1 00:00:00,120 --> 00:00:02,720 Speaker 1: Welcome to How the Money. I'm Joel and I and 2 00:00:02,880 --> 00:00:25,599 Speaker 1: Matt's and today we are answering your listener questions. That's right, Joel, 3 00:00:25,720 --> 00:00:28,240 Speaker 1: we have a listener question Monday. This is where we 4 00:00:28,400 --> 00:00:31,040 Speaker 1: feel questions from our listeners. They send in a voice 5 00:00:31,120 --> 00:00:33,239 Speaker 1: memo and we'd like to answer them here on the 6 00:00:33,280 --> 00:00:36,960 Speaker 1: show Man. This episode, we have some questions like rounding 7 00:00:37,040 --> 00:00:39,320 Speaker 1: up investment apps. We're gonna get to that. We're gonna 8 00:00:39,320 --> 00:00:42,519 Speaker 1: talk about buying property to build wealth, as well as 9 00:00:42,800 --> 00:00:45,280 Speaker 1: squeezing as many benefits out of a credit card that 10 00:00:45,320 --> 00:00:48,840 Speaker 1: you possibly can without hurting your credit score, plus two others. 11 00:00:48,880 --> 00:00:51,640 Speaker 1: I'm looking forward to all five of those questions today. Yeah, 12 00:00:51,720 --> 00:00:53,800 Speaker 1: me to listen. Our questions so good. We got some 13 00:00:54,000 --> 00:00:56,120 Speaker 1: really really good ones this episode. But before we get 14 00:00:56,120 --> 00:00:58,160 Speaker 1: to that, man, I saw you've got some new Halloween 15 00:00:58,200 --> 00:01:01,240 Speaker 1: decorations this year. Yeah, did see a big night out front? 16 00:01:01,320 --> 00:01:04,680 Speaker 1: We we finally got that outside. I did, Yeah, bloody neck. 17 00:01:05,800 --> 00:01:08,399 Speaker 1: I saw Kate out of that because during the day 18 00:01:09,000 --> 00:01:11,160 Speaker 1: that you know that the night doesn't look very scary 19 00:01:11,240 --> 00:01:13,400 Speaker 1: at night, very intimidating. Right, you got this big dark 20 00:01:13,440 --> 00:01:15,120 Speaker 1: figure he's kind of got the helmet on and stuff. 21 00:01:15,120 --> 00:01:16,679 Speaker 1: Like that. But during the day, I'm like, does it 22 00:01:16,680 --> 00:01:19,640 Speaker 1: just feel like we're at medieval times? Um? But I'm 23 00:01:19,640 --> 00:01:21,640 Speaker 1: glad you brought that up though, because I actually we 24 00:01:21,720 --> 00:01:25,280 Speaker 1: picked that thing up this past winter on the side 25 00:01:25,280 --> 00:01:27,360 Speaker 1: of the road. Man, you were like, it was a 26 00:01:27,440 --> 00:01:29,640 Speaker 1: curb alerts. I feel like, I don't know, I've never 27 00:01:29,680 --> 00:01:32,160 Speaker 1: known anyone who picks up as much. We score some 28 00:01:32,280 --> 00:01:34,120 Speaker 1: really good stuff, you do. You get some good stuff 29 00:01:34,120 --> 00:01:35,280 Speaker 1: on the side of the road, and I think most 30 00:01:35,319 --> 00:01:37,600 Speaker 1: people are apprehensive to take stuff from the side of 31 00:01:37,640 --> 00:01:40,360 Speaker 1: the road, But um, you and I have occasionally gotten 32 00:01:40,360 --> 00:01:42,440 Speaker 1: good stuff, all right, I'd occasionally have gotten good stuff. 33 00:01:42,480 --> 00:01:44,440 Speaker 1: You almost always get good stuff on the side of 34 00:01:44,440 --> 00:01:45,920 Speaker 1: the road. Gotta keep your eyes peeled, and that's one 35 00:01:45,920 --> 00:01:47,800 Speaker 1: of the benefits you've got a giant night that you've 36 00:01:47,800 --> 00:01:50,240 Speaker 1: got a store away after a callowing's over. Well, so 37 00:01:50,240 --> 00:01:52,040 Speaker 1: that's the thing. We we saw it. So actually Kate 38 00:01:52,040 --> 00:01:54,160 Speaker 1: saw it first and she was like, hey, and this 39 00:01:54,200 --> 00:01:56,320 Speaker 1: is after a school function. It's in the winter, last winter, 40 00:01:56,400 --> 00:01:58,000 Speaker 1: and so it's really dark too, and she's like, hey, 41 00:01:58,080 --> 00:01:59,800 Speaker 1: let's drive by this one house because I'm pretty sure 42 00:01:59,800 --> 00:02:02,600 Speaker 1: I saw night propped up against their fence like they're 43 00:02:02,600 --> 00:02:04,400 Speaker 1: going to give it away, And sure enough we get 44 00:02:04,480 --> 00:02:06,520 Speaker 1: up to the house and it was out on the curb, 45 00:02:06,600 --> 00:02:08,760 Speaker 1: like next to the street. So we totally picked it up. Man, 46 00:02:08,800 --> 00:02:10,440 Speaker 1: we couldn't see what was on it, like if it 47 00:02:10,520 --> 00:02:12,080 Speaker 1: was grossed or anything. We just grabbed it through in 48 00:02:12,080 --> 00:02:13,959 Speaker 1: the van. Definitely one of the benefits of of having 49 00:02:14,040 --> 00:02:17,160 Speaker 1: a minivan is being able to pick up something large 50 00:02:17,200 --> 00:02:19,440 Speaker 1: like that. There. It's like six four, it's like your 51 00:02:19,480 --> 00:02:22,320 Speaker 1: size mini vans. Yeah, they really are. Like the people 52 00:02:22,360 --> 00:02:24,919 Speaker 1: don't understand how glorious they can be when it comes 53 00:02:24,919 --> 00:02:26,959 Speaker 1: to hauling stuff. They're very good. But yeah, I was 54 00:02:27,000 --> 00:02:29,480 Speaker 1: curious on your thoughts on curb alerts, kind of with 55 00:02:29,520 --> 00:02:31,919 Speaker 1: a pandemic going on, you know, I think had we 56 00:02:32,000 --> 00:02:34,400 Speaker 1: seen that on the side of the road, now, maybe 57 00:02:34,480 --> 00:02:36,280 Speaker 1: maybe we would have hesitated a little bit. I think 58 00:02:36,320 --> 00:02:39,160 Speaker 1: we're a little more careful about picking things up. But 59 00:02:39,400 --> 00:02:40,760 Speaker 1: at the same time, I don't know. I feel pretty 60 00:02:40,760 --> 00:02:42,720 Speaker 1: good about stuff in our neighborhood, like a pillow. If 61 00:02:42,720 --> 00:02:43,880 Speaker 1: you see a pillow on the side of the road, 62 00:02:43,919 --> 00:02:46,760 Speaker 1: you probably pick that up exactly. I would totally put 63 00:02:46,760 --> 00:02:48,680 Speaker 1: that in my bed. Love sleeping on free pillows that 64 00:02:48,720 --> 00:02:50,400 Speaker 1: I found on the side of the road, especially if 65 00:02:50,400 --> 00:02:52,639 Speaker 1: it's been rainy last couple of days. You know, they're 66 00:02:52,680 --> 00:02:55,679 Speaker 1: really nice then no juicy. One of my friends she 67 00:02:55,680 --> 00:02:57,000 Speaker 1: she picked up a chair on the side of the 68 00:02:57,120 --> 00:03:00,160 Speaker 1: road and there were bed bugs in it. She lies 69 00:03:00,200 --> 00:03:02,359 Speaker 1: it and it just created this infestation in her house 70 00:03:02,400 --> 00:03:05,720 Speaker 1: and it was just this horrible saga. So, uh, you know, 71 00:03:05,760 --> 00:03:07,760 Speaker 1: I am willing to pick up some things, but I'm 72 00:03:07,880 --> 00:03:10,480 Speaker 1: I'm pretty choosy about the things that I am willing 73 00:03:10,520 --> 00:03:12,359 Speaker 1: to bring into my house. Like I got some good 74 00:03:12,360 --> 00:03:15,239 Speaker 1: soccer cleats. I don't know six months eight months ago. 75 00:03:15,280 --> 00:03:17,120 Speaker 1: Did we share that on the show. I don't know, maybe, 76 00:03:17,360 --> 00:03:20,120 Speaker 1: but but yeah, like two awesome pairs for you know, 77 00:03:20,200 --> 00:03:22,880 Speaker 1: for someone now and for someone later. But it's yeah, 78 00:03:22,880 --> 00:03:24,440 Speaker 1: it's one of those things where I am I'm probably 79 00:03:24,440 --> 00:03:25,960 Speaker 1: a little more particular. And I don't know, I don't 80 00:03:26,000 --> 00:03:28,760 Speaker 1: know if COVID's changed that or not, but I I 81 00:03:28,760 --> 00:03:31,919 Speaker 1: think I'm just generally a little apprehensive unless it looks 82 00:03:31,960 --> 00:03:34,200 Speaker 1: like something that has really been taken care of, or 83 00:03:34,200 --> 00:03:35,480 Speaker 1: if you can just host it down, maybe let it 84 00:03:35,560 --> 00:03:37,000 Speaker 1: bake out in the sun. I feel like the sun 85 00:03:37,080 --> 00:03:38,840 Speaker 1: and a little bit of wind, feel like all that 86 00:03:38,880 --> 00:03:41,440 Speaker 1: can come of naturally disinfect it. There we go. I 87 00:03:41,440 --> 00:03:46,200 Speaker 1: don't know if that's science or wind. Nature is disinfectant exactly. 88 00:03:47,360 --> 00:03:49,440 Speaker 1: That's my hippie granola side coming out a little bit. 89 00:03:49,480 --> 00:03:52,400 Speaker 1: There we go. It's a little bit of sunshine. Let's 90 00:03:52,440 --> 00:03:53,720 Speaker 1: move on to the beer that we're having on the 91 00:03:53,720 --> 00:03:56,760 Speaker 1: show today, Matt. This one's called Swoon Units and it's 92 00:03:56,800 --> 00:04:00,160 Speaker 1: by Fonta Flora Brewing. They're out of North Carolina and 93 00:04:00,280 --> 00:04:03,640 Speaker 1: this is BlackBerry beer. And we'll give our thoughts on 94 00:04:03,640 --> 00:04:05,600 Speaker 1: this one at the end of the episode, but for now, 95 00:04:05,640 --> 00:04:08,360 Speaker 1: let's get onto listener questions. And if anybody out there 96 00:04:08,400 --> 00:04:11,720 Speaker 1: wants to have their question featured on an upcoming ask 97 00:04:11,880 --> 00:04:14,360 Speaker 1: htm episode, we'd love to have it. Just go to 98 00:04:14,440 --> 00:04:17,920 Speaker 1: how to money dot com slash ask Simple instructions there 99 00:04:17,960 --> 00:04:20,200 Speaker 1: for how you can submit your voice question for us 100 00:04:20,240 --> 00:04:22,480 Speaker 1: to take on a future episode. So let's get to 101 00:04:22,520 --> 00:04:25,600 Speaker 1: those questions for today, Matt. Listeners who did follow that process. 102 00:04:25,760 --> 00:04:28,080 Speaker 1: The first question we're taking on today's show is about 103 00:04:28,080 --> 00:04:31,040 Speaker 1: paying points to get a lower rate on a mortgage. Hey, 104 00:04:31,120 --> 00:04:33,720 Speaker 1: Joe and Matte, this is Kirk from San Diego and 105 00:04:33,760 --> 00:04:36,239 Speaker 1: my wife and I are planning on buying our first 106 00:04:36,279 --> 00:04:39,200 Speaker 1: home very soon, and I had a question about buying 107 00:04:39,320 --> 00:04:42,480 Speaker 1: points from my lender. I was planning on using my 108 00:04:42,640 --> 00:04:45,920 Speaker 1: v A loan and going with zero money down, and 109 00:04:46,000 --> 00:04:49,360 Speaker 1: the loan would be for five seventy five thousand dollars 110 00:04:49,360 --> 00:04:52,800 Speaker 1: at around two point seven five p I T I 111 00:04:52,920 --> 00:04:55,919 Speaker 1: with h O would be almost thirty six hundred a month. 112 00:04:56,080 --> 00:04:58,760 Speaker 1: So in thirty years, not factoring in the rise of 113 00:04:58,839 --> 00:05:01,719 Speaker 1: taxes or h O, we would be paying a little 114 00:05:01,720 --> 00:05:06,359 Speaker 1: more than one million, two hundred thousand dollars. If we 115 00:05:06,480 --> 00:05:10,000 Speaker 1: put in eight thousand, eight hundred fifty dollars to buy 116 00:05:10,040 --> 00:05:12,720 Speaker 1: points with my lender, we would get the right down 117 00:05:12,720 --> 00:05:15,440 Speaker 1: at two point to five percent, which makes our monthly 118 00:05:15,480 --> 00:05:18,919 Speaker 1: payment about thirty four forty and in thirty years it 119 00:05:19,000 --> 00:05:22,440 Speaker 1: would mean we pay one million, two hundred thirty eight 120 00:05:22,440 --> 00:05:26,440 Speaker 1: thousand dollars. The difference here is about fifty five thousands. 121 00:05:26,520 --> 00:05:30,560 Speaker 1: So does that kind of mean we're effectively investing eight thousand, 122 00:05:30,600 --> 00:05:33,960 Speaker 1: eight hundred fifty dollars to gain fifty five thousand in 123 00:05:34,120 --> 00:05:38,080 Speaker 1: thirty years. I think that's about a six percent compounded 124 00:05:38,160 --> 00:05:41,320 Speaker 1: rate of return. I know it's a very simplistic way 125 00:05:41,360 --> 00:05:44,240 Speaker 1: of looking at it, because I'm not factoring in if 126 00:05:44,279 --> 00:05:47,960 Speaker 1: we paid off the mortgage early, decided to sell, or 127 00:05:48,320 --> 00:05:51,200 Speaker 1: accounting for taxes and h o A going up. So 128 00:05:51,240 --> 00:05:53,200 Speaker 1: what do you guys think would it be worth it 129 00:05:53,240 --> 00:05:56,600 Speaker 1: to buy a lower rate? Anyway, Thanks for your time 130 00:05:56,920 --> 00:05:59,520 Speaker 1: and keep up the great show. All right, Joel, let's 131 00:05:59,520 --> 00:06:02,239 Speaker 1: answer that question. First of all, V A loan is 132 00:06:02,320 --> 00:06:04,680 Speaker 1: a a great perk if you have served in the 133 00:06:04,760 --> 00:06:07,320 Speaker 1: armed forces. Um, you know, this is a great question. 134 00:06:07,440 --> 00:06:09,640 Speaker 1: It's a great perk, especially if your name is Kirk. 135 00:06:10,000 --> 00:06:12,360 Speaker 1: That's true. I was actually trying to avoid saying his name, 136 00:06:12,400 --> 00:06:15,400 Speaker 1: I think because it felt funny to say Kirk and perk. 137 00:06:15,480 --> 00:06:18,440 Speaker 1: It's a great Kirk perk. But also, Kirk, we love 138 00:06:18,480 --> 00:06:20,320 Speaker 1: that you're doing the math. You know. You mentioned how 139 00:06:20,360 --> 00:06:23,120 Speaker 1: you felt that it's sort of an oversimplified way of 140 00:06:23,160 --> 00:06:25,719 Speaker 1: thinking about things, but I feel that's actually not the case. 141 00:06:25,760 --> 00:06:27,240 Speaker 1: You know, I think this is a great way of 142 00:06:27,240 --> 00:06:30,080 Speaker 1: looking at things, and we wish that more folks would 143 00:06:30,200 --> 00:06:32,160 Speaker 1: actually crunch the numbers. But yeah, let's go ahead and 144 00:06:32,200 --> 00:06:35,000 Speaker 1: get to your question. Alright. So, Matt, let's talk about 145 00:06:35,520 --> 00:06:37,440 Speaker 1: buying points on a mortgage, and let's kind of define 146 00:06:37,440 --> 00:06:40,960 Speaker 1: what that means. Buying discount points on a mortgage can 147 00:06:41,000 --> 00:06:44,200 Speaker 1: be a smart move, and they're different than origination points, 148 00:06:44,240 --> 00:06:47,440 Speaker 1: which will actually want to avoid. But but first let's 149 00:06:47,480 --> 00:06:50,640 Speaker 1: discuss what these points are, because they can be confusing. 150 00:06:50,960 --> 00:06:54,280 Speaker 1: One point is essentially equal to one percent of the 151 00:06:54,400 --> 00:06:57,039 Speaker 1: overall amount of the loan. So if you're taking on 152 00:06:57,040 --> 00:07:00,520 Speaker 1: a mortgage, a point's gonna cost you fIF teen hundred 153 00:07:00,520 --> 00:07:03,000 Speaker 1: dollars up front, and because of that discount point, you're 154 00:07:03,000 --> 00:07:05,719 Speaker 1: paying that money up front right now at closing in 155 00:07:05,839 --> 00:07:08,080 Speaker 1: order to score a lower rate to the life of 156 00:07:08,080 --> 00:07:10,400 Speaker 1: your mortgage. So you can see why that might be appealing. 157 00:07:10,520 --> 00:07:13,440 Speaker 1: If you have money right now and you are gonna 158 00:07:13,600 --> 00:07:16,000 Speaker 1: keep the mortgage a long time, maybe it makes sense 159 00:07:16,040 --> 00:07:18,720 Speaker 1: for you. But there's even more to think about. Yeah, 160 00:07:18,720 --> 00:07:22,200 Speaker 1: that's right, basically paying down points. Uh, these points, they 161 00:07:22,240 --> 00:07:25,360 Speaker 1: represent prepaid interest, and so one of the actual benefits 162 00:07:25,400 --> 00:07:27,840 Speaker 1: of you know, paying these points down is the ability 163 00:07:27,880 --> 00:07:30,200 Speaker 1: to write that off on your taxes as well. You 164 00:07:30,240 --> 00:07:33,720 Speaker 1: can deduct that versus origination points, which is essentially you 165 00:07:33,760 --> 00:07:36,000 Speaker 1: know the cost of getting that loan to begin with. 166 00:07:36,200 --> 00:07:38,720 Speaker 1: Because of the standard deduction. Most folks aren't itemizing their 167 00:07:38,720 --> 00:07:40,880 Speaker 1: taxes these days, but if you are there's definitely something 168 00:07:40,960 --> 00:07:43,920 Speaker 1: to keep in mind, and Kirks. Some other important considerations 169 00:07:43,960 --> 00:07:46,280 Speaker 1: are going to be how long you plan on living 170 00:07:46,320 --> 00:07:48,480 Speaker 1: in that home, like Joel kind of mentioned there, and 171 00:07:48,680 --> 00:07:50,600 Speaker 1: whether or not you are going to have the cash 172 00:07:50,640 --> 00:07:52,480 Speaker 1: on hand to you know, actually pay for these points 173 00:07:52,480 --> 00:07:54,360 Speaker 1: at closing. If you plan on being in the home 174 00:07:54,440 --> 00:07:57,000 Speaker 1: long term and you know you have enough money to 175 00:07:57,040 --> 00:07:59,440 Speaker 1: purchase those discount points, then it can be a really 176 00:07:59,480 --> 00:08:02,320 Speaker 1: smart move in order to grab that insanely low rate. 177 00:08:02,480 --> 00:08:04,000 Speaker 1: The amount of money that you're gonna be able to 178 00:08:04,000 --> 00:08:06,200 Speaker 1: say over the life of that loan is huge, you know, 179 00:08:06,320 --> 00:08:09,800 Speaker 1: basically earning a six percent compound rates. Uh, that's super solid. 180 00:08:10,080 --> 00:08:12,040 Speaker 1: But if it isn't a home that you plan on 181 00:08:12,080 --> 00:08:15,360 Speaker 1: being in long term, then you won't actually be getting 182 00:08:15,440 --> 00:08:17,360 Speaker 1: that rate of return. Yeah. Yeah, If you sell the 183 00:08:17,400 --> 00:08:20,400 Speaker 1: home after five years worth, it definitely was not worth 184 00:08:20,480 --> 00:08:23,000 Speaker 1: buying the points and prepaying that interest. So yeah, so 185 00:08:23,080 --> 00:08:24,720 Speaker 1: much of it comes down to those things that Matt 186 00:08:24,760 --> 00:08:26,880 Speaker 1: like you mentioned, the timing and cash on hand, and 187 00:08:26,920 --> 00:08:30,040 Speaker 1: if you're focusing on that six percent return on investment, well, 188 00:08:30,120 --> 00:08:33,680 Speaker 1: then another consideration is whether or not you could potentially 189 00:08:33,679 --> 00:08:35,680 Speaker 1: take that money that would go to discount points the 190 00:08:35,679 --> 00:08:39,080 Speaker 1: eight thousand dollars and invest it elsewhere instead. And some 191 00:08:39,120 --> 00:08:41,120 Speaker 1: folks might think that a six percent return on your 192 00:08:41,120 --> 00:08:42,840 Speaker 1: money doesn't sound that great and that they could do 193 00:08:42,920 --> 00:08:46,120 Speaker 1: better elsewhere in the market, maybe through a real estate 194 00:08:46,120 --> 00:08:48,840 Speaker 1: investment deal or just investing in the stock market. But 195 00:08:48,960 --> 00:08:51,280 Speaker 1: the problem is where the rubber meets the road is 196 00:08:51,320 --> 00:08:54,080 Speaker 1: do you have the discipline to take that money and 197 00:08:54,120 --> 00:08:57,080 Speaker 1: instead of getting that six percent for sure return on 198 00:08:57,120 --> 00:09:00,120 Speaker 1: your investment? Do you do? You are you actually only 199 00:09:00,200 --> 00:09:02,760 Speaker 1: to take that money and invest it instead. And if 200 00:09:02,800 --> 00:09:04,800 Speaker 1: you have the willpower, if you have the follow through, 201 00:09:05,120 --> 00:09:08,079 Speaker 1: then investing the money in another way can make sense. 202 00:09:08,280 --> 00:09:10,880 Speaker 1: But if you don't or you're not sure, then take 203 00:09:10,960 --> 00:09:13,560 Speaker 1: the burden the hand, which is getting that for sure 204 00:09:13,640 --> 00:09:15,720 Speaker 1: six percent return, that is, if you stay in the 205 00:09:15,720 --> 00:09:18,880 Speaker 1: home and you keep this mortgage, then then pay the 206 00:09:18,920 --> 00:09:21,560 Speaker 1: discount points and take that for sure six percent return 207 00:09:21,960 --> 00:09:24,120 Speaker 1: by buying the points ahead of time. I think I 208 00:09:24,160 --> 00:09:26,640 Speaker 1: think that's a wise move, especially with the return you're 209 00:09:26,679 --> 00:09:30,040 Speaker 1: getting by doing it. Yeah, so, Kurt, front loading you know, 210 00:09:30,120 --> 00:09:32,480 Speaker 1: this money and paying to get a low rate interest rate. 211 00:09:32,720 --> 00:09:34,960 Speaker 1: It hasn't always made a ton of sense, you know, 212 00:09:35,000 --> 00:09:37,520 Speaker 1: but it seems to make particular sense right now, given this, 213 00:09:37,720 --> 00:09:40,600 Speaker 1: you know the current states of interest rates four long 214 00:09:40,720 --> 00:09:43,200 Speaker 1: term buyers. And so if this is your forever home, 215 00:09:43,240 --> 00:09:45,600 Speaker 1: and you know you're likely considering this to be your 216 00:09:45,640 --> 00:09:47,920 Speaker 1: forever mortgage as well, go ahead and pay those points, 217 00:09:47,960 --> 00:09:50,720 Speaker 1: lock in that rock bottom rate as well as that 218 00:09:50,880 --> 00:09:54,240 Speaker 1: guaranteed r o I on your money. All right, Kirk, Well, 219 00:09:54,280 --> 00:09:56,240 Speaker 1: thanks so much for that question, and yeah, we wish 220 00:09:56,240 --> 00:09:57,839 Speaker 1: you the best of luck. All right, So we have 221 00:09:57,920 --> 00:10:00,760 Speaker 1: a bunch of other questions, including one about credit cards 222 00:10:00,800 --> 00:10:03,880 Speaker 1: and how to handle money uh during a divorce. We're 223 00:10:03,920 --> 00:10:06,480 Speaker 1: gonna get to both of those right after this break. 224 00:10:15,840 --> 00:10:17,760 Speaker 1: Are were back from the break. It's still taking listener 225 00:10:17,840 --> 00:10:20,600 Speaker 1: questions and this one comes from a listener who wants 226 00:10:20,640 --> 00:10:24,679 Speaker 1: to know about scoring sign up bonuses for credit cards. Hey, 227 00:10:24,760 --> 00:10:27,520 Speaker 1: Joel Matte, this is Doug from el Jan Illinois. I 228 00:10:27,720 --> 00:10:30,600 Speaker 1: have a question regarding episode fourteen where you guys are 229 00:10:30,640 --> 00:10:35,960 Speaker 1: disgusting opening credit cards for that one time bonus. In 230 00:10:35,960 --> 00:10:38,480 Speaker 1: that podcast, you guys had mentioned that you had a 231 00:10:38,520 --> 00:10:42,200 Speaker 1: preference of leaving those accounts open, not to close them, 232 00:10:42,280 --> 00:10:45,720 Speaker 1: and I'm kind of curious why. I do know that 233 00:10:45,840 --> 00:10:48,719 Speaker 1: having a credit history or a longer credit history is 234 00:10:48,760 --> 00:10:51,080 Speaker 1: better for your score. So in my case, if I 235 00:10:51,120 --> 00:10:55,200 Speaker 1: already have three or four credit cards with a twelve 236 00:10:55,280 --> 00:10:58,680 Speaker 1: to twenty years of history, and I also have a 237 00:10:58,760 --> 00:11:02,240 Speaker 1: very good credit score over eight hundred, in that case, 238 00:11:02,480 --> 00:11:04,600 Speaker 1: is it really going to deem me if I'm opening 239 00:11:04,600 --> 00:11:07,520 Speaker 1: and closing these just to get that one time bonus. So, 240 00:11:07,600 --> 00:11:10,080 Speaker 1: for example, if I opened, say ten, over the course 241 00:11:10,120 --> 00:11:13,040 Speaker 1: of a year, do you foresee a score of say 242 00:11:13,080 --> 00:11:17,680 Speaker 1: eight twenty dropping below a hundred or is it smaller 243 00:11:17,679 --> 00:11:20,480 Speaker 1: in scale? So I'm just kind of curious of why 244 00:11:20,720 --> 00:11:23,800 Speaker 1: you guys prefer to keep those open in the instance 245 00:11:23,880 --> 00:11:26,800 Speaker 1: that you already have a long credit history with with 246 00:11:26,920 --> 00:11:30,080 Speaker 1: multiple accounts and you also have built a pretty good score, 247 00:11:30,679 --> 00:11:34,480 Speaker 1: or if your advice is more specific to the user 248 00:11:34,559 --> 00:11:37,760 Speaker 1: who hasn't quite built up that history. So if you 249 00:11:37,800 --> 00:11:40,800 Speaker 1: can answer that, I'd appreciate it. Thank you all right, Doug, 250 00:11:40,800 --> 00:11:42,439 Speaker 1: thanks so much for your question. And man, you went 251 00:11:42,440 --> 00:11:45,280 Speaker 1: back to episode fourteen. I'm glad to hear that we're 252 00:11:45,480 --> 00:11:48,520 Speaker 1: doling out decent advice back then trying to go back 253 00:11:48,559 --> 00:11:50,760 Speaker 1: and listen to those episodes. But in fact, is that 254 00:11:50,800 --> 00:11:52,520 Speaker 1: you hit the nail on the head uh. You know, 255 00:11:52,520 --> 00:11:54,640 Speaker 1: the reason we do prefer for folks to keep their 256 00:11:54,640 --> 00:11:57,680 Speaker 1: cards open and active and not to cancel that card 257 00:11:58,080 --> 00:12:00,920 Speaker 1: is because of the impact of the age of your credit, 258 00:12:01,160 --> 00:12:04,480 Speaker 1: which is an important factor in your overall credit score. 259 00:12:04,920 --> 00:12:07,439 Speaker 1: Closing a card also can have an impact on your 260 00:12:07,520 --> 00:12:10,439 Speaker 1: utilization rate, which is a major factor in your credit 261 00:12:10,480 --> 00:12:13,160 Speaker 1: score too. So if you don't have an abundance of 262 00:12:13,160 --> 00:12:16,560 Speaker 1: available credit, then canceling that card will ding your score. Yeah, 263 00:12:16,600 --> 00:12:19,160 Speaker 1: and so much of the answer to this question, Doug 264 00:12:19,240 --> 00:12:23,040 Speaker 1: does hinge on who you are, what your credit score 265 00:12:23,160 --> 00:12:25,439 Speaker 1: looks like, and what it's made up of, and then 266 00:12:25,440 --> 00:12:28,680 Speaker 1: how much your score drops depends on some of those 267 00:12:28,679 --> 00:12:31,000 Speaker 1: things that you mentioned. For folks who have an awesome 268 00:12:31,040 --> 00:12:34,040 Speaker 1: credit history a plethora of available credit, like it sounds 269 00:12:34,040 --> 00:12:37,240 Speaker 1: like you do, canceling a card isn't gonna mess that 270 00:12:37,320 --> 00:12:40,000 Speaker 1: person up in a big way. But if someone opens 271 00:12:40,040 --> 00:12:42,560 Speaker 1: a card to just to score a sign up bonus 272 00:12:42,600 --> 00:12:45,360 Speaker 1: but doesn't have other meaningful forms of credit in their mix, 273 00:12:45,559 --> 00:12:48,360 Speaker 1: it could be really detrimental to that score. For that 274 00:12:48,440 --> 00:12:51,120 Speaker 1: person taking out a new card, what the overall age 275 00:12:51,120 --> 00:12:53,360 Speaker 1: of their credit history could could take a major hit, 276 00:12:53,559 --> 00:12:56,480 Speaker 1: and their utilization rate could become awful at the same time, 277 00:12:56,559 --> 00:13:00,199 Speaker 1: So if that happens, that person will see a significant 278 00:13:00,520 --> 00:13:02,840 Speaker 1: dropping their score. So much of it does depend on 279 00:13:02,880 --> 00:13:05,400 Speaker 1: your specific circumstances. And at the same time, it's tough 280 00:13:05,440 --> 00:13:07,960 Speaker 1: to know exactly right how much a score would drop 281 00:13:08,000 --> 00:13:11,240 Speaker 1: since there are so many variables that are taken into accounts. 282 00:13:11,320 --> 00:13:13,199 Speaker 1: But you know, back to our original point from from 283 00:13:13,200 --> 00:13:15,600 Speaker 1: that old episode, if you have a discipline to not 284 00:13:15,720 --> 00:13:18,760 Speaker 1: overspend on these additional cards, which it sounds like you 285 00:13:18,800 --> 00:13:20,760 Speaker 1: know you do have that self control, Dug, then it 286 00:13:20,760 --> 00:13:23,160 Speaker 1: wouldn't hurt for you to keep these cards open in 287 00:13:23,280 --> 00:13:26,840 Speaker 1: order to cut your credit utilization rate. You know. Otherwise 288 00:13:27,280 --> 00:13:29,480 Speaker 1: the only other instance to close it is if they 289 00:13:29,520 --> 00:13:31,800 Speaker 1: have an annual fee. Uh. And this isn't a card 290 00:13:31,840 --> 00:13:34,240 Speaker 1: that you're gonna be using on a regular basis. So 291 00:13:34,320 --> 00:13:37,160 Speaker 1: I think our advice still holds. We we prefer people 292 00:13:37,200 --> 00:13:39,319 Speaker 1: to when they open up a credit card to keep 293 00:13:39,360 --> 00:13:42,840 Speaker 1: that credit card around as long as they can handle 294 00:13:42,840 --> 00:13:46,360 Speaker 1: it effectively and pay it off in full every single month. 295 00:13:46,600 --> 00:13:49,199 Speaker 1: The more credit cards you have in your mix over time, 296 00:13:49,240 --> 00:13:52,319 Speaker 1: it's actually gonna help your credit score for you in particular, Dug, 297 00:13:52,400 --> 00:13:55,360 Speaker 1: though it sounds like you are already so on top 298 00:13:55,400 --> 00:13:57,080 Speaker 1: of your credit score, and you have a pretty deep 299 00:13:57,080 --> 00:13:59,640 Speaker 1: knowledge of how your credit score works and where it's at. 300 00:13:59,640 --> 00:14:02,080 Speaker 1: I mean, you're in the eight hundreds, I think eight 301 00:14:02,160 --> 00:14:04,560 Speaker 1: twenty is what he said, which is huge. So so 302 00:14:04,600 --> 00:14:07,160 Speaker 1: closing a card that you haven't had very long isn't 303 00:14:07,160 --> 00:14:09,640 Speaker 1: going to impact you in a major way. But ten 304 00:14:10,040 --> 00:14:12,439 Speaker 1: over the course of a year, that's a lot. I 305 00:14:12,440 --> 00:14:15,320 Speaker 1: don't know. Yeah, I mean I feel like that's um, 306 00:14:15,360 --> 00:14:18,719 Speaker 1: maybe a little aggressive, and does staying the chance to 307 00:14:18,800 --> 00:14:21,040 Speaker 1: doing your credit score in a big way. Also, keep 308 00:14:21,040 --> 00:14:23,520 Speaker 1: in mind that certain credit card issuers might ban you 309 00:14:23,680 --> 00:14:26,360 Speaker 1: from opening new cards if you open an account just 310 00:14:26,440 --> 00:14:28,600 Speaker 1: to score the sign up bonus and close the card 311 00:14:28,640 --> 00:14:31,760 Speaker 1: shortly thereafter. If you've done that multiple times, then they 312 00:14:31,760 --> 00:14:33,880 Speaker 1: could cut you off from access to all of their 313 00:14:33,920 --> 00:14:36,000 Speaker 1: other credit card offerings. And I guess one of my 314 00:14:36,080 --> 00:14:37,960 Speaker 1: questions for you too, Doug, is can you even meet 315 00:14:37,960 --> 00:14:40,200 Speaker 1: the spending limits for ten cards in twelve months? Like, 316 00:14:40,280 --> 00:14:42,680 Speaker 1: even even if you could, Um, that's a that's a 317 00:14:42,720 --> 00:14:45,200 Speaker 1: big task. It's a lot to keep organized. I think 318 00:14:45,240 --> 00:14:48,760 Speaker 1: dugs up for it though. He's organized guy, Okay, all right, Yeah, 319 00:14:48,760 --> 00:14:50,240 Speaker 1: I'm just I'm just nervous. I think that's a little 320 00:14:50,240 --> 00:14:52,720 Speaker 1: too aggressive. I think maybe two or three a year 321 00:14:53,000 --> 00:14:55,680 Speaker 1: to get the sign up bonus is is a decent 322 00:14:56,160 --> 00:14:58,120 Speaker 1: plan of attack. Um, And I don't think it's gonna 323 00:14:58,200 --> 00:15:00,080 Speaker 1: doing his credit score too much. But I think this 324 00:15:00,160 --> 00:15:02,600 Speaker 1: strategy could could come back to bite Doug. Yeah, I 325 00:15:02,960 --> 00:15:05,240 Speaker 1: agree for most folks. I think, you know, looking at 326 00:15:05,240 --> 00:15:08,040 Speaker 1: a few cards a year is easy enough to to 327 00:15:08,080 --> 00:15:09,840 Speaker 1: kind of keep up. With. That being said, I think 328 00:15:09,880 --> 00:15:13,240 Speaker 1: Doug he's a very organized guy. I resonate with what 329 00:15:13,280 --> 00:15:16,000 Speaker 1: he's saying there. I liked organization, and maybe I've got 330 00:15:16,040 --> 00:15:18,120 Speaker 1: spreadsheets dedicated to this kind of thing, you know, where 331 00:15:18,160 --> 00:15:20,120 Speaker 1: you can track everything and make sure that you are 332 00:15:20,360 --> 00:15:22,400 Speaker 1: making your payments on time. And you want to make 333 00:15:22,440 --> 00:15:25,000 Speaker 1: sure that you're using your credit wisely and so, yeah, 334 00:15:25,080 --> 00:15:27,360 Speaker 1: make sure that you are not biting off more than 335 00:15:27,360 --> 00:15:29,200 Speaker 1: you can chew, no doubt. All right, Matt, Let's get 336 00:15:29,240 --> 00:15:31,720 Speaker 1: to our next question. This one comes from a listener 337 00:15:31,960 --> 00:15:34,840 Speaker 1: who is going through a divorce and have some questions 338 00:15:34,840 --> 00:15:37,960 Speaker 1: about handling her money in the middle of that. Hey, guys, 339 00:15:38,200 --> 00:15:40,720 Speaker 1: this is Marie up in Washington State, and I have 340 00:15:40,800 --> 00:15:45,520 Speaker 1: some questions about finances after a divorce. Our divorce will 341 00:15:45,520 --> 00:15:48,920 Speaker 1: be finalized next month, and while assets are minimal, I 342 00:15:49,000 --> 00:15:51,840 Speaker 1: still don't know what to do with them. I will 343 00:15:51,840 --> 00:15:55,440 Speaker 1: receive about fifteen to twenty thousand dollars from the sale 344 00:15:55,480 --> 00:15:59,360 Speaker 1: of a house and nine dollars from my exces for 345 00:15:59,480 --> 00:16:03,640 Speaker 1: oh one K. My only debt is student loans, but 346 00:16:03,720 --> 00:16:06,640 Speaker 1: those payments are currently zero as I'm on an income 347 00:16:06,680 --> 00:16:11,760 Speaker 1: based repayment plan. My salary just covers expenses for myself 348 00:16:12,120 --> 00:16:15,600 Speaker 1: in two children who live with me halftime, though I 349 00:16:15,640 --> 00:16:18,960 Speaker 1: am hoping to add a side hustle soon. I am 350 00:16:19,000 --> 00:16:22,880 Speaker 1: renting our residence. My car is paid for, but it 351 00:16:23,000 --> 00:16:25,600 Speaker 1: is seventeen years old and has over two hundred thousand 352 00:16:25,600 --> 00:16:28,840 Speaker 1: miles on it. I have no liquid savings, but I 353 00:16:28,880 --> 00:16:31,440 Speaker 1: do have nine thousand dollars in a four oh one 354 00:16:31,640 --> 00:16:35,680 Speaker 1: A account through my employer. Like I said, we're not 355 00:16:35,720 --> 00:16:38,000 Speaker 1: talking a lot of money, but that's all the more 356 00:16:38,040 --> 00:16:41,560 Speaker 1: reason to be smart with it. I really appreciate your show. 357 00:16:42,120 --> 00:16:45,200 Speaker 1: I've been listening since the very beginning, and it's been 358 00:16:45,320 --> 00:16:49,240 Speaker 1: especially helpful as things are rapidly changing, both in my 359 00:16:49,280 --> 00:16:53,440 Speaker 1: own little world and globally. I really look forward to 360 00:16:53,520 --> 00:16:57,600 Speaker 1: hearing what you think about my situation. Thanks Marie, thanks 361 00:16:57,600 --> 00:16:59,560 Speaker 1: so much for your question, and we are so sorry 362 00:16:59,560 --> 00:17:01,640 Speaker 1: to hear a about your divorce. You know, this is 363 00:17:01,680 --> 00:17:04,600 Speaker 1: not only a hard time financially for you, but emotionally 364 00:17:04,640 --> 00:17:06,719 Speaker 1: as well, and so we we certainly feel for you. 365 00:17:07,200 --> 00:17:09,119 Speaker 1: Uh And so let's go ahead and let's talk about 366 00:17:09,160 --> 00:17:11,320 Speaker 1: living below your means. You know that that money that 367 00:17:11,359 --> 00:17:14,680 Speaker 1: you'll be receiving in the divorce settlement is crucial to 368 00:17:14,840 --> 00:17:17,000 Speaker 1: have in savings for the time being as you get 369 00:17:17,040 --> 00:17:19,440 Speaker 1: your feet back under you, So set that money aside 370 00:17:19,480 --> 00:17:21,840 Speaker 1: and a high interest to savings account for now, and 371 00:17:21,840 --> 00:17:25,040 Speaker 1: then focus on tracking your spending. You know, with with 372 00:17:25,119 --> 00:17:27,240 Speaker 1: that information, you can create a budget that makes sense 373 00:17:27,280 --> 00:17:29,600 Speaker 1: for you, and then hopefully you can begin maybe to 374 00:17:29,720 --> 00:17:32,280 Speaker 1: cut some of those expenses as well. And so a 375 00:17:32,320 --> 00:17:34,800 Speaker 1: great goal for you is to not only to continue 376 00:17:34,800 --> 00:17:37,000 Speaker 1: to cover all of your current expenses, but to be 377 00:17:37,040 --> 00:17:39,560 Speaker 1: able to start sacking some of that money away every 378 00:17:39,560 --> 00:17:41,639 Speaker 1: single month in order for you to start saving for 379 00:17:41,680 --> 00:17:43,520 Speaker 1: some of those larger goals that you're going to have 380 00:17:43,680 --> 00:17:47,000 Speaker 1: down the road, including the possibility of having student loan 381 00:17:47,040 --> 00:17:50,560 Speaker 1: payments again, if your income were to increase exactly, you 382 00:17:50,600 --> 00:17:52,160 Speaker 1: want to be ready for that in case, in case 383 00:17:52,160 --> 00:17:55,160 Speaker 1: that happens, let's cover a few more things. It's really 384 00:17:55,200 --> 00:17:58,000 Speaker 1: important to keep that old car for a couple more years. 385 00:17:58,480 --> 00:18:00,400 Speaker 1: That should be a really big goal of yours too, 386 00:18:00,400 --> 00:18:03,800 Speaker 1: in order to avoid adding another expense into your life 387 00:18:03,920 --> 00:18:06,080 Speaker 1: as your life is experiencing, like you mentioned, just a 388 00:18:06,119 --> 00:18:08,800 Speaker 1: lot of changes right now, even though it's got over 389 00:18:08,880 --> 00:18:11,640 Speaker 1: two hundred thousand miles. I mean, which is which is great? 390 00:18:11,680 --> 00:18:13,760 Speaker 1: That's that's what we're all shooting for, right I think 391 00:18:13,920 --> 00:18:16,320 Speaker 1: for real car goals should be having a car with 392 00:18:16,320 --> 00:18:18,920 Speaker 1: over two hundred thousand miles that's at least seventeen years old. 393 00:18:18,960 --> 00:18:22,640 Speaker 1: I like everything about Marie's car. Yeah it's paid for right, Yeah, 394 00:18:22,680 --> 00:18:24,399 Speaker 1: which I mean, you can't can't do better than that. 395 00:18:24,600 --> 00:18:27,040 Speaker 1: And so yeah, instead of using that cash to to 396 00:18:27,119 --> 00:18:29,960 Speaker 1: buy a nicer car to get around, keep depending on 397 00:18:30,000 --> 00:18:32,400 Speaker 1: the car that you you currently have, and then keep 398 00:18:32,440 --> 00:18:36,400 Speaker 1: cash around for the inevitable replacement that's going to be necessary, 399 00:18:36,440 --> 00:18:38,080 Speaker 1: but hopefully not for a few years down the road. 400 00:18:38,520 --> 00:18:42,399 Speaker 1: There's a time also for a prioritizing retirement investing, but 401 00:18:42,440 --> 00:18:45,160 Speaker 1: I'd say now is not that time for Marie. When 402 00:18:45,200 --> 00:18:47,879 Speaker 1: you're undergoing a major life change. It's totally okay to 403 00:18:47,960 --> 00:18:50,359 Speaker 1: take that off the table right now and and not 404 00:18:50,520 --> 00:18:53,800 Speaker 1: feel compelled to be contributing in a in a major 405 00:18:53,840 --> 00:18:58,199 Speaker 1: way to your work retirement plan um or to you know, 406 00:18:58,240 --> 00:19:00,600 Speaker 1: in i RA. Obviously, Matt and we talked about those 407 00:19:00,600 --> 00:19:02,639 Speaker 1: things a lot. We do think they're important, but it's 408 00:19:02,680 --> 00:19:05,760 Speaker 1: okay to take three or six months of investing off 409 00:19:05,800 --> 00:19:08,520 Speaker 1: the table for now as you're kind of getting your bearings, 410 00:19:08,560 --> 00:19:10,840 Speaker 1: and also to you shouldn't need to tap your retirement 411 00:19:11,160 --> 00:19:13,560 Speaker 1: for anything since you do have that settlement coming in 412 00:19:13,600 --> 00:19:16,199 Speaker 1: the over a hundred thousand dollars that's going to be 413 00:19:16,200 --> 00:19:18,399 Speaker 1: coming into your life. So we would say that's another 414 00:19:18,440 --> 00:19:21,199 Speaker 1: thing is is a lot of people in a sticky 415 00:19:21,240 --> 00:19:25,360 Speaker 1: situation like yours, a sticky financial situation, will tap retirement 416 00:19:25,400 --> 00:19:28,800 Speaker 1: accounts and then they'll have tax consequences associated with it, 417 00:19:29,040 --> 00:19:31,560 Speaker 1: not to mention the fact that they're rating their future 418 00:19:31,640 --> 00:19:34,199 Speaker 1: nest egg to use now. And we would say it 419 00:19:34,280 --> 00:19:37,240 Speaker 1: sounds like you're in a good enough situation where you're 420 00:19:37,240 --> 00:19:38,400 Speaker 1: not going to have to do that, and we would 421 00:19:38,440 --> 00:19:41,919 Speaker 1: encourage you to refrain from touching retirement accounts to use 422 00:19:41,960 --> 00:19:45,199 Speaker 1: them now, and a few other points of financial housekeeping 423 00:19:45,240 --> 00:19:47,040 Speaker 1: you know a few other things to consider if you 424 00:19:47,040 --> 00:19:49,960 Speaker 1: haven't already. It is really important now to close any 425 00:19:50,040 --> 00:19:52,720 Speaker 1: joint credit accounts that are in both of your names. 426 00:19:52,720 --> 00:19:55,320 Speaker 1: You don't want any poor usage of credit done by 427 00:19:55,520 --> 00:19:58,639 Speaker 1: your partner to be showing up on your credit reports. 428 00:19:58,880 --> 00:20:00,280 Speaker 1: And then on that to make sure that you have 429 00:20:00,359 --> 00:20:02,840 Speaker 1: credit that is in your name and your name only 430 00:20:02,880 --> 00:20:05,240 Speaker 1: as well. And that's too to help with your credit score. 431 00:20:05,280 --> 00:20:07,480 Speaker 1: Though you know this isn't to rack up any debt. 432 00:20:07,720 --> 00:20:09,480 Speaker 1: We don't want that there for you to to necessarily 433 00:20:09,480 --> 00:20:12,000 Speaker 1: have to fall back on. That Also too, you'll need 434 00:20:12,040 --> 00:20:13,760 Speaker 1: to open up your own bank account if you don't 435 00:20:13,800 --> 00:20:16,520 Speaker 1: already have one. You know, we mentioned earlier about socking 436 00:20:16,680 --> 00:20:19,920 Speaker 1: that possibly over a hundred thousand dollars into a high 437 00:20:19,920 --> 00:20:22,399 Speaker 1: interest savings account. We love online banks, you know, like 438 00:20:22,480 --> 00:20:25,560 Speaker 1: Ally Discover and c I T. There's other great no 439 00:20:25,720 --> 00:20:28,280 Speaker 1: fee options out there for you as well. And then 440 00:20:28,440 --> 00:20:31,840 Speaker 1: one final note too, it's important to change your beneficiary 441 00:20:32,200 --> 00:20:35,320 Speaker 1: UH on any retirement accounts UH as well as life 442 00:20:35,320 --> 00:20:37,600 Speaker 1: insurance if you have those set up, and even creating 443 00:20:37,600 --> 00:20:39,679 Speaker 1: a new will not All of these are necessarily going 444 00:20:39,720 --> 00:20:41,879 Speaker 1: to be fun fun to do, UH, I feel like 445 00:20:41,920 --> 00:20:45,080 Speaker 1: calling these housekeeping or just kind of financial chores is 446 00:20:45,119 --> 00:20:46,960 Speaker 1: maybe the right way to think about it, because nobody 447 00:20:47,000 --> 00:20:49,240 Speaker 1: really likes to do these things. Nobody enjoys doing them, 448 00:20:49,240 --> 00:20:51,000 Speaker 1: but they are good things to do in order to 449 00:20:51,000 --> 00:20:53,560 Speaker 1: get your your financial house in shape. Yeah, for sure, 450 00:20:53,600 --> 00:20:55,879 Speaker 1: all those things that you mentioned, Matt so important right 451 00:20:55,880 --> 00:20:58,199 Speaker 1: now for for Marie to tackle in the near future. 452 00:20:58,600 --> 00:21:01,080 Speaker 1: And Marie, there are a lot of changes happening right now. Um, 453 00:21:01,440 --> 00:21:03,560 Speaker 1: I can't imagine going through what you're going through kind 454 00:21:03,600 --> 00:21:05,720 Speaker 1: of in the midst of what we're all collectively going through. 455 00:21:05,840 --> 00:21:08,159 Speaker 1: It's it's a weird time. So we would suggest just 456 00:21:08,160 --> 00:21:10,400 Speaker 1: taking it one day at a time. Uh. And even 457 00:21:10,440 --> 00:21:12,840 Speaker 1: when it comes to the financial chores Matt mentioned one 458 00:21:12,880 --> 00:21:14,920 Speaker 1: day at a time, right, try to tackle one thing, 459 00:21:15,359 --> 00:21:17,600 Speaker 1: um and because I think it can become overwhelming when 460 00:21:17,600 --> 00:21:19,360 Speaker 1: you hear a laundry list and then you're like, oh yeah, 461 00:21:19,840 --> 00:21:22,000 Speaker 1: so yeah, I was saying all those things, I kind 462 00:21:22,000 --> 00:21:24,480 Speaker 1: of felt bad. Yeah, it's take one thing at a time. 463 00:21:24,720 --> 00:21:27,800 Speaker 1: And also too, I think it's really important to take 464 00:21:27,880 --> 00:21:31,040 Speaker 1: some time to explore your own personal financial goals that 465 00:21:31,040 --> 00:21:33,160 Speaker 1: will help to direct the actions that you're taking now 466 00:21:33,280 --> 00:21:36,120 Speaker 1: moving forward. You don't want to rush any large financial 467 00:21:36,240 --> 00:21:39,119 Speaker 1: decisions either. I hope you've also got people around you 468 00:21:39,160 --> 00:21:40,720 Speaker 1: that love you and have your back and that you 469 00:21:40,760 --> 00:21:42,959 Speaker 1: can uh can be a sounding board for you in 470 00:21:42,960 --> 00:21:46,199 Speaker 1: this time, both financially and personally. So yeah, Murray, we 471 00:21:46,240 --> 00:21:48,399 Speaker 1: wish you the best. All right, Matt, we got a 472 00:21:48,480 --> 00:21:51,600 Speaker 1: couple more questions to get to, including a question from 473 00:21:51,640 --> 00:21:54,399 Speaker 1: a school teacher who eventually wants to live on a 474 00:21:54,440 --> 00:21:57,560 Speaker 1: school bus. We'll get to those right after the break. 475 00:22:06,520 --> 00:22:08,760 Speaker 1: All right, Joelie are back from the break taking listen 476 00:22:08,760 --> 00:22:10,760 Speaker 1: of questions. And before we get to that school best question, 477 00:22:10,880 --> 00:22:13,920 Speaker 1: we have one about investment apps. Let's go ahead and 478 00:22:13,920 --> 00:22:16,320 Speaker 1: get to that one. Hi, Matt and Joel, this is 479 00:22:16,400 --> 00:22:19,840 Speaker 1: Joe from Northwest Arkansas. Thank you both for doing a 480 00:22:19,880 --> 00:22:24,840 Speaker 1: great job of making every day personal finance understandable and interesting. 481 00:22:25,720 --> 00:22:29,520 Speaker 1: I've been looking for a spare change investing app which 482 00:22:29,760 --> 00:22:33,920 Speaker 1: rounds up transactions on your credit card and automatically saves 483 00:22:34,080 --> 00:22:37,720 Speaker 1: or invest the difference. There seemed to be several good 484 00:22:37,720 --> 00:22:43,119 Speaker 1: looking options out there, like Acorns, robin Hood, Wealth Front, Betterment, 485 00:22:43,359 --> 00:22:48,440 Speaker 1: or others. I already have a Fidelity personal investment account, 486 00:22:48,560 --> 00:22:52,040 Speaker 1: which I'm not looking to replace. I'm looking more for 487 00:22:52,160 --> 00:22:55,679 Speaker 1: something that's simple to use and will just help me 488 00:22:55,760 --> 00:22:59,640 Speaker 1: save some extra money over time. So I would love 489 00:22:59,640 --> 00:23:01,840 Speaker 1: to hear of thoughts on which of these apps you 490 00:23:01,880 --> 00:23:05,399 Speaker 1: think is the best for everyday use, and specifically which 491 00:23:05,400 --> 00:23:09,280 Speaker 1: has the best fee structure, as I imagine fees can 492 00:23:09,320 --> 00:23:12,280 Speaker 1: make a big difference when you're talking about investing such 493 00:23:12,320 --> 00:23:16,480 Speaker 1: a small amount every month. By the way, Northwest Arkansas 494 00:23:16,600 --> 00:23:18,919 Speaker 1: has some of the best cycling in the country and 495 00:23:18,920 --> 00:23:22,040 Speaker 1: there are a ton of great craft breweries around, So 496 00:23:22,080 --> 00:23:24,160 Speaker 1: if you're ever in the area, please give me a shout. 497 00:23:24,520 --> 00:23:27,440 Speaker 1: Thanks a lot. Oh biking in Arkansas and beers to 498 00:23:27,800 --> 00:23:31,000 Speaker 1: bikes and beers, baby, those are all of our favorite things. 499 00:23:31,000 --> 00:23:33,359 Speaker 1: I'm hopping in my car. Now. First we'll answer your question, 500 00:23:33,720 --> 00:23:36,840 Speaker 1: all right, So yeah, let's talk about the investing accounts 501 00:23:36,880 --> 00:23:40,479 Speaker 1: that round up a first spare change. Investing apps are 502 00:23:40,480 --> 00:23:44,480 Speaker 1: pretty cool and they're a major part of the democratization 503 00:23:44,520 --> 00:23:47,160 Speaker 1: of investing, which has really occurred over the last ten years. 504 00:23:47,520 --> 00:23:51,520 Speaker 1: It's become so much easier for individual investors to invest 505 00:23:51,760 --> 00:23:54,320 Speaker 1: just a little bit here and there, and and that's 506 00:23:54,320 --> 00:23:58,879 Speaker 1: made investing, i would say, relevant, simple and inexpensive for 507 00:23:59,040 --> 00:24:02,520 Speaker 1: almost everybody who wants to participate, and these apps in particularly, 508 00:24:02,520 --> 00:24:05,000 Speaker 1: they tap into something that you touched on, Joe. Often 509 00:24:05,320 --> 00:24:07,159 Speaker 1: it's our own behavior that gets in the way of 510 00:24:07,200 --> 00:24:09,840 Speaker 1: us being able to invest more of our money. Having 511 00:24:09,880 --> 00:24:12,760 Speaker 1: an intelligent app that does it for us on the 512 00:24:12,800 --> 00:24:16,800 Speaker 1: reg helps many of us invest uh consistently when we 513 00:24:16,840 --> 00:24:19,880 Speaker 1: otherwise might not have. Yeah, and you mentioned some good 514 00:24:19,920 --> 00:24:22,760 Speaker 1: specific options there, Joe, But uh, you know m one 515 00:24:22,840 --> 00:24:25,480 Speaker 1: that's our favorite, you know, of all the different investing apps, 516 00:24:25,480 --> 00:24:28,119 Speaker 1: but they don't have the rounding up approach you know 517 00:24:28,119 --> 00:24:30,440 Speaker 1: that you're looking for. And so the big ones there 518 00:24:30,440 --> 00:24:34,000 Speaker 1: in that space are Stash and Acorns. You can start 519 00:24:34,040 --> 00:24:37,160 Speaker 1: investing via acorns lights for only one dollar a month. 520 00:24:37,240 --> 00:24:39,359 Speaker 1: You know, that's not too bad. That money will go 521 00:24:39,400 --> 00:24:42,280 Speaker 1: into a brokerage account, though not a retirement account like 522 00:24:42,280 --> 00:24:44,480 Speaker 1: an I ra A, which you know that would be 523 00:24:44,480 --> 00:24:47,000 Speaker 1: best for your taxes. You know from a tax standpoint. 524 00:24:47,320 --> 00:24:49,840 Speaker 1: The Stash beginner account does essentially the same thing. You know, 525 00:24:49,880 --> 00:24:51,719 Speaker 1: it's just one dollar, and although you know the that 526 00:24:51,880 --> 00:24:54,520 Speaker 1: fee right of one dollar, it's not ideal, it's not 527 00:24:54,760 --> 00:24:58,000 Speaker 1: bad if it actually gets you to invest when you 528 00:24:58,040 --> 00:25:00,400 Speaker 1: otherwise might not. You know, it kind of comes down 529 00:25:00,400 --> 00:25:02,960 Speaker 1: to that behavior side of things. But then on the contrary, 530 00:25:02,960 --> 00:25:05,000 Speaker 1: I'm want to give another argument, which is that you know, 531 00:25:05,040 --> 00:25:07,080 Speaker 1: one dollar it may not seem that bad, but it 532 00:25:07,080 --> 00:25:09,000 Speaker 1: all depends to on how much you're investing, right, And 533 00:25:09,040 --> 00:25:11,040 Speaker 1: so if you say, say you only have ten dollars 534 00:25:11,040 --> 00:25:13,000 Speaker 1: in that account and you have a one dollar fee, 535 00:25:13,200 --> 00:25:15,560 Speaker 1: lot's ten in a fund or an account we know 536 00:25:15,560 --> 00:25:18,000 Speaker 1: with a ten percent expense ratio would not be something 537 00:25:18,040 --> 00:25:20,800 Speaker 1: we would ever recommend, right, And so you know, on 538 00:25:20,800 --> 00:25:23,720 Speaker 1: one hand, it feels real small, because if that gets 539 00:25:23,760 --> 00:25:25,800 Speaker 1: you to invest maybe more than you normally would, then 540 00:25:25,800 --> 00:25:28,080 Speaker 1: it's a good thing. However, if you're comparing it to 541 00:25:28,480 --> 00:25:32,320 Speaker 1: a traditional low cost brokerage house who doesn't charge you anything, 542 00:25:32,359 --> 00:25:33,760 Speaker 1: and then on top of that their funds are are 543 00:25:33,800 --> 00:25:36,880 Speaker 1: pretty low cost, then that's when Stash or Acorns might 544 00:25:36,920 --> 00:25:38,800 Speaker 1: not be a great idea. Yeah, and Matt, you just 545 00:25:38,840 --> 00:25:41,639 Speaker 1: mentioned the two cheapest versions of Stash and Acorns, but 546 00:25:41,680 --> 00:25:44,080 Speaker 1: they it gets more expensive from there. Three dollars nine 547 00:25:44,080 --> 00:25:46,879 Speaker 1: dollars yeah. Yeah, And so especially if you want to 548 00:25:46,920 --> 00:25:50,680 Speaker 1: open up a retirement account through both those companies, you can, 549 00:25:50,760 --> 00:25:52,960 Speaker 1: it's just gonna cost you more every single month. And 550 00:25:53,000 --> 00:25:54,760 Speaker 1: so Joe, what we would say is, you basically have 551 00:25:54,800 --> 00:25:57,080 Speaker 1: an account with one of the best, most awesome, low 552 00:25:57,080 --> 00:26:00,359 Speaker 1: cost companies out there, Fidelity, and so the app salute 553 00:26:00,400 --> 00:26:03,679 Speaker 1: best move for you, fee wise is to have a 554 00:26:03,760 --> 00:26:07,959 Speaker 1: monthly automatic contribution to your IRA. There the fees are 555 00:26:08,000 --> 00:26:10,640 Speaker 1: non existent. If you go with one of the Fidelity 556 00:26:10,720 --> 00:26:13,840 Speaker 1: zero funds, and you can easily invest inside of a 557 00:26:13,840 --> 00:26:17,240 Speaker 1: retirement account, a traditional or a roth IRA, they're giving 558 00:26:17,240 --> 00:26:20,280 Speaker 1: you tax benefits at the same time. So Matt and I, 559 00:26:20,359 --> 00:26:22,960 Speaker 1: what we would say is, if you need the behavioral help, 560 00:26:23,000 --> 00:26:25,440 Speaker 1: like if you're not going to invest it any other way, 561 00:26:25,760 --> 00:26:28,600 Speaker 1: you're just gonna avoid it, then go with acorns or stash, 562 00:26:28,800 --> 00:26:30,919 Speaker 1: pay the fee and get more money set aside for 563 00:26:30,920 --> 00:26:32,840 Speaker 1: your future. But if that's not the case, if you're 564 00:26:32,840 --> 00:26:36,760 Speaker 1: a pretty dedicated investor, then forego those rounding up apps, 565 00:26:36,800 --> 00:26:39,080 Speaker 1: we would say, and and pop more money in your 566 00:26:39,080 --> 00:26:42,199 Speaker 1: retirement account via the company you already have a relationship with. 567 00:26:42,240 --> 00:26:45,960 Speaker 1: Get those automatic withdrawals set up on a recurring monthly 568 00:26:46,119 --> 00:26:49,240 Speaker 1: or weekly basis that make it part of the norm 569 00:26:49,320 --> 00:26:51,920 Speaker 1: where those things basically become just a regular debit from 570 00:26:51,920 --> 00:26:55,040 Speaker 1: your account consistently. Yeah, those recurring auto deposits, you know, 571 00:26:55,080 --> 00:26:56,920 Speaker 1: like that's when you're gonna be able to make a meaningful, 572 00:26:57,440 --> 00:27:00,439 Speaker 1: you know, impact on your retirement accounts. You know, if 573 00:27:00,480 --> 00:27:02,920 Speaker 1: you're counting on rounding up apps for your retirement, I 574 00:27:02,960 --> 00:27:05,000 Speaker 1: don't know how much headway you're actually gonna make just 575 00:27:05,040 --> 00:27:07,480 Speaker 1: by you know, with some change. Uh. And so I 576 00:27:07,480 --> 00:27:09,200 Speaker 1: think that might be a good question to ask yourself, 577 00:27:09,240 --> 00:27:11,320 Speaker 1: is what are you going to be using these apps for. 578 00:27:11,880 --> 00:27:14,000 Speaker 1: If you're counting on it for retirement, than then maybe not. 579 00:27:14,080 --> 00:27:16,800 Speaker 1: But if you're looking to use these apps for setting 580 00:27:16,960 --> 00:27:20,080 Speaker 1: maybe smaller, more near term goals like saving up for 581 00:27:20,119 --> 00:27:22,240 Speaker 1: a vacation or saving up, you know, for a car 582 00:27:22,359 --> 00:27:24,720 Speaker 1: or something like that, I think those are great examples 583 00:27:24,760 --> 00:27:27,520 Speaker 1: of when something like acorns or stash where they would 584 00:27:27,600 --> 00:27:29,320 Speaker 1: make a ton of sense because it's a lot easier 585 00:27:29,320 --> 00:27:31,760 Speaker 1: to maybe round up a buck or two and have 586 00:27:31,880 --> 00:27:33,840 Speaker 1: that go towards you know, something that's going to cost 587 00:27:33,880 --> 00:27:35,959 Speaker 1: you a couple of thousand dollars. That just feels more 588 00:27:35,960 --> 00:27:38,679 Speaker 1: attainable to me versus the need to set aside a 589 00:27:38,720 --> 00:27:41,040 Speaker 1: couple hundred thousands of dollars, you know, like there's even 590 00:27:41,160 --> 00:27:45,120 Speaker 1: one million dollars exactly. And so yeah, if you're looking 591 00:27:45,160 --> 00:27:46,760 Speaker 1: to use an app like this for some of those 592 00:27:46,760 --> 00:27:48,560 Speaker 1: short term goals, I think it could definitely make a 593 00:27:48,560 --> 00:27:50,680 Speaker 1: lot of sense for you. Yeah, no doubt. All right, Joe, 594 00:27:50,720 --> 00:27:52,960 Speaker 1: best of luck to you man uh In in your 595 00:27:53,080 --> 00:27:55,840 Speaker 1: investing endeavors. And it sounds like you're you're on the 596 00:27:55,880 --> 00:27:58,960 Speaker 1: right path. And yeah, figuring out that behavioral side is 597 00:27:59,000 --> 00:28:01,320 Speaker 1: so crucial for all of us so that we can 598 00:28:01,440 --> 00:28:04,359 Speaker 1: become dedicated investors for for the long haul. All right, 599 00:28:04,400 --> 00:28:08,240 Speaker 1: Next question, Matt. This one comes from a school teacher 600 00:28:08,359 --> 00:28:10,359 Speaker 1: who wants to live in a school bus, and I'm 601 00:28:10,400 --> 00:28:12,879 Speaker 1: so excited to take this question. Hi, Matt and Joel. 602 00:28:13,200 --> 00:28:16,520 Speaker 1: I'm Becky from Kansas City. I'm a single mom. My 603 00:28:16,600 --> 00:28:18,800 Speaker 1: kids are now grown and out of the house. I'll 604 00:28:18,840 --> 00:28:21,359 Speaker 1: retire in ten years at the age of fifty seven. 605 00:28:22,119 --> 00:28:24,440 Speaker 1: I currently live in an apartment, which I love because 606 00:28:24,440 --> 00:28:26,520 Speaker 1: I don't have to do any maintenance or lawn care. 607 00:28:27,160 --> 00:28:29,639 Speaker 1: After I retire from teaching, I'd like to live in 608 00:28:29,680 --> 00:28:32,639 Speaker 1: a converted school bus and travel to the country. I 609 00:28:32,680 --> 00:28:35,680 Speaker 1: don't have any interest in homeownership, but I keep hearing 610 00:28:35,680 --> 00:28:38,440 Speaker 1: the message that home ownership is the best path to 611 00:28:38,520 --> 00:28:41,840 Speaker 1: wealth building. Should I buy property I don't really want 612 00:28:41,920 --> 00:28:45,280 Speaker 1: for the potential financial gain. Is there another way to 613 00:28:45,320 --> 00:28:48,440 Speaker 1: get the same rate of return? Thank you so much 614 00:28:48,480 --> 00:28:51,680 Speaker 1: for a great show. Take care, Joel. How cool is 615 00:28:51,720 --> 00:28:53,760 Speaker 1: that she's a teacher and now she wants to live 616 00:28:53,800 --> 00:28:56,280 Speaker 1: in a school bus. It's like full circle. I know, 617 00:28:56,480 --> 00:28:58,240 Speaker 1: it's so great. It's so great, you know it. Actually 618 00:28:58,280 --> 00:29:00,840 Speaker 1: it reminds me of did did you ever play Cruise 619 00:29:00,840 --> 00:29:02,800 Speaker 1: in USA? Have we talked about that on the show before? 620 00:29:02,840 --> 00:29:06,400 Speaker 1: I mean old old arcade game? But you could also 621 00:29:06,400 --> 00:29:08,680 Speaker 1: played on the N six four, and I remember somehow 622 00:29:08,720 --> 00:29:10,360 Speaker 1: you could like put a special code in, like maybe 623 00:29:10,360 --> 00:29:11,760 Speaker 1: get a cheap coat or something like that, and you 624 00:29:11,760 --> 00:29:15,480 Speaker 1: could race as a school bus instead of like a 625 00:29:15,520 --> 00:29:17,280 Speaker 1: Ferrari or a Corvette or something like that. I think 626 00:29:17,320 --> 00:29:19,680 Speaker 1: Becky's gonna be racing or bus some day, or probably 627 00:29:19,720 --> 00:29:21,880 Speaker 1: just living in it, thinks so Pop and Wheelie's exploring 628 00:29:21,920 --> 00:29:24,560 Speaker 1: the country. It sounds like that sounds awesome. So yeah, Becky, 629 00:29:24,720 --> 00:29:27,600 Speaker 1: I appreciate well you're all about you sound awesome and 630 00:29:27,600 --> 00:29:30,560 Speaker 1: and your dream sounds really great too. Also, congrats on 631 00:29:30,600 --> 00:29:33,640 Speaker 1: being able to retire at fifty seven ten years from now. 632 00:29:33,640 --> 00:29:35,920 Speaker 1: That's gonna be awesome, right, that's incredible as well. At 633 00:29:36,000 --> 00:29:37,440 Speaker 1: the same time, Matt, I mean, one of the cool 634 00:29:37,480 --> 00:29:39,360 Speaker 1: things about the converted school bus is that the cost 635 00:29:39,360 --> 00:29:41,440 Speaker 1: of living isn't really going to be all that much either. 636 00:29:41,520 --> 00:29:43,720 Speaker 1: So so maybe that makes it possible for Becky to 637 00:29:43,760 --> 00:29:46,520 Speaker 1: retire at that age. Retiring to a cheap lifestyle can 638 00:29:46,600 --> 00:29:49,440 Speaker 1: allow you to retire earlier than maybe you previously thought. 639 00:29:49,560 --> 00:29:51,840 Speaker 1: And she might even argue that this isn't a cheap 640 00:29:51,880 --> 00:29:54,400 Speaker 1: way to live, but maybe a more affordable way to 641 00:29:54,480 --> 00:29:56,760 Speaker 1: live a very rich life on the road seeing all 642 00:29:56,760 --> 00:30:01,320 Speaker 1: that she wants to see frugal not cheap, right, So specifically, Becky, 643 00:30:01,400 --> 00:30:03,880 Speaker 1: let's get to to your question on whether home ownership 644 00:30:04,000 --> 00:30:06,600 Speaker 1: is necessary and wealth building, and Matt and I would 645 00:30:06,600 --> 00:30:09,080 Speaker 1: we would say that the answer is a definite no 646 00:30:09,360 --> 00:30:12,640 Speaker 1: on this one. Home Ownership is certainly not the best 647 00:30:12,680 --> 00:30:15,840 Speaker 1: path to wealth building for most people. It's just actually 648 00:30:15,840 --> 00:30:19,480 Speaker 1: the path that most people take. So in fact, I think, Matt, 649 00:30:19,520 --> 00:30:22,280 Speaker 1: you mentioned this on a recent episode. A predominance of 650 00:30:22,400 --> 00:30:25,840 Speaker 1: net worth is in home equity for most Americans, And yeah, 651 00:30:25,840 --> 00:30:27,680 Speaker 1: we talked about that in our net Worth episode, that 652 00:30:28,080 --> 00:30:30,600 Speaker 1: a lot of people who have a decent net worth, 653 00:30:30,680 --> 00:30:32,360 Speaker 1: it's not because they've done a good job of saving 654 00:30:32,400 --> 00:30:34,560 Speaker 1: and investing. It's because they've lived in a home over 655 00:30:34,680 --> 00:30:37,560 Speaker 1: a certain period of time and they've accrued some equity there. 656 00:30:37,760 --> 00:30:41,000 Speaker 1: And we actually don't think that's great. We'd prefer to 657 00:30:41,040 --> 00:30:44,160 Speaker 1: see you investing in something like a target retirement fund 658 00:30:44,160 --> 00:30:46,640 Speaker 1: over the next ten years while you're still working and 659 00:30:46,680 --> 00:30:49,360 Speaker 1: building wealth that way, as opposed to putting it into 660 00:30:49,440 --> 00:30:53,320 Speaker 1: a home. Plus, think about the logistics matt of being 661 00:30:53,360 --> 00:30:56,160 Speaker 1: a long distance landlord from your wandering school bus, from 662 00:30:56,320 --> 00:30:59,040 Speaker 1: your nomadic adventures. Right. Uh, there's there's not only the 663 00:30:59,080 --> 00:31:02,600 Speaker 1: maintenance cost, but also the time that it takes. I 664 00:31:02,600 --> 00:31:04,320 Speaker 1: would think it'd be a bit of a headache to 665 00:31:04,360 --> 00:31:06,840 Speaker 1: manage a property from And Plus she even mentioned to 666 00:31:06,920 --> 00:31:09,200 Speaker 1: in her question that she loves not having to worry 667 00:31:09,240 --> 00:31:11,600 Speaker 1: about the yard, not having to worry about maintenance. And 668 00:31:11,640 --> 00:31:13,560 Speaker 1: so I tell you what, if you don't enjoy those 669 00:31:13,600 --> 00:31:16,160 Speaker 1: things on your own home that you personally live in, 670 00:31:16,320 --> 00:31:18,760 Speaker 1: it's even less fun to do it in a property 671 00:31:18,840 --> 00:31:21,560 Speaker 1: that you manage that's an investment property. Yeah, that's true. 672 00:31:21,840 --> 00:31:24,000 Speaker 1: And so but let's talk about the historic returns of 673 00:31:24,080 --> 00:31:27,400 Speaker 1: actual real estate. Right. The median home value in the 674 00:31:27,520 --> 00:31:31,560 Speaker 1: US has increased at five point five percent. Since that's 675 00:31:31,600 --> 00:31:34,080 Speaker 1: not bad, but the annual return of investing in stocks 676 00:31:34,160 --> 00:31:37,120 Speaker 1: is over nine percent uh and even a balanced portfolio 677 00:31:37,240 --> 00:31:40,680 Speaker 1: of sixty stocks and forty percent bonds has a historical 678 00:31:40,720 --> 00:31:44,719 Speaker 1: return of seven point eight percent. And so the numbers 679 00:31:44,720 --> 00:31:49,080 Speaker 1: certainly reflect that investing in the American economy is better 680 00:31:49,160 --> 00:31:52,720 Speaker 1: than investing in a physical home. Plus, you'll you'll never 681 00:31:52,720 --> 00:31:54,360 Speaker 1: have to replace a roof for an h VACT unit 682 00:31:54,440 --> 00:31:56,640 Speaker 1: on one of your index funds, right, and if Vanguard 683 00:31:56,680 --> 00:31:59,440 Speaker 1: comes Columny and they ask for one for a rout replacement, 684 00:31:59,560 --> 00:32:01,440 Speaker 1: I'm gonna I'm gonna hang up the phone. Yeah, like 685 00:32:01,440 --> 00:32:03,600 Speaker 1: a surprise capital expense that they try to pin to you. 686 00:32:03,640 --> 00:32:06,200 Speaker 1: No way, man, no way, not any day, not having it, 687 00:32:06,520 --> 00:32:08,520 Speaker 1: and the Becky t Back in episode thirty, we actually 688 00:32:08,600 --> 00:32:12,360 Speaker 1: compared home ownership to investing in the market, and in 689 00:32:12,360 --> 00:32:14,480 Speaker 1: that episode we laid out all the different reasons why 690 00:32:14,520 --> 00:32:16,560 Speaker 1: investing in the market is so much better. So if 691 00:32:16,560 --> 00:32:18,640 Speaker 1: you haven't yet listened to that episode, we would highly 692 00:32:18,680 --> 00:32:21,560 Speaker 1: recommend that one. If you are not already convinced to 693 00:32:21,640 --> 00:32:24,160 Speaker 1: not buy property, Becky, you will be after listening to 694 00:32:24,280 --> 00:32:27,000 Speaker 1: that one. So Becky that that also might beg the 695 00:32:27,080 --> 00:32:29,480 Speaker 1: question why do Matt and I invest in real estate? 696 00:32:29,600 --> 00:32:32,160 Speaker 1: Are we are we gluttons for punishment both of these 697 00:32:32,160 --> 00:32:34,600 Speaker 1: things at the same time, because we truly do believe 698 00:32:34,640 --> 00:32:37,240 Speaker 1: that for most folks, like investing in the market is 699 00:32:37,400 --> 00:32:41,480 Speaker 1: the best option. However, Yeah, but investing in real estate 700 00:32:41,520 --> 00:32:44,040 Speaker 1: can make sense for a lot of people, especially people 701 00:32:44,200 --> 00:32:47,560 Speaker 1: that are attracted to it and do their due diligence, 702 00:32:48,040 --> 00:32:50,360 Speaker 1: and also if it fits within their lifestyle, which it 703 00:32:50,400 --> 00:32:52,960 Speaker 1: sounds like becky for you for multiple reasons, one because 704 00:32:53,000 --> 00:32:54,880 Speaker 1: you're not interested in it, and too you're planning on 705 00:32:54,960 --> 00:32:57,600 Speaker 1: living in ultra nomadic lifestyle, like it's just not going 706 00:32:57,640 --> 00:33:00,480 Speaker 1: to fit into your plans. But it is possible to 707 00:33:00,480 --> 00:33:03,360 Speaker 1: invest in real estate and outperform the historic numbers that 708 00:33:03,440 --> 00:33:06,440 Speaker 1: match just mentioned because certain local real estate markets allow 709 00:33:06,520 --> 00:33:11,440 Speaker 1: investors specific opportunities. Basically, you're talking about a much smaller 710 00:33:11,480 --> 00:33:15,000 Speaker 1: market with interesting, little inefficiencies that can pop up from 711 00:33:15,000 --> 00:33:17,120 Speaker 1: time to time, and so the deals that you can 712 00:33:17,160 --> 00:33:20,480 Speaker 1: find when you're investing in property can be meaningful and 713 00:33:20,520 --> 00:33:23,280 Speaker 1: they can make real estate just a really great asset 714 00:33:23,600 --> 00:33:26,560 Speaker 1: if you're interested in that being part of your life. Yeah, exactly, man, 715 00:33:26,600 --> 00:33:28,440 Speaker 1: and I will say to that episode I referenced Rite 716 00:33:28,440 --> 00:33:31,720 Speaker 1: episode thirty about how your home isn't you know, an 717 00:33:31,760 --> 00:33:36,160 Speaker 1: awful investment. We're also specifically talking about primary residences and 718 00:33:36,160 --> 00:33:38,280 Speaker 1: and when we buy real estates. You know, when we're 719 00:33:38,280 --> 00:33:40,920 Speaker 1: looking at real estates, we're looking at it through a 720 00:33:40,960 --> 00:33:43,560 Speaker 1: completely different lens as compared to how most folks are 721 00:33:43,600 --> 00:33:45,760 Speaker 1: looking at property to purchase, you know, for a home 722 00:33:46,160 --> 00:33:48,360 Speaker 1: and so they want to live in as a primary residence. 723 00:33:48,440 --> 00:33:50,880 Speaker 1: Is It's a different set of factors that you're weighing, 724 00:33:51,200 --> 00:33:53,320 Speaker 1: and people choose a home to live in for many 725 00:33:53,360 --> 00:33:55,680 Speaker 1: different reasons than they would choose a home to rent 726 00:33:55,760 --> 00:33:59,480 Speaker 1: or a home to buy to to rent out the tenants. Yeah, Za, Becky, 727 00:33:59,520 --> 00:34:03,400 Speaker 1: I think the big consideration here and your question is lifestyle. 728 00:34:03,480 --> 00:34:05,080 Speaker 1: And it doesn't sound like that this is something that 729 00:34:05,160 --> 00:34:07,000 Speaker 1: you personally want to do. It sounds like you want 730 00:34:07,000 --> 00:34:08,680 Speaker 1: to want to hit the road. And in your case, 731 00:34:08,719 --> 00:34:11,600 Speaker 1: we would recommend just avoiding real estate completely and instead 732 00:34:11,640 --> 00:34:14,680 Speaker 1: focusing on the market, investing in the stock market. Keep 733 00:34:14,680 --> 00:34:17,680 Speaker 1: it simple. The simplicity factor matters so much for for 734 00:34:17,719 --> 00:34:21,200 Speaker 1: investors to write, and in your case, Becky's simplicity is 735 00:34:21,239 --> 00:34:23,320 Speaker 1: a major concern as well, and so at taking the 736 00:34:23,640 --> 00:34:26,640 Speaker 1: simple route of investing in something like a target date 737 00:34:26,680 --> 00:34:29,440 Speaker 1: retirement fund makes just a whole lot more sense for 738 00:34:29,480 --> 00:34:32,480 Speaker 1: you in your situation, exactly. All Right, So now that 739 00:34:32,520 --> 00:34:35,000 Speaker 1: we've talked Becky out of buying any real estate, let's 740 00:34:35,000 --> 00:34:36,839 Speaker 1: talk about our beer, Jill. This episode, you and I 741 00:34:37,160 --> 00:34:40,319 Speaker 1: we enjoyed a swoon units and this is a I'm 742 00:34:40,320 --> 00:34:41,759 Speaker 1: gonna read what it says here on the label. It 743 00:34:41,760 --> 00:34:44,600 Speaker 1: says it's a quenchable and credible fruit beer with local blackberries. 744 00:34:44,640 --> 00:34:47,800 Speaker 1: And this is by fonsa Flora brewery up in North Carolina. 745 00:34:48,120 --> 00:34:50,240 Speaker 1: This is one of those breweries that you and I 746 00:34:50,280 --> 00:34:52,560 Speaker 1: love a lot, and neither of us have ever been there, 747 00:34:52,560 --> 00:34:55,000 Speaker 1: but we're gonna have to remedy that soon. Man. What 748 00:34:55,040 --> 00:34:58,360 Speaker 1: were your thoughts on this beer? Yeah, so, most fruit 749 00:34:58,360 --> 00:35:02,120 Speaker 1: beers I think are usually tart, and this one wasn't um, 750 00:35:02,160 --> 00:35:03,640 Speaker 1: and so it was kind of nice to drink something 751 00:35:03,640 --> 00:35:06,640 Speaker 1: a little bit different off the beaten path, had a 752 00:35:06,719 --> 00:35:09,239 Speaker 1: very like earthy vibe to it. Yeah. Yeah, I just 753 00:35:09,320 --> 00:35:12,359 Speaker 1: I really enjoyed it and I appreciated something just kind 754 00:35:12,360 --> 00:35:14,839 Speaker 1: of out of left field, which which it totally felt 755 00:35:14,840 --> 00:35:16,719 Speaker 1: like this one was. Yeah. When we poured, it had 756 00:35:16,760 --> 00:35:20,440 Speaker 1: a nice burgundy kind of Matt's velvety like red color 757 00:35:20,520 --> 00:35:22,840 Speaker 1: to it. But I was also surprised Joel, like you 758 00:35:22,840 --> 00:35:25,160 Speaker 1: were that you know, this was not a sour beer. 759 00:35:25,640 --> 00:35:27,600 Speaker 1: So because of that, I felt you can almost even 760 00:35:27,600 --> 00:35:29,239 Speaker 1: focus on some of the fruit a little bit more, 761 00:35:29,239 --> 00:35:32,080 Speaker 1: certainly the blackberries, and almost felt like it almost had 762 00:35:32,080 --> 00:35:34,479 Speaker 1: this kind of grape like flavor and seek some grapes 763 00:35:34,520 --> 00:35:36,279 Speaker 1: in there. I didn't even notice. Yeah maybe so, I 764 00:35:36,320 --> 00:35:37,960 Speaker 1: mean it's just fruit, you know, so maybe there's other 765 00:35:38,000 --> 00:35:39,440 Speaker 1: fruit in there as well. So yeah, I mean, this 766 00:35:39,480 --> 00:35:42,319 Speaker 1: was an enjoyable fruit ale that I'm glad you and 767 00:35:42,360 --> 00:35:44,040 Speaker 1: I got to share with each other. It's certainly a 768 00:35:44,120 --> 00:35:46,400 Speaker 1: good change of pace, you know, because oftentimes we gravitate 769 00:35:46,440 --> 00:35:49,760 Speaker 1: towards New England. I p a s or fruited sours 770 00:35:49,880 --> 00:35:52,160 Speaker 1: or barely aged doubts. But it's nice to have something 771 00:35:52,200 --> 00:35:53,759 Speaker 1: a little bit different here to kind of mix it 772 00:35:53,840 --> 00:35:56,319 Speaker 1: up on the show. Yeah. Very unique, and that's what 773 00:35:56,360 --> 00:35:57,960 Speaker 1: fun of FLOORA does. It seems like a lot of 774 00:35:58,080 --> 00:36:00,440 Speaker 1: unique beers coming out of that brewery. So it was 775 00:36:00,719 --> 00:36:02,560 Speaker 1: a pleasure to get to have this one with you, 776 00:36:02,640 --> 00:36:05,720 Speaker 1: my friend all right, that's gonna do it for today's episode. 777 00:36:05,719 --> 00:36:07,960 Speaker 1: For folks who want show notes for this episode, just 778 00:36:08,000 --> 00:36:11,200 Speaker 1: go to our website at how to money dot com. Yeah, 779 00:36:11,239 --> 00:36:13,200 Speaker 1: and if you're listening to our show for the first 780 00:36:13,239 --> 00:36:15,920 Speaker 1: time and you have not yet subscribed, you can easily 781 00:36:15,920 --> 00:36:18,040 Speaker 1: do that by mashing that button there on your phone 782 00:36:18,360 --> 00:36:20,240 Speaker 1: to make sure that you don't miss a single episode. 783 00:36:20,280 --> 00:36:21,759 Speaker 1: And if you haven't left us a review yet either, 784 00:36:21,840 --> 00:36:23,440 Speaker 1: we would love it if you were to head over 785 00:36:23,480 --> 00:36:25,680 Speaker 1: to Apple Podcast, where you can leave us a solid 786 00:36:25,719 --> 00:36:27,680 Speaker 1: review over there. It helps us to get the word 787 00:36:27,680 --> 00:36:30,080 Speaker 1: out to those looking how to manage their money a 788 00:36:30,120 --> 00:36:32,160 Speaker 1: little bit better. So, Joel, that's gonna be it for 789 00:36:32,160 --> 00:36:35,799 Speaker 1: this episode, Buddy. Until next time, best friends, best Friends Out.