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

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Speaker 1: Matt's and today we're answering your listener questions. Listener Questions Episode. Joel,

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Speaker 1: you know, one day we actually might run out of

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Speaker 1: listener questions, but hopefully we don't. I sure hope not,

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Speaker 1: because I'm gonna have to do one of those voice

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Speaker 1: apps where I changed the sound of my voice and

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Speaker 1: asked random questions that I don't actually have Witness protection

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Speaker 1: program app exactly. Uh. Now, we love these episodes because

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Speaker 1: we're able to connect with our listeners directly and answer

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Speaker 1: their specific questions. This episode, we have five great ones,

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Speaker 1: including one about our credit card recommendations. There's another question

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Speaker 1: about mortgage forbearance or deferments some of the different programs

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Speaker 1: like that that are going on right now. Uh. And

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Speaker 1: then we also have a follow up to our fire episode,

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Speaker 1: our Financial Independence Retire early up episode. A listener has

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Speaker 1: a question about a very specific type of fire that

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Speaker 1: she wanted us to elaborate on. So I'm excited to

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Speaker 1: get to that one plus two others. Buddy, so many

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Speaker 1: subsets of fire now, man, I feel like they're proliferating. Yeah,

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Speaker 1: everyone has their own unique recipe and they can vary

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Speaker 1: just like our our lives, very right, because this all

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Speaker 1: comes down to how it is that you want to

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Speaker 1: spend your money, how you want to spend your time.

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Speaker 1: That's why there can be such a difference between one

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Speaker 1: person's path to fire versus somebody else's. But yeah, we

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Speaker 1: can look forward to that question towards the end of

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Speaker 1: the episode. Yeah, man, all right, but before we get

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Speaker 1: to that, it is episode two fifty, right, and that's

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Speaker 1: kind of feel it is a big deal. Although I

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Speaker 1: look back and we totally cruised right past episode one

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Speaker 1: d and episode two hundred, Like why are we now

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Speaker 1: going to celebrate two fifty? Like I'm the kind of

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Speaker 1: person who I probably need to celebrate milestones in my

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Speaker 1: life more often than I do. But but yeah, to

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Speaker 1: fifty here we are, man to feels like, all right,

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Speaker 1: we're legit podcasters at this point in time. I don't know,

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Speaker 1: maybe one hundred was at mark two. Up until now,

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Speaker 1: we've just been slumming it. But now to fifty, yeah

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Speaker 1: that's legit. But we don't celebrate too hard, right, It's

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Speaker 1: it's still fun, like we love creating every episode, but

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Speaker 1: get into two fifty is is kind of fun to see,

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Speaker 1: and I think that it's crazy to think about, like

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Speaker 1: two d and fifty times we've sat down and you've said,

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Speaker 1: welcome to How the Money, and I say my name

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Speaker 1: is Matt or I'm Matt or whatever. Yeah, and the

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Speaker 1: community that that's kind of surrounded the show has been great.

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Speaker 1: We've we've met some really awesome people through being able

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Speaker 1: to create this podcast. So yeah, on that note, Matt,

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Speaker 1: as we celebrate two or fifty episodes, what's your favorite

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Speaker 1: episode that we've released so far? Do you have a favorite? Okay,

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Speaker 1: so well, you just said we got to meet a

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Speaker 1: lot of interesting people. I think one of my favorite

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Speaker 1: episodes is actually an interview. I can't remember when this was,

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Speaker 1: but we interviewed Kurt Steinhorst and we call that episode, uh,

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Speaker 1: you know, like maintaining focus in a world of distraction

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Speaker 1: something like that. And I selfishly like that one because

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Speaker 1: I've worked from home for over a decade now and

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Speaker 1: it was all about finding ways to stay focused, finding

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Speaker 1: ways to keep your productivity high while not getting distracted. Uh,

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Speaker 1: and not just in the world today, but you know,

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Speaker 1: at home as well, because he had some great tips

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Speaker 1: on how to create a great wark environment specifically at home.

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Speaker 1: With more people than ever now working from home. I

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Speaker 1: think this isn't just a selfish pick anymore. This is

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Speaker 1: also an episode that I think would be really helpful

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Speaker 1: for a lot of folks who you know, are in

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Speaker 1: a similar position who are working from home. By the way,

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Speaker 1: that was episode one, So yeah, scroll back and listen

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Speaker 1: to that one if you haven't already. What about you man?

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Speaker 1: Was your favorite episode an interview or regular episode or

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Speaker 1: listen to questions? I have a feeling it's going to

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Speaker 1: be this one because I'm optimistic. I think this is

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Speaker 1: gonna be my favorite episode. I think we've got some

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Speaker 1: great questions here. This actual episode, it was pretty bald

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Speaker 1: man calling it before we even record it, you know,

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Speaker 1: or as we're recording, like Babe Ruth point towards the bleachers.

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Speaker 1: It was the left field. He was left handed, so

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Speaker 1: I think it's left field. Probably, I don't know, maybe

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Speaker 1: he went dead center. He's like, listen, I'm gonna hit

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Speaker 1: this bond four. But uh yeah, I would say probably

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Speaker 1: so far. My favorite episode was the one that we've

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Speaker 1: replayed too, and we replayed it on It was episode

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Speaker 1: one one, and it was about money, your brain and

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Speaker 1: buying happiness. I think that's another one that can be

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Speaker 1: helpful to people right now because there is a lot

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Speaker 1: of emotional spending that's happening because of the pandemic. And uh,

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Speaker 1: we kind of delved into a little bit of the

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Speaker 1: psychology beneath how how our brains work when it comes

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Speaker 1: to how we handle money. So I just really enjoyed

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Speaker 1: creating that one. I think the interplay of psychology and

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Speaker 1: money is fascinating. I think in the past couple of

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Speaker 1: decades we've we've really started to to kind of unearth

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Speaker 1: some of what that looks like. And I know there's

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Speaker 1: a lot more work to be done on that topic,

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Speaker 1: but I think that if I had to pick one,

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Speaker 1: is probably my favorite episode that we've that we've really

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Speaker 1: so far. Man nice Man, Yeah, that was a good one.

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Speaker 1: That was the episode where we talked about the Hadonic treadmill, right,

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Speaker 1: because essentially, you know, you you think of something that's

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Speaker 1: gonna make you happier, you get it. It makes you

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Speaker 1: happier for a little bit, but then you quickly return

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Speaker 1: to you know, your baseline happiness, whatever that is. Yeah,

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Speaker 1: And like a treadmill, it's kind of like leaves you

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Speaker 1: chasing after more. Right, Yeah, yeah, exactly. Man. All right,

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Speaker 1: so we'll stop celebrating. We'll get on with the rest

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Speaker 1: of the episode. But well we can continue to celebrate

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Speaker 1: with our beer that we're sharing this episode. Yeah, this

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Speaker 1: one's called red Wine Food or Beer and it's by

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Speaker 1: a local brewery called Southern Brewing Company. Um, looking forward

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Speaker 1: to having this one with you today, my friend. By local,

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Speaker 1: they're they're kind of local. They're they're based on Athens,

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Speaker 1: so that's not too far out from that, not too

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Speaker 1: far Yeah, well they're in our state. Athens isn't a

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Speaker 1: suburb of Atlanta, though it's like still an hour and

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Speaker 1: a half from us. I wouldn't have driven to the brewer.

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Speaker 1: You get this exactly. But yeah, I'm really excited about

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Speaker 1: this little man. Excited to share our thoughts on this

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Speaker 1: one at the end of the episode. All right, Matt,

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Speaker 1: let's get onto listener questions. And for folks that want

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Speaker 1: to submit a question for the show, just go to

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Speaker 1: our website how to Money dot com slash ask. There

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Speaker 1: are simple instructions there where you can submit a voice

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Speaker 1: question to be featured on an upcoming episode. It'll think

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Speaker 1: you just a minute or two and we look forward

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Speaker 1: to having gears on, so Matt and I don't have

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Speaker 1: to create fake ones where we disguise our voices. But

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Speaker 1: let's get to the first one. This one is about

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Speaker 1: buying an investment property. Hey, Joel and Matt, this is

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Speaker 1: Bradley in South Carolina. First of all, love the podcast.

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Speaker 1: I have a real estate question for you, looking at

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Speaker 1: purchasing a long term rental and a price range of

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Speaker 1: hundred twenty five thousand to a hundred fifty UM, just

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Speaker 1: with wonder what you felt about buying a fix er

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Speaker 1: upper compared to buying a new build where you know

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Speaker 1: there's not gonna be any issues. Uh any top soon. Alright,

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Speaker 1: thanks for that question. Bradley Man. First of all, you know,

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Speaker 1: I love the price range that you mentioned. You mentioned

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Speaker 1: maybe looking on at a property from to maybe one fifty,

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Speaker 1: but I would maybe try to stick to the lower

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Speaker 1: end of that price range. And that's because rental income

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Speaker 1: it doesn't move up in tandem with the price of

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Speaker 1: a home and so like basically, a h allar home

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Speaker 1: will typically provide more profitability a better return on your

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Speaker 1: investment than a home that costs two fifty dollars. But

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Speaker 1: you know, there can be a lot of factors to

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Speaker 1: take into account, you know, what's available in the markets. Uh,

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Speaker 1: and even to the type of property that you want.

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Speaker 1: Obviously we're talking about single family here, but if you're

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Speaker 1: talking about a duplex or a triplex, a quadplex, you

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Speaker 1: know you might have to spend to fifty in order

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Speaker 1: to get that property, and chances are your return on

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Speaker 1: investment would be much higher than a single family home.

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Speaker 1: So it does kind of depend on a few factors. Yeah,

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Speaker 1: and every individual property is different. Of course, how much

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Speaker 1: it costs, the amount that you'll be able to get

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Speaker 1: in rent depends so much on the specific property, the

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Speaker 1: specific location, how good of a condition it's inn. But

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Speaker 1: what Matt said is is often true and that the

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Speaker 1: more expensive of home you buy, you don't see an

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Speaker 1: equivalent return in rent by going up in price point,

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Speaker 1: and so sticking to the lower end of your budget

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Speaker 1: is in all likelihood going to get you the best

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Speaker 1: numbers possible. That that's gonna be a frugal move, not

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Speaker 1: a cheap move, right Yeah. Yeah, especially if you can

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Speaker 1: put a little bit into it, force some equity and

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Speaker 1: and make that property better, then you're gonna be able

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Speaker 1: to entice more potential tenants and hopefully increase the amount

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Speaker 1: of rent you're going to be able to get from

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Speaker 1: that from that home. And Bradley, I'd love that you

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Speaker 1: said a long term rental, right, because getting into the

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Speaker 1: rental property games should actually be a long term decision.

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Speaker 1: And that's because of a few factors. The costs of

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Speaker 1: buying and especially selling a property are astronomical, and so

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Speaker 1: if you're buying and selling frequently, that can nab most

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Speaker 1: of your profits. That's unless you're doing kind of an

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Speaker 1: advanced tax strategy called the ten thirty one exchange, which

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Speaker 1: can be a real estate investor's best friend. But the

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Speaker 1: more we do sell properties, we're gonna incur greater fees,

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Speaker 1: higher taxes, and so it is a long term play.

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Speaker 1: You want to buy something that you can hold for

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Speaker 1: an extended period of time. That's how you're going to

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Speaker 1: see your best overall results when it comes to profit

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Speaker 1: from that house. Yeah, the T one exchange that can

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Speaker 1: eliminate capital gains taxes, but then you're still, like you

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Speaker 1: mentioned the fees joll, you're still stuck with real turfees.

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Speaker 1: And so if you're selling a hundred and fifty thou

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Speaker 1: dollar home. You're looking at close to ten thousand dollars

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Speaker 1: and just real turfees alone, and that's a lot of money. Man.

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Speaker 1: You might have to pay closing costs to Yeah, and

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Speaker 1: so let's go and get into the heart of Bradley's

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Speaker 1: question here. Uh. You know, he's asking should he go

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Speaker 1: with a fixer upper or a new home as an

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Speaker 1: investment property, and a fixer upper is going to win

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Speaker 1: every single time if the question is about what will

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Speaker 1: make you more money buying a nasty property that requires

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Speaker 1: a lot of work, you know, one of those ugly homes,

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Speaker 1: than doing that work ideally as much of it as

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Speaker 1: possible yourself, and then renting you know, that cute, older

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Speaker 1: home will often give you the best bang for your buck.

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Speaker 1: And you, like you mentioned you touched on forcing appreciation,

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Speaker 1: you're essentially forcing appreciation by making these improvements to this

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Speaker 1: property with that sweat equity that you've contributed. Bradley. Yeah,

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Speaker 1: it's important to note too that new homes aren't necessarily

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Speaker 1: a slam dunk in regards to not having issues. Exactly,

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Speaker 1: if you're buying a new home, it's just as important

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Speaker 1: to get an inspection because you don't know how good

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Speaker 1: the workmanship was on that new home. So I think

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Speaker 1: sometimes people think new home or new car or whatever

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Speaker 1: it is, means zero issues and I don't have to

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Speaker 1: think about it, and that's just not necessarily the case.

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Speaker 1: In all likelihood, there will be fewer issues, but it

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Speaker 1: doesn't mean that there won't be any. There might be

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Speaker 1: a new h fact, but maybe that h fact wasn't

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Speaker 1: installed properly and it does actually end up failing in

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Speaker 1: six or seven years when the you know, could have

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Speaker 1: lasted for maybe twenty years. That could be the kind

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Speaker 1: of situation that you would be in with a new build. Yeah,

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Speaker 1: you got to do your due diligence right, And Matt,

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Speaker 1: I kind of like to pick something in the middle,

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Speaker 1: like a middle route for myself. I personally actually avoid

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Speaker 1: typically those ugly houses, the nastiest homes that require like

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Speaker 1: a full gut job. Joel does not buy ugly home

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Speaker 1: or like and even though I know that they do

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Speaker 1: produce higher returns, I just don't have the time personally,

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Speaker 1: or I don't want to put in the time to

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Speaker 1: buy the ugliest homes to scour them to be competing

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Speaker 1: with all the other real estate investors that are trying

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Speaker 1: to get the highest possible returns from their property. I

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Speaker 1: personally look for homes that needs some work, like maybe

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Speaker 1: just they've got the nastiest bathroom in there, but most

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Speaker 1: of the houses is relatively intact. It needs paint and

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Speaker 1: a cleaning, right, or it needs a few updates here

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Speaker 1: and there, or a new roof, And once those minor

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Speaker 1: rentos are done, then I can attract great tenants to

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Speaker 1: live there. I know that I'm not getting like the

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Speaker 1: biggest deal on the face of the planet, but it

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Speaker 1: works kind of for my abilities as someone who can

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Speaker 1: manage work being done to a rental property and who

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Speaker 1: has a lot of other commitments in his life. So

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Speaker 1: it's not necessarily in either or Bradley, I think you

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Speaker 1: can find something in the middle um that will work

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Speaker 1: for you, especially if you've got a lot of other

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Speaker 1: stuff going on uh day job perhaps, and you don't

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Speaker 1: have the time to be a full time contractor overseeing

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Speaker 1: a full rento of older home. I feel like this

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Speaker 1: method has allowed me to invest in real estate without

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Speaker 1: the incredible time demands that are often put on investors

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Speaker 1: who are looking to do like complete overhauls and rehabs. Yeah,

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Speaker 1: it really does come down to how much time you're

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Speaker 1: willing to put into it. If if you're wanting this

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Speaker 1: to kind of be a part time job, you know,

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Speaker 1: on the slide, then by all means go with a

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Speaker 1: full gut job where you can kind of hire the

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Speaker 1: contractors to know that you're getting quality work done. It's

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Speaker 1: it's something that you don't have to worry about down

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Speaker 1: the road. But but yeah, if you are wanting maybe

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Speaker 1: something that is a little more automated, like investing, but

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Speaker 1: just investing that takes a little bit more work than

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Speaker 1: maybe going with something that's a touch newer, you know,

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Speaker 1: might allow that for you, uh and kind of like

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Speaker 1: the lifestyle that you're looking for, and maybe not even newer,

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Speaker 1: but maybe just less beat up. Sure, yeah, yeah, you

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Speaker 1: can have an older home that's a great, great condition completely.

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Speaker 1: Uh So, Bradley, best of luck to you, you know,

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Speaker 1: buying a great property or even properties over time, you know, Um,

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Speaker 1: real estate investing can be a lot of fun. I've

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Speaker 1: never personally gotten a tattoo, but it's kind of like

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Speaker 1: the way I hear people talk about tattoos. It's a

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Speaker 1: lot of fun. You kind of start to collect them

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Speaker 1: over time. It can be a little addict, So don't

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Speaker 1: be surprised if you end up with more properties down

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Speaker 1: the one. It's hard to just stick with one. It's

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Speaker 1: like a lace, potato chip, something like that. It was Pringles, right,

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Speaker 1: it wasn't you can't stop? Okay, but it wasn't there

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Speaker 1: a lot of TV when I was a kid. I

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Speaker 1: was like a classic nineties uh TV commercial. It wasn't

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Speaker 1: there one that you like, you can't stop at one?

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Speaker 1: Wasn't that lace? No? I don't know, all right? What

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Speaker 1: was your pop? You can't stop? Because because he had

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Speaker 1: the tube, you know, it's like the top like sheets off.

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Speaker 1: You just made the perfect pringles can't opening? Sound kind

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Speaker 1: of alright, But let's get to some more questions, Matt,

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Speaker 1: including one about a friend who is having to replace

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Speaker 1: some stuff due to a fire and helping them through that.

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

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Speaker 1: All right, Joe, we're back from the break, taking list

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Speaker 1: for questions, and let's go ahead and hear a question

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Speaker 1: on behalf of someone's friend. Hello, my name is Caroline

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Speaker 1: and I'm from the Boston area. UM calling with a

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Speaker 1: question for a and UM who unfortunately just had an

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Speaker 1: apartment fire and lost everything, and as devastating as it is,

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Speaker 1: we're trying to make the best of it. And uh,

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Speaker 1: we know that he's going to have to rebuy pretty

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Speaker 1: much everything he owned, from furniture to close to you know,

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Speaker 1: pretty much everything. And uh, you have done some great

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Speaker 1: episodes on credit cards and maximizing the points, so I

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Speaker 1: was wondering if you have any recommendations for what cards

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Speaker 1: he should look into. Thank you, Caroline. First off, you

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Speaker 1: are a great friend. Like the fact that you're submitting

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Speaker 1: a question to a podcast in order to help somebody

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Speaker 1: that's close to you, UM is majorly impressive. So yeah,

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Speaker 1: kudos to you for looking out after after your friend. UM.

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Speaker 1: And I hate that that happened to them. It's terrible

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Speaker 1: and and I think I just want to mention quickly

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Speaker 1: that this is why Renters insurance is so incredibly emphoy right.

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Speaker 1: It's so cheap and it's really something that everyone who

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Speaker 1: is renting has to have. And typically Renters insurances is

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Speaker 1: equivalent to the cost of Netflix every month, or maybe

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Speaker 1: even less. And Netflix has gone up, so maybe it's

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Speaker 1: less in Netflix exactly as Netflix raises their prices. Yeah,

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Speaker 1: we can't say that it's the cost of YouTube TV

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Speaker 1: anymore because they like double their prices. Yeah, they check

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Speaker 1: those prices up more like Disney plus prices, right exactly.

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Speaker 1: So um, but yeah, and renters insurances obviously just so

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Speaker 1: important in the case of an unforeseen disaster like a fire,

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Speaker 1: where all of your possessions go up in flames. It's

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Speaker 1: something that every renter truly, truly should have. Yeah, and

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Speaker 1: so if you're looking for renters insurance, that's typically something

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Speaker 1: you can add to, you know, the insurance that you

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Speaker 1: already have, say that you have your car, your automobile

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Speaker 1: through so you can reach out to them and get

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Speaker 1: a quote. If you don't have an insurance policy, you know,

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Speaker 1: maybe you don't have a car, right, maybe you live

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Speaker 1: in the city, then make sure to check out a

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Speaker 1: site like policy genius dot com. But karly, you know,

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Speaker 1: you're asking about the different credit card points and kind

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Speaker 1: of some of the rewards there. They are awesome, but

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Speaker 1: not if you keep a balance where that would cause

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Speaker 1: you to pay interest to the credit card company. If

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Speaker 1: you're not disciplined, you know, to pay the card every

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Speaker 1: single month. Then I would try to buy as much

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Speaker 1: with cash as you can in order to avoid going

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Speaker 1: into debt to replace those items. And you can even

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Speaker 1: consider putting out a post on social media. You know,

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Speaker 1: you're reaching out to a podcast for some feedback, Uh

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Speaker 1: see if you can reach out to others who might

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Speaker 1: know that friend. You know, you might be able to

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Speaker 1: get some awesome donations from other folks who care about

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Speaker 1: your friend, who are willing to support him through the

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Speaker 1: donation of maybe extra furniture and some other necessary items

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Speaker 1: that they might have laying around. You could even start

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Speaker 1: a go fund Me page to help him raise cash

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Speaker 1: to help get them through this time. Yeah. Man, Actually,

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Speaker 1: a long time ago, when I was right before I

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Speaker 1: was buying my first house, I actually stored some of

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Speaker 1: my possessions at my boss's house. She was kind enough

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Speaker 1: to let me use her garage. And then we had

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Speaker 1: this thousand year flood in Atlanta and all my stuff

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Speaker 1: got wiped out. I wasn't all that worried about it

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Speaker 1: because our home took on a lot of water, right

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Speaker 1: and and she was going through a tough time. But

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Speaker 1: some of my friends stepped up and they really saw

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Speaker 1: the things that I was needing, the things that had

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Speaker 1: basically gotten ruined due to the floodwaters. And they provided

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Speaker 1: a lot of help a lot of items that they

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Speaker 1: had lying around a couch that they didn't need anymore

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Speaker 1: and kitchen utensils that were really helpful so that I

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Speaker 1: didn't have to go like buy new stuff, um, you know,

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Speaker 1: in a store or on Amazon. And so yeah, that

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Speaker 1: was really helpful. And I think turning to friends is

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Speaker 1: a crucial thing to do, like in the aftermath of

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Speaker 1: something like this. Sure. Yeah, and that also accounts for

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Speaker 1: your eclectic style as well, exactly. Well, I mean not

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Speaker 1: only give me folk cart though it was a bummer,

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Speaker 1: you have refined that style over time, and you can

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Speaker 1: do that right over time once once you're back on

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Speaker 1: your feet. But yeah, like that immediate rebound, sometimes you

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Speaker 1: can't really be picky, like you just want to get

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Speaker 1: stuff in there. And obviously we're trying to get folks

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Speaker 1: to avoid going into debt. I was like, oh, is

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Speaker 1: this fake leather? I don't do fake leather. No, you

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Speaker 1: can take that back. No, I mean I was like

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Speaker 1: totally up for taking anything at that point time. Yeah,

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Speaker 1: for sure. And for things that that your friend can't

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Speaker 1: get donated and he does need to buy, I would

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Speaker 1: say buying used and being able to fully pay for

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Speaker 1: those items in cash is best as well. But then

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Speaker 1: if there are items that he does feel that he

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Speaker 1: has to get new, I would say getting a credit

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Speaker 1: card with a zero percent interest rate can help him

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Speaker 1: avoid paying interest while he gets back on his feet too.

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Speaker 1: So looking for a card maybe with that longer intro

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Speaker 1: period is the way to go if he can't pay

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Speaker 1: it off in full at the end of the month, right,

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Speaker 1: we really just want to avoid this fire, being like

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Speaker 1: this easy excuse for your friend to be able to

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Speaker 1: rack up debt, especially too, like when you've gone through

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Speaker 1: an emotional experience. I feel like sometimes that can give

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Speaker 1: us the mental ability to say, you know what, I'm

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Speaker 1: gonna treat myself because I just went through something difficult

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Speaker 1: and and you know, we want to avoid that because

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Speaker 1: there's a hangover that comes after that treating yourself when

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Speaker 1: when you get the bill in the mail and you're like, crap,

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Speaker 1: now I'm in another difficult situation, and we totally want

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Speaker 1: to make sure your friend avoids that. Yeah, So all

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Speaker 1: that being said, you know, if your friend can pay

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Speaker 1: off the credit card in full at the end of

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Speaker 1: every month, definitely prioritize rewards. That's what I do. I

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Speaker 1: mean with pretty much every single one of my purchases.

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Speaker 1: You know, I'm looking for ways to maximize the benefit

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Speaker 1: I received from my credit cards. So you know, look

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Speaker 1: for cards that will consistently deliver solid rewards for you know,

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Speaker 1: how does that he spends. We read an article about

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Speaker 1: this that will link to in the show notes. You

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Speaker 1: know what cards to look to based on how it

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Speaker 1: is that you spend and when it comes to just

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Speaker 1: specific credit cards, Jill, I know you're a fan of

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Speaker 1: the City Double Cash card where you earn two percent

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Speaker 1: basically no matter what um. I personally, I've been a

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Speaker 1: big fan of the Blue Cash Preferred card by AMEX.

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Speaker 1: This has become like my go to credit card for

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Speaker 1: everyday spending, you know, especially when we go to the

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Speaker 1: grocery store, because that card earns six percent at the

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Speaker 1: grocery store. Uh. It does have an annual fee, but

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Speaker 1: we we found for us we quickly and easily pay

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Speaker 1: for that annual fee just based on our grocery spending. Yeah. Man,

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Speaker 1: We've got another article on site too that will put

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Speaker 1: in the show notes that that you wrote about zero

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Speaker 1: percent a p R cards to consider, and I think

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Speaker 1: that's helpful too, because some have longer periods, longer windows,

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Speaker 1: and so depending on on how long Caroline, it's gonna

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Speaker 1: take your friend to get back on his feet, having

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Speaker 1: you know, maybe that fifteen or eighteen month intro zero

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Speaker 1: percent period can be helpful for those few things, hopefully

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Speaker 1: few things that he does need to purchase that he

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Speaker 1: can't pay off, you know, quickly. Um So, yeah, well

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Speaker 1: we'll link to that as well in in the show notes.

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Speaker 1: But best of luck to your friend getting back on

429
00:18:58,840 --> 00:19:00,680
Speaker 1: their feet. Thanks so much for being a good friend

430
00:19:00,680 --> 00:19:03,320
Speaker 1: to your friend, and we wish him and you the best. Yeah,

431
00:19:03,320 --> 00:19:05,760
Speaker 1: Carolyn thinks for being a friend of the podcast. A

432
00:19:05,800 --> 00:19:07,720
Speaker 1: lot of friend talk. Yeah, all right, let's take this

433
00:19:07,720 --> 00:19:09,919
Speaker 1: next one. This one's about mortgage deferment in what you

434
00:19:09,920 --> 00:19:13,040
Speaker 1: need to consider before pulling the trigger on it. Him,

435
00:19:13,040 --> 00:19:15,760
Speaker 1: Matt and Joel. My name's John and I'm from Pennsylvania.

436
00:19:16,000 --> 00:19:19,960
Speaker 1: I have a question regarding the pandemic mortgage deferment. So

437
00:19:20,119 --> 00:19:23,400
Speaker 1: my mortgage company is allowing me to for my mortgage

438
00:19:23,440 --> 00:19:25,840
Speaker 1: for the past few months. In October, I had the

439
00:19:25,920 --> 00:19:29,160
Speaker 1: choice to reevaluate that and start paying or extended the deferment.

440
00:19:29,640 --> 00:19:32,080
Speaker 1: My wife lost her job due the pandemic, and there's

441
00:19:32,119 --> 00:19:34,320
Speaker 1: no and insight for her to get back to work

442
00:19:34,359 --> 00:19:37,280
Speaker 1: this year. While starting in October I will be able

443
00:19:37,320 --> 00:19:39,880
Speaker 1: to pay my mortgage, it would be extremely tight, and

444
00:19:39,960 --> 00:19:41,960
Speaker 1: I might even have a dip into my savings to

445
00:19:42,040 --> 00:19:44,720
Speaker 1: make ends meet. The balance of the past to bill

446
00:19:44,800 --> 00:19:46,600
Speaker 1: we need to be paid all at once at the

447
00:19:46,640 --> 00:19:49,760
Speaker 1: end of our mortgage term or when we sell our house.

448
00:19:50,160 --> 00:19:52,200
Speaker 1: I could easily save up that money by the time

449
00:19:52,720 --> 00:19:55,400
Speaker 1: I will owe it in twenty five years to pay

450
00:19:55,440 --> 00:19:58,399
Speaker 1: it off. My question is should I continue to defer

451
00:19:58,520 --> 00:20:01,000
Speaker 1: it till the end of the year or likely dip

452
00:20:01,040 --> 00:20:04,280
Speaker 1: into my savings to make ends meet to pay my mortgage.

453
00:20:04,560 --> 00:20:08,200
Speaker 1: Any advice or suggestions would be greatly appreciated. Hey, John,

454
00:20:08,400 --> 00:20:10,640
Speaker 1: we are sorry about the tough times your family is having.

455
00:20:10,800 --> 00:20:13,560
Speaker 1: You know, this is exactly what deferment is for, so

456
00:20:13,720 --> 00:20:15,679
Speaker 1: you know in that vein we would suggest that you

457
00:20:15,680 --> 00:20:18,600
Speaker 1: continue to defer your mortgage payments for the time being.

458
00:20:18,880 --> 00:20:21,119
Speaker 1: We cut to the chase pretty quickly their Joel question,

459
00:20:21,600 --> 00:20:23,399
Speaker 1: question and answer over. It's good to explain it a

460
00:20:23,440 --> 00:20:25,680
Speaker 1: little bit though. So the reason for this, Shohn, is

461
00:20:25,720 --> 00:20:28,760
Speaker 1: because it's much better to continue that deferment than to

462
00:20:28,880 --> 00:20:31,320
Speaker 1: blow through your emergency savings in order to continue paying

463
00:20:31,440 --> 00:20:34,720
Speaker 1: on that home. This deferment can buy you extra time

464
00:20:34,760 --> 00:20:38,320
Speaker 1: to to keep your savings intact while your wife continues

465
00:20:38,400 --> 00:20:40,320
Speaker 1: to look for work. Um and Jo I wanted to

466
00:20:40,359 --> 00:20:42,359
Speaker 1: mention too. You know, when it comes to terms like

467
00:20:42,400 --> 00:20:44,920
Speaker 1: he mentioned deferment, but you also hear the term forbearance

468
00:20:44,960 --> 00:20:48,679
Speaker 1: thrown around. Oftentimes they're used interchangeably, but it depends on

469
00:20:48,720 --> 00:20:51,359
Speaker 1: the specific lender as to what that means for that

470
00:20:51,400 --> 00:20:55,840
Speaker 1: specific lender. We use forbearance and affirm and interchangeably. But John,

471
00:20:55,840 --> 00:20:59,080
Speaker 1: when we say that, we're referring to your deferment specifically. Yeah,

472
00:20:59,080 --> 00:21:01,240
Speaker 1: and sometimes they look differ depending on the lender. You're right,

473
00:21:01,280 --> 00:21:03,360
Speaker 1: every every lender is going to kind of handle things differently.

474
00:21:03,560 --> 00:21:06,680
Speaker 1: They're handling where those additional payments go differently and when

475
00:21:06,720 --> 00:21:11,040
Speaker 1: they come do specifically exactly. But this is exactly what

476
00:21:11,160 --> 00:21:14,560
Speaker 1: deffirmative is for, I think, right for for situations like

477
00:21:14,720 --> 00:21:18,040
Speaker 1: John's to be able to take advantage of deferment. Right now, John,

478
00:21:18,040 --> 00:21:20,159
Speaker 1: here's what we would suggest that get a copy of

479
00:21:20,200 --> 00:21:23,199
Speaker 1: the deferment terms in writing and keep it until you

480
00:21:23,240 --> 00:21:25,520
Speaker 1: sell your home or reach the end of your mortgage payments, right,

481
00:21:25,760 --> 00:21:29,040
Speaker 1: you want proof of the arrangement. It's also important to

482
00:21:29,119 --> 00:21:31,280
Speaker 1: to to check your credit score over the coming months.

483
00:21:31,480 --> 00:21:33,280
Speaker 1: Under the CARES Act, your credit score should not be

484
00:21:33,320 --> 00:21:37,720
Speaker 1: negatively impacted in any way. But some lenders have accidentally

485
00:21:37,880 --> 00:21:40,480
Speaker 1: or maybe not accidentally I think accidentally, I hope excidentally,

486
00:21:40,600 --> 00:21:43,679
Speaker 1: hopefully not maliciously, right, Yeah, they have been digging people's

487
00:21:43,680 --> 00:21:45,320
Speaker 1: credit scores, and so it's important to keep an eye

488
00:21:45,359 --> 00:21:48,320
Speaker 1: on that. Whatever site you're using to check your score,

489
00:21:48,480 --> 00:21:50,520
Speaker 1: whether it's a site like credit Carma or credit score

490
00:21:50,560 --> 00:21:52,440
Speaker 1: Card or something like that. Either way, just make sure

491
00:21:52,440 --> 00:21:55,080
Speaker 1: you're staying on top of it because if it does

492
00:21:55,240 --> 00:21:57,639
Speaker 1: get accidentally dinged, you're gonna want to flag that with

493
00:21:57,680 --> 00:22:00,919
Speaker 1: the credit bureaus so that they can remove that inaccurate report.

494
00:22:01,000 --> 00:22:03,600
Speaker 1: And John, when it comes to our thoughts on deferment, uh,

495
00:22:03,640 --> 00:22:07,120
Speaker 1: and you know, forbearance in general, it is an ideal, right,

496
00:22:07,160 --> 00:22:10,359
Speaker 1: but it's far better than the alternatives that are you know,

497
00:22:10,359 --> 00:22:13,879
Speaker 1: are open to you. Without deferment, you could potentially stumble

498
00:22:13,920 --> 00:22:16,560
Speaker 1: upon even more difficult times, and you could even lose

499
00:22:16,600 --> 00:22:18,800
Speaker 1: your home. And even if it doesn't get that bad,

500
00:22:18,880 --> 00:22:21,560
Speaker 1: you could find yourself having to charge up debt on

501
00:22:21,600 --> 00:22:23,560
Speaker 1: credit cards in order to make ends meet. Those are

502
00:22:23,600 --> 00:22:26,240
Speaker 1: both really bad options, and so we would recommend for

503
00:22:26,240 --> 00:22:28,639
Speaker 1: you to take the least bad option and extend that

504
00:22:28,680 --> 00:22:31,679
Speaker 1: forbearance period, give yourself some of that much needed time.

505
00:22:32,000 --> 00:22:34,560
Speaker 1: So it's kind of like reaching for the least stinky

506
00:22:34,560 --> 00:22:37,120
Speaker 1: shirt and then the dirty clothes hamper sounds like something

507
00:22:37,119 --> 00:22:39,639
Speaker 1: you've done before. I have, but in this case that

508
00:22:39,680 --> 00:22:41,720
Speaker 1: the stinky shirt, it's not all bad stinky. It's kind

509
00:22:41,720 --> 00:22:43,600
Speaker 1: of fresh, it's still some life in it. It's got

510
00:22:43,640 --> 00:22:45,440
Speaker 1: one more aware maybe at least if you're gonna go

511
00:22:45,440 --> 00:22:47,320
Speaker 1: for a run or something like that, that's actually when

512
00:22:47,320 --> 00:22:49,320
Speaker 1: I will grab a short out of the dirty hamper.

513
00:22:49,640 --> 00:22:50,840
Speaker 1: And if I'm gonna go for a run and just

514
00:22:50,880 --> 00:22:52,879
Speaker 1: immediately sweat, I'm like, what's the point of putting on,

515
00:22:53,040 --> 00:22:55,000
Speaker 1: you know, a clean, fresh shirt. Don't go don't do it.

516
00:22:55,040 --> 00:22:56,960
Speaker 1: If you're going to a meeting, man, no, I'm not

517
00:22:57,000 --> 00:22:59,280
Speaker 1: gonna do that, obviously. But in this case, I think

518
00:22:59,280 --> 00:23:02,040
Speaker 1: this is a perfect the good option for John. It

519
00:23:02,080 --> 00:23:04,240
Speaker 1: feels I feel like emotionally it can kind of feel

520
00:23:04,320 --> 00:23:06,719
Speaker 1: worse than it actually is. But as long as you're

521
00:23:06,760 --> 00:23:08,440
Speaker 1: able to keep up with that and in your case, John,

522
00:23:08,560 --> 00:23:10,479
Speaker 1: make sure that you're aware of when it is that

523
00:23:10,520 --> 00:23:13,000
Speaker 1: you have to repay those misspayments. That's what you need

524
00:23:13,040 --> 00:23:15,000
Speaker 1: to know. Yeah, yeah, for sure, everyone else out there

525
00:23:15,000 --> 00:23:17,280
Speaker 1: who who is having tough times, it's it's important to

526
00:23:17,320 --> 00:23:19,840
Speaker 1: know that mortgage forebearance is an option and you have

527
00:23:19,880 --> 00:23:21,840
Speaker 1: to know your rights essentially when it comes to that

528
00:23:21,920 --> 00:23:25,840
Speaker 1: forbearance and requesting it. If you have a federally backed mortgage,

529
00:23:25,920 --> 00:23:28,600
Speaker 1: you can request a hundred and eighty day forbearance from

530
00:23:28,640 --> 00:23:30,760
Speaker 1: your loan servicer and then you actually have the right

531
00:23:30,920 --> 00:23:34,040
Speaker 1: to ask for another eight day forbearance period if you're

532
00:23:34,040 --> 00:23:36,360
Speaker 1: still having difficulty with your finances. That's basically a full

533
00:23:36,440 --> 00:23:39,320
Speaker 1: year of not having to pay mortgage payments. But so

534
00:23:39,400 --> 00:23:41,800
Speaker 1: much of it depends on how much you've been impacted

535
00:23:41,800 --> 00:23:44,120
Speaker 1: by COVID. So go to your lenders website to see

536
00:23:44,119 --> 00:23:46,439
Speaker 1: what's available for you, what they're offering. It might be

537
00:23:46,480 --> 00:23:48,879
Speaker 1: hard to get through to to your lender for a

538
00:23:48,920 --> 00:23:51,560
Speaker 1: little while, but but keep pushing and make sure you

539
00:23:51,560 --> 00:23:53,199
Speaker 1: take advantage of it if that's the thing that's going

540
00:23:53,240 --> 00:23:55,280
Speaker 1: to keep your finances a float. Right now, all right, man,

541
00:23:55,320 --> 00:23:57,120
Speaker 1: we've got a couple more questions. We've got one from

542
00:23:57,160 --> 00:23:59,600
Speaker 1: Andy and one from Kelly. I'm not gonna say what

543
00:23:59,640 --> 00:24:01,440
Speaker 1: their questions are about. You're gonna have to stick around

544
00:24:01,480 --> 00:24:12,840
Speaker 1: until after the break for that. All right, We're back

545
00:24:12,880 --> 00:24:14,679
Speaker 1: to the break and we got a couple more questions

546
00:24:14,680 --> 00:24:16,919
Speaker 1: to get to on this episode. First one comes from

547
00:24:16,920 --> 00:24:19,080
Speaker 1: a listener out in Utah who is a question about

548
00:24:19,119 --> 00:24:23,520
Speaker 1: dollar cost averaging. Hey, it's Andy here in Utah. I've

549
00:24:23,560 --> 00:24:27,359
Speaker 1: got a question for you, guys. My work is seasonal.

550
00:24:28,160 --> 00:24:32,240
Speaker 1: Most of my income comes during the summertime and not

551
00:24:32,359 --> 00:24:36,600
Speaker 1: so much during the wintertime. However, it is enough to

552
00:24:36,640 --> 00:24:40,560
Speaker 1: live off of, and so it gives us the unique

553
00:24:40,680 --> 00:24:43,840
Speaker 1: ability to where we get used to living off of

554
00:24:43,960 --> 00:24:47,520
Speaker 1: the wintertime funds, and so when summertime rolls around, it

555
00:24:47,560 --> 00:24:51,320
Speaker 1: seems like we've got a lot of surplus that isn't

556
00:24:51,359 --> 00:24:54,760
Speaker 1: part of our normal living costs. Anyway, where I'm going

557
00:24:54,840 --> 00:24:59,520
Speaker 1: with this is when we go to fund We got

558
00:24:59,760 --> 00:25:02,879
Speaker 1: to me and my wife. We got two roth I

559
00:25:03,040 --> 00:25:07,240
Speaker 1: ra ace that we're funding, and we fund these during

560
00:25:07,280 --> 00:25:11,600
Speaker 1: the summertime. But to take advantage of dollar cost averaging,

561
00:25:11,920 --> 00:25:15,919
Speaker 1: would you guys recommend us take the money that we

562
00:25:16,000 --> 00:25:18,879
Speaker 1: get during the summertime and average it out over the

563
00:25:18,880 --> 00:25:22,920
Speaker 1: course of a year to dollar cost average, or should

564
00:25:22,960 --> 00:25:24,680
Speaker 1: we just put it in as we get it through

565
00:25:24,680 --> 00:25:29,280
Speaker 1: the summertime? Which way might be better for us? I mean,

566
00:25:29,600 --> 00:25:31,639
Speaker 1: when we've been putting it in during the summertime and

567
00:25:31,640 --> 00:25:34,200
Speaker 1: it is kind of dollar cost averaging. We don't really

568
00:25:34,200 --> 00:25:37,320
Speaker 1: pay too much attention to where the market is currently

569
00:25:37,359 --> 00:25:41,000
Speaker 1: setting when we put the money in, but we're only

570
00:25:41,040 --> 00:25:44,360
Speaker 1: putting that money in about four months out of the year.

571
00:25:45,200 --> 00:25:48,240
Speaker 1: So anyway, thanks for all you guys do, and I

572
00:25:48,280 --> 00:25:52,159
Speaker 1: look forward to hearing your advice. Hey, Andy, thanks so

573
00:25:52,240 --> 00:25:55,199
Speaker 1: much for that question. And man, we love that you

574
00:25:55,200 --> 00:25:57,439
Speaker 1: can live off of your paycheck during those leaner months.

575
00:25:57,560 --> 00:25:59,679
Speaker 1: It's freaking awesome. You know. How great is it to

576
00:25:59,720 --> 00:26:03,119
Speaker 1: know that you can fully support your family off of

577
00:26:03,160 --> 00:26:04,840
Speaker 1: what you can make during those winter months. You know,

578
00:26:04,880 --> 00:26:07,760
Speaker 1: it's this great mental trick that's like a great little

579
00:26:07,760 --> 00:26:10,439
Speaker 1: life pack where you're able to keep costs low, uh

580
00:26:10,440 --> 00:26:12,879
Speaker 1: and not inflate your lifestyle when some of those fatter

581
00:26:12,960 --> 00:26:15,120
Speaker 1: summer months come rolling around. Yeah, similar to if your

582
00:26:15,119 --> 00:26:17,719
Speaker 1: two income family trying to live off one income, right,

583
00:26:17,840 --> 00:26:19,640
Speaker 1: And it's the same thing where all right, living off

584
00:26:19,640 --> 00:26:23,080
Speaker 1: our leanest months gets us used to uh just saving

585
00:26:23,119 --> 00:26:25,679
Speaker 1: when we have fat months, So that yeah, that's huge. Andy, Uh,

586
00:26:25,720 --> 00:26:28,119
Speaker 1: congrats to you guys for handling your money so well.

587
00:26:28,440 --> 00:26:31,480
Speaker 1: And Matt actually uh recently realized the importance of going

588
00:26:31,480 --> 00:26:33,520
Speaker 1: into a bit more detail on some of the terms

589
00:26:33,560 --> 00:26:36,320
Speaker 1: that we use on the show frequently. Uh when when

590
00:26:36,320 --> 00:26:39,480
Speaker 1: I was actually talking with Emily's nineteen year old stepsister,

591
00:26:39,560 --> 00:26:43,120
Speaker 1: my wife's stepsister, and she asked a question after listening

592
00:26:43,160 --> 00:26:45,680
Speaker 1: to an episode, Hey, what's dollar cost averaging? And I

593
00:26:45,760 --> 00:26:47,359
Speaker 1: was like, yeah, okay, that's a good point. Yeah, there

594
00:26:47,359 --> 00:26:49,919
Speaker 1: are some terms that we use on the RAG that

595
00:26:50,000 --> 00:26:53,080
Speaker 1: we don't often define, and so let's go into a

596
00:26:53,080 --> 00:26:56,119
Speaker 1: real quick it's essentially what we're automatically doing when we

597
00:26:56,160 --> 00:26:58,840
Speaker 1: make contributions regular contributions to a four oh one K

598
00:26:59,119 --> 00:27:01,560
Speaker 1: four or three b TSP and typically it's on like

599
00:27:01,600 --> 00:27:05,040
Speaker 1: a weekly, bi weekly or monthly paycheck deduction basis, Right,

600
00:27:05,240 --> 00:27:07,520
Speaker 1: instead of putting in a lumps like one time a year,

601
00:27:08,000 --> 00:27:11,359
Speaker 1: we're we're spreading out the risk by investing slowly over time.

602
00:27:11,760 --> 00:27:14,159
Speaker 1: And we're also just making sure that it's more approachable, right,

603
00:27:14,200 --> 00:27:16,280
Speaker 1: because not many of us have six grand a fully

604
00:27:16,280 --> 00:27:18,400
Speaker 1: fund of wrath at one specific time of the year.

605
00:27:18,640 --> 00:27:20,359
Speaker 1: But if we do it over twelve months, that's five

606
00:27:20,400 --> 00:27:23,359
Speaker 1: hundred bucks a month, and it feels more approachable and

607
00:27:23,359 --> 00:27:25,000
Speaker 1: and a lot of people can't even do that, right,

608
00:27:25,040 --> 00:27:26,879
Speaker 1: that's like, that's hard to get to. But part of

609
00:27:26,880 --> 00:27:28,800
Speaker 1: what we love about dollar cost averaging is that it

610
00:27:28,840 --> 00:27:32,199
Speaker 1: removes emotion from the process. Like Andy talked about, right,

611
00:27:32,200 --> 00:27:35,040
Speaker 1: we buy those investments routinely in without fail and that

612
00:27:35,320 --> 00:27:37,440
Speaker 1: is ultimately the key to wealth building, which makes dollar

613
00:27:37,480 --> 00:27:41,840
Speaker 1: cost averaging such a powerful tool in our investing tool belt. Yeah,

614
00:27:41,880 --> 00:27:45,080
Speaker 1: most folks are are either having those investments regularly deducted

615
00:27:45,119 --> 00:27:47,280
Speaker 1: from their paycheck toal like you mentioned, or you know,

616
00:27:47,320 --> 00:27:49,440
Speaker 1: if they are investing in a personal account like a

617
00:27:49,560 --> 00:27:51,840
Speaker 1: roth ira A. Uh, this is what I do. This

618
00:27:51,840 --> 00:27:53,240
Speaker 1: is what Kate and I both do. A lot of

619
00:27:53,240 --> 00:27:55,160
Speaker 1: folks tend to find it easier to have a monthly

620
00:27:55,160 --> 00:27:58,400
Speaker 1: amount deducted from their checking or their savings account uh

621
00:27:58,400 --> 00:28:01,600
Speaker 1: and deposited into that counts. But that's because most people

622
00:28:01,680 --> 00:28:05,600
Speaker 1: don't experience the same income swings that Andy does. And

623
00:28:05,640 --> 00:28:07,960
Speaker 1: so Andy, I think you've hit the heart of how

624
00:28:08,000 --> 00:28:10,159
Speaker 1: I would answer. You know, when you ask your question

625
00:28:10,480 --> 00:28:13,320
Speaker 1: you are basically doing a form of dollar cost averaging already,

626
00:28:13,960 --> 00:28:16,320
Speaker 1: so you know, in your case, we would recommend for

627
00:28:16,359 --> 00:28:19,600
Speaker 1: you to not overthink it. This is a good example

628
00:28:19,680 --> 00:28:22,520
Speaker 1: of how perfect is the enemy of good. You know,

629
00:28:22,560 --> 00:28:24,840
Speaker 1: if you over analyze it kind of get the analysis

630
00:28:24,880 --> 00:28:28,200
Speaker 1: paralysis going on. And if that keeps you from taking

631
00:28:28,320 --> 00:28:32,880
Speaker 1: regular and consistent action, uh, then you've overthought it. Oftentimes,

632
00:28:32,920 --> 00:28:34,760
Speaker 1: the best path for us to take is one that

633
00:28:34,800 --> 00:28:38,720
Speaker 1: we can sustain with little to no additional mental energy.

634
00:28:38,920 --> 00:28:41,040
Speaker 1: And so if it feels easier to fully contribute, you know,

635
00:28:41,120 --> 00:28:43,480
Speaker 1: for four or five months while your earnings are high,

636
00:28:43,680 --> 00:28:45,520
Speaker 1: then just keep doing what you're doing. So much of

637
00:28:45,560 --> 00:28:48,080
Speaker 1: it comes down to your individual personality. I know for

638
00:28:48,240 --> 00:28:50,520
Speaker 1: Kate and I for us personally, we actually try to

639
00:28:50,560 --> 00:28:52,520
Speaker 1: save up enough money so that by the end of

640
00:28:52,520 --> 00:28:55,520
Speaker 1: the year, basically by the very beginning of the next year,

641
00:28:55,920 --> 00:28:58,560
Speaker 1: our accounts are fully funded, and so we immediately deposit

642
00:28:58,640 --> 00:29:02,120
Speaker 1: that money into our WRATH accounts. We've made those contributions,

643
00:29:02,120 --> 00:29:05,000
Speaker 1: but we don't purchase the investments yet. Uh. For us,

644
00:29:05,000 --> 00:29:07,320
Speaker 1: that works pretty well when we set aside five every

645
00:29:07,320 --> 00:29:09,400
Speaker 1: single month at the end of the month to purchase

646
00:29:09,480 --> 00:29:11,800
Speaker 1: more funds. So that way, we are dollar cost averaging,

647
00:29:12,160 --> 00:29:14,800
Speaker 1: And of course I have overcomplicated a little bit, joll

648
00:29:14,920 --> 00:29:16,680
Speaker 1: And you know, you know, I have a system to

649
00:29:16,720 --> 00:29:18,320
Speaker 1: where if the market is on sale, if it goes

650
00:29:18,360 --> 00:29:20,320
Speaker 1: down a little bit, I'll purchase a few months worth

651
00:29:20,360 --> 00:29:22,800
Speaker 1: of funds. And of course this past spring was an

652
00:29:22,800 --> 00:29:25,640
Speaker 1: example of where it was. You know, obviously it takes

653
00:29:25,640 --> 00:29:28,239
Speaker 1: a lot, and we purchased the whole year's worth of

654
00:29:28,400 --> 00:29:30,640
Speaker 1: retirement funds. And so it just depends on what works

655
00:29:30,640 --> 00:29:33,160
Speaker 1: for you. For us, having a kind of a complicated

656
00:29:33,160 --> 00:29:36,200
Speaker 1: system like that works, uh, in order to take advantage

657
00:29:36,280 --> 00:29:38,080
Speaker 1: of swings in the market. So in the end, it

658
00:29:38,120 --> 00:29:40,160
Speaker 1: really does just kind of depend on what works for

659
00:29:40,200 --> 00:29:43,800
Speaker 1: you personally. Yeah, I kind of stick with a traditional

660
00:29:43,880 --> 00:29:47,160
Speaker 1: dollar cost averaging approach and and do it straight up

661
00:29:47,200 --> 00:29:49,400
Speaker 1: through all twelve months of the year. I find that

662
00:29:49,440 --> 00:29:51,960
Speaker 1: easiest because I don't know, my mind tends to maybe

663
00:29:52,080 --> 00:29:54,400
Speaker 1: fixate a little too much on on the stock market,

664
00:29:54,680 --> 00:29:57,040
Speaker 1: where things are going, how things are doing, if I'm

665
00:29:57,080 --> 00:29:59,200
Speaker 1: not going with that approach. But that was actually one

666
00:29:59,280 --> 00:30:01,320
Speaker 1: key point of what and he mentioned that he's not

667
00:30:01,320 --> 00:30:03,920
Speaker 1: paying attention to what the market's doing. He's contributing on

668
00:30:04,000 --> 00:30:07,680
Speaker 1: a sustained and regular schedule annually, but all other things

669
00:30:07,720 --> 00:30:09,800
Speaker 1: being equal, Andy, I think the way you're doing it

670
00:30:09,840 --> 00:30:12,520
Speaker 1: works out great. You're doing a form of dollar cost

671
00:30:12,560 --> 00:30:14,520
Speaker 1: averaging the works for you, and you're getting the money

672
00:30:14,520 --> 00:30:16,920
Speaker 1: in there every year, which is what's clutched. That's crucial

673
00:30:17,080 --> 00:30:19,400
Speaker 1: in order to helping you build wealth for the long haul.

674
00:30:19,720 --> 00:30:21,160
Speaker 1: So best of luck to you and your family. Keep

675
00:30:21,160 --> 00:30:23,600
Speaker 1: crushing it, and Matt, let's get to the next question.

676
00:30:23,680 --> 00:30:26,440
Speaker 1: This one's from another listener who's crushing it and they're

677
00:30:26,440 --> 00:30:28,880
Speaker 1: thinking about fire, but not in the context of an

678
00:30:28,920 --> 00:30:32,880
Speaker 1: apartment fire. They're talking about financial independence exactly. Hi, Matt

679
00:30:32,920 --> 00:30:36,560
Speaker 1: and Joel, this is Kelly from Massachusetts. I love your show.

680
00:30:36,920 --> 00:30:39,520
Speaker 1: It is helping me to learn more about finances and

681
00:30:39,600 --> 00:30:43,200
Speaker 1: keep up with my more financially savvy husband. I had

682
00:30:43,240 --> 00:30:46,520
Speaker 1: a question after listening to your episode on the fire movement.

683
00:30:47,080 --> 00:30:49,520
Speaker 1: My husband and I both work full time now and

684
00:30:49,560 --> 00:30:53,080
Speaker 1: have two small children. We have been aggressive savers and

685
00:30:53,120 --> 00:30:55,720
Speaker 1: even paid off our house this year. We would love

686
00:30:55,800 --> 00:30:57,560
Speaker 1: to be able to cut back on work to have

687
00:30:57,640 --> 00:31:01,080
Speaker 1: more quality time together as a family. My husband talks

688
00:31:01,120 --> 00:31:05,440
Speaker 1: about something called coast fire, where you adequately fund your

689
00:31:05,480 --> 00:31:08,080
Speaker 1: retirement at the beginning of your work life so that

690
00:31:08,120 --> 00:31:10,600
Speaker 1: you can work less in middle age. I did not

691
00:31:10,680 --> 00:31:13,200
Speaker 1: hear you talk about this during that episode and wanted

692
00:31:13,240 --> 00:31:16,880
Speaker 1: to hear your thoughts. Thanks for a great show, Kelly,

693
00:31:16,920 --> 00:31:19,680
Speaker 1: Thanks so much for that question on fire, financial independence,

694
00:31:19,680 --> 00:31:22,920
Speaker 1: retire early. Actually, yeah, we talked recently about those in

695
00:31:22,960 --> 00:31:26,040
Speaker 1: episode two twenty one and twenty four. But there's a

696
00:31:26,440 --> 00:31:30,080
Speaker 1: lot of different varieties, a lot of different types of fire.

697
00:31:30,440 --> 00:31:32,400
Speaker 1: You know, lean fire, fat fire. There, they're two the

698
00:31:32,440 --> 00:31:35,720
Speaker 1: most common versions. Some are saving for a pretty nice

699
00:31:35,720 --> 00:31:38,480
Speaker 1: lifestyle when they quit work. That would be fat fire,

700
00:31:38,720 --> 00:31:40,960
Speaker 1: and others are totally fine with a more bare bones income,

701
00:31:40,960 --> 00:31:42,960
Speaker 1: which would be lean fire. It just kind of depends

702
00:31:43,000 --> 00:31:45,920
Speaker 1: on what your goals are. But coast fire, it's another

703
00:31:45,960 --> 00:31:48,720
Speaker 1: interesting alternative if you start investing a lot of money

704
00:31:48,720 --> 00:31:50,960
Speaker 1: when you're super young, and by that what we're talking

705
00:31:50,960 --> 00:31:52,640
Speaker 1: about here is maxing out your I ra A s

706
00:31:53,040 --> 00:31:55,320
Speaker 1: in your workplace retirement accounts like a four one K

707
00:31:55,520 --> 00:31:58,160
Speaker 1: every year for close to a decade. You can you know,

708
00:31:58,160 --> 00:32:00,960
Speaker 1: a mass enough to be able to stop and esting completely.

709
00:32:01,440 --> 00:32:03,880
Speaker 1: With that four one K and kind of ira A combo,

710
00:32:04,200 --> 00:32:08,200
Speaker 1: you can essentially sakaway twenty each every single year. If

711
00:32:08,240 --> 00:32:10,640
Speaker 1: you are incredible savers, if you both do this for

712
00:32:10,760 --> 00:32:14,120
Speaker 1: maybe five to seven years, depending on other factors, you

713
00:32:14,160 --> 00:32:17,040
Speaker 1: can stop investing all together and then let that money

714
00:32:17,120 --> 00:32:20,600
Speaker 1: work for your future retirement over the decades. And that's

715
00:32:20,640 --> 00:32:24,080
Speaker 1: because of you know, the compounding returns. The assumption is

716
00:32:24,120 --> 00:32:26,680
Speaker 1: that your money will double every roughly nine to ten

717
00:32:26,800 --> 00:32:29,120
Speaker 1: years in the market. And so that's kind of the

718
00:32:29,160 --> 00:32:31,760
Speaker 1: math behind how Coast Fire works. You kind of get

719
00:32:31,800 --> 00:32:33,480
Speaker 1: that money in on the front end, uh, and then

720
00:32:33,480 --> 00:32:35,520
Speaker 1: you don't necessarily have to worry about that as much.

721
00:32:35,520 --> 00:32:37,440
Speaker 1: You can kind of sit back and coast. Yeah. And

722
00:32:37,680 --> 00:32:40,480
Speaker 1: then when you stop contributing to those retirement accounts, because

723
00:32:40,480 --> 00:32:43,320
Speaker 1: you've crushed that goal already in like let's say, you know, six, seven,

724
00:32:43,360 --> 00:32:46,080
Speaker 1: eight years, you've got a lot more flexibility with the

725
00:32:46,120 --> 00:32:49,160
Speaker 1: income that you do make. You can, like you mentioned,

726
00:32:49,160 --> 00:32:52,280
Speaker 1: prioritize working less in some of those more important years

727
00:32:52,320 --> 00:32:54,360
Speaker 1: when you have young kiddos. That's you know, something that

728
00:32:54,400 --> 00:32:55,960
Speaker 1: Matt and I have thought about a good deal is

729
00:32:55,960 --> 00:32:58,840
Speaker 1: how can we work less during these years where our

730
00:32:58,880 --> 00:33:00,960
Speaker 1: kids are at home? And one of the other awesome

731
00:33:01,000 --> 00:33:03,080
Speaker 1: things about Coast Fire, Matt in particular, is that you

732
00:33:03,120 --> 00:33:06,760
Speaker 1: actually have to save less money this way because you're

733
00:33:06,840 --> 00:33:09,680
Speaker 1: letting compounding returns over the decades do the heavy lifting,

734
00:33:09,720 --> 00:33:12,920
Speaker 1: do the major work for you your magic. Yeah, you're

735
00:33:12,960 --> 00:33:15,880
Speaker 1: using that that eighth wonder of the world of compounding returns.

736
00:33:16,000 --> 00:33:18,720
Speaker 1: And your initial investment amount actually doesn't have to be

737
00:33:18,760 --> 00:33:22,120
Speaker 1: as big compared to the traditional route of spreading out

738
00:33:22,160 --> 00:33:26,160
Speaker 1: your investing over a thirty plus year lifespan um. If

739
00:33:26,240 --> 00:33:28,840
Speaker 1: you frontload the sacrifice, as our friend doctor you would say,

740
00:33:29,040 --> 00:33:30,840
Speaker 1: and you put in a ton of money early on

741
00:33:30,880 --> 00:33:33,640
Speaker 1: in your investing lifetime, and you're putting in fifty bucks

742
00:33:33,680 --> 00:33:36,200
Speaker 1: as a couple, you know over a six, seven, eight

743
00:33:36,240 --> 00:33:39,520
Speaker 1: year period, you really don't have to invest anymore in

744
00:33:39,560 --> 00:33:42,920
Speaker 1: all likelihood for your retirement past that window. Yeah. So, Kelly,

745
00:33:42,920 --> 00:33:45,360
Speaker 1: we're we're huge phases of choosing a lifestyle that works

746
00:33:45,400 --> 00:33:47,200
Speaker 1: best for you and your family. I love that you're

747
00:33:47,280 --> 00:33:49,720
Speaker 1: letting your vision what you want your family life to

748
00:33:49,760 --> 00:33:52,280
Speaker 1: look like. You know, you're letting that influence how you're

749
00:33:52,280 --> 00:33:55,920
Speaker 1: handling your money now. Uh. In Coast Fire has a

750
00:33:56,000 --> 00:33:58,800
Speaker 1: lot of appeal for those who are fortunate enough to

751
00:33:58,800 --> 00:34:01,440
Speaker 1: earn a decent salary and then disciplined enough to not

752
00:34:01,600 --> 00:34:03,800
Speaker 1: spend a whole lot of it and invest it instead.

753
00:34:04,320 --> 00:34:06,120
Speaker 1: So if you and your husband are both in agreement,

754
00:34:06,200 --> 00:34:09,360
Speaker 1: you know, keep talking tons of money away now while

755
00:34:09,440 --> 00:34:12,920
Speaker 1: you are preparing yourself for that incredibly flexible future. You know.

756
00:34:12,920 --> 00:34:15,200
Speaker 1: Wh when it comes to the lifestyle. Uh, it's also

757
00:34:15,239 --> 00:34:19,160
Speaker 1: too about choosing the type of work that you continue

758
00:34:19,200 --> 00:34:22,000
Speaker 1: to do, because a part of coast Fire is maybe

759
00:34:22,040 --> 00:34:24,280
Speaker 1: stepping away from a job that's a little more stressful,

760
00:34:24,680 --> 00:34:26,479
Speaker 1: uh and instead taking one thing maybe you're a little

761
00:34:26,480 --> 00:34:28,720
Speaker 1: more passionate about. And you're able to do that because

762
00:34:28,760 --> 00:34:30,760
Speaker 1: you don't have to worry about, you know, saving tons

763
00:34:30,760 --> 00:34:33,200
Speaker 1: of money towards retirement. You can take something that maybe

764
00:34:33,239 --> 00:34:36,160
Speaker 1: pays a little bit less, but it is assumed that

765
00:34:36,200 --> 00:34:39,160
Speaker 1: you will continue to work one way or the other. Yeah,

766
00:34:39,280 --> 00:34:41,120
Speaker 1: Or you can go part time, choose for your hours,

767
00:34:41,160 --> 00:34:43,040
Speaker 1: exactly start your own thing. I mean, the world is

768
00:34:43,120 --> 00:34:45,000
Speaker 1: kind of your oyster once you've front loaded a lot

769
00:34:45,040 --> 00:34:48,000
Speaker 1: of those investment needs early on in your working career.

770
00:34:48,320 --> 00:34:49,600
Speaker 1: But I think it can be helpful to a lot

771
00:34:49,640 --> 00:34:52,279
Speaker 1: of people, especially our younger listeners out there right, even

772
00:34:52,320 --> 00:34:54,920
Speaker 1: if you're not quite sure like what you're saving and

773
00:34:54,920 --> 00:34:58,640
Speaker 1: investing for front loading the sacrifice. Putting more in investments

774
00:34:58,640 --> 00:35:01,440
Speaker 1: early on pays me your dividends and allows for a

775
00:35:01,440 --> 00:35:04,200
Speaker 1: lot more flexibility down the road. So, Matt, even when

776
00:35:04,200 --> 00:35:06,520
Speaker 1: I was in my early twenties, I didn't really know

777
00:35:06,680 --> 00:35:09,120
Speaker 1: like what my future was gonna look like. I wasn't married,

778
00:35:09,120 --> 00:35:10,920
Speaker 1: I didn't have kids, but I kind of had an

779
00:35:10,960 --> 00:35:13,760
Speaker 1: idea of what I wanted my life to look like, um,

780
00:35:13,800 --> 00:35:17,239
Speaker 1: even though it was incredibly general, not specific yet. And

781
00:35:17,280 --> 00:35:20,320
Speaker 1: so prioritizing investing in those years is just as important,

782
00:35:20,320 --> 00:35:22,720
Speaker 1: if not more important, And it can help you achieve

783
00:35:23,000 --> 00:35:25,400
Speaker 1: the future goals that you're going to create later on

784
00:35:25,440 --> 00:35:27,560
Speaker 1: in your life that you don't even know exists yet.

785
00:35:27,600 --> 00:35:29,160
Speaker 1: Like I didn't know that I was gonna want to

786
00:35:29,160 --> 00:35:30,680
Speaker 1: spend more time with my kids because I didn't have

787
00:35:30,719 --> 00:35:34,520
Speaker 1: any yet. But regularly and continually making those investments anyway

788
00:35:34,560 --> 00:35:36,600
Speaker 1: has allowed that to become more of a reality in

789
00:35:36,640 --> 00:35:39,120
Speaker 1: my life basically a decade and a half later. Yeah,

790
00:35:39,160 --> 00:35:41,960
Speaker 1: and then with Kelly her knowing exactly what it is

791
00:35:41,960 --> 00:35:44,480
Speaker 1: that she's pursuing, you know, how much more is her

792
00:35:44,920 --> 00:35:47,359
Speaker 1: you know, intensity gonna ramp up right now in order

793
00:35:47,400 --> 00:35:49,080
Speaker 1: to kind of live the life that she does want

794
00:35:49,080 --> 00:35:51,520
Speaker 1: to lead, you know, in the years to come. So, Kelly,

795
00:35:51,680 --> 00:35:53,720
Speaker 1: we love that you asked this question. This is great

796
00:35:54,120 --> 00:35:56,080
Speaker 1: and we wish you and your family the best of luck.

797
00:35:56,160 --> 00:35:57,719
Speaker 1: All Right, Joe, let's go ahead and shift gears. Ma,

798
00:35:57,840 --> 00:35:59,799
Speaker 1: let's take it back to the beer. This episode, you

799
00:35:59,800 --> 00:36:03,120
Speaker 1: and I shared a Southern brewing companies their red wine

800
00:36:03,400 --> 00:36:06,480
Speaker 1: food or beer, and I will give you the honor.

801
00:36:06,719 --> 00:36:08,399
Speaker 1: What are your thoughts on this one? Man? All right, first,

802
00:36:08,480 --> 00:36:10,799
Speaker 1: let's talk about what a food or beer means. We've

803
00:36:10,800 --> 00:36:13,680
Speaker 1: talked about it before, but sometimes folks miss the beer

804
00:36:13,719 --> 00:36:16,080
Speaker 1: explanation stuff, so let's yeah, let's revisit it, all right.

805
00:36:16,120 --> 00:36:19,759
Speaker 1: A food is basically this giant oak vessel for aging beer.

806
00:36:19,880 --> 00:36:22,440
Speaker 1: It allows the beer time to change and develop, and

807
00:36:22,480 --> 00:36:24,759
Speaker 1: at the same time it takes on oftentimes a nice

808
00:36:24,760 --> 00:36:29,760
Speaker 1: oakey characteristic. I believe foods traditionally they're French, right, maybe

809
00:36:30,520 --> 00:36:33,520
Speaker 1: that's my guess. Alright, uh so, yeah, we're not experts

810
00:36:33,560 --> 00:36:35,919
Speaker 1: on foods, but but yeah, they do make some good beers.

811
00:36:35,920 --> 00:36:39,360
Speaker 1: And this beer, man is, it's it's tart, it's funky,

812
00:36:39,440 --> 00:36:41,560
Speaker 1: it does have some of those oak notes, it's got

813
00:36:41,600 --> 00:36:43,600
Speaker 1: a little bit of that red wine vibe. So basically,

814
00:36:43,640 --> 00:36:46,160
Speaker 1: after this beer was which aged in food ors, it

815
00:36:46,200 --> 00:36:48,439
Speaker 1: was then transferred to red wine barrels. And I feel

816
00:36:48,440 --> 00:36:50,879
Speaker 1: like you do pick up um, some of those red

817
00:36:50,920 --> 00:36:53,680
Speaker 1: wine notes and and it's delicious, man, Like, I really

818
00:36:53,719 --> 00:36:56,040
Speaker 1: really like this beer. It's got a nice complexity, a

819
00:36:56,080 --> 00:36:58,240
Speaker 1: lot of different notes going on, but they all work together.

820
00:36:58,440 --> 00:37:00,920
Speaker 1: They harmonized really really well. Yeah, man, I'm with you.

821
00:37:00,960 --> 00:37:02,960
Speaker 1: It's it's a super balanced beer, you know, like the

822
00:37:03,239 --> 00:37:06,879
Speaker 1: tartan sour notes balanced with the sweetness you know of

823
00:37:06,920 --> 00:37:10,120
Speaker 1: this sour allows it to be very drinkable. It's the

824
00:37:10,120 --> 00:37:11,760
Speaker 1: perfect kind of beer that I want to be drinking

825
00:37:11,840 --> 00:37:13,239
Speaker 1: kind of here at the end of summer at the

826
00:37:13,280 --> 00:37:15,720
Speaker 1: beginning of fall. It's got me thinking about the upcoming

827
00:37:15,719 --> 00:37:17,839
Speaker 1: winner a little bit. With some of those oaky, woody notes.

828
00:37:17,960 --> 00:37:19,400
Speaker 1: This is the kind of beer I would drink all

829
00:37:19,400 --> 00:37:21,320
Speaker 1: the time if I was digging something a little more sour.

830
00:37:21,760 --> 00:37:23,160
Speaker 1: So that's it for the beer talk. I'm glad you

831
00:37:23,160 --> 00:37:24,799
Speaker 1: and I got to share this one together, man uh.

832
00:37:24,800 --> 00:37:26,480
Speaker 1: And that's gonna be it for this episode. Our listeners

833
00:37:26,480 --> 00:37:28,080
Speaker 1: can find our show notes up on our website at

834
00:37:28,080 --> 00:37:29,640
Speaker 1: how to money dot com. There will make sure to

835
00:37:29,680 --> 00:37:31,440
Speaker 1: link to any posts or any other resources that we

836
00:37:31,480 --> 00:37:34,200
Speaker 1: mentioned during this episode. Yeah, and if you have a

837
00:37:34,280 --> 00:37:38,200
Speaker 1: question that you want featured on an upcoming ask HTM episode,

838
00:37:38,200 --> 00:37:40,160
Speaker 1: we would love to hear it. Just go to our

839
00:37:40,200 --> 00:37:43,000
Speaker 1: website how to money dot com slash ask. You will

840
00:37:43,000 --> 00:37:45,960
Speaker 1: find the simple instructions there to submit your voice question

841
00:37:46,400 --> 00:37:48,839
Speaker 1: and hopefully we can take it really soon. All Right, Matt,

842
00:37:48,840 --> 00:37:51,080
Speaker 1: that's gonna do it for this episode. Until next time, Buddy,

843
00:37:51,320 --> 00:38:00,120
Speaker 1: best Friends Out, Best Friends Out. M