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Speaker 1: Welcome to Hod of Money.

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Speaker 2: I'm Joel and I am Matt, and today we're talking

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Speaker 2: about forgotten five twenty nine's, abandoning insurance and wrecked credit reports.

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Speaker 1: That's right, everyone, This is our Friday flight and we're

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Speaker 1: going to talk about the most fascinating headlines this Friday.

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Speaker 1: Happy Friday to everyone out there. But yeah, these are

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Speaker 1: the stories that pertain to your personal finances the most.

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Speaker 2: If you don't listen, you won't know this stuff you

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Speaker 2: need to know this weekend. But no, what's this you

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Speaker 2: got to note here about something about the Burbs? Okay, So, yes,

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Speaker 2: we've moved to the Burbs almost two years ago. Not

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Speaker 2: the Arcade Fire album the Suburbs, No, although that was

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Speaker 2: a great album back in the day.

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Speaker 1: No.

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Speaker 2: I was thinking the other day about on how good

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Speaker 2: of a two years it's been overall being here.

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Speaker 1: Yeah.

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Speaker 2: The thing I miss the absolute most is great restaurants.

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Speaker 2: We have a dearth of those up here, although it's

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Speaker 2: getting better. There's some good restaurants, dude, there's some solid restaurants.

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Speaker 2: There's no great restaurants.

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Speaker 1: Or maybe one great one. Honestly, what I feel that's

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Speaker 1: lacking the most are good breweries, craft breweries because where

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Speaker 1: we used to be man, we had the best Monday

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Speaker 1: night inner Voice Halfway Crooks, which we got to go

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Speaker 1: back down and revisit recently.

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Speaker 2: So many good ones there and we don't have those here.

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Speaker 1: No we don't.

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Speaker 2: But one of the biggest downsides of moving to the

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Speaker 2: verbs that.

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Speaker 1: Recently let me guess, you miss your car getting rifled through.

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Speaker 2: No, now that.

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Speaker 1: You miss somebody's actually stealing your niece on leaf and

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Speaker 1: then kidnapping it and trying to extort Those are good days.

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Speaker 1: Those are good days. Have kept me on the edge

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Speaker 1: of my seat. It's been a minute since we talked

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Speaker 1: about that. I don't say that story for another time.

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Speaker 2: I like living in a weird place, so like I

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Speaker 2: missed some of the weirdness I do. But the biggest thing,

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Speaker 2: the thing that's like really kind of that I have

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Speaker 2: realized recently because on the Libby app we still had

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Speaker 2: our Fulton County Library access and now we don't anymore,

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Speaker 2: and so we only have the Cobb County Library access.

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Speaker 2: And guess what, the audiobook selection in there sucks. It's

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Speaker 2: so bad. I salivate thinking about all the books I

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Speaker 2: had access to for free before then. Now I've been

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Speaker 2: cut off from So he's that bad.

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Speaker 1: Here's a confession. I'm still logged in or at least

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Speaker 1: all on Hoopla, which is that you mentioned Libby. I've

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Speaker 1: recently been using Hoopla and I'm still logged in to

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Speaker 1: the city. Yeah, so they haven't reset. I was for

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Speaker 1: two years and then recently that got cut off. It

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Speaker 1: was because they don't know when you move. But then

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Speaker 1: they're like.

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Speaker 2: Hey, you actually need to update your account with new

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Speaker 2: with details and if you don't have if you don't

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Speaker 2: still live in the city, if you don't sell them

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Speaker 2: an address, they cut you off.

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Speaker 1: Man.

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Speaker 2: So I don't know how to remedy this kind of bummed.

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Speaker 2: So what I'm doing now is I'm actually paying for

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Speaker 2: more audio books sadly, but I don't think.

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Speaker 1: I mean, it's something that you value and it's not

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Speaker 1: necessarsarily like it's not like a craft beer equivalent. But

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Speaker 1: when there are books, especially the newer ones, that's what's

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Speaker 1: so difficult with the different library apps, is that you

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Speaker 1: are oftentimes in a really long line to hear or

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Speaker 1: read a good book.

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Speaker 2: So I'm testing out too right now Spotify and libro

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Speaker 2: dot fm because Spotify added the audiobooks to their plan.

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Speaker 2: That's twelve bucks a month and you get like fifteen

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Speaker 2: hours worth of listening. So I've realized it's best to

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Speaker 2: listen to your short books on Spotify because you won't

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Speaker 2: be able to get two two books in a given

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Speaker 2: month for that twelve dollars fee. Libro, I go there

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Speaker 2: for my longer audiobook needs because you limited by It's

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Speaker 2: not about time, it's about a credit. If I spend

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Speaker 2: one credit for a five hour book versus one credit

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Speaker 2: for a twenty.

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Speaker 1: Hour same as same as Audible.

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Speaker 2: Yeah yeah, so yeah, just word of the wise out there,

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Speaker 2: live in a city if you want access to a

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Speaker 2: larger audiobook selection from your library. But then then those

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Speaker 2: other two I think are good places to turn if

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Speaker 2: you're if you're an audiobook addict kind of like I am,

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Speaker 2: and they'll help you. They don't have every single book ever,

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Speaker 2: but they have a pretty good selection. And I don't

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Speaker 2: know if I'll keep both of those around for forever,

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Speaker 2: but for the time being, I'm I'm using them both.

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Speaker 1: See what sure works? What you what you got on

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Speaker 1: the docket for as far as books.

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Speaker 2: Okay, I'm about to listen to Glenn Lowry's memoir.

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Speaker 1: That's so funny. Yeah, I'm the same here. I'm really

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Speaker 1: interested in uh well.

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Speaker 2: It's it's the greatest American economists. And also his voice, Yes.

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Speaker 1: I'm excited about that as well, because he's got a

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Speaker 1: he's got a great voice.

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Speaker 2: And I just finished reading Knife by Samon Rushdie. Uh

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Speaker 2: the in just the first person account of being stabbed

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Speaker 2: seventeen times. It's just a terrible stage, but it's also

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Speaker 2: a beautiful story. Like it's crazy the way he tells it.

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Speaker 2: It's just I love hearing he talks about his relationship

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Speaker 2: with his wife and.

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Speaker 1: Just I don't know.

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Speaker 2: It's a good reflection on life post something traumatic happening.

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Speaker 1: So interesting. Highly recommend. I've been wanting to read Shop

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Speaker 1: Class as Soulcraft, which is like a book about it's

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Speaker 1: more of a philosophical book but about work, which I

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Speaker 1: feel like it's a you what was the second Mountain?

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Speaker 1: That was the day David Brooks that you read recently,

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Speaker 1: and that kind of got me thinking about work a

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Speaker 1: little bit. I'm like, you know what, I feel like

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Speaker 1: that would be a good way to approach the topic,

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Speaker 1: to help inform how it is that I'm thinking about

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Speaker 1: work these days, So let me know what you think

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Speaker 1: of that. I will let you know. But yeah, let's

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Speaker 1: move on to the Friday flight and let's get talking

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Speaker 1: about investing in specifically private equity within your retirement accounts.

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Speaker 1: This is something that's being pushed more and more around

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Speaker 1: the globe, and now some folks are advocating for it

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Speaker 1: here in the States. And it's not a great idea

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Speaker 1: in our book. And the biggest reason that private markets

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Speaker 1: are inherently more risky is because they aren't nearly as

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Speaker 1: transparent as public markets. Actually, friend of the Show, Alison Schreger,

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Speaker 1: she wrote about this this past week in Bloomberg and Dude.

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Speaker 1: Her most poignant line was, there is one golden rule

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Speaker 1: of investing. If someone tells you they can beat the

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Speaker 1: market without taking on more risk, you should not invest

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Speaker 1: in whatever they are selling the higher returns to become

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Speaker 1: agree more with more risk, right.

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Speaker 2: And if someone's trying to say you can have the

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Speaker 2: best of both or sorry, they're trying to yeah, you're

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Speaker 2: gonna get taken advantage of.

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Speaker 1: It was like a made off sort of set up.

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Speaker 1: Another front of the show, Nick Madjulie. We've had him

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Speaker 1: on the show as well, but he wrote about alternative investments,

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Speaker 1: with private equity being one of them. He wrote about

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Speaker 1: that on his blog and both writers came to a

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Speaker 1: similar conclusion. This is what Nick macjulie said. He said, Ultimately,

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Speaker 1: the key to building wealth isn't in any specific asset class.

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Speaker 1: It's in the power of consistent, disciplined investing over time.

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Speaker 1: It is the continual purchase of income producing assets. Music

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Speaker 1: come my years, Nick Man, it's just from time to time.

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Speaker 1: I think it's good for us just the let folks know.

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Speaker 1: We stick a flag in the sand to let folks

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Speaker 1: know how and where it is that we stand when

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Speaker 1: it comes to just different investments, because it's easy to

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Speaker 1: be distracted by all the latest and greatest, sexy things

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Speaker 1: that folks are talking about, the stuff that's making us

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Speaker 1: splash in the investment world. But it's not about that.

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Speaker 1: It's truly about investing consistently over the long haul. And

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Speaker 1: we've talked about this. There's whiskey wine, art, like all

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Speaker 1: these cool things, farm land, it's like, whoa, the world's

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Speaker 1: my oyster. I can invest in whatever I want, and

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Speaker 1: I can invest in things that I never would have

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Speaker 1: had access to ten years ago. Or my parents certainly

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Speaker 1: never had access to when it comes to investing. But

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Speaker 1: most of those things are actually going to lead you

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Speaker 1: astray from the path of building wealth, which that's the goal. Man.

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Speaker 2: It doesn't even have to be super exciting and actually boring.

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Speaker 2: Is often going to be low fie, easy to replicate.

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Speaker 2: It's going to allow you to stay the course over

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Speaker 2: time without getting distracted. Speaking of alternative there's a simple

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Speaker 2: path to wealth.

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Speaker 1: Which maybe will link to that book. Yes, somebody wrote

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Speaker 1: about that. I hear jail columns. Yeah, that's a good book.

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Speaker 2: And speaking of alternative investments, Matt, we've talked about Costco

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Speaker 2: selling gold bars. How popular that's been. You and I,

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Speaker 2: we just don't really see a need for gold inside

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Speaker 2: of your portfolio, especially physical bars in your home. It

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Speaker 2: can be a hassle. And guess what, it's easier to

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Speaker 2: lose your money if you're storing your investment under your mattress. Plus,

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Speaker 2: as the Wall Street Journal pointed out in an article

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Speaker 2: this week, the tax treatment on gold investments isn't great.

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Speaker 2: So gold is an especially poor investment for millennials and

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Speaker 2: gen Z folks, which is the vast majority of our audience. Well,

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Speaker 2: I think gold seems to have jump jumped the shark

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Speaker 2: too a little bit. Cookie company TIFFs Treats is now

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Speaker 2: selling gold bars too, So yeah, not only can you

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Speaker 2: buy some cookies. So I don't know how tasty their

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Speaker 2: cookies are. Have you had the TIFFs Treats cookies?

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Speaker 1: I have not.

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Speaker 2: I wonder if I bet they're delicious. But when you

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Speaker 2: buy cookies, you can also add on Fizzle gold to

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Speaker 2: your order, so you can get their Bullion bundle and

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Speaker 2: it's twenty five hundred bucks, right, you get a gold

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Speaker 2: bar with your twenty one dollars bucks of cookies.

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Speaker 1: It's yeah, normally cookies that cost like twenty dollars, but

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Speaker 1: if you want the special package, actually it costs like

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Speaker 1: substantially more. Yeah. So yeah. The worst part of this

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Speaker 1: is the fact that you don't actually get a gold

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Speaker 1: bar with your cookies.

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Speaker 2: They have to ship it severally. Yeah well, yeah, like

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Speaker 2: because it needs to be delivered with like an armored vehicle.

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Speaker 2: You get a certificate for it.

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Speaker 1: But I'm like, come on, if you're actually gonna take

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Speaker 1: like the Wonka approach, like there better be like a

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Speaker 1: gold bar like baked into a cookie where you run

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Speaker 1: the risk of like chipping your tooth like that sounds

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Speaker 1: like fun as opposed to like, oh, here's a piece

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Speaker 1: of make it a party, by the way, you're going

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Speaker 1: to get it? Like, no, you would, actually, I mean,

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Speaker 1: isn't that Part of the appeal of gold is actually

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Speaker 1: how it looks? But I thought that was silly that

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Speaker 1: that was like they're touting this but like they're not

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Speaker 1: even actually delivering.

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Speaker 2: It's a marketing thing gold bars, and with the cookies again,

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Speaker 2: it's this sort of sexy thing. It's like, oh, and

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Speaker 2: it's really weird that a company that makes cookies, whether

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Speaker 2: they're delicious or not, I don't know, but like that

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Speaker 2: they're now getting into this gold game and trying to

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Speaker 2: sell their customers an investment product. And yeah, I don't know,

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Speaker 2: No need to deep dive because I feel like we

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Speaker 2: talked about gold recently. But it's one of those things

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Speaker 2: where you're just like, what is going on here? Why

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Speaker 2: are desserts and investments being mixed up?

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Speaker 1: Right? But let's talk about higher ed specifically saving up

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Speaker 1: for higher education. Half of Americans don't know what a

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Speaker 1: five twenty nine plan is. And this is according to

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Speaker 1: a recent study done by Edward Owns and it's not

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Speaker 1: that they aren't like socking money into a five twenty

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Speaker 1: nine plan, They like literally don't know what those accounts do, and.

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Speaker 2: Those numbers put together, they're just like they blank face,

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Speaker 2: I don't.

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Speaker 1: Know what you're talking about. Yeah, well, speaking of numbers,

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Speaker 1: one third of the folks who were surveyed say they

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Speaker 1: were actively saving for their child's future, and so like

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Speaker 1: that just means many of them likely aren't doing it

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Speaker 1: as effectively as they could be. And so we wanted

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Speaker 1: to mention this because these accounts they've only gotten better

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Speaker 1: in recent years because you can use them. Well, first

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Speaker 1: of all, you can use them for K twelve expenses

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Speaker 1: if you so choose, right, Like, you don't necessarily even

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Speaker 1: have to wait for higher education if you.

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Speaker 2: Want your kid to go to private school or something

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Speaker 2: like that. Like, you can get a tax break in

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Speaker 2: most states by socking money into a five twenty nine

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Speaker 2: plan and.

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Speaker 1: Then have it and invest in the during during the interim.

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Speaker 2: Yeah, whereas back in the day used to be only

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Speaker 2: for college.

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Speaker 1: Right. But then on top of that, if you overfund

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Speaker 1: your five twenty nine account or your kids five twenty

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Speaker 1: nine account, you can turn those dollars into roth dollars

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Speaker 1: further down the line. And so if you have kids,

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Speaker 1: or if you play and even on going back to

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Speaker 1: school yourself, it's worth educating yourself about five twenty nine plans.

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Speaker 2: You don't want to be in the fifty percent of

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Speaker 2: people who know don't know what it is.

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Speaker 1: Yeah, we've got an article up on the site explaining

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Speaker 1: how it is that you can maximize all the different

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Speaker 1: benefits that five to twenty nine plans offer.

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Speaker 2: Yeah, and that our advice. The way we think about

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Speaker 2: five twenty nine plans has changed significantly in recent years

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Speaker 2: thanks to the greater levels of flexibility, and so yeah,

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Speaker 2: people would behoove themselves to at least know what five

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Speaker 2: twenty nine plans are and to see whether or not

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Speaker 2: it makes sense for them to participate in funding five

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Speaker 2: twenty nine plans for their kids or for even themselves. Like,

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Speaker 2: if you're planning on going back to get a graduate

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Speaker 2: degree maybe a few years from now, well it might

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Speaker 2: make sense to start funneling money into a five twenty

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Speaker 2: nine started investing growing that pie so that you have

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Speaker 2: so that it's easier to pay for that advanced degree totally.

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Speaker 1: But this also or even if you're gonna go get

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Speaker 1: that advanced degree like tomorrow, because the ability to fund

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Speaker 1: that account and then.

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Speaker 2: Pay directly out of that you still get that tax.

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Speaker 1: Braink, that's right.

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Speaker 2: Yeah, it's just greatbout it funnel through there. It's almost

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Speaker 2: like money laundering, but it's a legal form of it

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Speaker 2: because you're just getting an instant tax break for sticking

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Speaker 2: you know, like in the state of George at least

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Speaker 2: I think it's eight thousand dollars per beneficiary, and all

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Speaker 2: of that money that you stick in there just completely

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Speaker 2: avoids state taxes. But I will say this too, that

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Speaker 2: doesn't mean that we want everyone contributing to a five

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Speaker 2: twenty nine plan, right. There's a lot of nuance involved

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Speaker 2: in the decision, So even if you know what it is,

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Speaker 2: it doesn't mean that you should be participating. We still

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Speaker 2: think that most folks would be better off not saving

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Speaker 2: money for their child's future, which sounds like we don't

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Speaker 2: like kids or something like that, but that's not true.

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Speaker 2: Avoiding five twenty nine plans altogether can make sense for

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Speaker 2: a lot of folks, at least at least until their

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Speaker 2: own retirement has been diligently funded. Too many parents, Matt,

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Speaker 2: we run this all the time. They start to contribute regularly.

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Speaker 2: Lots of times it's done out of guilt, Like I

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Speaker 2: want to provide a great financial future for my kids,

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Speaker 2: I don't want them. I hear all these stories about

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Speaker 2: being saddled with student loan debt. I don't want my

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Speaker 2: kids to face that same fate. Feels like a selfless move, yeah, exactly.

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Speaker 2: But the problem is they're not even getting the full

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Speaker 2: match in their own four to one K, or they're

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Speaker 2: not maxing out their own roth IRA first. And if

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Speaker 2: you're not doing those things, then it doesn't make sense

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Speaker 2: to hop into five twenty nine plan investing for your

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Speaker 2: kid's future yet, right, I think those in particular are

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Speaker 2: two crucial steps to take before you even consider, before

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Speaker 2: it's even on your radar to think about making those

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Speaker 2: five twenty nine contributions.

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Speaker 1: Especially the four to one K match. But so oftentimes

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Speaker 1: we will talk about like the metaphor will use as

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Speaker 1: like the oxygen masks, And I was thinking through, all right,

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Speaker 1: let's let's come up with a different metaphor, maybe a

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Speaker 1: better metaphor perhaps, So imagine you've got a car and

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Speaker 1: it's low on gas, but it's also dirty and you're like, oh,

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Speaker 1: I need to go on a hot date. I want

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Speaker 1: to take care of both of those things. Got to

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Speaker 1: fill up the tank, and I also want to get

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Speaker 1: it cleaned up.

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Speaker 2: What if it's an EV in this scenario, I forget that.

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Speaker 1: Okay Joel's question, Well, you could go straight to the

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Speaker 1: car wash, because you're like, why go I get this

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Speaker 1: thing shined up? Like that would be nice, right, But

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Speaker 1: if you do that first, you're not gonna have the

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Speaker 1: ability to then go to the gas station and fill up,

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Speaker 1: which is going to derail your entire plan. And so

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Speaker 1: there is a specific order that you need to do this,

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Speaker 1: and you need to go to the gas station first,

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Speaker 1: get that thing filled up with gas, and then at

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Speaker 1: that point you can maybe you'll look around and say, yeah,

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Speaker 1: you know, I still want to go ahead and get

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Speaker 1: the car wash. Let's go to the Let's go to

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Speaker 1: the car wash first. Or here's here's the great part.

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Speaker 1: You might look around and say, you know what, the

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Speaker 1: car is not that dirty. Oh it's starting to rain.

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Speaker 1: It's not quite like a car wash. But like there's

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Speaker 1: an alternative, like something else has taken place that means

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Speaker 1: I no longer necessarily need to go to the car wash.

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Speaker 1: The equivalent there for higher education are like scholarships, because

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Speaker 1: it's kind of like, oh, this is not something I

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Speaker 1: was counting on happening, but in fact it did happen.

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Speaker 1: It's I'm not going to stretch the run with a

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Speaker 1: metaphor even further. But bottom line, the oxygen mask one

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Speaker 1: is a little simpler. I would say I like the

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Speaker 1: car one because everyone I don't know. I feel like

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Speaker 1: you can picture yourself thinking there are multiple goals that

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Speaker 1: you have. There are multiple things that you want to do,

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Speaker 1: but you got to take care of one before you

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Speaker 1: take care of the other one. And plus who has

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Speaker 1: actually had the oxygen masks drop down where you're like, oh, yeah,

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Speaker 1: there's that thing that I need to suck on. Like

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Speaker 1: everyone fills.

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Speaker 2: Up there on a plane and we've heard ad nauseam,

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Speaker 2: but we've we've unfolded the thing from the seatback.

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Speaker 1: You don't unfold it. You sit there and I don't

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Speaker 1: know who you are listen to your audio book, but

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Speaker 1: I have Yeah, I like those presentations. So whatever analogy

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Speaker 1: you prefer, run with that. But five twenty nine plans,

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Speaker 1: sure they've gotten better, and yes they can make sense,

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Speaker 1: and yes, we want people to know what they are,

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Speaker 1: but we also don't want people to over emphasize five

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Speaker 1: twenty nine plans to the detriment of their own retirement savings.

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Speaker 1: Let's talk about something else that's costing people money right now, Matt,

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Speaker 1: insurance has gotten significantly more expensive, and not only our

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Speaker 1: insurance rates climbing rapidly, but payouts on claims are diminishing too,

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Speaker 1: So basically the value proposition of having insurance has gone

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Speaker 1: down dramatically. We're talking mostly about homeowners insurance here, and

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Speaker 1: the question is for some people, Matt, they're like, this

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Speaker 1: has gotten prohibitively expensive. Maybe I should just ditch homeoders

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Speaker 1: insurance and risk it get a little risky. Well, more

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Speaker 1: people are choosing to do that, to ditch homeoders insurance altogether.

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Speaker 1: In twenty ninenineteen, only five percent of Americans had no

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Speaker 1: homeotors insurance at all. As of twenty twenty two, the

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Speaker 1: most recent figure we could find, that number rows to

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Speaker 1: twelve percent of Americans going without home motors and churnity

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Speaker 1: big increase.

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Speaker 2: A lot more people live in that risky, risky life

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Speaker 2: hoping that nothing bad happens to their home. My guess

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Speaker 2: is that number is only going to go up with

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Speaker 2: soaring premiums now. So I was the twenty twenty two number.

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Speaker 2: What are we going to see in twenty twenty four,

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Speaker 2: Probably a higher percentage of people going without. And by

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Speaker 2: the way, if you have a mortgage, you can't forego insurance.

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Speaker 2: Your lender is not down with that. They will find

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Speaker 2: any policy for you if you cancel yours. It's what's

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Speaker 2: known as forced placed insurance, and it's going to be expensive.

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Speaker 2: It's not going to be as cheap as what you're

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Speaker 2: able to find shopping the open market. So just know

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Speaker 2: that if you are someone with a mortgage still on

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Speaker 2: your home, what more and more Americans are doing, this

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Speaker 2: is something you cannot participate in. Sure, But I guess

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Speaker 2: if your mortgage is paid off, if you're one of

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Speaker 2: those few folks.

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Speaker 1: Like you have that option. Yeah, yeah, I see that

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Speaker 1: force placed insurance almost like Cobra insurance. It's like it's

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Speaker 1: really expensive, it's kind of crappy. Somebody else picked it

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Speaker 1: up for you, but you're still on the hook for it. Like, oh,

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Speaker 1: by the way, you still have to pay for this thing.

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Speaker 1: And here's a shocking stat but close to forty percent

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Speaker 1: of Americans own their home free and clear with no

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Speaker 1: mortgage debt at all, And so I think that's another

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Speaker 1: reason that we might continue to see this number increase

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Speaker 1: the number of folks who are choosing to forego homeowners insurance.

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Speaker 2: If I was asked for a guess before having known that,

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Speaker 2: I would have guessed something much lower like he.

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Speaker 1: I think I would have guessed like twenty percent or

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Speaker 1: less likely to be honest, Yeah, it's really hard to think.

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Speaker 1: It's amazing to think that four out of ten people

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Speaker 1: own their home outright. That boggles the mind. But even

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Speaker 1: if that is you, So the question is, should you

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Speaker 1: ditch your insurance policy when the bill gets jacked up? Well,

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Speaker 1: like it's a personal decision obviously, but it just depends.

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Speaker 1: I think it depends on a if you've got the

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Speaker 1: money to fix it, if you're willing to deal with

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Speaker 1: the consequences if something catastrophic occurs. If that's the case,

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Speaker 1: I think it could be worth the savings. But I

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Speaker 1: think most folks will to shop around for better rates.

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Speaker 1: They're gonna want to hold their nose and just pay

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Speaker 1: what they owe because not having any coverage on your home,

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Speaker 1: I think that just presents too big of a financial

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Speaker 1: risk for most folks who are listening to how Money.

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Speaker 1: At least most folks.

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Speaker 2: Just can't stomach it financially or mentally, like realizing, I

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Speaker 2: don't have many coverage on this thing, and if the

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Speaker 2: worst thing happens, if God forbid, a fire happens in

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Speaker 2: my home or something like that, or it makes me

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Speaker 2: think of my neighbor across the street, a fantastic dude.

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Speaker 2: He has a second home down in Florida, and his

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Speaker 2: home got smashed by a hurricane, like completely wiped out.

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Speaker 2: And that's the risk you run in the state of Florida.

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Speaker 2: And guess what, Florida is one of those states where

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Speaker 2: insurance rates are incredibly high for homeowners. And so he

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Speaker 2: had gone without self insuring. But he made a calculated decision.

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Speaker 1: He had the money to rebuild, the money during the interim.

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Speaker 2: That's exactly what he was doing. And so he was

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Speaker 2: hoping that day never came. But the day did come,

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Speaker 2: and he was mentally and financially prepared it for him.

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Speaker 2: But a lot of folks, Matt, I think, who are

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Speaker 2: that twelve percent of people who are going without homeowners insurance?

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Speaker 2: They're not prepared on either FOW and so it's a

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Speaker 2: big risk and maybe the thing you want to do

434
00:19:07,320 --> 00:19:10,840
Speaker 2: instead is raise your deductible and keeping homeowners insurance around

435
00:19:10,880 --> 00:19:13,760
Speaker 2: just be paying less for it and have ye more

436
00:19:13,760 --> 00:19:16,080
Speaker 2: of your own money at risk if something happens, but

437
00:19:16,200 --> 00:19:16,840
Speaker 2: not all of your money.

438
00:19:16,880 --> 00:19:18,520
Speaker 1: Find a way to pay less every single month. But like,

439
00:19:18,560 --> 00:19:20,680
Speaker 1: you got to be really buttoned up, Like you need

440
00:19:20,680 --> 00:19:23,679
Speaker 1: to be someone I think who's incredibly detail oriented, like

441
00:19:23,720 --> 00:19:26,840
Speaker 1: who might like borderline paranoid in order for that to

442
00:19:26,880 --> 00:19:30,240
Speaker 1: make even more sense, right, Like, cause if you're someone

443
00:19:30,240 --> 00:19:32,040
Speaker 1: who's just like, ah, if you're just winging it and

444
00:19:32,080 --> 00:19:34,840
Speaker 1: you're like, it'll probably be fine, well no, it kind

445
00:19:34,840 --> 00:19:36,280
Speaker 1: of just comes down to you. So you need to

446
00:19:36,320 --> 00:19:38,760
Speaker 1: know whether like it's black or white. You know. And

447
00:19:39,240 --> 00:19:43,720
Speaker 1: granted you can't plan for and mitigate all risks, but

448
00:19:44,320 --> 00:19:46,879
Speaker 1: this is more of an approach where you do need

449
00:19:46,920 --> 00:19:49,119
Speaker 1: to have things figured out. Like you know, you kind

450
00:19:49,119 --> 00:19:50,840
Speaker 1: of talked about fire, like, okay, you need to have

451
00:19:50,880 --> 00:19:54,240
Speaker 1: like a fire extinguisher in like every room. Maybe like

452
00:19:54,280 --> 00:19:57,040
Speaker 1: when you had some electrical work done, you're probably gonna

453
00:19:57,040 --> 00:20:01,560
Speaker 1: go with the electrician who seems like even more I

454
00:20:01,560 --> 00:20:03,879
Speaker 1: don't know, insure someone who's not like cutting corners, you know,

455
00:20:04,040 --> 00:20:07,480
Speaker 1: like everything needs to be bulletproof essentially, in my opinion,

456
00:20:07,840 --> 00:20:09,119
Speaker 1: in order for this to be a risk that I

457
00:20:09,119 --> 00:20:10,560
Speaker 1: would be willing to accept.

458
00:20:10,640 --> 00:20:12,720
Speaker 2: Basically, it's a big old risk, right, Like a higher

459
00:20:12,760 --> 00:20:16,200
Speaker 2: deductible is one risk. Not having insurance at all is

460
00:20:16,920 --> 00:20:20,760
Speaker 2: an even bigger risk that could be catastrophic to your finances. Yeah,

461
00:20:21,040 --> 00:20:23,760
Speaker 2: if the worst were to happen, so be careful. It's

462
00:20:23,840 --> 00:20:26,879
Speaker 2: crazy to see those numbers ticking up that traumatically. I

463
00:20:26,920 --> 00:20:29,240
Speaker 2: get it because insurance is crazy expensive. There are other

464
00:20:29,240 --> 00:20:32,679
Speaker 2: ways I think to reduce the costs of insurance, shopping

465
00:20:32,720 --> 00:20:36,160
Speaker 2: around being one of those, with particularly an independent insurance agent.

466
00:20:36,240 --> 00:20:39,480
Speaker 2: So definitely consider that as an option. But ditching it

467
00:20:39,520 --> 00:20:41,800
Speaker 2: all together probably doesn't make sense for a whole lot

468
00:20:41,800 --> 00:20:43,840
Speaker 2: of folks. All right, Matt, We've got more to get

469
00:20:43,880 --> 00:20:47,080
Speaker 2: to on this episode, including we're gonna talk about something

470
00:20:47,119 --> 00:20:49,040
Speaker 2: from two thousand and seven, two thousand and eight that

471
00:20:49,160 --> 00:20:52,560
Speaker 2: helped cause the housing crisis. It's back, baby, and it's

472
00:20:52,680 --> 00:20:54,880
Speaker 2: not good. We'll get to that more right after.

473
00:20:54,680 --> 00:21:04,720
Speaker 1: This, everybuddy, we are back from the break, and before

474
00:21:04,720 --> 00:21:07,679
Speaker 1: we talk about housing, let us now get to the

475
00:21:07,800 --> 00:21:11,120
Speaker 1: ludicrous headline of the week. This one is from US

476
00:21:11,280 --> 00:21:14,719
Speaker 1: News and the headline reads why you shouldn't dump your

477
00:21:14,720 --> 00:21:18,720
Speaker 1: brick and mortar bank, which, hey, you see this headline

478
00:21:18,760 --> 00:21:21,200
Speaker 1: and raises some questions, right, could Matt and Joel Could

479
00:21:21,200 --> 00:21:23,240
Speaker 1: they be wrong? Maybe brick and mortar banks are better.

480
00:21:23,880 --> 00:21:25,760
Speaker 2: And I'm leaving open the possibility that we could be

481
00:21:25,800 --> 00:21:27,320
Speaker 2: wrong on certain things. Sure, I don't know.

482
00:21:27,359 --> 00:21:28,920
Speaker 1: I try to keep an open mind.

483
00:21:28,720 --> 00:21:30,520
Speaker 2: So I don't know if I'm leaving open the possibility

484
00:21:30,600 --> 00:21:30,960
Speaker 2: on this one.

485
00:21:31,000 --> 00:21:35,159
Speaker 1: Because in this way, certainly we've been diametrically opposed to

486
00:21:35,400 --> 00:21:37,600
Speaker 1: this headline. If you've listened to the show for any

487
00:21:37,640 --> 00:21:40,760
Speaker 1: point of time, like you know that we're fans of

488
00:21:40,800 --> 00:21:42,880
Speaker 1: the online banks, We're not fans of the big old

489
00:21:42,960 --> 00:21:45,399
Speaker 1: banks that are dotting the street corners around the country.

490
00:21:46,000 --> 00:21:51,080
Speaker 1: And the US News article they highlight the individual attention, oh,

491
00:21:52,000 --> 00:21:53,880
Speaker 1: one of the top reasons to have a physical bank.

492
00:21:53,920 --> 00:21:55,920
Speaker 1: Don't you want somebody who knows you, a bank teller

493
00:21:56,000 --> 00:21:59,280
Speaker 1: who you recognize, And they also mentioned that it'll help

494
00:21:59,320 --> 00:22:02,000
Speaker 1: you if you need investment advice, but of course that

495
00:22:02,000 --> 00:22:04,560
Speaker 1: could be further from the truth. Don't ever take investing

496
00:22:04,600 --> 00:22:07,960
Speaker 1: advice from your local bank, and especially too don't even

497
00:22:08,000 --> 00:22:10,399
Speaker 1: consider I almost forget that this is an option that

498
00:22:10,440 --> 00:22:13,320
Speaker 1: you have the ability to open a retirement account with

499
00:22:13,520 --> 00:22:15,480
Speaker 1: your local bank. But these are some of the worst

500
00:22:15,480 --> 00:22:17,520
Speaker 1: places to invest your money. That's right.

501
00:22:17,640 --> 00:22:19,480
Speaker 2: It's funny. I was talking to somebody the other day

502
00:22:19,520 --> 00:22:21,959
Speaker 2: and he was like, I'm thinking about moving banks, Like

503
00:22:22,160 --> 00:22:24,400
Speaker 2: my big bank started loving me with a thirty five

504
00:22:24,440 --> 00:22:27,680
Speaker 2: dollars a month fee for insufficient balance or something like that.

505
00:22:28,000 --> 00:22:31,160
Speaker 2: And the big banks are the worst at fees. And

506
00:22:31,200 --> 00:22:33,320
Speaker 2: it's amazing. No matter how many times we talk about it,

507
00:22:33,320 --> 00:22:35,760
Speaker 2: I still run into people consistently who have even heard

508
00:22:35,760 --> 00:22:38,520
Speaker 2: the show and they mention where they bank, and I'm like,

509
00:22:38,560 --> 00:22:41,280
Speaker 2: oh gosh, they're paying you point zero one percent on

510
00:22:41,359 --> 00:22:44,359
Speaker 2: your savings those point zero three Joelsh It has bumped

511
00:22:44,440 --> 00:22:47,680
Speaker 2: up a little bit, and it's just it's it's incredible.

512
00:22:47,720 --> 00:22:49,639
Speaker 2: And these things that US News and World Report is

513
00:22:49,680 --> 00:22:52,879
Speaker 2: pointing out are just kind of like non starters for me.

514
00:22:52,920 --> 00:22:55,520
Speaker 2: They individualize attention. Do you think even at a local

515
00:22:56,080 --> 00:22:59,600
Speaker 2: bank branch of a big giant megabank, that they are

516
00:23:00,000 --> 00:23:02,520
Speaker 2: paying special attention to you, that they're you might get

517
00:23:02,560 --> 00:23:04,840
Speaker 2: like a sucker for your kid or something if you

518
00:23:04,880 --> 00:23:06,159
Speaker 2: go in there, But that's about as good as you're

519
00:23:06,200 --> 00:23:10,160
Speaker 2: going to get. And then they also mentioned fee free ATMs. Well,

520
00:23:10,160 --> 00:23:12,160
Speaker 2: guess what you get those with online banks too. Most

521
00:23:12,160 --> 00:23:15,160
Speaker 2: of them, most of the best ones have extensive networks,

522
00:23:15,240 --> 00:23:18,919
Speaker 2: or they're even completely reimbursed ATM fees that you might incur.

523
00:23:19,440 --> 00:23:21,440
Speaker 2: And I just think at this point in their evolution,

524
00:23:21,640 --> 00:23:26,320
Speaker 2: online banks do essentially everything better than the biggest banks.

525
00:23:26,640 --> 00:23:29,280
Speaker 2: I don't see any need to have an account or

526
00:23:29,320 --> 00:23:33,040
Speaker 2: relationship there at all for the fast majority people maybe

527
00:23:33,040 --> 00:23:35,480
Speaker 2: small business owners, but even then there are probably better

528
00:23:35,480 --> 00:23:38,159
Speaker 2: local options for you. So the bottom of the article,

529
00:23:38,200 --> 00:23:41,280
Speaker 2: by the way, refers to Chase and Wells Fargo as

530
00:23:41,440 --> 00:23:44,320
Speaker 2: banks to consider because they have plenty of convenient locations

531
00:23:44,359 --> 00:23:47,199
Speaker 2: to visit. But the only reason I could see to

532
00:23:47,240 --> 00:23:50,199
Speaker 2: take US News's advice is if you love fees, you

533
00:23:50,240 --> 00:23:53,879
Speaker 2: love bad customer service, and you are down with low

534
00:23:53,960 --> 00:23:57,480
Speaker 2: interest rates low interest rates on your savings. If that's

535
00:23:57,480 --> 00:23:59,439
Speaker 2: the case for you, if you kind of are glutton

536
00:23:59,480 --> 00:24:02,840
Speaker 2: for punishment, go for it. But yeah, we couldn't disagree

537
00:24:02,920 --> 00:24:04,040
Speaker 2: with this article more right.

538
00:24:04,040 --> 00:24:07,040
Speaker 1: Friend of the show Michelle Singletary, she wrote about paying

539
00:24:07,119 --> 00:24:10,919
Speaker 1: off her mortgage early over in the Washington Post the

540
00:24:10,920 --> 00:24:13,960
Speaker 1: other day, our friend Andy Hill, he was actually making

541
00:24:14,119 --> 00:24:18,120
Speaker 1: similar like no regret claims on social media. Recently, Michelle,

542
00:24:18,160 --> 00:24:20,400
Speaker 1: she was writing about how she paid off a mortgage

543
00:24:20,400 --> 00:24:23,800
Speaker 1: with a rate of two point seventy five percent, which

544
00:24:24,320 --> 00:24:27,320
Speaker 1: seems like a very Michelle thing to do. And this

545
00:24:27,359 --> 00:24:31,080
Speaker 1: is because she hates, She abhors all kinds of debt.

546
00:24:31,160 --> 00:24:33,840
Speaker 1: She doesn't believe there's such a thing as good debt.

547
00:24:34,160 --> 00:24:36,680
Speaker 1: This is something that we talked about with her back

548
00:24:36,760 --> 00:24:38,360
Speaker 1: in episode three seventy three.

549
00:24:38,400 --> 00:24:40,400
Speaker 2: And that doesn't mean we don't love Michelle or don't

550
00:24:40,400 --> 00:24:42,920
Speaker 2: think that she has a lot of great advice different

551
00:24:42,920 --> 00:24:43,119
Speaker 2: from this.

552
00:24:43,119 --> 00:24:46,040
Speaker 1: Diff different strokes for different folks. Her main reason for

553
00:24:46,080 --> 00:24:48,640
Speaker 1: that was for the peace of mind that it paid off,

554
00:24:48,640 --> 00:24:52,919
Speaker 1: mortgage created and you know, the approach to money and

555
00:24:52,920 --> 00:24:55,320
Speaker 1: how does you handle your personal finances. There's a reason

556
00:24:55,359 --> 00:24:58,199
Speaker 1: it's called personal right. We want Michelle to do what

557
00:24:58,280 --> 00:25:00,840
Speaker 1: she thinks is going to make her happy. That being said,

558
00:25:01,560 --> 00:25:05,320
Speaker 1: you're not going to find either Joel or I following suit.

559
00:25:05,359 --> 00:25:09,200
Speaker 1: Because a low interest rate mortgage is a hedge against inflation.

560
00:25:09,320 --> 00:25:12,080
Speaker 1: It's essentially free money right now. If you if you

561
00:25:12,680 --> 00:25:14,600
Speaker 1: had a mortgage that was at two point seventy five

562
00:25:14,600 --> 00:25:17,000
Speaker 1: percent and holding on better than the free money. Yeah,

563
00:25:17,080 --> 00:25:19,359
Speaker 1: to a low rate like that, it just obviously the

564
00:25:19,400 --> 00:25:22,680
Speaker 1: ability to reduce taxes, you can increase investments and have

565
00:25:22,840 --> 00:25:26,040
Speaker 1: added liquidity, that is, if you ought to do good

566
00:25:26,080 --> 00:25:28,280
Speaker 1: things with those dollars, not just using it to funnel

567
00:25:28,320 --> 00:25:31,600
Speaker 1: your lifestyle. Because obviously, if on one hand you have Okay,

568
00:25:31,680 --> 00:25:34,200
Speaker 1: we're gonna spend all of this money, or we could

569
00:25:34,280 --> 00:25:36,800
Speaker 1: use it to pay down a mortgage, well sure, yeah

570
00:25:36,800 --> 00:25:39,919
Speaker 1: that's going to lead to higher levels of wealth for you.

571
00:25:40,000 --> 00:25:42,520
Speaker 1: But we're talking about taking just a holistic view of

572
00:25:42,560 --> 00:25:44,920
Speaker 1: your personal finances and yeah, if you've got a thirty

573
00:25:45,000 --> 00:25:47,679
Speaker 1: year locked in low rate, that is something that we

574
00:25:47,720 --> 00:25:49,600
Speaker 1: are fans of. Yeah, it's like and for a.

575
00:25:49,600 --> 00:25:51,439
Speaker 2: Lot of people, Matt, that obsession with paying off a

576
00:25:51,440 --> 00:25:53,439
Speaker 2: mortgage can put the cart before the horse, because there

577
00:25:53,440 --> 00:25:56,800
Speaker 2: are other financial goals that you want to be hitting

578
00:25:56,880 --> 00:25:58,920
Speaker 2: before you even put that on your radar. It's kind

579
00:25:58,920 --> 00:26:00,520
Speaker 2: of like putting the five twenty nine planned before the

580
00:26:00,560 --> 00:26:02,800
Speaker 2: four oh one k investing. For most people, paying off

581
00:26:02,800 --> 00:26:05,200
Speaker 2: your mortgage is doing the very thing like you should

582
00:26:05,200 --> 00:26:08,800
Speaker 2: probably do, like six seven, eight, things before and do

583
00:26:08,880 --> 00:26:11,640
Speaker 2: them incredibly well, before you start focusing on the debt

584
00:26:11,680 --> 00:26:14,960
Speaker 2: payoff goal of the least degregious debt that's in your life. Sure,

585
00:26:15,160 --> 00:26:18,480
Speaker 2: and we talked about using debt wisely to build wealth

586
00:26:18,680 --> 00:26:20,760
Speaker 2: back on episode six thirty seven, so if you want

587
00:26:21,000 --> 00:26:24,360
Speaker 2: a nuanced discussion of that, please do check that out.

588
00:26:24,359 --> 00:26:26,800
Speaker 2: We'll link to it in the show notes. But speaking

589
00:26:26,800 --> 00:26:30,320
Speaker 2: of mortgages, by the way, Matt, something terrible is back.

590
00:26:30,920 --> 00:26:33,000
Speaker 2: It feels like two thousand and seven again, which was

591
00:26:33,000 --> 00:26:35,200
Speaker 2: a great year for you, I know, but that's what

592
00:26:35,280 --> 00:26:35,919
Speaker 2: I got married.

593
00:26:36,080 --> 00:26:38,280
Speaker 1: Yeah, see like to testic year. Yeah.

594
00:26:38,320 --> 00:26:40,719
Speaker 2: But zero down mortgages, these are the products that are

595
00:26:40,720 --> 00:26:43,160
Speaker 2: making a comeback. Basically, hey, guess what buy a house

596
00:26:43,600 --> 00:26:48,560
Speaker 2: and no downpayment required. United Wholesale Mortgage in particular has

597
00:26:48,680 --> 00:26:51,320
Speaker 2: just launched a zero down product, which sounds great for

598
00:26:51,320 --> 00:26:53,399
Speaker 2: folks who want to buy a home but don't have

599
00:26:53,480 --> 00:26:55,879
Speaker 2: much in the way of savings. This sounds like, guess what,

600
00:26:55,960 --> 00:26:58,560
Speaker 2: Now I can finally buy the home I want, even

601
00:26:58,560 --> 00:27:01,280
Speaker 2: though I haven't been able to or just haven't saved

602
00:27:01,359 --> 00:27:04,480
Speaker 2: up the money yet. But is this a good thing? Well, yes,

603
00:27:04,480 --> 00:27:06,720
Speaker 2: it's gonna make it easier to purchase the home you

604
00:27:06,720 --> 00:27:09,520
Speaker 2: want to buy, you're gonna be financing a bigger percentage

605
00:27:09,560 --> 00:27:13,080
Speaker 2: of the purchase price. Though that means higher monthly payments

606
00:27:13,600 --> 00:27:16,720
Speaker 2: and at a higher rate these days too, So I'm

607
00:27:16,840 --> 00:27:19,040
Speaker 2: sure you agree with me, Matt. I can't imagine recommending

608
00:27:19,080 --> 00:27:20,360
Speaker 2: this to anyone.

609
00:27:20,480 --> 00:27:20,880
Speaker 1: Terrible.

610
00:27:20,920 --> 00:27:23,560
Speaker 2: It can put you in like the most uncomfortable financial position,

611
00:27:23,600 --> 00:27:26,480
Speaker 2: Like you're starting off with no equity, a massive monthly

612
00:27:26,520 --> 00:27:29,119
Speaker 2: mortgage amount, and so if the if the housing market

613
00:27:29,160 --> 00:27:32,840
Speaker 2: experiences some turbulence and or you experience a loss of income,

614
00:27:33,240 --> 00:27:34,480
Speaker 2: the result's gonna be horrendous.

615
00:27:34,680 --> 00:27:36,399
Speaker 1: Yeah. Well, and the way that folks are able to

616
00:27:36,440 --> 00:27:38,879
Speaker 1: put zero down is that there's a second mortgage involved,

617
00:27:38,920 --> 00:27:42,560
Speaker 1: Like so the remaining like you're getting a first mortgage

618
00:27:42,600 --> 00:27:45,440
Speaker 1: basically for like ninety seven percent of the home value,

619
00:27:45,440 --> 00:27:47,560
Speaker 1: and the remaining three it's a second loan. It's a

620
00:27:47,560 --> 00:27:49,760
Speaker 1: second lean on the house, which you don't have to

621
00:27:49,800 --> 00:27:53,240
Speaker 1: pay interest on. It just sits there until you refi

622
00:27:53,400 --> 00:27:55,400
Speaker 1: or until you actually sell the home. And I think

623
00:27:55,400 --> 00:27:57,320
Speaker 1: that's where it's gonna end up, Like that's in my

624
00:27:57,320 --> 00:27:59,000
Speaker 1: mind where it feels like a taking time bomb because

625
00:27:59,040 --> 00:28:01,160
Speaker 1: folks are thinking, oh great, we got this house. We're

626
00:28:01,160 --> 00:28:03,960
Speaker 1: gonna have this thing forever. But what folks don't really

627
00:28:04,000 --> 00:28:06,679
Speaker 1: like the average American moves something like every five to

628
00:28:06,720 --> 00:28:09,639
Speaker 1: seven years. Yep, that is not that long. And it

629
00:28:09,760 --> 00:28:12,480
Speaker 1: just happens, I think, more frequently than people think. And

630
00:28:12,880 --> 00:28:15,440
Speaker 1: we don't think in seven year five to seven year

631
00:28:15,480 --> 00:28:17,480
Speaker 1: increments as much as we do, like, what are we

632
00:28:17,480 --> 00:28:19,199
Speaker 1: doing for the next couple of years? And then on

633
00:28:19,280 --> 00:28:21,320
Speaker 1: top of that, like you just just the additional costs

634
00:28:21,359 --> 00:28:23,000
Speaker 1: that come with moving. I think it's something like ten

635
00:28:23,040 --> 00:28:26,240
Speaker 1: thousand dollars there. I just think a lot of folks,

636
00:28:26,520 --> 00:28:28,760
Speaker 1: I don't know, maybe we should time stamp it, but

637
00:28:29,000 --> 00:28:32,000
Speaker 1: like five to seven years from them, we might see

638
00:28:32,040 --> 00:28:34,760
Speaker 1: a whole lot of folks underwater when it comes to

639
00:28:34,840 --> 00:28:36,840
Speaker 1: their mortgages and the homes that they're looking to get

640
00:28:36,840 --> 00:28:37,080
Speaker 1: out of.

641
00:28:37,119 --> 00:28:39,400
Speaker 2: I think you're right, and I think what's also true

642
00:28:39,600 --> 00:28:42,320
Speaker 2: is that the terms of a mortgage are often far

643
00:28:42,440 --> 00:28:45,360
Speaker 2: less advantageous. The less money you put down, so more

644
00:28:45,400 --> 00:28:46,880
Speaker 2: skin you put in the game. Guess what, when you

645
00:28:46,880 --> 00:28:50,280
Speaker 2: put twenty percent down, you are in golden territory. Like

646
00:28:50,320 --> 00:28:52,840
Speaker 2: you are, You're gonna get better terms, You're gonna get

647
00:28:52,840 --> 00:28:56,680
Speaker 2: better interest rates. Potentially lower fees, Like, that's a crucial

648
00:28:56,720 --> 00:28:59,600
Speaker 2: part of smart money management. But if you are the

649
00:28:59,640 --> 00:29:01,480
Speaker 2: kind of who hasn't been able to save up much

650
00:29:01,480 --> 00:29:03,320
Speaker 2: money and you're at the mercy of lenders and the

651
00:29:03,320 --> 00:29:06,680
Speaker 2: only one you can shop with is United Wholesale Mortgage

652
00:29:06,680 --> 00:29:09,200
Speaker 2: because you need the zero percent down thing, well guess what,

653
00:29:09,400 --> 00:29:10,320
Speaker 2: all those terms are.

654
00:29:10,160 --> 00:29:10,640
Speaker 1: Going to be worse.

655
00:29:10,680 --> 00:29:12,760
Speaker 2: It's going to cost you a lot more money over time,

656
00:29:13,280 --> 00:29:16,080
Speaker 2: not to mention the potential severe downsides of buying a

657
00:29:16,080 --> 00:29:17,720
Speaker 2: house without any money to put down.

658
00:29:17,840 --> 00:29:20,640
Speaker 1: Yeah. If seriously, if stuff hits a fan, I guarantee

659
00:29:20,640 --> 00:29:23,320
Speaker 1: you is it United Wholesale? Is that the company they're

660
00:29:23,320 --> 00:29:24,720
Speaker 1: going to be at the center of it. Yeah, Well,

661
00:29:24,760 --> 00:29:27,840
Speaker 1: your debts or your loans, your mortgages in this case,

662
00:29:27,880 --> 00:29:29,800
Speaker 1: they end up on your credit report and of course

663
00:29:30,360 --> 00:29:33,000
Speaker 1: consumer reports. They just ran a test to see just

664
00:29:33,160 --> 00:29:36,280
Speaker 1: how off your credit reports can be, how many errors

665
00:29:36,760 --> 00:29:40,240
Speaker 1: that they actually have, And in that test, nearly half

666
00:29:40,600 --> 00:29:43,680
Speaker 1: of the thousands of volunteers found errors on the report

667
00:29:43,800 --> 00:29:47,720
Speaker 1: is forty four percent, the majority of which we're damaging

668
00:29:47,800 --> 00:29:48,600
Speaker 1: to their credit score.

669
00:29:48,680 --> 00:29:51,040
Speaker 2: Yeah, can you imagine anything like think about a fail

670
00:29:51,120 --> 00:29:54,320
Speaker 2: rate of four percent When we were in school, somebody,

671
00:29:54,320 --> 00:29:56,960
Speaker 2: And I know there's been like great inflation and more

672
00:29:57,040 --> 00:29:58,640
Speaker 2: leniency I think in a lot of ways and a

673
00:29:58,680 --> 00:30:01,440
Speaker 2: lot of educational systems. Can you imagine getting forty four

674
00:30:01,960 --> 00:30:04,560
Speaker 2: of the questions wrong on a quiz or or just

675
00:30:04,600 --> 00:30:07,040
Speaker 2: like getting a sixty six overall as a grade and

676
00:30:07,080 --> 00:30:08,680
Speaker 2: be like, Okay, it has to be a fifty six.

677
00:30:09,040 --> 00:30:10,880
Speaker 2: Everything's and your teacher saying, yeah, you're moving on to

678
00:30:10,920 --> 00:30:11,480
Speaker 2: the next grade.

679
00:30:11,560 --> 00:30:11,760
Speaker 1: Nope.

680
00:30:11,840 --> 00:30:11,880
Speaker 2: No.

681
00:30:12,040 --> 00:30:14,400
Speaker 1: The credit bureaus are terrible. It's terrible. Yeah. Basically, the

682
00:30:14,480 --> 00:30:17,760
Speaker 1: credit reports and the score complaints related to those credit

683
00:30:17,840 --> 00:30:20,120
Speaker 1: reports are through the roof, and the credit bureaus they

684
00:30:20,120 --> 00:30:23,080
Speaker 1: don't seem to care or be doing anything about it

685
00:30:23,280 --> 00:30:25,040
Speaker 1: in order to fix those reports. And I say that

686
00:30:25,080 --> 00:30:27,880
Speaker 1: because in the study, folks try to work with the

687
00:30:27,920 --> 00:30:30,200
Speaker 1: credit bureaus to get those items removed, and it took

688
00:30:30,400 --> 00:30:32,760
Speaker 1: many months. It took a ton of back and forth

689
00:30:33,080 --> 00:30:35,920
Speaker 1: of contacting the bureaus and reaching out to lenders in

690
00:30:36,000 --> 00:30:39,760
Speaker 1: order to fix the errors, which sounds incredibly frustrating. And

691
00:30:40,280 --> 00:30:43,200
Speaker 1: so what should we do with this information? We would

692
00:30:43,200 --> 00:30:46,400
Speaker 1: say to check load the bureaus. Yeah, well check your

693
00:30:46,560 --> 00:30:48,760
Speaker 1: credit report and you can do it once a week

694
00:30:48,800 --> 00:30:51,880
Speaker 1: for free. Still, this used to be something that you

695
00:30:51,880 --> 00:30:54,360
Speaker 1: can only do was it once annually? I'm so used

696
00:30:54,360 --> 00:30:58,600
Speaker 1: to the essentially credit report, that's right, But ever since

697
00:30:58,640 --> 00:31:00,880
Speaker 1: the pandemic, you can do it every single week. This

698
00:31:00,920 --> 00:31:03,440
Speaker 1: is something though that truly maybe just like twice a year,

699
00:31:03,600 --> 00:31:05,840
Speaker 1: that's maybe how often I would check it out. But

700
00:31:06,000 --> 00:31:09,720
Speaker 1: look over it for any inaccurate information. If you see

701
00:31:09,720 --> 00:31:12,719
Speaker 1: any report there's errors, to the bureaus and then follow

702
00:31:12,840 --> 00:31:15,239
Speaker 1: up make sure that this is you want to make

703
00:31:15,240 --> 00:31:16,680
Speaker 1: sure that this is something that you're on top of,

704
00:31:16,760 --> 00:31:20,360
Speaker 1: and then complain to the CFPB, the Consumer Financial Protection

705
00:31:20,440 --> 00:31:23,680
Speaker 1: Bureau if you are getting a dial tone basically if

706
00:31:23,680 --> 00:31:25,040
Speaker 1: they're doing nothing about it, which.

707
00:31:24,840 --> 00:31:27,040
Speaker 2: Is a report that people have levied against them, is like, hey,

708
00:31:27,400 --> 00:31:29,200
Speaker 2: I make the report, I've gone through the system, I've

709
00:31:29,240 --> 00:31:31,600
Speaker 2: jumped through the hoops at the bureaus are putting me through,

710
00:31:31,960 --> 00:31:33,680
Speaker 2: even though they're putting a lot of people through that

711
00:31:33,680 --> 00:31:36,800
Speaker 2: because so many of these reports are inaccurate, and then

712
00:31:36,840 --> 00:31:39,240
Speaker 2: they are getting that kind of dial tone, they're getting

713
00:31:39,360 --> 00:31:42,560
Speaker 2: zero customer service from the credit bureaus because guess what,

714
00:31:43,000 --> 00:31:45,120
Speaker 2: we're not the customer of the credit bureaus.

715
00:31:45,760 --> 00:31:46,479
Speaker 1: We are the product.

716
00:31:46,480 --> 00:31:48,280
Speaker 2: We are the product and because of that, they don't

717
00:31:48,280 --> 00:31:50,200
Speaker 2: really care when we complain. And so yeah, sometimes you

718
00:31:50,240 --> 00:31:53,640
Speaker 2: have to appeal to a higher authority. CFPB dot gov

719
00:31:53,720 --> 00:31:55,480
Speaker 2: is the place to do that. And best of luck

720
00:31:55,480 --> 00:31:58,040
Speaker 2: to all of you out there navigating what is a

721
00:31:58,560 --> 00:32:00,680
Speaker 2: god awful system that is in dire need of fixing.

722
00:32:00,760 --> 00:32:04,080
Speaker 2: All right, man, let's talk about another entity that sucks, real,

723
00:32:04,160 --> 00:32:07,800
Speaker 2: real bad. Ticketmaster is one of the worst companies in

724
00:32:07,840 --> 00:32:11,040
Speaker 2: the world. The Justice Department just announced that they're suing

725
00:32:11,160 --> 00:32:14,520
Speaker 2: Live Nation, which is the parent company of Ticketmaster, in

726
00:32:14,560 --> 00:32:17,920
Speaker 2: an attempt to break up the I say a parent monopoly,

727
00:32:18,000 --> 00:32:21,400
Speaker 2: but I think it's apparent to all that it is

728
00:32:21,440 --> 00:32:22,040
Speaker 2: a monopoly.

729
00:32:22,600 --> 00:32:23,360
Speaker 1: Fun with words.

730
00:32:24,560 --> 00:32:27,200
Speaker 2: I'm also a parent Matt, which is different. I mean,

731
00:32:27,240 --> 00:32:28,960
Speaker 2: I have kids, okay, but we're going to be paying

732
00:32:29,000 --> 00:32:32,120
Speaker 2: attention to what happens this in this case. On top

733
00:32:32,120 --> 00:32:34,560
Speaker 2: of that, Ticketmaster announced that they experienced a data breach

734
00:32:34,760 --> 00:32:37,360
Speaker 2: this week and that customer data was leaked all across

735
00:32:37,400 --> 00:32:41,520
Speaker 2: the web. Another reason to dislike Ticketmaster and to freeze

736
00:32:41,520 --> 00:32:44,520
Speaker 2: your credit. Yeah, but Ticketmaster, get it together.

737
00:32:44,680 --> 00:32:46,680
Speaker 1: This is just good news for everyone out there who

738
00:32:46,720 --> 00:32:49,480
Speaker 1: wants to go see a live show, because this is

739
00:32:49,480 --> 00:32:51,440
Speaker 1: what's so crazy is that they're finally getting around to this,

740
00:32:51,480 --> 00:32:53,920
Speaker 1: and what I don't understand, Well, it's they announced it

741
00:32:53,960 --> 00:32:55,600
Speaker 1: a couple weeks ago, but we're talking about it now.

742
00:32:56,120 --> 00:32:58,480
Speaker 1: But so much attention is paid to let's say, an

743
00:32:58,520 --> 00:33:02,280
Speaker 1: airline that's the seventh biggest airline and they're thinking about

744
00:33:02,320 --> 00:33:05,960
Speaker 1: acquiring or merging with the eighth biggest. I don't understand

745
00:33:06,000 --> 00:33:09,000
Speaker 1: why Ticketmaster hasn't come up. They are by far the

746
00:33:09,160 --> 00:33:13,440
Speaker 1: largest ticket sales venue whatever operator. Oh yeah, like it's something.

747
00:33:13,440 --> 00:33:15,840
Speaker 2: They owned the venues and they own their ticket system.

748
00:33:15,600 --> 00:33:17,720
Speaker 1: Eighty percent, and nobody else comes even close. And so

749
00:33:17,800 --> 00:33:20,920
Speaker 1: I just don't understand. Maybe it is because airlines and

750
00:33:21,000 --> 00:33:24,320
Speaker 1: transportation that's more closely related to national security or something.

751
00:33:24,360 --> 00:33:26,880
Speaker 1: I don't really know. Maybe they just see concert sales

752
00:33:26,920 --> 00:33:30,320
Speaker 1: as like, oh, that's just like entertainment, it's not important.

753
00:33:30,320 --> 00:33:34,240
Speaker 1: But still, the stranglehold that Ticketmaster Live Nation has had

754
00:33:34,600 --> 00:33:37,560
Speaker 1: on the live events space, it's baffled.

755
00:33:37,600 --> 00:33:39,720
Speaker 2: Well, here's how big of a stranglehold they have. Mat

756
00:33:39,720 --> 00:33:44,120
Speaker 2: Even my homie, Zach Bryan, he released an album y'all

757
00:33:44,120 --> 00:33:44,440
Speaker 2: are tight?

758
00:33:44,520 --> 00:33:45,040
Speaker 1: Right? Who we Are?

759
00:33:45,360 --> 00:33:47,480
Speaker 2: He released an album called All My Homies Hay Ticketmaster,

760
00:33:48,000 --> 00:33:51,360
Speaker 2: and he had to sell his tickets for his tour

761
00:33:51,480 --> 00:33:53,840
Speaker 2: right now on Ticketmaster because they're the only game in

762
00:33:53,880 --> 00:33:55,720
Speaker 2: town for the big venues that he's gonna be playing.

763
00:33:55,760 --> 00:34:00,280
Speaker 2: That So even artists who make their complaints known still

764
00:34:00,280 --> 00:34:01,320
Speaker 2: have to get in bed. So you'll have to do

765
00:34:01,360 --> 00:34:04,360
Speaker 2: business with Ticketmaster. It's hard to watch.

766
00:34:04,480 --> 00:34:07,840
Speaker 1: Yeah, and you mentioned the data breach that Ticketmaster experienced.

767
00:34:07,920 --> 00:34:10,319
Speaker 1: The Journal they had some great advice this week as

768
00:34:10,360 --> 00:34:14,520
Speaker 1: it pertains to your data, your personal data. Don't give

769
00:34:14,520 --> 00:34:18,319
Speaker 1: out your Social Security number. This is something I don't know.

770
00:34:18,360 --> 00:34:20,200
Speaker 1: Maybe a lot of folks know this, but we're getting

771
00:34:20,200 --> 00:34:22,480
Speaker 1: asked for it all the time. And in most instances

772
00:34:22,719 --> 00:34:27,160
Speaker 1: the person asking the company asking they don't necessarily need

773
00:34:27,200 --> 00:34:29,040
Speaker 1: to have it or they're not required, like it's not

774
00:34:29,120 --> 00:34:30,400
Speaker 1: required of you to provide it.

775
00:34:30,440 --> 00:34:32,839
Speaker 2: They put it on the form. But if you leave

776
00:34:32,880 --> 00:34:35,360
Speaker 2: it blank, then guess what they no harm no.

777
00:34:35,400 --> 00:34:38,719
Speaker 1: Fact, like sometimes your doctor's office or your gym, if

778
00:34:38,760 --> 00:34:41,839
Speaker 1: there's a space there for like, just think twice about that,

779
00:34:42,120 --> 00:34:44,160
Speaker 1: see if you can, or ask them if you can

780
00:34:44,200 --> 00:34:47,880
Speaker 1: give your driver's license number instead. Sometimes I know we

781
00:34:47,920 --> 00:34:52,200
Speaker 1: had to fill out some childcare forms earlier this year

782
00:34:52,239 --> 00:34:54,839
Speaker 1: and there's another special form that you had to fill

783
00:34:54,880 --> 00:34:57,520
Speaker 1: out if you did not want to provide your Social

784
00:34:57,600 --> 00:35:00,359
Speaker 1: Security number. Do that because the more you write down

785
00:35:00,560 --> 00:35:03,239
Speaker 1: your social well, the more likely you are too experienced

786
00:35:03,520 --> 00:35:06,160
Speaker 1: ID theft, and especially if your kids are involved, that

787
00:35:06,200 --> 00:35:08,560
Speaker 1: might not be something that you even realized until like

788
00:35:08,719 --> 00:35:12,400
Speaker 1: ten fifteen years down the road. And again, the credit freeze,

789
00:35:12,480 --> 00:35:14,880
Speaker 1: this is a great and free way to protect yourself

790
00:35:14,960 --> 00:35:17,680
Speaker 1: in the modern world. So, yeah, if you're not planning

791
00:35:17,719 --> 00:35:19,960
Speaker 1: to take out any loans anytime soon, go ahead and

792
00:35:20,040 --> 00:35:22,000
Speaker 1: lock that thing down because it doesn't take that long

793
00:35:22,040 --> 00:35:22,880
Speaker 1: to unfreeze as well.

794
00:35:22,960 --> 00:35:24,960
Speaker 2: Yeah, and we've all we all know about the Equifax

795
00:35:25,040 --> 00:35:27,200
Speaker 2: breach of twenty seventeen in which you know, one hundred

796
00:35:27,200 --> 00:35:30,120
Speaker 2: and fifty million the information of one hundred and fifty

797
00:35:30,120 --> 00:35:33,200
Speaker 2: million people was released. And then Ticketmaster same thing, like

798
00:35:33,239 --> 00:35:36,600
Speaker 2: breached another breach, and these breaches like we've had breach fatigue, Matt,

799
00:35:36,600 --> 00:35:38,640
Speaker 2: because there happened all the day time, and so we

800
00:35:38,719 --> 00:35:40,759
Speaker 2: just assumed that our information is out there and we're

801
00:35:40,960 --> 00:35:44,000
Speaker 2: pretty product probably is that's right? And so really the

802
00:35:44,040 --> 00:35:46,960
Speaker 2: credit freeze, which is fortunately free thanks to federal law,

803
00:35:47,239 --> 00:35:49,759
Speaker 2: is the only way to prevent yourself from having that

804
00:35:49,800 --> 00:35:52,839
Speaker 2: information used against you in the worst ways possible. So yeah,

805
00:35:53,080 --> 00:35:54,680
Speaker 2: do this, Try to protect yourself on the front end.

806
00:35:54,680 --> 00:35:56,840
Speaker 2: Don't give your social out there. But then credit freeze

807
00:35:56,920 --> 00:35:59,399
Speaker 2: is like the back end protection too, so all right, yeah,

808
00:35:59,440 --> 00:36:01,520
Speaker 2: well link to an article that explains how does it.

809
00:36:01,520 --> 00:36:03,040
Speaker 1: You can do that. And what's important to note here

810
00:36:03,040 --> 00:36:06,560
Speaker 1: is we're talking about freezes, not locks. Ye, locks cost money,

811
00:36:06,719 --> 00:36:09,680
Speaker 1: and our products that the different credit bureaus offer freezes, well,

812
00:36:09,800 --> 00:36:11,000
Speaker 1: those things are free, it's right.

813
00:36:11,160 --> 00:36:13,040
Speaker 2: Well, and the other thing is credit lock isn't and

814
00:36:13,120 --> 00:36:15,279
Speaker 2: nearly as good of a tool. No plus is gonna

815
00:36:15,280 --> 00:36:15,799
Speaker 2: cost you money.

816
00:36:15,840 --> 00:36:18,520
Speaker 1: That's right. Well, we hope everyone has a fantastic weekend

817
00:36:18,560 --> 00:36:21,200
Speaker 1: and we will see you back here on Monday with

818
00:36:21,400 --> 00:36:23,960
Speaker 1: a fresh ask how to Money episode.

819
00:36:24,000 --> 00:36:25,719
Speaker 2: If you've got a question, by the way, submit it.

820
00:36:26,120 --> 00:36:28,560
Speaker 2: Just gonna have to money dot com slash ask can't

821
00:36:28,560 --> 00:36:29,960
Speaker 2: wait to hear your question. Hope to take it on

822
00:36:30,000 --> 00:36:32,080
Speaker 2: the next Ask htm episode in a couple of weeks.

823
00:36:32,120 --> 00:36:33,640
Speaker 1: That's right. If you don't have a question, leave us

824
00:36:33,640 --> 00:36:36,000
Speaker 1: a review over wherever it is that you listen to

825
00:36:36,239 --> 00:36:36,840
Speaker 1: your podcast.

826
00:36:36,840 --> 00:36:38,759
Speaker 2: If you don't leave us a review, I don't know

827
00:36:38,840 --> 00:36:41,040
Speaker 2: do something else that's fun this weekend. Yeah, all right,

828
00:36:41,120 --> 00:36:43,640
Speaker 2: until next time, Buddy, best friends out and best friends

829
00:36:43,719 --> 00:36:44,399
Speaker 2: out