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Speaker 1: Welcome to Hat of Money. I'm Joel and I am Matt.

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Speaker 1: Today we're answering your listener questions.

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Speaker 2: Joel, what if we started answering listener questions on like

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Speaker 2: Thursday or something, I'll throw everybody off. Listeners will be

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Speaker 2: shocked if that were the case, and we're not going

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Speaker 2: to do that to folks, so I don't worry about that.

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Speaker 2: We are going to hear from listeners today. On Monday, Joel,

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Speaker 2: We're going to hear from a listener who is considering

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Speaker 2: unloading a COVID car. It's a car that she purchased

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Speaker 2: during the pandemic. Another one is from some newlyweds who

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Speaker 2: are considering combining accounts, their financial accounts and their money.

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Speaker 2: They're trying they want to hear our inputs. We have

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Speaker 2: to say you combine the money or not exactly. That's

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Speaker 2: kind of like the bigger question right Then another listener,

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Speaker 2: he's wondering what he should do if he has over

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Speaker 2: contributed to his four one K. He kind of has

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Speaker 2: like the opposite problem that most Americans have. But I'm

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Speaker 2: looking forward to that one and others during today's episode.

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Speaker 2: And by the way, that's I think that could that

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Speaker 2: might be more of an issue for folks as more

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Speaker 2: and more four to one K plans auto enroll their

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Speaker 2: employees and sometimes have like built in automatic increases to

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Speaker 2: the percentage of their pay that goes towards a four

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Speaker 2: one K. So you might be hearing that and thinking, oh,

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Speaker 2: what a luxury. Must be nice. It could happen to you.

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Speaker 1: It could, yeah, especially like yeah, if you're let's say

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Speaker 1: you're twenty three. I remember that, Matt when when I

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Speaker 1: was that young, and I was like, who max is

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Speaker 1: out these accounts? And then you get for the long

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Speaker 1: in your career and you're like, wait, I think I

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Speaker 1: might be able to get a little bit closer.

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Speaker 2: That's right. Plus, when it's based on a percentage like

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Speaker 2: that and you get a pay increase, there's just, yeah,

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Speaker 2: a lot of different scenarios where that could be the case.

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Speaker 2: I don't know, as I was saying it, maybe think

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Speaker 2: that like, oh, yeah, what a ridiculous problem to have.

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Speaker 2: But I think there might be more folks, especially our listeners,

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Speaker 2: who might have this problem. I agreed, yeah, all right,

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Speaker 2: that real quick.

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Speaker 1: I just wanted to mention, if you're not on the

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Speaker 1: Facebook group to have the money Facebook group, you should

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Speaker 1: be if you're on Facebook, because it's one of the

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Speaker 1: best corners of the Internet. A lot of your fellow

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Speaker 1: listeners helping each other out from time to time, offering suggestions,

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Speaker 1: people asking questions, and then just getting the hive mind

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Speaker 1: at work to help you out with whatever money problem

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Speaker 1: you're facing. And somebody mentioned this the other day, matth

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Speaker 1: thought this was good. Have you ever used the OOPS

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Speaker 1: paint section at home Depot or Low's.

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Speaker 2: I have, not, like the pre mixed stuff that somebody

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Speaker 2: doesn't pick up.

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Speaker 1: Right, Yeah, it's like somebody didn't pick it up or

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Speaker 1: they were like, oh, you kind of screwed this one up.

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Speaker 1: That's actually not the color I requested, and so they

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Speaker 1: put it on the discount shelf.

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Speaker 2: I've seen it before, but I have never actually I

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Speaker 2: have sold Okay, so you can take back paint that

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Speaker 2: isn't pre mixed, but I have. This is years ago now.

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Speaker 2: Actually just came to mind. I have ordered some paint

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Speaker 2: and it was a five gallon bucket and uh, I

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Speaker 2: can't remember. It was when we were flipping a home

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Speaker 2: and we couldn't use it for some reason. I don't

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Speaker 2: I literally cannot remember why. But I listed it on

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Speaker 2: I think at that point in time, Craigslist and somebody

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Speaker 2: bought it. So somebody there got a deal because it

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Speaker 2: was the shade that they're looking for.

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Speaker 1: The shows how old you are or nobody uses Craigslist anymore.

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Speaker 2: Is it still around? Actually?

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Speaker 1: I think yeah, it exists, but I don't know the

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Speaker 1: last time I used it.

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Speaker 2: But Listener Paint.

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Speaker 1: Yeah, Listeners was like, hey, that's the way to get

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Speaker 1: like massively discounted paint, and I was I think two

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Speaker 1: things on this. I think one that's true, especially if

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Speaker 1: you got like a smaller project around You're like, I'm

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Speaker 1: painting a pinch or something like that. Yeahs oftentimes you're

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Speaker 1: talking about a court instead of a gallon or or

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Speaker 1: I don't know, you don't want to get like three

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Speaker 1: quarters of the way into a project though, like painting

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Speaker 1: somebody's bedroom, and then you're like, I ran out of this.

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Speaker 2: Oops, paint this custom paint that I don't know if

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Speaker 2: it's exactly correct right, like it may not necessarily match

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Speaker 2: up to the code that's on.

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Speaker 1: The exactly or also, oops, it's not my favorite color.

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Speaker 1: And now I'm pot committed and I got to go

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Speaker 1: get another gallon of this junk so I think, oops,

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Speaker 1: paint can be really cool for some things. But also

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Speaker 1: I don't know, if it's an extra twenty five bucks

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Speaker 1: and you're talking about all the time and the labor

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Speaker 1: that you're going to extend to paint something, maybe make

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Speaker 1: sure it's the color you want to.

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Speaker 2: If it's something like out back in the backyard that

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Speaker 2: no one's going to see and you don't really care

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Speaker 2: about the color because half of why you paint something

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Speaker 2: is to like preserve the wood. You know, it's to

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Speaker 2: keep the moisture out, and you got to get a

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Speaker 2: good coat of pain on there, so you're not forking

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Speaker 2: out more money because you're also paying for some wood

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Speaker 2: to be replaced, which.

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Speaker 1: Is why it's nice to live in a brick house,

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Speaker 1: which you don't have to Oh my gosh. Yeah, but

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Speaker 1: I'm saying you used to. You used to live in

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Speaker 1: like a concrete house.

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Speaker 2: I was so jealous.

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Speaker 1: It was like a bunker.

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Speaker 2: It was like, I mean, literally a bulletproof house. Okay,

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Speaker 2: So this actually remind I love that Home Depot does this.

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Speaker 2: I'm assuming Lows does it as well. But part of

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Speaker 2: the reason I love this is because it's paint that's

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Speaker 2: not now going to waste, which of course makes me

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Speaker 2: think of food. And this is really similar to we've

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Speaker 2: talked about this before. I think it's been a minute

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Speaker 2: but too Good to Go, which is an app or

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Speaker 2: a website. It is this company that's looking to eliminate

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Speaker 2: food waste throughout the country and it recently came back

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Speaker 2: on my radar because they a few months ago, or

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Speaker 2: maybe several months ago at this point, they partnered with

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Speaker 2: Whole Foods and so you can go there now, which

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Speaker 2: is funny because you and I were there recently and we're like, now,

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Speaker 2: look at all this pre prepared food. And one of

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Speaker 2: the things they do with the food, and you.

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Speaker 1: And I questioned, was the hold this get used? Oh

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Speaker 1: there's so much of it.

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Speaker 2: Sweet perks for the employees. Yeah, you're here, I think

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Speaker 2: some of the so they've got surprise bags. And it

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Speaker 2: can be a sweet deal because you're paying something like

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Speaker 2: ten dollars for thirty dollars of goods, thirty dollars of

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Speaker 2: prepared food, and it's something to consider. You know, if

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Speaker 2: I was looking for maybe a healthier meal last minute

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Speaker 2: versus let's say going to get some fast food, I

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Speaker 2: would consider it. And it's not something I thought too

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Speaker 2: much about until we talked with Whole Foods founder John

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Speaker 2: Mackie on the show. We can link to that in

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Speaker 2: the show that's said, you want to share why you

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Speaker 2: and I were in Whole food.

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Speaker 1: That I was going to say, because I says like

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Speaker 1: a recent food hack, people will probably be like, but

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Speaker 1: I thought, man, Joel usually shop at all to your Costco,

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Speaker 1: And that is true.

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Speaker 2: Were ninety nine percent.

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Speaker 1: Of our grocery, right, and we have been darkening the

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Speaker 1: door of Whole You do legal as well, legal, Yes,

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Speaker 1: we never closed by. We've been going to Whole Foods

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Speaker 1: more recently, not just because we like John Mackie and

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Speaker 1: he was a great guest, but because if you're an

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Speaker 1: Amazon Prime member on Friday nights, you can get one

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Speaker 1: of their freshly made cheese pizza for eight dollars and

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Speaker 1: so on Pizza movie nights. Oh it's like the same

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Speaker 1: price as like Papa John's, but it's like way better. Well,

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Speaker 1: they build it, right, or build it? You don't build

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Speaker 1: a pizza, I guess they construct one.

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Speaker 2: They construct it and then they fire it in the

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Speaker 2: oven right there. And so our families we get together

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Speaker 2: and we do what we call pizza movie Night every

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Speaker 2: other Friday, and for the longest stretch. Man, So we've

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Speaker 2: been doing it close to two years. Where you and

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Speaker 2: I we'd head to Costco and get their super affordable pizzas. Yep.

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Speaker 2: But you know what, Man, after a while that pizza

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Speaker 2: it kind of weighs on you. It's not the best pizza,

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Speaker 2: it's not the best quality. But and initially you're like, oh, yeah,

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Speaker 2: this is great, what a great price. You're also grabbing

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Speaker 2: some other things while you're there at the store, no

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Speaker 2: big deal. But man, hitting it every two weeks pretty

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Speaker 2: much without fail. When it comes to pizza movie night,

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Speaker 2: we've got a quick with the Alt Guards, our combined

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Speaker 2: family Moniker. It gets all quick. And I guess a

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Speaker 2: few months ago we'd start to be like, you want

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Speaker 2: to just do burgers instead? Maybe you'll do We'll switch

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Speaker 2: it up because the thought of having another Costco pizza. Yeah,

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Speaker 2: I feel like I need to give it like six

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Speaker 2: to nine months and then I can go back to it,

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Speaker 2: yes and be like, oh, it's so good. I do

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Speaker 2: actually miss this.

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Speaker 1: The Whole Foods, especially when it's on sale, is like

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Speaker 1: this incredible happy medium. It's a step up of delight.

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Speaker 1: It is a step up, represents a fantastic value.

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Speaker 2: And they got other not flavors. Man, I'm getting all

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Speaker 2: my pizza terminology off, toppings, toppings, different styles of pizza

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Speaker 2: that you can get. And last time we got the

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Speaker 2: uh risotto and garlic.

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Speaker 1: Yeah, that thing was so good.

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Speaker 2: True your wife Emily and I both in particular, really

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Speaker 2: like that one. It was tasty.

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Speaker 1: Tore it up from the floor up. Yeah, all right,

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Speaker 1: so yeah, just oops, paint Whole Foods pizza too good

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Speaker 1: to go, a few tips, and there a lot of

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Speaker 1: options out there for folks. Yeah, all right, let's get

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Speaker 1: to your questions though. After we mentioned the beer we're

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Speaker 1: having on this episode. This one's called a head Full

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Speaker 1: of Dynamite. It's a hazy ipa by Fremont Brewing. I

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Speaker 1: picked this one up when I was in California just

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Speaker 1: a few weeks ago. We'll give our thoughts on this

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Speaker 1: one at the end of the episode.

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Speaker 2: Dino, Might I know Mike normally spelled with an air,

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Speaker 2: which is what's the show? Yeah? Something from like the eighties?

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Speaker 1: Yeah, was it the Jefferson's Orrible or the eighteen.

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Speaker 2: Now I don't think it was that, Okay, I have

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Speaker 2: no idea. I'm just thrown out old eighties TV shows. Yeah,

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Speaker 2: I didn't actually watch as a kid. All right.

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Speaker 1: So, and by the way, if you have a money

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Speaker 1: question for the two of us, we'd love to hear

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Speaker 1: from you. You go to have the Money dot com,

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Speaker 1: slash ask for directions, or truly just record the voice

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Speaker 1: memo on your phone, send it to us via email,

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Speaker 1: super quick and easy, and hopefully we can take it

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Speaker 1: next week on the show. Matt, let's get to a question.

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Speaker 1: This one is about combining finances as you're Married's.

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Speaker 3: Hi, Matt and Joel. This is Brianna from Chicago. I

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Speaker 3: love your show. I just had a question. So me

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Speaker 3: and my husband were recently married in January, and we

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Speaker 3: are considering combining our bank accounts. And really the reason

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Speaker 3: we're considering it is just because it seems like that's

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Speaker 3: what you're supposed to do when you get married. But

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Speaker 3: we're trying to figure out if it's for us or not,

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Speaker 3: so we're going through some pros and cons. Really, the

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Speaker 3: main pro that I can think of is that I

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Speaker 3: am really into budgeting, and I don't really get a

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Speaker 3: picture of the whole family situation because I don't really

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Speaker 3: see what's happening with his dollars. But other than that,

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Speaker 3: we really couldn't think of much else for pros and cons.

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Speaker 3: We do kind of split our bills according to how

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Speaker 3: much we make, so whoever makes more money ends up

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Speaker 3: paying a little bit more of the bills. We are

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Speaker 3: planning on having kids soon, so I know our expenses

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Speaker 3: will change soon, but it's nothing that I think we

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Speaker 3: can't handle. We'll just adjust accordingly, and I don't see

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Speaker 3: any issues with that going forward. So if you guys

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Speaker 3: know any pros and cons that could help us make

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Speaker 3: this decision, that would be really helpful. Thank you so much.

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Speaker 2: Brianna. Congrats you got married back in January. But in

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Speaker 2: my book, you are still one percent a newly wed.

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Speaker 1: When you crossover and become not a newly web.

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Speaker 2: Eighteen months, like once you get to tw years is

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Speaker 2: kind of like, oh, yeah, we've been married for a

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Speaker 2: couple of years. Yeah, when there's another word for it,

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Speaker 2: like one year that didn't sound very long. Two years,

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Speaker 2: Oh okay, you can see a couple of years in

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Speaker 2: my book. Eighteen months and greener, you're still a newlywed.

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Speaker 2: So the pro that you offered that man, that's a

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Speaker 2: huge one. It's likely the number one reason to strongly

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Speaker 2: consider combining accounts. And I think it'll put you to

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Speaker 2: on the same page from a record keeping standpoint, which

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Speaker 2: is such a big benefit, especially for someone like you,

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Speaker 2: your personalities, maybe somebody who's a little more into the numbers.

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Speaker 2: But on top of that, it just makes it easier

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Speaker 2: to create and achieve mutual goals. And man, I will

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Speaker 2: say after I mean, Kate and I we married for

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Speaker 2: seventeen years, but I believe that there is real power

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Speaker 2: in pulling your resources as a married couple, and it's

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Speaker 2: just one of the I think one of the ultimate

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Speaker 2: ways to show that you're on the same team, right,

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Speaker 2: Like you're wearing the same jersey. Yeah, at this point,

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Speaker 2: you're working towards some of the same life goals. And

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Speaker 2: I think that's huge, pulling in the same direction. And

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Speaker 2: there's something kind of subtle about that. In some ways,

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Speaker 2: Matt and s people might give that. I don't give

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Speaker 2: much credence to that, but there's something mental that happens

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Speaker 2: when you're kind of doing that, moving in the same

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Speaker 2: direction together that really can be a booster towards helping

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Speaker 2: you guys achieve your financial goals.

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Speaker 1: And it's not just our bias, although I think we

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Speaker 1: are probably just to lay it out, there were probably

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Speaker 1: bias in that direction. Anyway, Hey, you're combining your lives.

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Speaker 1: You mentioned that you're going to likely have a kiddo

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Speaker 1: in the near future, and I think that just means

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Speaker 1: you're intertwining your lives to basically the greatest degree possible.

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Speaker 1: So why not combine your finances. But it's not just that.

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Speaker 1: It's studies too that reflect that combining your finances is

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Speaker 1: the best thing typically typically and I say typically because

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Speaker 1: it's not the best for everyone. But the most recent

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Speaker 1: study that we saw the couples who combine money, they

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Speaker 1: experience more relational satisfaction. So I don't know if you

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Speaker 1: like being happy, because that's another check in the combined

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Speaker 1: accounts column. Because when you get married, you're intentionally, like

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Speaker 1: I said, you're weaving your lives together for better or

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Speaker 1: for worse, even like say it in the vows right,

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Speaker 1: rich or poorer, And to make those vows and then

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Speaker 1: to hold back elements of life integration, I think it

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Speaker 1: can have lingering side effects. And so there's something about

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Speaker 1: combining money that maybe forces you to have hard conversations,

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Speaker 1: which isn't always fun in the moment, but those hard

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Speaker 1: conversations are something you might otherwise completely avoid, and I

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Speaker 1: think it could cause relational drift over time. That avoidance

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Speaker 1: can lead to growing distance in the relationship. And so

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Speaker 1: I think you actually want to provoke these conversations and

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Speaker 1: you're kind of forced to talk about money regularly, and

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Speaker 1: I think that that's going to help in that endeavor.

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Speaker 1: So I think that combining finances can actually lead to

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Speaker 1: a stronger relationship. It doesn't mean that it's easier necessarily,

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Speaker 1: but I think it can lead to just increased strength.

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Speaker 2: There's an element of self sacrifice as well, because that's

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Speaker 2: one of the things that you do, I mean when

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Speaker 2: you get married, is that you're not doing everything for

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Speaker 2: to make you happy, but to make someone else happy.

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Speaker 2: And I think that's one of the like, one of

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Speaker 2: the strongest elements of a healthy marriage is a willingness

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Speaker 2: to defer to the other person. And whether it's Victor

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Speaker 2: Frankel looking to the things that lead to a fulfilling life,

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Speaker 2: but oftentimes it's giving yourself to something large or something

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Speaker 2: outside of yourself, as opposed to just seeking, Oh, how

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Speaker 2: can I make myself the happiest, Like, how do I

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Speaker 2: personally garner the most life satisfaction? Sometimes it's dedicating your

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Speaker 2: life to something that you think is even more important

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Speaker 2: than yourself. And in this case, what we're talking about

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Speaker 2: is a relationship.

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Speaker 1: I think kind of what you're hitting at here, too, Matt,

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Speaker 1: is that it's less of like a fifty to fifty mindset.

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Speaker 1: Let's split this thing equally, and it's more of like

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Speaker 1: one hundred hundred mindset, which the math doesn't really work

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Speaker 1: on that, but just you know, at least in your

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Speaker 1: mind you can envision what that means, what that looks like.

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Speaker 1: And so, like I guess I've heard people talk about

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Speaker 1: at times, Okay, my income is mine, my wife's got

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Speaker 1: her student loans, she's got to payoff, and then we're

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Speaker 1: each chipping in and contributing to half the vacation. That

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Speaker 1: kind of feels rigid and individualistic. And there's nothing wrong

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Speaker 1: with individualism in some parts of society, but in this case,

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Speaker 1: you're missing out on the healthy team vibe, which is

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Speaker 1: I think what you're striving for. Typically in marriage, it

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Speaker 1: can kill some of the magic in the relationship. If

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Speaker 1: you talk about finances like that, and there's Yeah, there's

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Speaker 1: this real power in two people who love each other

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Speaker 1: pushing for the same thing and saying no, no, no.

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Speaker 1: Like when we got married, those student loans kind of

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Speaker 1: became ours and so let's work on eliminating them together.

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Speaker 1: It's a it's a cheap phrase, Matt, but teamwork makes

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Speaker 1: a dream work. And I think I think there's I

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Speaker 1: think there's like some really truth to that. And if

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Speaker 1: the vacation is your goal together as a couple, saving

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Speaker 1: up for that and then being able to pay for

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Speaker 1: it in cash, it makes the vacation awesome. Whereas if

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Speaker 1: you're each chipping in, I don't know, it's it changes

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Speaker 1: the vibe.

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Speaker 2: I think, Yeah, I totally agree. Yeah, and I mean

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Speaker 2: and I will say, and you and Emily as well.

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Speaker 2: But this is the approach that we have taken. Like Kate,

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Speaker 2: she put her career on hold for over a decade

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Speaker 2: not to raise our family. And so does that mean

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Speaker 2: that she doesn't get to spend any money that I

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Speaker 2: have earned over the past over the past ten years.

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Speaker 1: Of course, not because you've benefited from that would be ridiculous.

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Speaker 1: Her choosing not to turn an income, and that's a

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Speaker 1: part of could share.

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Speaker 2: More than you. Of course, yes, but she's so much

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Speaker 2: smarter she is actually, But you're talking about like avoiding

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Speaker 2: sort of like more of a business relationship, because it

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Speaker 2: starts to get weird if you start thinking through like

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Speaker 2: are you going to have a conversation where it's just like, okay,

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Speaker 2: now you're your prank. I guess what I'm getting at

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Speaker 2: is like, are you then going to say, okay, so

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Speaker 2: now that you're staying at home, you're not earning as much,

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Speaker 2: but like, do you get an allowance? Is there some

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Speaker 2: sort of stipend that you get because okay, now there's

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Speaker 2: two kids at home, all right, doesn't quite get doubled.

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Speaker 2: That's a weird sort of conversation to have.

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Speaker 1: Right to sound like some weird nineteen fifty stuff, Yes, exactly.

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Speaker 2: And so I think that's a big part of what

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Speaker 2: makes a healthy relationship, I think. And this is I

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Speaker 2: feel like we're starting to get more into relational advice

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Speaker 2: than money vice, like this, yeah, being dependent on each

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Speaker 2: other as opposed to being independent. And I think for

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Speaker 2: folks who are huge proponents of keeping their money separate,

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Speaker 2: they're not fully dependent on each other. And that's such

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Speaker 2: a beautiful part of what I think makes the marriage work.

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Speaker 1: And you have to make so many decisions that, by

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Speaker 1: necessity are dependent decisions, and then to keep your money independent.

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Speaker 1: I think you're you're making some of those decisions harder

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Speaker 1: because you're saying we're going to be dependent on each

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Speaker 1: other as I as we choose to bring a kiddo

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Speaker 1: into this world, and as I'm sacrificing for this shared goal.

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Speaker 1: But if money's kept separate, I don't know, that feels

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Speaker 1: like you're pulling in opposite directions at that point. Yeah,

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Speaker 1: and you mentioned business time, makes me think you want

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Speaker 1: it to be more like Flight of the Concord's business time,

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Speaker 1: less like Gordon Gecko business time.

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Speaker 4: Right.

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Speaker 1: So so but I think if if that's why, you

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Speaker 1: just don't want to think of your finances as some

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Speaker 1: sort of You're not some corporation, right, you are an

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Speaker 1: interdependent family unit, And so that's it's it's our preference,

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Speaker 1: and we think that the best outcomes based on our

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Speaker 1: personal experience and then based on also the data stats

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Speaker 1: based on Yeah, it just shows that's got it works

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Speaker 1: for everybody, right, Like That's what I guess.

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Speaker 2: So we've kind of been going on about how you

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Speaker 2: should combine your finances. But there are some instances where

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Speaker 2: if you're not totally sure, if there are some trust issues, yeah,

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Speaker 2: there are certain things to work through. If there has

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Speaker 2: been a history of poor financial habits. Maybe on the other.

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Speaker 1: Part deception or deception, you just straight.

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Speaker 2: Up line absolutely and so.

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Speaker 1: And that's particularly true, I think, Matt for people who

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Speaker 1: have been married for a long time and they're like, oh,

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Speaker 1: wait a second, I've seen a bunch of red flags.

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Speaker 1: I need to start making different choices because we have

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Speaker 1: combined things, and I have to start shoring up my

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Speaker 1: own financial future. Those are things we're thinking through. But

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Speaker 1: that doesn't sound like that's the case with Brianna and

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Speaker 1: they're in you know, newly wed merrill bliss totally. But

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Speaker 1: do leave some room for autonomy and individual freedom, right

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Speaker 1: because there can be a certain line item in your

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Speaker 1: budget where each of you is allowed to spend like

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Speaker 1: three hundred bucks a month, no questions asked me, whatever

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Speaker 1: the number you choose, even though all that money is

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Speaker 1: flowing from a single account. I guess you could have

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Speaker 1: the one combined and then two separate accounts. That's one

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Speaker 1: thing too. But if you want to buy fancy craft

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Speaker 1: beers and he could care less. Well, you still get

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Speaker 1: to and maybe he likes buying physical books and you're like,

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Speaker 1: that's stupid. The library is so much smarter. But guess what,

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Speaker 1: it's his money and he can do as he pleases

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Speaker 1: with it. Because I think as long as it's coming

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Speaker 1: out of this agreed to budget and the monthly spend

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Speaker 1: amount that you guys have come to together, it's fine,

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Speaker 1: and you can have you basically have zero say unless

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Speaker 1: it's like something immoral or something like that. I guess

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Speaker 1: you basically have no say over how your partner spends

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Speaker 1: the money. I think that's good too, because it gives

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Speaker 1: you that release valve of getting to do some of

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Speaker 1: the things that matter to you that you might not

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Speaker 1: agree on.

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Speaker 2: As a couple, and also leaves room for kind of

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Speaker 2: some sponsaneity as well, where it feels like you're able

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Speaker 2: to surprise the other. The other partner it's like, well,

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Speaker 2: how do I buy them gifts if she's over there

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Speaker 2: monitoring the my credit card? Okay, well there's a way

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Speaker 2: to do that with even I think with individual credit

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Speaker 2: cards that maybe you have spending limits set on that

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Speaker 2: you pay with your combined account. Like, I guess, I

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Speaker 2: just don't want folks to get too hung up on

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Speaker 2: that issue if they're wanting to do something a little

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00:19:00,280 --> 00:19:03,480
Speaker 2: special without it being completely broadcasted because they're getting an

433
00:19:03,520 --> 00:19:05,680
Speaker 2: alert every time to make a purchase.

434
00:19:05,760 --> 00:19:07,400
Speaker 1: Yeah, I tried the credit card statement, what's this five

435
00:19:07,440 --> 00:19:09,199
Speaker 1: hundred dollars hotel charge? And you're like, oh, well, you

436
00:19:09,320 --> 00:19:10,160
Speaker 1: just ruined the surprise.

437
00:19:10,240 --> 00:19:10,320
Speaker 2: Ye.

438
00:19:10,840 --> 00:19:13,080
Speaker 1: Yeah, you don't want that thing. Yeah, so you want

439
00:19:13,119 --> 00:19:14,359
Speaker 1: to save a little bit of room for that. And

440
00:19:14,800 --> 00:19:17,240
Speaker 1: the truth is, too not every relationship is created equal. Again,

441
00:19:17,280 --> 00:19:19,480
Speaker 1: we're talking about personal experience and we're talking about data.

442
00:19:19,520 --> 00:19:24,080
Speaker 1: But still there are reasons for other couples, understandably so,

443
00:19:24,119 --> 00:19:27,320
Speaker 1: to make different choices. This is just especially given kind

444
00:19:27,359 --> 00:19:29,680
Speaker 1: of the way Brandna you ordered your question, it makes

445
00:19:29,720 --> 00:19:32,960
Speaker 1: me think that combining your finances together makes a whole

446
00:19:32,960 --> 00:19:33,600
Speaker 1: lot of sense.

447
00:19:33,440 --> 00:19:35,520
Speaker 2: And especially with her, with her saying that kids are

448
00:19:35,520 --> 00:19:37,840
Speaker 2: in the future, because I mean, in my mind, that

449
00:19:37,880 --> 00:19:39,919
Speaker 2: makes it even more of an argument because what that

450
00:19:39,960 --> 00:19:42,680
Speaker 2: tells me again is that your earnings are going to

451
00:19:42,720 --> 00:19:45,520
Speaker 2: be they're gonna be hampered, Yeah, most likely by you

452
00:19:45,560 --> 00:19:47,160
Speaker 2: staying at home for a certain period of time.

453
00:19:47,200 --> 00:19:48,760
Speaker 1: If she was like, Hey, we've been dating for three weeks.

454
00:19:48,760 --> 00:19:50,719
Speaker 1: Should we combined finances? We be like no, but like

455
00:19:50,760 --> 00:19:53,640
Speaker 1: you're you've been married for you know, a decent chunk

456
00:19:53,640 --> 00:19:55,320
Speaker 1: of time and you're plan on having kids. It's like,

457
00:19:55,359 --> 00:19:57,000
Speaker 1: all right, I see the merit.

458
00:19:57,040 --> 00:19:59,240
Speaker 2: Yeah, all things to consider, and we shared more of

459
00:19:59,280 --> 00:20:01,679
Speaker 2: our personal sperience. But hopefully Brandon, that gets you pointed

460
00:20:01,720 --> 00:20:03,439
Speaker 2: in the right direction. Joe, We've got more to get to.

461
00:20:03,480 --> 00:20:05,960
Speaker 2: We're gonna hear from a listener. This is a fellow

462
00:20:06,000 --> 00:20:08,640
Speaker 2: that's in money gear seven. He's crushing it, But is he?

463
00:20:08,720 --> 00:20:09,640
Speaker 2: Is he crushing it too hard?

464
00:20:09,680 --> 00:20:12,160
Speaker 1: Joel? We'll get to that and more right after this.

465
00:20:19,960 --> 00:20:22,080
Speaker 1: All right, we're back Mattless. It's our next question. This

466
00:20:22,119 --> 00:20:26,520
Speaker 1: one is specifically about HSA's and to what lengths you

467
00:20:26,600 --> 00:20:28,600
Speaker 1: might go to be able to contribute to one.

468
00:20:29,080 --> 00:20:31,440
Speaker 4: Hey, Matt and Joel, this is Tim calling from West

469
00:20:31,440 --> 00:20:35,080
Speaker 4: Tennessee and I have another HSA related question for you.

470
00:20:36,119 --> 00:20:38,720
Speaker 4: My wife and I are both thirty eight and have

471
00:20:38,800 --> 00:20:42,240
Speaker 4: been maxing out HSA contributions for years and typically pay

472
00:20:42,320 --> 00:20:45,679
Speaker 4: medical costs out of pocket. I am self employed and

473
00:20:45,720 --> 00:20:48,840
Speaker 4: she has traditional employment with health insurance offered, but no

474
00:20:48,920 --> 00:20:51,800
Speaker 4: employee sponsored high deductible health plan to allow for an

475
00:20:51,880 --> 00:20:55,240
Speaker 4: HSA account. Our total income allows us to get a

476
00:20:55,280 --> 00:20:58,919
Speaker 4: high deductible plan privately for about five hundred dollars a month.

477
00:20:59,520 --> 00:21:01,920
Speaker 4: We're fairly healthy and go to the doctor about five

478
00:21:01,960 --> 00:21:05,080
Speaker 4: times per year total. Her current cut rate plan is

479
00:21:05,119 --> 00:21:07,359
Speaker 4: three hundred and fifty dollars a month, does not allow

480
00:21:07,520 --> 00:21:11,639
Speaker 4: HSA contributions, and no providers seem to take it. We

481
00:21:11,640 --> 00:21:14,120
Speaker 4: were wondering when the tipping point is for making sense

482
00:21:14,160 --> 00:21:17,000
Speaker 4: to pay insurance premiums just to fund and invest in

483
00:21:17,040 --> 00:21:20,600
Speaker 4: an HSA plan or go without insurance. Take the amount

484
00:21:20,640 --> 00:21:23,680
Speaker 4: we would pay in premiums and HSA contributions and then

485
00:21:23,720 --> 00:21:27,159
Speaker 4: invest that into some other form of retirement strategy. The

486
00:21:27,240 --> 00:21:29,840
Speaker 4: total amount would be we would be investing would max

487
00:21:29,840 --> 00:21:32,280
Speaker 4: out a traditional IRA for both of us Andrew four

488
00:21:32,280 --> 00:21:35,240
Speaker 4: O one K, so we would need another strategy for

489
00:21:35,320 --> 00:21:37,840
Speaker 4: the money to go into. Any thoughts on how to

490
00:21:37,840 --> 00:21:41,960
Speaker 4: best allocate retirement dollars in this situation, Thanks for any

491
00:21:42,080 --> 00:21:43,240
Speaker 4: advice you can provide.

492
00:21:43,840 --> 00:21:45,920
Speaker 1: Matt, West, Tennessee. That's a good part of the country.

493
00:21:46,240 --> 00:21:47,520
Speaker 2: That's is that where Emily's from.

494
00:21:47,560 --> 00:21:48,320
Speaker 1: That's where she's from.

495
00:21:48,400 --> 00:21:50,560
Speaker 2: I'm more of a West North Carolina kind of guy

496
00:21:50,600 --> 00:21:53,720
Speaker 2: in myself, Western North Carolina. That's Asheville western.

497
00:21:54,320 --> 00:21:57,879
Speaker 1: Fresh print style. No, well, I think first off, like

498
00:21:57,920 --> 00:21:59,320
Speaker 1: for Tim, what we should sake here is he's been

499
00:21:59,400 --> 00:22:02,080
Speaker 1: using the hs like a champ until this point, and

500
00:22:02,520 --> 00:22:04,679
Speaker 1: he's kind of doing everything else like a champ too.

501
00:22:04,840 --> 00:22:06,360
Speaker 1: Like Tim, you're.

502
00:22:06,440 --> 00:22:09,199
Speaker 2: Head listening to the right podcast making the right decisions

503
00:22:09,240 --> 00:22:09,560
Speaker 2: in life.

504
00:22:09,600 --> 00:22:11,280
Speaker 1: That's right, Good job Tim. I can't vouch for all

505
00:22:11,320 --> 00:22:13,920
Speaker 1: of his other podcast subscriptions, but at least this one right.

506
00:22:14,359 --> 00:22:16,359
Speaker 1: And for anyone who wants the details, by the way,

507
00:22:16,359 --> 00:22:21,000
Speaker 1: about how to utilize an HSA as this extra super

508
00:22:21,040 --> 00:22:24,119
Speaker 1: potent retirement account just like Tim is, we'll put a

509
00:22:24,160 --> 00:22:25,920
Speaker 1: link in the show notes to an article we wrote

510
00:22:25,920 --> 00:22:28,760
Speaker 1: on the site. But yeah, if you want the TLDR,

511
00:22:29,240 --> 00:22:32,040
Speaker 1: you got to let your HSA money linger. You got

512
00:22:32,080 --> 00:22:34,320
Speaker 1: to invest the money you stick inside of in HSA

513
00:22:34,680 --> 00:22:37,760
Speaker 1: because the point for the reason for doing that is

514
00:22:37,760 --> 00:22:40,840
Speaker 1: because it's the only account in existence that allows you

515
00:22:40,880 --> 00:22:43,719
Speaker 1: to avoid taxation altogether. But the key is you got

516
00:22:43,760 --> 00:22:45,159
Speaker 1: to have the free cash flow to be able to

517
00:22:45,240 --> 00:22:48,639
Speaker 1: pay for current medical expenses out of pocket from your savings,

518
00:22:48,720 --> 00:22:51,720
Speaker 1: which isn't always easy. But exactly if you can do that, man,

519
00:22:51,800 --> 00:22:55,359
Speaker 1: the HSA can be this incredible tool that allows you

520
00:22:55,440 --> 00:22:57,800
Speaker 1: to massively ratchet up your investing game.

521
00:22:57,880 --> 00:23:00,720
Speaker 2: That's right. So for Tim, it sounds like the conundrum

522
00:23:00,760 --> 00:23:03,680
Speaker 2: for him is to either pay more for health insurance

523
00:23:03,680 --> 00:23:06,560
Speaker 2: in order to have access to an HSA or to

524
00:23:06,640 --> 00:23:09,359
Speaker 2: choose the cheaper health care plan that doesn't give you

525
00:23:09,400 --> 00:23:11,840
Speaker 2: that access. And I would say that if paying one

526
00:23:11,880 --> 00:23:15,280
Speaker 2: hundred and fifty dollars more a month for health insurance,

527
00:23:15,640 --> 00:23:18,040
Speaker 2: if that's not going to save you money in any

528
00:23:18,160 --> 00:23:21,240
Speaker 2: other meaningful way, and it sounds like it won't, then

529
00:23:21,480 --> 00:23:23,719
Speaker 2: it's time to I would say, kind of like more

530
00:23:23,760 --> 00:23:26,720
Speaker 2: in the loss of being able to contribute to invest

531
00:23:26,760 --> 00:23:28,840
Speaker 2: within an HSA for the time being, I think like.

532
00:23:28,840 --> 00:23:31,000
Speaker 1: Three nights of crying into your pillow should suffice.

533
00:23:31,600 --> 00:23:34,320
Speaker 2: Hey, he has been contributing to one, so yeah, obviously

534
00:23:34,359 --> 00:23:36,240
Speaker 2: you're not going to lose that, but maybe moving forward

535
00:23:36,240 --> 00:23:37,639
Speaker 2: at least and then the next stage of life, he

536
00:23:37,680 --> 00:23:39,840
Speaker 2: may not be able to do that. On the other hand,

537
00:23:39,880 --> 00:23:41,680
Speaker 2: if it would save you a decent chunk of money,

538
00:23:41,720 --> 00:23:43,960
Speaker 2: let's say by lowering copays or something, I think it

539
00:23:44,040 --> 00:23:46,480
Speaker 2: might be worth considering. But all things being equal, I

540
00:23:46,480 --> 00:23:48,760
Speaker 2: think opting for the higher cost plan just to be

541
00:23:48,800 --> 00:23:51,560
Speaker 2: able to contribute some HSA dollars, I don't think that

542
00:23:51,600 --> 00:23:53,520
Speaker 2: makes much sense. It's sort of like, so he says

543
00:23:53,520 --> 00:23:55,560
Speaker 2: its one hundred and fifty more a month, So it's

544
00:23:55,560 --> 00:23:58,480
Speaker 2: almost like paying an eighteen hundred dollars annual fee just

545
00:23:58,520 --> 00:24:01,840
Speaker 2: to have access to an account with that. Honestly, isn't

546
00:24:01,960 --> 00:24:04,840
Speaker 2: that massive, right, Like an agent say, like they're great,

547
00:24:05,119 --> 00:24:07,840
Speaker 2: but they still only have a maximum contribution amount of

548
00:24:07,880 --> 00:24:10,480
Speaker 2: just over eight thousand dollars. It'd be different if Tim

549
00:24:10,560 --> 00:24:12,960
Speaker 2: was loaded and this is going to free up. There's

550
00:24:13,000 --> 00:24:15,040
Speaker 2: like a new pocket that's going to allow him to

551
00:24:15,080 --> 00:24:17,720
Speaker 2: invest in additional thirty thousand dollars. And yeah, this is

552
00:24:18,000 --> 00:24:20,840
Speaker 2: a cr vital part of his early retirement strategy. But

553
00:24:20,880 --> 00:24:23,639
Speaker 2: that's not necessarily the case here. I agree, Yeah, the I.

554
00:24:23,640 --> 00:24:25,199
Speaker 1: Think that's actually the good way to think about it,

555
00:24:25,200 --> 00:24:27,480
Speaker 1: the annual fee, right, because that's kind of what it is.

556
00:24:27,520 --> 00:24:29,960
Speaker 1: And if that quote unquote annual fee that you mentioned,

557
00:24:29,960 --> 00:24:33,320
Speaker 1: Matt came with substantially better health covers, we're gonna save

558
00:24:33,359 --> 00:24:35,479
Speaker 1: you money in copays and body blond, you'd recover it

559
00:24:35,920 --> 00:24:39,040
Speaker 1: that way. Then Okay, yeah, it's worth it. It's it's

560
00:24:39,080 --> 00:24:42,440
Speaker 1: worth getting the nicer healthcare plan. But that doesn't sound

561
00:24:42,480 --> 00:24:45,840
Speaker 1: like that's what Tim's gonna experience. And so well, one

562
00:24:45,840 --> 00:24:47,679
Speaker 1: thing he said that it sounds like I think he

563
00:24:47,720 --> 00:24:49,480
Speaker 1: called it the cut rate plan that his wife has.

564
00:24:49,840 --> 00:24:51,639
Speaker 1: He did say that it doesn't it seems like that

565
00:24:51,720 --> 00:24:53,520
Speaker 1: it's not accepted at a lot of places.

566
00:24:53,760 --> 00:24:56,879
Speaker 2: That's something to consider because if you've got this healthcare

567
00:24:56,920 --> 00:24:59,840
Speaker 2: plan that you're paying for, I mean three fifties on nothing.

568
00:25:00,080 --> 00:25:02,280
Speaker 2: I mean it's it's fairly affordable, but it's still a

569
00:25:02,320 --> 00:25:04,560
Speaker 2: lot of money. If you're not able to actually use that,

570
00:25:04,640 --> 00:25:06,760
Speaker 2: I would say, okay, we'll shoot. It's time to kind

571
00:25:06,800 --> 00:25:10,280
Speaker 2: of weigh the pros and cons here. And maybe it

572
00:25:10,320 --> 00:25:13,119
Speaker 2: sounded like he's it seemed like it wasn't accepted. So

573
00:25:13,400 --> 00:25:16,160
Speaker 2: is it actually accepted at other places or maybe Tim,

574
00:25:16,240 --> 00:25:19,720
Speaker 2: because you really like it hsas, you're like, nobody actually

575
00:25:19,720 --> 00:25:22,600
Speaker 2: takes this crappy insurance. We need to move to one

576
00:25:22,760 --> 00:25:24,880
Speaker 2: that allows us to have an HSA. I think that

577
00:25:24,880 --> 00:25:26,040
Speaker 2: that is something to consider.

578
00:25:26,240 --> 00:25:27,960
Speaker 1: I call my doctor first and be like, hey, you

579
00:25:28,000 --> 00:25:30,680
Speaker 1: accept this plan or not, And if they're like, no way, dude,

580
00:25:30,800 --> 00:25:33,040
Speaker 1: or actually the copay is a whole lot more under

581
00:25:33,040 --> 00:25:35,480
Speaker 1: that plant whatever. I would ask those questions because yeah,

582
00:25:35,520 --> 00:25:39,280
Speaker 1: that could that could maybe dramatically reduce that annual fee

583
00:25:39,400 --> 00:25:42,200
Speaker 1: ish thing with experience, and it might make it more

584
00:25:42,520 --> 00:25:44,600
Speaker 1: more worth paying more for the nicer health care plan.

585
00:25:44,520 --> 00:25:46,680
Speaker 2: Totally, because it's Yeah, basically, the way I see it

586
00:25:46,720 --> 00:25:48,840
Speaker 2: is like he might be getting a deal on health insurance.

587
00:25:48,880 --> 00:25:50,960
Speaker 2: This is through his wife's plan. But there's nothing worse

588
00:25:50,960 --> 00:25:53,199
Speaker 2: than getting a deal on something that you're that you

589
00:25:53,240 --> 00:25:55,399
Speaker 2: can't use, yeah, because then it's then you kind of

590
00:25:55,440 --> 00:25:58,840
Speaker 2: fallen into the trap of like, but it was on sale, right, Okay,

591
00:25:58,920 --> 00:26:00,480
Speaker 2: do you actually need that? Do you want that? Are

592
00:26:00,480 --> 00:26:01,879
Speaker 2: you just going to keep that in your shed for

593
00:26:01,920 --> 00:26:03,520
Speaker 2: the next two years before you sell it like at

594
00:26:03,560 --> 00:26:06,359
Speaker 2: a yard sale, new with tags? So keep that in

595
00:26:06,400 --> 00:26:06,840
Speaker 2: mind as well.

596
00:26:06,920 --> 00:26:09,399
Speaker 1: Yeah, And so Tim was basically saying, all right, if

597
00:26:09,440 --> 00:26:11,359
Speaker 1: I can't contribute to an HSA or if I'm not

598
00:26:11,440 --> 00:26:14,000
Speaker 1: choosing that healthcare plan, where should I put the money?

599
00:26:14,320 --> 00:26:15,760
Speaker 1: He said that he owns his own business, but I

600
00:26:15,840 --> 00:26:18,440
Speaker 1: didn't hear him say one word about a solo for one.

601
00:26:18,359 --> 00:26:21,879
Speaker 2: Count Oh snap, And this is a special little pocket

602
00:26:21,880 --> 00:26:23,359
Speaker 2: that will allow you to investment.

603
00:26:23,480 --> 00:26:26,080
Speaker 1: Think about how many dollars you can funnel into that account.

604
00:26:26,119 --> 00:26:29,000
Speaker 1: It's insane. So it's well worth considering because you can

605
00:26:29,000 --> 00:26:31,600
Speaker 1: contribute as a business owner, then you can contribute as

606
00:26:31,680 --> 00:26:35,119
Speaker 1: an individual, which means many tens of thousands of dollars

607
00:26:35,200 --> 00:26:37,920
Speaker 1: can be thrown into that account every single year if

608
00:26:37,960 --> 00:26:40,240
Speaker 1: you're so inclined, and if you've got that kind of

609
00:26:40,600 --> 00:26:43,120
Speaker 1: free cash flow to invest, So I would look into

610
00:26:43,119 --> 00:26:45,359
Speaker 1: that account with Fidelity, Vanguard or Schwab. Matt and I

611
00:26:45,400 --> 00:26:49,159
Speaker 1: have our solo for one K with Fidelity, and the

612
00:26:49,200 --> 00:26:53,600
Speaker 1: costs are essentially non existent, so that's definitely something worth

613
00:26:53,600 --> 00:26:54,639
Speaker 1: looking into totally.

614
00:26:54,680 --> 00:26:56,959
Speaker 2: And then beyond that, just I would consider a taxable

615
00:26:56,960 --> 00:26:59,840
Speaker 2: brokerage account because you know, you're already putting a ton

616
00:26:59,880 --> 00:27:02,720
Speaker 2: of money away into investment vehicles that can't be tapped

617
00:27:02,800 --> 00:27:05,240
Speaker 2: until fifty nine and a half, which is more than

618
00:27:05,280 --> 00:27:07,840
Speaker 2: two decades from now, And there's nothing wrong with that

619
00:27:07,920 --> 00:27:11,080
Speaker 2: at all. But if you've got let's say, more medium

620
00:27:11,160 --> 00:27:13,960
Speaker 2: term investing goals, or maybe you're thinking about work and less,

621
00:27:13,960 --> 00:27:16,560
Speaker 2: maybe you're thinking about retiring all together. Before you reach

622
00:27:16,680 --> 00:27:20,040
Speaker 2: that quote unquote full retirement age, weill having some funds

623
00:27:20,040 --> 00:27:22,399
Speaker 2: within a taxable brokerage account. That makes a ton of

624
00:27:22,400 --> 00:27:25,639
Speaker 2: sense too. You're certainly not getting a tax break. That's okay.

625
00:27:25,760 --> 00:27:28,840
Speaker 2: You're doing a lot on that front already, and by

626
00:27:28,880 --> 00:27:31,679
Speaker 2: investing within a brokerage account, you'll be able to gain

627
00:27:32,000 --> 00:27:34,439
Speaker 2: a good bit of flexibility. But one other thing he

628
00:27:34,480 --> 00:27:36,280
Speaker 2: said to I think he mentioned was that should I

629
00:27:36,320 --> 00:27:39,560
Speaker 2: consider dropping insurance altogether in order.

630
00:27:39,400 --> 00:27:41,320
Speaker 1: To invest those dollars as well?

631
00:27:41,600 --> 00:27:43,600
Speaker 2: And I would say I wouldn't do that. And this

632
00:27:43,640 --> 00:27:46,399
Speaker 2: is coming from somebody who tries to avoid going to

633
00:27:46,440 --> 00:27:50,240
Speaker 2: the doctor, like you go lessen Tim that I mean, well,

634
00:27:50,240 --> 00:27:51,680
Speaker 2: Tim said, that's the FID times a year.

635
00:27:51,720 --> 00:27:55,680
Speaker 1: You go five times a lifetime. It's like, haven't quite

636
00:27:55,720 --> 00:27:57,680
Speaker 1: hit my quote yet, so I got another visit?

637
00:27:58,040 --> 00:28:00,439
Speaker 2: Like that is a type of health and ssurance that

638
00:28:00,480 --> 00:28:02,359
Speaker 2: you can't afford not to have, right, like if you

639
00:28:02,400 --> 00:28:04,879
Speaker 2: didn't have that, And it doesn't really matter how healthy

640
00:28:04,880 --> 00:28:06,960
Speaker 2: you are, Like I'm all about being active and being

641
00:28:07,240 --> 00:28:09,719
Speaker 2: you know, like we joke about being how we're slowly

642
00:28:09,720 --> 00:28:11,879
Speaker 2: turning into like Jim Bros. Because we're focusing on our

643
00:28:11,880 --> 00:28:14,080
Speaker 2: health a little bit more. There are certain things it

644
00:28:14,080 --> 00:28:16,040
Speaker 2: doesn't matter how healthy you are that can come out

645
00:28:16,080 --> 00:28:20,880
Speaker 2: of freaking nowhere like cancer or an aneurism, and guess what,

646
00:28:21,200 --> 00:28:23,640
Speaker 2: there's nothing that is going to complete that could completely

647
00:28:23,680 --> 00:28:27,359
Speaker 2: wreck your finances more than something like that, regardless of

648
00:28:27,359 --> 00:28:29,719
Speaker 2: how much you've sked away. We've seen all the headlines,

649
00:28:29,720 --> 00:28:32,520
Speaker 2: we've seen the stories about medical debt, medical bills, how

650
00:28:32,560 --> 00:28:33,840
Speaker 2: they can mess people's lives up.

651
00:28:34,480 --> 00:28:36,560
Speaker 1: It's the number one reason that Americans file for bankrupt

652
00:28:36,600 --> 00:28:38,880
Speaker 1: and it's medical debt is typically not because someone went

653
00:28:38,920 --> 00:28:42,160
Speaker 1: in to get liposuction right like no'm or is because

654
00:28:42,520 --> 00:28:45,200
Speaker 1: someone went in to get a teeth cleaning right. It's

655
00:28:45,240 --> 00:28:48,160
Speaker 1: typically the unknown. It's a thing that slaps you upside

656
00:28:48,160 --> 00:28:50,320
Speaker 1: the head that you could not have predicted. And that's

657
00:28:50,320 --> 00:28:53,560
Speaker 1: why you need insurance against the unpredictable. So not having

658
00:28:53,560 --> 00:28:57,160
Speaker 1: health insurance is a little too scary for us. You'd

659
00:28:57,200 --> 00:28:59,360
Speaker 1: be living life on the edge and if something were

660
00:28:59,400 --> 00:29:02,880
Speaker 1: to happen completely upend everything you've been able to wortlely.

661
00:29:02,720 --> 00:29:05,480
Speaker 2: Derail exactly because he's so focused on that retirement, making

662
00:29:05,480 --> 00:29:07,880
Speaker 2: sure he's got those dollars set aside, but all that

663
00:29:07,880 --> 00:29:10,360
Speaker 2: could be gone, I mean within like a few months

664
00:29:10,360 --> 00:29:12,760
Speaker 2: of treatment, putting on what he's got going on. That's

665
00:29:12,800 --> 00:29:15,080
Speaker 2: exactly I would hate see him in that position. All right, Matt,

666
00:29:15,160 --> 00:29:18,520
Speaker 2: let's get to our next question. This one is we've

667
00:29:18,560 --> 00:29:21,480
Speaker 2: got an over zealous listener here who has more than

668
00:29:21,520 --> 00:29:22,840
Speaker 2: maxed out their four oh one K.

669
00:29:23,240 --> 00:29:24,960
Speaker 5: Hey, Matt and Joel, this is Greg and Tampa. Thanks

670
00:29:24,960 --> 00:29:26,560
Speaker 5: so much for all you guys to do. Love listening

671
00:29:26,600 --> 00:29:29,600
Speaker 5: to during my long runs here in Tampa. Really takes

672
00:29:29,600 --> 00:29:31,680
Speaker 5: the pain out of running and all this heat and humidity.

673
00:29:32,080 --> 00:29:34,000
Speaker 5: Just finished a five mile and I was listening to

674
00:29:34,040 --> 00:29:36,200
Speaker 5: you guys talk about some retirement accounts and got me

675
00:29:36,240 --> 00:29:39,000
Speaker 5: thinking money. Gear number seven here lucky enough to be

676
00:29:39,040 --> 00:29:41,560
Speaker 5: able to fully fund all the accounts, including my HSA

677
00:29:41,640 --> 00:29:44,360
Speaker 5: rothen four to one K, and actually over contribute to

678
00:29:44,440 --> 00:29:46,920
Speaker 5: my four to one K, just in case maybe an

679
00:29:46,960 --> 00:29:50,440
Speaker 5: early retirement or just some flexibility in my later years

680
00:29:50,440 --> 00:29:53,240
Speaker 5: in my career. Anyway, I never thought about this, but

681
00:29:53,280 --> 00:29:55,600
Speaker 5: when I look at my account, Vanguard seems to put

682
00:29:55,600 --> 00:29:58,280
Speaker 5: that money into a separate pile once I hit my

683
00:29:58,480 --> 00:30:02,920
Speaker 5: contribution limit, call it retirement savings, and it seems like

684
00:30:03,000 --> 00:30:07,400
Speaker 5: that money is available for withdrawal without penalty and for

685
00:30:07,600 --> 00:30:11,400
Speaker 5: no required reason. So my question is is this just

686
00:30:11,440 --> 00:30:13,800
Speaker 5: a savings account. Is everything over the limit just a

687
00:30:13,840 --> 00:30:17,120
Speaker 5: savings account? And if it is, can I count that

688
00:30:17,280 --> 00:30:22,560
Speaker 5: as part of my emergency fund? Or should I just

689
00:30:23,040 --> 00:30:25,600
Speaker 5: think of it as one big pile of retirement money

690
00:30:25,640 --> 00:30:27,760
Speaker 5: and forget about it? How would you guys think about

691
00:30:27,760 --> 00:30:31,600
Speaker 5: this and how would you treat that extra contribution? Thanks

692
00:30:31,640 --> 00:30:31,960
Speaker 5: so much?

693
00:30:32,800 --> 00:30:35,800
Speaker 1: Cool long runs for the win, Matt, I speaking your

694
00:30:35,840 --> 00:30:39,080
Speaker 1: love language, drawling. No, it's funny, dude, Like people are like, oh,

695
00:30:39,160 --> 00:30:41,120
Speaker 1: do you love running now? And I'm like, no, I

696
00:30:41,160 --> 00:30:44,160
Speaker 1: still really kind of sort of hate it. Really, Yeah,

697
00:30:44,320 --> 00:30:46,480
Speaker 1: I have not fallen in love with it. I feel

698
00:30:46,520 --> 00:30:49,880
Speaker 1: great afterwards, and the sense of accomplishment that I get

699
00:30:49,880 --> 00:30:52,040
Speaker 1: from it is palpable.

700
00:30:51,600 --> 00:30:54,960
Speaker 2: And knowing that you're doing the healthy thing. Yeah again, well,

701
00:30:55,080 --> 00:30:57,240
Speaker 2: Jim browth thing, we can stop it. But typically what

702
00:30:57,640 --> 00:31:00,760
Speaker 2: would I rather do? Not go for a most of

703
00:31:00,800 --> 00:31:02,959
Speaker 2: the time? Yeah, I feel maybe you'd run faster if

704
00:31:02,960 --> 00:31:05,200
Speaker 2: you're running down in Florida with like the gators nipping

705
00:31:05,200 --> 00:31:05,560
Speaker 2: at your.

706
00:31:05,440 --> 00:31:07,360
Speaker 1: Heels, maybe maybe I would be Maybe i'd be as

707
00:31:07,400 --> 00:31:09,200
Speaker 1: fast as Greg if that was the case.

708
00:31:09,240 --> 00:31:12,040
Speaker 2: It's funny because, like most of most folks listen to

709
00:31:12,120 --> 00:31:14,200
Speaker 2: the show, we're at the top of the food chain.

710
00:31:14,400 --> 00:31:17,160
Speaker 2: But Greg lives somewhere where there is a predator that

711
00:31:17,200 --> 00:31:17,880
Speaker 2: can take him out.

712
00:31:17,920 --> 00:31:20,960
Speaker 1: That's right, that's right. And I think that Greg' stay

713
00:31:20,960 --> 00:31:21,880
Speaker 1: out of the Marshy area.

714
00:31:21,720 --> 00:31:23,840
Speaker 2: If you're no, no, no, If you're looking to really train

715
00:31:23,920 --> 00:31:26,880
Speaker 2: and step up your your performance, you only run in

716
00:31:26,960 --> 00:31:30,040
Speaker 2: low lying lakes, marshy areas along the coast where there's

717
00:31:30,040 --> 00:31:31,200
Speaker 2: a chance of an alligator.

718
00:31:31,240 --> 00:31:33,680
Speaker 1: They're pretty quick, though, man, aren't they find you?

719
00:31:33,800 --> 00:31:33,960
Speaker 3: Yeah?

720
00:31:34,000 --> 00:31:34,600
Speaker 2: I think so. Well.

721
00:31:34,600 --> 00:31:37,520
Speaker 1: Also, there's the there's pythons down there in parts of

722
00:31:37,560 --> 00:31:39,400
Speaker 1: the like Florida.

723
00:31:39,800 --> 00:31:40,640
Speaker 2: They're not as fast.

724
00:31:40,440 --> 00:31:43,040
Speaker 1: As alligators there, right, I don't know, but they're pretty freaky.

725
00:31:43,240 --> 00:31:45,760
Speaker 2: Yeah. Either way, it's a little a little sketchy.

726
00:31:45,880 --> 00:31:49,960
Speaker 1: There's a guy who I think has made a fascinating

727
00:31:50,000 --> 00:31:53,280
Speaker 1: Instagram following taking out pythons down in Florida because they're

728
00:31:53,280 --> 00:31:55,160
Speaker 1: not native animals.

729
00:31:54,680 --> 00:31:57,600
Speaker 2: To the area. Yeah, you know more about the Florida

730
00:31:57,600 --> 00:31:58,080
Speaker 2: man than I do.

731
00:31:59,640 --> 00:32:03,479
Speaker 1: Let's get to Greg's actual question. And Greg, first off,

732
00:32:03,520 --> 00:32:05,160
Speaker 1: I mean kudos on all you've been able to do,

733
00:32:05,400 --> 00:32:08,200
Speaker 1: and we love, of course your desire to toss more

734
00:32:08,200 --> 00:32:11,040
Speaker 1: money into your retirement accounts like that is something like

735
00:32:11,120 --> 00:32:13,720
Speaker 1: I feel like we're constantly trying to coax people into

736
00:32:13,760 --> 00:32:17,120
Speaker 1: doing but you're kind of doing it proactively, like you're

737
00:32:17,160 --> 00:32:20,360
Speaker 1: doing it without us having to get on you as

738
00:32:20,360 --> 00:32:22,560
Speaker 1: like my mom would have said growing up, like Joel,

739
00:32:22,600 --> 00:32:25,320
Speaker 1: don't make me tell you again, right, And she usually

740
00:32:25,320 --> 00:32:26,600
Speaker 1: had to tell me again, But you don't have to

741
00:32:26,600 --> 00:32:29,360
Speaker 1: be told twice. So like, being able to contribute the

742
00:32:29,440 --> 00:32:32,000
Speaker 1: max to your four on and K is incredibly impressive,

743
00:32:32,080 --> 00:32:35,240
Speaker 1: especially like think about the contribution limit of a four

744
00:32:35,240 --> 00:32:37,560
Speaker 1: one K twenty three thousand dollars.

745
00:32:37,240 --> 00:32:38,960
Speaker 2: A lot of money a year is what you're.

746
00:32:38,800 --> 00:32:41,840
Speaker 1: Allowed to sock into those things. That's a ton. And

747
00:32:42,320 --> 00:32:44,280
Speaker 1: you know, we're all, of course all for maxing out

748
00:32:44,280 --> 00:32:46,600
Speaker 1: your four one k if you have that financial ability,

749
00:32:46,840 --> 00:32:50,000
Speaker 1: but going beyond that can actually cause issues. So Greg,

750
00:32:50,040 --> 00:32:52,720
Speaker 1: I think basically your heart is in the right place,

751
00:32:53,080 --> 00:32:55,720
Speaker 1: but you're gonna want to change your approach and what's

752
00:32:56,320 --> 00:32:59,000
Speaker 1: what might seem like a small misstep on the surface

753
00:32:59,400 --> 00:33:02,880
Speaker 1: can actually be really detrimental and become a massive pain

754
00:33:02,960 --> 00:33:03,360
Speaker 1: in your side.

755
00:33:03,440 --> 00:33:05,600
Speaker 2: Yeah, yeah, there can be too much of a good thing.

756
00:33:05,640 --> 00:33:07,640
Speaker 2: It makes me think of like, okay, what are other

757
00:33:07,680 --> 00:33:10,040
Speaker 2: scenarios on the same beer, Because there's no up beer.

758
00:33:10,080 --> 00:33:12,200
Speaker 2: I try to avoid the beer analogies, and honestly we

759
00:33:12,240 --> 00:33:14,560
Speaker 2: should probably just stop the whole fitness analogies for like

760
00:33:14,560 --> 00:33:17,640
Speaker 2: a solid six months as well. So let's say, uh,

761
00:33:17,880 --> 00:33:20,200
Speaker 2: you don't like going to the gas station because you're like, oh,

762
00:33:20,320 --> 00:33:22,560
Speaker 2: such a hassle, so waste of time. I hate waiting

763
00:33:22,600 --> 00:33:25,720
Speaker 2: in the line at Costco. Maybe the smell bothers you. Whatever,

764
00:33:25,920 --> 00:33:28,440
Speaker 2: So you're saying to yourself, in order to keep myself

765
00:33:28,480 --> 00:33:30,440
Speaker 2: from having good to go to the gas station more often,

766
00:33:30,840 --> 00:33:33,760
Speaker 2: I'm going to fill up the tube that leads to

767
00:33:33,800 --> 00:33:36,160
Speaker 2: the gas tank. I'm not gonna just fill it up normal.

768
00:33:36,200 --> 00:33:39,120
Speaker 2: I'm gonna pull the nozzle out a little bit. I'm

769
00:33:39,120 --> 00:33:41,400
Speaker 2: gonna fill it all the way up and for good measure,

770
00:33:41,440 --> 00:33:43,920
Speaker 2: you know what, I'm just gonna like just just kind

771
00:33:43,920 --> 00:33:46,960
Speaker 2: of spray the spray some around it. But that's not good.

772
00:33:47,200 --> 00:33:50,000
Speaker 2: That's dangerous. There's gasoline everywhere. It's not good for your

773
00:33:50,000 --> 00:33:52,800
Speaker 2: paint either, And so I think that is the environment either. Now, yeah,

774
00:33:52,840 --> 00:33:54,520
Speaker 2: you don't want to do that. It's you're messing up

775
00:33:54,560 --> 00:33:57,360
Speaker 2: your you're marring up the paint of your four one K. Greg.

776
00:33:57,440 --> 00:33:59,040
Speaker 2: Maybe that's the way you can think about it, and

777
00:33:59,120 --> 00:34:02,320
Speaker 2: that is because overfunding your tax advantage accounts, but it

778
00:34:02,360 --> 00:34:04,680
Speaker 2: comes with taxes and penalties and it can be a

779
00:34:04,720 --> 00:34:07,000
Speaker 2: pain in the butt to undo what's been done. And

780
00:34:07,040 --> 00:34:09,239
Speaker 2: so instead of reducing your tax bill, instead of helping

781
00:34:09,280 --> 00:34:11,840
Speaker 2: you to invest for your future, contributing too much to

782
00:34:11,920 --> 00:34:14,120
Speaker 2: a four to one K can actually create more of

783
00:34:14,160 --> 00:34:16,800
Speaker 2: a tax headache. You're actually going to get taxed twice

784
00:34:16,960 --> 00:34:19,920
Speaker 2: on those dollars, which might sound surprising to you honestly,

785
00:34:19,960 --> 00:34:22,200
Speaker 2: but that's because you're not getting the tax break in

786
00:34:22,280 --> 00:34:24,279
Speaker 2: the year that you funnel those dollars into your four

787
00:34:24,320 --> 00:34:27,239
Speaker 2: to one K. Money over that threshold, it doesn't qualified

788
00:34:27,280 --> 00:34:30,960
Speaker 2: for any preferred tax treatment, and then you're gonna pay

789
00:34:31,000 --> 00:34:33,200
Speaker 2: tax when you take those dollars out in the future

790
00:34:33,320 --> 00:34:35,640
Speaker 2: as well. It's the worst of both worlds. Yeah, and

791
00:34:35,680 --> 00:34:37,680
Speaker 2: this is not a scenario we want to see you

792
00:34:37,719 --> 00:34:38,400
Speaker 2: to continue.

793
00:34:38,680 --> 00:34:41,279
Speaker 1: And yeah, you basically getting bludgeoned upside the head by

794
00:34:41,320 --> 00:34:43,880
Speaker 1: the IRS if you over contribute to those accounts, if

795
00:34:43,880 --> 00:34:46,400
Speaker 1: you overfund them. So the question is what should you do,

796
00:34:46,480 --> 00:34:48,359
Speaker 1: And so we would say we'll get those dollars out

797
00:34:48,360 --> 00:34:53,240
Speaker 1: of there right to prevent getting horribly treated by the IRS.

798
00:34:53,280 --> 00:34:56,279
Speaker 1: To avoid getting penalized because the longer you leave the

799
00:34:56,280 --> 00:34:59,160
Speaker 1: money in there, actually the more tax hell you're going

800
00:34:59,160 --> 00:35:02,360
Speaker 1: to incur from them. There's literally a six percent annual

801
00:35:02,360 --> 00:35:04,279
Speaker 1: penalty on money that gets left in a four to

802
00:35:04,280 --> 00:35:07,160
Speaker 1: one K, and not just that every year is left in,

803
00:35:07,600 --> 00:35:10,640
Speaker 1: it compounds, dude, it keeps getting worse. So it's like,

804
00:35:10,840 --> 00:35:12,800
Speaker 1: this is one of those things where the IRS is saying,

805
00:35:13,080 --> 00:35:15,200
Speaker 1: don't cross over this line, and if you dip your

806
00:35:15,200 --> 00:35:17,359
Speaker 1: toe over the line, they're gonna slash it off. So

807
00:35:17,400 --> 00:35:20,440
Speaker 1: you don't want that to happen, like kill Bill style.

808
00:35:20,239 --> 00:35:22,320
Speaker 2: Or something that's gonna get nipped off by the alley.

809
00:35:22,000 --> 00:35:24,960
Speaker 1: Right right, Yeah, And basically you know the IRS hates

810
00:35:25,000 --> 00:35:26,759
Speaker 1: it when people do this. They're gonna make you feel

811
00:35:26,760 --> 00:35:28,000
Speaker 1: the pain. So here's what you do.

812
00:35:28,040 --> 00:35:28,279
Speaker 2: Greg.

813
00:35:28,320 --> 00:35:31,160
Speaker 1: You tell your planned administrator what happened that you've contributed

814
00:35:31,200 --> 00:35:33,000
Speaker 1: too much to your four oh one K. Then they

815
00:35:33,000 --> 00:35:34,600
Speaker 1: can send it back to you in what's known as

816
00:35:34,640 --> 00:35:37,759
Speaker 1: a corrective distribution. We would get the ball rolling on

817
00:35:37,800 --> 00:35:40,319
Speaker 1: that asap, because again, you don't want to cross over

818
00:35:40,360 --> 00:35:43,880
Speaker 1: into another calendar year having too much money in the

819
00:35:43,920 --> 00:35:45,799
Speaker 1: four one K. Having Let's say you put in twenty

820
00:35:45,840 --> 00:35:48,200
Speaker 1: eight thousand dollars instead of twenty three. Well, that's six

821
00:35:48,200 --> 00:35:51,040
Speaker 1: percent annual penalty. It's gonna get charged next year too,

822
00:35:51,040 --> 00:35:52,040
Speaker 1: if you leave it in too long.

823
00:35:52,160 --> 00:35:54,880
Speaker 2: And here's where the story gets even worse. If you

824
00:35:54,960 --> 00:35:56,600
Speaker 2: don't get the ball rolling on that and make that

825
00:35:56,600 --> 00:36:00,200
Speaker 2: correction within the year that you mistakenly contribute too much,

826
00:36:00,600 --> 00:36:03,279
Speaker 2: well then it's considered an early withdrawal. So then you're

827
00:36:03,280 --> 00:36:06,239
Speaker 2: paying a ten percent penalty on subsequent years were you

828
00:36:06,360 --> 00:36:09,640
Speaker 2: to then get it fixed. Yeah, it's amazing, Like literally

829
00:36:09,680 --> 00:36:11,759
Speaker 2: you're getting hammered at every turn here, Greg.

830
00:36:11,800 --> 00:36:13,560
Speaker 1: I would imagine most people heard this and they're like, oh,

831
00:36:13,600 --> 00:36:18,120
Speaker 1: that sounds like a small accident that probably the IRS

832
00:36:18,120 --> 00:36:20,640
Speaker 1: will quickly forgive. But no, not at all.

833
00:36:20,840 --> 00:36:22,399
Speaker 2: Yeah, I think a lot of folks might be thinking, oh,

834
00:36:22,520 --> 00:36:24,200
Speaker 2: that was a wise move, just go ahead, just to

835
00:36:24,239 --> 00:36:26,440
Speaker 2: be safe right now. This is an instance where you

836
00:36:26,480 --> 00:36:27,319
Speaker 2: don't want to be safe.

837
00:36:27,400 --> 00:36:28,840
Speaker 1: It's like you called the head of the IRS like

838
00:36:28,840 --> 00:36:30,560
Speaker 1: a bad word or something, and he's like, literally got

839
00:36:30,600 --> 00:36:31,160
Speaker 1: it out for you.

840
00:36:31,280 --> 00:36:33,560
Speaker 2: It's like, did I are you taking like personal offense?

841
00:36:33,920 --> 00:36:36,319
Speaker 2: That's something I've done, sure to seem like it, But

842
00:36:37,080 --> 00:36:39,400
Speaker 2: this is an instance where Greg, I'm not sure if

843
00:36:39,440 --> 00:36:42,080
Speaker 2: you are filing your own taxes, maybe you're going the

844
00:36:42,120 --> 00:36:44,840
Speaker 2: DIY route. But this is something that a tax professional

845
00:36:44,920 --> 00:36:47,719
Speaker 2: should be able to catch and advise you on. Any

846
00:36:47,719 --> 00:36:50,320
Speaker 2: money above and beyond the contributional limit would be ideally

847
00:36:50,320 --> 00:36:53,520
Speaker 2: put into a roth IRA if you qualify and you

848
00:36:53,520 --> 00:36:55,440
Speaker 2: wanted to invest more dollars or simply you can just

849
00:36:55,440 --> 00:36:58,960
Speaker 2: stick it within a taxable brokerage account. But putting more

850
00:36:59,000 --> 00:37:01,200
Speaker 2: money into a four one K then you're allowed to.

851
00:37:01,239 --> 00:37:04,280
Speaker 2: It's just going to create more headaches, generate more taxation.

852
00:37:04,840 --> 00:37:07,480
Speaker 2: And we literally never say this, but it's time for

853
00:37:07,560 --> 00:37:11,040
Speaker 2: you to dial back those four one K contributions because

854
00:37:11,120 --> 00:37:12,120
Speaker 2: you're contributing too much.

855
00:37:12,200 --> 00:37:13,920
Speaker 1: Yeah, Usually we're trying to say, oh, go in there

856
00:37:13,920 --> 00:37:16,000
Speaker 1: and pump it up by one or two percentage points, greg,

857
00:37:16,360 --> 00:37:19,120
Speaker 1: do not do that. Do not increase the amount that

858
00:37:19,120 --> 00:37:20,680
Speaker 1: you're contributing to that four and k in fact that

859
00:37:20,719 --> 00:37:22,719
Speaker 1: you want to decrease it and make sure that you're

860
00:37:22,760 --> 00:37:25,040
Speaker 1: falling underneath that threshold. And then you want to pull

861
00:37:25,080 --> 00:37:27,880
Speaker 1: in the overages from this year so that you aren't

862
00:37:27,920 --> 00:37:30,960
Speaker 1: getting tax to the moon on it. We just yeah,

863
00:37:31,200 --> 00:37:33,200
Speaker 1: want you to to your money to be working for

864
00:37:33,280 --> 00:37:36,440
Speaker 1: you and running a foul of the irs typically means

865
00:37:36,520 --> 00:37:38,840
Speaker 1: you're getting penalized and that you have fewer dollars working

866
00:37:38,840 --> 00:37:41,799
Speaker 1: for your future. So I hope that's helpful. Best of

867
00:37:41,880 --> 00:37:43,920
Speaker 1: luck to you, Matt. We've got more to get to

868
00:37:44,000 --> 00:37:46,600
Speaker 1: on the show, including we're going to talk about downgrading

869
00:37:46,760 --> 00:37:49,279
Speaker 1: to a cheaper car. Does it make sense? We'll get

870
00:37:49,320 --> 00:37:50,440
Speaker 1: to that right after this.

871
00:37:59,000 --> 00:38:01,600
Speaker 2: We are back from the break and it is now

872
00:38:01,680 --> 00:38:03,640
Speaker 2: time for the Facebook Question of the Week. This one

873
00:38:03,760 --> 00:38:07,319
Speaker 2: is from Danielle and she wrote, I had a car

874
00:38:07,400 --> 00:38:10,040
Speaker 2: loan of a little under seventeen thousand dollars with a

875
00:38:10,560 --> 00:38:14,200
Speaker 2: five point zero six percent interest rate. She was very specific,

876
00:38:14,640 --> 00:38:16,520
Speaker 2: I have a minimum payment of three hundred and forty

877
00:38:16,520 --> 00:38:18,920
Speaker 2: dollars and I have been paying four hundred dollars a month.

878
00:38:19,160 --> 00:38:21,160
Speaker 2: Today I change it to a bi weekly payment of

879
00:38:21,200 --> 00:38:23,520
Speaker 2: two hundred and twenty five dollars, so four to fifty

880
00:38:23,560 --> 00:38:25,600
Speaker 2: a month in total. This car was needed at the

881
00:38:25,680 --> 00:38:28,040
Speaker 2: time and was bought when prices were still crazy due

882
00:38:28,040 --> 00:38:30,480
Speaker 2: to the pandemic. Should I consider getting rid of it

883
00:38:30,520 --> 00:38:32,560
Speaker 2: and getting a cheaper car? Is there a way to

884
00:38:32,560 --> 00:38:34,560
Speaker 2: do this without losing money? Should I stick it out?

885
00:38:34,760 --> 00:38:37,120
Speaker 2: Should I pay more per month, Joey sounds like we're

886
00:38:37,120 --> 00:38:39,240
Speaker 2: hearing from somebody who is sick and tired of having

887
00:38:39,640 --> 00:38:41,600
Speaker 2: a car loan, yeah, a car note in her life.

888
00:38:41,640 --> 00:38:44,400
Speaker 2: I get that the average new car payment continues to

889
00:38:44,440 --> 00:38:47,480
Speaker 2: go up and up, the prices of used cars is

890
00:38:47,520 --> 00:38:51,080
Speaker 2: still significantly expensive, and if you finance that sucker over

891
00:38:51,160 --> 00:38:53,640
Speaker 2: five or six years, especially with higher interest rates, you're

892
00:38:53,640 --> 00:38:56,200
Speaker 2: talking about a long time of having a really crummy

893
00:38:56,200 --> 00:38:58,520
Speaker 2: car loan in your life. And then, Matt, typically what

894
00:38:58,560 --> 00:39:00,600
Speaker 2: happens is people are a few years of their payments

895
00:39:00,640 --> 00:39:02,839
Speaker 2: and they're like, ah, time to upgrade and.

896
00:39:02,800 --> 00:39:04,600
Speaker 1: Get another loan and roll that old loan into the

897
00:39:04,640 --> 00:39:06,839
Speaker 1: new one, and it only gets worse and worse and worse.

898
00:39:06,880 --> 00:39:07,959
Speaker 1: And so is when their.

899
00:39:07,880 --> 00:39:10,000
Speaker 2: Gride has lost that new car smell, and they're like,

900
00:39:10,000 --> 00:39:11,120
Speaker 2: it's not doing it for me anymore.

901
00:39:11,160 --> 00:39:12,920
Speaker 1: So let's nip this thing in the bud. Let's get

902
00:39:13,000 --> 00:39:14,680
Speaker 1: rid of car loans as quickly as possible and then

903
00:39:14,680 --> 00:39:17,239
Speaker 1: hopefully avoid them for the rest of your lives. And

904
00:39:17,280 --> 00:39:19,920
Speaker 1: I feel like her question match should kind of make headlines,

905
00:39:20,440 --> 00:39:22,680
Speaker 1: Like I was just thinking, if this was an Onion headline,

906
00:39:22,719 --> 00:39:25,880
Speaker 1: it would read something like American and Individual considers downgrading

907
00:39:25,920 --> 00:39:29,360
Speaker 1: car to save money, because it's so antithetical to the

908
00:39:29,440 --> 00:39:32,720
Speaker 1: human the way American humans at least approach cars.

909
00:39:32,760 --> 00:39:33,960
Speaker 2: It's not the consumptive way.

910
00:39:34,080 --> 00:39:36,759
Speaker 1: No, no, no, nobody does this. So Danielle, first, the

911
00:39:36,760 --> 00:39:40,240
Speaker 1: fact that you are like even considering this is awesome,

912
00:39:40,360 --> 00:39:42,960
Speaker 1: So we're really proud of you on that factor. But

913
00:39:43,040 --> 00:39:44,680
Speaker 1: should you actually do it? And I think the answer

914
00:39:44,719 --> 00:39:47,719
Speaker 1: is maybe so. One thing worth considering is the tax

915
00:39:47,760 --> 00:39:50,799
Speaker 1: implications of selling a car and then buying a new one.

916
00:39:51,080 --> 00:39:53,040
Speaker 1: In the state of Georgia, at least you pay sales

917
00:39:53,120 --> 00:39:55,560
Speaker 1: tax every time you buy a new vehicle, right, which

918
00:39:55,600 --> 00:40:00,120
Speaker 1: makes it actually advantageous to keep your car longer. And

919
00:40:00,120 --> 00:40:01,640
Speaker 1: always used to be like that, Matt. We used to

920
00:40:01,640 --> 00:40:05,560
Speaker 1: pay something that was essentially a much smaller amount every

921
00:40:05,600 --> 00:40:07,840
Speaker 1: single year based on the value of your car. But

922
00:40:08,120 --> 00:40:10,440
Speaker 1: know the car tax laws in your state. Before you

923
00:40:10,520 --> 00:40:12,239
Speaker 1: sell the car to save a few thousand bucks and

924
00:40:12,239 --> 00:40:15,160
Speaker 1: then find that you owe four figures in additional tax

925
00:40:15,200 --> 00:40:18,359
Speaker 1: because you just up or downgraded to another car, it

926
00:40:18,400 --> 00:40:20,960
Speaker 1: feels like and I really don't love that this is

927
00:40:21,000 --> 00:40:23,319
Speaker 1: the way that car taxes work in our state, Matt.

928
00:40:23,400 --> 00:40:25,640
Speaker 1: And it might sound ancillary or something like that, but

929
00:40:25,640 --> 00:40:28,200
Speaker 1: it's really not because that number can add up significantly.

930
00:40:28,239 --> 00:40:30,000
Speaker 2: It has a big impact. Yeah, it's funny because you

931
00:40:30,040 --> 00:40:31,880
Speaker 2: and I we need somebody. Back in the day, and

932
00:40:31,920 --> 00:40:33,919
Speaker 2: he used to do this thing where he would buy

933
00:40:34,040 --> 00:40:36,400
Speaker 2: a pretty affordable car, drive it for a few months,

934
00:40:36,480 --> 00:40:38,400
Speaker 2: and he was a photographer and so he would then

935
00:40:38,440 --> 00:40:40,440
Speaker 2: take a really good pictures of it, do a good

936
00:40:40,520 --> 00:40:42,959
Speaker 2: job as a salesman essentially, And he wasn't like lying

937
00:40:43,000 --> 00:40:44,759
Speaker 2: or anything, but he's just like, I can sell this

938
00:40:44,840 --> 00:40:47,600
Speaker 2: car in a few months for the same price that

939
00:40:47,640 --> 00:40:49,560
Speaker 2: I bought it at, if not more. And over the

940
00:40:49,560 --> 00:40:51,960
Speaker 2: course of a couple to a few years, he was

941
00:40:52,000 --> 00:40:54,719
Speaker 2: able to significantly upgrade the car that he had. But

942
00:40:54,760 --> 00:40:56,120
Speaker 2: he in party he was able to do that because

943
00:40:56,120 --> 00:40:59,560
Speaker 2: he wasn't paying freaking sales tax essentially every single time.

944
00:40:59,560 --> 00:41:03,040
Speaker 2: In Georgia is called the title advolorm tax, but essentially

945
00:41:03,040 --> 00:41:03,840
Speaker 2: it acts as.

946
00:41:03,640 --> 00:41:06,160
Speaker 1: A sales tax on the vehicle. It's a percentage of

947
00:41:06,160 --> 00:41:07,400
Speaker 1: the overall problem. It's that changed.

948
00:41:08,080 --> 00:41:10,000
Speaker 2: He had to stop because no longer a strategy that

949
00:41:10,040 --> 00:41:11,680
Speaker 2: you could employ that throws a wrench in your plan.

950
00:41:11,760 --> 00:41:13,640
Speaker 2: So for folks who live in states where that is

951
00:41:13,680 --> 00:41:16,120
Speaker 2: not the case, the tax implications really aren't there, but

952
00:41:16,280 --> 00:41:19,160
Speaker 2: something that you do need to consider though, Danielle is,

953
00:41:19,280 --> 00:41:22,040
Speaker 2: would you need to get another loan? So I love

954
00:41:22,160 --> 00:41:25,040
Speaker 2: that you are aggressively paying this thing off. You're doing

955
00:41:25,040 --> 00:41:28,000
Speaker 2: it faster than prescribed, but you do have a fairly

956
00:41:28,040 --> 00:41:30,800
Speaker 2: low interest rate for today's environment. So she's got a

957
00:41:30,840 --> 00:41:33,239
Speaker 2: five percent rate and today like you got to have

958
00:41:33,320 --> 00:41:36,680
Speaker 2: like a super prime credit score in order to score that.

959
00:41:36,840 --> 00:41:39,719
Speaker 2: Even then you're probably talking about like seven or eight percent, right, yeah, yeah.

960
00:41:39,760 --> 00:41:42,640
Speaker 2: And if I think if you're opting to get a

961
00:41:42,680 --> 00:41:45,879
Speaker 2: slightly cheaper ride, but then in today's environment, let's say

962
00:41:45,880 --> 00:41:48,280
Speaker 2: you had a finance it at a higher rate, well

963
00:41:48,440 --> 00:41:50,400
Speaker 2: you may not be saving quite as much money as

964
00:41:50,440 --> 00:41:52,279
Speaker 2: you thought. But if it does mean that you're able

965
00:41:52,320 --> 00:41:55,000
Speaker 2: to own your car free and clear, where you're ditching

966
00:41:55,000 --> 00:41:57,200
Speaker 2: that car payment altogether, well then it might be worth it,

967
00:41:57,200 --> 00:42:00,000
Speaker 2: because that no car payment life is truly where it's at.

968
00:42:00,200 --> 00:42:02,759
Speaker 2: You don't want to be financing depreciating assets. And if

969
00:42:02,800 --> 00:42:05,399
Speaker 2: it means driving a solid ride that does have more

970
00:42:05,440 --> 00:42:07,279
Speaker 2: miles on it, well there are additional things that you

971
00:42:07,280 --> 00:42:09,080
Speaker 2: still want to consider, but that could be a smart

972
00:42:09,080 --> 00:42:09,800
Speaker 2: financial decision.

973
00:42:09,800 --> 00:42:12,960
Speaker 1: It's like you're making a sacrifice driving something maybe it's

974
00:42:13,000 --> 00:42:17,440
Speaker 1: not quite as attractive, that could potentially have more issues

975
00:42:17,440 --> 00:42:20,080
Speaker 1: with it coming up. But if you're able to buy

976
00:42:20,080 --> 00:42:22,560
Speaker 1: a five thousand dollars car, because man, you're dead set

977
00:42:22,600 --> 00:42:25,839
Speaker 1: on being car debt fretty completely, and that allows you to, yeah,

978
00:42:26,680 --> 00:42:29,239
Speaker 1: get rid of the car payment altogether, I could see

979
00:42:29,239 --> 00:42:31,319
Speaker 1: that being a smart move. I think probably a lot

980
00:42:31,320 --> 00:42:33,000
Speaker 1: of people are listening out there and they're like, that

981
00:42:33,120 --> 00:42:36,000
Speaker 1: sounds cheap, not frugal guys. But I do think Matt,

982
00:42:36,160 --> 00:42:40,319
Speaker 1: I've had reasonably good luck buying super duper cheap cars

983
00:42:40,320 --> 00:42:43,680
Speaker 1: over the years. Seriously in the sub five thousand dollar range.

984
00:42:43,719 --> 00:42:46,520
Speaker 1: Even the car that I currently drive four thousand bucks,

985
00:42:46,560 --> 00:42:49,120
Speaker 1: you know, because it's a five and so I do

986
00:42:49,200 --> 00:42:52,000
Speaker 1: think that it's under salt. People always think I was

987
00:42:52,040 --> 00:42:53,920
Speaker 1: talking to about the other day. He just assumes that

988
00:42:53,960 --> 00:42:56,480
Speaker 1: he has to spend thirty plus thousand dollars even to

989
00:42:56,480 --> 00:42:58,960
Speaker 1: buy a three or four year old used car.

990
00:42:59,080 --> 00:42:59,799
Speaker 2: Yeah, you got to do that.

991
00:43:00,000 --> 00:43:02,000
Speaker 1: I was like, I don't know why you think you

992
00:43:02,120 --> 00:43:03,719
Speaker 1: have to do this, but I think some people just

993
00:43:03,719 --> 00:43:06,440
Speaker 1: feel like that's the only way to get something that's reliable,

994
00:43:06,520 --> 00:43:08,520
Speaker 1: and that's just not the case, you have to pay

995
00:43:08,520 --> 00:43:11,800
Speaker 1: extra attention though, So I would tell Danielle and everyone

996
00:43:11,800 --> 00:43:13,840
Speaker 1: else out there do your research if you're going this direction,

997
00:43:14,200 --> 00:43:16,520
Speaker 1: because you are kind of talking about the devil universe,

998
00:43:16,600 --> 00:43:18,680
Speaker 1: the devil you don't And if your current car is

999
00:43:18,680 --> 00:43:21,160
Speaker 1: in great shape and expect to have a long life,

1000
00:43:21,239 --> 00:43:23,680
Speaker 1: let's say a lot of maintenance has been recently performed.

1001
00:43:24,600 --> 00:43:28,080
Speaker 1: With trading down, it could be short sighted. But if

1002
00:43:28,120 --> 00:43:29,640
Speaker 1: you're getting to the point where maybe you're gonna have

1003
00:43:29,680 --> 00:43:31,400
Speaker 1: to drop a lot of money on the car you

1004
00:43:31,440 --> 00:43:34,360
Speaker 1: currently have, and you're able to secure an old Corolla

1005
00:43:34,480 --> 00:43:37,600
Speaker 1: driven by a granny, you know, it's a typical way

1006
00:43:37,600 --> 00:43:39,359
Speaker 1: people think about it is, well, she drove a four

1007
00:43:39,400 --> 00:43:41,440
Speaker 1: thousand miles a year and it's in killer shape even

1008
00:43:41,440 --> 00:43:43,680
Speaker 1: though it's older. Like if you can zero in on

1009
00:43:43,719 --> 00:43:46,719
Speaker 1: a car like that, or really whatever else kind of car,

1010
00:43:46,800 --> 00:43:50,319
Speaker 1: consumer reports suggests based on reliability for the price, you

1011
00:43:50,400 --> 00:43:53,080
Speaker 1: might not be signing yourself up for many more headaches

1012
00:43:53,160 --> 00:43:57,520
Speaker 1: or repair costs. I would just not assume that a

1013
00:43:57,560 --> 00:43:59,800
Speaker 1: twenty eleven car, for instance, is going to cost a

1014
00:44:00,120 --> 00:44:02,880
Speaker 1: lot more in repairs than a twenty nineteen car. Depends

1015
00:44:02,920 --> 00:44:04,880
Speaker 1: on a whole bunch of factors, depending on the make

1016
00:44:04,960 --> 00:44:09,160
Speaker 1: and model that you're transferring into and how well that

1017
00:44:09,200 --> 00:44:11,600
Speaker 1: owner kept it up. It really might not mean that

1018
00:44:11,680 --> 00:44:13,600
Speaker 1: many additional repair expenses every year.

1019
00:44:13,640 --> 00:44:18,120
Speaker 2: That's true, and honestly, I think she's concerned less about maintenance,

1020
00:44:18,160 --> 00:44:20,040
Speaker 2: even though that is something she needs to consider. She's

1021
00:44:20,040 --> 00:44:23,319
Speaker 2: going to get something different. But she writes that she

1022
00:44:23,480 --> 00:44:25,640
Speaker 2: may be overpaid for the vehicle, and I think that's

1023
00:44:25,719 --> 00:44:27,680
Speaker 2: kind of weighing on her. The fact that, like, think

1024
00:44:28,080 --> 00:44:30,480
Speaker 2: like we were. I remember, like car prices were crazy.

1025
00:44:30,520 --> 00:44:33,760
Speaker 2: This is back during the pandemic. This Joel, you remember

1026
00:44:33,800 --> 00:44:36,520
Speaker 2: the ever given back when that thing got stuck in

1027
00:44:36,560 --> 00:44:41,080
Speaker 2: those Yeah, like supply chains were snagged, there were tons

1028
00:44:41,080 --> 00:44:43,600
Speaker 2: of issues, and car prices were going through the roof.

1029
00:44:43,840 --> 00:44:45,479
Speaker 2: That was the reality of it. And if you needed

1030
00:44:45,480 --> 00:44:48,120
Speaker 2: a new vehicle back then, that's just what happened. And

1031
00:44:48,239 --> 00:44:51,439
Speaker 2: there's nothing, Danielle, unfortunately that can make up for that.

1032
00:44:51,440 --> 00:44:54,400
Speaker 2: That's just water under the bridge and moving forward. I

1033
00:44:54,400 --> 00:44:56,640
Speaker 2: think you can make the best decision, but yeah, you

1034
00:44:56,680 --> 00:44:59,080
Speaker 2: can't right that wrong necessarily, but time will help right

1035
00:44:59,120 --> 00:45:02,040
Speaker 2: the wrong. Yeah, a weird place. It doesn't have much

1036
00:45:02,080 --> 00:45:04,279
Speaker 2: to do with interest rates. Again, the rate that you

1037
00:45:04,320 --> 00:45:06,360
Speaker 2: have is actually pretty good. It doesn't sound like you

1038
00:45:06,400 --> 00:45:08,400
Speaker 2: spent way too much on this vehicle, but maybe for

1039
00:45:08,440 --> 00:45:11,680
Speaker 2: what it is that you purchased, it seems like well,

1040
00:45:11,680 --> 00:45:14,840
Speaker 2: in today's prices, I certainly overpay, but again that's in

1041
00:45:14,880 --> 00:45:16,680
Speaker 2: the past, and I think that for you to take

1042
00:45:16,680 --> 00:45:19,040
Speaker 2: some of these more drastic moves today, you'd kind of

1043
00:45:19,040 --> 00:45:22,040
Speaker 2: be cutting off your nose. Despite your face, I.

1044
00:45:21,960 --> 00:45:24,440
Speaker 1: Think you're right. I think ultimately I would probably be

1045
00:45:24,480 --> 00:45:26,680
Speaker 1: hanging onto the car if I were her and paying

1046
00:45:26,680 --> 00:45:28,680
Speaker 1: it down with fervor like she's doing. And I think

1047
00:45:28,719 --> 00:45:29,480
Speaker 1: she's on the right path.

1048
00:45:29,560 --> 00:45:31,680
Speaker 2: Totally knock it out. And again five percent, it's not

1049
00:45:31,719 --> 00:45:33,719
Speaker 2: like the worst rate in the world, but it sounds

1050
00:45:33,760 --> 00:45:35,279
Speaker 2: like she wants to be done with it, and I

1051
00:45:35,320 --> 00:45:38,360
Speaker 2: totally agree. I think just attacking that completely, eliminating that

1052
00:45:38,440 --> 00:45:40,840
Speaker 2: from her life. But then after that, banking that payment

1053
00:45:40,880 --> 00:45:43,839
Speaker 2: for your next eventual car purchase, I think that would

1054
00:45:43,880 --> 00:45:45,680
Speaker 2: be smart. That way you never have to make a

1055
00:45:45,719 --> 00:45:47,280
Speaker 2: car payment again. I think that.

1056
00:45:47,440 --> 00:45:50,160
Speaker 1: Would be a great plan to make a resolution. This

1057
00:45:50,239 --> 00:45:52,920
Speaker 1: is the last car I'll have payments on ever, for

1058
00:45:52,960 --> 00:45:54,920
Speaker 1: the rest of my life, and to stick to that

1059
00:45:54,920 --> 00:45:56,680
Speaker 1: would be incredible, And part of that is mac. I

1060
00:45:56,719 --> 00:46:00,799
Speaker 1: think banking the payment for future purchases. I think it's wise.

1061
00:46:00,960 --> 00:46:02,840
Speaker 2: Totally agree, Joe. Let's get to the beer that you

1062
00:46:02,880 --> 00:46:06,800
Speaker 2: and I enjoyed it during today's episode, Head Full of Dynomte.

1063
00:46:06,920 --> 00:46:11,160
Speaker 2: This is a hazy I pa by Fremont. Is it

1064
00:46:11,200 --> 00:46:13,720
Speaker 2: Fremont Brewing? Yeah? Okay, here on the side, Fremont Brewing

1065
00:46:13,719 --> 00:46:16,560
Speaker 2: out of Seattle, Washington. I got confused because it says

1066
00:46:16,840 --> 00:46:21,680
Speaker 2: Seattle Earth, and most folks don't put Earth as their location.

1067
00:46:22,880 --> 00:46:26,160
Speaker 2: It's kind of a given, guys. But Joel, your thoughts

1068
00:46:26,239 --> 00:46:27,520
Speaker 2: on this one, man?

1069
00:46:27,640 --> 00:46:30,359
Speaker 1: I dug this one. This I get why they called

1070
00:46:30,360 --> 00:46:34,200
Speaker 1: it dynamite because it does have like it feels powerful

1071
00:46:34,200 --> 00:46:37,040
Speaker 1: in your mouth for punch. Yeah, most definitely a hoold

1072
00:46:37,040 --> 00:46:39,040
Speaker 1: lot of flavor. I enjoy this one.

1073
00:46:39,120 --> 00:46:41,680
Speaker 2: I don't. I think it was like kind of an

1074
00:46:41,760 --> 00:46:44,000
Speaker 2: earthy I p a in a lot of ways. I

1075
00:46:44,080 --> 00:46:46,000
Speaker 2: had some of those tones going on. Do you think

1076
00:46:46,000 --> 00:46:48,360
Speaker 2: you're impacted by the fact that it says Seattle Earth

1077
00:46:48,440 --> 00:46:53,040
Speaker 2: Maybe subtle messages? Yeah, or maybe they knew that and

1078
00:46:53,080 --> 00:46:55,120
Speaker 2: they don't put Earth on any of their other beers

1079
00:46:55,120 --> 00:46:56,560
Speaker 2: that they only put it on this one because it

1080
00:46:56,560 --> 00:46:58,040
Speaker 2: does have earthier tones that could be.

1081
00:46:58,680 --> 00:46:59,399
Speaker 1: I enjoyed it though.

1082
00:46:59,560 --> 00:47:01,440
Speaker 2: Yeah, this might sound weird, but it kind of had

1083
00:47:01,560 --> 00:47:04,680
Speaker 2: like savignon blanc like flavors going on, like a white

1084
00:47:04,760 --> 00:47:06,800
Speaker 2: grape it maybe like it even made me think of

1085
00:47:06,880 --> 00:47:10,839
Speaker 2: muscadine a little bit. I don't know something about the

1086
00:47:10,840 --> 00:47:13,720
Speaker 2: the floral sort of fruity notes, like it wasn't overly sweet,

1087
00:47:13,760 --> 00:47:16,640
Speaker 2: but the earthy or the vegetable flavor profile that I

1088
00:47:16,640 --> 00:47:18,600
Speaker 2: was pulling out of this made me think that so

1089
00:47:19,000 --> 00:47:21,239
Speaker 2: really good. Yeah, super stoked that, you know, I got

1090
00:47:21,280 --> 00:47:23,080
Speaker 2: to enjoy. Glad you were able to. Did you pack

1091
00:47:23,120 --> 00:47:24,880
Speaker 2: this in your in your pack? I did, because you

1092
00:47:25,000 --> 00:47:27,040
Speaker 2: checked your you checked your big pack. Right fly on

1093
00:47:27,080 --> 00:47:29,200
Speaker 2: Southwest you can check a bag for free. That is

1094
00:47:29,239 --> 00:47:31,160
Speaker 2: the best way, one of the best ways to transport

1095
00:47:31,160 --> 00:47:34,279
Speaker 2: beer across the country. If you're curious, so Southwest for

1096
00:47:34,320 --> 00:47:36,240
Speaker 2: the wind, Matt, that's gonna do it. For this episode,

1097
00:47:36,280 --> 00:47:38,560
Speaker 2: we'll put show notes links to some of the stuff

1098
00:47:38,560 --> 00:47:41,360
Speaker 2: we mentioned up on our website at howtomoney dot com.

1099
00:47:41,400 --> 00:47:43,680
Speaker 2: There's obviously tons of other resources there to help you

1100
00:47:43,680 --> 00:47:47,319
Speaker 2: out in your financial journey as well. Until next time, though,

1101
00:47:47,440 --> 00:48:01,280
Speaker 2: best Friends Altum, best Friends out Mum four,