00:00:00
Speaker 1: Welcome to Had of Money. I'm Joel, I'm Matt, and today we're discussing popular money advice that just ain't right, Joel.

00:00:26
Speaker 2: Even the crappiest financial advice that's out there, it still has a little negative truth, right, Like, oftentimes, the reason I think it resonates with folks is because they're like, oh, no, no, no, that's true. I've heard that before. I've heard my parents talk about that, I've heard friends talk about that. But that doesn't necessarily mean that it's like this super bulletproof piece of financial advice that you should be following to the letter with every dollar that you made.

00:00:48
Speaker 1: Yeah, some of the pieces of advice we're going to cover in this episode are things that you've heard people say and they are smart people, and so you automatically assume that based on their other advice, or based on the back that you've heard this from sources of information, that it's good and it's.

00:01:02
Speaker 2: Reliable advice that your grandparents gave you. And you're like, they would never steer me wrong. It's like, well it's not quite right.

00:01:08
Speaker 1: Yeah, we want you to question everything your grandparents taught you in this episode. Now that's okay, that's too far, not really. But there are a lot of things, yeah, that we're going to cover today, and some of it has, like you said, Matt, a ring of truth, but we're going to say, Okay, here's the nugget that is actually true, but here's where you should throw out the rest of it. And so yeah, we've got a lot to get to on this episode. But before we get to that, Matt, I wanted to mention that you and I we've talked about on the show, how we have meta share covering our families. When it comes to our health insurance, it's actual.

00:01:39
Speaker 2: Insurance, not technically health insurance. It's a health sharing plan exactly, but it is a lot cheaper than insurance. And I was even talking to a neighbor the other day and he was saying what he gets through his work, that his premiums every month are really expensive, Like even though his employer subsidizes a decent chunk of those premiums, like it's there's still a lot on the plate for him to have to pay every single month. And so for us, it seems it's the cheapest, most effective way for us to cover our families. And we've got a review on it. If you want to read it, we'll link to it in the show notes that Matt wrote about how it's worked for his family. But I found on one of my new favorite features of metashare is that they have partnered with basically this tele dot company called md Live and you can virtually visit a doctor on the computer or via phone for free, which is just another massive win for us. Is included in the price. There is no yeah, baseline fee, there's no copay that comes with that. It is included, so like a week and a half what we've seen before, but like I've never we've never taken advantage of it. So we used it for the first time a couple of weeks ago, Like all of our kids were sick. I think everybody that we knew had sick kids. Like it was going around.

00:02:52
Speaker 1: It's like flu, it's COVID, it's colds, everything hitting simultaneously. Everyone I know who had a kid like had to pulled out of school for a couple of days. And so we were like, Okay, we're gonna try to go see the pediatrician. They were full up, man, they didn't have room to take us because everybody was sick, and so We're like, Okay, we're gonna give this Teledoc MD live. We're gonna give it a shot. And it was great, Like it was so simple. We waited forty five minutes and you don't even like you're not like sitting in a waiting room though, you're literally at home kicking it. And then you get a text and it's like the doctor will see you now, so you hop into the to the chat, to the to, you click the link.

00:03:27
Speaker 2: Waiting forty five minutes at home while you're cooking dinner or cleaning the dishes or something like that. It's much much better than sitting in a waiting room full of other sick kids, yeah, sneezing on you and being all nasty.

00:03:39
Speaker 1: Right, and then there's no sick visit that we had to pay. There's it's literally free to get the diagnostics in. Yeah, so I will say I'm super happy with it.

00:03:46
Speaker 2: Sounds like Joel's pretty bullish on teledoc teledox stocks.

00:03:51
Speaker 1: I know, well, you know teledox stock in particular has not been doing well as a plate. But yeah, it's it's just one of those things that adds a lot of value to our ministure membership.

00:03:59
Speaker 2: Nice. Looking forward to checking that out. That's not something that we've taken advantage of yet, but I could totally see where that would come in handy. In particular, if you know that you just need we probably need this prescription. You know this prescribed. We just need some meds. My kids are particularly susceptible to SHREP for some reason. It's a favorite. So yeah, we had to answer a couple questions at the doc, and typically they like to do a swab.

00:04:19
Speaker 1: But he even prescribed an antibiotic you know in that in that chat, which is cool. Did he did they make make your daughter? Make her open up her mouth? We took a picture. Oh yeah, yeah, we took a picture. We sent it in even before the appointment, So because.

00:04:30
Speaker 2: If you're on a video call, he could just be like, all right, make sure the video light's on and just just jam it in there real close. You hear him talking, it's like echoing in her her mouth. Water. Uh, that's cool, that's cool though. I'm glad you were able to take advantage of that. Hopefully we won't need to take advantae of that soon, but I'm glad to know that it exists. Let's introduce the beer you and I. We are enjoying another Talisman beer and this one is called Uplifted. It is a Scottish style. Ale Hady, thank you so much for donating this. This is our last of the Talisman beers. They're out of Utah, but looking forward to enjoying this one, and we will share our thoughts at the end of the episode.

00:05:09
Speaker 1: No doubt, all right, but let's get onto it, Matt. The subject of hands is do it popular money advice that just ain't right. And it made me think of maybe some other pieces of advice that we just assume are correct because you've heard it so much, so many times. And I personally like to get out there and grill on occasion. And you've heard everybody say it that searing your meat is the best way to lock in the flavor, right, you want to get that grill, piping hot.

00:05:33
Speaker 2: Lock in the moisture, slap that.

00:05:36
Speaker 1: Steak down or whatever it is, and that is going to yeah, lock in the moisture. It's something I've heard folks say for years. And then you get to right after they click their tongs and they're like, all right, it's ready, that's right, and then it's like, oh, you're going to get to get to eat that juicy, medium rare steak that you have always dreamed of, But you got to get the seer right. But as it turns out, that's actually the farthest thing from the truth. Culinary scientists tell us that although this sounds like good advice, it's not actually the best method if you want to get the proper outcome. And it's true that searing your steak is going to brown it, which does increase some caramelization. Oh yeah, flavor and texture. So that is seared at some point.

00:06:13
Speaker 2: Yeah, it's good for other reasons, but not necessarily what you're saying from a moisture standpoint, Yeah, like that's the Millard reaction whatever, where basically you're reducing some of those sugars and that's what creates that delicious smell. Like when you smell delicious food, it's because of the browning. It's because of the searing that often is taking place. But that doesn't necessarily have anything to do with like you're saying, the moisture of the meat that you're ceiling in like a I picture like a raincoat or you know, or like somebody who's like trying to make weight for like wrestling or something like that, and they're like wearing trash bags. Huh huh uh. They're just like locking in all that make all that nasty moisture and they're just wating like crazy. That seer does not act like a rain jacket for your steak.

00:06:49
Speaker 1: No, no, it doesn't. And the truth is starting to cook your steak slower and then doing a reverse sere to add that flavor in the end is the best method.

00:06:57
Speaker 2: And getting really fancy, aren't you.

00:07:00
Speaker 1: So even let's say you put that steak in a suv, you cook it until it reaches a certain temperature, and then you slap it on the grill for like a minute a half on each side or something like that. Typically a lot of folks say that's the way you're going to get the best tasting steak in the end. But it's just not what you normally hear as typical grilling advice from most folks. And just like that BS grilling advice, right, that just isn't right. We're going to spend some time talking smack about personal finance advice today on the show that we just dislike or maybe that has taken on this element of gospel truth, but we would say, in reality, there's a lot of mistruth in that statement, and so we're going to kind of like break them down and talk about them today's show.

00:07:36
Speaker 2: Yeah, Like, there's just a lot of crappy things out there being said, and oftentimes I think the problem is that we like we hear something and because it intuitively makes, you know, some sort of sense, like we just stick with it, just like you were talking about with the searing meat, or maybe it's just packaged in such a way that it makes it easy to remember, right Because like we're all living, busy live, so anytime we're able to hear something that allows us to simplify and make life a little bit easier, we're going to cling to that basic rule of thumb. I think it's one of the ways that we're that we're able to be super productive, right, Like, most folks are looking for shortcuts, but it doesn't always mean that those shortcuts are accurate in that day and that they're the best method of action for you and your money. And the fact is there have always been folks out there who are just spouting bad information, right Like, I think most folks are well intentioned, but you're likely going to encounter some bad advice as you are working to get your personal finances in order. Yeah, as you're trying to make that progress. And so we're going to call out some of the biggest culprits today on the show, and we're going to share how it is that you should be thinking about your money.

00:08:36
Speaker 1: Yeah, And I like how you said most people are well intentioned. I think there's a couple of things. One, people are out there are trying to simplify advice for the masses, trying to give them good information in a bite sized way, but oftentimes then you're missing a lot of kind of the important truth that surrounds it. But also, there are a lot of people who just don't know enough about personal finance, and so they might be newbie influencers on social media hoping to talk about their experience and how they've been able to change their lives, but oftentimes they're missing some of the most important ingredients to be able to help people do it in their own lives.

00:09:08
Speaker 2: Right, Yeah. Yeah, they might have a good story, just good heart, yeah exactly, and kind of where they are personally, maybe there's some wisdom that you can clean from their experiences, but they may not be fully informed.

00:09:19
Speaker 1: Yeah, and you may not be able to directly apply it to your own situation because their situation could be quite a bit different. Actly, And so yeah, we would say some of the basic advice still holds. Like we're not trying to throw out the baby with the bathwater in this episode. Some of the most basic advice out there, for instance, like the number one rule of personal finance, which is spending lesson you make That holds water, right, that makes sense to us. But even in something like that, even in such a basic piece of advice that's like the number one rule of personal finance, that can even get warps into folks, leading you to think that you shouldn't spend money, a push towards maximum frugality, which we would say can become unhealthy. Plus, even that little basic piece advice, which is helpful, it just doesn't tell you how much less you should be spending, like how you should be changing your habits and you know, should that be a constant amount over the decades. Well, that pithy a little bit of advice doesn't really tell you. So we would say even the most basic advice that has truth to it needs some context needs some fleshing out, in particular depending on your personal situation, and naturally that context that fleshing out requires time and attention, which is unfortunately in short supply. Right, So, most folks in our modern age, they're content with these five second sound bites and they're just not willing to read past the headlines. But that additional time is what it often takes in order to understand the nuance of any conversation or debate. And it's it's it's true everywhere, but it's definitely true of these personal finance conversations as.

00:10:47
Speaker 2: Right, yeah, all right, yeah, So let's talk about some of the some of the crappy advice in the realm of spending first, and one of the popular lines of advice is skip the latte, skip the avocado toast. This is, I mean, honestly, it's barn on one of the pieces of advice I hate the most. And it's not that spending too much money at your local coffee shop like that, it's not possible. It definitely is. And it's not that the small expenses that you make that they don't add up to a meaningful amount of money, because they do. And you know, you might be wasting money without even thinking enough about it. Now, this happens to a lot of folks. It's just I don't understand why coffee shops specifically bear the brunt.

00:11:26
Speaker 1: Of this right coffee shop owner. There's so many other places you could.

00:11:29
Speaker 2: Attack exactly, so many other places where where folks were wasting money, like a ridiculous car payment for a fancy car that you don't really need when you could have just paid cash for something more affordable, or like having your meals delivered. Or speaking of food, think about the countless containers of leftovers that you've tossed or jol the accountless that's your favorite thing to attacked by the people that don't eat their leftovers. What is wrong with you? You don't like those people. It's a terrible habit. It's just an inefficient way of going about making your meals at home. And yet we're kind of digressing herealking about the latte factor. But folks, and in particular media, I think it's just picked one of the loveliest spots that's often the like a cornerstone of community hangs. It just seems like the coffee shop has kind of gotten a bad rap maybe this is on my mind, Joel, because this morning you and I w went and got a coffee before our morning meeting.

00:12:16
Speaker 1: We had a new neighbor who was awesome, We saw old neighbors who we love, and.

00:12:20
Speaker 2: It's something that I don't know, maybe we're biased a little bit because it's something that we are realizing it. It's important in our sort of It's not like something we do every day, but when we do partake in it typically, Yeah, it provides a lot of meeting and value to us.

00:12:33
Speaker 1: That's four dollar flat white provides a lot more than just like a delicious cup of coffee exactly. And that's, by the way, my beverage of choice. Typically if I'm going out to a coffee shop, flat.

00:12:42
Speaker 2: Whites, Grotado all the way. So Tortata's are great too, slightly less milk, Yeah, thats true.

00:12:48
Speaker 1: Well so yeah, so we would say that that is one of those things where that is up to the individual.

00:12:52
Speaker 2: And I think you're right, Matt.

00:12:53
Speaker 1: There are other places, in particular, larger line items in our budget that are much easier to cut back, especially if the coffee shop is a place where you do derive a lot of joy in community from or you enjoy even you know, when you're working from home, going to work there, and it really, when you think about it, in the grand scheme of things, it's a minimal cost. For some reason, we've singled out coffee shops. It's wrong, it needs to stop. But speaking of those just a right, that's right, those bigger ticket items, though, you have bigger fish to fry. So when you spend an inordinate amount of your time thinking about these tiny little ways that you could potentially eke out a few more bucks, I'm not saying I don't think either of us would say, Matt, that that's time poorly spent, but we would say you might be hogging valuable mental bandwidth that could be spent on those bigger ticket items where you could be getting a bigger ROI by looking elsewhere. And so instead of constantly worrying about spending money on coffee, get a more affordable car insurance provider boom that just paid for your coffee for the entire year. I love doing those bigger things, a one time task that allows you then to use your money in a way that's more effectively going to move the needle value wise in your life. And this is of course a fine balanced strike because you and I we're all about frugal living. Like, we don't want people necessarily going out there and get that flat white every day. That's not what we're that's not what we're saying. But if you're counting pennies of every single purchase, not only are you like sucking the fund the joy out of some of those simple pleasures of life, but it's it could also just be a highly inefficient use of your time. You're majoring on the miners, and we would say that there's a whole lot more financial ground you can cover focusing more on those big ticket items.

00:14:25
Speaker 2: That's right. I gotta keep you in check in case I start hearing Joel saying, all right, this kind of feels like a two flat white kind of day.

00:14:32
Speaker 1: Oh man, I don't think I've ever done two coffees in one day a week. Maybe we could justify that on occasion.

00:14:37
Speaker 2: All right, Well, not only should you be thinking about like some of these big ways to save money, but also the big ways that you can make more money as well, right, Because I think you can easily adopt that same like latte factor mindset and then just apply it to how it is that you make money, and so it's like, specifically, what I'm thinking of here is like, we see a lot of folks who are spending a tremendous amount of time their side hustle use, in particular using different apps like swag Bucks, Uber, Instacart, or feel. They come to mind, and again we're you know, we're all about folks using the spare time that they've got to get after whatever financial goal that they've set for themselves. But this is an instance, man like where it would be really helpful to pause for a moment and imagine where this side hustle is going to take you. But the allure to immediately make some instant cash is attractive, not to mention, you know, like all the apps, they are designed to keep folks coming back, to keep you coming back for more due to how it is that they're designed, how they're they've essentially gamified the tasks or the jobs that literally pop up from within the app. They don't want you to slow down and think about the big picture. They just want you to keep working. So don't lose sight of the forest for the trees. Simultaneously, don't let the desire to hustle and to make a small amount of money today keep you from making a large amount of money tomorrow. This is when, like I even hate using this phrase, but oftentimes folks who kind of fall into this pattern fall into like the scarcity mindset. And I don't like saying that because it makes it seem like that you can just manifest stuff and think it and bring it into existence. You can't just do that. It takes a lot of hard work. But sometimes we do get locked into that scarcity mindset as opposed to thinking about like an abundance mindset. Right, Like if you are so focused in particular going back to the spending on just watching every single little penny and instead what if you took that same amount of energy and poured it into ways that you can not only make money via some of these different apps that feel immediate, but like, let's talk about some of the bigger pictures, some of the larger, big thinking kind of ways that will allow you to advance your career and make some serious positive impacts on your income.

00:16:37
Speaker 1: Yeah, it almost makes me think of when you go to a casino and how you have no idea what time of day it is and they're probably in oxygen, and so your blinders around. You don't know how long you've been there, you don't know how much money you've lost, like because you're getting free drinks and so it's but you got a free buffet, and so maybe that makes up for all the time.

00:16:52
Speaker 2: And that's how this tells me that I should not go to Vegas because I hear that and I have fallen into similar traps at other points in my life. Yes, in particular, I'm thinking about playing video games in college.

00:17:05
Speaker 1: I was just like, wait, what day is It's like everything is conspiring against you to get you to lose your money. And I think with some of these side hustles, it's not that they can't be effective in the short term. We've talked about kind of the nefarious elements that side hustles come with, and so people have to be really careful before they dedicate too much time to making money on the side. There are often more effective ways to grow your to grow your income over the long term. That doesn't mean to you know, the great thing about side hustles is you can like literally hit a button and start making money today, and that's a great short term tactic. Yeah, but it's not going to be best when it comes to long term earnings, which is which we where we want your eyes a little more focused on.

00:17:40
Speaker 2: That's right, Joel. And we've got several other pieces of popular financial advice that we're going to get to that's just not right, including we're going to talk a little bit more about earning money as well as popular advice to avoid when it comes to how it is that we save and invest our money.

00:17:55
Speaker 3: We'll get to all of that right after this a hard Matt, let's keep going.

00:18:07
Speaker 1: Let's talk about personal finance advice, and you and I we're just not fans of and these are kind of things that people start to get accustomed to. I think we've gotten a lot more accustomed to side hustles like we just talked about before the break in recent years, and as in that being a way to maybe make ends meet or to grow your income when there are better ways over the long term to grow your income. But there's the flip side of that coin, so let's talk about that too. There's the reality that some people they have a relationship to their job where it's more like golden handcuffs, and so that's something we want people to change their thinking about as well, because on the other end of the spectrum, right, there are some people who have a great job that pays incredibly well, and in fact, it might pay a little a little too handsomely, and you feel stuck, right, even if you don't really like your job, even if you actually kind of hate it and you don't want to go to work anymore, you don't like your coworkers, you don't.

00:18:56
Speaker 2: Like what you're doing, you're working too much.

00:18:58
Speaker 1: We know folks who have made these confessions to us. Yes, they're like, my job sucks, but I'm making so much money.

00:19:04
Speaker 2: I can bank how I leave Exactly, I can't.

00:19:07
Speaker 1: And so it's this case of golden handcuffs where the salary the benefits have gotten so robust that you don't even let yourself consider an alternative. And of course, Matt, neither you or I when people are making this admission, have told us, you know what, my life doesn't really matter. But kind of in some ways what they're saying, right.

00:19:22
Speaker 2: That's what they're saying through their actions, not necessarily because it's something that they've flat out stated that, like, I no longer care about how I spend my hours.

00:19:30
Speaker 1: Yes, but they are in essence saying that they're saying it's all about the benjamins. The dollars matter more than how my time is spent, than me actually finding joy, taking pride in what I do every day. I'm just going to grind it out another five or ten years, Like that's the kind of the mentality that a lot of people have. I keep reaping the rewards of this awesome paycheck. But this, of course is terrible financial advice that ultimately leads to terrible life advice. It you know, we don't know how long we are guaranteed, and every single year that you spend at a job that you just can't stop, that you hate, those are years you're not going to be able to get back.

00:20:03
Speaker 2: That's right, Yeah, I mean, so much of life satisfaction, specifically, it comes from the work you do and the ability that you have to help other people. Victor Frankel, We've mentioned him plenty of times here on the show. He's an Austrian psychiatrist. He wrote one of the most profound books, Man's Search for Meeting after surviving the Holocaust. But he found that personal relationships, specifically, they are the most important component of finding happiness. And then right after that it was engaging in productive work. That is the next thing that brings us meaning. So you want to know what he doesn't discuss making a ton of money. And so with that in mind, like, what better way to spend half our of our waking hours than by engaging in rewarding and productive work that connects us to our fellow man, to our fellow human beings. And this is one of those bits of advice that I say that I know right like, we all have a head knowledge of it, but do we grasp it as heart knowledge? You know, this is a good one to revisit because we're tempted to, you know, simply understand this concept without actually living it out. I think we're constantly tempted to live in a way that is at odds with this because that's what success looks like, that's what the world tells us to do. That's even you know, what our parents tell us to do. They're like, oh, but that's going to put you on this trajectory. By all sort of outward measures of success, You're likely going to decide that what you should do is, like you said, like continuing to grind it out and not just for like ten years, but like twenty thirty years. Sometimes doing work that you don't love as opposed to thinking about how it is you're actually spending that time. That's really important. Man.

00:21:34
Speaker 1: I feel like we are the money show that is constantly telling people to think less.

00:21:38
Speaker 2: About money, to not focus on the money. That's totally true.

00:21:40
Speaker 1: Yeah, And so we try to cover the nuts and bolts and we want to help people get better with your money, invest more wisely, and save a bigger chunk of what they bring home. But we also want people to think about money as a tool and to not think about money as the ends. It is a means, you know, two better ends for your life.

00:21:57
Speaker 2: It's the tool that we focus on the most here on the show. But ultimately, like what we're all about is just folks living a life that they feel it leads to happiness essentially, just a fulfilling life for sure.

00:22:06
Speaker 1: And the reality is if money is the end goal, you're going to miss out on some of the things that matter the most. Like that is a byproduct of too much focus on money, is missing out on a lot of things that matter. Let's talk about some more something else in the vein of career and earnings oriented advice that people here on the rag Matt and that is just that college is a no brainer, right, And so not many of our listeners are college age, you know, a small handful, but some of our listeners are getting to the point where they've got kids who are considering going to college. They've got those those teenagers now at home. And so every time we talk about this, I feel like we get unhappy listener emails because they say, listen, why are you talking crap about college? And we especially got them after episode five forty eight where we kind of debunked the fact that college makes sense for.

00:22:53
Speaker 2: That was is college for dummies? Right?

00:22:57
Speaker 1: Yeah, we definitely like, not everyone is happy that we don't think that college is a slam dug decision, But we just don't think that the vast majority of high school seniors should be mortgaging their futures by taking on astronomical amounts of debt, which which is in many cases leading to I don't know the most expensive piece of wal art till ever, hang right that a college degree that goes behind their desk that some couple hundred.

00:23:20
Speaker 2: K do you even know where your college degree, like your actual diploma is no, I have no idea.

00:23:24
Speaker 1: And I remember I would have had to walk to get my diploma, but my mom was out of town.

00:23:28
Speaker 2: So I didn't even have to walk. No, I didn't even walk. I didn't do it. So I just didn't.

00:23:32
Speaker 1: I didn't care, just showed up in a tube a few weeks later. That's exactly right. Well, so I guess you know. You could ask the question does college pay off for lots of folks still? And we would say yes, of course, like it does for a lot of people. And the more you can curb the costs that you incur and the time it takes to get that degree. What I mean is not taking six or seven years to get it, plus making sure that the one you get is more highly valued in the marketplace, then the more likely it is to be a smart choice. Like, for instance, that advanced history degree. It's going to pay off for a much smaller section of people, and a lot of folks who get that degree are going to find that the money was poorly spent, even if it was edifying. But the thing is, college truly was a no brainer thirty to forty years ago, but it's it's much more of a specific value proposition that young adults have to consider beforehand these days, before they start applying to schools. The reality of debt that can linger for decades, especially if that degree isn't landing you the lucrative career that you hoped is just too much of a downside to give some sort of blanket advice that college makes sense for most people.

00:24:34
Speaker 2: Yeah, and on a related note too, just how you pay for that college makes me think of five twenty nine accounts, and I oftentimes that's also accepted as kind of like a slam dunk, you know, no brainer sort of decision. It's like, well, if you care about your kids, of course you're going to save and invest money within a five twenty nine account, But so much of it depends on your personal situation. Because yes, that can be a great tool to allow you to save for you're a kid's college, but if you're doing it to the detriment of your ability to save for retirement, well then we would say that your priorities are a little out of whack.

00:25:05
Speaker 1: If you're not in money year six or seven, like plans probably shouldn't be on your radar exactly. That's what we say, Like you need to have your finances button up, your personal finances button up. You need to be saving for retirement in a big, a major way before you start investing for your kids usuer.

00:25:19
Speaker 2: And again it comes down to your personal situation, like maybe you're not quite there, but this is a vital importance to you, and you've got all the reasons why then you know what, Like there are pieces of device and things that we're gonna say here in the show that may not apply to one hundred percent of the folks out there, but this is something that we think folks need to be thinking about more often than not. And similarly, let's talk about debt, Joel, because oftentimes folks will hear that they should be living life debt free. And again, this is one of those uber simple pieces of advice that sounds good on its face, but if you take this dogmatic pronouncement to its logical conclusion, you're going to have a much harder time reaching your educational, your financial goals. And we know that it's hard to convey a reasonable debt philosophy just in a two to five second SoundBite here, which is why we don't try to right like we create entire episodes on important topics like debt accumulation and debt payoff to try and convey just a nuanced approach towards debt that we think is healthy in our modern society. The truth is, is actually possible to use debt in a strategic way to catapult your finances forward. That's a recent episode that we'll link to in our show notes. But not all forms of debt we're created to screw you over, and it's important to keep that in mind. But on the other hand, it's also possible to rely on debt too much, right, particularly consumer debt, in order to fund a lifestyle that you can actually afford, buying the things that you don't need and which should be completely avoided.

00:26:49
Speaker 1: Yeah, there's a massive difference between a payday loan and a fifteen year mortgage, right, I mean, and I think that's where the live life debt free sort of philosophy, the mantra gets lost, and so people automatally assume that every single potential form of debt is now just something they shouldn't even consider, they shouldn't bring into their lives, When the truth is, what we're revolting here against your matt is a lack of nuance, Right, it's that pithy phrase that starts to lead people down the road of thinking that only one way of handling debt makes sense, and that is to never ever use it. And it's a convenient way to convey a message, but it's not always the most helpful to the folks who are trying to make progress with their personal finances. For instance, like, let's say you do have that fifteen year mortgage at two and a half percent. At a two and a half percent rate, Well, it almost feels like a safe haven right now that we're experiencing a period of intense inflation. Let's say you used all your savings to pay off that mortgage, which in and of itself would be like mean you probably had too much money in savings. Well, you might find yourself in an uncomfortable position if let's say you lost your job next week. Yeah, sure, you don't have the mortgage payment, but you also don't have any cash in the bank to back you up to allow you to afford your other monthly bills if the worst case scenario happened. So how dumb is that to and a half percent mortgage rate? Debt in actuality, we would say it's not very dumb, it's really not that bad, and you probably shouldn't pay it off, even at the expense of prioritizing something like tax advantage retirement savings. So while the answer it's not always easy, it often requires context. The question is always an important one to ask, and then so much of the answer comes down to the terms of that debt and what you plan to do with the money you borrow. If you're exactly sinking that money that you're borrowing into speculative assets, let's say cryptocurrency or all sorts of new fangled digital coins that you could potentially lose it all overnight, still owing debt on top of it, that's really risky. That's a terrible way to use debt. But we would say there are smart ways to use debt to be able to actually accelerate your progress. Just like you said, Matt, and I think thinking that avoiding debt completely for the rest of your life is the best way forward. Not thinking about the ways that you can use it intelligently as like a stepping stone to kind of continue down the path is short sighted and is you all likely mean you're making less progress potentially in your career or in your personal finances and your wealth building journey than you'd otherwise like to see.

00:29:08
Speaker 2: Totally don't use credit cards, Joel. That's another piece of advice that you'll often hear. I think the same guy who likes to say that debt is dumb and to live that debt free lifestyle also likes to talk smack about the credit cards. But the truth is, when used effectively, we love credit cards. When you use them effectively, you know they're not just alright. They're the best form of payment where they offer you greater consumer protections, plus superior rewards and benefits and other meaningful perks. And it's worth pointing out here debit cards and credit cards they definitely look the same, but they are not created equal. Maybe we should do an entire episode talking about the differences between debit and credit cards. But we are fans of using them responsibly, and if you have a reasonable level of discipline, then you're gonna be able to use your cards effectively and they're going to be a great tool for you. That's why we're fans of using them. But again, we just have to make sure that we couch it within the proper language. We don't want anybody and everybody out there to go looking for the best cash back sign up bonuses that you can find. But if that is you, if you are in a healthy position, if you do have that reasonable amount of discipline, then head over to our site, go to howdomoney dot com forward slash credit cards because that tool will help you to find the best credit card for you and based on the different benefits and the perks that you are looking for.

00:30:28
Speaker 1: Yeah, and it doesn't get talked about much. Most people don't know that there are different consumer protections when you use a credit card at purchase then when you use a debit card. So it's not just the two percent cash back or the Ma's Blue cash preferred six percent back at the grocery store, like those are awesome perks, but we're also talking about just more robust fraud protection when you're using a credit card. We're talking about sometimes an extended warranty that a credit card offers. In addition, that means you don't have to buy the crappy extended warranty that the electronics company or the big box warehouse is trying to get you to buy. The abredit card offers that for you.

00:30:59
Speaker 2: Yeah, the ability to drop the CDW, the collision damage waiver when you're renting a car because you've got a car that offers primary car insurance by declining that CDW.

00:31:10
Speaker 1: Or as we talked about in a recent as kont of money up. But so many different benefits. Yeah, the ability to not have to carry a bunch of cash on your person when you're traveling overseas and to get the best exchange rate and to not pay a fee or do.

00:31:19
Speaker 2: It as you get that zero percent transaction fee. Yeah, so really foreign transaction fee.

00:31:23
Speaker 1: When you dig into the details. I mean credit cards a lot. There are people out there who think that they can't be used effectively. Those people would be wrong. It is possible to use a credit card effectively. And it's not just about two percent cash back right to slightly juice your returns. There's a lot more to it than that. But we've got Matt some more pieces of financial advice that we think are pretty crummy. They just ain't right. We'll get to those, including some about investing. I think that are really important, especially right now with what's happening in the market. How there's more bad investing advice going around now than even there typically is. So we'll get to that and more right after this.

00:32:06
Speaker 2: All right, so we just spent some time talking about spending money. Now let's get serious and let's discuss saving and investing your money. And a piece of advice that you often hear Joel is save ten percent of your income. This is advice I even heard as a little wei one growing up, and you might be asking, like, why is this crappy advice? This sounds smart, and it kind of is. It's certainly better than what the average American is saving, which is it's somewhere in the three percent range. Yeah, And so if you're in that position, if you aren't currently even saving a tenth of your income, then yes, this is a good goal to strive for. But we don't want how the money listeners out there to be the average American. We don't want you to stay there. We don't want that ten percent basically to be a ceiling for you because sometimes mainstream financial advice that actually I think they set the bar too low. And if you stick with this incredibly basic framework of saving even as your your income increases over the years, you're gonna find it hard to make progress towards those bigger financial goals. If you get complacent just you know, saving ten percent of your income, it's going to be tough to save up to pay cash for a car or amassing a big old down payment for a home purchase while simultaneously socking away enough for retirement. And not only is it about the ability to achieve some of these financial goals that you've identified today, but we're also talking about being able to achieve financial goals tomorrow, right, Like, these are all things that today, that today Matt wants to do, but what about tomorrow, Matt. I don't know what tomorrow Matt wants. And so the ability to save a little bit more than that stand or ten percent gives me that additional flexibility, gives me options to pursue some of those goals in a way that feels like I'm making progress as opposed to just completely resetting the clock.

00:33:47
Speaker 1: I'm pretty sure tomorrow Matt is going to want a quartato at the local cofee shop, but he's gonna have to wait till next week. Okay, next week Matt is going to get that. Just one a week, one a week, that's always al right, And yeah, I think that. I think you're right, Matt. I think that is kind of this basic tenet of personal finance advice, and many people strive for and then you get to ten percent and you rest on your laurels, and because of that, it takes a really long time to make meaningful progress. And we think people should be seeking to save a lot more of their money, and other cultures do this.

00:34:11
Speaker 2: Well, what is it in Japan?

00:34:13
Speaker 1: The average person saves something like in the thirty percent range of their salary.

00:34:16
Speaker 2: Think it's so much higher.

00:34:17
Speaker 1: We are abysmal at saving and yeah, how to money listeners.

00:34:21
Speaker 2: Can do better than that.

00:34:23
Speaker 1: We know that well, and we're too soft, that's right. We're trying to harden you up. And let's talk about some crappy investing advice for a second, because really we could do a whole episode about crappy investing advice.

00:34:34
Speaker 2: There's a lot of that out there that's true.

00:34:36
Speaker 1: But one of them we would say is buy low and sell high. And I feel like you hear in a down market, you hear more people talking about that, buying the dip, that kind of stuff. And again, Matt, kind of like what you said with the ten percent things, like this is kind of sort of good advice, like there's a nugget of wisdom here, but there's also the fact that this piece of advice could completely mess you up, and it's just not possible really to buy low and sell high, is what we would say. Stats show year after year that even professional fund managers consistently underperform the simple strategy of buying straight up index funds. And these are people that are highly compensated, right that this is their job to attempt to outperform the market to get outside returns. But the reality is that trying to buy the dip means you're waiting on stock prices to go down, and the truth is stocks are mostly on an up into the right trajectory, right, that is the overwhelming direction that they're heading. And that means if you're holding onto money that you want to invest in hopes of a market downturn to score a better deal, you're more likely to miss out on gains than you are to get that deal that you're hoping for. And so that's why we prefer we advocate the dollar cost averaging approach, mostly ignoring current market conditions because your cash sitting on the sidelines while you're trying to buy, the dip is experiencing opportunity costs and it's just being smacked around by inflation and today. So we would say just keep buying. Don't worry about timing the market. The key is to get your money in the market with regularity. So if you hear buy low and sell high, it's advice. It sounds good, but pulling it off, it's like, hey, yeah, I just go out there and hit four home runs in a game and it'll be all be all good. I've never tried to hit a home run map, but I know it's really difficult and that even the best guys like hit you know, sixty a year, right, and that's really hard to come by. So hitting four home runs in a game, that's it's great advice if you can actually do it.

00:36:27
Speaker 2: Sounds impossible. Yes, technically that is correct. You do that and you'll be the MVP. You're gonna make millions or billions. The same thing with buy low sell high. In theory. On paper, it's great advice, but actually executing it virtually impossible. Joel something else like, I feel like this isn't necessarily like advice that you hear, but just kind of maybe more sentiment when it comes to investors, which is the fact that they're afraid that the market is going to collapse. There's a number of fairly bright individuals out there who continue to predict that this stock market like that is just this house of cards and that were all bound to get wiped out in this historic catastrophe. Like it kind of makes me think of like the fundamental Christians who predicted the end of the world, like back in the eighties. Thure.

00:37:10
Speaker 1: It's kind of how Lindsey and he wrote like three books about it, and he was just wrong every time.

00:37:14
Speaker 2: He predicted that. And when their conviction ends up being dead wrong, like they instead they often just double down.

00:37:19
Speaker 1: Oh wait, I was just wrong on that date, and now I've gotten pushed that out seven new insights, and so they predict an even more catastrophic event on the horizon.

00:37:27
Speaker 2: And so when it comes to the different financial advice out there, like best selling author of Rich Dad, Poor Dad, Robert Kiwasaki, he's one of those folks, but there are definitely others as well. But the truth is the market it's got its ups and downs, as we've experienced this year, but there's still no easier way to build wealth despite the significant amounts of volatility than regularly investing in the American economy. Humans, we are incredibly creative, We're adaptable creatures. It's best to just ignore these predictions of doom and gloom. There is enough other normal, sad, normal stuff out there for us to worry about. And by the way, I was talking about the volatility, like that bumpy ride that you experienced in the market, that is a feature, not a bug. That is what allows us to be able to see growth over the long haul. And again, if there is some sort of catastrophe something like I don't like a nuclear attack or something like that. I think we've got bigger problems. And it doesn't matter if you're invested in whatever alternative investment. It's also not going to save you if we're approaching the end of the world.

00:38:30
Speaker 1: Yeah, And a lot of the folks that are the loudest voices, Matt saying that the stock market is a house of cards, or that we're going to see massive declines this year or depression twenty twenty three, it's inevitable. Those people often have a financial incentive to scare people in order to buy what they're selling.

00:38:45
Speaker 2: Yeah, but by the way, have you checked out this company and they happen to sell goal?

00:38:49
Speaker 1: That's right, And here's how you save yourself from this from being impacted to the extent that other people are impacted when everything goes to hell. And another investing thing that you probably hear that people here investing advice is to invest in what you know you might hear folks say that it makes sense to invest in companies that you use regularly. So like, if you absolutely love Netflix, if you're a fan of the content they create, you should invest in the stock. And if you can't wait to like spend time in the metaverse, let's say, which I've not heard anyone say that before.

00:39:20
Speaker 2: That was my Netflix tone. Nicely done, thanks.

00:39:23
Speaker 1: And yeah, I mean, like, have you heard anyone say they want to spend time in the metaverse? I feel like they know I definitely have the zuck. He's getting criticism for that these days because he's sticking a lot of Facebooks dollars or Metas dollars towards this future potential universe. But yeah, if you if you are excited about that, if you're one of the rare people couldt toss some of your retirement dollars in a company that you think has some insight into what we're all going to be doing in the future. Or let's say you are a big fan of the Yeezy shoes, which I don't probably nobody is anymore. Kind of got canceled, but.

00:39:53
Speaker 2: After you went on as incredible anti Semitic.

00:39:56
Speaker 1: Tirades, and so we saw what happened with a DIDA stock. You never know, even just like the crazy bumplings of a celebrity, can lead to a precipitous fallout in a company stock. So I get kind of why this advice gets spread. But hopefully with each one of these examples you can see how it might play play out. Like first, we're not fans of investing in single stocks. The two of us, we talk about money and investing all the time, and we don't do it. But the reality is, you just never know what competition or other headwinds might be coming for that company you love. When it comes to Netflix, there's more streaming competition out there than ever before. And it's not to say that Netflix won't ultimately succeed, but for a while they had it easy. They didn't have much competition and the edge. And it's not to say that people won't want to spend time in the metaverse. If Zuckerberg can make it something fascinating, if he can make it like Ready Player one style, maybe we'll all be in there like doing cool stuff.

00:40:51
Speaker 2: Or we won't because people because we just don't know the future, right like that. That's the predicament here, is that we have no clue. And when you're putting all of your eggs in literally one basket with war stock like this, it's difficult to know because, yeah, metaverse folks might realize that, you know what those in real life relationships, going back to Victor Frankel. Frankel, those are the relationships that matter, not not this imitation stuff. Basically that we're funding on the metaverse.

00:41:14
Speaker 1: Just because you like company's shoes doesn't mean that they've partnered with the right people to help, you know, improve that business and to reach more customers. Over the long haul, those relationships can sour, costing companies hundreds of millions of dollars.

00:41:27
Speaker 2: Yeah, and we're, like you said, like we're talking about individual stocks. But even beyond that, I think the same lessons can be applied to entire sectors, right, because during the pandemic, what did we see in the tech sector? We saw tech stocks taking off, they crushed. And now what we've seen so far this year is the man bloodbath with all the big, big tech names. And instead of what we've seen is energy stocks. The entire energy sector is like at all time highs.

00:41:52
Speaker 1: And so now you might be saying, oh, now is the time to invest in exon.

00:41:54
Speaker 2: But you don't know. You don't know, so instead invest in widely diversified index funds like VU or VTS, both of Vanguard's either total stock or s and P five hundred index funds. And so don't invest in what you know, because that essentially it's a shallow understanding. It's a shallow measure of what you think might be successful in the future. But it is a far cry from an actual analysis, let alone a prediction of what actually might happen in the future.

00:42:19
Speaker 1: And so oftentimes when we do this, Matt too, we just get the timing wrong. So you might kind of be right, maybe the metaverse.

00:42:24
Speaker 2: Will exactly going back to timing of the market. Yes, sure, buy low, sell high, but how the heck do you figure that out? It might be fifteen years from now. In retrospect hindsight, it always looks so easy because you're framing the past by what you are experiencing today. And so yeah, looking back to the pandemic, you're thinking, of course, tell you know, we're talking about teledoc earlier. Of course they were going to crush. Everybody's going to be at home, everyone's going to be prize these technology companies. But at the time we didn't know that. Yeah, and so the same thing you know applies to the present moving forward, we have no clue what the future is gonna hold.

00:42:56
Speaker 1: Are you gonna have this ramna? In retrospect you might be able to figure it out the four to two to hold on to those to those stocks when they're plummeting, when they're not doing well, just because you have that ultimate faith and belief. Probably not like most people. At some point they cry uncle, they sell, and so like right now you a doubt yourself. Yeah, it's don't at the wrong time. I think there's just a lot to be said for not taking that approach, even though there's a lot of people that are going to say that that's what you should do and that that that's how stock market investing makes sense to the average individual, but I don't think that's the case, and I think investing in the market as a whole is something that's easy for the average American to understand. You don't have to start picking individual stocks of companies that you already kind of kind of like in order to be a good investor, and in fact, it's probably going to take you down the wrong path.

00:43:39
Speaker 2: That's right. Yeah, Again, we could do an entire episode on the crappy investing advice that we often hear, but I mean, as we kind of round this episode out, bottom line, we just want you to be careful who it is that you listen to. There's probably a lot more crappy personal finance advice out there than you think, and we can't tackle all of the poor advice that you might come across just in one episode. So bottom line, we want you to be careful who it is that you're listening to. We think that there's probably a lot more crappy personal finance advice out there than you think, and you know, we can't tackle it all just in one episode. Oftentimes it's the folks who are screaming the loudest. It's the folks who have the most rigid rules out there, they can be the easiest to understand, for sure, but it doesn't mean that their advice is going to be best for you. You know that's going to be best for you to listen to them, or that it'll actually be the most helpful for you in the long run. At least personal finance advice, it can and should be nuanced. It takes time, like we talked about earlier too, and not all advice is created equal, and some of the different blanket rules of thumb that you come across for everyone, no matter what their their individual financial situation looks like, that is not a great tactic. Where it is that you are in your financial journey. It's crucial to the advice that you should be heeding and with that, make sure that you spend enough time thinking about this. I think oftentimes folks they go with the slogan advice, the thing that's easy, need to repeat, They go with the headlines, and instead we want you to think about it. We don't want you to spend too much time, but spend enough time that you are informed and that you're able to make the best decisions for yourself.

00:45:10
Speaker 1: Yeah, and it just makes me think, Matt that, like you mentioned Victor Frankel's book, and I think it's a great one, and it's actually it's pretty skinny. It's not really that hard for most books to read. But if I hand it to my seven year old who's in the second grade, when she's reading Pete the Cat kind of books, right, Like, that's kind of the vein she's in. She might be able to understand a good chunk of the words. She's not going to understand what she's reading though, And so yeah, when you do blanket advice or you say this is the best thing for everyone, oftentimes we're missing the reality that people are at different points in their financial journey. And so we try to bring that nuance to the forefront so that people can see, like how we're coming through our conclusion, so they can come to their own not just tossing a phrase out there and hoping that everyone adapts accordingly like that. That's not a plan, that's not our path, that's not how we.

00:45:52
Speaker 2: Roll, all right, man? Is that it for this episode? Yeah, let's get to the beer. This episode, you and I enjoyed Uplifted, which is a Scottish style Ale from Talisman Brewing Company. Thank you Andy for donating this one to the show.

00:46:03
Speaker 1: What were your thoughts, buddy, So I've never had this was like a light version of a scott chaliel.

00:46:08
Speaker 2: Yeah, so I was reading on the side it said it's it's like a session sessionable Scottish aale. Yeah, so it was.

00:46:13
Speaker 1: I would say it was kind of like a light brown nail in a lot of ways, and I like a good Scotch jale. We actually got to have a good one on the show not too long ago, and that was fun because scott shales are actually kind of hard to come by, not many people may come. But this one left a little more to be desired than that one. It was just it was kind of lacking in some of the flavor profile and some of the punch I typically like to get it.

00:46:32
Speaker 2: Scott wasn't quite as toast. I mean a lot of times it's characterized by like a toastiness. Yeah, like some bigger, darker flavor caramel vibes. This one was like almost a little bit tart. So maybe that that lightness and body lent itself, So maybe it's just a yeah, like a slight tartness, but as always, I would rather be drinking a craft beer with you while we record an episode the Notts. So I'm glad that you and I were able to enjoy one of these today, budd. Yeah.

00:46:56
Speaker 1: And by the way, I mean we talked about smart rules for spending earlier, just for a second, as we were talking about the latte factor, and that you and I kind of go what we do flies directly in the face of that. We drink a craft beer, often an expensive craft beer, every episode. This one fortunately was free, thanks Andy. But but we are spending our own money for ninety five percent of these beers because and not just because we love beer, that's a big part of it, but because there's another lesson to be had in there. That's spending money all the things that you love in the here and now while you're getting good with your money is an important part of the equation.

00:47:27
Speaker 2: Yep.

00:47:27
Speaker 1: And going too hard, becoming hyper frugal over the top, is a recipe for disaster in the long run.

00:47:33
Speaker 2: Yeah, yeah, all frugal and no splurge mixed, jul and iied dull boys.

00:47:36
Speaker 1: That's right, we don't want to be that. So all right, Matt, that's going to do it for this episode. If you have another piece of financial advice that really sucks, that's really great to you, that you find around the interwebs at some point, send it our way. We love to hear from you. Reach out to us. You can email us at how to Moneypod at gmail dot com.

00:47:52
Speaker 2: That's right, buddy. So that's going to be it for this episode until next time. Best Friends Out, Best Friends Out,