1 00:00:00,400 --> 00:00:03,520 Speaker 1: Welcome to How the Money. I'm Joel and I am Matt's. 2 00:00:03,680 --> 00:00:25,600 Speaker 1: Today we are answering your listener questions. That's right, man. 3 00:00:25,640 --> 00:00:27,640 Speaker 1: I think our listeners know that if it's Monday, they're 4 00:00:27,640 --> 00:00:30,440 Speaker 1: either gonna hear hear us talk to an interesting guest, 5 00:00:30,600 --> 00:00:32,239 Speaker 1: or they know that there's a chance that they might 6 00:00:32,280 --> 00:00:35,360 Speaker 1: have a listener question that's answered. We've got five listener 7 00:00:35,440 --> 00:00:37,800 Speaker 1: questions that listeners have submitted that we're gonna get to 8 00:00:37,960 --> 00:00:41,040 Speaker 1: during this episode, including where to stash some money if 9 00:00:41,080 --> 00:00:43,239 Speaker 1: you're looking to buy a house in the in the 10 00:00:43,280 --> 00:00:45,800 Speaker 1: coming years. I'm sure this is a question that that 11 00:00:45,880 --> 00:00:47,959 Speaker 1: nobody out there has, right like nobody wants to buy 12 00:00:47,960 --> 00:00:51,080 Speaker 1: a house these days, that's a joke. Everybody wants to 13 00:00:51,080 --> 00:00:53,400 Speaker 1: buy a house. And I will say foreshadowing there is 14 00:00:53,440 --> 00:00:55,200 Speaker 1: a place that you can stash it beyond just the 15 00:00:55,240 --> 00:00:56,959 Speaker 1: savings account. That's we'll get to that in a mint 16 00:00:57,040 --> 00:00:59,520 Speaker 1: exactly with low risk as well. We're gonna take a 17 00:00:59,600 --> 00:01:03,240 Speaker 1: question about just teaching little kids about money, some steps 18 00:01:03,240 --> 00:01:06,760 Speaker 1: to take there, and some tax considerations for summer jobs. 19 00:01:06,800 --> 00:01:09,240 Speaker 1: We've got those questions plus two other ones that we're 20 00:01:09,240 --> 00:01:12,280 Speaker 1: gonna get to during this episode. But first you wanted 21 00:01:12,319 --> 00:01:15,120 Speaker 1: to talk about. I see a note here about h VAC. 22 00:01:15,640 --> 00:01:17,720 Speaker 1: What's that all about? All right, so the HVAC didn't 23 00:01:17,760 --> 00:01:19,480 Speaker 1: go out in it. No, it's fortunately. Oh my gosh, 24 00:01:19,480 --> 00:01:21,440 Speaker 1: that's a very expensive thing. I'm glad. I mean it's 25 00:01:21,440 --> 00:01:23,120 Speaker 1: more expensive too in the middle of the summer, right, Like, 26 00:01:23,160 --> 00:01:25,000 Speaker 1: we don't wish that on me, Ricky, Bobby, I'm not. 27 00:01:25,040 --> 00:01:27,679 Speaker 1: I'm not wishing it. I'm glad that that's not the 28 00:01:27,720 --> 00:01:29,600 Speaker 1: position that you're in. Yeah. So, I was just thinking 29 00:01:29,640 --> 00:01:30,880 Speaker 1: the other day as I went over to one of 30 00:01:30,920 --> 00:01:34,920 Speaker 1: my rental properties that like literally five years ago, I 31 00:01:35,319 --> 00:01:37,560 Speaker 1: met with an h chack guy. He came out to 32 00:01:37,640 --> 00:01:40,760 Speaker 1: kind of assess the unit literally literally all right, robber, 33 00:01:41,880 --> 00:01:44,600 Speaker 1: and so yeah, we were He was like, man, I 34 00:01:44,600 --> 00:01:46,320 Speaker 1: don't know that this thing's this thing is getting a 35 00:01:46,319 --> 00:01:49,320 Speaker 1: little long in the tooth. You wanna consider replacing it. 36 00:01:49,640 --> 00:01:52,320 Speaker 1: And you know, he's right. It's a really old unit. 37 00:01:52,360 --> 00:01:55,360 Speaker 1: It's eighteen years old or sixteen years old at the time. Yeah, 38 00:01:55,360 --> 00:01:57,600 Speaker 1: so so it's old. It's like antique. It's been five 39 00:01:57,680 --> 00:01:59,600 Speaker 1: years since then. I did not take his advice and 40 00:02:00,120 --> 00:02:03,840 Speaker 1: not replace the unit. And it's dude, it's still going strong. 41 00:02:03,840 --> 00:02:06,400 Speaker 1: And by going strong, I mean, you know, it's puttering along, 42 00:02:07,440 --> 00:02:09,880 Speaker 1: it's doing his job. The air is cooler coming out 43 00:02:09,880 --> 00:02:11,519 Speaker 1: of the events than it is going into it. That's 44 00:02:11,520 --> 00:02:13,239 Speaker 1: all that matters. And I just kind of like randomly 45 00:02:13,240 --> 00:02:15,120 Speaker 1: thought about that the other day, and I just wanted 46 00:02:15,160 --> 00:02:18,040 Speaker 1: to to let people know, you know, sometimes um, it's 47 00:02:18,120 --> 00:02:21,040 Speaker 1: it's not necessarily that he had ill intention or that 48 00:02:21,120 --> 00:02:24,160 Speaker 1: he wanted me to spend money that you know, I 49 00:02:24,200 --> 00:02:26,520 Speaker 1: didn't want to spend um, But I do think it's 50 00:02:26,560 --> 00:02:30,280 Speaker 1: important when you get advice from a professional to get 51 00:02:30,280 --> 00:02:33,320 Speaker 1: a second opinion, call in you know, another HVAC company 52 00:02:33,320 --> 00:02:35,960 Speaker 1: and say like how bad off is this unit? Like 53 00:02:36,000 --> 00:02:38,320 Speaker 1: do do I need to actually replace it? And then 54 00:02:38,320 --> 00:02:42,079 Speaker 1: also too, it's almost like changing changing the oil in 55 00:02:42,160 --> 00:02:44,639 Speaker 1: your car, right how that How that's the number one 56 00:02:44,680 --> 00:02:47,240 Speaker 1: thing if you have a gasoline car, um to prolong 57 00:02:47,360 --> 00:02:49,720 Speaker 1: the life of that car. It's it's changing the filter 58 00:02:49,840 --> 00:02:52,639 Speaker 1: on your h FAC. If you do that every three months, 59 00:02:52,680 --> 00:02:55,400 Speaker 1: like that thing's gonna run for a long time. And 60 00:02:55,480 --> 00:02:57,639 Speaker 1: so yeah, I just wanted to let people out there know, 61 00:02:57,800 --> 00:02:59,760 Speaker 1: like if a service professional tells you that you need 62 00:02:59,800 --> 00:03:02,239 Speaker 1: to play something really soon, like that guy made me 63 00:03:02,240 --> 00:03:04,120 Speaker 1: think it was gonna go out that summer, and uh 64 00:03:04,280 --> 00:03:06,640 Speaker 1: and I'm you know here, I am chugging, chugging along. 65 00:03:06,680 --> 00:03:09,120 Speaker 1: Five years later, five years down the road, I'm just 66 00:03:09,160 --> 00:03:12,120 Speaker 1: glad that I didn't actually listen to them and and 67 00:03:12,200 --> 00:03:14,440 Speaker 1: go down that road. Um. And there's just so many 68 00:03:14,480 --> 00:03:16,440 Speaker 1: little ways go change your filter, man, and make sure 69 00:03:16,480 --> 00:03:19,600 Speaker 1: that that unit lasts longer than you know, anybody else 70 00:03:19,639 --> 00:03:21,440 Speaker 1: thinks it's going to. Yeah, you don't need that extra 71 00:03:21,520 --> 00:03:23,880 Speaker 1: strain on your blower motor as just running, they're kind 72 00:03:23,880 --> 00:03:26,160 Speaker 1: of trying to suck through. Oh oh, actually do this 73 00:03:26,160 --> 00:03:27,720 Speaker 1: actually made me think of one time when I was 74 00:03:27,760 --> 00:03:29,600 Speaker 1: changing the filter. There's a twenty dollar bill down there 75 00:03:29,760 --> 00:03:32,800 Speaker 1: there you go, were telling that. Oh yeah, that was 76 00:03:32,840 --> 00:03:35,400 Speaker 1: like one of the how did I get there normally? Well, 77 00:03:35,440 --> 00:03:37,960 Speaker 1: just you know through the air intake vent like with 78 00:03:38,000 --> 00:03:40,120 Speaker 1: our old houses, Like I feel like newer homes the 79 00:03:40,160 --> 00:03:42,080 Speaker 1: air intake it's like on a you know, on a 80 00:03:42,120 --> 00:03:44,680 Speaker 1: small wall kind of and it's vertical, but like on 81 00:03:44,720 --> 00:03:47,000 Speaker 1: our old homes, Man, with the air intakes on the ground, 82 00:03:47,040 --> 00:03:49,400 Speaker 1: I find all sorts of stuff down there. It's like 83 00:03:49,400 --> 00:03:53,360 Speaker 1: the size of husky, Like it's a huge animal. Like 84 00:03:53,960 --> 00:03:56,120 Speaker 1: we have two in the floor. Yeah, yeah, they're massive, 85 00:03:56,600 --> 00:03:59,320 Speaker 1: But yeah, I agree, like that alone is definitely a 86 00:03:59,320 --> 00:04:02,560 Speaker 1: great way to pro long uh, the life of your 87 00:04:02,680 --> 00:04:04,480 Speaker 1: H fact. And see, you know, like you said, it's 88 00:04:04,480 --> 00:04:07,120 Speaker 1: important to think through like if someone's giving you advice 89 00:04:07,560 --> 00:04:10,080 Speaker 1: and they stand to gain from it, it's worth considering 90 00:04:10,160 --> 00:04:11,920 Speaker 1: their motives a little bit. Not again, like you said, 91 00:04:11,920 --> 00:04:14,040 Speaker 1: not that this guy was trying to steer you wrong, 92 00:04:14,080 --> 00:04:16,760 Speaker 1: because chances are he'd seen a lot of H facts 93 00:04:16,800 --> 00:04:19,200 Speaker 1: that we're eighteen years old. Uh that haad crapped out 94 00:04:19,200 --> 00:04:22,120 Speaker 1: that summer. Right, Um, there wasn't necessarily bad advice, but 95 00:04:22,160 --> 00:04:24,080 Speaker 1: I think it was wise of you to say, all right, 96 00:04:24,120 --> 00:04:26,840 Speaker 1: let's let's see how long this can go. And also too, 97 00:04:26,880 --> 00:04:28,800 Speaker 1: that's a good signal to be like, all right, it's 98 00:04:28,800 --> 00:04:31,400 Speaker 1: time to start maybe saving up some money to replace 99 00:04:31,440 --> 00:04:34,080 Speaker 1: that H fact because like what's really tough is getting 100 00:04:34,120 --> 00:04:36,120 Speaker 1: stuck with a bill like that that you may not 101 00:04:36,160 --> 00:04:37,919 Speaker 1: have been saving up for. And so I don't know, 102 00:04:37,960 --> 00:04:40,039 Speaker 1: it makes me think of like the filter reset on 103 00:04:40,040 --> 00:04:41,919 Speaker 1: our fridge, because we've kind of you know, got the 104 00:04:41,960 --> 00:04:44,440 Speaker 1: filter built into the refrigerator and our fridge lets us 105 00:04:44,480 --> 00:04:46,280 Speaker 1: know when we're supposed to change it, and I'm sure 106 00:04:46,279 --> 00:04:48,640 Speaker 1: it's just set to like beat, you know, like like 107 00:04:48,720 --> 00:04:50,920 Speaker 1: once a year or that kind of thing. But it's 108 00:04:50,920 --> 00:04:52,800 Speaker 1: been beating now for a couple of months. I do 109 00:04:52,880 --> 00:04:54,560 Speaker 1: think it is time now for me to order a 110 00:04:54,600 --> 00:04:58,359 Speaker 1: new water filter prolonged the length of our of our fridge, 111 00:04:58,720 --> 00:05:00,960 Speaker 1: making sure that we're getting that nice clean water in 112 00:05:01,000 --> 00:05:02,440 Speaker 1: the same way you want to keep getting that nice 113 00:05:02,440 --> 00:05:05,200 Speaker 1: clean air in your house. That's right. Yeah, Preventative maintenance 114 00:05:05,400 --> 00:05:08,400 Speaker 1: is like huge. It's totally being frugal, right to to 115 00:05:08,480 --> 00:05:12,120 Speaker 1: do those minor things to keep things running smoothly. Like 116 00:05:12,279 --> 00:05:14,440 Speaker 1: the filter in your h VAC. It's um, you know, 117 00:05:14,480 --> 00:05:16,640 Speaker 1: it's a ten dollar filter or whatever, and yet that 118 00:05:16,640 --> 00:05:19,160 Speaker 1: could save you from hundreds of dollars and repairs or 119 00:05:19,240 --> 00:05:21,880 Speaker 1: thousands of dollars in having to get a new unit. 120 00:05:22,160 --> 00:05:23,840 Speaker 1: Totally man. Yes, So another quick question for you, do 121 00:05:23,839 --> 00:05:26,800 Speaker 1: you get the cheap filters uh that only filter out 122 00:05:26,880 --> 00:05:28,400 Speaker 1: dust or do you get the ones to that say 123 00:05:28,400 --> 00:05:31,960 Speaker 1: that they'll trap like pollen, cigarette smoke virus is I'm 124 00:05:31,960 --> 00:05:34,800 Speaker 1: not smoking SIGs in my house, so I'm usually going 125 00:05:34,839 --> 00:05:37,560 Speaker 1: with like you know that in between grade of yeah, 126 00:05:37,640 --> 00:05:39,920 Speaker 1: not not the super fancy ones. That's filtering out every 127 00:05:39,920 --> 00:05:41,800 Speaker 1: single thing. But yeah, the middle of the road. Well, 128 00:05:41,800 --> 00:05:43,640 Speaker 1: here's why I think so. Yeah, those fancier ones they 129 00:05:43,640 --> 00:05:46,000 Speaker 1: say that they'll filter out like everything, like, but I've 130 00:05:46,040 --> 00:05:48,239 Speaker 1: got to think that that makes it more difficult for 131 00:05:48,320 --> 00:05:50,720 Speaker 1: the system to pull the air through as well. Right, 132 00:05:51,040 --> 00:05:53,039 Speaker 1: I'm sure we'll hear from a listener who you know, 133 00:05:54,800 --> 00:05:56,720 Speaker 1: and they'll be like, sorry, Matt, you're rung on that way, 134 00:05:57,240 --> 00:05:59,360 Speaker 1: who knows. Yeah, that's just what I'm thinking versus like 135 00:05:59,400 --> 00:06:00,920 Speaker 1: the super cheap ones that are kind of like, it's 136 00:06:00,920 --> 00:06:02,720 Speaker 1: like breathing through a sock. It's like really easy as 137 00:06:02,720 --> 00:06:05,200 Speaker 1: opposed to breathing through like a coffee filter, right, Like, 138 00:06:05,240 --> 00:06:07,039 Speaker 1: one of these is going to be more difficult than 139 00:06:07,080 --> 00:06:08,520 Speaker 1: the other. But I'm with you. I don't want to 140 00:06:08,520 --> 00:06:09,920 Speaker 1: overdo it, but I also don't want to I don't 141 00:06:09,920 --> 00:06:11,880 Speaker 1: want to go too cheap as well. And stop trying 142 00:06:11,880 --> 00:06:13,800 Speaker 1: to breath through socks, buddy, all right, I'm just that's 143 00:06:13,839 --> 00:06:16,280 Speaker 1: the first thinking. Much. How about a sweater. Breathing through 144 00:06:16,279 --> 00:06:18,440 Speaker 1: a sweater that sounds a little more less gross than 145 00:06:19,000 --> 00:06:21,680 Speaker 1: it does it does. All right, let's let's move on 146 00:06:21,720 --> 00:06:23,560 Speaker 1: to the drink that we're having on this episode. And 147 00:06:23,600 --> 00:06:26,080 Speaker 1: like you say, drink because this is a peach seltzer 148 00:06:26,440 --> 00:06:29,920 Speaker 1: from our friend Jess who he homebrewed this his home 149 00:06:30,000 --> 00:06:32,800 Speaker 1: brewer goes under the Moniker easy Chair brewing garage. So 150 00:06:32,880 --> 00:06:36,200 Speaker 1: big thanks to Jess for tossing this literally homemade peach 151 00:06:36,320 --> 00:06:38,719 Speaker 1: seltzer our way, and we'll give our thoughts on it 152 00:06:38,760 --> 00:06:40,440 Speaker 1: at the end of the episode. But for now, Matt, 153 00:06:40,480 --> 00:06:42,679 Speaker 1: let's get onto the topic of hand. We're answering listener 154 00:06:42,800 --> 00:06:45,240 Speaker 1: questions today and for anybody out there who has a 155 00:06:45,320 --> 00:06:47,400 Speaker 1: question they want to ask, we would love to hear 156 00:06:47,400 --> 00:06:49,400 Speaker 1: it and we'd love to hopefully take it on an 157 00:06:49,480 --> 00:06:52,599 Speaker 1: upcoming ask HTM episode. Just go to how to money 158 00:06:52,680 --> 00:06:55,880 Speaker 1: dot com slash ask. They're super simple instructions there for 159 00:06:55,920 --> 00:06:58,679 Speaker 1: you to record and then send us your voice memo 160 00:06:59,200 --> 00:07:02,040 Speaker 1: and hopefully we can take your question on an episode soon. 161 00:07:02,440 --> 00:07:04,160 Speaker 1: So Matt, let's get to the first one. This is 162 00:07:04,200 --> 00:07:06,440 Speaker 1: about medium term savings. When you're when you're saving for 163 00:07:06,480 --> 00:07:09,400 Speaker 1: a house, where do you put that money? Hey guys, 164 00:07:09,680 --> 00:07:13,080 Speaker 1: this is Alex from the df W. I just wanted 165 00:07:13,120 --> 00:07:15,600 Speaker 1: to echo the question that was asked in the Facebook 166 00:07:15,600 --> 00:07:18,520 Speaker 1: group today. UM, I'd like to buy a house, you 167 00:07:18,520 --> 00:07:20,880 Speaker 1: know in the next three to six years or so, 168 00:07:21,240 --> 00:07:23,720 Speaker 1: but it's still gonna be a minute before I have 169 00:07:24,480 --> 00:07:27,280 Speaker 1: the amount needed for a down payment. So I'm really 170 00:07:27,320 --> 00:07:32,400 Speaker 1: just wondering where should I save that money. So about me, um, 171 00:07:32,440 --> 00:07:34,920 Speaker 1: I don't have any debt, I have used car my 172 00:07:35,000 --> 00:07:39,200 Speaker 1: contractor without an employer match. I'd like to start investing 173 00:07:39,200 --> 00:07:41,200 Speaker 1: in a roth Ira for the first time this year. 174 00:07:41,760 --> 00:07:43,920 Speaker 1: Aside from that, I do have a little bit in savings. 175 00:07:44,360 --> 00:07:46,440 Speaker 1: I'm just wondering where I should start going to plan 176 00:07:46,560 --> 00:07:50,680 Speaker 1: for the future. Thanks guys. All right, Alex, we appreciate 177 00:07:50,680 --> 00:07:53,239 Speaker 1: you listening to the podcast and sending in your question, 178 00:07:53,520 --> 00:07:55,760 Speaker 1: and again especially because I know that you're not the 179 00:07:55,800 --> 00:07:58,800 Speaker 1: only one out there who's wondering the exact same thing. 180 00:07:59,080 --> 00:08:01,000 Speaker 1: There are a ton of folks out there who are 181 00:08:01,120 --> 00:08:02,800 Speaker 1: starting to look ahead. You know, they're looking down the 182 00:08:02,840 --> 00:08:05,280 Speaker 1: road and they see home ownership in their future. So 183 00:08:05,400 --> 00:08:07,800 Speaker 1: thanks for sending in your question. And also to you know, 184 00:08:07,840 --> 00:08:11,200 Speaker 1: Alex mentioned a comment uh in our Facebook group. If 185 00:08:11,240 --> 00:08:13,880 Speaker 1: you are on Facebook and you haven't joined our group, 186 00:08:13,920 --> 00:08:16,120 Speaker 1: make sure to search for how to Money and you 187 00:08:16,120 --> 00:08:18,880 Speaker 1: can find a group of like minded money nerds that 188 00:08:18,920 --> 00:08:21,120 Speaker 1: are they're helping each other out man, people are there 189 00:08:21,120 --> 00:08:22,800 Speaker 1: so great. They're always helping each other out, and they're 190 00:08:22,800 --> 00:08:24,800 Speaker 1: always like super kind. I feel like the internet an 191 00:08:24,880 --> 00:08:28,760 Speaker 1: unkind place money. Yeah, like when you remove humanity and 192 00:08:28,880 --> 00:08:31,400 Speaker 1: people are faceless, people can be rude, yeah, but but 193 00:08:31,480 --> 00:08:32,760 Speaker 1: not in how the money group most of the time 194 00:08:33,040 --> 00:08:35,520 Speaker 1: that I'm glad for. That also to Matt, like, let's 195 00:08:35,600 --> 00:08:38,760 Speaker 1: let's get to Alex's question, Like she says, where could 196 00:08:38,800 --> 00:08:41,520 Speaker 1: I save that money for a down payment? And we 197 00:08:41,520 --> 00:08:43,480 Speaker 1: think she is mostly on the right track here wanting 198 00:08:43,520 --> 00:08:46,600 Speaker 1: to save her money because she's looking to purchase a 199 00:08:46,640 --> 00:08:49,760 Speaker 1: home sometime in you know this medium term length of 200 00:08:49,840 --> 00:08:52,439 Speaker 1: time three to six years, Alex, You're likely not going 201 00:08:52,480 --> 00:08:54,160 Speaker 1: to want to invest all of that money in the 202 00:08:54,200 --> 00:08:56,800 Speaker 1: market because you'd run the risk of losing some of 203 00:08:56,800 --> 00:08:59,319 Speaker 1: it in the short term. Right Let's say you do 204 00:08:59,520 --> 00:09:02,080 Speaker 1: decide to buy a house in three years, Well, that's 205 00:09:02,080 --> 00:09:04,400 Speaker 1: a short timeline and you could lose some of the 206 00:09:04,400 --> 00:09:06,439 Speaker 1: money that you put in. If it's invested, let's say 207 00:09:07,160 --> 00:09:09,840 Speaker 1: in stocks. Over longer periods of time, you'll see money 208 00:09:09,840 --> 00:09:12,960 Speaker 1: invested in the stock market grow, And that's because the 209 00:09:13,040 --> 00:09:16,520 Speaker 1: longer you're invested, you smooth out the volatility, right, the 210 00:09:16,600 --> 00:09:19,079 Speaker 1: ups and the downs of the market. The longer your 211 00:09:19,080 --> 00:09:22,880 Speaker 1: time frame, the less risky investing becomes. Yep. Yeah, time 212 00:09:22,880 --> 00:09:25,440 Speaker 1: frame is really critical to your question here because of 213 00:09:25,520 --> 00:09:27,720 Speaker 1: you know, what we can learn from history and so 214 00:09:27,880 --> 00:09:30,600 Speaker 1: uh Alexa. Say, for instance, that you were planning to 215 00:09:30,600 --> 00:09:32,760 Speaker 1: buy a house way off in the future, maybe say 216 00:09:32,800 --> 00:09:35,240 Speaker 1: like in fifteen years, Well, if that were the case, 217 00:09:35,240 --> 00:09:38,359 Speaker 1: we would one percent encourage you to invest that money 218 00:09:38,400 --> 00:09:41,040 Speaker 1: in the stock market, because there isn't a fifteen year 219 00:09:41,080 --> 00:09:44,120 Speaker 1: period in over fifty years where the SMP five hundred 220 00:09:44,120 --> 00:09:47,360 Speaker 1: didn't yield a positive return. However, when you look at 221 00:09:47,360 --> 00:09:50,640 Speaker 1: the rolling five year returns, there are definitely some periods 222 00:09:50,640 --> 00:09:53,840 Speaker 1: when the stock market delivered a negative return. There's a specifically, 223 00:09:53,840 --> 00:09:55,760 Speaker 1: if you look at recent history, if you look at 224 00:09:55,800 --> 00:09:58,520 Speaker 1: the five years from about two thousand four to two 225 00:09:58,559 --> 00:10:02,640 Speaker 1: thousand nine, the stock market dropped thirty the smp f 226 00:10:02,640 --> 00:10:05,520 Speaker 1: I under fell, and so you're looking at an annualized 227 00:10:05,600 --> 00:10:08,880 Speaker 1: negative turn at around six percent. And so if you're 228 00:10:09,040 --> 00:10:11,079 Speaker 1: counting on that money within those five years, at the 229 00:10:11,160 --> 00:10:13,319 Speaker 1: end of that period of time to do something with that, 230 00:10:13,840 --> 00:10:15,679 Speaker 1: you would have ended up with a lot less money. 231 00:10:15,840 --> 00:10:17,920 Speaker 1: And of course that's not the situation anybody wants to 232 00:10:17,920 --> 00:10:20,400 Speaker 1: find themselves in, but especially if that money has a 233 00:10:20,480 --> 00:10:23,079 Speaker 1: name on it, right, if you have a specific goal 234 00:10:23,200 --> 00:10:25,679 Speaker 1: that you're using to fund with that money. And so 235 00:10:25,800 --> 00:10:27,120 Speaker 1: if you invest in the market, you know there's a 236 00:10:27,120 --> 00:10:29,760 Speaker 1: really good chance that you would see your your investment grow, 237 00:10:30,240 --> 00:10:32,959 Speaker 1: but you do run the risk of potentially losing money 238 00:10:33,000 --> 00:10:36,040 Speaker 1: as well. Yeah, And and since Alex h for her, 239 00:10:36,160 --> 00:10:38,480 Speaker 1: preservation of capital is really important here, and I feel 240 00:10:38,480 --> 00:10:40,960 Speaker 1: like preservation of capital is a fancy way of saying 241 00:10:41,200 --> 00:10:45,600 Speaker 1: not losing your money. That's when I keep my money exactly. Yes, 242 00:10:45,640 --> 00:10:48,520 Speaker 1: since that's like such an important part of this equation, 243 00:10:48,840 --> 00:10:50,760 Speaker 1: you don't want to be too flippant with that money 244 00:10:50,760 --> 00:10:53,640 Speaker 1: that you're gonna need in potentially just a few years time. Um, 245 00:10:53,640 --> 00:10:56,040 Speaker 1: but it might make sense to invest some of that money, 246 00:10:56,160 --> 00:10:58,360 Speaker 1: and I don't know, maybe split the difference, maybe half 247 00:10:58,400 --> 00:11:00,959 Speaker 1: of it, uh in investing half of it maybe in 248 00:11:00,960 --> 00:11:04,880 Speaker 1: a more conservative fund that isn't stock focused, like let's 249 00:11:04,880 --> 00:11:08,680 Speaker 1: say a target date fund. You so you're talking about 250 00:11:09,000 --> 00:11:10,880 Speaker 1: even half of the half that you're putting in there 251 00:11:11,280 --> 00:11:14,160 Speaker 1: in in stocks the rest in bonds. You have a 252 00:11:14,160 --> 00:11:17,800 Speaker 1: more balanced approach to investing and you're less likely to 253 00:11:17,840 --> 00:11:21,360 Speaker 1: experience huge bouts of volatility when you have your money 254 00:11:21,400 --> 00:11:23,480 Speaker 1: invested in that way, and then maybe with the other 255 00:11:23,520 --> 00:11:26,160 Speaker 1: half to find uh, we would suggest finding a conservative 256 00:11:26,200 --> 00:11:28,959 Speaker 1: place to generate a small return with with the rest. 257 00:11:29,200 --> 00:11:32,160 Speaker 1: You know, Series I Savings bonds are an awesome vehicle 258 00:11:32,280 --> 00:11:35,040 Speaker 1: for medium term savers. Right now, those bonds are being 259 00:11:35,080 --> 00:11:38,319 Speaker 1: issued with a three point five four percent guaranteed return 260 00:11:38,400 --> 00:11:40,720 Speaker 1: right now from the federal government, which is great. So 261 00:11:40,800 --> 00:11:43,319 Speaker 1: stashing some of your funds there is going to ensure 262 00:11:43,400 --> 00:11:46,520 Speaker 1: that your cash isn't being eaten away by inflation because 263 00:11:46,600 --> 00:11:49,400 Speaker 1: it's actually keeping pace with inflation. That's what I bonds do. 264 00:11:49,800 --> 00:11:51,520 Speaker 1: And so yeah, you can purchase up to ten tho 265 00:11:51,760 --> 00:11:55,120 Speaker 1: dollars worth of I bonds per person each calendar year, 266 00:11:55,400 --> 00:11:58,880 Speaker 1: and obviously three point five is way better than what 267 00:11:59,080 --> 00:12:02,440 Speaker 1: basically any of the online tavit accouns are paying these days. Yeah, 268 00:12:02,480 --> 00:12:04,400 Speaker 1: not only are you keeping your money from getting eroded 269 00:12:04,400 --> 00:12:06,680 Speaker 1: by inflation, but you're also able to avoid some of 270 00:12:06,720 --> 00:12:09,480 Speaker 1: that inherent risk that comes with investing in the stock market. 271 00:12:09,600 --> 00:12:13,200 Speaker 1: But one downside to I bons uh is that you 272 00:12:13,240 --> 00:12:14,960 Speaker 1: have to keep it locked up for at least a 273 00:12:15,080 --> 00:12:18,240 Speaker 1: year and if you decide to redeem them before five 274 00:12:18,440 --> 00:12:21,079 Speaker 1: full years of having them, you're actually gonna have to 275 00:12:21,120 --> 00:12:24,240 Speaker 1: forfeit three months of interest. And that's honestly not that 276 00:12:24,320 --> 00:12:26,640 Speaker 1: big of a penalty, to be honest, it's it's still 277 00:12:26,720 --> 00:12:28,760 Speaker 1: way better than that point five per cent that you're 278 00:12:28,760 --> 00:12:31,319 Speaker 1: gonna you know, earn in savings. And here's the thing too. 279 00:12:31,360 --> 00:12:33,720 Speaker 1: On that note, if you're not completely sure that you'd 280 00:12:33,720 --> 00:12:35,839 Speaker 1: want to buy a house, you know, three or six 281 00:12:35,920 --> 00:12:38,120 Speaker 1: years from now, you can always go ahead and accept 282 00:12:38,120 --> 00:12:40,880 Speaker 1: the risk of fully investing that money within the market 283 00:12:41,120 --> 00:12:43,080 Speaker 1: because again, you know, there's a chance that you'll grow 284 00:12:43,160 --> 00:12:46,000 Speaker 1: that investment, but there's no guarantee. So it kind of 285 00:12:46,040 --> 00:12:48,360 Speaker 1: comes down to how much that you want that house. 286 00:12:48,800 --> 00:12:50,240 Speaker 1: If you want to guarantee that money is going to 287 00:12:50,320 --> 00:12:52,440 Speaker 1: be there, then again we would recommend that you not 288 00:12:52,600 --> 00:12:54,760 Speaker 1: invest that money, or at least limit seeing how much 289 00:12:54,760 --> 00:12:57,320 Speaker 1: you're investing too, only half of your money, uh, and 290 00:12:57,320 --> 00:12:59,040 Speaker 1: then maybe with the other half. Yeah, like Joel said, 291 00:12:59,040 --> 00:13:01,480 Speaker 1: putting it in ibon Matt, I feel like ibans are 292 00:13:01,520 --> 00:13:03,959 Speaker 1: going to become, you know, just more and more interesting 293 00:13:04,000 --> 00:13:07,040 Speaker 1: to a lot of savers, you know, because the rates 294 00:13:07,120 --> 00:13:10,160 Speaker 1: being paid on those are going up, and inflation looks 295 00:13:10,200 --> 00:13:12,880 Speaker 1: like the fear of the fear inflation and knowing that 296 00:13:12,880 --> 00:13:15,120 Speaker 1: you're at least keeping pace with it, um for for 297 00:13:15,160 --> 00:13:17,360 Speaker 1: some of the money that you have stashed away, is 298 00:13:17,600 --> 00:13:19,680 Speaker 1: I think you're going to be become more and more appealing. 299 00:13:20,040 --> 00:13:22,120 Speaker 1: We got more questions to get to them, att including 300 00:13:22,320 --> 00:13:24,600 Speaker 1: you know what about becoming a financial counselor should I 301 00:13:24,640 --> 00:13:26,199 Speaker 1: do that? How do I go about doing that? We'll 302 00:13:26,240 --> 00:13:37,720 Speaker 1: get to that and more right after this break. All right, 303 00:13:37,760 --> 00:13:39,839 Speaker 1: we're back in Joe. Let's take a question now from 304 00:13:39,840 --> 00:13:41,719 Speaker 1: a listen to who who's out in California and he's 305 00:13:41,720 --> 00:13:44,120 Speaker 1: thinking about taking a serious cutting pay in order to 306 00:13:44,200 --> 00:13:47,640 Speaker 1: help other people. Hey, Joel Matte, this is Will from 307 00:13:47,679 --> 00:13:51,079 Speaker 1: southern California. Really love your show and keep up the 308 00:13:51,120 --> 00:13:54,600 Speaker 1: good work, guys. My wife and I are both pretty 309 00:13:54,679 --> 00:13:57,720 Speaker 1: high earners. We're both in the healthcare field. Uh and 310 00:13:57,760 --> 00:14:00,280 Speaker 1: even though we live in southern California, we were able 311 00:14:00,320 --> 00:14:04,080 Speaker 1: to save a lot, probably close to about of our income, 312 00:14:04,440 --> 00:14:07,600 Speaker 1: so we're definitely well on our way to financial independence. 313 00:14:08,360 --> 00:14:10,880 Speaker 1: My wife is probably never going to quit her job. 314 00:14:11,160 --> 00:14:13,320 Speaker 1: She's a physician and she worked really hard at it 315 00:14:13,679 --> 00:14:16,560 Speaker 1: and it's gonna probably continue working for for a long time. 316 00:14:16,960 --> 00:14:19,560 Speaker 1: In terms for me, I'm a little bit less passionate 317 00:14:19,560 --> 00:14:21,560 Speaker 1: about my work as I used to be. Um a 318 00:14:21,600 --> 00:14:24,920 Speaker 1: lot of transitions, especially during COVID, so I've been thinking 319 00:14:24,920 --> 00:14:27,160 Speaker 1: a little bit about, um, what I may want to do. 320 00:14:27,640 --> 00:14:29,920 Speaker 1: Finance really does interest me. I listened to your show 321 00:14:30,000 --> 00:14:32,480 Speaker 1: plus a bunch of others, and I'm pretty passionate about it. 322 00:14:32,920 --> 00:14:35,800 Speaker 1: So I was looking into something I guess called the 323 00:14:36,440 --> 00:14:39,960 Speaker 1: credited financial counselor. It looks like a little bit different 324 00:14:40,120 --> 00:14:44,760 Speaker 1: compared to a certified financial planner, and I was wondering 325 00:14:44,800 --> 00:14:47,520 Speaker 1: if you guys know anything about it. Obviously I love 326 00:14:47,600 --> 00:14:50,960 Speaker 1: what you guys do, but quote unquote for entertainment purposes only. 327 00:14:51,200 --> 00:14:54,280 Speaker 1: So I was looking more into maybe areas where I 328 00:14:54,280 --> 00:14:56,680 Speaker 1: can do one on one counseling with people about their 329 00:14:56,680 --> 00:14:59,400 Speaker 1: finances helped them out in terms of, you know, sending 330 00:14:59,440 --> 00:15:02,520 Speaker 1: them on the right path, especially since I've been able 331 00:15:02,560 --> 00:15:05,160 Speaker 1: to do that with my finances and my families, and 332 00:15:05,200 --> 00:15:07,720 Speaker 1: I think it's something that I would be good at, 333 00:15:07,760 --> 00:15:10,400 Speaker 1: but also that would help a lot of people. And 334 00:15:10,640 --> 00:15:12,080 Speaker 1: even if I have to take a pay cut, we're 335 00:15:12,080 --> 00:15:14,440 Speaker 1: in a good place to be able to manage that still. 336 00:15:14,520 --> 00:15:16,920 Speaker 1: So I love the show guys look forward to when 337 00:15:16,960 --> 00:15:19,480 Speaker 1: you guys have to say about this. Will man, I 338 00:15:19,560 --> 00:15:21,560 Speaker 1: love the heart behind this right that that you want 339 00:15:21,560 --> 00:15:23,320 Speaker 1: to help other people and you're willing to take a 340 00:15:23,320 --> 00:15:25,640 Speaker 1: pay cut to do it. That's awesome, a man, I 341 00:15:25,680 --> 00:15:28,720 Speaker 1: think to like, saving in southern California is so much harder. 342 00:15:28,920 --> 00:15:31,120 Speaker 1: So like, I feel like Will deserves a big round 343 00:15:31,120 --> 00:15:33,680 Speaker 1: of plause for being able to save such a major 344 00:15:33,800 --> 00:15:37,240 Speaker 1: chunk of his income when yeah, that's a lot of money. 345 00:15:37,280 --> 00:15:40,000 Speaker 1: That's incredible, uh, I mean, especially given I mean the 346 00:15:40,040 --> 00:15:43,080 Speaker 1: taxes in California cost of living. That's definitely not like 347 00:15:43,120 --> 00:15:45,840 Speaker 1: living in Atlanta. You know. Yeah, I feel like Will 348 00:15:45,920 --> 00:15:48,960 Speaker 1: must really like rice and beans, right if he's doing that. 349 00:15:49,120 --> 00:15:51,200 Speaker 1: But yeah, well let's talk about you know, your question 350 00:15:51,200 --> 00:15:53,960 Speaker 1: and becoming a financial counselor. I feel like that's a 351 00:15:53,960 --> 00:15:56,440 Speaker 1: great path to take, and there's such a huge need 352 00:15:56,440 --> 00:15:58,440 Speaker 1: out there. You really have to do it because you 353 00:15:58,520 --> 00:16:01,440 Speaker 1: do love helping people, because I so such an important 354 00:16:01,480 --> 00:16:05,040 Speaker 1: part of of your mission. Matt makes me think, I'm 355 00:16:05,080 --> 00:16:07,160 Speaker 1: not sure if you've seen any of the Netflix series 356 00:16:07,320 --> 00:16:09,320 Speaker 1: Last Chance of You have you seen that? No, Okay, 357 00:16:09,600 --> 00:16:11,760 Speaker 1: so apparently there's a bunch of seasons I've only watched 358 00:16:11,800 --> 00:16:14,640 Speaker 1: like some of the most recent one, which was about 359 00:16:14,640 --> 00:16:17,960 Speaker 1: this basketball team in Los Angeles and the coach man 360 00:16:18,000 --> 00:16:21,000 Speaker 1: on there he's just like a guy that seemed he 361 00:16:21,040 --> 00:16:22,760 Speaker 1: just seems like one of the coolest dudes ever. His 362 00:16:22,840 --> 00:16:27,320 Speaker 1: name's John Moseley, and he's just all about making these kids. 363 00:16:27,320 --> 00:16:29,040 Speaker 1: Like he's not all about winning games, although they win 364 00:16:29,080 --> 00:16:31,800 Speaker 1: a ton of games, but he's all about like helping 365 00:16:31,800 --> 00:16:34,800 Speaker 1: these kids like move into adulthood and find some sort 366 00:16:34,800 --> 00:16:39,360 Speaker 1: of like mentorship. His his heart behind coaching is just 367 00:16:39,440 --> 00:16:42,040 Speaker 1: something I think is like super admirable and um yeah, 368 00:16:42,040 --> 00:16:44,080 Speaker 1: So if anybody out there is like looking for something 369 00:16:44,080 --> 00:16:46,160 Speaker 1: to watch on Netflix, like, I recommend that the latest 370 00:16:46,200 --> 00:16:47,760 Speaker 1: season of The Last Chance You a little picked me 371 00:16:47,840 --> 00:16:50,000 Speaker 1: up kind of series. Yeah yeah, dude, I was like, man, 372 00:16:50,040 --> 00:16:51,160 Speaker 1: this makes we want to go out and like do 373 00:16:51,240 --> 00:16:53,280 Speaker 1: something getting the community and serve some folks an impact 374 00:16:53,280 --> 00:16:55,760 Speaker 1: on the world. Yeah exactly. But but yeah, I feel 375 00:16:55,760 --> 00:16:58,200 Speaker 1: like that financial coach space is a great place if 376 00:16:58,240 --> 00:17:00,440 Speaker 1: you have that kind of heart, but can also be 377 00:17:00,440 --> 00:17:02,840 Speaker 1: a tough one. And like the tough part of the 378 00:17:02,840 --> 00:17:06,000 Speaker 1: space is that anybody can call themselves a coach, right, 379 00:17:06,160 --> 00:17:08,600 Speaker 1: like lots of folks do it. They charge for their 380 00:17:08,600 --> 00:17:10,880 Speaker 1: time and their money. They don't have any letters behind 381 00:17:10,880 --> 00:17:12,879 Speaker 1: their name. And I think, Matt, you and I were 382 00:17:12,960 --> 00:17:15,359 Speaker 1: okay with that, right, we don't have any letters behind 383 00:17:15,400 --> 00:17:18,240 Speaker 1: our names. But but yeah, some of the most passionate 384 00:17:18,280 --> 00:17:21,800 Speaker 1: and knowledgeable folks in the personal finance space are self taught, 385 00:17:22,200 --> 00:17:24,360 Speaker 1: just like Will and Will. It's just one of those 386 00:17:24,359 --> 00:17:26,520 Speaker 1: things like hiring a life coach, right, it could be 387 00:17:26,560 --> 00:17:29,600 Speaker 1: a good thing. This this person could be really really helpful, 388 00:17:29,600 --> 00:17:32,080 Speaker 1: but you might also get some like weird advice too 389 00:17:32,160 --> 00:17:34,720 Speaker 1: if you hire a life coach and they're a bit wacky. Um, 390 00:17:34,720 --> 00:17:37,040 Speaker 1: it's kind of a swim at your own risk environment 391 00:17:37,200 --> 00:17:39,359 Speaker 1: at least when it comes to like the consumer who's 392 00:17:39,400 --> 00:17:42,320 Speaker 1: hiring the life coach or financial coach side of things. 393 00:17:42,400 --> 00:17:44,000 Speaker 1: You can find somebody on the fringe a little bit, 394 00:17:44,000 --> 00:17:46,159 Speaker 1: but you can also find some legit good advice. It 395 00:17:46,200 --> 00:17:49,600 Speaker 1: just depends. So well, that's kind of where accreditations come 396 00:17:49,640 --> 00:17:52,560 Speaker 1: into play. Uh, And so hiring a financial counselor it's 397 00:17:52,560 --> 00:17:54,960 Speaker 1: it's gonna be difficult for the consumer to know who 398 00:17:55,000 --> 00:17:57,959 Speaker 1: they can trust because the level of financial knowledge can 399 00:17:58,080 --> 00:18:01,800 Speaker 1: vary widely between people who call themselves, you know, a 400 00:18:01,840 --> 00:18:05,360 Speaker 1: financial counselor, and so there are different certifications out there too, 401 00:18:05,840 --> 00:18:08,560 Speaker 1: but we think that getting accredited is well worth your 402 00:18:08,600 --> 00:18:10,600 Speaker 1: time as well as the money that it takes, and 403 00:18:10,640 --> 00:18:13,320 Speaker 1: there are a couple different certifications worth looking into. We 404 00:18:13,359 --> 00:18:16,920 Speaker 1: think that the CPFC is a solid choice that stands 405 00:18:16,960 --> 00:18:20,159 Speaker 1: for the Certified Personal Finance Consultant, but we feel that 406 00:18:20,200 --> 00:18:23,480 Speaker 1: the a f C, the Accredited Financial Counselor, which you mentioned, 407 00:18:23,600 --> 00:18:25,840 Speaker 1: is probably the best one out there. Will make sure 408 00:18:25,840 --> 00:18:28,400 Speaker 1: to link to both of those in our show notes, UH, 409 00:18:28,400 --> 00:18:30,399 Speaker 1: and either one of those certifications are going to be 410 00:18:30,440 --> 00:18:32,920 Speaker 1: really helpful when it comes to the that the education 411 00:18:32,960 --> 00:18:35,600 Speaker 1: that you receive UH and in providing credibility, you know, 412 00:18:35,640 --> 00:18:38,560 Speaker 1: to potential clients. Basically they're going to have a much 413 00:18:38,600 --> 00:18:41,480 Speaker 1: better idea of what kind of coach that they'll be 414 00:18:41,520 --> 00:18:43,840 Speaker 1: getting or you to have some of those initials behind 415 00:18:43,840 --> 00:18:45,320 Speaker 1: your name. That's right, by the way. The a f 416 00:18:45,440 --> 00:18:48,320 Speaker 1: C is definitely different from a CFP, which is a 417 00:18:48,440 --> 00:18:51,359 Speaker 1: certified financial planner, which I will did mention in the question. 418 00:18:51,359 --> 00:18:53,919 Speaker 1: I think the CFP is going to take you longer 419 00:18:53,960 --> 00:18:57,760 Speaker 1: to get. You'll likely be working really in a different capacity. 420 00:18:58,119 --> 00:19:00,199 Speaker 1: You'll be working with more like high end clients and 421 00:19:00,320 --> 00:19:05,080 Speaker 1: talking about more um complex financial situations, maybe some estate planning, 422 00:19:05,160 --> 00:19:06,960 Speaker 1: right whereas like a a f C is gonna be 423 00:19:06,960 --> 00:19:09,960 Speaker 1: helping people with stuff like ludgeoning and debt payoff. They're 424 00:19:10,040 --> 00:19:13,200 Speaker 1: really two different ends of like the financial stratosphere that 425 00:19:13,200 --> 00:19:15,520 Speaker 1: you're gonna be walking in, and either is great, but 426 00:19:15,600 --> 00:19:17,280 Speaker 1: we think there's just like this big need for a 427 00:19:17,400 --> 00:19:19,480 Speaker 1: f C s to help people with the basics of 428 00:19:19,520 --> 00:19:22,160 Speaker 1: personal finance and UM and so yeah, we would encourage 429 00:19:22,200 --> 00:19:23,920 Speaker 1: you to go in that direction, and so best of 430 00:19:24,000 --> 00:19:25,760 Speaker 1: luck to you will really as you pursue this line 431 00:19:25,760 --> 00:19:28,119 Speaker 1: of work. Hopefully it's not helpful just for you. Hopefully 432 00:19:28,160 --> 00:19:30,360 Speaker 1: it's not just good and fulfilling for you. But man, 433 00:19:30,440 --> 00:19:32,400 Speaker 1: you're you're able to help a lot of people out 434 00:19:32,440 --> 00:19:34,720 Speaker 1: there on this in this really fulfilling way that's like 435 00:19:34,760 --> 00:19:37,320 Speaker 1: one on one coaching where you can really see the 436 00:19:37,359 --> 00:19:39,840 Speaker 1: differences that the people are able to make in their 437 00:19:39,840 --> 00:19:43,000 Speaker 1: lives based on the advice you're able to give. That's right, Joel, 438 00:19:43,000 --> 00:19:44,840 Speaker 1: all right, Our next question comes from a listener who 439 00:19:44,840 --> 00:19:47,720 Speaker 1: has a teenager that who has a summer job they're 440 00:19:47,720 --> 00:19:49,840 Speaker 1: starting to think about taxes. I know it's the middle 441 00:19:49,840 --> 00:19:51,400 Speaker 1: of the summer, but it's never too soon to start 442 00:19:51,440 --> 00:19:55,200 Speaker 1: thinking about taxes. So let's hear this question. Hi, Jel 443 00:19:55,240 --> 00:19:59,320 Speaker 1: and Matt. This is Sharon from Cleveland, Ohio. We're very 444 00:19:59,359 --> 00:20:02,159 Speaker 1: excited that our fifteen year old tax his first summer 445 00:20:02,240 --> 00:20:05,359 Speaker 1: job this year, but we are wondering how we're going 446 00:20:05,400 --> 00:20:08,399 Speaker 1: to deal with the tax situation. Do we need to 447 00:20:08,440 --> 00:20:11,720 Speaker 1: report his income on our return? Does he need to 448 00:20:11,720 --> 00:20:14,000 Speaker 1: file a separate return so that he can get a 449 00:20:14,000 --> 00:20:18,159 Speaker 1: refund of those taxes that he surely won't oh, because 450 00:20:18,200 --> 00:20:21,240 Speaker 1: he'll be low income. Would appreciate any tips you have. 451 00:20:21,560 --> 00:20:24,080 Speaker 1: Thanks so much, all right, Matt, I like this question 452 00:20:24,280 --> 00:20:26,840 Speaker 1: pump for Sharon and for her fifteen year old too, 453 00:20:27,160 --> 00:20:30,080 Speaker 1: because I feel like, Yeah, starting work that early in 454 00:20:30,119 --> 00:20:31,679 Speaker 1: life it is such a good thing, Like it was 455 00:20:31,760 --> 00:20:33,760 Speaker 1: it was for me. Man, when I started at the 456 00:20:34,000 --> 00:20:36,600 Speaker 1: ripe old age of fourteen. It was my first job. 457 00:20:36,880 --> 00:20:40,159 Speaker 1: Is that even allowed? It was legally? Yeah, just barely, 458 00:20:40,520 --> 00:20:42,120 Speaker 1: just really. I mean, I guess I was doing other 459 00:20:42,119 --> 00:20:44,440 Speaker 1: things before then, like mowin lawns, and but I did 460 00:20:44,440 --> 00:20:47,399 Speaker 1: more work like that that versus like a legit you know, 461 00:20:47,480 --> 00:20:49,840 Speaker 1: paid job where I was getting you know, taxes taken out, 462 00:20:49,880 --> 00:20:51,480 Speaker 1: which is like, that's the biggest thing I feel like 463 00:20:51,480 --> 00:20:53,440 Speaker 1: you learned with your first job is that where is 464 00:20:53,480 --> 00:20:55,520 Speaker 1: all my money? Like you see how much money is 465 00:20:55,720 --> 00:20:58,520 Speaker 1: did come my way being taken out? But yeah, your 466 00:20:58,560 --> 00:21:00,320 Speaker 1: first gig was at the cell phone. Was at the 467 00:21:00,320 --> 00:21:02,040 Speaker 1: cell phone, so that was like that was later in 468 00:21:02,080 --> 00:21:03,760 Speaker 1: high school. First gig was it Chick fil a. Man, 469 00:21:03,800 --> 00:21:06,320 Speaker 1: Oh that's right, that's right. So yeah, and yours was 470 00:21:06,400 --> 00:21:07,960 Speaker 1: at the golf course, right, yeah, that's right. I was 471 00:21:08,000 --> 00:21:11,960 Speaker 1: a cartboy basically, just yeah, running all over the place 472 00:21:11,960 --> 00:21:14,359 Speaker 1: in a in a golf cart. But man, like, honestly, 473 00:21:14,440 --> 00:21:16,879 Speaker 1: like we don't even have teenagers yet. But it makes 474 00:21:16,880 --> 00:21:20,600 Speaker 1: me just respect those who manage teenagers because I can't 475 00:21:20,600 --> 00:21:24,920 Speaker 1: imagine trend to manage young jewel or young mats on 476 00:21:25,000 --> 00:21:27,600 Speaker 1: the job site. I know that I was an idiot 477 00:21:27,640 --> 00:21:30,240 Speaker 1: back then, and so all the more respect to those 478 00:21:30,280 --> 00:21:34,040 Speaker 1: who hire. Uh, these young teenagers take some special skills 479 00:21:34,040 --> 00:21:37,240 Speaker 1: and some patience. Yes, absolutely, but man, I feel like 480 00:21:37,240 --> 00:21:39,640 Speaker 1: it was like such a good preparation for for future work. 481 00:21:40,000 --> 00:21:41,560 Speaker 1: I think you learned a lot by getting a summer 482 00:21:41,640 --> 00:21:44,200 Speaker 1: job and even working part time during the school year. 483 00:21:44,560 --> 00:21:47,280 Speaker 1: So yeah, big big ups to two Sharon's kiddo for this. 484 00:21:47,680 --> 00:21:50,560 Speaker 1: And if only I'd known about a roth Ira back then, yeah, 485 00:21:50,600 --> 00:21:52,840 Speaker 1: oh man, I'd be sitting pretty but I didn't in 486 00:21:52,880 --> 00:21:55,560 Speaker 1: the last didn't open one until my early twent Yeah. 487 00:21:55,560 --> 00:21:58,399 Speaker 1: We'll actually talk more about the roth Ira here in 488 00:21:58,400 --> 00:22:01,199 Speaker 1: a minute, but let's talk about taxes first, right, And so, Sharon, 489 00:22:01,320 --> 00:22:03,240 Speaker 1: for your son, he doesn't have to file a tax 490 00:22:03,280 --> 00:22:07,679 Speaker 1: return if he makes below the twelve thousand threshold, and 491 00:22:07,760 --> 00:22:11,240 Speaker 1: that's because of the standard deduction. Basically, if this is you, 492 00:22:10,920 --> 00:22:13,399 Speaker 1: you're not gonna owe tax on any income until you 493 00:22:13,440 --> 00:22:16,000 Speaker 1: start making more uh than that dollar amount more than 494 00:22:16,040 --> 00:22:19,600 Speaker 1: that twelve uh and you're actually not required to file 495 00:22:19,600 --> 00:22:22,720 Speaker 1: a tax return. The RS doesn't mind, but you might 496 00:22:22,760 --> 00:22:25,520 Speaker 1: still want to do it because there are important benefits. 497 00:22:25,560 --> 00:22:28,280 Speaker 1: For instance, if that employer is withholding the federal or 498 00:22:28,359 --> 00:22:32,000 Speaker 1: state taxes, your son will be eligible for a refund. 499 00:22:32,320 --> 00:22:33,919 Speaker 1: But of course he's not going to get that refund 500 00:22:34,000 --> 00:22:36,720 Speaker 1: unless he files a return. And so if you think 501 00:22:36,760 --> 00:22:39,760 Speaker 1: that he might be eligible for that, yeah, make sure 502 00:22:39,840 --> 00:22:42,800 Speaker 1: he does file that tax return. That's true. And although 503 00:22:42,800 --> 00:22:45,000 Speaker 1: he can also fill out the W four form when 504 00:22:45,040 --> 00:22:48,160 Speaker 1: starting the job and mark exempt so the taxes aren't withheld, 505 00:22:48,359 --> 00:22:50,480 Speaker 1: which would mean that he wouldn't have to file a 506 00:22:50,520 --> 00:22:53,119 Speaker 1: return either. That's probably the simplest way really to go 507 00:22:53,160 --> 00:22:55,440 Speaker 1: about this. But yeah, the great thing is that even 508 00:22:55,480 --> 00:22:57,800 Speaker 1: if your team does file a return, it's not going 509 00:22:57,880 --> 00:23:00,000 Speaker 1: to cost any money. Through the I r S website 510 00:23:00,200 --> 00:23:02,399 Speaker 1: if you click on the free file section and it's 511 00:23:02,440 --> 00:23:04,480 Speaker 1: gonna be such a simple return that's not gonna take 512 00:23:04,520 --> 00:23:08,439 Speaker 1: long either. So that's the perk of a team filing 513 00:23:08,440 --> 00:23:11,560 Speaker 1: taxes cost nothing and super quick. That's right. Yeah, there's 514 00:23:11,600 --> 00:23:14,119 Speaker 1: no reason to overthink it beyond that. But then, Sharon, 515 00:23:14,200 --> 00:23:16,679 Speaker 1: this is also the perfect time to get your your 516 00:23:16,760 --> 00:23:19,280 Speaker 1: child interested in investing. I think one of the best 517 00:23:19,320 --> 00:23:21,760 Speaker 1: ways to get him excited is to match what he 518 00:23:21,800 --> 00:23:25,200 Speaker 1: contributes to a roth ira A. He's eligible to contribute 519 00:23:25,200 --> 00:23:27,679 Speaker 1: to a roth because he'll actually have earned income. And 520 00:23:27,760 --> 00:23:29,920 Speaker 1: so let's say, for example, that he earned six thousand 521 00:23:29,960 --> 00:23:33,000 Speaker 1: dollars at his summer job. He can contribute all of 522 00:23:33,040 --> 00:23:35,800 Speaker 1: his earnings to a wrath um. However, we know that 523 00:23:35,800 --> 00:23:38,160 Speaker 1: that's probably not going to be likely. He's probably gonna 524 00:23:38,200 --> 00:23:40,480 Speaker 1: want some without money to have fun with or you know, 525 00:23:40,480 --> 00:23:42,400 Speaker 1: maybe to start saving for a car. That kind of thing. 526 00:23:42,720 --> 00:23:45,320 Speaker 1: Totally understandable. But this is where you come. And maybe 527 00:23:45,440 --> 00:23:48,119 Speaker 1: you can convince him to contribute, say two thousand dollars 528 00:23:48,320 --> 00:23:51,359 Speaker 1: by matching it with another two thousand dollars if you 529 00:23:51,400 --> 00:23:53,680 Speaker 1: have the extra money to do so. Uh. And then 530 00:23:53,760 --> 00:23:55,320 Speaker 1: after that you can run the numbers with him so 531 00:23:55,359 --> 00:23:57,240 Speaker 1: he can get excited about it, you know. And so 532 00:23:57,320 --> 00:23:59,760 Speaker 1: if he invested four thousand dollars at his age and 533 00:23:59,760 --> 00:24:02,440 Speaker 1: then and for instance, if he never invested again, he 534 00:24:02,480 --> 00:24:05,080 Speaker 1: would have over a hundred and fifteen thousand dollars by 535 00:24:05,119 --> 00:24:07,960 Speaker 1: age sixty five, just from that one summer job. Just 536 00:24:08,040 --> 00:24:10,800 Speaker 1: from that one summer This is the perfect chance to 537 00:24:10,840 --> 00:24:13,199 Speaker 1: get him excited about seeing his money grow, for him 538 00:24:13,200 --> 00:24:15,919 Speaker 1: to understand the power of compounding interest. That may not 539 00:24:16,040 --> 00:24:18,680 Speaker 1: be something that you're young teenager wouldn'tnaturally get excited about. 540 00:24:18,680 --> 00:24:20,480 Speaker 1: But if you're able to crunch the numbers like that 541 00:24:20,560 --> 00:24:22,879 Speaker 1: and they're able to see that like, wow, that's you know, 542 00:24:22,920 --> 00:24:24,440 Speaker 1: I would end up with a lot of money down 543 00:24:24,440 --> 00:24:26,919 Speaker 1: the road if I were to invest it, then that 544 00:24:26,960 --> 00:24:29,120 Speaker 1: could be something that you get him excited about. Yeah, 545 00:24:29,119 --> 00:24:31,200 Speaker 1: the tax thing super easy, The roth Ira a thing 546 00:24:31,359 --> 00:24:34,360 Speaker 1: might take a little more finagling with, especially if your 547 00:24:34,359 --> 00:24:37,240 Speaker 1: team likes to spend, and it's like literally getting this 548 00:24:37,320 --> 00:24:39,399 Speaker 1: job so I can spend, but like when they see 549 00:24:39,560 --> 00:24:42,560 Speaker 1: that number held up, like, hey, if you don't spend 550 00:24:42,640 --> 00:24:44,560 Speaker 1: all the money that you made, you know, I'll help 551 00:24:44,560 --> 00:24:47,640 Speaker 1: you out. And by investing, you're gonna have wait, wait, wait, wait, 552 00:24:47,720 --> 00:24:50,000 Speaker 1: way more money down the line. It could really kick 553 00:24:50,040 --> 00:24:53,159 Speaker 1: off a lifelong passion for you know, saving and investing, 554 00:24:53,160 --> 00:24:55,480 Speaker 1: which would be really cool. And you know, earning that 555 00:24:55,560 --> 00:24:57,560 Speaker 1: income from a summer job is really a perfect time 556 00:24:57,600 --> 00:24:59,879 Speaker 1: to kind of start having some of these more serious 557 00:24:59,880 --> 00:25:02,480 Speaker 1: to discussions on those topics. But Matt, let's get to 558 00:25:02,560 --> 00:25:06,760 Speaker 1: a couple more questions, including one about investing for an 559 00:25:06,800 --> 00:25:09,040 Speaker 1: ad BT baby. We'll get to that and more right 560 00:25:09,080 --> 00:25:20,600 Speaker 1: after this break. M All right, Joel, yet again, we 561 00:25:20,600 --> 00:25:22,760 Speaker 1: are back and we're taking listener questions. And let's hear 562 00:25:22,760 --> 00:25:25,679 Speaker 1: now from a listener who wants to know if he 563 00:25:25,720 --> 00:25:31,240 Speaker 1: can substitute his emergency fund with a high limit credit card. Hello, 564 00:25:31,359 --> 00:25:34,320 Speaker 1: this is Walter from Maryland. I've just reached my six 565 00:25:34,320 --> 00:25:37,960 Speaker 1: months of savings and I was wondering should I keep 566 00:25:37,960 --> 00:25:39,440 Speaker 1: that in my savings account or should I move that 567 00:25:39,480 --> 00:25:41,280 Speaker 1: to a mutual fund because I also have a credit 568 00:25:41,280 --> 00:25:44,199 Speaker 1: card with a limit of twenty two thousand, and my 569 00:25:44,240 --> 00:25:47,399 Speaker 1: six months of saving is about fifteen thousand, So I 570 00:25:47,480 --> 00:25:49,639 Speaker 1: was thinking if I ever had anything emergency come up, 571 00:25:49,640 --> 00:25:51,920 Speaker 1: I could put it on the credit card and then 572 00:25:51,960 --> 00:25:53,520 Speaker 1: pull the money out of the mutual fund to pay 573 00:25:53,520 --> 00:25:56,320 Speaker 1: it off within the time frame I've given. All Right, 574 00:25:56,359 --> 00:25:58,680 Speaker 1: Matt Walter already doing a great job when it comes 575 00:25:58,680 --> 00:26:01,440 Speaker 1: to emergency funds. Uh, It's tough for a lot of 576 00:26:01,480 --> 00:26:04,200 Speaker 1: people to get to that six months savings point, and 577 00:26:04,480 --> 00:26:07,159 Speaker 1: Walter's there, so big kudos to him. But he's got 578 00:26:07,200 --> 00:26:09,160 Speaker 1: an interesting question, and I feel like, you know, there's 579 00:26:09,160 --> 00:26:11,120 Speaker 1: a there's a lot we can really elaborate on when 580 00:26:11,119 --> 00:26:14,040 Speaker 1: it comes to emergency funds. So yeah, let's dig a 581 00:26:14,119 --> 00:26:16,639 Speaker 1: little bit deeper here for a second. On the funds. 582 00:26:17,359 --> 00:26:19,040 Speaker 1: I know it can be tough to have that much money, 583 00:26:19,119 --> 00:26:22,320 Speaker 1: especially right now in savings earning almost nothing. You know, 584 00:26:22,320 --> 00:26:24,400 Speaker 1: we we kind of talked about that a little bit 585 00:26:24,440 --> 00:26:27,520 Speaker 1: earlier on in the episode. But it's only natural to 586 00:26:27,600 --> 00:26:29,879 Speaker 1: want to look for a higher rate of return, especially 587 00:26:29,920 --> 00:26:32,479 Speaker 1: when you've got fifteen dollars sitting there and you're like, 588 00:26:32,720 --> 00:26:36,680 Speaker 1: it's earning nothing. That's tough to stomach. The problem, though, 589 00:26:36,760 --> 00:26:39,359 Speaker 1: is that investing money that's supposed to help you in 590 00:26:39,400 --> 00:26:42,000 Speaker 1: the event of an emergency, it could really hurt you 591 00:26:42,119 --> 00:26:45,280 Speaker 1: down the road, right that. That's because your emergency might 592 00:26:45,359 --> 00:26:48,560 Speaker 1: happen at an inopportune time in the market. Let's say 593 00:26:48,600 --> 00:26:51,000 Speaker 1: our economy goes through a recession and you get laid 594 00:26:51,000 --> 00:26:54,000 Speaker 1: off in the middle of a recession when the markets down, 595 00:26:54,040 --> 00:26:56,440 Speaker 1: it's like this double whammy to pull money out from 596 00:26:56,440 --> 00:26:59,399 Speaker 1: your investments that are also suffering at the time, and 597 00:26:59,400 --> 00:27:02,200 Speaker 1: then baking in those losses. Essentially, you don't want your 598 00:27:02,240 --> 00:27:05,520 Speaker 1: emergency fund necessarily tied to the stock market. It's just 599 00:27:05,560 --> 00:27:08,240 Speaker 1: too risky. Yeah. Basically, we're asking folks to imagine a 600 00:27:08,280 --> 00:27:11,920 Speaker 1: scenario like March. We saw both of these things happened 601 00:27:11,960 --> 00:27:13,760 Speaker 1: to a lot of folks. The market tanks and a 602 00:27:13,800 --> 00:27:15,159 Speaker 1: lot of folks lost their job. If you need that 603 00:27:15,200 --> 00:27:17,720 Speaker 1: money and it's like down, that's a tough time to 604 00:27:17,760 --> 00:27:20,040 Speaker 1: pull it out. So yeah, yeah, And so Walter, you 605 00:27:20,040 --> 00:27:21,760 Speaker 1: know you're asking about your credit card. You're asking if 606 00:27:21,760 --> 00:27:25,240 Speaker 1: a credit card could work well in an emergency situation. Uh, 607 00:27:25,240 --> 00:27:26,879 Speaker 1: and you know, the way you're asking it, Like, we 608 00:27:26,920 --> 00:27:29,040 Speaker 1: don't think that that's the case. Uh. We we think 609 00:27:29,040 --> 00:27:31,879 Speaker 1: that credit cards are great for putting your general spending 610 00:27:31,920 --> 00:27:34,160 Speaker 1: on every single month if you pay your card off 611 00:27:34,200 --> 00:27:36,119 Speaker 1: in full before the due date. But I don't like 612 00:27:36,160 --> 00:27:38,399 Speaker 1: the idea of investing so much of your money that 613 00:27:38,480 --> 00:27:42,359 Speaker 1: the credit card is functioning essentially as your emergency fund. Basically, like, 614 00:27:42,440 --> 00:27:45,960 Speaker 1: unless you have some unstoppable recurring income, and you know 615 00:27:46,000 --> 00:27:49,560 Speaker 1: most people don't, you need to have actual cash. You 616 00:27:49,560 --> 00:27:52,040 Speaker 1: need to have actual money in the bank that's liquid, 617 00:27:52,280 --> 00:27:54,120 Speaker 1: just in case you lose your job and you're out 618 00:27:54,119 --> 00:27:56,080 Speaker 1: of work for a while. In that instance, you know, 619 00:27:56,119 --> 00:27:57,480 Speaker 1: your credit card is not going to be a good 620 00:27:57,480 --> 00:28:00,840 Speaker 1: backup system if that happens, because if the emergency last 621 00:28:00,880 --> 00:28:03,320 Speaker 1: long enough, you'll be racking up high interest rate debt 622 00:28:03,320 --> 00:28:05,440 Speaker 1: that's gonna you know, put you in an even worse 623 00:28:05,520 --> 00:28:07,600 Speaker 1: position over time. And so, you know, we feel that 624 00:28:07,600 --> 00:28:10,240 Speaker 1: credit cards are are a great tool for your expenses. 625 00:28:10,400 --> 00:28:13,320 Speaker 1: They're great for those actual transactions, but they shouldn't be, 626 00:28:13,560 --> 00:28:16,080 Speaker 1: you know, the main source of your funds. You shouldn't 627 00:28:16,080 --> 00:28:18,240 Speaker 1: be counting on it instead of actual money that you 628 00:28:18,280 --> 00:28:20,480 Speaker 1: have in the bank. You can definitely end up in 629 00:28:20,560 --> 00:28:23,159 Speaker 1: a financial pickle if you're relying on credit cards as 630 00:28:23,200 --> 00:28:26,600 Speaker 1: an emergency fund. And yeah, I guess that brings up 631 00:28:26,600 --> 00:28:29,800 Speaker 1: the question, Matt, are there ever any alternative spots where 632 00:28:29,800 --> 00:28:32,600 Speaker 1: you can place any fund besides just to save us account? 633 00:28:32,840 --> 00:28:35,639 Speaker 1: You know, where you're earning next to nothing on your money, 634 00:28:35,920 --> 00:28:38,719 Speaker 1: And I think the answer to that is yes, with 635 00:28:38,760 --> 00:28:42,680 Speaker 1: a huge caveat, usually only after a decade or more 636 00:28:42,720 --> 00:28:45,680 Speaker 1: of maxing outs your retirement vehicles, like let's say a 637 00:28:45,760 --> 00:28:49,400 Speaker 1: roth IRA. If you've been investing that diligently, you can't 638 00:28:49,400 --> 00:28:52,160 Speaker 1: afford to have a little bit less, like maybe only 639 00:28:52,200 --> 00:28:55,280 Speaker 1: just three months worth of expenses sitting in the bank 640 00:28:55,320 --> 00:28:58,600 Speaker 1: instead of six months or more, which is ideal. And 641 00:28:58,640 --> 00:29:01,600 Speaker 1: that's because your WRATH can now function as the backup 642 00:29:01,640 --> 00:29:04,640 Speaker 1: to the backup. Right, So you have this smaller emergency 643 00:29:04,640 --> 00:29:08,080 Speaker 1: fund in savings and you have this ridiculously large emergency 644 00:29:08,120 --> 00:29:10,920 Speaker 1: fund that is your roth I right. Again, of course 645 00:29:10,920 --> 00:29:13,280 Speaker 1: it sneaks to have to take money out if the 646 00:29:13,320 --> 00:29:16,160 Speaker 1: market is hurting. But but if you've been that diligent 647 00:29:16,200 --> 00:29:19,400 Speaker 1: to save and invest for ten years or more, having 648 00:29:19,440 --> 00:29:21,680 Speaker 1: a little less in an actual savings account, I think 649 00:29:21,720 --> 00:29:23,520 Speaker 1: It's one of those measured risks that a lot of 650 00:29:23,520 --> 00:29:26,680 Speaker 1: people can feel comfortable taking. So Walter, once you hit 651 00:29:26,720 --> 00:29:29,120 Speaker 1: that point, we're okay with you investing at least a 652 00:29:29,120 --> 00:29:31,400 Speaker 1: little bit more of that. But for for the time being, 653 00:29:31,760 --> 00:29:35,240 Speaker 1: a credit card is a terrible alternative to an emergency fund, 654 00:29:35,240 --> 00:29:37,600 Speaker 1: and yeah, we're just not comfortable with you taking that risk. 655 00:29:37,720 --> 00:29:39,800 Speaker 1: All right, let's get to the next question. This one 656 00:29:39,800 --> 00:29:42,080 Speaker 1: comes from a listener who really wills to help his 657 00:29:42,200 --> 00:29:46,160 Speaker 1: son learned about investing, but the kids really really young. Hey, 658 00:29:46,240 --> 00:29:48,760 Speaker 1: Joel and Matt, thanks for taking my question. My name's 659 00:29:48,800 --> 00:29:51,520 Speaker 1: Paul and I'm from Seattle. My question is regards to 660 00:29:51,960 --> 00:29:54,320 Speaker 1: investing for your kids. I've got a two year old 661 00:29:54,720 --> 00:29:56,760 Speaker 1: and I'd like to set up some kind of investment 662 00:29:56,760 --> 00:29:59,920 Speaker 1: account for him. I'm not sure which kind, though, which 663 00:30:00,080 --> 00:30:04,120 Speaker 1: is why I'm reaching out. I've heard of custodio, brokerage accounts, trusts, 664 00:30:04,120 --> 00:30:06,080 Speaker 1: as well as a few other things, but i don't 665 00:30:06,120 --> 00:30:09,440 Speaker 1: know what the best long term option would be, as 666 00:30:09,480 --> 00:30:12,320 Speaker 1: well as which one would have the best tax benefits 667 00:30:12,400 --> 00:30:15,520 Speaker 1: now and for the future. I'd like to build an 668 00:30:15,520 --> 00:30:18,520 Speaker 1: account for my son with low costs, index funds and 669 00:30:18,920 --> 00:30:21,080 Speaker 1: or e T s and as he gets older, include 670 00:30:21,160 --> 00:30:24,240 Speaker 1: him in the decision making process, and eventually when he's 671 00:30:24,240 --> 00:30:26,720 Speaker 1: an adult, to give him control of the account. I'd 672 00:30:26,760 --> 00:30:29,080 Speaker 1: be creating this account with my own money, and then 673 00:30:29,080 --> 00:30:31,280 Speaker 1: as time goes on and my son earns his own money, 674 00:30:31,640 --> 00:30:34,280 Speaker 1: transition to teaching him how to manage and invest his 675 00:30:34,320 --> 00:30:36,920 Speaker 1: own money. I want to teach him the importance of 676 00:30:36,960 --> 00:30:39,680 Speaker 1: investing for your future and inspire him to become financially 677 00:30:39,760 --> 00:30:43,240 Speaker 1: literate and an informed investor. I figured with compound interest, 678 00:30:43,280 --> 00:30:47,600 Speaker 1: the earlier the better to set him up for financial freedom. Also, 679 00:30:47,920 --> 00:30:50,240 Speaker 1: you all need to check out Holy Mountain Brewing in Seattle. 680 00:30:50,440 --> 00:30:54,000 Speaker 1: They are the bees Knees. Oh, Paul, thanks for that 681 00:30:54,080 --> 00:30:57,680 Speaker 1: beer recommendation. And yes, we we've heard great things about 682 00:30:57,680 --> 00:31:00,719 Speaker 1: Holy Mountain. I looked him up on TAPS a crush 683 00:31:01,640 --> 00:31:03,760 Speaker 1: on there, and so folks have a lot of good 684 00:31:03,800 --> 00:31:07,800 Speaker 1: things to say or rate about their beers. Uh, we 685 00:31:07,840 --> 00:31:09,440 Speaker 1: gotta get our hands on on some of that soon. 686 00:31:09,720 --> 00:31:13,000 Speaker 1: But you're asking about investing for your kid, right, and 687 00:31:13,040 --> 00:31:15,000 Speaker 1: so you know it's starting to do that at a 688 00:31:15,000 --> 00:31:18,040 Speaker 1: young age. Can can help him build some massive amounts 689 00:31:18,080 --> 00:31:20,280 Speaker 1: of wealth. But really, you know, like you said, this 690 00:31:20,360 --> 00:31:22,280 Speaker 1: is mostly about You know, it sounds like this is 691 00:31:22,320 --> 00:31:24,960 Speaker 1: mostly about teaching your son about investing and handling his 692 00:31:25,000 --> 00:31:28,080 Speaker 1: money well, being financially literate. And yeah, what better way 693 00:31:28,200 --> 00:31:30,880 Speaker 1: than to have money that is actually his chart the 694 00:31:30,880 --> 00:31:33,120 Speaker 1: progress together, you know, over the next fifteen years and more. 695 00:31:33,480 --> 00:31:34,920 Speaker 1: That could be a great way for you to impart 696 00:31:34,960 --> 00:31:37,920 Speaker 1: these lessons upon him before he goes out on his own. Yeah, 697 00:31:38,040 --> 00:31:39,640 Speaker 1: and he's not even close to going out on his 698 00:31:39,640 --> 00:31:41,600 Speaker 1: own yet. Man, He's got a lot of years onto 699 00:31:41,640 --> 00:31:43,480 Speaker 1: that roof. But um, yeah, let's talk about a couple 700 00:31:43,480 --> 00:31:45,840 Speaker 1: of things that Paul needs to think about right now. 701 00:31:46,080 --> 00:31:48,200 Speaker 1: You know, while he's making some of these decisions. The 702 00:31:48,320 --> 00:31:50,360 Speaker 1: more money, Paul that your son has in his name, 703 00:31:50,840 --> 00:31:52,600 Speaker 1: just know that it can hurt him when it comes 704 00:31:52,640 --> 00:31:56,400 Speaker 1: to getting financial aid for college. So for his ability 705 00:31:56,480 --> 00:31:58,920 Speaker 1: to go to college in the future and not get 706 00:31:58,960 --> 00:32:01,240 Speaker 1: completely shut out from some of the aid that he 707 00:32:01,320 --> 00:32:03,520 Speaker 1: might otherwise be able to get, it might make more 708 00:32:03,600 --> 00:32:06,600 Speaker 1: sense to invest in your own retirement accounts and then 709 00:32:06,600 --> 00:32:09,920 Speaker 1: watch those grow together. The roth IRA in particular is 710 00:32:10,000 --> 00:32:13,520 Speaker 1: great because you can withdraw some of those contributions for 711 00:32:13,640 --> 00:32:16,360 Speaker 1: him before you reach retirement age, so you can be 712 00:32:16,400 --> 00:32:19,040 Speaker 1: saving money in your own account that you're actually intending 713 00:32:19,120 --> 00:32:21,920 Speaker 1: to spend for him and for his education. So that's 714 00:32:21,960 --> 00:32:24,320 Speaker 1: one thing to think about. But if you're already maxing 715 00:32:24,320 --> 00:32:26,560 Speaker 1: that out and it's likely that your son is going 716 00:32:26,600 --> 00:32:30,120 Speaker 1: to go to college someday, plan is probably the next 717 00:32:30,160 --> 00:32:32,560 Speaker 1: best step, right, that money is going to be in 718 00:32:32,640 --> 00:32:35,360 Speaker 1: his name, and it's got this specific purpose for it. 719 00:32:35,520 --> 00:32:37,600 Speaker 1: You know, my daughter and I were following the progress 720 00:32:37,680 --> 00:32:39,440 Speaker 1: of a little bit of money I invested for her 721 00:32:39,480 --> 00:32:42,640 Speaker 1: college literally just started at the end of last year. 722 00:32:42,760 --> 00:32:44,120 Speaker 1: Probably not going to do a whole lot, but it's 723 00:32:44,160 --> 00:32:45,960 Speaker 1: cool to see, right, It's a really fun way to 724 00:32:46,000 --> 00:32:48,440 Speaker 1: follow along with her, to see how that money is invested. 725 00:32:48,480 --> 00:32:50,760 Speaker 1: It's got her name on the account um and just 726 00:32:50,800 --> 00:32:54,000 Speaker 1: showing her how quickly it can grow has already kind 727 00:32:54,000 --> 00:32:55,920 Speaker 1: of got her mind churning, which is was a lot 728 00:32:55,920 --> 00:32:57,600 Speaker 1: of fun to see. Yeah, and so Paul, for you 729 00:32:57,720 --> 00:33:00,600 Speaker 1: the Washington State Dream a head fives twenty nine plan. 730 00:33:00,680 --> 00:33:04,320 Speaker 1: It's a pretty good one with reasonable fees and investment options. 731 00:33:04,600 --> 00:33:07,040 Speaker 1: But we, you know, we believe that parents should prioritize 732 00:33:07,080 --> 00:33:10,560 Speaker 1: investing for their own financial future more highly than their 733 00:33:10,640 --> 00:33:14,000 Speaker 1: kids college savings. It really is like putting on your 734 00:33:14,000 --> 00:33:16,520 Speaker 1: own oxygen masks before putting on your kids on an airplane. 735 00:33:16,520 --> 00:33:18,680 Speaker 1: They always talk about that, you know, in the little 736 00:33:18,800 --> 00:33:20,520 Speaker 1: tutorial at the beginning of the flight, that no one 737 00:33:20,560 --> 00:33:23,760 Speaker 1: ever pays attention to uh, And so we don't rent 738 00:33:24,000 --> 00:33:25,880 Speaker 1: paid The videos a little bit better in recent years, 739 00:33:25,640 --> 00:33:26,880 Speaker 1: and it used to be just the thing you had 740 00:33:26,920 --> 00:33:28,360 Speaker 1: to pull out of the sea pocket in front of 741 00:33:28,360 --> 00:33:29,720 Speaker 1: you and you're like, oh, I'm not gonna breade this. 742 00:33:29,880 --> 00:33:31,560 Speaker 1: Their lines now, I mean they make it fun, you know, 743 00:33:31,600 --> 00:33:34,800 Speaker 1: like it's it's kind of a joke and folks understand that, 744 00:33:34,840 --> 00:33:36,960 Speaker 1: and so like how else can you get people's attention 745 00:33:37,040 --> 00:33:40,040 Speaker 1: making it interesting, funny, entertaining. But again, you know, we 746 00:33:40,040 --> 00:33:42,760 Speaker 1: don't recommend investing anything for your kids teacher until you 747 00:33:42,800 --> 00:33:46,040 Speaker 1: at least hit money gear number seven. We actually talked 748 00:33:46,160 --> 00:33:49,840 Speaker 1: more in depth about this on last Wednesday's episode. That 749 00:33:49,920 --> 00:33:53,200 Speaker 1: was the episode titled Saving for College is Overrated because 750 00:33:53,240 --> 00:33:54,880 Speaker 1: for a lot of people, we do think that they 751 00:33:54,920 --> 00:33:58,080 Speaker 1: have their their money priorities all out of whack yeap, 752 00:33:58,200 --> 00:34:00,280 Speaker 1: doing something that seems like a good financial a move, 753 00:34:00,440 --> 00:34:03,040 Speaker 1: but doing it at the wrong time before you've really 754 00:34:03,080 --> 00:34:05,560 Speaker 1: appropriately done some of those taking some of those other 755 00:34:05,880 --> 00:34:09,360 Speaker 1: steps when it comes to saving and investing for yourself 756 00:34:09,400 --> 00:34:12,280 Speaker 1: in your own future, it can make something good actually 757 00:34:12,280 --> 00:34:14,160 Speaker 1: turned into something bad. So we don't we don't want 758 00:34:14,160 --> 00:34:16,239 Speaker 1: that to happen to you, Paul. But yeah, if you're there, 759 00:34:16,239 --> 00:34:19,239 Speaker 1: if you're at money gear number seven and a plan 760 00:34:19,400 --> 00:34:23,319 Speaker 1: feels let's say, too confining because college isn't assure bet, well, 761 00:34:23,440 --> 00:34:26,200 Speaker 1: you can then open a custodial account. This allows you 762 00:34:26,239 --> 00:34:29,279 Speaker 1: to be the holder of your son's investments until he 763 00:34:29,320 --> 00:34:32,239 Speaker 1: turns AG eighteen, which is the age of majority in 764 00:34:32,320 --> 00:34:35,080 Speaker 1: your state. But again, just know that the money in 765 00:34:35,200 --> 00:34:36,759 Speaker 1: one of those accounts is going to make it harder 766 00:34:36,840 --> 00:34:39,560 Speaker 1: for him to receive financial aid for college. That money 767 00:34:39,640 --> 00:34:42,480 Speaker 1: essentially acts as this big red flag. When colleges are 768 00:34:42,480 --> 00:34:44,960 Speaker 1: deciding which students to offer money to, they're like, oh, 769 00:34:45,000 --> 00:34:47,080 Speaker 1: you know what, Paul's kid, he's already got you know, 770 00:34:47,239 --> 00:34:51,280 Speaker 1: fifty dollars in investments. Those kids don't have that, right exactly, 771 00:34:51,320 --> 00:34:53,560 Speaker 1: Most other kids his age don't have that, and so 772 00:34:53,719 --> 00:34:56,000 Speaker 1: he's likely not going to get nearly as nice of 773 00:34:56,000 --> 00:34:58,920 Speaker 1: a financial aid package and so um, and so that 774 00:34:58,920 --> 00:35:01,840 Speaker 1: can be to his detriment. So from a building wealth 775 00:35:01,840 --> 00:35:04,239 Speaker 1: for his future standpoint, it's nice to do that, but 776 00:35:04,280 --> 00:35:06,280 Speaker 1: it can hurt him when it comes to getting free 777 00:35:06,280 --> 00:35:09,160 Speaker 1: money for college. Yeah, that's right. And uh, and Paul, 778 00:35:09,400 --> 00:35:11,759 Speaker 1: you mentioned trusts as well, which could be like that 779 00:35:11,840 --> 00:35:14,440 Speaker 1: might be a better option since it gives you more control, 780 00:35:14,600 --> 00:35:17,239 Speaker 1: right and and rules as to you know, what the 781 00:35:17,280 --> 00:35:19,600 Speaker 1: money that has set aside, what that is allowed to 782 00:35:19,600 --> 00:35:22,440 Speaker 1: be used for. And so for instance, with a custodial account, 783 00:35:22,440 --> 00:35:25,120 Speaker 1: one of the downsides is that once he's of age, 784 00:35:25,160 --> 00:35:26,799 Speaker 1: he can use that money for whatever he wants, Like 785 00:35:26,800 --> 00:35:29,160 Speaker 1: he could use that to buy like a lambo. But 786 00:35:29,280 --> 00:35:32,319 Speaker 1: with a trust, uh, you could make a rule maybe 787 00:35:32,360 --> 00:35:36,279 Speaker 1: that says no exotic cars. Right. But the downside though 788 00:35:36,320 --> 00:35:39,600 Speaker 1: to to trust is that it can be expensive, It 789 00:35:39,640 --> 00:35:41,680 Speaker 1: can be more of a hassle to set up. But 790 00:35:41,880 --> 00:35:44,200 Speaker 1: if we're talking about the potential for you know, a 791 00:35:44,239 --> 00:35:46,120 Speaker 1: ton of money, if we're talking big money here, a 792 00:35:46,200 --> 00:35:49,480 Speaker 1: trust might be a great option for you. However, if 793 00:35:49,520 --> 00:35:51,279 Speaker 1: your main goal really is just to make sure that 794 00:35:51,320 --> 00:35:54,160 Speaker 1: you're teaching your son the basics of financial literacy to 795 00:35:54,200 --> 00:35:56,640 Speaker 1: make sure that he understands investing, then you know, you 796 00:35:56,640 --> 00:36:00,000 Speaker 1: don't even have to use any special accounts or investment vehicle. 797 00:36:00,640 --> 00:36:02,640 Speaker 1: You can even just set up a simple account via 798 00:36:02,719 --> 00:36:04,880 Speaker 1: a company uh that that were fans of, like go 799 00:36:05,080 --> 00:36:08,160 Speaker 1: Henry that caters to accounts for kids. Uh. And so 800 00:36:08,200 --> 00:36:10,360 Speaker 1: in this case, it's linked to your own go Henry 801 00:36:10,400 --> 00:36:12,520 Speaker 1: parent account. And dude, you know what I started to 802 00:36:12,520 --> 00:36:14,719 Speaker 1: do recently with my oldest in order to teach her 803 00:36:14,719 --> 00:36:17,960 Speaker 1: about investing in compounding interest is that I've been paying 804 00:36:17,960 --> 00:36:21,719 Speaker 1: her a weekly interest payment from me on any money 805 00:36:21,760 --> 00:36:24,680 Speaker 1: that remains in her account that she doesn't spend. I 806 00:36:24,719 --> 00:36:26,440 Speaker 1: found that, you know, when kids are still pretty young, 807 00:36:26,440 --> 00:36:29,319 Speaker 1: it doesn't take much money for them to get it with. 808 00:36:29,320 --> 00:36:32,200 Speaker 1: With her, it is totally clicked, which is really exciting, 809 00:36:32,239 --> 00:36:34,200 Speaker 1: you know, for her to understand that, like, oh wow, 810 00:36:34,440 --> 00:36:36,480 Speaker 1: by leaving this money, like by keeping it here and 811 00:36:36,840 --> 00:36:39,239 Speaker 1: you know, obviously it's not invested, it's just sitting there, 812 00:36:39,560 --> 00:36:42,200 Speaker 1: but she earns interests from me, and so she knows 813 00:36:42,320 --> 00:36:45,279 Speaker 1: that she's rewarded by quote unquote investing that money. And 814 00:36:45,280 --> 00:36:47,360 Speaker 1: so I found that that's a simple way to introduce 815 00:36:47,520 --> 00:36:51,120 Speaker 1: the concept of investing and compounding interest to her without 816 00:36:51,239 --> 00:36:53,680 Speaker 1: over complicating it with some of these other accounts. Yeah, 817 00:36:53,719 --> 00:36:55,239 Speaker 1: so it just depends on what your goal is. Are 818 00:36:55,239 --> 00:36:57,120 Speaker 1: you trying to teach, are you trying to actually grow wealth? 819 00:36:57,360 --> 00:36:59,440 Speaker 1: And if so, yeah, that there's a bunch of different 820 00:36:59,560 --> 00:37:01,839 Speaker 1: things you need to consider when you're figuring out which 821 00:37:01,920 --> 00:37:04,400 Speaker 1: vehicle you're gonna take in order to grow wealth for 822 00:37:04,480 --> 00:37:06,719 Speaker 1: your son. And the biggest downside is doing it in 823 00:37:06,719 --> 00:37:09,040 Speaker 1: the wrong way can mess up any of that free 824 00:37:09,040 --> 00:37:11,120 Speaker 1: money that you can get when it comes to, yeah, 825 00:37:11,320 --> 00:37:14,040 Speaker 1: applying for for colleges. Alright, let's get back to the 826 00:37:14,280 --> 00:37:16,640 Speaker 1: beverage that we had on this episode. Were you almost 827 00:37:16,680 --> 00:37:18,759 Speaker 1: gonna say beer? I was gonna say day it every week? 828 00:37:19,080 --> 00:37:21,320 Speaker 1: I know, right, Yeah, it's different to not be drinking 829 00:37:21,320 --> 00:37:24,759 Speaker 1: in actual beer. But this is a peach seltzer that 830 00:37:24,800 --> 00:37:27,480 Speaker 1: our buddy Jests, neighbor down the street, brought up in 831 00:37:27,480 --> 00:37:30,400 Speaker 1: his garage. He generously shared some with us. Yeah, what 832 00:37:30,440 --> 00:37:32,040 Speaker 1: were your thoughts, man, because you know, I don't know 833 00:37:32,080 --> 00:37:34,399 Speaker 1: if we've ever had a seltzer on the show, even 834 00:37:34,440 --> 00:37:36,120 Speaker 1: though they're all all the rage of these days. Seltzers 835 00:37:36,160 --> 00:37:38,000 Speaker 1: are good, but this is literally the first time IVE 836 00:37:38,000 --> 00:37:41,480 Speaker 1: ever had a homebrew seltzer before. I feel like they've 837 00:37:41,520 --> 00:37:44,200 Speaker 1: kind of gained in popularity in the recent years. There's 838 00:37:44,560 --> 00:37:47,440 Speaker 1: a favorite brewery of ours locally, they're making really good 839 00:37:47,480 --> 00:37:51,560 Speaker 1: handcrafted seltzers, you know, using uh like fresh ingredients that 840 00:37:51,680 --> 00:37:54,600 Speaker 1: kind of thing. But this is a really good seltzer. Man. 841 00:37:54,680 --> 00:37:57,160 Speaker 1: It's like I want to describe how it poored because normally, 842 00:37:57,160 --> 00:37:59,000 Speaker 1: like I'll say, like how it looks in the glass, 843 00:37:59,280 --> 00:38:02,200 Speaker 1: but it's just got this kind of fresh pale looking 844 00:38:02,320 --> 00:38:04,600 Speaker 1: like almost like pearl color. Right, There's there's a very 845 00:38:04,600 --> 00:38:06,880 Speaker 1: little color to it, and in turn, it's it's a 846 00:38:06,880 --> 00:38:09,719 Speaker 1: really clean drinking seltzer. I mean, I guess I don't know, 847 00:38:09,719 --> 00:38:12,440 Speaker 1: maybe all seltzers are clean drinking and there's not a 848 00:38:12,440 --> 00:38:15,120 Speaker 1: whole lot of body to it, but this was really 849 00:38:15,120 --> 00:38:17,840 Speaker 1: a refreshing. Man, It's quite a lovely beverage to enjoy 850 00:38:17,960 --> 00:38:19,919 Speaker 1: here while we're recording this episode. What were your thoughts 851 00:38:19,960 --> 00:38:21,640 Speaker 1: on it? Yeah, man, I thought it was like light 852 00:38:21,680 --> 00:38:23,799 Speaker 1: and refreshing. I thought maybe it could have used a 853 00:38:23,840 --> 00:38:26,160 Speaker 1: little more on the on the bubble side, but really, yeah, 854 00:38:26,239 --> 00:38:28,440 Speaker 1: but I actually kind of liked actually how it had 855 00:38:28,480 --> 00:38:30,800 Speaker 1: these faint peach notes and it wasn't it was actually 856 00:38:30,800 --> 00:38:34,000 Speaker 1: perfect amount of Yeah. Yeah, so yeah, I feel like 857 00:38:34,160 --> 00:38:37,160 Speaker 1: this is like probably especially my wife would dig this. 858 00:38:37,440 --> 00:38:39,640 Speaker 1: I feel like it's like the perfect front porch summer 859 00:38:39,719 --> 00:38:42,080 Speaker 1: beverage for for a lot of folks. And yeah, I 860 00:38:42,080 --> 00:38:43,560 Speaker 1: will say this is not going to get me going 861 00:38:43,560 --> 00:38:45,920 Speaker 1: down the Seltzer bandwagon like everybody else. I'm still a 862 00:38:45,920 --> 00:38:48,920 Speaker 1: craft beer nerd um. But yeah, this was enjoyable and 863 00:38:49,000 --> 00:38:50,879 Speaker 1: nice to kind of switch things up. That's right, man. 864 00:38:50,920 --> 00:38:53,120 Speaker 1: We we can enjoy all the different types of beverages 865 00:38:53,160 --> 00:38:55,360 Speaker 1: out there, but we're still craft beer to the core. 866 00:38:55,600 --> 00:38:58,800 Speaker 1: That's beverage of choice for sure. And thanks again to 867 00:38:58,840 --> 00:39:00,879 Speaker 1: our friend Jess for donating this one to the show. 868 00:39:00,960 --> 00:39:03,280 Speaker 1: But Joel, that's gonna be it for this episode. Listeners 869 00:39:03,280 --> 00:39:04,960 Speaker 1: can find our show notes up on the website at 870 00:39:05,000 --> 00:39:07,480 Speaker 1: how to money dot com. Yeah, and if you've got 871 00:39:07,600 --> 00:39:10,240 Speaker 1: a question that you'd like for Matt and Night a tackle, 872 00:39:10,280 --> 00:39:11,840 Speaker 1: we would love to hear it. I gotta say we 873 00:39:11,840 --> 00:39:14,000 Speaker 1: get a lot of investing questions. We love investing. But 874 00:39:14,040 --> 00:39:15,879 Speaker 1: if you've got any question out there, like if you're 875 00:39:15,880 --> 00:39:18,080 Speaker 1: like should I marry this guy? Or like should I 876 00:39:18,080 --> 00:39:20,200 Speaker 1: get a pet? Or like should I go to the 877 00:39:20,239 --> 00:39:23,000 Speaker 1: beach this summer, like, we're down with whatever sort of 878 00:39:23,040 --> 00:39:25,560 Speaker 1: like money livestyle questions you've got. We'll tackle anything. I 879 00:39:25,600 --> 00:39:28,040 Speaker 1: don't know about to marry this guy question, but I'll 880 00:39:28,080 --> 00:39:31,200 Speaker 1: come on. Things to say about about pets, the costs 881 00:39:31,200 --> 00:39:33,319 Speaker 1: associated with that. There you go. Yeah, we're down for 882 00:39:33,400 --> 00:39:36,040 Speaker 1: really the gamut of financial questions that people have for us. Right, 883 00:39:36,120 --> 00:39:37,920 Speaker 1: that's right. Well, that's gonna be it for this episode, Joel. 884 00:39:37,960 --> 00:39:41,000 Speaker 1: Until next time, best Friends Out, Best Friends Out,