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Speaker 1: Welcome to Out of Money. I'm Joel and I am Matt.

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Speaker 1: Today we got to answer your listener questions.

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Speaker 2: And yes, that is how Joel always talks, at least

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Speaker 2: when we're not recording.

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Speaker 1: That's how he talks, and he buttons it up for

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Speaker 1: the actual episode. Are you sad King's English, Matt? When

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Speaker 1: we're doing podcast recorded? But they'd slipped right there.

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Speaker 2: No, it's Monday, which, dude, I'll say, Mondays are the

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Speaker 2: best days because we get to hear from listeners like

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Speaker 2: you and I. We create this podcast on Mondays, we

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Speaker 2: go and get coffee first, and but we like sit

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Speaker 2: here all day long, right.

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Speaker 1: You and me.

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Speaker 2: We do a whole lot of reading, a whole lot

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Speaker 2: of writing, and we sit down in front of the

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Speaker 2: microphones and we record. Within that we can get insulated

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Speaker 2: from like the fact that people actually listen to the podcast,

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Speaker 2: and so like I mentally, I know that people listen

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Speaker 2: to the podcast, but when we get to hear voice

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Speaker 2: memos and questions from listeners and then answer those questions,

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Speaker 2: it makes it just reconnects us with you, our listener.

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Speaker 2: And so I'm just going to say a big massive

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Speaker 2: thanks to everyone out there who's listening to the show

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Speaker 2: because like, truly, we wouldn't have a podcast without listeners,

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Speaker 2: and the fact that folks are sending in their voice

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Speaker 2: memos and trusting at least they're looking to hear our opinions.

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Speaker 2: They may not do what we say, but you know

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Speaker 2: that's okay. They don't trust us, that blandly jel.

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Speaker 1: I'm looking forward to answering questions today and to hearing

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Speaker 1: people's questions. You're right, these the touch points matter. Like

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Speaker 1: I love the Facebook group. That's a touch point for

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Speaker 1: me with our audience. Same with emails, same with listener questions.

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Speaker 1: We love hearing from you and getting your feedback, your questions,

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Speaker 1: like all the above. It's all good stuff. Yeah, it

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Speaker 1: really is. And I feel like there used to be

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Speaker 1: like a layer of buffer between people who created content

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Speaker 1: and then the people more man. Yeah, now there's not,

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Speaker 1: like and I really actually maybe different people feel different

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Speaker 1: ways about that, but I appreciate it, Like, and I

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Speaker 1: feel like there's I get a sense of the pulse

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Speaker 1: when I get responses to the newsletter or people who

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Speaker 1: do submit their questions for these episodes. I get an

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Speaker 1: understanding what people are going through, Like we know we're

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Speaker 1: going through and what we've been through, and we try to,

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Speaker 1: you know that, use that as kind of part of

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Speaker 1: our impetus for what we talk about.

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Speaker 2: But you know, hearing what you're going through be able

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Speaker 2: to be out there amongst the people. Yeah, all right,

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Speaker 2: I wanted to share a quick little personal confession Gool,

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Speaker 2: which is and he did. Okay, oh, sure you know this,

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Speaker 2: but listeners don't know this. I am not going to

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Speaker 2: invest anymore ever again, any more money, at least for

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Speaker 2: this year. So earlier this year, Kate and I, Yeah,

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Speaker 2: hopefully folks aren't freaking out if you're thinking all this.

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Speaker 1: Because you're trying to time the market. Matt.

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Speaker 2: Matt's got a that's in his midlife crisis. I Am

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Speaker 2: not going to go out and buy a red Corvette

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Speaker 2: that kind of thing. But Kate and I we did

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Speaker 2: talk earlier this year and we decided that, hey, let's

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Speaker 2: hold off investing this year because we've got some other

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Speaker 2: some other major goals, and specifically we realized that, hey,

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Speaker 2: if there's a chance of us staying in the house

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Speaker 2: that we're currently in, it would be really really good

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Speaker 2: for us to add on specifically, I mean, like, the

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Speaker 2: rooms are tiny and the two youngest girls are sharing

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Speaker 2: a bedroom, man, and we're it's going to be it's

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Speaker 2: going to quickly become untenable. This was what we realize,

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Speaker 2: and so I wanted to confess that amongst all of

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Speaker 2: the how to money listeners out there. But I feel

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Speaker 2: very comfortable with that for several reasons, one being you

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Speaker 2: don't always make decisions like this based on like how

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Speaker 2: to most financially optimize your life, right like sometimes.

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Speaker 1: On how to have the most money in your eighties.

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Speaker 2: Yes, like sometimes you have to make decisions that are

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Speaker 2: just like, well, is this going to work for us

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Speaker 2: as a family, as a couple, as an individual, is

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Speaker 2: this what I want my life to look like?

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Speaker 1: So I'm comfortable with that.

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Speaker 2: I'm also comfortable with the fact that I think there's

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Speaker 2: a decent chance we'll get if and when we sell

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Speaker 2: the house. The return on the investment might be decent.

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Speaker 2: It's not like we're just completely probably not a dollar

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Speaker 2: for dollar, but probably not a dollar for dollar, but

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Speaker 2: we're not just fleshing money down the toilet. But also

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Speaker 2: you consider mortgage rates, like the other alternative would be

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Speaker 2: for us to move, and dude, just given where mortgage

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Speaker 2: rates are right now. It makes that even more difficult.

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Speaker 1: It makes adding on to make more sense.

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Speaker 2: And it's why so many folks, I think, are hanging

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Speaker 2: on to their properties and potentially doing something like this.

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Speaker 2: But also because early on within our marriage, Can and I,

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Speaker 2: we invested a whole lot of money. Man, we're actually

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Speaker 2: we're gonna talk later on about savings rate. Same with

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Speaker 2: you and Emily, like, there are certain sacrifices front learning

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Speaker 2: the sacrifice. We talk about it all the time, but

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Speaker 2: we did a whole lot of that. And you know,

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Speaker 2: when you're technically coast fire, which you know, I think

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Speaker 2: both of our families have been roughly coast fire for

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Speaker 2: a year or two, Well, there's no longer as much

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Speaker 2: of a need to invest. If you're like, well, I

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Speaker 2: don't have to invest anymore in order to retire out

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Speaker 2: of it.

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Speaker 1: I think it's a big part of the puzzle because

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Speaker 1: some people might hear you say that and they might say, wait,

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Speaker 1: mas's not can invest, Like maybe I maybe I should

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Speaker 1: dial it back, or maybe I don't need to be

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Speaker 1: saving for my future. And I do think that that

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Speaker 1: is a big part of the equation, is that you're

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Speaker 1: forty one, right, and you've done so much heavy lifting

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Speaker 1: on the investing side over the past like eighteen ish last.

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Speaker 2: Years, close to twenty years of trying to like be

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Speaker 2: frugal and make wise decisions, and you can there's a

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Speaker 2: lot you can do over twenty years.

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Speaker 1: Yeah, And my guess is you'll probably get back to

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Speaker 1: investing next year. This is literally just a kind of

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Speaker 1: super fund pay cash for this renovation, and thin I'll

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Speaker 1: be back at it, as my guess, even though your

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Speaker 1: coastfire literally means you never have, but you probably will.

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Speaker 2: But it's just I felt the need to share that

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Speaker 2: because like I'm not trying to like pat myself on

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Speaker 2: the back or anything like that, but just because we

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Speaker 2: talk about investing so often on the show, and honestly,

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Speaker 2: there's like this identity crisis. There's this tension as a

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Speaker 2: cognitive dissonance, yes, that I'm holding with them on mind

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Speaker 2: because I'm just like, wait, am I allowed to do that?

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Speaker 2: And so I was thinking through this the other day

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Speaker 2: and I thought, man, there's a reason, a good reason

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Speaker 2: for us to talk about this here on the show.

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Speaker 2: And it's also helpful for me to be it's self

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Speaker 2: therapeutic jol for me to for us.

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Speaker 1: To have these conversations. This is probably a month ago.

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Speaker 1: We had a question on the podcast from someone who

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Speaker 1: had been crushing it thoroughly for a long period of

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Speaker 1: time and it was like, can I stop investing now?

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Speaker 1: And it's like, no, you can, you know, like we

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Speaker 1: really do. The answer is not always more work, more pay,

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Speaker 1: more investing, like sometimes the answer is more balanced and

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Speaker 1: you know, doing some fun things with that money that

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Speaker 1: are going to improve your life, right totally. So alright,

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Speaker 1: Mettlet's let's mention the beer we're having on this episode.

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Speaker 1: This one is kind of an oldie, but a classic

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Speaker 1: Samuel Smith nut brown. Ale. I still remember the first

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Speaker 1: Samuel Smith beer I had and it was like it

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Speaker 1: was a game changer for me. I'm curious to see

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Speaker 1: if it holds up because it's been a while since

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Speaker 1: I've had one of theirs. I didn't realize that it

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Speaker 1: says on the bottom here product of the UK. So

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Speaker 1: this is a British that's right, Ale, the old Tadcaster

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Speaker 1: Brewery or something like that is what it says. Do

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Speaker 1: you see that on there? Oh? I see it? Okay, Yeah,

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Speaker 1: So I'd be curious to know what though you picked

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Speaker 1: it up because you thought it said podcaster? Is this

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Speaker 1: a podcaster? Beer? My eyesight has deteriorated in these years,

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Speaker 1: But lett, let's move on. Let's get to the listener

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Speaker 1: questions that folks have sent our away. And if you

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Speaker 1: have a question for us, a money question in particular,

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Speaker 1: please do submit yours. Go to how to Money dot

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Speaker 1: com slash ask for specific details on how to make

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Speaker 1: that happen. But really it's just recording a voice memo

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Speaker 1: sending it to us to be an email. Hopefully we

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Speaker 1: can take it next week on the show. Matt, this

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Speaker 1: next question is kind of about optimizing your finances on

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Speaker 1: the biggest purchase of your life.

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Speaker 3: Hi, Matt and Joel, I hope you're both doing well.

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Speaker 3: My name is Colin and I'm an avid listener of

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Speaker 3: how to Money out here in Iowa. Your podcast has

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Speaker 3: been instrumental in shaping my approach to personal finance, and

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Speaker 3: I admire the practical wisdom both of you share. I'm

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Speaker 3: reaching out today seeking your advice on a decision my

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Speaker 3: wife and I are grappling with. Currently, we reside in

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Speaker 3: a condo owned by her father, where we cover all

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Speaker 3: associated expenses totally approximately one thousand per month with our

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Speaker 3: diligent savings. We've amassed fifty thousand earmarked for a down

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Speaker 3: payment on our future home. However, as a realtor with

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Speaker 3: firsthand experience in property management and home repairs, I find

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Speaker 3: myself contemplating an alternative path. Given our low housing expenses

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Speaker 3: and my familiarity with the real estate market, I wonder

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Speaker 3: if it might be wiser to invest our capital and

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Speaker 3: a rental property instead of purchasing our own residence right away.

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Speaker 3: My wife's remote work setup provides us with flexibility to

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Speaker 3: manage additional properties, and my skill set complements this endeavor.

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Speaker 3: We're at a crossroads and would greatly value your insights

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Speaker 3: on whether to prioritize homeownership or sees the opportunity enter

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Speaker 3: the real estate investment market. Your perspective would be immensely

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Speaker 3: helpful as we navigate this decision. Look forward to hearing

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Speaker 3: from you, guys.

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Speaker 2: Oh Joe, I love that Colin said that he was

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Speaker 2: looking to seize the opportunity. This question really gets me excited.

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Speaker 2: So capture the flag or something like that. Oh, yeah,

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Speaker 2: seize the day like there is there truly is a

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Speaker 2: massive opportunity here. And yeah, basically he's asking here if

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Speaker 2: he and his wife should buy a primary or should

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Speaker 2: they buy a rental home, And honestly, those decisions most

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Speaker 2: of the time they're close to being like polar opposites

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Speaker 2: of each other, like should I invest money or should

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Speaker 2: I actually spend it and buy a.

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Speaker 1: Jet ski company or invest in the company that makes

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Speaker 1: the jet skies.

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Speaker 2: Yeah, at least in this case, he's looking to buy

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Speaker 2: something that appreciates in value. But real estate owners, like

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Speaker 2: primary owners and investors, they're typically looking at two very

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Speaker 2: different things. When you are buying a home, you're like,

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Speaker 2: you're kind of buying a small business as an investor,

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Speaker 2: But the consider iterations and the financial reality is of

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Speaker 2: home ownership as it with it being a primary residence

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Speaker 2: are often more about buying something that makes sense for

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Speaker 2: you and your family, but that also fits into your budget,

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Speaker 2: maximizing returns and generating cash flow. Those are typically pretty

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Speaker 2: far from mind when you are looking at buying a

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Speaker 2: primary asident's.

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Speaker 1: For you to live in. And I think you can

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Speaker 1: be a little more investor minded when you're buying a

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Speaker 1: primary residence. And for some folks, they've heard us talk

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Speaker 1: about kind of buying the house living in it, then

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Speaker 1: turning it into a rental property. And if you kind

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Speaker 1: of have that mindset, and so, yeah, that's the way

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Speaker 1: to have your cake and eat it too. That's right.

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Speaker 1: It's possible to kind of have that approach, but still

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Speaker 1: most people don't. Let's be honest, most people watch the

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Speaker 1: TV show House Hunters and you'll really quickly understand what

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Speaker 1: most people are looking for in a home and it

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Speaker 1: has nothing to do with return on investment at least

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Speaker 1: most of the time. And so really we're talking about

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Speaker 1: broccoli versus apples, Like we're not comparing apples to apples. We're

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Speaker 1: talking about two different food groups, veggies and fruits. But

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Speaker 1: the fact that you're asking this question, Colin, I would

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Speaker 1: say that means that you're keen to put your money

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Speaker 1: to work in a way that would generate returns instead

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Speaker 1: of just trying to maximize your lifestyle, right, And I

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Speaker 1: think that's a good thing. I think that would be

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Speaker 1: taking more of the broccoli route, like eating the vegies

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Speaker 1: know you're supposed to eat. And it sounds like you've

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Speaker 1: got a pretty sweet deal on rent right now. I

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Speaker 1: like the idea of keeping that bird in the hand

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Speaker 1: and then using the cash you built up to buy

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Speaker 1: rental instead, I would talk it over with your wife.

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Speaker 1: Of course, I'm sure you all are having this discussion,

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Speaker 1: because no matter how good the deal is, at some point,

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Speaker 1: if you have that desire, that innate desire to own

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Speaker 1: a home, that can outweigh the savings you're currently enjoying,

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Speaker 1: Especially if you hit that point in your life where you're,

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Speaker 1: like roots community, want to be in this one place

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Speaker 1: for a long time to come, that can often tip

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Speaker 1: the scales. And maybe, just like Matt who's not investing

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Speaker 1: for a period of time, maybe it makes sense to

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Speaker 1: make the non optimized choice. But if you guys can

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Speaker 1: agree at least for the time being, to postpone a

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Speaker 1: primary home purchase, maybe for a few years, buying a

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Speaker 1: rental property before buying a primary that can offer you

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Speaker 1: more financial exibility years down the road for a lot

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Speaker 1: of years to come.

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Speaker 2: Totally, yeah, I think it's all about your goals, Colin,

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Speaker 2: because like we all know that kicking the can down

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Speaker 2: the road on a personal or on a lifestyle purchase

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Speaker 2: like this, that that can allow all of us to

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Speaker 2: invest more. It allows us to experience some more rapid

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Speaker 2: progress towards our financial goals.

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Speaker 1: But Colin, he also has the tools to.

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Speaker 2: Be a good investor. That's right, he's gonna he's gonna

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Speaker 2: save money on realtor fees. That's like a secret little weapon.

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Speaker 2: That's like a superpower that he has. It is, and

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Speaker 2: he might know about properties that normal folks wouldn't know

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Speaker 2: about because he's a realtor.

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Speaker 1: He's got connections, his network of the word of mouth listings, right,

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Speaker 1: it's huge, pocket listings, pocket listings exactly. Gosh, the realtor

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Speaker 1: who helped us both buy our homes role. I think

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Speaker 1: he said, like eighty percent of his sales never hit

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Speaker 1: the market. Yeah, because that's he's pretty entrenched in the

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Speaker 1: community and he knows people, and so he might just

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Speaker 1: shoot you a text if he knows what you're looking

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Speaker 1: for exactly.

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Speaker 2: But then on top of that, con said that him

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Speaker 2: and his wife are both willing to self manage. He's

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Speaker 2: willing to perform repairs and maintenance in part because of

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Speaker 2: his wife's flexible schedule.

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Speaker 1: He mentioned that as well. So that's that's pretty sweet.

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Speaker 1: And the tag team approach, by the way, super helpful.

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Speaker 1: That's what I found like in the beginning, I was

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Speaker 1: usually responding to tenants finding tenants and managing a lot

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Speaker 1: of the day to day Emily was doing a lot

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Speaker 1: of kind of the bookkeeping, keeping up with the receipts,

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Speaker 1: all that stuff, the stuff I'm really bad at anyway

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Speaker 1: and hate doing. And so Joel in details like oil

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Speaker 1: and water, so not good, so not good. You know

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Speaker 1: this better than most people. And so i'm your business

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Speaker 1: wife basically, and so yeah, that that combo factor just

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Speaker 1: made it like an easier load. We got to specialize

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Speaker 1: in the things that we enjoyed that we were better at.

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Speaker 2: That's kind of what it sounds like they might be

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Speaker 2: doing as well, because he said he's handy, he can

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Speaker 2: handle repairs.

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Speaker 1: So, yeah, these are all funny. I wasn't really that

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Speaker 1: either thought more credit than yeah, you should give yourself

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Speaker 1: more credit. But I guess all of these things combined

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Speaker 1: makes it seem even more attractive for Yeah, for Colin,

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Speaker 1: I think the truth is investors who are more hands on,

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Speaker 1: especially in those early years, they have the ability to

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Speaker 1: maximize returns and boost your timeline to reach financial independence. Right,

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Speaker 1: and these extra tools in Collins tool belt make this

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Speaker 1: an even better decision. Right. It's the more you have

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Speaker 1: the ability to turn down the costs that you're gonna

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Speaker 1: incur to self manage to increase the productivity essentially of

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Speaker 1: this small business that you're buying, which is this rental property.

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Speaker 1: The more you have the ability to oversee it effectively,

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Speaker 1: I think, the more it makes sense feeding go that

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Speaker 1: route totally.

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Speaker 2: Yeah, So let's talk about another way though, that you

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Speaker 2: could have your cake and eat it too and do

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Speaker 2: both here and one fell swoop is to opt for

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Speaker 2: a house hack maybe even like a duplex or a triplex,

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Speaker 2: or maybe a single family home that has a carriage house,

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Speaker 2: an a to u, a basement apartment, something like that.

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Speaker 2: So I would at least consider looking at properties like

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Speaker 2: that if you have the desire for more space and

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Speaker 2: maybe you just don't have to take the elevator up

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Speaker 2: to your place anymore. But also if you want to

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Speaker 2: kind of scratch that rental property itch, I think that's

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Speaker 2: a way of doing it. Don't just consider the standard

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Speaker 2: single family home that maybe your thinking about before, Like yeah,

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Speaker 2: on the MLS, multi family housing like that is your

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Speaker 2: new best friend. But then, yeah, I'm just thinking of

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Speaker 2: your personal network as well, the ability to know of

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Speaker 2: other properties that have some of these income generating possibilities.

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Speaker 2: I think that could be.

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Speaker 1: Huge for you, Colin. Yeah, and the longer you're able

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Speaker 1: to stay keep your cost of living low, the more

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Speaker 1: you're gonna be able to funnel into investments, in particular

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Speaker 1: some of these real estate investments. And that means the

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Speaker 1: more financial flexibility you're going to incur along the way,

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Speaker 1: because hey, guess what, most years you're able to increase

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Speaker 1: that rent a little bit. Yeah, the property taxes go

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Speaker 1: up too, but typically your mortgage payment doesn't go up

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Speaker 1: by very much at all, and your rent continues to

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Speaker 1: increase over time. That just means a lot more financial

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Speaker 1: flexibility and the ability to continue to invest more if

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Speaker 1: you want, or start to pay down some of that

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Speaker 1: mortgage debt, if you're kind of taking more of the

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Speaker 1: Chad Carson approach.

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Speaker 2: Yeah, Colin has starting his real estate empire. I think

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Speaker 2: at a young age, just based on how I don't know,

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Speaker 2: I picture him being a younger listener.

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Speaker 1: This sounds I think, so sounds like it, And I

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Speaker 1: guess another thing that Colin could do. Another approach would

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Speaker 1: be to buy a strict rental duplex right now, right

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Speaker 1: and look for an income producing property when the two

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Speaker 1: of you are ready to get out of that condo.

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Speaker 1: So maybe you buy a duplex or a triplex or

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Speaker 1: something like that. You're renting out all those units, staying

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Speaker 1: in the condo, and then you know, combine that with

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Speaker 1: your day jobs the income from this rental property. You

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Speaker 1: can build up that nest egg really quickly for the

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Speaker 1: next place you want to buy. And then maybe that's

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Speaker 1: when you buy the single family home with the ADU

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Speaker 1: and boom, look at all of the income producing properties

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Speaker 1: then you have in your life just because you delayed

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Speaker 1: this purchase just a little bit and you made the

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Speaker 1: smart investing move on the front end. This sacrifice you're

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Speaker 1: making and the prioritization of investing before buying pays dividends

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Speaker 1: for decades. Yeah, so I just I mean, I love

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Speaker 1: that Colin would be willing to kind of put that

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Speaker 1: off for a little bit, make the what I would

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Speaker 1: say is like the harder move. When you've got that

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Speaker 1: kind of cash saved up, most people would say, it's

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Speaker 1: time to start looking at the home that we want

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Speaker 1: to be in for the next five to ten years

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Speaker 1: old of our dreams.

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Speaker 2: Yeah yeah, well yeah, and going back to I mean,

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Speaker 2: you said this at the very beginning but I think

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Speaker 2: for him and his wife, like finding a single family

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Speaker 2: home that they know that they're going to convert into

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Speaker 2: a rental property could be a really smart way as well,

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Speaker 2: because there's multiple benefits that you get there. By being

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Speaker 2: an owner occupant, you're gonna get a better rate that's

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Speaker 2: pretty sweet by living like I even hate saying this,

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Speaker 2: but you're not throwing away rent dollars, but because like

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Speaker 2: by living there and making your mortage payment for a

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Speaker 2: couple of years, you're gonna be building up equity. And

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Speaker 2: so that's the sweet advantage there as well. But then

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Speaker 2: you've got the lifestyle advantage as well, where it's like, okay, sweet,

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Speaker 2: we've got a backyard for the dog. Oh, now we've

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Speaker 2: there are some of those other more tangible lifestyle benefits

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Speaker 2: that you would experience as well. And so what that means, though,

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Speaker 2: is looking at homes while you're house shopping, not just

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Speaker 2: through the a lens of what would we like to

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Speaker 2: live in, but actually what'll work for now, what'll work

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Speaker 2: for the next couple of years, because you're not buying

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Speaker 2: the house of your dreams, you're buying a home maybe

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Speaker 2: for the next couple of years, and then after that

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Speaker 2: what you're hopefully looking for is a property that's gonna appreciate.

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Speaker 2: You're gonna you're looking to buy in an area that's

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Speaker 2: gonna smam that this area is gonna this part of

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Speaker 2: town's gonna really turn around. Oh yeah, I know about

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Speaker 2: because I've got my connections, and because he's a realtor,

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Speaker 2: he knows about another house further up the street that

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Speaker 2: somebody's moving into, or he knows about a commercial deal

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Speaker 2: that just went down, and the little square and there's

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Speaker 2: it's actually gonna be a coffee shop, and all of

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Speaker 2: a sudden, this little neighborhood is going to start blossoming.

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Speaker 2: That's the kind of property you want to get in

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Speaker 2: on now before a lot of that appreciation happen.

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Speaker 1: Yeah, and that is I think thinking of kind of,

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Speaker 1: like we said at the beginning, your primary home purchase

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Speaker 1: with more of an investor mentality. And I do think

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Speaker 1: that more hout of money listeners would be wise to

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Speaker 1: do that, to say, cool, is there a way I

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Speaker 1: can force appreciation into this property? Most primary homeowners aren't

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Speaker 1: thinking along those lines. They're typically thinking do the walls

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Speaker 1: have fresh pain on him? Now? Like, how does the

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Speaker 1: home loook when I tour it now, like instead of

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Speaker 1: seeing with that vision, the eye for the future exactly.

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Speaker 1: And I think if you can think of as a buyer,

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Speaker 1: even of a primary home a little more with that

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Speaker 1: investor lens, you're going to be better off over the

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Speaker 1: long haul, even if it means putting in some of

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Speaker 1: that sweat equity yourself and building up the home with

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Speaker 1: over time, with your own efforts. Yes, right, So best

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Speaker 1: of luck, Tea. Colm. Let us know what you end

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Speaker 1: up doing. Matt. We've got more questions to get to.

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Speaker 1: And since we're on the housing front, let's talk about

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Speaker 1: when do you sell investments in order to fund a

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Speaker 1: down payment. We'll talk about that and more right after this.

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Speaker 1: All right, we're back from the break.

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Speaker 2: Yeah, it seems like we've kind of housing theme going

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Speaker 2: on with this episode, because later on we're going to

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Speaker 2: talk about whether or not fifteen year mortgages are mistakes

426
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Speaker 2: or not. But before we get to that one, let's

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Speaker 2: hear from a listener in Wisconsin.

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Speaker 4: Hey, Matt and Joel, this is actually from Madison, Wisconsin,

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Speaker 4: originally from Texas. We moved here for my husband's residency

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Speaker 4: and we'll actually be moving again for a fellowship in

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Speaker 4: Chicago for the next two years. I've been listening to

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Speaker 4: you guys since twenty eighteen when I was just out

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Speaker 4: of college and totally lost on all things investing. Well,

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00:18:50,320 --> 00:18:52,040
Speaker 4: with your advice of the years, I've come to a

435
00:18:52,040 --> 00:18:54,359
Speaker 4: great problem to have. So we'll want to buy a

436
00:18:54,440 --> 00:18:56,560
Speaker 4: house at least a year after my husband is done

437
00:18:56,560 --> 00:18:59,560
Speaker 4: to training, probably in three to four years. We've been

438
00:18:59,600 --> 00:19:01,719
Speaker 4: able to have a lot at retirement accounts as well

439
00:19:01,760 --> 00:19:04,160
Speaker 4: as tax will brokerage accounts, which I've seen some really

440
00:19:04,240 --> 00:19:07,320
Speaker 4: high gains, and then any cash on hands our emergency fund,

441
00:19:07,359 --> 00:19:09,240
Speaker 4: and I've set aside our car payment which is paid

442
00:19:09,240 --> 00:19:12,040
Speaker 4: off soon. My question is how do I go about

443
00:19:12,080 --> 00:19:15,400
Speaker 4: selling investments for my down payment? Should I prioritize selling

444
00:19:15,440 --> 00:19:17,280
Speaker 4: funds with the smallest gains? Do I do all that

445
00:19:17,359 --> 00:19:20,240
Speaker 4: at once? And then how much do I sell? And

446
00:19:20,280 --> 00:19:23,439
Speaker 4: how do I easily estimate the tax liability? Also, I

447
00:19:23,480 --> 00:19:25,520
Speaker 4: will be transitioning to stay at home with her daughter

448
00:19:25,560 --> 00:19:27,560
Speaker 4: for the next two years, and we will most likely

449
00:19:27,560 --> 00:19:30,800
Speaker 4: break even with my husband's salary and expenses in Chicago.

450
00:19:31,280 --> 00:19:34,480
Speaker 4: Mind you, we are pretty frugal people. I really appreciate

451
00:19:34,520 --> 00:19:36,320
Speaker 4: all the work you put into this podcast, and I

452
00:19:36,359 --> 00:19:37,800
Speaker 4: look forward to hearing your thoughts.

453
00:19:38,400 --> 00:19:41,639
Speaker 2: So, Jill, obviously we're going to answer Ashley's question as asked,

454
00:19:41,960 --> 00:19:44,439
Speaker 2: but it's also worth pointing out that, I mean, she

455
00:19:44,560 --> 00:19:47,399
Speaker 2: is specifically looking at how or when she should be

456
00:19:47,440 --> 00:19:49,800
Speaker 2: selling investments for, like you said, a down payment. But

457
00:19:49,840 --> 00:19:52,600
Speaker 2: I think we can even broaden this question a little bit,

458
00:19:52,880 --> 00:19:55,119
Speaker 2: just as to when should I sell? How do I

459
00:19:55,160 --> 00:19:58,560
Speaker 2: go about selling investments for any sort of medium term goal?

460
00:19:58,640 --> 00:20:00,000
Speaker 1: Yeah, that's right. I mean there's just like so many

461
00:20:00,040 --> 00:20:03,480
Speaker 1: many factors you have to run that decision to sell

462
00:20:03,520 --> 00:20:06,280
Speaker 1: investments through before you just kind of say all right,

463
00:20:06,320 --> 00:20:08,720
Speaker 1: let's do it. You don't want to itch, you trigger

464
00:20:08,720 --> 00:20:13,000
Speaker 1: your finger and just like, well, wait the market looks

465
00:20:13,280 --> 00:20:14,960
Speaker 1: frothy or something like that, I guess I'll sell my

466
00:20:15,000 --> 00:20:17,440
Speaker 1: investments because I'm trying to time the market or something

467
00:20:17,480 --> 00:20:19,080
Speaker 1: like that. I mean, I think that is that is

468
00:20:19,080 --> 00:20:22,160
Speaker 1: one risk that people run. I feel like there's more people,

469
00:20:22,280 --> 00:20:25,560
Speaker 1: more questions we're getting now because of the extreme market

470
00:20:25,600 --> 00:20:28,719
Speaker 1: rise we've seen about selling investments and whether or not

471
00:20:28,720 --> 00:20:32,280
Speaker 1: it makes sense. But let's just say this, Ashley's in

472
00:20:32,280 --> 00:20:34,360
Speaker 1: a great position here, right, the fact that she's put

473
00:20:34,440 --> 00:20:36,960
Speaker 1: so much effort into investing over the past few years

474
00:20:37,440 --> 00:20:40,240
Speaker 1: will make it easier to dial back in a little

475
00:20:40,280 --> 00:20:42,840
Speaker 1: while for them as they move down to one income.

476
00:20:43,440 --> 00:20:46,560
Speaker 1: It's always tough to go from two paychecks to one,

477
00:20:47,040 --> 00:20:49,800
Speaker 1: but they have prepared well for this transition, right, And

478
00:20:49,840 --> 00:20:53,080
Speaker 1: this is just another reason to start investing early often

479
00:20:53,480 --> 00:20:56,119
Speaker 1: and to work towards having a high savings rate, because

480
00:20:56,119 --> 00:20:57,800
Speaker 1: you never know what life is going to hold and

481
00:20:57,840 --> 00:21:00,119
Speaker 1: when you might need to cut back dramatically when their

482
00:21:00,160 --> 00:21:02,440
Speaker 1: goals are going to shift in a serious way. Maybe

483
00:21:02,480 --> 00:21:04,280
Speaker 1: you get pregnant with triplets. Can you imagine that?

484
00:21:04,320 --> 00:21:04,439
Speaker 4: Man?

485
00:21:04,480 --> 00:21:06,639
Speaker 1: I mean, that's going to change everyone's life in a

486
00:21:06,640 --> 00:21:08,439
Speaker 1: big way, and it's going to change your finances in

487
00:21:08,480 --> 00:21:11,879
Speaker 1: a big way. Nobody maintains, of course, a strict fifteen

488
00:21:11,920 --> 00:21:14,200
Speaker 1: percent savings rate in and out every single year for

489
00:21:14,240 --> 00:21:16,439
Speaker 1: their entire life. You got to roll with the punches.

490
00:21:16,480 --> 00:21:18,760
Speaker 1: And for you, Matt, your savings rate has been significant

491
00:21:18,800 --> 00:21:21,040
Speaker 1: higher than that for so many years. Most people haven't

492
00:21:21,160 --> 00:21:24,879
Speaker 1: earned that flexibility because their savings rate is so paltry

493
00:21:24,880 --> 00:21:25,760
Speaker 1: to begin with. That's true.

494
00:21:25,840 --> 00:21:29,840
Speaker 2: Yeah, So for Ashley specifically, when it comes to selling

495
00:21:30,560 --> 00:21:32,520
Speaker 2: some of the different investments that you have you're not

496
00:21:32,560 --> 00:21:35,880
Speaker 2: gonna want to sell anything that are in tax advantaged accounts,

497
00:21:35,920 --> 00:21:39,119
Speaker 2: and so definitely keep those locked up because the penalties

498
00:21:39,160 --> 00:21:40,200
Speaker 2: and the tax that you'd have.

499
00:21:40,200 --> 00:21:41,160
Speaker 1: To pay would be.

500
00:21:42,640 --> 00:21:45,479
Speaker 2: Very prohibitive to that making any sense at all. So

501
00:21:45,560 --> 00:21:47,840
Speaker 2: we're really talking about selling some of the holdings within

502
00:21:47,960 --> 00:21:51,760
Speaker 2: a taxable brokerage account. And even then, we're only talking

503
00:21:51,800 --> 00:21:53,960
Speaker 2: about positions that you've held for at least three hundred

504
00:21:53,960 --> 00:21:57,879
Speaker 2: and sixty five days because crossing the threshold from short

505
00:21:57,960 --> 00:22:00,639
Speaker 2: term capital gains to long term capital gains, this is

506
00:22:00,680 --> 00:22:04,119
Speaker 2: going to reduce your taxable burden for three sixty four.

507
00:22:04,280 --> 00:22:07,919
Speaker 1: Sorry, you have to pay your period income tax, right right, Yeah,

508
00:22:08,000 --> 00:22:09,760
Speaker 1: and then you you talked about how much to set

509
00:22:09,760 --> 00:22:12,840
Speaker 1: aside for those long term capital gains that you're going

510
00:22:12,880 --> 00:22:14,800
Speaker 1: to be experiencing, not the short term capital gains.

511
00:22:14,840 --> 00:22:16,400
Speaker 2: It's actually not all that hard to do the math

512
00:22:16,440 --> 00:22:18,639
Speaker 2: on that. Just make sure that you have fifteen percent

513
00:22:18,840 --> 00:22:22,520
Speaker 2: of the total sale amount in cash come tax time

514
00:22:22,640 --> 00:22:24,120
Speaker 2: next year, you'll be prepared.

515
00:22:23,920 --> 00:22:27,960
Speaker 1: That's right. Basically, just a little under a year from now,

516
00:22:28,200 --> 00:22:30,639
Speaker 1: you will need to have that money to pay the irs.

517
00:22:31,000 --> 00:22:34,400
Speaker 1: You cash out one hundred k in gains specifically, in gains,

518
00:22:34,400 --> 00:22:36,760
Speaker 1: and that's just the amount you cash out. That is,

519
00:22:36,880 --> 00:22:39,480
Speaker 1: you'll o fifteen grand and tax coman this time next.

520
00:22:39,440 --> 00:22:42,280
Speaker 2: Year, and even not specifically next year, but whenever it

521
00:22:42,359 --> 00:22:44,080
Speaker 2: is that you actually make the make the sale.

522
00:22:44,119 --> 00:22:46,240
Speaker 1: If you make the sale in tax year twenty twenty four,

523
00:22:46,320 --> 00:22:46,880
Speaker 1: that's that's right.

524
00:22:46,880 --> 00:22:48,440
Speaker 2: Yeah, Because maybe you don't make the sale at all,

525
00:22:48,560 --> 00:22:51,120
Speaker 2: maybe you change your mind and something else happens, So.

526
00:22:51,240 --> 00:22:53,199
Speaker 1: Right, right, right, I think that's that's worth giving your

527
00:22:53,200 --> 00:22:54,960
Speaker 1: mind as well. So she also asked about how much

528
00:22:55,040 --> 00:22:58,760
Speaker 1: she should sell and win, and she basically said that

529
00:22:58,800 --> 00:23:01,840
Speaker 1: this money isn't urgently needed. We're talking about three to

530
00:23:01,840 --> 00:23:03,600
Speaker 1: four years, so it's probably not going to take.

531
00:23:04,160 --> 00:23:06,240
Speaker 2: That's a really nice runway of time to be able

532
00:23:06,240 --> 00:23:08,200
Speaker 2: to look into the future and start preparing.

533
00:23:09,040 --> 00:23:11,320
Speaker 1: Yeah. I really like the time friend that she's got. Yeah,

534
00:23:11,320 --> 00:23:13,080
Speaker 1: So if you needed the money a whole lot sooner,

535
00:23:13,160 --> 00:23:14,760
Speaker 1: let's say you were like, no, no, no, we going to

536
00:23:14,840 --> 00:23:17,320
Speaker 1: need it like this year next year, I would want

537
00:23:17,359 --> 00:23:19,760
Speaker 1: to make more of a swift exit. I would be

538
00:23:20,240 --> 00:23:23,520
Speaker 1: more concerned about letting that money ride in the stock market.

539
00:23:24,040 --> 00:23:25,960
Speaker 1: But as it is, I think what I would do, Matt,

540
00:23:25,960 --> 00:23:28,199
Speaker 1: I would take a dollar cost averaging approach. This is

541
00:23:28,240 --> 00:23:30,879
Speaker 1: exactly the way most people get into the market, putting

542
00:23:30,920 --> 00:23:33,600
Speaker 1: dollars in with every paycheck every two weeks. Well why

543
00:23:33,640 --> 00:23:36,560
Speaker 1: not take the same sort of approach selling funds every

544
00:23:36,600 --> 00:23:38,840
Speaker 1: month or every two weeks until you get to that

545
00:23:38,920 --> 00:23:42,040
Speaker 1: desired amount. And it also just means you're not trying

546
00:23:42,080 --> 00:23:45,800
Speaker 1: to time the market. You're selling funds consistently no matter what,

547
00:23:46,040 --> 00:23:48,359
Speaker 1: just like you would buy them. And then I'd also

548
00:23:48,400 --> 00:23:51,320
Speaker 1: be setting aside extra cash along the way, like you know,

549
00:23:51,400 --> 00:23:54,120
Speaker 1: she mentioned the car note. Once that's paid off, set

550
00:23:54,160 --> 00:23:57,600
Speaker 1: aside those dollars into a savings account. And maybe that

551
00:23:57,640 --> 00:23:59,959
Speaker 1: means you actually have to sell fewer investment dollars if

552
00:24:00,080 --> 00:24:02,600
Speaker 1: you can save more cash along the way, right, yeah,

553
00:24:02,640 --> 00:24:02,800
Speaker 1: you have.

554
00:24:02,840 --> 00:24:05,040
Speaker 2: The first time I listened to her question, like the

555
00:24:05,200 --> 00:24:07,560
Speaker 2: before I listened to the whole question, I was just like, well, no, no,

556
00:24:07,600 --> 00:24:08,840
Speaker 2: don't don't sell any investments.

557
00:24:08,880 --> 00:24:10,040
Speaker 1: Actually just save up the money.

558
00:24:10,040 --> 00:24:12,359
Speaker 2: But then she talked about how they would basically just

559
00:24:12,400 --> 00:24:14,840
Speaker 2: break even because of their living expenses and the fact

560
00:24:14,840 --> 00:24:17,480
Speaker 2: that they've got to reduced income. But obviously that's that

561
00:24:17,520 --> 00:24:19,520
Speaker 2: would be more ideal is to not have to take

562
00:24:19,560 --> 00:24:22,080
Speaker 2: any investments out as opposed to being able to sit

563
00:24:22,119 --> 00:24:23,040
Speaker 2: on that cash, because.

564
00:24:22,800 --> 00:24:25,240
Speaker 1: When you do take investments out, you're you're interrupting what

565
00:24:25,359 --> 00:24:28,600
Speaker 1: is it? Is it Warren Buffett's rule that Aremonger? I think, okay,

566
00:24:28,800 --> 00:24:32,920
Speaker 1: you're interrupting compounding unnecessarily. But then again, you can have

567
00:24:33,240 --> 00:24:36,480
Speaker 1: such a focus like Buffett and Monger and your investments

568
00:24:36,640 --> 00:24:39,359
Speaker 1: skyrocket overtime, and yet you have a hard time finding

569
00:24:39,359 --> 00:24:42,639
Speaker 1: yourself able to enjoy the results, the fruits of those returns.

570
00:24:42,680 --> 00:24:46,359
Speaker 2: Sure, yeah, so you mentioned dollar cost averaging by exiting

571
00:24:46,400 --> 00:24:48,919
Speaker 2: the market. I would so I would actually do something differently.

572
00:24:48,920 --> 00:24:51,639
Speaker 2: It feels me personally, because what is important to keep

573
00:24:51,680 --> 00:24:53,399
Speaker 2: in mind, And this is why I was looking to

574
00:24:53,440 --> 00:24:55,560
Speaker 2: the fact that she said that they're looking at three

575
00:24:55,640 --> 00:24:58,320
Speaker 2: to four years out from now, and that's at the

576
00:24:58,359 --> 00:25:02,240
Speaker 2: market three out of four years goes up. And so honestly,

577
00:25:02,280 --> 00:25:04,440
Speaker 2: if it was me, and actually if you are willing

578
00:25:04,480 --> 00:25:07,280
Speaker 2: to take on perhaps a little more risk, you have

579
00:25:07,320 --> 00:25:08,879
Speaker 2: a higher chance the odds are in your favor, you

580
00:25:08,880 --> 00:25:11,919
Speaker 2: have a higher chance of your investment actually increasing in value.

581
00:25:12,000 --> 00:25:14,040
Speaker 2: Were you to just leave it in the market over

582
00:25:14,040 --> 00:25:16,080
Speaker 2: the next three to four years, that's going to be

583
00:25:16,080 --> 00:25:16,920
Speaker 2: a personal decision.

584
00:25:16,920 --> 00:25:20,560
Speaker 1: Though, because but we'll you get outpace savings and CDs

585
00:25:20,600 --> 00:25:24,480
Speaker 1: over the next few years, especially with those on average elevated.

586
00:25:24,560 --> 00:25:26,879
Speaker 2: Yeah, but on average, I mean it's I guess the

587
00:25:26,920 --> 00:25:28,800
Speaker 2: FED hasn't announce that they're going to cut rates yet,

588
00:25:28,840 --> 00:25:30,760
Speaker 2: but there is a chance that those rates could come down.

589
00:25:30,800 --> 00:25:33,520
Speaker 2: And when you look at historical averages, I mean the SMP,

590
00:25:34,119 --> 00:25:36,400
Speaker 2: like you're looking at over ten percent over the long haul.

591
00:25:36,480 --> 00:25:39,400
Speaker 2: And so it comes down to if you could stomach

592
00:25:39,760 --> 00:25:42,639
Speaker 2: the market tanking and you needing that money, that's the

593
00:25:42,720 --> 00:25:45,119
Speaker 2: risk that you're basically taking on because it's not guaranteed.

594
00:25:45,720 --> 00:25:48,639
Speaker 2: But since the fifties, that is the return that you

595
00:25:48,680 --> 00:25:49,680
Speaker 2: can expect from the SMP.

596
00:25:49,880 --> 00:25:52,160
Speaker 1: And that's where dollar cost averaging helps take a little

597
00:25:52,160 --> 00:25:54,600
Speaker 1: bit of that emotional risk called d risks for sure.

598
00:25:54,640 --> 00:25:58,320
Speaker 1: And so yeah, you're saying, listen, I'm willing to miss

599
00:25:58,320 --> 00:26:01,399
Speaker 1: out on some of the potential upside to ensure that

600
00:26:01,440 --> 00:26:05,880
Speaker 1: I don't experience the real potential hardship of a bear

601
00:26:05,960 --> 00:26:08,520
Speaker 1: market for multiple years on end. And so much of

602
00:26:08,560 --> 00:26:10,280
Speaker 1: that comes down to I guess your personality, your personal

603
00:26:10,359 --> 00:26:13,080
Speaker 1: risk tolerance and how important it is, Like I don't know,

604
00:26:13,080 --> 00:26:15,000
Speaker 1: could you be flexible in some of those goals on

605
00:26:15,080 --> 00:26:18,479
Speaker 1: whether when you quit your job, if not, you might

606
00:26:18,520 --> 00:26:21,920
Speaker 1: want to make sure you're taking the less risky approach. Yeah. Yeah.

607
00:26:22,280 --> 00:26:24,280
Speaker 2: Another reason I think that if it was me that

608
00:26:24,280 --> 00:26:26,199
Speaker 2: I would wait to pull that money out is, like

609
00:26:26,240 --> 00:26:28,439
Speaker 2: you said, like your flexibility. But also there is a

610
00:26:28,560 --> 00:26:30,879
Speaker 2: chance that I mean, I think her husband's a doctor.

611
00:26:31,040 --> 00:26:34,040
Speaker 2: What if he gets like a fat sweet signing batus

612
00:26:34,359 --> 00:26:36,040
Speaker 2: in order to go to a certain hospital and he

613
00:26:36,040 --> 00:26:37,520
Speaker 2: takes that and all of a sudden they find themselves

614
00:26:37,560 --> 00:26:38,360
Speaker 2: with more cash on hand.

615
00:26:38,440 --> 00:26:41,080
Speaker 1: What if she stepped out of work right in order

616
00:26:41,160 --> 00:26:42,040
Speaker 1: to take care of the baby.

617
00:26:42,280 --> 00:26:44,399
Speaker 2: Would if her former employer is just like, hey, we

618
00:26:44,440 --> 00:26:48,320
Speaker 2: really need you back twenty five thousand signing bonus boom?

619
00:26:48,760 --> 00:26:51,680
Speaker 2: What if there is an inheritance or parents that want

620
00:26:51,680 --> 00:26:53,520
Speaker 2: to give them money a few years from now. There

621
00:26:53,520 --> 00:26:56,240
Speaker 2: are all these other things that could lead to you

622
00:26:56,280 --> 00:26:58,719
Speaker 2: actually having more cash on hand than you realize that

623
00:26:58,760 --> 00:27:00,600
Speaker 2: you're expecting now. In grant it, I don't want you

624
00:27:00,640 --> 00:27:03,520
Speaker 2: to count on receiving those funds down the road, but

625
00:27:03,840 --> 00:27:06,879
Speaker 2: all of those situations could lead you to a situation

626
00:27:07,160 --> 00:27:09,919
Speaker 2: where you have sold investments over the past three to

627
00:27:10,000 --> 00:27:13,040
Speaker 2: four years all the while paying long terms capital gains

628
00:27:13,040 --> 00:27:15,000
Speaker 2: tax on that and now you're like, tang it, I

629
00:27:15,000 --> 00:27:16,800
Speaker 2: wish I would have left that money invested because actually

630
00:27:16,800 --> 00:27:17,639
Speaker 2: don't need it right now.

631
00:27:17,720 --> 00:27:20,560
Speaker 1: Yeah. Yeah, So it's hard to predict some of those

632
00:27:20,560 --> 00:27:23,840
Speaker 1: things to know, Yeah, but all things to consider. Yeah,

633
00:27:23,840 --> 00:27:25,479
Speaker 1: I guess those are all things to weigh in your

634
00:27:25,520 --> 00:27:27,840
Speaker 1: mind as to win how how much you end up

635
00:27:27,880 --> 00:27:32,600
Speaker 1: taking out from your taxable brokerage account. And of course,

636
00:27:32,640 --> 00:27:36,280
Speaker 1: taxable brokerages accounts can be great for medium term investing

637
00:27:36,320 --> 00:27:39,399
Speaker 1: goals like buying a house for instance. For any how,

638
00:27:39,440 --> 00:27:41,080
Speaker 1: too many listeners out there and they're wondering, well, what

639
00:27:41,119 --> 00:27:43,800
Speaker 1: should I do if I'm saving up for a down payment? Well,

640
00:27:43,840 --> 00:27:46,600
Speaker 1: a taxable brokerage account is the right answer if you're

641
00:27:46,720 --> 00:27:49,760
Speaker 1: five plus years off from buying a house, right. If

642
00:27:49,800 --> 00:27:51,920
Speaker 1: you're like, I'm eighteen months off from buying a house, well,

643
00:27:51,920 --> 00:27:54,440
Speaker 1: the high held SAMES account is probably the better answer. Notes, right.

644
00:27:54,440 --> 00:27:57,080
Speaker 1: But the other thing too Matt to consider is that

645
00:27:57,240 --> 00:27:59,800
Speaker 1: if Ashley and her husband can hit the twenty percent

646
00:27:59,800 --> 00:28:01,840
Speaker 1: more when it comes to how much they're able to

647
00:28:01,840 --> 00:28:05,000
Speaker 1: put down on the property that they're buying, it'll reduce

648
00:28:05,040 --> 00:28:06,800
Speaker 1: the amount they need to borrow, which is even more

649
00:28:06,840 --> 00:28:09,679
Speaker 1: helpful given how high interest rates are, and you know,

650
00:28:09,720 --> 00:28:12,119
Speaker 1: also will help them to avoid PMI, which is another

651
00:28:12,359 --> 00:28:15,400
Speaker 1: pesky monthly fee. So those are all things worth considering too.

652
00:28:15,440 --> 00:28:17,760
Speaker 1: If you take out enough to get to fifteen percent down,

653
00:28:17,840 --> 00:28:19,640
Speaker 1: but then you end up paying those other things, well

654
00:28:19,640 --> 00:28:21,679
Speaker 1: it might have been worth taking more money out of

655
00:28:21,720 --> 00:28:25,040
Speaker 1: investments and interrupting that compounding, not just for the lifestyle

656
00:28:25,119 --> 00:28:27,359
Speaker 1: goals you have, but also to save money and fees

657
00:28:27,400 --> 00:28:29,240
Speaker 1: on in other ways.

658
00:28:29,320 --> 00:28:32,720
Speaker 2: I like the fact that she's almost practicing taking money

659
00:28:32,720 --> 00:28:35,320
Speaker 2: out of the market by funding this short term goal

660
00:28:35,359 --> 00:28:38,560
Speaker 2: of hers that also most likely will increase in value,

661
00:28:38,560 --> 00:28:40,440
Speaker 2: because I feel like that you can get sucked into

662
00:28:40,440 --> 00:28:43,400
Speaker 2: this trap of thinking, oh, anytime you sell investments, that's

663
00:28:43,400 --> 00:28:46,240
Speaker 2: a bad thing. But like this is precise Like we're

664
00:28:46,240 --> 00:28:48,720
Speaker 2: pointing out the fact that brokerage account is good for

665
00:28:48,760 --> 00:28:51,960
Speaker 2: medium term goals. It's precisely what it's designed for. Because

666
00:28:51,960 --> 00:28:54,520
Speaker 2: if you're talking long term, well, that's what retirement accounts

667
00:28:54,520 --> 00:28:56,360
Speaker 2: are for, and they've already got those funded and so

668
00:28:56,440 --> 00:29:00,000
Speaker 2: this is like exactly what this brokerage account should be

669
00:29:00,080 --> 00:29:03,320
Speaker 2: use for. She's using the account ask prescribed as exactly exactly,

670
00:29:03,440 --> 00:29:06,560
Speaker 2: and when it comes to which investments to sell, honestly,

671
00:29:06,560 --> 00:29:07,440
Speaker 2: I wouldn't think.

672
00:29:07,480 --> 00:29:10,000
Speaker 1: Too much about how much they've appreciated or not.

673
00:29:10,640 --> 00:29:13,440
Speaker 2: Instead, I think about which investments that you have the

674
00:29:13,480 --> 00:29:17,360
Speaker 2: most faith in moving forward. So I'm not sure if

675
00:29:17,400 --> 00:29:20,320
Speaker 2: you own any individual stocks or a bunch of like

676
00:29:20,360 --> 00:29:24,160
Speaker 2: sector specific ETFs, but I would ask myself which funds

677
00:29:24,240 --> 00:29:27,440
Speaker 2: would I buy first with any extra cash on hand today,

678
00:29:28,040 --> 00:29:30,480
Speaker 2: and just keep those around and sell the others. I

679
00:29:30,480 --> 00:29:33,440
Speaker 2: think this could be a good opportunity to potentially call

680
00:29:33,520 --> 00:29:36,520
Speaker 2: some of your investing mistakes if you feel like you've

681
00:29:36,560 --> 00:29:39,040
Speaker 2: made any, and then you know, selling the losers will

682
00:29:39,160 --> 00:29:40,600
Speaker 2: up to a certain point that'll help you out from

683
00:29:40,600 --> 00:29:43,480
Speaker 2: a tax standpoint as well. So something to keep in mind,

684
00:29:43,520 --> 00:29:46,280
Speaker 2: I wouldn't be too concerned over what it is that

685
00:29:46,320 --> 00:29:46,720
Speaker 2: you're selling.

686
00:29:46,800 --> 00:29:49,160
Speaker 1: Yeah, I agreed. So Actually, I feel like our answer

687
00:29:49,160 --> 00:29:50,800
Speaker 1: in so many ways here is choose your own adventure,

688
00:29:50,800 --> 00:29:53,840
Speaker 1: but hopefully we gave you enough thoughts to help you

689
00:29:53,960 --> 00:29:56,400
Speaker 1: choose wisely. Matt, let's get to our next question. This

690
00:29:56,440 --> 00:30:00,240
Speaker 1: one comes from a listener. He homebrews great beer. He's

691
00:30:00,280 --> 00:30:02,880
Speaker 1: got a nerdy question about savings rates. Hey, Matt, and Joel.

692
00:30:03,320 --> 00:30:06,880
Speaker 5: This is Graham from Atlanta aka your local homebrew supplier.

693
00:30:07,520 --> 00:30:09,800
Speaker 5: On a previous episode, a caller asked if four to

694
00:30:09,880 --> 00:30:12,440
Speaker 5: one k match should be considered as part of their

695
00:30:12,520 --> 00:30:15,240
Speaker 5: savings rate. I personally include the match as part of

696
00:30:15,240 --> 00:30:17,760
Speaker 5: my total income and do include it as part of

697
00:30:17,760 --> 00:30:22,400
Speaker 5: my savings rate calculations. My question is this, should folks

698
00:30:22,440 --> 00:30:25,120
Speaker 5: consider a five twenty nine plan contributions as part of

699
00:30:25,160 --> 00:30:28,640
Speaker 5: their overall savings rate? On one hand, the beneficiary of

700
00:30:28,680 --> 00:30:30,680
Speaker 5: a five twenty nine plan can be changed to any

701
00:30:30,720 --> 00:30:34,320
Speaker 5: family member, including oneself, at any time, but the purpose

702
00:30:34,360 --> 00:30:36,680
Speaker 5: of most folks five twenty nine plans is for the

703
00:30:36,680 --> 00:30:40,800
Speaker 5: benefit of someone other than themselves. Similarly, how would you

704
00:30:40,800 --> 00:30:43,800
Speaker 5: classify the saving that folks do for a large purchase

705
00:30:43,920 --> 00:30:46,720
Speaker 5: or for gifts for the holiday season? Perhaps a better

706
00:30:46,800 --> 00:30:51,000
Speaker 5: question is what'll qualifies as saving versus not saving? Thanks

707
00:30:51,000 --> 00:30:52,960
Speaker 5: for all that you do, and I would like to

708
00:30:53,000 --> 00:30:55,120
Speaker 5: cast my vote for the next How to Money Atlanta

709
00:30:55,200 --> 00:30:58,480
Speaker 5: meetup for the Beer Garden behind Brick Store pub or

710
00:30:58,680 --> 00:31:00,520
Speaker 5: contrast artisan Ales and Shambly.

711
00:31:01,360 --> 00:31:01,719
Speaker 1: Graham.

712
00:31:01,960 --> 00:31:04,080
Speaker 2: Great to hear from you and we will definitely get

713
00:31:04,080 --> 00:31:07,000
Speaker 2: another Atlanta meet up beer meet up on the calendar soon,

714
00:31:07,200 --> 00:31:08,080
Speaker 2: he mentioned.

715
00:31:07,800 --> 00:31:11,040
Speaker 1: But only if he brings us more homebroom. It's brew. No,

716
00:31:11,200 --> 00:31:13,760
Speaker 1: you don't have to do that, Graham. The first actually

717
00:31:13,800 --> 00:31:15,640
Speaker 1: he does. He brewed us free Fruit Gal.

718
00:31:15,840 --> 00:31:18,400
Speaker 2: Remember we completely We should have like turned in our

719
00:31:18,440 --> 00:31:20,600
Speaker 2: dad cards for not getting that pun.

720
00:31:21,440 --> 00:31:24,760
Speaker 1: The name of the beer was free Freu now suspended

721
00:31:24,760 --> 00:31:26,280
Speaker 1: for six months. He had to email us and it

722
00:31:26,400 --> 00:31:29,200
Speaker 1: was like, dudes, it was fru frugal or fruit. Yeah.

723
00:31:29,200 --> 00:31:30,640
Speaker 1: I don't know exactly know how you say it, but

724
00:31:30,760 --> 00:31:33,600
Speaker 1: basically it's a frugal pun. I love it. He mentioned

725
00:31:33,600 --> 00:31:35,640
Speaker 1: the brick store. We love that as well. And also

726
00:31:35,680 --> 00:31:38,360
Speaker 1: you mentioned artisan ales, contrast artists and nails.

727
00:31:38,440 --> 00:31:40,600
Speaker 2: I'm sorry, yeah, contrast artisan nails. We're actually going to

728
00:31:40,680 --> 00:31:42,880
Speaker 2: get one of those near us, I guess. I guess

729
00:31:42,880 --> 00:31:44,240
Speaker 2: it's their second location there.

730
00:31:44,400 --> 00:31:45,080
Speaker 1: I'm very excited.

731
00:31:45,120 --> 00:31:47,840
Speaker 2: Me too, me too, because we don't have the best

732
00:31:47,960 --> 00:31:50,040
Speaker 2: craft beer. We went from being in town where it

733
00:31:50,080 --> 00:31:52,760
Speaker 2: was hip, where all the great beer was, to someplace

734
00:31:52,760 --> 00:31:54,560
Speaker 2: where there's not great craft beer.

735
00:31:54,560 --> 00:31:56,800
Speaker 1: We're in a craft beer desert, and that's about to change.

736
00:31:56,880 --> 00:31:57,280
Speaker 1: It's true.

737
00:31:57,840 --> 00:32:02,320
Speaker 2: But the savings rate or chat continues because Graham says

738
00:32:02,480 --> 00:32:04,960
Speaker 2: that a four to one k match should definitely be

739
00:32:05,000 --> 00:32:08,000
Speaker 2: considered as part of your savings rate, which we're okay

740
00:32:08,040 --> 00:32:11,760
Speaker 2: with as long as it elevates your desire to I

741
00:32:11,800 --> 00:32:14,400
Speaker 2: think reach a higher savings rate, because if you get,

742
00:32:14,480 --> 00:32:16,560
Speaker 2: let's say a six percent match from your employer, and

743
00:32:16,600 --> 00:32:19,479
Speaker 2: you've heard us say that, hey, shoot for fifteen percent,

744
00:32:19,800 --> 00:32:21,680
Speaker 2: and so what you then end up doing is bumping

745
00:32:21,720 --> 00:32:23,760
Speaker 2: the total amount that you're soalking away down to nine

746
00:32:23,880 --> 00:32:27,000
Speaker 2: just so you kind of like plateau at fifteen percent. Yeah,

747
00:32:27,560 --> 00:32:29,400
Speaker 2: I think that may not be and like, that's not

748
00:32:29,480 --> 00:32:31,000
Speaker 2: what we're trying to encourage you to do. We're not

749
00:32:31,000 --> 00:32:33,680
Speaker 2: setting a limit, well, like an upper limit. We're trying

750
00:32:33,720 --> 00:32:35,760
Speaker 2: to set like a lower limits. We don't want you

751
00:32:35,800 --> 00:32:38,200
Speaker 2: to go any below fifteen percent, and anything above that

752
00:32:38,440 --> 00:32:39,000
Speaker 2: it's gravy.

753
00:32:39,080 --> 00:32:40,400
Speaker 1: Yeah, I think it's a letter of the law or

754
00:32:40,400 --> 00:32:42,520
Speaker 1: spirit of the law to right. And there is that

755
00:32:42,640 --> 00:32:44,680
Speaker 1: sort of going with I don't know I'm going to

756
00:32:44,720 --> 00:32:46,120
Speaker 1: get in trouble for this, but going at the flow

757
00:32:46,160 --> 00:32:48,320
Speaker 1: of traffic instead of just going the speed limit sign,

758
00:32:48,320 --> 00:32:50,640
Speaker 1: if you're holding everybody up, at least in Atlanta, we

759
00:32:50,680 --> 00:32:52,320
Speaker 1: know that quite well, and you're more likely to get

760
00:32:52,360 --> 00:32:54,880
Speaker 1: an accident if you're going fifty five and certain.

761
00:32:54,640 --> 00:32:58,040
Speaker 2: Sectuals, following the letter of the law and going exactly

762
00:32:58,080 --> 00:32:59,280
Speaker 2: the speed limit you will cause.

763
00:32:59,160 --> 00:33:00,640
Speaker 1: Rex I will get a negative emails for that.

764
00:33:00,720 --> 00:33:03,960
Speaker 2: But I think this is the that's the jol Sol

765
00:33:04,080 --> 00:33:06,400
Speaker 2: is the one that advocates for speeding on our interstate.

766
00:33:06,480 --> 00:33:08,840
Speaker 1: It's me, it's my fault. So and in school zones too.

767
00:33:08,840 --> 00:33:11,480
Speaker 1: Ive seen him do that. No, but the letter of

768
00:33:11,480 --> 00:33:13,040
Speaker 1: the law or spirit of the law. Right, there's some

769
00:33:13,080 --> 00:33:16,240
Speaker 1: things where when we say fifteen percent, and you're like, oh,

770
00:33:16,360 --> 00:33:19,640
Speaker 1: how can I craftily make sure I'm hitting that by

771
00:33:19,680 --> 00:33:22,120
Speaker 1: doing the bare minimum, Well, you're not gonna have as

772
00:33:22,200 --> 00:33:24,280
Speaker 1: much flexibility as some of the other people, some of

773
00:33:24,280 --> 00:33:26,840
Speaker 1: the listeners to the show who are saying, well, how

774
00:33:26,840 --> 00:33:28,880
Speaker 1: can I increase my saving strate to opt for maximum

775
00:33:28,880 --> 00:33:32,000
Speaker 1: flexibility and to reach greater levels of financial independence a

776
00:33:32,040 --> 00:33:34,480
Speaker 1: little bit sooner. And that doesn't mean breaking your back

777
00:33:34,760 --> 00:33:38,360
Speaker 1: with a hardcore, fire centric sort of approach, but I

778
00:33:38,400 --> 00:33:41,400
Speaker 1: think it does mean probably challenging yourself a little bit

779
00:33:41,560 --> 00:33:44,320
Speaker 1: and not just doing the bare minimum, even though you can.

780
00:33:44,480 --> 00:33:46,880
Speaker 1: I guess that's what you want to do. And I

781
00:33:46,920 --> 00:33:49,680
Speaker 1: think if you you know, if you're only saving fifteen percent,

782
00:33:49,720 --> 00:33:52,200
Speaker 1: which again we want to be the floor. If that's

783
00:33:52,200 --> 00:33:54,520
Speaker 1: what's going into your retirement account, that's really good, but

784
00:33:54,560 --> 00:33:57,040
Speaker 1: you'll also likely find you're keeping dead around longer than

785
00:33:57,080 --> 00:33:59,000
Speaker 1: you probably should, or that you're not able to save

786
00:33:59,040 --> 00:34:01,360
Speaker 1: for some of those more media term goals very well,

787
00:34:01,440 --> 00:34:04,360
Speaker 1: like buying a car with cash. And yeah, so I

788
00:34:04,360 --> 00:34:06,800
Speaker 1: guess we don't mind you including it in your savings

789
00:34:06,880 --> 00:34:09,919
Speaker 1: rate as long as you ensure that your savings rate

790
00:34:10,000 --> 00:34:11,040
Speaker 1: floor moves higher.

791
00:34:11,080 --> 00:34:12,799
Speaker 2: So I don't know if this is semantics, but like

792
00:34:12,920 --> 00:34:14,400
Speaker 2: what you're pointing to is the fact that, hey, you

793
00:34:14,400 --> 00:34:16,160
Speaker 2: should be saving more so that you can achieve some

794
00:34:16,160 --> 00:34:18,120
Speaker 2: of those medium term goals. Is that what you're saying. Yeah,

795
00:34:18,160 --> 00:34:19,799
Speaker 2: So what you're saying then is that So this is

796
00:34:19,800 --> 00:34:23,560
Speaker 2: to Graham's other question, is that those medium term goals,

797
00:34:23,719 --> 00:34:25,640
Speaker 2: like a vacation or something like that, that that should

798
00:34:25,640 --> 00:34:28,200
Speaker 2: be included in your savings rate? Is that what you're saying,

799
00:34:28,200 --> 00:34:30,200
Speaker 2: because you've kind of umped it into the savings rate.

800
00:34:30,239 --> 00:34:31,960
Speaker 1: Okay, So I guess a vacation I would see as

801
00:34:32,239 --> 00:34:34,560
Speaker 1: a different thing altogether, because I think of that as

802
00:34:35,120 --> 00:34:37,840
Speaker 1: a short term goal, something that probably should be in

803
00:34:37,880 --> 00:34:40,680
Speaker 1: your budget every single month that you're saving for whatever

804
00:34:40,680 --> 00:34:41,480
Speaker 1: that vacation is in.

805
00:34:41,440 --> 00:34:44,720
Speaker 2: August, or you go on vacations every month, you should

806
00:34:44,719 --> 00:34:46,399
Speaker 2: be if it's a five thousand dollars vacation, you should

807
00:34:46,440 --> 00:34:48,319
Speaker 2: be setting aside a little bit before other bucks every

808
00:34:48,320 --> 00:34:48,799
Speaker 2: single month.

809
00:34:48,800 --> 00:34:51,200
Speaker 1: I get that. Whereas the car man, I'm hoping, I don't.

810
00:34:51,360 --> 00:34:53,120
Speaker 1: I don't until the ribbone comes out in twenty twenty six.

811
00:34:53,160 --> 00:34:54,719
Speaker 1: But most of the time, I'm hoping that I buy

812
00:34:54,719 --> 00:34:57,200
Speaker 1: a car every eight or ten years something like that.

813
00:34:57,520 --> 00:34:59,400
Speaker 1: And because of that, I'm I think of that as

814
00:34:59,400 --> 00:35:01,520
Speaker 1: adding to my saving right. Because sure, I'm saving up

815
00:35:01,520 --> 00:35:03,520
Speaker 1: for a potential car purchase, I don't know how much

816
00:35:03,680 --> 00:35:05,839
Speaker 1: it's gonna cost or when I'm gonna need to pull

817
00:35:05,880 --> 00:35:08,280
Speaker 1: the trigger and buy that thing. But I am thinking

818
00:35:08,320 --> 00:35:10,800
Speaker 1: of all the money that I'm talking into liquid savings,

819
00:35:10,800 --> 00:35:13,560
Speaker 1: not just investments, as part of my savings right, even

820
00:35:13,600 --> 00:35:15,960
Speaker 1: though eventually at some point I'll need to access it.

821
00:35:16,040 --> 00:35:16,680
Speaker 1: I guess this is.

822
00:35:16,680 --> 00:35:19,120
Speaker 2: Where personal finance is personal, because like the way I

823
00:35:19,120 --> 00:35:21,920
Speaker 2: think about vacations up until I guess fairly you know

824
00:35:22,040 --> 00:35:24,839
Speaker 2: more recently, is that like we weren't never sure if

825
00:35:24,880 --> 00:35:26,839
Speaker 2: we were going to take a vacation every single year.

826
00:35:26,840 --> 00:35:28,480
Speaker 2: Like there were some years where we spent like a

827
00:35:28,480 --> 00:35:30,279
Speaker 2: ton of money on because it's like, hey, we're gonna

828
00:35:30,280 --> 00:35:32,799
Speaker 2: go to Europe for three weeks, which is something Kate

829
00:35:32,800 --> 00:35:34,480
Speaker 2: and I did like before.

830
00:35:34,239 --> 00:35:34,880
Speaker 1: We had kids.

831
00:35:35,200 --> 00:35:36,960
Speaker 2: But then there's years where we didn't go on vacation

832
00:35:37,000 --> 00:35:40,200
Speaker 2: at Also, in my mind, I pictured vacations truly a

833
00:35:40,239 --> 00:35:42,719
Speaker 2: lot like you picture buying a new car, because like

834
00:35:42,719 --> 00:35:43,800
Speaker 2: it's this unknown variable.

835
00:35:43,840 --> 00:35:45,600
Speaker 1: It's like, oh, maybe we'll go a little bit, or

836
00:35:45,640 --> 00:35:47,120
Speaker 1: we'll go to the beach, like that kind of thing.

837
00:35:47,120 --> 00:35:48,960
Speaker 1: But as most people budget a certain amount for that,

838
00:35:48,960 --> 00:35:50,800
Speaker 1: they've got an idea in mind, a lot of people

839
00:35:50,840 --> 00:35:53,120
Speaker 1: go back to the same place. It is For most

840
00:35:53,120 --> 00:35:55,719
Speaker 1: people at least they think of it as like a

841
00:35:55,719 --> 00:35:56,720
Speaker 1: recurring annual expense.

842
00:35:56,840 --> 00:35:59,640
Speaker 2: Yeah, so, I mean personally, I guess so much of

843
00:35:59,640 --> 00:36:02,120
Speaker 2: this I think has to do with what I'm saying

844
00:36:02,120 --> 00:36:02,600
Speaker 2: is you're weird.

845
00:36:03,440 --> 00:36:04,279
Speaker 1: Maybe so, maybe so.

846
00:36:04,440 --> 00:36:06,640
Speaker 2: But like I feel like my relationship to my savings

847
00:36:06,760 --> 00:36:10,640
Speaker 2: rate is very fluid because like being self employed virtually

848
00:36:10,719 --> 00:36:14,680
Speaker 2: my entire adult career. Be Like, so having a very

849
00:36:14,760 --> 00:36:18,600
Speaker 2: fluctuating income meant that that my savings rate varied wildly,

850
00:36:18,680 --> 00:36:21,359
Speaker 2: Like some years it was massive, but then some years

851
00:36:21,400 --> 00:36:24,080
Speaker 2: it was pretty it was pretty lean. But what that means, though,

852
00:36:24,160 --> 00:36:26,480
Speaker 2: is that the additional income that I had to set

853
00:36:26,480 --> 00:36:29,160
Speaker 2: aside towards something like a vacation, towards something like a

854
00:36:29,200 --> 00:36:32,040
Speaker 2: nicer car or a vehicle, or maintenance, just different things

855
00:36:32,040 --> 00:36:34,719
Speaker 2: that you save up for, it varied on how much

856
00:36:34,760 --> 00:36:38,200
Speaker 2: money we had left over after setting aside a floor

857
00:36:38,320 --> 00:36:41,840
Speaker 2: base floor amount for investing. And so that's why me personally,

858
00:36:41,840 --> 00:36:44,759
Speaker 2: I don't include those medium term goals within my quote

859
00:36:44,800 --> 00:36:48,000
Speaker 2: unquote savings rate because I want to create a floor

860
00:36:48,160 --> 00:36:49,960
Speaker 2: where I'm like, Okay, no matter what, I'm always going

861
00:36:50,000 --> 00:36:53,439
Speaker 2: to set aside fifteen percent if not more, towards long

862
00:36:53,560 --> 00:36:57,160
Speaker 2: term retirement investing. So for me, I don't know, And

863
00:36:57,160 --> 00:36:59,719
Speaker 2: maybe this it's like a nerdier way like super by

864
00:36:59,719 --> 00:37:01,680
Speaker 2: the Boks. There are, you know, very black and white

865
00:37:01,680 --> 00:37:03,400
Speaker 2: way of seeing the world. But Graham, I don't know

866
00:37:03,440 --> 00:37:05,040
Speaker 2: if that's helpful for you, but that's how that's how

867
00:37:05,040 --> 00:37:05,839
Speaker 2: I look at it at least.

868
00:37:06,200 --> 00:37:08,480
Speaker 1: Yeah. So I mean, really, this question of what is

869
00:37:08,560 --> 00:37:12,239
Speaker 1: savings is actually more complex than it might seem like, Yeah, yeah,

870
00:37:12,280 --> 00:37:14,840
Speaker 1: it really is. You might think that's simple question, guys,

871
00:37:15,080 --> 00:37:16,719
Speaker 1: let me tackle that one for you. But I think

872
00:37:16,880 --> 00:37:19,040
Speaker 1: when you delve into a little bit further, you're like, wait,

873
00:37:19,040 --> 00:37:21,239
Speaker 1: does paying off Hyder's debt? Does that kind of count

874
00:37:21,320 --> 00:37:24,800
Speaker 1: as savings? And I guess the answer is probably know,

875
00:37:25,120 --> 00:37:26,120
Speaker 1: but it's.

876
00:37:26,520 --> 00:37:30,279
Speaker 2: But it's not consumption, it's not living expenses for this month, right,

877
00:37:30,320 --> 00:37:33,160
Speaker 2: So in that way it kind of does, and so

878
00:37:33,400 --> 00:37:34,000
Speaker 2: it's not When.

879
00:37:33,840 --> 00:37:36,000
Speaker 1: We're alway talking, we're talking about growing the gap. Part

880
00:37:36,040 --> 00:37:37,960
Speaker 1: of that is funneling more money towards paying off the debt.

881
00:37:38,040 --> 00:37:41,480
Speaker 1: And if you had like a minimum fifteen percent savings, right,

882
00:37:41,480 --> 00:37:43,440
Speaker 1: and you're funneling money into investments, but it means you're

883
00:37:43,520 --> 00:37:46,080
Speaker 1: keeping around high intrastraate debt even longer, Well, then you

884
00:37:46,120 --> 00:37:48,640
Speaker 1: want to go dip into your savings rate for a

885
00:37:48,680 --> 00:37:50,279
Speaker 1: little bit and reduce it so that you can pay

886
00:37:50,280 --> 00:37:53,080
Speaker 1: off that high interra strate debt. It is a tricky conundrum,

887
00:37:53,640 --> 00:37:56,240
Speaker 1: but I like, I think, you know, saving and investing

888
00:37:56,239 --> 00:37:58,880
Speaker 1: are both kind of forms of delayed spending too, right,

889
00:37:59,000 --> 00:38:01,799
Speaker 1: So the goal is to eventually, you know, maybe kind

890
00:38:01,840 --> 00:38:03,840
Speaker 1: of sort of die with zero, right, as Bill Perkins

891
00:38:03,880 --> 00:38:06,239
Speaker 1: would say. The goal isn't to store up sums of

892
00:38:06,239 --> 00:38:08,239
Speaker 1: money so that we can hand it down to our

893
00:38:08,280 --> 00:38:12,240
Speaker 1: airs when we eventually pass away. And you know, debt

894
00:38:12,280 --> 00:38:15,600
Speaker 1: is essentially the opposite. You're prolonging the pain of a purchase.

895
00:38:15,920 --> 00:38:18,920
Speaker 1: But then savings, I think, Matt, savings is also more

896
00:38:18,960 --> 00:38:20,279
Speaker 1: than that. It's almost a little I think of it

897
00:38:20,280 --> 00:38:22,239
Speaker 1: in an existential way. I think of it as a

898
00:38:22,280 --> 00:38:26,160
Speaker 1: recognition that we have more than we need, and the

899
00:38:26,200 --> 00:38:28,680
Speaker 1: ability to set aside larger amounts of money feels like

900
00:38:28,719 --> 00:38:32,040
Speaker 1: a counter cultural act in today's America. That's true. We

901
00:38:32,080 --> 00:38:36,360
Speaker 1: talked about this recently, the average savings rate of everyday Americans.

902
00:38:36,400 --> 00:38:39,320
Speaker 1: It's paltry, it's pathetic. I think savings has this dual impact.

903
00:38:39,360 --> 00:38:42,120
Speaker 1: Living on less allows us to reach higher levels of

904
00:38:42,160 --> 00:38:45,719
Speaker 1: financial independence more quickly, and it also just allows us

905
00:38:45,760 --> 00:38:48,800
Speaker 1: to be comfortable living on less too. That's right.

906
00:38:48,840 --> 00:38:51,040
Speaker 2: And then Graham, okay, let's talk about the five twenty

907
00:38:51,120 --> 00:38:54,600
Speaker 2: nine part of your question. Should that be considered part

908
00:38:54,640 --> 00:38:57,239
Speaker 2: of your savings rate? Well, I kind of think so,

909
00:38:57,760 --> 00:38:59,719
Speaker 2: because even if you aren't saving for yourself, you're still

910
00:38:59,719 --> 00:39:02,440
Speaker 2: puting those dollars aside. And honestly, I think for me,

911
00:39:02,520 --> 00:39:06,279
Speaker 2: that's the biggest difference, is that money that you're quote

912
00:39:06,320 --> 00:39:08,839
Speaker 2: unquote saving are you setting it aside for more near

913
00:39:08,920 --> 00:39:11,520
Speaker 2: term use like a savings goal, or are you investing it?

914
00:39:11,600 --> 00:39:13,960
Speaker 2: And guess what, all the money I've got set aside

915
00:39:14,000 --> 00:39:16,840
Speaker 2: for my kids in five twenty nine accounts isn't in

916
00:39:16,880 --> 00:39:19,680
Speaker 2: fact set aside, It is actually invested. And that's why

917
00:39:19,719 --> 00:39:22,800
Speaker 2: for me, the savings rate includes five twenty nine s

918
00:39:22,840 --> 00:39:24,359
Speaker 2: because I'm investing those dollars.

919
00:39:24,400 --> 00:39:26,640
Speaker 1: Well, why does your savings rate only include investments?

920
00:39:26,680 --> 00:39:28,719
Speaker 2: I think it's just the at some point, what am

921
00:39:28,719 --> 00:39:30,960
Speaker 2: I going to live off of my investments? And so

922
00:39:31,040 --> 00:39:33,520
Speaker 2: it's about saving for the It's just like the squirrels,

923
00:39:33,640 --> 00:39:35,800
Speaker 2: like I don't know, storn up, the storing up the

924
00:39:35,800 --> 00:39:37,319
Speaker 2: acorns sweep for the long winter.

925
00:39:37,440 --> 00:39:40,720
Speaker 1: Distinguished between saving and investing. And there are savings accounts

926
00:39:40,840 --> 00:39:43,400
Speaker 1: right that we put money into for kind of the

927
00:39:43,719 --> 00:39:45,080
Speaker 1: That's where this gets so tricky.

928
00:39:45,160 --> 00:39:46,719
Speaker 2: R Yeah, yeah, Well because there's not there's not an

929
00:39:46,760 --> 00:39:48,520
Speaker 2: investing rate, Like, no one calls it that. They call

930
00:39:48,560 --> 00:39:50,160
Speaker 2: it a savings rate. And I think most people when

931
00:39:50,160 --> 00:39:52,759
Speaker 2: they say a savings rate with there what they're referring to, though,

932
00:39:52,880 --> 00:39:55,560
Speaker 2: is an investing rate. That's how I picture it, at least,

933
00:39:55,560 --> 00:39:59,000
Speaker 2: But if others out there if you're lumping in Christmas

934
00:39:59,080 --> 00:40:00,880
Speaker 2: because guess what, that's a bit expense and it happens

935
00:40:00,880 --> 00:40:01,239
Speaker 2: every year.

936
00:40:01,480 --> 00:40:03,440
Speaker 1: That's that's fine to do that. I think that's different

937
00:40:03,440 --> 00:40:05,799
Speaker 1: because I think that's that's something you expect every single year.

938
00:40:05,800 --> 00:40:07,160
Speaker 1: You need to be budgeting for that. You need to

939
00:40:07,160 --> 00:40:09,399
Speaker 1: be setting aside money for that, like you just said,

940
00:40:09,680 --> 00:40:12,480
Speaker 1: But you're also saving for other things that aren't just

941
00:40:12,840 --> 00:40:15,319
Speaker 1: post fifty nine and a half lifestyle, and that's where

942
00:40:15,320 --> 00:40:18,120
Speaker 1: you have to have some room, I think to include

943
00:40:18,239 --> 00:40:20,680
Speaker 1: other elements of saving in your savings rate. And I

944
00:40:20,680 --> 00:40:24,239
Speaker 1: don't know, maybe we've just kind of beaten the dead

945
00:40:24,360 --> 00:40:25,440
Speaker 1: and I'm with you. I'm with you on the five

946
00:40:25,440 --> 00:40:27,719
Speaker 1: twenty nine accounts, and I would also count that into

947
00:40:27,760 --> 00:40:30,400
Speaker 1: my savings rate. But this is also, Matt, why we

948
00:40:30,480 --> 00:40:33,919
Speaker 1: deemphasize five twenty nine plans so much on the show. Yes,

949
00:40:34,040 --> 00:40:37,040
Speaker 1: of course, they've gotten better with recent rule changes allowing

950
00:40:37,080 --> 00:40:39,160
Speaker 1: you to turn some of those five twenty nine dollars

951
00:40:39,360 --> 00:40:41,920
Speaker 1: into roth Ira dollars for your kids in future years.

952
00:40:42,440 --> 00:40:44,359
Speaker 1: But the main goal of saving money is for your

953
00:40:44,400 --> 00:40:47,160
Speaker 1: own financial freedom, and you know five twenty nine plans,

954
00:40:47,200 --> 00:40:49,920
Speaker 1: they are reserved for money. Gear seven and By the way,

955
00:40:49,960 --> 00:40:53,120
Speaker 1: there are only seven money years. They're reserve for that

956
00:40:53,160 --> 00:40:55,640
Speaker 1: final year, not because you want your kids to take

957
00:40:55,680 --> 00:40:57,640
Speaker 1: on loads of student load debt or anything like that,

958
00:40:57,960 --> 00:41:01,320
Speaker 1: but because they're only really appropriate if you've been crushing

959
00:41:01,320 --> 00:41:04,879
Speaker 1: your own finances for quite a long while, which likely

960
00:41:04,960 --> 00:41:07,319
Speaker 1: means you've had a high savings rate and now you

961
00:41:07,320 --> 00:41:10,160
Speaker 1: can dial back on personal investments in order to invest

962
00:41:10,200 --> 00:41:12,680
Speaker 1: in the next generation. Or maybe you've just got the

963
00:41:12,680 --> 00:41:15,080
Speaker 1: ability to expand your savings rate and do both at

964
00:41:15,120 --> 00:41:15,560
Speaker 1: the same time.

965
00:41:15,640 --> 00:41:17,640
Speaker 2: Oh, which, okay, So a whole other can of or

966
00:41:17,800 --> 00:41:20,400
Speaker 2: just open up in my mind, which is donor advice funds,

967
00:41:20,440 --> 00:41:23,759
Speaker 2: because is that money considered? Say it because there's money

968
00:41:23,800 --> 00:41:26,080
Speaker 2: that you've given away but you're in fact investing it.

969
00:41:26,480 --> 00:41:29,040
Speaker 2: Maybe we just won't go there. We'll say that for

970
00:41:29,280 --> 00:41:30,800
Speaker 2: another episode.

971
00:41:30,840 --> 00:41:33,120
Speaker 1: It is more complex than we give it, and hopefully

972
00:41:33,200 --> 00:41:35,440
Speaker 1: we get people's brains thinking about how they calculate their

973
00:41:35,480 --> 00:41:36,160
Speaker 1: own savings rate.

974
00:41:36,239 --> 00:41:37,919
Speaker 2: I think, more than anything, that's what I want people

975
00:41:37,920 --> 00:41:40,839
Speaker 2: to leave this particular question with is the fact that, man,

976
00:41:40,840 --> 00:41:42,960
Speaker 2: there are so many different ways to engage and to

977
00:41:43,000 --> 00:41:45,000
Speaker 2: think about your your own money. And that's what I

978
00:41:45,040 --> 00:41:47,440
Speaker 2: love about personal finances. You can kind of customize it,

979
00:41:47,560 --> 00:41:50,840
Speaker 2: chop it up, slice it, partition it however you want,

980
00:41:51,200 --> 00:41:53,840
Speaker 2: and specifically how it makes the most sense to you

981
00:41:53,880 --> 00:41:56,320
Speaker 2: because it's your money. But uh, Joel, we've got another

982
00:41:56,440 --> 00:41:58,120
Speaker 2: question to get to. We're going to talk about whether

983
00:41:58,200 --> 00:41:59,960
Speaker 2: or not the fifteen year mortgage, whether that's a mistake.

984
00:42:00,320 --> 00:42:02,000
Speaker 2: We'll get to that more right after this.

985
00:42:09,960 --> 00:42:10,520
Speaker 1: All right, man, we.

986
00:42:10,560 --> 00:42:13,880
Speaker 2: Are back and we always have our Facebook Question of

987
00:42:13,920 --> 00:42:15,839
Speaker 2: the week. I feel like we always try to live

988
00:42:15,840 --> 00:42:19,360
Speaker 2: our life without any regrets. But this listener this question,

989
00:42:19,880 --> 00:42:22,560
Speaker 2: they're wondering if maybe they've they've made that mistaken I.

990
00:42:22,600 --> 00:42:23,840
Speaker 1: Look at in the rear view mirror and they're like,

991
00:42:23,840 --> 00:42:24,799
Speaker 1: what have I done? What if I did?

992
00:42:25,120 --> 00:42:28,200
Speaker 2: Did I make the right decision? This anonymous person said,

993
00:42:28,239 --> 00:42:30,400
Speaker 2: wondering if I made the right decision about my mortgage

994
00:42:30,400 --> 00:42:32,720
Speaker 2: a while back. Bought my house right before the pandemic

995
00:42:32,719 --> 00:42:34,640
Speaker 2: with a four percent rate, thirty year term and was

996
00:42:34,640 --> 00:42:37,719
Speaker 2: paying PMI at one seventy seven a month. About two

997
00:42:37,760 --> 00:42:40,120
Speaker 2: years later, when the rates dropped and home values increased,

998
00:42:40,239 --> 00:42:43,080
Speaker 2: I refinanced four two point three seventy five percent for

999
00:42:43,239 --> 00:42:46,680
Speaker 2: fifteen years and was able to drop the PMI, which

1000
00:42:46,719 --> 00:42:49,160
Speaker 2: is always that's a good thing. The savings from the

1001
00:42:49,160 --> 00:42:51,640
Speaker 2: PMI and the rate drop, coupled with the shorter term,

1002
00:42:51,680 --> 00:42:53,880
Speaker 2: meant that I was only paying an extra three hundred

1003
00:42:53,920 --> 00:42:55,000
Speaker 2: and twenty dollars a month.

1004
00:42:55,320 --> 00:42:55,960
Speaker 1: At the time, I.

1005
00:42:55,920 --> 00:42:58,040
Speaker 2: Thought it was worth it to pay a little extra

1006
00:42:58,160 --> 00:43:00,840
Speaker 2: and finish that much sooner, and I didn't think of

1007
00:43:00,880 --> 00:43:04,040
Speaker 2: the overall monthly payment difference. I'm wondering if the shorter

1008
00:43:04,160 --> 00:43:06,360
Speaker 2: term was the right decision. I hated the idea of

1009
00:43:06,400 --> 00:43:09,040
Speaker 2: paying a higher rate than the two point three seventy five,

1010
00:43:09,360 --> 00:43:12,400
Speaker 2: although not significantly higher and still under three percent. But

1011
00:43:12,719 --> 00:43:14,839
Speaker 2: what I hated more was the idea of going from

1012
00:43:14,880 --> 00:43:16,440
Speaker 2: having twenty eight years.

1013
00:43:16,280 --> 00:43:17,760
Speaker 1: Left back up to thirty.

1014
00:43:18,080 --> 00:43:20,640
Speaker 2: I love the idea of being mortgage free in fifteen years,

1015
00:43:20,640 --> 00:43:23,920
Speaker 2: but now I'm thinking the thirty years would have allowed

1016
00:43:23,960 --> 00:43:24,880
Speaker 2: me to save.

1017
00:43:24,680 --> 00:43:25,960
Speaker 1: And or invest more.

1018
00:43:26,040 --> 00:43:28,319
Speaker 2: And if I went from the remaining twenty eight years

1019
00:43:28,360 --> 00:43:31,479
Speaker 2: to a new thirty year term, my monthly payment would

1020
00:43:31,480 --> 00:43:34,680
Speaker 2: have been seven hundred and twenty dollars less. Instead, I'm

1021
00:43:34,719 --> 00:43:37,839
Speaker 2: paying three hundred and twenty dollars more. It's a big

1022
00:43:37,880 --> 00:43:40,640
Speaker 2: difference there. Should I have used that extra one thousand,

1023
00:43:40,920 --> 00:43:43,359
Speaker 2: forty dollars somewhere else, Joel.

1024
00:43:43,640 --> 00:43:44,280
Speaker 1: What do you think.

1025
00:43:44,920 --> 00:43:46,520
Speaker 2: I think a lot of folks are finding themselves in

1026
00:43:46,520 --> 00:43:48,480
Speaker 2: a situation like this where they're just like, oh man.

1027
00:43:48,560 --> 00:43:50,840
Speaker 1: Because can I make the right move? Yeah, it's difficult

1028
00:43:50,880 --> 00:43:53,640
Speaker 1: to know. Well, it's hard to predict the future, right,

1029
00:43:53,680 --> 00:43:56,720
Speaker 1: This is totally a hindsight is twenty twenty sort of question.

1030
00:43:57,239 --> 00:43:59,759
Speaker 1: We can all look back on our life and not

1031
00:43:59,840 --> 00:44:01,879
Speaker 1: just on matters of personal finance. And by the way,

1032
00:44:01,920 --> 00:44:04,680
Speaker 1: this should be a minor regret, if a regret at all,

1033
00:44:04,760 --> 00:44:09,080
Speaker 1: because of how small it is, right, and nobody is

1034
00:44:09,200 --> 00:44:11,360
Speaker 1: typically crying about having a rate that's under two and

1035
00:44:11,400 --> 00:44:14,040
Speaker 1: a half percent these days, But at that point in time,

1036
00:44:14,080 --> 00:44:15,680
Speaker 1: it was really hard to predict the future. We didn't

1037
00:44:15,680 --> 00:44:17,719
Speaker 1: know mortgage rates we're going to skyrocket and then you

1038
00:44:17,760 --> 00:44:19,840
Speaker 1: would be able to earn more in a basic highield

1039
00:44:19,880 --> 00:44:23,359
Speaker 1: savings account than what your mortgage rate was. Because Matt,

1040
00:44:23,440 --> 00:44:26,040
Speaker 1: back then, what savings rates were paying half our percent,

1041
00:44:26,400 --> 00:44:29,520
Speaker 1: they were trash. It was really bad. And so locking

1042
00:44:29,600 --> 00:44:33,040
Speaker 1: in low interest rate debts for longer well seems smarter

1043
00:44:33,160 --> 00:44:35,520
Speaker 1: today than it did in the moment. But I did

1044
00:44:35,640 --> 00:44:37,839
Speaker 1: something very similar, Matt, And if I could go back

1045
00:44:37,840 --> 00:44:40,799
Speaker 1: and do it over again, I probably would change my route,

1046
00:44:40,880 --> 00:44:44,880
Speaker 1: but I refined multiple investment properties into fifteen year notes,

1047
00:44:45,280 --> 00:44:48,720
Speaker 1: and I kind of balanced it with refining other rental

1048
00:44:48,760 --> 00:44:51,840
Speaker 1: properties into thirty year notes. In the moment, it seemed

1049
00:44:51,840 --> 00:44:54,120
Speaker 1: really reasonably smart. I tried the fifteen year loans for

1050
00:44:54,120 --> 00:44:56,080
Speaker 1: thirty year loans if I could go back in time,

1051
00:44:56,360 --> 00:44:58,880
Speaker 1: freeing up that cash, right because because of the ability

1052
00:44:58,920 --> 00:45:00,920
Speaker 1: to earn more, not just in aimings, but to funnel

1053
00:45:00,920 --> 00:45:04,040
Speaker 1: more into investments. But back then, long term interest rate

1054
00:45:04,080 --> 00:45:06,400
Speaker 1: debt just didn't seem as good as it does today.

1055
00:45:06,840 --> 00:45:08,440
Speaker 1: And I get that it's hard not to feel like

1056
00:45:08,480 --> 00:45:10,319
Speaker 1: it was a mistake, but I'm pretty sure you're not

1057
00:45:10,360 --> 00:45:11,960
Speaker 1: going to feel all that bad when you pay off

1058
00:45:11,960 --> 00:45:13,600
Speaker 1: your mortgage ahead of most of your peers either.

1059
00:45:13,960 --> 00:45:16,040
Speaker 2: I will point to the fact that you mentioned funneling

1060
00:45:16,080 --> 00:45:19,439
Speaker 2: dollars additional dollars into investments as well, because even though

1061
00:45:19,480 --> 00:45:21,840
Speaker 2: we could not have foreseen like let's just say the

1062
00:45:21,880 --> 00:45:24,560
Speaker 2: past five even the past ten years, of what the

1063
00:45:24,600 --> 00:45:27,279
Speaker 2: market would do, we still know historical data. And that's

1064
00:45:27,280 --> 00:45:30,560
Speaker 2: the part that I have a tough time, I guess,

1065
00:45:30,600 --> 00:45:32,960
Speaker 2: getting past, because again, since the fifties, the S and

1066
00:45:33,040 --> 00:45:36,760
Speaker 2: P five hundred has earned has annualized over ten percent.

1067
00:45:37,200 --> 00:45:39,600
Speaker 2: And does that mean it's guaranteed to continue at that rate.

1068
00:45:39,680 --> 00:45:42,680
Speaker 2: Absolutely not. But that is the historical data that we have,

1069
00:45:42,840 --> 00:45:45,040
Speaker 2: which is literally why I guess you and I we

1070
00:45:45,120 --> 00:45:47,920
Speaker 2: have slightly different takes. But I refinanced from a fifteen

1071
00:45:48,000 --> 00:45:50,560
Speaker 2: year to a thirty year because like, in my mind,

1072
00:45:50,560 --> 00:45:53,520
Speaker 2: I'm like, rates are really low, and granted I'm paying

1073
00:45:53,560 --> 00:45:55,640
Speaker 2: more than I certainly paying more on a thirty year

1074
00:45:55,719 --> 00:45:58,359
Speaker 2: note than I would a fifteen it's still, in my mind,

1075
00:45:58,360 --> 00:46:00,480
Speaker 2: felt like the right decision for us, because like, I

1076
00:46:00,560 --> 00:46:02,600
Speaker 2: want to keep that mortgage around as long as possible

1077
00:46:03,160 --> 00:46:05,960
Speaker 2: knowing that I would invest that money right, knowing that

1078
00:46:05,960 --> 00:46:08,319
Speaker 2: I would invest that difference, And that's the in my mind,

1079
00:46:08,320 --> 00:46:11,680
Speaker 2: that is the key distinction, because would you have actually

1080
00:46:11,680 --> 00:46:13,160
Speaker 2: done that? And I think for a lot of folks

1081
00:46:13,520 --> 00:46:15,560
Speaker 2: the answer is like maybe they think they would, but

1082
00:46:15,640 --> 00:46:18,520
Speaker 2: it's difficult to know whether or not they would invest

1083
00:46:18,560 --> 00:46:22,520
Speaker 2: the difference. And that is why the forced savings method

1084
00:46:22,600 --> 00:46:25,880
Speaker 2: that homes that it requires of you. That's why it's

1085
00:46:26,000 --> 00:46:28,760
Speaker 2: the number one tool for people building their wealth in America.

1086
00:46:28,800 --> 00:46:30,640
Speaker 2: We don't love that that's the case, but it's because

1087
00:46:30,680 --> 00:46:31,280
Speaker 2: if you don't.

1088
00:46:31,080 --> 00:46:31,800
Speaker 1: Pay your mortgage.

1089
00:46:32,239 --> 00:46:34,120
Speaker 2: If you don't pay, you don't you can't stay like

1090
00:46:35,000 --> 00:46:36,879
Speaker 2: you are forced to pay your mortgage.

1091
00:46:36,520 --> 00:46:38,520
Speaker 1: And you'll skimp on everything else, including four h one

1092
00:46:38,560 --> 00:46:40,320
Speaker 1: K contributions to make sure you're able to continue to

1093
00:46:40,320 --> 00:46:42,399
Speaker 1: pay that mortgage. Yeah, you're right, You're right. I think

1094
00:46:42,560 --> 00:46:43,719
Speaker 1: the thirty year note.

1095
00:46:43,719 --> 00:46:45,440
Speaker 2: But I wanted to mention that because even like five

1096
00:46:45,480 --> 00:46:47,279
Speaker 2: years ago when we were telling we were I mean

1097
00:46:47,640 --> 00:46:49,400
Speaker 2: here on the show, like we were encouraging folks to

1098
00:46:49,440 --> 00:46:53,399
Speaker 2: refinance it. Like we were saying, Hey, generally speaking, this

1099
00:46:53,480 --> 00:46:55,919
Speaker 2: is the anomaly, and we are used to it because

1100
00:46:55,960 --> 00:46:57,719
Speaker 2: it feels like that this is all we've known, because

1101
00:46:57,800 --> 00:47:00,560
Speaker 2: it truly was all we had known. So of negative

1102
00:47:00,600 --> 00:47:02,319
Speaker 2: interest rates, you remember that since to Yeah, like it's

1103
00:47:02,400 --> 00:47:04,640
Speaker 2: almost like Japan or something like that, But since nine

1104
00:47:05,040 --> 00:47:07,279
Speaker 2: twenty ten, those were the rates that we knew and

1105
00:47:07,320 --> 00:47:10,120
Speaker 2: it felt normal. But at least I recall on the show,

1106
00:47:10,160 --> 00:47:12,799
Speaker 2: like we were telling folks, so please REFI because this

1107
00:47:12,920 --> 00:47:16,200
Speaker 2: is not normal. And I guess that historical data is

1108
00:47:16,200 --> 00:47:18,359
Speaker 2: what we want folks to keep in mind, like take

1109
00:47:18,400 --> 00:47:20,920
Speaker 2: the long view, don't be swayed by the headlines and

1110
00:47:21,160 --> 00:47:22,880
Speaker 2: what it is that folks are talking about today, but

1111
00:47:22,960 --> 00:47:26,920
Speaker 2: just truly look at the historical data to essentially wayfair yourself,

1112
00:47:26,960 --> 00:47:28,759
Speaker 2: you know, as to figure out as you're trying to

1113
00:47:28,840 --> 00:47:30,680
Speaker 2: pinpoint where you are on the map with your money.

1114
00:47:30,680 --> 00:47:33,839
Speaker 1: My guess is too that this this poster because of

1115
00:47:33,880 --> 00:47:36,560
Speaker 1: the specificity of the numbers here one thousand and forty,

1116
00:47:36,640 --> 00:47:38,560
Speaker 1: like they say, ah, somewhere in the thousand dollars rings

1117
00:47:38,600 --> 00:47:40,600
Speaker 1: Like they've run the numbers. They know how much they

1118
00:47:40,600 --> 00:47:42,719
Speaker 1: would have had on hand, Yeah, and that they would

1119
00:47:42,760 --> 00:47:45,160
Speaker 1: have in all likelihood used that money to do better things.

1120
00:47:45,160 --> 00:47:48,080
Speaker 2: Maybe they would have been disciplined and kind of yeah,

1121
00:47:48,200 --> 00:47:49,000
Speaker 2: for so much a.

1122
00:47:48,920 --> 00:47:50,880
Speaker 1: Market, like you're saying, though, depends on who you are,

1123
00:47:50,960 --> 00:47:52,879
Speaker 1: how you handle your money, what you do with extra

1124
00:47:52,920 --> 00:47:54,960
Speaker 1: money that comes in totally, and if you're of the

1125
00:47:55,000 --> 00:47:58,480
Speaker 1: bent to increase your savings right, funnel that into your

1126
00:47:58,480 --> 00:48:01,040
Speaker 1: four one K, your WROTH, I like, max out your

1127
00:48:01,160 --> 00:48:03,840
Speaker 1: HSA whatever. If you're gonna do those, take those steps

1128
00:48:03,920 --> 00:48:06,240
Speaker 1: with it, and you could maybe afford to fifteen year mortgage,

1129
00:48:06,239 --> 00:48:07,960
Speaker 1: which is awesome, but you're out for the thirty so

1130
00:48:08,040 --> 00:48:09,719
Speaker 1: you can do better things with that money. I think

1131
00:48:09,800 --> 00:48:12,759
Speaker 1: that is a reasonable and potentially an excellent choice. But

1132
00:48:12,880 --> 00:48:15,920
Speaker 1: if you are of the other bent and you're like,

1133
00:48:16,080 --> 00:48:18,000
Speaker 1: I can barely afford this house even on a thirty

1134
00:48:18,040 --> 00:48:20,200
Speaker 1: year note, lots of times that just gives people license

1135
00:48:20,239 --> 00:48:21,719
Speaker 1: to buy more house than they should. That's true.

1136
00:48:21,840 --> 00:48:23,400
Speaker 2: Yeah, I mean, at the end of the day, like,

1137
00:48:23,440 --> 00:48:26,560
Speaker 2: I don't think it was a mistake for this individual. Like,

1138
00:48:26,600 --> 00:48:29,040
Speaker 2: it depends on what you're optimizing for. Because if you

1139
00:48:29,480 --> 00:48:32,600
Speaker 2: optimize for peace of mind knowing that I own my

1140
00:48:33,120 --> 00:48:36,120
Speaker 2: home free and clear, nobody can take that away. If

1141
00:48:36,120 --> 00:48:38,759
Speaker 2: that's what you're optimizing for, then awesome, that's great, And

1142
00:48:38,800 --> 00:48:41,120
Speaker 2: a lot of really smart people do that. We recently

1143
00:48:41,120 --> 00:48:44,560
Speaker 2: talked with Marco about bitcoin on the show. That's something

1144
00:48:44,560 --> 00:48:48,000
Speaker 2: that that he's done. Morgan Housel, one of the smartest

1145
00:48:48,040 --> 00:48:51,080
Speaker 2: minds in personal finance right now, wrote The Psychology of Money.

1146
00:48:51,280 --> 00:48:51,960
Speaker 1: He has done that.

1147
00:48:51,960 --> 00:48:53,879
Speaker 2: We've known other folks who have paid off their house,

1148
00:48:53,960 --> 00:48:56,560
Speaker 2: not just gone for the fifteen year, but literally paid

1149
00:48:56,560 --> 00:48:59,399
Speaker 2: off their home so that they don't have any debt

1150
00:48:59,560 --> 00:49:02,840
Speaker 2: on their own. But if you are optimizing for the

1151
00:49:02,880 --> 00:49:05,480
Speaker 2: most financial return, like, that's where I have a hard

1152
00:49:05,480 --> 00:49:08,840
Speaker 2: time look and past the historical data. Ultimately, I mean,

1153
00:49:08,840 --> 00:49:11,319
Speaker 2: you can't go back in time, and in either case,

1154
00:49:11,520 --> 00:49:13,880
Speaker 2: you are doing really well, especially compared to the to

1155
00:49:13,920 --> 00:49:16,040
Speaker 2: the rest of the rest of the rest of America.

1156
00:49:16,040 --> 00:49:18,200
Speaker 2: And I think that that is more important to focus

1157
00:49:18,239 --> 00:49:20,760
Speaker 2: on the fact that you are still head and shoulders

1158
00:49:20,760 --> 00:49:22,640
Speaker 2: above what the majority of folks are doing.

1159
00:49:22,680 --> 00:49:25,359
Speaker 1: Yeah, And I do think that he's the poster is right.

1160
00:49:25,440 --> 00:49:27,200
Speaker 1: I don't know if it's he or she. Actually it's anonymous,

1161
00:49:27,239 --> 00:49:28,960
Speaker 1: but I think the poster is right to talk about

1162
00:49:29,280 --> 00:49:32,480
Speaker 1: kind of going back to the starting line. When you refinance,

1163
00:49:32,560 --> 00:49:34,520
Speaker 1: Let's say you've paid on your loan for five six

1164
00:49:34,600 --> 00:49:37,239
Speaker 1: years in this case it was just two, but then

1165
00:49:37,320 --> 00:49:40,200
Speaker 1: you refinance back into another thirty it does feel like

1166
00:49:40,239 --> 00:49:42,600
Speaker 1: you're starting from square one. Is like time lost. Yeah,

1167
00:49:42,640 --> 00:49:45,480
Speaker 1: And that can be a tough financial reality and also

1168
00:49:45,520 --> 00:49:47,920
Speaker 1: a tough psychological reality. So I think I think in

1169
00:49:47,960 --> 00:49:50,800
Speaker 1: that case, I also understand the impetus to try to

1170
00:49:50,800 --> 00:49:54,600
Speaker 1: actually accelerate that payoff, move things forward into a fifteen

1171
00:49:54,640 --> 00:49:57,280
Speaker 1: year note instead of a thirty And clearly this poster

1172
00:49:57,480 --> 00:49:59,160
Speaker 1: is in the good fortune of being able to afford

1173
00:49:59,320 --> 00:50:01,520
Speaker 1: that higher payment and then hopefully they're also able to

1174
00:50:01,520 --> 00:50:04,200
Speaker 1: do enough great things saving and investing regularly.

1175
00:50:04,239 --> 00:50:07,399
Speaker 2: Also, Yeah, Yeah, you can't underestimate the accountability that having

1176
00:50:07,400 --> 00:50:10,600
Speaker 2: a mortgage payment like that, that you know, because again

1177
00:50:10,640 --> 00:50:12,480
Speaker 2: I goes back to what would you have done? And

1178
00:50:12,560 --> 00:50:14,239
Speaker 2: it's tough to know without there being some sort of

1179
00:50:14,320 --> 00:50:16,960
Speaker 2: alternate reality, which is of course impossible.

1180
00:50:17,040 --> 00:50:20,040
Speaker 1: But uh, all right, Joe, lest you want to talk

1181
00:50:20,080 --> 00:50:23,319
Speaker 1: about nut brown Ale, the Samuel Smith's beer that you

1182
00:50:23,400 --> 00:50:25,480
Speaker 1: and I both enjoyed on our show. Like I said

1183
00:50:25,480 --> 00:50:29,240
Speaker 1: at the beginning, this brewery, I feel like I stumbled

1184
00:50:29,280 --> 00:50:32,560
Speaker 1: upon them early in my kind of craft beer newbie days,

1185
00:50:32,719 --> 00:50:34,239
Speaker 1: and I really enjoyed their stuff. And so I was like,

1186
00:50:34,239 --> 00:50:35,520
Speaker 1: oh man, I saw this, and I was like, he

1187
00:50:35,600 --> 00:50:38,799
Speaker 1: gave me some little bit of bite of nostalgia nostalgia vibe.

1188
00:50:38,800 --> 00:50:40,319
Speaker 1: I was like, I gotta let's we gotta try this

1189
00:50:40,320 --> 00:50:42,960
Speaker 1: one out on the show. And this has nutty light

1190
00:50:43,000 --> 00:50:45,520
Speaker 1: brown vibes. But it's not as good as I remember it.

1191
00:50:45,520 --> 00:50:48,279
Speaker 1: It's just and I just have this vision in my

1192
00:50:48,320 --> 00:50:49,560
Speaker 1: head of what it used to taste like, and it

1193
00:50:49,560 --> 00:50:51,560
Speaker 1: doesn't taste like that. It's pretty good, it's good, but

1194
00:50:51,600 --> 00:50:53,560
Speaker 1: it's just I don't know. I was in love with

1195
00:50:53,600 --> 00:50:54,399
Speaker 1: this beer back in the night.

1196
00:50:54,480 --> 00:50:56,560
Speaker 2: You did you have a story as to when the

1197
00:50:56,600 --> 00:50:58,399
Speaker 2: first time, the first time you enjoyed this beer.

1198
00:50:58,520 --> 00:51:00,520
Speaker 1: No, there was just this beer store, like right in

1199
00:51:00,560 --> 00:51:02,520
Speaker 1: the heart of the city, heart of Atlanta, that I

1200
00:51:02,560 --> 00:51:05,080
Speaker 1: would go to and I just remember what it is

1201
00:51:05,160 --> 00:51:07,120
Speaker 1: that there was, Like they had a porter, there was

1202
00:51:07,160 --> 00:51:09,080
Speaker 1: the Winter Welcome that would come out just in like

1203
00:51:09,120 --> 00:51:12,320
Speaker 1: around Christmas time all and I just remember like loving

1204
00:51:12,400 --> 00:51:14,840
Speaker 1: every single one of them. They had this unique flavor profile,

1205
00:51:15,239 --> 00:51:17,840
Speaker 1: kind of a thread running between all those beers. Interestingly enough,

1206
00:51:17,920 --> 00:51:20,200
Speaker 1: even though there were different styles, Yeah, it just tasted

1207
00:51:20,239 --> 00:51:23,839
Speaker 1: awesome because it wasn't but lighter, because it was way

1208
00:51:23,840 --> 00:51:24,879
Speaker 1: better than anything else I've ever had.

1209
00:51:24,920 --> 00:51:27,239
Speaker 2: Yeah, it makes me think it's funny because one of

1210
00:51:27,280 --> 00:51:29,799
Speaker 2: the early craft beers quote unquote craft beers that I

1211
00:51:29,800 --> 00:51:33,479
Speaker 2: found myself gravitated gravitating towards was a brown Ale as well.

1212
00:51:33,760 --> 00:51:36,120
Speaker 1: Abita's Turbo Dog was.

1213
00:51:36,200 --> 00:51:38,040
Speaker 2: A favorite of mine. That was one of my favorite

1214
00:51:38,080 --> 00:51:41,000
Speaker 2: shower beers. Living up in the woods of North Carolina

1215
00:51:41,080 --> 00:51:43,440
Speaker 2: with then the house that we rented had a window

1216
00:51:43,600 --> 00:51:46,520
Speaker 2: that you could open into the shower and so literally

1217
00:51:47,120 --> 00:51:47,720
Speaker 2: it was awesome.

1218
00:51:47,760 --> 00:51:47,880
Speaker 4: Man.

1219
00:51:47,960 --> 00:51:50,560
Speaker 2: I would come in from chopping wood like literally, that's

1220
00:51:50,560 --> 00:51:54,000
Speaker 2: how we heeded our house. Mountain man splitting wood and

1221
00:51:54,320 --> 00:51:56,560
Speaker 2: take a shower, open the window to the to the

1222
00:51:56,600 --> 00:51:59,120
Speaker 2: great outdoors, and I would have the beer sitting there

1223
00:51:59,120 --> 00:52:01,120
Speaker 2: on the shelf. I'll take hot shower. Didn that sound great,

1224
00:52:01,160 --> 00:52:05,200
Speaker 2: sounds pretty lovely. Shower beer underrated, but this the flavors,

1225
00:52:05,200 --> 00:52:08,040
Speaker 2: the toasting notes reminded me of as a kid. I

1226
00:52:08,120 --> 00:52:11,320
Speaker 2: used to peel the crust off of slices of bread

1227
00:52:11,680 --> 00:52:13,480
Speaker 2: and I would say that for last because I loved

1228
00:52:13,520 --> 00:52:15,400
Speaker 2: it so much. And that's what those days would like

1229
00:52:15,960 --> 00:52:16,279
Speaker 2: to the bread.

1230
00:52:16,320 --> 00:52:16,640
Speaker 1: I get that.

1231
00:52:16,719 --> 00:52:18,879
Speaker 2: Yeah, you know like the you just just the dark

1232
00:52:18,920 --> 00:52:21,840
Speaker 2: brown part. Yeah, loved it. That's what this beer tasted like.

1233
00:52:21,880 --> 00:52:23,600
Speaker 1: That's to me, the opposite of my ten year old

1234
00:52:23,719 --> 00:52:25,480
Speaker 1: takes the crust off and it annoys me. I'm just

1235
00:52:25,520 --> 00:52:27,320
Speaker 1: I just like being the contrarian. Do you like the

1236
00:52:27,320 --> 00:52:29,160
Speaker 1: taste taste pretty similar to the rest of the bread.

1237
00:52:29,239 --> 00:52:32,840
Speaker 1: Just eat it, except for better. He's got more molts

1238
00:52:32,920 --> 00:52:35,200
Speaker 1: or something, especially on homemade bread. The crust is delicious.

1239
00:52:35,200 --> 00:52:37,320
Speaker 1: Oh yeah, caep, you buy the store bought Stuff's saying.

1240
00:52:37,280 --> 00:52:40,640
Speaker 2: It's it's a little it's phenomenally better. Homemade bread way

1241
00:52:40,800 --> 00:52:42,799
Speaker 2: sneaking better for sure. All Right, I feel like we're

1242
00:52:42,800 --> 00:52:44,879
Speaker 2: going along. That's gonna be it for those episode. We'll

1243
00:52:44,880 --> 00:52:46,759
Speaker 2: link to some of the different resources we may have

1244
00:52:46,800 --> 00:52:48,440
Speaker 2: mentioned during this episode.

1245
00:52:48,040 --> 00:52:50,360
Speaker 1: And we'll link to three hour off the air conversation

1246
00:52:50,400 --> 00:52:51,920
Speaker 1: that Matt and I have about saving straight if you

1247
00:52:51,920 --> 00:52:54,480
Speaker 1: want to get even down of dirty ear. Oh why not? Why?

1248
00:52:54,920 --> 00:52:56,799
Speaker 2: But that's gonna be it, buddy, Until next time. Best

1249
00:52:56,800 --> 00:53:12,400
Speaker 2: friends out, Best friends out. Hey, your wife's.

1250
00:53:12,080 --> 00:53:15,759
Speaker 1: Been the one who's blows the bus stop sides? Yeah,

1251
00:53:16,000 --> 00:53:18,399
Speaker 1: on accident, sorry, yeah, threw her into the bus final.

1252
00:53:18,560 --> 00:53:22,120
Speaker 1: She deserves it. She's done it twice now, it's crazy. Yeah,

1253
00:53:22,120 --> 00:53:24,160
Speaker 1: I know, she feels really bad. Expensive tickets, Yes,