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Speaker 1: Welcome to How the Money.

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Speaker 2: I'm Joel, I am Matt.

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Speaker 1: Today we're gonna answer some of your listener questions.

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Speaker 2: You know, a buddy, Happy Monday to everyone out there,

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Speaker 2: and I'm excited to get to personal finance questions. For instance,

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Speaker 2: a listener he is interested in making a buck with eBay,

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Speaker 2: so we'll get to talk about that. I really love

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Speaker 2: eBay and I think it might show a little bit

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Speaker 2: more we get to that question. None of the listener

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Speaker 2: received an inheritance, and now he's dealing with taxes, but

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Speaker 2: maybe not in the way that you might be thinking

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Speaker 2: we're alluding to here. We're gonna talk. We're gonna get

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Speaker 2: to some questions about buying and selling homes on both

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Speaker 2: sides of the transaction.

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Speaker 1: We can link up both those listeners into one transaction.

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Speaker 2: Let me introduce you to my buddy, is it Mario.

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Speaker 2: We're gonna talk to Mario here about him in a

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Speaker 2: little bit.

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Speaker 1: But you'd love to play matchmaker in that way.

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Speaker 2: Speaking of homes and housing, Joel, guess what I actually

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Speaker 2: received a notice from my insurance company. It was a

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Speaker 2: notice of non renewal from the insurance company about one

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Speaker 2: of my investment pre.

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Speaker 1: You know what you should do, Matt, You should go

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Speaker 1: back and listen to this podcast called how to Money.

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Speaker 1: I interviewed someone called Lisa Gill from a consumer report.

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Speaker 2: We talked about that I'd take him to task. Yeah,

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Speaker 2: So what I'm gonna do is I want to share

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Speaker 2: what to do in a situation like this. First of all,

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Speaker 2: I'll explain what happened. Got a notice and they outlined

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Speaker 2: in that notice of non renewal. I just remember Lisa,

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Speaker 2: was she the one she had the trailer she invested

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Speaker 2: Oliver money in. Yes, which can I just say, if

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Speaker 2: you're looking to put down rock in a little garden,

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Speaker 2: peak gravel, it's it's more traditional, it's more authentic from

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Speaker 2: like an English garden standpoint, Like you know, it's always

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Speaker 2: peak gravel. But it's so unsatisfying to walk on because

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Speaker 2: it just gives It's like you're walking on marbles as

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Speaker 2: opposed to small or crushed slate, which is so satisfying

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Speaker 2: to walk on, which is what we have an hour garden.

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Speaker 2: We should have told Lisa that, well maybe we did

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Speaker 2: talk about that. Maybe I can't remember. Best aside from

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Speaker 2: the point, so the insurer said, hey, this is what's

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Speaker 2: you know, we're not going to renew in a couple

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Speaker 2: months because of X y Z unless you address those

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Speaker 2: issues and provide proof that you have fixed those thing

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Speaker 2: they want you to do well. Specifically, they highlighted the

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Speaker 2: fact that it has some trim, some like fashion board

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Speaker 2: up on this old bungalow that had holes in it.

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Speaker 2: And I actually knew exactly what they're talking about. There

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Speaker 2: were some holes in it. So the way it happened,

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Speaker 2: it's easy. Yeah, well, okay, let me, I'll tell you

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Speaker 2: the full story. That some carpenter bees got up in there,

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Speaker 2: and so you're like, carpenter bees, little hole, it's not

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Speaker 2: a big deal. Well, it wasn't the carpenter bees that

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Speaker 2: caused the issue. It was the fact that then a

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Speaker 2: woodpecker or I don't know, maybe a whole flock of

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Speaker 2: woodpecker showed up and went to town on this trim

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Speaker 2: or this fashion board on this house, and it's pretty unsightly.

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Speaker 2: We got destroyed, man, because those woodpeckers found out that

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Speaker 2: there are like what carpenter bee eggs or larvae or

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Speaker 2: something up in there. And it looks like somebody just

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Speaker 2: like blasted the front of the house with a shotgun.

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Speaker 1: Like tick Cheney style.

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Speaker 2: Oh my gosh, I say the younger listeners even get

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Speaker 2: that reference, Probably they probably won't anyway, So yes, I

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Speaker 2: addressed that, and another they also were pointing out. They're like, oh,

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Speaker 2: there's a lot of debris on the roof, which that's

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Speaker 2: not a big deal, you know, just get up there

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Speaker 2: with the blower. But on one hand, I'm annoyed. But

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Speaker 2: on the other hand, I think, you know what, I

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Speaker 2: need somebody like this, because these are the kind of

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Speaker 2: things that a runner isn't necessarily gonna gonna point out that,

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Speaker 2: Like they're going to complain about something inside the house

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Speaker 2: that's not working properly, doesn't work?

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Speaker 1: Fix it?

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Speaker 2: Yeah, it's going to get fixed. Garbage disposal, what's up

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Speaker 2: with that? We're like, oh, hit the button on the

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Speaker 2: bottom of the thing, the little thing reset. You've dealt

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Speaker 2: with that before, right, Yeah. But on top of me

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Speaker 2: taking care of the property like I should, this obviously

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Speaker 2: keeps me from having to pay the drastically more expensive

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Speaker 2: insurance that the mortgage company is likely going to implement,

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Speaker 2: and it's going to insurance force placed in force placed.

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Speaker 2: There you go. It's like it'sy Cobra Health insurance, it's

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Speaker 2: like so much more expensive.

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Speaker 1: Yeah, you can stop shopping for your own and the

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Speaker 1: insurance company or the mortgage company is happy to provide

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Speaker 1: it for you, but they'll just charge you a lot more, exactly.

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Speaker 2: And it just ensures I get to hang on to

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Speaker 2: this dwelling fire policy that I did shop for, or

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Speaker 2: that my insurance broker that she shopped around for it

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Speaker 2: to ensure that I got the best coverage possible at

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Speaker 2: the best rates, with all the all the different limits

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Speaker 2: that you want. So just a little tip for folks

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Speaker 2: out there who might be in a situation like this,

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Speaker 2: as there are more insurers out there who are I

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Speaker 2: don't I guess there's so much just driving by and

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Speaker 2: they're just looking for anything that might say that would

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Speaker 2: cause a homeowner to pay the pay a little more

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Speaker 2: attention to the property, right they're trying to ensure that

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Speaker 2: this isn't going to be something that they have to

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Speaker 2: eventually at some point.

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Speaker 1: Ok.

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Speaker 2: Yeah, yeah exactly.

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Speaker 1: And I think it makes sense pay up on the

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Speaker 1: claims for insurance companies to monitor the properties are insuring.

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Speaker 2: I'm say I hold it against them.

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Speaker 1: This is a problem, and there are times where it's

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Speaker 1: worked out to my benefit where I'm like, oh, you're right,

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Speaker 1: like that's something that needs to be fixed, so totally

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Speaker 1: I'm not mad about it. There's also times where they

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Speaker 1: get real weird about stuff. And you remember we had

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Speaker 1: a listener who I guess their house was painted two

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Speaker 1: different colors and the insurance company was not happy about that.

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Speaker 1: There's like this needs to be a single color, fix

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Speaker 1: it or else, and so sometimes they get a little

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Speaker 1: like over the top.

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Speaker 2: But I think for the most that feels like insurance

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Speaker 2: company overreached. Yeah, like, come on, like, we live in

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Speaker 2: America here, I should be able to paint my house

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Speaker 2: or whatever color I want to.

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Speaker 1: You can paint it American flag colors if you want, Matt.

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Speaker 2: You know what, I wonder if.

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Speaker 1: It sounds like something you would do.

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Speaker 2: No, we just have a very plain, vanilla like a house.

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Speaker 2: But this makes me think of our old neighborhood. There

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Speaker 2: was a house and they had added all like a

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Speaker 2: second story addition, and you might even remember the house

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Speaker 2: I'm talking about over in the village, and they I

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Speaker 2: don't know if they ever painted the addition, like the

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Speaker 2: upper upper section, because the lower section it was either

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Speaker 2: brick or something. But then the top was kind of

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Speaker 2: that standard hardy plank yellow, you know what I'm talking about,

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Speaker 2: Like that, just like that basic, unpainted hardy. Yeah, and

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Speaker 2: you might be able to get away with people thinking

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Speaker 2: that that's a color that you actually chose, right, I mean,

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Speaker 2: people literally paint their homes that color, and so I

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Speaker 2: wonder if they thought that that might be the case

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Speaker 2: that literally she didn't actually paint a part of the

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Speaker 2: house and it was sort of like left raw. Yeah.

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Speaker 2: Did we talk about that when we talked about that

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Speaker 2: that listener with the two.

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Speaker 1: Colors, that could be the two toned home, two tone home.

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Speaker 1: Oh well, all right, let's quickly mention the beer we're having, Matt.

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Speaker 1: This is a Rice Lagger from High Wire, which brewer

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Speaker 1: out of Ashville. We'll give our thoughts on this one

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Speaker 1: at the end of the episode.

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Speaker 2: Rice Lagger, Super Crisp, Super crisp.

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Speaker 1: By the way, I just want to let everyone know

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Speaker 1: we take your listener questions as we're going to do

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Speaker 1: on this episode. We would love if you have a

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Speaker 1: money question for you to holler at us. Send us

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Speaker 1: your quickly recorded in the voicemamile app app of your phone.

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Speaker 1: Your money question, no matter how weird or offbeat.

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Speaker 2: It is.

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Speaker 1: Actually the weirder, the better. We like the weird ones.

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Speaker 1: If you're like, should I max out my roth Ira,

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Speaker 1: that's a fine question, but like, let's get weird with

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Speaker 1: it people.

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Speaker 2: Well, I want to I want to settle more arguments,

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Speaker 2: Like I want to hear more from people who spousal dispute. Yeah,

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Speaker 2: I totally want to step into it.

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Speaker 1: Are you and your best friend are at odds over

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Speaker 1: particular money can undrum? Like, yeah, send it our way,

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Speaker 1: And I don't know, it's like that sounds like fun.

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Speaker 1: Maybe like some of the best ones we get, maybe

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Speaker 1: we'll send them a free pair of how the Money

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Speaker 1: socks or something. And if you send in an awesome question,

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Speaker 1: top notch, top tier and they're the most comfortable, that's just.

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Speaker 2: Like above, it's like cream of the crop kind of question. Yeah, boom,

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Speaker 2: straight to the straight to the front of the line.

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Speaker 2: That's right, That's right. Yeah, yeah, you will get straight

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Speaker 2: to the front line. All right.

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Speaker 1: But so, and if you want more directions about how

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Speaker 1: to send submit your question how to money dot com.

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Speaker 1: Slash ask is the u R l Okay, let's get

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Speaker 1: to a question specifically about selling stuff on eBay and

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Speaker 1: whether that's still the place to turn to sell collectibles.

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Speaker 2: Going and Joel, this is Joe. I was running, what

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Speaker 2: do you recommend as far as selling collectibles on eBay's

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Speaker 2: is a good idea or a bad idea? Thanks? All right, Joel,

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Speaker 2: this one was just for you. It's the shortest listener

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Speaker 2: question of all time.

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Speaker 1: Man, I feel like I actually just said the exact

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Speaker 1: question before we Yeah, like trying to summarize it, but

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Speaker 1: the question was a summary and.

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Speaker 2: Any sense is I hit play? I was like, wait

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Speaker 2: a minute, you shouldn't even set it up that way.

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Speaker 2: The tea up is the question?

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Speaker 1: Yes it is, Yes, it is quicken to the point.

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Speaker 1: But I don't know, maybe we should be quicking to

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Speaker 1: the point and say eBay is a great place to

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Speaker 1: sell collectibles. Yeah, I love eBay, so should be in it.

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Speaker 3: There.

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Speaker 2: No's okay, I want to I want to talk about

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Speaker 2: how much I love you Bay.

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Speaker 1: Well, maybe we should get into just briefly the history

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Speaker 1: of eBay. That I mean they came on the scene

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Speaker 1: decades ago, now, I mean eBay was like early Internet,

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Speaker 1: right when it was one of those like first inklings

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Speaker 1: of like, oh this is going to change everything. Uh

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Speaker 1: the I mean, I think now people are just like

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Speaker 1: your grandfather into the reality of eBay in your life,

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Speaker 1: whether you're buying or selling stuff, and you just think

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Speaker 1: it's normal.

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Speaker 2: Well, guess what. It didn't used to be normal at

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Speaker 2: some point. It was a game changer.

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Speaker 1: And before that, the way you had to sell stuff

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Speaker 1: was like especially collectibles and stuff like that. You remember,

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Speaker 1: remember the show Antiques Road Show? Yeah, think about consign

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Speaker 1: It exists, Yeah, and it's and it is like if

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Speaker 1: you're in one of those like doldrums and you're watching

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Speaker 1: PBS on a Sunday afternoon or something, it's kind of

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Speaker 1: fun to have Antiques Roadshow come on.

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Speaker 2: You gives you hope that that painting that you might

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Speaker 2: have up in the attic is uh like some rare right,

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Speaker 2: Actually that was painted over and all you reverse the

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Speaker 2: canvas and yeah.

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Speaker 1: Somehow, but eBay just changed the whole game, turned everything

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Speaker 1: on its head, and it just opened up a whole

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Speaker 1: wide world to people who wanted to buy collectibles and

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Speaker 1: people who want to sell collectibles. And of course this

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Speaker 1: has expanded to everything. Like I bought my kid's backpack

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Speaker 1: on eBay this year because it was like far cheaper

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Speaker 1: to get a brand new backpack Camo. He wanted the

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Speaker 1: Camo there than it was to get it on another site,

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Speaker 1: So it was like a Target backpack but sold on eBay,

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Speaker 1: and I just went there because it was less expensive.

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Speaker 1: But like the collectible's market was just far more localized,

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Speaker 1: and then eBay globalized things. They also helped make pricing

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Speaker 1: more transparent because it's it's easier to see what similar

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Speaker 1: items have sold for, which makes things more transparent for

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Speaker 1: buyers and for sellers. Buyers kind of know where to list.

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Speaker 1: They found kind of an equilibrium sellers, No, that's overpriced,

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Speaker 1: I'm not paying that, And in some cases that led

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Speaker 1: to a realization that some items were less rare than

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Speaker 1: people had thought too, which led to price decreases on

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Speaker 1: things that had been marked up too high. In some instances.

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Speaker 2: About price transparency and knowledge and folks knowing what they

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Speaker 2: what they have on hand, I don't know.

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Speaker 1: Of a specific case I can sit on that, but

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Speaker 1: I'm guessing like certain sports cards probably we're like thought

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Speaker 1: to be super rare, and then I was like, actually,

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Speaker 1: there's more of these than we thought that the price

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Speaker 1: has gone down, and it's just it's hard to overstate

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Speaker 1: the role that eBay has played in the collectibles community,

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Speaker 1: just making it easier for buyers and sellers to link up. So, yeah,

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Speaker 1: not to blow too much smoke in eBay's direction, but

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Speaker 1: they're pretty cool. I get why you like them.

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Speaker 2: I was trying to think of the magazine where it

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Speaker 2: was that I grew up that was essentially the predecessor

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Speaker 2: to eBay or even Craigslist, which was called I Wanna.

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Speaker 2: Did you have one of those? No, it was maybe

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Speaker 2: it was a local thing only that someone stuck together.

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Speaker 2: But it was like this like a book. It was

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Speaker 2: like a magazine. It's like a newspaper, like white pages

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Speaker 2: style magazine. It was called Iwana, and I think they

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Speaker 2: would publish that maybe once a week, or maybe it

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Speaker 2: was once a month, and so you'd go into like

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Speaker 2: gas stations and you'd get a I Wanna yeah, and

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Speaker 2: people would have all the different cars or just various

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Speaker 2: items that they're that they were looking to sell. I

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Speaker 2: wasn't into collectibles as a seven year old, but I'm

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Speaker 2: sure they were there as well well.

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Speaker 1: And even that was an iteration on the newspaper Classified,

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Speaker 1: which used to be one of the big money makers

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Speaker 1: for newspapers. That's completely like they don't have any role

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Speaker 1: to play. I thought it was like a disgruntal newspaper

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Speaker 1: employee who was just like, you know what.

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Speaker 2: I want to take all of the money making ability

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Speaker 2: away from you and create my own things right here.

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Speaker 2: But a few of the reasons we think it is

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Speaker 2: a smart place to set up shop there in eBay,

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Speaker 2: particularly in the collectible space, are because they have like

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Speaker 2: essentially there's a critical mass there as far as the

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Speaker 2: customer base. So if you had gone to a local

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Speaker 2: collectible shop, dozens maybe of folks might see what you're selling,

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Speaker 2: but you know, you listed there on eBay, and you

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Speaker 2: have access to millions of customers, millions of eyeballs, including

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Speaker 2: the ones who are going to be most keen to

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Speaker 2: buy what it is that you're selling, Like even international customers,

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Speaker 2: Like there might be an obsession with your specific niche

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Speaker 2: in some random part in Europe that you would have

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Speaker 2: no idea about.

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Speaker 1: But Transylvania or something like that, you know, and you're like,

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Speaker 1: I didn't realize this thing was popular there, but you

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Speaker 1: can reach Transylvania customers on eBay.

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Speaker 2: It just opens the entire world up to the goods

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Speaker 2: that you're hoping to sell in a pretty unique, cool

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Speaker 2: way and to ensure that you're getting top dollar for it.

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Speaker 1: Yeah, and because of eBay's pitting model, you're likely going

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Speaker 1: to get a better price right than you would selling

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Speaker 1: anywhere else. So people buying collectibles on eBay they can

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Speaker 1: get frenzied, which drives up the price beyond what you

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Speaker 1: thought you might get. And yeah, you got to package

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Speaker 1: that order up, You got to get a shipped in

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Speaker 1: a timely manner, which I think some people associate with hassle,

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Speaker 1: but that hassle is likely worth it given the ability

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Speaker 1: to sell at a higher price point and to be honest,

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Speaker 1: selling items locally comes with other frustrations. Yeah, you don't

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Speaker 1: have the package, you're up and sell it, but you're

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Speaker 1: talking about having to find the right place, potentially pay

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Speaker 1: a commission to someone else to sell it on your

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Speaker 1: behalf because you don't have a storefront. eBay seems like

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Speaker 1: the best platform to maximize returns without too much effort.

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Speaker 1: But selling collectibles in general is just this business that

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Speaker 1: requires a lot of I think enthusiasm, time, elbow grease.

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Speaker 1: If that's something that you want to do, you just

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Speaker 1: better realize that what comes along kind of with the

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Speaker 1: whole kit and kaboodle there.

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Speaker 2: Yeah, you you buy things on eBay? Do you ever

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Speaker 2: sell anything on eBay?

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Speaker 1: Have you?

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Speaker 2: Do you have a well reviewed eBay? I'd account with

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Speaker 2: the with the stars.

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Speaker 1: I don't know I ever sold a single item on eBay. Dude,

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Speaker 1: you gotta me because I'm not really intellectibles and I

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Speaker 1: guess I could sell all the stuff.

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Speaker 2: But yeah, it just depends on what it is you're selling.

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Speaker 2: So literally it's funny. So my roommate and I one

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Speaker 2: of my roommates in college, we were essentially in a

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Speaker 2: race to get the different color stars. What you not

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Speaker 2: only get by buying an item and having good feedback

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Speaker 2: left about you, but also from selling stuff. And I

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Speaker 2: think this, I literally think this was my first auction.

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Speaker 2: One of my first items I had listed was this

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Speaker 2: is and I'm this is like twenty years ago, man,

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Speaker 2: But I didn't need my CDs anymore because every we're

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Speaker 2: moving towards MP three's and I saw the future, Joel.

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Speaker 2: I saw the writing on the wall, and I thought, man,

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Speaker 2: it's time to unload the CDs before they're completely worthless, worthless,

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Speaker 2: And so I got my entire collection together, all those

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Speaker 2: Creed CDs. I did not own a single Creed album.

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Speaker 2: I'll put that out there. They do some collective Soul.

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Speaker 2: I feel like Collective Soul was kind of they were

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Speaker 2: borderline pretty close to the Creed. But as the first

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Speaker 2: time I'd ever sold anything online and so I didn't

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Speaker 2: do a good job packaging. I basically took all my

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Speaker 2: CD jewel cases with the CDs and just put them

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Speaker 2: in a cardboard box with no padding. And I still

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Speaker 2: remember the feedback I got from that buyer because obviously,

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Speaker 2: like when that box was dropped or set down, the

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Speaker 2: corner of the box is getting crunched, which means there's

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Speaker 2: jewel cases that were all completely smashed. I still remember

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Speaker 2: him saying that if the CDs were a baby or

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Speaker 2: a kid, the seller would be arrested for child abuse

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Speaker 2: or necklidgets or something like that.

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Speaker 1: But uh, Internet used to be so funny and good too.

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Speaker 1: People used to put a lot more effort in interviews.

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Speaker 2: Yeah, it took me a while to kind of calm

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Speaker 2: my way back from that first negative reviugual. But selling

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Speaker 2: on eBay, though, does not come without some downsides. Aside

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Speaker 2: with aside from having to package it well, like you

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Speaker 2: were referencing that the hassle of getting some bubble wrap

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Speaker 2: in there, perhaps I avoided. In order to succeed, you've

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Speaker 2: got to take some good pictures, you got to write

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Speaker 2: a pretty thorough listing, which does take time, especially i'm

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Speaker 2: assuming given collectibles, and another potential downside, like some folks

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Speaker 2: out there might want to avoid eBay because of the

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Speaker 2: fact that they take a cut and is not insignificant,

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Speaker 2: like it depends on the item. It depends on the

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Speaker 2: category of items you're selling, but typically it's going to

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Speaker 2: total around fifteen percent. Now that I'm starting to feel

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Speaker 2: a lot like taxes from the government, Right, But I

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Speaker 2: still think most of the time it makes sense to

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Speaker 2: let eBay have its cut because of how easy they

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Speaker 2: make the selling process process, how likely you are to

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Speaker 2: I think, get a much better price by selling on

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Speaker 2: their site versus whoever happens to be their local to

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Speaker 2: you who might be interested in your item.

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Speaker 1: Yeah, so I think it's frugal, not cheap, going eBay.

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Speaker 1: There are other routes you can consider, right, but so

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Speaker 1: much depends on what exactly you're selling. I think you

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Speaker 1: could rent a booth at an antique mall. Like let's

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Speaker 1: say you've got a ton of vintage comic books or

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Speaker 1: something like this. Matt, I have friends who in the past,

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Speaker 1: like are super into collectibles, and they have found this

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Speaker 1: to be a great way to go. There's an antique

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Speaker 1: shop that's fifteen minutes down the street and they'd go

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Speaker 1: in once a week. But guess what, someone else is

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Speaker 1: kind of minding the store, selling their product, giving them

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Speaker 1: the profit. They take a cut.

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Speaker 2: Too, they're paying rent.

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Speaker 1: Yeah, they got to pay the rent that kind of stuff,

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Speaker 1: But that depending on what it just so much depends

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Speaker 1: on what you're selling and how you want to sell it.

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Speaker 1: But I know that was like not too much of

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Speaker 1: a lift to kind of maintain that presence in that

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Speaker 1: antique shop. But are you still reaching the number of

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Speaker 1: people that you could. Yeah, maybe it's a little bit

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Speaker 1: easier because you bring all your stuff and you set

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Speaker 1: it up at once. You just got to kind of

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Speaker 1: take that into consideration. If it's something that's incredibly heavy,

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Speaker 1: then you might want to lean towards selling locally because

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Speaker 1: the shipping costs could get prohibitive. But they're even Facebook

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Speaker 1: specific groups that you might want to consider, like a

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Speaker 1: local vintage furniture group if that's what you're into, if

399
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Speaker 1: that's what you're selling, or establish an Instagram presence because

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Speaker 1: you're gonna be able to find people who are into

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Speaker 1: the exact thing that you are selling. You're into as well.

402
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Speaker 1: eBay it's not best the best possible thing for every seller,

403
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Speaker 1: for every product category, but I think it serves a

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Speaker 1: lot of folks well in this space. So consider those alternatives.

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Speaker 1: But also, I don't know, eBay can it makes sense

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Speaker 1: for a whole a white.

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Speaker 2: Swath of sellers. You know it? Man, We got more

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Speaker 2: to get to, including we are going to talk about

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Speaker 2: Senator William Roth how that might impact your personal finances.

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Speaker 2: We'll get to that more right after this. All right,

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Speaker 2: we're back, Matt. Let's keep William Roth. That was a

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Speaker 2: nod to former Senator William Roth. You know what we're

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Speaker 2: going to talk about here in a little bit.

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Speaker 1: Yeah, if you've listened to the show for any length

415
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Speaker 1: of the time, I don't know if we've actually ever

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Speaker 1: mentioned the senator who's responsible for the legislation that made

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Speaker 1: the roth Iraya reality. Have not. That makes me feel

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Speaker 1: like an idiot for not having done that. Well, we'll

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Speaker 1: remedy that today. Now, there's plenty of stuff to talk

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Speaker 1: about in the world of personal finance, that's right, but

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Speaker 1: let's talk first about inheritance, and let's get to a

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Speaker 1: question about what to do after inheriting money and how

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Speaker 1: to make sure you're making the most of it.

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Speaker 3: Hey guys, it's Scott in Florida. My wife and I

425
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Speaker 3: inherited a little money and we decided to put it

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Speaker 3: in pretty safe stuff. We have some CDs earning about

427
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Speaker 3: four percent. I've got a decent amount and a preferred

428
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Speaker 3: stock a solid utility company here in Florida earning close

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Speaker 3: to seven percent. And our issue now is when we

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Speaker 3: reached the end of the year last year, we ended

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Speaker 3: up having tons of interest and having a big tax

432
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Speaker 3: bill as a result and owing money I did in

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Speaker 3: my job put down to add about five hundred extra

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Speaker 3: month withholding on my taxes, and hopefully that's gonna help matters.

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Speaker 3: But my wife, also, to top things off, is now

436
00:20:11,840 --> 00:20:15,080
Speaker 3: some I retired and working a ten ninety nine job,

437
00:20:15,400 --> 00:20:19,200
Speaker 3: so we're gonna end up paying her whole tax bill

438
00:20:19,960 --> 00:20:22,119
Speaker 3: at the end of the year as well. So I

439
00:20:22,160 --> 00:20:26,480
Speaker 3: wondered if you had any tips on reducing this tax burden,

440
00:20:26,800 --> 00:20:30,000
Speaker 3: or at least reducing the bite at the end of

441
00:20:30,000 --> 00:20:30,360
Speaker 3: the year.

442
00:20:31,760 --> 00:20:36,760
Speaker 2: Thanks a lot a reducing that tax bill bite. I

443
00:20:36,760 --> 00:20:38,439
Speaker 2: feel like that's that's just what we're gonna be doing

444
00:20:38,480 --> 00:20:39,359
Speaker 2: for the rest of our lives.

445
00:20:39,520 --> 00:20:43,639
Speaker 1: Essentially, the visual image I got was putting a jaws

446
00:20:43,640 --> 00:20:48,720
Speaker 1: a taxing in reverse, like rewinding trying to undo the.

447
00:20:50,160 --> 00:20:53,480
Speaker 2: I mean, I guess to something, the Jaws tax bite

448
00:20:53,480 --> 00:20:55,679
Speaker 2: feels that large. I picture just like a little annoying

449
00:20:55,720 --> 00:20:58,520
Speaker 2: dog like chasing, like you're you know, you run a ton.

450
00:20:58,880 --> 00:21:02,080
Speaker 2: Have you ever gotten chased by a dog? No? Not once.

451
00:21:02,680 --> 00:21:05,240
Speaker 1: I don't think so. Sometimes I run by weird looking

452
00:21:05,280 --> 00:21:08,200
Speaker 1: dogs that people there's weird looking dog and you're afraid

453
00:21:08,200 --> 00:21:10,160
Speaker 1: that they might come after you. No, I don't usually

454
00:21:10,200 --> 00:21:12,720
Speaker 1: get afraid. Sometimes they do get a little interested start

455
00:21:12,880 --> 00:21:14,360
Speaker 1: trying to like sniff me, and I'm like.

456
00:21:14,640 --> 00:21:17,200
Speaker 2: Yeah, that's fine. But if there's a dog chasing anyway,

457
00:21:17,240 --> 00:21:19,440
Speaker 2: I just picture like a you being like a snapping

458
00:21:19,480 --> 00:21:21,200
Speaker 2: dog at your heels. That's what it to me.

459
00:21:21,280 --> 00:21:22,879
Speaker 1: That's what taxes feel like.

460
00:21:22,960 --> 00:21:26,360
Speaker 2: But first of all, Scott, you mentioned that you came

461
00:21:26,400 --> 00:21:30,159
Speaker 2: into possession of this money via inheritance, which means that

462
00:21:30,200 --> 00:21:32,159
Speaker 2: you've lost somebody you left, so I'm I'm sorry to

463
00:21:32,200 --> 00:21:36,120
Speaker 2: hear about that. But of course having this additional money

464
00:21:36,480 --> 00:21:40,280
Speaker 2: is likely accelerating you towards your financial goals. And that

465
00:21:40,400 --> 00:21:43,400
Speaker 2: increased tax bill that showed up there on your ten

466
00:21:43,480 --> 00:21:47,280
Speaker 2: ninety nine interest form is becoming more common, and you're

467
00:21:47,320 --> 00:21:50,600
Speaker 2: not alone in seeing higher amounts there as saving rate,

468
00:21:50,680 --> 00:21:54,440
Speaker 2: savings rates, and overall amounts that folks have allocated towards

469
00:21:54,480 --> 00:21:55,919
Speaker 2: their savings has increased.

470
00:21:55,600 --> 00:21:57,760
Speaker 1: Because of like oh, four percent interest rate in my

471
00:21:57,800 --> 00:22:00,080
Speaker 1: sam these account, I guess I should put more in there.

472
00:22:00,160 --> 00:22:02,480
Speaker 2: More than they probably have ever had, right, And they're saying,

473
00:22:02,560 --> 00:22:06,000
Speaker 2: holy cow, But that is why I think a lot

474
00:22:06,040 --> 00:22:09,199
Speaker 2: of folks have seen just a higher line items on

475
00:22:09,280 --> 00:22:10,880
Speaker 2: that to none to nine interests.

476
00:22:10,480 --> 00:22:12,760
Speaker 1: More overall interest receive, which is a good thing. But

477
00:22:12,800 --> 00:22:14,680
Speaker 1: then the shock is the ten ninety nine nine and

478
00:22:14,720 --> 00:22:17,040
Speaker 1: T and you're like, I have to pay tax on that,

479
00:22:17,080 --> 00:22:21,400
Speaker 1: and I have to pay it at my ordinary income rate,

480
00:22:21,880 --> 00:22:24,600
Speaker 1: So that can be a frustrating thing. And I think

481
00:22:24,600 --> 00:22:27,439
Speaker 1: for some people maybe they just weren't prepared for that,

482
00:22:27,480 --> 00:22:29,280
Speaker 1: which meant maybe they owed more than they thought they

483
00:22:29,280 --> 00:22:32,439
Speaker 1: would last year, which was a rare thing. Not a

484
00:22:32,440 --> 00:22:34,360
Speaker 1: bad thing, but a rare thing because it hasn't been

485
00:22:34,440 --> 00:22:36,240
Speaker 1: the case for many years for a whole lot of people,

486
00:22:36,520 --> 00:22:39,639
Speaker 1: because savings rates are so dang low, and you know,

487
00:22:39,680 --> 00:22:41,679
Speaker 1: so many people try hard to reduce taxes, which can

488
00:22:41,720 --> 00:22:44,359
Speaker 1: make sense. And we will give you some of our thoughts.

489
00:22:44,640 --> 00:22:47,280
Speaker 1: And while there are some tweaks that you can make here,

490
00:22:47,640 --> 00:22:50,280
Speaker 1: I just want to note that, like you wouldn't ask

491
00:22:50,320 --> 00:22:52,359
Speaker 1: your employer to reduce your salary in order to pay

492
00:22:52,440 --> 00:22:55,200
Speaker 1: less in tax I just don't. I don't think taxation

493
00:22:55,800 --> 00:22:58,639
Speaker 1: should wag the dog. But if you had less in

494
00:22:58,720 --> 00:23:02,040
Speaker 1: savings and CDs and then more in investments instead, you

495
00:23:02,080 --> 00:23:04,560
Speaker 1: could avoid a decent chunk of that ten ninety nine

496
00:23:04,560 --> 00:23:07,359
Speaker 1: I in t because you wouldn't have made nearly as

497
00:23:07,440 --> 00:23:09,760
Speaker 1: much in those savings vehicles. You would at least be

498
00:23:09,840 --> 00:23:13,240
Speaker 1: punting some of those taxes down the road into future years.

499
00:23:13,520 --> 00:23:15,760
Speaker 1: But that would also mean taking on more risk, having

500
00:23:15,840 --> 00:23:19,760
Speaker 1: less liquidity, and so you have to kind of like decide, well,

501
00:23:20,040 --> 00:23:23,359
Speaker 1: where is what vehicle is this money best in for

502
00:23:23,600 --> 00:23:26,600
Speaker 1: my needs? And if it is in a savings vehicle,

503
00:23:26,640 --> 00:23:28,640
Speaker 1: then you just have to bite the bullet of paying

504
00:23:28,680 --> 00:23:30,320
Speaker 1: the tax on the ten ninety nine iron t. But

505
00:23:30,320 --> 00:23:33,400
Speaker 1: you at least need to think through that question critically,

506
00:23:33,480 --> 00:23:36,000
Speaker 1: I think, in order to make the right decision for

507
00:23:36,040 --> 00:23:38,840
Speaker 1: you from a medium long term goal standpoint and then

508
00:23:38,840 --> 00:23:40,640
Speaker 1: also from a short term tax standpoint.

509
00:23:40,760 --> 00:23:42,760
Speaker 2: Yeah, I think it's really important to think through what

510
00:23:42,920 --> 00:23:46,239
Speaker 2: you want to use this money for, specifically when you

511
00:23:46,280 --> 00:23:49,240
Speaker 2: are gonna want it to be available to you, when

512
00:23:49,240 --> 00:23:52,720
Speaker 2: you're gonna want it to be liquid, because I think

513
00:23:52,840 --> 00:23:55,280
Speaker 2: you should consider maybe be a decent chunk of it

514
00:23:55,320 --> 00:23:59,840
Speaker 2: should effectively put into maybe a workplace retirement account, or

515
00:24:00,359 --> 00:24:04,080
Speaker 2: not effectively but directly actually via an IRA or a

516
00:24:04,160 --> 00:24:07,000
Speaker 2: taxable brokerage account. But it just depends on your timeline

517
00:24:07,000 --> 00:24:09,080
Speaker 2: and when you want to have access to those dollars.

518
00:24:09,400 --> 00:24:11,280
Speaker 2: It was a smart move, by the way, to withhold

519
00:24:11,440 --> 00:24:14,320
Speaker 2: more in taxes from Chap your paycheck in order to

520
00:24:14,359 --> 00:24:17,600
Speaker 2: reduce the shock of a higher potential tax bill. But

521
00:24:18,640 --> 00:24:21,840
Speaker 2: while you are likely to be less shock come April,

522
00:24:21,920 --> 00:24:24,359
Speaker 2: there are still other potential moves that could help you

523
00:24:24,400 --> 00:24:27,639
Speaker 2: to grow this money. If you've got a longer time horizon,

524
00:24:27,680 --> 00:24:30,360
Speaker 2: if you are willing to expose yourself to a bit

525
00:24:30,359 --> 00:24:32,600
Speaker 2: more risk and buy a risk. I don't mean doing

526
00:24:32,640 --> 00:24:36,240
Speaker 2: anything crazy, but just investing in the overall stock market, perhaps.

527
00:24:36,000 --> 00:24:38,639
Speaker 1: Especially if this was like unexpected money and you're like,

528
00:24:38,720 --> 00:24:40,960
Speaker 1: I don't have something I want in the near term,

529
00:24:40,960 --> 00:24:43,200
Speaker 1: and CD just felt like maybe the safest choice.

530
00:24:43,359 --> 00:24:44,720
Speaker 2: I think it probably felt like a good place to

531
00:24:44,760 --> 00:24:45,080
Speaker 2: park it.

532
00:24:45,320 --> 00:24:47,600
Speaker 1: Yeah, yeah, which makes sense too, because you probably don't

533
00:24:47,600 --> 00:24:49,080
Speaker 1: want to make drastic moves when you get a big

534
00:24:49,080 --> 00:24:52,600
Speaker 1: sum of money in your life. But now you might say, oh,

535
00:24:52,640 --> 00:24:55,119
Speaker 1: I've had a long enough time where this money has

536
00:24:55,119 --> 00:24:57,320
Speaker 1: been sitting and now I'm ready to do something different

537
00:24:57,480 --> 00:24:59,679
Speaker 1: with it, and I'm ready to actually think through and

538
00:24:59,680 --> 00:25:02,159
Speaker 1: play and the ways that this would would best be

539
00:25:02,160 --> 00:25:05,920
Speaker 1: put to use. And you're you know, on top of that, Matt,

540
00:25:06,160 --> 00:25:08,280
Speaker 1: their taxes are about to get more complicated because of

541
00:25:08,280 --> 00:25:11,480
Speaker 1: that ten ninety nine job. Again, not a bad thing,

542
00:25:11,600 --> 00:25:14,040
Speaker 1: I think that's the crux question. Yeah, it just means

543
00:25:14,040 --> 00:25:16,200
Speaker 1: that then the taxes aren't withheld from the paycheck like

544
00:25:16,240 --> 00:25:20,240
Speaker 1: they are in W two land, which feels like easier.

545
00:25:20,520 --> 00:25:22,040
Speaker 1: But again, I think there's a lot of, like we've

546
00:25:22,080 --> 00:25:24,520
Speaker 1: talked about this before, some positives to being in that

547
00:25:24,560 --> 00:25:26,760
Speaker 1: ten ninety nine world and actually paying your taxes on

548
00:25:26,800 --> 00:25:30,080
Speaker 1: a quarterly basis. Because you're more aware of what you're

549
00:25:30,119 --> 00:25:32,040
Speaker 1: being in tax than you are if you live in

550
00:25:32,200 --> 00:25:35,000
Speaker 1: W two land. Yeah, and so yeah, you want to

551
00:25:35,000 --> 00:25:37,840
Speaker 1: talk about quarterly estimates for a second, and just because

552
00:25:37,880 --> 00:25:40,480
Speaker 1: it doesn't sound like that's something they're doing with her

553
00:25:40,640 --> 00:25:41,600
Speaker 1: income yet, No.

554
00:25:41,680 --> 00:25:43,640
Speaker 2: And it might. Honestly, like, I think it has less

555
00:25:43,680 --> 00:25:45,400
Speaker 2: to do with it ten ninety nine, and I wonder

556
00:25:45,400 --> 00:25:46,639
Speaker 2: if it has more to do with the fact that

557
00:25:46,640 --> 00:25:50,080
Speaker 2: it's variable income, because if it's a you can have

558
00:25:50,119 --> 00:25:52,679
Speaker 2: a ten ninety nine job, and if it's steady income,

559
00:25:53,080 --> 00:25:56,280
Speaker 2: I would say, Jeff, you could even ratchet up your

560
00:25:56,320 --> 00:25:58,600
Speaker 2: withholdings a little bit more, because this is just a

561
00:25:58,640 --> 00:26:00,760
Speaker 2: simple way to not have to worry about it. Just

562
00:26:00,800 --> 00:26:04,200
Speaker 2: have that taken out every single month or every single paycheck,

563
00:26:04,520 --> 00:26:06,760
Speaker 2: as opposed to this being something that you have to

564
00:26:07,240 --> 00:26:10,280
Speaker 2: more manually do. So some of it I think comes

565
00:26:10,359 --> 00:26:12,680
Speaker 2: down to whether or not your wife's income is set

566
00:26:12,720 --> 00:26:16,240
Speaker 2: to be a steady income, a steady ten ninety nine,

567
00:26:16,320 --> 00:26:18,680
Speaker 2: or if it's going to be wildly variable.

568
00:26:18,320 --> 00:26:20,160
Speaker 1: Like if she's getting paid the same amount every month,

569
00:26:20,280 --> 00:26:23,800
Speaker 1: or if yeah, fluctuates by a third to three x.

570
00:26:23,840 --> 00:26:25,920
Speaker 2: Exactly, because if it fluctuates a ton, which is how

571
00:26:26,160 --> 00:26:27,920
Speaker 2: so this is why you're asking me, because I've always

572
00:26:27,920 --> 00:26:31,399
Speaker 2: I've pretty much always had a very variable, a highly

573
00:26:31,400 --> 00:26:35,840
Speaker 2: fluctuating income. And essentially the trick there is you just

574
00:26:36,119 --> 00:26:39,280
Speaker 2: I mean, what I've done is I've taken and I've

575
00:26:39,320 --> 00:26:42,439
Speaker 2: modified this over time. But you look at how much

576
00:26:42,680 --> 00:26:45,960
Speaker 2: tax you've vowed in previous years relative to the amount

577
00:26:45,960 --> 00:26:50,320
Speaker 2: of income that you've generated, and you are calculating your

578
00:26:50,359 --> 00:26:52,160
Speaker 2: own effective to expective.

579
00:26:51,680 --> 00:26:55,720
Speaker 1: Tax, right, yeah, exactly, which is not the tax bracket urin,

580
00:26:55,760 --> 00:26:58,200
Speaker 1: not the highest tax bracket. Uren, it's the overall effective

581
00:26:58,640 --> 00:27:01,600
Speaker 1: tax rate. Because of the way our income tax system works,

582
00:27:01,600 --> 00:27:04,520
Speaker 1: even if you're really twenty two, but effective your effective

583
00:27:04,560 --> 00:27:06,760
Speaker 1: tax rate could be thirteen to fourteen percent.

584
00:27:06,520 --> 00:27:08,199
Speaker 2: And that's going to vary from your to year, depending

585
00:27:08,200 --> 00:27:11,320
Speaker 2: on charitable contributions, whether or not you're itemizing, whether or

586
00:27:11,320 --> 00:27:14,680
Speaker 2: not you're just taking the standard deduction, but everything else

587
00:27:14,760 --> 00:27:19,159
Speaker 2: being equal, it's something that you can over time, really

588
00:27:19,200 --> 00:27:22,120
Speaker 2: hone in on and to the point to where you're

589
00:27:22,160 --> 00:27:25,560
Speaker 2: getting a really accurate estimate. And quarterly, So you asked

590
00:27:25,560 --> 00:27:27,959
Speaker 2: about quarterly estimates. Yeah, that's that's when the federal government

591
00:27:28,000 --> 00:27:30,760
Speaker 2: requires you to get in there and you go to

592
00:27:30,800 --> 00:27:33,880
Speaker 2: e FTPS dot gov, which is a site that you've

593
00:27:33,920 --> 00:27:36,520
Speaker 2: never been to, Joel up until we started write the podcast,

594
00:27:36,640 --> 00:27:38,640
Speaker 2: and what is this all about.

595
00:27:38,680 --> 00:27:40,159
Speaker 1: I've gotten used to it, but I remember like the

596
00:27:40,200 --> 00:27:41,960
Speaker 1: first couple of years of logging into that site because

597
00:27:41,960 --> 00:27:43,439
Speaker 1: I only did it once a quarter and I just

598
00:27:43,480 --> 00:27:46,840
Speaker 1: hated it because the website is trash. It has not

599
00:27:46,880 --> 00:27:49,360
Speaker 1: been updated in probably twenty years.

600
00:27:49,359 --> 00:27:51,960
Speaker 2: Matt, Well, it's much much better than some of the

601
00:27:52,000 --> 00:27:54,880
Speaker 2: state Department of Labor sites.

602
00:27:54,920 --> 00:27:56,840
Speaker 1: And yeah, but our state's site I think is actually

603
00:27:56,840 --> 00:27:59,080
Speaker 1: better than the federal government site, but.

604
00:27:59,000 --> 00:28:01,840
Speaker 2: Not the doll Oh. Yeah, the de Tarment of Labor

605
00:28:01,880 --> 00:28:05,120
Speaker 2: side is awful. Yeah, that is easily the worst government

606
00:28:06,000 --> 00:28:08,280
Speaker 2: agency that I deal with on a quasi regular base.

607
00:28:08,400 --> 00:28:10,399
Speaker 1: Or some bad government websites out there, I think, is

608
00:28:10,480 --> 00:28:12,480
Speaker 1: ultimately what we're saying. But this is Yeah, this is

609
00:28:12,480 --> 00:28:15,719
Speaker 1: one of those things where paying quarterly can help you

610
00:28:15,760 --> 00:28:20,679
Speaker 1: to avoid penalties, right and interest from not paying the

611
00:28:20,720 --> 00:28:23,680
Speaker 1: tax on time, and it can also help you budget

612
00:28:23,760 --> 00:28:27,560
Speaker 1: out the taxes that you owe by setting aside kind

613
00:28:27,560 --> 00:28:29,360
Speaker 1: of coming up with an idea of what your effective

614
00:28:29,359 --> 00:28:33,080
Speaker 1: tax rates. Setting is a side essentially that percentage of

615
00:28:33,520 --> 00:28:36,800
Speaker 1: state and federal if your state has income taxes, which

616
00:28:36,880 --> 00:28:41,120
Speaker 1: you can then set aside the percentage that you think

617
00:28:41,160 --> 00:28:43,720
Speaker 1: you'll owe for both state and federal taxes. Scott loves

618
00:28:43,760 --> 00:28:46,160
Speaker 1: in Florida, so no state taxes there, so he's really

619
00:28:46,200 --> 00:28:48,720
Speaker 1: only got a thing the effective tax rate for the government.

620
00:28:48,720 --> 00:28:50,160
Speaker 1: So and he's only got a log in and make

621
00:28:50,160 --> 00:28:54,720
Speaker 1: payments just to that, just towards that, not towards his state,

622
00:28:54,720 --> 00:28:57,840
Speaker 1: which simplifies things a little bit for him. I also

623
00:28:57,920 --> 00:29:00,480
Speaker 1: just want to say this has enough moving parts. Based

624
00:29:00,520 --> 00:29:03,240
Speaker 1: on the inheritance, based on the change in pay into

625
00:29:03,280 --> 00:29:06,760
Speaker 1: ten ninety nine status, maybe consulting a tax pro could

626
00:29:06,800 --> 00:29:09,680
Speaker 1: make sense, and not someone who just prepares your taxes,

627
00:29:09,680 --> 00:29:11,719
Speaker 1: but someone who helps you think about the long term

628
00:29:12,040 --> 00:29:16,000
Speaker 1: implications right of how and when you pay taxes. You know,

629
00:29:16,360 --> 00:29:19,000
Speaker 1: your tax burden essentially over years and decades, which makes

630
00:29:19,000 --> 00:29:21,400
Speaker 1: you think about that recent conversation I had with Cody Garrett.

631
00:29:21,560 --> 00:29:24,280
Speaker 1: You know, he's not taking on new clients, but his

632
00:29:24,320 --> 00:29:26,840
Speaker 1: whole mission is to help people make wise tax choices

633
00:29:27,120 --> 00:29:29,800
Speaker 1: that minimize their lifetime tax burden, which I think is

634
00:29:30,120 --> 00:29:32,080
Speaker 1: the right mindset, not to just be like save as

635
00:29:32,120 --> 00:29:34,680
Speaker 1: much as possible in one given year, but to think

636
00:29:34,720 --> 00:29:38,440
Speaker 1: about it as a holistic from a holistic perspective, and

637
00:29:38,600 --> 00:29:41,040
Speaker 1: like when you're interviewing folks, you want someone who has

638
00:29:41,080 --> 00:29:43,440
Speaker 1: that kind of mindset. So Scott, hope that helps. Hope

639
00:29:43,480 --> 00:29:44,880
Speaker 1: you find somebody who can help you out with that.

640
00:29:44,960 --> 00:29:47,480
Speaker 1: And you know, really some of this is really easily

641
00:29:47,520 --> 00:29:50,960
Speaker 1: deiwiable as well. And yeah, you might even want to

642
00:29:50,960 --> 00:29:53,120
Speaker 1: make some shifts in where you place your money to

643
00:29:53,160 --> 00:29:55,040
Speaker 1: reduce your tax burden.

644
00:29:55,080 --> 00:29:58,640
Speaker 2: Also, that's right, Joelways hear from Ludaine and she is

645
00:29:58,760 --> 00:30:02,040
Speaker 2: wondering how the rath Ira is going to be impacted

646
00:30:02,080 --> 00:30:04,480
Speaker 2: by the One Big Beautiful Bill Act.

647
00:30:05,240 --> 00:30:07,920
Speaker 4: Hi, jol and Matt. Is it true that the opportunity

648
00:30:08,000 --> 00:30:12,840
Speaker 4: for doing a backdoor wrath will be changing or canceled

649
00:30:13,200 --> 00:30:16,360
Speaker 4: in twenty twenty six? Comma, what does that mean for

650
00:30:16,800 --> 00:30:20,720
Speaker 4: funds we already have in a row? What's the next

651
00:30:20,720 --> 00:30:25,440
Speaker 4: step if any? Is the new plan required? If it's true?

652
00:30:26,480 --> 00:30:27,360
Speaker 4: Thanks for all you do.

653
00:30:28,040 --> 00:30:30,600
Speaker 1: Lu Dane, Thank you for your question. Love that you

654
00:30:30,600 --> 00:30:33,600
Speaker 1: put the kamma in uh speaking with your voice. That

655
00:30:33,640 --> 00:30:34,080
Speaker 1: was interesting.

656
00:30:34,080 --> 00:30:36,080
Speaker 2: I've never is that something the kids are doing now?

657
00:30:36,280 --> 00:30:40,360
Speaker 1: Maybe six seven? That's the only thing I know the

658
00:30:40,400 --> 00:30:42,160
Speaker 1: kids are doing, and because I know about it means

659
00:30:42,160 --> 00:30:43,280
Speaker 1: they're probably not doing it anymore.

660
00:30:44,560 --> 00:30:46,760
Speaker 2: No, my kids are talking. Actually I used it the

661
00:30:46,840 --> 00:30:50,640
Speaker 2: other day and I got serious props from my kids

662
00:30:50,640 --> 00:30:54,120
Speaker 2: because they didn't think I knew it, But you do.

663
00:30:54,240 --> 00:30:57,200
Speaker 1: You're a hip dad, got your ear to the ground. Well, Ludane,

664
00:30:57,200 --> 00:31:00,240
Speaker 1: you're not the only one worried about this, because the

665
00:31:00,480 --> 00:31:04,400
Speaker 1: essentially the threat of the backdoor roth going away. Threats

666
00:31:04,400 --> 00:31:07,680
Speaker 1: have been made by legislators over the years, and attempts

667
00:31:07,680 --> 00:31:10,560
Speaker 1: to eliminate the back door roth have been made consistently,

668
00:31:11,120 --> 00:31:12,600
Speaker 1: but none of them have come to pass. And so

669
00:31:12,920 --> 00:31:15,760
Speaker 1: that was even there was talking this Matt about eliminating

670
00:31:15,760 --> 00:31:17,800
Speaker 1: the backdoor ROTH, that it would make it into the

671
00:31:18,280 --> 00:31:21,800
Speaker 1: one Big Beautiful Bill Act, which I hate saying, but

672
00:31:21,840 --> 00:31:24,640
Speaker 1: alas it did not, and so this uh. And I

673
00:31:24,680 --> 00:31:27,840
Speaker 1: think some people think of the backdoor ROTH as being shady,

674
00:31:27,960 --> 00:31:30,760
Speaker 1: but it is still a perfectly legal maneuver and it

675
00:31:30,840 --> 00:31:34,760
Speaker 1: is still available to folks, including ding That's right.

676
00:31:34,840 --> 00:31:37,960
Speaker 2: Yeah, So the reason that folks opt for a backdoor

677
00:31:38,000 --> 00:31:41,000
Speaker 2: ROTH is because they want to take advantage of tax

678
00:31:41,080 --> 00:31:44,320
Speaker 2: free growth inside of a roth ira, of course, but

679
00:31:44,880 --> 00:31:48,160
Speaker 2: their income is too high, so they're barred. This is

680
00:31:48,200 --> 00:31:50,479
Speaker 2: a good problem to have, of course. But even though

681
00:31:50,800 --> 00:31:54,080
Speaker 2: these individuals can't contribute directly to a roth ira, they

682
00:31:54,080 --> 00:31:58,320
Speaker 2: can contribute instead to a traditional ira and then not

683
00:31:58,560 --> 00:32:02,400
Speaker 2: take the taxa Ducts says a non deductible ira.

684
00:32:02,640 --> 00:32:04,680
Speaker 1: But sometimes when we say that, people are looking for

685
00:32:04,840 --> 00:32:07,000
Speaker 1: in the back end of the brokerage account, where's the

686
00:32:07,040 --> 00:32:09,280
Speaker 1: non deductible ray, I don't see it. I don't see it,

687
00:32:09,280 --> 00:32:10,920
Speaker 1: And that's why we have to say traditional.

688
00:32:11,640 --> 00:32:14,400
Speaker 2: Yeah. But then but then you take it, and then

689
00:32:14,440 --> 00:32:18,680
Speaker 2: you convert that into a roth ira, and ideally this

690
00:32:18,720 --> 00:32:20,880
Speaker 2: is something that you do right away to make it

691
00:32:20,880 --> 00:32:25,000
Speaker 2: a clean conversion. Then this just minimizes earnings before converting,

692
00:32:25,040 --> 00:32:27,080
Speaker 2: and so it just makes the process a lot easier.

693
00:32:27,120 --> 00:32:29,400
Speaker 2: So for folks who might not be as familiar to

694
00:32:29,440 --> 00:32:32,600
Speaker 2: the back door wroth, that's effectively how it works, and.

695
00:32:32,520 --> 00:32:35,560
Speaker 1: It's a solid way for intentional savers to legally get

696
00:32:35,600 --> 00:32:39,520
Speaker 1: more money growing tax free for their future. And so, yeah,

697
00:32:39,720 --> 00:32:41,600
Speaker 1: you just know you're not going to see backdoor wroth

698
00:32:41,680 --> 00:32:43,320
Speaker 1: as an option when you log into your brokerage account.

699
00:32:43,320 --> 00:32:46,120
Speaker 1: You're not going to see non deductiblyra as an option either.

700
00:32:46,160 --> 00:32:48,360
Speaker 1: You got to jump through the hoops, the goofy hoops

701
00:32:48,640 --> 00:32:51,240
Speaker 1: of contributing to a traditional IRA then moving the money

702
00:32:51,240 --> 00:32:54,960
Speaker 1: over and because this is allowed again, Matt, I just

703
00:32:55,280 --> 00:32:58,800
Speaker 1: and because the contribution limits on roth irays are they've

704
00:32:58,800 --> 00:33:00,800
Speaker 1: gone up a little bit, right, so hundred bucks a

705
00:33:00,840 --> 00:33:03,720
Speaker 1: year starting next year. Still, I just prefer to see

706
00:33:03,760 --> 00:33:06,320
Speaker 1: income limits on ROTH contributions done away with altogether. I

707
00:33:06,320 --> 00:33:09,120
Speaker 1: don't know why they exist. And the sliding scale once

708
00:33:09,160 --> 00:33:12,920
Speaker 1: you get into that two hundred and thirty thousand, because it's, yeah,

709
00:33:12,960 --> 00:33:15,080
Speaker 1: because it's still available to you. And so the fact

710
00:33:15,080 --> 00:33:18,000
Speaker 1: that they kind of shut the door on people who

711
00:33:18,080 --> 00:33:20,880
Speaker 1: are making a quarter million dollars or more, it just

712
00:33:20,920 --> 00:33:22,520
Speaker 1: doesn't make much sense to me because those people can

713
00:33:22,520 --> 00:33:25,000
Speaker 1: still do the back door WROTH. And you know, in another.

714
00:33:24,800 --> 00:33:27,840
Speaker 2: Way, because it's easy, easier to leave it as is

715
00:33:27,920 --> 00:33:31,240
Speaker 2: than past new legislation. Drill, Yeah, that's why. And Okay,

716
00:33:31,280 --> 00:33:33,360
Speaker 2: so you're talking about how there's not like a box

717
00:33:33,400 --> 00:33:37,680
Speaker 2: to check when you log into Vanguard, Fidelity, Schwab, some

718
00:33:37,760 --> 00:33:40,640
Speaker 2: of our favorite brokerages. It's almost as if, Okay, imagine

719
00:33:40,680 --> 00:33:43,240
Speaker 2: imagine you're hungry, really like, imagine you're just starving.

720
00:33:43,240 --> 00:33:44,120
Speaker 1: I don't have to imagine it.

721
00:33:44,880 --> 00:33:47,840
Speaker 2: Are you hungry right now? And what if I told you,

722
00:33:47,840 --> 00:33:50,920
Speaker 2: Hagel there you have the ability to get a grass

723
00:33:50,960 --> 00:33:56,360
Speaker 2: fed organic cheeseburger with avocado and pepper jack at Aldi,

724
00:33:56,960 --> 00:34:00,520
Speaker 2: And you're thinking, what that sounds awesome. You drive over

725
00:34:00,560 --> 00:34:02,600
Speaker 2: to Aldi and you're looking around, You're like, where's that

726
00:34:02,640 --> 00:34:05,160
Speaker 2: grass fed cheeseburger that man was telling me about? And

727
00:34:05,200 --> 00:34:07,880
Speaker 2: it's like, well, you can get that there. But it's

728
00:34:07,920 --> 00:34:10,800
Speaker 2: just if you were placing an Instacart orders to assemble

729
00:34:10,800 --> 00:34:13,800
Speaker 2: it yourself and you are filling out your your grocery pickup,

730
00:34:13,800 --> 00:34:15,839
Speaker 2: you're not going to see an option for that. But

731
00:34:16,000 --> 00:34:19,080
Speaker 2: you can get a pound of organic beef, you can

732
00:34:19,200 --> 00:34:21,360
Speaker 2: buy a whole avocados, some cheese, whatever else that you

733
00:34:21,400 --> 00:34:23,520
Speaker 2: want to put on that burger. And those are the

734
00:34:23,560 --> 00:34:25,040
Speaker 2: hoops you have to jump through. You just have to

735
00:34:25,080 --> 00:34:27,320
Speaker 2: assemble it yourself. It takes a little bit of manual

736
00:34:27,800 --> 00:34:30,440
Speaker 2: labor on the back end. So yes, it's not it's

737
00:34:30,480 --> 00:34:32,439
Speaker 2: not going to be delivered to you as easily as

738
00:34:32,480 --> 00:34:35,360
Speaker 2: like walking up to a fast food restaurant and choosing

739
00:34:36,239 --> 00:34:40,200
Speaker 2: grass fed organic cheeseburger with avocado and pepper jack and cheat, yeah,

740
00:34:40,239 --> 00:34:43,920
Speaker 2: and pepper jec, but that doesn't mean that you can't

741
00:34:43,960 --> 00:34:47,000
Speaker 2: actually get your hands on one of those as well.

742
00:34:47,080 --> 00:34:48,560
Speaker 1: Yeah, I think it's a good analogy.

743
00:34:48,640 --> 00:34:49,360
Speaker 2: So what does this mean?

744
00:34:49,440 --> 00:34:51,600
Speaker 1: Because Ludane asked, what does this mean for funds you've

745
00:34:51,600 --> 00:34:54,000
Speaker 1: already got hanging out in a roth ira, it doesn't

746
00:34:54,040 --> 00:34:56,399
Speaker 1: mean anything because even if the backdoor roth were two

747
00:34:56,440 --> 00:34:58,600
Speaker 1: go away, which I don't know that it will again,

748
00:34:58,719 --> 00:35:01,120
Speaker 1: lots of threats number really happy and any money you

749
00:35:01,200 --> 00:35:03,640
Speaker 1: have in a roth iray currently it would not be

750
00:35:03,880 --> 00:35:05,440
Speaker 1: subject to any consequences.

751
00:35:05,440 --> 00:35:05,600
Speaker 2: Man.

752
00:35:05,640 --> 00:35:09,080
Speaker 1: It makes me think of Peter Thiel the He's got

753
00:35:09,120 --> 00:35:13,520
Speaker 1: five billion dollars hanging out in his roth iray from

754
00:35:13,640 --> 00:35:16,000
Speaker 1: his early days when he was getting paid. I guess

755
00:35:16,000 --> 00:35:18,640
Speaker 1: in like stock options from eBay or something like that

756
00:35:20,200 --> 00:35:22,680
Speaker 1: go back to eBay from earlier in this episode, and

757
00:35:22,760 --> 00:35:25,440
Speaker 1: so he's he's loaded. But the money in the account

758
00:35:25,680 --> 00:35:27,840
Speaker 1: is just in there doing its things. So the consequences

759
00:35:28,200 --> 00:35:31,040
Speaker 1: of changing future allocation strategies, it's not going to impact

760
00:35:31,040 --> 00:35:33,040
Speaker 1: his wroth iray. It's not going to impact lou Danes

761
00:35:33,440 --> 00:35:36,200
Speaker 1: roth iira. It's not can impact yours or mine. Money

762
00:35:36,280 --> 00:35:38,480
Speaker 1: that's inside of the roth stays in the wroth it

763
00:35:38,600 --> 00:35:42,080
Speaker 1: is like protected in a cocoon of rothness, and so

764
00:35:42,560 --> 00:35:44,040
Speaker 1: I wouldn't worry about just.

765
00:35:43,920 --> 00:35:45,920
Speaker 2: A Senator William Roth intended.

766
00:35:46,000 --> 00:35:47,080
Speaker 1: There you go. Do you want to you want to

767
00:35:47,120 --> 00:35:49,000
Speaker 1: go into any of that history of how the Roth

768
00:35:49,120 --> 00:35:49,439
Speaker 1: was created.

769
00:35:50,440 --> 00:35:53,560
Speaker 2: I just know that he was a senator, he who

770
00:35:53,560 --> 00:35:55,440
Speaker 2: introduced a legends I'm assuming he yeah, assuming he was

771
00:35:55,440 --> 00:35:58,239
Speaker 2: a sponsor on that bill perhaps, and I know he

772
00:35:58,280 --> 00:36:00,680
Speaker 2: was from the state of Delaware. And tip of the

773
00:36:00,680 --> 00:36:02,400
Speaker 2: cap to Senator William.

774
00:36:02,200 --> 00:36:04,360
Speaker 1: Roth, this has been your personal finance history.

775
00:36:04,200 --> 00:36:07,920
Speaker 2: Lesson for the day, nineteen ninety seven, that's when. So

776
00:36:08,000 --> 00:36:09,000
Speaker 2: it was part of the bill. I think it was

777
00:36:09,000 --> 00:36:12,040
Speaker 2: the taxpayer Relief bill or more than you're letting on.

778
00:36:12,160 --> 00:36:15,000
Speaker 2: Well it comes to you. But which is crazy to

779
00:36:15,000 --> 00:36:17,080
Speaker 2: think because it's something that we talk about all the time.

780
00:36:17,520 --> 00:36:19,399
Speaker 2: But it's only it's not even thirty years old. Man,

781
00:36:19,440 --> 00:36:23,840
Speaker 2: That is crazy. Yeah, yeah, Roth Iray is still gen z.

782
00:36:25,480 --> 00:36:28,080
Speaker 2: You know, it's right. It feels like it's been around forever.

783
00:36:28,400 --> 00:36:32,200
Speaker 2: It's a big account even though it's still pretty young.

784
00:36:32,239 --> 00:36:34,560
Speaker 2: I would not be concerned with it going away like

785
00:36:34,600 --> 00:36:37,600
Speaker 2: this is I mean, gosh, I could not imagine any

786
00:36:37,640 --> 00:36:40,720
Speaker 2: sort of future scenario that would mean that we didn't

787
00:36:40,719 --> 00:36:41,239
Speaker 2: have access to.

788
00:36:41,280 --> 00:36:44,280
Speaker 1: That's the good and the bad of legislation that passes

789
00:36:44,320 --> 00:36:48,760
Speaker 1: federally is it's pretty hard to undo and unwind. Even

790
00:36:48,840 --> 00:36:51,640
Speaker 1: if the majority gets into power that doesn't like the

791
00:36:51,640 --> 00:36:54,319
Speaker 1: thing that was passed, Undoing it proves a lot harder

792
00:36:54,400 --> 00:36:55,879
Speaker 1: than pushing it through in the first place, So they

793
00:36:55,920 --> 00:36:59,040
Speaker 1: just try to like maim it, or they just kind

794
00:36:59,040 --> 00:37:01,120
Speaker 1: of forget that it exists. But really it's hard to

795
00:37:01,200 --> 00:37:04,279
Speaker 1: undo those sorts of things, So I wouldn't worry about

796
00:37:04,280 --> 00:37:07,720
Speaker 1: future tax law changes coming back to bite you. Last

797
00:37:07,719 --> 00:37:09,759
Speaker 1: piece of advice, beware of the pro rat rule. We've

798
00:37:09,760 --> 00:37:10,640
Speaker 1: talked about this before.

799
00:37:10,680 --> 00:37:10,879
Speaker 2: Two.

800
00:37:11,400 --> 00:37:14,399
Speaker 1: This strategy is cleanest if you don't currently have any

801
00:37:14,440 --> 00:37:17,520
Speaker 1: money sitting in a traditional IRA. If you do have

802
00:37:17,600 --> 00:37:19,719
Speaker 1: money sitting in one, you could be subject to paying

803
00:37:19,760 --> 00:37:23,000
Speaker 1: taxes on that conversion. So the backdoor roth Yeah, might

804
00:37:23,040 --> 00:37:24,839
Speaker 1: go away at some point in the future, but for now,

805
00:37:25,040 --> 00:37:26,279
Speaker 1: take full advantage of it.

806
00:37:26,400 --> 00:37:28,680
Speaker 2: And if you do make those non deductible contributions to

807
00:37:28,719 --> 00:37:31,879
Speaker 2: your IRA, don't forget about Form eighty six oh six.

808
00:37:32,160 --> 00:37:33,800
Speaker 2: That's the IRS is going to come a knock and

809
00:37:34,120 --> 00:37:35,439
Speaker 2: they're going to want that as well.

810
00:37:35,560 --> 00:37:37,960
Speaker 1: Turn that puppy in. All right, let's talk about Let's

811
00:37:37,960 --> 00:37:41,080
Speaker 1: get a few more questions, including one about comps and

812
00:37:41,080 --> 00:37:43,480
Speaker 1: how to judge the value of your home what you're

813
00:37:43,480 --> 00:37:45,200
Speaker 1: putting it on the market. We'll get to that and

814
00:37:45,239 --> 00:37:46,080
Speaker 1: more right after this.

815
00:37:54,200 --> 00:37:56,920
Speaker 2: We are back from the break, Joel, and it is

816
00:37:57,000 --> 00:37:59,560
Speaker 2: now time for the Facebook question of the week, which

817
00:37:59,640 --> 00:38:03,279
Speaker 2: is from Mario, who writes, I'm looking to buy a

818
00:38:03,400 --> 00:38:06,440
Speaker 2: house and my real estate agent says we can submit

819
00:38:06,560 --> 00:38:09,560
Speaker 2: and as is offer and still back out if there

820
00:38:09,560 --> 00:38:13,000
Speaker 2: are issues found in the inspection. Can anyone confirm, Juel,

821
00:38:13,560 --> 00:38:15,720
Speaker 2: you're gonna confirm or deny? Mario?

822
00:38:15,880 --> 00:38:18,839
Speaker 1: Okay, I think I'm gonna say mostly confirm. Let's get

823
00:38:18,880 --> 00:38:22,240
Speaker 1: into the details. It's all about what's in the contract.

824
00:38:22,560 --> 00:38:26,160
Speaker 1: So maybe first off we should talk about why someone

825
00:38:26,200 --> 00:38:28,880
Speaker 1: would make it as his offer. Typically it's in an

826
00:38:28,920 --> 00:38:31,840
Speaker 1: effort to stand out from other potential buyers.

827
00:38:31,960 --> 00:38:34,920
Speaker 2: Yeah, this guy sounds like he's hassle free. Yeah, exactly,

828
00:38:35,000 --> 00:38:37,240
Speaker 2: gonna choose Mario from the lineup, exactly.

829
00:38:36,840 --> 00:38:39,319
Speaker 1: Like it's if the home is older, the seller might

830
00:38:39,360 --> 00:38:42,680
Speaker 1: be worried about the post inspection demands for repairs, and

831
00:38:42,680 --> 00:38:45,120
Speaker 1: so an offer that looks superior might end up being

832
00:38:45,200 --> 00:38:48,840
Speaker 1: in fear after all of the stuff, the requests for

833
00:38:48,920 --> 00:38:51,120
Speaker 1: repair that they come back with. But if you're in

834
00:38:51,160 --> 00:38:53,440
Speaker 1: a stute home buyer and you submit an as his offer,

835
00:38:54,120 --> 00:38:56,280
Speaker 1: you might be able to get a better price because

836
00:38:56,280 --> 00:38:58,800
Speaker 1: the buyer is more apt to deal with someone who's

837
00:38:58,800 --> 00:39:00,880
Speaker 1: not going to be requesting all the repairs or the

838
00:39:01,000 --> 00:39:05,080
Speaker 1: price concessions because of water in the basement. It's musty

839
00:39:05,120 --> 00:39:07,640
Speaker 1: down there, and we want you to do an encapsulation,

840
00:39:07,880 --> 00:39:09,719
Speaker 1: which is like a fifteen thousand dollars job, and we

841
00:39:09,719 --> 00:39:12,320
Speaker 1: want you to replace the siding on the house because

842
00:39:12,520 --> 00:39:15,040
Speaker 1: woodpeckers have been poking holes in it, like in matt

843
00:39:15,120 --> 00:39:18,799
Speaker 1: sinning woodpeckers. I know, right. This can also produce the

844
00:39:18,800 --> 00:39:20,480
Speaker 1: time it takes to get to the closing table, which

845
00:39:20,520 --> 00:39:23,680
Speaker 1: can also be really valuable for some sellers. So there

846
00:39:23,680 --> 00:39:26,680
Speaker 1: are reasons to submit as his offers like Mario is

847
00:39:26,719 --> 00:39:30,880
Speaker 1: interested in, and there are potential benefits to him and

848
00:39:30,920 --> 00:39:33,880
Speaker 1: to buyers like him. I think you just have to

849
00:39:33,920 --> 00:39:37,480
Speaker 1: be careful to use the process properly so that you

850
00:39:37,480 --> 00:39:39,080
Speaker 1: don't put yourself behind the eight ball.

851
00:39:39,320 --> 00:39:42,440
Speaker 2: Sure, yeah, but even with an as is offer Mario,

852
00:39:42,560 --> 00:39:45,279
Speaker 2: you typically will still ask for a due diligence period,

853
00:39:45,320 --> 00:39:48,480
Speaker 2: which gives you time oftentimes like a week or ten

854
00:39:48,560 --> 00:39:51,400
Speaker 2: days to get an inspection to make sure that the

855
00:39:51,440 --> 00:39:55,319
Speaker 2: property is in decent condition. But so, like ljel said,

856
00:39:55,360 --> 00:39:58,120
Speaker 2: what if something's up with a house? If the inspection

857
00:39:58,200 --> 00:40:02,279
Speaker 2: report turns up some yeah, some significant damage, well that

858
00:40:02,480 --> 00:40:06,080
Speaker 2: might cost you a ton of money to fix in

859
00:40:06,200 --> 00:40:08,960
Speaker 2: order to well, wait, was it like mitigates right, like

860
00:40:09,000 --> 00:40:11,960
Speaker 2: some of the some of the issues remediation, any issues

861
00:40:12,000 --> 00:40:12,759
Speaker 2: that the house might have.

862
00:40:12,840 --> 00:40:14,719
Speaker 1: It might be like small time stuff, which what you're

863
00:40:14,719 --> 00:40:16,440
Speaker 1: hoping for. If you've seen the house and you think

864
00:40:16,440 --> 00:40:17,400
Speaker 1: it's in great shape.

865
00:40:17,160 --> 00:40:17,920
Speaker 2: And it could be bigger.

866
00:40:17,960 --> 00:40:19,719
Speaker 1: Yeah, but it could be big stuff that you just

867
00:40:19,800 --> 00:40:22,400
Speaker 1: hadn't seen, and that's a sour of the deal, and

868
00:40:22,440 --> 00:40:24,400
Speaker 1: that's when you might want to back out. And so

869
00:40:24,480 --> 00:40:27,600
Speaker 1: the key is to make sure that the contract has

870
00:40:27,640 --> 00:40:30,560
Speaker 1: an unrestricted right that the offer has is written in

871
00:40:30,680 --> 00:40:33,839
Speaker 1: that you have the unrestricted right to terminate within that

872
00:40:33,960 --> 00:40:35,520
Speaker 1: due diligence period.

873
00:40:35,640 --> 00:40:37,680
Speaker 2: That is your protection. Mario.

874
00:40:37,920 --> 00:40:40,880
Speaker 1: Yeah, with the as is offer, you don't have the

875
00:40:40,920 --> 00:40:42,719
Speaker 1: ability to go back and say, hey, there are all

876
00:40:42,719 --> 00:40:44,840
Speaker 1: these issues, can you fix them? But you do have

877
00:40:44,880 --> 00:40:46,600
Speaker 1: the ability to say hey, there are all these issues.

878
00:40:46,680 --> 00:40:49,120
Speaker 1: I'm out, Yeah, and you have the ability to walk away.

879
00:40:49,120 --> 00:40:51,719
Speaker 2: And I even hate saying this because you know it's

880
00:40:51,760 --> 00:40:55,560
Speaker 2: technically called and as is offer, so no negotiating, But

881
00:40:55,760 --> 00:40:59,840
Speaker 2: I'll everything is kind of negotiable because what if you

882
00:40:59,840 --> 00:41:02,920
Speaker 2: go to that sellar and you say, hey, or you

883
00:41:02,920 --> 00:41:04,719
Speaker 2: know that your agent is probably the one doing this,

884
00:41:04,920 --> 00:41:07,560
Speaker 2: and it's like, well, the inspection turned up the fact

885
00:41:07,560 --> 00:41:10,640
Speaker 2: that it needs a new roof and the HVAC is shot. Well,

886
00:41:10,640 --> 00:41:13,680
Speaker 2: guess what, any buyer that is making an offer on

887
00:41:13,800 --> 00:41:16,200
Speaker 2: that house is going to run into the exact same thing.

888
00:41:16,600 --> 00:41:21,000
Speaker 2: So it's like, hey, you can knock ten twenty thousand

889
00:41:21,040 --> 00:41:23,800
Speaker 2: dollars off now, or you can have the next guy.

890
00:41:23,880 --> 00:41:25,840
Speaker 1: Like you're just gonna you can relist it and hopefully

891
00:41:25,880 --> 00:41:27,200
Speaker 1: you find somebody who's going to give us a better

892
00:41:27,200 --> 00:41:27,640
Speaker 1: deal than we are.

893
00:41:27,760 --> 00:41:29,840
Speaker 2: But like, the reason I chose a roof in HVAC

894
00:41:29,920 --> 00:41:33,160
Speaker 2: is those are like typically systems that never get overlooked

895
00:41:33,160 --> 00:41:34,799
Speaker 2: when it comes to an inspection. And so this is

896
00:41:34,800 --> 00:41:37,200
Speaker 2: what I'm pointing out here is that if the seller

897
00:41:37,280 --> 00:41:38,719
Speaker 2: or the agent's like, wait a minute, why do you

898
00:41:38,760 --> 00:41:41,280
Speaker 2: want to back out? And you provide them a copy

899
00:41:41,320 --> 00:41:44,799
Speaker 2: of the inspection. They might say, hey, what if we

900
00:41:45,080 --> 00:41:49,160
Speaker 2: go ahead and knocked twenty off boom, that's gone negotiating. Yeah,

901
00:41:49,200 --> 00:41:52,839
Speaker 2: and that might be an instance to where you've had

902
00:41:52,880 --> 00:41:54,880
Speaker 2: your cake and gotten to eat it too, right, so

903
00:41:54,880 --> 00:41:57,040
Speaker 2: you got the as this offer. But then at the

904
00:41:57,040 --> 00:41:59,319
Speaker 2: same time, oh, turns out that they are willing to

905
00:41:59,320 --> 00:42:01,920
Speaker 2: negotiate as they see the writing on the wall, they

906
00:42:02,160 --> 00:42:04,960
Speaker 2: see the future, which happens to include a whole lot

907
00:42:04,960 --> 00:42:09,000
Speaker 2: of additional sellers making the same requests or potentially backing

908
00:42:09,040 --> 00:42:09,960
Speaker 2: up for the exact same.

909
00:42:09,800 --> 00:42:12,759
Speaker 1: Buyers right buyers making them Any buyer coming to the

910
00:42:12,760 --> 00:42:14,480
Speaker 1: door is going to see those same things you're seeing,

911
00:42:14,880 --> 00:42:18,160
Speaker 1: and they're gonna price or reduce the price in their

912
00:42:18,200 --> 00:42:21,279
Speaker 1: minds and in their offer accordingly. This just makes me think,

913
00:42:21,280 --> 00:42:23,720
Speaker 1: Matt as there's been more equilibrium in the housing market,

914
00:42:23,760 --> 00:42:27,000
Speaker 1: and actually it's the pendulum is swinging towards buyers having

915
00:42:27,040 --> 00:42:30,680
Speaker 1: a little more control. It used to be you remember

916
00:42:30,719 --> 00:42:33,120
Speaker 1: like three years ago, and it was like, better not

917
00:42:33,160 --> 00:42:36,080
Speaker 1: asked for any concessions, better not ask for any money off,

918
00:42:36,160 --> 00:42:38,640
Speaker 1: because they're just gonna like laugh in your face and

919
00:42:38,640 --> 00:42:40,560
Speaker 1: can move on to the next buyer. You have a

920
00:42:40,560 --> 00:42:44,279
Speaker 1: lot more opportunity to go through and be all a

921
00:42:44,360 --> 00:42:47,040
Speaker 1: hard nosed like you can negotiate more as the buyers.

922
00:42:47,000 --> 00:42:48,520
Speaker 1: So I think it's just important to mention that to

923
00:42:48,520 --> 00:42:51,359
Speaker 1: anybody out there who is in that position where they're

924
00:42:51,360 --> 00:42:53,719
Speaker 1: looking to buy a home, You've got more power in

925
00:42:53,760 --> 00:42:56,799
Speaker 1: your hands these days than you have in recent history.

926
00:42:56,920 --> 00:42:58,799
Speaker 2: Yeah, homes have been sitting on the market for a

927
00:42:58,840 --> 00:43:01,400
Speaker 2: good bit longer. Yeah, all right, and more deals falling

928
00:43:01,400 --> 00:43:04,160
Speaker 2: through as well. All right, let's get to another Facebook question.

929
00:43:04,200 --> 00:43:07,040
Speaker 2: This one comes from Anonymous, my favorite poster, who says,

930
00:43:07,040 --> 00:43:09,200
Speaker 2: I'm in the process of selling my house through a realtor.

931
00:43:09,360 --> 00:43:11,160
Speaker 2: I sold day one at three hundred and ninety five

932
00:43:11,160 --> 00:43:13,759
Speaker 2: thousand dollars. My neighbor across the street sold their house

933
00:43:13,800 --> 00:43:16,000
Speaker 2: for three hundred and eighty five thousand dollars in twenty

934
00:43:16,040 --> 00:43:19,560
Speaker 2: twenty one. We use that as a comp Our house

935
00:43:19,600 --> 00:43:22,000
Speaker 2: is actually bigger, and we have updates throughout the whole house.

936
00:43:22,280 --> 00:43:24,360
Speaker 2: The bank had the house appraised, and it appraised for

937
00:43:24,480 --> 00:43:27,400
Speaker 2: three hundred and eighty thousand dollars. The people who are

938
00:43:27,400 --> 00:43:29,319
Speaker 2: buying our house said they will buy the house at

939
00:43:29,360 --> 00:43:32,839
Speaker 2: the appraisal price, which makes sense. The person who came

940
00:43:33,400 --> 00:43:35,399
Speaker 2: to the house. The bank's choice was that my place

941
00:43:35,400 --> 00:43:38,359
Speaker 2: where five minutes a realtor is telling us to take

942
00:43:38,440 --> 00:43:40,480
Speaker 2: the cut and price, but I wanted to get a

943
00:43:40,480 --> 00:43:42,799
Speaker 2: second opinion. She said, that's how it works. It's the

944
00:43:42,800 --> 00:43:43,520
Speaker 2: bank's choice.

945
00:43:43,840 --> 00:43:46,800
Speaker 1: I think it's bs. Has anyone been in this situation before?

946
00:43:47,800 --> 00:43:50,279
Speaker 2: Yeah, an appraisal that comes in tulough Man. There's so

947
00:43:50,320 --> 00:43:53,040
Speaker 2: much to say here. Well, first of all, I'll say

948
00:43:53,040 --> 00:43:54,839
Speaker 2: that using a house that sold on your street four

949
00:43:54,920 --> 00:43:57,560
Speaker 2: years ago as a comp that doesn't make a whole

950
00:43:57,560 --> 00:44:00,160
Speaker 2: lot of sense to me because the housing market has

951
00:44:00,200 --> 00:44:03,480
Speaker 2: changed so much in that time, and so use similar

952
00:44:03,520 --> 00:44:06,279
Speaker 2: homes that have sold recently, like I'm talking in the

953
00:44:06,480 --> 00:44:09,279
Speaker 2: the past like three to six months, even if they

954
00:44:09,320 --> 00:44:12,160
Speaker 2: aren't in your specific neighborhood. Like you got to say

955
00:44:12,160 --> 00:44:15,680
Speaker 2: this because using a sale from four years ago, like

956
00:44:15,719 --> 00:44:17,960
Speaker 2: in my book, this essentially has no bearing on what

957
00:44:18,080 --> 00:44:19,319
Speaker 2: your home is worth now.

958
00:44:19,400 --> 00:44:22,040
Speaker 1: So think it has emotional valance, sure, but it doesn't

959
00:44:22,040 --> 00:44:24,560
Speaker 1: have in terms of like data, what the banks care about,

960
00:44:24,560 --> 00:44:27,040
Speaker 1: what the appraisers care about, what buyers care about. That's

961
00:44:27,080 --> 00:44:29,560
Speaker 1: the biggest red flag in this whole transaction to me.

962
00:44:29,640 --> 00:44:32,479
Speaker 1: They care not one bit well, your neighbor's house sold

963
00:44:32,520 --> 00:44:35,360
Speaker 1: for four years ago. Sorry to say it, but it's true.

964
00:44:35,880 --> 00:44:37,520
Speaker 1: But your reaction is so similar to a lot of

965
00:44:37,520 --> 00:44:39,680
Speaker 1: other sellers. Like you seen your neighbors sell and do well,

966
00:44:39,719 --> 00:44:41,719
Speaker 1: and you want to get or exceed the price that

967
00:44:41,760 --> 00:44:43,919
Speaker 1: they got, especially if you think your house is better

968
00:44:44,000 --> 00:44:46,879
Speaker 1: than theirs. But sadly, it just doesn't always work like that.

969
00:44:46,880 --> 00:44:50,480
Speaker 1: The housing market, it's alive, Matt, it's continually moving, it's

970
00:44:50,560 --> 00:44:54,200
Speaker 1: changing its morphing, it's shifting, and houses tend to increase

971
00:44:54,239 --> 00:44:56,200
Speaker 1: in value over time, but not in a linear way.

972
00:44:56,280 --> 00:44:59,120
Speaker 1: And we are seeing price drops across more of the country.

973
00:44:59,120 --> 00:45:02,799
Speaker 1: We're seeing more deals fall through after this massive arnt

974
00:45:02,840 --> 00:45:05,479
Speaker 1: up in prices, and so it's good for buyers because

975
00:45:05,480 --> 00:45:07,320
Speaker 1: it's bringing balance back, but it can be tough for

976
00:45:07,400 --> 00:45:10,239
Speaker 1: sellers to stomach. It can be even if they're still

977
00:45:10,239 --> 00:45:13,480
Speaker 1: selling pretty darn close to the high point and they're

978
00:45:13,480 --> 00:45:16,759
Speaker 1: making a massive profit because they've owned the home for

979
00:45:16,800 --> 00:45:20,000
Speaker 1: ten years and let's say it's tripled in value. That's amazing,

980
00:45:20,239 --> 00:45:22,799
Speaker 1: but it's still hard that loss aversion part of us

981
00:45:22,960 --> 00:45:24,920
Speaker 1: feels really bad that we made ten grand less than

982
00:45:24,960 --> 00:45:25,360
Speaker 1: our neighbor.

983
00:45:25,480 --> 00:45:28,879
Speaker 2: Sure, yeah, so we've talked about comps, we've talked about

984
00:45:29,320 --> 00:45:31,600
Speaker 2: what the market has done overall. Let's now talk about

985
00:45:31,640 --> 00:45:33,960
Speaker 2: the appraisal, because I think that that can also be

986
00:45:34,000 --> 00:45:38,520
Speaker 2: frustrating and they're not always spot on. I want to

987
00:45:38,560 --> 00:45:41,560
Speaker 2: put on your radar here that you can request another

988
00:45:41,640 --> 00:45:44,480
Speaker 2: appraisal if you think that this is way off, but

989
00:45:44,520 --> 00:45:47,359
Speaker 2: you'd want to submit comps that prove your case. We're

990
00:45:47,360 --> 00:45:50,640
Speaker 2: talking again about those recently sold homes, and this isn't

991
00:45:50,640 --> 00:45:54,680
Speaker 2: completely irregular, though, because most buyers are understandably understandably going

992
00:45:54,760 --> 00:45:57,680
Speaker 2: to be hesitant to pay more than what the home

993
00:45:57,719 --> 00:46:00,800
Speaker 2: appraises for. But I've seen buyer and sellers meet in

994
00:46:00,840 --> 00:46:03,359
Speaker 2: the middle. But I also get that it's tough to

995
00:46:03,360 --> 00:46:05,960
Speaker 2: make less than what was previously agreed upon because of

996
00:46:05,960 --> 00:46:09,080
Speaker 2: this criminy appraisal. But what I'm this is at least

997
00:46:09,080 --> 00:46:13,239
Speaker 2: a fifteen thousand dollars conversation here, and so considering you

998
00:46:13,239 --> 00:46:15,319
Speaker 2: probably don't want to fork out five hundred bucks for

999
00:46:15,400 --> 00:46:17,759
Speaker 2: another appraisal, but I think it could definitely could be

1000
00:46:17,760 --> 00:46:20,600
Speaker 2: money well spent if we're because of how much additional

1001
00:46:20,680 --> 00:46:21,800
Speaker 2: money that we're talking.

1002
00:46:21,560 --> 00:46:23,040
Speaker 1: About, But they might not even be willing to do

1003
00:46:23,040 --> 00:46:25,080
Speaker 1: another appraisal. The bank might be like, sorry, this is it.

1004
00:46:25,120 --> 00:46:27,279
Speaker 1: This is what stands unless you can submit proof that

1005
00:46:27,320 --> 00:46:29,600
Speaker 1: there are other comps we should be considering. And it

1006
00:46:29,600 --> 00:46:32,279
Speaker 1: makes me think. My sister just bought a new home

1007
00:46:32,440 --> 00:46:34,960
Speaker 1: on some land and the appraisal came in. So she

1008
00:46:35,080 --> 00:46:36,880
Speaker 1: was on the buyer side of the equation. The appraisal

1009
00:46:36,920 --> 00:46:39,799
Speaker 1: came in less than what they had offered and agreed to,

1010
00:46:40,160 --> 00:46:42,680
Speaker 1: and so she figured out like, abandoned if you're the buyer. Yeah,

1011
00:46:42,719 --> 00:46:45,360
Speaker 1: they met in the middle, and I'm sure the seller

1012
00:46:45,520 --> 00:46:48,200
Speaker 1: was like, none too pleased to lose thousands of dollars

1013
00:46:48,239 --> 00:46:50,480
Speaker 1: in that transaction, but she was like, all right, we

1014
00:46:50,960 --> 00:46:52,520
Speaker 1: saved more money than we thought we were going to.

1015
00:46:52,600 --> 00:46:54,160
Speaker 1: We were willing to pay that higher price, but the

1016
00:46:54,200 --> 00:46:58,200
Speaker 1: appraisal kind of saved our bacon. So this is not

1017
00:46:59,040 --> 00:47:02,359
Speaker 1: completely random. This sort of stuff happens, but I get

1018
00:47:02,360 --> 00:47:04,200
Speaker 1: it that it's frustrating. And this is a case where

1019
00:47:04,239 --> 00:47:05,920
Speaker 1: I guess, you know, you can relist your home against

1020
00:47:05,960 --> 00:47:08,239
Speaker 1: your agent's wishes in hopes that you're going to make

1021
00:47:08,280 --> 00:47:10,359
Speaker 1: more when another buyer comes along. Because this was also

1022
00:47:10,440 --> 00:47:13,080
Speaker 1: day one, they agreed to a day one offer, which

1023
00:47:13,239 --> 00:47:16,239
Speaker 1: is in some ways a great thing, because it's nice

1024
00:47:16,280 --> 00:47:18,399
Speaker 1: to have that offer in hand and be like, great,

1025
00:47:18,760 --> 00:47:21,239
Speaker 1: I'm super stoked. But you also run the risk of

1026
00:47:21,239 --> 00:47:24,839
Speaker 1: that home lingering longer, costing you more money. And yeah,

1027
00:47:24,920 --> 00:47:27,880
Speaker 1: I don't know. Check check recently sold homes on Zillow

1028
00:47:27,960 --> 00:47:31,760
Speaker 1: on redfin. Have a frank conversation. Ask you your realtor

1029
00:47:31,800 --> 00:47:34,160
Speaker 1: if they think your home can truly fetch more in

1030
00:47:34,239 --> 00:47:37,040
Speaker 1: this environment. But this is a tough one, Matt. I

1031
00:47:37,400 --> 00:47:39,920
Speaker 1: hate it for the seller, but I also realized that

1032
00:47:39,960 --> 00:47:42,880
Speaker 1: this is kind of one of those parts of selling

1033
00:47:42,920 --> 00:47:44,920
Speaker 1: homes and it's just not as clean as you want

1034
00:47:44,960 --> 00:47:45,200
Speaker 1: it to be.

1035
00:47:45,360 --> 00:47:47,560
Speaker 2: I would be willing to relist, especially given the fact

1036
00:47:47,600 --> 00:47:50,279
Speaker 2: that it was day one, and given the fact that, like,

1037
00:47:50,400 --> 00:47:52,319
Speaker 2: what's in your realtor's best interest to go ahead and

1038
00:47:52,320 --> 00:47:54,279
Speaker 2: take the bird in the hand and to avoid all

1039
00:47:54,320 --> 00:47:56,760
Speaker 2: the additional work that might go into having to relist

1040
00:47:56,800 --> 00:47:58,120
Speaker 2: a thing and reshow it.

1041
00:47:58,120 --> 00:47:59,640
Speaker 1: So or you could you could go back and ask

1042
00:47:59,719 --> 00:48:01,719
Speaker 1: the buy and say, hey, listen, we know that it

1043
00:48:01,920 --> 00:48:04,359
Speaker 1: appraised at three eighty and we had agreed at three

1044
00:48:04,480 --> 00:48:06,520
Speaker 1: ninety five. Let's meet in the middle and then maybe

1045
00:48:06,560 --> 00:48:07,400
Speaker 1: everyone's happy.

1046
00:48:08,000 --> 00:48:09,839
Speaker 2: And then it also comes down to what the bank

1047
00:48:09,920 --> 00:48:12,520
Speaker 2: is willing to loan, because that would likely mean that

1048
00:48:12,520 --> 00:48:14,440
Speaker 2: the steller probably has to come to the table with

1049
00:48:14,480 --> 00:48:17,200
Speaker 2: that additional additional money. The bank's not going to be

1050
00:48:17,200 --> 00:48:17,960
Speaker 2: willing to So.

1051
00:48:17,960 --> 00:48:20,880
Speaker 1: Yeah, these are the discussions. Tough spot to be in. Yeah,

1052
00:48:21,000 --> 00:48:22,640
Speaker 1: all right, Matt, let's get back to the beer that

1053
00:48:22,680 --> 00:48:25,560
Speaker 1: we had. This was a rice lagger, super crisp by

1054
00:48:25,800 --> 00:48:27,440
Speaker 1: High Wire Brewing. What do you think of it?

1055
00:48:27,520 --> 00:48:29,560
Speaker 2: Well, super crisp is exactly how I describe it.

1056
00:48:29,600 --> 00:48:30,640
Speaker 1: Put a cape on this puppy.

1057
00:48:31,719 --> 00:48:36,080
Speaker 2: Super crisp, so clean, highly refreshing, and dare I say,

1058
00:48:36,080 --> 00:48:38,879
Speaker 2: I feel much more hydrated after I've enjoyed this beer,

1059
00:48:38,920 --> 00:48:42,279
Speaker 2: which I know you love to say that that's not

1060
00:48:42,320 --> 00:48:42,960
Speaker 2: how it works.

1061
00:48:43,719 --> 00:48:45,680
Speaker 1: But if that's how you feel it works, I think

1062
00:48:45,680 --> 00:48:48,040
Speaker 1: it counts. It's all about emotions and feelings over facts.

1063
00:48:48,040 --> 00:48:48,239
Speaker 2: Matt.

1064
00:48:48,320 --> 00:48:50,840
Speaker 1: Yeah, it's all about the vibes. I'm going to say,

1065
00:48:51,000 --> 00:48:53,560
Speaker 1: this was it. This was dry, this was light. It

1066
00:48:53,600 --> 00:48:56,000
Speaker 1: was an effervescent tingle on my tongue. Yeah, in a

1067
00:48:56,040 --> 00:48:59,560
Speaker 1: beautiful little way. So haven't had a rice lagger in

1068
00:48:59,719 --> 00:49:04,359
Speaker 1: a but especially when your tongue is feeling obliterated by

1069
00:49:05,200 --> 00:49:09,360
Speaker 1: super hazy IPAs by Barrel Aig Stouts by Funky Sours.

1070
00:49:09,400 --> 00:49:10,640
Speaker 2: Does this feel like a palate cleanser?

1071
00:49:10,760 --> 00:49:12,400
Speaker 1: It does, refreshing.

1072
00:49:12,400 --> 00:49:15,360
Speaker 2: We don't drink nearly as crazy off the wall stuff

1073
00:49:15,520 --> 00:49:17,160
Speaker 2: as we used to, like that used to be all

1074
00:49:17,160 --> 00:49:19,239
Speaker 2: we ever would gravitate towards. Oh yeah, Like I mean,

1075
00:49:19,280 --> 00:49:22,320
Speaker 2: the higher the ABV, the whackier the flavors, the harder

1076
00:49:22,360 --> 00:49:25,279
Speaker 2: to say, due to the exotic ingredients that we're in

1077
00:49:25,320 --> 00:49:28,680
Speaker 2: the beers, the better well beers typically gotten crazier.

1078
00:49:28,680 --> 00:49:30,840
Speaker 1: And I think that trend is kind of relenting and

1079
00:49:30,880 --> 00:49:33,160
Speaker 1: we are seeing more beers like this. I pulled out

1080
00:49:33,160 --> 00:49:35,920
Speaker 1: a KBS recently with my father in law and I

1081
00:49:35,960 --> 00:49:38,239
Speaker 1: was like, oh, yeah, this is still good. But man,

1082
00:49:38,440 --> 00:49:41,920
Speaker 1: I've had some stouts that were like way stoutier, you know,

1083
00:49:42,000 --> 00:49:45,320
Speaker 1: way more robust than KBS. Feels a little run in

1084
00:49:45,360 --> 00:49:46,960
Speaker 1: the mill these days, even though it used to be

1085
00:49:47,200 --> 00:49:49,200
Speaker 1: one of those top notched beers that everybody sawt after.

1086
00:49:49,480 --> 00:49:52,440
Speaker 2: Yeah that's right. But again, this was Rice Lagger, Super

1087
00:49:52,440 --> 00:49:55,520
Speaker 2: Crisp by high Wire Brewing out of Asheville. Glad you

1088
00:49:55,560 --> 00:49:58,480
Speaker 2: and I got to enjoy this today. Well, Steph, that's

1089
00:49:58,520 --> 00:50:00,879
Speaker 2: gonna be it for this episode. I'm trying to think

1090
00:50:00,920 --> 00:50:05,359
Speaker 2: if we referenced anything. You mentioned the conversation you had

1091
00:50:05,360 --> 00:50:07,399
Speaker 2: with Cody Garrett Well Well, Well linked to that one

1092
00:50:07,640 --> 00:50:10,319
Speaker 2: in the show notes, along with other resources up on

1093
00:50:10,360 --> 00:50:13,000
Speaker 2: the website at howdomoney dot com. That's going to be

1094
00:50:13,040 --> 00:50:15,320
Speaker 2: a buddy. So until next time, best friends out, Best

1095
00:50:15,440 --> 00:50:16,439
Speaker 2: Friends Out,