1 00:00:00,080 --> 00:00:02,759 Speaker 1: Welcome to How the Money. I'm Joel and I'm Matt, 2 00:00:02,800 --> 00:00:25,439 Speaker 1: and today we're discussing when debt makes sense. Yeah, Joel, 3 00:00:25,480 --> 00:00:29,600 Speaker 1: sometimes debt actually does make sense. Hopefully our listeners aren't 4 00:00:29,640 --> 00:00:32,239 Speaker 1: blindsided by the fact that we don't hate debt, at 5 00:00:32,320 --> 00:00:34,720 Speaker 1: least not all debts. Hopefully they don't think we've gone 6 00:00:34,720 --> 00:00:37,120 Speaker 1: off the personal finance deep end here. That debt is 7 00:00:37,200 --> 00:00:39,280 Speaker 1: kind of a necessity of modern life and it's something 8 00:00:39,400 --> 00:00:41,320 Speaker 1: we have to talk about. Like, not all debt is 9 00:00:41,360 --> 00:00:45,160 Speaker 1: created equally, right, It's important to distinguish Some debt is 10 00:00:45,159 --> 00:00:47,400 Speaker 1: is good, some debt is worth taking on. Other debt 11 00:00:47,600 --> 00:00:50,360 Speaker 1: is awful and you shouldn't even consider it. So, yeah, 12 00:00:50,360 --> 00:00:54,600 Speaker 1: we're gonna kind of parse those specifics in this episode, Matt, 13 00:00:54,680 --> 00:00:57,000 Speaker 1: before we get to that. There's a specific debt I 14 00:00:57,040 --> 00:00:59,640 Speaker 1: wanted to talk to you about, all right, So we 15 00:00:59,720 --> 00:01:02,400 Speaker 1: just had our boys right not too long ago. Regular 16 00:01:02,440 --> 00:01:05,119 Speaker 1: listeners to the show will know that we are our 17 00:01:05,319 --> 00:01:08,440 Speaker 1: our dad's We are proud parents. You've got three girls 18 00:01:08,480 --> 00:01:10,200 Speaker 1: and and now boy. And I've got two girls and 19 00:01:10,240 --> 00:01:12,680 Speaker 1: now a boy. And our boys were born born two 20 00:01:12,760 --> 00:01:15,080 Speaker 1: days apart. But the hospital bills are starting to come 21 00:01:15,120 --> 00:01:18,119 Speaker 1: in and so I wanted to talk about how you 22 00:01:18,200 --> 00:01:21,240 Speaker 1: handle hospital bills when you get him in the mail, 23 00:01:21,520 --> 00:01:23,360 Speaker 1: and I think it's important. I don't know if you've 24 00:01:23,400 --> 00:01:25,720 Speaker 1: noticed this, Bunny, we're handling things differently. You're kind of 25 00:01:25,760 --> 00:01:28,600 Speaker 1: more of a cash payer. And I have insurance through 26 00:01:28,760 --> 00:01:31,480 Speaker 1: my job, and there is a humble brag I've got 27 00:01:31,520 --> 00:01:35,520 Speaker 1: actual insurance. Not at all. I promised, I promised. But 28 00:01:35,520 --> 00:01:37,920 Speaker 1: but you're you're on meta share. You've documented that as well, 29 00:01:38,360 --> 00:01:40,720 Speaker 1: which is an awesome thing for people to consider and 30 00:01:40,720 --> 00:01:42,920 Speaker 1: if they want to save money on health insurance, even 31 00:01:42,959 --> 00:01:46,280 Speaker 1: though it's not technically health insurance. But but yeah, I'm 32 00:01:46,280 --> 00:01:50,360 Speaker 1: starting to get the mail from from the hospital with 33 00:01:50,480 --> 00:01:53,800 Speaker 1: the bills inside. And I will say one thing I've 34 00:01:53,840 --> 00:01:56,640 Speaker 1: noticed through the years of receiving medical bills based on 35 00:01:56,720 --> 00:01:58,640 Speaker 1: different you know, things we've had based on three person 36 00:01:58,640 --> 00:02:01,480 Speaker 1: now at this point, is to never pay the bill 37 00:02:02,200 --> 00:02:05,200 Speaker 1: the first time you see it. To always wait for 38 00:02:05,200 --> 00:02:08,400 Speaker 1: that second bill to come in. There are always adjustments made. 39 00:02:08,800 --> 00:02:11,239 Speaker 1: In particular with one of these bills from the hospital 40 00:02:11,320 --> 00:02:13,760 Speaker 1: stay the first bill, it looked like we're gonna have 41 00:02:13,800 --> 00:02:16,839 Speaker 1: to pay fifty just one of the bills for yeah, 42 00:02:16,840 --> 00:02:19,280 Speaker 1: and I was like that's what you had insurance dog, right, 43 00:02:19,320 --> 00:02:21,680 Speaker 1: I know. I was like, that seems crazy, that shouldn't 44 00:02:21,720 --> 00:02:23,600 Speaker 1: be the way it is. And and then I just 45 00:02:23,720 --> 00:02:25,639 Speaker 1: we just waited a month for the next bill to 46 00:02:25,680 --> 00:02:29,639 Speaker 1: come in, and it was drastically four thousand dollars cheaper, basically, 47 00:02:30,080 --> 00:02:32,040 Speaker 1: So you just kind of never know what's going to 48 00:02:32,120 --> 00:02:34,080 Speaker 1: happen and how it's going to get adjusted, and so 49 00:02:34,120 --> 00:02:36,040 Speaker 1: I kind of wait for things to shake out. So 50 00:02:36,240 --> 00:02:38,680 Speaker 1: that's like one tip I have for people who are 51 00:02:38,720 --> 00:02:42,200 Speaker 1: getting medical bills and just don't ever pay the first 52 00:02:42,240 --> 00:02:44,679 Speaker 1: one wait for another one to command. I feel that 53 00:02:44,720 --> 00:02:47,519 Speaker 1: this is maybe one instance in personal finance that it 54 00:02:47,600 --> 00:02:51,000 Speaker 1: kind of pays a little bit to be a procrastinator. Yeah, 55 00:02:51,160 --> 00:02:53,000 Speaker 1: but it's true. There's a lot of confusion when it 56 00:02:53,000 --> 00:02:56,119 Speaker 1: comes to how to navigate the waters of our insurance. 57 00:02:56,160 --> 00:02:58,200 Speaker 1: And you know, like you found that you've had some 58 00:02:58,200 --> 00:03:01,639 Speaker 1: confusion there. I mean with us having meta share, dude, 59 00:03:01,680 --> 00:03:03,440 Speaker 1: we found it's even more confusing because there are a 60 00:03:03,440 --> 00:03:07,079 Speaker 1: fewer healthcare providers who are familiar with meta share um 61 00:03:07,120 --> 00:03:08,720 Speaker 1: And you know, I've written an article on the site, 62 00:03:08,720 --> 00:03:10,480 Speaker 1: will link to that in the show notes, but essentially 63 00:03:10,480 --> 00:03:13,799 Speaker 1: meta share it's very similar to insurance, but it's technically 64 00:03:13,840 --> 00:03:16,799 Speaker 1: not insurance, you know, it's it's not regulated. There are 65 00:03:16,800 --> 00:03:19,160 Speaker 1: different requirements that they have. But at the same time, 66 00:03:19,200 --> 00:03:21,680 Speaker 1: we are also able to save a ton of money. 67 00:03:22,000 --> 00:03:23,480 Speaker 1: But we have found, though, is that there is some 68 00:03:23,520 --> 00:03:25,480 Speaker 1: additional work that we have to do in order to 69 00:03:25,560 --> 00:03:27,920 Speaker 1: make sure things line up the way that they're supposed to, 70 00:03:27,960 --> 00:03:30,520 Speaker 1: that they're actually submitted to the right place. It's not 71 00:03:30,560 --> 00:03:34,120 Speaker 1: as familiar to most healthcare providers as like Humana or 72 00:03:34,200 --> 00:03:37,400 Speaker 1: Blue Cross, Blue Shield right Now or whoever is exactly exactly. 73 00:03:37,720 --> 00:03:40,720 Speaker 1: So you mentioned procrastinating and how maybe that's a little 74 00:03:40,760 --> 00:03:42,720 Speaker 1: bit of a benefit here, But the thing that is 75 00:03:42,760 --> 00:03:45,160 Speaker 1: not a benefit is to is to hide your head 76 00:03:45,200 --> 00:03:46,960 Speaker 1: completely in the sand in regards to the bills that 77 00:03:47,000 --> 00:03:49,320 Speaker 1: are coming in. And that's what some people do. They 78 00:03:49,400 --> 00:03:51,880 Speaker 1: just don't open them. They chuck them, or or they 79 00:03:51,920 --> 00:03:54,240 Speaker 1: open them and they look at them and they cry 80 00:03:54,400 --> 00:03:57,240 Speaker 1: or scream or whatever whatever reaction they have to getting 81 00:03:57,240 --> 00:04:00,560 Speaker 1: a massive bill that you can't afford. It's time to move, Yeah, exactly, 82 00:04:00,760 --> 00:04:02,760 Speaker 1: we we can move to another country. They'll never find 83 00:04:02,800 --> 00:04:05,120 Speaker 1: us something like that. And so one thing I want 84 00:04:05,120 --> 00:04:08,240 Speaker 1: to stress too is that a lot of hospitals have 85 00:04:08,400 --> 00:04:11,080 Speaker 1: something called a patient advocate, and that can be a 86 00:04:11,120 --> 00:04:14,680 Speaker 1: great place to turn. Look on your hospital systems website, 87 00:04:14,920 --> 00:04:17,440 Speaker 1: call the customer service number and ask if they have 88 00:04:17,560 --> 00:04:21,080 Speaker 1: someone who is a patient advocate, and that patient advocate 89 00:04:21,120 --> 00:04:24,960 Speaker 1: can walk through potential debt for giveness options or at 90 00:04:25,000 --> 00:04:27,600 Speaker 1: least for giving a big chunk of the debt or 91 00:04:27,680 --> 00:04:30,760 Speaker 1: a payment plan that is gonna potentially suit your income 92 00:04:30,800 --> 00:04:33,680 Speaker 1: and your needs. And there are for these nonprofit hospitals, 93 00:04:33,720 --> 00:04:35,760 Speaker 1: there are oftentimes lots of ways that you can have 94 00:04:36,279 --> 00:04:39,400 Speaker 1: a portion or or maybe even all of your medical 95 00:04:39,440 --> 00:04:41,520 Speaker 1: debt forgiven. But if you if you put your head 96 00:04:41,560 --> 00:04:43,960 Speaker 1: in the sand, it's gonna go to collections. You're never 97 00:04:44,000 --> 00:04:46,760 Speaker 1: going to have this option again if you don't tackle 98 00:04:46,800 --> 00:04:49,680 Speaker 1: it within the first ninety days, because if you don't 99 00:04:49,680 --> 00:04:52,560 Speaker 1: turn to the hospital to for help, they're gonna kick 100 00:04:52,600 --> 00:04:55,279 Speaker 1: it to collections. And that's when you're in big trouble. Yeah, 101 00:04:55,360 --> 00:04:57,680 Speaker 1: and when we say procrastinate, definitely don't wait longer than 102 00:04:57,760 --> 00:05:00,000 Speaker 1: ninety days, right, like, maybe wait thirty days, forty five 103 00:05:00,000 --> 00:05:02,599 Speaker 1: of days, maybe for the second time that bill shows up, right, 104 00:05:02,680 --> 00:05:04,080 Speaker 1: But yeah, you definitely don't want to put your head 105 00:05:04,080 --> 00:05:06,200 Speaker 1: in the sand. And you know you mentioned the patient advocate. 106 00:05:06,240 --> 00:05:08,279 Speaker 1: I think that's important as well. For you know, you 107 00:05:08,320 --> 00:05:10,239 Speaker 1: kind of were teasing about me being a cash payer 108 00:05:10,440 --> 00:05:12,520 Speaker 1: because a lot of what we are is paying cash 109 00:05:12,560 --> 00:05:15,160 Speaker 1: because we're at such a high deductible. Yeah, that wasn't 110 00:05:15,200 --> 00:05:16,599 Speaker 1: a tease. That's just like kind of what it is 111 00:05:16,640 --> 00:05:20,440 Speaker 1: the reality. But for folks who don't have health insurance, man, 112 00:05:20,480 --> 00:05:22,640 Speaker 1: make sure you talk to that patient advocate ahead of time. 113 00:05:22,680 --> 00:05:25,240 Speaker 1: If you can talk with them in advance of the procedure, 114 00:05:25,640 --> 00:05:28,440 Speaker 1: they will totally work with you find ways to you know, 115 00:05:28,440 --> 00:05:30,760 Speaker 1: split those payments up or even cut you that cash 116 00:05:30,800 --> 00:05:33,160 Speaker 1: deal on the front end. So so yeah, keep that 117 00:05:33,200 --> 00:05:35,400 Speaker 1: in mind. And that's definitely the you know, complete opposite 118 00:05:35,400 --> 00:05:37,080 Speaker 1: of sticking your head in the sand. That's you being 119 00:05:37,120 --> 00:05:40,240 Speaker 1: proactive and making sure you've got things lined up. Healthcare 120 00:05:40,400 --> 00:05:44,080 Speaker 1: so easy to understand. It's the best now. It truly 121 00:05:44,120 --> 00:05:46,240 Speaker 1: is terrible. I wish it was it was an easier system. 122 00:05:46,680 --> 00:05:48,760 Speaker 1: I wish, For instance, Matt, I was getting a quote 123 00:05:48,800 --> 00:05:51,640 Speaker 1: on a procedure the other day, Uh, A procedure that 124 00:05:51,920 --> 00:05:54,640 Speaker 1: means that I will have no more children. I don't 125 00:05:54,640 --> 00:05:56,360 Speaker 1: know if that's t m I For everyone out there, 126 00:05:56,600 --> 00:06:00,920 Speaker 1: but this you're getting castrated. Uh some, that's totally similar 127 00:06:01,200 --> 00:06:05,720 Speaker 1: lesson basi, Yeah exactly. But basically the thing that shocked 128 00:06:05,760 --> 00:06:08,120 Speaker 1: me was the amount that I have to pay after 129 00:06:08,440 --> 00:06:10,920 Speaker 1: submitting the claim through insurance is more than what I 130 00:06:10,920 --> 00:06:13,760 Speaker 1: would pay as a cash payer. So sometimes that's an 131 00:06:13,800 --> 00:06:17,480 Speaker 1: interesting dynamic, too involved in the whole process. It frustrates 132 00:06:17,520 --> 00:06:20,400 Speaker 1: me to a great deal that that's the case. I 133 00:06:20,440 --> 00:06:22,480 Speaker 1: don't think that's how it should be. That's the case 134 00:06:23,120 --> 00:06:26,400 Speaker 1: for getting up prescription oftentimes, which is a real pain. 135 00:06:26,760 --> 00:06:29,480 Speaker 1: And the only way to combat that is to check 136 00:06:29,560 --> 00:06:32,680 Speaker 1: and see if paying cash with an app, specifically like 137 00:06:32,680 --> 00:06:34,800 Speaker 1: good r x, which is an awesome app for for 138 00:06:34,839 --> 00:06:37,960 Speaker 1: shopping prescriptions. You know what, I found so many times 139 00:06:38,000 --> 00:06:40,240 Speaker 1: that offering to pay cash and not going through my 140 00:06:40,279 --> 00:06:42,720 Speaker 1: insurance is better when I'm getting up prescription. Well, it 141 00:06:42,760 --> 00:06:45,440 Speaker 1: can be the same for medical procedure. And that's why 142 00:06:45,600 --> 00:06:48,200 Speaker 1: insurance and that whole health insurance game can be a 143 00:06:48,200 --> 00:06:52,040 Speaker 1: little bit shady. All right, Joel, my unique friend, introduce 144 00:06:52,080 --> 00:06:55,200 Speaker 1: our beer for this episode. Alright, we're drinking one from 145 00:06:55,240 --> 00:06:58,159 Speaker 1: our friends, the Yeast Atlanta Brewers, and this one is 146 00:06:58,160 --> 00:07:01,200 Speaker 1: a check pilsner. So week thanks to our friend John 147 00:07:01,240 --> 00:07:04,240 Speaker 1: Francis for for tossing this one our way. We're really 148 00:07:04,240 --> 00:07:06,760 Speaker 1: excited to have this one on the show. Yeah, thanks John. 149 00:07:06,880 --> 00:07:09,680 Speaker 1: All right, let's get into the topic at hand. Today. 150 00:07:09,720 --> 00:07:12,720 Speaker 1: We're talking about when debt makes sense, which is so weird. 151 00:07:12,840 --> 00:07:14,760 Speaker 1: It doesn't sound like something the guys from How the 152 00:07:14,800 --> 00:07:17,160 Speaker 1: Money should be talking about, and being debt free sounds 153 00:07:17,240 --> 00:07:19,960 Speaker 1: nice in theory, but who can actually live a debt 154 00:07:20,000 --> 00:07:22,400 Speaker 1: free existence. Most of us decided to take on debt 155 00:07:22,440 --> 00:07:24,840 Speaker 1: at certain points in our lives to achieve goals that 156 00:07:24,880 --> 00:07:27,280 Speaker 1: we have. Debt can allow us to accelerate our goals 157 00:07:27,320 --> 00:07:29,920 Speaker 1: and see them come to fruition far sooner than the 158 00:07:30,000 --> 00:07:32,200 Speaker 1: otherwise would have. If you really want to own a 159 00:07:32,240 --> 00:07:34,840 Speaker 1: home or get an advanced degree, well it's really hard 160 00:07:34,880 --> 00:07:38,920 Speaker 1: to save for either of those in full right beforehand, Yeah, Juel, 161 00:07:38,960 --> 00:07:41,520 Speaker 1: that's rights and debt, right. Everyone knows what debt is, 162 00:07:41,520 --> 00:07:43,720 Speaker 1: but I think it's helpful to to look at debts 163 00:07:43,720 --> 00:07:47,000 Speaker 1: in the context of time. Specifically, When you do that, 164 00:07:47,040 --> 00:07:48,640 Speaker 1: you can see that debt is basically the act of 165 00:07:48,680 --> 00:07:51,800 Speaker 1: exchanging something in the future in order to secure it now. 166 00:07:52,280 --> 00:07:55,280 Speaker 1: But obviously you're gonna pay a cost there's a price 167 00:07:55,280 --> 00:07:59,120 Speaker 1: to pay that interest rate associated with your loan. Well, 168 00:07:59,200 --> 00:08:01,360 Speaker 1: that is literally the price that you have to pay 169 00:08:01,400 --> 00:08:03,600 Speaker 1: if you're not able to or maybe you're not willing 170 00:08:03,640 --> 00:08:07,160 Speaker 1: to save up and pay in cash. And as we'll discuss, 171 00:08:07,240 --> 00:08:09,680 Speaker 1: you know, the interest rate you can secure that has 172 00:08:09,680 --> 00:08:11,800 Speaker 1: an impact on the amount of debt that you'll want 173 00:08:11,840 --> 00:08:14,080 Speaker 1: to consider taking out as well. I don't know why, 174 00:08:14,080 --> 00:08:16,560 Speaker 1: but everything every time I think about debt, I think 175 00:08:16,560 --> 00:08:19,720 Speaker 1: about the story of Rumble steel skin and like putting 176 00:08:19,800 --> 00:08:22,920 Speaker 1: up your firstborn child in exchange for the spending that 177 00:08:23,120 --> 00:08:25,760 Speaker 1: straw into gold. Yeah, that's a terrible wager, but that's 178 00:08:25,840 --> 00:08:28,720 Speaker 1: kind of how debt can be, right, Like, you're usually 179 00:08:28,800 --> 00:08:32,640 Speaker 1: sacrificing something good in the future, you know, those payments 180 00:08:32,640 --> 00:08:34,400 Speaker 1: that you'll make over a long period of time for 181 00:08:34,520 --> 00:08:36,440 Speaker 1: something that you can get right now. Yeah, your baby. 182 00:08:36,480 --> 00:08:39,679 Speaker 1: It's like the ultimate payday loan. That's the worst payment 183 00:08:39,720 --> 00:08:42,560 Speaker 1: if that existed. That's totally against the law, right why 184 00:08:42,600 --> 00:08:46,080 Speaker 1: it's a fable. So before we launch into the different 185 00:08:46,120 --> 00:08:48,320 Speaker 1: reasons when debt might make sense for you, well, let's 186 00:08:48,320 --> 00:08:50,600 Speaker 1: talk quickly, Matt about some of the things we would 187 00:08:50,640 --> 00:08:53,559 Speaker 1: recommend you avoiding taking debt out on. Yeah, man, let's 188 00:08:53,600 --> 00:08:55,560 Speaker 1: kick it off with car loans, right, Like you often 189 00:08:55,600 --> 00:08:59,320 Speaker 1: hear folks mention their car payment. It's so commonplace these days, 190 00:08:59,360 --> 00:09:01,760 Speaker 1: like you might actually expected that it's normal to have 191 00:09:02,040 --> 00:09:04,040 Speaker 1: and maybe even a good idea to sign up for 192 00:09:04,160 --> 00:09:07,280 Speaker 1: a car loan. I'm paying for the reliability and the safety. 193 00:09:07,440 --> 00:09:09,120 Speaker 1: Do you hear that? Right? And that seems like a 194 00:09:09,160 --> 00:09:12,800 Speaker 1: noble mantra maybe to get behind. But don't convince yourself 195 00:09:12,800 --> 00:09:16,040 Speaker 1: that car debt is okay. Financially speaking, You're almost always 196 00:09:16,040 --> 00:09:18,960 Speaker 1: going to be in a losing situation when you finance 197 00:09:19,040 --> 00:09:23,160 Speaker 1: a depreciating asset. Paying more today for something that will 198 00:09:23,200 --> 00:09:26,559 Speaker 1: be worth less tomorrow is something you want to always 199 00:09:26,600 --> 00:09:30,000 Speaker 1: try and avoid. Yeah, man, I've broken this rule just once, 200 00:09:30,480 --> 00:09:32,760 Speaker 1: and that was the Nissan Leaf that I bought and 201 00:09:32,800 --> 00:09:34,439 Speaker 1: I still owned. And it was because I had a 202 00:09:34,520 --> 00:09:37,320 Speaker 1: zero percent loan option when I purchased the vehicle. But 203 00:09:37,400 --> 00:09:39,280 Speaker 1: I also did have the cash to pay for the 204 00:09:39,280 --> 00:09:43,120 Speaker 1: car in full, and so really that debt actually seemed 205 00:09:43,240 --> 00:09:47,000 Speaker 1: like not a big deal because I had enough cash 206 00:09:47,280 --> 00:09:50,079 Speaker 1: reserve to pay for the car outright. I wasn't financing 207 00:09:50,080 --> 00:09:52,839 Speaker 1: something that I couldn't actually afford. But really typically, I 208 00:09:52,880 --> 00:09:56,040 Speaker 1: would say for most people, if you're looking to finance 209 00:09:56,080 --> 00:09:58,480 Speaker 1: a car, well, the better option is to buy a 210 00:09:58,559 --> 00:10:02,120 Speaker 1: cheaper car. And most expensive car I'd ever purchased before 211 00:10:02,120 --> 00:10:04,800 Speaker 1: I bought my Niece on Leaf was at Niecean Ultima 212 00:10:04,840 --> 00:10:07,440 Speaker 1: that lasted me seven years. So it's not like you 213 00:10:07,480 --> 00:10:10,439 Speaker 1: can't find an affordable ride that actually will get the 214 00:10:10,480 --> 00:10:12,760 Speaker 1: job done for you over a long period of time. 215 00:10:12,960 --> 00:10:15,720 Speaker 1: It's just that we think we can't, and so we 216 00:10:16,000 --> 00:10:18,760 Speaker 1: just take the easier path, which it seems easier, but 217 00:10:18,840 --> 00:10:21,280 Speaker 1: ultimately we're sacrificing a lot in the future by taking 218 00:10:21,280 --> 00:10:23,880 Speaker 1: on debt for a nicer car. So debt, even with 219 00:10:23,920 --> 00:10:26,439 Speaker 1: a fairly low interest rate, it's not a great idea 220 00:10:26,480 --> 00:10:30,200 Speaker 1: on a rapidly depreciating asset. And if you do take 221 00:10:30,240 --> 00:10:32,880 Speaker 1: out debt on a car, the rule that we would 222 00:10:33,000 --> 00:10:35,839 Speaker 1: say you should never break is to never take out 223 00:10:35,840 --> 00:10:38,040 Speaker 1: a loan longer than four years. Man, so many people 224 00:10:38,120 --> 00:10:40,720 Speaker 1: Matt get into trouble when they finance a car and 225 00:10:40,760 --> 00:10:43,080 Speaker 1: they finance it for six or seven years. I mean, 226 00:10:43,080 --> 00:10:45,680 Speaker 1: the link on a typical car loan has been lengthening 227 00:10:46,000 --> 00:10:48,360 Speaker 1: over time. Folks want to get those payments down. Yeah, 228 00:10:48,400 --> 00:10:50,160 Speaker 1: if they want the payment down, and so they're willing 229 00:10:50,160 --> 00:10:51,720 Speaker 1: to take out a seven year loan to do it, 230 00:10:51,840 --> 00:10:53,720 Speaker 1: and then they end up upside down for a long 231 00:10:53,800 --> 00:10:56,000 Speaker 1: period of time. And if something goes wrong with their 232 00:10:56,000 --> 00:10:58,160 Speaker 1: car or they decide they want a new one, well 233 00:10:58,240 --> 00:11:00,320 Speaker 1: they're in a really bad situation when a comes to 234 00:11:00,320 --> 00:11:03,160 Speaker 1: getting another car. So true, man, another debt we want 235 00:11:03,200 --> 00:11:06,760 Speaker 1: you to avoid taking on as any credit card debt. Basically, 236 00:11:07,080 --> 00:11:10,520 Speaker 1: credit card debt usually stems from poor spending habits, and 237 00:11:10,600 --> 00:11:13,280 Speaker 1: that's why you often hear credit cards painted in such 238 00:11:13,320 --> 00:11:16,439 Speaker 1: a terrible light. It's not that the cards themselves are bad, 239 00:11:16,800 --> 00:11:19,320 Speaker 1: but it's the credit card debt that is so terrible. 240 00:11:19,520 --> 00:11:22,920 Speaker 1: We talked about this in episode with Brad Barrett. That's 241 00:11:22,920 --> 00:11:25,440 Speaker 1: where we discussed how credit cards are just a tool 242 00:11:25,720 --> 00:11:28,360 Speaker 1: that we can gain a ton of benefit from if 243 00:11:28,440 --> 00:11:30,760 Speaker 1: we use them properly. Yeah, Brad talked a lot about 244 00:11:30,920 --> 00:11:33,839 Speaker 1: travel rewards and sign up bonuses, and you know, we've 245 00:11:33,880 --> 00:11:36,160 Speaker 1: got an article up on our site about some of 246 00:11:36,160 --> 00:11:39,080 Speaker 1: our favorite credit cards, and yeah, credit cards can be 247 00:11:39,760 --> 00:11:42,800 Speaker 1: really awesome. They can provide a lot of rewards for 248 00:11:43,000 --> 00:11:45,840 Speaker 1: people that use them well, for people that sign up 249 00:11:45,880 --> 00:11:47,800 Speaker 1: for the right cards for their type of spending. But 250 00:11:48,080 --> 00:11:51,319 Speaker 1: the problem is when you use a credit card and 251 00:11:51,480 --> 00:11:53,400 Speaker 1: you can't pay it off in full every month, and 252 00:11:53,440 --> 00:11:55,959 Speaker 1: that's when it becomes just a truly terrible cycle. The 253 00:11:56,320 --> 00:11:59,199 Speaker 1: reason that they're so popular is due to how convenient 254 00:11:59,400 --> 00:12:01,720 Speaker 1: they are to throw expenses on. And if you've got 255 00:12:01,720 --> 00:12:03,839 Speaker 1: a credit card with a twenty two or twenty four 256 00:12:03,880 --> 00:12:07,960 Speaker 1: or seven interest rate, well, these cards they become debt vehicles. 257 00:12:08,240 --> 00:12:10,160 Speaker 1: And it's what's often spent and put on the credit 258 00:12:10,160 --> 00:12:12,080 Speaker 1: cards that we have a big issue with. Two. It's 259 00:12:12,120 --> 00:12:15,120 Speaker 1: so spur the moment consumption purchases. Credit cards make it 260 00:12:15,160 --> 00:12:18,120 Speaker 1: easy to spend without thinking. But you want to spend 261 00:12:18,120 --> 00:12:20,319 Speaker 1: with a plan, and if you can't do that well 262 00:12:20,360 --> 00:12:22,440 Speaker 1: with a credit card, well then you're gonna find yourself 263 00:12:22,440 --> 00:12:26,160 Speaker 1: in some serious having some serious issues, Enjoel. The worst, 264 00:12:26,440 --> 00:12:28,920 Speaker 1: absolute worst kind of debt are going to be paid 265 00:12:28,920 --> 00:12:32,280 Speaker 1: a loans card, title loans, and those are the worst. 266 00:12:32,880 --> 00:12:35,040 Speaker 1: You're gonna want to avoid these at all costs, as 267 00:12:35,040 --> 00:12:37,959 Speaker 1: they can have a range of anywhere from four hundred 268 00:12:39,120 --> 00:12:41,280 Speaker 1: a p r when you kind of attack in all 269 00:12:41,280 --> 00:12:43,840 Speaker 1: the different fees, and that's just ridiculous, man. You know, 270 00:12:43,880 --> 00:12:45,760 Speaker 1: if we thought that the credit cards made it convenient 271 00:12:45,840 --> 00:12:49,280 Speaker 1: to pay high levels of interest petty loans, title loans. 272 00:12:49,360 --> 00:12:51,760 Speaker 1: You know, they easily have them beat. And a big 273 00:12:51,760 --> 00:12:54,000 Speaker 1: reason for that too is that they are you know, 274 00:12:54,040 --> 00:12:56,240 Speaker 1: they're there in person. And so like you apply for 275 00:12:56,240 --> 00:12:58,040 Speaker 1: a credit card and guess what, it takes time for 276 00:12:58,120 --> 00:13:00,280 Speaker 1: that card to get to you before you can start 277 00:13:00,400 --> 00:13:03,040 Speaker 1: misbehaving with your money, right, But with like with a 278 00:13:03,040 --> 00:13:05,480 Speaker 1: paid a loan or a car title loan, like it's 279 00:13:05,559 --> 00:13:07,280 Speaker 1: right there in person, And so if you are in 280 00:13:07,320 --> 00:13:10,160 Speaker 1: a pinch, folks are gonna feel tempted to walk through 281 00:13:10,200 --> 00:13:11,800 Speaker 1: those doors and see what kind of loan that they 282 00:13:11,800 --> 00:13:13,640 Speaker 1: can get, and in the end they might go with 283 00:13:13,760 --> 00:13:16,640 Speaker 1: something that is going to really drag them down financially. 284 00:13:16,800 --> 00:13:19,680 Speaker 1: Once you open your eyes to see how many paid 285 00:13:19,720 --> 00:13:23,120 Speaker 1: a loan or title lending places there are around you, 286 00:13:23,520 --> 00:13:25,720 Speaker 1: it'll start to overwhelm you at how many there actually are. 287 00:13:26,400 --> 00:13:28,240 Speaker 1: Just driving up a couple of our main throw for 288 00:13:28,280 --> 00:13:30,400 Speaker 1: your fairs, Matt here in our part of town where 289 00:13:30,400 --> 00:13:33,440 Speaker 1: we live, I'm amazed at how many paid a loan 290 00:13:33,480 --> 00:13:36,520 Speaker 1: shops there are. There's one within every square mile, if 291 00:13:36,559 --> 00:13:39,600 Speaker 1: not multiples. And there's some towns where there's like three 292 00:13:39,679 --> 00:13:42,120 Speaker 1: on one street corner that and it just bums me 293 00:13:42,120 --> 00:13:44,679 Speaker 1: out to see that's a sign of the fact that 294 00:13:44,760 --> 00:13:46,960 Speaker 1: a lot of people that live in that area are 295 00:13:47,000 --> 00:13:49,200 Speaker 1: are certainly hitting them up. They're taking advantage. And the 296 00:13:49,200 --> 00:13:52,319 Speaker 1: commercials that you see for these companies, they make it 297 00:13:52,360 --> 00:13:54,680 Speaker 1: sound like it's super simple and it's a short term loan. 298 00:13:54,920 --> 00:13:57,240 Speaker 1: But the problem is the vicious cycle that people get into, 299 00:13:57,600 --> 00:13:59,840 Speaker 1: in particular with with these paid a loans, with these 300 00:14:00,080 --> 00:14:02,600 Speaker 1: the loans and inability to pay it back that quickly, 301 00:14:02,600 --> 00:14:04,240 Speaker 1: because if you need that quick cash, how in the 302 00:14:04,240 --> 00:14:05,559 Speaker 1: world are you gonna be able to pay that back 303 00:14:05,559 --> 00:14:07,600 Speaker 1: in a week or two? And so oftentimes people get 304 00:14:07,640 --> 00:14:09,560 Speaker 1: stuck in a rut and it's the worst place they 305 00:14:09,559 --> 00:14:11,000 Speaker 1: can go. That's like the worst kind of debt that 306 00:14:11,040 --> 00:14:13,600 Speaker 1: you can take on. Yeah, dude, it truly is pretty terrible. 307 00:14:13,720 --> 00:14:16,360 Speaker 1: And let's talk as well about consumption because at the 308 00:14:16,400 --> 00:14:18,480 Speaker 1: core of all these different types of debt that don't 309 00:14:18,480 --> 00:14:20,880 Speaker 1: make sense for you is the fact that they are 310 00:14:20,960 --> 00:14:24,120 Speaker 1: all consumption based. They might pad your lifestyle in the 311 00:14:24,200 --> 00:14:27,160 Speaker 1: short term a little bit, but they drastically hurt your 312 00:14:27,160 --> 00:14:30,320 Speaker 1: ability to grow your wealth in the long term. You're 313 00:14:30,400 --> 00:14:33,960 Speaker 1: essentially sticking your future self with today's tab. It's essentially 314 00:14:34,000 --> 00:14:36,920 Speaker 1: a punishment for your future self, right that it is 315 00:14:36,960 --> 00:14:40,120 Speaker 1: only focused on the here and now. If if consumption 316 00:14:40,200 --> 00:14:42,160 Speaker 1: had like a motto or like a slogan, it would 317 00:14:42,160 --> 00:14:47,680 Speaker 1: be yellow. Yeah, exactly. You know. Actually, in episode one eight, 318 00:14:47,880 --> 00:14:50,320 Speaker 1: when we brought j. D Roth on from Get Rich Slowly, 319 00:14:50,680 --> 00:14:53,360 Speaker 1: he has this article about the stages to financial freedom, 320 00:14:53,640 --> 00:14:55,720 Speaker 1: and he actually mentioned that that first stage, where you 321 00:14:55,760 --> 00:14:58,840 Speaker 1: are in debt. He said, it's essentially like you're a slave. 322 00:14:59,080 --> 00:15:02,200 Speaker 1: When you don't have any assets whatsoever to speak of, 323 00:15:02,440 --> 00:15:05,120 Speaker 1: and you're in debt and you owe people money, whether 324 00:15:05,200 --> 00:15:09,040 Speaker 1: it's owing your girlfriend and your significant other, your your parents, 325 00:15:09,320 --> 00:15:11,840 Speaker 1: or the credit card company. You've essentially become a slave 326 00:15:11,920 --> 00:15:14,560 Speaker 1: to the decisions that you've made. And the only way 327 00:15:14,640 --> 00:15:16,960 Speaker 1: to get out of that is to take action and 328 00:15:17,040 --> 00:15:19,160 Speaker 1: to get rid of that debt as quickly as possible 329 00:15:19,400 --> 00:15:22,720 Speaker 1: so that you're not under any sort of enslavement anymore. Yeah, 330 00:15:22,760 --> 00:15:24,680 Speaker 1: and I agree, Matt. Consumption is at the heart of 331 00:15:24,720 --> 00:15:27,960 Speaker 1: that for most people. That's how we typically get into that. 332 00:15:28,000 --> 00:15:29,920 Speaker 1: We we see something Chinese, we see something that we like, 333 00:15:30,160 --> 00:15:32,480 Speaker 1: we see something even that we think that we need 334 00:15:32,840 --> 00:15:35,640 Speaker 1: we buy it, and then it leads to heartache as 335 00:15:35,640 --> 00:15:38,080 Speaker 1: we're enslaved the payments for it over a long period 336 00:15:38,120 --> 00:15:40,440 Speaker 1: of time. But the title of this episode is when 337 00:15:40,480 --> 00:15:43,800 Speaker 1: debt makes sense. And we've covered the really terrible things 338 00:15:44,040 --> 00:15:46,600 Speaker 1: that debt can do when it does not make sense, Yeah, 339 00:15:46,720 --> 00:15:48,400 Speaker 1: when it invades your life. But we have to talk 340 00:15:48,400 --> 00:15:50,800 Speaker 1: about when debt does typically make sense, our folks, and 341 00:15:50,840 --> 00:16:02,160 Speaker 1: we'll get to that right after the break. Alright, Joe, 342 00:16:02,240 --> 00:16:04,360 Speaker 1: we are back from the break. We've talked about when 343 00:16:04,360 --> 00:16:07,200 Speaker 1: not to debt. Now we're gonna talk about when to debt. 344 00:16:08,120 --> 00:16:10,120 Speaker 1: Let's talk about when debt might make sense for you. 345 00:16:10,240 --> 00:16:13,480 Speaker 1: But here's the thing. Just because something might fall into 346 00:16:13,520 --> 00:16:15,880 Speaker 1: the smart debt category that we're gonna talk about here, 347 00:16:16,120 --> 00:16:18,480 Speaker 1: you don't want to go hog wild. Right. We'll talk 348 00:16:18,560 --> 00:16:20,920 Speaker 1: more about some special considerations that you want to keep 349 00:16:20,960 --> 00:16:24,040 Speaker 1: in mind, but for now, here are some instances when 350 00:16:24,080 --> 00:16:26,720 Speaker 1: debt can make sense. Well, it's just like beer, Matt. 351 00:16:26,760 --> 00:16:29,200 Speaker 1: Good debt is like a good beer, And you know what, 352 00:16:29,240 --> 00:16:30,840 Speaker 1: you put a good beer in front of me, it 353 00:16:30,880 --> 00:16:32,600 Speaker 1: doesn't mean I want six of them, right, And so 354 00:16:32,680 --> 00:16:35,000 Speaker 1: even good debts, it doesn't mean you want to get 355 00:16:35,000 --> 00:16:38,200 Speaker 1: crazy and go overboard. There's a nice, healthy limit. I 356 00:16:38,240 --> 00:16:40,200 Speaker 1: think even with good debt, we need to make analogies 357 00:16:40,240 --> 00:16:42,960 Speaker 1: to beers more often. Why have we not done that? Actually? Alright, 358 00:16:42,960 --> 00:16:45,960 Speaker 1: a new rule for the podcast every episode, have the 359 00:16:46,000 --> 00:16:48,800 Speaker 1: beer analogy. Yes, yes, we'll make it happen. It's like 360 00:16:48,840 --> 00:16:50,840 Speaker 1: the SuDS, it's like the foam. I don't know, there's 361 00:16:50,840 --> 00:16:52,760 Speaker 1: a lot of the aroma of the beer that you appreciate. 362 00:16:52,880 --> 00:16:56,440 Speaker 1: That's the secondary benefits. All right, So let's talk about 363 00:16:56,480 --> 00:16:59,560 Speaker 1: some of those times where debt might make sense for you. Well, 364 00:16:59,680 --> 00:17:02,400 Speaker 1: getting in education is is one that's often touted and 365 00:17:02,680 --> 00:17:05,000 Speaker 1: one that Matt and I agree with. We covered this 366 00:17:05,119 --> 00:17:07,160 Speaker 1: just the other week on the show. We talked about 367 00:17:07,440 --> 00:17:09,840 Speaker 1: when college is worth it? Like, we asked the question 368 00:17:09,920 --> 00:17:12,119 Speaker 1: is college worth it? And we came down on the 369 00:17:12,119 --> 00:17:14,639 Speaker 1: fact that lots of times, for lots of people, it 370 00:17:14,920 --> 00:17:17,520 Speaker 1: is a smart move, and a college education can be 371 00:17:17,600 --> 00:17:20,040 Speaker 1: worth it even with debt if you take out a 372 00:17:20,080 --> 00:17:23,159 Speaker 1: smart amount. Don't overdo it. But an education is a 373 00:17:23,200 --> 00:17:26,280 Speaker 1: solid reason to accrue debt in your life. And that's 374 00:17:26,359 --> 00:17:30,160 Speaker 1: especially because most people going into debt for a college education, well, 375 00:17:30,280 --> 00:17:32,640 Speaker 1: they're youngsters. They're seventeen or eighteen. They don't have any 376 00:17:32,680 --> 00:17:35,880 Speaker 1: assets to their name in almost all circumstances, so how 377 00:17:35,960 --> 00:17:39,120 Speaker 1: how are they going to pay for college? It's it's 378 00:17:39,240 --> 00:17:42,120 Speaker 1: just basically an impossibility to pay for college on your 379 00:17:42,119 --> 00:17:45,680 Speaker 1: own as a youngster in almost all circumstances, and education 380 00:17:45,760 --> 00:17:47,720 Speaker 1: is actually getting you somewhere, it's moving you in in 381 00:17:47,760 --> 00:17:50,119 Speaker 1: the right direction. A good rule of thumb, though, so 382 00:17:50,160 --> 00:17:52,399 Speaker 1: as to not take out too much debt on a 383 00:17:52,480 --> 00:17:55,520 Speaker 1: college education, is to not take out more than you'd 384 00:17:55,520 --> 00:17:58,719 Speaker 1: earn your first year after graduating from school, in your 385 00:17:58,760 --> 00:18:01,640 Speaker 1: first job, your first year salary, don't take out more 386 00:18:01,640 --> 00:18:03,439 Speaker 1: money in debt than you're actually going to make in 387 00:18:03,440 --> 00:18:06,120 Speaker 1: that first year of working. And something else too. I'm 388 00:18:06,119 --> 00:18:09,760 Speaker 1: thinking about different school like quote unquote school expenses. Make 389 00:18:09,800 --> 00:18:12,520 Speaker 1: sure that you're not using your student loan money to, say, 390 00:18:12,600 --> 00:18:14,800 Speaker 1: buy that new car because you think, oh, I need 391 00:18:14,880 --> 00:18:18,040 Speaker 1: reliable transportation to get to class, or even like going 392 00:18:18,080 --> 00:18:19,760 Speaker 1: on spring break right like, just because it's on the 393 00:18:19,800 --> 00:18:22,160 Speaker 1: school calendar like that, that doesn't make it a school event, 394 00:18:22,720 --> 00:18:25,240 Speaker 1: right I think you know, if you were to do that, 395 00:18:25,440 --> 00:18:28,360 Speaker 1: if you were to spend money on things not actually 396 00:18:28,560 --> 00:18:31,600 Speaker 1: going towards your education, you're only fooling yourself. So just 397 00:18:31,680 --> 00:18:34,520 Speaker 1: make sure you're using your actual student loans for education. 398 00:18:34,840 --> 00:18:38,160 Speaker 1: So education. Another area where we think that debt can 399 00:18:38,200 --> 00:18:40,320 Speaker 1: make sense is if you're going to start a business. 400 00:18:40,359 --> 00:18:44,280 Speaker 1: Just like getting an education is investing in yourself, starting 401 00:18:44,280 --> 00:18:47,640 Speaker 1: a business might be akin to investing in your future income. Right. 402 00:18:48,000 --> 00:18:50,240 Speaker 1: The business is a great way to create your own 403 00:18:50,280 --> 00:18:53,639 Speaker 1: employment and invest in your future. You might need to 404 00:18:53,680 --> 00:18:55,600 Speaker 1: rent a physical space, you might need a higher help 405 00:18:55,880 --> 00:19:00,200 Speaker 1: purchase inventory, but most businesses need access to some sort 406 00:19:00,200 --> 00:19:02,600 Speaker 1: of capital in order to kind of get off the ground. Yeah, 407 00:19:02,640 --> 00:19:05,119 Speaker 1: starting a business is a legitimate reason to take on 408 00:19:05,160 --> 00:19:06,600 Speaker 1: debt if you have an idea, if you have a 409 00:19:06,640 --> 00:19:09,040 Speaker 1: business plan, if it's well thought out, in your plan 410 00:19:09,160 --> 00:19:13,000 Speaker 1: is for this business to replace having a career, then 411 00:19:13,040 --> 00:19:16,080 Speaker 1: I think taking on debt makes some sense for that reason. 412 00:19:16,320 --> 00:19:18,720 Speaker 1: And then the next reason when debt makes sense for 413 00:19:18,800 --> 00:19:21,720 Speaker 1: lots of folks is buying a home. Purchasing real estate 414 00:19:21,800 --> 00:19:25,280 Speaker 1: is probably the easiest debt to justify, since saving for 415 00:19:25,320 --> 00:19:29,000 Speaker 1: a primary or investment home is in full is basically 416 00:19:29,040 --> 00:19:32,359 Speaker 1: near impossible. Only the Great Dave Ramsey would say that 417 00:19:32,359 --> 00:19:34,520 Speaker 1: you should pay cash for a home, and we don't 418 00:19:34,520 --> 00:19:37,160 Speaker 1: really agree with that, Yeah, Joel. However, we do agree 419 00:19:37,200 --> 00:19:39,480 Speaker 1: with Dave when it comes to the argument that you 420 00:19:39,480 --> 00:19:41,480 Speaker 1: shouldn't pay off your mortgage because you get to write 421 00:19:41,520 --> 00:19:45,040 Speaker 1: off your mortgage interest. This makes my mortgage a good idea, right, Well, 422 00:19:45,200 --> 00:19:47,439 Speaker 1: some folks might be able to take that deduction, but 423 00:19:47,560 --> 00:19:50,800 Speaker 1: a fairly small number of actual homeowners will receive any 424 00:19:50,840 --> 00:19:53,760 Speaker 1: tax benefit for having a mortgage. So just make sure 425 00:19:53,800 --> 00:19:56,520 Speaker 1: you're not making that a reason for keeping your debt around. Yeah, 426 00:19:56,560 --> 00:19:58,679 Speaker 1: I completely agree. I think that's something that a lot 427 00:19:58,720 --> 00:20:01,520 Speaker 1: of homeowners tout as a reason to have a mortgage 428 00:20:01,640 --> 00:20:03,600 Speaker 1: or to take out a loan on a home. The 429 00:20:03,680 --> 00:20:06,840 Speaker 1: mortgage interest deduction has been overblown for years, and especially 430 00:20:06,880 --> 00:20:11,880 Speaker 1: with the most recent tax law, it's insanely overblown. Standard deduction, baby, Yes, 431 00:20:12,000 --> 00:20:14,040 Speaker 1: that's all you need. What I want to say, almost 432 00:20:14,520 --> 00:20:17,600 Speaker 1: taxpayers take the standard deduction now, and because of that, 433 00:20:17,600 --> 00:20:20,200 Speaker 1: that means that whatever interest you're paying on your mortgage, 434 00:20:20,440 --> 00:20:24,040 Speaker 1: it has no effect taxes at all. Yeah, so don't 435 00:20:24,119 --> 00:20:26,119 Speaker 1: let that be an excuse for a reason to have 436 00:20:26,160 --> 00:20:28,199 Speaker 1: a mortgage. For most people, it's just not true. I 437 00:20:28,240 --> 00:20:31,000 Speaker 1: bet Dave totally loved the fact that the standard deduction 438 00:20:31,040 --> 00:20:34,320 Speaker 1: got overhauled and then that can no longer be an 439 00:20:34,320 --> 00:20:37,399 Speaker 1: excuse for most folks. Right, Yeah, It's important to note too, 440 00:20:37,440 --> 00:20:40,399 Speaker 1: while we're talking about taking out a mortgage debt for 441 00:20:40,400 --> 00:20:43,359 Speaker 1: a home, that what mortgage interest rates are at nearly 442 00:20:43,359 --> 00:20:46,399 Speaker 1: all time lows right now, And we actually just recently 443 00:20:46,440 --> 00:20:50,440 Speaker 1: answered a question about paying more principle on a mortgage 444 00:20:50,480 --> 00:20:52,240 Speaker 1: and whether that's a good idea or not. Yeah, and 445 00:20:52,280 --> 00:20:55,679 Speaker 1: with mortgage interest rates at incredibly low levels, well, I 446 00:20:55,680 --> 00:20:57,800 Speaker 1: think that is something that we need to talk about 447 00:20:57,840 --> 00:21:00,280 Speaker 1: in the dynamic of taking on mortgage debt. I think 448 00:21:00,320 --> 00:21:02,320 Speaker 1: would be home buyers might see something like that and 449 00:21:02,440 --> 00:21:04,560 Speaker 1: might determine that it makes sense to take on even 450 00:21:04,560 --> 00:21:06,480 Speaker 1: more mortgage debt, because why not you can get a 451 00:21:06,480 --> 00:21:09,160 Speaker 1: mortgage at historically low rates or even buy a home, 452 00:21:09,440 --> 00:21:11,400 Speaker 1: you know, when they weren't ready to purchase a home yet, 453 00:21:11,440 --> 00:21:13,120 Speaker 1: right right, right, Yeah, And I think that is one 454 00:21:13,240 --> 00:21:16,080 Speaker 1: thing that can be a trap for people as they 455 00:21:16,160 --> 00:21:18,439 Speaker 1: are thinking about taking out mortgage debt. You know what 456 00:21:18,480 --> 00:21:21,360 Speaker 1: we just said that it is a debt that makes 457 00:21:21,400 --> 00:21:24,000 Speaker 1: sense for a lot of people, but even in that vein, 458 00:21:24,280 --> 00:21:27,120 Speaker 1: it doesn't make sense if it doesn't fit into your lifestyle. 459 00:21:27,359 --> 00:21:30,520 Speaker 1: It doesn't make sense if you're stressing your budget to 460 00:21:30,600 --> 00:21:32,720 Speaker 1: afford the payments, you still want to make sure whatever 461 00:21:32,760 --> 00:21:36,480 Speaker 1: debt you're taking out is reasonable, and specifically with buying 462 00:21:36,480 --> 00:21:38,680 Speaker 1: a home, to just make sure that you don't get 463 00:21:38,720 --> 00:21:40,560 Speaker 1: ahead of yourself, that you don't buy more home that 464 00:21:40,640 --> 00:21:42,960 Speaker 1: you can afford, or take on just a debtload that 465 00:21:42,960 --> 00:21:46,240 Speaker 1: you're uncomfortable having. Right Well, what's tricky to Joel is 466 00:21:46,240 --> 00:21:49,320 Speaker 1: that what's reasonable to one person may not be reasonable 467 00:21:49,320 --> 00:21:51,320 Speaker 1: to somebody else. Like somebody else might be much more 468 00:21:51,359 --> 00:21:53,359 Speaker 1: comfortable with spending a lot of money, like they're spenders 469 00:21:53,359 --> 00:21:55,680 Speaker 1: out there and their savers. So we'll have some specific 470 00:21:55,720 --> 00:21:57,920 Speaker 1: numbers as far as what you should keep in mind 471 00:21:58,480 --> 00:22:00,640 Speaker 1: later in the show. So, Joel, what's at the core 472 00:22:00,840 --> 00:22:03,800 Speaker 1: of all these instances where debt might make sense is 473 00:22:03,840 --> 00:22:06,800 Speaker 1: the fact that you are expecting these things to appreciate, right, 474 00:22:07,160 --> 00:22:09,360 Speaker 1: Like your education that should allow you to earn more 475 00:22:09,480 --> 00:22:12,000 Speaker 1: over your lifetime, starting a business that can ensure a 476 00:22:12,080 --> 00:22:15,080 Speaker 1: steady and not only a steady, but a fulfilling source 477 00:22:15,080 --> 00:22:17,959 Speaker 1: of income for years, maybe even a lifetime. And homes, man, 478 00:22:18,000 --> 00:22:20,199 Speaker 1: they aren't getting any less expensive at least over the 479 00:22:20,200 --> 00:22:23,040 Speaker 1: long run, right, Yeah, and a primary home, like it 480 00:22:23,040 --> 00:22:26,520 Speaker 1: shouldn't necessarily be viewed as a great investment vehicle, but 481 00:22:26,880 --> 00:22:30,360 Speaker 1: we know that real estate does appreciate over the long haul. Yep, yeah, 482 00:22:30,440 --> 00:22:32,679 Speaker 1: I completely agree. So I think that's, yeah, the biggest 483 00:22:32,680 --> 00:22:34,720 Speaker 1: difference between kind of some of those debts we mentioned 484 00:22:34,720 --> 00:22:37,000 Speaker 1: at the beginning that are just not good debts to 485 00:22:37,040 --> 00:22:40,120 Speaker 1: have in your life versus these debts that actually makes sense. Well, 486 00:22:40,160 --> 00:22:43,280 Speaker 1: their debts that are investing in something you're basically investing 487 00:22:43,280 --> 00:22:44,920 Speaker 1: in your future. All right, Matt, and we're gonna get 488 00:22:44,920 --> 00:22:46,920 Speaker 1: to some of those specifics. We're gonna talk about what 489 00:22:47,000 --> 00:22:49,720 Speaker 1: things you need to consider before you actually take on 490 00:22:49,800 --> 00:22:51,600 Speaker 1: debt and how you need to think about that as 491 00:22:51,640 --> 00:22:55,040 Speaker 1: a personal decision before you actually do take on more debt, 492 00:22:55,240 --> 00:22:56,600 Speaker 1: even if it is one of these debts that we 493 00:22:56,640 --> 00:22:58,159 Speaker 1: think make a lot of sense. And we'll get to 494 00:22:58,200 --> 00:23:08,360 Speaker 1: that right after the break. All right, we're back from break. 495 00:23:08,400 --> 00:23:11,600 Speaker 1: We're talking about when debt makes sense, and it's important 496 00:23:11,680 --> 00:23:14,400 Speaker 1: not to just consider the specific items that you are 497 00:23:14,440 --> 00:23:17,440 Speaker 1: considering taking out a loan for, but also to consider 498 00:23:17,480 --> 00:23:20,520 Speaker 1: your specific life scenario as well. Taking out a mortgage 499 00:23:20,640 --> 00:23:24,280 Speaker 1: while having massive amounts of student loan debt is vastly 500 00:23:24,280 --> 00:23:27,120 Speaker 1: different than taking one out. Once you've paid off all 501 00:23:27,160 --> 00:23:29,880 Speaker 1: of your student loan debt, your specific income level, your 502 00:23:29,920 --> 00:23:33,800 Speaker 1: savings rate, and your overall financial trajectory should be considered 503 00:23:33,840 --> 00:23:35,880 Speaker 1: before you decide to add more debt into your life. 504 00:23:36,119 --> 00:23:38,560 Speaker 1: Yeah man, And another big factor to consider is how 505 00:23:38,640 --> 00:23:40,960 Speaker 1: much debt you already have, right like, how much dobt 506 00:23:40,960 --> 00:23:43,760 Speaker 1: you currently have. Lenders will typically calculate a debt to 507 00:23:43,800 --> 00:23:46,080 Speaker 1: income ratio to determine how much to lend to you 508 00:23:46,200 --> 00:23:48,680 Speaker 1: as the borrower. They do this because they want to 509 00:23:48,720 --> 00:23:51,360 Speaker 1: make sure that they get paid right. However, here's the thing. 510 00:23:51,440 --> 00:23:54,280 Speaker 1: Not all lenders will actually calculate a debt to income 511 00:23:54,400 --> 00:23:58,280 Speaker 1: ratio a d t I, especially during economic booms. You know, 512 00:23:58,359 --> 00:24:00,359 Speaker 1: lending requirements like they tend to get past and you 513 00:24:00,400 --> 00:24:03,680 Speaker 1: might find yourself getting approved for a loan that you shouldn't. 514 00:24:04,040 --> 00:24:05,639 Speaker 1: So in this case, it is up to you to 515 00:24:05,680 --> 00:24:08,159 Speaker 1: self regulate. And so if you're wondering, like, how do 516 00:24:08,200 --> 00:24:10,840 Speaker 1: I calculate my own debt to income ratio, well, I'm 517 00:24:10,880 --> 00:24:12,520 Speaker 1: going to tell you how to do it. So to 518 00:24:12,600 --> 00:24:15,160 Speaker 1: calculate it, you just need to divide your monthly debt 519 00:24:15,240 --> 00:24:19,320 Speaker 1: payments by your monthly gross income, and that I'll give 520 00:24:19,359 --> 00:24:21,840 Speaker 1: you a percentage rate. And so, for example, let's say 521 00:24:21,880 --> 00:24:25,240 Speaker 1: you have in debt payments that you have every month, 522 00:24:25,680 --> 00:24:28,560 Speaker 1: and let's say that you make five thousand bucks every 523 00:24:28,600 --> 00:24:32,640 Speaker 1: single month. You do that math, and that's gonna give you. Yeah, 524 00:24:33,200 --> 00:24:35,280 Speaker 1: that's way too high, right, That's there's a reason why 525 00:24:35,320 --> 00:24:38,679 Speaker 1: I gave that as an example. Basically, anything below a 526 00:24:38,680 --> 00:24:43,120 Speaker 1: debt to income ratio is pretty great, is solid, right, 527 00:24:43,119 --> 00:24:45,000 Speaker 1: like that put you in a great range. But beyond 528 00:24:45,040 --> 00:24:48,880 Speaker 1: that you start getting into more murky waters. Anything above 529 00:24:50,119 --> 00:24:52,400 Speaker 1: like that's gonna be bad news. And so this isn't 530 00:24:52,440 --> 00:24:55,119 Speaker 1: necessarily a perfect calculation. But what I do like about 531 00:24:55,119 --> 00:24:56,720 Speaker 1: this is you can do some math and figure out 532 00:24:56,720 --> 00:24:59,440 Speaker 1: where you land. Right beyond, you're gonna be hard pressed 533 00:24:59,440 --> 00:25:01,840 Speaker 1: to even get approved by a bank for a mortgage 534 00:25:01,960 --> 00:25:04,080 Speaker 1: or even getting approved for a credit card. A debt 535 00:25:04,119 --> 00:25:05,960 Speaker 1: to income ratio that high is something that you're gonna 536 00:25:05,960 --> 00:25:07,919 Speaker 1: want to try to stay away from. Yeah, you know 537 00:25:07,960 --> 00:25:10,359 Speaker 1: what a lender says about you, Matt, and what they 538 00:25:10,400 --> 00:25:13,399 Speaker 1: say you can handle when it comes to taking on debt, well, 539 00:25:13,400 --> 00:25:16,840 Speaker 1: they're often going to be pretty optimistic, and you should 540 00:25:16,880 --> 00:25:19,040 Speaker 1: be a little more pessimistic. Well, they're in the business 541 00:25:19,119 --> 00:25:21,240 Speaker 1: to make loans and loan you money, right, they want 542 00:25:21,240 --> 00:25:23,440 Speaker 1: to write you that loan, and they want to make 543 00:25:23,520 --> 00:25:26,400 Speaker 1: interest back on their money. And so they're gonna tell 544 00:25:26,440 --> 00:25:28,560 Speaker 1: you that you can afford, well a little more. You 545 00:25:28,600 --> 00:25:31,800 Speaker 1: can stretch that number, especially with mortgages. This happens, right, 546 00:25:32,000 --> 00:25:33,760 Speaker 1: you can stretch that a little more. You can afford 547 00:25:33,800 --> 00:25:36,359 Speaker 1: a house that's worth three thousand dollars when really you 548 00:25:36,359 --> 00:25:39,480 Speaker 1: should be settling on one that's uh they cost. And 549 00:25:39,520 --> 00:25:41,119 Speaker 1: so I think it's important to note that. But I 550 00:25:41,160 --> 00:25:43,480 Speaker 1: think also if you take a look at your d 551 00:25:43,560 --> 00:25:46,400 Speaker 1: t I, you you calculate that and you find yourself 552 00:25:46,520 --> 00:25:49,439 Speaker 1: in that kind of upper echelon that's not good of 553 00:25:49,520 --> 00:25:52,440 Speaker 1: having a d t I oft or higher. Well, I 554 00:25:52,520 --> 00:25:54,600 Speaker 1: think the biggest takeaway from that is not to beat 555 00:25:54,640 --> 00:25:57,280 Speaker 1: yourself up, but it is to to start paying down 556 00:25:57,280 --> 00:26:00,320 Speaker 1: debt and to avoid taking on new debt. Right, even 557 00:26:00,320 --> 00:26:03,679 Speaker 1: those debts so we mentioned as debts that make sense, well, 558 00:26:03,920 --> 00:26:06,360 Speaker 1: they don't make sense if you can't afford them. And 559 00:26:06,480 --> 00:26:08,760 Speaker 1: if you have a really high debt to income ratio, 560 00:26:08,920 --> 00:26:11,160 Speaker 1: well that means you can't afford to take on new debt. 561 00:26:11,440 --> 00:26:15,120 Speaker 1: So focus instead for the time being on paying off 562 00:26:15,119 --> 00:26:17,399 Speaker 1: your debt as quickly as possible. Yeah, so d T 563 00:26:17,560 --> 00:26:20,640 Speaker 1: I your debt to income ratio. That is an important consideration, 564 00:26:20,920 --> 00:26:24,520 Speaker 1: an important personal consideration when you're thinking about taking out loans. 565 00:26:24,520 --> 00:26:27,640 Speaker 1: Something else that we want everyone to consider is stress. 566 00:26:28,040 --> 00:26:30,640 Speaker 1: Remember that taking on debt can be stressful. Even good 567 00:26:30,640 --> 00:26:32,800 Speaker 1: debt can lead to lots of amounts of stress. Uh, 568 00:26:32,880 --> 00:26:35,840 Speaker 1: Those regular monthly debt payments, like they can be financially 569 00:26:35,920 --> 00:26:38,520 Speaker 1: overwhelming if you overdo it. So make sure that you 570 00:26:38,560 --> 00:26:41,800 Speaker 1: know yourself. We all have different amounts of risk tolerance 571 00:26:41,800 --> 00:26:44,080 Speaker 1: and what we're willing to take on. Yeah, consider the 572 00:26:44,160 --> 00:26:46,280 Speaker 1: mental bandwidth that you feel like you're capable of and 573 00:26:46,520 --> 00:26:50,359 Speaker 1: make sure that you're not mentally overwhelming yourself by taking 574 00:26:50,440 --> 00:26:52,639 Speaker 1: on too much debt. Matt. A long time ago, I 575 00:26:52,640 --> 00:26:54,679 Speaker 1: think we mentioned this stat that the people that are 576 00:26:54,720 --> 00:26:58,120 Speaker 1: overwhelmed with debt essentially their i Q drops by thirteen 577 00:26:58,160 --> 00:27:01,920 Speaker 1: points on average. And that's because debt really does kind 578 00:27:01,920 --> 00:27:04,320 Speaker 1: of make us us dumber. It overwhelms us in this way. 579 00:27:04,480 --> 00:27:07,600 Speaker 1: It makes it hard for us to think clearly about 580 00:27:07,640 --> 00:27:10,359 Speaker 1: the tasks at hand, about our futures. Debt can have 581 00:27:10,400 --> 00:27:13,439 Speaker 1: this overwhelmingly negative effect on our lives and on our brains. 582 00:27:13,800 --> 00:27:15,560 Speaker 1: Well plus man, and we know that I can't afford 583 00:27:15,560 --> 00:27:18,639 Speaker 1: that thirteen point drop, man, then you're in unsightly i 584 00:27:18,720 --> 00:27:21,119 Speaker 1: Q territory that would not be good. But basically, I 585 00:27:21,119 --> 00:27:23,880 Speaker 1: think most of us we don't think about how the 586 00:27:23,920 --> 00:27:26,080 Speaker 1: debt that we take on is going to, you know, 587 00:27:26,160 --> 00:27:29,680 Speaker 1: impact kind of our mental functionality and and how well 588 00:27:29,760 --> 00:27:32,800 Speaker 1: we can cope with the stress that comes along with 589 00:27:32,840 --> 00:27:36,760 Speaker 1: those increased monthly payments. So let's take, for example, like 590 00:27:36,800 --> 00:27:39,639 Speaker 1: a investment property and the mortgage that we would take 591 00:27:39,680 --> 00:27:41,879 Speaker 1: out by buying one. Let's just assume even that the 592 00:27:41,960 --> 00:27:44,440 Speaker 1: numbers completely makes sense, they work out, we've done the math, 593 00:27:44,600 --> 00:27:47,480 Speaker 1: we hit the one percent rule, and that investment property, well, 594 00:27:47,520 --> 00:27:49,680 Speaker 1: it makes a whole lot of sense from a financial perspective. 595 00:27:49,880 --> 00:27:53,000 Speaker 1: There's always risk involved. And if the debt that you 596 00:27:53,040 --> 00:27:56,320 Speaker 1: took on for that rental property, even if your numbers 597 00:27:56,320 --> 00:27:59,679 Speaker 1: are fundamentally sound, that you ran in the lead up 598 00:27:59,720 --> 00:28:02,480 Speaker 1: to just seeing that property, well, if it's going to 599 00:28:02,600 --> 00:28:05,800 Speaker 1: have an adverse effect on your mental state, then it 600 00:28:05,840 --> 00:28:07,840 Speaker 1: makes sense to kind of take a step back and 601 00:28:07,880 --> 00:28:10,439 Speaker 1: think about what your goals are. And you know, what, 602 00:28:10,560 --> 00:28:13,040 Speaker 1: it's just not worth it to take on extra debt 603 00:28:13,200 --> 00:28:15,880 Speaker 1: if it's going to add bigger problems into your life, 604 00:28:15,880 --> 00:28:18,040 Speaker 1: and if it's going to cause you mental anguish, like 605 00:28:18,119 --> 00:28:21,960 Speaker 1: that is one of the most overlooked problems that debt creates. Yeah, Joe, 606 00:28:21,960 --> 00:28:24,680 Speaker 1: what we're talking about here is leverage, right. Essentially, anytime 607 00:28:24,680 --> 00:28:26,840 Speaker 1: that you can take on debt and use that to 608 00:28:27,080 --> 00:28:30,119 Speaker 1: make profits, like, that's what leverage is. But anytime you 609 00:28:30,160 --> 00:28:33,320 Speaker 1: have leverage, there is risk that is inherently involved, and 610 00:28:33,520 --> 00:28:35,960 Speaker 1: risk like that leads to stress. And so that is 611 00:28:36,000 --> 00:28:38,800 Speaker 1: an example of how taking on a debt that, even 612 00:28:38,880 --> 00:28:41,280 Speaker 1: though it might be good, can lead to more stress 613 00:28:41,320 --> 00:28:42,960 Speaker 1: in your life. So these are a number of the 614 00:28:43,120 --> 00:28:45,560 Speaker 1: different considerations, right, that you want to keep in mind 615 00:28:45,680 --> 00:28:48,120 Speaker 1: when you are personally assessing whether or not you should 616 00:28:48,120 --> 00:28:50,920 Speaker 1: take on debt. That might make sense to you, but 617 00:28:50,960 --> 00:28:53,040 Speaker 1: assuming you've sort of run the numbers, you've looked at 618 00:28:53,080 --> 00:28:55,040 Speaker 1: all these things, you've you know, you've considered the amount 619 00:28:55,040 --> 00:28:56,560 Speaker 1: of stress that you're willing to take on. You might 620 00:28:56,560 --> 00:28:58,600 Speaker 1: be asking yourself like where do I go to get 621 00:28:58,720 --> 00:29:01,240 Speaker 1: my debt? Which just kind of sounds like a bad 622 00:29:01,280 --> 00:29:03,280 Speaker 1: thing to say out loud, but you do want to 623 00:29:03,280 --> 00:29:05,360 Speaker 1: make sure that you're going to go somewhere that is 624 00:29:05,520 --> 00:29:08,080 Speaker 1: not just reputable, but where you know that you'll get 625 00:29:08,120 --> 00:29:10,120 Speaker 1: a good deal. Right, where you can get a good rate. 626 00:29:10,360 --> 00:29:13,120 Speaker 1: So go into a dark alley and finding someone there 627 00:29:13,120 --> 00:29:15,360 Speaker 1: who's willing to lend me fifty grand like a loan shark. 628 00:29:15,680 --> 00:29:17,320 Speaker 1: Is that the place to go, Matt, like a hard 629 00:29:17,360 --> 00:29:19,400 Speaker 1: money lender. That's what you want. They're so nice too. 630 00:29:19,560 --> 00:29:21,880 Speaker 1: If you forget to pay or you can't pay, yeah, no, 631 00:29:22,120 --> 00:29:23,880 Speaker 1: you you want to make sure that you are using 632 00:29:24,000 --> 00:29:27,200 Speaker 1: the the kind of institutions that won't come after you. 633 00:29:27,240 --> 00:29:29,800 Speaker 1: Aim your kneecaps exactly. You want to find the best 634 00:29:29,880 --> 00:29:33,120 Speaker 1: type of loan for your specific need. While you pretty 635 00:29:33,200 --> 00:29:36,760 Speaker 1: much always want to avoid the big national banks, yes 636 00:29:36,800 --> 00:29:39,120 Speaker 1: you do. Yeah, you You also want to always check 637 00:29:39,200 --> 00:29:42,520 Speaker 1: with your local credit unions. And this is for student loans, 638 00:29:42,560 --> 00:29:45,200 Speaker 1: for business loans as well as for a mortgage, and 639 00:29:45,200 --> 00:29:47,160 Speaker 1: then beyond that those right, if you're looking at getting 640 00:29:47,160 --> 00:29:49,280 Speaker 1: student loans, obviously you want to start with FASTA for 641 00:29:49,320 --> 00:29:52,000 Speaker 1: federal loans, but then if you're looking at private loans, 642 00:29:52,000 --> 00:29:54,280 Speaker 1: make sure that you're checking out sites like Credible or 643 00:29:54,360 --> 00:29:56,920 Speaker 1: so FI. If you're looking to get capital for a 644 00:29:56,920 --> 00:29:59,440 Speaker 1: small business that you're looking at, starting in addition to 645 00:29:59,520 --> 00:30:02,520 Speaker 1: your local credit union, you can find funding through the 646 00:30:02,720 --> 00:30:05,760 Speaker 1: s b A, which is the Small Business Administration, if 647 00:30:05,760 --> 00:30:08,840 Speaker 1: at all possible. And then again for a mortgage, always 648 00:30:08,920 --> 00:30:11,280 Speaker 1: start with your local credit union, but beyond that you 649 00:30:11,280 --> 00:30:14,560 Speaker 1: can look at online lenders like Rocket Mortgage and again 650 00:30:14,600 --> 00:30:16,360 Speaker 1: even with Credible and so far they can be good 651 00:30:16,360 --> 00:30:18,920 Speaker 1: options if you're looking at a mortgage. Yeah, but you're right, 652 00:30:18,960 --> 00:30:20,800 Speaker 1: like where you go to get your debt is so 653 00:30:20,920 --> 00:30:23,680 Speaker 1: important because you want the best terms. You want the 654 00:30:23,680 --> 00:30:27,880 Speaker 1: best rate. Sometimes going through a lender that isn't super reputable, 655 00:30:27,920 --> 00:30:30,840 Speaker 1: they might have different terms that just aren't standard or 656 00:30:30,880 --> 00:30:33,840 Speaker 1: are really anti consumer and they're not consumer friendly at all. 657 00:30:34,160 --> 00:30:36,600 Speaker 1: For instance, you might go to a bank that would 658 00:30:37,040 --> 00:30:39,959 Speaker 1: have a pre payment penalty for your mortgage, and if 659 00:30:39,960 --> 00:30:41,440 Speaker 1: you want to get rid of your debt more quickly, 660 00:30:41,560 --> 00:30:43,600 Speaker 1: well guess what you're gonna pay for that price. But 661 00:30:43,640 --> 00:30:45,800 Speaker 1: if you go to a credit union or a credible 662 00:30:45,920 --> 00:30:49,840 Speaker 1: lender like Credible, uh, you know you're not gonna have 663 00:30:49,920 --> 00:30:52,920 Speaker 1: any of those shady terms with lenders that partner with 664 00:30:52,960 --> 00:30:55,840 Speaker 1: Credible or with a credit union, And so yeah, you 665 00:30:55,880 --> 00:30:57,800 Speaker 1: want to make sure that the terms are the best 666 00:30:57,880 --> 00:31:00,880 Speaker 1: and where you go makes a huge different. Also, it's 667 00:31:00,920 --> 00:31:03,800 Speaker 1: important to be selective about the debt that you take on. 668 00:31:04,360 --> 00:31:07,960 Speaker 1: Even debt for quote unquote good reasons can end badly. 669 00:31:08,360 --> 00:31:10,400 Speaker 1: Taking on debt is not something that you should do 670 00:31:10,600 --> 00:31:15,240 Speaker 1: without considering alternatives. So for example, like, should I rent 671 00:31:15,320 --> 00:31:18,040 Speaker 1: longer so I can save up more in order to 672 00:31:18,160 --> 00:31:20,400 Speaker 1: buy the house of my dreams in order to buy 673 00:31:20,440 --> 00:31:22,880 Speaker 1: that starter home whatever it is? Should I be running 674 00:31:22,920 --> 00:31:25,280 Speaker 1: longer or should I be more content to stay put 675 00:31:25,280 --> 00:31:28,280 Speaker 1: where I am for the time being? Or here's another question. 676 00:31:28,360 --> 00:31:31,200 Speaker 1: Can I go to school or cheaply? Like? Do I 677 00:31:31,240 --> 00:31:33,520 Speaker 1: need to attend this school? Are there ways that I 678 00:31:33,560 --> 00:31:37,200 Speaker 1: can find more scholarships in order to help me pay 679 00:31:37,240 --> 00:31:39,640 Speaker 1: for school? Can I work part time while I'm in 680 00:31:39,680 --> 00:31:41,840 Speaker 1: school in order to decrease the amount of debt that 681 00:31:41,840 --> 00:31:43,840 Speaker 1: I'm taking on? Like, there are all these questions that 682 00:31:43,880 --> 00:31:46,520 Speaker 1: you can ask instead of just blindly taking out the 683 00:31:46,560 --> 00:31:49,200 Speaker 1: maximum amount you can Is there a better way to 684 00:31:49,280 --> 00:31:52,600 Speaker 1: hustle to start my small business while I'm working full time? 685 00:31:52,800 --> 00:31:54,880 Speaker 1: Is this something that you can launch while you still 686 00:31:54,880 --> 00:31:57,600 Speaker 1: have a regular paycheck at your day job and putting 687 00:31:57,600 --> 00:32:00,000 Speaker 1: in those extra hours in the evenings and on the weekends. 688 00:32:00,240 --> 00:32:02,160 Speaker 1: It's not something that I want to do full time 689 00:32:02,200 --> 00:32:03,880 Speaker 1: for the rest of my life working two jobs. But 690 00:32:04,320 --> 00:32:06,000 Speaker 1: is it something that you can do in order to 691 00:32:06,040 --> 00:32:08,880 Speaker 1: get jump started and avoid taking on that added risk. 692 00:32:09,200 --> 00:32:11,840 Speaker 1: Being selective about the debt you take on and asking 693 00:32:11,880 --> 00:32:15,480 Speaker 1: yourself those hard questions is crucial in order to make 694 00:32:15,520 --> 00:32:18,760 Speaker 1: sure that, even when debt makes sense, that you're doing 695 00:32:18,760 --> 00:32:21,640 Speaker 1: it wisely. Yeah. Man, even though taking on debt can 696 00:32:21,640 --> 00:32:24,840 Speaker 1: be good in certain situations, that doesn't mean debt is 697 00:32:25,000 --> 00:32:29,400 Speaker 1: a welcome to me. Go be thoughtful. We want you 698 00:32:29,400 --> 00:32:32,000 Speaker 1: to be thoughtful and careful about what debt you bring 699 00:32:32,040 --> 00:32:34,080 Speaker 1: into your life. Essentially, make sure that you have a 700 00:32:34,160 --> 00:32:36,440 Speaker 1: plan to get rid of it, and preferably like in 701 00:32:36,520 --> 00:32:39,160 Speaker 1: short order. Right, if you have debt, no, your plan 702 00:32:39,280 --> 00:32:41,400 Speaker 1: to tackle it. But then even beyond that, not all 703 00:32:41,480 --> 00:32:44,320 Speaker 1: debt necessarily needs to be paid off as soon as possible. 704 00:32:44,440 --> 00:32:46,160 Speaker 1: Right if you want to keep that debt around because 705 00:32:46,200 --> 00:32:48,600 Speaker 1: maybe you have a really, really great loan, maybe you've 706 00:32:48,640 --> 00:32:52,240 Speaker 1: got a fantastic mortgage with an incredibly low a p R. Well, 707 00:32:52,400 --> 00:32:54,960 Speaker 1: make sure that you have a plan for investing the difference, 708 00:32:55,000 --> 00:32:56,520 Speaker 1: like the money that you're not paying to pay down 709 00:32:56,520 --> 00:32:59,240 Speaker 1: that mortgage. Make sure that you are investing that money 710 00:32:59,280 --> 00:33:01,360 Speaker 1: and being smart with your money. Yeah, some of these 711 00:33:01,400 --> 00:33:04,400 Speaker 1: debts makes sense, and it doesn't make sense to pay 712 00:33:04,440 --> 00:33:06,960 Speaker 1: them off as quickly as possible to the exclusion of 713 00:33:06,960 --> 00:33:09,960 Speaker 1: every other goal financial goal that you have in your life. 714 00:33:10,240 --> 00:33:12,480 Speaker 1: So be careful out there. Some of these debts might 715 00:33:12,520 --> 00:33:16,080 Speaker 1: make some sense, but as in all things, moderation is key, 716 00:33:16,200 --> 00:33:19,000 Speaker 1: and even taking on good debt, we would suggest, requires 717 00:33:19,040 --> 00:33:21,320 Speaker 1: a lot of moderation as well. So, Matt, let's get 718 00:33:21,320 --> 00:33:23,400 Speaker 1: back to the beer that we had on the show today. 719 00:33:23,760 --> 00:33:26,120 Speaker 1: We had a check Pilsner by our buddies over at 720 00:33:26,240 --> 00:33:28,800 Speaker 1: Yeast Atlanta Brewers. What was your take on this one? 721 00:33:28,960 --> 00:33:30,760 Speaker 1: Well Man, Before I shared my, you know, my thoughts 722 00:33:30,800 --> 00:33:32,480 Speaker 1: on this beer, I thought it would be interesting to 723 00:33:32,520 --> 00:33:36,160 Speaker 1: share what exactly is a check pilsner and the name 724 00:33:36,240 --> 00:33:39,360 Speaker 1: itself check Pilsner. It's almost redundant because it's sort of 725 00:33:39,360 --> 00:33:41,240 Speaker 1: like saying an a T M machine. Really is it 726 00:33:41,360 --> 00:33:43,760 Speaker 1: like literally the only beer they make in Czechoslovakia or 727 00:33:43,760 --> 00:33:47,280 Speaker 1: something almost so like if I went to Czecho, Slovakia 728 00:33:47,320 --> 00:33:49,000 Speaker 1: and I said, could you get any other beer? If 729 00:33:49,040 --> 00:33:50,760 Speaker 1: I said, give me a Pilsner. Would they just look 730 00:33:50,800 --> 00:33:54,600 Speaker 1: at me like you idiot? All of our beer at Pilsner. Possibly, 731 00:33:54,640 --> 00:33:56,400 Speaker 1: I don't know. But that's the thing craft beer, man, 732 00:33:56,400 --> 00:33:58,040 Speaker 1: It's it's making its way around the world, and so 733 00:33:58,080 --> 00:34:01,120 Speaker 1: there's all types of beers everywhere. But the name pilsner, 734 00:34:01,320 --> 00:34:03,880 Speaker 1: basically what it means is that it's a beer from 735 00:34:03,920 --> 00:34:06,480 Speaker 1: the city called Pilson, which is a city in Check. 736 00:34:06,800 --> 00:34:09,200 Speaker 1: And so to call it a check Pilsner is sort 737 00:34:09,239 --> 00:34:11,080 Speaker 1: of not necessary, Like you can just call it a 738 00:34:11,120 --> 00:34:13,160 Speaker 1: Pilsener because like, at the core of it, you go 739 00:34:13,239 --> 00:34:16,000 Speaker 1: back in history and a Pilsner was a beer from Check. 740 00:34:16,160 --> 00:34:18,560 Speaker 1: So just a little a little beer history for you. 741 00:34:18,600 --> 00:34:20,520 Speaker 1: There man, there we go. But Joel Man, my fossil, 742 00:34:20,600 --> 00:34:23,240 Speaker 1: this beer are that it's this tastes like a classic 743 00:34:23,280 --> 00:34:26,080 Speaker 1: European beer. Like if I envision going over to Europe 744 00:34:26,320 --> 00:34:28,520 Speaker 1: on vacation and I just sit down at a random 745 00:34:28,560 --> 00:34:32,120 Speaker 1: restaurant in any country basically in the entire continent of 746 00:34:32,160 --> 00:34:34,120 Speaker 1: Europe and asked for a beer, Well, this is what 747 00:34:34,160 --> 00:34:36,560 Speaker 1: they're going to give me. It's light, it's refreshing. I 748 00:34:36,560 --> 00:34:38,440 Speaker 1: feel like this is a beer I could essentially have 749 00:34:38,760 --> 00:34:41,360 Speaker 1: pretty much with any kind of cuisine across all of Europe. 750 00:34:41,560 --> 00:34:44,560 Speaker 1: It's interesting enough to enjoy, but at the same time, 751 00:34:44,600 --> 00:34:46,759 Speaker 1: it doesn't have so much flavor going on that it 752 00:34:46,760 --> 00:34:48,919 Speaker 1: would detract from a meal, all right, So he said 753 00:34:48,960 --> 00:34:51,520 Speaker 1: it would pairal well with any cuisine, any cuisine. What 754 00:34:51,560 --> 00:34:55,120 Speaker 1: about a lean cuisine? Man, did you eat those in 755 00:34:55,120 --> 00:34:59,319 Speaker 1: the nineties, because I totally did. I remember going through 756 00:34:59,320 --> 00:35:02,280 Speaker 1: that phase at home where like the microwavable little meals 757 00:35:02,440 --> 00:35:04,600 Speaker 1: like the parmesan chicken on top of edgies or something 758 00:35:04,640 --> 00:35:06,120 Speaker 1: like that, you kind of like peel up the corner 759 00:35:06,160 --> 00:35:08,080 Speaker 1: stick in the microwave for a three fifty. Well, if 760 00:35:08,080 --> 00:35:10,480 Speaker 1: our friend John will donate another bottle, I'll try it 761 00:35:10,480 --> 00:35:13,880 Speaker 1: with a link cuisine and I'll report back. So gross, 762 00:35:15,080 --> 00:35:17,560 Speaker 1: All right, So this beer, in my opinion, it had 763 00:35:17,800 --> 00:35:20,200 Speaker 1: a light body but a full flavor punch. At the 764 00:35:20,200 --> 00:35:23,200 Speaker 1: same time, it had kind of hints of clothes in there, 765 00:35:23,520 --> 00:35:26,200 Speaker 1: a little bit of a banana bread feel. I'm kind 766 00:35:26,200 --> 00:35:28,319 Speaker 1: of going on Matt today on on this episode like 767 00:35:28,440 --> 00:35:30,560 Speaker 1: it with the flavor references. But yeah, so a little 768 00:35:30,560 --> 00:35:32,520 Speaker 1: bit of banana bread. And so you know what, I 769 00:35:32,560 --> 00:35:34,840 Speaker 1: say that this beer was tasty enough that how the 770 00:35:34,920 --> 00:35:36,640 Speaker 1: money has got to take a road trip to Pilson 771 00:35:36,719 --> 00:35:38,279 Speaker 1: to check out some more and see how they taste 772 00:35:38,320 --> 00:35:40,400 Speaker 1: over there. Oh man, I'm totally gonna add that to 773 00:35:40,480 --> 00:35:43,200 Speaker 1: my to my bucket list. Actually go to Pilson and 774 00:35:43,360 --> 00:35:45,839 Speaker 1: order a Pilsener. It doesn't get more real than that, right, Yeah, 775 00:35:45,840 --> 00:35:47,640 Speaker 1: it's gonna happen one of these days. All right, Matt, 776 00:35:47,680 --> 00:35:49,520 Speaker 1: that's gonna do it for this episode. And I just 777 00:35:49,520 --> 00:35:52,600 Speaker 1: hope more than anything that folks walking away from here 778 00:35:52,680 --> 00:35:56,279 Speaker 1: we'll know to tread lightly with debt. It can be sneaky, 779 00:35:56,400 --> 00:35:58,640 Speaker 1: but but it can also you know, make sense for 780 00:35:58,680 --> 00:36:00,360 Speaker 1: people in a lot of addit a lot at different 781 00:36:00,360 --> 00:36:03,319 Speaker 1: times in their lives. Yeah, we loved that. No, no, 782 00:36:03,640 --> 00:36:06,439 Speaker 1: that's not the takeaway. Tread lightly, that's the takeaway. Okay. 783 00:36:06,480 --> 00:36:08,080 Speaker 1: And if you want show notes through this episode, you 784 00:36:08,120 --> 00:36:10,520 Speaker 1: just go to our website how to Money dot com. 785 00:36:10,560 --> 00:36:12,360 Speaker 1: And if you enjoyed this episode, we would love for 786 00:36:12,400 --> 00:36:15,040 Speaker 1: you to leave us a review over at Apple Podcasts. 787 00:36:15,440 --> 00:36:17,440 Speaker 1: Know that that review will help others to define our 788 00:36:17,480 --> 00:36:20,160 Speaker 1: show and that will help them to do smarter things 789 00:36:20,160 --> 00:36:23,799 Speaker 1: with their money. Yeah, all right, man, Well that's gonna 790 00:36:23,840 --> 00:36:26,719 Speaker 1: be it until next time, Buddy, best friends out, best 791 00:36:26,719 --> 00:36:27,239 Speaker 1: friends out