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Speaker 1: Welcome to How the Money. I'm Joel and I and

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Speaker 1: Matt's and today we're discussing crazy rich millennials rising rents

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Speaker 1: in a shady way to pay for college. Welcome to

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Speaker 1: How the Money Industries. What if that's how we always

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Speaker 1: started our show. I'm glad it's not. This is our

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Speaker 1: Friday flight by Industries. That's just me and Joel, like,

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Speaker 1: like there's no one else here, there's no corporate conglomerate

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Speaker 1: that is like orchestrating our every move. Yeah, it makes

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Speaker 1: me think of Stark Industries, like we're developing some high tech.

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Speaker 1: I know you're into the superhero movies, but I don't

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Speaker 1: watch it. So yeah, I feel like with the rise

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Speaker 1: of the different shows, um, I think there are more

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Speaker 1: people coming on board because they can get behind watching

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Speaker 1: you know, sitting down for thirty minutes or forty minutes

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Speaker 1: watching a show kind of getting pulled into the universe

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Speaker 1: as opposed to sitting down and watching some action flick.

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Speaker 1: You know. It's just like robots and the time we

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Speaker 1: live in now though, it's like the only thing being

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Speaker 1: made is marble stuff right now. Like I feel like

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Speaker 1: a lot of the other studios of Yeah, seriously, But

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Speaker 1: I'm glad that is actually a part of our world here.

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Speaker 1: A lot of those shows are being filmed actually here

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Speaker 1: in Atlanta, which is kind of cool seeing some of

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Speaker 1: those locations pop up in my entertainment. But Jill, enough

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Speaker 1: about that. This is our Friday Flight episode where we're

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Speaker 1: going to cover the news and how it pertains to

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Speaker 1: our money, it pertains to your money, Jil. Actually, before

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Speaker 1: we hit record, you and I were talking about, uh,

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Speaker 1: property taxes. You know, my gosh, I can't think of

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Speaker 1: anything more like boring and growing up the property taxes, right,

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Speaker 1: because when you're younger, you think, oh have you seen

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Speaker 1: home prices? Or oh what what kind of finishes are

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Speaker 1: you gonna get in your in your new kitchen, you know,

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Speaker 1: like are you gonna get the tile back splash? It's

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Speaker 1: more about the actual physical structure of the house. And

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Speaker 1: of course, you and I we're gonna talk about the

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Speaker 1: most boring aspect of home ownership, which is property taxes.

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Speaker 1: You know, you're a geriatric millennial win when you're talking

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Speaker 1: about property taxes, and uh so that's I feel like

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Speaker 1: that's one of my friends and I talked about now

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Speaker 1: talking about stuff like that it's those hidden costs of

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Speaker 1: home ownership and we want you to be aware of them.

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Speaker 1: Though exactly because in a lot of places where people live,

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Speaker 1: you can fight back if your assessment came into high,

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Speaker 1: and Matt, one of the things that we can do

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Speaker 1: here in the state where we live in Georgia is

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Speaker 1: it might even make sense to challenge your property tax

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Speaker 1: assessment even if it hasn't come in too high. And

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Speaker 1: the crazy interesting reason why is because even if you

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Speaker 1: just show up before where we live, they have a

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Speaker 1: board of Equalization, of board of your peers that here's

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Speaker 1: your case, and you know, hopefully you can mount a

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Speaker 1: case that that your property taxes are too high and

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Speaker 1: they will lower them. But even if they don't lower

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Speaker 1: your property tax bill, just by the mere fact that

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Speaker 1: you showed up, they will at least lock in that

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Speaker 1: rate for three years, and that in and of itself

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Speaker 1: is a big win. Absolutely yeah, So it never hurts

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Speaker 1: to ask. This is one of those instances where just

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Speaker 1: even asking for like the nice guy discount or the

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Speaker 1: nice girl discount, it's like, well, maybe this assessment is

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Speaker 1: actually accurate. But the ability, at least here in Georgia

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Speaker 1: to lock in that assessment for multiple years to come

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Speaker 1: is a huge advantage when it comes to the amounts

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Speaker 1: that is going towards your mortgage payment every single month,

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Speaker 1: because you know, a part of that payment is your escrow,

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Speaker 1: and your escrow is mainly made up of property taxes.

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Speaker 1: At least where we live. Our property taxes in Atlanta

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Speaker 1: are pretty high, especially given the increase in home values

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Speaker 1: that we've seen, and so this is definitely a good

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Speaker 1: reason to take a second look at that property tax

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Speaker 1: assessment that you may have received recently. But Jo, let's

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Speaker 1: go ahead and get to some of the different stories

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Speaker 1: we're gonna talk about today. There was this recent story

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Speaker 1: from Bloomberg about millennials being the new wealthiest generation. Man.

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Speaker 1: This this article is a stark contrast to I think

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Speaker 1: literally everything else that the media puts out about folks

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Speaker 1: in their mid twenties two upper thirties US geriatric millennials

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Speaker 1: like you mentioned. So much out there has been written

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Speaker 1: how millennials are behind when it comes to being smart

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Speaker 1: with their money, right when it comes to saving and investing,

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Speaker 1: even homeownership, and how student loans have made it seemingly

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Speaker 1: impossible to build wealth. But Alison Schreeger she had this

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Speaker 1: interesting article about how some of those stories are actually overblown.

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Speaker 1: It turns out that millennials are in just as good

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Speaker 1: of financial position as previous generations at this point in

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Speaker 1: their lives. Alson argues that while millennials do have more debt,

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Speaker 1: mostly due to those student loans, uh, they also have

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Speaker 1: more financial assets, largely due to us investing regularly in

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Speaker 1: workplace retirement accounts. So that's a huge win. And she

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Speaker 1: also says that because of our higher levels of education,

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Speaker 1: that millennials are going to earn more money as they

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Speaker 1: continue on in their careers, more money than our parents did.

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Speaker 1: And so I think that, you know, that kind of

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Speaker 1: remains to be seen, but a lot of that does

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Speaker 1: make sense. But then again to like, you know, she

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Speaker 1: she titled it the wealthiest generation, um, and I don't

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Speaker 1: I'm not sure if that's the case. Like maybe by

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Speaker 1: the time we are the oldest generation in our wealth

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Speaker 1: that's continued to grow, but you can't argue that right

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Speaker 1: now where the wealth these generations now. But I think, yeah,

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Speaker 1: she's trying to compare us to our cohort when they

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Speaker 1: were our age basically, and I think she makes some

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Speaker 1: good points. One of the things, though, that we don't have,

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Speaker 1: is some of those safety nets like a pension for

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Speaker 1: retirement that a lot of some of those other generations

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Speaker 1: had that weren't necessarily baked into their financials in their thirties. Um,

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Speaker 1: but they were something that they knew they had coming

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Speaker 1: to them later on in life. Um. But I think

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Speaker 1: she does make some good points, and I do think

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Speaker 1: that the situation for millennials isn't as dire as maybe

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Speaker 1: some other people have made it seem. Absolutely all right, Well,

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Speaker 1: let's move on, Matt. And one thing I know for

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Speaker 1: sure is that many of us aren't wealthy enough to

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Speaker 1: eat out. Apparently though, even even though millennials have a

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Speaker 1: lot of money eating out, it's gotten more expensive. Or

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Speaker 1: if you are wealthy, maybe you'll be wealthy for long

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Speaker 1: if you to eat out right exactly. And Axio has

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Speaker 1: had a great story about the sticker shock when we're

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Speaker 1: going out to eat. There are a few things influencing this, um. One,

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Speaker 1: the worker shortage has affected restaurants in a big way, right.

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Speaker 1: Being short staffed or having to pay workers more money

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Speaker 1: is a reality for a whole lot of restaurant owners.

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Speaker 1: If even had to kind of change the way they

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Speaker 1: do business right now in order to cope and to

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Speaker 1: the price of food is going up for restaurants as well.

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Speaker 1: And also many restaurants still aren't operating at full capacity.

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Speaker 1: They're still making sure that some tables, you know, that

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Speaker 1: they're not opening those up for seating um because of

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Speaker 1: social distancing and so, Yeah, this means that profits are

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Speaker 1: harder to come by right now, but a lot of

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Speaker 1: customers are coming back in a big way. Those folks

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Speaker 1: have some extra money and they miss eating out, So

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Speaker 1: that's the good news. But at the same time, prices

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Speaker 1: are rising. It is getting more expensive to go get

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Speaker 1: that meal at your favorite local restaurants. And it depends

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Speaker 1: on which restaurant you go to how much of an

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Speaker 1: increase you're gonna see. Yeah, man, I think maybe the

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Speaker 1: worst case scenario is if you're spending all of your

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Speaker 1: money at the cheesecake Factory. You don't worry about that, Okay, okay,

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Speaker 1: not mess on me. Yeah, I shouldn't throw shade. You

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Speaker 1: got the wrong guy, all right, factory. By the way,

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Speaker 1: I don't think I've been since high school. Yeah, And

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Speaker 1: so I feel like we primarily focused on like more

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Speaker 1: local restaurants. One of our local barbecue places that we love,

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Speaker 1: they have instituted this fee, and and that's with them

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Speaker 1: not even being full service, right Like, you have to

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Speaker 1: kind of go up in person order sit down with that.

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Speaker 1: There's this twenty fee on the ticket. What are your

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Speaker 1: thoughts on that? So I get it. I understand that,

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Speaker 1: and a lot of restaurants are kind of going that route.

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Speaker 1: I would prefer to see just the actual prices on

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Speaker 1: the menu, go of, And I think it feels a

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Speaker 1: little bait and switch when I get up there and

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Speaker 1: I see the price of the brisket sandwich I'm gonna

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Speaker 1: order and it's ten bucks. And then they're like, by

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Speaker 1: the way, there's this fee, and I'm like, I just

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Speaker 1: play my order. I didn't realize it was a twelve

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Speaker 1: dollar sandwich, yeah, exactly. And I would rather just see

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Speaker 1: that it was a twelve dollar sandwich, honestly. So I'm

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Speaker 1: not a huge fan of the fees. I'd rather see

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Speaker 1: people raise their prices, but I get it. It's it's honestly,

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Speaker 1: it makes me think about the bonuses that people are

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Speaker 1: being paid when they're getting hired, right like, because once

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Speaker 1: you raise wages, it's difficult to kind of walk that back.

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Speaker 1: And I think that's why maybe restaurants are doing this right,

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Speaker 1: They're willing to charge a fee because hey, things aren't

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Speaker 1: normal right now. But at least the way I see it,

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Speaker 1: I'm okay with those fees because what that tells me

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Speaker 1: is that at some point, when things go back to normal,

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Speaker 1: we will drop this fee, as opposed to if it's

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Speaker 1: like a twelve dollar stand, which it's like, well, is

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Speaker 1: that just how much it's always gonna cost now or

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Speaker 1: at some point is it going to get more affordable,

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Speaker 1: because I doubt that that's gonna be the case, right, Hopefully,

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Speaker 1: hopefully those fees are temporary. Yeah, yeah, exactly. And so

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Speaker 1: while prices are rising at your favorite local restaurant in

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Speaker 1: all likelihood, they aren't rising at the grocery stores to

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Speaker 1: nearly the same degree, at least not yet. There are

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Speaker 1: some exceptions. So prices on a few items have climbed

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Speaker 1: quite a bit, like like prices on meat, fresh fruit,

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Speaker 1: on veggies as well. Basically, all the things that are

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Speaker 1: actually good for you and not processed are costing more.

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Speaker 1: But the Wall Street Journal had a great article about

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Speaker 1: what grocery stores are doing to avoid increasing prices at

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Speaker 1: least for the time being. Shrink inflation is one of

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Speaker 1: those ways. We we talked about that recently, I think

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Speaker 1: a couple of months ago. But package sizes are continuing

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Speaker 1: to get smaller while the prices remain the same because

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Speaker 1: it takes consumers a bit to catch onto the tactic

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Speaker 1: of oh, I'm getting less product though I'm paying the

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Speaker 1: same amount. We are more price conscious than we are

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Speaker 1: weight conscious or quantity conscious, right. But fewer and smaller

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Speaker 1: discounts are another tactic that is being employed to combat inflation.

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Speaker 1: Sales flyers, they may not look as promising as they

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Speaker 1: used to. There aren't nearly the kind of discounts that

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Speaker 1: we have seen in years past. Uh. Some brands are

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Speaker 1: also actually reducing the variety of what they sell also

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Speaker 1: in order to cut costs. And I'm actually kind of

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Speaker 1: okay with that because we've all heard of the paradox

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Speaker 1: of choice right where we have so many options available

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Speaker 1: to us, and the idea is that the more options

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Speaker 1: we have, the better decisions we can make, and the

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Speaker 1: happier will be and the happier will be. But here

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Speaker 1: in America, because of the I mean the quantity of

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Speaker 1: decisions that we have in the options that we have

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Speaker 1: available to us, it actually doesn't benefit us. And so

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Speaker 1: this is honestly precisely why one of the reasons I

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Speaker 1: love Aldi is because there aren't many options, right, There's

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Speaker 1: one catchup, and like, that's the catchup I'm gonna get exactly,

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Speaker 1: and yeah, not a whole bunch of different sizes or

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Speaker 1: different brands. It's one catchup, an so guess and I

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Speaker 1: want I'm getting my them, okay, with different brands and

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Speaker 1: companies out there kind of streamlining, cutting freeze some of

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Speaker 1: those products that aren't doing so well, Yeah, for sure.

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Speaker 1: And I think it's important though, to be aware of

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Speaker 1: this phenomenon wind we're shopping, because yes, some of our

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Speaker 1: listeners might need to increase their grocery budget just a

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Speaker 1: little bit, especially if you still want those fresh veggies

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Speaker 1: which are good for you. But yeah, there are other

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Speaker 1: ways that you can fight back to besides just raising

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Speaker 1: the budget and just assuming that you're going to have

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Speaker 1: to pay more at the grocery store. Buying fewer name

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Speaker 1: brand items and more generic ones is a great way

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Speaker 1: to lower your grocery bill. And man, now, we did

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Speaker 1: an episode I don't know a few months back on

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Speaker 1: generic items. Jenioric items have come a long way in

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Speaker 1: store brands. They can save you a whole lot of money,

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Speaker 1: but most of the times consumers can't tell a difference

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Speaker 1: in the taste either. So yeah, I think that's a

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Speaker 1: surefire way to save money. Although lately you've been eating

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Speaker 1: the Aldi Dorito's over there at your desk, exactly generic Dorritos.

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Speaker 1: They're terrible. I've had this before. They're not bad. I

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Speaker 1: do not think they're good at all. Listen, as an

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Speaker 1: Audi shopper, you need to hush your mouth. Okay, that's

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Speaker 1: not right. You can't criticize. Hey, I love all the

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Speaker 1: but just avoid any Dorrito product coming on. They're fine,

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Speaker 1: They're fine. I just want the Clancys factor Rito just

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Speaker 1: are fine. People. Let's take a vote if you have,

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Speaker 1: if you went to weigh in, let us know what

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Speaker 1: you think about the all the brand Doritos. Yea. You

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Speaker 1: can comment on this episode on our website and how

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Speaker 1: the Money dot com also where you shot makes a

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Speaker 1: big difference. All the in particular or lethal like shopping

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Speaker 1: at those discount grocery stores are going to give you

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Speaker 1: a savings boost immediately just by walking in the doors. Um,

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Speaker 1: and then yeah, even though the sales aren't going to

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Speaker 1: be awesome right now, Matt, like you just said, stocking

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Speaker 1: up on certain items that you know you're going to

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Speaker 1: use when they are actually on sale can work in

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Speaker 1: your favor to especially you know, non perishable goods. So

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Speaker 1: just know that whether you're eating out or eating at home,

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Speaker 1: it's going to cost more in all likelihood, So be

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Speaker 1: aware and do your best to fight back where and

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Speaker 1: how you can exactly, All right, Joe, let's talk about

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Speaker 1: if you don't own a home. Right. Earlier on we

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Speaker 1: touched on how the rising values of homes has led

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Speaker 1: to increased property taxes. Well, if you rent, you don't

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Speaker 1: have to worry about that. Uh, but it all kind

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Speaker 1: of comes around, right. It looks like rents are actually

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Speaker 1: now starting to climb pandemic pricing that that was sort

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Speaker 1: of a thing when it came to the price of

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Speaker 1: rent in many cities last year. Rents were were falling

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Speaker 1: for a while even as the home prices were rocketing upwards.

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Speaker 1: But those discounts didn't last long, and in fact, while

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Speaker 1: rents flattened out for for much of last year, they're

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Speaker 1: actually higher now than they would have been. How the

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Speaker 1: pandemic not even happened. And this you sound like a wizard.

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Speaker 1: How do you know this, Matt? Well, yeah, apartments List,

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Speaker 1: they have run some projections and they've got these predictive

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Speaker 1: models willing to them in our show notes. Okay, I

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Speaker 1: thought you would just like pull them out of nowhere.

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Speaker 1: But if your renter be aware that when your leases up,

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Speaker 1: your rent is like they're gonna go up to Yeah,

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Speaker 1: I found that fascinating because yeah, rents have taken a

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Speaker 1: quick turn of dramatic turn upwards. And so yeah, again,

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Speaker 1: just like we're talking about combating the rising prices of food, well,

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Speaker 1: people need to know what to do if they're renting,

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Speaker 1: how to combat you know, those rising rent prices too,

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Speaker 1: And there are there are also ways to go about that,

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Speaker 1: and I think it's much easier if you actually from

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Speaker 1: a mom and pop landlord. If you rent from uh

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Speaker 1: nameless faceless apartment complex, the likelihood that you're going to

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Speaker 1: be able to save money on rent and fight that

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Speaker 1: rent increase is unlikely. They've got their algorithms, that they've

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Speaker 1: got their rent price that they're handing out to everybody

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Speaker 1: that lives there, and you're likely going to be hard

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Speaker 1: pressed to get a discount if you decide to stick around.

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Speaker 1: So one of the ways, though, that you can attempt

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Speaker 1: to get a discount is to offer to sign a

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Speaker 1: longer lease. Landlords love certainty, and knowing that if you're

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Speaker 1: a good tenant, you're gonna be there for two years

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Speaker 1: as opposed to just one gives some peace of mind,

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Speaker 1: and they're often willing to take a lower rent amounts

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Speaker 1: for that certainty. So yeah, vacancy and turnover often represent

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Speaker 1: big hits to their bottom line, and they want to

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Speaker 1: avoid that right. But to get the lowest price, you

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Speaker 1: might ultimately have to move. In a time of rising prices,

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Speaker 1: you're gonna have to be more flexible in order to

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Speaker 1: keep your budget for housing in check. Sometimes you actually

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Speaker 1: gotta go down the street to another apartment complex or

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Speaker 1: to another home in order to get the better deal

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Speaker 1: that you aren't able to get where you're currently stay. Yep,

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Speaker 1: it almost always benefits our bottom line if we're able

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Speaker 1: to be a little bit more flexible in all areas

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Speaker 1: of our life. But Joel, we've got several other stories

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Speaker 1: that we're gonna get to, including that new kind of

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Speaker 1: sketchy way to pay for college plus the decline in cash.

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Speaker 1: We'll get to those stories and more right after this break.

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Speaker 1: Al Right, we are back in. This is our Friday

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Speaker 1: Flight war covering the different headlines we came across this week,

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Speaker 1: and Joel, it is now time for the ludicrous headline

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Speaker 1: of the week. I was trying to do my best

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Speaker 1: robot in perstation there people. People can't see your robot arms.

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Speaker 1: I was doing them at the same time. Instead, you

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Speaker 1: kind of stunt of like, uh, like a gremlin. That's okay.

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Speaker 1: Or our ludicrous headline this week comes from c NBC

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Speaker 1: and it goes something like this, many four one K

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Speaker 1: investors don't use target date funds the right way. And

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Speaker 1: I'll say we are fans of target eight funds here

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Speaker 1: at how the money. Even if they aren't, they're not

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Speaker 1: gonna be our first choice, especially for young investors. But

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Speaker 1: we are especially fund of the incredibly low cost target

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Speaker 1: date funds that you can get from institutions like Vanguard.

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Speaker 1: But this article brings up a good question, right, like

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Speaker 1: people aren't using them correctly. What does that mean? And

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Speaker 1: so this article actually uses Vanguard information and they find

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Speaker 1: that some people who invest in target date funds are

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Speaker 1: also holding onto other funds as well. And the reason

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Speaker 1: this is a problem because target date funds are meant

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Speaker 1: to be the only fund you hold if you choose

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Speaker 1: to go in that direction, because they are properly diversified

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Speaker 1: in and of themselves, sort of like an all inclusive resort.

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Speaker 1: You're not supposed to have to worry about that anymore.

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Speaker 1: But yeah, if you're paying the bartender for drinks at

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Speaker 1: the inclusive resort, you went astray. You did something wrong.

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Speaker 1: But even though like that is their intended purpose, we're

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Speaker 1: actually okay with people holding a target date fund as

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Speaker 1: well as other funds, but only if you're doing it properly,

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Speaker 1: exactly exactly. Yeah. Someone Matt who we haven't had on

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Speaker 1: the show yet but we should soon is Paul Merriman

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Speaker 1: and and he's done a lot of work. I've been

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Speaker 1: following his work for years in the investing space, and

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Speaker 1: he's actually found that holding a target date fund alongside

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Speaker 1: one other fund, in particular a small cap equity fund,

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Speaker 1: is historically better for diversification and for long term returns.

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Speaker 1: So yeah, if you want to take the easiest approach possible,

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Speaker 1: holding a target date fund with a date closest to

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Speaker 1: your likely retirement date and owning nothing else is your

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Speaker 1: best bet. It really is like to set it and

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Speaker 1: forget it way to invest right, And it's it works

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Speaker 1: for most people because most people don't care enough. They

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Speaker 1: want the easy button. That is the easy button. But

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Speaker 1: one of the downsides of target date funds for younger

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Speaker 1: investors is that they actually might be too conservative. Basically,

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Speaker 1: it's too much bond exposure for folks, specifically for folks

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Speaker 1: under the age of forty. So, yeah, if you like

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Speaker 1: target date funds but you want more equity exposure, putting

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Speaker 1: a good chunk of your money into that target date

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Speaker 1: fund and then some of the rest of your money

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Speaker 1: into a small cap value or a total stock market

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Speaker 1: fund could be the perfect pairing, right, because yeah, target

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Speaker 1: date funds, they're ultimately one of the best investing inventions

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Speaker 1: of all time, Like, besides the invention of the index fund,

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Speaker 1: target date funds are probably the best invention of the

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Speaker 1: last fifty years. But yeah, it doesn't have to be

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Speaker 1: this all or nothing approach. And I think when you

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Speaker 1: read a headline like that, uh, and you dig in

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Speaker 1: and you're like, well, you know, some people can own

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Speaker 1: a target date fund and another fund you're not using

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Speaker 1: it wrong, You're not doing the wrong thing. But I

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Speaker 1: will say I do understand what they're getting at, because

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Speaker 1: target date funds in and of themselves can be a

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Speaker 1: great one stop shop. Going back to the all inclusive

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Speaker 1: resort analogy. Maybe yeah, if you want to tip the bartender,

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Speaker 1: that might increase the quality of your drinks. Maybe it

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Speaker 1: makes you feel better about just kind of ordering the

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Speaker 1: same drink every time you show up or something like that.

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Speaker 1: I don't know, live a little. We've got some variety here,

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Speaker 1: but yeah, I mean, but it all comes down to

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Speaker 1: that conservative nature. JO will actually crunch the numbers, right.

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Speaker 1: And so someone who's thirty years old right now, they

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Speaker 1: might be invested in a five fund, right if they're

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Speaker 1: gonna retire around them being sixty five years old. And

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Speaker 1: if you look at the past ten years of the

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Speaker 1: performance of that fund, you're looking out a hundred and

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Speaker 1: thirty three percent growth over ten years, which is pretty great.

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Speaker 1: You know, you're looking at over annually. However, if you

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Speaker 1: look at VOO right uh, the SMP fund e t

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Speaker 1: F by Van Guard over that exact same period, you

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Speaker 1: would have seen an increase of two hundred and thirty

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Speaker 1: seven percent, and so difference point three percent. That sounds

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Speaker 1: pretty good annually. But twenty three point seven man, that

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Speaker 1: sounds that sounds a lot better. Yeah. And that's the

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Speaker 1: one negative we we have when it comes to target

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Speaker 1: date funds, is that, in particular missing for people in

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Speaker 1: their twenties and thirties. Yeah, you're missing out on some

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Speaker 1: of that additional equity exposure, which can be crucial, especially

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Speaker 1: in those early investing years. Yeah, and even too. If

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Speaker 1: you study the charts and you look at them, I mean,

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Speaker 1: they look identical. It's just that there's more upside to

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Speaker 1: the vow because it's not being weighed down by those bonds. Uh.

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Speaker 1: And that's a risk I think, especially young investors, can

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Speaker 1: afford to take. But let's keep moving. Joe off. Some

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Speaker 1: folks out there might be wondering if graduate degrees are

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Speaker 1: worth the money. We we talked earlier in the episode

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Speaker 1: about how millennials might become the wealthiest jet deration in

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Speaker 1: part because of the fact that the most educated generation,

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Speaker 1: but that doesn't necessarily mean more education always pays off.

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Speaker 1: The Wall Street Journal yet again, they featured a great

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Speaker 1: article about graduate degrees and how many don't provide the

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Speaker 1: payoff that they promise, And one of the examples they

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Speaker 1: gave in that story was that incomes post graduation are

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Speaker 1: very similar for both cal State Long Beach students as

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Speaker 1: well as USC students. But here's the thing, the USC

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Speaker 1: education cost two and a half times more money. Yeah,

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Speaker 1: they included this this helpful tool worth checking out if

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Speaker 1: if you're someone who is considering going back to school,

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Speaker 1: make sure to check out that debt to income ratio

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Speaker 1: tool before you pick the school that you're going to attend. UH,

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Speaker 1: And you can punch in different degree programs as well,

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Speaker 1: because you don't always get what you pay for. I

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Speaker 1: feel like this is also another instance of students UH

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Speaker 1: taking a more consumeristic approach to higher education, right as

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Speaker 1: they should be. Once we have those numbers and if

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Speaker 1: we can figure out, you know what the return on

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Speaker 1: this investment is going to be, it's going to help

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Speaker 1: us make a better decision. And I think at Wall

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Speaker 1: Street Journal Journal tool is going to be really helpful

430
00:20:07,040 --> 00:20:09,480
Speaker 1: for a lot of people who are considering getting an

431
00:20:09,520 --> 00:20:13,040
Speaker 1: advanced degree. UH. It's gonna really help guide them towards

432
00:20:13,119 --> 00:20:15,080
Speaker 1: a school maybe that's going to be a better choice

433
00:20:15,280 --> 00:20:17,600
Speaker 1: than another one which might cost a whole lot more

434
00:20:17,800 --> 00:20:20,560
Speaker 1: and have essentially the same payoff. Sure. Yeah, well, and

435
00:20:20,600 --> 00:20:23,200
Speaker 1: you kind of took the positive side of the consumeristic approach,

436
00:20:23,800 --> 00:20:26,880
Speaker 1: which is like looking for where you can find value, right,

437
00:20:27,040 --> 00:20:28,600
Speaker 1: But I was thinking more from like the from the

438
00:20:28,640 --> 00:20:30,040
Speaker 1: same point of like, I'm just gonna spend a lot

439
00:20:30,040 --> 00:20:32,200
Speaker 1: of money and that's gonna solve my problems, because that's

440
00:20:32,240 --> 00:20:33,760
Speaker 1: the that's that's kind of like the flip side of

441
00:20:33,760 --> 00:20:36,480
Speaker 1: the coin. And oftentimes when you're looking at schools that

442
00:20:36,480 --> 00:20:38,520
Speaker 1: costs more money, I think that's the mentality. You just

443
00:20:38,720 --> 00:20:40,560
Speaker 1: they think that more is better. If it costs more,

444
00:20:40,600 --> 00:20:43,320
Speaker 1: it's going to be better. And people often think that like, well,

445
00:20:43,320 --> 00:20:45,080
Speaker 1: I don't have to put in the hard work of

446
00:20:45,280 --> 00:20:48,240
Speaker 1: networking or interning while I'm in school, because they're counting

447
00:20:48,280 --> 00:20:50,000
Speaker 1: on the name of the school, right, they're counting on

448
00:20:50,040 --> 00:20:52,080
Speaker 1: the pedigree. If that's on my diploma, I'm going to

449
00:20:52,160 --> 00:20:54,720
Speaker 1: be exactly well, when in reality that's not the case.

450
00:20:54,800 --> 00:20:57,320
Speaker 1: And oftentimes if you kind of you can save a

451
00:20:57,320 --> 00:20:59,679
Speaker 1: lot of money by going to a more affordable school,

452
00:20:59,760 --> 00:21:01,080
Speaker 1: and the way you're gonna have to put in the

453
00:21:01,119 --> 00:21:04,200
Speaker 1: work in order to yeah, see that income go up

454
00:21:04,320 --> 00:21:06,920
Speaker 1: post graduation. Yeah, and the less of a millstone around

455
00:21:06,960 --> 00:21:09,560
Speaker 1: your neck if the amount of debt that you're graduating

456
00:21:09,560 --> 00:21:12,920
Speaker 1: with is a whole lot less. So yeah, we definitely

457
00:21:13,000 --> 00:21:14,520
Speaker 1: highly recommend that tool. Will link to it in our

458
00:21:14,520 --> 00:21:17,119
Speaker 1: show notes, and just yet doing your due diligence when

459
00:21:17,160 --> 00:21:20,359
Speaker 1: it comes to how much you're paying for that advanced degree.

460
00:21:20,680 --> 00:21:23,440
Speaker 1: Figuring out what the cost of that education is going

461
00:21:23,480 --> 00:21:26,760
Speaker 1: to be an advance of applying to that school is

462
00:21:26,920 --> 00:21:28,720
Speaker 1: is crucial to know whether or not it's going to

463
00:21:28,840 --> 00:21:32,480
Speaker 1: pay off in the way that you wanted to. And Matt, so,

464
00:21:32,600 --> 00:21:34,719
Speaker 1: much of whether an advanced degree is going to pay

465
00:21:34,760 --> 00:21:36,960
Speaker 1: off or not also depends on whether or not someone's

466
00:21:36,960 --> 00:21:39,040
Speaker 1: gonna have to take on debt or not in order

467
00:21:39,040 --> 00:21:41,399
Speaker 1: to get that degree. Right, the if you're able to

468
00:21:41,400 --> 00:21:44,440
Speaker 1: pay with cash, then you're not paying interest on top

469
00:21:44,680 --> 00:21:47,600
Speaker 1: of student loans, and so the likelihood that that degree

470
00:21:47,680 --> 00:21:49,480
Speaker 1: is going to pay off goes up. And we don't

471
00:21:49,480 --> 00:21:51,240
Speaker 1: think student loans are the worst thing in the world,

472
00:21:51,320 --> 00:21:53,800
Speaker 1: but moderation is key, right. We don't don't want people

473
00:21:54,040 --> 00:21:55,840
Speaker 1: getting in over their head when it comes to student

474
00:21:55,840 --> 00:21:58,280
Speaker 1: loan debt. And since most people don't actually save up

475
00:21:58,320 --> 00:22:00,760
Speaker 1: the cash to pay for their education. Another way that

476
00:22:00,800 --> 00:22:03,720
Speaker 1: people are funding higher learning now is through something called

477
00:22:03,760 --> 00:22:06,679
Speaker 1: income share agreements. But this way of paying for school

478
00:22:06,720 --> 00:22:08,960
Speaker 1: has its own problems to are actually starting to see

479
00:22:09,280 --> 00:22:13,400
Speaker 1: more lawsuits about these alternatives to loans, and market Watch

480
00:22:13,440 --> 00:22:16,960
Speaker 1: had this really great story about that this week. Um so,

481
00:22:16,960 --> 00:22:19,359
Speaker 1: so what are they? Well, instead of taking on debt

482
00:22:19,400 --> 00:22:21,800
Speaker 1: in the form of loans to fund your education, you

483
00:22:21,840 --> 00:22:24,320
Speaker 1: agree to pay a portion of your salary for a

484
00:22:24,359 --> 00:22:27,920
Speaker 1: finite period of time post graduation. Some agreements will take

485
00:22:27,960 --> 00:22:31,680
Speaker 1: as much as of your salary for like the three

486
00:22:31,760 --> 00:22:33,880
Speaker 1: years after you graduate, and then they might even want

487
00:22:34,000 --> 00:22:36,639
Speaker 1: a smaller chunk for the three years beyond that. So

488
00:22:37,040 --> 00:22:40,159
Speaker 1: six years post graduation, you're paying a large portion of

489
00:22:40,200 --> 00:22:43,919
Speaker 1: what you're making. Instead of having student loans stick around,

490
00:22:44,080 --> 00:22:46,720
Speaker 1: you're paying more of your money for a shorter period

491
00:22:46,720 --> 00:22:49,639
Speaker 1: of time. But basically, it sounds nice to not be

492
00:22:49,680 --> 00:22:53,040
Speaker 1: taking on loans, but the endgame for many is similar

493
00:22:53,080 --> 00:22:54,960
Speaker 1: and for some it's worse. Yeah, this is definitely an

494
00:22:55,000 --> 00:22:57,640
Speaker 1: instance where we want the buyer to be where uh

495
00:22:58,200 --> 00:23:00,000
Speaker 1: it could because it could work out, right, Like, there

496
00:23:00,000 --> 00:23:02,560
Speaker 1: are certain benefits that come with these I says these

497
00:23:02,600 --> 00:23:05,760
Speaker 1: income share agreements, because like what I like about them

498
00:23:05,840 --> 00:23:08,360
Speaker 1: is that in particular when the schools are offering them,

499
00:23:08,400 --> 00:23:10,680
Speaker 1: like the schools are putting their money where their mouth

500
00:23:10,760 --> 00:23:12,560
Speaker 1: is right and so and they're saying that we are

501
00:23:12,560 --> 00:23:16,000
Speaker 1: willing to take on some risk knowing that you are

502
00:23:16,040 --> 00:23:17,760
Speaker 1: going to get a great job, and we believe that

503
00:23:17,760 --> 00:23:20,159
Speaker 1: this is going to make sense for everybody, and it

504
00:23:20,160 --> 00:23:25,359
Speaker 1: incentivizes the school I think, to do a good jobly, absolutely,

505
00:23:25,480 --> 00:23:28,119
Speaker 1: And from the borrowers standpoint, like you get to mitigate

506
00:23:28,119 --> 00:23:30,960
Speaker 1: some risks. Who knows in two or four years or whatever,

507
00:23:31,119 --> 00:23:33,000
Speaker 1: like when you're done with that degree, who knows what

508
00:23:33,080 --> 00:23:34,520
Speaker 1: kind of shape the economy is going to be, and

509
00:23:34,560 --> 00:23:37,400
Speaker 1: who knows what that specific industry is going to look like.

510
00:23:37,600 --> 00:23:39,399
Speaker 1: And so I do like that, but just know that

511
00:23:39,440 --> 00:23:40,680
Speaker 1: it comes at a cost, and make sure that you

512
00:23:40,720 --> 00:23:43,320
Speaker 1: read all the fine details, because, like you said, you like,

513
00:23:43,400 --> 00:23:46,199
Speaker 1: they can get even worse. In some instances. There are

514
00:23:46,200 --> 00:23:48,520
Speaker 1: some students that are being told after they've agreed to

515
00:23:48,560 --> 00:23:51,120
Speaker 1: their first I s A that they need to sign

516
00:23:51,160 --> 00:23:53,480
Speaker 1: up for another one in order to be able to graduate.

517
00:23:53,840 --> 00:23:55,600
Speaker 1: That first one that covers the first year and a

518
00:23:55,600 --> 00:23:57,600
Speaker 1: half of school, but it doesn't cover the second year.

519
00:23:57,640 --> 00:24:01,080
Speaker 1: In bol and switch man, and then that extends the

520
00:24:01,119 --> 00:24:03,200
Speaker 1: years in which you have to pay a huge chunk

521
00:24:03,240 --> 00:24:06,040
Speaker 1: of your future salary to the company who is servicing

522
00:24:06,320 --> 00:24:09,040
Speaker 1: that I s A. And so these income share agreements

523
00:24:09,160 --> 00:24:11,520
Speaker 1: also don't have the same protection as federal student loans.

524
00:24:11,520 --> 00:24:14,280
Speaker 1: So that's kind of another uh con when it comes

525
00:24:14,280 --> 00:24:16,639
Speaker 1: to I s as the current pause and payments that

526
00:24:16,680 --> 00:24:19,200
Speaker 1: we're sitting with With federal student loans, that's great, right, Well,

527
00:24:19,240 --> 00:24:21,640
Speaker 1: folks with an I s A aren't eligible for that,

528
00:24:21,960 --> 00:24:24,879
Speaker 1: so yeah, be careful before deciding that in I s

529
00:24:24,920 --> 00:24:27,120
Speaker 1: A is a better option for you than a traditional

530
00:24:27,160 --> 00:24:29,920
Speaker 1: student loan, because it could be worse. That's Matt. Let's

531
00:24:29,960 --> 00:24:32,600
Speaker 1: get to our last subjects, last story that we want

532
00:24:32,600 --> 00:24:35,480
Speaker 1: to cover on this today's episode. We talked in depth

533
00:24:35,520 --> 00:24:38,600
Speaker 1: about our love for credit cards on Wednesday's episode We

534
00:24:38,600 --> 00:24:40,280
Speaker 1: do We like him a lot and uh yeah, a

535
00:24:40,320 --> 00:24:44,119
Speaker 1: new Atlanta Fed survey found that only eighteen percent of

536
00:24:44,119 --> 00:24:49,320
Speaker 1: payments were done with cash in that's down from uh inn,

537
00:24:49,880 --> 00:24:53,040
Speaker 1: so cash seems to be quickly losing its luster. We

538
00:24:53,080 --> 00:24:54,880
Speaker 1: saw that one come into yeah, well, and COVID only

539
00:24:54,880 --> 00:24:57,680
Speaker 1: accelerated the downfall of cash, right, And so yeah, since

540
00:24:57,800 --> 00:24:59,520
Speaker 1: you and I we think that credit cards are the

541
00:24:59,560 --> 00:25:02,160
Speaker 1: superior form of payment for many reasons. If you want

542
00:25:02,160 --> 00:25:04,199
Speaker 1: to know why, go back and listen to Wednesday's episode.

543
00:25:04,200 --> 00:25:06,920
Speaker 1: We talked about it in depth. But yeah, this is

544
00:25:07,000 --> 00:25:10,640
Speaker 1: great news in our opinion, but credit cards aren't all

545
00:25:10,840 --> 00:25:12,359
Speaker 1: upside we we we want to be able to talk

546
00:25:12,400 --> 00:25:15,600
Speaker 1: about both sides of the coin. Right and investment writer

547
00:25:15,800 --> 00:25:17,440
Speaker 1: Jason's y He had a great article in The Wall

548
00:25:17,440 --> 00:25:21,560
Speaker 1: Street Journal last week about the downsides of frictionless digital payments,

549
00:25:21,680 --> 00:25:23,800
Speaker 1: whether we're talking about paying with your phone or even

550
00:25:23,800 --> 00:25:26,239
Speaker 1: just you know, inserting your credit card and pain. But

551
00:25:26,440 --> 00:25:31,199
Speaker 1: cashless transactions essentially eliminate the pain of buying things and

552
00:25:31,200 --> 00:25:33,800
Speaker 1: basically we don't feel the purchase to the same extent. Right,

553
00:25:33,840 --> 00:25:36,440
Speaker 1: We're we're not handing over physical money to a cashier,

554
00:25:36,440 --> 00:25:38,040
Speaker 1: and it just kind of makes it easier for us

555
00:25:38,080 --> 00:25:40,920
Speaker 1: to spend. And so, yeah, there are some downsides to

556
00:25:41,359 --> 00:25:44,320
Speaker 1: using digital payments or credit cards, because it might make

557
00:25:44,400 --> 00:25:47,280
Speaker 1: us spend more freely than we otherwise would exactly. Yeah,

558
00:25:47,280 --> 00:25:49,399
Speaker 1: So it's important for us then to find different ways

559
00:25:49,440 --> 00:25:52,440
Speaker 1: to make spending more painful while still using the best

560
00:25:52,600 --> 00:25:55,840
Speaker 1: method of payment that we believe in credit cards. Exactly.

561
00:25:55,880 --> 00:25:58,119
Speaker 1: You want to increase that friction, and essentially we want

562
00:25:58,160 --> 00:26:00,000
Speaker 1: you to find different ways to become like a credit

563
00:26:00,080 --> 00:26:04,480
Speaker 1: card masochist, right, you want it to hurt a little bit.

564
00:26:04,760 --> 00:26:06,880
Speaker 1: Even just the act of of writing down every turn

565
00:26:06,960 --> 00:26:08,760
Speaker 1: yourself in the face every time you make your credit

566
00:26:08,800 --> 00:26:10,760
Speaker 1: card purchase just the perfect way to do that. Fight

567
00:26:10,800 --> 00:26:13,919
Speaker 1: Club Edward Norton just like put on one of the

568
00:26:13,920 --> 00:26:16,960
Speaker 1: best performances of him, you know, beating himself so good.

569
00:26:17,200 --> 00:26:19,360
Speaker 1: But uh, I was saying, even just like writing down

570
00:26:19,359 --> 00:26:21,240
Speaker 1: on a notebook some of the different purchases that you've

571
00:26:21,280 --> 00:26:24,159
Speaker 1: made that day, this old school way can kind of

572
00:26:24,160 --> 00:26:26,600
Speaker 1: create that all important understanding that you have just spent

573
00:26:26,800 --> 00:26:30,000
Speaker 1: real money as opposed to numbers you know, changing on

574
00:26:30,160 --> 00:26:32,840
Speaker 1: maybe your phone or on your computer screen. Even paying

575
00:26:32,840 --> 00:26:35,040
Speaker 1: your credit card built off weekly can have a similar

576
00:26:35,080 --> 00:26:37,000
Speaker 1: effect as opposed to just waiting until the end of

577
00:26:37,000 --> 00:26:39,320
Speaker 1: the month. You're like, oh, yeah, you're more cognizant of

578
00:26:39,320 --> 00:26:41,639
Speaker 1: how much you spent in a week versus a month,

579
00:26:41,640 --> 00:26:43,320
Speaker 1: and you're yeah, I feel like, of course of a month,

580
00:26:43,400 --> 00:26:45,240
Speaker 1: you just lose track. It's like I mean I literally

581
00:26:45,280 --> 00:26:47,840
Speaker 1: sometimes forget I'm like, oh yeah, like we went out

582
00:26:47,840 --> 00:26:50,520
Speaker 1: to that nice restaurant and I'm like, oh, yeah, we

583
00:26:50,840 --> 00:26:52,919
Speaker 1: shouldn't be going out again this night the effort for

584
00:26:52,960 --> 00:26:54,880
Speaker 1: day to night, Maybe we should do something a little

585
00:26:54,880 --> 00:26:56,840
Speaker 1: bit more on the cheap. And you know, something else

586
00:26:56,880 --> 00:27:00,199
Speaker 1: to consider too is cash only spots and so not

587
00:27:00,240 --> 00:27:02,359
Speaker 1: even taking your credit card with you to some of

588
00:27:02,359 --> 00:27:04,399
Speaker 1: the different places where you might be tempted to spend

589
00:27:04,440 --> 00:27:07,199
Speaker 1: more than you should. So it's kind of takes some

590
00:27:07,280 --> 00:27:10,119
Speaker 1: self awareness here, like leaving your credit card at home

591
00:27:10,119 --> 00:27:12,720
Speaker 1: when you're going to your favorite clothing place and only

592
00:27:12,720 --> 00:27:15,400
Speaker 1: bring in a fifty dollars right, or like limiting yourself

593
00:27:15,480 --> 00:27:18,520
Speaker 1: in that way we're not bringing any money because it's like, Okay,

594
00:27:18,520 --> 00:27:21,359
Speaker 1: I want to give myself twenty four hours to process

595
00:27:21,520 --> 00:27:23,919
Speaker 1: what I've seen and what I want to purchase. But

596
00:27:24,119 --> 00:27:27,040
Speaker 1: feeling the pain of paying, regardless of the method of

597
00:27:27,040 --> 00:27:29,880
Speaker 1: payment is important, And here's the thing to Studies show

598
00:27:29,920 --> 00:27:32,800
Speaker 1: that it can actually increase the satisfaction that you feel

599
00:27:33,440 --> 00:27:35,320
Speaker 1: with the items that you buy. And it kind of

600
00:27:35,320 --> 00:27:38,120
Speaker 1: makes me think of planning for vacation when you've invested

601
00:27:38,160 --> 00:27:41,520
Speaker 1: the time you're emotionally invested with that vacation, right, like

602
00:27:41,520 --> 00:27:45,440
Speaker 1: you've put in hours researching destinations, maybe some different trailers

603
00:27:45,440 --> 00:27:47,480
Speaker 1: you're gonna hike, like looking up cool arab n B s.

604
00:27:47,560 --> 00:27:49,119
Speaker 1: When you've done all of that, you are going to

605
00:27:49,200 --> 00:27:52,440
Speaker 1: be more excited about that trip compared to if maybe

606
00:27:52,440 --> 00:27:54,199
Speaker 1: there's a trip that was just planned for you and

607
00:27:54,200 --> 00:27:56,800
Speaker 1: you're just showing up. Right to some folks, maybe that

608
00:27:56,800 --> 00:27:58,520
Speaker 1: that sounds nice to not have to plan it, But

609
00:27:58,560 --> 00:28:00,280
Speaker 1: I guarantee that the person who was put in the time,

610
00:28:00,520 --> 00:28:02,920
Speaker 1: they're going to enjoy that at a deeper level. They're

611
00:28:02,920 --> 00:28:05,439
Speaker 1: going to have a deeper level of satisfaction than they

612
00:28:05,480 --> 00:28:08,280
Speaker 1: would had they not invested any of that effort into

613
00:28:08,280 --> 00:28:10,800
Speaker 1: planning it. So again, for you, if that means writing

614
00:28:10,840 --> 00:28:13,920
Speaker 1: down transactions, For me, it means literally copying pasting those

615
00:28:13,920 --> 00:28:16,919
Speaker 1: transaction from my credit card statement over into Excel, so

616
00:28:17,000 --> 00:28:19,359
Speaker 1: I see every single purchase, but determine what it is

617
00:28:19,400 --> 00:28:20,920
Speaker 1: it's going to work best for you to make sure

618
00:28:20,920 --> 00:28:23,160
Speaker 1: that you stay on track with your spending. Agreed. Yeah,

619
00:28:23,160 --> 00:28:24,960
Speaker 1: I don't want to lose any of the benefits of

620
00:28:25,240 --> 00:28:27,640
Speaker 1: paying with the credit card, but I also don't want

621
00:28:27,680 --> 00:28:29,600
Speaker 1: to succumb to any of the pitfalls that can come

622
00:28:29,640 --> 00:28:31,159
Speaker 1: with paying with the credit cards. You don't want to

623
00:28:31,160 --> 00:28:33,000
Speaker 1: get carried away exactly a minute, and I want to

624
00:28:33,040 --> 00:28:34,800
Speaker 1: enjoy my purchases, and so I gotta find a way

625
00:28:34,800 --> 00:28:37,200
Speaker 1: to feel the pain right, like the proper amount of pain.

626
00:28:37,480 --> 00:28:39,440
Speaker 1: So all right, that that's gonna do it for this

627
00:28:39,440 --> 00:28:41,920
Speaker 1: week's Friday flight. We hope you have a great weekend.

628
00:28:41,920 --> 00:28:44,000
Speaker 1: We hope to see back here on Monday for and

629
00:28:44,200 --> 00:28:47,040
Speaker 1: ask how the money episode. That's right, so Joel, that's

630
00:28:47,040 --> 00:28:49,560
Speaker 1: gonna be it for today until next time. Best Friends Out,

631
00:28:49,640 --> 00:29:02,120
Speaker 1: Best Friends Out, bo