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

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Speaker 1: and today we are answering your listener questions. That's right, chel,

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Speaker 1: Our listener question episodes are always very fun to do

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Speaker 1: because we get to hear from five different listeners every

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Speaker 1: single week. This week we have a question about investing

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Speaker 1: in your twenties, we have a question coming out of

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Speaker 1: Texas regarding solar panels, and then towards the end, we're

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Speaker 1: gonna answer a question regarding a helock or we think

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Speaker 1: it's a helock. But we'll get into that at the

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Speaker 1: end of this episode, the mysterious think it's a helock.

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Speaker 1: But first man, let's share a quick tip from a listener.

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Speaker 1: Listener Susie. She wrote in and recently we talked about

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Speaker 1: Canopy and how that's a fantastic option for folks to

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Speaker 1: get streaming video content from their local library were free

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Speaker 1: for free. Exactly. Yeah, they've got great video, they've got

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Speaker 1: great movies, they've got some awesome kids content, like I

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Speaker 1: know they've got PBS kids on their stuff like that.

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Speaker 1: But she wrote it and she was mentioning how her

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Speaker 1: local library didn't have that as an option, and she

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Speaker 1: was kind of bummed out. But what she discovered was

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Speaker 1: that the bigger library or library system in her state

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Speaker 1: allows for anybody that lives within that state to have

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Speaker 1: a membership to have a library card essentially at that library.

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Speaker 1: And so for her, she was basically a long distance

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Speaker 1: member of the Boston Library and so through that she

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Speaker 1: was able to access Canopy in all the joy that

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Speaker 1: it has to offer, which is just a fantastic perk. Yeah,

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Speaker 1: that's great. We mentioned on the show about cutting the

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Speaker 1: chord and cutting your TV cost. We looked it up

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Speaker 1: and and we don't have access to Canopy Matt in

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Speaker 1: our library system, which is huge bummer. Yeah, totally lame.

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Speaker 1: But I did some digging and I couldn't find any

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Speaker 1: other library system nearby where we live that we have

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Speaker 1: access to. So yeah, I totally looked after that email

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Speaker 1: came into and I thought, what other library in the

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Speaker 1: state is going to be bigger than than the Atlanta Library.

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Speaker 1: So my my search really didn't last long. Yeah, Kate

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Speaker 1: was telling me to check in Athens, maybe just because

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Speaker 1: there might be some affiliation with U g A, and

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Speaker 1: I don't know, they might have a bigger system there.

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Speaker 1: But I kinda ran out of time more patients. Well,

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Speaker 1: that's true, and there are you can if you're affiliated

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Speaker 1: with the university canopies offered through that affiliation to sometimes.

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Speaker 1: So it's definitely worth looking into. And it's good to

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Speaker 1: know that, especially if you are a member of a

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Speaker 1: smaller library system where you live and canopy is not

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Speaker 1: offered to maybe look for some of those bigger library

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Speaker 1: systems in your state to see if you could potentially

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Speaker 1: join one of those and get access, because there are,

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Speaker 1: like you said, just some really great options for for

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Speaker 1: viewing content. A lot of like cool indie flicks and

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Speaker 1: a lot of great kid content. So I mean, what

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Speaker 1: about indie kid flicks? That a thing? Maybe those two?

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Speaker 1: Maybe those two. It's like, oh, my kids crying. I

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Speaker 1: don't think they need to be watching this documentary. I

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Speaker 1: don't know if kids should be watching Wes Anderson Fields

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Speaker 1: or not, but that's what I tell towards them. Yeah. Well,

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Speaker 1: I wanted to mention the reason that the smaller libraries

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Speaker 1: often tends not to have canopy is because it costs

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Speaker 1: a lot of money that somebody else had written in

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Speaker 1: as well, mentioning that it's not actually free, like somebody

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Speaker 1: is paying for it and it's the library system that's

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Speaker 1: paying for it. So it makes sense that these huge

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Speaker 1: libraries have that as an offering because they I guess

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Speaker 1: they have bigger budgets versus the smaller town libraries. They

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Speaker 1: can't afford to offer those posh offerings. Yeah, you're completely right.

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Speaker 1: It's it's kind of expensive for libraries to be able

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Speaker 1: to offer something like canopy or even really to have

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Speaker 1: like a robust DVD portfolio at the library because educational

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Speaker 1: systems like libraries and universities, they pay more than we pay.

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Speaker 1: They don't pay twenty bucks for DVD, they pay like

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Speaker 1: two hundred bucks because of the way things are structured.

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Speaker 1: A lot of money. Man. Yeah, I know, I wish

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Speaker 1: that wasn't the case, but it does make cannopy prohibitively

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Speaker 1: expensive for for some library systems. And and yeah, I

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Speaker 1: don't know. I hope we get it here soon because

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Speaker 1: it's a really cool app and it's nice to be

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Speaker 1: able to stream stuff as opposed to having to go

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Speaker 1: in person and grab the DVD and bringing home and

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Speaker 1: stuff like that. I I don't even think we have

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Speaker 1: a DVD player anymore. Yeah, I was gonna say we

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Speaker 1: no longer do that. At all because our DVD players

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Speaker 1: up in the attic covered in dust and we need

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Speaker 1: to get rid of it because I just don't want

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Speaker 1: it in my life. Yeah, I think ours broke and

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Speaker 1: we're like, well, I don't think we need it anymore,

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Speaker 1: so we're just kind of done with it. It's it's

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Speaker 1: pretty much streaming only in our household. Yeah, for sure, man,

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Speaker 1: you want to introduce our beer for this episode? Sure? Yeah.

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Speaker 1: Today on the show, we are drinking a beer called

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Speaker 1: Bierra Nazioale by Beera Baladin. Yeah, we gotta roll those

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Speaker 1: ours a little bit Italian. I did not roll my

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Speaker 1: hours very well on the intro. This is an Italian beer.

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Speaker 1: If you couldn't tell, our friend Andrew was just over

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Speaker 1: in Rome and he was kind enough to bring us

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Speaker 1: back this really fine example of an Italian beer. So

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Speaker 1: really excited to try this one on the show and

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Speaker 1: talk about it at the end. It's in such a

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Speaker 1: cute little bottle, right, It's it's really small and I'm

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Speaker 1: gonna describe it to folks. It reminds me of an

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Speaker 1: old school glass bottle of aftershave, specifically old spice. I

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Speaker 1: remember my dad having the shade bottle where it's kind

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Speaker 1: of it tapers up to the top with a little stopper,

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Speaker 1: you know I'm talking about. Yeah, Okay, see, all I

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Speaker 1: can think of. What I'm thinking about after shave is

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Speaker 1: the home alone scene where he slashed on his face

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Speaker 1: and it's like that green bottle of Brute which everybody

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Speaker 1: had in like the late eighties early nineties. I will

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Speaker 1: say I'm a fan of Brute. That's it's basically classic

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Speaker 1: dad smells. So if you like, maybe that's why, like,

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Speaker 1: now that I have kids, I've kind of transitioned into

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Speaker 1: that role, including the way I smell, because I'm like, well,

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Speaker 1: I want to smell like a dad's I don't want

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Speaker 1: to smell like a bro. Well I'm proud. I'm proud

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Speaker 1: of you for carrying the torch and keep on smelling

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Speaker 1: like a dad for all of us, for all the

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Speaker 1: dads out there. All right, Yeah, and so let's get

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Speaker 1: onto our listener questions. Matt, Like every week, we've got

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Speaker 1: five on deck that we are going to tackle. And

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Speaker 1: for anybody out there who wants to submit a question

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Speaker 1: for Matt and I to take on a future Ask

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Speaker 1: htm episode, well, there are really simple instructions to submit

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Speaker 1: your voice question. All you gotta do is go to

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Speaker 1: how to money dot com slash ask. The instructions are

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Speaker 1: They're super simple of taking a couple of minutes to

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Speaker 1: submit your question to us, and we hope to take

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Speaker 1: it on a future episode. All right, let's get to

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Speaker 1: the first one. Now, about convert a four oh three B. Hi,

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Speaker 1: Matt and Joel, this is Ashley from hebrewn, Connecticut. I

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Speaker 1: hope you guys are doing well. I love your podcasts

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Speaker 1: and I really appreciate all the great information and advice

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Speaker 1: you guys are giving out. But I do have a

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Speaker 1: question I was hoping you could help me out with.

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Speaker 1: My previous employer was a hospital, so they only offered

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Speaker 1: a four or three B plan. I now currently work

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Speaker 1: for somebody who offers a four oh one K. I

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Speaker 1: know I'm not able to roll my four oh three

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Speaker 1: B plan into my four oh one K, so I

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Speaker 1: was wondering what you thought the best options were for

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Speaker 1: the four oh three B at this point. Should I

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Speaker 1: let it sit and gain money and interest as it sits?

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Speaker 1: Should I? Or can I roll it over into an

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Speaker 1: IRA or a raw THI RA without any tax implications?

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Speaker 1: Or do you have any other advice that you think

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Speaker 1: I should do with this plan. At this point, I

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Speaker 1: appreciate the help guys. Thinks. All right, Ashley, so it's

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Speaker 1: cool that you have a four or three B, but

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Speaker 1: you're talking about maybe rolling that over to something new.

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Speaker 1: The answer to that is yes, now is the time

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Speaker 1: to do that. You do not want to leave your

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Speaker 1: money currently in your four three B, and that's because

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Speaker 1: they are just one of the worst retirement accounts out there. Unfortunately,

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Speaker 1: kick that four or three B to the curve because

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Speaker 1: the fees are way too high. Yeah, and that's typically

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Speaker 1: why I mean the different insurance companies are the ones

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Speaker 1: who often run the plans for nonprofits, school systems or

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Speaker 1: in your case, hospitals, and this is gonna mean higher

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Speaker 1: fees and just worst fun choices for you to have

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Speaker 1: your retirement money invested in. It's such a bummer, Matt,

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Speaker 1: because people that work in these just amazing professions, a

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Speaker 1: lot of a lot of nurses, a lot of teachers

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Speaker 1: often have access to the retirement accounts to have the

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Speaker 1: highest fees that are kind of the crumbiest out there

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Speaker 1: and have the worst fund options. Honestly, it's upsetting. I

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Speaker 1: wish that we would change the system and really just

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Speaker 1: simplify it. Give just fewer types of accounts and accounts

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Speaker 1: that prioritize lower fees across the board for people in

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Speaker 1: any profession, whether it's a nonprofit or teacher or in

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Speaker 1: the for profit corporate world. That would be great, right,

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Speaker 1: But actually, now has this opportunity to ditch the four

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Speaker 1: or three B with the potential and likely high fees

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Speaker 1: for something better. So yeah, now is the time that

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Speaker 1: you want to go ahead and do that rollover. Actually, however,

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Speaker 1: you to make sure that you are being careful when

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Speaker 1: you do this, because you don't want to run a

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Speaker 1: foul of the i R s. Essentially, you don't want

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Speaker 1: to create a taxable event, so make sure to follow

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Speaker 1: these steps appropriately. You don't want to check made out

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Speaker 1: to you directly. Instead, you want a direct rollover, which

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Speaker 1: is sent to your new i R a trustee. If

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Speaker 1: you fail to do that, there's a chance you could

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Speaker 1: lose up to thirty of the money, and that's because

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Speaker 1: you would get hit with a ten percent early withdrawal

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Speaker 1: fee and then you would pay taxes on that money

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Speaker 1: depending on whatever tax bracket you're in. So if you're

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Speaker 1: saying the tax bracket, you get hit with that ten

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Speaker 1: percent fee boom, all of a sudden, you're parting with

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Speaker 1: your money. Yep, and that's no boy no. So when

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Speaker 1: you're thinking about where to go, I love your idea

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Speaker 1: of rolling this four or three B into an i

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Speaker 1: RA A. There is a chance that your new employer,

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Speaker 1: who you now have a four oh one K with,

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Speaker 1: will let you roll your four oh three B into

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Speaker 1: this four oh one K. The i r S allows that,

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Speaker 1: but it's up to your employer whether or not they

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Speaker 1: actually allow it. So it might be worth considering if

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Speaker 1: that four oh one K provider is one of the

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Speaker 1: uber low cost providers who offers you access to a

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Speaker 1: lot of great low cost funds. But rolling it into

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Speaker 1: an IRA is a great idea too, because you get

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Speaker 1: to pick exactly where it goes. So the way to

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Speaker 1: handle this is to contact your current four or three

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Speaker 1: B administrator. If you don't know who that is, check

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Speaker 1: your last statement, tell them you want to initiate a

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Speaker 1: rollover and who you want this four or three B

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Speaker 1: to be rolled over too. And we just mentioned the

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Speaker 1: potential low cost investment companies that your four oh one

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Speaker 1: K provider might be doing business with. Well, you're gonna

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Speaker 1: want to look at one of those for an IRA

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Speaker 1: a rollover. So companies like Vanguard or Fidelity or m one,

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Speaker 1: those are gonna be the best places to roll this

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Speaker 1: four or three B over into an IRA. And all

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Speaker 1: you gotta do is pick your favorite, ask that new

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Speaker 1: company where the current administrator should send this check, and boom,

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Speaker 1: you're good to go, and you'll have a wider choice

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Speaker 1: of low cost funds at your disposal that you, in

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Speaker 1: all likelihood never had access to before inside of your

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Speaker 1: four three you with your former employer. And let's highlight

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Speaker 1: to why we're calling this a rollover. A four three

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Speaker 1: B is with pre tax money, and with a traditional

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Speaker 1: IRA that you're that you could be rolling it into,

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Speaker 1: it's also with pre tax money, and so this is

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Speaker 1: essentially a very similar retirement plan, just with better options. Yeah,

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Speaker 1: it's like apples to apples, right, Yeah, exactly. You're you're

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Speaker 1: not changing things up too much, You're just exchanging into

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Speaker 1: a much better product, but the same tax treatment. Yes, yeah,

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Speaker 1: the same tax treatment. That's the best way to look

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Speaker 1: at it. Because another option is that instead of rolling

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Speaker 1: it over into something that's very similar, you could convert

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Speaker 1: it to a roth IRA, which you mentioned as a possibility.

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Speaker 1: Just know that you'll have a lump sum tax bill

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Speaker 1: do when you make that conversion, because instead of realizing

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Speaker 1: that tax benefits now on the front end, you're gonna

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Speaker 1: be realizing that on the back end down the road,

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Speaker 1: and so you have to pay that tax now. And

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Speaker 1: it's a great idea though, if you have that spare

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Speaker 1: money now to go ahead and pay that tax, and

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Speaker 1: you would be able to avoid these taxes down the road.

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Speaker 1: This is especially great if your income is lower currently

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Speaker 1: and if you're in a good and low tax bracket. Yeah,

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Speaker 1: with the most sent tax reform bill, tax brackets were lowered,

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Speaker 1: and there's a chance that in a few years tax

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Speaker 1: brackets go back up again. And so if you're in

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Speaker 1: a low tax bracket and you have the cash on

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Speaker 1: hand to be able to to pay that tax bill,

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Speaker 1: converting your four or three B into a roth instead

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Speaker 1: of just doing that rollover into a traditional array, that's

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Speaker 1: a great idea. We just want to make sure you're

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Speaker 1: aware and you're not shocked when you file your taxes

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Speaker 1: at the beginning of next year, because that's a route

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Speaker 1: awakening for folks who didn't plan ahead for that, So, yeah, exactly,

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Speaker 1: and that's what I would do. I would totally convert

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Speaker 1: it to that Rath You and I we both love

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Speaker 1: that Rath action. Yeah, and then it just grows tax

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Speaker 1: free for years and years and years for decades on end.

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Speaker 1: So it's a it's a good way to go. Actually,

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Speaker 1: best of luck with this. All right. We've got more

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Speaker 1: questions to come, including one about solar, and we'll get

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Speaker 1: to that right after the break, all right, Gil, Before

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Speaker 1: we get to that solar question, let's hear about investing

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Speaker 1: in your twenties. Hey guys, it's gonsolved from Connecticut. I'm

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Speaker 1: to finish school with very minimal debt since I decided

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Speaker 1: to trade school was something I would enjoy more. I

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Speaker 1: only took that debt on since it's interest free six

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Speaker 1: months after I graduate, so I'll have money by then,

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Speaker 1: and that student loan will help improve my credit score.

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Speaker 1: I work a full time job, but don't make a

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Speaker 1: lot of money. I have opened at Rath, iroway with

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Speaker 1: Vanguard thanks to your guys recommendations. So now I'm wondering

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Speaker 1: where do I look into investing next. I understand compound

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Speaker 1: of skins, so what ideas would you would you guys

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Speaker 1: have me look into investing in your twenties. Thanks, love

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Speaker 1: the show and keep up the great work. God's all.

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Speaker 1: That's a great question, man. I gotta say your choice

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Speaker 1: to go to a trade school. I love that. The

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Speaker 1: key is that you said you would enjoy it more.

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Speaker 1: And man, there's so many people just going to college

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Speaker 1: taking on a bunch of student loan debt, and they

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Speaker 1: haven't put much thought into what they enjoy, into what

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Speaker 1: they want to do, And you're making an intentional decision,

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Speaker 1: which is awesome. It's a hard to do in your

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Speaker 1: early twenties. I know, even for me, I kind of

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Speaker 1: waffle back and forth. So it's great to hear that

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Speaker 1: you're going to graduate with minimal debt. That gives you

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Speaker 1: so many options and so much flexibility. But I just

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Speaker 1: want to reinforce the importance of paying off those student

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Speaker 1: loans that you took out, especially if they're in that

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Speaker 1: six to seven percent interest rate. Once that interest free

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Speaker 1: period is over, you don't want to forget about them.

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Speaker 1: You want to crush that debt and then you can

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Speaker 1: start focusing on the heart of your question, which is

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Speaker 1: beginning to invest more of your income. Yeah, because that's

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Speaker 1: awesome that you've already started your wrath. That's a little

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Speaker 1: more traditional investing. But the first thing that we would

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Speaker 1: suggest is to make sure that you are investing in yourself.

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Speaker 1: Your human capital is going to be key to you

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Speaker 1: earning more money, and when you're able to earn more,

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Speaker 1: you will be able to invest more money. Whether that

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Speaker 1: be just through additional training, maybe getting certificates, even like

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Speaker 1: networking and different relationships that you build within your industry.

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Speaker 1: These are all things that could lead you to earning

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Speaker 1: more at your current employer, and honestly, man, it could

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Speaker 1: also lead to you potentially starting your own business doing

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Speaker 1: the trade that specific skill that you learned how to do. Yeah,

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Speaker 1: I think, Matt sometimes in our early twenties, I love

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Speaker 1: the idea of people opening a wrath, putting money in

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Speaker 1: a rath, trying to max that out. But if it's

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Speaker 1: strapping you to the point where you're not able to

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Speaker 1: prioritize investing in yourself, where you're not able to take

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Speaker 1: a course or pursue a certificate, or have that seed

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Speaker 1: money to start that business that you want to, well,

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Speaker 1: that's when you want to actually back off the investing

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Speaker 1: in the stock market, and you wanna redirect that money

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Speaker 1: into investing in yourself because that kind of stuff pays

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Speaker 1: dividends for decades to come to and sometimes in a

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Speaker 1: more meaningful way. Man I so hear you, because that

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Speaker 1: is the first thing that I did when I first

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Speaker 1: learned about rath I ra a S. I totally opened

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Speaker 1: up a wrath. I didn't really have much of an

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Speaker 1: income at the time, and I definitely didn't have an

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Speaker 1: emergency fund either, but it's something that you learn about,

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Speaker 1: you hear about, and man I totally went for it,

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Speaker 1: opened that up, made some contributions, and then it sat

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Speaker 1: there and I wasn't able to make any more contributions.

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Speaker 1: So I'm going to guess for maybe two to three

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Speaker 1: years because I realized I needed to do some other

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Speaker 1: things first and for me at least to get my

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Speaker 1: financial ship pointed in the right direction. Yeah, and we

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Speaker 1: would never tell someone in the early twenties don't invest

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Speaker 1: in the stock market, because we know likes I'll said,

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Speaker 1: the power of compounding returns. It's huge. It will make

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Speaker 1: you wealthy if you continue to invest, even really a

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Speaker 1: small amount a thousand dollars, a couple of thousand dollars

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Speaker 1: every year. By the time you're in your sixties, you're

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Speaker 1: gonna have a lot of money because you prioritized investing.

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Speaker 1: But even though we know that power, there's a huge

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Speaker 1: power in growing your knowledge and your skills in your

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Speaker 1: early years, your post graduate years, so that you can

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Speaker 1: make more money. And that is going to have i

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Speaker 1: would say even a bigger return for you over time. Yeah,

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Speaker 1: certainly over the lifetime of that career. So that's investing

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Speaker 1: in yourself. But then, Gonzal, what you're asking about is

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Speaker 1: traditional investing, right, and so we're gonna get to that

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Speaker 1: part of your question. You mentioned the rath You want

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Speaker 1: to work towards maxing out that rath IRA. Also, if

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Speaker 1: you have tax advantage retirement accounts through work, you want

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Speaker 1: to make sure that you're contributing there as well. And actually,

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Speaker 1: if your employer offers a match, you want to make

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Speaker 1: sure that you are contributing enough to take full advantage

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Speaker 1: of the match first without four O one K, and

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Speaker 1: then go ahead and max out your roth IRA. Yeah,

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Speaker 1: don't be afraid also to invest aggressively. When you're in

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Speaker 1: your twenties, you're you're obviously in the wealth building stage

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Speaker 1: of your financial life, and so putting pretty much all

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Speaker 1: of your money into low cost index funds is so important.

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Speaker 1: I know a lot of people in their twenties. They

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Speaker 1: open up an account like a four oh one K

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Speaker 1: where they work or a raw I RA, but then

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Speaker 1: they don't know where to put it inside of that,

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Speaker 1: And Matt and I would say low cost index funds

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Speaker 1: are the way to go. And also set a goal

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Speaker 1: to increase the percentage of what you're saving and investing

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Speaker 1: every six months. If you can set a reasonable amount

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Speaker 1: that you can contribute now and that you can continue

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Speaker 1: to put in month in and month out, that's great.

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Speaker 1: But you also want to make sure that you're bumping

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Speaker 1: that up as you go, and in particular as you

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Speaker 1: get pay increases. That's when it's easier to do it. Yeah,

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Speaker 1: you don't want to have that American savings rate, which

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Speaker 1: I think is like around seven percent. You want to

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Speaker 1: have the savings rate that they have in Malaysia or Singapore.

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Speaker 1: I think it's like or wicked savers over there they do,

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Speaker 1: and it's all You might also want to consider real

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Speaker 1: estate for you that might be a good option. You

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Speaker 1: didn't say specifically what trade that you're in school for

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Speaker 1: But I'm guessing you might be handy, and if that

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Speaker 1: is the case, it actually might be pretty convenient for

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Speaker 1: you to not only own but manage your different properties.

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Speaker 1: I'm thinking if you're an electrician or a plumber, skills

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Speaker 1: like that are gonna relate directly to you being able

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Speaker 1: to save money, manage properties better, keeping tenants happy, while

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Speaker 1: at the same time building wealth. Yeah, man, I agree,

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Speaker 1: I think real estate can be a great option. The

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Speaker 1: big thing if you're in your early twenties is are

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Speaker 1: you planning to state put? If you're planning the state put,

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Speaker 1: you love where you live, so true, Yeah, you've got

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Speaker 1: a solid job, or you just live in a location

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Speaker 1: with lots of great job prospects and it's a place

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Speaker 1: that you love well, then real estate makes a lot

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Speaker 1: of sense. But if you feel like you're gonna be moving,

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Speaker 1: picking up and going, the transaction costs involved in real

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Speaker 1: estate can be a bit heavy, and so you might

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Speaker 1: want to focus instead on on the other things that

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Speaker 1: we mentioned. So, Joel, for you, if you could pick

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Speaker 1: any trade that you're going to learn, what would you pick? Oh?

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Speaker 1: I totally know, underwater welding. It just sounds awesome. I

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Speaker 1: I don't know. I might get a little nervous being

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Speaker 1: down there for for all that time, but it sounds

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Speaker 1: really really So with like the scuba tank, you've got

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Speaker 1: your torch down there, you're like lasting stuff. I guess

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Speaker 1: you have to have on a scuba mask, but then

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Speaker 1: you also have to have on like the visor that

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Speaker 1: you can't see through. That's almost like superhero status. That

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Speaker 1: sounds pretty insane. I'm not gonna lie. For me, it

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Speaker 1: would be an electrician. I don't understand how electricity works,

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Speaker 1: and so to me, an electrician is like part electrician

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Speaker 1: and their part magician, because I don't know how this works,

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Speaker 1: but I just know it does work when I've at

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Speaker 1: the switch, and so I think that's pretty cool. Plus,

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Speaker 1: when it comes to the different trades, you don't see

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Speaker 1: electricians kind of carrying a lot of equipment around. It

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Speaker 1: just doesn't seem like it's backbreaking work. And so if

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Speaker 1: I think long term, what do I want to be doing.

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Speaker 1: I want to be doing the sort of magic trade

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Speaker 1: of electrical work. All right, Well, if this podcast tanks,

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Speaker 1: we know what we're doing next. Right, Speaking of electrical work,

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Speaker 1: our next question is about solar panels. Hey, guys. My

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Speaker 1: name is Joe Trank and I live in Katie, Texas

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Speaker 1: with my wife and my son Um. I'm a huge

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Speaker 1: fan of the show, So thank you guys so much

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Speaker 1: for continuing to educate people on personal finance. I think

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Speaker 1: what you guys are doing is awesome, so keep it up.

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Speaker 1: My wife and I finally just moved into a home

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Speaker 1: where we're looking at staying for quite a while. For

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Speaker 1: the first time. We've been kind of moving every two years,

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Speaker 1: purchasing homes that we convert into rental homes. So now

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Speaker 1: that we're staying put, we're looking into going solar and

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Speaker 1: being in Texas, we get a lot of sun. So

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Speaker 1: my question to you is, have you guys thought about

430
00:19:17,960 --> 00:19:21,560
Speaker 1: it or have you had any other listeners right in

431
00:19:21,680 --> 00:19:23,960
Speaker 1: Just because two thousand nineteen is the last year to

432
00:19:24,080 --> 00:19:30,360
Speaker 1: claim the thirty federal tax refund for solar systems, it's

433
00:19:30,359 --> 00:19:32,200
Speaker 1: been kind of hard. We've been going back and forth

434
00:19:32,240 --> 00:19:34,479
Speaker 1: because a lot of these systems to go a hundred

435
00:19:34,520 --> 00:19:38,280
Speaker 1: percent can get pretty costly. But funny enough, if you

436
00:19:38,320 --> 00:19:40,520
Speaker 1: actually do it this year, it's kind of looking like

437
00:19:40,640 --> 00:19:43,760
Speaker 1: if you finance it for ten years at three percent,

438
00:19:44,560 --> 00:19:48,000
Speaker 1: or even twenty years at five percent, it might actually

439
00:19:48,080 --> 00:19:50,600
Speaker 1: even be cheaper because of the tax credit to do

440
00:19:50,640 --> 00:19:53,320
Speaker 1: it now and finance it rather than just save up

441
00:19:53,359 --> 00:19:56,399
Speaker 1: the cash. Also, this is kind of paired with the

442
00:19:56,440 --> 00:20:00,240
Speaker 1: fact that the new tariff on Chinese solar panels about

443
00:20:00,240 --> 00:20:03,280
Speaker 1: to go into effect, so the market is about to

444
00:20:03,320 --> 00:20:05,520
Speaker 1: go up. I just thought i'd kind of get your

445
00:20:05,560 --> 00:20:08,360
Speaker 1: thoughts on that. Thank you guys so much. Keep doing

446
00:20:08,359 --> 00:20:12,680
Speaker 1: what you're doing, by ah, thanks Joe. We will keep

447
00:20:12,720 --> 00:20:15,120
Speaker 1: it up. You know, Joe and I we like podcasting.

448
00:20:15,359 --> 00:20:18,040
Speaker 1: It's the best it is. And even though someday I

449
00:20:18,040 --> 00:20:20,359
Speaker 1: would love to learn more about some electrical work, I

450
00:20:20,480 --> 00:20:23,159
Speaker 1: am planning to continue to podcasting because it's fun. You

451
00:20:23,200 --> 00:20:27,720
Speaker 1: can maybe become a decent electrician, but stick to podcasting, buddy. Well, Joe,

452
00:20:27,760 --> 00:20:29,359
Speaker 1: it sounds like that you took the path of that

453
00:20:29,440 --> 00:20:32,400
Speaker 1: Joel took in acquiring rentals. I guess I actually did

454
00:20:32,400 --> 00:20:34,320
Speaker 1: this with one. But now that it sounds like you've

455
00:20:34,359 --> 00:20:35,720
Speaker 1: found the house that you want to live in for

456
00:20:35,760 --> 00:20:38,520
Speaker 1: the foreseeable future getting solar, it sounds like that might

457
00:20:38,520 --> 00:20:40,719
Speaker 1: be a great idea for you. And like we mentioned earlier,

458
00:20:40,760 --> 00:20:43,320
Speaker 1: Texas is a great spot because there aren't a ton

459
00:20:43,359 --> 00:20:45,240
Speaker 1: of trees. That's one of the things that here in

460
00:20:45,280 --> 00:20:49,159
Speaker 1: Georgia and Atlanta specifically, there's tons of trees everywhere. Like

461
00:20:49,200 --> 00:20:50,760
Speaker 1: you're flying into Atlanta and I don't know if you've

462
00:20:50,760 --> 00:20:53,160
Speaker 1: ever looked out the window, get that window seat. Atlanta

463
00:20:53,320 --> 00:20:55,600
Speaker 1: is just plopped down into the middle of this giant forest.

464
00:20:55,920 --> 00:20:57,840
Speaker 1: So even if we didn't have just as many sunny

465
00:20:57,880 --> 00:21:00,159
Speaker 1: days as Texas, you've got all those silly trees can

466
00:21:00,200 --> 00:21:01,840
Speaker 1: all that valuable light, you know what I'm saying. Just

467
00:21:01,880 --> 00:21:03,680
Speaker 1: give me an ax and a couple of weeks. I'll

468
00:21:03,680 --> 00:21:05,720
Speaker 1: take care of it. Man, Just kidding. I love trees,

469
00:21:05,960 --> 00:21:08,320
Speaker 1: but in particularly though, for real, and these older neighborhoods

470
00:21:08,320 --> 00:21:09,920
Speaker 1: like that you and I live in, We've got trees

471
00:21:09,960 --> 00:21:12,920
Speaker 1: around here that are eight two twenty years old, I think,

472
00:21:13,119 --> 00:21:15,359
Speaker 1: and they tower over old houses. And so that's one

473
00:21:15,359 --> 00:21:17,280
Speaker 1: of the tricky things that makes it difficult for us

474
00:21:17,320 --> 00:21:20,080
Speaker 1: to consider solar Yeah, those big old trees, they're beautiful,

475
00:21:20,240 --> 00:21:22,640
Speaker 1: but they block the sun from hitting your roof for sure.

476
00:21:22,840 --> 00:21:26,520
Speaker 1: And yeah, Joe, you mentioned the solar tax credit. Twenty nineteen,

477
00:21:26,640 --> 00:21:28,600
Speaker 1: as you mentioned, is the last year to get that

478
00:21:28,640 --> 00:21:31,240
Speaker 1: full thirty percent tax credit. I did want to mention.

479
00:21:31,240 --> 00:21:34,160
Speaker 1: You still get a twenty six percent tax credit next year,

480
00:21:34,320 --> 00:21:37,320
Speaker 1: and even a percent tax credit in one is it

481
00:21:37,359 --> 00:21:40,480
Speaker 1: phases out, So it might not necessarily be an emergency,

482
00:21:40,840 --> 00:21:45,440
Speaker 1: but you definitely want to pursue getting solar with some urgency.

483
00:21:45,720 --> 00:21:47,720
Speaker 1: And on that note, could there be better deals in

484
00:21:47,720 --> 00:21:51,399
Speaker 1: the future installing solar. Maybe. There's so many variables that

485
00:21:51,480 --> 00:21:54,320
Speaker 1: play with the tax credit, terroriffs, potential tariffs, like who

486
00:21:54,359 --> 00:21:57,240
Speaker 1: knows will they get rolled back, will they continue? Technology

487
00:21:57,280 --> 00:21:59,119
Speaker 1: is getting better and it's getting better quickly, which is

488
00:21:59,200 --> 00:22:01,919
Speaker 1: leading to lower prices. Basically, it's not something that you

489
00:22:01,920 --> 00:22:05,760
Speaker 1: can pinpoint and know that now is the exact perfect

490
00:22:05,760 --> 00:22:07,440
Speaker 1: time to do this. Yeah, well, one of the key

491
00:22:07,440 --> 00:22:10,600
Speaker 1: components that we're discussing here is the tax credit, and

492
00:22:10,840 --> 00:22:13,720
Speaker 1: just recently Congress introduced a new bill that could potentially

493
00:22:13,760 --> 00:22:16,439
Speaker 1: extend that tax credit for another five years. This is

494
00:22:16,480 --> 00:22:18,800
Speaker 1: something that they've already done, and so I just wonder

495
00:22:18,840 --> 00:22:21,120
Speaker 1: how many folks are kind of rushing to get these

496
00:22:21,119 --> 00:22:24,840
Speaker 1: purchased and installed and to get that installation started because

497
00:22:24,880 --> 00:22:26,560
Speaker 1: they want to jump on that thirty percent and who

498
00:22:26,640 --> 00:22:29,000
Speaker 1: knows that tax credit could get extended. So, like Joel said,

499
00:22:29,040 --> 00:22:30,960
Speaker 1: it's tough to know if now is the perfect time.

500
00:22:30,960 --> 00:22:32,760
Speaker 1: But what we do know right now, Joe, is your

501
00:22:32,800 --> 00:22:36,280
Speaker 1: specific situation, and you mentioned financing, and that really could

502
00:22:36,359 --> 00:22:39,480
Speaker 1: make sense for you. And so the average total installation

503
00:22:39,560 --> 00:22:42,720
Speaker 1: cost according to Energy Stage is about eighteen thou dollars,

504
00:22:43,200 --> 00:22:45,960
Speaker 1: So that financed over ten years at three percent, like

505
00:22:46,000 --> 00:22:49,560
Speaker 1: you mentioned, is about dollars in interest that you're going

506
00:22:49,600 --> 00:22:52,280
Speaker 1: to pay. However, if you are able to snag that

507
00:22:52,960 --> 00:22:55,600
Speaker 1: tax credit, you are looking at a savings of fifty

508
00:22:56,160 --> 00:22:58,080
Speaker 1: dollars right there, So you're coming out ahead. If you

509
00:22:58,119 --> 00:23:01,400
Speaker 1: move forward and make that purchase. Now from a number standpoint,

510
00:23:01,840 --> 00:23:04,240
Speaker 1: you look good. You mentioned that twenty year financing option

511
00:23:04,320 --> 00:23:07,160
Speaker 1: at five percent, that's pretty much a no go as

512
00:23:07,200 --> 00:23:09,640
Speaker 1: the total interest for that loan would be around ten

513
00:23:09,680 --> 00:23:12,320
Speaker 1: thousand dollars, which is about double the tax benefit that

514
00:23:12,359 --> 00:23:14,240
Speaker 1: you would receive from that tax credit. And Joe, you

515
00:23:14,240 --> 00:23:16,679
Speaker 1: didn't mention this option, but you definitely don't want to

516
00:23:16,840 --> 00:23:19,840
Speaker 1: lease your solar panels. It's becoming more of a popular option.

517
00:23:19,920 --> 00:23:21,680
Speaker 1: But if you were to do that, you get zero

518
00:23:21,680 --> 00:23:24,800
Speaker 1: tax benefit because you don't own those panels. All right, Joe,

519
00:23:24,800 --> 00:23:26,879
Speaker 1: But the biggest way you're going to be able to

520
00:23:26,960 --> 00:23:31,119
Speaker 1: save on your solar system install. Obviously, that tax credit

521
00:23:31,200 --> 00:23:34,359
Speaker 1: is huge, and making sure that your solar install qualifies

522
00:23:34,359 --> 00:23:37,920
Speaker 1: for that tax credit is huge. But solar installation is

523
00:23:37,960 --> 00:23:40,080
Speaker 1: still kind of like a wild wild West thing going

524
00:23:40,119 --> 00:23:42,240
Speaker 1: on out there, and so there are lots of different

525
00:23:42,240 --> 00:23:46,920
Speaker 1: companies doing these solar installation projects. You need to make

526
00:23:46,920 --> 00:23:50,520
Speaker 1: sure that you get multiple quotes from different local installers

527
00:23:50,520 --> 00:23:53,600
Speaker 1: in your area. And Matt mentioned energy Stage where we

528
00:23:53,640 --> 00:23:56,399
Speaker 1: found that statistic earlier. Well, energy stage dot com is

529
00:23:56,400 --> 00:23:59,240
Speaker 1: a great site to read more and shop local installers

530
00:23:59,280 --> 00:24:02,880
Speaker 1: in your area. Prices very so much. You might get

531
00:24:02,880 --> 00:24:04,720
Speaker 1: a quote for fourteen thousand and then a quote for

532
00:24:05,040 --> 00:24:08,760
Speaker 1: four thousand for essentially the same kind of solar installed.

533
00:24:09,080 --> 00:24:11,080
Speaker 1: Make sure you get these companies thoroughly and you talk

534
00:24:11,160 --> 00:24:14,480
Speaker 1: to folks who have had solar installed by these companies.

535
00:24:14,640 --> 00:24:16,360
Speaker 1: That's going to ensure that you find a company with

536
00:24:16,440 --> 00:24:19,720
Speaker 1: a good reputation who knows what they're doing and offers

537
00:24:19,800 --> 00:24:22,640
Speaker 1: a good value for the solar install that you're looking

538
00:24:22,680 --> 00:24:25,159
Speaker 1: to get done. And Joe, something else to keep in

539
00:24:25,200 --> 00:24:27,360
Speaker 1: mind is the amount of time that it would take

540
00:24:27,359 --> 00:24:30,600
Speaker 1: for you to essentially earn your money back. The average

541
00:24:30,640 --> 00:24:33,560
Speaker 1: payback period is about eight years, which I think for

542
00:24:33,600 --> 00:24:35,960
Speaker 1: a lot of folks that's that's doable, right, But if

543
00:24:36,000 --> 00:24:38,359
Speaker 1: it's closer to fifteen years, it may not be worth

544
00:24:38,400 --> 00:24:39,879
Speaker 1: it for you. You may not even be there in

545
00:24:39,880 --> 00:24:42,520
Speaker 1: that house. But hopefully having those solar panels there on

546
00:24:42,560 --> 00:24:46,000
Speaker 1: the roof would boost your potential resale value. Yeah, man,

547
00:24:46,200 --> 00:24:48,520
Speaker 1: I feel like solar panels actually from everything I've read,

548
00:24:48,680 --> 00:24:51,080
Speaker 1: really do boost the value of a home, as long

549
00:24:51,119 --> 00:24:53,000
Speaker 1: as they're not installed like right in the front lawn,

550
00:24:53,040 --> 00:24:54,919
Speaker 1: you know, like that when the satellite dishtions first came

551
00:24:54,920 --> 00:24:56,960
Speaker 1: out and they're massive, and then you'd see them in

552
00:24:57,080 --> 00:25:01,159
Speaker 1: yards back in the eighties. But these are typically going

553
00:25:01,200 --> 00:25:03,080
Speaker 1: to go on your roof, right, and so typically when

554
00:25:03,080 --> 00:25:05,080
Speaker 1: you're selling your home, you're gonna make your money back

555
00:25:05,280 --> 00:25:08,159
Speaker 1: because a buyer is interested in having solar panels that

556
00:25:08,200 --> 00:25:11,040
Speaker 1: will essentially pay their electricity built too. By the way, Matt,

557
00:25:11,080 --> 00:25:13,520
Speaker 1: you just mentioned the roof. One thing that you need

558
00:25:13,560 --> 00:25:15,720
Speaker 1: to think about is the age of your roof. If

559
00:25:15,720 --> 00:25:17,480
Speaker 1: your roof is in that kind of like ten year

560
00:25:17,520 --> 00:25:20,760
Speaker 1: old range like mineus, it makes a decision a little

561
00:25:20,760 --> 00:25:23,160
Speaker 1: bit harder because basically you have to replace a roof

562
00:25:23,200 --> 00:25:26,320
Speaker 1: that isn't really begging to be replaced. It's still in

563
00:25:26,359 --> 00:25:28,399
Speaker 1: pretty good shape. And it kind of feels like this

564
00:25:28,480 --> 00:25:31,159
Speaker 1: extra expenditure that you have to come up with in

565
00:25:31,240 --> 00:25:33,840
Speaker 1: order to make solar panels worth it. If you have

566
00:25:33,920 --> 00:25:37,280
Speaker 1: either a pretty new roof installed within the last three

567
00:25:37,280 --> 00:25:39,199
Speaker 1: to five years and you want to put solar panels

568
00:25:39,200 --> 00:25:40,840
Speaker 1: on top of that, I think it makes sense. If

569
00:25:40,840 --> 00:25:42,560
Speaker 1: you have a really, really old roof and you have

570
00:25:42,600 --> 00:25:44,600
Speaker 1: to replace it anyway, well I think it makes sense

571
00:25:44,640 --> 00:25:47,160
Speaker 1: to install solar then. But if you're in my place

572
00:25:47,200 --> 00:25:48,600
Speaker 1: and you're kind of in the middle, well, and for me,

573
00:25:48,640 --> 00:25:50,760
Speaker 1: it just puts another check in the corner of I'm

574
00:25:50,800 --> 00:25:52,919
Speaker 1: just not ready to do solar quite yet. Yeah, you're

575
00:25:52,960 --> 00:25:54,440
Speaker 1: kind of in that no man's land as far as

576
00:25:54,440 --> 00:25:56,119
Speaker 1: the roof goes. Do you think that's the biggest thing

577
00:25:56,160 --> 00:25:58,280
Speaker 1: that's kind of kept you from maybe moving forward with

578
00:25:58,320 --> 00:26:00,360
Speaker 1: solar panels? For you guys, because I know you love

579
00:26:00,359 --> 00:26:02,560
Speaker 1: electric stuff. You got that electric car. I figured you

580
00:26:02,600 --> 00:26:05,560
Speaker 1: don't want electric house to match it. I would love

581
00:26:05,560 --> 00:26:08,760
Speaker 1: the whole set. Yeah, that's probably the biggest reason for me.

582
00:26:08,840 --> 00:26:10,760
Speaker 1: What is the age of my roof? Because that extra

583
00:26:10,840 --> 00:26:14,199
Speaker 1: expenditure of six or seven thousand dollars that I'd have

584
00:26:14,240 --> 00:26:15,600
Speaker 1: to throw into the mix, and I'm just I'm just

585
00:26:15,640 --> 00:26:17,840
Speaker 1: not ready to do it. Although I do see solar

586
00:26:17,880 --> 00:26:20,320
Speaker 1: panels in my future at some point for sure. Man, Yeah,

587
00:26:20,359 --> 00:26:22,040
Speaker 1: we are in a very similar boat, right. We don't

588
00:26:22,040 --> 00:26:23,760
Speaker 1: have that brand new roof, but we also don't have

589
00:26:23,800 --> 00:26:25,920
Speaker 1: an old, crumbley roof. One of the biggest things though,

590
00:26:25,960 --> 00:26:28,159
Speaker 1: that's keeping me from kind of moving forward with solar

591
00:26:28,320 --> 00:26:31,199
Speaker 1: is just worrying about being an early adopter. I I

592
00:26:31,240 --> 00:26:33,200
Speaker 1: have a tough time with the idea that I would

593
00:26:33,280 --> 00:26:36,080
Speaker 1: drop a ton of money on these solar panels and

594
00:26:36,080 --> 00:26:39,239
Speaker 1: then have the potential for technological advances to be just

595
00:26:39,400 --> 00:26:41,760
Speaker 1: right around the corner that would either cause prices to

596
00:26:41,880 --> 00:26:46,040
Speaker 1: drop drastically or to where your current solar panels just

597
00:26:46,080 --> 00:26:48,600
Speaker 1: aren't really cutting it anymore. Because I guess what, everyone's

598
00:26:48,640 --> 00:26:50,960
Speaker 1: got the Tesla roof and they look awesome, and there's

599
00:26:50,960 --> 00:26:52,360
Speaker 1: no panels on your roof at all. It just looks

600
00:26:52,359 --> 00:26:53,880
Speaker 1: like you have a regular roof. You know. I gotta

601
00:26:53,840 --> 00:26:56,560
Speaker 1: I gotta tell you, I'm totally down with waiting for

602
00:26:56,600 --> 00:26:59,480
Speaker 1: the Tesla roof to get a lot cheaper and and

603
00:26:59,560 --> 00:27:02,160
Speaker 1: just have solar panels essentially as part of your roof

604
00:27:02,200 --> 00:27:04,280
Speaker 1: as supposed to putting the panels on you exactly, it's

605
00:27:04,320 --> 00:27:06,600
Speaker 1: just built in. Have you seen like the terra cotta style.

606
00:27:07,720 --> 00:27:09,320
Speaker 1: It looks so good, super cool. Yeah, they get the

607
00:27:09,400 --> 00:27:11,320
Speaker 1: terra cotta, they've got the slate. I mean, yeah, I

608
00:27:11,359 --> 00:27:12,960
Speaker 1: feel I have a feeling that that is going to

609
00:27:13,040 --> 00:27:15,160
Speaker 1: be where things are headed. But who knows how long

610
00:27:15,160 --> 00:27:17,919
Speaker 1: it takes until that becomes a cost efficient way of

611
00:27:17,920 --> 00:27:20,800
Speaker 1: putting solar on your roof? Right, yeah, exactly. And if

612
00:27:20,800 --> 00:27:22,680
Speaker 1: you're curious if your house would even be a good

613
00:27:22,680 --> 00:27:26,000
Speaker 1: candidate for solar, check out Google's Project Sunroof, which you

614
00:27:26,040 --> 00:27:29,320
Speaker 1: can obviously find by googling it, but you just punch

615
00:27:29,359 --> 00:27:31,760
Speaker 1: in your address and they will rank and give you

616
00:27:31,800 --> 00:27:34,200
Speaker 1: a score as far as how well your house would

617
00:27:34,240 --> 00:27:36,480
Speaker 1: do when it comes to solar. So Joe. In the end,

618
00:27:36,880 --> 00:27:38,800
Speaker 1: you can crunch all the numbers. You can even figure

619
00:27:38,800 --> 00:27:41,480
Speaker 1: out the return on your investment and compare that r

620
00:27:41,520 --> 00:27:43,840
Speaker 1: o I to what you would actually earn if that

621
00:27:43,880 --> 00:27:46,920
Speaker 1: money was invested in the market. From a number standpoint,

622
00:27:46,920 --> 00:27:48,679
Speaker 1: it seems like the r o I is high and

623
00:27:48,760 --> 00:27:51,080
Speaker 1: that it does make sense. But it's more than just

624
00:27:51,160 --> 00:27:53,639
Speaker 1: the numbers. This is a personal decision. Some of it

625
00:27:53,640 --> 00:27:55,600
Speaker 1: comes down to how you feel you're sort of playing

626
00:27:55,600 --> 00:27:58,440
Speaker 1: your role in reducing energy costs, you're able to contribute

627
00:27:58,440 --> 00:28:00,639
Speaker 1: overall to a cleaner environment. There are a lot of

628
00:28:00,680 --> 00:28:02,719
Speaker 1: benefits that come from solar as long as you are

629
00:28:02,760 --> 00:28:05,600
Speaker 1: not over leveraging and over financing these panels and spending

630
00:28:05,640 --> 00:28:08,240
Speaker 1: money that you don't have. We think that going solar

631
00:28:08,280 --> 00:28:09,960
Speaker 1: could be a great move for you. Yeah, and be

632
00:28:10,080 --> 00:28:11,960
Speaker 1: sure to reach back out to us and let us

633
00:28:12,000 --> 00:28:14,159
Speaker 1: know how it goes and what the numbers look like

634
00:28:14,480 --> 00:28:16,879
Speaker 1: once you've actually done the install. I know, I'm just

635
00:28:16,960 --> 00:28:19,200
Speaker 1: super interested to know how it goes. All right, Matt,

636
00:28:19,200 --> 00:28:20,960
Speaker 1: We've got a couple more questions that we need to tackle,

637
00:28:21,320 --> 00:28:24,760
Speaker 1: including a listener who is currently serving in the Peace

638
00:28:24,800 --> 00:28:26,840
Speaker 1: Corps and has a question for us. We'll get to

639
00:28:26,840 --> 00:28:38,200
Speaker 1: that right after the break. All right, Chiel, we're back

640
00:28:38,200 --> 00:28:40,840
Speaker 1: from the break, and this next question comes from overseas.

641
00:28:41,000 --> 00:28:44,000
Speaker 1: You and me, buddy, we're going global hit play on

642
00:28:44,040 --> 00:28:49,200
Speaker 1: this one, all right, SALAMAO, Hello, Matt and Jewel. My

643
00:28:49,280 --> 00:28:51,320
Speaker 1: name is Mary Claire and I am a Peace Corps

644
00:28:51,400 --> 00:28:56,000
Speaker 1: volunteer currently serving in the Highlands of Madagascar. So when

645
00:28:56,000 --> 00:29:01,160
Speaker 1: Peace Corps volunteers reach cus or completion of service, we

646
00:29:01,200 --> 00:29:06,560
Speaker 1: receive a reintegration stipend of about eight thousand dollars. So

647
00:29:06,680 --> 00:29:09,680
Speaker 1: I guess my question, to put it simply, is, if

648
00:29:09,720 --> 00:29:14,080
Speaker 1: a young person such as myself saves or comes into

649
00:29:14,120 --> 00:29:17,200
Speaker 1: a chunk of cash, what would be some smart and

650
00:29:17,280 --> 00:29:23,920
Speaker 1: responsible options for that money? Thank you so much, man,

651
00:29:23,960 --> 00:29:26,560
Speaker 1: I do love getting these international questions. They provide a

652
00:29:26,640 --> 00:29:28,960
Speaker 1: little bit of a flare to the show, which which

653
00:29:28,960 --> 00:29:30,680
Speaker 1: is kind of fun, a little bit of zest. First

654
00:29:30,680 --> 00:29:34,320
Speaker 1: one from Madagascar, and probably the only thing I truly

655
00:29:34,360 --> 00:29:39,720
Speaker 1: know about Madagascar is that of the world's vanilla beans

656
00:29:39,760 --> 00:29:42,560
Speaker 1: are grown in the country of Madagascar. Well, I think

657
00:29:42,560 --> 00:29:44,480
Speaker 1: the reason we know that is because of the global

658
00:29:44,680 --> 00:29:47,560
Speaker 1: vanilla shortage that we had a couple of years ago. Specifically,

659
00:29:47,840 --> 00:29:49,400
Speaker 1: I think we can till a lot of things to beer,

660
00:29:49,640 --> 00:29:51,400
Speaker 1: but a lot of different breweries here in the States

661
00:29:51,440 --> 00:29:54,200
Speaker 1: had to either raise the prices of beers that normally

662
00:29:54,200 --> 00:29:57,120
Speaker 1: had vanilla in it, or they just stopped brewing those

663
00:29:57,120 --> 00:29:59,680
Speaker 1: specific beers because the supply was so tight, or that

664
00:29:59,760 --> 00:30:02,520
Speaker 1: the prices that were being charged were pretty dang high.

665
00:30:02,680 --> 00:30:05,240
Speaker 1: In response to the market that's that supply and demand

666
00:30:05,240 --> 00:30:08,120
Speaker 1: for you. Yeah, a lot of the supply was wiped

667
00:30:08,160 --> 00:30:11,160
Speaker 1: out due to a typhoon in Madagascar, and yeah, prices

668
00:30:11,160 --> 00:30:13,560
Speaker 1: went sky high. But hopefully the farmers have ever covered

669
00:30:13,560 --> 00:30:16,040
Speaker 1: there in Madagascar. And maybe that's even what Mary Claire

670
00:30:16,080 --> 00:30:18,120
Speaker 1: was doing. Who knows? Yeah, totally, all right, So let's

671
00:30:18,120 --> 00:30:20,720
Speaker 1: get to mary Claire's question. Your question could have different

672
00:30:20,760 --> 00:30:24,160
Speaker 1: answers depending on who's asking it. For someone working in

673
00:30:24,200 --> 00:30:27,920
Speaker 1: a traditional job who lands eight thousand dollars, let's say

674
00:30:27,920 --> 00:30:29,560
Speaker 1: a gift from a parent or a relative, or a

675
00:30:29,560 --> 00:30:32,680
Speaker 1: bonus through work, that eight thousand dollars could be used

676
00:30:32,680 --> 00:30:35,800
Speaker 1: in many different ways. We would suggest paying down high

677
00:30:35,840 --> 00:30:38,520
Speaker 1: interest rate debt first and then prioritize setting up an

678
00:30:38,560 --> 00:30:41,040
Speaker 1: emergency fund, and then we talk about investing in the

679
00:30:41,040 --> 00:30:44,440
Speaker 1: market or yourself. But for you coming back from Peace

680
00:30:44,440 --> 00:30:46,880
Speaker 1: Corps service, I feel like the answer is going to

681
00:30:46,920 --> 00:30:49,000
Speaker 1: be a little bit different, don't you think, Matt. Yeah,

682
00:30:49,000 --> 00:30:50,880
Speaker 1: I'm thinking the Peace Corps set up that completion of

683
00:30:50,960 --> 00:30:54,360
Speaker 1: service fund for a good reason, to help folks transition

684
00:30:54,400 --> 00:30:56,600
Speaker 1: back to life in the States. So with that mind,

685
00:30:56,600 --> 00:30:58,840
Speaker 1: I would be very conservative with that money. And you

686
00:30:58,880 --> 00:31:01,200
Speaker 1: want to make sure that it is liquid, because you

687
00:31:01,280 --> 00:31:03,760
Speaker 1: might need that money as a security deposit or even

688
00:31:03,800 --> 00:31:05,840
Speaker 1: rent for a place that first month's rent. You might

689
00:31:05,880 --> 00:31:08,800
Speaker 1: need that money to buy yourself some affordable transportation, maybe

690
00:31:08,800 --> 00:31:11,160
Speaker 1: a cheap car or even better, a decent bike. Or

691
00:31:11,200 --> 00:31:12,840
Speaker 1: you might even be job hunting when you come back

692
00:31:12,840 --> 00:31:14,520
Speaker 1: to the States, and you might need to live on

693
00:31:14,520 --> 00:31:16,440
Speaker 1: that money for a period of time. So keeping that

694
00:31:16,480 --> 00:31:20,080
Speaker 1: money a liquid easily accessible is going to be key. Really,

695
00:31:20,120 --> 00:31:22,280
Speaker 1: what you want to avoid doing is locking that money away.

696
00:31:22,360 --> 00:31:24,920
Speaker 1: You don't want to invest that money yet, not until

697
00:31:25,000 --> 00:31:27,200
Speaker 1: you've got steady income. You want to keep that liquid,

698
00:31:27,280 --> 00:31:29,040
Speaker 1: and you can do that by keeping it and a

699
00:31:29,160 --> 00:31:32,880
Speaker 1: high interest savings accounts. Allies got one discovered does c

700
00:31:33,120 --> 00:31:34,560
Speaker 1: I T as well? We have an article on the

701
00:31:34,600 --> 00:31:37,720
Speaker 1: site discussing why we're such big fans of C I T. Yeah,

702
00:31:37,720 --> 00:31:39,840
Speaker 1: and I realized that the answer to this question isn't

703
00:31:39,880 --> 00:31:42,120
Speaker 1: really all that sexy you might have had in mind

704
00:31:42,120 --> 00:31:45,120
Speaker 1: when you asked the question. It's something bigger, better, or

705
00:31:45,120 --> 00:31:47,240
Speaker 1: even just more complex, right yeah, or even just a

706
00:31:47,280 --> 00:31:49,760
Speaker 1: little more like stashing it in a high interest right

707
00:31:49,800 --> 00:31:53,280
Speaker 1: SAME's account doesn't feel like a big win or like

708
00:31:53,280 --> 00:31:56,320
Speaker 1: you're doing something major with your funds. But but ultimately,

709
00:31:56,320 --> 00:32:00,440
Speaker 1: when you're transitioning back from your service in Madagascar, it

710
00:32:00,560 --> 00:32:03,240
Speaker 1: is important to have access to those funds for wherever

711
00:32:03,520 --> 00:32:06,240
Speaker 1: life may take you. And I gotta imagine as you

712
00:32:06,240 --> 00:32:08,040
Speaker 1: come back, it could take you in a whole lot

713
00:32:08,080 --> 00:32:11,520
Speaker 1: of different directions, potentially other cities. It could take you

714
00:32:11,560 --> 00:32:14,320
Speaker 1: to a whole new city for a new job. It

715
00:32:14,400 --> 00:32:16,800
Speaker 1: really depends on your situation. And so we just want

716
00:32:16,800 --> 00:32:18,320
Speaker 1: to wish you the best of luck as you do

717
00:32:18,400 --> 00:32:21,080
Speaker 1: come back, and I hope that your time in Madagascar

718
00:32:21,320 --> 00:32:23,560
Speaker 1: has been a wonderful one. All right, mat Let's get

719
00:32:23,560 --> 00:32:26,280
Speaker 1: to our next question. It's an interesting one involving an

720
00:32:26,280 --> 00:32:30,480
Speaker 1: emergency fund and a home equity line of credit. Hey guys,

721
00:32:30,720 --> 00:32:33,960
Speaker 1: it's Andy over here in Utah. I'm very proud to

722
00:32:34,000 --> 00:32:36,600
Speaker 1: say that I'm nearly debt free, and that even includes

723
00:32:36,680 --> 00:32:38,640
Speaker 1: the mortgage on my house, which should be paid off

724
00:32:38,680 --> 00:32:41,320
Speaker 1: within the next five or six months. Although I know

725
00:32:41,440 --> 00:32:44,280
Speaker 1: by the numbers that's not necessarily the smartest thing to do,

726
00:32:44,440 --> 00:32:46,000
Speaker 1: but it was a little bit more important to me

727
00:32:46,120 --> 00:32:48,960
Speaker 1: to not have any debt hanging over my head. With

728
00:32:49,000 --> 00:32:51,320
Speaker 1: all that said, I have a line of credit attached

729
00:32:51,320 --> 00:32:53,600
Speaker 1: to my credit union checking account that I keep in

730
00:32:53,600 --> 00:32:56,400
Speaker 1: a zero balance at the beginning of each month. After

731
00:32:56,520 --> 00:32:58,840
Speaker 1: hearing that you should always try to keep any balances

732
00:32:58,920 --> 00:33:01,400
Speaker 1: under one third of your math maximum, I wound up

733
00:33:01,400 --> 00:33:04,080
Speaker 1: talking to my credit union and getting that limit extended

734
00:33:04,120 --> 00:33:07,160
Speaker 1: out to ten thousand dollars. Would it be beneficial to

735
00:33:07,200 --> 00:33:09,320
Speaker 1: me to continue to try to push the limit of

736
00:33:09,360 --> 00:33:13,440
Speaker 1: that account? I could think above a few semi emergency

737
00:33:13,480 --> 00:33:17,280
Speaker 1: situations when my emergency funds are depleted, and since I'm

738
00:33:17,320 --> 00:33:19,520
Speaker 1: still under fifty nine years old, I don't really have

739
00:33:19,600 --> 00:33:23,040
Speaker 1: access to my wrath account yet. That one third of

740
00:33:23,040 --> 00:33:26,320
Speaker 1: the credit available to me, though, would be quite useful.

741
00:33:27,000 --> 00:33:30,240
Speaker 1: If I imagine things that would cost this situation though

742
00:33:31,200 --> 00:33:33,520
Speaker 1: that came to, you know, make me need to use it,

743
00:33:33,560 --> 00:33:36,800
Speaker 1: I would probably need more than that three thousand dollars

744
00:33:36,840 --> 00:33:38,760
Speaker 1: that you know, the one third of ten thousand would

745
00:33:38,800 --> 00:33:41,440
Speaker 1: give me. Now, if that limit was up to closer

746
00:33:41,480 --> 00:33:44,360
Speaker 1: to like twenty thousand to twenty five thousand, that would

747
00:33:44,400 --> 00:33:46,760
Speaker 1: be a little bit more like around six to seven

748
00:33:46,760 --> 00:33:49,880
Speaker 1: thousand dollars. That would be useful without hurting my credit score.

749
00:33:50,440 --> 00:33:53,880
Speaker 1: What is the downsides to, you know, extending that credit

750
00:33:53,960 --> 00:33:55,880
Speaker 1: limit out? As you know as far as I can

751
00:33:55,880 --> 00:33:58,600
Speaker 1: take it. Thanks for all the information you guys hand out.

752
00:33:58,840 --> 00:34:02,360
Speaker 1: It's very useful. Andy Man, thanks so much for the question.

753
00:34:02,520 --> 00:34:05,160
Speaker 1: And you say you're nearly debt free, including the mortgage.

754
00:34:05,360 --> 00:34:08,560
Speaker 1: That is stinking awesome. We're totally with you and understand

755
00:34:08,560 --> 00:34:10,160
Speaker 1: how you said that. It may not make the best

756
00:34:10,200 --> 00:34:12,799
Speaker 1: sense from a financial standpoint right from the numbers, but

757
00:34:12,880 --> 00:34:15,080
Speaker 1: not having that weight of that debt sort of hanging

758
00:34:15,120 --> 00:34:17,040
Speaker 1: over you, sometimes you need to do what's best for

759
00:34:17,080 --> 00:34:19,320
Speaker 1: you mentally. Yeah, Matt, there's an age old debate in

760
00:34:19,360 --> 00:34:23,160
Speaker 1: the personal finance community about paying off a mortgage and

761
00:34:23,200 --> 00:34:25,759
Speaker 1: whether it's a smart idea or not, especially in an

762
00:34:25,800 --> 00:34:28,439
Speaker 1: uber low interest rate environment like that we're currently in.

763
00:34:28,719 --> 00:34:31,640
Speaker 1: But if it's best for you mentally, do it. I

764
00:34:31,680 --> 00:34:34,360
Speaker 1: totally understand that desire and agree with Andy on that.

765
00:34:34,400 --> 00:34:36,480
Speaker 1: All right. So Andy said that this is a he

766
00:34:36,600 --> 00:34:39,040
Speaker 1: lock through his credit union. Well, it can be a

767
00:34:39,040 --> 00:34:41,560
Speaker 1: good addition to your emergency fund if you own a home,

768
00:34:41,680 --> 00:34:44,839
Speaker 1: especially if you own that home free and clear. Having

769
00:34:44,880 --> 00:34:47,759
Speaker 1: an emergency fund is important to write just cash in

770
00:34:47,800 --> 00:34:49,799
Speaker 1: the bank that you can access. I'm not sure how

771
00:34:49,880 --> 00:34:52,600
Speaker 1: much Andy has in savings, but having more cash on

772
00:34:52,640 --> 00:34:55,719
Speaker 1: hand is the ideal place for that emergency fund, and

773
00:34:55,719 --> 00:34:59,320
Speaker 1: it would also mean you'd have less need for cash

774
00:34:59,360 --> 00:35:01,719
Speaker 1: that you could pull out from a whole equity line

775
00:35:01,719 --> 00:35:04,360
Speaker 1: of credit. And also you mentioned your wrath there towards

776
00:35:04,360 --> 00:35:06,400
Speaker 1: the end of the question. You do have access to

777
00:35:06,440 --> 00:35:08,880
Speaker 1: your wrath. It's not ideal to put money from your

778
00:35:08,920 --> 00:35:12,359
Speaker 1: investments there, especially in a down cycle, but you can

779
00:35:12,480 --> 00:35:15,920
Speaker 1: grab some of those contributions if you need them. Yeah, exactly.

780
00:35:15,920 --> 00:35:18,279
Speaker 1: Like let's say you've been contributing five grand a year

781
00:35:18,320 --> 00:35:20,680
Speaker 1: for the last five years to your roth ira, you've

782
00:35:20,719 --> 00:35:24,279
Speaker 1: got a total of twenty five dollars of contributions in there.

783
00:35:24,480 --> 00:35:27,600
Speaker 1: And it's also in all likelihood if you've invested in

784
00:35:27,920 --> 00:35:30,640
Speaker 1: low cost index funds that's grown, so you might have

785
00:35:30,800 --> 00:35:34,160
Speaker 1: forty five or fifty dollars sitting there inside your roth ira.

786
00:35:34,520 --> 00:35:37,520
Speaker 1: And of course you cannot withdraw those earnings, but what

787
00:35:37,600 --> 00:35:40,960
Speaker 1: you can withdraw if need be is the contributions that

788
00:35:41,000 --> 00:35:43,320
Speaker 1: you've made to the wrath. So basically, if you find

789
00:35:43,320 --> 00:35:46,920
Speaker 1: yourself in a situation where you don't have enough cash

790
00:35:46,920 --> 00:35:49,040
Speaker 1: on hand in the savings account and you need a

791
00:35:49,040 --> 00:35:51,879
Speaker 1: little bit more, will taking a little bit of contribution

792
00:35:51,920 --> 00:35:54,719
Speaker 1: money out of your wrath. IRA is actually not the

793
00:35:54,760 --> 00:35:58,120
Speaker 1: worst place to go in an emergency situation. So, Andy,

794
00:35:58,200 --> 00:36:00,759
Speaker 1: you have no consumered debt and must no mortgage at

795
00:36:00,800 --> 00:36:03,880
Speaker 1: this point, which puts you in a really strong position financially.

796
00:36:04,320 --> 00:36:07,040
Speaker 1: It also sounds like you do have emergency savings which

797
00:36:07,080 --> 00:36:09,720
Speaker 1: you can increase even more after you have that mortgage

798
00:36:09,719 --> 00:36:12,040
Speaker 1: paid off, Right, You're gonna have much more of an ability.

799
00:36:12,080 --> 00:36:13,520
Speaker 1: But then on top of that, you have your rath

800
00:36:13,560 --> 00:36:16,239
Speaker 1: contributions that you can also grab. So again, Andy, you're

801
00:36:16,239 --> 00:36:18,920
Speaker 1: in a strong position financially. But if you wanted to

802
00:36:18,960 --> 00:36:21,400
Speaker 1: increase that line of credit beyond that ten thou dollars

803
00:36:21,440 --> 00:36:24,759
Speaker 1: just for that additional sort of backup parachute. This is

804
00:36:24,800 --> 00:36:27,640
Speaker 1: like the backup to the backup parachute, right, that would

805
00:36:27,640 --> 00:36:30,040
Speaker 1: be perfectly fine. The only downside that I can think

806
00:36:30,120 --> 00:36:32,640
Speaker 1: of is if the interest rate on that line of

807
00:36:32,640 --> 00:36:35,560
Speaker 1: credit isn't great. We're assuming that this is a helock,

808
00:36:35,880 --> 00:36:37,759
Speaker 1: in which case that the interest rate would be pretty low,

809
00:36:37,800 --> 00:36:39,600
Speaker 1: But if this is a personal line of credit or

810
00:36:39,600 --> 00:36:42,120
Speaker 1: personal loan, the interest rate could be a lot higher.

811
00:36:42,200 --> 00:36:44,719
Speaker 1: So just make sure you know the terms of your loan. Yeah, Andy,

812
00:36:44,760 --> 00:36:47,000
Speaker 1: it sounds like you're super cautious. I mean, obviously because

813
00:36:47,239 --> 00:36:49,440
Speaker 1: you're paying off your mortgage with a really low interest

814
00:36:49,520 --> 00:36:52,160
Speaker 1: rate and you're asking this question with a lot of nuance.

815
00:36:52,480 --> 00:36:55,600
Speaker 1: You've got your finances in order, You're in a strong position,

816
00:36:55,640 --> 00:36:57,839
Speaker 1: and there's just not much need to overthink it. All right, man,

817
00:36:57,880 --> 00:36:59,880
Speaker 1: Let's take it back to the beer. This episode, we

818
00:36:59,880 --> 00:37:05,040
Speaker 1: are drinking Nazionale by beer Ra Balladin. Then again, this

819
00:37:05,080 --> 00:37:08,080
Speaker 1: one was brought over to us by our buddy Andrew Man.

820
00:37:08,120 --> 00:37:11,440
Speaker 1: This is a beer that is made in Italy, and

821
00:37:11,480 --> 00:37:13,840
Speaker 1: this beer, Man, I thought it was really really interesting.

822
00:37:14,000 --> 00:37:17,880
Speaker 1: It totally had some international flair going on. It was distinct,

823
00:37:18,040 --> 00:37:21,200
Speaker 1: in my opinion. It had this like really interesting flavor profile.

824
00:37:21,320 --> 00:37:24,440
Speaker 1: It felt very earthy, and I could tell there was

825
00:37:24,480 --> 00:37:26,600
Speaker 1: a little bit of coriander in there, but but not

826
00:37:26,719 --> 00:37:29,520
Speaker 1: too much. It wasn't overwhelming. It just kind of added

827
00:37:29,560 --> 00:37:32,320
Speaker 1: this nice note and typically that's not my favorite flavor,

828
00:37:32,600 --> 00:37:35,560
Speaker 1: but because it was just in a small quantity, it

829
00:37:35,640 --> 00:37:38,479
Speaker 1: was actually really pleasant. I thought. So, yeah, I really

830
00:37:38,560 --> 00:37:41,600
Speaker 1: enjoyed this beer. It was I haven't had many Italian beers,

831
00:37:41,600 --> 00:37:43,399
Speaker 1: but this is the best one I've ever had. I think. Yeah,

832
00:37:43,480 --> 00:37:45,840
Speaker 1: I think the only other Italian beer I've had is Peroni,

833
00:37:46,040 --> 00:37:48,480
Speaker 1: So this definitely takes the cake and definitely tops that.

834
00:37:48,880 --> 00:37:50,759
Speaker 1: And I'm with you regarding that coriander. It almost did

835
00:37:50,840 --> 00:37:52,839
Speaker 1: have that sort of Belgian edge to it right when

836
00:37:52,840 --> 00:37:55,440
Speaker 1: you took that first sip. But what this beer had

837
00:37:55,520 --> 00:37:57,200
Speaker 1: that some of those other beers don't have, though, is

838
00:37:57,280 --> 00:38:00,200
Speaker 1: just this bright, almost lemony, sort of tartness to it.

839
00:38:00,200 --> 00:38:02,279
Speaker 1: It really surprised me. It wasn't at all what I

840
00:38:02,320 --> 00:38:04,760
Speaker 1: was expecting, but it made this beer taste just really

841
00:38:04,840 --> 00:38:07,480
Speaker 1: fresh and alive in my mouth, and I was very

842
00:38:07,520 --> 00:38:09,840
Speaker 1: pleasantly surprised at how much I like this beer. You know,

843
00:38:09,840 --> 00:38:11,680
Speaker 1: you see a little beer like that in a small bottle,

844
00:38:11,719 --> 00:38:13,160
Speaker 1: you kind of expect it just to be sort of

845
00:38:13,200 --> 00:38:15,520
Speaker 1: like a almost like a trinket beer. It's like, Okay,

846
00:38:15,520 --> 00:38:17,840
Speaker 1: this isn't gonna be that great. It just has some

847
00:38:17,880 --> 00:38:19,799
Speaker 1: Italian written on it. Give it to your friend who's

848
00:38:19,840 --> 00:38:21,719
Speaker 1: a beer lover. But this is the kind of beer

849
00:38:21,760 --> 00:38:23,719
Speaker 1: that I could have pretty much every week. Yeah, I

850
00:38:23,719 --> 00:38:27,399
Speaker 1: feel like this beer definitely went beyond just a cute label.

851
00:38:27,440 --> 00:38:29,600
Speaker 1: It was. It was really tasty. So big thanks to

852
00:38:29,640 --> 00:38:33,000
Speaker 1: our friend Andrew for bringing this one. Back from his

853
00:38:33,120 --> 00:38:35,759
Speaker 1: awesome trip. Next time, when don't you take us with you? Yeah,

854
00:38:35,800 --> 00:38:37,960
Speaker 1: we'll hit up a bunch of Italian brewers. I'm done

855
00:38:37,960 --> 00:38:39,520
Speaker 1: with that. Cool, Well, Joel, I think that's gonna be

856
00:38:39,560 --> 00:38:41,319
Speaker 1: it for this episode. You can find our show notes

857
00:38:41,320 --> 00:38:43,839
Speaker 1: on our website at how to money dot com. Yeah,

858
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Speaker 1: and if you've got a question for Matt Knight that

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Speaker 1: you would like us to consider for an upcoming ask

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00:38:48,960 --> 00:38:51,440
Speaker 1: htm episode, well, all you gotta do is go to

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00:38:51,560 --> 00:38:54,239
Speaker 1: how to money dot com slash ask. You will see

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00:38:54,239 --> 00:38:58,160
Speaker 1: the incredibly simple instructions for submitting a voice question to us,

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00:38:58,400 --> 00:39:01,279
Speaker 1: and we would love to consider your question for an

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Speaker 1: upcoming episode. Alright, buddy, until next time, Yeah, best friends out,

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Speaker 1: Best Friends Out,