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Speaker 1: Welcome to Had the Money. I'm Joel and I am Matt.

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Speaker 1: Today we're going to answer some of your listener questions. Yeah,

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Speaker 1: we're actually going to share seven or eight questions with

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Speaker 1: our listeners today, but we're only going to answer a

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Speaker 1: few of them. Yeah, and just play a bund and

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Speaker 1: just be like, hey, yeah, there's a couple here. Some

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Speaker 1: of these other ones we actually didn't dig. No, we've

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Speaker 1: got we really do have some great ones to get

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Speaker 1: to today. We are going to talk about this terribly

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Speaker 1: crummy insurance product that you probably shouldn't have. What kind

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Speaker 1: of insurance product might we be talking about. We'll get

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Speaker 1: to that one. Uh, We're going to talk about a

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Speaker 1: fancy investing product, and the question asker is wondering where

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Speaker 1: it is that we fall on the spectrum of some

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Speaker 1: of these alternative investments and then saving for your home,

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Speaker 1: specifically when the goalposts have moved as to what is

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Speaker 1: going to take for you to purchase at home. We'll

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Speaker 1: get to that more during today's Ask Count of Money episode.

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Speaker 2: Joe thought you saved up twenty percent. It turns out,

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Speaker 2: as home prices have gone up, you got fifteen percent

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Speaker 2: now exactly. And that can be demoralizing in deflating. We'll

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Speaker 2: talk about that, but Matt, before we get to that,

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Speaker 2: I want to throw a frugal or cheap out your way.

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Speaker 2: I read an article this week in the Washington Post

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Speaker 2: by friend of the show Michelle Singletary, one of the

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Speaker 2: great personal finance minds of her generation. We've had her

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Speaker 2: on the show. She's great.

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Speaker 1: One of the things the thing she wrote about was

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Speaker 1: is she great? Though? Joel, you said she's great, and

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Speaker 1: then you start laughing, so it's like you're making fun

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Speaker 1: of her a little bit.

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Speaker 2: I might be making fun of her on this one.

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Speaker 2: I might know she really is great and so smart.

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Speaker 2: But she says it didn't take much money to get married,

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Speaker 2: just one hundred bucks. For all you people thinking you

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Speaker 2: need like a wedding or something with like friends and

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Speaker 2: family present and maybe like.

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Speaker 1: The dance for you don't need witnesses. What's your problem.

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Speaker 2: There's a thing called the justice of the peace. You

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Speaker 2: go to the courthouse four cover seventy eighty one hundred

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Speaker 2: bucks and you're done with it. Do you agree with

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Speaker 2: Michelle isoud being frugal and cheap?

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Speaker 1: Well, i'll be I read the article. You shared it

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Speaker 1: with me, to be fair, she's saying, you don't have

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Speaker 1: to spend tens of thousands of dollars because it was

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Speaker 1: sort of like a It sounds like she teaches like

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Speaker 1: a personal finance class maybe to like newlyweds or couples

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Speaker 1: at least, is like it may be a couples in

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Speaker 1: money class, and folks are like, oh, they're yelling out

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Speaker 1: how much it costs forty fifty thousand. What depends on

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Speaker 1: how many people you invite to the wedding or if

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Speaker 1: it's a destination wedding or not. All these things have

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Speaker 1: an impact. And of course it's yeah, it's a trick question.

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Speaker 1: But she's pushing back on the fact that folks automatically

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Speaker 1: assume that you need to spend that much.

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Speaker 2: And I will say that you're not. It's not official

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Speaker 2: unless you throw some knockdown, drag out.

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Speaker 1: Yeah, and legally, of course, in the eyes of the law, yeah,

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Speaker 1: you are married just by you know, by dropping one

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Speaker 1: hundred bucks. But I'm going to push back a little bit,

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Speaker 1: and I think it comes like you you completely leave

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Speaker 1: out the aspect of culture, yes, and what it is

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Speaker 1: that you want your life to look like, and the

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Speaker 1: kind of world that you want to live in and

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Speaker 1: the sort of events that you want to attend, whether

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Speaker 1: you're friend you know, like what if you had a

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Speaker 1: friend like who was getting married and they're like, yeah,

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Speaker 1: we're just thinking out going to the courthouse, and we're

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Speaker 1: gonna drop a hundred bucks, Like, wouldn't you be bummed

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Speaker 1: that they weren't throwing at least like some kind of party. Yea, right,

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Speaker 1: it doesn't have to necessarily be some over the top

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Speaker 1: celebration where they go into like loads of debt. But

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Speaker 1: I do think that there's somewhere to land in between

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Speaker 1: spending one hundred bucks and then like a destination wedding

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Speaker 1: to like Ta heat He or something like that.

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Speaker 2: Agreed, Yeah, And I think there's times where restraint is necessary,

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Speaker 2: and especially as a lot of folks are getting married

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Speaker 2: at older and older ages, they're often more responsible for

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Speaker 2: the cost of the wedding. And I get where you're saying, Listen,

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Speaker 2: if we want to start off, you know, financially solid

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Speaker 2: way as a couple, I don't want to drop twenty

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Speaker 2: grand of our mutual dollars on this wedding. That's the

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Speaker 2: down payment, or that that's we're saving up for our

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Speaker 2: first car together or whatever it is, So putting more

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Speaker 2: money towards the wedding means sacrificing on other things. Is

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Speaker 2: not just mom and Dad's money necessarily, I think.

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Speaker 1: Well, I think there's also the argument too that like

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Speaker 1: when you are older, say you're getting married at the

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Speaker 1: age of thirty, at the age of forty, you also

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Speaker 1: have a lot more money of your own, like more

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Speaker 1: of your your own dollars that you could potentially put

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Speaker 1: towards because so, like I guess, I see it almost

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Speaker 1: as depending on how old you are, it would be

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Speaker 1: easy as easy to throw just as big of a wedding,

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Speaker 1: because it's either, like you said, if you're like I

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Speaker 1: don't know, fresh out of high school or fresh out

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Speaker 1: of college and it's and mom and dad are helping out,

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Speaker 1: or you're a lot older and you've just saved up

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Speaker 1: a lot more money yourself, there's still the temptation, I

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Speaker 1: think to possibly overspend relative to what it is that

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Speaker 1: you can afford.

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Speaker 2: You just thinking about the way some other cultures around

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Speaker 2: the world handle weddings, and it's like everybody takes off

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Speaker 2: for like three days and it is pomp and circumstance.

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Speaker 1: It's out the wazoo. It's in a huge deal. Yeah,

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Speaker 1: And it.

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Speaker 2: Doesn't necessarily mean that that it's going to cost a

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Speaker 2: ridiculous amount of money. It just means that you've got

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Speaker 2: the people that matter most, who are celebrating your union,

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Speaker 2: who are going to be part of your lives for years,

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Speaker 2: to come together at the same point in time. And

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Speaker 2: I think that is the priority. Not necessarily the fancy

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Speaker 2: venue or the over the top food to serve to

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Speaker 2: your guests, but like I do think that getting the people,

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Speaker 2: whether it's twenty or two hundred, people that matter the

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Speaker 2: most in your life together to celebrate, I don't know.

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Speaker 2: I think there's something really important about that. Yeah, totally. Yeah,

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Speaker 2: And it doesn't have to cost forty grand. It can

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Speaker 2: cost likely six grand, maybe a lot less.

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Speaker 1: It can just be a really nice party you run

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Speaker 1: out a favorite restaurant of yours, that kind of thing.

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Speaker 1: Because I guess one of the things I want to

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Speaker 1: push back on is she kind of laid out a

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Speaker 1: few parameters that she thinks folks should have, like boxes

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Speaker 1: that they need to have checked off before they throw

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Speaker 1: a pretty big wedding, and it's things like making sure

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Speaker 1: you're funding your retirement all right. I can get behind that,

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Speaker 1: making sure you're not going into debt, that you have

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Speaker 1: the cash on hand. Okay, I can get behind that,

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Speaker 1: except for the fact that she includes student loans in there.

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Speaker 1: That's that's one that really stood out to make them like, what,

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Speaker 1: like folks are paying on their student loans for like decades.

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Speaker 1: I never get married pretty long time, exactly, and it's

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Speaker 1: not quite apples to apples, but I feel similar. I

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Speaker 1: feel the same way towards getting married and throwing a

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Speaker 1: decent wedding as like having a kid. I think a

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Speaker 1: lot of times there's a temptation to feel like you

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Speaker 1: have to have all your financial ducks lined up in row.

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Speaker 1: But in the meantime, you're just missing out on a

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Speaker 1: whole lot of goodness in life. And no one's fully

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Speaker 1: prepared for your parents going to be fully prepared.

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Speaker 2: Financially, and all the books are I'm not saying they're

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Speaker 2: waste of time, but it does parent you just have

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Speaker 2: to do it. Yeah, it's times you gotta do it exactly,

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Speaker 2: So all ti time, you just kinda get married, even

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Speaker 2: if you don't have the money to throw up a

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Speaker 2: ridiculously expensive, awesome money But.

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Speaker 1: I think you can still do it on a budget.

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Speaker 1: They'll still have a decent wedding. Make it cool. Exactly,

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Speaker 1: totally agree.

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Speaker 2: All right, let's mention the beer we're having all this episode, Matt.

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Speaker 2: This is called Whipped Pineapple Goza by Westbrook Westbrook Brewing.

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Speaker 2: Looking forward to having this one on the show. Your thoughts, Yeah,

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Speaker 2: at the end of the episode. By the way, if

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Speaker 2: you have a money question for us, we'd love to

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Speaker 2: take it on the next Ask htm episode. Just got

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Speaker 2: to how to money dot com slash ask or record

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Speaker 2: your question your money question. The weirder the better, By

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Speaker 2: the way, I love the weird questions.

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Speaker 1: Matt.

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Speaker 2: If you've got a weird money question in particular recorded

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Speaker 2: on the Boyce Memo app of your phone, send it

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Speaker 2: to us via email at how to moneypod at gmail

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Speaker 2: dot com. Matt, let's get to a question now about

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Speaker 2: retirement plans.

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Speaker 1: There might be a little sub.

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Speaker 3: II Joel on thattt. This is even from alling for Connecticut,

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Speaker 3: reaching out first. I have been listening to the podcast

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Speaker 3: for over three years now, and I really enjoyed the

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Speaker 3: content you put out. It's been really helpful for both

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Speaker 3: me and some of my peers who have been able

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Speaker 3: to gain helpful insights into how they invest in their ROTH.

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Speaker 3: I raise and even for one friend self published her

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Speaker 3: own book. I have a question now about four to

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Speaker 3: one ks and my first full time job post college.

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Speaker 3: I know there is a four to one K plane

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Speaker 3: that's offered, but there's two caveats. There's no four to

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Speaker 3: one K match and the plan is through Voya, not

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Speaker 3: Fidelity or Vanguard. In fact, I did some research into

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Speaker 3: the four to one K plan potential asset allocation options

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Speaker 3: that are offered, and the average annual fee I found

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Speaker 3: for them is one point sixty six percent. My question

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Speaker 3: to you is, despite the high fee of being no

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Speaker 3: four to one K match and it pin through Voya,

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Speaker 3: should I still invest in that. I am plenty on

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Speaker 3: going to grad school in twenty twenty five, potentially far away,

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Speaker 3: which may factor into whether invest in this or I

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Speaker 3: have been able to max out my ROTH diary the

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Speaker 3: past two years, so that is taken care of. I

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Speaker 3: have been putting extra money otherwise for retirement into my

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Speaker 3: brokerage account. I appreciate the helpful insight, and if there's

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Speaker 3: one book I recommend checking out, it would be Beer

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Speaker 3: Hiking New England, combining some scenic hikes with some nearby

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Speaker 3: excellent craft breweries.

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Speaker 2: Thank you beer hiking USA, right, that's not what he said,

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Speaker 2: but in New England. But maybe we should create the

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Speaker 2: beer hiking in the southeast.

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Speaker 1: How awesome does that sound. This is a fantastic book recommendation, Stevens,

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Speaker 1: So thank you so much for that. That's like the

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Speaker 1: perfect combo, like two of our favorite things.

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Speaker 2: Yes, exactly, and I beer hiking somewhere while talking about money.

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Speaker 1: No, I mean it's over the top right there, but

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Speaker 1: you gotta have you got to combine that physical activity.

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Speaker 1: I think it's one of the reasons I've always been

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Speaker 1: drawn to like. It just makes me think about when

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Speaker 1: Kate and I we just started getting into running. We

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Speaker 1: moved out. We didn't move out west, we were traveling

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Speaker 1: out west. It was a massive road trip, and some

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Speaker 1: of my fondest memories of Seattle Portland were like running

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Speaker 1: through these cities while getting to know them. Because here's

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Speaker 1: the thing, you're also eating a lot and drinking a lot,

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Speaker 1: and it can be easy to overdo it unless you're

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Speaker 1: actually like burning a lot of calories and moving around.

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Speaker 1: So it allows you to experience sluggish, yes, and it

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Speaker 1: allows you to experience more of wherever it is that

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Speaker 1: you're visiting. So I love this idea of like hiking

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Speaker 1: and craft brew.

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Speaker 2: I agree, walking and running through a city. That's like

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Speaker 2: the best way to explore it. Like stop, stop haling ubers,

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Speaker 2: get around that way.

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Speaker 1: And Okay, so Steven was he also at the beginning

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Speaker 1: of his voice membory, he mentioned his friends. It sounds

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Speaker 1: like he's got an awesome group of folks, and it's

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Speaker 1: worth highlighting just how amazing and how big of an

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Speaker 1: impact that some good friends like that can have on

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Speaker 1: your financial trajectory. Joe, it makes me think about like

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Speaker 1: when we first met and we're both kind of money nerds,

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Speaker 1: but that was right at this we're both considering rental

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Speaker 1: properties at the same time, and it's like, oh, you

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Speaker 1: like to fund your wrath, Ira, me too, And then

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Speaker 1: it's like, oh, you're thinking about buying an investment property, dude.

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Speaker 1: That's been on my mind as well, and it's certainly

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Speaker 1: allowed us to prosper or financially because we're spurring each

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Speaker 1: other on. We are encouraging encouraging each other as opposed

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Speaker 1: to doing maybe dumber things with our money.

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Speaker 2: Okay, it's the same thing with the garment app on

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Speaker 2: my phone. I feel like that's like my new social media.

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Speaker 2: It's like seeing what my friends are doing in our

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Speaker 2: sair physical activities and it just motivates me to get

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Speaker 2: out there and do a little more. And I think

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Speaker 2: like it surprises me how such a small and seemingly

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Speaker 2: insignificant thing can have a pretty big impact on your

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Speaker 2: motivation to do the thing that you should be doing.

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Speaker 2: And maybe it's just kind of my base competitive nature,

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Speaker 2: but I'm using it to my advantage.

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Speaker 3: Lea.

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Speaker 1: Well, it's I mean, it's just encouraging, right, Like that's

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Speaker 1: where it's like iron sharpening iron. And I know, well,

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Speaker 1: I know from a financial standpoint least, that I am

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Speaker 1: certainly in a better position because of our friendship and

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Speaker 1: our appreciation of personal finances. So I'm sure the same

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Speaker 1: is certainly true when it comes to activity. Well, for

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Speaker 1: you it's garment, but for me, just going to the

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Speaker 1: gym and just like being surrounded by other folks who

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Speaker 1: are also doing this thing where we are challenging. If

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Speaker 1: you don't show up, they're gonna text me be like, Matt,

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Speaker 1: were you doing? So let's get to love to hear

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Speaker 1: that You've got awesome friends, by the way, that's that's

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Speaker 1: what we're highlighting here. But our condolences to you that

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Speaker 1: he has such a trashy four on and K option.

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Speaker 1: Here in the show, we don't love to dump on

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Speaker 1: specific companies, and that being said, Voya they don't have

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Speaker 1: the absolute worst offerings in the world, but they're also

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Speaker 1: far from being the greatest. Their target date funds, for instance,

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Speaker 1: can cost eight times what Vanguard's does. And so I'm

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Speaker 1: shocked to hear that the average anal fee in your

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Speaker 1: plan is north of one and a half percent. That's insane,

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Speaker 1: it really is, and it's honestly, it's like unforgivable. And

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Speaker 1: with that, and on top of that, he's got no match,

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Speaker 1: he's got awful investing options, and so it certainly makes

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Speaker 1: it seem like that your four on K it's likely

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Speaker 1: not going to be worth the effort. Like if you

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Speaker 1: had a match, I think the calculation would be different, right,

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Speaker 1: We would want you to make sure that you contributed

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Speaker 1: enough to get that full match, no matter what, because

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Speaker 1: no fee, regardless of how high the few might be,

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Speaker 1: even these awful ones from Voya, they can't eat into

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Speaker 1: your returns enough to overcome a decent employer match. That

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Speaker 1: match is going to outpace those fees every day of

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Speaker 1: the week. Yeah, that's right. I mean that's not That's

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Speaker 1: probably where you want to stop.

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Speaker 2: You want to get the full match and then you

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Speaker 2: want to go invest in another account before you'd even

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Speaker 2: consider investing more inside of your four oh one K.

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Speaker 2: But you're right, if there was a match, we would

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Speaker 2: probably have different advice. But the fact there's no match

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Speaker 2: that makes it a more interesting decision. And so Steven

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Speaker 2: said he's maxing out as roth Ira, which is great.

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Speaker 2: That would be our first piece of advice too. That's

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Speaker 2: the next best account. And the fact that basically it's

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Speaker 2: an individual retirement acount, it doesn't matter, it doesn't have

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Speaker 2: anything to do with your employer.

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Speaker 1: You can go wherever you want.

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Speaker 2: For folks who do have chrummey four OL and k's

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Speaker 2: roth iras could be a great first option. Yeah, but

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Speaker 2: then what I do You mentioned the average expense ratio

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Speaker 2: of the funds that you have on offer to you

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Speaker 2: through Voya. After that, I would look and at least

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Speaker 2: see what the lowest cost funds that you have access

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Speaker 2: to inside of that four O and K are that's

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Speaker 2: true because you might find he might find Matt a

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Speaker 2: reasonably priced total stock market fund or s and P

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Speaker 2: five hundred fund that comes with an expense ratio below

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Speaker 2: half a percent, right, and even that is like agree

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Speaker 2: just compared to Vanguardi Fidelity Standards or Schwab like some

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Speaker 2: of our favorite brokerages. But if that's the case, while

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Speaker 2: not ideal, you might still want to contribute at least

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Speaker 2: some money money to that four oh one K totally,

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Speaker 2: but only into those specific funds.

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Speaker 1: So yeah, you want to target those specifically avoid these

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Speaker 1: high cost ones. Something else worth mentioning is steam and

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Speaker 1: do you have access to an HSA Health Samvans account.

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Speaker 1: That's another tax advantage account.

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Speaker 2: Yeah, if you do, that's like triple tax advantaged, and

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Speaker 2: that's an even bigger tax break. And maybe the cost

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Speaker 2: or lower inside of that fund. I don't know, it's

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Speaker 2: at least worth looking, but that could be another account

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Speaker 2: you maxed out the roth IRA. Maybe the AHSA is

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Speaker 2: the next account to look to, and then the four

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Speaker 2: to one K. If we're talking about investing in the

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Speaker 2: funds that have the lowest possible fees attached them, which

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Speaker 2: are going to be typically those index funds Matt, that

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Speaker 2: are probably diversified that we recommend anyway, So you could

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Speaker 2: opt to go straight into a taxable brokerage account instead,

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Speaker 2: by the way, but we do you think that the

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Speaker 2: four to one k makes more sense if they offer

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Speaker 2: a funder too, at least in that reasonable range. And

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Speaker 2: for us, the reasonable range means half a percent or less, right,

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Speaker 2: because the average expense ratio you mentioned is certainly sickening.

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Speaker 2: Like I wanted to throw up, Matt when I heard that.

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Speaker 2: It's pretty nasty. But our favorite funds could be at

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Speaker 2: least palatable, and so it's still hard for me to fathom.

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Speaker 2: I guess why any employer would pick Voya or a

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Speaker 2: similar high cost provider. It's probably because they don't know better,

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Speaker 2: Mattam makes me think about our recent conversation with Dan

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Speaker 2: Otter when it comes to teachers and what they pay

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Speaker 2: their crumby four or three to be retirement accounts in

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Speaker 2: so many cases. But this is I think maybe where

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Speaker 2: Steven could come in and provide some help if you

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Speaker 2: wanted to as well. I think it's worth mentioning this

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Speaker 2: to the human resources department where you work. Yeah, talking

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Speaker 2: to them about the high fees, the impact that those

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Speaker 2: fees are costing employees over the years, even though it

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Speaker 2: sounds like he's not going to be there for long,

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Speaker 2: like maybe this isn't his long term career home or

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Speaker 2: anything like that, future employees there are going to be

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Speaker 2: able to enjoy more of their money thanks to his.

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Speaker 1: Actions totally in the fact that he's not going to

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Speaker 1: be there for very long. I think that's another argument

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Speaker 1: for possibly going ahead and contributing to the four one k,

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Speaker 1: because that's I mean, that's going to be fewer years

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Speaker 1: that you're having to pay that ridiculously high fee agreed,

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Speaker 1: And then when you part ways, you can always roll

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Speaker 1: that four one k into an IRA with the low

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Speaker 1: cost brokerage that you're using for your roth IRA. So yeah,

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Speaker 1: I think it makes sense to go ahead and take

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Speaker 1: advantage of the tax incentive to invest there in your

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Speaker 1: four one k, even though the fees are terrible, And

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Speaker 1: I think the only reason that we might tell you

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Speaker 1: to not invest is if you need to just save

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Speaker 1: up some more cash for grad school. You mentioned you

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Speaker 1: got that on the horizon for next year. We would

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Speaker 1: rather see you have more cash on hand to pay

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Speaker 1: for that degree. So you don't have to take on

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Speaker 1: student loans at a higher interest rate. I think that's

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Speaker 1: one potential reason to just invest less overall, so that

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Speaker 1: you can minimize your debt load moving forward, have keep

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Speaker 1: that cash on hand, and that's going to give you

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Speaker 1: a lot more options as well. And then upon graduation,

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Speaker 1: assuming you have a much higher paying job, well, then

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Speaker 1: you can really ramp up your investing. Yeah. So yeah,

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Speaker 1: I think that's how we would approach it. Give it,

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Speaker 1: you know, if we were in your shoes.

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Speaker 2: Yeah, I think if you knew, hey, this is the

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Speaker 2: employer I want to be at for thirty years. You're

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Speaker 2: talking about a longer term calculation because you're going to

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Speaker 2: be in that four one K plan for a long

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Speaker 2: time to come. But the fact that you're only you're

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Speaker 2: not going to be there too too much longer. Put

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Speaker 2: the money in the four one k. If, like you said,

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Speaker 2: you've got the money to pay for grad school and

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Speaker 2: you take out ridiculous loans and then just migrated to

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Speaker 2: a low cost brokerage account once you leave that job,

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Speaker 2: I think that's a good plan. But yeah, a lot

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Speaker 2: of moving parts, Steven. Hopefully that helps you make your decision.

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Speaker 3: Matt.

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Speaker 2: We've got more questions to get to, including one about

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Speaker 2: a life insurance policy that is terrible. We'll get to

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Speaker 2: that question and more in just a second.

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Speaker 1: Right now, we are back from Lefroic. We've got more

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Speaker 1: listener questions to get to. Let's hear from a listener

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Speaker 1: who has been financially hoodwinked.

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Speaker 4: Hi, guys, my name is Megan. I'm reaching out because

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Speaker 4: I heard an improvial episode. You talk about somebody that

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Speaker 4: reviews like retirement or investment accounts. But my significant other

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Speaker 4: signed up for an index fund through trans America about

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Speaker 4: a year ago. We signed up for it under the

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Speaker 4: impression that there was a cab on both earnings and loss,

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Speaker 4: essentially thinking that there would be no money lost in

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Speaker 4: this account. However, we just recently got our yearly statement

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Speaker 4: and there's only about half of the money that he

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Speaker 4: had put in throughout the year left in the account,

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Speaker 4: and it looks like a majority of it has gone

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Speaker 4: towards fees. We're not really sure at this point if

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Speaker 4: this was the best route we could have taken, or

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Speaker 4: if we should close the account. Maybe if we do,

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Speaker 4: we would be surrendering the account and getting zero dollars back.

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Speaker 4: So we don't really want to do that unless we

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Speaker 4: know that it's the right decision to make. However, I

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Speaker 4: also forgot to mention he's putting in two hundred dollars

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Speaker 4: a month towards that account, but he also has an

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Speaker 4: account with my daughter as a writer on it. I'm

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Speaker 4: not sure if that would be two separate accounts or

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Speaker 4: if it's one of the same, but he's putting in

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Speaker 4: two hundred and then he's putting in fifty dollars towards

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Speaker 4: the account for our daughter. These accounts were sold to

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Speaker 4: us as though they could be used for life insurance policies,

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Speaker 4: retirement accounts, a college fund for our daughter someday account

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Speaker 4: that we could borrow from without any real penalties, besides

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Speaker 4: having a lower payout once it does come to retirement time.

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Speaker 3: I don't know if.

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Speaker 4: You've looked into these accounts at all, accounts at all,

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Speaker 4: I'm sorry, or if you know anything about them. If not,

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Speaker 4: I totally understand. If you could just give us the

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Speaker 4: email or the website information of whoever looks into them,

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Speaker 4: I would greatly appreciate it.

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Speaker 1: Thanks bye, Megan.

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Speaker 2: This is a great question, and we will get to

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Speaker 2: the heart of your question in just a bit, but

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Speaker 2: there's a lot more than we actually have the ends.

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Speaker 2: Before we get to the specific part of your question.

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Speaker 1: Let's address a lot of what Megan is talking about.

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Speaker 2: Okay for the listeners, and I'm so sorry to hear

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Speaker 2: about what's happened to you in this investment endeavor. But

435
00:19:10,040 --> 00:19:12,480
Speaker 2: first things first, this is not a retirement account that

436
00:19:12,520 --> 00:19:15,199
Speaker 2: your significant other has been contributing to, and you have

437
00:19:15,280 --> 00:19:17,480
Speaker 2: not been investing in a straight up index fund like

438
00:19:17,480 --> 00:19:20,960
Speaker 2: you've been told if you if you had been via

439
00:19:21,000 --> 00:19:23,159
Speaker 2: a traditional retirement account, if you had been investing in

440
00:19:23,160 --> 00:19:25,840
Speaker 2: index funds recently, even if it had higher than normal fees.

441
00:19:25,840 --> 00:19:27,240
Speaker 2: We were just talking about fees, Matt, and how that

442
00:19:27,280 --> 00:19:29,760
Speaker 2: can impact your decision which accounts you're going to go in,

443
00:19:29,840 --> 00:19:31,119
Speaker 2: what funds.

444
00:19:30,840 --> 00:19:31,560
Speaker 1: You're gonna choose.

445
00:19:31,560 --> 00:19:34,159
Speaker 2: Well, even if you'd been paying exorbitant fees in an

446
00:19:34,160 --> 00:19:36,920
Speaker 2: index fund, you would still have seen your balance increase

447
00:19:37,040 --> 00:19:40,880
Speaker 2: substantially just because of what the SMP has done over

448
00:19:40,920 --> 00:19:41,640
Speaker 2: the past.

449
00:19:41,440 --> 00:19:45,160
Speaker 1: Year, right, at least twenty percent more over the past year,

450
00:19:45,160 --> 00:19:47,920
Speaker 1: and like so fee well feel minimal, Yeah, over forty

451
00:19:47,920 --> 00:19:49,720
Speaker 1: percent over the past two years. Yeah, So if you're

452
00:19:50,119 --> 00:19:52,320
Speaker 1: not what you were expecting to see. I'm sure based

453
00:19:52,359 --> 00:19:54,160
Speaker 1: on what you've seen reflected in the market.

454
00:19:53,880 --> 00:19:58,160
Speaker 2: Exactly so obviously disappointing, frustrating, and somebody's asked the suplaining

455
00:19:58,240 --> 00:20:01,439
Speaker 2: to do right. As Lucy would say, but this sounds

456
00:20:01,480 --> 00:20:04,840
Speaker 2: exactly like an indexed universal life policy to me, Matt,

457
00:20:05,040 --> 00:20:07,920
Speaker 2: the fees, the commissions, they are a dead giveaway. It's

458
00:20:07,960 --> 00:20:10,560
Speaker 2: one of our absolute least favorite financial products because it

459
00:20:10,560 --> 00:20:14,880
Speaker 2: attempts to combine things that shouldn't be combined. Life insurance

460
00:20:15,040 --> 00:20:18,320
Speaker 2: and investing. Those are both great and necessary things for

461
00:20:18,320 --> 00:20:21,920
Speaker 2: adults to do right, to have money going into index ones,

462
00:20:21,960 --> 00:20:25,520
Speaker 2: to have life insurance, to cover your family in the

463
00:20:25,640 --> 00:20:29,320
Speaker 2: event of your potential early death. But combining both of

464
00:20:29,359 --> 00:20:31,760
Speaker 2: those things is a recipe for disaster. As sadly Megan

465
00:20:31,800 --> 00:20:32,480
Speaker 2: has sounded.

466
00:20:32,240 --> 00:20:32,600
Speaker 3: The hard way.

467
00:20:32,640 --> 00:20:34,240
Speaker 1: Yeah, it's like me in college when I decided to

468
00:20:34,240 --> 00:20:36,560
Speaker 1: make a sandwich smoothie. I've ever told you that story,

469
00:20:37,440 --> 00:20:39,520
Speaker 1: I really, I haven't. Sounds like a wreck, Oh it was.

470
00:20:39,840 --> 00:20:41,800
Speaker 1: I got into I never made smoothies my entire life,

471
00:20:41,760 --> 00:20:44,560
Speaker 1: and then would you put a sandwich in the blender? Yeah, okay,

472
00:20:44,640 --> 00:20:47,919
Speaker 1: it was terrible nasty because I was thinking, Okay, I

473
00:20:47,920 --> 00:20:51,600
Speaker 1: love smoothies. Yeah, Oh, I love sandwiches. What if I

474
00:20:51,680 --> 00:20:54,760
Speaker 1: made a sandwich smoothie, Yeah, it tastes like vomit. The

475
00:20:54,840 --> 00:20:58,120
Speaker 1: two things on their own fantastic things to consider. Combine,

476
00:20:58,200 --> 00:20:58,840
Speaker 1: they're awful.

477
00:20:58,880 --> 00:21:00,240
Speaker 2: If I'd known you back then, I could. I told

478
00:21:00,240 --> 00:21:02,080
Speaker 2: you from personal experience. It was a bad idea because

479
00:21:02,200 --> 00:21:04,120
Speaker 2: when my sister had jos surgery back in the day,

480
00:21:04,720 --> 00:21:07,280
Speaker 2: I had to blend everything just to get food in

481
00:21:07,320 --> 00:21:09,280
Speaker 2: her mouth. If asially hated that there were some nasty

482
00:21:09,280 --> 00:21:10,320
Speaker 2: things that they put in that blender.

483
00:21:10,359 --> 00:21:12,439
Speaker 1: Well, if it was just a sandwich and like ice

484
00:21:12,640 --> 00:21:14,159
Speaker 1: or water or something, I think that'd be one thing.

485
00:21:14,160 --> 00:21:16,439
Speaker 1: But I added milk and banana because it's like, well,

486
00:21:16,480 --> 00:21:19,920
Speaker 1: you always start every smoothie with a milk and a banana. Yeah,

487
00:21:19,960 --> 00:21:24,200
Speaker 1: and yeah, that was a massive mistake. Me learn from math.

488
00:21:24,240 --> 00:21:29,240
Speaker 1: People don't make a sandwich smoothie and don't combine life

489
00:21:29,280 --> 00:21:32,359
Speaker 1: insurance and investing. It's funny. Well I shouldn't say it's funny.

490
00:21:32,359 --> 00:21:36,399
Speaker 1: But Megan, she said that she wasn't supposed to lose

491
00:21:36,400 --> 00:21:39,280
Speaker 1: any money. Well, Megan, you didn't lose any money. You

492
00:21:39,640 --> 00:21:43,000
Speaker 1: paid fees. There's a difference between having lost money in

493
00:21:43,040 --> 00:21:46,240
Speaker 1: the market versus like paying for a service that feels

494
00:21:46,280 --> 00:21:49,120
Speaker 1: like you totally got taken advantage of because you didn't

495
00:21:49,160 --> 00:21:51,040
Speaker 1: take advantage of the service, right like you didn't have

496
00:21:51,080 --> 00:21:53,400
Speaker 1: to use your life insurance, which is obviously a good thing,

497
00:21:53,400 --> 00:21:55,800
Speaker 1: but you didn't actually lose money. You paid that money

498
00:21:55,880 --> 00:21:58,640
Speaker 1: in fees towards this financial product that you didn't need.

499
00:21:58,680 --> 00:22:00,640
Speaker 2: And that's typically one of the selling points of these products.

500
00:22:00,640 --> 00:22:03,680
Speaker 2: Matt is, Hey, no downside risk. We cap your downside risk.

501
00:22:03,800 --> 00:22:06,600
Speaker 2: So if the market tanks, guess what your the value

502
00:22:06,640 --> 00:22:08,720
Speaker 2: of your policy isn't going to tank, and that feels

503
00:22:08,760 --> 00:22:09,280
Speaker 2: really good.

504
00:22:09,800 --> 00:22:12,920
Speaker 1: But then your upside is capped. The fees are high.

505
00:22:13,000 --> 00:22:15,040
Speaker 1: That's what makes these things so egregious. Plus they taught

506
00:22:15,040 --> 00:22:16,600
Speaker 1: all the different benefits and they make it sound like

507
00:22:16,640 --> 00:22:20,640
Speaker 1: this Swiss army knife like financial product. But we want

508
00:22:20,720 --> 00:22:23,400
Speaker 1: you to avoid this, and for everyone out there who's listening,

509
00:22:23,400 --> 00:22:25,720
Speaker 1: obviously we want you to avoid it. But for Megan,

510
00:22:25,760 --> 00:22:27,399
Speaker 1: the next thing that you want to do is stop

511
00:22:27,480 --> 00:22:30,040
Speaker 1: contributing to this account as soon as possible. We don't

512
00:22:30,040 --> 00:22:33,520
Speaker 1: want you throwing good money after bad But then, okay,

513
00:22:33,560 --> 00:22:35,679
Speaker 1: so you'll stop doing that, But then should you close

514
00:22:35,760 --> 00:22:39,600
Speaker 1: the account? Altogether. And because of how new this policy is,

515
00:22:39,720 --> 00:22:42,240
Speaker 1: it sounds like you've only maybe have had it around

516
00:22:42,240 --> 00:22:44,400
Speaker 1: for just like a year. I think the likely answer

517
00:22:44,520 --> 00:22:47,480
Speaker 1: is going to be yes. If you took out this

518
00:22:47,520 --> 00:22:50,000
Speaker 1: policy let's say ten years ago, like over a decade ago,

519
00:22:50,800 --> 00:22:53,280
Speaker 1: that's where the water gets a little muddier. The pros

520
00:22:53,359 --> 00:22:55,680
Speaker 1: the cons they become a little more complex. But given

521
00:22:56,080 --> 00:22:58,399
Speaker 1: especially how fresh it is and how early it is

522
00:22:58,400 --> 00:23:00,240
Speaker 1: that you caught this problem, which I'm so high to

523
00:23:00,280 --> 00:23:02,719
Speaker 1: hear about, I think it makes sense to just axit

524
00:23:02,760 --> 00:23:05,879
Speaker 1: completely before you lose any additional money.

525
00:23:06,000 --> 00:23:09,719
Speaker 2: Yeah, and she asked specifically about someone to review this account,

526
00:23:09,720 --> 00:23:12,560
Speaker 2: and yes, we have talked about that in the past. Like,

527
00:23:13,119 --> 00:23:15,720
Speaker 2: you can certainly go that route before canceling your policy.

528
00:23:16,080 --> 00:23:19,120
Speaker 2: You can do that via the site evaluatelifeinsurance dot org.

529
00:23:19,160 --> 00:23:20,800
Speaker 2: So I think that's kind of the heart of what

530
00:23:20,840 --> 00:23:23,560
Speaker 2: you were trying to get to. Evaluatelife insurance dot org

531
00:23:23,760 --> 00:23:26,080
Speaker 2: is the website you can have. You can pay one

532
00:23:26,119 --> 00:23:28,159
Speaker 2: hundred and fifty bucks to a life insurance expert. His

533
00:23:28,240 --> 00:23:31,560
Speaker 2: name's James Hunt used to be the insurance commissioner for

534
00:23:31,600 --> 00:23:33,240
Speaker 2: the state of Vermont. I want to say, but you

535
00:23:33,240 --> 00:23:35,199
Speaker 2: pay him one hundred and fifty bucks. And this is

536
00:23:35,440 --> 00:23:37,000
Speaker 2: I mean, honestly, what it takes to go through these

537
00:23:37,000 --> 00:23:39,719
Speaker 2: documents and stuff, that's very little to have someone review

538
00:23:40,040 --> 00:23:43,920
Speaker 2: your complicated, trashy life insurance policy. But the truth is

539
00:23:44,040 --> 00:23:46,520
Speaker 2: kind of basically what Matt was saying, it might not

540
00:23:46,560 --> 00:23:49,119
Speaker 2: be necessary to even pay one hundred and fifty bucks

541
00:23:49,880 --> 00:23:51,439
Speaker 2: to know whether or not you need to cancel this

542
00:23:51,480 --> 00:23:54,119
Speaker 2: policy because the waters aren't money a year in.

543
00:23:54,200 --> 00:23:56,359
Speaker 1: It's pretty sumy policy. Yeah, at least us what it

544
00:23:56,400 --> 00:23:57,760
Speaker 1: looks like you should be doing at this point.

545
00:23:57,800 --> 00:23:59,840
Speaker 2: Yeah, I mean, the longer you've had the policy in place,

546
00:23:59,840 --> 00:24:03,560
Speaker 2: the more difficult the decision becomes. Making his insight more valuable.

547
00:24:03,600 --> 00:24:06,120
Speaker 2: But in your case, it might not be necessary at all.

548
00:24:06,240 --> 00:24:09,480
Speaker 2: We're so early on to this, and it sucks to

549
00:24:10,040 --> 00:24:11,720
Speaker 2: chalk up your lot to like wipe your hands of

550
00:24:11,800 --> 00:24:13,800
Speaker 2: this thing and realize that you lost hundreds and hundreds

551
00:24:13,840 --> 00:24:15,880
Speaker 2: of dollars, maybe even a little bit more than.

552
00:24:15,800 --> 00:24:18,640
Speaker 1: That, better than thousands and tens of thousand dollars.

553
00:24:18,480 --> 00:24:20,800
Speaker 2: Though exactly better than lighting more money on fire and

554
00:24:20,840 --> 00:24:22,320
Speaker 2: throwing it into this policy.

555
00:24:22,000 --> 00:24:24,159
Speaker 1: Totally, and then moving forward, we would recommend that you

556
00:24:24,200 --> 00:24:27,720
Speaker 1: just get a simple term life insurance policy for both

557
00:24:27,720 --> 00:24:29,919
Speaker 1: you and your significant other. It's going to cost you

558
00:24:30,119 --> 00:24:32,960
Speaker 1: far less on a monthly basis. It's going to offer

559
00:24:33,000 --> 00:24:36,040
Speaker 1: you financial protection. Of course, if one of you were

560
00:24:36,080 --> 00:24:38,520
Speaker 1: to pass away prematurely, want to say, it's like fifteen

561
00:24:38,640 --> 00:24:41,719
Speaker 1: times less the average cost of its indix universals vanely

562
00:24:42,000 --> 00:24:44,520
Speaker 1: more affordable. And then you take all those dollars that

563
00:24:44,520 --> 00:24:48,000
Speaker 1: you're now saving from that egregiously extensive piece of junk

564
00:24:48,000 --> 00:24:50,320
Speaker 1: life insurance policy and then to stick it into a

565
00:24:50,320 --> 00:24:53,560
Speaker 1: workplace retirement account if you have one that's offered by

566
00:24:53,600 --> 00:24:56,160
Speaker 1: your employer, or simply stick it into a roth IRA

567
00:24:56,359 --> 00:24:59,080
Speaker 1: with a low cost provider. Then later down the line

568
00:24:59,200 --> 00:25:01,320
Speaker 1: you can think of about a five twenty nine plan,

569
00:25:01,400 --> 00:25:03,720
Speaker 1: because it sounded like that was something that maybe maybe

570
00:25:03,720 --> 00:25:05,320
Speaker 1: that kind of sold all on it because it's like, hey,

571
00:25:05,320 --> 00:25:07,679
Speaker 1: this is this can be for y'all. But if she

572
00:25:07,760 --> 00:25:09,680
Speaker 1: ends up going to school and you want to pay

573
00:25:09,680 --> 00:25:11,879
Speaker 1: for higher education, you can do that as well. So

574
00:25:11,920 --> 00:25:14,879
Speaker 1: I'm guessing that that is on your mind. Look into

575
00:25:14,920 --> 00:25:18,359
Speaker 1: five twenty nine plans, but don't prioritize like that's the

576
00:25:18,400 --> 00:25:20,560
Speaker 1: cart that should be behind the horse, and you don't

577
00:25:20,560 --> 00:25:21,880
Speaker 1: want the cart to get ahead of the horse here.

578
00:25:21,920 --> 00:25:23,600
Speaker 1: You want to make sure that you've got your financial

579
00:25:23,600 --> 00:25:24,480
Speaker 1: priorities in order.

580
00:25:24,600 --> 00:25:26,280
Speaker 2: Yeah, and Matt, you mentioned it's kind of like a

581
00:25:26,280 --> 00:25:28,600
Speaker 2: Swiss army knife type product, and I think that's true.

582
00:25:28,960 --> 00:25:31,560
Speaker 2: But also think about this. The Swiss army knife is

583
00:25:31,600 --> 00:25:33,639
Speaker 2: nice to have in a pinch, But let's say you're

584
00:25:33,680 --> 00:25:35,359
Speaker 2: in your kitchen. You're not chopping up vegetables with your

585
00:25:35,359 --> 00:25:38,119
Speaker 2: Swiss Army knife. Let's say you're trying to simply want

586
00:25:38,160 --> 00:25:40,360
Speaker 2: a chef'sne open a wine bottle at home, like, you're

587
00:25:40,359 --> 00:25:42,440
Speaker 2: not doing that with a Swiss army knife. You have

588
00:25:42,560 --> 00:25:44,960
Speaker 2: a dedicated bottle opener for that, and not likely it. Yep,

589
00:25:45,480 --> 00:25:46,480
Speaker 2: the Swiss Army knife is.

590
00:25:46,400 --> 00:25:48,520
Speaker 1: The chef's knife for the veggies, and then you got

591
00:25:48,520 --> 00:25:50,880
Speaker 1: the wine opener for the wine bottle. Yes, you don't

592
00:25:50,880 --> 00:25:55,240
Speaker 1: need the mcguver No. Fifty six gadget red pocket knife

593
00:25:55,240 --> 00:25:56,679
Speaker 1: to to whip out in a pinch exactly.

594
00:25:56,720 --> 00:25:59,359
Speaker 2: And so we're saying that there is a much better

595
00:25:59,400 --> 00:26:01,520
Speaker 2: option for every single one of these things you want

596
00:26:01,560 --> 00:26:03,680
Speaker 2: to do, and you don't need a one size fits

597
00:26:03,720 --> 00:26:05,479
Speaker 2: all solution. And in fact, the one size fits all

598
00:26:05,480 --> 00:26:09,160
Speaker 2: solution is the most expensive worst thing for you. In fact,

599
00:26:09,200 --> 00:26:12,520
Speaker 2: there are different products that are best for each one

600
00:26:12,560 --> 00:26:15,600
Speaker 2: of these pursuits you are trying to attain in your

601
00:26:15,600 --> 00:26:18,639
Speaker 2: financial life. And it sicks me map that there are

602
00:26:18,680 --> 00:26:20,920
Speaker 2: always folks out there who are trying to take advantage

603
00:26:21,320 --> 00:26:24,240
Speaker 2: of the complex financial system and the myriad products that

604
00:26:24,280 --> 00:26:28,200
Speaker 2: are offered. These universal index life policies are always sold,

605
00:26:28,200 --> 00:26:30,719
Speaker 2: They're not bought. Megan mentioned that she said she literally

606
00:26:30,760 --> 00:26:32,639
Speaker 2: said this was sold to me, And I think that

607
00:26:32,720 --> 00:26:35,040
Speaker 2: is what happens with most of these policies, that someone

608
00:26:35,080 --> 00:26:37,800
Speaker 2: who stands to benefit make a large commission is trying

609
00:26:37,800 --> 00:26:40,080
Speaker 2: to sell these products, not because it's what's best for you.

610
00:26:40,119 --> 00:26:42,240
Speaker 2: They have a great marketing campaign to try to tell

611
00:26:42,280 --> 00:26:44,479
Speaker 2: you that it is. That doesn't mean that it is.

612
00:26:44,880 --> 00:26:47,120
Speaker 2: She didn't think she needed one of these policies until

613
00:26:47,160 --> 00:26:50,119
Speaker 2: someone came to tell her about it. And it sucks

614
00:26:50,359 --> 00:26:52,399
Speaker 2: right that to see the money that you've been sucking

615
00:26:52,400 --> 00:26:54,840
Speaker 2: away blow up in a cloud of smoke. I hate

616
00:26:54,840 --> 00:26:56,919
Speaker 2: that for you, Megan. But if you fall prey to

617
00:26:56,960 --> 00:26:59,200
Speaker 2: the sunk cost fallacy and you keep pumping money into

618
00:26:59,200 --> 00:27:01,199
Speaker 2: this account, your results are going to be worse over

619
00:27:01,240 --> 00:27:04,280
Speaker 2: the long haul. So it's time to kind of cut bait,

620
00:27:04,600 --> 00:27:07,960
Speaker 2: and for everyone else out there, beware of folks selling

621
00:27:08,000 --> 00:27:10,359
Speaker 2: you a too good to be true financial product. They

622
00:27:10,440 --> 00:27:12,560
Speaker 2: end up being the worst. We talk about all sorts

623
00:27:12,600 --> 00:27:15,760
Speaker 2: of different financial products on this show, but really it's

624
00:27:15,840 --> 00:27:18,159
Speaker 2: really within a narrow band, I guess, Matt, because there

625
00:27:18,200 --> 00:27:20,480
Speaker 2: are so many other financial products on offer we don't

626
00:27:20,480 --> 00:27:22,160
Speaker 2: talk about very often. I'm glad we got to highlight

627
00:27:22,240 --> 00:27:23,960
Speaker 2: this piece of crap one because I know there are

628
00:27:23,960 --> 00:27:26,080
Speaker 2: a lot of other people hearing pitches for it, and

629
00:27:26,440 --> 00:27:29,200
Speaker 2: in Megan's case, she caught it early, and hopefully in

630
00:27:29,280 --> 00:27:31,960
Speaker 2: the case of other listeners, they know what to avoid

631
00:27:31,960 --> 00:27:32,639
Speaker 2: now from the get go.

632
00:27:32,760 --> 00:27:35,320
Speaker 1: You know it, buddy. All right, let's now hear from

633
00:27:35,359 --> 00:27:40,720
Speaker 1: a listener who's considering investing in an emerging alternative investment.

634
00:27:41,200 --> 00:27:44,240
Speaker 5: Hey, Matt and Joel, this is justin from Manson Iowa.

635
00:27:44,520 --> 00:27:45,320
Speaker 5: I love the show.

636
00:27:45,400 --> 00:27:45,920
Speaker 1: Thank you for.

637
00:27:45,880 --> 00:27:51,640
Speaker 5: Sharing your practical wisdom for us. I've been learning about

638
00:27:52,119 --> 00:27:57,560
Speaker 5: carbon credits and the emerging carbon credit space, and to me,

639
00:27:57,640 --> 00:28:04,520
Speaker 5: it seems like an opportunity for some good returns if

640
00:28:04,520 --> 00:28:06,359
Speaker 5: I can figure out the best way to invest in

641
00:28:06,359 --> 00:28:11,160
Speaker 5: this space. And I came across Carbon Mutual funds and ETFs,

642
00:28:12,119 --> 00:28:14,560
Speaker 5: and so I was wondering, what do you guys know

643
00:28:14,560 --> 00:28:17,639
Speaker 5: about carbon mutual funds and ETFs and would you have

644
00:28:17,680 --> 00:28:18,880
Speaker 5: any that you would recommend?

645
00:28:19,440 --> 00:28:22,560
Speaker 1: Thanks, Mat, I feel like we're hearing more and more

646
00:28:22,640 --> 00:28:26,880
Speaker 1: questions from people who are trying to find some sort

647
00:28:26,920 --> 00:28:30,320
Speaker 1: of investing magic right outside of maybe some of the

648
00:28:30,640 --> 00:28:33,600
Speaker 1: meat and potatoes things that we recommend. True, I thought

649
00:28:33,600 --> 00:28:34,720
Speaker 1: you were going to say, there's more and more folks

650
00:28:34,760 --> 00:28:36,480
Speaker 1: who are trying to take advantage of global warming and

651
00:28:36,760 --> 00:28:38,720
Speaker 1: trying to path the retireative.

652
00:28:38,560 --> 00:28:42,719
Speaker 2: Exploit the dying world to their financial benefit. Let's hold

653
00:28:42,720 --> 00:28:44,640
Speaker 2: about that's not the case. But I think what's so

654
00:28:44,720 --> 00:28:47,320
Speaker 2: fascinating so much of the time when people are trying

655
00:28:47,320 --> 00:28:49,400
Speaker 2: to do that, when that is the question and this

656
00:28:49,520 --> 00:28:50,800
Speaker 2: might not be the case for you justin I'm not

657
00:28:50,800 --> 00:28:52,240
Speaker 2: trying to throw you into the bus here, but so

658
00:28:52,320 --> 00:28:54,840
Speaker 2: much though, I frequently see when people are asking about

659
00:28:54,840 --> 00:28:59,160
Speaker 2: investing in alternative assets or they're attempting to find higher returns,

660
00:28:59,360 --> 00:29:01,440
Speaker 2: they want to juice those returns so that they're able

661
00:29:01,440 --> 00:29:04,640
Speaker 2: to see their account balance grow more quickly. Well, oftentimes

662
00:29:04,640 --> 00:29:06,600
Speaker 2: what they're trying to do is compensate for a more

663
00:29:06,640 --> 00:29:10,200
Speaker 2: meager savings rate. Right, they're trying to do more with less.

664
00:29:10,600 --> 00:29:12,880
Speaker 2: They want that balance to shoot up, and so they

665
00:29:12,880 --> 00:29:16,320
Speaker 2: opt to take more risk than make sense for their

666
00:29:16,400 --> 00:29:20,560
Speaker 2: financial situation. So I get looking for outsize returns and

667
00:29:20,560 --> 00:29:23,280
Speaker 2: sexy places. I get the draw to do that and

668
00:29:23,320 --> 00:29:25,760
Speaker 2: to maybe look further afield to see if you can

669
00:29:25,800 --> 00:29:28,960
Speaker 2: find something that's going to provide more financial benefit for

670
00:29:29,040 --> 00:29:33,040
Speaker 2: every dollar you're investing. Specifically, justin you mentioned carbon credits

671
00:29:33,080 --> 00:29:35,680
Speaker 2: and carbon credit ETFs. Well, when you invest in those,

672
00:29:35,720 --> 00:29:38,040
Speaker 2: you're hoping that the demand for carbon credits from companies

673
00:29:38,040 --> 00:29:41,320
Speaker 2: that pollute more goes up so that the price goes up. Right,

674
00:29:41,480 --> 00:29:44,120
Speaker 2: That's how you make money, and it can certainly work,

675
00:29:44,520 --> 00:29:46,840
Speaker 2: but it wouldn't be my first choice. You might be

676
00:29:46,880 --> 00:29:48,560
Speaker 2: one of those folks who has a baller savings right,

677
00:29:48,800 --> 00:29:51,800
Speaker 2: who is saving a significant portion of their income. And

678
00:29:51,840 --> 00:29:53,880
Speaker 2: maybe this is just a side thing that you're trying

679
00:29:53,920 --> 00:29:56,440
Speaker 2: to do with the small portion of your portfolio. Maybe

680
00:29:56,480 --> 00:29:59,280
Speaker 2: you're just trying to increase your investing savviness. But savings

681
00:29:59,360 --> 00:30:03,040
Speaker 2: rates this trump investment returns, and that is also the

682
00:30:03,080 --> 00:30:05,280
Speaker 2: thing you've got more of an ability to control. So

683
00:30:05,400 --> 00:30:07,160
Speaker 2: just make sure you're not one of those folks who

684
00:30:07,200 --> 00:30:09,400
Speaker 2: saving five percent of their income and try and find

685
00:30:09,800 --> 00:30:12,640
Speaker 2: to find ways to increase your returns. Make sure that

686
00:30:12,640 --> 00:30:15,120
Speaker 2: the savings rate is what you're focusing on the most,

687
00:30:15,160 --> 00:30:17,840
Speaker 2: and that this is really a sideshow more than anything else.

688
00:30:17,960 --> 00:30:20,720
Speaker 1: Sure, so I will up put one caveat on there

689
00:30:20,840 --> 00:30:24,200
Speaker 1: that the savings rate trump's your rate of return, particularly

690
00:30:24,280 --> 00:30:27,480
Speaker 1: if you are a younger investor, because guess what, your

691
00:30:27,480 --> 00:30:32,080
Speaker 1: investments are really small and to see something change from

692
00:30:32,680 --> 00:30:35,440
Speaker 1: I'm just earning an average seven to eight percent or

693
00:30:35,640 --> 00:30:38,000
Speaker 1: let's say twenty percent, like maybe you've experienced over the

694
00:30:38,040 --> 00:30:40,200
Speaker 1: past year. Well, if you've only got ten twenty thirty

695
00:30:40,240 --> 00:30:43,320
Speaker 1: thousand dollars invested, that doesn't really matter all that much,

696
00:30:43,360 --> 00:30:45,479
Speaker 1: as opposed to getting a promotion at work and all

697
00:30:45,480 --> 00:30:48,520
Speaker 1: of a sudden, boom you got like a thirty thousand

698
00:30:48,520 --> 00:30:50,640
Speaker 1: dollars raise or something like that, and the ability to

699
00:30:50,760 --> 00:30:52,719
Speaker 1: pretend that doesn't even exist and you don't inflate your

700
00:30:52,720 --> 00:30:54,120
Speaker 1: lifestyle and all of a sudden you're s socking away

701
00:30:54,160 --> 00:30:56,719
Speaker 1: all this money. That's when your savings rate has a

702
00:30:56,760 --> 00:30:58,880
Speaker 1: massive impact. But then if you think of somebody on

703
00:30:58,920 --> 00:31:00,760
Speaker 1: the other end of the spectrum, you know, let's say

704
00:31:00,760 --> 00:31:03,560
Speaker 1: they're retired, that they're working a little, working part time,

705
00:31:03,760 --> 00:31:06,840
Speaker 1: but they've got a million plus invested. Well, of course,

706
00:31:07,760 --> 00:31:11,800
Speaker 1: returns have a much bigger impact on basically the larger

707
00:31:11,880 --> 00:31:15,120
Speaker 1: your portfolio gets. But I'm guessing, justin just based on

708
00:31:15,160 --> 00:31:16,800
Speaker 1: how he was asking it, that he might be a

709
00:31:16,840 --> 00:31:19,800
Speaker 1: younger investor. He may not quite have as much invested

710
00:31:19,840 --> 00:31:22,120
Speaker 1: in the market. And for you, man, I hear you,

711
00:31:22,160 --> 00:31:25,400
Speaker 1: I think it can be discouraging, especially early on, to

712
00:31:25,440 --> 00:31:27,880
Speaker 1: be like, man, how come my net worth isn't really growing,

713
00:31:28,440 --> 00:31:30,840
Speaker 1: you know, as opposed to like you get to a

714
00:31:30,840 --> 00:31:34,120
Speaker 1: certain point after you've been investing for a long period

715
00:31:34,120 --> 00:31:37,000
Speaker 1: of time. That time in the market has a massive

716
00:31:37,040 --> 00:31:41,040
Speaker 1: impact on your ability to eventually see your net worth grow. Yeah,

717
00:31:41,200 --> 00:31:43,960
Speaker 1: and it's just a lot more I don't know, rewarding,

718
00:31:44,040 --> 00:31:46,880
Speaker 1: fulfilling when you log in maybe after you've been investing

719
00:31:46,880 --> 00:31:48,880
Speaker 1: for a couple decades, to see, oh wow, yeah, the

720
00:31:48,920 --> 00:31:51,600
Speaker 1: market's up a whole lot. The market is doing more

721
00:31:51,600 --> 00:31:53,280
Speaker 1: for me than I can do for myself. And that's

722
00:31:53,680 --> 00:31:56,960
Speaker 1: incredibly fun, I'll be honest, But I also remember what

723
00:31:57,000 --> 00:31:59,000
Speaker 1: it felt like early on, when it's just like, all right,

724
00:31:59,280 --> 00:32:02,320
Speaker 1: socked another five dollars away. Am I rode a Yes,

725
00:32:02,720 --> 00:32:05,520
Speaker 1: five thousand dollars richer this year, But don't discount I

726
00:32:05,560 --> 00:32:08,400
Speaker 1: guess the habits, the behavior, the discipline that you're building

727
00:32:08,400 --> 00:32:11,240
Speaker 1: by setting that money aside, because over time that's going

728
00:32:11,280 --> 00:32:13,720
Speaker 1: to grow into I mean that that's the seed that's

729
00:32:13,720 --> 00:32:17,160
Speaker 1: going to blossom into this amazing flower of retirement for you. Well,

730
00:32:17,200 --> 00:32:18,440
Speaker 1: the other I like that analogy.

731
00:32:18,480 --> 00:32:21,600
Speaker 2: By the way, the other thing that's happening, Matt when

732
00:32:21,600 --> 00:32:26,400
Speaker 2: you're looking towards other ways of investing, oftentimes you're talking

733
00:32:26,400 --> 00:32:29,960
Speaker 2: about higher levels of risk, right, And there's always risk

734
00:32:30,560 --> 00:32:34,000
Speaker 2: in investing. There's also risk when it comes to not investing, right,

735
00:32:34,000 --> 00:32:36,160
Speaker 2: and that's a known quantity risk of inflation.

736
00:32:36,320 --> 00:32:36,520
Speaker 1: Right.

737
00:32:37,080 --> 00:32:39,360
Speaker 2: But that also doesn't mean that we need to invest

738
00:32:39,480 --> 00:32:43,160
Speaker 2: in super niche ways to try and juce our returns.

739
00:32:43,440 --> 00:32:45,360
Speaker 2: Let the process, I think is what you're saying, basically,

740
00:32:45,400 --> 00:32:47,640
Speaker 2: at dollar cost average and time in the market do

741
00:32:47,680 --> 00:32:51,280
Speaker 2: its job. My guess is that that Justin hasn't seen

742
00:32:51,360 --> 00:32:53,520
Speaker 2: much out there on this topic of investing in carbon

743
00:32:53,760 --> 00:32:55,960
Speaker 2: carbon credit. There's not a whole lot out there on

744
00:32:55,960 --> 00:32:59,440
Speaker 2: the subject, and that's because it is truly incredibly niche,

745
00:32:59,520 --> 00:33:02,960
Speaker 2: right and It's been said that finding finding a niche,

746
00:33:03,040 --> 00:33:04,160
Speaker 2: I guess, if you want to pronounce it that way,

747
00:33:04,160 --> 00:33:06,000
Speaker 2: will make you rich. And that might be true in

748
00:33:06,000 --> 00:33:08,120
Speaker 2: some case. I think it's maybe more they're true in.

749
00:33:08,080 --> 00:33:11,160
Speaker 1: The niches, are in the niches. Yeah, yeah, they're going

750
00:33:11,240 --> 00:33:13,560
Speaker 1: to go with a niche prencia, right, I think that's more.

751
00:33:13,680 --> 00:33:15,480
Speaker 1: I think that's more about being like a top one

752
00:33:15,560 --> 00:33:18,760
Speaker 1: percenter in your profession than investing in off the wall things.

753
00:33:19,080 --> 00:33:21,160
Speaker 1: But I see the attraction that I see why people

754
00:33:21,200 --> 00:33:23,000
Speaker 1: want to do that. I guess you just have to

755
00:33:23,040 --> 00:33:25,720
Speaker 1: know that the greater the risk you're taking on you

756
00:33:25,720 --> 00:33:28,360
Speaker 1: could see outside returns, you might also see the opposite,

757
00:33:28,360 --> 00:33:29,080
Speaker 1: and that's a big risk.

758
00:33:29,160 --> 00:33:29,240
Speaker 3: Ye.

759
00:33:29,360 --> 00:33:33,040
Speaker 1: Well, and these these carbon credit ETFs are expensive as well.

760
00:33:33,480 --> 00:33:36,360
Speaker 1: That's an important part of the investing decision because one

761
00:33:36,360 --> 00:33:38,200
Speaker 1: of the main problems with funds that allow you to

762
00:33:38,200 --> 00:33:40,960
Speaker 1: invest in carbon credits in futures is the expense ratio

763
00:33:41,080 --> 00:33:43,160
Speaker 1: that they come with. The most popular ones out there,

764
00:33:43,200 --> 00:33:46,680
Speaker 1: they've got an almost zero point eight percent expense ratio,

765
00:33:47,120 --> 00:33:50,320
Speaker 1: and then on top of that they've underperformed a diversified

766
00:33:50,400 --> 00:33:53,360
Speaker 1: mix of stocks by quite a bit in recent history

767
00:33:54,080 --> 00:33:57,360
Speaker 1: and of course past returns. They're not indicative of future results,

768
00:33:57,640 --> 00:34:01,360
Speaker 1: but it is really hard to overcome the much higher

769
00:34:01,640 --> 00:34:04,560
Speaker 1: guaranteed expense that you're gonna pay no matter what, and

770
00:34:04,800 --> 00:34:08,319
Speaker 1: that's locked in, yeah, no matter exactly. And if you

771
00:34:08,320 --> 00:34:10,040
Speaker 1: look back a little bit, like when these funds were

772
00:34:10,040 --> 00:34:12,960
Speaker 1: first announced, they seem to have done pretty well, like

773
00:34:13,000 --> 00:34:15,560
Speaker 1: they're but it's because they're hot. They're new on the scene.

774
00:34:15,600 --> 00:34:17,160
Speaker 1: Folks are thinking, oh, this is gonna be the next

775
00:34:17,200 --> 00:34:19,840
Speaker 1: new thing. But since then, it's like, well, not totally

776
00:34:19,840 --> 00:34:23,520
Speaker 1: sure what's gonna come of these carbon credit ets. They've

777
00:34:23,520 --> 00:34:26,640
Speaker 1: certainly tapered off, and I think there's the juries out

778
00:34:26,680 --> 00:34:29,839
Speaker 1: as to the success and the sort of viability of

779
00:34:29,880 --> 00:34:32,960
Speaker 1: the carbon credit market and whether or not that's something

780
00:34:32,960 --> 00:34:36,439
Speaker 1: that countries even continue to do. Like if you're looking

781
00:34:36,440 --> 00:34:39,320
Speaker 1: at it from an environmental standpoint, it's it's not certain

782
00:34:39,360 --> 00:34:42,480
Speaker 1: either because some folks have they've caught it essentially like

783
00:34:42,520 --> 00:34:45,600
Speaker 1: a license to pollute, right because before maybe before it's like, well,

784
00:34:45,600 --> 00:34:49,000
Speaker 1: there's like a pressure to find cleaner energy sources or

785
00:34:49,000 --> 00:34:51,160
Speaker 1: to pollute a little bit less. But then when the

786
00:34:51,560 --> 00:34:53,560
Speaker 1: carbon credits come on the scene, it's like, oh, okay,

787
00:34:53,600 --> 00:34:55,440
Speaker 1: well we can we can do whatever we want and

788
00:34:55,480 --> 00:34:57,440
Speaker 1: we'll just buy the carbon credits. It sort of relieves

789
00:34:57,480 --> 00:35:01,520
Speaker 1: them of their guilt. Yeah, They're ins are cleared, and

790
00:35:01,560 --> 00:35:04,120
Speaker 1: so that's one of the things that makes me a

791
00:35:04,160 --> 00:35:07,520
Speaker 1: little more skeptical as to the effectiveness of carbon credits

792
00:35:07,520 --> 00:35:10,399
Speaker 1: and then ultimately the future of the carbon credit market. Yeah. Well,

793
00:35:10,440 --> 00:35:12,960
Speaker 1: and you mentioned kind of when they first launched on

794
00:35:12,960 --> 00:35:14,560
Speaker 1: how they were kind of sexy and people are investing

795
00:35:14,560 --> 00:35:17,400
Speaker 1: in them. It makes me think of when a stock

796
00:35:17,440 --> 00:35:20,960
Speaker 1: debuts on an exchange. Makes me think of a company

797
00:35:20,960 --> 00:35:23,560
Speaker 1: like Rivian love their vehicles. Guess what if I had

798
00:35:23,600 --> 00:35:25,359
Speaker 1: invested ten grand in Rivian just because I thought their

799
00:35:25,440 --> 00:35:28,399
Speaker 1: vehicles were sexy, Well, I'd have about two grand right now.

800
00:35:29,200 --> 00:35:31,080
Speaker 1: I'd be much further away from my goal of buying

801
00:35:31,080 --> 00:35:32,880
Speaker 1: a Ribbean eventually actually owning a Ribbian.

802
00:35:33,000 --> 00:35:35,799
Speaker 2: Yes, so just because and think about what the stock

803
00:35:35,800 --> 00:35:37,239
Speaker 2: did on the first couple of days. I mean it

804
00:35:37,280 --> 00:35:40,680
Speaker 2: was people were riding high on Ribbian, and that that's

805
00:35:40,680 --> 00:35:42,799
Speaker 2: the case for a whole lot of stocks. When they

806
00:35:42,800 --> 00:35:44,680
Speaker 2: make their debut on an exchange, there's a lot of

807
00:35:45,000 --> 00:35:47,560
Speaker 2: people are ecstatic and there's a lot of energy surrounding

808
00:35:47,560 --> 00:35:49,640
Speaker 2: that stock. A lot of trading that stock, and then

809
00:35:49,840 --> 00:35:52,000
Speaker 2: eventually the fundamental starts to take over and people are like,

810
00:35:52,080 --> 00:35:55,160
Speaker 2: does this company make cars that make money? And the

811
00:35:55,239 --> 00:35:57,680
Speaker 2: answer for Rivian has been no. They make beautiful cars,

812
00:35:57,680 --> 00:36:01,359
Speaker 2: but they don't make money yet, although they've got more

813
00:36:01,360 --> 00:36:03,520
Speaker 2: time to burn cash thanks to that new infusion from

814
00:36:03,600 --> 00:36:08,520
Speaker 2: VW Right. But the options are limited for carbon credit

815
00:36:08,560 --> 00:36:09,400
Speaker 2: investment exposure.

816
00:36:09,480 --> 00:36:09,600
Speaker 3: Right.

817
00:36:09,600 --> 00:36:10,279
Speaker 1: There are a.

818
00:36:10,320 --> 00:36:12,960
Speaker 2: Few ets, Matt, you mentioned that they are, they're kind

819
00:36:12,960 --> 00:36:14,439
Speaker 2: of expensive. There are a couple of them, but they're

820
00:36:14,480 --> 00:36:17,280
Speaker 2: just there aren't many. So the next I think important

821
00:36:17,280 --> 00:36:18,880
Speaker 2: thing to mention here in the answer to this question

822
00:36:19,360 --> 00:36:23,400
Speaker 2: is the importance of simplicity. We're not necessarily against sector

823
00:36:23,440 --> 00:36:27,200
Speaker 2: investing or having some exposure to single stocks, but only

824
00:36:27,239 --> 00:36:31,120
Speaker 2: if it's confined to a small percentage of your portfolio. Right,

825
00:36:31,200 --> 00:36:34,560
Speaker 2: Let the incredibly boring stuff do the heavy lifting for you.

826
00:36:35,000 --> 00:36:39,440
Speaker 2: The fun stuff, meme stocks, random crypto coins, short selling

827
00:36:40,239 --> 00:36:41,840
Speaker 2: whatever stock you think is going to go down in

828
00:36:41,840 --> 00:36:46,759
Speaker 2: the near future. Sexy alternative investment choices. Those are spicy,

829
00:36:46,960 --> 00:36:50,400
Speaker 2: they can be fun, and maybe it's more interesting to

830
00:36:50,400 --> 00:36:52,239
Speaker 2: pay attention to and to mess with. But if the

831
00:36:52,280 --> 00:36:55,000
Speaker 2: goal is building wealth, that's really the opposite of what

832
00:36:55,000 --> 00:36:57,240
Speaker 2: we want to be doing. The boring thing is getting

833
00:36:57,280 --> 00:36:58,919
Speaker 2: us where we want to go, and this other stuff

834
00:36:59,000 --> 00:37:01,200
Speaker 2: is probably more of a distraction. Is it going to

835
00:37:01,239 --> 00:37:05,719
Speaker 2: provide higher returns? Maybe maybe not, But I can tell

836
00:37:05,760 --> 00:37:07,480
Speaker 2: you for a lot of people, it's going to distract

837
00:37:07,520 --> 00:37:08,800
Speaker 2: you from the main goal totally.

838
00:37:09,000 --> 00:37:14,000
Speaker 1: Yeah. And to continue my skeptical rant, another potential downside

839
00:37:14,120 --> 00:37:18,200
Speaker 1: are the different changing government regulations on the carbon credit front.

840
00:37:18,400 --> 00:37:21,880
Speaker 1: Government interference, They can change things overnight. Just think about

841
00:37:22,080 --> 00:37:25,640
Speaker 1: the different tech companies and Europe, the EU, they've held

842
00:37:25,640 --> 00:37:28,480
Speaker 1: a microscope to companies like Facebook and Apple and how

843
00:37:28,520 --> 00:37:31,200
Speaker 1: it is that they're handling data. Not that those companies

844
00:37:31,239 --> 00:37:33,960
Speaker 1: don't deserve regulation or some sort of oversight, but it

845
00:37:33,960 --> 00:37:36,560
Speaker 1: would just give me some pause before I decided to

846
00:37:36,600 --> 00:37:40,120
Speaker 1: invest a major chunk of change into aside from even

847
00:37:40,200 --> 00:37:43,360
Speaker 1: carbon credits, even into a single tech stop for instance.

848
00:37:43,680 --> 00:37:47,440
Speaker 1: And so diversification owning tech companies, owning those within the

849
00:37:47,440 --> 00:37:50,120
Speaker 1: confines of an index fund, like it's going to give

850
00:37:50,120 --> 00:37:54,839
Speaker 1: you access to the upsides while limiting the downside possibilities.

851
00:37:54,840 --> 00:37:58,080
Speaker 1: This is personally, This isn't something like there is some

852
00:37:58,120 --> 00:37:59,880
Speaker 1: single stock investing that I'll do. There is some crypto

853
00:38:00,120 --> 00:38:01,680
Speaker 1: thing that I'll do. But when it comes to something

854
00:38:01,719 --> 00:38:04,400
Speaker 1: like this, it just feels it feels way too fresh,

855
00:38:04,480 --> 00:38:07,640
Speaker 1: way too wild wild West for me to want to

856
00:38:07,680 --> 00:38:10,239
Speaker 1: put any money towards. Even though you might love the

857
00:38:10,280 --> 00:38:13,920
Speaker 1: mission or and the idea, the ability to commoditize and

858
00:38:13,960 --> 00:38:17,080
Speaker 1: create a market for incentivizing companies to polute less, I

859
00:38:17,160 --> 00:38:19,080
Speaker 1: still think, I guess I think there might be better

860
00:38:19,080 --> 00:38:22,239
Speaker 1: ways of using your dollars to sort of fund that

861
00:38:22,320 --> 00:38:25,120
Speaker 1: kind of initiative and that kind of good without actually

862
00:38:25,120 --> 00:38:29,239
Speaker 1: buying carbon credit ets, without mixing your investments with the

863
00:38:29,760 --> 00:38:31,640
Speaker 1: good that you're looking to accomplish in the world.

864
00:38:31,719 --> 00:38:34,759
Speaker 2: Yeah, there's this concept of core and explore that the

865
00:38:35,200 --> 00:38:37,520
Speaker 2: massive chunk of your portfolio that's the core, and that

866
00:38:37,640 --> 00:38:39,920
Speaker 2: you're exploring maybe a couple of little rabbit trails off

867
00:38:39,920 --> 00:38:44,160
Speaker 2: the side, with a small percentage of your investable assets.

868
00:38:44,360 --> 00:38:46,239
Speaker 2: I think that's totally fine. And if this is the

869
00:38:46,280 --> 00:38:49,840
Speaker 2: thing you want to explore with a couple percentage points

870
00:38:49,880 --> 00:38:52,279
Speaker 2: of your overall portfolio, more power to you. I just

871
00:38:52,320 --> 00:38:54,400
Speaker 2: wouldn't put too many eggs in that in that basket,

872
00:38:54,440 --> 00:38:57,359
Speaker 2: and I wouldn't expect that's going to make you rich

873
00:38:57,400 --> 00:39:00,120
Speaker 2: in comparison to their tried and true path. Where are

874
00:39:00,120 --> 00:39:01,800
Speaker 2: you going to funnel the majority of your assets?

875
00:39:01,880 --> 00:39:04,320
Speaker 1: Yeah? Honestly, to me, it almost makes like bitcoin seem

876
00:39:04,440 --> 00:39:08,839
Speaker 1: like safe and conservative and non volatile, just because it's

877
00:39:08,840 --> 00:39:11,040
Speaker 1: just been around long, which it's never been called that before, No,

878
00:39:11,080 --> 00:39:12,400
Speaker 1: not in a history of bitcoin.

879
00:39:12,440 --> 00:39:12,680
Speaker 3: Yeah.

880
00:39:12,719 --> 00:39:14,960
Speaker 1: All right, we'll take a quick break, and after that

881
00:39:15,000 --> 00:39:17,880
Speaker 1: we'll hear from a listener who feels like his opportunity

882
00:39:18,320 --> 00:39:20,760
Speaker 1: to purchase a home that it is slipping through his fingers.

883
00:39:20,760 --> 00:39:30,759
Speaker 1: We'll get to that more right after this. All right, Matt,

884
00:39:30,760 --> 00:39:32,839
Speaker 1: we're back. We've got more questions to get too.

885
00:39:33,200 --> 00:39:35,680
Speaker 2: In fact, a couple questions from the same listener who

886
00:39:35,719 --> 00:39:38,920
Speaker 2: sent us an email recently. This comes from a listener

887
00:39:38,960 --> 00:39:41,840
Speaker 2: pool Kit, and he says, my initial plan was to

888
00:39:41,840 --> 00:39:43,759
Speaker 2: buy a home, and it's why I have one hundred

889
00:39:43,800 --> 00:39:46,720
Speaker 2: and thirty thousand bucks in liquid cash. But then COVID happened.

890
00:39:46,800 --> 00:39:49,560
Speaker 2: House price is skyrocketed. We all know that at this point, right,

891
00:39:49,680 --> 00:39:52,239
Speaker 2: he says, After that, interest rates have gone up, so

892
00:39:52,239 --> 00:39:54,480
Speaker 2: I'm priced out of the market. I'm planning on maxing

893
00:39:54,520 --> 00:39:57,160
Speaker 2: out my retirement accounts this year. Should I still keep

894
00:39:57,160 --> 00:40:00,000
Speaker 2: that much cash liquid in my high yield savings account

895
00:40:00,040 --> 00:40:01,719
Speaker 2: or should I invest it? I do want to buy

896
00:40:01,719 --> 00:40:03,640
Speaker 2: a property in the near future if the rates come down.

897
00:40:03,960 --> 00:40:06,239
Speaker 2: Would love to know if non HOA properties are a

898
00:40:06,239 --> 00:40:08,520
Speaker 2: good real estate investment as far as being a primary

899
00:40:08,520 --> 00:40:11,640
Speaker 2: residence or a rental property. Also, I'm always anxious about

900
00:40:11,680 --> 00:40:14,600
Speaker 2: my investments in my retirement brokerage accounts, whether they are

901
00:40:14,640 --> 00:40:17,160
Speaker 2: diverse enough and if the expensory show is too high.

902
00:40:17,320 --> 00:40:20,759
Speaker 2: What's a good resource to use for my rate my portfolio?

903
00:40:20,840 --> 00:40:21,319
Speaker 1: Type of thing.

904
00:40:21,640 --> 00:40:24,080
Speaker 2: I tried reading on Reddit, but it's too much info.

905
00:40:24,320 --> 00:40:27,359
Speaker 2: We've all been there by the local game. Reddit can

906
00:40:27,400 --> 00:40:30,120
Speaker 2: be so helpful, it can also be like overwhelming people

907
00:40:30,160 --> 00:40:32,360
Speaker 2: battling it out, a lot going on, too much to

908
00:40:32,400 --> 00:40:35,080
Speaker 2: take in. Sometimes I totally get that sentiment.

909
00:40:35,200 --> 00:40:37,640
Speaker 1: Yeah yeah, yeah, So we've got several questions to get

910
00:40:37,640 --> 00:40:40,360
Speaker 1: to here. Let's talk about the housing part of his

911
00:40:40,480 --> 00:40:43,080
Speaker 1: question first, which is a tough one, and I think

912
00:40:43,160 --> 00:40:46,719
Speaker 1: Polkit finds himself in a situation that many Americans have

913
00:40:46,760 --> 00:40:49,040
Speaker 1: found themselves in. Right, They've been saving diligently, they want

914
00:40:49,080 --> 00:40:51,680
Speaker 1: to buy a house, but then it feels like their

915
00:40:51,760 --> 00:40:54,000
Speaker 1: cheese had moved the finish line. It got pushed out

916
00:40:54,040 --> 00:40:57,480
Speaker 1: a whole lot further because we've seen prices increase, we've

917
00:40:57,480 --> 00:41:00,960
Speaker 1: seen interest rates escalate, and now they're wondering if they

918
00:41:01,000 --> 00:41:03,320
Speaker 1: should throw in the towel. Well, I think the key

919
00:41:03,400 --> 00:41:06,080
Speaker 1: to our answer for polkit is when he said, I

920
00:41:06,120 --> 00:41:08,760
Speaker 1: do want to buy a property in the near future.

921
00:41:09,040 --> 00:41:13,000
Speaker 1: So that's key. And if rates come down, and we

922
00:41:13,080 --> 00:41:14,799
Speaker 1: got to say, we can't guarantee that rates are going

923
00:41:14,880 --> 00:41:17,640
Speaker 1: to come down, nor can we guarantee that if they

924
00:41:17,680 --> 00:41:21,160
Speaker 1: do that, you'll see prices home prices go down simultaneously,

925
00:41:21,200 --> 00:41:23,200
Speaker 1: and in fact, I think we are likely to see

926
00:41:23,200 --> 00:41:27,080
Speaker 1: the opposite, because folks are calculating financing into what it

927
00:41:27,160 --> 00:41:28,880
Speaker 1: is that they can afford, right, and so if all

928
00:41:28,880 --> 00:41:31,359
Speaker 1: of a sudden, oh, well my payment is dropped by

929
00:41:31,400 --> 00:41:35,200
Speaker 1: one thousand to fifteen hundred dollars, maybe even two thousand dollars, well,

930
00:41:35,239 --> 00:41:37,200
Speaker 1: they're thinking, well, that means I can afford more house.

931
00:41:37,320 --> 00:41:39,160
Speaker 1: And I think that, honestly, I think that's going to

932
00:41:39,200 --> 00:41:43,600
Speaker 1: significantly drive up prices. Not that I'm making any predictions either,

933
00:41:44,000 --> 00:41:47,160
Speaker 1: because it seems that housing generally speaking might be a

934
00:41:47,160 --> 00:41:47,760
Speaker 1: bit overpriced.

935
00:41:47,800 --> 00:41:49,960
Speaker 2: A lot of people have assumed, and I think wrongly

936
00:41:50,080 --> 00:41:53,560
Speaker 2: Matt that the rates coming down means greater affordability in

937
00:41:53,600 --> 00:41:56,160
Speaker 2: the housing market. That might be true, but it also

938
00:41:56,160 --> 00:41:57,920
Speaker 2: could drive prices up so substantially.

939
00:41:57,960 --> 00:42:00,399
Speaker 1: I think it will that. Yeah, it might oh true,

940
00:42:00,800 --> 00:42:01,080
Speaker 1: all right.

941
00:42:01,239 --> 00:42:03,640
Speaker 2: And the fact is buying a house and as being

942
00:42:03,640 --> 00:42:05,840
Speaker 2: a near term goal, I think that means that you

943
00:42:05,880 --> 00:42:08,440
Speaker 2: should keep socking money into savings for that down payment.

944
00:42:08,480 --> 00:42:10,200
Speaker 1: Yep, you said you still want that as a goal.

945
00:42:10,360 --> 00:42:12,640
Speaker 1: As a near term goals, that's the thing. And if

946
00:42:12,680 --> 00:42:14,640
Speaker 1: you're talking about something in the near term, yep, that's

947
00:42:14,680 --> 00:42:16,080
Speaker 1: not money that you want to stick in the market.

948
00:42:16,160 --> 00:42:18,719
Speaker 2: And markets are obviously hard to predict. There's only so

949
00:42:18,800 --> 00:42:21,160
Speaker 2: much within our control as savers and investors and want

950
00:42:21,200 --> 00:42:24,280
Speaker 2: to be homeowners. But we have seen a noticeable slowdown

951
00:42:24,320 --> 00:42:27,040
Speaker 2: at least in price appreciation. Right, They couldn't keep going

952
00:42:27,080 --> 00:42:30,759
Speaker 2: up at the rate forever, outstripping real income numbers. And

953
00:42:31,040 --> 00:42:33,200
Speaker 2: I just think I think pool Kit should stay the course.

954
00:42:33,480 --> 00:42:36,080
Speaker 2: He's been investing regularly in addition to saving for that

955
00:42:36,120 --> 00:42:37,759
Speaker 2: home purchase. He says he's going to max out his

956
00:42:37,800 --> 00:42:38,920
Speaker 2: retirement accounts this year.

957
00:42:39,120 --> 00:42:39,719
Speaker 1: I would say, as.

958
00:42:39,640 --> 00:42:42,959
Speaker 2: Long as you're not abandoning that in order to pad

959
00:42:43,000 --> 00:42:46,040
Speaker 2: that savings more quickly. Then keep saving for the down payment,

960
00:42:46,120 --> 00:42:48,279
Speaker 2: keep making that a high priority in your life. You

961
00:42:48,320 --> 00:42:50,600
Speaker 2: never know when the right opportunity might come along. You're

962
00:42:50,640 --> 00:42:52,279
Speaker 2: gonna want to be ready to pounce, even if it

963
00:42:52,360 --> 00:42:55,080
Speaker 2: means substandard returns for some of those dollars in your

964
00:42:55,120 --> 00:42:56,160
Speaker 2: highyield savings account.

965
00:42:56,200 --> 00:42:58,759
Speaker 1: Yeah, in this case, full optimization of every single dollar,

966
00:42:58,800 --> 00:43:01,440
Speaker 1: it's not possible. But what you're doing is you're protecting

967
00:43:01,440 --> 00:43:03,480
Speaker 1: those dollars for one of the biggest goals in your

968
00:43:03,480 --> 00:43:05,719
Speaker 1: life and for one of the biggest expenses that you're

969
00:43:05,719 --> 00:43:08,560
Speaker 1: going to ever experience. But then you also asked about

970
00:43:08,560 --> 00:43:10,960
Speaker 1: investing in a non HOA property, which I think could

971
00:43:11,000 --> 00:43:12,560
Speaker 1: be a good thing or it could be a bad thing.

972
00:43:12,600 --> 00:43:15,160
Speaker 1: Because the because I think he's the way he posed

973
00:43:15,200 --> 00:43:17,680
Speaker 1: his question is that he is assuming that an HOA

974
00:43:17,760 --> 00:43:20,760
Speaker 1: is a good thing, right, because it essentially protects your investment.

975
00:43:20,760 --> 00:43:22,839
Speaker 1: It's like, all right, we don't have the house that's

976
00:43:22,840 --> 00:43:26,520
Speaker 1: in shambles two houses down that's driving down the value

977
00:43:26,520 --> 00:43:30,320
Speaker 1: of every house in the neighborhood Christmas in July, right exactly.

978
00:43:30,600 --> 00:43:34,400
Speaker 1: But simultaneously, I feel like it sort of limits. What

979
00:43:34,440 --> 00:43:36,960
Speaker 1: it does is it removes like the extremes, because I

980
00:43:36,960 --> 00:43:39,439
Speaker 1: think that that's also going to mean that you're also

981
00:43:39,480 --> 00:43:41,440
Speaker 1: not going to you may not see as much appreciation

982
00:43:41,480 --> 00:43:44,800
Speaker 1: because there aren't folks who are kind of going above

983
00:43:44,800 --> 00:43:46,600
Speaker 1: and beyond when it comes to what it is that

984
00:43:46,640 --> 00:43:48,600
Speaker 1: they're looking to get out of their house, which might

985
00:43:48,680 --> 00:43:52,000
Speaker 1: drive values in the surrounding area up. And so so

986
00:43:52,160 --> 00:43:54,520
Speaker 1: much of it I think comes down to your specific market,

987
00:43:54,520 --> 00:43:57,120
Speaker 1: the specific neighborhood that you're looking at, and how that

988
00:43:57,239 --> 00:44:00,760
Speaker 1: is going to impact that specific property as an investment.

989
00:44:00,920 --> 00:44:03,160
Speaker 1: And that's assuming, of course, that you're looking at this

990
00:44:03,200 --> 00:44:05,680
Speaker 1: through an investment lens, which is what you're doing. But

991
00:44:05,840 --> 00:44:07,919
Speaker 1: polkett I would say to make sure that you're also

992
00:44:07,920 --> 00:44:11,480
Speaker 1: looking at this from a personal from a lifestyle standpoint,

993
00:44:11,520 --> 00:44:14,719
Speaker 1: because like overall, like when you look at real estate,

994
00:44:14,719 --> 00:44:18,840
Speaker 1: over the past one hundred years, primary residences have vastly

995
00:44:18,960 --> 00:44:21,880
Speaker 1: underperformed the market overall, and so if you're looking at

996
00:44:21,880 --> 00:44:23,880
Speaker 1: this purely from a financial standpoint, it doesn't make a

997
00:44:23,880 --> 00:44:26,200
Speaker 1: whole lot of sense. But you buy a house because

998
00:44:26,200 --> 00:44:27,920
Speaker 1: you want to stay in the area, because you love

999
00:44:27,960 --> 00:44:30,600
Speaker 1: a certain neighborhood. Okay, maybe you've got friends in the area,

1000
00:44:30,640 --> 00:44:32,520
Speaker 1: and that kind of thing as opposed to looking at

1001
00:44:32,520 --> 00:44:34,480
Speaker 1: it purely from a financial standpoint.

1002
00:44:34,560 --> 00:44:37,560
Speaker 2: Yeah, I will say hoa's can be a hornet's nest

1003
00:44:37,600 --> 00:44:39,400
Speaker 2: of rules, fees, and hassholes.

1004
00:44:39,480 --> 00:44:41,000
Speaker 1: You have to watch out for that. You have to

1005
00:44:41,080 --> 00:44:42,839
Speaker 1: know the you know what you're getting into.

1006
00:44:42,880 --> 00:44:46,279
Speaker 2: Yeah, the financial abilities of that HOA getting levied with

1007
00:44:46,320 --> 00:44:48,360
Speaker 2: like a special assessment can be pretty frustrating, can be

1008
00:44:48,400 --> 00:44:51,960
Speaker 2: incredibly costly. So how much savings does the HOA have

1009
00:44:52,040 --> 00:44:54,759
Speaker 2: on hand? Is there any deferred maintenance that they haven't done?

1010
00:44:54,840 --> 00:44:57,120
Speaker 2: You want to answer to some of those questions before

1011
00:44:57,160 --> 00:44:59,960
Speaker 2: you buy a home in an HOA community, So yeah,

1012
00:45:00,000 --> 00:45:03,439
Speaker 2: I would at least think about that. And your last

1013
00:45:03,440 --> 00:45:04,680
Speaker 2: part of the question, you said, is there a place

1014
00:45:04,719 --> 00:45:07,759
Speaker 2: to get your portfolio rated? I like the idea, but

1015
00:45:07,800 --> 00:45:09,920
Speaker 2: there's nothing that I know of besides hiring a financial

1016
00:45:09,920 --> 00:45:12,640
Speaker 2: advisor and having a conversation. The main reason I think

1017
00:45:12,640 --> 00:45:15,799
Speaker 2: a product like this probably doesn't exist is because our

1018
00:45:15,840 --> 00:45:18,200
Speaker 2: financial status and our goals have so much to do

1019
00:45:18,280 --> 00:45:21,200
Speaker 2: with the suitability of our investment choices. But you could

1020
00:45:21,200 --> 00:45:23,600
Speaker 2: totally hire someone in The two places we'd probably recommend

1021
00:45:23,640 --> 00:45:26,359
Speaker 2: are Nectarine or Domain money. There are two different types

1022
00:45:26,400 --> 00:45:29,279
Speaker 2: of low cost advisor services that would say, go to

1023
00:45:29,280 --> 00:45:31,600
Speaker 2: one of those two services in order to get some feedback.

1024
00:45:31,800 --> 00:45:34,680
Speaker 2: If you're losing sleep, you're overly anxious, that can help

1025
00:45:34,719 --> 00:45:36,400
Speaker 2: take some weight off your mind. Having that second set

1026
00:45:36,440 --> 00:45:39,800
Speaker 2: of eyeballs from someone who eats, sleeps, and breathes money,

1027
00:45:40,320 --> 00:45:43,120
Speaker 2: who helps people out to reset their financial goals all

1028
00:45:43,160 --> 00:45:45,920
Speaker 2: the time. And I think Polkit is at least in

1029
00:45:45,960 --> 00:45:48,600
Speaker 2: the financial position based on what he saved and invested

1030
00:45:48,960 --> 00:45:51,200
Speaker 2: to be able to fork over the money to get

1031
00:45:51,239 --> 00:45:53,200
Speaker 2: that second set of eyeballs. I don't know of any

1032
00:45:53,200 --> 00:45:55,800
Speaker 2: sort of like algorithm or fintech product that's going to

1033
00:45:56,160 --> 00:45:58,359
Speaker 2: do that for him, but I do think like a

1034
00:45:58,400 --> 00:45:59,840
Speaker 2: personalized service could make sense.

1035
00:45:59,719 --> 00:46:01,399
Speaker 1: Totally, and I think that that would be money well

1036
00:46:01,440 --> 00:46:04,160
Speaker 1: spent for him specifically. Yeah, but all right, let's get

1037
00:46:04,239 --> 00:46:06,000
Speaker 1: to the beer, Joel that you and I enjoyed during

1038
00:46:06,000 --> 00:46:10,280
Speaker 1: this episode. This was a whipped pineapple Goes from Westbrook

1039
00:46:10,400 --> 00:46:14,600
Speaker 1: Brewing Company. What did you think, bud Man? I liked it.

1040
00:46:15,920 --> 00:46:19,160
Speaker 2: The label says sweet, sour, and tropical. It was all

1041
00:46:19,200 --> 00:46:22,400
Speaker 2: the above. It had like vanilla and pineapple, and for

1042
00:46:22,440 --> 00:46:25,640
Speaker 2: some reason those things mixed together incredibly well. You dig

1043
00:46:25,680 --> 00:46:29,520
Speaker 2: it and Westbrook is just a top notched brewery located

1044
00:46:29,640 --> 00:46:31,440
Speaker 2: in South Carolina over.

1045
00:46:31,680 --> 00:46:33,640
Speaker 1: There in Charleston Mount Pleasant, to be.

1046
00:46:33,840 --> 00:46:36,960
Speaker 2: Exact, And this is a pleasant beer, Matt. It's I

1047
00:46:36,960 --> 00:46:38,520
Speaker 2: think one of my favorite beers I've ever had for them,

1048
00:46:38,640 --> 00:46:39,279
Speaker 2: I really love.

1049
00:46:39,640 --> 00:46:39,839
Speaker 3: Yeah.

1050
00:46:40,040 --> 00:46:43,400
Speaker 1: Wow, would you think I dug it? But I guess

1051
00:46:43,440 --> 00:46:47,160
Speaker 1: I was. You know, when you lead with sweet, sour, tropical,

1052
00:46:47,280 --> 00:46:49,600
Speaker 1: so you lead with sweet, like those are the descriptors.

1053
00:46:49,640 --> 00:46:51,440
Speaker 1: I expect it to be a little bit sweeter. You

1054
00:46:51,440 --> 00:46:54,160
Speaker 1: shouldn't be surprised that you wanted it. So, Yeah, it

1055
00:46:54,239 --> 00:46:55,759
Speaker 1: was like p some sugar in this thing. It has

1056
00:46:55,760 --> 00:46:58,480
Speaker 1: some tartness going on, and it certainly had that pineapple flavor,

1057
00:46:58,480 --> 00:47:00,040
Speaker 1: but you know what it kind of felt like, But

1058
00:47:00,080 --> 00:47:01,640
Speaker 1: it kind of tasted like was a pineapple that wasn't

1059
00:47:01,680 --> 00:47:05,160
Speaker 1: quite ripe, that was wasn't quite fully right. But I

1060
00:47:05,200 --> 00:47:08,759
Speaker 1: was expecting like a little more backbone when it co

1061
00:47:09,800 --> 00:47:13,640
Speaker 1: when it comes to my tropical cocktails, Oh it kind

1062
00:47:13,640 --> 00:47:15,480
Speaker 1: of it does. It kind of makes me think of

1063
00:47:15,480 --> 00:47:19,080
Speaker 1: like a rum cocktail with a pineapple and the additional

1064
00:47:19,160 --> 00:47:21,359
Speaker 1: kind of like tropical flavors. Yeah, it's like the beer

1065
00:47:21,360 --> 00:47:24,600
Speaker 1: you drink at in the Dominican Republic for sure. Absolutely, Yeah, Yeah,

1066
00:47:24,640 --> 00:47:26,560
Speaker 1: but yeah, maybe I shouldn't expect all that sweetness out

1067
00:47:26,560 --> 00:47:29,719
Speaker 1: of a goza because those are Yeah, they are typically lighter, but.

1068
00:47:29,719 --> 00:47:33,080
Speaker 2: Their original goza still so fantastic. It's it's like briny,

1069
00:47:33,400 --> 00:47:34,359
Speaker 2: great stage.

1070
00:47:34,480 --> 00:47:34,799
Speaker 4: In the mouth.

1071
00:47:35,400 --> 00:47:38,560
Speaker 1: I picked up a whole lot of briny with this one. No,

1072
00:47:38,680 --> 00:47:41,240
Speaker 1: I didn't have nearly the same compared to the compared

1073
00:47:41,239 --> 00:47:43,400
Speaker 1: to the original. Yeah, but still glad we got to

1074
00:47:43,440 --> 00:47:44,120
Speaker 1: enjoy it. I agreed.

1075
00:47:44,520 --> 00:47:45,880
Speaker 2: That's going to do it for this episode. We'll have

1076
00:47:45,920 --> 00:47:48,400
Speaker 2: links to the show notes. Some articles actually the correspond

1077
00:47:48,440 --> 00:47:50,600
Speaker 2: to some of the things we talked about in this episode.

1078
00:47:50,680 --> 00:47:52,680
Speaker 2: We'll have those up in the show notes at howtomoney

1079
00:47:52,680 --> 00:47:54,160
Speaker 2: dot com. There's a lot of other good stuff up

1080
00:47:54,160 --> 00:47:56,920
Speaker 2: there too, including our credit card tool. If you're in

1081
00:47:56,960 --> 00:47:58,879
Speaker 2: the market for a new credit card and you're trying

1082
00:47:58,880 --> 00:48:00,399
Speaker 2: to figure out, well, which one is the best one

1083
00:48:00,440 --> 00:48:02,759
Speaker 2: for how I Spend, you got a Hada money dot

1084
00:48:02,760 --> 00:48:04,799
Speaker 2: com In the top right hand corner, you can find

1085
00:48:04,800 --> 00:48:07,440
Speaker 2: the credit card tool right there, super easy to use.

1086
00:48:07,440 --> 00:48:08,719
Speaker 1: Hopefully it helps you out. Matt.

1087
00:48:08,760 --> 00:48:11,000
Speaker 2: That's going to do it for this one. Until next time,

1088
00:48:11,360 --> 00:48:13,520
Speaker 2: Best Friends Altum, best Friends Out