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Speaker 1: Welcome to Out of Money. I'm Joel and I am Matt,

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Speaker 1: and today we're going to answer some of your listener questions.

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Speaker 2: Welcome back from the weekend, everybody. That's right, We've got

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Speaker 2: listener questions lined up for everybody. A listener is asking

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Speaker 2: about some of the stiff credit card surcharges that he

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Speaker 2: is experiencing whether or not using cards are going to

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Speaker 2: be worth the hassle. Another listener is looking to minimize

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Speaker 2: student loan payments, but not only is he going to

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Speaker 2: be able to do that, but there's sort of like

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Speaker 2: a dual pronged benefit that he's going to be receiving

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Speaker 2: by doing that. And then another listener is looking at

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Speaker 2: some practical steps you can get into house hacking specifically

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Speaker 2: though with multifamily housing, multi family house hacking, what does

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Speaker 2: that look like? So we'll get to that plus more

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Speaker 2: on today's episode beautiful thing, lots of lots to talk about,

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Speaker 2: Matt reclick on the note of housing. Actually, I wanted

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Speaker 2: to mention one of our good friends, Rob. He is

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Speaker 2: a mortgage broker and he's like really good at his

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Speaker 2: job and he I follow him for mortgage advice just

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Speaker 2: he's into it. There's like not really many people on

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Speaker 2: the national level who were talking about like mortgage rates

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Speaker 2: and refinancing. And Rob's a really honest voice in this space,

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Speaker 2: and he's actually in our Facebook group. He comments and

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Speaker 2: chimes in a lot, provides a lot of great advice

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Speaker 2: for people who are looking to take out of mortgage

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Speaker 2: or refinance stuff like that. One of the things he said,

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Speaker 2: which is something that most lenders are not saying right now,

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Speaker 2: is that refinancing isn't always in your best interest and

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Speaker 2: rates are starting to kind of come down, And he

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Speaker 2: posted the other he basically saw contrary advice. Yeah, sure

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Speaker 2: for a lot of folks as they've seen rates come down, right,

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Speaker 2: who are kind of pouncing, jumping on the opportunity to

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Speaker 2: have to refile.

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Speaker 1: He used kind of harsh terms, he said, want to

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Speaker 1: know what's gross local lenders pushing reefis when they know

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Speaker 1: the rates are going down in the near future and

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Speaker 1: that people are then going to be in and devised

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Speaker 1: to refinance again, maybe just a couple of years or

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Speaker 1: potentially even months down the road. Interesting, and refinances cost money,

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Speaker 1: and so it's a significant amount of money. So it's

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Speaker 1: really important to note and you don't know where rates

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Speaker 1: are going on.

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Speaker 2: I don't know. What I was about to ask, is

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Speaker 2: like the only thing, the only red flag that goes

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Speaker 2: up for me is saying, hey, rates are going to

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Speaker 2: continue to go ower? Because are they? I mean most

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Speaker 2: likely yes, certainly, the FED has announced that rate cuts

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Speaker 2: are in the future, but I feel like that's also

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Speaker 2: been on the wall, like that riding has been on

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Speaker 2: the wall for quite a while now, and those predictions

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Speaker 2: have largely fallen flat, and these rate cuts have been

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Speaker 2: non existent when they've been predicted for many, many months.

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Speaker 2: And so yeah, where are rates going from here? I

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Speaker 2: don't know, You don't know. Our friend Rob doesn't know.

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Speaker 2: But it is I think worth noting that you're going

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Speaker 2: to be at least sold a bill of goods about

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Speaker 2: refinancing from some lenders. Potentially they might be reaching out

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Speaker 2: proactively via email because guess what they want business, And

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Speaker 2: if you bought a house from them a year and

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Speaker 2: a half ago, they might say, listen, rates of drop

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Speaker 2: I like three quarters of a point. It might be

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Speaker 2: time for you to save this and such amount of

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Speaker 2: money on your monthly payment by refinancing with us. And

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Speaker 2: one that might mean you avoid shopping around, which is

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Speaker 2: going to be better for you the longer. And you

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Speaker 2: might save more than three quarters of a point by

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Speaker 2: going to the credit union instead of with that lender. Yeah,

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Speaker 2: and then two, it might mean that you refinance a

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Speaker 2: little too early before rates go down further. Again, it's

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Speaker 2: hard to predict, you don't you don't know when or

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Speaker 2: how much rates are set to fall, but it's it's

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Speaker 2: at least worth watching out for that. And you know,

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Speaker 2: when email pops up in your inbox, at least questioning

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Speaker 2: the validity of that statement. Yeah, And I think it's

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Speaker 2: worth looking at your own personal situation too, because, like

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Speaker 2: I think, I think most folks out there are paying

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Speaker 2: attention to their personal circumstances as to whether they refile

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Speaker 2: or as to whether or not they buy a house.

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Speaker 2: Even like Kate and I, we met some new neighbors

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Speaker 2: that recently moved into our neighborhood, and I was like, hey,

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Speaker 2: why'd you move in? Why'd you buy the house or whatever?

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Speaker 2: Why do you know they used to live in town?

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Speaker 2: And you know, of all the reasons they gave, which

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Speaker 2: one wasn't in that lineup rates. What they were talking

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Speaker 2: through were some of the different personal reasons, so that

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Speaker 2: she's pregnant or they're like, oh, well schools, Oh, we

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Speaker 2: know folks that are in the area that there are

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Speaker 2: all these other personal reasons. In granted, I guess this

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Speaker 2: is more for a home purchase than are refiled, but

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Speaker 2: there are also personal reasons when it comes to why

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Speaker 2: why you should or shouldn't refly, and it largely has

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Speaker 2: to do with how long you're gonna stay there in

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Speaker 2: the house, whether or not you're gonna be able to

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Speaker 2: recoup those costs. You need to run the numbers and

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Speaker 2: see if there is a break even point when it

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Speaker 2: comes to the savings that you're going to experience versus

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Speaker 2: the cost of that refinance as opposed to just sort

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Speaker 2: of a knee jerk reaction, I guess is what we're

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Speaker 2: trying to advise folks against.

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Speaker 1: Lower monthly payments by four hundred bucks. That sounds amazing,

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Speaker 1: but I'm gonna sell next year. Oh and I paid

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Speaker 1: thousands of dollars to do the.

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Speaker 2: REFI yeah, that was a mistake, and no one knows

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Speaker 2: I guess if whether or not, like they're actually going

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Speaker 2: to move, but if it's on the radar, okay, well,

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Speaker 2: maybe pump the brakes a little bit. Maybe you're just

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Speaker 2: fine as is. Let it ride and see where things

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Speaker 2: are next year before and by then, like you said,

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Speaker 2: Rob might be like, see told you, it's a full

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Speaker 2: point lower than than where they are actually are at

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Speaker 2: the moment.

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Speaker 1: And I'm not expecting rates to go back down into

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Speaker 1: the two point twenty five percent range.

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Speaker 2: Matter.

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Speaker 1: I talked to a friend this week who is Who's like, yeah,

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Speaker 1: that's that's the rate I've got. I was like, you

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Speaker 1: cashed in at the exact right time for you. But yeah,

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Speaker 1: they're not going.

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Speaker 2: Back to somehow able to catch a falling knife.

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Speaker 1: Yeah, we're not going back to that era. But you know,

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Speaker 1: they might go down race might continue to go down

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Speaker 1: a little bit in the near future.

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Speaker 2: Matt let's mention.

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Speaker 1: The beer we're having on this episode, this one is

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Speaker 1: called Anything Different from Yesterday. This is an IPA by

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Speaker 1: Burial Brewing Company. We'll give our thoughts, specifically a West

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Speaker 1: Coast IPA, which is not typically the kind of IPAs

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Speaker 1: we drink, but time to switch it up. Yeah, for sure,

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Speaker 1: we'll talk about this one later on. And by the way,

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Speaker 1: if you have a money question, we would love to

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Speaker 1: hear from you. Just go to hot to money dot

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Speaker 1: com slash ask for simple directions on how to submit

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Speaker 1: your voice memo to the show, or literally just record

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Speaker 1: a voice memo on your phone, email it over to

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Speaker 1: us and hopefully we can take it next week on

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Speaker 1: the show. This question comes from a listener who wants

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Speaker 1: to buy a property because he's seen his friends do it.

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Speaker 3: Hey, Jolan Matt, this is Adam in Chicago. Some of

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Speaker 3: my friends recently purchased a condo and now I'm seriously

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Speaker 3: thinking about buying property myself. There is so much content

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Speaker 3: out there that I have no clue where to start.

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Speaker 3: So should I get preapproof for a loan? Do you

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Speaker 3: recommend using a realtor? Can I avoid some of those

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Speaker 3: fees by searching for a property myself. I'd prefer to

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Speaker 3: purchase a smaller building with like two or three units

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Speaker 3: rather than a condo. That way I can house hack. Also,

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Speaker 3: I am an architect and would like to do some

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Speaker 3: of my own initial repairs and upgrades to the property.

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Speaker 3: Are these caused something that I can factor into a mortgage.

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Speaker 3: I appreciate any and all advice you'll can provide. Thanks again, all.

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Speaker 2: Right, So, Joel, do you feel what you said before

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Speaker 2: the question was asked. Do you feel like that was

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Speaker 2: a little harsh? Do you want to take it back?

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Speaker 1: But I do think there is a reality and actually

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Speaker 1: I literally just heard something about it this morning that

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Speaker 1: when people do see their friends doing things or whatever

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Speaker 1: your peers are doing, like you tend to kind of

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Speaker 1: one to gain in on the action.

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Speaker 2: This makes you make you think back to when you're

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Speaker 2: a kid, like this is just because all your friends

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Speaker 2: are jumping off the cliff. I mean, you're going to

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Speaker 2: do it too, little jolly? How many your mom did

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Speaker 2: My mom say that little jolly? She probably never called

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Speaker 2: you little? When did you get higher taller than your mom?

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Speaker 1: Junior and well no, I was taller at her before that,

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Speaker 1: but junior high schools when I hit my big ross Burt,

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Speaker 1: I guess that might actually be an.

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Speaker 2: I got tolleran my mom too. No, she never called

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Speaker 2: me jolie. But enough about Joel's childhood growth chart. We

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Speaker 2: should post a picture.

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Speaker 1: I'm sure my mom still has those lines on the

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Speaker 1: inside of the pantry.

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Speaker 4: Well.

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Speaker 2: I do think that when your friends start to experience something,

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Speaker 2: it causes you to re evaluate and say, oh, is

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Speaker 2: this something that I want to do as well. It's

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Speaker 2: not solely because his friends are doing it, which it

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Speaker 2: doesn't mean that it's a bad decision. I'm just saying

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Speaker 2: that sometimes that can influence it, and sometimes that influence

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Speaker 2: can be good.

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Speaker 1: Sometimes it can be bad. Like there was this study

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Speaker 1: mad about people who who smoke and if you if

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Speaker 1: your friends stop smoking, you're gonna stop smoking. That's almost

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Speaker 1: always how it works, or vice versa too, So the

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Speaker 1: trend works in both directions.

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Speaker 2: I don't know.

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Speaker 1: The jumping off her bridge analogy is something that my

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Speaker 1: mom definitely said to me when I was growing up,

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Speaker 1: but so I think our first.

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Speaker 2: I literally did jump off bridges. That's my problem is

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Speaker 2: that you find the train trestle over the river. Oh gosh,

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Speaker 2: that's your mom's like, would you do if your friends

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Speaker 2: and you're like, yeah.

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Speaker 1: Of course, yeah, that's a good Saturday afternoon right there.

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Speaker 1: Depends if there's water below you or not. I guess,

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Speaker 1: of course. I think really just questioning the assumption that

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Speaker 1: you should is important before moving on. And you know,

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Speaker 1: maybe you're planning on moving soon, Adam, or you want

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Speaker 1: to start your own business and buying a condo would

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Speaker 1: leave you strapped for cash. Oh yeah, there's so many

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Speaker 1: things that are worth considering.

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Speaker 2: On those personal life constions.

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Speaker 1: Yes, and so renting out a room in one of

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Speaker 1: your friend's condos. I don't know, maybe that's a more

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Speaker 1: brilliant suggestion, but it's just making sure to take those

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Speaker 1: personal things into consideration. It's crucial performing such a big

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Speaker 1: purchase like this.

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Speaker 2: Absolutely yeah. I mean it's a purchase and a potential

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Speaker 2: mistake with lots of zeros at the end of it.

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Speaker 2: And certainly, Adam, I doubt that you're entering into this

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Speaker 2: decision making process without considering all the different options. But

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Speaker 2: let's get to all of your questions. And you also

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Speaker 2: asked about getting pre approved before you start looking around

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Speaker 2: for properties. Well, yes, absolutely, one hundred percent. You want

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Speaker 2: to do that before you start shopping around. You want

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Speaker 2: to specifically know what your price ranges. And just because

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Speaker 2: you get pre approved, let's say for four hundred fifty

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Speaker 2: thousand dollars, right, Let's say you go to a lender,

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Speaker 2: you get to a bank and they're like, hey, this

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Speaker 2: is perfectly a credit union. Definitely true, more likely to

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Speaker 2: get a better rate there. But just because you're a

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Speaker 2: pre approved for that doesn't mean you should necessarily spend

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Speaker 2: or buy a property that is going to cost you

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Speaker 2: that much. That's just what they're willing to lend you.

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Speaker 2: Chances are you're going to want to spend a decent

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Speaker 2: bit less than that so you can achieve some of

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Speaker 2: these other financial goals that you might have. You don't

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Speaker 2: want to put all of your eggs into one property

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Speaker 2: purchasing basket.

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Speaker 1: In this case, it makes me think of a credit card, Matt.

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Speaker 1: You might open a credit card and they might say, well,

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Speaker 1: you've got a forty thousand dollars credit line.

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Speaker 2: You're like these guys.

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Speaker 1: And if you're a really high credit lid, if you

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Speaker 1: run that sucker up. I mean, you know, I know

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Speaker 1: your credit limits at least three x that, but oh please,

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Speaker 1: But like, think about getting a massive credit limit and

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Speaker 1: then saying, I guess this is what I should be

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Speaker 1: spending or no, no, no, no no. That's certainly how much

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Speaker 1: they will give you. But that's enough rope to hang yourself. Essentially,

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Speaker 1: when you get when you're taking out too much credit

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Speaker 1: than you can actually afford, even if someone will lend

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Speaker 1: that money to you, it doesn't make it a smart move.

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Speaker 2: It's the same thing with student loans.

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Speaker 1: Think about what a private student loan lender is going

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Speaker 1: to give you. They'll offer you a lot of money

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Speaker 1: to go to school, and then think about how poor

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Speaker 1: that decision is going to ultimately be in the end.

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Speaker 1: And given the fact that you want a house hack

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Speaker 1: to here, Adam, I think that is a crucial part

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Speaker 1: of the answer to this question because that means that

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Speaker 1: your home is going to bring in some income, which

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Speaker 1: is the rare exception most people. Their home just costs

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Speaker 1: some money and you if you go this route, well,

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Speaker 1: you can be a little more lenient on the purchase

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Speaker 1: price and on the payment amount because of that fact

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Speaker 1: that you're planning on turning this home into a stream

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Speaker 1: of income, and so it's better to have I would say,

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Speaker 1: a four thousand dollars monthly payment with two thousand dollars

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Speaker 1: worth of likely income than a thirty two hundred dollars

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Speaker 1: mortgage amount with zero income coming from the home, right,

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Speaker 1: Matt Sure. And this is something that people who house

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Speaker 1: hack have found consistently to be a boon to their

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Speaker 1: finances because yeah, they're able to keep that monthly expense

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Speaker 1: lower and potentially even own a nicer place altogether. So

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

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Speaker 1: you know that we're fans of house hacking. It makes

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Speaker 1: the buying decision so much more beneficial, and you could

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Speaker 1: potentially reduce your monthly budget for housing while you're building

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Speaker 1: an equity, you're building a rental portfolio at the same time.

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Speaker 1: And even because you're reducing those monthly expenses, you might

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Speaker 1: be investing more in the stock market at the same time,

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Speaker 1: So you got two investments going at the same time,

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Speaker 1: just ultimately increasing your net worth.

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Speaker 2: The frustraying your holdings.

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Speaker 1: Yeah faster and harder over time. So I just say

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Speaker 1: keep pushing in this direction. It's going to be harder

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Speaker 1: to find the property you want because traditional condos are

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Speaker 1: far more popular, but finding the right duplex or triplex

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Speaker 1: could be the game change, and I think it's worth

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Speaker 1: taking a little more time, being a little more patient

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Speaker 1: to find that right spot.

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Speaker 2: Totally agree. But for everyone out there who's listening and

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Speaker 2: they're saying to themselves, well, I am not going to

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Speaker 2: get a multi family property, realize that you don't necessarily

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Speaker 2: have to do that too, just even the act of

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Speaker 2: getting a roommate, Like I was thinking about this the

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Speaker 2: other day. How I like, when we're off at college,

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Speaker 2: oftentimes we have roommates, right like within a house or

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Speaker 2: an apartment. I literally had a roommate in my room,

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Speaker 2: like in my actual room at college for three years. Yeah,

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Speaker 2: and then you move out into your own place, and

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Speaker 2: all of a sudden, you've got to have your own place,

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Speaker 2: Like where is the disconnect here? Let we go from

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Speaker 2: one extreme to the other, and all of a sudden,

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Speaker 2: she's like, well, I'm an adult now, I should be

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Speaker 2: able to have my own place. I need two orders

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Speaker 2: scare feet by myself. There is there is so much

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Speaker 2: room in between for you to save money, and I

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Speaker 2: think that that could allow folks to come out massively ahead.

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Speaker 2: But Adam also mentioned getting a realtor whether or not

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Speaker 2: he should do that, and I would say if it

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Speaker 2: was me, I definitely would. And that's even I'm talking

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Speaker 2: about present time me like, even with all the experience

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Speaker 2: I've had with real estate now, but certainly if this

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Speaker 2: was my first purchase. And it's not that you're currently

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Speaker 2: a real estate investor, Adam, but I don't want to

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Speaker 2: get one who specifically works with investors, at least not yet.

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Speaker 2: You're not a real estate investor, right, but in the

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Speaker 2: future you might be the reason for this is because

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Speaker 2: multi family housing it's far more popular with the investor

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Speaker 2: community out there than the folks who you know, just

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Speaker 2: want to buy a single family house that's a primary

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Speaker 2: for themselves. And so getting a realtor who knows the

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Speaker 2: multi family market, who knows the different neighborhoods that you're

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Speaker 2: looking at, that's going to make a big difference. They honestly,

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Speaker 2: they might even have access to different deals that don't

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Speaker 2: even land on MLS, just pocket listings or properties that

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Speaker 2: they've heard about that somebody might be looking to get

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Speaker 2: rid of.

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Speaker 1: Which is more common in the investor space than it

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Speaker 1: is in Yeah, a lot.

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Speaker 2: More wheeling and dealing. You could potentially save some massive money,

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Speaker 2: certainly by not hiring an agent, but I think you're

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Speaker 2: more likely to miss out on some of these deals,

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Speaker 2: and you'd have to be just incredibly confident in your

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Speaker 2: ability to write an offer to negotiate with the seller's agent.

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Speaker 2: And so with that in mind, I just want you

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Speaker 2: to avoid just a self own where this could come

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Speaker 2: back and bite you. It makes me think of the

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Speaker 2: shoving the stick and the bicycle spoke meme where you

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Speaker 2: don't want to end up being cheap and an attempt

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Speaker 2: to be fruital. Yeah, yeah, exact.

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Speaker 1: I think you're right, man, that's potentially the cheap move.

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Speaker 1: I think it's important to mention though in this light,

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Speaker 1: because you could discuss payment with your retail, your realtor

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Speaker 1: and say, listen, I know that typically you're used to

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Speaker 1: getting paid three percent, but I read about the National

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Speaker 1: Association of Realtor Settlement and I've seen that more agents

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Speaker 1: are willing to accept it, let's say, a two percent

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Speaker 1: fee instead of three percent, or that some agents are

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Speaker 1: accepting flat fees. And so is that something you're willing

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Speaker 1: to do? If I just literally pay you eight thousand dollars,

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Speaker 1: will you help me find this place I'm looking for?

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Speaker 1: And obviously it depends on what price point you're looking

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Speaker 1: at home and stuff like that too, But having that conversation,

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Speaker 1: that might be the sweet spot, right getting a top

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Speaker 1: notch agent, getting them to represent you, but at a

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Speaker 1: slight discount, like we're actually creating a guide for the

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Speaker 1: site right now too, about negotiating that realtor commission, because

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Speaker 1: in real time, right now, this is this is happening,

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Speaker 1: and we know that people need resources to do that effective. Yeah,

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Speaker 1: a lot more room for discussion given the NRA settlement,

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Speaker 1: right exactly. Yes, So don't leave that stone unturned totally. Yeah,

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Speaker 1: And I love that Adam is willing to do some repairs.

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Speaker 1: He's an architect, so he's willing to kind of draw

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Speaker 1: that out. I assume he's also willing to maybe self

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Speaker 1: manage that, if not do some of the kind of

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Speaker 1: work himself. There's a difference between an architect and the

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Speaker 1: person's willing to actually like rip out the drywall, and.

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Speaker 2: So I was curious about that. How much of the

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Speaker 2: actual work are you doing are you actually willing to do?

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Speaker 2: But I do think I mean, he sounds young, so

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Speaker 2: I know I was much more willing at that point

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Speaker 2: in my life and in my career to do some

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Speaker 2: of that work. But I think that sweat equity is

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Speaker 2: just going to go a long way towards making this

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Speaker 2: purchase and even smarter decision, because if you can see

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Speaker 2: past some ugly carpeting, right, if you can see passing

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Speaker 2: an outdated bathroom, because you know how to diy away

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Speaker 2: some of that nastiness, some of the dated choices that

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Speaker 2: have been made there I think you're going to be

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Speaker 2: more likely to score a deal and reap increased equity there.

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Speaker 2: It's also important to keep in mind to you that

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Speaker 2: we're typically fans of folks saving up twenty percent down

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Speaker 2: to put down on a property, and I don't know,

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Speaker 2: it sounds like you might need more money on hand

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Speaker 2: for some of those renovations if you're willing to do that,

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Speaker 2: and so I guess with that in mind, I think

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Speaker 2: I would be more comfortable with you maybe putting down

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Speaker 2: less if necessary in order to save some of that

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Speaker 2: cash for the purpose of renovating our property, because you

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Speaker 2: mentioned kind of rolling some of those expenses into a loan,

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Speaker 2: and you could get a renovation loan, but those can

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Speaker 2: be a pain in the butt and oftentimes offer worse terms,

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Speaker 2: where I'm thinking of like a construction loan as well,

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Speaker 2: where it morphs into a traditional loan. But the other

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Speaker 2: slippery slope with those two is they're based on the

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Speaker 2: future value of the property, and I hate that you're

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Speaker 2: kind of counting your chickens before they hatch. You're basing

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Speaker 2: what it is that you're going to start paying today

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Speaker 2: on what it is that the property might be worth

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Speaker 2: in the future, And I don't know if it feels

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Speaker 2: a lot like borrowing on credit to me or you're

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Speaker 2: reaching into a future you for something that you want

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Speaker 2: to have today, which not a huge fan.

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Speaker 1: So I think if if Adam Less, say, you can

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Speaker 1: put five percent down right, but then has the cash

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Speaker 1: on hand to do some of the work to this place,

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Speaker 1: and then once he's done fixing it up, it's a

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Speaker 1: place for him to live, but it's also providing a

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Speaker 1: lot of cash flow or at least a minimum, reducing

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Speaker 1: those living expenses significantly for him, and it's getting him

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Speaker 1: down on that real estate investment path. I think that

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00:16:52,960 --> 00:16:54,840
Speaker 1: sounds like a win win to meet. Yeah, so you

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Speaker 1: can have more optionality when we're talking about doing a

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Speaker 1: house hack. And by the way, we'll put a link

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Speaker 1: to our conversation with Craig Curlot Matt in the show

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Speaker 1: Out who was on specifically talking about house hacking. He's

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Speaker 1: like the master at it and just you kind of

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Speaker 1: noted living with roommates and when you think.

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Speaker 2: About all classic the links, the extent.

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Speaker 1: That Craig went to house hack and a little painful

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Speaker 1: in the moment, living in the living room, running out

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Speaker 1: the bedrooms, but then what it's been able to do

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Speaker 1: for his net worth and it's comfort level later on.

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Speaker 1: It's pretty impressive. So if you're interested in house sacking,

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Speaker 1: it's worth listening to that episode.

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Speaker 2: Yes, right, all right, we got more to get to though.

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Speaker 2: We're going to hear from a listener who's looking to

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Speaker 2: minimize his student loans. We'll get to that and more

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Speaker 2: right after this. All right, Matt, we're back.

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Speaker 1: Let's get to the next question. This one is about

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Speaker 1: a really crummy insurance product.

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Speaker 4: Hey, philis is real. From Phoenix, Arizona. I have a

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Speaker 4: question regarding life insurance policies. Hopefully you guys can help me.

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Speaker 4: Back in twenty eighteen, my wife and I signed up

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Speaker 4: for a life insurance policy through a friend. We signed

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Speaker 4: up for what's called an indexed universal life insurance policy,

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Speaker 4: and I have a hard time understanding how it works

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Speaker 4: or what it is. I've done a little bit of

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Speaker 4: digging online to try to inform myself, but I'm still

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Speaker 4: very unclear of how it works and if it's something

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Speaker 4: that is good for us. I just don't see it

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Speaker 4: being a good policy. Ever since, I've looked around for

436
00:18:30,400 --> 00:18:34,159
Speaker 4: life insurance and found that rates are a lot cheaper.

437
00:18:34,680 --> 00:18:38,240
Speaker 4: As far as I know, there is an investment strategy

438
00:18:38,280 --> 00:18:41,439
Speaker 4: attached to this insurance policy. They're trying to keep me

439
00:18:41,480 --> 00:18:44,119
Speaker 4: from canceling the policy. Right now, my wife and I

440
00:18:44,200 --> 00:18:46,879
Speaker 4: are paying seventy five dollars each a month, which is

441
00:18:46,920 --> 00:18:50,280
Speaker 4: the minimum that we can pay to try to keep

442
00:18:50,320 --> 00:18:53,560
Speaker 4: the insurance policy active. I believe I did a quick

443
00:18:53,600 --> 00:18:57,359
Speaker 4: comparison on policy genius to try to see where the

444
00:18:57,440 --> 00:19:00,520
Speaker 4: numbers would land for the same coverage. We could be

445
00:19:00,760 --> 00:19:03,919
Speaker 4: paying as low as like eleven dollars a month for

446
00:19:04,160 --> 00:19:08,119
Speaker 4: term insurance. I'm not sure what makes more sense for

447
00:19:08,200 --> 00:19:11,399
Speaker 4: us here. Thanks and love the show. Keep up the

448
00:19:11,400 --> 00:19:11,840
Speaker 4: good work.

449
00:19:12,240 --> 00:19:14,680
Speaker 1: Oh, Matt, sounds like Israel's got those alarm bells going

450
00:19:14,680 --> 00:19:15,680
Speaker 1: off the red flags, Poppa.

451
00:19:15,760 --> 00:19:17,479
Speaker 2: He knows that this is something he needs to get

452
00:19:17,520 --> 00:19:19,720
Speaker 2: rid of something. You can hear it in his voice, right,

453
00:19:19,920 --> 00:19:22,400
Speaker 2: But I mean the fact that this is something that's

454
00:19:22,440 --> 00:19:24,399
Speaker 2: a bit more complex that he can't explain this is

455
00:19:24,480 --> 00:19:26,840
Speaker 2: Oftentimes we want things to be so straightforward and simple

456
00:19:26,960 --> 00:19:29,920
Speaker 2: enough that you can explain it to you know, explain

457
00:19:29,920 --> 00:19:32,040
Speaker 2: it to me like I'm five. What is the subreddit?

458
00:19:32,240 --> 00:19:34,440
Speaker 2: When folks were whenning things broken down in a very

459
00:19:34,440 --> 00:19:36,400
Speaker 2: simple way, and when this nice thing that you can

460
00:19:36,400 --> 00:19:37,720
Speaker 2: do with index universal.

461
00:19:37,359 --> 00:19:39,160
Speaker 1: Life makes me think that Jeff Fox for the game show,

462
00:19:39,160 --> 00:19:40,320
Speaker 1: are you smarter than the fifth grader?

463
00:19:40,400 --> 00:19:40,560
Speaker 2: Right?

464
00:19:40,640 --> 00:19:43,919
Speaker 1: And like, granted most of us aren't anymore. I know

465
00:19:43,920 --> 00:19:45,600
Speaker 1: I have a hard time helping my sixth grader out

466
00:19:45,640 --> 00:19:48,920
Speaker 1: with some of our homework these days. Yeah, I'm an idiot, Okay,

467
00:19:49,160 --> 00:19:51,880
Speaker 1: I confess, But I do think that it's really important

468
00:19:51,960 --> 00:19:55,240
Speaker 1: to see that as a red flag if the person

469
00:19:55,359 --> 00:19:57,119
Speaker 1: explaining it to you, if you're like I felt like

470
00:19:57,119 --> 00:19:58,840
Speaker 1: there was a bunch of comedy goook coming in and

471
00:19:58,880 --> 00:20:01,680
Speaker 1: going out, and I don't really feel like I effectively

472
00:20:01,760 --> 00:20:04,320
Speaker 1: understand it or could explain it to somebody else. Now, sure,

473
00:20:04,400 --> 00:20:07,560
Speaker 1: then that probably means you should either do more research

474
00:20:07,640 --> 00:20:08,400
Speaker 1: or run away one.

475
00:20:08,320 --> 00:20:10,639
Speaker 2: Of the two. Yeah, And I'll point out here too, Israel,

476
00:20:10,760 --> 00:20:12,159
Speaker 2: Like it sounds like he's doing the right thing, right,

477
00:20:12,200 --> 00:20:14,040
Speaker 2: He's taking care of his family, Like this is something

478
00:20:14,080 --> 00:20:15,600
Speaker 2: that a lot of folks off. Like, there's a lot

479
00:20:15,600 --> 00:20:17,360
Speaker 2: of folks who are hearing this and are thinking, oh, yeah,

480
00:20:17,400 --> 00:20:20,520
Speaker 2: I do need to get some life insurance in play.

481
00:20:20,720 --> 00:20:22,480
Speaker 2: But I guess one thing I wanted to highlight too,

482
00:20:22,560 --> 00:20:25,159
Speaker 2: is I didn't. I heard Israel talking about himself and

483
00:20:25,200 --> 00:20:28,359
Speaker 2: his wife, but not necessarily any kids. And so it

484
00:20:28,440 --> 00:20:30,760
Speaker 2: kind of comes down to your risk profile as to

485
00:20:30,800 --> 00:20:32,679
Speaker 2: what it is that you might want to sign up

486
00:20:32,720 --> 00:20:34,440
Speaker 2: and get life insurance. So I'm starting at a very

487
00:20:34,480 --> 00:20:36,720
Speaker 2: like high broad level before we're kind of drilling, I

488
00:20:36,720 --> 00:20:39,160
Speaker 2: do you even need it? Is exactly yeah, exactly, because

489
00:20:39,160 --> 00:20:40,560
Speaker 2: I know, like when Kate and I first got married,

490
00:20:40,600 --> 00:20:42,560
Speaker 2: we didn't have life insurance. We bought a house, I

491
00:20:42,560 --> 00:20:44,520
Speaker 2: still didn't have life insurance. It wasn't until a couple

492
00:20:44,560 --> 00:20:47,560
Speaker 2: of years in we started having some of these conversations

493
00:20:47,560 --> 00:20:50,040
Speaker 2: and Kates said that, like, Hey, I really like this house,

494
00:20:50,040 --> 00:20:51,760
Speaker 2: and what happens if you die? I was like, I

495
00:20:51,800 --> 00:20:54,920
Speaker 2: don't know, you gotta figure it out. She's like, well,

496
00:20:55,160 --> 00:20:56,960
Speaker 2: I want to stay in this house. Like how about

497
00:20:57,000 --> 00:21:00,399
Speaker 2: you figure it out? Yeah, But basically what we realize

498
00:21:00,440 --> 00:21:01,920
Speaker 2: was that, yeah, we want to I want you to

499
00:21:01,960 --> 00:21:04,680
Speaker 2: be able to were I to die, and which means

500
00:21:04,680 --> 00:21:07,240
Speaker 2: I no longer am able to provide any income for you. Well,

501
00:21:07,240 --> 00:21:09,240
Speaker 2: you still get to keep the house. So we basically

502
00:21:09,240 --> 00:21:11,600
Speaker 2: pulled out I'm pretty sure this two hundred fifty thousand

503
00:21:11,600 --> 00:21:14,680
Speaker 2: dollars policy, which was more than enough to pay off

504
00:21:14,720 --> 00:21:17,480
Speaker 2: that house. And so Israel again with you, I'm not

505
00:21:17,480 --> 00:21:20,040
Speaker 2: totally sure some of the different debt obligations and the

506
00:21:20,160 --> 00:21:22,399
Speaker 2: risk that you're willing to take on. But it's a

507
00:21:22,440 --> 00:21:25,240
Speaker 2: little more optional. Uh, if you have kids, I would

508
00:21:25,280 --> 00:21:27,959
Speaker 2: say it is not optional because you have individuals who

509
00:21:28,000 --> 00:21:30,359
Speaker 2: are fully dependent on you, Whereas if you have a

510
00:21:30,359 --> 00:21:33,639
Speaker 2: significant significant other, if you have a partners, it's a

511
00:21:33,680 --> 00:21:35,560
Speaker 2: little more optional, especially especially if.

512
00:21:35,440 --> 00:21:37,520
Speaker 1: That significant other is bringing an income and their income

513
00:21:37,520 --> 00:21:40,800
Speaker 1: would be sufficient as bills. Right, Like, then you life

514
00:21:40,800 --> 00:21:44,159
Speaker 1: insurance isn't necessarily a necessity. It still might be a

515
00:21:44,240 --> 00:21:46,400
Speaker 1: nice to have, though, it's it's worth having that discussion,

516
00:21:46,440 --> 00:21:48,159
Speaker 1: and especially and we'll get to this in just a second,

517
00:21:48,359 --> 00:21:52,520
Speaker 1: with how cheap term life insurance is specifically, and Israel.

518
00:21:52,240 --> 00:21:54,000
Speaker 2: Mentioned that eleven dollars a month in this question.

519
00:21:54,080 --> 00:21:56,840
Speaker 1: Yes, it's like, okay, well, maybe when it's that cheap

520
00:21:56,880 --> 00:21:59,159
Speaker 1: it becomes a no brainer. And let's start off by

521
00:21:59,200 --> 00:22:01,919
Speaker 1: talking about the complex of this specific product that Israel mentioned,

522
00:22:02,000 --> 00:22:05,200
Speaker 1: indexed Universal Life. I think the complexity actually is what

523
00:22:05,280 --> 00:22:07,040
Speaker 1: kind of makes it sound awesome. It's like, oh, this

524
00:22:07,080 --> 00:22:09,560
Speaker 1: is some Swiss army like product. It's a tool that

525
00:22:09,920 --> 00:22:11,719
Speaker 1: I can think about all the things that Swiss Army

526
00:22:11,760 --> 00:22:14,040
Speaker 1: knives too, Matt. You can open a can, you can

527
00:22:14,480 --> 00:22:18,960
Speaker 1: trim your nails, you can cut the an errants thread

528
00:22:19,080 --> 00:22:20,159
Speaker 1: from your clothing.

529
00:22:20,200 --> 00:22:21,800
Speaker 2: Like there's some little toobetig builts in. Right.

530
00:22:21,840 --> 00:22:23,320
Speaker 1: Plus it's a knife, like you can do so many

531
00:22:23,320 --> 00:22:25,800
Speaker 1: things with this thing. But the problem is the more

532
00:22:25,800 --> 00:22:30,080
Speaker 1: complex the financial product becomes, the more it costs the consumer,

533
00:22:30,160 --> 00:22:32,560
Speaker 1: and oftentimes the less effective of it is on every

534
00:22:32,600 --> 00:22:34,320
Speaker 1: single thing that's trying to do. In the case the

535
00:22:34,359 --> 00:22:37,920
Speaker 1: Swiss Army knife, Matt, that knife, it's not a great knife.

536
00:22:38,040 --> 00:22:40,960
Speaker 1: It's fine in the wild right when you absolutely need something.

537
00:22:41,280 --> 00:22:43,520
Speaker 1: But there are like millions of knives that are made.

538
00:22:43,480 --> 00:22:45,000
Speaker 2: They're better than that. It's not what you would use

539
00:22:45,000 --> 00:22:47,520
Speaker 2: in the kitchen if you're prepping for dinner, exact. You

540
00:22:47,560 --> 00:22:49,679
Speaker 2: want something that's all that Like, this is all a

541
00:22:49,760 --> 00:22:52,320
Speaker 2: chef chef knife does. It cuts up meat and veggies

542
00:22:52,640 --> 00:22:54,320
Speaker 2: and that's all it does. That's right, Like, there are

543
00:22:54,359 --> 00:22:57,760
Speaker 2: fewer nooks and crannies and places for the manufacturer to

544
00:22:57,840 --> 00:23:00,159
Speaker 2: hide fees. And that's the problem when it comes of

545
00:23:00,200 --> 00:23:03,400
Speaker 2: these different complex financial products, is that there are multiple

546
00:23:03,440 --> 00:23:07,000
Speaker 2: opportunities for them to basically pad their bottom line.

547
00:23:07,040 --> 00:23:08,639
Speaker 1: Yeah, and so that's how they make money. It's like

548
00:23:08,640 --> 00:23:12,160
Speaker 1: every piece of that structure is inferior to each one

549
00:23:12,160 --> 00:23:14,399
Speaker 1: of those things, being set aside on its own totally.

550
00:23:14,480 --> 00:23:16,880
Speaker 1: And so when you combine insurance and investing, you don't

551
00:23:16,920 --> 00:23:20,120
Speaker 1: get the optimized version of either. Right and index universal

552
00:23:20,160 --> 00:23:23,280
Speaker 1: life policies. They are complex and expensive products. And so

553
00:23:23,800 --> 00:23:26,720
Speaker 1: of course this company is trying to keep you from

554
00:23:26,720 --> 00:23:29,840
Speaker 1: canceling Israel. That would cost them money and it would

555
00:23:29,840 --> 00:23:31,440
Speaker 1: save you money. And they're like, no, no, no, do you

556
00:23:31,480 --> 00:23:34,119
Speaker 1: stick with us because you need this product for your family.

557
00:23:34,119 --> 00:23:36,679
Speaker 1: Don't you care about your family? And you mentioned the

558
00:23:36,680 --> 00:23:39,040
Speaker 1: price difference between the policy that you currently have and

559
00:23:39,080 --> 00:23:42,000
Speaker 1: what a term policy would cost you. That is normal, right,

560
00:23:42,040 --> 00:23:44,120
Speaker 1: You would be saving a ton of money every month,

561
00:23:44,480 --> 00:23:47,120
Speaker 1: and you could funnel that savings instead into a much better,

562
00:23:47,160 --> 00:23:49,520
Speaker 1: low cost retirement account. It makes all the sense in

563
00:23:49,560 --> 00:23:51,439
Speaker 1: the world. I think, feed or ditch this thing, but

564
00:23:51,800 --> 00:23:52,360
Speaker 1: cut and run.

565
00:23:52,440 --> 00:23:52,879
Speaker 2: Yeah, but the.

566
00:23:53,080 --> 00:23:56,160
Speaker 1: Agent the insurance company is going to try to tell

567
00:23:56,160 --> 00:23:57,080
Speaker 1: you otherwise.

568
00:23:56,760 --> 00:23:59,000
Speaker 2: That's right. Yeah, So let's get to the he mentioned

569
00:23:59,040 --> 00:24:02,000
Speaker 2: eleven dollars a month is what they could what they

570
00:24:02,000 --> 00:24:04,280
Speaker 2: could be paying, which almost sounds a little too good

571
00:24:04,320 --> 00:24:06,399
Speaker 2: to be true, but it's actually not too good to

572
00:24:06,440 --> 00:24:09,199
Speaker 2: be true because whole life insurance products cost something like

573
00:24:09,240 --> 00:24:12,040
Speaker 2: ten times more what a term policy is going to

574
00:24:12,080 --> 00:24:14,680
Speaker 2: set you back on average, So keep that in mind.

575
00:24:14,720 --> 00:24:18,040
Speaker 2: Term insurance it's truly affordable, especially for young folks. In

576
00:24:18,080 --> 00:24:21,200
Speaker 2: the term life insurance Matt, it's frugal, not cheap. No, yes,

577
00:24:21,280 --> 00:24:23,040
Speaker 2: you might think it's so cheap, I must beginning an

578
00:24:23,080 --> 00:24:25,400
Speaker 2: inferior product, or this might not offer the same coverage

579
00:24:25,600 --> 00:24:28,439
Speaker 2: or peace of mind. And there are differences, and we

580
00:24:28,440 --> 00:24:31,000
Speaker 2: could talk about all the differences between whole life and

581
00:24:31,080 --> 00:24:33,639
Speaker 2: term life products, but the truth is term life is

582
00:24:33,680 --> 00:24:35,920
Speaker 2: going to suit most people better most of the time,

583
00:24:36,040 --> 00:24:37,800
Speaker 2: and it's gonna save a ton of money exactly like

584
00:24:37,840 --> 00:24:41,480
Speaker 2: the combination of that plus let's say a roth iray

585
00:24:41,600 --> 00:24:44,440
Speaker 2: like that is the perfect combination for most folks. That's

586
00:24:44,440 --> 00:24:46,120
Speaker 2: going to allow you to protect your family, so you're

587
00:24:46,160 --> 00:24:49,080
Speaker 2: doing the smart adult thing there, but also investing for

588
00:24:49,160 --> 00:24:52,520
Speaker 2: your future while avoiding those ludicrous fees that they've yeah

589
00:24:52,600 --> 00:24:54,360
Speaker 2: are able to slip into all the nix and cranies

590
00:24:54,400 --> 00:24:56,359
Speaker 2: of that pocket nfe when you say, Nixon grannies. You know,

591
00:24:56,440 --> 00:24:58,199
Speaker 2: that makes me think of Englishmunglish muffins.

592
00:24:58,280 --> 00:25:00,600
Speaker 1: And when you butter an English muffin, Matt, what seeps

593
00:25:00,600 --> 00:25:02,480
Speaker 1: into a thoseknoks and cranies? All the butter goes straight

594
00:25:02,480 --> 00:25:05,040
Speaker 1: in there, as opposed to like lingering on top of

595
00:25:05,080 --> 00:25:05,560
Speaker 1: a piece.

596
00:25:05,400 --> 00:25:08,159
Speaker 2: Of toast, Except that in this metaphor, you want the

597
00:25:08,280 --> 00:25:11,040
Speaker 2: nooks and crannies because you know, the can consumer right

598
00:25:11,160 --> 00:25:11,600
Speaker 2: the butter.

599
00:25:11,720 --> 00:25:13,439
Speaker 1: So in some cases nooks and cranies are good and

600
00:25:13,480 --> 00:25:17,240
Speaker 1: others they're bad. English muffins fantastic When it comes to

601
00:25:17,280 --> 00:25:19,920
Speaker 1: these fee laden vehicles, though, you want to avoid them.

602
00:25:20,160 --> 00:25:22,040
Speaker 1: So what should you do, Israel? When it comes down

603
00:25:22,080 --> 00:25:23,760
Speaker 1: to it, We'll just get to brass tacks. We would

604
00:25:23,800 --> 00:25:27,320
Speaker 1: ditch this policy despite the protests of the life insurance company.

605
00:25:27,400 --> 00:25:29,320
Speaker 1: You've had it for six years. And I think the

606
00:25:29,359 --> 00:25:31,919
Speaker 1: hardest part here, Matt is people are like, oh, I've

607
00:25:31,920 --> 00:25:33,760
Speaker 1: paid so much into this policy. I've had it around

608
00:25:33,800 --> 00:25:36,600
Speaker 1: for a number of years now, and I can't just

609
00:25:36,760 --> 00:25:38,879
Speaker 1: kind of scrap it and be done with it, can I?

610
00:25:39,160 --> 00:25:41,560
Speaker 1: That feels like falling on.

611
00:25:41,480 --> 00:25:42,400
Speaker 2: Some sort of knife.

612
00:25:42,520 --> 00:25:44,720
Speaker 1: But the truth is, when it comes down to it, Israel,

613
00:25:44,760 --> 00:25:46,920
Speaker 1: you don't want to throw good money after bad. Being

614
00:25:46,920 --> 00:25:50,240
Speaker 1: properly insured is crucial, but insurance is not a wealth builder.

615
00:25:50,920 --> 00:25:53,080
Speaker 1: It's there to protect your family, of course, which term

616
00:25:53,080 --> 00:25:55,480
Speaker 1: insurance does incredibly well, and it's much cheaper, as we've

617
00:25:55,520 --> 00:25:58,000
Speaker 1: just noted, so option for one of the cheaper term

618
00:25:58,040 --> 00:26:01,160
Speaker 1: policies that you were looking at, and the typical rule

619
00:26:01,240 --> 00:26:03,199
Speaker 1: is to be covered for ten times your income. That

620
00:26:03,240 --> 00:26:04,760
Speaker 1: doesn't tell the whole story. We'll put a link in

621
00:26:04,760 --> 00:26:07,000
Speaker 1: the show notes to an article we have about life insurance.

622
00:26:07,160 --> 00:26:09,360
Speaker 1: You might eventually need more of it too if you're

623
00:26:09,359 --> 00:26:11,280
Speaker 1: early on in the wealth building phase of your life,

624
00:26:11,359 --> 00:26:14,160
Speaker 1: but that is a solid starting point, so make sure

625
00:26:14,280 --> 00:26:16,679
Speaker 1: I would ditch this insurance policy and get a different,

626
00:26:16,720 --> 00:26:19,760
Speaker 1: much cheaper insurance policy. And like you mentioned, Matt, the

627
00:26:19,840 --> 00:26:22,080
Speaker 1: roth Ira is probably a great option for all those

628
00:26:22,080 --> 00:26:23,000
Speaker 1: extra dollars too.

629
00:26:22,960 --> 00:26:26,000
Speaker 2: That's right, So needless to say Index Universal Life. We're

630
00:26:26,000 --> 00:26:28,320
Speaker 2: not fans of those plans, Joel. Let's now hear from

631
00:26:28,359 --> 00:26:30,720
Speaker 2: our next listener question, Joel. This is a listener who

632
00:26:30,760 --> 00:26:33,160
Speaker 2: is thinking about addition, he's going to kick his roth

633
00:26:33,200 --> 00:26:34,119
Speaker 2: Ira to the curb.

634
00:26:34,720 --> 00:26:36,720
Speaker 5: Hi, Matt and Joel, my name is Owen and I'm

635
00:26:36,720 --> 00:26:39,040
Speaker 5: calling from Washington State. I have a question about tax

636
00:26:39,080 --> 00:26:42,840
Speaker 5: deferred retirement accounts and student loans. I'm a federal employee

637
00:26:42,840 --> 00:26:45,040
Speaker 5: working towards public service loan forgiveness, and I have just

638
00:26:45,119 --> 00:26:47,040
Speaker 5: under four years to go, so my goal is to

639
00:26:47,119 --> 00:26:49,800
Speaker 5: keep my monthly payments as low as possible. I'm on

640
00:26:49,840 --> 00:26:51,960
Speaker 5: the pay as you earn plan, which caps payments at

641
00:26:52,000 --> 00:26:55,000
Speaker 5: ten percent of adjusted gross income. It recently occurred to

642
00:26:55,040 --> 00:26:57,520
Speaker 5: me that if I switched my retirement contributions from ROTH

643
00:26:57,600 --> 00:27:00,440
Speaker 5: to traditional, that would lower my taxable income, which would

644
00:27:00,440 --> 00:27:03,560
Speaker 5: help to keep those loan payments down. I also recently

645
00:27:03,560 --> 00:27:06,360
Speaker 5: got promoted and again maxing out my retirement contributions, which

646
00:27:06,400 --> 00:27:09,119
Speaker 5: means this strategy could theoretically reduce my taxbile income by

647
00:27:09,119 --> 00:27:11,679
Speaker 5: twenty three thousand dollars. It seems to me that I

648
00:27:11,680 --> 00:27:13,840
Speaker 5: can either send more money to my student loans, in

649
00:27:13,880 --> 00:27:16,359
Speaker 5: which case it's just gone, or I can send more

650
00:27:16,359 --> 00:27:18,320
Speaker 5: money to my retirement accounts, where I'll be able to

651
00:27:18,320 --> 00:27:20,520
Speaker 5: grow for the next thirty years. I know I'll pay

652
00:27:20,520 --> 00:27:22,200
Speaker 5: taxes on it later, but it seems like a good

653
00:27:22,200 --> 00:27:25,199
Speaker 5: trade off. My questions are, first, am I right that

654
00:27:25,280 --> 00:27:28,399
Speaker 5: making traditional contributions would lower my adjusted gross income in

655
00:27:28,440 --> 00:27:31,199
Speaker 5: a way that matters for student loan payments, And if so,

656
00:27:31,440 --> 00:27:33,960
Speaker 5: what else should I be considering? Thanks a lot, look

657
00:27:34,000 --> 00:27:35,640
Speaker 5: forward to hearing what you have today, Matt.

658
00:27:35,640 --> 00:27:38,640
Speaker 1: It's super rare that I would help somebody. Don't put

659
00:27:38,640 --> 00:27:40,720
Speaker 1: money in your wroth, but this that might be the

660
00:27:40,720 --> 00:27:41,480
Speaker 1: case here, So we'll get to that.

661
00:27:41,520 --> 00:27:42,879
Speaker 2: Did you hear how is audio cut out there at

662
00:27:42,880 --> 00:27:44,679
Speaker 2: the end? I did? It almost sounded like we were

663
00:27:44,680 --> 00:27:47,040
Speaker 2: talking to him on the phone and somebody's calling me.

664
00:27:48,160 --> 00:27:49,399
Speaker 2: Do you cell phones still do that?

665
00:27:49,400 --> 00:27:51,399
Speaker 1: I think Owen's mom was trying to get or at

666
00:27:51,400 --> 00:27:53,920
Speaker 1: that very moment. Or is that just landlines? I literally

667
00:27:53,960 --> 00:27:54,520
Speaker 1: can't remember.

668
00:27:54,880 --> 00:27:56,640
Speaker 2: It's like just no, it's just landlines. I think, Yeah,

669
00:27:56,680 --> 00:27:59,359
Speaker 2: So I don't know. I might be on the phone.

670
00:27:59,720 --> 00:27:59,919
Speaker 5: I know.

671
00:28:00,040 --> 00:28:02,359
Speaker 2: That's what's so funny, is like I literally talk so

672
00:28:02,440 --> 00:28:04,520
Speaker 2: little on the phone. I can't remember what it does

673
00:28:04,640 --> 00:28:07,000
Speaker 2: with somebody. If I'm talking to somebody and someone calls

674
00:28:07,080 --> 00:28:09,200
Speaker 2: that person, does it goes silent on the cell phone

675
00:28:09,200 --> 00:28:10,359
Speaker 2: like it used to on the because I know it

676
00:28:10,440 --> 00:28:12,000
Speaker 2: used to do that on the landline. I remember that

677
00:28:12,040 --> 00:28:12,400
Speaker 2: for sure.

678
00:28:12,640 --> 00:28:16,080
Speaker 1: Isn't that funny? I just talked to Yeah, there's a beep.

679
00:28:16,119 --> 00:28:19,040
Speaker 1: It's less like a silence and there's more like a beep. Yeah,

680
00:28:19,040 --> 00:28:20,760
Speaker 1: there's a beep that alerts you to the fact someone

681
00:28:20,760 --> 00:28:22,640
Speaker 1: else is going, but you don't hear the beep if

682
00:28:22,760 --> 00:28:25,200
Speaker 1: someone's calling your friend. Oh no, that's what I'm talking.

683
00:28:25,320 --> 00:28:28,200
Speaker 2: Yeah, I don't know. I'm who knows anyway.

684
00:28:28,320 --> 00:28:30,880
Speaker 1: Okay, just first things first, on Owen, I wanted to say,

685
00:28:30,920 --> 00:28:34,520
Speaker 1: like Matt, anybody who has been in this process for

686
00:28:34,600 --> 00:28:37,280
Speaker 1: public service loan forgiveness, those people have made out like

687
00:28:37,320 --> 00:28:40,400
Speaker 1: bandits in recent years. Right, they're in the extended student

688
00:28:40,440 --> 00:28:43,720
Speaker 1: loan payment pause. Uh, it's just kind of incredible that

689
00:28:44,000 --> 00:28:47,240
Speaker 1: basically years and years and years of not paying count

690
00:28:47,280 --> 00:28:51,160
Speaker 1: as on time payments for full forgiveness. So, uh, just

691
00:28:51,240 --> 00:28:53,400
Speaker 1: first off, Congratstowe and everyone else out there who's on

692
00:28:53,400 --> 00:28:56,719
Speaker 1: this path, because if you're on that PSLF route, if

693
00:28:56,720 --> 00:28:59,920
Speaker 1: you're kind of on that train riding towards forgiveness, you're

694
00:29:00,000 --> 00:29:02,120
Speaker 1: train's been chugging along, or you've been able to kind

695
00:29:02,120 --> 00:29:02,480
Speaker 1: of kick.

696
00:29:02,360 --> 00:29:04,320
Speaker 2: Back and relax, which is pretty cool. Yeah. Yeah, he's

697
00:29:04,360 --> 00:29:06,160
Speaker 2: got four years left, which is awesome, and I think

698
00:29:06,200 --> 00:29:09,280
Speaker 2: this is a great goal to keep his monthly payments low.

699
00:29:09,560 --> 00:29:12,760
Speaker 2: And that's obviously because you don't mind carrying that bigger balance,

700
00:29:12,760 --> 00:29:14,440
Speaker 2: becauess it's just going to be forgiven at the end

701
00:29:14,440 --> 00:29:15,040
Speaker 2: of those four years.

702
00:29:15,120 --> 00:29:17,040
Speaker 1: Yeah, typically we're not like, oh yeah, balloon that student

703
00:29:17,040 --> 00:29:19,280
Speaker 1: loan balance up as high as you want. But if

704
00:29:19,280 --> 00:29:21,000
Speaker 1: it's going to be forgiven and the whole amount, no

705
00:29:21,080 --> 00:29:21,880
Speaker 1: questions asked, it's.

706
00:29:21,800 --> 00:29:25,000
Speaker 2: Just change the verbidge here, like you are looking to maximize, right,

707
00:29:25,080 --> 00:29:28,320
Speaker 2: the forgiveness potential that is ahead for you, Owen. It's

708
00:29:28,440 --> 00:29:31,160
Speaker 2: very very good use of the American language. That, by

709
00:29:31,200 --> 00:29:34,000
Speaker 2: the way, when debts are forgiven, sometimes the forgiven amount

710
00:29:34,080 --> 00:29:36,760
Speaker 2: can be taxable. And that's actually not the case for

711
00:29:36,880 --> 00:29:40,280
Speaker 2: public service loan forgiveness folks on the federal level, but

712
00:29:40,360 --> 00:29:43,040
Speaker 2: it can be on the state level. So that is

713
00:29:43,040 --> 00:29:45,000
Speaker 2: one thing you want to make sure, Owen, that you

714
00:29:45,040 --> 00:29:46,960
Speaker 2: look into make sure that if that is the case

715
00:29:46,960 --> 00:29:48,960
Speaker 2: for you, that you are prepared for then that you've

716
00:29:48,960 --> 00:29:49,880
Speaker 2: got those dollars set aside.

717
00:29:49,920 --> 00:29:51,880
Speaker 1: Right, If you live in a state with state taxes

718
00:29:52,000 --> 00:29:56,000
Speaker 1: and they tax that forgiveness amount, it's kind of weird thing,

719
00:29:56,040 --> 00:29:58,000
Speaker 1: Matt to be forgiven to debt and then o tax

720
00:29:58,080 --> 00:29:59,960
Speaker 1: on the amount that you're forgiven, but at least from

721
00:30:00,080 --> 00:30:01,840
Speaker 1: federal level, that is not something you need to be

722
00:30:01,840 --> 00:30:05,240
Speaker 1: worried about. One way to keep those payments low, by

723
00:30:05,240 --> 00:30:07,640
Speaker 1: the way, is to do exactly what Owen is doing,

724
00:30:07,680 --> 00:30:10,960
Speaker 1: which is investing more and specifically to do so in

725
00:30:11,120 --> 00:30:14,040
Speaker 1: pre tax accounts, because that's going to lower the agi

726
00:30:14,160 --> 00:30:17,520
Speaker 1: the adjusted gross income significantly, which is going to then

727
00:30:17,600 --> 00:30:21,440
Speaker 1: results in a lower required student loan payment. So, Matt,

728
00:30:21,440 --> 00:30:23,800
Speaker 1: this is one of those case where going the Wroth

729
00:30:23,960 --> 00:30:27,400
Speaker 1: route it makes less sense than it traditionally does for people.

730
00:30:27,480 --> 00:30:29,959
Speaker 2: Right, for big of fans, we are of the WROTH. Yeah,

731
00:30:30,040 --> 00:30:31,720
Speaker 2: I would not be looking at the ROTH in this case.

732
00:30:31,760 --> 00:30:32,160
Speaker 2: That's right.

733
00:30:32,320 --> 00:30:34,880
Speaker 1: And I think for some folks Matt too, with like, oh,

734
00:30:34,920 --> 00:30:38,680
Speaker 1: should I to toss my money into a traditional account

735
00:30:38,720 --> 00:30:40,920
Speaker 1: in order to lower my student loan payment and you're

736
00:30:40,960 --> 00:30:43,880
Speaker 1: not working towards PSLF, the answer might be no, don't

737
00:30:43,880 --> 00:30:45,680
Speaker 1: do that. Yeah, it's going to lower your payment, but

738
00:30:45,960 --> 00:30:47,920
Speaker 1: that balance is going to grow over time and you

739
00:30:48,000 --> 00:30:50,959
Speaker 1: might not actually be able to achieve forgiveness. But with PSLF,

740
00:30:51,000 --> 00:30:53,520
Speaker 1: that's baked in the cake that's coming down the pike

741
00:30:53,560 --> 00:30:56,080
Speaker 1: for him, So why not let that balance grow and

742
00:30:56,160 --> 00:30:58,360
Speaker 1: at the same time, at least in the next four years.

743
00:30:58,360 --> 00:31:00,480
Speaker 1: By the way, I think that's important to mention until

744
00:31:00,520 --> 00:31:03,800
Speaker 1: we get to this forgiveness amount totally. Once we get there,

745
00:31:04,000 --> 00:31:05,400
Speaker 1: then it probably makes sense to go back to those

746
00:31:05,440 --> 00:31:06,040
Speaker 1: WROTH accounts.

747
00:31:06,080 --> 00:31:07,240
Speaker 2: So that's what I would do. Yeah, totally.

748
00:31:07,280 --> 00:31:09,800
Speaker 1: Yeah, So keep keep maxing at your contributions, keep prioritizing

749
00:31:09,840 --> 00:31:12,440
Speaker 1: traditional over the WROTH for now, because it's going to

750
00:31:12,440 --> 00:31:15,120
Speaker 1: lower the AGI, which means lower payments, which means more

751
00:31:15,200 --> 00:31:16,240
Speaker 1: forgiveness later on.

752
00:31:16,320 --> 00:31:19,640
Speaker 2: Yeah, maximize that forgiveness again. And we're assuming that he's

753
00:31:19,680 --> 00:31:22,720
Speaker 2: talking about a traditional versus WROTH four O one K,

754
00:31:22,840 --> 00:31:25,960
Speaker 2: but I'd also consider opening up a traditional IRA, because

755
00:31:25,960 --> 00:31:28,640
Speaker 2: if your cash flow situation can handle it, you're going

756
00:31:28,680 --> 00:31:30,960
Speaker 2: to be doing two awesome things. You're going to be

757
00:31:30,960 --> 00:31:34,160
Speaker 2: reducing that AGI even more for student loan purposes, but

758
00:31:34,240 --> 00:31:37,280
Speaker 2: then you're also investing more for your future as well,

759
00:31:37,760 --> 00:31:40,240
Speaker 2: and we're talking about investing more than thirty thousand dollars

760
00:31:40,520 --> 00:31:43,120
Speaker 2: each year moving forward if you're able to do both

761
00:31:43,160 --> 00:31:44,400
Speaker 2: of those things, which is fantastic.

762
00:31:44,440 --> 00:31:46,680
Speaker 1: And then on top of that, one of those massive

763
00:31:46,680 --> 00:31:49,960
Speaker 1: monthly budget line items is eradicated, fully gone from your

764
00:31:50,000 --> 00:31:53,680
Speaker 1: life and so you're in like peak financial situation totally.

765
00:31:53,720 --> 00:31:56,240
Speaker 1: Something else worth mentioning, Matt, if Owen wants to push

766
00:31:56,240 --> 00:31:58,719
Speaker 1: the envelope here is if he has access to an HSA,

767
00:31:58,840 --> 00:31:59,959
Speaker 1: he can max that out too.

768
00:32:00,080 --> 00:32:02,280
Speaker 2: Yeah, he didn't mention that, but that's yet another way.

769
00:32:02,480 --> 00:32:06,280
Speaker 1: Reducing the AGI even further, you know, lowering that monthly

770
00:32:06,320 --> 00:32:09,680
Speaker 1: payment maximizing, as you said, the potential for student loan forgiveness.

771
00:32:10,000 --> 00:32:13,760
Speaker 1: Basically trying to look under all those rocks, trying to

772
00:32:13,800 --> 00:32:16,320
Speaker 1: hit up all of those pre tax accounts if they're

773
00:32:16,360 --> 00:32:18,480
Speaker 1: available to you is the way to go. Of course,

774
00:32:18,840 --> 00:32:20,640
Speaker 1: if you're still abilt to pay the bills on top

775
00:32:20,640 --> 00:32:22,600
Speaker 1: of all that investing totally, you probably don't want to

776
00:32:22,600 --> 00:32:24,840
Speaker 1: be like racking up credit card debt in order to

777
00:32:24,880 --> 00:32:26,640
Speaker 1: be investing the lower of the AGI like that would

778
00:32:26,640 --> 00:32:29,320
Speaker 1: be a non optimized route. But if you're able to

779
00:32:29,360 --> 00:32:32,080
Speaker 1: do all the above, that just means fewer dollars you

780
00:32:32,120 --> 00:32:34,240
Speaker 1: have to throw towards that student loan more than ultimately

781
00:32:34,240 --> 00:32:35,240
Speaker 1: gets forgiven totally.

782
00:32:35,240 --> 00:32:36,800
Speaker 2: And what I love about this too is the fact,

783
00:32:36,800 --> 00:32:38,800
Speaker 2: like a lot of you can be critical of student

784
00:32:38,840 --> 00:32:40,560
Speaker 2: loans and how much a cost to go to college.

785
00:32:40,600 --> 00:32:43,040
Speaker 2: You can be or you can be critical of student

786
00:32:43,120 --> 00:32:46,320
Speaker 2: and forgiveness, right, Or maybe you're not even critical of

787
00:32:46,360 --> 00:32:48,640
Speaker 2: the student une forgiveness, but maybe you're critical of how

788
00:32:49,080 --> 00:32:51,560
Speaker 2: the student une forgiveness came about. Right. But we try

789
00:32:51,600 --> 00:32:54,160
Speaker 2: to avoid all that because it's more political than anything else.

790
00:32:54,240 --> 00:32:56,560
Speaker 2: I'm just a critical of college mascots. Matt. Okay, the

791
00:32:56,560 --> 00:32:58,360
Speaker 2: blue devils come on, like, what is that all about?

792
00:32:58,680 --> 00:33:00,520
Speaker 2: But well, I think we can all get is the

793
00:33:00,520 --> 00:33:02,959
Speaker 2: fact that this I like how this is structured and

794
00:33:02,960 --> 00:33:06,280
Speaker 2: how it's been designed because you are incentivizing individuals to

795
00:33:07,080 --> 00:33:10,360
Speaker 2: frontload the sacrifice to invest more early on, which only

796
00:33:10,440 --> 00:33:12,240
Speaker 2: is setting you up to be in a stronger position

797
00:33:12,360 --> 00:33:15,320
Speaker 2: further down the road while reducing the what you're paying

798
00:33:15,320 --> 00:33:17,840
Speaker 2: to student loans. I just love the instead of structure

799
00:33:17,840 --> 00:33:20,680
Speaker 2: that has been created with the reduced payments. Yeah, one

800
00:33:20,720 --> 00:33:22,400
Speaker 2: other thing too, I don't even know if this is

801
00:33:22,400 --> 00:33:25,600
Speaker 2: worth bringing up to but paying taxes on your investment

802
00:33:25,600 --> 00:33:27,480
Speaker 2: dollars later down the road, it's not a terrible thing.

803
00:33:27,560 --> 00:33:30,240
Speaker 2: Like we are fans of the wroth, but also having

804
00:33:30,240 --> 00:33:32,760
Speaker 2: some money in traditional accounts it gives you some flexibility,

805
00:33:32,880 --> 00:33:36,320
Speaker 2: especially as more folks are considering taking a sabbatical or

806
00:33:36,360 --> 00:33:39,040
Speaker 2: maybe taking a break between in between careers. You've got

807
00:33:39,040 --> 00:33:41,760
Speaker 2: these different periods of time when you can significantly reduce

808
00:33:42,200 --> 00:33:43,840
Speaker 2: the tax that you are paying on the dollars that

809
00:33:43,840 --> 00:33:46,040
Speaker 2: you're setting aside for retirement. I mean, you might be

810
00:33:46,080 --> 00:33:48,600
Speaker 2: saving like anywhere like twenty percent wouldn't be a far

811
00:33:48,760 --> 00:33:50,840
Speaker 2: wouldn't be a stretch at all to think about the

812
00:33:50,880 --> 00:33:53,680
Speaker 2: savings in tax on the dollars that you're putting aside

813
00:33:53,760 --> 00:33:55,800
Speaker 2: in some of those retirement accounts as well. So I

814
00:33:55,880 --> 00:33:58,160
Speaker 2: just like that there are additional options that you gain

815
00:33:58,640 --> 00:34:00,760
Speaker 2: by going with this different well, and he still has

816
00:34:00,800 --> 00:34:03,200
Speaker 2: the option down the road to turn those traditional dollars

817
00:34:03,240 --> 00:34:05,560
Speaker 2: into roth dollars through conversions. And it's like, that's what

818
00:34:05,600 --> 00:34:07,480
Speaker 2: I'm getting out. So I got those low income years

819
00:34:07,480 --> 00:34:09,359
Speaker 2: when you're taking us abbatical and you don't have any

820
00:34:09,360 --> 00:34:12,080
Speaker 2: earned income, but of course money that you convert during

821
00:34:12,120 --> 00:34:14,280
Speaker 2: those years that's counted as taxable income.

822
00:34:14,360 --> 00:34:16,480
Speaker 1: And so I would do exactly what Owen is doing here. Yeah,

823
00:34:16,520 --> 00:34:19,239
Speaker 1: And I would as as many dollars as I could

824
00:34:19,239 --> 00:34:22,080
Speaker 1: comfortably throw into traditional accounts to lower the agi to

825
00:34:22,080 --> 00:34:23,120
Speaker 1: maximize forgiveness.

826
00:34:23,400 --> 00:34:24,239
Speaker 2: That is what I would do.

827
00:34:24,480 --> 00:34:26,560
Speaker 1: And then a few years down the road, I'd be

828
00:34:26,600 --> 00:34:29,000
Speaker 1: like I would. I would kiss the wroth on the

829
00:34:29,000 --> 00:34:31,840
Speaker 1: lips again, and I would full embrace just like I

830
00:34:31,880 --> 00:34:34,120
Speaker 1: hadn't forgotten about you. I would cuddle it hard back

831
00:34:34,160 --> 00:34:37,160
Speaker 1: over here. I would go all in on the roth

832
00:34:37,200 --> 00:34:39,120
Speaker 1: at that point. So ow in best of luck to you,

833
00:34:39,360 --> 00:34:41,080
Speaker 1: all right, mat, We've got more to get to on

834
00:34:41,080 --> 00:34:45,000
Speaker 1: this episode, including question about credit cards. Are they maybe

835
00:34:45,040 --> 00:34:46,440
Speaker 1: not as good as we've made them out to be.

836
00:34:46,520 --> 00:34:48,120
Speaker 1: We'll talk about that more right after this.

837
00:34:56,480 --> 00:34:59,360
Speaker 2: Right, of course, we've got more money saving conversation to

838
00:34:59,400 --> 00:35:01,719
Speaker 2: get to today, Jiel, it is now time for the

839
00:35:01,719 --> 00:35:05,200
Speaker 2: Facebook question of the Week, which is from Brian and

840
00:35:05,560 --> 00:35:08,480
Speaker 2: he wrote, anyone noticed more and more restaurants and bars

841
00:35:08,560 --> 00:35:11,920
Speaker 2: and other businesses how they're adding credit card fees upwards

842
00:35:11,960 --> 00:35:14,279
Speaker 2: of three percent to the tab? Could this be the

843
00:35:14,360 --> 00:35:17,120
Speaker 2: end of turning credit cards and chasing rewards? That makes

844
00:35:17,120 --> 00:35:19,080
Speaker 2: me want to pay with cash? But I thought more

845
00:35:19,120 --> 00:35:21,600
Speaker 2: businesses want it's to avoid cash. I just don't see

846
00:35:21,600 --> 00:35:24,760
Speaker 2: how we can get away from the convenience of credit cards, Joel,

847
00:35:25,640 --> 00:35:27,000
Speaker 2: pull out you, crystal ball, What do you think is

848
00:35:27,000 --> 00:35:29,719
Speaker 2: ahead when it comes to credit card usage and specifically

849
00:35:29,719 --> 00:35:30,880
Speaker 2: with bars and restaurants.

850
00:35:30,880 --> 00:35:33,080
Speaker 1: Well, I think it is interesting to see that Brian's

851
00:35:33,200 --> 00:35:36,000
Speaker 1: kind of noting two different trends at once. That businesses

852
00:35:36,040 --> 00:35:38,719
Speaker 1: are saying credit cards are really expensive, and man, every

853
00:35:38,760 --> 00:35:41,520
Speaker 1: time you pay with your super duper fancy Visa signature

854
00:35:41,560 --> 00:35:44,600
Speaker 1: card or your American Express card that comes with a

855
00:35:44,640 --> 00:35:48,440
Speaker 1: six hundred dollars annual fee, we're left holding the bag.

856
00:35:48,600 --> 00:35:51,239
Speaker 1: We are on the hook to pay these credit card

857
00:35:51,320 --> 00:35:54,000
Speaker 1: companies higher and higher transaction fees. And so that is

858
00:35:54,000 --> 00:35:57,160
Speaker 1: one trend, right, and it's true that has taking place,

859
00:35:57,280 --> 00:35:59,480
Speaker 1: for sure. But then there's the other side of the

860
00:35:59,520 --> 00:36:03,680
Speaker 1: coin where companies are saying accepting cash is such a pain,

861
00:36:04,120 --> 00:36:07,520
Speaker 1: and we're seeing more and more companies opt towards digital

862
00:36:07,560 --> 00:36:10,960
Speaker 1: transactions only because then they don't have to go to

863
00:36:10,960 --> 00:36:14,160
Speaker 1: the bank at night and have the less of a liability,

864
00:36:14,239 --> 00:36:16,520
Speaker 1: less of a security thread and a liability. You're right,

865
00:36:16,560 --> 00:36:19,480
Speaker 1: And so these are the kind of things where it's

866
00:36:19,640 --> 00:36:24,920
Speaker 1: interesting to see companies and retailers embracing different strategies as

867
00:36:25,040 --> 00:36:28,440
Speaker 1: they see they either say, listen, we're gonna charge you

868
00:36:28,480 --> 00:36:30,799
Speaker 1: extra if you don't pay us with cash, or the

869
00:36:30,880 --> 00:36:33,600
Speaker 1: other way, which is you can't pay cash at all

870
00:36:33,760 --> 00:36:35,239
Speaker 1: because it's too much of a pain in the butt

871
00:36:35,280 --> 00:36:37,680
Speaker 1: for us. And different retailers are making different choices right now.

872
00:36:37,760 --> 00:36:40,280
Speaker 2: Yeah, different businesses out there. I mean I understand because

873
00:36:40,520 --> 00:36:42,400
Speaker 2: like what they're doing is they're covering the cost of

874
00:36:42,480 --> 00:36:45,000
Speaker 2: those swipe fees. Right So three percent, it's fairly typical,

875
00:36:45,600 --> 00:36:47,919
Speaker 2: but it's enough to make any person who loves paying

876
00:36:47,920 --> 00:36:50,719
Speaker 2: with credit cards and earning rewards. Of course, if you

877
00:36:50,960 --> 00:36:53,480
Speaker 2: adhere to the golden rules of credit card usage, it

878
00:36:53,560 --> 00:36:55,800
Speaker 2: causes all of us to think twice because the fee

879
00:36:56,160 --> 00:36:59,200
Speaker 2: is often loftier than the rewards. And this is something

880
00:36:59,239 --> 00:37:01,319
Speaker 2: that I've experienced personally. So when Kate and I were

881
00:37:01,320 --> 00:37:03,719
Speaker 2: out west in Colorado, you know, we did a bunch

882
00:37:03,719 --> 00:37:05,520
Speaker 2: of hiking, but we sat down to a nicer we

883
00:37:05,560 --> 00:37:07,799
Speaker 2: got cleaned up, took showers. First, I thought you were

884
00:37:07,800 --> 00:37:09,479
Speaker 2: going to say, the Parks Department charged to you credit

885
00:37:09,480 --> 00:37:13,279
Speaker 2: card process at peace dot gov. Now, we went to

886
00:37:13,440 --> 00:37:16,880
Speaker 2: a locally owned restaurant and it was fantastic. But I

887
00:37:16,960 --> 00:37:19,040
Speaker 2: knew going into it because we I checked out the

888
00:37:19,040 --> 00:37:21,120
Speaker 2: website and even it even said on the website that

889
00:37:21,239 --> 00:37:23,439
Speaker 2: just heads up, you're gonna be charged three percent more

890
00:37:23,520 --> 00:37:25,560
Speaker 2: if you use a credit card we get there. It

891
00:37:25,600 --> 00:37:27,600
Speaker 2: was also written on the menu, so they were just

892
00:37:27,680 --> 00:37:29,160
Speaker 2: making sure that it was not going to be a

893
00:37:29,160 --> 00:37:31,360
Speaker 2: surprise for I appreciate that at least, which I totally

894
00:37:31,360 --> 00:37:35,120
Speaker 2: appreciation people. And I will say my knee jerk reaction was, Oh,

895
00:37:35,160 --> 00:37:36,520
Speaker 2: I'm going to reach for the debit card, which I

896
00:37:36,520 --> 00:37:38,520
Speaker 2: haven't reached for in forever. Actually, I don't even know

897
00:37:38,520 --> 00:37:39,960
Speaker 2: if I have the debit card in there, to be honest, Well,

898
00:37:39,960 --> 00:37:42,000
Speaker 2: they might charge you three percent on a debit card. No, no,

899
00:37:41,920 --> 00:37:44,960
Speaker 2: it's the credit cards only. But then I but specifically

900
00:37:44,960 --> 00:37:47,359
Speaker 2: I remembered, wait a minute, it also depends on what

901
00:37:47,400 --> 00:37:50,919
Speaker 2: card you use, because I use the City Custom Cash

902
00:37:50,960 --> 00:37:54,200
Speaker 2: specifically for eating out at restaurants, because with custom Cash,

903
00:37:54,239 --> 00:37:57,400
Speaker 2: this card specifically pays five percent. And so I was

904
00:37:57,400 --> 00:37:59,839
Speaker 2: still able to come out a little bit ahead using

905
00:37:59,880 --> 00:38:02,320
Speaker 2: the proper card. But not everybody's going to want to

906
00:38:02,360 --> 00:38:04,800
Speaker 2: do that. Still live bit of that arbitrage, we exactly.

907
00:38:05,040 --> 00:38:07,120
Speaker 2: But I've also got five different credit cards that I'm

908
00:38:07,440 --> 00:38:09,480
Speaker 2: rotating through because this is what we do, this is

909
00:38:09,520 --> 00:38:11,440
Speaker 2: what we talk about. I don't think most folks arelucking

910
00:38:11,440 --> 00:38:13,839
Speaker 2: to do that because most folks the different benefits they're

911
00:38:13,880 --> 00:38:15,879
Speaker 2: receiving on you know, with the cards that they're using

912
00:38:15,920 --> 00:38:17,440
Speaker 2: don't come with that high of a reward, right, They

913
00:38:17,480 --> 00:38:20,160
Speaker 2: typically don't outweigh the fee that you pay, especially if

914
00:38:20,160 --> 00:38:23,200
Speaker 2: you're running with the like City Double cash mat another

915
00:38:23,239 --> 00:38:26,200
Speaker 2: City card, or the Fidelity Rewards card, which are both

916
00:38:26,239 --> 00:38:28,719
Speaker 2: like two percent cash back, You're losing one percent in

917
00:38:28,760 --> 00:38:31,720
Speaker 2: the transaction, and so you would likely want to opt

918
00:38:31,760 --> 00:38:35,080
Speaker 2: for another form of payment, right. Basically, you don't want

919
00:38:35,120 --> 00:38:37,480
Speaker 2: to be losing one percent in perpetuity when someone's charging

920
00:38:37,520 --> 00:38:40,439
Speaker 2: you ache to swipe. And so I think the only

921
00:38:40,480 --> 00:38:42,840
Speaker 2: exception might be if you're trying to hit a spending

922
00:38:42,880 --> 00:38:45,879
Speaker 2: threshold for an initial reward, and you might say it's

923
00:38:45,920 --> 00:38:49,520
Speaker 2: worth this one percent arbitrage in order to get that

924
00:38:49,640 --> 00:38:53,959
Speaker 2: meet that initial spending threshold. But he also asked, Brian asked,

925
00:38:54,000 --> 00:38:56,040
Speaker 2: is this the end of chasing rewards? I think the

926
00:38:56,200 --> 00:38:59,600
Speaker 2: clear answer is no, not at all. This phenomenon might

927
00:38:59,600 --> 00:39:01,480
Speaker 2: be catching on little by little, but it doesn't mean

928
00:39:01,520 --> 00:39:04,160
Speaker 2: that it's ubiquitous. And so if I was him, then

929
00:39:04,239 --> 00:39:05,759
Speaker 2: I would either do one of two things. Matt, I

930
00:39:05,800 --> 00:39:08,160
Speaker 2: would get a credit card. Just like I think it's.

931
00:39:08,000 --> 00:39:11,480
Speaker 1: Restaurants mostly where you're gonna experience this gas stations. Maybe two.

932
00:39:11,760 --> 00:39:15,319
Speaker 1: Get credit cards that have higher rewards levels on those

933
00:39:15,360 --> 00:39:18,120
Speaker 1: specific transactions that you're going to be paying the potentially

934
00:39:18,200 --> 00:39:20,719
Speaker 1: the most in fees for and find a way to

935
00:39:20,719 --> 00:39:23,920
Speaker 1: actually continue to profit on those transactions. The other thing

936
00:39:23,960 --> 00:39:25,960
Speaker 1: you can do is to carry a little extra cash,

937
00:39:26,040 --> 00:39:28,640
Speaker 1: right to avoid That's true, those search charges when you can.

938
00:39:29,120 --> 00:39:31,799
Speaker 1: I'll admit, I think I've got like fifty bucks on me, Matt,

939
00:39:31,840 --> 00:39:33,479
Speaker 1: and I try to keep a few bucks for tips

940
00:39:33,520 --> 00:39:35,200
Speaker 1: and stuff like that. I had, like, I had some

941
00:39:35,239 --> 00:39:37,080
Speaker 1: tips on this past trip that I and I was

942
00:39:37,120 --> 00:39:38,439
Speaker 1: glad that I had some spare cash.

943
00:39:38,520 --> 00:39:42,319
Speaker 2: You keep a little Lincoln a little bit of grant,

944
00:39:42,360 --> 00:39:44,120
Speaker 2: but I feel like that's so rare.

945
00:39:44,120 --> 00:39:45,560
Speaker 1: And I was like, oh my gosh, I'm so thankful

946
00:39:45,600 --> 00:39:48,080
Speaker 1: that I have like a spare five and some ones

947
00:39:48,360 --> 00:39:50,960
Speaker 1: because so much of the time I don't, and I

948
00:39:51,480 --> 00:39:53,719
Speaker 1: feel like I've got to go figure out, how, hey

949
00:39:53,760 --> 00:39:56,400
Speaker 1: do you have venmo those I can that, Yeah, exactly

950
00:39:56,480 --> 00:39:59,040
Speaker 1: what sucks. But yeah, there are just still plenty of

951
00:39:59,040 --> 00:40:01,200
Speaker 1: places to use credit cards to your advantage.

952
00:40:01,200 --> 00:40:01,719
Speaker 2: I just don't.

953
00:40:01,960 --> 00:40:04,799
Speaker 1: Yes, Well, this is a growing trend in some parts

954
00:40:04,840 --> 00:40:07,879
Speaker 1: of the retail space. I don't think this means that

955
00:40:08,440 --> 00:40:11,720
Speaker 1: getting benefits from credit cards is anywhere near extinct.

956
00:40:11,760 --> 00:40:13,560
Speaker 2: That's true. Yeah, And a quick note to I guess

957
00:40:13,600 --> 00:40:16,160
Speaker 2: all the different business owners out there again, when it

958
00:40:16,160 --> 00:40:18,480
Speaker 2: comes to the verbiage, the words that you use, and

959
00:40:18,520 --> 00:40:20,919
Speaker 2: how you position and market it, your use of the

960
00:40:21,040 --> 00:40:23,480
Speaker 2: English language, I think if you just were to turn

961
00:40:23,520 --> 00:40:24,960
Speaker 2: it around a little bit and say, hey, you know

962
00:40:24,960 --> 00:40:27,719
Speaker 2: what we're gonna if they just raise prices across the board,

963
00:40:27,760 --> 00:40:31,280
Speaker 2: but then offer discounts for those who are paying in cash, honestly,

964
00:40:31,320 --> 00:40:34,279
Speaker 2: I think they would alienate fewer customers that way. Just

965
00:40:34,360 --> 00:40:35,640
Speaker 2: I don't know. Something to keep in mind.

966
00:40:35,800 --> 00:40:37,440
Speaker 1: And when you think about it, Matt, like, when you

967
00:40:37,440 --> 00:40:39,160
Speaker 1: look at the numbers for buy now, Pay Later, what

968
00:40:39,200 --> 00:40:42,239
Speaker 1: do people do? They spend more when they use buy now,

969
00:40:42,280 --> 00:40:44,560
Speaker 1: pay later because they feel that when you make it

970
00:40:44,600 --> 00:40:46,920
Speaker 1: easy right well, and they don't feel the immediate impact

971
00:40:46,920 --> 00:40:48,440
Speaker 1: of that purchase, They're like, oh, well, sure, I'll spend

972
00:40:48,440 --> 00:40:50,719
Speaker 1: two hundred bucks because I'm it's fifty bucks a month

973
00:40:50,719 --> 00:40:53,279
Speaker 1: for four months, right, who cares? Which is why we

974
00:40:53,320 --> 00:40:55,960
Speaker 1: hate buy not pay later. But honestly, to be to

975
00:40:56,000 --> 00:40:58,959
Speaker 1: be fair, people can do and follow to the trap

976
00:40:58,960 --> 00:41:01,080
Speaker 1: of doing the same thing with credit cards is saying

977
00:41:01,160 --> 00:41:03,239
Speaker 1: I'm just going to spend more because guess what is

978
00:41:03,239 --> 00:41:05,839
Speaker 1: not actually money coming out of my account? Yet, of

979
00:41:05,880 --> 00:41:07,359
Speaker 1: course it is real money that's going to come out

980
00:41:07,400 --> 00:41:10,120
Speaker 1: of your account. But people make that mistake and they

981
00:41:10,120 --> 00:41:12,080
Speaker 1: do end up by and so as a retailer, I

982
00:41:12,080 --> 00:41:14,000
Speaker 1: would want to make sure that I was not alienating

983
00:41:14,040 --> 00:41:17,040
Speaker 1: my credit card customers who might be be buying higher,

984
00:41:17,080 --> 00:41:20,600
Speaker 1: bigger ticket items. Yeah, find a way not to penalize them,

985
00:41:20,640 --> 00:41:23,160
Speaker 1: but to reward people who paying cash instead, because I

986
00:41:23,200 --> 00:41:24,600
Speaker 1: do think that's just.

987
00:41:24,520 --> 00:41:26,840
Speaker 2: A smarter business move. Yeah, reach out to Jill personally

988
00:41:26,920 --> 00:41:31,920
Speaker 2: for more business consultations. Right, My hourly fee is reasonable,

989
00:41:31,960 --> 00:41:34,480
Speaker 2: It is reasonable. All right, Let's get back to the

990
00:41:34,520 --> 00:41:36,759
Speaker 2: beer that you and I enjoyed today, Joel, this is

991
00:41:36,840 --> 00:41:40,000
Speaker 2: anything different from yesterday, which is a West Coast style

992
00:41:40,200 --> 00:41:43,759
Speaker 2: India pale Ale, another one by Burial Beer Company. What

993
00:41:43,760 --> 00:41:44,320
Speaker 2: were your thoughts?

994
00:41:44,440 --> 00:41:47,600
Speaker 1: All right, Matt, at risk of angering all of our

995
00:41:47,640 --> 00:41:50,160
Speaker 1: listeners in California, in the beautiful state of California, which

996
00:41:50,160 --> 00:41:52,640
Speaker 1: I just spent many many days and had the best time.

997
00:41:53,920 --> 00:41:56,799
Speaker 1: I think this is a better West Coast ipa than

998
00:41:56,840 --> 00:41:59,080
Speaker 1: most of the West Coast Ipa pro products, so you're

999
00:41:59,080 --> 00:42:00,879
Speaker 1: gonna say yes, And I feel like a terrible human

1000
00:42:00,880 --> 00:42:03,080
Speaker 1: being for saying that it's so good. It was delicious,

1001
00:42:03,080 --> 00:42:06,880
Speaker 1: and there's some maybe it's just because the super duper

1002
00:42:06,960 --> 00:42:11,560
Speaker 1: punched to the mouth high pine resin vibe that just

1003
00:42:11,719 --> 00:42:15,200
Speaker 1: feels so ridiculously intense, which is traditionally with the West

1004
00:42:15,239 --> 00:42:17,600
Speaker 1: Coast ipa. Is this is a different old school West

1005
00:42:17,600 --> 00:42:19,960
Speaker 1: Coast IPAs are going to have that bitterness. This is

1006
00:42:20,000 --> 00:42:22,640
Speaker 1: like a greatly reduced version of that where I still

1007
00:42:22,640 --> 00:42:25,120
Speaker 1: get that pine, but it doesn't feel like it's completely

1008
00:42:25,160 --> 00:42:26,480
Speaker 1: overwhelming my palate.

1009
00:42:26,600 --> 00:42:28,920
Speaker 2: So totally agree. I really enjoyed this one. It's still

1010
00:42:28,960 --> 00:42:30,960
Speaker 2: got the piney flavor, yeah, but it's just a more

1011
00:42:31,040 --> 00:42:34,560
Speaker 2: crisp and cleaner version of that West Coast ipa without

1012
00:42:34,600 --> 00:42:38,000
Speaker 2: feeling like you're like chomping down on grapefruit skin, yeah,

1013
00:42:38,000 --> 00:42:40,200
Speaker 2: pith or literal pine trees, which is what it can

1014
00:42:40,239 --> 00:42:42,799
Speaker 2: feel like sometimes. Yeah. No, I totally agree. This is

1015
00:42:42,840 --> 00:42:45,799
Speaker 2: a fantastic version of the West Coast Ipa by an

1016
00:42:45,800 --> 00:42:50,439
Speaker 2: East Coast brewery Burial beer company situated in Asheville, North Carolina. Yeah,

1017
00:42:50,520 --> 00:42:53,479
Speaker 2: and if you're upset with me, taking California brewers to task.

1018
00:42:53,960 --> 00:42:56,960
Speaker 2: California has some of my favorite breweries. It literally just

1019
00:42:57,080 --> 00:43:00,080
Speaker 2: hit up Costa Agria in Oxnard, California last week. You

1020
00:43:00,080 --> 00:43:02,480
Speaker 2: feel like you gotta like throw the West the California

1021
00:43:02,520 --> 00:43:04,399
Speaker 2: breweries alone after you talk trash.

1022
00:43:04,560 --> 00:43:07,520
Speaker 1: That's a small one and it is one of the

1023
00:43:07,520 --> 00:43:09,200
Speaker 1: best breweries I've ever been through in my life. So

1024
00:43:09,360 --> 00:43:11,279
Speaker 1: it's not I'm not against California beer. I'm just saying

1025
00:43:11,280 --> 00:43:14,640
Speaker 1: the West Coast thing has been can sometimes be overwhelming,

1026
00:43:14,640 --> 00:43:16,240
Speaker 1: and this one is not, which I appreciate.

1027
00:43:16,520 --> 00:43:18,160
Speaker 2: Well, maybe that just means we need a little more

1028
00:43:18,280 --> 00:43:21,360
Speaker 2: Casa Agria some of these West coast California breweries in

1029
00:43:21,360 --> 00:43:23,040
Speaker 2: our life. Drol I wouldn't be against it. Yeah, a

1030
00:43:23,080 --> 00:43:24,719
Speaker 2: little bit tougher to get our hands, I guess on

1031
00:43:24,760 --> 00:43:27,680
Speaker 2: some of the better stuff, But buddy, that's gonna be

1032
00:43:27,760 --> 00:43:30,439
Speaker 2: it for this episode. Listeners can find our show notes

1033
00:43:30,480 --> 00:43:32,680
Speaker 2: up on the website at how somemoney dot com some

1034
00:43:32,719 --> 00:43:34,400
Speaker 2: of the different guides and by the way, when it

1035
00:43:34,440 --> 00:43:37,160
Speaker 2: comes to some of the different credit card rewards, some

1036
00:43:37,200 --> 00:43:39,160
Speaker 2: of the different benefits that they're offering. Like I said,

1037
00:43:39,239 --> 00:43:42,480
Speaker 2: I'm still rocking, like I truly do rotate through five

1038
00:43:42,480 --> 00:43:45,040
Speaker 2: different cards in my wallet because I like to optimize.

1039
00:43:45,080 --> 00:43:47,680
Speaker 2: And if you are looking to filter buy some of

1040
00:43:47,680 --> 00:43:50,200
Speaker 2: the different airline carriers, some of the different cash back

1041
00:43:50,280 --> 00:43:52,839
Speaker 2: or by business versus personal cards, you can go to

1042
00:43:52,880 --> 00:43:55,280
Speaker 2: how to money dot com for slash credit card tool,

1043
00:43:55,600 --> 00:43:57,200
Speaker 2: and that's where you can find all the best ones.

1044
00:43:56,960 --> 00:43:58,360
Speaker 1: No doubt, dude. All Right, that's going to do it

1045
00:43:58,360 --> 00:44:00,560
Speaker 1: for this one, Matt. Until next time, best friends out

1046
00:44:00,600 --> 00:44:02,000
Speaker 1: and best friends Out.