WEBVTT - Friday Flight - Passive Income Plans, Paying Points, & Rewards Rug Pull #807 0:00:00.080 --> 0:00:03.080 Welcome to Had the Money. I'm Joel and I am Matt. 0:00:03.200 --> 0:00:07.240 Today we're talking passive income plans, paying points and rewards 0:00:07.320 --> 0:00:07.880 RUG polls. 0:00:27.320 --> 0:00:30.479 That's right. And when you say reward rug pole, what 0:00:30.480 --> 0:00:33.320 we're referring to here are credit card rewards and so 0:00:33.600 --> 0:00:36.000 on that note, I think we'll get to talking about 0:00:36.080 --> 0:00:39.279 Robin hood Golds. That's actually one I'm excited about personally. 0:00:39.400 --> 0:00:42.560 Am I getting too extreme with the alliteration on Friday Flights? 0:00:42.600 --> 0:00:44.920 Man? No, okay, it's something for them to lash onto. 0:00:45.000 --> 0:00:47.600 J want another P followed by followed by P, Like 0:00:47.640 --> 0:00:49.600 I just I don't know why I'm obsessed with that 0:00:49.640 --> 0:00:52.360 sort of way of naming our Friday flight episode. 0:00:52.400 --> 0:00:54.800 It just flows, man. Before we get to the actual story, Zoe, 0:00:54.880 --> 0:00:58.280 let's pull one out for behavioral economist Daniel Connoman. 0:00:58.440 --> 0:01:01.440 Yeah, so yeah, he passed at the age of ninety, 0:01:01.680 --> 0:01:02.160 which is. 0:01:02.280 --> 0:01:05.840 That was yesterday? Long life? Was it Thursday? Wednesday? Say yeah? 0:01:05.920 --> 0:01:08.680 And I think it's just yeah, pour one out because 0:01:08.920 --> 0:01:11.560 we talk about this regularly on the show, how personal 0:01:11.600 --> 0:01:12.440 finance is. 0:01:12.720 --> 0:01:14.240 It's not all about math. 0:01:14.560 --> 0:01:17.440 We know that we're just irrational creatures as human beings, 0:01:17.800 --> 0:01:21.400 and nobody highlighted that better than Daniel Conomy, and he 0:01:21.440 --> 0:01:23.240 basically kicked off a whole new field of research. 0:01:23.280 --> 0:01:25.720 Well you say, like you enter into that conversation with 0:01:25.760 --> 0:01:27.240 the assumption that we all know that, and the reason 0:01:27.280 --> 0:01:29.080 we know that is because of Daniel Conomy, right, Like, 0:01:29.120 --> 0:01:30.880 I feel like that that was one of his biggest 0:01:30.880 --> 0:01:33.600 contributions was the fact that, like, we think we're rational, 0:01:33.640 --> 0:01:35.360 we think we can be objective and look at all 0:01:35.400 --> 0:01:39.520 of the different facts, but no, in fact, we are subjective. 0:01:39.760 --> 0:01:43.840 It depends on our life experiences as to our behavior, right, 0:01:43.880 --> 0:01:44.839 Like we're not. 0:01:44.920 --> 0:01:46.560 In our emotions and all sorts of things. 0:01:46.640 --> 0:01:49.559 Yes, we take shortcuts, we take cues from other people, 0:01:49.640 --> 0:01:51.520 Like we just go with our gut sometimes as opposed 0:01:51.520 --> 0:01:54.480 to receiving all of the information that's available to us 0:01:54.480 --> 0:01:56.680 and making a perfectly rational decision. 0:01:56.720 --> 0:02:00.080 Gains aren't don't feel as powerful as losses do. And 0:02:00.080 --> 0:02:01.360 and all of these different. 0:02:01.240 --> 0:02:03.320 Things in sand dollar amounts, right, and all. 0:02:03.200 --> 0:02:05.400 These things that he was able to highlight that really 0:02:05.480 --> 0:02:07.840 inform I think at least some of what we talk 0:02:07.840 --> 0:02:09.440 about on the show, because there are some things where 0:02:09.440 --> 0:02:11.320 it's like, hey, this is math, or hey this is policy, 0:02:11.360 --> 0:02:13.600 this is how this works. Maybe you should consider taking 0:02:13.639 --> 0:02:15.720 advantage of this, or hey, the economic tide has swung 0:02:15.800 --> 0:02:18.760 a little bit, and actually there's things to consider over here. 0:02:19.080 --> 0:02:21.280 But there's also a lot to talk about on the 0:02:21.320 --> 0:02:23.520 behavior spectrum, and that truly, so much of that goes 0:02:23.560 --> 0:02:26.800 back to the discipline essentially that he founded. 0:02:26.919 --> 0:02:28.920 That's right. So, Daniel Conneman, thank you for all of 0:02:28.960 --> 0:02:32.480 your work. SBF, no, thank you for all that you've done. 0:02:32.520 --> 0:02:35.040 Did you see that his sentencing sentencing came through? 0:02:35.120 --> 0:02:38.079 I did, Yeah, twenty five years that. I can't tell 0:02:38.120 --> 0:02:40.519 if that's fair or not enough, but I think it's fair. 0:02:40.520 --> 0:02:43.120 He's one of the two. He did seem he had 0:02:43.120 --> 0:02:44.880 like a slap on the wrist, like five years in 0:02:44.919 --> 0:02:45.760 some community service. 0:02:45.760 --> 0:02:47.200 That wouldn't have been wrong. Yeah. 0:02:47.200 --> 0:02:49.840 Well, he was apologetic, and I think it seems like finally, 0:02:50.120 --> 0:02:52.000 finally true. It's for a long time he was like, 0:02:52.040 --> 0:02:53.080 what do you mean, I didn't do anything. 0:02:53.160 --> 0:02:56.360 It seems like he recognizes the harm that he caused 0:02:56.360 --> 0:02:58.600 to lots of people, and so I don't know any 0:02:58.680 --> 0:03:00.640 lesson that same at least he says he's acknowledging it. 0:03:00.680 --> 0:03:02.480 That's true. Does he feel that way? He's not locked 0:03:02.480 --> 0:03:05.040 away for seventy years, essentially for life. 0:03:05.080 --> 0:03:07.240 It's kind of like when I, you know, apologized to 0:03:07.280 --> 0:03:09.760 my parents growing up when I did something and really 0:03:09.800 --> 0:03:12.320 I just wanted to not be in trouble. May I 0:03:12.360 --> 0:03:14.280 have a feeling that might be what he's doing. But 0:03:14.480 --> 0:03:17.919 I'm glad to see white color crime doesn't get enough 0:03:17.960 --> 0:03:21.360 punishment in this country. And so and so what SBF 0:03:21.400 --> 0:03:25.960 did was terrible. It really impacted his thievery, essentially impacted 0:03:25.960 --> 0:03:28.720 the lives of millions of people, and he deserves to 0:03:28.720 --> 0:03:29.480 go away for a long time. 0:03:29.520 --> 0:03:32.799 That's true. Yeah, it wrecks the crypto markets. And on 0:03:32.800 --> 0:03:35.680 that note, actually, next Wednesday, we're going to be speaking 0:03:35.680 --> 0:03:39.800 with Marco from Whiteboard Finance about bitcoin. Yeah, so you 0:03:39.800 --> 0:03:41.640 can look forward to that one. That'll be a fun combo. 0:03:41.680 --> 0:03:42.960 All right, but let's move on, mat, Let's get to 0:03:43.000 --> 0:03:45.240 the Friday flight as sampling of stories we found interesting 0:03:45.640 --> 0:03:46.160 this week. 0:03:46.360 --> 0:03:48.000 And inflation continues to. 0:03:48.040 --> 0:03:50.800 Kind of be a water cooler talk even though it's 0:03:50.840 --> 0:03:52.920 died down a lot and we're not experiencing like, oh 0:03:53.000 --> 0:03:55.960 crazy egg price is doubled in just two months, Nothing 0:03:56.000 --> 0:03:56.680 like that's happening. 0:03:56.720 --> 0:04:00.720 But although egg prices are up because well it's Easter weekend. 0:04:00.840 --> 0:04:03.560 That's true. Yeah, there's just all the demain hardy easter 0:04:03.600 --> 0:04:04.080 egg hunts. 0:04:04.080 --> 0:04:06.000 I know, my mom dropped off fifteen for us, which 0:04:06.040 --> 0:04:08.640 is really sweet of her, So we could. 0:04:08.560 --> 0:04:12.160 That four one k lo exactly. 0:04:12.400 --> 0:04:14.480 Well, I think especially for people in California, but really 0:04:14.480 --> 0:04:17.320 anywhere there's a Trader Joe's, people are saying, uh, oh, 0:04:17.480 --> 0:04:20.160 banana price has just went up. Trader Joe's they sell 0:04:20.200 --> 0:04:22.040 they're like one of the only stores that sells bananas 0:04:22.040 --> 0:04:25.480 and singles, and they're pricing went up the register, right, Yeah, 0:04:25.560 --> 0:04:27.279 well I think it's actually like, right as you're walking 0:04:27.320 --> 0:04:30.599 into the fruit fer style, yeah, and it's a great, great store, 0:04:31.040 --> 0:04:33.640 but now you want your banana, there's twenty three cents 0:04:33.640 --> 0:04:35.680 instead of nineteen cents. It was kind of like, in 0:04:35.720 --> 0:04:37.760 my mind, kind of like the Costco hot dog exactly 0:04:37.800 --> 0:04:40.560 that has remained at a dollar fifty and the bananas 0:04:40.560 --> 0:04:43.599 were nineteen cents for twenty years, and so people are like, 0:04:43.760 --> 0:04:46.240 you know, uh, I don't think they're revolting, but they're 0:04:46.279 --> 0:04:48.560 a little concerned at least, and I understand that. But 0:04:48.720 --> 0:04:51.440 obviously bananas are still incredibly cheap, just like eggs, even 0:04:51.440 --> 0:04:53.599 if they go up in price twenty percent. It's one 0:04:53.640 --> 0:04:56.360 of those things where it's still fast and more affordable 0:04:56.400 --> 0:04:58.320 than a lot of other foods you could buy. 0:04:58.360 --> 0:05:01.200 Yeah, hopefully I can continue to enjoy my daily We 0:05:01.200 --> 0:05:04.000 both have a daily banana with our coffee and a 0:05:04.600 --> 0:05:07.360 bedtime banana lately. Now what are you talking about. It's 0:05:07.400 --> 0:05:08.720 probably like the last thing you want, right, it's like 0:05:08.760 --> 0:05:09.520 floadd with sugar. 0:05:09.560 --> 0:05:11.360 Well, now I need to tell them, sorry, too expensive. 0:05:12.160 --> 0:05:14.280 Well, so, you know, one of the reasons why historically 0:05:14.320 --> 0:05:17.200 they've been cheap is because of the fact that bananas 0:05:17.200 --> 0:05:20.480 are all clones of the same banana, one variety, right, yeah, yeah, 0:05:20.600 --> 0:05:23.440 so the Cavendish I think is the name of it. 0:05:23.440 --> 0:05:26.599 It's like, literally they're like stormtroopers. They're all it's like 0:05:26.640 --> 0:05:29.440 the exact same banana, unlike apples that's just been replicated 0:05:29.520 --> 0:05:33.320 over like decades, I guess. Which not to be an alarmist, 0:05:33.400 --> 0:05:35.880 but that's why some folks are saying that there could 0:05:35.920 --> 0:05:37.880 be like all of our bananas as we know it 0:05:37.880 --> 0:05:39.919 could get wiped out because they are literally all the 0:05:39.920 --> 0:05:43.599 same banana. And if there's a disease that hits Central 0:05:43.680 --> 0:05:47.800 South America where there's like hundreds thousands of acres of bananas. 0:05:48.360 --> 0:05:51.560 Then we basically would have to rebuild our bananas as 0:05:51.560 --> 0:05:53.720 we know it from scratch new banana infrastructure. 0:05:53.760 --> 0:05:56.320 But yeah, like literally, which is frightening, which is kind 0:05:56.320 --> 0:05:58.240 of crazy to think. So, and your bananas instead of 0:05:58.240 --> 0:06:00.240 being twenty three cents, they're like eighty two cent piece. 0:06:00.400 --> 0:06:02.680 Yeah, So just saying that so that you that we 0:06:02.720 --> 0:06:05.680 all appreciate our bananas while we still have them. 0:06:05.720 --> 0:06:07.800 And I understand Trader Joe's needs is a company that 0:06:07.800 --> 0:06:08.799 needs to remain profitable. 0:06:08.880 --> 0:06:11.160 Yeah, all right, let's talk about passive income because your 0:06:11.200 --> 0:06:15.080 next side hustle choice it might be running a vending machine. 0:06:15.640 --> 0:06:19.800 The reason is because it's trendy passive income. It's the 0:06:20.160 --> 0:06:22.960 quest and vending machines seem to be the current answer 0:06:22.960 --> 0:06:25.640 for many hustlers out there, and there's been a rise 0:06:25.680 --> 0:06:27.839 and interest. This is according to the Wall Street Journal. 0:06:28.200 --> 0:06:31.880 There's a chance that it could be a profitable endeavor. Sure, 0:06:32.160 --> 0:06:34.120 but before you go out there and drop a bunch 0:06:34.120 --> 0:06:37.680 of money on whatever vending machine that you want to purchase, 0:06:37.680 --> 0:06:38.560 I guess. 0:06:37.960 --> 0:06:40.640 Those fancy robotic ones where they get get the soda 0:06:40.760 --> 0:06:42.880 and then they like tilt it sideway. 0:06:42.760 --> 0:06:44.840 Out that way, it doesn't get all carbonated and shook up. 0:06:44.839 --> 0:06:47.600 I think those things are like seven grand? Are they really? Yeah? 0:06:47.640 --> 0:06:49.680 Oh my gosh, no those It takes a lot of 0:06:49.839 --> 0:06:51.640 front cost or even just like a bubble gum machine 0:06:51.680 --> 0:06:54.680 before you do that. So much depends on the specifics 0:06:54.720 --> 0:06:57.520 because when you dig a little bit deeper, the average 0:06:57.560 --> 0:07:00.960 machine earns just over five hundred dollars a month. And 0:07:01.000 --> 0:07:02.640 I'm not going to say that that's not nothing, but 0:07:03.000 --> 0:07:05.440 it may not be this endless fountain of money like 0:07:05.560 --> 0:07:07.359 you were imagining it to be. Yeah, but then on 0:07:07.400 --> 0:07:09.200 top of that, that machine it needs to be restocked, 0:07:09.200 --> 0:07:11.400 it needs to be repaired. If it gets tagged, you 0:07:11.440 --> 0:07:14.520 got to show up and clean nothing clean, nothing off 0:07:14.640 --> 0:07:16.880 though it would be the worst. But again, five hundred 0:07:16.920 --> 0:07:18.680 dollars a month like that is just the average. It 0:07:18.720 --> 0:07:22.000 makes me think of with real estate investing, there is 0:07:22.040 --> 0:07:25.160 a wide spectrum of what it is that individuals are making, 0:07:25.640 --> 0:07:29.600 and like real estate, location is key. And so when 0:07:29.640 --> 0:07:31.880 you're talking about veny machines, the best machines they make 0:07:31.880 --> 0:07:34.560 the bulk of their returns the machines that are well placed. 0:07:35.120 --> 0:07:37.680 And if you are just getting into the game, it's 0:07:37.680 --> 0:07:39.760 going to take you a while to be able to 0:07:39.760 --> 0:07:43.400 snag contracts with the different business owners that would allow 0:07:43.440 --> 0:07:45.160 you to have that prime real estate. Agreed. 0:07:45.200 --> 0:07:46.840 Yeah, No, you have to think about location in the 0:07:47.160 --> 0:07:49.080 It's not just like boom. I got a vending machine 0:07:49.080 --> 0:07:50.920 and it's just printing money. That's not how it works. 0:07:51.120 --> 0:07:52.920 I had a friend, It's not like a crypto farm. 0:07:53.880 --> 0:07:54.080 Right. 0:07:54.560 --> 0:07:58.080 I had a friend who had a photo photo booth 0:07:58.400 --> 0:08:02.960 and that was actually much better decision than a vending 0:08:03.000 --> 0:08:06.000 machine because she had it in a record store and 0:08:06.520 --> 0:08:08.400 it was one It was easier to maintain. There wasn't 0:08:08.440 --> 0:08:10.120 as much to go wrong with it. You didn't have 0:08:10.160 --> 0:08:12.160 to come by and restock every week or something like that. 0:08:12.200 --> 0:08:14.440 It was more like once a month putting in new film. 0:08:14.320 --> 0:08:15.840 Non perishables. Right. I like that. 0:08:15.920 --> 0:08:18.160 It was a much easier business to run. So I 0:08:18.160 --> 0:08:20.240 don't know, maybe for it, but it was in a 0:08:20.320 --> 0:08:22.680 high traffic area in a really cool part of town. 0:08:22.840 --> 0:08:23.280 That's another. 0:08:23.480 --> 0:08:25.720 It was a selling point. And so I think if 0:08:25.760 --> 0:08:27.320 you want to go to the vending machine route, I 0:08:27.320 --> 0:08:30.000 don't know, maybe a photo booth route is better. People 0:08:30.000 --> 0:08:32.000 are interested in that. They tap their credit card, pay 0:08:32.040 --> 0:08:34.440 five bucks and get a film strip, and maybe that's 0:08:34.440 --> 0:08:36.760 a more profitable way to go. I think this also 0:08:36.840 --> 0:08:39.920 isn't for everyone. Right, And interestingly enough, in this article, 0:08:39.960 --> 0:08:42.480 like the folks who have done well, they tend to 0:08:42.520 --> 0:08:45.960 pivot from just having vending machines and they want to 0:08:45.960 --> 0:08:47.559 become vending machine influenced. 0:08:47.160 --> 0:08:48.760 Where you see the footage of them and they got 0:08:48.760 --> 0:08:51.520 this bucket, this giant bucket of quarters and it's just like, 0:08:51.559 --> 0:08:53.720 oh my gosh, that so much money. Yeah, it's like 0:08:53.760 --> 0:08:55.600 that scene from the Goonies where he goes and he's 0:08:55.600 --> 0:08:57.280 like stealing all the money from the well. Still haven't 0:08:57.280 --> 0:09:00.000 seen it? What I know, you've never seen the Goonies. Now, dude, 0:09:00.040 --> 0:09:02.200 I need to Oh my gosh, it holds up. You 0:09:02.240 --> 0:09:04.080 need to go back and see that. I will, I will, 0:09:04.360 --> 0:09:04.800 so Okay. 0:09:04.800 --> 0:09:06.480 One of the guys they highlighted in this story, he 0:09:06.640 --> 0:09:09.679 has over five hundred thousand YouTube subscribers and he's basically 0:09:09.720 --> 0:09:12.480 teaching folks how to make money with vending machines. He's 0:09:12.480 --> 0:09:16.440 making a lot more creating content than he is selling urias, soda, 0:09:16.520 --> 0:09:18.600 empower rate and stuff like that. Right, And we talked 0:09:18.640 --> 0:09:20.559 back in episode three fifty three, which I think of 0:09:20.600 --> 0:09:23.040 as kind of one of our Cornerstone episodes, how passive 0:09:23.040 --> 0:09:25.760 income is a myth, and we love the idea of 0:09:25.760 --> 0:09:28.880 people having multiple sources of income and to be pursuing 0:09:28.880 --> 0:09:32.480 what we called in that episode leveraged income, where upfront 0:09:32.480 --> 0:09:35.200 effort pays off in more passive gains down the road. 0:09:35.600 --> 0:09:38.200 But the truth is it takes time and work to 0:09:38.280 --> 0:09:41.480 see those endeavors succeed. Just because vending machine investing is 0:09:41.520 --> 0:09:43.760 hot right now, it's making the headlines, or you're seeing 0:09:43.760 --> 0:09:47.120 more influencers on TikTok or Instagram or something pushing it, 0:09:47.200 --> 0:09:49.360 that doesn't mean it's a smart move for you. Makes 0:09:49.400 --> 0:09:51.360 me think mad of writing a book. And we have 0:09:51.480 --> 0:09:53.760 friends who have written books and they say they make 0:09:53.920 --> 0:09:57.400 between two thousand and five thousand dollars a month from 0:09:57.400 --> 0:09:59.520 perpetual sales of that book. But they have to keep 0:09:59.559 --> 0:10:01.840 pushing it, they have to keep marketing it, and it 0:10:01.880 --> 0:10:03.560 took a heck of a lot of work up front 0:10:03.800 --> 0:10:06.160 to write that book. So I think if you were 0:10:06.200 --> 0:10:08.199 to pick their brain and say how's that passive income 0:10:08.200 --> 0:10:10.800 coming along, they'd say, well, it's great that I put 0:10:10.800 --> 0:10:12.080 in a lot of hard work at the beginning and 0:10:12.120 --> 0:10:14.720 I'm reaping the rewards, but passive income. 0:10:14.760 --> 0:10:16.800 I don't know if that's what I call it. That's true. Okay, 0:10:16.840 --> 0:10:20.200 So another investing trend that's tacking up is house flipping. 0:10:21.400 --> 0:10:24.320 So basically, obviously we've seen rising home prices. Well, that 0:10:24.360 --> 0:10:27.439 has led to an increased interest in flipping homes. And 0:10:27.520 --> 0:10:30.600 it's not that you can't make money flipping a home, Folks, clearly, 0:10:30.600 --> 0:10:32.280 clearly do this. I actually did this back in the 0:10:32.400 --> 0:10:34.800 day when photography was a little bit slower. What year 0:10:34.880 --> 0:10:36.400 was that that you twenty fifteen? 0:10:36.480 --> 0:10:38.680 Okay, yeah, and you did decently well with that house 0:10:38.679 --> 0:10:39.120 flipping it. 0:10:39.120 --> 0:10:41.040 Ever, Yeah, Like, we entered into that thinking there's a 0:10:41.120 --> 0:10:44.679 chance we might move into it ourselves. And honestly, that's 0:10:44.679 --> 0:10:47.640 a strike against us because what that means is we 0:10:47.640 --> 0:10:51.559 were making some decisions based on us personally as opposed 0:10:51.600 --> 0:10:54.160 to thinking about it from a purely business standpoint. But 0:10:54.240 --> 0:10:56.079 even still, it was a deal and we were able 0:10:56.120 --> 0:10:57.880 to pounce on it, make it happen, knock it out 0:10:57.880 --> 0:11:00.800 within a short period of time. That being said, please 0:11:00.840 --> 0:11:04.080 be forewarned because the risks are much bigger when your 0:11:04.120 --> 0:11:06.760 timeline shrinks. If you are looking to flip a home, 0:11:06.880 --> 0:11:08.280 you got to know what you're doing, you got or 0:11:08.320 --> 0:11:10.280 maybe you've got to have a really good relationship with 0:11:10.320 --> 0:11:14.120 a contractor because you can lose money fairly easily. Transaction 0:11:14.200 --> 0:11:17.040 costs are certainly a big reason why not to mention 0:11:17.160 --> 0:11:20.600 the tax consequences of a shorter time period where you're 0:11:20.600 --> 0:11:23.360 hanging onto that. And honestly, timing is a big part 0:11:23.400 --> 0:11:25.280 of this as well, because I feel like, what do 0:11:25.360 --> 0:11:28.320 they say time, Time heals all wounds. Yeah, well, time 0:11:28.720 --> 0:11:31.960 can heal financial wounds, because the longer you're able to 0:11:31.960 --> 0:11:34.520 hold onto that property, you're gonna see appreciation if it's 0:11:34.520 --> 0:11:37.079 a long term investment. Probably where you're property where you're 0:11:37.080 --> 0:11:39.880 renting it out, you're gonna see rents typically increase. 0:11:40.320 --> 0:11:42.800 But just if you make a mistake, time lessens the 0:11:42.800 --> 0:11:43.680 severity that mistake. 0:11:45.360 --> 0:11:48.959 And so I think, whether it be vending machines or 0:11:49.040 --> 0:11:52.120 real estate, you still have to think through what is 0:11:52.160 --> 0:11:54.880 your unique advantage, Like there needs to be something, some 0:11:54.920 --> 0:11:58.120 sort of almost unfair advantage that you have that allows 0:11:58.160 --> 0:12:00.240 you to make a profit as opposed to you just 0:12:00.360 --> 0:12:02.720 having an interest in doing that. And so when it 0:12:02.720 --> 0:12:03.160 comes to. 0:12:03.480 --> 0:12:04.920 Or if you're a candy specialist, you're like, I know, 0:12:05.040 --> 0:12:07.320 mister goodbar and kat like the back of my hand. 0:12:07.559 --> 0:12:10.840 Yeah, I mean like literally, like or connection with somebody 0:12:10.920 --> 0:12:14.240 within the snack industry, or like I'm thinking about real estate, 0:12:14.280 --> 0:12:18.120 Like maybe you are quite handy and you are incredibly patient, 0:12:18.320 --> 0:12:21.000 and you don't mind living in a construction zone. Guess 0:12:21.000 --> 0:12:24.360 what you are prime for an in house flip. Basically 0:12:24.400 --> 0:12:27.640 where you live in the property, renovate it, live there 0:12:27.640 --> 0:12:29.640 for at least two years, sell that thing without having 0:12:29.720 --> 0:12:32.360 to pay any capital gains on that. That's key. 0:12:32.400 --> 0:12:34.120 That's key because that's one of the best things with 0:12:34.200 --> 0:12:36.800 high transaction costs. If you're also paying tax on the profit, 0:12:37.400 --> 0:12:40.480 it's hard to make it work unless you really really 0:12:40.520 --> 0:12:42.439 know what you're doing and doing some of the work yourself. 0:12:42.559 --> 0:12:44.199 But if you do the live in flip route, you've 0:12:44.200 --> 0:12:46.079 got a little extra time on your side, and you're 0:12:46.080 --> 0:12:48.480 reducing or eliminating essentially the tax burden. 0:12:48.600 --> 0:12:50.200 Yea, even if you're like, well, no, I don't want 0:12:50.200 --> 0:12:52.360 to do that, Guys, I'm not very handy. Okay, Well, 0:12:52.440 --> 0:12:54.440 you need to be really good at project management, and 0:12:54.480 --> 0:12:55.800 you need to have a good network. You need to 0:12:55.840 --> 0:12:58.319 have a bunch of great contractors who you can call 0:12:58.360 --> 0:13:00.120 on and to manage that thing. All I'm saying is 0:13:00.120 --> 0:13:02.719 that they're need or reasonably priced. Yeah, you need to 0:13:02.760 --> 0:13:05.160 have some sort of unique advantage. And because if it 0:13:05.200 --> 0:13:07.480 was as easy as all the influencers are making it seem, 0:13:07.480 --> 0:13:10.240 whether we're talking about vending machines or real estate, everybody 0:13:10.440 --> 0:13:12.920 would be doing it. And guess what, more and more 0:13:12.960 --> 0:13:16.600 folks might be doing it, which means what it's harder 0:13:16.640 --> 0:13:19.199 to make a profit, which is going back to my premise. 0:13:19.400 --> 0:13:22.640 You still have to find some sort of unique proposition, 0:13:22.760 --> 0:13:25.520 like something unique that sets your services or your products apart. 0:13:25.559 --> 0:13:28.400 Everything's harder in redevrent then it seems on YouTube or 0:13:28.400 --> 0:13:31.200 TikTok yep. That's also I guess a lesson here. All right, 0:13:31.280 --> 0:13:33.400 let's continue talk about real estate for just a second. Matt. 0:13:33.720 --> 0:13:36.560 On that note, it's becoming more common for folks to 0:13:36.559 --> 0:13:39.600 pay discount points in order to reduce the mortgage rate 0:13:39.640 --> 0:13:41.960 that they're taking on when they're buying a home. Almost 0:13:42.000 --> 0:13:45.200 two thirds of buyers paid more upfront to reduce their 0:13:45.240 --> 0:13:47.800 interest rate, compared to only thirty percent of buyers in 0:13:47.840 --> 0:13:50.280 twenty twenty one, when we were in a climate of 0:13:50.360 --> 0:13:52.320 low rates. People are like, oh three percent, great, I 0:13:52.320 --> 0:13:54.440 don't feel the need to buy that ratedown anymore. That's 0:13:54.440 --> 0:13:56.800 pretty good. Yeah, and so that's a core in historic clothes. 0:13:56.840 --> 0:13:57.440 Why would I do that? 0:13:57.520 --> 0:13:57.640 Right? 0:13:57.720 --> 0:14:00.000 Exactly that these are This is data from Freddy Matt. 0:14:00.840 --> 0:14:03.760 But we would say paying for discount points is typically 0:14:03.840 --> 0:14:06.840 a bad use of your money for multiple reasons. First, 0:14:07.240 --> 0:14:09.760 often you don't lower the rate enough to produce a 0:14:09.760 --> 0:14:12.560 great enough effect. So, oh cool, I'm saving forty dollars 0:14:12.600 --> 0:14:14.200 a month, but it costs me five thousand dollars to 0:14:14.240 --> 0:14:16.160 do that. Well, the math doesn't really add up on 0:14:16.160 --> 0:14:19.360 that front, right. And then second, most buyers don't stay 0:14:19.400 --> 0:14:21.240 at the home long enough to make the numbers work. 0:14:21.520 --> 0:14:23.920 So you buy the home, you pay down the rate, 0:14:24.160 --> 0:14:26.360 and then you move three or four years later. Well, 0:14:26.720 --> 0:14:29.760 there's a really good chance that was money that was 0:14:29.840 --> 0:14:33.120 ill spent, because it takes time for that discount for 0:14:33.160 --> 0:14:35.080 the you know, when you buy those points down, for 0:14:35.160 --> 0:14:37.120 that to actually pay off. Then third, even if you 0:14:37.120 --> 0:14:38.800 do stay in the home long enough, you might not 0:14:38.880 --> 0:14:40.720 hold onto the mortgage. 0:14:40.440 --> 0:14:41.600 Long enough to make it worth it. 0:14:41.640 --> 0:14:43.200 So even if you stay in the home for twenty years, 0:14:43.320 --> 0:14:46.040 but you were finance refinance when rates go down after 0:14:46.080 --> 0:14:49.800 something like four or five years. Well, and the projections 0:14:49.840 --> 0:14:50.920 are the rates are going to go down? 0:14:50.960 --> 0:14:51.400 Who knows. 0:14:51.400 --> 0:14:55.000 We've always said be careful of basing your choices on 0:14:55.720 --> 0:14:58.320 future hopes and dreams about what happens with the interest rates. 0:14:58.440 --> 0:15:00.160 But still, if interest rates do go down and you 0:15:00.240 --> 0:15:02.640 end up briefinancing, you're gonna wish you had saved that 0:15:02.680 --> 0:15:04.480 four or five six thousand dollars whatever it is that 0:15:04.520 --> 0:15:06.840 you used to pay down points because you didn't hold 0:15:06.880 --> 0:15:08.520 onto that mortgage long enough to make it worth it. 0:15:08.600 --> 0:15:10.560 That's true. I think the biggest key is always is 0:15:10.600 --> 0:15:13.440 to shop around with multiple lenders, right, and so what 0:15:13.480 --> 0:15:15.480 that means is to not just go with a mortgage 0:15:15.560 --> 0:15:18.920 lender that your agent recommends. So far, your agent even 0:15:18.920 --> 0:15:21.000 super helpful, and they're they're lining everything up for you. 0:15:21.000 --> 0:15:22.520 They're like, hey, I know a guy. Oh this is 0:15:22.520 --> 0:15:24.800 how this works. Oh I've got a lender for you 0:15:24.840 --> 0:15:27.040 to check out. Can you digitally sign these forms for me? 0:15:27.200 --> 0:15:29.240 Not so easy? Yeah, you don't have to do what 0:15:29.280 --> 0:15:31.880 they say. Keep that in mind. They could be the best, 0:15:31.880 --> 0:15:34.200 but they might not be. You might be able to 0:15:34.200 --> 0:15:36.800 get a rate that's lower even by like a quarter 0:15:36.840 --> 0:15:39.520 or a half a point, perhaps by shopping around, and 0:15:39.560 --> 0:15:41.120 then of course what you would want to do in 0:15:41.120 --> 0:15:43.200 that case, you just pocket what you would have paid 0:15:43.200 --> 0:15:46.280 in points instead. Because I think this is especially true 0:15:46.280 --> 0:15:50.120 man as folks are more transient, As folks are living 0:15:50.160 --> 0:15:52.680 in their homes for fewer and fewer years, it makes 0:15:52.800 --> 0:15:55.240 it seems like a holdover, like the paying down of points. 0:15:55.240 --> 0:15:57.640 It makes sense that this was something that folks did 0:15:58.080 --> 0:16:00.840 back in like like the eighty in the nineties, even 0:16:00.880 --> 0:16:03.560 when rates were sky high. Back then, rates were even 0:16:03.680 --> 0:16:06.040 higher than they are now. And again, there just seems 0:16:06.040 --> 0:16:09.440 to be this cultural shift that's taken place as folks 0:16:09.440 --> 0:16:12.200 are I think moving to where the opportunity oftentimes is yeah, 0:16:12.560 --> 0:16:13.920 not stay input. I think you're right. 0:16:13.920 --> 0:16:15.560 If you're going to do one of those two things, 0:16:15.680 --> 0:16:19.680 shopping around with multiple lenders is going to be far 0:16:19.720 --> 0:16:22.760 more powerful than paying points to reduce the mortgage amount, 0:16:22.800 --> 0:16:25.240 and I think it's well more than worthwhile. I would 0:16:25.280 --> 0:16:27.360 reach out to a credit union. I would also talk 0:16:27.400 --> 0:16:30.000 to like a local mortgage broker who can shop with 0:16:30.320 --> 0:16:32.920 a bunch of different banks on your behalf as well. 0:16:33.160 --> 0:16:35.480 I think those are better ways to save money instead 0:16:35.480 --> 0:16:37.800 of forking over more cash in order to reduce your 0:16:37.800 --> 0:16:40.440 payment amount by a little bit, and again it might 0:16:40.480 --> 0:16:43.520 be it might be worthwhile. It depends on the numbers 0:16:43.520 --> 0:16:44.880 and how long you plan on being that home. So 0:16:44.880 --> 0:16:46.680 I crunch the numbers, you're like, oh cool, if this 0:16:46.880 --> 0:16:48.640 five thousand dollars, if I'm going to make it back 0:16:48.680 --> 0:16:51.000 in lower payments over the course of eighteen months, twenty 0:16:51.000 --> 0:16:53.000 two months, then it might make sense. But for a 0:16:53.040 --> 0:16:54.320 lot of people, it's going to take a whole lot 0:16:54.320 --> 0:16:57.680 longer to make that money worth it. Last, but not least, Matt, 0:16:57.880 --> 0:16:59.680