1 00:00:00,080 --> 00:00:02,640 Speaker 1: Welcome to How to Money. I'm Joel and I am 2 00:00:02,720 --> 00:00:25,560 Speaker 1: Matt and today who are answering your listener questions? That's right, Joel. 3 00:00:25,640 --> 00:00:28,520 Speaker 1: This is our ask how to Money episode where every 4 00:00:28,520 --> 00:00:31,760 Speaker 1: other Monday we answer five listener questions, and today we 5 00:00:31,840 --> 00:00:34,680 Speaker 1: have one from a listener and she is feeling a 6 00:00:34,720 --> 00:00:37,120 Speaker 1: little discouraged because she's not reaching her financial goals as 7 00:00:37,159 --> 00:00:40,360 Speaker 1: quickly as she thought she would. We have some suggestions 8 00:00:40,400 --> 00:00:43,040 Speaker 1: for her. Another listener is he's asking about some of 9 00:00:43,040 --> 00:00:47,519 Speaker 1: the different free tax preparation software that's out there that's available. 10 00:00:47,560 --> 00:00:50,160 Speaker 1: He wanted to get our thoughts on those. And another 11 00:00:50,200 --> 00:00:53,480 Speaker 1: listener is wondering if it's possible to be too old 12 00:00:53,520 --> 00:00:57,000 Speaker 1: to invest in stocks. So I'm looking forward to those 13 00:00:57,120 --> 00:00:58,960 Speaker 1: three plus a couple others. Man that's like me and 14 00:00:59,040 --> 00:01:00,640 Speaker 1: too old to go to toys rust Man, You're never 15 00:01:00,640 --> 00:01:02,279 Speaker 1: too old, You're You're always a toys r us kid. 16 00:01:02,400 --> 00:01:05,720 Speaker 1: Are Toys Rustores still open? They well, they went filed 17 00:01:05,760 --> 00:01:07,679 Speaker 1: for bankruptcy, but I think the name might be being 18 00:01:07,720 --> 00:01:09,600 Speaker 1: resurrected from the dead and somebody else might be trying 19 00:01:09,640 --> 00:01:11,720 Speaker 1: to build toys arrest again. I don't know it, most 20 00:01:11,760 --> 00:01:16,040 Speaker 1: likely Amazon, probably dude I feel like I can literally 21 00:01:16,080 --> 00:01:18,480 Speaker 1: remember the last time I went into a toys r 22 00:01:18,560 --> 00:01:21,920 Speaker 1: us spent some of my own hard earned money on 23 00:01:21,959 --> 00:01:24,640 Speaker 1: this magic trick thing um back in the nineties. There 24 00:01:24,680 --> 00:01:27,080 Speaker 1: is you're gonna say magic the Gathering, Magic the Gathering. 25 00:01:27,080 --> 00:01:29,200 Speaker 1: It was like, No, I was more like wanting to 26 00:01:29,240 --> 00:01:35,559 Speaker 1: be a magician. You can very clearly picture young twelve 27 00:01:35,640 --> 00:01:37,560 Speaker 1: year old man doing that kind off the podcast doesn't 28 00:01:37,560 --> 00:01:39,399 Speaker 1: work out, I think I can still be something you 29 00:01:39,360 --> 00:01:42,240 Speaker 1: should shoot for. But it was there were these like 30 00:01:42,400 --> 00:01:45,800 Speaker 1: pre men you've not yeah, like these toys essentially that 31 00:01:45,880 --> 00:01:48,559 Speaker 1: were kind of like they were like magic cut shortcuts, 32 00:01:48,760 --> 00:01:51,320 Speaker 1: like it allowed you to do magic tricks without all 33 00:01:51,320 --> 00:01:53,600 Speaker 1: the hard work, without all the sleight of hand practice, 34 00:01:53,920 --> 00:01:55,240 Speaker 1: you don't have to actually get good at it. But 35 00:01:55,280 --> 00:01:56,960 Speaker 1: I wish I could remember what it was called, because 36 00:01:57,040 --> 00:01:59,240 Speaker 1: it was pretty popular they had. They had TV commercials 37 00:01:59,360 --> 00:02:01,840 Speaker 1: they advertised all right, I don't remember them, but I'll 38 00:02:01,880 --> 00:02:04,120 Speaker 1: look it up for Christmas posted in the in the 39 00:02:04,120 --> 00:02:06,200 Speaker 1: Shadow's good. All right, I want to ask you a 40 00:02:06,240 --> 00:02:09,320 Speaker 1: quick frugler cheap, real quick, because before before you get 41 00:02:09,320 --> 00:02:12,120 Speaker 1: to these listener questions, both of my girls are starting 42 00:02:12,120 --> 00:02:14,040 Speaker 1: to play soccer for the first time. They're nine and seven. 43 00:02:14,280 --> 00:02:16,440 Speaker 1: But interestingly, en people always mistake them. They think they're 44 00:02:16,440 --> 00:02:19,440 Speaker 1: twins because they're basically the exact same size and they 45 00:02:19,480 --> 00:02:22,880 Speaker 1: wear the exact same shoe size and everything. And so 46 00:02:23,440 --> 00:02:25,679 Speaker 1: when my youngest was like, yeah, i'll play soccer too, 47 00:02:25,720 --> 00:02:27,840 Speaker 1: I was like, Oh, if you guys have games at 48 00:02:27,840 --> 00:02:30,600 Speaker 1: different times, why don't you guys just share cleats? And 49 00:02:30,840 --> 00:02:33,799 Speaker 1: my wife was like, what are you talking about. Get 50 00:02:33,800 --> 00:02:36,200 Speaker 1: them each their own pair of cleats, so frugler cheap 51 00:02:36,480 --> 00:02:40,639 Speaker 1: to make them share cleats. Oh, it depends on how 52 00:02:40,680 --> 00:02:42,679 Speaker 1: far apart their games are, because if like the pair, 53 00:02:43,200 --> 00:02:45,320 Speaker 1: if they're still sweaty, you know, like by the time. 54 00:02:45,320 --> 00:02:47,400 Speaker 1: Though second, it makes me think of going to like 55 00:02:47,440 --> 00:02:50,119 Speaker 1: the skating rink, and it's just like, man, you just 56 00:02:50,280 --> 00:02:53,080 Speaker 1: spray down these roller skates, these quads, you know, like 57 00:02:53,080 --> 00:02:56,799 Speaker 1: they get them and they sprayffer and they like turn 58 00:02:56,840 --> 00:02:58,440 Speaker 1: around and give them to yours, like, oh, let's let's 59 00:02:58,480 --> 00:03:02,120 Speaker 1: gross um. Similarly, our yeah, our girls are also. I 60 00:03:02,160 --> 00:03:04,560 Speaker 1: guess one of our kids isn't in the same league 61 00:03:04,560 --> 00:03:05,960 Speaker 1: that one of your daughters is in, but then one 62 00:03:05,960 --> 00:03:07,440 Speaker 1: of them in another I don't know. It's a similar 63 00:03:07,480 --> 00:03:10,040 Speaker 1: conversation that we've had, And so we found one pair 64 00:03:10,040 --> 00:03:13,560 Speaker 1: of cleats at Goodwill and these Kay told me this morning. 65 00:03:13,600 --> 00:03:15,679 Speaker 1: I was like, okay, yeah, that seems like that's the 66 00:03:16,120 --> 00:03:18,720 Speaker 1: frugal path to god. Jokers looked like they had never 67 00:03:18,760 --> 00:03:21,359 Speaker 1: even been worn. And so we were high five and 68 00:03:21,400 --> 00:03:24,760 Speaker 1: about that. And this is our daughter who is really 69 00:03:24,760 --> 00:03:27,280 Speaker 1: excited to play soccer. Um, so I don't think it 70 00:03:27,320 --> 00:03:31,200 Speaker 1: really mattered. But for another daughter, she isn't so keen 71 00:03:31,480 --> 00:03:33,880 Speaker 1: on playing soccer, and Kate and I were talking about 72 00:03:33,880 --> 00:03:36,440 Speaker 1: it because there was a pair there and but they 73 00:03:36,520 --> 00:03:38,560 Speaker 1: kind of looked like boys cleats, So they were like 74 00:03:38,920 --> 00:03:42,920 Speaker 1: black and green, definitely not cool or you know, cute looking. 75 00:03:43,360 --> 00:03:46,480 Speaker 1: And in her case, no glitter. No, definitely no glitter. 76 00:03:47,000 --> 00:03:48,480 Speaker 1: Teal as long as I feel like that would have 77 00:03:48,520 --> 00:03:51,080 Speaker 1: been enough to Chi would kind of win her over. 78 00:03:51,480 --> 00:03:53,480 Speaker 1: But in her case, we decided not to get those 79 00:03:53,520 --> 00:03:56,040 Speaker 1: because she already doesn't really want to play, but we're 80 00:03:56,120 --> 00:04:00,400 Speaker 1: kind of making her, uh, and so we Yeah, So 81 00:04:00,480 --> 00:04:02,840 Speaker 1: I guess it depends, is what I'm going to say 82 00:04:02,880 --> 00:04:05,200 Speaker 1: to use it. It kind of depends on how excited 83 00:04:05,440 --> 00:04:08,040 Speaker 1: both of your girls are to play soccer. Because with 84 00:04:08,240 --> 00:04:10,480 Speaker 1: our youngest daughter, it doesn't. I don't think it would 85 00:04:10,520 --> 00:04:12,440 Speaker 1: matter what kind of cleats we got her. She is 86 00:04:12,480 --> 00:04:16,360 Speaker 1: super excited to play. She is committed. But the other ones, yeah, 87 00:04:16,760 --> 00:04:19,239 Speaker 1: not so much. So okay, yeah, are they both really 88 00:04:19,240 --> 00:04:21,560 Speaker 1: really pumped? I mean I think they're both, um, like 89 00:04:21,920 --> 00:04:24,760 Speaker 1: halfway pumped. Well, I guess my oldest is actually pretty excited, 90 00:04:24,800 --> 00:04:26,960 Speaker 1: so she's she's pretty into it, even though she's never 91 00:04:26,960 --> 00:04:30,040 Speaker 1: really played before. And we'll see how that goes yet 92 00:04:30,040 --> 00:04:32,440 Speaker 1: her just had her first match. But um, yeah, so 93 00:04:32,520 --> 00:04:34,039 Speaker 1: all right, I'm gonna get a good Will to look 94 00:04:34,040 --> 00:04:36,400 Speaker 1: for my seven year old who hasn't yet played a match, 95 00:04:36,800 --> 00:04:40,000 Speaker 1: and hopefully that'll appease both my daughter and my wife, 96 00:04:40,040 --> 00:04:42,240 Speaker 1: and I won't be a cheap Yeah, man, find you 97 00:04:42,279 --> 00:04:44,480 Speaker 1: a pair for like five seven bucks. That's the way 98 00:04:44,520 --> 00:04:46,719 Speaker 1: to go. I mean, especially because, like I don't know, 99 00:04:46,800 --> 00:04:49,919 Speaker 1: I guess it was easier for a kindergardener, because that 100 00:04:50,040 --> 00:04:51,599 Speaker 1: seems like it's the age where a lot of kids 101 00:04:51,600 --> 00:04:53,279 Speaker 1: are trying out soccer for the first time, so they 102 00:04:53,360 --> 00:04:55,360 Speaker 1: got the slightly smaller feet. I think there are a 103 00:04:55,400 --> 00:04:57,080 Speaker 1: lot of kids who might go to just like a 104 00:04:57,120 --> 00:05:00,160 Speaker 1: couple of games and barely evail on her own, where 105 00:05:00,160 --> 00:05:01,719 Speaker 1: their parents are like, yeah, this is a total waste 106 00:05:01,720 --> 00:05:05,000 Speaker 1: to talk a little bit tougher with older kids. Yeah, 107 00:05:05,040 --> 00:05:08,440 Speaker 1: all right, well i'll Reford back. All right, let's move on. 108 00:05:08,520 --> 00:05:10,200 Speaker 1: Let's mention the beer we're having today on the show. 109 00:05:10,240 --> 00:05:13,200 Speaker 1: This is called Infrared Eclipse. It's by Ryan Guy sprewing 110 00:05:13,200 --> 00:05:16,240 Speaker 1: there out of Ohio, I believe, since Cincinnati. Yeah, they 111 00:05:16,279 --> 00:05:17,599 Speaker 1: sent us some beers a while back. But I saw 112 00:05:17,600 --> 00:05:18,840 Speaker 1: this one on the shelf and I was like, uh, 113 00:05:19,040 --> 00:05:22,400 Speaker 1: this looks delicious. It's a creek cherry sour. So yeah, 114 00:05:22,400 --> 00:05:24,320 Speaker 1: we'll give our thoughts later on in the episode. Not 115 00:05:24,360 --> 00:05:28,039 Speaker 1: to mention it's caged and corked, which is it makes 116 00:05:28,040 --> 00:05:30,240 Speaker 1: it a little extra fancy, elevated when you pop that 117 00:05:30,279 --> 00:05:34,320 Speaker 1: top one percent for that one hundred percent against bottles 118 00:05:34,360 --> 00:05:36,159 Speaker 1: that are waxed. Yeah, I hate it. It's just hard 119 00:05:36,160 --> 00:05:38,640 Speaker 1: to dig in there. It open. It sucks. It's a mess. Yeah, 120 00:05:38,680 --> 00:05:41,719 Speaker 1: whereas a wire the court makes that nice, satisfying pop. 121 00:05:41,800 --> 00:05:43,719 Speaker 1: I love it. I agree. Yeah, all right, let's get on. 122 00:05:43,800 --> 00:05:45,799 Speaker 1: Let's move on to the questions that we've got today, 123 00:05:45,839 --> 00:05:47,920 Speaker 1: Matt on the show, And if you have a question 124 00:05:47,960 --> 00:05:49,960 Speaker 1: you want to you want us to answer on an 125 00:05:50,040 --> 00:05:52,080 Speaker 1: upcoming ask HTM episode. We'd love to take it. Just 126 00:05:52,080 --> 00:05:54,560 Speaker 1: go to how to money dot com slash ask. There 127 00:05:54,560 --> 00:05:57,599 Speaker 1: are simple instructions there for you to record a voice memo, 128 00:05:57,640 --> 00:05:59,120 Speaker 1: send it our way, and hopefully we can take it 129 00:05:59,400 --> 00:06:02,120 Speaker 1: on the next list Question episode. But Matt, let's hit 130 00:06:02,120 --> 00:06:04,479 Speaker 1: that first question. This one comes from a listener who 131 00:06:04,520 --> 00:06:07,960 Speaker 1: says her savings is happening like slow as molasses. Hi, 132 00:06:08,279 --> 00:06:11,279 Speaker 1: my name is Candice. I'm from Kennesaw, Georgia. My question 133 00:06:11,320 --> 00:06:14,200 Speaker 1: is about savings goals. I currently save for short term 134 00:06:14,200 --> 00:06:18,479 Speaker 1: savings goals in a high yield savings account where the 135 00:06:18,560 --> 00:06:21,880 Speaker 1: deposits are split by percentage and to different buckets for 136 00:06:21,960 --> 00:06:26,599 Speaker 1: different goals. So I've got buckets for a new vehicle 137 00:06:26,680 --> 00:06:28,400 Speaker 1: that we're going to need in the next one to 138 00:06:28,480 --> 00:06:32,360 Speaker 1: two years, a new HVAC system ours is old and 139 00:06:32,400 --> 00:06:35,039 Speaker 1: could go out at any time, as well as some 140 00:06:35,160 --> 00:06:41,200 Speaker 1: home improvement projects, vacation things like that. My question is 141 00:06:42,120 --> 00:06:46,600 Speaker 1: the way that the savings are being split. It doesn't 142 00:06:46,760 --> 00:06:49,840 Speaker 1: feel like I'm making any real progress because by the 143 00:06:49,880 --> 00:06:53,760 Speaker 1: time the deposits are split by the percentages, it just 144 00:06:53,839 --> 00:06:56,000 Speaker 1: feels like such a small amount of money and the 145 00:06:56,560 --> 00:07:01,039 Speaker 1: numbers are going up slowly, So I don't know how 146 00:07:01,080 --> 00:07:05,280 Speaker 1: I can better prioritize these savings so that I'm making 147 00:07:05,320 --> 00:07:09,560 Speaker 1: progress towards my overall goals. But I feel like I'm 148 00:07:09,560 --> 00:07:12,360 Speaker 1: moving a little bit faster towards where I want to be. 149 00:07:13,200 --> 00:07:16,520 Speaker 1: Any help would be great. Thank you all right, Kennis, 150 00:07:16,560 --> 00:07:18,920 Speaker 1: thank you so much for your question. And I don't 151 00:07:18,960 --> 00:07:20,360 Speaker 1: know if you know this or not, but you're right 152 00:07:20,440 --> 00:07:23,920 Speaker 1: up the road from us, so yeah, maybe we'll actually 153 00:07:24,320 --> 00:07:26,640 Speaker 1: run into you at one of our favorite low cost 154 00:07:26,720 --> 00:07:31,160 Speaker 1: grocery stores like Aldie or Costco or Legal, where we 155 00:07:31,240 --> 00:07:33,560 Speaker 1: spend way too much time, or maybe the disc OFLF course, 156 00:07:33,600 --> 00:07:35,280 Speaker 1: where I don't spend nearly as much time as I'd 157 00:07:35,280 --> 00:07:37,120 Speaker 1: like though She's I mean, I'm not gonna say people 158 00:07:37,440 --> 00:07:40,440 Speaker 1: play people don't play discolf, but people play discolf way 159 00:07:40,520 --> 00:07:42,800 Speaker 1: more folks at Costco than there are the discolf course, 160 00:07:42,840 --> 00:07:44,640 Speaker 1: that's true, and we go to Costco more. We need 161 00:07:44,680 --> 00:07:46,920 Speaker 1: to wake up hey, every other sort of the future. 162 00:07:46,960 --> 00:07:49,480 Speaker 1: Every other Friday, you can oftentimes find Joel and I 163 00:07:49,560 --> 00:07:52,880 Speaker 1: both together wandering the aisles of Costco because that's when 164 00:07:52,880 --> 00:07:55,680 Speaker 1: we do a combined pizza movie night with our families. 165 00:07:56,000 --> 00:07:59,480 Speaker 1: And we definitely always sending out myer lemons typically to 166 00:07:59,640 --> 00:08:01,640 Speaker 1: random people who ask it was a fun conversation one time. 167 00:08:01,680 --> 00:08:04,760 Speaker 1: We're sitting there winning on our two pizzas for our families. Anyway, 168 00:08:04,960 --> 00:08:07,440 Speaker 1: enough about that, but Canadas, Yeah, maybe we'll run into you, 169 00:08:07,840 --> 00:08:11,040 Speaker 1: and let's get to your question. And first off, I 170 00:08:11,080 --> 00:08:14,240 Speaker 1: love that you're using a high yield savings account and 171 00:08:14,320 --> 00:08:17,800 Speaker 1: that specifically you're using buckets to save for some of 172 00:08:17,800 --> 00:08:20,200 Speaker 1: these specific goals that you've got. So we want everyone 173 00:08:20,240 --> 00:08:23,320 Speaker 1: to know Canis is doing it right. But for others 174 00:08:23,360 --> 00:08:25,200 Speaker 1: out there who want to do this, who may not 175 00:08:25,320 --> 00:08:27,400 Speaker 1: know what we're talking about. When it comes to savings 176 00:08:27,400 --> 00:08:31,480 Speaker 1: Buckets specifically ally, they're the bank that kind of has 177 00:08:31,480 --> 00:08:34,360 Speaker 1: the best integrated technology that allows you to save like this, 178 00:08:34,760 --> 00:08:37,560 Speaker 1: and they pretty much always offer rates that are competitive 179 00:08:37,600 --> 00:08:41,199 Speaker 1: in the market. I personally bank with Ally, and I'm 180 00:08:41,240 --> 00:08:42,880 Speaker 1: a huge fan of what it is that they're offering. 181 00:08:43,320 --> 00:08:45,760 Speaker 1: But that Buckets feature, it makes it really easy to 182 00:08:45,800 --> 00:08:49,120 Speaker 1: create sinking funds for some of those top priorities, for 183 00:08:49,120 --> 00:08:52,120 Speaker 1: some of those long term savings goals. In our household, 184 00:08:52,160 --> 00:08:55,839 Speaker 1: we call them savings categories. Buckets is way cooler, but 185 00:08:56,400 --> 00:08:59,440 Speaker 1: it's just such a great place to proactively plan ahead 186 00:08:59,480 --> 00:09:01,080 Speaker 1: for some of these expenses that you know are going 187 00:09:01,080 --> 00:09:03,760 Speaker 1: to be coming down the pike. For instance, it's going 188 00:09:03,800 --> 00:09:06,560 Speaker 1: to point out like most folks would consider an HVAC 189 00:09:06,760 --> 00:09:10,080 Speaker 1: replacement to be an emergency, but while it's not cheap, 190 00:09:10,160 --> 00:09:13,160 Speaker 1: it's definitely something that you can and that you should 191 00:09:13,200 --> 00:09:16,080 Speaker 1: plan for. Candas, kudos to you for looking ahead and 192 00:09:16,160 --> 00:09:19,280 Speaker 1: knowing that all right, this, yeah, our AC could go 193 00:09:19,320 --> 00:09:21,200 Speaker 1: out at any minute. You don't want to be stranded 194 00:09:21,280 --> 00:09:23,520 Speaker 1: in the middle of the summer with no AC and 195 00:09:23,720 --> 00:09:25,200 Speaker 1: not how the money to be able to replace it. 196 00:09:25,280 --> 00:09:27,679 Speaker 1: Saving up for the boring stuff is important, important to 197 00:09:27,800 --> 00:09:30,520 Speaker 1: the boring expensive stuff. So yeah, I agree Cannas is 198 00:09:30,600 --> 00:09:33,640 Speaker 1: she's doing the right thing. She's going down the right path, 199 00:09:33,760 --> 00:09:36,240 Speaker 1: and I like that she's got these buckets. She's being 200 00:09:36,240 --> 00:09:39,680 Speaker 1: proactive about saving four these eventual expenses that are going 201 00:09:39,720 --> 00:09:42,360 Speaker 1: to pop up. It sounds like the biggest problem here, though, Matt, 202 00:09:42,480 --> 00:09:45,160 Speaker 1: that Candas is experiencing is that she's trying to accomplish 203 00:09:45,160 --> 00:09:48,319 Speaker 1: a lot at the same time, and so she's basically 204 00:09:48,360 --> 00:09:50,720 Speaker 1: taking the divide and conquer approach, which means that the 205 00:09:50,800 --> 00:09:55,079 Speaker 1: reality is that she's experiencing progress moving at more of 206 00:09:55,160 --> 00:09:57,280 Speaker 1: a glacial pace because she's trying to do it all 207 00:09:57,320 --> 00:10:00,239 Speaker 1: at once. It's like, sometimes that's the most effective strategy, 208 00:10:00,240 --> 00:10:03,400 Speaker 1: but not always because you're you're often spreading those dollars 209 00:10:03,559 --> 00:10:06,120 Speaker 1: too thin when you kind of take that approach, and 210 00:10:06,360 --> 00:10:08,559 Speaker 1: you can start to feel like you aren't making any 211 00:10:08,559 --> 00:10:10,160 Speaker 1: progress at all. Even though you're making a lot of 212 00:10:10,200 --> 00:10:13,520 Speaker 1: little progress, you're not seeing big gains, and so that 213 00:10:13,520 --> 00:10:16,800 Speaker 1: can be kind of defeating from a psychological standpoint. Yeah, 214 00:10:16,880 --> 00:10:18,719 Speaker 1: she's lost the power of focus. It's kind of like 215 00:10:18,800 --> 00:10:22,200 Speaker 1: the death snowball thing. Right. It's not the best mathematical 216 00:10:22,200 --> 00:10:25,120 Speaker 1: formula for paying off that, but psychologically it helps keep 217 00:10:25,160 --> 00:10:27,920 Speaker 1: people motivated and engaged, and so oftentimes people pay off 218 00:10:27,920 --> 00:10:30,120 Speaker 1: that faster when they take that approach. And the same 219 00:10:30,120 --> 00:10:32,679 Speaker 1: thing is true if you prioritize paying for just a 220 00:10:32,720 --> 00:10:35,079 Speaker 1: few buckets, just filling up a few buckets first, instead 221 00:10:35,080 --> 00:10:37,280 Speaker 1: of trying to fill up a dozen, fill up two 222 00:10:37,360 --> 00:10:39,600 Speaker 1: or three. And yeah, so maybe you can put a 223 00:10:39,600 --> 00:10:41,320 Speaker 1: couple of these goals on the back Murner for just 224 00:10:41,360 --> 00:10:43,000 Speaker 1: a bit. Yeah, for instance, I don't know, do you 225 00:10:43,040 --> 00:10:44,520 Speaker 1: think you get an extra four years out of that 226 00:10:44,520 --> 00:10:46,559 Speaker 1: car instead of two? That allows you to push more 227 00:10:46,600 --> 00:10:48,520 Speaker 1: to the HAC fund. These are the kind of trade 228 00:10:48,520 --> 00:10:50,920 Speaker 1: offs that you need to make, and I think, yeah, 229 00:10:50,920 --> 00:10:53,520 Speaker 1: it just makes sense to prioritize a smaller number of 230 00:10:53,520 --> 00:10:56,600 Speaker 1: buckets for the time being, so you can see more 231 00:10:56,640 --> 00:10:59,560 Speaker 1: progress and continue down that path of saving effectively for 232 00:10:59,720 --> 00:11:01,480 Speaker 1: the thing you got to save up poor totally. Yeah, 233 00:11:01,600 --> 00:11:03,840 Speaker 1: Or maybe she hasn't gone on a family vacation. She 234 00:11:03,880 --> 00:11:05,800 Speaker 1: mentioned vacation as being one of her goals as well. 235 00:11:05,920 --> 00:11:07,920 Speaker 1: Maybe they haven't done that for like in a couple 236 00:11:07,920 --> 00:11:10,079 Speaker 1: of years, right, and so maybe that is something that 237 00:11:10,120 --> 00:11:13,080 Speaker 1: she wants to ensure that happens in twenty twenty three. 238 00:11:13,280 --> 00:11:14,520 Speaker 1: And so a way that you could do that is 239 00:11:14,520 --> 00:11:18,440 Speaker 1: just simply hitting pause on like the home renovation's bucket, right, 240 00:11:18,520 --> 00:11:21,520 Speaker 1: You don't necessarily have to drain that bucket, just maybe 241 00:11:21,559 --> 00:11:23,960 Speaker 1: let it sit, but just don't continue to fund that bucket. 242 00:11:24,080 --> 00:11:26,120 Speaker 1: And so, yeah, maybe the cabinets in your kitchen are terrible, 243 00:11:26,160 --> 00:11:28,000 Speaker 1: you hate them, But those are the trade offs that 244 00:11:28,000 --> 00:11:30,160 Speaker 1: you make in order to achieve some of your savings 245 00:11:30,200 --> 00:11:34,240 Speaker 1: goals sooner than others. And honestly, like staggering and placing 246 00:11:34,280 --> 00:11:36,760 Speaker 1: some of these goals ahead of others. That is a 247 00:11:36,760 --> 00:11:39,000 Speaker 1: good move to make from a psychological standpoint as well, 248 00:11:39,000 --> 00:11:42,400 Speaker 1: because man like, it would be tough to stomach working 249 00:11:42,480 --> 00:11:46,480 Speaker 1: and sacrificing, like saving for years without the satisfaction of 250 00:11:46,559 --> 00:11:49,320 Speaker 1: having enjoyed some of the fruit of your labor, you know, 251 00:11:49,480 --> 00:11:52,319 Speaker 1: only to then simultaneously fill all of your buckets, say 252 00:11:52,400 --> 00:11:54,440 Speaker 1: like five years from now. I say in year five, 253 00:11:54,800 --> 00:11:56,559 Speaker 1: you achieve all of these things all at once. Right, 254 00:11:56,600 --> 00:11:58,600 Speaker 1: You get a new car, you get to go on vacation, 255 00:11:58,640 --> 00:12:01,640 Speaker 1: finally you renovate the house. Else That sounds crazy, right, 256 00:12:02,000 --> 00:12:03,839 Speaker 1: I mean, I guess that would be an awesome year. 257 00:12:03,880 --> 00:12:05,840 Speaker 1: But I think the ability to kind of stagger and 258 00:12:05,880 --> 00:12:08,480 Speaker 1: spread some of those goals out would just help immensely 259 00:12:08,600 --> 00:12:10,800 Speaker 1: from a psychological standpoint. It would help you to Nike 260 00:12:10,760 --> 00:12:13,520 Speaker 1: get burned out. And it's just like a I don't know, 261 00:12:13,600 --> 00:12:16,720 Speaker 1: like a small reward after putting in some hard work, 262 00:12:16,880 --> 00:12:18,520 Speaker 1: like when we go on hikes oftentimes will pack like 263 00:12:18,559 --> 00:12:20,360 Speaker 1: a little chocolate or like a little piece of candy 264 00:12:20,400 --> 00:12:22,360 Speaker 1: that we call like hiking treats. It's just like a 265 00:12:22,440 --> 00:12:24,600 Speaker 1: nice little payoff at the top. And we're trying to 266 00:12:24,840 --> 00:12:28,040 Speaker 1: also brainwash our kids said that they always associate with 267 00:12:28,280 --> 00:12:30,600 Speaker 1: you achievement and getting to the top of the mountain 268 00:12:30,800 --> 00:12:35,360 Speaker 1: with something that they're excited about, namely sugar. Yeah no, yeah, 269 00:12:35,360 --> 00:12:38,400 Speaker 1: you're right, and spreading out the reward. Spreading out if 270 00:12:38,400 --> 00:12:41,600 Speaker 1: you're prioritizing a fewer buckets, filling those up first means yeah, 271 00:12:41,600 --> 00:12:44,080 Speaker 1: you're gonna be able to stagger the benefit. And I 272 00:12:44,120 --> 00:12:47,000 Speaker 1: think you're right. That's probably really good from a mental standpoint. Also, 273 00:12:47,080 --> 00:12:49,200 Speaker 1: I would say earning more is something else, like to 274 00:12:49,400 --> 00:12:51,880 Speaker 1: that's worth thinking about. It's something we talked about recently. 275 00:12:51,880 --> 00:12:54,880 Speaker 1: In episode six twenty three, we offered ideas to maximize 276 00:12:54,880 --> 00:12:58,240 Speaker 1: your income. But like turning on the earning spigot is 277 00:12:58,240 --> 00:12:59,880 Speaker 1: something you might be able to do in order to 278 00:13:00,080 --> 00:13:02,960 Speaker 1: those buckets up more quickly. If the problem is that 279 00:13:02,960 --> 00:13:05,120 Speaker 1: it's a trickle, maybe you can get a larger stream 280 00:13:05,240 --> 00:13:07,079 Speaker 1: by increasing the amount that you're able to bring home 281 00:13:07,080 --> 00:13:10,240 Speaker 1: every paycheck. Right, And so, yeah, one other thing, by 282 00:13:10,240 --> 00:13:12,200 Speaker 1: the way, on top of that that might be worth mentioning. 283 00:13:12,400 --> 00:13:14,480 Speaker 1: You might want to invest less for a short period 284 00:13:14,480 --> 00:13:18,480 Speaker 1: of time, depending on those short to medium term savings goals, right, 285 00:13:18,480 --> 00:13:21,079 Speaker 1: which I'll admit this is like the sounds like the 286 00:13:21,120 --> 00:13:23,880 Speaker 1: antithesis how to money financial advice. Well, I mean maybe 287 00:13:23,880 --> 00:13:26,560 Speaker 1: you should invest less money, right, Well, it depends like 288 00:13:26,600 --> 00:13:29,120 Speaker 1: let's say, let's say Candice is saving something like twenty 289 00:13:29,160 --> 00:13:31,040 Speaker 1: plus percent of her power exactly in the four O 290 00:13:31,080 --> 00:13:32,719 Speaker 1: on K in the roth IRA, and she's like, I 291 00:13:32,760 --> 00:13:34,679 Speaker 1: want to get back there, but for one year, these 292 00:13:34,720 --> 00:13:36,720 Speaker 1: savings goals are really important and I want to make 293 00:13:36,720 --> 00:13:38,720 Speaker 1: sure that I'm hit them quickly. And if that gives 294 00:13:38,720 --> 00:13:41,959 Speaker 1: you the motivation to stay the course and to say 295 00:13:42,040 --> 00:13:44,400 Speaker 1: for some of those things, I think it can make 296 00:13:44,440 --> 00:13:46,760 Speaker 1: sense to dial back some of those contributions, not so 297 00:13:46,840 --> 00:13:48,680 Speaker 1: much that you're missing out on like a company match 298 00:13:48,760 --> 00:13:51,400 Speaker 1: or something like that. Yeah, and don't scale back that much, right, 299 00:13:51,400 --> 00:13:54,400 Speaker 1: And we don't want you to do it indefinitely, but yeah, 300 00:13:54,400 --> 00:13:57,600 Speaker 1: maybe for a short period of time, diving back on 301 00:13:57,640 --> 00:14:00,400 Speaker 1: those retirement contributions so that you can focus a little 302 00:14:00,440 --> 00:14:03,000 Speaker 1: more on saving and meeting some of those goals. I 303 00:14:03,040 --> 00:14:05,480 Speaker 1: think that can make sense. But that being said, there's 304 00:14:05,480 --> 00:14:07,800 Speaker 1: a good chance that you could continue stocking those dollars 305 00:14:07,840 --> 00:14:10,520 Speaker 1: away and something like a roth Ira, not invest those 306 00:14:10,520 --> 00:14:14,040 Speaker 1: dollars for the time being, and consider that your backup 307 00:14:14,120 --> 00:14:16,440 Speaker 1: emergency funds, so keep keeping it there. In like the 308 00:14:16,520 --> 00:14:20,920 Speaker 1: money market account or yeah, not invested in an actual fund. Yeah, 309 00:14:20,920 --> 00:14:22,800 Speaker 1: and those money market funds, especially with like I think 310 00:14:22,800 --> 00:14:25,000 Speaker 1: Fidelities money market fund is paying north to four percent 311 00:14:25,120 --> 00:14:27,400 Speaker 1: right now, So that's that's good kind of like it 312 00:14:27,480 --> 00:14:30,520 Speaker 1: is invested. Yeah, and in some ways it is because 313 00:14:30,520 --> 00:14:33,360 Speaker 1: savings rates have gone up so much in recent months. Yeah, 314 00:14:33,360 --> 00:14:35,440 Speaker 1: I mean it makes me think of the expression Rome 315 00:14:35,600 --> 00:14:38,440 Speaker 1: wasn't built in a day and saving up for these 316 00:14:38,440 --> 00:14:41,520 Speaker 1: bigger upcoming needs that isn't going to happen overnight either. 317 00:14:41,760 --> 00:14:44,720 Speaker 1: I know it can feel demoralizing, Candice, but you're trying 318 00:14:44,760 --> 00:14:47,960 Speaker 1: to crush a bunch of big savings goals with a 319 00:14:48,080 --> 00:14:50,760 Speaker 1: limited amount of resources, and you're not alone. You know, 320 00:14:50,880 --> 00:14:52,720 Speaker 1: we don't want you to get discouraged that it is 321 00:14:52,960 --> 00:14:55,520 Speaker 1: slow going, And honestly, if you do get discouraged, I 322 00:14:55,560 --> 00:14:57,280 Speaker 1: think that can be a great way to kind of like, 323 00:14:57,320 --> 00:15:00,120 Speaker 1: I want you to harness that frustration. And then so 324 00:15:00,280 --> 00:15:02,960 Speaker 1: Joel talked about maybe earning more, but let's say you 325 00:15:03,080 --> 00:15:05,800 Speaker 1: are totally tapped out as far as the amount of 326 00:15:05,800 --> 00:15:07,560 Speaker 1: time that you have on hand. Well, the other like 327 00:15:07,640 --> 00:15:09,640 Speaker 1: the other side of the equation is cutting back on 328 00:15:09,680 --> 00:15:13,280 Speaker 1: your expenses and if you aren't tracking your spending. I 329 00:15:13,280 --> 00:15:16,000 Speaker 1: think this can be an incredible way to find any 330 00:15:16,360 --> 00:15:18,800 Speaker 1: leaky spending that might be taking place. Because if you 331 00:15:18,840 --> 00:15:20,600 Speaker 1: are not spending your dollars in a way that is 332 00:15:20,600 --> 00:15:24,480 Speaker 1: bringing you maximum satisfaction and maximum value, well, those are 333 00:15:24,520 --> 00:15:27,960 Speaker 1: some areas that you could potentially trim consider cutting back 334 00:15:28,000 --> 00:15:30,200 Speaker 1: in some of those different areas. I think that could 335 00:15:30,240 --> 00:15:32,720 Speaker 1: also be a way for you to obviously be able 336 00:15:32,760 --> 00:15:34,840 Speaker 1: to put some of those dollars towards some of those 337 00:15:34,840 --> 00:15:38,000 Speaker 1: goals that truly do matter to you. But bottom line, 338 00:15:38,040 --> 00:15:40,600 Speaker 1: you're doing all the right things, and I think that 339 00:15:40,880 --> 00:15:44,280 Speaker 1: sometimes can feel like trading water sometimes, But hopefully, you know, 340 00:15:44,760 --> 00:15:46,640 Speaker 1: a few small tweaks here can just help you to 341 00:15:46,680 --> 00:15:49,960 Speaker 1: get where you're trying to go just a little bit faster. Yeah, agreed, 342 00:15:50,000 --> 00:15:52,480 Speaker 1: All right, Cannis, keep up the good work and hopefully 343 00:15:52,520 --> 00:15:54,720 Speaker 1: that those few small tweaks can help you kind of 344 00:15:55,120 --> 00:15:57,680 Speaker 1: make more progress on the things that are most important 345 00:15:57,680 --> 00:16:00,280 Speaker 1: to you right now while helping you stay energy to 346 00:16:00,280 --> 00:16:02,240 Speaker 1: continue to meet those money goals you've got. All right, 347 00:16:02,440 --> 00:16:04,400 Speaker 1: We've got more listener questions to get to, including a 348 00:16:04,400 --> 00:16:06,800 Speaker 1: listener who wants to save for his daughter's teacher We'll 349 00:16:06,800 --> 00:16:18,240 Speaker 1: get to that and more right after this. All right, Joel, 350 00:16:18,280 --> 00:16:20,600 Speaker 1: we are back from the break, and let's now hear 351 00:16:20,680 --> 00:16:23,520 Speaker 1: from a listener who is interested in using a five 352 00:16:23,640 --> 00:16:27,200 Speaker 1: twenty nine plan to juice his retirement savings a little bit. 353 00:16:27,240 --> 00:16:31,000 Speaker 1: Let's hear that one. Hey, guys, my name's Silas, reaching 354 00:16:31,000 --> 00:16:33,840 Speaker 1: out from Saint Pete, Florida. I had a question about 355 00:16:33,840 --> 00:16:36,920 Speaker 1: health savings accounts and five twenty nine plans. I know 356 00:16:36,960 --> 00:16:39,600 Speaker 1: the show's mentioned the tax advantage of an HSA and 357 00:16:39,640 --> 00:16:41,600 Speaker 1: the fact that you can let your money grow and 358 00:16:41,640 --> 00:16:44,520 Speaker 1: then use receipts to withdraw money later with a new 359 00:16:44,600 --> 00:16:47,320 Speaker 1: tax act. I was intrigued by the change mentioning how 360 00:16:47,320 --> 00:16:49,840 Speaker 1: a five twenty nine plan and your own name could 361 00:16:49,840 --> 00:16:52,640 Speaker 1: be rolled over to a roth IRA after fifteen years. 362 00:16:53,360 --> 00:16:55,360 Speaker 1: I was thinking that this could be used to increase 363 00:16:55,400 --> 00:16:58,400 Speaker 1: the amount of one's investments that grow tax free. I 364 00:16:58,520 --> 00:17:01,800 Speaker 1: discussed this loophole with a family member who works in 365 00:17:01,800 --> 00:17:04,560 Speaker 1: the financial field, and he mentioned that there's always risk 366 00:17:04,680 --> 00:17:06,960 Speaker 1: that loopholes like this could be closed due to new 367 00:17:06,960 --> 00:17:10,800 Speaker 1: policies or new laws. So do you think I should 368 00:17:10,840 --> 00:17:13,600 Speaker 1: not worry about a potential change that would prevent me 369 00:17:13,640 --> 00:17:16,760 Speaker 1: from accessing funds as I planned and just go for it, 370 00:17:17,000 --> 00:17:20,240 Speaker 1: or should I only use these plans as intended without 371 00:17:20,280 --> 00:17:23,600 Speaker 1: counting on the loophole to actually work out? Wondering what 372 00:17:23,640 --> 00:17:26,879 Speaker 1: your guy's thoughts are? Thank you? All right, Matt Silas 373 00:17:27,000 --> 00:17:29,199 Speaker 1: he went a little nerdy with this questions straight, and 374 00:17:29,320 --> 00:17:30,920 Speaker 1: I feel like we actually kind of have to pull 375 00:17:30,960 --> 00:17:33,440 Speaker 1: out our crystal ball and make some predictions a little 376 00:17:33,440 --> 00:17:37,600 Speaker 1: bit with this question's future. Whole signs point to a 377 00:17:37,600 --> 00:17:41,400 Speaker 1: wealthy future for Silas. Turmoil in the markets. Yeah, all 378 00:17:41,440 --> 00:17:43,679 Speaker 1: sorts some predictions that we could make, but we're not 379 00:17:43,720 --> 00:17:45,680 Speaker 1: going to. Yeah, well, all right, so let's let's dig 380 00:17:45,680 --> 00:17:47,680 Speaker 1: into this question though, like which one is better, HSA 381 00:17:47,840 --> 00:17:51,560 Speaker 1: or five twenty nine to Rotha Rollover will. Yeah, there's 382 00:17:51,560 --> 00:17:53,080 Speaker 1: a lot tied up in that question. First of all, 383 00:17:53,119 --> 00:17:55,920 Speaker 1: in order for this to even be a strategy worth considering, 384 00:17:56,160 --> 00:17:58,400 Speaker 1: you got to have a higher income, because if not, 385 00:17:58,760 --> 00:18:01,239 Speaker 1: you should just contribute to a high rate directly and 386 00:18:01,280 --> 00:18:04,440 Speaker 1: skip the long, tedious new five twenty nine to Rollover 387 00:18:04,560 --> 00:18:07,040 Speaker 1: rules that we outlined I don't know what episode that 388 00:18:07,119 --> 00:18:10,240 Speaker 1: was in a couple months ago in how we discussed 389 00:18:10,280 --> 00:18:12,359 Speaker 1: the secure Act two point er all the changes that 390 00:18:12,359 --> 00:18:14,919 Speaker 1: it was making to retirement accounts the biggest impacts on 391 00:18:14,960 --> 00:18:16,879 Speaker 1: our personal finances. Will make sure to link to that 392 00:18:16,920 --> 00:18:19,960 Speaker 1: specific episode in the show notes. Can't remember it off 393 00:18:19,960 --> 00:18:21,960 Speaker 1: the top of my my head, Yeah, but that one in particular, 394 00:18:22,160 --> 00:18:24,240 Speaker 1: there was there's just a lot of changes made that 395 00:18:24,320 --> 00:18:27,280 Speaker 1: affects all of us and how we save and invest 396 00:18:27,320 --> 00:18:30,600 Speaker 1: for retirement. The five twenty nine to roth rollover reality, 397 00:18:31,040 --> 00:18:33,600 Speaker 1: it just was the biggest change in our minds, and 398 00:18:33,680 --> 00:18:36,000 Speaker 1: so we talked about that quite a bit. But you 399 00:18:36,040 --> 00:18:38,280 Speaker 1: can't contribute to a roth if your income is over 400 00:18:38,280 --> 00:18:40,880 Speaker 1: one hundred and fifty three thousand dollars filing as an individual, 401 00:18:41,080 --> 00:18:43,280 Speaker 1: are two hundred and twenty eight thousand dollars if you're 402 00:18:43,320 --> 00:18:46,320 Speaker 1: married filing jointly, and so if your income is higher 403 00:18:46,359 --> 00:18:48,920 Speaker 1: than those thresholds, then the five twenty nine to ROTH 404 00:18:49,080 --> 00:18:52,119 Speaker 1: strategy that we discussed in that episode it might be 405 00:18:52,160 --> 00:18:55,159 Speaker 1: worth considering. But keep in mind that any rollovers to 406 00:18:55,240 --> 00:18:58,880 Speaker 1: a wrath are subject to the annual sixty five can't 407 00:18:58,920 --> 00:19:02,760 Speaker 1: contribution limit. They count as contributions, So this isn't necessarily 408 00:19:02,760 --> 00:19:05,680 Speaker 1: like a way to sock away extra money in your wrath. 409 00:19:05,720 --> 00:19:09,040 Speaker 1: It's just a way to potentially potentially gain access to 410 00:19:09,200 --> 00:19:12,360 Speaker 1: a wrath if your income is higher than the income 411 00:19:12,480 --> 00:19:15,120 Speaker 1: limits allow for Yeah, and that's a key distinction because 412 00:19:15,119 --> 00:19:18,040 Speaker 1: I think Silas even used the words I want to 413 00:19:18,040 --> 00:19:19,920 Speaker 1: be able to use us to be able to increase 414 00:19:19,960 --> 00:19:22,480 Speaker 1: the amount I'm able to put towards my wrath array. 415 00:19:22,480 --> 00:19:24,920 Speaker 1: So it doesn't necessarily do that, although it does grant 416 00:19:24,960 --> 00:19:28,480 Speaker 1: you access if formally you did not have access. And 417 00:19:28,560 --> 00:19:32,200 Speaker 1: he also mentioned hsas at the beginning of his question 418 00:19:32,200 --> 00:19:35,360 Speaker 1: as well, So let's address those really quickly, because from 419 00:19:35,400 --> 00:19:40,119 Speaker 1: a tax standpoint, HSA's or health savings accounts are most 420 00:19:40,240 --> 00:19:44,360 Speaker 1: definitely the superior account as they are the only accounts 421 00:19:44,359 --> 00:19:47,360 Speaker 1: that are triple tax advantage. And actually there's a there's 422 00:19:47,359 --> 00:19:50,560 Speaker 1: a fourth tax benefit where your contributions can skip out 423 00:19:50,560 --> 00:19:53,480 Speaker 1: on payroll tax as well if this is an account 424 00:19:53,680 --> 00:19:57,320 Speaker 1: that has offered through your employer. So basically it's a 425 00:19:57,320 --> 00:19:59,720 Speaker 1: wonderful account when when you used properly, and one of 426 00:19:59,720 --> 00:20:02,000 Speaker 1: the best. We'll make sure to link to an article 427 00:20:02,119 --> 00:20:04,240 Speaker 1: about how great they are in the show notes again 428 00:20:04,560 --> 00:20:06,720 Speaker 1: for this episode. So if you're the kind of guy 429 00:20:06,880 --> 00:20:08,960 Speaker 1: who is organized and you're going to keep up with 430 00:20:09,000 --> 00:20:12,760 Speaker 1: those qualifying medical expenses in a spreadsheet for years down 431 00:20:12,800 --> 00:20:16,440 Speaker 1: the road. If that's you and you have a high 432 00:20:16,440 --> 00:20:20,200 Speaker 1: deductible healthcare plan that qualifies you for that HSA, then 433 00:20:20,200 --> 00:20:24,800 Speaker 1: by all means, make sure that you are prioritizing the HSA. 434 00:20:25,000 --> 00:20:27,520 Speaker 1: Like literally, there's no other tax of image account that 435 00:20:27,680 --> 00:20:31,200 Speaker 1: is as good as an HSA except for a four 436 00:20:31,280 --> 00:20:33,920 Speaker 1: one K with a match, because you're getting the best 437 00:20:33,920 --> 00:20:36,200 Speaker 1: bang for your buck there, because that's quite literally free 438 00:20:36,200 --> 00:20:39,040 Speaker 1: money that's coming your way from your employer. But beyond that, 439 00:20:39,160 --> 00:20:42,000 Speaker 1: the HSA is the next best option. Yeah, And so 440 00:20:42,040 --> 00:20:44,360 Speaker 1: if you're talking about, oh, should I try this loophole 441 00:20:44,359 --> 00:20:48,800 Speaker 1: five twenty nine to roth endeavor instead of the HSA, 442 00:20:49,040 --> 00:20:52,199 Speaker 1: which is basically the best retirement account known to man 443 00:20:52,480 --> 00:20:55,560 Speaker 1: given the tax benefits that it has said they come 444 00:20:55,600 --> 00:20:58,399 Speaker 1: with it, we would say, oh, HSA is definitely the 445 00:20:58,440 --> 00:21:01,040 Speaker 1: first priority. But there's also no role to say that 446 00:21:01,080 --> 00:21:03,600 Speaker 1: you can't do both. Right. You can invest retirement dollars 447 00:21:03,640 --> 00:21:06,919 Speaker 1: within an HSA, and you can invest within a roth IRA, 448 00:21:07,359 --> 00:21:10,320 Speaker 1: whether that's directly right if your income falls below that 449 00:21:10,359 --> 00:21:12,880 Speaker 1: income threshold that we just mentioned, or if it's via 450 00:21:12,880 --> 00:21:15,359 Speaker 1: that five twenty nine rollover, and there's actually a couple 451 00:21:15,400 --> 00:21:17,600 Speaker 1: of other ways to legally sneak money into a roth 452 00:21:17,640 --> 00:21:20,760 Speaker 1: ira if you normally wouldn't qualify. The five twenty nine 453 00:21:20,840 --> 00:21:23,440 Speaker 1: rollover is getting all the press right lately since those 454 00:21:23,520 --> 00:21:26,520 Speaker 1: changes have just happened. But there's also the backdoor ROTH 455 00:21:26,600 --> 00:21:29,960 Speaker 1: and then the megabackdoor roth, and the backdoor roth really 456 00:21:30,119 --> 00:21:32,439 Speaker 1: just allows for you to roll over money from a 457 00:21:32,480 --> 00:21:35,680 Speaker 1: traditional ira to a roth ira, and a megabackdoor WROTH 458 00:21:35,760 --> 00:21:37,159 Speaker 1: is when you roll over funds from a four O 459 00:21:37,240 --> 00:21:39,919 Speaker 1: one K to a roth ira. These strategies, though, they 460 00:21:39,960 --> 00:21:42,840 Speaker 1: come with a little added complexity and tax complications, so 461 00:21:43,160 --> 00:21:45,960 Speaker 1: it's worth looking into the nuance and the details of 462 00:21:46,000 --> 00:21:48,480 Speaker 1: each of those strategies, but they can help you achieve 463 00:21:48,560 --> 00:21:52,040 Speaker 1: the goal of having more investment dollars of funneling more 464 00:21:52,040 --> 00:21:54,280 Speaker 1: investment dollars into that WROTH account. Yeah, that's right, And 465 00:21:54,280 --> 00:21:58,080 Speaker 1: specifically the megabackdoor roth is an excellent way to greatly 466 00:21:58,200 --> 00:22:00,639 Speaker 1: expand the amount of money that you're able to funnel 467 00:22:00,680 --> 00:22:02,800 Speaker 1: into a funnel into a wrath. So with a five 468 00:22:02,800 --> 00:22:05,800 Speaker 1: to twenty nine, again, that's more about access, right, and 469 00:22:05,840 --> 00:22:07,840 Speaker 1: so it's like a it's a it's like a side 470 00:22:07,840 --> 00:22:10,360 Speaker 1: effect access. It's like a secondary benefit of a five 471 00:22:10,359 --> 00:22:12,400 Speaker 1: to twenty nine that you can eventually at some point 472 00:22:12,800 --> 00:22:15,760 Speaker 1: roll those dollars into a roth ira. But with a 473 00:22:16,320 --> 00:22:19,200 Speaker 1: mega backdoor roth you can greatly increase the amount of 474 00:22:19,200 --> 00:22:21,640 Speaker 1: money that you are socking away into a roth ira. 475 00:22:22,119 --> 00:22:24,480 Speaker 1: And you know, so all of these strategies are dependent 476 00:22:24,600 --> 00:22:28,120 Speaker 1: on the tax code as it currently stands. You kind 477 00:22:28,160 --> 00:22:30,520 Speaker 1: of touched on this, but like even what we think 478 00:22:30,560 --> 00:22:32,679 Speaker 1: of as as the four one K, like it'd simply 479 00:22:32,720 --> 00:22:35,639 Speaker 1: just called that because when the legislation passed back in 480 00:22:35,680 --> 00:22:38,560 Speaker 1: the day, it was in section four oh one and 481 00:22:38,680 --> 00:22:41,919 Speaker 1: it was listened down online K and so that like 482 00:22:41,920 --> 00:22:44,639 Speaker 1: that sped out the ability for an employer to offer 483 00:22:44,800 --> 00:22:48,240 Speaker 1: a retirement account to their employees. Bottom line, what I'm saying, 484 00:22:48,240 --> 00:22:51,160 Speaker 1: I guess is that any of this could change, though 485 00:22:51,160 --> 00:22:53,479 Speaker 1: the longer it's been around, I think, the less likely 486 00:22:53,880 --> 00:22:55,800 Speaker 1: that the government is going to get rid of it. Yeah, 487 00:22:55,800 --> 00:22:58,360 Speaker 1: the more entrenched those rules kind of become, will become 488 00:22:58,359 --> 00:23:00,399 Speaker 1: familiar with them. There you get us flies a little bit. 489 00:23:00,480 --> 00:23:02,359 Speaker 1: It's like, okay, no, this this has been around for 490 00:23:02,400 --> 00:23:04,000 Speaker 1: fifty years, all right, well this is probably not going 491 00:23:04,040 --> 00:23:06,040 Speaker 1: to go anywhere. And then any politicians saying let's end 492 00:23:06,040 --> 00:23:07,520 Speaker 1: the four oh one k. Everyone like gets up in 493 00:23:07,600 --> 00:23:09,520 Speaker 1: arms with pitchforks because he's going to be real popular 494 00:23:10,200 --> 00:23:13,440 Speaker 1: one thing. Yeah, they're like, no, you're fired. Don't don't 495 00:23:13,440 --> 00:23:15,960 Speaker 1: get rid of my favorite little retirement account totally. But yeah, 496 00:23:15,960 --> 00:23:19,120 Speaker 1: like socialist is family member. Like does make a good 497 00:23:19,119 --> 00:23:22,760 Speaker 1: point about the five twenty nine to roth rollover. This 498 00:23:22,840 --> 00:23:26,159 Speaker 1: is a brand new method, and so because of that, 499 00:23:26,200 --> 00:23:29,520 Speaker 1: the IRS hasn't offered much clarification on a few things 500 00:23:29,520 --> 00:23:31,280 Speaker 1: just yet. Is that the spirit of the law is 501 00:23:31,320 --> 00:23:32,800 Speaker 1: just to be able to use some of those excess 502 00:23:32,800 --> 00:23:35,720 Speaker 1: funds to roll into a roth ira for the beneficiary, 503 00:23:35,880 --> 00:23:38,480 Speaker 1: if not all of the funds are used for higher education. 504 00:23:39,160 --> 00:23:41,719 Speaker 1: But over time, it won't be surprising to see more 505 00:23:41,760 --> 00:23:45,280 Speaker 1: folks using their five twenty nine accounts in different creative 506 00:23:45,320 --> 00:23:48,400 Speaker 1: ways of folks find some of the different different loopholes. Yeah, yeah, 507 00:23:48,520 --> 00:23:50,719 Speaker 1: but this is brand new. So what I plan around 508 00:23:50,720 --> 00:23:54,119 Speaker 1: this loophole and assume that it's going to be around 509 00:23:54,119 --> 00:23:56,000 Speaker 1: and that the IRS isn't going to make clarification that 510 00:23:56,040 --> 00:23:58,679 Speaker 1: would prevent Silas from doing what he wants to do 511 00:23:58,720 --> 00:24:02,080 Speaker 1: with the five twenty nine to No, I probably wouldn't 512 00:24:02,119 --> 00:24:04,439 Speaker 1: I would at least until it's been around longer and 513 00:24:04,440 --> 00:24:07,080 Speaker 1: we've seen people use it in that way. I wouldn't 514 00:24:07,119 --> 00:24:10,600 Speaker 1: bank on this strategy. I'd pick something that's a little 515 00:24:10,600 --> 00:24:13,320 Speaker 1: more tried and true, right, because really, it would suck 516 00:24:13,440 --> 00:24:15,720 Speaker 1: to start funding your five twenty nine account as like 517 00:24:15,760 --> 00:24:18,440 Speaker 1: a full grown adult and then get some clarification. Maybe 518 00:24:18,440 --> 00:24:21,280 Speaker 1: that would prevent you from using those funds to fund 519 00:24:21,600 --> 00:24:23,800 Speaker 1: your own wrath from that five to twenty nine in 520 00:24:23,800 --> 00:24:26,520 Speaker 1: the future. And so for now, we'd take go with 521 00:24:26,560 --> 00:24:28,200 Speaker 1: the HSA. If you have access to one of those, 522 00:24:28,480 --> 00:24:31,080 Speaker 1: and if you have money leftover on top of it, 523 00:24:31,400 --> 00:24:34,000 Speaker 1: when used properly, that's a killer retirement account, one of 524 00:24:34,040 --> 00:24:36,160 Speaker 1: the best. And then four one K and IRA accounts 525 00:24:36,320 --> 00:24:39,080 Speaker 1: are the next tax advantaged accounts that are that are 526 00:24:39,080 --> 00:24:41,760 Speaker 1: really worth considering. What will you know? Definitely discuss on 527 00:24:41,760 --> 00:24:44,919 Speaker 1: the show if the IRS does offer more clarification on 528 00:24:44,960 --> 00:24:47,200 Speaker 1: the five twenty nine to Roth rollover how that works. 529 00:24:47,280 --> 00:24:51,280 Speaker 1: Who who's eligible? Because yeah, I just I don't want 530 00:24:51,280 --> 00:24:54,960 Speaker 1: you to put all your eggs in this basket, in 531 00:24:55,000 --> 00:24:57,760 Speaker 1: a very unproven, untested basket. Yeah, it's it's kind of 532 00:24:57,760 --> 00:25:00,760 Speaker 1: like pigeonholing your money to a specific purpose or a 533 00:25:00,760 --> 00:25:04,040 Speaker 1: specific task where it may not necessarily always be an 534 00:25:04,080 --> 00:25:05,400 Speaker 1: option for you to be able to roll that into 535 00:25:05,480 --> 00:25:07,960 Speaker 1: a roth. Right Essentially, it's just not what the five 536 00:25:08,040 --> 00:25:10,040 Speaker 1: twenty nine was designed for, right Like, the five twenty 537 00:25:10,119 --> 00:25:13,400 Speaker 1: nine was designed for higher education, but they introduced this 538 00:25:13,920 --> 00:25:16,679 Speaker 1: measure to allow you to do something else with that 539 00:25:17,040 --> 00:25:19,240 Speaker 1: in case you don't use it for what it was 540 00:25:19,240 --> 00:25:21,879 Speaker 1: originally designed and intended for. Right Like. It makes me 541 00:25:21,920 --> 00:25:24,439 Speaker 1: think of a baseball bat, which baseball bats are designed 542 00:25:24,480 --> 00:25:27,120 Speaker 1: like we're talking about soccer earlier. Right, So, baseball bats 543 00:25:27,160 --> 00:25:29,840 Speaker 1: are designed to hit baseball's But what if you don't 544 00:25:29,840 --> 00:25:32,200 Speaker 1: play baseball anymore, but you still have the bat laying around, Well, 545 00:25:32,200 --> 00:25:34,040 Speaker 1: you can keep it around your house and you can 546 00:25:34,119 --> 00:25:36,520 Speaker 1: use it for self defense in case someone breaks into 547 00:25:36,560 --> 00:25:38,320 Speaker 1: your house. Right Like, That's definitely not what it was 548 00:25:38,359 --> 00:25:40,879 Speaker 1: made for. But you know what, all's not lost if 549 00:25:40,880 --> 00:25:44,480 Speaker 1: you don't play baseball anymore. This isn't something I do personally, 550 00:25:44,640 --> 00:25:47,080 Speaker 1: if I don't know why I thought of it. Have 551 00:25:47,160 --> 00:25:48,439 Speaker 1: you ever seen Back to the Future, You know when 552 00:25:48,480 --> 00:25:50,280 Speaker 1: he goes back in time and he goes he climbs 553 00:25:50,280 --> 00:25:53,080 Speaker 1: in through the window and it's like there's another family 554 00:25:53,119 --> 00:25:55,879 Speaker 1: there and the dad comes up, comes in with a 555 00:25:55,920 --> 00:25:58,520 Speaker 1: baseball bat, and he's just yeah, just made me think 556 00:25:58,520 --> 00:26:00,840 Speaker 1: of that for some reason. But bottom line, that's not 557 00:26:00,880 --> 00:26:04,159 Speaker 1: what it was designed for. It's there more as a 558 00:26:04,240 --> 00:26:06,959 Speaker 1: stop gap. It's a way for you to not have 559 00:26:07,040 --> 00:26:08,879 Speaker 1: to pay that ten percent penalty were you to not 560 00:26:08,960 --> 00:26:11,199 Speaker 1: use that for higher education. There are other ways for 561 00:26:11,280 --> 00:26:13,679 Speaker 1: silence to get money into a roth didn't even have 562 00:26:13,680 --> 00:26:15,800 Speaker 1: to go that route. So I would say it's just 563 00:26:15,800 --> 00:26:17,879 Speaker 1: not worth it, you know, given the potential restrictions that 564 00:26:17,920 --> 00:26:21,359 Speaker 1: could be imposed on that strategy for certain people in 565 00:26:21,359 --> 00:26:23,800 Speaker 1: certain situations in the future. All right, man, let's get 566 00:26:23,840 --> 00:26:26,359 Speaker 1: to our next question. This one is about saving up 567 00:26:26,359 --> 00:26:29,920 Speaker 1: money for his little girl. Hi, joel Maette, This was 568 00:26:30,000 --> 00:26:34,639 Speaker 1: Tim from Michigan. I had a question about retirement accounts 569 00:26:34,720 --> 00:26:38,040 Speaker 1: for my one year old daughter. I have seen the 570 00:26:38,080 --> 00:26:41,320 Speaker 1: custodia a custodial account, but I know that you have 571 00:26:41,400 --> 00:26:44,399 Speaker 1: to have earned income to contribute to that. I'm curious 572 00:26:44,440 --> 00:26:47,280 Speaker 1: if there's something that I can open for her to 573 00:26:47,320 --> 00:26:50,840 Speaker 1: contribute funds just directly from me that one day I 574 00:26:50,840 --> 00:26:53,200 Speaker 1: can turn over to her, whether she's eighteen or would 575 00:26:53,200 --> 00:26:55,920 Speaker 1: she supposed to retirement, whatever, that might be that would 576 00:26:55,920 --> 00:26:59,520 Speaker 1: allow me to basically not have her have a job 577 00:26:59,640 --> 00:27:01,600 Speaker 1: as she's only one years old, so any sort of 578 00:27:01,640 --> 00:27:04,919 Speaker 1: recommendation would be great. Love the show, Thanks guys. Not 579 00:27:04,920 --> 00:27:06,600 Speaker 1: sure what Tim's got against his one year old working. 580 00:27:06,720 --> 00:27:10,520 Speaker 1: By the way, Matt, I think she's ready baby modeling 581 00:27:10,960 --> 00:27:13,199 Speaker 1: or like baby actors. That is a legit way to 582 00:27:13,240 --> 00:27:15,920 Speaker 1: put its true to put your your one year old work, 583 00:27:16,480 --> 00:27:18,800 Speaker 1: but bottle. Basically, let's keep talking about five twenty nine 584 00:27:18,800 --> 00:27:21,359 Speaker 1: accounts here because you know it may not be the 585 00:27:21,400 --> 00:27:24,480 Speaker 1: best option for silists our last listener question, but it 586 00:27:24,560 --> 00:27:26,720 Speaker 1: might be the best option when it comes to saving 587 00:27:26,800 --> 00:27:30,399 Speaker 1: for Tim's daughter's future. So we've changed our tune on 588 00:27:30,400 --> 00:27:34,480 Speaker 1: five twenty nine accounts thanks to the added Roth rollover 589 00:27:34,520 --> 00:27:36,720 Speaker 1: flexibility that we just talked about. We used to basically 590 00:27:36,800 --> 00:27:40,280 Speaker 1: always steer, not always, but mostly steer people away from 591 00:27:40,280 --> 00:27:43,120 Speaker 1: five twenty nine accounts because of the limited flexibility, But 592 00:27:43,520 --> 00:27:46,119 Speaker 1: the passage of Secure Act two point now it's a 593 00:27:46,160 --> 00:27:48,280 Speaker 1: different ball game in twenty twenty three now in how 594 00:27:48,320 --> 00:27:50,360 Speaker 1: we think about five twenty nine accounts in a big 595 00:27:50,359 --> 00:27:53,680 Speaker 1: way exactly and basically because Tim like this is money 596 00:27:53,680 --> 00:27:56,160 Speaker 1: that he could use for higher education, so you he 597 00:27:56,200 --> 00:27:58,919 Speaker 1: could essentially put that money away with the intent of 598 00:27:59,040 --> 00:28:01,360 Speaker 1: using it for to pay for college. But if that 599 00:28:01,520 --> 00:28:04,280 Speaker 1: didn't happen to work out, then he's got a fallback option. 600 00:28:04,560 --> 00:28:08,280 Speaker 1: He's got a secondary use for that money without again 601 00:28:08,320 --> 00:28:10,800 Speaker 1: getting hit without massive penalty. Yeah, and again he would 602 00:28:10,840 --> 00:28:13,000 Speaker 1: now be using the five point nine plan the way 603 00:28:13,000 --> 00:28:16,200 Speaker 1: it was intended, right as he's kind of crushing those 604 00:28:16,200 --> 00:28:19,280 Speaker 1: baseballs trying to gain that system. Yeah, exactly. Although we 605 00:28:19,280 --> 00:28:21,000 Speaker 1: still want to encourage chow to money listeners to make 606 00:28:21,040 --> 00:28:24,120 Speaker 1: sure that they're prioritizing their own retirement accounts before they 607 00:28:24,119 --> 00:28:27,200 Speaker 1: start saving for their kids in a meaningful way, right, Tim, 608 00:28:27,280 --> 00:28:30,000 Speaker 1: your personal four oh one K and Roth contributions, they 609 00:28:30,040 --> 00:28:33,960 Speaker 1: take priority over making contributions to that five to twenty 610 00:28:34,000 --> 00:28:37,879 Speaker 1: nine account for your young daughter. But basically, Matt for Tim, 611 00:28:37,880 --> 00:28:40,080 Speaker 1: like he's wanting to save in a retirement account for 612 00:28:40,320 --> 00:28:42,720 Speaker 1: his daughter is what it sounds like to me, which 613 00:28:42,840 --> 00:28:45,120 Speaker 1: is ambitious given her age, Like that's that's really awesome 614 00:28:45,160 --> 00:28:46,840 Speaker 1: to be able to start her off that young. You 615 00:28:46,880 --> 00:28:50,040 Speaker 1: really can help her build an incredible amount of wealth, 616 00:28:50,240 --> 00:28:54,000 Speaker 1: largely given her timeline and when you're starting so you 617 00:28:54,040 --> 00:28:56,280 Speaker 1: can't contribute to a roth ira, as Tim alluded to, 618 00:28:56,400 --> 00:28:58,800 Speaker 1: unless he unless she had earned income, unless she was 619 00:28:58,840 --> 00:29:01,440 Speaker 1: doing some baby modeling like you suggested, Matt. If she 620 00:29:01,520 --> 00:29:03,720 Speaker 1: became like, I don't know, like a baby gerber kid 621 00:29:03,800 --> 00:29:06,120 Speaker 1: or something like that exactly, then you know, then she 622 00:29:06,160 --> 00:29:07,920 Speaker 1: would be able to use the money that she earned 623 00:29:07,960 --> 00:29:09,960 Speaker 1: and put it into a roth ry. But most kids 624 00:29:10,040 --> 00:29:13,240 Speaker 1: at one don't do that. Child labor is mostly frowned upon, 625 00:29:13,480 --> 00:29:15,400 Speaker 1: and so that's you know, it's unlikely to happen for 626 00:29:15,440 --> 00:29:18,160 Speaker 1: some time for her. But again, before the recent law change, 627 00:29:18,160 --> 00:29:20,960 Speaker 1: your only other option was an UGMA or an UTMA account. 628 00:29:21,360 --> 00:29:24,320 Speaker 1: Those came with from downsides too. But now the five 629 00:29:24,400 --> 00:29:26,440 Speaker 1: twenty nine account is a slam dune for this goal. 630 00:29:26,680 --> 00:29:29,479 Speaker 1: That's right, Yeah, less than ideal for Silas. Sounds perfect 631 00:29:29,480 --> 00:29:32,360 Speaker 1: though for Tim, and he can start contributing to that 632 00:29:32,360 --> 00:29:34,720 Speaker 1: five to twenty nine account now he doesn't have to 633 00:29:34,720 --> 00:29:38,400 Speaker 1: wait until she starts to work. Yeah, and he probably should. Yeah. 634 00:29:38,440 --> 00:29:40,800 Speaker 1: And so Tim, you're going to get a state deduction 635 00:29:41,080 --> 00:29:44,720 Speaker 1: there in Michigan, specifically on your contributions up to five 636 00:29:44,760 --> 00:29:47,200 Speaker 1: thousand dollars if you're a single filer, and it's up 637 00:29:47,200 --> 00:29:49,680 Speaker 1: to ten thousand dollars if you file jointly, and this 638 00:29:49,800 --> 00:29:52,080 Speaker 1: varies from state to state, so everyone else out there 639 00:29:52,120 --> 00:29:55,120 Speaker 1: they can just google like your state plus five twenty 640 00:29:55,200 --> 00:29:59,040 Speaker 1: nine deduction to figure out what that dollar amount is. So, 641 00:29:59,080 --> 00:30:00,959 Speaker 1: for instance, here in Georgia, it's eight thousand dollars if 642 00:30:00,960 --> 00:30:05,080 Speaker 1: you're filing jointly perk kid. But then some states, like Texas, 643 00:30:05,520 --> 00:30:08,240 Speaker 1: they don't offer that perk, right, And so for folks 644 00:30:08,280 --> 00:30:11,200 Speaker 1: out there who don't have any home state deductions, you 645 00:30:11,200 --> 00:30:14,200 Speaker 1: don't have that homestate advantage for their five twenty nine plans. 646 00:30:14,240 --> 00:30:15,880 Speaker 1: The good news is that you can go with a 647 00:30:15,880 --> 00:30:18,640 Speaker 1: five twenty nine plan that's offered by a different state, 648 00:30:18,920 --> 00:30:21,880 Speaker 1: which is kind of confusing, yeah, but it's kind of awesome. Well, 649 00:30:21,880 --> 00:30:23,960 Speaker 1: that allows you then to pick the state that has 650 00:30:24,080 --> 00:30:27,080 Speaker 1: the best overall plans, one with the lowest investment fees 651 00:30:27,160 --> 00:30:30,080 Speaker 1: or the best investing options. Morning Stars specifically, they always 652 00:30:30,080 --> 00:30:32,800 Speaker 1: do a great job comparing the top plans out there. 653 00:30:32,840 --> 00:30:35,320 Speaker 1: I think Utah is maybe one of the best ones 654 00:30:35,400 --> 00:30:37,240 Speaker 1: right now up there, but we'll make sure there's so 655 00:30:37,240 --> 00:30:39,440 Speaker 1: many good ones now they've gotten so competitive, and it 656 00:30:39,640 --> 00:30:41,200 Speaker 1: used to us to be terrible there. A lot of 657 00:30:41,200 --> 00:30:42,640 Speaker 1: them used to be bad, and so many of them 658 00:30:42,680 --> 00:30:45,080 Speaker 1: have like gotten like ship shape over the years, and 659 00:30:45,120 --> 00:30:48,000 Speaker 1: so there's just so many good options, which is awesome 660 00:30:48,040 --> 00:30:51,160 Speaker 1: access to like Vanguard funds, and yeah, we're in the 661 00:30:51,160 --> 00:30:54,520 Speaker 1: modern era now for awesome five twenty nine plans that 662 00:30:54,560 --> 00:30:56,640 Speaker 1: are offered by lots of different states. Even better, when 663 00:30:56,680 --> 00:30:58,240 Speaker 1: you're tim or when you're US and you live in 664 00:30:58,240 --> 00:30:59,920 Speaker 1: a state that gives you the state tax deduction for 665 00:31:00,040 --> 00:31:01,720 Speaker 1: socking money away, and then that's right, all right, But 666 00:31:01,800 --> 00:31:03,840 Speaker 1: putting that money in a five twenty nine it also 667 00:31:03,880 --> 00:31:06,200 Speaker 1: means that you can start investing that money for her future. Right, 668 00:31:06,240 --> 00:31:08,040 Speaker 1: So when you sock the money away in a five 669 00:31:08,080 --> 00:31:09,960 Speaker 1: twenty nine plan, you're not putting it in a savings 670 00:31:09,960 --> 00:31:12,920 Speaker 1: equivalent plan. Especially when you're talking about socking that money 671 00:31:12,960 --> 00:31:15,440 Speaker 1: away for a one year old. You want to invest 672 00:31:15,520 --> 00:31:18,560 Speaker 1: it into something like a total stock market fund or 673 00:31:18,600 --> 00:31:20,920 Speaker 1: they have age based portfolios that you can sock that 674 00:31:20,960 --> 00:31:23,840 Speaker 1: money into that allows that money to grow for her 675 00:31:23,880 --> 00:31:28,200 Speaker 1: future or building wealth for decades to come. And again, 676 00:31:28,280 --> 00:31:31,040 Speaker 1: she's won, so once she turns sixteen, you are going 677 00:31:31,080 --> 00:31:32,560 Speaker 1: to then be able to start moving that money over 678 00:31:32,640 --> 00:31:35,840 Speaker 1: to a roth ira for her. If it turns out 679 00:31:35,880 --> 00:31:38,600 Speaker 1: you might not need that for future schooling endeavors. And 680 00:31:38,640 --> 00:31:41,719 Speaker 1: that five plan basically has to have been open for 681 00:31:41,760 --> 00:31:44,320 Speaker 1: at least fifteen years, and you can only transfer money 682 00:31:44,360 --> 00:31:46,000 Speaker 1: that's been in the account for at least five years. 683 00:31:46,000 --> 00:31:48,520 Speaker 1: It needs like a seasoning period for some of that money. 684 00:31:48,680 --> 00:31:51,360 Speaker 1: And you're still subject to the annual contribution limits and 685 00:31:51,440 --> 00:31:54,840 Speaker 1: to that total lifetime cap of thirty five k transferred 686 00:31:54,840 --> 00:31:58,360 Speaker 1: into a ROTH. But Tim, if you're intent on investing 687 00:31:58,400 --> 00:32:00,760 Speaker 1: for her future, this is just the best method now 688 00:32:00,760 --> 00:32:03,680 Speaker 1: in our opinion. And and it's pretty much a grand slams. 689 00:32:03,680 --> 00:32:06,760 Speaker 1: That's we're using baseball terminology, Matt, there's not there's just 690 00:32:06,800 --> 00:32:09,560 Speaker 1: not a better option for I was going to say something, 691 00:32:09,600 --> 00:32:11,600 Speaker 1: and I'm like, that's not We're gonna stick with the 692 00:32:11,600 --> 00:32:14,920 Speaker 1: bass a baseball, right. So yeah, and on top of that, 693 00:32:14,920 --> 00:32:16,760 Speaker 1: you might have extra to pay for her education. So 694 00:32:16,800 --> 00:32:19,120 Speaker 1: it seems like it's a win win for Tim and 695 00:32:19,240 --> 00:32:21,880 Speaker 1: his goals and kind of where he's where he's at, 696 00:32:22,480 --> 00:32:24,720 Speaker 1: that's right. Which, by the way, have we haven't talked 697 00:32:24,720 --> 00:32:26,880 Speaker 1: about the new rules that passed with baseball? How do 698 00:32:26,920 --> 00:32:29,360 Speaker 1: you feel about the the there's like a it's like 699 00:32:29,400 --> 00:32:31,120 Speaker 1: a shot clock for basketball. But now there's like a 700 00:32:31,160 --> 00:32:32,760 Speaker 1: pitching cloth. I think it's great. I think it's great, 701 00:32:33,000 --> 00:32:34,360 Speaker 1: or or where you have to step inside the box 702 00:32:34,440 --> 00:32:36,040 Speaker 1: to speed the game up a little bit. I'll be honest, 703 00:32:36,040 --> 00:32:39,680 Speaker 1: Like my own attention span has diminished, and so I 704 00:32:39,720 --> 00:32:41,440 Speaker 1: love baseball, but it needs to be a little quick 705 00:32:41,520 --> 00:32:44,000 Speaker 1: smalls on the comeback baby. Yeah. But so one other 706 00:32:44,000 --> 00:32:45,920 Speaker 1: thing I wanted to mention to Tim as well is 707 00:32:46,720 --> 00:32:49,120 Speaker 1: I guess from personal experience, the older I get, the 708 00:32:49,160 --> 00:32:52,840 Speaker 1: more I question setting aside money for my kids, uh, 709 00:32:52,920 --> 00:32:55,760 Speaker 1: for them to acquire this big chunk of money when 710 00:32:55,800 --> 00:32:57,760 Speaker 1: they leave home. And I think one of the things 711 00:32:57,760 --> 00:32:59,360 Speaker 1: I would challenge to him to do is to think 712 00:32:59,360 --> 00:33:00,960 Speaker 1: through what else he could do with that money in 713 00:33:00,960 --> 00:33:03,000 Speaker 1: the here now while his kids are still at home. Right, 714 00:33:03,040 --> 00:33:06,280 Speaker 1: so I'm thinking of like travel or educational experiences like 715 00:33:06,280 --> 00:33:09,720 Speaker 1: extracurricular kind of things, annual pass through the local museum. Yeah, 716 00:33:09,760 --> 00:33:13,080 Speaker 1: like things like that that could just not only enrich 717 00:33:13,160 --> 00:33:16,120 Speaker 1: their lives now, but just to create memories. But also, 718 00:33:16,640 --> 00:33:18,200 Speaker 1: I don't know I say this to my kids, they're 719 00:33:18,240 --> 00:33:20,400 Speaker 1: probably they don't really listen to the podcast, right, They 720 00:33:20,400 --> 00:33:22,280 Speaker 1: are unlikely going to listen to this episode when they're 721 00:33:22,320 --> 00:33:25,400 Speaker 1: older and to be bummed out when they hear me 722 00:33:25,440 --> 00:33:28,720 Speaker 1: say this. But I am more interested, I guess, and 723 00:33:28,840 --> 00:33:30,680 Speaker 1: doing those kind of things as opposed to setting them 724 00:33:30,760 --> 00:33:32,960 Speaker 1: up with a large chunk of cash, because part of 725 00:33:32,960 --> 00:33:34,640 Speaker 1: me also wants to everyone's got their own goals. On 726 00:33:34,640 --> 00:33:36,840 Speaker 1: that everyone's got their own goals, absolutely, but I also 727 00:33:36,880 --> 00:33:39,600 Speaker 1: want to just be able to preserve their drive and 728 00:33:39,640 --> 00:33:42,800 Speaker 1: their desire to go out and kill something and like 729 00:33:42,840 --> 00:33:45,000 Speaker 1: make something like on their own, like to make make 730 00:33:45,040 --> 00:33:46,680 Speaker 1: their way out in the world. Even if I do 731 00:33:46,680 --> 00:33:48,240 Speaker 1: give them something, I don't want them to know I'm 732 00:33:48,240 --> 00:33:51,280 Speaker 1: giving them something, yes, until the day of that gift 733 00:33:51,280 --> 00:33:52,840 Speaker 1: to curse. I just kind of want to keep it 734 00:33:53,000 --> 00:33:55,960 Speaker 1: on the down low and exactly so, I think that's yeah, 735 00:33:55,960 --> 00:33:58,200 Speaker 1: because you don't want to like, yeah, when you turn eighteen, 736 00:33:58,240 --> 00:34:00,280 Speaker 1: there's going to be this giant essay coming here. You're 737 00:34:00,320 --> 00:34:02,440 Speaker 1: gonna be able to buy land your kids with dollar 738 00:34:02,440 --> 00:34:05,160 Speaker 1: signs on the right, there's counting down the days and 739 00:34:05,160 --> 00:34:06,920 Speaker 1: then yeah, it does. I think you're right, Like, if 740 00:34:06,960 --> 00:34:08,920 Speaker 1: you if you avoid talking about it for the most part, 741 00:34:09,160 --> 00:34:11,200 Speaker 1: I think you can help preserve some of that that 742 00:34:11,280 --> 00:34:13,320 Speaker 1: drive that you want your kids to have. Exactly. I 743 00:34:13,360 --> 00:34:14,920 Speaker 1: think that pursue their own goals, and the old the 744 00:34:14,960 --> 00:34:16,680 Speaker 1: older I get, the more I think, I don't know. 745 00:34:16,760 --> 00:34:19,399 Speaker 1: I think I've realized that that is important to kind 746 00:34:19,400 --> 00:34:22,200 Speaker 1: of set them up with the ability to go out 747 00:34:22,239 --> 00:34:24,440 Speaker 1: and make their own money. And I think oftentimes that 748 00:34:24,719 --> 00:34:27,160 Speaker 1: comes through just intentional time spent with them and again 749 00:34:27,200 --> 00:34:30,200 Speaker 1: some of those other things that you can purchase with money, 750 00:34:30,239 --> 00:34:33,399 Speaker 1: like again some of those experiences and whatnot. But we've 751 00:34:33,400 --> 00:34:35,000 Speaker 1: got a couple other questions that we're going to get 752 00:34:35,040 --> 00:34:37,600 Speaker 1: to here right after the break, including we're going to 753 00:34:37,680 --> 00:34:41,200 Speaker 1: discuss some of the different tax preparations software that is 754 00:34:41,280 --> 00:34:43,920 Speaker 1: available for folks. We'll get to that plus another right 755 00:34:44,040 --> 00:34:55,120 Speaker 1: after this. All right, Matt, we're back from the break, 756 00:34:55,160 --> 00:34:56,560 Speaker 1: and we're gonna get to a listener here in a 757 00:34:56,600 --> 00:34:58,200 Speaker 1: second who says, is it too late for me to 758 00:34:58,200 --> 00:35:00,759 Speaker 1: be investing in stocks? Well, but let's first get to 759 00:35:01,120 --> 00:35:05,360 Speaker 1: a question about from another listener about his taxes. Hey guys, 760 00:35:05,840 --> 00:35:09,160 Speaker 1: Sean here from College Station, Texas. Thank you for all 761 00:35:09,160 --> 00:35:13,000 Speaker 1: the great work on the podcast and newsletter. Your topics 762 00:35:13,000 --> 00:35:17,080 Speaker 1: have helped me spark meaningful conversations with my wife, kids, 763 00:35:17,120 --> 00:35:20,719 Speaker 1: and friends. I wanted to get y'all's opinion on using 764 00:35:20,800 --> 00:35:24,680 Speaker 1: free file sites like free tax USA or cash app 765 00:35:24,760 --> 00:35:29,359 Speaker 1: taxes versus paid services like TurboTax. I've been a long 766 00:35:29,440 --> 00:35:32,320 Speaker 1: time user of TurboTax and have never had any issues. 767 00:35:33,200 --> 00:35:38,239 Speaker 1: Any solid wisdom you can provide on tax prep websites, tools, practices, 768 00:35:38,600 --> 00:35:42,280 Speaker 1: scams and places to avoid would be great. Thanks again, 769 00:35:42,400 --> 00:35:45,640 Speaker 1: and God bless y'all. All Right, So Sean is from Texas, 770 00:35:45,640 --> 00:35:49,640 Speaker 1: which means he does not get that state deduction nine contributions, 771 00:35:49,760 --> 00:35:53,600 Speaker 1: So sorry for you and your kids there. Yeah, but again, 772 00:35:54,160 --> 00:35:56,440 Speaker 1: hit up the show. He states with no income tax, 773 00:35:57,000 --> 00:35:59,560 Speaker 1: they probably are happy they pay no staying income tax. 774 00:35:59,600 --> 00:36:01,439 Speaker 1: But then they all so don't don't get that break 775 00:36:01,480 --> 00:36:04,160 Speaker 1: a small little text, right because they don't need to know. Also, 776 00:36:04,200 --> 00:36:06,239 Speaker 1: did you notice what Sean said that he's enjoying the 777 00:36:06,280 --> 00:36:09,239 Speaker 1: podcast and the newsletter. Oh you mean the greatest money 778 00:36:09,239 --> 00:36:11,680 Speaker 1: newsletter in the history of the world, Matt in all 779 00:36:11,719 --> 00:36:14,200 Speaker 1: the states. Sean knows what's up. So for all of 780 00:36:14,239 --> 00:36:16,200 Speaker 1: you out there who have not checked out the how 781 00:36:16,239 --> 00:36:18,160 Speaker 1: to Money in the newsletter, head to how Tomoney dot 782 00:36:18,200 --> 00:36:21,600 Speaker 1: com Forward slash newsletter drops every Tuesday morning. Sign up 783 00:36:21,600 --> 00:36:24,480 Speaker 1: now you'll be glad you did. But Sean has a 784 00:36:24,520 --> 00:36:28,080 Speaker 1: tax filing question. At this point, folks, they've only got like, 785 00:36:28,120 --> 00:36:30,640 Speaker 1: I think a little more than four weeks, is that right? Yeah, Yeah, 786 00:36:31,080 --> 00:36:33,120 Speaker 1: this is one of those things that is very much 787 00:36:33,120 --> 00:36:34,879 Speaker 1: on the minds of a lot of folks who have 788 00:36:34,960 --> 00:36:37,719 Speaker 1: yet to file their taxes. So yeah, let's let's dive in. 789 00:36:37,719 --> 00:36:39,520 Speaker 1: All right, let's do it. Basically, I think what Shan 790 00:36:39,680 --> 00:36:42,600 Speaker 1: is asking, are different tax filing services better than others, 791 00:36:42,960 --> 00:36:46,560 Speaker 1: And the answer to that question is yes, but you're 792 00:36:46,560 --> 00:36:49,239 Speaker 1: not getting vastly different products based on what we can tell. 793 00:36:49,440 --> 00:36:53,040 Speaker 1: And so Consumer reports they've tested the online versions of 794 00:36:53,080 --> 00:36:55,400 Speaker 1: the big name software services a few years back, and 795 00:36:55,400 --> 00:36:58,120 Speaker 1: they found that they were all pretty similar, like not 796 00:36:58,400 --> 00:37:02,520 Speaker 1: terribly different. Basically, H and R, Block, Tax Act, Tax Layer, 797 00:37:02,640 --> 00:37:05,600 Speaker 1: and Turbo Tax those are kind of the big, biggest four. 798 00:37:05,800 --> 00:37:08,200 Speaker 1: They all have comparable offerings. They pretty much all have 799 00:37:08,239 --> 00:37:11,200 Speaker 1: a free option, but it's incredibly limited really only for 800 00:37:11,400 --> 00:37:14,160 Speaker 1: the most basic returns and for instance, like they all 801 00:37:14,200 --> 00:37:17,160 Speaker 1: include the ability to input your W two, your unemployment 802 00:37:17,360 --> 00:37:20,440 Speaker 1: and Social Security income. But beyond that, but you're they're 803 00:37:20,440 --> 00:37:21,880 Speaker 1: gonna want some money. That's all you can do. You 804 00:37:21,920 --> 00:37:24,040 Speaker 1: gotta get you gotta pay for the upgrade, right, And 805 00:37:24,080 --> 00:37:26,319 Speaker 1: so if you want to deduct charitable contributions or you 806 00:37:26,360 --> 00:37:28,920 Speaker 1: need to report side hustle income, you're gonna have to 807 00:37:28,920 --> 00:37:30,600 Speaker 1: pony up. You're gonna have to pay extra. And so 808 00:37:30,600 --> 00:37:32,920 Speaker 1: if your return is fairly straightforward, i'd let price be 809 00:37:32,920 --> 00:37:35,200 Speaker 1: the guide here and I just pay close attention though 810 00:37:35,239 --> 00:37:37,480 Speaker 1: to what they charge extra for and see if that 811 00:37:38,080 --> 00:37:41,319 Speaker 1: offering really fits your specific situation. Yeah, make sure it 812 00:37:41,320 --> 00:37:44,759 Speaker 1: fits your tax filing needs. And so don't forget that 813 00:37:44,760 --> 00:37:47,880 Speaker 1: folks out there who have an adjusted gross income and 814 00:37:48,000 --> 00:37:50,960 Speaker 1: agi lower than seventy three thousand that they can file 815 00:37:50,960 --> 00:37:55,120 Speaker 1: their federal taxes full free via the IRS Free File website. 816 00:37:55,120 --> 00:37:56,560 Speaker 1: Will link to that in the show notes as well. 817 00:37:56,680 --> 00:37:58,719 Speaker 1: And actually, one thing to note on that, and this 818 00:37:58,760 --> 00:38:02,279 Speaker 1: is the reason why you're slightly sour on TurboTax that 819 00:38:02,360 --> 00:38:05,319 Speaker 1: specific product, is that they've tried to suppress the free 820 00:38:05,320 --> 00:38:08,880 Speaker 1: file system for years, and they actually left the program 821 00:38:08,880 --> 00:38:11,560 Speaker 1: back in twenty twenty one. They offer a good product now, 822 00:38:11,800 --> 00:38:13,239 Speaker 1: and this is something that they've done the past, but 823 00:38:13,280 --> 00:38:16,120 Speaker 1: we felt that that was at least worth mentioning. And 824 00:38:16,280 --> 00:38:19,279 Speaker 1: there are just these different little carve outs and different things, 825 00:38:19,360 --> 00:38:20,920 Speaker 1: these little caveats that you have to keep an eye 826 00:38:20,920 --> 00:38:24,960 Speaker 1: out for, like, for instance, Tax Act and Free Tax USA. 827 00:38:25,080 --> 00:38:28,160 Speaker 1: They're both solid, but they charge for filing your state return, 828 00:38:28,239 --> 00:38:31,359 Speaker 1: and so that's it's like a little gotcha. They get 829 00:38:31,360 --> 00:38:32,640 Speaker 1: to the end, you're like an eye out for I 830 00:38:32,680 --> 00:38:34,080 Speaker 1: thought it was free tax filing, and then it's like 831 00:38:34,200 --> 00:38:36,319 Speaker 1: now it's nineteen ninety nine to file the state, which 832 00:38:36,360 --> 00:38:37,799 Speaker 1: like that's not a lot of money, but you just 833 00:38:37,880 --> 00:38:39,200 Speaker 1: input all the stuff and you're like, well, of course 834 00:38:39,200 --> 00:38:43,160 Speaker 1: I'm up taxes exactly, but it's it's annoying. It's the 835 00:38:43,160 --> 00:38:45,480 Speaker 1: price of transparency that again, we want to make sure 836 00:38:45,520 --> 00:38:47,560 Speaker 1: that it's something that you are aware of, which is 837 00:38:47,880 --> 00:38:51,480 Speaker 1: why we're taking this question. But basically, folks that have 838 00:38:51,520 --> 00:38:54,840 Speaker 1: a straight forward tax situation, they can and they should 839 00:38:55,000 --> 00:38:57,439 Speaker 1: likely file their own taxes. And so if it's mostly 840 00:38:57,440 --> 00:38:59,560 Speaker 1: a ten forty and you're just taking the standard deduction, 841 00:39:00,040 --> 00:39:03,080 Speaker 1: then doing it yourself that is the way to go. Actually, 842 00:39:03,120 --> 00:39:06,239 Speaker 1: according to data from the IRS, eighty seven percent of 843 00:39:06,320 --> 00:39:09,000 Speaker 1: folks took the standard deduction just a few years ago. 844 00:39:09,320 --> 00:39:11,239 Speaker 1: A lot of folks do this, so it shouldn't be 845 00:39:11,280 --> 00:39:13,480 Speaker 1: too hard, it shouldn't take too long. If you have 846 00:39:13,480 --> 00:39:16,040 Speaker 1: a really simple tax return, then free filing it yourself 847 00:39:16,080 --> 00:39:17,359 Speaker 1: might be the way to go. Yeah, And one more 848 00:39:17,480 --> 00:39:20,720 Speaker 1: worth mentioning is cash app Taxes, which offers free federal 849 00:39:20,800 --> 00:39:23,840 Speaker 1: and state filing no matter your income. So when it 850 00:39:23,880 --> 00:39:26,920 Speaker 1: comes to the free file system, we're talking about AGI 851 00:39:26,960 --> 00:39:30,440 Speaker 1: limits for the free return, but cash apps offering it 852 00:39:30,480 --> 00:39:34,239 Speaker 1: for everyone. So I think that's that's definitely a worthwhile consideration. 853 00:39:34,480 --> 00:39:36,480 Speaker 1: What did it used to be? I think it used 854 00:39:36,480 --> 00:39:38,919 Speaker 1: to be credit harm attacks and then and then cash 855 00:39:38,920 --> 00:39:40,440 Speaker 1: app taxes took that over. I don't know how that 856 00:39:40,480 --> 00:39:42,200 Speaker 1: transaction they buy it from. The credit harm a tax 857 00:39:42,320 --> 00:39:44,480 Speaker 1: used to also be excellent, and so cash app got 858 00:39:44,520 --> 00:39:46,839 Speaker 1: to get all the goodness that they had already set 859 00:39:46,920 --> 00:39:49,279 Speaker 1: up for years there. And cash app Taxes is totally 860 00:39:49,320 --> 00:39:51,279 Speaker 1: sold created. They're getting information on you, but so are 861 00:39:51,320 --> 00:39:54,560 Speaker 1: all the other tax preparing software. So I think cash 862 00:39:54,560 --> 00:39:56,640 Speaker 1: app Taxes has a great product. But let's say your 863 00:39:56,640 --> 00:40:00,560 Speaker 1: situation is more complex, your taxes are not incredibly straightforward. 864 00:40:00,800 --> 00:40:03,200 Speaker 1: You're not taking the standard deduction, let's say, or you're 865 00:40:03,200 --> 00:40:06,880 Speaker 1: making income in other ways, you're a crypto investor or 866 00:40:06,880 --> 00:40:09,399 Speaker 1: something like that. It's smart then to hire a tax 867 00:40:09,400 --> 00:40:11,680 Speaker 1: pro and that means like, if you're self employed even 868 00:40:11,880 --> 00:40:14,600 Speaker 1: or you've inherited some money, then it probably makes sense 869 00:40:14,600 --> 00:40:16,879 Speaker 1: to hire a CPA or an enrolled agent who does 870 00:40:16,920 --> 00:40:19,760 Speaker 1: tax and so we would say, get recommendations from friends 871 00:40:20,160 --> 00:40:23,640 Speaker 1: who does their taxes, how have they been, Make sure 872 00:40:23,680 --> 00:40:26,480 Speaker 1: that the preparer has experience, that they're like brand new 873 00:40:26,520 --> 00:40:28,319 Speaker 1: on the block, and they get a few quotes from 874 00:40:28,320 --> 00:40:32,839 Speaker 1: different qualified individuals. The average itemized federal return plus state 875 00:40:33,160 --> 00:40:35,360 Speaker 1: will cost a person around three or fifty bucks. So 876 00:40:35,440 --> 00:40:37,959 Speaker 1: just know that's you're getting quotes, that's that's in the ballpark, Matt. 877 00:40:37,960 --> 00:40:41,480 Speaker 1: That's like a yeah outstanding that it's like an inside 878 00:40:41,520 --> 00:40:43,279 Speaker 1: the park home run if you get it for two 879 00:40:43,360 --> 00:40:46,000 Speaker 1: hundred dollars to three fifty. But yeah, just make sure 880 00:40:46,040 --> 00:40:48,160 Speaker 1: you're not cheaping out on that and hiring someone who's 881 00:40:48,360 --> 00:40:50,600 Speaker 1: not experienced doesn't know what they're doing. Hire someone with 882 00:40:50,600 --> 00:40:54,000 Speaker 1: a track record who knows what's going on in your 883 00:40:54,000 --> 00:40:56,240 Speaker 1: specific situation too, because that can make a big difference 884 00:40:56,239 --> 00:40:58,440 Speaker 1: in what you owe. And to make sure you're doing 885 00:40:58,480 --> 00:41:01,160 Speaker 1: your taxes the right way, everything's above board, and that 886 00:41:01,239 --> 00:41:05,040 Speaker 1: you're too you're maximizing your tax savings at the same time. 887 00:41:05,120 --> 00:41:07,640 Speaker 1: So that's chefitily Yeah, Sean hope that helps, buddy Matt. 888 00:41:07,680 --> 00:41:09,399 Speaker 1: Let's get to our next question. This one comes from 889 00:41:09,840 --> 00:41:12,439 Speaker 1: an older How to Money listener. She's got a question 890 00:41:12,440 --> 00:41:18,320 Speaker 1: about investing. Hi, my name's Carol, and I'm from southern California, 891 00:41:18,440 --> 00:41:22,000 Speaker 1: north of San Diego, and I have a question. We're 892 00:41:22,040 --> 00:41:25,440 Speaker 1: in the older group of your listeners. We're in our seventies, 893 00:41:25,880 --> 00:41:28,560 Speaker 1: and my question is is it too late for us 894 00:41:28,600 --> 00:41:32,160 Speaker 1: to invest in the stock market? Um, I see prices 895 00:41:32,160 --> 00:41:39,120 Speaker 1: are down now, but we've mainly been liquid and just 896 00:41:39,239 --> 00:41:42,640 Speaker 1: would like your opinion on should we jump in on this. 897 00:41:42,920 --> 00:41:46,840 Speaker 1: Thank you? Bye, all right, Carol. Great to hear from you, 898 00:41:46,920 --> 00:41:50,040 Speaker 1: and we are very glad to have you as a listener. 899 00:41:50,080 --> 00:41:51,879 Speaker 1: And I think How to Money Carol sounds very young 900 00:41:51,920 --> 00:41:53,400 Speaker 1: to me. I think we have listeners are in their 901 00:41:53,440 --> 00:41:55,600 Speaker 1: eighties and nineties two, so I don't think Carol's the oldest. 902 00:41:55,640 --> 00:41:57,640 Speaker 1: But she's also not the youngest because was it a 903 00:41:57,640 --> 00:41:59,640 Speaker 1: couple of weeks ago we had a voice meanlier from 904 00:41:59,640 --> 00:42:03,160 Speaker 1: a listener. I think he was twelve that yeah, maybe thirteen. 905 00:42:03,200 --> 00:42:06,279 Speaker 1: But Carol sounds super young, and I think she's got Yeah, 906 00:42:06,320 --> 00:42:07,520 Speaker 1: I think I think it makes sense for her to 907 00:42:07,520 --> 00:42:09,440 Speaker 1: be investing at least a little bit into Yeah. Right, 908 00:42:09,440 --> 00:42:12,040 Speaker 1: it's definitely not too late to invest. But there are 909 00:42:12,080 --> 00:42:14,239 Speaker 1: some other considerations that you're going to want to make 910 00:42:14,280 --> 00:42:16,320 Speaker 1: because of the stage of life that you're in. Carol. 911 00:42:16,920 --> 00:42:20,600 Speaker 1: First off, I love that the Star Stock market being 912 00:42:20,640 --> 00:42:23,680 Speaker 1: down that it's on sale is actually piquing your interest, 913 00:42:23,960 --> 00:42:26,399 Speaker 1: because that is the correct reaction, and because so many 914 00:42:26,400 --> 00:42:29,000 Speaker 1: folks do the opposite, right, they get scared when the 915 00:42:29,000 --> 00:42:31,440 Speaker 1: market's down, and we want how the money listeners to 916 00:42:31,520 --> 00:42:34,239 Speaker 1: view market downturns like they would a sail at their 917 00:42:34,239 --> 00:42:36,719 Speaker 1: favorite store, at their favorite retailer. It's a chance to 918 00:42:36,760 --> 00:42:41,359 Speaker 1: invest at lower valuations, which only enhances your returns over time. 919 00:42:41,360 --> 00:42:44,120 Speaker 1: And so kudos to you for seeing volatility as a 920 00:42:44,160 --> 00:42:46,680 Speaker 1: positive thing. So it's like seeing something my costco with 921 00:42:46,680 --> 00:42:48,600 Speaker 1: the ninety seven at the end, you know it's on clearance, 922 00:42:48,640 --> 00:42:50,600 Speaker 1: and I feel like this is the time to pounce. 923 00:42:50,600 --> 00:42:52,440 Speaker 1: That's a mentality. Carol would buy that thing just like 924 00:42:52,480 --> 00:42:55,120 Speaker 1: I would, and then this is the right mentality to have, well, 925 00:42:55,239 --> 00:42:57,120 Speaker 1: depending on what the item is. But right, right, well, 926 00:42:57,320 --> 00:42:59,160 Speaker 1: so the only thing that gives me pause with Carol 927 00:42:59,320 --> 00:43:01,680 Speaker 1: is the for the term the phrase that she used, 928 00:43:01,680 --> 00:43:04,319 Speaker 1: which is jumping in, which makes it it gives me 929 00:43:04,400 --> 00:43:07,000 Speaker 1: a slight market kind of field. Only if you could 930 00:43:07,040 --> 00:43:10,200 Speaker 1: avoid jumping out at the same exactly well, and only 931 00:43:10,239 --> 00:43:13,919 Speaker 1: if investing was something that you were already planning on doing, Carol. Yeah, 932 00:43:13,920 --> 00:43:17,279 Speaker 1: if it's a complete departure from your original plan, then 933 00:43:17,680 --> 00:43:19,759 Speaker 1: like it's not something I'm excited about. Like it makes 934 00:43:19,760 --> 00:43:22,600 Speaker 1: me think back to twenty when the market change that 935 00:43:22,680 --> 00:43:25,799 Speaker 1: spring at the beginning of COVID. I mean you and 936 00:43:25,800 --> 00:43:27,600 Speaker 1: I both like we were planning to invest that year. 937 00:43:27,640 --> 00:43:30,279 Speaker 1: I was planning to invest the next year, and we 938 00:43:30,560 --> 00:43:34,080 Speaker 1: certainly took the ability to buy stocks on sale. We 939 00:43:34,160 --> 00:43:36,840 Speaker 1: absolutely jumped out that chance. Essentially we were already planning 940 00:43:36,840 --> 00:43:39,239 Speaker 1: to invest in. So just the ability to pull some 941 00:43:39,320 --> 00:43:42,400 Speaker 1: of those future investment dollars into the present, like pulling 942 00:43:42,400 --> 00:43:46,040 Speaker 1: it from the future knowing that this was an awesome 943 00:43:46,040 --> 00:43:48,480 Speaker 1: opportunity to buy. So what you're saying this brings up 944 00:43:48,480 --> 00:43:52,120 Speaker 1: the question, then, is it advisable to be investing in 945 00:43:52,120 --> 00:43:54,719 Speaker 1: your seventies doesn't make sense? And we would say yes, 946 00:43:54,840 --> 00:43:57,560 Speaker 1: but with some caveats because we talk about timeline a 947 00:43:57,600 --> 00:44:00,360 Speaker 1: lot on the show, right knowing your timeline is crucial 948 00:44:00,400 --> 00:44:02,160 Speaker 1: before you start buying stocks. If you're jumping in and 949 00:44:02,200 --> 00:44:05,759 Speaker 1: jumping out, that's something we don't recommend. But also too, 950 00:44:05,760 --> 00:44:08,520 Speaker 1: if you're if you're thinking of investing for a year 951 00:44:08,600 --> 00:44:10,759 Speaker 1: or two down the road, well that might not be 952 00:44:10,800 --> 00:44:13,680 Speaker 1: the best idea either, because valuations they can dip for 953 00:44:13,800 --> 00:44:16,960 Speaker 1: months or for years to come, and that can a 954 00:44:17,000 --> 00:44:19,560 Speaker 1: road capital that you might need in retirement, Carol. And 955 00:44:19,600 --> 00:44:22,239 Speaker 1: so it's just important to identify what your goals are 956 00:44:22,280 --> 00:44:24,840 Speaker 1: for this money. Do you absolutely need it within a 957 00:44:24,840 --> 00:44:27,239 Speaker 1: five year timeframe or are you trying to grow up 958 00:44:27,239 --> 00:44:29,279 Speaker 1: for those later retirement years. Are you saying, you know what, 959 00:44:29,320 --> 00:44:31,799 Speaker 1: I probably don't need them till between eighty five and 960 00:44:31,880 --> 00:44:34,560 Speaker 1: ninety five. Are you hoping to you know, leave those dollars, 961 00:44:34,600 --> 00:44:36,640 Speaker 1: leave behind a bigger sum to your loved ones. If 962 00:44:36,680 --> 00:44:39,000 Speaker 1: that's the case, then investing makes even more sense. Oh yeah, 963 00:44:39,000 --> 00:44:41,439 Speaker 1: if we're talking about generational wealth, Yeah, this is money 964 00:44:41,440 --> 00:44:44,799 Speaker 1: that's going to go on for decades and lifetimes. Yeah, 965 00:44:44,800 --> 00:44:47,080 Speaker 1: but like, what are these dollars for? What are your goals? 966 00:44:47,080 --> 00:44:50,200 Speaker 1: Because those specific goals are going to impact whether you 967 00:44:50,280 --> 00:44:53,040 Speaker 1: design to save or invest them. Yeah, I think too, 968 00:44:53,080 --> 00:44:55,600 Speaker 1: whether or not Carroll has income as well. That I 969 00:44:55,600 --> 00:44:57,879 Speaker 1: think that's another question to ask as well, because if 970 00:44:57,880 --> 00:45:01,120 Speaker 1: she's living off of this money, then it's kind of 971 00:45:01,160 --> 00:45:03,239 Speaker 1: be a little less advisable to invest that money in 972 00:45:03,280 --> 00:45:06,319 Speaker 1: stocks versus if she's still working. And she's talking about 973 00:45:06,320 --> 00:45:09,000 Speaker 1: investing future dollars, well, if that was a part of 974 00:45:09,040 --> 00:45:11,400 Speaker 1: her plan prior to the market going down, I guess 975 00:45:11,239 --> 00:45:13,080 Speaker 1: she's talking about how most a lot of her money 976 00:45:13,120 --> 00:45:15,080 Speaker 1: was liquid, so I guess she's talking about investing money 977 00:45:15,120 --> 00:45:17,640 Speaker 1: that she already has. But that's another question. Not only 978 00:45:17,719 --> 00:45:19,919 Speaker 1: should you be looking at your timeline, but like you said, Joel, 979 00:45:20,120 --> 00:45:23,680 Speaker 1: how readily available do you need that money? And something 980 00:45:23,680 --> 00:45:25,640 Speaker 1: else to keep in mind is inflation as well, because 981 00:45:25,719 --> 00:45:28,759 Speaker 1: investing at least some of the money you have with 982 00:45:28,960 --> 00:45:32,479 Speaker 1: a long enough timeline in mind, that will actually help 983 00:45:32,560 --> 00:45:35,759 Speaker 1: to protect you from inflation. And fortunately you can get 984 00:45:35,800 --> 00:45:37,799 Speaker 1: a solid rate on savings these days, and you're in 985 00:45:37,840 --> 00:45:40,719 Speaker 1: different high yield savings accounts, but even those amped up 986 00:45:40,800 --> 00:45:43,399 Speaker 1: rates haven't kept up with the price increases that we've seen, 987 00:45:43,800 --> 00:45:46,640 Speaker 1: and so investing will help you to avoid having your 988 00:45:46,800 --> 00:45:50,400 Speaker 1: dollars slowly eroded away by inflation. You know, over just 989 00:45:50,440 --> 00:45:53,000 Speaker 1: a decade or two not having any market exposure that 990 00:45:53,040 --> 00:45:55,280 Speaker 1: could honestly, that could just like smack your dollars silly, 991 00:45:55,680 --> 00:45:57,960 Speaker 1: especially given the current environment. We don't know where inflation 992 00:45:58,000 --> 00:46:00,960 Speaker 1: is going to go, but it's a nice hedge to 993 00:46:01,560 --> 00:46:03,920 Speaker 1: at least trying to beat inflation. Yeah, and the fortunate 994 00:46:04,160 --> 00:46:07,240 Speaker 1: position that Carol's in is that she has liquid money 995 00:46:07,400 --> 00:46:09,600 Speaker 1: that can now be put in places where she can 996 00:46:09,600 --> 00:46:12,319 Speaker 1: earn higher rates of return on those dollars. We're talking 997 00:46:12,320 --> 00:46:15,360 Speaker 1: about four plus percent on savings account, five plus percent 998 00:46:15,400 --> 00:46:18,400 Speaker 1: on CDs, we're talking about I bonds still paying almost 999 00:46:18,480 --> 00:46:21,360 Speaker 1: seven percent. So there are great ways to make a 1000 00:46:21,400 --> 00:46:24,279 Speaker 1: return on your money that weren't available to people just 1001 00:46:24,400 --> 00:46:26,680 Speaker 1: two years ago. But at the same time, I'd say 1002 00:46:26,719 --> 00:46:30,680 Speaker 1: investing some is probably a decent idea four Carol, depending 1003 00:46:30,680 --> 00:46:33,719 Speaker 1: like I said, on those goals and avoiding it comes 1004 00:46:33,719 --> 00:46:36,600 Speaker 1: with other downsides too, like inflation that you just mentioned. Matt, 1005 00:46:36,640 --> 00:46:40,720 Speaker 1: like you almost inevitably will want to invest more conservatively 1006 00:46:40,760 --> 00:46:42,920 Speaker 1: though than what we suggest for younger listeners in the 1007 00:46:42,960 --> 00:46:46,080 Speaker 1: wealth building phase of their lives, and all stock portfolio 1008 00:46:46,400 --> 00:46:48,839 Speaker 1: is too risky when you're investing timeline is shorter, So 1009 00:46:48,880 --> 00:46:51,719 Speaker 1: what should your mix be well. Again goes back to 1010 00:46:51,760 --> 00:46:55,040 Speaker 1: the timeline and goals. It all depends on those specific things. 1011 00:46:55,280 --> 00:46:58,080 Speaker 1: But fifty fifty stocks and bonds sounds like a reasonable 1012 00:46:58,160 --> 00:47:01,200 Speaker 1: choice to me. So you could choose VOO and B 1013 00:47:01,440 --> 00:47:03,120 Speaker 1: and D that could be a nice pairing. Those are 1014 00:47:03,160 --> 00:47:06,520 Speaker 1: two different ETF funds you could opt to consider. Don't 1015 00:47:06,520 --> 00:47:08,879 Speaker 1: invest too many dollars though, and keep a solid cash 1016 00:47:08,920 --> 00:47:11,600 Speaker 1: cushion on hand, but investing some of those medium term 1017 00:47:11,680 --> 00:47:14,360 Speaker 1: to long term dollars well, that can provide more financial 1018 00:47:14,400 --> 00:47:17,040 Speaker 1: stability for you down the road, allowing you to outpace 1019 00:47:17,080 --> 00:47:19,960 Speaker 1: inflation and grow your money for those future needs too. 1020 00:47:20,200 --> 00:47:22,200 Speaker 1: That's right, so Carol, best of luck to you, and 1021 00:47:22,360 --> 00:47:25,280 Speaker 1: we appreciate you sending us a voice memo. And again, 1022 00:47:25,600 --> 00:47:27,920 Speaker 1: if you have a question for the show, you can 1023 00:47:27,920 --> 00:47:30,200 Speaker 1: just send us, record that voice memo on your phone 1024 00:47:30,200 --> 00:47:32,359 Speaker 1: and email that over to us, and we would love 1025 00:47:32,440 --> 00:47:35,400 Speaker 1: to take your question on the show. The weirder, the better, Joel. 1026 00:47:35,520 --> 00:47:37,360 Speaker 1: Let's now get back to the beer that you and 1027 00:47:37,400 --> 00:47:41,080 Speaker 1: I enjoyed during this episode. This was Infrared Eclipse. This 1028 00:47:41,160 --> 00:47:45,479 Speaker 1: is a creek style ale with cherries brewed by Ryan 1029 00:47:45,560 --> 00:47:48,600 Speaker 1: Geist there in Cincinnati. What were your thoughts. All right. So, 1030 00:47:48,760 --> 00:47:51,200 Speaker 1: by the way, just for the beer novices out there, 1031 00:47:51,239 --> 00:47:53,560 Speaker 1: creek is spelled k r i e K and that 1032 00:47:53,760 --> 00:47:56,680 Speaker 1: is a cherry style sour beer. It kind of comes 1033 00:47:56,680 --> 00:47:59,200 Speaker 1: from kind of the Brussels region of Belgium. And man, 1034 00:47:59,320 --> 00:48:02,680 Speaker 1: this was a really really good example of a Creek 1035 00:48:02,719 --> 00:48:05,880 Speaker 1: style beer. So much cherry, solid, funk levels going on 1036 00:48:05,920 --> 00:48:09,800 Speaker 1: to a little bit of oak, perfectly tart. Like I 1037 00:48:09,840 --> 00:48:12,160 Speaker 1: really really enjoyed this one. Was really good. It's it's 1038 00:48:12,160 --> 00:48:13,439 Speaker 1: funny that you said it had a lot of cherry, 1039 00:48:13,480 --> 00:48:15,879 Speaker 1: like on the label it says they've got like these 1040 00:48:15,880 --> 00:48:19,120 Speaker 1: little like ratings or sliders whatever, where they kind of 1041 00:48:19,200 --> 00:48:22,319 Speaker 1: rate the amount of fruit, funk, wood, and sour, and 1042 00:48:22,360 --> 00:48:24,799 Speaker 1: they've got fruit all the way up to like five 1043 00:48:24,920 --> 00:48:27,080 Speaker 1: or six or whatever the most you can get. And 1044 00:48:27,080 --> 00:48:28,600 Speaker 1: I definitely picked up some of the cherry notes, but 1045 00:48:29,719 --> 00:48:33,120 Speaker 1: I feel like I've had more cherry Creeks before. But 1046 00:48:33,200 --> 00:48:35,440 Speaker 1: for me, what was off the charts was the sour 1047 00:48:35,560 --> 00:48:38,319 Speaker 1: like this, Man, this beer had all the pucker in 1048 00:48:38,360 --> 00:48:41,840 Speaker 1: the world. It was a great combo. It was really good, 1049 00:48:42,000 --> 00:48:45,080 Speaker 1: and reading the label only maybe kind of fall in 1050 00:48:45,080 --> 00:48:46,720 Speaker 1: love with it even more. They're talking about the cherries 1051 00:48:46,719 --> 00:48:49,000 Speaker 1: that they're getting up from like northern Michigan. Just I 1052 00:48:49,000 --> 00:48:51,719 Speaker 1: don't know. I've really liked what what Ryan Geis is doing. 1053 00:48:51,840 --> 00:48:53,399 Speaker 1: It's one of those breweries that I want to visit 1054 00:48:53,440 --> 00:48:56,000 Speaker 1: in person as well. Where it is they brew It 1055 00:48:56,000 --> 00:48:59,719 Speaker 1: looks like it's an old iron smelting factory or something like. 1056 00:48:59,800 --> 00:49:02,480 Speaker 1: Its location looks great, crazy looking, And I've only been 1057 00:49:02,480 --> 00:49:04,520 Speaker 1: to Cincinnati once for like, I think I've ever been 1058 00:49:05,080 --> 00:49:07,840 Speaker 1: brief time, and I want to go back. Yeah, swinging 1059 00:49:07,880 --> 00:49:11,640 Speaker 1: by breweries anytime you're traveling is top of the list. 1060 00:49:11,680 --> 00:49:13,640 Speaker 1: When it comes to the boys over at how and 1061 00:49:13,680 --> 00:49:15,360 Speaker 1: hitting um disc golf courses, That's that's what I like 1062 00:49:15,440 --> 00:49:17,239 Speaker 1: to do when I travel. So but Matt, that's going 1063 00:49:17,280 --> 00:49:19,120 Speaker 1: to do it for this episode. Listeners can find the 1064 00:49:19,120 --> 00:49:21,480 Speaker 1: show notes with links to some of the resources we 1065 00:49:21,560 --> 00:49:24,360 Speaker 1: mentioned up on our website at how to Money dot com. 1066 00:49:24,400 --> 00:49:26,960 Speaker 1: That's right, And if you have found this episode helpful, 1067 00:49:27,040 --> 00:49:30,880 Speaker 1: if you perceive value in the How to Money podcast, 1068 00:49:30,960 --> 00:49:32,640 Speaker 1: we would love it if you were to head over 1069 00:49:32,719 --> 00:49:35,000 Speaker 1: to wherever it is that you listen to podcasts, whether 1070 00:49:35,040 --> 00:49:37,600 Speaker 1: that's just hitting that star over on Spotify or leaving 1071 00:49:37,680 --> 00:49:41,640 Speaker 1: us a solid, fully fledged review over at Apple Podcasts. 1072 00:49:41,920 --> 00:49:44,200 Speaker 1: Either way, a big thank you in advance for that 1073 00:49:44,520 --> 00:49:47,919 Speaker 1: helps us out, helps other people find out about the show. Absolutely, Joel. 1074 00:49:47,920 --> 00:49:49,600 Speaker 1: That's going to be it for this episode, Buddy. Until 1075 00:49:49,719 --> 00:50:00,560 Speaker 1: next time, best Friends Out, Best Friends Out. I