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Speaker 1: Welcome to How the Money. I'm Joel, I'm Matt. Today

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Speaker 1: we're answering your listener questions. There are so many flies

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Speaker 1: in our office today. Do you think they're gonna get

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Speaker 1: picked up on the microphone?

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Speaker 2: I don't really hope not if listeners are wondering what

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Speaker 2: they hear buzzing past our microphones.

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Speaker 1: I want to thro attracted to the food from uh

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Speaker 1: that we had during lunch today. It was me eating

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Speaker 1: the Korean food today, not yet I know.

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Speaker 2: I think it's like the sweet Yeah, like the you

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Speaker 2: uh reheated it on the cast iron. This sweet mixed

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Speaker 2: with the soy, it gets It's aromatic, gets in the air.

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Speaker 2: Everybody wants a piece, including me. Quite the weird intro

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Speaker 2: for today's episode. This is I ask How to Money episode.

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Speaker 2: We're gonna hear from some listeners today, Joel. A listener

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Speaker 2: is considering a home or an he wants.

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Speaker 1: To he might add on is I guess where he's

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Speaker 1: at and wants to hear how we have thought about

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Speaker 1: it in the past.

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Speaker 2: But the listener has a problem with his Discover card

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Speaker 2: and he's not getting treated well by them, as well

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Speaker 2: by the customer service. So we'll talk about that, and

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Speaker 2: another listener is considering a lump sum to pay off

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Speaker 2: for student loans or whether or not she should stretch

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Speaker 2: that thing out stretch as bad boys out some. We'll

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Speaker 2: get to that plus more during our episode today.

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Speaker 1: No Doubt Chuck full of good stuff today. First off,

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Speaker 1: I love getting listener emails. Love it when people reach

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Speaker 1: out and they read them. All want to tell us

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Speaker 1: about their lives or tell us about something like, Hey,

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Speaker 1: I heard your episode on this, but here's why we

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Speaker 1: do it slightly differently, or here's why you're right. I

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Speaker 1: prefer the ones where they tell us why we write

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Speaker 1: the affirmative affirmation email. Here's why you guys are awesome.

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Speaker 1: You can send those emails anytime you want.

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Speaker 3: Well.

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Speaker 1: Lee emailed and he after the interview that we had

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Speaker 1: with Pam from Wealth Ramp, he to weigh in on

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Speaker 1: why he chooses to hire a financial advisor, and his

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Speaker 1: main thing came down to relational stability and happiness and

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Speaker 1: he I.

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Speaker 2: Love that He's he said basically, if things went south,

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Speaker 2: his wife was gonna be tempted to blame him. Yea

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Speaker 2: is like, I think he said that she told him that,

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Speaker 2: and she's like, just so you know, if things don't

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Speaker 2: work out, this is gonna be on you. It's gonna

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Speaker 2: be really hard for me to not blame you.

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Speaker 1: Yeah, so even if the market is down fifteen percent,

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Speaker 1: which you know, you could try to show your spouse

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Speaker 1: statistics about how frequently this happens, and hey, guess what,

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Speaker 1: this isn't abnormal. But if your spouse is gonna freak

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Speaker 1: out and they're not going to listen to you in

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Speaker 1: the heat of the moment, you know, you could harm

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Speaker 1: your relationship. I guess if you hadn't planned ahead properly.

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Speaker 1: And it makes me, it makes me think that one

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Speaker 1: I think, yeah, I know your relationship and if it's

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Speaker 1: if hiring someone to be able to point the finger

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Speaker 1: at that, if that's part of what's going to lead

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Speaker 1: to long lasting relational success, go for it. I'm totally

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Speaker 1: fine with that. It makes me think. I had a

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Speaker 1: recent conversation with a friend and he's kind of been

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Speaker 1: in charge of the finances, but his wife's like, man,

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Speaker 1: you know what, I really want to pay off some

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Speaker 1: of this tet that we have lingering, and he's like,

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Speaker 1: I'm more of like a let's keep investing, man, let's

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Speaker 1: grow the net worth and they can have a discussion

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Speaker 1: about it. But he's like, you know what, she deserves

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Speaker 1: more input, and so I'm going to lean more in

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Speaker 1: her direction for a little while. And so much of

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Speaker 1: I think handling finance as well together as a couple

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Speaker 1: is not just letting one person take the reins and

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Speaker 1: listening to the other person's concerns if they have them totally.

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Speaker 2: Yeah, because you could say, hey, how about you just

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Speaker 2: get informed, get educated, look at what the market does

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Speaker 2: over time, right, like to actually fully understand it and

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Speaker 2: save the one percent Because for him, I mean, you're

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Speaker 2: looking at probably like a one percent fee that's getting

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Speaker 2: taken out of his nest egg every year. I would

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Speaker 2: rather understand it and not pay the one percent. But

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Speaker 2: uh yeah, it doesn't really matter though if when the

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Speaker 2: relationships on the line and the dynamics are at play,

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Speaker 2: and you got to yeah, you certainly have to take

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Speaker 2: that into account. He didn't say this specifically, but I

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Speaker 2: do want to address the fact that he kind of

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Speaker 2: hinted or intimated at the fact that maybe she was

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Speaker 2: thinking that underperformance might be due to the fact that

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Speaker 2: he wasn't like making the right choices as far as

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Speaker 2: like their investments, And I do want to make clear

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Speaker 2: that we don't recommend hiring a professional and paying out

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Speaker 2: the nose for outperformance. That is not something that we recommend.

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Speaker 2: I think it's absolutely worth it to pay for expertise, right,

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Speaker 2: especially when it comes to minimizing your tax bill and

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Speaker 2: making sure that you are under that you are drawing

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Speaker 2: from the right accounts, that you're making the right sales,

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Speaker 2: that you're hanging on to certain things for the right

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Speaker 2: amount of time. That's totally worth paying for. But like,

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Speaker 2: we never recommend to pay to to pay higher fees

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Speaker 2: that to pay the Kathy Woods there, whatever it is

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Speaker 2: that she.

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Speaker 1: I don't know what's her fund three quarters show on

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Speaker 1: her fund. Yeah, yeah, don't do that. No, Yeah, I

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Speaker 1: think that's a that's a good point.

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Speaker 2: If he didn't say that directly. But there's a part

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Speaker 2: of me that was picking up on that a little

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Speaker 2: bit of like, well, no, we pay somebody and then

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Speaker 2: it's just all going to be better because of that.

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Speaker 1: But that's not always the case. The average money manager is, yeah,

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Speaker 1: you're you're paying what they're worth, what the value they

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Speaker 1: bring is. Things that are not stock picking out performance

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Speaker 1: because all the statistics show that individual money managers don't

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Speaker 1: do a great job at that, especially over the longer

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Speaker 1: the time horising gets so uh but but Lee, if

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Speaker 1: that's helpful to you to have somebody in your corner

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Speaker 1: where they're like they're the third party.

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Speaker 2: It's it's kind of like trying to do like a mediator. Yes,

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Speaker 2: like someone just to sit there in the middle just

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Speaker 2: to help. Honestly, it's not someone that there in the middle.

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Speaker 2: It's someone for you, both you and your wife to

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Speaker 2: get together on and like yell at because he doesn't

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Speaker 2: want he does the one hurt yelling at him. It's

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Speaker 2: just like, oh yeah, babe, let's we should give him

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Speaker 2: a piece of our piece of our mind.

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Speaker 1: And I think, like the you know, the same is

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Speaker 1: true for marriage counseling. Right to have a third party

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Speaker 1: in the room can be super helpful. And I think, yeah,

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Speaker 1: that's a part of the reason people hire uh someone

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Speaker 1: to help and facilitate some of those be able to

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Speaker 1: bounce off money questions that they have too together as

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Speaker 1: a couple.

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Speaker 2: You're seeing my day marriage counseling isn't gonna be isn't

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Speaker 2: gonna pan out?

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Speaker 1: Well, girl, it's okay to have discussion but like you know,

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Speaker 1: there's times where it gets too intense to heat and

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Speaker 1: it's so be contested. Yeah, it's hard to go along

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Speaker 1: to pulling a pro. Yeah. And if you are thinking,

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Speaker 1: oh man, maybe we should talk to an advisor, you

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Speaker 1: can find a great one that had the money dot

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Speaker 1: com slash advisor.

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Speaker 2: That's right, the beer that you and I are going

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Speaker 2: to enjoy today. And I am already enjoying this beer. Man,

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Speaker 2: this is a good one. It's called Jeremy's Changed, which

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Speaker 2: is a funny name for a beer, but it is

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Speaker 2: by for the better or not. I think for the

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Speaker 2: better based on what I'm enjoying right here. Maybe maybe

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Speaker 2: Jeremy like picked up some healthy habits. Is that a

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Speaker 2: flower or is that like a jellyfish and jellyfish to me?

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Speaker 1: But it's font of Flora, and jellyfish don't have that

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Speaker 1: many tentacles, do they? Yeah? Or do they? I don't know.

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Speaker 1: It's cool art, so that's cool. Yeah.

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Speaker 2: Fonts of Flora is the brewery which I've actually been to.

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Speaker 1: I don't think you've been there yet now I haven't.

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Speaker 1: It's a rad spot.

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Speaker 2: Like just it's got the vibes going on that we

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Speaker 2: actually talked about that pastoral. Right yeah. Back on episode

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Speaker 2: one thousand, when we did the AMA episode, somebody asked, Hey,

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Speaker 2: if you could open a brewery, what kind of beers,

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Speaker 2: what kind of vibes.

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Speaker 1: Would you be going for?

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Speaker 2: And I specifically called out Fonta Flora because I love

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Speaker 2: what they got going on over there up in North Carolina.

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Speaker 2: Not surprisingly, but.

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Speaker 1: One of these days I'll make it up. Well, let's

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Speaker 1: go together, all right, I'm in. Let's get to some

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Speaker 1: listener questions. If you've got a question we'd love to

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Speaker 1: hear from you, how toomoney dot com slash ask so

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Speaker 1: where you can find the simple instructions basically recording the

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Speaker 1: voice memo on the app on your phone, emailing it

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Speaker 1: over to us. Hopefully we can take it next week

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Speaker 1: on the show. Matt, let's get to one specifically, let's

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Speaker 1: get to a question about how to think about renovating

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Speaker 1: a house.

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Speaker 4: Hey, Matt and Joel, this is Tim from Mount Prospect Again.

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Speaker 4: I snuck a second question into my email with the

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Speaker 4: first voice memo, and Matt responded he was like, no, no, no,

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Speaker 4: that's going to cost you another voice memo.

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Speaker 1: So here we are.

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Speaker 4: My question is more of a request from Matt regarding

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Speaker 4: the addition he put onto his home. You guys have

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Speaker 4: briefly talked about this project in the past, but I'd

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Speaker 4: love to hear about the decision making process that Matt

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Speaker 4: and his family went through when deciding whether they should

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Speaker 4: sell or rent the current house and go buy a

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Speaker 4: new house versus.

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Speaker 1: Putting the addition onto the home.

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Speaker 4: There's of course a lot of financial considerations here, but

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Speaker 4: some of the deciding factors with this type of decision

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Speaker 4: can be more important than what the numbers are telling you.

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Speaker 4: And then my follow up to that is, once you

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Speaker 4: decide to go with the edition route, what were some

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Speaker 4: of the steps that you took to kind of complete

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Speaker 4: that project and would you do anything differently? Knowing what

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Speaker 4: you know now, I look forward to hearing about your journey.

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Speaker 1: Thank you. Ooh the journey. It was indeed a journey, Joel,

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Speaker 1: Kate and I were just actually reminiscing because a year ago.

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Speaker 2: I love photos that pop up in your phone and

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Speaker 2: it tells you like, here's what you were doing this

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Speaker 2: day last year, and we hadn't even broken ground, or

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Speaker 2: when Kate and I had this conversation, we had not

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Speaker 2: even broken ground for our home renovation on the palatial

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Speaker 2: east wing, which is not the east wing, but we

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Speaker 2: hadn't even broken ground. And to think that we are

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Speaker 2: so used to the fact like it being there, like

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Speaker 2: it feels like it has always been there, it's a

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Speaker 2: part of our life, like it has been fully integrated

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Speaker 2: into how it is that we that we live.

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Speaker 1: I think that it's just kind of mind blowing. Again,

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Speaker 1: it's probably a good tip just ahead of time to

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Speaker 1: count the cost, right, and not not just the financial cost,

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Speaker 1: but like that, do I want to live through this

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Speaker 1: renovation cost because you're bizarre?

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Speaker 2: Yeah, because in the moment it seems like it seems crazy.

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Speaker 2: You're like what are we doing? Like why do we

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Speaker 2: what are we subjecting ourselves to? And I think part

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Speaker 2: of it depends on how many rooms in the house

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Speaker 2: that's going to touch, Like you were able to kind

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Speaker 2: of keep that for the most part, cordon off from

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Speaker 2: the way you guys live in your home.

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Speaker 1: Literal Yeah, putting funeral plastic tape to the floor and see.

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Speaker 1: But if you're redoing the kitchens and bathrooms that you

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Speaker 1: currently use, you have to change your whole way of

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Speaker 1: living for a while. And so you have to really

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Speaker 1: think like, how big is this upgrade? It's like, are

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Speaker 1: we really wanting to go through with this? Are we

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Speaker 1: willing to be inconvenienced to a massive in a massive way.

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Speaker 1: That's like something Emily and I have discussed as we're

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Speaker 1: even considering minor brew mister bathrooms or we're like, yeah,

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Speaker 1: I don't man, do we want to Is it that bad?

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Speaker 1: Maybe we just leave it as is?

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Speaker 2: So Tim asked specifically about, well, why didn't you choose

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Speaker 2: to sell that house and go with something different? Why

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Speaker 2: didn't you choose to even hang on to that place,

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Speaker 2: you know, rents hit and look at a different property.

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Speaker 2: The fact is we did look for another property. We

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Speaker 2: did that for like close to two years. I don't

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Speaker 2: know if you remember, Like we would drive it, we'd

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Speaker 2: go around and like, can.

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Speaker 1: So maybe we'll go look over here, and oh, I

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Speaker 1: don't know.

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Speaker 2: But we actually did seriously consider that, and after all

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Speaker 2: that searching, we decided that, you know what, even when

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Speaker 2: we like picture our quote unquote dream house and whatever

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Speaker 2: that entails, you know, for the individual out there, but

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Speaker 2: we bottom line, it did not matter because what we found.

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Speaker 2: What we discovered was that our specific location had everything

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Speaker 2: we're looking for. It may not have been like the

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Speaker 2: perfect quote unquote dream house, but because of where it was,

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Speaker 2: it meant that Kate and I like we are able

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Speaker 2: to walk to date nights. We are able, like we're

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Speaker 2: close to y'all, we're close to work. Because we're close

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Speaker 2: to work, I'm like, we are still able to be

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Speaker 2: a one car family.

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Speaker 1: I bike.

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Speaker 2: I'm able to bike in work all the time. That

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Speaker 2: would change if we moved further out. We're close to

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Speaker 2: the mountain and we're able to get outdoors and hike around.

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Speaker 2: We like we're close to the kids' school. The kids

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Speaker 2: are able to like run around the neighborhood. Like these

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Speaker 2: are all things that we realized, Oh my gosh, all

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Speaker 2: of these things are so much more important than saying, hey,

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Speaker 2: let's go find another house. And the reason I bring

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Speaker 2: this up is because I think Tim was alluding to

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Speaker 2: the fact that, like, hey, aside from the financial considerations, right, like,

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Speaker 2: there are so many other factors to run through, and

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Speaker 2: it's to like what it is that makes your life fulfilling,

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Speaker 2: not fulfilling, but just happy, and what it is that

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Speaker 2: you want to do on the kind of like the

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Speaker 2: day to day basis, you know, community too, that you've

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Speaker 2: built up in that space, you're kind of starting clean over.

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Speaker 2: You can go drive to see those friends, but it's

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Speaker 2: different when you get to interact with Like I have

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Speaker 2: a lot of like older folks my parents' age that

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Speaker 2: live close to me. I love talking with them on

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Speaker 2: my way to work. Like I'd be sad if I

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Speaker 2: didn't run into Dan, who's doing his hill sprints, you know,

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Speaker 2: on my way into I really do like try those hangs.

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Speaker 1: And Nold is Dan. He Dan, he's probably late sixties,

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Speaker 1: early seventies. Yeah, yeah, he's getting after it man. So

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Speaker 1: but I think we'd be remiss, Matt, not to talk

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Speaker 1: about the money side of things at least a little bit.

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Speaker 2: Right, So yeah, I wanted to start with I guess

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Speaker 2: some of the specific factors that went through our mind

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Speaker 2: that caused us to realize, wait a minute, no, no, no,

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Speaker 2: this is the house, and let's just take the steps

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Speaker 2: that we need to in order to make it work

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Speaker 2: for us for the next fifteen years. Basically because our

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Speaker 2: little dude just started just started kindergarten, we're not planning

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Speaker 2: to go anywhere for school.

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Speaker 1: So yeah, okay, so financial considerations obviously, because you and

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Speaker 1: I discussed this were important factor as well over the

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Speaker 1: host a personal finance podcast. After all, but you had

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Speaker 1: a locked in rate on your current mortgage of what

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Speaker 1: like four percent four and a quarter and rates when

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Speaker 1: you were looking at adding on or buying a different house.

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Speaker 1: We're in the upper sixes, it was probably hard for

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Speaker 1: you to think about giving that up in order to

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Speaker 1: buy something bigger, too, because I think something like the

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Speaker 1: annual cost in just the interest alone could have been

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Speaker 1: tens of thousands of dollars a year by upgrading to

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Speaker 1: a new home with that higher interest rate. Yeah, so

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Speaker 1: that had to be like at least a big pro

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Speaker 1: in terms of saying totally it was.

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Speaker 2: But honestly, even more than that, it came down to

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Speaker 2: some like the like the non financial the non monetary

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Speaker 2: consideration as you're loaded, I mean, like we were looking

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Speaker 2: at some properties that cost less money, right, and so

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Speaker 2: the ability to Yeah, we would have ended up with

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Speaker 2: a higher mortgage which hopefully at some point not promised,

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Speaker 2: not guaranteed that we would be able to refinance down

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Speaker 2: the road. But I think had we found had it

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Speaker 2: made sense to us from just all the maybe the

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Speaker 2: lifestyle considerations that I think Tim is asking about I

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Speaker 2: think we would have been willing to do it, but

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Speaker 2: ultimately it wasn't about the money. Ultimately we said let's

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Speaker 2: just stay here and again the make the changes and

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Speaker 2: renovations that we needed to. But but that, I mean,

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Speaker 2: obviously that is a factor.

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Speaker 1: You do have the factor in extra tens of thousands

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Speaker 1: of dollars a year. It certainly feels like a hurd

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Speaker 1: an impediment, absolutely, because if let's say rates were the same,

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Speaker 1: let's say they were still at four and a quarter,

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Speaker 1: and then we were able to buy something like that

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Speaker 1: would have obviously expanded the scope of our search. And

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Speaker 1: then all of a sudden you're thinking, okay, well then

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Speaker 1: we could potentially do this. So yeah, certainly, even then

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Speaker 1: you're talking an interest rate that he's got locked in

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Speaker 1: at its current place. That's yeah, if you're sitting sitting

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Speaker 1: in the high threes or in the fours, man, that's

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Speaker 1: pretty dang attractive. And even if you're talking about moving,

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Speaker 1: you're still talking about real estate transaction fees. But that

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Speaker 1: if you're you know, making him even switch from a

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Speaker 1: four percent mortgage to a four percent mortgage, not not

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Speaker 1: that big, not nearly as a big of a deal, right, Sure,

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Speaker 1: but if you're doing paying those transaction fees but also

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Speaker 1: paying a higher mortgage rate, that that's going to add

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Speaker 1: Oh yeah, and he did say something about renting, like

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Speaker 1: why didn't you hang onto it and rent it because

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Speaker 1: then you got you got cash flow flowing in as well.

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Speaker 1: But also when it comes to primary residences, they don't

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Speaker 1: often make the best rentals because you've got they're over capitalized,

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Speaker 1: you've got too much money into that property as opposed

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Speaker 1: to what it is you could then take out of

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Speaker 1: that property. And what would you then do without money

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Speaker 1: instead of dumping it into a singular property. That Sure,

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Speaker 1: it might be an impressive rent number, but just think

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Speaker 1: about not only just how much money you have locked

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Speaker 1: up in that property, because it's uh, typically I'm going

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Speaker 1: to assume that most primary residences.

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Speaker 2: For folks are worth a bit more than a standard

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Speaker 2: you know, two two three two rental.

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Speaker 1: And to be a bad friend here, I will note

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Speaker 1: that your decision to add on to this house, you're

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Speaker 1: not going to get all the money back that you

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Speaker 1: put into it, and you had to be okay with that.

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Speaker 2: You had to be z with that too. Yeah, why

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Speaker 2: is that being a bad friend?

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Speaker 1: Well, no, I mean, I don't want to make it

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Speaker 1: sound like reving my face in it. Yeah, that not

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Speaker 1: trying to do that, but just trying to highlight that

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Speaker 1: for everybody. When you add on to a house, oftentimes

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Speaker 1: you're going to get depending on how you add on

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Speaker 1: what you're doing. Uh, you know how appealing it is

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Speaker 1: to the general home buying public. You might be getting

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Speaker 1: forty fifty sixty percent back of the money you stuck

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Speaker 1: into it. So you have to realize that on the

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Speaker 1: front end, how much use am I going to get

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Speaker 1: out of this? How much is this done for personal

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Speaker 1: reasons that are going to un people feeling to us

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Speaker 1: when somebody else might not appreciate it the way we

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Speaker 1: do one percent?

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Speaker 2: I mean, and that's why I think it makes so

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Speaker 2: much sense to think about it the way that tims

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Speaker 2: start trying to think about it, right, which is which

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Speaker 2: are the non financial because it doesn't often make sense

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Speaker 2: because you're thinking, Okay, are we going to be able

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Speaker 2: to get our money back out of this counter like

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Speaker 2: you can't or this upgrade over here? You know is

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Speaker 2: somebody is somebody else going to be willing to pay

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Speaker 2: the same amount that we did When it comes to

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Speaker 2: the resail price. You can't think about it that way.

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Speaker 2: You have to be willing to just light light some

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Speaker 2: of that money on fire. And so because of that,

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Speaker 2: like you need to set a budget and it's got

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Speaker 2: to fit within that framework. But you have to be

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Speaker 2: okay saying, yeah, this is for us, we're going to

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Speaker 2: be here for a while. And I think that's the

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Speaker 2: biggest sticking point is if you are not going to

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Speaker 2: end up staying there for a while, because then you

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Speaker 2: don't get to experience the actual benefit, the positive lifestyle

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Speaker 2: change is to your family. And I think that is

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Speaker 2: the most important thing to think through, like for other

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Speaker 2: folks out there, you know, so for somebody else, they're thinking,

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Speaker 2: all right, we can afford we've got this much shaved up,

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Speaker 2: we could do a renovation, or we could add on

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Speaker 2: to this extent. But I think through the different reasons

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Speaker 2: that people tend to move in a non ideal scenario.

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Speaker 2: And I think of job right, Like if you've got

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Speaker 2: an opportunity to move somewhere else, you're gonna get a

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Speaker 2: sweet promotion, but you got to move to this other

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Speaker 2: city or you.

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Speaker 1: Might get fired, I forget to tell you.

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Speaker 2: Yeah, So that's a huge consideration schools like education, that's

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Speaker 2: a big consideration.

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Speaker 1: That's literally why you know, that was a big.

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Speaker 2: Reason why you and I why we both moved our

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Speaker 2: families out of our former city. We were looking for

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Speaker 2: a different type of education, and so that's something that

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Speaker 2: I think can totally throw a wrench into things. And

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Speaker 2: then sometimes family as well, right like whether it's wanting

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Speaker 2: to move somewhere where you're closer to your parents for

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Speaker 2: them to be involved with like the new grandkids, the

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Speaker 2: fresh graind kids on the scene, or if your parents

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Speaker 2: are older and maybe the ta the tides change in

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Speaker 2: a little bit and there's more expected out of you

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Speaker 2: to take care of them. I think you've really got

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Speaker 2: to think through those three factors before you dump a

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Speaker 2: bunch of money into our renovation or even buy a

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Speaker 2: home somewhere where you're not thinking about those factors, because

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Speaker 2: those are the kind of things that life changes fast,

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Speaker 2: and three years in you're thinking, oh my gosh, we

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Speaker 2: didn't even think about this. We really should have thought

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Speaker 2: looked a little bit further down the road here and

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Speaker 2: made our decisions based on the next five to fifteen years,

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Speaker 2: not like the next five to fifteen months.

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Speaker 1: I guess yeah, I think it's I think it's a

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Speaker 1: good point. Really, it's really important and spending more than

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Speaker 1: putting more into the home and not getting the value

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Speaker 1: back out of it. It's okay, time will heal that wound.

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Speaker 1: But if you got the time, if you get the time,

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Speaker 1: and if you try to sell too quickly, you're going

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Speaker 1: to feel the immense pain of that at the closing table. Yeah,

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Speaker 1: and you're yeah, not gonna build a Like I talked

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Speaker 1: to so many people who are like, I want to

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Speaker 1: get back what I put into it. That's just not

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Speaker 1: how real estate works. And so if that's your goal,

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Speaker 1: then renovating is probably not for you.

436
00:18:48,560 --> 00:18:50,600
Speaker 2: Unless you're unless you're looking at putting a new garage door,

437
00:18:50,600 --> 00:18:53,320
Speaker 2: and evidently that's the number the number one item for

438
00:18:53,359 --> 00:18:55,600
Speaker 2: the most part, you get every dollar back.

439
00:18:55,720 --> 00:18:57,600
Speaker 1: Or if you're like DIY in your own bathroom, that's

440
00:18:57,600 --> 00:18:59,640
Speaker 1: one too. So you want to talk about maybe step

441
00:18:59,760 --> 00:19:02,360
Speaker 1: some of the steps you took finding a contractor yeah,

442
00:19:02,400 --> 00:19:04,920
Speaker 1: find find a good contract. Yeah, find a good contractor

443
00:19:05,160 --> 00:19:07,440
Speaker 1: but like that, even that, like that's so I'll say,

444
00:19:07,760 --> 00:19:10,440
Speaker 1: there's a lot of people who find somebody they think

445
00:19:10,520 --> 00:19:13,280
Speaker 1: is good and turns out they're not. So do you

446
00:19:13,320 --> 00:19:15,679
Speaker 1: have any recommendations for finding a good one? Yeah, certainly,

447
00:19:15,680 --> 00:19:16,719
Speaker 1: I mean we'll ask around.

448
00:19:17,080 --> 00:19:22,080
Speaker 2: I mean, it's tough to escape your reputation as to

449
00:19:22,240 --> 00:19:23,960
Speaker 2: whether or not you're going to go over budget, whether

450
00:19:24,040 --> 00:19:27,119
Speaker 2: or not delays, whether or not the as far as

451
00:19:27,119 --> 00:19:29,639
Speaker 2: the timeline right, or whether or not the quality of

452
00:19:29,640 --> 00:19:31,840
Speaker 2: the work doesn't hold up. But I would say even

453
00:19:31,920 --> 00:19:36,159
Speaker 2: before that, because he was asking about like what steps

454
00:19:36,160 --> 00:19:38,879
Speaker 2: did you take or what would you change, Kate and

455
00:19:38,920 --> 00:19:41,480
Speaker 2: I really thought through how we wanted to use the spaces.

456
00:19:42,400 --> 00:19:43,959
Speaker 2: Like we weren't just thinking, oh, we want to make

457
00:19:43,960 --> 00:19:46,520
Speaker 2: the house bigger, let's just add a room, but we

458
00:19:46,600 --> 00:19:50,080
Speaker 2: thought very specifically about how we would arrange the furniture

459
00:19:50,119 --> 00:19:52,959
Speaker 2: within that room and how it would accommodate that what

460
00:19:53,000 --> 00:19:55,399
Speaker 2: we wanted to do in those spaces. I think thinking

461
00:19:55,520 --> 00:19:59,040
Speaker 2: very specifically about that can help you to be like, oh, no, no,

462
00:19:59,080 --> 00:20:01,360
Speaker 2: we actually need to extend this wall or this room

463
00:20:01,440 --> 00:20:03,240
Speaker 2: like another two feet because we think we want to

464
00:20:03,280 --> 00:20:05,760
Speaker 2: use it in this way. But that's not gonna quite flow.

465
00:20:05,800 --> 00:20:08,240
Speaker 2: It's not gonna work quite to the extent that we're

466
00:20:08,280 --> 00:20:10,480
Speaker 2: that we're winning it to. But beyond that, we hired

467
00:20:10,480 --> 00:20:12,879
Speaker 2: an architect because that helps just for you to get

468
00:20:12,920 --> 00:20:16,000
Speaker 2: the thoughts from your brain onto an actual set of

469
00:20:16,080 --> 00:20:18,439
Speaker 2: drawings that a builder can take. But then as far

470
00:20:18,440 --> 00:20:21,399
Speaker 2: as the builder goes, we got plenty of quotes. We

471
00:20:21,520 --> 00:20:23,440
Speaker 2: met with a lot of different builders, and you kind

472
00:20:23,440 --> 00:20:25,720
Speaker 2: of have to go with your gut aside from checking

473
00:20:25,720 --> 00:20:28,679
Speaker 2: out their people. You know, they've got references and you

474
00:20:28,680 --> 00:20:30,480
Speaker 2: can go see houses that they've worked on and things

475
00:20:30,520 --> 00:20:30,800
Speaker 2: like that.

476
00:20:30,880 --> 00:20:32,600
Speaker 1: But when you go with your gut, I think I

477
00:20:32,600 --> 00:20:34,680
Speaker 1: could be misinterpreted. They might be like that guy's got

478
00:20:34,680 --> 00:20:38,520
Speaker 1: a good fibe or like well sometimes like their logo

479
00:20:38,760 --> 00:20:40,960
Speaker 1: sometimes because like there's a guy and you know what

480
00:20:41,160 --> 00:20:44,480
Speaker 1: where he came back great on was his numbers, and

481
00:20:44,520 --> 00:20:46,359
Speaker 1: it's just like, oh, he's saying he could do it

482
00:20:46,400 --> 00:20:46,639
Speaker 1: for that.

483
00:20:47,320 --> 00:20:49,359
Speaker 2: But then we saw the quality of his work, We

484
00:20:49,400 --> 00:20:51,520
Speaker 2: saw how he treated we you know, we heard from

485
00:20:51,520 --> 00:20:53,919
Speaker 2: clients and it we could read between the lines a

486
00:20:53,920 --> 00:20:56,919
Speaker 2: little bit that he wasn't the most professional. And that

487
00:20:56,960 --> 00:20:58,400
Speaker 2: was sort of an instance where we could have gone

488
00:20:58,400 --> 00:21:02,240
Speaker 2: with a more affordable option, but it may have ultimately

489
00:21:02,280 --> 00:21:04,760
Speaker 2: cost us the same plus a whole lot of headache

490
00:21:05,280 --> 00:21:07,200
Speaker 2: to boot, and so we didn't go with the most

491
00:21:07,200 --> 00:21:09,320
Speaker 2: expensive contractor we didn't go with the cheapest, but I

492
00:21:09,320 --> 00:21:11,200
Speaker 2: think we kind of found the goldilocks right in the middle,

493
00:21:11,480 --> 00:21:14,680
Speaker 2: and it's really important quality and we were totally happy

494
00:21:14,680 --> 00:21:14,879
Speaker 2: with them.

495
00:21:14,920 --> 00:21:17,320
Speaker 1: It's really important to note that some people will say, yeah,

496
00:21:17,320 --> 00:21:20,679
Speaker 1: I can do it for this, but can they like

497
00:21:20,720 --> 00:21:23,879
Speaker 1: are they underestimating? Are they not including all the potential costs?

498
00:21:23,880 --> 00:21:25,960
Speaker 1: And so then they come back to you once you've

499
00:21:25,960 --> 00:21:27,639
Speaker 1: signed the contract and they're like, yeah, I said it

500
00:21:27,640 --> 00:21:29,520
Speaker 1: was gonna be thirty five grand, it's gonna be forty

501
00:21:29,560 --> 00:21:32,240
Speaker 1: seven grand because I wasn't thinking about this and this,

502
00:21:32,320 --> 00:21:35,679
Speaker 1: and they just haven't really built into their quote everything

503
00:21:35,800 --> 00:21:38,199
Speaker 1: is necessary. So you that's part on you as a

504
00:21:38,200 --> 00:21:40,320
Speaker 1: homeowner to kind of push back and ask those questions

505
00:21:40,400 --> 00:21:42,480
Speaker 1: as well, so you know that like the quote that

506
00:21:42,560 --> 00:21:45,760
Speaker 1: looks awesome, well it might not be as awesome an

507
00:21:45,760 --> 00:21:49,200
Speaker 1: actuality either, and maybe the quote that looks higher is

508
00:21:49,400 --> 00:21:52,080
Speaker 1: spot on and that's actually what they're gonna charge you. Yea.

509
00:21:52,160 --> 00:21:54,160
Speaker 2: But because they spent two hours there and then when

510
00:21:54,160 --> 00:21:56,000
Speaker 2: they finally sent the quote over, it was like seven

511
00:21:56,080 --> 00:21:58,960
Speaker 2: pages broken down per line on him and the guy

512
00:21:59,359 --> 00:22:02,240
Speaker 2: the company we with, that's exactly what they did, and

513
00:22:02,600 --> 00:22:05,040
Speaker 2: we were so spot on as far as the numbers go.

514
00:22:05,119 --> 00:22:08,280
Speaker 2: And granted it's not because nothing changed. Things changed, like

515
00:22:08,320 --> 00:22:10,479
Speaker 2: but there were some spots where we saved some money.

516
00:22:10,560 --> 00:22:12,480
Speaker 2: But then there's other areas where we said, ooh, you

517
00:22:12,520 --> 00:22:14,640
Speaker 2: know what, we're gonna make that instead of a single

518
00:22:14,680 --> 00:22:16,440
Speaker 2: we're gonna make that a double window. And so we

519
00:22:16,440 --> 00:22:19,840
Speaker 2: we totally ate the cost of that window. That was painful.

520
00:22:19,960 --> 00:22:22,439
Speaker 2: I'm just like, oh, this is it was already installed.

521
00:22:23,080 --> 00:22:26,080
Speaker 1: Painful? Oh totally. It was.

522
00:22:26,160 --> 00:22:29,639
Speaker 2: Sorry about that, but uh, I mean, yeah, certainly do

523
00:22:29,760 --> 00:22:33,159
Speaker 2: that ideally, Yeah, you say it up the cash. But

524
00:22:33,200 --> 00:22:36,359
Speaker 2: we always talk about how renovations are also an area

525
00:22:36,400 --> 00:22:40,640
Speaker 2: where a he lock if done prudently without going too

526
00:22:40,920 --> 00:22:43,280
Speaker 2: far off the deep end the reasonable payoff time frame.

527
00:22:43,400 --> 00:22:45,919
Speaker 2: Yeah that can that can make sense. But yeah, hopefully

528
00:22:45,960 --> 00:22:48,639
Speaker 2: all that will give him some some practical steps to

529
00:22:48,640 --> 00:22:51,439
Speaker 2: take in order to not only consider an add on

530
00:22:51,640 --> 00:22:54,040
Speaker 2: addition or renovation, but actually following through with it.

531
00:22:54,119 --> 00:22:55,640
Speaker 1: For sure. All right, that was a lot. I feel

532
00:22:55,640 --> 00:22:57,760
Speaker 1: like we could have done more, but no, well.

533
00:22:57,720 --> 00:22:59,119
Speaker 2: He even said, he's just like, maybe this will be

534
00:22:59,160 --> 00:23:00,840
Speaker 2: a whole episode, and it really could be.

535
00:23:00,880 --> 00:23:02,880
Speaker 1: I don't know if we'll do that. Really, it truly could,

536
00:23:02,880 --> 00:23:04,800
Speaker 1: because there's so much to talk about here, and we

537
00:23:04,840 --> 00:23:07,679
Speaker 1: could go into more depth on every single one of

538
00:23:07,680 --> 00:23:10,120
Speaker 1: those points. So if there's follow up needed, Tim send

539
00:23:10,200 --> 00:23:13,280
Speaker 1: us another question. All right, we've got more to get to, Matt,

540
00:23:13,320 --> 00:23:15,560
Speaker 1: including we're going to talk about canceling a credit card

541
00:23:15,560 --> 00:23:17,840
Speaker 1: whether it ever makes sense. We'll get to that and

542
00:23:17,880 --> 00:23:18,760
Speaker 1: more right after this.

543
00:23:27,480 --> 00:23:30,000
Speaker 2: All right, buddy, we are back from the break. We

544
00:23:30,040 --> 00:23:31,879
Speaker 2: are going to talk about student loans here in a minute,

545
00:23:31,880 --> 00:23:35,399
Speaker 2: but let's hear from a listener who he's looking to

546
00:23:35,480 --> 00:23:37,840
Speaker 2: make the right decision with the credit card that's not

547
00:23:37,920 --> 00:23:38,440
Speaker 2: serving him.

548
00:23:38,440 --> 00:23:38,680
Speaker 1: Well.

549
00:23:39,520 --> 00:23:42,520
Speaker 5: Hey, Matt and Jills Scott, I had a question about

550
00:23:42,560 --> 00:23:44,080
Speaker 5: canceling my oldest credit card.

551
00:23:44,480 --> 00:23:45,560
Speaker 1: So my oldest credit.

552
00:23:45,440 --> 00:23:48,760
Speaker 5: Card is a Discover from two thousand and seven, and

553
00:23:48,880 --> 00:23:52,520
Speaker 5: my next oldest is an Amex from twenty nineteen. My

554
00:23:52,520 --> 00:23:54,840
Speaker 5: current credit score is in the eight twenty to eight

555
00:23:54,960 --> 00:24:00,120
Speaker 5: forty range, so I'm curious how much drop will I

556
00:24:00,160 --> 00:24:05,400
Speaker 5: get if canceling my oldest card. The reason for wanting

557
00:24:05,440 --> 00:24:09,879
Speaker 5: to cancel is that Discover started charging me a monthly

558
00:24:09,960 --> 00:24:13,080
Speaker 5: charge with that for protection of some sort without asking,

559
00:24:13,560 --> 00:24:16,960
Speaker 5: and then I had fraudulent card charges. So then I

560
00:24:17,000 --> 00:24:20,200
Speaker 5: had the card replaced, froze my account, and now they've

561
00:24:20,200 --> 00:24:24,520
Speaker 5: continued to allow fraudulent charges on my account, and I

562
00:24:24,560 --> 00:24:27,560
Speaker 5: really just don't want to deal with Discover anymore. So

563
00:24:28,640 --> 00:24:31,959
Speaker 5: I'd really like to hear your take on my options.

564
00:24:32,000 --> 00:24:33,919
Speaker 5: If I should just keep dealing with the headache of

565
00:24:34,119 --> 00:24:37,919
Speaker 5: Discover card, or if I should just bite the bullet

566
00:24:37,920 --> 00:24:41,280
Speaker 5: and maybe lose one hundred points on my credit SCRD score.

567
00:24:41,359 --> 00:24:43,400
Speaker 5: Whatever you guys think it'll be. Thanks, love the show.

568
00:24:43,560 --> 00:24:47,840
Speaker 1: Bye, Scott Man Bumber that Discover has treated you so poorly,

569
00:24:47,880 --> 00:24:50,760
Speaker 1: I hate to hear that. Yeah, and I totally get

570
00:24:51,040 --> 00:24:53,560
Speaker 1: wanting to cancel this card if they're not treating you well.

571
00:24:53,600 --> 00:24:55,480
Speaker 1: Would you put up with that that kind of treatment, Joe, Wow,

572
00:24:55,640 --> 00:24:57,800
Speaker 1: of course not. No, I wouldn't. And I think one

573
00:24:57,800 --> 00:25:01,040
Speaker 1: of the best abilities that we have as consumers in

574
00:25:01,080 --> 00:25:03,480
Speaker 1: a free market economy is to walk away and to

575
00:25:03,560 --> 00:25:06,119
Speaker 1: not do business with a company that's not responsive and

576
00:25:06,160 --> 00:25:07,120
Speaker 1: that's not treating as well.

577
00:25:07,240 --> 00:25:10,200
Speaker 2: Yeah, I need to Discover well.

578
00:25:10,240 --> 00:25:13,840
Speaker 1: And it's funny because I like Discover, Like I talk

579
00:25:13,880 --> 00:25:16,200
Speaker 1: about how they're one of my favorite online savings accounts.

580
00:25:16,240 --> 00:25:18,600
Speaker 2: Like maybe now the Discover credit card division.

581
00:25:18,680 --> 00:25:21,360
Speaker 1: Well, no, actually, I think when you look at from

582
00:25:21,359 --> 00:25:25,480
Speaker 1: a customer service perspective, they perform better the ratings than

583
00:25:25,880 --> 00:25:26,840
Speaker 1: some of the other big guys.

584
00:25:26,880 --> 00:25:29,720
Speaker 2: So what's funny is that. Well, I'm thinking about maybe

585
00:25:29,800 --> 00:25:31,399
Speaker 2: like one of the few times I've ever had a

586
00:25:31,400 --> 00:25:33,639
Speaker 2: fraudulent charge on an actual card, and I think it

587
00:25:33,800 --> 00:25:36,080
Speaker 2: I think it was discovered like as I think back,

588
00:25:36,119 --> 00:25:41,160
Speaker 2: So maybe it's more anecdotal and less a broad survey. Yeah,

589
00:25:41,200 --> 00:25:43,359
Speaker 2: maybe with what you saw, But I think I'm with you, Scott,

590
00:25:43,520 --> 00:25:46,320
Speaker 2: and maybe we'll do our our own unofficial survey. If

591
00:25:46,320 --> 00:25:47,879
Speaker 2: there's other listeners out there and you've had a lot

592
00:25:47,880 --> 00:25:50,280
Speaker 2: of fraudulent charges to your Discover card, let us know

593
00:25:51,160 --> 00:25:53,480
Speaker 2: we're gonna break the scoop, you know what they say.

594
00:25:53,480 --> 00:25:56,400
Speaker 2: And even great companies, by the way they can eat,

595
00:25:56,440 --> 00:26:00,280
Speaker 2: they can have tough times or like not treat certain

596
00:26:00,280 --> 00:26:02,560
Speaker 2: customers well. Like a big, big company like that, there's

597
00:26:02,560 --> 00:26:06,120
Speaker 2: bound to be complaints from time to time. So yeah,

598
00:26:06,600 --> 00:26:08,880
Speaker 2: but I also get it, and I think it makes

599
00:26:08,880 --> 00:26:11,800
Speaker 2: sense if a company has consistently treated you poorly that

600
00:26:11,880 --> 00:26:16,000
Speaker 2: you say peace out and you walk away, because like,

601
00:26:16,200 --> 00:26:18,480
Speaker 2: why keep doing business with somebody who's not being.

602
00:26:18,320 --> 00:26:18,679
Speaker 1: Good to you.

603
00:26:18,880 --> 00:26:21,359
Speaker 2: Yeah, and on top of that, I'm sure you're probably thinking, skuy, well,

604
00:26:21,359 --> 00:26:24,199
Speaker 2: it's just me, like little ol me. How big of

605
00:26:24,240 --> 00:26:25,840
Speaker 2: a change? How big of an impact am I going

606
00:26:25,880 --> 00:26:27,960
Speaker 2: to make by myself? But you sent us a voice memo,

607
00:26:28,040 --> 00:26:30,159
Speaker 2: you sent us a listener question, So think about the

608
00:26:30,200 --> 00:26:34,280
Speaker 2: amplification that your voice is quite literally getting. But our

609
00:26:34,320 --> 00:26:37,640
Speaker 2: advice is normally to not close old credit cards. And

610
00:26:37,680 --> 00:26:39,000
Speaker 2: that's because the oldest.

611
00:26:38,640 --> 00:26:41,760
Speaker 1: Cards that you have are typically helping you out in

612
00:26:41,840 --> 00:26:43,919
Speaker 1: multiple ways. Right, So first of all, the older that

613
00:26:43,920 --> 00:26:46,520
Speaker 1: line of credit is, the better it reflects on your

614
00:26:46,520 --> 00:26:47,119
Speaker 1: credit score.

615
00:26:47,560 --> 00:26:50,320
Speaker 2: You typically have a higher credit limit on those older

616
00:26:50,359 --> 00:26:52,840
Speaker 2: cards as well, that you've you know where you've handled

617
00:26:52,880 --> 00:26:58,800
Speaker 2: them well, which benefits your utilization utilization ratio. But then still,

618
00:26:58,880 --> 00:27:02,119
Speaker 2: if you've been handling credit well for a while, ditching

619
00:27:02,160 --> 00:27:03,840
Speaker 2: the card so you don't have to do business with

620
00:27:04,000 --> 00:27:07,600
Speaker 2: a company who you know isn't making you the happiest,

621
00:27:07,760 --> 00:27:10,480
Speaker 2: it's not going to cause much harm. I would say

622
00:27:10,480 --> 00:27:14,040
Speaker 2: if this was like your app, your singular only credit card,

623
00:27:14,560 --> 00:27:17,080
Speaker 2: or if it was by far your your biggest credit line,

624
00:27:17,760 --> 00:27:20,320
Speaker 2: I would be reluctant to see you do it, because

625
00:27:20,600 --> 00:27:23,159
Speaker 2: you know, it could cause your score to drop pretty significantly.

626
00:27:23,440 --> 00:27:25,240
Speaker 2: I'm thinking in the range of like thirty points or

627
00:27:25,240 --> 00:27:28,159
Speaker 2: even more. I'm thinking of like a credit limit of

628
00:27:28,520 --> 00:27:31,200
Speaker 2: on this one you've got, I don't know, twenty thousand dollars,

629
00:27:31,200 --> 00:27:33,200
Speaker 2: and then on your one other credit card that also

630
00:27:33,200 --> 00:27:34,920
Speaker 2: happens to be a good bit newer. If it's only

631
00:27:35,000 --> 00:27:38,280
Speaker 2: like twelve hundred, that's a pretty significant drop.

632
00:27:38,640 --> 00:27:41,320
Speaker 1: And I'm not a credit that's available to you. Losing

633
00:27:41,320 --> 00:27:43,359
Speaker 1: that amount of overall credit that you have access to

634
00:27:43,480 --> 00:27:45,400
Speaker 1: is going to be a problem from a credit score perspective.

635
00:27:45,520 --> 00:27:47,040
Speaker 1: But the truth is what's going to happen is your

636
00:27:47,080 --> 00:27:48,639
Speaker 1: score is likely in to drop by ten to fifteen

637
00:27:48,680 --> 00:27:52,000
Speaker 1: points if you close this card, maybe even less, and

638
00:27:52,359 --> 00:27:54,919
Speaker 1: you've got such a tremendously high score it barely matters.

639
00:27:54,960 --> 00:28:00,200
Speaker 1: I think it's worth pointing that out. We say where

640
00:28:00,200 --> 00:28:02,359
Speaker 1: you have these days, Joe Diino, I don't follow it

641
00:28:02,440 --> 00:28:05,520
Speaker 1: that closely. I'm probably seven eighty seven ninety something like that,

642
00:28:05,560 --> 00:28:07,840
Speaker 1: So I'm not as good as Scott. All right, Scott's

643
00:28:07,840 --> 00:28:10,440
Speaker 1: got that one on me. But like when we talk

644
00:28:10,480 --> 00:28:14,040
Speaker 1: about it, seven sixty plus that's essentially perfect from our

645
00:28:14,080 --> 00:28:17,280
Speaker 1: point of view, and getting above that, it's not really

646
00:28:17,280 --> 00:28:19,399
Speaker 1: going to add much to your life. So if you

647
00:28:19,440 --> 00:28:21,719
Speaker 1: need to rent an apartment or apply for a mortgage,

648
00:28:21,880 --> 00:28:24,320
Speaker 1: it makes sense to pay extra attention to your score.

649
00:28:24,680 --> 00:28:26,760
Speaker 1: And if you don't, it's always a good idea to

650
00:28:26,800 --> 00:28:28,960
Speaker 1: kind of keep a loose eye on your credit score.

651
00:28:29,200 --> 00:28:31,560
Speaker 1: But in this case, Scott has clearly paid close attention

652
00:28:32,080 --> 00:28:34,000
Speaker 1: for a long time and this is just a minor

653
00:28:34,160 --> 00:28:36,600
Speaker 1: move that's not going to do much damage at all,

654
00:28:36,680 --> 00:28:37,640
Speaker 1: So totally yeah.

655
00:28:37,680 --> 00:28:39,880
Speaker 2: And you can also proactively take some steps to prevent

656
00:28:39,920 --> 00:28:42,960
Speaker 2: some of the harm to your credit score by let's say,

657
00:28:43,000 --> 00:28:46,640
Speaker 2: opening up a new credit card before you cancel this

658
00:28:46,680 --> 00:28:48,360
Speaker 2: old one. So I'm not sure if your AMEX is

659
00:28:48,360 --> 00:28:50,680
Speaker 2: the only other card in your possession, but if so.

660
00:28:51,560 --> 00:28:54,560
Speaker 1: It would be ideal to have at least two from

661
00:28:54,720 --> 00:28:57,680
Speaker 1: just different credit card issuers in case that they were

662
00:28:57,720 --> 00:28:59,000
Speaker 1: to cancel your card for some reason.

663
00:28:59,080 --> 00:29:01,520
Speaker 2: Right, So opening up a new card and then closing

664
00:29:01,520 --> 00:29:05,200
Speaker 2: a card that can both temporarily harm your score. But again,

665
00:29:05,320 --> 00:29:06,760
Speaker 2: you know you handle your credit well. You've got a

666
00:29:06,760 --> 00:29:09,440
Speaker 2: pretty high score. I'm not too worried about that. But

667
00:29:09,440 --> 00:29:12,240
Speaker 2: if you're not sure what other card to get, pretty

668
00:29:12,240 --> 00:29:16,280
Speaker 2: partial to the two percent cash back Card City Double Cash.

669
00:29:16,360 --> 00:29:18,000
Speaker 2: No matter what, you don't have to think about it.

670
00:29:18,040 --> 00:29:21,200
Speaker 1: You're getting that two percent return every single time Fidelity Visa. Man,

671
00:29:21,200 --> 00:29:23,720
Speaker 1: it's been the same thing, longest card in my wallet

672
00:29:23,760 --> 00:29:27,120
Speaker 1: for a long time. And yeah, you can play, play

673
00:29:27,160 --> 00:29:30,520
Speaker 1: the game and sign up for more travel cards that

674
00:29:30,880 --> 00:29:33,840
Speaker 1: offer superior sign up bonuses if that's your jam. But

675
00:29:33,880 --> 00:29:36,400
Speaker 1: if you're just looking for a replacement card that does

676
00:29:37,040 --> 00:29:40,640
Speaker 1: like your average sort of you best average card to

677
00:29:40,760 --> 00:29:43,320
Speaker 1: use on a regular basis, not trying to maximize awards,

678
00:29:43,960 --> 00:29:46,719
Speaker 1: just maximizing everyday rewards. Yeah, City Double Cash and facility.

679
00:29:47,160 --> 00:29:49,040
Speaker 2: It is worth It is worth the scene what bonus

680
00:29:49,080 --> 00:29:50,720
Speaker 2: offers are out there, because if you're like, you know what,

681
00:29:50,760 --> 00:29:52,880
Speaker 2: oh yeah, a few thousand dollars spend in a few

682
00:29:52,880 --> 00:29:54,560
Speaker 2: months for most people.

683
00:29:54,760 --> 00:29:55,880
Speaker 1: That's within reason.

684
00:29:56,320 --> 00:29:58,240
Speaker 2: That could be a good instance to take advantage of

685
00:29:58,240 --> 00:29:59,960
Speaker 2: one of those bonus offers. And I just thought too,

686
00:30:00,760 --> 00:30:04,000
Speaker 2: we're talking about him decreasing the total amount of credit

687
00:30:04,000 --> 00:30:07,920
Speaker 2: that's available to him, also request a credit limit increase

688
00:30:08,680 --> 00:30:11,440
Speaker 2: on your other card before you cancel the one card there.

689
00:30:12,000 --> 00:30:15,000
Speaker 2: That way, when you drop off that segment of credit

690
00:30:15,000 --> 00:30:18,520
Speaker 2: that's available to you, it's not as big of a ding. Again,

691
00:30:18,680 --> 00:30:20,680
Speaker 2: that's something that you can do every I don't know,

692
00:30:20,720 --> 00:30:22,560
Speaker 2: every quarter or every six months or so, but the

693
00:30:22,600 --> 00:30:24,720
Speaker 2: ability to get that as high as you can because

694
00:30:24,720 --> 00:30:28,000
Speaker 2: fact is so sometimes there are like these default bump ups,

695
00:30:29,280 --> 00:30:32,160
Speaker 2: and oftentimes I don't think they're nearly as generous as

696
00:30:32,720 --> 00:30:35,520
Speaker 2: how your income has increased, and they probably haven't kept

697
00:30:35,600 --> 00:30:38,640
Speaker 2: up with pricely you're spending, right, so prices have really

698
00:30:38,680 --> 00:30:41,520
Speaker 2: gone up, and so over time it's almost like your

699
00:30:41,520 --> 00:30:44,360
Speaker 2: credit available to you has almost decreased.

700
00:30:44,440 --> 00:30:48,800
Speaker 1: Your utilization is getting worse. It's slightly and slowly. Yeah,

701
00:30:48,840 --> 00:30:50,520
Speaker 1: it's like the water's turning up on the pot and

702
00:30:50,560 --> 00:30:52,640
Speaker 1: the frogs just kind of like, yeah, I don't know,

703
00:30:52,680 --> 00:30:54,479
Speaker 1: this is getting a little uncomfortable, but I'm pretty used

704
00:30:54,520 --> 00:30:57,760
Speaker 1: to it. And you're right proactively asking if you've handled

705
00:30:57,760 --> 00:31:00,200
Speaker 1: your credit card well, often they'll give you a prety

706
00:31:00,200 --> 00:31:02,960
Speaker 1: significant bump up in that credit totally a R. Matt.

707
00:31:03,000 --> 00:31:05,320
Speaker 1: Let's get to another question. This one is specifically about

708
00:31:05,360 --> 00:31:08,040
Speaker 1: student loan debt. Wait for forgiveness or pay that sucker

709
00:31:08,040 --> 00:31:08,520
Speaker 1: off quickly?

710
00:31:08,880 --> 00:31:12,440
Speaker 3: Hi, Matt and Joel. This is Danielle from Minnesota and

711
00:31:12,680 --> 00:31:15,200
Speaker 3: I have a student loan question I could use your

712
00:31:15,200 --> 00:31:19,720
Speaker 3: help on. I have a substantial Anoma student loan debt,

713
00:31:20,000 --> 00:31:22,840
Speaker 3: which I am happy to have. It got me a

714
00:31:22,880 --> 00:31:27,360
Speaker 3: great education at a great law school. It is about

715
00:31:27,400 --> 00:31:31,800
Speaker 3: three hundred and seventy thousand dollars. I have the savings

716
00:31:32,560 --> 00:31:38,560
Speaker 3: to pay it off, but I am considering paying off

717
00:31:38,960 --> 00:31:42,840
Speaker 3: two hundred and seventy thousand of it and then paying

718
00:31:42,920 --> 00:31:46,240
Speaker 3: the additional one hundred thousand dollars off in five years

719
00:31:46,240 --> 00:31:50,320
Speaker 3: with monthly payments. The issue that I'm having is that

720
00:31:50,360 --> 00:31:55,120
Speaker 3: when I run the numbers, it appears that I would

721
00:31:55,280 --> 00:32:00,880
Speaker 3: be better off paying the monthly payment under the pay

722
00:32:00,920 --> 00:32:07,240
Speaker 3: as you earn plans over the sixteen years that are

723
00:32:07,360 --> 00:32:13,360
Speaker 3: left in the twenty five year repayment whatever that the

724
00:32:13,400 --> 00:32:20,040
Speaker 3: current loan law is. But I'm a little uncomfortable keeping

725
00:32:20,080 --> 00:32:23,880
Speaker 3: the loans for sixteen more years, paying the monthly payment

726
00:32:23,960 --> 00:32:28,920
Speaker 3: and then paying the tax on the balance. My calculations

727
00:32:29,960 --> 00:32:33,000
Speaker 3: show that I wouldn't ever be paying principle just interest,

728
00:32:33,160 --> 00:32:36,240
Speaker 3: so then I would have a hefty tax bill at

729
00:32:36,280 --> 00:32:39,320
Speaker 3: the end of these sixteen years that are remaining in

730
00:32:39,360 --> 00:32:45,200
Speaker 3: the loan's life. I am leaning toward paying off the

731
00:32:45,240 --> 00:32:49,240
Speaker 3: loans because then I don't have to be beholden to

732
00:32:49,320 --> 00:32:53,760
Speaker 3: any legislative changes that are going to happen, or an

733
00:32:53,840 --> 00:32:58,440
Speaker 3: increase to the monthly payments. But I can't get past

734
00:32:58,880 --> 00:33:02,520
Speaker 3: that with out any interest that I would end up

735
00:33:03,040 --> 00:33:07,080
Speaker 3: better off not paying them off and paying a larger

736
00:33:07,160 --> 00:33:13,040
Speaker 3: amount overall on the loans. I would love your insight

737
00:33:13,160 --> 00:33:16,040
Speaker 3: on this because I have been going back and forth

738
00:33:16,440 --> 00:33:19,560
Speaker 3: on this for a very long time, and I think

739
00:33:19,640 --> 00:33:21,040
Speaker 3: I need to actually make a decision.

740
00:33:21,400 --> 00:33:22,800
Speaker 1: Thanks so much so, Joe.

741
00:33:22,840 --> 00:33:25,000
Speaker 2: We've never stopped a voice memo in the middle of

742
00:33:25,280 --> 00:33:28,720
Speaker 2: its delivery, but I almost did, and did, and I

743
00:33:28,720 --> 00:33:31,800
Speaker 2: was about to google like record scratch sound effect because

744
00:33:31,800 --> 00:33:34,720
Speaker 2: what she said three hundred and seventy thousand about like

745
00:33:34,920 --> 00:33:37,520
Speaker 2: fell out of my seat, that's how your neck almost

746
00:33:37,520 --> 00:33:40,560
Speaker 2: like broken was what as massive? That is a lot,

747
00:33:40,920 --> 00:33:43,240
Speaker 2: but it's it's for a good cost in the sense

748
00:33:43,280 --> 00:33:45,520
Speaker 2: that she got that awesome law degree, which is it's

749
00:33:45,560 --> 00:33:48,120
Speaker 2: really cool because she said she's happy to have the

750
00:33:48,160 --> 00:33:51,120
Speaker 2: student loan debt, which I think is a really healthy

751
00:33:51,120 --> 00:33:54,080
Speaker 2: outlec man. Like we've talked, it comes up all the

752
00:33:54,120 --> 00:33:57,800
Speaker 2: time we talk about Ken Honda and his book Happy Money.

753
00:33:58,320 --> 00:34:01,240
Speaker 2: But the ability to kind of happily part with money

754
00:34:01,280 --> 00:34:03,200
Speaker 2: that you've earned that's worked well for you, but that

755
00:34:03,280 --> 00:34:04,600
Speaker 2: is then going to go out into the world to

756
00:34:04,600 --> 00:34:06,800
Speaker 2: make other people happy, and you're going to receive a

757
00:34:06,800 --> 00:34:08,560
Speaker 2: service or a product that's then going to serve you.

758
00:34:09,000 --> 00:34:10,480
Speaker 2: That's how all the world works.

759
00:34:10,200 --> 00:34:12,600
Speaker 1: Man, and student loans get a bad rap, and understandably so.

760
00:34:12,719 --> 00:34:15,600
Speaker 1: Right we talked about the headline amount of student loan debt,

761
00:34:15,600 --> 00:34:19,880
Speaker 1: which is overwhelming. We talk about individuals, even many older

762
00:34:19,880 --> 00:34:22,080
Speaker 1: Americans with student loan debt that it didn't used to

763
00:34:22,120 --> 00:34:25,279
Speaker 1: be the case. And you could talk about what came first,

764
00:34:25,320 --> 00:34:28,120
Speaker 1: the chicken or the egg, what came first expensive education

765
00:34:28,480 --> 00:34:31,600
Speaker 1: or hefty student loans, and the government's involvement in the

766
00:34:31,600 --> 00:34:35,279
Speaker 1: student loan program. Like I don't want to go down

767
00:34:35,320 --> 00:34:38,279
Speaker 1: that road, but I'm just saying tough not to. It

768
00:34:38,320 --> 00:34:40,640
Speaker 1: is it is. But like student loans, yes, are a

769
00:34:40,640 --> 00:34:44,520
Speaker 1: burden for many, but it's also true to people who

770
00:34:45,120 --> 00:34:48,680
Speaker 1: use student loans effectively to get a degree that's going

771
00:34:48,760 --> 00:34:53,319
Speaker 1: to pay off for decades of higher earnings. It's if

772
00:34:53,320 --> 00:34:55,680
Speaker 1: you're prudent about your use of student loans and you're

773
00:34:55,680 --> 00:34:58,600
Speaker 1: thoughtful about your course of study, it can be an

774
00:34:58,600 --> 00:35:01,680
Speaker 1: amazing way to actually get a head start right on

775
00:35:01,719 --> 00:35:05,279
Speaker 1: your financial life. And so I agree, Matt, I love

776
00:35:05,360 --> 00:35:08,759
Speaker 1: Danielle's perspective here. Student loans can be a good form

777
00:35:08,760 --> 00:35:12,520
Speaker 1: of debt. That and how else would you, as a

778
00:35:12,680 --> 00:35:16,640
Speaker 1: seventeen year old or eighteen year old, qualify right for

779
00:35:17,040 --> 00:35:21,160
Speaker 1: a loan based on a high school degree, like you wouldn't.

780
00:35:21,239 --> 00:35:25,239
Speaker 1: Student loans are an effort to allow people to get

781
00:35:25,239 --> 00:35:28,120
Speaker 1: that degree that's going to give higher earnings without really

782
00:35:28,640 --> 00:35:30,480
Speaker 1: having any sort of collateral to show for it.

783
00:35:30,680 --> 00:35:34,080
Speaker 2: That's true. Uh huh, Yeah, it's that quote unquote good debt.

784
00:35:34,280 --> 00:35:36,600
Speaker 2: But let's give a little more context here because in

785
00:35:37,560 --> 00:35:41,000
Speaker 2: Danielle's email she mentioned that she and this is all

786
00:35:41,040 --> 00:35:42,040
Speaker 2: really important information.

787
00:35:42,239 --> 00:35:44,680
Speaker 1: I think that's why we're sharing it here. But she

788
00:35:44,719 --> 00:35:47,320
Speaker 1: owns a house, she's already saved for her kids college,

789
00:35:47,680 --> 00:35:50,160
Speaker 1: and she's also contributing as much as she can to

790
00:35:50,480 --> 00:35:54,720
Speaker 1: retirement accounts, and so like student loans are her only

791
00:35:54,800 --> 00:35:58,040
Speaker 1: major financial hurdle that she has to tackle, and she's

792
00:35:58,080 --> 00:36:00,200
Speaker 1: got the cash on hand. She's got the money to

793
00:36:00,200 --> 00:36:01,920
Speaker 1: be able toss up the whole thing now if she

794
00:36:01,960 --> 00:36:05,480
Speaker 1: wanted to, which is just incredible. So it's worth highlighting

795
00:36:05,480 --> 00:36:10,440
Speaker 1: the fact that you know, despite this incredibly mountain high

796
00:36:10,560 --> 00:36:12,919
Speaker 1: level of student loan debt, that you have a world

797
00:36:13,000 --> 00:36:16,520
Speaker 1: of options at your disposal because you've handled your finances

798
00:36:16,680 --> 00:36:20,200
Speaker 1: so thoughtful. I think if I were Danielle here, I

799
00:36:20,200 --> 00:36:21,799
Speaker 1: don't want to pay up that student loan debt as

800
00:36:21,800 --> 00:36:24,960
Speaker 1: soon as possible. And that's because the average interest rate

801
00:36:25,120 --> 00:36:28,400
Speaker 1: for recent graduate student loans is close to eight percent.

802
00:36:29,160 --> 00:36:31,800
Speaker 1: And yes, if you play your cards right, that debt

803
00:36:32,000 --> 00:36:35,480
Speaker 1: can be forgiven. But I would say this too, I

804
00:36:35,480 --> 00:36:40,280
Speaker 1: wouldn't necessarily be worried about legislative changes or a president

805
00:36:40,920 --> 00:36:44,480
Speaker 1: doing something that's going to put your student loan forgiveness

806
00:36:44,520 --> 00:36:48,800
Speaker 1: at jeopardy. When changes are made, current beneficiaries are almost

807
00:36:48,840 --> 00:36:52,880
Speaker 1: always grandfathered in right, so PSLF was not taken away,

808
00:36:52,920 --> 00:36:57,200
Speaker 1: for instance, once the Trump presidency ensued. That was something

809
00:36:57,200 --> 00:37:01,120
Speaker 1: people were worried about, but I think lessly so. And

810
00:37:01,280 --> 00:37:05,080
Speaker 1: still keeping that debt around for sixteen years to achieve

811
00:37:05,080 --> 00:37:08,400
Speaker 1: forgiveness when you'd still owe tax on the forgiven amount,

812
00:37:08,880 --> 00:37:11,960
Speaker 1: I think it makes it not all that appealing. Yeah,

813
00:37:12,000 --> 00:37:12,360
Speaker 1: I want to.

814
00:37:12,360 --> 00:37:14,879
Speaker 2: Go back to I guess to the context as well,

815
00:37:14,920 --> 00:37:17,920
Speaker 2: because the first thing that came into my mind. I

816
00:37:17,920 --> 00:37:20,480
Speaker 2: think for most folks when they're hearing her say all

817
00:37:20,480 --> 00:37:22,400
Speaker 2: this is that, oh man, think about all the other

818
00:37:22,440 --> 00:37:25,319
Speaker 2: things you could potentially do with that money. And so

819
00:37:25,440 --> 00:37:28,200
Speaker 2: I think that's when like, so let's say, for instance,

820
00:37:28,200 --> 00:37:30,279
Speaker 2: she didn't have a house. Let's say she had never

821
00:37:30,320 --> 00:37:33,760
Speaker 2: saved her retirement. Let's say in same for kids college

822
00:37:33,800 --> 00:37:36,880
Speaker 2: that's optional. But the fact that she's also already done that,

823
00:37:36,880 --> 00:37:38,880
Speaker 2: that's icing on the cake. But when you consider the

824
00:37:38,920 --> 00:37:42,480
Speaker 2: opportunity cost and having cash on hand to be able

825
00:37:42,560 --> 00:37:45,319
Speaker 2: to get some of these other plates spinning, that's what

826
00:37:45,360 --> 00:37:48,160
Speaker 2: you have to consider. But again, in her case, she's

827
00:37:48,200 --> 00:37:50,080
Speaker 2: already done all those things, and so this is sort

828
00:37:50,120 --> 00:37:51,799
Speaker 2: of the next thing as she's looking down the list

829
00:37:51,800 --> 00:37:54,319
Speaker 2: of the things that she wants to bring into her

830
00:37:54,320 --> 00:37:56,920
Speaker 2: life or in this case, eliminate from her life. I

831
00:37:56,960 --> 00:37:59,680
Speaker 2: think that's one of the biggest best things that she

832
00:37:59,719 --> 00:38:01,719
Speaker 2: has going for her. It would be a completely different

833
00:38:01,760 --> 00:38:06,239
Speaker 2: conversation if she didn't have retirement, specifically that one in

834
00:38:06,320 --> 00:38:09,160
Speaker 2: place house. That's just I mean, that's more like lifestyle

835
00:38:09,320 --> 00:38:11,719
Speaker 2: lifestyle stuff right there. But because she has, I think

836
00:38:11,719 --> 00:38:14,640
Speaker 2: that's another reason to that you can start thinking through, well,

837
00:38:14,640 --> 00:38:16,920
Speaker 2: what do I want like what bothers me the most,

838
00:38:17,080 --> 00:38:20,240
Speaker 2: And it seems like that this is, yeah, absolutely rising

839
00:38:20,280 --> 00:38:21,120
Speaker 2: to the top of the lively.

840
00:38:21,200 --> 00:38:23,759
Speaker 1: She's been waffling on it for a long time. I

841
00:38:23,800 --> 00:38:25,680
Speaker 1: think the pros of keeping the debt around, or that

842
00:38:25,760 --> 00:38:27,879
Speaker 1: you wouldn't have to pay off the whole balance. It's

843
00:38:27,920 --> 00:38:31,440
Speaker 1: always nice to get something for free. You'd almost assuredly

844
00:38:31,560 --> 00:38:34,880
Speaker 1: be better off from a pure ROI perspective if you

845
00:38:34,920 --> 00:38:37,120
Speaker 1: were to pay the minimums and then get forgiveness sixteen

846
00:38:37,200 --> 00:38:40,360
Speaker 1: years from now. You pay less money overall on those loans,

847
00:38:40,680 --> 00:38:43,960
Speaker 1: and that is for sure enticing, But it also I

848
00:38:44,000 --> 00:38:46,160
Speaker 1: don't think it means, especially in your case, Daniel, that

849
00:38:46,200 --> 00:38:50,400
Speaker 1: it's the best course of action, because the forgiveness tax

850
00:38:50,440 --> 00:38:53,360
Speaker 1: bill that you would get after the fact could be enormous,

851
00:38:53,440 --> 00:38:56,279
Speaker 1: especially if the balance is growing over time as you

852
00:38:56,360 --> 00:39:00,319
Speaker 1: make minimum payments. And yeah, I think again, and we'd

853
00:39:00,320 --> 00:39:02,719
Speaker 1: be having a different conversation if this student loan were

854
00:39:02,760 --> 00:39:05,360
Speaker 1: more of a burden to you. Yes, it's a massive number,

855
00:39:05,400 --> 00:39:07,960
Speaker 1: but you've also been so diligent with your finances that

856
00:39:08,000 --> 00:39:09,120
Speaker 1: you can get rid of it in a shorter or

857
00:39:09,160 --> 00:39:11,279
Speaker 1: you could actually get rid of it today based on

858
00:39:11,320 --> 00:39:13,120
Speaker 1: what you said in the voice memo, you're going to

859
00:39:13,280 --> 00:39:16,359
Speaker 1: allow some of it to linger just a bit. I'm

860
00:39:16,360 --> 00:39:18,759
Speaker 1: assuming to have cash on hand for other purposes. But

861
00:39:19,880 --> 00:39:21,880
Speaker 1: to me, it means, yeah, why not get rid of

862
00:39:21,960 --> 00:39:24,160
Speaker 1: this thing? Why drag it out for sixteen years? Totally?

863
00:39:24,280 --> 00:39:27,400
Speaker 1: And there's just something mentally freeing about getting the student

864
00:39:27,440 --> 00:39:30,120
Speaker 1: loan debt out of your life quickly that I think

865
00:39:30,160 --> 00:39:32,839
Speaker 1: is going to allow her to more easily crush other

866
00:39:32,880 --> 00:39:33,680
Speaker 1: financial goals and.

867
00:39:33,680 --> 00:39:36,080
Speaker 2: Other life goals that she has for herself. And So

868
00:39:36,120 --> 00:39:38,960
Speaker 2: because of that and the emotional toll that just keeping

869
00:39:39,000 --> 00:39:42,279
Speaker 2: this around for sixty more years that that would cause, man,

870
00:39:42,320 --> 00:39:44,239
Speaker 2: I would totally say it to good. Pay that lump

871
00:39:44,320 --> 00:39:47,359
Speaker 2: sum the two seventy and then stick with that five

872
00:39:47,400 --> 00:39:51,160
Speaker 2: year payoff plan where you're going to do that final

873
00:39:51,200 --> 00:39:53,479
Speaker 2: one hundred k. And the fact that she has a plan,

874
00:39:54,000 --> 00:39:56,840
Speaker 2: it's just incredible, tells me that she's mapped this out right,

875
00:39:57,040 --> 00:40:00,000
Speaker 2: like she has analyzed it and with that in mind,

876
00:40:00,080 --> 00:40:02,319
Speaker 2: and I think she's more looking for our blessing. So

877
00:40:02,440 --> 00:40:05,880
Speaker 2: I give you my blessing same to do exactly what

878
00:40:05,920 --> 00:40:08,080
Speaker 2: you have planned out, because you sound very intelligent, and

879
00:40:08,120 --> 00:40:12,160
Speaker 2: I think you are. You're approaching this so strategically that like,

880
00:40:12,160 --> 00:40:13,719
Speaker 2: I've never been so happy for somebody that has three

881
00:40:13,760 --> 00:40:16,080
Speaker 2: hundred and seventy thousand dollars where there's a state loan's that.

882
00:40:16,160 --> 00:40:18,719
Speaker 2: But I'm really happy for her because of how she's

883
00:40:18,719 --> 00:40:19,720
Speaker 2: approached this problem.

884
00:40:19,800 --> 00:40:23,320
Speaker 1: And I think we might have some hyperoptimizers out there

885
00:40:23,360 --> 00:40:26,200
Speaker 1: in the listening audience and they might write in and

886
00:40:26,200 --> 00:40:29,120
Speaker 1: please do and say, guys, like, what are you talking about?

887
00:40:29,200 --> 00:40:31,799
Speaker 1: She could pay the minimums and get forgiveness and blah

888
00:40:31,800 --> 00:40:34,560
Speaker 1: blah blah, Like sixteen years from now she's been able

889
00:40:34,600 --> 00:40:37,880
Speaker 1: to accomplish all these other financial goals, And there's some

890
00:40:37,920 --> 00:40:39,960
Speaker 1: truth to that, but sixteen years is also it's a

891
00:40:39,960 --> 00:40:44,279
Speaker 1: really long time. And if you've got the ability to

892
00:40:44,360 --> 00:40:46,520
Speaker 1: kind of get rid of it in short order, that's

893
00:40:46,520 --> 00:40:47,680
Speaker 1: what I would do. Well.

894
00:40:47,719 --> 00:40:50,640
Speaker 2: Speaking of optimizing, we're going to hear from a listener

895
00:40:50,640 --> 00:40:53,400
Speaker 2: who's looking to make the most of his HSA.

896
00:40:53,520 --> 00:41:03,399
Speaker 1: We'll get to that more right after this. All right, Matt,

897
00:41:03,400 --> 00:41:05,400
Speaker 1: we're back. Time to get to the Facebook question of

898
00:41:05,440 --> 00:41:08,319
Speaker 1: a week. This one comes from listener Steven, who says,

899
00:41:08,320 --> 00:41:11,680
Speaker 1: happy Open enrollment season. Yes, it's everyone's favorite time of year.

900
00:41:12,080 --> 00:41:14,720
Speaker 1: He says, more of a general question, can investing inside

901
00:41:14,719 --> 00:41:18,840
Speaker 1: your HSA fully subsidize your medical expenses in long term?

902
00:41:19,200 --> 00:41:21,520
Speaker 1: Like the four percent rule, but for medical expenses. I

903
00:41:21,560 --> 00:41:24,640
Speaker 1: currently have thirty six thousand dollars invested in my HSA

904
00:41:24,920 --> 00:41:27,360
Speaker 1: and plenty to fully contribute and invest in the SMP

905
00:41:27,520 --> 00:41:31,200
Speaker 1: for the next decade, assuming contribution limits don't increase. They're

906
00:41:31,200 --> 00:41:34,279
Speaker 1: currently at eighty five to fifty for a family five

907
00:41:34,600 --> 00:41:38,840
Speaker 1: fifty dollars, and the SMP increases at ten percent annually.

908
00:41:39,280 --> 00:41:41,719
Speaker 1: My back of the napkin math indicates I'll have over

909
00:41:41,760 --> 00:41:44,840
Speaker 1: two hundred thousand dollars by then. At that time, the

910
00:41:44,880 --> 00:41:48,360
Speaker 1: interest from the investments, assuming ten percent growth, will be

911
00:41:48,480 --> 00:41:52,080
Speaker 1: more than enough to withdraw my out of pocket maximum

912
00:41:52,360 --> 00:41:54,440
Speaker 1: and still have plenty left over to grow. This has

913
00:41:54,440 --> 00:41:56,000
Speaker 1: a bit over simplified, so let me know if I'm

914
00:41:56,040 --> 00:41:58,879
Speaker 1: not considering anything, and if this is a good plan. Dude,

915
00:41:58,920 --> 00:42:01,560
Speaker 1: I like it, Steven. I think it's a fun way

916
00:42:01,600 --> 00:42:04,400
Speaker 1: to think about HSA. Yeah. Well, I've thought similarly about

917
00:42:04,480 --> 00:42:07,040
Speaker 1: my Daffy account, my donor advised fund, and I'm sure

918
00:42:07,080 --> 00:42:09,960
Speaker 1: listeners have have. Have they started to hear the voices

919
00:42:10,000 --> 00:42:14,600
Speaker 1: for good challenge and the Daffy no donate to some

920
00:42:14,640 --> 00:42:17,320
Speaker 1: of our favorite nonprofits and help us defeat stacking managamins.

921
00:42:17,320 --> 00:42:20,040
Speaker 2: And basically we've been talking about Daffy and how great

922
00:42:20,040 --> 00:42:22,440
Speaker 2: they are before they're like, you guys want to partner up,

923
00:42:22,760 --> 00:42:26,120
Speaker 2: so full disclosure there. But in a similar way, it's like, oh,

924
00:42:26,160 --> 00:42:28,840
Speaker 2: can I get enough within that donor advised fund where

925
00:42:28,960 --> 00:42:32,799
Speaker 2: essentially your giving is done off of the earnings that

926
00:42:32,840 --> 00:42:37,160
Speaker 2: are being thrown thrown off from that initial investment, and

927
00:42:37,440 --> 00:42:39,279
Speaker 2: that might be able to be the case here right.

928
00:42:39,600 --> 00:42:42,160
Speaker 2: It's fun to see your balance grow, which then allows

929
00:42:42,200 --> 00:42:42,920
Speaker 2: you to give.

930
00:42:42,760 --> 00:42:43,720
Speaker 1: Even more money away.

931
00:42:43,840 --> 00:42:47,000
Speaker 2: But for you your specific question, Stephen, if you are

932
00:42:47,040 --> 00:42:50,239
Speaker 2: paying for healthcare costs out of pocket while while you

933
00:42:50,280 --> 00:42:53,040
Speaker 2: are funding your HSA, I do think this is totally

934
00:42:53,080 --> 00:42:56,160
Speaker 2: possible to hit that metric. I'm not totally sure, like

935
00:42:56,200 --> 00:42:59,040
Speaker 2: I'm not going to count on that ten percent, but

936
00:42:59,080 --> 00:43:00,960
Speaker 2: I think this is really just it's a thought exercise.

937
00:43:00,960 --> 00:43:03,040
Speaker 2: It's a thought exercise, but it's a fun one. The

938
00:43:03,080 --> 00:43:06,680
Speaker 2: exercises are dependent on your the interest rate that you

939
00:43:06,719 --> 00:43:08,480
Speaker 2: are expecting, and there's a big return.

940
00:43:08,560 --> 00:43:09,399
Speaker 1: Yeah you're I'm sorry.

941
00:43:09,400 --> 00:43:11,000
Speaker 2: Your rate of return. There's a big difference between the

942
00:43:11,480 --> 00:43:14,960
Speaker 2: seven or eight percent rate of return and ten. If

943
00:43:15,000 --> 00:43:19,680
Speaker 2: it was ten, I would have retired a few years ago. Yeah, well,

944
00:43:19,920 --> 00:43:23,040
Speaker 2: but I'm not taking a double digits return on my

945
00:43:23,120 --> 00:43:26,360
Speaker 2: money into account when I'm looking ahead to future projections.

946
00:43:26,400 --> 00:43:29,040
Speaker 1: Well, this is I think, though, what's so beautiful about

947
00:43:29,080 --> 00:43:31,319
Speaker 1: the AHSA if you use it properly, And it's why

948
00:43:31,400 --> 00:43:34,120
Speaker 1: we talk about it regularly and why we're so keen

949
00:43:34,600 --> 00:43:37,920
Speaker 1: on people using this account. Well, guess we're operating on

950
00:43:37,960 --> 00:43:40,120
Speaker 1: a lot of assumptions here, but the goal of the

951
00:43:40,120 --> 00:43:42,200
Speaker 1: theory is not to get specific. It's a broad question.

952
00:43:42,320 --> 00:43:46,360
Speaker 1: So there's just so many potential caveats about potentially lower

953
00:43:46,400 --> 00:43:49,400
Speaker 1: returns or higher healthcare costs that you might occur. I

954
00:43:49,400 --> 00:43:52,040
Speaker 1: think it's just important to put a little footnote in

955
00:43:52,080 --> 00:43:55,080
Speaker 1: there about that. Think about those things. But the money

956
00:43:55,120 --> 00:43:57,080
Speaker 1: you stick into your AHSA, if left un touched for

957
00:43:57,120 --> 00:44:00,640
Speaker 1: a decade or two, Yeah, it really could to cover

958
00:44:00,760 --> 00:44:03,200
Speaker 1: all your health care expenses. And you know you'll also

959
00:44:03,239 --> 00:44:06,319
Speaker 1: be able to withdraw that inflated some without paying any

960
00:44:06,360 --> 00:44:08,719
Speaker 1: taxes either with rocks. Yeah, if you're talking about with

961
00:44:08,719 --> 00:44:11,399
Speaker 1: those receipts, Yeah, exactly. Yeah, just document it. We've got

962
00:44:11,640 --> 00:44:13,400
Speaker 1: articles and information up on how to money dot Com

963
00:44:13,400 --> 00:44:16,319
Speaker 1: about how to use that HSA effectively. But unlike your

964
00:44:16,400 --> 00:44:19,719
Speaker 1: traditional four O one K or traditional IRA, where you've

965
00:44:19,719 --> 00:44:22,920
Speaker 1: got to think about paying tax paying Uncle Sam on

966
00:44:22,960 --> 00:44:25,280
Speaker 1: those withdrawals, you don't have to do that with the HSA.

967
00:44:25,400 --> 00:44:28,160
Speaker 1: So like the amount that you have in the account

968
00:44:28,320 --> 00:44:30,239
Speaker 1: is the amount that you have access to in a

969
00:44:30,280 --> 00:44:33,320
Speaker 1: super flexible way. It makes that account even more beautiful

970
00:44:33,400 --> 00:44:35,200
Speaker 1: not having to pay tax ever on that money.

971
00:44:35,320 --> 00:44:38,680
Speaker 2: Heck, yeah, well, and not to mention that even if

972
00:44:38,760 --> 00:44:42,200
Speaker 2: you save quote unquote too much, well, at a certain point,

973
00:44:42,320 --> 00:44:46,040
Speaker 2: the HSA turns into a glorified IRA, specifically at age

974
00:44:46,040 --> 00:44:50,919
Speaker 2: sixty five, if you encounter overfunding that account, which isn't

975
00:44:51,160 --> 00:44:53,600
Speaker 2: a real problem. That's actually something that you don't need

976
00:44:53,640 --> 00:44:56,319
Speaker 2: to concern yourself with. So the flexibility and the tax

977
00:44:56,360 --> 00:45:00,400
Speaker 2: protection that your HSA offers really does make get an

978
00:45:00,440 --> 00:45:03,280
Speaker 2: account to fully fund if you have the additional funds

979
00:45:03,320 --> 00:45:04,840
Speaker 2: on hand to be able to pull that off. I

980
00:45:04,840 --> 00:45:08,080
Speaker 2: think this is a brilliant move. Yeah, so cool way

981
00:45:08,120 --> 00:45:10,080
Speaker 2: to think about it. I think, Steven, it's probably even

982
00:45:10,080 --> 00:45:13,839
Speaker 2: more motivating to invest in that HSA when you're thinking about, hey,

983
00:45:13,880 --> 00:45:16,600
Speaker 2: wait a second, one of these days the earnings are

984
00:45:16,600 --> 00:45:19,400
Speaker 2: gonna throw off everything I need for healthcare expenses, and

985
00:45:19,440 --> 00:45:22,480
Speaker 2: I can just continue to grow that nest egg inside

986
00:45:22,520 --> 00:45:25,640
Speaker 2: of my HSA and avoid tax the whole way through.

987
00:45:25,840 --> 00:45:27,680
Speaker 1: That's pretty cool, thick. Yeah.

988
00:45:27,719 --> 00:45:29,560
Speaker 2: Shall we get back to the beer that you and

989
00:45:29,640 --> 00:45:32,560
Speaker 2: I enjoyed? So you know what I realized. I kept

990
00:45:32,600 --> 00:45:36,000
Speaker 2: looking over at the can while we were talking about money,

991
00:45:36,040 --> 00:45:40,640
Speaker 2: and we both commented commented on the artwork, right, and

992
00:45:40,680 --> 00:45:43,000
Speaker 2: you know, it reminds me of what you know, when

993
00:45:43,040 --> 00:45:45,400
Speaker 2: you were in let's say second or third grade and

994
00:45:45,480 --> 00:45:49,399
Speaker 2: you drew an underwater scene with your crayons and then

995
00:45:49,520 --> 00:45:51,320
Speaker 2: you paint the whole thing with like a dark blue

996
00:45:51,920 --> 00:45:54,719
Speaker 2: and then the water the water color it slicks right

997
00:45:54,760 --> 00:45:57,120
Speaker 2: off of the wax and only sticks to the paper.

998
00:45:57,920 --> 00:46:00,279
Speaker 2: That's what this reminds me of. Yeah, yeah, yeah, I

999
00:46:00,280 --> 00:46:02,160
Speaker 2: can see that all right. I thought you'd be more

1000
00:46:02,160 --> 00:46:02,840
Speaker 2: excited about that.

1001
00:46:03,400 --> 00:46:05,840
Speaker 1: I think it looks cool. I like art on a

1002
00:46:05,880 --> 00:46:09,040
Speaker 1: black background too, like it just yeah, So have we

1003
00:46:09,080 --> 00:46:12,399
Speaker 1: ever talked about the Doctor Seuss artwork that we went

1004
00:46:12,440 --> 00:46:15,160
Speaker 1: and gosh, this is forever ago, key West, right, this

1005
00:46:15,360 --> 00:46:18,480
Speaker 1: was so we hadn't even started the podcast, and we

1006
00:46:18,480 --> 00:46:20,640
Speaker 1: were you and m Kate and I we.

1007
00:46:20,680 --> 00:46:23,640
Speaker 2: Both had our first kids. They were like three months old,

1008
00:46:23,640 --> 00:46:27,160
Speaker 2: and we took a trip down to Key West during

1009
00:46:27,200 --> 00:46:30,120
Speaker 2: things giving break and we went into a gallery that

1010
00:46:30,160 --> 00:46:33,040
Speaker 2: had a bunch of Doctor Seuss, some of his artwork

1011
00:46:33,080 --> 00:46:35,080
Speaker 2: that was not necessarily for kids.

1012
00:46:35,280 --> 00:46:37,680
Speaker 1: Yeah, it was awesome. It was awesome, but it.

1013
00:46:37,640 --> 00:46:42,360
Speaker 2: Was all very moody and all the backgrounds were black,

1014
00:46:42,600 --> 00:46:43,920
Speaker 2: and I thought that was the coolest thing.

1015
00:46:43,960 --> 00:46:46,400
Speaker 1: It was so cool. Yeah, so cool. It's hard to

1016
00:46:46,440 --> 00:46:48,000
Speaker 1: think about that one. What do you think about the

1017
00:46:48,000 --> 00:46:49,560
Speaker 1: liquid inside of the candle so good?

1018
00:46:49,920 --> 00:46:53,640
Speaker 2: The body so it just it poured thick, it drank thick.

1019
00:46:53,640 --> 00:46:55,400
Speaker 2: It had so much flavor, and I think that's one

1020
00:46:55,400 --> 00:46:58,040
Speaker 2: of the things you get with an unfiltered ip A

1021
00:46:58,320 --> 00:46:59,239
Speaker 2: double Was.

1022
00:46:59,160 --> 00:46:59,880
Speaker 1: It double dry?

1023
00:47:00,239 --> 00:47:04,080
Speaker 2: It was like concentrated unfiltered Yeah, double IPA dry. Hops

1024
00:47:04,120 --> 00:47:06,719
Speaker 2: with Citra some other names of.

1025
00:47:06,960 --> 00:47:09,279
Speaker 1: Some hops I don't recognize, but they sound like there

1026
00:47:09,520 --> 00:47:13,919
Speaker 1: was Raca, maybe Zamba. Maybe there are hops from Australia

1027
00:47:14,040 --> 00:47:15,759
Speaker 1: or New Zealand, which maybe we're gonna get more of

1028
00:47:15,760 --> 00:47:18,560
Speaker 1: these things. To me, those for some reason, the Australian

1029
00:47:18,600 --> 00:47:20,720
Speaker 1: and New Zealand hops. When I have those in beers,

1030
00:47:20,760 --> 00:47:23,920
Speaker 1: they're just instilly some of my favorites, and this what

1031
00:47:24,200 --> 00:47:25,680
Speaker 1: I need to look up to see whether those hops

1032
00:47:25,680 --> 00:47:28,200
Speaker 1: were actually grown there. But my goodness, this was a

1033
00:47:28,280 --> 00:47:31,560
Speaker 1: delightful beer. Was so good. The hops were a little funkier,

1034
00:47:31,920 --> 00:47:34,879
Speaker 1: and this was like piercingly juicy. It also just had

1035
00:47:34,920 --> 00:47:38,200
Speaker 1: that sort of note which doesn't happen very often in IPA.

1036
00:47:38,239 --> 00:47:40,520
Speaker 1: It's usually it were like pierces the back of your

1037
00:47:40,560 --> 00:47:41,279
Speaker 1: throat kind of.

1038
00:47:42,000 --> 00:47:44,520
Speaker 2: It was very full flavored, yeah, and not in like

1039
00:47:44,520 --> 00:47:47,759
Speaker 2: the overly harsh, bitter way for me punchy. It had

1040
00:47:47,800 --> 00:47:51,320
Speaker 2: depth like sometimes like a sports drink. It's got salt

1041
00:47:51,560 --> 00:47:53,640
Speaker 2: sodium in it, right, and it makes it wetter or

1042
00:47:53,640 --> 00:47:56,080
Speaker 2: something like. There's something about about that that just like

1043
00:47:56,320 --> 00:47:57,440
Speaker 2: quenches the thirst.

1044
00:47:57,200 --> 00:47:59,440
Speaker 1: A little more. It just feels like it like.

1045
00:47:59,400 --> 00:48:02,080
Speaker 2: It's been formulated to absorb into your tongue or something

1046
00:48:02,160 --> 00:48:02,560
Speaker 2: like that, and I.

1047
00:48:02,560 --> 00:48:03,720
Speaker 1: Feel like that's what it's beautiful.

1048
00:48:04,120 --> 00:48:08,800
Speaker 2: It's actually coming one with Jeremy's changed by Fonta Flora.

1049
00:48:08,840 --> 00:48:10,319
Speaker 2: I highly recommend this beer for sure.

1050
00:48:10,360 --> 00:48:12,839
Speaker 1: It was great. It was very very good. All right,

1051
00:48:12,880 --> 00:48:14,400
Speaker 1: that's going to do it for this episode. You can

1052
00:48:14,440 --> 00:48:17,439
Speaker 1: find show notes up on our website at howtomoney dot com,

1053
00:48:17,480 --> 00:48:19,600
Speaker 1: and if you've got a money question, holler at us.

1054
00:48:19,600 --> 00:48:21,239
Speaker 1: We would love to hear it.

1055
00:48:21,280 --> 00:48:23,040
Speaker 2: That's gonna be it for this one, nobody, So until

1056
00:48:23,080 --> 00:48:25,719
Speaker 1: Next time, best friends Out, Best friends Out,