1 00:00:00,120 --> 00:00:02,880 Speaker 1: Welcome to How the Money. I'm Joel, I'm Matt, and 2 00:00:02,960 --> 00:00:24,880 Speaker 1: today we are answering your listener questions. You know what, buddy, 3 00:00:24,880 --> 00:00:27,360 Speaker 1: We've got listener questions to tackle today. We've got five 4 00:00:27,520 --> 00:00:30,200 Speaker 1: voice memos to get to that have been sent our way. 5 00:00:31,040 --> 00:00:33,080 Speaker 1: We've got a listener and she's starting to have the 6 00:00:33,120 --> 00:00:36,919 Speaker 1: problem of being able to afford some expensive family vacations. 7 00:00:36,920 --> 00:00:39,360 Speaker 1: She wants to know how to handle that. Another listener 8 00:00:39,560 --> 00:00:42,920 Speaker 1: is wondering, by paying off his credit cards too soon, 9 00:00:43,040 --> 00:00:45,080 Speaker 1: does that mean that he's missing out on some of 10 00:00:45,080 --> 00:00:48,479 Speaker 1: the different rewards that he is entitled to. And then 11 00:00:48,520 --> 00:00:52,120 Speaker 1: another listener is wanting to know the optimal way to 12 00:00:52,360 --> 00:00:54,880 Speaker 1: pay more down on his mortgage every single month in 13 00:00:54,960 --> 00:00:57,280 Speaker 1: order to you know, get rid of that loan a 14 00:00:57,320 --> 00:00:59,520 Speaker 1: little bit sooner. But we've got those three plus a 15 00:00:59,560 --> 00:01:02,040 Speaker 1: few others during this episode. Yeah, hit them all up. 16 00:01:02,080 --> 00:01:04,000 Speaker 1: And by the way, it's a yeah, it's a how 17 00:01:04,080 --> 00:01:05,760 Speaker 1: to Money Monday, which I did. I think you should 18 00:01:05,760 --> 00:01:08,080 Speaker 1: be listening if on Mondays every Monday, right, we all 19 00:01:08,080 --> 00:01:10,199 Speaker 1: sometimes I like to say, how to Monday? How to Monday? 20 00:01:10,319 --> 00:01:13,160 Speaker 1: That's what's an ask? How to Monday? Episode? We you 21 00:01:13,160 --> 00:01:15,600 Speaker 1: can just change the name of our podcast. It's always 22 00:01:15,640 --> 00:01:17,959 Speaker 1: fun to tackle listener questions. But before we get to those, Matt, 23 00:01:18,040 --> 00:01:21,840 Speaker 1: I wanted to quickly mention something my little sister is 24 00:01:21,840 --> 00:01:24,600 Speaker 1: doing to save money. I hadn't really thought about before 25 00:01:24,680 --> 00:01:27,800 Speaker 1: Aunt Sally, and so they just moved into a new place, 26 00:01:28,400 --> 00:01:31,160 Speaker 1: I think in the fall, into a new apartment in 27 00:01:31,200 --> 00:01:33,679 Speaker 1: midtown Atlanta. This is her and her husband yep as 28 00:01:33,720 --> 00:01:36,080 Speaker 1: they yep. The two. By the way, I'll say, your sister, 29 00:01:36,360 --> 00:01:39,240 Speaker 1: if anybody out there is wandering, Joel's sister looks exactly 30 00:01:39,280 --> 00:01:41,280 Speaker 1: like Jel, just with longer hair. Yeah, if I put 31 00:01:41,280 --> 00:01:43,680 Speaker 1: a wig on, we would look the same, like scarily 32 00:01:43,680 --> 00:01:45,319 Speaker 1: the similar if he's like six inches shorter than me, 33 00:01:45,360 --> 00:01:48,080 Speaker 1: which is still tall for females. Yes, But so I 34 00:01:48,160 --> 00:01:49,920 Speaker 1: was like, oh, yeah, well, when it comes to renewal time, 35 00:01:49,920 --> 00:01:51,400 Speaker 1: you guys are gonna stay put. You like it there, 36 00:01:51,520 --> 00:01:53,360 Speaker 1: and they're like, we like it a lot, but no, 37 00:01:53,520 --> 00:01:55,680 Speaker 1: we'll move for sure. And I was like, oh, interesting, Okay, 38 00:01:55,720 --> 00:01:58,040 Speaker 1: why are you gonna move for sure? And they said, well, 39 00:01:58,480 --> 00:02:02,560 Speaker 1: because of all the new apartments being built around us. 40 00:02:03,200 --> 00:02:07,720 Speaker 1: These new apartment buildings are often offering just ridiculous incentives 41 00:02:07,800 --> 00:02:09,880 Speaker 1: for you to come over there where it is and 42 00:02:09,960 --> 00:02:12,040 Speaker 1: leave your current place. And so my brother in law, 43 00:02:12,080 --> 00:02:14,239 Speaker 1: he said, we'll probably get two months worth of free 44 00:02:14,280 --> 00:02:17,280 Speaker 1: rent for moving. And when you're talking about something like 45 00:02:17,280 --> 00:02:20,239 Speaker 1: a twenty five hundred dollars a month apartment, that's a 46 00:02:20,280 --> 00:02:22,639 Speaker 1: lot of money. It's five grand, right, decent change, right, Yeah, 47 00:02:22,639 --> 00:02:24,120 Speaker 1: as long as it doesn't cost you more than five 48 00:02:24,160 --> 00:02:25,919 Speaker 1: thousand to move, right, And so well, that's the thing. 49 00:02:25,919 --> 00:02:28,760 Speaker 1: They're hyper minimalist, so they have very few possessions. They 50 00:02:28,800 --> 00:02:30,880 Speaker 1: just like throw on their backpack and walk over. They're 51 00:02:30,880 --> 00:02:33,600 Speaker 1: like done, pretty much, just got done, moving in pretty much. 52 00:02:33,600 --> 00:02:36,799 Speaker 1: It's kind of insane how little they own. And so yeah, 53 00:02:36,840 --> 00:02:39,359 Speaker 1: they prioritize travel, they prioritize owning just a few things. 54 00:02:39,440 --> 00:02:41,400 Speaker 1: And this is one of those ways in which they 55 00:02:41,440 --> 00:02:44,280 Speaker 1: can move right down the street to another apartment and 56 00:02:44,480 --> 00:02:46,400 Speaker 1: save a bunch of money, and so super cool. I 57 00:02:46,440 --> 00:02:48,919 Speaker 1: don't know how replicable this is. It depends on where 58 00:02:49,000 --> 00:02:51,440 Speaker 1: you live and how much crap you got, yeah, how 59 00:02:51,520 --> 00:02:53,120 Speaker 1: much crap you got, and how many new apartments are 60 00:02:53,160 --> 00:02:54,720 Speaker 1: being built. But this is one of those things where 61 00:02:55,040 --> 00:02:57,480 Speaker 1: you're not as likely if you stay loyal, to get 62 00:02:57,520 --> 00:02:59,400 Speaker 1: a major discount on rent. If they say, yeah, we're 63 00:02:59,400 --> 00:03:01,280 Speaker 1: going to stay put, Hey can you match this offer, 64 00:03:01,560 --> 00:03:04,000 Speaker 1: that apartment complex is going to say Nope, no, can do. 65 00:03:04,360 --> 00:03:06,000 Speaker 1: So the only way in which you're just going to 66 00:03:06,040 --> 00:03:09,280 Speaker 1: score the deal is to actually move and find somewhere 67 00:03:09,320 --> 00:03:12,360 Speaker 1: else to live that's offering this sweetened centim. So, yeah, 68 00:03:12,440 --> 00:03:14,079 Speaker 1: just a news to anybody out there. I don't know. 69 00:03:14,080 --> 00:03:15,760 Speaker 1: If there's a new apartment in here by where you 70 00:03:15,800 --> 00:03:17,320 Speaker 1: live and you're like, oh, yeah, I'd like to test 71 00:03:17,360 --> 00:03:19,800 Speaker 1: that one out. Oftentimes to try to get tenants in 72 00:03:19,840 --> 00:03:22,119 Speaker 1: the door, they'll offer this thing. And so if they're 73 00:03:22,120 --> 00:03:23,760 Speaker 1: being built at the same rate they're being built in 74 00:03:23,880 --> 00:03:26,840 Speaker 1: midtown Atlanta, you can you can like basically do this 75 00:03:27,240 --> 00:03:30,760 Speaker 1: use this recipe almost every year to suity to save 76 00:03:30,800 --> 00:03:32,880 Speaker 1: a lot of money. I like it's a good, good tactic. 77 00:03:32,880 --> 00:03:35,720 Speaker 1: It's a good approach, especially if you are into being 78 00:03:35,720 --> 00:03:37,760 Speaker 1: the first person to ever live in a place. I mean, 79 00:03:38,480 --> 00:03:40,360 Speaker 1: I've never lived in a brand new house before, So 80 00:03:40,400 --> 00:03:43,240 Speaker 1: the idea of moving into units or an apartment or 81 00:03:43,280 --> 00:03:46,360 Speaker 1: a house that has never been like nobody else has 82 00:03:46,440 --> 00:03:48,280 Speaker 1: used that toilet before, right, I'm going to use it. 83 00:03:48,680 --> 00:03:51,440 Speaker 1: Well all the new amenities too, I mean yeah cool, 84 00:03:52,040 --> 00:03:54,920 Speaker 1: Oh my gosh, but they are incredibly nice. I remember 85 00:03:54,920 --> 00:03:58,320 Speaker 1: one the last place they live had a speakeasy basically, 86 00:03:58,520 --> 00:04:00,720 Speaker 1: so it was like India apartment, not in the apartment, 87 00:04:00,720 --> 00:04:02,520 Speaker 1: but like in the main quarters or whatever, in the 88 00:04:02,560 --> 00:04:04,560 Speaker 1: main room. So there's like some ping pong out here, 89 00:04:04,720 --> 00:04:08,280 Speaker 1: like right next to the pool, but there was this, yeah, 90 00:04:08,280 --> 00:04:10,280 Speaker 1: exactly basically, And I'm back at this one closet. Okay, 91 00:04:10,280 --> 00:04:12,600 Speaker 1: apartments are getting too fancy. This is ridiculous. Oh I 92 00:04:12,680 --> 00:04:15,360 Speaker 1: love it. That's awesome. But yeah, that's a good piece 93 00:04:15,400 --> 00:04:17,599 Speaker 1: of advice. Treat your apartment building sort of like you 94 00:04:17,600 --> 00:04:20,640 Speaker 1: would your car insurance. Don't stay loyal shopping around. But 95 00:04:21,040 --> 00:04:22,680 Speaker 1: let's get to the beer you and I are gonna 96 00:04:22,800 --> 00:04:24,720 Speaker 1: enjoy that we're gonna share during this episode. This is 97 00:04:24,760 --> 00:04:27,800 Speaker 1: a double cloud and not surprisingly, this is a double 98 00:04:27,800 --> 00:04:31,159 Speaker 1: ipa by Newpark Brewing. Another one given to the show 99 00:04:31,200 --> 00:04:34,000 Speaker 1: by listener Matthew. And by the way, he doesn't spell 100 00:04:34,040 --> 00:04:35,599 Speaker 1: it like he spelled Matthew my name. He spells it 101 00:04:36,080 --> 00:04:39,080 Speaker 1: with an I e U. It's the more like is 102 00:04:39,120 --> 00:04:41,560 Speaker 1: that the more Europeans toy toty version. I think, Yeah, 103 00:04:41,600 --> 00:04:45,400 Speaker 1: he's more highbrow than you, which doesn't take much. That's 104 00:04:45,480 --> 00:04:47,680 Speaker 1: very true. Yeah, all right, let's get to the ask 105 00:04:47,760 --> 00:04:50,560 Speaker 1: how the Money questions for today, Matt. This is anybody 106 00:04:50,560 --> 00:04:51,920 Speaker 1: out there, by the way, if you've got a money 107 00:04:51,960 --> 00:04:53,680 Speaker 1: question you want Matt and I attackle, we would love 108 00:04:53,960 --> 00:04:56,200 Speaker 1: to take it on an upcoming episode. Just go to 109 00:04:56,240 --> 00:04:58,640 Speaker 1: how to money dot com slash ask. We've got simple 110 00:04:58,680 --> 00:05:01,680 Speaker 1: instructions there for you to record your question send it 111 00:05:01,680 --> 00:05:03,359 Speaker 1: our way so we can hopefully take it, you know, 112 00:05:03,640 --> 00:05:05,520 Speaker 1: in a couple of weeks on the show. Yeah. But 113 00:05:05,960 --> 00:05:07,479 Speaker 1: let's get to the first one, Mat. This one is 114 00:05:07,520 --> 00:05:11,000 Speaker 1: from a listener who thinks her family vacations are getting 115 00:05:11,080 --> 00:05:13,400 Speaker 1: a little too expensive. They're getting out of hand. Hey, 116 00:05:13,480 --> 00:05:16,960 Speaker 1: Joel and Matt. I'm Tiffany from North Carolina. I wanted 117 00:05:16,960 --> 00:05:20,320 Speaker 1: to get your opinion on this. My family is spending 118 00:05:20,360 --> 00:05:23,440 Speaker 1: too much on vacations. We used to just do one 119 00:05:23,440 --> 00:05:26,159 Speaker 1: beach trip a year, but it seems like now we're 120 00:05:26,200 --> 00:05:29,440 Speaker 1: going on a trip for every family occasion. I love 121 00:05:29,480 --> 00:05:31,839 Speaker 1: my family time, but it's too expensive for me to 122 00:05:31,880 --> 00:05:35,400 Speaker 1: go on all the family trips. I'm single income, my 123 00:05:35,480 --> 00:05:38,280 Speaker 1: family's pretty small, so when we split the costs, it's 124 00:05:38,320 --> 00:05:42,040 Speaker 1: still expensive. At least it is for me right now. 125 00:05:42,160 --> 00:05:44,720 Speaker 1: I'm trying to save up money for some home improvements 126 00:05:44,800 --> 00:05:46,880 Speaker 1: and a few trips with some friends this year, some 127 00:05:47,400 --> 00:05:49,720 Speaker 1: kind of hesitant to budget a thousand dollars for a 128 00:05:49,800 --> 00:05:53,120 Speaker 1: cruise for my nephew's birthday or a trip to see 129 00:05:53,160 --> 00:05:55,600 Speaker 1: my second cousin this summer that will cost me about 130 00:05:55,600 --> 00:05:58,120 Speaker 1: five hundred dollars from my share, and a few more 131 00:05:58,160 --> 00:06:01,040 Speaker 1: trips that my family wants to plan this year. I've 132 00:06:01,040 --> 00:06:04,160 Speaker 1: suggested small get togethers at one of our houses instead 133 00:06:04,320 --> 00:06:07,039 Speaker 1: or a staycation, but my family is set on these 134 00:06:07,080 --> 00:06:10,240 Speaker 1: destination trips. I don't want to say no to family 135 00:06:10,240 --> 00:06:12,919 Speaker 1: time or making memories, but it might just have to 136 00:06:13,400 --> 00:06:16,160 Speaker 1: Any thoughts on how to handle this, Thanks so much 137 00:06:16,200 --> 00:06:19,279 Speaker 1: and love the show. Oh, it seems like Tiffany's stuck 138 00:06:19,320 --> 00:06:22,600 Speaker 1: between a rock and a hard place, Because, yes, destination 139 00:06:22,720 --> 00:06:26,280 Speaker 1: trips vacations like that can definitely get expensive. They don't 140 00:06:26,320 --> 00:06:28,920 Speaker 1: have to be expensive, but it sounds like they are 141 00:06:28,960 --> 00:06:30,760 Speaker 1: definitely getting that way for this family. Sounds like maybe 142 00:06:30,760 --> 00:06:34,440 Speaker 1: they're experiencing some vacation lifestyle creep, Like maybe they started 143 00:06:34,440 --> 00:06:36,560 Speaker 1: out kind of reasonable and now Tiffany's all of a 144 00:06:36,560 --> 00:06:39,000 Speaker 1: sudden like waiting what's what's going on? Everybody got a 145 00:06:39,000 --> 00:06:40,760 Speaker 1: bunch of money that I don't. Sometimes it's a case 146 00:06:40,800 --> 00:06:43,000 Speaker 1: of like one is fun, then like ten must be 147 00:06:43,040 --> 00:06:46,279 Speaker 1: even better, but it becomes prettybly expensive for other folks, 148 00:06:46,320 --> 00:06:47,760 Speaker 1: you know, Like I almost feel like this could be 149 00:06:47,800 --> 00:06:51,320 Speaker 1: considered a frugal versus cheap because, like, I'm guessing that 150 00:06:51,360 --> 00:06:54,320 Speaker 1: there's a chance that Tiffany's family Mike think that she's 151 00:06:54,360 --> 00:06:56,359 Speaker 1: actually being cheap by not showing out the money that 152 00:06:56,360 --> 00:06:58,040 Speaker 1: it would take to make all of these trips happen. 153 00:06:58,200 --> 00:07:00,680 Speaker 1: But I definitely appreciate the thoughtful us that she is 154 00:07:00,720 --> 00:07:03,040 Speaker 1: giving to her finances. Yeah, I mean you got to, right, 155 00:07:03,080 --> 00:07:05,640 Speaker 1: I mean, there's it's true, there's all the sort of 156 00:07:05,680 --> 00:07:08,279 Speaker 1: things out there clawing for our money. We talked not 157 00:07:08,320 --> 00:07:10,600 Speaker 1: too long ago on a Friday flight about retailer tricks 158 00:07:10,640 --> 00:07:12,040 Speaker 1: and how they're trying to part us from our money. 159 00:07:12,080 --> 00:07:14,720 Speaker 1: They're using psychological tools to try to get us to 160 00:07:14,760 --> 00:07:16,920 Speaker 1: spend more than we otherwise would, And this is one 161 00:07:16,960 --> 00:07:19,360 Speaker 1: of those other things. It seems more benign, and it 162 00:07:19,440 --> 00:07:21,520 Speaker 1: seems more like, well, we should be funnily our money 163 00:07:21,560 --> 00:07:23,920 Speaker 1: more in this direction. But we've all got kind of 164 00:07:24,040 --> 00:07:27,080 Speaker 1: individual priorities that we have with our personal finances. It 165 00:07:27,080 --> 00:07:29,280 Speaker 1: sounds like Tiffany, she wants to go on these family vacations, 166 00:07:29,480 --> 00:07:32,360 Speaker 1: but it's also pretty expensive and though it comes, it 167 00:07:32,400 --> 00:07:35,240 Speaker 1: comes with trade offs and and you know, it's not 168 00:07:35,280 --> 00:07:37,960 Speaker 1: to say that her family isn't being thoughtful about their finances. 169 00:07:38,160 --> 00:07:40,040 Speaker 1: I think some people might think that, well, they're just 170 00:07:40,080 --> 00:07:43,360 Speaker 1: being spendthrifts, they're being frivolous, they're being irresponsible. Yeah, but 171 00:07:43,400 --> 00:07:44,960 Speaker 1: that's not true. They might be in a different financial 172 00:07:45,000 --> 00:07:47,160 Speaker 1: position at different point in their financial journey and stax 173 00:07:47,200 --> 00:07:49,560 Speaker 1: brackets man, right exactly. I mean that in that way 174 00:07:49,640 --> 00:07:53,160 Speaker 1: maybe yeah, maybe don't assume that that' or they might 175 00:07:53,200 --> 00:07:54,880 Speaker 1: be going into more debt in order to go on 176 00:07:54,880 --> 00:07:57,880 Speaker 1: some of these vacations too. And so it's that's one 177 00:07:57,880 --> 00:07:59,880 Speaker 1: of those things is hard. We don't always have a 178 00:08:00,160 --> 00:08:02,440 Speaker 1: a window behind the scenes for other people how they're 179 00:08:02,440 --> 00:08:05,320 Speaker 1: spending their money and whether or not they just have 180 00:08:05,400 --> 00:08:07,720 Speaker 1: more money than we do or whether they're like making 181 00:08:07,800 --> 00:08:10,040 Speaker 1: a responsible decision. It's true, but I think whichever side 182 00:08:10,080 --> 00:08:12,760 Speaker 1: of the argument you find yourself, gravitate. Gravitating towards both 183 00:08:12,800 --> 00:08:15,400 Speaker 1: parties can intentionally spend their money in a smart way 184 00:08:15,400 --> 00:08:17,600 Speaker 1: that aligns with their ultimate goals, and it could end 185 00:08:17,640 --> 00:08:20,320 Speaker 1: up looking completely different for different people. I think Tiffany 186 00:08:20,360 --> 00:08:23,280 Speaker 1: sees that, right. She's even said that the trips are 187 00:08:23,280 --> 00:08:26,160 Speaker 1: getting expensive, at least for her, and so that's true. Yeah, 188 00:08:26,160 --> 00:08:27,800 Speaker 1: it may not be expensive for her family, but at 189 00:08:27,840 --> 00:08:31,080 Speaker 1: least for her, they're getting to be almost yeah, intendable. Yeah, 190 00:08:31,080 --> 00:08:33,320 Speaker 1: and since it's your personal finances, like, you've got to 191 00:08:33,320 --> 00:08:35,720 Speaker 1: make a decision based on what's going on in your life. 192 00:08:35,760 --> 00:08:37,640 Speaker 1: And so it's worth pointing out that even when you 193 00:08:37,720 --> 00:08:40,439 Speaker 1: have the same goals in life, in this case, it's 194 00:08:40,520 --> 00:08:42,640 Speaker 1: to spend more time together as a family, how it 195 00:08:42,720 --> 00:08:44,880 Speaker 1: is that you go about getting there can be wildly different. 196 00:08:44,960 --> 00:08:47,360 Speaker 1: And so, yeah, of course Tiffany wants to spend time 197 00:08:47,360 --> 00:08:49,199 Speaker 1: with their family. She just wants it to cost a 198 00:08:49,240 --> 00:08:51,920 Speaker 1: little bit less, and they've got this shared goal, but 199 00:08:52,000 --> 00:08:54,120 Speaker 1: she's looking to take the more frugal path to getting there, 200 00:08:54,200 --> 00:08:57,240 Speaker 1: which I think is wise. Totally. Yeah, so let's discuss 201 00:08:57,280 --> 00:08:59,640 Speaker 1: what her next steps could be, because she said that 202 00:08:59,640 --> 00:09:02,240 Speaker 1: she's already made the suggestion, right. I think she said 203 00:09:02,240 --> 00:09:06,000 Speaker 1: something about a staycation, maybe someone in the family hosting 204 00:09:06,000 --> 00:09:08,640 Speaker 1: the next get together, but it doesn't sound like she's 205 00:09:08,679 --> 00:09:11,679 Speaker 1: gotten anywhere with that suggestion, and so I think one 206 00:09:11,720 --> 00:09:14,800 Speaker 1: approach could be to specifically name it right like I'm 207 00:09:14,840 --> 00:09:17,559 Speaker 1: talking about taking the bowl by the horns, and address 208 00:09:17,880 --> 00:09:20,800 Speaker 1: that the reason you're interested in a more affordable optionativity 209 00:09:21,080 --> 00:09:23,440 Speaker 1: is because you're you're looking to save some money, right like, 210 00:09:23,520 --> 00:09:26,480 Speaker 1: maybe in the excitement of planning the next trip you're 211 00:09:26,600 --> 00:09:29,920 Speaker 1: family members, they might just hear staycation, and all that 212 00:09:29,960 --> 00:09:34,880 Speaker 1: registers in their mind is bullying. They might be confusing 213 00:09:34,880 --> 00:09:37,320 Speaker 1: your desire to save money as a lack of creativity, 214 00:09:37,440 --> 00:09:39,640 Speaker 1: right like, they might be seeing you being a little 215 00:09:39,679 --> 00:09:42,360 Speaker 1: more frugal as you not having a sense of adventure. 216 00:09:42,400 --> 00:09:44,800 Speaker 1: They're not really looking at the money side of things. 217 00:09:45,200 --> 00:09:46,960 Speaker 1: But if you're able to tackle the issue of money 218 00:09:47,040 --> 00:09:49,880 Speaker 1: more directly, right like, tackle it head on, then they 219 00:09:49,960 --> 00:09:52,920 Speaker 1: might be able to interpret your suggestions in an entirely 220 00:09:53,160 --> 00:09:55,800 Speaker 1: new light. For once, they might hear what you're saying, 221 00:09:56,120 --> 00:09:58,880 Speaker 1: which is, guys, I can barely afford these things, and 222 00:09:58,880 --> 00:10:00,400 Speaker 1: there are other goals that I have in life, as 223 00:10:00,400 --> 00:10:03,000 Speaker 1: opposed to you sounding like, well, I just want to 224 00:10:03,040 --> 00:10:05,880 Speaker 1: kind of stay home, because well that's I mean, the 225 00:10:05,920 --> 00:10:07,599 Speaker 1: point obviously is for you all to get together, but 226 00:10:07,640 --> 00:10:10,520 Speaker 1: they might be again they're trying to achieve that family 227 00:10:10,559 --> 00:10:12,920 Speaker 1: time together by going abroad or going on some of 228 00:10:12,960 --> 00:10:15,880 Speaker 1: these more fun vacations or something. If you don't name it, 229 00:10:15,880 --> 00:10:17,360 Speaker 1: if you don't put all your cards on the table, 230 00:10:17,559 --> 00:10:21,840 Speaker 1: it's hard for them to react to the underlying problem, right, 231 00:10:21,920 --> 00:10:24,600 Speaker 1: exactly underlying problem is that things have gotten too expensive, 232 00:10:24,960 --> 00:10:28,600 Speaker 1: not that you just aren't adventurous, right, And so laying 233 00:10:28,720 --> 00:10:30,760 Speaker 1: your cards out and letting them know kind of, hey, 234 00:10:30,800 --> 00:10:34,000 Speaker 1: this is where I'm at, and this is why I 235 00:10:34,080 --> 00:10:35,880 Speaker 1: need or want to make a change to how we're 236 00:10:35,880 --> 00:10:39,040 Speaker 1: doing this. I think we'll cause typically we'll cause people 237 00:10:39,080 --> 00:10:41,520 Speaker 1: to say, oh, okay, I didn't realize that was the 238 00:10:41,559 --> 00:10:45,719 Speaker 1: why behind this. And I think it'll create some new conversations, 239 00:10:45,720 --> 00:10:48,319 Speaker 1: a new chance for you guys to one start talking 240 00:10:48,320 --> 00:10:50,240 Speaker 1: about money more in your family, which is cool, but 241 00:10:50,320 --> 00:10:52,880 Speaker 1: also I think will help your loved ones to start 242 00:10:52,920 --> 00:10:56,440 Speaker 1: thinking about different ways maybe to get family time that 243 00:10:56,520 --> 00:10:59,040 Speaker 1: costs less than maybe some of the trips are currently 244 00:10:59,080 --> 00:11:01,920 Speaker 1: totally embarking on. So but if you do that, let's say, 245 00:11:01,920 --> 00:11:05,319 Speaker 1: and nobody's willing to consider a more affordable alternative, then 246 00:11:05,440 --> 00:11:08,360 Speaker 1: maybe it's time to move beyond suggestions and actually sit 247 00:11:08,400 --> 00:11:10,400 Speaker 1: it out on the next plane vacation. Because I think 248 00:11:10,400 --> 00:11:12,400 Speaker 1: a lot of folks are interested in saving money, your 249 00:11:12,400 --> 00:11:14,600 Speaker 1: family included, And you might say something like, hey, let's 250 00:11:14,640 --> 00:11:16,520 Speaker 1: find a way to make some memories together that that 251 00:11:16,640 --> 00:11:18,880 Speaker 1: doesn't cost a fortune, right, And I think that that's 252 00:11:18,920 --> 00:11:21,640 Speaker 1: something most folks can get behind. Yeah, few folks were 253 00:11:21,640 --> 00:11:24,280 Speaker 1: saying like, hey, let's take our next family vacation and 254 00:11:24,280 --> 00:11:26,600 Speaker 1: spend as much money as possible. Yeah, hey, can we 255 00:11:26,640 --> 00:11:28,560 Speaker 1: go bankrupt in the process? That would be How great 256 00:11:28,559 --> 00:11:31,120 Speaker 1: would that be? Like, that's not typically the kind of 257 00:11:31,160 --> 00:11:32,760 Speaker 1: the route that they're taking it in. And of course 258 00:11:32,800 --> 00:11:35,559 Speaker 1: they also when it's time be getting the loved ones 259 00:11:35,640 --> 00:11:39,120 Speaker 1: together off, the goal is often not to leave people 260 00:11:39,120 --> 00:11:41,719 Speaker 1: out who can't afford to join, right, And so yeah, 261 00:11:41,720 --> 00:11:43,640 Speaker 1: I think a lot of people are are interested in 262 00:11:43,679 --> 00:11:45,880 Speaker 1: looking for ways to save money, but fewer people are 263 00:11:45,880 --> 00:11:48,760 Speaker 1: actually willing to sacrifice in order to make that a reality, 264 00:11:48,920 --> 00:11:51,080 Speaker 1: like you, Tiffany, And so it might actually take you 265 00:11:51,120 --> 00:11:54,000 Speaker 1: politely declining actually missing one of those trips in order 266 00:11:54,000 --> 00:11:57,679 Speaker 1: to change the trajectory of these vacations moving forward. But 267 00:11:58,120 --> 00:12:00,840 Speaker 1: you know, it also might not change her eye. That's 268 00:12:00,880 --> 00:12:03,320 Speaker 1: important to note, like you might put your cards on 269 00:12:03,360 --> 00:12:05,080 Speaker 1: the table and they might still want to go on 270 00:12:05,080 --> 00:12:07,959 Speaker 1: that skey trip to Aspen, but then you have to 271 00:12:08,000 --> 00:12:09,960 Speaker 1: make that decision whether or not you're going to participate. 272 00:12:10,320 --> 00:12:13,840 Speaker 1: Either way, that's money that you've saved if you opt 273 00:12:13,880 --> 00:12:15,760 Speaker 1: to sit out, if you opt to knock go on 274 00:12:15,800 --> 00:12:17,880 Speaker 1: the trip, sad as it might be, you can put 275 00:12:17,880 --> 00:12:19,920 Speaker 1: that money towards that home improvement project you're talking about, 276 00:12:20,000 --> 00:12:22,120 Speaker 1: or a trip with your friends instead, and hopefully you 277 00:12:22,120 --> 00:12:23,760 Speaker 1: and your friends can get on the same page about 278 00:12:23,800 --> 00:12:26,320 Speaker 1: a cheaper way to take that trip, and hopefully that 279 00:12:26,360 --> 00:12:28,280 Speaker 1: just gives you more time to save up for the 280 00:12:28,800 --> 00:12:30,480 Speaker 1: next family vacation. You might not be able to go 281 00:12:30,520 --> 00:12:32,520 Speaker 1: on all of them, even though there might be pressure 282 00:12:32,559 --> 00:12:34,439 Speaker 1: to do so, even though you want to do that, 283 00:12:34,679 --> 00:12:36,880 Speaker 1: the reality is none of us can can do it all. 284 00:12:37,080 --> 00:12:39,480 Speaker 1: That's right, Yeah, And she did say that it sounds 285 00:12:39,520 --> 00:12:41,880 Speaker 1: like there's multiple trips happening, right, and so the ability 286 00:12:41,920 --> 00:12:44,400 Speaker 1: to maybe I'm going to do all the odd trips 287 00:12:44,960 --> 00:12:46,679 Speaker 1: as opposed to every single one, or maybe I'll just 288 00:12:46,720 --> 00:12:48,720 Speaker 1: do all the even trips this year as opposed to 289 00:12:48,760 --> 00:12:51,439 Speaker 1: it being this singular trip that where you know where 290 00:12:51,480 --> 00:12:53,120 Speaker 1: you would see all of your family members. It sounds 291 00:12:53,120 --> 00:12:54,800 Speaker 1: like it's multiple trips, so maybe there are a few 292 00:12:54,800 --> 00:12:57,800 Speaker 1: that she can kind of skip out on. And you know, Tiffany, 293 00:12:57,840 --> 00:13:00,320 Speaker 1: I think that you can also demonstrate how much your 294 00:13:00,320 --> 00:13:02,840 Speaker 1: family means to you by taking a more proactive role 295 00:13:03,160 --> 00:13:06,079 Speaker 1: in the planning process as well. Again, it's not that 296 00:13:06,160 --> 00:13:08,280 Speaker 1: you are not interested in seeing those folks, It's just 297 00:13:08,360 --> 00:13:10,920 Speaker 1: that it's it's more of a money issue, right, Like, 298 00:13:11,000 --> 00:13:13,520 Speaker 1: for instance, you can say, oh, hey, that last trip 299 00:13:13,600 --> 00:13:16,079 Speaker 1: looked like so much fun. I'm bummed that I missed out. 300 00:13:16,640 --> 00:13:18,600 Speaker 1: But to make sure that everyone can make it next time, 301 00:13:18,840 --> 00:13:20,640 Speaker 1: maybe I'll mind if up put together some ideas that 302 00:13:20,679 --> 00:13:23,040 Speaker 1: we can all talk about. Like it's again not that 303 00:13:23,040 --> 00:13:25,360 Speaker 1: you're trying to completely take over, but you would just 304 00:13:25,400 --> 00:13:28,280 Speaker 1: like to share your thoughts and go get or fashion. 305 00:13:28,760 --> 00:13:31,280 Speaker 1: I think that's a very diplomatic way of going about 306 00:13:31,280 --> 00:13:33,880 Speaker 1: it without ruffling, you know, too many feathers. And if 307 00:13:33,880 --> 00:13:35,400 Speaker 1: you were to do that, I can't imagine there are 308 00:13:35,400 --> 00:13:37,600 Speaker 1: going to be many family members who would hear you 309 00:13:37,600 --> 00:13:39,439 Speaker 1: say that and who would say, like, no way to 310 00:13:39,559 --> 00:13:43,199 Speaker 1: heat your bust, right, even if other family members are 311 00:13:43,280 --> 00:13:45,200 Speaker 1: loaded and they really do want to go to the 312 00:13:45,200 --> 00:13:47,000 Speaker 1: other side of the world. You know, they still can, 313 00:13:47,559 --> 00:13:51,280 Speaker 1: but hopefully they'll see and they'll understand your situation and 314 00:13:51,400 --> 00:13:53,520 Speaker 1: you all be able to find some common ground. Maybe 315 00:13:53,520 --> 00:13:55,520 Speaker 1: some of those in between trips will end up maybe 316 00:13:55,559 --> 00:13:58,720 Speaker 1: being stateside. It will be something that's more hosted at 317 00:13:58,760 --> 00:14:01,439 Speaker 1: somebody's house, as opposed to all of y'all forking out 318 00:14:01,440 --> 00:14:03,960 Speaker 1: the dough and you know, paying for lodging, paying for 319 00:14:04,000 --> 00:14:06,400 Speaker 1: all the meals, as opposed to go into someone's house, 320 00:14:06,760 --> 00:14:09,840 Speaker 1: utilizing the sleeping bag, going out and buying groceries and 321 00:14:09,880 --> 00:14:11,520 Speaker 1: all cooking together. Where it can be a much more 322 00:14:11,559 --> 00:14:13,880 Speaker 1: affordable day trip, a stay in a yurt something like that. 323 00:14:13,920 --> 00:14:15,640 Speaker 1: I mean, like there's a there's a cool place near us, 324 00:14:15,640 --> 00:14:17,160 Speaker 1: and we could like stay a yurt for two nights 325 00:14:17,200 --> 00:14:18,600 Speaker 1: and be so cheap, and there'd be so much cool 326 00:14:18,640 --> 00:14:21,800 Speaker 1: hiking and stuff to do outdoors nearby that I could 327 00:14:21,800 --> 00:14:24,040 Speaker 1: totally see, like us getting a family trip together there. 328 00:14:24,280 --> 00:14:27,400 Speaker 1: But it's way more expensive to go international ride or 329 00:14:27,400 --> 00:14:29,880 Speaker 1: even to hop on a plane and head somewhere. So 330 00:14:30,280 --> 00:14:32,520 Speaker 1: these are the kind of proposals though, that maybe they 331 00:14:32,560 --> 00:14:34,480 Speaker 1: haven't thought about, and maybe it'll be like a really 332 00:14:34,520 --> 00:14:37,440 Speaker 1: fun way to take that next family trip that's less 333 00:14:37,480 --> 00:14:40,720 Speaker 1: intense from a financial and planning aspect as well, and 334 00:14:40,800 --> 00:14:42,800 Speaker 1: it can kind of provide a new experience for your 335 00:14:42,800 --> 00:14:45,160 Speaker 1: family to embark on. So but you gotta be willing 336 00:14:45,160 --> 00:14:46,480 Speaker 1: to suggest that thing. And I think you gotta be 337 00:14:46,520 --> 00:14:49,280 Speaker 1: willing to lay your cards on the table and say, hey, listen, 338 00:14:49,280 --> 00:14:51,800 Speaker 1: it's a personal finance thing for me. Like I could 339 00:14:51,840 --> 00:14:53,560 Speaker 1: have the money, I could come up with it, but 340 00:14:53,600 --> 00:14:55,320 Speaker 1: then I wouldn't be able to meet my other goals, 341 00:14:55,320 --> 00:14:57,680 Speaker 1: which are to pay off this debt and to be 342 00:14:57,800 --> 00:15:00,880 Speaker 1: saving ten percent plus for retirement, or like be able 343 00:15:01,080 --> 00:15:03,200 Speaker 1: to be willing and able to say those things out 344 00:15:03,200 --> 00:15:05,440 Speaker 1: loud to your family members. And I think maybe one 345 00:15:05,440 --> 00:15:07,560 Speaker 1: of your family members might be like, what's retirement? Like 346 00:15:07,600 --> 00:15:09,920 Speaker 1: how do you say for retirement? Like you really couldn't 347 00:15:09,960 --> 00:15:12,240 Speaker 1: end up helping some of your family members out just 348 00:15:12,280 --> 00:15:15,200 Speaker 1: by starting that conversation specifically on this topic of vacations 349 00:15:15,200 --> 00:15:17,000 Speaker 1: and how much all are spending on them. Please, Tiffany's 350 00:15:17,040 --> 00:15:18,960 Speaker 1: got family members and they just want to retire literally 351 00:15:19,000 --> 00:15:21,880 Speaker 1: on the boat. They're gonna retire on the cruise. That 352 00:15:21,880 --> 00:15:23,880 Speaker 1: can work, because it really, I mean, it can be affordable. 353 00:15:23,960 --> 00:15:27,120 Speaker 1: But I like what you said about making another suggestion, 354 00:15:27,240 --> 00:15:29,280 Speaker 1: just because it can often just switch things up a 355 00:15:29,320 --> 00:15:31,760 Speaker 1: little bit. I mean, seriously, like, if you're used to 356 00:15:31,800 --> 00:15:34,440 Speaker 1: going on cruises, there's there's only so many drinks that 357 00:15:34,480 --> 00:15:37,600 Speaker 1: you can enjoy pool side while while you're out on 358 00:15:37,640 --> 00:15:40,520 Speaker 1: the ocean, and I will readily admit that's not something 359 00:15:40,600 --> 00:15:43,240 Speaker 1: I have personally done. So maybe once I do actually 360 00:15:43,520 --> 00:15:45,400 Speaker 1: go on a cruise, I'm gonna freaking love it, and 361 00:15:45,400 --> 00:15:47,120 Speaker 1: that's all I'm gonna want to do. But I gotta 362 00:15:47,160 --> 00:15:49,800 Speaker 1: imagine that there are room for some more affordable vacations 363 00:15:49,880 --> 00:15:51,720 Speaker 1: up for some more affordable trips. And it doesn't it 364 00:15:51,760 --> 00:15:53,360 Speaker 1: doesn't have to be let's just meet up with the 365 00:15:53,480 --> 00:15:56,320 Speaker 1: family at our at our uncle's house. It really could 366 00:15:56,360 --> 00:15:59,320 Speaker 1: be going on an excursion and staying overnight even but 367 00:15:59,360 --> 00:16:00,760 Speaker 1: it can be campy or like I said a year, 368 00:16:00,840 --> 00:16:03,080 Speaker 1: I mean, it can be something really basic that can 369 00:16:03,120 --> 00:16:06,040 Speaker 1: still be a complete blast. Yeah, absolutely, all right. We've 370 00:16:06,040 --> 00:16:08,560 Speaker 1: got several more questions that we're gonna get to during 371 00:16:08,640 --> 00:16:11,680 Speaker 1: this episode, including I think we're gonna hear from I believe, 372 00:16:11,720 --> 00:16:14,240 Speaker 1: the youngest ever listener to have submitted a voice memo 373 00:16:14,400 --> 00:16:17,760 Speaker 1: to the show. We're gonna get to her question about investing, 374 00:16:18,000 --> 00:16:29,440 Speaker 1: plus a few others right after this. All right, man, 375 00:16:29,480 --> 00:16:32,240 Speaker 1: let's keep taking listener questions, and like said before the break, 376 00:16:32,240 --> 00:16:34,480 Speaker 1: we're gonna get to one from a really young had 377 00:16:34,520 --> 00:16:37,720 Speaker 1: a money listener. Hi, my name's Lena. I'm eleven years 378 00:16:37,720 --> 00:16:40,560 Speaker 1: old and I am from California. I have my own 379 00:16:40,600 --> 00:16:43,640 Speaker 1: trous swab account with stocks from Crocs while Disney rolocks 380 00:16:43,680 --> 00:16:46,120 Speaker 1: in Google. The question for you guys today is I 381 00:16:46,200 --> 00:16:48,520 Speaker 1: have two thousand dollars saved in my bank account. What 382 00:16:48,600 --> 00:16:50,760 Speaker 1: are some good ways to save it or spend it? 383 00:16:51,320 --> 00:16:53,640 Speaker 1: Or should I buy more stocks with it or save 384 00:16:53,680 --> 00:16:56,200 Speaker 1: it for one and we'll do all right, Lena, thank 385 00:16:56,240 --> 00:16:58,280 Speaker 1: you so much for that question. It is always fun 386 00:16:58,320 --> 00:17:00,600 Speaker 1: for us to hear from some younger steners out there 387 00:17:00,600 --> 00:17:04,200 Speaker 1: in particular who are doing awesome, correct things with their money, 388 00:17:04,640 --> 00:17:07,280 Speaker 1: So we appreciate you sending that one our way, and 389 00:17:07,359 --> 00:17:09,880 Speaker 1: we will do our best to answer your question well here. 390 00:17:10,119 --> 00:17:13,480 Speaker 1: So first of all, let's talk about investing specifically in 391 00:17:13,560 --> 00:17:16,320 Speaker 1: single stocks for a second here, because they can definitely 392 00:17:16,400 --> 00:17:18,840 Speaker 1: be fun. They can be a great way to pique 393 00:17:18,880 --> 00:17:22,879 Speaker 1: your interest in investing, and we don't necessarily want you 394 00:17:22,960 --> 00:17:26,000 Speaker 1: to stop investing in some of the different companies that 395 00:17:26,040 --> 00:17:28,800 Speaker 1: you do business with, different companies who you support, that 396 00:17:28,840 --> 00:17:32,600 Speaker 1: you're a fan of. But we would love to see 397 00:17:32,720 --> 00:17:37,119 Speaker 1: funnel some more of your future investment dollars into index funds. 398 00:17:37,600 --> 00:17:39,520 Speaker 1: And the reason for that is because they are the 399 00:17:39,600 --> 00:17:42,159 Speaker 1: cheapest way to invest and it is going to be 400 00:17:42,280 --> 00:17:45,840 Speaker 1: far less risky, even though you might be a firm 401 00:17:45,840 --> 00:17:50,360 Speaker 1: believer in the products that Crocs, Disney. What else did 402 00:17:50,400 --> 00:17:54,880 Speaker 1: you mention? Roadblocks? Google? Google? Yeah, these are great companies. However, 403 00:17:55,240 --> 00:17:57,120 Speaker 1: you know, you see some fluctuations in the market and 404 00:17:57,200 --> 00:18:00,240 Speaker 1: you could see some massive declines within your portfolio. Yeah, 405 00:18:00,240 --> 00:18:03,640 Speaker 1: and Roblocks might be popular today, but maybe the metaverse, 406 00:18:03,640 --> 00:18:05,320 Speaker 1: I don't know, I'm not long on the metaverse myself, 407 00:18:05,359 --> 00:18:07,480 Speaker 1: but maybe it becomes popular really soon and maybe people 408 00:18:07,480 --> 00:18:10,679 Speaker 1: forget about Roblox, or same thing with Crocs. Maybe Merrill 409 00:18:10,760 --> 00:18:14,399 Speaker 1: makes the new hot version of plastic shoes and so 410 00:18:14,520 --> 00:18:16,920 Speaker 1: Crocs falls by the wayside. Or you know, you talk 411 00:18:16,960 --> 00:18:19,639 Speaker 1: about open Ai the chat bot kind of stuff and 412 00:18:19,880 --> 00:18:24,399 Speaker 1: coming into vogue, And maybe it's not Google who is 413 00:18:24,600 --> 00:18:27,960 Speaker 1: leading that raise. Maybe in fact it is Microsoft is 414 00:18:28,000 --> 00:18:32,440 Speaker 1: being Microsoft Products also known as Sydney. The chat bot, 415 00:18:32,800 --> 00:18:35,080 Speaker 1: so it can be fun to invest in these single companies, 416 00:18:35,080 --> 00:18:38,080 Speaker 1: but either way, we typically recommend no more than five 417 00:18:38,160 --> 00:18:42,399 Speaker 1: percent of your overall portfolio invested within those single stocks, 418 00:18:42,520 --> 00:18:44,400 Speaker 1: within the single companies. In Lena's case, like you said, 419 00:18:44,400 --> 00:18:46,160 Speaker 1: if it piques her interest, if it gets her kind 420 00:18:46,200 --> 00:18:49,960 Speaker 1: of excited about investing, I see that as a plus. 421 00:18:50,320 --> 00:18:52,800 Speaker 1: But I think now that you've got some money invested, Lena, 422 00:18:52,800 --> 00:18:55,120 Speaker 1: and now's the time to kind of start prioritizing index 423 00:18:55,160 --> 00:18:57,600 Speaker 1: funds moving forward, right, like, hold on to some of 424 00:18:57,600 --> 00:18:59,679 Speaker 1: that Roblox stock. It's kind of fun to see what happens. 425 00:19:00,160 --> 00:19:03,240 Speaker 1: But let's keep pushing more money towards those index funds, 426 00:19:03,280 --> 00:19:05,560 Speaker 1: which are just going to help you build wealth over 427 00:19:05,600 --> 00:19:07,400 Speaker 1: the long term, and it's going to be less risky 428 00:19:07,440 --> 00:19:09,399 Speaker 1: in the process. But let's get to the heart of 429 00:19:09,400 --> 00:19:12,800 Speaker 1: your question, which is about investing for later or spending 430 00:19:12,800 --> 00:19:15,600 Speaker 1: more money now, which is such a good question, such 431 00:19:15,600 --> 00:19:18,199 Speaker 1: a good question, and it's really everybody who kind of 432 00:19:18,240 --> 00:19:20,840 Speaker 1: wants to be frugal and who also wants to build 433 00:19:20,840 --> 00:19:22,919 Speaker 1: their wealth for the future. This is the question they 434 00:19:23,000 --> 00:19:25,359 Speaker 1: keep coming back to, or they should keep coming back to. Right, 435 00:19:25,600 --> 00:19:28,320 Speaker 1: should I save and invest more or should I enjoy 436 00:19:28,480 --> 00:19:30,639 Speaker 1: some of the money here and now that is something 437 00:19:30,640 --> 00:19:32,679 Speaker 1: that Matt and I wrestle with as individuals, and that 438 00:19:32,720 --> 00:19:34,720 Speaker 1: we kind of try to wrestle with here on the show, 439 00:19:35,040 --> 00:19:38,000 Speaker 1: try to point people towards helpful ways to think about it. 440 00:19:38,040 --> 00:19:42,359 Speaker 1: But lots of personal finance advice they stress frugality, and 441 00:19:42,359 --> 00:19:45,320 Speaker 1: we do too. We talk about frugality, but some people 442 00:19:45,400 --> 00:19:48,640 Speaker 1: do it to the exclusion of enjoying yourself. Now, it's 443 00:19:48,680 --> 00:19:50,480 Speaker 1: hard to give you a slam donkey answer as to 444 00:19:50,520 --> 00:19:52,840 Speaker 1: whether or not you should invest or spend this money, 445 00:19:52,840 --> 00:19:55,920 Speaker 1: because let's run some numbers really quick. The two thousand 446 00:19:55,960 --> 00:19:58,160 Speaker 1: dollars that you've got if you invested at all right now, 447 00:19:58,680 --> 00:20:00,959 Speaker 1: at age eleven, it turns out that money is going 448 00:20:00,960 --> 00:20:04,080 Speaker 1: to be worth basically one hundred thousand dollars when you're sixty. 449 00:20:04,359 --> 00:20:07,520 Speaker 1: You know, that's just assuming eight percent returns, So keep 450 00:20:07,560 --> 00:20:10,040 Speaker 1: that in mind. Right, It's incredible what a small sum 451 00:20:10,040 --> 00:20:12,280 Speaker 1: of money can do over basically fifty years, which is 452 00:20:12,480 --> 00:20:14,399 Speaker 1: kind of the brilliance of you investing at such a 453 00:20:14,480 --> 00:20:17,000 Speaker 1: young age. But it's also important to mention that we 454 00:20:17,040 --> 00:20:19,080 Speaker 1: don't want you to allow the math to keep you 455 00:20:19,119 --> 00:20:21,560 Speaker 1: from enjoying some of the money that you're bringing in 456 00:20:21,560 --> 00:20:23,880 Speaker 1: now either. Yeah, and obviously Lenau's too young for beer. 457 00:20:23,920 --> 00:20:26,600 Speaker 1: But this is exactly why we talk about our craft 458 00:20:26,720 --> 00:20:29,359 Speaker 1: beer equivalent. That's why we ask every single one of 459 00:20:29,359 --> 00:20:32,119 Speaker 1: our guests what it is that they splurge on in 460 00:20:32,119 --> 00:20:34,720 Speaker 1: the day to day while still being responsible for their future, 461 00:20:34,840 --> 00:20:37,360 Speaker 1: because this is what we do, right. We buy expensive 462 00:20:37,359 --> 00:20:40,480 Speaker 1: beer sometimes, but it is not enough to derail our 463 00:20:40,520 --> 00:20:43,200 Speaker 1: investing goals. And so Lena, we don't want you to 464 00:20:43,600 --> 00:20:46,160 Speaker 1: invest so much now that you aren't able to enjoy 465 00:20:46,200 --> 00:20:49,800 Speaker 1: whatever your personal craft beer equivalent is. And also don't 466 00:20:49,800 --> 00:20:53,120 Speaker 1: forget about your your more medium term savings goals as well. 467 00:20:53,720 --> 00:20:56,800 Speaker 1: You could start saving for a car now if you 468 00:20:56,800 --> 00:21:00,119 Speaker 1: wanted to write if that is a priority. Basically, like, 469 00:21:00,119 --> 00:21:01,720 Speaker 1: you've got a bunch of money on hand that you're 470 00:21:01,760 --> 00:21:05,080 Speaker 1: not super interested in spending at the moment and spending now, 471 00:21:05,160 --> 00:21:06,920 Speaker 1: but guess what, there are likely going to be things 472 00:21:06,920 --> 00:21:09,119 Speaker 1: that you want to spend money on tomorrow or you know, 473 00:21:09,200 --> 00:21:12,679 Speaker 1: like the symbolic tomorrow right, like not literally tomorrow, but 474 00:21:12,720 --> 00:21:14,200 Speaker 1: like down the road, you're going to want to spend 475 00:21:14,240 --> 00:21:16,400 Speaker 1: money on something. I feel like over the years, that's 476 00:21:16,440 --> 00:21:18,920 Speaker 1: something that I've learned where like I'm always surprised at 477 00:21:18,920 --> 00:21:21,159 Speaker 1: how I change my mind on things. Even now, at 478 00:21:21,160 --> 00:21:23,680 Speaker 1: the age of forty, I still change my mind. Like 479 00:21:23,680 --> 00:21:25,639 Speaker 1: even just a few years ago, I thought, you know what, 480 00:21:25,760 --> 00:21:27,920 Speaker 1: let's go ahead and renovate this house, and let's go 481 00:21:27,960 --> 00:21:29,639 Speaker 1: ahead and make some changes that we know we're not 482 00:21:29,640 --> 00:21:31,640 Speaker 1: going to be able to get the money out of 483 00:21:32,240 --> 00:21:34,920 Speaker 1: by spending extra on these things. However, it doesn't matter 484 00:21:35,000 --> 00:21:36,680 Speaker 1: because we're gonna live here for the rest of our life. 485 00:21:36,760 --> 00:21:39,240 Speaker 1: Like literally, you can bury me in the backyard and 486 00:21:39,280 --> 00:21:44,080 Speaker 1: then three years later, yeah, we moved. So don't underestimate 487 00:21:44,160 --> 00:21:47,560 Speaker 1: your ability to change your mind. And by having this 488 00:21:47,640 --> 00:21:49,800 Speaker 1: cash on hand to save up for some of those goals, 489 00:21:49,800 --> 00:21:52,119 Speaker 1: it just puts you in such a great position. It 490 00:21:52,119 --> 00:21:54,560 Speaker 1: puts you in a strong position to be able to 491 00:21:54,680 --> 00:21:57,080 Speaker 1: afford some of those new goals that you might have 492 00:21:57,200 --> 00:21:59,560 Speaker 1: there in the future, as opposed to financing some of 493 00:21:59,560 --> 00:22:02,720 Speaker 1: those parts. Yeah, but in you're buying yourself future flexibility 494 00:22:02,840 --> 00:22:05,560 Speaker 1: right by continuing to save and invest some of these dollars. 495 00:22:05,000 --> 00:22:07,160 Speaker 1: That's as opposed to spending them in the here now. 496 00:22:07,240 --> 00:22:09,359 Speaker 1: But I will say too, don't forget to use some 497 00:22:09,400 --> 00:22:11,360 Speaker 1: of those dollars to spend now in ways that move 498 00:22:11,400 --> 00:22:13,440 Speaker 1: the needle, that make you happy. Because I'm thinking about 499 00:22:13,520 --> 00:22:15,800 Speaker 1: my nephew. He's fifteen, so he's a few years older 500 00:22:15,800 --> 00:22:17,600 Speaker 1: than you, but his favorite thing to do is to 501 00:22:17,640 --> 00:22:19,400 Speaker 1: go to the dollar store with his buds. And so 502 00:22:19,480 --> 00:22:21,600 Speaker 1: he has a certain keeps a certain amount of his 503 00:22:21,640 --> 00:22:24,720 Speaker 1: allowance and he spends a decent chunk of that on 504 00:22:24,920 --> 00:22:27,760 Speaker 1: kind of those like fun runs to the dollar store 505 00:22:27,760 --> 00:22:30,960 Speaker 1: with his friends. And I think, like, because like it 506 00:22:31,040 --> 00:22:33,960 Speaker 1: stinks to say, oh, no, I can't do that, because 507 00:22:34,400 --> 00:22:37,960 Speaker 1: I'm investing for my sixty year old self. And while 508 00:22:37,960 --> 00:22:40,400 Speaker 1: there is benefit to doing that, and while we wouldn't 509 00:22:40,440 --> 00:22:42,560 Speaker 1: want to deter you from investing for your future, we 510 00:22:42,560 --> 00:22:43,879 Speaker 1: would say it's great that you're doing it, and you 511 00:22:43,880 --> 00:22:47,000 Speaker 1: should continue doing that. Don't do it to the exclusion 512 00:22:47,440 --> 00:22:49,760 Speaker 1: of fun things that you could participate in now with friends. Right, 513 00:22:49,760 --> 00:22:51,480 Speaker 1: And so I'm not sure if your friends are going 514 00:22:51,520 --> 00:22:53,800 Speaker 1: bowling on a Friday night or something like that, then 515 00:22:54,480 --> 00:22:56,520 Speaker 1: and that's something you want to do, then I would 516 00:22:56,560 --> 00:22:58,800 Speaker 1: say go for it, and make sure you give yourself 517 00:22:59,080 --> 00:23:01,639 Speaker 1: the freedom to spend on things that matter in the 518 00:23:01,720 --> 00:23:04,280 Speaker 1: here and now while you're also investing for the future. 519 00:23:04,359 --> 00:23:08,119 Speaker 1: So it's just so easy when for certain people of 520 00:23:08,160 --> 00:23:12,840 Speaker 1: a certain kind of brain wiring to save and invest 521 00:23:12,920 --> 00:23:16,120 Speaker 1: incessantly and forget that it's important to spend on things 522 00:23:16,119 --> 00:23:18,080 Speaker 1: that matter now. And I say that as someone who 523 00:23:18,400 --> 00:23:23,199 Speaker 1: has that problem, who can sometimes save and invest to 524 00:23:23,280 --> 00:23:25,400 Speaker 1: my own detriment in the here and now, but as 525 00:23:25,400 --> 00:23:27,840 Speaker 1: someone who's grown in that as well. So so Lena, 526 00:23:27,840 --> 00:23:30,479 Speaker 1: I hope that's helpful. We want you to save and invest, 527 00:23:30,560 --> 00:23:32,560 Speaker 1: we want you to be smart about medium term goals 528 00:23:32,600 --> 00:23:34,280 Speaker 1: and about long term goals, but we also don't want 529 00:23:34,320 --> 00:23:36,000 Speaker 1: you to overdo it and miss out on kind of 530 00:23:36,000 --> 00:23:39,639 Speaker 1: the fun experiences that money can buy even now too. Yeah. Basically, 531 00:23:39,680 --> 00:23:42,199 Speaker 1: what we're addressing here is what was not included in 532 00:23:42,240 --> 00:23:44,120 Speaker 1: your question, which is some of the stuff you wanted 533 00:23:44,119 --> 00:23:46,600 Speaker 1: to spend your money on. Yeah, right now. Well, she knows. 534 00:23:46,600 --> 00:23:49,040 Speaker 1: She mentioned that she was wondering about spending money too, 535 00:23:49,119 --> 00:23:52,200 Speaker 1: and like should she save it invested her sprite but specifically, 536 00:23:52,359 --> 00:23:54,280 Speaker 1: as you know, she mentioned the single stocks that she's 537 00:23:54,320 --> 00:23:55,720 Speaker 1: invested in. She's talking about the fact she's got the 538 00:23:55,760 --> 00:23:57,720 Speaker 1: Schwab account. She's not talking about, well, I really want 539 00:23:57,760 --> 00:24:00,119 Speaker 1: to save up for this immediate term goal. This this 540 00:24:00,200 --> 00:24:02,920 Speaker 1: sort of splurge, And so I think what we're trying 541 00:24:02,920 --> 00:24:04,840 Speaker 1: to do here is provide some balance to the question 542 00:24:04,920 --> 00:24:06,480 Speaker 1: that she was at to come to us with. And 543 00:24:06,520 --> 00:24:08,600 Speaker 1: it's easy to again give you those numbers and tell 544 00:24:08,600 --> 00:24:11,359 Speaker 1: you how much money that will be years and decades 545 00:24:11,400 --> 00:24:14,400 Speaker 1: down the road. And that's true, right, and so that's 546 00:24:14,440 --> 00:24:16,240 Speaker 1: part of the reason to invest. But the other side 547 00:24:16,280 --> 00:24:19,879 Speaker 1: of the coin is that all investing and no spending 548 00:24:19,920 --> 00:24:22,560 Speaker 1: now can be pretty dismal too. But Matt, let's get 549 00:24:22,600 --> 00:24:25,199 Speaker 1: to our next question. This one comes from a listener 550 00:24:25,240 --> 00:24:28,080 Speaker 1: who wants to pay off his mortgage early. He wants 551 00:24:28,119 --> 00:24:31,040 Speaker 1: to know how to do it in the most effective manner. Hey, guys, 552 00:24:31,200 --> 00:24:34,679 Speaker 1: this is Dakota. I'm a CPA from Ohio, and I 553 00:24:34,720 --> 00:24:40,240 Speaker 1: had a question about mortgage payment optimization. I recently purchased 554 00:24:40,280 --> 00:24:43,920 Speaker 1: a duplex at roughly a five point three interest rate 555 00:24:44,280 --> 00:24:48,760 Speaker 1: on a thirty year loan. I know the first number 556 00:24:48,800 --> 00:24:52,760 Speaker 1: of years is mostly interest on all the payments, and 557 00:24:53,119 --> 00:24:55,119 Speaker 1: because of that, I try to put down a couple 558 00:24:55,560 --> 00:24:59,359 Speaker 1: hundred dollars extra in every payment and then a little 559 00:24:59,400 --> 00:25:03,960 Speaker 1: extra repaycheck months. But my question is, is there some 560 00:25:04,000 --> 00:25:07,920 Speaker 1: way to optimize the amount of extra that you are 561 00:25:08,080 --> 00:25:11,760 Speaker 1: paying on a mortgage payment. At five point three percent, 562 00:25:11,800 --> 00:25:15,040 Speaker 1: I'm happy with the return on that investment versus trying 563 00:25:15,080 --> 00:25:17,720 Speaker 1: to invest it in the market, But I can't say 564 00:25:17,760 --> 00:25:20,359 Speaker 1: that paying off the mortgage is my main financial goal. 565 00:25:21,040 --> 00:25:23,760 Speaker 1: I could probably try to adjust my budget and set 566 00:25:23,800 --> 00:25:27,240 Speaker 1: aside more every month to get on the principle, but 567 00:25:27,320 --> 00:25:32,560 Speaker 1: I don't know when diminishing returns might hit. Any recommendation 568 00:25:32,600 --> 00:25:35,680 Speaker 1: on what might be the best way to optimize those 569 00:25:35,840 --> 00:25:38,720 Speaker 1: extra payments, or if there's some sort of value added 570 00:25:38,760 --> 00:25:42,760 Speaker 1: calculators that I could use. Right now, there's roughly one 571 00:25:42,880 --> 00:25:47,000 Speaker 1: hundred thousand that's left on the load. Thanks so much 572 00:25:47,040 --> 00:25:48,920 Speaker 1: for the help. All right, Joel, this question, I feel 573 00:25:48,920 --> 00:25:51,320 Speaker 1: like it brings up a lot of thoughts, So Dakoda 574 00:25:51,359 --> 00:25:54,400 Speaker 1: bear with us as we might annoy you a little 575 00:25:54,400 --> 00:25:57,840 Speaker 1: bit with Well, we have to say here, TMI. First 576 00:25:57,840 --> 00:25:59,640 Speaker 1: of all, we don't want to rain on your parade, 577 00:26:00,119 --> 00:26:04,080 Speaker 1: because obviously everyone's got different financial goals. But before you 578 00:26:04,200 --> 00:26:06,880 Speaker 1: keep attacking this mortgage debt with the tenacity that you're 579 00:26:06,880 --> 00:26:09,440 Speaker 1: currently doing it with, well, we want you to ask 580 00:26:09,560 --> 00:26:12,159 Speaker 1: yourself whether this is going to be the best option 581 00:26:12,200 --> 00:26:14,600 Speaker 1: for you or not. If you didn't listen to our 582 00:26:14,640 --> 00:26:17,600 Speaker 1: interview last week with Tom Anderson, we would recommend for 583 00:26:17,600 --> 00:26:19,359 Speaker 1: you to check that one out. But we've talked about 584 00:26:19,400 --> 00:26:22,720 Speaker 1: the strategic use of debt before here on the show. 585 00:26:23,200 --> 00:26:26,080 Speaker 1: But mortgage debt, it is the it's tough for us 586 00:26:26,080 --> 00:26:27,760 Speaker 1: to say that it's good debt, right, but it's the 587 00:26:27,840 --> 00:26:31,080 Speaker 1: least bad debt in existence most of the time. Might 588 00:26:31,320 --> 00:26:33,479 Speaker 1: almost almost if it's the good kind of mortgage debt, 589 00:26:33,560 --> 00:26:35,560 Speaker 1: say it's good, like as long as it's like really 590 00:26:35,560 --> 00:26:38,160 Speaker 1: low interest rate, except that so much of it matters though, 591 00:26:38,240 --> 00:26:40,400 Speaker 1: with it depends on what you do with the money 592 00:26:40,480 --> 00:26:43,240 Speaker 1: that you would otherwise put towards the payments. True, but 593 00:26:43,280 --> 00:26:45,560 Speaker 1: we want to make sure that that you aren't foregoing 594 00:26:45,680 --> 00:26:48,159 Speaker 1: some of those other financial goals because you're so laser 595 00:26:48,160 --> 00:26:50,560 Speaker 1: focused on paying off that debt. You know, you said 596 00:26:50,560 --> 00:26:53,680 Speaker 1: that you're happy with the ROI that you are receiving 597 00:26:53,680 --> 00:26:56,880 Speaker 1: by paying off that mortgage early. But we do want 598 00:26:56,880 --> 00:26:59,639 Speaker 1: to play, you know, Devil's advocate a little bit here. Yeah, agreed. 599 00:26:59,680 --> 00:27:01,720 Speaker 1: I like to play Devil's advocate in my home. It 600 00:27:01,760 --> 00:27:04,000 Speaker 1: annoys my wife sometimes because she's like, just tell me 601 00:27:04,040 --> 00:27:06,520 Speaker 1: what you think but I think it's important here even 602 00:27:06,520 --> 00:27:09,240 Speaker 1: though you said, hey, I feel like this is the 603 00:27:09,240 --> 00:27:11,520 Speaker 1: best decision for me. It's not my number one financial goal, 604 00:27:11,560 --> 00:27:13,399 Speaker 1: but it's something that it sounds like you're putting a 605 00:27:13,440 --> 00:27:15,919 Speaker 1: lot of focus into paying off this mortgage. And we 606 00:27:15,960 --> 00:27:18,560 Speaker 1: don't want to dissuade you from paying off your mortgage 607 00:27:18,560 --> 00:27:20,399 Speaker 1: if that's your goal, but we do want to give 608 00:27:20,440 --> 00:27:22,440 Speaker 1: you some food for thoughts, some things to think through 609 00:27:22,760 --> 00:27:25,760 Speaker 1: before you say yes, this is definitely the path I'm 610 00:27:25,760 --> 00:27:28,320 Speaker 1: going down, and like it makes me think mad of 611 00:27:28,600 --> 00:27:30,359 Speaker 1: a couple of people that have been on the show before. 612 00:27:30,680 --> 00:27:32,440 Speaker 1: You know, a lot of people in the personal finance realm. 613 00:27:32,440 --> 00:27:36,320 Speaker 1: They've got different opinions or at least different reactions based 614 00:27:36,359 --> 00:27:40,560 Speaker 1: on kind of interior psychology. And Morgan Housell and Andy 615 00:27:40,640 --> 00:27:44,640 Speaker 1: for marriage, kids and money, they brilliant dudes paid off 616 00:27:44,640 --> 00:27:47,040 Speaker 1: their mortgage even though the numbers would have told them 617 00:27:47,040 --> 00:27:49,480 Speaker 1: to do something else, right, And those guys they're smart. 618 00:27:49,880 --> 00:27:53,199 Speaker 1: I really like their work. And so it's not that 619 00:27:53,240 --> 00:27:56,600 Speaker 1: people can't make different decisions based on the same information. 620 00:27:56,880 --> 00:27:59,719 Speaker 1: It's certainly not a bad thing to prioritize getting rid 621 00:27:59,760 --> 00:28:02,280 Speaker 1: of death. But he mentioned the episode that we just 622 00:28:02,320 --> 00:28:04,879 Speaker 1: did with Tom Anderson. Tom he said last Monday that 623 00:28:05,520 --> 00:28:08,560 Speaker 1: doing this impact your liquidity and it reduces options that 624 00:28:08,600 --> 00:28:11,439 Speaker 1: you might have. And I just want to mention Dakota 625 00:28:11,520 --> 00:28:14,720 Speaker 1: mentioned in his question that he bought a duplex, So 626 00:28:14,800 --> 00:28:16,600 Speaker 1: my guess is that he's renting out the other half. 627 00:28:16,600 --> 00:28:19,800 Speaker 1: He's like a budding real estate investor. And one thing 628 00:28:19,800 --> 00:28:22,600 Speaker 1: that Dakota, you could prioritize is to save up the 629 00:28:22,600 --> 00:28:24,280 Speaker 1: money you would have used to pay off the mortgage 630 00:28:24,320 --> 00:28:26,720 Speaker 1: more quickly in order to purchase that next property in 631 00:28:26,720 --> 00:28:28,880 Speaker 1: the next couple of years. Maybe next time you get 632 00:28:28,880 --> 00:28:32,040 Speaker 1: a quadplex, I don't know, and you start growing wealth 633 00:28:32,320 --> 00:28:35,040 Speaker 1: by adding real estate to your portfolio. And so I 634 00:28:35,080 --> 00:28:37,840 Speaker 1: guess my only thing is not that paying down mortgage 635 00:28:37,880 --> 00:28:40,880 Speaker 1: debt is a bad thing, but it could prevent you 636 00:28:41,000 --> 00:28:44,400 Speaker 1: from taking other actions that could really impact your ability 637 00:28:44,440 --> 00:28:46,560 Speaker 1: to grow well for yourself. Yeah. Yeah, And in particular, 638 00:28:46,600 --> 00:28:48,600 Speaker 1: when we're talking about paying off a mortgage that's got 639 00:28:48,720 --> 00:28:51,000 Speaker 1: a fairly low interest rate, right, Like he's talking about 640 00:28:51,000 --> 00:28:53,000 Speaker 1: a rate that's close to five percent, that's not bad 641 00:28:53,080 --> 00:28:55,880 Speaker 1: in today's environment when you can earn like pretty much 642 00:28:55,880 --> 00:28:59,160 Speaker 1: that much just by saving it. So DA good enough 643 00:28:59,160 --> 00:29:01,440 Speaker 1: of all that well actually get to your specific question. 644 00:29:01,480 --> 00:29:04,920 Speaker 1: You know, let's talk about optimizing those mortgage payments. And 645 00:29:04,920 --> 00:29:07,200 Speaker 1: so if paying office that is one of your major 646 00:29:07,240 --> 00:29:10,760 Speaker 1: financial priorities, you're doing a great job. Some folks will 647 00:29:10,800 --> 00:29:13,200 Speaker 1: save up enough to make an extra payment towards the 648 00:29:13,320 --> 00:29:16,160 Speaker 1: end of the year. That approach, that strategy, just that 649 00:29:16,240 --> 00:29:18,760 Speaker 1: one extra payment every year that will take five years 650 00:29:18,840 --> 00:29:21,760 Speaker 1: off of a thirty year mortgage. It reduces the amount 651 00:29:21,800 --> 00:29:25,080 Speaker 1: that you pay towards interest significantly. So that's one strategy 652 00:29:25,120 --> 00:29:27,280 Speaker 1: that you can take. But I think that paying just 653 00:29:27,760 --> 00:29:29,800 Speaker 1: a little bit extra, paying a little more when you 654 00:29:29,840 --> 00:29:32,160 Speaker 1: have the money on hand, that just makes the most sense. 655 00:29:32,320 --> 00:29:36,160 Speaker 1: In this way, there's there's less of a prescribed perfect 656 00:29:36,200 --> 00:29:38,120 Speaker 1: way of doing things as opposed to like a more 657 00:29:38,240 --> 00:29:42,000 Speaker 1: like more of an emotional or psychological win standpoint, right like, 658 00:29:42,200 --> 00:29:44,800 Speaker 1: because basically Dacode is wanting to crunch the numbers perfectly. 659 00:29:44,840 --> 00:29:46,280 Speaker 1: He wants there, He wants to be able to enter 660 00:29:46,280 --> 00:29:49,720 Speaker 1: the numbers into a calculator and get essentially the exact result. 661 00:29:49,920 --> 00:29:52,000 Speaker 1: But I think what you should focus on instead, Dacode, 662 00:29:52,160 --> 00:29:55,760 Speaker 1: is do what you know will yield you the highest 663 00:29:55,840 --> 00:29:58,800 Speaker 1: results from a personal standpoint, like from an emotional from 664 00:29:58,840 --> 00:30:02,400 Speaker 1: that psychological standpoint, because you know that if you look 665 00:30:02,440 --> 00:30:04,600 Speaker 1: at the numbers, the most optimal thing to do would 666 00:30:04,600 --> 00:30:07,480 Speaker 1: be to not take those additional dollars to put towards 667 00:30:07,600 --> 00:30:09,720 Speaker 1: that debt. It would be to take those those dollars 668 00:30:09,720 --> 00:30:11,680 Speaker 1: and instead invest that money in the market, or to 669 00:30:11,720 --> 00:30:14,200 Speaker 1: take those dollars and to put them save them up 670 00:30:14,240 --> 00:30:17,040 Speaker 1: as another down payment on another investment property. But again, 671 00:30:17,080 --> 00:30:19,320 Speaker 1: we've all got different goals, we've all got different levels 672 00:30:19,320 --> 00:30:21,959 Speaker 1: of risk that we are willing to expose ourselves too. 673 00:30:22,560 --> 00:30:25,200 Speaker 1: And so with that mind, I would say, worry less 674 00:30:25,240 --> 00:30:29,640 Speaker 1: about the perfect amounts of additional payment that you should 675 00:30:29,640 --> 00:30:32,120 Speaker 1: be making towards that mortgage. You know where you're looking 676 00:30:32,120 --> 00:30:35,600 Speaker 1: at diminishing returns, and instead focus on the returns that 677 00:30:35,640 --> 00:30:38,560 Speaker 1: you are feeling just from a personal standpoint, right, Like, 678 00:30:38,600 --> 00:30:42,080 Speaker 1: this is where the personal side of personal finances comes 679 00:30:42,080 --> 00:30:45,360 Speaker 1: into place, less about finding that perfect number and it's 680 00:30:45,400 --> 00:30:47,920 Speaker 1: more about the psychological wins. Yeah, I mean that's exactly 681 00:30:47,920 --> 00:30:50,240 Speaker 1: what Morgan and Andy, the guys are referenced earlier, have 682 00:30:50,440 --> 00:30:52,200 Speaker 1: told us. They're like, we know it's not the smart 683 00:30:52,200 --> 00:30:53,840 Speaker 1: money move, but it's the best thing for us. And 684 00:30:54,280 --> 00:30:56,280 Speaker 1: if you think about it that way. That's totally fine, 685 00:30:56,320 --> 00:30:59,320 Speaker 1: Like make that move. Paying more quickly on that mortgage 686 00:30:59,360 --> 00:31:01,239 Speaker 1: when you have the money in hand makes sense. Make 687 00:31:01,240 --> 00:31:03,200 Speaker 1: sure that it's going towards the principle, right, and not 688 00:31:03,240 --> 00:31:07,280 Speaker 1: towards interest payments. But yeah, we're talking about overall optimization. 689 00:31:07,520 --> 00:31:09,240 Speaker 1: Paying off the mortgage like that. At least from a 690 00:31:09,440 --> 00:31:13,320 Speaker 1: historical numerical liquidity standpoint, it's not going to be the 691 00:31:13,360 --> 00:31:16,360 Speaker 1: most optimized path. But personal finance is also not about 692 00:31:16,720 --> 00:31:19,320 Speaker 1: fully optimized, because if it was, we would have just 693 00:31:19,360 --> 00:31:22,080 Speaker 1: told Lena a second ago to invest all her money 694 00:31:22,080 --> 00:31:24,280 Speaker 1: and not think about having fun now, because that is 695 00:31:24,640 --> 00:31:28,200 Speaker 1: kind of the most rational way to proceed. But we're 696 00:31:28,200 --> 00:31:30,200 Speaker 1: not fully rational human beings, and we shouldn't be right. 697 00:31:30,360 --> 00:31:34,200 Speaker 1: We should have money to enjoy, we should use money 698 00:31:34,320 --> 00:31:35,840 Speaker 1: to make sure that we can sleep well at night. 699 00:31:35,840 --> 00:31:38,960 Speaker 1: And so hopefully, Dakota, you're able to take all of 700 00:31:38,960 --> 00:31:40,840 Speaker 1: this information because I don't know. I went into the 701 00:31:40,880 --> 00:31:43,000 Speaker 1: back end of my mortgage provider matter. I was just curious. 702 00:31:43,160 --> 00:31:45,600 Speaker 1: They had a cute little calculator dial thing in that 703 00:31:45,640 --> 00:31:47,440 Speaker 1: I could kind of see, well, how much what would 704 00:31:47,440 --> 00:31:49,520 Speaker 1: happen if I paid a little extra And it said 705 00:31:49,560 --> 00:31:51,800 Speaker 1: if I just kind of slid it over to fifty bucks, 706 00:31:52,000 --> 00:31:53,959 Speaker 1: and it said I would save twelve thousand dollars in 707 00:31:53,960 --> 00:31:55,640 Speaker 1: interest over the life at loan and I would cut 708 00:31:55,920 --> 00:31:58,760 Speaker 1: one year and nine months off of my payments. And 709 00:31:58,800 --> 00:32:00,520 Speaker 1: I was like, that's that's pretty good. Like just an 710 00:32:00,560 --> 00:32:03,080 Speaker 1: extra fifty bucks that would make a big difference over time. 711 00:32:03,080 --> 00:32:05,800 Speaker 1: And so I see the psychological benefit in that, and 712 00:32:05,840 --> 00:32:08,520 Speaker 1: I get why people would make that decision, but it's 713 00:32:08,520 --> 00:32:10,760 Speaker 1: just not the decision that you and I have made, right, 714 00:32:10,960 --> 00:32:12,920 Speaker 1: That's right. Yeah, And again I think it does also 715 00:32:13,000 --> 00:32:16,320 Speaker 1: go back to what Dakota would do with those dollars otherwise, 716 00:32:16,320 --> 00:32:18,200 Speaker 1: because I think that is why most people like that 717 00:32:18,600 --> 00:32:21,600 Speaker 1: is the best argument for making additional payments on your mortgages, 718 00:32:21,600 --> 00:32:23,160 Speaker 1: because if you know that you're just going to spend 719 00:32:23,200 --> 00:32:25,040 Speaker 1: that money, if you're gonna fritter it away, if you're 720 00:32:25,080 --> 00:32:28,040 Speaker 1: gonna go on those expensive family vacations like Tiffany's family 721 00:32:28,120 --> 00:32:30,040 Speaker 1: is doing. Yeah, if that is what you're going to 722 00:32:30,120 --> 00:32:32,040 Speaker 1: do with that money, then maybe it does make sense 723 00:32:32,040 --> 00:32:35,200 Speaker 1: for you to trick yourself into squirreling away more by 724 00:32:35,440 --> 00:32:37,640 Speaker 1: sinking that equity into that home. It's the burden the 725 00:32:37,640 --> 00:32:39,760 Speaker 1: hand approach, which makes sense to me. Yeah, but if 726 00:32:39,800 --> 00:32:43,000 Speaker 1: you know, if you can be maybe like extra discipline 727 00:32:43,040 --> 00:32:44,280 Speaker 1: and say it, well, I'm not going to put that 728 00:32:44,320 --> 00:32:47,520 Speaker 1: additional money towards the mortgage, but I'm going to set 729 00:32:47,520 --> 00:32:49,360 Speaker 1: it aside. I'm gonna put it in this bucket, maybe 730 00:32:49,360 --> 00:32:51,960 Speaker 1: a savings bucket through your checking account, and I'm only 731 00:32:51,960 --> 00:32:54,360 Speaker 1: going to use that money to invest in an opportunity 732 00:32:54,400 --> 00:32:57,360 Speaker 1: that comes along, or to look forward the next rental property. 733 00:32:57,560 --> 00:32:59,560 Speaker 1: If you're looking to optimize, I think that is the 734 00:32:59,600 --> 00:33:02,600 Speaker 1: apps loute best way to optimize every single dollar. Yeah 735 00:33:02,640 --> 00:33:04,960 Speaker 1: for sure. All right, we got more questions to get to, Matt, 736 00:33:05,000 --> 00:33:08,040 Speaker 1: including a listener who wants to know about the timing 737 00:33:08,080 --> 00:33:11,040 Speaker 1: of paying off a credit card balance and whether that 738 00:33:11,120 --> 00:33:13,600 Speaker 1: impacts the rewards that he receives. We'll get to that 739 00:33:13,600 --> 00:33:25,479 Speaker 1: one and more right after this. All right, we are 740 00:33:25,520 --> 00:33:27,400 Speaker 1: back from the break, and it is now time to 741 00:33:27,400 --> 00:33:29,240 Speaker 1: hear from a listener who is wanting to make sure 742 00:33:29,280 --> 00:33:32,080 Speaker 1: that he is not paying off his credit card too 743 00:33:32,120 --> 00:33:36,520 Speaker 1: soon in order to receive those rewards. Let's hear it. Hey, guys, 744 00:33:36,640 --> 00:33:39,840 Speaker 1: Matt here from Winter Village, just outside Athens. I'm curious 745 00:33:39,920 --> 00:33:43,560 Speaker 1: about something with using credit cards. Do you still get 746 00:33:43,560 --> 00:33:46,520 Speaker 1: the rewards for using a credit card if you pay 747 00:33:46,600 --> 00:33:49,480 Speaker 1: off the purchase like immediately, or does it need to 748 00:33:49,520 --> 00:33:51,840 Speaker 1: sort of sit in your statement for longer than a day. 749 00:33:52,800 --> 00:33:55,520 Speaker 1: I'm just curious. I appreciate everything you'll have done for 750 00:33:55,800 --> 00:33:59,000 Speaker 1: me and my family. Thanks, Matt. We appreciate your kind 751 00:33:59,000 --> 00:34:01,760 Speaker 1: words and other Matt, who's sitting right here in front 752 00:34:01,760 --> 00:34:04,360 Speaker 1: of me. It's interesting. I feel like I've heard so 753 00:34:04,480 --> 00:34:06,760 Speaker 1: much confusion over the years from people when it comes 754 00:34:06,800 --> 00:34:09,719 Speaker 1: to when and how they pay their credit cards off, 755 00:34:10,040 --> 00:34:12,799 Speaker 1: and they're not sure about how it impacts their credit score, 756 00:34:12,840 --> 00:34:15,840 Speaker 1: they're not sure how it impacts their rewards. So while 757 00:34:16,160 --> 00:34:17,719 Speaker 1: this isn't the kind of question we get all the time, 758 00:34:17,719 --> 00:34:19,160 Speaker 1: I think this is something that lingers in the back 759 00:34:19,160 --> 00:34:21,640 Speaker 1: of people's minds. So I'm glad we're able to address 760 00:34:21,680 --> 00:34:24,040 Speaker 1: it today a lot of people, and we'll talk about 761 00:34:24,040 --> 00:34:27,000 Speaker 1: actually why it might make sense in some ways to 762 00:34:27,160 --> 00:34:29,239 Speaker 1: pay off your credit card more regularly like Matt's doing. 763 00:34:29,440 --> 00:34:31,279 Speaker 1: And I think one of the good things is it 764 00:34:31,320 --> 00:34:34,640 Speaker 1: seems like he's allergic to debt, which is a good thing, 765 00:34:34,760 --> 00:34:37,640 Speaker 1: especially in particularly allergic to credit card debt, because that 766 00:34:37,840 --> 00:34:41,239 Speaker 1: is one of the worst kinds of debt you could 767 00:34:41,320 --> 00:34:44,160 Speaker 1: get into, especially now as interest rates have been rising, right, 768 00:34:44,360 --> 00:34:47,040 Speaker 1: and there are actually a couple of benefits that you 769 00:34:47,040 --> 00:34:50,080 Speaker 1: can snag by paying your credit card off regularly instead 770 00:34:50,120 --> 00:34:52,520 Speaker 1: of just once a month. And so basically here's how 771 00:34:52,520 --> 00:34:55,319 Speaker 1: it works. It's going to keep your utilization low, which 772 00:34:55,360 --> 00:34:56,920 Speaker 1: is a major factor in your credit score. And that 773 00:34:57,000 --> 00:34:59,440 Speaker 1: just basically is a fancy way of saying the amount 774 00:34:59,480 --> 00:35:02,000 Speaker 1: of credit you have available to you, while using a 775 00:35:02,080 --> 00:35:05,600 Speaker 1: small amount of that is going to reflect better and 776 00:35:05,640 --> 00:35:07,880 Speaker 1: give you a higher credit score. So by paying it 777 00:35:07,920 --> 00:35:11,200 Speaker 1: off like regularly, maybe once a week, or even if 778 00:35:11,239 --> 00:35:13,640 Speaker 1: Matt's doing it, maybe after every purchase, that is a 779 00:35:13,640 --> 00:35:16,520 Speaker 1: way to keep your utilization low. The amount of debt 780 00:35:16,560 --> 00:35:18,680 Speaker 1: that the credit card company reports to the credit bureaus 781 00:35:18,960 --> 00:35:21,439 Speaker 1: is going to be minimal to nonexistent, which just makes 782 00:35:21,440 --> 00:35:23,600 Speaker 1: you look better from a credit perspective. But it's also 783 00:35:23,640 --> 00:35:26,799 Speaker 1: got this added benefit of treating your credit card, which 784 00:35:26,800 --> 00:35:28,799 Speaker 1: Matt and I have always said is a superior method 785 00:35:28,840 --> 00:35:30,360 Speaker 1: of payment for more and that you go back and 786 00:35:30,400 --> 00:35:33,920 Speaker 1: listen to our recent episode about using your credit card 787 00:35:33,960 --> 00:35:36,840 Speaker 1: the way nature intended, the way God intended it, but 788 00:35:37,040 --> 00:35:39,560 Speaker 1: using it more like a debit card is an interesting 789 00:35:39,600 --> 00:35:41,759 Speaker 1: way to kind of mentally approach it, which is what 790 00:35:41,800 --> 00:35:44,680 Speaker 1: Matt's doing right. Especially let's say you've been riding the 791 00:35:44,719 --> 00:35:47,440 Speaker 1: day of Ramsey Train, but you're ready to dip your 792 00:35:47,440 --> 00:35:49,279 Speaker 1: toes in the credit card waters because you've been listening 793 00:35:49,280 --> 00:35:51,520 Speaker 1: to how to Money or somebody else for a little while. Well, 794 00:35:51,680 --> 00:35:53,799 Speaker 1: paying off your credit card more regularly can help you 795 00:35:53,800 --> 00:35:56,319 Speaker 1: get accustomed to this new way of life, ensuring that 796 00:35:56,360 --> 00:35:59,759 Speaker 1: you're using what we'd say is a tool properly. You're 797 00:35:59,800 --> 00:36:02,080 Speaker 1: using it the right way instead of getting yourself into 798 00:36:02,080 --> 00:36:04,680 Speaker 1: trouble with it. Yeah, By paying that off more frequently, 799 00:36:04,719 --> 00:36:06,200 Speaker 1: like let's say you are paying it off for every week, 800 00:36:06,239 --> 00:36:08,120 Speaker 1: it gives you, it's a better representation of how much 801 00:36:08,120 --> 00:36:10,360 Speaker 1: money you truly do have on hand, as opposed to 802 00:36:10,560 --> 00:36:11,719 Speaker 1: wait until the end of the month and all of 803 00:36:11,760 --> 00:36:14,080 Speaker 1: a sudden you have a massive shock to your checking account, 804 00:36:14,120 --> 00:36:15,839 Speaker 1: which is kind of part of the breakdown for credit 805 00:36:15,840 --> 00:36:17,719 Speaker 1: cards for most people. As you're not seeing the correlation 806 00:36:17,760 --> 00:36:21,040 Speaker 1: between spending and less money in your account, You're continuing 807 00:36:21,040 --> 00:36:22,919 Speaker 1: to spend just like you got all this money on hand, 808 00:36:22,920 --> 00:36:25,200 Speaker 1: but not you've spent a quarter of your money already 809 00:36:25,239 --> 00:36:27,359 Speaker 1: for the month or a half and you're spending like 810 00:36:27,719 --> 00:36:30,279 Speaker 1: you've got it all still. Yeah, exactly, that's the psychological 811 00:36:30,280 --> 00:36:32,640 Speaker 1: component of credit cards that that's the part of it 812 00:36:32,760 --> 00:36:34,960 Speaker 1: that we don't like. But it is important to note 813 00:36:35,000 --> 00:36:38,359 Speaker 1: that the credit card companies, they don't honestly care when 814 00:36:38,360 --> 00:36:40,160 Speaker 1: it is or how it is that you pay your bill. 815 00:36:40,600 --> 00:36:42,080 Speaker 1: I mean, you know, they definitely want you to pay 816 00:36:42,080 --> 00:36:44,239 Speaker 1: your bill at some point, but they're more than fine 817 00:36:44,280 --> 00:36:46,520 Speaker 1: with you taking your sweet time, right Like, they're gonna 818 00:36:46,560 --> 00:36:49,719 Speaker 1: pay you your rewards. But if you pay late, you know, 819 00:36:49,840 --> 00:36:51,480 Speaker 1: or if you just pay the minimum amount due, they're 820 00:36:51,520 --> 00:36:54,120 Speaker 1: gonna make out like bandits. Yeah, I actually prefer you 821 00:36:54,160 --> 00:36:56,919 Speaker 1: as a customer your credit card exactly. Yeah, they do care. 822 00:36:57,000 --> 00:37:00,239 Speaker 1: They want you to pay later because those rewards are 823 00:37:00,239 --> 00:37:02,839 Speaker 1: going to pale in comparison to the interest that they 824 00:37:02,840 --> 00:37:06,600 Speaker 1: can generate from the poor credit card habits from the 825 00:37:06,600 --> 00:37:09,479 Speaker 1: majority of customers out there. Basically fifty percent of credit 826 00:37:09,480 --> 00:37:12,040 Speaker 1: card users handle their cards this way, where they're not 827 00:37:12,440 --> 00:37:14,880 Speaker 1: paying their cards on time, where they are paying interest 828 00:37:14,920 --> 00:37:17,200 Speaker 1: to the banks. That's not good. We don't want folks 829 00:37:17,440 --> 00:37:19,800 Speaker 1: using credit cards if they can't pay their bill on 830 00:37:19,920 --> 00:37:22,319 Speaker 1: time and in full every single month. Yeah, but Matt, 831 00:37:22,360 --> 00:37:24,600 Speaker 1: let's get directly to whether or not you get those 832 00:37:24,600 --> 00:37:26,640 Speaker 1: credit card rewards even if you pay off a purchase 833 00:37:27,040 --> 00:37:30,200 Speaker 1: right away. So yeah, that taco you just bought a 834 00:37:30,200 --> 00:37:34,080 Speaker 1: Taco Bell might post within twenty four hours pretty quickly. 835 00:37:34,440 --> 00:37:37,520 Speaker 1: But do you get the rewards immediately, No, you don't. 836 00:37:37,600 --> 00:37:39,879 Speaker 1: Those purchases certainly get the downsides of Taco Bell within 837 00:37:39,920 --> 00:37:42,799 Speaker 1: direct Yes you do. I haven't had Taco Bell in 838 00:37:42,800 --> 00:37:44,960 Speaker 1: many years because I've experienced those down dual fills out 839 00:37:44,960 --> 00:37:48,520 Speaker 1: in about twenty four minutes. I used to. But those 840 00:37:48,560 --> 00:37:51,400 Speaker 1: purchases basically their charge your account. No matter if you 841 00:37:51,440 --> 00:37:53,719 Speaker 1: pay off that purchase that day or if you wait 842 00:37:53,840 --> 00:37:56,399 Speaker 1: a week or even a month, right, that purchase has 843 00:37:56,480 --> 00:38:00,359 Speaker 1: triggered whatever reward you are entitled to. And it's not 844 00:38:00,400 --> 00:38:02,760 Speaker 1: like it erases that purchase as if it didn't happen. 845 00:38:03,120 --> 00:38:05,880 Speaker 1: So now, from a personal standpoint, when you're looking at 846 00:38:05,880 --> 00:38:08,120 Speaker 1: your current balance, it looks like it's been a race, 847 00:38:08,480 --> 00:38:11,799 Speaker 1: but not from a cruel a reward standpoint, because when 848 00:38:12,040 --> 00:38:14,480 Speaker 1: you paid your bill or how often you made payments, 849 00:38:14,640 --> 00:38:17,160 Speaker 1: it has no impact on the rewards that you're earning. Right, 850 00:38:17,160 --> 00:38:19,919 Speaker 1: It's about how expensive that taco was, So feel free 851 00:38:19,960 --> 00:38:23,359 Speaker 1: to pay as frequently as you like. That doesn't matter. 852 00:38:23,600 --> 00:38:26,239 Speaker 1: But whatever method helps you keep your usage in check 853 00:38:26,280 --> 00:38:28,680 Speaker 1: and your budget intact is probably the best one to take. 854 00:38:28,880 --> 00:38:32,280 Speaker 1: There's just no need though we would say to obsess necessarily. 855 00:38:32,520 --> 00:38:34,359 Speaker 1: But if it works for you, then go for it. 856 00:38:34,480 --> 00:38:37,640 Speaker 1: But from that rewards a cruel standpoint, you're going to 857 00:38:37,719 --> 00:38:40,960 Speaker 1: get those rewards after the statement closes, even if you 858 00:38:40,960 --> 00:38:44,279 Speaker 1: pay off that expense. Basically, right if it happened exactly, Yeah, 859 00:38:44,280 --> 00:38:46,640 Speaker 1: that charge has been posted. And even though it looks 860 00:38:46,640 --> 00:38:49,160 Speaker 1: like according to your balance that charge never happened to you, 861 00:38:49,360 --> 00:38:53,200 Speaker 1: it looks like that charge never happened, but rewards points 862 00:38:53,200 --> 00:38:56,279 Speaker 1: from a mile standpoint, it has totally happened. And as 863 00:38:56,360 --> 00:38:58,440 Speaker 1: far as when you actually will see those points hit 864 00:38:58,440 --> 00:39:01,480 Speaker 1: your account, sometimes it's like within a few days after 865 00:39:02,040 --> 00:39:04,680 Speaker 1: you make those charges, but most cards it takes about 866 00:39:04,800 --> 00:39:07,879 Speaker 1: thirty days. It takes one billing cycle essentially. I think 867 00:39:07,920 --> 00:39:10,160 Speaker 1: American Express they say it can take up to like 868 00:39:10,200 --> 00:39:13,160 Speaker 1: sixty days before some of those points will post to 869 00:39:13,200 --> 00:39:16,680 Speaker 1: your account. You getting them, and that's what's important exactly, Yeah, Yeah, 870 00:39:16,680 --> 00:39:19,040 Speaker 1: we're definitely getting them. Actually, the only card that that 871 00:39:19,120 --> 00:39:22,080 Speaker 1: does things a little bit differently is the City Double 872 00:39:22,160 --> 00:39:25,120 Speaker 1: Cash card. That's actually one of our favorites. We feature 873 00:39:25,160 --> 00:39:28,319 Speaker 1: that one in our credit card optimization strategy. We've got 874 00:39:28,360 --> 00:39:30,560 Speaker 1: a link in the show notes to that article that 875 00:39:30,600 --> 00:39:32,640 Speaker 1: will make sure to link to. But this card actually 876 00:39:32,640 --> 00:39:36,359 Speaker 1: pays out one percent when you spend that money when 877 00:39:36,400 --> 00:39:38,760 Speaker 1: you make those charges, but then you earn one percent 878 00:39:38,920 --> 00:39:41,680 Speaker 1: when you pay your bill. So as long as you're 879 00:39:41,719 --> 00:39:44,239 Speaker 1: you know, you're paying the minimum amount every single month. Again, 880 00:39:44,280 --> 00:39:47,040 Speaker 1: this is not the approach the strategy that we would 881 00:39:47,040 --> 00:39:48,840 Speaker 1: recommend for you to do, to only pay the minimums, 882 00:39:49,000 --> 00:39:50,680 Speaker 1: But as long as you're paying your bill, you're earning 883 00:39:50,680 --> 00:39:53,520 Speaker 1: two percent on all of your purchases, which makes it 884 00:39:53,600 --> 00:39:56,759 Speaker 1: a just a great catch all card for categories that 885 00:39:56,800 --> 00:40:00,000 Speaker 1: you can't easily optimize further. But it's the only card 886 00:40:00,000 --> 00:40:02,360 Speaker 1: that I know that's not basing the rewards that it 887 00:40:02,400 --> 00:40:05,840 Speaker 1: dolls out purely upon your spending it. It's also partly 888 00:40:05,880 --> 00:40:08,400 Speaker 1: based on you paying that bill off. But Matt it 889 00:40:08,600 --> 00:40:10,120 Speaker 1: you know, it sounds like you're doing just fine with 890 00:40:10,120 --> 00:40:12,000 Speaker 1: with how it is that you're handling your credit cards. 891 00:40:12,040 --> 00:40:14,400 Speaker 1: We would recommend for you to honestly just keep it up. 892 00:40:14,840 --> 00:40:17,399 Speaker 1: We don't want you to log in every single day 893 00:40:17,400 --> 00:40:20,200 Speaker 1: where you're making sure your points post. It might take 894 00:40:20,200 --> 00:40:21,799 Speaker 1: a couple of weeks, you know, it might take more 895 00:40:21,800 --> 00:40:24,400 Speaker 1: than even that full billing cycle before it shows up. 896 00:40:24,680 --> 00:40:27,040 Speaker 1: We don't want you to stress over it from that standpoint, 897 00:40:27,120 --> 00:40:28,879 Speaker 1: But if it is helpful for you to go in there, 898 00:40:29,480 --> 00:40:31,640 Speaker 1: in particularly if you make a like a really large purchase, 899 00:40:31,800 --> 00:40:34,120 Speaker 1: maybe you're booking some plane tickets, or you're booking some 900 00:40:34,200 --> 00:40:37,360 Speaker 1: lodging for some travel for the spring or the summer. 901 00:40:37,719 --> 00:40:40,000 Speaker 1: And if that's not a charge that you want to 902 00:40:40,000 --> 00:40:42,520 Speaker 1: sit have sit there on your balance where you're taking 903 00:40:42,560 --> 00:40:45,440 Speaker 1: up a large percentage of the credit that's available to you, well, 904 00:40:45,440 --> 00:40:47,839 Speaker 1: then by all means going there pay that balance off. 905 00:40:48,000 --> 00:40:49,880 Speaker 1: But otherwise, you know, if you're using it for your 906 00:40:49,920 --> 00:40:52,399 Speaker 1: day to day purchases, I wouldn't worry too much about it. Yeah, so, Matt, 907 00:40:52,400 --> 00:40:55,600 Speaker 1: hopefully that clarified some stuff for you and you're all 908 00:40:55,600 --> 00:40:59,000 Speaker 1: set to keep earning rewards and paying your bill off 909 00:40:59,080 --> 00:41:01,400 Speaker 1: on time. But let's get to our next question. This 910 00:41:01,440 --> 00:41:04,759 Speaker 1: one comes from and a young investor who is looking 911 00:41:04,800 --> 00:41:07,279 Speaker 1: to kind of ramp up our contributions and do even more. 912 00:41:07,640 --> 00:41:10,319 Speaker 1: Hello Matt and Joel. My name is Logan and I'm 913 00:41:10,320 --> 00:41:13,080 Speaker 1: from Missouri. I had some questions about saving for retirement. 914 00:41:13,480 --> 00:41:16,360 Speaker 1: I'm on money Gear five. I'm currently contributing ten percent 915 00:41:16,400 --> 00:41:18,400 Speaker 1: to my work four own K and only have fourteen 916 00:41:19,480 --> 00:41:22,239 Speaker 1: twenty eight so I want to for sure bump up 917 00:41:22,640 --> 00:41:25,160 Speaker 1: my investing to five percent to meet this money gear, 918 00:41:25,440 --> 00:41:26,840 Speaker 1: but wasn't sure if I should put it in the 919 00:41:26,840 --> 00:41:30,000 Speaker 1: four oh one K or open up a roth Ira. Also, 920 00:41:30,040 --> 00:41:32,319 Speaker 1: I could bump up my contribution to twenty percent and 921 00:41:32,400 --> 00:41:34,279 Speaker 1: come close to the four o one K limit at 922 00:41:34,280 --> 00:41:37,440 Speaker 1: the end of the year. If I do this, I 923 00:41:37,440 --> 00:41:39,279 Speaker 1: won't feel my race at all, and it it would be 924 00:41:39,360 --> 00:41:41,439 Speaker 1: as if I'm making the same amount that I'm used to, 925 00:41:41,600 --> 00:41:44,600 Speaker 1: which would be tight since the cost of daycare of 926 00:41:44,680 --> 00:41:48,200 Speaker 1: two children is pretty expensive. I was wondering if there 927 00:41:48,280 --> 00:41:49,799 Speaker 1: was a rule of thumb to know if you're going 928 00:41:49,840 --> 00:41:54,160 Speaker 1: to have enough for retirement. Also, last question, I hear 929 00:41:54,200 --> 00:41:58,080 Speaker 1: you guys talking about hsay's a lot. My work has hsas, 930 00:41:58,120 --> 00:42:03,440 Speaker 1: but it's not my preferred method for our health insurance. 931 00:42:03,800 --> 00:42:06,360 Speaker 1: If we are not planning to use an HSA for 932 00:42:06,480 --> 00:42:09,880 Speaker 1: health insurance, should I still consider using it for saving 933 00:42:09,880 --> 00:42:14,480 Speaker 1: for retirement. Thanks for all you guys's assistants. All right, Logan, 934 00:42:14,520 --> 00:42:16,480 Speaker 1: thank you so much for that question. Joel. We've always 935 00:42:16,480 --> 00:42:18,239 Speaker 1: got to have at least at least one question that 936 00:42:18,239 --> 00:42:20,040 Speaker 1: has to do with investing, So it's great to hear 937 00:42:20,080 --> 00:42:23,960 Speaker 1: from another investor who is killing it. And Logan, you know, 938 00:42:24,000 --> 00:42:26,920 Speaker 1: aside from future investing that you're you're considering that you 939 00:42:27,000 --> 00:42:29,680 Speaker 1: might do, you are already socking away ten percent of 940 00:42:29,719 --> 00:42:31,480 Speaker 1: your income and it sounds like you don't have any 941 00:42:31,760 --> 00:42:35,040 Speaker 1: higher rate debt in your life. This is especially amazing 942 00:42:35,040 --> 00:42:37,880 Speaker 1: considering that you've got two young kids in daycare. Daycare 943 00:42:38,000 --> 00:42:41,759 Speaker 1: is not a super cheap thing in life, and you're 944 00:42:41,800 --> 00:42:43,920 Speaker 1: talking about bumping it up right. It would be massively 945 00:42:43,960 --> 00:42:46,680 Speaker 1: impressive if you are able to increase that to twenty percent. 946 00:42:46,960 --> 00:42:50,000 Speaker 1: Just shows that you are living frugally, you are prioritizing 947 00:42:50,040 --> 00:42:53,080 Speaker 1: investing in a major way. So just a massive kudos 948 00:42:53,280 --> 00:42:55,240 Speaker 1: to you, Logan, just right off the bat here. Yeah, 949 00:42:55,280 --> 00:42:58,360 Speaker 1: those years with young kids, multiple daycare account like you. 950 00:42:58,719 --> 00:43:00,799 Speaker 1: I remember when my first one and finally got into 951 00:43:00,880 --> 00:43:03,719 Speaker 1: kindergarten or actually into state funded pre k and I 952 00:43:03,760 --> 00:43:06,839 Speaker 1: was like, well, man, what it feels like you get 953 00:43:06,880 --> 00:43:10,200 Speaker 1: a massive raise, yes, which you're right. Yeah, I love 954 00:43:10,200 --> 00:43:12,080 Speaker 1: the direction of Logan's going because pretty I mean, you know, 955 00:43:12,280 --> 00:43:13,920 Speaker 1: I don't know how older kids are, but pretty soon 956 00:43:14,000 --> 00:43:15,640 Speaker 1: it's going to feel like she's going to get multiple 957 00:43:15,680 --> 00:43:17,640 Speaker 1: raises if she can get to twenty percent while she's 958 00:43:17,640 --> 00:43:19,560 Speaker 1: got two kids in daycare. Oh my gosh, imagine what 959 00:43:19,600 --> 00:43:21,080 Speaker 1: she's gonna be able to do when both of them 960 00:43:21,080 --> 00:43:24,040 Speaker 1: are in actual like school. She's not even four cover 961 00:43:24,080 --> 00:43:26,160 Speaker 1: any money for that, that is, so to get to 962 00:43:26,239 --> 00:43:28,680 Speaker 1: that point, now, Logan, like, don't beat yourself up. I 963 00:43:28,680 --> 00:43:30,520 Speaker 1: feel like you mentioned at one point, I've only got 964 00:43:30,520 --> 00:43:32,920 Speaker 1: fourteen thousand dollars at the age of twenty eight. That's 965 00:43:32,960 --> 00:43:36,399 Speaker 1: pretty good some and it's all about dialing up over 966 00:43:36,520 --> 00:43:39,080 Speaker 1: time what you're able to invest and continuing to do 967 00:43:39,120 --> 00:43:42,120 Speaker 1: it regularly, which it sounds like is exactly what you're doing. 968 00:43:42,160 --> 00:43:44,280 Speaker 1: So I would just say you should actually be thrilled 969 00:43:44,280 --> 00:43:46,319 Speaker 1: with where you're at and not upset about it. By 970 00:43:46,360 --> 00:43:48,960 Speaker 1: the way, let's talk about which accounts you should prioritize. 971 00:43:49,000 --> 00:43:51,400 Speaker 1: That's a big part of your question here. Should you 972 00:43:51,440 --> 00:43:53,000 Speaker 1: stick it all in the four one K or should 973 00:43:53,000 --> 00:43:56,080 Speaker 1: you open a roth Ira? Well, we're big fans of 974 00:43:56,120 --> 00:43:58,000 Speaker 1: going with your four one K until you've gotten the 975 00:43:58,000 --> 00:44:00,279 Speaker 1: full company match. I didn't. You didn't mention whether or 976 00:44:00,280 --> 00:44:02,440 Speaker 1: not you have access to a match. I hope you do, so, 977 00:44:02,480 --> 00:44:04,239 Speaker 1: I hope that ten percent you're putting in comes with 978 00:44:04,560 --> 00:44:08,560 Speaker 1: additional money invested from your employer. But after that, we 979 00:44:08,560 --> 00:44:10,799 Speaker 1: would say, invest the rest of your dollars that you 980 00:44:10,880 --> 00:44:14,279 Speaker 1: have set aside to invest into that roth IRA. We 981 00:44:14,360 --> 00:44:16,560 Speaker 1: like that for a couple of reasons. One, you've got 982 00:44:16,560 --> 00:44:19,160 Speaker 1: some tax diversity when you do both of those accounts. 983 00:44:19,640 --> 00:44:21,719 Speaker 1: The ROTH accounts that are superior for a lot of folks, 984 00:44:21,800 --> 00:44:24,319 Speaker 1: especially folks who are earlier in their careers and who 985 00:44:24,320 --> 00:44:26,439 Speaker 1: are likely to make more money down the road, which 986 00:44:26,440 --> 00:44:28,040 Speaker 1: at the age of twenty eight, my guess is you've 987 00:44:28,080 --> 00:44:31,439 Speaker 1: got higher incomes in your future. The ROTH is also 988 00:44:31,520 --> 00:44:34,239 Speaker 1: more flexible than the four oh one K. Basically, we 989 00:44:34,320 --> 00:44:36,640 Speaker 1: sure hope that you never have to tap it, but 990 00:44:36,680 --> 00:44:38,960 Speaker 1: if you do need access to some of those dollars 991 00:44:38,960 --> 00:44:41,520 Speaker 1: at some point in the future, taking contributions out of 992 00:44:41,520 --> 00:44:43,360 Speaker 1: a ROTH is pretty simple, and you don't have to 993 00:44:43,400 --> 00:44:46,200 Speaker 1: pay taxes and penalties, So kind of taking the both 994 00:44:46,239 --> 00:44:49,360 Speaker 1: and approach, make sure you're getting the full matchremere employer, 995 00:44:49,400 --> 00:44:51,439 Speaker 1: then sticking some more money in the rath, then going 996 00:44:51,480 --> 00:44:53,080 Speaker 1: back to the four oh one K if you've got 997 00:44:53,120 --> 00:44:56,920 Speaker 1: extra to invest beyond the annual contribution limits. We think 998 00:44:56,960 --> 00:44:59,759 Speaker 1: that's the best strategy totally. Yeah, And Logan was also 999 00:45:00,000 --> 00:45:02,600 Speaker 1: asking about a rule of thumb for retirement savings to 1000 00:45:02,640 --> 00:45:05,759 Speaker 1: know if she had enough to retire. There certainly is. 1001 00:45:05,840 --> 00:45:07,960 Speaker 1: And this is important to mention because you're going to 1002 00:45:08,080 --> 00:45:10,880 Speaker 1: hear a lot of different conflicting advice, a lot of 1003 00:45:10,920 --> 00:45:13,880 Speaker 1: different numbers out there. For instance, a recent Bloomberg survey 1004 00:45:13,920 --> 00:45:17,440 Speaker 1: says that people need a grand total of three to 1005 00:45:17,640 --> 00:45:20,840 Speaker 1: five million dollars set aside in order to retire comfortably. 1006 00:45:21,000 --> 00:45:22,879 Speaker 1: I just got to moralized pretty quick. Yeah, this pretty 1007 00:45:22,960 --> 00:45:25,080 Speaker 1: much just sets folks up for failure because most folks 1008 00:45:25,160 --> 00:45:27,440 Speaker 1: are going to be unable to achieve this even with 1009 00:45:27,800 --> 00:45:30,479 Speaker 1: great investing habits. And so a better rule of thumb 1010 00:45:30,800 --> 00:45:35,040 Speaker 1: would be to amass twenty five times your annual expenses. 1011 00:45:35,080 --> 00:45:37,520 Speaker 1: We talked about this one in our recent episode on 1012 00:45:37,560 --> 00:45:41,080 Speaker 1: retiring early. But this is a great simple way to 1013 00:45:41,120 --> 00:45:43,360 Speaker 1: break down how much you might need. But that twenty 1014 00:45:43,360 --> 00:45:46,480 Speaker 1: five times your annual expenses is also an imperfect measurement 1015 00:45:46,760 --> 00:45:49,680 Speaker 1: because when it is that you retire, how much you're 1016 00:45:49,800 --> 00:45:52,560 Speaker 1: spending is likely to change within retirement is going to 1017 00:45:52,600 --> 00:45:54,400 Speaker 1: have an impact on it. Whether or not you have 1018 00:45:54,480 --> 00:45:55,920 Speaker 1: a paid off home, for instance, that's going to have 1019 00:45:55,960 --> 00:45:58,000 Speaker 1: a big impact on your expenses every single year. But 1020 00:45:58,040 --> 00:46:01,080 Speaker 1: then also different sources of income as well, like whether 1021 00:46:01,160 --> 00:46:03,000 Speaker 1: or not you have a pension, whether how much you're 1022 00:46:03,000 --> 00:46:05,279 Speaker 1: going to be receiving from Social Security that as well, 1023 00:46:05,400 --> 00:46:07,680 Speaker 1: right inflation, All of these things are going to need 1024 00:46:07,719 --> 00:46:10,479 Speaker 1: to be taken into account as well. But that being said, 1025 00:46:10,640 --> 00:46:12,800 Speaker 1: that rule of thumb twenty five times your annual expenses 1026 00:46:13,040 --> 00:46:15,960 Speaker 1: is a decent rule of thumb. So, for instance, let's 1027 00:46:16,000 --> 00:46:19,240 Speaker 1: say your annual expenses are somewhere in the forty thousand 1028 00:46:19,280 --> 00:46:22,600 Speaker 1: dollars a year range, Well, that means that one million 1029 00:46:22,600 --> 00:46:26,520 Speaker 1: dollars within your retirement account would theoretically be enough for 1030 00:46:26,560 --> 00:46:28,880 Speaker 1: you to retire around Yeah, I'm glad you mentioned the complexities, 1031 00:46:28,920 --> 00:46:30,560 Speaker 1: but also the rule of thumb. I think both of 1032 00:46:30,560 --> 00:46:33,040 Speaker 1: those things in conjunction you can kind of hone in 1033 00:46:33,080 --> 00:46:35,040 Speaker 1: and figure out what that rule of thumb should be 1034 00:46:35,080 --> 00:46:37,359 Speaker 1: for you. You You might want to aim for thirty two 1035 00:46:37,480 --> 00:46:40,400 Speaker 1: or thirty five your annual expenses because you want more padding. 1036 00:46:40,400 --> 00:46:41,640 Speaker 1: And that's kind of one of the things we talked 1037 00:46:41,680 --> 00:46:44,480 Speaker 1: about in our retire early episode two. Some people are like, cool, 1038 00:46:44,520 --> 00:46:45,920 Speaker 1: as long as I hit that twenty five x tumber, 1039 00:46:45,920 --> 00:46:47,759 Speaker 1: I'm gonna be good. But they're not factoring in those 1040 00:46:47,760 --> 00:46:49,480 Speaker 1: other things. Nick, that's when I'm going to turn in 1041 00:46:49,600 --> 00:46:52,400 Speaker 1: my two week notice. It's like, well, maybe maybe not, 1042 00:46:52,480 --> 00:46:55,200 Speaker 1: don't quite do that. Yeah, I could sink your retirement ship. 1043 00:46:55,239 --> 00:46:57,719 Speaker 1: Then if you are, if you haven't planned it down 1044 00:46:57,719 --> 00:46:59,800 Speaker 1: too and you don't know, okay, well I can definitely 1045 00:47:00,000 --> 00:47:02,319 Speaker 1: take it on that with some lettle room on top. 1046 00:47:02,440 --> 00:47:04,480 Speaker 1: But let's talk about HSA's two for a second, Maut, 1047 00:47:04,480 --> 00:47:06,239 Speaker 1: because that's one thing I wanted to touch on that 1048 00:47:06,280 --> 00:47:08,640 Speaker 1: Logan brought up in their question. She said that in 1049 00:47:08,840 --> 00:47:11,560 Speaker 1: HSA isn't her preferred method for getting health insurance. What 1050 00:47:11,600 --> 00:47:13,839 Speaker 1: that means, I guess is that a high deductible plan 1051 00:47:14,200 --> 00:47:17,480 Speaker 1: is not ideal for their family, doesn't suit their healthcare 1052 00:47:17,520 --> 00:47:19,759 Speaker 1: needs the best, which is totally fine. We don't want 1053 00:47:19,760 --> 00:47:23,440 Speaker 1: the retirement tail wagging the dog here. It's true HSA's 1054 00:47:23,440 --> 00:47:27,080 Speaker 1: are awesome, but only if a high deductible healthcare plan 1055 00:47:27,520 --> 00:47:30,359 Speaker 1: is the best choice for you from a medical and 1056 00:47:30,400 --> 00:47:33,960 Speaker 1: financial perspective, So don't switch things up just because we've 1057 00:47:33,960 --> 00:47:36,399 Speaker 1: talked about how great hsas are and moved to an 1058 00:47:36,400 --> 00:47:39,520 Speaker 1: inferior healthcare plan just to have access to one. Like 1059 00:47:39,640 --> 00:47:42,720 Speaker 1: for other listeners who do have a high deductible healthcare 1060 00:47:42,719 --> 00:47:45,440 Speaker 1: plan and they like it, your HSA should likely become 1061 00:47:45,719 --> 00:47:48,040 Speaker 1: your new favorite retirement account. We have an article about 1062 00:47:48,040 --> 00:47:49,920 Speaker 1: that on the website exactly how to use it to 1063 00:47:50,040 --> 00:47:54,560 Speaker 1: maximize that account for retirement investing inside of that instead 1064 00:47:54,600 --> 00:47:58,120 Speaker 1: of using it as a spending vehicle for current healthcare needs. 1065 00:47:58,239 --> 00:48:00,719 Speaker 1: Will link to that in the show notes. But Logan, Yeah, 1066 00:48:00,760 --> 00:48:03,120 Speaker 1: if a high deductible healthcare plan makes sense at some 1067 00:48:03,160 --> 00:48:05,920 Speaker 1: point in the future for your family in your healthcare needs, 1068 00:48:06,239 --> 00:48:08,600 Speaker 1: then that's when you would want to prioritize an HSA. 1069 00:48:08,680 --> 00:48:11,799 Speaker 1: But I totally not suggest moving to the healthcare plan 1070 00:48:11,840 --> 00:48:13,759 Speaker 1: that's going to be in feor that's not going to 1071 00:48:13,800 --> 00:48:15,480 Speaker 1: provide enough coverage, or that's going to cost you more 1072 00:48:15,520 --> 00:48:18,120 Speaker 1: money out of pocket, just so you can put more 1073 00:48:18,120 --> 00:48:20,680 Speaker 1: money in that account. Yeah, but Logan, if you are 1074 00:48:20,760 --> 00:48:22,640 Speaker 1: able to handle those costs out of pocket where you're 1075 00:48:22,640 --> 00:48:25,239 Speaker 1: paying those expenses manually and you're able to leave those 1076 00:48:25,320 --> 00:48:28,600 Speaker 1: HSA dollars untouched from a tax standpoint, Well, then you're 1077 00:48:28,600 --> 00:48:31,360 Speaker 1: contributing funds that are going to be triple tax advantaged 1078 00:48:31,400 --> 00:48:34,120 Speaker 1: as opposed to tax advantage, you know, just in one 1079 00:48:34,160 --> 00:48:36,480 Speaker 1: way like you are with a four wind k or 1080 00:48:36,520 --> 00:48:39,160 Speaker 1: a roth Ira. Jill. Let's get back to the beer man. 1081 00:48:39,239 --> 00:48:41,960 Speaker 1: You and I enjoyed a double cloud. This was a 1082 00:48:42,080 --> 00:48:45,800 Speaker 1: double IPA from New Park Brewing, donated to the show 1083 00:48:45,800 --> 00:48:48,200 Speaker 1: by Matthew. What were your thoughts on this one? All right, 1084 00:48:48,200 --> 00:48:50,480 Speaker 1: I'm gonna give three adjectives here. It was light, it 1085 00:48:50,560 --> 00:48:52,359 Speaker 1: was fluffy, and it was pillowy. That's just because it's 1086 00:48:52,360 --> 00:48:55,440 Speaker 1: got clouds on the label. It kind of tasted like 1087 00:48:55,520 --> 00:48:57,279 Speaker 1: I was like going up into the sky with a 1088 00:48:57,320 --> 00:49:00,920 Speaker 1: straw and get one of those like cumulus clouds, right 1089 00:49:00,920 --> 00:49:04,000 Speaker 1: the big fluffy ones. You're drinking straight hazy IPA's right 1090 00:49:04,080 --> 00:49:06,040 Speaker 1: out of the sky, dude. I would say this had 1091 00:49:06,160 --> 00:49:08,239 Speaker 1: serious like a scene out of The Big Lebowski. I'm papf. 1092 00:49:08,239 --> 00:49:11,040 Speaker 1: I'm honest. This had serious tropical notes like it had 1093 00:49:11,080 --> 00:49:12,880 Speaker 1: like a I totally get what you're saying as far 1094 00:49:12,920 --> 00:49:14,880 Speaker 1: as like a fluffy fluffiness to it. It had like 1095 00:49:14,920 --> 00:49:17,400 Speaker 1: these soft tropical notes. I don't know if it was 1096 00:49:17,600 --> 00:49:19,520 Speaker 1: It wasn't like guava, but maybe maybe a little bit 1097 00:49:19,520 --> 00:49:21,680 Speaker 1: of passion fruit, but like right up, like right out 1098 00:49:21,680 --> 00:49:22,960 Speaker 1: of the gate, that's what I was tasting, Like the 1099 00:49:23,200 --> 00:49:26,759 Speaker 1: these tropical notes that you're able to different breweries are 1100 00:49:26,800 --> 00:49:29,560 Speaker 1: able to tease out of hops, which that's what's so amazing. 1101 00:49:29,600 --> 00:49:31,720 Speaker 1: Again we've talked about this before, but IPA is depending 1102 00:49:31,719 --> 00:49:33,759 Speaker 1: on the different hops that you use, you're able to 1103 00:49:33,800 --> 00:49:36,520 Speaker 1: pull all these different flavors. There's just all sorts of crazy. 1104 00:49:36,520 --> 00:49:39,400 Speaker 1: I mean, Australian hops produce different flavors. It really is 1105 00:49:39,480 --> 00:49:43,080 Speaker 1: kind of one of these fascinating plants that can produce 1106 00:49:43,239 --> 00:49:44,920 Speaker 1: just so many different vr I mean, I don't even 1107 00:49:44,960 --> 00:49:47,120 Speaker 1: know how many varieties of hops that are now, but 1108 00:49:47,280 --> 00:49:49,640 Speaker 1: just kind of the way they work in conjunction or 1109 00:49:49,680 --> 00:49:52,360 Speaker 1: even solo. Sometimes they want a brewer will elevate a 1110 00:49:52,400 --> 00:49:54,000 Speaker 1: single hop and just use that in a beer. Just 1111 00:49:54,040 --> 00:49:55,520 Speaker 1: the way they do it, it's amazing to see how 1112 00:49:55,680 --> 00:49:57,560 Speaker 1: like the kind of flavors they can produce. That's right. Yeah, 1113 00:49:57,560 --> 00:49:59,360 Speaker 1: And maybe you're thinking, well, I've had my pay before 1114 00:49:59,400 --> 00:50:01,000 Speaker 1: and I could even finish it because it was so 1115 00:50:01,040 --> 00:50:04,319 Speaker 1: dang bitter. Look for a hazy ipa because those different 1116 00:50:04,360 --> 00:50:06,240 Speaker 1: hazies are going to have just a little more sweetness 1117 00:50:06,280 --> 00:50:08,600 Speaker 1: going on. In my opinion, it makes them a lot 1118 00:50:08,600 --> 00:50:10,399 Speaker 1: easier to drink, makes them a lot more delicious. Yeah. 1119 00:50:10,440 --> 00:50:11,879 Speaker 1: It's one of those things where, yeah, I can run 1120 00:50:11,920 --> 00:50:14,080 Speaker 1: the gamut. You can have one ipa that you love, 1121 00:50:14,120 --> 00:50:16,400 Speaker 1: another ipa that you hate. There's just all sorts of 1122 00:50:16,440 --> 00:50:18,680 Speaker 1: varieties for different structs for different folks in the in 1123 00:50:19,120 --> 00:50:22,080 Speaker 1: just that one category of beer. That's right. But that's 1124 00:50:22,120 --> 00:50:24,480 Speaker 1: going to do it for this episode, my friend listeners. 1125 00:50:24,480 --> 00:50:27,239 Speaker 1: You can find show notes for this episode up on 1126 00:50:27,280 --> 00:50:30,640 Speaker 1: our website at howtomoney dot com, including that article about 1127 00:50:30,640 --> 00:50:32,920 Speaker 1: the HSA and how glorious it is. That that's right. 1128 00:50:32,920 --> 00:50:34,560 Speaker 1: So let's get out of here man. Until next time, 1129 00:50:34,719 --> 00:50:36,839 Speaker 1: Best Friends Out, Best Friends Out.