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

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Speaker 1: and today we're answering your listener questions.

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Speaker 2: Of course, it's Monday, and listeners know we've got listener

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Speaker 2: questions to get to. We've got a whole late host

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Speaker 2: is like, yeah, I guess a host of it's like individuals,

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Speaker 2: but like a slate. Feels like options. Yeah, and we've

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Speaker 2: got some great options, some great questions to answer today.

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Speaker 1: I was just thinking, I want to say I have

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Speaker 1: a case of the Mondays and mean it is a

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Speaker 1: good thing.

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Speaker 2: Makes me think of Monday Night brewing their mixed pack

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Speaker 2: of one of their beers. They called it a case

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Speaker 2: of the Mondays because their Monday Night, and it was.

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Speaker 2: And yet it's a beautiful thing. It's a fantastic thing.

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Speaker 2: Let's put a positive spin on we can change the

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Speaker 2: narrative on that. Some of the topics we're getting to today.

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Speaker 2: Listener is asking about an important investing deadline.

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Speaker 1: We'll get to that.

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Speaker 2: Another listener is wondering what might be the best way

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Speaker 2: to build up some generational wealth, and another fascinating one,

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Speaker 2: what financial advice would you give to your younger selves?

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Speaker 2: For instance, if we had to start all over again. Essentially,

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Speaker 2: they're asking about financial regrets. So I'm looking forward to

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Speaker 2: getting up to that one and more during today's episode

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Speaker 2: same a one. Just quick note on the generational wealth one.

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Speaker 2: You know what I love about that question, the optimism

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Speaker 2: behind it, like in an age of doumerism and people

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Speaker 2: saying like the end is near, the belief that you

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Speaker 2: can and should try to attain generational wealth.

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Speaker 1: Says no way. I think that there's plenty of good

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Speaker 1: things coming down the pike. So I'm not wholeheartedly behind that.

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Speaker 2: Sure, but is it misplaced optimism? Maybe we'll get to

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Speaker 2: that as well.

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Speaker 1: See, I don't think it's misplaced optimism. We'll talk about that,

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Speaker 1: but maybe it's still not the right path. But all right, Well,

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Speaker 1: before we get to all those questions, Matt, let's talk

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Speaker 1: about how much to spend on a vacation. I saw

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Speaker 1: this article on the Art of Manliness, and interestingly enough,

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Speaker 1: the Art of Manliness. It's a website and a podcast

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Speaker 1: that is pretty thoughtful, and I think like even a

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Speaker 1: lot of women could get behind a lot of the

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Speaker 1: content on there.

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Speaker 2: Just about living intentionally as opposed to being asleep at

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Speaker 2: the wheel in all areas of life. Yes, I feel

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Speaker 2: like we do that when it comes to money specifically.

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Speaker 2: But Brett McKay, that's in that the guy.

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Speaker 1: Yeah, he does a great job. He's his wife, I think,

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Speaker 1: do it together. And I think a lot of that.

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Speaker 1: I think probably they started off as kind of this

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Speaker 1: manly thing and about growing like cool stashes and dressing nicely,

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Speaker 1: and then like as he grew as a person, his

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Speaker 1: what he the kind of topics that he covered grew

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Speaker 1: and changed and now it's really I think, appealing to

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Speaker 1: all sorts of folks. But he just had an article

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Speaker 1: about how much you should spend on a vacation. What

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Speaker 1: is the right rule of thumb? Matt? How much do

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Speaker 1: you think people should be spending or thinking about spending

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Speaker 1: on upcoming travels? And I think this is probably the

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Speaker 1: time of year people are starting to plan out summer travels.

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Speaker 1: What should I don't know, do you have any thoughts

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Speaker 1: for them?

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Speaker 2: Yeah, okay, you give me a heads up, So I

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Speaker 2: knew to go do some digging in my own. I'm

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Speaker 2: a nerd, and so I have the ability to pull

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Speaker 2: up previous years of expenses and what I found. You

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Speaker 2: interested to figure out what I uncovered? Always when they

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Speaker 2: were literally my personal finance data. Earlier today, Matt was

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Speaker 2: telling me how much he spent on car repairs in

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Speaker 2: like twenty seventeen through twenty twenty three, and we're talking

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Speaker 2: about We're like, oh my gosh, why does it cost

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Speaker 2: so much to what did you just have fixed, like

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Speaker 2: said solon od or something on your odyssey? And I

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Speaker 2: was like, interesting, head gasket. Yeah, And so I was like, oh,

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Speaker 2: you know what, actually did the same thing two years ago, YadA, YadA.

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Speaker 2: But I think that was fresh on my mind, which

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Speaker 2: is what made me want to go digging through our

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Speaker 2: vacation spending over the past decade. Plug. I mean, I've

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Speaker 2: got I only looked at the past decade, and I

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Speaker 2: found that you could have gone further, I could have

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Speaker 2: gone further, but I found that we spent like, on average,

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Speaker 2: typically about two percent of our income on vacation. And

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Speaker 2: so yeah, when the general rule of general personal finance

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Speaker 2: advice of spending five to ten percent, personally, I'm like,

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Speaker 2: I see that, and I think, oh, that seems kind

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Speaker 2: of high. But then when I went and dug three,

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Speaker 2: I'm like, well, is it high compared to what I

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Speaker 2: have spent? And it truly is. I mean there's some

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Speaker 2: years where we literally only spent one percent of our

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Speaker 2: overall income. And you want to know what year that

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Speaker 2: was specifically, Well, you were involved. I don't know if

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Speaker 2: we've ever talked about this. We had bartered with some

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Speaker 2: clients of ours and they gave us for a discount.

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Speaker 2: They gave us their Jeckyll Island house. It had a

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Speaker 2: bunch of rooms, and so what we did, well, I

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Speaker 2: created a Google sheet.

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Speaker 1: You've done that multiple times.

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Speaker 2: We did that twice, we did we did that two

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Speaker 2: years in a row. But one of those really affordable

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Speaker 2: years was was that year a sheet? But it allowed

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Speaker 2: all of our friends to show up. They basically were

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Speaker 2: able to claim a room and I charged them twenty

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Speaker 2: bucks at night because I was basic, you know, like

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Speaker 2: we were taking a financial hit by accepting that house.

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Speaker 2: But it's like, okay, how can the clients win? How

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Speaker 2: can I win? And how can our friends win? I

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Speaker 2: mean we like, we had folks who were staying with

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Speaker 2: us at the beach for like one hundred bucks, which

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Speaker 2: is like, which is unheard of. So all that to

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Speaker 2: say five to seven percent, I think that might be

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Speaker 2: a touch high.

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Speaker 1: Personally, I think not everyone can borter like you can

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Speaker 1: or could, I guess, but I think I think one

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Speaker 1: of the things that happens when you reduce the budget

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Speaker 1: that you're willing to spend on vacations is you have

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Speaker 1: to get more creative. And that creativity I think can

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Speaker 1: lead to some really interesting trips and excursions.

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Speaker 2: So especially when you're younger, like that too. It was

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Speaker 2: so stick. It's not like that was a sacrifice. Now,

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Speaker 2: that was a ton of fun. We had folks dropping

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Speaker 2: in for a couple days. You and Emily, I think

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Speaker 2: y'all are there literally, I think the whole time y'll

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Speaker 2: claim the other room that I think the king size

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Speaker 2: bad as well. We played a lot of spike ball,

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Speaker 2: a lot of board games, spike ball and craft beer.

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Speaker 2: What's better than that? Man?

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Speaker 1: So yeah, I think in this article he has likes

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Speaker 1: five to ten percent as a good rule of thumb.

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Speaker 1: I do think don't cheap out right and don't avoid

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Speaker 1: spending money on vacations because I think they can create

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Speaker 1: amazing memories. But also don't think that just by spending

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Speaker 1: more money you're going to create better memories. I think

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Speaker 1: sometimes we associate that or we think if I shell

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Speaker 1: out an extra four thousand dollars for the vastly more

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Speaker 1: expensive beach house, then the memories are going to be superior.

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Speaker 1: And I just I don't think that's true in the

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Speaker 1: same way, although take your vacation. Yeah, spend money on vacations,

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Speaker 1: enjoy it, but just don't overdo it.

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Speaker 2: Totally agree. Yeah, And here's the thing is, I'm totally

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Speaker 2: fine with somebody spending even more money than that if

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Speaker 2: that is their craft beer equivalent. Right, Like, if there's

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Speaker 2: somebody who's saying, well, dudes, I love to travel. That

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Speaker 2: is my thing. Like your sister her and her assment

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Speaker 2: they travel all the time. In my mind, I don't

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Speaker 2: know her super super well, but it seems like that

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Speaker 2: that is her craft bureau equivalent. They're like super minimalist,

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Speaker 2: frugal people. They don't spend It doesn't seem like they

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Speaker 2: spend a lot of money on any other things.

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Speaker 1: So they'll drop money on a flight or a hotel

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Speaker 1: at the drop all the time.

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Speaker 2: Yeah, Like, anytime I see them all right, where you

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Speaker 2: hit next, because that's always the topic of interests, whatever

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Speaker 2: country and whatever awesome trip that they're taking. I'm totally

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Speaker 2: fine with that. You can't do that on everything. But

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Speaker 2: like you said, if you're more of a minimalist in

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Speaker 2: other areas and you want to maximize them, I'm not

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Speaker 2: that you're spending towards travel. I'm totally for that. They

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Speaker 2: also you can also change it because we again we

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Speaker 2: didn't spend much back in the day, but last year

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Speaker 2: so we ramped it. I said, on average it was

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Speaker 2: like around two percent, right, but last year it's go

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Speaker 2: closer to eight percent.

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Speaker 1: Yeah, because it depends on the scholar trip.

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Speaker 2: With you all, we did like a whole week at

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Speaker 2: Disney and Universal. It's that's that's certainly a more expensive year.

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Speaker 1: And by the way, talking about my sister, they live

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Speaker 1: in a one bedroom Midtown apartment. It's not cheap, but

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Speaker 1: I guess it's small, right, and they have one car

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Speaker 1: and it's like a twelve year old Hondas.

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Speaker 2: So that bounces around to get the rent discounts. That's

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Speaker 2: right as well.

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Speaker 1: So so like if you're doing all those other things,

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Speaker 1: then guess what you can afford to turn up the

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Speaker 1: dial a little bit on your vacation spending. Yeah, I

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Speaker 1: love it all right, Now let's mention the beer we're

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Speaker 1: having on this episode. This one is called bone Shaker,

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Speaker 1: which sounds like the name of a.

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Speaker 2: Monster truck shakers.

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Speaker 1: By Moat Mountain. And this one was donated to the

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Speaker 1: show by lister Todd. Todd, thank you.

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Speaker 2: It's got a it's got a biking motif, so bone

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Speaker 2: shaker in the sense of mountain biking. And I guess

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Speaker 2: not having shocks, but not in the monster truck variety, sadly,

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Speaker 2: because I like monster trucks. Well, I like bikes better

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Speaker 2: than They're both great.

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Speaker 1: All right. By the way, let's we're gonna take a

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Speaker 1: lot of lisser questions, Matt, so let's to those. Let's

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Speaker 1: do it. And if you're out there listening and you're like,

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Speaker 1: I have a money question and I would love those

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Speaker 1: two gentle sweet idiots to take it on the show,

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Speaker 1: please do submit it to us. We'd love to hear it.

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Speaker 1: You go to how tomoney dot com slash ask several

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Speaker 1: instructions there basically recording a voice member sending it to

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Speaker 1: us via email. Now let's get to the first one.

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Speaker 1: This one comes from listener Chapman, and he's wondering if

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Speaker 1: he can take an investing route that avoids the stock market.

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Speaker 3: Hey man, Joel, thanks for taking my question. First off,

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Speaker 3: I'm wondering your advice on long term retirement goals. If

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Speaker 3: I were to plan on owning several investment properties that

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Speaker 3: will hopefully be paid off when I'm ready for a

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Speaker 3: soft retirement in my forties. So, with that being said,

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Speaker 3: how should I be prioritizing investments to retirement accounts in

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Speaker 3: the stock market if I really want to do real

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Speaker 3: estate right now? I have a four to one K

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Speaker 3: and WROTH four one K option at work. I have

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Speaker 3: thirty five hundred in it, and I started it as

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Speaker 3: a Wroth option because I assumed that was better. But

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Speaker 3: which one of those would be best to go with

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Speaker 3: if I'm going to invest in real estate? And also,

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Speaker 3: how should I choose how much to put in a

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Speaker 3: retirement and how much to go with real estate considering

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Speaker 3: I need a lot of money up front now to

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Speaker 3: buy my second property because we already own our first house. Secondly,

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Speaker 3: we just love any of your advice on kids and

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Speaker 3: specifically newborns. We're about to have our first child in

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Speaker 3: two weeks, so I would love any advice on that

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Speaker 3: and maybe your dad hacks or anything like that. Thanks.

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Speaker 3: I'm a big fan and I appreciate you guys's level

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Speaker 3: headed advice on the show.

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Speaker 2: So thanks level headed financial advice.

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Speaker 1: That should be the subtitle of our shared toule.

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Speaker 2: So Chapman is asking, let's kick it off with the

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Speaker 2: dad hacks because he's got a baby on the way. Congrats,

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Speaker 2: you probably already have that baby at this point. But

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Speaker 2: what we would say, and I think Joe you'd be

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Speaker 2: in agreement here, but prioritize the time that you're spending together.

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Speaker 2: I think early on this is going to be a

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Speaker 2: lot easier to do than when you are, like when

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Speaker 2: the kids are all and you're maybe a little busier,

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Speaker 2: or even when you have like multiple kids. So that's

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Speaker 2: where my mind immediately goes.

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Speaker 1: Because we've got four.

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Speaker 2: Kids, Joel, you've got three, and it becomes harder to

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Speaker 2: do spending like one on one time with the kids

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Speaker 2: where you don't have the other ones. Clamoring for your attention,

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Speaker 2: Kate and I we've instituted Mommy Daddy dates where we

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Speaker 2: alternate weeks and we'll take one of the kids. It's

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Speaker 2: an uninterrupted period of time where we get to spend

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Speaker 2: some quality time together. But Chapman, for you that, again,

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Speaker 2: you've only got one kid to keep that in mind.

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Speaker 2: I guess when you have when you have multiple kids,

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Speaker 2: but what has changed. One dynamic that certainly has changed

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Speaker 2: is the relationship between you and your wife or your

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Speaker 2: significant other, your partner. And so I, like I guess

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Speaker 2: this is somewhat unconventional dad hack, you know, new baby advice,

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Speaker 2: but make sure that you are prioritizing the amount of

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Speaker 2: time the quality of time that you're spending with your

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Speaker 2: partner as well, because I think that that is like

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Speaker 2: that is foundational, like that is the bed that should

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Speaker 2: be the bedrock of your family. And if that suffers. Yes,

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Speaker 2: you might have cute baby that you're excited to talk

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Speaker 2: about NonStop, and that's totally natural. I get that, another tiny,

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Speaker 2: cute little thing. But if you aren't leaving a room

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Speaker 2: for the two of y'all and for y'all to remember

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Speaker 2: what it is that brought y'all together in the first place,

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Speaker 2: then I think, over time, the high that you currently

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Speaker 2: have with that new baby that wears off and you

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Speaker 2: get more into the day to day drudgery of it start.

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Speaker 1: To drift apart if you're not prioritizing each other at

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Speaker 1: the same time. And you're right, Matt, the baby who

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Speaker 1: in a bundle of joy can turn into this like cleaver,

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Speaker 1: that's separating your nonmost king not like that. I don't

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Speaker 1: even like that, but like it really can cause some

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Speaker 1: drift if you're not being intentional on that front. And

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Speaker 1: I think maybe some of the habits Matt even like

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Speaker 1: you know, you're not really typically reading to a newborn,

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Speaker 1: but like you can start if you want, I guess,

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Speaker 1: but that kind of like prioritizing that schedule and that

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Speaker 1: rhythm hopefully that can like stick around for years to come.

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Speaker 1: And I know that like yeah, the bedtime, the breakfast,

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Speaker 1: the dinner routines for us, or just I hate to

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Speaker 1: miss it, like if I'm out of town randomly for

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Speaker 1: a couple of days, like I'm so stoked to get

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Speaker 1: back for it. So just making sure those rhythms are ingrained,

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Speaker 1: I think is going to be incredibly helpful. It's going

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Speaker 1: to create kind of some of those important family bonds

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Speaker 1: that are going to deepen those relationships and make them

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Speaker 1: even more meaningful everything totally. Let's talk about Chapman's question,

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Speaker 1: specifically his money question. He mentioned retiring in his forties,

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Speaker 1: and I think you called it a soft retirement. I

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Speaker 1: think that's that's an amazing goal, by the way, to

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Speaker 1: want to retire that early. And I'm curious to know

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Speaker 1: what he means by a soft retirement. I don't know exactly,

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Speaker 1: but my guess is that what he means is that

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Speaker 1: he wants a more flexible work and work optional sort

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Speaker 1: of approach, right, kind of peace out money sort of

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Speaker 1: thing that we've talked about in the past. Having the

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Speaker 1: ability to do whatever you want even if you decide

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Speaker 1: that you're going to keep working or just dial it

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Speaker 1: back a little bit on that front. And a coast fire,

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Speaker 1: I guess, is what folks in the FI community refer

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Speaker 1: to it as. And I think that's a great goal

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Speaker 1: to have. I mean front loading the sacrifice that you

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Speaker 1: give yourself more options down the road even if you

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Speaker 1: do decide to keep working in some capacity, which let's

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Speaker 1: be honest, Matt, most people do. Going from working forty

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Speaker 1: hours a week to hitting your fine number quote unquote

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Speaker 1: fine number or whatever and then ditching work completely actually

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Speaker 1: ends up leading to a lot of unhappiness for people

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Speaker 1: in that crowd. So it's just but having the ability

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Speaker 1: and having the options can be such a psychological relief.

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Speaker 1: I understand why people go that route. I mean, so

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Speaker 1: I think this is something you can create for yourself

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Speaker 1: by starting early and by being incredibly intentional. I think

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Speaker 1: I think if Chapman takes the right approach, he can

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Speaker 1: wind up there totally.

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Speaker 2: Yeah, and you mentioned front loading the sacrifice, and we

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Speaker 2: were just talking about vacations. But I think that's just

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Speaker 2: a great small example of ways that you might be

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Speaker 2: able to be a little more flexible now where you're

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Speaker 2: deferring some of that living large so that you do

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Speaker 2: have some of those options.

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Speaker 1: Yeah, you're like further down the road, if you want

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Speaker 1: to retire in your forties, it's going to mean dialing

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Speaker 1: back on a bunch of different things, probably your car,

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Speaker 1: your home, your vacations, all that kind of stuff. Because

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Speaker 1: if it's that high of a priority, like you've got

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Speaker 1: a limited timeline to really get there, and you've got

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Speaker 1: to kind of put everything you got behind it, that's right.

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Speaker 2: Yeah, and having some paid off rent properties that could

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Speaker 2: be a good path forward. So how should you be

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Speaker 2: looking to balance your interest in real estate as well

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Speaker 2: as your tax advantage retirement accounts and so much depends

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Speaker 2: on your risk tolerance. So Joe, literally we were joking.

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Speaker 2: After last Wednesday's episode, we talked about real estate maximalist

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Speaker 2: Alan Corey and this is you and I like after

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Speaker 2: the recording, but we were saying how he might not

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Speaker 2: have any money in the actual stock market.

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Speaker 1: Yeah, he might.

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Speaker 2: We didn't ask him, but yeah, but like it kind

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Speaker 2: of makes sense because he has gone so hard in

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Speaker 2: that direction. He is such an expert within that realm,

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Speaker 2: and personally we don't feel comfortable with that, even though

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Speaker 2: we are investors of real estate. But Alan has owned

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Speaker 2: a skill and I don't think I would fault him

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Speaker 2: if he didn't have anything within a traditional retirement account.

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Speaker 2: But is that the route that Chapman should take and

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Speaker 2: most people in general or everybody else? Yeah, I think

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Speaker 2: it depends on well, it depends on your market. It

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Speaker 2: depends on how much time you're willing to dedicate towards

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Speaker 2: investing in real estate. You need to know what the

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Speaker 2: numbers look like. Financing is a part of it, and

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Speaker 2: it's not purely passive either, right, Like, that's the biggest

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Speaker 2: difference between investing in real estate Chapman is essentially you're

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Speaker 2: signing yourself up. Maybe you're saying soft retirement because you

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Speaker 2: want to have the time on hand to be able

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Speaker 2: to manage these properties yourself. Well, good, because that's what's

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Speaker 2: going to be necessary if you are going to be

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Speaker 2: taking that on yourself, if you want to pose to

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Speaker 2: the market, investing in the stock market, which is purely passive.

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Speaker 1: And if you want to better cash flow, better return

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Speaker 1: from those properties, it's going to mean self management. But

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Speaker 1: that takes time, right, And if you're going to be

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Speaker 1: the super too, right, if you're going to be over

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Speaker 1: there replacing the toilets, doing the fixes, and you and

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Speaker 1: I have talked about this before. Some people overblow that,

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Speaker 1: oh the three am toilet bursting phone call. I've never

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Speaker 1: had that one, but that's always what gets described from

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Speaker 1: people who don't want to be landlords. And it's time

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Speaker 1: if you don't want to be a landlord, but Chapman

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Speaker 1: wants to be. And I think you know, some of

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Speaker 1: that stuff's over. Some of that stuff's just bluster, it's

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Speaker 1: not true, but it's at least we're thinking about what

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Speaker 1: that looks like in your life and the amount of

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Speaker 1: time you're going to need to dedicate and what the

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Speaker 1: ROI is going to be on that totally. I think

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Speaker 1: it depends too on your personal preference and what it

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Speaker 1: is that you're looking for out of your overall portfolio,

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Speaker 1: because like, this is where I think you and I

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Speaker 1: differ slightly in some of the like the finer points

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Speaker 1: or whatever. But about five years ago, I'm looking at

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Speaker 1: my overall net worth and my asset allocation essentially of

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Speaker 1: my investments, and I'm like, man, I've got way more

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Speaker 1: money in real estate than I personally felt comfortable with.

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Speaker 1: And so for me, what that look like. And this

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Speaker 1: is back when rates were stupid low, But I went

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Speaker 1: ahead and refined pulled equity out because I wanted to

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Speaker 1: have more of my overall percentage of my portfolio invested

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Speaker 1: in the market. And so for me, it was almost

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Speaker 1: like a right sizing because I was like, oh, I

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Speaker 1: feel like I'm too.

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Speaker 2: Heavy within real estate. And so essentially that was personal preference.

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Speaker 2: And so that's something else to consider Chapman, is what

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Speaker 2: do you want your net worth to be made of?

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Speaker 1: Well, yeah, I think this leads to the next thing

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Speaker 1: we need to talk about perfectly, because for the sake

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Speaker 1: of conservatism and diversification, I think it's still a good

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Speaker 1: idea to do someone both right, So you know, for

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Speaker 1: maybe for this especially early on. Yeah, yeah, yeah, for

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Speaker 1: the extreme person who who learns a scale and does

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Speaker 1: it incredibly well, like Alan who we talk to, then

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Speaker 1: then I think it's okay maybe to go all in

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Speaker 1: on one thing. If you have an outsized advantage, take

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Speaker 1: advantage of that outside advantage. So if you reach this point, Chapman,

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Speaker 1: in your real estate investing journey, where you've got this

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Speaker 1: amazing system, you feel like, you know, traditional retirement account

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Speaker 1: investing and contributing to those is holding you back from

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Speaker 1: scaling something that you've become an expert at that could

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Speaker 1: tip the scales, I think eventually to reducing your to

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Speaker 1: dialing back those retirement contributions, But for the time being,

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Speaker 1: I would I think we would both say, Matt, do both.

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Speaker 1: It's going to take more time then to buy the

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Speaker 1: rental property you want. It's going to take more time

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Speaker 1: to save up that down payment, but it's worth the

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Speaker 1: delay because you're mitigating your risk and you are creating

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Speaker 1: some of that diversification. So which account you asked scimvially,

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Speaker 1: which account you should you should start investing in? We

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Speaker 1: would say, make sure take advantage of whatever match you're offered.

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Speaker 1: In a four to one K and then after that

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Speaker 1: probably the roth IRA. That's it's just such a flexible account.

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Speaker 1: It's such a good.

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Speaker 2: One and options.

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Speaker 1: Yeah, and you know, I think if you're getting the

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Speaker 1: match where you're maxing out the WRATH, then all the

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Speaker 1: money that's left after that, I feel comfortable stocking away,

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Speaker 1: socking those dollars away into your your rental down payment fund.

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Speaker 2: Yeah, and going back to just this idea of diversification,

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Speaker 2: I think what's important to point out here is that Chapman,

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Speaker 2: like you think right now that you want to go

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Speaker 2: all in on real estate, but generally speaking, you've just

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Speaker 2: gotten your toes wet, and it's tough to know what

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Speaker 2: life is going to look like in a couple of years.

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Speaker 2: You're about to have a baby. What does that mean

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Speaker 2: for your partner? What does that mean for your career,

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Speaker 2: your job, The amount of time that's going to be

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Speaker 2: required of you when it comes could be next match,

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Speaker 2: you know. And well even even still right now, he's

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Speaker 2: thinking through, Okay, it's pretty easy for me to run

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Speaker 2: down there, change out the locks, schedule cleaners, whatever is

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Speaker 2: required of him at this point when it comes to

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Speaker 2: managing that one property that he has. But beyond that,

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Speaker 2: it's like five years from now with a five year

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Speaker 2: old in tow that could look a whole lot different.

433
00:18:51,160 --> 00:18:53,239
Speaker 2: And so what I'm pointing out here is that, like

434
00:18:53,280 --> 00:18:56,720
Speaker 2: you said, you'll continuing to invest in the market, obviously

435
00:18:56,760 --> 00:19:00,359
Speaker 2: taking advantage of that match, but also continuing forward with

436
00:19:01,160 --> 00:19:03,760
Speaker 2: real estate. It gives you the option a few years

437
00:19:03,760 --> 00:19:06,280
Speaker 2: from now to then decide, Okay, what do I now

438
00:19:06,359 --> 00:19:07,560
Speaker 2: want to continue.

439
00:19:07,480 --> 00:19:09,960
Speaker 1: To go after hard because.

440
00:19:09,800 --> 00:19:12,240
Speaker 2: There might be another, like a completely another opportunity at work,

441
00:19:12,320 --> 00:19:14,159
Speaker 2: or maybe you want to start your own side hustle,

442
00:19:14,160 --> 00:19:17,200
Speaker 2: like a you're going to go down the path of entrepreneurship.

443
00:19:17,240 --> 00:19:20,200
Speaker 2: That could be something that you're excited about. And then

444
00:19:20,359 --> 00:19:22,560
Speaker 2: it would be a little more difficult to say, perhaps

445
00:19:22,560 --> 00:19:25,520
Speaker 2: make the numbers work with real estate if you now

446
00:19:25,600 --> 00:19:29,119
Speaker 2: have to rely on management because you know you're paying

447
00:19:29,320 --> 00:19:31,639
Speaker 2: you're ten to fifteen percent, because you don't have a

448
00:19:31,640 --> 00:19:33,320
Speaker 2: network as you're doing it yourself. You don't have a

449
00:19:33,320 --> 00:19:36,600
Speaker 2: movie high a manager who's cutting you a discount rate

450
00:19:36,600 --> 00:19:37,600
Speaker 2: at like seven eight percent.

451
00:19:38,200 --> 00:19:40,080
Speaker 1: If you do that, Chapman, if you've got multiple properties,

452
00:19:40,119 --> 00:19:42,560
Speaker 1: that's all okay, I think let me just say one

453
00:19:42,800 --> 00:19:44,879
Speaker 1: one thing or a couple things maybe on the super

454
00:19:44,880 --> 00:19:47,080
Speaker 1: positive side of real estate. I think one reason to

455
00:19:47,160 --> 00:19:49,040
Speaker 1: invest in real estate, especially if you have the goal

456
00:19:49,080 --> 00:19:52,520
Speaker 1: of early retirement, is because like having that mortgage, the

457
00:19:52,560 --> 00:19:55,640
Speaker 1: mortgage stays the same while rents continue to increase over time.

458
00:19:55,760 --> 00:19:59,640
Speaker 1: That is a generality, but it is over over time true,

459
00:19:59,680 --> 00:20:02,480
Speaker 1: because rents do moderate sometimes. We're seeing that in Austin

460
00:20:02,560 --> 00:20:05,440
Speaker 1: right now. We're seeing that actually in other places across

461
00:20:05,440 --> 00:20:07,399
Speaker 1: the United States too. But that's going to put you

462
00:20:07,440 --> 00:20:10,399
Speaker 1: in the position over the years that have greater cash

463
00:20:10,400 --> 00:20:12,960
Speaker 1: flow the further you move along that ownership timeline. And

464
00:20:13,000 --> 00:20:15,920
Speaker 1: so just like Alan mentioned last week, Matt, you aren't

465
00:20:15,960 --> 00:20:18,600
Speaker 1: tapping into the capital like you do with an investment account, right,

466
00:20:18,640 --> 00:20:22,119
Speaker 1: so collecting rents doesn't have the same psychological impact that

467
00:20:22,200 --> 00:20:24,920
Speaker 1: taking money out of a retirement account has, so and

468
00:20:25,240 --> 00:20:27,919
Speaker 1: it doesn't have the same tax consequences either, if you're

469
00:20:27,960 --> 00:20:31,600
Speaker 1: pulling money out of a retirement account early. So I

470
00:20:31,600 --> 00:20:33,800
Speaker 1: would just say remember if early retirement's on your radar,

471
00:20:34,080 --> 00:20:37,400
Speaker 1: and you're investing, by the way, for even more decades,

472
00:20:37,720 --> 00:20:39,800
Speaker 1: and that real estate it can provide cash flow in

473
00:20:39,840 --> 00:20:42,760
Speaker 1: those early retirement years, and the money you're putting into

474
00:20:42,760 --> 00:20:45,520
Speaker 1: traditional accounts can help fund those later decades. You want

475
00:20:45,520 --> 00:20:48,119
Speaker 1: to make sure both. One last thing I'll say is

476
00:20:48,280 --> 00:20:50,560
Speaker 1: if you're planning on doing some house hacking, I think

477
00:20:50,680 --> 00:20:54,600
Speaker 1: that can move real estate investing up the ladder even

478
00:20:54,640 --> 00:20:57,359
Speaker 1: above maybe some of those traditional retirement accounts, because not

479
00:20:57,440 --> 00:20:59,720
Speaker 1: only are you investing in real estate, you're making a

480
00:20:59,760 --> 00:21:02,200
Speaker 1: person sacrifice to increase the gains you can see in

481
00:21:02,920 --> 00:21:05,520
Speaker 1: those real estate endeavors. And we have a whole episode

482
00:21:05,560 --> 00:21:07,280
Speaker 1: that we did with Craig Kurlop on house hacking that

483
00:21:07,320 --> 00:21:08,400
Speaker 1: we'll link to in the show notes.

484
00:21:08,520 --> 00:21:10,560
Speaker 2: Yes, right, we'll include that up at how to money

485
00:21:10,600 --> 00:21:13,040
Speaker 2: dot com. But Joel, we've got more to get to.

486
00:21:13,040 --> 00:21:13,320
Speaker 1: Today.

487
00:21:13,320 --> 00:21:14,920
Speaker 2: We're gonna hear from a listener who's trying to figure

488
00:21:14,920 --> 00:21:18,440
Speaker 2: out what to do with some company stock that he owns.

489
00:21:18,480 --> 00:21:20,600
Speaker 2: We'll get to that and more right after this.

490
00:21:28,640 --> 00:21:30,679
Speaker 1: All right, we're back Now, we got more listener questions

491
00:21:30,720 --> 00:21:33,000
Speaker 1: to get to, and this next one, it's not about

492
00:21:33,040 --> 00:21:36,560
Speaker 1: investing for retirement, it's about investing for future generations.

493
00:21:36,920 --> 00:21:40,840
Speaker 4: Hi, Matt, Joel Aja here from Coralville, Iowa. My wife

494
00:21:40,840 --> 00:21:43,119
Speaker 4: and I have hit a couple of amazing milestones and

495
00:21:43,119 --> 00:21:46,600
Speaker 4: achievements recently, and they have gotten me thinking. First of all,

496
00:21:46,680 --> 00:21:49,800
Speaker 4: we are twenty eight in money gear seven and just

497
00:21:49,920 --> 00:21:52,680
Speaker 4: hit our theoretical coast find number with some help from

498
00:21:52,680 --> 00:21:56,879
Speaker 4: the recent market upswing. Second, and much much more importantly,

499
00:21:58,040 --> 00:22:02,320
Speaker 4: we just had the birth of our born child. Before

500
00:22:02,320 --> 00:22:03,800
Speaker 4: I ask my question, I want to share that we

501
00:22:03,840 --> 00:22:06,080
Speaker 4: are one hundred percent on board and agree with the

502
00:22:06,080 --> 00:22:08,600
Speaker 4: common airplane metaphor of you have to take care of

503
00:22:08,600 --> 00:22:12,240
Speaker 4: yourself in order to effectively take care of others. Well,

504
00:22:12,240 --> 00:22:14,440
Speaker 4: we have no intention to take our foot off the gas.

505
00:22:14,480 --> 00:22:16,560
Speaker 4: Our son being born has made us think about tax

506
00:22:16,560 --> 00:22:19,960
Speaker 4: efficient ways to pass money from generation to generation. Just

507
00:22:20,040 --> 00:22:21,960
Speaker 4: to be clear, we do still plan on contributing to

508
00:22:21,960 --> 00:22:25,160
Speaker 4: our retirement accounts, and we have several other money goals

509
00:22:25,160 --> 00:22:28,520
Speaker 4: that we are still striving towards. We have started a

510
00:22:28,520 --> 00:22:30,320
Speaker 4: five to twenty nine account under our son's name and

511
00:22:30,359 --> 00:22:33,760
Speaker 4: are looking for other opportunities to grow our future families

512
00:22:33,840 --> 00:22:37,679
Speaker 4: wealth under current tax codes and laws. My question is

513
00:22:37,880 --> 00:22:39,800
Speaker 4: do you two have any recommendations for where we can

514
00:22:39,840 --> 00:22:42,560
Speaker 4: get started? Thank you so much for considering this question,

515
00:22:42,600 --> 00:22:44,320
Speaker 4: And if you guys are in the Coroville or Io

516
00:22:44,440 --> 00:22:46,760
Speaker 4: City area, there are several great beers that I'd love

517
00:22:46,760 --> 00:22:48,840
Speaker 4: to show you. Thank you so much for all that

518
00:22:48,880 --> 00:22:50,360
Speaker 4: you do, and I appreciate your time with this.

519
00:22:50,359 --> 00:22:53,920
Speaker 1: Question, Matt, Matt, what's in the water all that? How

520
00:22:53,920 --> 00:22:55,040
Speaker 1: the money listeners having babies?

521
00:22:56,400 --> 00:22:58,879
Speaker 2: Honestly, like, I love hearing for folks who are in

522
00:22:59,000 --> 00:23:01,439
Speaker 2: this stage of life right because there's so much change.

523
00:23:01,480 --> 00:23:05,320
Speaker 2: It's it's an incredibly dynamic period of life where life

524
00:23:05,400 --> 00:23:07,160
Speaker 2: changes like quick.

525
00:23:07,280 --> 00:23:09,200
Speaker 1: You change for a person every few years, it feels

526
00:23:09,200 --> 00:23:09,640
Speaker 1: like you do.

527
00:23:09,760 --> 00:23:12,440
Speaker 2: But it's it's a good thing, but it certainly requires

528
00:23:12,600 --> 00:23:15,520
Speaker 2: some changes maybe to how it is that you are

529
00:23:15,560 --> 00:23:18,040
Speaker 2: preparing for the future. And in this case, AJ sounds

530
00:23:18,080 --> 00:23:21,280
Speaker 2: like they've been doing an incredible job. He said they're

531
00:23:21,320 --> 00:23:24,480
Speaker 2: in money gear number seeven at this twenty eight, which

532
00:23:24,520 --> 00:23:27,520
Speaker 2: is unreal but sort of like what we're saying with

533
00:23:27,520 --> 00:23:31,120
Speaker 2: with Chapman. I don't know. I really like the overall

534
00:23:31,440 --> 00:23:33,960
Speaker 2: philosophy of giving yourself options, and I'm glad to hear

535
00:23:34,040 --> 00:23:37,320
Speaker 2: that you're not completely giving up on investing. You're saying that, like, yes,

536
00:23:37,359 --> 00:23:40,320
Speaker 2: we want to make sure that we're giving setting money

537
00:23:40,320 --> 00:23:42,800
Speaker 2: aside for our kids, but we're still going to continue

538
00:23:42,840 --> 00:23:45,399
Speaker 2: investing ourselves. And I think it's so important to do

539
00:23:45,440 --> 00:23:48,040
Speaker 2: that for a couple of reasons. A. He mentioned the

540
00:23:48,080 --> 00:23:50,639
Speaker 2: recent returns stock market that we've seen in the market,

541
00:23:50,680 --> 00:23:52,439
Speaker 2: like basically over the past year, we've seen like a

542
00:23:52,480 --> 00:23:56,080
Speaker 2: thirty percent return. Well, don't count on that. Like it's

543
00:23:56,160 --> 00:23:59,800
Speaker 2: great that we've all experienced that, but we was not normal.

544
00:24:00,200 --> 00:24:01,840
Speaker 2: Not normal, And we want to make sure that you

545
00:24:01,920 --> 00:24:05,080
Speaker 2: have prepared for scenarios and situations that aren't just the

546
00:24:05,080 --> 00:24:07,280
Speaker 2: best case scenario. But then going back to kind of

547
00:24:07,280 --> 00:24:10,600
Speaker 2: what we're talking about with Chapman right now, is when

548
00:24:10,640 --> 00:24:12,600
Speaker 2: your expenses are probably going to be the lowest love

549
00:24:12,960 --> 00:24:14,920
Speaker 2: they'll ever be in your life. And I say this

550
00:24:15,240 --> 00:24:18,040
Speaker 2: maybe from personal experience, because I remember like ten years

551
00:24:18,080 --> 00:24:20,960
Speaker 2: ago sitting down with Kate at our even then we

552
00:24:21,040 --> 00:24:25,080
Speaker 2: had nerdy financial review meetings at the end of the year.

553
00:24:25,680 --> 00:24:27,200
Speaker 2: I feel like it's about a decade ago we sat

554
00:24:27,200 --> 00:24:29,160
Speaker 2: down and we're like, all right, we can be financially

555
00:24:29,200 --> 00:24:32,840
Speaker 2: independent in about five years three if we really get

556
00:24:32,840 --> 00:24:36,040
Speaker 2: after it. But then life happens like you have a kid,

557
00:24:36,200 --> 00:24:39,119
Speaker 2: or there are different other interests that you have, or

558
00:24:40,080 --> 00:24:41,920
Speaker 2: basically you're spending more money. And what we're talking about

559
00:24:41,920 --> 00:24:45,639
Speaker 2: here is lifestyle creep, and typically like lifestyle creep is

560
00:24:45,680 --> 00:24:48,000
Speaker 2: this boogeyman like we always see it as like this

561
00:24:48,040 --> 00:24:51,439
Speaker 2: big bad thing that's terrible and that we should be

562
00:24:51,440 --> 00:24:54,400
Speaker 2: avoiding at all costs. But I don't think that's necessarily true.

563
00:24:54,400 --> 00:24:56,560
Speaker 2: As long as you are mindfully spending your money in

564
00:24:56,600 --> 00:24:58,760
Speaker 2: a way that reflects your values, I think it's totally

565
00:24:58,800 --> 00:25:02,080
Speaker 2: fine to reap some of the rewards of the sacrifices

566
00:25:02,119 --> 00:25:04,000
Speaker 2: that you've made, of some of that front loading the

567
00:25:04,040 --> 00:25:06,960
Speaker 2: sacrifice approach that a lot of folks have taken in.

568
00:25:07,119 --> 00:25:09,760
Speaker 1: This intentional lifestyle creep instead of just kind of happenstance

569
00:25:09,920 --> 00:25:10,960
Speaker 1: exactly exactly.

570
00:25:11,000 --> 00:25:13,600
Speaker 2: So all that to say, Aja, I think you're in

571
00:25:13,640 --> 00:25:15,679
Speaker 2: a period of time now and I'm not at all

572
00:25:15,680 --> 00:25:17,920
Speaker 2: trying to discount what you have been able to accomplish

573
00:25:18,040 --> 00:25:20,000
Speaker 2: up up until now. I think it is amazing that

574
00:25:20,080 --> 00:25:22,800
Speaker 2: y'all are in the position where you are. I'm just

575
00:25:22,840 --> 00:25:26,960
Speaker 2: commending you for continuing to invest because you never Yeah,

576
00:25:27,119 --> 00:25:30,520
Speaker 2: stuff gets more expensive, your interests change, and there's a

577
00:25:30,600 --> 00:25:34,000
Speaker 2: chance that you switch to hobbies or your interests lead

578
00:25:34,080 --> 00:25:37,280
Speaker 2: you to saving money over the next five to ten years.

579
00:25:37,600 --> 00:25:39,879
Speaker 2: But I think that's pretty rare. Like, typically, especially with

580
00:25:40,000 --> 00:25:42,760
Speaker 2: kids on board, you spend more money. Like, if you

581
00:25:42,760 --> 00:25:44,879
Speaker 2: would have told myself, told me ten years ago, a

582
00:25:44,880 --> 00:25:47,080
Speaker 2: decade ago, the amount of money that we spend on

583
00:25:47,200 --> 00:25:51,600
Speaker 2: extracurricular activities, on clubs, on camps, even on vacations. Now

584
00:25:51,760 --> 00:25:54,320
Speaker 2: we were just talking, we've been talking about vacations, I

585
00:25:54,359 --> 00:25:56,520
Speaker 2: would not have believed you. I would have said, shut up,

586
00:25:56,560 --> 00:25:58,919
Speaker 2: there's no stinking way. But I think that's more of

587
00:25:58,960 --> 00:26:01,720
Speaker 2: the reality than the Yeah, I think that's truly agree Well,

588
00:26:01,760 --> 00:26:03,280
Speaker 2: I think it's very true. Yeah, And I think you

589
00:26:03,320 --> 00:26:04,840
Speaker 2: don't want to approach it from like a defeat a

590
00:26:04,920 --> 00:26:07,399
Speaker 2: standpoint and be like, you can't win no matter what,

591
00:26:07,720 --> 00:26:09,000
Speaker 2: it's gonna end up costing you more.

592
00:26:09,119 --> 00:26:10,919
Speaker 1: Well, the ways in which you're willing to be frugal,

593
00:26:11,359 --> 00:26:14,640
Speaker 1: they changed too, right, So I remember sleeping in a car,

594
00:26:14,800 --> 00:26:17,320
Speaker 1: like on a road trip. I remember, like literally a

595
00:26:17,320 --> 00:26:19,320
Speaker 1: three month road trip, never paid for a place to stay.

596
00:26:19,400 --> 00:26:21,240
Speaker 1: We say that we were comfortable staying in the most

597
00:26:21,320 --> 00:26:25,199
Speaker 1: random spots, sleeping in the tent, random places, or just

598
00:26:25,560 --> 00:26:27,679
Speaker 1: staying in a hostel or something like that. Yeah, or

599
00:26:27,720 --> 00:26:31,560
Speaker 1: on a stranger's couch right the CouchSurfing dot com. Those

600
00:26:31,560 --> 00:26:31,920
Speaker 1: are things.

601
00:26:31,960 --> 00:26:34,400
Speaker 2: Sleeping in a tunnel underneath train tracks, in Europe. Yeah,

602
00:26:34,480 --> 00:26:37,040
Speaker 2: done it. Those bitchiest places I've ever spent a night.

603
00:26:37,320 --> 00:26:39,679
Speaker 1: Those are things I was not just like willing to do.

604
00:26:39,720 --> 00:26:41,159
Speaker 1: I was happy to do when I was in my

605
00:26:41,200 --> 00:26:43,679
Speaker 1: early twenties, and now like you could probably pay me

606
00:26:43,720 --> 00:26:46,480
Speaker 1: to do those things. And so, yeah, it costs more

607
00:26:46,480 --> 00:26:47,720
Speaker 1: every time I go on a trip. It's not like

608
00:26:47,720 --> 00:26:51,400
Speaker 1: I've got, you know, four seasons sort of taste these days.

609
00:26:51,400 --> 00:26:55,359
Speaker 1: But I'm just not willing to cut costs to the

610
00:26:55,400 --> 00:26:58,640
Speaker 1: extreme like I used to be willing to. And so's

611
00:26:58,760 --> 00:27:02,440
Speaker 1: it is worth no voading that that's true for most people, right,

612
00:27:03,160 --> 00:27:05,200
Speaker 1: You don't see and more power to you if you're

613
00:27:05,200 --> 00:27:06,919
Speaker 1: still staying in hostels when you're like in your fifties

614
00:27:06,960 --> 00:27:08,800
Speaker 1: and sixties. But that's just not kind of the way

615
00:27:08,800 --> 00:27:10,879
Speaker 1: most people roll. So now let's get back to the

616
00:27:10,920 --> 00:27:12,919
Speaker 1: heart of Aja's question. I think I love how we

617
00:27:12,960 --> 00:27:14,720
Speaker 1: said that he's going to take care of his own

618
00:27:14,720 --> 00:27:17,040
Speaker 1: future first. I think it's really really important, right, because

619
00:27:17,040 --> 00:27:19,240
Speaker 1: I think that's the best gift you can give to

620
00:27:19,280 --> 00:27:21,520
Speaker 1: your child and any future kids you might have. Absolutely,

621
00:27:21,560 --> 00:27:23,760
Speaker 1: it's the oxygen mask on the plane example, right, So

622
00:27:24,520 --> 00:27:27,120
Speaker 1: putting it on yourself first, so that then you can

623
00:27:27,160 --> 00:27:30,640
Speaker 1: help the person next to you. And I'd say after that,

624
00:27:31,040 --> 00:27:33,720
Speaker 1: the question isn't as much about how you can invest

625
00:27:33,800 --> 00:27:36,600
Speaker 1: for your kid's future. The first thing I would ask

626
00:27:36,720 --> 00:27:39,359
Speaker 1: is are you making sure you're not scrimping on experiences

627
00:27:39,359 --> 00:27:42,159
Speaker 1: that would broaden their horizons in their childhood in the

628
00:27:42,200 --> 00:27:44,080
Speaker 1: coming years. Right, you were just talking about the extra

629
00:27:44,119 --> 00:27:47,320
Speaker 1: calculator cloud and Sam over here. I mean, it's not

630
00:27:47,480 --> 00:27:49,680
Speaker 1: just about making sure they've got a million bucks in

631
00:27:49,720 --> 00:27:52,040
Speaker 1: their retirement accounts by the age of thirty five, which

632
00:27:52,040 --> 00:27:54,680
Speaker 1: you could do right if you're a proactive saber and investor.

633
00:27:55,800 --> 00:27:59,399
Speaker 1: It's about the experiences like traveling, camping, learning an instrument

634
00:27:59,560 --> 00:28:03,200
Speaker 1: organized yes, your free time also right, making.

635
00:28:03,119 --> 00:28:05,760
Speaker 2: Sure ability to raise them in a way that reflects

636
00:28:05,760 --> 00:28:07,920
Speaker 2: your values and how you want them to turn into

637
00:28:07,920 --> 00:28:08,359
Speaker 2: an adult.

638
00:28:08,359 --> 00:28:10,720
Speaker 1: Basically, so be thinking, I think, and we'll talk about

639
00:28:10,720 --> 00:28:13,520
Speaker 1: this in a second, about investing on their behalf, but

640
00:28:13,680 --> 00:28:16,560
Speaker 1: also think about how you can free up more money

641
00:28:16,640 --> 00:28:18,720
Speaker 1: to prioritize some of those totally totally yeah.

642
00:28:18,720 --> 00:28:21,560
Speaker 2: I feel like we're hearing the term generational wealth more

643
00:28:21,600 --> 00:28:23,600
Speaker 2: and more these days, and I know some folks find

644
00:28:23,640 --> 00:28:25,800
Speaker 2: that to be a high priority. It's really important but

645
00:28:25,800 --> 00:28:28,680
Speaker 2: it's just not something that we value highly. And over

646
00:28:28,760 --> 00:28:32,520
Speaker 2: time I've found myself thinking about investing actual dollars for

647
00:28:32,680 --> 00:28:35,040
Speaker 2: my kids. I find that to be less and less

648
00:28:35,040 --> 00:28:37,239
Speaker 2: of a priority, and in some cases, depending on how

649
00:28:37,240 --> 00:28:38,800
Speaker 2: you handle it, I think going that route it can

650
00:28:38,840 --> 00:28:42,160
Speaker 2: actually reduce their own initiative and work ethic. I've know,

651
00:28:42,360 --> 00:28:43,840
Speaker 2: like I don't know how many times I've mentioned this

652
00:28:43,880 --> 00:28:47,280
Speaker 2: on the show, but the Vanderbilt Kids, Fortune's Children was

653
00:28:47,520 --> 00:28:51,000
Speaker 2: the book, but they talked about essentially the downfall of

654
00:28:51,000 --> 00:28:53,720
Speaker 2: that family, and I think it was Willie Vanderbilt who

655
00:28:53,760 --> 00:28:57,560
Speaker 2: said that inherited wealth as a handicap to happiness. It's

656
00:28:57,600 --> 00:29:01,240
Speaker 2: too ambition, as cocaine is too more. And so the

657
00:29:01,320 --> 00:29:04,600
Speaker 2: ability to set your kids up for success in a

658
00:29:04,640 --> 00:29:07,440
Speaker 2: way like we think that money is going to help them,

659
00:29:07,440 --> 00:29:09,640
Speaker 2: but in fact, like maybe the best thing that we

660
00:29:09,680 --> 00:29:12,200
Speaker 2: can do is set a good example for them of

661
00:29:12,240 --> 00:29:13,920
Speaker 2: what the good life looks like and then they have

662
00:29:14,000 --> 00:29:15,720
Speaker 2: the ability to go out there and get it. Sort

663
00:29:15,760 --> 00:29:17,120
Speaker 2: of like going back to the first question where we're

664
00:29:17,120 --> 00:29:19,959
Speaker 2: talking about, Hey, lay the framework or the foundation for

665
00:29:20,040 --> 00:29:22,440
Speaker 2: what a healthy relationship looks like with you and your partner.

666
00:29:22,720 --> 00:29:25,200
Speaker 2: Hopefully that can be a model of what it looks

667
00:29:25,240 --> 00:29:26,800
Speaker 2: like to live the good life.

668
00:29:26,800 --> 00:29:28,440
Speaker 1: So basically, I think what you're saying is you could

669
00:29:28,440 --> 00:29:31,600
Speaker 1: win the generational wealth battle but lose the war. Yes,

670
00:29:32,080 --> 00:29:34,200
Speaker 1: you achieve the thing you set out to achieve, and

671
00:29:34,240 --> 00:29:34,800
Speaker 1: it turns.

672
00:29:34,680 --> 00:29:36,840
Speaker 2: There's a lot of money. Yeah, but then in the end.

673
00:29:38,280 --> 00:29:40,720
Speaker 1: Losing there's a reason trust for fun. Kids get a

674
00:29:40,720 --> 00:29:44,240
Speaker 1: certain kind of wrap, right, and it's probably not all justified,

675
00:29:44,280 --> 00:29:46,520
Speaker 1: but there's truly a reason for that. And you read

676
00:29:46,520 --> 00:29:48,760
Speaker 1: that book about the Vanderbilts. We talk about it. I

677
00:29:48,800 --> 00:29:50,160
Speaker 1: haven't ready yet. I need to read it. But like

678
00:29:50,480 --> 00:29:53,800
Speaker 1: the sort of ambition draining reality of having money in

679
00:29:53,840 --> 00:29:55,640
Speaker 1: the bank that you haven't earned, that someone else has

680
00:29:55,680 --> 00:29:59,240
Speaker 1: done for you, I mean, it would sap my ambition.

681
00:29:59,520 --> 00:30:01,720
Speaker 1: I'm just be honest. If someone gave me three million

682
00:30:01,720 --> 00:30:05,840
Speaker 1: dollars tomorrow, would it would probably change my work ethic

683
00:30:06,000 --> 00:30:06,200
Speaker 1: or and.

684
00:30:06,440 --> 00:30:08,400
Speaker 2: I think you would have had the same fire or

685
00:30:08,560 --> 00:30:10,640
Speaker 2: it leaves you of joy. I think at least like

686
00:30:10,680 --> 00:30:13,280
Speaker 2: within the developmental years, where you were thinking, Okay, what

687
00:30:13,320 --> 00:30:14,800
Speaker 2: do I want to do with my life? Where do

688
00:30:14,840 --> 00:30:16,040
Speaker 2: I want to go to school? How hard am I

689
00:30:16,040 --> 00:30:17,720
Speaker 2: going to study? How hard am I going to pursue

690
00:30:17,720 --> 00:30:19,960
Speaker 2: this internship when you know that in the back of

691
00:30:19,960 --> 00:30:21,719
Speaker 2: your mind that, oh, I can always fall back on

692
00:30:22,400 --> 00:30:25,600
Speaker 2: mom and dad, And that's an awesome thing for kids

693
00:30:25,680 --> 00:30:27,880
Speaker 2: to be able to know that they can count on.

694
00:30:28,200 --> 00:30:30,920
Speaker 2: There's essentially like a floor, right, Like there's a safety net.

695
00:30:30,920 --> 00:30:33,800
Speaker 2: And I think you don't want to underestimate the importance

696
00:30:33,800 --> 00:30:36,080
Speaker 2: of that for kids, the ability of kids to be

697
00:30:36,120 --> 00:30:38,080
Speaker 2: able to go out there and take risks. But yeah,

698
00:30:38,160 --> 00:30:40,360
Speaker 2: you don't want to prepare the road for the child.

699
00:30:40,400 --> 00:30:41,680
Speaker 2: You want to prepare the child for the road.

700
00:30:41,760 --> 00:30:41,920
Speaker 5: Yeah.

701
00:30:41,960 --> 00:30:43,560
Speaker 1: By the way, I wouldn't turn down three million, just

702
00:30:43,560 --> 00:30:46,160
Speaker 1: saying if someone out there really really wants to give it,

703
00:30:46,200 --> 00:30:48,880
Speaker 1: if you're feeling it will take. But I would say, too,

704
00:30:48,960 --> 00:30:51,760
Speaker 1: let's talk about like five twenty nine accounts, because there's

705
00:30:52,120 --> 00:30:54,400
Speaker 1: obviously nothing wrong with saving something for your kids for

706
00:30:54,440 --> 00:30:56,800
Speaker 1: their future, especially with the high cost of college these days,

707
00:30:57,040 --> 00:30:59,760
Speaker 1: if you have the additional financial means, and AJ mentioned

708
00:31:00,320 --> 00:31:02,280
Speaker 1: that the first account that we would have too, the

709
00:31:02,280 --> 00:31:04,840
Speaker 1: five twenty nine. If you're crushing your own finances, five

710
00:31:04,880 --> 00:31:06,880
Speaker 1: twenty nine accounts are the next best place to sock

711
00:31:06,920 --> 00:31:09,200
Speaker 1: money away if you think your child is likely to

712
00:31:09,200 --> 00:31:11,479
Speaker 1: go to college. But even if not, if you want

713
00:31:11,520 --> 00:31:13,760
Speaker 1: to play the new Secure Act two point zero loophole,

714
00:31:13,760 --> 00:31:16,720
Speaker 1: because you can actually get money from a five to

715
00:31:16,720 --> 00:31:19,200
Speaker 1: twenty nine now into a roth IRA because of the

716
00:31:19,280 --> 00:31:22,080
Speaker 1: changes made there. So the good news, by the way,

717
00:31:22,360 --> 00:31:24,440
Speaker 1: is you get a tax break in many states for

718
00:31:24,560 --> 00:31:26,480
Speaker 1: making that contribution to a five towenty nine plans, So

719
00:31:26,480 --> 00:31:28,640
Speaker 1: it's a win for you. You're socking money into an

720
00:31:28,640 --> 00:31:31,920
Speaker 1: account for your child for their potential future college needs,

721
00:31:32,200 --> 00:31:34,480
Speaker 1: or I mean, you could even use it for private

722
00:31:34,480 --> 00:31:36,560
Speaker 1: school I guess earlier on if you wanted to. But

723
00:31:36,640 --> 00:31:38,800
Speaker 1: then on top of that, you can funnel that money

724
00:31:38,800 --> 00:31:41,240
Speaker 1: into a wroth over time down the road as well.

725
00:31:41,760 --> 00:31:44,200
Speaker 1: I just think that that account now allows for a

726
00:31:44,240 --> 00:31:46,880
Speaker 1: whole lot of flexibility that it didn't used to. That's right, yeah.

727
00:31:46,880 --> 00:31:48,760
Speaker 2: But then beyond that, if you want to funnel more

728
00:31:48,800 --> 00:31:51,400
Speaker 2: and more dollars into accounts that are under their name,

729
00:31:51,800 --> 00:31:53,400
Speaker 2: I would say the next goal would be to just

730
00:31:53,520 --> 00:31:56,959
Speaker 2: directly fund a wroth IRA with them once they have

731
00:31:57,160 --> 00:32:00,320
Speaker 2: earned income. I think creative parents out there can find

732
00:32:00,400 --> 00:32:02,840
Speaker 2: ways for their younger kids to earn a little money

733
00:32:02,880 --> 00:32:06,280
Speaker 2: on the side and therefore start contributing to a roth

734
00:32:06,400 --> 00:32:08,800
Speaker 2: earlier than most. Of course, you can wait until they

735
00:32:08,800 --> 00:32:11,080
Speaker 2: get their their first high school job as well, but

736
00:32:11,120 --> 00:32:12,880
Speaker 2: then another route would be to just put money in

737
00:32:12,920 --> 00:32:17,160
Speaker 2: a custodial brokerage account in their name. The downside here

738
00:32:17,360 --> 00:32:20,160
Speaker 2: is that this can reduce their ability to qualify for

739
00:32:20,280 --> 00:32:24,760
Speaker 2: financial aid for college. And so this is another instance

740
00:32:24,800 --> 00:32:27,080
Speaker 2: of potentially shooting yourself on the foot or the you

741
00:32:27,120 --> 00:32:31,240
Speaker 2: shooting them in the foot because the put like you're

742
00:32:31,240 --> 00:32:33,000
Speaker 2: trying to help them out, but then you might end

743
00:32:33,080 --> 00:32:35,560
Speaker 2: up actually missing out on free aid money that they

744
00:32:35,600 --> 00:32:37,680
Speaker 2: would have qualified for because you do have so much

745
00:32:37,680 --> 00:32:39,720
Speaker 2: money to decide true in their actual name.

746
00:32:39,800 --> 00:32:41,320
Speaker 1: All right, So one more thing I think I want

747
00:32:41,320 --> 00:32:43,760
Speaker 1: to do that worth mentioning, is that you can just

748
00:32:44,160 --> 00:32:47,160
Speaker 1: give some of your money to your kids as they

749
00:32:47,160 --> 00:32:50,000
Speaker 1: get older. And so the more money you sack away

750
00:32:50,000 --> 00:32:52,520
Speaker 1: in your own accounts, the more wealthy you're building. Will

751
00:32:52,560 --> 00:32:54,840
Speaker 1: you just opt to give them eighteen thousand bucks.

752
00:32:54,680 --> 00:32:56,640
Speaker 2: A year at least that's the current amount right according

753
00:32:56,680 --> 00:32:59,640
Speaker 2: to law without any sort of tax issue, that's right,

754
00:33:00,000 --> 00:33:02,600
Speaker 2: which will likely increase too over like over time, right

755
00:33:02,640 --> 00:33:05,080
Speaker 2: like when the and that's and it's double if you're

756
00:33:05,120 --> 00:33:07,280
Speaker 2: a couple as well, like that's for an individual eighteen thousand,

757
00:33:07,280 --> 00:33:08,680
Speaker 2: so you're looking at thirty six thousand dollars.

758
00:33:08,680 --> 00:33:11,160
Speaker 1: A kid gets married, you can give like double that

759
00:33:11,240 --> 00:33:12,880
Speaker 1: seventy two thousand dollars, right, So that's a whole lot

760
00:33:12,920 --> 00:33:15,160
Speaker 1: of money. I like this approach, Matt, because, you know,

761
00:33:15,240 --> 00:33:18,000
Speaker 1: giving money to your kids when they're on the prespice

762
00:33:18,040 --> 00:33:21,160
Speaker 1: of buying a new house, let's say, or they are

763
00:33:21,440 --> 00:33:24,080
Speaker 1: you know, in those kind of thirties years or in

764
00:33:24,080 --> 00:33:27,000
Speaker 1: their their those early or in those twenties years, and

765
00:33:27,040 --> 00:33:28,800
Speaker 1: they've been doing a great job after college, like they're

766
00:33:28,800 --> 00:33:31,000
Speaker 1: working hard, that knows to the grindstone sort of thing,

767
00:33:31,040 --> 00:33:32,600
Speaker 1: and you want to kind of give them a leg up.

768
00:33:32,760 --> 00:33:34,720
Speaker 1: This is a great time to funnel money into their life.

769
00:33:34,920 --> 00:33:35,120
Speaker 2: Yeap.

770
00:33:35,200 --> 00:33:37,560
Speaker 1: Doing it earlier than that, though, I think can have

771
00:33:37,640 --> 00:33:39,880
Speaker 1: some of those negative side effects we've talked about. But

772
00:33:40,120 --> 00:33:41,400
Speaker 1: I mean, I think that's.

773
00:33:41,200 --> 00:33:43,040
Speaker 2: Still a big chunk of money though. I mean, like

774
00:33:43,080 --> 00:33:45,160
Speaker 2: you said, it's like, assuming they get married, they've got

775
00:33:45,160 --> 00:33:46,880
Speaker 2: a partner, seventy two thousand dollars. You can do a

776
00:33:46,880 --> 00:33:49,440
Speaker 2: lot of things with seventy two thousand dollars. And I

777
00:33:49,600 --> 00:33:52,800
Speaker 2: like how that just provides like a pressure relief out

778
00:33:52,840 --> 00:33:55,360
Speaker 2: that gives you the options to be able to without

779
00:33:55,400 --> 00:33:58,640
Speaker 2: tax implications, give them some money, while like you said,

780
00:33:58,680 --> 00:34:01,800
Speaker 2: avoid some of the more potential harmful downstream effects of

781
00:34:01,840 --> 00:34:04,320
Speaker 2: having set aside massive amounts of money that they know about.

782
00:34:04,360 --> 00:34:06,280
Speaker 1: I think that's because they're old enough to understand and

783
00:34:06,360 --> 00:34:09,640
Speaker 1: appreciate your generosity. Totally agree without hopefully like adopting the

784
00:34:09,640 --> 00:34:12,080
Speaker 1: spirit that they're entitled to the money that you've worked

785
00:34:12,080 --> 00:34:12,399
Speaker 1: to build.

786
00:34:12,520 --> 00:34:12,880
Speaker 2: Totally.

787
00:34:12,880 --> 00:34:15,279
Speaker 1: And I think one last thing is the great thing

788
00:34:15,320 --> 00:34:18,800
Speaker 1: about owning real estate paid off real estate is the

789
00:34:19,160 --> 00:34:22,560
Speaker 1: stepped up basis, right when when people inherit a home,

790
00:34:22,840 --> 00:34:24,480
Speaker 1: when if your kids were to inherit a home that

791
00:34:24,520 --> 00:34:27,000
Speaker 1: you owned, or multiple homes that you owned over time.

792
00:34:27,120 --> 00:34:28,760
Speaker 1: Going back to kind of the beginning of the episode

793
00:34:28,800 --> 00:34:31,359
Speaker 1: and investing in real estate, that's one of the great

794
00:34:31,360 --> 00:34:33,600
Speaker 1: things about real estate if you own it for always

795
00:34:33,800 --> 00:34:36,799
Speaker 1: and you never sell it and your heirs inherited, is

796
00:34:36,800 --> 00:34:38,359
Speaker 1: that hopefully it was a good investment that went up

797
00:34:38,360 --> 00:34:41,160
Speaker 1: in value significantly and there's no tax time bomb at

798
00:34:41,200 --> 00:34:42,759
Speaker 1: the end of the road either.

799
00:34:42,960 --> 00:34:45,520
Speaker 2: Yeah, that's right, So you can always consider real estate

800
00:34:46,000 --> 00:34:49,160
Speaker 2: just like Chapman's doing. But Joel, you've got another question. Here.

801
00:34:49,200 --> 00:34:51,680
Speaker 2: This is from a listener who is maybe he's been

802
00:34:51,719 --> 00:34:54,799
Speaker 2: accidentally investing with a single company. Let's hear his question

803
00:34:54,840 --> 00:34:56,760
Speaker 2: about what to do with some of these stocks.

804
00:34:57,200 --> 00:34:58,879
Speaker 5: Hi, Joel and Matt, this is Paul from the Mountain

805
00:34:58,920 --> 00:35:01,360
Speaker 5: outside of Pittsburgh, pennsylvan I have a question for you

806
00:35:01,400 --> 00:35:03,799
Speaker 5: about my company four one K. But first I want

807
00:35:03,800 --> 00:35:05,880
Speaker 5: to give you a real quick frugal or cheap so

808
00:35:05,920 --> 00:35:08,640
Speaker 5: my local Aldi, the people there have a habit of

809
00:35:08,800 --> 00:35:12,000
Speaker 5: returning the carts with the quarters left in it, and

810
00:35:12,239 --> 00:35:14,279
Speaker 5: if I find those carts, I do not use my

811
00:35:14,320 --> 00:35:17,160
Speaker 5: own quarter and end up with that quarter and have

812
00:35:17,200 --> 00:35:18,920
Speaker 5: a pretty good stash to where I think I can

813
00:35:18,960 --> 00:35:22,280
Speaker 5: have a free beer soon. So is that frugal or cheap?

814
00:35:23,040 --> 00:35:26,239
Speaker 5: But the real question is that my company match is

815
00:35:26,320 --> 00:35:31,399
Speaker 5: automatically put into my portfolio as company stock. Now that

816
00:35:31,600 --> 00:35:34,560
Speaker 5: feature has been disabled on Fidelity to change how the

817
00:35:34,600 --> 00:35:37,960
Speaker 5: match is allocated within my portfolio. So my question is

818
00:35:37,960 --> 00:35:40,520
Speaker 5: how often is too often to manually sell that for

819
00:35:40,960 --> 00:35:43,440
Speaker 5: an S and P five hundred or total stock market fund?

820
00:35:44,000 --> 00:35:45,520
Speaker 5: Thank you very much. I love the show.

821
00:35:45,680 --> 00:35:48,360
Speaker 1: Well, Matt, let's to dig into here, But first and foremost,

822
00:35:48,400 --> 00:35:52,279
Speaker 1: frugal or Aldi frugal or cheap. First, I'm going to

823
00:35:52,320 --> 00:35:56,480
Speaker 1: say cheap and not to throw shade Paul, but I

824
00:35:56,520 --> 00:35:58,959
Speaker 1: think the reason people leave the quarter in the cart

825
00:35:59,200 --> 00:36:01,680
Speaker 1: is to pass on some kind right. It's it's it's

826
00:36:01,680 --> 00:36:03,120
Speaker 1: like what people do in the drive through, paying for

827
00:36:03,160 --> 00:36:05,080
Speaker 1: the person behind them. I guess like for their food too.

828
00:36:05,280 --> 00:36:07,120
Speaker 1: I've ever done that, but it always seems sweet. Right.

829
00:36:07,200 --> 00:36:09,000
Speaker 2: Yeah, I was gonna say, I was gonna ask if

830
00:36:09,000 --> 00:36:10,640
Speaker 2: you maybe I should ever done that. I've never done

831
00:36:10,640 --> 00:36:13,239
Speaker 2: that myself either, but I feel like that would be fun. Yeah,

832
00:36:13,320 --> 00:36:16,640
Speaker 2: all right, maybe do that ways to spontaneously give.

833
00:36:16,760 --> 00:36:19,400
Speaker 1: But then then I guess you're the person who's not

834
00:36:19,440 --> 00:36:21,680
Speaker 1: passing it on if you just drive off and don't

835
00:36:21,680 --> 00:36:23,479
Speaker 1: pay for the next one, so you end the chain

836
00:36:23,560 --> 00:36:25,960
Speaker 1: and free lunch. Yeah, that might be what you're doing

837
00:36:26,000 --> 00:36:28,840
Speaker 1: here with this quarter thing. Like, I don't think that

838
00:36:29,080 --> 00:36:32,319
Speaker 1: you're using it as intended. I think you're funding your

839
00:36:32,360 --> 00:36:34,520
Speaker 1: personal stash for the beer purchase, even though you're planning

840
00:36:34,560 --> 00:36:37,440
Speaker 1: on spending it on something of course holy, righteous and

841
00:36:37,480 --> 00:36:39,360
Speaker 1: good that we would totally get behind it in the

842
00:36:39,400 --> 00:36:41,520
Speaker 1: form of craft beer, good beer. Probably don't steal the

843
00:36:41,560 --> 00:36:43,359
Speaker 1: quarters to do that. That's that's just my take. Okay.

844
00:36:43,400 --> 00:36:45,279
Speaker 2: So initially I was I would totally agree with you.

845
00:36:45,320 --> 00:36:46,600
Speaker 2: But the more I thought about it, though, the more

846
00:36:46,640 --> 00:36:50,359
Speaker 2: I realized that the reason those quarters exist is so

847
00:36:50,440 --> 00:36:53,319
Speaker 2: that Aldi can have a reduced staff so there's not

848
00:36:53,400 --> 00:36:56,600
Speaker 2: somebody who's working full time gathering all the carts out

849
00:36:56,600 --> 00:37:00,279
Speaker 2: there in the parking lot. So otherwise it's it's chaos, right, Like,

850
00:37:00,320 --> 00:37:01,640
Speaker 2: it's just gonna end up looking like Costco.

851
00:37:01,920 --> 00:37:04,560
Speaker 1: Where that's the reason for the quarter system, but that's

852
00:37:04,320 --> 00:37:06,040
Speaker 1: not the reason people leave quarters in the right.

853
00:37:06,080 --> 00:37:08,880
Speaker 2: But if you leave your quarter there, you've provided no

854
00:37:08,920 --> 00:37:10,719
Speaker 2: incentive for the next person because they're like, well, it's

855
00:37:10,719 --> 00:37:12,239
Speaker 2: not my money. And then before you know it, you've

856
00:37:12,239 --> 00:37:13,640
Speaker 2: got a bunch of carts with quarters in them and

857
00:37:13,640 --> 00:37:16,640
Speaker 2: they're all just it's again, it's not orderly. Now most

858
00:37:16,719 --> 00:37:19,239
Speaker 2: Aldi customers are too cheap. They surround them all up here.

859
00:37:19,280 --> 00:37:19,720
Speaker 1: Okay.

860
00:37:19,880 --> 00:37:22,120
Speaker 2: So as I thought about it, though, I thought, well,

861
00:37:22,160 --> 00:37:24,760
Speaker 2: that sort of short circuits the reason that the quarter

862
00:37:24,840 --> 00:37:28,240
Speaker 2: even exists, and the it sort of breaks the whole system.

863
00:37:28,280 --> 00:37:30,960
Speaker 2: And so what I would do is go ahead, take

864
00:37:31,000 --> 00:37:33,799
Speaker 2: the quarter, because you want to contribute to the orderlyness,

865
00:37:33,840 --> 00:37:35,239
Speaker 2: the law and order that Aldi.

866
00:37:35,040 --> 00:37:38,000
Speaker 1: Is trying to create. If you don't do this, all

867
00:37:38,040 --> 00:37:39,160
Speaker 1: thee will break down and die.

868
00:37:39,280 --> 00:37:42,759
Speaker 2: But then once you have enough for beer, just spend

869
00:37:42,760 --> 00:37:45,520
Speaker 2: that on a friend, by your buddies beer as opposed

870
00:37:45,560 --> 00:37:47,720
Speaker 2: to buying it for yourself. That way, you're still being generous,

871
00:37:47,719 --> 00:37:50,680
Speaker 2: you're still paying it forward, but you're not short circuit

872
00:37:50,680 --> 00:37:53,759
Speaker 2: and you're not causing havoc they're at Aldi. I just

873
00:37:53,800 --> 00:37:56,440
Speaker 2: like the I like this system that ALDI has created,

874
00:37:56,560 --> 00:37:58,400
Speaker 2: and I feel like you're kind of going around it

875
00:37:58,600 --> 00:37:59,680
Speaker 2: by by doing that.

876
00:37:59,719 --> 00:38:01,480
Speaker 1: All right, Well, I feel like you're trying to save

877
00:38:01,480 --> 00:38:03,960
Speaker 1: Aldi and you're making sure that Paul gets the beer

878
00:38:03,960 --> 00:38:04,239
Speaker 1: he wants.

879
00:38:04,400 --> 00:38:06,600
Speaker 2: Yeah, and he's still able to be just not beer

880
00:38:06,640 --> 00:38:08,239
Speaker 2: for him, he's going to buy the beer for a friend.

881
00:38:08,280 --> 00:38:08,480
Speaker 5: Yeah.

882
00:38:08,960 --> 00:38:10,960
Speaker 2: So you can be generous while at the same time

883
00:38:11,000 --> 00:38:14,799
Speaker 2: participating in the systems and the structure that have been implemented.

884
00:38:14,840 --> 00:38:16,320
Speaker 2: All right, And I think all you would get behind that.

885
00:38:16,400 --> 00:38:16,480
Speaker 4: Right.

886
00:38:16,520 --> 00:38:19,960
Speaker 2: They're a German company. It's all about engineering and very efficient.

887
00:38:20,440 --> 00:38:22,239
Speaker 1: It's very efficient, right, clearly they are. If you've been

888
00:38:22,239 --> 00:38:23,480
Speaker 1: in the one, I mean, the way they're set up,

889
00:38:23,480 --> 00:38:27,200
Speaker 1: it's just it's very well conceived and there's just there's

890
00:38:27,200 --> 00:38:29,120
Speaker 1: not much room for fluff in and aldi, right, So

891
00:38:29,360 --> 00:38:31,480
Speaker 1: that's why you save so much money when you shop there.

892
00:38:31,520 --> 00:38:33,040
Speaker 2: Incentives matter, That's all I'm trying to say.

893
00:38:33,880 --> 00:38:35,440
Speaker 1: Let's talk about the four one K match thing, though,

894
00:38:35,480 --> 00:38:39,239
Speaker 1: because having too much money in your employer's stock and

895
00:38:39,280 --> 00:38:41,919
Speaker 1: your retirement account is a really bad thing, no matter

896
00:38:41,960 --> 00:38:44,520
Speaker 1: what company you work for. I don't care where you work.

897
00:38:44,520 --> 00:38:46,160
Speaker 1: And you might say, but this stock has done so

898
00:38:46,239 --> 00:38:48,200
Speaker 1: well over the past ten, twelve, fifteen years that I've

899
00:38:48,239 --> 00:38:50,600
Speaker 1: been working there, I've made out like a bandit being

900
00:38:50,600 --> 00:38:52,440
Speaker 1: in this stock and instead of just kind of a

901
00:38:52,560 --> 00:38:54,719
Speaker 1: general S and P five hundred fund or total stock

902
00:38:54,719 --> 00:38:56,680
Speaker 1: market fund like you guys typically talk about. So how

903
00:38:56,680 --> 00:38:59,800
Speaker 1: could I be wrong? Well, it can work for your benefit.

904
00:39:00,000 --> 00:39:03,200
Speaker 1: It's important to mention that, like if you have worked

905
00:39:03,239 --> 00:39:06,279
Speaker 1: for Apple or something like that, then you've made out

906
00:39:06,360 --> 00:39:08,919
Speaker 1: you've done really well, or in Nvidia, but that still

907
00:39:08,920 --> 00:39:11,319
Speaker 1: doesn't mean that it's a wise move because you're not

908
00:39:11,440 --> 00:39:13,680
Speaker 1: very diversified. You've got too many eggs in one basket.

909
00:39:13,880 --> 00:39:16,600
Speaker 1: It's just not a good idea to invest substantial sums

910
00:39:16,640 --> 00:39:19,040
Speaker 1: of money in a single stock, much less the stock

911
00:39:19,160 --> 00:39:21,440
Speaker 1: of the company that writes your checks. Yep, that's just

912
00:39:21,480 --> 00:39:25,200
Speaker 1: too much concentration, and so that ramps up your risk levels.

913
00:39:25,360 --> 00:39:28,560
Speaker 1: If the company experiences difficult times, not only could you

914
00:39:28,600 --> 00:39:31,080
Speaker 1: lose your job, which your retirement funds can see a

915
00:39:31,120 --> 00:39:34,400
Speaker 1: substantial hit too. That is something worth worrying about, that's right.

916
00:39:34,480 --> 00:39:36,560
Speaker 2: Yeah. The goal is to never have the amount of

917
00:39:36,600 --> 00:39:41,200
Speaker 2: employer stock exposure above five percent of your total investable assets.

918
00:39:41,600 --> 00:39:43,600
Speaker 2: And even that could be too much. I mean that's

919
00:39:43,760 --> 00:39:46,720
Speaker 2: in total with all the other individual companies or crypto

920
00:39:46,840 --> 00:39:49,440
Speaker 2: or whatever else that you might be interested in investing in.

921
00:39:49,880 --> 00:39:51,839
Speaker 2: But I think the best way to get out of

922
00:39:51,840 --> 00:39:54,160
Speaker 2: your company's stock position would be to take a dollar

923
00:39:54,239 --> 00:39:57,480
Speaker 2: cost averaging approach. That's how you're buying the stocks, and

924
00:39:57,480 --> 00:39:59,399
Speaker 2: so why not take a similar approach when you are

925
00:39:59,480 --> 00:40:01,600
Speaker 2: selling it. And so, if it's not too much hassle,

926
00:40:01,680 --> 00:40:03,839
Speaker 2: just log into Fidelity, which is where it sounds like

927
00:40:03,920 --> 00:40:06,319
Speaker 2: your employer has your four O one K, and just

928
00:40:06,400 --> 00:40:10,000
Speaker 2: immediately sell those shares and instead purchase let's say some

929
00:40:10,160 --> 00:40:14,640
Speaker 2: f z Rocks zero expense ratio there so it's totally free,

930
00:40:14,960 --> 00:40:18,240
Speaker 2: and that way you completely eliminate having to think about

931
00:40:18,760 --> 00:40:21,080
Speaker 2: whether your timing is right, because you know you're just

932
00:40:21,160 --> 00:40:23,960
Speaker 2: executing your plan. Basically, you know that this is your

933
00:40:24,000 --> 00:40:26,960
Speaker 2: system and every two weeks, this is just something that

934
00:40:27,000 --> 00:40:29,520
Speaker 2: you do. And for other folks their employer, I mean,

935
00:40:29,520 --> 00:40:32,759
Speaker 2: they might only match like quarterly or even annually. But

936
00:40:32,800 --> 00:40:34,480
Speaker 2: you can still keep it simple by selling it as

937
00:40:34,520 --> 00:40:36,520
Speaker 2: soon as it hits your account, You're not having to

938
00:40:37,120 --> 00:40:39,400
Speaker 2: weigh the decision of whether or not this is a

939
00:40:39,440 --> 00:40:41,960
Speaker 2: good time or not. I like this sort of knee

940
00:40:42,000 --> 00:40:45,360
Speaker 2: jerk automatic reaction of just executing that plan as opposed

941
00:40:45,400 --> 00:40:47,120
Speaker 2: to having to make a judgment call.

942
00:40:47,239 --> 00:40:50,959
Speaker 1: Yeah, I agree. And there's also the behavioral or psychological

943
00:40:51,000 --> 00:40:53,040
Speaker 1: side to this as well. Right, for a lot of folks,

944
00:40:53,200 --> 00:40:55,359
Speaker 1: the less they log into their retirement accounts the better.

945
00:40:55,480 --> 00:40:57,040
Speaker 1: So if you're logging in there every other week, you

946
00:40:57,080 --> 00:40:59,680
Speaker 1: might be tempted to like fiddle with your allocation. That's true,

947
00:40:59,760 --> 00:41:01,960
Speaker 1: makes some other changes, and you might say, okay, I

948
00:41:02,320 --> 00:41:04,760
Speaker 1: won't double down on my company stock, but maybe actually

949
00:41:04,800 --> 00:41:07,480
Speaker 1: be buying up some video it's popping right now. Well,

950
00:41:07,480 --> 00:41:08,880
Speaker 1: we don't want you doing that either, right, And if

951
00:41:09,160 --> 00:41:11,720
Speaker 1: that's you, you're more tempted the more often you're actually

952
00:41:11,760 --> 00:41:14,480
Speaker 1: logged in, we'll just make it quarterly or even annual

953
00:41:14,520 --> 00:41:16,880
Speaker 1: reminder to sell that stock and buy a more diverse

954
00:41:16,880 --> 00:41:18,399
Speaker 1: fund with those dollars, or if you just don't want

955
00:41:18,400 --> 00:41:20,640
Speaker 1: the hassle of doing it every two weeks and then

956
00:41:20,640 --> 00:41:22,160
Speaker 1: you know, I would say a total stock market or

957
00:41:22,160 --> 00:41:26,080
Speaker 1: an SMP fund that's likely where you're sticking your other dollars.

958
00:41:26,160 --> 00:41:28,879
Speaker 1: Just put those dollars in there too, and avoid logging

959
00:41:28,960 --> 00:41:31,239
Speaker 1: in as frequently. So I think it is true, Matt.

960
00:41:31,280 --> 00:41:35,640
Speaker 1: The less frequently we see what's happening with our retirement accounts,

961
00:41:35,680 --> 00:41:37,839
Speaker 1: the more likely we are to stay the course. If

962
00:41:37,880 --> 00:41:40,680
Speaker 1: it's coming out of our paycheck with regularity and we're

963
00:41:40,680 --> 00:41:42,520
Speaker 1: logging in once a year just to make sure that

964
00:41:42,600 --> 00:41:45,040
Speaker 1: everything looks okay, we're going to be those folks who

965
00:41:45,160 --> 00:41:47,560
Speaker 1: stay the course and build wealth totally.

966
00:41:47,719 --> 00:41:50,600
Speaker 2: Yeah, No, I think there's like the like. So you're

967
00:41:50,600 --> 00:41:52,960
Speaker 2: talking about being tempted to mess with your investments, but

968
00:41:53,000 --> 00:41:55,680
Speaker 2: I think there's also the temptation to think you're richer

969
00:41:55,719 --> 00:41:58,239
Speaker 2: than you are, Like there is an impact that those

970
00:41:58,320 --> 00:42:00,880
Speaker 2: unrealized gains have on you, I think, and how it

971
00:42:00,920 --> 00:42:03,200
Speaker 2: is that you spend because if you see like we're

972
00:42:03,239 --> 00:42:05,800
Speaker 2: talking earlier, over the past year, you've seen your portfolio

973
00:42:05,920 --> 00:42:09,520
Speaker 2: grow significantly, you're thinking, I'm rich, I'm gonna go out

974
00:42:09,520 --> 00:42:12,279
Speaker 2: and finance a finance a car, or.

975
00:42:12,360 --> 00:42:14,960
Speaker 1: I don't have the funds to spend ten percent of

976
00:42:15,000 --> 00:42:16,840
Speaker 1: my income on a vacation, but I'll put it on

977
00:42:16,880 --> 00:42:17,640
Speaker 1: a credit card.

978
00:42:17,680 --> 00:42:19,839
Speaker 2: May or maybe I'll maybe I'll take a four one

979
00:42:19,920 --> 00:42:22,520
Speaker 2: K load. Like there's all sorts of other temptations that

980
00:42:22,560 --> 00:42:26,280
Speaker 2: come with being aware to the fact that your portfolio

981
00:42:26,320 --> 00:42:28,399
Speaker 2: has grown significantly, And if that were to be the case,

982
00:42:28,400 --> 00:42:30,799
Speaker 2: I'd rather you have like blinders on. I would rather

983
00:42:30,880 --> 00:42:32,279
Speaker 2: you be completely unaware to it.

984
00:42:32,320 --> 00:42:34,040
Speaker 1: And so a lot of the wealth effect man again,

985
00:42:34,160 --> 00:42:34,840
Speaker 1: it's insidious.

986
00:42:34,880 --> 00:42:37,080
Speaker 2: It comes down to your personality. And if you know

987
00:42:37,160 --> 00:42:40,560
Speaker 2: that you can just top in there, sell, click, buy,

988
00:42:41,239 --> 00:42:44,600
Speaker 2: be done, log out, then I think the dollar cost averaging.

989
00:42:45,000 --> 00:42:46,919
Speaker 2: That's what I would do personally, because I would want

990
00:42:46,920 --> 00:42:50,359
Speaker 2: my money out of that single company stock as soon

991
00:42:50,400 --> 00:42:54,080
Speaker 2: as possible, a for diversifications sake, but also hopefully for

992
00:42:54,440 --> 00:42:56,720
Speaker 2: better returns. And the sooner I can get my money

993
00:42:56,719 --> 00:42:58,960
Speaker 2: invested more broadly, the happier I'm going to and.

994
00:42:59,080 --> 00:43:01,000
Speaker 1: It's the least amount of time then that your money

995
00:43:01,080 --> 00:43:03,719
Speaker 1: is in that single stock and you're de risking more

996
00:43:03,800 --> 00:43:05,960
Speaker 1: quickly that way too. The good news on top of

997
00:43:05,960 --> 00:43:07,839
Speaker 1: that is that this is not a taxable event. When

998
00:43:07,880 --> 00:43:10,319
Speaker 1: you buy and sell funds or stocks inside of a

999
00:43:10,360 --> 00:43:13,319
Speaker 1: tax advantaged account, it doesn't trigger any sort of tax

1000
00:43:13,360 --> 00:43:15,759
Speaker 1: consequences would be It would be different if you were

1001
00:43:15,800 --> 00:43:18,239
Speaker 1: like doing that inside of a taxable brokerage account that

1002
00:43:18,280 --> 00:43:20,880
Speaker 1: would create a capital gainer loss. Not so in a

1003
00:43:20,920 --> 00:43:23,239
Speaker 1: four to one k though, So I think the frequency

1004
00:43:23,280 --> 00:43:25,279
Speaker 1: is up to you whatever works best. We offered a

1005
00:43:25,280 --> 00:43:27,719
Speaker 1: few different kind of routes for you to take, but

1006
00:43:27,760 --> 00:43:31,080
Speaker 1: it's all about de risking regularly enough that you aren't

1007
00:43:31,080 --> 00:43:33,520
Speaker 1: signing yourself up for undo and unecessary risk totally.

1008
00:43:33,560 --> 00:43:35,359
Speaker 2: I think Paul's doing the right thing. And it's not

1009
00:43:35,400 --> 00:43:37,640
Speaker 2: that your company is likely going to be the next

1010
00:43:37,719 --> 00:43:40,720
Speaker 2: Enron where it's going to completely ruin your financial future,

1011
00:43:40,960 --> 00:43:43,000
Speaker 2: but it just doesn't make much sense to have a

1012
00:43:43,040 --> 00:43:46,160
Speaker 2: lot of exposure to their stock. I think getting stock

1013
00:43:46,239 --> 00:43:48,800
Speaker 2: options as a result of maybe being at a startup

1014
00:43:48,840 --> 00:43:51,160
Speaker 2: early on, like that's one thing, But being forced to

1015
00:43:51,200 --> 00:43:54,440
Speaker 2: invest in your company with regular stock purchases inside of

1016
00:43:54,440 --> 00:43:56,600
Speaker 2: your tax advantage acount is just a whole other thing

1017
00:43:56,960 --> 00:43:59,680
Speaker 2: that we would recommend for you to avoid. But congrats

1018
00:43:59,800 --> 00:44:03,280
Speaker 2: on recognizing this but also in rectifying it right getting

1019
00:44:03,320 --> 00:44:05,440
Speaker 2: invested in the broader market. We think that's going to

1020
00:44:05,520 --> 00:44:06,520
Speaker 2: get you to where you want to be.

1021
00:44:06,680 --> 00:44:07,960
Speaker 1: Super smart move for sure.

1022
00:44:08,000 --> 00:44:08,640
Speaker 2: Yep, all right, Matt.

1023
00:44:08,640 --> 00:44:10,680
Speaker 1: We got a couple more questions to get to, including

1024
00:44:11,160 --> 00:44:14,200
Speaker 1: one about financial regrets, another about timing the market. We'll

1025
00:44:14,200 --> 00:44:23,719
Speaker 1: get to those right after this. All right, man, we

1026
00:44:23,760 --> 00:44:24,239
Speaker 1: are back and.

1027
00:44:24,320 --> 00:44:26,319
Speaker 2: Just keep it rolling with the Facebook question of the week,

1028
00:44:26,360 --> 00:44:30,080
Speaker 2: which is from Laurie and she wrote, Hello friends, I'm

1029
00:44:30,120 --> 00:44:32,799
Speaker 2: wondering if I open a roth Ira this week. Am

1030
00:44:32,800 --> 00:44:35,319
Speaker 2: I able to contribute to twenty twenty three until the

1031
00:44:35,360 --> 00:44:38,200
Speaker 2: tax deadline or not because it was not an active

1032
00:44:38,200 --> 00:44:39,520
Speaker 2: account at the end of the year.

1033
00:44:40,000 --> 00:44:42,359
Speaker 1: Fort times say, She says, Hello friends. That's how people

1034
00:44:42,400 --> 00:44:44,000
Speaker 1: talk to each other in the how to Money Facebook group.

1035
00:44:44,000 --> 00:44:47,759
Speaker 2: Hello comrade, it's not fine as Marxist is at but

1036
00:44:48,280 --> 00:44:50,040
Speaker 2: just sweep everyone's kind in there.

1037
00:44:50,080 --> 00:44:50,200
Speaker 4: Man.

1038
00:44:50,239 --> 00:44:51,920
Speaker 1: It really is a lovely place. So if you're not

1039
00:44:51,960 --> 00:44:53,600
Speaker 1: a part of the how to Money Facebook group, come

1040
00:44:53,680 --> 00:44:54,359
Speaker 1: join head to.

1041
00:44:54,320 --> 00:44:57,160
Speaker 2: Facebook search how to Money. You'll find it. But Lloyd

1042
00:44:57,200 --> 00:44:59,000
Speaker 2: to answer your question, this is a quick one. Yes,

1043
00:44:59,680 --> 00:45:02,480
Speaker 2: it does don't matter if you have never had a

1044
00:45:02,520 --> 00:45:05,359
Speaker 2: wroth before, if you didn't have one open at all

1045
00:45:05,400 --> 00:45:07,440
Speaker 2: in twenty twenty three, it doesn't matter, because you can

1046
00:45:07,480 --> 00:45:10,000
Speaker 2: open it up, let's say on April fourteenth for the

1047
00:45:10,120 --> 00:45:12,840
Speaker 2: very first time. You can establish and then fund that

1048
00:45:12,880 --> 00:45:15,399
Speaker 2: account on the same day and not run a foul

1049
00:45:15,440 --> 00:45:19,200
Speaker 2: of the irs when it comes to the roth contribution guidelines,

1050
00:45:19,560 --> 00:45:22,800
Speaker 2: as long as your income for last year doesn't exceed

1051
00:45:22,880 --> 00:45:26,160
Speaker 2: what they allow, of course, but specifically, the max income

1052
00:45:26,480 --> 00:45:29,000
Speaker 2: that you can have for a roth ira as an

1053
00:45:29,000 --> 00:45:31,799
Speaker 2: individual is one hundred and fifty three thousand dollars, and

1054
00:45:31,840 --> 00:45:35,040
Speaker 2: if you are married and filing jointly, it's combined two

1055
00:45:35,160 --> 00:45:37,719
Speaker 2: hundred and twenty eight thousand. So that's really the only

1056
00:45:37,719 --> 00:45:38,719
Speaker 2: thing you need to keep in mind.

1057
00:45:38,760 --> 00:45:40,600
Speaker 1: Basically, what you're highlighting is that you can move like

1058
00:45:40,600 --> 00:45:42,680
Speaker 1: a sloth and you can still take advantage of this. Yea,

1059
00:45:43,120 --> 00:45:45,319
Speaker 1: you can. I forget my kids know what, just as

1060
00:45:45,400 --> 00:45:47,920
Speaker 1: they move they tell me sometimes like they like a

1061
00:45:47,920 --> 00:45:50,200
Speaker 1: foot an hour or something like that, are incredibly slow.

1062
00:45:50,640 --> 00:45:53,080
Speaker 1: But you can be that person move really slow on

1063
00:45:53,120 --> 00:45:55,239
Speaker 1: the roth IRA thing and still have the ability to

1064
00:45:55,280 --> 00:45:57,520
Speaker 1: contribute for two years. You still got time.

1065
00:45:57,560 --> 00:46:00,560
Speaker 2: I picture it more like a rabbit who's just sitting there, oh,

1066
00:46:00,600 --> 00:46:03,160
Speaker 2: and their waiting until the very last second, and then

1067
00:46:03,160 --> 00:46:04,839
Speaker 2: it just like boom. Yeah, you just do a little

1068
00:46:04,880 --> 00:46:05,839
Speaker 2: hot boom you're in.

1069
00:46:05,920 --> 00:46:08,080
Speaker 1: Yeah, because I guess you could move too slot like

1070
00:46:08,120 --> 00:46:10,560
Speaker 1: it and just miss it all together. But we would

1071
00:46:10,560 --> 00:46:13,520
Speaker 1: say it's a fantastic idea to prioritize filling the twenty

1072
00:46:13,560 --> 00:46:16,640
Speaker 1: twenty three wroth bucket over the twenty twenty four oh yeah,

1073
00:46:16,680 --> 00:46:19,799
Speaker 1: because even if you can't max out both, that's the goal, right,

1074
00:46:19,840 --> 00:46:22,040
Speaker 1: and you never know what could happen with your finances

1075
00:46:22,080 --> 00:46:24,799
Speaker 1: in the coming year. So I think Lori's question Matt

1076
00:46:24,800 --> 00:46:26,960
Speaker 1: can act almost as like a public service announcement for

1077
00:46:27,040 --> 00:46:29,160
Speaker 1: everyone out there. You still have time to get money

1078
00:46:29,160 --> 00:46:31,280
Speaker 1: into your roth for last year. The clock is ticking.

1079
00:46:31,640 --> 00:46:35,440
Speaker 1: Don't be the hair who waits too long. Lets the

1080
00:46:35,480 --> 00:46:38,560
Speaker 1: tortoise win. And then you can't because once that time

1081
00:46:38,600 --> 00:46:40,960
Speaker 1: clock is up, you can never get money into your

1082
00:46:40,960 --> 00:46:44,239
Speaker 1: wroth for a previous year. There's annual contribution limits, and

1083
00:46:44,280 --> 00:46:45,960
Speaker 1: so the more money you can get into the wroth

1084
00:46:46,160 --> 00:46:48,040
Speaker 1: earlier you can get it in there, the better it's

1085
00:46:48,080 --> 00:46:48,400
Speaker 1: going to be.

1086
00:46:48,560 --> 00:46:50,759
Speaker 2: Yeah. I really like the idea of focusing on twenty

1087
00:46:50,760 --> 00:46:52,880
Speaker 2: twenty three and then just setting for yourself that a

1088
00:46:53,040 --> 00:46:56,239
Speaker 2: challenge of hopefully being able to contribute some to twenty

1089
00:46:56,280 --> 00:46:59,279
Speaker 2: twenty four, but even better, the ability to potentially max

1090
00:46:59,320 --> 00:47:02,120
Speaker 2: that thing out and start even saving for next year

1091
00:47:02,160 --> 00:47:04,080
Speaker 2: for twenty twenty five. That way, you've got that money,

1092
00:47:04,120 --> 00:47:06,040
Speaker 2: that cash on hand, ready to deploy.

1093
00:47:05,800 --> 00:47:08,640
Speaker 1: And let the tax refund be the catalyst for ROTH

1094
00:47:08,680 --> 00:47:10,920
Speaker 1: conversions too, because if the average person's getting three K,

1095
00:47:11,640 --> 00:47:14,400
Speaker 1: that's that's almost half of your what you're allowed to

1096
00:47:14,400 --> 00:47:16,799
Speaker 1: contribute to a ROTH in a given year. So why

1097
00:47:16,840 --> 00:47:17,560
Speaker 1: not get started with that?

1098
00:47:17,640 --> 00:47:19,919
Speaker 2: I love it all, right, Joel, Let's do one more.

1099
00:47:20,320 --> 00:47:22,520
Speaker 2: This one is from anonymous in the Facebook.

1100
00:47:22,160 --> 00:47:23,680
Speaker 1: Group, who's my favorite person.

1101
00:47:24,200 --> 00:47:26,160
Speaker 2: I'd love to know what you would do differently if

1102
00:47:26,160 --> 00:47:28,880
Speaker 2: you were starting your money journey now, how would you

1103
00:47:28,920 --> 00:47:32,080
Speaker 2: have invested five hundred dollars back then knowing what you

1104
00:47:32,160 --> 00:47:35,400
Speaker 2: know now? And I assume know that they're asking not

1105
00:47:35,480 --> 00:47:38,839
Speaker 2: like if you knew the future and what horses would

1106
00:47:38,840 --> 00:47:41,560
Speaker 2: win the Kentucky Derby. Yeah, they're not asking that. They're

1107
00:47:41,560 --> 00:47:43,879
Speaker 2: not asking like a back to the Future Part two.

1108
00:47:44,040 --> 00:47:46,040
Speaker 1: No type of question. Now, there's all sorts of things

1109
00:47:46,080 --> 00:47:48,640
Speaker 1: that you very much do differently if you had that

1110
00:47:48,719 --> 00:47:51,359
Speaker 1: foresight ability right. And this is such a smart question though,

1111
00:47:51,360 --> 00:47:55,120
Speaker 1: I think because first and foremost asking the financial regrets question,

1112
00:47:55,480 --> 00:47:57,560
Speaker 1: it can shed some light on how beginners should proceed.

1113
00:47:57,600 --> 00:47:59,360
Speaker 1: If you ask other people and say, what would you

1114
00:47:59,400 --> 00:48:01,239
Speaker 1: have done ten fifteen years ago if you were in

1115
00:48:01,280 --> 00:48:04,640
Speaker 1: my shoes? What an amazing ability to pick somebody's brain

1116
00:48:04,840 --> 00:48:07,279
Speaker 1: and get special insight that's hard to gain from just

1117
00:48:07,360 --> 00:48:09,920
Speaker 1: reading blogs and how to posts. The goal in this

1118
00:48:10,000 --> 00:48:13,120
Speaker 1: question is to learn from the insights of others who've

1119
00:48:13,120 --> 00:48:15,920
Speaker 1: been there, who've gone before you, and maybe maybe they

1120
00:48:15,960 --> 00:48:17,880
Speaker 1: made a mistake or two along the road right, or

1121
00:48:17,920 --> 00:48:19,799
Speaker 1: at least they just didn't do it perfectly. And so

1122
00:48:19,880 --> 00:48:22,440
Speaker 1: I think even those small mishaps, Matt, they cost us

1123
00:48:22,480 --> 00:48:25,759
Speaker 1: money where they prevent us from prioritizing the thing that's

1124
00:48:25,760 --> 00:48:28,160
Speaker 1: going to be in our own best interest. I just

1125
00:48:28,239 --> 00:48:29,960
Speaker 1: I'm thinking of two things that I did early on,

1126
00:48:30,200 --> 00:48:32,720
Speaker 1: not like major faux pause or anything like that, but one,

1127
00:48:32,840 --> 00:48:34,399
Speaker 1: I was just too conservative and it makes me think

1128
00:48:34,400 --> 00:48:36,480
Speaker 1: I was investing in target date funds. And then the

1129
00:48:36,480 --> 00:48:39,440
Speaker 1: more I read over time, I was like, the younger,

1130
00:48:39,640 --> 00:48:43,200
Speaker 1: why am I why don't I have any exposure to bonds?

1131
00:48:43,239 --> 00:48:45,319
Speaker 1: Why am I allocated in this way? And so I

1132
00:48:45,360 --> 00:48:47,240
Speaker 1: went more towards the S and P five hundred direction

1133
00:48:47,520 --> 00:48:50,080
Speaker 1: because I saw, especially in those wealth building years, you're

1134
00:48:50,080 --> 00:48:53,120
Speaker 1: costing yourself gains. Another thing I did, YEP, was paying

1135
00:48:53,160 --> 00:48:55,759
Speaker 1: off student loans too early. My student loan rate, I

1136
00:48:55,800 --> 00:48:58,480
Speaker 1: want to say, was like one point eight seven five percent,

1137
00:48:58,880 --> 00:49:01,839
Speaker 1: and I remember dropping thousands of dollars in one lump sum,

1138
00:49:01,840 --> 00:49:03,279
Speaker 1: and I thought it was the smartest thing I'd ever

1139
00:49:03,320 --> 00:49:06,080
Speaker 1: done to pay off those student loans when I could,

1140
00:49:06,480 --> 00:49:07,920
Speaker 1: when I wasn't able to max out my wrath. I

1141
00:49:07,960 --> 00:49:09,399
Speaker 1: was making so little money. There's no way I could

1142
00:49:09,400 --> 00:49:11,560
Speaker 1: do both. And so it was just I should have

1143
00:49:11,680 --> 00:49:13,960
Speaker 1: let that student loan linger, and I should have prioritized

1144
00:49:14,000 --> 00:49:16,080
Speaker 1: investing over paying off that debt. Those are the kind

1145
00:49:16,080 --> 00:49:19,239
Speaker 1: of thing again, not like filing bankruptcy type faux pause

1146
00:49:19,640 --> 00:49:21,600
Speaker 1: or mess ups or anything like that, but still those

1147
00:49:21,600 --> 00:49:22,880
Speaker 1: are the kind of things I look back on and

1148
00:49:22,880 --> 00:49:24,040
Speaker 1: I'm like, I could have done better.

1149
00:49:24,360 --> 00:49:26,239
Speaker 2: Well, that's the thing too, It's hard to say that

1150
00:49:26,280 --> 00:49:30,080
Speaker 2: you would have completely done something like drastically different because

1151
00:49:30,080 --> 00:49:32,160
Speaker 2: the things that we experienced early on make us into

1152
00:49:32,160 --> 00:49:34,480
Speaker 2: who we are today, right and so like even like

1153
00:49:34,520 --> 00:49:37,040
Speaker 2: it makes so like. One of my regrets is that

1154
00:49:37,239 --> 00:49:40,560
Speaker 2: I invested before I had an emergency fund set asign basically,

1155
00:49:40,800 --> 00:49:42,680
Speaker 2: and what I needed to do is I actually had

1156
00:49:42,680 --> 00:49:44,239
Speaker 2: to reach in and pull some of that money out

1157
00:49:44,239 --> 00:49:46,319
Speaker 2: in order to help cover a move when I was

1158
00:49:46,320 --> 00:49:49,520
Speaker 2: moving to Atlanta. But what I recognized at the time

1159
00:49:49,560 --> 00:49:51,279
Speaker 2: was that that was something that I did not like doing.

1160
00:49:51,360 --> 00:49:53,600
Speaker 2: Like I realized that this isn't what this is for.

1161
00:49:53,840 --> 00:49:56,440
Speaker 2: It doesn't feel good. No, it didn't, And it started

1162
00:49:56,480 --> 00:49:58,560
Speaker 2: me down a path of handling my money well so

1163
00:49:58,600 --> 00:50:01,359
Speaker 2: that it was enough of of a spark to help

1164
00:50:01,400 --> 00:50:04,160
Speaker 2: me to sort of start writing my ways as opposed

1165
00:50:04,160 --> 00:50:07,279
Speaker 2: to maybe had I not experienced that, I would have

1166
00:50:07,680 --> 00:50:11,200
Speaker 2: continued to make them moves and then further down the line,

1167
00:50:11,239 --> 00:50:13,480
Speaker 2: maybe it would have cost me even even more money. Perhaps.

1168
00:50:13,520 --> 00:50:15,319
Speaker 2: So I think the ability to learn some of those

1169
00:50:15,400 --> 00:50:18,560
Speaker 2: lessons early on is I think it's vital.

1170
00:50:18,600 --> 00:50:20,520
Speaker 1: It makes me think of that Avitt Brothers' lines. All

1171
00:50:20,560 --> 00:50:23,120
Speaker 1: my mistakes led me to you. It's a love song, right,

1172
00:50:23,120 --> 00:50:25,080
Speaker 1: but it's like that's the sentiment that you're getting at

1173
00:50:25,120 --> 00:50:27,600
Speaker 1: with our money, it's even our mistakes can kind of

1174
00:50:27,600 --> 00:50:29,120
Speaker 1: like funnel us in the right direction if we learn

1175
00:50:29,160 --> 00:50:31,399
Speaker 1: from them exactly. And again, actually, I think sometimes they

1176
00:50:31,400 --> 00:50:33,319
Speaker 1: feel so painful that it helps us make progress more

1177
00:50:33,400 --> 00:50:34,720
Speaker 1: quickly after the mistake.

1178
00:50:35,239 --> 00:50:37,919
Speaker 2: I think that can totally be true. But so this person, though,

1179
00:50:37,960 --> 00:50:40,799
Speaker 2: is asking how to invest five hundred dollars based on

1180
00:50:40,840 --> 00:50:43,360
Speaker 2: what we know now, and this kind of approaches this

1181
00:50:43,440 --> 00:50:46,200
Speaker 2: from the money gears perspective, because we don't know what

1182
00:50:46,320 --> 00:50:47,880
Speaker 2: job this person has, we don't know where they're at

1183
00:50:47,880 --> 00:50:49,120
Speaker 2: in their career, if they own a home, that kind

1184
00:50:49,160 --> 00:50:51,520
Speaker 2: of thing. And so my first instinct is to tell

1185
00:50:51,560 --> 00:50:53,440
Speaker 2: this person to make sure that they have enough money

1186
00:50:53,480 --> 00:50:56,080
Speaker 2: on hand within that emergency fund in order to weather

1187
00:50:56,239 --> 00:50:59,680
Speaker 2: a potential financial storm. And this is going to my

1188
00:50:59,719 --> 00:51:03,520
Speaker 2: own experiences as a single person who had some big

1189
00:51:03,520 --> 00:51:06,160
Speaker 2: expenses come up that I was not prepared for. And

1190
00:51:06,200 --> 00:51:08,680
Speaker 2: I know five hundred dollars isn't a lot of money

1191
00:51:08,680 --> 00:51:11,160
Speaker 2: in the grand scheme of things, but not having enough

1192
00:51:11,200 --> 00:51:13,960
Speaker 2: savings on hand can just blow up even your best intentions,

1193
00:51:14,280 --> 00:51:16,319
Speaker 2: your plans, and what you're hoping to be able to do.

1194
00:51:16,520 --> 00:51:17,960
Speaker 2: And so hopefully this is money that you have on

1195
00:51:18,040 --> 00:51:22,040
Speaker 2: top of your already robust savings, but if not, make

1196
00:51:22,080 --> 00:51:24,880
Speaker 2: sure to have that emergency fund in place. And essentially

1197
00:51:24,880 --> 00:51:27,000
Speaker 2: after that, we would tell you to go down the

1198
00:51:27,040 --> 00:51:30,719
Speaker 2: money gears. Like so, after having that basic twand four

1199
00:51:30,760 --> 00:51:32,680
Speaker 2: hundred and sixty seven dollars on hand, make sure that

1200
00:51:32,680 --> 00:51:34,400
Speaker 2: you're getting that four one K match because that's a

1201
00:51:34,560 --> 00:51:37,480
Speaker 2: guaranteed one hundred percent return on your money. You're not

1202
00:51:37,520 --> 00:51:40,920
Speaker 2: going to experience any returns anywhere else. But then beyond that,

1203
00:51:41,040 --> 00:51:43,439
Speaker 2: make sure that if you've got any high interest rate debt,

1204
00:51:43,560 --> 00:51:45,520
Speaker 2: that's what you're going to want to focus on. Let's

1205
00:51:45,520 --> 00:51:47,839
Speaker 2: say you don't have that, though, then truly you are

1206
00:51:47,920 --> 00:51:51,400
Speaker 2: looking at investing your dollars. You're looking at towards the

1207
00:51:51,680 --> 00:51:54,560
Speaker 2: different tax advantage accounts, for instance, like the ROTH.

1208
00:51:54,640 --> 00:51:56,960
Speaker 1: Ira Ye, So you say you got time for twenty

1209
00:51:57,000 --> 00:51:58,400
Speaker 1: twenty three to put that five hundred bucks in the

1210
00:51:58,400 --> 00:52:01,600
Speaker 1: twenty twenty three WROTH and then hopefully you're able to

1211
00:52:01,920 --> 00:52:04,719
Speaker 1: sock even more into twenty twenty four. But I agree, Matt,

1212
00:52:05,120 --> 00:52:07,440
Speaker 1: I love the first thing you said, like, make sure

1213
00:52:07,480 --> 00:52:09,960
Speaker 1: you have enough for the E fund. That is huge

1214
00:52:10,040 --> 00:52:11,960
Speaker 1: because you don't want to have to claw back out

1215
00:52:11,960 --> 00:52:14,960
Speaker 1: those investments. That's super painful. But then outside the realm

1216
00:52:14,960 --> 00:52:16,839
Speaker 1: and the framework of the money gears. And by the way,

1217
00:52:16,840 --> 00:52:18,440
Speaker 1: we'll post a link to an article about the money

1218
00:52:18,480 --> 00:52:20,400
Speaker 1: gears that's basically our financial order of operations.

1219
00:52:20,400 --> 00:52:22,120
Speaker 2: So you've talked about them, Yeah, in a minute, we

1220
00:52:22,200 --> 00:52:24,080
Speaker 2: prefer to them like we have, but it's been a.

1221
00:52:24,080 --> 00:52:26,200
Speaker 1: Second Yeah, we kind of lean on those regularly because

1222
00:52:26,520 --> 00:52:28,719
Speaker 1: it's just a helpful way to identify where you're at

1223
00:52:28,800 --> 00:52:30,640
Speaker 1: in progress with your money and what the next step

1224
00:52:30,680 --> 00:52:32,600
Speaker 1: is for you, what the next goal can be. But

1225
00:52:32,640 --> 00:52:34,520
Speaker 1: the next thing really is to invest in yourself. If

1226
00:52:34,520 --> 00:52:37,320
Speaker 1: you've got five hundred bucks, you know, funnel that towards

1227
00:52:37,320 --> 00:52:39,960
Speaker 1: a degree or a certification, well, that can have a

1228
00:52:39,960 --> 00:52:42,719
Speaker 1: significant impact on your earnings over the decades, right, don't

1229
00:52:42,760 --> 00:52:44,920
Speaker 1: just put it into an investment account and cross your

1230
00:52:44,960 --> 00:52:47,560
Speaker 1: fingers and hope for the best. Anything you can do

1231
00:52:48,040 --> 00:52:51,160
Speaker 1: to increase your marketability in today's job market with five

1232
00:52:51,200 --> 00:52:53,640
Speaker 1: hundred bucks could be well worth it. Just don't leave

1233
00:52:53,640 --> 00:52:55,399
Speaker 1: that stone unturned. I mean, you can even be Matt

1234
00:52:55,480 --> 00:52:58,160
Speaker 1: something like a public speaking class, right, if that's going

1235
00:52:58,239 --> 00:53:00,279
Speaker 1: to help you, you think, get the promotion, get the

1236
00:53:00,320 --> 00:53:02,680
Speaker 1: next get the job that you really want. If you're

1237
00:53:02,680 --> 00:53:05,120
Speaker 1: able to increase what you make. That is like the

1238
00:53:05,120 --> 00:53:07,719
Speaker 1: goose that lays the golden egg, right, You're gonna then

1239
00:53:07,800 --> 00:53:09,600
Speaker 1: have much more to invest over the years if you

1240
00:53:09,640 --> 00:53:11,279
Speaker 1: can use that five hundred bucks as kind of like

1241
00:53:11,480 --> 00:53:14,839
Speaker 1: a seed fund for yourself. I think that can be

1242
00:53:14,880 --> 00:53:18,080
Speaker 1: a brilliant approach. And I think oftentimes, especially if you're

1243
00:53:18,080 --> 00:53:21,319
Speaker 1: the hyper optimized spreadsheet sort of person, a lot of

1244
00:53:21,320 --> 00:53:24,040
Speaker 1: people fail to see that. It's always all about well,

1245
00:53:24,080 --> 00:53:26,560
Speaker 1: how do I optimize returns and how do I get

1246
00:53:26,600 --> 00:53:28,560
Speaker 1: more money into those tax advantaged accounts? And that is

1247
00:53:28,600 --> 00:53:31,200
Speaker 1: certainly a good question, but just don't forget about the

1248
00:53:31,280 --> 00:53:33,680
Speaker 1: value that can that can be derived from kind of

1249
00:53:33,719 --> 00:53:35,560
Speaker 1: boosting your personal capital Totally.

1250
00:53:35,719 --> 00:53:37,440
Speaker 2: I love the money gears, but it doesn't leave a

1251
00:53:37,440 --> 00:53:39,799
Speaker 2: whole lot of creativity, right because you're just going from

1252
00:53:39,840 --> 00:53:42,239
Speaker 2: like step to step to step, and only you, as

1253
00:53:42,239 --> 00:53:45,040
Speaker 2: an individual know some of the different opportunities that are

1254
00:53:45,120 --> 00:53:48,640
Speaker 2: available to you, the different preferences that you have, or

1255
00:53:48,680 --> 00:53:50,719
Speaker 2: like even of the type of work that you want

1256
00:53:50,760 --> 00:53:54,080
Speaker 2: to do, or the opportunities that lie before you. Maybe

1257
00:53:54,120 --> 00:53:56,320
Speaker 2: you are the only person who knows that, like, Okay,

1258
00:53:56,840 --> 00:53:58,960
Speaker 2: this is a work trip that's not going to be

1259
00:53:59,000 --> 00:54:01,000
Speaker 2: paid for But I know if I can make it

1260
00:54:01,000 --> 00:54:02,400
Speaker 2: to this work trip, I'm going to be in the

1261
00:54:02,440 --> 00:54:06,720
Speaker 2: same room as some stakeholders I don't know, like business

1262
00:54:06,719 --> 00:54:10,320
Speaker 2: talk right, who have a big impact on my future promotions,

1263
00:54:10,440 --> 00:54:13,400
Speaker 2: or maybe there's somebody else from a competing company and

1264
00:54:13,480 --> 00:54:14,920
Speaker 2: the ability to get in front of them like there

1265
00:54:14,920 --> 00:54:17,480
Speaker 2: are I'm just making stuff up because there are so

1266
00:54:17,520 --> 00:54:20,000
Speaker 2: many different possibilities depending on what career you have and

1267
00:54:20,000 --> 00:54:22,600
Speaker 2: what industry that you're in where you have the ability

1268
00:54:22,640 --> 00:54:25,640
Speaker 2: to know. Man. Yeah, the numbers say I should be

1269
00:54:25,640 --> 00:54:27,919
Speaker 2: paying off this high interest rate debt with that five

1270
00:54:28,000 --> 00:54:31,040
Speaker 2: hundred bucks, but I know in my life experience tells

1271
00:54:31,080 --> 00:54:33,799
Speaker 2: me that instead I should be focusing my efforts in

1272
00:54:33,800 --> 00:54:36,640
Speaker 2: this direction because, like you said, the ability to make

1273
00:54:36,680 --> 00:54:39,839
Speaker 2: a massive increase when it comes to your income can

1274
00:54:39,880 --> 00:54:42,799
Speaker 2: pay for years to come. Yeah. I think that's wise.

1275
00:54:42,880 --> 00:54:44,319
Speaker 1: Yeah, I love it. Let's get back to the beer though,

1276
00:54:44,320 --> 00:54:44,759
Speaker 1: how about that?

1277
00:54:44,880 --> 00:54:47,040
Speaker 2: Let's do it man. This was bone Shaker. It's a

1278
00:54:47,040 --> 00:54:50,920
Speaker 2: brown nail by a Moat Mountain Brewing Company, donated to

1279
00:54:50,920 --> 00:54:52,919
Speaker 2: the show by Todd. Who is this the last beer

1280
00:54:52,920 --> 00:54:54,200
Speaker 2: by Todd? I think it is?

1281
00:54:54,560 --> 00:54:57,319
Speaker 1: What your thoughts well, I told Todd when you drop

1282
00:54:57,360 --> 00:54:58,560
Speaker 1: the beers off that. I want to go running with

1283
00:54:58,600 --> 00:54:59,839
Speaker 1: them at some point, but I don't think I could.

1284
00:55:00,000 --> 00:55:01,440
Speaker 1: I don't think I keep up. So is he Is

1285
00:55:01,480 --> 00:55:02,080
Speaker 1: he a fast boy?

1286
00:55:02,160 --> 00:55:02,239
Speaker 2: Oh?

1287
00:55:02,400 --> 00:55:02,960
Speaker 1: I think he's white.

1288
00:55:03,040 --> 00:55:03,200
Speaker 2: Yeah.

1289
00:55:03,239 --> 00:55:04,960
Speaker 1: Oh yeah, Well I'm also I'm a slow boy, So

1290
00:55:05,360 --> 00:55:07,359
Speaker 1: there's that. I think he's vast, white animal slow boy.

1291
00:55:07,400 --> 00:55:09,319
Speaker 1: So the gap is huge. You're you're totally getting faster.

1292
00:55:09,600 --> 00:55:10,879
Speaker 1: That's that's true.

1293
00:55:10,960 --> 00:55:13,520
Speaker 2: Slowly, but surely you have. You started doing the when

1294
00:55:13,560 --> 00:55:15,960
Speaker 2: you go for a couch to five the couch? Do

1295
00:55:16,000 --> 00:55:17,880
Speaker 2: you like the intermediate one? Because you've been running for

1296
00:55:17,880 --> 00:55:19,880
Speaker 2: a minute here. It's not like you've never run before. No,

1297
00:55:20,080 --> 00:55:22,319
Speaker 2: like you've got like a solid foundation.

1298
00:55:22,000 --> 00:55:23,680
Speaker 1: With tons of beasts. I think you about like fifteen

1299
00:55:23,680 --> 00:55:25,520
Speaker 1: miles or something. I was like, all right, okay, we're

1300
00:55:25,560 --> 00:55:26,920
Speaker 1: different people, and what does that have to do with

1301
00:55:27,080 --> 00:55:30,760
Speaker 1: uh this? He don't need the beer. I was just yea, yeah,

1302
00:55:30,800 --> 00:55:33,359
Speaker 1: this and background on Todd but this. I was gonna

1303
00:55:33,360 --> 00:55:35,239
Speaker 1: reveal social Security number right now too, but he might

1304
00:55:35,280 --> 00:55:38,040
Speaker 1: be upset. So this there's a classic brownail vibes. I

1305
00:55:38,040 --> 00:55:40,240
Speaker 1: thought it was like a little bit bitter. Some brownails

1306
00:55:40,320 --> 00:55:41,759
Speaker 1: tend to be a little sweeter some tend to be

1307
00:55:41,760 --> 00:55:44,160
Speaker 1: a little more bitter. I kind of like both sides

1308
00:55:44,160 --> 00:55:45,759
Speaker 1: of the equation, but I think I usually prefer bitter

1309
00:55:45,760 --> 00:55:47,880
Speaker 1: and this one, this was like a just a slightly

1310
00:55:47,920 --> 00:55:49,440
Speaker 1: bitter brown than I really dug.

1311
00:55:49,560 --> 00:55:53,560
Speaker 2: Yeah, it had those dark, toasty flavors without getting bogged

1312
00:55:53,640 --> 00:55:56,279
Speaker 2: down with like the like the heavier body right, like

1313
00:55:56,360 --> 00:55:59,200
Speaker 2: you have the flavors without the calories because it's a

1314
00:55:59,280 --> 00:56:02,200
Speaker 2: lighter ABV beer, but also like literally just the weight

1315
00:56:02,320 --> 00:56:04,319
Speaker 2: of it made it a lot easier to drink. So

1316
00:56:04,480 --> 00:56:06,719
Speaker 2: certainly enjoyed this one on a beautiful spring day like

1317
00:56:06,760 --> 00:56:07,440
Speaker 2: it is today. Man.

1318
00:56:07,520 --> 00:56:10,000
Speaker 1: Yeah, thanks Todd, appreciate you. Man. Matt's gonna do it

1319
00:56:10,000 --> 00:56:12,439
Speaker 1: for this episode again. We'll have links in the show

1320
00:56:12,480 --> 00:56:13,960
Speaker 1: notes up at how money dot com. We mentioned a

1321
00:56:13,960 --> 00:56:15,680
Speaker 1: few that I think will be helpful, so please do

1322
00:56:15,760 --> 00:56:18,920
Speaker 1: check that out. But until next time, best Friends Out,

1323
00:56:19,120 --> 00:56:20,600
Speaker 1: Best Friends Out.