00:00:00
Speaker 1: Welcome to Had of Money. I'm Joel and I am Matt, and today we're answering your listener questions.

00:00:24
Speaker 2: Do you know a buddy? This is an ass kind of money episode and we've got some great topics to get to today. So there's a listener and they have a spouse with an expensive hobby that that particular partner is not a fan of, and well, yeah, so we're going to kind of dabble into those waters. Another listeners wondering whether are not managed accounts, whether or not they're all that they're.

00:00:47
Speaker 1: Cracked up to be. Basically, we're the additional cost.

00:00:49
Speaker 2: And then we're also going to talk about international roaming with some of the low cost cellular providers. How do you do it if you're not with one of the bigs. We'll get to that one as well. Plus additional content today on our ask how to Money episode.

00:01:03
Speaker 1: We have recent experience with that, by the way, traveling overseas. We'll give our thoughts on what that was like and it might not have been great. But before we get to that, and before we get to your questions, I just want to mention Matt real quick that then this is probably something we could talk about on a Friday flight. But their rent prices around the country have softened significantly. Like might have seen minor increases in some parts of the country, we're even seeing rent decreases in other parts of the country, which is which is welcomed for anybody out there who's like got really tired of their landlord.

00:01:35
Speaker 2: Snstant increases to yes, twenty two anymore writing exactly the massive increases post pandemic.

00:01:41
Speaker 1: Basically, yes, And so my little sister used this to advantage. She is a renter, I don't know, south Al. Yeah, she's all about like never owning a home, I think, and which is totally fine, right, which a reasonable way to go, and actually.

00:01:54
Speaker 2: For she is investing the difference exactly in the stock market, which she is.

00:01:59
Speaker 1: Yeah, So she had a recent occurrence. Basically, they build a whole lot of apartment complex our new apartments in Midtid, Atlanta, and one of the things they use to entice people is a free month or two of rent oftentimes when they build that new facility. Plus it's like nice and shiny, brand new, no one's ever lived in it, And so my little sister's like, well, I'm just going to do that every time move somewhere different and get the free month or two and why not. But in her current apartment complex was like, wait a second, what if we offer you a fifty dollars discount to stay, so not even not even keeping rent the same, but saying well you can pay less. And she was like, well, that's not enough of a discount. Sorry, I'm a fairly sweet offering though. Yeah. She's like, I'm still going to go through the pain of moving though, peace out. And they were like, wait, how much is it going to take? And so this is I feel like this is kind of the data in action, which is even a corporate landlord saying but wait, hold on, what if we give you an extra one hundred bucks off one hundred and fifty dollars off what you were paying every month? And she was like, cool, that'll do it. That's enough to get me to stay.

00:03:00
Speaker 2: Fifty bucks.

00:03:00
Speaker 1: Yeah, that's is that what she got? And so she got so stand put.

00:03:04
Speaker 2: I mean, yeah, I think that would do it for me as well. Right, unless the new place has like a karaoke room, right there, some other amazing amenity, no.

00:03:13
Speaker 1: Artificial intelligence friends, right, that's the new that's the new thing. Yeah, who needs real ones. Well that's that's awesome man.

00:03:18
Speaker 2: Yeah, I think, like you said, it reinforces what the data is showing, but it just also depends, like there are so many factors that play into what different apartments are able to charge for rent. Because yes, here in Atlanta, Atlanta's booming, but you might be in a city that maybe there isn't a whole lot of development going on, so there aren't there isn't a whole lot of additional supply, meaning that renters might be a little more beholden to where they are. But it's always worth regardless, it's always worth having that conversation and kind of asking the questions and seeing what it is that you could potentially score.

00:03:49
Speaker 1: Yeah, it's always worth knowing the market trends, and those market trends depend on where you live. Like, for instance, I saw it seems like the biggest rent price declines are happening in Austin, Texas, which was boomtown for a minute. And it's like scene, it's overinflated. It's right, it got too hot exactly for its own good. And you don't you don't ask if you don't get and you don't know what to ask. For if you kind of don't have your finger on the pulse of what's happening. So just kind of heads up, look at the data, see what prices are going for in your neighborhood. Look around the corner, see what the other apartment complex is offering, or other single family homes in your area. If you live in a single family home there, just like scour zillow and find out and then use that data to present to your landlord. And they might say, wait, you're right, I guess I can't increase rent like I thought. And you're a great tenant, so I'll give you that little price cut you're asking for.

00:04:32
Speaker 2: Would love for you to stick around. Yeah, you don't get if you don't ask. But let's go ahead and introduce the beer that you and I are going to enjoy during this episode. This is an Icelandic Arctic lagger by Einstock Oldgurd There you go. That's that's Icelandic for beer. Like someone's been on due a lingo lately. Huh, I'm thinking, what is it? What was the Jamaican beer in that? Or No, I'm thinking of Foster's. That's Fosters.

00:04:57
Speaker 1: What is it?

00:04:57
Speaker 2: Australian for beer, something stripe. Red Stripe's right, Jamaican beer. They don't say red stripe Jamaican for me. They should get in my nationalities confused, get my wires crosses.

00:05:09
Speaker 1: I see why Jamaicans and Australias have so much in common. Same people, really, But uh.

00:05:14
Speaker 2: Yeah, we're gonna enjoy this beer. We're gonna answer some money questions, but we will share what we think about this beer at the end of the episode. But before we get to specific questions, we want to let folks know that you can always submit your own question. We would love if you recorded a little voice memo. That is always a fun way to get a little bit of a flavor. I don't know, it's just good to have other folks voices on the podcast as well. But record that voice memo, send it over our way at a how to Money pod at gmail dot com, and hopefully we will get to it on an upcoming episode. But Joel, we're gonna go ahead get to our first question, which has to do with a listener. She is she's kind of like semi retired. She's living that semi retired life. It's like a third Eyeblind song. But specifically she is. She's wondering whether or not this managed account that she has, She's wanting to know whether or not it's all that Hi.

00:06:03
Speaker 3: Joela Matt, this is Janet calling from Connecticut. I am a longtime listener from the very beginning. I absolutely love your podcast, and you both have changed and helped me so much throughout the years. I cannot thank you enough. I recently retired from my job. I am fifty five years old. I have a four oh one K which has over seven figures in it, which I'm pretty excited about.

00:06:31
Speaker 4: However, I have started.

00:06:33
Speaker 3: A new job because I'm certainly not ready to get out of the workforce yet. I called Vanguard regarding my four oh one K to see what I could do with it, and they told me it was being managed by a company through my previous employer and the fee was one hundred and twenty nine dollars a month. I asked them what that included, and they said, basically, it was just an algorithm based on my risk tolerance and my preferences for investing. So I'm wondering if this point if it makes sense to just put the money in a target date fund, considering I really only have about five to seven years left in the workforce, and then my fees would go down to I think they said eighty nine dollars annually, so quite a big difference there.

00:07:21
Speaker 4: I think I know the answer, but I would love your input.

00:07:25
Speaker 3: Also, my new employer has a fidelity retirement plan and I'm thinking that I should just start contributing to that and leave my Vanguard money where it is, so any advice you could give me, I would certainly appreciate.

00:07:39
Speaker 4: Thank you so much for the podcast.

00:07:42
Speaker 1: Janet, thank you so much for this question. In Matt the beginning of How to Money was a long time ago, and yeah it was. In fact, it wasn't wasn't called how to Money the very beginning. We'll say, story for another day, but thank you so much for being a listener for such a long period of time. Jane, We really appreciate it. And you really should be excited about a seven figure your retirement accounts.

00:08:01
Speaker 2: She kind of quickly just threw that out there, and it's like, well, that's a big deal. Seven figures.

00:08:06
Speaker 1: Most of our listeners amazing in their twenties and thirties. That's our goal, but it seems so far off and they're like, well, how ever get there? Well, Janet's living proof that yes you can if you do the right thing over a long enough period of time. Right, Yeah, And you know, I love also that money doesn't seem to be the driving force in your life. Right you're certainly at the point where you could hang it up. It's unlikely that you have to keep working if you don't want to. You know, million dollar plus nestagg means that you don't necessarily need to continue to pad those retirement accounts, Like you could probably stop stop working if you want it to. But it sounds like you still enjoy the work you're doing, and so you're gonna keep going with Rocks And you just have the financial ability to not have to if you don't want to.

00:08:44
Speaker 5: Yep.

00:08:44
Speaker 2: Yeah. And we as much as we talk about early retirement financial independence, that doesn't mean that we hate on work. Your ability to contribute to to society and provide value to other folks, I think it's huge. It gives a lot of folks a meaning. I think I'll be doing some sort of work long into my later years as well.

00:09:03
Speaker 1: But geting to choose when, how where did they do it? Just want to be able to yeah, I want that. I want that, even though I also see myself working in like my sixties. I just wanted to be on my own terms.

00:09:13
Speaker 2: Totally. Yep, yep, Janet. You're also lucky, lucky to have some accounts that two of the best low cost providers out there, Fidelity and Vanguard. As you know, they are great, and you can keep growing that retirement nest egg in that Fidelity account that you currently have access to while letting the seven figure van sweet sweet seven figure Vanguard account keep growing as well. There's no harm in having both. You don't need to go all in necessarily with one provider. But let's talk about managed accounts because that's kind of the heart of your question, and they are not our favorite. So managed accounts are often retirement accounts that are owned by the individual investor yourself, but the asset allocation is picked by a financial quote unquote financial pro right, And we're not fans of these accounts because the fees that are associated with that professional management. It comes at a high cost. It is, they're typically much much more expensive and the results that you get aren't necessarily better. And so in your case, the fact that your managed account is determined by an algorithm. It's not like you're talking to somebody, right, It's not like you have a relationship with an individual. The fact that it's software making these decisions for you makes that exorbitant fee even more frustrating. Like, I would get it if there is a little bit of handholding basically, like a little bit of counseling that's able to be provided. But essentially they're charging you a ton of money for what a lot of the different automatic funds out there are also doing for you, but they're able to provide that at a much lower cost.

00:10:42
Speaker 1: Yeah, I would rather much rather take that money and spend it with a financial advisor who you trust, who's like a fiduciary fee only and funnel money in that direction that I would to pay extra for the managed account, especially especially, like you said, Mack, given the fact that it's kind of, I don't know, determined based on an algorithm that's how the investments are plotted out. Seems it seems like it flies in the face of what a managed account is supposed to be, right, Yeah, yeah, exactly, Yeah, exactly so. And given Janet that your overall account balance is so stout, the fee is relatively small in comparison, but it also sucks to pay for something when you could get pretty similar results with a DIY approach. The numbers don't lie. They consistently reveal that financial professionals aren't able to outperform average investors who just sock their money into a simple index fund like a total Stock market or an S and P five hundred fund. And Matt and my parents had something similar. Even some of the best low cost companies like Fidelity, have managed account options. A lot of people don't realize that. Don't like that. They go to one of the low costs behemoths because they've heard good things. Oh, it's not going to cost me as much. But even those guys have options for these managed accounts, And you might not realize it if you're not looking at your statements, if you're not looking over your account carefully, and you might not realize that's something like a one plus percent fee one and a half percent fee maybe on your account holdings is being charged every single year. So you got to pay attention and know, well, all right, I'm with the low cost company. But even inside the low cost company, am I invested in the lowest cost funds the best ones that aren't going to eat into my returns as much over time.

00:12:07
Speaker 2: Yeah, it is true that manage accounts. They do come with the ability to tweak your holdings, and some of them are going to dabble in some other investments like reats, real estate investment trusts. But I guess the bigger question there is do you actually need that exposure? And typically, like you don't know is the answer, Like, that's not something that you need to be exposed to unless it's something that you are personally really interested in. The one downside though, of a target date fund is that they really invest based on your likely retirement date, and so they're based on the years like every five years, twenty three, twenty thirty five, twenty forty, that kind of thing, And considering how much you have saved up, you might have a bigger risk appetite. You might be willing to take on more risk than what the quote unquote retirement fund target date fund that you would naturally find yourself being drawn towards, because that's you're like, oh, yeah, I want to retire I think she said in like seven to nine years or something like that, But it may not be invested as aggressively given how much money you do have on hand. So this is something that a target date fund can't measure. Those automatic funds or making changes to your portfolio based on a fixed timeline reducing your risk.

00:13:12
Speaker 1: A little bit with every year that passes.

00:13:14
Speaker 2: And so if you don't necessarily need that allocation to shift over time where you're moving less from stocks and more to bonds than a target date fund could actually be a little too conservative for you. Even if you are planning on retiring in like twenty thirty or whatever, it is that you actually do get around or retiring given because you're saying that you might want to retire in like seven nine years or something like that. But maybe you get to that point you're like, yeah, yeah, I actually do enjoy working. I am able to provide that value, or I'm just going part time. Who knows something that I want to continue to do. I will say too. One way though, to get around that fixed timeline aspect of target date funds is I've seen some folks basically like target date fund hack, where if they like, if you know that you are willing to accept a little more risk instead of choosing say a twenty thirty five fund. If you know that you're going to retire in twenty thirty five, well instead looking at a twenty forty fund or twenty forty five And it's like another tick towards aggressive investing as opposed to what it is that they think or I love that you just use the term hack for that target date fund.

00:14:13
Speaker 1: Hack is that really a calling it?

00:14:15
Speaker 2: Well, it's a way to use it in a way that it is not necessarily intended to be used.

00:14:19
Speaker 1: Yeah, you're kind of it's the definitely appropriating it for your own needs, which I think is great.

00:14:24
Speaker 2: Yeah, it's just like a simple way to index for maybe that is at a better word, like to index four. Maybe that increased desire to expose yourself to risk. And the flip side is true as well, if you if you're out there listening and you're thinking, man, I really want to expose myself to as little risk as possible. And again, you say you were planning to retire in twenty thirty five, well you can go for that twenty thirty fund, twenty twenty five fund whatever.

00:14:48
Speaker 1: The truth is also that not all target date funds are created equal, right, They're best to own inside of a tax advantaged retirement account, and it's always important to look at the expense ratio. Like Fidelity and Schwab, for instance, have great products on this front that come with incredibly low fees. I'm taking like point zero eight percent, which is really really low, but that's not true for every company out there, right, So, just to heads up for other how to money listeners. You know, while we like target date funds as an investment strategy, whether or not you opt to go that route depends on what accounts you're holding that investment in and if you have access to some of the best low cost target date funds or not even Matt, much to my chagrin, Fidelity charges really high fees on target date funds, which just doesn't make sense. And relative to yeah, yeah, I would Vanguard, and we're talking three quarters of a point, I think basically for some of those.

00:15:35
Speaker 2: Target date funds, I mean, I guess when it comes to their lineup, they offer the absolute lowest when it comes to certain products like they're in like the you know, you can get a total stock market index fund or et if you can.

00:15:45
Speaker 1: Get a loss leader, yes exactly.

00:15:47
Speaker 2: I think that might be how this is working because they're able to kind of rope folks in perhaps with the guess what you're gonna pay nothing? Literally, like you, it's infinitely better than anything else, like anything divided by zero zero. Like, it makes a lot of sense to consider fidelity if in particular, you're a younger investor and you want to aggressively, aggressively invest in the stock market. But yeah, don't necessarily assume that it's a slam dunk decision to go with a fidelity target date fund. Yeah.

00:16:16
Speaker 1: Yeah, And so you have to be aware if you're looking inside of your four oh one K plan at work, you have to look at the fees associated with it. Don't just assume, oh, target date fund, it's going to be great and it's going to be low cost. And I wish they were all as great as like Vanguard and swamps, but sadly they're not.

00:16:30
Speaker 2: Yeah, the details matter, and quickly, real quick. You mentioned that target date funds are best inside retirement accounts specifically, and we we actually talked about this, I think guess was last year maybe when the guard Yeah, and so the reason you want you don't necessarily want to own a target date fund in a taxable account, So a brokerage account is because of the interest that bonds pays, because of the dividends that the stocks put off. But specifically when the fund managers, even though it's software, sometimes they have to sell portions of the underlying fund and when they do that, there is taxable capital gains that gets passed along to you as shareholders. This has happened with other companies as well, but most notably I think it happened to Vanguard last year. But there are some folks who were stuck with massive tax bills for that year because of some of the rebalancing that was taking place within these target date funds.

00:17:19
Speaker 1: Yeah, and it was completely unexpected.

00:17:20
Speaker 2: It was unexpected. That's the thing, right, because tax deferre account. You're going to pay that tax eventually anyway.

00:17:25
Speaker 1: And they were like, but I'm not the one who made this choice. It was the fund manager who made the choice.

00:17:28
Speaker 2: Yes, but when you are in retirement, you are making your planning for that. But when you're just in your typical working years and that it's a surprise basically, that's when it can really end up biting you in the butts. That's why you don't want to own target date funds within a brokerage account. You want to keep those within those tax deferred accounts. And Jolie. We were talking about renters here at the top of the episode, talking about joll Sis. We actually have a question from a listener and she is going to have some new renters moving in next door. Let's get to her question plus another right after this break.

00:18:07
Speaker 1: All right, Matt, let's keep going with ask kind of money questions. This next one comes from a listener in California who's trying to decide whether or not he should pay off his low interest rate mortgage early.

00:18:17
Speaker 6: You're there. I have a question regarding the classic payoff mortgage early versus invest dilemma. More specifically than just which one is better, I'm trying to understand if the rate at which I pay off a mortgage early affects the long term results. So, to make things simple, say I have a five hundred thousand dollars balance on our mortgage at a low three and a half interest rate, and I know some people will think we're crazy for even considering paying this off early. We are high earners, and if we put most of our extra monthly savings to it, we could likely pay off the mortgage in the next two to three years. Take into account we also max out our four oh one K contributions and don't have any other debt. After those two to three years, all of our extra income would then start going into additional investments. So, ultimately, my question is does paying off a mortgage in a short period of time make it mathematically better than if we spread out those payments over a longer period of time, like paying it off early in the next seven to ten years. Alternatively, if we just paid the minimum on our mortgage, we'd end up with about that five hundred thousand in initial investments over the next two to three years. And another way to look at it is if the two to three years of compound interest that I'm giving up by paying off the mortgage early will make much of a difference in the total amount twenty to thirty years from now when we retire. I hope I'm making sense. I've tried several different mortgage payoff verse investment calculators online, and I can't quite understand if paying off a mortgage early, quicker versus slower makes much of a difference in the long run. Thanks a lot. This is Andrew from California, and I really enjoy the show.

00:20:08
Speaker 2: All right, Andrew, First of all, you are not crazy for thinking about paying off your mortgage early.

00:20:14
Speaker 1: We might be crazy, you don't know.

00:20:16
Speaker 2: Well, not for this reason. I care not when it comes to his finances, and that's because Andrew's crushing it by maxing out his other tax of andre retirement accounts. If Andrew, if you were asking this question, but maybe you were doing a paltry job on that front when it came to those tax of vantage accounts, we want to help convince you to do more investing before going down this route any further, before overly focusing on your mortgage, especially with a low rate. But since you are trying to take the both and approach, it's not either or. You're not like, oh, I haven't I don't have anything invested towards towards my return. I don't have any sort of nest egg set aside. But I really want to pay off my Workay. If that was the case, we'd be giving you a different answer. But that's not the position that you're in. You are taking the an approach because of that, this is very much a personal decision and you can do what seems best to you given that combination of numbers but also of emotions that that personal finance often straddles, right, Like you got to take more into account than just the dollars and cents.

00:21:15
Speaker 1: Sure, yeah, I mean if we were if we were beings where math was the ultimate decider, we would all be making much different decisions. Right. But the thing is, personal finance has such an emotional component. It's we got to factor that in to every answer that we give into and too. Really whatever Matt and I talk about that on the show, that matters, right, what the behavioral element of what happens? Right, And the reason we would typically recommend that folks keep the mortgage around is because they're making the decision about investing versus paying off debt, not investing more, but investing at all. Right, that's kind of that's the way most people are. They're like, which one should I be doing? And so if you're not investing a significant amount of money for your future, if you're not far along the money your spectrum, we don't want you to prioritize mortgage payoff like that's that's especially if you've got a three a half percent.

00:22:00
Speaker 2: Rate, right, especially given the low Yeah, you're a low.

00:22:03
Speaker 1: Rate, that's further down the line. They're just better places for you to funnel those dollars. But if you've saved and invested like a crazy person kind of like Andrew has here, if you're doing the right thing on that front, this is a This is really more of a personal decision that you get to make right and so we'll do our best to help you think through it, Andrew, but kind of just want to say that at the outset is really so much depends on a lot of those particulars. What you've been doing up until this point. Have you been a discipline saver and investor already, and since you have, like you have more options at your disposal. That's right.

00:22:32
Speaker 2: But let's go ahead and talk about the numbers.

00:22:34
Speaker 5: Though.

00:22:34
Speaker 2: Let's talk about the math, because they do come into play. They should help to inform your decision here, because yes, to answer your question, the earlier that you pay off the mortgage, the better it is for you from numbers, from a return perspective, where you are on that timeline within that loan that matters a great deal. And so, for instance, let's say you were in year twenty five of a thirty year mortgage. If so, we would tell you to keep that puppy around. And that's because on a thirty year mortgage three and a half percent, you would have five times more of your monthly payment going towards principle compared to the portion that's going towards interest. So at that point, like your relative interest rate here is much lower, and the overwhelming majority of your mortgage payment is actually being being directly funneled into home equity, like you are paying yourself essentially.

00:23:19
Speaker 1: So if that were the.

00:23:20
Speaker 2: Case, then why would you bother even paying it off any more quickly than you had to that? Like, I mean, I would most definitely just ride that thing off into the sunset.

00:23:29
Speaker 1: Once you get Yeah, once you get far enough along, it's like, let it be. And the reason for this is because mortgage payments are calculated using an amortization schedule. So compare to someone who's on year twenty five with a brand new homeowner who's on year one of those payments right at the beginning of the amortization schedule, the amount of your payment going towards interest is nearly double the amount that's going towards principle. Right, this makes your relative interest rate much higher during those early years when you're basically a new homeowner. So, yes, Andrew, we would say you stand to benefit more financially by getting that loan within the first five to ten years than you do by accelerating your payments at the end.

00:24:05
Speaker 2: That's right. Yeah, So it does make sense to pay off more of your mortgage earlier on in that timeline, and of course when you have a higher interest rate. And so it sounds like you are towards the beginning of your your mortgage there, but you've also got a pretty dang good rate given the current economic environment that we're in. And say, something else to think long and hard about is what other goals money goals that you might have. Up until now, we've just kind of talked about the numbers. We've talked about the math, but now it's we're kind of addressing the more personal and emotional side of things. What is it going to feel like for you, for you and your partner if you've got a home that's debt free. Would greater amounts of liquidity, having more savings on hand, Would that actually give you even more peace from a financial standpoint? Maybe what you are realizing is that, you know what, I don't have any concerns about my ability to pay down my mortgage, but if we had more cash in the bank, that would actually, oh maybe that would be fantastic.

00:24:59
Speaker 1: Or maybe it'll allow me to to start the business or make us feel like we could start a family, whereas a paidoff mortgage it might not make you feel the same.

00:25:07
Speaker 2: Yeah. Absolutely, Basically, we want to expand your options from just it's not a dichotomy here. It's not you take all this money and either invested in the market or take all this money and pay down a mortgage. You can just sit on that money for a little bit, and I think it's worth taking some time if you don't necessarily have some of these additional personal finance goals to brainstorm to dream, We've got how to money money mission statement that will link to in the show notes within this episode that might ask some questions of you that could allow you to maybe expand your horizons a little bit as to what it is that you could possibly do with your money, Things that you thought maybe like, oh, we would we could never do that, But it's like, well, no, you're talking about serious amounts like two to three years, he's going to have five hundred thousand dollars on hand. You could do a lot with that money. And I think there's more options that you might have. There's more at your disposal than you're giving yourself credit for.

00:25:59
Speaker 1: Yeah, that I think it's important to note that taking time is only benefiting you from a multitude of standpoints, right, because you have the locked in low rate, and because money that you have in a savings account, if it's with a high yield savings account and with one of the online banks that we love, you're actually getting paid a decent rate, actually in excess of what your interest rate is on the mortgage.

00:26:21
Speaker 2: So there's a real spread there. And so yeah, that's that's such a great argument for sitting on that cash, right because you can calculate, like you can run the amateurization schedule and say, all right, we're gonna pay x amount of dollars in interest this year by keeping the mortgage, by keeping that loan around. But just take all that money and stick it in your high old savings and you're gonna earn five percent. There's gonna be a decent spread there. So not only like you are coming out ahead from a math and numbers standpoint, but that also just buys you more time that then allows you to figure out what some of you what some of your other financial goals might be. Yeah.

00:26:53
Speaker 1: And again, if if we were answering a question based on investing more versus kind of consumption sort of thing, like, that's a different that's a different answer as well. But either way you go, giving your high income, giving your frugal habits and attention to detail, you can't screw this up, Andrew. Really, it's it's a matter of preference at this point, given the fact that you're kind of keeping your debt to a minimum, that you are investing like gangbusters, and so you're basically so far along the money gear spectrum that you get to make this choice based on whatever feels right. And that kind of might sound like a cop out, but it's true, right, Yeah, And you have that ability to make maybe the slightly less optimal financial decision in favor of the slightly more optimized emotional and relational one.

00:27:38
Speaker 2: Yeah. I feel like one of the questions he's asking without asking us directly, is like, what is the stock market going to do over the next two to three years? Let me get your crystal ball out because basically he's saying in three years that the house is going to be paid off and then they can really focus on investing. But like you said, again, we do know what banks are currently paying in high yield savings, and so that is guaranteed. Rates can always sha but at that point you can always do something else with your money. So it feels me I would totally hang onto this mortgage regardless indefinitely, because yeah.

00:28:07
Speaker 1: I mean, I'm not paying off any of my mortgages early. I'm trying to keep my debt reasonable on rental properties and primary residences, always trying to put twenty percent down at least, but I'm not rushing to pay anything off. I'd rather make more positive moves for, you know, to grow my wealth for the future. And you know what, you can always keep that in your back pocket and start paying more or pay those off at a later date. But really, Andrew, this is up to you man, and best of luck. But Matt, let's get to the next question. This one is about how to respond when tenants move in next door.

00:28:41
Speaker 5: I had the money. This is Gina from upstate New York, and I'd like your opinions as landlords, I am having a couple of trees removed, and the tree company wants to use the next door neighbors driveway. I called that name who just closed on the house last week and as an investor, and he said, yeah, that's fine. I just need a statement for any damage to be covered. But it got me thinking, what are some things I should be cautious of and aware of going forward with now having the new dynamic of having tenants next door where in the past ten years I was always on the other side of that, So now I would like to simply be prepared. I hope this question leads to some good discussion and I look forward to the show.

00:29:48
Speaker 1: Thanks Matt. This question comes from Gina and I really want to go on Martin from the ninety sitcom Dang, do you know?

00:29:55
Speaker 2: Go do it.

00:29:56
Speaker 1: I'll get out of r But let's talk about it tree and tenant issues with neighbors. Let's start by discussing the tree thing first. And this request right in a tree situation is perfectly reasonable. Right and big old trees close to the property line sometimes you got to get on the other side of the property and most neighbors understand this. I'm glad. It sounds like this landlord, this new owner of the property next door, understands it too. And I guess for any and all how the money listeners though, wanting to have a tree removed or pruned, or really any other work done around your house, you want to make sure the person performing the work is licensed and insured. So, Matt, I had a tree removed at my last house, and when they were grinding the stump, a big chunk flew through and broke my neighbor's window. Fortunately, the company I hired was licensed and insured, and so they took care of it. I don't know if they even had to tap their insurance, but just in case, right, just in case they say, what are you talking about? That wasn't me. You want to make sure that they're licensed and insured. And so I would make sure, Gina, whoever you hire to do the work, that they're covered, right, so that in case something happens, you're not out of pocket additional money. And then also, I guess, just just one more thing, plenty of good reviews are something else worth prioritizing. One of the company that we had when the tree fell through our roof map the company we had to do the work. They were awesome, and so much of it was word of mouth from neighbors. But then I looked at the reviews and it was like, man, people love this company and they make things right when they screw up, and they did that in my case.

00:31:24
Speaker 2: So performing some of that due diligence on the front end can save you a lot of headache down the road. Were something less than ideal for that to happen. But Gina, now that your next door neighbor, though, is a tenant's not a homeowner home owner occupant, should that change anything else? I don't think there's necessarily anything that you should be worried about. You know, like there are some of those stereotypes with the absent landlord. Those stereotypes exist for a reason. A landlord is running a business, and so you know they're likely going to do, say, less beautifying on that home than an actual home owner would. But I honestly wouldn't fret too much about that. You know, there might not be quite as much curb appeal now that the houses are rental and they've got renterers in there, but hopefully it won't impact your ability to happily live next door. It makes me think our first house that we owned, we had we had a renter a house that was a rental across the street but then also next door to us, and we didn't really care at all. And the one in particular across the street, like it was kind of I mean, maybe it's changed, but like when we first bought there, it was kind of an ice ore, you know, like it hadn't been painted in forever, like the grass would get pretty dang long out front. But personally it was just like, yeah, it didn't really bother us on it. It probably had an impact on when we moved out, our ability for what we were able to charge for the reasons. There might be other folks who might be a little more sensitive to that, but for you, obviously it comes down to your personal preference and honestly who was living there before, because maybe you had the best neighbor ever that was living next door, and now they moved out and the landlord bought this house, and you're never gonna.

00:32:58
Speaker 1: Like whoever lives there compared to who used to live there.

00:33:01
Speaker 2: So I don't know all things to keep in mind, but I guess I don't want you to go into it with a mindset of thinking, oh my gosh, there's an investor.

00:33:08
Speaker 1: This is going to totally suck. Yeah. And one thing I would do, though, Matt, is to keep the number of the landlord handy, Right. You certainly don't want to be the neighbor who's bring every last thing to his attention. Hey, I see a weed in the front yard like that kind of thing. Right, That landlord's going to get annoyed pretty quickly. But it's not a bad idea to tell them that you're happy to be an extra set of eyes. And it's not even out of negligence necessarily, but a tenant might not notice something on the outside of the house it's facing you, and even an intune landlord, they might miss a shared fence that's in need of some repair or something like that.

00:33:37
Speaker 2: So, yeah, like on your side of the house, up in the corner, that's what the squirrels are getting.

00:33:41
Speaker 1: In, right exactly, Like.

00:33:41
Speaker 2: Hey, just so you know, you like to snap a picture of the cute squirrels running in and out. Yeah, send an exterminator to show up.

00:33:48
Speaker 1: And if there's something like, hey, guess what these tree limbs are? Certain social electrical wires, you might want to do something to prove him back, like it make him aware of certain things. Again, don't be the annoying pesky but like, yeah, stay in contact, stay in on good terms. I think a good landlord is more than willing to spend money to keep their property in good shape for current and future tenants. But keeping that relationship amiable and every once in a while bringing those things to his attention is probably the best way to go about it.

00:34:18
Speaker 2: Yeah. Well, and if you've already got his phone number as well, Like, I see this almost as an advantage because guess what, you now know the person who's in charge of getting you new neighbors. Aka, you can now have an impact or you can now influence your landlord as to who moves in next door. If I'm just I'm speaking from like landlord perspective here. If I had a neighbor a house that was next to one of my renolds, and they knew that Elise was coming up, or that typically I get new renters in there in the spring or in the summer. If I was the if there's a neighbor that would call me and say, hey, I've got some potential renders for you. Some friends of mine would love to move to the neighborhood. I would be thrilled for a couple of reasons. One, there's a sense of community. Right if you're living next to somebody that's that's your friend, that's pretty cool.

00:35:05
Speaker 6: Uh.

00:35:05
Speaker 2: And I feel like that kind of strengthen strengthens the neighborhood. But also I think if you've got a friend next door, that renter is less likely to move on because y'all are buds and so like, from my standpoint, I see this as a win from oh, man like this, I'm this is a house I'm gonna have to show less often. It's a it's a house where these renters might end up staying here for a pretty long time. And then of course it's a win. It's a it's win win, right, So it's a win for the landlord, but it's also win for you because your ability to kind of maybe curate the neighborhood little and be like, man, I want to get my people, I want to get my friends over here. I want to or you know, hey, I know somebody that's really looking for an affordable two to one, she can't afford a whole lot, or you know, he's kind of been had some hard times over the past couple of years, but he's back on his feet now. The ability for you to kind of place some of those folks there around you, I think that's really cool. I yeah. And in that way, I see the ability for you to see a situation where temporary neighbors is typically seen as maybe like a negative thing, and kind of flip it on its head a little bit.

00:36:02
Speaker 1: Yeah. Maybe. And also if let's say you've got somebody who comes in, or maybe you beautify your front yard and you say, hey, listen, every summer I come out here and I plant yard folice flowers in my front yard. I'll do yours for one hundred and fifty bucks. I don't know, maybe like hey, but it's gonna make it look beautiful. It's gonna give you that curve appeal, that pop. That could be a way to make a few extra bucks while also making sure that the property next door looks as good as you want it to. I don't know, just like it.

00:36:25
Speaker 2: Yeah, Jie's gonna get over there and start playing some bulbs exactly this Christmas.

00:36:29
Speaker 1: Yeah, that's when I plan Christmas Day. I plant my tulip pulps, or we've got a couple more questions to get to Matt, including one about using inexpensive cell phone providers overseas. Is it going to work out?

00:36:41
Speaker 6: Well?

00:36:41
Speaker 1: We'll talk about that and more right after this. All right, we are back from the break.

00:36:53
Speaker 2: We've got more topics to discuss, and specifically, we've got our Facebook question of the week. I guess technically this one may not be a question, but this one came from an anonymous poster in the Facebook group. By the way, if you are not already over they're just head a Facebook search how to money. You'll quickly find the group. We've got over ten thousand folks in. They're helping each other out. But this one was really interesting and we felt like we we definitely needed to talk about it on the show. But it goes and I quote, I have a craft beer equivalent dilemma. So my partner, married twenty three plus years, is starting to go down a path towards a hobby that I very much do not support for several reasons, and is aware of my feelings on the subject. We are in money year seven, a few years from retirement. But it's an expensive hobby too, thousands of dollars likely per year, and then further down in the comments, it was revealed that the hobby is guns, shooting guns specifically, which you know, it's not everybody's cup of tea here yea, I felt like this is something worth tackling here. It is ask how to money.

00:37:56
Speaker 1: It is, much to my shame, my four year old Sun's favorite hobby right now fake guns.

00:37:59
Speaker 2: Fakes.

00:38:00
Speaker 1: But he's all about And I don't know where you got this from because I don't own a gun, not really interested in that, but he's obsessed. I think it all started with his kick. He loves Alexander Hamilton the musical and hes yeah, exactly, that's where it started. But what if you got instead of like so all the kid guns are just like machine guns and you know, like revolvers like Western style guns and stuff like that. What if you got him, do they make kid muskets? Because where he has to like bite the bite the gunpowder pouch. And that's a good question, like pull the rod packet where like civil war reenactments. So we have a local Civil War battlefield right by our house, and we went and we saw actually them shoot some of those old guns, and he was smitten. He was he wasn't scared. He was fascinating, and then he like asked so many questions the guy afterwards. It was adorable, but okay, Yeah. A lot of the responses to this question or to this problem that was posed in the Facebook group revolved around the fact that a marriage counselor might be the way to go. And I think there's some wisdom there, and especially since my wife is planning on being a marriage counselor, I have to say.

00:39:04
Speaker 2: By law that this is a really good idea. You should go see a marriage can may you sign something? If you don't mention it exactly, I get in trouble. That's when the prenup kicks in.

00:39:14
Speaker 1: But this wouldn't necessarily be my first recommendation. And so it sure sounds like this is less about the money that's going to be spent on this hobby. You're in money, you're seven, you said, and more about maybe the moral disagreement of that chosen hobby, although of course buying guns and going to the range can get expensive really quick. But if moral aversion is the main problem here, right, it's a good idea to share your feelings with your partner. Maybe they don't understand why you're reticent. You know, they probably aren't making the same connection or moral judgment about this because people have different takes on going. It can be like considered a hobby and for others it's considered self defense, and it can just people can have different viewpoints, right, So approach that conversation, I would say with kindness and with curiosity. Maybe you'll see their pursuit in a new light, or maybe they'll see your point of view. Who knows, and if not having a neutral third party, it might help facilitate a needed discussion. Maybe that is when marriage counseling makes sense. I just wouldn't necessarily go there immediately, try to work it out together first, that would be my suggestion.

00:40:12
Speaker 2: That's true, And so that's kind of the maybe more of the underlying issue. But let's also talk about the mechanics when it comes to the money as well, because it's really important, I think to have some open discussions about expensive new endeavors. And we've talked This reminds me of our conversation with our wives where we talked about we've got different interests and it doesn't mean that you have to be necessarily thrilled about how the other person is spending the money and you know, in this case, she's actually there's an aversion to how they're spending the money. But I still think it's important to have a certain amount of blow money. That's what we call it, and like on our budget it's just Matt money, cap money, it's our blow money. But just to make sure that each person feels like that they have the ability to pursue the things that they're interested in. So, for instance, if your partner wants to spend like two hundred dollars a month on a gun hobby, I think you should have the freedom to spend lavishly on a hobby that you enjoy. And if that two hundred dollars a month, if if you're in a situation if someone's listening there, like but that would make it more difficult to pursue other financial goals that we both said are so important. Well, then in that case, I think your maybe your partner either needs to maybe dial back their enthusiasm a little bit. Maybe they can find a more budget friendly hobby or maybe to find a way to bring some more money into help pay for that hobby. But even that starts to kind of feel like like tit for tat a little bit, because I think there's a lot of folks where they might have the room to allow for some of this margin right where they don't necessarily need to be like, well, you spend two hundred dollars exactly on this, I'm gonna I'm entitled to exactly two hundred dollars as well. That feels less generous, and so I think it also just takes an honest look at your personal finances to realize that, like, actually, we're in a pretty decent spot. Maybe, yeah, we do have the margin to be able to spend in ways where we're not necessarily accounting for every single dollar that's within perhaps that blow money category.

00:41:57
Speaker 1: Yeah. H And at the end of the day, I think hobbies are fun and enjoyable and they don't have to cost much at all. Matt. My favorite hobbies are relatively inexpensive disc golf, hiking, riding, bikes, or some of the great cheap ones. Although I thought about recently getting a mountain bike and my wife and I talked about it to get it with shocks. Oh yeah, I was looking at buying I don't think not terribly expensive, but like a seven hundred and fifty dollars bike, right, nothing too fancy, but we both kept talking about it, and I was like, are you gonna have time to get out there on the trails like you are kind of hoping? And I was, no, Actually, I don't think I have the time right now to really make it worthwhile, make it make sense to buy this new bike. But in front of the show, Cody Sanchez, who came on to talk about building businesses back in the day, she had this weird anti hobby take on Twitter. Recently. She said that people use hobbies to distract them from their life, and I thought that was the weirdest thing. It made zero sense to me. Love her for what she does, but that hot take on Twitter was really really dumb. In my opinion, I think hobbies are one of the coolest things about life. We should all be like working a little bit less, right, even if we enjoy what we do, and be carving more time out to enjoy those super fun hobbies that we're interested in. Too many Americans actually have too few hobbies. That is I think, in large part what makes retirement so boring and so difficult for so many people say they don't have enough interest when they hit retirement age, and so they're like, what do I do now. I've been used to working fifty hours a week. Now I don't know what to do with myself. Hobbies are really one of the main answers I think.

00:43:22
Speaker 2: I think there's a lot of folks who have too few real hobbies, because that's the problem. I think there's a lot of folks that are getting sucked into the work and success track, and the folks who do have hobbies, a lot of times it's just sit in front of the TV. It's when it turns into like a default behavior that requires a lot of your time and that you don't necessarily get a lot of enjoyment out of. I think those are the kind of situations that that kind of I guess rubbed me the wrong way. Joel. We got one other quick one here, Jamie. She posted in Facebook this week and said, I'm considering switching to mint Mobile, but I haven't heard much conversation about how to address international travel. Is there an option to activate the plan when traveling. I don't frequently go out of the country, but with Verizon it's so easy, and other family members on my plan travel internationally monthly. Oh Wow, Yeah, what do you want to share our experience with Mint specifically?

00:44:10
Speaker 1: Yeah, I'm a little jelly that her her family members are traveling internationally monthly. That's amazing, that's.

00:44:16
Speaker 2: She's like, But I'm not. Yeah, yeah, So what should you do? Well, yeah, we've been did you say first of all you should be taken me? I don't know, we don't know what the situation.

00:44:25
Speaker 1: We'll give our we'll give our unbiased opinion here because like we've been with Mint Mobile for a lot of years now, but we're not going to cover up for how awful they are on the international front. Like their domestic service is great and the price is perfect, right, fifteen bucks a month if when you pay for a year worth of service upfront, it doesn't really get much better than that. We're fans, but there is certainly massive flaw in the Mint system that we wish state upgrade, and that is the international service royally sucks with Mint and we just experienced that in Scotland.

00:44:53
Speaker 2: Matt.

00:44:54
Speaker 1: You can theoretically you can spend money to get international coverage. I did. I paid I don't know, ten bucks, fifteen bucks or something whatever for some international coverage with Mint and it felt like it didn't work basically at all, even though I paid the money for it. So if you travel overseas infrequently, I'm talking like once a year, once every other year, we think that going with Mint still probably makes sense. You can opt to get a local simcard on the rare occasion that you do travel. That's pretty easy thing, and a pretty inexpensive thing as well. It's not very hard, but if you're traveling more frequently than that, it's probably worth looking. We wrote an article about this on our website at a slightly more expensive service that includes better international travel, Google Fi probably being the best bet for international traveling.

00:45:38
Speaker 2: Yeah, so the problem isn't the coverage sucks. It's that literally, so the way that Mint bills you, it's twenty cents per megabyte. I was thinking about it earlier, and I think part of the problem is that we don't really have a conception of what that gives you, right, And so we did the same thing, you know, we I think all four of us loaded like twenty I mean, Kate and now we loaded like twenty or twenty five bucks on for the international thing. But it's twenty cents per megabyte, right, So let's do the math here. That means it's two dollars for ten megabytes, and obviously twenty dollars for one hundred megabytes. What can you do with one hundred megabytes? That's about the size of a podcast. Like literally I upload the files for us, they tend to be around one hundred megabytes. And so the problem is, you see twenty cents per megabyte. Oh, okay, this seems like I should be able to get a decent amount, but when it actually, if you're not on Wi Fi and you're truly using that roaming, it will not take you very long at all to completely blow through the amount of data that you've purchased internationally. And so it's just exorbitantly expensive. And at the time, I don't think we even realized this, but we just quickly used up the data that we that we had prepurchased, and it felt like it wasn't working. I think it worked for a second, but literally it was gone in like a blink of any and we're like, well, we're not going to pay for more. We'll figure it out, and we went and bought a paper map. That's how you do it. But then what it like you mentioned Google Fi, Yeah, yea. The cool thing about them is that you can tovel between their two plans, and so what that means is that you can have their regular less expensive plan most of the time, but then you can bump it up to the more expensive. Uh, it's a more robust plan when you're about to hop on a plane and you're going to head to like something like one hundred and sixty to two hundred different countries where Google five works, and that nicer plan it's one hundred and ten dollars for two lines, and so you're basically looking at fifty five dollars a month there.

00:47:26
Speaker 1: But the data is.

00:47:27
Speaker 2: Included on that unlimited plus plan, and so you don't have to worry about, like like I'm talking about here, trying to do the math and figure out, Okay, what is it that I'm able? It might can I eat? Watch them move?

00:47:39
Speaker 1: Right?

00:47:39
Speaker 2: Should I even hop on social media? Because pictures are heavier than text, you know, like you don't need to do all this mental math.

00:47:45
Speaker 1: Which is so nice. It's nice to have to stress about it, right because.

00:47:48
Speaker 2: When you're traveling to you you've got so many other things on your mind. Anyway, you're trying to figure out how to get to the airbnb, or you're trying to figure out how to get to the hotel. There are other things that you're that are going through your head, not oh, should I be checking my email or can I look something up on the web to figure out if this castle is open.

00:48:05
Speaker 1: Or whatever it is, or if that restaurant like yeah, if they're if they're still open or not too Because I saw it on Anthony Bourdain ten years ago, I kind of want to hit it up. It's around the corner. But yeah, yeah, I agree.

00:48:16
Speaker 2: Then mobile great in the States, terrible abroad.

00:48:18
Speaker 1: Yes, exactly. And so I think Google Google Fi is, like Matt, that's what when we start traveling more, that's what you and I are gonna out for. And the cool thing is you mentioned the price for two lines. I don't know what it is off the top of my head for four, but I will say four lines. Sure, there's deals. Yeah, four lines makes it so much cheaper because so well I know, I know, at least for the regular service two lines of Google Fi, the kind that doesn't work very well overseas, is seventy bucks, but four lines is eighty. So that's how it's amazing, Like Yeah, the four lines doesn't cost much more. So if you can find another couple or something like that to split service with and just kind of twenty dollars a long and then know each other every month, that kind of thing, the Google Fi service becomes ridiculously cheap, almost as close almost in comparison to kind of what Mint charges. So it's it's definitely definitely worth thinking about if you are an international traveler, Google is one of the best.

00:49:05
Speaker 2: That's right, All right, let's talk about the beer real quick. We enjoyed icelandic Arctic Lagger. This is by einstock Old gurd Joel. What was What were your thoughts about this? It was dry, hot lagger.

00:49:15
Speaker 1: Yeah, it was light, refreshing, lightly hoppy. It tastes like a glorious European vacation. Matt and I just wish on our last one that we had had self bear service.

00:49:25
Speaker 2: But yeah, like you're drinking beer straight out of the straight out of the Arctic.

00:49:28
Speaker 1: And yeah, you know those Iceland's known for its waterfalls. It tastes like a if there's a beer waterfall in Iceland, this is what it would taste like.

00:49:35
Speaker 2: I felt like it almost had like a lemony kind of zestiness to it, so like maybe a slight acidity, slight tartness that I was not expecting out of a lagger like this. But maybe that was just the the dry hotness of it perhaps, But yeah, really good, really refreshing, very Viking like based on the can right here with the uh, I mean, what do you call the Viking hats?

00:49:57
Speaker 1: I don't know. I don't know that. I don't know what the name is for.

00:50:00
Speaker 2: There's got to be an actual term for it. Probably, Yeah, we'll look it up at some point, but that's gonna be it for this episode. You can find our show notes up on the website at howdomoney dot com. There you'll find a link to the mint mobile rite up and why it is such a great plan here in the States. But maybe at some point, yeah, we'll have one up for Google Fi as well. With all the international travel that you are saying that you're gonna be doing, I don't know about me. One of these days, that's gonna be a buddy for this one though. Until next time, best Friends Out, Best Friends Out,