WEBVTT - Ask HTM - Investing in Startups, Refinancing Student Loans on a Fixed or Variable Rate, and Skyrocketing Home Insurance Rates #232 0:00:00.080 --> 0:00:02.920 Welcome to How the Money. I'm Joel and I and Matt, 0:00:03.080 --> 0:00:25.439 and today we are answering your listener questions. Yeah, Joel, 0:00:25.440 --> 0:00:27.080 that's one of those episodes where we get to hear 0:00:27.160 --> 0:00:30.120 directly from our listeners and we get to answer some 0:00:30.160 --> 0:00:32.160 of their questions. A few that we have this week. 0:00:32.200 --> 0:00:34.479 We're gonna take one about an app that allows you 0:00:34.520 --> 0:00:37.400 to invest in different startups. We're gonna answer a question 0:00:37.479 --> 0:00:40.800 regarding a fixed rate versus a variable rate when it 0:00:40.800 --> 0:00:43.440 comes to student loans. And then we're also going to 0:00:43.520 --> 0:00:46.160 take a question as to why some homeowners are seeing 0:00:46.159 --> 0:00:49.680 their insurance rates skyrocket as well as what to do 0:00:49.840 --> 0:00:52.360 about those increased rates as well. And plus then we've 0:00:52.400 --> 0:00:54.480 got two other questions as well. Man, Yeah, if my 0:00:54.520 --> 0:00:57.800 homeowners insurance rates go up, I'm walking, I'm leaving. I 0:00:57.880 --> 0:01:00.240 want to burn that house down. I'll shy so you 0:01:00.280 --> 0:01:02.560 can do that. That's home's fraud. Don't do that. That's 0:01:02.560 --> 0:01:04.360 in church froud. Don't do that. Yeah. Yeah, not a 0:01:04.360 --> 0:01:06.840 good idea, but yeah, some good questions lined up, some 0:01:06.920 --> 0:01:09.399 kind of unique questions I think to today on the show, Matt. 0:01:09.600 --> 0:01:12.000 But before we get to those, I want to mention 0:01:12.040 --> 0:01:15.399 really quickly that Acorns, which is an app that we've 0:01:15.400 --> 0:01:17.679 talked about on the show before which kind of helps 0:01:17.760 --> 0:01:20.399 people save more money. It kind of rounds up you're 0:01:20.440 --> 0:01:23.880 spending and then siphons off and almost indecipherable amount of 0:01:23.880 --> 0:01:26.679 your money into a savings account, so so that you 0:01:26.720 --> 0:01:30.399 can develop savings much quicker than you otherwise normally would. Well, 0:01:30.440 --> 0:01:33.640 they've just launched something called Acorns Early, and basically what 0:01:33.640 --> 0:01:35.640 they're trying to do with this is help you save 0:01:35.680 --> 0:01:38.399 and invest for your children in a similar fashion. And 0:01:38.400 --> 0:01:40.240 I just think that's so cool math that Acorns is 0:01:40.319 --> 0:01:42.480 launching this, And it does cost five bucks a month 0:01:42.480 --> 0:01:44.360 in order to have one of these accounts to start 0:01:44.360 --> 0:01:46.920 investing for your kid early. But the cool thing is 0:01:46.920 --> 0:01:50.280 if you had a baby in you qualify for a 0:01:50.440 --> 0:01:54.000 free Acorns family plan until your child turns eighteen. So 0:01:54.360 --> 0:01:55.920 I don't know the math on that right off the 0:01:55.920 --> 0:01:58.040 top of my head, but five dollars a month times 0:01:58.200 --> 0:02:00.760 twelve months times eighteen years, that's a lot of free 0:02:00.760 --> 0:02:03.520 Acorns Early account time, right. I thought you're gonna say 0:02:03.520 --> 0:02:05.280 it didn't know the math of how many free years 0:02:05.280 --> 0:02:07.279 that meant you had, And I was gonna say eighteen 0:02:07.560 --> 0:02:10.160 eighteen free years, but how many months overall? That's math 0:02:10.200 --> 0:02:12.520 that's beyond my pay grade, right, Yeah, but it's worth 0:02:12.600 --> 0:02:16.200 pointing out to that there are other brokerages and banks 0:02:16.240 --> 0:02:19.480 out there that offer accounts for kids for free. However, 0:02:19.560 --> 0:02:22.200 what's kind of special about this Acorn's Early account is 0:02:22.200 --> 0:02:24.440 they seem to be focusing on some of that personal 0:02:24.440 --> 0:02:27.920 finance education, right. I saw that if when you sign up, 0:02:28.000 --> 0:02:30.560 you get like a couple of free books, uh to 0:02:30.600 --> 0:02:33.080 teach kids, you know, different lessons. It's sort of like, uh, 0:02:33.280 --> 0:02:35.799 the Little Red Hen but with money instead, you know, 0:02:35.840 --> 0:02:38.520 a Little Red Hen, classic great book, but just different 0:02:38.520 --> 0:02:41.320 ways to teach kids and connect with them about how 0:02:41.400 --> 0:02:43.880 saving works and how you know, interest works, how compounding 0:02:43.880 --> 0:02:46.200 interest works. It really does seem like that they're committed 0:02:46.480 --> 0:02:49.320 to partnering with parents when it comes to raising your 0:02:49.400 --> 0:02:52.600 kids to be financially savvy. Yeah, and I know that's 0:02:52.639 --> 0:02:55.079 a question that comes up quite a bit for from 0:02:55.080 --> 0:02:58.440 our listeners, from most Americans. How do I teach my 0:02:58.520 --> 0:03:02.040 kids to to handle mone a well? And having something 0:03:02.120 --> 0:03:05.720 like acorns Early that service where not only are you 0:03:06.000 --> 0:03:08.600 investing for their future, but you're also at the same 0:03:08.600 --> 0:03:11.920 time helping them with financial literacy tools that are going 0:03:11.960 --> 0:03:14.160 to benefit them in the long run. That's kind of 0:03:14.160 --> 0:03:16.040 a nice little pairing, right, even though it does cost 0:03:16.080 --> 0:03:18.160 that five bucks a month. I agree. I think having 0:03:18.520 --> 0:03:21.680 both of those things simultaneously, actually doing the savings and 0:03:21.680 --> 0:03:25.200 then having Acorns as a partner essentially helping you teach 0:03:25.200 --> 0:03:27.560 your kids about money and how to handle it well 0:03:27.919 --> 0:03:30.120 is is pretty great. Yeah, And the fact that it's 0:03:30.120 --> 0:03:32.320 free definitely worth signing up, even if you're not totally 0:03:32.320 --> 0:03:34.920 sure what you want to do with that account yet, right, 0:03:34.960 --> 0:03:36.960 you know, you may not even have a need for 0:03:37.360 --> 0:03:39.800 an account for your kids, but because it is free, 0:03:39.880 --> 0:03:41.400 it doesn't hurt to go ahead and sign up, and 0:03:41.400 --> 0:03:43.320 you can even sit on that account until you find 0:03:43.360 --> 0:03:46.240 yourself in a position where it is necessary. Sort of 0:03:46.280 --> 0:03:48.240 like the fact that I signed us up for TikTok 0:03:48.400 --> 0:03:52.200 Joel just in case. Just in case, I mean, I 0:03:52.200 --> 0:03:53.920 feel that way about a lot of the news different 0:03:53.920 --> 0:03:56.560 social media accounts. Don't want somebody grabbing that how the 0:03:56.600 --> 0:03:59.000 Money handle on TikTok. Well, I waited too late. Somebody 0:03:59.000 --> 0:04:01.880 already did, Like kid has how the Money, so I 0:04:01.920 --> 0:04:04.960 had to get how the Money pod and so I'm 0:04:05.000 --> 0:04:06.960 not totally sure if we're ever gonna use that accounts 0:04:06.960 --> 0:04:08.440 and you know what that would look like, but I 0:04:08.480 --> 0:04:10.360 wanted to go ahead and make that happen just in 0:04:10.440 --> 0:04:12.360 case we do want to use that in the future. 0:04:12.480 --> 0:04:14.280 Never hurts to go ahead and sign up for another account. 0:04:14.480 --> 0:04:17.120 Go ahead and reserve your spot now. Yeah, and if 0:04:17.160 --> 0:04:20.000 that TikTok squatter wants to hand us back regular how 0:04:20.000 --> 0:04:21.800 the Money will take it, well, we can reach out 0:04:21.800 --> 0:04:25.120 to them, even though we'll probably never use it. All right, Matt, Well, 0:04:25.440 --> 0:04:27.680 let's mention the beer that we're having on the show today. 0:04:27.880 --> 0:04:31.200 We're drinking a beer called Barry Salty by Talisman Brewing Company. 0:04:31.200 --> 0:04:33.400 Big thanks to listener Andy for donating this one to 0:04:33.440 --> 0:04:36.360 the show. We'll give our thoughts on this Raspberry Goza 0:04:36.440 --> 0:04:38.520 at the end of this episode. That's right, Joel, And 0:04:38.520 --> 0:04:41.080 and again this is a listener questions episode, and so 0:04:41.200 --> 0:04:42.920 we want to make sure our listeners know that they 0:04:42.920 --> 0:04:45.800 can submit their own questions on our website at how 0:04:45.800 --> 0:04:48.640 the Money dot com forward slash ask. There you can 0:04:48.680 --> 0:04:51.200 find the simple instructions on how you can send us 0:04:51.240 --> 0:04:53.839 a voice memo. And we appreciate all of our listeners 0:04:53.839 --> 0:04:55.920 who send in their questions and if you have a 0:04:55.960 --> 0:04:57.840 good one for us, we would love to hear from you. 0:04:57.920 --> 0:04:59.640 And so Joel, let's go ahead and take our first 0:04:59.760 --> 0:05:02.640 question from this episode. Hey, Matt and Joel, this is 0:05:02.720 --> 0:05:06.560 Zach from Atlanta, fellow a t L resident, and fellow 0:05:06.560 --> 0:05:10.000 fan of Monday Night Brewing. Hey, so, my question is 0:05:10.160 --> 0:05:16.320 regarding fixed rate versus variable rate loan refinancing, specifically for 0:05:16.560 --> 0:05:20.640 my student loan. So I know the best advice usually 0:05:21.240 --> 0:05:25.480 is to go with a fixed rate refinance because interest 0:05:25.560 --> 0:05:30.560 rates have been historically very low lately and it's less 0:05:30.680 --> 0:05:35.240 risk to have a fixed rate. However, since the Chairman 0:05:35.240 --> 0:05:39.719 of the Fed recently committed to keeping interest rates very 0:05:39.760 --> 0:05:42.800 low for the next two years in light of the 0:05:42.800 --> 0:05:46.200 pandemic and whatnot, I'm wondering if it would be more 0:05:46.240 --> 0:05:51.120 prudent to actually refinance with a variable rate since I 0:05:51.160 --> 0:05:54.000 could count on that race staying pretty low the next 0:05:54.040 --> 0:05:58.160 couple of years, especially if I tried to pay off 0:05:58.160 --> 0:06:00.640 this thing in the next few years. So yeah, I'm 0:06:00.640 --> 0:06:03.080 just wondering if you guys thoughts have changed on that 0:06:03.160 --> 0:06:06.120 at all. So thank you and thank you guys for 0:06:06.160 --> 0:06:09.279 the show. I really appreciate all the advice you guys 0:06:09.279 --> 0:06:12.320 have motivated me to recently buy a house here in 0:06:12.320 --> 0:06:16.720 Atlanta and pursue house hacking. So yeah, really thankful. Keep 0:06:16.720 --> 0:06:19.760 it up, guys, Zach your house hacking, Oh my gosh, 0:06:19.800 --> 0:06:22.800 I love it. I love hearing that. It's like, seriously 0:06:22.839 --> 0:06:25.680 one of the number one ways to jump start your 0:06:25.720 --> 0:06:29.160 wealth building by massively lowering the amount of money outgoing 0:06:29.200 --> 0:06:31.640 every month towards like what you pay to live somewhere 0:06:31.880 --> 0:06:34.040 and owning that home and running out parts of it 0:06:34.080 --> 0:06:36.719 two people for years to come. And that's gonna be 0:06:36.760 --> 0:06:39.520 a big head start to Zack and building his finances 0:06:39.640 --> 0:06:42.320 in a positive direction. Not only is he possibly lowering 0:06:42.320 --> 0:06:44.800 his expenses significantly, but he might even be making some 0:06:44.920 --> 0:06:46.880 every single month on top of, you know, ways paying 0:06:46.880 --> 0:06:49.520 towards his mortgage. So that's when house hacking it reaches 0:06:49.560 --> 0:06:51.920 a just like the perfect level possible if you're actually 0:06:51.920 --> 0:06:54.960 making money to live in a place like house hacking nirvana. 0:06:55.200 --> 0:06:57.359 And then Zach also a great job on supporting an 0:06:57.400 --> 0:07:00.880 amazing local craft brewery. Monday Night Man, they rule the 0:07:00.960 --> 0:07:03.000 day that actually that we're recording this uh, they are 0:07:03.000 --> 0:07:06.120 releasing another one of their special hop hut I p A. S. 0:07:06.440 --> 0:07:08.160 And Joel, you and I we went in on one. Uh, 0:07:08.279 --> 0:07:09.479 one of us needs to go pick that up in 0:07:09.480 --> 0:07:10.880 the next few days. Yeah, we do. It's gonna be 0:07:10.920 --> 0:07:12.280 a good one that I'm excited and the beers have 0:07:12.360 --> 0:07:15.200 gotten so good. Yeah, we love Monday Night. But Zack 0:07:15.240 --> 0:07:17.760 onto your question about fixed rate or floating rate student 0:07:17.840 --> 0:07:22.600 loan refinancing, Well, you make an astute observation. First, Matt 0:07:22.600 --> 0:07:25.600 and I were typically fans of fixed rates for mortgages 0:07:25.640 --> 0:07:27.800 and for student loans. We have been over the past 0:07:27.840 --> 0:07:31.120 few years, in particular because we've basically been at historically 0:07:31.120 --> 0:07:34.000 low rates and we're still at historically low rates. But 0:07:34.080 --> 0:07:36.640 for some people it actually does make more sense right 0:07:36.680 --> 0:07:39.840 now to have a floating rate instead of a fixed rate. 0:07:39.880 --> 0:07:42.200 And so yeah, let's talk about why that's the case 0:07:42.480 --> 0:07:45.840 and who that applies to. Refinancing into a variable rate 0:07:46.040 --> 0:07:49.440 makes more sense for your situation, in particular because of 0:07:49.480 --> 0:07:51.840 the Fed's decision to keep rates low for the next 0:07:51.840 --> 0:07:54.480 couple of years, which is kind of uncommon to have 0:07:54.560 --> 0:07:57.160 that signal, for them to announce that and say that 0:07:57.200 --> 0:07:58.880 this is what we're gonna do, because you know what 0:07:58.920 --> 0:08:01.240 if they go back on what they said, they're going 0:08:01.280 --> 0:08:04.200 to get a lot of crap. Yeah, exactly, exactly, So 0:08:04.520 --> 0:08:06.560 it just really helps people out when it comes to 0:08:06.600 --> 0:08:09.680 planning and how they're going to organize their debt, which 0:08:09.720 --> 0:08:11.640 is Zac's question, right, And it's just such a sweet 0:08:11.640 --> 0:08:13.440 advantage to be able to know and count on the 0:08:13.480 --> 0:08:15.640 fact that that floating rate is going to stay low 0:08:16.040 --> 0:08:18.720 for at least a few years. Yeah, exact. This could 0:08:18.800 --> 0:08:21.520 be an especially great decision for you because you mentioned 0:08:21.560 --> 0:08:23.480 that you want to pay this loan off in the 0:08:23.520 --> 0:08:26.560 next few years. Right. We wouldn't normally recommend a floating 0:08:26.600 --> 0:08:28.600 rate for someone who you know, might take you know, 0:08:28.680 --> 0:08:31.160 eight or twelve years to pay off their student loan, Butza, 0:08:31.280 --> 0:08:33.160 it sounds like you can really get after it in 0:08:33.440 --> 0:08:36.520 short order. So a floating rate a variable rates for you, 0:08:36.679 --> 0:08:39.199 it's gonna be a solid move, and it will mean 0:08:39.200 --> 0:08:41.360 that you'll be able to pay less in interest overall, 0:08:41.440 --> 0:08:43.200 which is a huge win. Yes, so much if it 0:08:43.200 --> 0:08:45.800 comes down to time frame as to whether you're choosing 0:08:45.840 --> 0:08:48.960 something that's variable or or a rate that's floating. When 0:08:48.960 --> 0:08:51.120 it comes to the mortgage you're choosing, or when you're 0:08:51.120 --> 0:08:53.880 considering a home equity line of credit, versus a home 0:08:53.880 --> 0:08:56.400 equity loan in a short time frame with kind of 0:08:56.440 --> 0:08:59.040 the FED telegraphing what they're gonna do, means that a 0:08:59.080 --> 0:09:01.360 floating rate is a better idea for a lot of 0:09:01.360 --> 0:09:03.920 people right now. And Zach also too, it's it's really 0:09:03.960 --> 0:09:06.760 important to mention and for anybody else with the student loan, 0:09:06.960 --> 0:09:10.800 that federal student loan payments are essentially on hiatus until October, 0:09:11.000 --> 0:09:13.600 and so if you are refinancing a federal student loan, 0:09:13.840 --> 0:09:15.840 you're going to lose that benefit and you're going to 0:09:15.880 --> 0:09:17.920 need to start paying on it pretty quickly. But it 0:09:17.960 --> 0:09:20.120 sounds like that's not a deal breaker for you because 0:09:20.120 --> 0:09:21.960 you are looking to pay it off as quickly as possible. 0:09:22.120 --> 0:09:25.720 But for everybody listening before you decide to do something 0:09:25.720 --> 0:09:29.280 like this in refinance a federal student loan, read our 0:09:29.360 --> 0:09:31.360 article on how to money dot com about student loan 0:09:31.440 --> 0:09:33.600 refinancing before you do it. There are a lot of 0:09:33.640 --> 0:09:35.080 ins and outs and a lot of particulars that you 0:09:35.120 --> 0:09:37.320 need to take into consideration, and there are certainly some 0:09:37.360 --> 0:09:40.679 cases where it makes more sense to stick with having 0:09:40.760 --> 0:09:44.000 your federal loan instead of refinancing because of the rights 0:09:44.240 --> 0:09:46.600 that you have as a federal student loan holder. But 0:09:46.679 --> 0:09:48.880 still it can make sense to refinance with a private lender, 0:09:49.000 --> 0:09:50.520 in particular if it means that you can pay off 0:09:50.520 --> 0:09:53.080 your loan more quickly while paying less interest. And in 0:09:53.080 --> 0:09:55.120 that article, Matt, we also talked about a couple of 0:09:55.120 --> 0:09:58.400 our favorite companies for people to consider doing a student 0:09:58.400 --> 0:10:01.040 loan refinance with. So will make sure to put that 0:10:01.160 --> 0:10:03.880 article in our show notes for this episode, Yes, we will, man, 0:10:03.880 --> 0:10:05.839 all right. Next up, we're gonna take one on four 0:10:05.960 --> 0:10:08.840 one K distributions as well as increasing insurance rates. But 0:10:08.920 --> 0:10:20.839 first let's take a quick break. All right, we're back 0:10:20.840 --> 0:10:23.240 from the break in. Our next question is about taking 0:10:23.360 --> 0:10:26.000 a distribution from your retirement account, and this one comes 0:10:26.040 --> 0:10:29.960 from the Windy City. Hi guys, this is Elizabeth in Chicago. 0:10:30.440 --> 0:10:33.199 I hope you and your families are well. I wanted 0:10:33.240 --> 0:10:35.760 to ask what you thought about taking a four one 0:10:35.840 --> 0:10:39.520 K distribution under the Cares Act. It looks like my 0:10:39.640 --> 0:10:43.280 company is offering this if you meet certain criteria. I 0:10:43.400 --> 0:10:47.360 understand there's no early withdrawal penalty, which is provided under 0:10:47.400 --> 0:10:50.280 the Act. However, it's not clear if you have to 0:10:50.320 --> 0:10:53.599 pay back the distribution or not. An example would be 0:10:53.760 --> 0:10:56.640 to take a small amount of my balance, say ten 0:10:57.080 --> 0:11:01.040 dollars to do some home improvement surround my house that 0:11:01.120 --> 0:11:04.480 are not critical but do increase the value of my 0:11:04.600 --> 0:11:08.439 home in the long term. Thanks Elizabeth, Thanks so much 0:11:08.440 --> 0:11:10.080 for that question, and we hope that you are doing 0:11:10.120 --> 0:11:12.920 well too. And as much as I like renovating homes. Uh, 0:11:13.240 --> 0:11:14.960 the ore quick answer is going to be that we're 0:11:15.000 --> 0:11:17.320 not a fan of you taking money out of your 0:11:17.320 --> 0:11:20.360 froe owen k, even though it's become easier to do so. 0:11:20.760 --> 0:11:23.200 The Cares Act. It did away with a penalty for 0:11:23.280 --> 0:11:26.400 taking money out of your froe own k early, specifically 0:11:26.600 --> 0:11:28.520 as a way to help people who do need to 0:11:28.559 --> 0:11:31.720 access that money that they otherwise wouldn't be able to touch. 0:11:32.200 --> 0:11:33.920 And you know, you can take up two hundred thousand 0:11:33.920 --> 0:11:36.920 dollars out while avoiding that ten percent penalty that you 0:11:36.920 --> 0:11:39.760 would normally incur, and you can pay the taxes over 0:11:39.840 --> 0:11:42.160 a three year period as well. And so you know, 0:11:42.280 --> 0:11:44.120 I say all these things, and you might be thinking 0:11:44.120 --> 0:11:46.920 to yourself, like, this sounds pretty great, right, Yeah, in reality, 0:11:47.040 --> 0:11:49.080 is not something that we would recommend. Yeah, And that's 0:11:49.200 --> 0:11:52.720 ultimately because your money is best left in your account 0:11:52.760 --> 0:11:56.160 to grow for years to come, and in particular, home 0:11:56.200 --> 0:11:59.520 improvements is not a good reason to tap your retirement 0:11:59.520 --> 0:12:02.880 accounts early. If you had lost your job and this 0:12:02.920 --> 0:12:05.360 money would would be needed to put food on the table, 0:12:05.400 --> 0:12:07.599 I think you know we'd be having a different conversation. 0:12:07.880 --> 0:12:10.160 But to do something like like home improvements, it doesn't 0:12:10.200 --> 0:12:12.720 make sense to tap your retirement account, even just to 0:12:12.760 --> 0:12:15.280 take ten tho dollars out, despite the fact that it's 0:12:15.320 --> 0:12:18.640 become easier and less financially burdensome to tap that four 0:12:18.640 --> 0:12:20.600 O one K right now. Right if you really do 0:12:20.679 --> 0:12:22.800 want to do those home improvements, Matt and I would 0:12:22.800 --> 0:12:25.199 suggest a couple of other ways to tackle it. One 0:12:25.600 --> 0:12:27.360 is to make a goal to save up ten thousand 0:12:27.400 --> 0:12:30.440 dollars and pay for those renovations in cash. You could 0:12:30.440 --> 0:12:32.719 even right now consider taking out a home equity line 0:12:32.760 --> 0:12:36.680 of credit and pay for the repairs that way, and 0:12:36.760 --> 0:12:39.520 bonus rates are incredibly low on those right now. But 0:12:39.520 --> 0:12:41.600 we're just not fans of taking money out of your 0:12:41.640 --> 0:12:44.120 retirement account in order to get work done on your home. 0:12:44.440 --> 0:12:46.840 I know that the Cares Act and the ability to 0:12:46.920 --> 0:12:49.000 withdraw funds from your four O one K have caused 0:12:49.000 --> 0:12:51.280 a lot of people to tap their retirement accounts, and 0:12:51.320 --> 0:12:53.800 lots of people just took that as a signal that 0:12:53.880 --> 0:12:55.800 now was a good time to take money out of 0:12:55.840 --> 0:12:58.760 retirement in particular too to avoid those fees and pay 0:12:58.800 --> 0:13:01.400 the taxes over a more time year period. But there 0:13:01.440 --> 0:13:03.400 are very few people who are going to be better 0:13:03.480 --> 0:13:06.320 financially served to take money out of their retirement accounts 0:13:06.400 --> 0:13:08.400 instead of just continuing to let it grow. Yeah, and 0:13:08.440 --> 0:13:11.120 one last thing, Elizabeth, Uh, if you make renovations and 0:13:11.160 --> 0:13:13.240 make improvements to your home, make sure that you're doing 0:13:13.280 --> 0:13:16.559 them for yourself, right. Don't necessarily go into that thinking 0:13:16.600 --> 0:13:18.080 that you're gonna be able to get that money out 0:13:18.559 --> 0:13:21.040 when it does come time to sell at home. Oftentimes, 0:13:21.040 --> 0:13:22.960 the dollar amount that we put into our homes to 0:13:23.080 --> 0:13:25.959 improve it, that doesn't necessarily translate dollar for dollar when 0:13:26.000 --> 0:13:27.959 it comes time to sell. So make sure that those 0:13:28.000 --> 0:13:30.920 improvements are for you, not for the next owner of 0:13:30.960 --> 0:13:32.920 your house. All right, Joe. Our next question is from 0:13:33.160 --> 0:13:36.839 a listener who is seeing his homeowner insurance premiums skyrockets, 0:13:36.880 --> 0:13:40.400 so let's hear from him. Hey, guys, my name is Pavel. 0:13:40.679 --> 0:13:43.600 I'm from Central Florida, work here as a police officer, 0:13:43.640 --> 0:13:47.000 and I have a question about a home insurance. I 0:13:47.080 --> 0:13:49.400 have a whole house mortgage. We've been paying it for 0:13:49.440 --> 0:13:52.960 about six years, have nine years left. And I know 0:13:53.080 --> 0:13:56.000 just when I started with a house mortgage, my home 0:13:56.040 --> 0:13:58.439 insurance used to be about thousand dollars a years, and 0:13:58.520 --> 0:14:02.559 I went to eleven hundred. This year, my house insurance 0:14:02.760 --> 0:14:05.320 is eighteen hundred. I have no idea what happened. I 0:14:05.320 --> 0:14:08.680 didn't file any claims, maybe because I live in Florida 0:14:08.800 --> 0:14:11.920 and we have hurricanes once in a while, but it 0:14:12.040 --> 0:14:14.680 used to be thousand dollars a year and it's eighteen hundreds. 0:14:14.800 --> 0:14:19.080 I message my insurance company or group that manages insurance companies, 0:14:19.160 --> 0:14:21.680 ask them to find me a better rate, and they 0:14:21.720 --> 0:14:24.720 told me they can't find anything cheaper. Do you think 0:14:24.760 --> 0:14:28.680 it's because Florida is a hurricane state or you think 0:14:28.800 --> 0:14:33.720 I can still find a cheaper, better insurance at another places. 0:14:34.160 --> 0:14:38.760 Please let me know. Thanks love your show by Pablo. 0:14:38.800 --> 0:14:41.000 Thanks so much for your question, man, and thanks for 0:14:41.040 --> 0:14:43.640 being a police officer. It's really hard work right now, 0:14:43.840 --> 0:14:45.360 and so yeah, we just want to wish you luck 0:14:45.720 --> 0:14:48.480 and please stay safe out there. Also, congrats, by the way, 0:14:48.480 --> 0:14:50.080 and getting a fifteen year moreach did you notice how 0:14:50.120 --> 0:14:51.360 he kind of snucked at it at the beginning of 0:14:51.360 --> 0:14:53.920 the question, Matt, he he has what nine years left, 0:14:54.160 --> 0:14:57.960 nine plus six fifteen years exactly, So that's huge. And 0:14:58.040 --> 0:15:00.080 Paul is going to have his home paid off a 0:15:00.200 --> 0:15:02.520 faster than most people are, that's for sure, and that's 0:15:02.520 --> 0:15:05.280 caused for celebrations. So yeah, before we get to your question, Pablo, 0:15:05.360 --> 0:15:07.760 just congrats on that man. That's a big time financial feat. 0:15:07.960 --> 0:15:09.640 And so Pavla, let's go ahead and first and address 0:15:09.680 --> 0:15:12.840 you know, why you are seeing your rates increase Florida. 0:15:12.920 --> 0:15:16.080 It's a tricky beast when it comes to home insurance rates. 0:15:16.080 --> 0:15:18.720 They've been rising across the board in your state for years. 0:15:19.320 --> 0:15:21.960 You mentioned hurricanes, like, yeah, they definitely have something to 0:15:22.000 --> 0:15:24.000 do with that, but there are other reasons for increased 0:15:24.000 --> 0:15:26.520 insurance costs as well. There has been a tidal wave 0:15:26.640 --> 0:15:31.000 of lawsuits against insurance companies as unscrupulous contractors have been 0:15:31.040 --> 0:15:34.360 combing neighborhoods, encouraging homeowners to fill out claims even you know, 0:15:34.360 --> 0:15:37.640 when they necessarily haven't been valid even and so because 0:15:37.640 --> 0:15:40.320 of this, some insurers are ceasing operations in the state 0:15:40.640 --> 0:15:43.080 um or at least in some specific counties. And then 0:15:43.080 --> 0:15:45.400 when that happens, there's a lack of competition, which only 0:15:45.480 --> 0:15:47.920 drives up rates. Yeah, so hurricanes part of the problem, 0:15:48.080 --> 0:15:50.880 not the whole problem. And if you are a homeowner 0:15:50.960 --> 0:15:54.360 in the state of Florida, you have definitely noticed that 0:15:54.480 --> 0:15:57.600 your homeowners insurance that the premiums have gone up quite 0:15:57.640 --> 0:15:59.800 a bit. So in addition to that lack of competition 0:15:59.800 --> 0:16:02.040 map that you just mentioned, for the insurers who are 0:16:02.080 --> 0:16:04.440 still insuring homes in Florida, it just costs more to 0:16:04.480 --> 0:16:07.440 do business too, and they're having the rais rates in 0:16:07.520 --> 0:16:10.640 order to remain profitable. The Tampa Bay Times actually reported 0:16:10.680 --> 0:16:13.440 that some insurance companies are requesting rate hikes ranging from 0:16:13.440 --> 0:16:17.680 twenty to sixty percent, and analysts say that basically everybody 0:16:17.680 --> 0:16:19.920 in the state it should expect at least a twenty 0:16:20.360 --> 0:16:23.880 increase in their homeowners insurance costs this year. So Pavlos, 0:16:23.960 --> 0:16:27.120 not just you, it's actually everybody. So talk to your neighbors. 0:16:27.200 --> 0:16:30.400 You'll find out that they're having the same experience. Yeah. Unfortunately, 0:16:30.440 --> 0:16:32.160 in Pavlo's case, it sounds like he's maybe more on 0:16:32.200 --> 0:16:35.000 the sixty percent end of things, which totally sucks. Yeah. Yeah, 0:16:35.040 --> 0:16:38.000 and I don't know if that's comforting or that's just 0:16:38.080 --> 0:16:40.440 disconcerting that basically everybody in the state of Florida is 0:16:40.480 --> 0:16:42.760 going through this this same thing. But knowing the facts 0:16:42.760 --> 0:16:45.080 and knowing that that it's happening to everybody at least 0:16:45.120 --> 0:16:47.480 in part at least helps you make sense of the situation. 0:16:47.800 --> 0:16:49.600 And then you know, you said you asked your insurance 0:16:49.600 --> 0:16:52.200 company for a better rate, Pavel, But the thing that 0:16:52.240 --> 0:16:54.360 you need to do is shop with multiple of insurers 0:16:54.400 --> 0:16:56.840 to to get a new quote. Rates can vary widely 0:16:56.920 --> 0:16:59.560 from insure to insure. So because of that, we like 0:16:59.640 --> 0:17:03.120 policy genius for shopping your homeowner's policy uh and also 0:17:03.200 --> 0:17:05.720 reaching out to a local independent agent who can quickly 0:17:05.720 --> 0:17:09.080 shop with multiple insurers as well. In addition to that too, 0:17:09.240 --> 0:17:10.800 you know, there might be some other creative ways that 0:17:10.840 --> 0:17:13.840 you can reduce your premiums. UH. You can raise your deductible, 0:17:13.920 --> 0:17:16.119 you can kind of bundle your policy with your auto 0:17:16.160 --> 0:17:18.840 insurance as well, and really just see what other discounts 0:17:18.840 --> 0:17:20.639 there are available to you. May maybe even being a 0:17:20.640 --> 0:17:23.000 police officer, there might be some discounts available to you 0:17:23.640 --> 0:17:26.120 just because of your work. Yeah, I know, my insurance 0:17:26.119 --> 0:17:28.439 agent has gotten annoyed at me. Through the year, sometimes 0:17:28.440 --> 0:17:31.359 asking about what discounts are available, basically like harangked her, 0:17:32.320 --> 0:17:34.000 what about where I went to college? What about this stuff? 0:17:34.000 --> 0:17:35.960 I mean, they are all sorts of discounts available, and 0:17:35.960 --> 0:17:38.080 so it's important to ask for them. And so much 0:17:38.080 --> 0:17:40.920 of the time the discounts go to the people who 0:17:41.400 --> 0:17:43.560 ask for it. And and this is definitely one of 0:17:43.600 --> 0:17:46.360 those cases where there are probably some discounts you're eligible 0:17:46.359 --> 0:17:49.200 before that you just haven't been notified of, and you know, 0:17:49.200 --> 0:17:51.200 all you gotta do is ask. But hopefully those tips 0:17:51.200 --> 0:17:53.840 for for shopping around, for asking about those discounts with 0:17:53.840 --> 0:17:56.840 your current insurer can help you lower those costs. I 0:17:56.840 --> 0:17:59.560 know that's that's a pretty steep increase and that's a 0:17:59.560 --> 0:18:02.320 tough burden to bear financially. So best of luck to 0:18:02.400 --> 0:18:04.399 you and to all your neighbors and everybody in Florida 0:18:04.400 --> 0:18:08.040 there who's fighting these ridiculously high home insurance rates. All right, 0:18:08.200 --> 0:18:10.359 we got a couple more questions that we need to 0:18:10.359 --> 0:18:13.280 get to, including one listener who IT wants to know 0:18:13.359 --> 0:18:16.480 about getting a credit line increase and opening a new 0:18:16.520 --> 0:18:18.680 credit card. And we'll take that question and one more 0:18:18.800 --> 0:18:30.000 right after this break. All right, Joe, we are back 0:18:30.000 --> 0:18:32.000 for the break. We're taking a listener questions, and before 0:18:32.000 --> 0:18:34.879 we get to that question about credit cards and credit scores, 0:18:35.200 --> 0:18:37.760 let's take one about an app that allows you to 0:18:37.880 --> 0:18:43.200 invest in new startups. Hey guys, this is Jeff from Augusta, Georgia. 0:18:43.720 --> 0:18:46.160 First off, want to thank you all for all y'all 0:18:46.200 --> 0:18:49.600 have done and the advice y'all give people, and I 0:18:49.680 --> 0:18:52.720 just really appreciate, uh, what you'll do for everybody out there. 0:18:53.080 --> 0:18:56.359 I have a question about investing through a website called 0:18:56.440 --> 0:19:02.600 republic Dot. CEO camera Carl them Um, and I wanted 0:19:02.680 --> 0:19:06.879 to invest in a company called Wherewell who I was 0:19:07.080 --> 0:19:12.680 contacted by through a nonprofit called co Op for Education, 0:19:12.920 --> 0:19:18.520