00:03:50,760 --> 00:03:52,360 Speaker 1: The move is going to be after I pay my 85 00:03:52,440 --> 00:03:55,200 Speaker 1: student loaning car off and my wife graduates from college. 86 00:03:55,440 --> 00:03:58,800 Speaker 1: We're hoping only two more winters, with Felicia's student loan 87 00:03:58,920 --> 00:04:01,680 Speaker 1: being our only dead at that point. We're split on 88 00:04:01,720 --> 00:04:06,280 Speaker 1: whether to keep or so inter curious which you think. Thanks, Hey, Forest, 89 00:04:06,280 --> 00:04:08,680 Speaker 1: thanks so much for submitting your question. You know, the 90 00:04:08,680 --> 00:04:11,320 Speaker 1: Colorado real estate market has been hot up there where 91 00:04:11,360 --> 00:04:14,080 Speaker 1: you are, but the beach is also a great place 92 00:04:14,120 --> 00:04:16,800 Speaker 1: to be, so we think that's a fantastic move. Yeah. 93 00:04:16,839 --> 00:04:18,960 Speaker 1: What's hotter a Florida beach in the summer or the 94 00:04:18,960 --> 00:04:21,839 Speaker 1: Colorado real estate market? Man both pretty warm these days, 95 00:04:21,960 --> 00:04:24,080 Speaker 1: true dad. And what's funny is that he mentioned two 96 00:04:24,080 --> 00:04:26,440 Speaker 1: more winters, like there's only two more winters left. It's 97 00:04:26,520 --> 00:04:29,440 Speaker 1: very clear that they don't like the cold move in 98 00:04:29,480 --> 00:04:31,479 Speaker 1: to the beach. I think it's a great move for 99 00:04:31,520 --> 00:04:33,599 Speaker 1: you and your wife. Yeah, when you talk about time 100 00:04:33,760 --> 00:04:36,440 Speaker 1: in terms of winters like that, we know where your 101 00:04:36,440 --> 00:04:38,440 Speaker 1: priorities lie. Right, it sounds like Game of Thrones, like 102 00:04:38,440 --> 00:04:41,080 Speaker 1: only two more winters? Did they say that? I don't know. 103 00:04:41,120 --> 00:04:43,000 Speaker 1: I've never seen the show. Meanither, it's not one of 104 00:04:43,040 --> 00:04:45,479 Speaker 1: our shows, but I hear great things except for about 105 00:04:45,520 --> 00:04:47,280 Speaker 1: that final episode. Man, a lot of people hated that 106 00:04:47,440 --> 00:04:49,719 Speaker 1: that final episode. So if you're not there yet, spoil alert, 107 00:04:49,880 --> 00:04:53,520 Speaker 1: it was okay, all right, So let's get to forest question, 108 00:04:53,920 --> 00:04:57,080 Speaker 1: and should he sell this house, Matt or should he 109 00:04:57,080 --> 00:05:00,000 Speaker 1: rent it out as he's completely moving away from there? 110 00:05:00,160 --> 00:05:02,800 Speaker 1: What do you think? Yeah? Something important worth mentioning though, 111 00:05:02,960 --> 00:05:04,560 Speaker 1: is that forest. He said that when they sold that 112 00:05:04,600 --> 00:05:07,599 Speaker 1: they would invest that money in the market, so either 113 00:05:07,640 --> 00:05:09,679 Speaker 1: way it's a win win. Yeah. If they were gonna 114 00:05:09,720 --> 00:05:12,400 Speaker 1: spend that money on like a couple of vacations or 115 00:05:12,440 --> 00:05:14,520 Speaker 1: a new car, no no, no, no, keep the house, 116 00:05:15,360 --> 00:05:17,960 Speaker 1: but investing it either way, that's a smart move. So 117 00:05:18,000 --> 00:05:20,560 Speaker 1: because of that, this becomes a lifestyle question, right, more 118 00:05:20,560 --> 00:05:22,800 Speaker 1: than anything else. Do you want to become a landlord? 119 00:05:22,880 --> 00:05:26,560 Speaker 1: And specifically do you want to become a long distance landlord? 120 00:05:26,640 --> 00:05:29,320 Speaker 1: Which is a difficult thing to figure out when you've 121 00:05:29,320 --> 00:05:31,719 Speaker 1: never done it before. Yeah, long distance landlording kind of 122 00:05:31,720 --> 00:05:35,640 Speaker 1: comes with its own set of issues or obstacles to overcome. 123 00:05:35,920 --> 00:05:40,920 Speaker 1: It's completely different than landlording locally. So really, in my opinion, 124 00:05:41,040 --> 00:05:44,080 Speaker 1: selling is the most straightforward thing that you could do. 125 00:05:44,520 --> 00:05:47,000 Speaker 1: You won't have to manage a property from long distance, 126 00:05:47,200 --> 00:05:49,680 Speaker 1: and you avoid having to find and hire a really 127 00:05:49,680 --> 00:05:53,840 Speaker 1: good property manager. Property managers typically take the first month's 128 00:05:53,880 --> 00:05:58,279 Speaker 1: rent and then ten percent of ongoing rents for your place, 129 00:05:58,720 --> 00:06:01,240 Speaker 1: so it can be really spencific, can add up over time, 130 00:06:01,240 --> 00:06:03,839 Speaker 1: and it can really cut into the profits that you 131 00:06:03,920 --> 00:06:07,119 Speaker 1: receive for having an investment property. And if you sell 132 00:06:07,279 --> 00:06:10,200 Speaker 1: that primary home, that just ensures that you'll pocket those 133 00:06:10,200 --> 00:06:13,720 Speaker 1: earnings tax free, those capital gains. You won't be taxling that, 134 00:06:13,760 --> 00:06:16,400 Speaker 1: which is very nice. And again that is because it 135 00:06:16,480 --> 00:06:19,360 Speaker 1: is your primary residence and so you have up to 136 00:06:19,480 --> 00:06:24,080 Speaker 1: five dollars that is sheltered from those capital gains tax. Yeah, 137 00:06:24,160 --> 00:06:26,520 Speaker 1: that's a really sweet perk, right, that people don't think 138 00:06:26,520 --> 00:06:29,800 Speaker 1: about when they do decide to run out a primary home. 139 00:06:30,000 --> 00:06:31,640 Speaker 1: I mean, we've talked about on the show before. We 140 00:06:31,640 --> 00:06:33,920 Speaker 1: think that's actually the best. The easiest way to get 141 00:06:33,960 --> 00:06:36,720 Speaker 1: into landlording is to own a home, first, live in it, 142 00:06:36,960 --> 00:06:38,880 Speaker 1: then move and run out the home that you were 143 00:06:38,960 --> 00:06:40,960 Speaker 1: just living in. That's kind of how I got started, 144 00:06:41,120 --> 00:06:42,359 Speaker 1: and I think it makes a lot of sense for 145 00:06:42,560 --> 00:06:45,000 Speaker 1: would be first time landlords. But if you're moving out 146 00:06:45,000 --> 00:06:47,720 Speaker 1: of state and you have that additional set of hurdles, well, 147 00:06:47,760 --> 00:06:50,159 Speaker 1: it might make more sense to sell the home because 148 00:06:50,200 --> 00:06:53,600 Speaker 1: you can pocket that gain tax free, and long distance 149 00:06:53,640 --> 00:06:56,719 Speaker 1: real estate can be difficult to own. If you decide 150 00:06:56,720 --> 00:06:59,559 Speaker 1: that it isn't for you after a couple of years, well, 151 00:06:59,800 --> 00:07:01,800 Speaker 1: it could be more difficult to sell that home from 152 00:07:01,800 --> 00:07:04,440 Speaker 1: far away, and then on top of that, you might 153 00:07:04,480 --> 00:07:07,520 Speaker 1: encour those tax consequences that you wouldn't have if you'd 154 00:07:07,520 --> 00:07:10,680 Speaker 1: sold it immediately. Yeah, Joel, And what's too long is 155 00:07:10,720 --> 00:07:13,360 Speaker 1: if you rent that property for more than three of 156 00:07:13,440 --> 00:07:16,520 Speaker 1: the past five years. Forest, if you did want to 157 00:07:16,560 --> 00:07:19,160 Speaker 1: give landlording a shot, even with it being long distance, 158 00:07:19,480 --> 00:07:21,400 Speaker 1: you want to make sure that you have lived in 159 00:07:21,440 --> 00:07:24,560 Speaker 1: that home at least two of the past five years. 160 00:07:24,800 --> 00:07:26,760 Speaker 1: That's just what the I r S requires. And as 161 00:07:26,760 --> 00:07:28,960 Speaker 1: long as you meet that guideline, you are still able 162 00:07:29,000 --> 00:07:31,640 Speaker 1: to protect those capital gains and you're not taxed on that. 163 00:07:31,760 --> 00:07:33,480 Speaker 1: So just keep that in mind. Yeah, so you can 164 00:07:33,520 --> 00:07:35,480 Speaker 1: give it a shot for a short period of time, 165 00:07:35,640 --> 00:07:38,120 Speaker 1: see how it goes. Maybe it's worth dipping your toes 166 00:07:38,120 --> 00:07:40,520 Speaker 1: in the water and seeing whether it's worth it or not. 167 00:07:40,720 --> 00:07:42,920 Speaker 1: But just make sure you don't hold onto it too long. 168 00:07:43,200 --> 00:07:45,400 Speaker 1: I'd make sure I sold the home before that window 169 00:07:45,480 --> 00:07:48,280 Speaker 1: closed in order to avoid that tax. Yeah, you'd hate 170 00:07:48,320 --> 00:07:50,000 Speaker 1: to miss that by just a couple of months, right. 171 00:07:50,040 --> 00:07:52,960 Speaker 1: Oh yeah, that's super frustrating. So maybe an idea here 172 00:07:53,080 --> 00:07:55,240 Speaker 1: is during these two winters right there you're gonna still 173 00:07:55,240 --> 00:07:57,800 Speaker 1: be in Colorado, is to keep saving and then to 174 00:07:57,880 --> 00:08:00,440 Speaker 1: sell this house when you move, and then when you 175 00:08:00,520 --> 00:08:03,680 Speaker 1: arrive at your beach destination, consider buying a primary and 176 00:08:03,760 --> 00:08:05,920 Speaker 1: a rental house when you get there, or maybe even 177 00:08:05,960 --> 00:08:08,160 Speaker 1: like a multi family and do some house hacking. There's 178 00:08:08,200 --> 00:08:10,840 Speaker 1: so many options, and I'm not necessarily completely against long 179 00:08:10,840 --> 00:08:13,440 Speaker 1: distance landlording. I think it works in some cases. And 180 00:08:13,480 --> 00:08:15,960 Speaker 1: the numbers that you mentioned they're not amazing, but they're 181 00:08:15,960 --> 00:08:19,640 Speaker 1: not terrible, so it just doesn't seem particularly compelling. I 182 00:08:19,640 --> 00:08:21,520 Speaker 1: if I was you, I would look for something close 183 00:08:21,560 --> 00:08:23,720 Speaker 1: by where you're going to be, something that you can 184 00:08:23,760 --> 00:08:25,960 Speaker 1: keep an eye on and potentially self manage. That just 185 00:08:26,000 --> 00:08:28,080 Speaker 1: makes a little more sense to me as you're moving 186 00:08:28,120 --> 00:08:31,320 Speaker 1: to a far away location from where you currently are. Nice, Joel, Yeah, 187 00:08:31,320 --> 00:08:34,120 Speaker 1: a great point. Maybe to provide one more counterpoint though, 188 00:08:34,160 --> 00:08:36,880 Speaker 1: because we love talking about real estate. Is that keep 189 00:08:36,920 --> 00:08:39,680 Speaker 1: in mind that you would be able to diversify your 190 00:08:39,880 --> 00:08:42,600 Speaker 1: real estate holdings. So you know, having a property there 191 00:08:42,600 --> 00:08:45,360 Speaker 1: in Colorado, I couldn't think of anything more distant from 192 00:08:45,520 --> 00:08:47,920 Speaker 1: the mountains than the beach. So just keep that in mind. 193 00:08:47,960 --> 00:08:51,600 Speaker 1: That's another benefits diversification. So Joel, on that note, for you, 194 00:08:51,960 --> 00:08:55,319 Speaker 1: beach house or mountain house. So, because I'm married and 195 00:08:55,400 --> 00:08:57,680 Speaker 1: want to stay married, I would say beach house, I'd 196 00:08:57,679 --> 00:08:59,680 Speaker 1: have to. But if it was just me, man, I'd 197 00:08:59,679 --> 00:09:02,360 Speaker 1: love us aught up in North Carolina, like kind of 198 00:09:01,600 --> 00:09:04,000 Speaker 1: the mountains there. Yeah, that'd be that'd be kind of 199 00:09:04,040 --> 00:09:06,400 Speaker 1: where it's that for me. Um with you, Kate and 200 00:09:06,480 --> 00:09:09,320 Speaker 1: I were totally all about western North Carolina. So I 201 00:09:09,320 --> 00:09:11,240 Speaker 1: think what that means though, is maybe in twenty years, 202 00:09:11,240 --> 00:09:12,880 Speaker 1: when you guys have your beach house, we've got our 203 00:09:12,880 --> 00:09:16,280 Speaker 1: mountain house, we do little swap seas and everybody's happy. 204 00:09:16,400 --> 00:09:21,559 Speaker 1: So what's that face happ picture becomes reality. Well, that's 205 00:09:21,559 --> 00:09:23,760 Speaker 1: like when we're eighty. Hopefully it'll be way before then. 206 00:09:24,080 --> 00:09:27,080 Speaker 1: It's like sixty at least, all right, if not maybe fifty. 207 00:09:27,200 --> 00:09:29,319 Speaker 1: I like your optimism, buddy, Just keep in my head 208 00:09:29,320 --> 00:09:31,200 Speaker 1: in the game all right. We got a couple more 209 00:09:31,280 --> 00:09:33,360 Speaker 1: questions we're gonna get to and we'll hit those up 210 00:09:33,440 --> 00:09:44,360 Speaker 1: right after the break. All right, jel, we are back 211 00:09:44,360 --> 00:09:46,560 Speaker 1: from the break, and now we have a quick question 212 00:09:46,640 --> 00:09:51,000 Speaker 1: about credit cards. Hi, guys, this is Cheryl in Ohio. 213 00:09:51,480 --> 00:09:55,240 Speaker 1: I love your podcast. My question is about applying for 214 00:09:55,320 --> 00:09:59,120 Speaker 1: a new credit card. My credit history is great. I 215 00:09:59,200 --> 00:10:01,040 Speaker 1: have plenty of my in the bank and in my 216 00:10:01,080 --> 00:10:04,840 Speaker 1: flour oh one K. But I'm retired and my income 217 00:10:05,000 --> 00:10:09,640 Speaker 1: is zero. So when I'm applying for a credit card, 218 00:10:10,520 --> 00:10:13,560 Speaker 1: the question about how much money you have coming in? 219 00:10:14,240 --> 00:10:17,119 Speaker 1: I answered zero and I got turned down. I'm not surprised. 220 00:10:17,720 --> 00:10:21,760 Speaker 1: Am I supposed to try to figure out what my 221 00:10:21,880 --> 00:10:26,400 Speaker 1: possible income is? It's a stock market is good that year, 222 00:10:26,640 --> 00:10:29,520 Speaker 1: you know? And what am I supposed to do to 223 00:10:29,600 --> 00:10:32,680 Speaker 1: get a new credit card? Thank you, bye, Cheryl, Thanks 224 00:10:32,679 --> 00:10:35,560 Speaker 1: for listening, and thanks for submitting this question. You know, 225 00:10:35,600 --> 00:10:37,760 Speaker 1: this is kind of something that a lot of us 226 00:10:37,760 --> 00:10:39,800 Speaker 1: have to deal with when it comes to submitting our 227 00:10:40,120 --> 00:10:43,120 Speaker 1: income information to credit card companies. And a lot of 228 00:10:43,160 --> 00:10:45,320 Speaker 1: us have been getting notifications when we log into our 229 00:10:45,320 --> 00:10:48,040 Speaker 1: accounts and the credit card company is asking what's your income? 230 00:10:48,360 --> 00:10:50,360 Speaker 1: And we have to decide whether we want to tell 231 00:10:50,400 --> 00:10:54,000 Speaker 1: them the information at all or much less report accurate information, 232 00:10:54,040 --> 00:10:56,920 Speaker 1: which I don't Condoneline, but it's something that people struggle with. 233 00:10:56,920 --> 00:10:59,160 Speaker 1: They're not even sure whether they should fill out the form. 234 00:10:59,400 --> 00:11:01,840 Speaker 1: When the credit our companies prompt them, I don't really 235 00:11:01,840 --> 00:11:05,680 Speaker 1: just click no thanks, Yeah, I do to remind me later. Yeah, 236 00:11:05,720 --> 00:11:08,360 Speaker 1: But sometimes like they're persistent and they continue to want 237 00:11:08,360 --> 00:11:10,599 Speaker 1: that information. And so an interesting thing to note is 238 00:11:10,640 --> 00:11:12,560 Speaker 1: that if you are a current customer of a credit card, 239 00:11:12,760 --> 00:11:16,640 Speaker 1: you don't have any obligation to share your income information 240 00:11:16,960 --> 00:11:20,199 Speaker 1: with the credit card company. But if you're signing up 241 00:11:20,200 --> 00:11:22,719 Speaker 1: for a credit card, you do have an obligation when 242 00:11:22,720 --> 00:11:25,320 Speaker 1: they ask you to tell them what your income is. 243 00:11:25,760 --> 00:11:27,960 Speaker 1: And Cheryl, I'll tell you this. You are definitely gonna 244 00:11:27,960 --> 00:11:30,640 Speaker 1: be turned down for any credit card if you tell 245 00:11:30,679 --> 00:11:34,079 Speaker 1: them that you have an income of zero. Their number 246 00:11:34,120 --> 00:11:37,640 Speaker 1: crunching algorithms don't really like that. Basically, these companies want 247 00:11:37,679 --> 00:11:40,040 Speaker 1: to know that they aren't approving someone who's not gonna 248 00:11:40,040 --> 00:11:42,000 Speaker 1: be able to pay the bill the of the month. Yeah, 249 00:11:42,080 --> 00:11:44,760 Speaker 1: and Cheryl, you actually do have income, that's the thing. 250 00:11:44,920 --> 00:11:48,240 Speaker 1: If you're retired, you have income from Social Security and 251 00:11:48,280 --> 00:11:50,800 Speaker 1: from that four one k that you mentioned in your message. 252 00:11:51,240 --> 00:11:54,960 Speaker 1: You may not have earned income, but you have unearned income. 253 00:11:55,080 --> 00:11:56,880 Speaker 1: That's the term that the I r S calls it, 254 00:11:57,040 --> 00:11:58,800 Speaker 1: and that totally counts when it comes to filling in 255 00:11:58,840 --> 00:12:02,320 Speaker 1: that information there on the credit card application. Yeah, otherwise, 256 00:12:02,640 --> 00:12:04,840 Speaker 1: how are you paying your bills? How are you paying 257 00:12:04,880 --> 00:12:07,600 Speaker 1: for your rent or mortgage or maybe your mortgage debt free, 258 00:12:07,640 --> 00:12:09,400 Speaker 1: which is great, But you have other bills in your 259 00:12:09,400 --> 00:12:11,600 Speaker 1: life that require some sort of income, and you have 260 00:12:11,720 --> 00:12:14,679 Speaker 1: that income coming in if you're retired, and you pretty 261 00:12:14,720 --> 00:12:16,640 Speaker 1: much have to have some sort of income coming in 262 00:12:16,920 --> 00:12:20,160 Speaker 1: even if you're retired, right, So my best suggestion would 263 00:12:20,200 --> 00:12:22,880 Speaker 1: be to estimate what your annual income is going to be. 264 00:12:23,080 --> 00:12:25,600 Speaker 1: Maybe you're recently retired and you're you're not acent sure 265 00:12:25,679 --> 00:12:27,480 Speaker 1: what it is going to be, yet, we'll give it 266 00:12:27,520 --> 00:12:30,400 Speaker 1: your best shot. Calculate your annual withdrawal amount from your 267 00:12:30,400 --> 00:12:33,760 Speaker 1: four own k plus your average monthly Social Security check 268 00:12:33,800 --> 00:12:36,000 Speaker 1: over the last twelve months and write that number in. 269 00:12:36,200 --> 00:12:38,000 Speaker 1: It doesn't need to be spot on. They're looking for 270 00:12:38,120 --> 00:12:39,920 Speaker 1: a general number of the place where you think that 271 00:12:39,960 --> 00:12:42,040 Speaker 1: you are when it comes to annual income. Yeah, they're 272 00:12:42,040 --> 00:12:44,160 Speaker 1: looking for a ballpark figure because you know you're planning 273 00:12:44,160 --> 00:12:46,559 Speaker 1: for a credit card, not necessarily to get a mortgage. 274 00:12:46,720 --> 00:12:48,439 Speaker 1: Or this isn't you know the I r s where 275 00:12:48,440 --> 00:12:50,880 Speaker 1: you're reporting your earnings to where you would be jailed 276 00:12:50,920 --> 00:12:53,560 Speaker 1: if you know the numbers were slightly inaccurate, and you know, 277 00:12:53,640 --> 00:12:55,560 Speaker 1: for me, this is something I actually have to do. 278 00:12:55,640 --> 00:13:00,000 Speaker 1: Being self employed, my income varies sometimes pretty significantly. Yeah, 279 00:13:00,280 --> 00:13:03,480 Speaker 1: if you're counting your last twelve months versus your projected 280 00:13:03,480 --> 00:13:05,840 Speaker 1: future twelve months, it can be completely different exactly or 281 00:13:05,960 --> 00:13:07,600 Speaker 1: sometimes just the previous year it would have been a 282 00:13:07,600 --> 00:13:10,480 Speaker 1: slower month, and man, I may not get approved. And 283 00:13:10,520 --> 00:13:13,160 Speaker 1: so honestly, in those instances, I just average my past 284 00:13:13,200 --> 00:13:15,320 Speaker 1: few years kind off the top of my head, or 285 00:13:15,360 --> 00:13:17,240 Speaker 1: I just put down whatever I made the previous year. 286 00:13:17,559 --> 00:13:20,439 Speaker 1: You want to get close. You don't want to overrepresents 287 00:13:20,520 --> 00:13:22,080 Speaker 1: how much you make because you're not trying to get 288 00:13:22,120 --> 00:13:23,880 Speaker 1: approved for maybe a business card that's got like a 289 00:13:23,920 --> 00:13:26,720 Speaker 1: twenty or thirty limit something crazy like that. But you 290 00:13:26,760 --> 00:13:29,680 Speaker 1: want to enter in some information that is accurate enough 291 00:13:29,920 --> 00:13:32,720 Speaker 1: to the best of your knowledge, nicely stated matt accurate 292 00:13:32,800 --> 00:13:34,880 Speaker 1: enough to the best of your knowledge. Sometimes I say 293 00:13:34,880 --> 00:13:37,839 Speaker 1: pretty things you should be a lawyer or something man 294 00:13:37,840 --> 00:13:39,640 Speaker 1: that sounds like lawyer language. Yeah, I should not be 295 00:13:39,679 --> 00:13:42,199 Speaker 1: a lawyer. I'll tell you that. I don't want to 296 00:13:42,200 --> 00:13:44,080 Speaker 1: be represented by you. I'll tell you that. All right, 297 00:13:44,120 --> 00:13:48,760 Speaker 1: Let's get to our next question about bankruptcy. Achel. Hey, Matt, 298 00:13:48,880 --> 00:13:51,480 Speaker 1: it's Rtrid from Philadelphia. If Frank came up to me 299 00:13:51,600 --> 00:13:53,720 Speaker 1: not too long ago, tell him he's gonna file for bankruptcy. 300 00:13:54,080 --> 00:13:56,080 Speaker 1: He's in a mid twenties and he he is too 301 00:13:56,120 --> 00:13:58,480 Speaker 1: deep in debt to climb yourself out of. I don't 302 00:13:58,480 --> 00:14:01,440 Speaker 1: know his financial situation too, to be honest, but he 303 00:14:01,480 --> 00:14:03,439 Speaker 1: asked me my opinion, and then it came to me. 304 00:14:03,440 --> 00:14:05,439 Speaker 1: I don't really know much about pancreasy at all, but 305 00:14:05,480 --> 00:14:06,880 Speaker 1: I told him I get back to him about it. 306 00:14:07,280 --> 00:14:09,240 Speaker 1: I know it's not a clear cut yes and no answer, 307 00:14:09,320 --> 00:14:11,199 Speaker 1: but I'd like to know more detail about the positive 308 00:14:11,200 --> 00:14:14,319 Speaker 1: and negatives and the stigmas that holds. Now, since I 309 00:14:14,360 --> 00:14:15,959 Speaker 1: have a little more time, I thought, I squeezing it. 310 00:14:16,000 --> 00:14:18,160 Speaker 1: Beer suggestion for you guys not be in the city 311 00:14:18,160 --> 00:14:20,280 Speaker 1: are probably love. We have a preer rey called Equal Genius. 312 00:14:20,520 --> 00:14:22,440 Speaker 1: They have a load of fantastic beer. As with creative 313 00:14:22,480 --> 00:14:24,800 Speaker 1: and hilarious names. Definitely check out the names. You won't 314 00:14:24,800 --> 00:14:27,760 Speaker 1: be disappointed, I promise my girlfriend and I was favorite 315 00:14:28,000 --> 00:14:31,440 Speaker 1: has to be hashtag I can't even all right, See 316 00:14:31,480 --> 00:14:35,040 Speaker 1: you guys and go birds. Richard. Thanks for your question, man, 317 00:14:35,120 --> 00:14:38,320 Speaker 1: and thanks for the beer recommendation. I always appreciate hearing 318 00:14:38,360 --> 00:14:40,880 Speaker 1: about good new beers, and I did take your suggestion 319 00:14:40,880 --> 00:14:43,360 Speaker 1: and look through some of the names of the beers 320 00:14:43,440 --> 00:14:45,840 Speaker 1: for that brewery, and my favorite would be the hashtag 321 00:14:45,880 --> 00:14:48,040 Speaker 1: adulting quaba, I p A. That's what I go for. 322 00:14:49,000 --> 00:14:50,680 Speaker 1: That's kind of I mean, that's sort of the namesake 323 00:14:50,720 --> 00:14:52,720 Speaker 1: of our podcast, right like how to Money. When we 324 00:14:52,720 --> 00:14:55,480 Speaker 1: talked about that name, we sort of mentioned alongside adulting. 325 00:14:55,560 --> 00:14:57,440 Speaker 1: It's sort of that now that we use as a verb, 326 00:14:57,520 --> 00:14:59,840 Speaker 1: and adulting is up there next to the verb of moneying. 327 00:15:00,000 --> 00:15:02,200 Speaker 1: So we went with how the money they go hand 328 00:15:02,240 --> 00:15:04,040 Speaker 1: in hand? They do? They do? And I'm glad you 329 00:15:04,040 --> 00:15:06,240 Speaker 1: actually looked up some beers because I did as well, 330 00:15:06,440 --> 00:15:09,280 Speaker 1: and I had two favorites, one of which was by Felicia, 331 00:15:09,640 --> 00:15:11,720 Speaker 1: which is totally one of their beer names, which I loved, 332 00:15:11,800 --> 00:15:15,200 Speaker 1: and another one was hashtag asking for a Friend, which 333 00:15:15,200 --> 00:15:17,880 Speaker 1: is completely appropriate because that is what Richard is doing 334 00:15:17,880 --> 00:15:21,280 Speaker 1: with us today. Oh so true. Yeah, so, Richard, bankruptcy 335 00:15:21,440 --> 00:15:24,640 Speaker 1: is not the worst idea ever. There's a great article 336 00:15:24,680 --> 00:15:27,040 Speaker 1: that Joel stumbled upon that we will link to in 337 00:15:27,080 --> 00:15:30,960 Speaker 1: the show notes talking about how bankruptcy has helped some individuals. 338 00:15:31,040 --> 00:15:33,680 Speaker 1: But you know, having a fresh start can really help 339 00:15:34,120 --> 00:15:36,560 Speaker 1: not only with your financial sort of state, but it 340 00:15:36,560 --> 00:15:40,120 Speaker 1: can also dramatically help your mental and your emotional life. 341 00:15:40,520 --> 00:15:43,680 Speaker 1: It's amazing what some breathing room and some margins, especially 342 00:15:43,840 --> 00:15:47,680 Speaker 1: some financial margin, what that can do for your overall health. Yeah. 343 00:15:47,720 --> 00:15:50,200 Speaker 1: And that that article you mentioned, it was a fast 344 00:15:50,240 --> 00:15:52,440 Speaker 1: company article, and there were a few people that spoke 345 00:15:52,520 --> 00:15:54,720 Speaker 1: about how bankruptcy had been really good for them and 346 00:15:54,760 --> 00:15:57,480 Speaker 1: their families. And I think there is a negative connotation 347 00:15:57,600 --> 00:16:01,000 Speaker 1: often that gets associated with bankruptcy, and for good reason. 348 00:16:01,080 --> 00:16:03,680 Speaker 1: It's a very tough thing. It's hard on your credit, 349 00:16:03,760 --> 00:16:06,480 Speaker 1: it's hard on your family, it's hard on your finances. 350 00:16:06,480 --> 00:16:08,920 Speaker 1: I mean, there's so many reasons that bankruptcy is a 351 00:16:08,960 --> 00:16:12,120 Speaker 1: difficult thing to go through. But one thing that needs 352 00:16:12,120 --> 00:16:14,400 Speaker 1: to be stated is that, especially if you're filing for 353 00:16:14,480 --> 00:16:17,880 Speaker 1: Chapter thirteen bankruptcy, it allows you to maintain some normalcy 354 00:16:17,920 --> 00:16:20,760 Speaker 1: by keeping your car in your house. Yeah. Essentially, one 355 00:16:20,760 --> 00:16:23,480 Speaker 1: of the outcomes is that it allows you to continue 356 00:16:23,560 --> 00:16:25,880 Speaker 1: to earn money and be productive. Right, Like, if you 357 00:16:25,960 --> 00:16:27,680 Speaker 1: still have your car, you can still get to work, 358 00:16:27,880 --> 00:16:29,760 Speaker 1: you still have a place that you can call home, 359 00:16:30,200 --> 00:16:32,760 Speaker 1: you can still come home after work and recharge and sleep. 360 00:16:33,040 --> 00:16:34,960 Speaker 1: But it still keeps you in the game. Essentially, It's 361 00:16:34,960 --> 00:16:37,800 Speaker 1: not like bankruptcy is completely wiping you off the map. Yeah, 362 00:16:37,800 --> 00:16:40,440 Speaker 1: And I think it's important to note that it should 363 00:16:40,440 --> 00:16:43,360 Speaker 1: be a moral obligation to pay your death if at 364 00:16:43,400 --> 00:16:46,480 Speaker 1: all possible. I think bankruptcy is a big decision and 365 00:16:46,520 --> 00:16:49,160 Speaker 1: it should be kind of your last option. You have 366 00:16:49,240 --> 00:16:51,560 Speaker 1: to be willing to walk through the consequences of a 367 00:16:51,600 --> 00:16:54,160 Speaker 1: bankruptcy over a long period of time, because it can 368 00:16:54,200 --> 00:16:56,360 Speaker 1: be a long process. It's it's not as quick as 369 00:16:56,440 --> 00:16:59,320 Speaker 1: hitting like the reset on your old school Nintendo, right 370 00:16:59,320 --> 00:17:01,320 Speaker 1: that was remember of that a little little bit impress 371 00:17:01,480 --> 00:17:03,960 Speaker 1: you start over? Incredibly easy to hit, right. Sometimes I 372 00:17:03,960 --> 00:17:08,320 Speaker 1: would just hit it with my big toe. Gross. Uh, 373 00:17:08,359 --> 00:17:12,320 Speaker 1: but yeah, there's that maybe. Yeah. Essentially, a bankruptcy sticks 374 00:17:12,359 --> 00:17:14,639 Speaker 1: around on your credit file for seven to ten years, 375 00:17:15,040 --> 00:17:17,639 Speaker 1: and with your credit messed up like that, you're not 376 00:17:17,680 --> 00:17:19,960 Speaker 1: gonna be able to get a mortgage for a long time, 377 00:17:20,320 --> 00:17:22,400 Speaker 1: and depending on the levels of debt that your friend 378 00:17:22,440 --> 00:17:25,560 Speaker 1: has well, trying to work with your creditors directly might 379 00:17:25,720 --> 00:17:28,040 Speaker 1: be the best option, and it could help you maintain 380 00:17:28,080 --> 00:17:31,239 Speaker 1: a healthy credit score for those other purchases that you 381 00:17:31,280 --> 00:17:34,480 Speaker 1: hope to make in the more near term future, because 382 00:17:34,520 --> 00:17:36,760 Speaker 1: if you don't have that healthy credit score and you 383 00:17:36,760 --> 00:17:39,840 Speaker 1: get alone, man, those interest rates might be sky high. 384 00:17:39,960 --> 00:17:42,440 Speaker 1: And so a rule of thumb to consider is whether 385 00:17:42,520 --> 00:17:46,280 Speaker 1: or not your unsecured debt, whether that be your credit cards, 386 00:17:46,680 --> 00:17:50,280 Speaker 1: medical debt, personal loans, all of that, whether or not 387 00:17:50,359 --> 00:17:53,760 Speaker 1: that is more of your annual take home pay. If 388 00:17:53,800 --> 00:17:56,680 Speaker 1: your unsecured debt is over that threshold, that is when 389 00:17:56,680 --> 00:17:59,000 Speaker 1: you're gonna want to consider bankruptcy. Yeah, that's a good 390 00:17:59,080 --> 00:18:00,680 Speaker 1: rule of thumb to kind of help you know how 391 00:18:00,720 --> 00:18:03,480 Speaker 1: bad things actually are. There's a good middle ground, though 392 00:18:03,880 --> 00:18:06,240 Speaker 1: it's hard to attack your debts when you're feeling overwhelmed 393 00:18:06,280 --> 00:18:09,960 Speaker 1: and disorganized. Getting some good financial counseling can be really 394 00:18:10,000 --> 00:18:12,960 Speaker 1: helpful to you in a situation where you think bankruptcy 395 00:18:13,240 --> 00:18:16,280 Speaker 1: is an option that you need to consider, And NFCC 396 00:18:16,480 --> 00:18:19,960 Speaker 1: dot org is the best place to turn for that counseling. 397 00:18:20,240 --> 00:18:22,040 Speaker 1: So I would tell your friend to find your local 398 00:18:22,119 --> 00:18:24,560 Speaker 1: NFCC affiliate that will help him get a good idea 399 00:18:24,640 --> 00:18:27,000 Speaker 1: of whether he needs just budget help, maybe even some 400 00:18:27,040 --> 00:18:30,040 Speaker 1: debt consolidation help from someone at the NFCC, or whether 401 00:18:30,080 --> 00:18:32,680 Speaker 1: bankruptcy is actually his best option. Yeah, and jel you know, 402 00:18:32,720 --> 00:18:36,480 Speaker 1: bankruptcy counseling, it's actually mandatory within a hundred eighty days 403 00:18:36,520 --> 00:18:39,360 Speaker 1: before you file for bankruptcy, So that's something that he's 404 00:18:39,359 --> 00:18:41,920 Speaker 1: gonna have to do anyway. So maybe encourage your friends 405 00:18:41,960 --> 00:18:44,639 Speaker 1: to go into that meeting with the hope to not 406 00:18:44,760 --> 00:18:47,359 Speaker 1: file bankruptcy if he's able to get some great tips, 407 00:18:47,600 --> 00:18:49,879 Speaker 1: maybe some organization even to someone to talk to, and 408 00:18:49,880 --> 00:18:52,600 Speaker 1: some encouragement to tackle those debts. Yeah, there's a decent 409 00:18:52,680 --> 00:18:55,760 Speaker 1: chance that the picture is a little bit rosier than 410 00:18:55,800 --> 00:18:58,320 Speaker 1: he thinks it is if he seek in bankruptcy. I'm 411 00:18:58,320 --> 00:19:01,480 Speaker 1: sure things are tough, but the folks at NFCC will 412 00:19:01,560 --> 00:19:04,119 Speaker 1: be able to really help him put things into perspective, 413 00:19:04,320 --> 00:19:06,920 Speaker 1: take a look at the numbers for themselves and point 414 00:19:07,000 --> 00:19:09,160 Speaker 1: him in the right direction, and there's definitely a chance 415 00:19:09,240 --> 00:19:11,639 Speaker 1: that he can avoid filing for bankruptcy. It makes some 416 00:19:11,680 --> 00:19:14,760 Speaker 1: of these harder choices based on the budget plan and 417 00:19:14,840 --> 00:19:18,080 Speaker 1: deconsolidation efforts that the NFCC can offer him. Nice man. 418 00:19:18,119 --> 00:19:20,520 Speaker 1: We have a couple more questions, one about an escrow 419 00:19:20,520 --> 00:19:23,680 Speaker 1: account and another about investing in a roth ira as 420 00:19:23,720 --> 00:19:35,360 Speaker 1: a student. But first a quick break. All right, Matt, 421 00:19:35,359 --> 00:19:37,440 Speaker 1: we're back from the break, and first up, we've got 422 00:19:37,480 --> 00:19:39,520 Speaker 1: a question that probably a lot of people have in 423 00:19:39,560 --> 00:19:41,320 Speaker 1: the back of their minds. Why do we have an 424 00:19:41,400 --> 00:19:44,360 Speaker 1: escrow account when we have a mortgage? Hey, Joel and Matt. 425 00:19:44,440 --> 00:19:46,680 Speaker 1: My name is Dallas and I'm from North Ogden, Utah. 426 00:19:47,359 --> 00:19:49,360 Speaker 1: I have purchased two homes in the past, and I've 427 00:19:49,400 --> 00:19:52,440 Speaker 1: always used an escrow account for my property taxes and insurance. 428 00:19:52,880 --> 00:19:54,879 Speaker 1: My wife and I are thinking about moving in again, 429 00:19:55,000 --> 00:19:57,320 Speaker 1: and I am trying to decide of having an escrow 430 00:19:57,320 --> 00:19:59,640 Speaker 1: account as better or worse than just paying the bills 431 00:19:59,640 --> 00:20:02,360 Speaker 1: on my own. I'm very organized with money and feel 432 00:20:02,400 --> 00:20:06,159 Speaker 1: comfortable saving and paying the bills without falling behind. The 433 00:20:06,160 --> 00:20:08,679 Speaker 1: pros I see to not opening an escrow account, or 434 00:20:08,680 --> 00:20:10,399 Speaker 1: that I can accrue interest on the money in a 435 00:20:10,480 --> 00:20:14,440 Speaker 1: high yield savings account rather than the bank keeping that interest. Also, 436 00:20:14,560 --> 00:20:16,879 Speaker 1: I could potentially pay these bills with a credit card, 437 00:20:16,920 --> 00:20:19,639 Speaker 1: which only reached additional cash back rewards since I always 438 00:20:19,640 --> 00:20:22,720 Speaker 1: pay my balance in full each month. The contents I 439 00:20:22,760 --> 00:20:26,159 Speaker 1: see are losing the convenience of someone else handling my bills, 440 00:20:26,160 --> 00:20:29,080 Speaker 1: which is not important to me, and the possibility of 441 00:20:29,119 --> 00:20:31,560 Speaker 1: paying a waiver fee so high that it cancels out 442 00:20:31,560 --> 00:20:34,080 Speaker 1: all the interest savings over the life alone. But I 443 00:20:34,200 --> 00:20:37,280 Speaker 1: planned to put down twenty so maybe that waiver free 444 00:20:37,359 --> 00:20:41,119 Speaker 1: will become non existent. That said, do you have a 445 00:20:41,200 --> 00:20:44,240 Speaker 1: preference on opening or not opening an escrow account? I 446 00:20:44,280 --> 00:20:48,119 Speaker 1: look forward to hearing your answer. Thanks Dallas. You mentioned 447 00:20:48,119 --> 00:20:50,640 Speaker 1: North Ogden. We've actually had beers from there, so I'm 448 00:20:50,640 --> 00:20:53,680 Speaker 1: guessing Ogden must be a very cool spot. Let's go 449 00:20:53,680 --> 00:20:56,240 Speaker 1: ahead and get your question. Let's talk about escrow accounts. 450 00:20:56,320 --> 00:20:59,359 Speaker 1: I have personally always used an escrow account, and mostly 451 00:20:59,400 --> 00:21:01,800 Speaker 1: it's because the simplicity. The first time we ever bought 452 00:21:01,840 --> 00:21:03,760 Speaker 1: a house, I brought that question up actually at the 453 00:21:03,760 --> 00:21:05,760 Speaker 1: closing table, and I said, wait a minute, like why 454 00:21:05,760 --> 00:21:07,639 Speaker 1: do you hold all the money and why don't I 455 00:21:07,680 --> 00:21:10,520 Speaker 1: just get the bill? But our realtor specifically just said, oh, 456 00:21:10,560 --> 00:21:11,920 Speaker 1: you don't want to worry about that. Just let the 457 00:21:11,960 --> 00:21:13,520 Speaker 1: bank take care of that and you want have to 458 00:21:13,560 --> 00:21:15,399 Speaker 1: worry about it. But Dallas, I'm with you. I'm with 459 00:21:15,400 --> 00:21:17,080 Speaker 1: you there in spirit. I like where your heads at. 460 00:21:17,119 --> 00:21:19,760 Speaker 1: And this is a great question. Yeah, Dallas, you mentioned 461 00:21:19,800 --> 00:21:23,120 Speaker 1: being organized. Well, that is one of the crucial things 462 00:21:23,240 --> 00:21:25,919 Speaker 1: if you're going to pay taxes and insurance separately. We 463 00:21:26,000 --> 00:21:29,040 Speaker 1: love the idea of you getting those extra rewards and interest, 464 00:21:29,320 --> 00:21:31,600 Speaker 1: but we're probably only talking about what a few hundred 465 00:21:31,600 --> 00:21:34,159 Speaker 1: bucks a year at most. Yeah, unless you're getting one 466 00:21:34,160 --> 00:21:36,080 Speaker 1: of those, you know, major sign up bonus cards. Yeah, 467 00:21:36,119 --> 00:21:38,040 Speaker 1: you're just talking about a few hundred bucks. Yeah, So 468 00:21:38,359 --> 00:21:42,240 Speaker 1: it's just not necessarily worth it unless you are incredibly 469 00:21:42,320 --> 00:21:45,200 Speaker 1: organized and you're willing to take on that increased responsibility 470 00:21:45,240 --> 00:21:47,920 Speaker 1: and paperwork by doing it yourself. An important point to 471 00:21:47,960 --> 00:21:50,360 Speaker 1: bring up, Dallas. You mentioned the waiver fee. That's something 472 00:21:50,400 --> 00:21:52,280 Speaker 1: that maybe a lot of folks don't know about, which 473 00:21:52,359 --> 00:21:55,720 Speaker 1: is that one time fee, that charge that the lender 474 00:21:55,760 --> 00:21:58,119 Speaker 1: will charge you if you decide not to set up 475 00:21:58,160 --> 00:22:00,679 Speaker 1: an escrow account. Basically, the and they charge you that 476 00:22:00,800 --> 00:22:02,480 Speaker 1: is because it's in the banks or it's in the 477 00:22:02,520 --> 00:22:05,399 Speaker 1: lender's best interest to make sure that that money is 478 00:22:05,440 --> 00:22:08,040 Speaker 1: set aside so that when your insurance bill shows up 479 00:22:08,080 --> 00:22:10,320 Speaker 1: that it gets paid, that when your tax bill shows up, 480 00:22:10,400 --> 00:22:12,280 Speaker 1: it also gets paid. They don't want to have an 481 00:22:12,320 --> 00:22:15,080 Speaker 1: interest in a home that doesn't have home insurance or 482 00:22:15,119 --> 00:22:17,399 Speaker 1: that has a lean against it because the government is 483 00:22:17,480 --> 00:22:19,920 Speaker 1: looking for a bill to be paid. But you can 484 00:22:19,960 --> 00:22:22,840 Speaker 1: try and negotiate with your lender as part of closing 485 00:22:23,000 --> 00:22:24,440 Speaker 1: to see if they can knock that off for you, 486 00:22:24,760 --> 00:22:27,800 Speaker 1: and if they say no, then just compare that waiver 487 00:22:27,880 --> 00:22:30,520 Speaker 1: fee to how much you could potentially make in interest 488 00:22:30,600 --> 00:22:33,000 Speaker 1: in rewards, like you said, over the term or the 489 00:22:33,080 --> 00:22:35,399 Speaker 1: length of time that you expect to be there. At 490 00:22:35,400 --> 00:22:37,760 Speaker 1: this point, it really does become a pretty easy math 491 00:22:37,880 --> 00:22:41,920 Speaker 1: equation because when you can compare numbers and numbers makes 492 00:22:41,920 --> 00:22:43,760 Speaker 1: it a lot easier. In Dallas because of the way 493 00:22:43,800 --> 00:22:46,280 Speaker 1: you ordered the question, it really is a math equation. 494 00:22:46,320 --> 00:22:49,399 Speaker 1: For most other people, it comes down to inconvenience. It 495 00:22:49,400 --> 00:22:51,320 Speaker 1: comes down to am I actually going to pay the bill? 496 00:22:51,720 --> 00:22:55,520 Speaker 1: Most people choose to have an escrow account because it's easy, 497 00:22:55,800 --> 00:22:58,359 Speaker 1: and if you're willing to forego the ease and the 498 00:22:58,400 --> 00:23:01,920 Speaker 1: automation that an escrow account provides in order to make 499 00:23:01,920 --> 00:23:03,800 Speaker 1: a better return on your money by taking it into 500 00:23:03,800 --> 00:23:05,760 Speaker 1: your own hands. I say more power to you, man, 501 00:23:05,880 --> 00:23:07,880 Speaker 1: I say go for it if the math works out 502 00:23:08,040 --> 00:23:11,320 Speaker 1: in your specific situation. Nice Joel, all right, we've got 503 00:23:11,359 --> 00:23:13,640 Speaker 1: one more question, and this one was submitted to us 504 00:23:13,720 --> 00:23:16,800 Speaker 1: by a listener who was looking out for her sister, 505 00:23:16,880 --> 00:23:19,480 Speaker 1: which totally tugs at my heartstrings. Having three daughters, I 506 00:23:19,520 --> 00:23:21,720 Speaker 1: would love to think that my daughters would be looking 507 00:23:21,760 --> 00:23:25,360 Speaker 1: out for each other like Olivia is. Hey guys, this 508 00:23:25,440 --> 00:23:29,320 Speaker 1: is Olivia from San Francisco, California, and my question is 509 00:23:29,440 --> 00:23:33,080 Speaker 1: for my younger sister. Actually, she's UM twenty and she's 510 00:23:33,119 --> 00:23:36,080 Speaker 1: in college. I want to get her investing in the 511 00:23:36,080 --> 00:23:39,240 Speaker 1: market as early as possible, even with the limited funds 512 00:23:39,240 --> 00:23:42,320 Speaker 1: that she does have UM currently. But my first thought 513 00:23:42,560 --> 00:23:47,840 Speaker 1: was getting her roth Ira account. But I you know, 514 00:23:47,920 --> 00:23:49,960 Speaker 1: did some research and a lot of the main companies 515 00:23:50,000 --> 00:23:53,680 Speaker 1: require kind of a minimum initial deposit or a minimum 516 00:23:53,720 --> 00:23:57,320 Speaker 1: recurring deposit and that's just not really possible given that 517 00:23:57,400 --> 00:23:59,760 Speaker 1: she doesn't have a study source of income yet. So 518 00:24:00,080 --> 00:24:02,320 Speaker 1: was just wondering, UM, what your advice would be for this. 519 00:24:02,520 --> 00:24:05,360 Speaker 1: My first thought was to open a robin Hood account 520 00:24:05,359 --> 00:24:08,080 Speaker 1: and kind of get her invested in some ETFs there, 521 00:24:08,160 --> 00:24:11,679 Speaker 1: but would love to share your thoughts. Thanks so much, Olivia, 522 00:24:12,040 --> 00:24:14,399 Speaker 1: You're a good sister. I had to say that helping 523 00:24:14,440 --> 00:24:17,400 Speaker 1: your sister with something like investing at the age of twenty, 524 00:24:17,800 --> 00:24:19,560 Speaker 1: that's like big sister of the Year stuff right there, 525 00:24:19,600 --> 00:24:23,800 Speaker 1: that's for sure. And getting her started that early not 526 00:24:23,880 --> 00:24:26,600 Speaker 1: only from a standpoint of compounding growth, but from a 527 00:24:26,640 --> 00:24:30,760 Speaker 1: standpoint of her mental approach to investing by having grown 528 00:24:30,800 --> 00:24:33,800 Speaker 1: accustomed to doing it from such an early age, that's huge. 529 00:24:34,160 --> 00:24:36,400 Speaker 1: So seriously, Mad props to you for forgetting the ball 530 00:24:36,480 --> 00:24:39,280 Speaker 1: rolling for your sister. And there are companies that don't 531 00:24:39,280 --> 00:24:41,960 Speaker 1: have forced minimums for you to open account, so we'll 532 00:24:41,960 --> 00:24:44,560 Speaker 1: get into that. I wanted to mention you talked about 533 00:24:44,640 --> 00:24:46,960 Speaker 1: robin Hood and you said that that's kind of where 534 00:24:47,000 --> 00:24:49,159 Speaker 1: you are leaning towards opening account for your sister. And 535 00:24:49,400 --> 00:24:52,000 Speaker 1: robin Hood is a great app and there are tons 536 00:24:52,000 --> 00:24:54,159 Speaker 1: of folks out there who are investing their money via 537 00:24:54,280 --> 00:24:57,040 Speaker 1: robin Hood, including a lot of our listeners. But I 538 00:24:57,080 --> 00:24:59,160 Speaker 1: will say, they don't allow you to open a roth 539 00:24:59,240 --> 00:25:01,680 Speaker 1: ira a and that's my sticking point with robin Hood. 540 00:25:01,840 --> 00:25:04,560 Speaker 1: If they would make retirement accounts available, then I would 541 00:25:04,600 --> 00:25:07,520 Speaker 1: be much more apt to give people that recommendation. One 542 00:25:07,520 --> 00:25:10,200 Speaker 1: of our favorite investing apps is in one and they're 543 00:25:10,400 --> 00:25:13,359 Speaker 1: very very similar to robin Hood. It's mostly app based 544 00:25:13,359 --> 00:25:16,439 Speaker 1: with a slick interface, but they do offer access to 545 00:25:16,560 --> 00:25:19,639 Speaker 1: retirement accounts like I RAS, although I got to mention 546 00:25:19,680 --> 00:25:22,760 Speaker 1: they have a five minimum, which might be too much 547 00:25:22,880 --> 00:25:25,919 Speaker 1: for your twenty year old SIS. And Vanguard is another 548 00:25:25,920 --> 00:25:28,720 Speaker 1: one of our favorite recommendations, but oftentimes they require a 549 00:25:28,720 --> 00:25:32,360 Speaker 1: thousand dollar minimum to start investing as well. Yeah, Joe, 550 00:25:32,440 --> 00:25:35,560 Speaker 1: we love both M one and Vanguard. They do have 551 00:25:35,600 --> 00:25:39,680 Speaker 1: those minimum deposits, but they don't have minimum recurring deposits, 552 00:25:39,680 --> 00:25:42,679 Speaker 1: so that's definitely a plus with those. However, our favorite 553 00:25:42,680 --> 00:25:45,480 Speaker 1: place for beginner investors to go check out that does 554 00:25:45,520 --> 00:25:50,399 Speaker 1: not have minimum deposits or monthly deposit requirements is Fidelity. 555 00:25:50,600 --> 00:25:53,800 Speaker 1: They've got zero fees, no minimums, Plus they have that 556 00:25:53,840 --> 00:25:57,160 Speaker 1: portfolio of zero cost funds, which means that they are 557 00:25:57,280 --> 00:26:00,600 Speaker 1: completely free to invest in, which is fantastic. Those zero 558 00:26:00,640 --> 00:26:02,600 Speaker 1: cost funds are awesome, man, Fidelity has just done a 559 00:26:02,680 --> 00:26:05,400 Speaker 1: killer job with those. It's like retirement three point oh, 560 00:26:05,440 --> 00:26:08,520 Speaker 1: like totally up in their game. So Olivia, you definitely 561 00:26:08,520 --> 00:26:10,400 Speaker 1: want to send your sister in the direction of one 562 00:26:10,400 --> 00:26:15,120 Speaker 1: of those three, either Fidelity, Vanguard, or m One. Yeah, Matt, 563 00:26:15,160 --> 00:26:17,640 Speaker 1: all three of those are just awesome places to get 564 00:26:17,680 --> 00:26:19,720 Speaker 1: started with your investing, and there are places that you 565 00:26:19,760 --> 00:26:22,240 Speaker 1: can feel really comfortable investing for the long term, which 566 00:26:22,280 --> 00:26:24,600 Speaker 1: is great. I did want to mention, Olivia that you 567 00:26:24,640 --> 00:26:27,640 Speaker 1: mentioned that your sister is in college and she's only 568 00:26:27,640 --> 00:26:29,600 Speaker 1: twenty years old, and there are a lot of twenty 569 00:26:29,640 --> 00:26:31,960 Speaker 1: year olds who are in college that aren't working while 570 00:26:32,000 --> 00:26:34,880 Speaker 1: they're in school. So if your sister is one of those, 571 00:26:34,920 --> 00:26:36,840 Speaker 1: if she doesn't have a job, if she doesn't have 572 00:26:37,040 --> 00:26:39,720 Speaker 1: earned income throughout the year, well she's just not going 573 00:26:39,800 --> 00:26:42,320 Speaker 1: to be able to invest in a roth ira. One 574 00:26:42,359 --> 00:26:45,480 Speaker 1: of the requirements of contributing to a rath is having 575 00:26:45,520 --> 00:26:47,680 Speaker 1: earned income every year. So if she's got a part 576 00:26:47,680 --> 00:26:49,960 Speaker 1: time job or works during the summer, well she can 577 00:26:50,000 --> 00:26:52,840 Speaker 1: contribute up to the amount that she makes. And because 578 00:26:52,880 --> 00:26:57,040 Speaker 1: her tax liability is likely insanely low, if not non existent, 579 00:26:57,320 --> 00:26:59,200 Speaker 1: contributing to a wrath when you have that low of 580 00:26:59,240 --> 00:27:01,119 Speaker 1: an income is one of the greatest things that you 581 00:27:01,160 --> 00:27:03,479 Speaker 1: could do. So yeah, if it's possible, if she has 582 00:27:03,520 --> 00:27:07,360 Speaker 1: earned income, make a roth ira. The definite priority. If not, 583 00:27:07,480 --> 00:27:09,960 Speaker 1: it might make sense to just open up a brokerage 584 00:27:09,960 --> 00:27:14,240 Speaker 1: account for her to get her started down that investing path. Yeah, Juel, 585 00:27:14,280 --> 00:27:16,679 Speaker 1: great advice. And again, Olivia, I think this is just 586 00:27:16,720 --> 00:27:20,480 Speaker 1: fantastic that you're thinking of your little sister, right, Joel, 587 00:27:20,520 --> 00:27:24,040 Speaker 1: did your big sister in part any financial sage wisdom 588 00:27:24,160 --> 00:27:26,879 Speaker 1: on you when you're in college. No, No, she didn't. 589 00:27:27,359 --> 00:27:29,240 Speaker 1: But one of the nice perks of being her brother 590 00:27:29,400 --> 00:27:32,440 Speaker 1: was she she was a lifeguard at a local water park. 591 00:27:32,600 --> 00:27:35,879 Speaker 1: Oh white Water, Yeah, white Water, Yeah, which is major 592 00:27:35,880 --> 00:27:38,560 Speaker 1: water park people knowing around the southeast, and she worked 593 00:27:38,560 --> 00:27:40,480 Speaker 1: there and so yeah, I gotta say I got free 594 00:27:40,560 --> 00:27:43,720 Speaker 1: entrance for a little while, which is nice, not quiet 595 00:27:43,760 --> 00:27:45,840 Speaker 1: on the level of roth Ira, But I'm sure at 596 00:27:45,840 --> 00:27:48,080 Speaker 1: the time you were all about that. It was so good. 597 00:27:48,280 --> 00:27:50,080 Speaker 1: It was so good. I haven't been there and forever 598 00:27:50,080 --> 00:27:51,640 Speaker 1: I kind of take the kids there one of these days. 599 00:27:51,760 --> 00:27:54,200 Speaker 1: Oh yeah, totally get them on the dragons tale was 600 00:27:54,240 --> 00:27:56,359 Speaker 1: that there when you're a kid. Yeah, everyone said it 601 00:27:56,400 --> 00:27:58,040 Speaker 1: hurt their back, but I had the best You totally 602 00:27:58,080 --> 00:28:01,320 Speaker 1: catch air and like snack into the plastic, totally exactly. 603 00:28:01,840 --> 00:28:04,760 Speaker 1: So yeah, Olivia, by the way, getting your sister started 604 00:28:04,880 --> 00:28:07,560 Speaker 1: is huge, and once she gets that first job out 605 00:28:07,560 --> 00:28:10,560 Speaker 1: of school, she can start contributing to a four oh 606 00:28:10,600 --> 00:28:12,639 Speaker 1: one K four or three B, you know whatever she 607 00:28:12,720 --> 00:28:15,600 Speaker 1: has access to at her first job. And just know that, like, 608 00:28:15,760 --> 00:28:18,879 Speaker 1: you helped make this happen because you got her started early. 609 00:28:19,200 --> 00:28:21,399 Speaker 1: You put it on her radar. Man, It's one of 610 00:28:21,440 --> 00:28:23,600 Speaker 1: the biggest problems Matt for people in their early to 611 00:28:23,720 --> 00:28:26,000 Speaker 1: mid twenties is it's just not even on the radar. 612 00:28:26,160 --> 00:28:28,000 Speaker 1: It's not something that's really talked about. No one's ever 613 00:28:28,080 --> 00:28:30,680 Speaker 1: told him, hey, you should do this, Hey this is important. 614 00:28:30,800 --> 00:28:33,080 Speaker 1: Hey this is gonna make a big difference in your future. 615 00:28:33,320 --> 00:28:35,439 Speaker 1: And you being the big sister that basically tells her 616 00:28:35,520 --> 00:28:39,200 Speaker 1: those things, that's huge. Yes, that's right. I switched back 617 00:28:39,240 --> 00:28:41,520 Speaker 1: over now to our beer that we had on this episode, 618 00:28:41,520 --> 00:28:45,400 Speaker 1: which was Moku imperial I p A by Lonny Kai 619 00:28:45,440 --> 00:28:48,560 Speaker 1: Brewing Company. And you know what, this isn't by KNA 620 00:28:48,960 --> 00:28:52,720 Speaker 1: or Mallee those other fake Hawaiian beers. What fake? I 621 00:28:52,720 --> 00:28:54,360 Speaker 1: don't know. I feel like that's one of the things 622 00:28:54,360 --> 00:28:57,040 Speaker 1: that Coldy mentioned was that this is the real Hawaiian beer. 623 00:28:57,120 --> 00:28:59,760 Speaker 1: So I'm excited to have tried this one and what 624 00:28:59,840 --> 00:29:01,840 Speaker 1: we Your thoughts on this, Well, I will say I 625 00:29:01,880 --> 00:29:04,200 Speaker 1: don't think Cohne is fake, Okay, I've been to the 626 00:29:04,240 --> 00:29:07,800 Speaker 1: actual brewer, okay, and it was good. It was good. 627 00:29:07,960 --> 00:29:09,080 Speaker 1: Well I know is that I've seen it on the 628 00:29:09,080 --> 00:29:11,760 Speaker 1: shelves that target, so I don't know that's true. They've 629 00:29:11,760 --> 00:29:14,200 Speaker 1: gotten a lot bigger since I went there, much much 630 00:29:14,200 --> 00:29:16,320 Speaker 1: bigger because they're all over the US now. They've done 631 00:29:16,360 --> 00:29:18,720 Speaker 1: a good job with distribution. Yeah, but this one was 632 00:29:18,760 --> 00:29:20,960 Speaker 1: really good, man. I really enjoyed this beer. It's not 633 00:29:21,040 --> 00:29:23,360 Speaker 1: often you get to try a Hawaiian beer that isn't 634 00:29:23,400 --> 00:29:26,120 Speaker 1: mass produced and mass distributed, So big thanks to Cody 635 00:29:26,160 --> 00:29:28,520 Speaker 1: for sending this one our way. I really enjoyed the 636 00:29:28,720 --> 00:29:32,320 Speaker 1: floral notes and some nice I p A bitterness. This 637 00:29:32,360 --> 00:29:35,160 Speaker 1: one tasted a lot more like that traditional West coastyle 638 00:29:35,200 --> 00:29:37,400 Speaker 1: I p A. And my final note on this beer, 639 00:29:37,600 --> 00:29:40,000 Speaker 1: it tasted like a lu ow oh. I like that. 640 00:29:40,040 --> 00:29:42,520 Speaker 1: You are you bringing back the one word descriptive because 641 00:29:42,560 --> 00:29:45,280 Speaker 1: we did that for a while and it kind of 642 00:29:45,360 --> 00:29:47,240 Speaker 1: ended up being awkward because I think we're sort of 643 00:29:47,280 --> 00:29:50,120 Speaker 1: forcing ourselves to say a singular word just to get 644 00:29:50,160 --> 00:29:52,520 Speaker 1: through it, right. But I kind of see what you're saying, though, 645 00:29:52,560 --> 00:29:54,760 Speaker 1: there's some floral notes there, and with this being a 646 00:29:54,760 --> 00:29:56,920 Speaker 1: double I p A, there's a lot of flavor packed 647 00:29:56,920 --> 00:29:59,080 Speaker 1: in there with the hops. So I'm with you, man, 648 00:29:59,120 --> 00:30:00,920 Speaker 1: I really enjoyed this one, and I am looking forward 649 00:30:00,960 --> 00:30:03,280 Speaker 1: to another beer that Cody sent us that we're gonna 650 00:30:03,360 --> 00:30:06,360 Speaker 1: enjoy on Wednesday's episode. And you know, floral notes putting 651 00:30:06,360 --> 00:30:08,600 Speaker 1: a lay on somebody, and that's exactly what I was 652 00:30:08,640 --> 00:30:11,280 Speaker 1: referring to, so Hawaiian, right, So yeah, thanks Cody for 653 00:30:11,280 --> 00:30:13,160 Speaker 1: sending this one our way. We really appreciate it. Man 654 00:30:13,600 --> 00:30:15,600 Speaker 1: and Joe. Let's not forget about our book giveaway from 655 00:30:15,680 --> 00:30:19,560 Speaker 1: last Monday's episode. This was Cameron Huddleson's book Mom and Dad. 656 00:30:19,600 --> 00:30:22,440 Speaker 1: We need to talk how to have essential conversations with 657 00:30:22,480 --> 00:30:25,960 Speaker 1: your parents about their finances. So all folks needed to 658 00:30:26,040 --> 00:30:28,760 Speaker 1: do us to give us a follow on Instagram and 659 00:30:28,760 --> 00:30:30,560 Speaker 1: then shoot us an email to let us know. And 660 00:30:30,560 --> 00:30:32,600 Speaker 1: so we've got our winners picked out and they are 661 00:30:32,720 --> 00:30:36,560 Speaker 1: billdoz Or forty eight and Twisty Crisp. We'll be reaching 662 00:30:36,560 --> 00:30:39,440 Speaker 1: out to you two shortly. Thanks to everyone for giving 663 00:30:39,480 --> 00:30:41,920 Speaker 1: us a follow and entering the contest. All right, Matt, 664 00:30:41,920 --> 00:30:43,760 Speaker 1: that's gonna be it for this episode, my friend and 665 00:30:43,880 --> 00:30:45,920 Speaker 1: folks want show notes to this episode or just to 666 00:30:46,000 --> 00:30:47,880 Speaker 1: kind of read some of the articles that we've been 667 00:30:47,880 --> 00:30:50,160 Speaker 1: publishing on the site. You can check that out on 668 00:30:50,200 --> 00:30:52,800 Speaker 1: our website how to money dot com. And normally we 669 00:30:52,840 --> 00:30:54,960 Speaker 1: ask you to leave a review over on Apple Podcasts. 670 00:30:55,040 --> 00:30:57,080 Speaker 1: And while we appreciate that, you know, what's more fun 671 00:30:57,240 --> 00:31:00,280 Speaker 1: is to actually talk about financial topics with the end 672 00:31:00,400 --> 00:31:02,280 Speaker 1: or a family member, to share it with someone you 673 00:31:02,320 --> 00:31:05,000 Speaker 1: care about, or an our tribal Really, either way, it's 674 00:31:05,040 --> 00:31:07,560 Speaker 1: a friend of me either way, all right, Joel? Until 675 00:31:07,600 --> 00:31:10,120 Speaker 1: next time, Best Friends Out, Best Friends Out.