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

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Speaker 1: and today we're answering your listener questions. Yeah, man is June,

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Speaker 1: and everybody knows that on the thirteenth of June. Every

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Speaker 1: single year we answer your listener questions. That's not always

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Speaker 1: the case, but that happens. That is what we're doing today,

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Speaker 1: this twenty second year of listening listener questions that we

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Speaker 1: are from the Middle Ages. Hey, we gotta fine interesting

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Speaker 1: ways of introducing since we've had a lot of these

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Speaker 1: in our hear you. The next Out of Money episode

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Speaker 1: commences now, but we are going to talk about budgeting specifically,

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Speaker 1: We've got a listener who has a question on how

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Speaker 1: to go about breaking down specific line item within his budget.

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Speaker 1: We're gonna take one abouts ramping up a side hustle

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Speaker 1: into maybe a full fledged business, finding ways to invest

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Speaker 1: that money. As well as a listener who is a teacher.

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Speaker 1: She's got a pension. You don't really hear about those anymore,

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Speaker 1: and so I'm excited to get to her question as well,

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Speaker 1: plus two others. So the pension question, Matt reminds me

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Speaker 1: of the Will Forte show The Last Man on Earth,

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Speaker 1: which I think only watched a couple episodes of but

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Speaker 1: I've never seen a single episode. Though I do love

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Speaker 1: Will Forte. He's hilarious, dude, He's very funny. But they

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Speaker 1: are this listener might be the last person on earth

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Speaker 1: with a pension. They're they're so rare. That's well, we

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Speaker 1: don't talk about the last teacher in the United States

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Speaker 1: to have gotten a pension offer turn not not actually true,

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Speaker 1: but yeah, they are so much more infrequent. Not many

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Speaker 1: people have access to a pension. And we'll talk about

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Speaker 1: kind of how this teacher should be thinking about it

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Speaker 1: a little bit later on. But Matt, before we get

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Speaker 1: to that, I just wanted to mention how ridiculous have

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Speaker 1: some appliances gotten in our modern era. I feel like

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Speaker 1: we I don't know. I was just looking online the

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Speaker 1: other day at some refrigerators, and some of these refrigerators, man,

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Speaker 1: costs like four thousand dollars because their WiFi enabled, and

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Speaker 1: they've kind of that's not just sens on the doors.

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Speaker 1: Actually exactly the fancy okay exactly. I thought you were

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Speaker 1: saying there that much because that's just how much they cost. No, No,

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Speaker 1: so there's literally just I feel like copious upgrades that

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Speaker 1: have been made to some of the machines, making them

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Speaker 1: like way smarter than they actually need to be, And

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Speaker 1: I don't even know that it's improving our lives in

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Speaker 1: any meaningful way. So it feels like we're spending double

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Speaker 1: on the fridge and we're buying maybe some of these

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Speaker 1: features that we didn't necessarily expect or even want, Like

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Speaker 1: I don't want my fridge to have. Gonna ask, are

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Speaker 1: you gonna get one of those fancs? Of course not,

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Speaker 1: I mean one do you'll content with the fridge I

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Speaker 1: have right now? But to like who needs it? Got it?

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Speaker 1: I didn't know if you're responsible for getting a new

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Speaker 1: fridge for the new place. Is it coming with the fridge?

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Speaker 1: It comes complete with a refrigerator there. So it's funny

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Speaker 1: that you actually does can't see fridge, isn't it. Yeah,

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Speaker 1: you're kind of making fun of me because we basically

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Speaker 1: did perfect in the fancy fridge. You didn't want to

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Speaker 1: buy it on didn't go and buy it. But what

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Speaker 1: is it some cost fallacy like I was included in

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Speaker 1: the house, and so I guess effectively we did pay

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Speaker 1: for a fancy fridge. You can get the market isn't perfect.

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Speaker 1: Okay it was. I wasn't able to snap my fingers

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Speaker 1: and say, this is not something I want to maintain,

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Speaker 1: that I want to keep around. They're like the costs

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Speaker 1: of friction in your life. And if I could, like

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Speaker 1: I said, if I could magically stop my fingers and

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Speaker 1: downgrade the fridge, I think I would. I don't think

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Speaker 1: ours comes with WiFi. I pray that it doesn't. Okay,

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Speaker 1: I hope. I was going to say, imagine having imagine

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Speaker 1: having to like free set the router on my fridge.

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Speaker 1: Do I have to turn my my fridge off for

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Speaker 1: five seconds and plug it and plug it back insid

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Speaker 1: it works like your WiFi? Annoying? Uh, inheriting more technological

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Speaker 1: problems is not something I also want to include when

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Speaker 1: it comes to basic kitchen appliances. But I agree, hopefully

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Speaker 1: that is not something that turns into a headache. I mean,

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Speaker 1: I remember even just what ten years ago. I remember

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Speaker 1: friends talking about having a suite of matching kitchen appliances,

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Speaker 1: and I don't feel like that was a thing twenty

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Speaker 1: years ago, but it became a thing about ten years ago,

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Speaker 1: was it? Yeah? Imagine like like I don't think people

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Speaker 1: cared as much mid century stuff. Everything matched. It was

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Speaker 1: all like like it was all pistachio green, you know,

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Speaker 1: like at least in the ads that you're used to saying.

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Speaker 1: I doubt it was actually like that in real life,

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Speaker 1: in real life, but I think I think I don't.

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Speaker 1: I don't think we had the same exact matching brands

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Speaker 1: and everything. And when something went bad, you didn't replace

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Speaker 1: all of them because who definitely appliance went bad and

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Speaker 1: now you didn't replace it. You had a repairman show

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Speaker 1: up and they actually fixed the daything instead of replacing.

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Speaker 1: Although now it's really really expensive to repair appliances. But

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Speaker 1: it's one of those things where maybe it's just kind

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Speaker 1: of our expectations have risen and it's costing us a

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Speaker 1: lot more money. And if we as consumers could lower

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Speaker 1: our expectations just a little bit, not necessarily demand WiFi

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Speaker 1: in our fridges or demand that all of our appliances

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Speaker 1: be a part of the exact same suite, I think

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Speaker 1: we would be able to save more money. We absolutely

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Speaker 1: be wasting it less on stuff we don't need. Yeah,

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Speaker 1: this is like an anti consumption p s A basically

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Speaker 1: is what we're saying, Like it makes me think of

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Speaker 1: the talk or the quote where Warren Buffett was talking

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Speaker 1: to a bunch of college graduates and he said, you

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Speaker 1: live life now better than Rockefeller did a hundred years ago.

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Speaker 1: Like you have the ability to watch the World Series,

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Speaker 1: you stay warm in the winter, you stay cool in

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Speaker 1: the summer. You can virtually do anything in the entire

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Speaker 1: world that is not something the richest man on the

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Speaker 1: planet could do a hundred years ago. But because it's

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Speaker 1: all relative, and we see that something is available to us,

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Speaker 1: or in your case, you saw that for row on

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Speaker 1: sale at Costco and you thought, maybe for a second,

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Speaker 1: maybe for a split second, you thought, oh, those look nice,

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Speaker 1: But then you're hot, a money conscience crept up on you.

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Speaker 1: I'm like, what hit you over the head? Refrigerator do

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Speaker 1: for me as an individual, Yeah, would make my life

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Speaker 1: easier or better. Your beers could be cool that the

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Speaker 1: little temperature trying exactly. It seems that is what we're

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Speaker 1: trying to move away too. It seems a little silly,

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Speaker 1: So all right, let's move on, Matt. The beer that

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Speaker 1: we're having on this episode is called Terrorists Bulba. It's

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Speaker 1: an extra hopy yale by Brasserie de La Sen out

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Speaker 1: of Brussels and yes this is a Belgian hoppy beer.

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Speaker 1: We will give our thoughts at the end of the episode,

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Speaker 1: but for now, let's get onto the subject at hand.

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Speaker 1: We're taking listener questions and for folks who have a

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Speaker 1: question they want to submit for a future ask HTM episode,

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Speaker 1: we would love to hear it. And actually we get

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Speaker 1: a lot of investing questions, but I know our listeners

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Speaker 1: have such a wide range of money questions. We would

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Speaker 1: love to hear those other more idiosyncratic maybe money questions

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Speaker 1: that you have, and you can submit those at how

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Speaker 1: to money dot com slash ask. We'd love to take

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Speaker 1: it on the next ask HTM episode, but let's kick

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Speaker 1: it off, Matt. Let's get to our first question. This

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Speaker 1: one is about budgeting. Hi, my name is Joe. I'm

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Speaker 1: a forty six year old mary Man who has two kids.

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Speaker 1: My wife and I are both teachers. I feel that

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Speaker 1: we are wasting a lot of money at too many

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Speaker 1: different grocery type businesses, Target, Walmart, Sam's, Costco, all the etcetera.

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Speaker 1: My question is when budgeting isn't necessary to break down

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Speaker 1: each expense when you go to a store. For example,

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Speaker 1: we go to Target and buy lunchables for dinner and

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Speaker 1: a few other items, but we also buy some things

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Speaker 1: for a day to day groceries that we've meal plan

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Speaker 1: for when budgeting. Do I need to separate all these things?

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Speaker 1: Thank you? Alright, let's kick things off with a practical

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Speaker 1: budgeting question. Uh. I feel like this is a great one, because,

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Speaker 1: like we say here on the show, basically everyone out

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Speaker 1: there needs to be needs to be budgeting, like either

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Speaker 1: because you find yourself spending a little more than you'd

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Speaker 1: like to every month, or it's because you're an uber

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Speaker 1: frugal tight wad and you find yourself not spending enough

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Speaker 1: money every single month. We don't want you to deprive

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Speaker 1: yourself of the things in life that bring you joy. Instead,

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Speaker 1: we want to ensure that you're able to spend money

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Speaker 1: in ways that align with your values, and a budget

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Speaker 1: is basically a game plan that gets you there. The

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Speaker 1: only people who don't need budgets are those who claim

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Speaker 1: that they're perfectly rational and who also don't have any emotions,

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Speaker 1: which might mean that you're a sociopath. But for everyone

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Speaker 1: else out there, budgeting is the way to go. So Joe,

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Speaker 1: I'm glad that that is now a discipline, that that

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Speaker 1: that is a practice that you're implementing in your life. Yeah,

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Speaker 1: and Matt, you said, for those who claim they're perfectly rational,

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Speaker 1: I would like to meet the person who claims that

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Speaker 1: there perfectly rational. And I'm sure we could find some

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Speaker 1: ways in which they are not. I like to think

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Speaker 1: of myself as rational, but we all do, I know,

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Speaker 1: And I know in reality everybody says that. Everyone says,

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Speaker 1: oh that know. I I don't allow advertising to affect

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Speaker 1: Oh oh no, I keep a perfectly levelhead when and

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Speaker 1: expense pops, you know, like all these things that derail

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Speaker 1: us in our money. I think they're there president in

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Speaker 1: all of our lives. Yes, I am self aware enough

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Speaker 1: to know that I am not totally rational and that

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Speaker 1: even sometimes a fancy friendge with a cool screen kind

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Speaker 1: of grabs my attention and I'm like, okay, I get it,

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Speaker 1: but you can come I'm not going to do it.

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Speaker 1: You can come over to the house and double tap. Okay. Um.

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Speaker 1: But yeah, well, we're talking about budgeting. We're talking about

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Speaker 1: Joe's question, and it's wording to mention that we're all different.

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Speaker 1: And so yeah, Joe is asking, you know, whether they

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Speaker 1: need to separate individual items on their budget as they're

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Speaker 1: tracking their spending. And I think the bad news is

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Speaker 1: that that, unfortunately, there isn't necessarily a right or a

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Speaker 1: wrong answer so much if it depends on who's asking

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Speaker 1: and how they handle their money. So, you know, just

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Speaker 1: like how all of our budgets are, they're all different

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Speaker 1: because we spend money differently, I think the same thing

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Speaker 1: can be true of how it is that we go

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Speaker 1: about budgeting. There's not necessarily a hard and fast rule

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Speaker 1: that works perfectly for every single human. It's not just

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Speaker 1: the contents of the budget that are customized to us

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Speaker 1: as individuals. It's the budgeting methodology that is what you're saying.

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Speaker 1: The tactics are going to change based on who you

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Speaker 1: are and how you think, and so we can all

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Speaker 1: take different approaches to budgeting. But what's important is that

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Speaker 1: we take the approach that is going to work for

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Speaker 1: us as individuals. If we try to take an approach

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Speaker 1: that maybe works for a friend and doesn't necessarily fit

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Speaker 1: our our lifestyle or our personality, we might find ourselves struggling.

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Speaker 1: You know, we want to make sure it works for

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Speaker 1: for how we live. And so, yeah, you have to

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Speaker 1: take your partner or your spouse into consideration as well.

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Speaker 1: And so we're all about sustainable budgeting, choosing the path

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Speaker 1: that choosing the kind of budget, and then the methodology

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Speaker 1: for tracking and implementing that budget that actually works for

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Speaker 1: how you live totally. Yeah, So that being said, it

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Speaker 1: sounds like budgeting for different line items like that might

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Speaker 1: become this cumber cumbersome, in time consuming task Joe. That

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Speaker 1: would immediately lead to budget burnout and you dropping this

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Speaker 1: discipline altogether. So that doesn't sound like a great method. Uh.

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Speaker 1: And and even if you're someone who is all about

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Speaker 1: the details, you want to know all the fine points,

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Speaker 1: it would probably still be best to keep things simple

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Speaker 1: and then over time you can refine your spending categories

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Speaker 1: as you develop more of an understanding of your monthly expenses.

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Speaker 1: Based on the fact that it seems like this is

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Speaker 1: a new realization, the fact that you're spending more at Costco,

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Speaker 1: Sam's target stores like that, it makes me think that

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Speaker 1: maybe this is something that y'all have only recently started tracking.

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Speaker 1: And so I think it can be helpful to get

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Speaker 1: a few months maybe under your belts before you drastically

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Speaker 1: change your your your tactics and so, for instance, if

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Speaker 1: you're budgeting for the first time, you might want to

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Speaker 1: keep all of your expenses related to food within the

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Speaker 1: same category. But then eventually restaurants and breweries maybe if

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Speaker 1: they can create their that can create like a separate

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Speaker 1: entertainment category. But initially, I think it can be helpful

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Speaker 1: if you keep a lot of these expenses within the

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Speaker 1: same category, just for simplicity's sake. Yeah, I think that's

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Speaker 1: what some people. Why some people revolt again against budgets

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Speaker 1: to begin with, is because they try something that's overly

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Speaker 1: complex and it takes too much time. It's too much effort,

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Speaker 1: and it feels constraining because they are spending too much

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Speaker 1: time on their budget going through receipts to put things

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Speaker 1: in particular categories. And then they're like, yep, screw it,

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Speaker 1: budgets aren't for me. And I get that reaction because

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Speaker 1: if that's what I was doing, I wouldn't be I

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Speaker 1: wouldn't do budgeting either, because it would be a big

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Speaker 1: giant pain, And so for me, simple is better, and

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Speaker 1: I think that's the case for for a whole lot

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Speaker 1: of people. Like if if if I was in Joe's situation,

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Speaker 1: I would just plan on all routine purchases made at

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Speaker 1: grocery stores and warehouse clubs. I put them in the

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Speaker 1: same category for the sake of keeping things simple. And

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Speaker 1: I'm guessing you know it probably seems like you're spending

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Speaker 1: a ton of those stores, Joe, and you probably are

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Speaker 1: if it includes stuff like cleaning supplies, over over the

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Speaker 1: counter medicines, let's say, other household items. Maybe you're going

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Speaker 1: to the beach and you pick up a set of

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Speaker 1: beach towels or whatever, which you are prone to do

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Speaker 1: at Costco right as you see the sales as you

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Speaker 1: walk in. But you and still I see a lot

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Speaker 1: of value in keeping all those purchases lumped together within

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Speaker 1: maybe that category of groceries or whatever you decide to

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Speaker 1: call it. I mean, I know that our family weren't.

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Speaker 1: We're just not going to break things down into individual

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Speaker 1: items on receipts and put them into separate categories. That

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Speaker 1: sounds like enough work that I'd be liable to quit

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Speaker 1: trying it altogether. And that means said, though, let's say

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Speaker 1: it's a bigger individual purchase. Let's say you're buying a

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Speaker 1: bigger electronics item like a television. Maybe ring that up separately. Uh,

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Speaker 1: since it's a larger, more irregular expense. Yeah, you should.

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Speaker 1: You shouldn't be buying a new TV every month, Yeah,

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Speaker 1: because you're like, why is my grocery bill? So I, Oh,

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Speaker 1: I buy a TV every month. It doesn't need to

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Speaker 1: be a part of the regular budget exactly. So so

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Speaker 1: every once in a while, if you're buying something that's

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Speaker 1: particularly large or unique than I would, I would definitely

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Speaker 1: make sure to mark that out. So yeah, I look

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Speaker 1: out for those purchases. But ultimately, I think you are

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Speaker 1: more liable to ditch your budget, uh in short order

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Speaker 1: if you try to get too complicated with it. Yeah,

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Speaker 1: it seems like he's trying to come through more detail

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Speaker 1: as then seems prudent at this point, Like you're talking

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Speaker 1: about the difference between buying lunchables like pre prepared foods

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Speaker 1: versus ingredients for meal planning. I mean, in our household,

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Speaker 1: those absolutely go in the same category that like that's groceries,

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Speaker 1: even though one is slightly more convenient than the other.

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Speaker 1: You know, we've talked about my family budget before and again,

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Speaker 1: even though we talked earlier about how it depends on

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Speaker 1: you and what it is that you're able to maintain.

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Speaker 1: I we can link to the excel file where I've

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Speaker 1: shared my family budget before, at least sort of the framework,

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Speaker 1: and I've kind of cleared out all of our personal information.

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Speaker 1: But you know, you might find that to be a

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Speaker 1: helpful resource for you. But we'll also link to mint

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Speaker 1: why nap It costs nine dollars a month, But that

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Speaker 1: can also be a great resource for folks who are

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Speaker 1: looking to budget for the first time. Dollar Bird. That

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Speaker 1: is actually another app that we've mentioned before. It's it's

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Speaker 1: pretty cool and the actual budgeting it takes place kind

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Speaker 1: of more on a you know, within a calendar format,

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Speaker 1: and so if you live and die by the calendar,

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Speaker 1: maybe that's the way to go for you. So we'll

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Speaker 1: make sure to link to some of these resources within

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Speaker 1: the show notes for this episode, no doubt. All right, Matt,

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Speaker 1: we got more questions to you to including one about

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Speaker 1: investing more into a side hustle to get it off

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Speaker 1: the ground. We'll talk about that and more right after

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Speaker 1: this break. All right, we are back and we are

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Speaker 1: taking listener questions. Joel, let's get to this next one

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Speaker 1: that has to do with roth contribution limits. Hi, Matt

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Speaker 1: and Joel my name is Dana. I am from San Antonio, Texas,

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Speaker 1: and I'm a big fan of beers and biking and

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Speaker 1: dollar bills, so I've been really enjoying your podcast. I

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Speaker 1: have a question for y'all. My work offers a four

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Speaker 1: seven B with both pre tax and ROTH options. I

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Speaker 1: can contribute to one, both, or neither. Obviously, I chose

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Speaker 1: the four fifty seven B ROTH option so that I

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Speaker 1: wouldn't have to pay taxes down the road. I started contributing,

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Speaker 1: contributing five a month in order to reach the six

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Speaker 1: thousand dollar ROTH maximum annual limit. However, I started researching

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Speaker 1: and found out I can actually contribute up to five

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Speaker 1: dollars in this four fifty seven B RATH, and it

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Speaker 1: seems like I can also contribute six thousand to a

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Speaker 1: regular ROTH IRA. I wanted to reach out and see

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Speaker 1: if this is correct and would it be wise to

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Speaker 1: max out both of these accounts as a ROTH or

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Speaker 1: should I be balancing a mixture of pre and post

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Speaker 1: tax accounts. Any hope is appreciated. Love what you guys

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Speaker 1: are doing. Have a great one, Dania, A great question.

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Speaker 1: You You're totally our kind of person, so thank you

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Speaker 1: for beer, bikes and the dollar bill, So I think, yeah,

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Speaker 1: we get along for sure, and we we love that

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Speaker 1: you chose the rath option in your four seven B.

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Speaker 1: But you're right. The contribution limits for a roth ira

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Speaker 1: are six thousand dollars, which isn't as much as we

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Speaker 1: would like. But the contribution limits for a workplace account

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Speaker 1: like a four one K or a four fifty seven

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Speaker 1: B like you have and like you said, are twenty

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Speaker 1: thousand for this year. And the killer thing is that

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Speaker 1: you can do both if you've got that kind of

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Speaker 1: know that. There aren't many people out there looking in

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Speaker 1: the statual way close to in a single year. But

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Speaker 1: if Dana is one of those folks, she's she's got

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Speaker 1: the ability to make it happen. She's a frugal light,

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Speaker 1: and she's a super saver. You know, you you just

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Speaker 1: might find yourself able to accomplish such a lofty goal.

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Speaker 1: We can at least kind of make this a long

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Speaker 1: term goal and try to accomplish this year's down the road.

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Speaker 1: But the fact that Dana has this question, you know,

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Speaker 1: the fact that it's even on a radar is an

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Speaker 1: awesome thing. Uh, And we're glad that that's something you're

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Speaker 1: striving after um and I think the reason there might

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Speaker 1: be some confusion here probably stems from the fact that

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Speaker 1: most folks, including us, we casually refer to the rath,

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Speaker 1: but what we're specifically talking about is the rath I

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Speaker 1: ra A, but Rath four own case and RATHFT seven

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Speaker 1: b s. These are becoming more common, and so we'll

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Speaker 1: do our best to make sure that we are being

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Speaker 1: more specific. We don't want to trip folks up with

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Speaker 1: the semantics. We want to want folks to know exactly

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Speaker 1: what we're talking about. We're talking about raths exactly. Yeah,

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Speaker 1: so you're trying to mentionectively every time from here on out,

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Speaker 1: because you're right. It does probably get confusing if you're like, wait,

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Speaker 1: they said Ross have a six thousand dollar contribution limit,

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Speaker 1: but from what I'm reading, I've got a whole lot

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Speaker 1: more ability to because you're four o K and so yeah,

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Speaker 1: sorry for the confusion. Retirement acounts are obviously just a

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Speaker 1: jumble of numbers and letters to it's It can be

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Speaker 1: confusing to begin with, so we'll try not to. There

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Speaker 1: could be some better description that better better titled programs

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Speaker 1: that you can invest in with what your work off

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Speaker 1: the I r s can use some marketing help for sure.

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Speaker 1: And you know, when it comes to contributing to a

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Speaker 1: WRATH or a traditional on both of these accounts, whether

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Speaker 1: you're talking about an IRA or your workplace retirement account,

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Speaker 1: it largely depends on your specific situation. For instance, if

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Speaker 1: you have student loans and you're on the path to

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Speaker 1: achieving student loan forgiveness, while contributing to a traditional account

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Speaker 1: will help lower your necessary payments in the here and

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Speaker 1: now and it's gonna allow you to qualify for more

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Speaker 1: forgiveness at the end of the day when when that's right.

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Speaker 1: So but if you're, let's say, in an incredibly high

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Speaker 1: income tax bracket, it's probably also worth considering a mixture

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Speaker 1: of RATH and traditional contributions. But if that's not the case,

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Speaker 1: we really do prefer that you, Dana, and that most

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Speaker 1: other folks out there, go with the RATH option. That

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Speaker 1: that's kind of the knee jerk response, whether it's with

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Speaker 1: an IRA or in your workplace account, because it's hard

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Speaker 1: to know where tax rates are going to be in

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Speaker 1: the future, but the RATH ensures that you don't really

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Speaker 1: have to worry about that at all because you're taking

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Speaker 1: the tax hit, and how hopefully it's a minor tax

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Speaker 1: it because of where you fall in the tax brackets.

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Speaker 1: But for most folks, the RATH just seems to make

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Speaker 1: the most sense tax wise, and we actually, you know,

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Speaker 1: we do know though, that there is a likelihood that

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Speaker 1: rates will go up in the not too distant future.

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Speaker 1: The Tax Cutting Jobs Act is set to expire at

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Speaker 1: the end of and we are not sure if it's

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Speaker 1: gonna be reinstated. You know, it depends on who's in office,

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Speaker 1: it depends on where the current political winds are blowing.

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Speaker 1: But current income tax breaks that we're getting at this

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Speaker 1: very moment will likely be gone in just a few

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Speaker 1: years time, and so we would recommend for you and

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Speaker 1: everyone else out there to make make hay while the

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Speaker 1: tax sun is shining. Go ahead and pay that tax now,

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Speaker 1: sock away as much as you can for your future

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Speaker 1: within RATH collectively collective WRATH accounts, regardless of we're talking

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Speaker 1: about your IRA A or your four one K, but

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Speaker 1: make sure that you are maxing those out as much

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Speaker 1: as possible, because let's be honest, Dana is also she

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Speaker 1: She's gonna be crushing at decades from now, and so

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Speaker 1: there's a higher likelihood too, that she's gonna be owing

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Speaker 1: more because she's just gonna be in a higher tax

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Speaker 1: bracket and she's asking these kind of questions now at

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Speaker 1: this stage in the game, I doubt that she's gonna

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Speaker 1: be making less in the future. Well, I guess my

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Speaker 1: one question, Matt is rooting for Dana, of course, But

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Speaker 1: when you run for the highest office in the land

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Speaker 1: and you get elected, what's gonna happen. What are you

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Speaker 1: gonna do with tax rates? I would not tax income

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Speaker 1: at all, um, sales, tax only, baby, tax consumption as

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Speaker 1: opposed to like why tax like you tax the thing

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Speaker 1: that you want to see less of? Its right? And

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Speaker 1: so if tax income nice where We're not gonna get

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Speaker 1: political here, but just generally speaking, if you're taxing income,

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Speaker 1: you are incentivizing for folks do not necessarily earn more income,

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Speaker 1: because why would you do more of something that you're

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Speaker 1: getting on. Even the Democratic governor of Colorado said that

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Speaker 1: recently brought brought a lot of wisdom to an interview

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Speaker 1: I listened to and sounds like a smart guy. Yeah,

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Speaker 1: he's right, he's right. So all right, that's interesting enough.

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Speaker 1: So when you run for president, we can expect higher

428
00:20:23,400 --> 00:20:26,879
Speaker 1: sales taxes and lower income taxes. Exactly. Okay, all right,

429
00:20:26,920 --> 00:20:30,040
Speaker 1: let's move on. Let's get to our next question. Uh, Matt,

430
00:20:30,040 --> 00:20:31,080
Speaker 1: I would vote for you. I just want you to

431
00:20:31,119 --> 00:20:33,199
Speaker 1: know that. Um, and let you got my bad this

432
00:20:33,280 --> 00:20:36,800
Speaker 1: next question, Thomas, you've been my VP. Oh. I appreciate that.

433
00:20:36,840 --> 00:20:38,560
Speaker 1: I was hoping Secretary of State, but I'll think I'll

434
00:20:38,560 --> 00:20:41,359
Speaker 1: take VP VPS just don't do as much as secretary

435
00:20:41,400 --> 00:20:42,919
Speaker 1: to stay. There's like I think of it as a

436
00:20:43,000 --> 00:20:46,560
Speaker 1: could we co present. I don't know the country. I

437
00:20:46,600 --> 00:20:48,280
Speaker 1: don't know if they allow that. All right, let's get

438
00:20:48,320 --> 00:20:50,639
Speaker 1: to the next question. This one is about entrepreneurship and

439
00:20:50,680 --> 00:20:54,000
Speaker 1: short term investing. Hi, Matt and Joel, this is Adam

440
00:20:54,040 --> 00:20:57,639
Speaker 1: in Austin, and I have a question regarding investing for

441
00:20:57,680 --> 00:21:02,240
Speaker 1: the short term, particularly like in three five years. My

442
00:21:02,359 --> 00:21:05,240
Speaker 1: situation is that my wrath is maxed. I have a

443
00:21:05,280 --> 00:21:08,480
Speaker 1: six month emergency fund. I've got a nice full time job,

444
00:21:08,520 --> 00:21:10,720
Speaker 1: and I also have a small business that kind of

445
00:21:10,760 --> 00:21:14,159
Speaker 1: goes a year a year to supplement some things. But

446
00:21:14,400 --> 00:21:16,520
Speaker 1: I don't really feel like it's in a real estate.

447
00:21:17,160 --> 00:21:22,119
Speaker 1: And I'm not sure that your typical advice putting money

448
00:21:22,119 --> 00:21:26,600
Speaker 1: in low fee Vanguard accounts is really good for you know,

449
00:21:26,680 --> 00:21:30,520
Speaker 1: a short time period one three, five years. So what

450
00:21:30,600 --> 00:21:34,440
Speaker 1: do you recommend? My first option is maybe to pay

451
00:21:34,480 --> 00:21:37,359
Speaker 1: myself to grow my small business, perhaps quit the job

452
00:21:37,440 --> 00:21:41,320
Speaker 1: and have a six month head start, or to put

453
00:21:41,400 --> 00:21:44,320
Speaker 1: money in Vanguard accounts, you know, for three years or

454
00:21:44,359 --> 00:21:47,320
Speaker 1: so and just live with a smaller payment. Of course,

455
00:21:47,359 --> 00:21:49,439
Speaker 1: if there's a third option, I'd love to hear it.

456
00:21:49,800 --> 00:21:52,600
Speaker 1: Great job, y'all. Bye, All right, Adam, thank you so

457
00:21:52,680 --> 00:21:55,480
Speaker 1: much for your question, and congrats on all of the

458
00:21:55,480 --> 00:21:58,199
Speaker 1: financial progress you've made. It sounds like you are in

459
00:21:58,280 --> 00:22:02,040
Speaker 1: a solid financial position. And I think there's two crucial

460
00:22:02,080 --> 00:22:05,240
Speaker 1: parts of this question. First of all, short term investing

461
00:22:05,480 --> 00:22:08,439
Speaker 1: is a tricky needle to thread. Um, you're definitely right

462
00:22:08,440 --> 00:22:10,639
Speaker 1: about that, Adam. You know, like socking a ton of

463
00:22:10,680 --> 00:22:12,879
Speaker 1: money in the market when you're hoping to tap that

464
00:22:12,920 --> 00:22:15,400
Speaker 1: money within the next year. Uh, you know you sort

465
00:22:15,400 --> 00:22:17,480
Speaker 1: of said that within that one, three or five year

466
00:22:17,560 --> 00:22:20,440
Speaker 1: time frame. You know, investing that money within that one

467
00:22:20,560 --> 00:22:23,080
Speaker 1: year time slot is an incredibly risky route to take.

468
00:22:23,400 --> 00:22:25,280
Speaker 1: All you've gotta do is just look at what's happened

469
00:22:25,280 --> 00:22:28,000
Speaker 1: so far this year to the market. Anybody who was like,

470
00:22:28,040 --> 00:22:30,160
Speaker 1: I'm gonna put it in January and I'm gonna get

471
00:22:30,200 --> 00:22:32,960
Speaker 1: it out like at Christmas time for Christmas presents. I'm

472
00:22:32,960 --> 00:22:35,000
Speaker 1: gonna have earned twent on my money. It's like or

473
00:22:35,040 --> 00:22:37,399
Speaker 1: even even seven. I mean, we might, but we have

474
00:22:37,440 --> 00:22:39,080
Speaker 1: no idea, you know, Like, I don't think anyone is

475
00:22:39,080 --> 00:22:41,879
Speaker 1: confident that a total stock market fund is going to

476
00:22:42,000 --> 00:22:44,520
Speaker 1: finish in the black, uh instead of in the red

477
00:22:44,960 --> 00:22:47,119
Speaker 1: by the end of the year. It definitely could, but

478
00:22:47,320 --> 00:22:50,400
Speaker 1: what's happening right now is the perfect example of why

479
00:22:50,440 --> 00:22:53,679
Speaker 1: attempts to invest money that you'll need within a shorter

480
00:22:53,720 --> 00:22:56,720
Speaker 1: time frame like one year, that that is a dangerous

481
00:22:56,720 --> 00:23:00,000
Speaker 1: and risky endeavor. And the second part that Adam mentioned

482
00:23:00,160 --> 00:23:03,239
Speaker 1: was stacking more money into his small business. Right, that's

483
00:23:03,320 --> 00:23:06,240
Speaker 1: kind of a different question, right, because it's something we're

484
00:23:06,320 --> 00:23:10,000
Speaker 1: massively in favor of. Is building up a side hustle

485
00:23:10,080 --> 00:23:12,520
Speaker 1: into a small business that is going to allow you

486
00:23:12,560 --> 00:23:16,960
Speaker 1: to potentially escape working or whatever your hours are for

487
00:23:17,200 --> 00:23:19,440
Speaker 1: any other employer so you can do your own thing.

488
00:23:19,440 --> 00:23:22,200
Speaker 1: And it sounds like you're not sure that you're ready

489
00:23:22,240 --> 00:23:24,919
Speaker 1: to go full time on your own, Adam, But if

490
00:23:24,960 --> 00:23:27,800
Speaker 1: you are, why not funnel more of the dollars you're

491
00:23:27,840 --> 00:23:30,600
Speaker 1: making into your business so that you can take it

492
00:23:30,640 --> 00:23:32,639
Speaker 1: to the next level. You know, you've already got a

493
00:23:32,640 --> 00:23:34,560
Speaker 1: stock to the fund that that it gives you a

494
00:23:34,600 --> 00:23:37,040
Speaker 1: lot of runway as you attempt to make this transition.

495
00:23:37,280 --> 00:23:40,400
Speaker 1: That should offer a lot of confidence that you have

496
00:23:40,520 --> 00:23:43,000
Speaker 1: quite a bit of time to be able to establish yourself.

497
00:23:43,200 --> 00:23:45,080
Speaker 1: You know, we're gon we're gonna push people to invest

498
00:23:45,119 --> 00:23:48,400
Speaker 1: in themselves, in their ideas and in their own businesses

499
00:23:48,440 --> 00:23:51,600
Speaker 1: whenever we possibly can. And of course we're definitely biased

500
00:23:51,680 --> 00:23:53,560
Speaker 1: since that's what the two of us have done, but

501
00:23:53,600 --> 00:23:56,160
Speaker 1: we also see that as a blueprint for financial success

502
00:23:56,440 --> 00:23:59,480
Speaker 1: for people across the country. You know, and and and

503
00:23:59,520 --> 00:24:01,840
Speaker 1: we've been but we pursued this podcast as a side

504
00:24:01,880 --> 00:24:05,159
Speaker 1: hustle legitimately for quite a while before it became our

505
00:24:05,240 --> 00:24:07,960
Speaker 1: full time gig. And so sometimes, yeah, you just need

506
00:24:08,040 --> 00:24:10,160
Speaker 1: time to ramp up. You need that other income while

507
00:24:10,200 --> 00:24:12,679
Speaker 1: you're growing the thing that you're working on. But the

508
00:24:12,720 --> 00:24:14,760
Speaker 1: goal for most people, for a lot of people, is

509
00:24:15,040 --> 00:24:17,280
Speaker 1: you know, to eventually be able to turn this pigot

510
00:24:17,320 --> 00:24:19,840
Speaker 1: on all the way so that you can work for

511
00:24:19,840 --> 00:24:21,920
Speaker 1: yourself full time. That's right. Yeah, this is more than

512
00:24:21,960 --> 00:24:23,600
Speaker 1: just an investing This is more than just like a

513
00:24:23,600 --> 00:24:27,080
Speaker 1: money question, Adam, because yeah, like the Skuy's could be

514
00:24:27,119 --> 00:24:28,920
Speaker 1: the limit when it comes to what your business can

515
00:24:29,080 --> 00:24:32,000
Speaker 1: produce for you. And yeah, this is about optimizing the

516
00:24:32,040 --> 00:24:34,879
Speaker 1: returns on the cash that you're looking to deploy today.

517
00:24:34,960 --> 00:24:37,120
Speaker 1: But for most folks, there is just a lot more

518
00:24:37,280 --> 00:24:40,360
Speaker 1: than the ability to make more money. There's a dream

519
00:24:40,400 --> 00:24:42,880
Speaker 1: that you're looking to fulfill. And it sounds like you've

520
00:24:42,920 --> 00:24:46,439
Speaker 1: got this opportunity to pursue something that could pay some

521
00:24:46,520 --> 00:24:50,440
Speaker 1: dividends in the area of life satisfaction. And that's almost priceless,

522
00:24:50,480 --> 00:24:52,080
Speaker 1: you know, Like just think about the amount of time

523
00:24:52,600 --> 00:24:55,680
Speaker 1: that you dedicate to work, right on average, about eight

524
00:24:55,680 --> 00:24:58,960
Speaker 1: hours a day, assuming you sleep for another roughly eight hours.

525
00:24:59,000 --> 00:25:01,960
Speaker 1: Like we're talking about how you're going to spend around

526
00:25:01,960 --> 00:25:05,040
Speaker 1: a third of your life. And so I say that

527
00:25:05,040 --> 00:25:06,440
Speaker 1: because I just want you to keep in mind that

528
00:25:06,480 --> 00:25:09,520
Speaker 1: there's more to it than you know where you're going

529
00:25:09,560 --> 00:25:12,760
Speaker 1: to see the largest return on investment on your cash. Uh,

530
00:25:12,840 --> 00:25:15,560
Speaker 1: it's also worth considering how you're going to be spending

531
00:25:15,840 --> 00:25:18,439
Speaker 1: your waking hours, how you are literally going to spend

532
00:25:18,480 --> 00:25:21,280
Speaker 1: the hours of your life. Yeah, it's almost impossible to

533
00:25:21,280 --> 00:25:23,440
Speaker 1: say we'll shry I invest in a total stock market

534
00:25:23,440 --> 00:25:26,919
Speaker 1: fund or in my business, because there's so many specifics

535
00:25:26,920 --> 00:25:29,960
Speaker 1: that would factor into how you make that decision. But

536
00:25:30,200 --> 00:25:32,440
Speaker 1: for a lot of people, we're gonna say, if if

537
00:25:32,480 --> 00:25:35,040
Speaker 1: you're in the right financial position, we would love to

538
00:25:35,040 --> 00:25:37,879
Speaker 1: see you pursue that business in a bigger way, if

539
00:25:37,880 --> 00:25:40,520
Speaker 1: at all possible. And you know, Adam is certainly in

540
00:25:40,520 --> 00:25:42,159
Speaker 1: the place financially where it makes sense for him to

541
00:25:42,160 --> 00:25:44,840
Speaker 1: give that dream and go, even even if it means

542
00:25:44,840 --> 00:25:47,840
Speaker 1: investing less for future retirement needs. For the time being,

543
00:25:47,960 --> 00:25:50,480
Speaker 1: it's okay to let that take a back seat while

544
00:25:50,520 --> 00:25:54,720
Speaker 1: you prioritize getting this small business into self sustaining territory.

545
00:25:55,000 --> 00:25:57,119
Speaker 1: But for everyone else out there, by the way, who's listening,

546
00:25:57,359 --> 00:25:59,760
Speaker 1: and you don't have a side business to consider ramping up,

547
00:26:00,119 --> 00:26:02,199
Speaker 1: and maybe you also have some extra money that you

548
00:26:02,320 --> 00:26:05,240
Speaker 1: don't want to have sitting in a same mus account, well,

549
00:26:05,320 --> 00:26:08,199
Speaker 1: then actually investing in the market makes sense for you

550
00:26:08,200 --> 00:26:10,840
Speaker 1: in all likelihood. I personally wouldn't be investing in the

551
00:26:10,880 --> 00:26:12,760
Speaker 1: market if I needed that money in a year, but

552
00:26:12,800 --> 00:26:14,520
Speaker 1: I definitely would if I had more of like a

553
00:26:14,520 --> 00:26:17,320
Speaker 1: five year timeline. Uh and that three year timeline is

554
00:26:17,480 --> 00:26:19,800
Speaker 1: always the trickiest. Man. It's more of a gray area.

555
00:26:20,400 --> 00:26:22,800
Speaker 1: Uh So, when you look at like the rolling returns

556
00:26:22,880 --> 00:26:25,480
Speaker 1: of the stock market for the past one years, you

557
00:26:25,480 --> 00:26:28,200
Speaker 1: have like an eight chance of seeing your investment grow.

558
00:26:28,400 --> 00:26:30,520
Speaker 1: When we're talking about a three year timeline, those are

559
00:26:30,520 --> 00:26:33,680
Speaker 1: still pretty good odds considering it's a purely passive investment

560
00:26:33,680 --> 00:26:35,760
Speaker 1: where you don't really have to lift a finger. But

561
00:26:35,800 --> 00:26:38,960
Speaker 1: I feel like the short term investing question is is

562
00:26:39,000 --> 00:26:42,280
Speaker 1: one that we get more than almost anything else, as

563
00:26:42,400 --> 00:26:44,440
Speaker 1: especially our younger listeners are looking to save up for

564
00:26:44,480 --> 00:26:47,120
Speaker 1: a more a major purchase in particular, like a home purchase.

565
00:26:47,280 --> 00:26:50,360
Speaker 1: They're wondering, how can I put this aside for three

566
00:26:50,440 --> 00:26:52,040
Speaker 1: years from now, kind of put it in the market,

567
00:26:52,240 --> 00:26:53,840
Speaker 1: And it's just nice to know those numbers because you

568
00:26:53,840 --> 00:26:56,800
Speaker 1: can kind of see, well, what's my actual risk potential here?

569
00:26:57,000 --> 00:26:59,200
Speaker 1: If I do invest on a short timeline, one year

570
00:26:59,400 --> 00:27:01,840
Speaker 1: seems crazy to me, three year seems less crazy, much

571
00:27:01,880 --> 00:27:03,919
Speaker 1: more doable. It's still risky, Yeah, that's right. I think

572
00:27:03,960 --> 00:27:07,639
Speaker 1: another consideration is to not be so focused on optimizing

573
00:27:07,680 --> 00:27:10,560
Speaker 1: every single dollar. I think a lot of times we think, oh,

574
00:27:10,600 --> 00:27:12,119
Speaker 1: I don't want to have this chunk of cash and

575
00:27:12,240 --> 00:27:15,439
Speaker 1: there for years on end, earning nothing but life changes

576
00:27:15,640 --> 00:27:17,920
Speaker 1: and something that we thought we were gonna do a

577
00:27:18,000 --> 00:27:19,920
Speaker 1: year or two from now. By the time that year

578
00:27:19,960 --> 00:27:23,560
Speaker 1: two arrives, we're doing something else. We are changing and

579
00:27:23,640 --> 00:27:27,560
Speaker 1: evolving creatures, and sometimes it pays to have liquid cash

580
00:27:27,560 --> 00:27:29,080
Speaker 1: for us to be able to do what it is

581
00:27:29,119 --> 00:27:30,600
Speaker 1: that we that we want to do with our money.

582
00:27:30,840 --> 00:27:32,880
Speaker 1: But that being said, if you know that you want

583
00:27:32,920 --> 00:27:35,760
Speaker 1: to at least lock your money away for a year,

584
00:27:35,880 --> 00:27:39,239
Speaker 1: we would recommend you checking out I bonds. It's not

585
00:27:39,320 --> 00:27:41,840
Speaker 1: technically investing, but it's just one of our favorite short

586
00:27:41,960 --> 00:27:45,600
Speaker 1: term vehicles UH to generate a solid return. The rate

587
00:27:45,680 --> 00:27:50,360
Speaker 1: is currently just shy of ten, which is awesome guaranteed

588
00:27:50,480 --> 00:27:53,720
Speaker 1: rate of Yeah, it's it's so good, um, And that's

589
00:27:53,760 --> 00:27:55,399
Speaker 1: just a great place to soak away at least ten

590
00:27:55,440 --> 00:27:58,560
Speaker 1: thousand dollars that you can lock away for at least

591
00:27:58,600 --> 00:28:00,639
Speaker 1: a year. We'll put a link to the government website,

592
00:28:00,680 --> 00:28:03,480
Speaker 1: which is Treasury direct dot gov, where you can buy

593
00:28:03,560 --> 00:28:05,359
Speaker 1: I bonds. Will include that in our show notes, but

594
00:28:05,400 --> 00:28:07,920
Speaker 1: we wanted to mention that because maybe that ten thousand

595
00:28:07,960 --> 00:28:10,000
Speaker 1: dollars will be enough to hold you over. You know

596
00:28:10,040 --> 00:28:12,080
Speaker 1: that you're getting close to that ten percent, you know

597
00:28:12,200 --> 00:28:13,880
Speaker 1: that you're not going to touch that money for a year,

598
00:28:13,920 --> 00:28:16,720
Speaker 1: but beyond that, maybe it does pay to hang on

599
00:28:16,760 --> 00:28:19,119
Speaker 1: to that money within that high interest savings accounts so

600
00:28:19,200 --> 00:28:22,080
Speaker 1: that you have options available to you one to three

601
00:28:22,119 --> 00:28:24,359
Speaker 1: Your money in an I bond right now makes just

602
00:28:24,640 --> 00:28:27,120
Speaker 1: a world of sense, especially just the ten thousand dollars

603
00:28:27,200 --> 00:28:29,040
Speaker 1: right And it's not like it requires you to go

604
00:28:29,200 --> 00:28:32,160
Speaker 1: fifty thou or a hundred thousand dollars in where it's

605
00:28:32,200 --> 00:28:34,960
Speaker 1: just okay, this is a massive commitments. Yeah, this is that.

606
00:28:35,320 --> 00:28:37,440
Speaker 1: That's not what we're talking about it. So all right, Matt,

607
00:28:37,440 --> 00:28:39,720
Speaker 1: We've got more questions to get to, including the one

608
00:28:39,800 --> 00:28:42,600
Speaker 1: about a teacher and her pension. We'll get to that

609
00:28:42,720 --> 00:28:45,160
Speaker 1: and a question about buying our rental property right after this.

610
00:28:54,720 --> 00:28:57,160
Speaker 1: All right, we're back from the break, and let's hear

611
00:28:57,200 --> 00:28:59,720
Speaker 1: a question from a listener who is in our neighboring

612
00:29:00,080 --> 00:29:03,640
Speaker 1: date of South Carolina. Hey, guys, this is Maggie. I'm

613
00:29:03,640 --> 00:29:06,520
Speaker 1: a music teacher in South Carolina in the increasingly rare

614
00:29:06,560 --> 00:29:09,120
Speaker 1: position of contributing toward a pension so long as I

615
00:29:09,160 --> 00:29:11,960
Speaker 1: stay in the state. I've taked for nine years and

616
00:29:12,040 --> 00:29:15,560
Speaker 1: was officially vested in the system after eight Last summer,

617
00:29:15,600 --> 00:29:17,840
Speaker 1: I learned that my district offers a match up to

618
00:29:17,920 --> 00:29:21,000
Speaker 1: nine percent if I opted into an optional retirement plan

619
00:29:21,080 --> 00:29:23,800
Speaker 1: like a four oh one K. This option is only

620
00:29:23,800 --> 00:29:26,200
Speaker 1: available when you're new to a district, But next year

621
00:29:26,240 --> 00:29:29,000
Speaker 1: I'll be transferring districts and wondered what y'all think is

622
00:29:29,000 --> 00:29:32,360
Speaker 1: the best plan if they offer something similar. Should I

623
00:29:32,360 --> 00:29:35,240
Speaker 1: say committed to the pension while contributing to my four

624
00:29:35,320 --> 00:29:37,840
Speaker 1: or three B and ralph hire A or should I

625
00:29:37,840 --> 00:29:40,520
Speaker 1: add a four oh one K into the mix. Thanks

626
00:29:40,520 --> 00:29:43,200
Speaker 1: for your great non judgmental content. I hope to hear

627
00:29:43,240 --> 00:29:46,120
Speaker 1: from you soon. Maggie, thank you for your question. We

628
00:29:46,160 --> 00:29:49,680
Speaker 1: appreciate it. Non judgmental, contental. I don't don't offend her.

629
00:29:49,720 --> 00:29:51,840
Speaker 1: That is our goal is truly like there, there's a

630
00:29:51,880 --> 00:29:54,640
Speaker 1: lot of defensive stuff you can get into out there. Okay, So,

631
00:29:54,640 --> 00:29:56,360
Speaker 1: so what's fun of money? Is a place for everyone?

632
00:29:56,440 --> 00:29:58,360
Speaker 1: So I said, across the border and I grew up

633
00:29:58,360 --> 00:30:01,840
Speaker 1: in Augusta, which means that South Carolina literally was across

634
00:30:01,840 --> 00:30:03,440
Speaker 1: the border. And that was true, And for some reason,

635
00:30:03,480 --> 00:30:05,440
Speaker 1: I remember North Augusta and South Augusta. So part of

636
00:30:05,440 --> 00:30:07,680
Speaker 1: Augusta is literally in South Carolina exactly. You got you

637
00:30:07,720 --> 00:30:10,120
Speaker 1: have the border bash, which is the like U G

638
00:30:10,280 --> 00:30:12,800
Speaker 1: A versus South Carolina game. But we used always joke

639
00:30:12,880 --> 00:30:14,920
Speaker 1: how like the roads just got worse once you crossed

640
00:30:14,920 --> 00:30:19,040
Speaker 1: over the river looked down their nose at the other.

641
00:30:19,280 --> 00:30:22,240
Speaker 1: But Maggie, those days are behind me. I am not

642
00:30:22,360 --> 00:30:25,000
Speaker 1: judging you for being a South Carolina resident well friendly.

643
00:30:25,000 --> 00:30:27,360
Speaker 1: Well in South Carolina to be, to be honest, is

644
00:30:27,800 --> 00:30:29,720
Speaker 1: a fantastic state. Sounds like one of the best place

645
00:30:29,760 --> 00:30:34,240
Speaker 1: the flags by the way out Thereto Tree, Charleston. They

646
00:30:34,280 --> 00:30:36,920
Speaker 1: got that going on all those beaches. So all right, Maggie,

647
00:30:37,520 --> 00:30:39,600
Speaker 1: we have to tell you this, don't ever leave South Carolina.

648
00:30:39,600 --> 00:30:41,640
Speaker 1: One because it's a great state. And too because that

649
00:30:41,680 --> 00:30:44,000
Speaker 1: just because Mount was hating on it. We love South

650
00:30:44,040 --> 00:30:46,480
Speaker 1: Carolina because you're well, I went to school and for

651
00:30:46,480 --> 00:30:48,760
Speaker 1: a couple of years to college in South Carolina and

652
00:30:48,920 --> 00:30:52,080
Speaker 1: I love that state. And uh and and because Maggie

653
00:30:52,080 --> 00:30:56,000
Speaker 1: has access to a pension, which is as rare as

654
00:30:56,400 --> 00:30:59,160
Speaker 1: Matt drinking a Miller light. Uh. Then I would say

655
00:30:59,160 --> 00:31:00,800
Speaker 1: it's something you have got to stay around for once

656
00:31:00,840 --> 00:31:03,480
Speaker 1: in a blue moon, which is when you're drinking your

657
00:31:03,640 --> 00:31:06,560
Speaker 1: wheat ale. Uh, that's not really produced, that's right. It

658
00:31:06,800 --> 00:31:09,840
Speaker 1: almost ever happens. And so because you still have access

659
00:31:09,920 --> 00:31:12,800
Speaker 1: to a pension, we would say, don't lose it at

660
00:31:12,840 --> 00:31:15,920
Speaker 1: any cost. If you envision yourself having like a twenty

661
00:31:16,040 --> 00:31:18,400
Speaker 1: or thirty year teaching career, this pension is going to

662
00:31:18,480 --> 00:31:21,240
Speaker 1: go a long way towards ensuring that you're gonna have

663
00:31:21,320 --> 00:31:24,040
Speaker 1: more than enough to live on in retirement. We'd hate

664
00:31:24,040 --> 00:31:26,280
Speaker 1: to see you give it up if you can avoid it. Matt.

665
00:31:26,320 --> 00:31:28,120
Speaker 1: It makes me think about my father in law who

666
00:31:28,400 --> 00:31:30,760
Speaker 1: was a public school teacher for more than thirty years

667
00:31:30,960 --> 00:31:33,560
Speaker 1: and then he decided to go teach at a private

668
00:31:33,560 --> 00:31:36,040
Speaker 1: school because his pension was fully max like he couldn't

669
00:31:36,080 --> 00:31:38,280
Speaker 1: add any more years or any more dollars to the

670
00:31:39,040 --> 00:31:41,400
Speaker 1: pension he was going to receive in retirement. So he's

671
00:31:41,400 --> 00:31:44,920
Speaker 1: double dipping in this. He's got the best of both

672
00:31:44,920 --> 00:31:47,360
Speaker 1: worlds a little bit. He's probably got some pretty decent

673
00:31:47,400 --> 00:31:50,560
Speaker 1: benefits from private school. So he was still pretty young,

674
00:31:50,760 --> 00:31:52,960
Speaker 1: like in his life fifties early sixties when he made

675
00:31:53,000 --> 00:31:56,160
Speaker 1: this made this transition, and so yeah, he's he's basically

676
00:31:56,200 --> 00:31:59,560
Speaker 1: able to have two great incomes and that's the kind

677
00:31:59,560 --> 00:32:01,960
Speaker 1: of path that a lot of teachers cameras or or

678
00:32:02,120 --> 00:32:04,600
Speaker 1: they can just leave live even more frugally and they

679
00:32:04,600 --> 00:32:07,360
Speaker 1: can decide, guess what I don't need to incomes. I

680
00:32:07,360 --> 00:32:09,640
Speaker 1: I can just settle for the pension that's plenty for me.

681
00:32:09,760 --> 00:32:11,760
Speaker 1: That's right. Yeah, So, Maggie, not only does you know

682
00:32:11,880 --> 00:32:13,760
Speaker 1: much of this decision right on what you see yourself

683
00:32:13,760 --> 00:32:15,560
Speaker 1: doing in the future, but it but it also really

684
00:32:15,600 --> 00:32:18,840
Speaker 1: depends on what you're able to learn after crunching some numbers.

685
00:32:18,840 --> 00:32:20,680
Speaker 1: You know, the numbers don't lie, So sit down and

686
00:32:20,960 --> 00:32:24,400
Speaker 1: calculate what you are going to effectively be receiving if

687
00:32:24,440 --> 00:32:27,000
Speaker 1: you happen to have access to OR four or three

688
00:32:27,000 --> 00:32:29,840
Speaker 1: B or four one K, although we're kind of confused

689
00:32:29,840 --> 00:32:32,680
Speaker 1: because we can't imagine having access to both of those

690
00:32:32,720 --> 00:32:35,040
Speaker 1: with a single employer. Typically it's going to be one

691
00:32:35,120 --> 00:32:38,040
Speaker 1: or the other, but both accounts are basically the same.

692
00:32:38,400 --> 00:32:41,280
Speaker 1: Assuming that you do have access to both, and assuming

693
00:32:41,280 --> 00:32:43,760
Speaker 1: that you still have the same nine percent match with

694
00:32:43,800 --> 00:32:46,480
Speaker 1: both of those accounts, typically they're identical. You' you're gonna

695
00:32:46,520 --> 00:32:50,120
Speaker 1: be limited to the twenty five hundred in total contributions,

696
00:32:50,120 --> 00:32:53,200
Speaker 1: regardless if you're enrolled in just one of them, or

697
00:32:53,240 --> 00:32:55,760
Speaker 1: if you're enrolled in both, and so otherwise, what you

698
00:32:55,800 --> 00:32:57,720
Speaker 1: want to make sure that you're looking at are your

699
00:32:57,840 --> 00:33:00,719
Speaker 1: investing options, because you're gonna want to be invested in

700
00:33:00,800 --> 00:33:03,000
Speaker 1: something like a total stock market index fund or an

701
00:33:03,120 --> 00:33:07,360
Speaker 1: SMP five funded index fund with virtually no expenses, right,

702
00:33:07,400 --> 00:33:10,720
Speaker 1: So you're looking for expense ratios in the either free

703
00:33:10,760 --> 00:33:12,480
Speaker 1: which would be ideal, like that's what you can get

704
00:33:12,520 --> 00:33:15,720
Speaker 1: through Fidelity, but typically something in the point zero three

705
00:33:16,080 --> 00:33:19,720
Speaker 1: to point zero nine percent range is acceptable. Anything above

706
00:33:20,200 --> 00:33:23,080
Speaker 1: like point three percent like there there really should be

707
00:33:23,120 --> 00:33:25,680
Speaker 1: no fund that you're invested in where you're paying more

708
00:33:25,720 --> 00:33:27,960
Speaker 1: than ten x what you truly need to be paying.

709
00:33:28,080 --> 00:33:29,440
Speaker 1: That's right. Yeah, we'd love to see you in the

710
00:33:29,480 --> 00:33:32,640
Speaker 1: lowest fee funds possible. For some reason, though, Matt, some

711
00:33:32,680 --> 00:33:35,320
Speaker 1: of those companies don't have access or don't offer at

712
00:33:35,400 --> 00:33:38,680
Speaker 1: least in particular to teachers some of those lowest fee funds,

713
00:33:38,720 --> 00:33:42,840
Speaker 1: which is sad, it's abysmal. And so if you have

714
00:33:42,960 --> 00:33:45,400
Speaker 1: access to both, which we're not quite sure about based

715
00:33:45,440 --> 00:33:47,280
Speaker 1: on your question, Maggie, we would say opt for the

716
00:33:47,280 --> 00:33:49,479
Speaker 1: one that has lower fee funds. And if you if

717
00:33:49,480 --> 00:33:51,160
Speaker 1: you have more questions about your four or three B.

718
00:33:51,280 --> 00:33:54,000
Speaker 1: There's a great website called four oh three b wise

719
00:33:54,280 --> 00:33:56,720
Speaker 1: dot org and it's a great site to help you

720
00:33:56,800 --> 00:33:59,520
Speaker 1: understand the specifics of four or three b s and

721
00:33:59,560 --> 00:34:01,840
Speaker 1: you can learn more about yours in depth. It's a

722
00:34:01,840 --> 00:34:03,600
Speaker 1: place teachers should go when they want to find out

723
00:34:03,600 --> 00:34:07,320
Speaker 1: more about their own retirement account. But Matt, what I

724
00:34:07,360 --> 00:34:11,160
Speaker 1: was kind of gathering was that Maggie could potentially stop

725
00:34:11,480 --> 00:34:14,840
Speaker 1: accruing her pension and gravity gravitate towards the four ohn K.

726
00:34:14,960 --> 00:34:17,240
Speaker 1: And if that's the case, we would say it's almost

727
00:34:17,280 --> 00:34:18,920
Speaker 1: always going to be a bad idea to do that.

728
00:34:19,280 --> 00:34:21,080
Speaker 1: But the fact that that she's already vested in the

729
00:34:21,120 --> 00:34:23,560
Speaker 1: South Carolina pension and then every year the pot gets

730
00:34:23,600 --> 00:34:25,879
Speaker 1: a little bit sweeter, it means that no matter what,

731
00:34:26,120 --> 00:34:28,759
Speaker 1: she's gonna want to keep that pension growing and um

732
00:34:28,800 --> 00:34:30,640
Speaker 1: and so like. There's not like that period of time

733
00:34:30,640 --> 00:34:34,359
Speaker 1: where she would be working towards getting vested potentially missing

734
00:34:34,400 --> 00:34:36,799
Speaker 1: out on a match. But that's not the case. That's

735
00:34:36,800 --> 00:34:38,799
Speaker 1: not the situation. It sounds like that she's in. That's right.

736
00:34:38,840 --> 00:34:42,880
Speaker 1: Once you hit those investing years for the pension, every

737
00:34:42,920 --> 00:34:47,000
Speaker 1: single year you add on is going to directly increase

738
00:34:47,040 --> 00:34:48,480
Speaker 1: the amount that you're going to be able to get

739
00:34:48,760 --> 00:34:51,799
Speaker 1: for the rest of your days when you've hit retirement age.

740
00:34:52,080 --> 00:34:54,200
Speaker 1: And I love the fact that Maggie is also contributing

741
00:34:54,239 --> 00:34:57,960
Speaker 1: to her roth IRA as well as that work sponsored

742
00:34:57,960 --> 00:35:00,200
Speaker 1: retirement account. At the same time, it's where of those

743
00:35:00,200 --> 00:35:03,600
Speaker 1: things where like all the vehicles combined, um, it makes

744
00:35:03,640 --> 00:35:06,240
Speaker 1: me think a captain planet, you know, all the powers combined. Well,

745
00:35:06,520 --> 00:35:09,279
Speaker 1: all those vehicles combined with that, with that pension uh

746
00:35:09,719 --> 00:35:12,800
Speaker 1: as well, are gonna make for just extremely smooth sailing

747
00:35:13,040 --> 00:35:16,480
Speaker 1: when Maggie does decide to stop teaching. And again, the

748
00:35:16,520 --> 00:35:19,040
Speaker 1: decision you make here is largely based on some presumptions

749
00:35:19,040 --> 00:35:22,160
Speaker 1: that we're making. But if teaching in South Carolina is

750
00:35:22,239 --> 00:35:24,960
Speaker 1: something you enjoy, something you plan to keep on doing,

751
00:35:25,400 --> 00:35:27,480
Speaker 1: you know, invest in those other accounts for sure, keep

752
00:35:27,560 --> 00:35:30,560
Speaker 1: doing that, but prioritize keeping the pension no matter what.

753
00:35:30,840 --> 00:35:33,560
Speaker 1: There's a reason that so many people pined for the

754
00:35:33,640 --> 00:35:35,840
Speaker 1: days of the past when pensions were a thing, because

755
00:35:35,880 --> 00:35:40,120
Speaker 1: they provided a whole lot of security in retirements. And

756
00:35:40,360 --> 00:35:42,520
Speaker 1: it's also why a lot of states and organizations and

757
00:35:42,560 --> 00:35:45,080
Speaker 1: companies are moving away from them because you're expensive. So yeah,

758
00:35:45,120 --> 00:35:46,920
Speaker 1: they cost them a lot of money exactly. And for

759
00:35:47,080 --> 00:35:49,880
Speaker 1: state and government workers who still have that option, but

760
00:35:49,920 --> 00:35:53,640
Speaker 1: they're also taking their own retirement into their own hands

761
00:35:53,719 --> 00:35:57,680
Speaker 1: through these individual retirement accounts and workplace retirement accounts, they're

762
00:35:57,680 --> 00:36:00,560
Speaker 1: basically in the best position possible. That's right. It also, Joel,

763
00:36:00,640 --> 00:36:02,520
Speaker 1: since you mentioned Captain Planet, I feel like we're we're

764
00:36:02,560 --> 00:36:05,440
Speaker 1: totally due for a Captain Planet reboot. How is that

765
00:36:05,480 --> 00:36:07,960
Speaker 1: not happening yet? Like I'm picturing what I like if

766
00:36:08,000 --> 00:36:09,759
Speaker 1: Michael Bays sat down at to the table is just like,

767
00:36:09,800 --> 00:36:14,040
Speaker 1: all right, how can I make Captain Planet awesome? I

768
00:36:14,080 --> 00:36:15,800
Speaker 1: think that is something I would I would pay money

769
00:36:15,800 --> 00:36:17,920
Speaker 1: to go see. I would watch it. But Maggie, we

770
00:36:17,920 --> 00:36:20,200
Speaker 1: wish you the best. Thank you for your question, Joel.

771
00:36:20,239 --> 00:36:22,879
Speaker 1: We've got our last question of the day comes from

772
00:36:22,880 --> 00:36:26,440
Speaker 1: a listener who is looking to get into real estate investing,

773
00:36:26,480 --> 00:36:29,840
Speaker 1: one of our favorite topics. Let's hear it him. Matt High, Joel,

774
00:36:29,960 --> 00:36:32,439
Speaker 1: my name is Thomas. I live in Frisco, just north

775
00:36:32,480 --> 00:36:34,360
Speaker 1: of Dallas, Texas, and I'm calling me because I have

776
00:36:34,400 --> 00:36:36,959
Speaker 1: a few questions about getting into the rental property game.

777
00:36:37,480 --> 00:36:39,920
Speaker 1: I have a very stable current situation with my wife.

778
00:36:40,000 --> 00:36:43,040
Speaker 1: I'm able to invest in stocks every month. I have

779
00:36:43,200 --> 00:36:45,960
Speaker 1: our credit cards paid off every month, and I have

780
00:36:46,080 --> 00:36:48,200
Speaker 1: about four to five months worth of income from me

781
00:36:48,200 --> 00:36:50,720
Speaker 1: and my wife's stored in a high yield emergency fund.

782
00:36:51,520 --> 00:36:53,960
Speaker 1: Because of all this, I do have a low cash

783
00:36:53,960 --> 00:36:57,239
Speaker 1: flow currently. I don't know which option would be best

784
00:36:57,239 --> 00:36:59,479
Speaker 1: for me to consider when trying to get the cash

785
00:36:59,480 --> 00:37:03,120
Speaker 1: infusion to start a rental property. I am trying to

786
00:37:03,160 --> 00:37:06,640
Speaker 1: avoid a cash out refinance because we refinanced last year

787
00:37:06,719 --> 00:37:08,920
Speaker 1: on our house. We got off our p m I,

788
00:37:09,000 --> 00:37:11,480
Speaker 1: which was great and had a great low interest rate,

789
00:37:11,680 --> 00:37:14,200
Speaker 1: so we're trying not to mess with that. How do

790
00:37:14,239 --> 00:37:18,160
Speaker 1: you feel about he locks for using towards rental properties.

791
00:37:18,560 --> 00:37:20,359
Speaker 1: I don't know if you have any other options other

792
00:37:20,400 --> 00:37:24,000
Speaker 1: than just a personal loan. Secondly, what expenses to any

793
00:37:24,040 --> 00:37:26,839
Speaker 1: to be considering before knowing how much of a loan

794
00:37:26,880 --> 00:37:29,080
Speaker 1: to take out other than just the price of the house.

795
00:37:29,680 --> 00:37:33,040
Speaker 1: I know the property manager fees and probably some upkeeping things,

796
00:37:33,080 --> 00:37:34,680
Speaker 1: but I didn't know if there's any other secrets that

797
00:37:34,719 --> 00:37:38,400
Speaker 1: I need to be worried about before getting this loan going. Lastly,

798
00:37:38,719 --> 00:37:41,040
Speaker 1: is there any way to avoid putting down for a

799
00:37:41,080 --> 00:37:45,160
Speaker 1: rental property investment? I know if it's where you live,

800
00:37:45,239 --> 00:37:46,799
Speaker 1: you can put less. But I don't know if there's

801
00:37:46,840 --> 00:37:49,239
Speaker 1: any other tips or tricks to avoid that. Thanks for

802
00:37:49,280 --> 00:37:52,399
Speaker 1: all your help. Keep up the great work, all right, Thomas,

803
00:37:52,440 --> 00:37:55,080
Speaker 1: thanks to your question. I I love your enthusiasm for

804
00:37:55,160 --> 00:37:58,560
Speaker 1: getting into rental properties. It, yes, and I get it, man,

805
00:37:58,640 --> 00:38:01,839
Speaker 1: I get it because real estate he's been listening to us.

806
00:38:01,960 --> 00:38:04,480
Speaker 1: He knows it's been great and that it's something that

807
00:38:04,719 --> 00:38:07,280
Speaker 1: a lot of people can They can get cash flow

808
00:38:07,440 --> 00:38:10,480
Speaker 1: every single month, they can build up. Do we talk

809
00:38:10,480 --> 00:38:12,200
Speaker 1: about it too much real estate? No, I don't think so.

810
00:38:12,560 --> 00:38:14,080
Speaker 1: I mean people can write in and be like, yeah

811
00:38:14,120 --> 00:38:16,239
Speaker 1: you do if they want to, But I don't know

812
00:38:16,560 --> 00:38:19,080
Speaker 1: your OI. Yeah. We we try not to bang the

813
00:38:19,120 --> 00:38:21,520
Speaker 1: drum too loudly because there's a lot of other financial

814
00:38:21,560 --> 00:38:24,280
Speaker 1: topics worth talking about. But for folks that are interested,

815
00:38:24,600 --> 00:38:27,520
Speaker 1: we'll talk about it any day, anytime, any place. But Thomas,

816
00:38:27,560 --> 00:38:29,880
Speaker 1: it sounds like you're doing well on on some of

817
00:38:29,920 --> 00:38:32,040
Speaker 1: your other financial goals too. There are a couple of

818
00:38:32,280 --> 00:38:36,040
Speaker 1: reasons people we would say choose to avoid owning rental properties.

819
00:38:36,360 --> 00:38:39,120
Speaker 1: One is the part time job factor. Right, It's it's

820
00:38:39,160 --> 00:38:41,920
Speaker 1: not the easiest endeavor in the world. It takes some time,

821
00:38:42,560 --> 00:38:44,800
Speaker 1: and it takes you know, there's a learning curve involved

822
00:38:44,840 --> 00:38:47,080
Speaker 1: to Matt. When it comes to owning rental real estate.

823
00:38:47,120 --> 00:38:49,200
Speaker 1: We don't encourage people to go in there without doing

824
00:38:49,200 --> 00:38:52,240
Speaker 1: their due diligence. There's there's a lot of like reading

825
00:38:52,239 --> 00:38:55,160
Speaker 1: and listening you should do before you actually pull the trigger,

826
00:38:55,440 --> 00:38:57,919
Speaker 1: you know, especially when you're your first getting the ball

827
00:38:58,040 --> 00:39:00,479
Speaker 1: rolling or if a property needs some work. There's there's

828
00:39:00,520 --> 00:39:02,839
Speaker 1: a lot of effort there too. You learn a whole

829
00:39:02,880 --> 00:39:04,680
Speaker 1: lot in a very short period of time. That's right,

830
00:39:04,719 --> 00:39:06,800
Speaker 1: and it's kind of great, right because it's kind of

831
00:39:06,840 --> 00:39:09,279
Speaker 1: like trial by fire, you get baptized. It's like it's

832
00:39:09,280 --> 00:39:11,640
Speaker 1: like drinking from a fire host. Yeah, exactly. And then

833
00:39:11,760 --> 00:39:14,919
Speaker 1: the other reason I think people often avoid real estate

834
00:39:14,920 --> 00:39:17,840
Speaker 1: investing is because of how difficult it can be to

835
00:39:17,920 --> 00:39:20,800
Speaker 1: save up a chunk of money for a down payment.

836
00:39:20,960 --> 00:39:23,440
Speaker 1: It's hard enough to do that with your primary residents,

837
00:39:23,880 --> 00:39:26,640
Speaker 1: but it's easier to put less money down a smaller

838
00:39:26,640 --> 00:39:29,279
Speaker 1: percentage when you're buying a personal property than when you're

839
00:39:29,320 --> 00:39:31,680
Speaker 1: buying an investment property. And so we would say we

840
00:39:31,760 --> 00:39:34,840
Speaker 1: want potential real estate investors to have saved up at

841
00:39:34,920 --> 00:39:37,680
Speaker 1: least as a down payment, and that's actually what what

842
00:39:37,760 --> 00:39:40,759
Speaker 1: a lot of lenders required to write. So it's not

843
00:39:40,800 --> 00:39:43,120
Speaker 1: just that it's also the wise move. And so those

844
00:39:43,160 --> 00:39:45,960
Speaker 1: two hurdles, we would say, mean that most folks won't

845
00:39:46,000 --> 00:39:48,240
Speaker 1: ever end up pursuing this route. It sounds like Thomas

846
00:39:48,320 --> 00:39:50,239
Speaker 1: is going to at some point, but most people will

847
00:39:50,239 --> 00:39:52,560
Speaker 1: avoid it, even though it can be just one of

848
00:39:52,640 --> 00:39:55,960
Speaker 1: the most powerful wealth building levers. Exactly. And you see

849
00:39:56,000 --> 00:39:58,640
Speaker 1: what has happened when people have rushed into the home

850
00:39:58,640 --> 00:40:01,239
Speaker 1: ownership process, right Look to the Great Recession, look back

851
00:40:01,280 --> 00:40:05,600
Speaker 1: to the subprime lending crisis, when folks who weren't necessarily qualified,

852
00:40:05,800 --> 00:40:07,960
Speaker 1: we're getting those homes when they didn't necessarily have to

853
00:40:07,960 --> 00:40:11,279
Speaker 1: put down uh. And that's something that we once to

854
00:40:11,360 --> 00:40:14,400
Speaker 1: avoid experiencing again that kind of hits to the economy.

855
00:40:14,440 --> 00:40:16,759
Speaker 1: I saw a video on Twitter just this week, Matt

856
00:40:16,800 --> 00:40:19,840
Speaker 1: where and people were just castigating this couple who was

857
00:40:19,880 --> 00:40:23,759
Speaker 1: taking out like loans for a lot of real estate

858
00:40:24,320 --> 00:40:27,520
Speaker 1: investments and they were, you know, refinancing, trying to pull

859
00:40:27,560 --> 00:40:29,120
Speaker 1: more money out, and then they were taking out hard

860
00:40:29,160 --> 00:40:30,880
Speaker 1: money loans and they were like, here's how we have

861
00:40:30,920 --> 00:40:32,920
Speaker 1: five million dollars for the assets with no money in

862
00:40:32,920 --> 00:40:35,280
Speaker 1: the game, and it's like that that is a recipe

863
00:40:35,280 --> 00:40:38,600
Speaker 1: for disaster. But that's that's why we're so keen on

864
00:40:38,719 --> 00:40:40,239
Speaker 1: you having more skin in the game. You might work

865
00:40:40,239 --> 00:40:42,040
Speaker 1: out for a little bit, for sure, but you're counting

866
00:40:42,120 --> 00:40:45,040
Speaker 1: on a lot of things working out perfectly exactly, and

867
00:40:45,160 --> 00:40:47,040
Speaker 1: that you don't want to everything to write on the

868
00:40:47,080 --> 00:40:50,160
Speaker 1: fact that everything must go perfectly. And to Thomas's point,

869
00:40:50,160 --> 00:40:53,000
Speaker 1: he shouldn't mess with his current mortgage, we totally agree

870
00:40:53,040 --> 00:40:56,360
Speaker 1: there because those refinance fees they definitely add up. And

871
00:40:56,440 --> 00:40:58,759
Speaker 1: as interest rates have risen, you don't want to ruin

872
00:40:58,760 --> 00:41:00,960
Speaker 1: a good thing. You probably you have a rate in

873
00:41:01,000 --> 00:41:03,800
Speaker 1: the three percent range. If I had a guess and

874
00:41:04,120 --> 00:41:07,279
Speaker 1: going with a cashot refinance now in order to get

875
00:41:07,320 --> 00:41:09,880
Speaker 1: your hands on the you know, those equity dollars to

876
00:41:09,920 --> 00:41:12,240
Speaker 1: buy a property, that's going to cause the moalthly payments

877
00:41:12,280 --> 00:41:15,080
Speaker 1: on your personal home to go up. That's why a helock,

878
00:41:15,239 --> 00:41:17,719
Speaker 1: a home equity line of credit might make sense. But

879
00:41:18,400 --> 00:41:21,000
Speaker 1: as interest rates are rising, the rate on a helock

880
00:41:21,080 --> 00:41:23,480
Speaker 1: could jump up quite a bit in the coming years,

881
00:41:23,719 --> 00:41:25,480
Speaker 1: and so that's gonna make a helock a much less

882
00:41:25,520 --> 00:41:28,959
Speaker 1: attractive offer. Uh, you could consider a home equity loan

883
00:41:29,480 --> 00:41:32,360
Speaker 1: that's gonna have a fixed rate over a specific time period.

884
00:41:32,600 --> 00:41:35,080
Speaker 1: And so these are these are all certainly options for

885
00:41:35,120 --> 00:41:36,920
Speaker 1: you to consider, and which one you choose is going

886
00:41:36,960 --> 00:41:39,480
Speaker 1: to depend on a few things. It's gonna depend on

887
00:41:39,520 --> 00:41:41,480
Speaker 1: how long it's going to take you to pay that

888
00:41:41,560 --> 00:41:44,120
Speaker 1: loan back. But you've got a factor in these costs

889
00:41:44,120 --> 00:41:46,800
Speaker 1: into your equation as to whether or not a rental

890
00:41:46,840 --> 00:41:50,520
Speaker 1: property makes sense for you. The financing part of the

891
00:41:50,520 --> 00:41:53,120
Speaker 1: equation is it's only one factor, but it is definitely

892
00:41:53,200 --> 00:41:56,799
Speaker 1: a significant factor as you're considering an investment property, for sure.

893
00:41:57,160 --> 00:41:59,960
Speaker 1: And the other thing worth mentioning here is that you're

894
00:42:00,040 --> 00:42:02,839
Speaker 1: assuming you need a quick cash boost to make this

895
00:42:02,880 --> 00:42:05,400
Speaker 1: deal happen. I think I think you said cash infusion

896
00:42:05,480 --> 00:42:08,040
Speaker 1: in your question, but I'd also like to challenge you

897
00:42:08,120 --> 00:42:10,880
Speaker 1: to not leverage and tap equity that you already have

898
00:42:11,080 --> 00:42:13,520
Speaker 1: in order to make this deal happen. Right, you said

899
00:42:13,520 --> 00:42:15,560
Speaker 1: that you're investing in the stock market every month. I

900
00:42:15,560 --> 00:42:18,880
Speaker 1: I assume that's with within a tax advantage retirement account,

901
00:42:19,040 --> 00:42:21,200
Speaker 1: but if not, you might want to consider slowing you're

902
00:42:21,239 --> 00:42:24,160
Speaker 1: investing in the stock market, diverting some of those funds

903
00:42:24,160 --> 00:42:26,600
Speaker 1: towards real estate or better yet, is there some way

904
00:42:26,600 --> 00:42:29,680
Speaker 1: that you can increase your income or decrease your expenses

905
00:42:29,719 --> 00:42:32,560
Speaker 1: to to cash flow a down payment that easily puts

906
00:42:32,560 --> 00:42:34,160
Speaker 1: you in the best seat in the house as you'll

907
00:42:34,200 --> 00:42:35,800
Speaker 1: be You'll be sitting on a chunk of cash you

908
00:42:35,840 --> 00:42:38,920
Speaker 1: can then direct towards whatever goal you might have um

909
00:42:38,960 --> 00:42:41,040
Speaker 1: which could change in the future too, you might opt

910
00:42:41,040 --> 00:42:43,359
Speaker 1: to go a different route. But this is the kind

911
00:42:43,360 --> 00:42:45,719
Speaker 1: of thing where over leveraging yourself can come back to

912
00:42:45,719 --> 00:42:48,400
Speaker 1: buy you. The couple I mentioned in that TikTok video,

913
00:42:48,560 --> 00:42:50,840
Speaker 1: maybe we'll post it in the show notes. It's frightening.

914
00:42:51,000 --> 00:42:53,279
Speaker 1: I mean, what could happen to their future. I've talked

915
00:42:53,320 --> 00:42:55,520
Speaker 1: to me about another friend of the neighborhood who talks

916
00:42:55,600 --> 00:42:58,560
Speaker 1: in horror about her in her early twenties when she

917
00:42:58,600 --> 00:43:02,520
Speaker 1: amassed a number of property in California and they she

918
00:43:02,600 --> 00:43:05,560
Speaker 1: was foreclosed on and it ruined her small, thriving real

919
00:43:05,640 --> 00:43:08,440
Speaker 1: estate business as the market tanked there. It can be

920
00:43:08,480 --> 00:43:10,719
Speaker 1: scary to be overleveraged, and it can really come back

921
00:43:10,760 --> 00:43:12,600
Speaker 1: to hurt you. And so, Thomas, that's what we want

922
00:43:12,640 --> 00:43:15,440
Speaker 1: you to We don't want to sound prudish, like, don't

923
00:43:15,520 --> 00:43:18,759
Speaker 1: don't get into this, But yeah, we we like it

924
00:43:18,800 --> 00:43:21,040
Speaker 1: a lot, but we like it under the right circumstances,

925
00:43:21,080 --> 00:43:23,200
Speaker 1: when you're financially prepared to do it. And as far

926
00:43:23,200 --> 00:43:25,560
Speaker 1: as expenses, you know you mentioned hiring a property manager,

927
00:43:25,960 --> 00:43:28,000
Speaker 1: keep in mind that that's, yeah, it's obviously going to

928
00:43:28,040 --> 00:43:30,960
Speaker 1: eat into the profit of that rental. We would rather

929
00:43:31,080 --> 00:43:33,200
Speaker 1: see you self manage, at least for the time being,

930
00:43:33,200 --> 00:43:35,479
Speaker 1: in order to increase your cash flow, because it's also

931
00:43:35,680 --> 00:43:38,360
Speaker 1: massively helpful for first time landlords to just d I

932
00:43:38,600 --> 00:43:41,200
Speaker 1: Y it in order to learn the ropes. Because if

933
00:43:41,200 --> 00:43:43,640
Speaker 1: you're not willing to paint, maybe screen some tenants, perform

934
00:43:43,680 --> 00:43:45,480
Speaker 1: some of those minor fixes, it's gonna be a lot

935
00:43:45,480 --> 00:43:48,560
Speaker 1: more difficult to get your real estate empire ramped up.

936
00:43:48,960 --> 00:43:51,719
Speaker 1: But ultimately, I'm a bit nervous that this could be

937
00:43:51,760 --> 00:43:53,480
Speaker 1: too much of a stretch for you at this point

938
00:43:53,480 --> 00:43:56,680
Speaker 1: in time, based on your lower monthly cash flow, based

939
00:43:56,719 --> 00:43:58,960
Speaker 1: on your lack of down payment at the moment, And

940
00:43:59,000 --> 00:44:01,680
Speaker 1: so while we do love the goal, that the timing

941
00:44:01,920 --> 00:44:04,720
Speaker 1: it just might not be quite right for you. Plus,

942
00:44:04,760 --> 00:44:06,560
Speaker 1: the current state of the market hasn't made it easy

943
00:44:06,640 --> 00:44:09,400
Speaker 1: for even seasoned investors to find properties that make a

944
00:44:09,440 --> 00:44:12,040
Speaker 1: whole lot of financial sense, let alone for you maybe

945
00:44:12,080 --> 00:44:15,960
Speaker 1: just getting started, uh, your specific market there in Frisco.

946
00:44:16,080 --> 00:44:18,480
Speaker 1: It might have more deals in average. I'm not sure,

947
00:44:18,719 --> 00:44:22,240
Speaker 1: but patients, as you salk away more money is probably

948
00:44:22,239 --> 00:44:24,279
Speaker 1: going to be the best course of action. Uh. And

949
00:44:24,560 --> 00:44:27,080
Speaker 1: as you are saving up that money, you're gonna acquire

950
00:44:27,160 --> 00:44:29,360
Speaker 1: more knowledge. You're gonna have a better understanding of the market.

951
00:44:29,600 --> 00:44:31,480
Speaker 1: Should you should be acquiring more not just be looking

952
00:44:31,480 --> 00:44:33,680
Speaker 1: at your market every day and listening and reading the

953
00:44:33,680 --> 00:44:36,280
Speaker 1: real estate or at the very least you might realize

954
00:44:36,320 --> 00:44:39,320
Speaker 1: sort of like we're saying earlier, that your goals might change,

955
00:44:39,480 --> 00:44:41,759
Speaker 1: and so you don't want to be beholden to a

956
00:44:41,760 --> 00:44:44,360
Speaker 1: decision that you made in the past, especially when paying

957
00:44:44,400 --> 00:44:47,000
Speaker 1: interest is involved. We don't want you to regret having

958
00:44:47,040 --> 00:44:48,839
Speaker 1: made that decision, and so we want you to kind

959
00:44:48,840 --> 00:44:51,520
Speaker 1: of be in a position of strength and having at

960
00:44:51,600 --> 00:44:54,960
Speaker 1: least down for that down payment is definitely what we

961
00:44:54,960 --> 00:44:58,239
Speaker 1: would recommend. And I gotta say, if you're looking for

962
00:44:58,280 --> 00:45:01,319
Speaker 1: somewhere to kind of get get your knowledge level ramped

963
00:45:01,400 --> 00:45:04,040
Speaker 1: up quickly, Thomas, the Coach Carson podcast is when we

964
00:45:04,040 --> 00:45:07,160
Speaker 1: would recommend. We've had chat on the show before and

965
00:45:07,200 --> 00:45:09,799
Speaker 1: we really love his philosophy. It's not to get ten

966
00:45:09,800 --> 00:45:12,440
Speaker 1: thousand units and become you know, filthy rich on a

967
00:45:12,440 --> 00:45:15,759
Speaker 1: ton of leverage. It is about slow, methodical, intelligent real

968
00:45:15,840 --> 00:45:18,520
Speaker 1: estate and missing and we just agree with his philosophy

969
00:45:18,560 --> 00:45:21,040
Speaker 1: so much and his approach and and the way he

970
00:45:21,080 --> 00:45:24,080
Speaker 1: teaches people how to do it. So we definitely recommend

971
00:45:24,160 --> 00:45:25,839
Speaker 1: checking that out. All right, Matt, that was the last

972
00:45:25,880 --> 00:45:28,080
Speaker 1: question for this episode, But let's move back to the beer.

973
00:45:28,320 --> 00:45:30,080
Speaker 1: Let's do that that we had. This one is called

974
00:45:30,120 --> 00:45:33,520
Speaker 1: what Terris bowl back? I guess that's how. This is

975
00:45:33,760 --> 00:45:38,680
Speaker 1: by a brewery in Brussels, Brasserie de la Sen. Uh. Yeah,

976
00:45:38,760 --> 00:45:41,359
Speaker 1: well this is an extra Hobbie. What your thoughts? Okay, well,

977
00:45:41,400 --> 00:45:43,200
Speaker 1: this is first off, it's bringing me back through my

978
00:45:43,280 --> 00:45:46,200
Speaker 1: time in Brussels, which not my favorite city except for

979
00:45:46,239 --> 00:45:49,680
Speaker 1: the fact that Cantona is there and that's they got

980
00:45:49,680 --> 00:45:51,640
Speaker 1: that going on. One of my top five favorite places

981
00:45:51,640 --> 00:45:54,200
Speaker 1: in the world. So as a city, it's a decent city,

982
00:45:54,280 --> 00:45:56,960
Speaker 1: I think. But that brewery in particular is amazing. Do

983
00:45:56,960 --> 00:45:59,080
Speaker 1: you think that they'll let Emily come back and spread

984
00:45:59,120 --> 00:46:03,640
Speaker 1: your ashes? They're like the front door you will add

985
00:46:03,680 --> 00:46:06,200
Speaker 1: to the tarawa of Brussels, I think, so this one

986
00:46:06,239 --> 00:46:10,719
Speaker 1: has like some jewel, like some mineral. Oh yeah, that's

987
00:46:10,719 --> 00:46:12,799
Speaker 1: that's Joel that Why do I feel so optimistic every

988
00:46:12,840 --> 00:46:14,960
Speaker 1: drinking it? Well, so this beer was I would say

989
00:46:15,040 --> 00:46:17,640
Speaker 1: dry and bitter, Oh my gosh, yeah, but I kind

990
00:46:17,640 --> 00:46:19,200
Speaker 1: of I kind of liked it, and it had kind

991
00:46:19,239 --> 00:46:21,239
Speaker 1: of some of those some of that Brussels kind of

992
00:46:21,239 --> 00:46:23,800
Speaker 1: tear wagg going on. Those those beers made in Brussels

993
00:46:23,800 --> 00:46:26,360
Speaker 1: have a particular element going on, and I don't, I

994
00:46:26,400 --> 00:46:28,359
Speaker 1: don't not like know how to describe it even. Yeah,

995
00:46:28,400 --> 00:46:31,480
Speaker 1: it's not like offensive bitter, but almost like a palette

996
00:46:31,520 --> 00:46:33,719
Speaker 1: cleansing kind of bitterness going. Yeah, Like like you said,

997
00:46:33,719 --> 00:46:36,880
Speaker 1: it's really dry. It's almost like a lemoni freshness and

998
00:46:36,960 --> 00:46:39,239
Speaker 1: kind of wipes away any flavor of anything else you

999
00:46:39,280 --> 00:46:40,959
Speaker 1: had today. I know you had a burger at lunch.

1000
00:46:41,080 --> 00:46:43,399
Speaker 1: I bet you can't even You probably got zero notes

1001
00:46:43,480 --> 00:46:45,359
Speaker 1: left of burger in your mouth after this beer. All

1002
00:46:45,400 --> 00:46:48,080
Speaker 1: beer now, this one has dominated my palette for sure,

1003
00:46:48,280 --> 00:46:51,160
Speaker 1: but in a good way. And I'll always drink If

1004
00:46:51,200 --> 00:46:53,560
Speaker 1: you hit me a beer from Belgium, I will drink

1005
00:46:53,560 --> 00:46:56,279
Speaker 1: it in a heartbeat because there are something special going

1006
00:46:56,320 --> 00:46:58,719
Speaker 1: on with her beers. A bunch of brewing masters over there,

1007
00:46:58,719 --> 00:47:02,000
Speaker 1: for sure. Our favorite little we the head brewer is

1008
00:47:02,239 --> 00:47:05,000
Speaker 1: from Belgium, like, and he makes incredible beers too. It's

1009
00:47:05,040 --> 00:47:07,960
Speaker 1: like there's something in the water there. I think it

1010
00:47:08,080 --> 00:47:10,640
Speaker 1: just turns out great beer. Quiet literally turns out great

1011
00:47:10,680 --> 00:47:12,719
Speaker 1: beer and great brewers. But I'm glad you and I

1012
00:47:12,719 --> 00:47:17,560
Speaker 1: got to both enjoy Arras Bulba by Brasserie day Lysson.

1013
00:47:17,960 --> 00:47:20,400
Speaker 1: We'll make sure to include a picture of this label

1014
00:47:20,480 --> 00:47:22,320
Speaker 1: that I'm looking at, which is interesting up on the

1015
00:47:22,360 --> 00:47:24,520
Speaker 1: website at how to Money dot com. It's kind of

1016
00:47:24,560 --> 00:47:27,799
Speaker 1: it's it's actually kind of got that European cartoon sort

1017
00:47:27,800 --> 00:47:30,200
Speaker 1: of look to it. Yeah, it's like straight out of Belgium.

1018
00:47:31,360 --> 00:47:33,719
Speaker 1: Stright how to Bressels for sure. But we'll make sure

1019
00:47:33,760 --> 00:47:36,000
Speaker 1: to include any links that we mentioned during this episode

1020
00:47:36,000 --> 00:47:38,640
Speaker 1: as well up on the website at how the Money

1021
00:47:38,760 --> 00:47:41,000
Speaker 1: dot com. And if you're wondering, oh man, Matt and

1022
00:47:41,040 --> 00:47:42,880
Speaker 1: Joel about to wrap this episode up, we're kind of

1023
00:47:42,880 --> 00:47:44,319
Speaker 1: get more Matt and Joel. Well, you can go to

1024
00:47:44,320 --> 00:47:46,600
Speaker 1: our website, like Matt said, or you can sign up

1025
00:47:46,640 --> 00:47:49,359
Speaker 1: for our How the Money newsletter and you can find

1026
00:47:49,440 --> 00:47:51,640
Speaker 1: us in your inbox every week too. That's at how

1027
00:47:51,640 --> 00:47:55,360
Speaker 1: the Money dot Com newsletter. Like I said, it's June,

1028
00:47:55,600 --> 00:47:57,680
Speaker 1: which means that you could subscribe right now for a

1029
00:47:57,719 --> 00:48:01,000
Speaker 1: newsletter and receive tomorrow's newsletter within your inbox, and that

1030
00:48:01,000 --> 00:48:03,560
Speaker 1: will hold you over until our Wednesday episode, Free of Charged,

1031
00:48:03,680 --> 00:48:07,440
Speaker 1: exceptionally charming. That's right. That's gonna be it for this episode, Joe,

1032
00:48:07,520 --> 00:48:10,279
Speaker 1: until next time. Best Friends Out, Best Friends Out,