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

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Speaker 1: Today we're answering your listener questions.

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Speaker 2: You know, a buddy, and we hope everyone had a

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Speaker 2: fantastic weekend.

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Speaker 1: We're glad to see you back here, back in the

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Speaker 1: podcast here, back into the groove. It's Monday morning. You

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Speaker 1: got stuff to do, you got podcasts to listen to,

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Speaker 1: so we're glad to see you. They don't know this.

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Speaker 1: We're monitoring all their movements. Yeah, it's like her, she

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Speaker 1: I forget. I never actually watched the movie with the

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Speaker 1: phone I go, and I was like, that'll never happen.

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Speaker 1: The AI girlfriends, it's happening. Little did you know, Joel?

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Speaker 1: If that's the dystopian reality we now live in. Not

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Speaker 1: in my life, but it's some people's life.

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Speaker 2: So we are going to take listener questions. The listeners

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Speaker 2: asking about breaking the paycheck to paycheck cycle. She's specifically

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Speaker 2: wondering if professional help is in order. Another listener is

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Speaker 2: asking about our take on money market accounts. He's looking

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Speaker 2: to park some down payment money, and we'll discuss student loans.

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Speaker 2: The best way to proceed, whether or not forgiveness is

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Speaker 2: actually something that this listener can count on. We'll get

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Speaker 2: to that more on today's Ask how many episodes, buddy.

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Speaker 1: This ain't that blanket forgiveness?

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Speaker 3: Oh?

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Speaker 1: Is that going to come to pass? I think everybody

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Speaker 1: knows that's not going to happen. Happening, Yeah, that's yeah.

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Speaker 1: But this is kind of more specified forgiveness that has

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Speaker 1: been around for a long time. Is that going to remain?

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Speaker 1: And other questions? Matt, real quick, before we get to

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Speaker 1: all of these great questions, just one idea for people.

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Speaker 1: It's interesting, Actually, Americans used to move in a whole

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Speaker 1: lot more numbers. We should just be more willing to

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Speaker 1: uproot go somewhere for opportunity. And I guess that's actually

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Speaker 1: maybe a little bit less necessary because of work from home. Right,

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Speaker 1: So it has it declined? It has declined. Yeah, just

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Speaker 1: people are ready to take a look at the latest

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Speaker 1: BLS statistics and charts. But my sister, my sister, my

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Speaker 1: little sister, is an exception to this rule. She and

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Speaker 1: her husband are moving to a new city for a

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Speaker 1: job offer, and one of the first things that came

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Speaker 1: out of their mouth that they were excited about the job,

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Speaker 1: They're excited about the town. But after that, one of

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Speaker 1: the first things they mentioned was, oh my gosh, you

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Speaker 1: know how much money we're gonna save by moving there.

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Speaker 1: And because it's a smaller town they live in kind

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Speaker 1: of the heart of a big city right now, very

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Speaker 1: expensive to live there from a tax perspective, from a

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Speaker 1: rent perspective, even just from an activity perspective, like everything

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Speaker 1: costs more where they live than where they're moving too.

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Speaker 1: Nice and so I just think secondary cities in particular

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Speaker 1: can offer a lot of those job opportunities, but then

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Speaker 1: the living expenses go down considerably. He was able to

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Speaker 1: negotiate essentially to get the same exact pay for the

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Speaker 1: job he's moving too. She's able to keep her job

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Speaker 1: sort of, so he didn't. So they didn't get a

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Speaker 1: pay increase. They're able to maintain it, but effectively they

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Speaker 1: got to It feels a raise, like a massive pay

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Speaker 1: bomp because the cost of everything else is going down.

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Speaker 1: I mean, I'm assuming they're moving because they're looking to

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Speaker 1: switch things up a little bit. Yeah, sometimes you just

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Speaker 1: want to check out a new place. Sure, he knows

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Speaker 1: it's a very different town than where they currently are,

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Speaker 1: so yeah, but they were some more natural outdoor sort

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Speaker 1: of attraction as well. For sure, and they I think

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Speaker 1: they were estimating they'd be able to save six hundred

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Speaker 1: dollars a month in rent to rent something similar where

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Speaker 1: they're moving to, which is kind of crazy when you

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Speaker 1: think about it. That's like over seven thousand dollars a

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Speaker 1: year back in their pocket. So think of it like that,

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Speaker 1: it's like an untaxed rays of that amount. That's pretty significant.

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Speaker 1: A move in the frugal direction for sure. I like it,

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Speaker 1: and I also like the beer that we're going to

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Speaker 1: enjoy today. Well, there goes my review from the end

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Speaker 1: of the episode. Now we are going to enjoy a Spring,

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Speaker 1: which is a beer by Creature Comforts and uh not

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Speaker 1: the Spring that is my favorite local restaurant, but Spring

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Speaker 1: the beer and I will share our thoughts at the end. Yeah,

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Speaker 1: Michelin Award winning local restaurant. Correct, we've been once since

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Speaker 1: they won that Stark and prices go up pafterwards. Yeah

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Speaker 1: you better believe, really and rightly. So it's an amazing place. Yeah,

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Speaker 1: I'm gonna guess supplying a man Baby, prices went up

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Speaker 1: around twenty to thirty percent for the exact same dishes,

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Speaker 1: and they weren't pompous or show voting, but you could

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Speaker 1: kind of look off down the side towards the kitchen.

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Speaker 1: You kind of see the Michelin Star plaque kind of

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Speaker 1: like subtly placed with in view of the diners, but

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Speaker 1: not like it would have been I would say, lacking

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Speaker 1: taste if they stuck at like on its own little

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Speaker 1: pedestal in the middle. I would be interested to know,

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Speaker 1: random before we get the list of questions. I'd be

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Speaker 1: interested to know for restaurants who win a Michelin Star

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Speaker 1: if that's the norm. I gotta imagine is, Yeah, there's

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Speaker 1: enough foodies who follow Michelin Star awards and they say, oh,

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Speaker 1: now I want to go to that restaurant, and it

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Speaker 1: just increases bookings. More demand means hey, we're gonna have

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Speaker 1: to raise rates to just kind of create equilibrium here.

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Speaker 2: Yeah, there's been articles written about how winning these awards

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Speaker 2: just completely ruins the restaurant because of the different expectations

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Speaker 2: and essentially you have to you do have to cater

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Speaker 2: to a different crowd, a different kind of folks who

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Speaker 2: are looking for maybe a heightened experience, and then all

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Speaker 2: the regulars who.

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Speaker 1: Were there the whole time that made it. The help.

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Speaker 1: I don't know, if you help them make it, but

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Speaker 1: you help them keep the doors open. You aren't back

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Speaker 1: to the amount of money, No, Chef, I will say

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Speaker 1: the amount of money that we spent there. I felt

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Speaker 1: like we single handedly did it. Joel, Okay, no, not quite.

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Speaker 1: All right, let's get to listener questions, and if you

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Speaker 1: have a money question, we want to hear from you.

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Speaker 1: The funkier the better. You can just yeah, literally record

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Speaker 1: a voice memo on the voicemo app of your phone.

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Speaker 1: Say hey, I'm Denise from San Diego, and then your question.

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Speaker 1: And if you really are Denise from San Diego, we

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Speaker 1: definitely want to hear from you. But whatever your money

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Speaker 1: keeps looking at her phone and like they really are

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Speaker 1: watching it. How did they actually know they I thought

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Speaker 1: they were joking. So if you want the directions, got

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Speaker 1: to how to money dot com slash ask but it's

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Speaker 1: super simple. We look forward to hearing yours and taking it.

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Speaker 1: Next week on the show, Matt, let's get to a

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Speaker 1: question about living paycheck to paycheck and how to escape

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Speaker 1: that cycle.

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Speaker 4: I'm ann and I'm in California. I'm a single woman,

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Speaker 4: sixty one years old. I believe that I'm in the

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Speaker 4: lower end of middle class lately, I find that I'm.

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Speaker 5: Living paycheck to paycheck. I looked into using.

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Speaker 4: A financial planner, however, I found that they really only

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Speaker 4: work with investments, and I don't have any investments. What

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Speaker 4: I'd like is a financial coach, someone who can help

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Speaker 4: me with budgeting and looking at my situation and then

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Speaker 4: making suggestions. I'd like to meet with a person for

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Speaker 4: a low cost. I'm not interested in an online worksheet

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Speaker 4: type program.

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Speaker 5: My question is, is there such a person who can

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Speaker 5: do this? Thank you, bye bye.

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Speaker 1: Oh Joe. What do you think about ann hating on

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Speaker 1: all the worksheets and the different programs out there that

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Speaker 1: folks are well, folks are selling or sometimes giving away.

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Speaker 1: We've got worksheets on our website can give away. I

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Speaker 1: think those can be really helpful. But I also get

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Speaker 1: I get what she's saying, the desire to have a

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Speaker 1: one on one relationship with a human who can help

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Speaker 1: you out through this. Like that makes sense to me.

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Speaker 1: I think totally that's how I work best.

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Speaker 2: But a real life person, Yeah, I don't want to

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Speaker 2: talk to no AI Chat Bob, give me a real

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Speaker 2: person with issues.

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Speaker 1: I was literally talking to friend the other day and

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Speaker 1: he was like, you guys should totally have an AI chatbot.

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Speaker 1: You have all the podcasts, all the content on your website.

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Speaker 1: You could feed it in there and it could spit

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Speaker 1: out Matt and Joel answers right and left to people.

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Speaker 1: And I don't know, man, I'm just kind of trying

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Speaker 1: to avoid that AI game as much as possible. That

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Speaker 1: was one of the first questions. So, man, we're really

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Speaker 1: going off the rails here. But back when we were

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Speaker 1: talking to somebody we had that we had hired to

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Speaker 1: do some work on the site, and one of our

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Speaker 1: questions was about AI. We're talking about these large language models.

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Speaker 1: Can we create our own chatbot, train it on our

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Speaker 1: episodes and essentially have answers in our voice the way

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Speaker 1: that we would talk about it. It's a unique proposition

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Speaker 1: is but he's just like, we're not quite there yet.

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Speaker 1: Maybe we are now because that wasn't again the rate

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Speaker 1: at which things go. Yeah, it might actually be a reality.

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Speaker 1: But and I've got to say, your desire here to

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Speaker 1: avoid a financial advisor and instead to work with a

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Speaker 1: money coach specifically is brilliant. Most folks, they tend to

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Speaker 1: think of advisors as the only game in town when

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Speaker 1: it comes to help with their money. But the average

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Speaker 1: advisor they don't do a whole lot with how budgets

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Speaker 1: and holding people accountable, So your desire to find like

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Speaker 1: a coach is totally.

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Speaker 2: It makes a ton of sense. Advisors are going to

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Speaker 2: be more interested in helping you to invest, and then

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Speaker 2: the vast majority like they're not even gonna want to

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Speaker 2: work with you unless you've got like six figures of

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Speaker 2: investable assets to your name either. This is also why

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Speaker 2: rebo advisors they found a nice niche as well for

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Speaker 2: them to people who don't have a ton of money,

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Speaker 2: but they are looking for some of that additional help,

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Speaker 2: not unlike an AI chat bogie.

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Speaker 1: Kind of in between step there for a lot of

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Speaker 1: newbi investors.

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Speaker 2: Totally, and plus you would likely pay way too much

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Speaker 2: money if you ended up going with a financial advisor

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Speaker 2: as well, so a budget coach. I think that makes

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Speaker 2: a whole lot more sense.

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Speaker 1: Yeah. The cheapest model we know of essentially to get

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Speaker 1: a financial advisor on your team to help you out

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Speaker 1: basically is a minimum one hundred and fifty dollars per

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Speaker 1: hour long session, and that's through the website Hello Nectreen.

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Speaker 1: But even they it used to be flat fee hundred

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Speaker 1: and fifty. Now it's flat fee one fifty to three hundred,

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Speaker 1: and so the price to hire a financial advisor is

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Speaker 1: in credibly steep. We've had budget coaches Matt on the

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Speaker 1: show before, and you know, one of those folks or

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Speaker 1: one of those types of folks is likely the right

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Speaker 1: choice for you. An it's just it's such a great

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Speaker 1: segment of the finance base and it doesn't get enough love.

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Speaker 1: Like nobody talks about budget coaches or money coaches. These

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Speaker 1: folks they offer, they're often offering services because they've had

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Speaker 1: a meaningful financial awakening themselves. They've had to go through

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Speaker 1: a debt payoff journey that was a multi year long slog.

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Speaker 1: They learned a whole lot through trial and error in

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Speaker 1: the DIY process, and so they've also, on top of that,

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Speaker 1: been through the emotional roller coaster right that can be

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Speaker 1: and often is living to pay paycheck to paycheck. They

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Speaker 1: know the right questions to ask and that often allows

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Speaker 1: them to better speak to how to turn the ship around,

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Speaker 1: right to speak into your life about what's going on

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Speaker 1: because of what they've gone through themselves. And typically they

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Speaker 1: get paid yeah, like an hourly rate or they charge

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Speaker 1: for a specific number of sessions. I don't know, maybe

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Speaker 1: like three hundred and fifty bucks for four sessions something

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Speaker 1: like that. But I do think that budget coach. One

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Speaker 1: it's going to be cheaper, and two it's going to

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Speaker 1: be more highly targeted to what you're going through. It's

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Speaker 1: going to be more relevant. A couple of specific folks

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Speaker 1: we've had on the show, or even ones that we

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Speaker 1: haven't but that we can recommend. Erica Jung she's been

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Speaker 1: on the show. Elena Fengal she's also been on the show.

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Speaker 1: And then this couple who runs a podcast called The

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Speaker 1: Price of Avocado Toast. There are awesome folks and they're

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Speaker 1: also financial coaches on the side too, So.

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Speaker 2: That being said, and doesn't have a ton of money,

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Speaker 2: so I also want to point her towards free and

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Speaker 2: cheap resources from some different nonprofits. In particular, I'm thinking

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Speaker 2: of MMI, which is Money Management International, which by the way,

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Speaker 2: sounds super fancy and like wealth advisory, but they're not.

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Speaker 2: They're there to help folks deal with that and turn

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Speaker 2: their finances around. Also, National Foundation for Credit Counseling. These

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Speaker 2: are both excellent resources in order for you to gain credit,

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Speaker 2: to gain some budget counseling. You can get one on

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Speaker 2: one advice from a certified counselor there with a organizations,

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Speaker 2: and they'll typically help you to create a personalized plan

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Speaker 2: kind of like like if you're looking for a roadmap

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Speaker 2: for moving forward. If you know you find yourself kind

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Speaker 2: of spinning your tires a little bit, perhaps this is

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Speaker 2: going to allow you to gain some of that traction.

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Speaker 2: And I'm not sure how much debt you specifically have,

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Speaker 2: but I think they can help you to create a

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Speaker 2: debt management plan to get rid of it more quickly.

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Speaker 2: But don't trust some of the for profit companies who

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Speaker 2: make these massive promises and end up under delivering. I

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Speaker 2: will also say a money coach is no substitute for

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Speaker 2: you learning some of this yourself. And so I'm talking

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Speaker 2: about a DIY education. It makes me think of someone

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Speaker 2: who's interested in becoming a real estate investor who opts to,

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Speaker 2: let's say, hire a property manager. Well, if that were

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Speaker 2: to be you, like you wouldn't even know the important

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Speaker 2: questions to ask in order to hire a good property manager. Yeah,

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Speaker 2: because you've never been exposed to this at all. And

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Speaker 2: so I think listening to podcasts like this, reading books

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Speaker 2: this is still crucial. We've actually got a link to

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Speaker 2: some different resources up on the website to where I

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Speaker 2: don't know. I think that can help you to get

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Speaker 2: you your journey started. One other free resource too. Don't

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Speaker 2: underestimate the power of community and friendship. I think the

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Speaker 2: ability to link up with somebody or to man. This

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Speaker 2: isn't something that we said in a long time, but

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Speaker 2: one of the goals for our show is for money

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Speaker 2: personal finances to not be taboo, and when it is,

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Speaker 2: people are afraid to talk about it. And when it's not,

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Speaker 2: it's something that you talk about, you engage with, you

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Speaker 2: challenge each other, you hold each other accountable, and it

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Speaker 2: allows you to see incredible progress, I think on a

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Speaker 2: very truncated timeline. So not to mention this is something

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Speaker 2: we've talked about recently, but the fact that relationships are

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Speaker 2: always key to long lasting happiness, and so you're kind

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Speaker 2: of like doing like a two for one here by

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Speaker 2: talking to your friends about personal finances. It should be

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Speaker 2: something we engage with and ask each other questions about,

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Speaker 2: as opposed to it never coming up.

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Speaker 1: I think there's also a lot of shame and for

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Speaker 1: a lot of people when it comes to their personal finances.

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Speaker 1: And the more we can kind of normalize talking about it,

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Speaker 1: the more we can kind of take some of that

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Speaker 1: shame away, bring out those mistakes into the light, because

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Speaker 1: guess what, everybody has made similar mistakes, right, So where

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Speaker 1: Anne is, it's not uncommon, and there's also nothing to

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Speaker 1: feel ashamed about. There's also a way forward. What it

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Speaker 1: comes down to Anne to get this ship right back

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Speaker 1: on the right path. It's going to take changing some

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Speaker 1: habits right, feeling some pain along the way as well. Right,

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Speaker 1: you might need to go on a bare bones budget,

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Speaker 1: which we have articles about on our website if you

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Speaker 1: want to check it out for a few months, to

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Speaker 1: gain some savings, to gain some stability. And I think

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Speaker 1: it's important to mention that for most folks getting into

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Speaker 1: a financial hole where they're living paycheck to paycheck or

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Speaker 1: where they're in debt that they didn't see coming that

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Speaker 1: they weren't planning on taking on, well, it often took.

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Speaker 1: It was little things over the course of many many months,

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Speaker 1: if not many many years, and then once the light

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Speaker 1: dawns on you, Hey, I'm ready to make a change.

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Speaker 1: A lot of people think, all, how am I going

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Speaker 1: to get out of this in the next three months,

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Speaker 1: and it's just it's just not possible. Right, So you

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Speaker 1: also have to have a realistic time frame and expectation

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Speaker 1: about how long it's going to take to turn this

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Speaker 1: thing around. And I think there are times to hire

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Speaker 1: an expert, right, And the information, the accountability you receive,

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Speaker 1: it certainly might be worth the money that you put

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Speaker 1: out there, the money you're forking over, you might even

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Speaker 1: make progress more quickly. Right. Also, you mentioned you didn't

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Speaker 1: want spreadsheets, Well what about software? Software is something that's

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Speaker 1: at least worth bringing into this conversation wine app which

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Speaker 1: is short for you Need a budget and Monarch. Those

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Speaker 1: are really great software programs. It's not kind of the

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Speaker 1: worksheet you mentioned, but when you kind of put all

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Speaker 1: of your financial information in one place, they can help

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Speaker 1: you think through where your money's going.

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Speaker 6: You know.

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Speaker 1: Monarch even pops up, Hey, you get this recurring subscription,

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Speaker 1: you're about to pay for it, and you'd be like,

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Speaker 1: wait a second, I forgot about that, and you can

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Speaker 1: go cancel it really quickly. Just some of those benefits

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Speaker 1: could far exceed the costs with a financial software. With

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Speaker 1: a budgeting software like WINABB or a Monarch it's not

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Speaker 1: the same thing as hiring an individual, but it could

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Speaker 1: be I think a decent middle ground solution. Yeah, and

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Speaker 1: I think that those are in a completely different class

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Speaker 1: and different category than worksheets, which in my mind, there's

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Speaker 1: a whole lot of like thinking and dwelling and trying

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Speaker 1: to like discovery that typically takes place with worksheets, but

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Speaker 1: with software like these are tools that allow you to

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Speaker 1: immediately take action, and that's what's so great about that. Also,

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Speaker 1: like you mentioned too that you don't have any investments,

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Speaker 1: and I want to point out that, yes, you need

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Speaker 1: to get your financial footing in a good place, but

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Speaker 1: beyond that, I want you to set your sites a

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Speaker 1: little bit higher to not just living, not living paycheck

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Speaker 1: to paycheck.

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Speaker 2: But you know, starting with the money gears, making sure

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Speaker 2: you've got a basic emergency fund set up. Wish do

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Speaker 2: you remember the amount to the new.

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Speaker 1: Updated inflation in like thirty five fifty thirty forty five,

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Speaker 1: okay thirty so three thousand, forty five dollars that is

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Speaker 1: the new inflation adjusted emergency fund. Once you've got that

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Speaker 1: in place, though, start I want you to start thinking

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Speaker 1: about yourself as an investor, because you still got some

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Speaker 1: time to be able to make sure that you are

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Speaker 1: going to be in a more comfortable position when the

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Speaker 1: time comes for retirement. But Joe, we got more to

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Speaker 1: get to you. We're gonna talk about old trucks, student loans,

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Speaker 1: that and more. Right after this, Matt, the tz made

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Speaker 1: before the break had me thinking of a country song.

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Speaker 1: It's like my old down broken trucks, other country songs

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Speaker 1: as the woman who left me about student loans, though

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Speaker 1: there should be at this point, there should be. They've

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Speaker 1: been pretty that truly would be the status in existence.

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Speaker 1: All right, Let's take this question from listener Phil Matt.

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Speaker 1: He has a question about saving for his down payment,

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Speaker 1: and he highlights an account you and I don't talk about,

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Speaker 1: maybe as much as he'd like him.

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Speaker 3: Matt and Joel, I'm in the process of saving for

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Speaker 3: a down payment for a house, and I've been advised

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Speaker 3: to put some of my money into a money market account.

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Speaker 3: I don't hear you guys talk a lot about these,

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Speaker 3: and I was curious if it's something you don't recommend,

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Speaker 3: or if you do recommend, and why or why not.

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Speaker 3: I have looked online for some information, but haven't found

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Speaker 3: a lot of information about money markets. The account that

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Speaker 3: I was recommended was pco xx and its average about

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Speaker 3: a five and a half percent return this last year

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Speaker 3: and the year before was about six and a half percent,

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Speaker 3: and I assume with the interest rates going down, it'll

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Speaker 3: lower a little bit this year. That being said, I

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Speaker 3: have a high interest checking account with Lake Michigan Credit

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Speaker 3: Union and it offers three percent apy but only up

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Speaker 3: to fifteen K. So since I'm over that in saving

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Speaker 3: for a down payment on my house, I'm looking for

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Speaker 3: a single place to put.

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Speaker 1: All my money.

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Speaker 3: I did look it up with Dave Ramsey and he

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Speaker 3: suggests a CD over a money market account, but didn't

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Speaker 3: really explain why other than he said the rates were better. However,

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Speaker 3: I don't see that the rates are better in CDs

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Speaker 3: right now. Just for reference sake, I'm planning to purchase

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Speaker 3: a house in twelve to eighteen months, so I'm looking

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Speaker 3: to have this money available and liquid easily, and from

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Speaker 3: what I understand, money market accounts you can get the

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Speaker 3: money back relatively quickly when you need it. Thanks for

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Speaker 3: your help, Dociate everything, Phil.

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Speaker 2: Joel's actually going to make a donation if you could

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Speaker 2: just put together a gofund to me for home down payment.

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Speaker 1: Yeahel's going to pitch in about thirty two cents. That's

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Speaker 1: what I can spare. Right.

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Speaker 2: By the way, did Phil did he actually say his name?

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Speaker 2: I don't know he said his name, but we know

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Speaker 2: his name because he sent us the email, of course.

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Speaker 2: But Phil, good question. There are a lot of different

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Speaker 2: places where you can save your down payment these days.

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Speaker 2: You can save your money over in Joel's account and

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Speaker 2: he'll that's right.

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Speaker 1: No, the interest rates much worse than what Phil's describing.

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Speaker 2: CDs, money markets savings. These are all different accounts. Each

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Speaker 2: one of these exists for different reasons, so we'll do

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Speaker 2: our best to explain which one might make the most

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Speaker 2: sense for you.

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Speaker 1: Yeah, they sure have a lot of similarities, I will say,

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Speaker 1: but they have distinctive qualities that Phil's kind of looking

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Speaker 1: to parse the details, So Matt, let's parse the details.

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Speaker 1: Let's start off by talking about CDs, and I think

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Speaker 1: they're out for Phil, right. I think he knows that too.

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Speaker 1: But because he said he needs liquid cash for the

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Speaker 1: home purchase, that's really not in the too far distant future.

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Speaker 1: You could, I guess, feel op for a short term

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Speaker 1: CD since you said you need the money, and like,

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Speaker 1: let's say twelve to eighteen months, but hey, what if

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Speaker 1: you put it in a twelve month CD you found

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Speaker 1: the perfect home in eleven months and you're like, man,

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Speaker 1: I need that down payment, Like now what, It's just

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Speaker 1: not worth the loss of the interest you would take

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Speaker 1: by breaking that CD would typically you forfeit the last

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Speaker 1: three months of interest, which would mean hey, basically any

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Speaker 1: other savings vehicle you picked would have been better than

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Speaker 1: the CD. I think it's just a non starter. Like,

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Speaker 1: I wouldn't even consider it. There are Matt, you know

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Speaker 1: this well because you're an ALLY customer. There are no

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Speaker 1: penalty CDs from Ally, which I believe you put your

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Speaker 1: money in at one point, but you pay right for

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Speaker 1: that more flexible product by agreeing to a lower starting

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Speaker 1: interest rate. So there's something. I don't think it's quite

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Speaker 1: half a point, but there's a there's a decent gap

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Speaker 1: between signing up for a CD that doesn't have a

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Speaker 1: no penalty writer on it essentially through Ally, and so yeah,

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Speaker 1: you're just going to paid less on your money, and

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Speaker 1: it just doesn't make sense for what you're trying to

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Speaker 1: accomplish here, although CDs might still make sense for other

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Speaker 1: people right, especially if they need downside protection against the

434
00:20:09,359 --> 00:20:12,199
Speaker 1: possibility of following interest rates for their cash. That's when

435
00:20:12,240 --> 00:20:14,560
Speaker 1: a CD makes sense. But only if like, hey, you

436
00:20:14,600 --> 00:20:17,119
Speaker 1: can lock it up, you know, you're not going to

437
00:20:17,200 --> 00:20:18,600
Speaker 1: need to touch it before him, And that's just not

438
00:20:18,640 --> 00:20:19,439
Speaker 1: the case that fills in.

439
00:20:19,520 --> 00:20:22,360
Speaker 2: Yeah, he wants to be ready to pounce, And we're

440
00:20:22,359 --> 00:20:25,040
Speaker 2: gonna not recommend CDs because Dave Ramsey someone like he

441
00:20:25,080 --> 00:20:27,960
Speaker 2: recommended that to Phil. So we're gonna immediately just say

442
00:20:28,000 --> 00:20:28,840
Speaker 2: the opposite.

443
00:20:28,480 --> 00:20:32,000
Speaker 1: Of whatever Day says. Now that doesn't surprise me. Did

444
00:20:32,080 --> 00:20:34,440
Speaker 1: Dave tell you safe for retirement? Don't do it? Phil?

445
00:20:34,520 --> 00:20:37,960
Speaker 1: You better? You better not. It makes sense that Dave

446
00:20:38,119 --> 00:20:40,560
Speaker 1: or someone you know over that was a part of

447
00:20:40,560 --> 00:20:43,240
Speaker 1: his crew mentioned that because just I feel like, generally speaking,

448
00:20:43,240 --> 00:20:45,520
Speaker 1: they're a little bit more risk averse, at least when

449
00:20:45,560 --> 00:20:48,200
Speaker 1: it comes to debt taking on. Well, yeah, I guess

450
00:20:48,200 --> 00:20:50,080
Speaker 1: we're not talking about debt here. We're talking about savings.

451
00:20:50,080 --> 00:20:51,600
Speaker 2: But there are a lot of things that we do

452
00:20:51,680 --> 00:20:53,480
Speaker 2: agree with when it comes to Dave and some of

453
00:20:53,520 --> 00:20:55,439
Speaker 2: his principles. But there's some things that we don't agree with,

454
00:20:55,480 --> 00:20:57,840
Speaker 2: like credit cards, namely, but.

455
00:20:58,520 --> 00:21:00,159
Speaker 1: I'd pay off your mortgage right there.

456
00:21:00,240 --> 00:21:03,520
Speaker 2: Yeah, I get the desire wanting to cross check some

457
00:21:03,560 --> 00:21:06,200
Speaker 2: of these different recommendations, But when it comes to high

458
00:21:06,240 --> 00:21:10,200
Speaker 2: yield savings accounts versus money market funds, I'm gonna say

459
00:21:10,200 --> 00:21:12,879
Speaker 2: that we're probably a bit more partial to highield savings.

460
00:21:13,280 --> 00:21:15,679
Speaker 2: But you truly you can't go wrong either way here

461
00:21:15,720 --> 00:21:20,679
Speaker 2: because they're very similar account types. One is offered by brokerages,

462
00:21:20,960 --> 00:21:22,760
Speaker 2: that being money market funds, and the others is going

463
00:21:22,800 --> 00:21:24,840
Speaker 2: to be banks. The high old Savings account, of course,

464
00:21:25,400 --> 00:21:29,520
Speaker 2: Vanguard's v m f x X is actually a fantastic

465
00:21:29,600 --> 00:21:33,439
Speaker 2: choice on the money market front. You do have to

466
00:21:33,440 --> 00:21:36,920
Speaker 2: have an account at Vanguard, but the holdings of that

467
00:21:37,000 --> 00:21:41,200
Speaker 2: fund are in very stable assets like cash, government securities

468
00:21:41,280 --> 00:21:41,840
Speaker 2: as well.

469
00:21:42,400 --> 00:21:45,880
Speaker 1: Fidelity they've got a cash management account. That's that's pretty good. Uh.

470
00:21:45,920 --> 00:21:50,920
Speaker 1: And one perk of that that yeah, not spanks, SPACs,

471
00:21:51,040 --> 00:21:54,760
Speaker 1: spa uh huh. A perk of that versus high old

472
00:21:54,760 --> 00:21:57,000
Speaker 1: savings account is you can use a debit card and

473
00:21:57,040 --> 00:21:59,520
Speaker 1: you can write checks directly from that, which you typically

474
00:21:59,600 --> 00:22:02,040
Speaker 1: can't do from a high yield savings account. Oh, that

475
00:22:02,119 --> 00:22:04,679
Speaker 1: being said, is not too difficult to transfer money over

476
00:22:04,680 --> 00:22:07,080
Speaker 1: from the high Old Savings directly to a checking account,

477
00:22:07,200 --> 00:22:10,600
Speaker 1: assuming you also have a checking account with that particular institution,

478
00:22:11,320 --> 00:22:13,720
Speaker 1: and they offer free checks, but the returns they're close

479
00:22:13,760 --> 00:22:17,840
Speaker 1: to or sometimes oftentimes, I guess at least lately, they've

480
00:22:17,960 --> 00:22:20,959
Speaker 1: exceeded some of the highest returns on high yields savings

481
00:22:21,000 --> 00:22:24,200
Speaker 1: accounts as well. So if you are a van guard

482
00:22:24,280 --> 00:22:27,000
Speaker 1: or if you're a Fidelity customer, this is a I

483
00:22:27,000 --> 00:22:30,119
Speaker 1: would say, a very reasonable place to stash or cash

484
00:22:30,200 --> 00:22:33,360
Speaker 1: that you're gonna need for a down payment. Yeah. So

485
00:22:33,560 --> 00:22:37,080
Speaker 1: I think money market funds definitely a recent option, and

486
00:22:37,080 --> 00:22:38,919
Speaker 1: there's a reason I think more and more people have

487
00:22:39,000 --> 00:22:43,520
Speaker 1: gravitated towards having doing essentially all of their money business

488
00:22:43,960 --> 00:22:46,280
Speaker 1: with a low cost brokerage firm, because it's like, hey,

489
00:22:46,320 --> 00:22:48,760
Speaker 1: I'm gonna invest there, I'm gonna have my cash management account.

490
00:22:48,800 --> 00:22:50,560
Speaker 1: I'm just going to have it literally all under one roof.

491
00:22:50,800 --> 00:22:53,840
Speaker 1: And the perks of some of those cash management accounts

492
00:22:54,160 --> 00:22:56,360
Speaker 1: at the brokerage firms have gotten really good, right when

493
00:22:56,359 --> 00:22:58,800
Speaker 1: it comes to like no fees free atm with rawals.

494
00:22:58,840 --> 00:23:00,919
Speaker 1: I think Schwab kind of started that Fidelity has a

495
00:23:00,920 --> 00:23:03,719
Speaker 1: great option now too, so more and more people are

496
00:23:03,720 --> 00:23:06,119
Speaker 1: saying that works for me, and they're just saying I

497
00:23:06,160 --> 00:23:09,040
Speaker 1: don't think I need a bank at all. I also

498
00:23:09,160 --> 00:23:10,600
Speaker 1: just want to say I think banks do a really

499
00:23:10,640 --> 00:23:12,760
Speaker 1: good Some banks do a really good job on the front,

500
00:23:13,359 --> 00:23:15,639
Speaker 1: obviously not the big banks. So we love c We

501
00:23:15,640 --> 00:23:18,000
Speaker 1: talked about CIT regularly when you've got lots of money,

502
00:23:18,119 --> 00:23:20,160
Speaker 1: like a down payment fund, because they've been paying top

503
00:23:20,240 --> 00:23:22,520
Speaker 1: notch returns that are at or above some of these

504
00:23:22,560 --> 00:23:24,920
Speaker 1: money market fund rates. If we're talking about like small

505
00:23:24,920 --> 00:23:27,200
Speaker 1: time savings, like hey, I've got fifteen hundred bucks to save,

506
00:23:27,440 --> 00:23:29,840
Speaker 1: should I move banks? Well the stakes are lowered there,

507
00:23:29,920 --> 00:23:32,400
Speaker 1: right if you don't have a lot of money on hand.

508
00:23:32,440 --> 00:23:33,920
Speaker 1: But if you've got a lot of cash because you're

509
00:23:33,920 --> 00:23:38,199
Speaker 1: saving for to buy a house, then every half a

510
00:23:38,240 --> 00:23:40,520
Speaker 1: point or something like that matters quite a bit when

511
00:23:40,520 --> 00:23:43,160
Speaker 1: it comes to your overall amount of returns, how much

512
00:23:43,160 --> 00:23:46,040
Speaker 1: money your money is making. There's just no reason to

513
00:23:46,080 --> 00:23:48,600
Speaker 1: not be with an online bank that offers highly competitive rates.

514
00:23:48,600 --> 00:23:52,000
Speaker 1: Phil mentioned that he has a three percent checking account

515
00:23:52,160 --> 00:23:55,240
Speaker 1: with strict limits. What fifteen k, Matt, you can't earn

516
00:23:55,280 --> 00:23:58,560
Speaker 1: above that? Probably at over fifteen k you're making point

517
00:23:58,600 --> 00:24:00,680
Speaker 1: zero one percent or something like that. Well, now it's

518
00:24:00,680 --> 00:24:02,520
Speaker 1: the perfect time to move get out of that. Credit

519
00:24:02,640 --> 00:24:06,200
Speaker 1: unions are great for borrowing, they're not great for savers,

520
00:24:06,600 --> 00:24:09,920
Speaker 1: and so they're just great highlight savings accounts out there

521
00:24:10,640 --> 00:24:12,800
Speaker 1: for you, Phil that are gonna you know, you're gonna

522
00:24:12,800 --> 00:24:15,760
Speaker 1: get a good bit more on your money with zero caps,

523
00:24:15,760 --> 00:24:19,720
Speaker 1: so you're gonna make the full four plus percent on

524
00:24:19,960 --> 00:24:22,200
Speaker 1: all the money that you have right in that account.

525
00:24:22,320 --> 00:24:23,960
Speaker 1: We don't want folks jumping around all the time to

526
00:24:24,000 --> 00:24:27,199
Speaker 1: score slightly higher interest rate. But moving your funds and

527
00:24:27,280 --> 00:24:31,600
Speaker 1: your business to a bank that consistently pays customers incredibly well,

528
00:24:31,640 --> 00:24:33,040
Speaker 1: I think. I think it's a no brainer.

529
00:24:33,119 --> 00:24:35,680
Speaker 2: Yeah, specifically because it's something that you want to do regardless.

530
00:24:35,720 --> 00:24:37,760
Speaker 2: It's not like you're only doing it for this down payment.

531
00:24:37,800 --> 00:24:42,159
Speaker 2: This is just good general personal finance hygiene essentially. Also,

532
00:24:42,600 --> 00:24:45,560
Speaker 2: Betterment's got a pretty solid cash management account too. I

533
00:24:45,560 --> 00:24:47,480
Speaker 2: think right now you can snag an extra half a

534
00:24:47,520 --> 00:24:50,280
Speaker 2: percent as a new customer for three months for a

535
00:24:50,320 --> 00:24:52,360
Speaker 2: total of four and a half percent right now.

536
00:24:52,359 --> 00:24:54,760
Speaker 1: So that's pretty cool. That's yeah, like about the best

537
00:24:54,800 --> 00:24:57,080
Speaker 1: I know of it. Yeah, of course, I want to

538
00:24:57,119 --> 00:25:00,320
Speaker 1: point out here with your timeline, Phil, do not invest

539
00:25:00,640 --> 00:25:03,320
Speaker 1: any of these dollars and which might bring up a

540
00:25:03,480 --> 00:25:07,200
Speaker 1: small note when it comes to the semantics here, because

541
00:25:07,240 --> 00:25:10,160
Speaker 1: there is a technical difference between a money market deposit

542
00:25:10,240 --> 00:25:14,119
Speaker 1: account versus a money market fund and the one that

543
00:25:14,160 --> 00:25:18,040
Speaker 1: you specifically called out. Technically it is an investment, but

544
00:25:18,200 --> 00:25:22,000
Speaker 1: it's an investment that is very, very unlikely to ever

545
00:25:22,560 --> 00:25:25,320
Speaker 1: go down in value. So a deposit account is actually

546
00:25:25,359 --> 00:25:28,880
Speaker 1: FDIC ensured, whereas the fund is technically an investment, and

547
00:25:28,920 --> 00:25:31,600
Speaker 1: technically that means you could see that go down, but

548
00:25:31,680 --> 00:25:33,440
Speaker 1: effectively it's not going to go down.

549
00:25:33,520 --> 00:25:36,080
Speaker 2: Yeah, so I wouldn't I wouldn't worry too much about

550
00:25:36,080 --> 00:25:38,600
Speaker 2: that because the Fed they're gonna come swooping in. They're

551
00:25:38,600 --> 00:25:40,520
Speaker 2: gonna save the day, which is what happened I think

552
00:25:40,560 --> 00:25:41,160
Speaker 2: the last.

553
00:25:40,920 --> 00:25:42,960
Speaker 1: Time was that like two thousand and nine. Yeah, there's

554
00:25:43,320 --> 00:25:45,080
Speaker 1: the Great Recession when that was the case, happened to

555
00:25:45,200 --> 00:25:47,399
Speaker 1: what one or two of those accounts, And yeah, it

556
00:25:47,400 --> 00:25:49,520
Speaker 1: was a big deal then, But it's not something you

557
00:25:49,520 --> 00:25:53,760
Speaker 1: have to effectively worry about now, even though technically I'm

558
00:25:53,840 --> 00:25:57,119
Speaker 1: saying not to invest, but you are investing. Just a

559
00:25:57,119 --> 00:25:59,040
Speaker 1: small note something to be aware of. And that's another

560
00:25:59,160 --> 00:26:01,720
Speaker 1: just parsing of the details between hya SAMES accounts and

561
00:26:01,760 --> 00:26:03,800
Speaker 1: some of these money market funds. And you also notice

562
00:26:04,000 --> 00:26:08,080
Speaker 1: that these different brokerage firms have multiple different versions of

563
00:26:08,320 --> 00:26:10,600
Speaker 1: cash management accounts or money market funds, and they're all

564
00:26:10,600 --> 00:26:13,359
Speaker 1: created a little differently, so know what you're getting into.

565
00:26:13,640 --> 00:26:15,840
Speaker 1: That's why I think for most people met the simplicity

566
00:26:16,080 --> 00:26:18,479
Speaker 1: of Ohio Sames account with one of our favorite online

567
00:26:18,480 --> 00:26:20,880
Speaker 1: banks that consistently pays high rate. It's tough to be, Yeah,

568
00:26:20,880 --> 00:26:24,200
Speaker 1: it's tough to be, but I'm glad these other options exist.

569
00:26:24,359 --> 00:26:26,679
Speaker 1: And I do think the cash management accounts at some

570
00:26:26,720 --> 00:26:28,600
Speaker 1: of these low coast brokeg firms have only gotten better

571
00:26:28,640 --> 00:26:31,040
Speaker 1: and better and better. They become a more compelling product

572
00:26:31,040 --> 00:26:34,080
Speaker 1: and recenters. Nice. All right, let's hear from a listener

573
00:26:34,080 --> 00:26:37,120
Speaker 1: who is calling on behalf of not herself, but actually

574
00:26:37,240 --> 00:26:38,040
Speaker 1: her sister.

575
00:26:38,680 --> 00:26:39,440
Speaker 5: Hi, joel In Matt.

576
00:26:39,520 --> 00:26:42,679
Speaker 6: This is Heather from Ohio and I'm a longtime listener

577
00:26:42,720 --> 00:26:46,800
Speaker 6: and fan. My question is regarding my sister and her

578
00:26:46,800 --> 00:26:51,240
Speaker 6: student loan payments. She graduated from college about ten years ago.

579
00:26:52,119 --> 00:26:57,000
Speaker 6: She's been making the income driven repayments and her amount

580
00:26:57,080 --> 00:27:00,560
Speaker 6: that she owes has actually tripled from her original amount,

581
00:27:00,840 --> 00:27:03,720
Speaker 6: even though she hasn't missed any payments. She's been making

582
00:27:03,760 --> 00:27:09,240
Speaker 6: them religiously, but I believe that after twenty years her

583
00:27:09,400 --> 00:27:11,960
Speaker 6: amount would be that she always would be canceled. But

584
00:27:12,000 --> 00:27:14,160
Speaker 6: I wasn't sure if that was true or like, what

585
00:27:14,160 --> 00:27:17,480
Speaker 6: can I guide her to because I feel like it's

586
00:27:17,520 --> 00:27:18,600
Speaker 6: not clear.

587
00:27:19,560 --> 00:27:20,800
Speaker 5: Thanks so much for any help.

588
00:27:21,400 --> 00:27:24,960
Speaker 1: Well, Matt, to see your balance triple. I gotta imagine

589
00:27:25,080 --> 00:27:27,680
Speaker 1: that sucks. That feels like a punch to the face.

590
00:27:27,880 --> 00:27:32,040
Speaker 1: So I hate seeing people go through the immercial emotional

591
00:27:32,080 --> 00:27:36,119
Speaker 1: turmoil of making payments on time, of like doing the

592
00:27:36,200 --> 00:27:37,520
Speaker 1: right thing that they're supposed to do.

593
00:27:37,600 --> 00:27:37,719
Speaker 3: Right.

594
00:27:37,760 --> 00:27:39,520
Speaker 1: Hey, I was told that this is what my student

595
00:27:39,560 --> 00:27:42,800
Speaker 1: loan payment needs to be and doing the right thing

596
00:27:42,920 --> 00:27:45,520
Speaker 1: every single month like clockwork, and then hey, the balance

597
00:27:45,560 --> 00:27:49,480
Speaker 1: continues to increase. It's so unnerving, Like, I can't imagine

598
00:27:49,840 --> 00:27:53,159
Speaker 1: going through that. It just doesn't feel right. Do you

599
00:27:53,240 --> 00:27:55,720
Speaker 1: make on time payments seeing the balance increase? And then

600
00:27:56,040 --> 00:27:58,480
Speaker 1: on top of that, with the political football that student

601
00:27:58,520 --> 00:28:02,760
Speaker 1: loans have become, quarries are mounting for student loan borrowers

602
00:28:03,280 --> 00:28:05,720
Speaker 1: of all stripes. Yeah, especially ones who are like, well,

603
00:28:05,760 --> 00:28:08,359
Speaker 1: I know the Biden forgiveness thing, that's not going to happen,

604
00:28:08,680 --> 00:28:12,399
Speaker 1: But what about the forms of forgiveness that were essentially

605
00:28:12,400 --> 00:28:17,480
Speaker 1: promised for many, many years before Joe Biden came in office.

606
00:28:17,600 --> 00:28:19,280
Speaker 1: Or is that going to stick around there? Yeah, well

607
00:28:19,280 --> 00:28:21,119
Speaker 1: most of that is going to stick around. The Safe

608
00:28:21,119 --> 00:28:24,320
Speaker 1: Plan is sunk, but these other income based plans, it

609
00:28:24,440 --> 00:28:26,480
Speaker 1: just definitely seems like even if changes are made that

610
00:28:26,520 --> 00:28:29,840
Speaker 1: all existing loans would still have access to current payback plans.

611
00:28:30,240 --> 00:28:31,159
Speaker 1: So for folks who.

612
00:28:31,040 --> 00:28:34,040
Speaker 2: Are paying back their loans on an income driven repayment plan,

613
00:28:34,320 --> 00:28:36,960
Speaker 2: like your sister Heather, I wouldn't be sitting on pins

614
00:28:36,960 --> 00:28:39,840
Speaker 2: and needles. I would keep paying as agreed, just under

615
00:28:39,840 --> 00:28:43,080
Speaker 2: the assumption that the federal government is going to hold

616
00:28:43,120 --> 00:28:45,000
Speaker 2: up their end of the bargain. But this is just

617
00:28:45,040 --> 00:28:47,920
Speaker 2: a sad outcome of the political environment that we are

618
00:28:47,960 --> 00:28:49,920
Speaker 2: currently living in and not I mean, I'm going to

619
00:28:50,080 --> 00:28:52,520
Speaker 2: risk alienating listeners here, but this is why, like truly,

620
00:28:52,600 --> 00:28:55,960
Speaker 2: our political system is broken, because when you make a

621
00:28:56,040 --> 00:29:00,200
Speaker 2: bunch of sweeping actions based on executive orders, which is

622
00:29:00,200 --> 00:29:02,440
Speaker 2: what happened the last administration, and what happens when the

623
00:29:02,520 --> 00:29:05,440
Speaker 2: other party inevitably comes to power, well with the strike

624
00:29:05,480 --> 00:29:06,920
Speaker 2: of a pen and a phone you know, and phone

625
00:29:06,960 --> 00:29:09,720
Speaker 2: calls with with a pen and with a cellphone, jel.

626
00:29:10,080 --> 00:29:13,000
Speaker 2: All of that gets undone, and who suffers. It's the

627
00:29:13,000 --> 00:29:15,760
Speaker 2: American people. And so it's it's the part of our

628
00:29:15,800 --> 00:29:17,520
Speaker 2: politics that I hate the most, the fact that it

629
00:29:17,560 --> 00:29:19,760
Speaker 2: seems like it's they're more as entertainment as opposed to

630
00:29:19,800 --> 00:29:23,520
Speaker 2: doing the boring work of governing in the legislating, which

631
00:29:23,520 --> 00:29:25,560
Speaker 2: is where it actually does need to take place. Right

632
00:29:25,600 --> 00:29:28,760
Speaker 2: if if these were laws that were truly laws, as

633
00:29:28,760 --> 00:29:32,160
Speaker 2: opposed to eos, I think we would see the American

634
00:29:32,200 --> 00:29:34,160
Speaker 2: public in particular get jerked around a lot.

635
00:29:34,120 --> 00:29:37,200
Speaker 1: Less, which says process matters. And it seems like Congress

636
00:29:37,200 --> 00:29:39,520
Speaker 1: has become like a commentating class. They like to go

637
00:29:39,600 --> 00:29:42,320
Speaker 1: on the nightly new shows and talk about the moves

638
00:29:42,360 --> 00:29:45,560
Speaker 1: back and forth instead of legislating. Yeah, if they would

639
00:29:45,760 --> 00:29:49,200
Speaker 1: legislate less public servants, less public servants, and more using

640
00:29:49,240 --> 00:29:52,720
Speaker 1: the platform for themselves as individuals as opposed to serving

641
00:29:52,760 --> 00:29:54,680
Speaker 1: the country. Yeah, and it would feel like you're getting less done,

642
00:29:54,720 --> 00:29:58,600
Speaker 1: I think as the president. But it's the right way

643
00:29:58,640 --> 00:30:00,600
Speaker 1: to go about things, and it's the way Founding fathers

644
00:30:00,600 --> 00:30:02,880
Speaker 1: set it up so that we would have slower gradual

645
00:30:02,960 --> 00:30:06,040
Speaker 1: change instead up the whiplash we've all been enduring. But Heather,

646
00:30:06,480 --> 00:30:10,200
Speaker 1: your instinct right is that this is clear as mud

647
00:30:10,240 --> 00:30:13,600
Speaker 1: is kind of true. The smartest way to proceed, I think,

648
00:30:14,080 --> 00:30:16,719
Speaker 1: is as if the current arrangement stands and will continue

649
00:30:16,760 --> 00:30:18,840
Speaker 1: to stand. Kind of like Matt mentioned, you said that

650
00:30:18,880 --> 00:30:21,480
Speaker 1: she graduated from college a decade ago. I'm assuming this

651
00:30:21,560 --> 00:30:26,080
Speaker 1: is undergrad Under current IDR rules, she is eligible for

652
00:30:26,080 --> 00:30:29,120
Speaker 1: forgiveness after twenty years of payment. So basically, hey, she's

653
00:30:29,160 --> 00:30:32,640
Speaker 1: halfway there. And I think that's another reason that the

654
00:30:32,640 --> 00:30:35,480
Speaker 1: ballooning balance it's just not something to freak out about,

655
00:30:35,520 --> 00:30:37,240
Speaker 1: even if it's tough to watch, even if it's hard

656
00:30:37,280 --> 00:30:40,400
Speaker 1: to stomach. That advice doesn't apply to everyone. I think

657
00:30:40,480 --> 00:30:42,320
Speaker 1: some other people might be better off trying to pay

658
00:30:42,360 --> 00:30:45,720
Speaker 1: their loans in full, not waiting on forgiveness. It just

659
00:30:45,800 --> 00:30:48,959
Speaker 1: might not make the most math sense to hold on

660
00:30:49,040 --> 00:30:52,000
Speaker 1: for twenty years and opt for a small amount of forgiveness.

661
00:30:52,000 --> 00:30:55,440
Speaker 1: But especially for your sister, it sounds like clearly forgiveness

662
00:30:55,480 --> 00:30:57,840
Speaker 1: is going to be needs to be. The aim is

663
00:30:57,880 --> 00:31:00,920
Speaker 1: going to be kind of her salvation to a certain extent.

664
00:31:01,160 --> 00:31:02,840
Speaker 1: Especially think about what's going to happen over the next

665
00:31:02,840 --> 00:31:05,520
Speaker 1: ten years. Matt. If the balance is already tripled. Well,

666
00:31:05,720 --> 00:31:07,720
Speaker 1: chances are it's going to grow a heck of a

667
00:31:07,720 --> 00:31:11,640
Speaker 1: lot more. Think about ultimately what heather sister is going

668
00:31:11,680 --> 00:31:14,480
Speaker 1: to be forgiven the amount of student loan debt that

669
00:31:14,560 --> 00:31:16,600
Speaker 1: will just be wiped off the face of the earth

670
00:31:16,600 --> 00:31:19,400
Speaker 1: for her in one fell swoop, it's it's going to

671
00:31:19,480 --> 00:31:21,640
Speaker 1: be massive. Yeah, And there are even ways for your

672
00:31:21,680 --> 00:31:24,680
Speaker 1: sister to work to maximize her forgiveness. So let's talk

673
00:31:24,720 --> 00:31:27,680
Speaker 1: about that strategicy here for a second. And what I

674
00:31:27,720 --> 00:31:31,479
Speaker 1: mean by that is lowering her payment by reducing her income. So,

675
00:31:31,520 --> 00:31:33,720
Speaker 1: for instance, the more she in her job, is that

676
00:31:33,720 --> 00:31:34,680
Speaker 1: what we're saying about.

677
00:31:34,560 --> 00:31:38,080
Speaker 2: Yeah, they can't tax you if you don't have any income.

678
00:31:39,080 --> 00:31:42,200
Speaker 2: The more she invests in traditional tax advantage accounts, and

679
00:31:42,280 --> 00:31:44,840
Speaker 2: the more it's going to reduce her adjusted gross income

680
00:31:45,280 --> 00:31:48,239
Speaker 2: that would be a traditional IRA or a traditional four

681
00:31:48,280 --> 00:31:52,160
Speaker 2: to one K or an HSA. The more that she

682
00:31:52,160 --> 00:31:54,719
Speaker 2: can sock into those accounts, the less that she's going

683
00:31:54,760 --> 00:31:56,520
Speaker 2: to owe the government when it comes to the student loans.

684
00:31:56,560 --> 00:31:59,040
Speaker 1: It's just the way it is. Obviously she does you know,

685
00:31:59,040 --> 00:32:00,720
Speaker 1: she's got to have money to pay for a roof,

686
00:32:00,720 --> 00:32:04,160
Speaker 1: overhead for her head, to pay for food, groceries. But

687
00:32:04,280 --> 00:32:07,520
Speaker 1: making these additional contributions can reduce her payment amount, which

688
00:32:07,560 --> 00:32:11,560
Speaker 1: would increase her balance even more over time wait for it,

689
00:32:11,600 --> 00:32:14,160
Speaker 1: but lead to more overall forgiveness. At the end of

690
00:32:14,200 --> 00:32:16,560
Speaker 1: this period of time, it means less of her money

691
00:32:16,560 --> 00:32:20,520
Speaker 1: actually going towards student loan repayment. Yeah. So it's just

692
00:32:20,880 --> 00:32:23,600
Speaker 1: it's tough to stomach, but it almost seems like that

693
00:32:23,600 --> 00:32:25,320
Speaker 1: this can just be a stage of life where there's

694
00:32:25,320 --> 00:32:28,280
Speaker 1: a whole lot of difference spending. She's really focused on investing,

695
00:32:28,320 --> 00:32:31,160
Speaker 1: because investing right now it is a double edged sword

696
00:32:31,160 --> 00:32:33,880
Speaker 1: because it means more time that money is going to

697
00:32:34,000 --> 00:32:36,480
Speaker 1: have to compound over time, but it also means the

698
00:32:36,520 --> 00:32:39,520
Speaker 1: added benefit of paying less right now towards her student loans. Yep.

699
00:32:40,440 --> 00:32:43,320
Speaker 1: So it feels like a gamble, but I think that's

700
00:32:43,360 --> 00:32:45,560
Speaker 1: the right approach, is to try and minimize the amount

701
00:32:45,560 --> 00:32:49,480
Speaker 1: of money going out in monthly form towards a student

702
00:32:49,480 --> 00:32:52,440
Speaker 1: loan payment. Yeah, which means the balance is going to grow,

703
00:32:52,440 --> 00:32:54,320
Speaker 1: but ultimately there's a big win at the end of

704
00:32:54,320 --> 00:32:56,480
Speaker 1: the day or at the end of the decade of

705
00:32:56,520 --> 00:32:58,880
Speaker 1: the decade. Yeah, and last but not least, I would

706
00:32:58,920 --> 00:33:00,680
Speaker 1: say it's a good idea for your start to start

707
00:33:00,720 --> 00:33:03,680
Speaker 1: saving though for a potential tax bill now. And that

708
00:33:03,840 --> 00:33:07,440
Speaker 1: is because the one caveat at the end of forgiveness

709
00:33:07,800 --> 00:33:10,320
Speaker 1: is that you're growing balance. Well, when that's forgiven, it

710
00:33:10,360 --> 00:33:14,160
Speaker 1: could end up generating tax consequences. And so I say

711
00:33:14,240 --> 00:33:17,280
Speaker 1: could because that is the biggest unknown. What is Congress

712
00:33:17,320 --> 00:33:19,480
Speaker 1: going to do about that. There's currently a law in

713
00:33:19,520 --> 00:33:22,680
Speaker 1: place that prevents individuals from incurring what's been called a

714
00:33:22,720 --> 00:33:25,880
Speaker 1: student loan forgiveness tax bomb, but that law is set

715
00:33:25,880 --> 00:33:28,000
Speaker 1: to expire at the end of this year. And so

716
00:33:28,120 --> 00:33:32,400
Speaker 1: anybody who has had their student loans forgiven in recent history,

717
00:33:32,760 --> 00:33:34,640
Speaker 1: they haven't had any sort of tax bill at the

718
00:33:34,720 --> 00:33:37,360
Speaker 1: end of the day. They haven't had to pay anything.

719
00:33:37,520 --> 00:33:41,280
Speaker 1: But let's just assume that there was like one hundred

720
00:33:41,280 --> 00:33:43,840
Speaker 1: and fifty thousand dollars in forgiveness mat of student loan

721
00:33:43,880 --> 00:33:47,080
Speaker 1: debt ten years from now, the tax bill would be

722
00:33:47,280 --> 00:33:50,360
Speaker 1: not insignificant. And so Heather, for your sake and for

723
00:33:50,400 --> 00:33:54,040
Speaker 1: your sister's sake, I hope that gets extended. But if not,

724
00:33:54,480 --> 00:33:56,880
Speaker 1: just be prepared and be ready, be saving up. Your

725
00:33:56,880 --> 00:34:00,400
Speaker 1: sister should be saving up for a tax bill that

726
00:34:00,440 --> 00:34:01,360
Speaker 1: it might come to pass.

727
00:34:01,440 --> 00:34:04,640
Speaker 2: Yeah, Yeah, so you're you're addressing the tax implications one

728
00:34:04,640 --> 00:34:06,560
Speaker 2: of the one of the thought going back to her

729
00:34:06,600 --> 00:34:09,840
Speaker 2: reducing her justic gross income, the implications were she to

730
00:34:09,920 --> 00:34:12,360
Speaker 2: get married. I didn't get an impression that she's necessarily

731
00:34:12,400 --> 00:34:14,239
Speaker 2: married right now. It sounds like she might. Her sister

732
00:34:14,320 --> 00:34:16,520
Speaker 2: might be flying solo at the moment. But were she

733
00:34:16,600 --> 00:34:17,960
Speaker 2: to get married, this might be an instance.

734
00:34:18,120 --> 00:34:21,759
Speaker 1: And this is really hypothetical, I guess, but if she

735
00:34:22,200 --> 00:34:25,560
Speaker 1: combines her income with her partner, who might make a

736
00:34:25,600 --> 00:34:27,120
Speaker 1: ton of money, well, that would that's gonna have a

737
00:34:27,160 --> 00:34:29,680
Speaker 1: dramatic impact on the amount that gets forgiven. So that

738
00:34:29,760 --> 00:34:33,280
Speaker 1: might be an instance with where where she would continue

739
00:34:33,320 --> 00:34:37,040
Speaker 1: to file married but filing separately because she would essentially

740
00:34:37,080 --> 00:34:40,880
Speaker 1: want to isolate her own income to keep that technically

741
00:34:41,239 --> 00:34:43,959
Speaker 1: artificially low for their overall health. So if Heather Mary,

742
00:34:44,040 --> 00:34:46,880
Speaker 1: if Heather sister marries rich Mary's prince charming, like Heather's

743
00:34:46,880 --> 00:34:48,879
Speaker 1: been trying to convince her to do exactly, that's when

744
00:34:48,920 --> 00:34:50,919
Speaker 1: you got to really think about we're reading between the lines.

745
00:34:51,280 --> 00:34:53,319
Speaker 1: I know kind of conversations Heather and her sister have, right,

746
00:34:54,000 --> 00:34:55,759
Speaker 1: I think it's I think it's a good device if

747
00:34:55,760 --> 00:34:58,920
Speaker 1: that comes to past. It's a strategy I'd employed. Or

748
00:34:59,040 --> 00:35:01,719
Speaker 1: we've got more questions to get to more of your

749
00:35:01,760 --> 00:35:04,560
Speaker 1: money questions, including using a credit card to pay for

750
00:35:04,600 --> 00:35:07,600
Speaker 1: medical debt. It's kind of squirrely, but it could pay off.

751
00:35:07,600 --> 00:35:16,800
Speaker 1: We'll talk about that and more right after this. We

752
00:35:17,360 --> 00:35:20,080
Speaker 1: are back from the break and we'll get to that

753
00:35:20,160 --> 00:35:23,680
Speaker 1: truck question here in a second Joel. But first we

754
00:35:23,760 --> 00:35:26,000
Speaker 1: now have the Facebook question of the week, which is

755
00:35:26,000 --> 00:35:29,480
Speaker 1: from Matthew partial to that name. So I will probably

756
00:35:29,520 --> 00:35:30,520
Speaker 1: have to pay off about.

757
00:35:30,280 --> 00:35:34,000
Speaker 2: Three thousand dollars in medical bills coming up soon. Should

758
00:35:34,000 --> 00:35:36,839
Speaker 2: I just find a good rewards card and do that?

759
00:35:37,280 --> 00:35:40,480
Speaker 2: I don't have one at the moment. What do you think, Joel?

760
00:35:40,840 --> 00:35:42,160
Speaker 2: Is it time to this.

761
00:35:42,560 --> 00:35:44,759
Speaker 1: Is where we separate ourselves from the Dave Ramseys of

762
00:35:44,760 --> 00:35:47,360
Speaker 1: the world. Yeah, oh yeah, yeah, I would say probably

763
00:35:47,640 --> 00:35:50,680
Speaker 1: right yea. But we need to then go into the specifics.

764
00:35:50,680 --> 00:35:53,319
Speaker 1: I think the main question for Matthew here is can

765
00:35:53,320 --> 00:35:55,399
Speaker 1: you pay off the balance on time and in full

766
00:35:55,520 --> 00:35:57,440
Speaker 1: when the bill comes to That's three thousand bucks, right,

767
00:35:57,719 --> 00:36:00,479
Speaker 1: So yeah, get the credit card if you have three

768
00:36:00,480 --> 00:36:02,840
Speaker 1: thousand plus dollars in savings and you're going to be

769
00:36:02,880 --> 00:36:06,760
Speaker 1: able to pay the bill. If not, though, no, because

770
00:36:06,880 --> 00:36:10,080
Speaker 1: the rewards just aren't worth it, even the more significant

771
00:36:10,120 --> 00:36:13,360
Speaker 1: rewards that you can get from an initial sign up bonus,

772
00:36:13,600 --> 00:36:17,080
Speaker 1: which is what makes having a significant bill that's like

773
00:36:17,120 --> 00:36:18,960
Speaker 1: a silver lining, I guess macause nobody wants to pay

774
00:36:19,000 --> 00:36:21,840
Speaker 1: like three thousand dollars and medical bills. But if it

775
00:36:21,960 --> 00:36:24,839
Speaker 1: means new credit card and sign up bonus, that can

776
00:36:24,920 --> 00:36:26,919
Speaker 1: make that can just reduce the pain a little bit,

777
00:36:27,280 --> 00:36:29,359
Speaker 1: depending on what pain is going on in your body.

778
00:36:29,400 --> 00:36:31,480
Speaker 1: I don't know that it's actually medically prescribed to do that,

779
00:36:31,520 --> 00:36:33,600
Speaker 1: but it can reduce the financial pain. And so I

780
00:36:33,640 --> 00:36:35,520
Speaker 1: think if I had a three thousand dollars medical bill,

781
00:36:35,840 --> 00:36:37,839
Speaker 1: I would be looking to get a new credit card, right,

782
00:36:38,400 --> 00:36:40,640
Speaker 1: getting the brand new one, getting the sweet sign up

783
00:36:40,640 --> 00:36:44,480
Speaker 1: bonus for paying that one bill. Right, even if medical

784
00:36:44,480 --> 00:36:47,000
Speaker 1: bills aren't that fun to pay. I think that makes sense,

785
00:36:47,200 --> 00:36:49,960
Speaker 1: and it's nice to do it, not over a slew

786
00:36:50,040 --> 00:36:52,719
Speaker 1: of transactions trying to monitor your progress, but being like

787
00:36:52,800 --> 00:36:54,880
Speaker 1: Boom at the sign up bonus makes it easy and

788
00:36:55,040 --> 00:36:57,480
Speaker 1: with one swipe or one tap that's kind of awesome. Yeah,

789
00:36:57,680 --> 00:36:59,480
Speaker 1: assuming though that you do have the cash on hand

790
00:36:59,520 --> 00:37:01,200
Speaker 1: and that you're not actually going to go into credit

791
00:37:01,200 --> 00:37:04,160
Speaker 1: card debt. But also don't forget that you might have

792
00:37:04,239 --> 00:37:07,320
Speaker 1: some recourse here to reduce the size of this medical

793
00:37:07,360 --> 00:37:10,600
Speaker 1: bill pretty meaningfully, or maybe even have a completely eradicated

794
00:37:10,880 --> 00:37:13,920
Speaker 1: depending on your income, and so look into the financial

795
00:37:14,040 --> 00:37:18,120
Speaker 1: aid possibilities that are offered there through that hospital or

796
00:37:18,160 --> 00:37:20,240
Speaker 1: through that medical provider.

797
00:37:20,680 --> 00:37:23,279
Speaker 2: Maybe you'll actually owe a whole lot less. That being said,

798
00:37:23,520 --> 00:37:25,120
Speaker 2: kind of sounds like maybe he's done that because he

799
00:37:25,120 --> 00:37:28,239
Speaker 2: said I'll probably have to pay off about three thousand dollars,

800
00:37:28,320 --> 00:37:31,000
Speaker 2: So sounds like it's something that he it's a journey.

801
00:37:31,400 --> 00:37:33,279
Speaker 1: He's been arched up that tree, and maybe the bill

802
00:37:33,400 --> 00:37:35,440
Speaker 1: was higher and now it's been reduced to three thousand

803
00:37:35,480 --> 00:37:36,560
Speaker 1: and he can't get it and he's.

804
00:37:36,400 --> 00:37:38,160
Speaker 2: Finally coming to terms that this is what it is.

805
00:37:38,239 --> 00:37:41,000
Speaker 2: But last, but not least, head over to the how

806
00:37:41,000 --> 00:37:43,960
Speaker 2: to Money credit card tool to see what card might

807
00:37:44,000 --> 00:37:46,400
Speaker 2: make the most sense for you. The top rewards often

808
00:37:46,440 --> 00:37:48,839
Speaker 2: come in the form of travel points, so hopefully that's

809
00:37:48,880 --> 00:37:51,120
Speaker 2: something you're open to. If that's the case, the Capital

810
00:37:51,160 --> 00:37:55,080
Speaker 2: one venture X is well worth considering right now. If

811
00:37:55,080 --> 00:37:58,200
Speaker 2: that's not something that you're interested in interested in even

812
00:37:58,200 --> 00:38:01,319
Speaker 2: something like the Blue Cash preferred card, which there's a

813
00:38:01,320 --> 00:38:03,440
Speaker 2: similar theme that we've been discussing today, which is like

814
00:38:03,520 --> 00:38:05,839
Speaker 2: doing something that you're already planning to do. The Blue

815
00:38:05,840 --> 00:38:08,840
Speaker 2: Cash Preferred Card is a fantastic card because it's not

816
00:38:08,880 --> 00:38:10,200
Speaker 2: that hard to spend a ton of money at the

817
00:38:10,200 --> 00:38:13,360
Speaker 2: grocery store these days, and so depending on how it

818
00:38:13,440 --> 00:38:15,640
Speaker 2: is that you spend, that could be well worth the money.

819
00:38:15,719 --> 00:38:18,239
Speaker 1: Yeah, let's get to another question, Matt. This one comes

820
00:38:18,280 --> 00:38:21,520
Speaker 1: from anonymous, which is a name I'm partial to, and

821
00:38:21,600 --> 00:38:23,319
Speaker 1: they say, we all less than ten thousand dollars on

822
00:38:23,320 --> 00:38:26,560
Speaker 1: a house. We'll pay it off this year. Three vehicles

823
00:38:26,600 --> 00:38:29,480
Speaker 1: all paid off. Old truck isn't getting much use. We

824
00:38:29,600 --> 00:38:32,719
Speaker 1: use it occasionally, less than five thousand miles and a

825
00:38:32,840 --> 00:38:35,719
Speaker 1: year the truck could fetch about five thousand bucks and

826
00:38:35,760 --> 00:38:38,840
Speaker 1: that money would pay off the house several months faster.

827
00:38:39,239 --> 00:38:42,520
Speaker 1: Would you sell it? Well, I would say the value

828
00:38:42,600 --> 00:38:44,440
Speaker 1: of the truck, like how much they can get for

829
00:38:44,640 --> 00:38:47,200
Speaker 1: is only a part of the answer to this question,

830
00:38:47,239 --> 00:38:50,080
Speaker 1: because I think the bigger question is the ongoing cost

831
00:38:50,200 --> 00:38:53,160
Speaker 1: of keeping the truck. So I'm talking about the cost

832
00:38:53,160 --> 00:38:56,680
Speaker 1: of insurance, which has skyrocketed in recent years, but also

833
00:38:56,800 --> 00:38:57,960
Speaker 1: repairs and maintenance.

834
00:38:58,400 --> 00:39:01,000
Speaker 2: So even though this vehicle is close to full depreciation,

835
00:39:01,120 --> 00:39:03,600
Speaker 2: you're still losing money in other ways if you keep

836
00:39:03,640 --> 00:39:06,600
Speaker 2: it around. So holding on to it when you're using

837
00:39:06,640 --> 00:39:09,880
Speaker 2: it so little likely means that there isn't enough value,

838
00:39:10,360 --> 00:39:12,880
Speaker 2: and instead selling it is going to be smart for you.

839
00:39:13,200 --> 00:39:17,520
Speaker 2: So I love that you are prioritizing owning paid off vehicles,

840
00:39:17,520 --> 00:39:20,200
Speaker 2: which is a rare tack to take when it comes

841
00:39:20,239 --> 00:39:21,000
Speaker 2: to our transportation.

842
00:39:21,120 --> 00:39:24,520
Speaker 1: Yeah, all three of them owned. Yeah that's awesome, but

843
00:39:24,640 --> 00:39:27,040
Speaker 1: we've almost never heard of someone who's regretted. Reducing their

844
00:39:27,040 --> 00:39:29,000
Speaker 1: car fleet just makes life a lot simpler as well,

845
00:39:29,080 --> 00:39:31,960
Speaker 1: less clutter, and when it's like the largest item other

846
00:39:32,000 --> 00:39:35,160
Speaker 1: than your actual house that you own, I'm all four

847
00:39:35,200 --> 00:39:36,919
Speaker 1: clear and nothing out. But I think you're totally right

848
00:39:37,000 --> 00:39:40,120
Speaker 1: to point out not what you could gain, but point

849
00:39:40,120 --> 00:39:43,240
Speaker 1: out what you're actually losing month after a month, basically

850
00:39:43,320 --> 00:39:45,040
Speaker 1: in perpetuity by keeping that around.

851
00:39:45,200 --> 00:39:47,920
Speaker 2: Although I will say, okay, Devil's Advocate, I had a

852
00:39:47,960 --> 00:39:51,759
Speaker 2: friend who they ended up selling an old vehicle. Heads up,

853
00:39:51,960 --> 00:39:54,600
Speaker 2: get a quote from your insurance provider and see what

854
00:39:54,640 --> 00:39:57,400
Speaker 2: your premiums would go to because if you have teen drivers,

855
00:39:57,400 --> 00:40:01,640
Speaker 2: in particular, because my buddy, his teenage driver was on

856
00:40:01,719 --> 00:40:03,640
Speaker 2: the old was a full time driver because they have

857
00:40:03,680 --> 00:40:05,239
Speaker 2: to put him down as a full time driver on

858
00:40:05,360 --> 00:40:07,800
Speaker 2: the oldest car, and by getting rid of that old car,

859
00:40:08,560 --> 00:40:10,680
Speaker 2: they were forced to put him on a newer car.

860
00:40:10,840 --> 00:40:12,680
Speaker 2: And so what they ended up doing was reducing the

861
00:40:12,719 --> 00:40:15,080
Speaker 2: total number of cars that they had covered by car

862
00:40:15,080 --> 00:40:17,920
Speaker 2: insurance by this provider. And what happened to the premium,

863
00:40:18,000 --> 00:40:19,160
Speaker 2: It didn't, in fact go down.

864
00:40:19,480 --> 00:40:22,560
Speaker 1: It went up, okay, And so he was pulling his

865
00:40:22,600 --> 00:40:24,440
Speaker 1: hair out when he discovered that, because he thought there.

866
00:40:24,400 --> 00:40:27,560
Speaker 2: Was no way that that was likely at all a possibility.

867
00:40:27,600 --> 00:40:29,640
Speaker 2: But that is something. So that's the counter.

868
00:40:29,719 --> 00:40:32,840
Speaker 1: That's a smart tip. That's the counter to the cost

869
00:40:32,840 --> 00:40:35,520
Speaker 1: of insurance. Yeah, normally things like that. Normally you get

870
00:40:35,600 --> 00:40:37,359
Speaker 1: rid of a car from your fleet, your insurance cost

871
00:40:37,400 --> 00:40:40,719
Speaker 1: is going to go down. But you know, those rare

872
00:40:40,719 --> 00:40:42,600
Speaker 1: occasions it might not. So I think it's a good

873
00:40:42,600 --> 00:40:44,360
Speaker 1: point tenage driver's man, hop on the phone with your

874
00:40:44,400 --> 00:40:46,360
Speaker 1: insurance company first and figure out what that would look like.

875
00:40:46,360 --> 00:40:48,360
Speaker 1: And maybe you might say, oh, well, it's not going

876
00:40:48,400 --> 00:40:49,920
Speaker 1: to send me anything on insurance, or it's going to

877
00:40:49,960 --> 00:40:51,880
Speaker 1: send me so little to make it negligible. I'm going

878
00:40:51,960 --> 00:40:54,439
Speaker 1: to keep this puppy around because hey, it's not going

879
00:40:54,480 --> 00:40:58,080
Speaker 1: to cost me really any more money in depreciation, which

880
00:40:58,080 --> 00:41:01,960
Speaker 1: is the biggest nasty factor going against car owners. And

881
00:41:02,000 --> 00:41:03,880
Speaker 1: the plus side I guess of owning that car or

882
00:41:03,880 --> 00:41:06,160
Speaker 1: that truck for longer is that it's kind of convenient.

883
00:41:06,320 --> 00:41:08,600
Speaker 1: The value is not going to decline meaningfully. You've got

884
00:41:08,600 --> 00:41:10,680
Speaker 1: to spare when another car is in the shop or

885
00:41:10,719 --> 00:41:13,560
Speaker 1: something like that. But there are other solutions to that problem,

886
00:41:13,560 --> 00:41:16,919
Speaker 1: and I think that just require a little more inconvenience,

887
00:41:17,000 --> 00:41:19,600
Speaker 1: like renting a car, borrowing one from a friend in

888
00:41:19,640 --> 00:41:22,920
Speaker 1: a pinch, or uber like I think the sharing economy,

889
00:41:22,920 --> 00:41:25,080
Speaker 1: the reality of the sharing economy, it might be the

890
00:41:25,120 --> 00:41:27,920
Speaker 1: perfect solution, right to save this poster a bit of

891
00:41:27,920 --> 00:41:30,040
Speaker 1: money here. Plus, you don't have to worry about fixing

892
00:41:30,719 --> 00:41:33,360
Speaker 1: the old truck as more issues start to pop up

893
00:41:33,400 --> 00:41:35,960
Speaker 1: with it, as all of us know who have driven

894
00:41:36,040 --> 00:41:38,960
Speaker 1: older vehicles. Once you start getting to that point, I'm

895
00:41:38,960 --> 00:41:41,239
Speaker 1: not trying to We don't want people to get rid

896
00:41:41,280 --> 00:41:43,080
Speaker 1: of their old car trade up to a new car

897
00:41:43,120 --> 00:41:45,960
Speaker 1: because of potential fixes they'll have to make most of

898
00:41:46,000 --> 00:41:48,160
Speaker 1: the time. But the truth is the older the ride,

899
00:41:48,600 --> 00:41:50,000
Speaker 1: the more repairs you're gonna have to make, and it

900
00:41:50,080 --> 00:41:53,600
Speaker 1: just becomes a more dicey, difficult decision when the repair

901
00:41:53,680 --> 00:41:58,200
Speaker 1: bills get expensive and the value of the vehicle goes down.

902
00:41:58,800 --> 00:42:01,200
Speaker 1: And so getting rid of it while it's still running,

903
00:42:01,200 --> 00:42:03,960
Speaker 1: well maybe avoid you from having to make a decision

904
00:42:04,000 --> 00:42:06,879
Speaker 1: like that. Yeah, unloading it essentially before it's a problem.

905
00:42:07,160 --> 00:42:09,600
Speaker 2: I'll point a two. Getting five thousand dollars is cool.

906
00:42:09,960 --> 00:42:11,760
Speaker 2: You know, you get that money back in your hands.

907
00:42:11,800 --> 00:42:14,919
Speaker 2: You're talking about paying off the house early. I would

908
00:42:14,960 --> 00:42:19,200
Speaker 2: be very hesitant to do that considering where you are

909
00:42:19,360 --> 00:42:22,360
Speaker 2: on the amortization schedule of that house, the fact that

910
00:42:22,400 --> 00:42:24,719
Speaker 2: you're basically paying no money to the bank right now,

911
00:42:25,200 --> 00:42:27,400
Speaker 2: regardless of what your interest I mean, you're paying something,

912
00:42:27,560 --> 00:42:31,600
Speaker 2: but like relatively speaking, you're paying almost nothing, and regardless

913
00:42:31,640 --> 00:42:34,279
Speaker 2: of what your actual stated interest rate is, you are

914
00:42:34,320 --> 00:42:37,279
Speaker 2: paying much much, much less than that right now because

915
00:42:37,320 --> 00:42:39,560
Speaker 2: of where you are on the schedule. Most of the

916
00:42:39,600 --> 00:42:43,040
Speaker 2: money that's going towards your payment is actual principle, that

917
00:42:43,120 --> 00:42:44,480
Speaker 2: is paying down the balance of that house.

918
00:42:44,520 --> 00:42:46,799
Speaker 1: And so it's a complete opposite of those early months

919
00:42:46,800 --> 00:42:48,680
Speaker 1: and years of having the mortgage. I mean, you're literally

920
00:42:48,680 --> 00:42:51,719
Speaker 1: in like the last few months, like I can. I've

921
00:42:51,760 --> 00:42:56,040
Speaker 1: never been to that stage of the payment cycle, so

922
00:42:56,280 --> 00:42:58,680
Speaker 1: maybe that does something to you psychologically and maybe you

923
00:42:58,760 --> 00:43:00,759
Speaker 1: want to get rid of it sooner, But at least

924
00:43:00,920 --> 00:43:02,920
Speaker 1: I get the impulse Right now where I'm sitting, I'm

925
00:43:02,960 --> 00:43:05,759
Speaker 1: just like, uh, no way that. It's basically your.

926
00:43:05,680 --> 00:43:09,000
Speaker 2: Own money, So why pay it off when you don't

927
00:43:09,080 --> 00:43:10,759
Speaker 2: need to, and when instead what you could do is

928
00:43:10,800 --> 00:43:13,960
Speaker 2: invest that money, assuming that you are in a stage

929
00:43:13,960 --> 00:43:15,680
Speaker 2: of life where you are still growing your wealth, I

930
00:43:15,680 --> 00:43:18,320
Speaker 2: would one hundred percent be investing that money as opposed

931
00:43:18,320 --> 00:43:19,000
Speaker 2: to paying off that.

932
00:43:18,960 --> 00:43:22,360
Speaker 1: Debt or even saving honestly and just paid off as agreed,

933
00:43:22,640 --> 00:43:25,879
Speaker 1: just because, like you said, what you're actually forking over

934
00:43:25,880 --> 00:43:30,120
Speaker 1: an interest is infintestaly small and so prioritizing mortgage payoff

935
00:43:30,120 --> 00:43:32,520
Speaker 1: although I get the psychological benefit when you pay it

936
00:43:32,520 --> 00:43:35,000
Speaker 1: off as agreed, given kind of the terms you likely

937
00:43:35,040 --> 00:43:37,360
Speaker 1: have in place in that mortgage and where you stand

938
00:43:37,360 --> 00:43:40,080
Speaker 1: in it, it just makes almost no financial sense at all.

939
00:43:40,120 --> 00:43:43,040
Speaker 1: It's really only a psychological win that you get this, right, Joel.

940
00:43:43,080 --> 00:43:45,000
Speaker 1: The beer that you and I enjoyed today was a

941
00:43:45,040 --> 00:43:48,200
Speaker 1: spring which was a Belgian style white ale by one

942
00:43:48,239 --> 00:43:51,799
Speaker 1: of our favorites, creature comforts. This you know, it's called

943
00:43:51,800 --> 00:43:53,800
Speaker 1: a white, but I feel like this just tasted full

944
00:43:53,840 --> 00:43:58,920
Speaker 1: on like Belgian golden, Like not necessarily from the style golden.

945
00:43:58,920 --> 00:44:03,319
Speaker 1: I don't know. I just tasted like liquid gold. Really

946
00:44:03,400 --> 00:44:05,680
Speaker 1: enjoyed it, would you think, Yeah, I didn't quite have

947
00:44:05,920 --> 00:44:09,960
Speaker 1: Like the most famous beer in this style is Allagash White, right,

948
00:44:10,040 --> 00:44:12,799
Speaker 1: and it didn't quite have some of those like coriander

949
00:44:12,840 --> 00:44:15,279
Speaker 1: notes that that that beer has, and that's just a

950
00:44:15,280 --> 00:44:17,040
Speaker 1: classic beer. I mean, it's such a good beer. And

951
00:44:17,080 --> 00:44:20,359
Speaker 1: this beer I thought was fantastic. It was in that vein,

952
00:44:20,640 --> 00:44:22,480
Speaker 1: but a little bit different, a little more orange, a

953
00:44:22,480 --> 00:44:26,200
Speaker 1: little more floral, a little more refreshing, even a little crisper. Yeah.

954
00:44:26,200 --> 00:44:28,560
Speaker 1: I kind of want to try him side by side

955
00:44:28,160 --> 00:44:31,440
Speaker 1: to see the difference, because yeah, and this is not

956
00:44:31,480 --> 00:44:34,000
Speaker 1: my favorite beer style, but my goodness, especially this time

957
00:44:34,000 --> 00:44:36,680
Speaker 1: of year, I did it. I think that's pretty tasty. Yeah, totally.

958
00:44:36,800 --> 00:44:39,600
Speaker 2: The way I'm picturing an Aligash white is it's a

959
00:44:39,600 --> 00:44:41,640
Speaker 2: lot hazier and so like like it's got more of

960
00:44:41,640 --> 00:44:45,600
Speaker 2: those Belgian yeasts, whereas so it's like this really creamy, Yeah,

961
00:44:45,640 --> 00:44:47,880
Speaker 2: like you're drinking a lot of yeasts, whereas this seems

962
00:44:47,880 --> 00:44:50,319
Speaker 2: a lot more filtered, a lot more refreshing, but.

963
00:44:50,440 --> 00:44:53,439
Speaker 1: Perfect to enjoy during some of these spring time months.

964
00:44:53,600 --> 00:44:55,880
Speaker 1: Is it still spring technically? Yeah, it feels like spring

965
00:44:55,960 --> 00:44:56,640
Speaker 1: was like a month ago.

966
00:44:57,360 --> 00:44:59,719
Speaker 2: It's falling hot now, which means enjoying more of these

967
00:44:59,760 --> 00:45:03,440
Speaker 2: bad boys, buddy, But that's gonna be it for this episode.

968
00:45:03,480 --> 00:45:05,320
Speaker 2: You can find our show notes up on the website

969
00:45:05,960 --> 00:45:07,800
Speaker 2: at hownamoney dot com where we'll have some of the

970
00:45:07,840 --> 00:45:13,200
Speaker 2: different resources that we mentioned during this episode. And that's

971
00:45:13,239 --> 00:45:15,680
Speaker 2: gonna be it, so buddy, until next time, best Friends Out,

972
00:45:15,880 --> 00:45:17,360
Speaker 2: Best Friends Out.