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

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Speaker 1: and today we are answering your listener questions. Yeah, Joel,

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Speaker 1: We've got some great listener questions that we're gonna get

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Speaker 1: to today. We're gonna talk about paying off a zero

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Speaker 1: percent interest credit card. We're gonna discuss how much you

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Speaker 1: should set aside in your emergency fund for some housing repairs.

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Speaker 1: And we're also gonna cover what to do when inheriting

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Speaker 1: a four oh one K. Plus. We've got two other

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Speaker 1: listener questions that will just be a surprise, Yeah, surprise

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Speaker 1: listener questions. Yeah, Matt, before we get into the actual questions.

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Speaker 1: I'm completely fascinated by kind of something new ish happening

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Speaker 1: in the housing market. And they're called virtual appraisals or

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Speaker 1: desktop appraisals. I've heard of them, yeah, and like, I

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Speaker 1: love it because I don't know about you. Have you

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Speaker 1: ever been burned by an appraisal before where you knew

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Speaker 1: or really really strongly believed that your house was worth

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Speaker 1: something and then the appraiser came in and was like, yeah,

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Speaker 1: it's worth seventy thousand less than that. I do feel

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Speaker 1: that way, specifically when it came to a refundance that

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Speaker 1: I was doing, and I thought that the house was

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Speaker 1: definitely worth more than what he said it was. I

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Speaker 1: think it had a lot to do with the fact

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Speaker 1: that the backyard was thatched, like it was covered in Hey, okay,

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Speaker 1: and so let's kind of run down. I'm like, dude,

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Speaker 1: imagine if that was instead a beautiful green backyard, lush

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Speaker 1: green yard. Yeah. I feel like he was letting some

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Speaker 1: things that were maybe just on the surface kind of

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Speaker 1: maybe influence his decision. Yeah, And I think that's the

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Speaker 1: biggest downside when we're talking about humans doing appraisals, it

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Speaker 1: is human bias, right, Well, there's there's human bias. Is

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Speaker 1: often the person doing the appraisal, they could live forty

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Speaker 1: five minutes or an hour away from where you live,

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Speaker 1: that they might be unfamiliar with the neighborhood. And sometimes

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Speaker 1: the way comps are done, usually that appraiser is looking

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Speaker 1: at three comps in your area, and your area can

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Speaker 1: very street to street, especially where we live in town.

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Speaker 1: The value of our house is completely different than one

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Speaker 1: neighborhood over, but the appraiser or even like one block

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Speaker 1: over or even one blockover, and the appraiser might not

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Speaker 1: see it that way, they might say, you know what

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Speaker 1: this is, these are the comps I'm pulling, and then

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Speaker 1: they might not, at least in our opinion, be accurate comps. Yeah,

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Speaker 1: with the virtual or desktop appraisals, one of the ways

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Speaker 1: that they're getting a way better is that they're able

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Speaker 1: to look at hundreds of different houses. They're not just

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Speaker 1: looking at a few select homes. They're able to cast

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Speaker 1: a much wider net when it comes to finding the

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Speaker 1: value of your home. Yeah, and there's this specific company

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Speaker 1: called house Canary, and I'm just fascinating kind of about

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Speaker 1: what they're doing because, yeah, I've just had this these

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Speaker 1: run ins with the praisers where first off, they're really expensive.

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Speaker 1: An appraisal to do a refine can be four hundred

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Speaker 1: bucks maybe more or yeah, that's that's really affordable. Honestly,

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Speaker 1: I think I think in a lot of areas it's

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Speaker 1: closer to a thousand even. Yeah, it can be super

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Speaker 1: expensive to get a human to appraise at home, and

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Speaker 1: so it makes the cost of a refinance go up

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Speaker 1: because of that. And so a company like house Canary

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Speaker 1: who can do it for you know, a fraction of

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Speaker 1: the cost, and essentially their artificial intelligence, their ability to

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Speaker 1: pull a hundred comps in the area it to get

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Speaker 1: a more precise value for your home. I just love

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Speaker 1: that possibility, and I love that that's kind of coming about.

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Speaker 1: And the federal government actually just recently raised the purchase

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Speaker 1: price amount where you're allowed to use a desktop appraisal

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Speaker 1: as opposed to a human appraisal. So we're going to

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Speaker 1: see more and more of these things coming, and I

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Speaker 1: love the direction it's going. It's not gonna work in

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Speaker 1: all cases and in all circumstances, but I think these

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Speaker 1: things are going to be a game changer, and hopefully

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Speaker 1: more than anything, they're the lower prices for us as individuals,

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Speaker 1: for us trying to buy or refinance at home, it'll

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Speaker 1: lower the transaction prices that we incur. Yeah. One of

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Speaker 1: the benefits as well is that it happens faster, right,

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Speaker 1: You're like, you're not waiting for a week, you know,

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Speaker 1: before an appraiser is able to come out, Like it

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Speaker 1: happens instantly, and sometimes they want to come in the

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Speaker 1: house and then you've got to like find a time

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Speaker 1: that works with Yeah. And while that's great and all, like,

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Speaker 1: I don't care necessarily if it happens faster. I wanted

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Speaker 1: to be convenient and I want it to be cheap,

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Speaker 1: and this is a way accurate hopefully inaccurate as well. Well.

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Speaker 1: I mean that's one of the great things that you're

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Speaker 1: talking about the AI, Like they've trained the software and

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Speaker 1: programmed it to where it can recognize extra your features

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Speaker 1: like lot elevation and privacy and just all these other factors.

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Speaker 1: But based on good interior photos, it can see and

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Speaker 1: recognize finishes as well. Like they're talking how it can

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Speaker 1: recognize Grantite like grantit countertops. So guess what that desktop appraisal. Yeah,

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Speaker 1: it totally knows that you've got a nice kitchen and

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Speaker 1: they'll factor that in when it comes to putting together

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Speaker 1: a value for you. But I'm with you, man, I

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Speaker 1: love the fact that we're cutting costs and we're democratizing

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Speaker 1: the home buying or refinancing process. The technology is finally there.

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Speaker 1: I mean, I think when you look at kind of

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Speaker 1: the Zillos estimates, they're not quite there. They're trying to

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Speaker 1: get there, but it seems like this company, House Canary

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Speaker 1: and a couple other ones like it, they're pretty much

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Speaker 1: there with the technology and it works for home valuation

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Speaker 1: in most cases. So I'm interested to see where this goes.

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Speaker 1: We'll keep our eyes out and if big changes happen

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Speaker 1: or they become even more widely available, Matt will talk

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Speaker 1: about it again on the show. Right all right, but

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Speaker 1: let's mention the beer we're having today on this episode.

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Speaker 1: We're having Blair's Breakfast out and this beer was crafted

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Speaker 1: by Wilmington's Brewing Company. Yeah, this beer was actually gifted

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Speaker 1: to me at Christmas by my uncle, or specifically, I

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Speaker 1: should say my uncle in law. This is Kate's uncle.

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Speaker 1: They live in Wilmington's and he drew my name for

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Speaker 1: that extended family gift exchange secret Sannah, Yeah, exactly, and

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Speaker 1: he was wise and savvy enough to know that you

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Speaker 1: can't go wrong with a nice craft of beer. So

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Speaker 1: I wanted to share this one with you, buddy, awesome man.

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Speaker 1: Well thanks, I'm looking forward to having this one on

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Speaker 1: the show with you. We'll give our tasting notes at

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Speaker 1: the end of the episode. All right, but let's get

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Speaker 1: to our listener questions for today, Matt. For anybody out

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Speaker 1: there who's listening and they want to submit their question

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Speaker 1: to potentially be featured on the show, It's really simple.

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Speaker 1: Just go to how to money dot com slash ask.

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Speaker 1: It'll take you a minute or two at most to

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Speaker 1: submit your listener question via the simple directions there. And

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Speaker 1: the first one for today is about paying off a

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Speaker 1: zero present credit card. Hi man, Joel. My name is

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Speaker 1: Chelsea and I'm from originally in Virginia, but I moved

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Speaker 1: to Seattle about six and a half years ago. I

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Speaker 1: have a question about credit cards. I've definitely gotten myself

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Speaker 1: into a little bit of trouble and I am in

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Speaker 1: the process us of paying them off. I definitely am

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Speaker 1: a little embarrassed about how much I have accrued. Let's

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Speaker 1: just say that I paid off eight thousand dollars this

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Speaker 1: summer and I basically put into my credit card bills.

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Speaker 1: My question is, as I've moved some balance transfers around

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Speaker 1: so that I'm utilizing the zero percent introductory rate for

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Speaker 1: you know, ten months or a year, what have you

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Speaker 1: for my cards? Should I be trying to pay the

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Speaker 1: zero percent balance down on those cards or should I

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Speaker 1: be going towards the cards that have an interest rate

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Speaker 1: even though there's a deadline essentially on that zero percent

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Speaker 1: interest balance transfer. Love to know what you think. Love

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Speaker 1: the show. Thanks so much for hearing me out. Hey, Chelsea,

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Speaker 1: we are glad to hear that you are focused on

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Speaker 1: paying off that debt. Paying eight thousand dollars off last summer.

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Speaker 1: That is great, So don't beat yourself up about some

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Speaker 1: of those past mistakes that you've made. You're well on

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Speaker 1: your way to being rid of it now by essentially

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Speaker 1: paying off of your debt in one season, that's amazing. Like,

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Speaker 1: if you are able to continue at that pace, you

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Speaker 1: should be completely done with his debt within the next year.

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Speaker 1: That is a really good debt paid on pace. And also,

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Speaker 1: Chelsea had mentioned those zero percent transfers. If you're listening

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Speaker 1: and you don't know what those are all about, you

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Speaker 1: can read about those over at the website. Head over

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Speaker 1: to how to money dot com slash balance transfer and

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Speaker 1: you can learn how those work, as well as some

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Speaker 1: cards that we recommend. Yeah, Matt, you did a good job,

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Speaker 1: right and now one up buddy. All right, let's get

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Speaker 1: to some of the specifics of Chelsea's question, though, we

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Speaker 1: really would not recommend prioritizing paying on those zero percent

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Speaker 1: cards first. Instead, Chelsea, pay as much as you can

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Speaker 1: towards the cards that are currently charging you interest, as

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Speaker 1: this is going to cut the overall amount that's going

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Speaker 1: towards your interest, and it will ensure that more of

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Speaker 1: your money is tackling the principle of your debt. You

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Speaker 1: are taking advantage of some of those zero percent balance

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Speaker 1: transfer cards, WOUL, which is great. That means by default

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Speaker 1: you're subscribing to the avalanche debt payoff method, not the snowball,

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Speaker 1: which means you're focusing on the rates. And so while

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Speaker 1: you have zero percent period on lockdown, prioritize funneling all

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Speaker 1: of your money above the minimum payments towards the credit

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Speaker 1: cards that are currently charging your interest. Yeah, most definitely

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Speaker 1: continue to prioritize those interest rates above anything else. And

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Speaker 1: she'll see part of your desire to want to knock

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Speaker 1: out the debt on those zero percent cards that might

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Speaker 1: be due to a false sense of urgency. Right, it

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Speaker 1: might feel like you should since you can probably feel

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Speaker 1: the clock ticking as that zero percent period is winding down.

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Speaker 1: But even though there isn't a time constraint on your

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Speaker 1: other cards, they have something worse, which is higher interest.

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Speaker 1: And so even though it feels like you might have

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Speaker 1: forever to pay on those balances. In reality, you really

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Speaker 1: want to focus on those because of those increased payments

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Speaker 1: that are going towards interest. But the thing is, if

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Speaker 1: you do run out of time, you can still try

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Speaker 1: and transfer the balance again to another zero percent card

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Speaker 1: to buy yourself even more time. It's also probably a

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Speaker 1: great idea to make sure you're aware of what the

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Speaker 1: regular rates are going to be on those zero percent cards.

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Speaker 1: That way, if you do run out of time and

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Speaker 1: that and that introductory window does close and you're not

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Speaker 1: able to open a new card, at least be a

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Speaker 1: little more familiar of the a p R that you

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Speaker 1: will be paying. That might honestly kind of light a

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Speaker 1: fire under you to make sure that you knock out

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Speaker 1: that debt within that limited window. Yeah, Matt, one of

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Speaker 1: the things that helps people when they're attempting to do

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Speaker 1: a balance transfer is having a high credit score. So

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Speaker 1: hopefully Chelsea is maintaining a high credit score able to

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Speaker 1: and she's able to transfer that balance over to another

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Speaker 1: card that offers zero percent for an introductory window somewhere

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Speaker 1: between probably twelve and twenty one months, and with her

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Speaker 1: ability to pay it on this debt rather quickly from

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Speaker 1: what it seems I mean, I know she seemed a

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Speaker 1: little down on herself, but I think she can do

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Speaker 1: it yea quickly and pay very little interest in the process.

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Speaker 1: But I think it's another important thing to mention for

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Speaker 1: Chelsea and for other listeners who are in this position.

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Speaker 1: Once you've paid off all that credit card debt, it's

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Speaker 1: really really important to resolve to not get into that

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Speaker 1: position again. Focus on building up your emergen and see phone,

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Speaker 1: and try to mend your spending habits. If that's proving

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Speaker 1: to be difficult and you're having a hard time curbing

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Speaker 1: your behavior, remember remember that it's good for your credit

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Speaker 1: score if you don't close the account. But there's one

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Speaker 1: step you can take to actually make it harder for

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Speaker 1: you to spend, and that's kind of this old antiquated

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Speaker 1: way Matt of literally throwing your credit card in a

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Speaker 1: zip block bag full of water and tossing it in

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Speaker 1: your freezer. This isn't a credit freeze. This is a

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Speaker 1: credit card freeze. Very different, very different, but super necessary

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Speaker 1: if you have a hard time not spending when you've

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Speaker 1: got that credit card in your wallet or your purse. Right, Yeah,

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Speaker 1: essentially you're setting up a guardrail. You're creating a process

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Speaker 1: that essentially keeps you from spending the money that you

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Speaker 1: don't want to spend. I know, for us, we've never

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Speaker 1: actually put cards in the freezer before, but there have

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Speaker 1: been credit cards that we didn't want to spend on,

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Speaker 1: and so in that case we just cut the cards up. Right, Like,

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Speaker 1: the account still exists, but we don't have the plastic

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Speaker 1: in our wallet. I'm not attempted to spend on it

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Speaker 1: while I'm out, but then once a year I have

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Speaker 1: a reminder on my calendar to spend some money on

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Speaker 1: that car, just to make sure it stays active. That way,

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Speaker 1: the issuer doesn't close that account in this case, I'm

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Speaker 1: a little more methodical. But if you want to have

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Speaker 1: these additional lines of credit open so that it positively

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Speaker 1: affects your credit score, sometimes there are steps you need

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Speaker 1: to take, and for us, this is something that has

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Speaker 1: definitely worked for us. Yeah, Matt, Chelsea's well on her way.

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Speaker 1: I think she's got this debt handled in short order.

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Speaker 1: And those ballot transfer cards, they're just a good part

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Speaker 1: of that arsenal in kind of paying down your debt

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Speaker 1: even more quickly by paying less interest on it. All Right,

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Speaker 1: but we got a couple more questions, including one about

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Speaker 1: inheriting a four oh one K, and we'll get to

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Speaker 1: those right after the break. All right, Joel, we're back

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Speaker 1: from the break, and let's hear from a listener who

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Speaker 1: he and his wife man they are doing some amazing

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Speaker 1: things with their money. Hey, Joel and Matt. My name

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Speaker 1: is Joe from Minnesota, and I first wanted to thank

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Speaker 1: you for creating such a fun and relatable financial podcast.

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Speaker 1: While I'm recording this listener question, it felt only fitting

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Speaker 1: that I enjoy craft beer here myself. I have a

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Speaker 1: couple of questions, but first some context. My wife and

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Speaker 1: I recently finished paying off our mountain of student loan

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Speaker 1: debt and are in the midst of house hacking after

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Speaker 1: buying a duplex late last year. In our scenario, we

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Speaker 1: live in one unit and rent out the other. To date,

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Speaker 1: we have set aside all of our rent to build

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Speaker 1: up our emergency fund. We feel fairly comfortable with the

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Speaker 1: amount we have set aside, but we aren't sure how

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Speaker 1: much we really need. We have set aside enough to

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Speaker 1: cover any single major fix, such as if the heat

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Speaker 1: goes out or we need a new roof. Because we

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Speaker 1: are house hacking and have a responsibility to our tenant.

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Speaker 1: How much more should we be setting aside to account

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Speaker 1: for emergencies that may affect both us and our tenant.

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Speaker 1: Do we put enough in our emergency fund to cover

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Speaker 1: two major fixes or three? Is there some magic number

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Speaker 1: we need to save to or is it simply all

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Speaker 1: about mitigating whatever level of risk we're willing to take on.

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Speaker 1: Thank you guys, and keep up the great work. And

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Speaker 1: I hope you enjoy the beer I sent you. Cheers,

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Speaker 1: Joe Man, thanks so much. And by the way, we

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Speaker 1: loved the beer that was the King's that you sent along,

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Speaker 1: and we found out from you as well as from

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Speaker 1: a ton of other listeners. And are you idiots? How

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Speaker 1: do you not know? I did not know what Kingsue? Well,

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Speaker 1: Sue King Sue is, I guess the name of the beer,

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Speaker 1: But Sue is the name of the biggest I think,

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Speaker 1: or the largest Tyrannosaurs Rex specimen ever found. It's like

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Speaker 1: the most complete set of bones from a single Toyrannosaurs Rex,

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Speaker 1: which is pretty cool. And it's only sixty seven million

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Speaker 1: years old I found out, so pretty young, yeah, pretty young,

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Speaker 1: but yeah, it's super cool that I had no idea,

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Speaker 1: but really cool to see. I saw a picture of it,

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Speaker 1: I was like, this thing looks incredible. Yeah, pretty dope.

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Speaker 1: We gotta make a trip to Chicago, man and check

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Speaker 1: that out. It looks awesome. I was t Rex bones. Yeah.

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Speaker 1: Were you ever into dinosaurs as a kid, You know.

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Speaker 1: I feel like a lot of times kids go through

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Speaker 1: like a massive dinosaur phase. Sure, I don't think I

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Speaker 1: had a massive one, but just like every other kid,

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Speaker 1: I was into them for a little bit there. I

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Speaker 1: was really into like building, like connects and constructs or constructs.

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Speaker 1: I don't even know how you say it. It was.

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Speaker 1: It was like this building tool from the from the eighties.

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Speaker 1: It was different than like legos because like they had

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Speaker 1: like being aimes, but then also like pieces that attached

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Speaker 1: is way more like construction. Oh yeah, I know what

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Speaker 1: you're talking about, like gray little connectors and then like

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Speaker 1: the in between pieces were blue. I was rolling with

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Speaker 1: Lincoln logs, man, Lincoln loungs are fun. Yeah, they were cool,

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Speaker 1: not quite as advanced. Well, it's constructs and connects, man.

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Speaker 1: I just used to spend hours doing that and not

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Speaker 1: playing with dinosaurs. Yeah, well, all right, to each their own,

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Speaker 1: but big props to to Joe by the way, awesome

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Speaker 1: job paying off your student loans and your your house hacking.

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Speaker 1: I mean, he's crushing it. Yeah, what an amazing place

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Speaker 1: to be in. I mean this really in your marriage,

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Speaker 1: and I assume you're not, you know, in your fifties

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Speaker 1: and sixties. It sounds like you guys, you know, just

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Speaker 1: got married. Sounds like y'all just got the house. It

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Speaker 1: sounds like you're pretty early on your financial path. But

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Speaker 1: what a way to start, man, especially house hacking, to

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Speaker 1: be able to reduce their expenses that's going towards their

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Speaker 1: own housing by a significant amount. They may not even

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Speaker 1: be spending any money towards our housing. Dude. Yeah, that's

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Speaker 1: what house hacking can do, and it's amazing. That's why

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Speaker 1: we love it. But I think Joe brings up a

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Speaker 1: really good point here, man. It's not something we've talked

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Speaker 1: about very much. You know. We advocate for folks having

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Speaker 1: roughly a basic emergency fund. That's a good start for

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Speaker 1: most folks. It's a good it's a good number to

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Speaker 1: aim for if you don't have much money in your

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Speaker 1: bank account right now, and having a total of three

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Speaker 1: months of savings of the bank. Well, that's killer if

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Speaker 1: you're able to achieve that. But there are some circumstances

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Speaker 1: where you'll want even more money on hand. If you're

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Speaker 1: a landlord with aging properties, for instance, or have a

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Speaker 1: tenuous job position, or maybe if you have to like

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Speaker 1: some special health issues. Yeah, you want more cash on

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Speaker 1: hand to deal with the things that pop up in

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Speaker 1: those cases. But you can't really plan for everything, right,

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Speaker 1: and that's where insurance comes in, and so being properly

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Speaker 1: insured is crucial, especially as a landlord, and that insurance

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Speaker 1: is something that you really only want to use in

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Speaker 1: catastrophic scenarios. Like we're not fans of actually using the

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Speaker 1: insurance you have just having the insurance until it's actually needed.

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Speaker 1: But you really do need to have the money on

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Speaker 1: hand to cover a potential deductible. And you also want

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Speaker 1: to have the money on hand to fix the things

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Speaker 1: that pop up in your unit or your tenants unit.

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Speaker 1: And that's best done with money that is in a

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Speaker 1: savings account, and not just any old savings accountul a

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Speaker 1: high interest savings account, of course, And so it's helpful

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Speaker 1: to to take your specific property into account. Right. You

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Speaker 1: can ask yourself, is the roof old well if not,

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Speaker 1: you probably don't need to set aside, you know, seven

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Speaker 1: thousand dollars to replace it. Yet, even though you can't

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Speaker 1: predict the future, knowing the age of your systems and

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Speaker 1: different appliances that can help you assess your savings needs. Obviously,

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Speaker 1: newer systems means there's probably a less likelihood of them

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Speaker 1: breaking down, but creating a fund that you can contribute

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Speaker 1: to monthly that will help you to have a cash

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Speaker 1: on hand for when those systems do need repairs or

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Speaker 1: when they do need to be replaced. With you guys

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Speaker 1: banking all the rent from your tenant next door, I

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Speaker 1: don't think it's gonna take very long for you guys

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Speaker 1: to quickly arrive at a dollar amount that you do

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Speaker 1: feel comfortable with. And one thing I did want to

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Speaker 1: mention as well, Joe, is that let's assume you go

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Speaker 1: down the path of real estate, and maybe you do

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Speaker 1: acquire more properties. I think it's helpful if you set

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Speaker 1: aside an emergency fund for each specific property, because let's

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Speaker 1: assume maybe you have three properties down the road. You

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Speaker 1: might have a single pot of money and it could

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Speaker 1: seem like a lot of money. But let's let's say

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Speaker 1: in one year you replace three rous, well, that could

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Speaker 1: be twenty dollars right there, and your emergency fund is

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Speaker 1: completely wiped out. And so having you know, some separate

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Speaker 1: emergency fund accounts within your high interest savings can allow

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Speaker 1: you to kind of stay more organized and on top

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Speaker 1: of things. Yeah, and I think one helpful kind of

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Speaker 1: rule of thumb that it's not always you spot on,

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Speaker 1: but it can be helpful is estimate that you're going

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Speaker 1: to spend roughly one of the purchase price of your

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Speaker 1: home every year in repair costs. So if your home

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Speaker 1: costs two thousand, you'll likely spend roughly two thousand dollars

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Speaker 1: annually in repair costs on that home. Yeah, it might

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Speaker 1: be zero dollars this year and next year, but in

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Speaker 1: three years you might be dropping six grand. Yeah, it

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Speaker 1: just completely depends. But that's a nice rule of thumb

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Speaker 1: in most cases. If I were you, Joe, I'd also

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Speaker 1: consider opening up a helock, a home equity line of credit.

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Speaker 1: It's really the perfect fit for you because you might

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Speaker 1: need quick access to money, but it stinks to have

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Speaker 1: a heap of unnecessary cash around that you could be

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Speaker 1: funneling towards more investments. The helock can kind of split

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Speaker 1: the difference for you, and you won't pay interest unless

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Speaker 1: you actually draw down on it. I like these as

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Speaker 1: kind of a secondary reserve e fund that you try

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Speaker 1: not to tap, but it's better to be safe than sorry.

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Speaker 1: It's important that you have enough cash on hand to

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Speaker 1: easily cover likely maintenance needs, but a helock is kind

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Speaker 1: of this awesome backup to provide some peace of mind

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Speaker 1: in the unlikely case that let's say a hot water

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Speaker 1: heater and a furnace and a roof are all just

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Speaker 1: needing to be replaced in short order. That's when the

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Speaker 1: helock kicks in and it's really nice to happen. That's

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Speaker 1: like really crappy winner, right, that's a bad year. Um,

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Speaker 1: you know. I'll add to that, Joel. One of the

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Speaker 1: reasons they're so great is because typically there is very

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Speaker 1: little cost or no cost at all to set these

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Speaker 1: up with banks, and so they're really attractive from that standpoint.

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Speaker 1: But do remember that when you do use that money,

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Speaker 1: you are paying interest on it, so it's not like

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Speaker 1: it's completely free money. So a lot of this kind

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Speaker 1: of depends on how comfortable you are with that. I know, Joel,

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Speaker 1: Kate and I for pretty much our entire marriage, we've

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Speaker 1: always had pretty much three months worth of living expenses

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Speaker 1: set aside. But when we renovated our home, we dipped

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Speaker 1: into that a little bit or a lot, and that

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Speaker 1: put us in a position where we didn't have much

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Speaker 1: of an emergency fund. And dude, I did not like

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Speaker 1: that at all. Like it. It was interesting how it

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Speaker 1: made me feel. It just felt vulnerable. I mean, I

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Speaker 1: don't have a very stable job. Maybe it would be

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Speaker 1: different if I had a regular paycheck coming and all

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Speaker 1: the time. But I realized that part of the reason

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Speaker 1: we built that up was to account for some of

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Speaker 1: that risk that we experience on the income side of things.

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Speaker 1: And so yeah, that's something I learned about myself twelve

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Speaker 1: years into our marriage, which is crazy. So know that

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Speaker 1: it does come down a lot of times to you

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Speaker 1: as an individual. For us, we're building back up to

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Speaker 1: that three months now for sure, And with our apartment now,

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Speaker 1: we're actually going to maybe go a little over that

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Speaker 1: three months because I guess essentially, like we do kind

430
00:19:44,200 --> 00:19:46,199
Speaker 1: of have a duplex. The apartment's pretty small, so it's

431
00:19:46,280 --> 00:19:48,679
Speaker 1: kind of like a very lopsided of duplex. But but

432
00:19:48,760 --> 00:19:51,199
Speaker 1: there are some expenses that are going to be associated

433
00:19:51,200 --> 00:19:53,000
Speaker 1: with just the apartment that we need to make sure

434
00:19:53,040 --> 00:19:54,880
Speaker 1: that we account for. Yeah, and so much of it

435
00:19:54,920 --> 00:19:58,320
Speaker 1: is a level of comfortability, your own personal comfort level

436
00:19:58,600 --> 00:20:01,320
Speaker 1: with where your funds hands. And yeah, that's why I

437
00:20:01,320 --> 00:20:03,480
Speaker 1: think you want to have on hand enough to cover

438
00:20:03,600 --> 00:20:06,320
Speaker 1: most reasonable fixes you can expect to incur right over

439
00:20:06,320 --> 00:20:08,960
Speaker 1: the next year, and if you're particularly risk averse, you

440
00:20:08,960 --> 00:20:11,119
Speaker 1: won't even more than that. But then the helack can

441
00:20:11,119 --> 00:20:12,960
Speaker 1: be that perfect balancing act that you hope you never

442
00:20:13,000 --> 00:20:14,800
Speaker 1: have the tap. All right, Matt, let's get into our

443
00:20:14,800 --> 00:20:18,520
Speaker 1: next question, and it's about inheriting a four oh one K. Hi, guys,

444
00:20:18,800 --> 00:20:21,600
Speaker 1: my name is Cassandra, and I'm calling from Brooklyn, New York.

445
00:20:22,240 --> 00:20:25,840
Speaker 1: My father recently passed away and left me a four

446
00:20:25,920 --> 00:20:29,200
Speaker 1: oh one K and I'm wondering what the best way

447
00:20:29,280 --> 00:20:32,000
Speaker 1: to go about handling that is. I'm in my twenties,

448
00:20:32,040 --> 00:20:35,639
Speaker 1: so I would like advice on any tax applications that

449
00:20:35,720 --> 00:20:39,280
Speaker 1: sort of thing. Thank you, Hey, Cassandra, we are so

450
00:20:39,320 --> 00:20:41,920
Speaker 1: sorry for the loss of your dad and you are

451
00:20:41,960 --> 00:20:43,240
Speaker 1: now trying to figure out what to do with a

452
00:20:43,280 --> 00:20:45,399
Speaker 1: four one k. Um. What to do with it is

453
00:20:45,520 --> 00:20:49,399
Speaker 1: one question, and then the tax implications. That's another question

454
00:20:49,520 --> 00:20:52,120
Speaker 1: as well, and so let's go ahead and discuss the latter. First,

455
00:20:52,160 --> 00:20:54,719
Speaker 1: let's talk about taxes. When you inherit A four one K,

456
00:20:55,200 --> 00:20:58,360
Speaker 1: you are going to roll that money over into an

457
00:20:58,400 --> 00:21:02,159
Speaker 1: ira A upon actual inheritance, and you used to be

458
00:21:02,200 --> 00:21:05,800
Speaker 1: able to draw down on that inherited ira over your

459
00:21:05,960 --> 00:21:09,679
Speaker 1: entire life. But the new Secure Act that forces you

460
00:21:09,720 --> 00:21:13,040
Speaker 1: to actually liquid a all of your inheritance within ten years.

461
00:21:13,240 --> 00:21:15,800
Speaker 1: So the clock's ticking because of that, You'll want to

462
00:21:15,800 --> 00:21:19,320
Speaker 1: consider specifically what your current and what your potential future

463
00:21:19,359 --> 00:21:21,959
Speaker 1: income over the next ten years is going to be

464
00:21:22,600 --> 00:21:25,720
Speaker 1: when you choose to take distributions is going to impact

465
00:21:25,760 --> 00:21:28,879
Speaker 1: your income when you file taxes. So, for example, if

466
00:21:28,880 --> 00:21:30,560
Speaker 1: you know that the you know next year or two,

467
00:21:30,840 --> 00:21:33,160
Speaker 1: your income is going to be much lower, it might

468
00:21:33,200 --> 00:21:35,480
Speaker 1: make sense to take out an increased distribution that year,

469
00:21:35,680 --> 00:21:37,840
Speaker 1: you know what, Like if you're taking a gap year

470
00:21:37,920 --> 00:21:40,280
Speaker 1: or something like that and you basically have zero income,

471
00:21:40,520 --> 00:21:42,600
Speaker 1: it might make sense to withdraw all of that money

472
00:21:42,640 --> 00:21:45,000
Speaker 1: in that period if you know that after those couple

473
00:21:45,000 --> 00:21:47,480
Speaker 1: of years you're gonna launch into your professional career. Yeah,

474
00:21:47,520 --> 00:21:49,919
Speaker 1: so much. It depends on the amount of the inheritance

475
00:21:50,080 --> 00:21:52,639
Speaker 1: and kind of yea, what your pay structure is over

476
00:21:52,720 --> 00:21:55,879
Speaker 1: the coming decade, and then what should you do with

477
00:21:55,920 --> 00:21:58,720
Speaker 1: that money? Well, that's definitely another element of the equation.

478
00:21:59,040 --> 00:22:01,760
Speaker 1: And first we'll make sure you have your inherited ira

479
00:22:01,800 --> 00:22:04,480
Speaker 1: a with a low cost provider so that you're not

480
00:22:04,600 --> 00:22:07,760
Speaker 1: being eaten up with fees. You definitely don't want your

481
00:22:07,800 --> 00:22:11,399
Speaker 1: money to be slowly eaten away by the expensive fees

482
00:22:11,440 --> 00:22:14,800
Speaker 1: that a lot of investment companies charge. You might already

483
00:22:14,800 --> 00:22:17,080
Speaker 1: have a traditional or a roth ira a, but this

484
00:22:17,160 --> 00:22:19,400
Speaker 1: inherited one is going to be separate. And one way

485
00:22:19,400 --> 00:22:21,800
Speaker 1: that it's different is that you can't contribute any more

486
00:22:21,840 --> 00:22:24,520
Speaker 1: money to it. And what you do with this inheritance

487
00:22:24,560 --> 00:22:27,119
Speaker 1: really has so much to do with your own specific goals.

488
00:22:27,400 --> 00:22:29,800
Speaker 1: So I take some time think through, like what you

489
00:22:29,800 --> 00:22:31,679
Speaker 1: actually want to achieve in the coming years. Are you

490
00:22:32,000 --> 00:22:34,399
Speaker 1: saving for a house, well, depending on the amount, this

491
00:22:34,440 --> 00:22:36,560
Speaker 1: could help you with that down payment. Are you hoping

492
00:22:36,600 --> 00:22:39,000
Speaker 1: to start your own business, Well, you might not need

493
00:22:39,040 --> 00:22:41,560
Speaker 1: to go into debt to fund it. Generally speaking, we

494
00:22:41,560 --> 00:22:44,640
Speaker 1: would first recommend that you pay off any outstanding debts

495
00:22:44,640 --> 00:22:47,000
Speaker 1: that you have, especially higher interest rate debts like credit

496
00:22:47,000 --> 00:22:49,760
Speaker 1: card debts with an inheritance like this and then start

497
00:22:49,800 --> 00:22:53,440
Speaker 1: to invest before you start looking at these bigger picture goals.

498
00:22:53,640 --> 00:22:55,600
Speaker 1: But it's helpful to kind of put your whole financial

499
00:22:55,680 --> 00:22:58,160
Speaker 1: situation under a microscope so that you can see what

500
00:22:58,200 --> 00:23:01,000
Speaker 1: priorities exist. One of the biggest priority are in your

501
00:23:01,080 --> 00:23:05,359
Speaker 1: specific financial situation and the Cassandra, assuming that maybe you

502
00:23:05,400 --> 00:23:07,080
Speaker 1: are going to be taking that money out of those

503
00:23:07,080 --> 00:23:09,800
Speaker 1: accounts within the next few years, well, it doesn't make

504
00:23:09,840 --> 00:23:11,800
Speaker 1: sense to invest that money at all. We recently had

505
00:23:11,800 --> 00:23:15,160
Speaker 1: an episode where we talked about saving versus investing, and

506
00:23:15,480 --> 00:23:17,480
Speaker 1: if you're looking to take that money out and maybe

507
00:23:17,480 --> 00:23:20,120
Speaker 1: three to five years, essentially you just want to protect

508
00:23:20,119 --> 00:23:22,080
Speaker 1: that money and the best way you can do that

509
00:23:22,200 --> 00:23:25,320
Speaker 1: is by keeping it as cash within that inherited i

510
00:23:25,520 --> 00:23:27,879
Speaker 1: ra A. But if you know that it's gonna be

511
00:23:28,000 --> 00:23:30,760
Speaker 1: maybe seven to ten years, like if you're thinking it'll

512
00:23:30,800 --> 00:23:33,399
Speaker 1: be closer to a decade before you're gonna draw all

513
00:23:33,440 --> 00:23:35,680
Speaker 1: that money, it might make sense to put that money

514
00:23:35,760 --> 00:23:38,880
Speaker 1: into a conservative fund. I think like a target retirement

515
00:23:38,880 --> 00:23:41,359
Speaker 1: fund of twenty thirty could be a great spot for

516
00:23:41,400 --> 00:23:44,159
Speaker 1: you to definitely to to grow that amount a little bit,

517
00:23:44,160 --> 00:23:46,199
Speaker 1: but at the same time, you're not subjecting yourself to,

518
00:23:46,640 --> 00:23:49,080
Speaker 1: you know, the dramatic ups and downs of the market

519
00:23:49,440 --> 00:23:51,480
Speaker 1: if that money was going to be invested over the

520
00:23:51,520 --> 00:23:53,560
Speaker 1: course of the next you know, thirty years or something

521
00:23:53,600 --> 00:23:55,919
Speaker 1: like that. Yeah, for sure, that that timeline is is

522
00:23:55,960 --> 00:23:58,679
Speaker 1: so crucial to where you put the money inside of

523
00:23:58,680 --> 00:24:01,520
Speaker 1: that inherited I arra having it in stocks when you

524
00:24:01,520 --> 00:24:03,440
Speaker 1: need it in the next five years not a good idea.

525
00:24:03,880 --> 00:24:07,160
Speaker 1: And also we recommend to Cassandra that when you come

526
00:24:07,160 --> 00:24:09,520
Speaker 1: into a large chunk of money and inheritance, a big

527
00:24:09,560 --> 00:24:11,719
Speaker 1: bonus or a sale of some of your investments, that

528
00:24:11,800 --> 00:24:14,080
Speaker 1: you take a small portion, maybe five or ten percent,

529
00:24:14,160 --> 00:24:15,960
Speaker 1: and spend it in a way that you normally wouldn't

530
00:24:16,280 --> 00:24:18,680
Speaker 1: have fun with it. Think about the rest as kind

531
00:24:18,680 --> 00:24:21,000
Speaker 1: of that jump start towards achieving those bigger life and

532
00:24:21,080 --> 00:24:23,439
Speaker 1: investing goals that you may have. But a small portion,

533
00:24:23,720 --> 00:24:26,639
Speaker 1: and especially I think in the aftermath of of losing

534
00:24:26,680 --> 00:24:29,280
Speaker 1: someone that you love, using a portion of that money

535
00:24:29,520 --> 00:24:32,520
Speaker 1: in a way that is kind of adventurous and fun

536
00:24:32,840 --> 00:24:35,000
Speaker 1: I think can also provide some helpful closure at the

537
00:24:35,040 --> 00:24:38,120
Speaker 1: same time. Yeah, Joel, that's great advice man. And Cassandra,

538
00:24:38,160 --> 00:24:40,399
Speaker 1: it sounds like you you're asking all the right questions,

539
00:24:40,440 --> 00:24:42,479
Speaker 1: and so it sounds like you're gonna do some amazing

540
00:24:42,480 --> 00:24:45,200
Speaker 1: stuff without money. It sounds like you're gonna honor your dad. Well, so,

541
00:24:45,240 --> 00:24:46,840
Speaker 1: if we're talking about a small amount of money, this

542
00:24:46,920 --> 00:24:48,760
Speaker 1: is probably something you can do on your own. But

543
00:24:48,960 --> 00:24:52,000
Speaker 1: if you feel pretty intimidated by this entire process, because

544
00:24:52,040 --> 00:24:54,159
Speaker 1: this is a really large amount of money and you

545
00:24:54,160 --> 00:24:56,600
Speaker 1: don't feel comfortable with it, then we would most definitely

546
00:24:56,680 --> 00:24:59,080
Speaker 1: encourage you to check with the tax professional. That way,

547
00:24:59,160 --> 00:25:02,199
Speaker 1: you fully under nderstand all of the tax implications, that

548
00:25:02,240 --> 00:25:05,160
Speaker 1: you understand the tenure deadline, and that you're fully aware

549
00:25:05,320 --> 00:25:08,040
Speaker 1: of all the different ways that you could handle this money.

550
00:25:08,240 --> 00:25:10,360
Speaker 1: All right, Joe, We've got a couple more questions. We've

551
00:25:10,400 --> 00:25:13,600
Speaker 1: got one about life insurance, and we also have one

552
00:25:13,680 --> 00:25:16,200
Speaker 1: about living a life without a credit score. We'll get

553
00:25:16,200 --> 00:25:27,840
Speaker 1: to those right after the break. All right, Matt, we're

554
00:25:27,840 --> 00:25:30,119
Speaker 1: back in the break. We got two more questions. First

555
00:25:30,160 --> 00:25:33,680
Speaker 1: one about life insurance. Hey, guys, this is Josh from Illinois.

556
00:25:33,840 --> 00:25:36,600
Speaker 1: I have a question about whole life insurance. The way

557
00:25:36,640 --> 00:25:38,600
Speaker 1: it was pitched to me was that it's a backup

558
00:25:38,640 --> 00:25:41,320
Speaker 1: to your rath or four O n K. So if

559
00:25:41,359 --> 00:25:43,800
Speaker 1: the market is in a down year, you can borrow

560
00:25:43,840 --> 00:25:47,120
Speaker 1: against the insurance instead of taking money out of your retirement,

561
00:25:47,480 --> 00:25:49,840
Speaker 1: which would slow the growth potential in the upcoming years.

562
00:25:50,280 --> 00:25:52,960
Speaker 1: And since the insurance is also market based, the interest

563
00:25:53,000 --> 00:25:55,640
Speaker 1: from the amount invested in the policy helps to pay

564
00:25:55,720 --> 00:25:59,200
Speaker 1: back the loan. It seems like a good idea to me?

565
00:26:00,080 --> 00:26:03,680
Speaker 1: Or is there just better ways to do life insurance

566
00:26:03,720 --> 00:26:07,840
Speaker 1: and protect your retirement in the future. All right, Josh,

567
00:26:07,960 --> 00:26:11,119
Speaker 1: great question, And you know what, there's a key phrase

568
00:26:11,160 --> 00:26:13,399
Speaker 1: and what you said that really helped me kind of

569
00:26:13,520 --> 00:26:16,840
Speaker 1: understand what you're what's happening here, you said, wondering what

570
00:26:16,840 --> 00:26:19,280
Speaker 1: you're about to say, jel he said when it was

571
00:26:19,480 --> 00:26:23,160
Speaker 1: pitched to me, There you go. And whole life insurance

572
00:26:23,320 --> 00:26:26,960
Speaker 1: sounds nice in the pitch, but it's almost never the

573
00:26:27,000 --> 00:26:29,880
Speaker 1: best idea for people. The real reason for getting life

574
00:26:29,920 --> 00:26:33,280
Speaker 1: insurance is replacement of income, but in that pitch that's

575
00:26:33,320 --> 00:26:36,399
Speaker 1: something that rarely gets mentioned. You really only have a

576
00:26:36,480 --> 00:26:38,720
Speaker 1: need for whole life insurance if you are a high

577
00:26:38,760 --> 00:26:42,680
Speaker 1: income earner who has fully maxed out tax efficient retirement

578
00:26:42,720 --> 00:26:47,040
Speaker 1: and savings accounts. It also might potentially be beneficial if

579
00:26:47,040 --> 00:26:49,800
Speaker 1: you have a child with special needs. But whole life

580
00:26:49,800 --> 00:26:53,840
Speaker 1: insurance is just not a product best suited for most people. Yeah, Joel,

581
00:26:53,880 --> 00:26:56,960
Speaker 1: And so often whole life insurance plans that they are

582
00:26:57,000 --> 00:26:59,520
Speaker 1: sold as a way for you to protect your retirement,

583
00:26:59,520 --> 00:27:02,720
Speaker 1: almost as as a backup. Right, Just like Josh said, Well,

584
00:27:02,760 --> 00:27:04,679
Speaker 1: the best way that you can actually protect your retirement

585
00:27:04,720 --> 00:27:08,040
Speaker 1: and your investments is to invest more over time, not

586
00:27:08,280 --> 00:27:11,679
Speaker 1: spend more on an insurance policy that rath that you

587
00:27:11,720 --> 00:27:13,760
Speaker 1: mentioned that will give you some access to your money

588
00:27:13,840 --> 00:27:15,920
Speaker 1: if you need it in hard times. In Another way

589
00:27:15,920 --> 00:27:18,239
Speaker 1: that you can protect your retirement is to reallocate your

590
00:27:18,240 --> 00:27:20,840
Speaker 1: funds over time as you get closer to being in

591
00:27:20,880 --> 00:27:23,879
Speaker 1: the wealth preservation stage of your life. Yeah, and there

592
00:27:23,920 --> 00:27:26,040
Speaker 1: are better ways to do retirement, like you just mentioned map,

593
00:27:26,040 --> 00:27:28,640
Speaker 1: but there are also better ways to do insurance. So

594
00:27:29,000 --> 00:27:31,600
Speaker 1: the best way to do life insurance is to buy

595
00:27:31,600 --> 00:27:35,480
Speaker 1: a term life insurance policy. Whole life insurance typically cost

596
00:27:35,560 --> 00:27:38,760
Speaker 1: six to ten times more than a term policy every

597
00:27:38,760 --> 00:27:41,879
Speaker 1: month your premium, your cost for having that policy is

598
00:27:42,040 --> 00:27:43,840
Speaker 1: so much more with the whole life policy than it

599
00:27:43,920 --> 00:27:46,680
Speaker 1: is with the term And the person you're talking to, well,

600
00:27:46,720 --> 00:27:49,679
Speaker 1: they likely stand to make more in commissions by selling

601
00:27:49,680 --> 00:27:52,680
Speaker 1: you a whole life policy instead, a term policy makes

602
00:27:52,720 --> 00:27:55,520
Speaker 1: an insurance salesman almost no money, and it's why the

603
00:27:55,520 --> 00:27:58,640
Speaker 1: pitch tends to sound pretty good. Also, we're not fans

604
00:27:58,680 --> 00:28:01,480
Speaker 1: of combining insurance vehicles with investment vehicles. It tends to

605
00:28:01,560 --> 00:28:04,639
Speaker 1: drive up costs and fees, and it decreases transparency. It

606
00:28:04,680 --> 00:28:08,200
Speaker 1: also inhibits returns in the long run. So you can

607
00:28:08,200 --> 00:28:11,560
Speaker 1: protect your retirement by investing more of your money in

608
00:28:11,680 --> 00:28:14,639
Speaker 1: tax advantage retirement accounts, and then you can better protect

609
00:28:14,680 --> 00:28:17,760
Speaker 1: your loved ones by having a great term life policy

610
00:28:18,320 --> 00:28:21,000
Speaker 1: that you buy at a site like let's say, policy Genius,

611
00:28:21,119 --> 00:28:23,240
Speaker 1: and that site does a great job shopping the market,

612
00:28:23,480 --> 00:28:26,679
Speaker 1: giving you the lowest potential insurance costs, as opposed to

613
00:28:26,720 --> 00:28:30,199
Speaker 1: listening to an individual insurance salesman and hoping that they

614
00:28:30,200 --> 00:28:32,159
Speaker 1: have your best interest at heart. All right, gel, Our

615
00:28:32,200 --> 00:28:35,040
Speaker 1: next question is from a listener who will be graduating

616
00:28:35,080 --> 00:28:38,280
Speaker 1: from college later this year. Let's hear it. Hello, Joel

617
00:28:38,320 --> 00:28:40,200
Speaker 1: and Matt. My name is Austin Smith and I live

618
00:28:40,240 --> 00:28:43,200
Speaker 1: outside of Nashville and Murphy's Boro, Tennessee. I have been

619
00:28:43,200 --> 00:28:45,520
Speaker 1: listening to your podcast for a few weeks now and

620
00:28:45,640 --> 00:28:48,560
Speaker 1: enjoy it every afternoon. I turned twenty one on Monday,

621
00:28:48,640 --> 00:28:50,360
Speaker 1: and I know you guys enjoy a good beer. So

622
00:28:50,440 --> 00:28:52,840
Speaker 1: my first question is what is your favorite beer that

623
00:28:52,880 --> 00:28:55,360
Speaker 1: I can buy either at a brewery around the Nashville

624
00:28:55,360 --> 00:28:58,480
Speaker 1: area or at any of your local grocery stores. I

625
00:28:58,520 --> 00:29:00,760
Speaker 1: want to start my drinking life with the good alcoholic

626
00:29:00,840 --> 00:29:03,320
Speaker 1: drink that I will enjoy, and it's something much better

627
00:29:03,360 --> 00:29:06,680
Speaker 1: than Budweiser. I drink coffee and prefer it black, but

628
00:29:06,720 --> 00:29:08,560
Speaker 1: every once in a while I had a little cream

629
00:29:08,560 --> 00:29:11,240
Speaker 1: and sugar in there. I have started my working career

630
00:29:11,320 --> 00:29:15,040
Speaker 1: life and currently working full time while also in school.

631
00:29:15,320 --> 00:29:19,320
Speaker 1: I will graduate from MHSU in December debt free. Because

632
00:29:19,360 --> 00:29:21,800
Speaker 1: I have no debt. I also have no credit score.

633
00:29:22,160 --> 00:29:24,720
Speaker 1: My fiance has a great score in the seven hundreds.

634
00:29:24,760 --> 00:29:26,840
Speaker 1: So when we plan to buy a house, will you

635
00:29:26,880 --> 00:29:30,160
Speaker 1: plan on putting her name down? It's a primary besides beer.

636
00:29:30,400 --> 00:29:32,840
Speaker 1: My main question is what is the downfall in living

637
00:29:32,920 --> 00:29:35,760
Speaker 1: life without a credit score and a world where a

638
00:29:35,800 --> 00:29:38,880
Speaker 1: credit score is very important while also living the how

639
00:29:38,920 --> 00:29:42,000
Speaker 1: to money lifestyle? All right, Matt, First things first, on

640
00:29:42,040 --> 00:29:45,560
Speaker 1: Austin's question, Happy birthday to Austin. Yeah, let's talk about

641
00:29:45,680 --> 00:29:47,960
Speaker 1: his his beer needs before we address, you know, the

642
00:29:48,200 --> 00:29:51,280
Speaker 1: credit score thing, and he lives in Murphy's Borough. My wife,

643
00:29:51,280 --> 00:29:53,600
Speaker 1: by the way, also graduated from MTSU where he's soon

644
00:29:53,600 --> 00:29:55,320
Speaker 1: to graduate from. Oh no, I didn't know that. So

645
00:29:55,360 --> 00:29:57,120
Speaker 1: Austin and I we could be buds. Why did I

646
00:29:57,120 --> 00:29:58,920
Speaker 1: think she was in an l s U for some reason?

647
00:29:58,960 --> 00:30:00,760
Speaker 1: Well she did, she was there for work for a while,

648
00:30:01,440 --> 00:30:04,440
Speaker 1: but she actually graduated from Middle Tennessee. Blue Raiders, Baby

649
00:30:04,480 --> 00:30:06,560
Speaker 1: sweet right Blue Raiders. I think I just know that

650
00:30:06,560 --> 00:30:08,400
Speaker 1: they're really big in the music industry, Like, if you

651
00:30:08,440 --> 00:30:11,640
Speaker 1: wanna be a music producer, you basically go to school there. Actually,

652
00:30:11,720 --> 00:30:14,320
Speaker 1: someone I work with, radio producer, he he went there too.

653
00:30:14,360 --> 00:30:16,400
Speaker 1: They supposedly have a good education in radio as well.

654
00:30:16,440 --> 00:30:20,320
Speaker 1: I wonder what the podcasting program looks like. Probably getting there,

655
00:30:20,320 --> 00:30:22,520
Speaker 1: getting there, all right. So let's mention some of our

656
00:30:22,560 --> 00:30:26,200
Speaker 1: favorite Nashville Ish beers, because Murphy's Boro is outside of Nashville.

657
00:30:26,440 --> 00:30:29,760
Speaker 1: Austin Bearded Iris and Southern Grist are some of our

658
00:30:29,880 --> 00:30:33,240
Speaker 1: favorite Nashville area breweries. We've had great stuff from both

659
00:30:33,240 --> 00:30:35,880
Speaker 1: of those breweries on the show before, so definitely try

660
00:30:35,880 --> 00:30:37,680
Speaker 1: to get your hands on them for your birthday. Beer

661
00:30:38,000 --> 00:30:40,040
Speaker 1: and Matt It's funny Austin kind of mentioned how he

662
00:30:40,080 --> 00:30:41,880
Speaker 1: likes to take his coffee. Yeah. Well, I'm sure that

663
00:30:41,920 --> 00:30:44,160
Speaker 1: sounded completely random to our listeners. Right, yeah, but what

664
00:30:44,200 --> 00:30:46,040
Speaker 1: was that all about? But when you know kind of

665
00:30:46,040 --> 00:30:48,000
Speaker 1: how you take your coffee, it actually kind of helps

666
00:30:48,000 --> 00:30:49,680
Speaker 1: point you in the direction of what kind of beers

667
00:30:49,680 --> 00:30:51,840
Speaker 1: and wines that you like. Right. Yeah, well that's totally true,

668
00:30:51,880 --> 00:30:54,400
Speaker 1: and I'm sure it probably caught listeners off guard. Austin

669
00:30:54,440 --> 00:30:56,000
Speaker 1: actually asked about the beer and we got back to

670
00:30:56,120 --> 00:30:58,800
Speaker 1: him real quick asking how he did like his coffee. Uh,

671
00:30:58,800 --> 00:31:01,640
Speaker 1: and he shared that with of our listeners. Yeah, now

672
00:31:01,680 --> 00:31:03,560
Speaker 1: we know how Austin likes his coffee and so, but

673
00:31:03,560 --> 00:31:08,040
Speaker 1: but what sort of recommendations would you have for Austin

674
00:31:08,120 --> 00:31:09,960
Speaker 1: based on the way he drinks his coffee. Are there

675
00:31:09,960 --> 00:31:12,560
Speaker 1: specific beer styles he might like more than others? Yeah? Well,

676
00:31:12,600 --> 00:31:14,320
Speaker 1: I first want to mention too, that I didn't come

677
00:31:14,400 --> 00:31:15,840
Speaker 1: up with this on my own. I actually learned this

678
00:31:15,960 --> 00:31:19,040
Speaker 1: from the owner of a local craft beer store. Yeah,

679
00:31:19,080 --> 00:31:21,120
Speaker 1: let's give him some street Craig Craig over at hop

680
00:31:21,160 --> 00:31:23,120
Speaker 1: City Great Beer Store in Atlanta. Yeah, they've got some

681
00:31:23,160 --> 00:31:25,960
Speaker 1: fantastic selections and he knows how to help people find

682
00:31:26,000 --> 00:31:28,400
Speaker 1: their favorite beers, find find the beers that suit their

683
00:31:28,400 --> 00:31:30,960
Speaker 1: palette the best. Yeah, he actually did this exercise on me,

684
00:31:31,360 --> 00:31:33,000
Speaker 1: maybe one of the very first time I ever went

685
00:31:33,040 --> 00:31:35,400
Speaker 1: into the store. And so, Austin, you you mentioned how

686
00:31:35,440 --> 00:31:37,520
Speaker 1: you like your coffee black. Well, that tells me that

687
00:31:37,520 --> 00:31:40,720
Speaker 1: you can handle beers that have a little more bitterness. Specifically,

688
00:31:40,880 --> 00:31:42,680
Speaker 1: you might be able to handle some West Coast I

689
00:31:42,800 --> 00:31:45,040
Speaker 1: p a s because they tend to be a little

690
00:31:45,040 --> 00:31:47,680
Speaker 1: more bitter. But if you're a listener out there and

691
00:31:47,680 --> 00:31:49,760
Speaker 1: you don't like your coffee black and instead maybe let's

692
00:31:49,800 --> 00:31:52,479
Speaker 1: say you like tons of milk and tons of sugar

693
00:31:52,640 --> 00:31:55,360
Speaker 1: in your coffee, well, not only are you gonna want

694
00:31:55,360 --> 00:31:57,920
Speaker 1: a beer with maybe some more sweetness, but some more

695
00:31:57,960 --> 00:32:00,160
Speaker 1: body as well. So I'm thinking of like a big

696
00:32:00,160 --> 00:32:03,280
Speaker 1: old barrel aged Doubt, or even a nice balanced brown ail. Yeah.

697
00:32:03,280 --> 00:32:04,760
Speaker 1: I mean I think that's interesting. Man. I think so

698
00:32:04,800 --> 00:32:07,120
Speaker 1: many people listen to the show and they're not into

699
00:32:07,120 --> 00:32:09,240
Speaker 1: craft beer, and that's totally cool. We're welcoming. I mean,

700
00:32:09,280 --> 00:32:10,960
Speaker 1: we think you're wrong, but we're welcoming. We'd love to

701
00:32:11,000 --> 00:32:12,920
Speaker 1: have you here. And and so yeah, I think if

702
00:32:12,960 --> 00:32:15,200
Speaker 1: you are trying to figure out maybe what you want

703
00:32:15,200 --> 00:32:16,960
Speaker 1: to get into. If you're a wine I fish grenado,

704
00:32:17,240 --> 00:32:19,000
Speaker 1: you might want to try a sour get some of

705
00:32:19,000 --> 00:32:21,440
Speaker 1: that fruit. Yeah, exactly, And so yeah, there's all sorts

706
00:32:21,440 --> 00:32:23,200
Speaker 1: of ways that you can judge based on your palette

707
00:32:23,200 --> 00:32:24,800
Speaker 1: what sort of beer you might be into. All right,

708
00:32:24,800 --> 00:32:27,560
Speaker 1: but let's get to Austin's main question, and that is

709
00:32:27,760 --> 00:32:31,479
Speaker 1: about living life without a credit score. And I feel like,

710
00:32:31,640 --> 00:32:33,959
Speaker 1: by the way, because he lives outside of Nashville, he's

711
00:32:34,000 --> 00:32:36,880
Speaker 1: in Dave Ramsey country, and being debt free is a

712
00:32:37,000 --> 00:32:40,080
Speaker 1: high priority there. Dave calls a credit score, and I

713
00:32:40,120 --> 00:32:42,600
Speaker 1: love debt score. But really, Matt, we disagree with that.

714
00:32:42,640 --> 00:32:45,480
Speaker 1: We we think that a credit score has much further

715
00:32:45,560 --> 00:32:48,400
Speaker 1: reaching implications than just being able to like accrue some

716
00:32:48,440 --> 00:32:51,720
Speaker 1: more debt. It affects our finances in so many other

717
00:32:51,760 --> 00:32:55,120
Speaker 1: ways that we're not fans of living life without a

718
00:32:55,120 --> 00:32:58,240
Speaker 1: credit score. Yeah. One of those ways is your insurance rates.

719
00:32:58,240 --> 00:32:59,920
Speaker 1: They're going to be affected by your credit score, and

720
00:33:00,080 --> 00:33:03,360
Speaker 1: most states, insurance companies are allowed to set your insurance

721
00:33:03,400 --> 00:33:07,000
Speaker 1: premium based at least partially on your credit score. You

722
00:33:07,080 --> 00:33:09,840
Speaker 1: might be able to save hundreds of dollars every year

723
00:33:10,200 --> 00:33:12,880
Speaker 1: by having a good credit score instead of a poor

724
00:33:13,120 --> 00:33:16,160
Speaker 1: or even a non existent credit score. Also, your credit

725
00:33:16,200 --> 00:33:18,840
Speaker 1: will likely be checked when you're applying for an apartment.

726
00:33:19,160 --> 00:33:21,920
Speaker 1: You could easily freak out the potential landlord and lose

727
00:33:21,960 --> 00:33:24,720
Speaker 1: that apartment due to not having a credit score. At

728
00:33:24,800 --> 00:33:26,840
Speaker 1: or at a bare minimum, they might require you to

729
00:33:26,920 --> 00:33:29,560
Speaker 1: pay a higher security deposit. Yeah, and let's say Austin

730
00:33:29,600 --> 00:33:31,880
Speaker 1: applied to live at, you know, one of my rental

731
00:33:31,920 --> 00:33:33,920
Speaker 1: properties and I ran his credit and I saw that

732
00:33:33,960 --> 00:33:36,080
Speaker 1: he didn't have a credit score. I would be freaked out.

733
00:33:36,800 --> 00:33:38,880
Speaker 1: I would be like, there's like, what who is this guy?

734
00:33:39,160 --> 00:33:42,920
Speaker 1: And then Austin, being the cool, affable chap that he is,

735
00:33:43,200 --> 00:33:45,440
Speaker 1: he would probably try to explain to me, you know,

736
00:33:45,440 --> 00:33:48,120
Speaker 1: how he's living life without a credit score and how

737
00:33:48,160 --> 00:33:51,400
Speaker 1: good he is with money, and me, being a semi

738
00:33:51,600 --> 00:33:55,840
Speaker 1: understanding human being, I would I would probably potentially consider

739
00:33:55,880 --> 00:33:58,640
Speaker 1: Austin to live in my place. But most landlords and

740
00:33:58,760 --> 00:34:02,120
Speaker 1: most corporately owned apartment complexes, they're not going to be

741
00:34:02,160 --> 00:34:04,520
Speaker 1: nearly as understanding, and so a credit score is really

742
00:34:04,560 --> 00:34:07,320
Speaker 1: important in those cases. Also, Austin, when we're talking about

743
00:34:07,320 --> 00:34:09,719
Speaker 1: getting alone, you mentioned how you could buy a house

744
00:34:09,760 --> 00:34:12,319
Speaker 1: and potentially purchase it in your wife's name. But this

745
00:34:12,400 --> 00:34:15,399
Speaker 1: work around could lead to other issues. Assuming you'd want

746
00:34:15,440 --> 00:34:18,799
Speaker 1: to count both of your incomes when applying for the mortgage, well,

747
00:34:18,840 --> 00:34:21,840
Speaker 1: the lender will look to the lowest of your two scores,

748
00:34:22,280 --> 00:34:24,279
Speaker 1: and that could be a major hindrance to you buying

749
00:34:24,280 --> 00:34:26,960
Speaker 1: a house. A low or nonexistent score could keep you

750
00:34:26,960 --> 00:34:29,680
Speaker 1: guys from getting the best mortgage trade or potentially from

751
00:34:29,680 --> 00:34:33,160
Speaker 1: even qualifying at all. And one other potential downside of

752
00:34:33,400 --> 00:34:36,800
Speaker 1: living life without a credit score is if you're applying

753
00:34:36,800 --> 00:34:40,600
Speaker 1: for a job. Specifically, some government jobs will reject you

754
00:34:40,640 --> 00:34:42,640
Speaker 1: completely if you don't have a credit score, or if

755
00:34:42,680 --> 00:34:45,480
Speaker 1: you have a really low credit score. So credit scores

756
00:34:45,560 --> 00:34:48,600
Speaker 1: really are so much more than I love debt score.

757
00:34:48,840 --> 00:34:51,239
Speaker 1: They just have a high importance kind of in the

758
00:34:51,280 --> 00:34:55,440
Speaker 1: modern economy for us as individuals. Yeah, the credit score

759
00:34:55,440 --> 00:34:58,279
Speaker 1: tentacles work their way into lots of areas of our life. Yeah,

760
00:34:58,320 --> 00:35:00,000
Speaker 1: they do. And Joel, while we're talking about credit score,

761
00:35:00,080 --> 00:35:03,120
Speaker 1: let's talk about this new credit score model that's been

762
00:35:03,200 --> 00:35:06,759
Speaker 1: unveiled the company that develops the FICO score. They are

763
00:35:06,840 --> 00:35:09,920
Speaker 1: changing things up. Personal loans they have always been a

764
00:35:09,920 --> 00:35:12,799
Speaker 1: poor borrowing choice, but they're gonna affect you even more

765
00:35:12,880 --> 00:35:14,960
Speaker 1: negatively in the future. In Austin, he sounds like the

766
00:35:15,040 --> 00:35:16,239
Speaker 1: kind of guy who's not going to take out a

767
00:35:16,239 --> 00:35:18,560
Speaker 1: personal loan. But it's still important to note, Yes, those

768
00:35:18,600 --> 00:35:20,799
Speaker 1: personal loans will affect you negatively, even though I don't

769
00:35:20,800 --> 00:35:24,000
Speaker 1: think Austin will go that route. But late payments that

770
00:35:24,040 --> 00:35:26,160
Speaker 1: have happened in the past two years, those are also

771
00:35:26,360 --> 00:35:29,400
Speaker 1: going to negatively affect you more. Even though this is

772
00:35:29,440 --> 00:35:31,919
Speaker 1: all good to note, keep in mind that we have

773
00:35:32,320 --> 00:35:35,240
Speaker 1: a plethora of different credit scores that are being created

774
00:35:35,440 --> 00:35:37,879
Speaker 1: by the different credit bureaus and different companies out there,

775
00:35:38,040 --> 00:35:41,440
Speaker 1: so don't fret over changes to one specific score, especially

776
00:35:41,520 --> 00:35:44,160
Speaker 1: since it takes a while for companies to transition to

777
00:35:44,320 --> 00:35:47,960
Speaker 1: using the new scoring models. The general principles of maintaining

778
00:35:48,000 --> 00:35:51,560
Speaker 1: a solid, healthy credit score they're going to remain the same. Yeah, man,

779
00:35:51,600 --> 00:35:54,160
Speaker 1: I feel like your quick analogy earlier on was was

780
00:35:54,200 --> 00:35:56,919
Speaker 1: the best way of thinking about a credit score. It's

781
00:35:57,040 --> 00:35:59,279
Speaker 1: it's like an octopus that has these tentacles that seem

782
00:35:59,320 --> 00:36:02,120
Speaker 1: to kind of drift into all these areas of of

783
00:36:02,160 --> 00:36:03,960
Speaker 1: the way that we of the way that we currently

784
00:36:03,960 --> 00:36:06,719
Speaker 1: live life in this country, and for for better or

785
00:36:06,719 --> 00:36:08,960
Speaker 1: for worse right. Yeah, yeah, And having a good credit

786
00:36:09,000 --> 00:36:12,080
Speaker 1: score is a near essential part of modern human life.

787
00:36:12,120 --> 00:36:14,120
Speaker 1: And and I think it's okay for us to recognize

788
00:36:14,120 --> 00:36:16,719
Speaker 1: that it's a silly game that we have to play,

789
00:36:16,760 --> 00:36:18,560
Speaker 1: but it's one I think we would be silly to

790
00:36:18,719 --> 00:36:21,120
Speaker 1: not take part in. And so Austin, I hope that helps.

791
00:36:21,320 --> 00:36:23,880
Speaker 1: I think building up a solid credit score is going

792
00:36:23,920 --> 00:36:27,040
Speaker 1: to be beneficial to you for decades to come. So

793
00:36:27,120 --> 00:36:29,799
Speaker 1: I wouldn't ditch it all together. Know that it's an

794
00:36:29,840 --> 00:36:32,960
Speaker 1: important part of modern life. And it stinks, and it is.

795
00:36:33,000 --> 00:36:34,799
Speaker 1: It's kind of a weird game that we have to play,

796
00:36:34,800 --> 00:36:37,760
Speaker 1: but it's one that we should be playing. Yeah, Joel,

797
00:36:38,080 --> 00:36:41,399
Speaker 1: we live in a mad world. Cue the music. Oh wait,

798
00:36:41,400 --> 00:36:43,560
Speaker 1: we we don't have licensing for that, nor do we

799
00:36:43,600 --> 00:36:48,040
Speaker 1: actually have a producer. It's just you and me. But

800
00:36:48,080 --> 00:36:50,000
Speaker 1: if we did have a producer, they would be saying,

801
00:36:50,080 --> 00:36:51,759
Speaker 1: wrap it up, let's take it back to the beer.

802
00:36:52,080 --> 00:36:53,719
Speaker 1: So they would I will go ahead and say that, man,

803
00:36:53,760 --> 00:36:55,319
Speaker 1: let's take it back to the beer that we had

804
00:36:55,360 --> 00:36:59,080
Speaker 1: this episode, which was a Blair's Breakfast stouts. And I

805
00:36:59,080 --> 00:37:01,239
Speaker 1: will say, based on our tasting notes earlier, or are

806
00:37:01,320 --> 00:37:03,800
Speaker 1: coffee tasting notes. If you like a nice staindard coffee

807
00:37:03,800 --> 00:37:06,640
Speaker 1: with a normal amount of sugar, normal amount of cream,

808
00:37:06,680 --> 00:37:09,560
Speaker 1: I think you would be really into breakfast stouts. Joel,

809
00:37:09,600 --> 00:37:11,439
Speaker 1: what were your thoughts on this beer? Well, you said

810
00:37:11,520 --> 00:37:13,839
Speaker 1: normal amount of cream, normal amount of sugar. I don't

811
00:37:13,840 --> 00:37:15,759
Speaker 1: know what that is. Like, what is is that like

812
00:37:15,760 --> 00:37:17,600
Speaker 1: like a teaspoon? Okay, all right, that's what I do

813
00:37:17,600 --> 00:37:19,960
Speaker 1: at least, like my little mug of coffee at home.

814
00:37:20,000 --> 00:37:22,160
Speaker 1: I just get sick of spoons, just a leveled off,

815
00:37:22,160 --> 00:37:23,880
Speaker 1: small spoon of sugar. And for me, it's just a

816
00:37:23,880 --> 00:37:26,200
Speaker 1: little splash of whole milk. Okay, I'm whole milk, but

817
00:37:26,280 --> 00:37:28,880
Speaker 1: no sugar over here. A little creamy, but you like

818
00:37:28,920 --> 00:37:31,400
Speaker 1: get a touch a touch dry. Yeah, So all right

819
00:37:31,719 --> 00:37:35,359
Speaker 1: this beer in particular, man, I love when cold brew

820
00:37:35,440 --> 00:37:38,000
Speaker 1: season comes around, when it comes to coffee, and we're

821
00:37:38,000 --> 00:37:40,760
Speaker 1: getting really close to that, yeah, so you know, late spring,

822
00:37:41,000 --> 00:37:44,880
Speaker 1: I'm into that. And this really tasted to me like

823
00:37:44,920 --> 00:37:48,400
Speaker 1: a delicious beer version of a great cold brew. It

824
00:37:48,480 --> 00:37:51,040
Speaker 1: had those roasty coffee tones and kind of a nice

825
00:37:51,080 --> 00:37:54,200
Speaker 1: subtle sweetness to go along with it. So I really

826
00:37:54,200 --> 00:37:56,879
Speaker 1: like the mixture of breakfast outs that are well done,

827
00:37:57,040 --> 00:37:59,959
Speaker 1: are really really good, and man, this was a really

828
00:38:00,280 --> 00:38:02,560
Speaker 1: really good breakfast out. So it makes me excited about

829
00:38:02,640 --> 00:38:04,480
Speaker 1: late spring rolling around where I can fire up the

830
00:38:04,480 --> 00:38:06,840
Speaker 1: cold brew, except that you don't actually use fire to

831
00:38:06,880 --> 00:38:10,200
Speaker 1: make cold brew, because that's like the whole point. It's

832
00:38:10,200 --> 00:38:13,040
Speaker 1: super smooth. No fire, no heat would make me look

833
00:38:13,080 --> 00:38:15,600
Speaker 1: like an eaty, and no bitterness from the oils from

834
00:38:15,640 --> 00:38:17,239
Speaker 1: the coffee, right like in that in that how it

835
00:38:17,239 --> 00:38:19,440
Speaker 1: gets so smooth when you do cold brew, I think.

836
00:38:19,480 --> 00:38:21,480
Speaker 1: So I'm not really good at talking about a professional,

837
00:38:21,520 --> 00:38:23,640
Speaker 1: but those are my thoughts on that. Well, what I

838
00:38:23,680 --> 00:38:26,920
Speaker 1: liked about this beer, man were the darker chocolate flavors

839
00:38:26,960 --> 00:38:29,480
Speaker 1: that you got from those cocoa nibs, like they really

840
00:38:29,680 --> 00:38:32,360
Speaker 1: came through. And then as the beer warmed up, I

841
00:38:32,360 --> 00:38:34,480
Speaker 1: felt like it almost had this wet earthiness that was

842
00:38:34,520 --> 00:38:37,640
Speaker 1: sort of mixed in with those roasted coffee flavors. It

843
00:38:37,680 --> 00:38:40,200
Speaker 1: felt like a really grounded beer. I felt like I

844
00:38:40,280 --> 00:38:43,120
Speaker 1: was one with the earth as I drank this, And

845
00:38:43,560 --> 00:38:45,080
Speaker 1: you can, you know, definitely take some of those those

846
00:38:45,080 --> 00:38:48,279
Speaker 1: coffee notes in it as well, which got me thinking too,

847
00:38:48,560 --> 00:38:51,200
Speaker 1: do you know if there's actually any caffeine in breakfast outs?

848
00:38:51,280 --> 00:38:53,680
Speaker 1: Or any beer that includes coffee. That's a good question.

849
00:38:53,719 --> 00:38:55,359
Speaker 1: I don't know. I don't know either. I would think

850
00:38:55,400 --> 00:38:57,600
Speaker 1: a small trace amount, but I have no idea. Yeah,

851
00:38:57,640 --> 00:39:00,239
Speaker 1: well maybe sort of like our Toyrannosaurus Rex full path

852
00:39:00,320 --> 00:39:02,040
Speaker 1: that we did it with King Sue. If you're a

853
00:39:02,040 --> 00:39:03,799
Speaker 1: listener and you know the answer to that question, hit

854
00:39:03,880 --> 00:39:05,759
Speaker 1: us up because I actually don't know if there is

855
00:39:05,840 --> 00:39:08,319
Speaker 1: caffeine and breakfast stouts, and i'd like to know. Well,

856
00:39:08,320 --> 00:39:10,680
Speaker 1: you're gonna hear about it, but we will hear about it.

857
00:39:10,680 --> 00:39:13,160
Speaker 1: And I that's why I love our listeners, man. They

858
00:39:13,200 --> 00:39:15,759
Speaker 1: always let us know when we say something stupid or

859
00:39:16,320 --> 00:39:18,840
Speaker 1: we have no idea about something, they send off the emails. Man,

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00:39:18,880 --> 00:39:20,719
Speaker 1: they start commenting in the Facebook groups. See, it's great

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00:39:20,719 --> 00:39:22,440
Speaker 1: to have people watching our back. All right, Matt, that's

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00:39:22,440 --> 00:39:24,719
Speaker 1: gonna be it for this episode. And for anybody out

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00:39:24,760 --> 00:39:26,640
Speaker 1: there listening who wants the show notes for this episode

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00:39:26,680 --> 00:39:29,000
Speaker 1: or wants to see, you know, the recent articles we posted.

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00:39:29,280 --> 00:39:31,560
Speaker 1: Make sure to check out our website, how to money

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00:39:31,640 --> 00:39:33,640
Speaker 1: dot com, and you can do as a huge favor

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00:39:33,680 --> 00:39:35,960
Speaker 1: by heading over to Apple Podcast, where you can rate

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00:39:36,040 --> 00:39:38,560
Speaker 1: and review us. And you're not only doing a massive

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00:39:38,640 --> 00:39:40,600
Speaker 1: favor for us, but that's a favor for all the

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00:39:40,640 --> 00:39:43,400
Speaker 1: listeners out there who have not yet found our podcast

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00:39:43,480 --> 00:39:48,239
Speaker 1: All Humankind exactly, so we really appreciate that, Joel. That's

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00:39:48,280 --> 00:39:50,200
Speaker 1: gonna be it for this episode, man, Until next time,

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Speaker 1: Best Friends Out, Best Friends Out, m BO