WEBVTT - Ask HTM - Is a 25% Savings Rate Overkill, Avoiding State Minimum Insurance Requirements, & Eliminating 401k Loans #1030 0:00:00.080 --> 0:00:01.440 Welcome to How the Money. 0:00:01.520 --> 0:00:03.279 I'm Joel, I am Matt. 0:00:03.120 --> 0:00:05.120 And today we're answering your listener questions. 0:00:24.040 --> 0:00:26.800 All right, buddy, let's get to it. Your is your 0:00:26.840 --> 0:00:27.920 throat all warmed up? 0:00:28.560 --> 0:00:29.480 I was born ready, Matt. 0:00:29.520 --> 0:00:31.720 We did just chat for about fifteen minutes about local 0:00:31.760 --> 0:00:35.280 politics before before we actually I had already hit record 0:00:35.280 --> 0:00:38.959 and then we got off topic, so went back over there, stopped, deleted, 0:00:39.240 --> 0:00:40.440 started fresh from the beginning. 0:00:40.479 --> 0:00:42.559 Sometimes that happens, like we're friends who we just like 0:00:42.560 --> 0:00:45.040 to catch up about random other stuff. Were yeah, that 0:00:45.040 --> 0:00:47.479 that's happening in our lives or around town, and then 0:00:47.560 --> 0:00:49.080 we're like, oh, wait, we're supposed to be recording a 0:00:49.080 --> 0:00:50.240 podcast now, aren't we. 0:00:50.080 --> 0:00:52.800 Got to talk about a personal finance not local politic? 0:00:53.440 --> 0:00:55.520 Yard signs is that we're. 0:00:55.440 --> 0:00:58.960 Just deliberating right now. Who's running for local school board? 0:00:59.000 --> 0:00:59.400 Is the thing? 0:01:00.360 --> 0:01:01.200 Just stop? Stop? 0:01:02.080 --> 0:01:02.400 All right? 0:01:02.520 --> 0:01:04.959 We are endorse candidate right now. Hey, if you. 0:01:04.959 --> 0:01:06.160 Want to, you to go out on a limb and 0:01:06.200 --> 0:01:09.039 no thanks, go for it. We're gonna talk about investing 0:01:09.120 --> 0:01:11.520 when you are younger, when you're twenty five. We're gonna 0:01:11.560 --> 0:01:14.959 specifically talk about some different accounts that this listener is 0:01:15.040 --> 0:01:18.479 asking about we're going to discuss insurance coverage limits. Specifically, 0:01:18.480 --> 0:01:21.360 we got some feedback from a listener. We will address 0:01:21.400 --> 0:01:25.240 that and plus another point that she raised. Another listener 0:01:25.280 --> 0:01:27.240 is asking what he should do about a four oh 0:01:27.280 --> 0:01:30.800 one k loan that he has. We've got all of 0:01:30.840 --> 0:01:33.680 that to get to plus more today. But buddy, I 0:01:33.760 --> 0:01:36.400 want to share something really quick. Folks might remember. I 0:01:36.440 --> 0:01:40.000 guess it was maybe two years ago that there is 0:01:40.040 --> 0:01:42.160 a small part of me that was thinking we might 0:01:42.200 --> 0:01:44.279 get a second vehicle, and I was considering a Tesla, 0:01:44.720 --> 0:01:46.039 and I was just like, I want to I want 0:01:46.080 --> 0:01:48.080 to drive it. I want to get to get to 0:01:48.120 --> 0:01:50.600 see what it feels like and what's great. 0:01:50.440 --> 0:01:51.800 About if you're going to do it, do it quick 0:01:52.040 --> 0:01:52.400 or that well? 0:01:52.440 --> 0:01:55.640 I know tax well that that time is it's no 0:01:55.720 --> 0:01:57.720 longer something I want to do. Okay, But one of 0:01:57.760 --> 0:01:59.080 the I don't know if you recall, but one of 0:01:59.080 --> 0:02:00.880 the things I shared was that it was a ton 0:02:00.880 --> 0:02:04.560 of fun to drive a Tesla, so much fun. I 0:02:04.600 --> 0:02:06.880 really enjoyed it, but it was a pain in the butt. 0:02:06.960 --> 0:02:08.480 So this was during a trip when we rented it, 0:02:08.720 --> 0:02:10.680 which is all, isn't that a great way to try 0:02:10.680 --> 0:02:12.880 out a car? By the way, while you are traveling 0:02:12.880 --> 0:02:15.600 somewhere to try to get that particular vehicle before you 0:02:15.639 --> 0:02:16.520 purchase the dang thing. 0:02:16.600 --> 0:02:18.840 Because like a twelve minute test drive, he giesn't tell 0:02:18.840 --> 0:02:19.120 you nothing. 0:02:19.160 --> 0:02:22.359 Second multi day extended test drive, which is so much fun, 0:02:22.480 --> 0:02:24.360 especially when it's a Tesla and you're not used to 0:02:24.480 --> 0:02:26.280 an evy. It was a ton of fun, but it 0:02:26.280 --> 0:02:29.560 was a pain in the butt to find the Tesla superchargers, 0:02:30.040 --> 0:02:31.519 the charge points or whatever O. 0:02:31.680 --> 0:02:34.120 My friends in California say the opposite that were crazy. 0:02:34.160 --> 0:02:36.240 Where I was, we had to go out of our 0:02:36.280 --> 0:02:37.680 way to get to a charger. 0:02:37.960 --> 0:02:40.520 That was the downside as opposed to a gas station 0:02:40.560 --> 0:02:43.640 on every single corner right, and not to mention because 0:02:43.639 --> 0:02:47.000 you're tapping into the supercharger as opposed to trickle you know, 0:02:47.200 --> 0:02:50.119 slow charging at home. If you weren't traveling, it ended 0:02:50.200 --> 0:02:54.200 up being just as expensive as having filled up traditional 0:02:54.560 --> 0:02:56.239 gas power vehicle right going to the gas station. 0:02:56.320 --> 0:02:59.359 Yeah, loading up on that battery at home. 0:02:59.240 --> 0:03:00.680 That's the way to do it. An of money. 0:03:00.760 --> 0:03:03.440 Yeah, if you're yeah, if you're filling up on the road, yeah, 0:03:03.440 --> 0:03:04.200 you're gonna pay a lot. 0:03:04.280 --> 0:03:06.359 So basically, what I learned was that Okay, I don't 0:03:06.360 --> 0:03:08.680 want a Tesla, and also I'm not gonna rent another 0:03:08.720 --> 0:03:12.480 Tesla again because it just didn't really work out for 0:03:12.639 --> 0:03:15.040 the type of trip that we were taking. Uh So 0:03:15.080 --> 0:03:17.240 you might be surprised to hear that I just rented 0:03:17.400 --> 0:03:20.000 another Tesla for a trip that Kate and I were taking. 0:03:20.040 --> 0:03:21.079 How you changed your tune? 0:03:21.280 --> 0:03:21.840 Here's the thing. 0:03:21.880 --> 0:03:23.480 In the span of three seconds. 0:03:23.120 --> 0:03:26.959 Would you rent a Tesla if it was substantially cheaper 0:03:27.000 --> 0:03:31.480 than even the most affordable economy traditionally gas powered vehicle, Yes, 0:03:31.560 --> 0:03:31.960 it would. 0:03:31.960 --> 0:03:34.480 And that's why I've been running evs lately. Rent a car, 0:03:34.639 --> 0:03:35.800 it's so great, dude. 0:03:35.880 --> 0:03:38.760 So the I went to one of the site aggregators, 0:03:38.800 --> 0:03:41.480 you know where it's got all the different different places 0:03:41.480 --> 0:03:43.600 that you can rent from. And then I hopped to 0:03:43.640 --> 0:03:46.640 one that I had rented from quite somewhat recently, just 0:03:46.640 --> 0:03:49.520 to see directly on the site, and they had they 0:03:49.520 --> 0:03:53.240 were running specials on electric vehicles specifically. It wasn't just Tesla, 0:03:53.280 --> 0:03:56.040 it was also like the the Ford mack e. 0:03:57.160 --> 0:03:59.600 I rented a subru electric car recently. 0:04:00.120 --> 0:04:01.880 Money it was great, enjoyed it. 0:04:01.960 --> 0:04:05.240 Yeah, yeah, So here's the deal. 0:04:05.560 --> 0:04:10.000 It was ninety six dollars total for this rental, as 0:04:10.000 --> 0:04:12.280 opposed to a little over three hundred oh my god, 0:04:12.320 --> 0:04:16.880 for even the most economy whatever, gas powered vehicle. 0:04:16.960 --> 0:04:17.920 That's where it's a hassle man. 0:04:18.080 --> 0:04:20.240 Yes, well here, and here's the other thing. I of 0:04:20.279 --> 0:04:22.279 course looked to where we were traveling, and there were 0:04:22.680 --> 0:04:25.400 superchargers very close by to where we're planning to travel. 0:04:25.400 --> 0:04:28.040 But I specifically paid like ten bucks more and got 0:04:28.040 --> 0:04:30.320 the long range because I think there's a chance we 0:04:30.320 --> 0:04:32.880 may not even need to charge at all, uh during 0:04:32.880 --> 0:04:35.720 that trip, because because you know, they charge you if 0:04:35.760 --> 0:04:39.040 you bring it back without over ninety percent battery life. 0:04:39.240 --> 0:04:41.359 But it's only thirty five bucks, and so like I 0:04:41.440 --> 0:04:44.040 might be able to save ten bucks or something. I 0:04:44.080 --> 0:04:46.240 don't know, maybe it's only fifteen or twenty five bucks 0:04:46.600 --> 0:04:49.920 to charge it myself. But the worst case scenario is 0:04:50.000 --> 0:04:52.000 let's say we're tight on time, we gotta make it 0:04:52.040 --> 0:04:54.120 back to the airport. What do you do? You just 0:04:54.160 --> 0:04:55.600 take it back and they just charge you thirty five 0:04:55.600 --> 0:04:57.760 bucks yah, which is still there is a still a 0:04:57.800 --> 0:05:00.279 massive savings to be had there. Going with the EV 0:05:00.360 --> 0:05:03.359 as opposed to a more traditional traditional vehicle. Last wanted 0:05:03.360 --> 0:05:05.159 to share that I like that because I think there's 0:05:05.200 --> 0:05:07.400 a there's good savings opportunity out there. 0:05:07.440 --> 0:05:09.159 I like that. I've been shocked at the discounts on 0:05:09.200 --> 0:05:12.080 EV's too when you're running a car. And last I 0:05:12.160 --> 0:05:14.680 was stayed at an Airbnb last time, and so I 0:05:15.080 --> 0:05:17.720 just messaged with the folks ahead of time, and I said, Hey, 0:05:18.000 --> 0:05:20.560 do you have a place I can plug in over there? 0:05:20.600 --> 0:05:22.240 Just trickle chargings fine? And they were like, yeah, we'll 0:05:22.279 --> 0:05:24.200 leave an extension cord out through the garage there you go. 0:05:24.240 --> 0:05:26.599 So I was like fueling up for free, yes, and 0:05:26.640 --> 0:05:28.720 so yeah, just ask the question of your host, if 0:05:28.800 --> 0:05:31.320 for a hotel or wherever you're staying, just just check 0:05:31.360 --> 0:05:33.120 and see. Maybe you don't even have to pay for 0:05:33.120 --> 0:05:35.240 a supercharger. Maybe there's some place close by you can 0:05:35.960 --> 0:05:36.680 charge up for free. 0:05:36.720 --> 0:05:39.320 In our case, we don't have it. It's not an Airbnb, 0:05:39.440 --> 0:05:41.560 so there's not going to be the ability to run 0:05:41.560 --> 0:05:43.359 that extension cord out otherwise. 0:05:43.440 --> 0:05:44.880 I don't know. Man, Did I tell you that go 0:05:44.920 --> 0:05:46.599 to Low's get a tow hundred foot extension cord just 0:05:46.600 --> 0:05:48.160 like tapp into this house near behind? 0:05:48.200 --> 0:05:50.360 Did I tell you that I literally threw an extension 0:05:50.360 --> 0:05:52.800 cord in the minivan because we rented a plug in 0:05:52.880 --> 0:05:54.960 hybrid for the road trip. Oh okay, and because I 0:05:54.960 --> 0:05:56.920 wanted to have the option wherever we stayed, because we 0:05:56.960 --> 0:05:59.599 stayed at Airbnb's the entire time to be able to 0:06:00.160 --> 0:06:02.960 use the extension. Dude, we absolutely use that extension cord. 0:06:03.000 --> 0:06:08.800 It was a smart thing that Chrysler Pacific, but yeah, 0:06:08.839 --> 0:06:10.720 it was. This is just a piece of advice out 0:06:10.720 --> 0:06:12.880 there for folks to make sure to shop around instead 0:06:12.880 --> 0:06:15.159 of going with the default, even when the default tends 0:06:15.200 --> 0:06:18.200 to be a money saver, like Kayak or Priceline or 0:06:18.200 --> 0:06:21.039 skyscanner one of those sites that I did check. Sometimes 0:06:21.040 --> 0:06:25.080 it pays to go directly to the business's website itself 0:06:25.120 --> 0:06:26.200 and to find the best deal. 0:06:26.200 --> 0:06:29.000 Don't forget Costco's auto rental program as well. It's a 0:06:29.040 --> 0:06:30.800 good place to look. All right, Let's mention the beer 0:06:30.800 --> 0:06:32.960 we're having on this episode, Matt. This is called Marbits 0:06:33.320 --> 0:06:36.720 by Southern Grist. It's a marshmallow IPA. We'll give our 0:06:36.760 --> 0:06:39.200 thoughts later. Should be interesting, Yes we will, all right. 0:06:39.200 --> 0:06:40.720 If you have a money question, we'd love to hear 0:06:40.720 --> 0:06:42.080 from you, just go to how to money dot com 0:06:42.120 --> 0:06:45.039 slash ask read the instructions or record your question on 0:06:45.040 --> 0:06:47.400 the voicemail app of your phone. Email it over to 0:06:47.480 --> 0:06:50.320 us at how to Moneypod at gmail dot com. We 0:06:50.320 --> 0:06:51.680 want to hear from you. Hopefully we can take your 0:06:51.720 --> 0:06:54.000 question next week on the show. Matt, let's get to 0:06:54.200 --> 0:06:58.159 a question specifically about a four oh one K loan 0:06:58.720 --> 0:07:02.520 UH and a nervousness about not being able to pay 0:07:02.520 --> 0:07:03.080 it back in time. 0:07:03.720 --> 0:07:09.359 Hello, Matt and Joel. My name is Nathan Parkinson from Pocatello, Idaho. 0:07:09.560 --> 0:07:13.080 I have a four to oh one k through my 0:07:13.200 --> 0:07:16.840 work right now that I have a four to oh 0:07:16.880 --> 0:07:22.000 one K loan through, and I was thinking about moving 0:07:22.120 --> 0:07:25.440 jobs and one of the places I was planning on 0:07:25.560 --> 0:07:28.640 going to doesn't have a four to oh one K. 0:07:29.920 --> 0:07:36.440 The difference in pay might be at least thirty thousand dollars, 0:07:37.280 --> 0:07:41.040 so I wasn't sure if I can't pay off that loan. 0:07:41.720 --> 0:07:45.000 I've read that sixty to ninety days that you have 0:07:45.080 --> 0:07:48.840 to pay it off or you might get charged on 0:07:48.880 --> 0:07:55.280 your tax taxes. I just wanted to be able to 0:07:55.320 --> 0:07:57.680 find out if I should be looking for a different 0:07:57.760 --> 0:08:01.080 job that actually offers a four o one K loan 0:08:01.400 --> 0:08:04.760 and how I might be able to find something that 0:08:05.480 --> 0:08:07.880 can either get a match or if it doesn't have 0:08:07.920 --> 0:08:11.040 a four to one k loan, how I go about 0:08:11.480 --> 0:08:15.960 getting more into my IRA four oh one k. 0:08:17.280 --> 0:08:20.679 Thanks Matt and Joel. Oh, Nathan's in a tight spot here, Joel, 0:08:20.800 --> 0:08:23.000 I certainly hate to see him not take this job 0:08:23.280 --> 0:08:26.560 that pays a whole lot more because of this decision 0:08:26.560 --> 0:08:29.400 that he's made here in the pasture. Honestly, these are 0:08:29.440 --> 0:08:32.840 the sorts of situations. These are the things we want 0:08:32.880 --> 0:08:36.080 folks to avoid completely, and it's why we tend to 0:08:36.080 --> 0:08:38.640 be against four one k loans because the common refrain 0:08:38.720 --> 0:08:40.400 that you hear when you talk about a four one 0:08:40.440 --> 0:08:42.760 k loan is like, hey, you're just gonna pay yourself back, 0:08:43.760 --> 0:08:45.040 no harm, no foul. 0:08:44.800 --> 0:08:46.880 Even that interest to your paying. Yeah, it's going back 0:08:46.920 --> 0:08:47.120 to you. 0:08:47.800 --> 0:08:51.320 But the assumption is that because of that, I guess 0:08:51.360 --> 0:08:53.440 it's just not that bad. But when you take the 0:08:53.520 --> 0:08:56.320 money out, it's also not in the market, it's not 0:08:56.400 --> 0:08:59.160 growing on your behalf, and then you might end up 0:08:59.160 --> 0:09:02.040 in a situation like Nathan, where you are looking for 0:09:02.280 --> 0:09:04.520 a new job, or maybe even worse, maybe you are 0:09:04.520 --> 0:09:07.440 in a situation where you get laid off and oh 0:09:07.640 --> 0:09:09.320 you know what, that four one k loan, it can 0:09:09.320 --> 0:09:11.600 present a real issue. Yes, you don't have the ability 0:09:11.600 --> 0:09:13.360 to pay it back pretty quickly. 0:09:13.120 --> 0:09:15.480 That's right. Yeah, So the four on k loan, it 0:09:15.559 --> 0:09:17.240 sounds like the easiest way to get money. Hey, it's 0:09:17.240 --> 0:09:20.240 better than a lot of other options. And it might 0:09:20.280 --> 0:09:23.040 be depending on your you know, ability to pay back 0:09:23.040 --> 0:09:24.760 how long it's going to take. But there are a 0:09:24.800 --> 0:09:26.720 lot of potential downsides too. And think about the run 0:09:26.800 --> 0:09:29.480 up we've seen in the market, Matt, what Nathan took 0:09:29.520 --> 0:09:33.840 out not to you know, point into this source spot Nathan, Sorry, 0:09:33.960 --> 0:09:36.920 but like it. The ruin is the market's been up 0:09:36.960 --> 0:09:40.640 like what thirty five percent essentially over the past five 0:09:40.720 --> 0:09:43.600 or six months. So Nathan's right, if he doesn't pay 0:09:43.600 --> 0:09:47.920 this loan back in a timely fashion, he's gonna owe money, 0:09:47.960 --> 0:09:50.160 right because it's going to be treated as a disbursement. 0:09:50.240 --> 0:09:52.600 So I think he said in his email he owes 0:09:52.600 --> 0:09:55.000 about fifty three hundred dollars toward this four O one 0:09:55.080 --> 0:09:57.400 k loan. And so what does that look like, Well, 0:09:57.440 --> 0:10:00.280 it means he's going to pay ordinary income tax on 0:10:00.400 --> 0:10:03.320 that money, as well as a ten percent early would 0:10:03.360 --> 0:10:06.760 draw penalty on top. So I don't think Nathan's fifty 0:10:06.840 --> 0:10:09.400 nine and a half. Because of that, he is gonna 0:10:09.800 --> 0:10:12.880 owe that extra ten percent. And that's I don't know. 0:10:12.960 --> 0:10:16.199 To somebody like me, that feels like Harry Houdini got 0:10:16.200 --> 0:10:18.920 punch Matt. You remember, That's that's how we ended up dying, right, 0:10:19.040 --> 0:10:20.720 was like somebody punched him when he wasn't ready, and 0:10:20.960 --> 0:10:21.160 was it. 0:10:21.160 --> 0:10:22.160 I thought it was like a canniball. 0:10:22.760 --> 0:10:24.400 I thought it was somebody. I think I think it 0:10:24.440 --> 0:10:26.800 was like some young fella, because he would let people 0:10:26.800 --> 0:10:28.720 come punch him as hard as as hard as he 0:10:28.720 --> 0:10:30.480 could during his acts, and they were like, oh, I'm 0:10:30.480 --> 0:10:32.160 going to punch her, and he wasn't. He wasn't ready, 0:10:32.200 --> 0:10:33.439 he wasn't doing his act. It was like the kind 0:10:33.440 --> 0:10:35.080 of sucker punched him exactly exactly. 0:10:35.120 --> 0:10:35.640 I don't like that. 0:10:35.679 --> 0:10:37.600 Of course, he wasn't ready, internal bleeding, all that kind 0:10:37.640 --> 0:10:39.240 of stuff. That's what this feels like to me. 0:10:40.320 --> 0:10:42.520 You probably gotta feel pretty bad about yourself if you're 0:10:42.520 --> 0:10:44.760 the guy that like Initially you're like, yeah, I gotcha, 0:10:44.880 --> 0:10:46.360 but then you're like, oh, I'm. 0:10:46.200 --> 0:10:49.040 Sorry, dude, I killed the greatest musician magician of all time, 0:10:49.160 --> 0:10:52.000 you know, killed the guy. Yeah, Well, in this specifics 0:10:52.000 --> 0:10:54.240 matter here, by the way, because the IRS says that 0:10:54.280 --> 0:10:56.520 you need to pay back this four one K loan 0:10:56.559 --> 0:10:59.439 before you file taxes, and you could even wait until 0:10:59.480 --> 0:11:02.480 October with an extension next year. That'd be fine with 0:11:02.520 --> 0:11:05.600 the IRS. They're okay with that. But your employer likely 0:11:05.640 --> 0:11:09.080 has more stringent requirements in their play in documents, and 0:11:09.120 --> 0:11:11.640 that's what you're really going to want to pay attention to. 0:11:12.040 --> 0:11:14.760 Most plans that you pay back that loan in full 0:11:14.840 --> 0:11:17.319 right when you leave your job with no grace period 0:11:17.640 --> 0:11:19.920 your employer, I don't know, Nathan mentioned like sixty or 0:11:20.000 --> 0:11:22.839 ninety days. Yeah, there's a chance that your employer has 0:11:23.559 --> 0:11:27.320 has that written into those planned documents. But don't count 0:11:27.360 --> 0:11:30.840 your chickens before they hatch. Don't assume this. Make sure 0:11:30.880 --> 0:11:33.360 that that's the case, that that's exactly how your employer 0:11:33.360 --> 0:11:36.959 treats this dispartment disbursement. You want to just make sure 0:11:37.200 --> 0:11:40.000 you're following the letter of the law here, because, like 0:11:40.040 --> 0:11:43.400 we just said, the adverse consequences could be significant, and. 0:11:43.400 --> 0:11:45.920 This is one of those really important things where man 0:11:45.960 --> 0:11:48.280 I would be willing to make a lot of sacrifices 0:11:48.280 --> 0:11:50.839 in order to pay this four K loan back in 0:11:50.920 --> 0:11:54.560 the required time period, Like, for instance, I might even 0:11:54.600 --> 0:11:57.560 be willing to delay taking that new job, if that's 0:11:57.600 --> 0:11:59.760 something you have any control over, in order to pay 0:11:59.760 --> 0:12:01.920 this the sucker off, maybe even take out like I would. 0:12:01.920 --> 0:12:04.800 I think I would certainly be willing to drain my 0:12:04.880 --> 0:12:08.680 emergency fund, maybe even borrow from a helock in order 0:12:08.720 --> 0:12:11.640 to avoid that negative outcome, and then of course make 0:12:11.679 --> 0:12:14.080 a plan to replenish that e fund, make a plan 0:12:14.160 --> 0:12:16.360 to pay back that he loock eight like as soon 0:12:16.400 --> 0:12:18.640 as possible. I certain I don't think I would go 0:12:18.720 --> 0:12:20.280 as far as like taking on a payday loan. Joel. 0:12:20.760 --> 0:12:22.480 Yeah, that feels a little a little too far, But like, 0:12:22.520 --> 0:12:25.280 the only way I'm doing that, Matt, is if there's 0:12:25.320 --> 0:12:27.120 some mob boss who's starting to break my knee caps 0:12:27.120 --> 0:12:28.640 And in that case, I'd probably take out a payday loan, 0:12:28.679 --> 0:12:29.040 But that's it. 0:12:29.080 --> 0:12:30.559 You might want to consider it, and. 0:12:30.520 --> 0:12:31.960 I'm not in that kind of trouble right now. 0:12:32.400 --> 0:12:34.240 I don't think I would do this, But depending on 0:12:34.280 --> 0:12:37.720 your situation, you might even want to, like maybe borrow 0:12:37.800 --> 0:12:41.280 from a relative with the assurances. And this is obviously 0:12:41.640 --> 0:12:44.640 assuming that you are taking this very seriously and you 0:12:44.800 --> 0:12:47.000 plan to not borrow from yourself like this every again, 0:12:47.040 --> 0:12:49.240 but just make assurances to them that they that you 0:12:49.280 --> 0:12:51.800 will be paying them back regularly over the coming year 0:12:51.880 --> 0:12:55.520 or so. But man, just that the difference in your 0:12:55.559 --> 0:12:58.720 salary right there, that thirty thousand dollars is significant, and 0:12:58.760 --> 0:13:02.120 I wouldn't let the four o one k loan keep 0:13:02.200 --> 0:13:05.920 you tethered to that significantly lower paying job. 0:13:06.000 --> 0:13:06.200 You know. 0:13:06.280 --> 0:13:08.360 I think where there's a will, there's a way. But 0:13:08.640 --> 0:13:11.840 certainly make it a high priority to completely eliminate this. 0:13:12.160 --> 0:13:15.000 Yeah, I mean, it'd be it'd be kind of like 0:13:15.720 --> 0:13:17.680 a self inflicted wound to say, I'm gonna stay at 0:13:17.720 --> 0:13:19.880 this job if I really want to move on, and 0:13:19.880 --> 0:13:21.480 I'm going to get paid a lot more just because 0:13:21.520 --> 0:13:23.679 of this four one k loan. There's there's got to 0:13:23.720 --> 0:13:26.600 be a way. And you mentioned some good methods, Matt, 0:13:26.640 --> 0:13:29.240 of finding the money to get rid of this four 0:13:29.280 --> 0:13:31.960 one k loan so that you're not, you know, taking 0:13:32.040 --> 0:13:34.720 keeping that money out of your four one k forever. Yeah, 0:13:34.760 --> 0:13:36.480 and that you're also not paying the tax and penalty, 0:13:36.480 --> 0:13:40.120 which is a big deal. You also mentioned, Nathan, that 0:13:40.600 --> 0:13:43.319 you're holding out for another job or for an employer 0:13:43.320 --> 0:13:45.880 that offers a four to one K, and. 0:13:45.840 --> 0:13:47.920 Which I will say, by the way, to reiterate, we're 0:13:47.920 --> 0:13:50.840 talking about a four one K loan, not because at 0:13:50.880 --> 0:13:52.280 one point he said, what if the new one doesn't 0:13:52.280 --> 0:13:55.160 have a four one K loan? I think maybe he misspoke, 0:13:55.200 --> 0:13:56.880 and I think he's specifically talking about a four one 0:13:56.960 --> 0:13:59.640 K plan. Yeah, specifically, especially one with a match. 0:13:59.679 --> 0:14:01.120 And you do have to consider that, you know, you 0:14:01.160 --> 0:14:04.400 and I talked regularly, Matt about the secondary benefits that 0:14:04.400 --> 0:14:08.679 employers offer, and those benefits had up incredibly some you know, 0:14:08.720 --> 0:14:13.839 some employers offering health insurance with a significant discount where 0:14:13.840 --> 0:14:15.680 they'll pay like eighty or ninety percent of the premiums 0:14:15.720 --> 0:14:18.000 for you and straight up free. Yeah. 0:14:18.040 --> 0:14:20.040 I got friends that are having babies and everything is 0:14:20.080 --> 0:14:23.200 just like completely covered at super fancy employers. Has me 0:14:23.600 --> 0:14:26.160 just weeping those Catillac health care plans. Knowing how much 0:14:26.160 --> 0:14:28.920 money IVE spent on labor and delivery over my lifetime. 0:14:28.960 --> 0:14:32.360 I know, as self employed individuals the healthcare stuff. 0:14:32.120 --> 0:14:33.680 Had the privilege of being able to do that. 0:14:33.840 --> 0:14:36.200 Yes, yes, so those things really matter and a four 0:14:36.240 --> 0:14:39.440 one K plan is incredibly helpful. I think not having 0:14:39.480 --> 0:14:42.160 access to a workplace retirement account would be a bummer, 0:14:42.720 --> 0:14:45.240 no match, no ability to shovel chunks of money into 0:14:45.280 --> 0:14:48.200 a tax advantaged account. That's that's a downer. It's a 0:14:48.240 --> 0:14:50.280 downer for anyone who wants to be smart with their money, 0:14:50.320 --> 0:14:52.360 Like you're looking for that in an employer and you're 0:14:52.400 --> 0:14:54.040 hoping that they're competitive in the right. 0:14:54.160 --> 0:14:56.240 But it's not a deal breaker though, No, especially especially 0:14:56.320 --> 0:15:00.000 given the difference in income. So and here's the other 0:15:00.080 --> 0:15:01.720 thing too that I want to address, Like, you can 0:15:01.760 --> 0:15:05.800 still get really wealthy, Nathan with just an IRA. Yeah, yeah, so. 0:15:05.840 --> 0:15:07.760 I could be a roth Ira millionaire in what thirty 0:15:07.800 --> 0:15:08.840 six years? Thirty five? 0:15:09.040 --> 0:15:11.880 Well, at seven and a half percent, it's thirty five years. 0:15:12.240 --> 0:15:15.120 I was way off. It's a here right there. That's 0:15:15.320 --> 0:15:18.120 pretty incredible in my opinion. And that's just the I mean, 0:15:18.680 --> 0:15:20.440 I know for a lot of folks it might be 0:15:20.520 --> 0:15:23.800 it it's difficult for them to max out an IRA 0:15:24.080 --> 0:15:26.800 every single year as opposed to a four to one K. 0:15:27.160 --> 0:15:29.560 You can become a four to one K millionaire in 0:15:29.680 --> 0:15:32.760 as little as twenty years. But at the same time, 0:15:33.040 --> 0:15:35.240 who's maxing out there four one k? I know some 0:15:35.280 --> 0:15:36.880 folks are, but there's a lot of folks for saying 0:15:37.200 --> 0:15:41.000 twenty three thousand, five hundred dollars. Dudes, I'm sorry, but 0:15:41.200 --> 0:15:43.320 I ain't got that kind of money setting around, right. 0:15:43.360 --> 0:15:45.120 That'd be a third of my income, or that'd be 0:15:45.320 --> 0:15:47.760 half of my income, and that seems impossible. 0:15:47.760 --> 0:15:51.480 But it's still possible, even just with the boring old 0:15:51.560 --> 0:15:53.040 IRA at your disposal. 0:15:53.400 --> 0:15:55.600 And well, there's that, but let's just say this. Let's 0:15:55.600 --> 0:15:59.280 say Nathan plans to invest at least half of just 0:15:59.320 --> 0:16:01.840 the raise that he's getting, a thirty thousand dollars raise. 0:16:02.320 --> 0:16:04.920 That's hey maxing out right there, a roth IRA every 0:16:04.960 --> 0:16:07.200 year just became super easy. If he's got a high 0:16:07.200 --> 0:16:10.680 deductible health care plan through the employer and HSA, he 0:16:10.720 --> 0:16:12.400 can max that out too, And then he's got more 0:16:12.440 --> 0:16:15.720 money left over toss into a taxable brokerage account as well. 0:16:16.000 --> 0:16:18.080 So he's just got a whole bunch of accounts at 0:16:18.120 --> 0:16:20.920 his disposal. It does not have to be the workplace 0:16:20.960 --> 0:16:23.720 retirement account, the four to one K, or the TSP 0:16:24.360 --> 0:16:27.280 at other employers, or a four to fifty seven B 0:16:27.440 --> 0:16:29.640 like it can be some of these other accounts that 0:16:29.680 --> 0:16:34.280 are widely accessible to almost everyone. It doesn't have to 0:16:34.280 --> 0:16:36.560 be a tax advantage account through your employer. I think 0:16:36.840 --> 0:16:40.560 that makes it easy because it's deducted from your paycheck. 0:16:40.840 --> 0:16:43.400 It's automatic, right, and you don't really have to think 0:16:43.400 --> 0:16:44.600 about it. That's one of the perks. 0:16:44.640 --> 0:16:45.560 You don't really feel it. 0:16:45.680 --> 0:16:47.480 That's right. So you're going to have to make a 0:16:47.560 --> 0:16:51.240 proactive plan to save for yourself in some of these accounts, 0:16:51.240 --> 0:16:56.040 including probably in all likelihood, automatic contributions monthly from your 0:16:56.080 --> 0:16:58.840 bank account towards some of these accounts. I think you 0:16:58.840 --> 0:17:01.080 can just you can still do an incredible job saving 0:17:01.080 --> 0:17:03.600 for your future without an employer plan. It just takes 0:17:03.640 --> 0:17:06.840 more intentionality and it falls more directly on your shoulders. 0:17:06.840 --> 0:17:09.879 But I wouldn't let that, especially especially with a massive 0:17:09.920 --> 0:17:12.159 pay increase like this. I would not let that be 0:17:12.800 --> 0:17:15.320 a deal breaker by any stretch of the imagination. 0:17:15.600 --> 0:17:17.959 Sure, and again we're talking about investing in your ability 0:17:18.000 --> 0:17:20.959 to grow wealth here, but let's make sure that that, Nathan, 0:17:21.119 --> 0:17:23.359 that your first order of business is one hundred percent 0:17:23.400 --> 0:17:25.240 to be able to pay off that for win k 0:17:25.359 --> 0:17:28.040 loan and honestly just to be able to man, let's 0:17:28.080 --> 0:17:30.679 just stay away from that altogether in the future as well. 0:17:30.840 --> 0:17:33.280 We've got more money questions to get to, Matt, including 0:17:33.880 --> 0:17:36.879 a listener who wants to limit their grocery and restaurants spending. 0:17:36.920 --> 0:17:39.639 We'll get to that and more. We'll get to that 0:17:39.640 --> 0:17:48.959 in a whole lot more right after this. All right, 0:17:49.000 --> 0:17:50.800