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Speaker 1: Welcome to Had of Money. I'm Joel, I'm Matt, and

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Speaker 1: today we're gonna answer some of your listener questions.

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Speaker 2: Yeah, some questions like what to do when someone is

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Speaker 2: without work. We've got a listener Joel, who is part

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Speaker 2: of the mass government layoff. Another listener is wondering if

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Speaker 2: it's worth continuing to rent the condo that they used

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Speaker 2: to live in. They're currently in a tight spot financially,

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Speaker 2: so they're trying to like weigh the pros and cons there.

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Speaker 2: And another listener she's got her eyes on some passive

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Speaker 2: income streams. She's specifically, she's trying to figure out, like

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Speaker 2: what is the best way to achieve this. She's got

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Speaker 2: a few options she's that she's considering. But uh, hey man,

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Speaker 2: you notice I got a nice clean shave over here.

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Speaker 1: Oh yeah, I do see that. You want to do

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Speaker 1: you want to touch it? I'm good offer.

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Speaker 2: Have you ever been invited by another friend to touch

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Speaker 2: their face? Not that I know, I feel normally it's

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Speaker 2: the opposite. You're the one normally reaching out to touch

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Speaker 2: touch other people's faces uninvited, which is like I'm a hugger,

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Speaker 2: borderline assault.

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Speaker 1: I get in people zones sometimes I asked that because

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Speaker 1: I had uh for the longest time, I will touch

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Speaker 1: your face. Bring it over here, you can do it

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Speaker 1: all right. That's pretty soft, baby, pretty smooth.

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Speaker 2: Luckily you touched where whiskers don't normally grow, which is

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Speaker 2: most of my face. Yeah, you don't ever have hair there,

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Speaker 2: but I do chin in the upper lip of course.

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Speaker 2: And for the longest time I had Harry's. You like

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Speaker 2: the orange handled Harry's razor. They're one of the first

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Speaker 2: direct to consumer models.

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Speaker 1: Did we voice for them like years ago? I think

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Speaker 1: we did.

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Speaker 2: Yeah, Okay, so literally I still have the same razor.

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Speaker 2: This is so embarrassing, but literally the same razor from them.

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Speaker 2: I've never embarrassing because it's been dull for a long

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Speaker 2: time and I continue to use the same I didn't

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Speaker 2: buy new heads. I still have the same It came

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Speaker 2: with two heads. Yeah, and that's what I've been using

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Speaker 2: for I don't know. I guess we can look it

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Speaker 2: up for years.

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Speaker 1: I shaped so rarely, partly because I have a similar

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Speaker 1: uh thought little fussful challenges you it. I have to

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Speaker 1: buy new blades almost never. I also use like an

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Speaker 1: electric razer most of the time.

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Speaker 2: Okay, Well, I do like a clean shape because when

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Speaker 2: need it grows out, it gets itchy. That's what I

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Speaker 2: don't like is laying down to bed having the whiskers

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Speaker 2: scratch against the pillowcase and it's just a little bit scratchy.

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Speaker 1: So I haven't shaving more recently.

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Speaker 2: But you want to know the best way to convince

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Speaker 2: yourself that the razors that they saw at Aldi are

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Speaker 2: the absolute best. I guess keep using your nice razor

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Speaker 2: for maybe a year past when you should then get

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Speaker 2: the four pack for three dollars. And oh my gosh,

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Speaker 2: I shaved this warning dude, and it's like I was

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Speaker 2: in heaven.

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Speaker 1: Yeah, it felt glorious.

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Speaker 2: But I was curious what your thoughts were on the

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Speaker 2: uber cheap disposable razors that you can get.

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Speaker 1: I'm fine with it. I think big razor makes everything

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Speaker 1: cost too much. You remember when dollar shave Club first

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Speaker 1: came about. It was a it was a revelation only

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Speaker 1: it's like twenty dollars shave club. Yeah, I still remember

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Speaker 1: that ad that they that was like, I don't potentially

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Speaker 1: the best. It was so inventive that the ad they

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Speaker 1: put out on it was like aube YouTube ad with

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Speaker 1: the CEO kind of walking through the factory and it

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Speaker 1: was hilarious and it kind of changed the game for

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Speaker 1: how direct to consumer ads were done. I feel like, you,

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Speaker 1: as an ad man, you should go.

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Speaker 2: To some industry that needed disruption, is what they would say.

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Speaker 2: And he totally did.

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Speaker 1: He told you, and he caught the attention to people,

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Speaker 1: and I think that's why it took off in a

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Speaker 1: lot of ways. And then Harry's was another one of

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Speaker 1: those companies trying to do something similar, and I think

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Speaker 1: those were really cool. But those also bring the prices

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Speaker 1: down some, but they don't bring them down to Aldie

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Speaker 1: prices exactly.

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Speaker 2: And I think it's totally great. You know, how I

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Speaker 2: wised up was because because I didn't realize it was painful.

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Speaker 2: I was not looking forward to shaving because I'm like, oh,

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Speaker 2: it hurts so much. I'm like, wait a minute, why

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Speaker 2: does it hurt. I was like, Oh, my gosh, I

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Speaker 2: think I've had this same razor head or whatever blade

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Speaker 2: this's on here for maybe years, I guess. And Kate

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Speaker 2: gets the cheap raisers and I like reached over the

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Speaker 2: shower and grabbed one of hers and it looked kind

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Speaker 2: of gross and old, but even still that thing. Oh

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Speaker 2: my gosh, it was so much better than my current razor.

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Speaker 2: And so that's when I decided, Okay, at the very least,

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Speaker 2: I can get the Likira or whatever cheap o brand

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Speaker 2: that they sell at Aldi for like seventy cents a pop.

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Speaker 1: Yeah, okay, So again, I use an electric razer most

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Speaker 1: of the time. I just kind of trim it up.

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Speaker 1: I don't go all the way down to the face.

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Speaker 1: But my go like Madman style is like perfectly right.

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Speaker 1: But my good buddy Clark, he is he's a big

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Speaker 1: fan of drying your razor thoroughly, and he says that

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Speaker 1: makes them last a whole lot longer, degrades the blade. Yeah,

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Speaker 1: so I don't. I don't use my my razors enough,

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Speaker 1: like in like traditional shaving to know that, but that's

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Speaker 1: what I hear from him. He's like always trying to

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Speaker 1: test himself here how long you can make.

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Speaker 2: A blade, So doing that helps the blade last longer.

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Speaker 2: And also running it against So what I do is

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Speaker 2: I run it against my form the opposite way, so

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Speaker 2: nonding it Yeah, yeah, exactly, you're basically honing it so well.

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Speaker 2: I didn't know how up to date you were on

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Speaker 2: the blade lingo Joel's. But it gets rid of all

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Speaker 2: those tiny little nicks and smooths the blade out.

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Speaker 1: Okay, but yeah, all the blades for the wind. Totally

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Speaker 1: a frugal move in my book. Man, Yeah, I dig it,

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Speaker 1: all right. Malice mentioned the beer we're having on this episode.

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Speaker 1: This is a KBS by Founders, a classic beer if

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Speaker 1: there ever was one the craft beer scene. Indeed, we'll

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Speaker 1: see if it holds up. We'll give our thoughts on

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Speaker 1: this one at the end of the episode.

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Speaker 2: A like calendar, it says the original like they don't

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Speaker 2: even need it, doesn't need any other explanation.

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Speaker 1: Yes, sure than this. Yeah, you just see those three

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Speaker 1: letters put together and it's like irs and you know

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Speaker 1: what's coming for you.

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Speaker 2: And then that happens for those who aren't in the

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Speaker 2: No Kentucky Breakfast out. Looking forward to sharing our thoughts

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Speaker 2: at the end of the episode.

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Speaker 1: But yeah, man, all right, if you have a question,

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Speaker 1: by the way, a money question you want Matt and

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Speaker 1: I to tackle, or really any question. If you have

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Speaker 1: a relationship question, if you have send it our way.

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Speaker 1: Well we'll take any questions here.

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Speaker 2: Sure, what kind of advice or how we might steer

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Speaker 2: you wrong? But it sounds like fun.

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Speaker 1: We'll try. I'll give it if you give it a go.

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Speaker 1: If you have like a style or a wardrobe question,

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Speaker 1: send that into Matt two. He's a style genius. But

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Speaker 1: for real, if you have a money question going to

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Speaker 1: how to money dot com slash ask we would love

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Speaker 1: to take your question on an upcoming ask out How

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Speaker 1: to Money episode, maybe next week. All right, Matt, let's

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Speaker 1: get to a question specifically about what to do when

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Speaker 1: you're impaled by doge when occurs, Hi, Matt.

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Speaker 3: And Joel, this is Nancy from the Washington, DC area. First,

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Speaker 3: I want to start off by thanking you both for

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Speaker 3: sharing your knowledge and making personal finance so accessible and relatable.

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Speaker 3: So here is my dilemma. I started this year off

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Speaker 3: with high optimism and some pretty big financial goals, including

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Speaker 3: plans to max out my phone one K contribution for

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Speaker 3: the first time. I also plan to max out my

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Speaker 3: roth Ira contribution, which I have been doing for the

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Speaker 3: last three years. Lastly, I also had plans to finish

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Speaker 3: paying off my student loans to become debt free. Unfortunately,

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Speaker 3: these financial plans for the year have taken an unexpected hit,

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Speaker 3: as I was recently affected by the mass layoffs in

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Speaker 3: the federal workforce. I wanted to reach out for your

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Speaker 3: advice on navigating this difficult transition. So here are a

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Speaker 3: few things that I have done so far. One is

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Speaker 3: that I have already implemented a very bones budget something

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Speaker 3: I learned from your podcast. Two is I plan to

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Speaker 3: move in with family to minimize some expenses, including rent. Lastly,

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Speaker 3: I will also be applying for the unemployment program for

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Speaker 3: the state in which I worked. So my emergency savings

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Speaker 3: is currently at fourteen thousand because I have been working

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Speaker 3: on building six months worth of living expenses as calculated

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Speaker 3: from my burbones budget. I would greatly appreciate any advice

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Speaker 3: on anything else that I should be doing during this time.

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Speaker 3: I truly appreciate any insights that you can share and

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Speaker 3: look forward to hearing your thoughts.

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Speaker 2: Joel, I love that Nancy started off with all of

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Speaker 2: the awesome goals that she had laid out before her, right, Like,

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Speaker 2: that is a lot of stuff, Nancy, that you were

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Speaker 2: trying to accomplish this year in twenty five.

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Speaker 1: Yeah. But the truth is when you get laid off

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Speaker 1: all of those other goals.

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Speaker 2: They essentially get put on the back burner. And I

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Speaker 2: think this more than anything. It can be tough from

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Speaker 2: an emotional standpoint when you are chomping at the bit

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Speaker 2: you're trying to eliminate that you're trying to grow your wealth,

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Speaker 2: and like, we still want to see you get those

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Speaker 2: student loans paid off. We want to see you max

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Speaker 2: out of four one k off in the future, but

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Speaker 2: for the time being, it's important to look at your

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Speaker 2: finances through more of a friage kind of perspective. Right Joel,

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Speaker 2: you mentioned like her getting impaled by Doge, Like, right now,

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Speaker 2: what you want to do is stem the bleeding and

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Speaker 2: the ability for you to stay solvent for a longer

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Speaker 2: period of time. That is, for you, right now, incredibly crucial.

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Speaker 1: And that can be so demoralizing. Especially Let's say you've

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Speaker 1: been listening to the podcast for a couple of years

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Speaker 1: and you're like, boom, learn so much I've cut here.

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Speaker 1: I'm like, great, I just got to raise Maybe I'm

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Speaker 1: accelerating my ability to hit all these goals, and like

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Speaker 1: I'm going to be doing some of the things that

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Speaker 1: Joel and Matt have talked about a bunch and I'm

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Speaker 1: so pumped and I can't believe like all the progress

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Speaker 1: I'm going to make and then something like this happens.

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Speaker 1: It's a massive setback, feels like a gut punch, And

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Speaker 1: you know it's our goal here, Nancy, to help you

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Speaker 1: the best we can. Yeah, and yeah, the sort of

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Speaker 1: trioge thing, it's the name of the game. Right now.

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Speaker 1: You're already doing a lot of what we would suggest

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Speaker 1: based on kind of how you've reacted already in your question,

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Speaker 1: which just shows I think that you didn't stay breathless

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Speaker 1: for long. Incredibly nicely done on the bare bones budget

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Speaker 1: front for listeners who aren't familiar, we want everyone to

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Speaker 1: have a bare bones budget. You create it, you don't

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Speaker 1: necessarily implement it though, until a need arises. But it's

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Speaker 1: a really helpful exercise to perform, and it's crucial right

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Speaker 1: to enact it if income stops following in totally. You're basically,

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Speaker 1: you know, taking expenses down to the bare minimum. No

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Speaker 1: eating out, you're cutting subscriptions, you're cutting back on travel,

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Speaker 1: all that kind of stuff. Because when we're trying to

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Speaker 1: make every dollar that we have go as far as possible,

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Speaker 1: we want to limit those excess expenditures that aren't necessary.

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Speaker 1: They're nice to have, but man, you don't want to

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Speaker 1: have those because you don't want to run out of

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Speaker 1: your money. You're trying to make it last as long

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Speaker 1: as possible right now. Yeah, it's like a break glass

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Speaker 1: in case of emergency type of budget. Yea, And I

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Speaker 1: mean we've.

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Speaker 2: Got one, and I will say too, I think it

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Speaker 2: could be even helpful. So for everyone who you know,

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Speaker 2: maybe they think they are immune to getting laid off

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Speaker 2: or don't foresee an income emergency in the near future.

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Speaker 2: But even just going through the practice of creating a

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Speaker 2: budget that is slimmer than the current one can allow

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Speaker 2: you to weather different storms. And this is something that

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Speaker 2: Kate and I have done. Like we've got a bare

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Speaker 2: bones budget, we also have like a just a lean budget,

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Speaker 2: like where we haven't cut back to the bone, and

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Speaker 2: certain expenses in our life we're not going to change

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Speaker 2: if things were to get a little bit more tight,

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Speaker 2: Like our grocery budget every month is pretty much going

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Speaker 2: to stay the same. We're not really gonna We've realized that,

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Speaker 2: you know what, that's kind of important to us. But

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Speaker 2: there are other things that we save up for throughout

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Speaker 2: the year, like vacations or how much we spend around Christmas.

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Speaker 2: Things like our blow money, things like that that we

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Speaker 2: you know, it's unaccountable dollars that Kate spends, money that

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Speaker 2: I spend. Those are things that we compare back. So

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Speaker 2: like literally just being able to cut it by two

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Speaker 2: thirds allows us to have a not so bare bones budget. Yeah,

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Speaker 2: and so what's great about going through the sexist.

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Speaker 1: Such if you're not completely devoid of income you can

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Speaker 1: implement if you're completely.

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Speaker 2: Devoided van oh aye, you want to cut back to

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Speaker 2: the bone. But this is so I guess I'm addressing.

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Speaker 2: This is especially helpful I think for folks who might

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Speaker 2: be interested in financial independence, because you might be thinking,

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Speaker 2: all right, how much money do I have?

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Speaker 1: Like okay, if we.

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Speaker 2: Wanted to say or even like take a sabbatical or

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Speaker 2: something like that. We talked about that a few months ago.

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Speaker 2: The ability to stretch your dollars and have those dollars

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Speaker 2: go first there. I think that's just a great exercise

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Speaker 2: to allow you to see what your money can do

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Speaker 2: for you, which is ultimately the name of the aim

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Speaker 2: man agreed.

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Speaker 1: Yeah, and that's how I think the bare bones budget

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Speaker 1: can be powerful even if you never actually have to

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Speaker 1: use it. Like there is something about the exercise that

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Speaker 1: opened your eyes to maybe some of the to use

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Speaker 1: a Doge term, the waste fraud abuse in your own life. Yeah,

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Speaker 1: that you might want to.

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Speaker 2: Look out, like having a parachute, right, or like like

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Speaker 2: a life raft on a boat. It's like, well, we

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Speaker 2: don't hope that we ever have to use that thing,

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Speaker 2: but it's nice to know that it's there just in

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Speaker 2: case the worst were.

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Speaker 1: To happen, and it would be nice. I think if

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Speaker 1: you could easily cut something like a car payment. That's

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Speaker 1: typically harder to do, right, and you don't necessarily want

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Speaker 1: to get rid of your liquid cash to eradicate a

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Speaker 1: car payment because they don't have money forward to the

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Speaker 1: other bills. But in some cases I would say it's

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Speaker 1: worth looking towards those bigger line items to see if

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Speaker 1: you can reduce or mitigate the impact of that expense. Right,

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Speaker 1: Nancy sounds like she doesn't have a mortgage. The fact

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Speaker 1: that she can move in with her family is huge

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Speaker 1: from a cost saving that perspective. That is a massive

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Speaker 1: That's one of those line items that typically is it's

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Speaker 1: impossible to undo, at least in the immediate short term,

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Speaker 1: maybe in more of the medium term. When your lease

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Speaker 1: is up. You can make a decision like that, but

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Speaker 1: the fact that Nancy has been able to reduce her

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Speaker 1: living costs to that extent is impressive. And by the way,

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Speaker 1: Nancy having amass that fourteen thousand dollars emergency fund, this

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Speaker 1: is exactly why it's there, right. Oh yeah, job loss

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Speaker 1: is often unpredictable, and you're gonna be thankful that you

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Speaker 1: had more savings rather than less if you're out of

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Speaker 1: work for a while.

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Speaker 2: And part of the reason is because job hunting isn't

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Speaker 2: always quick like you like we think that like, oh,

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Speaker 2: I've got the ability to jump back out there and

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Speaker 2: land something. But we don't want you to feel like

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Speaker 2: you have to take the first job that comes along.

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Speaker 2: We want you to have some options. And if your

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Speaker 2: budget is tight, you've got a nice little savings nest bag.

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Speaker 2: Well you can have a bit more confidence to turn

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Speaker 2: something down that isn't necessarily going to be a good

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Speaker 2: fit for you, maybe something a position or a job

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Speaker 2: that doesn't make sense for your career trajectory, or even

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Speaker 2: one that doesn't pay anough. Yeah, the ability to have

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Speaker 2: more money on hand allows you to hold out for

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Speaker 2: a job that does meet those parameters. And I just

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Speaker 2: mentioned Katie North The Art of the Sabbatical. That was

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Speaker 2: the episode we recorded with her. Remember, one of the

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Speaker 2: things that she wrote about in her book was the

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Speaker 2: fact that it typically takes three months longer to land

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Speaker 2: a job than people think.

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Speaker 1: Yeah.

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Speaker 2: And what I love about that though, is that it

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Speaker 2: is that it depends on the individual. Because you can

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Speaker 2: take somebody who's super optimistic and they're like, oh, I'm

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Speaker 2: going to find something in like two weeks. It's like, okay,

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Speaker 2: maybe actually it's going to be three months in two weeks.

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Speaker 1: Yeah.

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Speaker 2: But then you got somebody who's a bit They're like,

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Speaker 2: you know what, I'm not totally sure what's going to

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Speaker 2: be out there for me. You know, I'm kind of

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Speaker 2: getting older. I don't have a ton of skills this.

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Speaker 2: It might take me, like, I don't know, six months

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Speaker 2: and like nine months. Okay, maybe it'll take you like

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Speaker 2: nine months or a year. But according to her clients

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Speaker 2: and the folks that she ends up coaching, she found

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Speaker 2: across the board that it typically took folks three months

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Speaker 2: longer than they thought it would in order to find

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Speaker 2: that next position.

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Speaker 1: And what you're highlighting here, Matt, is that having a

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Speaker 1: robust emergency fund puts you in a position of strength,

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Speaker 1: and that's that's where you want to be, right You

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Speaker 1: don't want to be in kind of the place where

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Speaker 1: you are coerced and are taking a job not because

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Speaker 1: someone forced you to, but you had to coerce yourself

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Speaker 1: to take the first job that came along. And Nancy

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Speaker 1: Shelson mentioned that she's applying for unemployment benefits. You pay

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Speaker 1: into that system, Nancy, and now you get to tap it.

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Speaker 1: This is not contrary to what many people believe, Matt,

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Speaker 1: some sort of some form of government benevolence, like we

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Speaker 1: all pay into the unemployment system, and so we deserve

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Speaker 1: to get that money if we lose our job. This

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Speaker 1: is going to help bring in some income, but it's

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Speaker 1: not going to be any anywhere near the paycheck that

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Speaker 1: you're used to getting, Nancy. So just note that, And

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Speaker 1: what else should you be doing? I would say, tap

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Speaker 1: your network. You want to get the ball rolling on

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Speaker 1: that asap. You know, similar to unemployment benefits. You've built

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Speaker 1: this network out and now it's the time to use it.

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Speaker 1: So set up coffee dates. I mean, let them, Let

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Speaker 1: let the people in your network know that you're looking

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Speaker 1: for work and what you're looking for. And I mean

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Speaker 1: the whole point of developing that network over a long

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Speaker 1: period of time and staying in touch with people is

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Speaker 1: to be able to what when you're thirsty, you've already

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Speaker 1: dugged it well, as our friend Jordan Harbinger says, so

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Speaker 1: time to get out your straw and start sipping. Yeah,

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Speaker 1: if we're gonna follow the analogy, i'nel yeah, Okay. Another

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Speaker 1: piece of advice I'd share with Nancy is to not

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Speaker 1: pay down on debt anymore than she needs to in

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Speaker 1: order to maintain these minimums, and to stop completely contributing

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Speaker 1: to retirement accounts. She said that she went into to

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Speaker 1: max out her roth IRA this year. Well, if you

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Speaker 1: get another job like super quick, well you might still

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Speaker 1: be able to do that, but definitely don't contribute at

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Speaker 1: all until then. Like this is an instance in a

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Speaker 1: period of time in your life when cash is keen,

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Speaker 1: Like you want to be liquid, you want to have

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Speaker 1: that in hand. And we almost never tell folks to

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Speaker 1: avoid putting money into their roth ira or to decelerate

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Speaker 1: debt payoff. But if your income, if it dries up,

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Speaker 1: you know at least for a small season here, so

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Speaker 1: should those goals, and so you want to focus on

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Speaker 1: is triage, is keeping the boat afloat, is doing only

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Speaker 1: what's necessary in order to for you to get by.

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Speaker 1: I think, last, but not least, what I would suggest

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Speaker 1: Nancy is to take care of yourself mentally and physically.

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Speaker 1: It can be easy to get down about being jobless,

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Speaker 1: but you didn't lose your job because you stink like.

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Speaker 1: You didn't get fired because you're a bad employee. This

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Speaker 1: is something that's totally out of your controls, like vibe

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Speaker 1: shifts in the political space. So just we would suggest

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Speaker 1: finding healthy outlets, maintaining your friendships, work out, go running,

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Speaker 1: do some push ups. It's hard not to be anxious,

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Speaker 1: but know that you've set yourself up to maneuver this

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Speaker 1: set back well, you are well prepared to handle this.

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Speaker 1: Down to her, I think for.

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Speaker 2: Her specifically too, since she's a part of this mass layoff,

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Speaker 2: there's almost I feel like there's more of an excuse,

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Speaker 2: almost like I think folks are gonna be like, oh man, yeah,

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Speaker 2: you're a part of just like the insanity that took

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Speaker 2: place last month, totally get it. There's a part of

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Speaker 2: it that does feel a bit external to her and

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Speaker 2: hopefully there's no resume gap that needs to be explained.

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Speaker 2: It's self explanation. I think that might be able to

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Speaker 2: be helpful from an emotional sort of emotional health mental

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Speaker 2: health standpoint. And again, I want to go back to

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Speaker 2: the fact that the fact that you are moving back

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Speaker 2: in with your family tells me that you've got a

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Speaker 2: good relationship with your folks or with your family. I

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Speaker 2: would also lean on them. I think this could be

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Speaker 2: an awesome time for you to kind of rekindle a

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Speaker 2: relationship with them.

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Speaker 1: Where Like I just.

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Speaker 2: Think back to my younger years and all I wanted

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Speaker 2: to do was get out of the house, like do

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Speaker 2: my own thing and start my own life. But then,

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Speaker 2: like as you get older, you realize that, man, like

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Speaker 2: your your parents, your family, there's some wisdom there.

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Speaker 1: Even if you don't necessarily.

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Speaker 2: Want your life to look exactly like your parents, there's

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Speaker 2: still benefit to be gained there, or even you know,

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Speaker 2: benefit that you can share as well. So, Nancy, I

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Speaker 2: want you to look at the silver lining, I guess

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Speaker 2: of moving back in with your folks and for it

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Speaker 2: to not necessarily be this like, oh, man, I guess

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Speaker 2: I'm just not cut out to be a grown up

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Speaker 2: on my own. No, this is a great time I

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Speaker 2: think for you to kind of strengthen those relationships even further.

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Speaker 1: Agreed, All right, We've got more to get to on

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Speaker 1: this episode, including the Costco credit card. Is it worth

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Speaker 1: the benefits that they tout? We'll talk about that and

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Speaker 1: more right after this.

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Speaker 2: Of course, jol if you can only talk about one retailer,

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Speaker 2: it's going to be Costco, And of course my one

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Speaker 2: retailer is going to be.

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Speaker 1: Aldi bry Fitting during this episode, do you ever like

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Speaker 1: the MTV they would have the Claymation Death Battles death match?

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Speaker 1: What if there was what if there was an Aldi

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Speaker 1: verse Costco? One who would win?

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Speaker 2: I mean, I gotta think it'd be Aldi, just so

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Speaker 2: dang scrappy, you're so wrong. We will get to the

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Speaker 2: Costco credit card question. Maybe we'll even get to a

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Speaker 2: check secrets, a secret early retirement question. We'll get to

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Speaker 2: this here in a minute. Let's now hear from a

435
00:18:26,160 --> 00:18:29,560
Speaker 2: listener who has been a landlord here for a minute

436
00:18:29,640 --> 00:18:31,720
Speaker 2: and they're trying to figure out whether or not it's

437
00:18:31,720 --> 00:18:33,280
Speaker 2: still all that is cracked up to be.

438
00:18:33,840 --> 00:18:36,159
Speaker 4: Hey, Matt and Joel, my name is Chris, My husband

439
00:18:36,160 --> 00:18:37,960
Speaker 4: and I bought a condo in the city in twenty

440
00:18:38,040 --> 00:18:40,760
Speaker 4: nineteen and refinanced in twenty twenty with a rate of

441
00:18:40,840 --> 00:18:43,920
Speaker 4: two point eight seventy five. We then bought a house

442
00:18:43,960 --> 00:18:46,560
Speaker 4: outside the city after having a baby in twenty twenty three.

443
00:18:47,280 --> 00:18:49,080
Speaker 4: We kept the condo and have been renting it out

444
00:18:49,080 --> 00:18:51,120
Speaker 4: for the last two years at thirty two hundred per month.

445
00:18:51,480 --> 00:18:53,879
Speaker 4: This year we lost a residential tax credit, which increased

446
00:18:53,880 --> 00:18:56,160
Speaker 4: the monthly mortgage payment to twenty four hundred and eight

447
00:18:56,160 --> 00:18:59,399
Speaker 4: dollars Monthly hoas are two twenty and the annual insurance

448
00:19:00,160 --> 00:19:03,080
Speaker 4: is about six sixty. We are now making only a

449
00:19:03,119 --> 00:19:05,520
Speaker 4: couple hundred dollars a month off it in cash. The

450
00:19:05,560 --> 00:19:08,199
Speaker 4: equity grows a little over nine hundred per month, and

451
00:19:08,240 --> 00:19:11,639
Speaker 4: the numbers will only go up from there. If we

452
00:19:11,640 --> 00:19:13,480
Speaker 4: were to sell right now, we would pocket about one

453
00:19:13,560 --> 00:19:17,159
Speaker 4: hundred and forty eight thousand after taxes and fees. The

454
00:19:17,200 --> 00:19:20,320
Speaker 4: house we bought has already appreciated about fifty percent, but

455
00:19:20,400 --> 00:19:22,399
Speaker 4: selling it would mean having to find somewhere else at

456
00:19:22,440 --> 00:19:24,360
Speaker 4: the current higher rates, and we wouldn't get as much

457
00:19:24,359 --> 00:19:26,800
Speaker 4: for our money. We planned to slowly fix up the

458
00:19:26,800 --> 00:19:29,480
Speaker 4: house and sell it in about four years. Money is

459
00:19:29,520 --> 00:19:31,440
Speaker 4: tight right now with our high rate on the house,

460
00:19:31,640 --> 00:19:34,880
Speaker 4: childcare expenses, and a home equity loan. We have after

461
00:19:34,920 --> 00:19:36,840
Speaker 4: need to pour a large chunk of money into just

462
00:19:36,880 --> 00:19:40,200
Speaker 4: making the house litable. We had to remove about forty

463
00:19:40,280 --> 00:19:42,919
Speaker 4: years of smoking damage that was so bad that a

464
00:19:42,960 --> 00:19:46,400
Speaker 4: major national disaster cleanup company wouldn't touch it. We both

465
00:19:46,440 --> 00:19:48,720
Speaker 4: picked up side jobs to help pay for this. I

466
00:19:48,880 --> 00:19:51,000
Speaker 4: drive for Amazon Flex a few nights a week, and

467
00:19:51,040 --> 00:19:54,119
Speaker 4: my husband works at a local retailer. Although selling the

468
00:19:54,119 --> 00:19:56,440
Speaker 4: condo could pay off our home equity debt and also

469
00:19:56,480 --> 00:19:59,000
Speaker 4: our car loan, which is only about fifteen thousand dollars

470
00:19:59,119 --> 00:20:01,600
Speaker 4: right now, I'm not sure we should give up the

471
00:20:01,640 --> 00:20:04,480
Speaker 4: extra income, no matter how little it is. To avoid

472
00:20:04,520 --> 00:20:07,359
Speaker 4: capital gains. We would need to sell before August thirty first,

473
00:20:07,359 --> 00:20:09,919
Speaker 4: twenty twenty six. My question for you guys is it

474
00:20:09,960 --> 00:20:12,560
Speaker 4: worth holding onto the property long term if we're making

475
00:20:12,600 --> 00:20:15,520
Speaker 4: less than six thousand dollars per year, if you incorporate

476
00:20:15,560 --> 00:20:18,600
Speaker 4: repairs and incidentals. I would hate to lose the low

477
00:20:18,640 --> 00:20:21,200
Speaker 4: mortgage rate, and we hope to use the income from

478
00:20:21,200 --> 00:20:23,760
Speaker 4: the property in the future to fund our daughter's five

479
00:20:23,800 --> 00:20:26,200
Speaker 4: twenty nine plan. I would love to hear your take

480
00:20:26,240 --> 00:20:27,480
Speaker 4: on this best Friends.

481
00:20:27,200 --> 00:20:30,000
Speaker 1: Out Well, Matt allowed to cover here by the way,

482
00:20:30,000 --> 00:20:32,119
Speaker 1: that best Friends Out the smoking damage. Chris is a

483
00:20:32,119 --> 00:20:34,040
Speaker 1: longtime listener, Yes she is. She knows what's up. We

484
00:20:34,080 --> 00:20:35,760
Speaker 1: say that at the end of every episode. Yeah, and

485
00:20:36,040 --> 00:20:37,920
Speaker 1: for the folks who don't, and then we leave last

486
00:20:37,960 --> 00:20:41,760
Speaker 1: all the way till the end, which wouldn't I'm guessing

487
00:20:41,800 --> 00:20:45,240
Speaker 1: as most folks probably before cut out five? Well, that

488
00:20:45,320 --> 00:20:48,760
Speaker 1: smoking damage sounds nuts? Does damage disaster company? I had

489
00:20:48,760 --> 00:20:51,119
Speaker 1: a friend who worked for one, and they so they

490
00:20:51,160 --> 00:20:54,919
Speaker 1: see some crazy, nasty, mind weird stuff. Yes, yes I do.

491
00:20:55,080 --> 00:20:58,879
Speaker 1: And yeah, the man his job. I did not envy it.

492
00:20:58,920 --> 00:21:01,399
Speaker 1: I'll say that, Chris. Let's get to the heart of

493
00:21:01,440 --> 00:21:04,000
Speaker 1: your question. That condo with the sub three percent rate,

494
00:21:04,320 --> 00:21:06,240
Speaker 1: it's a gorgeous thing, and I think I just want

495
00:21:06,280 --> 00:21:08,000
Speaker 1: to talk about this for a second out because it's

496
00:21:08,040 --> 00:21:10,359
Speaker 1: hard to put a number to how much it's actually

497
00:21:10,400 --> 00:21:12,919
Speaker 1: worth to hold on to a low interest rate mortgage

498
00:21:13,000 --> 00:21:16,560
Speaker 1: in an environment right where inflation is higher and where

499
00:21:16,600 --> 00:21:19,520
Speaker 1: you couldn't get a mortgage anywhere close to that these days.

500
00:21:20,040 --> 00:21:22,359
Speaker 1: Friend of the Show, Ban Carlson, he tried, he tried

501
00:21:22,480 --> 00:21:24,560
Speaker 1: to kind of wrap his arms around this question recently,

502
00:21:25,320 --> 00:21:27,320
Speaker 1: and I think this is at least helpful, even if

503
00:21:27,359 --> 00:21:29,960
Speaker 1: it's not a fully sufficient answer. He said, two years ago,

504
00:21:30,240 --> 00:21:32,119
Speaker 1: you would have been paying around forty percent of the

505
00:21:32,119 --> 00:21:34,639
Speaker 1: purchase price in interest costs over the life of a

506
00:21:34,640 --> 00:21:37,520
Speaker 1: thirty year loan. Now interest costs are more than the

507
00:21:37,560 --> 00:21:39,320
Speaker 1: cost of the house. So so you bought a five

508
00:21:39,400 --> 00:21:41,879
Speaker 1: hundred thousand dollars house, Matt. What Ban Carls is saying

509
00:21:42,119 --> 00:21:45,000
Speaker 1: is you would have paid two hundred thousand dollars in

510
00:21:45,000 --> 00:21:49,040
Speaker 1: interest back in those or in those low mortgage rate days.

511
00:21:49,040 --> 00:21:51,639
Speaker 1: Now you're paying more than five hundred thousand dollars in

512
00:21:51,720 --> 00:21:53,600
Speaker 1: interest over the life of the loan. Sucks. We're talking

513
00:21:53,640 --> 00:21:55,879
Speaker 1: about hundreds of thousands of dollars saved in interest vers

514
00:21:55,920 --> 00:21:58,639
Speaker 1: buying that property today. It's insane when you put it

515
00:21:58,680 --> 00:22:00,879
Speaker 1: like that, but maybe that puts some helpful context around

516
00:22:01,119 --> 00:22:04,360
Speaker 1: how valuable it is to have that locked in low rate.

517
00:22:04,560 --> 00:22:06,000
Speaker 2: It doesn't mean it's a slam dunk for you to

518
00:22:06,000 --> 00:22:08,320
Speaker 2: hang on to it, though it's very attractive. But let's

519
00:22:08,480 --> 00:22:12,560
Speaker 2: discuss the tax implications, because it's it's rare that a

520
00:22:12,680 --> 00:22:16,719
Speaker 2: tax that's due goes from nothing to a lot based

521
00:22:16,760 --> 00:22:19,840
Speaker 2: on one singular deadline. But in the case here of

522
00:22:19,880 --> 00:22:23,239
Speaker 2: selling a former primary residence, that's exactly what happens. If

523
00:22:23,280 --> 00:22:26,159
Speaker 2: you sell in the next year, you get to avoid

524
00:22:26,160 --> 00:22:28,760
Speaker 2: tax altogether. But if you wait a bit too long, yeah,

525
00:22:28,800 --> 00:22:31,440
Speaker 2: you're gonna end up owing a boat load. So if

526
00:22:31,480 --> 00:22:33,119
Speaker 2: you're not in it for the long haul, if you

527
00:22:33,160 --> 00:22:35,359
Speaker 2: don't want to continue to be a landlord, selling it

528
00:22:35,920 --> 00:22:39,160
Speaker 2: before that deadline in order to avoid capital gains taxes,

529
00:22:39,200 --> 00:22:42,560
Speaker 2: it makes a ton of sense. Yeah, I get why

530
00:22:42,600 --> 00:22:44,560
Speaker 2: she's also thinking through that, because I don't necessarily hear

531
00:22:44,600 --> 00:22:46,879
Speaker 2: her saying that she hates being a landlord, but she's

532
00:22:47,040 --> 00:22:49,840
Speaker 2: highlighting the numbers here. Before she was making a good

533
00:22:49,880 --> 00:22:52,080
Speaker 2: bit of money. Now she's like, man, we're not making

534
00:22:52,119 --> 00:22:54,640
Speaker 2: nearly as much. It almost feels like an insult. It's

535
00:22:54,680 --> 00:22:57,080
Speaker 2: like getting slapped in the face. But that doesn't mean

536
00:22:57,560 --> 00:23:00,000
Speaker 2: just because you're multi cash flow isn't as strong as

537
00:23:00,000 --> 00:23:01,520
Speaker 2: it used to be, doesn't mean that there's still not

538
00:23:01,600 --> 00:23:03,879
Speaker 2: a case for keeping that property, for hanging on to it.

539
00:23:03,920 --> 00:23:06,399
Speaker 1: I wouldn't be making the decision to sell based on

540
00:23:06,760 --> 00:23:09,399
Speaker 1: the monthly profit alone, but the real value of holding

541
00:23:09,440 --> 00:23:12,280
Speaker 1: onto real estate. It's often an increase in value you're

542
00:23:12,320 --> 00:23:14,719
Speaker 1: going to realize over time, she mentioned, I think that

543
00:23:14,760 --> 00:23:17,520
Speaker 1: the property was adding nine hundred dollars a month in

544
00:23:17,560 --> 00:23:22,080
Speaker 1: equity equity. That doesn't sound far fetched. And the truth is,

545
00:23:22,080 --> 00:23:23,760
Speaker 1: when it comes to real estate, someone else is paying

546
00:23:23,760 --> 00:23:26,000
Speaker 1: off your debt. You make maybe not a whole lot

547
00:23:26,040 --> 00:23:29,320
Speaker 1: every month, but you also watch the value rise over time,

548
00:23:29,600 --> 00:23:31,360
Speaker 1: and so over the course of a couple of decades,

549
00:23:32,280 --> 00:23:34,720
Speaker 1: this piece of real estate can be a life changing

550
00:23:34,720 --> 00:23:38,680
Speaker 1: financial asset. It's just not as easy or as sexy,

551
00:23:39,000 --> 00:23:41,320
Speaker 1: right as some of the folks on the Instagram real

552
00:23:41,400 --> 00:23:43,480
Speaker 1: estate Right they want to make it sound, those influencers,

553
00:23:43,640 --> 00:23:46,639
Speaker 1: They make it sound like your instant path to riches

554
00:23:46,960 --> 00:23:50,920
Speaker 1: is owning some real estate, and as any normal person

555
00:23:51,119 --> 00:23:54,600
Speaker 1: who has bought rental real estate knows, it just doesn't

556
00:23:54,800 --> 00:23:57,160
Speaker 1: work like that. So I think the answer to buy

557
00:23:57,200 --> 00:23:59,400
Speaker 1: or sell, at least in part, comes down to whether

558
00:23:59,440 --> 00:24:01,520
Speaker 1: you want to go through pain to get those gains

559
00:24:01,880 --> 00:24:04,240
Speaker 1: or whether you want to sell and snag the games

560
00:24:04,280 --> 00:24:06,679
Speaker 1: you've made already in order to do smart stuff with

561
00:24:06,720 --> 00:24:09,159
Speaker 1: it now to relieve some of that current financial pressure.

562
00:24:09,680 --> 00:24:11,680
Speaker 1: It's it's a tough question. Matt, totally.

563
00:24:11,760 --> 00:24:11,920
Speaker 4: Yeah.

564
00:24:11,920 --> 00:24:12,959
Speaker 1: So I'll play devil's advocate.

565
00:24:13,000 --> 00:24:14,760
Speaker 2: I'll make a case for selling because the one hundred

566
00:24:14,760 --> 00:24:16,800
Speaker 2: and forty eight thousand dollars dollars.

567
00:24:16,480 --> 00:24:18,200
Speaker 1: That she's going to pocket it could help to pay

568
00:24:18,200 --> 00:24:18,920
Speaker 1: off that car.

569
00:24:18,960 --> 00:24:22,200
Speaker 2: Of course, she could eliminate that home equity debt, which

570
00:24:22,400 --> 00:24:25,520
Speaker 2: I'm guessing is probably fairly high now given where interest

571
00:24:25,600 --> 00:24:25,879
Speaker 2: rates have.

572
00:24:26,160 --> 00:24:27,480
Speaker 1: Headed close to a nine percent rate.

573
00:24:27,520 --> 00:24:29,159
Speaker 2: And I think it could also allow a little more

574
00:24:29,240 --> 00:24:32,040
Speaker 2: flexibility to work, maybe a little bit less, maybe even

575
00:24:32,119 --> 00:24:34,080
Speaker 2: DII some of those repairs that you want to make

576
00:24:34,119 --> 00:24:35,800
Speaker 2: to your current home and then there.

577
00:24:35,640 --> 00:24:36,600
Speaker 1: No one else will do them for you.

578
00:24:36,920 --> 00:24:39,159
Speaker 2: Yeah, well, so sounds like she already had to do that,

579
00:24:39,200 --> 00:24:41,560
Speaker 2: but like they're looking to make additional improvements in order

580
00:24:41,640 --> 00:24:44,520
Speaker 2: to be able to reap even more of an equity

581
00:24:44,520 --> 00:24:46,399
Speaker 2: reward in a few years. But there's something to be

582
00:24:46,440 --> 00:24:49,320
Speaker 2: said for selling an investment tax free in order to

583
00:24:49,440 --> 00:24:53,080
Speaker 2: get rid of debt to cash load these expenses that

584
00:24:53,200 --> 00:24:55,800
Speaker 2: are also increasing the value of your current home. Right,

585
00:24:55,840 --> 00:24:58,040
Speaker 2: and so it's not like going on a vacation I

586
00:24:58,040 --> 00:25:01,800
Speaker 2: guess where it's or buying a a super fancy car

587
00:25:01,840 --> 00:25:05,200
Speaker 2: that's going to completely depreciate. But selling it could also

588
00:25:05,200 --> 00:25:07,240
Speaker 2: allow you both to focus a bit more. I think

589
00:25:07,280 --> 00:25:09,639
Speaker 2: even on growing your career. You didn't say what it

590
00:25:09,680 --> 00:25:11,480
Speaker 2: is that you and your husband do full time, but

591
00:25:11,480 --> 00:25:13,200
Speaker 2: if you're able to focus on that like a laser,

592
00:25:13,240 --> 00:25:16,600
Speaker 2: and or able to ordinarily boost your income at your

593
00:25:16,680 --> 00:25:19,280
Speaker 2: day job, I think that could be a totally reasonable

594
00:25:19,359 --> 00:25:22,200
Speaker 2: argument as well. And that's because I think side gigs

595
00:25:22,240 --> 00:25:26,000
Speaker 2: are good from a short term perspective, right, Like, if

596
00:25:26,000 --> 00:25:28,280
Speaker 2: you've got a near term goal that you're trying to

597
00:25:28,400 --> 00:25:30,679
Speaker 2: pursue and you got something that you want to eliminate,

598
00:25:30,840 --> 00:25:34,160
Speaker 2: I think a side gig, a side job, working nights, weekends,

599
00:25:34,200 --> 00:25:36,800
Speaker 2: even they can allow you to achieve that goal faster.

600
00:25:36,960 --> 00:25:39,320
Speaker 2: But I think that they can be detrimental for most

601
00:25:39,359 --> 00:25:41,640
Speaker 2: folks over the long haul. But I mean, it's hard

602
00:25:41,640 --> 00:25:44,040
Speaker 2: to sustain, especially when you once you start growing your

603
00:25:44,040 --> 00:25:46,840
Speaker 2: family and you have kids totally in the mix. Yeah, yeah, no,

604
00:25:46,880 --> 00:25:48,520
Speaker 2: I agree, But I mean I guess that being said, like,

605
00:25:48,520 --> 00:25:50,280
Speaker 2: if I were in her shoes, if I was charged,

606
00:25:50,359 --> 00:25:52,960
Speaker 2: Like and obviously we don't know all of her all

607
00:25:52,960 --> 00:25:55,760
Speaker 2: the details here, everything that's going into her decision making,

608
00:25:56,400 --> 00:25:58,479
Speaker 2: but she said that they basically have a baby at home.

609
00:25:58,520 --> 00:26:00,320
Speaker 2: It sounds like they had a baby like two years

610
00:26:00,320 --> 00:26:02,760
Speaker 2: ago or something like that. As a parent, if I

611
00:26:02,800 --> 00:26:04,399
Speaker 2: were in your shoes, I would be more willing to

612
00:26:04,440 --> 00:26:09,240
Speaker 2: sacrifice now while they're young, before they have permanent memories,

613
00:26:09,640 --> 00:26:12,320
Speaker 2: in order to achieve and like just go after whatever

614
00:26:12,359 --> 00:26:14,520
Speaker 2: it is that you want to do to eliminate this debt,

615
00:26:14,560 --> 00:26:16,760
Speaker 2: to get rid of that car lom, and to allow

616
00:26:16,800 --> 00:26:19,359
Speaker 2: yourself more options as they get older. And this is

617
00:26:19,359 --> 00:26:21,760
Speaker 2: a question, like I've asked a lot of older parents

618
00:26:21,840 --> 00:26:24,360
Speaker 2: to other friends of ours, because it's in my mind

619
00:26:24,400 --> 00:26:26,240
Speaker 2: a debate. Am I going to wish I had more

620
00:26:26,280 --> 00:26:28,760
Speaker 2: time in the here and now or like more time

621
00:26:28,800 --> 00:26:30,719
Speaker 2: down the road, like once the kids are off to college.

622
00:26:30,760 --> 00:26:33,600
Speaker 2: And like almost it's almost unanimous, Like there's been like

623
00:26:33,600 --> 00:26:35,800
Speaker 2: a couple folks who are just like, man, the kids

624
00:26:35,840 --> 00:26:38,000
Speaker 2: are off in college. The time that we've been able

625
00:26:38,040 --> 00:26:40,440
Speaker 2: to spend together as a couple in our empty nester years,

626
00:26:40,480 --> 00:26:42,840
Speaker 2: it's awesome. We're going on vacations, we're doing this, we're

627
00:26:42,840 --> 00:26:46,200
Speaker 2: doing that. But the vast majority of folks are saying, man,

628
00:26:46,320 --> 00:26:48,679
Speaker 2: I wish I had more time in like these prime

629
00:26:48,920 --> 00:26:53,280
Speaker 2: parenting years when they're forming these permanent memories, and like

630
00:26:53,560 --> 00:26:56,280
Speaker 2: when you are like imparting so much wisdom or at

631
00:26:56,320 --> 00:26:58,000
Speaker 2: least that you're trying to write. You know, you're like

632
00:26:58,000 --> 00:26:59,520
Speaker 2: trying to raise your kid, right or at lest you're

633
00:26:59,520 --> 00:27:02,119
Speaker 2: playing legos together. Yeah, yeah, and so like, and you

634
00:27:02,160 --> 00:27:04,320
Speaker 2: get to a point to where that's not as necessary.

635
00:27:04,359 --> 00:27:05,760
Speaker 1: But the stage of.

636
00:27:05,680 --> 00:27:08,040
Speaker 2: Life that they're in, they're in like this early stage

637
00:27:08,320 --> 00:27:10,320
Speaker 2: where you know their daughter is like two or three

638
00:27:10,400 --> 00:27:11,040
Speaker 2: or something like that.

639
00:27:11,160 --> 00:27:13,119
Speaker 1: So yeah, I don't know.

640
00:27:13,119 --> 00:27:15,479
Speaker 2: I think I'm leaning a little bit towards like getting

641
00:27:15,480 --> 00:27:18,720
Speaker 2: after it, maybe not selling the property, not selling the condo,

642
00:27:18,800 --> 00:27:21,160
Speaker 2: hanging on to it, like grinning and bearing it into

643
00:27:21,160 --> 00:27:23,240
Speaker 2: here and now knowing that this is going to be

644
00:27:23,280 --> 00:27:24,879
Speaker 2: something that's going to be when at your back for

645
00:27:24,960 --> 00:27:25,919
Speaker 2: years and decades to come.

646
00:27:26,040 --> 00:27:29,080
Speaker 1: So one other thing that might help if Chris and

647
00:27:29,119 --> 00:27:31,080
Speaker 1: her family, if they decided to make that decision, is

648
00:27:31,119 --> 00:27:34,639
Speaker 1: to not prioritize investing in a five pointy nine plans.

649
00:27:34,680 --> 00:27:37,879
Speaker 1: She mentioned that as being a big goal, and I

650
00:27:37,880 --> 00:27:39,919
Speaker 1: think it's a noble goal, but it's also one that

651
00:27:39,960 --> 00:27:42,159
Speaker 1: should be put on the back burner, like way on

652
00:27:42,200 --> 00:27:44,959
Speaker 1: the back burner. We always want folks to prioritize their

653
00:27:45,000 --> 00:27:48,119
Speaker 1: own financial health and investing for their own future before

654
00:27:48,160 --> 00:27:51,560
Speaker 1: they start socking away money for their kids college. One

655
00:27:51,600 --> 00:27:54,840
Speaker 1: little caveat here, Matt. That's aside from a small early contribution,

656
00:27:54,880 --> 00:27:56,520
Speaker 1: I don't know a lot of five point nine plans,

657
00:27:56,520 --> 00:27:59,280
Speaker 1: stuff like a minimum twenty dollars investment or something like that.

658
00:27:59,480 --> 00:28:02,399
Speaker 1: Put twenty just to get the fifteen year timeline rolling

659
00:28:02,440 --> 00:28:05,080
Speaker 1: for the roth Ira conversions. It's just like a just

660
00:28:05,119 --> 00:28:07,399
Speaker 1: a small nerdy note. But I do think it's important,

661
00:28:07,440 --> 00:28:09,720
Speaker 1: So put twenty bucks in. But then don't stick anything

662
00:28:09,760 --> 00:28:12,639
Speaker 1: else in that five to twenty nine plan. It's there

663
00:28:12,680 --> 00:28:15,320
Speaker 1: are just no scholarships for retirement, but there are for college. Right,

664
00:28:15,320 --> 00:28:17,919
Speaker 1: There's so many ways to reduce the price that you

665
00:28:17,960 --> 00:28:20,679
Speaker 1: pay for higher education. Also, do you know if your

666
00:28:20,760 --> 00:28:23,880
Speaker 1: kid's gonna go yet? You don't, And so if you were,

667
00:28:24,280 --> 00:28:26,399
Speaker 1: I'm down with prioritizing five to twenty nine plans if

668
00:28:26,400 --> 00:28:28,960
Speaker 1: you've jumped through all those other hoops first. But please

669
00:28:28,960 --> 00:28:31,240
Speaker 1: don't feel the pressure to make a big decision like

670
00:28:31,400 --> 00:28:34,520
Speaker 1: selling this condo in order to accomplish what I think

671
00:28:34,600 --> 00:28:37,199
Speaker 1: is more of a secondary or tertiary money goal. You

672
00:28:37,240 --> 00:28:39,920
Speaker 1: can always ramp up contributions in the future, and maybe

673
00:28:40,080 --> 00:28:42,000
Speaker 1: maybe you don't amass as much in that five twenty

674
00:28:42,080 --> 00:28:43,680
Speaker 1: nine plan as you hope for as you thought you

675
00:28:43,720 --> 00:28:46,440
Speaker 1: were you were going to get. But that's okay. I mean,

676
00:28:46,480 --> 00:28:48,600
Speaker 1: we want to make sure that you're planning for your

677
00:28:48,640 --> 00:28:51,120
Speaker 1: own financial future and that you're not burning the candle

678
00:28:51,160 --> 00:28:53,640
Speaker 1: at both ends so hard, right, that you can to

679
00:28:53,680 --> 00:28:55,680
Speaker 1: achieve some of those financial goals that you've set out

680
00:28:55,720 --> 00:28:56,880
Speaker 1: for yourselves totally.

681
00:28:57,000 --> 00:28:59,040
Speaker 2: And even though you do have that ability to roll

682
00:28:59,040 --> 00:29:00,840
Speaker 2: funds from a five to twenty nine into a wrath,

683
00:29:01,400 --> 00:29:04,200
Speaker 2: keeping that money there in that condo to where that

684
00:29:04,240 --> 00:29:07,320
Speaker 2: thing's cash flowing off down the road fifteen to twenty years. No,

685
00:29:07,360 --> 00:29:09,360
Speaker 2: it gives you the option, yes, to be able to

686
00:29:09,400 --> 00:29:11,920
Speaker 2: pay for college directly, or if.

687
00:29:11,760 --> 00:29:13,160
Speaker 1: You're not in a position to do that, to be

688
00:29:13,200 --> 00:29:15,360
Speaker 1: able to help supplement you and your husband's income. Right,

689
00:29:15,360 --> 00:29:15,960
Speaker 1: that's a great point.

690
00:29:16,000 --> 00:29:18,160
Speaker 2: Well, it just gives you more options, like you're not

691
00:29:18,280 --> 00:29:21,840
Speaker 2: completely earmarking it and siloing that money to only go

692
00:29:21,840 --> 00:29:22,800
Speaker 2: towards higher education.

693
00:29:22,840 --> 00:29:24,440
Speaker 1: A lot of people think the five twenty nine that's

694
00:29:24,440 --> 00:29:27,360
Speaker 1: a vehicle to save for college, but you're right holding

695
00:29:27,440 --> 00:29:29,320
Speaker 1: on to just pay for it around property as invested.

696
00:29:29,440 --> 00:29:31,240
Speaker 1: That's what when we talk with Brandon Turner back in

697
00:29:31,240 --> 00:29:34,880
Speaker 1: the day, he bought i think a quadplex for and

698
00:29:34,920 --> 00:29:37,320
Speaker 1: he's basically had this plan to pay it off in

699
00:29:37,400 --> 00:29:40,280
Speaker 1: eighteen years so that all the cash flow coming from

700
00:29:40,320 --> 00:29:42,600
Speaker 1: it could fund his daughter's college. Like it's an outside

701
00:29:42,600 --> 00:29:44,520
Speaker 1: of the box approach, but it's a good one.

702
00:29:44,520 --> 00:29:47,800
Speaker 2: It's one of the ways that it's basically magical how

703
00:29:47,840 --> 00:29:51,080
Speaker 2: fungible money can be. Yeah, but Joel, let's hear from

704
00:29:51,080 --> 00:29:53,760
Speaker 2: our next listener. This is a listener who is looking

705
00:29:53,760 --> 00:29:57,360
Speaker 2: to cultivate a secondary source of income for herself.

706
00:29:58,840 --> 00:30:01,080
Speaker 5: Hey, Matt and Joel. My name is Mary and I'm

707
00:30:01,080 --> 00:30:04,160
Speaker 5: from Southeast Michigan. I've been listening to your show for

708
00:30:04,280 --> 00:30:06,760
Speaker 5: years now, and I've learned so so much from the

709
00:30:06,800 --> 00:30:09,120
Speaker 5: both of you and Joel. I used to listen to

710
00:30:09,160 --> 00:30:11,080
Speaker 5: The Clark Howard Show when you were on it as well,

711
00:30:11,120 --> 00:30:13,080
Speaker 5: and so I learned a ton from you back then too.

712
00:30:13,680 --> 00:30:16,680
Speaker 5: Thank you both and keep up the good work. My

713
00:30:16,800 --> 00:30:20,200
Speaker 5: question for you today is about cultivating a secondary or

714
00:30:20,320 --> 00:30:24,120
Speaker 5: supplemental income source. I have a W two job and

715
00:30:24,160 --> 00:30:26,840
Speaker 5: I would like to start up essentially a side gig

716
00:30:27,080 --> 00:30:29,840
Speaker 5: that will supply me with a secondary source of income

717
00:30:29,880 --> 00:30:33,400
Speaker 5: in addition to that W two job. I would like

718
00:30:33,440 --> 00:30:36,640
Speaker 5: for that secondary income source to in ten years time

719
00:30:37,120 --> 00:30:40,800
Speaker 5: provide me at least sixty thousand dollars a year. So

720
00:30:41,080 --> 00:30:43,840
Speaker 5: achieving that sixty thousand dollars a year in ten years

721
00:30:43,960 --> 00:30:48,120
Speaker 5: or so, I originally planned to use rental properties to

722
00:30:48,160 --> 00:30:50,920
Speaker 5: get there, but I'd also like to get your take

723
00:30:50,960 --> 00:30:55,400
Speaker 5: on other options. Would using reads or dividend yielding ETFs

724
00:30:55,480 --> 00:30:59,520
Speaker 5: be comparable? And for your information for this question, I

725
00:30:59,520 --> 00:31:01,800
Speaker 5: plan to you the property management company when it comes

726
00:31:01,840 --> 00:31:04,520
Speaker 5: to the rental properties to deal with the typical day

727
00:31:04,560 --> 00:31:07,600
Speaker 5: to day activities. But I'd love to get your take

728
00:31:07,680 --> 00:31:12,240
Speaker 5: on what I might need to consider if the income

729
00:31:12,240 --> 00:31:17,200
Speaker 5: that I'll get from dividends and ETFs will be similar

730
00:31:17,240 --> 00:31:20,440
Speaker 5: to that of a rental property. And for your knowledge

731
00:31:20,440 --> 00:31:22,800
Speaker 5: as well, for rental properties, I would be looking at

732
00:31:22,920 --> 00:31:25,760
Speaker 5: properties that provide a six to ten percent cap rate.

733
00:31:26,320 --> 00:31:27,320
Speaker 5: Love to get your thoughts.

734
00:31:27,440 --> 00:31:31,880
Speaker 1: Thanks guys, Oh Matt, Mary she mentioned my work with

735
00:31:31,920 --> 00:31:33,840
Speaker 1: Clark back in the day and worked with was.

736
00:31:34,280 --> 00:31:36,240
Speaker 2: That the clerk that you mentioned earlier too? It was

737
00:31:36,240 --> 00:31:39,480
Speaker 2: as far as you likes to extend his razors yep.

738
00:31:39,760 --> 00:31:42,040
Speaker 2: So I worked with Clark Howard for fourteen plus years

739
00:31:42,040 --> 00:31:43,920
Speaker 2: it was glorious. Still stay in touch with those folks.

740
00:31:44,120 --> 00:31:46,160
Speaker 2: My little sister still works on the crew over there.

741
00:31:46,400 --> 00:31:49,320
Speaker 2: What a great, formidable period of my life. And Mary,

742
00:31:49,400 --> 00:31:51,440
Speaker 2: I love this goal that you've got, by the way,

743
00:31:51,760 --> 00:31:54,560
Speaker 2: attempting to build up another source of income to replace

744
00:31:54,600 --> 00:31:58,840
Speaker 2: your W two income. It's brilliant, right. The emergency fund,

745
00:31:58,960 --> 00:32:01,440
Speaker 2: it's basically short term insurance to help you if you

746
00:32:01,480 --> 00:32:04,120
Speaker 2: were to lose your job. But you're thinking about cultivating

747
00:32:04,280 --> 00:32:08,160
Speaker 2: some long term insurance too, which we think everyone should

748
00:32:08,160 --> 00:32:10,719
Speaker 2: be doing to one extent or another. And often, as

749
00:32:10,720 --> 00:32:13,400
Speaker 2: you alluded to, that takes a while to develop, right.

750
00:32:13,400 --> 00:32:16,280
Speaker 2: It doesn't happen overnight. Whether we're talking about doing it

751
00:32:16,320 --> 00:32:19,240
Speaker 2: through the stock market, or we're talking about building a

752
00:32:19,280 --> 00:32:21,800
Speaker 2: business on the side while you're working full time to

753
00:32:22,240 --> 00:32:25,400
Speaker 2: generate more revenue, or we're talking about owning rental properties.

754
00:32:25,480 --> 00:32:28,080
Speaker 2: It's going to take time to hit that critical mass

755
00:32:28,120 --> 00:32:30,520
Speaker 2: of sixty thousand dollars of income.

756
00:32:30,320 --> 00:32:33,040
Speaker 1: A year that you're shooting for. But you're giving yourself

757
00:32:33,040 --> 00:32:35,320
Speaker 1: I think a long enough runway here. We really think

758
00:32:35,640 --> 00:32:39,200
Speaker 1: that you can meet this goal in a decade. But Matt,

759
00:32:39,240 --> 00:32:41,320
Speaker 1: some people want to turn on that's spiking immediately they're like,

760
00:32:41,320 --> 00:32:43,480
Speaker 1: how can I get this in a year? And it's like, well,

761
00:32:43,760 --> 00:32:45,800
Speaker 1: not going to happen, probably not yeah, but ten years

762
00:32:45,840 --> 00:32:49,080
Speaker 1: maybe that's long enough. Yeah, it depends on a few things.

763
00:32:49,120 --> 00:32:51,880
Speaker 2: Like this makes me think of We recently interviewed Shun

764
00:32:52,280 --> 00:32:54,160
Speaker 2: and she actually had a similar goal.

765
00:32:54,200 --> 00:32:55,200
Speaker 1: We talked to her last week.

766
00:32:55,560 --> 00:32:57,360
Speaker 2: Even though she had a fancy job, she had that

767
00:32:57,440 --> 00:32:59,880
Speaker 2: fancy consultant gig, she still started a side hustle as

768
00:33:00,080 --> 00:33:02,720
Speaker 2: photographer in order to bring in extra money to accelerate

769
00:33:02,760 --> 00:33:05,280
Speaker 2: that goal. And so the first suggestion that we'd make

770
00:33:05,480 --> 00:33:08,200
Speaker 2: is to at least consider starting a side business as

771
00:33:08,200 --> 00:33:09,920
Speaker 2: part of the answer here, Like, you don't have to

772
00:33:09,960 --> 00:33:12,360
Speaker 2: work over ninety hours a week like Seung did, but

773
00:33:12,480 --> 00:33:15,320
Speaker 2: building up a small stream of side revenue is going

774
00:33:15,360 --> 00:33:17,520
Speaker 2: to help you to get closer to that income goal,

775
00:33:18,000 --> 00:33:20,240
Speaker 2: and it can increase your ability to invest at the

776
00:33:20,280 --> 00:33:23,200
Speaker 2: same time, because you're going to have more dollars flowing in.

777
00:33:23,680 --> 00:33:25,920
Speaker 2: So so much of this comes down to how much

778
00:33:26,280 --> 00:33:29,040
Speaker 2: personal time you're willing to give it. And that's my

779
00:33:29,080 --> 00:33:32,080
Speaker 2: biggest concern is that she named a lot of passive

780
00:33:32,320 --> 00:33:35,960
Speaker 2: sort of avenues to have an additional stream of income

781
00:33:36,280 --> 00:33:37,840
Speaker 2: and like, you can do that, but that's going to

782
00:33:37,920 --> 00:33:41,400
Speaker 2: take an incredibly ambitious amount of investing over the next

783
00:33:41,440 --> 00:33:44,080
Speaker 2: ten years. If you're looking to draw down sixty thousand

784
00:33:44,160 --> 00:33:47,640
Speaker 2: dollars annually, I'm assuming that she's expecting to continue that

785
00:33:47,680 --> 00:33:50,400
Speaker 2: stream going for the rest of her life basically. So

786
00:33:50,440 --> 00:33:52,200
Speaker 2: I don't know, let's late, we don't need to dive

787
00:33:52,200 --> 00:33:54,320
Speaker 2: into the details yet, but bottom line like that is

788
00:33:54,360 --> 00:33:56,760
Speaker 2: some seriously aggressive investing that she would have to do

789
00:33:56,800 --> 00:33:57,880
Speaker 2: in order to pull something.

790
00:33:57,680 --> 00:34:01,320
Speaker 1: Like that off. Agreed, So yeah, I think what you're

791
00:34:01,520 --> 00:34:03,280
Speaker 1: hinting at here is Matt is probably going to take

792
00:34:03,960 --> 00:34:06,240
Speaker 1: pulling a bunch of different level levers, one of which

793
00:34:06,480 --> 00:34:10,560
Speaker 1: will be reducing expenses, another which could be increasing your income,

794
00:34:10,600 --> 00:34:12,640
Speaker 1: and aside, hustle might be a big part of that.

795
00:34:12,960 --> 00:34:14,840
Speaker 2: Yeah, and well, the big I think the biggest difference

796
00:34:14,880 --> 00:34:17,160
Speaker 2: here is is like how much sweat equity are you

797
00:34:17,200 --> 00:34:19,279
Speaker 2: willing to put into it? Because if you're thinking like, well, no,

798
00:34:19,360 --> 00:34:22,279
Speaker 2: I just want this to be this automated thing, like

799
00:34:22,320 --> 00:34:24,239
Speaker 2: you said, it definitely can't be pulled off in one year,

800
00:34:24,280 --> 00:34:28,120
Speaker 2: but even ten years is a pretty tall ask. However,

801
00:34:28,320 --> 00:34:30,560
Speaker 2: you can change the equation, you can change the factors

802
00:34:30,560 --> 00:34:33,920
Speaker 2: that go into this cake that you're baking. If you're

803
00:34:33,920 --> 00:34:35,480
Speaker 2: willing to give it a little bit of sweat equity

804
00:34:35,560 --> 00:34:38,920
Speaker 2: like that changes the game. And she specifically was asking

805
00:34:38,920 --> 00:34:40,640
Speaker 2: about real estate. I mean, I think that's one of

806
00:34:40,680 --> 00:34:42,839
Speaker 2: the reasons that makes that so attractive, is that you're

807
00:34:42,840 --> 00:34:46,880
Speaker 2: combining capital but then also your ability to.

808
00:34:46,280 --> 00:34:48,839
Speaker 1: Dive in there and like mess with it. That's exactly right. Yeah,

809
00:34:48,840 --> 00:34:51,160
Speaker 1: I mean, I think I do lean towards real estate

810
00:34:51,239 --> 00:34:53,120
Speaker 1: as the answer for this. I think that that's for

811
00:34:53,160 --> 00:34:55,800
Speaker 1: a couple of different reasons. You know, if done wisely

812
00:34:55,880 --> 00:34:58,279
Speaker 1: with the long term mindset, leverage can be your friend

813
00:34:58,440 --> 00:35:00,239
Speaker 1: on the real estate front. Right, you can buy a

814
00:35:00,239 --> 00:35:02,719
Speaker 1: property that has positive cash flow with a twenty to

815
00:35:02,760 --> 00:35:05,160
Speaker 1: twenty five percent down payment, And on top of that,

816
00:35:05,200 --> 00:35:07,640
Speaker 1: actually you might be able to get incredibly creative by

817
00:35:07,760 --> 00:35:10,520
Speaker 1: house hacking, with a guide to that on our website.

818
00:35:10,680 --> 00:35:13,000
Speaker 1: So if you're looking and willing to think outside the

819
00:35:13,000 --> 00:35:16,280
Speaker 1: box a little bit, I think that can accelerate your

820
00:35:16,320 --> 00:35:19,160
Speaker 1: returns and accelerate your cash flow. And by being a

821
00:35:19,200 --> 00:35:22,440
Speaker 1: more flexible homeowner slash investor, you might be able to

822
00:35:22,520 --> 00:35:25,640
Speaker 1: either decrease your timeline or increase your cash flow goal too.

823
00:35:25,920 --> 00:35:28,440
Speaker 1: It just all depends on kind of what you're highlighting

824
00:35:28,480 --> 00:35:31,439
Speaker 1: here about how uncomfortable you're willing to get, how much

825
00:35:31,480 --> 00:35:33,680
Speaker 1: elbow grease you're willing to put in, how much of

826
00:35:33,719 --> 00:35:36,319
Speaker 1: the suck are you willing to embrace, right, and how

827
00:35:36,400 --> 00:35:39,080
Speaker 1: much dedication are you willing to put into kind of

828
00:35:39,200 --> 00:35:42,279
Speaker 1: amassing a small real estate portfolio. You know, local real

829
00:35:42,400 --> 00:35:45,120
Speaker 1: estate markets they're less efficient than the overall stock market,

830
00:35:45,360 --> 00:35:48,760
Speaker 1: which means smart investors can find deals that are harder

831
00:35:48,800 --> 00:35:51,680
Speaker 1: to find in let's say the publicly traded stock market

832
00:35:51,680 --> 00:35:55,239
Speaker 1: space you mentioned, though, using a property management company that

833
00:35:55,320 --> 00:35:58,000
Speaker 1: would make the numbers harder to pull off. We always

834
00:35:58,040 --> 00:36:03,000
Speaker 1: suggest for Newbee landlords to do self management for a

835
00:36:03,040 --> 00:36:04,880
Speaker 1: couple of years at least, to learn the ropes, to

836
00:36:04,880 --> 00:36:07,840
Speaker 1: know the questions to ask, and you get pretty familiar

837
00:36:07,840 --> 00:36:09,640
Speaker 1: with the whole process by doing that. So, I don't know,

838
00:36:09,920 --> 00:36:11,920
Speaker 1: maybe that's another place where you could use some of

839
00:36:11,960 --> 00:36:16,200
Speaker 1: that elbow grease to manage the property yourself, make sure

840
00:36:16,200 --> 00:36:18,839
Speaker 1: those numbers are better, and then at some point down

841
00:36:18,880 --> 00:36:21,640
Speaker 1: the line you can offload that to a property manager. Totally.

842
00:36:21,760 --> 00:36:23,239
Speaker 2: Yeah, this is why I think this is sort of

843
00:36:23,239 --> 00:36:26,360
Speaker 2: like a secret early retirement question, because there's not a

844
00:36:26,400 --> 00:36:28,600
Speaker 2: whole lot of her saying that, like I'm looking to

845
00:36:28,600 --> 00:36:31,040
Speaker 2: start a whole new side business, a whole new gig.

846
00:36:31,560 --> 00:36:33,839
Speaker 2: And that's when it gets challenging because she did mention

847
00:36:33,960 --> 00:36:37,080
Speaker 2: investing in dividend producing stocks, and I think this is

848
00:36:37,080 --> 00:36:38,840
Speaker 2: at the truly at the heart of her question. I

849
00:36:38,840 --> 00:36:41,439
Speaker 2: don't think that there is any particular magic in going

850
00:36:41,440 --> 00:36:46,600
Speaker 2: that direction right, or opting for reads that are shedding dividends,

851
00:36:46,640 --> 00:36:48,640
Speaker 2: that kind of thing where you are earning money that way.

852
00:36:48,840 --> 00:36:51,560
Speaker 2: Instead of focusing on dividends, just focus on creating a

853
00:36:51,600 --> 00:36:54,840
Speaker 2: diverse portfolio of investments that's going to grow meaningfully over time.

854
00:36:55,280 --> 00:36:57,840
Speaker 2: When you look at the data stocks that pay higher dividends,

855
00:36:57,840 --> 00:37:01,120
Speaker 2: they actually underperform the S and five hundred and So

856
00:37:01,200 --> 00:37:04,759
Speaker 2: maybe instead just invest in vu something as simple as

857
00:37:04,880 --> 00:37:09,040
Speaker 2: Vanguard's S and P five hundred ETF and abiding by

858
00:37:09,120 --> 00:37:10,799
Speaker 2: something like the four percent rule. You could tap those

859
00:37:10,840 --> 00:37:13,680
Speaker 2: funds down the road even if you aren't fully retired.

860
00:37:13,719 --> 00:37:15,600
Speaker 2: I think there's there's sort of like this mental hurdle,

861
00:37:16,000 --> 00:37:18,440
Speaker 2: like people don't want to sell their positions, they don't

862
00:37:18,440 --> 00:37:20,319
Speaker 2: want to sell their securities, but like that's what they're

863
00:37:20,320 --> 00:37:22,399
Speaker 2: there for yeah, folks, a lot there's like the oh,

864
00:37:22,440 --> 00:37:26,359
Speaker 2: how do I get income generating assets? That's what stocks are.

865
00:37:26,960 --> 00:37:29,239
Speaker 2: And so once you get past that mental hurdle of

866
00:37:29,320 --> 00:37:32,000
Speaker 2: knowing that, like, Okay, if I need those funds, I

867
00:37:32,239 --> 00:37:34,520
Speaker 2: then sell some shares, I'd rather grow that's your income.

868
00:37:34,520 --> 00:37:37,040
Speaker 1: I'd rather grow the pot bigger than have a smaller

869
00:37:37,080 --> 00:37:39,719
Speaker 1: pot that throws off dividends. Right, That's kind of what

870
00:37:39,719 --> 00:37:41,280
Speaker 1: you're getting at, And when you look at the numbers,

871
00:37:41,480 --> 00:37:44,840
Speaker 1: growing the bigger pot is typically done through investing directly

872
00:37:44,880 --> 00:37:47,480
Speaker 1: in something like an SMP or total stock market index fund.

873
00:37:47,480 --> 00:37:51,000
Speaker 1: It's better than prioritizing companies who pay higher dividends totally.

874
00:37:51,239 --> 00:37:54,279
Speaker 2: So again kind of speaking to the early retirement part

875
00:37:54,280 --> 00:37:56,719
Speaker 2: of her question, I mean, assuming like it sounds like

876
00:37:56,760 --> 00:37:59,040
Speaker 2: she's got some money, but let's just assume that she's

877
00:37:59,040 --> 00:38:01,360
Speaker 2: starting from zero. If she's looking to be able to

878
00:38:01,440 --> 00:38:05,040
Speaker 2: draw down sixty thousand dollars a year ten years from now,

879
00:38:05,120 --> 00:38:06,960
Speaker 2: so a full decade from now, that means she needs

880
00:38:07,239 --> 00:38:10,839
Speaker 2: at least seven hundred and fifteen thousand dollars on hand.

881
00:38:11,320 --> 00:38:12,920
Speaker 2: And that's something with like a I think I put

882
00:38:12,960 --> 00:38:16,000
Speaker 2: in like a forty year runway before that turns into

883
00:38:16,360 --> 00:38:20,400
Speaker 2: a negative number, which means investing fifty thousand dollars a

884
00:38:20,480 --> 00:38:24,000
Speaker 2: year starting now again, assuming that she has zero dollars

885
00:38:24,080 --> 00:38:24,560
Speaker 2: set aside.

886
00:38:24,600 --> 00:38:25,920
Speaker 1: Let's just say that you woke up.

887
00:38:25,840 --> 00:38:27,520
Speaker 2: And you're like, oh, this is a new goal of mine.

888
00:38:27,640 --> 00:38:29,840
Speaker 2: I've not prepared at all for this. This is what

889
00:38:30,200 --> 00:38:33,279
Speaker 2: it would take. It's something it's like setting aside like

890
00:38:33,360 --> 00:38:36,160
Speaker 2: a little over four thousand dollars every single month, which

891
00:38:36,200 --> 00:38:38,000
Speaker 2: is really that's really.

892
00:38:37,920 --> 00:38:39,600
Speaker 1: Tough to take your throwing cold water on this one.

893
00:38:39,600 --> 00:38:42,319
Speaker 2: Now, I'm just saying I want to be realistic, like

894
00:38:42,400 --> 00:38:44,040
Speaker 2: you have to You're going to need to have at

895
00:38:44,080 --> 00:38:46,479
Speaker 2: least seven hundred and fifty thousand dollars, if not more.

896
00:38:46,680 --> 00:38:47,319
Speaker 1: On like that.

897
00:38:47,440 --> 00:38:48,880
Speaker 2: I was gonna say, that would be that assumes a

898
00:38:48,880 --> 00:38:51,880
Speaker 2: perfect market. That assumes a perfect eight percent. So I figured,

899
00:38:52,000 --> 00:38:53,920
Speaker 2: you know, on average, you're looking at ten percent eight

900
00:38:53,920 --> 00:38:57,160
Speaker 2: percent with inflation, So that assumes a perfect eight percent

901
00:38:57,239 --> 00:38:58,759
Speaker 2: every single year of compounding.

902
00:38:59,080 --> 00:39:02,400
Speaker 1: And then it's too assumes inflation calms down a little bit. Exactly.

903
00:39:02,440 --> 00:39:04,719
Speaker 1: There's a lot of a lot of assumptions here. A

904
00:39:04,760 --> 00:39:06,799
Speaker 1: lot of people would say you need to save, have

905
00:39:06,920 --> 00:39:08,600
Speaker 1: invested at least a million, hire.

906
00:39:08,480 --> 00:39:09,880
Speaker 2: Even more than that in order to be able to

907
00:39:09,920 --> 00:39:11,920
Speaker 2: pull this that a minimum to be able to pull

908
00:39:11,960 --> 00:39:14,319
Speaker 2: this off. You're still looking at a pretty large sum

909
00:39:14,320 --> 00:39:18,080
Speaker 2: of money, which is totally doable. Yeah, but I'm just

910
00:39:18,080 --> 00:39:19,680
Speaker 2: trying to be realistic here when you actually crush the

911
00:39:19,760 --> 00:39:22,320
Speaker 2: numbers to see what does it take to be able.

912
00:39:22,200 --> 00:39:23,960
Speaker 1: To pull this thing off. And again, Mary, this is

913
00:39:24,000 --> 00:39:27,160
Speaker 1: not us crapping on your goal of getting here, Like

914
00:39:27,239 --> 00:39:29,319
Speaker 1: we're all for it and we think it's possible. It

915
00:39:29,440 --> 00:39:32,160
Speaker 1: just might take extra work on your part to pull

916
00:39:32,200 --> 00:39:34,399
Speaker 1: this off and thinking outside the box a little bit more,

917
00:39:34,440 --> 00:39:36,799
Speaker 1: being willing to maybe go two links that other people

918
00:39:36,840 --> 00:39:39,440
Speaker 1: aren't willing to go to in order to get this

919
00:39:39,520 --> 00:39:42,799
Speaker 1: secondary source of income. But we've seen other people do this,

920
00:39:42,920 --> 00:39:45,640
Speaker 1: like we highlight people, we talk to people on the show,

921
00:39:45,640 --> 00:39:47,480
Speaker 1: Matt who have done similar things. You and I have

922
00:39:47,600 --> 00:39:50,240
Speaker 1: done similar things right in order to grow that gap

923
00:39:50,440 --> 00:39:53,480
Speaker 1: in a meaningful way so that we didn't depend nearly

924
00:39:53,480 --> 00:39:54,920
Speaker 1: as much on our w to income. We think it's

925
00:39:54,920 --> 00:39:58,320
Speaker 1: a fantastic goal and we think this is very doable

926
00:39:58,320 --> 00:40:01,040
Speaker 1: for Mary. She just might have to adjust her expectations,

927
00:40:01,120 --> 00:40:04,120
Speaker 1: I think, either on timeline or on the amount effort

928
00:40:04,120 --> 00:40:05,600
Speaker 1: she's gonna have to put into a reaching this goal

929
00:40:05,719 --> 00:40:06,439
Speaker 1: totally and again.

930
00:40:06,520 --> 00:40:08,000
Speaker 2: Based on the fact that she says she used to

931
00:40:08,000 --> 00:40:09,600
Speaker 2: listen to Clark back in the day, based on the

932
00:40:09,600 --> 00:40:11,120
Speaker 2: fact that she's listened to us for a while, she's

933
00:40:11,120 --> 00:40:13,640
Speaker 2: got money on hand, I'm guessing she might have, like

934
00:40:13,680 --> 00:40:15,800
Speaker 2: she's easily got five figures on the second base already,

935
00:40:15,840 --> 00:40:18,319
Speaker 2: if not six figures, and she's just looking for how

936
00:40:18,440 --> 00:40:21,640
Speaker 2: to best deploy that money. And that's when you, Yeah,

937
00:40:21,640 --> 00:40:23,400
Speaker 2: like we said, you look more to some of the

938
00:40:23,440 --> 00:40:25,760
Speaker 2: lifestyle moves that you're willing to make if you're looking

939
00:40:26,239 --> 00:40:28,680
Speaker 2: to not change your lifestyle at all, all right, you're looking. Yeah,

940
00:40:28,719 --> 00:40:30,720
Speaker 2: you're looking to the market. You're looking to invest passively.

941
00:40:30,760 --> 00:40:32,640
Speaker 2: But if you're willing to roll up your sleeves a

942
00:40:32,640 --> 00:40:34,680
Speaker 2: little bit, bust out some of that elbow grease, you

943
00:40:34,680 --> 00:40:36,000
Speaker 2: can achieve that goal a bit.

944
00:40:35,840 --> 00:40:38,520
Speaker 1: Faster, no doubt. Where did the term elbow grease come from?

945
00:40:38,520 --> 00:40:40,120
Speaker 1: By the likes, I don't know. I don't feel like

946
00:40:40,160 --> 00:40:42,799
Speaker 1: my almost terribly griefing, but maybe I'm the anomaly that.

947
00:40:42,920 --> 00:40:44,480
Speaker 2: Is it grease that you get on your elbows from

948
00:40:44,480 --> 00:40:47,400
Speaker 2: getting down to dirty or it almost say were you

949
00:40:47,400 --> 00:40:49,080
Speaker 2: thinking that like you need to apply some grease to

950
00:40:49,120 --> 00:40:49,600
Speaker 2: your elbows.

951
00:40:50,120 --> 00:40:55,279
Speaker 1: Man, that's poor interpretation on my part. All right, We've

952
00:40:55,280 --> 00:40:58,759
Speaker 1: got more to get to, including what about ownership timeline

953
00:40:58,800 --> 00:41:00,719
Speaker 1: of a home. That's certainly impact whether or not it's

954
00:41:00,719 --> 00:41:02,759
Speaker 1: a good decision. We'll talk about that and more right

955
00:41:02,800 --> 00:41:12,840
Speaker 1: after this. All right, buddy, we are back for the break.

956
00:41:13,120 --> 00:41:15,399
Speaker 2: Let's now take the Facebook question of the week, which

957
00:41:15,440 --> 00:41:19,400
Speaker 2: is from Megan. She asks, does anyone have the Costco

958
00:41:19,640 --> 00:41:23,480
Speaker 2: credit card? I'm a new Costco member. Welcome to the fold, Meghan,

959
00:41:23,920 --> 00:41:25,600
Speaker 2: and I would love to hear about your experience with

960
00:41:25,719 --> 00:41:26,520
Speaker 2: their credit card.

961
00:41:26,719 --> 00:41:29,120
Speaker 1: Thank you, Joel. Do you like the Costco credit card?

962
00:41:29,120 --> 00:41:29,640
Speaker 1: Are you a fan?

963
00:41:29,719 --> 00:41:29,919
Speaker 4: Yeah?

964
00:41:29,920 --> 00:41:31,319
Speaker 1: I am. I By the way, are you only a

965
00:41:31,360 --> 00:41:34,160
Speaker 1: fan of the big box for reatailer? I still itself.

966
00:41:34,200 --> 00:41:37,000
Speaker 1: I still remember the day I joined the club, and

967
00:41:37,440 --> 00:41:39,919
Speaker 1: not not really, but you get your picture taken.

968
00:41:40,480 --> 00:41:42,279
Speaker 2: A lot of us really do remember it because it's

969
00:41:42,280 --> 00:41:44,040
Speaker 2: not often that you stand there in front of the

970
00:41:44,080 --> 00:41:46,200
Speaker 2: screen and you know, they tell you to smile at

971
00:41:46,239 --> 00:41:47,480
Speaker 2: the camera, do whatever else.

972
00:41:47,480 --> 00:41:49,480
Speaker 1: It wasn't life changing in the way I thought it

973
00:41:49,480 --> 00:41:52,359
Speaker 1: would be, but I'm so glad it did because being

974
00:41:52,360 --> 00:41:54,520
Speaker 1: a Costco member has given me a lot of benefits.

975
00:41:54,600 --> 00:41:56,160
Speaker 2: I actually do recall as well, because it was only

976
00:41:56,200 --> 00:41:58,000
Speaker 2: a couple of years ago or two years ago.

977
00:41:58,280 --> 00:41:59,960
Speaker 1: Gosh, let me hold, let me pull up, Mike, I was.

978
00:42:00,120 --> 00:42:02,080
Speaker 1: I went Costco credit card right here, busted out. Man.

979
00:42:02,120 --> 00:42:03,319
Speaker 1: You look at it because it tells you how long

980
00:42:03,360 --> 00:42:06,560
Speaker 1: you've been a member since since February twenty fourteen, So

981
00:42:06,560 --> 00:42:09,880
Speaker 1: I've been in a member nineteen over eleven decade. Okay.

982
00:42:10,000 --> 00:42:12,359
Speaker 2: I was not willing to join because it was so

983
00:42:12,480 --> 00:42:14,000
Speaker 2: far from where we used to live. We used to

984
00:42:14,080 --> 00:42:16,359
Speaker 2: live in town and maybe you had to drive out

985
00:42:16,400 --> 00:42:18,640
Speaker 2: to the burbs. And I realized, at least for us

986
00:42:18,680 --> 00:42:20,279
Speaker 2: at that point in time, it was not going to

987
00:42:20,320 --> 00:42:22,400
Speaker 2: be worth it. Spoken like a true leab Yeah, but

988
00:42:22,440 --> 00:42:23,719
Speaker 2: now I don't even know what that means. I hear

989
00:42:23,719 --> 00:42:24,719
Speaker 2: the kids say, no, I love it.

990
00:42:24,840 --> 00:42:28,560
Speaker 1: Yeah, Okay, let's talk about specifically the Costco credit card.

991
00:42:29,160 --> 00:42:31,920
Speaker 1: It is great, like Costco membership is fantastic, but so

992
00:42:32,000 --> 00:42:33,880
Speaker 1: is the Costco credit card. I think if you're a

993
00:42:33,960 --> 00:42:36,160
Speaker 1: Costco member, it's a no brainer. Like, I don't know

994
00:42:36,640 --> 00:42:38,840
Speaker 1: why you would be a Costco member and not have

995
00:42:39,080 --> 00:42:41,920
Speaker 1: the Costco credit card. Sometimes madam at the gas station

996
00:42:42,000 --> 00:42:44,680
Speaker 1: filling up, obviously using my Costco credit card, and I

997
00:42:44,760 --> 00:42:47,280
Speaker 1: see people using a different credit card and I'm like, huh,

998
00:42:47,320 --> 00:42:49,080
Speaker 1: I like scratched my head. I don't understand it. What

999
00:42:49,160 --> 00:42:50,759
Speaker 1: kind of spine you do it on? Other people? Look

1000
00:42:50,760 --> 00:42:55,000
Speaker 1: at that? Whether Yeah, I don't look at anybody. I'm like,

1001
00:42:55,400 --> 00:42:55,839
Speaker 1: head down.

1002
00:42:56,040 --> 00:42:58,680
Speaker 2: Oh, it's not head down, It's just I have like

1003
00:42:58,719 --> 00:43:00,360
Speaker 2: I want to spend as little time I'm in the

1004
00:43:00,400 --> 00:43:01,440
Speaker 2: gas line as possible.

1005
00:43:01,480 --> 00:43:03,600
Speaker 1: I'm quick. But then while it's pumping, what else are

1006
00:43:03,640 --> 00:43:05,920
Speaker 1: you doing? I'm people watching? Oh are you Yeah, I'm

1007
00:43:05,960 --> 00:43:08,520
Speaker 1: cleaning out the car. There's a there's free trash can

1008
00:43:08,600 --> 00:43:10,120
Speaker 1: right there that I don't have to like empty the

1009
00:43:10,160 --> 00:43:12,719
Speaker 1: bag every single time. You don't clean out the car,

1010
00:43:13,640 --> 00:43:15,200
Speaker 1: just stand there and stare at people. Usually my kids

1011
00:43:15,239 --> 00:43:18,160
Speaker 1: are like running around in there, and I'm you know,

1012
00:43:18,239 --> 00:43:20,040
Speaker 1: I'm like just standing there for I like do a

1013
00:43:20,080 --> 00:43:22,759
Speaker 1: little bit stretching maybe, And then I'm like, what credit

1014
00:43:22,760 --> 00:43:23,719
Speaker 1: card do they use? No?

1015
00:43:23,880 --> 00:43:25,640
Speaker 2: Man, I go I opened the door, pull all the

1016
00:43:25,640 --> 00:43:28,120
Speaker 2: trash out of the side compart, you know, like you've

1017
00:43:28,160 --> 00:43:30,320
Speaker 2: got all the different pockets and there's always gum wrappers

1018
00:43:30,360 --> 00:43:32,960
Speaker 2: and oh sure, like coffee cup whatever, just all sorts

1019
00:43:33,000 --> 00:43:35,239
Speaker 2: of trash. That is the at least for us, the

1020
00:43:35,520 --> 00:43:37,480
Speaker 2: clean out the van. Let's get this thing look a

1021
00:43:37,520 --> 00:43:39,840
Speaker 2: half decent time. Okay, yeah, smart, I'll look at other

1022
00:43:39,840 --> 00:43:41,759
Speaker 2: people's credit card. But I love that you do.

1023
00:43:41,920 --> 00:43:44,239
Speaker 1: Yeah. Well, I mean when I look and I see

1024
00:43:44,280 --> 00:43:45,960
Speaker 1: people using something else, it makes no sense to me.

1025
00:43:46,680 --> 00:43:48,919
Speaker 2: You go there and try to explain to them that, hey,

1026
00:43:48,960 --> 00:43:50,120
Speaker 2: why are you doing this?

1027
00:43:50,160 --> 00:43:53,479
Speaker 1: You should get this car because of the specifically because

1028
00:43:53,520 --> 00:43:56,240
Speaker 1: the gas cash back. Right, So, so it's four percent

1029
00:43:56,360 --> 00:44:00,239
Speaker 1: at gas stations, it's five percent now only recently when

1030
00:44:00,280 --> 00:44:02,720
Speaker 1: you're buying gas at Costco. So you get five percent

1031
00:44:02,719 --> 00:44:04,000
Speaker 1: cash back on Costco gas.

1032
00:44:03,840 --> 00:44:06,760
Speaker 2: Which is also the most affordable, highest quality of grass

1033
00:44:06,840 --> 00:44:07,760
Speaker 2: that you can purchase.

1034
00:44:07,880 --> 00:44:10,480
Speaker 1: So it's a no brainer. Yes, if it's nearby and

1035
00:44:10,520 --> 00:44:12,880
Speaker 1: in your in your schedule. So and you have to

1036
00:44:12,920 --> 00:44:14,560
Speaker 1: pay with the visa. By the way, at Costco used

1037
00:44:14,560 --> 00:44:16,959
Speaker 1: to be an AMEX. I just don't think there's any

1038
00:44:17,000 --> 00:44:20,160
Speaker 1: reason to use a different visa card when you're checking out, Like,

1039
00:44:20,239 --> 00:44:22,920
Speaker 1: get the Costco card, especially because there's no annual fee

1040
00:44:22,960 --> 00:44:23,760
Speaker 1: attached totally.

1041
00:44:23,840 --> 00:44:25,880
Speaker 2: Yeah, and on top of that, you get three percent

1042
00:44:25,920 --> 00:44:28,680
Speaker 2: cash back on travel, including if you purchase like one

1043
00:44:28,680 --> 00:44:31,960
Speaker 2: of those Costco travel bundles, which I personally have never done,

1044
00:44:32,120 --> 00:44:33,800
Speaker 2: but one of these days I'm gonna get around to

1045
00:44:33,840 --> 00:44:36,239
Speaker 2: doing it, Joel. But you can't use one of the

1046
00:44:36,280 --> 00:44:38,359
Speaker 2: cards where you're earning five percent, like the custom Cash

1047
00:44:38,480 --> 00:44:40,080
Speaker 2: card is what I'm specifically thinking of.

1048
00:44:40,320 --> 00:44:43,520
Speaker 1: You have to use a visa card. The Warehouse clubs

1049
00:44:43,520 --> 00:44:45,200
Speaker 1: also don't qualify as.

1050
00:44:45,160 --> 00:44:46,600
Speaker 2: A grocery store, so you can It's not like you

1051
00:44:46,640 --> 00:44:48,919
Speaker 2: can get a Blue Cash preferred six percent back because

1052
00:44:48,920 --> 00:44:50,640
Speaker 2: it's not a grocery store. On top of that, you

1053
00:44:50,640 --> 00:44:52,799
Speaker 2: can't use the AMX and so like, and you can't

1054
00:44:52,840 --> 00:44:53,840
Speaker 2: use the City Double.

1055
00:44:53,600 --> 00:44:56,799
Speaker 1: Cash either, like you got to get the Costco card,

1056
00:44:56,840 --> 00:44:59,680
Speaker 1: like one two percent cash back on all Costco purchases

1057
00:44:59,760 --> 00:45:03,439
Speaker 1: with the Costco credit card. So yeah, again, why would

1058
00:45:03,480 --> 00:45:05,920
Speaker 1: you use anything else? I could see if there was

1059
00:45:05,920 --> 00:45:07,480
Speaker 1: an annual fe attached, like you might have to run

1060
00:45:07,560 --> 00:45:09,920
Speaker 1: the numbers, do some math. But there's no harm, no

1061
00:45:09,960 --> 00:45:12,839
Speaker 1: foul on having an additional credit card. Even if let's

1062
00:45:12,880 --> 00:45:15,880
Speaker 1: say you only use this credit card for Costco purchases

1063
00:45:15,920 --> 00:45:19,879
Speaker 1: and for gas, then I would say this card, having

1064
00:45:19,880 --> 00:45:21,600
Speaker 1: this card in your arsenal makes sense. It makes sense,

1065
00:45:21,640 --> 00:45:21,920
Speaker 1: all right.

1066
00:45:21,960 --> 00:45:24,280
Speaker 2: Another quick question from this is actually a different Megan

1067
00:45:24,400 --> 00:45:26,520
Speaker 2: on the Facebook group, but she wrote, anyone know of

1068
00:45:26,560 --> 00:45:30,560
Speaker 2: a spreadsheet that analyzes a home purchase from an investment perspective?

1069
00:45:31,040 --> 00:45:32,560
Speaker 2: We know that we're only going to be there for

1070
00:45:32,600 --> 00:45:35,120
Speaker 2: five years, so we want to be more strategic about

1071
00:45:35,120 --> 00:45:35,759
Speaker 2: what we buy.

1072
00:45:36,360 --> 00:45:39,200
Speaker 1: Joel, what do you think I'm gonna say, don't buy

1073
00:45:39,239 --> 00:45:41,960
Speaker 1: the home? Probably that's a TLDR. That's the quick answer.

1074
00:45:42,000 --> 00:45:43,600
Speaker 1: But you know, Matt, you and I we always talk

1075
00:45:43,640 --> 00:45:47,080
Speaker 1: about the importance of timeline when it comes to home ownership, yep.

1076
00:45:47,160 --> 00:45:49,160
Speaker 1: And whether or not it makes sense, or it's going

1077
00:45:49,200 --> 00:45:50,600
Speaker 1: to pay off, or it's going to be a better

1078
00:45:50,719 --> 00:45:54,000
Speaker 1: financial move for you. The expense of buying and selling

1079
00:45:54,040 --> 00:45:58,719
Speaker 1: can be significant. So there are significant costs associated with

1080
00:45:59,040 --> 00:46:02,040
Speaker 1: both of those endeavors, and so if you're bumping them

1081
00:46:02,040 --> 00:46:06,000
Speaker 1: close together within a five year timeframe, the cost could

1082
00:46:06,000 --> 00:46:08,239
Speaker 1: be prohibitive. Right. So, if you own a home, let's say,

1083
00:46:08,280 --> 00:46:09,680
Speaker 1: for a couple of years, even if you see some

1084
00:46:09,719 --> 00:46:13,120
Speaker 1: equity growth, the seller in this case often has to

1085
00:46:13,120 --> 00:46:15,640
Speaker 1: come to the closing table with cash to cover closing

1086
00:46:15,640 --> 00:46:18,799
Speaker 1: fees and agents costs and stuff like that. I think

1087
00:46:18,880 --> 00:46:21,120
Speaker 1: big ups by the way to Megan for asking this

1088
00:46:21,200 --> 00:46:23,400
Speaker 1: question before she buys the house. I've heard way too

1089
00:46:23,440 --> 00:46:26,160
Speaker 1: many folks, Matt who buy the house. They've heard home

1090
00:46:26,200 --> 00:46:28,919
Speaker 1: ownership is smart, they haven't thought through the details, and

1091
00:46:28,960 --> 00:46:31,480
Speaker 1: it ends up costing them because let's say they live

1092
00:46:31,480 --> 00:46:33,400
Speaker 1: in the home for three years or something like that. Well,

1093
00:46:33,400 --> 00:46:36,279
Speaker 1: their own home ownership timeline wasn't long enough and they

1094
00:46:36,360 --> 00:46:38,480
Speaker 1: ended up losing in the process. They would have been

1095
00:46:38,520 --> 00:46:39,560
Speaker 1: better off renting totally.

1096
00:46:39,640 --> 00:46:42,000
Speaker 2: Yeah, And Megan also said she's looking at this from

1097
00:46:42,040 --> 00:46:44,719
Speaker 2: an investment perspective, but I don't think that she wants

1098
00:46:44,760 --> 00:46:47,520
Speaker 2: to own this as a rental property. I think what

1099
00:46:47,560 --> 00:46:50,080
Speaker 2: she's asking about is whether the financial benefit will be

1100
00:46:50,160 --> 00:46:54,200
Speaker 2: superior when you are considering owning a home versus renting

1101
00:46:54,200 --> 00:46:57,000
Speaker 2: a home, given those transaction costs that you just mentioned

1102
00:46:57,040 --> 00:47:00,320
Speaker 2: their Joel, and when you look at what home prices

1103
00:47:00,360 --> 00:47:02,880
Speaker 2: have done over the past fifteen years or so, that

1104
00:47:03,280 --> 00:47:06,400
Speaker 2: you know, the typical reaction for most folks, especially realtors,

1105
00:47:06,440 --> 00:47:08,600
Speaker 2: folks in the real estate space, they're going to tell

1106
00:47:08,640 --> 00:47:11,640
Speaker 2: you to buy every single time instead of rent. They

1107
00:47:11,640 --> 00:47:14,400
Speaker 2: would say that you'd be you'd be an idiot to

1108
00:47:14,520 --> 00:47:16,880
Speaker 2: not purchase a home, you're going to come out ahead.

1109
00:47:17,280 --> 00:47:19,279
Speaker 2: And in one sense, they have a vested interest in

1110
00:47:19,360 --> 00:47:21,799
Speaker 2: telling you that, Matt, of course you've got that. But like, like, yeah,

1111
00:47:21,840 --> 00:47:24,399
Speaker 2: like if you look at history, yeah, your homeowners they

1112
00:47:24,400 --> 00:47:26,239
Speaker 2: have made out like bandits in recent years. But you

1113
00:47:26,320 --> 00:47:30,279
Speaker 2: also can't count on these recent trends continuing far off

1114
00:47:30,280 --> 00:47:33,439
Speaker 2: into the future, or even for the next five years specifically.

1115
00:47:33,000 --> 00:47:36,000
Speaker 1: Right, I mean, the truth is it's highly unlikely that

1116
00:47:36,040 --> 00:47:39,880
Speaker 1: the housing market is going to experience similar, ongoing significant

1117
00:47:39,880 --> 00:47:43,000
Speaker 1: price increases over the coming fifteen years. I would be

1118
00:47:43,320 --> 00:47:46,239
Speaker 1: shocked if the coming fifteen years looked a lot like

1119
00:47:46,360 --> 00:47:49,400
Speaker 1: the last fifteen years in terms of home price acceleration.

1120
00:47:49,840 --> 00:47:53,879
Speaker 1: That's because price increases can't out pace inflation. They can't

1121
00:47:53,920 --> 00:47:57,480
Speaker 1: outpace wages forever. Right, we're already seeing prices stalling and

1122
00:47:57,520 --> 00:48:01,320
Speaker 1: predictions of price declines in the near term from some outlets.

1123
00:48:01,960 --> 00:48:03,279
Speaker 1: The truth is, if you look back you bought in

1124
00:48:03,320 --> 00:48:05,759
Speaker 1: twenty thirteen you sold in twenty eighteen, or if you'd

1125
00:48:05,800 --> 00:48:07,719
Speaker 1: bought in twenty eighteen and sold in twenty twenty three,

1126
00:48:07,840 --> 00:48:09,799
Speaker 1: those are both five year timelines, you would have done

1127
00:48:09,840 --> 00:48:12,280
Speaker 1: quite well for yourself. But those might be the exception,

1128
00:48:12,400 --> 00:48:13,920
Speaker 1: not the rule. And so if you look just a

1129
00:48:13,960 --> 00:48:17,200
Speaker 1: recent history instead of a longer stretch of history, you

1130
00:48:17,280 --> 00:48:19,640
Speaker 1: might be doing yourself a disservice assuming that something's going

1131
00:48:19,680 --> 00:48:22,200
Speaker 1: to be true that likely isn't going to be when

1132
00:48:22,200 --> 00:48:25,080
Speaker 1: you zoom out. The five year ownership timeline, it's really

1133
00:48:25,120 --> 00:48:28,920
Speaker 1: the minimum to avoid potentially losing real money in that transaction,

1134
00:48:29,280 --> 00:48:32,160
Speaker 1: at least when we're talking about a longer perspective. And

1135
00:48:32,760 --> 00:48:35,440
Speaker 1: I'm just I'm worried, Matt, about someone sticking to a

1136
00:48:35,440 --> 00:48:37,479
Speaker 1: five year ownership time but we always say five to seven,

1137
00:48:37,760 --> 00:48:41,200
Speaker 1: and typically we prefer seven. Five years just might not

1138
00:48:41,239 --> 00:48:41,680
Speaker 1: be long enough.

1139
00:48:41,760 --> 00:48:44,840
Speaker 2: Yeah, well, especially given the massive disparity between rent prices

1140
00:48:44,920 --> 00:48:47,560
Speaker 2: right now and then the typical mortgage payment these days

1141
00:48:47,600 --> 00:48:50,279
Speaker 2: in most cities, and specifically because she said that she

1142
00:48:50,440 --> 00:48:52,600
Speaker 2: knows she's only going to be there for five years,

1143
00:48:52,600 --> 00:48:55,160
Speaker 2: like maybe they're moving to a college town and they're

1144
00:48:55,160 --> 00:48:57,719
Speaker 2: there for like a graduate degree or something. I don't know,

1145
00:48:58,120 --> 00:49:00,719
Speaker 2: especially given that I would suggest renting. It's what I

1146
00:49:00,719 --> 00:49:03,520
Speaker 2: would do if I were in your shoes given a

1147
00:49:03,600 --> 00:49:06,520
Speaker 2: similar timeline. And we don't have a so because of that,

1148
00:49:06,560 --> 00:49:08,880
Speaker 2: we don't have a spreadsheet recommendation when it comes to

1149
00:49:08,880 --> 00:49:10,799
Speaker 2: something like this, But do check out the New York

1150
00:49:10,800 --> 00:49:14,520
Speaker 2: Times rent versus by calculator, which is totally great.

1151
00:49:14,760 --> 00:49:16,240
Speaker 1: And the only other way.

1152
00:49:16,080 --> 00:49:18,000
Speaker 2: That this that I would change from mind, were I

1153
00:49:18,120 --> 00:49:21,759
Speaker 2: in your situation, is if the what it is that

1154
00:49:21,800 --> 00:49:24,400
Speaker 2: the NRA is like if the industry gets a massive

1155
00:49:24,400 --> 00:49:27,960
Speaker 2: shake up, basically when it comes to commissions fees paid.

1156
00:49:27,680 --> 00:49:29,640
Speaker 1: Towards realtors because we haven't seen that. But we haven't

1157
00:49:29,640 --> 00:49:32,080
Speaker 1: seen that like there's been talking about, are not the NRA.

1158
00:49:32,760 --> 00:49:36,640
Speaker 2: I always say that very different organization, National Association of Realtors.

1159
00:49:36,960 --> 00:49:38,760
Speaker 1: They've had a stranglehold.

1160
00:49:38,200 --> 00:49:41,919
Speaker 2: Where you're paying six percent and if that completely gets

1161
00:49:41,960 --> 00:49:44,200
Speaker 2: up ended, well, my answer is also going to change,

1162
00:49:44,320 --> 00:49:47,120
Speaker 2: because all of a sudden, the vast majority of the

1163
00:49:47,160 --> 00:49:50,919
Speaker 2: transaction costs gets eliminated. Housing prices for the most part,

1164
00:49:50,960 --> 00:49:54,480
Speaker 2: are fairly stable over time. We see them typically go

1165
00:49:54,640 --> 00:49:56,920
Speaker 2: up into the right cross your fingers. We don't see

1166
00:49:56,960 --> 00:50:00,400
Speaker 2: another massive decline like we saw in No set A

1167
00:50:00,560 --> 00:50:03,040
Speaker 2: with a great recession, but that's like a once in

1168
00:50:03,080 --> 00:50:06,440
Speaker 2: a lifetime thing in my opinion, you eliminate these massive

1169
00:50:06,480 --> 00:50:09,279
Speaker 2: transaction costs. I think we do see people purchasing at home,

1170
00:50:09,520 --> 00:50:12,040
Speaker 2: living there for two or three years. Maybe they see

1171
00:50:12,040 --> 00:50:13,960
Speaker 2: a little bit appreciation, maybe they don't. But it's not

1172
00:50:14,000 --> 00:50:15,879
Speaker 2: even that big of a deal because the transaction costs,

1173
00:50:16,120 --> 00:50:18,319
Speaker 2: the known expense that comes with selling a home is

1174
00:50:18,320 --> 00:50:18,919
Speaker 2: no longer there.

1175
00:50:19,040 --> 00:50:21,680
Speaker 1: It would make the whole real estate market more liquid,

1176
00:50:21,840 --> 00:50:25,040
Speaker 1: people would be willing to buy and sell a whole

1177
00:50:25,040 --> 00:50:28,520
Speaker 1: lot more easily. But because the transaction costs are so prohibitive,

1178
00:50:28,560 --> 00:50:31,200
Speaker 1: we have to basically prescribe an ownership timeline of a

1179
00:50:31,280 --> 00:50:34,800
Speaker 1: minimum of five better to be seven, ten is ideal

1180
00:50:35,080 --> 00:50:37,120
Speaker 1: or I don't know the long mister conservative, paying some

1181
00:50:37,200 --> 00:50:38,879
Speaker 1: maybe then you move, you move elsewhere, and you hold

1182
00:50:38,920 --> 00:50:40,239
Speaker 1: on to that home and you rent it out. That's

1183
00:50:40,239 --> 00:50:43,440
Speaker 1: like the ideal ideal. But yeah, I think given a

1184
00:50:43,480 --> 00:50:46,120
Speaker 1: five year timeline and what's happening in the market right now,

1185
00:50:46,160 --> 00:50:49,280
Speaker 1: and how much you could save every month by renting

1186
00:50:49,320 --> 00:50:52,560
Speaker 1: instead of paying that mortgage, renting makes sense for the

1187
00:50:52,600 --> 00:50:55,120
Speaker 1: vast majority of people on a short time scale, totally.

1188
00:50:55,160 --> 00:50:56,600
Speaker 2: Man, Let's get back to the beer that you and

1189
00:50:56,600 --> 00:51:00,279
Speaker 2: I enjoyed, which was a KBS by Founders Thing.

1190
00:51:00,320 --> 00:51:02,520
Speaker 1: Man, this is a beer we've had many a time. Yeah,

1191
00:51:02,560 --> 00:51:04,200
Speaker 1: but it's been a while it's been a long while

1192
00:51:04,239 --> 00:51:06,759
Speaker 1: for me and this is which we had some more. Yeah,

1193
00:51:06,800 --> 00:51:09,000
Speaker 1: this is a classic, I will say though, A good

1194
00:51:09,040 --> 00:51:11,440
Speaker 1: a really good barrel age stout, but it can't compete

1195
00:51:11,520 --> 00:51:14,600
Speaker 1: with some of the modern incarnations at a lot of

1196
00:51:14,640 --> 00:51:17,080
Speaker 1: smaller craft breweries now of a barrel aged out. I

1197
00:51:17,120 --> 00:51:19,239
Speaker 1: just don't think it has as much going on as

1198
00:51:19,280 --> 00:51:21,880
Speaker 1: some of the some of my favorite local players maybe

1199
00:51:22,080 --> 00:51:23,000
Speaker 1: are able to bring, but don't.

1200
00:51:23,160 --> 00:51:25,120
Speaker 2: Don't you think sometimes there's too much going on? Like

1201
00:51:25,120 --> 00:51:27,839
Speaker 2: what I love about this it's like a classic tuxedo man.

1202
00:51:27,960 --> 00:51:31,400
Speaker 2: Like it's so freaking sharp, not like like in a

1203
00:51:31,480 --> 00:51:33,239
Speaker 2: taste like how it tastes kind of a way, but

1204
00:51:33,239 --> 00:51:36,160
Speaker 2: like it's it's classic, Like you got those classic cocoa

1205
00:51:36,239 --> 00:51:39,040
Speaker 2: nib chocolatey notes, you've got those coffee notes.

1206
00:51:40,120 --> 00:51:42,200
Speaker 1: It could use a little more barrel, in my opinion,

1207
00:51:42,280 --> 00:51:43,040
Speaker 1: a little more wood.

1208
00:51:43,239 --> 00:51:46,520
Speaker 2: It's like Will Ferrell more cowbo or wood and I

1209
00:51:46,560 --> 00:51:47,760
Speaker 2: would be I'd be happier.

1210
00:51:47,920 --> 00:51:49,839
Speaker 1: Yeah, still so good. That's the thing. I'm like, it's

1211
00:51:49,880 --> 00:51:53,000
Speaker 1: it's really really good. It's like a solid B. But

1212
00:51:53,520 --> 00:51:55,560
Speaker 1: it's not like an A. It's not an A. It's

1213
00:51:55,640 --> 00:51:58,239
Speaker 1: just not it's those a lot of fighting words. I

1214
00:51:58,280 --> 00:52:00,400
Speaker 1: think for most das, I guess at some point it's

1215
00:52:00,480 --> 00:52:01,799
Speaker 1: kind of like you go back to some of those

1216
00:52:02,239 --> 00:52:05,840
Speaker 1: early beers that were highly touted. I'm thinking of like

1217
00:52:05,960 --> 00:52:08,200
Speaker 1: Pliny the Elder or whatever, like that's a great IPA

1218
00:52:08,440 --> 00:52:11,399
Speaker 1: from out on the West Coast, but it doesn't compare

1219
00:52:11,440 --> 00:52:13,279
Speaker 1: to us some of the IPAs coming out of let's

1220
00:52:13,280 --> 00:52:16,360
Speaker 1: say Bissell Brothers or different style. Yeah, they are, but

1221
00:52:16,440 --> 00:52:18,760
Speaker 1: different style. I'll take Missile Brothers every day. I would.

1222
00:52:18,840 --> 00:52:20,719
Speaker 2: Still this is a barrel aige style. I still give

1223
00:52:20,719 --> 00:52:23,120
Speaker 2: it a solid A. Is it my absolute favorite? No,

1224
00:52:23,239 --> 00:52:25,560
Speaker 2: There's some super interesting ones that that I've had out there,

1225
00:52:25,600 --> 00:52:27,360
Speaker 2: but in my opinion, this one still holds up. And

1226
00:52:27,400 --> 00:52:31,200
Speaker 2: the cool thing is this is readilarly available on shelvesease days.

1227
00:52:31,320 --> 00:52:34,319
Speaker 2: It never was in the past. I literally just went

1228
00:52:34,320 --> 00:52:36,880
Speaker 2: in grabbed a single and I was like, Oh, that's amazing.

1229
00:52:36,880 --> 00:52:39,279
Speaker 2: I thought of that when buying that. I was like,

1230
00:52:39,320 --> 00:52:42,000
Speaker 2: that's it's amazing how we live in now. Yeah, it

1231
00:52:42,080 --> 00:52:43,400
Speaker 2: really is an abundance.

1232
00:52:43,040 --> 00:52:45,239
Speaker 1: Of riches for sure. So Matt, that's going to do

1233
00:52:45,280 --> 00:52:47,839
Speaker 1: it for this episode. We'll put links in the show

1234
00:52:47,840 --> 00:52:50,280
Speaker 1: notes to some of the resources we mentioned on today's episode.

1235
00:52:50,360 --> 00:52:52,600
Speaker 1: If you have a money question for us, please do

1236
00:52:53,040 --> 00:52:55,120
Speaker 1: send it our way, recorded in the Voicema moment app

1237
00:52:55,160 --> 00:52:57,680
Speaker 1: of your phone. Email it over to us at Howdomoneypod

1238
00:52:57,719 --> 00:52:59,960
Speaker 1: at gmail dot com. Matt, that's going to do it.

1239
00:53:00,040 --> 00:53:02,839
Speaker 1: Until next time. Best Friends Out, Best Friends Out,