Speaker 1: Welcome to How to Money. I'm Joel and I'm not
Speaker 1: and today we're talking about how retirement investing is simpler
Speaker 1: than you think. Joel. How's it gone, good Man, I
Speaker 1: gotta fill you in on something before we get in
Speaker 1: any further. If we get started. Yes, So there's this
Speaker 1: funny story. We're eating dinner tonight as a family with
Speaker 1: my wife and my two girls, four and a half
Speaker 1: and two and a half. And my four and a
Speaker 1: half year old said, I want a tattoo. Mommy, when
Speaker 1: can I get a tattoo? And mommy responded, when you're eighteen? Uh,
Speaker 1: but what if? Good answering, what would you want to
Speaker 1: get if you get a tattoo now? And my two
Speaker 1: and a half year old guess what she said, No clue, poop.
Speaker 1: This is pretty awesome. And she was like, that reinforces
Speaker 1: the fact that you do not have the decision making
Speaker 1: skills to get a tattoo. Oh, it's about that. That
Speaker 1: was pretty funny, man. Just let her do it. See
Speaker 1: what happens. Then the poop emoji on her arm through
Speaker 1: the rest of her life. So all of a sudden,
Speaker 1: he got way cute in my mind, Like it's got
Speaker 1: like a little smiley face on it. Yeah, that's that's
Speaker 1: way better. This wouldn't be all that bad. Maybe I'll
Speaker 1: take her out this weekend. We'll get tatted up. People
Speaker 1: say tatted up still, I don't know, but I get
Speaker 1: tatted it up. So Joel are buddy? Tim texted you
Speaker 1: and I and said, stop whatever you're doing and listen
Speaker 1: to your podcast at halftime. So I took my hands
Speaker 1: off the wheel and I slammed into the car in
Speaker 1: front of me, and I immediately took his followed his directions.
Speaker 1: So he said, listen to our last episode that we
Speaker 1: launched about how to get a deal on craft beer.
Speaker 1: He said, listen to it at half speed. I'll be
Speaker 1: honest when he as soon as I saw that text,
Speaker 1: I was kind of like freaking out, like, oh my gosh,
Speaker 1: what did we say accidentally that you can only hear,
Speaker 1: you know, in slow motion. It's like one of those
Speaker 1: Disney movie things can play backwards and sink it up
Speaker 1: to like Wizard of Us or like there's falic symbols
Speaker 1: or something and the Little Mermaids and the flowers like,
Speaker 1: but we had to play this for everyone, So here
Speaker 1: goes here's what we sound like at half speed, and
Speaker 1: especially considering we were talking about getting a deal on
Speaker 1: craft beer last week, it makes it sound even funnier.
Speaker 1: So take a listen. Yeah, I am glad that we
Speaker 1: were talking about listening. Man. Beer is a key part
Speaker 1: of what we do, so I think it's about time
Speaker 1: that we dedicate an entire episode to craft beer. I agree.
Speaker 1: So most episodes you don't have to be a craft
Speaker 1: Beernato to enjoy this podcast, and most episodes will be
Speaker 1: talking about money in some way. Former fashion and today's
Speaker 1: note different. So I feel like we could listen to
Speaker 1: the whole thing and we probably want to go back
Speaker 1: to Honestly, I want to go back and listen to
Speaker 1: all of them at has speed now if only had
Speaker 1: the time. Yeah, I know this good stuff. So it
Speaker 1: sounds like we're drunk and uh drunk slash high. I
Speaker 1: don't know which which is worse. Like that that seventy
Speaker 1: showed the little circle that they used to do, you know,
Speaker 1: and the camera will go around the circle and film
Speaker 1: them that. It's kind of what it feels like listening
Speaker 1: to us on half speed. Did you ever watch that, Sonny?
Speaker 1: I mean I guess you did. You watched Yeah, dude,
Speaker 1: that was one of the best comedies of all time.
Speaker 1: I think. Yeah, Kit was really into that. I never
Speaker 1: I never got into it. All right, So let's get
Speaker 1: to today's beer. We are drinking not one, but two
Speaker 1: beers tonight. So Ironmonger Brewing out of Marietta, George just
Speaker 1: they're just up the street from where we live. Um
Speaker 1: they kindly. I stopped in there the other day on
Speaker 1: my way to my parents house, like sid heard awesome things,
Speaker 1: and my brother in law had actually, um let me
Speaker 1: have a little bit of taste of one of their
Speaker 1: I pas and it was so ridiculously delicious. So I
Speaker 1: was stopping by to get some and I ended up
Speaker 1: talking to the owner there and the super cool guy,
Speaker 1: and he said, dude, have some and drinking on the podcast.
Speaker 1: So we are featuring the Ironmonger Anville double I P
Speaker 1: A and their Damascus single I PA tonight. Nice. Oh man.
Speaker 1: I love doing the uh like kind of a sidewy
Speaker 1: side comparison like that, you know, kind of a B
Speaker 1: A B testing, So we're gonna a B test the
Speaker 1: Ironmonger I P A s. I've had them both the
Speaker 1: four They're absolutely delicious, So I can't wait to have
Speaker 1: them again and and for you to have them for
Speaker 1: the first time. Yeah, and these are packaged by the
Speaker 1: way in crowlers, So if you don't know what a
Speaker 1: crowler is like. For a while, uh, growlers were really cool,
Speaker 1: and I mean they're still around. You need a sixty
Speaker 1: four rounds essentially um glass bottle and fill it up
Speaker 1: with beer. Crowlers are kind of the new thing. And
Speaker 1: you can get these two of beer in one can
Speaker 1: that they fill up with fresh beer. Fill it on
Speaker 1: the spot right in front of you, and then they
Speaker 1: got their little canning machine and seals, i mean steals
Speaker 1: that litter right on there right, so this beer is
Speaker 1: fresh as a baby's bottom. So and and when you
Speaker 1: have the giant can, it's kind of nice. It makes
Speaker 1: you feel like a little like a little kid in
Speaker 1: a ball or two. At the same time, you have
Speaker 1: a hold of this hand and it's like fills up
Speaker 1: my whole hand and pretty awesome. Actually, yeah, for you,
Speaker 1: it's probably like to size. For me, it feels a
Speaker 1: giant because I've got like tiny hands. Oh, this feels
Speaker 1: like what a twelve months can feels like to everyone else.
Speaker 1: All right, so we'll crack this. You can tell like
Speaker 1: the crawler has a distinct distinct sound as well. You know,
Speaker 1: it doesn't havend like that light high pitched can. It
Speaker 1: sounds like you're opening a like a barrel, a barrel
Speaker 1: of beer. I will say, beautiful hoper roma just filled
Speaker 1: the freaking room. Two different IPAs, but already just distinctly
Speaker 1: different colors. But yeah, the yeah, the single i PA
Speaker 1: is definitely darker. The double i PA, which is the anvil,
Speaker 1: is lighter. So the Damascus pretty good. Yeah, it's like
Speaker 1: creamy and smooth. It's yeah, someone's got like it's got
Speaker 1: a like a lactose Like a lot of folks are
Speaker 1: doing some like lactose sugar in there for an I PA.
Speaker 1: It's just like really rich, creamy mouth fields a legit
Speaker 1: tasty I P A Damascus from Ironmonger Brewing. Awesome beer.
Speaker 1: Uh you get to do side by side now with
Speaker 1: the anvil. But cheers, yeah, cheers on the anvil. Oh
Speaker 1: my goodness. M Yeah, the anvils like kind of one
Speaker 1: of those juice bombs almost pretty much juicy, Yeah, juicy
Speaker 1: are brighter, still got a little bit of that like
Speaker 1: bitter through the center and on the back end of
Speaker 1: the beer. Uh, but it also retains that juic nous,
Speaker 1: so it doesn't have finished like Brillo pad bitter or
Speaker 1: anything like that. Right. Yeah, it doesn't drink like a
Speaker 1: West Coast I PA where it just finishes really dry
Speaker 1: and kind of dries up in your mouth. Yeah. I
Speaker 1: kind of like how consistent it is the whole way
Speaker 1: through from sip to the way it rolls off the
Speaker 1: back of your tongue. Yeah. I'm a huge fan of
Speaker 1: this Anvil double I P a from Ironmonger. I feel
Speaker 1: like they're ruining one of the best I pas in
Speaker 1: the Southeast. Uh, this one right here, And I like
Speaker 1: they're already starting to kind of kind of see that
Speaker 1: in the orders ticking up. Uh. And it's just a
Speaker 1: really popular beer and I don't know why. After drinking
Speaker 1: a couple of them. It's just really really tasty. And
Speaker 1: this is man a Diamond and the Rough right here,
Speaker 1: just outside of of town, out of Atlanta, and man,
Speaker 1: they're crushing it, dude. I really like the spear. It's
Speaker 1: that's really small space, but real cute space. Definitely worth
Speaker 1: a visit to Ironmonger to get the speer. Yeah, is
Speaker 1: that there is the other logo I guess right there. Yeah,
Speaker 1: it's got the guy with like a like a blacksmith
Speaker 1: blacksmith hammer, right, so like lay down the law on
Speaker 1: some iron. I guess that's like one of the roles
Speaker 1: that you can play on when you're when you're ultra
Speaker 1: nerdy board game. So that's probably true, right, Yeah. I
Speaker 1: guess in a Gurricola or something that there's gotta be
Speaker 1: an ironmonger at some point too. To put the shoes
Speaker 1: on the horse man all the choices, you gotta have
Speaker 1: somebody doing that, all right, Matt to the topic in hand,
Speaker 1: retirement investing is simpler than you think. Ultimately, when it
Speaker 1: comes down to it, people want to make retirement investing
Speaker 1: hard and I don't think necessarily they like, oh please,
Speaker 1: let's make this arduous, but they make it harder than
Speaker 1: it should be. And so we want to give kind
Speaker 1: of an overview to help people understand that it is
Speaker 1: simpler than you think it is. So we want to
Speaker 1: kind of give people some of the tools to go
Speaker 1: out there and invest with confidence knowing that you're doing
Speaker 1: it properly. Yeah, And the biggest thing that makes it
Speaker 1: so complicated are the tax implications, right, Like the actual
Speaker 1: investing it's not hard. You just you open it. You
Speaker 1: open an account, and then you decide what to buy
Speaker 1: and you buy it and that's it. Like that's literally boom,
Speaker 1: You've invested, right There's it really can be that easy.
Speaker 1: It's just when you start taking into account and start
Speaker 1: trying to figure out the you know, like the absolute
Speaker 1: best way to work work the tax system, like in
Speaker 1: your favor as far as when you get a tax deduction. Um.
Speaker 1: And we'll get more into that, you know, as we
Speaker 1: as we uh get further into this episode. But that
Speaker 1: is the biggest difference between some of these different retirement accounts,
Speaker 1: which tends to make it a little more complicated. We're
Speaker 1: not gonna spend a ton of time on that because
Speaker 1: we don't want to get bogged down with all the
Speaker 1: details of every single retirement account. But we're gonna hit
Speaker 1: the high points and hopefully yeah, I point you guys
Speaker 1: in the right direction to I mean literally get investing
Speaker 1: tomorrow right like and and it's really I think this
Speaker 1: is probably a show that's investing for the ten percent
Speaker 1: of people out there that are either uber wealthy or
Speaker 1: just have nothing to invest right now. Um. And so
Speaker 1: those people probably won't find a lot of use out
Speaker 1: of this podcast, but for the out there, for most
Speaker 1: people in America, we think that this episode will help
Speaker 1: you kind of sort through things, because I know, sometimes
Speaker 1: just looking at what these accounts are called can feel
Speaker 1: like vegetable stew, like oh my goodness, like it was
Speaker 1: a lot of different letters, letters and numbers any and
Speaker 1: so when you have like the letters, it can be confusing. Yeah,
Speaker 1: and four oh one K, which is literally named after
Speaker 1: the section of the lavirus tax law. Yeah, and so
Speaker 1: you you would think like we could name it something
Speaker 1: that's like just as simple as hey, this is your
Speaker 1: pretax account and this is your post tax account. Something
Speaker 1: that kind of way too easy too simplifies it for people.
Speaker 1: But because that doesn't exist, that's why we're here to
Speaker 1: try to help it you sort through things. And I
Speaker 1: wanted to touch on the fact that there are some
Speaker 1: assumptions before you kind of open a retirement account and
Speaker 1: started investing in your retirement, which is you want to
Speaker 1: have some margin. And we touched on this before back
Speaker 1: when we talk you know, when we touched on budgets
Speaker 1: as well, right, that you want to make sure you
Speaker 1: kind of have some money set aside for like a
Speaker 1: little emergency fund because you don't want to end up
Speaker 1: like me. Uh, twelve years ago. I think it was
Speaker 1: maybe when you know, I learned about the different retirement
Speaker 1: accounts and I was told that like, oh, you gotta
Speaker 1: do it now because every year earlier that you can
Speaker 1: do it, you know, it's just more exponential growth or
Speaker 1: more compounding growth, you know, down the road. So I
Speaker 1: was like, all right, let's do this without knowing anything.
Speaker 1: And I opened a roth Ira and started buying some stuff.
Speaker 1: And I didn't know what I was doing. Dude, were
Speaker 1: you buying individual stocks? No? Okay, yeah, so thank goodness
Speaker 1: I wasn't. But the next worst thing, what's what's what
Speaker 1: do you think would be the next worst thing? Probably
Speaker 1: you went somewhere that had ridiculously high fees. You got it.
Speaker 1: So yeah, And I don't know if things were different,
Speaker 1: you know, it's in fifteen years ago. But the word
Speaker 1: was like, all right, it's a little bit more expensive.
Speaker 1: But if you've got this rock star fund manager managing
Speaker 1: that fund, the mutual fund, well, man, he might get
Speaker 1: like anywhere between two and five pc better than like
Speaker 1: what the you know, general market might might do or
Speaker 1: what just kind of a standard index fund would do,
Speaker 1: which is, you know, a fund that's just representative of
Speaker 1: the entire market. So I say all that because I
Speaker 1: kind of learned that the hard way, which is that
Speaker 1: I got started too early, too soon, you know, and
Speaker 1: before I knew anything with what I was doing, and
Speaker 1: I was putting money into this account that I should
Speaker 1: have left alone. But because I was young and it
Speaker 1: wasn't didn't have a stable financial footing, I had to
Speaker 1: kind of dip back into that and deplete it before
Speaker 1: it was able to do anything. So I say all
Speaker 1: that to say, this is great information once you kind
Speaker 1: of have an emergency fund set up and you're looking
Speaker 1: to basically figure out what to do next with your money,
Speaker 1: which is a great problem to have. So Matt, let's
Speaker 1: explain what some of these retirement accounts are and how
Speaker 1: people can know which one they should be choosing as
Speaker 1: they begin they're investing. Yeah, so maybe like just broadly,
Speaker 1: like what what's like how would you define just a
Speaker 1: retirement account? Because I think people sometimes are like, well,
Speaker 1: how does a retirement is that? Like when you open
Speaker 1: up an account with like each trade, is that a
Speaker 1: retirement account? Or how would how would you define like
Speaker 1: a retirement account in general. Sure, Yeah, I would say
Speaker 1: that it is putting money in the stock market for
Speaker 1: the long haul that you will not touch until you retire.
Speaker 1: And so I think like sometimes along the way people
Speaker 1: a lot of people want to tap their retirement accounts
Speaker 1: um and there are a lot of consequences with that too.
Speaker 1: So if you're going to best make sure that it
Speaker 1: is invested broadly in the stock market for a long,
Speaker 1: long period of time, that you're willing to not touch it.
Speaker 1: And that goes back to what you just mentioned being
Speaker 1: financially prepared. And so if if you're not ready to
Speaker 1: put this money away for the next twenty to thirty years,
Speaker 1: I'll do it right, it should be in your savings
Speaker 1: account right now. Yeah. Yeah, if you're looking for something
Speaker 1: that's a little more liquid and you want to be
Speaker 1: able to say, you something for maybe a down payment
Speaker 1: on the house soon or for like renovation or just whatever,
Speaker 1: something that's going to cost some money, you want to
Speaker 1: have that. Yeah, like you said, in a like a
Speaker 1: higher yield savings account or checking account in general, not
Speaker 1: in the stock market. Okay, So we we just talked
Speaker 1: about what retirement accounts are, and you want to talk
Speaker 1: about some specific accounts, then, yeah, specific retirement accounts. There
Speaker 1: are two main types of retirement accounts that you will
Speaker 1: hear about all over the place, and you have access
Speaker 1: to I will at least one of these, because everyone
Speaker 1: has access to to some of these. So the IRA
Speaker 1: is one that you'll hear. There's a regular IRA, and
Speaker 1: there's a ROTH IRA and yeah, and the IRA and
Speaker 1: I mean that's individual retirement account I RA. Yep. So
Speaker 1: this is one that literally no matter what you are,
Speaker 1: if you're self employed, if you work for a large
Speaker 1: employer or a small employer, you have access to this
Speaker 1: on your own, outside of any sort of employer relationship.
Speaker 1: You can open up your own IRA. Uh, and we'll
Speaker 1: get into the differences between the WRATH and the regular UM.
Speaker 1: And then the other main retirement account that you can
Speaker 1: choose is employer based and that's the four oh one
Speaker 1: K and a lot of people that's the easiest thing
Speaker 1: to get into because sometimes your employer even automatically enrolls
Speaker 1: you in your four oh one K at work, which
Speaker 1: I think is brilliant. Yeah, that's awesome. I wish I
Speaker 1: could remember the story. But yeah, basically, employers started doing
Speaker 1: that they started switching it to where you had to
Speaker 1: instead of opt in two contribute to your four O
Speaker 1: one K, you had to opt out. Different companies were
Speaker 1: trying to find ways to pay basically incentivized their employees
Speaker 1: to save more because they're like, dang it, like why
Speaker 1: aren't they saying why are they saving money? Because you know,
Speaker 1: the future of social security isn't that great and it's
Speaker 1: up to us. You know, it's up to us as individuals.
Speaker 1: Employers can provide can kind of dangle that carrot, but
Speaker 1: employees weren't actually signing up and they, yeah, they made
Speaker 1: that switch to where you had to opt out of
Speaker 1: saving for your form and K, and nobody did. Yeah,
Speaker 1: is that they're like enrolled saving money for you know,
Speaker 1: for the future and all because they kind of did
Speaker 1: a little flip flop there, which I think is brilliant.
Speaker 1: It turns out money is incredibly psychological, and so whatever
Speaker 1: you can do to force yourself into savings, to trick
Speaker 1: your brain into making it less painful, and that's the
Speaker 1: way that your employer kind of tricks you into doing it. Right,
Speaker 1: But money for me even is incredibly psychological and sometimes
Speaker 1: a forced method of forgetting that I'm making income over
Speaker 1: here or over there can be really helpful. And at
Speaker 1: some point we'll do a whole episode just on the
Speaker 1: psychology of money, because that's an interesting topic. I like
Speaker 1: how you separated the two main accounts that we're gonna
Speaker 1: talk about though, Like basically, like you said, four o
Speaker 1: one K and IRA A four ow K being employer
Speaker 1: based retirement account because it's offered through your employer or
Speaker 1: your IRA A which anybody can have, Like like you said, yeah,
Speaker 1: and so let's start with a four own K. Roughly
Speaker 1: half of Americans have access to a four oh one
Speaker 1: K at work. So and most employers offer a match
Speaker 1: on your contributions, and your four oh one K contributions
Speaker 1: come directly out of your paycheck before you even see it. So,
Speaker 1: speaking of psychology, that's not You don't have to do
Speaker 1: a thing except for allocate the percentage. And in my mind, psychologically,
Speaker 1: there's a big difference between checking the percentage amount that's
Speaker 1: gonna come out of your paycheck and then actually taking
Speaker 1: money from your account that you've already received and putting
Speaker 1: it somewhere. There's a huge difference. It's like, oh, I
Speaker 1: never really got it in the first plays. Let's just
Speaker 1: you know, stash this way for the future. Yeah. So
Speaker 1: I think there's a couple of reasons if you have
Speaker 1: access to a four oh one K to take advantage
Speaker 1: that is one, the company match, it's free money. The
Speaker 1: typical company match is if you contribute six percent, your
Speaker 1: company contributes so and there's all sorts. There's some employers
Speaker 1: are even more generous, and if you put in six percent,
Speaker 1: they put in six percent. And some employers offer no
Speaker 1: match at all. If your employer offers a match, take
Speaker 1: advantage of it, and if you don't, you're leaving free
Speaker 1: money on the table. It's like a bonus they want
Speaker 1: to pay you every year that you're just saying, no,
Speaker 1: no thanks, I'm good. Just hearing that, man, like, I've
Speaker 1: never had a four o one K my entire life,
Speaker 1: and especially when that matched. And to hear you know,
Speaker 1: you and other friends that I have who you know
Speaker 1: have four one k is with a match, Oh my gosh, man,
Speaker 1: that is like you said, it's free money. It's a
Speaker 1: guaranteed return. That's the number one thing you do, right,
Speaker 1: That's the number one first thing. If you have access
Speaker 1: to a four oh one K with a match do it,
Speaker 1: take advantage of it, do it now and take advantage
Speaker 1: of the full match. And let's say right now you're
Speaker 1: saving three percent and your employers only contributing one and
Speaker 1: a half percent because you just haven't gotten it up there.
Speaker 1: That should be your main focus. Get up to the match.
Speaker 1: Get up to a six percent UH savings rate so
Speaker 1: that you can take full advantage of that match. And
Speaker 1: when you say like six percent, what like what you're
Speaker 1: talking like six percent of your salary so that your
Speaker 1: pay Yes, So it's yeah. And and like I said,
Speaker 1: employers do it differently, but most employers do offer usually
Speaker 1: a fifty percent match on the first six percent that
Speaker 1: you put in, So if you invest six percent of
Speaker 1: your salary, then they'll invest three percent of your salary
Speaker 1: like on top of it. And you're getting nine percent
Speaker 1: exactly right off the bat, exactly, And you're getting close
Speaker 1: to that ten percent savings right which is unreal, which
Speaker 1: is essentially I think a basic savings rate that you
Speaker 1: should not go below. And the other great thing about
Speaker 1: the four oh one K is that it's essentially on autopilot.
Speaker 1: You put that money in every month and you get
Speaker 1: about it. It just kind of comes out you're used
Speaker 1: to get in a paycheck that's a certain amount, and
Speaker 1: you begin to live on that and you forget that
Speaker 1: you even have this money. It never enters your bank
Speaker 1: account at home, so you never even have to as
Speaker 1: being your money in your possession. It's automatically dispersed for
Speaker 1: you for your future. Okay, Joel, So my question for
Speaker 1: you is what can you do with that money? Like
Speaker 1: within the four one k is it? Like? Do you
Speaker 1: have the same options that I have with like my
Speaker 1: account with Vanguard. Well, so it's gonna differ depending on
Speaker 1: the employer that you have. I'm really lucky and my
Speaker 1: employer gives me access to Vanguard funds. As you'll here
Speaker 1: later on, we're both pretty big fans of Vand I mean, yeah,
Speaker 1: I don't have a employer sponsored retirement account, and that's
Speaker 1: who I've chosen as well, like on my own. So
Speaker 1: whoever set up your company's retirement account basically knew what
Speaker 1: they're doing. Yeah, and it's but essentially it's gonna depend
Speaker 1: on your company and everyone out there listening. You're going
Speaker 1: to have access to different funds than I do, and
Speaker 1: you're probably gonna be with a different company that I am.
Speaker 1: You know, maybe some of you are with Vanguard, but
Speaker 1: some of you might be with Fidelity or t row
Speaker 1: Price or there's a ton of companies out there that
Speaker 1: you could be with. Uh and so later on in
Speaker 1: the podcast, we'll kind of talk to you about how
Speaker 1: to choose funds inside of that four oh one k.
Speaker 1: But looping back the I mean, it's still the number
Speaker 1: one thing to pay attention to though, is the match,
Speaker 1: because it doesn't matter if the you know, if it's
Speaker 1: the expense ratios are high, or if it doesn't get
Speaker 1: like that great of a rate. You can't beat at
Speaker 1: match up to a certain percentage of your salary exactly.
Speaker 1: The number one thing you can't even pay off credit
Speaker 1: card debt. You know, your highest credit card debt is
Speaker 1: probably gonna be so even that is not going to
Speaker 1: provide quite as good of a return as exactly. Yeah, man,
Speaker 1: you've got to take advantage of that. Yeah. So iras
Speaker 1: are next. Everyone has access to an IRA because it's
Speaker 1: outside of your employer's scope. It's literally you and the
Speaker 1: investing company that you're going through. That's what I have, right,
Speaker 1: Kate and I both have roth iras. Yeah, and so
Speaker 1: the difference for people out there that don't know what's
Speaker 1: the difference between a roth ira and a traditional ira.
Speaker 1: So the main difference then between a a traditional ira
Speaker 1: and a roth ira is the tax treatment. You're investing
Speaker 1: into a traditional ira with pre tax dollars and so
Speaker 1: essentially all of the dollars, all the money that you
Speaker 1: put into your traditional ira, it's tax deductible, counts against
Speaker 1: your earned income basically, and the money within that ira
Speaker 1: grows tax deferred. And then you know, when when you
Speaker 1: get to the point to where you're withdrawing them, that's
Speaker 1: when you pay your standard taxes on them. And a rath, yeah,
Speaker 1: as opposed to wrath, which is it's I mean basically
Speaker 1: take it and you flip it, so you're paying all
Speaker 1: the taxes up front, and so they're essentially post tax dollars,
Speaker 1: so it's not tax deductible. Um, you take that money
Speaker 1: and you put it in the count and nothing happens.
Speaker 1: You know, there's no deduction, there's no tax deduction, and
Speaker 1: that nothing happens except for it grows like mad in
Speaker 1: the stock market, yes, and then it grows gross tax
Speaker 1: free when the time comes to make those withdrawals. Um
Speaker 1: at fifty nine and a half. So that's I mean,
Speaker 1: that's the biggest difference between the traditional ira and a
Speaker 1: roth ira. I think for most folks, especially for most
Speaker 1: listeners who are younger, you want to do a roth ira,
Speaker 1: Like that's it's just pretty simple right now. Oh, and
Speaker 1: especially with the with the new with the new tax laws, right. Yeah,
Speaker 1: So the new tax law changes actually made a roth
Speaker 1: ira even better for young people and for medium income folks. Uh,
Speaker 1: you you're gonna want to choose a wrath because essentially
Speaker 1: the tax bracket for people making that sort of income
Speaker 1: went down. Middle income earners tax bracket essentially dropped. Yeah,
Speaker 1: And so if you're in that tax bracket where you're uh,
Speaker 1: your upper tax rate is twelve percent now it used
Speaker 1: to be. So paying that tax now, as in never
Speaker 1: having to pay tax again, yeah, is a great idea.
Speaker 1: I think a roth ira actually only got better and
Speaker 1: makes more sense. That's insane now, and I think it
Speaker 1: was great before. I think was probably the option before. Yeah,
Speaker 1: So could you imagine now, like literally you take that money,
Speaker 1: you know, like money that you earn from your job,
Speaker 1: you paid twelve percent on it, and then you invest
Speaker 1: it and then you never have to pay tax on
Speaker 1: that again, it's amazing, like in regard regardless of how
Speaker 1: many how many years. And that's one of the beauties
Speaker 1: of a roth ira a is that you can hang
Speaker 1: on to it basically for forever. There's no mandatory withdrawals,
Speaker 1: and so you can that can continue to grow versus
Speaker 1: a traditional ira, which they require you to take some
Speaker 1: distributions at seventy and a half. Yes, so the roth's
Speaker 1: got a lot going for it. Pay your tax now,
Speaker 1: never pay tax again on it. And I don't want
Speaker 1: to get too pessimistic, but when you look at the
Speaker 1: future of taxes in America, like are you ever going
Speaker 1: to pay less than twelve percent? It's unlikely for a
Speaker 1: lot of reasons, and so rath is truly the best
Speaker 1: way to go in all likelihood. So the one thing
Speaker 1: about a rath is it's got a contribution limit, and
Speaker 1: so if you want to contribute a lot to retirement savings,
Speaker 1: you won't be able to do that with a roth
Speaker 1: You're capped at being able to invest a year inside
Speaker 1: of a roth ira. Yeah, that's like the biggest and
Speaker 1: I would say maybe only downside to a roth ira
Speaker 1: is that they kind of limit because it's such a sweet,
Speaker 1: you know, vehicle, that's a good way to describe it.
Speaker 1: It's just such a good vehicle for retirement savings that
Speaker 1: they're like, yeah, we're gonna have to put a cap
Speaker 1: on this. And there's also a cap. Think about it, like,
Speaker 1: why would there be a cap on it if if
Speaker 1: it wasn't just like the most sweet deal. Yeah, and uh,
Speaker 1: the cap actually goes up a little bit. If you're
Speaker 1: fifty or over, you get to contribute a year. But
Speaker 1: then there's another cap, and it's an income cap, and
Speaker 1: so if you make over a certain income amount, you
Speaker 1: are not eligible to contribute to a WRATH at all. Yeah.
Speaker 1: So if you're a baller and you're bringing in like
Speaker 1: a lot of income, yeah, the rath Ira isn't gonna
Speaker 1: be for you. And that's one of the beauties of
Speaker 1: a regular four oh one k is that it doesn't
Speaker 1: have any income limits. You can have a high income there.
Speaker 1: So essentially, if you're a mega earner, if you're making
Speaker 1: more than this amount that the rath caps you out at,
Speaker 1: which is a hundred and thirty five thousand dollars for
Speaker 1: single filers and a hundred and ninety nine thousand for
Speaker 1: married couples filing jointly. If you're making more money than that,
Speaker 1: the best way to start allocating your retirement savings is
Speaker 1: in the four oh one K because you can contribute
Speaker 1: a large amount in a four oh one K, up
Speaker 1: to eighteen thousand, five hundred dollars this year, and on
Speaker 1: top of that, you can also contribute just to a
Speaker 1: traditional I RA. So use those vehicles first if you
Speaker 1: make more money than the RATH limits allow. Yeah, Juell
Speaker 1: And so that's just briefly, maybe touch on SEP SEP,
Speaker 1: which stands for a Simplified Employee pension. Yeah, those are
Speaker 1: really cool, especially for a dude like you that works
Speaker 1: from home, what works for himself. Um, and so it's
Speaker 1: not something that anybody that has a traditional job is
Speaker 1: going to take advantage of. But for you folks that
Speaker 1: are working as a contractor getting ten work working for yourself,
Speaker 1: you're gonna really want to consider a set BI RA.
Speaker 1: There's a little more administration, I guess involved with with
Speaker 1: kind of setting those up, and so it's you know,
Speaker 1: there's a little more work involved with it. You know,
Speaker 1: if you're self employed or a contractor like that and
Speaker 1: you're making bank and I'm talking like, if you're looking
Speaker 1: to put away like fifty dollars, you need to you
Speaker 1: need to look this up. I'm nowhere need of that.
Speaker 1: So I've never, you know, even really considered a SEP.
Speaker 1: We're perfectly fine putting away money into our my wrath
Speaker 1: in case rath. But if you're looking at yeah, if
Speaker 1: you've got a really fat year and if you're looking
Speaker 1: to sort of shelter that money and kind of get
Speaker 1: that invested, a SEP is definitely something you want to consider. Yes,
Speaker 1: So if you're self employed, look into a SEP, contact
Speaker 1: someone from Vanguard, you know, do some research. Put a
Speaker 1: set BIRA is probably going to be one of your
Speaker 1: best methods. If you're gonna be able to sock away
Speaker 1: a large amount of retirement savings all at once in
Speaker 1: one year, a set bi ra is an awesome way
Speaker 1: to do it. Yeah, Joe. So we've talked about some
Speaker 1: of the different retirement accounts, right, We've talked about the
Speaker 1: four one k A. We talked about the IRA, the
Speaker 1: different the two you know, two main different iras, which
Speaker 1: is the traditional IRA and then the roth ira UM
Speaker 1: and this step. But there's a few others as well
Speaker 1: that we're not going to even really get into because
Speaker 1: they're just more detailed and sort of nuanced with Again,
Speaker 1: they're not The investing aspect of it isn't complicated. It's
Speaker 1: just the tax implications that make it slightly more or
Speaker 1: slightly less favorable. Um. The difference that it will make
Speaker 1: for you in the long run though, versus not starting
Speaker 1: investing at all is negligible. Yes, Like, the whole reason
Speaker 1: we're talking about this is because we want to get
Speaker 1: you guys investing now. Um, don't let the tax implications
Speaker 1: keep you from getting started. And so, just to be honest, like,
Speaker 1: we're two dudes, drinking beers that care about this stuff deeply,
Speaker 1: but we're not a Wikipedia article. So if that's what
Speaker 1: you're interested in, go do some research. But we want
Speaker 1: to give you the highlights and then give give you
Speaker 1: the information that you can then take and empower yourself
Speaker 1: to start investing for retirement on your own, because it's
Speaker 1: actually a lot easier than you think. Chedual. This conversation
Speaker 1: that we're having is the same conversation that we have
Speaker 1: with our friends to get them moving and to get
Speaker 1: them investing. We want to get folks talking about this
Speaker 1: and we want to get our friends investing. This is
Speaker 1: something that you need to do. And don't let the
Speaker 1: potential of confusion with with tax law and all this
Speaker 1: other stuff. Don't let that keep you from getting invested.
Speaker 1: Thee oh the thing is, it's really it's baby steps.
Speaker 1: It's not that hard. If you can open up a
Speaker 1: savings account, you can either start contributing to your four
Speaker 1: oh one K or open up a roth ira online
Speaker 1: with some money from your savings account and again be
Speaker 1: financially stable. First, make sure you've got enough money in
Speaker 1: your bank account where you don't need this money next
Speaker 1: week or next month or next year. You want this
Speaker 1: money to grow for long term. But if you're ready
Speaker 1: to make that step, it's not that hard. It's pretty simple.
Speaker 1: So take the step, make it happen. And that's like
Speaker 1: we're we want to be your kick in the pants.
Speaker 1: Kick in the pants, okay, So listen to this and no,
Speaker 1: you know what, I can go into work and I
Speaker 1: can log into my employer system tomorrow and I can
Speaker 1: up my contributions to my four oh one K by
Speaker 1: three percent. Take an action from this podcast that will
Speaker 1: actually influence the rest of your life. If you up
Speaker 1: your savings rate for retirement now. If you up your
Speaker 1: savings rate for retirement now, it's going to have a
Speaker 1: huge effect, huge way down the road. And it's just
Speaker 1: as easy to open an account. Man. I love like
Speaker 1: what you said as far as like, if you know
Speaker 1: how to open a savings account online, like with your bank,
Speaker 1: you know how to open a retirement account, say with Vanguard, uh,
Speaker 1: which is again we've mentioned them multiple times, but just
Speaker 1: go with Vanguard. It's you can't go wrong with them.
Speaker 1: And there's a couple of reasons for that that I
Speaker 1: think we should mention really quickly. There are some great
Speaker 1: low cost advisors out there, right, Uh, there's Charles Schwab,
Speaker 1: There's Fidelity, There's some great companies, but they specifically, Yeah,
Speaker 1: but Vanguard in particular, there's a reason that we would
Speaker 1: recommend them over anybody else. And it's because Vanguard is
Speaker 1: essentially in investing what a credit union is to banking.
Speaker 1: And so when we invest in Vanguard, we own a
Speaker 1: piece of Vanguard. We are a part of the company
Speaker 1: in that way. And so because they are essentially this
Speaker 1: co op, UH, investing in Vanguard means that they're not
Speaker 1: out to screw us or to make big profits, and
Speaker 1: there's nothing wrong with companies making a profit, but there's
Speaker 1: something really cool about putting your money in a place
Speaker 1: where that company has your best interest at heart, because
Speaker 1: you are that company to a certain extent. And that's
Speaker 1: why Vanguard is just completely different than any other investing company.
Speaker 1: And there are other people because Vanguard has gotten so big,
Speaker 1: they've got to compete on their level. They've got to
Speaker 1: compete on cost. But Vanguards started the low cost investing
Speaker 1: revolution and they have perfected it. Yeah, yeah, man. They
Speaker 1: their expense ratios by far are the lowest out there.
Speaker 1: I mean, again comparable it's of Fidelity and Schwab, But
Speaker 1: that's I mean, and that's what makes makes them so
Speaker 1: attractive is because when you've got a fund and you're
Speaker 1: paying a certain expense, that expense compounded over years and
Speaker 1: years and years, makes a huge difference down the road.
Speaker 1: And you know, it comes down to if you'd rather
Speaker 1: have that money in your own pocket or in the
Speaker 1: pocket of a bank. So the average expense ratio at
Speaker 1: Vanguard is point to zero percent and the industry average
Speaker 1: is one point one two And that might sound like
Speaker 1: very little to you, right, like point too versus one
Speaker 1: point one two whatever. Those are just numbers now, man,
Speaker 1: we're talking like tens of thousands of dollars in twenty years.
Speaker 1: We're talking hundreds of thousands of dollars and not likelihood
Speaker 1: over the years. What kind of money you got, man,
Speaker 1: it's I mean, it's amazing when you look at the
Speaker 1: studies literally, Uh, the studies the bear out of how
Speaker 1: important fees are. Uh. Warren Buffett himself and his last
Speaker 1: shareholder letter said that fees are the most important thing
Speaker 1: that you should be concerned about when you're investing because
Speaker 1: those fees over time, just that small difference between point
Speaker 1: two and one point one two is great enough to
Speaker 1: have drastic effects on your retirement because of the magic
Speaker 1: of compounding interest over time. That gap in fees that
Speaker 1: you'll pay by being a Vanguard instead of being with
Speaker 1: one of the bigger players that advertises more on TV
Speaker 1: will have mega effects on how well you can retire. Yeah,
Speaker 1: And so I mean, if you guys don't know Warren Buffett,
Speaker 1: I mean he's like the at this point though, I think,
Speaker 1: like the fourth richest man in the like in the world. Right,
Speaker 1: does does he have anything to do with Vanguard? Like
Speaker 1: he doesn't own it or anything, right, No, no, no no, no,
Speaker 1: So his company is uh Berkshire Hathaway. Yeah, and and
Speaker 1: it Warren Buffett essentially is saying anomaly. He's like a
Speaker 1: he's he's this investing genius basically literally, Yeah, a guru stockpicker.
Speaker 1: And uh. And that's another thing we need to talk
Speaker 1: about really quickly is how do you pick the stocks
Speaker 1: that you're going to invest in. Because we talked about
Speaker 1: these vehicles, but inside of those vehicles are certainly you
Speaker 1: want to pick low cost funds. But am I just
Speaker 1: investing in individual stocks? Do I buy like you know,
Speaker 1: Cola and percent Facebook or what? Yeah? So these vehicles
Speaker 1: that that we're talking about four one K that's a vehicle,
Speaker 1: a roth ira or a traditional ira or a set
Speaker 1: these are all the different vehicles. But within those vehicles
Speaker 1: you that money is in there. And then you then
Speaker 1: purchase funds, mutual funds or stock stocks or et s,
Speaker 1: exchange traded funds or bonds. And yeah, so let's let's
Speaker 1: talk about maybe what what we put in ours? Sure,
Speaker 1: so I will tell you exactly how am I invested? Yeah,
Speaker 1: I'm about so as well, I'm ready inside of my
Speaker 1: four one K and inside of my IRA, I am
Speaker 1: fully invested in one fund that is the Vanguard vt
Speaker 1: s A X fund, which has an expense ratio of
Speaker 1: point oh four and is in vested in thirty six
Speaker 1: hundred US companies. So it has it gives me this diversity,
Speaker 1: crazy diverse. Basically, it's it's like an entire stock market
Speaker 1: funds Like basically it's meant some mirror the entire stock market. Yes,
Speaker 1: like any company that's traded on the market. And because
Speaker 1: I don't know if most people know this, but like
Speaker 1: the Dow Jones UH, that's often quoted by CNBC or whatever.
Speaker 1: You're watching the down drop this many points today, Well,
Speaker 1: the Dow is actually only thirty stocks. I don't know
Speaker 1: if you knew that, UM, and the SNP five hundred
Speaker 1: would be a much better thing to quote because that's
Speaker 1: five of the biggest stocks on the U stock market. Uh.
Speaker 1: And then this vt s A X fund that I
Speaker 1: invest completely in. Every single penny of my funds is
Speaker 1: in that UH is thirty six hundred U s stocks.
Speaker 1: So it's literally like you can't really get much more
Speaker 1: diverse than that. Yeah, and actually a hundred percent of
Speaker 1: what we have or what I'm invested in with my
Speaker 1: roth Ira is the e t F of elevalent of that,
Speaker 1: which is VOO, which like v O O H. And
Speaker 1: basically I picked that because I saw an article with
Speaker 1: warm Buffett again this and this is an article from
Speaker 1: like years ago, but he recommended it, and it's a
Speaker 1: quote by him again, and he was talking specifically to
Speaker 1: somebody in his company because they're like, oh, should we
Speaker 1: buy stocks specifically like for Berkshire Hathaway, like you know,
Speaker 1: warm Buffet's company, And he straight up was like, no,
Speaker 1: you shouldn't do that. Instead, you should do this, which
Speaker 1: is you know, it's an index fund, and again like
Speaker 1: you know, like yours, it's it's the e t F equivalent,
Speaker 1: and so it's got an expense ratio of point zero
Speaker 1: four percent, which I don't think you can beat that,
Speaker 1: and you're gonna basically outperform anybody that's out there thinking that, oh, well,
Speaker 1: I know what stocks to pick based on the news
Speaker 1: or based on some inside or info that you have.
Speaker 1: You're not going to be able to beat those index funds. Ye.
Speaker 1: So essentially, Matt, the things that you and I are
Speaker 1: both invested in their incredibly similar, almost no difference at all.
Speaker 1: And the two major factors that make what we're invested
Speaker 1: in the best are the low expense ratio factor and
Speaker 1: the broadly diversified factor. So, uh, if you can pick
Speaker 1: things that are invested in a wide swath of stocks
Speaker 1: um and you also pick something that has an extremely
Speaker 1: low expense ratio, you're gonna do well over time. Those
Speaker 1: are literally the two most important factors when you're choosing
Speaker 1: the specific fund or e T f UH to be
Speaker 1: invested in inside of those vehicles that we talked about. Yeah,
Speaker 1: So if you're lucky enough to have a four O
Speaker 1: n K that allows you to to have access and
Speaker 1: to purchase Vanguard funds, man, good for you. You like
Speaker 1: Joel are in a great spot, especially if you have
Speaker 1: a match. But otherwise, if you're like me and you've
Speaker 1: got to sit up your own account, which is totally easy,
Speaker 1: but go to the site like Vanguard and open your
Speaker 1: account there and so you know, you'll open your account
Speaker 1: and then your account sitting there, and then you can
Speaker 1: fund that account, and if you're scared and you don't
Speaker 1: what to do, your money will just sit there as cash.
Speaker 1: And so I'm just trying to explain basically the system.
Speaker 1: But like your money is still within that vehicle. It's
Speaker 1: just sitting there as cash, which isn't great, but like
Speaker 1: that's better than nothing. What what we want you to
Speaker 1: do to then do is to take that, you know,
Speaker 1: take the cash and that account and then purchase some funds, uh,
Speaker 1: like what Joel has, which is the vt S A
Speaker 1: X fund, or mine, which is the v O O fund. Yeah,
Speaker 1: back to warm Buffet real quick. He made a bet.
Speaker 1: The man's a genius, he's a genius, and he made
Speaker 1: a bet against these New York this New York hedge fund,
Speaker 1: and they each put up a million dollars and it
Speaker 1: was going to go to charity, right whoever wins. And
Speaker 1: the hedge fund was like, we'll kick your butt. We
Speaker 1: can invest way better than you, and nobody can invest
Speaker 1: better than Warmbufett. But warm Buffett said, you know what,
Speaker 1: I'm gonna put all my money in the Vanguard smp
Speaker 1: E t F and so exactly what you're invested in, Matt,
Speaker 1: and so uh, warm Buffett puts some money in that,
Speaker 1: the hedge fund puts their money and all sorts of
Speaker 1: crazy things at stocks and with high fees. Yeah, all
Speaker 1: the all the stuff and for about it. For about
Speaker 1: like nine months to a year, the hedge fund was
Speaker 1: doing okay, they were doing all right. Then it was
Speaker 1: like I think it was like an eight or tenure bet.
Speaker 1: But for the next like eight or nine years tenure
Speaker 1: Like yeah, Warren Buffett proceeds to crush completely crushed the competition.
Speaker 1: And it just goes to show you that these incredibly
Speaker 1: high paid hedge fund managers couldn't even come close to
Speaker 1: competing with this amazing, low cost, broadly diversified e t
Speaker 1: F that just mirrors the stock market. There's so many
Speaker 1: good reasons for investing, specifically in something low cost and
Speaker 1: well diversified. We could do a whole show just on that,
Speaker 1: and we probably will say, will yeah. And something else
Speaker 1: that he'll say too, is that you want a dollar
Speaker 1: cost average when you buy right, which is like that
Speaker 1: means not taking all your money and just dumping it
Speaker 1: all at once and then not touching it again for
Speaker 1: another ten years, Like you do that if you're going
Speaker 1: to bet a million bucks with some hedge fund managers. Uh.
Speaker 1: But what you and I do, uh is that every month,
Speaker 1: basically you have a set amount that you are buying
Speaker 1: into that fund. So if it goes up some well,
Speaker 1: you know, you buy a little you got to buy
Speaker 1: a little bit less because it costs more. But then
Speaker 1: like the next month, when it dips down, your money
Speaker 1: goes a lot further. And so basically what happens is
Speaker 1: your your prices average out. Yeah, and I think there's
Speaker 1: uh some good reason for dollar cost averaging, but I
Speaker 1: also think there's good wisdom to the sooner you get
Speaker 1: in the better um. And so if you have a
Speaker 1: lump sum to put it in all at one time,
Speaker 1: let's say it's five grand or ten grand or something
Speaker 1: that I don't think that's a huge deal. I think
Speaker 1: it's okay to go all in all that ontesh when
Speaker 1: you're talking thirty years years, I mean it'll be your
Speaker 1: You'll be fine. Yeah, who cares. But overall that works
Speaker 1: best for most people anyway, because let's say you know
Speaker 1: you're getting paid every two weeks, you know, put in
Speaker 1: a small chunk every two weeks, and so that's kind
Speaker 1: of the way that most people are set up in
Speaker 1: their four oh one k or you know, just a
Speaker 1: The great thing about Vanguard is you know, in your
Speaker 1: roth Ira, you can say, you know what, take this
Speaker 1: amount out and and buy this particular et for mutual
Speaker 1: fund on this day of the month. And so it's
Speaker 1: pretty sweet. You can set it up and it's super
Speaker 1: simple and it just kind of comes out like any
Speaker 1: one of your other bills, except for that's not a
Speaker 1: bill that's going towards your future. So, Matt, how does
Speaker 1: this differ from like stock trading, And like, you know,
Speaker 1: day trading was really popular for a few years back
Speaker 1: then in the nineties, late nineties, right before they get
Speaker 1: a dot com, and there's still people doing it. There's
Speaker 1: actually a lot more people doing it now with Yeah,
Speaker 1: with bitcoin, people are like Oliver with bitcoin and just
Speaker 1: like a whole another podcast, Man, I don't want to
Speaker 1: get into it. Yeah, just the general rise of the
Speaker 1: stock market. You know, Oh the stock market is super hot.
Speaker 1: Let me start borrowing money. So yeah, we invest in
Speaker 1: the stock market like we do with real estate, which
Speaker 1: is we very much take a buy and hold long
Speaker 1: term approach to it. You can try to take advantages
Speaker 1: and time the market in the system. Uh you know
Speaker 1: what you with what you see are these like short
Speaker 1: term swings and sure you might make a buck here
Speaker 1: and there, but you also it's crazy high risk, and
Speaker 1: when we're talking about our retirement, we are not in
Speaker 1: the business to take risks. We're just looking for a long, long,
Speaker 1: steady growth where you know where the tortoise wins every time. Yeah,
Speaker 1: and uh again, our mentality is set it and forget it.
Speaker 1: So keep putting in, keep doing it, keep miying. And
Speaker 1: you know what I think, John Bogel said this, who
Speaker 1: is the founder of Vanguard, A brilliant man who has
Speaker 1: changed life for America as we know it, like for real.
Speaker 1: I don't think that's an overstatement. He said. Essentially, contribute
Speaker 1: to your four O one K for forty years, just
Speaker 1: keep doing it and never check your balance, and then
Speaker 1: when you retire, open up that envelope to see what
Speaker 1: your balance is and you will be flabbergasted. You'll be shocked. Um,
Speaker 1: and he's right, that's the best way to do it.
Speaker 1: Don't look at it, don't tinker with it, don't toy
Speaker 1: with it, just invest in it. And then after forty
Speaker 1: years or thirty years, hopefully you'll be retiring sooner than forty.
Speaker 1: But after doing that, you're gonna be a rich person.
Speaker 1: And uh, you're gonna be well off if you continue.
Speaker 1: You to run the race. Continue to put the money in,
Speaker 1: you're gonna be well off. And like I said, Matt,
Speaker 1: the fund that I'm particularly invested in is invested in
Speaker 1: over stocks, trading individual stocks, buying Coca Cola or Apple
Speaker 1: or Facebook. Uh. Yeah, that's like the hot one right now. Man.
Speaker 1: You know what looked good to buy thirty years ago
Speaker 1: was Xerox. There's so many of those stocks that you're like, man,
Speaker 1: that this company can never fail. Uh, that this company
Speaker 1: is good to go for a long time. But things change,
Speaker 1: and nobody knew that Google or Facebook or Apple was
Speaker 1: going to do what they've done. But that's why you
Speaker 1: don't make one stock bets. And so you put your
Speaker 1: money across the broad market spectrum and if somebody loses,
Speaker 1: you barely lose. And if somebody wins, you share in
Speaker 1: that win. Do not start betting your retirement on individual companies.
Speaker 1: That's when you're bound to fail. Excellent, nice man. Yeah,
Speaker 1: So back to the beer, because we're drinking two beers
Speaker 1: from Ironmonger Brewing Company today. I'm mostly just drinking one. Yeah,
Speaker 1: the Nvil double I p A. I'm at the very
Speaker 1: bottom of that over here, and then I've got uh,
Speaker 1: I've got a little bit left of the Damascus, which
Speaker 1: is also also very good. Yeah, the Damascus is great.
Speaker 1: The anvil is perfect for eight point six percent. Man,
Speaker 1: Like you really don't taste that and you could. I mean,
Speaker 1: I think we drank both drank our piets. Mind's gone
Speaker 1: uh really quickly. It was so DearS maybe more than
Speaker 1: mine for once, for once. Man, their beers are great.
Speaker 1: I love getting a crowler And thanks to Time Margaret
Speaker 1: for providing the beers tonight. All right, man, so let's
Speaker 1: do a quick recap then on what we talked about today.
Speaker 1: All right, there's a couple of vehicles that you need
Speaker 1: to know about when you're considering investing. Uh. And by
Speaker 1: the way, investing is simpler than you think it is. Uh,
Speaker 1: And that's why we did this podcast. So the vehicles,
Speaker 1: the four oh one K, that is the main vehicle.
Speaker 1: If you work at a job and your employer says
Speaker 1: we're gonna offer you a retirement account, it's a four
Speaker 1: oh one K, and most employers will offer you a
Speaker 1: match in addition. So if you put in a certain
Speaker 1: percentage of your pay, they will put in a certain
Speaker 1: percentage in addition. Yeah, so if they are offering that match.
Speaker 1: Take it every single time. That is the number one
Speaker 1: thing you need to do is get that match. You
Speaker 1: will not find a better return on your money anywhere. Yeah.
Speaker 1: So after the four one K or say your company
Speaker 1: doesn't provide a four one K or you might be
Speaker 1: self employed, the next thing you want to look at
Speaker 1: our I r A s whether that be a traditional
Speaker 1: ira or a roth ira. For most folks, especially with
Speaker 1: our current tax law that's passed, you need to look
Speaker 1: at a roth ira. Yeah, a roth ira is awesome.
Speaker 1: It means you are getting taxed on your income now,
Speaker 1: but you never ever ever pay tax on that money
Speaker 1: ever again, even the growth of those funds. Yeah, it
Speaker 1: does have a contribution limit of so you might hit
Speaker 1: that maximum that cap pretty soon, but definitely do that first,
Speaker 1: and then you can start looking at a traditional ira.
Speaker 1: And those are the vehicles, but let's quickly talk about
Speaker 1: the passengers in that vehicle. Those are low cost, well
Speaker 1: diversified funds. I personally am invested in Vanguard vt S
Speaker 1: a X funds. You can look that up on Google
Speaker 1: on Vanguard site, almost no cost to it at all,
Speaker 1: and invested in thirty six hundred U S stocks it's incredible.
Speaker 1: You can't get much better than that. Yeah. The e
Speaker 1: t F, which is an exchange traded fund, which is
Speaker 1: basically just think of it as an equivalent to to
Speaker 1: a Joel mentioned I'm invested in vou v o O
Speaker 1: pretty much the exact same thing, except that there's a
Speaker 1: lower bar of entry there. Yeah. So the best thing
Speaker 1: to do invest today, Get started, guys, don't wait. And
Speaker 1: that's the biggest mistake people make is waiting. Yeah, I'll
Speaker 1: get to that next week, tomorrow, whatever, uh, and it
Speaker 1: never comes. So start investing now. It's not gonna get easier, nope,
Speaker 1: and make sure you're financially prepared for it, because you
Speaker 1: don't want to touch this money when you put it
Speaker 1: away for at least twenty years. Right, So this is
Speaker 1: long term money we're talking about. But there's nothing better
Speaker 1: that you can do to start saving for your future
Speaker 1: than investing in low cost mutual funds or et s
Speaker 1: through a company like Vanguard today. Yeah, thanks so much
Speaker 1: everyone for listening. Our home on the web is how
Speaker 1: to money dot com. Check it out. We'll have some
Speaker 1: show notes up there for you. I don't forget to
Speaker 1: review and subscribe on iTunes or wherever you get your podcasts,
Speaker 1: and until next time, Joel, best friends out, best friends Out,