Speaker 1: Welcome to Had of Money.
Speaker 2: I'm Joel, I'm Matt, and today we're talking about credit
Speaker 2: score supremacy, avoiding alts and points in purgatory.
Speaker 1: Look at hu Jewel alliteration on point. Today with our
Speaker 1: Friday Flight to the Max, our weekly roundup of the
Speaker 1: news stories that we came across this week and specifically
Speaker 1: the ones we think you should pay attention to and
Speaker 1: how it's going to impact your wallet. We hope everyone
Speaker 1: is staying warm out there. It's like nationwide sub zero
Speaker 1: or sub freezing temperature.
Speaker 2: Most of the kid is in California, which geez hearts
Speaker 2: go out to all our friends and one impacted out
Speaker 2: there listeners out there.
Speaker 1: Yeah, well, I was going to say, so, we've we
Speaker 1: talked recently about my sort of close phone versus open
Speaker 1: cell spray poam, you know, with a with a house
Speaker 1: and all that insulation. Yeah, yeah, all of that. I
Speaker 1: don't want to talk about that. I've got another sort
Speaker 1: of insulation breakthrough a lot of research trying to figure
Speaker 1: this thing out, especially now when it's so cold in
Speaker 1: the house and you can feel the cold through the floors. Man.
Speaker 1: And so I've been considering getting our cross space in
Speaker 1: the existing part of the home spray phoned because that's
Speaker 1: something folks do they anyway.
Speaker 2: Especially just for comfort. Like I know it will reduce
Speaker 2: your energy bills, but it will also just make your feet.
Speaker 1: Yeah, absolutely, it makes it. It just insulates that cross
Speaker 1: space even more. But I got to thinking about it,
Speaker 1: and I'm not going to do it. And here's why.
Speaker 1: Because I came across honestly a bunch of different articles.
Speaker 1: But cinderblock has a fairly high R value value or whatever, like,
Speaker 1: it's fairly insulated. And on top of that, you consider
Speaker 1: the fact that there's like a foam board on the
Speaker 1: outside of that, then an air gap and then brick. Well,
Speaker 1: all that equals to a fairly insulated cross space. You
Speaker 1: don't need ad more. So you don't need to do
Speaker 1: that leak. You could, but you don't. It's not necessary,
Speaker 1: I guess, is what I'm saying. And that got me.
Speaker 1: Might be overkill. It might be overkilled. But then I've
Speaker 1: got to ask myself, well, why is the cross space
Speaker 1: so cold? So here's my insulation breakthrough or my insulation realization, jol,
Speaker 1: which is that the very cross space. Did you like
Speaker 1: that the cross space door that I was going through
Speaker 1: is not insulated, and so I looked it up. Guess
Speaker 1: what the R value is of a half inch piece
Speaker 1: of plywood of OSB gotta be minimal? It is less
Speaker 1: is less than one? Okay, So basically I've got a
Speaker 1: You know, most folks, if you've got a brick house,
Speaker 1: like you have a fairly well insulated cross space that's
Speaker 1: for all the cold air is coming in. But it's
Speaker 1: like there's not even a door on there, like the
Speaker 1: cold air is just pouring in. And it makes so
Speaker 1: much sense because in the on our main level of
Speaker 1: the house, like that is the coldest section and that's
Speaker 1: one of the things where it's like, man, why is
Speaker 1: it It's just so cold down here? It's not actually
Speaker 1: that cold in other parts of the main floor, but
Speaker 1: that portion of the house near the laundry room, oh,
Speaker 1: which happens to be where the cross space access is.
Speaker 1: My question for you, then, is I going to insulate
Speaker 1: that door? Yeah? Better believe it.
Speaker 2: Is it similar though to when you have like attic
Speaker 2: access and people will put those I've got one of
Speaker 2: those zipper like et space hats.
Speaker 1: Yeah, basically is that what they put on the cross
Speaker 1: space door. I've only minimally looked into it, but I
Speaker 1: know that I am at least going to put some
Speaker 1: foam back or board, which adds a little bit. But
Speaker 1: I'm also considering They sell these different canister kits even
Speaker 1: at home depot, where it's much more affordable and you
Speaker 1: can it's a spray foam application, and I'm thinking about
Speaker 1: buying one of those consumer grade spray foam application kits,
Speaker 1: going in the cross space, putting a mask on, shutting
Speaker 1: the door and spraying over it, springing the back of
Speaker 1: the door, yeah, letting it cure, and then cutting my
Speaker 1: way out essentially just with like a razor blade. So
Speaker 1: it's still really half home improvement half escape room. Yeah,
Speaker 1: it's really tight because you don't That's that's one of
Speaker 1: the other issues with actual air leaks that can come sometimes.
Speaker 1: It's not just insulation, is the fact that like, hey,
Speaker 1: if you can see a gap, if you can see
Speaker 1: sky out from your cross space, there's cold air obviously
Speaker 1: getting in there. But anyway, all that to say, this
Speaker 1: is a way to avoid spending thousands of dollars on
Speaker 1: an encapsulation which you may not need. Instead, I'm going
Speaker 1: to take this low cost budget approach to finding the
Speaker 1: most low hanging fruit, and man, that cross based door
Speaker 1: is one hundred percent the lowest hanging fruit when it
Speaker 1: comes to keeping that space warm.
Speaker 2: Well, let us know how it goes and how it
Speaker 2: changes kind of your environment near where that door is
Speaker 2: in your main.
Speaker 1: To man, it has to yeah, but that Yeah, you're right.
Speaker 1: I'm really hopeful a.
Speaker 2: Small amount of DIY I think could save you a
Speaker 2: lot of money and get you where you want to
Speaker 2: go without overdoing it.
Speaker 1: Yeah. And that's why I was thinking the phone backer
Speaker 1: board because I was thinking, you know what, I could
Speaker 1: even cut it to be slightly larger than the actual door. Yeah,
Speaker 1: and that's that's really affordable, right, just a piece of whatever.
Speaker 1: Maybe I'll even double it up, I don't know. Yeah,
Speaker 1: but sticking that on, they're making it slightly larger that way,
Speaker 1: when it closes, it's like it overlaps the crack in
Speaker 1: the door. To sure, Oh you know what I'm saying.
Speaker 2: I think that because there's always a game plywood there.
Speaker 2: It's not there's always a little gap there. It seems
Speaker 2: like exactly, that's a good way to fix that.
Speaker 1: Anyway. I wanted to share that with all the folks
Speaker 1: out there. Who might be thinking something similar where they're like, man,
Speaker 1: my feet are so cold, how do we how do
Speaker 1: we fix this? Yeah, this might be a solution. I
Speaker 1: like it. I like it. And that's enough house talk. Yeah,
Speaker 1: enough enough house which that truly is like our favorite channel. Now.
Speaker 1: I have that set up a really on the same
Speaker 1: because the same sung It's got all these free channels
Speaker 1: included H and whatever you turn the TV on, it
Speaker 1: always goes to some default channel, and so I always
Speaker 1: have it set there because I love seeing all these
Speaker 1: home improvement projects. It's like classic Americana. I love it.
Speaker 1: I think most people here talk like this or they
Speaker 1: think about having to do something like this themselves on
Speaker 1: their own home, and they just get bummed out. I
Speaker 1: get stoked. Yeah, you love home promos.
Speaker 2: I'm like most of the people listening who are like,
Speaker 2: let's screw that. They're not terribly interested. But let's move
Speaker 2: on with a Friday flight mass that to talk about
Speaker 2: let's do them home. Let's talk about cars. Turns out
Speaker 2: January is the best time to buy a used car.
Speaker 2: This is according to our friends over at car Edge.
Speaker 2: You know, we have had Ray and Zach on the
Speaker 2: show last year and they provided a lot of great
Speaker 2: advice when it comes to shopping for cars and getting
Speaker 2: the best price. Well, the reasons that January is the
Speaker 2: best time to buy a used car is because there
Speaker 2: are more trade ins on the lot, because you know,
Speaker 2: people upgrading their car, buying the new car, trading in
Speaker 2: their old car in December, that's a popular time to do.
Speaker 2: That makes sense for used cars now in abundance.
Speaker 1: That was one of the things they said was that
Speaker 1: you get a good deal at the end of the month,
Speaker 1: you get a better deal at the end of the quarter.
Speaker 1: You get the best deals at the end of the year. Yeap.
Speaker 2: So if you want to buy a new car, e
Speaker 2: might want to wait eleven and a half months. Within
Speaker 2: Spring actually is typically when people start to look to
Speaker 2: upgrade their used car ride too often because of a
Speaker 2: tax refund cash infusion. So we're in this sweet spot
Speaker 2: where there's an abundance of used cars and not all
Speaker 2: that many people looking. Car prices Obviously they fluctuate according
Speaker 2: to supply and demand, and so supplies high demand isn't
Speaker 2: so basically for.
Speaker 1: Everyone out there.
Speaker 2: If you're like I'm looking for a used car, I
Speaker 2: don't know when I'm going to start, well, now it
Speaker 2: might be the best time actually, and it might even
Speaker 2: be a good time to consider an electric vehicle, specifically
Speaker 2: from rental car company Hurts. They bought Oh yeah, we've
Speaker 2: talked about this before, Maat, but this continues to be
Speaker 2: a problem for them. They bought a ton of Teslas,
Speaker 2: they weren't able to rent them out in the numbers
Speaker 2: that they hoped, and they're even I saw it. I
Speaker 2: think it was in Jelopnik. They're even soliciting people who
Speaker 2: just rent an EV. Now they're telling them at the
Speaker 2: end of the rental period, hey, do you actually want
Speaker 2: to buy this car. Here's what we'll sell it to
Speaker 2: you for. You don't even need to take your things out,
Speaker 2: just to just keep on driving. Really really incredible, Like
Speaker 2: Hurts really wants to get rid of some of these
Speaker 2: Teslas and other evs that they bought. Wow, their loss
Speaker 2: could be your gain. It's at least worth taking a
Speaker 2: look to see. But I mean some of those cars
Speaker 2: are priced at sub twenty thousand dollars. That's not bad
Speaker 2: for like an EV if it's in good condition.
Speaker 1: Absolutely, And it makes sense that they're wanting to unload
Speaker 1: these because like if you think about it. If you
Speaker 1: let's say you're a business traveler and you're just flying
Speaker 1: into a city for the day, You're not thinking about like,
Speaker 1: you don't want to have to learn how to drive
Speaker 1: an EV you don't want to have to learn the
Speaker 1: ins and outs of a tesla if that's not what
Speaker 1: you typically drive. You want something that you're used to.
Speaker 1: You're going to get to work or the office wherever
Speaker 1: you're visiting. I don't know how this works, make your
Speaker 1: sales calls or something like that. You don't don't have
Speaker 1: to find a place to charge. No, Yeah, And when
Speaker 1: it comes to if it is an overnight trip, where
Speaker 1: are you typically staying. Most folks are staying at a hotel,
Speaker 1: but how many of those give you the ability to charge?
Speaker 1: I mean, is not that easy. And this is something
Speaker 1: Kate and I learned firsthand when we went out to Colorado.
Speaker 1: I wanted to try out the tesla and I was like, man,
Speaker 1: it's kind of a pain in the butt actually to
Speaker 1: stay at a condo where I can't charge the thing.
Speaker 1: And we were forced to find the superchargers, which was
Speaker 1: fairly easy, but still budgeting the time to because you
Speaker 1: still have to sit there while it's charging, even on
Speaker 1: a supercharger, and the cost it was just as expensive
Speaker 1: as gasoline. Yeah, and that's why it's better to own.
Speaker 1: It makes a ton of rent. All the advantage is
Speaker 1: being able to drive it home, pulled into your garage
Speaker 1: and do that slow basic charge. That's where the real
Speaker 1: savings come in. Absolutely, No, the real savings is buying
Speaker 1: not a new car but a used car. Because the
Speaker 1: average price of a new car these asual is it's
Speaker 1: still close to fifty thousand dollars, which is it's difficult
Speaker 1: for me to wrap my mind around.
Speaker 2: I want to say, if I'm recalling correctly, is like
Speaker 2: and seventy three dollars average price for a new car
Speaker 2: so expensive.
Speaker 1: Twenty percent of buyers now have a monthly payment of
Speaker 1: one thousand dollars or more. And certainly some of this
Speaker 1: we can blame on inflation, but that's only a part
Speaker 1: of it. Felix Salmon over at Axios. He highlights that
Speaker 1: our tastes they account for most of the price increased.
Speaker 1: We like nice things or less content with compacts in
Speaker 1: sedans than we used to be, and upgrading to the
Speaker 1: suv or upgrading to that truck. It costs dramatically more.
Speaker 1: And so when you're thinking about your next car, just
Speaker 1: keep that in mind. For some folks, a three to
Speaker 1: row shuv maybe it is necessary. But if not, man,
Speaker 1: a smaller car is going to save you a lot
Speaker 1: more money in almost every way as well.
Speaker 2: Yeah, I think that's really important to highlight, Matt. I
Speaker 2: think a lot of it's like that Spider Man meme
Speaker 2: where all the Spider Man are at each other. I
Speaker 2: think it's really easy to point in inflation, but then
Speaker 2: there's a finger pointing back at you, and it's like, well,
Speaker 2: did you have to buy the biggest possible car on
Speaker 2: the planet. And when you're talking about those big SUVs,
Speaker 2: we're typically talking about seventy plus thousand dollars rides. And
Speaker 2: so maybe you need it, maybe you don't, and if
Speaker 2: you don't, you can save a lot of money. And
Speaker 2: this coincides perfectly with something else I saw about the
Speaker 2: amount of space that the average American has in their
Speaker 2: home these days. The number of homes with extra bedrooms
Speaker 2: just hitting all time high. So like we are gluttons
Speaker 2: for space and we're expanding maybe even when we don't need.
Speaker 1: To, or just such a facy rich nation yea, our
Speaker 1: tastes have exceeded our pocket book. That's true, that's right, Yeah,
Speaker 1: and so yes, similar to buying the larger car, that
Speaker 1: extra space is going to cost you big time. Zillow
Speaker 1: estimates that the average three bedroom home costs three hundred
Speaker 1: and thirty six thousand dollars, but the average four bedroom
Speaker 1: home costs four hundred and ninety six thousand dollars. That's
Speaker 1: a more than one hundred and fifty thousand dollars difference,
Speaker 1: which is substantial. And there's nothing wrong with having a
Speaker 1: home office or having a guest room, right, having maybe
Speaker 1: a little bit more room than you need.
Speaker 2: But and especially you know post COVID more people working
Speaker 2: from home, Like I get that you want a separate
Speaker 2: space like that. But given that homes are one of
Speaker 2: our most expensive purchases, it's important to go in eyes
Speaker 2: wide open and know that buying a beastly home, one
Speaker 2: that's maybe larger than you actually need, with space that
Speaker 2: you're not going to put to use very well, it
Speaker 2: comes with financial consequences. And Matt, I think sometimes people
Speaker 2: think about, well, what about when the rare occurrences where
Speaker 2: people are staying at your home yep, or maybe Hey,
Speaker 2: the holidays just finished and you had someone staying at
Speaker 2: your home for four or five days, and you're like, gosh,
Speaker 2: don't want to live through those tight quarters again next
Speaker 2: Christmas when it comes around, Well, maybe think about renting
Speaker 2: that special person in your life, your parents or whoever
Speaker 2: they might be, renting them something around the corner. And
Speaker 2: that is way cheaper you pay for it yourself, even
Speaker 2: how much cheaper is that than renovating, adding on or
Speaker 2: buying a new, bigger house.
Speaker 1: Tens of thousands of dollars. And the same thing is
Speaker 1: true when it comes to to vehicles. Like a common
Speaker 1: thread between silk houses and autos is the fact that,
Speaker 1: like we're planning for these edge case scenarios that rarely happen,
Speaker 1: and we catastrophize what would happen if we were in need? Right,
Speaker 1: and so like I'm thinking of like going back to
Speaker 1: cars and trucks. Folks are like, well, I want to
Speaker 1: have a truck because I want to be able to
Speaker 1: pick up the new refrigerator because we're going to upgrade
Speaker 1: our appliances or whatever. A couple of things here. First off,
Speaker 1: Costco and Home Depot they all deliver. Yeah, so you
Speaker 1: don't even need the truck. Secondly, if you actually do
Speaker 1: need a pickup, well, for you could borrow it. But
Speaker 1: let's say you don't have any friends with trucks. Okay,
Speaker 1: you can still go to home depot and rent the
Speaker 1: stupid truck for twenty bucks for a flatbed. And there's
Speaker 1: a big difference between paying twenty twenty five bucks to
Speaker 1: rent a pickup truck versus financing a seventy five thousand
Speaker 1: dollars decked out whatever fancy pickup truck. That people are
Speaker 1: spending so much money on this.
Speaker 2: And it's I think it's just so easy to feel that,
Speaker 2: especially in the aftermath of a visit like that, and say,
Speaker 2: we got to do something about this house.
Speaker 1: It's getting too tight. But is it really getting too tight?
Speaker 1: Let's just sign up for some payments. Yeah.
Speaker 2: And it's just interesting to see that Americans have gotten
Speaker 2: accustomed to having more space than they actually need. Part
Speaker 2: of that is increasing home sizes, part of that is
Speaker 2: declining family sizes. It's kind of both of those things
Speaker 2: happening simultaneously. But we used to get by with a
Speaker 2: heck of a lot less space in this country, and
Speaker 2: to think, I don't know the twenty five hundred square
Speaker 2: foot house is getting pretty tight from my family of
Speaker 2: three like that. I think that's the phenomenon that you
Speaker 2: and I would love to combat a little here.
Speaker 1: Absolutely, Joel's talk about debt, specifically medical debt, because it's
Speaker 1: no longer going to show up on credit reports, or
Speaker 1: actually will it, Joel, We will see. That's what That's
Speaker 1: what all the headlines are saying. At least, it's another
Speaker 1: political tug of war the outgoing Biden administration. They have
Speaker 1: finalized a rule that is going to end the inclusion
Speaker 1: of all medical debt on credit reports moving forward. We've
Speaker 1: already seen the removal of sub five hundred dollars medical
Speaker 1: bills from being reported to credit bureaus, which has helped
Speaker 1: a lot of folks not have their scores crushed thanks
Speaker 1: to just, you know, a minor bill that they couldn't
Speaker 1: afford to pay, or even maybe that they forgot to pay.
Speaker 1: But this much bigger rule change would mean that medical
Speaker 1: debt of any size can no longer plague people on
Speaker 1: the credit front, and it would impact close to fifteen
Speaker 1: million people according to the CFPB. But I think it
Speaker 1: is unlikely to stick because again of the way that
Speaker 1: we arrived to this rule being implemented. It's not that
Speaker 1: we don't feel for folks who have medical debt, certainly, but.
Speaker 2: And it's not that the system doesn't have meaningful problems
Speaker 2: with sure how medical debt.
Speaker 1: Is, but the way you arrive at solving these problems
Speaker 1: and matters a ton and to say, carte blanche, oh,
Speaker 1: we're going to change the rules. We're going to change
Speaker 1: the standards. As to the idea is that, well, everyone's
Speaker 1: credit score is going to be boosted. But like, think
Speaker 1: about the last time you had, like just think about
Speaker 1: great inflation with teachers. What if a teacher says, hey,
Speaker 1: I'm only going to give a's this semester, Well, guess
Speaker 1: what that A no longer means anything because everybody got
Speaker 1: an A. And so what do colleges then do. They're like, Okay, well,
Speaker 1: we're actually looking for people that have high than A
Speaker 1: four point zero. We're looking for the students out there,
Speaker 1: they have the four point two to four point three
Speaker 1: who are tacking on the ap classes. That's what I
Speaker 1: see happening here is that there's not going to be
Speaker 1: this sort of long term benefit to folks because lenders
Speaker 1: are still going to cover their butts. They're still going
Speaker 1: to find ways to filter through applicants that are out there,
Speaker 1: and they want the best applicants who are looking to
Speaker 1: take loans from banks and credit unilll.
Speaker 2: The other thing is that this might be this might
Speaker 2: not live for very long because it.
Speaker 1: Is assuming the best that it is able to stick
Speaker 1: around for.
Speaker 2: Literally, you know, weeks away from transition to the next presidency,
Speaker 2: the next administration, and this could be overturned and with
Speaker 2: stroke of a pen. So when we don't arrive at
Speaker 2: legislation in the proper way, which is typically through congressional action,
Speaker 2: which they have been loath to work, it seems the
Speaker 2: sort of back and forth politics and legislation that we've seen,
Speaker 2: specifically from executive branches and administrations going back and forth,
Speaker 2: we see more of that, and that means that these
Speaker 2: changes aren't necessarily standing the test of time to stay.
Speaker 1: Yeah.
Speaker 2: Oh, and by the way, we have an episode go
Speaker 2: back and listen in to episode seven sixteen if you
Speaker 2: want to know how to fight back against medical debt again. Oh,
Speaker 2: the system sucks, doctor Virgie. Doctor Virgie, she was wonderful
Speaker 2: and the system is again not consumer friendly. The healthcare
Speaker 2: system the health insurance system and then the reporting of
Speaker 2: health debt to your credit report. But if you want
Speaker 2: to know how to battle that in your life, you
Speaker 2: got to stick up for yourself. Episode seven to sixteen
Speaker 2: is for you. Will link to that in the show
Speaker 2: notes And Matt this brings up too, you're kind of
Speaker 2: getting at maybe how credit scores are becoming less relevant
Speaker 2: if we're not taking into account certain factors for credit reports.
Speaker 2: And I guess the importance of credit scores has been
Speaker 2: widely debated in the personal finance community. Some people think
Speaker 2: that they matter, other people would say that they don't.
Speaker 2: Dave Ramsey in particular, is one of those guys who
Speaker 2: would say, oh, he loves.
Speaker 1: The I love debt score. That's what he calls it.
Speaker 2: Heytes that thing, right, And you and I have said, well, no,
Speaker 2: it's it's not the best thing in the world, but
Speaker 2: it's smart to jump through the hoops to make sure
Speaker 2: that your credit score stays solid. And so this Yahoo
Speaker 2: Finance article detailed why you shouldn't listen to Dave Ramsey's
Speaker 2: advice on living without a credit score, and we wholeheartedly
Speaker 2: agree with it. The credit scoring system is flawed. The
Speaker 2: credit bureaus are error prone and not great at responding
Speaker 2: to your concerns. There was actually another lawsuit just filed
Speaker 2: against TransUnion this week because guess what, they don't deal
Speaker 2: with consumer complaints well at all. And that's phrasing it nicely.
Speaker 2: But at the same time, you know, the game isn't
Speaker 2: all that hard to play once you kind of dig
Speaker 2: into the rules, and not playing the game of trying
Speaker 2: to have a solid credit score makes your life harder.
Speaker 2: You know, not tending to your credit score. It can
Speaker 2: lead to higher mortgage rates, higher insurance costs in most
Speaker 2: states around the country, to not getting a rental that
Speaker 2: you're interested in getting if you know you are. Let's
Speaker 2: say you're trying to go down the street and you say, oh, hey,
Speaker 2: I want to apply to live at this property. Well,
Speaker 2: the landlord might say, I don't know. Your credit score
Speaker 2: is pretty rough. Sorry, you can't live here. So you're
Speaker 2: only harming your self if you're not paying attention to
Speaker 2: your credit score. And we've got resources on how to
Speaker 2: money dot com about how to tend to your credit
Speaker 2: But I think despite what Dave Ramsey says on this,
Speaker 2: we advise caring about your credit score, even though he doesn't.
Speaker 1: Yeah, but it's also possible to pay too much attention
Speaker 1: to your credit score. The Journal documented someone someone who
Speaker 1: is attempting to attain a perfect credit score. He was
Speaker 1: already at eight forty, but guess what, Joel wasn't good enough.
Speaker 1: He wanted the coveted eight fifty, and he achieved it.
Speaker 1: One of those type A folks. I guess, yeah, through
Speaker 1: some trial and air. But dude, this what a hollow victory.
Speaker 1: Talk about like majoring in the minors. Maybe at the
Speaker 1: end of the soul section, I'll ask you what your
Speaker 1: credit score is, but I don't. Honestly, I don't know
Speaker 1: right now. I know you don't know because it doesn't Honestly,
Speaker 1: it doesn't even matter. I was anytime we talk about
Speaker 1: credit score, I know it's good enough, so I'm always curious.
Speaker 1: I'm like, all right, well, actually, where am I sitting
Speaker 1: right now? Probably like maybe I'm guessing I'm like seven eighty.
Speaker 1: I bet you're higher than that. Actually, But there are
Speaker 1: a certain segment of Americans out there who seem to
Speaker 1: be obsessing over the credit score to an unhell healthy degree.
Speaker 1: But the truth is, anything above a seven sixty is fantastic.
Speaker 1: And that's going to get you qualified for the best
Speaker 1: loan terms out there. And so what we would say
Speaker 1: is to it's kind of fun, right if you're just
Speaker 1: like like the way I'm talking about it, be like, oh,
Speaker 1: you just kind of keep an eye on it, and
Speaker 1: it's kind of fun to be like, oh, yeah, actually
Speaker 1: I'm ten points higher than you. But also, don't make
Speaker 1: this slight if that's what you want to compare your friendships,
Speaker 1: like like just some healthy competition, right, Like it makes
Speaker 1: me think of that one time when we're like, all right,
Speaker 1: where do we think Netflix is going to be at
Speaker 1: the end of the year. We never followed up on that. Actually, yeah,
Speaker 1: you remember that. This is like years ago when Netflix
Speaker 1: tanked or whatever, and you and I we had a
Speaker 1: small friendly wager, yeah on Netflix the price of their stock.
Speaker 1: But don't take it too seriously. Don't waste your time
Speaker 1: and energy trying to push your score way up above
Speaker 1: anything that is actually going to move the needle when
Speaker 1: it comes to the kind of loan terms that you
Speaker 1: might be able to qualify for. Yeah, in the case
Speaker 1: of your credit score, good enough is great, agreed. And
Speaker 1: I think if you are kind of wondering where your
Speaker 1: credit score stands. It's a good idea to get the
Speaker 1: picture that you can typically get that from a credit
Speaker 1: card company that you do business with, or you can
Speaker 1: check out credit karma dot com. That's a good place
Speaker 1: to kind.
Speaker 2: Of not just get an idea of what your score is,
Speaker 2: but then you can also they've got like the score
Speaker 2: card that'll help you help highlight the places where you
Speaker 2: can improve your credit. But again, if you're in that
Speaker 2: seven to seventy plus range, don't sweat trying to raise
Speaker 2: it significantly. And it was really interesting to see the
Speaker 2: journey of this guy, Matt, trying to improve his score
Speaker 2: to eight fifty and how much time and effort it took.
Speaker 1: I feel bad for the guy. Yeah, Like, honestly, guess what,
Speaker 1: like as a waste of.
Speaker 2: Time, we only hear so many hours on this earth
Speaker 2: does don't waste it thinking about a perfect credit score.
Speaker 1: As I'm reading through that profile, and just like, dude,
Speaker 1: there's so many better things you could be doing with
Speaker 1: your life, but instead this is the thing that you've
Speaker 1: chosen to obsess over. Yeah, but Joe, we got more
Speaker 1: to get to more Friday Fly, We're gonna get to
Speaker 1: points Purgatory and more. Right after the break our Matt,
Speaker 1: we're back. Now it's time for.
Speaker 2: The ludicrous headline of the week. This one comes from
Speaker 2: the Wall Street Journal and the headline reads, You're invited
Speaker 2: to Wall Street's private party. Say you're busy and more
Speaker 2: and more is being written about alternative assets right now.
Speaker 2: And Jason's Wyke, he's the investment columnist over there at
Speaker 2: the Journal. He had a great piece on why we
Speaker 2: should kind of give him the heisman, right, we don't
Speaker 2: want alternative assets in our lives, in our portfolios, even
Speaker 2: though financial advisors are pushing these alternative investments on us
Speaker 2: as individual investors more than ever before. And there are
Speaker 2: all sorts of ways now we've documented this on the
Speaker 2: show in the past, for people, the average person to
Speaker 2: invest that were essentially unavailable to previous generations.
Speaker 1: We talked about.
Speaker 2: And some of that's good, right, like the advent of
Speaker 2: index funds in the seventies, Like that's a beautiful, wonderful
Speaker 2: thing that makes it easier to invest. And then there
Speaker 2: are other ways that you can easily invest, but in
Speaker 2: products that might not makes sense for you, So wine, whiskey,
Speaker 2: real estate. Those are some of the alternative assets that
Speaker 2: people can now invest in. There's invest in farmland, farmland
Speaker 2: anchor Trader Veno vest. I mean, there's all of these
Speaker 2: websites out there that make it easy to invest in
Speaker 2: all these different things.
Speaker 1: Hey, why don't you.
Speaker 2: Diversify your portfolio and invest in some farmland or some
Speaker 2: art right stuff like that. And then it even got
Speaker 2: pretty wild with NFTs and meme coins over the last
Speaker 2: few years. And you can do this all like from
Speaker 2: the comfort of your home and your PJS on a
Speaker 2: slick looking website. So I think people are more tempted
Speaker 2: or even just like some of the partial real estate
Speaker 2: investing websites. Matt the crowdfunding real estate website. That's another
Speaker 2: one that attracts people, and the accessibility I think makes
Speaker 2: it seem normal or even good. But then these alternative
Speaker 2: investment products come with often in small type, often in
Speaker 2: places that are hard to find, significantly higher fees, yeah,
Speaker 2: lots more risk, significantly less liquidity. And so I'm with
Speaker 2: Jason's wig here. We don't believe that anybody out there
Speaker 2: listening needs any alternative investments in their life in order
Speaker 2: to be diversified, in order to build wealth wisely. In
Speaker 2: In fact, I think a lot of people you're maybe
Speaker 2: majoring on the miners, if you like, try to put
Speaker 2: too much your focus in. They're kind of like trying
Speaker 2: to get that perfect credit score. It's just not important.
Speaker 1: Agreed. One small caveat is real estate, because that is
Speaker 1: something that you and I are invested in, but not
Speaker 1: this sort of crowdfunded approach to investing in real estate
Speaker 1: I do. I think it's not even something that we
Speaker 1: talk about all that all that often these days, Like
Speaker 1: when's the last time you bought a house, Joel, Yeah,
Speaker 1: it's been a minute. Like I haven't purchased a home
Speaker 1: in the twenty twenties because well, my personal home. But
Speaker 1: when it comes to an investment in real estate, because
Speaker 1: the deals were back in the teams harder to come
Speaker 1: by now. And if you already have a property, that's fine,
Speaker 1: it's sure hang onto it, especially if you've got that
Speaker 1: low interest rate mortgage rate baked into it. But for
Speaker 1: somebody who is interested in growing their wealth right now
Speaker 1: and they're just getting started, and that is not an
Speaker 1: area I would say that you should be focusing on
Speaker 1: unless it's something that you're really really passionate about it.
Speaker 2: And I think there is a difference in my mind,
Speaker 2: between owning long term real estate that you invest in
Speaker 2: locally and you self manage or renting out a portion
Speaker 2: of your house right short term rental style. There's a
Speaker 2: big difference between that and between some of these alternative
Speaker 2: investment styles, because there are advantages you can have as
Speaker 2: a local real estate investor that you don't have when
Speaker 2: you're investing via some of these other newfangled websites. And yeah,
Speaker 2: there are higher fees in real estate, but there are
Speaker 2: also advantages to real estate too that the index fund
Speaker 2: investor just doesn't quite have. But yeah, I think that's
Speaker 2: that's like the one exception I'll give to this. I
Speaker 2: just don't I don't wrangle regular real estate investing, owning
Speaker 2: other owning, owning more properties into the alternative investment sphere.
Speaker 2: I think I'm talking about all these other things or
Speaker 2: all these digital ways to invest that seem super sexy,
Speaker 2: and they talk about and they tout magnified returns by
Speaker 2: investing in art or watches or whatever, and hey, look
Speaker 2: at what's happened with like watch valueations matt over the
Speaker 2: past few years. Those have gone down. And it's been
Speaker 2: said that, oh, Rolex watches, they only go up in value.
Speaker 2: That's not so that's.
Speaker 1: Not the case necessarily, the case stock market's been going up,
Speaker 1: the value of your Rolex watch has gone down. Yeah,
Speaker 1: I will say, if investing more is one of your
Speaker 1: big goals for twenty twenty five, be careful which brokerage
Speaker 1: firm that you choose to go with, because more of
Speaker 1: the different uh, you know, as we're talking about apps here,
Speaker 1: there are a lot more investment apps that are more
Speaker 1: like traditional investing apps, but they are incentivizing risk these
Speaker 1: days more than some of the big ones that we
Speaker 1: are actually fans of. So it started with robin Hood,
Speaker 1: of course, but they've actually gotten better since their inception,
Speaker 1: while other newer companies have leaned harder in the gamification direction,
Speaker 1: and new research shows that it is particularly effective at
Speaker 1: getting younger investors with less investing knowledge to trade more frequently,
Speaker 1: which of course leads to worse results. There's a study
Speaker 1: that showed that the best performing portfolios were the unfortunately,
Speaker 1: were those of people who had died and they hadn't
Speaker 1: been touched. Because you're not getting in there and you're
Speaker 1: not messing, you're not buying and selling at inopportune times, I.
Speaker 2: Feel like you should reiterate that, because every time I
Speaker 2: see that, it's it just it's kind of baffling. But
Speaker 2: it makes a lot of sense, right that, like people
Speaker 2: who aren't living can't tweak their portfolio so they do better.
Speaker 1: The less active of an investor you are, the better
Speaker 1: your results are going to be. And so instead of
Speaker 1: realizing your potential behavioral biases and you know, and helping out,
Speaker 1: some of these newer apps out there and some of
Speaker 1: these newer platforms are exploiting your behavioral issues, your biases
Speaker 1: because it's better for their bottom line to get you
Speaker 1: to trade more often. And this is why the more
Speaker 1: boring companies that we have always recommended, like Vanguard and
Speaker 1: Fidelity are still great. And it's almost like a ride
Speaker 1: of passage for younger investors to get sort of distracted
Speaker 1: by the shiny, the novel, the sexy, the new, which
Speaker 1: I almost want to be okay with because when you're younger,
Speaker 1: you've got less money at risk, like the stakes are lower,
Speaker 1: And part of me says, well, better to learn these
Speaker 1: lessons now while you're younger with fewer zeros than you
Speaker 1: know twenty thirty years from now. But of course The
Speaker 1: reason we have the show is for people to learn
Speaker 1: from our mistakes, to learn from other people, Like why
Speaker 1: make the same mistakes that your parents have made when
Speaker 1: you can learn your lessons like in a secondhand way.
Speaker 1: But I think there are still going to be some
Speaker 1: folks out there who might have to experience it.
Speaker 2: Well, that's exactly what you marry. In our conversation with
Speaker 2: Josh Brown, that's that was one of the things he
Speaker 2: said was like, no, people should be like given the
Speaker 2: chance to to screw up. And I think people should
Speaker 2: certainly be given the chance to screw up, but I
Speaker 2: wouldn't it be better to avoid it completely and to yeah,
Speaker 2: learn from other people's beats, right, Yeah, So I agree,
Speaker 2: that's why we have the show.
Speaker 1: I guess that's what we're trying to advocate for. People
Speaker 1: are still gonna meme, bros. Are still gonna meme, you know,
Speaker 1: Like folks are still going to go out there and
Speaker 1: do the dumb things and.
Speaker 2: If they want to do And we talked about like
Speaker 2: maybe sandboxing too some of your investing as well, Like
Speaker 2: if you have this die hard desire to trade or
Speaker 2: to speculate on individual.
Speaker 1: Stocks, do you want to have a little bit of fun.
Speaker 2: Yeah, that's okay, but just do it with a small
Speaker 2: portion of your portfolio and make sure you can lose
Speaker 2: sleep or you won't lose sleep at night if you
Speaker 2: lose the money that you're training inside of that account.
Speaker 2: But I would siphon that off and do it somewhere
Speaker 2: else and do the boring thing with the vast majority
Speaker 2: because it's the tried and true way to build wealth
Speaker 2: and it's far less mentally taxing. So yeah, let's talk
Speaker 2: about credit cards for a second. For the extreme credit
Speaker 2: card nerds, getting the right reward credit card can be
Speaker 2: massively beneficial. And Matt I think about hearing from listeners
Speaker 2: the exotic trips that they've taken, the cool places they've gone,
Speaker 2: and how much money they've saved because they've just played
Speaker 2: the game. They know the system, and they've just changed
Speaker 2: essentially the method of their payment and it's led to
Speaker 2: some pretty cool perks. And we've talked about that on
Speaker 2: the show a reasonable amount, most recently in episode eight
Speaker 2: ninety nine with our friend Chris Hutchins from the podcast
Speaker 2: All the Hacks. Well, there was this new survey from
Speaker 2: bankrate and it made me think twice about rewards credit cards,
Speaker 2: or at least want to add some nuance into the conversation.
Speaker 2: What Bankrate found was that the average person, they're not
Speaker 2: paying much attention to the credit cards they are using
Speaker 2: and to the points that they're racking up. Almost a
Speaker 2: quarter of folks ended up not redeeming any of their
Speaker 2: rewards in the past year, so they hey, maybe they
Speaker 2: accumulated their rewards, but they didn't spend any of them.
Speaker 2: I forgot about them, Yeah, exactly. I think that's a
Speaker 2: big part of it. It's almost like the gift card
Speaker 2: that you were given a couple of years ago. It's
Speaker 2: lost somewhere or it's been forgotten about, and I think
Speaker 2: it could be fun to play the game. It can
Speaker 2: be really cool to accrue those travel points, but the
Speaker 2: truth is using them for the cost of the trip.
Speaker 2: That's the real joy. I mean, if you miss out
Speaker 2: on that connection, what are you actually doing. Plus the
Speaker 2: longer those points linger, the less valuable they become. And
Speaker 2: travel rewards, Man, they might sound great in theory, but
Speaker 2: what do they look like in practice in your life.
Speaker 2: I think it's a good question to ask, because it
Speaker 2: turns out, based on this Bankrate survey, cash back cards
Speaker 2: were the crowd favorites, and although yeah, they might not
Speaker 2: provide the best theoretical return for your spending, they might
Speaker 2: be the best real life choice for a lot of people.
Speaker 2: Because the credit card rewards the best ones that you
Speaker 2: can get are the ones that you're actually going to use.
Speaker 1: Absolutely, yeah, where are you going to actually follow through
Speaker 1: and do the dang thing. But having said, be careful
Speaker 1: how you're using your credit cards, especially if you are
Speaker 1: a newer listener, or if you've had a history of
Speaker 1: overspending or getting into consumer debt. But either way, check
Speaker 1: out the Golden Rules of Plastic. This is an article
Speaker 1: we've got up on the site. We don't want poor
Speaker 1: usage of credit cards to increase your debt load or
Speaker 1: to harm your credit score. We talked about earlier The
Speaker 1: Financial Times they just published an article about how US
Speaker 1: credit card defaults. They're actually at a fifteen year high,
Speaker 1: which isn't great macro data or on an individual micro level. Basically,
Speaker 1: the lender doesn't think that the debt will be repaid,
Speaker 1: so they write it off. That is what it means
Speaker 1: when credit card debt is in default. We've discussed how
Speaker 1: paying off debt, how it's basically like this apex goal
Speaker 1: for Americans and we love that, especially as interest rates
Speaker 1: have climbed. But never having a balance, well, that is
Speaker 1: crucial to smart credit card use to be able to
Speaker 1: completely avoid it all together or to get out of
Speaker 1: that debt. If you have acquired some we will link
Speaker 1: to that Golden Rules of Plastic article in the show
Speaker 1: notes as well. But if you need some additional help,
Speaker 1: we would well, we would love to hear from you.
Speaker 1: Send us a voice memo. We'd love to hear the
Speaker 1: particulars of your personal situation. But if you are someone
Speaker 1: who is like no, no, no, guys, I can't wait
Speaker 1: for you to maybe get back to me on a
Speaker 1: show off in the future. I need help now. If so,
Speaker 1: we would recommend to reach out to an organization like
Speaker 1: Money Management International that provides credit card debt counseling. We
Speaker 1: want consumer debts to be something that is in the
Speaker 1: rear view mirror for you.
Speaker 2: And I think I just saw this today this morning, Matt,
Speaker 2: when I was looking at my email, and the number
Speaker 2: is ticked up. The percentage of people who use credit
Speaker 2: cards who don't pay them off on time infil every month,
Speaker 2: that is just going up. That number, so I think
Speaker 2: it's like forty eight percent of families now have some
Speaker 2: sort of recurring credit card debt, and that with a
Speaker 2: high interest rate attached. That is putting you behind in
Speaker 2: your finances. It's like running on a treadmill, but like
Speaker 2: have you seen the treadmills for the guy who runs
Speaker 2: marathons in like two hours and they try to put
Speaker 2: people on it like the.
Speaker 1: Size of a room, like a small regain, and it's like,
Speaker 1: can you run out the pace? And you can't. I couldn't.
Speaker 2: I couldn't run it for eight seconds, I don't think,
Speaker 2: and people just fall flat on their face because that's
Speaker 2: how fast he runs. But he runs that fast for
Speaker 2: twenty six miles. That's what like perpetual credit card debt
Speaker 2: is doing to your finances.
Speaker 1: The algorithm knows you, Joel, Yes it does. Twenty twenty
Speaker 1: twenty one, Joel would have been like, wait what I'm
Speaker 1: being fed treadmill videos of I give had way too
Speaker 1: much running the world record marathon runner. It's pretty ridiculous.
Speaker 1: I love it.
Speaker 2: Well. We talked about the downsides of buying gift cards
Speaker 2: ahead of Christmas, and I have more hesitation, I think
Speaker 2: than you do. You you you're more leisse fair about
Speaker 2: gift cards and I yeah, let people make their mistakes, right,
Speaker 2: I won't be able to think twice. Although there were
Speaker 2: some good discounts out there that made gift cards cheaper,
Speaker 2: which we're down with. Let mean, I think about the
Speaker 2: annual Target ten percent off gift cards sale. We didn't
Speaker 2: talk about it on the show, but it's usually kind
Speaker 2: of of after Black Friday before Christmas, and if you're
Speaker 2: a big time Target chopper, hey go get that discount,
Speaker 2: but just remember to not be a spillage statistic. And
Speaker 2: spillage is when gift cards linger for months or for
Speaker 2: years without being spent. And this is great for retailers
Speaker 2: because they hey, get they got the money in their
Speaker 2: pocket already, they sold the gift card, and then if
Speaker 2: that gift card never gets presented, that's cashing their in
Speaker 2: their pockets. But it's important for you to not be
Speaker 2: that statistic and to spend the money because, as we've documented,
Speaker 2: there's no guarantee that the store you have a gift
Speaker 2: card for sticks around for forever.
Speaker 1: It's right if you're a TGI Fridays was a Fridays Yeah,
Speaker 1: that was the last one.
Speaker 2: But this has happened at many different times, right where
Speaker 2: a store is just going out of business and you're like,
Speaker 2: wait a second, or my gift cards worthless and they
Speaker 2: might be. So make a plan to spend your gift
Speaker 2: cards quickly, like let's say in the first quarter of
Speaker 2: twenty twenty five, or another option. If you have a
Speaker 2: gift card and you're like, I'm never using that. I
Speaker 2: don't really like this retailer. Why did ant Edna give
Speaker 2: it to me? Use a site like card cash dot com.
Speaker 2: You can sell a gift card online. You're gonna get
Speaker 2: you know, depending on where it's two pennies on the
Speaker 2: dollar or let's say sixty cents on the dollar or
Speaker 2: something like that. But getting something is better than getting nothing.
Speaker 2: Just I think the key here is to not let
Speaker 2: your gift cards languish or get lost.
Speaker 1: That's right. Actually, have you continue to use the costco
Speaker 1: instacrt gift card hacked? Uh?
Speaker 2: I will say they on the online purchases they limit
Speaker 2: two Instacard gift card purchases per fourteen days.
Speaker 1: Oh really?
Speaker 2: Yeah, but then so I had to I ran back
Speaker 2: into the store to get a couple more. But yeah,
Speaker 2: it's working out well for me. So far, I'm still
Speaker 2: as a hoop.
Speaker 1: That you're willing to jump through for sure, give that
Speaker 1: sweet discount. Well that's a situation where it totally makes
Speaker 1: sense to get the gift card. Dreda. I'm not anti
Speaker 1: gift cards.
Speaker 2: I'm just anti gift cards going to waste, Yeah, going
Speaker 2: to waste, or I prefer for you to get them
Speaker 2: at a lower price.
Speaker 1: Well, that's gonna be it for this episode. We hope
Speaker 1: everyone has a fantastic weekend that you stay warm out there.
Speaker 1: We'll see back here on Monday with a fresh ask
Speaker 1: how to Money episode. Head over to the website. Specifically,
Speaker 1: check out our credit card tool if you are looking
Speaker 1: for a credit card that aligns with how it is
Speaker 1: that you spend your money, or specifically the kind of
Speaker 1: rewards that you're looking to garner from your credit card.
Speaker 1: You can sort it buy airline, you can sort it
Speaker 1: buy business cards, personal cards, cash back, and of course
Speaker 1: you can find that at how to money dot com.
Speaker 1: Forward slash credit card tool. Joel, it's gonna be it
Speaker 1: for this one, buddy. Until next time, Best Friends Out,
Speaker 1: Best Friends Out,