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Speaker 1: Welcome to How to Money. I'm Joel and I am

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Speaker 1: Matt and today we're answering your listener questions.

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Speaker 2: Yeah, thank you everyone out there for listening to the

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Speaker 2: How to Money podcast. Joel, you get to say that

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Speaker 2: every single week, multiple times a week.

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Speaker 3: I never get to say that. We can trade How

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Speaker 3: to Money.

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Speaker 1: Anytime you want.

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Speaker 3: That's the name of our show.

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Speaker 2: Now, we do have some great listener questions to get to.

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Speaker 2: Listener is wondering if some of these tax deductions that

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Speaker 2: he hears about whether or.

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Speaker 3: Not they're overblown. We'll get to that.

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Speaker 2: Another listener is asking about the four percent rule. He's

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Speaker 2: looking ahead to the future and wanting to make sure

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Speaker 2: he's planning properly, and we'll speaking of planning. Another listener

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Speaker 2: he's wondering if he should ditch his financial advisor.

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Speaker 3: We've got the questions plus more to get to during

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Speaker 3: our episode today. Buddy, what if you.

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Speaker 1: Just ghosted your financial advisor like they're they're like sending

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Speaker 1: emails and you just never respond and you just pretend

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Speaker 1: you didn't you never met them in the first place.

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Speaker 3: They have access to your money.

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Speaker 1: Yes, yeah, it's good, Okay, Well that's yeah. That happens

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Speaker 1: in like relationships. I've heard it. It sounds like the weirdest,

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Speaker 1: saddest thing when someone like literally stops replying to your text.

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Speaker 1: You're like, we've been dating for months and you just

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Speaker 1: stopped replying. But that happens these days, Matt, any clear

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Speaker 1: lines of communication. If it's over, just let them know exactly,

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Speaker 1: all right. That's our relationship advice for the day, before

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Speaker 1: we get to these wonderful, incredible listening questions about I

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Speaker 1: just want to mention one thing I met. I made

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Speaker 1: it a friend, and I also got some free stuff.

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Speaker 1: And this happened fun fun on the Lovely Connecting website

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Speaker 1: of Facebook Facebook Marketplace. To be specific. We have said

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Speaker 1: for a long time now that there are only two

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Speaker 1: good facets of social media.

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Speaker 3: I can get you more friends.

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Speaker 2: If you're looking for more friends, you don't have to

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Speaker 2: go to this neinitsarily have to look to Facebook.

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Speaker 1: It's like a new version of Breakfast Personal story, Matt. Uh,

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Speaker 1: it was I was not looking for a friend, misconnection.

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Speaker 2: I found one loves.

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Speaker 1: Craft beer, That's right. So I was someone was giving

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Speaker 1: away free firewood and I was like really low and

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Speaker 1: I was like, I'm don't eat any right now, but

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Speaker 1: why might as well stock up let a season for

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Speaker 1: another year, and I'll just go pick this stuff up,

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Speaker 1: toss it in the back of my car and that

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Speaker 1: way I'm loaded up. And it's always a good idea

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Speaker 1: to keep your eyes peeled. First off, I know you

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Speaker 1: are always as well. Like just a tree that fell down,

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Speaker 1: especially firewood in particular, Yeah, yeah, because you want to

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Speaker 1: give it some time and then you cut it up later.

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Speaker 1: So but this was like pre cut and everything. I

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Speaker 1: was like, oh great, I'm gonna get this stuff. So

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Speaker 1: this is already split. This wasn't even just rounds that

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Speaker 1: they're going to have you split yours? What on the

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Speaker 1: world already split?

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Speaker 4: Yeah?

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Speaker 1: Right, And he wasn't far away, so I was like, cool,

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Speaker 1: I'll drive down there and get it. And uh and

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Speaker 1: seventy nine year old dude named Jim sweetest guy, ended

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Speaker 1: up talking for like thirty minutes and I show this

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Speaker 1: number he's been texting me. I mean like it's I

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Speaker 1: don't know, not that I suggest finding all your friends

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Speaker 1: on Facebook marketplace, but uh, it's kind of like it's

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Speaker 1: kind of nice to do that kind of stuff. And

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Speaker 1: I think that when you're a part of the buy

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Speaker 1: nothing groups. Matt like that that facilitates not just the

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Speaker 1: reduction of consumption, but it also I think incentivizes relationship

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Speaker 1: building too, because you're doing something so like you want

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Speaker 1: something that you have that you don't need any longer

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Speaker 1: to go to a good home where someone else is

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Speaker 1: gonna derive a lot of joy from it. And I

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Speaker 1: think in that kind of mutually beneficial crossover, there is

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Speaker 1: a place to say, like, hey, we kind of have

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Speaker 1: similar ways of viewing the world. Let's be friends.

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Speaker 3: Absolutely.

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Speaker 2: Okay, Well, why was he divesting himself of split firewood,

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Speaker 2: which is kind of like the holy grail of it's

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Speaker 2: already ready to go.

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Speaker 1: That's a good question. He said he thought it was

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Speaker 1: too old and what Yeah, And I was like, I

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Speaker 1: think this is perfectly usable.

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Speaker 4: Man.

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Speaker 2: He has a very very high standard for what qualifies

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Speaker 2: as good firewood.

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Speaker 1: I guess, yeah, I guess.

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Speaker 3: Was he only using it inside?

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Speaker 1: Did he have like a wind of Yeah, I'm using

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Speaker 1: it outside.

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Speaker 3: So see that's the difference.

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Speaker 2: If you're using it outside around a fire pit, you

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Speaker 2: can burn anything, burn your trash, that's right, Yeah, don't

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Speaker 2: do that. Because we used to have a wood burning

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Speaker 2: wood burning stove at our old house, and I quickly

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Speaker 2: learn based on the amount of creosote, I guess that

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Speaker 2: built up on it, the difference between higher quality would

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Speaker 2: and low grade stuff. So okay, all right, that makes

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Speaker 2: that makes a bit more sense. Just a plug for

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Speaker 2: Facebook market place. Facebook doesn't need any plugs for me.

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Speaker 2: And if you don't want to spend any time on

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Speaker 2: Facebook or the internets, just keep your ears open because

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Speaker 2: you can always hear a tree coming down, like like

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Speaker 2: when there is a tree felling company that shows up

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Speaker 2: in your neighborhood or through nearby, Like you hear the chainsaws.

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Speaker 2: You know what this chain saw sound like? That happened

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Speaker 2: all the time in my and last time that a

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Speaker 2: neighbor took down a couple of trees, I've just walked

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Speaker 2: up there. I was like, hey, guys, if y'all stop

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Speaker 2: by my house on the way out of the neighborhood,

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Speaker 2: I'll help you unload as many of those rounds that

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Speaker 2: were sized appropriately and totally just threw those in the sideyard.

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Speaker 2: I took the next three or four months to split

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Speaker 2: that in nice little workout. But on top of that, yeah,

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Speaker 2: more free firewood and sorry having it already split.

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Speaker 3: That's nice, So there you go. I dig it.

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Speaker 2: Let's introduce the beer you and I are going to

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Speaker 2: enjoy today. It is a Memory Farm and this is

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Speaker 2: a beer by Inner Voice out in Decatur, Georgia, where

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Speaker 2: we actually had our one of our how to money

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Speaker 2: listener Hanks.

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Speaker 1: Most trucfully so last year. We need to do another

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Speaker 1: one this year. We'll get it on the books, we'll

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Speaker 1: let everybody know when it's going to happen, and we'll

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Speaker 1: let you know what we think of this beer at

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Speaker 1: the end of the episode.

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Speaker 3: We will.

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Speaker 1: But Matt, let's move on. Let's take listener questions and

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Speaker 1: if you have a money question you want Matt and

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Speaker 1: I to tackle on an upcoming episode, we'd love to

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Speaker 1: hear it. Just got to have money dot com slash

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Speaker 1: ask for details on how to submit yours, basically just

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Speaker 1: recording a voice memo and sending it to us VI

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Speaker 1: an email and hopefully we can take it next week

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Speaker 1: on the show. This first one comes from a listener

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Speaker 1: who's wondering about the value proposition of some money that

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Speaker 1: he's spending.

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Speaker 5: Hi, Joel in Matt. My name's Peter. I'm twenty four

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Speaker 5: and I'm currently stationed in Apostle, Texas with the Army.

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Speaker 5: I've been hooked on your podcast for about seven months now,

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Speaker 5: and your Gutus has been a game changer in my

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Speaker 5: financial journey. Thanks to you guys, I've paid off a

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Speaker 5: seventy two month carloan prematurely, shaving GoF fifty three gruelling

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Speaker 5: months of interest, have been budgeting with ry Nab, and

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Speaker 5: have hit money gear five. Back in college, I grasped

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Speaker 5: the idea of compound interest in how roth irays work

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Speaker 5: a great vehicle for financial freedom. I'm a natural saver,

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Speaker 5: but I lack confidence in investing at the time, so

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Speaker 5: I turned to an Edwards Jones advisor for assistance. My

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Speaker 5: advisor puts my deposits into an investment savings account consisting

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Speaker 5: of mutual funds to grow my money, and pulls money

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Speaker 5: out of that account to max out in my roth

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Speaker 5: IRA each year. My wroth account consists of mutual funds

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Speaker 5: as well. From the beginning of twenty twenty until now,

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Speaker 5: I've contributed a total of forty two K to the

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Speaker 5: investment savings account. Its current value sits at nineteen K

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Speaker 5: and my roth IRA sits at forty three point six

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Speaker 5: k I've noticed that you guys referenced Vanguard and Fidelity

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Speaker 5: for wroth iras and also lean towards index funds. Should

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Speaker 5: I switch my portfolio to index funds for better returns

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Speaker 5: in this wealth building phase? Or should I consider shifting

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Speaker 5: to Vanguard or Fidelity? If so, how would I navigate

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Speaker 5: this switch? Thank you both for your priceless guidance. Take care.

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Speaker 2: All right, We've got a lot to talk about here

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Speaker 2: with Peter. First of all, he said he's stationed out

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Speaker 2: in El Passa, which means he's in the military. So Peter,

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Speaker 2: thank you so much for your service. The next thing

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Speaker 2: I want to cover is the fact that you said

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Speaker 2: that you paid off your your car loaned prematurely. And

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Speaker 2: I don't want to be nitpicking here, but let's not

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Speaker 2: use that word, because what do you think of, Joel.

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Speaker 2: When you hear something is premature, it's normally a negative thing.

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Speaker 1: You're thinking about a baby coming early, yes, and like

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Speaker 1: or other medical conditions.

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Speaker 2: Use your imagination like this. It's not normally a good

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Speaker 2: thing for things to be premature premature.

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Speaker 1: Baldy, No, I know you weren't referring to.

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Speaker 2: That, but instead just thinking about using the term early,

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Speaker 2: because like if you're early for work or you're early for.

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Speaker 3: A meeting, like that's always a good thing.

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Speaker 2: And we want to totally paint paying off this car

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Speaker 2: note in the best light possible. And so I know

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Speaker 2: it's just a small thing, but Peter, yeah, you are

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Speaker 2: totally on the ball. You are knocking out debt like this,

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Speaker 2: and yes, you have saved yourself a tremendous amount of

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Speaker 2: interest by eliminating that.

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Speaker 1: Fifty three months early something like that, and not just

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Speaker 1: got it done in fifty three months, but like I

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Speaker 1: paid it off fifty three months early, which means he

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Speaker 1: paid it off in was it less than two years

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Speaker 1: or just over two years? I mean, the inn a rapid.

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Speaker 1: It goes to show that when you have a singular focus,

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Speaker 1: you can get rid of something pretty quickly. But he,

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Speaker 1: on top of having that singular focus, he's also doing

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Speaker 1: a lot of good stuff with other dollars too, So

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Speaker 1: it's not like he said I'm just going to do

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Speaker 1: this one thing. But he did make it a ridiculously

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Speaker 1: high priority to get rid of the car loan after

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Speaker 1: listening to the show, and my guess is, Peter's the

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Speaker 1: kind of guy who's never going to have a car

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Speaker 1: loan again for the rest of his life. So mad

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Speaker 1: props to you on that. Okay, let's talk about the

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Speaker 1: financial advisor side of your question. The reason we're not

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Speaker 1: typically enthusiastic about you having an advisor, especially at your age, Peter.

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Speaker 1: Let's mention that, like you're twenty four, and they eat

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Speaker 1: up a good bit of the money you could be investing.

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Speaker 1: That's going to line the pockets of the advisor that

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Speaker 1: you've hired, right, And so fees that might seem insignificant

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Speaker 1: in the moment, they add up as they eat into

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Speaker 1: your ability for those dollars to compound. Right, So a

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Speaker 1: one percent fee, for instance, every single year could cost

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Speaker 1: you hundreds of thousands of dollars down the line. Most

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Speaker 1: people don't think of it like that, Matt, because of

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Speaker 1: one percent fee, it sounds like not that big of

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Speaker 1: a deal though.

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Speaker 3: That's trivial.

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Speaker 1: Oh cool, Wait that we just got an extra one

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Speaker 1: percent sales tax increase locally where we live. Great, everything's

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Speaker 1: going to cost a tiny bit more. I'll barely recognize it.

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Speaker 1: But the problem with when we're talking about it on

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Speaker 1: the advisor front, the one percent over the years because

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Speaker 1: of the way compounding works, it's severely handicaps and kneecaps

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Speaker 1: your ability for those dollars to grow on your behalf,

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Speaker 1: and so it adds up to being a whole lot

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Speaker 1: more than it seems like it would be on the face.

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Speaker 1: And so I get why Peter went in this direction.

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Speaker 1: Starting out like he didn't feel like he knew what

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Speaker 1: he was doing, and he thought he needed expert help.

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Speaker 1: But at this point he said, he's been listening for

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Speaker 1: something like seven months. He's received I would say, a

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Speaker 1: reasonable financial education listening to the show and doing some

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Speaker 1: of the other things that he's doing. So I think

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Speaker 1: that it's time to mosy on down the road and

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Speaker 1: take the DIY approach. That's that's what I would do

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Speaker 1: if I was Peter totally, and we actually talked about

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Speaker 1: this on a recent Friday flight. But fee advisors, they

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Speaker 1: are becoming more common, which is great news, But those

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Speaker 1: fees can actually be a lot of money as well,

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Speaker 1: in some cases thousands of dollars, like higher than the

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Speaker 1: maximum Roth contribution that you're allowed to make, Peter, and

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Speaker 1: that money would be better off working for you inside

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Speaker 1: of tax advantage accounts. And plus you can pick the funds,

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Speaker 1: pick the brokerage firm that you like and that you

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Speaker 1: feel most comfortable with. And I think pretty high on

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Speaker 1: the list of things that I'm going to be looking

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Speaker 1: at are overall costs. And you mentioned Vanguarden often, I

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Speaker 1: guess because we talk about Vanguard and Fidelity so often,

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Speaker 1: which would be an excellent choice. But then you're going

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Speaker 1: to be with one of the low cost grates and

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Speaker 1: a much bigger chunk of your investment dollars are working

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Speaker 1: for you, and they're not going to pay someone who's

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Speaker 1: actually doing something that you could actually do for yourself,

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Speaker 1: especially at this point in the game. Like you said,

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Speaker 1: in this wealth building stage of personal finance for you,

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Speaker 1: there's not a whole lot of complexity in it. It

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Speaker 1: makes me think of what Paul Merriman said when he

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Speaker 1: joined us a while back on the show. He said

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Speaker 1: that it takes the average person forty hours to learn

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Speaker 1: how to invent with confidence, and I think that's about right.

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Speaker 1: I mean, I think if you're just starting out, maybe

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Speaker 1: you feel like you need someone to hold your hand

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Speaker 1: and show you how and to basically make some of

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Speaker 1: those decisions for you. But I would say for most folks,

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Speaker 1: just a little bit of effort to understand what to

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Speaker 1: do and why they're doing it is going to save

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Speaker 1: them boohoos of dollars down the road, and it's worth

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Speaker 1: the time. Considering how much time those dollars have to

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Speaker 1: compound on your behalf. I think that's where you're paying

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Speaker 1: the advisor.

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Speaker 2: That's the biggest thing too, the fact that he's so young,

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Speaker 2: and all of those fees that he's going to be

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Speaker 2: paying over time are going to.

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Speaker 3: Just add up.

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Speaker 2: They're going to compound. And here today it doesn't seem

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Speaker 2: like a big deal, but especially over the years, and

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Speaker 2: so some people might say.

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Speaker 1: Oh, Matt Joel, does this mean that you guys are

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Speaker 1: completely against hiring a financial advisor. Ever, No, the answer

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Speaker 1: is no to that. I mean, I think that can

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Speaker 1: make sense for some folks, depending on kind of your

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Speaker 1: specific financial situation, the kind of questions you're dealing with,

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Speaker 1: the kind of tax scenarios you might have in front

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Speaker 1: of you, and what sort of retirement you're planning for.

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Speaker 1: Like XY Planning, network Work and NAPFA, those can be

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Speaker 1: great places to turn if you're looking to establish an

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Speaker 1: ongoing fiduciary relationship to get that expert advice especially as

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Speaker 1: your network grows, right and those decisions become more complicated,

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Speaker 1: I think you might want some help from somebody who

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Speaker 1: has a lot of expertise. But for most folks Matt

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Speaker 1: and a lot of folks who listen to Hot of Money,

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Speaker 1: including Peter, it can become an impediment to what you're

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Speaker 1: trying to achieve because of how much it costs, especially

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Speaker 1: in those early years and every dollar you're able to

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Speaker 1: stock away in those early years. Like, once you get

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Speaker 1: past a certain level of complexity, you might need additional help,

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Speaker 1: But right now we're in kind of the the one

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Speaker 1: oh one section of investing. Right Maybe maybe once you

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Speaker 1: get a mosy on down the line of three oh

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Speaker 1: one or four oh one, you might want to be

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Speaker 1: able to talk to somebody, But in those beginning years,

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Speaker 1: it's all about how many dollars can you set aside

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Speaker 1: in those tax advantaged accounts in low cost diversified funds.

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Speaker 3: Totally. Yeah, And you mentioned xy Planning Network and nap fab.

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Speaker 2: Newer models actually make it easier to get advice or

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Speaker 2: ask questions for a low hourly rate.

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Speaker 3: And so if you are looking for.

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Speaker 2: Just a really quick check in, then head of over

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Speaker 2: to a site like Hello Nectarine, and I'm sure what

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Speaker 2: they're charging is going to be a far cry from

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Speaker 2: what you are currently paying with your advisory. And then

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Speaker 2: if you build a massive chunk of wealth and things

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Speaker 2: do get complicated with your finances down the road, at

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Speaker 2: that point, I think it would certainly make sense to

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Speaker 2: bring this person back on board and hopefully they're somebody

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Speaker 2: who's still around and not even like checking in with

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Speaker 2: them like once, like every few years, every five years

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Speaker 2: or something like that. I think that would be a

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Speaker 2: much better move than having a money man, like having

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Speaker 2: a guy that handles all of your investments for you.

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Speaker 2: And by the way, I'd be curious to know which

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Speaker 2: fund is your advisor puts you in, because, like, it

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Speaker 2: might not just be their fee that you're paying, it

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Speaker 2: could also be higher fund fees where there's a load

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Speaker 2: and you are paying much more in expenses than what

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Speaker 2: you would get, say over at Vanguard or Fidelity.

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Speaker 1: Then you're getting hit on multiple fronts. Yeah, far more

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Speaker 1: expensive than even you think it is, because maybe some

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Speaker 1: of those fees are a little opake and you don't

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Speaker 1: even really know how much you're being charged. So how

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Speaker 1: do you break up? If you agree with us, and

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Speaker 1: you don't think that maybe having a relationship with advisor

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Speaker 1: in perpetuity is going to be the best thing for

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Speaker 1: you and your ability to build wealth. We've got an

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Speaker 1: article up on the site with helpful scripts, like we

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Speaker 1: literally script some of these things out so you can

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Speaker 1: know how to approach your advisor in hopefully a comfortable way.

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Speaker 1: I guess basically, I would say it's starting with a

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Speaker 1: simple email outlining your growing confidence and your desire to

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Speaker 1: self manage your assets. I would say it's more of

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Speaker 1: a it's me, not you approach that the breakup. It's

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Speaker 1: not because you suck. It's because I'm feeling confident, I'm

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Speaker 1: growing in my skills and this is something I want

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Speaker 1: to diy because I think I can rock it. So yeah,

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Speaker 1: that's the first thing, and then I would request any

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Speaker 1: important documents and then contact Vanguard or Fidelity or whoever

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Speaker 1: it is that you want to migrate your accounts over

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Speaker 1: to get the ball moving and have them help you out.

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Speaker 1: The formula typically need to fill out is called an ACAT,

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Speaker 1: an Automated Customer Account Transfer form. This should make it

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Speaker 1: clean and easy, no need to sell assets and rebuy.

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Speaker 1: You're really just transferring those assets from one custodian to another.

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Speaker 1: So it's really not as hard as it might seem.

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Speaker 1: I know the emotional component can be tough for some folks,

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Speaker 1: like but I've known them for so long. But in

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Speaker 1: your case, this is a relatively new relationship. It's not

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Speaker 1: like they came to your kid's high school graduation or

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Speaker 1: something like that.

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Speaker 2: So and either way, even if this had been somebody

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Speaker 2: who you'd known for that long, Peter like, I feel

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Speaker 2: like that's the other part of it, Like, you can

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Speaker 2: give reasons, but you can also just say sorry, I

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Speaker 2: no longer want to do business with you, because guess what,

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Speaker 2: it's your money. Also, we're talking a whole lot about

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Speaker 2: Vanguard don't sleep on Robinhood. We've talked about their ability

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Speaker 2: to provide a match, which no other investment brokerage is

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Speaker 2: doing out there. So the ability to pay what fifty

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Speaker 2: dollars a year you're paying for that gold membership, but hey,

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Speaker 2: there's also this ongoing match and if you are dedicated

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Speaker 2: to investing within your roth ira, you're gonna more than

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Speaker 2: make up.

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Speaker 3: For that as you allow your funds to grow over

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Speaker 3: the years.

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Speaker 1: Just read the fine print first, because there are some

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Speaker 1: details on there that are you gotta know about it.

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Speaker 2: But overall, Peter, it sounds like you're doing great And

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Speaker 2: I know it might seem daunting, but you are. You're

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Speaker 2: doing an awesome job in this move is going to

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Speaker 2: help you to build an even bigger pile of wealth

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Speaker 2: for the future. Just yeah, keep learning, keep it simple.

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Speaker 2: You got this, man. But Joe, we've got more to

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Speaker 2: get to, including we're gonna hear from a listener who's

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Speaker 2: looking to make the most of his home what it

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Speaker 2: is that he can deduct against his taxes. We'll get

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Speaker 2: to that more right after this.

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Speaker 1: All right, Matt, we're back, and before we get to

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Speaker 1: overblown tax parks, let's get to a question about kind

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Speaker 1: of a tried and true rule of personal finance and

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Speaker 1: withdrawal rates.

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Speaker 4: Hey, Matt and Joel, this is Eric from Evanston, Illinois.

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Speaker 4: I got a quick question for you all about the

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Speaker 4: four percent rule. It assumes you're making a seven percent

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Speaker 4: return four percent you get to spend three percent for inflation,

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Speaker 4: which is totally fine. Right now, my wife and I

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Speaker 4: are forty and almost all of our investment dollars are

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Speaker 4: in stocks. But in retirement, when we're assuming to be

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Speaker 4: more like a thirty seventy split or a sixty forty split,

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Speaker 4: you know, mostly stocks, but some bonds. What would our

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Speaker 4: returns most likely be at that point? So, say, if

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Speaker 4: we're getting a five or six percent return, three percent

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Speaker 4: goes to inflation, does that mean we only can account

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Speaker 4: for you know, two three four percent maybe withdrawal. So yeah,

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Speaker 4: that's the question I had, just trying to, you know,

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Speaker 4: kind of hammer that out. Side note, I know y'all

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Speaker 4: are more into the VU which we have a lot of,

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Speaker 4: but Jeremy from Personal Finance Club loves the target date funds.

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Speaker 4: One thing he suggested that we're doing is we're looking

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Speaker 4: to retire around twenty forty five, but we are using

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Speaker 4: a twenty fifty five target date fund to keep the

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Speaker 4: stock to bond ratio higher in the early part of retirement.

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Speaker 4: Just thought that was a fun idea. Hope y'all have

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Speaker 4: a great day, and thanks for the show.

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Speaker 3: Keep it up.

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Speaker 2: Eric, We appreciate you setting us a question, and let's

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Speaker 2: start off by talking about that target date fund hack.

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Speaker 2: And I'm pretty sure we've talked about this before. I

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Speaker 2: think it's been a while. I recall doing this with

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Speaker 2: my wife a while ago. But this is a solid

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Speaker 2: option choosing a target date fund that's further off into

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Speaker 2: the future than when you are looking to retire. Generally speaking,

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Speaker 2: one of the biggest problems we have with target date

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Speaker 2: funds is that they are typically two conservative for folks

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Speaker 2: at the beginning of their investing journey. Oftentimes they're more

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Speaker 2: heavily invested in bonds and we like to see more stocks.

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Speaker 1: And that's like, oh, this is a way essentially to

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Speaker 1: rectify that with just a click of your mouth. Yeah.

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Speaker 2: Yeah, So basically, a target date fund, like if you

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Speaker 2: are in your twenties, if you are in that wealth

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Speaker 2: building phase of your life, like we just talked about

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Speaker 2: with Peter, I think if that's you going with a

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Speaker 2: one hundred percent equity route like that would typically be better.

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Speaker 3: But then as you get closer.

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Speaker 2: To the wealth preservation phase of life, that's when a

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Speaker 2: target date fund I think can make a whole lot

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Speaker 2: of sense. And opting for a less conservative target date

437
00:19:01,440 --> 00:19:03,879
Speaker 2: fund by picking one that's further out, that's likely a

438
00:19:03,920 --> 00:19:05,400
Speaker 2: way for you to be able to have your cake

439
00:19:05,440 --> 00:19:07,640
Speaker 2: and eat it too. And this is of course assuming

440
00:19:07,680 --> 00:19:10,760
Speaker 2: that the target date fund the funds that you're looking

441
00:19:10,760 --> 00:19:14,320
Speaker 2: at that they all have lower costs, lower expense ratios

442
00:19:14,359 --> 00:19:17,879
Speaker 2: associated with them, because oftentimes it's difficult now that Fidelity

443
00:19:18,240 --> 00:19:21,720
Speaker 2: rolled out the totally free index funds, and so bytn't mind.

444
00:19:21,720 --> 00:19:24,040
Speaker 2: Anything that's over like point zero three percent to me

445
00:19:24,119 --> 00:19:26,720
Speaker 2: feels even point one two feels agreed to. That to

446
00:19:26,720 --> 00:19:28,359
Speaker 2: me almost feels like that the top end of what

447
00:19:28,359 --> 00:19:30,000
Speaker 2: I'm willing to pay, because beyond that it's just like,

448
00:19:30,080 --> 00:19:31,560
Speaker 2: well what am I what am I paying for?

449
00:19:31,680 --> 00:19:32,040
Speaker 1: Yeah?

450
00:19:32,119 --> 00:19:34,280
Speaker 2: And but oftentimes you can find some of these target

451
00:19:34,359 --> 00:19:36,639
Speaker 2: date funds that are at point five percent or less.

452
00:19:36,880 --> 00:19:38,720
Speaker 2: You want to avoid the ones that are closer to

453
00:19:38,840 --> 00:19:40,600
Speaker 2: one percent for sure, because then you go back to

454
00:19:40,640 --> 00:19:42,439
Speaker 2: the same problem that we talked about with Peter in

455
00:19:42,440 --> 00:19:46,080
Speaker 2: the last question, where you are losing a lot of

456
00:19:46,119 --> 00:19:47,880
Speaker 2: your potential earnings to expenses.

457
00:19:47,880 --> 00:19:50,080
Speaker 1: And we've talked about this before, how any fund you

458
00:19:50,080 --> 00:19:53,880
Speaker 1: can imagine has variations depending on who's serving that fund

459
00:19:53,960 --> 00:19:56,360
Speaker 1: up whose fund it is. We've talked about how some

460
00:19:56,520 --> 00:19:59,320
Speaker 1: s and P five hundred funds are charging like twenty

461
00:19:59,520 --> 00:20:01,920
Speaker 1: x a really really low cost s and P five

462
00:20:02,000 --> 00:20:03,760
Speaker 1: hundred fund is charging. The same is true with target

463
00:20:03,840 --> 00:20:05,680
Speaker 1: date funds. So if you're with the target date fund

464
00:20:06,040 --> 00:20:08,520
Speaker 1: in Vanguard, the low cost one, great, But if you're

465
00:20:08,560 --> 00:20:10,800
Speaker 1: with maybe like an insurance company, you might be getting

466
00:20:10,840 --> 00:20:12,720
Speaker 1: charged a heck of a lot more than you and suspected.

467
00:20:12,840 --> 00:20:16,520
Speaker 1: It makes me think of even at Fidelity, Matt. Fidelity

468
00:20:16,560 --> 00:20:19,119
Speaker 1: has two different kinds of target date funds. One is

469
00:20:19,240 --> 00:20:21,359
Speaker 1: really really cheap, the other is really really expensive, and

470
00:20:21,400 --> 00:20:23,280
Speaker 1: so you have to even be careful inside of that

471
00:20:23,400 --> 00:20:26,160
Speaker 1: brokerage to choose the right low cost one. I choose

472
00:20:26,160 --> 00:20:27,800
Speaker 1: the right products, yes, But I think you're right. I

473
00:20:27,800 --> 00:20:30,280
Speaker 1: think this is a reasonable hack to just be a

474
00:20:30,320 --> 00:20:32,280
Speaker 1: little more generous with that retirement age, push it off

475
00:20:32,280 --> 00:20:34,160
Speaker 1: a little bit further, and then you're going to have

476
00:20:34,760 --> 00:20:37,479
Speaker 1: a slightly riskier version of a target date fund, a

477
00:20:37,560 --> 00:20:40,959
Speaker 1: more stock intensive version of a target date fund for longer,

478
00:20:41,160 --> 00:20:42,760
Speaker 1: which is likely going to be to your benefit, because,

479
00:20:42,800 --> 00:20:44,920
Speaker 1: let's be honest, even in those retirement years, you need

480
00:20:44,920 --> 00:20:48,680
Speaker 1: a decent amount of stock exposure, and eric most advice

481
00:20:49,040 --> 00:20:51,840
Speaker 1: doesn't allow folks much wiggle room with the target date fund.

482
00:20:51,880 --> 00:20:54,199
Speaker 1: It's kind of it's supposed to be a set it

483
00:20:54,240 --> 00:20:56,720
Speaker 1: and forget it vehicle. But I think these kinds of

484
00:20:56,760 --> 00:20:59,679
Speaker 1: ways of thinking about it can help increase your returns

485
00:20:59,680 --> 00:21:01,960
Speaker 1: and just ensure that you're more properly invested at the

486
00:21:02,000 --> 00:21:04,919
Speaker 1: right time of your life. And like, it makes me

487
00:21:04,920 --> 00:21:07,480
Speaker 1: think again, missioning Paul Merriman again on this episode, he

488
00:21:07,560 --> 00:21:10,440
Speaker 1: suggests having most of your investment dollars in a target

489
00:21:10,520 --> 00:21:13,280
Speaker 1: date fund, but also having a portion in a small

490
00:21:13,280 --> 00:21:15,600
Speaker 1: cap value fund, and that gives you added diversity and

491
00:21:15,640 --> 00:21:18,600
Speaker 1: the potential for higher overall returns, at least based on

492
00:21:18,920 --> 00:21:22,480
Speaker 1: historical returns, which he mapped out quite well in that episode,

493
00:21:22,520 --> 00:21:26,600
Speaker 1: episode seven thirty four. Basically, some people do use them incorrectly.

494
00:21:27,080 --> 00:21:28,960
Speaker 1: They own like ten funds. A target date fund is

495
00:21:29,000 --> 00:21:31,560
Speaker 1: just one of them. That doesn't make much sense, But

496
00:21:31,600 --> 00:21:33,720
Speaker 1: it also doesn't have to be the only thing you own.

497
00:21:33,960 --> 00:21:37,120
Speaker 1: And taking the Personal Finance Club approach that Jeremy kind

498
00:21:37,119 --> 00:21:39,240
Speaker 1: of spits out, I think makes a lot of sense

499
00:21:39,280 --> 00:21:39,560
Speaker 1: to us.

500
00:21:39,680 --> 00:21:41,800
Speaker 2: Yeah, So let's talk about the four percent rule, because

501
00:21:41,840 --> 00:21:44,280
Speaker 2: the last time we brought this up, we had to

502
00:21:44,280 --> 00:21:47,800
Speaker 2: talk some smack about Dave Ramsey's take on it. Instead

503
00:21:47,800 --> 00:21:51,280
Speaker 2: of advocating for withdrawing a safe, reasonable four percent, he

504
00:21:51,400 --> 00:21:53,119
Speaker 2: was saying eight percent is what you shouldn't really be

505
00:21:53,119 --> 00:21:56,080
Speaker 2: considering frightening. But the four percent rule is important to

506
00:21:56,119 --> 00:21:59,320
Speaker 2: know because it dictates fairly reliably what you can take

507
00:21:59,320 --> 00:22:03,000
Speaker 2: from your retirement counts without running out of money during retirement.

508
00:22:03,160 --> 00:22:05,199
Speaker 2: Front of the show Allison Schreeger, she wrote about the

509
00:22:05,240 --> 00:22:08,000
Speaker 2: problem of trying to figure out how much you can spend.

510
00:22:08,640 --> 00:22:12,160
Speaker 2: She wrote about this fairly eloquently over in Bloomberg recently.

511
00:22:12,560 --> 00:22:15,000
Speaker 2: But the bottom line, nobody is actually doing a great

512
00:22:15,080 --> 00:22:17,960
Speaker 2: job solving this problem because annuities try, but they're expensive

513
00:22:17,960 --> 00:22:20,480
Speaker 2: as all get out. The four percent rule that helps,

514
00:22:20,680 --> 00:22:24,120
Speaker 2: but because of market moves, because of volatility in the market,

515
00:22:24,200 --> 00:22:27,240
Speaker 2: it's also not perfect. It's not a guaranteed. You're just

516
00:22:27,280 --> 00:22:29,520
Speaker 2: not promised to be able to have that money last

517
00:22:29,600 --> 00:22:32,280
Speaker 2: for thirty or thirty plus years. And then when some

518
00:22:32,320 --> 00:22:33,879
Speaker 2: folks are telling you that you can take out a

519
00:22:33,920 --> 00:22:36,440
Speaker 2: whole lot more like Dave, well, yeah, that sounds great.

520
00:22:36,480 --> 00:22:38,119
Speaker 2: It makes you think that, all right, it's time to

521
00:22:38,119 --> 00:22:40,040
Speaker 2: start living life a little bit here. But then it

522
00:22:40,080 --> 00:22:43,040
Speaker 2: can lead to big trouble, especially if you live a

523
00:22:43,080 --> 00:22:45,040
Speaker 2: really long life, which is I mean, is that not

524
00:22:45,080 --> 00:22:48,919
Speaker 2: the goal for most folks to live beyond ninety years old? Perhaps,

525
00:22:48,960 --> 00:22:50,879
Speaker 2: And if you're looking at retiring at age sixty, and

526
00:22:51,359 --> 00:22:53,040
Speaker 2: I mean, like, do you want to run out of

527
00:22:53,040 --> 00:22:54,080
Speaker 2: money at age ninety one?

528
00:22:54,920 --> 00:22:57,000
Speaker 1: And we're talking about sequence of returns risk here too,

529
00:22:57,040 --> 00:22:59,560
Speaker 1: because let's say you would draw eight percent in the

530
00:22:59,680 --> 00:23:03,080
Speaker 1: first three years of your retirement and we experience a

531
00:23:03,119 --> 00:23:06,400
Speaker 1: severe bear market during those times, you're taking out more

532
00:23:06,440 --> 00:23:09,520
Speaker 1: and more money from that portfolio that can't grow back,

533
00:23:09,560 --> 00:23:12,399
Speaker 1: that can't recover, and so be a part of the

534
00:23:12,440 --> 00:23:15,480
Speaker 1: reason an eight percent withdraw rate is so stinking bad

535
00:23:15,640 --> 00:23:18,879
Speaker 1: is And whether or not your portfolio survives an eight

536
00:23:18,880 --> 00:23:21,040
Speaker 1: percent with draw rate largely depends on what happens with

537
00:23:21,119 --> 00:23:23,560
Speaker 1: the market. But if you do it at the wrong time, man,

538
00:23:23,600 --> 00:23:27,159
Speaker 1: it can crater your retirement and you could be penniless

539
00:23:27,400 --> 00:23:30,320
Speaker 1: really in farless than thirty years. Sure, so, yeah, definitely

540
00:23:30,320 --> 00:23:32,439
Speaker 1: not something you want to mess with. So does your

541
00:23:32,480 --> 00:23:35,439
Speaker 1: allocation dictate whether the four percent rule works or not?

542
00:23:35,480 --> 00:23:37,800
Speaker 1: You kind of were asking about that, Yeah, it kind

543
00:23:37,800 --> 00:23:39,800
Speaker 1: of does. I mean, let's say you had all of

544
00:23:39,840 --> 00:23:43,200
Speaker 1: your money in cash earning two percent. Granted you wouldn't

545
00:23:43,200 --> 00:23:45,000
Speaker 1: be doing that right now, hopefully, and then let's say

546
00:23:45,040 --> 00:23:47,440
Speaker 1: you're taking out four percent of your portfolio every single

547
00:23:47,520 --> 00:23:50,000
Speaker 1: year you're gonna run out of money much sooner than

548
00:23:50,000 --> 00:23:52,520
Speaker 1: if that money was invested. And so when the rule

549
00:23:52,640 --> 00:23:55,720
Speaker 1: was devised, it was looking at a balanced portfolio, by

550
00:23:55,720 --> 00:23:57,920
Speaker 1: the way, at half stocks and half bonds. The reason

551
00:23:58,000 --> 00:24:00,840
Speaker 1: is because you can still get solid returns with greatly

552
00:24:00,880 --> 00:24:03,960
Speaker 1: reduced volatility having that half and half match. The four

553
00:24:04,000 --> 00:24:05,880
Speaker 1: percent rule was not built on a one hundred percent

554
00:24:05,920 --> 00:24:08,479
Speaker 1: stock assumption, so don't think that you have to be

555
00:24:08,640 --> 00:24:10,879
Speaker 1: one hundred percent equities in order for the four percent

556
00:24:10,960 --> 00:24:13,399
Speaker 1: rule to make sense. Eric, you were mentioning, well, if

557
00:24:13,440 --> 00:24:16,320
Speaker 1: we have like a sixty forty portfolio, well that puts

558
00:24:16,359 --> 00:24:18,480
Speaker 1: you in perfect company with the four percent role. Right

559
00:24:18,520 --> 00:24:20,840
Speaker 1: when you start drawing money from your retirement accounts, the

560
00:24:20,880 --> 00:24:23,280
Speaker 1: four percent rule should be more than okay, as the

561
00:24:23,359 --> 00:24:26,840
Speaker 1: average return of your particular allocation that you're looking at

562
00:24:26,960 --> 00:24:29,400
Speaker 1: over the past thirty years has been eight point four

563
00:24:29,440 --> 00:24:31,600
Speaker 1: to two percent. That is, Matt, what a sixty to

564
00:24:31,640 --> 00:24:35,600
Speaker 1: forty portfolio has returned for investors, which isn't bad. That's

565
00:24:35,640 --> 00:24:38,440
Speaker 1: pretty good, and it, you know, means that a four

566
00:24:38,480 --> 00:24:40,840
Speaker 1: percent rule is actually looking a little conservative if that's

567
00:24:40,880 --> 00:24:41,240
Speaker 1: your mix.

568
00:24:41,320 --> 00:24:43,760
Speaker 2: Yeah, well, I think another problem too, or maybe a

569
00:24:43,800 --> 00:24:47,359
Speaker 2: potential problem that Eric is posing here as he you know,

570
00:24:47,440 --> 00:24:49,960
Speaker 2: mentions like so he's talking about having like earning seven

571
00:24:49,960 --> 00:24:52,760
Speaker 2: percent right on average in the market, basically gaining seven

572
00:24:52,760 --> 00:24:55,520
Speaker 2: percent and then losing seven percent, losing seven percent through

573
00:24:55,680 --> 00:24:59,000
Speaker 2: spending or through inflation. But the four percent rule or

574
00:24:59,240 --> 00:25:01,679
Speaker 2: what the the study that the four percent rule is

575
00:25:01,680 --> 00:25:04,240
Speaker 2: based on, the Trinity study, it's just not that straightforward

576
00:25:04,640 --> 00:25:06,800
Speaker 2: as earning seven percent of the market and then spending

577
00:25:06,800 --> 00:25:09,520
Speaker 2: down seven percent, because if that were the case, you're

578
00:25:09,560 --> 00:25:11,600
Speaker 2: looking at a wash like literally you're not spending down

579
00:25:11,640 --> 00:25:13,720
Speaker 2: your money at all. And the Trinity study seeks to

580
00:25:14,119 --> 00:25:16,400
Speaker 2: prove that you're gonna not run out of money within

581
00:25:16,480 --> 00:25:19,040
Speaker 2: thirty years, and so it's just not quite as straightforward.

582
00:25:19,040 --> 00:25:20,880
Speaker 2: And so that's another reason why you can't just look

583
00:25:20,920 --> 00:25:25,199
Speaker 2: at market returns as opposed to all the countless what

584
00:25:25,240 --> 00:25:28,200
Speaker 2: are they like the Monty Carlo scenarios or just all

585
00:25:28,280 --> 00:25:31,600
Speaker 2: the nuances that went into that study. But it is

586
00:25:31,640 --> 00:25:34,120
Speaker 2: important to note that the within that study that they

587
00:25:34,119 --> 00:25:38,320
Speaker 2: were accounting for a reasonable amount of inflation. So that's good,

588
00:25:38,400 --> 00:25:39,760
Speaker 2: you don't it's not like you've got to do an

589
00:25:39,800 --> 00:25:42,720
Speaker 2: additional calculation for that. But bottom line, I think what's

590
00:25:42,880 --> 00:25:46,760
Speaker 2: worth reiterating here is that the four percent rule, that it's.

591
00:25:46,640 --> 00:25:47,879
Speaker 3: More like a rule of thumb.

592
00:25:48,359 --> 00:25:51,800
Speaker 2: And one of the authors of the Trinity study, who

593
00:25:52,240 --> 00:25:54,879
Speaker 2: was the one who coined the four percent rule, he

594
00:25:54,960 --> 00:25:58,000
Speaker 2: said that that is a reasonable withdrawal rate for most folks,

595
00:25:58,560 --> 00:26:00,720
Speaker 2: and if you take out too little, yeah, there's gonna

596
00:26:00,720 --> 00:26:02,800
Speaker 2: be an overwhelming likelihood that you're gonna die with lots

597
00:26:02,840 --> 00:26:04,840
Speaker 2: of money left over. It's not the worst thing, but

598
00:26:05,040 --> 00:26:07,399
Speaker 2: it's also it's also a good idea to make a

599
00:26:07,400 --> 00:26:10,640
Speaker 2: plan to enjoy that money and not necessarily to pass

600
00:26:10,680 --> 00:26:13,440
Speaker 2: it on to future generations, unless that's just a massively

601
00:26:13,480 --> 00:26:16,240
Speaker 2: important goal of yours. I think for most folks a

602
00:26:16,280 --> 00:26:18,560
Speaker 2: reasonable goal would be to spend most of their money

603
00:26:19,040 --> 00:26:22,120
Speaker 2: while they're living. But at the same time, the eight

604
00:26:22,160 --> 00:26:25,680
Speaker 2: percent Dave Ramsey approach, that recommendation is a terrible idea,

605
00:26:25,840 --> 00:26:28,879
Speaker 2: too risky. Yeah, but Eric mentioned like two to three percent,

606
00:26:28,920 --> 00:26:33,000
Speaker 2: which I think personally would be pretty pretty low. Basically right, like,

607
00:26:33,080 --> 00:26:34,320
Speaker 2: it's gonna ensure demoralizing.

608
00:26:34,359 --> 00:26:35,720
Speaker 1: It makes you feel like you probably have to work

609
00:26:35,760 --> 00:26:37,800
Speaker 1: longer than you actually do, makes you have to save

610
00:26:37,880 --> 00:26:39,520
Speaker 1: up a larger nest egg than you actually need.

611
00:26:39,600 --> 00:26:41,240
Speaker 2: And it feels like it's based out of fear as

612
00:26:41,240 --> 00:26:44,119
Speaker 2: opposed to like, well, like what do the numbers actually show?

613
00:26:44,200 --> 00:26:46,320
Speaker 2: And that would ensure that you never run out of money,

614
00:26:46,320 --> 00:26:48,920
Speaker 2: but it would also just be too cautious. So for you, Eric,

615
00:26:48,960 --> 00:26:51,040
Speaker 2: I think a four to five percent withdrawal rate it

616
00:26:51,080 --> 00:26:52,480
Speaker 2: makes sense for forty five.

617
00:26:52,520 --> 00:26:53,399
Speaker 1: That's what Matt's going with.

618
00:26:53,480 --> 00:26:56,280
Speaker 2: Okay, wow, four to two five, Okay, it's gonna make

619
00:26:56,359 --> 00:26:56,840
Speaker 2: sense for most.

620
00:26:56,920 --> 00:26:58,960
Speaker 1: It's gonna say, Man, you're making Dave Ramsey look like

621
00:26:59,040 --> 00:26:59,399
Speaker 1: a geek.

622
00:26:59,480 --> 00:26:59,720
Speaker 3: Yeah.

623
00:27:00,160 --> 00:27:00,360
Speaker 6: Well.

624
00:27:00,480 --> 00:27:03,040
Speaker 2: The other thing, too, is Eric, how much flexibility that

625
00:27:03,080 --> 00:27:05,960
Speaker 2: you have? And honestly, the older I get, the less

626
00:27:06,040 --> 00:27:09,320
Speaker 2: word I am about retirement because I'm just thinking about

627
00:27:09,320 --> 00:27:11,200
Speaker 2: some of the different ways that I can be flexible

628
00:27:11,359 --> 00:27:14,160
Speaker 2: when I am a quote unquote entering into my retirement

629
00:27:14,200 --> 00:27:16,199
Speaker 2: years and whether that's okay, oh, maybe we're not going

630
00:27:16,280 --> 00:27:17,639
Speaker 2: to take as much money out of the market to

631
00:27:17,680 --> 00:27:21,600
Speaker 2: reduce that sequence of returns risk. Oh okay, well, Marcus

632
00:27:21,640 --> 00:27:23,000
Speaker 2: not doing so great. Maybe I'll just pick up a

633
00:27:23,000 --> 00:27:25,359
Speaker 2: part time job or some money on the side, just

634
00:27:25,560 --> 00:27:27,680
Speaker 2: other ways to be creative when it comes to your finances,

635
00:27:27,760 --> 00:27:28,360
Speaker 2: especially too.

636
00:27:28,720 --> 00:27:29,679
Speaker 3: Just as I don't know I.

637
00:27:29,640 --> 00:27:32,160
Speaker 2: Think Joe, both of our opinions. It's not that we've

638
00:27:32,440 --> 00:27:34,680
Speaker 2: completely changed our minds.

639
00:27:34,680 --> 00:27:36,040
Speaker 3: Of our view of work.

640
00:27:36,080 --> 00:27:37,919
Speaker 2: But the older I get, the more I realize that

641
00:27:38,480 --> 00:27:40,800
Speaker 2: I mean, I mean, I'd be doing exactly or what

642
00:27:40,840 --> 00:27:43,359
Speaker 2: I'm doing now, or working nearly as many hours as

643
00:27:43,400 --> 00:27:44,960
Speaker 2: I am now. But there's a good chance I'm going

644
00:27:45,000 --> 00:27:45,520
Speaker 2: to do something I.

645
00:27:45,560 --> 00:27:46,760
Speaker 1: See Walmart greater in your future.

646
00:27:46,880 --> 00:27:49,919
Speaker 2: Hey, or we talked about this, like pulling shots at

647
00:27:49,920 --> 00:27:52,240
Speaker 2: the local coffee shop or or working at a gym.

648
00:27:52,359 --> 00:27:54,920
Speaker 2: Just something that aligns with however it is that you

649
00:27:54,960 --> 00:27:56,720
Speaker 2: want to spend your time in some of those later

650
00:27:56,800 --> 00:27:59,359
Speaker 2: years and guess what they will reward you for that

651
00:27:59,400 --> 00:28:02,400
Speaker 2: time that you spend and that business with a paycheck.

652
00:28:02,440 --> 00:28:04,440
Speaker 1: Yeah, I know. I think that the flexibility thing is key,

653
00:28:04,560 --> 00:28:07,720
Speaker 1: And I think if Eric wanted to be as conservative

654
00:28:07,720 --> 00:28:10,160
Speaker 1: as possible, guess what a zero percent withdrawal rate means.

655
00:28:10,160 --> 00:28:12,240
Speaker 1: Your porfolio can keep growing and you never need to

656
00:28:12,240 --> 00:28:15,160
Speaker 1: spend that money. But I think when you say two percent,

657
00:28:15,280 --> 00:28:17,439
Speaker 1: like you're almost thinking along those same lines, and you

658
00:28:17,520 --> 00:28:19,439
Speaker 1: have to be willing to spend the money that you've accrued.

659
00:28:19,480 --> 00:28:21,840
Speaker 1: Although I know it's kind of it's a muscle that

660
00:28:21,880 --> 00:28:23,480
Speaker 1: you've never had to develop, and you have to kind

661
00:28:23,480 --> 00:28:25,399
Speaker 1: of learn how to be cool with that. But you

662
00:28:25,400 --> 00:28:27,000
Speaker 1: also have to learn to be flexible at the same

663
00:28:27,040 --> 00:28:29,560
Speaker 1: time and willing to reduce that maybe in a down

664
00:28:29,640 --> 00:28:31,320
Speaker 1: year by just a little bit, and then guess what,

665
00:28:31,480 --> 00:28:33,080
Speaker 1: in a fat year you might have be able to

666
00:28:33,119 --> 00:28:35,919
Speaker 1: increase that a little bit too. So that flexibility is

667
00:28:36,320 --> 00:28:37,800
Speaker 1: kind of, I think a hard thing to come to

668
00:28:37,840 --> 00:28:40,040
Speaker 1: grips with because it's not some set in stone four

669
00:28:40,080 --> 00:28:42,760
Speaker 1: percent no matter what. But I think it's the best

670
00:28:42,760 --> 00:28:44,640
Speaker 1: way to approach it. Kind of like you were talking about.

671
00:28:44,640 --> 00:28:46,960
Speaker 2: Bottom line, there's not any sort of guarantee, and folks

672
00:28:46,960 --> 00:28:48,960
Speaker 2: are willing to pay a lot of money for those guarantees.

673
00:28:48,960 --> 00:28:51,960
Speaker 2: And even those guarantees aren't necessarily guaranteed unless you're willing

674
00:28:52,000 --> 00:28:54,000
Speaker 2: to pay tremendously out the nose and fees.

675
00:28:54,760 --> 00:28:58,000
Speaker 1: Is there a Tommy Boy clip about guarantees? There's got

676
00:28:58,080 --> 00:29:02,480
Speaker 1: to be oh guarantee by taking the car parts. Yeah,

677
00:29:02,600 --> 00:29:04,480
Speaker 1: but Eric, we appreciate.

678
00:29:04,080 --> 00:29:04,640
Speaker 3: Your question, Jill.

679
00:29:04,720 --> 00:29:08,080
Speaker 2: Let's get to a listener who has a clarifying question

680
00:29:08,200 --> 00:29:09,320
Speaker 2: about the standard deduction.

681
00:29:10,000 --> 00:29:13,040
Speaker 6: Hi, met Joel, this is Damon from Utah. I've been

682
00:29:13,040 --> 00:29:15,480
Speaker 6: a listener. Since The Poor Not Poor Days, A lot

683
00:29:15,480 --> 00:29:17,960
Speaker 6: of your device is spot on and you deliver it well.

684
00:29:18,840 --> 00:29:20,960
Speaker 6: One thing I struggle and understand is how owning a

685
00:29:21,040 --> 00:29:24,360
Speaker 6: home is a tax advantage. Since the twenty seventeen tax

686
00:29:24,400 --> 00:29:28,000
Speaker 6: cuts significantly raised the standard deduction, the right offs of

687
00:29:28,040 --> 00:29:29,680
Speaker 6: my house have not been high enough to allow me

688
00:29:29,760 --> 00:29:33,120
Speaker 6: to itemize. Therefore, whether I own a rent the right

689
00:29:33,160 --> 00:29:36,360
Speaker 6: off is the same. My CPA and I were talking

690
00:29:36,360 --> 00:29:39,040
Speaker 6: about this last night and she said she hasn't seen

691
00:29:39,080 --> 00:29:41,960
Speaker 6: an advantage in the last two to three years. Do

692
00:29:42,080 --> 00:29:44,040
Speaker 6: the two of you have some insight on how it

693
00:29:44,120 --> 00:29:48,360
Speaker 6: is a tax advantage. Just for a little insight, I

694
00:29:48,400 --> 00:29:51,280
Speaker 6: own a primary and a rental, and in the last

695
00:29:51,280 --> 00:29:54,640
Speaker 6: few years, with expense right offs for my rentals and

696
00:29:54,640 --> 00:29:57,960
Speaker 6: then the standard right offs for my primary, I've still

697
00:29:58,000 --> 00:30:01,200
Speaker 6: taken the standard deduction I would say for the last

698
00:30:02,760 --> 00:30:06,240
Speaker 6: three to four years. Thanks for your insight. I'd look

699
00:30:06,240 --> 00:30:07,160
Speaker 6: forward to your response.

700
00:30:08,240 --> 00:30:10,640
Speaker 1: Damon massive, Thanks man for listening for as long as

701
00:30:10,680 --> 00:30:12,720
Speaker 1: you have the Yeah, there are probably some people listening

702
00:30:12,720 --> 00:30:13,880
Speaker 1: who are like The Poor Not Poor Days. What are

703
00:30:13,880 --> 00:30:16,320
Speaker 1: you talking about? We used to actually started this podcast

704
00:30:16,320 --> 00:30:19,160
Speaker 1: with a different name, Poor not Poor, And because we

705
00:30:19,240 --> 00:30:21,200
Speaker 1: drink beer. Poor a beer, don't be poor, right, that

706
00:30:21,280 --> 00:30:23,600
Speaker 1: was the reason behind it. We changed it to how

707
00:30:23,640 --> 00:30:27,080
Speaker 1: the money. It's a little easy to understand them. Yeah,

708
00:30:27,200 --> 00:30:30,160
Speaker 1: but if you've been listening that long, you're an OG listener.

709
00:30:30,200 --> 00:30:32,160
Speaker 1: So damon, thank you for that. And you raise a

710
00:30:32,160 --> 00:30:34,720
Speaker 1: great question here. So many folks think that owning their

711
00:30:34,720 --> 00:30:37,120
Speaker 1: home is this tax have and it's a bashion of savings.

712
00:30:37,200 --> 00:30:39,240
Speaker 1: That is one of the reasons people get pushed into

713
00:30:39,240 --> 00:30:42,000
Speaker 1: buying a home is because wait, to think there are

714
00:30:42,000 --> 00:30:43,840
Speaker 1: all these other things that are going to save me money.

715
00:30:43,960 --> 00:30:46,760
Speaker 1: Renting is just throwing away money, and there's so it's

716
00:30:46,800 --> 00:30:49,400
Speaker 1: just this cultivate home ownership that we've bought into as

717
00:30:49,440 --> 00:30:52,120
Speaker 1: a country here in the United States. But alas, so

718
00:30:52,200 --> 00:30:54,320
Speaker 1: many of the things that we say about owning homes

719
00:30:54,640 --> 00:30:57,080
Speaker 1: are wrong or maybe they have some basis in reality

720
00:30:57,120 --> 00:30:59,840
Speaker 1: that just doesn't pan out for most folks, right, And

721
00:31:00,120 --> 00:31:02,560
Speaker 1: some people in the real estate industry will hold this

722
00:31:02,640 --> 00:31:06,080
Speaker 1: out as another reason to buy a primary residence. Basically,

723
00:31:06,480 --> 00:31:08,920
Speaker 1: buy the house because there are tax perks that you're

724
00:31:08,960 --> 00:31:11,400
Speaker 1: not factoring in, and if you did, you'd realize that

725
00:31:11,440 --> 00:31:14,840
Speaker 1: it was no brainer, right, And so they artificially inflate

726
00:31:14,880 --> 00:31:18,080
Speaker 1: the potential tax savings. It's false advertising, and you're letting

727
00:31:18,120 --> 00:31:20,280
Speaker 1: the tail wag the dog. And so you are right

728
00:31:20,600 --> 00:31:23,800
Speaker 1: in this conversation with your CPA that this isn't a

729
00:31:23,840 --> 00:31:26,040
Speaker 1: benefit you're seeing, and so like the fact that you've

730
00:31:26,040 --> 00:31:28,680
Speaker 1: heard so much about it. It's kind of mind boggling, really,

731
00:31:28,760 --> 00:31:29,120
Speaker 1: it's true.

732
00:31:29,200 --> 00:31:31,200
Speaker 2: Yeah, And this is coming from Damon, and he owns

733
00:31:31,280 --> 00:31:34,840
Speaker 2: two properties, right. They come with extra mortgage interests, they

734
00:31:34,880 --> 00:31:38,960
Speaker 2: come with extra property taxes. Even Damon isn't seeing any.

735
00:31:38,840 --> 00:31:39,600
Speaker 3: Tax relief here.

736
00:31:39,640 --> 00:31:41,800
Speaker 2: And the truth is, only about eight percent of folks

737
00:31:41,960 --> 00:31:45,040
Speaker 2: get a mortgage interest deduction these days. And it's largely

738
00:31:45,040 --> 00:31:47,640
Speaker 2: a perk that wealthy Americans are able to snag. And

739
00:31:47,720 --> 00:31:50,120
Speaker 2: the main reason is because of the more generous standard

740
00:31:50,200 --> 00:31:53,480
Speaker 2: deduction because it jumps so much under the Tax Cuts

741
00:31:53,520 --> 00:31:55,920
Speaker 2: and Jobs Act, You've got to typically pay a lot

742
00:31:55,960 --> 00:31:58,600
Speaker 2: of interest. And in addition to that, you need to

743
00:31:58,600 --> 00:32:02,160
Speaker 2: be giving way a substantial chunk of money to nonprofits

744
00:32:02,200 --> 00:32:05,280
Speaker 2: in order to be itemizing your deductions and coming out ahead.

745
00:32:05,520 --> 00:32:06,280
Speaker 3: The average couple.

746
00:32:06,480 --> 00:32:08,520
Speaker 2: They're just not going to have more than twenty nine

747
00:32:09,160 --> 00:32:12,440
Speaker 2: two hundred dollars in deductions and it makes that mortgage

748
00:32:12,440 --> 00:32:14,120
Speaker 2: interest deduction inconsequential.

749
00:32:14,200 --> 00:32:17,000
Speaker 1: Honestly, Felko, It's in the tax code, but sorry, almost

750
00:32:17,040 --> 00:32:19,040
Speaker 1: nobody gets to utilize it. But we still talk about

751
00:32:19,040 --> 00:32:21,800
Speaker 1: it like everybody is utilizing it, or that most people

752
00:32:21,880 --> 00:32:25,280
Speaker 1: have access to this deduction, and even still like I

753
00:32:25,280 --> 00:32:27,640
Speaker 1: wouldn't let the even if I did qualify for the

754
00:32:27,680 --> 00:32:30,240
Speaker 1: mortgage interest deduction. It's not the reason to buy a home.

755
00:32:30,440 --> 00:32:33,480
Speaker 1: It is this tiny little bitty cherry on top if

756
00:32:33,480 --> 00:32:35,760
Speaker 1: you qualify, but again, most people don't.

757
00:32:35,800 --> 00:32:38,880
Speaker 2: So honestly feels it just feels like a holdover from

758
00:32:39,000 --> 00:32:41,720
Speaker 2: the number of years leading up to twenty seventeen. It's

759
00:32:41,760 --> 00:32:43,920
Speaker 2: a narrative that continues even though the facts of the

760
00:32:43,920 --> 00:32:44,800
Speaker 2: ground have changed.

761
00:32:44,880 --> 00:32:45,520
Speaker 1: That's exactly right.

762
00:32:45,600 --> 00:32:45,840
Speaker 3: Yeah.

763
00:32:45,960 --> 00:32:48,200
Speaker 1: One thing you can do, potentially, by the way, damon

764
00:32:48,240 --> 00:32:50,120
Speaker 1: this specifically for you and for other people out there,

765
00:32:50,280 --> 00:32:52,920
Speaker 1: to snag the mortgage interest tax deduction maybe in at

766
00:32:53,000 --> 00:32:56,560
Speaker 1: least some years, is to batch your giving. We've talked

767
00:32:56,600 --> 00:32:58,680
Speaker 1: about this on giving episodes before. We've talked about this.

768
00:32:58,920 --> 00:33:00,800
Speaker 1: We talk about donor and advised funds.

769
00:33:00,920 --> 00:33:01,239
Speaker 3: That's right.

770
00:33:01,280 --> 00:33:03,280
Speaker 1: Well, let's say you typically give away something like fourteen

771
00:33:03,320 --> 00:33:05,200
Speaker 1: grand each year. I don't know that might be a lot,

772
00:33:05,320 --> 00:33:07,080
Speaker 1: might be a little compared to depending on who you are.

773
00:33:07,600 --> 00:33:09,840
Speaker 1: What if you gave away twenty eight thousand dollars and

774
00:33:09,920 --> 00:33:12,240
Speaker 1: one lump sum, let's say in December of one year,

775
00:33:12,560 --> 00:33:14,640
Speaker 1: and zero dollars the next year, you're still still giving

776
00:33:14,680 --> 00:33:17,360
Speaker 1: away the equivalent of fourteen thousand bucks in each year,

777
00:33:17,360 --> 00:33:21,520
Speaker 1: but you're just doing it in one defined calendar period instead. Well,

778
00:33:21,640 --> 00:33:24,320
Speaker 1: it's easier said than done because it involves saving and planning.

779
00:33:24,560 --> 00:33:27,120
Speaker 1: But that way, you're still giving away the amount you

780
00:33:27,120 --> 00:33:29,800
Speaker 1: intended to. And in the year that you give away

781
00:33:29,840 --> 00:33:32,160
Speaker 1: the twenty eight grand, your mortgage interest and then your

782
00:33:32,160 --> 00:33:34,960
Speaker 1: property taxes would put you over the top, allowing you

783
00:33:35,000 --> 00:33:37,400
Speaker 1: to idomize in that given year. See a bigger tax

784
00:33:37,440 --> 00:33:39,600
Speaker 1: break in that year. Then you take the standard deduction

785
00:33:39,680 --> 00:33:41,960
Speaker 1: again the following year when you give it away next

786
00:33:41,960 --> 00:33:45,000
Speaker 1: to nothing. Right, it's a hypothetical scenario, but these are

787
00:33:45,040 --> 00:33:47,960
Speaker 1: the kinds of levers that some folks are pulling. Given

788
00:33:48,080 --> 00:33:50,840
Speaker 1: kind of the way the tax code is currently written,

789
00:33:51,120 --> 00:33:54,600
Speaker 1: it benefits some of that bunching of donations in order

790
00:33:54,640 --> 00:33:55,920
Speaker 1: to give yourself the biggest tax break.

791
00:33:56,200 --> 00:33:56,560
Speaker 3: Totally.

792
00:33:56,640 --> 00:33:59,120
Speaker 2: Yeah, and this is where donors advised funds I think

793
00:33:59,240 --> 00:34:03,120
Speaker 2: solve this, Like when we had the founder of Daffy on,

794
00:34:03,480 --> 00:34:05,160
Speaker 2: I feel like that's the best argument to be made

795
00:34:05,280 --> 00:34:07,400
Speaker 2: is the fact that oftentimes when you have a lot

796
00:34:07,440 --> 00:34:09,880
Speaker 2: of money like this, there is a disconnect between the

797
00:34:09,920 --> 00:34:11,840
Speaker 2: money that you have on hand that you want to

798
00:34:12,680 --> 00:34:16,759
Speaker 2: give away versus the organizations and the need that they

799
00:34:16,760 --> 00:34:19,120
Speaker 2: have in the moment. Right, So it's like basically they're

800
00:34:19,400 --> 00:34:21,000
Speaker 2: what do you call it, like they supplying the demand

801
00:34:21,000 --> 00:34:24,000
Speaker 2: of your charitable giving is asynchronous to some of the

802
00:34:24,120 --> 00:34:26,040
Speaker 2: organizations that you want to give to, which is why

803
00:34:26,080 --> 00:34:29,040
Speaker 2: the ability to put money within a donor advice fund

804
00:34:29,080 --> 00:34:29,759
Speaker 2: and have it sit there.

805
00:34:29,840 --> 00:34:31,200
Speaker 3: Yes, you get the tax BIK for the year that

806
00:34:31,200 --> 00:34:31,640
Speaker 3: you make that.

807
00:34:31,600 --> 00:34:34,319
Speaker 2: Contribution, but then you don't have to give that money

808
00:34:34,320 --> 00:34:36,759
Speaker 2: away until later the next year or years down the road,

809
00:34:36,800 --> 00:34:40,120
Speaker 2: even yeah, even after it's it's sat there and actually grown.

810
00:34:40,239 --> 00:34:42,719
Speaker 1: Can release the funds in a steady stream if you want, yeah, yeah,

811
00:34:42,719 --> 00:34:44,040
Speaker 1: which means like, yeah, you're right, it doesn't have to

812
00:34:44,120 --> 00:34:46,120
Speaker 1: hit the accounts of your favorite charities.

813
00:34:45,800 --> 00:34:47,920
Speaker 2: And the moment you don't, you don't have to decide, okay,

814
00:34:47,960 --> 00:34:50,239
Speaker 2: well twenty eight thousand dollars, Well, like that's a big

815
00:34:50,239 --> 00:34:51,600
Speaker 2: decision who am I going to give that money to.

816
00:34:51,640 --> 00:34:53,799
Speaker 2: We don't have to decide all at once. That's something

817
00:34:53,880 --> 00:34:57,120
Speaker 2: that you can figure out over time. And then by

818
00:34:57,320 --> 00:35:00,840
Speaker 2: itemizing well, your state, your local taxes, including property taxes,

819
00:35:00,840 --> 00:35:03,400
Speaker 2: they can be included in those itemized deductions as well,

820
00:35:03,800 --> 00:35:06,120
Speaker 2: up to a max of ten thousand dollars, And so

821
00:35:06,160 --> 00:35:08,960
Speaker 2: that might be a way to with your charitable giving,

822
00:35:09,000 --> 00:35:10,600
Speaker 2: have that kind of push you over the top. If

823
00:35:10,600 --> 00:35:14,319
Speaker 2: you've got higher medical or dental bills as well, that's

824
00:35:14,320 --> 00:35:17,360
Speaker 2: something that you can you can deduct. So currently I

825
00:35:17,400 --> 00:35:20,560
Speaker 2: think current years it's if it's over seven point five

826
00:35:20,680 --> 00:35:23,759
Speaker 2: percent of your adjusted gross income, but it's actually better. So,

827
00:35:23,880 --> 00:35:25,640
Speaker 2: like I know, when we had our first daughter, it

828
00:35:25,680 --> 00:35:28,680
Speaker 2: was something like ten percent, and so the threshold of

829
00:35:28,760 --> 00:35:31,960
Speaker 2: what qualifies as an itemized medical deduction that you can

830
00:35:32,000 --> 00:35:33,920
Speaker 2: take has actually gone down, so there's more that you

831
00:35:33,960 --> 00:35:34,920
Speaker 2: can actually itemize.

832
00:35:35,000 --> 00:35:36,200
Speaker 1: This is why I'm opting to get a lot of

833
00:35:36,239 --> 00:35:38,719
Speaker 1: cosmetic work done this day as you consider it brand

834
00:35:38,760 --> 00:35:39,640
Speaker 1: new nos coming your way.

835
00:35:39,680 --> 00:35:41,400
Speaker 2: Bottom line, I mean that the nice thing about the

836
00:35:41,480 --> 00:35:43,680
Speaker 2: higher standard deduction though, is that it saves a lot

837
00:35:43,680 --> 00:35:45,760
Speaker 2: of folks time. It saves them hassle when they're filing

838
00:35:45,840 --> 00:35:48,280
Speaker 2: their taxes. But folks who are on that edge, folks

839
00:35:48,280 --> 00:35:50,960
Speaker 2: who you know could come close to itemizing, they can

840
00:35:51,040 --> 00:35:53,480
Speaker 2: likely find some different ways to itemize in certain years,

841
00:35:53,480 --> 00:35:56,480
Speaker 2: mind shifting and moving things around like that where they're

842
00:35:56,480 --> 00:35:59,280
Speaker 2: able to optimize their tax bill. But still the mortgage

843
00:35:59,360 --> 00:36:03,080
Speaker 2: interest tax deduction, it's massively overblown. And so if you

844
00:36:03,120 --> 00:36:06,480
Speaker 2: hear someone out there talking about it a lot, especially

845
00:36:06,480 --> 00:36:09,080
Speaker 2: if they're in the real estate field, especially if they're

846
00:36:09,800 --> 00:36:12,920
Speaker 2: an agent or a lender, this check and see if

847
00:36:12,920 --> 00:36:15,960
Speaker 2: it would actually make a difference in your situation, because

848
00:36:16,000 --> 00:36:19,400
Speaker 2: I think unless you are giving away a substantial amount

849
00:36:19,400 --> 00:36:21,880
Speaker 2: of money, then I think the chances are that it

850
00:36:22,120 --> 00:36:23,640
Speaker 2: likely wouldn't do a whole lot for.

851
00:36:23,600 --> 00:36:24,920
Speaker 3: You in your tax situation.

852
00:36:25,040 --> 00:36:27,600
Speaker 1: This still resides on all of our collective consciousness because

853
00:36:27,600 --> 00:36:30,480
Speaker 1: of all those years where it did make a difference,

854
00:36:30,719 --> 00:36:32,640
Speaker 1: and even then it was overblown. It was like, buy

855
00:36:32,640 --> 00:36:34,880
Speaker 1: a home because you'll get the tax deduction, and it's like, well,

856
00:36:35,680 --> 00:36:38,000
Speaker 1: you don't buy it, kind of like we've talked about

857
00:36:38,000 --> 00:36:41,400
Speaker 1: with small businesses, Matt buying items you just because you

858
00:36:41,400 --> 00:36:43,600
Speaker 1: can just write it off exactly, and it's like, well,

859
00:36:43,880 --> 00:36:46,000
Speaker 1: you still pay for the thing, and you might get

860
00:36:46,000 --> 00:36:47,880
Speaker 1: some tax savings on the back end. But it doesn't

861
00:36:47,880 --> 00:36:50,319
Speaker 1: mean that you buy all those things just for the

862
00:36:50,360 --> 00:36:53,719
Speaker 1: tax break, because you're probably running an inefficient business and

863
00:36:54,120 --> 00:36:56,360
Speaker 1: you don't want to go in too hard in that direction.

864
00:36:56,560 --> 00:36:58,240
Speaker 1: All right, We've got more to get to on this episode,

865
00:36:58,239 --> 00:37:01,840
Speaker 1: including like how much should you be investing what percentage

866
00:37:01,880 --> 00:37:04,480
Speaker 1: of your income? We'll tackle that question right after this.

867
00:37:12,760 --> 00:37:14,279
Speaker 2: All right, man, we are back from the break and

868
00:37:14,320 --> 00:37:17,120
Speaker 2: we've got our Facebook question of the week, and this

869
00:37:17,160 --> 00:37:21,200
Speaker 2: one is from an anonymous poster who writes and needs

870
00:37:21,200 --> 00:37:24,960
Speaker 2: some thoughts on investing percentage. My husband and I are forty.

871
00:37:25,239 --> 00:37:27,040
Speaker 2: He brings home the majority of our money and would

872
00:37:27,080 --> 00:37:29,960
Speaker 2: like to retire at sixty five. We were not able

873
00:37:30,000 --> 00:37:32,680
Speaker 2: to invest much until the past few years. Our investments

874
00:37:32,760 --> 00:37:35,800
Speaker 2: sit at one hundred and seventy eight thousand. He started

875
00:37:35,840 --> 00:37:37,759
Speaker 2: a new job which brings home about one hundred and

876
00:37:37,760 --> 00:37:40,320
Speaker 2: twenty thousand a year, and we'll soon receive a raise

877
00:37:40,480 --> 00:37:45,000
Speaker 2: of twenty three percent based on union negotiations. Is investing

878
00:37:45,040 --> 00:37:47,479
Speaker 2: twenty five percent of his pay too much? Our fixed

879
00:37:47,520 --> 00:37:50,160
Speaker 2: costs are around one hundred and sixty dollars a month.

880
00:37:50,280 --> 00:37:53,640
Speaker 2: We are saving for a new computer, vehicles renovations, so

881
00:37:53,680 --> 00:37:56,319
Speaker 2: that totals three hundred and twenty five dollars a month.

882
00:37:56,600 --> 00:37:59,160
Speaker 2: Discretionary spending is nine hundred and sixty dollars a month,

883
00:37:59,280 --> 00:38:02,720
Speaker 2: in donations are at six hundred and twenty dollars a month.

884
00:38:03,120 --> 00:38:05,960
Speaker 2: We have no debt besides a thirty year mortgage at

885
00:38:06,080 --> 00:38:09,560
Speaker 2: two point seventy five percent interest. First thing, right out

886
00:38:09,560 --> 00:38:11,080
Speaker 2: of the gate, Hang on to that mortgage as long

887
00:38:11,120 --> 00:38:14,840
Speaker 2: as humanly possible, the anonymous poster, because that.

888
00:38:14,960 --> 00:38:16,239
Speaker 3: Yeah, you can't beat that, My.

889
00:38:16,200 --> 00:38:18,680
Speaker 1: Goddess humble bragging the game right now, two seven five.

890
00:38:18,760 --> 00:38:20,880
Speaker 1: It's bragging about your low interest rate mortgage. And if

891
00:38:20,920 --> 00:38:23,120
Speaker 1: you're in the twos, you make everybody yeh a thirty

892
00:38:23,200 --> 00:38:23,799
Speaker 1: year yeah, Like.

893
00:38:23,760 --> 00:38:24,759
Speaker 3: That's that's the other part here.

894
00:38:24,800 --> 00:38:26,880
Speaker 2: It's not like they needed to jump to a fifteen

895
00:38:26,960 --> 00:38:28,400
Speaker 2: years sorder to get to that two percent.

896
00:38:28,520 --> 00:38:30,879
Speaker 1: Just don't tell someone who's trying to buy their first

897
00:38:30,880 --> 00:38:34,080
Speaker 1: house right now. They'll punch in the face. It's so

898
00:38:34,200 --> 00:38:37,160
Speaker 1: frustrating to hear that. I know for people who bought

899
00:38:37,160 --> 00:38:39,279
Speaker 1: five six years ago, and it's like, yeah, my home

900
00:38:39,320 --> 00:38:41,200
Speaker 1: equity has doubled since I bought it, and guess what

901
00:38:41,239 --> 00:38:43,239
Speaker 1: I got this locked in low mortgage rate and people

902
00:38:43,239 --> 00:38:44,960
Speaker 1: who are like I would like to buy a home.

903
00:38:45,480 --> 00:38:47,960
Speaker 1: I'm so mad that I wasn't like at proper home

904
00:38:48,000 --> 00:38:49,879
Speaker 1: buying age back then at that point in time.

905
00:38:50,000 --> 00:38:52,239
Speaker 2: Makes it makes it difficult, It does, okay, But what

906
00:38:52,280 --> 00:38:54,960
Speaker 2: do you think twenty five percent of his overall paycheck?

907
00:38:55,320 --> 00:38:56,520
Speaker 3: Is that too much or too little?

908
00:38:56,600 --> 00:38:59,560
Speaker 1: That okay? So my knee jerk reaction is like, no way,

909
00:38:59,640 --> 00:39:01,920
Speaker 1: is that too much? But I also don't necessarily want

910
00:39:01,920 --> 00:39:05,200
Speaker 1: to you'd say that, but I also don't want to say, oh,

911
00:39:05,239 --> 00:39:06,800
Speaker 1: you should really be doing a whole lot more than that,

912
00:39:06,840 --> 00:39:08,799
Speaker 1: and you should all because like the truth is, you

913
00:39:08,800 --> 00:39:11,120
Speaker 1: don't always need to be aiming higher. You don't always

914
00:39:11,120 --> 00:39:13,799
Speaker 1: need to be trying to save and invest a much

915
00:39:13,880 --> 00:39:16,120
Speaker 1: larger chunk of your income if you're already crushing it, right,

916
00:39:16,320 --> 00:39:20,040
Speaker 1: And so this anonymous poster, Matt, has clearly been a

917
00:39:20,080 --> 00:39:22,239
Speaker 1: diligent investor over those past few years. They said they've

918
00:39:22,239 --> 00:39:23,920
Speaker 1: just been investing for a few years, but they've got

919
00:39:23,920 --> 00:39:26,400
Speaker 1: almost two hundred K, which is pretty impressive. That's amazing

920
00:39:26,400 --> 00:39:28,799
Speaker 1: for a couple of years. Yes, that means that they've

921
00:39:28,800 --> 00:39:32,360
Speaker 1: been like Max and everything out invest in investing wisely,

922
00:39:32,440 --> 00:39:34,239
Speaker 1: and the market has done well for them in those

923
00:39:34,280 --> 00:39:36,959
Speaker 1: years as well. And so you've still got twenty five

924
00:39:37,080 --> 00:39:38,920
Speaker 1: more years that you'll be able to invest with the

925
00:39:38,920 --> 00:39:41,839
Speaker 1: goal of retiring at sixty five. I would say that

926
00:39:41,880 --> 00:39:45,040
Speaker 1: with the known quantity of this raise coming soon, being

927
00:39:45,040 --> 00:39:47,800
Speaker 1: able to up your investing game funneling a higher percentage

928
00:39:47,800 --> 00:39:50,160
Speaker 1: into your retirement accounts is awesome. Like twenty five percent,

929
00:39:50,440 --> 00:39:52,960
Speaker 1: in my mind is is a great goal for most

930
00:39:52,960 --> 00:39:55,440
Speaker 1: people to have. We usually set fifteen percent as kind

931
00:39:55,440 --> 00:39:56,880
Speaker 1: of the floor of what you should be trying to

932
00:39:56,880 --> 00:39:59,359
Speaker 1: go for. If you're in twenty five, that means you've

933
00:39:59,360 --> 00:40:01,719
Speaker 1: made some more frugal decisions in your life and you've

934
00:40:01,719 --> 00:40:03,799
Speaker 1: been able to increase your pay and guess what, why

935
00:40:03,840 --> 00:40:06,680
Speaker 1: not invest even more than money, especially because Matt they

936
00:40:06,800 --> 00:40:09,719
Speaker 1: started later. I mean, our first listener of the day

937
00:40:10,120 --> 00:40:12,080
Speaker 1: is twenty four starting them. And if you just say

938
00:40:12,080 --> 00:40:14,279
Speaker 1: fifteen percent your whole life when you started twenty four,

939
00:40:14,560 --> 00:40:16,560
Speaker 1: you'll be just fine. But if you start, you know,

940
00:40:16,920 --> 00:40:19,160
Speaker 1: in your late thirties, you might want to say closer

941
00:40:19,200 --> 00:40:20,480
Speaker 1: to twenty five percent to be able to get where

942
00:40:20,480 --> 00:40:20,880
Speaker 1: you want to go.

943
00:40:20,920 --> 00:40:23,320
Speaker 2: All right, Yeah, so this is where the details matter.

944
00:40:23,400 --> 00:40:25,120
Speaker 2: And so I just realized too, we didn't when we

945
00:40:25,160 --> 00:40:26,719
Speaker 2: were talking about the four percent rule. We should have

946
00:40:26,760 --> 00:40:30,160
Speaker 2: talked about the twenty five x rule, the twenty five

947
00:40:30,200 --> 00:40:33,640
Speaker 2: times your annual expenses rule, because for me, like the

948
00:40:33,640 --> 00:40:35,640
Speaker 2: four percent rule can get confusing because it's just like, well,

949
00:40:35,640 --> 00:40:38,000
Speaker 2: four percent of what and don't there's just a whole

950
00:40:38,000 --> 00:40:39,480
Speaker 2: lot of variables. And then folks are like, well, maybe

951
00:40:39,480 --> 00:40:41,040
Speaker 2: it's three point five, or oh, you could do five

952
00:40:41,040 --> 00:40:43,080
Speaker 2: point five or as I love the clarity that you

953
00:40:43,120 --> 00:40:45,520
Speaker 2: get with twenty five times your expenses and.

954
00:40:45,400 --> 00:40:46,560
Speaker 1: It's a simple way to understand.

955
00:40:46,640 --> 00:40:49,879
Speaker 2: Yeah, And so what's great about this poster is that

956
00:40:50,080 --> 00:40:53,320
Speaker 2: they have all their expenses listed out, and if you

957
00:40:53,440 --> 00:40:55,319
Speaker 2: follow the rule of twenty five, you add up all

958
00:40:55,360 --> 00:40:58,080
Speaker 2: of their annual expenses, you take that number and you

959
00:40:58,120 --> 00:41:01,319
Speaker 2: multiply it by twenty five. Well, that spits out two

960
00:41:01,400 --> 00:41:05,319
Speaker 2: point one something million dollars that this individual needs by.

961
00:41:05,239 --> 00:41:06,280
Speaker 3: The time they hit retirement.

962
00:41:06,920 --> 00:41:10,200
Speaker 2: And it seems like that that's an incredibly large amount

963
00:41:10,280 --> 00:41:12,800
Speaker 2: of money. It is that being said, you already have

964
00:41:12,840 --> 00:41:15,239
Speaker 2: one hundred and seventy eight thousand dollars, and so if

965
00:41:15,280 --> 00:41:18,880
Speaker 2: you assume that you're going to earn eight percent returns

966
00:41:18,920 --> 00:41:22,080
Speaker 2: in the market were you to invest twenty five percent

967
00:41:22,120 --> 00:41:24,440
Speaker 2: of your current salary, this isn't even accounting for this

968
00:41:24,520 --> 00:41:27,920
Speaker 2: twenty three percent raise. You're looking at at least investing

969
00:41:28,040 --> 00:41:32,120
Speaker 2: twenty five hundred dollars a month, which if were you

970
00:41:32,160 --> 00:41:34,440
Speaker 2: to do that, you're going to end up way way

971
00:41:34,520 --> 00:41:37,240
Speaker 2: beyond that two point one. So I ran the numbers,

972
00:41:37,280 --> 00:41:40,080
Speaker 2: and technically, if you're looking to land around the two

973
00:41:40,120 --> 00:41:43,160
Speaker 2: point one million dollar mark, you're only looking at investing

974
00:41:43,360 --> 00:41:46,680
Speaker 2: eleven hundred dollars a month, which is less than half

975
00:41:46,880 --> 00:41:50,240
Speaker 2: of twenty five percent of your of his current income,

976
00:41:50,280 --> 00:41:52,399
Speaker 2: and that doesn't even account for this raise that he's

977
00:41:52,440 --> 00:41:52,919
Speaker 2: looking at.

978
00:41:52,960 --> 00:41:53,560
Speaker 3: Getting as well.

979
00:41:53,560 --> 00:41:56,480
Speaker 2: And so I guess what I'm highlighting here is that

980
00:41:56,520 --> 00:41:58,959
Speaker 2: when you crunch the numbers and look at and again

981
00:41:59,040 --> 00:42:01,480
Speaker 2: this is there's a few assumptions here. Assuming that you're

982
00:42:01,520 --> 00:42:03,720
Speaker 2: you know that you are going to see eight percent returns,

983
00:42:04,080 --> 00:42:06,399
Speaker 2: and the S and P has averaged over the since

984
00:42:06,480 --> 00:42:09,520
Speaker 2: like the fifties, over ten percent, and so this accounts

985
00:42:09,880 --> 00:42:13,120
Speaker 2: for a degree of inflation. Of course, assuming the Fed's

986
00:42:13,160 --> 00:42:16,160
Speaker 2: able to get that down closer to two percent, perhaps

987
00:42:16,239 --> 00:42:17,760
Speaker 2: well we'll see whether or not that happens.

988
00:42:17,800 --> 00:42:18,439
Speaker 1: Good luck, guys.

989
00:42:19,040 --> 00:42:22,279
Speaker 2: But all that to say, the reason I'm taking this

990
00:42:22,320 --> 00:42:24,600
Speaker 2: approach is because I want to relieve some pressure from

991
00:42:24,640 --> 00:42:27,400
Speaker 2: this listener to feel like that they have to invest

992
00:42:27,800 --> 00:42:31,320
Speaker 2: twenty five percent or even more of their overall salary

993
00:42:31,320 --> 00:42:34,480
Speaker 2: because they're thinking, man, gosh, I haven't. We haven't been

994
00:42:34,520 --> 00:42:37,360
Speaker 2: investing at all. But because of the massive amounts of

995
00:42:37,360 --> 00:42:39,920
Speaker 2: money that they would be able to invest for the future,

996
00:42:40,239 --> 00:42:42,359
Speaker 2: that just puts some like head and shoulders above other

997
00:42:42,360 --> 00:42:44,360
Speaker 2: folks who might be in a similar situation. And so

998
00:42:44,440 --> 00:42:47,640
Speaker 2: I present this information to relieve a little bit of

999
00:42:47,680 --> 00:42:51,200
Speaker 2: pressure because man, you're talking about saving up for like

1000
00:42:51,239 --> 00:42:54,399
Speaker 2: a new vehicle. Okay, maybe you spend an extra five

1001
00:42:54,440 --> 00:42:57,120
Speaker 2: thousand dollars on that vehicle, and maybe that's, yes, that

1002
00:42:57,239 --> 00:43:00,239
Speaker 2: enlarges that savings budget every single month of the at

1003
00:43:00,239 --> 00:43:02,120
Speaker 2: that you have to set aside. But what I'm pointing

1004
00:43:02,160 --> 00:43:04,160
Speaker 2: out here is that it's okay because you are most

1005
00:43:04,200 --> 00:43:06,400
Speaker 2: likely going to have enough. And that doesn't even account

1006
00:43:06,400 --> 00:43:09,239
Speaker 2: for some like additional streams of income as well, right,

1007
00:43:09,239 --> 00:43:11,440
Speaker 2: Like we're not even talking about Social Security as well.

1008
00:43:11,480 --> 00:43:13,719
Speaker 1: That's true, okay, And what it made me think, Matt,

1009
00:43:13,760 --> 00:43:16,400
Speaker 1: somebody in the Facebook group responded to this poster and

1010
00:43:16,400 --> 00:43:18,960
Speaker 1: they said, I don't know that I've ever heard anyone

1011
00:43:19,000 --> 00:43:21,480
Speaker 1: regret investing too much, and to a certain extent, I

1012
00:43:21,560 --> 00:43:22,920
Speaker 1: kind of agree with that. But then on the other

1013
00:43:22,920 --> 00:43:25,839
Speaker 1: flip side, when you talk about the regrets of the dying,

1014
00:43:26,160 --> 00:43:27,520
Speaker 1: what are the typical regrets of the dying?

1015
00:43:27,560 --> 00:43:28,120
Speaker 3: That's what I'm thinking.

1016
00:43:28,120 --> 00:43:29,799
Speaker 1: It's like, oh, I didn't spend enough time with my

1017
00:43:29,920 --> 00:43:32,880
Speaker 1: friends or family. Oh I didn't spend enough time like

1018
00:43:33,000 --> 00:43:36,080
Speaker 1: doing volunteer work in the organizations in my community that

1019
00:43:36,080 --> 00:43:38,840
Speaker 1: I cared about, because guess what, I was so focused

1020
00:43:38,920 --> 00:43:43,040
Speaker 1: on work income investing. And that's also the like exception

1021
00:43:43,120 --> 00:43:45,920
Speaker 1: that's like not the normal American. But this poster doesn't

1022
00:43:45,920 --> 00:43:47,759
Speaker 1: sound like the normal American anyway. They sound like they're

1023
00:43:47,800 --> 00:43:50,359
Speaker 1: being pretty thoughtful about what they invest and how they

1024
00:43:50,360 --> 00:43:54,279
Speaker 1: think about the financial future. So you have to also

1025
00:43:54,280 --> 00:43:56,239
Speaker 1: be thoughtful about today. And so it's not that most

1026
00:43:56,239 --> 00:43:58,680
Speaker 1: people say, oh, man, I'm really bummed I invested too

1027
00:43:58,760 --> 00:44:01,080
Speaker 1: much and I've got three million dollars in my retirement account.

1028
00:44:01,160 --> 00:44:02,399
Speaker 1: But what did it take to get there?

1029
00:44:02,480 --> 00:44:04,680
Speaker 3: What sacrifices will you have made in order to have

1030
00:44:04,719 --> 00:44:05,319
Speaker 3: that nest egg?

1031
00:44:05,360 --> 00:44:08,279
Speaker 1: And so for some people at least it requires such

1032
00:44:08,320 --> 00:44:10,640
Speaker 1: a sacrifice that they're not mad about how much money

1033
00:44:10,640 --> 00:44:12,840
Speaker 1: they've been able to accrue, but they do have regrets

1034
00:44:12,920 --> 00:44:14,879
Speaker 1: about the things that they had to sacrifice in order

1035
00:44:14,920 --> 00:44:16,600
Speaker 1: to get to that point. And I do think it

1036
00:44:16,640 --> 00:44:18,960
Speaker 1: is worth pointing out to be cautious, to be careful,

1037
00:44:19,000 --> 00:44:20,840
Speaker 1: and to be thoughtful about, well, cool, do I have

1038
00:44:20,880 --> 00:44:23,120
Speaker 1: to take on more responsibilities at work? Do I have

1039
00:44:23,160 --> 00:44:24,600
Speaker 1: to like maybe work more hours. Do I have to

1040
00:44:24,600 --> 00:44:26,160
Speaker 1: be away from my home? Do I have to be

1041
00:44:26,480 --> 00:44:29,360
Speaker 1: traveling more for my job in order to earn this

1042
00:44:29,440 --> 00:44:31,919
Speaker 1: increase salary? Like what is it taking to get there?

1043
00:44:32,200 --> 00:44:34,800
Speaker 1: And are those trade offs worth it? And for everybody's

1044
00:44:34,800 --> 00:44:36,440
Speaker 1: going to have like a different answer on that, but

1045
00:44:36,480 --> 00:44:38,960
Speaker 1: I guess it is just worth in a similar vein

1046
00:44:39,000 --> 00:44:41,120
Speaker 1: Matt kind of pushing back, like you are saying, well,

1047
00:44:41,160 --> 00:44:43,040
Speaker 1: what does it take to get to that point? And

1048
00:44:43,080 --> 00:44:45,160
Speaker 1: do you actually need that much? And it doesn't mean

1049
00:44:45,320 --> 00:44:48,440
Speaker 1: that you should take your investments from twenty percent down

1050
00:44:48,480 --> 00:44:50,919
Speaker 1: to zero, but it also it also means that hey,

1051
00:44:51,400 --> 00:44:53,879
Speaker 1: maybe you don't need to like continue to ramp things

1052
00:44:53,920 --> 00:44:55,480
Speaker 1: up in definitely either totally.

1053
00:44:55,560 --> 00:44:57,360
Speaker 2: Yeah, this is again why I love the clarity of

1054
00:44:57,360 --> 00:44:59,600
Speaker 2: the twenty five x RO which is based on the

1055
00:44:59,640 --> 00:45:02,719
Speaker 2: four per rule. But this also assumes that your expenses

1056
00:45:02,719 --> 00:45:05,319
Speaker 2: are looking at staying the same as well, because guess

1057
00:45:05,360 --> 00:45:07,640
Speaker 2: what if there are some fancier things that you want

1058
00:45:07,680 --> 00:45:10,200
Speaker 2: to do off in the future because maybe you have

1059
00:45:10,320 --> 00:45:11,520
Speaker 2: sacrificed in the meantime.

1060
00:45:11,600 --> 00:45:14,120
Speaker 3: Oh really, as I think about retirement, I do.

1061
00:45:14,120 --> 00:45:17,680
Speaker 2: Envision us taking more vacations, maybe eating nicer cuts of meat, Joel,

1062
00:45:17,719 --> 00:45:20,040
Speaker 2: I know that's something that that's been on your mind

1063
00:45:20,120 --> 00:45:20,799
Speaker 2: reason or just.

1064
00:45:20,719 --> 00:45:22,600
Speaker 1: The reality of inflation that things are going to cost

1065
00:45:22,600 --> 00:45:24,520
Speaker 1: more us no matter what you do in your life.

1066
00:45:24,520 --> 00:45:26,919
Speaker 2: And so with that in mind, I could see where

1067
00:45:26,960 --> 00:45:29,160
Speaker 2: you're like, Okay, well maybe we don't maybe we don't

1068
00:45:29,280 --> 00:45:33,600
Speaker 2: need to invest that full twenty five percent. But again, yeah,

1069
00:45:33,680 --> 00:45:36,399
Speaker 2: based on the numbers that this poster left us with,

1070
00:45:36,480 --> 00:45:38,959
Speaker 2: I mean you are looking at something closer to eleven hundred,

1071
00:45:38,960 --> 00:45:40,680
Speaker 2: which just frees up money in the meantime to be

1072
00:45:40,719 --> 00:45:42,440
Speaker 2: able to live your life in the here now and

1073
00:45:42,480 --> 00:45:46,160
Speaker 2: not just bank on those future years where you're thinking, oh,

1074
00:45:46,239 --> 00:45:49,200
Speaker 2: one day, at some point, I'll take that nicer vacation. Now, well,

1075
00:45:49,239 --> 00:45:51,640
Speaker 2: there are ways you can start integrating that into your

1076
00:45:51,680 --> 00:45:54,400
Speaker 2: life now, which I think is even that's just a healthier.

1077
00:45:54,160 --> 00:45:55,160
Speaker 3: Way to approach life too.

1078
00:45:55,239 --> 00:45:59,400
Speaker 2: Right where you are, it's just a more gradual, healthy

1079
00:45:59,640 --> 00:46:02,759
Speaker 2: transition into those retirement years as opposed to there being

1080
00:46:02,840 --> 00:46:05,759
Speaker 2: sort of like this hard switch, right, like this hard

1081
00:46:05,760 --> 00:46:07,800
Speaker 2: cut off where it feels like all of a sudden

1082
00:46:07,800 --> 00:46:10,120
Speaker 2: you have to completely change. How does that you view

1083
00:46:10,160 --> 00:46:11,960
Speaker 2: money and how you how you view your time?

1084
00:46:12,320 --> 00:46:15,320
Speaker 1: Yeah, finding that balance, finding that happy medium never easy.

1085
00:46:15,360 --> 00:46:17,080
Speaker 1: That's not always what you and I are trying to

1086
00:46:17,120 --> 00:46:19,960
Speaker 1: achieve on you know, in our lives, and that's what

1087
00:46:20,000 --> 00:46:22,080
Speaker 1: we want listeners of out of money to be doing

1088
00:46:22,120 --> 00:46:24,080
Speaker 1: at the same time. That's why I mean, if this

1089
00:46:24,400 --> 00:46:26,719
Speaker 1: anonymous poster to come in and said we're thinking about

1090
00:46:26,719 --> 00:46:29,200
Speaker 1: trying to ramp up like sixty to seventy percent savings rate,

1091
00:46:29,480 --> 00:46:31,759
Speaker 1: throwing all that money in investments, we would be like

1092
00:46:31,840 --> 00:46:34,960
Speaker 1: that sounds that's yeah, pretty intense. And unless you're the

1093
00:46:35,040 --> 00:46:37,600
Speaker 1: kind of person who's like, sorry, it's fire or die

1094
00:46:37,640 --> 00:46:40,799
Speaker 1: for me. I want to retire at forty four and

1095
00:46:40,800 --> 00:46:42,600
Speaker 1: not look back and never have to work again. Well,

1096
00:46:42,640 --> 00:46:44,200
Speaker 1: if that's your goal, like, who am I to tell

1097
00:46:44,239 --> 00:46:46,080
Speaker 1: you that that's a bad goal? But that's not really

1098
00:46:46,120 --> 00:46:48,440
Speaker 1: our approach on this show. And so what we want

1099
00:46:48,480 --> 00:46:50,400
Speaker 1: you to do is live an awesome life in the

1100
00:46:50,400 --> 00:46:52,239
Speaker 1: here and now, spending money in ways that move the

1101
00:46:52,239 --> 00:46:54,399
Speaker 1: happiness meter for you in a meaningful way, cutting back

1102
00:46:54,440 --> 00:46:56,759
Speaker 1: in ways that don't, and investing a decent chunk of

1103
00:46:56,800 --> 00:46:58,680
Speaker 1: your income so you don't have to have financial worries

1104
00:46:58,680 --> 00:47:01,040
Speaker 1: in the future. But it's possible to overdo it on

1105
00:47:01,080 --> 00:47:03,200
Speaker 1: any one of those fronts, and we're all kind of

1106
00:47:03,239 --> 00:47:05,280
Speaker 1: like that pendulum swing and trying to find the center,

1107
00:47:05,480 --> 00:47:07,200
Speaker 1: and it's it's hard to find it exactly.

1108
00:47:07,320 --> 00:47:10,200
Speaker 2: Yeah, it's important to keep your craft beer equivalent in mind.

1109
00:47:10,239 --> 00:47:11,960
Speaker 2: He's got to keep that forefront because it helps to

1110
00:47:12,000 --> 00:47:13,759
Speaker 2: remind you what it is that you're saving up for

1111
00:47:13,920 --> 00:47:16,520
Speaker 2: off in the future, what you're also enjoying in the

1112
00:47:16,560 --> 00:47:17,120
Speaker 2: here and now.

1113
00:47:17,600 --> 00:47:19,319
Speaker 3: And Jel, that's literally what you and I have.

1114
00:47:19,280 --> 00:47:20,960
Speaker 2: Been doing during this episode as you and I have

1115
00:47:21,000 --> 00:47:24,200
Speaker 2: been enjoying a memory farm by Inner Voice Brewing.

1116
00:47:24,320 --> 00:47:26,399
Speaker 3: What are your thoughts you've.

1117
00:47:25,800 --> 00:47:28,200
Speaker 1: Had this beer before they're at the brewery before, right, Yeah, Yeah,

1118
00:47:28,280 --> 00:47:31,399
Speaker 1: it's like probably it's top three Atlanta breweries now for sure,

1119
00:47:31,440 --> 00:47:31,759
Speaker 1: it's so.

1120
00:47:31,760 --> 00:47:34,719
Speaker 2: Good, so good, like the combination not only of amazing beer,

1121
00:47:34,719 --> 00:47:36,719
Speaker 2: but the fact that they have that collab there with

1122
00:47:36,960 --> 00:47:39,120
Speaker 2: I think some of the best pizza. I mean literally,

1123
00:47:39,160 --> 00:47:41,600
Speaker 2: I think be the best pizza place in all of

1124
00:47:41,640 --> 00:47:44,960
Speaker 2: Atlanta indicators not they are their own city, but it's yeah,

1125
00:47:44,960 --> 00:47:46,680
Speaker 2: it's within reach of Atlanta exactly.

1126
00:47:46,840 --> 00:47:50,000
Speaker 1: So this one, in particular was I thought, soft and juicy,

1127
00:47:50,760 --> 00:47:53,280
Speaker 1: zero harsh vibes. I think usually when you're getting an ipa,

1128
00:47:53,640 --> 00:47:55,920
Speaker 1: at least there's some of that like bitterness. There was

1129
00:47:55,920 --> 00:47:57,920
Speaker 1: like no bitterness in this one at all. It was

1130
00:47:57,960 --> 00:48:01,160
Speaker 1: only the juice. But it also wasn't like overly potent

1131
00:48:01,239 --> 00:48:04,600
Speaker 1: and in your face. This was like a nice, reserved, juicy,

1132
00:48:04,600 --> 00:48:05,920
Speaker 1: hazy ip So I liked it.

1133
00:48:05,920 --> 00:48:08,960
Speaker 2: It didn't have like that like the West Coast bitterness

1134
00:48:08,960 --> 00:48:10,960
Speaker 2: like you're talking about, but it did have that bite

1135
00:48:11,040 --> 00:48:13,000
Speaker 2: hop in my opinion, Like, I don't know how else

1136
00:48:13,040 --> 00:48:15,480
Speaker 2: to describe it except that I can just there's a

1137
00:48:15,520 --> 00:48:18,040
Speaker 2: difference between the bitterness that you get from Hops versus

1138
00:48:18,080 --> 00:48:21,680
Speaker 2: the flavor bite that you get from from Hops. I

1139
00:48:21,719 --> 00:48:24,560
Speaker 2: don't I don't know how to necessarily distinguish between the two,

1140
00:48:24,600 --> 00:48:26,600
Speaker 2: but I don't know there's a difference there where it

1141
00:48:26,680 --> 00:48:29,879
Speaker 2: feels like a flavor attack on my tongue versus sort

1142
00:48:29,880 --> 00:48:31,880
Speaker 2: of like this chemical attack, which is what the bitterness,

1143
00:48:32,080 --> 00:48:34,160
Speaker 2: That's what I think of like when I like when

1144
00:48:34,160 --> 00:48:36,120
Speaker 2: I enjoy the West Coast, ipa, the West Coast.

1145
00:48:36,000 --> 00:48:40,239
Speaker 1: Usually tastes more piny, bitter, resiny, and this is, yeah,

1146
00:48:40,440 --> 00:48:41,360
Speaker 1: just more vegetable.

1147
00:48:42,040 --> 00:48:43,880
Speaker 2: I feel like this is a perfect example of a

1148
00:48:43,920 --> 00:48:46,759
Speaker 2: New England hazy and so glad that we've got one

1149
00:48:46,760 --> 00:48:48,040
Speaker 2: here locally that we get to enjoy.

1150
00:48:48,200 --> 00:48:49,840
Speaker 1: For sure, this is a good one, and thanks for

1151
00:48:49,880 --> 00:48:51,359
Speaker 1: picking it up at the brewery. By the way. Oh sure,

1152
00:48:51,400 --> 00:48:53,279
Speaker 1: all right, that's gonna do it for this episode. If

1153
00:48:53,320 --> 00:48:55,640
Speaker 1: you have a money question of your own that you

1154
00:48:55,640 --> 00:48:57,960
Speaker 1: want Matt and I to tackle on an upcoming episode,

1155
00:48:57,960 --> 00:49:00,399
Speaker 1: please do record it, send it our way. We'd love

1156
00:49:00,440 --> 00:49:02,000
Speaker 1: to take it, and Matt, that's going to do it

1157
00:49:02,000 --> 00:49:04,319
Speaker 1: for this one. Until next time, Best Friends Out, Best

1158
00:49:04,400 --> 00:49:05,279
Speaker 1: Friends Out.