Speaker 1: It's time forward. The b a qa A to b
Speaker 1: a q a with tiffand a to b a qa
Speaker 1: no man d the b a qa with for news
Speaker 1: to rabe out and why Honestly every time man, he's
Speaker 1: not here, the person is sitting there. Somehow I figure
Speaker 1: out a way to rhyme. Okay, somebody needs to sign
Speaker 1: me to a deal. Okay, so.
Speaker 2: In the student that shouldn't that should not be hard.
Speaker 1: You're Tiffany, Well, I'm super excited because I have for
Speaker 1: news to Robbie in the stew today. She is one
Speaker 1: of America's leading personal financial authorities, hooked on helping you
Speaker 1: live your richest and happiest life. She's also a friend
Speaker 1: of mine. She's so dumpe. She's a multi best selling
Speaker 1: financial author, former c NBC host, and creator of the
Speaker 1: Webby nominated podcast So Money, which is an awesome podcast.
Speaker 1: If you're not listening to it, do it for News.
Speaker 1: Has become one of the country's favorite go to money experts.
Speaker 1: The New York Times actually calls her advice perfectly practical
Speaker 1: right so Farnush's award winning and critically acclaimed podcast, So
Speaker 1: Money has surpassed twenty five million downloads. That's a lot,
Speaker 1: just in case you didn't now and thanks to one
Speaker 1: of her kind interviews and deep conversations about money. On
Speaker 1: the show, she spopped lights leading experts and authors and
Speaker 1: influencers from Arianna Huffington to markrit Choe to the Queen herself,
Speaker 1: Latifa and Tim Gunn and me about their personal financial perspectives,
Speaker 1: money failures and habits. She also answers listeners personal financial
Speaker 1: questions each week where she's gonna help me do today.
Speaker 1: And she is the new author, well she's been an
Speaker 1: author four times over, but a new book called A
Speaker 1: Healthy State of Panic. And what's so awesome is like,
Speaker 1: if you're listening to this, that means the episode that
Speaker 1: we did a few days ago, a couple of days ago,
Speaker 1: it's all about Farnus, her new book, And honestly, I
Speaker 1: think you need to hear it, go back and listen
Speaker 1: to it because Farnuse really helps to turn fee you're
Speaker 1: on its head and how you can use it as
Speaker 1: a tool for you know, the things that you're seeking.
Speaker 1: And we're going to talk about it, you know, in
Speaker 1: this episode too, but with b a Qa. But I
Speaker 1: think I think you're gonna love that episode, so go
Speaker 1: listen to it. Welcome to the Too for News.
Speaker 2: Thank you, thank you for that generous introduction.
Speaker 1: Do you ever do you have you ever had like
Speaker 1: a nickname? Was it just always for news or likes?
Speaker 1: Oh news, okay, news like that?
Speaker 2: Heysh nushi, but I prefer nous. Okay, okay, you're you're
Speaker 2: you definitely you're allowed. It's like it's not like you
Speaker 2: don't need permission, but it's like if you know me,
Speaker 2: you know, and like I don't really share that with people.
Speaker 1: But now we are world. I know. Sometimes people like
Speaker 1: hate Tiff and I'm like, I mean I don't mind tif,
Speaker 1: but literally nobody who like, Oh, I'm trying to thing.
Speaker 1: Do people call me Tiff? Like my friends?
Speaker 2: I just texted you, I said, hay, Tiff because I
Speaker 2: feel like sometimes when you tell stories with yourself in it,
Speaker 2: you say Tiff. So then I thought maybe she likes that.
Speaker 2: Well I don't.
Speaker 1: I feel like I don't. Yeah, it's not like a thing.
Speaker 1: I'm like, it's I feel very neutral to it. Like
Speaker 1: if someone called me fifth, I'm like that's fine, you know,
Speaker 1: but it's not like oh, like yeah, but like my
Speaker 1: real nickname nickname because my African name is Adochi, and
Speaker 1: so my real nickname nickname is ado which is like
Speaker 1: the first half of Adochi. So like my nieces and
Speaker 1: nephew call me Auntie Utto, my sisters call me Utto,
Speaker 1: and so it's weird when my family calls me Tiffany,
Speaker 1: like you know, because it's like, who oh, that's right me.
Speaker 1: But yeah, so we have some I'm glad you're in
Speaker 1: a stocause we have some questions to answer today, and
Speaker 1: you know we could use your advice. So let's ce
Speaker 1: c cccc. I think okay, this one is anonymous. This
Speaker 1: is very exciting. So hello, I'm assuming they're singing is
Speaker 1: because they're Broadway actress. I'd like to remain anonymous if
Speaker 1: this question airs. It is girl, I'm a Broadway actress
Speaker 1: and I'm wondering how to say for retirement. One, A
Speaker 1: work is sporadic and b sometimes the work is w
Speaker 1: you to union work, and sometimes it is ten ninety
Speaker 1: nine gig work. How do you set up retirement when
Speaker 1: your work is generally temporary and sometimes not connected to
Speaker 1: a retirement package? What does setup look like? I would
Speaker 1: love oh yeah, and she would love to benefit from
Speaker 1: an artist series of people who don't hold your typical
Speaker 1: nine to five job, thank you for all that you
Speaker 1: do and creating this safe space, and so oh you
Speaker 1: mean like she would just love if me and Mandy
Speaker 1: did a series of like financial advice for people who
Speaker 1: don't have nine to five. Oh, that's actually a good idea.
Speaker 1: Let's see what should we call her? We'll just call
Speaker 1: you Broadway. Hey, Broadway. So well, let's say you our news, Like,
Speaker 1: you know, Broadway is like, girl, I'm thinking about retirement. Yeah,
Speaker 1: but I get this random money here and there. So
Speaker 1: what do you think she should do? Yeah?
Speaker 2: So I was really curious at one point about how
Speaker 2: much Broadway actors and performers earned, and I actually I
Speaker 2: pose that on my podcast because I was going to
Speaker 2: see Aladdin and I was like, oh my god, this
Speaker 2: this work is not light. You're working, you know, six
Speaker 2: days a week, sometimes two shows a day, right, so
Speaker 2: it's hard, and you can't have a side hustle, like
Speaker 2: you're not also investing in real estate or also have
Speaker 2: like a you know, passive income. These people have they're
Speaker 2: giving their lives and their livelihoods to their work. And
Speaker 2: so the idea of like, oh but they make about
Speaker 2: if you're a star on Broadway, you could make healthy
Speaker 2: six figures for that run. So I'm not going to
Speaker 2: assume that's what she's making. But even if you're whatever
Speaker 2: you're making, I think that for those who have inconsistent pay,
Speaker 2: when you have the pay, you have to commit to
Speaker 2: taking I would say more than average. I would say
Speaker 2: twenty to twenty five percent of that and putting it
Speaker 2: away towards investing, because there may be months where you're
Speaker 2: not earning, so your savings rate you're investing rate rather
Speaker 2: should be higher, but it's going to not be every month, right,
Speaker 2: and so you just have to kind of commit to that.
Speaker 2: And as far as where you're putting that investment, I mean,
Speaker 2: some of that money she said is coming through a
Speaker 2: job where there might be a retirement package, So start there, okay.
Speaker 2: And then if there's a job that's coming from work
Speaker 2: that she doesn't have, it like it's it's you have
Speaker 2: to open up a roth ira. That's like you can
Speaker 2: do that. You can have you know, a retirement account.
Speaker 1: Cause cause she has both, she can have like she
Speaker 1: retirement in a roth ira.
Speaker 2: Yes, yes, and I think a lot of people we
Speaker 2: should we should diversify our tax exposure in retirement because
Speaker 2: we know with a workplace retirement account typically that's you
Speaker 2: pay before taxes, so you're saving on taxes today versus
Speaker 2: a ROTH you pay after tax and so you get
Speaker 2: the you get a tax re withdrawal in retirement, So
Speaker 2: we don't know what our tax picture is going to
Speaker 2: be in retirement. Good to have a little bit of both.
Speaker 2: But yeah, I think for those of us, whether you
Speaker 2: work on Broadway or you just do some sort of
Speaker 2: other work where your pay is not consistent and your
Speaker 2: income is coming from different sources, it's leverage what's available
Speaker 2: to you, which is the workplace retirement account and or
Speaker 2: a traditional or RATH diary outside of that job, and
Speaker 2: just you have to be I think a little more
Speaker 2: vigilant than average workers that can just kind of like
Speaker 2: set it and forget it, you know, like I'm going
Speaker 2: to do ten percent, fifteen percent, I'm going to be
Speaker 2: at this job for you know, at least a year.
Speaker 2: I don't have to think about it, but it comes
Speaker 2: up more often, more frequently. For I think those of
Speaker 2: us who have more fragmented income, we have to be
Speaker 2: more has to be more top of mind unless of course,
Speaker 2: one more thing I'll say, unless, of course, you're at
Speaker 2: the point where you have some sort of baseline savings
Speaker 2: from which you're using to pay for your lifestyle. And
Speaker 2: you know, that's the ideal that when you have this
Speaker 2: sort of work that is disparate, the income is disparate,
Speaker 2: that you kind of save enough to the point where,
Speaker 2: even though there are gaps in how much when you
Speaker 2: get paid, your lifestyle does not like your cash flow
Speaker 2: does not change because you have that sort of foundational
Speaker 2: savings to support those months where you're not making the money.
Speaker 2: But you have to be you have to be extra
Speaker 2: committed to what you do with that paycheck. When you
Speaker 2: get the paycheck, I.
Speaker 1: Call it pay the pot. So like it's like when
Speaker 1: you first started working for yourself, it's like, no, no,
Speaker 1: no't pay me. Pay the pot so the pot can
Speaker 1: pay me a consistent income. Yes, yes, yes, okay. So
Speaker 1: what I'm hearing you say is like like, okay, so broadway,
Speaker 1: what I'm hearing Forarniche is like one like, yes, you
Speaker 1: want to set aside for a retirement, but you get
Speaker 1: to do both. And quite honestly, anybody can kind of
Speaker 1: do this. That your w two that you get from
Speaker 1: your union, ask hey, is there a retirement account available?
Speaker 1: My assumption is yes, I don't know, but you know,
Speaker 1: if you're getting W two, you can ask your union
Speaker 1: what's the retirement account that is available to me? Here?
Speaker 1: You know, put money there, and you're wanting to max
Speaker 1: because to Fernuc's point, since you're not you don't make
Speaker 1: regular money, you actually have to over index. Typically we
Speaker 1: tell people to to fifteen percent, but because you get
Speaker 1: money sporadically, you have to set aside more to cover
Speaker 1: the times that you don't. But then also have your
Speaker 1: your external retirement account which is typically like a WROTH
Speaker 1: and ideally if you can max that out too every year.
Speaker 1: So doing both will help you to have like a
Speaker 1: really healthy like retirement account where you get to get
Speaker 1: your tax benefits now and then some of your tax
Speaker 1: benefits later. ROTH lets you get your tax benefits later,
Speaker 1: and traditional IRA lets you get your tax benefits now
Speaker 1: and then also too, you know, learning to pay the
Speaker 1: pot like when you do get paid, like knowing that
Speaker 1: like I mean ideally because you might not make enough
Speaker 1: to support but ideally when you get paid, knowing that
Speaker 1: all this money is not my January money, is also
Speaker 1: potentially for October too, because I might not be working
Speaker 1: there and so pay the pot and let the pot
Speaker 1: pay you ideally consistently. Did I wrap it up good?
Speaker 1: Like what you share.
Speaker 2: Yeah. There's a book too that I want to recommend.
Speaker 2: And I'm trying to remember the name of the author.
Speaker 2: She was on your podcast and mine, I think, and
Speaker 2: it was about tipping, but it was so her.
Speaker 1: I'm sure Barbara, Okay it was.
Speaker 2: Her name is Barbara Hold, And.
Speaker 1: We're gonna I'm gonna say, yeah, I'm like, look it up.
Speaker 2: Yeah, So here we go. It's also a really good book.
Speaker 2: It's called Tipped, and it's by Barbara Sloan, who's been
Speaker 2: on my podcast. She's a financial expert, and she writes
Speaker 2: about achieving financial freedom for people who have who work
Speaker 2: in the service industry, who may not have consistent income
Speaker 2: or really I mean, the book is dedicated to those
Speaker 2: of us who thrive on tips, but I think there's
Speaker 2: a lot of gems there, even for those of us
Speaker 2: who work maybe sporadically. Maybe we're not we don't consider
Speaker 2: our self service industry, but we do have what is
Speaker 2: sometimes in consistent pay or seasonal work. And Barbara really
Speaker 2: walks you through how to streamline that so that you're
Speaker 2: not feeling like there are months where you're going without
Speaker 2: that you to your point, you've done enough where you've
Speaker 2: paid the pot, and whether you work in January or
Speaker 2: November or September, that it's all going to fuel this
Speaker 2: sort of cycle that you've created and is going hummingly.
Speaker 1: Okay, I love it. We're gonna take a real quick
Speaker 1: break and come back with our second question. Plus I
Speaker 1: want to learn more about this healthy state of panic.
Speaker 1: What's just all about? You know what I'm saying. So
Speaker 1: we'll be back in one minute. Well I don't know
Speaker 1: about one minute, but we'll be back, and we're back.
Speaker 1: You know, I forgot to do the disclosure, y'all know me, me, me, me,
Speaker 1: see your grandma, not us. So this advice is not
Speaker 1: to be taken with anything less than the super grayness
Speaker 1: of grayness of salts. What does that mean? That means
Speaker 1: neither myself are ot News or your financial advisor. We're
Speaker 1: not your attorney, we're not your doctor. We are just
Speaker 1: your fun and fabulous financial internet cousins. We're just shooting
Speaker 1: the breeze. So you're gonna hear the advice, then you're
Speaker 1: going to run by the people that you pay, which
Speaker 1: is not us, and then you gotta use your advice
Speaker 1: based upon you know, like that advice that you give
Speaker 1: from those folks. Okay, so remember this is really made
Speaker 1: for you know, just a little bit entertainment that certainly
Speaker 1: you know, this is not advice that you're supposed to
Speaker 1: just take and do exactly what we say. So hopefully
Speaker 1: that it's helpful. See what I did there, because I
Speaker 1: was like, oh, there was a little fear because I'm
Speaker 1: like child, Yeah.
Speaker 2: You know, fear got me some insurance the other day.
Speaker 1: Oh so yeah, oh so like like like insurance for
Speaker 1: yourself or insurance, well for.
Speaker 2: The business, Like I'm an LLC, I'm an escorp, and
Speaker 2: so it's not to be assumed, but if somebody sues me,
Speaker 2: I will have some you know, legal recourse. So I
Speaker 2: somehow I've gotten I mean, I guess because I don't
Speaker 2: people don't listen to me or what because I've gotten
Speaker 2: twenty years and no one's ever tried to sue me.
Speaker 2: Knock on wood, but I have seen it happen, and
Speaker 2: I got like a little spooked, and I was like,
Speaker 2: I'm gonna just get some you know, liability insurance.
Speaker 1: You know? Is it? You know? Like, what is it?
Speaker 1: They have errors and omissions.
Speaker 2: Errors and emissions, which this is not what I got,
Speaker 2: but I think it's it would include that. It's like
Speaker 2: sort of I have gotten errors and omissions insurance too,
Speaker 2: though in the past when I've worked with brands, they
Speaker 2: have asked me to get it because they require it.
Speaker 1: Yeah, So speaking of fear, so what I love this
Speaker 1: is such a great conversation, like before we answer our
Speaker 1: second question leads into your book. Like, so on the surface,
Speaker 1: it would seem that that kind of like that fear
Speaker 1: in general is a bad thing, But just in this
Speaker 1: quick conversation we had about getting insurance, it fear like
Speaker 1: had me thinking like, wait a minute, is my insurance
Speaker 1: up to date? Let me make sure. So fear really
Speaker 1: was like a wake up call to make a change
Speaker 1: that is to my benefit. And so I feel like,
Speaker 1: isn't that what your book is about? A healthy data panic?
Speaker 2: Well, thank you for that plug. Yes, it is all
Speaker 2: about how fear is turning you inward. And when fear
Speaker 2: shows up, your job is not to try to destroy
Speaker 2: it or try to pretend it's not there, because being
Speaker 2: fearless is what's cool. It's to say what are you
Speaker 2: doing here? What are you what?
Speaker 1: Like?
Speaker 2: Why are you here? And sometimes fears are irrational, but
Speaker 2: many times, especially when it involves questions around money and work,
Speaker 2: high stakes, it's there to try to protect us, to
Speaker 2: try to get us closer to a better answer, a
Speaker 2: better landing. And I mean, like I said on your
Speaker 2: show earlier, I think every time fear has shown up
Speaker 2: in my financial life, in my career, even if I
Speaker 2: found that the fear wasn't being honest with me, because
Speaker 2: sometimes fear can be dishonest with you, it's telling you
Speaker 2: a false story. But even just recognizing that has opened
Speaker 2: doors has been breakthroughs for me. So I've never been
Speaker 2: the kind of person who can just be like, oh
Speaker 2: shoe fear or I'm fearless, Like, I don't know, I
Speaker 2: can't do that. Also, what privilege is that to be
Speaker 2: able to like think that you could just walk through
Speaker 2: life without paying attention to fear. Yeah, because somehow you
Speaker 2: can afford all the consequences. I can't. I don't know
Speaker 2: anybody say for maybe a few people who cannot, who
Speaker 2: can just be take all the risks and afford all
Speaker 2: of the whatever comes on the other side of that risk,
Speaker 2: and so I.
Speaker 1: Think only only only toddlers, Like they're like, girl, whatever
Speaker 1: it is, she got it.
Speaker 2: But thank god toddlers have fearful adults around them, you know,
Speaker 2: that are putting up the baby gates.
Speaker 1: Oh my god, y'all kids are just I was watching
Speaker 1: this like random video on Instagram because I just like,
Speaker 1: because sometimes the world could be such a shit shoe,
Speaker 1: so I just love to watch like random funny memes.
Speaker 1: This poor boy he had like you know, these little
Speaker 1: capes on Superman cap or whatever, and he was like, Dad, look,
Speaker 1: he couldn't have been more than like four top of
Speaker 1: the steps. He jumped from the top to the bottom,
Speaker 1: and you can hear the thud boom and the way
Speaker 1: he got up like any old man, hold in his back,
Speaker 1: breathing heavy like. His dad was like, wait, I didn't
Speaker 1: I didn't know he's gonna jump down the steps like that.
Speaker 1: He was like. His dad was so calm, which is
Speaker 1: such a dad thing. He was like, don't don't let
Speaker 1: that cake gash your head up. That's what I say.
Speaker 1: He was like, he said, don't ever ever do that again.
Speaker 1: You are right, you are right, the little boys just
Speaker 1: leaning against the wall like because but what's so crazy
Speaker 1: is that because that baby was fear He was like
Speaker 1: he really did believe I have this cakear so clearly
Speaker 1: superman and so but to your point, like the fear
Speaker 1: of like you know, we put up those gates for them,
Speaker 1: but you know, because fearlessness actually is dangerous because that psychopathic. Yes,
Speaker 1: he didn't realize, like bro, you could have literally broke
Speaker 1: her neck because he didn't. So fearlessness, I mean as
Speaker 1: much as we like I always say, I was in
Speaker 1: our last episode that that Farnus is a near new
Speaker 1: pr agent for fear.
Speaker 2: I've rebranded it. I I you know, if that's what
Speaker 2: I go down, if that's on my tombstone, I would
Speaker 2: be a happy mama. Like I love the idea that
Speaker 2: we are giving fear a chance.
Speaker 1: Yes, because it will stop you from jumping down the stairs.
Speaker 2: It wants good for us, It wants good. It doesn't
Speaker 2: always present well because you know, it shows up as
Speaker 2: like just an annoyance or you know, a hurdle, and
Speaker 2: we don't like that. But it's maybe telling us to
Speaker 2: take a beat or ask ourselves some questions. Yes, and
Speaker 2: why are we afraid. Have you ever thought to ask
Speaker 2: yourself why you're afraid? And maybe there's some wisdom in that.
Speaker 2: Maybe you're not giving yourself enough credit, you know. I
Speaker 2: just think it's time. Time's up on being fearless.
Speaker 1: No jumping down the stairs because you have a cape. On.
Speaker 1: Speaking of being fearless, sometimes people get afraid about making
Speaker 1: certain financial choices. So we have a question from the
Speaker 1: I of the G and this person I'm gonna call
Speaker 1: her Home Equity. Home Equity asked hi. She said. At first,
Speaker 1: I want to thank you all caps so much, guys
Speaker 1: for being such a great resource for financial things. I
Speaker 1: love y'all. I love y'all too, Home Equity. I'm also OMG.
Speaker 1: I was so excited to see that my company partner
Speaker 1: with tiffany Oh during financial black Oh child, this must
Speaker 1: have been a while ago. Anyway, anyways, moving forward and forward. Okay,
Speaker 1: I remember gaining advice from tiffany way back from dream
Speaker 1: Catches the Facebook group, and I'm just in all the
Speaker 1: levels we reached. Oh thanks girl. To my question, my
Speaker 1: husband and I have a lot of miscellaneous debt and
Speaker 1: most of it is below a thousand to three thousand
Speaker 1: dollars except for one, and that is twenty thousand dollars.
Speaker 1: We are thinking that we should take out a home
Speaker 1: equity loan about eighty thousand dollars that will allow us
Speaker 1: to consolidate all of our credit card debt. Thinking like
Speaker 1: basically it totals around thirty five to forty thousand dollars
Speaker 1: and to the purchase of a secondary property. Okay, so
Speaker 1: she wants to take our money to cover the home
Speaker 1: equity line of a home equity line to cover the
Speaker 1: forty thousand dollars she owes plus to buy a second property.
Speaker 1: We pay out probably a little over onecam month for
Speaker 1: a minimum payments on the credit cards with different interest rates.
Speaker 1: We're thinking that with the home equity loan we could
Speaker 1: have a lower monthly payment and a lower rate, which child,
Speaker 1: I mean if you sent us to this in February anyway,
Speaker 1: But anyway, we're still going to answer this question. So
Speaker 1: here's a question overall, what are your thoughts about taking
Speaker 1: at home equity loans? Like what maybe first, because everyone
Speaker 1: doesn't know what that is? What is a home equity loan?
Speaker 1: You know, what are your thought about taking out and
Speaker 1: like how best to use it?
Speaker 2: Great question, and I think that she's got a healthy
Speaker 2: fear of this debt accumulating, just being on the interest
Speaker 2: treadmill to nowhere. And you know, I think that in
Speaker 2: this country, we demonize debt and we think, oh my god,
Speaker 2: taking out another form of debt to pay off debt,
Speaker 2: that's just like, you know, bad form. But I think
Speaker 2: this is a This could potentially be a good creative
Speaker 2: way to solve the credit card debt crisis that she has. Now,
Speaker 2: let's take a step back. What is a helock, a
Speaker 2: home equity line of credit or a home equity loan?
Speaker 2: Which are They have similarities and they have some important differences.
Speaker 2: The similarities are that this is credit that is or
Speaker 2: debt or a loan that is based on the equity
Speaker 2: that you have in your home. So if let's say
Speaker 2: you have a home that's worth three hundred thousand dollars,
Speaker 2: your mortgage is two hundred, you have a hundred thousand
Speaker 2: dollars in home equity, right, that's like what is if
Speaker 2: you were sell that house, that's what you would take out.
Speaker 2: So you can go to a bank and say as collateral,
Speaker 2: I'd like to put my house up in exchange for
Speaker 2: some credit from use a loan or a line of credit,
Speaker 2: and that's what they call a home equity line of credit.
Speaker 2: So the bank basically takes your equity and holds a
Speaker 2: hostage and then gives you either a line of credit
Speaker 2: which is sort of like a credit card with a
Speaker 2: line of credit against that home equity, or a loan,
Speaker 2: which would come with a fixed rate and a term.
Speaker 2: Depending on what you need this money for, it may
Speaker 2: make sense to have a line of credit versus a loan.
Speaker 2: I'll get to that in a minute. But when it
Speaker 2: comes to whether or not to take out a helock
Speaker 2: or home equity loan, I think a lot of people
Speaker 2: like to do this when they do have let's say,
Speaker 2: high interest debt and they want to use a helock
Speaker 2: or he loan, which right now the rates are about
Speaker 2: they're about mortgage rates. They're about seven percent to maybe
Speaker 2: eight percent. That's what good credit, excellent credit, which is
Speaker 2: not the best we've seen, but it still might be
Speaker 2: lower than a fifteen percent or twenty five percent credit card.
Speaker 2: Right so that in that sense, the math makes sense
Speaker 2: to take out this debt over here with a lower
Speaker 2: interest rate, use it to pay off the credit cards,
Speaker 2: and then start paying off the eight percent debt. The risk,
Speaker 2: of course, is that it's your home equity that's tied
Speaker 2: to this, as opposed to a credit card, which has
Speaker 2: no collateral. But if you're in a financial bind or
Speaker 2: your house drops in value, there's some risk. But again,
Speaker 2: I think one thing to keep in mind when you're
Speaker 2: taking out a home equity, whether it's a line of
Speaker 2: credit or a loan, and banks will insist upon this,
Speaker 2: is you don't take out the entire equity. You take
Speaker 2: out a portion of it, usually no more than eighty percent.
Speaker 2: In this case, it sounds like maybe even less than that.
Speaker 2: So the risk is the risk gets lesser and lesser
Speaker 2: the lower the amount of equity you take out, because
Speaker 2: you know you'll have to pay that back and depending
Speaker 2: on your job security and your you know the value
Speaker 2: of your home and all that. It's important to take
Speaker 2: it into consideration.
Speaker 1: All of that.
Speaker 2: Now, whether it take out a helock or a he loan.
Speaker 2: You remember, if you take out a he loan, the
Speaker 2: first payment comes due that next month, it's like the
Speaker 2: clock starts because they've given you this cash. It's like
Speaker 2: a student loan, you know, it's like a private loan.
Speaker 2: You take it and then you got to start paying
Speaker 2: it back right away if you don't need the money
Speaker 2: right away, because maybe you're using this for like a
Speaker 2: home renovation project or an emergency, you know you don't
Speaker 2: want that. You want a home equity line of credit,
Speaker 2: which means you can draw on this like a credit card,
Speaker 2: as much as you want, as little as you want,
Speaker 2: as frequently as you want. But then you got to
Speaker 2: start paying.
Speaker 1: It back like a credit card the.
Speaker 2: Moment you start to take to draw down on it.
Speaker 2: So I have actually taken out all mecody line of
Speaker 2: credit in February. The rates I think it was like
Speaker 2: seven or six six percent, I think, which is which
Speaker 2: is pretty good. One thing I will tell you your audience,
Speaker 2: there are a lot of banks have gotten out of
Speaker 2: this business. Okay, it's not a very profitable business for banks.
Speaker 2: Mortgages in general are not that much profit. And you've
Speaker 2: heard big banks talk about how like they're not investing
Speaker 2: in like their mortgage departments because it's just the spread
Speaker 2: was I mean, especially in the pandemic, three percent, I
Speaker 2: mean that's a very low spread for a bank. So helocks.
Speaker 2: I think there are just a few banks, big banks
Speaker 2: that offer them. So do a search online. You can
Speaker 2: go and apply online and get your rates and it
Speaker 2: can be pretty quick. You can get this probably in
Speaker 2: a month if you have all your ducks in a
Speaker 2: row and you stay on top of it. But we
Speaker 2: took one out because for us, it felt like, you know,
Speaker 2: we built a lot of equity in our home, and
Speaker 2: we felt like, let's just take a little bit of
Speaker 2: it out as like a plan D in case, you know,
Speaker 2: for whatever reason, we lose our jobs. There's a disability.
Speaker 2: I don't know, I'm again healthy state of panic. I
Speaker 2: was like, why not if this is accessible to us?
Speaker 2: And also I don't have to pay it back until
Speaker 2: I start using it. There's absolutely no risk in having this.
Speaker 2: But it is the lowest form, the cheapest form of
Speaker 2: debt that I can have access to right now. Why
Speaker 2: wouldn't I.
Speaker 1: You know, it's funny you say that because literally a
Speaker 1: friend of mine who is very wealthy, she was like,
Speaker 1: we were just talking and she was liked, I meet
Speaker 1: with my financial advisor, Anjelie. She's awesome, And she was like,
Speaker 1: you know, tell your own financial advisor, like, hey, what
Speaker 1: do you think about me taking out you know, a
Speaker 1: home equity not loan? Because I don't need the money,
Speaker 1: but to have, you know, home equity line of credit.
Speaker 1: And I was like, but I don't need it. She
Speaker 1: was like yes, but she said because to your point,
Speaker 1: she said the same thing. She said, lots of banks
Speaker 1: are closing shop on that that while you'll have access
Speaker 1: just in case tiffany things go wrong because I have
Speaker 1: two properties, in both of which I own one hundred percent.
Speaker 1: And she said, this will allow you to have access
Speaker 1: to a lot of money just in case something happens,
Speaker 1: and you know, you just have it as a backup.
Speaker 1: And I was like, well, I never thought about that.
Speaker 1: So it's funny that this came up because I was
Speaker 1: just about to ask Angelie, like when I meet with
Speaker 1: her on Wednesday, you know, what do you think like that,
Speaker 1: because in my mind, I was like, but I don't
Speaker 1: need it. It's like that's the point.
Speaker 2: Well, even for people who are wealthy but value cash
Speaker 2: and value liquidity, if you're going to do let's say,
Speaker 2: an investment project or work on your home or invest
Speaker 2: in another business, and you don't want to put all
Speaker 2: of the money in right away. You want to do
Speaker 2: it in installments, and you want to finance it because
Speaker 2: that's going to buy you more time and more liquidity.
Speaker 2: Then also a sophisticated way to use a heelock. I mean,
Speaker 2: I remember back in the day, my parents and their friends,
Speaker 2: they would use their home equity to pay for college. Yeah, kids,
Speaker 2: now don't. I don't know if that's what I would
Speaker 2: do these days because college is so expensive.
Speaker 1: My dad, my parents did that for my sister the baby.
Speaker 2: Yeah, because I don't maybe the student loan rates were
Speaker 2: really really high. I don't know, but they just that's
Speaker 2: what they did. And actually, if you read my first book,
Speaker 2: You're so money when the only reason I was able
Speaker 2: to afford my first apartment in New York is it
Speaker 2: was a studio and it was like two hundred and
Speaker 2: ninety eight thousand dollars and I was making like not,
Speaker 2: I was not making enough to afford that on my own,
Speaker 2: but my parents had equity in their home. They took
Speaker 2: it out, bought that with cash. It's the rich dad,
Speaker 2: poor dad method. And then I took out a helock
Speaker 2: and paid my parents back. Wow, for the most part,
Speaker 2: like immediately, loop loop loop d loop. And then I
Speaker 2: refinanced that he lock into a fixed rate mortgage because
Speaker 2: the thing to watch out with watch out for with
Speaker 2: the helock. Which I failed to mention is that some
Speaker 2: are variable rates and some are fixed, and you really
Speaker 2: want to know what you're getting yourself into. Because rates
Speaker 2: are already high, you don't want it to get high,
Speaker 2: so you might sacrifice a lower rate just so that
Speaker 2: you can get it fixed and locked in.
Speaker 1: And honestly, that's the thing. Like it's funny because I
Speaker 1: I'm so glad did you share that? Because I had
Speaker 1: re Meat on the podcast a couple of weeks ago.
Speaker 1: You know, re Meat is is famously I don't want
Speaker 1: to say anti home ownership, but certainly like look at
Speaker 1: your number. He's not a fan of home ownership. He's like,
Speaker 1: place you don't have to have home ownership to, you know,
Speaker 1: to for wealth or whatever. So I challenged him a
Speaker 1: little bit, which in general, I'm like, I understand because Meat,
Speaker 1: I mean, he lives in San Francisco now, I believe,
Speaker 1: but he was living in New York and so sometimes
Speaker 1: the maths just no math. This is like child for
Speaker 1: what you know. But what I was telling him is
Speaker 1: I've been doing all this research lately and just become
Speaker 1: obsessed with the racial wealth gap and that is the
Speaker 1: gap between black and brown people and their net worth
Speaker 1: and basically white America, and the gap between I know,
Speaker 1: for for between black and white is I think the
Speaker 1: average white household the network, there's like one hundred and
Speaker 1: thirty thousand, and for black households is fourteen thousand. And
Speaker 1: I mean that is huge, and it's gonna get worse
Speaker 1: because I'm not going to say it's going to but
Speaker 1: it is getting worse because it actually wasn't as bad
Speaker 1: like years prior, but it's getting worse. And one of
Speaker 1: the financial indicators or one of the levers to this
Speaker 1: racial wealth gap is not just home ownership, but also
Speaker 1: like the value of homes, Like my home was like
Speaker 1: under a praise for about forty thousand dollars, which is
Speaker 1: the average that black homes are under praise. So I
Speaker 1: just share that because you just shared, Like how I mean,
Speaker 1: I hear for me or what he's saying about Most
Speaker 1: people don't look at their amortization table, which tells you
Speaker 1: how much you're really paying for the house, typically double,
Speaker 1: so the math doesn't always math, you know, not always.
Speaker 1: But I push back on him to say I hear you.
Speaker 1: But one of the reasons where there is this gap
Speaker 1: and wealth between brown and non brown is that it's
Speaker 1: home ownership. It doesn't always work out, but when it does,
Speaker 1: Like your parents were able to set you up for
Speaker 1: your own home, it's because what else do they have
Speaker 1: access to if they did not have that home. My
Speaker 1: parents too, They bought their house for two hundred and
Speaker 1: fifty thousand dollars when I was nine years old. Their
Speaker 1: house is worth over a million dollars now, and so
Speaker 1: if something were to happen, my parents could and it's
Speaker 1: paid off, they could tap into that equity and do
Speaker 1: something for their kids if something were happening.
Speaker 2: Not so easy to take a loan out against your
Speaker 2: stock investments. I mean, you can do that, but that's
Speaker 2: very sophisticated. And by the way, when you sell your
Speaker 2: home and you pull the cash out, yes you have
Speaker 2: to deduct for In your mind you're like, Okay, well,
Speaker 2: I feel like I'm rich because I have all this cash,
Speaker 2: but actually I've put in so much money that maybe
Speaker 2: it doesn't doesn't matter though, because I got the cash
Speaker 2: now and I'm moving on, and I don't even have
Speaker 2: to pay tax on that because there's you know, up
Speaker 2: to a certain amount. So you have mobility when you sell,
Speaker 2: you can use that money like free right away. And
Speaker 2: I'm not anti stocks. I'm not saying real estate it's
Speaker 2: a better investment. But I do think that when we
Speaker 2: get into like amortization tables, the average person doesn't care
Speaker 2: about that because the truth of the matter is when
Speaker 2: you sell your home and that cash goes into your
Speaker 2: bank account, you can move quickly and well with that money,
Speaker 2: and it doesn't matter what you did. You you made
Speaker 2: it work, you got here. Every time I've sold, I've
Speaker 2: moved up in life. Yes, And it goes back to
Speaker 2: my parents getting creative with that HeLa Yes.
Speaker 1: And again, regular people an opportunity to have access to
Speaker 1: a number of amount of money that they would not
Speaker 1: have access to because your parents would have just say, hey, bank,
Speaker 1: would love to get two hundred three hundred thousand dollars
Speaker 1: for our daughter. The bank would be like bye. But
Speaker 1: like it's like, hey, bank, I have this asset that's
Speaker 1: worth hundreds of thousands of dollars. Now the bank's like
Speaker 1: now we're talking, and so so I just you know,
Speaker 1: I would like to show both sides of the equation.
Speaker 1: I understand what he's saying, but I also too, I want,
Speaker 1: especially people of color, which is largely who listens to
Speaker 1: Brown ambition, hence why it's called brown ambition, that to
Speaker 1: understand that home ownership equity, the value of your home
Speaker 1: is a huge component to our lack of net worth,
Speaker 1: and like that is the thing I'm going to be
Speaker 1: leaning like a lot of my energy into is like
Speaker 1: how do we get more black and brown people to
Speaker 1: homeowne in a way that does bring well. But so yeah,
Speaker 1: I mean, I.
Speaker 2: Appreciate the message just because I think there's a lot
Speaker 2: of shame around someone who doesn't own and them thinking
Speaker 2: that they're not actually an adult, or they're not actually
Speaker 2: financially successful, and they'll never be financially successful. I think
Speaker 2: that that is an important message and a myth to dispel.
Speaker 2: But I also don't want someone to hear that home
Speaker 2: ownership is a scam. Not that that's what we're saying
Speaker 2: here or anyone saying, but that can get misconstrued and
Speaker 2: then they never even looked under it to say, is
Speaker 2: there a strategy, is there something a way to get creative?
Speaker 2: Are there things I'm not considering? I suppose it just branding.
Speaker 2: It is like a false bill of goods.
Speaker 1: Yes, yeah, so no, I love that. And so I
Speaker 1: think that that leads into kind of your book about fear. Right,
Speaker 1: So a lot of people have not purchased homes or
Speaker 1: whatever because of that fear. And there's nothing wrong with
Speaker 1: leading into the fear, but asking yourself again, what am
Speaker 1: I actually afraid of? You know? Right?
Speaker 2: Right? And again it's like with a lot of financial fears,
Speaker 2: it's thinking about where does this fear come from? Who
Speaker 2: taught me this? Why do I believe this? I mean
Speaker 2: I interviewed somebody on my podcast who, funny enough, was
Speaker 2: raised thinking that buying a home was a waste of money,
Speaker 2: and this was a generation when it was the opposite.
Speaker 2: You know, now we're talking about maybe there's like saying
Speaker 2: things to look out for when you're buying. It's not
Speaker 2: always a win. But she was like, why would I
Speaker 2: you know, by the father was like told the daughter,
Speaker 2: why would you ever buy a home? You know, you
Speaker 2: don't have mobility, blah blah blah, which is true, but
Speaker 2: then she inherited that as as a finite rule of law,
Speaker 2: and anyone who would bring a home ownership to her
Speaker 2: it was like it made her afraid because she felt
Speaker 2: like she was going against her father. It felt like
Speaker 2: she was doing something wrong, and so she's like, oh man,
Speaker 2: that was bad. You know, I should have sat with
Speaker 2: that fear and go who taught me that? We learn
Speaker 2: about money from so many people, so many influences, and
Speaker 2: sometimes we're grateful for it, and sometimes we need to
Speaker 2: just kick those fears to the curb. But you have
Speaker 2: to recognize the source so that you can begin to
Speaker 2: rewrite that narrative for yourself. And so whether your fear
Speaker 2: is to own or to rent, question where that fear
Speaker 2: is coming from, and is it legit? Is this actually
Speaker 2: what you want as opposed to what the fear is suggesting,
Speaker 2: because that fear has attached itself onto you from your mother,
Speaker 2: from your father, from your culture, from your friends. I
Speaker 2: would also say for anyone who's afraid of big decisions
Speaker 2: around money and their financial life, whether it is the
Speaker 2: fear of you know, talking about money with a partner
Speaker 2: because then that's going to lead it into a fight,
Speaker 2: or fear of starting a business because then that's going
Speaker 2: to fail, you know, thinking about what if you don't
Speaker 2: do the thing, What if you don't start the business,
Speaker 2: What if you don't have the conversation about money. What
Speaker 2: if you don't get your ducks in a row and
Speaker 2: pay off that debt. I think that there's something scarier
Speaker 2: awaiting you potentially, which could be an unactualized life. It
Speaker 2: could be a relationship that dead ends, because we all
Speaker 2: know when you don't communicate about anything, that's never good,
Speaker 2: and so thinking about worst case scenarios sometimes or the
Speaker 2: like the actual what could happen? It's not too I
Speaker 2: say that in the book is not a way to
Speaker 2: like make you get deeper and darker into your fears
Speaker 2: and like feel trapped. But actually because when we go
Speaker 2: to the edge sometimes and we see how bad things
Speaker 2: can actually get, that is when we are motivated to
Speaker 2: get up and do something, to get up and voice,
Speaker 2: to get up and make a change. It's very easy
Speaker 2: to sometimes sit with your fears and idle. But what
Speaker 2: I challenge people, what I offer is think about what
Speaker 2: if that is your existence for the next year. You
Speaker 2: think that life is just going to hang out, life
Speaker 2: is going to move on. Fast forward yourself a year
Speaker 2: from now. You haven't done anything, or you've done you've
Speaker 2: let fear stop you from doing something. What does that
Speaker 2: look like? Are you okay?
Speaker 1: With that that five years is going to pass either way,
Speaker 1: God willing. So it's like where will it meet you,
Speaker 1: you know, stuck or actively like choosing the life that
Speaker 1: you're wanting to live. You know, we all meet you.
Speaker 1: It's going to pass either way, and.
Speaker 2: Just accept that there are going to be failures. Just
Speaker 2: accept that things won't always go your way. But I
Speaker 2: think that a life of mobility and action is far
Speaker 2: better than a life of stasis. Yes, and just being
Speaker 2: overwhelmed to the point where you're afraid. You're letting your
Speaker 2: fears stop you from making a decision. Instead let your
Speaker 2: fears propel you to do the thing.
Speaker 1: No, I love that. Thank you so much for a
Speaker 1: news So where can the girls and the guys because
Speaker 1: you've got like everybody, Yes, we always see So we
Speaker 1: call the guys who listen to our show Jerome because
Speaker 1: it's like one time, like I think I met this guy.
Speaker 1: His name was Jerome. I'm like, he's like it was
Speaker 1: like the first guy that ever came up to me
Speaker 1: was like, oh my god, I love your podcast. I
Speaker 1: was like you listen and he was like yeah. So
Speaker 1: since then I'm like, oh hey, Jeromes. It's like just
Speaker 1: like three of y'all. But where can where Jerome listen Jerome.
Speaker 2: If you're listening, go to a Healthy Stateofpanic dot com.
Speaker 2: And if you purchase the book before it runs, launch
Speaker 2: is officially on October third. Make sure to get your
Speaker 2: bonuses at the website. Some really really valuable stuff headed
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Speaker 2: which we know is a really important time to support authors.
Speaker 2: It's like what decides whether your book will show up
Speaker 2: in a bookstore, whether you make a bestseller list, all
Speaker 2: of that important stuff.
Speaker 1: Now. I love that a Healthy State Ofpanic dot com.
Speaker 1: And if they want to follow you on the social
Speaker 1: I know that you said you have just one that
Speaker 1: you really leaning into.
Speaker 2: Where can they really leading into Instagram? Yeah?
Speaker 1: At furnish to Rabie. So thank you so much for
Speaker 1: coming for Thank you so much. I hope you all
Speaker 1: enjoyed listening to B a q A. If you have
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Speaker 1: and we try best to answer them with kindest clarity
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Speaker 2: The Brown Ambition Podcast is produced by Imani Crosby and
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Speaker 1: I am your co host Mandy Woodrif Santos, and we
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Speaker 2: BA Fam.