WEBVTT - Everything Costs More Than You Think (Bestie Ep) #251 0:00:00.120 --> 0:00:03.119 Joel. These are the rare episodes when I start talking 0:00:03.200 --> 0:00:05.640 first people like he's the best. I don't think I 0:00:05.640 --> 0:00:08.319 don't think they do. Actually, But just this morning, man, 0:00:08.320 --> 0:00:12.120 you and I were talking. We're not surprisingly talking about bikes. Uh, 0:00:12.160 --> 0:00:14.600 We're talking about mountain biking. And you know, you and 0:00:14.640 --> 0:00:17.200 I both have previously been really into mountain biking, and 0:00:17.239 --> 0:00:18.799 we started thinking through, like why don't we do that 0:00:18.840 --> 0:00:21.320 more often? Right? But then we kind of started thinking 0:00:21.320 --> 0:00:25.880 through all of these additional expenses that come with a 0:00:25.880 --> 0:00:28.319 mountain bike. You gotta get a car carrier, because you 0:00:28.360 --> 0:00:31.760 can't just bike to a trailhead necessarily, at least we 0:00:31.800 --> 0:00:34.720 can't where we live in the city. You can't exactly. Um, 0:00:34.720 --> 0:00:36.519 a friend of ours, he's like three out of four 0:00:36.560 --> 0:00:38.279 times that he's come back from mountain biking, he's come 0:00:38.320 --> 0:00:41.760 back injured, like he's been even bleeding. The increased medical cost, 0:00:41.880 --> 0:00:44.519 there's medical constisation with it, and just the time, right, 0:00:44.600 --> 0:00:47.320 So I mean just driving to uh somewhere where you 0:00:47.320 --> 0:00:50.400 can go mountain biking, driving back home, posing down your gear, 0:00:50.640 --> 0:00:52.080 and then of course not to mention just all the 0:00:52.120 --> 0:00:55.280 small additional paraphernalia, all the additional gear that comes along 0:00:55.320 --> 0:00:58.160 with getting back into mountain biking. You and I talked 0:00:58.200 --> 0:00:59.680 about it for a little bit. We decided that, you 0:00:59.680 --> 0:01:01.760 know what, like it may not be worth it right 0:01:01.800 --> 0:01:05.080 now to get back into mountain biking. And so we 0:01:05.160 --> 0:01:08.039 feel that it's important for folks to consider all of 0:01:08.040 --> 0:01:10.760 the different costs associated with a purchase. And that's what 0:01:10.840 --> 0:01:13.320 made us think of this particular episode. Yeah, pretty much 0:01:13.319 --> 0:01:16.480 everything that we buy has secondary costs, and most of 0:01:16.480 --> 0:01:19.080 the time we don't consider those before we make the purchase. 0:01:19.120 --> 0:01:21.720 We're like, oh, it's a five mountain bike boom, I'm 0:01:21.720 --> 0:01:24.199 in and let's do it. Let's go right and yeah, 0:01:24.400 --> 0:01:26.400 and then you're like, but I need this, this, this 0:01:26.440 --> 0:01:28.560 and this, and it takes extra time, it's got all 0:01:28.560 --> 0:01:31.080 these other costs associated with it that I didn't factor 0:01:31.080 --> 0:01:33.480 in and I wasn't expecting. And so yeah, I think 0:01:33.560 --> 0:01:36.080 this episode was really a call to add that next 0:01:36.160 --> 0:01:39.400 level thinking into a purchase before you make the purchase, 0:01:39.600 --> 0:01:42.800 so that you don't over spend, over extend yourself when 0:01:42.800 --> 0:01:44.880 it comes to your budget. And and I think sometimes 0:01:44.880 --> 0:01:47.840 we have those secondary costs that we haven't strongly considered. 0:01:47.840 --> 0:01:50.600 Our are what do end up wrecking our budget. And additionally, 0:01:50.600 --> 0:01:52.520 I feel like they can kind of sometimes suck the 0:01:52.560 --> 0:01:54.840 fun out of, you know, the activity to begin with. 0:01:54.880 --> 0:01:56.960 Like when it comes to hobbies, do you think, oh, yeah, 0:01:57.000 --> 0:01:58.480 this is gonna be just this little thing I do. 0:01:58.520 --> 0:02:00.120 But then before you know it, when it takes that 0:02:00.240 --> 0:02:02.919 much money and that much time, you almost feel guilty. 0:02:02.960 --> 0:02:05.080 I feel guilty sometimes when things end up costing more 0:02:05.120 --> 0:02:07.640 money than I expect. And and so yeah, there's just 0:02:07.720 --> 0:02:10.560 lots of different ways to think about these additional expenses 0:02:10.760 --> 0:02:14.079 that a company purchases, and they creep in so much 0:02:14.080 --> 0:02:16.680 of the time, and and it's and it can't be frustrating, 0:02:16.680 --> 0:02:18.760 I agree if it's something that you want to be 0:02:18.800 --> 0:02:21.400 an inexpensive hobby and then you find yourself norre not 0:02:21.440 --> 0:02:24.519 on the gear that accompanies it, and you spend too much, 0:02:24.560 --> 0:02:27.399 and it makes the hobby sometimes a little bit less fun, 0:02:27.880 --> 0:02:30.359 a little bit less desirable. So, without further ado, let's 0:02:30.360 --> 0:02:32.960 get to our Bestie episode. This is a replay of 0:02:33.000 --> 0:02:35.800 an episode we created a couple of years ago specifically 0:02:35.880 --> 0:02:39.440 about secondary cost And here we go, Welcome to how 0:02:39.480 --> 0:02:42.440 to Money. I'm Joel and I'm Matt, and today we're 0:02:42.480 --> 0:03:04.960 discussing why everything costs more than you think, Joel, you 0:03:05.480 --> 0:03:08.160 and I are best friends. A lot of our new 0:03:08.200 --> 0:03:11.160 listeners may have heard that, but they don't know how 0:03:11.520 --> 0:03:13.959 we got to be friends. How deep this friendship runs. 0:03:14.440 --> 0:03:16.880 Do you do you remember when we first met? Honestly, dude, 0:03:17.720 --> 0:03:19.880 I don't. It was it made that much of an 0:03:19.919 --> 0:03:23.720 impression on you. If you remember our origin story, please 0:03:23.960 --> 0:03:26.720 honestly share. Yeah, honestly, I don't remember when we actually met. 0:03:26.760 --> 0:03:29.280 The first memory, though, that I do have is some 0:03:29.360 --> 0:03:32.720 friends of ours, mutual friends, had invited Kate and I 0:03:32.880 --> 0:03:35.480 over to play some board games and you and Emily 0:03:35.520 --> 0:03:37.560 were also there, and I think we may have been 0:03:37.560 --> 0:03:41.360 playing some original uh Settlers of Kitan. Oh yeah, that's 0:03:41.360 --> 0:03:43.400 like that sound about right. It's like the gateway drug 0:03:43.480 --> 0:03:45.000 for nerdy board games. Yeah, so I think this is 0:03:45.040 --> 0:03:47.000 about eight years ago, and yeah, that's when we that's 0:03:47.000 --> 0:03:48.800 when we first started hanging out. I don't have anything 0:03:48.840 --> 0:03:51.400 specific about that night. I'm sure I whipped your tail 0:03:52.280 --> 0:03:55.240 some Settlers, but unlikely. That is funny that it started 0:03:55.240 --> 0:03:57.800 out with us playing board games, because we're both super 0:03:57.840 --> 0:03:59.680 into nerdy board games. We did a whole episode on 0:03:59.680 --> 0:04:02.080 it back in the day, and we made recommendations kind 0:04:02.080 --> 0:04:04.640 of for some of our favorites. But yeah, dude, I 0:04:04.840 --> 0:04:07.960 think it's not a knock on you because obviously we're 0:04:08.000 --> 0:04:10.680 best friends. But I barely remember like the birth of 0:04:10.680 --> 0:04:13.240 my first daughter. Now, I just feel like so many 0:04:13.360 --> 0:04:16.240 five years have passed and that part of my memory 0:04:16.360 --> 0:04:18.640 is just almost gone. I feel like the most cemented 0:04:18.680 --> 0:04:21.680 memories I have of our friendship going back were two 0:04:21.760 --> 0:04:24.679 times that we traveled together as couples, and the first 0:04:24.680 --> 0:04:27.760 one was we left on Halloween like six years ago 0:04:27.920 --> 0:04:29.600 and we went to Ireland together as a family, and 0:04:29.600 --> 0:04:31.120 I think we mentioned that on the podcast at one 0:04:31.120 --> 0:04:33.920 at one point. And then a trip that we had 0:04:33.960 --> 0:04:36.640 to the Keys, which we kind of piggybacked on you 0:04:36.760 --> 0:04:38.599 having a photo shoot a wedding that you had to 0:04:38.600 --> 0:04:41.160 shoot down there, and we kind of stayed together. And 0:04:41.279 --> 0:04:43.080 that trip to the Keys, when we had our our 0:04:43.440 --> 0:04:46.479 oldest daughters were only just a few months old. I 0:04:46.520 --> 0:04:48.800 just distinctly remember that trip to Those are kind of 0:04:48.920 --> 0:04:51.760 the memories that really are cemented from our early friendship days. 0:04:51.880 --> 0:04:54.440 So basically you'll remember things where there's pictures associated with 0:04:54.480 --> 0:04:58.520 it that you can go back and see pretty much. Yeah, 0:04:58.800 --> 0:05:01.760 So it's interesting you mentioned that that sort of Keys 0:05:01.839 --> 0:05:05.640 Florida Keys work photography trip because I remember, actually before 0:05:05.720 --> 0:05:08.720 even Ireland, was one time when Kate and I did 0:05:08.720 --> 0:05:13.000 some photography work for a restaurant and one of the 0:05:13.360 --> 0:05:15.159 things that we negotiated with them was that we got 0:05:15.240 --> 0:05:19.280 a Sweet Fats get certificate. That's right, Yeah, they paid 0:05:19.320 --> 0:05:21.080 us in food and this place is really good. This 0:05:21.160 --> 0:05:23.440 is a really great restaurant here in Atlanta. And that 0:05:23.600 --> 0:05:26.839 was super early on in our friendship, very very early on. Yeah, 0:05:26.880 --> 0:05:29.640 you invited us to this fancy dinner. I was like, oh, 0:05:29.680 --> 0:05:32.000 I don't know him like that, but well, the reason 0:05:32.040 --> 0:05:34.520 being because so yeah, we got this huge gift certificate 0:05:34.520 --> 0:05:36.040 and Kate and I looked at each other and we thought, 0:05:36.360 --> 0:05:38.880 we can't. This is a lot of money, and it'd 0:05:38.880 --> 0:05:40.480 be more fun if we went with some friends. So 0:05:40.520 --> 0:05:43.160 we thought of you guys. And what I really remember, though, 0:05:43.279 --> 0:05:45.400 is that we hadn't gone to a lot of nice 0:05:45.440 --> 0:05:48.960 restaurants at that point in our lives. We totally novices 0:05:49.480 --> 0:05:51.520 nice restaurants. And I'm pretty sure you had on a 0:05:51.600 --> 0:05:55.320 T shirt, but we walked in and probably like a 0:05:55.320 --> 0:05:57.320 band T shirt or something. We were I think we 0:05:57.320 --> 0:06:01.719 were all a little under underdressed backwards hat, yes, but 0:06:01.920 --> 0:06:04.520 we enjoyed a really nice dinner. I do remember that. 0:06:04.560 --> 0:06:07.159 I remember getting some awesome steak, and maybe that was 0:06:07.200 --> 0:06:10.000 really what cemented it for us, right, yeah, bonding over meat? 0:06:10.120 --> 0:06:12.560 Yeah why not? I sorry all you vegetarians out there, 0:06:13.640 --> 0:06:16.320 but yeah, so traveling together as friends and and a 0:06:16.360 --> 0:06:18.720 great meal sometimes and and then nerdy board games. Man, 0:06:18.720 --> 0:06:20.640 I feel like that kind of encompasses some of the 0:06:20.680 --> 0:06:23.360 things that we enjoy the most and uh and still 0:06:23.440 --> 0:06:25.680 enjoy kind of doing together when whenever we can, let's 0:06:25.680 --> 0:06:27.840 do it some more. So that's uh for all you 0:06:28.000 --> 0:06:29.720 new listeners, that's kind of how Matt and I became 0:06:29.720 --> 0:06:32.040 best friends. And then, like you'll find out as you 0:06:32.120 --> 0:06:35.120 continue listening to the show, we talk about the things 0:06:35.200 --> 0:06:37.200 on this show that we care about that we already 0:06:37.279 --> 0:06:41.400 enjoy discussing and and we started this podcast because we 0:06:41.440 --> 0:06:44.760 love craft beer and we love talking about money things 0:06:44.760 --> 0:06:47.200 that matter to us. And so yeah, this podcast is 0:06:47.200 --> 0:06:49.359 really just kind of an excuse for Matt and I 0:06:49.400 --> 0:06:51.960 to do what we would be doing anyway, like drinking 0:06:51.960 --> 0:06:54.480 beer and talking about it too, right, Yeah, And today 0:06:54.600 --> 0:06:57.800 we are drinking a beer called Pretty Willie's Imperial stout 0:06:58.000 --> 0:07:00.880 by Against the Grain Brewery. This is a beer that 0:07:01.120 --> 0:07:03.520 my real estate agent gave to me over a year 0:07:03.560 --> 0:07:06.200 ago when I closed on a house. And this, in 0:07:06.200 --> 0:07:09.239 particular is a beer that you're supposed to let rest 0:07:09.279 --> 0:07:11.920 and evolve, and so we're gonna kind of see how 0:07:11.920 --> 0:07:14.240 it's drinking. We'll do. Thanks so much for sharing this 0:07:14.280 --> 0:07:17.600 one with me. Cheers, Bunny, cheers. All right, Matt, give 0:07:17.640 --> 0:07:20.720 me one word that describes how you feel about this 0:07:20.720 --> 0:07:24.000 beer after just one sip, only one word. I feel 0:07:24.000 --> 0:07:25.320 like this is gonna be harder for you than me, 0:07:25.440 --> 0:07:28.920 because I'm ver both. Yeah, Joel tends to be the 0:07:28.960 --> 0:07:30.679 one that talks a little bit more on the show, 0:07:30.920 --> 0:07:33.800 which is totally fine. If I had my own podcast 0:07:33.800 --> 0:07:37.920 by myself, it might only be five minutes. But if 0:07:37.960 --> 0:07:40.080 it was just you talking, who knows how long you'd go. 0:07:40.640 --> 0:07:43.520 That's true. Okay, But back to you, so one word. Okay, 0:07:43.720 --> 0:07:45.840 this is gonna be weird, but I'm gonna say jacket. 0:07:46.080 --> 0:07:49.800 All right, that's weird. But I think we've already mentioned jacket. 0:07:50.040 --> 0:07:51.840 I think we mentioned on the show before that you 0:07:52.120 --> 0:07:56.040 have some odd taste buds and some odd sensory abilities. 0:07:56.320 --> 0:07:59.040 You're like the beer Somalia or this podcast, you bring 0:07:59.040 --> 0:08:02.200 that to the table. I have a much less developed palette. 0:08:02.520 --> 0:08:04.760 So my word, my one word for this beer for 0:08:04.840 --> 0:08:08.600 right now is going to be roasty. Nice. See roasty. 0:08:08.600 --> 0:08:11.640 That's I think everyone's gonna understand that. Jacket. I think 0:08:11.680 --> 0:08:14.320 what happens is I overthink stuff and now I'm just 0:08:14.360 --> 0:08:16.920 gonna have to actually explain myself. But we'll say that 0:08:16.960 --> 0:08:18.880 for the end of the show, so we will get 0:08:18.920 --> 0:08:22.560 to why Matt's on one word for this beer was jacket. 0:08:23.120 --> 0:08:25.720 Uh La get later on, but first let's get to 0:08:25.760 --> 0:08:28.320 the topic of hand. Everything costs more than you think, 0:08:28.640 --> 0:08:30.360 and what Matt and I wanted to talk about on 0:08:30.400 --> 0:08:34.560 the show today is considering secondary costs. Anytime you make 0:08:34.600 --> 0:08:38.800 a purchase, the price tag that you're paying upfront on 0:08:39.440 --> 0:08:42.400 whatever it is, is not the only cost involved in 0:08:42.440 --> 0:08:45.840 making a purchase, and we wanted to talk about the 0:08:45.880 --> 0:08:49.440 other costs involved. H we're calling secondary costs, and those 0:08:49.480 --> 0:08:52.320 are additional costs that you will or might end up 0:08:52.360 --> 0:08:55.040 paying on a purchase that fall outside of that original 0:08:55.040 --> 0:08:57.560 purchase amount. And we think it's really really important to 0:08:57.559 --> 0:09:00.480 consider those things because it can be easy when you're 0:09:00.480 --> 0:09:03.920 budgeting or when you're considering making a purchase or adding 0:09:03.960 --> 0:09:07.080 something into your life, to only consider that upfront price 0:09:07.120 --> 0:09:09.320 tag and not think about all those other dominoes at 0:09:09.320 --> 0:09:11.920 fall when it comes to the price you're paying. And so, Matt, 0:09:12.040 --> 0:09:14.600 this podcast is going to be dedicated to those other 0:09:14.600 --> 0:09:17.160 dominoes at fall how that impacts, like your wallet in 0:09:17.160 --> 0:09:20.280 your life. That's right. Yeah, Folks tend to not consider 0:09:20.360 --> 0:09:22.760 the sort of nickel and diming effect that happens after 0:09:22.800 --> 0:09:24.920 you make a purchase. Whether it's a quality purchase or 0:09:25.000 --> 0:09:28.080 a cheap purchase, it doesn't really matter. What we're talking about, 0:09:28.080 --> 0:09:30.200 like those expenses that, like you said, you may or 0:09:30.240 --> 0:09:32.280 may not pay, and let's start with the ones that 0:09:32.360 --> 0:09:34.680 you will pay. Yeah, So we kind of divided this 0:09:34.800 --> 0:09:38.120 up into two different kinds of secondary costs. One is 0:09:38.520 --> 0:09:41.120 a hard secondary cost and the other is a soft 0:09:41.559 --> 0:09:43.840 or lifestyle secondary cost. And so we'll kind of just 0:09:43.920 --> 0:09:47.160 quickly run through the definition and describe what's different about each. 0:09:47.640 --> 0:09:49.960 That's right, man. So hard secondary costs are what we're 0:09:49.960 --> 0:09:53.320 considering to be costs that you have to pay because 0:09:53.400 --> 0:09:55.880 it's either the law, right, so sales tax, like you 0:09:55.920 --> 0:09:58.319 have to pay sales tax, or these might be costs 0:09:58.320 --> 0:09:59.760 that you have to pay because you signed an in 0:09:59.800 --> 0:10:01.840 gree where you promise that you will And these can 0:10:01.880 --> 0:10:03.800 be monthly fees or an h O a say in 0:10:03.840 --> 0:10:07.040 a condo that you live in, or these are costs 0:10:07.040 --> 0:10:10.040 because the item that you've purchased just requires it. You know, 0:10:10.040 --> 0:10:13.319 it's sort of basic maintenance. And I'm not talking about fancy, 0:10:13.400 --> 0:10:16.079 high end maintenance or anything that kind of goes above 0:10:16.120 --> 0:10:19.200 and beyond maintaining that item and allowing it to, you know, 0:10:19.240 --> 0:10:22.360 work and function like you wanted to. In these cases, though, 0:10:22.400 --> 0:10:24.200 you don't have a choice, and these are things that 0:10:24.240 --> 0:10:26.959 you will have to pay. Yeah. So those hard costs, right, 0:10:27.000 --> 0:10:29.839 they are there for a lot of purchases, and we'll 0:10:29.880 --> 0:10:31.880 kind of go into some examples later on in the 0:10:31.880 --> 0:10:34.880 show too, but there there no matter what, and there's 0:10:34.880 --> 0:10:37.000 no getting around them. And they're also kind of easily 0:10:37.040 --> 0:10:40.800 identifiable upfront. Right, you can do the research, you can 0:10:40.840 --> 0:10:42.640 know the figures, and you can kind of know what 0:10:42.679 --> 0:10:44.160 you're getting into when it comes to some of those 0:10:44.160 --> 0:10:47.520 hard costs. But on the other hand, these soft secondary 0:10:47.520 --> 0:10:49.600 costs that we're gonna talk about Matt their costs where 0:10:49.640 --> 0:10:53.480 you're likely going to feel pressured to pay because they 0:10:53.480 --> 0:10:56.760 fit and complement that primary purchase. So these are ones 0:10:56.840 --> 0:10:59.920 that you might not see. You can't necessarily quantify up 0:11:00.040 --> 0:11:03.040 front unless you're really really thoughtful. And an example of 0:11:03.080 --> 0:11:05.679 that would be if you get a new laptop, Oh, well, 0:11:05.720 --> 0:11:07.760 guess what, I need a new backpack to carry that 0:11:07.800 --> 0:11:10.360 laptop around in. And then you are like, well, you 0:11:10.400 --> 0:11:12.520 know what, I'm one of this cool backpack, Well, I 0:11:12.559 --> 0:11:14.320 need a jacket to match or whatever it is, right, 0:11:14.480 --> 0:11:15.840 And it's like that if you give the mouse a 0:11:15.840 --> 0:11:18.520 cookie syndrome, where those are kind of what these soft 0:11:18.559 --> 0:11:21.200 secondary costs are. Those what we're calling them. And so 0:11:21.320 --> 0:11:24.360 if it's a purchase that you make that then forces 0:11:24.400 --> 0:11:26.400 you to feel like you need to upgrade something else 0:11:26.400 --> 0:11:29.040 in your life, and that's one of those soft secondary costs. 0:11:29.040 --> 0:11:30.719 It's a little harder to quantify up front, but we're 0:11:30.720 --> 0:11:33.000 gonna kind of go through some ways to help you 0:11:33.160 --> 0:11:37.080 figure out what those could be and how to decrease 0:11:37.200 --> 0:11:40.000 or maybe eliminate them even in your life. That's right, man, 0:11:40.040 --> 0:11:42.120 it's crazy, right. It's a little bit like lifestyle creep. 0:11:42.200 --> 0:11:43.920 It's kind of funny hearing you talk about an example 0:11:43.920 --> 0:11:46.560 with like the laptop with the bag and then the jacket. 0:11:46.600 --> 0:11:49.319 But it's almost like anytime something touches something else, it's 0:11:49.320 --> 0:11:52.520 like it getting gets infected with looking old, right, because 0:11:52.520 --> 0:11:55.440 you have something like new and shiny, and then in 0:11:55.520 --> 0:11:58.320 relation to the old stuff, you think it really would 0:11:58.320 --> 0:12:00.200 be nice if that was kind of upgraded as well, 0:12:00.240 --> 0:12:02.160 And then before you know it, where do you stop? 0:12:02.200 --> 0:12:03.800 Like when do you stop? Where do you draw the line? 0:12:04.280 --> 0:12:05.960 And I think what's important to keep in mind, though, 0:12:06.040 --> 0:12:08.880 is that you can draw that line. You can decide 0:12:08.920 --> 0:12:11.320 that these are expenses that I'm not going to participate in. 0:12:11.679 --> 0:12:13.640 Then that you have control over. And that's the biggest 0:12:13.640 --> 0:12:17.920 difference between a hard secondary cost versus the soft or 0:12:18.000 --> 0:12:21.840 lifestyle secondary cost is that the soft secondary lifestyle costs 0:12:21.880 --> 0:12:24.560 you just have control over, You have options. But either 0:12:24.600 --> 0:12:26.040 way it's yeah, like you said, it's good to be 0:12:26.080 --> 0:12:28.040 aware of those and to know what steps you can 0:12:28.040 --> 0:12:30.920 take to keep the expenses down. Yeah, And I think 0:12:30.920 --> 0:12:33.480 all of us have experienced both ends of these, right, 0:12:33.520 --> 0:12:36.160 We've experienced buying something and we didn't realize or we 0:12:36.200 --> 0:12:39.440 didn't factor in those hard secondary costs. We made the 0:12:39.440 --> 0:12:43.000 purchase or we made the leap into something and we 0:12:43.040 --> 0:12:46.240 didn't even take into consideration those costs that were inevitable, 0:12:46.320 --> 0:12:48.360 and we bore the brunt of them after we made 0:12:48.360 --> 0:12:50.320 the decision, and maybe for some of us we had 0:12:50.320 --> 0:12:52.400 to put that on a credit card or yeah, like 0:12:52.440 --> 0:12:55.720 you with gasoline, you're like, oh, man, this car takes gas. 0:12:55.840 --> 0:12:58.440 Totally forgot except that I drive an electric car, So 0:12:58.520 --> 0:13:01.679 jokes on you. But yeah, there's all we've all been 0:13:01.720 --> 0:13:03.839 in that situation. And also in regards to the soft 0:13:03.960 --> 0:13:07.480 or lifestyle secondary costs, someone who is considering, let's say 0:13:07.480 --> 0:13:10.280 a bathroom renovation, well, I want to reach out the 0:13:10.320 --> 0:13:12.600 floors and put in a new toilet. Well, then you 0:13:12.679 --> 0:13:15.240 want a new tub, because a tub looks old and 0:13:15.320 --> 0:13:18.120 nasty exactly, and then maybe a new vanity. And you 0:13:18.160 --> 0:13:20.200 know what, if the bathroom is gonna look this good, 0:13:20.440 --> 0:13:21.839 I think I needed to redo the kitchen at the 0:13:21.880 --> 0:13:25.160 same time. And so we've all experienced this in our 0:13:25.160 --> 0:13:27.920 lives to one extent or another, and it's just good 0:13:27.960 --> 0:13:30.040 to be aware of as we go into making purchases. 0:13:30.080 --> 0:13:32.240 It can help us to know when to say no 0:13:32.400 --> 0:13:35.600 to things and when things are out of our budget, 0:13:35.600 --> 0:13:38.000 out of our range. It gives us a better perspective 0:13:38.000 --> 0:13:40.160 and allows us to go into purchases with a little 0:13:40.160 --> 0:13:43.040 more like wisdom and knowledge behind us. And so we've 0:13:43.040 --> 0:13:46.480 been talking a lot lately about spending and consumption. And 0:13:46.800 --> 0:13:49.880 you know, a huge reason that Americans today are having 0:13:49.920 --> 0:13:53.360 issues with saving enough a retirement comes down to their spending. 0:13:53.360 --> 0:13:55.240 It's not that they're not making enough. More of it 0:13:55.280 --> 0:13:57.360 has to do with the fact that folks aren't investing 0:13:57.600 --> 0:14:00.400 and using that money that they've earned wisely, and that 0:14:00.440 --> 0:14:03.199 has led to a lot of people feeling insecure about 0:14:03.200 --> 0:14:05.280 their futures. And so right after the break, we're gonna 0:14:05.320 --> 0:14:08.680 talk about why these secondary costs are so important, and 0:14:08.679 --> 0:14:11.600 then we'll also give some examples, some specific real life 0:14:11.600 --> 0:14:14.400 examples that will help you to see the difference between 0:14:14.440 --> 0:14:17.560 these two types of secondary spendings and just how being 0:14:17.600 --> 0:14:20.040 aware of these things can help you rain in your spending. 0:14:28.880 --> 0:14:30.600 All right, Matt, back from the break, and let's talk 0:14:30.600 --> 0:14:34.400 about why these secondary costs are so important. And it's 0:14:34.400 --> 0:14:38.080 because there's this major problem in America. Four out of 0:14:38.120 --> 0:14:42.160 five Americans are worried that they don't have enough in retirement. 0:14:42.280 --> 0:14:45.520 Right they are spending too much. And I gotta tell you, 0:14:45.960 --> 0:14:49.040 as we've been combing through this topic doing research for 0:14:49.040 --> 0:14:51.560 the show. Matt, I gotta believe that much of this 0:14:52.240 --> 0:14:56.120 is because of poorly thought out purchases, right, And those 0:14:56.160 --> 0:15:00.480 poorly thought out purchases lead to these outrageous secondary costs 0:15:00.840 --> 0:15:04.240 hard ones or lifestyle ones, either way, but they lead 0:15:04.240 --> 0:15:07.520 to those secondary costs for people that weren't factored in, 0:15:07.760 --> 0:15:10.000 and it leads to living a lifestyle where you're living 0:15:10.000 --> 0:15:12.960 month to month, paycheck to paycheck, and you can't get ahead. 0:15:13.000 --> 0:15:15.440 So I feel like that's the problem that we're trying 0:15:15.440 --> 0:15:18.200 to address in this episode. That's a very good sort 0:15:18.240 --> 0:15:20.200 of big picture as to why this is a problem, 0:15:20.400 --> 0:15:23.000 and then diving down to more the specifics. Right, deciding 0:15:23.160 --> 0:15:26.080 whether something is a solid purchase, right, can really only 0:15:26.120 --> 0:15:29.720 be made when you consider these costs before taking that plunge. 0:15:30.080 --> 0:15:32.240 And so if you jump into a purchase before crunching 0:15:32.240 --> 0:15:36.680 the numbers and realistically considering the complete financial picture, you 0:15:36.680 --> 0:15:39.560 could easily sink your budget. You need to do your 0:15:39.560 --> 0:15:41.880 homework like this is just part of the due diligence 0:15:42.080 --> 0:15:44.680 period of making a purchase. You don't want to necessarily 0:15:44.760 --> 0:15:48.840 have what's it called an analysis paralysis where you don't 0:15:48.840 --> 0:15:50.720 make a decision because you're so stuck on the numbers 0:15:50.720 --> 0:15:53.320 and you're so stuck on optimizing it and making it 0:15:53.400 --> 0:15:55.640 perfect that it keeps you from any action at all. 0:15:56.080 --> 0:15:57.920 But you have to do your homework. You have to 0:15:57.960 --> 0:16:00.240 take the steps necessary in order to make sure that 0:16:00.280 --> 0:16:02.960 you're setting yourself up for the future. Yeah, Matt, I 0:16:03.000 --> 0:16:04.880 love what you just said. They're due diligence. I feel 0:16:04.920 --> 0:16:07.080 like that is a great kind of way to think 0:16:07.120 --> 0:16:10.360 about the secondary costs of a major purchase, or even 0:16:10.400 --> 0:16:12.520 a minor purchase that you're just about to make. Due 0:16:12.560 --> 0:16:14.760 diligence when it comes to buying a house, is that 0:16:14.920 --> 0:16:17.360 seven or ten day or whatever you negotiate. Really, it's 0:16:17.400 --> 0:16:20.000 that period that you have after you're under contract on 0:16:20.000 --> 0:16:22.520 a house but you're not obligated to buy it. You 0:16:22.560 --> 0:16:24.920 know you want to, but you don't have to do exactly, 0:16:25.000 --> 0:16:27.880 And so that period of time gives you the ability 0:16:27.960 --> 0:16:32.000 to walk through their decide whether you're into it, get 0:16:32.080 --> 0:16:36.040 an inspection, all that stuff. That due diligence period is crucial, 0:16:36.280 --> 0:16:39.040 and so many people back out of that purchase during 0:16:39.080 --> 0:16:42.120 due diligence, right, And so I think due diligence is 0:16:42.120 --> 0:16:44.400 is probably the right phrase to use when we're talking 0:16:44.400 --> 0:16:48.320 about secondary costs of purchases we make doing that due diligence, 0:16:48.480 --> 0:16:50.880 taking that time period to factor in and to look 0:16:50.920 --> 0:16:54.760 at those secondary costs, and then whether your purchase is 0:16:54.840 --> 0:16:56.760 a wise one or not, whether you can afford it 0:16:56.880 --> 0:16:58.800 or you can't, or whether it's worth it to you 0:16:59.160 --> 0:17:01.600 or it isn't. Like that due diligence period is going 0:17:01.640 --> 0:17:05.120 to tell you, you you know, whether that purchase with its 0:17:05.119 --> 0:17:09.240 associated secondary costs, is right for you. Let's give examples 0:17:09.280 --> 0:17:12.800 of some of the hard secondary costs when it comes 0:17:12.800 --> 0:17:14.720 to buying a house that will kind of help put 0:17:14.720 --> 0:17:18.040 it into perspective. It's not just the hundred fifty or 0:17:18.080 --> 0:17:23.119 two price tag that's associated with the home for most people. 0:17:23.480 --> 0:17:25.880 When you buy a home, there are many other hard 0:17:25.920 --> 0:17:29.960 costs associated with owning that right. So in particular, you 0:17:30.000 --> 0:17:33.520 need to figure in closing costs, getting that home inspection, 0:17:33.560 --> 0:17:36.960 which can be four or more potential repairs on the 0:17:36.960 --> 0:17:40.240 home that you'll need to make immediately and over time, insurance. 0:17:40.840 --> 0:17:43.200 The list just goes on and on and on of 0:17:43.480 --> 0:17:46.680 the hard costs that you're gonna pay when you buy 0:17:46.680 --> 0:17:50.320 a home. You're gonna have taxes annually, on that home. 0:17:50.680 --> 0:17:53.320 The hard costs that are associated with the home purchase 0:17:53.960 --> 0:17:57.919 are real, they are lengthy, and they are necessary when 0:17:58.000 --> 0:18:00.760 you're considering whether you can afford that own purchase or not. 0:18:01.320 --> 0:18:04.320 And then in addition to this hard costs, man, there's 0:18:04.400 --> 0:18:07.360 the lifestyle or soft secondary costs. And these are things 0:18:07.440 --> 0:18:10.280 like furniture. Right. You get that big empty house and 0:18:10.280 --> 0:18:12.280 you've got all these extra rooms that you're so happy 0:18:12.320 --> 0:18:15.240 to have, and the first thing that most people do 0:18:15.400 --> 0:18:18.520 is they start buying furniture exactly. And then that's honestly 0:18:18.520 --> 0:18:20.720 been one of the biggest problems Matt is as home 0:18:20.760 --> 0:18:22.960 tizes have grown in America, they've pretty much doubled in 0:18:22.960 --> 0:18:26.000 the last thirty years. Certainly, the primary costs of more 0:18:26.040 --> 0:18:29.560 building material, of higher mortgage costs, right, that those factor in. 0:18:29.560 --> 0:18:32.560 But it's those secondary costs that really sink people so 0:18:32.640 --> 0:18:34.399 much of the time that they just didn't factor in. 0:18:34.560 --> 0:18:36.560 And a lot of it is these lifestyle secondary costs. 0:18:36.560 --> 0:18:39.240 It's the furniture to feel the ten rooms in your 0:18:39.240 --> 0:18:41.359 house versus the four rooms you would have had in 0:18:41.400 --> 0:18:44.160 something smaller. Yeah, man, And what's so crazy about something 0:18:44.200 --> 0:18:46.560 like furniture, right, is that this isn't a hard cost 0:18:46.640 --> 0:18:49.040 where it's it's one and done, like this is something 0:18:49.080 --> 0:18:51.159 that can change over time, and that can change with 0:18:51.200 --> 0:18:53.560 your taste. Who knows how much you could actually spend 0:18:53.600 --> 0:18:56.439 on furniture over the lifetime of a specific house because 0:18:56.640 --> 0:18:58.200 you could change your mind every I mean, you could 0:18:58.240 --> 0:19:01.880 change your mind every month. Right. That might be crazy, 0:19:01.920 --> 0:19:04.240