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Speaker 1: Welcome to Out of Money. I'm Joel, I'm Matt. Today

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Speaker 1: we're answering your listener questions. That's right, buddy. Happy Monday

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Speaker 1: to everybody, Happy spring break to those who might be celebrating.

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Speaker 1: If you participate, if you celebrate the spring break, sure,

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Speaker 1: but we are people don't celebrate. So the people who don't,

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Speaker 1: they're irreligious. Heye, of course, to the vacations. A listener

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Speaker 1: is asking how much fun money should they be setting aside.

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Speaker 1: They're trying to determine, like how much seems fair between

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Speaker 1: him and his new wife, his new bride. Another listener

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Speaker 1: is asking about the cost of long term care and

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Speaker 1: specifically what assets might be vulnerable to that unexpectedly high

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Speaker 1: cost that folks would be realizing. And then another listener

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Speaker 1: is asking whether she should double down on her employer

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Speaker 1: provided retirement account or if she should just kind of

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Speaker 1: go out on her own, do her own thing the

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Speaker 1: individual retirement account. Jul, we'll get to that plus more.

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Speaker 1: You know, I said fun money too. Actually we got

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Speaker 1: another question that's fun money related. We'll get to all

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Speaker 1: that here during our episode. But first by day were

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Speaker 1: kind of money, by the way, it's the fun one. Hey,

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Speaker 1: I've got a frugler cheap for you, because I noticed

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Speaker 1: the other day I was driving along and only half

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Speaker 1: of the road was lit up. One of our headlights

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Speaker 1: had gone out, and you know they say typically once

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Speaker 1: one head leg is go ahead and replace both of them. Yeah,

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Speaker 1: first of all, do you do that? Do you do

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Speaker 1: you pull the one that's perfectly functional, that's working, because

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Speaker 1: you know it's going to go out very soon. I

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Speaker 1: typically do only because if I'm going to get a

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Speaker 1: nicer bowl, But I just wanted to be the same

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Speaker 1: color and shining the same distance. Like can you keep

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Speaker 1: up with a package or that's true, not the packaging,

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Speaker 1: but if you write it down somewhere look at your

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Speaker 1: Amazon orders, that's not my question. My question was that.

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Speaker 1: So I looked up the specific type of that I wanted,

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Speaker 1: and I saw that I could order it online. Actually

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Speaker 1: kind of splurged a little bit. Wanted to get the

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Speaker 1: nicer bowl, you know, like that kind of it's even crisper,

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Speaker 1: even brighter, it's farther exactly see further down the road,

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Speaker 1: extra vision. Plus Well you see what it looks like

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Speaker 1: on the packaging, and you're like, I'm sold, Well, of

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Speaker 1: course I want it to look like that. Yeah, so

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Speaker 1: I could order it online. The downside was that it

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Speaker 1: was going to take like seven or eight days. I

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Speaker 1: was really surprised to see how long it was going

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Speaker 1: to take for that thing to show up, reading it

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Speaker 1: from like Timu or or something. No, I don't know

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Speaker 1: who the provider was, but it was just going to

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Speaker 1: take a while. But then I looked up and saw

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Speaker 1: that locally, I could just hop over to the store

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Speaker 1: and get it at the local auto parts store, and

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Speaker 1: it was going to be like ten twenty dollars more expensive.

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Speaker 1: But I had the added benefit though, of not driving

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Speaker 1: around with one head light out. And I got to thinking,

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Speaker 1: wait a minute, am I being cheap by waiting by

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Speaker 1: in order to get the deal by driving around for

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Speaker 1: close to a week, all the while running the risk

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Speaker 1: of potentially getting it to it because depending depending on

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Speaker 1: what state you live in a deer you never know, yeah, yeah,

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Speaker 1: if your visibility is cut down low or somebody else

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Speaker 1: even seeing you. But I decided that it wasn't worth it,

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Speaker 1: and so I said, you know what, Normally, normally I

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Speaker 1: think I would kind of take the quote unquote cheap

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Speaker 1: route get the deal, But instead I need that with you.

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Speaker 1: I drove over to the local store, picked up the

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Speaker 1: headlights in person, installed them. I was good to go.

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Speaker 1: What would you have done though? In that situation, I

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Speaker 1: would either have ordered it where it was going to

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Speaker 1: come in in a day or two. But eight days

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Speaker 1: is too long, I think. Yeah, I I was completely shocked,

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Speaker 1: especially I'm so used to receiving something the next day.

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Speaker 1: There's also not a part store on every corner basically,

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Speaker 1: so it's not it's not like you have to drive

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Speaker 1: twenty five. Yeah, there's not some specialtything. There's like eight

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Speaker 1: within walking distance. It feels like, yeah, I mean that's

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Speaker 1: an exaggeration, but it feels like that's kind of true.

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Speaker 1: What it was that and then also thinking through if

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Speaker 1: I did the off chance get a ticket, and that

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Speaker 1: just the kind of excuse that an auto insure is

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Speaker 1: looking for to jack up your rates. Because then I

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Speaker 1: started thinking, well, even aside from the like maybe hitting

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Speaker 1: a deer or something like that, perpetually higher premiums down

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Speaker 1: the road, Like all these things were going through my

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Speaker 1: mind and I was It took me like ten seconds

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Speaker 1: to convince myself just to hop over to the local store.

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Speaker 1: Well a ticket, make it happen, it's gonna cost a

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Speaker 1: lot of money. But then if that ticket leads to

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Speaker 1: higher insurance costs, you're talking about like a double way

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Speaker 1: for like just one small little mistake right that you

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Speaker 1: you should have remedied earlier. So not the kind of

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Speaker 1: situation I wanted to divine myself in. Yeah, I'm with

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Speaker 1: you from a safety and a financial impact sort of standpoint.

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Speaker 1: And did you say we are in agreement? Did you

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Speaker 1: replace both? I did? Okay, Yeah. I mean again, like

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Speaker 1: if you're going from something that's if I was putting

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Speaker 1: in a matching bulb, then I would be okay holding off.

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Speaker 1: But if you're upgrading, you just want those things to

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Speaker 1: look the same. And typically those neural I feel like

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Speaker 1: they're they're kind of a bluer light because they're more led,

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Speaker 1: a little more crisp. Yeah, yeah, it's kind of I

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Speaker 1: hate it when I like, in the bathroom, if I

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Speaker 1: put in two different light bulbs and they're slightly oh

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Speaker 1: my gosh, Yeah, it's the worst. Okay, do you know

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Speaker 1: what temperature your family is? So with the bulbs off

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Speaker 1: on my head, it's either twenty seven hundred or it's

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Speaker 1: three thousand or even higher. But twenty seven is typically

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Speaker 1: the warmest. That's like the soft light traditional bowl, like

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Speaker 1: it's typical sixty. What are you that you're used to

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Speaker 1: different rooms? Right? You could if you want to, or

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Speaker 1: you'd go with the rock the same color throughout the

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Speaker 1: whole house in the same like light fixture. I want

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Speaker 1: all those to be consistent. But sometimes, like in my bathroom,

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Speaker 1: I'm okay with like a slightly different light than I

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Speaker 1: am going for, like a little bit crisper in the bathroom. Yeah,

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Speaker 1: just so you can see everything on your face right

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Speaker 1: while you're shaving. I mean, it's hideous, but it lights

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Speaker 1: it up well, so don't make it look any better. Sorry.

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Speaker 1: All right, let's mention the beer we're having today's episode.

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Speaker 1: This one's called Bossy Blonde. It's by contrast brewing or

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Speaker 1: contrast artists and nails. Excuse me, here you go. They

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Speaker 1: are Rachel Local Brewery. Ride around the corner and we'll

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Speaker 1: give our thoughts on this beer at the end of

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Speaker 1: the episode. If you have a money question, we'd love

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Speaker 1: to hear from you. Just got to have the money

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Speaker 1: dot com slash ask We need Matt some great listener questions.

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Speaker 1: Do so, if you have a money question. You're like, Eh,

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Speaker 1: he's kind of in the back of my head. Love

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Speaker 1: to know what Matt Joel think. Please do submit it.

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Speaker 1: Go to how to money dot com, slash ask, or

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Speaker 1: just literally record your question on the Voicemami app of

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Speaker 1: your phone, state your name at the top, and then

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Speaker 1: email it over to us howdomoneypot at gmail dot com.

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Speaker 1: We will of course take your question soon. Matt, let's

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Speaker 1: take a question about newlyweds and we want to learn

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Speaker 1: how to money together.

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Speaker 2: Hey, Matt and Joel, this is Shyanne from Memphis, Tennessee.

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Speaker 2: Me and my wife got married last August and we've

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Speaker 2: done the fun task of combining finances. We're currently doing

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Speaker 2: the approach of having all money going too joint accounts

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Speaker 2: and then having a small amount that's deposited end our

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Speaker 2: individual accounts each month. I can't say for sure, but

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Speaker 2: I believe you both have been an advocate of this

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Speaker 2: approach in the past. The issue we're having is identifying

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Speaker 2: which type of expenses would fall into the individual spending

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Speaker 2: versus the joint spending account. How do you guys determine

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Speaker 2: this yourselves? Additionally, how do you determine how much to

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Speaker 2: put into the individual accounts. Do you do a fixed

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Speaker 2: them ount, do you do a percentage based on the

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Speaker 2: prior month savings them ount? Or is it something else?

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Speaker 2: Thank for the help.

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Speaker 1: Memphis, Joel, you spent some time there? I have is that?

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Speaker 1: Did you actually get married in Memphis? We did get

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Speaker 1: married in Memphis, Yes, okay, I remember their wife is

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Speaker 1: from there or Tennessee and got married at the MEMPHISOO.

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Speaker 1: I'm sorry when I said Tennessee, I meant to say Chattanooga.

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Speaker 1: You also spend time there. We spent China Chattanooga, but

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Speaker 1: Memphis is also Tennessee. They're both, yeah, exactly, just in

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Speaker 1: like literally the opposite ends of Tennessee. But no, the

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Speaker 1: MEMPHISOO is plice, legit, lovely, just a wonderful place, and

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Speaker 1: I fond memories for sure. Best wedding ever. I didn't

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Speaker 1: go to yours. Well, we didn't know each other. Yeah,

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Speaker 1: I'm assuming mine was better. Well years was that you

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Speaker 1: were older in life like Kate and I got married

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Speaker 1: pretty young, And I feel like the older you get,

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Speaker 1: the more personality and the more your own you can

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Speaker 1: make it. I do. I don't know who you are

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Speaker 1: when you're like you were, like sixteen when you got married,

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Speaker 1: not quite that young. I mean yeah, like there's a

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Speaker 1: degree of like learning who you are, figuring yourself out,

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Speaker 1: figuring out the things that you value, and it's hard

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Speaker 1: to know all those things. I'm ever evolving, dynamic person

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Speaker 1: jol even now. I mean, yeah, you made sure your weddings.

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Speaker 3: Well.

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Speaker 1: I liked craft beer back then, but I also liked

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Speaker 1: dive bar beer, so like PBR, and I distinctly remember

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Speaker 1: wanting my groom's cake to be a PBR can and

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Speaker 1: I remember Emily's dad being like, no, man, come on,

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Speaker 1: that's not coolest lame. So instead I went with a

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Speaker 1: Norwegian flag because that's my heritage. And I'm actually that's fun.

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Speaker 1: I'm glad that I did that. So words of wisdom,

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Speaker 1: that's right, the future fell right, Yeah, if you willing

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Speaker 1: to listen to your elders. People. Speaking of elders, I'm

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Speaker 1: sure we're older than Cheyenne. Here, let's let's answer his question.

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Speaker 1: First off, congrats on getting married, and it sounds like

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Speaker 1: you guys have taken a really smart approach to combining

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Speaker 1: your finances. I mean, I prefer either everything being combined

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Speaker 1: or having one combined account and two separate accounts. But ideally,

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Speaker 1: I think the way you guys have have it set

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Speaker 1: up is great. Right, you get the benefits of combining everything,

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Speaker 1: and Matt, I think those benefits are many, Right. You

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Speaker 1: get the shared goals, you get the easy tracking, you

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Speaker 1: get the kind of transparency which builds trust in that relationship.

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Speaker 1: It's like, hey, I can look in and see what's

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Speaker 1: going on with the account. You can look in. We

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Speaker 1: both have essentially just as much control over this thing

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Speaker 1: as the other one. And then you also get at

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Speaker 1: least some autonomy because yeah, you're merging lives, you're too

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Speaker 1: becoming one flesh or whatever it is we say. But

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Speaker 1: it also doesn't mean that you aren't an individual with

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Speaker 1: your own hopes and goals and dreams too that you

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Speaker 1: share with your partner. Right, but at the very least

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Speaker 1: your own spending. Yeah, exactly, at the very least you

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Speaker 1: get to spend a little money without like kind of

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Speaker 1: no questions asked. I. Yeah, I get that. I've found

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Speaker 1: that for us, having a singular account that all of

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Speaker 1: the money is in that that is incredibly helpful. At least.

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Speaker 1: I think early on, when you first get married, it

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Speaker 1: seems like it's something you both want to keep up with.

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Speaker 1: But I would not be surprised, Hyenne, if it becomes

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Speaker 1: pretty quickly apparent that one of you enjoys doing this

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Speaker 1: more than the other person. And what you don't need

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Speaker 1: to do is to then be responsible for multiple logins,

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Speaker 1: like reconciling multiple accounts it all, and you know, just

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Speaker 1: kind of spread out all over the place, basically overcomplicating. Yeah,

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Speaker 1: it's just so much simpler to have a singular account.

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Speaker 1: And when it comes to so he's talking about having

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Speaker 1: separate accounts for their spending, I think a way around

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Speaker 1: that is just to simply have like a separate credit card.

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Speaker 1: And that's something that Kate actually actually does that she

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Speaker 1: has this separate card that I don't have, where she

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Speaker 1: completely manages expenses on that because if she knows she

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Speaker 1: goes out and buy something and she's thinking, there's a

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Speaker 1: good chance I'm going to return this. She doesn't want

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Speaker 1: me entering these transactions in where it's just like, oh, oh,

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Speaker 1: that sixty seven dollars hit or record it, and then

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Speaker 1: a couple weeks later she returns it and then I'm like, okay,

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Speaker 1: minus sixty seven. Now I got to go in and

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Speaker 1: do all this, she is able to mentally account for that,

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Speaker 1: and it also allows her like birthday presents, Christmas presents.

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Speaker 1: That's one of the reasons people talk about having their

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Speaker 1: own account as well as to well, I don't want

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Speaker 1: you to be able to see what I'm getting for

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Speaker 1: you or even where I'm getting it from when I

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Speaker 1: get you a gift, but the ability for her at

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Speaker 1: the end of the month to say, okay, and she

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Speaker 1: sends me a simple breakdown of like this number of

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Speaker 1: dollars from our giving account, this number of dollars goes

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Speaker 1: towards groceries, this amount comes out of the kids account.

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Speaker 1: That kind of thing. Yeah, there's a way to keep

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Speaker 1: things separate, whilst in my opinion, not necessarily having a

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Speaker 1: bunch of multiple accounts. That's a good point, I think

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Speaker 1: overdoing it with the accounts. I get why you might

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Speaker 1: want to do that, but I also just don't think

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Speaker 1: it's terribly helpful. And we've talked about this beforemat but

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Speaker 1: maybe we should highlight the reasons that combining things is good.

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Speaker 1: And especially you talked about getting married later on, and

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Speaker 1: I think the further along you are in your life,

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Speaker 1: let's say you get married in your forties. Right, then

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Speaker 1: you're like, I've already kind of built this financial life

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Speaker 1: on my own. I don't necessarily know that I want

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Speaker 1: to combine all the way, Like, let's put the rings

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Speaker 1: on the fingers, let's move in together. But that rental

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Speaker 1: property that I bought five years ago, that's mine, right,

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Speaker 1: And I guess I can understand the reasoning behind that.

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Speaker 1: But the benefits of combining accounts have been studied, and

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Speaker 1: they are significant because, according to statistics, you're going to

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Speaker 1: be happier if you do, You're going to experience greater

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Speaker 1: relationship satisfaction. Right, There's this added level of accountability that

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Speaker 1: helps to instill trust in the relationship. And then both partners,

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Speaker 1: as it turns out, are unlikely to spend in riskier ways.

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Speaker 1: And that's partly because what they buy is aside from

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Speaker 1: the credit card that you're talking about, the kit has

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Speaker 1: access to Matt, although she gives you at least generalities

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Speaker 1: what she's spending with that, the partner is going to

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Speaker 1: see what you're buying if you're spending directly from the

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Speaker 1: joint account. And so if you opt for those separate

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Speaker 1: accounts for fun money, yeah, you're opting for a little

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Speaker 1: more privacy, but that's not necessarily for the best for

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Speaker 1: your relationship, and each couple is going to have a

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Speaker 1: different stance on whether that's something they feel they need

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Speaker 1: or not. But I think the general statistics reveal an

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Speaker 1: underlying truth that the combination of finances as a couple

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Speaker 1: is going to make you stronger. Totally. Yeah, But then

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Speaker 1: how do you decide how much each of you gets

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Speaker 1: to spend? This is going to be highly dependent on

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Speaker 1: your relationship as well, and just the dynamics. And like

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Speaker 1: some folks out there think that the person who makes

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Speaker 1: more money or like they should be able to spend more.

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Speaker 1: Like you make more, you spend more others. I think

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Speaker 1: it's a percentage. It's like, hey, I bring home twice sixty,

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Speaker 1: then I'm gonna have ten percent more. You're gonna have

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Speaker 1: to do less. So I get the thirty two ounce beer,

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Speaker 1: you get a sixteen outpeer And maybe I don't know.

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Speaker 1: Do you ever take body weight into into account, Joe

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Speaker 1: when you're splitting a beer with your wife? Yeah? Oh yeah,

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Speaker 1: I actually do, yeah, because I'm like, if I give you,

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Speaker 1: I get sixty forty. That's also just because she doesn't

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Speaker 1: drink it. All the way I do. So Kate, it's

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Speaker 1: like a tiny person, So not like a literal tiny person,

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Speaker 1: but like she's just significantly smaller than I am. And

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Speaker 1: I'm like, and I think, oh, if I actually pour

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Speaker 1: you the same amount, this is gonna impact you differently,

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Speaker 1: it's gonna impact me. That being said, some folks think

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Speaker 1: that it should be split evenly each and every month,

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Speaker 1: but then others think that they should be able just

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Speaker 1: to spend hour they choose unless the cost of an

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Speaker 1: item is going to exceed let's say a particular threshold,

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Speaker 1: like one hundred bucks, that kind of thing. And so

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Speaker 1: these are all personal decisions. And I mean, in my opinion,

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Speaker 1: I think this is something you need to talk about

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Speaker 1: because I think every couple out there is going to

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Speaker 1: arrive at a different dollar amount. In our case, this

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Speaker 1: is something that we've talked about. And Kate always gets

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Speaker 1: more money than I do every single month, and that's

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Speaker 1: because of what we've included in her personal category as well,

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Speaker 1: which includes hair, like she doesn't get goes I would

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Speaker 1: get for a haircut, or it gets her hair color,

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Speaker 1: that kind of thing, make up products, things like that

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Speaker 1: you cut yours in your son's hair but not hers.

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Speaker 1: Huh not, I have to. We've talked about I've even

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Speaker 1: tried coloring. I've even tried the bolliage at home before

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Speaker 1: and it saved us some money, but it took a

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Speaker 1: lot of time. I don't think we're gonna do that again.

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Speaker 1: It didn't quite turn out I think as as excellently

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Speaker 1: as maybe she was hoping for as well. Or it's

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Speaker 1: good for you, you'd be on the hook for doing

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Speaker 1: it for the rest of your life. Yeah, But I mean,

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Speaker 1: what I'm highlighting here, though, is that I think each

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Speaker 1: couple is gonna arrive at a different point and it

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Speaker 1: doesn't necessarily have to be the same amount. It doesn't

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Speaker 1: even have to correspond with who is earning more money,

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Speaker 1: because that would be me. But in this, in our case,

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Speaker 1: in our relationship, she actually gets more to spend every

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Speaker 1: single month than I do. So yeah, I mean, I

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Speaker 1: think the recurring amount is a good way to think

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Speaker 1: about it. And let's say one of you is a

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Speaker 1: bigger spender than the other. Uh, then I think you

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Speaker 1: should make concessions for that, and and and sometimes kind

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Speaker 1: of like what you're alluding to, it's not even about

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Speaker 1: being a bigger spender. But it's like the things that

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Speaker 1: women need and I'm just generalizing here, they can be

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Speaker 1: more expensive than what men need. Like I just spend

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Speaker 1: less in general then my wife because I don't go

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Speaker 1: get my heirded right, like I there's some dudes out

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Speaker 1: there who do there are? And if that's like so

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Speaker 1: that's totally yes, they could be, but I think it's

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Speaker 1: worth me. But on the other side, I think about,

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Speaker 1: let's say the grocery budget, Matt, And there were times

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Speaker 1: where I could buy my craft beer at the grocery

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Speaker 1: store and my wife's like, I'm not drinking that stuff,

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Speaker 1: like or I don't care about the twenty two dollars

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Speaker 1: four pack or something like that. But but but but

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Speaker 1: I like it, right, and if I buy four of those,

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Speaker 1: that's significally adding to the grocery budget. So we have

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Speaker 1: to have that discussion, like, Okay, is that included in

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Speaker 1: groceries or is that something that I have to fork

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Speaker 1: over myself. And we typically kind of came down on

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Speaker 1: the line of, well, if I'm going to go over

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Speaker 1: a certain amount of craft beer spending, that's when it

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Speaker 1: falls on me. You give for like a little token sip.

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Speaker 1: That way you can justify it being a grocery right.

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Speaker 1: If I'm sharing, it goes back into the grocery find Okay.

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Speaker 1: But on the flip side, like we make room for

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Speaker 1: other recurring purchases in our budget, like it doesn't get

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Speaker 1: taken from our individual monthly allocated amount. Like let's say

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Speaker 1: one of us is going to see a therapist and

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Speaker 1: the other one isn't. Well, that doesn't necessarily come out

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Speaker 1: of my wife's money, Matt. That's just something that we

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Speaker 1: budget for as a family, you know, And one of

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Speaker 1: us might spend more than the other, and one of

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Speaker 1: us typically does, but the money still jointly comes out

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Speaker 1: of our account. And I guess one thing I want

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Speaker 1: to make sure that Shyanne knows. And this is really

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Speaker 1: important in marriage in general. But like, things don't always

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Speaker 1: have to be perfectly fair, and sometimes you just have

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Speaker 1: to you have to give up on that desire to

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Speaker 1: make things perfectly equal because that's just not going to

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Speaker 1: be the best thing for your budget or for your marriage.

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Speaker 1: Let's talk about big expenses as well, because I'm thinking

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Speaker 1: about let's say Shia wants to go on a big

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Speaker 1: trip with a friend or a family member, and his

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Speaker 1: wife wants to stay at home. If that's the case,

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Speaker 1: I think it might feel a bit unfair to her

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Speaker 1: to hang out at home and while he's using that

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Speaker 1: joint money to pay for it. If that's the case,

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Speaker 1: I think a conversation is again certainly needed, and like

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Speaker 1: you could ask and this is something you could talk about,

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Speaker 1: but is this going to delay some other goals that

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Speaker 1: we might be trying to achieve. If so, I think

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Speaker 1: that's going to be tough to stomach, and you're going

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Speaker 1: to have to come up with a way to reconcile that.

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Speaker 1: And so for you, like, maybe what that means in

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Speaker 1: this specific example is just finding some money you know

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Speaker 1: that pays for that trip in the joint account, but

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Speaker 1: then maybe more of it comes out of your individual

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Speaker 1: account or like your fun or your blow money. And

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Speaker 1: then the you know, in your case, since you're the

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Speaker 1: one taking this trip, maybe you find a way to

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Speaker 1: make some additional money on the side. Maybe you're working

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Speaker 1: some overtime, maybe you're kind of getting after selling clearing

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Speaker 1: out the garage. Actually, we've combined not only our lives

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Speaker 1: but our stuff, and it turns out we've got a

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Speaker 1: lot of redundancies here. Maybe I can unload some items

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Speaker 1: on Facebook, and then you can sort of channel some

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Speaker 1: of that money into this trip as well. But I

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00:17:58,840 --> 00:18:02,479
Speaker 1: think looking for just different creative ways to fund something

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Speaker 1: like this that might go above and beyond the typical

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Speaker 1: monthly expenses. It could be wise and some other creative

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Speaker 1: ways too, right, getting a credit card, getting the travel

400
00:18:09,640 --> 00:18:13,119
Speaker 1: sign up, yeah, points, and then saying, great, this is

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Speaker 1: gonna fund at least the flight that I'm taking, as

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00:18:16,480 --> 00:18:18,800
Speaker 1: that reduces the cost to the outlay that we're going

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Speaker 1: that we're gonna have. But yeah, those are discussions I

404
00:18:21,359 --> 00:18:22,919
Speaker 1: think're right now. You can find the money for multiple

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Speaker 1: places in your budget. You just have to kind of

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Speaker 1: come to an agreement and have an open, honest conversation

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Speaker 1: about it. There's just no perfect or even right or

408
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Speaker 1: wrong way to do this, but subtle the things, you

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Speaker 1: guys will settle into something that works for both of

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Speaker 1: you over time, and sometimes you kind of stumble upon

411
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Speaker 1: it through trial and error too, especially in those early years.

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Speaker 1: Ultimately start out with kind of the best agreed upon

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Speaker 1: things and then iterate from there. It's gonna take, you know,

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Speaker 1: kind of communication, work discussions to continue to hone in

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Speaker 1: on what the best path for managing your money together

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Speaker 1: is totally Yeah, eighteen years in, it's like second nature.

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Speaker 1: These are like conversations we easily have eighteen months in. Yeah,

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Speaker 1: it's some thing you're still waiting through. It's like, totally

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Speaker 1: get it. Shall you learn how to drive a car

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Speaker 1: or something like that? Yeah, yeah, you don't even think

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00:19:04,359 --> 00:19:05,600
Speaker 1: about it now, like you just get any you go.

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Speaker 1: Whereas like if you're eighteen years old, all those accidents

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Speaker 1: happen those first few years of driving. It's either so

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Speaker 1: expensive to ensure. But Joel, we got more to get to.

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Speaker 1: We're gonna hear from a listener who is considering long

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Speaker 1: term care insurance whether or not it's a necessity. We'll

427
00:19:18,960 --> 00:19:28,680
Speaker 1: get to that more right after this. All right, Matt,

428
00:19:28,680 --> 00:19:32,040
Speaker 1: we're back. Let's get to you a question about investing

429
00:19:32,200 --> 00:19:35,359
Speaker 1: and whether or not the employer account is superior to

430
00:19:35,440 --> 00:19:36,200
Speaker 1: doing your own thing.

431
00:19:36,480 --> 00:19:39,760
Speaker 4: Hi, Matt and Joel Miranda to hear from Louis Utah.

432
00:19:39,920 --> 00:19:42,840
Speaker 4: I've got a question about retirement accounts. I recently got

433
00:19:42,880 --> 00:19:45,640
Speaker 4: a new job that automatically contributes a fourteen point two

434
00:19:45,680 --> 00:19:47,800
Speaker 4: percent match of my salary to a four oh one

435
00:19:47,880 --> 00:19:50,760
Speaker 4: a plan. They're also set up to do an automatic

436
00:19:50,880 --> 00:19:53,160
Speaker 4: three percent from my pay to a pre tax four

437
00:19:53,200 --> 00:19:56,080
Speaker 4: oh three B. I also have the option for further

438
00:19:56,119 --> 00:19:58,480
Speaker 4: WROTH four oh three B or four fifty seven B

439
00:19:58,640 --> 00:20:02,080
Speaker 4: WROTH or pre tax contry fusions. At my previous job,

440
00:20:02,080 --> 00:20:04,399
Speaker 4: I contributed six percent to a ROTH for oh one

441
00:20:04,480 --> 00:20:07,080
Speaker 4: K to get the company match of four point five percent.

442
00:20:07,560 --> 00:20:10,000
Speaker 4: Since I'm already used to contributing the six percent, I

443
00:20:10,040 --> 00:20:12,240
Speaker 4: would like to keep at least that much contributing to

444
00:20:12,280 --> 00:20:16,000
Speaker 4: another retirement account. My question is what account is the

445
00:20:16,000 --> 00:20:18,720
Speaker 4: best option one offered through my new employer, or should

446
00:20:18,720 --> 00:20:20,800
Speaker 4: I look at an IRA that I could potentially roll

447
00:20:20,800 --> 00:20:23,320
Speaker 4: my previous four oh one k into as well some

448
00:20:23,359 --> 00:20:25,639
Speaker 4: other notes, I'm almost thirty in anticipate staying in this

449
00:20:25,720 --> 00:20:28,399
Speaker 4: job for several years. I also have the option of

450
00:20:28,480 --> 00:20:32,480
Speaker 4: having these accounts with either TIAA or Fidelity. Any advice there,

451
00:20:32,680 --> 00:20:33,400
Speaker 4: thanks so much?

452
00:20:34,000 --> 00:20:37,000
Speaker 1: All right, Miranda's got all the different accounts available to her.

453
00:20:37,080 --> 00:20:40,879
Speaker 1: Joel listeners. Alphabet suit hit back thirty a couple times.

454
00:20:40,960 --> 00:20:43,399
Speaker 1: If you wanted to listen to all the options that

455
00:20:43,520 --> 00:20:45,760
Speaker 1: are that have been laid up here before us in

456
00:20:45,840 --> 00:20:48,800
Speaker 1: her question, And Miranda, I'm going to say that you

457
00:20:48,840 --> 00:20:52,280
Speaker 1: are in a pretty fantastic matching situation here. Just I

458
00:20:52,320 --> 00:20:54,639
Speaker 1: mean the fact that you get a match that's that

459
00:20:54,760 --> 00:20:58,040
Speaker 1: generous here with your new job. She said fourteen point two.

460
00:20:58,160 --> 00:20:59,920
Speaker 1: I think, So where did the point two come from?

461
00:21:00,040 --> 00:21:01,880
Speaker 1: I don't know, but like I love it. The fact

462
00:21:01,920 --> 00:21:04,119
Speaker 1: that she's got that much coming out of her paycheck now,

463
00:21:04,359 --> 00:21:07,240
Speaker 1: like that amount of her paycheck that her employer is

464
00:21:07,280 --> 00:21:09,119
Speaker 1: choosing to stick in is what she's got going on.

465
00:21:09,280 --> 00:21:12,320
Speaker 1: That feels so good, right yeah. I mean it's like, hey,

466
00:21:12,480 --> 00:21:14,080
Speaker 1: by the way, this is your salary, but you also

467
00:21:14,119 --> 00:21:17,160
Speaker 1: got a fourteen point two percent raise, just like right

468
00:21:17,200 --> 00:21:18,720
Speaker 1: out of the gate. When do you think about what

469
00:21:18,800 --> 00:21:22,159
Speaker 1: the average American savings rate is. It's far below that.

470
00:21:22,440 --> 00:21:24,800
Speaker 1: So to feel like you're hitting that is just amazing

471
00:21:24,800 --> 00:21:27,240
Speaker 1: because of the generosity of your employer from the get go.

472
00:21:27,480 --> 00:21:29,880
Speaker 1: Is that's off the truck. It's no wonder that she's

473
00:21:29,880 --> 00:21:31,919
Speaker 1: planning on staying put. Like, who wants to give up

474
00:21:31,920 --> 00:21:34,639
Speaker 1: that kind of a benefit. It's amazing. I'm also pumped

475
00:21:34,680 --> 00:21:36,960
Speaker 1: that she's planning on keeping her contribution amount to where

476
00:21:36,960 --> 00:21:39,720
Speaker 1: it was before. I think it's a pretty phenomenal idea

477
00:21:39,760 --> 00:21:42,960
Speaker 1: to keep an investing floor essentially right, Like, she's like,

478
00:21:43,000 --> 00:21:44,760
Speaker 1: you know what, six percent, that's what I was doing before.

479
00:21:45,080 --> 00:21:46,440
Speaker 1: I'm going to keep it going. I'm not going to

480
00:21:46,520 --> 00:21:48,960
Speaker 1: go below that, even if the match grows, even if

481
00:21:49,040 --> 00:21:51,480
Speaker 1: the total dollar amount that she is socking away for

482
00:21:51,560 --> 00:21:54,280
Speaker 1: her future is going up significantly. By doing that, she's

483
00:21:54,280 --> 00:21:57,159
Speaker 1: gonna hit that financial independence stage of life before she

484
00:21:57,200 --> 00:21:59,960
Speaker 1: knows it. Man, But Miranda, should you be going deep

485
00:22:00,240 --> 00:22:02,240
Speaker 1: into the four or three B four P fifty seven

486
00:22:02,320 --> 00:22:05,959
Speaker 1: B direction or should you be going into your own IRA?

487
00:22:07,000 --> 00:22:08,800
Speaker 1: I mean, I think you've got so much money going

488
00:22:08,800 --> 00:22:11,920
Speaker 1: into the employer plan, which is again awesome, but there's

489
00:22:11,920 --> 00:22:14,960
Speaker 1: a benefit in diversifying which accounts that you contribute to.

490
00:22:15,240 --> 00:22:18,480
Speaker 1: So having an IRA in addition to those two workplace

491
00:22:18,480 --> 00:22:22,320
Speaker 1: accounts offers you some additional flexibility, and we prefer for

492
00:22:22,400 --> 00:22:25,159
Speaker 1: you to opt for a WROTH IRA over a traditional

493
00:22:25,520 --> 00:22:27,480
Speaker 1: So I think that's where I come down, Matt, And

494
00:22:28,080 --> 00:22:30,600
Speaker 1: that's that's often where we come down. Once you get

495
00:22:30,600 --> 00:22:32,720
Speaker 1: the match, it's like, Hey, going to the roth IRA

496
00:22:32,800 --> 00:22:35,240
Speaker 1: and then maybe coming back to the employer plan after

497
00:22:35,240 --> 00:22:38,800
Speaker 1: you've maxed out the WROTH is typically not always, but

498
00:22:38,840 --> 00:22:41,320
Speaker 1: that's typically the best way to go, and it sounds

499
00:22:41,320 --> 00:22:43,600
Speaker 1: like your workplace plans are really fantastic, right, And if

500
00:22:43,600 --> 00:22:46,080
Speaker 1: you had even more match dollars available, we'd want you

501
00:22:46,119 --> 00:22:48,520
Speaker 1: to snag those additional dollars soak them up. Yeah, but

502
00:22:48,760 --> 00:22:51,000
Speaker 1: them out there though, No, No, so that that's not

503
00:22:51,040 --> 00:22:53,000
Speaker 1: the case. So having your own roth IRA and building

504
00:22:53,000 --> 00:22:58,040
Speaker 1: that up over time with those excess personal contributions above

505
00:22:58,080 --> 00:23:00,000
Speaker 1: and beyond, I think that would be the superior choice

506
00:23:00,119 --> 00:23:03,119
Speaker 1: for your investing dollars right now. Sure, So I'm going

507
00:23:03,160 --> 00:23:04,399
Speaker 1: to be a little two faced here because I was

508
00:23:04,440 --> 00:23:06,280
Speaker 1: just talking about how great it is that I think

509
00:23:06,320 --> 00:23:08,639
Speaker 1: she's not going below her threshold or going below and

510
00:23:08,760 --> 00:23:13,600
Speaker 1: investing floor. Essentially, it's admirable, right, But I'm going to

511
00:23:13,800 --> 00:23:18,200
Speaker 1: introduce the nuanced conversation of like intermediate, medium to short

512
00:23:18,280 --> 00:23:20,600
Speaker 1: term goals because it is so easy for us to

513
00:23:20,600 --> 00:23:23,520
Speaker 1: beat the drama of Miranda. You need to be investing more.

514
00:23:23,600 --> 00:23:25,840
Speaker 1: You need to be if it's the more the better,

515
00:23:25,960 --> 00:23:28,200
Speaker 1: the sooner the better. And that's because the vast majority

516
00:23:28,200 --> 00:23:30,679
Speaker 1: of folks who are out there are not setting aside

517
00:23:30,760 --> 00:23:33,600
Speaker 1: enough for their retirements. Given the fact that this is

518
00:23:33,640 --> 00:23:35,439
Speaker 1: a new job for her, given the fact that the

519
00:23:35,440 --> 00:23:39,080
Speaker 1: percentage that she's got going set aside towards retirement has

520
00:23:39,080 --> 00:23:42,680
Speaker 1: also increased. That's I'm thinking about it. That's a significant

521
00:23:42,720 --> 00:23:44,920
Speaker 1: amount of money, and I don't I would hate to

522
00:23:44,960 --> 00:23:47,639
Speaker 1: see her in a position to where she's a little

523
00:23:47,680 --> 00:23:50,679
Speaker 1: cash strapped because she isn't necessarily thinking about some of

524
00:23:50,680 --> 00:23:53,920
Speaker 1: these more medium term intermediate goals like I want to

525
00:23:53,920 --> 00:23:57,000
Speaker 1: buy a house, specific car, those two things specifically, Yeah,

526
00:23:57,160 --> 00:23:58,879
Speaker 1: I mean because those yeah, that takes a lot of

527
00:23:58,920 --> 00:24:01,480
Speaker 1: money to save up, but downpay And so she didn't

528
00:24:01,520 --> 00:24:04,080
Speaker 1: say anything about her housing situation that I heard her,

529
00:24:04,119 --> 00:24:07,480
Speaker 1: So no, okay, but house in a car, I mean,

530
00:24:07,520 --> 00:24:09,440
Speaker 1: ideally you're paying cash for your car, but that takes

531
00:24:09,520 --> 00:24:10,800
Speaker 1: up I mean, that takes a lot of money to

532
00:24:10,800 --> 00:24:12,480
Speaker 1: set aside that much money. Same thing with the down

533
00:24:12,480 --> 00:24:14,960
Speaker 1: payment for a house. I don't want you to forsake

534
00:24:15,080 --> 00:24:16,919
Speaker 1: some of these. I don't even want to call them

535
00:24:16,960 --> 00:24:19,200
Speaker 1: lifestyle goals, but just I mean they are, I guess right,

536
00:24:19,240 --> 00:24:21,920
Speaker 1: but in everything lifestyle eventually, like you call it retirement,

537
00:24:21,920 --> 00:24:25,160
Speaker 1: but at some point we're talking about your lifestyle within retirement.

538
00:24:25,200 --> 00:24:27,000
Speaker 1: And so I don't want you to forsake these short

539
00:24:27,040 --> 00:24:29,000
Speaker 1: term goals. With those two things in particular, you're you're

540
00:24:29,040 --> 00:24:32,520
Speaker 1: either talking about getting better financial terms, right or whereas

541
00:24:32,560 --> 00:24:34,800
Speaker 1: like say, saving twenty percent to put down instead of

542
00:24:34,840 --> 00:24:36,879
Speaker 1: having five percent to put down, you're gonna save a

543
00:24:36,920 --> 00:24:38,680
Speaker 1: bunch of money in that way. Or if you're paying

544
00:24:38,680 --> 00:24:41,560
Speaker 1: cash for the car instead of financing it, you're talking

545
00:24:41,600 --> 00:24:43,640
Speaker 1: about not having to take out a six or seven

546
00:24:43,720 --> 00:24:45,720
Speaker 1: percent loan these days. And that's if you've got that's

547
00:24:45,720 --> 00:24:48,320
Speaker 1: if you've got good credit. So I think what you're

548
00:24:48,400 --> 00:24:51,560
Speaker 1: getting at is if you over index towards retirement and

549
00:24:51,560 --> 00:24:54,480
Speaker 1: you're not also saving for goals and things that you

550
00:24:54,560 --> 00:24:57,760
Speaker 1: want to purchase in the coming years, then you're being

551
00:24:57,760 --> 00:25:02,280
Speaker 1: too myopic, right, You're being two laser fox focus retirement, retirement, retirement,

552
00:25:02,359 --> 00:25:06,040
Speaker 1: And I think that's obviously a really important consideration, but

553
00:25:06,440 --> 00:25:09,159
Speaker 1: you don't want to do it to the neglect of

554
00:25:09,560 --> 00:25:11,440
Speaker 1: other upcoming outlays that you're gonna have to make. I

555
00:25:11,440 --> 00:25:14,800
Speaker 1: think most listeners, yeah, keep saving, keep investing. But for

556
00:25:14,840 --> 00:25:17,320
Speaker 1: her specifically because she listens to the show, and because

557
00:25:17,359 --> 00:25:19,760
Speaker 1: she is the type of person to send us the

558
00:25:19,840 --> 00:25:22,080
Speaker 1: voice memo that tells me she's probably a little bit

559
00:25:22,080 --> 00:25:24,200
Speaker 1: more buttoned up than she's got a decent nest to

560
00:25:24,200 --> 00:25:27,520
Speaker 1: exent aside. So she asked too about like where maybe

561
00:25:27,560 --> 00:25:29,200
Speaker 1: she should open up the account, and I think we

562
00:25:29,200 --> 00:25:31,560
Speaker 1: should specific companies. Let's talk about that, and we typically

563
00:25:31,640 --> 00:25:35,640
Speaker 1: highlight a few, right, and we point to low cost

564
00:25:35,640 --> 00:25:40,080
Speaker 1: brokerages basically every time we talk about this. Matt Schwab, Fidelity, Vanguard,

565
00:25:40,160 --> 00:25:43,880
Speaker 1: those are the top three. They're not only like gargantuan behemoths,

566
00:25:44,200 --> 00:25:47,800
Speaker 1: but they also have just incredibly low costs index funds

567
00:25:47,800 --> 00:25:50,000
Speaker 1: that people can invest in. You could even opt for

568
00:25:50,119 --> 00:25:53,120
Speaker 1: robin Hood, which you love, Matt, because of their match. Yeah,

569
00:25:53,119 --> 00:25:56,720
Speaker 1: I know Betterment has been doing something similar because yeah,

570
00:25:56,960 --> 00:25:58,800
Speaker 1: Robinhood kicked it off. And now some of these other

571
00:25:59,200 --> 00:26:01,679
Speaker 1: online brokers are saying, wait a second, are we going

572
00:26:01,760 --> 00:26:04,199
Speaker 1: to offer matches to our customers too? And they're like,

573
00:26:04,280 --> 00:26:06,399
Speaker 1: I guess we have to since Robina did it. The

574
00:26:06,480 --> 00:26:09,400
Speaker 1: cat's out of the bag. So yeah, it's amazing. How

575
00:26:09,400 --> 00:26:12,080
Speaker 1: that's just a brand new thing that never existed before.

576
00:26:12,440 --> 00:26:15,239
Speaker 1: A match that you get from your brokerage and not

577
00:26:15,280 --> 00:26:18,240
Speaker 1: from your employer. Super super cool. Just prioritize, of course,

578
00:26:18,280 --> 00:26:20,879
Speaker 1: low cost, well diversified funds, no matter which one of

579
00:26:20,880 --> 00:26:23,199
Speaker 1: those firms you go with. And you mentioned too, the

580
00:26:23,240 --> 00:26:26,160
Speaker 1: ability to choose which company you go with from your employer,

581
00:26:26,560 --> 00:26:31,879
Speaker 1: Fidelity versus TIAA, and Fidelity is the choice there. And

582
00:26:32,040 --> 00:26:34,560
Speaker 1: it's not because tia is like a bad company or

583
00:26:34,600 --> 00:26:37,359
Speaker 1: anything like that, Like far from it. They are the

584
00:26:37,440 --> 00:26:39,240
Speaker 1: go to for a whole lot of nonprofits when it

585
00:26:39,240 --> 00:26:43,520
Speaker 1: comes to the investment brokerage house they choose, but if

586
00:26:43,560 --> 00:26:46,040
Speaker 1: you have the option of Fidelity, it's a superior choice

587
00:26:46,280 --> 00:26:49,440
Speaker 1: basically all the time. From a feet perspective, I think

588
00:26:49,480 --> 00:26:52,119
Speaker 1: of them, Matt and you can I think appreciate this.

589
00:26:52,160 --> 00:26:54,520
Speaker 1: They're kind of like the Aldi of investment houses. Yeah,

590
00:26:55,040 --> 00:26:57,480
Speaker 1: not the Costco, No, I think they're all the who

591
00:26:57,480 --> 00:27:01,280
Speaker 1: would be the Costco? Is Costco? Like Charles, Maybe seems

592
00:27:01,280 --> 00:27:02,720
Speaker 1: like they've got a little bit more going on in

593
00:27:02,760 --> 00:27:05,159
Speaker 1: the customer service, maybe some fancier options for you, but

594
00:27:05,160 --> 00:27:10,080
Speaker 1: they're not quite as discount. That's yeah. That might Bear,

595
00:27:10,160 --> 00:27:13,000
Speaker 1: might even be Aldie, I'm not sure, but that's true.

596
00:27:13,160 --> 00:27:14,680
Speaker 1: They're all great choices. I mean, at the end of

597
00:27:14,680 --> 00:27:16,800
Speaker 1: the day, Team Randa, she's not even thirty and it

598
00:27:16,840 --> 00:27:19,359
Speaker 1: sounds like she's investing close to a quarter of her income.

599
00:27:19,480 --> 00:27:22,000
Speaker 1: So just mad props to you. Keep it up. You're

600
00:27:22,040 --> 00:27:25,840
Speaker 1: gonna find yourself within that FI territory well before most folks,

601
00:27:26,160 --> 00:27:27,960
Speaker 1: and even before that, I think you are going to

602
00:27:28,000 --> 00:27:29,679
Speaker 1: be able to open up a lot of different options,

603
00:27:29,800 --> 00:27:32,240
Speaker 1: give yourself a ton more flexibility in the not so

604
00:27:32,320 --> 00:27:35,720
Speaker 1: distant future. Let's hear from a listener who is looking

605
00:27:35,720 --> 00:27:38,360
Speaker 1: ahead to the financial situation of his parents. He wants

606
00:27:38,400 --> 00:27:41,720
Speaker 1: to make sure they're a strong position there in their

607
00:27:41,800 --> 00:27:42,440
Speaker 1: later years.

608
00:27:43,359 --> 00:27:47,600
Speaker 3: Hey, Joel and Matt, it's Nate from Oklahoma City ferst Off.

609
00:27:47,680 --> 00:27:50,800
Speaker 3: Love you guys and listen to you guys for I

610
00:27:50,800 --> 00:27:53,800
Speaker 3: think five years now. You guys help me settle on

611
00:27:53,800 --> 00:27:56,760
Speaker 3: the path to simplify my finance. And thank you so

612
00:27:56,840 --> 00:28:00,760
Speaker 3: much for that kind of question about long term care.

613
00:28:02,160 --> 00:28:06,200
Speaker 3: I was curious my parents have to be this question,

614
00:28:06,320 --> 00:28:09,280
Speaker 3: and I didn't know it for long term care when

615
00:28:09,280 --> 00:28:12,840
Speaker 3: someone's in a nursing home. We were wondering what assets

616
00:28:13,000 --> 00:28:18,720
Speaker 3: were protected from nursing homes to access, like retirement accounts or.

617
00:28:18,680 --> 00:28:20,359
Speaker 2: Homes or anything like that.

618
00:28:20,359 --> 00:28:21,160
Speaker 4: That's just my question.

619
00:28:21,600 --> 00:28:22,440
Speaker 2: Thank mad.

620
00:28:22,480 --> 00:28:24,040
Speaker 1: I wish we had like a medal or something like

621
00:28:24,080 --> 00:28:25,800
Speaker 1: that we could send to people who've been listening as

622
00:28:25,800 --> 00:28:28,520
Speaker 1: long as Nate has. They deserve it, like a challenge

623
00:28:28,560 --> 00:28:32,440
Speaker 1: coin from the Stoics. What's his name, Yeah, Ryan Holliday. Yeah,

624
00:28:32,480 --> 00:28:34,080
Speaker 1: he's got like all the coins and stuff in it

625
00:28:34,160 --> 00:28:35,800
Speaker 1: on you. He drops them and they hit the table

626
00:28:35,800 --> 00:28:38,240
Speaker 1: and you can hear them, like we've got beer caps.

627
00:28:38,280 --> 00:28:41,360
Speaker 1: That's right, we can send those out. Can you hear that? Well,

628
00:28:41,360 --> 00:28:43,160
Speaker 1: then Naked keep it in his pocket every time he

629
00:28:43,240 --> 00:28:45,160
Speaker 1: touches his pocket. He'd be like, oh, yeah, I love

630
00:28:45,200 --> 00:28:49,240
Speaker 1: that show. Someday I'm gonna die. It's like the what's

631
00:28:49,280 --> 00:28:53,080
Speaker 1: the Stoics? But they're momentum. Sometime I'm gonna die. But

632
00:28:53,120 --> 00:28:55,200
Speaker 1: for now, I'll listen to how to make it. You

633
00:28:55,240 --> 00:28:57,240
Speaker 1: should think about it. Glad the show's been helpful, Nate,

634
00:28:57,280 --> 00:28:59,760
Speaker 1: thank you for listening. Let's talk about long term care

635
00:28:59,800 --> 00:29:03,520
Speaker 1: andurance and just kind of thinking about planning for the

636
00:29:03,640 --> 00:29:06,960
Speaker 1: extreme future and for your parents. Less about extreme future,

637
00:29:07,040 --> 00:29:11,000
Speaker 1: more about near term stuff. These are questions Matt, I'm

638
00:29:11,000 --> 00:29:12,560
Speaker 1: sure you're having with your parents. I'm having with my

639
00:29:12,600 --> 00:29:14,520
Speaker 1: parents to a certain extent as well. A lot of

640
00:29:14,520 --> 00:29:17,920
Speaker 1: folks buy long term care insurance specifically because they're told to,

641
00:29:18,000 --> 00:29:21,560
Speaker 1: and in some cases it does make sense. But long

642
00:29:21,640 --> 00:29:25,880
Speaker 1: term care insurance can be so stinking expensive. It's not

643
00:29:25,920 --> 00:29:30,000
Speaker 1: even funny, and it's a far cry from what it

644
00:29:30,160 --> 00:29:33,440
Speaker 1: was like fifteen years ago. Premiums have skyrocketed, summerre up

645
00:29:33,480 --> 00:29:35,840
Speaker 1: something like five hundred percent over the last ten to

646
00:29:35,840 --> 00:29:38,760
Speaker 1: fifteen years. So talk about inflation, Matt, long term care

647
00:29:38,760 --> 00:29:42,239
Speaker 1: insurance premium inflation has been worse than eggs. And so,

648
00:29:42,400 --> 00:29:44,680
Speaker 1: you know, while long term care insurance can provide an

649
00:29:44,680 --> 00:29:47,719
Speaker 1: incredible benefit for a really expensive need, that's the thing.

650
00:29:47,760 --> 00:29:49,320
Speaker 1: It's like, you kind of want to ensure against something

651
00:29:49,320 --> 00:29:52,640
Speaker 1: like this because of how prohibitively expensive it can be.

652
00:29:53,280 --> 00:29:55,920
Speaker 1: Most Americans will need a few years of nursing home

653
00:29:55,960 --> 00:29:58,520
Speaker 1: care on average, right, And many who opt to take

654
00:29:58,560 --> 00:30:01,440
Speaker 1: out long term care insurance, well, they actually end up

655
00:30:01,520 --> 00:30:04,560
Speaker 1: dropping it before they're able to use the benefits because

656
00:30:04,600 --> 00:30:08,160
Speaker 1: of how expensive the premiums get. And yeah, it just

657
00:30:08,200 --> 00:30:10,560
Speaker 1: tends to become more than they barkin for. So, you know,

658
00:30:10,560 --> 00:30:12,840
Speaker 1: while avoiding long long term care insurance, it sounds like

659
00:30:12,880 --> 00:30:15,280
Speaker 1: a risky move, like, hey, if I don't get that stuff,

660
00:30:15,320 --> 00:30:17,960
Speaker 1: even though it's like ridiculously expensive, it feels like highway robbery,

661
00:30:18,360 --> 00:30:20,280
Speaker 1: then like I'm not going to be taken care of. Well,

662
00:30:21,240 --> 00:30:23,520
Speaker 1: dropping it before you use it is like the worst

663
00:30:23,560 --> 00:30:25,600
Speaker 1: thing in the world. It's like going to college for

664
00:30:25,600 --> 00:30:27,440
Speaker 1: three years, racking up a ton of debt, and then

665
00:30:27,480 --> 00:30:30,040
Speaker 1: dropping out before you get the degree, which is maybe

666
00:30:30,560 --> 00:30:33,480
Speaker 1: an okay situation to find yourself in if you say,

667
00:30:33,520 --> 00:30:35,760
Speaker 1: go to the local community college. But we're talking about

668
00:30:35,800 --> 00:30:38,280
Speaker 1: like Ivy League prices here when it comes to what

669
00:30:38,360 --> 00:30:40,520
Speaker 1: this long term care is going to cost. And then

670
00:30:40,560 --> 00:30:43,120
Speaker 1: with folks living longer, with the supply of the demand

671
00:30:43,120 --> 00:30:46,480
Speaker 1: and balance as well of the providers who are offering

672
00:30:46,480 --> 00:30:48,640
Speaker 1: this care to the elderly, I think this issue it

673
00:30:48,640 --> 00:30:51,360
Speaker 1: could actually get worse in the coming years. So let's

674
00:30:51,360 --> 00:30:54,720
Speaker 1: talk about funding long term care specifically. If you don't

675
00:30:54,760 --> 00:30:57,040
Speaker 1: have long term care insurance, well, you've got to spend

676
00:30:57,040 --> 00:30:59,840
Speaker 1: your own money, specifically until you reach the point where

677
00:31:00,120 --> 00:31:03,680
Speaker 1: Medicaid kicks in. But even then, Medicaid coverage it's only

678
00:31:03,800 --> 00:31:06,320
Speaker 1: gonna help in certain situations. It's not going to help

679
00:31:06,320 --> 00:31:09,120
Speaker 1: most middle class folks out there, and oftentimes what that

680
00:31:09,200 --> 00:31:11,400
Speaker 1: means is you're kind of out there on your own.

681
00:31:11,480 --> 00:31:17,080
Speaker 1: It's basically for people who are impoverish, who are destitute medicaids. Yeah, exactly,

682
00:31:17,160 --> 00:31:19,560
Speaker 1: if you built up a you know, not a ridiculous

683
00:31:19,560 --> 00:31:22,040
Speaker 1: elon must networth. But just like even just a nice

684
00:31:22,120 --> 00:31:25,200
Speaker 1: little tidy sum, sorry, Medicaid isn't going to kick in

685
00:31:25,240 --> 00:31:26,920
Speaker 1: to help you with long term care stuff. Yeah, and

686
00:31:27,000 --> 00:31:30,320
Speaker 1: so for Nay, I would hopefully your parents they've been

687
00:31:30,360 --> 00:31:34,440
Speaker 1: diligent savers. It's just important to factor this in, right, Like,

688
00:31:34,520 --> 00:31:37,640
Speaker 1: don't just project twenty five times your expenses and call

689
00:31:37,680 --> 00:31:41,360
Speaker 1: it a day, but also consider these future potential costs

690
00:31:41,400 --> 00:31:43,640
Speaker 1: and how you know they're going to add up over time.

691
00:31:43,720 --> 00:31:46,480
Speaker 1: This is one of those massive considerations that too many

692
00:31:46,480 --> 00:31:49,280
Speaker 1: folks aren't paying enough attention to. And you know, there

693
00:31:49,280 --> 00:31:52,760
Speaker 1: are other potential financial products and vehicles that can help

694
00:31:52,800 --> 00:31:55,080
Speaker 1: if you end up in a financial pinch. I'm specifically

695
00:31:55,080 --> 00:31:58,120
Speaker 1: thinking of a reverse mortgage. I think that's something that

696
00:31:58,120 --> 00:31:59,959
Speaker 1: folks are like, oh, yeah, we've always got that got

697
00:32:00,200 --> 00:32:03,040
Speaker 1: the house, But that's not ideal either. They can be

698
00:32:03,240 --> 00:32:06,480
Speaker 1: really expensive. The fees that are associated with those sky high,

699
00:32:06,760 --> 00:32:08,880
Speaker 1: and they can also prevent you from leaving your home

700
00:32:08,920 --> 00:32:11,400
Speaker 1: to your airs if you intend to. And like the

701
00:32:11,440 --> 00:32:13,080
Speaker 1: home specifically is just kind of like one of those

702
00:32:13,080 --> 00:32:15,680
Speaker 1: emotional things where I guess it depends on where you live.

703
00:32:15,680 --> 00:32:17,160
Speaker 1: You know, if you are living in a city and

704
00:32:17,160 --> 00:32:20,320
Speaker 1: it's much more trainsy, and your family isn't local, Well

705
00:32:20,320 --> 00:32:21,960
Speaker 1: maybe you don't care so much, but if you are

706
00:32:22,040 --> 00:32:25,240
Speaker 1: somewhere I don't know, was he in Oklahoma, But I

707
00:32:25,280 --> 00:32:27,000
Speaker 1: don't know. I picture like out in the more rural

708
00:32:27,040 --> 00:32:29,800
Speaker 1: setting and there's a family farm there spending a family

709
00:32:29,800 --> 00:32:32,000
Speaker 1: for generation, or like a home that I don't know,

710
00:32:32,040 --> 00:32:34,000
Speaker 1: a family member built and it's kind of been passed

711
00:32:34,040 --> 00:32:35,600
Speaker 1: down through the generations. That kind of thing. It's not

712
00:32:35,600 --> 00:32:37,080
Speaker 1: the kind of thing that you want to tap in

713
00:32:37,160 --> 00:32:38,720
Speaker 1: order to fund some of those later years, right, you

714
00:32:38,800 --> 00:32:41,360
Speaker 1: know what I'm saying. Okay, So Nate specifically asked about

715
00:32:41,400 --> 00:32:45,640
Speaker 1: nursing homes training assets, like is that a possibility? Well,

716
00:32:46,360 --> 00:32:48,040
Speaker 1: in some ways yes, but in other ways no, I

717
00:32:48,080 --> 00:32:50,080
Speaker 1: don't think not in the way that Nate intended it.

718
00:32:50,320 --> 00:32:53,280
Speaker 1: They can be really expensive with the way in which

719
00:32:53,320 --> 00:32:56,360
Speaker 1: I'm saying they can be asset trainers, because some predictions

720
00:32:56,400 --> 00:32:58,400
Speaker 1: are saying that in like twenty years, we'll be talking

721
00:32:58,400 --> 00:33:01,160
Speaker 1: about on average spending two one hundred thousand dollars a

722
00:33:01,240 --> 00:33:03,920
Speaker 1: year for the average nursing home facility. So to stay

723
00:33:03,920 --> 00:33:06,920
Speaker 1: in one for a year with a private room two

724
00:33:07,000 --> 00:33:09,480
Speaker 1: hundred grand. Does that include food, it's like an unlimited

725
00:33:09,480 --> 00:33:13,320
Speaker 1: buffet or like I think, well, yeah, of course INCLU food.

726
00:33:13,360 --> 00:33:16,120
Speaker 1: But like I'm sure we're gonna have more like robots

727
00:33:16,160 --> 00:33:18,200
Speaker 1: and stuff imported from Japan because think about that, they're

728
00:33:18,280 --> 00:33:20,040
Speaker 1: kind of going through that ahead of us. Hopefully we'll

729
00:33:20,080 --> 00:33:22,440
Speaker 1: learn a lot from that's actually a thing is yeah,

730
00:33:22,520 --> 00:33:24,560
Speaker 1: oh yeah, that's crazy. Yeah, robot's taking care of you.

731
00:33:24,800 --> 00:33:26,280
Speaker 1: I think we'll see more of that in the future too.

732
00:33:26,600 --> 00:33:28,360
Speaker 1: But the nursing home can't. And I think this is

733
00:33:28,360 --> 00:33:31,040
Speaker 1: what Nate was getting at. They can't drain your assets

734
00:33:31,080 --> 00:33:34,080
Speaker 1: without your permission, right. They can't like garnish your stock

735
00:33:34,120 --> 00:33:38,040
Speaker 1: portfolio or it starts selling stocks off, start selling positions

736
00:33:38,040 --> 00:33:40,200
Speaker 1: to pay for your care. But you know, if you've

737
00:33:40,200 --> 00:33:42,640
Speaker 1: been a good savor and investor, you're going to exceed,

738
00:33:42,720 --> 00:33:45,200
Speaker 1: kind of like you're talking about here, Matt. Eligibility requirements

739
00:33:45,240 --> 00:33:49,320
Speaker 1: for Medicaid. Every state, though, has different requirements, so familiarize

740
00:33:49,320 --> 00:33:51,400
Speaker 1: yourself with them. But if you're looking to if your

741
00:33:51,440 --> 00:33:53,440
Speaker 1: parents are thinking, well, Mendica, I've got Medicaid, I don't

742
00:33:53,440 --> 00:33:55,520
Speaker 1: need long term care insurance or I don't need to

743
00:33:55,680 --> 00:33:58,320
Speaker 1: pay attention to not spending down my retirement assets all

744
00:33:58,360 --> 00:34:00,520
Speaker 1: the way because Medicaid is going to care, it's going

745
00:34:00,560 --> 00:34:02,760
Speaker 1: to cover those costs. Was just not that simple or

746
00:34:02,800 --> 00:34:05,360
Speaker 1: easy most way too many people. Mat I looked up

747
00:34:05,360 --> 00:34:08,480
Speaker 1: at statistics something like forty six percent of people assume

748
00:34:08,800 --> 00:34:12,600
Speaker 1: that medicaid covers long term care for them. And again

749
00:34:13,000 --> 00:34:16,000
Speaker 1: for middle class folks, that's not the case. You're gonna

750
00:34:16,040 --> 00:34:18,080
Speaker 1: have to spend down your assets to make that happen.

751
00:34:18,400 --> 00:34:21,480
Speaker 1: You're gonna have to meet their resource limitation test. And

752
00:34:21,520 --> 00:34:24,239
Speaker 1: there are all sorts of like different nuanced ways to do.

753
00:34:24,400 --> 00:34:26,920
Speaker 1: It's really complex tackle that. It's very complex. Yeah, but

754
00:34:27,200 --> 00:34:30,200
Speaker 1: there's it's not like a fun process, no. Yeah. And

755
00:34:30,239 --> 00:34:32,799
Speaker 1: like you mentioned, spending down assets like your primary home,

756
00:34:32,880 --> 00:34:35,400
Speaker 1: it doesn't count as an asset under medicaid rules. And

757
00:34:35,440 --> 00:34:37,560
Speaker 1: so if you spent you know, two hundred thousand dollars

758
00:34:37,600 --> 00:34:40,560
Speaker 1: renovating that home in an attempt to spend that money down,

759
00:34:40,640 --> 00:34:43,879
Speaker 1: that's actually a strategy that some folks use. And then

760
00:34:44,040 --> 00:34:48,200
Speaker 1: like there's also these Medicaid complaint annuities that all that

761
00:34:48,600 --> 00:34:52,040
Speaker 1: being said, though, consider talking to an elder law attorney

762
00:34:52,280 --> 00:34:55,640
Speaker 1: in your state who specializes and medicaids strategy. This is

763
00:34:55,680 --> 00:34:59,280
Speaker 1: like a specific niche. It's a specific sort of branch

764
00:34:59,360 --> 00:35:02,120
Speaker 1: of law that I wasn't aware of up until recently.

765
00:35:02,200 --> 00:35:04,520
Speaker 1: It's like my cousin's a hand surgeon. Like there's all

766
00:35:04,560 --> 00:35:06,640
Speaker 1: sorts of surgeons, but she specializes in hands. And this

767
00:35:06,760 --> 00:35:09,799
Speaker 1: is like the same thing for attorneys, Like it's like

768
00:35:10,080 --> 00:35:13,000
Speaker 1: no elder law, but a medicaid specialist. Totally. Yeah. So

769
00:35:13,760 --> 00:35:15,799
Speaker 1: for you, Nate's you know, I hope this doesn't freak

770
00:35:15,840 --> 00:35:18,000
Speaker 1: you out, but it is another reason to be saving

771
00:35:18,040 --> 00:35:20,560
Speaker 1: and investing for your future. But what he's really asking

772
00:35:20,600 --> 00:35:23,400
Speaker 1: is what you already addressed, Joel. Like, it's not like

773
00:35:23,680 --> 00:35:25,920
Speaker 1: you owe money to a debtor and they've won a

774
00:35:26,000 --> 00:35:28,800
Speaker 1: judgment in a court of law and now they're gonna,

775
00:35:28,960 --> 00:35:31,520
Speaker 1: you know, garnish your paycheck. It's not like the federal

776
00:35:31,600 --> 00:35:33,640
Speaker 1: government coming after your four to one k because you

777
00:35:33,640 --> 00:35:35,560
Speaker 1: owe money to the irs. That kind of thing. Like,

778
00:35:35,600 --> 00:35:37,640
Speaker 1: none of this is actually going to happen, and I

779
00:35:37,719 --> 00:35:40,920
Speaker 1: think it's worth also having. I mean, hopefully this is

780
00:35:40,960 --> 00:35:43,319
Speaker 1: a conversation that you've already started, Nate, with your folks.

781
00:35:43,680 --> 00:35:45,319
Speaker 1: It is a conversation because it sounds like that they

782
00:35:45,320 --> 00:35:47,239
Speaker 1: asked you this but for everyone else out there, I

783
00:35:47,239 --> 00:35:48,920
Speaker 1: think it's worth having the conversation of what does it

784
00:35:49,000 --> 00:35:51,960
Speaker 1: look like for us to be a multi generational household.

785
00:35:52,000 --> 00:35:54,359
Speaker 1: I think it's highly underrated. And when we're talking about

786
00:35:54,360 --> 00:35:57,839
Speaker 1: the high costs associated with long term care, you kind

787
00:35:57,880 --> 00:35:59,440
Speaker 1: of alluded set at the beginning. I bet this is

788
00:35:59,480 --> 00:36:02,200
Speaker 1: a conversation you and cater having. We totally are. It

789
00:36:02,320 --> 00:36:04,400
Speaker 1: was a big reason why we were very comfortable with

790
00:36:04,440 --> 00:36:07,280
Speaker 1: putting a bedroom on the main level of our house

791
00:36:07,600 --> 00:36:10,080
Speaker 1: master around Maine. Dude, not because we're gonna need it

792
00:36:10,400 --> 00:36:12,319
Speaker 1: in the not too distant future, but maybe one of

793
00:36:12,360 --> 00:36:14,560
Speaker 1: our parents might be living with us at some point.

794
00:36:14,920 --> 00:36:17,520
Speaker 1: These are conversations like that we're literally in the middle of,

795
00:36:17,880 --> 00:36:19,960
Speaker 1: and once we get to a point to where where

796
00:36:20,000 --> 00:36:23,439
Speaker 1: we feel comfortable with the decision, I guess that we've made.

797
00:36:24,200 --> 00:36:26,160
Speaker 1: And maybe I'm saying this out loud as like accountability

798
00:36:26,200 --> 00:36:27,840
Speaker 1: to a certain extent, But I think it's important to

799
00:36:27,880 --> 00:36:30,000
Speaker 1: have these conversations with your parents because I think that

800
00:36:30,080 --> 00:36:33,200
Speaker 1: can alleviate some stress that they might be feeling as

801
00:36:33,200 --> 00:36:35,839
Speaker 1: they're looking ahead and thinking, well, how what if one

802
00:36:35,840 --> 00:36:37,600
Speaker 1: of us ends up in you know, and end up

803
00:36:37,600 --> 00:36:40,759
Speaker 1: in an assisted living home that kind of situation as

804
00:36:40,760 --> 00:36:42,719
Speaker 1: opposed to being like, hey, we got you, like we're

805
00:36:42,760 --> 00:36:44,799
Speaker 1: gonna take care of you. As a conversation I have

806
00:36:44,840 --> 00:36:47,480
Speaker 1: with your siblings too, if you have them, Yes, exactly, Yeah,

807
00:36:47,719 --> 00:36:49,680
Speaker 1: just to like divide and conquer a little bit, like, Okay,

808
00:36:49,800 --> 00:36:51,719
Speaker 1: what kind of situation are y'all in, Like, do y'all

809
00:36:51,719 --> 00:36:53,200
Speaker 1: have the ability to take this on? What do you

810
00:36:53,200 --> 00:36:55,719
Speaker 1: think five ten years from now? And obviously it's fluids,

811
00:36:55,800 --> 00:36:59,000
Speaker 1: it's dynamic, But I just like the idea of taking

812
00:36:59,040 --> 00:37:00,880
Speaker 1: some of that stress of them so that they can

813
00:37:00,920 --> 00:37:03,480
Speaker 1: focus on quality of life in the here and now,

814
00:37:03,560 --> 00:37:05,080
Speaker 1: as opposed to being like, well, we have to sock

815
00:37:05,120 --> 00:37:09,000
Speaker 1: this away for some unknown future that might you know,

816
00:37:09,120 --> 00:37:11,920
Speaker 1: that may or may not be something that we experience.

817
00:37:12,520 --> 00:37:15,120
Speaker 1: And there's also a fine balance between them, like I'm

818
00:37:15,120 --> 00:37:19,000
Speaker 1: not saying it for them to spend unwisely and foolishly, right,

819
00:37:19,000 --> 00:37:21,200
Speaker 1: because would it be nice for a parent to show

820
00:37:21,280 --> 00:37:23,080
Speaker 1: up with some assets to be able to like pitch

821
00:37:23,120 --> 00:37:26,239
Speaker 1: in towards household expenses. Sure of course, But I think

822
00:37:26,239 --> 00:37:28,440
Speaker 1: all of these situations are better had when there's an

823
00:37:28,440 --> 00:37:31,280
Speaker 1: open conversation that's taking place. Yeah, I mean, my grandma

824
00:37:31,760 --> 00:37:33,920
Speaker 1: is in her mid nineties. She's been living with my

825
00:37:34,000 --> 00:37:37,680
Speaker 1: parents first and then my uncle now recently for over

826
00:37:37,719 --> 00:37:39,920
Speaker 1: a decade. And then that's just involved a lot of

827
00:37:39,960 --> 00:37:43,520
Speaker 1: back and forth discussions between siblings, and I think conversations

828
00:37:43,520 --> 00:37:46,160
Speaker 1: that are probably hard but are probably so good. Yeah,

829
00:37:46,320 --> 00:37:49,160
Speaker 1: And so much comes down to like health, because even

830
00:37:49,200 --> 00:37:51,239
Speaker 1: in that if health took a term for the worst,

831
00:37:51,280 --> 00:37:55,760
Speaker 1: then things change, right or your flexibility to family values.

832
00:37:56,000 --> 00:37:57,799
Speaker 1: So just make sure that all those topics are on

833
00:37:57,800 --> 00:38:00,120
Speaker 1: the table you're discussing that so that you can and

834
00:38:00,400 --> 00:38:03,959
Speaker 1: eyes wide open, kind of march into the future as

835
00:38:04,040 --> 00:38:06,480
Speaker 1: your parents' age. But best of luck with that, Nate.

836
00:38:06,719 --> 00:38:08,880
Speaker 1: Matt We've got more to get to on this episode,

837
00:38:09,000 --> 00:38:12,040
Speaker 1: including index funds. Are they all created equal? Because it

838
00:38:12,040 --> 00:38:14,200
Speaker 1: sure seems like they might not be the same. One

839
00:38:14,239 --> 00:38:17,880
Speaker 1: listener's worried about the differences and performance between some of them.

840
00:38:17,920 --> 00:38:20,000
Speaker 1: We'll talk about that and more right after this.

841
00:38:27,960 --> 00:38:30,560
Speaker 5: All right, buddy, we're back from the break, and of

842
00:38:30,600 --> 00:38:32,759
Speaker 5: course now it is time for the Facebook Question of

843
00:38:32,760 --> 00:38:36,279
Speaker 5: the Week, which is from Matthew and he wrote, do

844
00:38:36,360 --> 00:38:40,080
Speaker 5: y'all keep your hobby fund money separate from emergency fund?

845
00:38:40,400 --> 00:38:42,400
Speaker 1: Basically, I buy and flip a ton of stuff to

846
00:38:42,480 --> 00:38:45,080
Speaker 1: fund my hobby. But it seems whenever I do this,

847
00:38:45,200 --> 00:38:47,839
Speaker 1: an unexpected bill comes up. I do have a nice

848
00:38:47,840 --> 00:38:50,239
Speaker 1: emergency fundhm. I like this question, you think, Jill. I

849
00:38:50,239 --> 00:38:52,279
Speaker 1: mean it sounds like Matthew is already doing the emergency

850
00:38:52,280 --> 00:38:54,880
Speaker 1: fund thing well, which is important, right. I like the

851
00:38:54,960 --> 00:38:57,960
Speaker 1: idea though, of kind of flipping stuff to fund a hobby,

852
00:38:58,360 --> 00:39:01,719
Speaker 1: a little side hustle. Actually it is keep it siloed. Yeah, yeah,

853
00:39:01,719 --> 00:39:04,160
Speaker 1: it's that mini side hustle to pay for things that

854
00:39:04,200 --> 00:39:07,400
Speaker 1: you might not otherwise have the funds for, right, Or

855
00:39:07,440 --> 00:39:09,000
Speaker 1: you'd have to cut back on other financial goal. So

856
00:39:09,080 --> 00:39:10,440
Speaker 1: let's say you're like, oh, no, I got to hit

857
00:39:10,440 --> 00:39:12,080
Speaker 1: that twenty percent savings rate, but I still want to

858
00:39:12,080 --> 00:39:13,960
Speaker 1: fund this hobby. I can't do both. Well, then you

859
00:39:14,040 --> 00:39:15,719
Speaker 1: got to find a way to make a little bit

860
00:39:15,719 --> 00:39:18,680
Speaker 1: of extra money. Or let's say you're prioritizing saving for

861
00:39:18,719 --> 00:39:21,120
Speaker 1: a down payment or maxing out your wrath Ira. You

862
00:39:21,120 --> 00:39:22,680
Speaker 1: don't have to cut back on those things because you're

863
00:39:22,680 --> 00:39:25,279
Speaker 1: finding another source to find the money so that you

864
00:39:25,320 --> 00:39:27,840
Speaker 1: can pay for that hobby. Whether it's like skiing, I

865
00:39:27,840 --> 00:39:29,640
Speaker 1: would say disc golf, but that's a really cheap one.

866
00:39:29,760 --> 00:39:31,120
Speaker 1: You don't really have to find much money to do

867
00:39:31,160 --> 00:39:33,440
Speaker 1: that one. But this is a great way, I think

868
00:39:33,480 --> 00:39:37,440
Speaker 1: to ensure that you're prioritizing something you care about without

869
00:39:37,480 --> 00:39:41,399
Speaker 1: sacrificing to wealth building necessities that we think people need

870
00:39:41,440 --> 00:39:43,960
Speaker 1: to be employing over the long haul. Totally. I think

871
00:39:44,000 --> 00:39:46,000
Speaker 1: a question I've got for Dan is like, what are

872
00:39:46,000 --> 00:39:49,680
Speaker 1: these what he calls unexpected bills that keep popping up?

873
00:39:49,840 --> 00:39:52,920
Speaker 1: Because if they're happening this frequently, like every time he

874
00:39:53,360 --> 00:39:55,759
Speaker 1: is looking to spend some money on his hobby, is

875
00:39:55,800 --> 00:39:59,160
Speaker 1: it possible to plan a little bit better for them,

876
00:39:59,239 --> 00:40:01,480
Speaker 1: or you know, like to put them into your regular budget.

877
00:40:01,640 --> 00:40:04,200
Speaker 1: Because there are true emergencies that come along, and that's

878
00:40:04,239 --> 00:40:06,799
Speaker 1: of course what your emergency fund is there for. But

879
00:40:06,840 --> 00:40:09,520
Speaker 1: we also find that some folks dip into the emergency

880
00:40:09,520 --> 00:40:12,080
Speaker 1: fund a bit too regularly because they haven't planned as

881
00:40:12,080 --> 00:40:15,239
Speaker 1: well as they could have for expenses that happen every

882
00:40:15,280 --> 00:40:18,239
Speaker 1: year or at the same time every month. Christmas that

883
00:40:18,280 --> 00:40:20,000
Speaker 1: comes around the same time every year. It's like not

884
00:40:20,040 --> 00:40:22,000
Speaker 1: a real emergency, but like they chalk it up to

885
00:40:22,040 --> 00:40:24,799
Speaker 1: an emergency because they didn't really have much foresight so

886
00:40:24,880 --> 00:40:27,520
Speaker 1: time about things coming up. Yeah, it just it takes foresight.

887
00:40:27,560 --> 00:40:29,719
Speaker 1: I like what you said there, and so as you're

888
00:40:29,719 --> 00:40:32,160
Speaker 1: looking at your budget just or maybe maybe maybe that's

889
00:40:32,200 --> 00:40:33,799
Speaker 1: the thing. Maybe he doesn't have a budget. But even

890
00:40:33,840 --> 00:40:35,680
Speaker 1: if you do have a budget, and let's say these

891
00:40:35,680 --> 00:40:39,399
Speaker 1: are expenses that haven't been accounted for, revise the dang thing,

892
00:40:39,440 --> 00:40:41,759
Speaker 1: because if some of those unexpected bills could be planned for,

893
00:40:42,200 --> 00:40:45,359
Speaker 1: then being able to rearrange like that is the solution here,

894
00:40:45,400 --> 00:40:48,320
Speaker 1: and it's going to help you to touch your emergency

895
00:40:48,320 --> 00:40:50,279
Speaker 1: fund a whole lot less as well to really for

896
00:40:50,360 --> 00:40:54,400
Speaker 1: it to be there for the true emergencies in your life. Right. Yes,

897
00:40:54,440 --> 00:40:57,680
Speaker 1: and you just mentioned tires briefly there. That's that's like

898
00:40:57,719 --> 00:41:00,279
Speaker 1: a great example of something that's coming down the road.

899
00:41:01,000 --> 00:41:04,799
Speaker 1: That's a good pun, right literally, go, they're balding as

900
00:41:04,880 --> 00:41:07,279
Speaker 1: we speak, right, and you need to be saving up

901
00:41:07,280 --> 00:41:09,200
Speaker 1: ahead for that expense and hopefully you can kind of

902
00:41:09,200 --> 00:41:11,040
Speaker 1: figure out, well, what's a usable life left, how much

903
00:41:11,040 --> 00:41:12,400
Speaker 1: is it going to cost me when I do replace

904
00:41:12,400 --> 00:41:14,279
Speaker 1: those things? And how much do I need to start

905
00:41:14,280 --> 00:41:16,120
Speaker 1: saving now to be prepared or it's the same thing

906
00:41:16,160 --> 00:41:18,080
Speaker 1: that happens every year around Christmas time. People are like,

907
00:41:18,400 --> 00:41:21,320
Speaker 1: oh crap, I think I'm gonna spend like nine hundred

908
00:41:21,360 --> 00:41:25,399
Speaker 1: dollars this December, and I didn't plan for that. It's

909
00:41:25,440 --> 00:41:27,439
Speaker 1: not an emergency, that's something that needs to be thought

910
00:41:27,480 --> 00:41:30,359
Speaker 1: of aut of time, and so should start that saving

911
00:41:30,440 --> 00:41:33,840
Speaker 1: in January? Right exactly? So should your hobby budget be

912
00:41:33,920 --> 00:41:36,440
Speaker 1: a line item in your budget? Well, it depends. I

913
00:41:36,440 --> 00:41:38,440
Speaker 1: think the reason to keep it separate would be to

914
00:41:38,480 --> 00:41:41,560
Speaker 1: incentivize you to keep making extra money to fund your hobby.

915
00:41:41,719 --> 00:41:41,879
Speaker 5: Right.

916
00:41:41,920 --> 00:41:43,560
Speaker 1: So, if you make less money in a given month,

917
00:41:43,719 --> 00:41:45,759
Speaker 1: you enjoy your hobby less. But if you make more,

918
00:41:45,800 --> 00:41:47,400
Speaker 1: you get to ramp it up and enjoy that hobby

919
00:41:47,400 --> 00:41:50,480
Speaker 1: even more, or at least bank more, so you can

920
00:41:50,560 --> 00:41:52,560
Speaker 1: keep it up longer. Right. So it makes me think

921
00:41:52,600 --> 00:41:54,680
Speaker 1: of a listener don't remember his name off the top

922
00:41:54,719 --> 00:41:57,400
Speaker 1: of my head. Matt was. I should know that, but

923
00:41:57,400 --> 00:41:59,880
Speaker 1: I don't remember. But he donates plasma to on vacation.

924
00:42:00,360 --> 00:42:03,719
Speaker 1: Ryan Kay Ryan Kay, okay, Ryan, You're the man. And

925
00:42:04,040 --> 00:42:06,040
Speaker 1: he still does this. Seems he's been doing this for many,

926
00:42:06,040 --> 00:42:08,359
Speaker 1: many years, and I think this is a great way.

927
00:42:08,400 --> 00:42:10,799
Speaker 1: It's similar to the way Matthew's thinking about it. It's

928
00:42:10,840 --> 00:42:14,520
Speaker 1: like I'm gonna go on a vacation up to the

929
00:42:14,600 --> 00:42:18,799
Speaker 1: level at which I bank money from donating that plasma, right,

930
00:42:19,040 --> 00:42:20,760
Speaker 1: And so the reason to include it in your budget

931
00:42:21,080 --> 00:42:22,560
Speaker 1: is to know that you'll get to enjoy it no

932
00:42:22,640 --> 00:42:24,960
Speaker 1: matter what, that the money's always going to be there

933
00:42:25,000 --> 00:42:28,520
Speaker 1: because you've set it aside. But the reason to not

934
00:42:28,560 --> 00:42:31,000
Speaker 1: do that is because I think it incentivizes you to

935
00:42:31,040 --> 00:42:33,319
Speaker 1: push the envelope on that side gig or on that

936
00:42:33,800 --> 00:42:36,400
Speaker 1: plasma donation side, hustle so that you so that you

937
00:42:36,480 --> 00:42:39,600
Speaker 1: actually have your INCENTIVI is to go make the money

938
00:42:39,760 --> 00:42:41,960
Speaker 1: to pay for the thing you want to do. Yeah, yeah,

939
00:42:42,080 --> 00:42:43,719
Speaker 1: I want to. I'll say a quick note. I know

940
00:42:43,840 --> 00:42:46,040
Speaker 1: not everybody out there is like super organized like some

941
00:42:46,080 --> 00:42:49,000
Speaker 1: folks love it. I myself, I just just yesterday spent

942
00:42:49,080 --> 00:42:52,719
Speaker 1: some time in Excel organizing some expenses, checking in on

943
00:42:52,719 --> 00:42:55,160
Speaker 1: the budget, seeing where things are landing this month. I

944
00:42:55,200 --> 00:42:56,879
Speaker 1: know for you that feels like one of those nice

945
00:42:56,880 --> 00:42:59,480
Speaker 1: heavy anxiety likes. Yes, I like, I like keeping tabs

946
00:42:59,480 --> 00:43:01,960
Speaker 1: on it. Man, not everybody. It's not their cup of tea,

947
00:43:02,280 --> 00:43:04,239
Speaker 1: you know, And that's totally fine, but you have to,

948
00:43:05,080 --> 00:43:08,160
Speaker 1: I guess account for that. And so while maybe for us,

949
00:43:08,719 --> 00:43:11,200
Speaker 1: because we've got all the different savings buckets set aside,

950
00:43:11,920 --> 00:43:14,360
Speaker 1: we've got three to six months worth of living expenses

951
00:43:14,400 --> 00:43:17,120
Speaker 1: in our emergency fund. If you have no buckets and

952
00:43:17,160 --> 00:43:20,360
Speaker 1: it's just this, I'm gonna call it the emergency slush fund.

953
00:43:20,400 --> 00:43:23,440
Speaker 1: How about that It's like this one big giant pile.

954
00:43:23,640 --> 00:43:25,080
Speaker 1: All the money just gets piled in there. I think

955
00:43:25,080 --> 00:43:26,719
Speaker 1: that's totally fine, But you just are gonna have to

956
00:43:26,719 --> 00:43:28,200
Speaker 1: have a little bit more. You're gonna have to have

957
00:43:28,239 --> 00:43:30,200
Speaker 1: more margin on hand to be able to account for

958
00:43:30,280 --> 00:43:32,600
Speaker 1: some of these things that otherwise you would have planned for,

959
00:43:32,680 --> 00:43:35,319
Speaker 1: but instead you're kind of drawing it from the emergency

960
00:43:35,680 --> 00:43:38,080
Speaker 1: slush fund, which I kind of like the more, I say,

961
00:43:38,600 --> 00:43:40,719
Speaker 1: But just get to another quick one. This is an

962
00:43:40,760 --> 00:43:43,880
Speaker 1: email from Dan and he wrote, if these funds, if

963
00:43:43,880 --> 00:43:45,680
Speaker 1: they're all tracking the S and P of five hundred,

964
00:43:45,760 --> 00:43:47,960
Speaker 1: which should be the same, how come there's a wide

965
00:43:47,960 --> 00:43:51,719
Speaker 1: difference between the performances. And he specifically he highlighted the

966
00:43:51,760 --> 00:43:55,520
Speaker 1: different returns between let's say, vou vanguards S and P

967
00:43:55,680 --> 00:44:00,960
Speaker 1: five hundred fund fx AIX, which is fidelities the actual

968
00:44:01,080 --> 00:44:03,279
Speaker 1: S and P. There's a lot of different funds out there,

969
00:44:03,360 --> 00:44:05,239
Speaker 1: But what do you have for Dan to chew on?

970
00:44:05,360 --> 00:44:07,640
Speaker 1: As he's considering these different options. Yeah, I mean this

971
00:44:07,680 --> 00:44:10,319
Speaker 1: is a good question, and I think if you do

972
00:44:10,360 --> 00:44:12,640
Speaker 1: look at the returns, you're going to see little idiosyncrasies

973
00:44:12,680 --> 00:44:14,920
Speaker 1: and you're gonna say, this is not the exact same thing.

974
00:44:14,960 --> 00:44:18,040
Speaker 1: What's happening there? And yeah, these funds are attempting to

975
00:44:18,120 --> 00:44:21,239
Speaker 1: mimic a specific index, but there are also just these

976
00:44:21,239 --> 00:44:24,920
Speaker 1: little idiosyncrasies that lead to slightly different results. The biggest

977
00:44:24,920 --> 00:44:26,879
Speaker 1: one is how much they cost to own, right, I'm

978
00:44:26,880 --> 00:44:30,000
Speaker 1: talking about the expense ratios at least in parts, but

979
00:44:30,080 --> 00:44:33,719
Speaker 1: also potential fees that some old school fund managers charge

980
00:44:33,719 --> 00:44:37,440
Speaker 1: to own those funds. And so, while costs have overwhelmingly

981
00:44:37,520 --> 00:44:40,400
Speaker 1: gone down for every day investor, specifically on index funds,

982
00:44:40,840 --> 00:44:44,279
Speaker 1: like Dan is highlighting, there are still some sperms using

983
00:44:44,360 --> 00:44:46,680
Speaker 1: the old playbook. They're feeding people to death. It's amazing

984
00:44:47,000 --> 00:44:50,520
Speaker 1: the price discrepancy between one S and P five hundred

985
00:44:50,560 --> 00:44:54,040
Speaker 1: fund the cheapest ones, and then another fund that mimics

986
00:44:54,040 --> 00:44:56,440
Speaker 1: the S and P. But it's within old school provider

987
00:44:56,640 --> 00:44:58,600
Speaker 1: who just charges norm and a leg still right, and

988
00:44:59,080 --> 00:45:02,040
Speaker 1: those costs eat into it could make one etf look

989
00:45:02,080 --> 00:45:04,600
Speaker 1: better than the other. The higher the fees, the greater

990
00:45:04,760 --> 00:45:07,759
Speaker 1: divergence from the index itself and then from other low

991
00:45:07,800 --> 00:45:10,040
Speaker 1: cost competitors. So that's at least that's at least one

992
00:45:10,120 --> 00:45:13,000
Speaker 1: reason that you might see more of a divergence there. Yeah. Yeah.

993
00:45:13,000 --> 00:45:16,840
Speaker 1: So for instance, let's take the case of VTI versus

994
00:45:17,040 --> 00:45:20,800
Speaker 1: f Z Rocks. So VTI is Vanguard's total stock market

995
00:45:21,320 --> 00:45:24,440
Speaker 1: ETF the other is offered by Fidelity. They're both attempting

996
00:45:24,480 --> 00:45:28,160
Speaker 1: to track the total stock market. VTI has a minimal

997
00:45:28,239 --> 00:45:31,520
Speaker 1: expense ratio, minimal cost. Fc Rocks well they charged nothing

998
00:45:31,960 --> 00:45:35,760
Speaker 1: but to pull that off. Fidelity they omitted some microcap

999
00:45:35,880 --> 00:45:40,080
Speaker 1: stocks from their fund in an effort to minimize costs

1000
00:45:40,200 --> 00:45:43,600
Speaker 1: on their end. But still the performance of both is

1001
00:45:43,680 --> 00:45:46,640
Speaker 1: quite similar. FC Rocks is up around ninety two percent

1002
00:45:46,680 --> 00:45:49,160
Speaker 1: over the past five years, and VTI it's right up

1003
00:45:49,160 --> 00:45:51,400
Speaker 1: there with it, but just a few percentage points below

1004
00:45:51,600 --> 00:45:53,799
Speaker 1: eighty nine or ninety something like that. I mean, it's like, yes,

1005
00:45:53,960 --> 00:45:56,000
Speaker 1: same ballpark is not too far off. They're probably both

1006
00:45:56,000 --> 00:45:58,400
Speaker 1: in left field, close to the fence, right. But yeah,

1007
00:45:58,440 --> 00:46:00,200
Speaker 1: And some of the reason too, why they at some

1008
00:46:00,239 --> 00:46:03,040
Speaker 1: of these different companies is just the way that they're

1009
00:46:03,080 --> 00:46:06,120
Speaker 1: structured as well ets are. They're just more tax efficient.

1010
00:46:06,440 --> 00:46:10,080
Speaker 1: Specifically when you are owning. If you've got let's say,

1011
00:46:10,160 --> 00:46:13,600
Speaker 1: an ETF versus a mutual fund within a brokerage account

1012
00:46:13,640 --> 00:46:16,640
Speaker 1: that's taxable, well, there are fewer taxable events that take

1013
00:46:16,680 --> 00:46:18,600
Speaker 1: place with an ETF, But if we're talking about in

1014
00:46:18,640 --> 00:46:21,520
Speaker 1: a retirement account, there's not much difference there because you

1015
00:46:21,560 --> 00:46:24,360
Speaker 1: don't actually realize those taxable events with it being tax deferred.

1016
00:46:24,520 --> 00:46:26,040
Speaker 1: I think, and this is a good question, Matt, but

1017
00:46:26,040 --> 00:46:28,800
Speaker 1: I think the ultimate reality for everyone out there listening

1018
00:46:28,920 --> 00:46:30,960
Speaker 1: is just don't get bogged down in the minutia. I

1019
00:46:30,960 --> 00:46:33,640
Speaker 1: think you could go in and you could research every

1020
00:46:33,800 --> 00:46:35,319
Speaker 1: S and P five hundred fund and you can say

1021
00:46:35,320 --> 00:46:37,440
Speaker 1: which one perform the best over the past five years,

1022
00:46:37,520 --> 00:46:39,520
Speaker 1: and then you can make your decision based on that.

1023
00:46:39,600 --> 00:46:42,200
Speaker 1: I think it's a bad idea. I think there's really

1024
00:46:42,200 --> 00:46:43,880
Speaker 1: one thing worth looking at, which is how much the

1025
00:46:43,920 --> 00:46:47,200
Speaker 1: funds costs to own, and whether they mimic closely enough.

1026
00:46:47,200 --> 00:46:49,799
Speaker 1: And so as long as the fund itself offers enough

1027
00:46:49,800 --> 00:46:53,120
Speaker 1: diversification to satisfy you don't worry about which S and

1028
00:46:53,160 --> 00:46:55,640
Speaker 1: P five hundred fund or which total stock market fund

1029
00:46:55,640 --> 00:46:59,319
Speaker 1: has done better. The performance over time really shouldn't very

1030
00:46:59,360 --> 00:47:02,759
Speaker 1: significantly targeting funds I think are a different story because

1031
00:47:02,800 --> 00:47:07,000
Speaker 1: the construction of those can vary pretty meaningfully from like

1032
00:47:07,120 --> 00:47:10,040
Speaker 1: Vanguard to Fidelity to like everybody has their own kind

1033
00:47:10,080 --> 00:47:13,719
Speaker 1: of proprietary formula. I think of like KFC that thirty

1034
00:47:13,719 --> 00:47:15,600
Speaker 1: seven herbs and spices, Like you got to use some

1035
00:47:15,600 --> 00:47:17,720
Speaker 1: different herbs and spices if you work at Church's Chicken

1036
00:47:18,040 --> 00:47:20,160
Speaker 1: and so they probably don't even call it rbs and

1037
00:47:20,200 --> 00:47:22,120
Speaker 1: spices because they don't want to compete with KFC on that.

1038
00:47:22,440 --> 00:47:24,840
Speaker 1: But they're going to look a little more different, Like

1039
00:47:24,840 --> 00:47:27,640
Speaker 1: the variation is going to be more significant, because the

1040
00:47:27,680 --> 00:47:31,120
Speaker 1: percentages of different things are going to change more significantly.

1041
00:47:31,920 --> 00:47:35,520
Speaker 1: But when it comes to I guess specific index trackers

1042
00:47:35,800 --> 00:47:38,120
Speaker 1: like an SMP or a total stock market that I

1043
00:47:38,120 --> 00:47:40,640
Speaker 1: would worry a whole lot less about those micro differences

1044
00:47:40,680 --> 00:47:43,680
Speaker 1: in outcomes. That's right, All right, Let's get back to

1045
00:47:43,719 --> 00:47:45,680
Speaker 1: the beer that you and I enjoyed, which was a

1046
00:47:45,800 --> 00:47:51,480
Speaker 1: bossy blonde, an Imperial blondale by contrast artists and ales.

1047
00:47:51,680 --> 00:47:54,200
Speaker 1: What did you think, buddy? So, in my mind, an

1048
00:47:54,200 --> 00:47:57,040
Speaker 1: Imperial blond feels like a unicorn, Like how often do

1049
00:47:57,080 --> 00:47:59,239
Speaker 1: you get your hands on kind of a specialty? Yeah,

1050
00:48:00,239 --> 00:48:03,879
Speaker 1: because blonds are typically just these super laxa daisical, laid

1051
00:48:03,920 --> 00:48:07,120
Speaker 1: back sort of beers that I think even non craft

1052
00:48:07,160 --> 00:48:10,239
Speaker 1: beer people can appreciate. But a bossy blonde, it's like,

1053
00:48:10,280 --> 00:48:12,880
Speaker 1: it's a serious blonde. Right, by the way, let's okay,

1054
00:48:12,880 --> 00:48:15,840
Speaker 1: so the artwork, because we're all they don't hear or

1055
00:48:15,880 --> 00:48:17,400
Speaker 1: they don't see what we're looking at. They just hear

1056
00:48:17,480 --> 00:48:20,920
Speaker 1: saying bossy blonde. But they've got the manager from office

1057
00:48:20,920 --> 00:48:24,040
Speaker 1: space standing there, you know, the Golden Retriever form. Yeah,

1058
00:48:24,080 --> 00:48:25,879
Speaker 1: the guy that's like, yeah, I'm gonna need those deep

1059
00:48:25,920 --> 00:48:29,319
Speaker 1: what the reports on my desk by this afternoon, and

1060
00:48:29,360 --> 00:48:31,000
Speaker 1: it's a Golden Retriever. I'm gonna need you to come

1061
00:48:31,000 --> 00:48:34,359
Speaker 1: in on Sundays. And he's said, yeah, I'm gonna need

1062
00:48:34,360 --> 00:48:38,279
Speaker 1: those biscuits on my desk by tomorrow. So I just

1063
00:48:38,280 --> 00:48:40,640
Speaker 1: don't want folks thinking that contrast is out there denigrating

1064
00:48:40,680 --> 00:48:43,440
Speaker 1: the blonde. That's true. That's all just the golden Golden

1065
00:48:43,440 --> 00:48:46,120
Speaker 1: Retrievers are in charge, right. I think blonds to me

1066
00:48:46,360 --> 00:48:49,280
Speaker 1: can be kind of black, but this one had more oop.

1067
00:48:49,480 --> 00:48:53,000
Speaker 1: So yeah, I really enjoyed it. Even though blonde is

1068
00:48:53,040 --> 00:48:54,759
Speaker 1: not a style and normally go to I think an

1069
00:48:54,760 --> 00:48:56,719
Speaker 1: Imperial Blonde might be one i'd be downe with. Yeah,

1070
00:48:56,719 --> 00:48:59,600
Speaker 1: it didn't like it's got no roasty flavors, it's got

1071
00:48:59,719 --> 00:49:03,960
Speaker 1: no dark, multi kind of flavors. It's got that loggery

1072
00:49:04,120 --> 00:49:06,719
Speaker 1: kind of blonde like flavor profile, but just bigger. It's

1073
00:49:06,800 --> 00:49:09,879
Speaker 1: just like a bigger, more serious version. It's chewy, it does,

1074
00:49:09,960 --> 00:49:11,719
Speaker 1: it's funny, it says something. You know, they're talking about

1075
00:49:11,719 --> 00:49:14,440
Speaker 1: dog biscuits, but it does almost have like a breakfast

1076
00:49:14,440 --> 00:49:17,200
Speaker 1: biscuity kind of flavor profile going on, but just kind

1077
00:49:17,200 --> 00:49:20,440
Speaker 1: of amplify it up in a serious way. That just

1078
00:49:20,440 --> 00:49:22,960
Speaker 1: makes this a bigger, in my opinion, more enjoyable beer

1079
00:49:23,080 --> 00:49:24,839
Speaker 1: for sure. I agreed yeah that you and I got

1080
00:49:24,840 --> 00:49:27,000
Speaker 1: to enjoy it during our episode today, And you can

1081
00:49:27,040 --> 00:49:29,560
Speaker 1: find our show notes up on the website at howtomoney

1082
00:49:29,600 --> 00:49:31,560
Speaker 1: dot com. We'll make sure to link to any of

1083
00:49:31,600 --> 00:49:34,720
Speaker 1: the resources we may have mentioned up there, for instance,

1084
00:49:34,719 --> 00:49:37,720
Speaker 1: the elder law attorney, We'll link to a site where

1085
00:49:37,800 --> 00:49:41,480
Speaker 1: you can find somebody locally who specializes in that. If

1086
00:49:41,480 --> 00:49:43,880
Speaker 1: you find, for instance, your parents in a situation like

1087
00:49:43,880 --> 00:49:45,719
Speaker 1: this where they're trying to find they're trying to be

1088
00:49:45,880 --> 00:49:48,920
Speaker 1: a bit more strategic about how they how they might

1089
00:49:49,000 --> 00:49:52,080
Speaker 1: qualify for something like Medicaid. Yeah but yeah again. You

1090
00:49:52,120 --> 00:49:53,920
Speaker 1: can find that at how to money dot com and

1091
00:49:54,080 --> 00:49:56,680
Speaker 1: so buddy, that's it. So until next time, Best friends out,

1092
00:49:56,800 --> 00:50:01,400
Speaker 1: best friends out U