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

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Speaker 1: and today we're talking rusty realtors, insurance issues, and equity expenditures.

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Speaker 1: That's right, man, these are the stories that we think

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Speaker 1: you need to be paying attention to this week because

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Speaker 1: they're the stories that are going to most directly impact

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Speaker 1: our finances. To pay attention to them during this episode.

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Speaker 1: You need to pay attention to these things because these

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Speaker 1: are the things that impact your bank account, you're spending,

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Speaker 1: how much it is that you're able to save and

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Speaker 1: invest and real quick. For some folks out there, this

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Speaker 1: actually might be a repeat of information anybody who actually

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Speaker 1: follows us on Instagram. But we wanted to mention that

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Speaker 1: we won an award. Joel, you have I'm not used

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Speaker 1: to this trophy, this award, this plaque that's now sits

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Speaker 1: here on a record, actual hardware. And so this is

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Speaker 1: this is the Fleck Media Award. It's for financial Literacy

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Speaker 1: and Education and communities given to the Hod of Money

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Speaker 1: podcast from the good folks over at Money Management International,

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Speaker 1: which is a service we talk about a lot, actually

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Speaker 1: a nonprofit that helps people in debt, credit card debt

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Speaker 1: and who need credit counseling. But yeah, they gave us

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Speaker 1: this sole thing. Man, it's kind of I don't know,

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Speaker 1: it felt it felt really sweet to get that it's

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Speaker 1: earned its place here on a recording table, the Soul

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Speaker 1: so the Soule Award. Also it sits there by itself. Yeah,

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Speaker 1: it's very lonely. So someone almost give us like an

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Speaker 1: oscar or something like that in addition to it. That

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Speaker 1: would fit. Well. So this isn't like a real Friday

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Speaker 1: flight story. But did you see this is a total

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Speaker 1: departure from awards or anything like that. But did you

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Speaker 1: see the promotion that Subway was running that if you

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Speaker 1: legally change your name to Subway. Yes, that which brought me,

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Speaker 1: you have the chance of letting free Subway for the

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Speaker 1: rest of.

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Speaker 2: Your life, which made me think about one of my

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Speaker 2: favorite TV shows, Community where Subway comes on campus and

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Speaker 2: there's actual a dude name Subway and it's it's hilarious.

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Speaker 2: But I remember that episode well, it was like multiple episodes.

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Speaker 1: They it was a character season.

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Speaker 2: Yeh, shut up, a character name Subway. So but yeah,

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Speaker 2: who played the character this? Okay, it was just a

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Speaker 2: guy who's there for a few Such a great show,

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Speaker 2: such a great show, but I don't remember that that series.

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Speaker 2: Though apparently ten thousand people or at least were down

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Speaker 2: for getting paid ten grand to legally change their name

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Speaker 2: to subway.

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Speaker 1: I guess did they get paid ten grand? Or was

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Speaker 1: subway for? Like? Oh, was it subway for? I thought

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Speaker 1: I get paid too, like free sandwiches. Maybe that's even

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Speaker 1: more valuable. I don't know. I mean, yeah, depending bepends

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Speaker 1: on how old you are and how many times you eat.

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Speaker 1: But nineteen year old me would have totally done that

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Speaker 1: because I loved Subway when I was a kid, like

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Speaker 1: specifically late high school, early college. You couldn't keep me

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Speaker 1: away from the way.

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Speaker 2: The question is, would forty year old Matt changed his

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Speaker 2: name legally for free sez.

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Speaker 1: I don't eat subway as much as I did in

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Speaker 1: my younger years specifically. But here's the thing. Though you

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Speaker 1: might have to legally change your name, that doesn't mean

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Speaker 1: that your friend have to call you subway.

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Speaker 2: That's just because it says says it on your subways

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Speaker 2: on your doesn't mean that you have to refer to

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Speaker 2: me a subway.

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Speaker 1: Yes, right, So I feel like there's a there's a

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Speaker 1: way around it.

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Speaker 2: I feel like if it was a contest where you

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Speaker 2: had to name yourself brisket for a free barbecue. I

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Speaker 2: would totally do that, but I just am not Subway.

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Speaker 2: You never know what's gonna happen. You never know what's happened,

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Speaker 2: what's gonna happen with the brand. Well, like I just

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Speaker 2: think BacT So I was a big fan of a subway.

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Speaker 2: Subway back before the whole Jared like that dude, right,

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Speaker 2: I watched like he kind of ruined it for me.

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Speaker 2: I watched the beginning of that documentary and it was devastating.

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Speaker 2: I can't I couldn't get Yeah, devastating. So I don't

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Speaker 2: know if I've ever shared this on the show before.

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Speaker 2: Have I talked about how I used to jump behind

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Speaker 2: the counter at subways? You you you've never talked about

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Speaker 2: this on the show, but you have mentioned sure really quickly.

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Speaker 1: But I did this a couple of times. But we

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Speaker 1: would show up at a subway, there's like a bunch

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Speaker 1: of us. There's like say one person working, and they're

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Speaker 1: just overwhelmed. All of a sudden, they've got a ton

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Speaker 1: of foot longs that they got that they gotta make.

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Speaker 1: And on more than one occasion, I was like hey,

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Speaker 1: do you want some help. I may have lived and

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Speaker 1: said that I used to work out a subway, but

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Speaker 1: in both instances, they're like, oh, yeah, sure, And so

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Speaker 1: I put the gloves on, jump back behind the bar,

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Speaker 1: and start making sandwiches for my friends. They're cracking up

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Speaker 1: because I think it's hilarious. It's because I was such

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Speaker 1: a fan of subway. I knew how to make all

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Speaker 1: the sandwiches. I knew what went out all the sandwiches,

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Speaker 1: and I think in both instances they let me walk

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Speaker 1: out of there with a free sandwich. They're like, hey,

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Speaker 1: don't worry about paying For years, I appreciate the help.

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Speaker 1: Now you and somewhere are going to be in legal

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Speaker 1: troubles for that, But that is it feels like something

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Speaker 1: from a bygone era. I feel like that would not

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Speaker 1: be allowed.

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Speaker 2: I think I think it was highlights is that both

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Speaker 2: you and I are willing to go to kind of

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Speaker 2: ridiculous links just to save money. Sometimes it makes me

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Speaker 2: think of, or for a laugh, of wrapping my car

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Speaker 2: and how that people thought it was the goofiest thing,

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Speaker 2: and for.

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Speaker 1: You do that not when you were eighteen, but when

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Speaker 1: you were thirty.

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Speaker 2: Exactly, And people are like, what do you really are

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Speaker 2: you that hard up? And I'm like no, I'm just

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Speaker 2: willing to do like a lot of things to save

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Speaker 2: or make it a little bit of money, which I

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Speaker 2: think is a good way to go through life, Like

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Speaker 2: don't don't be too proud to do something silly.

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Speaker 1: Should make that all things considered.

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Speaker 2: Yeah, okay, but let's move on to the Friday flight

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Speaker 2: mat the real stories, the real stories that we found

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Speaker 2: interesting this week on the personal finance front, and let's

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Speaker 2: talk about jobs for a second. The job market is

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Speaker 2: it's still great for basically almost everyone, right. Unemployment levels

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Speaker 2: remain near all time lows. There are apparently still one

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Speaker 2: point six jobs for everyone who's hunting for one, which

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Speaker 2: is good news for the economy and for workers across

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Speaker 2: the country for wages and for the ability to go

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Speaker 2: get a better job or a different job if that's

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Speaker 2: what they're going forth, that's what they're interested in. And

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Speaker 2: it's it's not blazing like it was a year ago,

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Speaker 2: but workers still have.

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Speaker 1: A lot of laboratory it's not Yeah, it's not two

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Speaker 1: job openings for every applicant, right, everybody that's looking for

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Speaker 1: a job.

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Speaker 2: Yes, so it's died down a little bit, but still

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Speaker 2: workers are in control right now in the job market.

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Speaker 2: But there's one exception, and I found this interesting matter.

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Speaker 2: It's a really bad time to be a realtor. In particular,

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Speaker 2: stats show that there are something like two and a

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Speaker 2: half reeltors for every house that's currently on the market.

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Speaker 1: Yeah, the complete opposite Yeah of when the job market

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Speaker 1: was boom and Lene.

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Speaker 2: Right, it's like the ratio you normally want. It's probably

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Speaker 2: the exact opposite, like multiple homes for every realtor. But

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Speaker 2: this is just not great news if you're a realtor currently,

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Speaker 2: and it's even worse, by the way, if you're trying

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Speaker 2: to break into the business. If you're like, you know

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Speaker 2: what that's going to be my tickets to riches or

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Speaker 2: my new job is going into real estate. Well, realtors

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Speaker 2: are hard up right now. And familters how many tough

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Speaker 2: time and programmers software well just with AI and now

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Speaker 2: that's putting the kabash on hiring at least in that sectors.

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Speaker 2: Lenders to think about all the people that are doing

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Speaker 2: home refinances and now they're not really doing it not

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Speaker 2: so much.

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Speaker 1: Yeah, I saw that there are six hundred thousand more

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Speaker 1: realtors than there are actual homes listed. I was just insane,

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Speaker 1: But this is happening for a few reasons. One, there

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Speaker 1: aren't many houses for sale, and you know, with higher

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Speaker 1: interest rates, folks are less likely they don't have a

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Speaker 1: desire to move because they don't want to give up

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Speaker 1: that sweet rate. We've talked about that. But secondly, a

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Speaker 1: lot of realtors they only dabble, right that they work

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Speaker 1: part time, and some industries like this there are more

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Speaker 1: cyclical than others. It makes me think back to when

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Speaker 1: I was a photographer. There are a lot of photographers

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Speaker 1: that just dabbled because the barrier to entry. Yeah, to

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Speaker 1: get yourself a digital camera and take some pictures, that's

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Speaker 1: that's fairly easy. It's a lot harder to make that

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Speaker 1: a full time gig like we did. But there's a

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Speaker 1: lot of folks that would pick up the camera and

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Speaker 1: shoot some say during the fall when family sessions are booming,

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Speaker 1: because folks are wanting to get those pictures taken for

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Speaker 1: their Christmas card. Yeah, the holidays coming up. But what

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Speaker 1: this means for you as a consumer is that you

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Speaker 1: need to be careful who it is that you choose

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Speaker 1: to represent you within a real estate transaction. If you

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Speaker 1: actually are buying a home because a bad or a

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Speaker 1: rusty realtor, there you go. That could end up costing

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Speaker 1: you money. A recent piece in Insider It details how

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Speaker 1: easy it is to become a realtor in many states. Again,

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Speaker 1: the bar to entry is fairly low. It's like a

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Speaker 1: multiple choice question. Tests that you take it two plus two,

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Speaker 1: you could be a realtor. It's not that easy to

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Speaker 1: all of our real realtor friends out there. But if

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Speaker 1: you offer an agent who isn't at the top of

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Speaker 1: their game, you could be getting subpard i, which is

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Speaker 1: going to cost you serious money in the home buying process.

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Speaker 1: The ideal choice is to find an agent who has

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Speaker 1: been working in your neighborhood regularly for years. They know

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Speaker 1: the ends and the now, they know individuals, and they've

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Speaker 1: obviously got rave reviews from friends and neighbors. That's the

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Speaker 1: kind of agent that you want to be looking for,

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Speaker 1: not somebody that you just whose name you just happen

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Speaker 1: to see on a single sign. You see a name

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Speaker 1: on a bunch of signs, that's good. But if you

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Speaker 1: just happen to choose a name because it sounds cool,

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Speaker 1: that's not how you know about it.

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Speaker 2: That person goes to your church or you. If they

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Speaker 2: don't do much business, then you probably want to go

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Speaker 2: with a realtor who does more business. Not necessarily the

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Speaker 2: person on the billboard. I wouldn't necessarily she's that person either,

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Speaker 2: But yeah, I think you want to choose someone.

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Speaker 1: You avoid the extremes. Yes, yeah, exactly.

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Speaker 2: Well and just makes me think of Matt someone buying

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Speaker 2: a home in your neighborhood. Right now, this was a

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Speaker 2: it was an off market listing, like it never actually

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Speaker 2: made it to MLS. And so the people who know

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Speaker 2: about that stuff are the realtors who do a lot

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Speaker 2: of business, and they might have a lead on deals

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Speaker 2: that other realtors might not know about. And so who

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Speaker 2: you choose to represent you matters. And by the way,

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Speaker 2: speaking of realtors, there have been a bunch of lawsuits

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Speaker 2: through the years that have been filed against the National

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Speaker 2: Association of Realtors for essentially being a monopoly right, and

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Speaker 2: those are still working their way through the court system.

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Speaker 2: But if the plaintiffs win, there's likely to be a

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Speaker 2: massive shift in the way agents get paid, which we

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Speaker 2: think would be a good thing. There are some estimates

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Speaker 2: that actually predict that consumers would save like twenty to

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Speaker 2: thirty billion dollars every single year if this stranglehold the

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Speaker 2: three percent fee sort of payment system times to get

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Speaker 2: struck down. Yeah, yeah, six percent exactly. And it's not

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Speaker 2: that agents shouldn't get paid. Like Matt, you and I,

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Speaker 2: we use agents when we buy and sell homes, and

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Speaker 2: we've had great experiences. We've got great agents that are

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Speaker 2: you know, they're worth a lot. It's just that almost

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Speaker 2: nothing else in the world works on a flat percentage

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Speaker 2: feed like that, right, and this this system deserves a shakeup.

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Speaker 2: So I would love I'm kind of waiting with baited

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Speaker 2: breath to see what happens with some of these lawsuits

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Speaker 2: because it's going to be good for consumers if this

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Speaker 2: model gets kind of torn us under.

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Speaker 1: Yeah. One of the like the NRA, right, So the

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Speaker 1: National Association Realtors the argument that they're in RA. I'm sorry,

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Speaker 1: and those are two very very different groups of people,

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Speaker 1: but their argument is that it's the best model because

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Speaker 1: some of the folks are advocating for like a flat fee, right,

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Speaker 1: just like okay, just say it's going to cost us

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Speaker 1: much and this is how much that you get paid.

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Speaker 1: The argument against that is that, well, there's a lot

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Speaker 1: of folks who are have less money, right, Like, if

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Speaker 1: you have a smaller, smaller home or a home that's

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Speaker 1: not going to sell for very much, they're not necessarily

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Speaker 1: in a position to pay an upfront fee. And so

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Speaker 1: I mean, I think the percentage framework, I think that

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Speaker 1: that can still work, but it's just it's got to

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Speaker 1: come down. Yeah, Like that's the biggest issue is that

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Speaker 1: it is such it's like six you're paying six percent

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Speaker 1: if you're selling your house, and that is so much money.

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Speaker 1: It makes me think back to like financial advisors who

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Speaker 1: have portfolios that they over like the assets under management

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Speaker 1: style or whatever, and like that's even that you're looking

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Speaker 1: at one percent, And with like ETFs and neutral funds,

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Speaker 1: you've seen the expense ratios on those things come down

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Speaker 1: over the years as technology has allowed individuals access directly

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Speaker 1: to be able to invest. I'm actually kind of surprised

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Speaker 1: that different platforms like Zilo, where folks are very comfortable

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Speaker 1: going on there and searching themselves, that they haven't introduced

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Speaker 1: some sort of marketplace that is able to eliminate so

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Speaker 1: much of the mentalmen when it comes to the ability

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Speaker 1: to purchase a home or in this case, selling a

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Speaker 1: home without having to pay gigantic fees.

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Speaker 2: I mean redfinn is trying to do that. They've been

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Speaker 2: trying to break that three percent. Few model take it

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Speaker 2: down to like one and a half and one percent

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Speaker 2: in some cases. But it's just hard when there's things

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Speaker 2: more folks with m less monopoly. Yeah, yeah, it's true.

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Speaker 1: Yeah, And again I don't want to short change realtors

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Speaker 1: because there's a lot of folks. This is the largest

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Speaker 1: purchase that you ever make in your entire life, and

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Speaker 1: so there are a lot of folks who are really

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Speaker 1: nervous about that. I understand that. And so the ability

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Speaker 1: to have somebody who has done many, many of these

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Speaker 1: transactions to walk alongside you, to hold your hand, to

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Speaker 1: provide that negotiating experience. There's so much value that they

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Speaker 1: do bring. It's just that is at worth six percent,

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Speaker 1: and when you're talking about more expensive homes, that is

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Speaker 1: a ton a ton of money for sure.

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Speaker 2: Well, the other upside to reducing realtor fees, I think

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Speaker 2: it would help lubricate the real estate market. Like if

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Speaker 2: the price the transaction costs go way down, people are

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Speaker 2: going to be much more likely to sell their home,

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Speaker 2: even if it means giving up a sweet interest.

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Speaker 1: Right, and then does that all of a sudden cause

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Speaker 1: prices to go up even more? Who knows? Yeah or yeah?

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Speaker 1: Yeah either way?

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Speaker 2: Yeah, all right, let's talk about something else on the

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Speaker 2: homeowner front, homeowners insurance and listener Anastasia she sent us

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Speaker 2: an interesting article last week about insurance specifically in the

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Speaker 2: state of Florida. But I think there's something that we

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Speaker 2: can all take away from the article that she sent over. First,

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Speaker 2: Florida and California are two of the biggest states in

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Speaker 2: the nation, and these are the two that are both

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Speaker 2: losing insurance companies, which is going to drive up costs

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Speaker 2: in both of those states on insurance, and the reasons

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Speaker 2: why are completely different though. Right, this might be the

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Speaker 2: most simplistic explanation ever, But insurance companies are bowing out

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Speaker 2: of doing business in Florida because of the increased risk

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Speaker 2: they endure, largely because of hurricanes.

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Speaker 1: Yeah, And honestly, I don't think that's oversimplifying. Like literally,

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Speaker 1: it's what is it a peninsula like sticks out there, sure,

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Speaker 1: out in the ocean, a big finger out in the ocean. Yeah,

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Speaker 1: right in the eye of the ocean. Hurricanes love to

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Speaker 1: just cut that corner. They do.

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Speaker 2: It's what happens, It's true. And yeah, and so Florida homeowners,

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Speaker 2: they already pay some of the highest home insurance prices

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Speaker 2: in the nation, and they're likely to get even higher

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Speaker 2: as companies reduce their presence, issue fewer policies, cancel some

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Speaker 2: of the policies that they currently have with consumers, or

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Speaker 2: maybe they just like leave completely, they skid out all

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Speaker 2: they're out of there.

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Speaker 1: Yeah, they have the insurance companies, they've been losing money

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Speaker 1: for years in Florida. It's kind of been like a

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Speaker 1: lost leader in a sense for those businesses. Peron's not

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Speaker 1: really leaving anything but more losses. But California it's another story.

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Speaker 1: Insurers are leaving there because they're also dealing with large payouts,

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Speaker 1: mainly due to the risk that wildfire's pose. I saw

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Speaker 1: that in the past five years, something like thirty nine

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Speaker 1: thousand homes have been destroyed due to fires. Wow, that

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Speaker 1: is so I had a hard time understand, like, Okay,

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Speaker 1: is that a lot of homes or maybe this not

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Speaker 1: that many. There are eighty thousand single family homes in

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Speaker 1: the city of Atlanta, so it's almost as if half

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Speaker 1: marched through and just like burned up half of the city.

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Speaker 1: But as many insurance companies are looking for for reasons

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Speaker 1: to cancel policies, they're like, so they're even using drones

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Speaker 1: to identify trouble spots on different properties to degenerate reasons

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Speaker 1: for cancelation. That's a bit extreme, it's a bit ridiculous,

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Speaker 1: of course, but it's true. Insurance companies are doing that.

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Speaker 1: But a big problem is that the state, they are

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Speaker 1: refusing to let these insurers increase premiums on homeowners, which

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Speaker 1: will of course, it's going to decrease competition because these

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Speaker 1: insurers are pulling out altogether, and it's going to lead

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Speaker 1: to a more strained insurance market within the state of California.

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Speaker 1: That's a perfect example of government policy completely backfiring and

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Speaker 1: instead of helping those that they're seeking to protect, like,

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Speaker 1: it's literally causing them more harm.

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Speaker 2: Church companies are saying, no, no, look look at the numbers.

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Speaker 2: We are losing money. I think All State just had

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Speaker 2: their credit rating down graded, kind of like the United

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Speaker 2: States just had their credit rating downgraded last week as

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Speaker 2: a country, like All State just did, and so insurance

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Speaker 2: are insurance companies are facing tough times. They're trying to

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Speaker 2: increase premiums to make up for the losses they're experiencing

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Speaker 2: and win.

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Speaker 1: But if you can't do that, right, what do you say?

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Speaker 1: You say, all right, well then we're gonna pull yeah,

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Speaker 1: providing coverage within the state, right, more policies in Idaho,

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Speaker 1: I guess, or something like that. I don't know, but yeah,

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Speaker 1: like that. The number of insurance companies in Florida that left,

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Speaker 1: it's staggered. I couldn't believe it. Like in the past

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Speaker 1: eighteen months, I think it's like fifteen stopped writing new

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Speaker 1: policies in Florida. Three of them just said, yeah, we're

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Speaker 1: out of here altogether, and like a bunch of others

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Speaker 1: just went bankrupt.

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Speaker 2: Like yeah, they were insolvent. So I guess, first off,

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Speaker 2: just don't an emoji tier face. For people in California

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Speaker 2: and in Florida, it is difficult to own.

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Speaker 1: It's tough.

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Speaker 2: It's really really tough, and there's no easy solution. But

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Speaker 2: in general, right, even not in those two states, prices

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Speaker 2: for insurance have gone up quite a bit, right. The

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Speaker 2: cost of supplies and labor have risen a whole lot

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Speaker 2: over the past few years, and that means that repair

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Speaker 2: bills right when a claim gets filed are more substantial.

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Speaker 2: I think about at the tree growing through our house.

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Speaker 2: We're finally just about the dumpster gets taken away today, Like, yeah,

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Speaker 2: very nice.

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Speaker 1: I know our neighbors are gonna be able to get

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Speaker 1: your garage back. I know. That's honestly the biggest downside

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Speaker 1: of that on that dumpster.

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Speaker 2: That's true, our neighbors are gonna be thankful to like, well,

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Speaker 2: they'll like us more now that we don't have dumps around,

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Speaker 2: Like glad, we don't have a rat problem anymore. But

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Speaker 2: to add to the pricing problem, right, home values have

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Speaker 2: increased substantially too. It's been a perfect storm that's led

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Speaker 2: to these increasing insurance rates and coverage is getting more sparse.

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Speaker 2: Right These insurers are saying, well, okay, well, if I

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Speaker 2: have to write the policy, well then I'm just not

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Speaker 2: I'm going to write less favorable terms for the consumer.

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Speaker 2: The coverage is going to be smaller, and that's the

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Speaker 2: only way you're going to be able to maybe not

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Speaker 2: see a massive increase in your premiums. It's just not

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Speaker 2: easy right now, right, And so it's regardless of where

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Speaker 2: you live, shop around. If you're looking to hit the button,

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Speaker 2: just enter your information over at policygenius dot com, get

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Speaker 2: some quotes from insurance companies they work with, or you

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Speaker 2: can always reach out to an independent broker or agent

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Speaker 2: over at Trusted Choice dot com as well. That can

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Speaker 2: be easy, but don't take it lying down. It's not

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Speaker 2: easy to fight back against these price increases. They're happening

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Speaker 2: no matter what. But you still have a role. There's

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Speaker 2: still something you can do to be able to save

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Speaker 2: money while it's happening.

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Speaker 1: That's all right. Well, we've got additional stories to get to,

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Speaker 1: including Joel whether or not we will be able to

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Speaker 1: continue watching our favorite Disney Plus content. We'll get to

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Speaker 1: that story plus others right after this.

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Speaker 2: All right, Matt, The Friday flight continues, and it looks

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Speaker 2: like you might not be able to watch in Conto

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Speaker 2: anymore soon.

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Speaker 1: Talk about a spike in popularity and the ensuing just decreases. Yeah,

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Speaker 1: I mean, you can't talk about Bruno. That was everywhere

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Speaker 1: I know what three months. I haven't heard it in

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Speaker 1: a while now, but I know you. The fire stayed

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Speaker 1: lift for you the whole time. You love that we

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Speaker 1: have enjoyed it. I will say Westy, our youngest, he

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Speaker 1: recently discovered it, like over the summer, there's just there's

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Speaker 1: more TV watching Goal. Yeah, let's be honest. And when

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Speaker 1: they're not in school, and he was walking around saying,

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Speaker 1: we don't talk about Bruno even though he didn't even

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Speaker 1: say it. Right, it's only three, but that's awesome.

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Speaker 2: All right, Let's get to our Lucro's headline of the

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Speaker 2: week before we get to that story. And this one

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Speaker 2: comes from Investment News and listener Gabe sent this one

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Speaker 2: our way and it reads stop contributing to IRA's and

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Speaker 2: four oh one K's no wonder. Gabe said, this one

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Speaker 2: our way, this is.

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Speaker 1: Doesn't sound like the kind of kind of advice that

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Speaker 1: we would get.

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Speaker 2: Sounds like financial malpractice. But you know, we've had listeners,

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Speaker 2: by the way, Matt before, especially participating in the how

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Speaker 2: to Money Facebook group, who were really really into real

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Speaker 2: estate investing, and they made similar claims. They are like,

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Speaker 2: why would you that was their argument put money in

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Speaker 2: that scam four oh one K or Ira, when you

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Speaker 2: could you know triple what you're going to make by

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Speaker 2: investing in real estate and you and I were not

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Speaker 2: against real estate investing. In fact, we'll talk to somebody

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Speaker 2: next week who is like one of our favorite real

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Speaker 2: estate investor influences creators out there. But why would a

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Speaker 2: semi respectable site their rights about investing really want the

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Speaker 2: masses to stop contributing to their retirement accounts?

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Speaker 1: Completely?

434
00:19:10,080 --> 00:19:12,640
Speaker 2: Right? It turns out no, that's not what they're after.

435
00:19:12,840 --> 00:19:15,200
Speaker 2: They were just going for a shocking headline, which that's

436
00:19:15,240 --> 00:19:17,879
Speaker 2: the internet thea's surprise, right, But the main gist of

437
00:19:17,880 --> 00:19:19,880
Speaker 2: this article we actually agree with. Right.

438
00:19:19,880 --> 00:19:22,719
Speaker 1: They basically wanted folks to know that WROTH accounts are

439
00:19:22,760 --> 00:19:25,960
Speaker 1: better than traditional accounts for most folks. They don't want

440
00:19:25,960 --> 00:19:28,520
Speaker 1: you to contribute nothing, They just want you to instead

441
00:19:28,960 --> 00:19:31,600
Speaker 1: funnel that money into the WROTH. All those contributions send

442
00:19:31,640 --> 00:19:33,720
Speaker 1: them into the ROTH four one K and IRA instead

443
00:19:33,760 --> 00:19:36,520
Speaker 1: of the traditional versions. You'll be much better off. Yeah, yeah,

444
00:19:36,600 --> 00:19:38,840
Speaker 1: the Beauty of the Wroth. IRA will link to that

445
00:19:38,880 --> 00:19:41,240
Speaker 1: in our show notes. But it's a silly headline, but

446
00:19:41,240 --> 00:19:44,800
Speaker 1: they're spot on. We have been all about roth's basically

447
00:19:44,880 --> 00:19:47,760
Speaker 1: since since day one for most people, because I mean

448
00:19:48,359 --> 00:19:50,800
Speaker 1: the downside, Yes, you miss out on the tax break now,

449
00:19:51,440 --> 00:19:53,960
Speaker 1: but given where tax rates are, when we take a

450
00:19:53,960 --> 00:19:56,960
Speaker 1: look back at history, they're actually fairly low. And given

451
00:19:57,000 --> 00:19:59,959
Speaker 1: our country's current fiscal situation, and we talked about this

452
00:20:00,080 --> 00:20:03,320
Speaker 1: last week, tax rates are very likely going to be

453
00:20:03,400 --> 00:20:06,600
Speaker 1: going up come end of twenty twenty five. And in

454
00:20:06,640 --> 00:20:10,040
Speaker 1: addition to switching those contributions from traditional to ROTH, it

455
00:20:10,080 --> 00:20:12,560
Speaker 1: actually might even make sense for some people to come

456
00:20:12,600 --> 00:20:16,520
Speaker 1: up with a WROTH conversion strategy for the money that

457
00:20:16,560 --> 00:20:19,879
Speaker 1: they currently have sitting within a traditional IRA or a

458
00:20:20,000 --> 00:20:22,040
Speaker 1: traditional four one K account. You do need to be

459
00:20:22,119 --> 00:20:25,800
Speaker 1: strategic about this because of the tax consequences, Like once

460
00:20:25,840 --> 00:20:28,560
Speaker 1: you make that conversion, the taxes are going to be

461
00:20:28,640 --> 00:20:31,280
Speaker 1: due because of course those were those accounts were funded

462
00:20:31,320 --> 00:20:33,439
Speaker 1: with pre tax dollars and so by moving it to

463
00:20:33,600 --> 00:20:36,560
Speaker 1: a post tax account, well you got to get tax.

464
00:20:36,600 --> 00:20:38,919
Speaker 1: That's yeah, don't hear us sayings tax the ross are

465
00:20:38,960 --> 00:20:41,959
Speaker 1: so much better that you should go and convert two

466
00:20:42,080 --> 00:20:45,680
Speaker 1: hundred k in IRA money right now to traditional iron

467
00:20:45,680 --> 00:20:48,960
Speaker 1: money to WROTH money because huge tax bill.

468
00:20:49,080 --> 00:20:51,159
Speaker 2: If you got a word plan, Yeah, it takes a

469
00:20:51,160 --> 00:20:52,960
Speaker 2: lot of planning to get this right, and you might

470
00:20:53,000 --> 00:20:55,000
Speaker 2: find that you don't have the money to pay the

471
00:20:55,040 --> 00:20:57,120
Speaker 2: taxman when that happened to pay the piper yeah, it's

472
00:20:57,119 --> 00:20:59,680
Speaker 2: typically something that you want to do gradually, and honestly.

473
00:20:59,440 --> 00:21:04,159
Speaker 1: We we should maybe work on a Roth conversion or

474
00:21:04,160 --> 00:21:06,240
Speaker 1: a rap Roth conversion ladder article up on the site

475
00:21:06,240 --> 00:21:08,520
Speaker 1: because it can get confusing. But this is how if

476
00:21:08,520 --> 00:21:10,440
Speaker 1: you are into early retirement, this is how you're able

477
00:21:10,440 --> 00:21:14,560
Speaker 1: to tap those retirement dollars early by setting up a

478
00:21:14,640 --> 00:21:17,560
Speaker 1: Roth conversion ladder. So basically by moving it from one

479
00:21:17,600 --> 00:21:19,800
Speaker 1: of those pre tax accounts like a four to one

480
00:21:19,840 --> 00:21:22,600
Speaker 1: K or traditional IRA and moving it over to a

481
00:21:22,600 --> 00:21:25,480
Speaker 1: Wroth IRA, you're able to tap those funds because they

482
00:21:25,560 --> 00:21:29,880
Speaker 1: count as quote unquote contributions from those other accounts as

483
00:21:29,880 --> 00:21:31,680
Speaker 1: long as you've got to wait five years. But after

484
00:21:31,760 --> 00:21:34,359
Speaker 1: those five years are up, you have access to that money,

485
00:21:34,400 --> 00:21:36,359
Speaker 1: or that money can just sit there and continue to

486
00:21:36,359 --> 00:21:38,600
Speaker 1: grow tax free. You withdraw it tax free, but also

487
00:21:38,640 --> 00:21:40,680
Speaker 1: if you want to pull it early, it's penalty free

488
00:21:40,800 --> 00:21:41,480
Speaker 1: as well. Right.

489
00:21:41,480 --> 00:21:44,760
Speaker 2: I think the biggest takeaway though is for listeners who say, oh,

490
00:21:44,800 --> 00:21:47,200
Speaker 2: I love getting the tax break, it's so fun, so nice,

491
00:21:47,400 --> 00:21:49,600
Speaker 2: but that you're going to pay the tax at some point,

492
00:21:49,840 --> 00:21:51,679
Speaker 2: and you might pay at a much higher rate in

493
00:21:51,720 --> 00:21:54,080
Speaker 2: the future, and so taking the Wroth in the hand

494
00:21:54,160 --> 00:21:56,960
Speaker 2: right now is for a whole lot of folks, Not

495
00:21:57,000 --> 00:21:58,560
Speaker 2: for everyone, but for a whole lot of folks, is

496
00:21:58,640 --> 00:22:01,480
Speaker 2: the better choice. Even though it means paying more in

497
00:22:01,560 --> 00:22:05,160
Speaker 2: tax today, it's gonna mean a whole lot less tax

498
00:22:05,200 --> 00:22:05,680
Speaker 2: in the future.

499
00:22:05,760 --> 00:22:06,760
Speaker 1: That's what we believe, yep.

500
00:22:06,880 --> 00:22:09,760
Speaker 2: And it's also true in a lot of ways too.

501
00:22:09,840 --> 00:22:11,800
Speaker 2: Just well, I don't know, it's complex. Well, well we'll

502
00:22:11,840 --> 00:22:13,280
Speaker 2: leave it there for now. All right, let's talk about

503
00:22:13,280 --> 00:22:15,399
Speaker 2: streaming for a second, Matt, Disney Plus and Hulu are

504
00:22:15,440 --> 00:22:18,280
Speaker 2: about to start charging people more money. AD free versions

505
00:22:18,320 --> 00:22:22,440
Speaker 2: are going up in price in October by twenty seven

506
00:22:22,480 --> 00:22:25,560
Speaker 2: percent and twenty percent, respectively. So it's not just a

507
00:22:25,880 --> 00:22:28,200
Speaker 2: tiny little bitty hike to keep up with inflation. It's

508
00:22:28,240 --> 00:22:31,240
Speaker 2: like a no time to turn on the earnings bigot

509
00:22:31,320 --> 00:22:33,679
Speaker 2: for the for Disney right, and so that means that

510
00:22:33,720 --> 00:22:36,240
Speaker 2: Disney Plus has doubled in prices at launch just a

511
00:22:36,240 --> 00:22:38,760
Speaker 2: few years ago. Not only that, though, they're taking a

512
00:22:38,800 --> 00:22:40,879
Speaker 2: page out of the Netflix playbook, and they plan a

513
00:22:40,880 --> 00:22:44,359
Speaker 2: crackdown on password sharing. So you and I we currently

514
00:22:44,400 --> 00:22:46,160
Speaker 2: share this Disney Plus log in so you can watch

515
00:22:46,160 --> 00:22:48,600
Speaker 2: in conto with your son. But if the prices go

516
00:22:48,720 --> 00:22:51,720
Speaker 2: up and we can't share. I feel like Disney's on

517
00:22:51,720 --> 00:22:53,520
Speaker 2: the chopping block the rest, right, it's a different prop

518
00:22:53,640 --> 00:22:55,000
Speaker 2: is this it's like a double price increase.

519
00:22:55,080 --> 00:22:57,520
Speaker 1: Well, in one of the reasons they're doing this, their

520
00:22:57,560 --> 00:23:01,480
Speaker 1: plan previously was expanding to other markets, but that's really

521
00:23:01,520 --> 00:23:05,680
Speaker 1: really expensive, and it's some of those subscribers don't stick

522
00:23:05,720 --> 00:23:07,920
Speaker 1: around either, and so they're trying to squeeze more money

523
00:23:07,960 --> 00:23:11,800
Speaker 1: out of their existing customers, you and me, because they're

524
00:23:11,800 --> 00:23:16,000
Speaker 1: counting on consumer inertia, like status quo bias kicks in

525
00:23:16,080 --> 00:23:17,320
Speaker 1: and you think, well, I don't want to do this.

526
00:23:17,600 --> 00:23:19,639
Speaker 1: We do not want you to be like those individuals

527
00:23:19,680 --> 00:23:22,520
Speaker 1: who are just like, oh, well it's already set up.

528
00:23:22,560 --> 00:23:24,359
Speaker 1: I don't want to have to create a new password

529
00:23:24,400 --> 00:23:27,520
Speaker 1: if I want to resubscribe that whole thing. No, if

530
00:23:27,520 --> 00:23:29,280
Speaker 1: you are not getting the value out of this scene, Yeah,

531
00:23:29,320 --> 00:23:30,680
Speaker 1: like you said, it should be on the chopping block.

532
00:23:30,840 --> 00:23:32,879
Speaker 2: And I know there's a new half season of Bluey

533
00:23:32,920 --> 00:23:35,600
Speaker 2: and it's it's great, and but has it already come out?

534
00:23:35,680 --> 00:23:37,280
Speaker 1: Yeah? I think okay, yeah, I thought they both come

535
00:23:37,320 --> 00:23:39,000
Speaker 1: out over the summer. Did one come out at the

536
00:23:39,640 --> 00:23:41,560
Speaker 1: end of the summer. I don't know. That's a good question.

537
00:23:41,600 --> 00:23:44,480
Speaker 1: I know I can't watch dude. I wish I had

538
00:23:45,000 --> 00:23:47,840
Speaker 1: enough time to sit down with the kids and watch

539
00:23:48,000 --> 00:23:49,640
Speaker 1: Blue because it's the best kids show.

540
00:23:49,720 --> 00:23:51,640
Speaker 2: Yeah it really is. Far it really is. But here's

541
00:23:51,680 --> 00:23:54,040
Speaker 2: the thing. My kids might be, you know, crying into

542
00:23:54,040 --> 00:23:56,520
Speaker 2: their blankets because they might be upset, but there's no

543
00:23:56,520 --> 00:23:58,639
Speaker 2: more Bluey. Loyalty is going to cost you, right, and

544
00:23:58,720 --> 00:24:00,719
Speaker 2: like we always say, you can cancel and you can

545
00:24:00,760 --> 00:24:04,000
Speaker 2: always subscribe again later. So yeah, if there's a specific

546
00:24:04,000 --> 00:24:06,159
Speaker 2: show you want to watch, sign up and then cancel

547
00:24:06,240 --> 00:24:07,040
Speaker 2: after you've watched it.

548
00:24:07,080 --> 00:24:07,840
Speaker 1: Be strategic.

549
00:24:07,960 --> 00:24:11,880
Speaker 2: Yeah, don't be loyal just because for the sake of loyalty.

550
00:24:11,920 --> 00:24:15,360
Speaker 2: As all these streaming services continue to just massively increase

551
00:24:15,400 --> 00:24:18,239
Speaker 2: what they're charging, it's i mean starting to feel on

552
00:24:18,359 --> 00:24:21,480
Speaker 2: par with, if not exceeding, what cable bills used to be.

553
00:24:21,720 --> 00:24:24,119
Speaker 1: That's right, man. All right, let's talk about some credit

554
00:24:24,119 --> 00:24:27,679
Speaker 1: card debt because we have officially hit the one trillion

555
00:24:27,680 --> 00:24:30,639
Speaker 1: dollars in credit card debt mark. This is actually we

556
00:24:30,680 --> 00:24:32,320
Speaker 1: kind of jumped the gun slightly on this, like maybe

557
00:24:32,320 --> 00:24:34,080
Speaker 1: a couple months ago, and we were talking about this.

558
00:24:34,280 --> 00:24:36,320
Speaker 1: It wasn't official from the FED yet, but we knew

559
00:24:36,320 --> 00:24:39,159
Speaker 1: we were Yeah, we knew what was having. And of

560
00:24:39,200 --> 00:24:42,119
Speaker 1: course this headline number is not great, one trillion dollars,

561
00:24:42,160 --> 00:24:44,960
Speaker 1: but it's also maybe not as bad as you might think.

562
00:24:45,440 --> 00:24:49,199
Speaker 1: Consumer debt. It is still below the US norm. Actually

563
00:24:49,600 --> 00:24:52,199
Speaker 1: credit card debt. It's actually just six percent of the

564
00:24:52,200 --> 00:24:56,080
Speaker 1: total deposits that households have in the bank, which is

565
00:24:56,160 --> 00:25:00,119
Speaker 1: basically the lowest percentage in the past twenty years. It

566
00:25:00,119 --> 00:25:03,040
Speaker 1: was actually double that twenty years ago. So I'm playing

567
00:25:03,040 --> 00:25:07,320
Speaker 1: devil's advocate here. That was the arguments saying, hey, it's

568
00:25:07,359 --> 00:25:09,320
Speaker 1: not that big of a deal. Here's the thing. The

569
00:25:09,359 --> 00:25:12,520
Speaker 1: biggest spending areas that have led to this balloon and

570
00:25:12,560 --> 00:25:17,120
Speaker 1: overall credit card spending and debt are dining, travel and

571
00:25:17,560 --> 00:25:22,480
Speaker 1: experiences and blasted check. These are all optional categories. We're

572
00:25:22,520 --> 00:25:26,320
Speaker 1: going into debt for once, not needs. And there is

573
00:25:26,359 --> 00:25:28,680
Speaker 1: nothing wrong with a credit card itself. It's a tool.

574
00:25:28,800 --> 00:25:30,879
Speaker 1: We are huge fans of using credit cards for the

575
00:25:30,880 --> 00:25:32,960
Speaker 1: different rewards and points that they provide, but it is

576
00:25:33,200 --> 00:25:35,160
Speaker 1: how you use it, and if you can't pay off

577
00:25:35,160 --> 00:25:37,520
Speaker 1: the balance on time and in full every single month,

578
00:25:37,600 --> 00:25:39,840
Speaker 1: we want you to stop using it. Yeah, if you

579
00:25:39,880 --> 00:25:42,119
Speaker 1: keep bashing your finger with the hammer stop using the hammer, right.

580
00:25:42,200 --> 00:25:44,080
Speaker 1: The same thing with the credit card. Yeah, and again,

581
00:25:44,119 --> 00:25:47,720
Speaker 1: with interest rates continuing to rise all across the board,

582
00:25:47,920 --> 00:25:51,439
Speaker 1: with everything, we're seeing credit card debt being even worse

583
00:25:51,440 --> 00:25:55,000
Speaker 1: for you than the normal. And I wonder because I recently,

584
00:25:55,160 --> 00:25:58,480
Speaker 1: I've only ever had one credit card on my Apple

585
00:25:58,480 --> 00:26:01,240
Speaker 1: pay within my wall, but I recently he said, I

586
00:26:01,240 --> 00:26:03,320
Speaker 1: need to have all the cards in there. That way

587
00:26:03,359 --> 00:26:05,159
Speaker 1: I can if I don't happen at my walt. I

588
00:26:05,160 --> 00:26:07,720
Speaker 1: don't want to be stuck using the one unoptimized card.

589
00:26:07,760 --> 00:26:09,560
Speaker 1: I want to be able to funnel my spending the

590
00:26:09,640 --> 00:26:11,399
Speaker 1: right way. I wonder if that has any sort of

591
00:26:11,760 --> 00:26:14,720
Speaker 1: impact on individuals usage as well, when you can just

592
00:26:15,080 --> 00:26:17,919
Speaker 1: double click it and top the phone. But regardless, it

593
00:26:17,960 --> 00:26:20,400
Speaker 1: is becoming more costly if you are a careless user

594
00:26:20,560 --> 00:26:21,560
Speaker 1: sure of your credit card.

595
00:26:21,600 --> 00:26:24,120
Speaker 2: Yeah, that's true. And late payments have gone up to right,

596
00:26:24,200 --> 00:26:27,159
Speaker 2: which which means those purchases are costing folks even more

597
00:26:27,200 --> 00:26:28,960
Speaker 2: in interest and penalties than they were a couple of

598
00:26:29,000 --> 00:26:31,439
Speaker 2: years ago. And this is good news for credit card companies,

599
00:26:31,480 --> 00:26:33,840
Speaker 2: but it's just it's not for us as individuals. The

600
00:26:34,760 --> 00:26:36,800
Speaker 2: US norm when it comes to handling debt is not

601
00:26:36,880 --> 00:26:38,840
Speaker 2: that great. And so if you're shooting to be normal,

602
00:26:38,880 --> 00:26:41,359
Speaker 2: to be like everyone else, you're you're going to be

603
00:26:41,400 --> 00:26:42,520
Speaker 2: in a bad financial spot.

604
00:26:42,600 --> 00:26:42,760
Speaker 1: Right.

605
00:26:43,560 --> 00:26:46,800
Speaker 2: The average person has about six thousand dollars in recurring

606
00:26:46,880 --> 00:26:49,920
Speaker 2: credit card debts and an average illustrate of about twenty percent,

607
00:26:50,000 --> 00:26:52,840
Speaker 2: which means they're paying twelve hundred dollars a year just

608
00:26:52,880 --> 00:26:56,119
Speaker 2: be able to use that piece of plastic to make privilege.

609
00:26:55,400 --> 00:26:57,639
Speaker 1: Of everting those points that maybe you're not even actually

610
00:26:57,640 --> 00:26:58,520
Speaker 1: fully taking advation.

611
00:26:58,800 --> 00:27:01,800
Speaker 2: So it's my contention, it's ark the normal sucks, right,

612
00:27:01,840 --> 00:27:04,440
Speaker 2: The average person is very little saved, which sucks. And

613
00:27:04,680 --> 00:27:07,680
Speaker 2: we talk about talked about last week the average length

614
00:27:07,680 --> 00:27:09,960
Speaker 2: of a car loan, it's really long. And we talked

615
00:27:10,000 --> 00:27:11,919
Speaker 2: about the average price of a car what people are

616
00:27:11,920 --> 00:27:14,800
Speaker 2: paying now. It's a lot of money, and that's normal,

617
00:27:14,880 --> 00:27:17,480
Speaker 2: but it shouldn't be normal. So so don't base your

618
00:27:17,480 --> 00:27:19,920
Speaker 2: goals on what the average American is doing with their

619
00:27:19,960 --> 00:27:23,280
Speaker 2: finances based on don't don't do. Don't take your cue

620
00:27:23,320 --> 00:27:26,120
Speaker 2: from what normal people who do the average American does, yeah,

621
00:27:26,119 --> 00:27:28,920
Speaker 2: because normal people are, you know, screwing over their futures

622
00:27:29,160 --> 00:27:32,560
Speaker 2: for current consumption. Yeah, the average American also throws away

623
00:27:32,640 --> 00:27:35,480
Speaker 2: a third of all the groceries and watches seven hours

624
00:27:35,480 --> 00:27:36,960
Speaker 2: of TV a day or something like that.

625
00:27:37,040 --> 00:27:39,480
Speaker 1: These are not things that we want you to do.

626
00:27:39,520 --> 00:27:41,760
Speaker 1: We want you to be weird. But let's talk about

627
00:27:41,800 --> 00:27:44,200
Speaker 1: a different kind of borrowing. Let's talk about taking money

628
00:27:44,280 --> 00:27:46,960
Speaker 1: out of your home. As anyone who who wants to

629
00:27:46,960 --> 00:27:49,960
Speaker 1: buy a home nose, it's really expensive these days. Prices

630
00:27:50,040 --> 00:27:53,280
Speaker 1: have gone up significantly over the past few years, especially

631
00:27:53,720 --> 00:27:57,040
Speaker 1: interest rates as well, and this has created an affordability crunch.

632
00:27:57,720 --> 00:28:00,199
Speaker 1: But if you bought a house between let's say a

633
00:28:00,480 --> 00:28:04,000
Speaker 1: two thousand and nine to twenty twenty ish or maybe

634
00:28:04,000 --> 00:28:07,520
Speaker 1: twenty twenty one after the run up, you've definitely accumulated

635
00:28:07,680 --> 00:28:11,679
Speaker 1: a chunk of home equity. And some analysts out there

636
00:28:11,680 --> 00:28:14,320
Speaker 1: are predicting that the next place that consumers are going

637
00:28:14,359 --> 00:28:16,280
Speaker 1: to be tempted to grab money so that they can

638
00:28:16,400 --> 00:28:19,600
Speaker 1: continue to spend in a way that they've become accustomed

639
00:28:19,640 --> 00:28:24,480
Speaker 1: to right spending on dining, travel and experiences, is that

640
00:28:24,480 --> 00:28:26,800
Speaker 1: they're going to end up tapping the equity in the

641
00:28:26,800 --> 00:28:30,120
Speaker 1: form of a cash out refinance or maybe a helock

642
00:28:30,400 --> 00:28:33,480
Speaker 1: or a home equity loan. These are all forms of

643
00:28:33,560 --> 00:28:37,200
Speaker 1: borrowing that were almost scared because there's a large amount

644
00:28:37,240 --> 00:28:39,760
Speaker 1: of money sitting there, you know, in the piggy bank

645
00:28:39,880 --> 00:28:42,800
Speaker 1: of your home. And if folks turn to that with

646
00:28:43,640 --> 00:28:45,480
Speaker 1: dollar signs in their eyes and they're thinking, oh, I

647
00:28:45,560 --> 00:28:50,440
Speaker 1: want to continue this luxury living that been accustomed to,

648
00:28:50,880 --> 00:28:52,760
Speaker 1: it could lead to some bad things for sure.

649
00:28:52,840 --> 00:28:55,800
Speaker 2: Yeah, taking out that money can lead to a lot

650
00:28:55,840 --> 00:28:58,320
Speaker 2: of financial heartache, a lot of financial difficulty. And the

651
00:28:58,360 --> 00:29:00,440
Speaker 2: total mortgage debt right now in the country stands as

652
00:29:00,440 --> 00:29:02,560
Speaker 2: something like twelve and a half trillion, but there's almost

653
00:29:02,560 --> 00:29:04,960
Speaker 2: thirty trillion in home equity, and so it starts to

654
00:29:05,000 --> 00:29:07,480
Speaker 2: get tempting. Right Like you said, Matt, you see dollar signs,

655
00:29:07,520 --> 00:29:08,640
Speaker 2: it starts to get like.

656
00:29:08,600 --> 00:29:11,040
Speaker 1: It starts a swell little yeah, like bursting. Not the same.

657
00:29:11,080 --> 00:29:13,480
Speaker 2: You're like, my saving's council low, but my helock is fat,

658
00:29:13,520 --> 00:29:15,960
Speaker 2: so maybe I should grab some of that. But a

659
00:29:15,960 --> 00:29:18,280
Speaker 2: cash out refive is a bad idea for almost everyone

660
00:29:18,560 --> 00:29:20,320
Speaker 2: with a low mortgage rate. Right now, you're giving up

661
00:29:20,320 --> 00:29:23,160
Speaker 2: something great that you have locked in for a whole

662
00:29:23,160 --> 00:29:25,720
Speaker 2: lot of years. You're giving up the equivalent of a

663
00:29:25,800 --> 00:29:29,800
Speaker 2: luxury item for jeloppie. Right, That's that's what's happening in

664
00:29:29,800 --> 00:29:31,200
Speaker 2: the financial terms in Yeah, if you train it in

665
00:29:31,240 --> 00:29:33,480
Speaker 2: your three percent mortgage for a seven percent just because

666
00:29:33,520 --> 00:29:35,680
Speaker 2: you want access to that cash, that's a that's a

667
00:29:35,760 --> 00:29:36,360
Speaker 2: terrible ideat.

668
00:29:36,720 --> 00:29:40,520
Speaker 1: It says. If you won the prize of free Subway

669
00:29:40,560 --> 00:29:42,480
Speaker 1: for life and you're like, I'm just tired of my

670
00:29:42,560 --> 00:29:45,480
Speaker 1: name being Subway, I don't want the free sandwiches anymore. Yeah, yeah,

671
00:29:46,040 --> 00:29:47,680
Speaker 1: and changing your name to brisket.

672
00:29:47,800 --> 00:29:50,360
Speaker 2: Don't give those sandwiches up unless that means free barbecue,

673
00:29:50,360 --> 00:29:51,360
Speaker 2: in which case it's a smart move.

674
00:29:51,360 --> 00:29:53,720
Speaker 1: Would you do it for just a chance a free barbecue? Though?

675
00:29:53,800 --> 00:29:56,640
Speaker 1: Oh no, No, to keep a bird in the hand.

676
00:29:56,520 --> 00:30:00,520
Speaker 2: Yeah, But most folks should avoid the temptation to use

677
00:30:00,560 --> 00:30:03,800
Speaker 2: those funds to fuel their consumption. Right homeowners are, they're

678
00:30:03,840 --> 00:30:06,280
Speaker 2: in a pretty solid position right now, but it's easy

679
00:30:06,320 --> 00:30:08,320
Speaker 2: to undo that by treating your home like an ATM,

680
00:30:08,360 --> 00:30:10,840
Speaker 2: by by snagging those funds and doing dumb.

681
00:30:10,720 --> 00:30:11,280
Speaker 1: Stuff with them.

682
00:30:11,360 --> 00:30:14,440
Speaker 2: If you're like making home upgrades, that's one expense that

683
00:30:14,480 --> 00:30:16,800
Speaker 2: can make real sense with some of those funds. But

684
00:30:16,920 --> 00:30:20,400
Speaker 2: don't over leverage yourself while using that home equity line

685
00:30:20,400 --> 00:30:23,160
Speaker 2: of credit. And in one additional caveat, by the way,

686
00:30:23,360 --> 00:30:26,320
Speaker 2: opening a helock can function like a backup emergency fund.

687
00:30:26,440 --> 00:30:29,400
Speaker 2: We think that homeowners should in all likelihood most of

688
00:30:29,400 --> 00:30:32,120
Speaker 2: the time have a helock on hand. It's nice in

689
00:30:32,160 --> 00:30:34,760
Speaker 2: the case of emergency, but it's like, uh, but it's

690
00:30:34,800 --> 00:30:36,920
Speaker 2: the same thing as like break glass in case of emergency.

691
00:30:37,040 --> 00:30:40,200
Speaker 2: You don't grab that hatchet or the fire extinguisher out

692
00:30:40,280 --> 00:30:42,960
Speaker 2: unless it really is a fire, and so you don't

693
00:30:43,000 --> 00:30:46,280
Speaker 2: want to concoct a fire in your mind to grab

694
00:30:46,320 --> 00:30:48,920
Speaker 2: the funds only if it's a real emergency. Doesn't make

695
00:30:48,960 --> 00:30:50,160
Speaker 2: sense to actually draw that down.

696
00:30:50,280 --> 00:30:51,920
Speaker 1: Yeah, that's right. And this way is just like a

697
00:30:51,960 --> 00:30:54,360
Speaker 1: credit card. It's a tool. It comes down to how

698
00:30:54,400 --> 00:30:56,760
Speaker 1: it is that you use it. But Buddy, that's going

699
00:30:56,800 --> 00:30:59,560
Speaker 1: to be it for our Friday flight. We hope everyone

700
00:30:59,560 --> 00:31:01,840
Speaker 1: has a fantastic weekend and we will see back here

701
00:31:01,840 --> 00:31:05,160
Speaker 1: on Monday. We've got a great listener questions episode lined

702
00:31:05,200 --> 00:31:07,360
Speaker 1: up for you. You can find the different stories and

703
00:31:07,520 --> 00:31:09,760
Speaker 1: any resources that we mentioned up in the show notes

704
00:31:09,800 --> 00:31:13,000
Speaker 1: for this episode at howdomoney dot com. Buddy, that's gonna

705
00:31:13,000 --> 00:31:15,120
Speaker 1: be it for this one. Until next time. Best Friends Out,

706
00:31:15,280 --> 00:31:16,800
Speaker 1: Best Friends Out,