WEBVTT - Ask HTM - Is Direct Indexing Worth It, Sticky Cosigning Situations, & Kiddos With Credit Or Debit #949 0:00:00.040 --> 0:00:03.279 Welcome to Hada Money. I'm Joel, I'm Matt, and today 0:00:03.400 --> 0:00:05.199 we're answering your listener questions. 0:00:24.079 --> 0:00:27.840 We hope everyone had a fantastic weekend. Specifically, you buddy, 0:00:27.880 --> 0:00:31.560 a big old happy birthday. Today is Joel's. 0:00:31.560 --> 0:00:34.040 Forty ninth birthday, though at this point, at this age, 0:00:34.040 --> 0:00:35.640 we don't acknowledge birthdays. 0:00:35.640 --> 0:00:38.760 Matt right, Well, it's one thing to say that, Oh 0:00:38.840 --> 0:00:41.400 I'm forty one and a half as opposed he still 0:00:41.400 --> 0:00:44.440 celebrate your actual birthday though, But this is Monday, and 0:00:45.040 --> 0:00:46.640 I mentioned that because I want everyone to wish Joel 0:00:46.640 --> 0:00:49.720 a happy birthday. Thanks Pat. Okay, we do have those 0:00:49.720 --> 0:00:50.479 of their questions to get to. 0:00:50.479 --> 0:00:52.640 Honestly, I'm not ashamed of my age, so you know, 0:00:52.680 --> 0:00:53.479 I think some people are. 0:00:53.560 --> 0:00:53.880 I don't. 0:00:54.120 --> 0:00:56.360 It's just a number who cares. And I'm gonna be 0:00:56.360 --> 0:00:57.960 like Brian Johnson to live forever, so. 0:00:58.240 --> 0:01:00.320 You know exactly. It really is a number. Reference to 0:01:00.360 --> 0:01:03.640 that recently, but a listener is asking about direct index 0:01:03.680 --> 0:01:06.959 investing if it is worth the squeeze considering the benefits 0:01:07.280 --> 0:01:10.320 he's receiving from it versus the cost. We'll talk about that. 0:01:10.440 --> 0:01:14.080 Another listener is asking what he should do about this 0:01:14.240 --> 0:01:17.800 awkward family money situation. Things I think are going to 0:01:17.959 --> 0:01:21.560 get weird, but I love weighing in on awkwardness. Yeah, 0:01:21.640 --> 0:01:24.600 and another listener is asking for the easiest way for 0:01:24.720 --> 0:01:27.440 his kids to spend their money. We'll talk through some 0:01:27.760 --> 0:01:28.679 methods of payment. 0:01:28.920 --> 0:01:32.880 Sure, get to that more during today's episode, Buddy Quick PSA, Matt, 0:01:33.000 --> 0:01:37.119 My parents just came back from Houston. I have mentioned 0:01:37.160 --> 0:01:39.240 this on the show before. My mom is dealing with 0:01:39.280 --> 0:01:43.280 a kind of skin cancer and she's she's doing well, 0:01:43.920 --> 0:01:46.840 We're hopeful, but gosh, you just never know what this 0:01:46.920 --> 0:01:49.520 kind of thing, right, And it's true. So but one 0:01:49.520 --> 0:01:51.280 of the things that I was looking up because they 0:01:51.280 --> 0:01:52.880 were they were going to get a second opinion in 0:01:52.920 --> 0:01:57.240 Houston at MD Anderson, of course, and the hotel rooms 0:01:57.240 --> 0:01:59.320 were quite expensive, and so I just had this hunch. 0:01:59.360 --> 0:02:01.400 I was like, there has to be some sort of 0:02:01.400 --> 0:02:04.600 free place for people who have cancer who are going 0:02:04.680 --> 0:02:07.559 to some of these bigger cancer centers to stay, because 0:02:07.560 --> 0:02:09.359 there are a lot of people who I would imagine 0:02:09.760 --> 0:02:14.040 can't afford expensive hotel rooms near where they're getting treatment, right, 0:02:14.400 --> 0:02:18.000 So I just like did a quick search and found that, yeah, 0:02:18.120 --> 0:02:20.440 there is, in fact such a thing, and I'm sure 0:02:20.440 --> 0:02:22.519 there are even more resources that I'm completely unaware of it. 0:02:22.600 --> 0:02:24.720 If anybody is aware of them, please let us know. 0:02:24.760 --> 0:02:26.639 We'll like maybe compile them, put them on our website 0:02:26.680 --> 0:02:29.760 or something like that. But the American Cancer Society runs 0:02:29.760 --> 0:02:32.280 something called the Hope Lodge, and it turns out it 0:02:32.320 --> 0:02:33.840 was all booked up. My parents only had like a 0:02:33.840 --> 0:02:36.320 week that they knew in advanced. They didn't have enough planning, 0:02:36.520 --> 0:02:38.919 so they did Unfortunately, they had the funds to work 0:02:38.960 --> 0:02:42.359 over for a hotel. But for the future when if 0:02:42.360 --> 0:02:44.600 they have to make a return visit or at other 0:02:44.680 --> 0:02:48.040 cancer centers around the country. This Hope Lodge exists, and 0:02:48.480 --> 0:02:51.040 I mean it's kind of cool that there are resources 0:02:51.040 --> 0:02:54.040 out there for people. And I guess just don't assume 0:02:54.280 --> 0:02:55.799 that you got to go on a loan, you got. 0:02:55.639 --> 0:02:57.360 To fork it out. Yeah. Well, I mean this is 0:02:57.480 --> 0:03:00.440 like the Ronald McDonald house right in the essentially does 0:03:00.440 --> 0:03:02.880 that still exist? I think he does, Okay, Yeah, I mean, 0:03:02.919 --> 0:03:06.000 which is I'm pretty sure for setting up families to 0:03:06.000 --> 0:03:07.760 have a place to stay if there are somewhere where 0:03:07.760 --> 0:03:10.600 there's a where there's a child I guess getting receiving treatment. 0:03:10.960 --> 0:03:13.120 So this would be the adult equivalent of that, right, 0:03:13.680 --> 0:03:15.840 less orange and red. Perhaps, No, I'm pretty sure they 0:03:16.400 --> 0:03:18.440 make those house you were chicken nuggets, sir, look look 0:03:18.480 --> 0:03:21.040 pretty classy. But I appreciate your your outside of the 0:03:21.040 --> 0:03:23.040 box thinking when it came to trying to find a 0:03:23.080 --> 0:03:23.520 spot for them. 0:03:23.520 --> 0:03:25.560 But yeah, I mean I was like, literally my first 0:03:25.600 --> 0:03:27.679 initial knee jerk was go to hot wire, go to 0:03:27.720 --> 0:03:29.040 price line, see if I can find him a good 0:03:29.040 --> 0:03:31.400 deal in a hotel. And then second line of breastoning 0:03:31.480 --> 0:03:33.360 was wait a second, what if there's something even cheaper 0:03:33.360 --> 0:03:33.560 than that? 0:03:33.639 --> 0:03:36.720 Yeah, this isn't a typical vacation or you know, something 0:03:36.760 --> 0:03:36.920 like that. 0:03:37.040 --> 0:03:38.760 And that is how my brain works, by the way, Yeah, 0:03:39.520 --> 0:03:42.360 it's like orders of magnitude of money saving. 0:03:42.480 --> 0:03:44.320 So run on. A nice little quick tip for folks 0:03:44.320 --> 0:03:46.840 out there, Let's quickly introduce the beer that you and 0:03:46.880 --> 0:03:49.240 I are going to enjoy during this episode, Buddy, A 0:03:49.320 --> 0:03:53.120 Tiny S's, which is a sour ale with fruit candy flavor. 0:03:53.480 --> 0:03:56.600 And this is a beer by Prairie artisan Ales. Brew 0:03:56.600 --> 0:03:58.560 We've had on the show plenty of times, but not 0:03:58.680 --> 0:04:00.360 this one. Even though I know if I actually had 0:04:00.400 --> 0:04:02.320 this beer, oh really, we haven't had it on this 0:04:02.640 --> 0:04:03.160 I'm pretty sure. 0:04:03.200 --> 0:04:03.400 I don't. 0:04:03.480 --> 0:04:05.240 You're like the number one person I drink craft beer with, 0:04:05.240 --> 0:04:07.680 so I'm pretty sure it was with you, but maybe it. Yeah, 0:04:07.720 --> 0:04:10.320 But looking forward to enjoying and sharing our thoughts at 0:04:10.360 --> 0:04:11.080 the end of the episode. 0:04:11.120 --> 0:04:14.800 Yeah, Prairie makes great beers. This one is very unique, 0:04:14.840 --> 0:04:15.760 so we'll give our thoughts in. 0:04:15.680 --> 0:04:16.120 A little bit. 0:04:16.320 --> 0:04:20.520 But Mattle, Prairie gold Oki. Uh, those are just a 0:04:20.520 --> 0:04:21.599 couple of the Prairie beers. 0:04:21.600 --> 0:04:23.960 We've had a lot of, like big boozy stouts, but 0:04:24.040 --> 0:04:26.640 like some really great sours to funky mosaic I ever 0:04:26.760 --> 0:04:27.600 want to say? It was a good one? 0:04:27.880 --> 0:04:28.719 Is it Christmas Bomb? 0:04:28.960 --> 0:04:29.200 Oh? 0:04:29.320 --> 0:04:29.520 Yeah? 0:04:29.720 --> 0:04:31.719 That is that a Prairie total classic? Okay, yes, I 0:04:31.720 --> 0:04:32.400 remember that one too. 0:04:32.480 --> 0:04:34.839 All right, man, let's mention how people can ask a 0:04:34.920 --> 0:04:37.240 question if they're so inclined. If you've got a money question, 0:04:37.560 --> 0:04:39.599 we would love to tackle it on the show. Just 0:04:39.640 --> 0:04:41.479 go to how to money dot com slash ask for 0:04:41.520 --> 0:04:44.480 simple directions. Really just recording your question on the voice 0:04:44.480 --> 0:04:46.840 memo app of your phone, emailing it over to us 0:04:46.920 --> 0:04:49.160 at how to moneypod at gmail dot com. Hopefully we 0:04:49.200 --> 0:04:51.640 can take it next week on the show. Matt, Let's 0:04:51.680 --> 0:04:55.360 get to a question specifically about awkward family finances. 0:04:55.839 --> 0:04:59.760 Hi, Joe, this is move best. A couple of years ago, 0:04:59.839 --> 0:05:03.120 I signed a student loan for my great niece, which 0:05:03.200 --> 0:05:09.960 is my sister's granddaughter, and she graduated from Spilman College, 0:05:10.600 --> 0:05:14.839 and I think she's started to work and she's not 0:05:15.320 --> 0:05:20.080 paying on her student loan which I co signed for. Now, 0:05:20.240 --> 0:05:24.760 my backing institution was the Navy Federal Credit Union. They 0:05:24.760 --> 0:05:28.960 are going into my account and taking out payments without 0:05:29.200 --> 0:05:33.719 my permission. Is this legal? And what can I do 0:05:34.400 --> 0:05:40.080 to get my niece to pay off this student loan? 0:05:40.600 --> 0:05:43.560 Thank you, Joel. He addressed you specifically, so want you 0:05:43.640 --> 0:05:44.360 kick things off? 0:05:44.720 --> 0:05:48.320 Yeah, well, I don't know why. Maybe I maybe I'm 0:05:48.320 --> 0:05:49.160 more memorable Matt. 0:05:49.320 --> 0:05:51.600 Well, that's because he probably heard you talking with your 0:05:51.600 --> 0:05:55.200 buddy Bill Handle out there weekly appearances indeed with Bill 0:05:55.240 --> 0:05:58.520 Handle every Thursday on KFI. Well, Murph, let's get to 0:05:58.520 --> 0:06:01.160 your question. So sorry to hear about this. The truth 0:06:01.200 --> 0:06:01.480 has met. 0:06:01.520 --> 0:06:05.000 These kinds of things are financially and relationally frustrating. It's 0:06:05.000 --> 0:06:06.120 like a double way. I mean, it's like a gut 0:06:06.160 --> 0:06:08.320 punch and a face punch at the same time, which 0:06:08.520 --> 0:06:10.440 if you're like I'm thinking about Mike Tyson punch out 0:06:10.440 --> 0:06:13.040 when I say that, And the double combo can be 0:06:13.400 --> 0:06:14.880 really tough, tough to deal. 0:06:14.720 --> 0:06:16.520 With the old one too, Yeah, and that's what they 0:06:16.560 --> 0:06:17.640 call it. That's right. 0:06:18.120 --> 0:06:20.560 And the truth is like when you mix money with family, 0:06:20.880 --> 0:06:24.440 there are substantial pitfalls that can come about and often 0:06:24.480 --> 0:06:28.120 do come about. I feel like that's why our advice 0:06:28.160 --> 0:06:33.039 typically is like, don't mix family and close relationships. Most 0:06:33.040 --> 0:06:34.040 of the time it doesn't work out. 0:06:34.040 --> 0:06:34.200 Well. 0:06:34.200 --> 0:06:35.720 I guess you and I run a business together. We're 0:06:35.720 --> 0:06:38.120 best buds, so their pitfalls there too, right, and we 0:06:38.160 --> 0:06:40.520 have had to come up with certain guidelines to make 0:06:40.560 --> 0:06:43.280 sure that we are caring for each other well and 0:06:43.480 --> 0:06:46.119 that we're splitting duties properly. And I think the typical 0:06:46.160 --> 0:06:48.520 story we hear is that a family member lends another 0:06:48.600 --> 0:06:50.960 family member money. They're hoping that they're going to get 0:06:50.960 --> 0:06:54.080 paid back in a reasonable timeframe and that's probably what 0:06:54.120 --> 0:06:56.599 the promise is, and when that doesn't happen, it sours 0:06:56.640 --> 0:06:57.440 the relationship. 0:06:57.839 --> 0:06:59.440 And this merv situation is. 0:06:59.400 --> 0:07:02.360 A similar one, but co signing on a loan instead 0:07:02.360 --> 0:07:05.440 of directly putting money into a relative's hands, and so 0:07:06.000 --> 0:07:08.039 at the end of the day they can be similar 0:07:08.080 --> 0:07:10.480 in the way that they work. And this is why 0:07:10.520 --> 0:07:14.240 we typically advise, you know, financial transactions to be considered gifts. 0:07:14.240 --> 0:07:16.000 If you do lend somebody money and then if you 0:07:16.000 --> 0:07:18.320 can't afford to give them that money, don't give them 0:07:18.880 --> 0:07:20.880 any sort of money at all, right, Like, if you 0:07:20.920 --> 0:07:23.160 can't just kind of completely write it off, it could 0:07:23.160 --> 0:07:24.960 come back to bite you. In a Mervh's case, this 0:07:25.080 --> 0:07:27.560 co signing is going to come back to Biden sadly. 0:07:27.640 --> 0:07:31.840 It's indeed, yeah, and it's worth saying as well. We're 0:07:31.880 --> 0:07:35.400 not lawyers, but yes, MERVH. The stay on a holiday 0:07:35.440 --> 0:07:38.560 and last night. The financial institution, it can legally take 0:07:38.640 --> 0:07:40.800 money out of your account, out of your account there 0:07:40.880 --> 0:07:43.760 with the credit union as a co signer of this loan, 0:07:44.280 --> 0:07:47.280 if your great niece isn't making payments. This is known 0:07:47.320 --> 0:07:50.680 as the right to offset. We are getting a little loyally, 0:07:51.040 --> 0:07:53.720 you know, a little more technical in the weeds here. Basically, 0:07:53.760 --> 0:07:57.040 the lender wouldn't have given that loan to your niece alone. Like, 0:07:57.080 --> 0:07:59.160 the only way that they were willing to say yes 0:07:59.280 --> 0:08:01.520 is because of the fact that you signed. There's a 0:08:01.560 --> 0:08:05.080 reason for that, and it's becoming crystal clear to you. Now, 0:08:05.120 --> 0:08:08.000 I'm assuming like they were worried about her ability to 0:08:08.040 --> 0:08:11.400 pay and they wanted some additional recourse and you, in 0:08:11.440 --> 0:08:14.280 this case, specifically your money if she were to fall 0:08:14.280 --> 0:08:17.240 behind or if she were to stop making payments altogether, 0:08:17.560 --> 0:08:21.160 which is you know what's led now to the sticky situation? Yeah, 0:08:21.160 --> 0:08:23.320 that you find yourself and makes you think of my nephew, Matt. 0:08:23.360 --> 0:08:24.120 He's fifteen. 0:08:24.280 --> 0:08:26.240 If you wanted to go out there and buy a 0:08:26.280 --> 0:08:29.080 brand new Mustang or something like that, because you know 0:08:29.160 --> 0:08:31.600 he's about about to hit full driving age and he's like, 0:08:31.640 --> 0:08:33.480 let's go, let me get this forty thousand dollars car. 0:08:33.840 --> 0:08:36.120 If he shows up alone to the dealership, they're going 0:08:36.160 --> 0:08:39.480 to be like, sorry, buddy, you can afford maybe a 0:08:39.559 --> 0:08:42.080 nineteen ninety eight Mustang, right like you have like fifteen 0:08:42.120 --> 0:08:44.640 hundred bucks from working on odds and ends jobs. But 0:08:44.679 --> 0:08:47.000 if I show up with him, not because I've got 0:08:47.040 --> 0:08:49.319 the deepest pockets in the world, they'll be like, oh, 0:08:49.360 --> 0:08:51.439 you just like put your name on this paper too, 0:08:51.920 --> 0:08:54.679 and we can can get whatever Mustang he wants, and 0:08:54.960 --> 0:08:58.000 you have an income right exactly, and we know that 0:08:58.040 --> 0:08:59.880 you're going to be good for it, even if he's not. 0:09:00.640 --> 0:09:02.959 But if I did that, then I'm putting myself at risk, 0:09:03.000 --> 0:09:05.640 which is what happened here sadly with MERV. When you 0:09:05.720 --> 0:09:09.440 co sign alone, you've created a legal obligation for that debt, 0:09:09.679 --> 0:09:11.840 even if you never saw a dime of that money, 0:09:11.960 --> 0:09:14.320 which is exactly what happened in this case and exactly 0:09:14.400 --> 0:09:18.040 what happens in so many co signer cases, like you 0:09:18.080 --> 0:09:19.880 are on the hook for the thing and you see 0:09:20.000 --> 0:09:22.439 none of the benefits. And MERV, you said this was 0:09:22.480 --> 0:09:25.400 a student loan, but you co signers don't have a 0:09:25.440 --> 0:09:28.400 legal obligation if they signed for a physical item either. 0:09:28.480 --> 0:09:31.280 So just because my nephew stop making payments, let's say 0:09:31.520 --> 0:09:35.200 on that proverbial mustang, well I have to pay for them, 0:09:35.240 --> 0:09:36.920 and I don't have the right to be able to 0:09:36.960 --> 0:09:39.320 go get the mustang from him either. And this is 0:09:39.320 --> 0:09:41.920 why co signing is something that we're just not fans of. 0:09:42.640 --> 0:09:44.760 I get why people do it, right, being asked by 0:09:44.760 --> 0:09:46.640 a loved one for help, it tugs at your harsh 0:09:46.640 --> 0:09:48.640 strings and you're like, well, I want them to go 0:09:48.679 --> 0:09:50.160 to college, I know this is going to be good 0:09:50.280 --> 0:09:51.679 for the future, or I want to help them out 0:09:51.720 --> 0:09:52.920 and be able to buy this car that they might 0:09:52.920 --> 0:09:56.120 not otherwise be able to afford. And we should be 0:09:56.360 --> 0:09:58.840 willing to help our family members out, but just not 0:09:58.840 --> 0:10:01.080 by co signing for a loan. It's just too risky. 0:10:01.559 --> 0:10:03.760 It's pretty much one of those don't ever do it things. 0:10:03.760 --> 0:10:05.320 In our opinion, I don't want to have my name 0:10:05.400 --> 0:10:07.760 on those loan documents. And so MERV, what should you 0:10:07.800 --> 0:10:09.959 do legally financially as well? 0:10:10.000 --> 0:10:10.120 Here? 0:10:10.280 --> 0:10:12.880 Like you're on shaky ground. The only thing you can do, 0:10:12.960 --> 0:10:14.720 honestly is just to have a heart to heart with 0:10:14.760 --> 0:10:17.720 your with your great niece. It's worth coming in with 0:10:17.840 --> 0:10:20.480 like without your guns blazing, and having a more kind 0:10:20.480 --> 0:10:22.720 of honest conversation because she might not even be aware 0:10:23.360 --> 0:10:25.360 of what's going on here. I mean, I think given 0:10:25.760 --> 0:10:27.719 all the talk about student loan forgiveness over the past 0:10:27.800 --> 0:10:29.920 couple of years, there's a chance she's like, oh, I 0:10:29.960 --> 0:10:31.679 thought that got written off. I thought the gut that 0:10:31.720 --> 0:10:34.280 the federal government was gonna forgive that. At a point, 0:10:34.320 --> 0:10:37.319 there's a lot of people confused about the stack. It 0:10:37.360 --> 0:10:39.480 was just a constantly it seemed like every week there 0:10:39.520 --> 0:10:40.080 was something new. 0:10:40.360 --> 0:10:42.080 So she might not even know that MERV is being 0:10:42.160 --> 0:10:45.000 like getting their bills now and getting money taken essentially 0:10:45.040 --> 0:10:48.560 actively exactly, So I would just reach out to her, 0:10:49.240 --> 0:10:52.120 just first put that under radar. I can't imagine though, 0:10:52.120 --> 0:10:57.040 that she's also not receiving requests for this money delinquency notices. Yeah, 0:10:57.080 --> 0:10:59.680 but uh, you know, try to have this chat in person. 0:10:59.720 --> 0:11:01.280 I think that can go a long way as well 0:11:01.320 --> 0:11:05.160 as opposed to like shooting her text message or an email, 0:11:05.840 --> 0:11:07.520 but try and find out if she'll be able to 0:11:07.800 --> 0:11:11.679 resume making some payments, because the ability to show her 0:11:11.760 --> 0:11:14.040 how this is impacting you, right, Like, have a running total, 0:11:14.160 --> 0:11:17.320 show her how much you've paid, and let her know that, hey, 0:11:17.440 --> 0:11:20.320 it'd be great to receive that money back over time, 0:11:20.600 --> 0:11:24.160 maybe not expected all at once, but it's worth taking 0:11:24.160 --> 0:11:28.079 a more relational tact here because like I don't think you'd, like, 0:11:28.120 --> 0:11:30.319 you don't really have much legal recourse because your name 0:11:30.360 --> 0:11:32.320 is on the loan and so she doesn't have to 0:11:32.360 --> 0:11:34.360 pay you back, like you would have to go into 0:11:34.520 --> 0:11:37.360 more legal territory, which I'm guessing you want to try 0:11:37.360 --> 0:11:40.040 to avoid doing. Like you could sue her if you can, 0:11:40.240 --> 0:11:42.640 if she has the ability to pay and she's not paying, 0:11:42.880 --> 0:11:44.880 you could see her in small claims but I'm guessing 0:11:44.960 --> 0:11:46.600 that's not something that you want to do, and that 0:11:46.679 --> 0:11:49.360 this is going to be able to be more eloquently 0:11:49.440 --> 0:11:51.959 solved by y'all talking this over. Yeah, it's one of 0:11:52.000 --> 0:11:53.920 the and you can tell her personally, Hey, I co 0:11:54.000 --> 0:11:55.880 signed for you in an effort to try to help 0:11:55.920 --> 0:11:58.440 you out when you needed it, and now I feel 0:11:58.520 --> 0:12:01.160 like the tables have turned and I need you to 0:12:01.160 --> 0:12:04.600 help me out and pay what you owe, and we 0:12:04.640 --> 0:12:05.880 need to come to a solution here. I think the 0:12:05.920 --> 0:12:08.079 emotional peel that you're right, Matt, is really all that 0:12:08.160 --> 0:12:10.360 MERVH has here. I think it's important to note that 0:12:10.440 --> 0:12:12.760 late payments or a lack of payments being made will 0:12:12.800 --> 0:12:16.000 impact your credit score as well as hers. So she's 0:12:16.040 --> 0:12:19.480 not paying that this could negatively impact her credit score. 0:12:19.640 --> 0:12:20.280 She needs to know that. 0:12:20.320 --> 0:12:22.600 I would highlight that for her. And then if you 0:12:22.640 --> 0:12:25.280 stop paying for some reason, you're harming both your credit 0:12:25.400 --> 0:12:27.320 and her. So this is one of those things where 0:12:27.760 --> 0:12:29.640 it's like lighting both of yourselves on fire at the 0:12:29.679 --> 0:12:34.000 same time, which I wouldn't advise. And because the truth is, 0:12:34.120 --> 0:12:37.880 if you do that and you say, let's say, try 0:12:37.920 --> 0:12:40.120 to prevent the credit union from taking money out of 0:12:40.160 --> 0:12:42.400 your account. That could prevent you from being able to 0:12:42.440 --> 0:12:44.400 buy a home or a car, or even rent a 0:12:44.440 --> 0:12:47.200 place in the near future. It will impact her for 0:12:47.240 --> 0:12:49.160 a long time to come from a credit perspective too, 0:12:49.720 --> 0:12:52.160 you would also likely be sued by the lender for 0:12:52.480 --> 0:12:54.520 the outstanding debt. So it's not like you're going to 0:12:54.559 --> 0:12:56.720 be able to get away with it either. Right at 0:12:56.720 --> 0:12:59.160 some point they're going to come for you, come for 0:12:59.280 --> 0:13:01.520 the money, and so we can't sugarcoat it. 0:13:01.559 --> 0:13:01.800 MERVH. 0:13:01.880 --> 0:13:04.040 You're between a rock and a hard place here. We 0:13:04.080 --> 0:13:06.520 wish you good luck with that conversation with your great niece. 0:13:06.720 --> 0:13:09.160 We hope you're able to convince her to start paying 0:13:09.640 --> 0:13:11.520 in order to keep your finances, your credit, and your 0:13:11.559 --> 0:13:14.040 relationship intact. There's just a lot at stake here with 0:13:14.120 --> 0:13:17.360 this conversation. It's not easy, No, it definitely is not. 0:13:17.480 --> 0:13:19.560 And hopefully this is a lesson learned without having to 0:13:19.640 --> 0:13:22.160 experience this firsthand. And I will say, Joel, this is 0:13:22.240 --> 0:13:26.440 one principle that we are in total agreement on with 0:13:26.520 --> 0:13:29.319 Dave Ramsey because I remember listening to him, like I 0:13:29.360 --> 0:13:31.760 don't know, fifteen twenty years ago, and he would always 0:13:31.760 --> 0:13:34.600 harp on folks not co signing for somebody else. It's 0:13:34.640 --> 0:13:37.600 a terrible decision, and this is exactly the exact kind 0:13:37.640 --> 0:13:39.760 of situation that you want to find yourself avoiding. 0:13:39.800 --> 0:13:42.319 The truth is, yeah, if you help co sign for somebody, 0:13:42.800 --> 0:13:44.560 you're on the hook and there's a decent chance you 0:13:44.640 --> 0:13:47.320 end up paying for it, and the relational damage that 0:13:47.400 --> 0:13:50.800 often gets done in these situations can be severe. All right, Matt, 0:13:50.800 --> 0:13:53.880 We've got more questions to get to, including well, is 0:13:53.920 --> 0:13:55.319 there a way that you can actually help out a 0:13:55.400 --> 0:13:58.120 much younger member of your family when it comes to 0:13:58.160 --> 0:14:00.560 building credit. We'll talk about that. Get to a bunch 0:14:00.600 --> 0:14:02.280 more of your money questions right after this. 0:14:10.160 --> 0:14:12.480 A right, Joel, we are now back in the break. 0:14:12.640 --> 0:14:14.960 Let's hear from another listener. This is a listener who 0:14:15.600 --> 0:14:18.240 has some crummy benefits from her employer. 0:14:18.960 --> 0:14:21.360 Hi, Matt, Joel. My name is Vicky and I'm from Ohio. 0:14:21.760 --> 0:14:24.160 I work for an employer that offers a four oh 0:14:24.240 --> 0:14:28.760 one K and an HSA. There is no matching for either. 0:14:30.040 --> 0:14:34.760 I max out my AHSA every year. My FIOH one 0:14:34.840 --> 0:14:39.360 K I do not use because it's through an insurance company. 0:14:39.400 --> 0:14:42.560 They have high fees and the paperwork says that they 0:14:42.600 --> 0:14:46.200 can change the pricing for services at any time without 0:14:46.240 --> 0:14:50.000 a learning the investor. I have some money in a 0:14:50.080 --> 0:14:52.240 brokerage account that I would like to put into a 0:14:52.280 --> 0:14:55.080 four oh one K, but I'm uncomfortable using this four 0:14:55.120 --> 0:14:59.040 oh one K, and I'm not sure what I should do. 0:14:59.440 --> 0:15:02.920 Thank you for your help by Matt. 0:15:02.920 --> 0:15:04.920 All Right, there's good news and bad news here for Vicky, 0:15:04.960 --> 0:15:07.440 isn't there? And I'm glad that she has access to 0:15:07.480 --> 0:15:09.320 multiple tax advantage retirement accounts. 0:15:09.360 --> 0:15:10.040 That's the good news. 0:15:10.080 --> 0:15:13.120 Yeah, sounds like she's using her HSA properly. She's maxing 0:15:13.120 --> 0:15:14.920 that out letting it grow. Also good news, which is 0:15:14.960 --> 0:15:17.000 something we talk about regularly on the show. And we'll 0:15:17.040 --> 0:15:19.440 put a link to an article about HSA's and how 0:15:19.440 --> 0:15:21.640 good they can be in the show notes. By the way, 0:15:21.880 --> 0:15:24.200 just random note here, Vicky, you could always move funds 0:15:24.200 --> 0:15:27.680 from that HSA to Fidelity over time if the fees 0:15:27.760 --> 0:15:30.240 are high on that account too. You didn't mention kind 0:15:30.240 --> 0:15:32.240 of what the HSA fees you're encountering are, but that 0:15:32.360 --> 0:15:34.480 might be the best move to avoid some of the 0:15:34.480 --> 0:15:37.920 fees that you might be encountering. But huge bummer about 0:15:37.920 --> 0:15:40.040 your four to one K being with an insurance company. 0:15:40.080 --> 0:15:43.200 That's the bad news. That is always a giant red flag. 0:15:44.080 --> 0:15:48.400 Makes me frustrated for anybody out there dealing with that reality, 0:15:48.920 --> 0:15:51.240 because that means that the fees are significantly higher than 0:15:51.440 --> 0:15:53.360 what they would be if you are with one of 0:15:53.400 --> 0:15:55.320 the low cost broken terms that we talk about here 0:15:55.440 --> 0:15:59.120 all the time, specifically Vanguard, Fidelity, Schwab. Those ones are 0:15:59.760 --> 0:16:04.880 the those broken terms make costs essentially non existent for 0:16:05.240 --> 0:16:06.720 anybody who does business with them. 0:16:06.880 --> 0:16:07.160 Yeah. 0:16:07.320 --> 0:16:10.160 Yeah, there are small expensary shows, but they're infinteslaly small 0:16:10.200 --> 0:16:13.040 and they barely impact the return that you see. But 0:16:13.080 --> 0:16:15.920 if you're with an insurance company, they could be ten, fifteen, 0:16:16.280 --> 0:16:19.400 twenty times as high and they can massively eat into 0:16:19.400 --> 0:16:22.040 your returns over time. So this is yes, a big problem. 0:16:22.120 --> 0:16:23.800 And if you had a match offer to you, well, 0:16:23.800 --> 0:16:25.400 the advice would be to suck it up and get 0:16:25.440 --> 0:16:28.800 the match, even though the investment options are massively inferior. 0:16:29.000 --> 0:16:31.360 But with no match, I think that four one k man, 0:16:31.400 --> 0:16:34.400 I think if that is like a it's dead to me, right, Like, yeah, totally, 0:16:34.480 --> 0:16:36.680 I don't need that four one k honestly if it's 0:16:36.680 --> 0:16:38.800 that bad and it doesn't come with any match either, well, 0:16:38.840 --> 0:16:41.160 and good on her for having looked at the fine print, 0:16:41.200 --> 0:16:43.160 the fact that it's with an insurance company, the fact 0:16:43.200 --> 0:16:45.560 that they can change the terms, you know, the price, 0:16:45.680 --> 0:16:48.480 the rate at any point. Too many folks make a 0:16:48.520 --> 0:16:52.320 really important decision like this without having dug into the details, 0:16:52.360 --> 0:16:55.720 without any due diligence. And I'll say so, regarding the 0:16:55.720 --> 0:16:58.760 money that you have over there in your separate investing account, 0:16:58.800 --> 0:17:01.200 your brokerage account, what I would do here is to 0:17:01.400 --> 0:17:04.240 leave that money that you have in that account, like, 0:17:04.320 --> 0:17:05.000 leave it in place. 0:17:05.200 --> 0:17:07.360 I would not. It sounds like you might be considering 0:17:07.359 --> 0:17:10.960 selling some positions, selling some funds, some stocks there where 0:17:10.960 --> 0:17:14.159 you would trigger capital gains tax in order to fund 0:17:15.240 --> 0:17:18.240 a very subpar for one k, again with no match, 0:17:18.359 --> 0:17:21.520 And that would be just a terrible situation to find 0:17:21.520 --> 0:17:24.280 yourself in. Like, if you have additional funds and you 0:17:24.320 --> 0:17:27.120 want to invest outside of that brokerage account, then we've 0:17:27.160 --> 0:17:28.600 got some ideas for you. But I would not be 0:17:28.640 --> 0:17:30.480 looking to pull that money from that in order to 0:17:30.800 --> 0:17:33.680 get it within a four to one k somewhere else. Yeah. 0:17:33.800 --> 0:17:35.960 No, the four to one k, I think is just 0:17:36.800 --> 0:17:39.520 I would ignore it, pretend like he doesn't exist. Essentially, 0:17:39.800 --> 0:17:42.520 you're already funding your HSA quite nicely. You've also got 0:17:42.520 --> 0:17:44.760 money in the brokerage account, and VICKI, I'm not sure 0:17:44.800 --> 0:17:47.480 if you have any additional dollars in particular outside of 0:17:47.480 --> 0:17:50.720 the brokerage account that you would like to use to invest, 0:17:50.800 --> 0:17:52.880