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Speaker 1: Welcome to How to Money. I'm Joel and I am

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Speaker 1: Matt and today we're answering your listener questions.

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Speaker 2: That's right, buddy, Happy Monday to everybody. We hope you

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Speaker 2: had a fantastic weekend. We've got some great listener money

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Speaker 2: questions to get to. For instance, we've got a listener

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Speaker 2: and he's wondering if high yield checking accounts, whether or

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Speaker 2: not they are necessary. We've got another listener who's looking

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Speaker 2: to pay for VET school while simultaneously avoiding capital gains.

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Speaker 2: How do those two have anything to do with each other.

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Speaker 2: We'll get to that question. You will soon know how.

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Speaker 2: And we're also going to talk about discriminatory four to

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Speaker 2: one K accounts. Joel, bet, you didn't know your retirement

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Speaker 2: cat was racist. I don't like discrimination, Matt On. So

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Speaker 2: actually doesn't have anything to do with race. It has

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Speaker 2: more to do with your level of income. But we'll

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Speaker 2: get to that and others during today's episode.

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Speaker 1: All Right, I had a question that's been kind of

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Speaker 1: ruminating in my mind since I read an article about

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Speaker 1: this in the New York Times. Matt that there were

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Speaker 1: a lot of young people were interviewing this New York

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Speaker 1: Times article about the topic of social security. Many of

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Speaker 1: the people who were asked, Hey, how do you feel

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Speaker 1: about social Security? Would you stop contributing if you could,

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Speaker 1: and you could just bank that money instead.

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Speaker 2: A couple of weeks ago, Yeah, I saw the headline.

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Speaker 2: I did not read it.

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Speaker 1: I basically everyone said, yes, okay, yeah, I think you also.

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Speaker 2: Know where I land on this, which is the more

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Speaker 2: responsibility that we can take as individuals as to our

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Speaker 2: future outcomes, right, Like the onus is on us, and

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Speaker 2: I think that that is the most efficient path forward.

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Speaker 2: It's going to be the least costly, it's going to

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Speaker 2: be so much more simple as opposed to this giant

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Speaker 2: system social security.

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Speaker 1: I get why it exists, right, because there are a

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Speaker 1: lot of people who aren't going to save for themselves,

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Speaker 1: and this is a forced method of savings, and it's

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Speaker 1: essentially ensuring that that segment of people won't end up

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Speaker 1: in dire straits come those retirement years. But you're right,

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Speaker 1: I mean, and it's interesting. Nobody really can opt out

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Speaker 1: of Social Security except for some members of the clergy.

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Speaker 1: Some religious folks are able to say, yeah, ministers, because

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Speaker 1: we have a friend who opted. He heard that once

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Speaker 1: upon a time and said, sweet, I don't have to

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Speaker 1: lose a portion of my paycheck everything every two weeks

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Speaker 1: in the government sadly accept that.

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Speaker 2: Well, then he wasn't investing in any other way. Yes,

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Speaker 2: and that is what.

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Speaker 1: You have to do if he does that opt out

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Speaker 1: of Social Security. We had to scare them straight right

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Speaker 1: away and be like, dude, dude, if you're going to

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Speaker 1: opt out of Social Security, you've got to start. You

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Speaker 1: gotta be stocking those dollars away and do extra planning

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Speaker 1: for your own future.

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Speaker 2: And all fairness, it was before we started the podcast,

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Speaker 2: So I feel like that he's like, I don't have

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Speaker 2: any street credit yet. That is something that we would

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Speaker 2: have talked to him about.

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Speaker 1: Yeah, but I get why people would want to do that.

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Speaker 1: But I think the other the flip side of the

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Speaker 1: coin is, and it's worth mentioning this. There's a lot

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Speaker 1: of fear and uncertainty about the future of Social Security,

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Speaker 1: and rightly so in some ways, because our politicians have

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Speaker 1: been so negligent of the fact that the trust fund

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Speaker 1: is running out of money and that benefits are are

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Speaker 1: going to have to be cut at least a twenty

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Speaker 1: five percent haircut, right if nothing is done but the

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Speaker 1: truth is I twenty thirty five, put onto your hats.

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Speaker 1: I think everybody, especially for gen Z, I get maybe

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Speaker 1: some of that despair. But I just want to end

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Speaker 1: on a note of optimism. Like I do think social

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Speaker 1: security in some way, form or fashion will be there

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Speaker 1: for our generation and for the generation coming behind us.

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Speaker 1: But man, I just wish people would either do something

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Speaker 1: to fix it, and it'd be nice. Actually maybe if

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Speaker 1: we rely on social security less overall and we did

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Speaker 1: take more responsibility for our own retirement. I think with a

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Speaker 1: lack of pension access these days for people, we're all

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Speaker 1: going to have to be a little more thoughtful.

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Speaker 2: We need to be.

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Speaker 1: And that's why people tune into this podcast. I think,

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Speaker 1: how does they want to start thinking about how they

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Speaker 1: can prepare themselves depending on that.

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Speaker 2: Yeah, they know the government's not going to do it.

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Speaker 2: I am not holding my breath to think that there

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Speaker 2: is going to be any reform to social security anytime soon.

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Speaker 2: Like nobody wants to touch it, Like nobody wants to

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Speaker 2: be talking about it. No, nobody wants to be the

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Speaker 2: bearer of bad news. And that's the part of why

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Speaker 2: we've got the show How to Money, because it puts

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Speaker 2: the ball in your court. It's up to you as

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Speaker 2: to how aggressively you want to stay for retirement. We

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Speaker 2: all know the longer you kick the can down the road,

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Speaker 2: the worst the problem gets. So like it'd be nice

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Speaker 2: if we I don't know, thought about it before things

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Speaker 2: really hit the fan. So, speaking of cans, I like

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Speaker 2: that Canada the beer. You've been doing this for a

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Speaker 2: long time. Haven't you long enough to do something like that?

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Speaker 2: I guess? But the beer that you and I are

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Speaker 2: going to enjoy during this episode is called cobs Are.

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Speaker 2: Where cobs Are? I'm not totally sure how you say it,

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Speaker 2: but this is a Ukrainian imperial stout by Big Spruce

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Speaker 2: Brewing that was donated to the show by our good

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Speaker 2: buddy Andrew. I'll say Andrew l he knows who.

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Speaker 1: So yeah, he went on a trip to Canada, went

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Speaker 1: to some really fancy spots in Canada, and he brought

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Speaker 1: us back this beer and super excited. I wonder if

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Speaker 1: cobes are is that how uspl tzar in Ukrainian? Maybe

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Speaker 1: is that like a picture of a Ukrainian zar? I

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Speaker 1: don't know, I'm curious.

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Speaker 3: I don't know.

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Speaker 2: Well, on the side here there's there's a let's see,

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Speaker 2: it looks like it looks like there's a poem some

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Speaker 2: writings here, and it's titled codes are at the time.

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Speaker 2: So maybe it's just the name of this in particular excerpt.

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Speaker 2: I don't know. All right, Well, I like my refined beers.

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Speaker 2: Extra strong beers is what this is called. So it's

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Speaker 2: a good thing you and I are sharing.

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Speaker 1: If this one's got a poem on it, it must be fancy.

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Speaker 2: And it's certified organic by Canada, so sweet. All right,

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Speaker 2: let's got the Canadian there we go.

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Speaker 1: Well, I'm excited to have this one, and we'll give

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Speaker 1: our thoughts in just a bit. But let's get to

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Speaker 1: listener questions. If you have a money question, we'd love

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Speaker 1: to hear from you. We'd love to take it on

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Speaker 1: the show. Got to howomoney dot com slash ask for

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Speaker 1: simple instructions or record your voice memo, email it over

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Speaker 1: to us. We'll take it hopefully next week. Matt, let's

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Speaker 1: get to a question specifically about checking accounts, trying to

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Speaker 1: make more money on the cash you got on hand.

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Speaker 3: Hey, Matt and Joel, Mike, coming to you from Perry's Burg, Ohio.

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Speaker 3: Recently on the newsletter you mentioned checking your accounts and

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Speaker 3: ones that don't pay interest. Our current checking account is

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Speaker 3: one that does not pay interest. Should we look to

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Speaker 3: get something that does pay interest or not? Right now?

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Speaker 3: Anything extra in our checking account as.

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Speaker 4: It comes in and bills are paid, I make sure

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Speaker 4: that it's going back out to things like Vanguard and

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Speaker 4: c for our savings. So I was wondering if needing

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Speaker 4: a checking account with interest or not is needed at

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Speaker 4: that point.

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Speaker 2: Thanks all right, Joel. Well Mike here, he said exactly

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Speaker 2: where he lives, which of course means that you know,

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Speaker 2: I went looking up this town, Perrysburg. It's on the

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Speaker 2: outskirts of Toledo, Okay, right there near It's it's basically

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Speaker 2: on Lake Erie. Did you think of Canada? Speaking of Canada,

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Speaker 2: it's like right there, creep. He's basically a Canadian, a

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Speaker 2: personal not a personal finance somebody who's in investing, somebody

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Speaker 2: that we keep up with. He always talks about the

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Speaker 2: Great Lakes area up there being sort of a hedge

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Speaker 2: against global warming because as the earth warms up, everyone's

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Speaker 2: gonna want to go move from the south up to

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Speaker 2: the north. And he says the Great Lake Arias are

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Speaker 2: quite beautiful. I believe. I believe. I think Lake Erian

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Speaker 2: particularly is I think I've heard argued the most beautiful

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Speaker 2: great lake.

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Speaker 1: I haven't spent enough time there. I've walked along was

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Speaker 1: it Lake Michigan in Milwaukee, Wisconsin. I was super impressed.

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Speaker 1: I would love to spend more time up in that area,

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Speaker 1: but just haven't made it up that far one of

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Speaker 1: these days.

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Speaker 2: But Mike, this is a really solid question. So we

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Speaker 2: talked a bit about why you shouldn't do business with

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Speaker 2: one of the big banks last week. So let's focus

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Speaker 2: on checking accounts here for a second, Because if you

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Speaker 2: were to open up a checking account with one of

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Speaker 2: the biggest banks in the country, you wouldn't be earning

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Speaker 2: any interest, But that actually wouldn't be abnormal because checking

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Speaker 2: accounts don't typically come with meaningful interest rates attached. You would, however,

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Speaker 2: probably get hit with higher fees though, so some checking

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Speaker 2: accounts are created better than others, but it oftentimes doesn't

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Speaker 2: have much to do with the interest that you're earning

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Speaker 2: from that checking account.

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Speaker 1: So it probably makes sense to mention the fact that

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Speaker 1: checking accounts overall, like here alluding to math, they're not

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Speaker 1: great on the interest rate. Front, so I don't know,

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Speaker 1: maybe exclusively using savings accounts.

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Speaker 2: Would be better.

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Speaker 1: Well, while the best online savings accounts are paying great

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Speaker 1: rates right now, at least when we're talking about the

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Speaker 1: last fifteen years of interest on savings and it's better

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Speaker 1: than it's been in a long time, they're not as

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Speaker 1: easy to get money out of, and so you can't

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Speaker 1: write checks or have a debit card essentially attached to

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Speaker 1: your savings account. And it's important to note that savings

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Speaker 1: accounts actually have some specific limitations. Most banks, for instance,

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Speaker 1: are not going to allow you to do more than

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Speaker 1: six withdrawals in a month and met that actually used

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Speaker 1: to be a limit that was imposed by the FED

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Speaker 1: on savings accounts specifically, so banks like literally were not

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Speaker 1: allowed thanks to FED dictate you couldn't make more than

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Speaker 1: six transfers out of your savings account. And I remember

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Speaker 1: they're trying to stabilize the M one.

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Speaker 2: I don't know if that's true, made that up, but

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Speaker 2: I think that's why. Yeah, I had something to do

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Speaker 2: with it.

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Speaker 1: And I remember getting something in the mail from my

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Speaker 1: bank at times saying listen, dude, you made more than

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Speaker 1: six withdraws from this account. If you keep doing this, like, oh,

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Speaker 1: slap on the wrist, we have to do something about it.

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Speaker 2: And so I was like, okay, wait, don't make me

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Speaker 2: come back there, Joel.

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Speaker 1: Right, I had to get more things to come out

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Speaker 1: of my checking account, and then I would start to

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Speaker 1: make single, larger sum transfers between that account. So that

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Speaker 1: went away actually a few years ago, I think in

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Speaker 1: twenty twenty. But a lot of banks still adhere to this,

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Speaker 1: and you might still get a slap on the wrist

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Speaker 1: or an email or a letter in the mail saying, hey,

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Speaker 1: you're over using, you're overdrawing from your sam usse account.

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Speaker 1: It's literally all about how many transactions you can perform

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Speaker 1: from that account in a given month. The truth is

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Speaker 1: most people need to have both types of accounts largely

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Speaker 1: because of that, and typically having them at the same

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Speaker 1: institution to make transferring money back and forth. Making it

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Speaker 1: easy makes it make it super.

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Speaker 2: Easy, and it makes it instant right, Like, that's what's

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Speaker 2: so great about that is you don't have to wait

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Speaker 2: on that clearing the clearing house, you know, the multiple

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Speaker 2: business days. It's instantaneously there.

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Speaker 1: We've talked on the show about how that's supposed to

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Speaker 1: be getting faster right there, but still can take three

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Speaker 1: days right to send money from one bank.

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Speaker 2: To the other.

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Speaker 1: It's not as fast as blockchain, right, No, so I

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Speaker 1: actually looked at it solves everything.

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Speaker 2: Man. Mike Key specifically mentioned CIIT. Well actually didn't know this,

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Speaker 2: but CIIT they have zero limitations on the number of

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Speaker 2: transfers come out of your savings account. It's just pretty sweet. Ally,

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Speaker 2: so you mentioned a lot of banks are at at six.

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Speaker 2: I was curious because I've never bumped up against this,

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Speaker 2: but ally allows ten transfers out of your savings account.

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Speaker 2: So yeah, just as we're all trying to maximize the

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Speaker 2: amount of money that we're keeping in our savings, it's

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Speaker 2: good to know what those limits are if you have

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Speaker 2: those limits. But let's talk about these potential high yield

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Speaker 2: checking accounts, because there are some checking accounts out there

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Speaker 2: that will pay higher rates of interest, but those accounts

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Speaker 2: often come with additional fees in order to snag that

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Speaker 2: higher rate. Still, others will actually require that you use

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Speaker 2: your debit card a specific number.

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Speaker 1: Of times in a given month. They're able to pay

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Speaker 1: you that higher rate of interest because of the swhite

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Speaker 1: fees that they're going to accrue. Thanks to you using

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Speaker 1: your debit card. If it's like saying, hey, let's use

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Speaker 1: your debit card twelve times in a month, and we'll

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Speaker 1: give you a four percent rate on your checking account.

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Speaker 1: If you don't though you miss it, you don't get that.

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Speaker 2: You don't get that interesting, and they know. See, the

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Speaker 2: more often that you are using that card, you start thinking, well,

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Speaker 2: let me just use that card for everything, and then

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Speaker 2: all of a sudden that's your main account. We don't love, however,

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Speaker 2: debit cards. Just generally speaking, using a combination of a

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Speaker 2: credit card and then just stashing most of your money

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Speaker 2: in savings, I think that provides a better net result.

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Speaker 2: So that being said, we just don't see any need

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Speaker 2: for most folks out there to try and hunt down

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Speaker 2: one of these high yield checking accounts, especially when they're

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Speaker 2: just so hard to come by. You've got all these

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Speaker 2: different hoops. You gotta put on a performance every single month,

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Speaker 2: and that's not something I'm necessarily interested in doing.

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Speaker 1: Yeah, if you go to a site like doctor of

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Speaker 1: Credit dot com, which does a great job detailing like

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Speaker 1: the best paying CDs, the best paying save news accounts,

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Speaker 1: and checking accounts too, you're gonna find some checking accounts

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Speaker 1: where you're like, wow, I actually can't get paid a

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Speaker 1: reasonable rate of interest on my checking I haven't seen

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Speaker 1: this almost anywhere else. And and typically there are lots

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Speaker 1: of smaller banks and credit unions around the country. This

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Speaker 1: is how they attract business. But watch out for the

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Speaker 1: fine print if you do try to go with one

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Speaker 1: of those checking accounts that pays a reasonable rate of

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Speaker 1: interest where nobody else does. Because the fees are the hoops, Matt,

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Speaker 1: which is kind of what you're referring to, they can

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Speaker 1: easily outweigh the benefits. The best thing to do, I

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Speaker 1: would say, is kind of what I did when I

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Speaker 1: got slapped on the wrists using my savings account too much,

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Speaker 1: was we'll keep most of your money in savings and

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Speaker 1: move money over to your checking account as needed. And

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Speaker 1: if your bank has a limit on how many times

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Speaker 1: you're able to move money out of your savings account,

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Speaker 1: do a bigger chunk once or twice a month so

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Speaker 1: that it doesn't feel like you're constantly moving money back

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Speaker 1: and forth and the bank isn't like, dude, you're dipping

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Speaker 1: into your savings account wait too much. And again that's

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Speaker 1: going to depend on which bank you're doing business with,

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Speaker 1: and what rules they have in place. A lot of

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Speaker 1: banks aren't going to charge an overdraft fee, by the way,

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Speaker 1: if you take too much out of your checking as

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Speaker 1: long as you allow them to pull it out of

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Speaker 1: another linked account, which is typically your savings account with

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Speaker 1: the same institution. So that's something else to be aware of.

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Speaker 1: Is okay, if I'm with this kind of basic checking

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Speaker 1: account that doesn't really pay me anything, I can still

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Speaker 1: have most of my money stashed in a savings account

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Speaker 1: that's paying. You know, some are closer to five percent,

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Speaker 1: probably not five percent now, but some are closer to

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Speaker 1: that and have very little in my checking And guess

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Speaker 1: what if I do make a mistake, have a flub

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Speaker 1: and I overdraw my checking account, Well, at least our

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Speaker 1: favorite banks, Matt, they're not going to charge you a

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Speaker 1: fee for that, and maybe they'll just take the money

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Speaker 1: directly out of your savings account.

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Speaker 2: And it's kind of like all clever, you a certain

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Speaker 2: amount of money that's right beyond the what you've gotten there,

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Speaker 2: that's right.

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Speaker 1: It's kind of a no harm, no foul, whereas that

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Speaker 1: used to be like a massive booboo, and it still is.

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Speaker 2: If you're with most of the big banks, Yeah, but

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Speaker 2: with Mike specifically, I mean it seems like he's on

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Speaker 2: top of it, and so I wouldn't sweat it because

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Speaker 2: we're talking about a relatively small amount of money there

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Speaker 2: within that checking account that's not earning that high rate

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Speaker 2: of interest. You are also investing some of those sons

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Speaker 2: with Vanguard. You mentioned that you're funneling other dollars towards

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Speaker 2: one of the high interest savings accounts that we recommend

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Speaker 2: being CIT. I think this is the best case scenario

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Speaker 2: by far. And if other listeners out there find that

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Speaker 2: they're keeping too much in their checking accounts, there's just

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Speaker 2: no need to try and find a great checking account,

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Speaker 2: which is akin to trying to find a needle in

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Speaker 2: a haystack. Just find one that's solid, that's got great perks,

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Speaker 2: no fees, and then just keep the vast majority of

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Speaker 2: your liquid savings in an actual savings account. And I'll

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Speaker 2: say as well, don't be tempted to oversave because from

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Speaker 2: personal experience, as you know, you've got a solid emergency

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Speaker 2: fund set up set aside. Let's say you are saving

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Speaker 2: some additional money that you're looking to keep liquid for

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Speaker 2: maybe a home renovation. The interest that you receive on

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Speaker 2: your savings it's nice, and when it comes in every

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Speaker 2: single month, it can be tempting, I think for some

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Speaker 2: people to see that and say, well, what's the point

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Speaker 2: of even investing? Like, I'm look how much money I'm

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Speaker 2: earning every single month, Because we see that more often,

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Speaker 2: it's something that we touch. We log into that account

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Speaker 2: more often I think than let's say our roth iras

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Speaker 2: or four to one k's. But even still you are

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Speaker 2: earning let's say half as much at least based on

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Speaker 2: historical returns on that money. So yeah, just putting a

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Speaker 2: little PSA out there as well. Don't be tempted to

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Speaker 2: oversave overpad that savings account where instead we want you

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Speaker 2: to have the proper amount of cash set aside in

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Speaker 2: that savings account, but you should be investing for your

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Speaker 2: long term goals. Yeah.

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Speaker 1: I saw a stat Matt just this morning, and I

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Speaker 1: don't remember exactly what it was, with something along the

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Speaker 1: lines of like ten years ago, roughly eight percent of

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Speaker 1: overall assets we're in savings products and CDs, and now

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Speaker 1: it's like seventeen percent of overall assets has been is

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Speaker 1: in essentially savings esque products and that is something to

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Speaker 1: watch out for, and especially if you are a how

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Speaker 1: to Money listener who's in your wealth building phase of life,

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Speaker 1: if you're in if your gen Z millennial, if you've

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Speaker 1: got decades before you're planning to quit work, if you're

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Speaker 1: over saving, that's a real problem, and it has been

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Speaker 1: over the last couple of years in particular, but it

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Speaker 1: will continue to be a problem because you will under earn,

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Speaker 1: especially as rates go down. It doesn't mean that in

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Speaker 1: one given year your savings might not outperform the market,

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Speaker 1: but over the long haul, the market will easily if

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Speaker 1: historical averages remain outperform whatever you're gonna get in your

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Speaker 1: savings account, so easily. Savings is crucial. Got to have

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Speaker 1: the liquid cash on hand, but don't overdo it.

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Speaker 2: That's right. We've got more to get to, including that

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Speaker 2: four one K non discrimination test question what that might

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Speaker 2: mean for your retirement accounts. We'll get to that more

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Speaker 2: right after this.

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Speaker 1: All right, Matt, we're back. Let's say question now about

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Speaker 1: how to pay for higher education.

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Speaker 5: Hi, Joel and Matt. This is Chris from the San

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Speaker 5: Francisco Bay Area, long time listener of How to Money,

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Speaker 5: and of course love your podcast. I have a question

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Speaker 5: about paying for our daughter's veterinary school. We are lucky

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Speaker 5: enough to be in a position to pay for her

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Speaker 5: four years of schooling and want to do this so

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Speaker 5: she starts her future career debt free. One quarter of

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Speaker 5: the cost will be covered by her five two nine,

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Speaker 5: which also help pay for her undergrad Our plan is

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Speaker 5: the other three quarters of the cost will come from

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Speaker 5: mutual funds under me and my wife's names. Those funds

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Speaker 5: are on Vanguard and Janis Henderson. By twenty two year

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Speaker 5: old daughter will have no income while she's in school.

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Speaker 5: Are there any tax advantage methods of selling these positions

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Speaker 5: or are we destined to pay the long term capital

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Speaker 5: gains tax? Also, I correct an understanding that capital gains

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Speaker 5: do not get added to normal income for purposes of

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Speaker 5: determining income tax brackets. Thank you love your show and

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Speaker 5: I tell everyone I can about you.

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Speaker 2: Thanks well, Chris Well, thank you for spreading the word. Joel.

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Speaker 2: I personally don't tell anybody about the show because it

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Speaker 2: feels a bit self aggrandizing.

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Speaker 3: Doesn't it.

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Speaker 2: Do you walk around and say, hey, you got to

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Speaker 2: listen to Sandwich Board that says listen to my podcast.

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Speaker 2: We let other people toot our horn. I'm totally fine

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Speaker 2: with that, but I don't know. There's something about self promotion.

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Speaker 1: When people ask me what I do, uh, I have

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Speaker 1: to be honest and say I'm a podcaster. But then

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Speaker 1: I quickly followed up with I promise that doesn't mean

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Speaker 1: I'm unemployed, because that's what it kind of sounds like,

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Speaker 1: because like everyone has a podcast.

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Speaker 2: Now, yeah, it's like I'm an artist. Okay, well starting one, huh.

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Speaker 2: But Chris, thank you so much for spreading the word.

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Speaker 2: We really appreciate that. And I will say, it sounds

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Speaker 2: like you are an awesome parent. You are proactively saving

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Speaker 2: not just for yourself but for your daughter as well.

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Speaker 2: And the fact that you've got to extra money in

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Speaker 2: a brokerage account that you can use to ensure that

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Speaker 2: your daughter doesn't have any student debt after undergrad and

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Speaker 2: even after potentially getting a VET school education. This is incredible.

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Speaker 1: I think this is just an awesome way to get

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Speaker 1: her started and her VET school eight cheap. Matt, I

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Speaker 1: don't think it is.

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Speaker 2: I don't know much about it, but I will say

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Speaker 2: I think it's a really smart move though, because, like

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Speaker 2: you see more and more folks buying pets. I think

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Speaker 2: I saw a stat that said, pets is that what

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Speaker 2: you do? But you love a pet, Matt, Well, eventually

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Speaker 2: you have to buy them and then you love them,

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Speaker 2: or you can love them before you buy them. And

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Speaker 2: I guess that's the sure fire way to certainly be

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Speaker 2: part of with your money. But I saw that sixty

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Speaker 2: eight percent of gen zers are thinking or considering getting

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Speaker 2: a pet versus having kids, and cost has a lot

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Speaker 2: to do with it.

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Speaker 1: We've talked about the rising costs of pet care, largely

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Speaker 1: because of a lot of consolidation in the industry too.

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Speaker 2: And just the fact that folks are spending more money

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Speaker 2: on their pets. Because what happens if you are substituting

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Speaker 2: a dog or a kiddie or whatever pet for dude.

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Speaker 2: I was in home depot the other day and somebody

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Speaker 2: had the fluffiest rabbit in the little stroller. These are

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Speaker 2: the folks I'm talking about. But when you see that

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Speaker 2: pet as a family member, you don't spend a ton

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Speaker 2: of money on a pet, But would you spend a

436
00:19:08,800 --> 00:19:12,240
Speaker 2: lot of money for a family member. Absolutely, And so

437
00:19:12,400 --> 00:19:14,879
Speaker 2: I think this is why Chris, I'm pointing out Chris

438
00:19:15,000 --> 00:19:17,520
Speaker 2: that your daughter, I think is getting into a great

439
00:19:17,680 --> 00:19:19,600
Speaker 2: like I've got my own opinions about pets and kids.

440
00:19:20,000 --> 00:19:21,760
Speaker 2: This is aside from all of that, she is in

441
00:19:21,800 --> 00:19:23,480
Speaker 2: a field that where she's going to do really well.

442
00:19:23,560 --> 00:19:24,440
Speaker 2: Give me growth in that field.

443
00:19:24,560 --> 00:19:26,320
Speaker 1: Yes, in the coming decades, as more and more folks

444
00:19:26,359 --> 00:19:27,920
Speaker 1: are looking to spend more money on their pets. Same

445
00:19:27,960 --> 00:19:30,640
Speaker 1: with mental sash professionals, family members. I'm glad my wife

446
00:19:31,080 --> 00:19:32,240
Speaker 1: is going into that industry.

447
00:19:32,840 --> 00:19:33,040
Speaker 2: Yeah.

448
00:19:33,119 --> 00:19:34,760
Speaker 1: No, I think you're right, Matt. And it makes me

449
00:19:34,800 --> 00:19:38,000
Speaker 1: think of what is it South Korea where they're actually

450
00:19:38,080 --> 00:19:41,399
Speaker 1: more pet strollers that get sold than strollers for kids.

451
00:19:42,119 --> 00:19:45,640
Speaker 2: We haven't lost the lowest replacement rate in the entire world. Yeah,

452
00:19:45,640 --> 00:19:47,680
Speaker 2: in South Korea, I believe it. All right, Just one

453
00:19:47,720 --> 00:19:50,199
Speaker 2: minor word of caution, Chris. While this is truly an

454
00:19:50,200 --> 00:19:53,560
Speaker 2: admirable goal to pay for your daughter's schooling all the

455
00:19:53,560 --> 00:19:56,680
Speaker 2: way out, make sure you're doing this out of having excess,

456
00:19:56,760 --> 00:19:58,840
Speaker 2: right out of having an abundance of cash you've been

457
00:19:58,840 --> 00:20:01,159
Speaker 2: able to save up. We don't want you jeopardizing your

458
00:20:01,200 --> 00:20:04,680
Speaker 2: own financial future in order to ensure that she remains

459
00:20:04,680 --> 00:20:07,480
Speaker 2: student loan debt free. It sounds like that's where you're

460
00:20:07,480 --> 00:20:09,600
Speaker 2: coming from like, I don't think you're like, I don't

461
00:20:09,600 --> 00:20:11,760
Speaker 2: know if we can, but we're going to, even if

462
00:20:11,800 --> 00:20:14,639
Speaker 2: it means that we are living on next to nothing

463
00:20:14,720 --> 00:20:16,800
Speaker 2: for our retirement years. I don't think that's where you're

464
00:20:16,800 --> 00:20:19,480
Speaker 2: coming from. Those weren't the vibes I was picking up on, right.

465
00:20:19,520 --> 00:20:21,399
Speaker 1: But the truth is a lot of folks, Matt, do

466
00:20:21,480 --> 00:20:24,280
Speaker 1: they over prioritize paying for their kids college to the

467
00:20:24,320 --> 00:20:27,480
Speaker 1: detriment of their own financial security, whether that's rolling back

468
00:20:27,560 --> 00:20:30,680
Speaker 1: roth Ira contributions or four one K contributions so they can,

469
00:20:30,880 --> 00:20:33,200
Speaker 1: you know, get the more money into that five twenty

470
00:20:33,240 --> 00:20:35,240
Speaker 1: nine plants so that their kids can graduate debt free.

471
00:20:35,600 --> 00:20:37,800
Speaker 1: But then they might be relying on their kids decades

472
00:20:37,840 --> 00:20:39,880
Speaker 1: down the road because they didn't do enough for themselves

473
00:20:39,880 --> 00:20:42,240
Speaker 1: early on. WE just don't want you to limit your choices,

474
00:20:42,640 --> 00:20:44,880
Speaker 1: even if you're doing this with noble intentions and you've

475
00:20:44,880 --> 00:20:46,520
Speaker 1: done so much for her already. I just don't think

476
00:20:46,560 --> 00:20:49,840
Speaker 1: you have to feel obligated sure to do this, And

477
00:20:49,880 --> 00:20:51,679
Speaker 1: I think it's great that you want to, but just

478
00:20:51,760 --> 00:20:54,520
Speaker 1: make sure you're not like, what is it the lead

479
00:20:54,560 --> 00:20:56,800
Speaker 1: pipe in the bicycle tire man and the spokes.

480
00:20:56,920 --> 00:20:58,119
Speaker 2: I just don't I just want them to do that

481
00:20:58,160 --> 00:21:00,640
Speaker 2: to themselves totally. Yeah. And I would even say too,

482
00:21:00,720 --> 00:21:02,879
Speaker 2: if there is a way that you can get your

483
00:21:02,960 --> 00:21:04,680
Speaker 2: daughter to have some skin in the game, I think

484
00:21:04,720 --> 00:21:06,280
Speaker 2: I would try to find a way to do that

485
00:21:06,320 --> 00:21:09,560
Speaker 2: as well. Like every family has their own expectations as

486
00:21:09,600 --> 00:21:12,359
Speaker 2: to what their expectations are of the kids of parents,

487
00:21:12,400 --> 00:21:14,480
Speaker 2: all that kind of thing. Yeah, but I would hate

488
00:21:14,480 --> 00:21:16,480
Speaker 2: it if your daughter changed her mind a couple of

489
00:21:16,520 --> 00:21:18,280
Speaker 2: years in to vet school. He's like, now I'm going

490
00:21:18,320 --> 00:21:20,879
Speaker 2: to be a podcaster, and you're like, no, don't be

491
00:21:20,960 --> 00:21:23,080
Speaker 2: like Matt and Joe and so. I mean, for that

492
00:21:23,200 --> 00:21:25,520
Speaker 2: very reason is why I've at this point at least

493
00:21:25,520 --> 00:21:27,960
Speaker 2: stopped contributing to five twenty nine accounts for my kids

494
00:21:28,000 --> 00:21:30,639
Speaker 2: because I want to get some seed money in there.

495
00:21:30,680 --> 00:21:32,239
Speaker 2: I want to get the ball rolling. I want that

496
00:21:32,280 --> 00:21:36,520
Speaker 2: to begin to grow. But the ability for them to say, oh,

497
00:21:36,640 --> 00:21:38,840
Speaker 2: have a job in college to offset some of those costs,

498
00:21:38,880 --> 00:21:40,760
Speaker 2: where they have some of that buy in in a

499
00:21:40,840 --> 00:21:43,280
Speaker 2: way that you don't fully realize until you are doing

500
00:21:43,320 --> 00:21:45,640
Speaker 2: something maybe that you don't want to do, like working

501
00:21:45,680 --> 00:21:47,920
Speaker 2: a part time job. I think that is so important.

502
00:21:47,920 --> 00:21:51,399
Speaker 1: We had a discussion about my daughter said or are you

503
00:21:51,440 --> 00:21:53,199
Speaker 1: going to buy my car for me? When I turned sixteen.

504
00:21:53,280 --> 00:21:55,600
Speaker 1: You're like, well, it's funny. Emily was like, oh, yeah,

505
00:21:55,640 --> 00:21:57,320
Speaker 1: we probably will, and I was like, oh no, we won't,

506
00:21:57,560 --> 00:21:58,360
Speaker 1: you know, And so we.

507
00:21:58,320 --> 00:22:00,000
Speaker 2: Have to talk about that now. Now you got to go account.

508
00:22:00,359 --> 00:22:04,360
Speaker 1: Yeah, but it's funny how we just have different expectations.

509
00:22:04,080 --> 00:22:07,000
Speaker 2: And even within the h That's right.

510
00:22:07,080 --> 00:22:08,880
Speaker 1: I bought my car and then I ended up talking

511
00:22:08,920 --> 00:22:10,359
Speaker 1: about it with my daughter later and I was like,

512
00:22:10,400 --> 00:22:12,000
Speaker 1: we'll probably help you out, but I want you to

513
00:22:12,000 --> 00:22:13,000
Speaker 1: also have some skin in the game.

514
00:22:13,040 --> 00:22:15,040
Speaker 2: And I think there's fifty to fifty baby, I'll do

515
00:22:15,080 --> 00:22:16,920
Speaker 2: the match on the car. I mean, I've already we've

516
00:22:16,920 --> 00:22:18,200
Speaker 2: already had started these convers.

517
00:22:18,160 --> 00:22:21,160
Speaker 1: Everybody, everybody has they come down to different different spaces

518
00:22:21,160 --> 00:22:23,439
Speaker 1: on that. But I do think that at least for me,

519
00:22:23,800 --> 00:22:26,159
Speaker 1: I appreciated that car more because I bought it with

520
00:22:26,280 --> 00:22:28,120
Speaker 1: money I earned working at a fast food joint.

521
00:22:28,160 --> 00:22:30,640
Speaker 2: So totally agree. I'm with you man. All right, let's

522
00:22:30,640 --> 00:22:34,800
Speaker 2: talk about Chris's desire to avoid taxes because it came

523
00:22:34,840 --> 00:22:37,240
Speaker 2: in Islands. Yeah, okay, this is like what he's actually

524
00:22:37,240 --> 00:22:39,000
Speaker 2: asking about, not like all the other things that we've

525
00:22:39,040 --> 00:22:41,760
Speaker 2: spouted off so far, but there aren't really any other

526
00:22:41,800 --> 00:22:43,440
Speaker 2: ways of lessening the tax burn that you're going to

527
00:22:43,480 --> 00:22:46,560
Speaker 2: face when you sell these funds. Long term capital gains

528
00:22:46,600 --> 00:22:49,560
Speaker 2: taxes are just the reality that we all face as investors.

529
00:22:49,800 --> 00:22:52,040
Speaker 2: I think a sort of healthy way of thinking about

530
00:22:52,040 --> 00:22:54,359
Speaker 2: it is like as a success tax. It's a literal

531
00:22:54,400 --> 00:22:56,119
Speaker 2: tax but also a successful.

532
00:22:55,800 --> 00:22:59,080
Speaker 1: Yes, and you want to see your investments gain in value.

533
00:22:59,119 --> 00:23:01,360
Speaker 1: But the good news is that the current rates are

534
00:23:01,400 --> 00:23:03,919
Speaker 1: pretty favorable, and so if you sell the proper amount,

535
00:23:03,960 --> 00:23:06,040
Speaker 1: you're only going to pay fifteen percent of the actual

536
00:23:06,119 --> 00:23:09,200
Speaker 1: gain that you experienced. However, if you sell too much

537
00:23:09,200 --> 00:23:11,600
Speaker 1: in a given year, you could see yourself pushed up

538
00:23:11,640 --> 00:23:14,639
Speaker 1: into that twenty percent capital gains bracket. So make sure

539
00:23:14,680 --> 00:23:17,639
Speaker 1: to pay attention to where the rate jumps, which for

540
00:23:17,840 --> 00:23:21,480
Speaker 1: let's assume that you are married and you are filing jointly. Well,

541
00:23:21,480 --> 00:23:24,720
Speaker 1: for you, it's when your taxable income goes above the

542
00:23:25,840 --> 00:23:29,560
Speaker 1: eighty three thousand threshold. There's a line of demarcation which

543
00:23:29,560 --> 00:23:31,879
Speaker 1: I don't know where Chris is, but considering that he's

544
00:23:32,080 --> 00:23:34,080
Speaker 1: saved in a mass so much that he's in one

545
00:23:34,119 --> 00:23:36,200
Speaker 1: fell swoop potentially ready to pay for a bet school

546
00:23:36,240 --> 00:23:37,160
Speaker 1: with he could be there.

547
00:23:37,240 --> 00:23:39,480
Speaker 2: Yeah, they might pretty close. So not to mention, he's

548
00:23:39,480 --> 00:23:41,600
Speaker 2: in the Bay Area not a cheap place to live

549
00:23:41,640 --> 00:23:43,200
Speaker 2: as well, so he might. There's a good chance he's

550
00:23:43,200 --> 00:23:44,480
Speaker 2: a higher earner. That's like middle.

551
00:23:44,240 --> 00:23:47,679
Speaker 1: Class there man exactly in the Bay Area. And you

552
00:23:47,760 --> 00:23:50,439
Speaker 1: asked Chris about selling your stocks, would that count has

553
00:23:50,480 --> 00:23:53,119
Speaker 1: earned income? The answer is no, like what you earned

554
00:23:53,119 --> 00:23:56,080
Speaker 1: from your job is taxed differently than what you've earned

555
00:23:56,080 --> 00:23:59,680
Speaker 1: from those investments. So then going back to your question,

556
00:23:59,720 --> 00:24:01,520
Speaker 1: I guess one more time, can you avoid some of

557
00:24:01,560 --> 00:24:04,240
Speaker 1: that tax? There's only one thing that crossed my mind, Matt,

558
00:24:04,240 --> 00:24:07,240
Speaker 1: one way in which there could be a tax avoidance

559
00:24:07,280 --> 00:24:11,080
Speaker 1: strategy here, which is donating some of the funds that

560
00:24:11,119 --> 00:24:15,119
Speaker 1: you own that have appreciated nicely. So instead of donating

561
00:24:15,440 --> 00:24:17,440
Speaker 1: cash like you might normally do in a given year

562
00:24:17,440 --> 00:24:20,000
Speaker 1: to your donor device fund or to nonprofits of your choice,

563
00:24:20,320 --> 00:24:25,720
Speaker 1: basically give the same amount from appreciated stock and then

564
00:24:25,800 --> 00:24:29,600
Speaker 1: write a check to your daughter school that twenty five

565
00:24:29,600 --> 00:24:31,720
Speaker 1: thousand dollars let's say it's twenty five thousand dollars for instance,

566
00:24:31,720 --> 00:24:33,320
Speaker 1: that you're going to do in a given year. Well,

567
00:24:33,359 --> 00:24:36,600
Speaker 1: that would avoid taxation, saving about thirty seven hundred bucks

568
00:24:36,840 --> 00:24:39,000
Speaker 1: in tax that you otherwise would have paid. I see

569
00:24:39,080 --> 00:24:40,920
Speaker 1: that as a potentially smooth move.

570
00:24:41,080 --> 00:24:43,280
Speaker 2: So it's like a yeah, it's a workaround because guess

571
00:24:43,320 --> 00:24:45,320
Speaker 2: what money is fungible and so the ability for you

572
00:24:45,400 --> 00:24:48,120
Speaker 2: to pay directly and then oh, but we have these

573
00:24:48,119 --> 00:24:50,320
Speaker 2: other accounts over here and we'll donate from those. That's

574
00:24:50,320 --> 00:24:52,080
Speaker 2: a good way. Yeah, I like that. I think the

575
00:24:52,080 --> 00:24:54,960
Speaker 2: other thing that you could consider, Chris is tax loss harvesting.

576
00:24:55,200 --> 00:24:57,720
Speaker 2: So if you sell funds that have gone down in value,

577
00:24:57,800 --> 00:24:59,639
Speaker 2: that could help offset some of the games that you

578
00:24:59,680 --> 00:25:02,080
Speaker 2: realize when you do sell those mutual funds that have

579
00:25:02,119 --> 00:25:05,600
Speaker 2: done well, reducing your tax bill by potentially three thousand

580
00:25:05,640 --> 00:25:08,120
Speaker 2: dollars in a given year, and you can even roll

581
00:25:08,160 --> 00:25:10,840
Speaker 2: those losses into future years as well. You just want

582
00:25:10,840 --> 00:25:13,800
Speaker 2: to make sure that you're not intentionally pursuing crappy investments

583
00:25:13,800 --> 00:25:16,239
Speaker 2: in order to the tax loss service. Of course, that's uh,

584
00:25:16,840 --> 00:25:20,359
Speaker 2: that's the tail wagon the dogs, right. And last, but

585
00:25:20,400 --> 00:25:24,200
Speaker 2: not least, consider talking to a tax expert. You don't

586
00:25:24,240 --> 00:25:26,920
Speaker 2: want to needlessly pay tax that could have been could

587
00:25:26,920 --> 00:25:29,840
Speaker 2: have been avoided when you've got somebody who is able

588
00:25:29,880 --> 00:25:32,040
Speaker 2: to really spend a lot of time with you. They're

589
00:25:32,040 --> 00:25:34,840
Speaker 2: able to look at all of the particulars with you

590
00:25:34,960 --> 00:25:36,240
Speaker 2: and what you've got going on.

591
00:25:36,200 --> 00:25:37,960
Speaker 1: Right, I think that can be a frugal or cheap

592
00:25:38,000 --> 00:25:39,919
Speaker 1: Matt And I know maybe like twenty five year old

593
00:25:39,960 --> 00:25:41,840
Speaker 1: Joel would have said, there's no way I'm paying six

594
00:25:41,920 --> 00:25:44,280
Speaker 1: hundred bucks for tax help from so I'm going to

595
00:25:44,320 --> 00:25:46,080
Speaker 1: figure this out on my own. I think when the

596
00:25:46,080 --> 00:25:48,800
Speaker 1: stakes get high enough, you could be talking about six

597
00:25:48,880 --> 00:25:52,080
Speaker 1: thousand or sixty thousand dollars in potential taxation that you

598
00:25:52,119 --> 00:25:54,840
Speaker 1: can't avoid if if you go through the right hoops

599
00:25:54,880 --> 00:25:57,119
Speaker 1: and if you know what you're doing, like simple strategies

600
00:25:57,160 --> 00:26:00,000
Speaker 1: like that daft thing I mentioned, that's something that's off

601
00:26:00,080 --> 00:26:02,920
Speaker 1: the radar of most people, and it's literally just kind

602
00:26:02,920 --> 00:26:05,000
Speaker 1: of a couple extra steps to save potentially a lot

603
00:26:05,040 --> 00:26:08,119
Speaker 1: of money in taxation. So yeah, I would Chris at

604
00:26:08,200 --> 00:26:10,919
Speaker 1: least consider hiring a tax expert since it sounds like

605
00:26:11,200 --> 00:26:12,520
Speaker 1: there's a lot of money on the line here and

606
00:26:12,520 --> 00:26:14,919
Speaker 1: a lot of potential tax that you could be faced with.

607
00:26:15,200 --> 00:26:17,320
Speaker 2: And Chris didn't share how old he is, but I'm

608
00:26:17,359 --> 00:26:20,040
Speaker 2: pretty sure he's not twenty. This isn't twenty five year old, right, right,

609
00:26:20,040 --> 00:26:22,240
Speaker 2: But this is Chris on the other twenty five year.

610
00:26:22,119 --> 00:26:24,000
Speaker 1: Olds don't have that much money to pay for somebody's at.

611
00:26:23,920 --> 00:26:26,800
Speaker 2: School exactly, and he sounds like he has a twenty

612
00:26:26,800 --> 00:26:29,359
Speaker 2: five year old. Yea, Chris, we appreciate you listening to

613
00:26:29,359 --> 00:26:32,040
Speaker 2: the show, Joel. Let's hear from a listener who is

614
00:26:32,040 --> 00:26:34,600
Speaker 2: in the unique position of receiving a check from her

615
00:26:34,640 --> 00:26:36,879
Speaker 2: four oh one K in the mail at the end

616
00:26:36,920 --> 00:26:37,320
Speaker 2: of the year.

617
00:26:37,640 --> 00:26:40,040
Speaker 6: Hey guys, this is Nina from Florida. First of all,

618
00:26:40,119 --> 00:26:41,800
Speaker 6: thank you so much for all the work you put

619
00:26:41,800 --> 00:26:44,480
Speaker 6: into the podcast. It has really helped me in my

620
00:26:44,560 --> 00:26:48,000
Speaker 6: personal finance education. Recently, you've had a couple four oh

621
00:26:48,040 --> 00:26:50,840
Speaker 6: one K questions and I'd like to add mine to

622
00:26:50,920 --> 00:26:54,040
Speaker 6: the mix. After finding you guys, I've made efforts to

623
00:26:54,160 --> 00:26:56,679
Speaker 6: max my wrath four oh one K, but for the

624
00:26:56,680 --> 00:26:59,120
Speaker 6: past couple of years I've actually gotten a check back

625
00:26:59,400 --> 00:27:01,280
Speaker 6: due to my company me failing the four oh one

626
00:27:01,320 --> 00:27:04,639
Speaker 6: K non discrimination test. I know that all employees are

627
00:27:04,680 --> 00:27:07,920
Speaker 6: auto enrolled, and so I'm assuming that many are opting out.

628
00:27:08,720 --> 00:27:10,920
Speaker 6: This year, I decided not to max out my four

629
00:27:10,920 --> 00:27:13,560
Speaker 6: oh one K, and instead I allocated funds to max

630
00:27:13,600 --> 00:27:16,040
Speaker 6: out my backdoor wroth and then also invest in a

631
00:27:16,080 --> 00:27:19,400
Speaker 6: taxable brokerage account. What would you do in this situation?

632
00:27:19,640 --> 00:27:21,640
Speaker 6: And is there any way to know in advance what

633
00:27:21,680 --> 00:27:24,879
Speaker 6: the true max actually is year to year? Thank you

634
00:27:24,920 --> 00:27:25,320
Speaker 6: so much?

635
00:27:25,800 --> 00:27:28,760
Speaker 2: Oh, Matt, more four one k stuff going on here? Hey?

636
00:27:28,800 --> 00:27:31,760
Speaker 2: Four one k's that's the that's the path to millionaire

637
00:27:31,760 --> 00:27:32,760
Speaker 2: status for most Americans.

638
00:27:32,760 --> 00:27:35,840
Speaker 1: I mean it certainly, it certainly can be, and I

639
00:27:35,880 --> 00:27:38,000
Speaker 1: think it maybe can be for Nina too, But there's

640
00:27:38,040 --> 00:27:39,919
Speaker 1: some shenanigans going on here that we have to get

641
00:27:39,920 --> 00:27:40,440
Speaker 1: to the bottom of.

642
00:27:40,560 --> 00:27:41,320
Speaker 2: It sounds like.

643
00:27:41,240 --> 00:27:43,440
Speaker 1: It, and we we've already we already have a retirement

644
00:27:43,480 --> 00:27:46,760
Speaker 1: account alphabet soup in this country. I think it just

645
00:27:46,960 --> 00:27:49,000
Speaker 1: is generally confusing to people, and it feels like you

646
00:27:49,000 --> 00:27:50,440
Speaker 1: have to listen to one hundred episodes of How to

647
00:27:50,480 --> 00:27:52,800
Speaker 1: Money before you really have a full grip on all

648
00:27:52,840 --> 00:27:56,399
Speaker 1: the different accounts and what their contribution limits are and

649
00:27:57,760 --> 00:28:00,960
Speaker 1: how those contribution limits actually change regularly. And then certain

650
00:28:01,000 --> 00:28:03,800
Speaker 1: plans have exceptions, and certain plans, Oh, if you make

651
00:28:03,800 --> 00:28:06,080
Speaker 1: over a certain threshold, wow, you can't contribute.

652
00:28:05,600 --> 00:28:08,520
Speaker 2: To that anymore. And then the way you might.

653
00:28:08,359 --> 00:28:10,280
Speaker 1: Actually be able to fund a backdoor wrath and contribute

654
00:28:10,280 --> 00:28:12,359
Speaker 1: more than the contribution limit, and so it can be

655
00:28:12,440 --> 00:28:16,840
Speaker 1: really frustrating, I think as a layperson to figure out

656
00:28:16,880 --> 00:28:19,359
Speaker 1: all the different details going on inside some of these

657
00:28:19,400 --> 00:28:23,040
Speaker 1: retirement accounts. And yet another funky rule that can mess

658
00:28:23,119 --> 00:28:27,000
Speaker 1: with your retirement goals is non discrimination testing. That's what

659
00:28:27,119 --> 00:28:28,280
Speaker 1: Meen is asking about this place.

660
00:28:28,359 --> 00:28:31,400
Speaker 2: Yep, yep, yet another acronym to add to the mix.

661
00:28:31,600 --> 00:28:34,560
Speaker 2: Ndt's let's dig into it. There are a bunch of

662
00:28:34,640 --> 00:28:37,400
Speaker 2: tests that for wing K plans go through each year,

663
00:28:37,440 --> 00:28:39,920
Speaker 2: and these are required by the government, and there are

664
00:28:39,960 --> 00:28:42,920
Speaker 2: ways around these tests that typically involve the employer having

665
00:28:43,000 --> 00:28:46,680
Speaker 2: a base level match or contribution amount for all employees.

666
00:28:47,200 --> 00:28:49,240
Speaker 2: And so the basic goal is to ensure fairness. So

667
00:28:49,320 --> 00:28:52,040
Speaker 2: let's say, for instance, you are there's a situation where

668
00:28:52,080 --> 00:28:54,720
Speaker 2: the owners of the plan, the high income earners, the

669
00:28:55,520 --> 00:28:59,720
Speaker 2: high the highly compensated individuals or employees at your place

670
00:28:59,760 --> 00:29:01,600
Speaker 2: of war, they're using it to the max. But then

671
00:29:01,600 --> 00:29:05,240
Speaker 2: you've got other employees, uh, and they are neglecting it completely.

672
00:29:05,560 --> 00:29:07,880
Speaker 2: That would be a situation that would run a foul

673
00:29:07,960 --> 00:29:10,360
Speaker 2: of the I R S H. But this also stinks though,

674
00:29:10,400 --> 00:29:12,800
Speaker 2: because I mean you are paying a price, you're not

675
00:29:12,840 --> 00:29:15,520
Speaker 2: being able to contribute as much as you would like

676
00:29:15,960 --> 00:29:18,240
Speaker 2: because of the fact that your fellow employees aren't keen

677
00:29:18,680 --> 00:29:21,200
Speaker 2: on investing for their future. So it's something that we

678
00:29:21,240 --> 00:29:22,760
Speaker 2: haven't I don't know if we've ever talked about this

679
00:29:23,280 --> 00:29:27,360
Speaker 2: before on the show, but I don't. I also simultaneous rare. Typically, Yeah,

680
00:29:27,360 --> 00:29:29,360
Speaker 2: this is a little bit more of a nerdy sort

681
00:29:29,400 --> 00:29:32,360
Speaker 2: of conversation. But for a lot of small business owners

682
00:29:32,360 --> 00:29:34,120
Speaker 2: out there, I don't want them to also freak out

683
00:29:34,320 --> 00:29:37,880
Speaker 2: because typically this isn't something that comes under scrutiny unless

684
00:29:37,960 --> 00:29:40,920
Speaker 2: you are unless your business is audited, at which point

685
00:29:40,920 --> 00:29:43,360
Speaker 2: you are required to provide that testing to the I

686
00:29:43,520 --> 00:29:46,080
Speaker 2: R S. And Joel. I'm proud to say that a

687
00:29:46,080 --> 00:29:49,240
Speaker 2: hount of money aka poor not poor, has never been audited,

688
00:29:49,560 --> 00:29:52,640
Speaker 2: aren't you glad? I'm thankful. Well, even if we were audited,

689
00:29:52,920 --> 00:29:53,720
Speaker 2: we would also be in the.

690
00:29:53,720 --> 00:29:55,680
Speaker 1: Clear because not on wood Right now, Max, just to

691
00:29:56,560 --> 00:29:58,560
Speaker 1: that never happens, because I feel like you're drinking us.

692
00:29:58,640 --> 00:30:02,840
Speaker 2: No, there we go. Yeah, as our employeer, we match

693
00:30:02,920 --> 00:30:04,320
Speaker 2: equally for both you and I.

694
00:30:04,440 --> 00:30:06,360
Speaker 1: Yeah, so I mean there's literally only two people here,

695
00:30:06,360 --> 00:30:08,240
Speaker 1: so it does become easier.

696
00:30:08,320 --> 00:30:08,840
Speaker 2: We're good.

697
00:30:09,040 --> 00:30:12,000
Speaker 1: Yeah, and there's reasoning behind this. I think the IRS

698
00:30:12,040 --> 00:30:15,360
Speaker 1: wants to make sure that that highly compensated in individuals

699
00:30:15,400 --> 00:30:18,160
Speaker 1: and the owners of the business aren't like getting massive

700
00:30:18,360 --> 00:30:23,120
Speaker 1: money into tax advantaged accounts while not really informing or

701
00:30:23,280 --> 00:30:26,479
Speaker 1: allowing other people to participate in the plan, making it

702
00:30:26,480 --> 00:30:30,520
Speaker 1: difficult and therefore making it kind of a tax windfall

703
00:30:30,600 --> 00:30:34,719
Speaker 1: for some and offering zero help on the retirement savings

704
00:30:34,720 --> 00:30:37,160
Speaker 1: front to other people who work for the business. And

705
00:30:37,200 --> 00:30:39,160
Speaker 1: so your employer has to make sure that the four

706
00:30:39,240 --> 00:30:42,280
Speaker 1: H one K plan is essentially useful for all employees

707
00:30:42,400 --> 00:30:45,720
Speaker 1: and not just a tax shelter for highly compensated employees.

708
00:30:45,720 --> 00:30:48,360
Speaker 1: And that's actually a little term that the IRS uses.

709
00:30:48,560 --> 00:30:51,200
Speaker 1: And so your employer actually failed the test and they

710
00:30:51,240 --> 00:30:54,160
Speaker 1: have to take the money back out and send it

711
00:30:54,160 --> 00:30:57,000
Speaker 1: to you in a check. Fortunately, you've been contributing to

712
00:30:57,040 --> 00:30:59,320
Speaker 1: the WROTH for on K. Great job on that front.

713
00:30:59,720 --> 00:31:01,600
Speaker 1: But folks who have this happen, if they've been contributing

714
00:31:01,640 --> 00:31:04,400
Speaker 1: to a traditional for one K, are actually going to

715
00:31:04,400 --> 00:31:08,000
Speaker 1: find themselves having to pay taxes that they owe because

716
00:31:08,040 --> 00:31:09,800
Speaker 1: of this too. So they're going to get an additional

717
00:31:09,840 --> 00:31:12,280
Speaker 1: form that says, hey, next year, when you pay taxes,

718
00:31:12,400 --> 00:31:15,440
Speaker 1: you're going to owe the irs extra money because of this,

719
00:31:16,080 --> 00:31:19,680
Speaker 1: and the only way you and other highly compensated employees,

720
00:31:19,760 --> 00:31:21,360
Speaker 1: and by the way, that's to find as someone who

721
00:31:21,360 --> 00:31:23,360
Speaker 1: makes one hundred and fifty thousand dollars or more. The

722
00:31:23,440 --> 00:31:25,960
Speaker 1: only way you guys can avoid this in the future

723
00:31:26,360 --> 00:31:28,959
Speaker 1: is by encouraging other workers to participate, which sounds kind

724
00:31:29,000 --> 00:31:31,800
Speaker 1: of weird because then you're going around, You're like, Sheila,

725
00:31:31,920 --> 00:31:33,640
Speaker 1: have you been contributing to your four one K? You

726
00:31:33,680 --> 00:31:35,280
Speaker 1: really should say for your.

727
00:31:35,160 --> 00:31:37,920
Speaker 2: Future, Hey, let's all kick social Security do the CURRG right, Yeah,

728
00:31:37,920 --> 00:31:40,080
Speaker 2: And that's just an awkward conversation to have, But that

729
00:31:40,200 --> 00:31:43,080
Speaker 2: is one way, truly, if everyone had the money listeners, right,

730
00:31:43,120 --> 00:31:46,400
Speaker 2: money listeners, that's like normal fodder for conversation. You're right,

731
00:31:46,440 --> 00:31:46,840
Speaker 2: you're right.

732
00:31:47,120 --> 00:31:49,880
Speaker 1: The only other way I think to truly avoid this

733
00:31:49,960 --> 00:31:52,040
Speaker 1: happening in the future is to enroll in a safe

734
00:31:52,080 --> 00:31:55,880
Speaker 1: Harbor for one K plan if your employer chooses to

735
00:31:56,400 --> 00:31:58,959
Speaker 1: essentially make some changes to the plan which makes it

736
00:31:58,960 --> 00:32:00,000
Speaker 1: more inherently fair.

737
00:32:00,120 --> 00:32:03,080
Speaker 2: Nature exactly, which, again, though, that is up to the employer.

738
00:32:03,120 --> 00:32:05,600
Speaker 2: It's not like it's an option you can choose. It's

739
00:32:05,680 --> 00:32:08,160
Speaker 2: like roth versus traditional for owing K. This it's not

740
00:32:08,440 --> 00:32:10,080
Speaker 2: makes me think of we're just talking about our business

741
00:32:10,160 --> 00:32:12,760
Speaker 2: or whatever. It's like, we are formed as an LLC,

742
00:32:12,920 --> 00:32:15,640
Speaker 2: but we elect to be taxed as an S corporation.

743
00:32:15,920 --> 00:32:17,960
Speaker 2: This isn't some sort of election that you can check

744
00:32:17,960 --> 00:32:20,280
Speaker 2: a box for to opt into the safe.

745
00:32:20,080 --> 00:32:22,640
Speaker 1: Heart, right, you'd have to twist some arms at the top.

746
00:32:22,960 --> 00:32:25,360
Speaker 2: And so is there a way to know in advance?

747
00:32:25,440 --> 00:32:28,280
Speaker 2: Sadly know, Nina. I think one thing you could do

748
00:32:28,400 --> 00:32:31,120
Speaker 2: is just mention this to your superiors. Mention this to

749
00:32:31,240 --> 00:32:33,280
Speaker 2: HR and see if this is something that they're trying

750
00:32:33,280 --> 00:32:35,520
Speaker 2: to remedy. Because my guests is that the higher ups

751
00:32:35,520 --> 00:32:38,360
Speaker 2: they're at the company would also like to contribute more

752
00:32:38,600 --> 00:32:41,400
Speaker 2: to their tax advantage retirement accounts, and so they would

753
00:32:41,400 --> 00:32:44,040
Speaker 2: have a vested interest in either choosing that safe harbor

754
00:32:44,120 --> 00:32:47,760
Speaker 2: plan or just finding ways to help incentivize, help encourage

755
00:32:48,080 --> 00:32:50,840
Speaker 2: their employees there at the company to increase their contribution.

756
00:32:50,920 --> 00:32:53,840
Speaker 1: And they probably don't want the best employees of the company,

757
00:32:53,840 --> 00:32:56,840
Speaker 1: who might be the most highly compensated employees. Matt to

758
00:32:56,920 --> 00:32:59,400
Speaker 1: be kind of frustrated that this perk that's being offered

759
00:32:59,520 --> 00:33:01,640
Speaker 1: that they can't take advantage to the max either, because

760
00:33:01,640 --> 00:33:03,320
Speaker 1: that makes them anti competitive.

761
00:33:02,880 --> 00:33:04,920
Speaker 2: Exactly like Nina. Like, I mean, there's a chance that

762
00:33:05,000 --> 00:33:07,000
Speaker 2: Nina's thinking, all right, well, I get paid well, but

763
00:33:07,000 --> 00:33:09,800
Speaker 2: if there's another company right, same salary, but the benefits

764
00:33:09,800 --> 00:33:11,920
Speaker 2: are just completely off the chain, and guess what the

765
00:33:11,960 --> 00:33:14,600
Speaker 2: match is killer? Not only do I have unlimited days off,

766
00:33:14,640 --> 00:33:17,200
Speaker 2: but they also enforce it. There's all these other It's

767
00:33:17,200 --> 00:33:18,840
Speaker 2: just one of those things that a company wants to

768
00:33:19,040 --> 00:33:19,960
Speaker 2: not fall by the way.

769
00:33:19,800 --> 00:33:22,680
Speaker 1: Side, right well, And I think too, there are ways

770
00:33:22,680 --> 00:33:24,720
Speaker 1: that the company can change things. Maybe they can offer

771
00:33:24,720 --> 00:33:27,280
Speaker 1: a better match. Maybe they can just communicate better about

772
00:33:27,280 --> 00:33:29,960
Speaker 1: the auto enrollment procedure, because Nina said, pretty sure, we

773
00:33:30,000 --> 00:33:31,600
Speaker 1: have an auto en roll, and I guess people are

774
00:33:31,640 --> 00:33:34,520
Speaker 1: ditching they're not doing it. Maybe it's literally as simple

775
00:33:34,840 --> 00:33:38,640
Speaker 1: as having some sort of better HR communication to employees

776
00:33:38,680 --> 00:33:41,400
Speaker 1: as the onboarding process is happening, so that more people

777
00:33:41,440 --> 00:33:45,120
Speaker 1: elect to stay remain invested inside the four oh one

778
00:33:45,200 --> 00:33:48,000
Speaker 1: K And if they're contributing a decent chunk of their

779
00:33:48,000 --> 00:33:50,880
Speaker 1: salary from the get go, maybe everyone can contribute exactly

780
00:33:50,920 --> 00:33:53,360
Speaker 1: how much they want to their retirement accounts. So what

781
00:33:53,400 --> 00:33:55,600
Speaker 1: should you do at the end of the day. I mean,

782
00:33:55,680 --> 00:33:57,960
Speaker 1: we think the route you're taking makes sense. Ideally you'd

783
00:33:58,000 --> 00:34:00,600
Speaker 1: be doing the backdoor roth. You'd axing out the WROTH

784
00:34:00,600 --> 00:34:03,400
Speaker 1: four O one K two but contributing less to your

785
00:34:03,400 --> 00:34:06,080
Speaker 1: WROTH four on K and more to your taxable brokerage account.

786
00:34:06,200 --> 00:34:08,600
Speaker 1: I think it's a reasonable choice matter. If it were me,

787
00:34:08,760 --> 00:34:10,400
Speaker 1: I think I would keep maxing out the WROTH for

788
00:34:10,560 --> 00:34:13,200
Speaker 1: one K in hopes that the plan doesn't fail the

789
00:34:13,200 --> 00:34:15,520
Speaker 1: non discrimination test in the future.

790
00:34:15,200 --> 00:34:17,440
Speaker 2: Maybe they get their act together. Yeah for twenty twenty.

791
00:34:17,280 --> 00:34:19,319
Speaker 1: Four, Yeah, and then any funds that were sent back,

792
00:34:19,400 --> 00:34:22,279
Speaker 1: I would funnel it into the brokerage account. Then, you know,

793
00:34:22,280 --> 00:34:24,080
Speaker 1: we still want you to get every dollar you can

794
00:34:24,200 --> 00:34:27,560
Speaker 1: into Wroth vehicles with the hopes that your company's plan

795
00:34:27,719 --> 00:34:29,920
Speaker 1: is going to figure this out and then allow for

796
00:34:29,960 --> 00:34:32,839
Speaker 1: those contributions to remain in place. It's a frustrating thing

797
00:34:32,880 --> 00:34:35,120
Speaker 1: to be like, oh, I've done the right thing and

798
00:34:35,160 --> 00:34:36,760
Speaker 1: then get money kicked back and you're.

799
00:34:36,640 --> 00:34:38,480
Speaker 2: Like, because, well, there's what do I do now? And

800
00:34:38,480 --> 00:34:40,560
Speaker 2: there's a temptation maybe even at that point, to not

801
00:34:40,680 --> 00:34:43,320
Speaker 2: invest it, because then it's almost like this unexpected windfall

802
00:34:43,440 --> 00:34:46,400
Speaker 2: maybe end up blowing it. And the other super annoying

803
00:34:46,440 --> 00:34:48,080
Speaker 2: part of this two Nina, and I totally get this,

804
00:34:48,360 --> 00:34:50,319
Speaker 2: or this is how I'd be feeling about it, is

805
00:34:50,320 --> 00:34:52,319
Speaker 2: that I'm not investing at the beginning of the year

806
00:34:52,719 --> 00:34:55,680
Speaker 2: like I would naturally want to as because basically you're

807
00:34:55,719 --> 00:34:58,120
Speaker 2: a year behind and you're missing out on possible gains

808
00:34:58,160 --> 00:35:00,200
Speaker 2: that the market has experienced over that period of time

809
00:35:00,239 --> 00:35:02,319
Speaker 2: as well. So it's not like a deal breaker, it's

810
00:35:02,320 --> 00:35:05,200
Speaker 2: just really annoying. From an employer's stance. I think throughut

811
00:35:05,239 --> 00:35:07,040
Speaker 2: she's taking it's pretty solid. Yeah, she wants to keep

812
00:35:07,200 --> 00:35:09,239
Speaker 2: trying to max the wroth farol and K great and

813
00:35:09,320 --> 00:35:11,440
Speaker 2: if the kickback happens, put it in your taxable brokerage

814
00:35:11,440 --> 00:35:13,879
Speaker 2: account then. But it's just kind of one of those

815
00:35:14,200 --> 00:35:17,719
Speaker 2: idiosyncrasies of certain foural one K plans that she is

816
00:35:17,880 --> 00:35:20,160
Speaker 2: falling victim to and it's not fun. All right, matt

817
00:35:20,160 --> 00:35:21,920
Speaker 2: We got more to get to, including we're gonna talk

818
00:35:21,920 --> 00:35:25,760
Speaker 2: about a type of insurance it's highly underrated that almost

819
00:35:25,760 --> 00:35:27,600
Speaker 2: nobody thinks about. We'll talk about that and more right

820
00:35:27,680 --> 00:35:37,640
Speaker 2: after this. All right, man, we are back from the

821
00:35:37,719 --> 00:35:40,520
Speaker 2: break and it is now time for the Facebook Question

822
00:35:40,640 --> 00:35:43,800
Speaker 2: of the Week, which is from Matthew. He writes, I

823
00:35:43,880 --> 00:35:47,640
Speaker 2: have had short term and long term disability from my employer.

824
00:35:47,840 --> 00:35:50,560
Speaker 2: The short term disability is about thirty two dollars a month.

825
00:35:50,680 --> 00:35:54,040
Speaker 2: The long term disability is twelve dollars a month. Is

826
00:35:54,120 --> 00:35:57,160
Speaker 2: short and long term disability worth? It is one better

827
00:35:57,239 --> 00:36:00,480
Speaker 2: than the other. It's open enrollment time and my job,

828
00:36:00,640 --> 00:36:03,719
Speaker 2: so I'm just looking at my options. Jill. We are

829
00:36:03,760 --> 00:36:06,160
Speaker 2: in open enrollment season. That's true. It's time to think

830
00:36:06,200 --> 00:36:08,279
Speaker 2: about your health care plan. It's time to think about

831
00:36:08,320 --> 00:36:10,880
Speaker 2: which one makes the most sense. On November first is

832
00:36:11,000 --> 00:36:15,239
Speaker 2: the start date for open enrollment over on healthcare dot gov.

833
00:36:15,440 --> 00:36:18,640
Speaker 2: But there are other choices besides the big one healthcare

834
00:36:18,960 --> 00:36:21,560
Speaker 2: that need to be made during open enrollment as well.

835
00:36:21,840 --> 00:36:26,560
Speaker 2: Like Matthew's question about employer provided disability insurance, employers, they

836
00:36:26,640 --> 00:36:29,319
Speaker 2: often offer a little bit of life for a little

837
00:36:29,360 --> 00:36:32,040
Speaker 2: bit of disability coverage, just as a nice little perk,

838
00:36:32,400 --> 00:36:36,000
Speaker 2: but then they allow you to purchase more if you

839
00:36:36,080 --> 00:36:41,400
Speaker 2: so choose. Disability insurance specifically, long term disability is highly underrated,

840
00:36:41,560 --> 00:36:43,800
Speaker 2: and a big reason for that is because the stats

841
00:36:43,880 --> 00:36:47,200
Speaker 2: show that one in four people will become disabled during

842
00:36:47,280 --> 00:36:49,960
Speaker 2: their working life. We often talk about life insurance and

843
00:36:50,000 --> 00:36:52,479
Speaker 2: how that's something that you need to get in place.

844
00:36:52,520 --> 00:36:54,960
Speaker 2: But because one hundred percent of people die maat that

845
00:36:55,120 --> 00:36:58,600
Speaker 2: is true. But the likelihood of you being disabled and

846
00:36:58,640 --> 00:37:00,279
Speaker 2: not being able to earn an income to be able

847
00:37:00,280 --> 00:37:02,120
Speaker 2: to provide for your family or your loved ones, that's

848
00:37:02,200 --> 00:37:06,040
Speaker 2: a real possibility. So for you, Matthew, it's great that

849
00:37:06,120 --> 00:37:08,239
Speaker 2: your employer is offering this, but we do want you

850
00:37:08,320 --> 00:37:10,960
Speaker 2: to think twice before you click to buy.

851
00:37:11,120 --> 00:37:13,880
Speaker 1: Yeah, First, you might have enough coverage, right if your

852
00:37:13,920 --> 00:37:16,680
Speaker 1: employer offers a little bit of each type, short term

853
00:37:16,719 --> 00:37:19,880
Speaker 1: and long term disability for free, that combined with savings

854
00:37:19,960 --> 00:37:21,840
Speaker 1: you built up, like hey, you might not need anything

855
00:37:21,920 --> 00:37:25,400
Speaker 1: beyond those two things. And then second, you might actually

856
00:37:25,400 --> 00:37:28,800
Speaker 1: find more flexible and more affordable coverage by shopping on

857
00:37:28,880 --> 00:37:31,759
Speaker 1: the open market. Makes me think, matt when I was

858
00:37:32,120 --> 00:37:36,200
Speaker 1: working for a W two wage with a traditional employer

859
00:37:36,719 --> 00:37:41,279
Speaker 1: and they offered a small amount of employer provided life

860
00:37:41,320 --> 00:37:44,560
Speaker 1: insurance during open enrollment, and I can opt for more,

861
00:37:45,080 --> 00:37:47,520
Speaker 1: but I never opted to buy more because it was

862
00:37:47,520 --> 00:37:50,279
Speaker 1: actually more costly than me going out and shopping for

863
00:37:50,400 --> 00:37:53,440
Speaker 1: my own policy on the open market. So that's typically

864
00:37:53,480 --> 00:37:56,720
Speaker 1: true unless you have let's say, meaningful pre existing conditions,

865
00:37:56,760 --> 00:38:00,480
Speaker 1: and maybe you're unensurable, then maybe getting your coverage through

866
00:38:00,480 --> 00:38:02,600
Speaker 1: your employer is the only our best way for you,

867
00:38:03,320 --> 00:38:06,000
Speaker 1: but the long term disability. It's only going to cost

868
00:38:06,360 --> 00:38:09,120
Speaker 1: Matthew twelve dollars a month, he said, Man, you can

869
00:38:09,160 --> 00:38:11,040
Speaker 1: shop the open market, but you're probably not gonna beat that.

870
00:38:11,960 --> 00:38:13,400
Speaker 2: So it sounds like a pretty good deal.

871
00:38:13,320 --> 00:38:15,680
Speaker 1: Right, You probably want to option that, and you know,

872
00:38:16,160 --> 00:38:18,480
Speaker 1: if you're looking to shop more or get more interns

873
00:38:18,520 --> 00:38:20,600
Speaker 1: on the open market, go to a site like policy genius.

874
00:38:20,840 --> 00:38:23,120
Speaker 1: Depending on your income and the policy you choose, it's

875
00:38:23,239 --> 00:38:25,520
Speaker 1: likely get to cost between like one hundred and five

876
00:38:25,640 --> 00:38:27,760
Speaker 1: hundred dollars a month. That's a lot more than twelve.

877
00:38:28,440 --> 00:38:30,480
Speaker 1: And so this sounds like it's a good deal. But

878
00:38:30,840 --> 00:38:33,640
Speaker 1: here's the potential downside of this. You likely won't be

879
00:38:33,680 --> 00:38:35,839
Speaker 1: able to take this policy with you if you leave

880
00:38:35,880 --> 00:38:38,920
Speaker 1: this job. So yeah, if you do decide to leave,

881
00:38:39,000 --> 00:38:42,080
Speaker 1: if you find greener pastures somewhere else, you're gonna have

882
00:38:42,120 --> 00:38:44,600
Speaker 1: to pony up for your own policy at that point.

883
00:38:44,960 --> 00:38:46,839
Speaker 1: So just recognize that that it's going to be great

884
00:38:46,920 --> 00:38:49,799
Speaker 1: while you're currently employed with this company, but if at

885
00:38:49,880 --> 00:38:52,200
Speaker 1: some point that stops being the case, you might have

886
00:38:52,280 --> 00:38:54,080
Speaker 1: to fork over a bunch of money to get your own.

887
00:38:54,120 --> 00:38:55,959
Speaker 2: Totally, and just make sure to look at the fine

888
00:38:56,000 --> 00:38:58,120
Speaker 2: print as well, because different policies are going to have

889
00:38:58,239 --> 00:39:01,040
Speaker 2: different caps, they're going to have different reales requirements. You

890
00:39:01,120 --> 00:39:03,239
Speaker 2: want to look at something like the benefit period as well,

891
00:39:03,280 --> 00:39:05,440
Speaker 2: which is how long. Let's say we're talking about long

892
00:39:05,560 --> 00:39:08,840
Speaker 2: term long term disability insurance. There's a big difference in

893
00:39:08,920 --> 00:39:11,359
Speaker 2: the cost of the plan if the benefit is only

894
00:39:11,400 --> 00:39:14,120
Speaker 2: two years versus if it is going to pay benefits

895
00:39:14,200 --> 00:39:16,879
Speaker 2: for your entire life. Yeah. So obviously though, that one's

896
00:39:16,880 --> 00:39:17,920
Speaker 2: going to be more expensive, right.

897
00:39:18,120 --> 00:39:20,279
Speaker 1: Oh, it's the same thing of whole life versus term life, right,

898
00:39:20,320 --> 00:39:22,040
Speaker 1: And there's a reason that term life is so much

899
00:39:22,080 --> 00:39:23,800
Speaker 1: cheaper because it's not covering.

900
00:39:23,600 --> 00:39:26,320
Speaker 2: You're looking at a set amount of time, Yeah.

901
00:39:26,280 --> 00:39:28,680
Speaker 1: Until you're ninety five. It's usually covering you for twenty

902
00:39:28,800 --> 00:39:31,640
Speaker 1: or thirty years from the time you're forty to sixties.

903
00:39:31,719 --> 00:39:33,960
Speaker 2: Yeah. Elimination period is another term to keep in mind

904
00:39:34,000 --> 00:39:35,480
Speaker 2: as well. That's the period of time that has to

905
00:39:35,640 --> 00:39:39,600
Speaker 2: elapse before the benefits kick in. Essentially, that's the period

906
00:39:39,600 --> 00:39:41,239
Speaker 2: of time that you are out there on your own.

907
00:39:41,680 --> 00:39:44,320
Speaker 2: Of course, the longer you wait, the less your monthly

908
00:39:44,360 --> 00:39:46,439
Speaker 2: premiums are going to be, but having the right kinds

909
00:39:46,440 --> 00:39:48,480
Speaker 2: of insurance is crucial. So I think this is great

910
00:39:48,520 --> 00:39:51,160
Speaker 2: that you are considering this, Matthew, where you're looking to

911
00:39:51,200 --> 00:39:53,360
Speaker 2: protect the financial life that you've built for yourself, but

912
00:39:53,440 --> 00:39:56,600
Speaker 2: it can also become prohibitively expensive to ensure yourself to

913
00:39:56,680 --> 00:39:58,680
Speaker 2: the max on every single front. So if you're looking,

914
00:39:58,880 --> 00:40:00,680
Speaker 2: if you're just going down the and lists and you

915
00:40:00,800 --> 00:40:03,960
Speaker 2: just at like check check, I'm gonna got all the insurances,

916
00:40:03,960 --> 00:40:05,640
Speaker 2: I'm gonna get that. I'm going to get that as well.

917
00:40:05,719 --> 00:40:07,320
Speaker 1: But now I can't pay my mortgage. Map you're not

918
00:40:07,360 --> 00:40:09,320
Speaker 1: going to have, yeah, a whole lot left at the

919
00:40:09,600 --> 00:40:11,600
Speaker 1: at the end of the month. Long term disability, it's

920
00:40:11,600 --> 00:40:13,640
Speaker 1: it's a more important product in our opinion, and that's

921
00:40:13,680 --> 00:40:18,760
Speaker 1: because a simple, robust emergency fund can often be sufficient

922
00:40:18,920 --> 00:40:22,279
Speaker 1: enough and that can carry you through the period of

923
00:40:22,320 --> 00:40:25,440
Speaker 1: time that a short term disability event would create in

924
00:40:25,520 --> 00:40:28,160
Speaker 1: your life in a similar way that that elimination period

925
00:40:28,600 --> 00:40:31,759
Speaker 1: or the waiting period before the insurance kicks in for

926
00:40:31,840 --> 00:40:34,920
Speaker 1: the long term disability. In that same in the same way,

927
00:40:35,040 --> 00:40:37,240
Speaker 1: you want your emergency fund to be able to basically

928
00:40:37,320 --> 00:40:40,160
Speaker 1: bridge you through those rough waters. That's exactly right. And

929
00:40:40,239 --> 00:40:43,319
Speaker 1: I think that that's why we just value short term

930
00:40:43,360 --> 00:40:47,280
Speaker 1: disability coverage so much less is because that is something

931
00:40:47,360 --> 00:40:50,160
Speaker 1: we think is more self insurable, and maybe you need

932
00:40:50,200 --> 00:40:52,160
Speaker 1: it for a year until you've been able to ramp

933
00:40:52,280 --> 00:40:54,560
Speaker 1: up your emergency fund to the point where you can

934
00:40:54,719 --> 00:40:55,320
Speaker 1: self insure.

935
00:40:55,520 --> 00:40:57,560
Speaker 2: Yeah, I could see that'd be in a decent situation. Yeah,

936
00:40:57,600 --> 00:40:59,520
Speaker 2: but decent scenario to find yourself in. That's when you

937
00:40:59,560 --> 00:41:02,080
Speaker 2: pay the money to the duck and as you are

938
00:41:02,120 --> 00:41:03,480
Speaker 2: building up you're right, but.

939
00:41:04,000 --> 00:41:05,840
Speaker 1: At some point you're able to avoid paying for that

940
00:41:05,920 --> 00:41:08,920
Speaker 1: insurance altogether because you've got the cash on hand to

941
00:41:09,000 --> 00:41:11,560
Speaker 1: cover yourself in case the worst scenario or a bad

942
00:41:11,640 --> 00:41:13,839
Speaker 1: scenario where to happen to you. I think smart how

943
00:41:13,920 --> 00:41:16,279
Speaker 1: to money listeners should be able to cover a short

944
00:41:16,360 --> 00:41:19,120
Speaker 1: term event because they have built up the cash savings

945
00:41:19,320 --> 00:41:21,480
Speaker 1: to whether a bunch of different financial storms, whether that's

946
00:41:21,600 --> 00:41:24,080
Speaker 1: job loss or whether that is some sort of disability

947
00:41:24,080 --> 00:41:25,479
Speaker 1: that takes you out of work for a few months.

948
00:41:25,880 --> 00:41:28,880
Speaker 1: But you know, think through the potentially catastrophic consequences of

949
00:41:28,960 --> 00:41:31,560
Speaker 1: a long term disability, Matt, if you like, run some

950
00:41:31,640 --> 00:41:34,200
Speaker 1: worst case scenarios that can be really frightening and hopefully,

951
00:41:34,239 --> 00:41:36,759
Speaker 1: of course, Matthew, you stay healthy. You feel like you've

952
00:41:37,080 --> 00:41:40,239
Speaker 1: wasted those premiums years down the road, but especially you know,

953
00:41:40,320 --> 00:41:42,440
Speaker 1: given the price your employer is charging for that coverage,

954
00:41:42,600 --> 00:41:44,080
Speaker 1: I think it makes a whole lot of sense to

955
00:41:44,120 --> 00:41:48,600
Speaker 1: snag the long term disability coverage specifically, and then maybe

956
00:41:48,719 --> 00:41:51,480
Speaker 1: at least consider and do some shopping what it would

957
00:41:51,480 --> 00:41:53,080
Speaker 1: look like to get your own policy on the open

958
00:41:53,160 --> 00:41:56,320
Speaker 1: market too, just in case, or especially if you're not

959
00:41:56,440 --> 00:41:59,200
Speaker 1: planning on staying employed at your current place of work

960
00:41:59,239 --> 00:42:00,160
Speaker 1: for too much life.

961
00:42:00,360 --> 00:42:02,400
Speaker 2: Alright, got time for one more. This is an email

962
00:42:02,480 --> 00:42:05,120
Speaker 2: from k she wrote us Joel. She said, I went

963
00:42:05,160 --> 00:42:07,640
Speaker 2: to the grocery store at a non busy time of day,

964
00:42:07,960 --> 00:42:10,160
Speaker 2: took the coins that were gathering dust in our home.

965
00:42:10,600 --> 00:42:12,600
Speaker 2: I had a sandwich bag full of small coins and

966
00:42:12,640 --> 00:42:14,800
Speaker 2: I used them to pay for my groceries. Instead of

967
00:42:14,840 --> 00:42:17,160
Speaker 2: going to coinstar, I took them to the self served

968
00:42:17,280 --> 00:42:19,640
Speaker 2: check out and I paid with thirty seven dollars worth

969
00:42:19,680 --> 00:42:22,520
Speaker 2: of pennies, nickels, and dimes. I wish I had a

970
00:42:22,560 --> 00:42:25,200
Speaker 2: slow clap sound effect. Rights. What's impressive is the fact

971
00:42:25,239 --> 00:42:28,719
Speaker 2: that she didn't say quarters, so that's actually she said,

972
00:42:28,760 --> 00:42:31,480
Speaker 2: small sandwich bag or I don't know, just a sandwich

973
00:42:31,520 --> 00:42:33,719
Speaker 2: bag full, that's all. I don't know. It takes a

974
00:42:33,760 --> 00:42:35,799
Speaker 2: lot of pennies, nickels and dimes, so make thirty seven

975
00:42:35,840 --> 00:42:38,600
Speaker 2: dollars worth. But she said, sure, you turn that into

976
00:42:38,600 --> 00:42:40,640
Speaker 2: a barbell and get your workout. Seriously, she said, no,

977
00:42:40,800 --> 00:42:44,439
Speaker 2: twelve point nine percent coinstar fee and no transaction fee.

978
00:42:44,719 --> 00:42:46,719
Speaker 2: It didn't take that long, and the cashier said that

979
00:42:46,800 --> 00:42:49,040
Speaker 2: it wasn't that unusual for people to do this. I

980
00:42:49,120 --> 00:42:51,680
Speaker 2: look carefully to ensure that there were always open checkout

981
00:42:51,719 --> 00:42:55,040
Speaker 2: stations and it didn't take long. Frugal or cheap? Joel,

982
00:42:55,040 --> 00:42:56,759
Speaker 2: what you think? I think? You know what I think, Matt.

983
00:42:56,840 --> 00:42:58,560
Speaker 2: I like it. Frugal, I like it. How could this

984
00:42:58,600 --> 00:42:59,560
Speaker 2: not be frugal? I love it.

985
00:43:00,360 --> 00:43:03,680
Speaker 1: The cooinsts our fees are insane, yeah, like truly uh

986
00:43:03,840 --> 00:43:04,880
Speaker 1: and and part of the reason it.

987
00:43:04,920 --> 00:43:05,479
Speaker 2: Make it easy.

988
00:43:05,719 --> 00:43:08,319
Speaker 1: This is frugal, not cheap, like I think. I might

989
00:43:08,400 --> 00:43:11,400
Speaker 1: have a slightly different take if Kay had said and

990
00:43:11,440 --> 00:43:13,120
Speaker 1: there were people lined up behind me and they were

991
00:43:13,200 --> 00:43:15,480
Speaker 1: so angry, they were seething, and then my tires got.

992
00:43:15,360 --> 00:43:17,480
Speaker 2: Slapped because they were so angry that it took was

993
00:43:17,520 --> 00:43:19,960
Speaker 2: being considerate. She was looking around her, you know, went

994
00:43:20,120 --> 00:43:22,400
Speaker 2: during a time of day that where it wasn't busy. Right,

995
00:43:22,440 --> 00:43:22,920
Speaker 2: I'm all for it.

996
00:43:22,960 --> 00:43:24,520
Speaker 1: You didn't hold up the line for thirty minutes and

997
00:43:24,560 --> 00:43:27,000
Speaker 1: then you got rid of that change you turn into

998
00:43:27,080 --> 00:43:29,680
Speaker 1: something constructive and we didn't pay a massive fee to

999
00:43:29,719 --> 00:43:29,840
Speaker 1: do it.

1000
00:43:29,920 --> 00:43:31,239
Speaker 2: No, have we talked about this that I did this,

1001
00:43:31,600 --> 00:43:33,520
Speaker 2: Like was this maybe earlier this year or or I

1002
00:43:33,560 --> 00:43:35,759
Speaker 2: think we did talk about it. Our change jar was

1003
00:43:36,000 --> 00:43:38,520
Speaker 2: filling up and I went to a local Kroger, thinking that, oh,

1004
00:43:38,600 --> 00:43:40,000
Speaker 2: this is gonna be so easy. I can just like

1005
00:43:40,120 --> 00:43:41,600
Speaker 2: just dump them in the little cup and they'll kind

1006
00:43:41,640 --> 00:43:44,440
Speaker 2: of tint, you know, like go down into the slot. No,

1007
00:43:44,719 --> 00:43:46,920
Speaker 2: that's not how the self checkout thing is there. You

1008
00:43:47,080 --> 00:43:49,320
Speaker 2: just stick them in individually. Yes, it was a literal

1009
00:43:49,440 --> 00:43:52,160
Speaker 2: tiny little slot and so man, that really turned me

1010
00:43:52,160 --> 00:43:54,960
Speaker 2: off from the entire and it kept getting jammed. That

1011
00:43:55,120 --> 00:43:56,640
Speaker 2: was the whole other thing. I had to like pull

1012
00:43:56,680 --> 00:43:58,759
Speaker 2: out my keys. Some people were seething behind you when

1013
00:43:58,760 --> 00:44:00,840
Speaker 2: you did it. Uh, it wasn't it Also wasn't that

1014
00:44:01,160 --> 00:44:03,560
Speaker 2: that crowded oine Tomato Stown at your head. All that

1015
00:44:03,680 --> 00:44:07,359
Speaker 2: being said, I have since learned that coinstar oftentimes if

1016
00:44:07,400 --> 00:44:10,879
Speaker 2: you receive your payment from your change in the form

1017
00:44:11,000 --> 00:44:13,239
Speaker 2: of a gift card, a lot of times there aren't

1018
00:44:13,239 --> 00:44:15,680
Speaker 2: transaction fees. And this is I only learned about this recently.

1019
00:44:15,719 --> 00:44:19,160
Speaker 2: I looked into it, and specifically Amazon is one of

1020
00:44:19,400 --> 00:44:21,040
Speaker 2: the one of the gift cards that you can get,

1021
00:44:21,080 --> 00:44:23,879
Speaker 2: which in our household that's basically as good as cash.

1022
00:44:24,000 --> 00:44:26,000
Speaker 1: Yeah, So I was done the impression and maybe I'm wrong,

1023
00:44:26,040 --> 00:44:27,960
Speaker 1: and maybe it's different at different coinstar machines that there

1024
00:44:28,080 --> 00:44:30,160
Speaker 1: is like a reduced fee if you get an Amazon

1025
00:44:30,239 --> 00:44:32,600
Speaker 1: gift card, but then there are other stores that you

1026
00:44:32,640 --> 00:44:34,560
Speaker 1: can get a gift card for and then there is

1027
00:44:34,719 --> 00:44:36,080
Speaker 1: no fee if you do that. So I think it's

1028
00:44:36,120 --> 00:44:38,880
Speaker 1: like Home Depot and Nike and some of those companies.

1029
00:44:39,600 --> 00:44:41,160
Speaker 1: But if you I think I thought it was zero

1030
00:44:41,239 --> 00:44:44,279
Speaker 1: percent maybe with Amazon. If it is for anybody who

1031
00:44:44,400 --> 00:44:47,719
Speaker 1: likes to use Amazon, which is like everybody I know, Yeah,

1032
00:44:47,840 --> 00:44:49,720
Speaker 1: then then you're talking with You spend a decent amount

1033
00:44:49,719 --> 00:44:49,960
Speaker 1: of money.

1034
00:44:50,040 --> 00:44:52,880
Speaker 2: Pretty simple decision with Amazon. And if this is incorrect,

1035
00:44:52,960 --> 00:44:55,440
Speaker 2: we'll issue a correction in the show notes for this UBPENCD.

1036
00:44:55,480 --> 00:44:57,000
Speaker 1: If time is money, Matt, then you don't have to

1037
00:44:57,040 --> 00:44:59,239
Speaker 1: waste your time plunking every coin individual I know, no

1038
00:44:59,400 --> 00:45:01,080
Speaker 1: the ability to to dump the whole thing in there.

1039
00:45:01,360 --> 00:45:03,080
Speaker 1: We need to keep enough around to be able to

1040
00:45:03,480 --> 00:45:06,719
Speaker 1: teach the kids about money, and Kate, she pays the kids.

1041
00:45:07,640 --> 00:45:09,120
Speaker 1: The bugs are all kind of dying now because it's

1042
00:45:09,120 --> 00:45:11,279
Speaker 1: getting colder, but there are certain bugs that were on

1043
00:45:11,360 --> 00:45:13,600
Speaker 1: her flowers and stuff, and she would pay them ten

1044
00:45:13,719 --> 00:45:15,560
Speaker 1: cents every time they would kill one.

1045
00:45:15,440 --> 00:45:16,960
Speaker 2: Of those bugs. I gotta have some dimes on hand.

1046
00:45:17,239 --> 00:45:20,239
Speaker 1: Yeah, so I can't dump all those into the coin star.

1047
00:45:20,360 --> 00:45:24,120
Speaker 1: But Kate, yeah to k not Kate, kry Kay, you're

1048
00:45:24,160 --> 00:45:24,799
Speaker 1: doing a great job.

1049
00:45:24,880 --> 00:45:25,360
Speaker 2: You should not.

1050
00:45:26,080 --> 00:45:28,080
Speaker 1: That's not cheap, it's frugal. We've getting rid of those

1051
00:45:28,120 --> 00:45:30,359
Speaker 1: coins getting your groceries. At the same time, nobody got

1052
00:45:30,400 --> 00:45:31,960
Speaker 1: mad at you in the process, so I think you

1053
00:45:32,040 --> 00:45:34,080
Speaker 1: did a fine job there. Made a good choice. All right, Matt,

1054
00:45:34,120 --> 00:45:36,760
Speaker 1: Let's get back to the beer we had on this episode.

1055
00:45:37,160 --> 00:45:41,360
Speaker 1: This was is called a kobzar. It's a Ukrainian imperial stout.

1056
00:45:41,680 --> 00:45:43,480
Speaker 1: Sure not cobs are I don't know.

1057
00:45:43,520 --> 00:45:43,840
Speaker 2: I don't know.

1058
00:45:44,000 --> 00:45:45,560
Speaker 1: I didn't really look up the presentation, but I did

1059
00:45:45,640 --> 00:45:47,359
Speaker 1: look up because I mentioned in the beginning I didn't

1060
00:45:47,360 --> 00:45:50,240
Speaker 1: know what this means what that word meant, And apparently

1061
00:45:50,640 --> 00:45:53,000
Speaker 1: it's like a traveling minstrel who plays some sort of

1062
00:45:53,040 --> 00:45:56,400
Speaker 1: stringed instrument in Ukraine back in the day, like the

1063
00:45:56,480 --> 00:45:57,800
Speaker 1: Bob Dylan of a couple.

1064
00:45:57,719 --> 00:46:01,640
Speaker 2: Hundred years ago, so early Bob Villanob Dylan, so that

1065
00:46:01,960 --> 00:46:05,040
Speaker 2: that poem or whatever it maybe their lyrics there on

1066
00:46:05,080 --> 00:46:06,759
Speaker 2: the side, it could be, but it's got someone's name,

1067
00:46:07,200 --> 00:46:10,759
Speaker 2: tear Us Chavenshko. I don't know, I'm not saying your

1068
00:46:10,760 --> 00:46:14,879
Speaker 2: pronunciation is terrible. Sorry, it's all my Ukrainian friends out there.

1069
00:46:15,040 --> 00:46:18,440
Speaker 2: But I did like this beer, super dark, some awesome

1070
00:46:18,640 --> 00:46:21,520
Speaker 2: roasty notes going on here. It was brewed with coffee

1071
00:46:21,560 --> 00:46:24,080
Speaker 2: beans as well, so there's like some nice bitter notes

1072
00:46:24,120 --> 00:46:25,840
Speaker 2: coming off of some of those coffee beans. Do you

1073
00:46:25,880 --> 00:46:28,520
Speaker 2: get any cinnamon in this one? Oh? I think I

1074
00:46:28,520 --> 00:46:29,480
Speaker 2: could see why you would say that.

1075
00:46:29,520 --> 00:46:31,120
Speaker 1: I got like a touch of cinnamon, and I also

1076
00:46:31,239 --> 00:46:32,920
Speaker 1: got some of the whiskey barrel on there too.

1077
00:46:33,040 --> 00:46:36,080
Speaker 2: Yeah, yeah, yeah, there's so yeah.

1078
00:46:36,000 --> 00:46:40,080
Speaker 1: We're we're not necessarily in the heart of stout season yet,

1079
00:46:40,440 --> 00:46:43,040
Speaker 1: but this is like, I don't know, kicking off potential

1080
00:46:43,040 --> 00:46:46,080
Speaker 1: stout season for us. And this one was a fantastic

1081
00:46:46,160 --> 00:46:49,360
Speaker 1: representation of an imperial stout, so I loved it.

1082
00:46:49,480 --> 00:46:52,680
Speaker 2: It's a it was aged in Glenora whiskey barrels, which

1083
00:46:52,680 --> 00:46:55,440
Speaker 2: I don't know what Glenora is, but man, I just

1084
00:46:55,560 --> 00:46:58,200
Speaker 2: love oak. Kate. So she's been trying to find a

1085
00:46:58,239 --> 00:47:01,279
Speaker 2: new cologne for me, and because she doesn't like the

1086
00:47:01,880 --> 00:47:03,719
Speaker 2: I bought this little tiny little thing of some oil

1087
00:47:03,760 --> 00:47:06,279
Speaker 2: that I wear occasionally, and she got some samles for me.

1088
00:47:06,320 --> 00:47:09,000
Speaker 2: But they all smell like traditional, like dude in the

1089
00:47:09,080 --> 00:47:11,120
Speaker 2: mall cologne. Yeah. But what I told her that I

1090
00:47:11,200 --> 00:47:14,800
Speaker 2: love are the the smells that smell Oaki, like literally,

1091
00:47:14,880 --> 00:47:16,880
Speaker 2: and I was having a hard time explaining to her,

1092
00:47:17,000 --> 00:47:18,640
Speaker 2: like feed her yeah, And I was just like, you

1093
00:47:18,640 --> 00:47:21,040
Speaker 2: remember when I was like splitting all those rounds of

1094
00:47:21,080 --> 00:47:23,200
Speaker 2: that white oak that the neighbor took down, and I

1095
00:47:23,320 --> 00:47:26,000
Speaker 2: was literally like sniffing every chunk of wood that I'll split,

1096
00:47:26,120 --> 00:47:29,239
Speaker 2: Like that smell. There's something about that yeah, oakiness that

1097
00:47:29,560 --> 00:47:32,160
Speaker 2: I love so much, not only that I enjoy drinking,

1098
00:47:32,239 --> 00:47:33,600
Speaker 2: but sometimes I like smelling like it too.

1099
00:47:33,600 --> 00:47:35,520
Speaker 1: I guess I don't wear coloone. And my buddy was

1100
00:47:35,520 --> 00:47:36,759
Speaker 1: talking to me about that the other day and I

1101
00:47:36,880 --> 00:47:38,919
Speaker 1: was like, one, I don't want to spend seventy dollars

1102
00:47:38,960 --> 00:47:40,440
Speaker 1: a bottle. I'm sure you can get cheaper stuff, but

1103
00:47:40,480 --> 00:47:42,600
Speaker 1: oftentimes the cheap stuff smells really cheap.

1104
00:47:43,040 --> 00:47:44,040
Speaker 2: But I just I don't think.

1105
00:47:44,080 --> 00:47:46,160
Speaker 1: I don't like smelling myself, so I like to I

1106
00:47:46,280 --> 00:47:47,960
Speaker 1: like to be neutral in my scentse and so I wear.

1107
00:47:48,000 --> 00:47:50,600
Speaker 1: I use a dove soap. I think that has a

1108
00:47:50,719 --> 00:47:52,280
Speaker 1: nice little See, you're not neutral.

1109
00:47:52,400 --> 00:47:55,840
Speaker 2: It's faint. It's faint. I just want my faint to

1110
00:47:55,920 --> 00:47:57,480
Speaker 2: be but I can't smell it. I want it to

1111
00:47:57,560 --> 00:47:59,680
Speaker 2: be of the white oak genres. Let me know if

1112
00:47:59,680 --> 00:48:02,040
Speaker 2: you find something kind of manly and inexpensive. Thank you.

1113
00:48:02,080 --> 00:48:05,080
Speaker 2: Oh yeah, I said thank you because I envisioned listeners

1114
00:48:05,120 --> 00:48:07,600
Speaker 2: reaching out with their suggestions. If you have my mind,

1115
00:48:08,120 --> 00:48:08,960
Speaker 2: it doesn't stop.

1116
00:48:08,840 --> 00:48:10,480
Speaker 1: Cheap, manly colowned suggestions will take them.

1117
00:48:10,560 --> 00:48:12,160
Speaker 2: That smells like white oak. Yeah, I'm all for it.

1118
00:48:13,000 --> 00:48:15,080
Speaker 1: All right, let's going to do it for this episode.

1119
00:48:15,120 --> 00:48:16,760
Speaker 1: We'll put links to some of the stuff we mentioned

1120
00:48:17,080 --> 00:48:19,120
Speaker 1: up in the show notes on our website at how

1121
00:48:19,160 --> 00:48:22,279
Speaker 1: toomoney dot com. So, Matt, until next time, Best Friends

1122
00:48:22,320 --> 00:48:24,040
Speaker 1: Alutum best Friends Out