Speaker 1: Welcome to Had of Money. I'm Joel, I'm Matt, and
Speaker 1: today we're answering your listener questions.
Speaker 2: That's right, buddy, We've got listener questions to get to.
Speaker 2: This Monday. We've got a relational money question that I'm
Speaker 2: actually really looking forward. It's not the best situation, but
Speaker 2: I am looking forward to it because we don't talk
Speaker 2: about relationship kind of stuff as opposed to like the
Speaker 2: nuts and bolts, which is typically what we talk about
Speaker 2: here on the show.
Speaker 1: All right, so let's talk about this. Should you marry
Speaker 1: rich Matt? Should you marry for money? That's going to
Speaker 1: be the question that we get to. That's what actually
Speaker 1: Emily always tells me if you were to die, I
Speaker 1: would only marry for money the next time around.
Speaker 2: Really, yeah, she's like one hundred percent. Serio.
Speaker 1: I don't think she means it, Okay, I mean she
Speaker 1: says it a lot, so maybe she does. I think
Speaker 1: it was just trying to say. What she means is
Speaker 1: I love you. I could never love someone else like you.
Speaker 1: So for just the bank accounts, see, that's how you
Speaker 1: interpret it.
Speaker 2: But I feel like there are more layers to this
Speaker 2: financial onion to appeal. But no we will get to
Speaker 2: that relational mini question. We've got somebody else who's trying
Speaker 2: to figure out when to ditch his car, when to
Speaker 2: replace it. Another listener is looking for different ways or
Speaker 2: I guess he's trying to figure out how to afford
Speaker 2: long term care insurance, which isn't something we often talk
Speaker 2: about on the show.
Speaker 1: So wants to know whether even needs it to Yeah, yeah.
Speaker 2: Yeah, So we've got a great show lined up for
Speaker 2: y'all today.
Speaker 1: All right, let's do a frugal cheap we haven't done
Speaker 1: one in a second. This one Matt someone the other
Speaker 1: day My two thousand and five accurate SUV still running fine, nice,
Speaker 1: and it's it's been a good car. I've had it
Speaker 1: for a year and a half now. Bought it super
Speaker 1: duper used for cheap. But when I bought it, there
Speaker 1: was a crack in the passenger side of the windshield.
Speaker 1: And I remember the first time Emily got into it
Speaker 1: and she was like, what.
Speaker 2: Are you doing? Man? Like, why did you buy this thing?
Speaker 2: I was like, because what kind of hoop do you?
Speaker 3: Right?
Speaker 2: Has parked in my driveway.
Speaker 1: Because I can see just find out on my side.
Speaker 1: I don't care if you can see or not, and
Speaker 1: so I could see how it'd be more distracting from
Speaker 1: the passenger. The passenger that's way on the other side
Speaker 1: of the car, who cares?
Speaker 2: Are you so?
Speaker 1: And then I had someone that that they say, when
Speaker 1: are you going to replace your windshield?
Speaker 2: Man?
Speaker 1: I was like, this is a four thousand dollars car.
Speaker 1: I'm not planning on putting in a four hundred dollars windshield.
Speaker 1: Like it's not interested. I bought this knowing this. I
Speaker 1: knew I could see out of it. Not willing to
Speaker 1: pay ten percent of the overall cost of the vehicle
Speaker 1: just to have a clear windshield. I know in some
Speaker 1: states they actually either one they forced insurance to pay.
Speaker 2: For it or zero deductible states.
Speaker 1: Yeah, or they force you to do this because there
Speaker 1: are safety checks every year from the state. But in
Speaker 1: Georgia that's not the case. So I can keep rolling
Speaker 1: with this Florida busted windshield, New York, Arizona. I think
Speaker 1: those are all states that have the zero deductible. Essentially,
Speaker 1: it's like cracked windshield, boom, you get a replace for free.
Speaker 2: Yeah.
Speaker 1: I think it was in Virginia. I remember my friend
Speaker 1: lived there for a while and I think they had
Speaker 1: those safety checks and so if there was a crack
Speaker 1: or something, even just a nick, they might be like, hey,
Speaker 1: you gotta fix that thing. And so okay, am I
Speaker 1: frugal or cheap?
Speaker 2: Is it? Uh?
Speaker 3: Well?
Speaker 2: Has it gotten worse or the same? It's bad, It's
Speaker 2: been bad. What's funny is I've written obviously I've ridden
Speaker 2: in the vehicle. I can't really picture it. It's pretty
Speaker 2: big crack, is it really? Oh yeah, it's that's so funny.
Speaker 1: It's going up and down like three quarters of the windshield.
Speaker 2: Okay, I would say if you didn't have the ability
Speaker 2: to see through your windshield clearly, sure it's appos dumb
Speaker 2: and dumber style looking out the side. Yes, like have
Speaker 2: you obviously you've you've driven it in the rain?
Speaker 4: Right?
Speaker 2: Does the crack impact the ability of your wipers to
Speaker 2: clear the windshield?
Speaker 3: No?
Speaker 2: Okay. I think if you, let's say you were a
Speaker 2: realtor where you did business out of your vehicle, you know,
Speaker 2: like if you had a sales like job or you
Speaker 2: had clients in your car, of course that would be
Speaker 2: cheap because that could hinder the potential sale.
Speaker 1: That would be a cheap move. I'm trying to impress
Speaker 1: no one though.
Speaker 2: You are a podcaster, so the visuals don't really matter
Speaker 2: so much, especially when it comes to our vehicle. So, dude,
Speaker 2: I'm with you, one hundred percent frugal, Okay, keep the
Speaker 2: crack windshield all right, and feel free.
Speaker 1: If you are out there listening and you're like, that's
Speaker 1: so dump you should totally replace it, let me know why.
Speaker 1: Feel free to emails how to moneypod at gmail dot com.
Speaker 1: I always love hearing from you guys and hearing what
Speaker 1: I bet in some people's minds.
Speaker 2: Matt, that is cheap.
Speaker 1: It's not frugal, but I knew it buying it. It's
Speaker 1: got this crack, but to me, it's just it's basically
Speaker 1: what do you call it?
Speaker 2: Cosmetic? That's it.
Speaker 1: Yeah, And so because of that, I was down to
Speaker 1: buy it and to not replace that, and to hold
Speaker 1: on to this thing as long as I can.
Speaker 2: I'm with you, okay, So I guess on a somewhat
Speaker 2: related note, quick question, another frugal or cheap though, The
Speaker 2: side mirrors on our van are twenty twelve hundred Odyssey.
Speaker 2: It's made of plastic, and the plastic is like or
Speaker 2: the paint. It's like a covering or something. It's coming off,
Speaker 2: you know, you go through the high powered car washes,
Speaker 2: and bottom line, it looks like it's it looks pretty ratty.
Speaker 2: Do you think I should take the pressure washer and
Speaker 2: just blast it off completely and like spray it with
Speaker 2: some like black shiny spray paint to make it liquid
Speaker 2: or should I not even worry about that? This is
Speaker 2: similar because this, I would even say, is maybe even
Speaker 2: more visible because when people see our van, they know
Speaker 2: it's us because I don't know what it is. But
Speaker 2: it's like the it's almost like a vinyl covering that's
Speaker 2: getting that's that's peeling. Have you noticed it?
Speaker 3: No?
Speaker 2: I haven't, And honestly, clearly we are pointing out the
Speaker 2: fact that we don't care at all about what our
Speaker 2: vehicles look like. Yeah, I don't. I think that's true.
Speaker 2: That'd be like a that would come in about our
Speaker 2: bottle of spray paint or something.
Speaker 1: Yeah, exactly, that's so much cheaper, and that would come
Speaker 1: down I think more less about oh what am I
Speaker 1: projecting to other people as opposed to what do I
Speaker 1: care about in the car that I'm driving?
Speaker 2: Yeah, it's about like trying to keep our ride looking fresh.
Speaker 2: So like my dad.
Speaker 1: He scraped the side of our van when he was
Speaker 1: driving it, like like last year, and I didn't even
Speaker 1: bother getting it fixed that He was like, oh, no,
Speaker 1: I'll pay for it. I'm not gonna make my dad
Speaker 1: pay for that, Like come on, yeah, that to me,
Speaker 1: that would be that'd be cheap, not frugal. So I'm like, no, Dad,
Speaker 1: let's just leave it. That's the story about it. The
Speaker 1: beauty of driving old cars is that I care less
Speaker 1: about those cosmetic things and dents.
Speaker 2: But if you had pulled the trigger and you had
Speaker 2: a one to two year old Rivian and he did
Speaker 2: that in that case.
Speaker 1: That's part of the reason I don't want to one.
Speaker 1: In some ways, I'm like, because I'll freak out more
Speaker 1: about it, and I don't want to because I don't
Speaker 1: want to care about cars. Yeah, all right, let's mention
Speaker 1: the beer we're having on this episode, Matt. This one's
Speaker 1: called Ube Macapuno Delight. It's by Brewyard Beer Company. This
Speaker 1: one was given to us by our friend Joel, and
Speaker 1: we'll give our thoughts on this one at the end.
Speaker 2: Of the episode.
Speaker 1: Great job on the pronunciation there. We'll also reveal what
Speaker 1: ube means y o you had to look it up.
Speaker 1: So we both looked it up because because I didn't
Speaker 1: know either. Well, yeah, we'll talk about that later. But
Speaker 1: all right, let's get to listener questions. If you have
Speaker 1: a money question for us, we would love to take it.
Speaker 1: We'd love to hear it. You can just go to
Speaker 1: howtimoney dot com slash ask for simple directions on how
Speaker 1: to record your voice memo and send it our way.
Speaker 2: But really that's all it is.
Speaker 1: It's recording a voice membo on your phone, emailing it
Speaker 1: over to us, and hopefully we can take it next
Speaker 1: week on the show. Matt, It's time now to get
Speaker 1: to a money question that has a lot of relational
Speaker 1: dynamics infused into it.
Speaker 3: Hey, y'all, this is Amanda from San Antonio. I have
Speaker 3: a bit of a doozy for you. My best friend
Speaker 3: in the whole world is in about twenty thousand dollars
Speaker 3: of credit card debt with interest rates ranging from twenty
Speaker 3: five to thirty percent as I understand it, and her
Speaker 3: husband's car was just repossessed for the second time in
Speaker 3: four years. She is a stable W two job. He
Speaker 3: works a job that is unstable and unreliable and also
Speaker 3: an hour and a half from their home, and now
Speaker 3: he can no longer commute to it. They are living
Speaker 3: outside of their means. I don't have all the details,
Speaker 3: but from what I've gathered, they're going further into credit
Speaker 3: card debt month by month, and now they have this,
Speaker 3: you know, car repossession emergency. I've done all the things
Speaker 3: I've you know, suggested he get a job that's walkable,
Speaker 3: and they get an emergency fund under them, and everything
Speaker 3: you guys would recommend, I think I've recommended to them.
Speaker 3: So what I'm asking about is how to navigate this.
Speaker 3: I want to be a good friend, and I have
Speaker 3: the money to help, but I also want to hold
Speaker 3: a boundary and I do not want to enable the
Speaker 3: behavior that got them into this position. Man. That's That's
Speaker 3: what I'm dealing with right now. I hope you guys
Speaker 3: can help. I love the show.
Speaker 2: Thank you, guys, joel Man. This is tough to hear,
Speaker 2: like you can literally hear it in her voice, just
Speaker 2: how like this the situation that Amanda's friend is in
Speaker 2: is how it pains her aially.
Speaker 1: I mean, it's tough to see your friends struggle, and
Speaker 1: it's tough to see your friends kind of especially when
Speaker 1: you know better, and it's tough to see them just
Speaker 1: continually put themselves behind me.
Speaker 2: All like them. Yeah, as they continue to make some
Speaker 2: of these decisions that you know, continue to dig them
Speaker 2: into a deeper hole. It sounds like a lot of
Speaker 2: things need to change for your friend though and her husband, Amanda, Like,
Speaker 2: you know, they got the job issue, You've got the
Speaker 2: I think if there is just like one Cary possession,
Speaker 2: I mean, yeah, there's the car repo which has hit
Speaker 2: me of things, the second one that's happened now. I
Speaker 2: think if they if this was a situation where they
Speaker 2: were kind of cruising along and everything, you know, maybe
Speaker 2: what you would call typical or normal, but then all
Speaker 2: of a sudden something came up out of nowhere. Like
Speaker 2: I could totally see that being a situation where you
Speaker 2: might step in from a financial standpoint, But because of
Speaker 2: the fact that this seems to be ongoing behavior, I
Speaker 2: think the way that you are thinking about this is
Speaker 2: the complete right way of doing it, where you don't
Speaker 2: want to enable the behavior that has gotten them into
Speaker 2: this situation.
Speaker 1: I think it can feel like the empathetic thing to
Speaker 1: do to step in and help make the fix, But
Speaker 1: I think then you could end up putting yourself in harmsuoy,
Speaker 1: you can put your relationship in harms. Way, it's you
Speaker 1: have to be really careful.
Speaker 2: Amandon.
Speaker 1: You mentioned the term boundaries, and I think that's a
Speaker 1: really good term to use. I think that's often necessary
Speaker 1: when we're talking about relationships, Like you have to have
Speaker 1: healthy boundaries so you can remain friends and be a
Speaker 1: positive influence in the ways that you can, and then
Speaker 1: realize the ways in which you maybe can't have an
Speaker 1: impact and don't try on those levels.
Speaker 5: Yeah.
Speaker 1: So, like, for instance, match you mentioned, Hey, I've got
Speaker 1: the money to help, but if you give your friends money,
Speaker 1: that's money you don't have in your bank account anymore,
Speaker 1: and you might not be enough to make any sort
Speaker 1: of real meaningful tents in their situation depending on how
Speaker 1: much you have. That is true, right, So, Yeah, over
Speaker 1: twenty thousand dollars in yeah, in credit card credit card debts,
Speaker 1: that's a lot of money. Yeah, I mean to get
Speaker 1: that car Loan back in good graces all of the
Speaker 1: things that need to happen. Amanda might not have enough
Speaker 1: to actually fix all this stuff, and even if she did,
Speaker 1: it might not be the best thing for her or
Speaker 1: for them, And so I guess I would suggest that
Speaker 1: the biggest thing, Amanda, you can offer is a sympathetic here,
Speaker 1: some light guidance, preferably in a way that doesn't involve shaming,
Speaker 1: which doesn't sound like is something you would do anyway.
Speaker 1: Shame obviously it creates the opposite instinct, right, Like it
Speaker 1: makes us want to stop sharing and hide our flaws.
Speaker 1: And that can happen with your friend where she's like, now,
Speaker 1: this isn't a safe place to talk to Amanda anymore,
Speaker 1: because every time I talk to her, she makes me
Speaker 1: feel bad about my choices, like, you don't want to
Speaker 1: do that. It can perpetuate negative feelings, and it can
Speaker 1: lead to more unwise behavior, which is what got them
Speaker 1: here in the first place in so many ways. So
Speaker 1: one way to avoid that dynamic, I think, is to
Speaker 1: share some of your own mistakes with them. I think
Speaker 1: that can make them feel more comfortable learning from you.
Speaker 1: And when you do have advice, they're like, oh, Amanda's
Speaker 1: been here, she's been through hard stuff too, so she's
Speaker 1: a person worth listening to.
Speaker 2: That's true. Yeah, it sounds like you have shared with
Speaker 2: them a lot of good advice, and so maybe that's
Speaker 2: not the tact that you should take. So maybe switching
Speaker 2: things up where you are not their main source of
Speaker 2: financial information might be the way to go. But that
Speaker 2: doesn't mean that you need to leave them high and dry.
Speaker 2: Like what I would do in this case would be
Speaker 2: to connect them with a helpful resource.
Speaker 1: Oh, I thought you were going to say, put had
Speaker 1: a money podcast onto the background.
Speaker 2: Ford, that's also good. How do you think something that's
Speaker 2: a whole other question. Do you think somebody hearing their
Speaker 2: situation being described on a podcast would make them more
Speaker 2: or less inclined to then want to turn things around?
Speaker 2: I don't know that depends, Amanda is gonna be up
Speaker 2: to you as to whether or not you share this
Speaker 2: episode with them. But what I was gonna say, though,
Speaker 2: is to get them hooked up with someone like NFCC,
Speaker 2: the National Foundation for Credit Counseling or MMI Money Management International.
Speaker 2: They're a professional who has seen plenty of folks in
Speaker 2: a position just like your bestie there is going to
Speaker 2: be able to take the reins and help them out significantly.
Speaker 2: And even if you, Amanda, have been listening like for
Speaker 2: the show, to the show for a really long time.
Speaker 2: Let's say like since episode one, you might have a
Speaker 2: whole lot of knowledge, but I think trying to be
Speaker 2: their their budget counselor that could actually do lasting damage
Speaker 2: to your relationship. And considering you said that this is
Speaker 2: like your best friend, this is something that I think
Speaker 2: I would want to risk. So instead, just help them
Speaker 2: to find someone else who can fill that role, and
Speaker 2: then you can just be more of like a supporter type, right,
Speaker 2: Like you can encourage your friend, you can be there
Speaker 2: for them. Who can you know, chime in with some
Speaker 2: money wisdom from time to time, But your ability to
Speaker 2: be like the sole provider of the information, Like like
Speaker 2: if you are at the center of this whole plan,
Speaker 2: I personally I feel like it things can get really
Speaker 2: messy really quickly.
Speaker 1: Yeah, there's some saying, man, I've heard that be the
Speaker 1: wall that holds them up, not the roof over their head, right,
Speaker 1: And maybe that's Hey, I'm going to be one of
Speaker 1: the support pillars in their lives, but I can't be
Speaker 1: the whole thing to them. I think you're right, Like,
Speaker 1: there are great organizations out there doing good work, and
Speaker 1: there are awesome people who work there, and it's not
Speaker 1: going to call them an arm and a leg if
Speaker 1: you go to one of these not for profit places
Speaker 1: that you mentioned, and with all of the issues you've described, man,
Speaker 1: it's kind of a litany of things going on. This
Speaker 1: situation could get worse before it gets better, and there's
Speaker 1: a chance that bankruptcy might be necessary. But the folks
Speaker 1: at these nonprofit organizations can help determine that by digging
Speaker 1: into their numbers and looking at the specifics, and they
Speaker 1: should not only be able to help with budgeting, but
Speaker 1: also in creating basically a triage list of which money
Speaker 1: moves they need to make and in what order. They're
Speaker 1: also going to have access to working with some of
Speaker 1: the companies, some of the credit card companies in particular
Speaker 1: that they on their own or you helping them won't
Speaker 1: have access too, So I think that's an important thing
Speaker 1: to mention also. And then once they have their marching
Speaker 1: orders from one of these non nonprofit debt counseling centers,
Speaker 1: your encouragement, your insights are going to come in handy
Speaker 1: because they're going to be making progress, they're going to
Speaker 1: be bouncing things off of you. They're probably going to
Speaker 1: have lots of questions, and it's going to be really
Speaker 1: nice to have someone they trust deeply, who knows their
Speaker 1: stuff on the money front, who they can bounce those
Speaker 1: questions off of.
Speaker 2: Yeah, and I mean remember too that turning this around,
Speaker 2: I think is going to take a long time. It's
Speaker 2: taken them a long time to get into the mess
Speaker 2: that they are currently finding themselves in, and so I
Speaker 2: think it's going to take a while for them to
Speaker 2: get out as well. You are a good friend, you
Speaker 2: can continue to be one there who is helping them,
Speaker 2: But just know that you aren't going to be again
Speaker 2: like at the center of their universe as they're turning
Speaker 2: their financial lives around. That doesn't mean you don't check
Speaker 2: in with them, certainly do that talk about it. You know, Joe,
Speaker 2: you mentioned a shame there earlier that can easily take over,
Speaker 2: meaning that your friend might even just go silent for
Speaker 2: a while. And a good friend knows that that can
Speaker 2: be a tendency, and so reach out see if she's
Speaker 2: willing to or wanting to talk about that. And by
Speaker 2: the way, if you actually if you do feel compelled
Speaker 2: to financially help in order to help your friend to
Speaker 2: accelerate their progress as they are making changes, as you've seen,
Speaker 2: you know, positive movements in the right direction. Essentially, I
Speaker 2: would avoid loaning the money instead see it purely as
Speaker 2: a gift, something that they don't have to return, just
Speaker 2: again because of the relation dynamics and how messy things
Speaker 2: could get. But I think if I were in your situation, though,
Speaker 2: I would find different ways to be present as a friend,
Speaker 2: to demonstrate that you are willing to give in a
Speaker 2: way but specifically that invests in your friendship together. And
Speaker 2: so practically speaking, what that means is like if y'all
Speaker 2: go out to get some Mexican food or something like that,
Speaker 2: like picking up the tab, or like if you're gonna
Speaker 2: go grab coffee, paying for it, because it shows that, Hey,
Speaker 2: it's not that I'm not willing to put forth some
Speaker 2: of my financial resources towards us. It's just that this
Speaker 2: particular problem seems like it's something that that y'all keep
Speaker 2: finding yourselves in. And so I think what that demonstrates, though,
Speaker 2: is that you are there for your friend no matter what,
Speaker 2: in this case, for richer or for poor. Yeah, it's
Speaker 2: not like you you didn't take any vals. It's not
Speaker 2: like y'all got married or anything. But like, that's what
Speaker 2: a good friend is is someone who sticks with you
Speaker 2: through this hard phase in life, which also begs the question, Joel,
Speaker 2: do you think do you think it ever would get
Speaker 2: to a point to where Amanda shouldn't maintain the friendship
Speaker 2: with her friends, Like, because what I hear in her voice,
Speaker 2: like kind of going back to the beginning we're talking
Speaker 2: about how exasperated she sounds, is that like almost it
Speaker 2: almost seems like she's at the end of her row.
Speaker 2: That's a good question. I guess I'm pointing to Amanda's
Speaker 2: mental health.
Speaker 1: I think you don't abandon your friends when they're when
Speaker 1: when they're in a hard situation. Yeah, I think that's
Speaker 1: what that's that's my gut reaction and totally I guess
Speaker 1: if your friends are like, we love the lifestyle we're living,
Speaker 1: that's jeopardizing everything we've worked for. I don't know that
Speaker 1: that might be a different conversation than that's sure, but
Speaker 1: I think if they're trying, and they and they actually
Speaker 1: want to get better, yeah, you continue being there for them.
Speaker 2: Yeah, stick it out. That's yeah, as long as they
Speaker 2: are respecting boundaries, right, Like if you are saying, hey,
Speaker 2: I'm not willing, I'm not able to help you for
Speaker 2: the for X SO and so reasons, and if they
Speaker 2: keep coming back to you, like not demanding money, but
Speaker 2: but asking, I feel like that would warrant a bigger
Speaker 2: conversation where it's just like, look, you need to know
Speaker 2: what kind of impact this is having on me from
Speaker 2: a mental health standpoint. But it doesn't necessarily sound like that.
Speaker 2: That's where you are, at least not yet, Amanda. And
Speaker 2: it's a bummer to find yourself in a situation like this,
Speaker 2: But hopefully we've given you some fodder, giving you some
Speaker 2: good thoughts as you are trying to be a good friend.
Speaker 2: But Joe, We've got more to get to, including that
Speaker 2: question about long term care, our thoughts on that and
Speaker 2: more right after this.
Speaker 1: All right, Matt, we got more money saving information to
Speaker 1: get to on this episode. Let's get to a question
Speaker 1: about cars, Wendy upgrade and how do you do it?
Speaker 4: Well, Hey, Matt and Joel, my name is Jay and
Speaker 4: I am calling from Marietta, Georgia. I have a couple
Speaker 4: of car related questions for you guys. I currently own
Speaker 4: a used Hyundai Accent that I purchased back in twenty eighteen.
Speaker 4: Since I've owned this car, I have experienced a variety
Speaker 4: of small to major mechanical and other issues with this
Speaker 4: car that have ended up costing me a lot of
Speaker 4: money to maintain. The conventional wisdom that I inherited from
Speaker 4: my parents is that when you own a car, you
Speaker 4: should drive it basically into the ground. But since this
Speaker 4: car has cost me so much money, at this point,
Speaker 4: I am ready to look at selling it and purchasing
Speaker 4: a different car. A quick search on CarMax and Carvana
Speaker 4: gave me a trade in offer that looked like it
Speaker 4: was a lot lower than my car might actually be worth.
Speaker 4: So my question is, do you have any advice on
Speaker 4: finding a private party that I might be able to
Speaker 4: sell my car to. I've looked at other places like
Speaker 4: an auto trader, but if you guys have any other
Speaker 4: advice in that area, I would greatly appreciate it. Additionally,
Speaker 4: my plan right now is to try and hold onto
Speaker 4: this car and hope that I don't have any more
Speaker 4: major issues until around the end of the year, as
Speaker 4: that looks like it might be a better time to
Speaker 4: look at purchasing a newer car, since dealerships typically offer
Speaker 4: a lot of discounts or rebates during the holidays. In
Speaker 4: terms of purchasing a new car. I was also wondering
Speaker 4: if you have any advice on financing and purchasing a
Speaker 4: newer car. Would it be better to go through finance
Speaker 4: from a car dealership or a used car dealership like
Speaker 4: CarMax or Carvana, or would it be better to seek
Speaker 4: out an auto loan from a credit union or other
Speaker 4: financial institution. I appreciate any advice you can offer. I
Speaker 4: really enjoy listening to the podcast.
Speaker 2: Thank you so much, Right, Joel, do you feel like
Speaker 2: Jay cheated a little bit? He has like three different questions,
Speaker 2: so many questions at once. It's a complex situation when
Speaker 2: you're like, do I keep it? If I'm selling it? Sure?
Speaker 2: How do I go about it? What I'm buy the
Speaker 2: new car?
Speaker 1: I mean, there's of course it's because it's really one
Speaker 1: big decision that's a big expense and wrapped up to
Speaker 1: a bunch of different ones. It's sorry that you've had
Speaker 1: so many problems with this car, by the way, Jay,
Speaker 1: that's that is the worst, Matt. It's a bummer to have.
Speaker 1: Perpetual car problems can be really frustrating. And I think
Speaker 1: the general rule of thumb that Jay's parents taught him
Speaker 1: is a pretty good one, right, that the longer you
Speaker 1: hold on to the car, on average, the more freedom
Speaker 1: you're going to have to save and invest intentionally, the
Speaker 1: more margin you're going to have in your life, because hey,
Speaker 1: guess what it means not having a car payment for
Speaker 1: potentially a long period of time. And we think that
Speaker 1: the longer you can go in life without having a
Speaker 1: car payment, or if you can essentially make that commitment
Speaker 1: to not having a car payment ever, that's like a
Speaker 1: financial cheat code. That is game Genie for your money.
Speaker 1: Because for Matt, for the average American, they're spending so
Speaker 1: much money on their car every month. To not have
Speaker 1: any of that, it just gives you a lot more
Speaker 1: wiggle room into making other decisions. But as mechanical issues proliferate, right,
Speaker 1: we get that you want to drive something more reliable,
Speaker 1: and I think when to ditch a used car is
Speaker 1: kind of this perpetually difficult question. I think the truth
Speaker 1: is money is only one part of the equation. Makes
Speaker 1: you think Matt, I was talking to a friend recently.
Speaker 1: He's got this Toyota Siena that's like twenty twelve or something.
Speaker 1: It's in good condition, and he's like, should I get
Speaker 1: rid of it before the issues start. I'm like, dude,
Speaker 1: if you do, I'm buying it from you because that's
Speaker 1: a great car. But that's how people tend to think
Speaker 1: of cars. They want to beat it to sell it
Speaker 1: before the issues begin. But oftentimes I think we need
Speaker 1: to get more comfortable with realizing that repairs are a
Speaker 1: part of life. Is or age, Yes, exactly.
Speaker 2: And that's that's kind of where I want to go
Speaker 2: is because I'm reading between the lines a little bit
Speaker 2: and I want Jay to be honest with himself because
Speaker 2: he said that there have been a lot of expenses
Speaker 2: and it's been maybe inordinately expensive, but.
Speaker 1: I want to know how much and over what period
Speaker 1: of time?
Speaker 2: Yeah, and like what's the mileage on the vehicle, because
Speaker 2: if we're talking, you know, is it because you've recently
Speaker 2: rolled over one hundred thousand miles? Well, that's when there
Speaker 2: are a lot of more expensive sort of maintenance and
Speaker 2: repairs that need to be done. Break system, Yeah, to
Speaker 2: a vehicle like that. And it's not like that this
Speaker 2: is an expensive vehicle to maintain. Like we're not talking
Speaker 2: about like a land Rover or something like that, some
Speaker 2: foreign or European car. I should say this is a Hyundai,
Speaker 2: a Hundai Accent. Those aren't expensive cars to maintain necessarily,
Speaker 2: and they get pretty good gas mileage, and they're also
Speaker 2: not flashy or sexy. So Jay, I guess I want
Speaker 2: you to be honest with yourself, and I hope that
Speaker 2: you're not using some of these repairs as any excuse
Speaker 2: to be like, you know what, maybe it's time for
Speaker 2: me to go ahead and make the upgrade. I'm kind
Speaker 2: of not so keen on the old used Hyundai Accent
Speaker 2: anymore because he said he bought it. He bought it
Speaker 2: used several years ago, so it's an older vehicle. I
Speaker 2: get that. I understand when you're at the car shop
Speaker 2: and you get hit with like a five hundred dollars repair,
Speaker 2: you start doing the math, You start calculating in your
Speaker 2: head and you start thinking, dude, I could have a
Speaker 2: brand new, sweet new ride for that much money. But
Speaker 2: and you start to justify it.
Speaker 1: If I sign up for seventy two months of payment.
Speaker 2: Yeah, basically to do this for the rest of my life.
Speaker 2: So again, I'm assuming a lot here. Reading between the lines,
Speaker 2: I hear a used Hyundai Accent that you've purchased in
Speaker 2: twenty eighteen, and I think that sounds like sounds like
Speaker 2: you're just hitting your stride when it comes to that
Speaker 2: vehicle and some and you've made some of these repairs.
Speaker 2: Maybe that means this is something now that's good for
Speaker 2: another fifty to seventy five to one hundred thousand miles,
Speaker 2: Like maybe you're about to like this is going to
Speaker 2: put you on the path to being able to drive
Speaker 2: that thing for another one hundred thousand miles to where
Speaker 2: you're at two hundred thousand miles and the entire time
Speaker 2: you don't have a car payment.
Speaker 1: So yeah, I think base what you're saying is even
Speaker 1: if you're paying two thousand dollars a year in like
Speaker 1: maintenance and repair costs for that car, that would be
Speaker 1: far less than the payments you would even buying like
Speaker 1: a gently used newer car. To you like that would
Speaker 1: be a cheaper route to take. So make sure. If
Speaker 1: this car is a lemon, that's one thing. But if
Speaker 1: this car, if this is just traditional maintenance that most
Speaker 1: cars of this age need, I would just realize that
Speaker 1: that's part of the game.
Speaker 2: Jay's probably like, man, of course, this is when the
Speaker 2: guys have recently talked about crack windshields and pain coming
Speaker 2: off their side mirrors. Yeah, Jay, you should know what
Speaker 2: kind of answers we're gonna give when it comes to
Speaker 2: potentially upgrading and getting a new.
Speaker 1: Car, right, Yeah, well, and okay, so if you are
Speaker 1: going to upgrade, let's say this car is having more
Speaker 1: significant issues, right, that these are perpetual there, they're bad, And.
Speaker 2: Let's say that we actually believe you. Jay.
Speaker 1: We're not calling here your truthfulness in to question here,
Speaker 1: but we are just saying, like, think again. But sure,
Speaker 1: Let's say you're gonna buy another car. You mentioned buying
Speaker 1: from a dealership. That could be a solid route to take.
Speaker 1: But it sounds like you've got some time here, right,
Speaker 1: You're not in a massive rush to ditch this car.
Speaker 1: It's not like it's currently in the shop and it's
Speaker 1: got like a transmission issue and so you don't have
Speaker 1: any way to get around. If you've got the patience
Speaker 1: to do some digging, you might be able to score
Speaker 1: a better car at a nicer price. If you're buying,
Speaker 1: I would say directly from an individual, that is, it's
Speaker 1: becoming harder and harder sadly to do that. More people
Speaker 1: are matt selling their cars to middle men like Carbon
Speaker 1: and Carmacks are buying from those companies too. They're not
Speaker 1: bad companies necessarily, and in fact, some of their warranties
Speaker 1: are nice. I appreciate that. But they've become the go
Speaker 1: to for sellers and buyers alike, meaning that there's less
Speaker 1: buyer to seller face to face transactions happening. But this
Speaker 1: also means that those people aren't going to get as
Speaker 1: much money for their ride. So where should you look?
Speaker 1: I would say, look at auto Trader, right, but filter
Speaker 1: down to private sales only. There's literally button at the
Speaker 1: bottom left you can click and you can say, don't
Speaker 1: show me anything from dealers, just show me from private
Speaker 1: individuals who are listing their automobile for sale. Facebook Marketplace
Speaker 1: is another one, but Matt even that's gotten a little
Speaker 1: scammy at times, or not even scammy, but just overrun
Speaker 1: with auto brokers who are buying from the auctions and
Speaker 1: then selling them on there. I personally prefer to find
Speaker 1: a private individual who's selling a car that I'm interested in.
Speaker 1: I think that's the way to get the best car
Speaker 1: for the for the best price, and then they've got
Speaker 1: the records to show that they've had it. Yeah, for
Speaker 1: how however long that they've maintained it. I think, no
Speaker 1: matter what though, you always get that car checked out
Speaker 1: by a mechanic you trust, whether it's from a dealership
Speaker 1: or whether it's from an individual.
Speaker 2: Yeah. And because of the fact that Carvon and Carmacks
Speaker 2: have made it so easy, I think fewer and fewer
Speaker 2: folks than ever are actually selling their vehicles via a
Speaker 2: private sale. They're basically trading in every single time. And dude,
Speaker 2: I have always felt like it's worth the extra thousands
Speaker 2: of dollars that you can net buy dii wining that sale.
Speaker 2: It's not a joyous experience. It's not the most fun
Speaker 2: that you've ever had in your entire life, but the
Speaker 2: financial stakes are high when it comes to these larger
Speaker 2: ticket items. I think it's worth it.
Speaker 1: You don't love when me and people are random parking
Speaker 1: lots letting them to test rive your car.
Speaker 2: No, you come to me first, all, but go ahead,
Speaker 2: get a quote from both Carvana and CarMax. If you
Speaker 2: went see how it stacks up to what KBB says
Speaker 2: that your car is worth, and if the gap is significant,
Speaker 2: we'll go ahead and list it on Auto Trader. Get
Speaker 2: it up there on Facebook. See what sort of response
Speaker 2: that you might get. Because if it's minimal, well then
Speaker 2: just hit the easy button. But again, if there's a
Speaker 2: lot of folks clamoring for that vehicle, because it turns
Speaker 2: out maybe you made all the expensive repairs and this
Speaker 2: is a very attractive vehicle. Now I'm going back to
Speaker 2: the whole thing about him keeping his access. I suppose
Speaker 2: to selling it. But if you see a lot of
Speaker 2: interest in your vehicle, then that could either a make
Speaker 2: you reconsider selling it or B means that it's going
Speaker 2: to be an even better financial decision to sell it privately.
Speaker 1: Yeah, and I think, Matt, there's actually more nuanced to
Speaker 1: this question than ever before.
Speaker 2: Too.
Speaker 1: If you're thinking about buying a used electric vehicle, for instance,
Speaker 1: because of the way the tax credit works, you would
Speaker 1: want to buy that car from a dealer, because you
Speaker 1: don't get the credit if you buy from an individual.
Speaker 1: If I buy a Nissan Leaf from my neighbor, Matt,
Speaker 1: I'm not getting a four thousand dollars tax credit. But
Speaker 1: if I buy it from the dealership, And this depends
Speaker 1: on where you follow in the income tax bracket, but
Speaker 1: you are going to get a tax credit of four
Speaker 1: thousand dollars for buying that vehicle. So make sure you
Speaker 1: know that too, and you might actually save money, by
Speaker 1: the way on tax by training in your car in
Speaker 1: certain states. And Jay mentioned he lives in our fair
Speaker 1: state of Georgia. This we're in one of those states
Speaker 1: where if you're planning on buying from that same dealership,
Speaker 1: it's worth finding out what they would pay for your
Speaker 1: beat up Hundai because by training that in, maybe you
Speaker 1: don't get as much money, but you will save money
Speaker 1: on the sales tax portion, I think, which bridges that
Speaker 1: gap at least a little bit. And I think one
Speaker 1: last thing I want to say here, Matt is don't
Speaker 1: forget to look at the reliability ratings on the new
Speaker 1: car you're looking at purchasing from a site like Consumer Reports,
Speaker 1: because we want you in a car that rates highly
Speaker 1: so you can keep this next one you buy for many,
Speaker 1: many many years to come.
Speaker 2: That'd be the goal.
Speaker 1: I think if you just kind of, oh, I like
Speaker 1: the way that one looks, I get why people do that.
Speaker 1: But if you look at the reliability ratings, find that
Speaker 1: nice overlap of a car that rates highly from Consumer
Speaker 1: Reports and then also looks good to you sure.
Speaker 2: And then you asked about financing. Definitely get a quote,
Speaker 2: maybe two or three from local credit unions. Every stat
Speaker 2: points to the fact that you're going to get a
Speaker 2: lower rate from a credit union versus financing via the
Speaker 2: dealership or financing with like one of the bigger banks.
Speaker 2: But that being said, and we basically have to say
Speaker 2: this every single time, but we are fans, big fans
Speaker 2: of buying cars in cash. I also know that this
Speaker 2: is easier said than done. But because of the fact
Speaker 2: that it does not sound like you are in a
Speaker 2: rush to unload that vehicle, I think it sounds like,
Speaker 2: at least that this is more maybe a lifestyle sort
Speaker 2: of decision as opposed to I need a reliable vehicle
Speaker 2: to be able to get to work. And I think
Speaker 2: another part of this too is the inconvenience of having
Speaker 2: to take it into the shop. Like you have a
Speaker 2: string of repairs and you start getting on a first
Speaker 2: name basis with a mechanic. That's not a good feeling.
Speaker 2: It's a noise, like, Hey, you want to go out
Speaker 2: for beers? After this? You're like, I mean, you seem cool.
Speaker 2: I'm here way too much. Man, I'm sorry. I was
Speaker 2: hoping not to have that relationship with you though, But like,
Speaker 2: nobody likes the inconvenience of having to take their vehicle in,
Speaker 2: But I think that's that also just gets blown out
Speaker 2: of proportion much more than it actually inconveniences or prevents
Speaker 2: us from doing the things that we want to be
Speaker 2: able to do, and typically basically because of uber and
Speaker 2: left the ability. Like I don't want to have to
Speaker 2: drop twenty or thirty bucks because I got to take
Speaker 2: the van up to get the get a break job done.
Speaker 2: But you know what, twenty or thirty dollars is nothing
Speaker 2: when in comparison to a monthly payment where I to
Speaker 2: finance a vehicle. So again I'm kind of going back
Speaker 2: to the jay me wanting you to not use this
Speaker 2: as an excuse to get a new vehicle if that's
Speaker 2: the case. But if it's not the case and you
Speaker 2: do need a vehicle and now you're considering financing, just
Speaker 2: realize that financing and paying interest on a depreciating asset
Speaker 2: that is not a winning formula to getting ahead.
Speaker 1: With your fight, which means you want to prioritize taking
Speaker 1: on as short of a loan as possible. Maybe that's
Speaker 1: two year loan or a three year loan at Max.
Speaker 1: But if you're buying a used car taking out a
Speaker 1: forty eight or sixty month loan, it's just it's really
Speaker 1: bad news bears. So we would say buy a cheaper
Speaker 1: car if you can find reliable cars that aren't thirty grand,
Speaker 1: despite you know, I think popular assumptions. So make sure, yeah,
Speaker 1: you're getting that loan, likely from a credit union.
Speaker 2: You're going to get the.
Speaker 1: Best rates and keep that loan term as short as
Speaker 1: possible because that's going to be in the best interest
Speaker 1: of your overall holistic financial situation. All right, let's get
Speaker 1: to another question. This one's from a listener who wants
Speaker 1: to quit his job.
Speaker 5: I joll them, Matt. My name is Kip and I
Speaker 5: live out in the western suburb of Atlanta. I really
Speaker 5: appreciate the show that you guys do, and the one
Speaker 5: approach to advice that you guys provide is just really
Speaker 5: encouraging and I enjoyed. I'm forty six and my wife
Speaker 5: is forty seven, and personally I'm ready to bag work
Speaker 5: and retire. Over the years, we've been able to get
Speaker 5: all expenses down to about five K a month, and
Speaker 5: we have enough for the four percent rule. And so
Speaker 5: what I thought was that we'd go sit down which
Speaker 5: was built as a produciary financial planner, just to give
Speaker 5: the final blessing to pull the trigger on this. And
Speaker 5: you know, and then the interview that we had with him,
Speaker 5: all he really wanted to do was U pitch us
Speaker 5: a bunch of our annuities and that kind of thing.
Speaker 5: But you know, it's one thing he didn't mention that
Speaker 5: got me to think in it is long term care.
Speaker 5: Just looking at some of the costs, you know that
Speaker 5: the long term chara can you know, if you need
Speaker 5: to go nursing can end up being you know, ten
Speaker 5: km month, you know, ten k for me CA for
Speaker 5: my wife. So you see how that that could really
Speaker 5: skywrocket your expenses. But you know, I started trying to
Speaker 5: find some some various insurance plans and for long term care,
Speaker 5: and you know, they all had some really define benefits
Speaker 5: and in some cases, you know, you could pay the
Speaker 5: insurance for years and they just keep raising the prices
Speaker 5: and ultimately end up with nothing but a bunch of
Speaker 5: money spent. So I started thinking, you know, I'd really
Speaker 5: feel horrible if you know, I quit work at forty
Speaker 5: six and you know ended up broke, you know, fifteen
Speaker 5: years down the road. So what I'm wondering guys, if
Speaker 5: you guys have had any ideas on how to deal
Speaker 5: with the whole long term care issue or you know,
Speaker 5: do you you just got to get six million bugs
Speaker 5: saved up so that you know you can have enough
Speaker 5: money on four percent rule. Thanks you, I I appreciate
Speaker 5: any of us will be helpful.
Speaker 2: Kip, thank you so much for your question. And Joe,
Speaker 2: the first thing and I think we should address here
Speaker 2: is the fact that he is ready to.
Speaker 1: Retire, but he's only forty six years old, which is basically,
Speaker 1: I'm done with that job. I'm tired of that jump
Speaker 1: quote unquote. I think he said he's ready to bag it.
Speaker 1: I think he's just love it. He's tired of being
Speaker 1: a working stiff. And I get that sometimes the nine
Speaker 1: to five can grind on it.
Speaker 2: I get it, I get it. But that being said,
Speaker 2: so maybe the first thing worth talking through is it
Speaker 2: might be helpful to think through what your life might
Speaker 2: end up looking like were you to do something else.
Speaker 2: Let's say you've been working over fifty hours a week
Speaker 2: like the typical American. If that's the case, I get
Speaker 2: the fatigue, I get the exhaustion, and the fact that
Speaker 2: you've got so much money saved up that's incredible. So
Speaker 2: if you have the capacity to retire, you are financially ready.
Speaker 2: But from a retirement lifestyle perspective, as well as the
Speaker 2: financial concerns, I think it's important to at least consider
Speaker 2: maybe finding more enjoyable work, maybe find some different ways
Speaker 2: to keep the paycheck flowing a little bit, but maybe
Speaker 2: just reducing your overall workload, even if that also means
Speaker 2: a reduced income, because you can always dial back even
Speaker 2: more over time if you're like, no, guys, I really
Speaker 2: want to be done with work altogether. Going from you know,
Speaker 2: we've talked about retirement not necessarily being an on off
Speaker 2: switch DOL, but like a dimmer switch, and I think
Speaker 2: finding a way to gradually phase out of work could
Speaker 2: lead to more positive outcomes in multiple areas of life,
Speaker 2: not only financial, but that lifestyle. So you get used
Speaker 2: to the idea of not having to, like you said,
Speaker 2: go in and slog at the wherever it is that
Speaker 2: you're working from nine to five at a minimum every single.
Speaker 1: Day, not to mention a commute all the whole nine yards,
Speaker 1: and I get especially if you've been in the same
Speaker 1: industry for twenty plus years and you're like, I'm just
Speaker 1: done with this, man, I'm burnt out. I think that
Speaker 1: happens to a lot of people, and not many people
Speaker 1: have kIPS ability because they don't have the savings that
Speaker 1: he's amass to be able to make this choice. But
Speaker 1: I do want to say, like, yeah, you are only
Speaker 1: forty six, and so maybe it's some sort of part
Speaker 1: time work, or maybe it's working for yourself, maybe it's
Speaker 1: doing something ultra part time, or maybe just pivoting to
Speaker 1: another career that doesn't pay as much but where you
Speaker 1: have more freedom over your lifestyle. Those could be worthwhile
Speaker 1: considerations because I think typically Matt, we talk about it
Speaker 1: as a dimmer switch. Most people think of it as
Speaker 1: an on off switch. That's the traditional views. And so
Speaker 1: it's like retirement. I guess my choice is either to
Speaker 1: keep working here and doing something I hate, or to
Speaker 1: stop and retire fully. That's not those aren't your only choices.
Speaker 2: Where you're kicking it on the front porch, right, that's
Speaker 2: a lot of a lot of decades of hanging out
Speaker 2: on the front porch. If that's if that's the case.
Speaker 1: Yeah, and he listened to the South like us, so
Speaker 1: he's gonna be drinking sweet tea on the porch like
Speaker 1: I would be, which is great. But you talked to Kip.
Speaker 1: You you've taken this, this brilliant route of reducing your
Speaker 1: expenses and of increasing your investments. That's the classic recipe
Speaker 1: that leads to more choice for you. Our next pushback, though,
Speaker 1: I guess, would be on the subject of annuities. You
Speaker 1: mentioned talking to the financial planner. Jeez, yeah, be very
Speaker 1: careful talking to that person any longer I would want
Speaker 1: to get a second opinion from somebody else, I would
Speaker 1: consider talking to somebody at Domain Money or Nectarine. Those
Speaker 1: are cheaper ways to talk to a financial planner. And
Speaker 1: while annuities, yes, they can offer a more predictable stream
Speaker 1: of cash flow and more peace of mind, and potentially
Speaker 1: they can be quite expensive. And so the way those
Speaker 1: most annuities get sold, they're typically done through fear based tactics,
Speaker 1: and often the fear is you're going to run out
Speaker 1: of money in retirement, so you need this predictable source
Speaker 1: of income, and you've done such a good job saving
Speaker 1: and investing that you really might be able to stop
Speaker 1: working before you turn fifty, which is awesome, but we
Speaker 1: don't think you need to buy an annuity to turn
Speaker 1: that into a reality.
Speaker 2: That's right. Yeah, he's doing a lot of his math
Speaker 2: based on the four percent rule, which basically states that
Speaker 2: if you've saved up twenty five times your annual expenses
Speaker 2: and so this is the inverse of the four percent rule,
Speaker 2: that for you to do that, you should feel comfortable
Speaker 2: making this decision. But you've also got to make sure
Speaker 2: that we're not just talking about your current expenses, but
Speaker 2: that we are talking about your expenses way off there
Speaker 2: into the future, and.
Speaker 1: Why there's long term things considerations coming to exactly in
Speaker 1: the play.
Speaker 2: Yeah, and well and also too, like considering what you
Speaker 2: want your retirement years to look like. I guess I'm
Speaker 2: pointing to a lifestyle inflation. And again, we don't want
Speaker 2: to push you to work like a dog until you
Speaker 2: seventy years old, but we do want to make sure
Speaker 2: that you're not bowing out too soon and that you
Speaker 2: can handle a potential you know, a potential downturn in
Speaker 2: the market from a mental and a portfolio perspective, and
Speaker 2: that you are taking into account some of the future
Speaker 2: lifestyle choices that you and your wife might have in
Speaker 2: store for yourself.
Speaker 1: Would you still be meeting the four percent rule if
Speaker 1: the stock market were to drop fifteen or twenty percent.
Speaker 1: That's a that's a good question to ask, and Matt,
Speaker 1: I think let's talk about long term care specifically, which
Speaker 1: is basically the need for support as you age, right,
Speaker 1: especially if you have like a chronic illness or disability,
Speaker 1: and even if Kip, if you're in fantastic shape, you
Speaker 1: don't know what things are going to be like thirty
Speaker 1: years down the road. You might need some sort of
Speaker 1: long term care at some point, and it can be
Speaker 1: crazy expensive. It's gotten so much more costly over the
Speaker 1: past ten or fifteen years as well. Insurance companies basically
Speaker 1: they didn't price some of these policies appropriately, Matt. And
Speaker 1: it's amazing to see some of the premium increases that
Speaker 1: people have gotten stuck with. And what ultimately ends up
Speaker 1: happening for so many of those folks is that they
Speaker 1: bought this long term care policy assuming that premiums would
Speaker 1: increase you moderately at most, and then what happens is
Speaker 1: they get stuck with a thirty forty fifty percent premium
Speaker 1: hike and they have to ditch their long term care insurance.
Speaker 1: So it basically feels like and it actually kind of
Speaker 1: is money that was tossed aside, completely wasted. Yeah, it
Speaker 1: feels like you threw it into a fire. The other thing, too,
Speaker 1: is stats from insurance companies show that something like seventy
Speaker 1: percent of folks are going to need at least some
Speaker 1: form of long term care insurance in their life, and
Speaker 1: they always give this stat mat that the costs can
Speaker 1: exceed one hundred thousand dollars per year, which certainly makes
Speaker 1: it opens my eyes, but those facts can be a
Speaker 1: bit misleading too. And plus, your insurance company could go
Speaker 1: out of business in that time where your claim could
Speaker 1: be denied, or again, like I said, those premiums could skyrocket,
Speaker 1: making it unaffordable long term care insurance. The market for
Speaker 1: it sucks. Yeah, there is potentially a need for greater
Speaker 1: spending in some of those later years. I'm not sold
Speaker 1: on the fact that long term care insurance is the
Speaker 1: proper product though for most people. And the truth is,
Speaker 1: middle class folks often find themselves in the most uncomfortable
Speaker 1: positions because they've saved decently well and Folks who haven't
Speaker 1: saved much at all can often depend on medicaid, and
Speaker 1: folks who have saved tons of money can self ensure.
Speaker 1: But if you're in that messy middle, that can be
Speaker 1: a really tough spot to find yourself.
Speaker 2: Totally. Yeah, that messy middle, it seems like that that's
Speaker 2: where Kip is finding himself. I would say, if you
Speaker 2: can comfortably afford the premiums on a solid long term
Speaker 2: care policy, that might be the best course of action.
Speaker 2: But it's also worth highlighting here too that you're only
Speaker 2: forty six years old, and so that's actually way too
Speaker 2: young to pull the trigger on getting a long term
Speaker 2: care policy in place. Typically a lot of experts say
Speaker 2: to look around the age of sixty and so if
Speaker 2: you were to go ahead and get one of those
Speaker 2: in place, now, that's what fifteen years of potentially paying
Speaker 2: premiums on something that you don't need to be paying
Speaker 2: premiums on. And at that age, you would still likely
Speaker 2: qualify with the medical underwriting to still qualify for affordable
Speaker 2: products without having to pay these annual premiums from now
Speaker 2: until then, which is most likely going to be when
Speaker 2: you wouldn't need that policy in place and Something else
Speaker 2: worth pointing out here too, is that it sounded like
Speaker 2: this was not something that was on Kip's radar until
Speaker 2: he met with the financial advisor who was trying to
Speaker 2: sell him on the annuities, which is great because it
Speaker 2: didn't the sales pitch didn't work on the annuities, but
Speaker 2: it has gotten him thinking about this. But they're always
Speaker 2: going to run through the worst possible scenarios where they're
Speaker 2: looking at the largest amount possible to end up paying
Speaker 2: for long term care. They're looking and they're also forecasting
Speaker 2: years and even decades of this long term care because
Speaker 2: if you're thinking, oh, yeah, we're talking about one hundred
Speaker 2: thousand dollars each, but when you look at the numbers,
Speaker 2: I think the average stay in a long term care
Speaker 2: facility is only something like three point seven years. And
Speaker 2: so I'm not saying that that's not a whole lot
Speaker 2: of money, But that being said that it's also not
Speaker 2: a guarantee that you're going to find yourself in that
Speaker 2: sort of position. So at the very least, I'm glad
Speaker 2: that this is something that you are thinking about in
Speaker 2: the here now and for you to make informed decisions,
Speaker 2: but it's definitely not something that you need to look
Speaker 2: at getting in place right now.
Speaker 1: I think Kip's got plenty of time to plan for
Speaker 1: that and to put himself into that self insurance camp
Speaker 1: right where if he not. Like, we want you to
Speaker 1: work for the next thirty years, Kip, but I think
Speaker 1: you can plan for potentially a few hundred thousand dollars
Speaker 1: worth of potential long term care needs at some point
Speaker 1: in your future decades down the road. But that might
Speaker 1: mean delaying your retirement date by a couple of years
Speaker 1: so that you can continue to fund some of those
Speaker 1: accounts and that you can have more of a cushion
Speaker 1: to fall back on the long term care insurance market.
Speaker 2: Yeah.
Speaker 1: Like, I think you're right, Matt. I think it's probably
Speaker 1: too early to be looking there anyway. But the truth
Speaker 1: is a lot of those policies that are expensive, they
Speaker 1: can be volatile. The premium need, the premium amounts can change,
Speaker 1: and self funding is a better approach to take if
Speaker 1: you can pull it off.
Speaker 2: And it's also.
Speaker 1: Important to note, Matt that there are other ways. Let's
Speaker 1: say I don't know if Kip is a renter or
Speaker 1: a homeowner, but if you own your home free and clear,
Speaker 1: well there's a lot of equity built up in that home,
Speaker 1: and so lots of times people choose to do something
Speaker 1: like a reverse mortgage instead of having a long term
Speaker 1: care policy. Those can be expensive, those aren't the best
Speaker 1: product either, but that might be a better choice for
Speaker 1: a lot of people than a long term care policy too,
Speaker 1: especially when a lot of those long term care policies
Speaker 1: get ditched before it gets time to use them. So
Speaker 1: I think that might be at least a more flexible approach.
Speaker 2: Yeah, and another consideration too, and this wasn't at all
Speaker 2: something that get brought up in his question, but I
Speaker 2: think look into family because, like I think one of
Speaker 2: the reasons people don't like reverse mortgages is because they
Speaker 2: start to think, well, then I don't have anything to
Speaker 2: give to my kids, right, they're thinking about generational wealth.
Speaker 2: But if you have kids, I think it's worth having
Speaker 2: a conversation with them and considering a multi generational household.
Speaker 2: It's something that's very common in other countries, but it's
Speaker 2: just not a part of our society. It's not a
Speaker 2: part of our culture here in the US. But I
Speaker 2: think it's like it's the best of both worlds because
Speaker 2: you've got aging parents where they're at the point in
Speaker 2: time where they might need some of that help and
Speaker 2: it would be more affordable for them for the assets
Speaker 2: that they have to be able to offset the costs
Speaker 2: associated with an adult child who's then helping to take
Speaker 2: care of them. And then they also have additional time
Speaker 2: with their kids or even the grandkids. You've got built
Speaker 2: in community, Like it's just a win win. And if
Speaker 2: that's not a conversation, and again may not be a
Speaker 2: part of Kip's situation, but for everyone else out there,
Speaker 2: I think this is a real consideration. I want this
Speaker 2: just to be more of a talking point, something that
Speaker 2: comes up, something that's considered, because it's totally on our
Speaker 2: radar as something that might be off in our future.
Speaker 2: We just live in a world, in a country specifically
Speaker 2: that glorifies and holds up independence and sort of in
Speaker 2: that independent sort of lifestyle as opposed to being more
Speaker 2: reliant in community with each other, which I think can
Speaker 2: be more beautiful and healthier on multiple fronts, not only
Speaker 2: in relational ways, but also financially as.
Speaker 1: Well, especially that familiar level. And I think this is
Speaker 1: just keeps asking a great question at a great time
Speaker 1: for him, because he still has so many options in
Speaker 1: front of him. He's still working, still earning an income.
Speaker 1: He could choose to prolong that retirement age by just
Speaker 1: a little bit. There's so many different choices he can
Speaker 1: make on the way to be prepared for these possible
Speaker 1: future large expenses coming down the pike. I wouldn't you know,
Speaker 1: put blinders on and assume that you're not going to
Speaker 1: encounter any sort of health headwinds. You know that as
Speaker 1: you get further along into your retirement years. But now
Speaker 1: is the right time to start planning for those things
Speaker 1: and to start saving ahead so that you're ready to
Speaker 1: tackle those things and so you don't feel kind of
Speaker 1: hoodwinked into buying some sort of expensive policy that doesn't
Speaker 1: make sense for you and your family.
Speaker 2: That's right, man, But everyone out there stick with us
Speaker 2: because we've got more personal finance content to get to
Speaker 2: just right after this break. All right, we're back.
Speaker 1: It is, of course time now for the Facebook question
Speaker 1: of the week. Comes from the how to Money Facebook group,
Speaker 1: which you should join if you're not a member of
Speaker 1: This question comes from Catherine. She says, Hey, Matt and
Speaker 1: Joel love your podcast. Thank you for everything you do
Speaker 1: and everything you've taught me. I'm newly married and my
Speaker 1: husband and I are opening a joint bank account at
Speaker 1: the end of this year. We discussed Bank of America,
Speaker 1: being that it's conveniently located near where we live. But
Speaker 1: I just listened to your Friday Flight episode. Please tell
Speaker 1: me the cons of banking with a big bank so
Speaker 1: that I can explain it to my new husband. Why
Speaker 1: do you favor online banks such as Discover? My husband
Speaker 1: loves the idea of being able to go to his
Speaker 1: bank and pull out cash at any given time, so
Speaker 1: that's his reasoning the bank with Bank of America. Let
Speaker 1: us know what you guys think. First, we got to
Speaker 1: say congrats on getting married. Oh yeah, yeah, congrats to
Speaker 1: you too.
Speaker 2: And let's go ahead and just address that specific question,
Speaker 2: which is that most of the online banks reimburse ATM fees,
Speaker 2: so you can pretty much get cash. You don't have
Speaker 2: to go to the actual actual bank branch in order
Speaker 2: to get your hands on some cash.
Speaker 1: They're part of some sort of ATM network, and they're
Speaker 1: like at the local drug store. Instead of the bank
Speaker 1: that's on the street corner, it's at the drug store
Speaker 1: thread around the corner. So in fact, Target, like I
Speaker 1: think Capital One has all their banks have They've got
Speaker 1: ATMs at every target around the country.
Speaker 2: So it's actually more convenient for your husband to get
Speaker 2: his hands on cash. I think most likely were he
Speaker 2: to go with some of the online banks.
Speaker 1: That we loved, and you need cash these days, not
Speaker 1: much the ability some people.
Speaker 2: I don't know. I don't want to make it assumptions
Speaker 2: about Catherine's husband.
Speaker 1: I pay with the that they put in my wrist map,
Speaker 1: which you don't actually, although I see that a whole
Speaker 1: Foods you can pay like Amazon customers can pay with
Speaker 1: a chip in their body.
Speaker 2: While someone's they're buying pizza. Though a little freaky it
Speaker 2: was out of order or whatever. Did you see that? Yeah,
Speaker 2: the cath Let's highlight some of the main issues. First
Speaker 2: of all, bad customer service. Uh. This makes me think
Speaker 2: about Wells Fargo and all that they have done to
Speaker 2: their customers, some of the awful ways that they've treated
Speaker 2: folks over the past decade. We would rather see you
Speaker 2: do business with companies who don't actively hate you. The
Speaker 2: culture at some of these gargangum banks is just so
Speaker 2: toxic that we would just we would honestly rather see
Speaker 2: how money listeners completely avoid them, and maybe you're thinking, well, yeah,
Speaker 2: customer service, like what kind of customer service do you
Speaker 2: actually have when it comes to some of these online banks.
Speaker 2: You know what, maybe it's not any better than were
Speaker 2: you to reach out to a bigger bank digitally online,
Speaker 2: but the fact that they haven't participated in underhanded schemes
Speaker 2: to be able to open accounts as branches are trying
Speaker 2: to reach certain quotas. There's just there's a history of
Speaker 2: untrustworthy behavior that we've seen some of the bigger branches
Speaker 2: that were not fans of I think.
Speaker 1: And actually a lot of the banks that you and
Speaker 1: I talk about, Matt, it's actively less bad and it's
Speaker 1: it's proactively better too. I think it's easier to get
Speaker 1: a human on the phone to talk about a problem
Speaker 1: you have. Yeah, there's no bank branch you can walk into,
Speaker 1: but the one hundred numbers are typically better with the
Speaker 1: online bank. So if you need or you care about
Speaker 1: customer service with your bank, I think that is a
Speaker 1: selling point. The truth ist too, the products from the
Speaker 1: big banks often suck too. Like think about savings accounts,
Speaker 1: for instance, the big banks don't come close to paying
Speaker 1: you a reasonable return on your savings. I think Wells Fargo, Matt,
Speaker 1: who you just aptly mentioned, they're paying point one five
Speaker 1: percent on their savings account. That's awful. Chase is paying
Speaker 1: point zero one percent, which is even worse. And then
Speaker 1: at Bank of America, which is the bank that's right
Speaker 1: around the corner from Catherine, point zero three percent is
Speaker 1: standard the gold tier.
Speaker 2: Oh you want to know what that is, Matt, point
Speaker 2: zero four percent.
Speaker 1: Oh, and then oh you want to go platinum dog
Speaker 1: point zero five percent. It's you can't make this up.
Speaker 1: It's these like incremental increases that mean essentially nothing, whereas
Speaker 1: like competitive banks are paying you know, four and a
Speaker 1: quarter four and a half percent. Say, but you missed
Speaker 1: out on Platinum Honors, which is point zero six percent. Yeah,
Speaker 1: you found you missed the upper tier, which maybe you're thinking, Catherin,
Speaker 1: you're hearing to say these numbers, and you're like, yeah,
Speaker 1: but like he doesn't that doesn't mean all that much.
Speaker 1: All right, listen up, because if you run the numbers,
Speaker 1: the average two person household in America has seventy five
Speaker 1: thousand in annual expenses. So cut that in half, you're
Speaker 1: looking at thirty seven thousand dollars. That's what you should
Speaker 1: roughly have in your emergency fund if you've got six
Speaker 1: months worth of living expenses set aside. Now, if you
Speaker 1: go with a bank like cit who I believe at
Speaker 1: this point is paying four point seven percent, it's definitely
Speaker 1: over four percent. That's good, not point zero four like
Speaker 1: literally four plus percent. You're talking about earning seventeen hundred
Speaker 1: dollars on the money that you've got just sitting there
Speaker 1: parked in your emergency fund versus guess what it is
Speaker 1: you'll at point zero six percent, guessing it's about ninety
Speaker 1: two cents.
Speaker 2: It's not that lot. Okay, twenty two bucksky, but still
Speaker 2: over seventeen hundred dollars versus twenty two dollars. That there's
Speaker 2: a big difference there. Just in a credit mathmath, it's
Speaker 2: revealing of what you think of of the large I
Speaker 2: have so little regard for those big banks and matt
Speaker 2: So you're talking about rates of return, but then talk
Speaker 2: about the fees too. So a lot of these these
Speaker 2: checking accounts or savings accounts again worse with some of
Speaker 2: the big banks, they might that one hundred and seventy
Speaker 2: dollars or whatever you might have earned can be completely
Speaker 2: wiped away thanks to the monthly service fees they are
Speaker 2: going to charge you. So, I mean the big banks,
Speaker 2: they keep threatening to bring on new fees even while
Speaker 2: the banks we love are taking fees away, they're eliminating them. Yeah,
Speaker 2: the rates on the product, like on the loan products
Speaker 2: as well, are going to be much worse. And so
Speaker 2: I just I literally searched the first credit union that
Speaker 2: popped up in the mind here locally, and it's over
Speaker 2: half a percent better than what it is that Bank
Speaker 2: of America's got, and that's for a just a thirty
Speaker 2: year mortgage with twenty percent down.
Speaker 1: It's amazing. The big banks are actually banking on name
Speaker 1: recognition and brick and mortars near you, yep, to retain
Speaker 1: your loyalty. And we would say that's not good enough,
Speaker 1: Like there's so many reasons to choose the online banks
Speaker 1: and credit unions instead. People remain, though, Matt, because inertia
Speaker 1: bias it's hard for humans to overcome. I'm hoping here
Speaker 1: that we've convinced Catherine and that she can convince her husband,
Speaker 1: because the best banks these days are online banks like
Speaker 1: Discover ally cit We mentioned them all the time. Low cost.
Speaker 1: Broker's firms like Fidelity and Schwab actually have good banking
Speaker 1: products too. Betterment has a good one as well. They
Speaker 1: pay really good rates on your savings. Customer service is superior.
Speaker 1: They're still big enough to have solid fee free ATM networks.
Speaker 1: I mean, you get all the modern amenities without the
Speaker 1: horrible downsides.
Speaker 2: That's right. So just point that out. And for me
Speaker 2: it's I mean the savings rate that they're paying, like
Speaker 2: if you are willing to pay over but you're basically
Speaker 2: paying over fifteen hundred dollars for the convenience every single
Speaker 2: year to be able to pop into your local branch.
Speaker 1: Not worth it, Not worth it, You're right. I think
Speaker 1: of that as a gargantuan fee that the big banks
Speaker 1: are charging. And to have that comedian brick and mortar location,
Speaker 1: it ain't worth it. You don't want to fund that
Speaker 1: building for them.
Speaker 2: But all right, let's get to the beer that you
Speaker 2: and I enjoyed.
Speaker 5: Joel.
Speaker 2: This was the Ube Macapuno Delight. It's an Ube chocolate
Speaker 2: coconut porter donated to the show by our buddy Joel,
Speaker 2: and this is brewed by Brewyard Beer Company. What were
Speaker 2: your thoughts?
Speaker 1: Well, I had to look up ube. Ube is apparently
Speaker 1: purple yam. Yeah, I didn't even realize that it's like
Speaker 1: a so yams were harmed in the making of this beer.
Speaker 2: It's from the Philippines, so ube is like it's evidently
Speaker 2: it's got like sweet potata like vibes. But it's often
Speaker 2: used in making desserts, which makes sense because the can
Speaker 2: is purple. It looks like a cake, like a layered
Speaker 2: cake of sorts. But uh, yeah, what were your thoughts?
Speaker 2: I thought this was good.
Speaker 1: Yeah, it had like coconut, vanilla, and chocolate be vibes
Speaker 1: kind of all combined together in a porter package, which
Speaker 1: is kind of a lighter version of a stout in
Speaker 1: so many ways, And I enjoyed it. It was it
Speaker 1: was a little a little sweet for my taste, like
Speaker 1: not my favorite thing, but I thought it was solid.
Speaker 2: Was it sweet or were you convinced that sweet based
Speaker 2: on the icing that the design ont of this can
Speaker 2: that's dripping down, so it makes you think that, oh,
Speaker 2: this has got it. There's maybe a little more vanilla
Speaker 2: than I would totally typically go for. Yeah, the vanilla
Speaker 2: and the coconut kind of joined forces and both come
Speaker 2: across stronger than I think they would have otherwise. Yeah,
Speaker 2: but it's also like I guess maybe the roasty sort
Speaker 2: of flavors, but do you remember clove. Well, I'll just
Speaker 2: leave it at that. Clothes like you know, like a
Speaker 2: like a Christmas ham, Like, yeah, you set the clothes
Speaker 2: in there. You know what kind of spices that you're
Speaker 2: talking about With clothes? It almost says that kind of
Speaker 2: flavor profile going on. But it makes me think of
Speaker 2: I don't know, it also makes me think of the holiday.
Speaker 2: So I actually kind of like it. As the temperatures
Speaker 2: are starting to cool down a little bit and we're
Speaker 2: getting into maybe some of these beers that have a
Speaker 2: little more backbone.
Speaker 1: The Porter is a great drink for October. Like you
Speaker 1: don't want to drink a Porter in August, but once October.
Speaker 2: And then maybe you're not even ready for the barrel
Speaker 2: aged out yet. Yeah, in October either, like between you
Speaker 2: want to say that for December for January.
Speaker 1: I had a good october Fest the other day and
Speaker 1: I was like, oh man, I'm not Usually Octoberfest isn't
Speaker 1: the thing I yearned for, but in this time of year,
Speaker 1: it just it's the right drink.
Speaker 2: It fits the mood nice. All right, Well, that's gonna
Speaker 2: be it for this episode. Listeners can find our show
Speaker 2: notes up on the website at howtomoney dot com. Oh,
Speaker 2: I meant to say too. We're talking about, uh, it
Speaker 2: was Catherine, her husband. Why he uses cash all the time.
Speaker 2: Why don't you just use a credit card? You're also
Speaker 2: giving up so many benefits by not using a credit card,
Speaker 2: like even a basic credit card. And you can hop
Speaker 2: over to the site at howdomony dot com forward slash
Speaker 2: credit card tool and you can literally sort it by
Speaker 2: I want a card that's free, so zero annual fee,
Speaker 2: and I just want to earn simple cash back, and
Speaker 2: it'll pop up several options there for you, as long as,
Speaker 2: of course, you don't rack up a bunch of debt,
Speaker 2: which is maybe that's why Catherine's husband is completely avoiding
Speaker 2: cards all Maybe and he likes dealing in cash or
Speaker 2: maybe yeah, he just.
Speaker 1: Used to doing it and he hasn't changed his ways.
Speaker 1: And if he handles credit cards, well that would be
Speaker 1: a better form of payment. So yeah, all right, that's
Speaker 1: gonna do it for this one, Matt. Until next time,
Speaker 1: Best Friends Out, Best Friends Out.
Speaker 3: The hun spe