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Speaker 1: Welcome to Out of Money. I'm Joel, I'm Att.

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Speaker 2: Today we're talking digital nomad, fatigue, treat culture, and retired renters.

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Speaker 1: That's right, man.

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Speaker 3: This is our Friday Flight, our weekly roundup of the

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Speaker 3: stories that made their way through different publications out there,

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Speaker 3: and we're going to tackle how they pertain to your

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Speaker 3: personal finances. Happy Friday, everyone, that's the best day of

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Speaker 3: the week. I like Fridays, that's the best. Yeah, what's

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Speaker 3: your second favorite day of the week.

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Speaker 1: Yeah, favorites.

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Speaker 3: You don't have them immediately ranked in Like Sundays, Sundays

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Speaker 3: or Mondays are great.

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Speaker 2: They feel less chor oriented than Saturdays. You get the

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Speaker 2: Sunday scaries. No, yeah, like you worried about going back

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Speaker 2: to work next day. Yeah no, I get excited largely because.

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Speaker 1: You love what you do.

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Speaker 2: Have a fantastic time here. But we get a for

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Speaker 2: coffee immediately on Mondays. Mondays are our coffee day, and

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Speaker 2: so that do you.

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Speaker 3: Think that that has a leave alleviated any of the

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Speaker 3: stress that you might normally feel on Sundays?

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Speaker 1: You're like, well, at least I get to go get

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Speaker 1: a great coffee on that in the morning.

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Speaker 2: I'm not usually stressed anyway, but it does add a

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Speaker 2: little excitement to my mind.

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Speaker 3: We do you think we should have more stress in

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Speaker 3: our lives? I feel that there are there's just a

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Speaker 3: whole lot of anxiety and stress in the world, and

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Speaker 3: I don't know, I feel like we have been able

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Speaker 3: to take a proper view.

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Speaker 1: Is it. I've just three kids, I've got my fair amount.

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Speaker 3: It just seems like there's more and more existential threat

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Speaker 3: or stress that people are just.

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Speaker 1: Soaking themselves with.

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Speaker 3: I don't know, like we talk a good bit about

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Speaker 3: politics personally, but there's a difference between talking about it

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Speaker 3: and letting that fuel your deep seated fear and anxieties.

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Speaker 3: And we're just why we're talking about.

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Speaker 2: Feel as political as a culture right now, and that's

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Speaker 2: why we try to stay away from it on the

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Speaker 2: ship man.

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Speaker 1: That's right.

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Speaker 2: Politics for zero, politics for our Friday flight. I mean

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Speaker 2: sometimes policy, but not politics. Okay, let's quickly though. I

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Speaker 2: wanted to mention a listener. Ricky emailed us this week

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Speaker 2: and he was really upset, Matt. He was really upset Ricky.

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Speaker 1: James, not not at you.

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Speaker 2: Wasn't mad at you.

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Speaker 1: It wasn't mad at me either.

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Speaker 2: Fortunately, Ricky mentioned he's with the USAA and he's got

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Speaker 2: an insurance policy through a USAA. When you actually look

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Speaker 2: at the consumer reports rankings, USA rates as one of

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Speaker 2: the top insurers year after year after year. So that

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Speaker 2: would seem to be a good thing.

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Speaker 1: When it comes to customer satisfaction.

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Speaker 2: Yeah, yep, but USA is really pissing Ricky off right now, Okay,

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Speaker 2: he is not happy.

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Speaker 1: Harsh words.

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Speaker 2: It was a very long email about a three dollars

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Speaker 2: fee that's charged to you if you don't sign up

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Speaker 2: for auto pay. So USAA, he said, is trying to

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Speaker 2: I think I wrote this ten he said. They're they're

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Speaker 2: charging me to give them money, And I get how

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Speaker 2: that's frustrating as a customer. And it's not even for

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Speaker 2: paying with a credit card, which would make sense, right,

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Speaker 2: there's a fee that they incur when if you pay

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Speaker 2: with a credit card, and so they passed out on

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Speaker 2: to you oftentimes. But no, no, no, it's it's not

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Speaker 2: because of that. It's just because usa A really, really

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Speaker 2: really wants Ricky and every single other person who works

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Speaker 2: there to sign up for auto pay, and if you

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Speaker 2: don't do it, they're going to charge you money. I

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Speaker 2: get why that's frustrating. What was your take?

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Speaker 1: I don't have it toake because I didn't get that email.

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Speaker 1: Oh you didn't see it? Oh was it just to me?

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Speaker 1: Maybe it was just you okay, weird.

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Speaker 3: Unless my email filter that one to span the perhaps

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Speaker 3: I would say no, I would be frustrated too.

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Speaker 1: Yeah.

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Speaker 3: I guess my question would be why does USAA want

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Speaker 3: folks on auto pay? Is it just for them to

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Speaker 3: be priced and sensitive?

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Speaker 1: That's for you?

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Speaker 2: Is that exactly what I'm thinking it must be. I mean,

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Speaker 2: obviously they're not going to come out and say it, Hey,

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Speaker 2: here's why we're doing this. But the reason I think

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Speaker 2: you're right that they're trying to get people away from

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Speaker 2: manual payments is because one they're shured of getting their

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Speaker 2: money on time, and then two they're saying, oh if

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Speaker 2: you yeah, then Ricky and everybody else is going to

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Speaker 2: be far less likely to shop around because it's just

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Speaker 2: going to get automatically taken out of that account.

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Speaker 3: Well, I guess that's I mean, yes, so I agree.

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Speaker 3: I would be frustrated if that was me as well.

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Speaker 3: But that's a good argument for just tracking or spending.

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Speaker 3: Because even though I've got certain things on auto like

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Speaker 3: This makes me think of my we pay for your

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Speaker 3: long care yard service, the guys that come cut the yard,

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Speaker 3: and they started charging to use a credit card, which

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Speaker 3: I get because that is an expense that small businesses.

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Speaker 3: That's an expense that they are like, hey, if you

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Speaker 3: want to pay the credit card. Yeah, it's tough for

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Speaker 3: us as a small business to do that. But even still,

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Speaker 3: every time I see that charge, it makes me a

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Speaker 3: little upset, and I'm just I need. What I need

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Speaker 3: to do personally, though, is sit down and maybe look

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Speaker 3: at several different businesses that I've got set up on

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Speaker 3: autopay to see how much they're charging to use a

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Speaker 3: credit card and to weigh the pros and cons as

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Speaker 3: to whether or not it's worth it. Maybe I need

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Speaker 3: to set up an AH, which is most likely what

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Speaker 3: I need to do in this case. I doubt I'm

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Speaker 3: making enough on a recurring day and day out two

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Speaker 3: percent cash back, yeah, because it's typically a three percent charge,

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Speaker 3: so losing.

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Speaker 2: A little bit on the spread. Yeah, Well, Ricky, we

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Speaker 2: feel for you, and USAA don't don't love that you

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Speaker 2: treated your customers this way when normal, I would say,

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Speaker 2: great organization. Consider getting your insurance there based on the

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Speaker 2: longevity of their positive reviews from a slew of people,

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Speaker 2: including organizations like Consumer Reports. But it's just a bummer

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Speaker 2: to hear that they're instituting totally an unnecessary fee. And

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Speaker 2: the cool thing is, or the interesting thing is that

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Speaker 2: Ricky found out is even with this autopay thing, he

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Speaker 2: can still go in there and manually pay if he

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Speaker 2: wants to not incur a charge like ahead of the

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Speaker 2: auto pay payment. Still, it's just a frustrating thing for

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Speaker 2: someone who's been a long time customer. All Right, we've

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Speaker 2: got a bunch to get to though. On the Friday flight,

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Speaker 2: let's talk about school being back, and is it back

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Speaker 2: for most people at this point? I think at this

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Speaker 2: point we're getting there. Maybe Northeast is after Labor Day.

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Speaker 1: I think typically that crazy. It's crazy. It's like a month.

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Speaker 3: Yeah, where we are, we start school very early, the

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Speaker 3: kids have been in school for like three weeks.

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Speaker 1: Yeah, it's insane, just crazy. Yeah, it really is.

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Speaker 2: Well, and anybody with kids knows that, Like summer super fun,

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Speaker 2: also crazy. Uh And and even though it's it's tough

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Speaker 2: to see summer go oh, the predictability of the school

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Speaker 2: year can be nice.

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Speaker 1: Like I was.

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Speaker 2: I was really looking forward to getting back into a rhythm.

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Speaker 2: It's nice to be back in that rhythm to it's

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Speaker 2: nice to break the rhythm, and then it's also nice

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Speaker 2: to get back to it. But school also means buying

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Speaker 2: school supplies, figuring out what to feature kids for lunch.

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Speaker 2: And on the first thing buying school supplies, I would say,

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Speaker 2: look at what you've already got on hand, Matt. We

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Speaker 2: were able to find a binder that was gently used

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Speaker 2: right from the previous year. We nice lunch lunch bags

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Speaker 2: that were and and bent go boxes or whatever to

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Speaker 2: pack their lunches in. Those are those are things that

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Speaker 2: we already had on hand. We don't have to buy

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Speaker 2: those things. We're not going.

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Speaker 1: To re up.

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Speaker 3: I will say, we had to ooh, maybe this is

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Speaker 3: here's a school supplies tip for for folks. We had

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Speaker 3: to purchase a new backpack with for one of our

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Speaker 3: kids because our backpack wasn't big enough to handle like

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Speaker 3: the big binders. Yeah, and so I'm of two minds

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Speaker 3: because that on one hand, our little dude just started

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Speaker 3: and we went ahead and bit the bullet and got

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Speaker 3: him the full sized backpack. But it's like as big

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Speaker 3: as he is, but I also know that that's gonna

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Speaker 3: last five six.

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Speaker 1: Years most likely.

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Speaker 3: But with our yeah, one of our daughters, we had

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Speaker 3: gotten her just one of the smaller ones, and it's

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Speaker 3: a perfectly fine backpack, not torn, still works. She couldn't

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Speaker 3: fit her three inch binders in there. That the school's

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Speaker 3: making her.

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Speaker 2: It's amazing how much kids are supposed tone around at

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Speaker 2: schools these days.

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Speaker 1: Just makes them stronger. Hope, so it's like rocking. But yeah, yeah,

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Speaker 1: exactly in between the water fountain and the home room.

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Speaker 2: I'm curious to hear you take on this. CNN had

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Speaker 2: a story about pawn shops and how pawn shops are

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Speaker 2: a good place to get back to school supplies.

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Speaker 3: I totally saw that, and I would have said, what

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Speaker 3: are you talking about? Musical instruments and not cross my

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Speaker 3: mind at all to look into a pawn shop for

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Speaker 3: a musical instrument.

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Speaker 1: So super smart.

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Speaker 2: So if you're her phone and your drum set there,

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Speaker 2: clarinet whatever else, oh my gosh, yeah, I think that's

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Speaker 2: a fantastic.

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Speaker 1: Or even laptops, so there's a whole lot of.

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Speaker 3: Electronics in there too. I know a lot of schools

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Speaker 3: provide oftentimes we'll provide because they had to spend all

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Speaker 3: that stemy money, all the school stemmy money on something

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Speaker 3: they can't spend it on south. So you spend it

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Speaker 3: on equipment, things that you don't have to main. You

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Speaker 3: got to maintain it, but it's not something you have

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Speaker 3: to pay out every single year.

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Speaker 2: Yeah, supplies so through stores I think are another good

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Speaker 2: place to turn, especially for clothing for your kiddos. Heck, yeah,

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Speaker 2: and food. Let's talk about food prices. The cost of

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Speaker 2: a lunch has risen. That's just inflation, right, and inflation

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Speaker 2: at the grocery store. In particular, some school districts have

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Speaker 2: been raising the cost of their school lunches, although obviously,

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Speaker 2: like needy kids are are typically eligible for free or

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Speaker 2: greatly reduced lunch prices. But the school lunch is like

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Speaker 2: I think it's three dollars and twenty five cents where

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Speaker 2: we live nice, it's more than that.

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Speaker 1: For us.

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Speaker 3: It's closer to five bucksky school lunch, which is one

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Speaker 3: of the reasons we ain't playing that game.

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Speaker 2: Well, you typically pack your kids lunch. We do the

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Speaker 2: do the same, and I think that is a way

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Speaker 2: to save some like it's it's not like you're saving

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Speaker 2: a ton. But the big thing I think in packing

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Speaker 2: your kids lunch is you're able to give them something

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Speaker 2: that is much healthier typically than what you're going to

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Speaker 2: get at the school. And Len Penzo, who who is

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Speaker 2: a personal finance writer, he does this survey every year

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Speaker 2: of the cost of a school lunch, which I don't know,

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Speaker 2: I just think it's awesome. And he found that the

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Speaker 2: peanut butter and jelly sandwich is the cheapest sandwich roughly

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Speaker 2: forty four cents per sandwich.

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Speaker 1: Created that's a deal. Yeah. I love PB and j's

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Speaker 1: me too.

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Speaker 2: And then you know those denser foods, I think they

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Speaker 2: might not be the coolest foods, right, the carrots, the apples,

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Speaker 2: the almonds, and that sandwich. I think that's going to

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Speaker 2: help people reduce the cost of their kids lunch and

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Speaker 2: not their kids get full on real actual foods, you know.

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Speaker 1: I mean, I think the.

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Speaker 2: Absolutely it's all that stuff in the most of the

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Speaker 2: center aisles.

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Speaker 3: Yeah yeah, yeah, absolutely true chips, individually packaged snacks.

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Speaker 1: That is going to ramp up the cost of those meals.

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Speaker 3: And here we go, Matt getting on a soapbox where

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Speaker 3: you shot matters as well. Aldy is a fantastic choice,

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Speaker 3: and I saw that more and more how to Money

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Speaker 3: listeners have access to an Aldi. They were set to

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Speaker 3: become the second largest grocery chain behind Walmarts over the next.

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Speaker 1: Couple of years. We're just back your chair and all

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Speaker 1: then it makes me happy. Man.

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Speaker 3: The Times they actually gave Aldi some love talking about

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Speaker 3: their rapid expansion across the US. And so if you

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Speaker 3: are listening and you're like, oh, yeah, school lunches, they've

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Speaker 3: hiked the prices there at school. I don't know if

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Speaker 3: I want to do I have what it takes to

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Speaker 3: be able to put together a school lunch. Is it

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Speaker 3: actually more affordable? Well, it will be if you start

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Speaker 3: shopping at Aldi. If that's not something that you do.

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Speaker 3: And here's some info that I not paid for my

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Speaker 3: Aldi not yeah.

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Speaker 1: Yeah.

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Speaker 3: So in the Times this they highlighted the fact that

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Speaker 3: one of the reasons Aldy is able to keep their

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Speaker 3: prices so low is because of the store brands Aldi

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Speaker 3: carries ninety percent. I was like, I didn't, I did.

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Speaker 3: It was a lot of I didn't know it was

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Speaker 3: that much, but like, the store brands are great, and

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Speaker 3: I'm gonna specifically call out here's my Aldi Cliancies. This

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Speaker 3: isn't going to be a recurring segment or anything, but

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Speaker 3: I'm gonna cut it. I'm gonna call it the all

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Speaker 3: the item of the week, which is it really should be.

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Speaker 3: And this is going to be so on brand, but

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Speaker 3: it's Warns Gruner. I tried to try to say it properly,

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Speaker 3: but that's the ald German pills. It is a good beer,

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Speaker 3: is it.

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Speaker 1: That's right?

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Speaker 3: You heard it from Joel Matt the craft beer guys.

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Speaker 3: We're not from you. I'm the one vouching for it,

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Speaker 3: but it's the solid German pills. If you're into that

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Speaker 3: stylid beer, I would recommend it super affordable.

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Speaker 2: Makes sense that the grocery chain based out of Germany

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Speaker 2: has a good Germany and it's the only place you

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Speaker 2: can buy that beer in the US.

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Speaker 1: Okay, like Aldi has a deal and so.

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Speaker 3: I think they are literally the only importer and they're

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Speaker 3: the only retailer who is selling that beer state side

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Speaker 3: Man good so now, because that's an actual brewery over

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Speaker 3: in Germany.

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Speaker 2: It's legit fascinating. Okay, speaking of your kids, right, whether

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Speaker 2: or not you say for their college, it really depends

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Speaker 2: on how much progress you've made with your own finances.

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Speaker 2: I was talking to a friend this week and he

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Speaker 2: was like, I'm not saying for my kids education, but

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Speaker 2: he had like a good reason for it. He's like,

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Speaker 2: I had to figure it out myself, and I think

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Speaker 2: that's a reasonable way to go. It wasn't because he couldn't.

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Speaker 2: It was because he didn't want to. And I think

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Speaker 2: that's totally fine. Like, more power to you to each there. Yeah,

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Speaker 2: but if you are doing a great job with your

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Speaker 2: own you know, saving and investing for your future, and

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Speaker 2: you're inclined to invest for you know, the future of

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Speaker 2: your offspring. You want them to go to school, and

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Speaker 2: you don't want them to pay well price. You want

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Speaker 2: to help them out with that. You want to grow

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Speaker 2: a nest egg. Well, knowing which five twenty nine plans

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Speaker 2: are the best can be helpful, because Matt, A lot

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Speaker 2: of people don't realize this, but you don't have to

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Speaker 2: use your state's plan. Some people think, well, I live

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Speaker 2: in Idaho, I guess I got to use Idaho's plan,

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Speaker 2: or I live in Wyoming, got to use Wyoming's plan.

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Speaker 2: And the truth is you don't have to. You can

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Speaker 2: go with any of the state plans that you want.

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Speaker 1: So.

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Speaker 2: Morning Star recently released its annual rating of all the

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Speaker 2: state plans. The top ones are Alaska, Illinois, Massachusetts, Pennsylvania,

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Speaker 2: and Utah. Utah has been like top notch for years.

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Speaker 2: They've been essentially at the forefront of low cost five

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Speaker 2: twenty nine plans, and a lot of people from other

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Speaker 2: states have opted to invest in the Utah Plan for

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Speaker 2: good reason, because it's such a good plan. I think

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Speaker 2: when you're trying to decide which five to twenty nine

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Speaker 2: plan to go with, though, if your state offers a

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Speaker 2: tax and sent and if you want to choose that one,

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Speaker 2: and if your state does not offer a state tax incentive,

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Speaker 2: like you're not getting a reduction in the income tax

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Speaker 2: that you have to pay, then op for one of

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Speaker 2: those superior plans, one of those top five plans that

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Speaker 2: morning Star recommends. I think those are they're all good.

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Speaker 2: The Utah Plan again, in particular, has been excellent for

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Speaker 2: a long time. So just know five twenty nine plans

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Speaker 2: continue to get better. Costs continue to go down in

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Speaker 2: many states, but there's still some that suck really bad.

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Speaker 2: Make sure you avoid those ones, all right.

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Speaker 3: So the journal had a fairly provocative article about specifically

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Speaker 3: about work life balance, which certainly drew my attention, Joel,

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Speaker 3: but they this author. It was an opinion piece, of course,

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Speaker 3: but this author was saying that striving for that work

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Speaker 3: life balance is going to keep you mediocre. And of

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Speaker 3: course I think he was probably trying to be divisive,

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Speaker 3: throw a little opinion grenade out there into the world.

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Speaker 3: That being said, he made some solid points, all right.

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Speaker 3: The suggestion wasn't that balance is never a good thing,

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Speaker 3: but that, let's say, if you want to rock it

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Speaker 3: closer to financial independence by your early thirties, well, having

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Speaker 3: some balance is going to be hard to come by.

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Speaker 3: Like you truly do need to frontload the sacrifice. That's

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Speaker 3: something we've discussed here on the show. The more frugal

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Speaker 3: that you are early on, the more that you can't invest,

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Speaker 3: it's going to lead to more freedom. As of course,

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Speaker 3: compounding does its thing. That being said, far be it

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Speaker 3: from the two dudes who just took summer off to

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Speaker 3: rake anyone over the coals for not working hard enough.

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Speaker 1: We have taken our fair share of breaks we summer now,

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Speaker 1: Matt do we.

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Speaker 3: I might be able to get behind that, But the

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Speaker 3: writer of this article wants to be and he wants

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Speaker 3: to be a billionaire by age thirty. It's not a

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Speaker 3: goal that most people have. It's certainly not a goal

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Speaker 3: that I have. But I just want folks to know

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Speaker 3: that what you want and what you save and invest

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Speaker 3: it is going to give yourself options down the road.

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Speaker 3: But you also need to know that there are certain things.

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Speaker 3: And this is my biggest issue too, was like I

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Speaker 3: couldn't help to think of the sacrifices he made at

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Speaker 3: an early age to be able to He had like

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Speaker 3: multiple companies that he sold for millions of dollars. Incredibly

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Speaker 3: successful takes some dedication, but success comes at a high price.

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Speaker 3: And in his like think of the toll it took

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Speaker 3: on his body. I just cringed when he was talking

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Speaker 3: about on average he would get three and a half

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Speaker 3: hours of sleep at night. He gained eighty pounds in college.

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Speaker 3: You've heard of the freshman fifteen, which is a funny thing,

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Speaker 3: funny concept to explain to my kids recently. They're like, wait, what,

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Speaker 3: and they're like, well, a lot of schools of these

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Speaker 3: lunch or meal play series. Yeah, cafeteria, and they don't

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Speaker 3: make the best decisions when it comes to what it

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Speaker 3: is that they're eating. But I think for him it

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Speaker 3: probably came because of metabolic unhealth essentially, right, like when

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Speaker 3: you gained eighty pounds, He's living off of red bulls,

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Speaker 3: and that's just physical health. Think about the social sacrifices

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Speaker 3: that he made. There's things that I did in college

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Speaker 3: where it certainly serves me. I'm thinking about getting like

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Speaker 3: one of my earlier jobs. Like I spent a lot

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Speaker 3: of time working on a website, for instance, when I

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Speaker 3: was in college, and I'm I had friends that would

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Speaker 3: kind of make fun of me for it, and that

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Speaker 3: was It was only a short period of time though

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Speaker 3: that I really immersed myself in dream weaver and I'm

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Speaker 3: like get in there, like figuring it out and having

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Speaker 3: fun with it. Again, it led to me probably landing

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Speaker 3: a job that I otherwise may may not have gotten.

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Speaker 3: But I was given a hard time, and had I

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Speaker 3: taken that a little too far, what have I probably

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Speaker 3: maybe I wouldn't have met Kate.

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Speaker 1: Yeah, my wife, who, by the way, we just celebrated

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Speaker 1: eighteen years. Yeah, cul that's man, thank you, Yeah, love you, babe.

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Speaker 3: But there are other things that you are giving up

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Speaker 3: when you go that hard, right, Like there are people

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Speaker 3: I think, who are necessary to be the extremes, to

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Speaker 3: be the outliers. This dude's got like Elon Musk level

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Speaker 3: work ethic, and those folks I think are necessary to

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Speaker 3: change the world if that's your.

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Speaker 1: Calling in life.

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Speaker 3: But for other folks, I think it can be a

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Speaker 3: lesson of oh, something beyond quote unquote normal is possible.

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Speaker 3: But just where along that spectrum do do I want

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Speaker 3: to plant my flag and say that that's what I

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Speaker 3: want to strive after.

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Speaker 2: And I recently heard the a similar fashion. The CEO

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Speaker 2: of Palenteer basically say if you want to be a

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Speaker 2: raging success, you're not gonna have any friends in your twenties.

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Speaker 2: That was essentially his message, And I'm like, how about

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Speaker 2: I not sign up for that plan then? And also

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Speaker 2: so much depends on what your definition of success is. Like,

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Speaker 2: we do think that having more financial margin, amassing some

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Speaker 2: peace out money, creating the habit of saving an investing

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Speaker 2: for your future so you don't spend every dollar that

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Speaker 2: comes in today. Yeah, that is part and parcel. That

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Speaker 2: is part of being successful, I think, because you're also

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Speaker 2: just delaying some of your gratification, which is a good

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Speaker 2: thing as a human. You're going to grow as an

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Speaker 2: individual if you do that. But the extreme ideas, which

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Speaker 2: it feels like that phases a little bit past. I'm

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Speaker 2: actually surprised to see that article in the Wall Street

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Speaker 2: Journal right now. That doesn't feel like it's part of

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Speaker 2: the ethos of our culture. But there are some people

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Speaker 2: still out there pushing like billion dollar business. If you

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Speaker 2: want to build that billion dollar business, that's ultimately what's

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Speaker 2: going to make you happy. And I think that article

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Speaker 2: and some of these other comments from quote unquote successful people,

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Speaker 2: they don't intrigue me.

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Speaker 1: They actually make me want to run away.

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Speaker 2: Because of all that it takes for them to achieve

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Speaker 2: that sort of status. It's it's completely totally not worth

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Speaker 2: it in my opinion.

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Speaker 3: Yeah, yeah, it makes me think of, honestly, the increase

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Speaker 3: that we've seen in folks who have been striving after

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Speaker 3: the digital nomad lifestyle, which we have seen increase dramatically

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Speaker 3: in particular over the past five years. Unfortunately, I feel

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Speaker 3: like a lot of folks like it seems like this mirage,

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Speaker 3: you know, like a lot of folks have essentially defined,

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Speaker 3: like you're kind of touching on, like what you define

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Speaker 3: as being successful.

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Speaker 1: And I think a lot of folks.

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Speaker 3: They saw a lot of influencers do it in the

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Speaker 3: late teens, being you know, out there traveling the world

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Speaker 3: while also operating a successful business, like.

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Speaker 1: Oh, this is the new success, It's the new.

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Speaker 3: Pinnacle of success, exactly as opposed to like what it

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Speaker 3: is that actually makes you happy. And there's a lot

439
00:18:50,080 --> 00:18:52,240
Speaker 3: of reasons that folks are kind of dropping off the

440
00:18:52,720 --> 00:18:56,160
Speaker 3: digital nomad train essentially, right, Like, you know, it's hard

441
00:18:56,200 --> 00:18:58,760
Speaker 3: to create community. You're constantly looking for Wi Fi if

442
00:18:58,760 --> 00:19:01,960
Speaker 3: you don't have some sort of internet service provider.

443
00:19:02,440 --> 00:19:04,480
Speaker 2: But I think still saw be fun for a season,

444
00:19:04,600 --> 00:19:06,920
Speaker 2: and then it stops becoming fun because living out of

445
00:19:06,920 --> 00:19:08,320
Speaker 2: a suitcase gets boring after a while.

446
00:19:08,400 --> 00:19:10,399
Speaker 3: Yeah, yeah, Oh, what I was going to say too

447
00:19:10,440 --> 00:19:14,600
Speaker 3: about early on or in response to the journal article,

448
00:19:14,600 --> 00:19:18,560
Speaker 3: you're talking about how it's surprised you that this was

449
00:19:18,600 --> 00:19:20,520
Speaker 3: something that was still being put out there. How doesn't

450
00:19:20,560 --> 00:19:22,359
Speaker 3: feel like it's part of the zeitgeist right now? It

451
00:19:22,400 --> 00:19:24,440
Speaker 3: honestly makes me worried for that guy that he has

452
00:19:24,480 --> 00:19:27,879
Speaker 3: sacrificed so much because he's still tied to these early

453
00:19:27,960 --> 00:19:30,000
Speaker 3: goals that he has set for himself. And that's what

454
00:19:30,119 --> 00:19:31,800
Speaker 3: that's In a similar way, That's how I feel about

455
00:19:31,800 --> 00:19:33,840
Speaker 3: the digital nomadism, right, Like you see it once and

456
00:19:34,440 --> 00:19:37,000
Speaker 3: you think, oh my gosh, this is everything, this is

457
00:19:37,040 --> 00:19:38,240
Speaker 3: what I'm going to go for, and you do it

458
00:19:38,240 --> 00:19:40,760
Speaker 3: for a little bit, but then you don't change your course.

459
00:19:41,280 --> 00:19:42,280
Speaker 1: And we are.

460
00:19:42,280 --> 00:19:45,359
Speaker 3: Constantly, ever evolving individuals, and I think what we need

461
00:19:45,400 --> 00:19:47,200
Speaker 3: to do is spend more time evaluating whether or not

462
00:19:47,240 --> 00:19:49,200
Speaker 3: the goals that we have set out for ourselves are

463
00:19:49,280 --> 00:19:51,240
Speaker 3: still the goals that we want to achieve, right, And

464
00:19:51,240 --> 00:19:53,600
Speaker 3: so in a similar way, that's why I think digital

465
00:19:53,600 --> 00:19:55,919
Speaker 3: nomadism has soured for a lot of folks because they

466
00:19:55,920 --> 00:19:59,719
Speaker 3: are continuing to pursue after this goal when they're realizing, well,

467
00:19:59,720 --> 00:20:02,000
Speaker 3: actually that means I don't get to spend any time

468
00:20:02,040 --> 00:20:05,160
Speaker 3: with my brother and he's got kids now, and oh

469
00:20:05,160 --> 00:20:07,639
Speaker 3: I want to spend more time with my folks. And

470
00:20:08,000 --> 00:20:11,400
Speaker 3: they're essentially married to this idea as opposed to reflecting

471
00:20:11,440 --> 00:20:14,920
Speaker 3: a little bit and saying, what do I define as

472
00:20:14,960 --> 00:20:16,120
Speaker 3: success in the stage of life.

473
00:20:16,160 --> 00:20:17,479
Speaker 1: I think more folks need to be doing that.

474
00:20:17,640 --> 00:20:21,760
Speaker 2: Yeah, agreed, And it's it's hard to It's an introspective

475
00:20:21,760 --> 00:20:23,399
Speaker 2: thing that people have to go there, and it's a

476
00:20:23,440 --> 00:20:26,359
Speaker 2: continual thing you have to revisit, and so being a

477
00:20:26,440 --> 00:20:29,440
Speaker 2: digital nomad for six months or for a year might

478
00:20:29,440 --> 00:20:31,680
Speaker 2: be awesome. But I've just seen a lot of stories

479
00:20:31,720 --> 00:20:36,520
Speaker 2: about a decline and interest and people like relationships being

480
00:20:36,560 --> 00:20:38,399
Speaker 2: blown up because they lived in a van together for

481
00:20:38,440 --> 00:20:40,880
Speaker 2: a year. And guess what that's You know, you don't

482
00:20:40,880 --> 00:20:44,240
Speaker 2: have all of those other outlets for relationship. You've got

483
00:20:44,240 --> 00:20:47,240
Speaker 2: that one person, and that can be a little stresful

484
00:20:47,240 --> 00:20:49,840
Speaker 2: of times, and even traveling after a while, traveling is awesome,

485
00:20:49,840 --> 00:20:52,200
Speaker 2: but it can get a little old, right if it's

486
00:20:52,240 --> 00:20:54,520
Speaker 2: like and it can feel if it's no longer special. Yeah,

487
00:20:54,560 --> 00:20:56,240
Speaker 2: and it can feel a little selfish two at times,

488
00:20:56,280 --> 00:21:00,919
Speaker 2: which can ruin the experience. Let's talk quickly, Matt. Articles

489
00:21:00,960 --> 00:21:03,200
Speaker 2: making gen Z. We talked about gen Z and credit

490
00:21:03,200 --> 00:21:05,720
Speaker 2: scores last week. Well, I just feel like articles making

491
00:21:05,760 --> 00:21:07,600
Speaker 2: gen Z seem like frivolous or out of touch are

492
00:21:07,680 --> 00:21:09,760
Speaker 2: kind of the norm right now. And The New York

493
00:21:09,800 --> 00:21:13,360
Speaker 2: Times was like, to hold my beer, let's I'll oblige

494
00:21:13,440 --> 00:21:16,320
Speaker 2: and make gen Z sound like idiots this week, and

495
00:21:16,600 --> 00:21:18,520
Speaker 2: so they wrote an article about how gen zs are

496
00:21:18,520 --> 00:21:21,600
Speaker 2: going over budget because they treat themselves too often and

497
00:21:21,680 --> 00:21:24,639
Speaker 2: so they're basically making the case that treat culture is

498
00:21:24,680 --> 00:21:27,639
Speaker 2: in full swing. It's something good happens at work, or

499
00:21:27,640 --> 00:21:29,600
Speaker 2: maybe even even something bad happens at work, and you

500
00:21:29,640 --> 00:21:32,600
Speaker 2: need some consolation prize the treat can be the way

501
00:21:32,600 --> 00:21:34,800
Speaker 2: to celebrate. And it seems like from what they're saying,

502
00:21:35,080 --> 00:21:37,840
Speaker 2: gen Zers are more likely to do this than others.

503
00:21:38,680 --> 00:21:40,440
Speaker 2: And I don't know if that's true. I don't know

504
00:21:40,480 --> 00:21:43,600
Speaker 2: that gen Z has particularly fallen prey to treat culture.

505
00:21:43,600 --> 00:21:46,440
Speaker 2: I do think though, that our society as a whole,

506
00:21:46,480 --> 00:21:51,320
Speaker 2: we see more emotional reactions in our spending, and it's

507
00:21:51,400 --> 00:21:53,480
Speaker 2: like it's kind of like a I deserve this sort

508
00:21:53,520 --> 00:21:56,320
Speaker 2: of mentality. But I think the thing that I didn't

509
00:21:56,320 --> 00:21:58,240
Speaker 2: love was in that article. It was like, they're willing

510
00:21:58,280 --> 00:22:01,679
Speaker 2: to blow their budget to get this treat, and you

511
00:22:01,720 --> 00:22:04,320
Speaker 2: and I were fans of spending intentionally on stuff that

512
00:22:04,359 --> 00:22:06,720
Speaker 2: you care about. Even now other people think it's ridiculous.

513
00:22:06,760 --> 00:22:10,280
Speaker 2: That's the craft beer equivalent, right, but put the blurge

514
00:22:10,280 --> 00:22:13,000
Speaker 2: in your budget, don't bust your budget for it. If

515
00:22:13,040 --> 00:22:15,919
Speaker 2: you want the expensive concert tickets because that's something you

516
00:22:15,960 --> 00:22:19,280
Speaker 2: really care about, or even just the fancy coffee, right,

517
00:22:19,359 --> 00:22:21,840
Speaker 2: then we think you should put that in your budget

518
00:22:21,840 --> 00:22:24,119
Speaker 2: and you should make it a priority. But it doesn't

519
00:22:24,200 --> 00:22:25,920
Speaker 2: hit the same way, right if you have to pay

520
00:22:25,920 --> 00:22:28,080
Speaker 2: interest on that purchase for months to come, if you

521
00:22:28,080 --> 00:22:29,440
Speaker 2: put it on the credit card and you can't pay

522
00:22:29,440 --> 00:22:31,080
Speaker 2: it off, or if you're buying out pay later because

523
00:22:31,119 --> 00:22:34,280
Speaker 2: you don't actually have the cash in the bank. And

524
00:22:34,359 --> 00:22:38,040
Speaker 2: so yeah, over spending to bring short term emotional pleasure,

525
00:22:38,440 --> 00:22:41,479
Speaker 2: that's not gonna be a winning combo in the end.

526
00:22:41,520 --> 00:22:44,200
Speaker 2: That's not a good approach to spending. I guess i'd

527
00:22:44,240 --> 00:22:46,760
Speaker 2: say something like financial security is the real treat man.

528
00:22:46,920 --> 00:22:49,440
Speaker 3: Yeah, yeah, no, I think it speaks to well. First

529
00:22:49,440 --> 00:22:52,639
Speaker 3: of all, I am proud of you for not saying

530
00:22:52,680 --> 00:22:55,600
Speaker 3: the parks and rec quote. I feel like was just

531
00:22:55,640 --> 00:22:57,000
Speaker 3: like right there on the tip of your tongue, the

532
00:22:57,119 --> 00:22:58,560
Speaker 3: entire so close, and you didn't say it.

533
00:22:58,600 --> 00:22:59,280
Speaker 1: I'm proud of you.

534
00:22:59,520 --> 00:23:01,520
Speaker 3: But it remind again kind of going back to goals,

535
00:23:01,640 --> 00:23:04,800
Speaker 3: it's just an expense that you put on repeat without

536
00:23:04,840 --> 00:23:07,399
Speaker 3: thinking about it, right, and going back to getting people

537
00:23:07,440 --> 00:23:10,600
Speaker 3: on auto pay autopay. It's when you don't reevaluate the

538
00:23:10,600 --> 00:23:12,760
Speaker 3: purchases you're making or the goals that you're striving after,

539
00:23:12,960 --> 00:23:16,200
Speaker 3: or even investing I could I could even see ooh hot,

540
00:23:16,200 --> 00:23:19,119
Speaker 3: take from that here. Auto draft from investing standpoint is

541
00:23:19,160 --> 00:23:22,280
Speaker 3: typically a great thing, and it's going to lead to

542
00:23:22,680 --> 00:23:25,600
Speaker 3: outsized results, I think over decades. But at a certain

543
00:23:25,600 --> 00:23:28,639
Speaker 3: point it's worth reevaluating and saying, Okay, is this how

544
00:23:28,720 --> 00:23:31,520
Speaker 3: much I want to continue to go towards by four

545
00:23:31,560 --> 00:23:34,000
Speaker 3: one k? Or is it time to start spending some

546
00:23:34,000 --> 00:23:36,280
Speaker 3: money into here now. It's just that when you set

547
00:23:36,640 --> 00:23:38,840
Speaker 3: and forget everything in life, I think it could lead

548
00:23:38,880 --> 00:23:41,560
Speaker 3: you somewhere that you may just may not have intentionally

549
00:23:41,600 --> 00:23:44,240
Speaker 3: driven there on your own if you had actively taken it.

550
00:23:44,320 --> 00:23:46,720
Speaker 2: And even revisiting your craft beer equivalent. You and I

551
00:23:46,760 --> 00:23:48,520
Speaker 2: have talked about how we're drinking less beer these days.

552
00:23:48,600 --> 00:23:49,879
Speaker 1: Yea, so we still love a good craft beer.

553
00:23:49,960 --> 00:23:52,000
Speaker 3: It's something we've intentionally done, but I need to think.

554
00:23:52,080 --> 00:23:53,800
Speaker 3: I think folks have picked up on that. They're like, oh, yeah,

555
00:23:53,800 --> 00:23:55,159
Speaker 3: it's not something that they do as often.

556
00:23:55,240 --> 00:23:57,560
Speaker 2: Maybe it's still a part of the ethos, yeah, and

557
00:23:57,640 --> 00:23:59,480
Speaker 2: the fun of what we get to do, but it's just,

558
00:24:00,080 --> 00:24:02,200
Speaker 2: you know, we're not doing it like we're we're twenty

559
00:24:02,200 --> 00:24:04,880
Speaker 2: two anymore. And something else I would have considered ridiculous

560
00:24:04,960 --> 00:24:07,359
Speaker 2: years ago, which is like paying money to run, Like

561
00:24:07,400 --> 00:24:08,040
Speaker 2: that's insane.

562
00:24:08,080 --> 00:24:08,600
Speaker 1: Who does that?

563
00:24:08,920 --> 00:24:10,520
Speaker 2: And now I do that? So maybe that's my craft

564
00:24:10,520 --> 00:24:12,720
Speaker 2: be equivalent? Now, how much does this race cost? Five

565
00:24:12,800 --> 00:24:15,800
Speaker 2: hundred dollars? I'll do it. One of my friends wants

566
00:24:15,840 --> 00:24:21,560
Speaker 2: to do a seven marathons on seven continents in seven days. Right,

567
00:24:21,840 --> 00:24:24,520
Speaker 2: that sounds I have no interest. That seems a bit extreme.

568
00:24:24,600 --> 00:24:26,560
Speaker 3: Yeah, all right, but we've got more to get to.

569
00:24:26,760 --> 00:24:30,280
Speaker 3: We're gonna talk about the demise of a fintech app

570
00:24:30,600 --> 00:24:32,720
Speaker 3: that was one that was promising outsized returns.

571
00:24:32,720 --> 00:24:35,000
Speaker 1: We'll get to that. We'll talk about mortgages and more

572
00:24:35,119 --> 00:24:36,199
Speaker 1: right after the break.

573
00:24:43,680 --> 00:24:45,280
Speaker 2: All right, Matt, we're back. Time to get to the

574
00:24:45,320 --> 00:24:48,800
Speaker 2: ludicrous headline of the week. This one comes from CNBC

575
00:24:49,680 --> 00:24:52,879
Speaker 2: when invest like the one percent fails, How Yield treats

576
00:24:52,920 --> 00:24:57,520
Speaker 2: real estate bets left customers with massive losses. I think, first,

577
00:24:57,600 --> 00:24:59,600
Speaker 2: I just want to say I really hate to see

578
00:24:59,640 --> 00:25:03,560
Speaker 2: individ investors lose money, And just I felt for the

579
00:25:03,600 --> 00:25:07,760
Speaker 2: people in the article who had invested with Yield Street

580
00:25:08,119 --> 00:25:10,439
Speaker 2: seeing the promised returns and they were like, yeah, this

581
00:25:10,520 --> 00:25:12,239
Speaker 2: seems like yeah, I'm trying to do the right thing

582
00:25:12,240 --> 00:25:14,639
Speaker 2: for my future. Maybe you even listen to a podcast

583
00:25:14,720 --> 00:25:16,040
Speaker 2: like how to Money, and I don't know, maybe you

584
00:25:16,040 --> 00:25:18,160
Speaker 2: only were listening with one ear because we would throw

585
00:25:18,160 --> 00:25:20,960
Speaker 2: shade at companies like this, but you're like, I'm investing

586
00:25:21,000 --> 00:25:24,280
Speaker 2: from the future. This is a great thing. We're not

587
00:25:24,320 --> 00:25:27,560
Speaker 2: talking these The people who invested in Yield treat that

588
00:25:27,680 --> 00:25:30,080
Speaker 2: this is not the upper crust who were giving money

589
00:25:30,080 --> 00:25:32,800
Speaker 2: to Bernie made Off or anything like that. It's normy

590
00:25:32,840 --> 00:25:36,200
Speaker 2: people and it just sucks to see them lose money.

591
00:25:36,200 --> 00:25:40,360
Speaker 2: So Yield Street, this company that invests in real estate,

592
00:25:40,400 --> 00:25:44,199
Speaker 2: crowdfunded real estate site, promised that real estate investing in

593
00:25:44,240 --> 00:25:47,800
Speaker 2: private credit would be democratized, and I'm so tired of

594
00:25:47,800 --> 00:25:49,760
Speaker 2: seeing that word in the money space. We're going to

595
00:25:49,800 --> 00:25:54,280
Speaker 2: democratize everything. Well, they certainly made losing money available to all.

596
00:25:54,440 --> 00:25:59,600
Speaker 2: Matt they said, we'll democratize you actually losing your life savings.

597
00:25:59,640 --> 00:26:00,080
Speaker 1: How about that.

598
00:26:00,520 --> 00:26:04,320
Speaker 2: Well, so they had thirty something opportunities available on their site,

599
00:26:04,359 --> 00:26:07,040
Speaker 2: investments that you could participate in. Four of those thirty

600
00:26:07,080 --> 00:26:11,800
Speaker 2: opportunities have been declared total losses, which means not just

601
00:26:11,800 --> 00:26:13,919
Speaker 2: that you didn't make money on your investment, but that

602
00:26:13,960 --> 00:26:16,520
Speaker 2: your capital is completely gone. So if you invested one

603
00:26:16,560 --> 00:26:19,199
Speaker 2: hundred k. Guess what, hunter k gone wiped out? Not

604
00:26:19,280 --> 00:26:21,639
Speaker 2: even the twenty percent returns weren't great. They were a

605
00:26:21,680 --> 00:26:23,800
Speaker 2: little overinflated. I got like ten percent returns. It's like

606
00:26:24,800 --> 00:26:25,440
Speaker 2: your money's gone.

607
00:26:25,600 --> 00:26:26,000
Speaker 1: Yeah.

608
00:26:26,040 --> 00:26:28,560
Speaker 2: Twenty three of those investments are on a watch list.

609
00:26:28,840 --> 00:26:31,359
Speaker 2: They potentially need to raise more money from investors to

610
00:26:31,440 --> 00:26:35,280
Speaker 2: keep those investments afloat, and for those investors it could

611
00:26:35,280 --> 00:26:38,560
Speaker 2: be throwing good money after bad. Those could also go

612
00:26:39,240 --> 00:26:42,280
Speaker 2: belly up too at some point. So we talked about

613
00:26:42,280 --> 00:26:45,760
Speaker 2: the availability the greater levels of availability of alternative assets

614
00:26:45,880 --> 00:26:49,880
Speaker 2: in retirement accounts last week. This is the perfect example

615
00:26:50,080 --> 00:26:53,000
Speaker 2: of why we prefer investing in publicly traded companies and

616
00:26:53,040 --> 00:26:56,000
Speaker 2: owning a slew of them in index funds. Ye, the

617
00:26:56,119 --> 00:26:58,399
Speaker 2: risks are just too great. Go with a tried and

618
00:26:58,480 --> 00:27:01,120
Speaker 2: true Yeah. So the Yields Street mission was to create

619
00:27:01,160 --> 00:27:02,920
Speaker 2: financial independence for millions, and.

620
00:27:02,880 --> 00:27:04,320
Speaker 1: They did just the opposite.

621
00:27:04,720 --> 00:27:07,280
Speaker 3: I'll note here though, that many private real estate funds

622
00:27:07,280 --> 00:27:10,240
Speaker 3: have had a tough time, especially for investments that were

623
00:27:10,280 --> 00:27:13,399
Speaker 3: made in the different boom towns like Austin is one

624
00:27:13,440 --> 00:27:16,160
Speaker 3: that comes to mind where prices have come down back

625
00:27:16,200 --> 00:27:19,280
Speaker 3: to earth, and the reason being many of these investment

626
00:27:19,280 --> 00:27:22,240
Speaker 3: firms had loans with short term interest rate fluctuations, making

627
00:27:22,280 --> 00:27:25,440
Speaker 3: it basically impossible for them to stay afloat as rates rose.

628
00:27:25,800 --> 00:27:28,440
Speaker 3: And then what do we see. We saw rents decline.

629
00:27:28,640 --> 00:27:30,439
Speaker 3: So these part of it because they got hit with

630
00:27:30,440 --> 00:27:34,880
Speaker 3: a double whammy. Essentially, their projections didn't involve much conservative conservatism.

631
00:27:34,880 --> 00:27:37,119
Speaker 3: They involved a lot of optimism. And so they're like, well,

632
00:27:37,160 --> 00:27:39,359
Speaker 3: if friends keep going up like this, yeah, and well

633
00:27:39,440 --> 00:27:41,800
Speaker 3: that's when mortgage rates state kind of where they are,

634
00:27:41,800 --> 00:27:44,639
Speaker 3: we're going to crush if everything is perfect. Yeah, then,

635
00:27:44,760 --> 00:27:46,760
Speaker 3: and that's what they were. That's what essentially what they

636
00:27:46,760 --> 00:27:48,840
Speaker 3: were auditioning out when it came to the different pitches

637
00:27:48,880 --> 00:27:51,639
Speaker 3: and the sales flyers and things like that. Yeah, that

638
00:27:51,720 --> 00:27:55,000
Speaker 3: rate of return, it sounded amazing. But our advice is this,

639
00:27:55,080 --> 00:27:57,640
Speaker 3: dear clear of sites that are promising that you can

640
00:27:57,640 --> 00:28:01,840
Speaker 3: invest like the one percent, and the easier availability of

641
00:28:01,880 --> 00:28:04,400
Speaker 3: these alternative investments in general is likely going to get

642
00:28:04,720 --> 00:28:07,080
Speaker 3: more investors in trouble in the coming years. It just

643
00:28:07,119 --> 00:28:08,840
Speaker 3: all comes down to how it is other spun the

644
00:28:08,880 --> 00:28:11,080
Speaker 3: different it's the new flavor of the day, basically, like

645
00:28:11,320 --> 00:28:14,399
Speaker 3: however they're going to choose to market it when instead,

646
00:28:14,440 --> 00:28:16,120
Speaker 3: we want you to stay with the tried and true

647
00:28:16,280 --> 00:28:17,440
Speaker 3: index funds.

648
00:28:17,080 --> 00:28:20,480
Speaker 2: And it can sounditicing, and some of the prospectus or

649
00:28:20,520 --> 00:28:25,080
Speaker 2: the prognostications can be Man, oh wow, I can't. I

650
00:28:25,119 --> 00:28:26,879
Speaker 2: don't know if I can beat that in this and

651
00:28:26,880 --> 00:28:28,800
Speaker 2: B five hundred fund that Matt and Joel talk about.

652
00:28:28,800 --> 00:28:32,040
Speaker 2: But you your due diligence is required at much greater

653
00:28:32,119 --> 00:28:35,000
Speaker 2: levels than it is investing in something like an index one. Now,

654
00:28:35,080 --> 00:28:38,000
Speaker 2: let's talk about another financial product. This one's making you comeback.

655
00:28:38,120 --> 00:28:42,720
Speaker 2: Adjustable rate mortgages applications have risen twenty five percent. They

656
00:28:42,760 --> 00:28:45,560
Speaker 2: make up something like one in ten mortgages that are

657
00:28:45,600 --> 00:28:48,760
Speaker 2: being taken out right now, and they're the highest they've

658
00:28:48,760 --> 00:28:51,440
Speaker 2: been since in the past few years. This is according

659
00:28:51,480 --> 00:28:55,239
Speaker 2: to the Mortgage Bankers Association. And you might, depending on

660
00:28:55,240 --> 00:28:58,000
Speaker 2: how old you are and your how much you remember

661
00:28:58,360 --> 00:29:00,680
Speaker 2: two thousand and eight, two thousand and nine, you might

662
00:29:00,680 --> 00:29:03,120
Speaker 2: see red blinking lights when you hear that you're worried

663
00:29:03,160 --> 00:29:06,040
Speaker 2: that adjustable rate mortgages are a bad product. Hey, weren't

664
00:29:06,040 --> 00:29:07,840
Speaker 2: they a big part of the reason that the Great

665
00:29:07,880 --> 00:29:10,640
Speaker 2: Recession even happened in the first place. Well, I would

666
00:29:10,640 --> 00:29:13,360
Speaker 2: say adjustable rate mortgages are not quite the same as

667
00:29:13,400 --> 00:29:15,960
Speaker 2: they were leading up to the mortgage meltdown in eight

668
00:29:17,520 --> 00:29:19,840
Speaker 2: They have fundamentally changed in a lot of ways, although

669
00:29:19,840 --> 00:29:22,240
Speaker 2: there's still a lot that you need to know before

670
00:29:22,280 --> 00:29:24,320
Speaker 2: you sign up for one. You know, most adjustable rate

671
00:29:24,400 --> 00:29:27,120
Speaker 2: mortgages come with longer inter rates these days, five seven

672
00:29:27,200 --> 00:29:30,320
Speaker 2: or ten years. You get a lower rate, and I

673
00:29:30,360 --> 00:29:32,400
Speaker 2: want to caveat that because you might not, but typically

674
00:29:32,440 --> 00:29:34,360
Speaker 2: you get a lower rate than you would on a

675
00:29:34,600 --> 00:29:36,640
Speaker 2: thirty year mortgage, which means you're going to pay down

676
00:29:36,640 --> 00:29:39,920
Speaker 2: principle faster. These mortgages, I think they have the potential

677
00:29:39,960 --> 00:29:42,640
Speaker 2: to be a decent choice, but the details are crucial.

678
00:29:43,200 --> 00:29:46,240
Speaker 2: And right now the interest rate disparity has actually shrunk,

679
00:29:46,280 --> 00:29:50,120
Speaker 2: which makes thirty loans more attractive. So it is kind

680
00:29:50,120 --> 00:29:52,239
Speaker 2: of surprising to me met that adjustable rate mortgages are

681
00:29:52,240 --> 00:29:55,520
Speaker 2: on the uptick when that kind of gap between interest

682
00:29:55,560 --> 00:29:59,960
Speaker 2: rates on arms and fixed rate mortgages is small.

683
00:30:00,160 --> 00:30:01,120
Speaker 1: I think there's two reasons.

684
00:30:01,160 --> 00:30:04,120
Speaker 3: I think folks are trying to get shave off whatever

685
00:30:04,160 --> 00:30:06,600
Speaker 3: they can off of the mortgage rate that they're getting.

686
00:30:06,880 --> 00:30:08,640
Speaker 3: But also I think some folks were thinking, well, there's

687
00:30:08,640 --> 00:30:10,320
Speaker 3: a chance that rates are going to come down, right,

688
00:30:10,320 --> 00:30:12,800
Speaker 3: like they're looking ahead to the potential rate cuts. I

689
00:30:12,840 --> 00:30:15,080
Speaker 3: think that might be leading to dwahy. It is, we're

690
00:30:15,080 --> 00:30:17,640
Speaker 3: seeing more applications four arms, but a lot of it

691
00:30:17,680 --> 00:30:19,600
Speaker 3: I think comes down to how long you're going to

692
00:30:19,640 --> 00:30:22,680
Speaker 3: be in the actual home that you're purchasing, but also

693
00:30:22,720 --> 00:30:24,800
Speaker 3: the mortgage that you're taking on as well, because the

694
00:30:24,800 --> 00:30:28,240
Speaker 3: average person stays in a home for twelve years. But

695
00:30:28,280 --> 00:30:30,680
Speaker 3: then on the mortgage side, the average person refinans is

696
00:30:30,760 --> 00:30:33,440
Speaker 3: every seven to ten years, and so a seven to

697
00:30:33,440 --> 00:30:37,120
Speaker 3: one or a ten to one ARM isn't actually as

698
00:30:37,200 --> 00:30:40,320
Speaker 3: risky a product as many have made it sound. Yes,

699
00:30:40,360 --> 00:30:43,480
Speaker 3: the interest rate can fluctuate after seven or ten years,

700
00:30:43,480 --> 00:30:45,360
Speaker 3: but are you going to be in the same home.

701
00:30:45,480 --> 00:30:46,720
Speaker 3: Are you going to have the same mortgage at that

702
00:30:46,720 --> 00:30:48,880
Speaker 3: point in time. So it's important to run the numbers,

703
00:30:49,160 --> 00:30:51,080
Speaker 3: see how much you stand to say, compare that to

704
00:30:51,280 --> 00:30:54,360
Speaker 3: a thirty thirty year fixed because if the ARM rate

705
00:30:54,440 --> 00:30:58,360
Speaker 3: isn't much better, then I would say just lock in

706
00:30:58,400 --> 00:31:00,560
Speaker 3: that thirty year and avoid the ARM all together.

707
00:31:00,680 --> 00:31:04,920
Speaker 2: Yeah, and also just know how risky you're willing to get,

708
00:31:05,240 --> 00:31:08,520
Speaker 2: because the ARM does have a slightly greater risk factor.

709
00:31:09,280 --> 00:31:11,680
Speaker 2: The shorter the term is right, and typically after that

710
00:31:11,680 --> 00:31:14,200
Speaker 2: first correction can be up to two percentage points higher

711
00:31:14,240 --> 00:31:15,960
Speaker 2: if rates have gone that much higher. But do you

712
00:31:16,200 --> 00:31:18,000
Speaker 2: think that's gonna happen. I mean that there's a lot

713
00:31:18,000 --> 00:31:19,840
Speaker 2: of variables in whether or not you choose an ARM.

714
00:31:19,880 --> 00:31:21,800
Speaker 2: But my last mortgage, for the first time ever MAT

715
00:31:22,080 --> 00:31:26,520
Speaker 2: was an adjustable rate mortgage because I significant amount. And

716
00:31:26,600 --> 00:31:28,880
Speaker 2: when I do it again, yeah, if the savings were

717
00:31:28,880 --> 00:31:31,280
Speaker 2: significant enough. And I think another part of that is

718
00:31:31,640 --> 00:31:33,520
Speaker 2: that it might allow you to save up more money

719
00:31:33,560 --> 00:31:35,840
Speaker 2: or to pay down your mortgage faster, which are other

720
00:31:35,880 --> 00:31:38,160
Speaker 2: good things. But if you're just going to like consume

721
00:31:38,240 --> 00:31:41,200
Speaker 2: with the difference, might not be the best idea. All right,

722
00:31:41,200 --> 00:31:44,200
Speaker 2: But let's talk about renting for a second matt. Older Americans,

723
00:31:44,600 --> 00:31:47,480
Speaker 2: it seems, are actually more willing to rent these days.

724
00:31:47,560 --> 00:31:50,080
Speaker 2: You often think about older Americans as they've got houses

725
00:31:50,080 --> 00:31:53,360
Speaker 2: by now they own a house, and it's the younger

726
00:31:53,360 --> 00:31:56,120
Speaker 2: folks who are out there renting those apartments and two

727
00:31:56,160 --> 00:31:59,800
Speaker 2: bedroom homes. But Americans who are fifty five and older,

728
00:32:00,280 --> 00:32:03,720
Speaker 2: they're the fastest growing rent demographic in the country. Some

729
00:32:03,840 --> 00:32:07,160
Speaker 2: people in that demographic they've found that's selling their big

730
00:32:07,200 --> 00:32:09,880
Speaker 2: house only to buy a smaller one. When downsizing, it

731
00:32:09,920 --> 00:32:13,600
Speaker 2: doesn't really make much financial sense because of elevated interest rates,

732
00:32:13,800 --> 00:32:15,640
Speaker 2: So like, yeah, why do you trade in the sweet

733
00:32:15,680 --> 00:32:19,840
Speaker 2: mortgage rate when for a much larger one? Of selling

734
00:32:19,880 --> 00:32:22,840
Speaker 2: that home and then renting instead can be really enticing

735
00:32:23,320 --> 00:32:25,800
Speaker 2: given kind of where home values are, Like you mentioned, Matt,

736
00:32:26,000 --> 00:32:28,240
Speaker 2: also just I think the costs and the headaches of

737
00:32:28,280 --> 00:32:31,560
Speaker 2: maintaining a home can as you're entering your golden ears,

738
00:32:31,600 --> 00:32:34,400
Speaker 2: be kind of annoying or frustrating. And buying a home

739
00:32:34,640 --> 00:32:36,640
Speaker 2: it's not a slam dunk smart move for everyone at

740
00:32:36,640 --> 00:32:38,760
Speaker 2: all times, and neither is renting. There's just a lot

741
00:32:38,800 --> 00:32:43,240
Speaker 2: of factors to consider, including that bigger gap between the

742
00:32:43,280 --> 00:32:45,720
Speaker 2: average monthly mortgage payment and the rent that you would

743
00:32:45,760 --> 00:32:47,760
Speaker 2: pay for a similar home. And I do think, I

744
00:32:47,800 --> 00:32:50,320
Speaker 2: actually think this is a good thing. It's interesting to see.

745
00:32:50,320 --> 00:32:52,600
Speaker 2: I think it can free up Let's say you are

746
00:32:52,720 --> 00:32:55,880
Speaker 2: one of those older Americans who is who has a

747
00:32:55,880 --> 00:32:58,400
Speaker 2: paidoff home, or who has a home that's gone up

748
00:32:58,400 --> 00:32:59,880
Speaker 2: a lot in value and a lot of you have

749
00:32:59,880 --> 00:33:02,160
Speaker 2: a lot of equity in there. Well, maybe it does

750
00:33:02,200 --> 00:33:04,000
Speaker 2: make sense to sell and to rent, and you've got

751
00:33:04,000 --> 00:33:06,800
Speaker 2: more money to do other things that you that you're

752
00:33:06,800 --> 00:33:09,040
Speaker 2: interested in doing with your life, whether it's that's true

753
00:33:09,120 --> 00:33:12,200
Speaker 2: travel or I mean, yeah, I think home ownership is

754
00:33:12,560 --> 00:33:14,560
Speaker 2: thought to be the end all, be all, and I

755
00:33:14,600 --> 00:33:16,520
Speaker 2: just think this is is kind of an interesting shift

756
00:33:16,560 --> 00:33:17,120
Speaker 2: that I welcome.

757
00:33:17,360 --> 00:33:19,800
Speaker 3: Yeah, I certainly get it though, right, because as you

758
00:33:19,840 --> 00:33:22,320
Speaker 3: are entering into those retired years, you are looking to

759
00:33:22,440 --> 00:33:25,520
Speaker 3: stabilize your expenses and you're you're looking for more knowns

760
00:33:25,560 --> 00:33:29,120
Speaker 3: as opposed to the unknowns, Like there's enough uncertainty in life, Rachel. True,

761
00:33:29,160 --> 00:33:32,520
Speaker 3: but that's one of my concerns though with renters or

762
00:33:32,560 --> 00:33:35,960
Speaker 3: with retirees being rent more likely to rent these days,

763
00:33:36,080 --> 00:33:38,840
Speaker 3: is that similar to the arm conversation, like you do

764
00:33:38,920 --> 00:33:40,600
Speaker 3: need to look off into the future a little bit

765
00:33:40,600 --> 00:33:42,560
Speaker 3: and to sort of weigh the pros and cons and

766
00:33:42,600 --> 00:33:46,000
Speaker 3: to think, Okay, what are rents likely going to do?

767
00:33:46,000 --> 00:33:48,160
Speaker 3: And it kind of depends on what you're willing to rent,

768
00:33:48,280 --> 00:33:51,840
Speaker 3: because I foresee, like we've seen softer rents, but when

769
00:33:51,880 --> 00:33:54,040
Speaker 3: it comes to single family homes that are in great

770
00:33:54,080 --> 00:33:57,480
Speaker 3: neighborhoods and desirable cities to live in that are very walkable,

771
00:33:57,720 --> 00:34:01,080
Speaker 3: like that supply isn't fluctuating, but you compare that to apartments,

772
00:34:01,120 --> 00:34:02,720
Speaker 3: and if you're willing to live in a condo or

773
00:34:02,720 --> 00:34:05,840
Speaker 3: an apartment unit or a multi family, the supply there

774
00:34:05,920 --> 00:34:09,320
Speaker 3: is much more elastic, and so you'll see more supply

775
00:34:09,360 --> 00:34:11,400
Speaker 3: come on like we have seen in some of these boomtowns.

776
00:34:11,400 --> 00:34:12,520
Speaker 3: So what does that do to rent well that it

777
00:34:12,719 --> 00:34:15,520
Speaker 3: dries it down. I think if you have that flexibility,

778
00:34:15,880 --> 00:34:18,680
Speaker 3: you're willing to pivot, you know, move over to a

779
00:34:18,719 --> 00:34:21,800
Speaker 3: new complex, a new unit, perhaps that's going to be

780
00:34:21,840 --> 00:34:25,160
Speaker 3: more affordable. Then I certainly think there's a financial advantage there.

781
00:34:25,160 --> 00:34:29,799
Speaker 3: But when it comes to yeah, I still see ownership

782
00:34:29,880 --> 00:34:32,560
Speaker 3: being great for some of those single family homes. If

783
00:34:32,600 --> 00:34:35,000
Speaker 3: you have a very particular spot in mind, like if

784
00:34:35,040 --> 00:34:37,400
Speaker 3: you pick picture of your retired years to be a

785
00:34:37,400 --> 00:34:40,160
Speaker 3: certain way for it to have a certain flavor, I

786
00:34:40,200 --> 00:34:43,040
Speaker 3: could see I can certainly see purchasing making the lessense.

787
00:34:43,120 --> 00:34:45,319
Speaker 3: And so much depends on the way you want to

788
00:34:45,360 --> 00:34:47,719
Speaker 3: live your retired years, right, And if you were like,

789
00:34:47,840 --> 00:34:50,040
Speaker 3: actually we want to downsize with a smaller home base

790
00:34:50,120 --> 00:34:52,440
Speaker 3: while renting, look at the disparity renting, there's a lot

791
00:34:52,480 --> 00:34:54,200
Speaker 3: more sense and we're going to be gone half the

792
00:34:54,239 --> 00:34:54,839
Speaker 3: time in if.

793
00:34:54,760 --> 00:34:56,600
Speaker 1: That allows you to in fact do a whole lot

794
00:34:56,640 --> 00:34:57,359
Speaker 1: of traveling. Yeah.

795
00:34:57,640 --> 00:34:59,799
Speaker 3: Yeah, a one hand, I pictured retired couple who's like

796
00:34:59,840 --> 00:35:02,160
Speaker 3: do and all the travel that they never did in

797
00:35:02,160 --> 00:35:03,880
Speaker 3: their earlier years, and they're just like doing years and

798
00:35:03,960 --> 00:35:05,920
Speaker 3: years of traveling. On the other hand, I see like

799
00:35:05,960 --> 00:35:08,839
Speaker 3: an older couple who's just like walking around the neighborhoods,

800
00:35:09,040 --> 00:35:11,120
Speaker 3: you know, like hanging out with like their younger neighbors,

801
00:35:11,160 --> 00:35:13,160
Speaker 3: being a part of a thriving community.

802
00:35:13,600 --> 00:35:15,800
Speaker 1: And I think those are the kind of pros and

803
00:35:15,880 --> 00:35:16,640
Speaker 1: cons you got away.

804
00:35:16,719 --> 00:35:18,960
Speaker 2: And it can be jarring angel to leave a home

805
00:35:18,960 --> 00:35:20,800
Speaker 2: that you've been in for years and decades.

806
00:35:20,840 --> 00:35:22,400
Speaker 3: Sure, so I get how you got to factor that

807
00:35:22,440 --> 00:35:25,280
Speaker 3: into Hey, So, speaking of buying a home, lease purchase

808
00:35:25,320 --> 00:35:29,440
Speaker 3: agreements are actually on the rise. As well as mortgage rates,

809
00:35:29,480 --> 00:35:32,560
Speaker 3: home prices have stayed elevated. Borrowers are finding that they

810
00:35:32,680 --> 00:35:35,239
Speaker 3: might not qualify for a loan on the home or

811
00:35:35,280 --> 00:35:38,080
Speaker 3: their dreams, which is in turn leading to a higher

812
00:35:38,160 --> 00:35:42,160
Speaker 3: number of lease purchase agreements. This is according to Pew

813
00:35:42,560 --> 00:35:46,839
Speaker 3: Pew Research, and at least agreements they sound awesome, right, yeah,

814
00:35:47,000 --> 00:35:48,839
Speaker 3: rit the place you want to buy while you are

815
00:35:48,840 --> 00:35:51,759
Speaker 3: building up your nest egg, you'll have the option to

816
00:35:51,880 --> 00:35:53,080
Speaker 3: buy at a later date.

817
00:35:53,120 --> 00:35:55,279
Speaker 2: But until then, it's like getting your foot in the door,

818
00:35:55,320 --> 00:35:57,799
Speaker 2: which sounds nice. Yeah, it's like, oh, I know, I've

819
00:35:57,840 --> 00:36:00,840
Speaker 2: got it's the inside track. The problem is the problem

820
00:36:01,800 --> 00:36:05,000
Speaker 2: on your foot. Here's the deal. Even while you are renting,

821
00:36:05,160 --> 00:36:08,680
Speaker 2: oftentimes you shoulder the responsibilities of a homeowner. You are

822
00:36:08,719 --> 00:36:11,120
Speaker 2: paying the property taxes, and if you don't pay your

823
00:36:11,160 --> 00:36:14,160
Speaker 2: rent on time, it can derail your chances at buying

824
00:36:14,200 --> 00:36:16,680
Speaker 2: the place. And on top of that, there is a

825
00:36:16,800 --> 00:36:20,879
Speaker 2: legal uncertainty too. Almost no states have laws for these

826
00:36:20,880 --> 00:36:24,919
Speaker 2: sorts of agreements. It's like a it's a legal gray zone.

827
00:36:24,920 --> 00:36:27,920
Speaker 2: It's like the legal framework isn't there. And so this

828
00:36:28,040 --> 00:36:30,279
Speaker 2: might sound like a good option if you are a

829
00:36:30,320 --> 00:36:33,160
Speaker 2: perpetual renter who really wants to own a home, But

830
00:36:33,239 --> 00:36:35,480
Speaker 2: in my opinion, it's not and I would stay. I

831
00:36:35,520 --> 00:36:37,880
Speaker 2: wouldn't do this. I think if you if as a

832
00:36:37,960 --> 00:36:42,200
Speaker 2: landlord it's mostly upside right, But as a tenant who

833
00:36:42,320 --> 00:36:42,759
Speaker 2: feels like.

834
00:36:42,680 --> 00:36:44,640
Speaker 1: There's too many downsides, it feels like there's way.

835
00:36:44,520 --> 00:36:47,880
Speaker 2: Too many potential gotchas. And if you have a nice

836
00:36:47,960 --> 00:36:50,239
Speaker 2: landlord who is interested in selling that you might be

837
00:36:50,239 --> 00:36:51,920
Speaker 2: able to find an amicable agreement.

838
00:36:51,960 --> 00:36:54,240
Speaker 3: But there's I think that's a cleaner way of approaching

839
00:36:54,239 --> 00:36:56,080
Speaker 3: it too. Right, Like, if it's a home and you

840
00:36:56,160 --> 00:36:58,000
Speaker 3: have been renting there for a while and you're like, hey,

841
00:36:58,000 --> 00:36:59,920
Speaker 3: would you ever consider find out if they would be

842
00:37:00,080 --> 00:37:02,640
Speaker 3: open to possibly selling it, And then on top of that, hey,

843
00:37:02,680 --> 00:37:04,279
Speaker 3: maybe you can find a price that you agree to

844
00:37:04,920 --> 00:37:07,360
Speaker 3: off market. You're saving costs there, so they're getting a

845
00:37:07,360 --> 00:37:10,279
Speaker 3: little bit more, you're paying less, and then you just

846
00:37:10,400 --> 00:37:11,520
Speaker 3: find a closing attorney.

847
00:37:11,560 --> 00:37:13,880
Speaker 2: You just have to be so careful about the terms.

848
00:37:13,920 --> 00:37:16,000
Speaker 2: And the truth is, some of those contracts I'm blown

849
00:37:16,040 --> 00:37:18,840
Speaker 2: up in people's face because they said, oh, if you

850
00:37:18,880 --> 00:37:22,000
Speaker 2: pay rent one day, even one day late, then the

851
00:37:22,040 --> 00:37:24,280
Speaker 2: whole lease purchis agreement is gone. And you've been paying

852
00:37:24,320 --> 00:37:27,840
Speaker 2: extra extra every single month as part of that down payment.

853
00:37:27,880 --> 00:37:31,560
Speaker 2: That the privilege, that's right, Yeah, And so then you're like, oh, man,

854
00:37:31,760 --> 00:37:34,919
Speaker 2: just like literally one tiny, tiny, tiny mistake and now

855
00:37:34,960 --> 00:37:36,399
Speaker 2: I don't get the home I was wanted.

856
00:37:36,400 --> 00:37:37,280
Speaker 1: And that's a big problem.

857
00:37:37,400 --> 00:37:39,879
Speaker 2: So when there's no legal recourse for you, that makes

858
00:37:39,920 --> 00:37:44,120
Speaker 2: these things incredibly risky. So yeah, yeah, you could talk

859
00:37:44,160 --> 00:37:46,279
Speaker 2: to your landlord about buying the place, that's one thing,

860
00:37:46,520 --> 00:37:48,160
Speaker 2: But entering into a least purchase agreements.

861
00:37:48,200 --> 00:37:51,719
Speaker 3: All these purchase agreements Me No, like yeah, agreed. Well

862
00:37:51,719 --> 00:37:54,040
Speaker 3: that's gonna be it. Then, for this Friday flight, we

863
00:37:54,080 --> 00:37:56,359
Speaker 3: hope everyone has a fantastic weekend. We'll see you back

864
00:37:56,360 --> 00:37:59,320
Speaker 3: here on Monday with a fresh Ask how to Money episode.

865
00:37:59,760 --> 00:38:03,200
Speaker 3: But it's now time for me to say best friends out.

866
00:38:03,480 --> 00:38:05,080
Speaker 1: I'll say it too, best friends Out.