1 00:00:00,080 --> 00:00:02,920 Speaker 1: Welcome to How to Money. I'm Joel and I'm Att, 2 00:00:03,000 --> 00:00:24,880 Speaker 1: and today we're talking about good debt. First, bad debt. Yeah, Mat. 3 00:00:24,880 --> 00:00:27,280 Speaker 1: Today on the show, we're gonna define good debt, bad debt, 4 00:00:27,360 --> 00:00:29,680 Speaker 1: and then give some tips on managing your debt. Some 5 00:00:29,720 --> 00:00:32,040 Speaker 1: people don't even believe there is such a thing as 6 00:00:32,040 --> 00:00:34,839 Speaker 1: bad debt, and we'll let them know, yes there is. So, man, 7 00:00:34,880 --> 00:00:37,479 Speaker 1: have you saved any money this week? So? I mentioned 8 00:00:37,520 --> 00:00:40,239 Speaker 1: on a recent episode, uh, the one about cutting your 9 00:00:40,240 --> 00:00:42,560 Speaker 1: monthly bills, that I was paying way too much for 10 00:00:42,640 --> 00:00:45,320 Speaker 1: my internet service because I decided, oh, yeah, because you 11 00:00:45,360 --> 00:00:47,720 Speaker 1: got the Primo service. But then it kind of sucked. Yeah, 12 00:00:47,760 --> 00:00:49,680 Speaker 1: I tried to. I decided to try out the gig 13 00:00:49,760 --> 00:00:51,880 Speaker 1: speed that they were floating in our neighborhood, and I 14 00:00:51,920 --> 00:00:54,080 Speaker 1: was like, Oh, this is gonna be great, and life 15 00:00:54,080 --> 00:00:56,600 Speaker 1: on gig speed. I'm never gonna go back. And I 16 00:00:56,800 --> 00:00:59,920 Speaker 1: just realized that it didn't provide much value over regular 17 00:01:00,040 --> 00:01:03,400 Speaker 1: internet speeds for me, and so I took my own medicine. 18 00:01:03,960 --> 00:01:06,240 Speaker 1: I tweeted at the A, T and T folks. They 19 00:01:06,280 --> 00:01:09,000 Speaker 1: got back to me pretty quick. I had to pick 20 00:01:09,080 --> 00:01:10,520 Speaker 1: up the phone and talk to him, because you know, 21 00:01:10,520 --> 00:01:14,119 Speaker 1: the old school like that. Uh. But ultimately, dude, I'm 22 00:01:14,120 --> 00:01:17,440 Speaker 1: saving seventy dollars a month on my internet bill. That's 23 00:01:17,440 --> 00:01:20,120 Speaker 1: over eight hundred dollars a year. Wait, what were you 24 00:01:20,120 --> 00:01:22,320 Speaker 1: paying if you if you're saving seventy So when I 25 00:01:22,360 --> 00:01:24,280 Speaker 1: initially signed up, it was eighty dollars a month, and 26 00:01:24,280 --> 00:01:26,640 Speaker 1: then they just last month pumped it up to ninety, 27 00:01:26,680 --> 00:01:28,600 Speaker 1: which was that kick in the pants that I was 28 00:01:28,720 --> 00:01:32,120 Speaker 1: I needed to to totally destroy. Down to twenty bucks 29 00:01:32,160 --> 00:01:37,680 Speaker 1: a month for Wicked speed fifty megs. Ye okay, that's 30 00:01:37,720 --> 00:01:40,800 Speaker 1: pretty good, dude, that's how I roll. Man, that's got 31 00:01:40,800 --> 00:01:42,840 Speaker 1: that locked in for a year a year, man, that's 32 00:01:42,840 --> 00:01:44,839 Speaker 1: really good. I was gonna say for maybe six months. 33 00:01:45,080 --> 00:01:48,200 Speaker 1: There's uh, not much better than just acting seventy dollars 34 00:01:48,200 --> 00:01:49,960 Speaker 1: out of your monthly budget. Yeah, dude, that's huge and 35 00:01:49,960 --> 00:01:52,240 Speaker 1: being able to reallocate it. So yeah, I'm pretty pumped 36 00:01:52,240 --> 00:01:56,160 Speaker 1: about that right now. Beers on you for the next year. Yeah. Uh. 37 00:01:56,200 --> 00:01:58,600 Speaker 1: Speaking of beers, we've been tailgating a little bit here, 38 00:01:58,760 --> 00:02:02,440 Speaker 1: a little pregame a little pre podcast beer. Uh and 39 00:02:02,520 --> 00:02:05,200 Speaker 1: a listener of the show, Austin thanks man. He uh 40 00:02:05,240 --> 00:02:08,240 Speaker 1: he dropped these by my house the other week. And 41 00:02:08,280 --> 00:02:11,519 Speaker 1: so we're drinking some wicked weed Lieutenant dank, which is 42 00:02:11,800 --> 00:02:14,320 Speaker 1: a solid I p A. But don't worry, that's not 43 00:02:14,400 --> 00:02:16,040 Speaker 1: the only beer we're having tonight. We're about to pop 44 00:02:16,080 --> 00:02:18,400 Speaker 1: another one. No, yeah, that's just our that's our pregame beer. 45 00:02:18,480 --> 00:02:20,280 Speaker 1: But real quick, you wanted to tell me about some 46 00:02:20,360 --> 00:02:23,160 Speaker 1: razors you recently bought. Yeah, please fill me in. So 47 00:02:23,240 --> 00:02:26,520 Speaker 1: the razors I didn't buy because my parents came and visited. 48 00:02:26,760 --> 00:02:28,600 Speaker 1: And I don't do your parents show up with a 49 00:02:28,639 --> 00:02:33,320 Speaker 1: box of crap from no night really, well they show 50 00:02:33,360 --> 00:02:36,040 Speaker 1: from your childhood, uh, from your like in your closet 51 00:02:36,080 --> 00:02:38,560 Speaker 1: or whatever. No, they just usually show up with presents 52 00:02:38,600 --> 00:02:41,880 Speaker 1: for my daughters. So yeah, we are your parents. Awesome 53 00:02:43,320 --> 00:02:47,000 Speaker 1: shout out. Yeah, I mean my things do that too. However, 54 00:02:47,040 --> 00:02:49,640 Speaker 1: they're starting to clear out my room and so they 55 00:02:49,639 --> 00:02:51,400 Speaker 1: show up every now and then with like a massive 56 00:02:51,440 --> 00:02:54,720 Speaker 1: fruit box from Costco full of like books and just 57 00:02:54,840 --> 00:02:56,440 Speaker 1: tons of other stuff. What do they like? Keep it 58 00:02:56,480 --> 00:02:58,280 Speaker 1: the same? Kind of like Ray Finkel's mom or Na 59 00:02:58,320 --> 00:03:00,720 Speaker 1: Sventure a pet Detective. I don't like I've ever watched 60 00:03:00,760 --> 00:03:05,160 Speaker 1: a spintro all the way through. Man, shut Sorry, I'm 61 00:03:05,200 --> 00:03:09,840 Speaker 1: not a huge Jim carry van. It's the best scene. 62 00:03:09,960 --> 00:03:12,560 Speaker 1: His mom like leaves the room like the way it 63 00:03:12,680 --> 00:03:15,440 Speaker 1: was when he was I've heard of people teenager and 64 00:03:15,600 --> 00:03:17,440 Speaker 1: uh and a spincher walks into the room and it's 65 00:03:17,440 --> 00:03:20,080 Speaker 1: just all creepy and stuff, and it's so I'm imagining 66 00:03:20,080 --> 00:03:23,079 Speaker 1: that your Oh yeah, so I'm imagining that your mom 67 00:03:23,160 --> 00:03:25,600 Speaker 1: kept the room in that exact way, and now she's 68 00:03:25,600 --> 00:03:28,360 Speaker 1: starting to make some changes. Yeah. No, so yeah, they 69 00:03:28,360 --> 00:03:31,760 Speaker 1: show up with a box full of stuff and they say, here, 70 00:03:31,840 --> 00:03:33,240 Speaker 1: here's a bunch of your stuff. You can toss it 71 00:03:33,360 --> 00:03:35,520 Speaker 1: or keep it whatever. And so I was going through 72 00:03:35,520 --> 00:03:38,840 Speaker 1: one of the boxes recently and my razor handle, you know, 73 00:03:38,880 --> 00:03:41,280 Speaker 1: like the metal aluminum handle and something. A little tray 74 00:03:41,320 --> 00:03:43,600 Speaker 1: of razors were in there from when I was like 75 00:03:43,640 --> 00:03:46,440 Speaker 1: sixteen years old. Man, from when I was in high school? Dude, 76 00:03:46,680 --> 00:03:49,160 Speaker 1: can you're gonna start using that stuff? Do I look 77 00:03:49,200 --> 00:03:51,800 Speaker 1: like freshly shaven? I don't see toilet paper all over 78 00:03:51,840 --> 00:03:54,840 Speaker 1: your face? So exactly. So I saw it and I thought, well, 79 00:03:54,840 --> 00:03:57,080 Speaker 1: first of all, the handle is like old school. It was. 80 00:03:57,120 --> 00:03:58,720 Speaker 1: I think it was my dad's from like the eighties 81 00:03:59,000 --> 00:04:00,720 Speaker 1: when I hit the big pie and started having to 82 00:04:00,800 --> 00:04:03,680 Speaker 1: shape Uh. I think he just gave me his and 83 00:04:03,680 --> 00:04:05,400 Speaker 1: he got a new one and so it's kind of cool. 84 00:04:05,440 --> 00:04:06,840 Speaker 1: It's like they don't make him like that anymore. It's 85 00:04:06,840 --> 00:04:10,160 Speaker 1: like solid and heavy. Yeah, but yeah, I was just 86 00:04:10,200 --> 00:04:11,840 Speaker 1: like I popped one of the razors on there, and 87 00:04:11,840 --> 00:04:13,720 Speaker 1: I was like, I think this is still sharp, And 88 00:04:13,760 --> 00:04:15,920 Speaker 1: so I shaved last night. Dude, it looks good. But 89 00:04:16,160 --> 00:04:18,040 Speaker 1: those razors are gonna ask me for like another two 90 00:04:18,080 --> 00:04:19,920 Speaker 1: or three years because I don't have to shave very often, 91 00:04:20,040 --> 00:04:22,440 Speaker 1: and it's way smoother than like shaving with kates like 92 00:04:22,520 --> 00:04:26,520 Speaker 1: leg razors, which totally irritate my skin. What's the difference 93 00:04:26,600 --> 00:04:29,320 Speaker 1: between male and female razors? Because I feel like men 94 00:04:29,400 --> 00:04:31,920 Speaker 1: can't really use the women's razors that that they can. 95 00:04:32,200 --> 00:04:33,960 Speaker 1: There's it's like a different angle or something. Is it 96 00:04:34,080 --> 00:04:37,400 Speaker 1: the angle? Because Emily is trying to use my razors before, 97 00:04:37,560 --> 00:04:39,440 Speaker 1: and you know, she gets cut up a little bit 98 00:04:39,480 --> 00:04:41,080 Speaker 1: more and I've tried to use hers and just have 99 00:04:41,080 --> 00:04:42,880 Speaker 1: a hard time with him. I don't know. Is it 100 00:04:43,640 --> 00:04:46,200 Speaker 1: someone knows out there? And I know the internet let 101 00:04:46,279 --> 00:04:48,440 Speaker 1: us know, Yeah, holler rat us. All I know is 102 00:04:48,480 --> 00:04:51,640 Speaker 1: that it it felt way smoother and way better using 103 00:04:51,680 --> 00:04:54,680 Speaker 1: that razor than using Kate's disposable. So and by the way, 104 00:04:54,720 --> 00:04:57,480 Speaker 1: speaking of hollering at us, we just got an email 105 00:04:57,600 --> 00:05:02,480 Speaker 1: from a listener in Western Australia, a Perth, Perth, Australia. Man, 106 00:05:02,560 --> 00:05:05,479 Speaker 1: it's so awesome, dude, it's so fun. Uh. Probably my 107 00:05:05,480 --> 00:05:08,479 Speaker 1: favorite part of doing this podcast, even above drinking the 108 00:05:08,520 --> 00:05:12,680 Speaker 1: beer and hanging out with your well shaven face smooth, 109 00:05:13,120 --> 00:05:15,560 Speaker 1: is getting emails. Is is hearing from the people that 110 00:05:15,640 --> 00:05:17,720 Speaker 1: listen to the show. And that's a that's a lot 111 00:05:17,760 --> 00:05:21,520 Speaker 1: of fun hearing people stories why they listen, what they're learning, 112 00:05:21,520 --> 00:05:24,120 Speaker 1: and how they're implementing some of these strategies into their 113 00:05:24,120 --> 00:05:27,159 Speaker 1: lives in order to reach their financial goals. Man, I yeah, 114 00:05:27,160 --> 00:05:30,039 Speaker 1: I completely agree. Shout out to Craig he uh was Yeah, 115 00:05:30,080 --> 00:05:31,440 Speaker 1: he shared with us some of the things that sort 116 00:05:31,440 --> 00:05:33,080 Speaker 1: of resonated with him even on the other side of 117 00:05:33,120 --> 00:05:35,359 Speaker 1: the world, and it just it's crazy, but it just 118 00:05:35,400 --> 00:05:37,480 Speaker 1: makes it the world seems so small because there's people 119 00:05:37,480 --> 00:05:39,719 Speaker 1: all over the world that shared the same values you 120 00:05:39,720 --> 00:05:41,520 Speaker 1: do and and and enjoy the same things. And it 121 00:05:41,560 --> 00:05:43,400 Speaker 1: makes you think that you could kind of get together 122 00:05:43,800 --> 00:05:45,920 Speaker 1: even though you've never met, and have a great time. 123 00:05:45,960 --> 00:05:47,600 Speaker 1: You know, It's like let's just get together and hang 124 00:05:47,640 --> 00:05:49,440 Speaker 1: out all you people. Yeah, it seems like a small 125 00:05:49,440 --> 00:05:51,440 Speaker 1: world until you jump on the airplane for that sixteen 126 00:05:51,480 --> 00:05:53,520 Speaker 1: hour flight and then you're like, oh wait, that's a 127 00:05:53,520 --> 00:05:56,960 Speaker 1: long way away. Uh. But was someone someone sounds spoiled? Man, 128 00:05:56,960 --> 00:06:00,440 Speaker 1: I've never been to Australia. It was nice. Uh. But 129 00:06:00,520 --> 00:06:02,440 Speaker 1: I will say to Craig, it's awesome. I love that. 130 00:06:02,480 --> 00:06:05,440 Speaker 1: He told us that he listens to the podcast while 131 00:06:05,560 --> 00:06:08,200 Speaker 1: riding his bike along the river. Yeah. Yeah, he was 132 00:06:08,240 --> 00:06:12,080 Speaker 1: literally listening to our episode on y com Meeting will 133 00:06:12,160 --> 00:06:15,120 Speaker 1: Kill You and he was listening to that one while 134 00:06:15,160 --> 00:06:17,039 Speaker 1: he was biking home from work. That can't help but 135 00:06:17,240 --> 00:06:20,479 Speaker 1: make you crack a smile, right, it's perfect. So alright, Matt. 136 00:06:20,520 --> 00:06:23,960 Speaker 1: So today on the show, we're drinking Hopping Frog Infusion 137 00:06:24,040 --> 00:06:26,960 Speaker 1: a coffee porter. So where did you get this? Because 138 00:06:27,480 --> 00:06:31,200 Speaker 1: because I've never even heard of this brewery, Hopping Frog, 139 00:06:31,680 --> 00:06:35,320 Speaker 1: so I will say, because of their branding is really bad. 140 00:06:35,440 --> 00:06:39,080 Speaker 1: So the label is complete trash. I really don't like it. 141 00:06:39,120 --> 00:06:41,320 Speaker 1: In the first time I ever had a Hopping Frog 142 00:06:41,360 --> 00:06:43,560 Speaker 1: beer was when a friend shipping me one. They're based 143 00:06:43,560 --> 00:06:46,640 Speaker 1: out of Ohio and they distribute now where we are, 144 00:06:46,680 --> 00:06:49,480 Speaker 1: and so we have a little more access to them. So, actually, 145 00:06:49,480 --> 00:06:53,040 Speaker 1: I got this beer on the discount rack at my 146 00:06:53,640 --> 00:06:56,000 Speaker 1: local beer store. Dude, I need to go there. He's 147 00:06:56,000 --> 00:06:58,000 Speaker 1: always putting the good stuff on the discount on the 148 00:06:58,000 --> 00:07:00,320 Speaker 1: discount rat. Why is he? Why is he unloading these bears? 149 00:07:00,440 --> 00:07:02,200 Speaker 1: He just wants to move them. I guess, yeah, yeah, 150 00:07:02,200 --> 00:07:04,400 Speaker 1: I guess just beers that don't sell super well or 151 00:07:04,880 --> 00:07:06,359 Speaker 1: that's put on the shelf for a little while longer. 152 00:07:06,360 --> 00:07:10,000 Speaker 1: And so this one is a coffee porter with chocolate 153 00:07:10,040 --> 00:07:12,040 Speaker 1: and peanut butter. And I don't know if you could 154 00:07:12,040 --> 00:07:14,960 Speaker 1: tell right when we popped it, did your nostrils fill 155 00:07:15,000 --> 00:07:17,720 Speaker 1: with peanut butter? Smells a little bit, not nearly like 156 00:07:17,800 --> 00:07:20,200 Speaker 1: some of the bourbon barrel stuff that we have, but yeah, 157 00:07:20,200 --> 00:07:22,680 Speaker 1: bourbons just a more powerful sent in general. But yeah, 158 00:07:22,680 --> 00:07:24,559 Speaker 1: now that I've got my nose up in it full 159 00:07:24,640 --> 00:07:28,240 Speaker 1: on chocolate, smell some of that coffee like a nuttiness. Yeah. 160 00:07:28,240 --> 00:07:30,720 Speaker 1: So this is a porter, and porters are definitely a 161 00:07:30,720 --> 00:07:34,560 Speaker 1: bit thinner in mouth field and viscosity than a stout, 162 00:07:34,840 --> 00:07:37,600 Speaker 1: and this particular beer it retains a lot of that 163 00:07:37,680 --> 00:07:41,360 Speaker 1: porter thinness, but it does have some really nice peanut 164 00:07:41,360 --> 00:07:43,640 Speaker 1: butter notes, uh, and in a little bit of coffee 165 00:07:43,680 --> 00:07:46,560 Speaker 1: in there as well, super nutty. Yeah, I completely agree. Man. Yeah, 166 00:07:46,600 --> 00:07:49,160 Speaker 1: pour is a really dark brown as you're pouring it, 167 00:07:49,200 --> 00:07:52,240 Speaker 1: but now that's here in the glass, it's like pitch black. 168 00:07:52,800 --> 00:07:55,559 Speaker 1: But yeah, but it's thinner. It kind of wiggles around 169 00:07:55,560 --> 00:07:58,960 Speaker 1: there in the glass, not like a thick barrel aged stout, 170 00:07:59,160 --> 00:08:00,560 Speaker 1: and it feels a little bit enter in your mouth 171 00:08:00,600 --> 00:08:02,560 Speaker 1: as well, a little easier to drink. Yeah. So I 172 00:08:02,560 --> 00:08:06,400 Speaker 1: think it's a certainly a solid representation of the coffee porter. 173 00:08:06,640 --> 00:08:08,440 Speaker 1: And you know, a couple of adjuncts in there, which 174 00:08:08,640 --> 00:08:10,960 Speaker 1: just means additions like chocolate and peanut butter, and that 175 00:08:11,000 --> 00:08:12,400 Speaker 1: kind of rounds it out and gives it, you know, 176 00:08:12,400 --> 00:08:14,440 Speaker 1: a little more flavor, a little more interest. You know. 177 00:08:14,480 --> 00:08:16,360 Speaker 1: Porters are not my go to. It's not something I 178 00:08:16,480 --> 00:08:22,080 Speaker 1: usually enjoy, but even with their terrible labels, I always 179 00:08:22,080 --> 00:08:25,160 Speaker 1: give Hopping Frog a chance, because man, they make some 180 00:08:25,200 --> 00:08:27,760 Speaker 1: of the best stouts out there. I've had some really 181 00:08:28,040 --> 00:08:31,160 Speaker 1: really good stuff from them before, and this one definitely 182 00:08:31,200 --> 00:08:34,120 Speaker 1: worth a shot. It's solid, although not top tier in 183 00:08:34,160 --> 00:08:36,719 Speaker 1: my opinion. Yeah. The fact that this is a porter though, too, 184 00:08:36,760 --> 00:08:39,040 Speaker 1: it's makes it definitely easier to drink in the summer. 185 00:08:39,280 --> 00:08:41,920 Speaker 1: You know, like some of those huge stylets, it's tough 186 00:08:41,960 --> 00:08:44,600 Speaker 1: to drink those in the summer, like maybe once, like 187 00:08:44,679 --> 00:08:46,960 Speaker 1: once the summer, or like once a month or something 188 00:08:46,960 --> 00:08:48,640 Speaker 1: like that. You know. Yeah, when it's in the eighties 189 00:08:48,640 --> 00:08:54,280 Speaker 1: and nineties, you don't want this giant, oily machine gloopy beer. Yeah, 190 00:08:54,400 --> 00:08:56,720 Speaker 1: whereas this this still drinks it feels it feels light 191 00:08:56,760 --> 00:08:59,200 Speaker 1: in your mouth, but it gives you those darker chocolate 192 00:08:59,240 --> 00:09:01,960 Speaker 1: e listed flavors, so you kind of get that profile 193 00:09:02,120 --> 00:09:04,240 Speaker 1: without getting weighed down by the heaviness of the of 194 00:09:04,480 --> 00:09:06,680 Speaker 1: a boozy beer. I'm with you, not my favorite, but 195 00:09:06,920 --> 00:09:09,439 Speaker 1: uh I dig it all right, Matt. So let's tackle 196 00:09:09,520 --> 00:09:12,160 Speaker 1: the topic good debt versus bad debt, and I guess 197 00:09:12,160 --> 00:09:15,040 Speaker 1: the ultimate question and the debate rages in the personal 198 00:09:15,040 --> 00:09:18,760 Speaker 1: finance community. Is there such a thing as good debt? Yeah? Man, 199 00:09:18,800 --> 00:09:20,800 Speaker 1: And for your listeners out there as well, I'm sure 200 00:09:20,800 --> 00:09:23,280 Speaker 1: that's something you've heard of, right, Like you've heard plenty 201 00:09:23,280 --> 00:09:25,000 Speaker 1: of people say that, oh, debt's bad. You want to 202 00:09:25,000 --> 00:09:27,120 Speaker 1: try to avoid debt as much as possible, But then 203 00:09:27,280 --> 00:09:28,480 Speaker 1: kind of the more you get into it and the 204 00:09:28,480 --> 00:09:31,000 Speaker 1: more you maybe research, you start seeing folks saying, well, 205 00:09:31,040 --> 00:09:33,160 Speaker 1: oh there's you know, there's maybe some good debt out there. 206 00:09:33,240 --> 00:09:35,160 Speaker 1: There's some different rules. So we're gonna talk about this 207 00:09:35,280 --> 00:09:37,319 Speaker 1: more generally, I guess, but we're gonna talk about the 208 00:09:37,320 --> 00:09:40,079 Speaker 1: differences between what we would characterize as good debt and 209 00:09:40,559 --> 00:09:43,360 Speaker 1: what we'd characterize as bad debt. Yeah, And I wonder 210 00:09:43,400 --> 00:09:45,800 Speaker 1: if even good debt is the best term to use, 211 00:09:46,040 --> 00:09:49,640 Speaker 1: just not awful debt maybe, right, And so I wouldn't 212 00:09:49,640 --> 00:09:51,760 Speaker 1: say there's any debt that you that could be characterized 213 00:09:51,760 --> 00:09:53,360 Speaker 1: as good where I would say, go get some of 214 00:09:53,360 --> 00:09:56,640 Speaker 1: that debt right now. It's great. But yes, I agree, 215 00:09:56,720 --> 00:09:59,720 Speaker 1: but at least it's not awful debt, right, So, and 216 00:09:59,760 --> 00:10:01,640 Speaker 1: I think there is a big difference to be made. 217 00:10:01,679 --> 00:10:03,080 Speaker 1: And then I think we can parse out some of 218 00:10:03,080 --> 00:10:05,920 Speaker 1: the details of you know, debt that you should consider 219 00:10:06,440 --> 00:10:09,200 Speaker 1: terrible debt that you need to attempt to eliminate as 220 00:10:09,280 --> 00:10:11,720 Speaker 1: quickly as possible, and then other debts that you might 221 00:10:11,760 --> 00:10:14,400 Speaker 1: be carrying that you can afford to pay the minimums on, 222 00:10:14,640 --> 00:10:17,920 Speaker 1: or at least just afford to pay off a little 223 00:10:17,920 --> 00:10:21,000 Speaker 1: more slowly over time. Yeah, man, that's good. Also a 224 00:10:21,040 --> 00:10:23,559 Speaker 1: good way that maybe think about it is that debt 225 00:10:23,600 --> 00:10:26,760 Speaker 1: and loans are tools, and they can be used poorly 226 00:10:26,800 --> 00:10:29,880 Speaker 1: and unwisely, and that could take somebody further into debt 227 00:10:30,080 --> 00:10:33,199 Speaker 1: and kind of on this downward cycle of spending and consumption. 228 00:10:33,400 --> 00:10:34,959 Speaker 1: But at the same time, it went in the hands 229 00:10:34,960 --> 00:10:36,960 Speaker 1: of somebody that knows what they're doing, right, that has 230 00:10:37,320 --> 00:10:40,040 Speaker 1: the knowledge and experience and knows how to use the debt, 231 00:10:40,040 --> 00:10:43,360 Speaker 1: how to leverage it, then perhaps that same product, like right, 232 00:10:43,400 --> 00:10:45,920 Speaker 1: like that same loan or that same debt could could 233 00:10:45,920 --> 00:10:48,400 Speaker 1: be very beneficial. Yeah, I mean, I think one good 234 00:10:48,480 --> 00:10:51,559 Speaker 1: episode that we've done that kind of correlates to this 235 00:10:51,760 --> 00:10:55,200 Speaker 1: is our episode on using credit cards like a pro. Yeah, 236 00:10:55,400 --> 00:10:58,640 Speaker 1: the credit cards obviously our debt or their tools of debt. 237 00:10:58,800 --> 00:11:00,679 Speaker 1: And so in the hands of one person, a credit 238 00:11:00,679 --> 00:11:03,959 Speaker 1: card can be this awesome tool to get frequent flyer 239 00:11:04,000 --> 00:11:06,360 Speaker 1: miles and like the sign of bonuses that's my favorite, yeah, 240 00:11:06,559 --> 00:11:09,800 Speaker 1: Jet said, or get some awesome cash back bonuses and 241 00:11:09,960 --> 00:11:13,040 Speaker 1: still never be accruing any interest at all. And then 242 00:11:13,080 --> 00:11:15,360 Speaker 1: in the hands of someone else, they can be using 243 00:11:15,360 --> 00:11:19,040 Speaker 1: it essentially to buy lifestyle and paying the minimums every 244 00:11:19,040 --> 00:11:22,839 Speaker 1: month and essentially digging themselves in a bigger hole month 245 00:11:22,920 --> 00:11:25,320 Speaker 1: after month after month because they don't know how to 246 00:11:25,440 --> 00:11:28,400 Speaker 1: use it properly. So in the same way as we 247 00:11:28,480 --> 00:11:31,520 Speaker 1: approach this episode, again, it's not necessarily good debt, but 248 00:11:31,559 --> 00:11:34,480 Speaker 1: that's how we're gonna refer to it. And in the 249 00:11:34,480 --> 00:11:36,640 Speaker 1: hands of one person it can be used wisely. In 250 00:11:36,640 --> 00:11:38,560 Speaker 1: in the hands of another, it can be used for 251 00:11:38,760 --> 00:11:42,360 Speaker 1: great harm. Yeah, man, that's right. So, generally speaking, good 252 00:11:42,400 --> 00:11:45,680 Speaker 1: debt is borrowing money for something that will appreciate over 253 00:11:45,720 --> 00:11:48,440 Speaker 1: time and so so an example of this definitely would 254 00:11:48,440 --> 00:11:51,360 Speaker 1: be mortgages. Right, you buy a house or you know, 255 00:11:51,360 --> 00:11:53,160 Speaker 1: you mortgage with the house, and over time you expect 256 00:11:53,200 --> 00:11:56,200 Speaker 1: it to go up and value. Generally speaking, we would 257 00:11:56,200 --> 00:11:57,880 Speaker 1: call that a good debt. Again, we don't want to 258 00:11:57,920 --> 00:12:01,079 Speaker 1: put up this blanket statement because if someone hears that, oh, 259 00:12:01,120 --> 00:12:03,400 Speaker 1: mortgage debt is a good debt, we don't want to 260 00:12:03,440 --> 00:12:06,640 Speaker 1: encourage someone to go out and rack up a massive 261 00:12:06,679 --> 00:12:10,080 Speaker 1: mortgage payment, right, because that might be bad for their situation. 262 00:12:10,120 --> 00:12:13,400 Speaker 1: It just depends on the individual. But generally speaking, a 263 00:12:13,440 --> 00:12:26,080 Speaker 1: mortgage is considered good debt. Yeah, So let's dig a 264 00:12:26,080 --> 00:12:28,559 Speaker 1: little bit deeper into that map, especially in this interest 265 00:12:28,679 --> 00:12:32,200 Speaker 1: rate environment, having a mortgage at a low interest rate, 266 00:12:32,280 --> 00:12:35,040 Speaker 1: and many people out there listening that have a home 267 00:12:35,120 --> 00:12:37,839 Speaker 1: with a mortgage are probably paying somewhere between three and 268 00:12:37,880 --> 00:12:40,640 Speaker 1: a half and four and a half percent on that mortgage. 269 00:12:40,720 --> 00:12:44,199 Speaker 1: Record lows for mortgage interest rates. Yeah, and so considering 270 00:12:44,360 --> 00:12:47,800 Speaker 1: where rates are headed and the fact that you probably 271 00:12:47,800 --> 00:12:50,560 Speaker 1: have something locked in for a long period of time, 272 00:12:50,960 --> 00:12:54,240 Speaker 1: that makes it really smart to actually hold onto that 273 00:12:54,360 --> 00:12:57,719 Speaker 1: low interest rate debt and use the surplus that you 274 00:12:57,800 --> 00:13:01,120 Speaker 1: might have put towards paying it down more quickly into 275 00:13:01,160 --> 00:13:04,400 Speaker 1: something that is even more beneficial. So something like you 276 00:13:04,480 --> 00:13:07,600 Speaker 1: and I would say investing in more real estate, buying 277 00:13:07,640 --> 00:13:11,040 Speaker 1: something that will also appreciate in value over time and 278 00:13:11,160 --> 00:13:13,600 Speaker 1: provide cash flow every month. And if you're not interested 279 00:13:13,640 --> 00:13:17,520 Speaker 1: in that, well, then putting more away in your retirement accounts, 280 00:13:17,520 --> 00:13:19,120 Speaker 1: in your four o one K or your wrath Hi ray, 281 00:13:19,360 --> 00:13:22,679 Speaker 1: those would be better uses of your extra funds to 282 00:13:22,880 --> 00:13:26,160 Speaker 1: save for the future than to try and pay down 283 00:13:26,240 --> 00:13:28,880 Speaker 1: your low interest rate mortgage more quickly. Yeah. And so 284 00:13:28,960 --> 00:13:33,360 Speaker 1: basically what what you're describing is leveraging debt. And so essentially, 285 00:13:33,400 --> 00:13:36,080 Speaker 1: when you have, say specifically a mortgage that's locked in 286 00:13:36,120 --> 00:13:39,880 Speaker 1: at a low rate four percent these days, right around there. 287 00:13:40,320 --> 00:13:42,000 Speaker 1: And if you can, say, make ten percent in the 288 00:13:42,040 --> 00:13:44,680 Speaker 1: stock market, well you're you've got a spread of six percent. 289 00:13:45,120 --> 00:13:48,480 Speaker 1: And so instead of taking your money and paying it 290 00:13:48,520 --> 00:13:52,679 Speaker 1: down towards your mortgage, which is essentially and effectively gonna earn, 291 00:13:52,720 --> 00:13:54,559 Speaker 1: earn you four percent, right, because if you're paying four 292 00:13:54,559 --> 00:13:57,560 Speaker 1: percent and you're able to eliminate that mortgage, you're saving 293 00:13:57,559 --> 00:14:01,040 Speaker 1: yourself four percents. You're making four percent um. Instead of 294 00:14:01,080 --> 00:14:03,559 Speaker 1: doing that, you're gonna make six percent. But yeah, that's 295 00:14:03,600 --> 00:14:05,640 Speaker 1: the general idea. Yeah, and I think that doesn't even 296 00:14:05,679 --> 00:14:08,800 Speaker 1: take into account, you know, the potential tax implications where 297 00:14:08,920 --> 00:14:14,040 Speaker 1: your home mortgage is tax deductible and your four percent 298 00:14:14,200 --> 00:14:17,800 Speaker 1: interest rate is actually effectively much lower than that. And 299 00:14:17,840 --> 00:14:19,960 Speaker 1: then on top of that, investing in the stock market 300 00:14:20,240 --> 00:14:23,360 Speaker 1: in tax advantage accounts could save you money on taxes 301 00:14:23,400 --> 00:14:26,760 Speaker 1: either now or in the future, and that creates an 302 00:14:26,760 --> 00:14:28,680 Speaker 1: even greater spread. Yeah, it's like a double w amy 303 00:14:28,920 --> 00:14:32,360 Speaker 1: where yeah, where the spreads even wider. Yea. So the 304 00:14:32,360 --> 00:14:34,320 Speaker 1: main thing I would tell people to be cautious of 305 00:14:34,600 --> 00:14:38,040 Speaker 1: is overleveraging themselves and taking on more debt than they 306 00:14:38,040 --> 00:14:40,480 Speaker 1: can actually afford to pay off on a monthly basis. 307 00:14:41,360 --> 00:14:43,600 Speaker 1: So it's not wise to take out low interest rate debt, 308 00:14:43,640 --> 00:14:46,960 Speaker 1: even just for the purpose of trying to finagle a spread. 309 00:14:47,240 --> 00:14:50,880 Speaker 1: And if the stock market experiences a prolonged trough, that 310 00:14:50,880 --> 00:14:52,720 Speaker 1: could certainly create a lot of worry and a lot 311 00:14:52,720 --> 00:14:55,120 Speaker 1: of sleepless nights for you. But I guess the main 312 00:14:55,400 --> 00:14:59,120 Speaker 1: key here is if you have a mortgage that is 313 00:14:59,160 --> 00:15:02,040 Speaker 1: at a low interest straight and you have extra cash 314 00:15:02,120 --> 00:15:04,680 Speaker 1: to pay it off, is that the wisest use of 315 00:15:04,720 --> 00:15:08,520 Speaker 1: your funds? Yeah? Man, So again this is how a 316 00:15:08,560 --> 00:15:11,480 Speaker 1: mortgage can be considered a good debt. Uh. It makes 317 00:15:11,520 --> 00:15:14,000 Speaker 1: sense if you're looking at it from a number standpoint, right, 318 00:15:14,040 --> 00:15:17,480 Speaker 1: because if you're locked in to a lower rate, you 319 00:15:17,520 --> 00:15:19,320 Speaker 1: can do a lot of other things with that money 320 00:15:19,400 --> 00:15:22,200 Speaker 1: than paying down that low interest debt. It's tough to 321 00:15:22,240 --> 00:15:25,120 Speaker 1: say these sort of general blanket statements of like mortgage 322 00:15:25,160 --> 00:15:28,120 Speaker 1: debt is good, but generally speaking, you know, the numbers 323 00:15:28,600 --> 00:15:31,720 Speaker 1: can make sense for you to maintain your mortgage and 324 00:15:31,880 --> 00:15:34,560 Speaker 1: to not pay that off, and ultimately you're going to 325 00:15:34,600 --> 00:15:37,880 Speaker 1: budget for a place to live every month, whether that's 326 00:15:37,960 --> 00:15:40,520 Speaker 1: rent or a mortgage, right, And so the thing I 327 00:15:40,600 --> 00:15:44,080 Speaker 1: want to warn people away from is from paying down 328 00:15:44,200 --> 00:15:46,360 Speaker 1: low interest rate debt more quickly than they need to 329 00:15:46,400 --> 00:15:49,480 Speaker 1: when their money could be allocated better elsewhere. That's right, 330 00:15:49,800 --> 00:15:51,840 Speaker 1: I think, at least at this point in time where 331 00:15:51,840 --> 00:15:55,360 Speaker 1: we're at with interest rates, Mortgages are just the perfect 332 00:15:55,360 --> 00:15:58,560 Speaker 1: example of that. To have something that is locked in 333 00:15:58,720 --> 00:16:01,040 Speaker 1: at such a low rate for such a long period 334 00:16:01,080 --> 00:16:03,400 Speaker 1: of time, there's a good chance that as you earn 335 00:16:03,480 --> 00:16:06,680 Speaker 1: more in your job or as you cut back your expenses, 336 00:16:06,680 --> 00:16:10,800 Speaker 1: that those extra savings should go more towards appreciating assets 337 00:16:10,920 --> 00:16:13,600 Speaker 1: or towards investing in the stock market than just towards 338 00:16:13,640 --> 00:16:16,960 Speaker 1: servicing your debt at a faster rate. Yea man. So, 339 00:16:17,080 --> 00:16:20,440 Speaker 1: in the end, good debt is borrowing for things that 340 00:16:20,480 --> 00:16:23,000 Speaker 1: will go up and value. When you're locked into a 341 00:16:23,000 --> 00:16:25,560 Speaker 1: low rate, that allows you to free up that money 342 00:16:25,600 --> 00:16:28,200 Speaker 1: to then invest in other things that are going to 343 00:16:28,280 --> 00:16:30,720 Speaker 1: earn more than what you're paying against that debt. So 344 00:16:30,760 --> 00:16:33,040 Speaker 1: that's good debt, Joel, you want to talk something about 345 00:16:33,120 --> 00:16:36,800 Speaker 1: bad debt, yeah, Matt, So, bad debt is essentially borrowing 346 00:16:36,840 --> 00:16:40,360 Speaker 1: money to pay for something that depreciates and usually at 347 00:16:40,400 --> 00:16:44,320 Speaker 1: a higher interest rate. For example, in our episode about cars, 348 00:16:44,960 --> 00:16:47,200 Speaker 1: we said that taking out loans for an automobile is 349 00:16:47,320 --> 00:16:50,920 Speaker 1: a terrible idea because of the rapid rate of depreciation, right, 350 00:16:51,440 --> 00:16:54,560 Speaker 1: And so ultimately it's a bad debt because even though 351 00:16:54,600 --> 00:16:56,920 Speaker 1: you might get a super low interest rate, it's just 352 00:16:57,040 --> 00:16:59,760 Speaker 1: not smart to finance things that are going to depreciate 353 00:16:59,800 --> 00:17:02,800 Speaker 1: that weekly. Yeah, man, that's right. It's just consumption, you know. 354 00:17:03,200 --> 00:17:06,359 Speaker 1: Or oftentimes it's called consumer debt because literally you're just 355 00:17:06,520 --> 00:17:10,000 Speaker 1: consuming it, like it's just something that you're eating. You're 356 00:17:10,000 --> 00:17:14,399 Speaker 1: just like feeding your belly, and nothing ever comes of it, 357 00:17:14,520 --> 00:17:16,920 Speaker 1: you know this, It's nothing that grows at all. Yeah. 358 00:17:16,920 --> 00:17:19,240 Speaker 1: So other examples of that would be credit card debt, 359 00:17:19,640 --> 00:17:24,439 Speaker 1: title loans, buying a boat, right or a jet ski. Uh, 360 00:17:24,480 --> 00:17:26,680 Speaker 1: there are I don't think I hear anyone that ever 361 00:17:26,920 --> 00:17:29,440 Speaker 1: is happy about buying a boat. You know, well they 362 00:17:29,480 --> 00:17:31,480 Speaker 1: you know, they say that the best day two best 363 00:17:31,520 --> 00:17:32,879 Speaker 1: days in your life for the days you bought the 364 00:17:32,880 --> 00:17:34,240 Speaker 1: boat in the day you sold it, so in the 365 00:17:34,280 --> 00:17:37,640 Speaker 1: day that it sinks right to collect the insurance check. 366 00:17:38,920 --> 00:17:41,800 Speaker 1: But just like good debt can create a positive spread 367 00:17:42,119 --> 00:17:45,200 Speaker 1: between the low interest rate debt and the higher interest 368 00:17:45,280 --> 00:17:48,280 Speaker 1: rate you can earn on investing, bad debt does pretty 369 00:17:48,359 --> 00:17:50,960 Speaker 1: much the exact opposite. And creates a gap of loss 370 00:17:51,040 --> 00:17:53,639 Speaker 1: that you just can't overcome. A lot of times people 371 00:17:53,680 --> 00:17:55,480 Speaker 1: think that they can take that money that they would 372 00:17:55,480 --> 00:17:57,840 Speaker 1: have put down to paying for whatever that they're purchasing 373 00:17:57,920 --> 00:18:00,560 Speaker 1: in cash, and instead of paying for that kind they think, oh, 374 00:18:00,600 --> 00:18:02,800 Speaker 1: I can take this now and invest it. But what 375 00:18:02,920 --> 00:18:04,960 Speaker 1: they're not really taking into account is that, well, first 376 00:18:04,960 --> 00:18:07,640 Speaker 1: of all, you've got your interest payments on that, right, 377 00:18:07,920 --> 00:18:09,240 Speaker 1: But then on top of that, you've got that rate 378 00:18:09,240 --> 00:18:12,120 Speaker 1: of depreciation, and say specifically for a car, you're looking 379 00:18:12,160 --> 00:18:15,719 Speaker 1: at close to a year in depreciation on a new vehicle. 380 00:18:16,040 --> 00:18:18,560 Speaker 1: And so if you've got say I don't even know 381 00:18:18,560 --> 00:18:20,440 Speaker 1: if this is a current interest rate for a car, 382 00:18:20,480 --> 00:18:22,000 Speaker 1: but say you're paying five percent in a car and 383 00:18:22,040 --> 00:18:24,680 Speaker 1: you're looking at fift and percent and depreciation, you're looking 384 00:18:24,680 --> 00:18:28,199 Speaker 1: at needing to make at least in some investment in 385 00:18:28,280 --> 00:18:32,359 Speaker 1: order to even break even, right, And that's really not possible. 386 00:18:32,520 --> 00:18:37,200 Speaker 1: And anyone that's promising you that runaway, and exactly exactly, 387 00:18:37,560 --> 00:18:40,480 Speaker 1: And so just keep in mind that what characterizes bad 388 00:18:40,520 --> 00:18:44,240 Speaker 1: debt is borrowing for things that depreciate and value that 389 00:18:44,359 --> 00:18:47,160 Speaker 1: ultimately will have no value and ultimately in the end 390 00:18:47,520 --> 00:18:49,919 Speaker 1: make you poor. Yeah, And the tough thing is that 391 00:18:50,000 --> 00:18:53,160 Speaker 1: in our culture right now, there's access to cheap debt 392 00:18:53,200 --> 00:18:57,000 Speaker 1: for all sorts of things, and we can find ourselves 393 00:18:57,040 --> 00:18:59,679 Speaker 1: paying monthly payments on a crazy variety of items. At 394 00:18:59,680 --> 00:19:02,960 Speaker 1: this point. You can take out a loan for dental work, 395 00:19:03,480 --> 00:19:07,240 Speaker 1: or a new air conditioner or a sofa. There's a 396 00:19:07,280 --> 00:19:09,600 Speaker 1: million things out there right that you can quickly and 397 00:19:09,640 --> 00:19:12,680 Speaker 1: easily take out a loan for. But with some thoughtfulness 398 00:19:12,720 --> 00:19:15,399 Speaker 1: and discipline, you can avoid that consumer culture and that 399 00:19:15,520 --> 00:19:18,600 Speaker 1: idea that taking on debt willy nilly for every little 400 00:19:18,640 --> 00:19:21,399 Speaker 1: inconvenience that you encounter or every little thing that you 401 00:19:21,640 --> 00:19:24,760 Speaker 1: consider buying, staying away from taking on debt just because 402 00:19:24,760 --> 00:19:27,720 Speaker 1: it's cheap, I mean, that's just smart cool Joel. Yeah, 403 00:19:27,720 --> 00:19:30,720 Speaker 1: So those are generally speaking, the kind of differences that 404 00:19:30,720 --> 00:19:33,960 Speaker 1: you're going to see between good debt in between bad debt. Again, 405 00:19:34,040 --> 00:19:37,080 Speaker 1: these are sort of relative terms, So we're a little 406 00:19:37,080 --> 00:19:39,760 Speaker 1: hesitant to categorize some debt as always being good debt 407 00:19:39,840 --> 00:19:42,639 Speaker 1: or categorizing some debt as always being bad, because so 408 00:19:42,720 --> 00:19:45,679 Speaker 1: much of it depends on what you're gonna do with 409 00:19:45,720 --> 00:19:48,240 Speaker 1: that money, right, you know, it's a tool, like it's 410 00:19:48,280 --> 00:19:51,399 Speaker 1: not necessarily good or bad. It kind of depends on 411 00:19:51,480 --> 00:19:53,439 Speaker 1: what you're going to do with that. And in the 412 00:19:53,440 --> 00:19:56,600 Speaker 1: hands of a smart investor who knows what they're doing 413 00:19:56,640 --> 00:19:59,240 Speaker 1: with their money, that can leads to more wealth for them, 414 00:19:59,560 --> 00:20:01,560 Speaker 1: And on the coentrary and the hands of someone who 415 00:20:01,680 --> 00:20:06,360 Speaker 1: is just using that sort of financing to basically finance 416 00:20:06,480 --> 00:20:10,280 Speaker 1: their life to pay for a consumption and their lifestyle, 417 00:20:11,160 --> 00:20:13,240 Speaker 1: that is not going to lead to more wealth. If 418 00:20:13,280 --> 00:20:15,560 Speaker 1: you're considering taking on more debt, I want you to 419 00:20:15,560 --> 00:20:17,440 Speaker 1: be skeptical, I want you to be wary, and I 420 00:20:17,520 --> 00:20:20,360 Speaker 1: want you to be prudent. We're trying to cut through 421 00:20:20,359 --> 00:20:23,600 Speaker 1: the nuances of debt and how it affects you, what's good, 422 00:20:23,640 --> 00:20:26,640 Speaker 1: what's bad, and we're about to get into some more 423 00:20:26,640 --> 00:20:30,320 Speaker 1: practical tips on on how you actually apply these principles. Ultimately, 424 00:20:30,359 --> 00:20:31,720 Speaker 1: some of the debt that's in your life that you 425 00:20:31,800 --> 00:20:33,840 Speaker 1: might be trying to pay down more quickly, you might 426 00:20:33,880 --> 00:20:35,800 Speaker 1: want to hold off on paying down, but don't let 427 00:20:35,800 --> 00:20:38,520 Speaker 1: this episode be an excuse to go out and take 428 00:20:38,560 --> 00:20:40,720 Speaker 1: on debt that you don't need and that you can't 429 00:20:40,720 --> 00:20:43,000 Speaker 1: afford right to pay for things that are going to 430 00:20:43,080 --> 00:20:45,600 Speaker 1: depreciate in value and even if you're taking out debt 431 00:20:45,680 --> 00:20:48,119 Speaker 1: to to buy something like a home or to go 432 00:20:48,160 --> 00:20:51,399 Speaker 1: back and get something like a master's even on smarter 433 00:20:51,520 --> 00:20:54,159 Speaker 1: debt choices like that, you're going to want to crunch 434 00:20:54,200 --> 00:20:56,560 Speaker 1: the numbers and make sure that that purchase makes sense 435 00:20:56,640 --> 00:20:59,560 Speaker 1: for you as an individual. Yeah, man, this is tricky, right, 436 00:21:00,160 --> 00:21:02,119 Speaker 1: Like this is hard. It's it's kind of hard to 437 00:21:02,160 --> 00:21:06,320 Speaker 1: talk about because yes, there are generally speaking things and 438 00:21:06,359 --> 00:21:08,960 Speaker 1: products out there, right, tools that are good, and there 439 00:21:09,000 --> 00:21:11,720 Speaker 1: are other products out there that are generally bad. But 440 00:21:11,920 --> 00:21:14,600 Speaker 1: so much of this depends on the individual at the 441 00:21:14,640 --> 00:21:17,640 Speaker 1: stage of life they're in. It's such a personal decision 442 00:21:18,040 --> 00:21:20,919 Speaker 1: and so much of this comes down to the individual 443 00:21:21,480 --> 00:21:24,760 Speaker 1: that Yeah, like Joel said, just be careful because even 444 00:21:24,800 --> 00:21:27,760 Speaker 1: the smartest thing on paper for you as an individual 445 00:21:27,800 --> 00:21:29,960 Speaker 1: could be terrible for your finances. Yeah, and just a 446 00:21:30,040 --> 00:21:32,280 Speaker 1: quick example, I read this great article in the New 447 00:21:32,359 --> 00:21:35,879 Speaker 1: York Times just last week about people that decided to 448 00:21:35,960 --> 00:21:38,000 Speaker 1: go to college and take on student loans but then 449 00:21:38,080 --> 00:21:42,120 Speaker 1: didn't finish college. And so most financial experts would say, 450 00:21:42,359 --> 00:21:44,879 Speaker 1: taking on student loans to go to college, that's a 451 00:21:45,000 --> 00:21:47,880 Speaker 1: wise debt to take on, right, But if you're not 452 00:21:47,960 --> 00:21:50,639 Speaker 1: able to finish college. If you take on more loans 453 00:21:50,680 --> 00:21:53,600 Speaker 1: than you can handle and you don't graduate and find 454 00:21:53,600 --> 00:21:56,880 Speaker 1: a job in that profession, well, that decision to take 455 00:21:56,920 --> 00:21:59,119 Speaker 1: out student loans for an education that you didn't finish 456 00:21:59,400 --> 00:22:02,719 Speaker 1: well actually end up harming you more. Yeah. So that's 457 00:22:02,760 --> 00:22:05,440 Speaker 1: why these debt decisions do come down to you as 458 00:22:05,560 --> 00:22:08,040 Speaker 1: a person in so many ways. Chedel It's good that 459 00:22:08,080 --> 00:22:10,640 Speaker 1: you mentioned student loans because that's an area where it's 460 00:22:10,680 --> 00:22:13,080 Speaker 1: kind of gray, right, Like a lot of folks would 461 00:22:13,080 --> 00:22:14,880 Speaker 1: say that, yes, this is a great thing. Like you said, 462 00:22:14,880 --> 00:22:16,919 Speaker 1: a lot of financial advisors would say, certainly, this is 463 00:22:16,920 --> 00:22:19,720 Speaker 1: going to increase potential earnings down the road. You know, 464 00:22:19,760 --> 00:22:21,440 Speaker 1: it's ten years down the road, you're gonna make way 465 00:22:21,440 --> 00:22:26,439 Speaker 1: more money. Well it could, you know. And and like 466 00:22:26,480 --> 00:22:28,639 Speaker 1: you said, there's so many people that are getting saddle 467 00:22:28,720 --> 00:22:30,639 Speaker 1: with tons of student loan debt. I mean it's in 468 00:22:30,680 --> 00:22:33,439 Speaker 1: the trillions right now in the United States. Yeah, I mean, 469 00:22:33,480 --> 00:22:37,000 Speaker 1: statistics bear out, Matt that if you get a college education, 470 00:22:37,040 --> 00:22:38,720 Speaker 1: you will more than make your money back on that 471 00:22:38,800 --> 00:22:41,399 Speaker 1: investment over the long term. A couple of the keys 472 00:22:41,800 --> 00:22:44,440 Speaker 1: when you're thinking about taking out student loans are trying 473 00:22:44,440 --> 00:22:46,360 Speaker 1: to keep them to a minimum and try to take 474 00:22:46,400 --> 00:22:49,119 Speaker 1: out as much low interest rate student loan debt as 475 00:22:49,160 --> 00:22:51,800 Speaker 1: you can and ultimately get a degree in something that 476 00:22:51,960 --> 00:22:54,040 Speaker 1: interest you and that will actually help you in the 477 00:22:54,080 --> 00:22:56,240 Speaker 1: real world. I think if you stick to those principles 478 00:22:56,240 --> 00:22:58,200 Speaker 1: when you're taking out student loan debt, there's a really 479 00:22:58,200 --> 00:23:01,359 Speaker 1: good likelihood that that is a smart decision for you. Yeah, man, 480 00:23:01,400 --> 00:23:03,639 Speaker 1: that's a good word, Like, actually consider how much he 481 00:23:03,720 --> 00:23:05,119 Speaker 1: might be making, right, It's sort of like, I mean, 482 00:23:05,160 --> 00:23:07,320 Speaker 1: it's a business decision. It's like how much money am 483 00:23:07,359 --> 00:23:10,119 Speaker 1: I willing to invest now? And what will the end 484 00:23:10,119 --> 00:23:13,000 Speaker 1: profit potential be? Look at it that way. You know, 485 00:23:13,000 --> 00:23:15,080 Speaker 1: if you're going into it from like an art history 486 00:23:15,520 --> 00:23:18,280 Speaker 1: major standpoint, no offense to all the art history majors 487 00:23:18,280 --> 00:23:22,880 Speaker 1: out there, but obscure Russian literature major, but know what 488 00:23:22,920 --> 00:23:25,639 Speaker 1: the potentials are for that and treat it like a 489 00:23:25,640 --> 00:23:27,919 Speaker 1: business because essentially it is. Because in the end, if 490 00:23:27,920 --> 00:23:29,600 Speaker 1: you're stuck with loads of debt and you have a 491 00:23:29,600 --> 00:23:31,639 Speaker 1: degree that doesn't earn you the type of income to 492 00:23:31,760 --> 00:23:34,240 Speaker 1: make those payments, then you're gonna be in a world 493 00:23:34,280 --> 00:23:45,680 Speaker 1: of hurt from a financial standpoint. Angel. So you just 494 00:23:45,720 --> 00:23:48,080 Speaker 1: mentioned some practical tips for student loans you want to 495 00:23:48,080 --> 00:23:51,320 Speaker 1: mention some other ones for folks. Ultimately, when you're considering 496 00:23:51,359 --> 00:23:54,000 Speaker 1: what debts you want to pay down, the first thing 497 00:23:54,040 --> 00:23:55,879 Speaker 1: you always have to be careful to do is to 498 00:23:56,760 --> 00:24:00,840 Speaker 1: at least pay the minimums on every monthly payment of 499 00:24:00,880 --> 00:24:03,280 Speaker 1: debt that you have. If you are late or you 500 00:24:03,359 --> 00:24:06,800 Speaker 1: miss a payment for your credit card bill, your student 501 00:24:06,840 --> 00:24:11,320 Speaker 1: loan payment, your mortgage, those things have consequences that can 502 00:24:11,400 --> 00:24:15,479 Speaker 1: ultimately add interests and penalties to the debt you already have, 503 00:24:15,920 --> 00:24:18,159 Speaker 1: and you don't want to be in that position. So 504 00:24:18,160 --> 00:24:21,280 Speaker 1: paying the minimum on everything is the place to start. Yeah, man, 505 00:24:21,359 --> 00:24:23,800 Speaker 1: that's right. Make sure that those minimum payments are met. 506 00:24:23,840 --> 00:24:25,840 Speaker 1: That's the first thing. The next thing, though, if your 507 00:24:25,840 --> 00:24:29,960 Speaker 1: employer is offering a company match towards your retirement savings, 508 00:24:30,240 --> 00:24:33,400 Speaker 1: that is something you pretty much always want to continue 509 00:24:33,440 --> 00:24:36,400 Speaker 1: to fund pretty much regardless of what your interest rates 510 00:24:36,440 --> 00:24:39,000 Speaker 1: are on any other debt that you have. Right A 511 00:24:39,040 --> 00:24:43,840 Speaker 1: lot of employers will match up to six percent of 512 00:24:44,000 --> 00:24:46,320 Speaker 1: what you contribute. Some will even match a pent up 513 00:24:46,359 --> 00:24:48,720 Speaker 1: to six percent. It's not as common, but I mean, 514 00:24:48,760 --> 00:24:53,520 Speaker 1: you can't beat that fifty to on your money, even 515 00:24:53,520 --> 00:24:55,960 Speaker 1: if you have the highest credit card debt. Hopefully, you're 516 00:24:55,960 --> 00:24:59,400 Speaker 1: not paying anywhere near that would be insane. So even 517 00:24:59,400 --> 00:25:01,760 Speaker 1: though it might feel you're under a high percentage rate, 518 00:25:02,160 --> 00:25:04,280 Speaker 1: make sure that you're continuing to contribute to your four 519 00:25:04,400 --> 00:25:07,520 Speaker 1: one K if your company is offering a match, before 520 00:25:07,560 --> 00:25:09,400 Speaker 1: you start looking at pain down some of that high 521 00:25:09,440 --> 00:25:12,920 Speaker 1: interest debt. Hopefully you don't have any high interest debt 522 00:25:13,040 --> 00:25:16,639 Speaker 1: that is greater than if you do that, that's probably 523 00:25:16,680 --> 00:25:19,679 Speaker 1: first in line, but hopefully that's not the case, so 524 00:25:19,720 --> 00:25:22,560 Speaker 1: make sure you get that match. After that, the next 525 00:25:22,560 --> 00:25:24,720 Speaker 1: step you'll want to take with extra funds that you 526 00:25:24,760 --> 00:25:29,040 Speaker 1: have is to start paying down the highest interest rate debt, 527 00:25:29,080 --> 00:25:31,439 Speaker 1: which is likely a credit card that you have in 528 00:25:31,480 --> 00:25:34,320 Speaker 1: your life. Nice, So, Joel, I think a big question 529 00:25:34,320 --> 00:25:37,840 Speaker 1: that folks would have then is to differentiate between what 530 00:25:38,400 --> 00:25:41,320 Speaker 1: makes up a low interest payment versus like a high 531 00:25:41,400 --> 00:25:43,840 Speaker 1: interest payment, like you said right, like a credit card 532 00:25:43,920 --> 00:25:46,320 Speaker 1: that has a high percentage rate. What is that like? 533 00:25:46,480 --> 00:25:49,200 Speaker 1: Where does that need to land before someone starts really 534 00:25:49,240 --> 00:25:53,439 Speaker 1: attacking that high interest rate? Sure, I think there's a 535 00:25:53,480 --> 00:25:55,520 Speaker 1: good kind of rule of thumb that people can work with, 536 00:25:55,880 --> 00:25:59,280 Speaker 1: and I think the maybe line of demarcation is somewhere 537 00:25:59,320 --> 00:26:02,399 Speaker 1: in that six eight percent range and between six and 538 00:26:02,440 --> 00:26:04,720 Speaker 1: eight is kind of this gray area that you kind 539 00:26:04,720 --> 00:26:08,000 Speaker 1: of have to exercise some wisdom on. But really, any 540 00:26:08,040 --> 00:26:10,400 Speaker 1: debt that you have above an eight percent interest rate 541 00:26:10,480 --> 00:26:12,160 Speaker 1: is debt that you want to be working to pay 542 00:26:12,200 --> 00:26:15,000 Speaker 1: off as quickly as possible pretty seriously. Yeah, and so 543 00:26:15,840 --> 00:26:20,040 Speaker 1: in particular, the highest interest rate debt that you have first. 544 00:26:20,359 --> 00:26:25,320 Speaker 1: So example, you have three credit cards, each with balances 545 00:26:25,400 --> 00:26:28,879 Speaker 1: of four thousand dollars for a total of twelve dollars 546 00:26:28,880 --> 00:26:31,119 Speaker 1: in debt, and one credit card has an interest rate 547 00:26:31,160 --> 00:26:34,280 Speaker 1: of another has an interest rate of nineteen percent, and 548 00:26:34,320 --> 00:26:36,440 Speaker 1: the other one has an interest rate of twelve percent 549 00:26:36,560 --> 00:26:43,400 Speaker 1: because it's with a credit union. Um, it's such a nerd. Ultimately, 550 00:26:43,440 --> 00:26:47,320 Speaker 1: you're gonna want to start paying off the first, paying 551 00:26:47,320 --> 00:26:49,679 Speaker 1: the minimums on the nineteen and the fourteen. Once you 552 00:26:49,680 --> 00:26:52,719 Speaker 1: get the percent credit card paid off, you'll move on 553 00:26:52,760 --> 00:26:55,760 Speaker 1: to the nineteen percent credit card and and funnel as 554 00:26:55,800 --> 00:26:58,639 Speaker 1: much extra money as you can towards that debt until 555 00:26:58,680 --> 00:27:00,600 Speaker 1: you pay that off while paying them in on the 556 00:27:00,600 --> 00:27:03,040 Speaker 1: fourteen percent credit card, and then you'll move on to 557 00:27:03,119 --> 00:27:05,960 Speaker 1: the fourteen percent paying that off as quickly as possible. 558 00:27:06,000 --> 00:27:07,760 Speaker 1: But any debts that you have kind of below that 559 00:27:07,840 --> 00:27:10,120 Speaker 1: six eight percent rate, Those are going to be debts 560 00:27:10,160 --> 00:27:12,840 Speaker 1: that you're going to want to continue to pay just 561 00:27:12,960 --> 00:27:15,720 Speaker 1: the minimum amount on. So if in addition to those 562 00:27:15,720 --> 00:27:19,560 Speaker 1: credit cards, you have a mortgage and student loans that 563 00:27:19,600 --> 00:27:22,720 Speaker 1: are both below five or six percent, you don't even 564 00:27:22,800 --> 00:27:25,760 Speaker 1: think about starting to pay those down more quickly until 565 00:27:25,800 --> 00:27:29,000 Speaker 1: you've eliminated all of that credit card debt. Yeah, man, certainly, 566 00:27:29,000 --> 00:27:31,280 Speaker 1: and that could even be considered good debt. Right Like 567 00:27:31,320 --> 00:27:33,639 Speaker 1: those mortgages and the different payments that you have at 568 00:27:33,680 --> 00:27:36,560 Speaker 1: say four or five like, those are the rates where 569 00:27:36,960 --> 00:27:38,360 Speaker 1: you might say, you know what, I'm just gonna pay 570 00:27:38,400 --> 00:27:39,679 Speaker 1: this out to the end of the term, you know, 571 00:27:39,720 --> 00:27:41,920 Speaker 1: as agreed upon, because I know that I can take 572 00:27:41,960 --> 00:27:45,240 Speaker 1: that money instead of paying that down and invest that elsewhere. 573 00:27:45,600 --> 00:27:48,840 Speaker 1: So specific example, in my life, Matt, I have a 574 00:27:48,880 --> 00:27:51,800 Speaker 1: home mortgage at three point seven five percent for a 575 00:27:51,880 --> 00:27:54,360 Speaker 1: thirty year term, and on top of that, the interest 576 00:27:54,520 --> 00:27:56,960 Speaker 1: that I pay on that mortgage is tax deductible, which 577 00:27:57,000 --> 00:27:59,399 Speaker 1: makes my effective rate even lower than that. So if 578 00:27:59,440 --> 00:28:02,520 Speaker 1: I have four dollars extra a month, well, there's no 579 00:28:02,600 --> 00:28:05,240 Speaker 1: reason for me to pay down my mortgage more quickly. 580 00:28:05,560 --> 00:28:08,320 Speaker 1: I'd rather take that money and funnel it into my 581 00:28:08,359 --> 00:28:10,960 Speaker 1: four oh one k at work, essentially saving more for 582 00:28:11,080 --> 00:28:13,320 Speaker 1: my future and at the same time creating even more 583 00:28:13,359 --> 00:28:16,840 Speaker 1: tax advantages for myself. Yeah. Or taking that money and 584 00:28:16,880 --> 00:28:19,560 Speaker 1: putting that towards a down payment maybe on another property 585 00:28:19,800 --> 00:28:22,119 Speaker 1: that is going to be an investment, right, And so 586 00:28:22,160 --> 00:28:24,760 Speaker 1: that's what's so important and what's so key in this 587 00:28:24,880 --> 00:28:28,720 Speaker 1: in this situation is that if you take that additional money, 588 00:28:29,040 --> 00:28:31,720 Speaker 1: you need to invest it. Because if you instead just 589 00:28:31,760 --> 00:28:35,480 Speaker 1: take that additional money and you eat it, like you 590 00:28:35,480 --> 00:28:38,400 Speaker 1: put that to what your lifestyle, than from a number standpoint, 591 00:28:39,400 --> 00:28:43,040 Speaker 1: that extra fours would be better spent paying down that 592 00:28:43,200 --> 00:28:46,000 Speaker 1: three point seven mortgage because at least in that case 593 00:28:46,040 --> 00:28:49,600 Speaker 1: you'd be earning almost four percent. That's the biggest difference 594 00:28:49,680 --> 00:28:51,520 Speaker 1: is that you need to be disciplined and you kind 595 00:28:51,520 --> 00:28:54,000 Speaker 1: of need to know yourself. Let's follow off my example 596 00:28:54,080 --> 00:28:56,200 Speaker 1: and say I had an extra four dollars a month, 597 00:28:56,520 --> 00:29:00,560 Speaker 1: but instead of putting it towards four oh one k 598 00:29:00,800 --> 00:29:04,200 Speaker 1: or towards another investment property, I was setting it aside 599 00:29:04,240 --> 00:29:09,000 Speaker 1: in a Bank of America checking account, earning an annual 600 00:29:09,120 --> 00:29:12,280 Speaker 1: rate of return of point zero one oh, you mean 601 00:29:12,280 --> 00:29:16,200 Speaker 1: basically zero. That is a terrible idea, and my money 602 00:29:16,240 --> 00:29:18,840 Speaker 1: would be put to much better use paying down that 603 00:29:18,880 --> 00:29:21,120 Speaker 1: mortgage more quickly. You would at least be making close 604 00:29:21,160 --> 00:29:24,200 Speaker 1: to four percent in that example, and I also wouldn't 605 00:29:24,200 --> 00:29:28,200 Speaker 1: be paying taxes on the eight cents I would earn 606 00:29:28,280 --> 00:29:31,240 Speaker 1: throughout the year right on that checking account with the 607 00:29:31,240 --> 00:29:34,400 Speaker 1: big bank Yemen. On that note, I think it's worth mentioning, 608 00:29:34,680 --> 00:29:36,920 Speaker 1: uh that, instead of putting it in the Bank of 609 00:29:36,960 --> 00:29:40,200 Speaker 1: America checking account where it's earning basically zero percent. Mentioning 610 00:29:40,240 --> 00:29:43,120 Speaker 1: the money market account that even using recently, right the 611 00:29:43,160 --> 00:29:45,520 Speaker 1: c I T money market account. Yeah, and when I 612 00:29:45,520 --> 00:29:47,560 Speaker 1: signed up for it, the rate was one point seven 613 00:29:47,600 --> 00:29:49,560 Speaker 1: five and they've already bumped it up again to one 614 00:29:49,600 --> 00:29:52,920 Speaker 1: point eight five, which is kind of unheard of these days. 615 00:29:52,920 --> 00:29:54,720 Speaker 1: But yeah, that's awesome. So if you want to know 616 00:29:54,760 --> 00:29:57,040 Speaker 1: more about that, check out the article on our site 617 00:29:57,080 --> 00:29:59,480 Speaker 1: Poor Not Poor dot com. Yeah, you should easily be 618 00:29:59,480 --> 00:30:01,880 Speaker 1: able to find the article on our website, but if not, 619 00:30:01,960 --> 00:30:05,240 Speaker 1: just search c I T in the search bar. Yeah. 620 00:30:05,240 --> 00:30:06,680 Speaker 1: Mat So, when it comes down to that order of 621 00:30:06,720 --> 00:30:09,080 Speaker 1: paying off debt, you know, some people decide that they're 622 00:30:09,080 --> 00:30:11,920 Speaker 1: going to pay off their mortgage as quickly as possible, 623 00:30:11,960 --> 00:30:15,560 Speaker 1: even though it's what we would consider to be good debt. Yeah, 624 00:30:15,600 --> 00:30:17,520 Speaker 1: for some folks, it seems like it kind of weighs 625 00:30:17,520 --> 00:30:19,760 Speaker 1: on them, you know, like they can't sort of stomach it, 626 00:30:20,040 --> 00:30:22,040 Speaker 1: Like in their heads, it's like this big, terrible thing. 627 00:30:22,160 --> 00:30:24,120 Speaker 1: But what we're trying to encourage folks to do is 628 00:30:24,160 --> 00:30:26,680 Speaker 1: to think about it, because in reality, keeping that debt 629 00:30:26,720 --> 00:30:31,200 Speaker 1: around might be much smarter from a financial standpoint. We 630 00:30:31,240 --> 00:30:33,480 Speaker 1: can't speak to the emotions of it, because I mean, 631 00:30:33,520 --> 00:30:35,760 Speaker 1: ideally we want you to try to remove your emotions 632 00:30:35,760 --> 00:30:38,240 Speaker 1: from the situation and truly just look at the numbers 633 00:30:38,280 --> 00:30:40,880 Speaker 1: and to think, Okay, what does this actually mean if 634 00:30:40,880 --> 00:30:42,440 Speaker 1: I were to keep this debt around, what could I 635 00:30:42,440 --> 00:30:45,520 Speaker 1: actually do without money? Instead, there's a natural sort of 636 00:30:45,520 --> 00:30:48,320 Speaker 1: tendency to try to avoid debt because generally speaking, that's 637 00:30:48,320 --> 00:30:51,360 Speaker 1: good advice, Like I don't want to discount in one 638 00:30:51,360 --> 00:30:52,920 Speaker 1: that says, oh, yeah, you should pay off your debts, 639 00:30:52,960 --> 00:30:54,960 Speaker 1: because for a lot of folks out there in the 640 00:30:55,000 --> 00:30:57,320 Speaker 1: world today, that might be what they need to do. 641 00:30:57,760 --> 00:30:58,920 Speaker 1: But if you kind of want to take it to 642 00:30:58,920 --> 00:31:01,440 Speaker 1: the next level, and that's what we're here talking about, 643 00:31:01,880 --> 00:31:06,040 Speaker 1: look at the numbers and actually consider what you could 644 00:31:06,040 --> 00:31:08,800 Speaker 1: do with that money instead of paying down that low 645 00:31:08,880 --> 00:31:11,640 Speaker 1: interest debt man. And I think another argument that a 646 00:31:11,680 --> 00:31:13,920 Speaker 1: lot of folks have for wanting to just go ahead 647 00:31:13,920 --> 00:31:16,600 Speaker 1: and be done with debt and paying it down is 648 00:31:16,640 --> 00:31:19,440 Speaker 1: because they want to simplify even what we might consider 649 00:31:19,480 --> 00:31:22,160 Speaker 1: to be a good debt, right like a mortgage. They say, Oh, 650 00:31:22,200 --> 00:31:23,760 Speaker 1: I just want to kind of simplified where I don't 651 00:31:23,760 --> 00:31:25,720 Speaker 1: have to worry about it. Well, you know, if it's 652 00:31:25,720 --> 00:31:27,960 Speaker 1: on auto pay, you don't really have to think about 653 00:31:28,000 --> 00:31:30,760 Speaker 1: it like it's it's getting drafted every month, you know 654 00:31:30,880 --> 00:31:32,840 Speaker 1: the amount. It's not like it's going to be a surprise. 655 00:31:33,600 --> 00:31:35,080 Speaker 1: And then again, you can decide what you want to 656 00:31:35,120 --> 00:31:37,680 Speaker 1: do with that additional money. It doesn't have to necessarily 657 00:31:37,720 --> 00:31:40,120 Speaker 1: be a super complicated thing. You can just invest it 658 00:31:40,160 --> 00:31:42,880 Speaker 1: in the market, fairly simple. I think when people say 659 00:31:42,920 --> 00:31:45,520 Speaker 1: that they want to simplify their life from a financial standpoint, 660 00:31:45,760 --> 00:31:48,840 Speaker 1: I just think that argument is overused. So, yeah, if 661 00:31:48,880 --> 00:31:51,760 Speaker 1: you are already in debt, don't be in a rush 662 00:31:51,800 --> 00:31:54,680 Speaker 1: to pay that off necessarily. Yeah, I remember the rule 663 00:31:54,720 --> 00:31:57,000 Speaker 1: of thumb six percent. It's kind of a good figure 664 00:31:57,040 --> 00:31:59,080 Speaker 1: to go off of, and debts that you have that 665 00:31:59,200 --> 00:32:01,880 Speaker 1: are a lot higher than that, Well, those are debts 666 00:32:01,880 --> 00:32:04,840 Speaker 1: you're gonna want to tackle more quickly. Non variable interest 667 00:32:04,920 --> 00:32:08,760 Speaker 1: rate debts that you have below that six percent line, well, 668 00:32:08,920 --> 00:32:10,880 Speaker 1: those are debts that you can afford just to pay 669 00:32:10,920 --> 00:32:14,040 Speaker 1: as agreed over time. But if you're considering taking on 670 00:32:14,200 --> 00:32:16,960 Speaker 1: new debt, here's a couple of things to consider. Try 671 00:32:17,000 --> 00:32:19,520 Speaker 1: and keep your debt to a minimum and make sure 672 00:32:19,640 --> 00:32:23,000 Speaker 1: that your debt to income ratio doesn't get out of whack. Ultimately, 673 00:32:23,040 --> 00:32:25,800 Speaker 1: you want to be really really careful to shop around 674 00:32:25,800 --> 00:32:28,440 Speaker 1: for the best rates and find banks who are keeping 675 00:32:28,480 --> 00:32:31,200 Speaker 1: costs down. Make sure to compare lots of different options 676 00:32:31,200 --> 00:32:35,040 Speaker 1: when you're financing a home. Whatever you can do to 677 00:32:35,200 --> 00:32:38,120 Speaker 1: lower the rates and carrying costs of your debt is 678 00:32:38,120 --> 00:32:40,600 Speaker 1: pretty much always a good thing, Dude. I feel like 679 00:32:40,640 --> 00:32:42,760 Speaker 1: that's something that you are actually really good at. I 680 00:32:42,760 --> 00:32:44,880 Speaker 1: think you always end up shopping in around a bunch, 681 00:32:44,920 --> 00:32:46,800 Speaker 1: and I think that a lot of people don't do that, 682 00:32:46,880 --> 00:32:48,960 Speaker 1: and they kind of just go with the very first 683 00:32:49,000 --> 00:32:50,800 Speaker 1: bank that they call, or you know, like the first 684 00:32:50,840 --> 00:32:55,160 Speaker 1: mortgage mortgage lender that they're real to recommends because they're like, oh, yeah, 685 00:32:55,160 --> 00:32:56,680 Speaker 1: I talk to so and so. They do they do 686 00:32:56,720 --> 00:33:00,320 Speaker 1: great work and then they end up paying half a 687 00:33:00,320 --> 00:33:03,760 Speaker 1: point higher and the closing costs are a lot more. Yeah, 688 00:33:03,840 --> 00:33:06,320 Speaker 1: shop it around. That's that's that's huge. Yeah, and that 689 00:33:06,320 --> 00:33:10,200 Speaker 1: could end up meaning hundreds or more than a thousand 690 00:33:10,240 --> 00:33:12,040 Speaker 1: dollars on the day of closing, and then they could 691 00:33:12,160 --> 00:33:14,840 Speaker 1: end up meaning tens of thousands of dollars over the 692 00:33:14,880 --> 00:33:17,800 Speaker 1: life of your mortgage easily. All right, Matt. Back to 693 00:33:17,840 --> 00:33:22,200 Speaker 1: the beer, Hopping Frog's Infusion A coffee porter. Wait, what's 694 00:33:22,240 --> 00:33:25,880 Speaker 1: called infusion A as in like A like Canadian A. 695 00:33:26,840 --> 00:33:29,920 Speaker 1: I wish no, just the letter oh, as in like 696 00:33:30,120 --> 00:33:34,200 Speaker 1: this is infusion A and there's an infusion be yep, okay, sweet, 697 00:33:35,440 --> 00:33:38,320 Speaker 1: have you had an Infusion B or ce? No? But 698 00:33:38,360 --> 00:33:40,360 Speaker 1: if Hopping Frog wants to send us some, we'll totally 699 00:33:40,400 --> 00:33:43,240 Speaker 1: take it. Yeah, man, I don't want to put too 700 00:33:43,320 --> 00:33:47,320 Speaker 1: much weight on a brewery's labeling and like they're they're braining, 701 00:33:47,320 --> 00:33:50,440 Speaker 1: But I gotta be honest, not my favorite at all. 702 00:33:50,920 --> 00:33:53,280 Speaker 1: That being said, the beer is really good though. Yeah. 703 00:33:53,320 --> 00:33:55,840 Speaker 1: Even though porters aren't necessarily one of my favorite styles, 704 00:33:56,160 --> 00:33:58,240 Speaker 1: this is really nice. It's got that kind of peanut 705 00:33:58,240 --> 00:34:01,480 Speaker 1: butter chocolate coffee almost has like a recist cup kind 706 00:34:01,480 --> 00:34:04,280 Speaker 1: of quality, very nice like that. Even though the mouth 707 00:34:04,320 --> 00:34:06,840 Speaker 1: feel is a little bit thin, it's still a kind 708 00:34:06,840 --> 00:34:08,719 Speaker 1: of fun beer to drink. Yeah, I think for a 709 00:34:08,719 --> 00:34:10,960 Speaker 1: lot of folks out there that aren't drawn to the 710 00:34:11,160 --> 00:34:13,479 Speaker 1: hobby sort of bitter I p a S that they've 711 00:34:13,480 --> 00:34:15,560 Speaker 1: had out there. If you know you don't like I 712 00:34:15,680 --> 00:34:18,040 Speaker 1: PA s, then porters are are definitely kind of the 713 00:34:18,440 --> 00:34:21,080 Speaker 1: porters and stouts or beers you want to try and yeah, 714 00:34:21,120 --> 00:34:23,359 Speaker 1: look this one up. This might be one that you 715 00:34:23,400 --> 00:34:25,680 Speaker 1: find yourself drawn to. Let's go ahead and do a 716 00:34:25,719 --> 00:34:29,360 Speaker 1: wrap up first, we want to challenge you listeners to 717 00:34:29,520 --> 00:34:33,200 Speaker 1: not blindly pay off debt. Specifically, don't blindly pay off 718 00:34:33,360 --> 00:34:35,400 Speaker 1: low interest debt that you have locked in at that 719 00:34:35,480 --> 00:34:37,879 Speaker 1: low rate. That's right, there's such a thing as good debt, 720 00:34:38,040 --> 00:34:41,879 Speaker 1: like mortgages and student loans that are typically borrowed at 721 00:34:42,000 --> 00:34:45,799 Speaker 1: pretty low interest rates and are actually creating value in 722 00:34:45,840 --> 00:34:48,080 Speaker 1: your life at the same time, and then contrary to 723 00:34:48,200 --> 00:34:51,040 Speaker 1: that is bad debt. So typically this is debt where 724 00:34:51,040 --> 00:34:53,680 Speaker 1: you're borrowing money to pay for something that depreciates. And 725 00:34:53,760 --> 00:34:56,480 Speaker 1: essentially what this is is consumer debt. This is stuff 726 00:34:56,520 --> 00:34:58,879 Speaker 1: that you are just consuming, you're using it to pad 727 00:34:58,920 --> 00:35:02,840 Speaker 1: your lifestyle. It is not growing and is not increasing 728 00:35:02,840 --> 00:35:05,200 Speaker 1: your wealth. This is the kind of debt that you 729 00:35:05,239 --> 00:35:08,840 Speaker 1: want to avoid at all costs. Yeah. Ultimately, debt is 730 00:35:08,960 --> 00:35:11,120 Speaker 1: kind of like a tool, and it can be used 731 00:35:11,560 --> 00:35:15,080 Speaker 1: really well or really poorly. Take student loans for an example, 732 00:35:15,239 --> 00:35:17,000 Speaker 1: and students can kind of fall on that fence. Right. 733 00:35:17,080 --> 00:35:19,200 Speaker 1: You can definitely be good, right, and it can also 734 00:35:19,239 --> 00:35:21,839 Speaker 1: be really bad for someone that doesn't have a plan. Yeah. 735 00:35:21,960 --> 00:35:23,719 Speaker 1: Just like ice cream is good, if you have three 736 00:35:23,719 --> 00:35:26,560 Speaker 1: cartons of it, it's pretty bad, right, And same thing 737 00:35:26,600 --> 00:35:29,360 Speaker 1: with with student loans. If you're judicious about the amount 738 00:35:29,400 --> 00:35:31,560 Speaker 1: of student loans that you take out and to benefit 739 00:35:31,600 --> 00:35:35,879 Speaker 1: the ultimately receive from having that college degree translates well 740 00:35:35,880 --> 00:35:38,840 Speaker 1: into the workforce, well then bam, you just made a 741 00:35:38,840 --> 00:35:42,080 Speaker 1: great debt decision. But just make sure that you're wielding 742 00:35:42,120 --> 00:35:44,520 Speaker 1: that debt tool thoughtfully. Yeah, man, that's right. So a 743 00:35:44,520 --> 00:35:46,720 Speaker 1: good rule of thumb then for folks if you're considering 744 00:35:46,760 --> 00:35:49,520 Speaker 1: paying down debt is if you have any debt that 745 00:35:49,640 --> 00:35:52,239 Speaker 1: is below six percent, you want to think twice about 746 00:35:52,280 --> 00:35:54,239 Speaker 1: paying that that down. That might be debt that would 747 00:35:54,239 --> 00:35:57,400 Speaker 1: be considered good that you could keep around where you 748 00:35:57,400 --> 00:36:00,200 Speaker 1: could use any additional money that you have an intead 749 00:36:00,239 --> 00:36:03,520 Speaker 1: of paying that down to instead invest, And that's what's key. 750 00:36:03,960 --> 00:36:06,239 Speaker 1: You want to invest that additional money. Yeah, but if 751 00:36:06,239 --> 00:36:09,680 Speaker 1: you've got debts with higher interest rates above that six 752 00:36:09,719 --> 00:36:12,440 Speaker 1: percent line of demarcation, you're gonna want to go hard 753 00:36:12,440 --> 00:36:14,919 Speaker 1: at those things. Yes, So create a strategy, a plan 754 00:36:15,000 --> 00:36:17,920 Speaker 1: of attack to get rid of those super high interest 755 00:36:18,000 --> 00:36:21,960 Speaker 1: rate debts first and as quickly as possible. But conversely, 756 00:36:22,000 --> 00:36:24,600 Speaker 1: don't be in a rush to pay off that fixed rate, 757 00:36:25,080 --> 00:36:28,520 Speaker 1: low interest debt because there's a strong likelihood that you 758 00:36:28,520 --> 00:36:31,239 Speaker 1: could be putting your money to work for you in 759 00:36:31,280 --> 00:36:33,879 Speaker 1: places that will earn you a better return a few 760 00:36:33,920 --> 00:36:39,440 Speaker 1: matt That's what This one is A tough one, right, dude. 761 00:36:40,000 --> 00:36:43,160 Speaker 1: Not the easiest topic to discuss because so much of 762 00:36:43,200 --> 00:36:45,680 Speaker 1: this comes down to the individual. It's hard to say 763 00:36:45,719 --> 00:36:48,280 Speaker 1: that there are hard and fast rules for calling certain 764 00:36:48,280 --> 00:36:51,040 Speaker 1: debt bad and certain debt good. You need to know yourself, 765 00:36:51,080 --> 00:36:52,840 Speaker 1: You need to know if you are actually going to 766 00:36:52,960 --> 00:36:55,200 Speaker 1: invest or not. Yeah. That being said, I think we 767 00:36:55,280 --> 00:36:57,800 Speaker 1: gave some really good general principles for people to follow. 768 00:36:58,239 --> 00:37:02,120 Speaker 1: And if you're gonna put that money aside and savings account, dude, 769 00:37:02,160 --> 00:37:03,799 Speaker 1: better to pay down even the three and a half 770 00:37:03,800 --> 00:37:07,800 Speaker 1: percent rate mortgage than just stashing it in a savings account, 771 00:37:07,840 --> 00:37:09,600 Speaker 1: earning you next to nothing. Yeah, you may as well 772 00:37:09,640 --> 00:37:12,160 Speaker 1: just bury it in the ground, which is a bad idea, 773 00:37:13,040 --> 00:37:15,960 Speaker 1: or under your mattress, right, it's just as bad. Thanks 774 00:37:15,960 --> 00:37:18,239 Speaker 1: everyone for listening. Our home on the web is how 775 00:37:18,280 --> 00:37:20,239 Speaker 1: to money dot com. We'll have shown notes up there 776 00:37:20,239 --> 00:37:22,439 Speaker 1: for this episode. Yea, and if you like what you hear, 777 00:37:22,640 --> 00:37:26,440 Speaker 1: please review and subscribe us on Apple Podcasts or on 778 00:37:26,560 --> 00:37:30,200 Speaker 1: cast Box. Cheers, Buddy, Cheers Man, best Friends Out, Best 779 00:37:30,239 --> 00:37:30,799 Speaker 1: Friends Out,