1 00:00:00,080 --> 00:00:02,360 Speaker 1: Welcome to How the Money. I'm Joel and I and 2 00:00:02,520 --> 00:00:24,400 Speaker 1: Matt and today we are answering your listener questions. That's right, 3 00:00:24,480 --> 00:00:27,639 Speaker 1: Joelie are answering listener questions. We've got five of them, 4 00:00:27,640 --> 00:00:29,440 Speaker 1: like we always do, buddy. We've got a follow up 5 00:00:29,520 --> 00:00:32,840 Speaker 1: question from our work Life Balanced episode. We're gonna share 6 00:00:32,840 --> 00:00:35,760 Speaker 1: our thoughts on student loan refinancing as well as we've 7 00:00:35,760 --> 00:00:39,440 Speaker 1: got a question about fund rise specifically. So excited to 8 00:00:39,440 --> 00:00:42,120 Speaker 1: get to those, as well as two more on this episode. 9 00:00:42,200 --> 00:00:44,600 Speaker 1: It's gonna be good. I always love taking listener questions, buddy. 10 00:00:44,800 --> 00:00:46,479 Speaker 1: But before we get to those, I wanted to let 11 00:00:46,560 --> 00:00:50,440 Speaker 1: you know that I recently took advantage of an online 12 00:00:50,520 --> 00:00:53,599 Speaker 1: savings account bonus sign up bonus. Yeah, one of tho 13 00:00:53,600 --> 00:00:55,480 Speaker 1: sign up bonuses. If if I open an account of 14 00:00:55,520 --> 00:00:57,400 Speaker 1: a bank and then leave that money there for ninety days, 15 00:00:57,760 --> 00:00:59,480 Speaker 1: I get this sweet sign up bonus at the end 16 00:00:59,480 --> 00:01:01,160 Speaker 1: of that ninety day. What if you had pulled it 17 00:01:01,200 --> 00:01:04,759 Speaker 1: out like eighty nine, I bet they would have been like, Nope, sorry, 18 00:01:04,800 --> 00:01:06,680 Speaker 1: you don't get your bonus. Well, that's what it comes 19 00:01:06,680 --> 00:01:09,240 Speaker 1: out to. Actually, in the recent stock market turmoil, I've 20 00:01:09,280 --> 00:01:11,759 Speaker 1: kind of had this desire to do more investing and 21 00:01:11,920 --> 00:01:14,440 Speaker 1: have less cash on the sidelines. And I was in 22 00:01:14,480 --> 00:01:18,160 Speaker 1: this kind of dilemma of I've already put the money there, 23 00:01:18,160 --> 00:01:20,039 Speaker 1: I've opened the account, I've done the work. Do I 24 00:01:20,120 --> 00:01:22,039 Speaker 1: keep it there and get this bonus? Or do I 25 00:01:22,120 --> 00:01:24,280 Speaker 1: start kind of putting the money in the market and 26 00:01:24,280 --> 00:01:27,840 Speaker 1: take advantage of the fact that the market has been down, right, 27 00:01:28,200 --> 00:01:30,080 Speaker 1: and um, and yeah, I'm not gonna lie. It's a 28 00:01:30,080 --> 00:01:32,199 Speaker 1: hard decision. I ended up leaving my money in place. 29 00:01:32,240 --> 00:01:34,080 Speaker 1: I'm going to get that bonus. But Matt, these are 30 00:01:34,080 --> 00:01:36,280 Speaker 1: the questions that US money nerds have from time to time, 31 00:01:36,319 --> 00:01:38,480 Speaker 1: and there's not always the right answer. And for me, 32 00:01:38,560 --> 00:01:41,560 Speaker 1: I'm just my my bias. My tendency is towards dollar 33 00:01:41,600 --> 00:01:44,200 Speaker 1: cost averaging. And so while I did take advantage of 34 00:01:44,200 --> 00:01:46,800 Speaker 1: like funding a wrath while the market was down for 35 00:01:47,000 --> 00:01:49,400 Speaker 1: my wife, and I I'm okay with kind of passing 36 00:01:49,440 --> 00:01:52,880 Speaker 1: up potential bigger stock market gains, um, while I'm just 37 00:01:52,960 --> 00:01:54,960 Speaker 1: kind of earning that paltry sign up bonus. But yeah, 38 00:01:54,960 --> 00:01:57,160 Speaker 1: those aren't easy questions for us, right. That's the that's 39 00:01:57,160 --> 00:01:58,960 Speaker 1: the phrase burden the hand is better than two in 40 00:01:59,000 --> 00:02:01,040 Speaker 1: the bush, right, Like is a chance for you know, 41 00:02:01,080 --> 00:02:03,440 Speaker 1: outsized returns. But like the fact is, like a lot 42 00:02:03,480 --> 00:02:06,080 Speaker 1: of this comes down to just us not knowing what's 43 00:02:06,120 --> 00:02:09,040 Speaker 1: gonna happen. And so as individuals that are trying to 44 00:02:09,080 --> 00:02:11,120 Speaker 1: be smart with our money, like that's what we can do. 45 00:02:11,360 --> 00:02:13,000 Speaker 1: Just be smart with our money, Like we know the 46 00:02:13,000 --> 00:02:14,799 Speaker 1: things that we need to do that make the most sense, 47 00:02:15,280 --> 00:02:18,400 Speaker 1: and in so many situations is a matter of making 48 00:02:18,400 --> 00:02:20,600 Speaker 1: that decision and not really looking back, you know, and 49 00:02:20,800 --> 00:02:23,240 Speaker 1: not beating ourselves up over what could have been, because 50 00:02:23,240 --> 00:02:26,320 Speaker 1: there's no way of knowing what the market would have done. 51 00:02:26,520 --> 00:02:28,160 Speaker 1: And if you think you know what the market's gonna do, 52 00:02:28,360 --> 00:02:30,320 Speaker 1: you're probably gonna be wrong because you're you're just timing 53 00:02:30,360 --> 00:02:32,840 Speaker 1: the market and it's impossible to time the market versus 54 00:02:32,840 --> 00:02:35,760 Speaker 1: being methodical and sticking to a plan of investing. But 55 00:02:35,800 --> 00:02:37,160 Speaker 1: thanks for sharing that, you know, and I think a 56 00:02:37,240 --> 00:02:39,000 Speaker 1: lot of our listeners might be in a similar situation 57 00:02:39,120 --> 00:02:41,480 Speaker 1: where they're like, well, like, where where do I actually invest? 58 00:02:41,960 --> 00:02:44,080 Speaker 1: You know, now that I've got my stimulus check money, 59 00:02:44,480 --> 00:02:45,800 Speaker 1: I don't want to spend at all. I'm wanna make 60 00:02:45,800 --> 00:02:47,760 Speaker 1: sure I'm doing some smart stuff with it, make those 61 00:02:47,760 --> 00:02:50,799 Speaker 1: informed decisions, and yeah, just don't look back. Yeah, And 62 00:02:50,880 --> 00:02:52,959 Speaker 1: so much of it also comes down to what your 63 00:02:53,120 --> 00:02:55,440 Speaker 1: investment philosophy is, and it can be nice to reap 64 00:02:55,480 --> 00:02:57,440 Speaker 1: the rewards of a down market. We're gonna talk soon 65 00:02:57,480 --> 00:03:00,480 Speaker 1: about investing when the market is experiencing ball Atilvy and 66 00:03:00,520 --> 00:03:02,400 Speaker 1: what that should look like, and so much of that 67 00:03:02,440 --> 00:03:04,960 Speaker 1: does involve having a written plan so that you can 68 00:03:05,000 --> 00:03:07,880 Speaker 1: make a decision based on fact rather than emotion. But yeah, 69 00:03:07,880 --> 00:03:09,320 Speaker 1: I figured i'd bring that up because I know those 70 00:03:09,320 --> 00:03:12,680 Speaker 1: are the kind of nerdy dilemma people like us face. 71 00:03:12,720 --> 00:03:14,440 Speaker 1: All right, man, let's go ahead and introduce the beer 72 00:03:14,480 --> 00:03:17,359 Speaker 1: that we're gonna enjoy this episode. We have a beer 73 00:03:17,400 --> 00:03:19,760 Speaker 1: called Fog of War, which is a New England style 74 00:03:19,800 --> 00:03:22,840 Speaker 1: I p A. And this isn't by some giant corporate brewery. 75 00:03:22,919 --> 00:03:26,560 Speaker 1: This is a This is a homebrewer called Easy Chair 76 00:03:26,639 --> 00:03:28,799 Speaker 1: Brewing Garage. And this is brewed by a friend of 77 00:03:28,840 --> 00:03:31,760 Speaker 1: the show, Jess. Yeah, he lives here locally and he 78 00:03:31,840 --> 00:03:33,240 Speaker 1: was able to drop some of these off over at 79 00:03:33,240 --> 00:03:35,760 Speaker 1: your place. Yeah, so yeah, big thanks to Jess. Looking 80 00:03:35,800 --> 00:03:37,960 Speaker 1: forward to trying this one. Always love a good homebrew, 81 00:03:38,200 --> 00:03:39,920 Speaker 1: and it's not often enough that I get to to 82 00:03:39,960 --> 00:03:42,160 Speaker 1: try And because I don't homebrew myself, so that's right, 83 00:03:42,200 --> 00:03:44,680 Speaker 1: I gotta find a friend who does it. But yeah, 84 00:03:44,680 --> 00:03:46,200 Speaker 1: so we'll talk about our thoughts on this one at 85 00:03:46,240 --> 00:03:48,840 Speaker 1: the end of the episode. But Matt onto the listener questions. 86 00:03:48,920 --> 00:03:51,560 Speaker 1: Let's get to it. For folks that want to submit 87 00:03:51,600 --> 00:03:54,480 Speaker 1: a listener question to be considered for a future episode, 88 00:03:54,480 --> 00:03:56,160 Speaker 1: we would love to hear from you, just go to 89 00:03:56,200 --> 00:03:58,720 Speaker 1: how to money dot com slash ask It's super easy 90 00:03:58,760 --> 00:04:01,160 Speaker 1: to submit your own voice question for the show. And Matt, 91 00:04:01,160 --> 00:04:03,120 Speaker 1: the first one that we're going to tackle today is 92 00:04:03,120 --> 00:04:06,160 Speaker 1: about investing more in the market or in real estate. 93 00:04:06,720 --> 00:04:09,480 Speaker 1: Sounds yet again like a similar nerdy dilemma. Yeah, that's 94 00:04:09,480 --> 00:04:12,480 Speaker 1: what we're best at tackling. Hi, guys, this is Josh 95 00:04:12,600 --> 00:04:15,080 Speaker 1: from Los Angeles, California. I had a question that I 96 00:04:15,080 --> 00:04:17,120 Speaker 1: was hoping you guys could help me out with. I 97 00:04:17,160 --> 00:04:19,640 Speaker 1: currently have a roth Ira account that I put a 98 00:04:19,720 --> 00:04:22,839 Speaker 1: hundred and fifty dollars a month into. I'm not maxing 99 00:04:22,839 --> 00:04:26,239 Speaker 1: out my contribution each year, and my question is should 100 00:04:26,279 --> 00:04:30,120 Speaker 1: I put more money into my wroth Ira before investing 101 00:04:30,160 --> 00:04:34,200 Speaker 1: in other avenues. I currently just started a fundraise account 102 00:04:34,640 --> 00:04:37,640 Speaker 1: with a thousand dollars and it's really kind of exciting 103 00:04:37,720 --> 00:04:40,960 Speaker 1: to invest in this area, and I'm just kind of 104 00:04:41,000 --> 00:04:44,719 Speaker 1: wondering what i should do with um my finances as 105 00:04:44,720 --> 00:04:47,440 Speaker 1: far as investing goes. If you guys could help me 106 00:04:47,440 --> 00:04:49,479 Speaker 1: out with that, I would greatly appreciate it. Thank you 107 00:04:50,160 --> 00:04:52,000 Speaker 1: all right, Josh, thanks so much for that question, and 108 00:04:52,080 --> 00:04:54,720 Speaker 1: let's go ahead and cut straight to it. Yes, definitely 109 00:04:54,720 --> 00:04:58,680 Speaker 1: put more in your wrath IRA before exploring other avenues. 110 00:04:59,080 --> 00:05:02,400 Speaker 1: Maxing out your wrath is the easiest and the most 111 00:05:02,440 --> 00:05:04,840 Speaker 1: proven way to invest your money, you know that. Being 112 00:05:04,839 --> 00:05:06,520 Speaker 1: said that, we like we do agree with you though 113 00:05:06,560 --> 00:05:10,080 Speaker 1: investing in real estate it is exciting, but online real 114 00:05:10,160 --> 00:05:12,960 Speaker 1: estate investing it's not our first choice for would be 115 00:05:13,000 --> 00:05:16,120 Speaker 1: real estate investors, even though Fundise you know it is 116 00:05:16,160 --> 00:05:19,880 Speaker 1: one of the best online real estate platforms in our opinion. Yeah, man, 117 00:05:19,920 --> 00:05:22,279 Speaker 1: I totally agree with you. Roth IRA is the first priority. 118 00:05:22,440 --> 00:05:24,159 Speaker 1: I would find more of your money there until you 119 00:05:24,200 --> 00:05:27,039 Speaker 1: start exploring other avenues. But if you really want to 120 00:05:27,040 --> 00:05:29,599 Speaker 1: get into real estate investing, we prefer fee to consider 121 00:05:29,640 --> 00:05:32,800 Speaker 1: a couple of other ways of approaching it too. That's 122 00:05:32,839 --> 00:05:37,000 Speaker 1: because the Fundraise fees, although they're low compared to their competitors, 123 00:05:37,040 --> 00:05:39,280 Speaker 1: they're still high in our opinion. And also there are 124 00:05:39,320 --> 00:05:43,560 Speaker 1: potential liquidity issues with non publicly traded reads. A RED 125 00:05:43,720 --> 00:05:46,520 Speaker 1: is a real estate investment trust. That's essentially what you're 126 00:05:46,560 --> 00:05:49,000 Speaker 1: doing when you have an account with Fundraise. You're putting 127 00:05:49,040 --> 00:05:51,120 Speaker 1: money into an e read, a real estate investment trust 128 00:05:51,279 --> 00:05:54,120 Speaker 1: that you're investing in online, and an e read that's 129 00:05:54,160 --> 00:05:57,480 Speaker 1: that's fundrisees term right exactly like kleenex versus tissue right 130 00:05:57,720 --> 00:06:00,360 Speaker 1: right right. But and there was a recent story Matt 131 00:06:00,480 --> 00:06:02,720 Speaker 1: that I read in the Wall Street Journal and mentioned 132 00:06:02,720 --> 00:06:05,720 Speaker 1: how some of these e read companies aren't allowing investors 133 00:06:05,720 --> 00:06:08,280 Speaker 1: to withdraw their money right now in a down market. 134 00:06:08,400 --> 00:06:09,960 Speaker 1: If you read the fine print when you sign up 135 00:06:10,000 --> 00:06:12,240 Speaker 1: for a company like Fundrise and you put your money 136 00:06:12,240 --> 00:06:15,680 Speaker 1: in there to be invested in various real estate endeavors, 137 00:06:15,880 --> 00:06:18,120 Speaker 1: well you'll see that you don't have a full right 138 00:06:18,240 --> 00:06:20,360 Speaker 1: to your money when you want it. With fund Rise 139 00:06:20,400 --> 00:06:23,200 Speaker 1: in particular, you can redeem shares quarterly, but depending on 140 00:06:23,240 --> 00:06:26,000 Speaker 1: how long you've been invested, you could owe a substantial penalty. 141 00:06:26,279 --> 00:06:28,600 Speaker 1: So five years is the minimum window to avoid those 142 00:06:28,640 --> 00:06:32,800 Speaker 1: additional withdrawal fees. That's why we prefer publicly traded reads. 143 00:06:32,800 --> 00:06:34,600 Speaker 1: They just don't have the fine print associated with them. 144 00:06:34,600 --> 00:06:36,720 Speaker 1: There's a lot more liquidity when you invest in real 145 00:06:36,800 --> 00:06:39,279 Speaker 1: estate inside of a publicly traded read as opposed to 146 00:06:39,279 --> 00:06:41,919 Speaker 1: an e read company. Yeah, Joel. With those publicly traded 147 00:06:41,960 --> 00:06:44,280 Speaker 1: reads that you can get through a brokerage in the 148 00:06:44,279 --> 00:06:47,680 Speaker 1: open market, through someone like Fidelity or Vanguard, you buy 149 00:06:47,720 --> 00:06:49,919 Speaker 1: and you hold those just like you would with you know, 150 00:06:49,960 --> 00:06:52,960 Speaker 1: say a total stock market fund. The difference between a 151 00:06:53,000 --> 00:06:55,640 Speaker 1: slide like fundrise and with my publicly traded reads is 152 00:06:55,680 --> 00:06:59,840 Speaker 1: that you're buying a much broader, publicly traded real estate portfolio, 153 00:07:00,320 --> 00:07:04,200 Speaker 1: and the associated costs are going to be much much lower. Uh. 154 00:07:04,200 --> 00:07:06,760 Speaker 1: And not to mention, the publicly traded reefs are often 155 00:07:07,040 --> 00:07:11,280 Speaker 1: more diversified than an ERET alternative. So Vanguard, for for example, 156 00:07:11,480 --> 00:07:14,520 Speaker 1: they've got a real estate fund v n Q. Within 157 00:07:14,560 --> 00:07:16,760 Speaker 1: that one fund, there are a couple hundred different companies 158 00:07:17,040 --> 00:07:20,360 Speaker 1: which they themselves have vast real estate holdings just all 159 00:07:20,400 --> 00:07:22,800 Speaker 1: across the country, and so there is a massive amount 160 00:07:22,800 --> 00:07:25,880 Speaker 1: of diversification there. And again, because it's publicly traded, you 161 00:07:25,920 --> 00:07:29,680 Speaker 1: can buy and sell that fund at will V and Q. 162 00:07:29,880 --> 00:07:31,880 Speaker 1: That specific fund it's actually an e t F and 163 00:07:31,960 --> 00:07:34,120 Speaker 1: so you can purchase those just like you would a 164 00:07:34,120 --> 00:07:36,400 Speaker 1: regular stock. Yeah, Matt, the E, T, F, V, and 165 00:07:36,440 --> 00:07:39,480 Speaker 1: Q that you just mentioned widely diversified. The opposite of 166 00:07:39,520 --> 00:07:42,480 Speaker 1: being diversified is only one home in a specific location. 167 00:07:42,800 --> 00:07:45,280 Speaker 1: But we still really like that route too. So another 168 00:07:45,320 --> 00:07:47,440 Speaker 1: thing for Josh to consider right as he wants to 169 00:07:47,440 --> 00:07:49,880 Speaker 1: get into real estate is to become a modern pop landlord. 170 00:07:50,120 --> 00:07:53,080 Speaker 1: Buying actual property and running it out to real people 171 00:07:53,640 --> 00:07:56,120 Speaker 1: is one of the best ways to invest in real estate. 172 00:07:56,320 --> 00:07:59,200 Speaker 1: It's gonna be the most profitable typically, right Yeah, yeah, Yeah, 173 00:07:59,240 --> 00:08:01,440 Speaker 1: it's the most hands on, which means it isn't for everyone, 174 00:08:01,480 --> 00:08:04,440 Speaker 1: but yes, it can be the most profitable too. Of course, 175 00:08:04,560 --> 00:08:06,920 Speaker 1: the need for cash upfront is higher. You're gonna need 176 00:08:07,040 --> 00:08:10,000 Speaker 1: a more substantial down payment, but the returns on owning 177 00:08:10,000 --> 00:08:13,040 Speaker 1: and managing rentals, if done well, are great and it's 178 00:08:13,080 --> 00:08:15,080 Speaker 1: a great goal to have if you've got the real 179 00:08:15,200 --> 00:08:17,720 Speaker 1: estate bug. We would say, though, if you're making that 180 00:08:17,800 --> 00:08:20,800 Speaker 1: decision between a wrath or fund rise, that the RATH 181 00:08:20,880 --> 00:08:23,080 Speaker 1: should definitely take priority. And then if you want to 182 00:08:23,120 --> 00:08:25,080 Speaker 1: invest in real estate, uh, if you want to do 183 00:08:25,080 --> 00:08:27,160 Speaker 1: it the easy way, go with a publicly traded rate. 184 00:08:27,240 --> 00:08:29,200 Speaker 1: If you want to do it the hard but potentially 185 00:08:29,240 --> 00:08:32,640 Speaker 1: more rewarding way, then go with an individual property, whether 186 00:08:32,640 --> 00:08:35,680 Speaker 1: it's a single family home or duplex triplex near where 187 00:08:35,720 --> 00:08:37,720 Speaker 1: you live. But yeah, Josh, best of luck to you 188 00:08:37,800 --> 00:08:40,480 Speaker 1: as you continue investing. And I do hope that you 189 00:08:40,600 --> 00:08:43,280 Speaker 1: get into real estate investing soon because it's been great 190 00:08:43,280 --> 00:08:45,200 Speaker 1: for Matt and I and Josh. One final thing, because 191 00:08:45,200 --> 00:08:48,560 Speaker 1: you can trade these publicly traded rets on exchanges and 192 00:08:48,600 --> 00:08:51,720 Speaker 1: platforms like Vanguard and Fidelity, you can actually purchase these 193 00:08:51,760 --> 00:08:54,000 Speaker 1: funds within your roth ira A. So you can actually 194 00:08:54,000 --> 00:08:56,640 Speaker 1: own real estate within your your roth ira A with 195 00:08:56,679 --> 00:08:59,200 Speaker 1: all the tax advantages that it has. And so if 196 00:08:59,240 --> 00:09:01,240 Speaker 1: you're interested in real estate, but you're also kind of 197 00:09:01,240 --> 00:09:03,079 Speaker 1: torn because you're thinking about you know, you know that 198 00:09:03,120 --> 00:09:05,720 Speaker 1: you should probably max out your roth IRA well in 199 00:09:05,760 --> 00:09:08,000 Speaker 1: addition to your SMP five hundred index fund or your 200 00:09:08,040 --> 00:09:10,679 Speaker 1: total stock market fund, maybe start looking at putting V 201 00:09:10,760 --> 00:09:13,480 Speaker 1: and Q or some of these other reats within your 202 00:09:13,559 --> 00:09:16,240 Speaker 1: roth IRA and you've got the best of both worlds. Yeah, 203 00:09:16,320 --> 00:09:19,080 Speaker 1: all right, Matt, We've got more questions to cover, including 204 00:09:19,200 --> 00:09:20,800 Speaker 1: what to do with income from a house that you 205 00:09:20,920 --> 00:09:22,840 Speaker 1: just sold. Speaking in real estate, and we'll get to 206 00:09:22,880 --> 00:09:33,880 Speaker 1: that and more right after the break. All right, Matt, 207 00:09:33,920 --> 00:09:35,520 Speaker 1: we're back. We got more questions to cover, and the 208 00:09:35,520 --> 00:09:37,920 Speaker 1: first one is what to do with income from a 209 00:09:37,920 --> 00:09:40,640 Speaker 1: house that you just sold. Hey guys, this is Mac 210 00:09:40,720 --> 00:09:43,920 Speaker 1: from Louisiana and I've been going through some pretty big 211 00:09:44,120 --> 00:09:47,960 Speaker 1: but good life changes lately. Last fall, I went back 212 00:09:48,000 --> 00:09:51,600 Speaker 1: to school for a second career option, still working full 213 00:09:51,640 --> 00:09:57,360 Speaker 1: time and selling my house by owner. Last month. Mid month, 214 00:09:57,880 --> 00:10:01,840 Speaker 1: I got married and then we came home from our 215 00:10:02,080 --> 00:10:06,760 Speaker 1: weekend to a single income household. I will be unable 216 00:10:06,840 --> 00:10:09,560 Speaker 1: to work at least for the next couple of months, 217 00:10:10,240 --> 00:10:13,600 Speaker 1: and good news, as I sold the house and I 218 00:10:13,679 --> 00:10:16,679 Speaker 1: have a decent sized check coming my way. I'm not 219 00:10:16,720 --> 00:10:19,520 Speaker 1: sure what to do with that money. I will need 220 00:10:19,559 --> 00:10:22,120 Speaker 1: access to it in the next five to ten years 221 00:10:22,360 --> 00:10:26,520 Speaker 1: because we may move and reinvest in a different area. 222 00:10:27,000 --> 00:10:30,480 Speaker 1: Also next two years, I need some of that money 223 00:10:30,520 --> 00:10:34,280 Speaker 1: for school, and I'm just not sure where to put 224 00:10:34,320 --> 00:10:37,600 Speaker 1: it with interest rates being as they are, not sure 225 00:10:37,640 --> 00:10:41,600 Speaker 1: how to get a return on something short term. So 226 00:10:42,000 --> 00:10:45,400 Speaker 1: I hope everybody is staying healthy and I really appreciate 227 00:10:45,400 --> 00:10:50,280 Speaker 1: you doing this podcast so much. Thanks Hey, Mac, Thanks 228 00:10:50,320 --> 00:10:52,480 Speaker 1: so much for that question and we appreciate it. We 229 00:10:52,520 --> 00:10:54,800 Speaker 1: are staying healthy, so far, so good, and we hope 230 00:10:54,840 --> 00:10:56,760 Speaker 1: you are as well. And you know, by the way, 231 00:10:56,800 --> 00:10:59,679 Speaker 1: it sounds like you've been super busy. Congrats on getting 232 00:10:59,679 --> 00:11:02,040 Speaker 1: married and selling your house, but of course we are 233 00:11:02,120 --> 00:11:04,559 Speaker 1: sorry to hear that you lost your job. That the 234 00:11:04,640 --> 00:11:06,760 Speaker 1: check from the sale of your house will be huge 235 00:11:07,000 --> 00:11:09,320 Speaker 1: in helping you get through this time of being a 236 00:11:09,360 --> 00:11:11,599 Speaker 1: one income household. You know, we're not sure if you 237 00:11:11,640 --> 00:11:14,040 Speaker 1: can fully afford your lifestyle on one income or not, 238 00:11:14,240 --> 00:11:16,480 Speaker 1: but hopefully you can. And also too, it sounds like 239 00:11:16,520 --> 00:11:18,760 Speaker 1: this might be uh, you know, maybe a temporary job 240 00:11:18,800 --> 00:11:21,559 Speaker 1: loss due to the coronavirus, and so again, hopefully you'll 241 00:11:21,600 --> 00:11:23,240 Speaker 1: be back to work before you know it. And hopefully 242 00:11:23,240 --> 00:11:25,640 Speaker 1: you've been able to apply for those increased unemployment benefits. 243 00:11:25,679 --> 00:11:28,199 Speaker 1: And I hope that that's helping smooth the path as 244 00:11:28,240 --> 00:11:30,440 Speaker 1: well for you right now. And Mac, you're your question 245 00:11:30,480 --> 00:11:33,840 Speaker 1: really centers around getting a return on short term money, 246 00:11:34,080 --> 00:11:36,280 Speaker 1: and getting a decent return on short term money is 247 00:11:36,360 --> 00:11:39,640 Speaker 1: not easy, and the recent economic instability has lowered interest 248 00:11:39,760 --> 00:11:42,480 Speaker 1: rates for borrowers, but it's hurt savers at the same time. 249 00:11:42,800 --> 00:11:45,480 Speaker 1: Savings rates that the big banks are still basically almost 250 00:11:45,480 --> 00:11:48,280 Speaker 1: non existent math the point zero one percent is I 251 00:11:48,320 --> 00:11:50,839 Speaker 1: don't like that. It's it's really bad. There's not a 252 00:11:50,920 --> 00:11:52,599 Speaker 1: chance that I want to put my money with the 253 00:11:52,640 --> 00:11:55,320 Speaker 1: big bank who's paying that low of a rate. But 254 00:11:55,440 --> 00:11:57,480 Speaker 1: online banks have had to slash their rates a good 255 00:11:57,480 --> 00:11:59,520 Speaker 1: bit too, and that's our Our favorite place to bank 256 00:11:59,840 --> 00:12:01,960 Speaker 1: is is some of the great online banks. The top 257 00:12:02,080 --> 00:12:04,199 Speaker 1: online banks right now are offering a return of roughly 258 00:12:04,280 --> 00:12:06,440 Speaker 1: one and a half percent, but that could even shrink 259 00:12:06,520 --> 00:12:09,360 Speaker 1: more soon, who knows. The great news is that if 260 00:12:09,400 --> 00:12:11,560 Speaker 1: you decide to borrow for school, there's a good chance 261 00:12:11,600 --> 00:12:13,520 Speaker 1: that you'll get a low rate on student loans when 262 00:12:13,520 --> 00:12:15,880 Speaker 1: you borrow money too, So taking on debt for your 263 00:12:15,960 --> 00:12:18,280 Speaker 1: education might not be a bad idea when it comes 264 00:12:18,280 --> 00:12:20,400 Speaker 1: down to it. So MAC, for you, the question comes 265 00:12:20,440 --> 00:12:23,040 Speaker 1: down to, you know, what should you do with that money? 266 00:12:23,360 --> 00:12:25,480 Speaker 1: And for you, it might make sense to kind of 267 00:12:25,520 --> 00:12:28,520 Speaker 1: split the difference. Take some of that money and invest it. 268 00:12:29,120 --> 00:12:31,720 Speaker 1: You can fund rath iras for for you and your spouse, 269 00:12:32,160 --> 00:12:34,440 Speaker 1: and then you can keep the rest in an online 270 00:12:34,480 --> 00:12:37,200 Speaker 1: savings account that pays you know, a decent rate of interest. 271 00:12:37,520 --> 00:12:40,000 Speaker 1: The great thing is that if you need that Wrath money. 272 00:12:40,160 --> 00:12:42,800 Speaker 1: You do have access to those contributions if it turns 273 00:12:42,800 --> 00:12:44,920 Speaker 1: out that you need it and fight it ten years. 274 00:12:45,360 --> 00:12:47,720 Speaker 1: But you know, if you don't, you can keep it invested, 275 00:12:48,080 --> 00:12:50,240 Speaker 1: and that's certainly what we would prefer that you do. 276 00:12:50,440 --> 00:12:52,640 Speaker 1: It's best to keep some flexibility here, since it sounds 277 00:12:52,679 --> 00:12:55,400 Speaker 1: like you are in a life stage where who knows 278 00:12:55,480 --> 00:12:57,839 Speaker 1: what may happen next. We're not totally sure what you're 279 00:12:57,880 --> 00:13:00,360 Speaker 1: going back to school for. But it's also worthing sidering 280 00:13:00,440 --> 00:13:02,079 Speaker 1: you might be able to use that money for some 281 00:13:02,120 --> 00:13:04,600 Speaker 1: seed money to maybe even start your own business if 282 00:13:04,640 --> 00:13:08,120 Speaker 1: you are entrepreneurial minded. Yeah, and the Rath Matt is 283 00:13:08,120 --> 00:13:11,679 Speaker 1: that perfect flexible vehicle where you can withdraw those contributions. 284 00:13:11,920 --> 00:13:13,640 Speaker 1: And of course you know there's a chance you could 285 00:13:13,679 --> 00:13:16,240 Speaker 1: lose lose money and that in the short term, but ultimately, 286 00:13:16,240 --> 00:13:18,000 Speaker 1: if you won't need that money for the next five 287 00:13:18,040 --> 00:13:21,120 Speaker 1: to ten years, then having at least some of that 288 00:13:21,160 --> 00:13:23,720 Speaker 1: money in a Wrath for your future with the flexibility 289 00:13:23,760 --> 00:13:26,200 Speaker 1: of being able to pull those contributions out, I love that. 290 00:13:26,280 --> 00:13:28,920 Speaker 1: And keep the rest that you absolutely need on hand 291 00:13:29,120 --> 00:13:31,840 Speaker 1: for cash reserves, keep that in an online savor's account. 292 00:13:31,920 --> 00:13:33,600 Speaker 1: But you're just not going to get a great return there. 293 00:13:33,760 --> 00:13:35,920 Speaker 1: All right, thanks for listening to Mac Joel. Our next 294 00:13:36,000 --> 00:13:40,280 Speaker 1: question has to do with student loans. Hey, Joe, Hey Matt, 295 00:13:41,040 --> 00:13:42,719 Speaker 1: this is at a good lopus from Sanfron and the 296 00:13:42,800 --> 00:13:45,040 Speaker 1: valley south to Los Angeles. I hope you and your 297 00:13:45,080 --> 00:13:47,520 Speaker 1: family are doing well and staying safe. I want to 298 00:13:47,520 --> 00:13:49,640 Speaker 1: thank you both because you guys have always given great 299 00:13:49,679 --> 00:13:52,720 Speaker 1: advice to your listeners. I'm reaching out because I want 300 00:13:52,720 --> 00:13:55,360 Speaker 1: to know what you guys think about refinancing your student 301 00:13:55,440 --> 00:13:58,120 Speaker 1: loans to get a lower interest rate. I know interest 302 00:13:58,200 --> 00:14:00,600 Speaker 1: rate has dropped for business loans. I'm not sure what 303 00:14:00,679 --> 00:14:03,679 Speaker 1: they'll applied to me if I want to refinance or 304 00:14:03,760 --> 00:14:07,920 Speaker 1: consolidate my student loans. I currently have twelve small federal 305 00:14:08,000 --> 00:14:11,040 Speaker 1: student loans averaging to a four percent interest rate, and 306 00:14:11,120 --> 00:14:13,160 Speaker 1: my boat just kicked in in January of this year. 307 00:14:13,880 --> 00:14:16,079 Speaker 1: I look forward and hearing what you guys think. I 308 00:14:16,120 --> 00:14:19,000 Speaker 1: have a good guys, Edgar, thanks to the question, and yeah, 309 00:14:19,040 --> 00:14:20,840 Speaker 1: I hope you're staying safe out there on the West 310 00:14:20,840 --> 00:14:23,920 Speaker 1: coast as well. Man. Let's get into your question. Refinancing 311 00:14:23,920 --> 00:14:25,760 Speaker 1: a student loan right now. It could be a good 312 00:14:25,760 --> 00:14:27,960 Speaker 1: idea for some people, but it's not gonna make sense 313 00:14:28,000 --> 00:14:30,040 Speaker 1: for everyone and your since you have federal loans with 314 00:14:30,080 --> 00:14:32,120 Speaker 1: such a low interest rate, it's probably best just to 315 00:14:32,200 --> 00:14:34,080 Speaker 1: keep things the way they are. So this makes me think, 316 00:14:34,120 --> 00:14:36,400 Speaker 1: do you normally have some student loans. I remember at 317 00:14:36,400 --> 00:14:37,920 Speaker 1: some point in the past it sounds like you'll had 318 00:14:37,960 --> 00:14:40,120 Speaker 1: like a tiny little bit of student loans left. We 319 00:14:40,120 --> 00:14:43,200 Speaker 1: still have. Yeah. I thought you're gonna say they're gone. No, 320 00:14:43,280 --> 00:14:45,320 Speaker 1: but the interest rate is so low we have are 321 00:14:45,320 --> 00:14:48,080 Speaker 1: you going to refinance? No, because like there's not much 322 00:14:48,080 --> 00:14:50,480 Speaker 1: to refinance. It will pay it off probably in the 323 00:14:50,520 --> 00:14:53,640 Speaker 1: next year, just with the minimum monthly payments. But it 324 00:14:53,720 --> 00:14:55,800 Speaker 1: just doesn't make sense for us to prioritize paying it 325 00:14:55,800 --> 00:14:58,600 Speaker 1: off faster because the interest rate is just so ridiculously low. 326 00:14:58,600 --> 00:15:00,120 Speaker 1: I want to say it's in the ones. I have 327 00:15:00,200 --> 00:15:01,640 Speaker 1: to go back and look. If not, it's in the 328 00:15:01,640 --> 00:15:04,120 Speaker 1: low twos. But yeah, it's so low, crazy loan. Yeah, 329 00:15:04,120 --> 00:15:06,720 Speaker 1: that we're just not prioritizing it. Yeah. Well, in addition 330 00:15:06,760 --> 00:15:09,160 Speaker 1: to that too, like federal student loans, if you have them, 331 00:15:09,160 --> 00:15:12,000 Speaker 1: like they offer benefits that private student loans that they 332 00:15:12,000 --> 00:15:14,400 Speaker 1: don't have that they can't offer. And in fact, right now, 333 00:15:14,760 --> 00:15:17,160 Speaker 1: federal student loan holders, they don't have to pay on 334 00:15:17,280 --> 00:15:20,240 Speaker 1: their loans until October thanks to some of those provisions 335 00:15:20,280 --> 00:15:23,160 Speaker 1: and the Cares Act. This isn't the case for folks 336 00:15:23,280 --> 00:15:26,400 Speaker 1: that have private student loans, and federal loans have increased 337 00:15:26,400 --> 00:15:30,560 Speaker 1: hardship forbearance and income based repayment options as well. Private 338 00:15:30,600 --> 00:15:33,560 Speaker 1: loans man they have very little to no flexibility when 339 00:15:33,600 --> 00:15:36,360 Speaker 1: it comes to their repayment plans. Yeah, Matt, that's why 340 00:15:36,440 --> 00:15:39,560 Speaker 1: we have a guide for people that gets into the 341 00:15:39,600 --> 00:15:43,200 Speaker 1: specifics of refinancing when you should, when you shouldn't on 342 00:15:43,240 --> 00:15:45,440 Speaker 1: our website and will include that link in the show notes. 343 00:15:45,680 --> 00:15:48,880 Speaker 1: Despite the drawbacks, refinancing into a private student loan will 344 00:15:48,920 --> 00:15:51,320 Speaker 1: make sense for some people. If you can get a 345 00:15:51,400 --> 00:15:53,720 Speaker 1: much lower interest rate right with more of your payment 346 00:15:53,720 --> 00:15:55,680 Speaker 1: going towards principle, then you'll be paying off that loan 347 00:15:55,680 --> 00:15:58,840 Speaker 1: more quickly and paying less in overall interest more that 348 00:15:58,880 --> 00:16:01,400 Speaker 1: money does go towards the prince. But it's also important 349 00:16:01,480 --> 00:16:04,520 Speaker 1: to note that refinancing into a private student loan is 350 00:16:04,560 --> 00:16:07,280 Speaker 1: something that's not reversible. Once it's done, it's done. You 351 00:16:07,280 --> 00:16:10,280 Speaker 1: can never go back into the federal student loan program, 352 00:16:10,320 --> 00:16:12,720 Speaker 1: and therefore you can never gain back some of those 353 00:16:12,760 --> 00:16:15,440 Speaker 1: benefits and provisions that are included in the federal student 354 00:16:15,480 --> 00:16:18,760 Speaker 1: loan program. Private student loans are just less forgiving, so 355 00:16:18,800 --> 00:16:20,480 Speaker 1: you have to make sure that it's a solid win 356 00:16:20,800 --> 00:16:23,320 Speaker 1: before you actually do it. And I think specifically for Edgar, 357 00:16:23,600 --> 00:16:26,240 Speaker 1: with the low rates he currently has in the federal program, 358 00:16:26,240 --> 00:16:27,680 Speaker 1: I don't think it's really a move to be made 359 00:16:27,720 --> 00:16:30,160 Speaker 1: for him. All right, Joel, We've got a couple more questions, 360 00:16:30,160 --> 00:16:33,920 Speaker 1: one about work life balance as well as one about investing, 361 00:16:34,240 --> 00:16:37,720 Speaker 1: not investing too aggressively, but also not being too conservative. 362 00:16:37,720 --> 00:16:49,480 Speaker 1: We'll get to both of those right after the break part. Matt, 363 00:16:49,520 --> 00:16:51,840 Speaker 1: we'll back from the break. We got more questions, and 364 00:16:51,960 --> 00:16:54,840 Speaker 1: the next one is a follow up from our recent 365 00:16:54,880 --> 00:16:59,440 Speaker 1: episode on work life balance. Hey guys, Emily from Canada, 366 00:17:00,000 --> 00:17:02,400 Speaker 1: big fan of the show. I love every single episode. 367 00:17:03,200 --> 00:17:06,200 Speaker 1: I just finished listening to your work life Balance episode 368 00:17:06,240 --> 00:17:09,040 Speaker 1: and it really got me thinking, Um, my current job. 369 00:17:09,240 --> 00:17:12,639 Speaker 1: I am making a really good salary and there's a 370 00:17:12,640 --> 00:17:15,240 Speaker 1: lot of really good benefits, but it's a bit of 371 00:17:15,240 --> 00:17:18,240 Speaker 1: a toxic work environment. I'm stressed out all the time, 372 00:17:18,440 --> 00:17:22,920 Speaker 1: I'm constantly facing burnout and it's really really negatively affecting 373 00:17:23,040 --> 00:17:26,439 Speaker 1: my personal life and my personal well being as as well. 374 00:17:26,840 --> 00:17:30,800 Speaker 1: I've recently applied for a job that's in a totally 375 00:17:30,800 --> 00:17:34,879 Speaker 1: different direction, something that would let me use my skills 376 00:17:34,920 --> 00:17:38,879 Speaker 1: to help people, to help the community, and something that 377 00:17:38,880 --> 00:17:43,560 Speaker 1: I'm really passionate about. The downside is that it's a 378 00:17:43,680 --> 00:17:46,120 Speaker 1: really big pay cut from where I am right now, 379 00:17:46,960 --> 00:17:50,160 Speaker 1: which does scare me a little bit. I'll be honest. 380 00:17:51,160 --> 00:17:53,320 Speaker 1: Part of me thinks that, you know, if I take 381 00:17:53,320 --> 00:17:55,680 Speaker 1: this lower paying job that makes me happy, then I'll 382 00:17:55,720 --> 00:17:58,760 Speaker 1: have more energy to put into my side hustles and 383 00:17:58,800 --> 00:18:02,000 Speaker 1: to put into myself to make every aspect of my 384 00:18:02,040 --> 00:18:04,480 Speaker 1: life more successful. And then the other part of me, 385 00:18:04,560 --> 00:18:06,480 Speaker 1: of course, is just so scared to take that leap 386 00:18:06,480 --> 00:18:09,680 Speaker 1: and to try something completely different when I'm so used 387 00:18:09,720 --> 00:18:12,119 Speaker 1: to being where I am right now. I am a 388 00:18:12,119 --> 00:18:14,840 Speaker 1: good little saver, and I do have a cushion of 389 00:18:14,920 --> 00:18:18,080 Speaker 1: savings that I can fall back on in case anything 390 00:18:18,119 --> 00:18:20,679 Speaker 1: does go wrong. But I've always been the person who 391 00:18:20,760 --> 00:18:24,480 Speaker 1: makes the logical decision and not decisions with my heart 392 00:18:24,960 --> 00:18:28,359 Speaker 1: or my emotions. I'm really interested to hear what you 393 00:18:28,359 --> 00:18:31,200 Speaker 1: guys think. Thanks so much, family, Thanks so much for 394 00:18:31,240 --> 00:18:33,920 Speaker 1: that question. And you know, it's a really great practice 395 00:18:34,000 --> 00:18:36,960 Speaker 1: to be pragmatic and to make these decisions logically right. 396 00:18:37,680 --> 00:18:40,200 Speaker 1: But if we never followed our heart, would we even 397 00:18:40,200 --> 00:18:43,159 Speaker 1: be alive. We just be computers. That doesn't sound like 398 00:18:43,280 --> 00:18:45,200 Speaker 1: much fun to me, and of course, only not to 399 00:18:45,240 --> 00:18:47,399 Speaker 1: mention the soul crushing effects that your current job is 400 00:18:47,440 --> 00:18:49,960 Speaker 1: having on you. It's great that it pays well, but 401 00:18:50,040 --> 00:18:52,719 Speaker 1: a job that is going to lead to burne like that, 402 00:18:52,880 --> 00:18:55,760 Speaker 1: like that just is not going to be sustainable, right, Yeah, man, 403 00:18:55,800 --> 00:18:58,600 Speaker 1: I feel like that brings up the question should work 404 00:18:58,760 --> 00:19:01,040 Speaker 1: be a passion? I think you and I both kind 405 00:19:01,040 --> 00:19:03,760 Speaker 1: of come down somewhere in the middle. It's certainly nice 406 00:19:03,760 --> 00:19:05,800 Speaker 1: when you like what you do, right, and prioritizing that 407 00:19:05,920 --> 00:19:09,080 Speaker 1: is great. Getting to do this podcast together, we've prioritized 408 00:19:09,320 --> 00:19:12,159 Speaker 1: having fun with our work, and we drink beer and 409 00:19:12,200 --> 00:19:13,760 Speaker 1: we have a good time and feel like we have 410 00:19:13,800 --> 00:19:15,840 Speaker 1: a nice amount of balance going on right now. Yeah, 411 00:19:15,880 --> 00:19:17,800 Speaker 1: when we create, we create something we can truly be 412 00:19:17,840 --> 00:19:19,640 Speaker 1: proud of, and that's a lot of fun to make. 413 00:19:19,960 --> 00:19:22,520 Speaker 1: But I'm not sure that work being a passion is 414 00:19:22,600 --> 00:19:24,880 Speaker 1: always the most helpful way to think about it, because 415 00:19:24,920 --> 00:19:27,040 Speaker 1: even when you love your job, there are days that 416 00:19:27,119 --> 00:19:31,040 Speaker 1: stink and sometimes the specifics might not be all that exciting, 417 00:19:31,400 --> 00:19:34,119 Speaker 1: but let's say the flexibility or the perks of that 418 00:19:34,200 --> 00:19:36,879 Speaker 1: job might make that job perfect for having a family 419 00:19:36,920 --> 00:19:39,199 Speaker 1: and getting home every night in time for dinner. Right, 420 00:19:39,240 --> 00:19:41,560 Speaker 1: The grass isn't always greener on the other side. So 421 00:19:41,600 --> 00:19:44,879 Speaker 1: I think for Emily, it's important to make sure that 422 00:19:45,119 --> 00:19:48,800 Speaker 1: she's accurately assessing things. And one majorly important question to 423 00:19:48,840 --> 00:19:51,560 Speaker 1: ask is is it the job that's truly the problem? 424 00:19:51,600 --> 00:19:54,760 Speaker 1: Oftentimes a job can be the problem in our lives, right. 425 00:19:54,800 --> 00:19:56,400 Speaker 1: It can be holding us back in a major way, 426 00:19:56,440 --> 00:19:58,760 Speaker 1: it could be preventing creativity, and it can be leading 427 00:19:58,760 --> 00:20:01,160 Speaker 1: to burnout. But it is important to ask that question 428 00:20:01,440 --> 00:20:03,600 Speaker 1: and then if the answer is yes. If so, then 429 00:20:03,720 --> 00:20:06,159 Speaker 1: it is time to start considering an escape route. I 430 00:20:06,160 --> 00:20:08,440 Speaker 1: think yeah, And practically speaking, Emily, you're gonna need a 431 00:20:08,440 --> 00:20:12,040 Speaker 1: budget that reflects the newer job that pays less, as 432 00:20:12,080 --> 00:20:15,040 Speaker 1: well as savings that can help you to make that transition. Right, 433 00:20:15,080 --> 00:20:17,639 Speaker 1: So it's great that you have that cash cushion set aside. 434 00:20:17,880 --> 00:20:20,600 Speaker 1: It's really hard for us to recommend bailing on a 435 00:20:20,680 --> 00:20:22,840 Speaker 1: higher paying job for one that pays a heck of 436 00:20:22,840 --> 00:20:25,640 Speaker 1: a lot less. If you can't live on that income, 437 00:20:25,880 --> 00:20:27,960 Speaker 1: and if you don't have some savings to give you 438 00:20:27,960 --> 00:20:30,480 Speaker 1: some breathing room. This is even more important considering the 439 00:20:30,480 --> 00:20:32,840 Speaker 1: current economy and the position that a lot of folks 440 00:20:32,840 --> 00:20:35,000 Speaker 1: are in. Yeah, it sounds like Emily is in a 441 00:20:35,000 --> 00:20:38,400 Speaker 1: good position with her finances, with the savings, and if 442 00:20:38,400 --> 00:20:41,840 Speaker 1: she can trim her budget to fit to the new income, 443 00:20:42,160 --> 00:20:44,399 Speaker 1: then I think jumping ship from a job that is 444 00:20:44,480 --> 00:20:47,080 Speaker 1: toxic and pursuing something that she's gonna enjoy more makes 445 00:20:47,119 --> 00:20:48,920 Speaker 1: a lot of sense. Because work is a huge portion 446 00:20:48,960 --> 00:20:50,760 Speaker 1: of our lives, and if we can enjoy what we 447 00:20:50,800 --> 00:20:53,439 Speaker 1: do every day, I mean, obviously that's huge. It's certainly 448 00:20:53,440 --> 00:20:55,399 Speaker 1: good to have that as a priority. And Matt two, 449 00:20:55,440 --> 00:20:58,280 Speaker 1: I completely agree with Emily on what she said about 450 00:20:58,280 --> 00:21:01,040 Speaker 1: the intellectual and work freedom it should potentially be able 451 00:21:01,080 --> 00:21:04,960 Speaker 1: to get when she removes herself from a toxic work situation. Emily, 452 00:21:04,960 --> 00:21:07,560 Speaker 1: I think you might find quickly yourself moving on to 453 00:21:07,760 --> 00:21:10,280 Speaker 1: really interesting things when you get out of that suffocating 454 00:21:10,320 --> 00:21:13,320 Speaker 1: work environment. It can be scary initially to make that leap, 455 00:21:13,640 --> 00:21:16,400 Speaker 1: but once you get over the hurdle, you might find 456 00:21:16,400 --> 00:21:19,200 Speaker 1: boundless energy for pursuing a side hustle, or you might 457 00:21:19,200 --> 00:21:22,159 Speaker 1: move up the ranks quickly in this new gig because 458 00:21:22,200 --> 00:21:24,680 Speaker 1: you're applying more than just work ethic. You're applying passion 459 00:21:24,880 --> 00:21:27,360 Speaker 1: to something that you truly care about. Matt, I'll say 460 00:21:27,359 --> 00:21:29,280 Speaker 1: too that it was scary for my wife Emily and 461 00:21:29,320 --> 00:21:31,399 Speaker 1: I to go from two and comes to one. But 462 00:21:31,480 --> 00:21:33,560 Speaker 1: we ran the math and we had savings, so it 463 00:21:33,600 --> 00:21:35,520 Speaker 1: wasn't a blind leap. It was something that we knew 464 00:21:35,560 --> 00:21:38,159 Speaker 1: we could handle, but it didn't make it easy. But 465 00:21:38,240 --> 00:21:42,480 Speaker 1: that decision has had huge positive ramifications for our family. 466 00:21:42,760 --> 00:21:44,520 Speaker 1: And so Emily, if you can make this leap with 467 00:21:44,560 --> 00:21:48,720 Speaker 1: those solid underlying financials underneath you to push you forward, 468 00:21:48,920 --> 00:21:51,000 Speaker 1: then I would say, do it make the jump? Yeah, 469 00:21:51,320 --> 00:21:53,320 Speaker 1: you know, finding a job that gives you life instead 470 00:21:53,320 --> 00:21:55,359 Speaker 1: of draining it from you. It's hard to put a 471 00:21:55,400 --> 00:21:57,800 Speaker 1: price on that. And plus Emily's listening to the show, 472 00:21:57,800 --> 00:21:59,200 Speaker 1: so it sounds like she said in the right direction 473 00:21:59,200 --> 00:22:01,679 Speaker 1: when it comes to person finances, right, Buddy, Yeah, I 474 00:22:01,720 --> 00:22:04,119 Speaker 1: think hopefully. I don't think we've literally straight Oh I 475 00:22:04,119 --> 00:22:08,000 Speaker 1: know we haven't, Buddy. There was that one time, There 476 00:22:08,040 --> 00:22:10,560 Speaker 1: was that one episode where we gave terrible advice to everybody, 477 00:22:10,560 --> 00:22:12,199 Speaker 1: but it was April fe so everybody shouldn't know, and 478 00:22:12,200 --> 00:22:14,440 Speaker 1: that was an April Fool's episode. We should do that 479 00:22:14,440 --> 00:22:16,880 Speaker 1: one of these days and give the exact opposite advice 480 00:22:16,960 --> 00:22:18,720 Speaker 1: that we would normally get. Really should All right, We've 481 00:22:18,720 --> 00:22:21,720 Speaker 1: got one more question about investing, specifically about the nuances 482 00:22:21,760 --> 00:22:25,160 Speaker 1: of risk. Hey, Matt and Joel, this is Daniel coming 483 00:22:25,160 --> 00:22:28,400 Speaker 1: to you from Bedford, New Hampshire. First, thank you both 484 00:22:28,440 --> 00:22:31,640 Speaker 1: for the show and for your recent Friday updates. I'll 485 00:22:31,680 --> 00:22:34,119 Speaker 1: be honest, I'm sometimes scared to listen to those updates 486 00:22:34,160 --> 00:22:36,679 Speaker 1: because I'm afraid of what new information they might tell me, 487 00:22:37,320 --> 00:22:40,800 Speaker 1: and it's very tempting to want to live in blissful ignorance. 488 00:22:41,240 --> 00:22:43,400 Speaker 1: But I'm always grateful when I do listen, because your 489 00:22:43,440 --> 00:22:47,000 Speaker 1: advice and grounded approach keeps me feeling more sane and 490 00:22:47,080 --> 00:22:50,960 Speaker 1: secure about the decisions I make. Here's my question. I'm 491 00:22:51,040 --> 00:22:54,840 Speaker 1: twenty five and have been investing primarily in a zero 492 00:22:54,920 --> 00:22:59,280 Speaker 1: expense fee total stock mutual fund, both in my individual 493 00:22:59,280 --> 00:23:02,680 Speaker 1: brokerage accoun and my wrath I ra A. Right now, 494 00:23:02,800 --> 00:23:06,240 Speaker 1: for obvious reasons, neither of those accounts are looking too hot. 495 00:23:06,440 --> 00:23:10,000 Speaker 1: But my question actually extends beyond the current economic situation 496 00:23:10,320 --> 00:23:13,000 Speaker 1: and looks more into the future. As I become an 497 00:23:13,080 --> 00:23:16,800 Speaker 1: investor with fingers crossed more money invested in the market, 498 00:23:17,359 --> 00:23:20,520 Speaker 1: I'm curious what the transition to a more conservative stock 499 00:23:20,840 --> 00:23:24,000 Speaker 1: portfolio will look like. If I were to keep most 500 00:23:24,000 --> 00:23:26,800 Speaker 1: of my investments in that same total stock index fund, 501 00:23:27,440 --> 00:23:29,880 Speaker 1: I could see periods of extreme growth like we've had 502 00:23:29,880 --> 00:23:33,680 Speaker 1: in the past decade. But if something occurs, whether that's 503 00:23:33,680 --> 00:23:36,560 Speaker 1: a disease related issue like we're having now or some 504 00:23:36,680 --> 00:23:42,080 Speaker 1: other financial instability, whatever gains I've made from that portfolio 505 00:23:42,160 --> 00:23:46,280 Speaker 1: will naturally decrease on a scale proportional to whatever percentage 506 00:23:46,320 --> 00:23:49,760 Speaker 1: loss it incurs. My question is, as I continue to 507 00:23:49,920 --> 00:23:53,119 Speaker 1: hopefully see benefits from the historical trend of the stock market, 508 00:23:53,720 --> 00:23:56,800 Speaker 1: what investment vehicles would you both recommend as a good 509 00:23:56,800 --> 00:24:01,280 Speaker 1: place for a portion of the monetary gains. Right now, 510 00:24:01,760 --> 00:24:05,200 Speaker 1: I'm taking advantage of an online high interest savings account 511 00:24:05,359 --> 00:24:08,080 Speaker 1: thanks to your advice, which has a percentag yield of 512 00:24:08,119 --> 00:24:14,040 Speaker 1: about one. But I'm wondering, like your general recommendation regarding 513 00:24:14,080 --> 00:24:17,879 Speaker 1: total stock index funds has a good investment option, do 514 00:24:17,920 --> 00:24:21,639 Speaker 1: you have a similar recommendation for middle ground investments that 515 00:24:21,680 --> 00:24:25,119 Speaker 1: are less risky than the stock market but less conservative 516 00:24:25,160 --> 00:24:28,439 Speaker 1: than something like an online savings account. Thank you again 517 00:24:28,480 --> 00:24:31,719 Speaker 1: for all your advice, your humor, and the good spirits 518 00:24:31,760 --> 00:24:34,080 Speaker 1: during this time. I hope you're both doing well and 519 00:24:34,119 --> 00:24:36,800 Speaker 1: staying safe. Daniel, thanks to your questions. So glad the 520 00:24:36,840 --> 00:24:39,359 Speaker 1: Friday episodes have been helpful for you. I gotta be honest, Matt, 521 00:24:39,680 --> 00:24:42,960 Speaker 1: doing those Friday episodes has been helpful for me. Oh yeah, 522 00:24:43,080 --> 00:24:44,600 Speaker 1: it's been really nice to be able to kind of 523 00:24:44,600 --> 00:24:47,760 Speaker 1: talk about the week's events, what's happening, the pros and 524 00:24:47,800 --> 00:24:50,240 Speaker 1: the cons, and address them on on the show. Yeah. 525 00:24:50,240 --> 00:24:52,000 Speaker 1: I thought you were gonna say that Friday episodes are 526 00:24:52,040 --> 00:24:55,400 Speaker 1: your favorite. You know, you always talk about how listen 527 00:24:55,400 --> 00:24:57,000 Speaker 1: a questions are your favorite, and I was gonna make 528 00:24:57,040 --> 00:24:59,760 Speaker 1: you pick, but everything is my favorite. Okay, it's my favorite. 529 00:24:59,760 --> 00:25:02,280 Speaker 1: I that love it. Don't make me pick. I I agree. Man. 530 00:25:02,359 --> 00:25:04,439 Speaker 1: Being able to address some of this timely information and 531 00:25:04,480 --> 00:25:07,640 Speaker 1: how it pertains to us, as you know, as podcast 532 00:25:07,720 --> 00:25:11,200 Speaker 1: house and as DA's and as investors, but obviously to 533 00:25:11,280 --> 00:25:14,360 Speaker 1: our listeners as well, I've found tremendous help in the 534 00:25:14,440 --> 00:25:16,520 Speaker 1: value that we've been able to bring listeners. So if 535 00:25:16,520 --> 00:25:18,840 Speaker 1: you have not already been listening to the Friday episodes, 536 00:25:19,000 --> 00:25:21,280 Speaker 1: make sure that you check us out. Yeah for sure. Alright, 537 00:25:21,280 --> 00:25:24,000 Speaker 1: but let's get onto Daniel's question. He's asking about middle 538 00:25:24,000 --> 00:25:27,159 Speaker 1: ground investing options. And Daniel, you're right, most people's investment 539 00:25:27,200 --> 00:25:29,800 Speaker 1: accounts have taken a hit. But what's important to keep 540 00:25:29,800 --> 00:25:31,640 Speaker 1: in mind is that the gains that you mentioned being 541 00:25:31,640 --> 00:25:34,720 Speaker 1: erased have only been raised on paper unless you've actually 542 00:25:34,880 --> 00:25:38,720 Speaker 1: sold stocks, unless you've actually sold positions in that total 543 00:25:38,800 --> 00:25:41,720 Speaker 1: stock market fun that you're in while the markets down. 544 00:25:42,040 --> 00:25:44,440 Speaker 1: So for you, if this a bout of market turmoil 545 00:25:44,600 --> 00:25:46,920 Speaker 1: has been hard to stomach, well, then let's talk about 546 00:25:46,920 --> 00:25:49,600 Speaker 1: your best options, because so much of this question comes 547 00:25:49,640 --> 00:25:53,520 Speaker 1: down to personal risk tolerance. Right, the best investment portfolio 548 00:25:53,920 --> 00:25:56,760 Speaker 1: is not the one necessarily earning you the highest returns 549 00:25:56,840 --> 00:25:58,760 Speaker 1: over your life. It's the one that can allow you 550 00:25:58,800 --> 00:26:01,800 Speaker 1: to sleep well at night and to stay invested even 551 00:26:01,840 --> 00:26:04,720 Speaker 1: when things aren't going quite your way. And Daniel, for 552 00:26:04,760 --> 00:26:07,879 Speaker 1: you specifically at your age, we would definitely prefer you 553 00:26:07,960 --> 00:26:10,440 Speaker 1: to keep, you know, your money invested in that zero 554 00:26:10,480 --> 00:26:13,080 Speaker 1: cost total stock market fund or maybe an ST and 555 00:26:13,080 --> 00:26:16,000 Speaker 1: p F, a thundered fund. It will, over the decades, 556 00:26:16,200 --> 00:26:18,680 Speaker 1: be the best place for you to keep money. Meant 557 00:26:18,720 --> 00:26:22,680 Speaker 1: to use in your later years. By focusing on stocks primarily, 558 00:26:23,080 --> 00:26:25,880 Speaker 1: you will be exposed to that risk and the volatility. 559 00:26:25,920 --> 00:26:29,159 Speaker 1: But the thing is therein lies the potential for the 560 00:26:29,200 --> 00:26:32,160 Speaker 1: most growth. But like Joel mentioned, if you don't feel 561 00:26:32,160 --> 00:26:35,600 Speaker 1: comfortable with that acid allocation, then you should factor more 562 00:26:35,640 --> 00:26:37,359 Speaker 1: bonds into the mix. Yeah, Matt, when I think it 563 00:26:37,359 --> 00:26:39,720 Speaker 1: comes down to, you know, Daniel mentioned the savings account 564 00:26:39,720 --> 00:26:41,960 Speaker 1: which just isn't paying all that much right now. He said, 565 00:26:42,000 --> 00:26:43,960 Speaker 1: one point seven five. That's pretty high in the market 566 00:26:43,960 --> 00:26:46,560 Speaker 1: at this point. Most savings accounts just don't pay out 567 00:26:46,600 --> 00:26:49,640 Speaker 1: that much. And investing mostly in stocks, right that comes 568 00:26:49,680 --> 00:26:51,879 Speaker 1: with its risks as well, That comes with the volatility 569 00:26:51,920 --> 00:26:54,760 Speaker 1: associated with it. There's just not a magic bullet middle 570 00:26:54,760 --> 00:26:57,880 Speaker 1: ground for investors. Anything that takes you beyond that savings 571 00:26:57,920 --> 00:27:00,520 Speaker 1: account or buying treasury bonds is going to add risk 572 00:27:00,600 --> 00:27:03,320 Speaker 1: into your investing life. So target date funds I think 573 00:27:03,320 --> 00:27:06,040 Speaker 1: are important to mention here. These funds automatically give you 574 00:27:06,119 --> 00:27:08,720 Speaker 1: a mix of stocks and bonds, and specifically, what they're 575 00:27:08,720 --> 00:27:10,439 Speaker 1: meant for is for you to pick a date that 576 00:27:10,600 --> 00:27:13,959 Speaker 1: is nearest when you will likely reach retirement age, and 577 00:27:14,000 --> 00:27:17,440 Speaker 1: that fund will automatically allocate your assets so that you're 578 00:27:17,440 --> 00:27:20,920 Speaker 1: invested more conservatively over time, and Damiel for you, if 579 00:27:20,960 --> 00:27:23,600 Speaker 1: you want less risk involved, you can choose an earlier 580 00:27:23,640 --> 00:27:26,560 Speaker 1: target retirement fund date, which would ensure that you're invested 581 00:27:26,600 --> 00:27:29,040 Speaker 1: even more conservatively. But but if you want to grow 582 00:27:29,080 --> 00:27:31,439 Speaker 1: a retirement nest egg, Matt and I would suggest, like 583 00:27:31,480 --> 00:27:34,840 Speaker 1: you said earlier, Matt, more market exposure. The current market 584 00:27:34,840 --> 00:27:37,240 Speaker 1: exposure that Daniel has, if he can sleep with it 585 00:27:37,280 --> 00:27:39,440 Speaker 1: at night, is a good place for him to be. Yep, 586 00:27:39,560 --> 00:27:41,520 Speaker 1: that's right, man. So we would encourage you to come 587 00:27:41,600 --> 00:27:43,760 Speaker 1: up with an investment plan, Daniel, that you can live 588 00:27:43,800 --> 00:27:45,720 Speaker 1: with and one that you can ride through these beer 589 00:27:45,760 --> 00:27:49,119 Speaker 1: markets with while you continue to execute and invest. And 590 00:27:49,160 --> 00:27:52,520 Speaker 1: so whether that's more conservative fund or maybe something a 591 00:27:52,560 --> 00:27:56,000 Speaker 1: little more aggressive like a sixty target date fund, or 592 00:27:56,080 --> 00:27:58,159 Speaker 1: finding a way to tune out the news when markets 593 00:27:58,200 --> 00:28:00,359 Speaker 1: are down, either way, market exposure, it's going to be 594 00:28:00,400 --> 00:28:02,919 Speaker 1: crucial and that will help you to build up that 595 00:28:02,960 --> 00:28:05,240 Speaker 1: retirement nest egg. Just make sure that it's at a 596 00:28:05,320 --> 00:28:07,960 Speaker 1: level that allows you to continue to dollar cost average 597 00:28:08,160 --> 00:28:10,920 Speaker 1: during these booms and during these busts. Yeah, more than anything, 598 00:28:10,960 --> 00:28:14,400 Speaker 1: what matters is the savings, right and continuing to invest 599 00:28:14,560 --> 00:28:18,680 Speaker 1: no matter what through the years. And if stock exposure 600 00:28:19,040 --> 00:28:21,280 Speaker 1: doesn't allow you to sleep well at night, then we 601 00:28:21,320 --> 00:28:24,440 Speaker 1: would suggest adding more bond exposure into your portfolio to 602 00:28:24,480 --> 00:28:27,200 Speaker 1: smooth the ride. That's what bonds are for, and a 603 00:28:27,280 --> 00:28:29,800 Speaker 1: target retirement fund can do just that, and it can 604 00:28:29,800 --> 00:28:33,359 Speaker 1: give investors the fortitude the ability to continue to invest 605 00:28:33,640 --> 00:28:36,520 Speaker 1: even while the markets down, even while the economy is 606 00:28:36,560 --> 00:28:39,360 Speaker 1: going through a difficult time. Basically, the thing that's the 607 00:28:39,360 --> 00:28:41,360 Speaker 1: most important is having an investment plan that you can 608 00:28:41,400 --> 00:28:44,200 Speaker 1: stick to no matter what the circumstances are. So yeah, Daniel, 609 00:28:44,240 --> 00:28:47,040 Speaker 1: there's no easy, peasy four percent return that you can 610 00:28:47,080 --> 00:28:49,360 Speaker 1: get somewhere in the middle between the savings account and 611 00:28:49,440 --> 00:28:51,320 Speaker 1: the market. I wish it was, because that's where I 612 00:28:51,320 --> 00:28:54,640 Speaker 1: would put all of my intermediate term exactly. It'd be 613 00:28:54,720 --> 00:28:57,320 Speaker 1: nice if that was there. That there's not anything like that, 614 00:28:57,560 --> 00:28:59,920 Speaker 1: So yeah, having some money and savings is a nice 615 00:29:00,080 --> 00:29:02,760 Speaker 1: buffer for funds that you need readily on hand. Other 616 00:29:02,840 --> 00:29:05,000 Speaker 1: than that, you're gonna need market exposure in order to 617 00:29:05,080 --> 00:29:07,600 Speaker 1: grow your money over the long haul to provide for 618 00:29:07,680 --> 00:29:10,440 Speaker 1: your eventual retirement needs. All right, Daniel thinks so much 619 00:29:10,440 --> 00:29:12,800 Speaker 1: for that question. Joel to steer it back to the beer. 620 00:29:12,960 --> 00:29:16,040 Speaker 1: This episode, you and I we shared a Fog of War, 621 00:29:16,120 --> 00:29:19,440 Speaker 1: which is a beard by Easy Chair Brewing Garage. Man, 622 00:29:19,440 --> 00:29:20,920 Speaker 1: what were your thoughts on this one? All right, so 623 00:29:20,960 --> 00:29:23,080 Speaker 1: our friend Jess dropped this one off of my house, 624 00:29:23,360 --> 00:29:25,520 Speaker 1: really excited to have a homebrew because it's been a 625 00:29:25,520 --> 00:29:27,200 Speaker 1: while since we've had a good homebrew on the show. 626 00:29:27,560 --> 00:29:29,360 Speaker 1: I can't tell you what Jess knows what he's doing. 627 00:29:29,400 --> 00:29:30,760 Speaker 1: I'm not sure if he's brew with other people or 628 00:29:30,760 --> 00:29:32,800 Speaker 1: if he's doing it solo. I gotta ask him. But 629 00:29:33,200 --> 00:29:36,120 Speaker 1: the fellas an Easy Chair Brewing Garage are turning out 630 00:29:36,120 --> 00:29:38,560 Speaker 1: some good beers. This one was not too heavy. I 631 00:29:38,600 --> 00:29:41,080 Speaker 1: though the hops were the star here. It was truly 632 00:29:41,200 --> 00:29:44,560 Speaker 1: a hop forward beer, and those hops shown brightly. It 633 00:29:44,640 --> 00:29:47,040 Speaker 1: tasted like a perfect summer I p A one that 634 00:29:47,080 --> 00:29:49,080 Speaker 1: you'd be happy to drink right after you got done 635 00:29:49,120 --> 00:29:52,720 Speaker 1: mowing the lawn while still being packed full of hot flavor. 636 00:29:52,880 --> 00:29:55,320 Speaker 1: So yeah, I really enjoyed this one. You mentioning a 637 00:29:55,320 --> 00:29:57,480 Speaker 1: summer drinking, I pa, it makes me think of Bell's 638 00:29:57,520 --> 00:29:59,400 Speaker 1: Too Hearted, which this one kind of reminded me of 639 00:29:59,440 --> 00:30:02,280 Speaker 1: a little bit. It was very clean, a clean drinking hoppy. 640 00:30:02,360 --> 00:30:05,600 Speaker 1: I p A definitely hazy, but it was balanced without 641 00:30:05,600 --> 00:30:08,400 Speaker 1: a crazy amounts of hot funkiness that you tend to 642 00:30:08,440 --> 00:30:11,640 Speaker 1: associate with New England style. I p A s well balanced. 643 00:30:11,640 --> 00:30:13,400 Speaker 1: I really enjoyed this one. Glad you and I got 644 00:30:13,400 --> 00:30:14,960 Speaker 1: to have this one on the show, Buddy. Yeah, so 645 00:30:15,000 --> 00:30:17,200 Speaker 1: big thanks to Jess for for dropping this one offsen 646 00:30:17,240 --> 00:30:19,280 Speaker 1: in this one our wife. Yeah, thank you, Jess. All Right, Matt, 647 00:30:19,320 --> 00:30:20,800 Speaker 1: that's gonna do it for word of this episode. For 648 00:30:20,800 --> 00:30:22,800 Speaker 1: folks who want show notes, they can just check out 649 00:30:22,840 --> 00:30:24,440 Speaker 1: how to money dot com. We'll have them up there. 650 00:30:24,840 --> 00:30:26,800 Speaker 1: And everybody knows what we're about to say next. But 651 00:30:26,880 --> 00:30:29,360 Speaker 1: the reason we say it so often is because it's true. 652 00:30:30,080 --> 00:30:31,959 Speaker 1: And that is, if you haven't already left us a 653 00:30:32,000 --> 00:30:35,120 Speaker 1: review over an Apple podcast, please do so now. It 654 00:30:35,200 --> 00:30:37,320 Speaker 1: really helps us to get the word out, helps others 655 00:30:37,360 --> 00:30:39,480 Speaker 1: to find the show who need to be doing smarter 656 00:30:39,560 --> 00:30:41,920 Speaker 1: things with their money, and thanks in advance. So, Joel, 657 00:30:41,960 --> 00:30:44,280 Speaker 1: that's gonna be it for this episode until next time. 658 00:30:44,560 --> 00:30:46,680 Speaker 1: Best Friends Out, Best Friends Out.