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

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

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Speaker 2: That's all right, buddy, We've got a number of voice

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Speaker 2: memos to get to during our Ask how to Money episode. Today,

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Speaker 2: we're gonna hear from a listener who is looking to

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Speaker 2: diversify his way to financial independence. Another listener is wondering

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Speaker 2: what she should do, specifically when she is upside down

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Speaker 2: on a vehicle an RV. We'll get to that, and

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Speaker 2: we're gonna hear from another listener who is looking for

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Speaker 2: the best accounts to park a down payment for a

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Speaker 2: home that she's looking to purchase. So looking forward to

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Speaker 2: that plus more during our episode here.

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Speaker 1: Today, Buddy, no doubt.

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Speaker 2: You want to talk about finding loss of money. You've

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Speaker 2: got a note here about.

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Speaker 1: I'm not talking about couch cushion money, Matt, about the

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Speaker 1: old standby. So I got a text from a buddy

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Speaker 1: the other day and he said, hey, found money for you.

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Speaker 1: I was like, what are you talking about for you? Yeah?

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Speaker 1: For really? He literally just started. So there are these

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Speaker 1: online databases missing money dot com and unclaimed dot org.

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Speaker 1: So let's say it's an insurance payout that was trying

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Speaker 1: to get to you. There's like a million reasons you

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Speaker 1: might have some sort of outstanding money that's in your

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Speaker 1: name that I don't know. You missed the correspondence and

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Speaker 1: it never came to you, and so they are the

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Speaker 1: state databases that keep track of these funds.

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Speaker 2: Or maybe it was when you had to flee the state, Joel,

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Speaker 2: and you changed your name in order to evade all

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Speaker 2: of the Uh, we don't talk about the loan sharks.

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Speaker 1: We don't talk about my time on the LAMB map. Okay,

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Speaker 1: that we're after you. And so apparently I did have money.

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Speaker 1: My buddy randomly searched in my name. You can do

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Speaker 1: this for people that you care about, I guess if

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Speaker 1: you want. And he was like, I got a little

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Speaker 1: bit extra time on my hands, let me put Joel's

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Speaker 1: name into the database. And so, yeah, he was able

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Speaker 1: to find two little sums of money. I was owed

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Speaker 1: what by?

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Speaker 2: I shocked?

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Speaker 1: Well, I guess it must be fairly recent based on

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Speaker 1: an insurance claim, a homeowners insurance claim when the tree

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Speaker 1: fell through my roof.

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Speaker 2: I remember that.

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Speaker 1: Yeah, But they were sub fifty dollars each, So it's

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Speaker 1: not like we're talking about big, big bucks went like

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Speaker 1: thousands of No, I mean, how cool would that have been?

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Speaker 3: Right?

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Speaker 1: I would have voted a finder see if that was

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Speaker 1: the case. That's crazy man.

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Speaker 2: Okay, So well you specifically mentioned the two like national sites.

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Speaker 2: I think there's a lot of folks who are listening

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Speaker 2: and they're thinking this is too good to be true, man, Like,

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Speaker 2: there's no way that this exists. No, this is completely legit. Yeah,

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Speaker 2: and the two sites that Joel mentioned are like national

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Speaker 2: sort of databases.

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Speaker 1: Well linked to them in the show notes.

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Speaker 2: By the way, but go a step beyond that as well,

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Speaker 2: because some of those or some states aren't included in

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Speaker 2: those national registries as well. So states have their own

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Speaker 2: registry that you can search as well. So if you

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Speaker 2: really want to get into the weeds a little bit,

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Speaker 2: I would recommend for you to do that. So, uh,

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Speaker 2: sub fifty dollars, yeah, still look at one hundred bucks.

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Speaker 2: Perhaps you got any.

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Speaker 1: Play white not white, but hey, it's something no big

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Speaker 1: plans for the money, not really, but we'll see. But

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Speaker 1: it's really nice of my friend to look out for me.

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Speaker 1: And you can do this for your friends, for your

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Speaker 1: loved ones, but you can do it for yourself and

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Speaker 1: so this is just one of those things that takes

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Speaker 1: literally thirty seconds of your time type that information and

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Speaker 1: figure out whether or not there is some money out

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Speaker 1: there for you and go out there and get it.

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Speaker 1: But yeah, just just know that these websites are legitimate.

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Speaker 1: And I've met we've every time we talk about this,

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Speaker 1: we have probably half a dozen listeners reach out and.

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Speaker 2: We hear it for the first time.

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Speaker 1: Yeah, and they've heard it and they take action and

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Speaker 1: they go check it out and there's money waiting there

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Speaker 1: for them. So it's one of those things where it

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Speaker 1: does seem too good to be true, but in this

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Speaker 1: case it's it's not. It's really just record keeping of

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Speaker 1: your money that wasn't able to get to you somehow.

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Speaker 2: In a lot of cases, I mean, it can be

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Speaker 2: thousands of dollars. It's way more than just like the

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Speaker 2: equivalent of some like a twenty dollars bill lost left

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Speaker 2: in the winter coat or in a purse that you're

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Speaker 2: no longer using slip away in your Class's nice?

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Speaker 1: Is it to find twenty bucks in your coat pocket?

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Speaker 1: It means yeah, it brings a smile.

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Speaker 2: To me, although I've literally never had that happen And

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Speaker 2: it's even less likely to happen, given how little we

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Speaker 2: use physical cash these days. But hey, I'm happy for.

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Speaker 1: You, buddy. Yeah, thanks man, and thanks to my friend

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Speaker 1: Tim for looking out for me.

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Speaker 2: Did Tim search my name as well?

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Speaker 1: He didn't say.

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Speaker 2: I'm going to assume he did. There's no money out there.

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Speaker 1: He probably been. It's been a couple of years though,

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Speaker 1: since I've searched as well.

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Speaker 2: But before we move on, let's share the beer that

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Speaker 2: you and I are going to enjoy during this episode.

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Speaker 2: This is an ash, which is a beer by Humble Forger,

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Speaker 2: and specifically it's a barrel aged American double spout, and

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Speaker 2: I'm not surprised to see that looks like it's a

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Speaker 2: collaboration with the Brewing Project because I have literally never

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Speaker 2: had a stout by the Humble Forger before they normally

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Speaker 2: do those. I've had an ipa by them before, and

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Speaker 2: some a lot of sours is typically what I'm used

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Speaker 2: to seeing on their label. So looking forward to enjoying

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Speaker 2: this one and sharing our thoughts at the end of

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Speaker 2: the episode.

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Speaker 1: Same here, All right, let's move on a list questions. So, Matt,

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Speaker 1: and by the way, if you're listening and you say

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Speaker 1: I've got a money question. I want Matt Joel to

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Speaker 1: tackle it next week on the podcast. Well, we'd love

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Speaker 1: to hear your question. You can just go to how

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Speaker 1: to money dot com slash ask for the directions. But

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Speaker 1: really it's just recording a voice memo sending over to

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Speaker 1: us via email and hopefully we'll take it next week. Matt,

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Speaker 1: let's get to a question about diversification and is stock

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Speaker 1: market investing enough to get the job done.

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Speaker 4: Hey, Matt and Joel. My name is Mike and I've

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Speaker 4: been listening to your podcast for a few years now.

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Speaker 4: Great content, love the fact that it's tailored to a

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Speaker 4: wide audience. Keep up the awesome work. The question today

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Speaker 4: is about diversity. The wife and I have focused on

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Speaker 4: our careers and our income, which is paid off in

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Speaker 4: the long run. We're also interested in financial independence and

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Speaker 4: over the last few years we've become really focused on

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Speaker 4: our savings rate. And I'll also add that we are

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Speaker 4: currently in our mid thirties and do not have any

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Speaker 4: kids as of yet. Right now, we max out both

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Speaker 4: the four O one K, the IRA, the HSAS, and

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Speaker 4: after that we average four thousand dollars per month to

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Speaker 4: a brokerage account. And my question is everyone keeps saying

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Speaker 4: that real estate is a way to supercharge your finances,

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Speaker 4: but honestly, I see nothing but hard work and high risks.

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Speaker 4: We live in a medium cost of living area, but

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Speaker 4: there are no houses around here that are actually cash flowing.

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Speaker 4: I've talked to a couple of real estate agents, and

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Speaker 4: the general advice is that they're going for appreciation, which

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Speaker 4: I think is a bad bet. Is investing everything in

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Speaker 4: a low cost index fund. Enough, it's pure stocks, so

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Speaker 4: if the market slows down, obviously that's all we're banking on.

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Speaker 4: What else can we do to diversify this money? We

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Speaker 4: save so much and have so much in cash. I

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Speaker 4: just don't see the benefit in making life more complex

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Speaker 4: with real estate and rentals. But is it ultimately a

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Speaker 4: bad move to only do low cost index funds and

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Speaker 4: nothing else?

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Speaker 1: Thanks guys, oh Joe?

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Speaker 2: Is it a bad move?

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Speaker 3: Sure?

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Speaker 2: If I would go that far, But uh, I am

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Speaker 2: glad that Mike is asking this question. He's asking how

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Speaker 2: much diversity is necessary to be a successful investor. And

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Speaker 2: this becomes even more pertinent the further along you get

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Speaker 2: in your progress towards financial independence, just because you know

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Speaker 2: we're talking about a bigger sum of money as opposed

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Speaker 2: to someone who's like just getting started.

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Speaker 1: Right, If you're all in with a hundred bucks, that's

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Speaker 1: one thing. If you're all in with a million bucks,

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Speaker 1: that's another thing. Exactly.

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Speaker 2: And in Mike's case, it's not like he's all in

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Speaker 2: on Nvidia or anything like that. He's well diversified in

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Speaker 2: the stock market. But does he need to go beyond that?

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Speaker 2: That is his question.

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Speaker 1: Yeah. I definitely think there are ways in which if

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Speaker 1: Mike called in with this question and his portfolio were

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Speaker 1: not as diverse as it is, it were kind of

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Speaker 1: allocated towards just a handful of stocks or something like that,

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Speaker 1: the answer is different. But you know, you're right, like

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Speaker 1: they are decently well diversified at least on the stock front. Yeah,

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Speaker 1: and so what costs index funds man? So way to go? Yeah,

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Speaker 1: And so Mike and his partner they've been smart to

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Speaker 1: focus on their careers as like one of the first

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Speaker 1: thing he thinks he talked about. You know, some people

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Speaker 1: who are incredibly frugal can focus so hard on saving

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Speaker 1: and pinching pennies that they forget to invest in themselves.

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Speaker 1: I think it's really important to highlight that, Matt, because

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Speaker 1: you know, growing the pie is so much smarter than

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Speaker 1: just trying to eat a little bit less of that pie,

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Speaker 1: and that is something that doesn't get focused on enough.

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Speaker 1: I don't think in the in the personal finance space,

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Speaker 1: what Mike and his spouse have been able to do

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Speaker 1: with that bigger pie is admirable. You guys have made

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Speaker 1: a lot of progress towards financial independence at an incredibly

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Speaker 1: young age. But now the question arises, do you need

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Speaker 1: to expand your efforts to other asset classes, to investing

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Speaker 1: more widely? And I think Matt, the at least simple

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Speaker 1: quick answer to that question is not really that those

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Speaker 1: low cost index funds really are enough for the vast

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Speaker 1: majority of people.

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Speaker 2: Totally, I would give him a big old negative because

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Speaker 2: if you, let's say you are a savvy real estate investor,

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Speaker 2: you are inclined in that direction. I think it can

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Speaker 2: be away in his words, to supercharge your finances. But

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Speaker 2: whether or not it will be for you as an

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Speaker 2: individual there, Mike, that depends on a ton of factors,

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Speaker 2: including the purchase price, it depends on what you can

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Speaker 2: get in rent, and the fact that it takes a

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Speaker 2: whole lot of time to save up for that down

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Speaker 2: payment as well. It's I think it's hardest for a

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Speaker 2: lot of folks out there to stomach the idea of

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Speaker 2: buying a rental property when you know that you're going

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Speaker 2: to be losing money on it every single month.

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Speaker 1: And I raise my hand to that, Matt, it would

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Speaker 1: be hard for me to stomach buying a rental property

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Speaker 1: right now, especially given I wouldn't do it some of

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Speaker 1: the dynamics and the fact, like, no, don't sign me

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Speaker 1: up for buying a rental property. What I'm gonna lose money?

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Speaker 2: And so basically, like it feels like Mike is trying

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Speaker 2: to get us to talk him into getting into real estate,

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Speaker 2: and I'm not going to do it, Mike, they can't

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Speaker 2: to us my arm, I still won't punch no, I'm

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Speaker 2: seriously because like he even highlighted the sort of aspects

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Speaker 2: that are going to make it more more of a

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Speaker 2: negative experience for him, and instead, what I want to

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Speaker 2: do is like one of the things Mike pointed out

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Speaker 2: is the fact that he is him and his wife

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Speaker 2: are are interested in financial independence, is which is when

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Speaker 2: you're investments are large enough that you can live off

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Speaker 2: of your investments as opposed to work. I think for

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Speaker 2: a lot of folks when they first find out about

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Speaker 2: financial independence, it can kind of become this all consuming projects. Yeah,

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Speaker 2: you get the tractor beam on the desk start and

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Speaker 2: you can't it's hard to escape it. Like you've taken

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Speaker 2: the red pill in the matrix and you know the truth,

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Speaker 2: and so now you're thinking, oh, everything else is just

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Speaker 2: an illusion. It's it's the warm, cozy security blanket that

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Speaker 2: you get with the blue pill. No Mike saying no

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Speaker 2: to the blue pill. He's like, Okay, I know what

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Speaker 2: I'm capable of, or I know what is capable once

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Speaker 2: you've invested enough money. But instead, and so, Mike, if

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Speaker 2: this doesn't apply to you, then just dismiss everything that

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Speaker 2: I'm saying here. But this was me, Like I am

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Speaker 2: confessing here that when I first learned about this, I

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Speaker 2: was consumed and pretty infatuated with the idea of becoming

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Speaker 2: financially independent.

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Speaker 1: But it's kind of hard not to because it does

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Speaker 1: alter the way you view the world.

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Speaker 2: To a degree. It's really helpful. But what I would

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Speaker 2: challenge you to do, Mike, is to think through some

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Speaker 2: other aspects of life that make life more robust and

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Speaker 2: enrich like, and that could be something as small as

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Speaker 2: just thinking through some hobbies that you enjoy, like, Okay,

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Speaker 2: how can I incorporate those into my life a little

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Speaker 2: bit more. But I also noticed that Mike said that

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Speaker 2: they aren't or that they don't have any kids, at

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Speaker 2: least not yet, which tells me that maybe this is

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Speaker 2: a goal of theirs. And so I would say, hey,

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Speaker 2: I want to hear you talking more about making that

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Speaker 2: a priority if that's something that you want to do,

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Speaker 2: because personally, I found that growing my family and having kids,

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Speaker 2: man like, that is like one of the biggest most

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Speaker 2: rewarding things in my entire life. Man, the joys of parenthood.

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Speaker 2: And oftentimes when you're like or we could get that

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Speaker 2: next promotion and then we could stock away this much

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Speaker 2: more at work, which leads to being able to attain

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Speaker 2: that magic number of being financially independent even more so. Well,

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Speaker 2: I just want you to not necessarily optimize from a

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Speaker 2: financial standpoint, and to expand your scope a little bit

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Speaker 2: and to look at some of the other things in life.

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Speaker 2: And the way I'm hearing you talk about real estate,

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Speaker 2: you're not thinking at all about what it is that

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Speaker 2: you want to spend your time doing it's about the

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Speaker 2: financial or the return on your investment. And you might see,

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Speaker 2: like I was just saying, you might see an outsize

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Speaker 2: return on your investment. But certainly if it's a not

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Speaker 2: something you want to do anyway, and b if investors

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Speaker 2: in your area are only counting on appreciation, well, man, personally,

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Speaker 2: I don't think it would be worth it.

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Speaker 1: Yeah, and so so much of how we answer this

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Speaker 1: question depends on the person asking it and how they're

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Speaker 1: asking it, Because Matt, there are some people who are

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Speaker 1: more inclined to invest in real estate. They're more just

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Speaker 1: naturally interested, and maybe their skill set leads to them

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Speaker 1: being better real estate investors. What Mike said was all

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Speaker 1: I see is the hard work and the high risks. Yes,

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Speaker 1: And when you see that, then I think taking on

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Speaker 1: a part time job to hope on some appreciation at

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Speaker 1: the end of the day, that's a bad idea. And

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Speaker 1: we talk about real estate, you and I try to

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Speaker 1: talk about it with open eyes because there are a

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Speaker 1: lot of people who talk about it as this passive

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Speaker 1: investment passive income, and the truth is it is more

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Speaker 1: like a part time job than investing in the stock market,

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Speaker 1: which you can do, especially blindholded with two hands tied

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Speaker 1: behind your back. It's something that doesn't really require all

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Speaker 1: that much dedicated And so if you have other interests

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Speaker 1: like growing your family or just I don't know, not

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Speaker 1: spending a lot of time managing real estate, then you

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Speaker 1: can do those things. Whereas real estate does change your

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Speaker 1: life to a certain degree. And I just think, really,

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Speaker 1: at the end of the day, for Mike, when it

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Speaker 1: comes down to it, if your heart isn't into investing

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Speaker 1: in real estate, I will encourage you to buy a

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Speaker 1: house in an effort to eke out higher returns when

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Speaker 1: you just don't have that innate desire. Like you if

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Speaker 1: you kind of have been following the space, you've read

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Speaker 1: a few books, and you're like, man, this is super

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Speaker 1: exciting to me. Yes, there are ways in which you

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Speaker 1: can make real estate makes sense. But if you're trying

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Speaker 1: to put the square peg in the round hole, don't

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Speaker 1: do it.

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Speaker 2: Yeah, man, that's right, Like you are speaking to the

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Speaker 2: activity of investing in real estate. But then even beyond that,

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Speaker 2: I still want to just touch on the phone, like

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Speaker 2: did he say that they aside from four one k

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Speaker 2: is a roth iras and even Hsa is that he's

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Speaker 2: also throwing I think he said, another four thousand dollars

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Speaker 2: into a brokerage, a taxable brokerage account. They are like,

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Speaker 2: really really getting after it, and he's saying that they're

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Speaker 2: not in a high cost of living area.

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Speaker 1: Either.

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Speaker 2: It's one thing if they're living in like the Bay

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Speaker 2: Area or they live in New York or something like that,

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Speaker 2: but it makes it sound like that they are just

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Speaker 2: banking all this money in a relatively at least average

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Speaker 2: cost of living area. So that's why I guess I

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Speaker 2: want Mike to think through some of the other aspects,

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Speaker 2: some of the other facets of life perhaps, But then

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Speaker 2: on top of that specifically addressing real estate here to diversify,

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Speaker 2: there are other ways to diversify your investments as well.

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Speaker 2: For instance, if you want that real estate exposure, but

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Speaker 2: without all that effort, you can invest in REITs real

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Speaker 2: estate investment trusts. I think having a small amount of

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Speaker 2: ate exposure, so I'll specifically name vanguards, which is v NQ,

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Speaker 2: that couldn't hurt. But we also don't think it's totally

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Speaker 2: crucial to you being able to stay diversified. I mean,

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Speaker 2: you could also invest in alternative investments. And maybe I

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Speaker 2: shouldn't even even mention that because we're not fans of

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Speaker 2: those due to the high fees. But like, even excluding

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Speaker 2: the fees, the returns are often worse on those alternatives.

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Speaker 1: As well, and those alternate investments have to beat their fees,

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Speaker 1: and their fees are really high, and guess what, they

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Speaker 1: don't even beat.

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Speaker 2: There occasionally, but like they can't do it consistently. And

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Speaker 2: that's why we love investing in widely diversified low cost

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Speaker 2: index funds. I think, when it boils down to it,

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Speaker 2: we think that being all in on these low cost

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Speaker 2: funds is totally the way to go, and it does

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Speaker 2: offer enough diversity to be invested in the American economy

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Speaker 2: at large, not to mention if you're considering some of

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Speaker 2: the different.

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Speaker 1: Global ETFs out there as well. Yeah, I'm glad you

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Speaker 1: mentioned being Q. I do think that is one of

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Speaker 1: the easiest ways to invest in a myriad of real

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Speaker 1: estate projects at an incredibly low cost and in a

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Speaker 1: way that's incredibly liquid, right, Whereas like a lot of

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Speaker 1: the alternative investments that you just highlighted, they're typically very

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Speaker 1: ill liquid, which means your money might be set aside

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Speaker 1: for years, not the high fees. Yes, but then oh, hey,

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Speaker 1: I want to get out of this investment. What's really

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Speaker 1: difficult to get your money back? Last thing, Mike, I'm

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Speaker 1: not sure if you own a primary home or not,

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Speaker 1: but that's also a way to own real estate and

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Speaker 1: to not have to be a landlord, to kind of

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Speaker 1: have at least a foot right into real estate as

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Speaker 1: a diversifier, and it can overtime act as a hedge

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Speaker 1: against inflation and a forced method of savings, which is

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Speaker 1: part of the reason that people who own a home

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Speaker 1: typically have a higher net worth in this country. It's

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Speaker 1: not because real estate is the best investment, but it's

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Speaker 1: because it's a forced method of savings leading to people's

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Speaker 1: increase net worth. But taking money, I think away from

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Speaker 1: investing in stocks at the rate you're doing in order

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Speaker 1: to amassive down payment and buy a house that you

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Speaker 1: rent out just doesn't seem like a brilliant move to me.

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Speaker 1: Maybe the primary home you buy could have some sort

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Speaker 1: of rental component to it which would to help you

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Speaker 1: dip your toes in the water without buying something that

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Speaker 1: doesn't make sense from a work or from an ROI perspective.

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Speaker 1: But we just truly don't see the need for you

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Speaker 1: to make any changes to your strategy given your age,

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Speaker 1: your goals, and your interests. For people out there who

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Speaker 1: are listening again, Matt, who say, I really am curious

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Speaker 1: about real estate, and I feel like I have some

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Speaker 1: special skill, some fix it skills, some you know, I'm

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Speaker 1: a real estate agent, whatever it may be, that funnel

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Speaker 1: you kind of further towards the real estate orbit.

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Speaker 2: Yeah, you got a real estate superpower, like you have

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Speaker 2: an unfair advantage in one.

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Speaker 1: Of those ways. Great, take advantage of that superpower and

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Speaker 1: lean into real estate and slowly but surely start to

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Speaker 1: acquire properties. It's harder than it was eight ten years ago,

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Speaker 1: but it doesn't mean it's impossible. But I think for

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Speaker 1: somebody like Mike who's already not inclined in that direction,

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Speaker 1: it just doesn't make any sense totally.

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Speaker 2: So, Mike, we hope that those are some of the

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Speaker 2: answers that you needed to hear. And speaking of real estate,

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Speaker 2: we're gonna hear from a listener who's looking to save

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Speaker 2: up for a down payments. We'll get to that question

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Speaker 2: and more right after this.

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Speaker 1: All right, Matt, we're back. Let's get to a question now,

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Speaker 1: about man. Sadly one of the worst purchases you can make.

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Speaker 3: Hello, how to money? Name is Tony in San Diego.

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Speaker 3: So I have an RV, bought it in May twenty

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Speaker 3: twenty four, but things changed on my life and I

402
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Speaker 3: was able to buy a home. Don't need the RV.

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Speaker 3: Trying to determine whether I should sell it in public,

404
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Speaker 3: like on the street, or return it back to the dealership,

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Speaker 3: at which point they will have me pay the remainder

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Speaker 3: of what's left over, which is about thirty K. They'd

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Speaker 3: like that money in about two weeks once it's sold,

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Speaker 3: and I guess i'd have to get a loan to

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Speaker 3: cover that remaining amount. Just not sure what to do.

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Speaker 1: Thanks, hm, Joel.

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Speaker 2: I feel like a lot of what we're gonna say

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Speaker 2: to Tony is like bad news, right.

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Speaker 1: But so before we gets all that, I'll shoot the messenger. Yeah.

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Speaker 2: I want to highlight the fact that what I like

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Speaker 2: about what Tony has done here is that she's taken

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Speaker 2: a more unconventional approach to solving one of the biggest

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Speaker 2: expences that we all experienced every single month, which is housing. Yeah,

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Speaker 2: because she the way she said it, it sounded like

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Speaker 2: she considered or she maybe lived for a period of

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Speaker 2: time in the RV, because then she said, but now

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Speaker 2: I have a house, so I don't need the RV anymore.

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Speaker 2: I like that. I like that kind of outside of

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Speaker 2: the box thinking. It makes me think of a friend

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Speaker 2: I had in college.

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Speaker 1: Who he's like a tiny house movie. He yeah, yeah, yeah.

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Speaker 2: He lived in his truck. He had a pickup truck

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Speaker 2: with the bed cover on it, you know that like

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Speaker 2: kind of turns your truck into an suv.

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Speaker 1: And he had all of his stuff.

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Speaker 2: In the back of his truck and he created a

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Speaker 2: little sleeping area and he literally, for at least one semester,

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Speaker 2: if not an entire year, slept in his truck. He

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Speaker 2: was on the meal plan, so that's how that's how

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Speaker 2: he ate. All his friends were living in the dorm

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Speaker 2: of course, and so he would just get his little

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Speaker 2: shower tote, his shower kit. He would go and shower

437
00:19:49,760 --> 00:19:51,960
Speaker 2: in the dorms for free. When guy really cold or

438
00:19:52,000 --> 00:19:54,920
Speaker 2: really hot, he had an amazing sleeping bag and he

439
00:19:55,040 --> 00:19:57,320
Speaker 2: is like a sleeping pad, so he was insulated up

440
00:19:57,359 --> 00:19:59,760
Speaker 2: off of the bed and he was out there, dude,

441
00:19:59,760 --> 00:20:02,520
Speaker 2: when it was cold, like cold cold.

442
00:20:02,960 --> 00:20:05,480
Speaker 1: So is this frugal or cheap. Well, my buddy, James,

443
00:20:05,680 --> 00:20:07,320
Speaker 1: when you're that age, I think you can endure a

444
00:20:07,320 --> 00:20:08,639
Speaker 1: lot more than when you're our age.

445
00:20:08,640 --> 00:20:10,600
Speaker 2: Here's the thing. He wasn't like a total cheap skate

446
00:20:10,840 --> 00:20:13,439
Speaker 2: where he was like mooching off of everybody, because if

447
00:20:13,440 --> 00:20:15,359
Speaker 2: we would go out, like to the coffee shop, he

448
00:20:15,359 --> 00:20:18,199
Speaker 2: would buy coffees for everybody, like he knew that that

449
00:20:18,280 --> 00:20:20,359
Speaker 2: everyone like. That is how he was able to get

450
00:20:20,400 --> 00:20:24,159
Speaker 2: clean at least, well, he's always like hanging out in

451
00:20:24,200 --> 00:20:25,080
Speaker 2: everyone's living rooms.

452
00:20:25,240 --> 00:20:27,240
Speaker 1: You just get a gym membership right for fifteen twenty

453
00:20:27,240 --> 00:20:28,760
Speaker 1: bucks a month, and that's a you could have done

454
00:20:28,800 --> 00:20:30,640
Speaker 1: that free shower, could have done that thing. But all

455
00:20:30,680 --> 00:20:34,239
Speaker 1: I had to say, I think I appreciate Tony and just

456
00:20:34,280 --> 00:20:38,000
Speaker 1: maybe how she attempted to solve this problem. But I

457
00:20:38,040 --> 00:20:41,080
Speaker 1: guess getting an RV, you're not taking the absolute cheapest

458
00:20:41,160 --> 00:20:43,720
Speaker 1: path towards finding a way to solve this problem is

459
00:20:43,760 --> 00:20:45,880
Speaker 1: maybe a little bit more of a lifestyle play, right,

460
00:20:45,920 --> 00:20:48,080
Speaker 1: Like maybe after the pandemic when everybody was on the road,

461
00:20:48,080 --> 00:20:50,800
Speaker 1: everyone's doing the van life thing, and she thought, oh

462
00:20:50,840 --> 00:20:53,400
Speaker 1: I could maybe I could do that, and then she realizes,

463
00:20:53,840 --> 00:20:56,320
Speaker 1: actually this isn't quite for me. And if you're buying

464
00:20:56,320 --> 00:20:59,439
Speaker 1: an RV to solve your housing situation, I think that

465
00:20:59,520 --> 00:21:01,960
Speaker 1: could be a really smart decision. And maybe that's what

466
00:21:01,960 --> 00:21:03,760
Speaker 1: Tony was initially doing. And now she bought this house,

467
00:21:03,760 --> 00:21:07,080
Speaker 1: which congratulations on buying a home, Tony. We hope it's

468
00:21:07,160 --> 00:21:09,400
Speaker 1: great and that you live there a long time. But

469
00:21:09,480 --> 00:21:12,719
Speaker 1: I think most people buy rbs to as like an

470
00:21:12,720 --> 00:21:15,240
Speaker 1: excursion vehicle of sorts, right to go see the country,

471
00:21:15,359 --> 00:21:18,040
Speaker 1: just to have fun, which is also cool, I guess

472
00:21:18,119 --> 00:21:21,080
Speaker 1: if it's well planned and well considered and you know

473
00:21:21,080 --> 00:21:25,640
Speaker 1: what you're doing. But RVs are typically incredibly expensive. And

474
00:21:25,720 --> 00:21:28,359
Speaker 1: it's one of those decisions, Matt, that I see time

475
00:21:28,480 --> 00:21:31,640
Speaker 1: and time again, people one year, eighteen months, two years

476
00:21:31,640 --> 00:21:34,200
Speaker 1: after the fact saying, yeah, this wasn't what I thought

477
00:21:34,200 --> 00:21:36,520
Speaker 1: it was going to be. And actually one I get,

478
00:21:37,000 --> 00:21:39,240
Speaker 1: I'm scared to drive this thing. It's forty feet long

479
00:21:39,320 --> 00:21:42,400
Speaker 1: or whatever it is, and I don't like living on

480
00:21:42,480 --> 00:21:46,480
Speaker 1: the road. And so you find people who know the

481
00:21:46,520 --> 00:21:49,840
Speaker 1: depreciation period it can the depreciation could be severe in

482
00:21:49,880 --> 00:21:52,560
Speaker 1: just a short year or two. And so even though

483
00:21:52,600 --> 00:21:55,080
Speaker 1: people have owned their RV for not much time, just

484
00:21:55,080 --> 00:21:57,479
Speaker 1: like Tony here and it sounds like she knows this.

485
00:21:57,880 --> 00:22:00,200
Speaker 1: You could be talking about losing many thousands of dollars

486
00:22:00,240 --> 00:22:02,920
Speaker 1: or tens of thousands of dollars, even if you haven't

487
00:22:02,960 --> 00:22:04,840
Speaker 1: put many miles on it. And so that's the treacherous

488
00:22:04,880 --> 00:22:07,159
Speaker 1: downside of rbs is that people go into it with

489
00:22:07,200 --> 00:22:09,720
Speaker 1: these high hopes, these ideals of living on the road.

490
00:22:09,760 --> 00:22:12,159
Speaker 1: Maybe they read some Jack carrowac or something like that,

491
00:22:12,200 --> 00:22:13,639
Speaker 1: Matt and they're like, this is gonna be grand, and

492
00:22:13,640 --> 00:22:15,560
Speaker 1: I'm going to go see all the national parks. And

493
00:22:15,600 --> 00:22:17,680
Speaker 1: then they realize, oh wait, man, I missed my community,

494
00:22:17,680 --> 00:22:19,520
Speaker 1: I missed my family, I miss my friends, and the

495
00:22:19,600 --> 00:22:21,480
Speaker 1: RV lifestyle, it turns out, is not for me.

496
00:22:21,680 --> 00:22:23,480
Speaker 2: It's not quite even though it kind of solves the

497
00:22:23,520 --> 00:22:25,280
Speaker 2: same problem. It's not the same as real estate, where

498
00:22:25,280 --> 00:22:28,200
Speaker 2: you have one that's pretty much guaranteed to depreciate versus

499
00:22:28,280 --> 00:22:31,639
Speaker 2: another one which is pretty much guaranteed to appreciate. But

500
00:22:31,760 --> 00:22:34,120
Speaker 2: she's asking whether or not she should sell it herself

501
00:22:34,240 --> 00:22:36,240
Speaker 2: or she should just turn it over to the dealership.

502
00:22:36,760 --> 00:22:38,800
Speaker 2: And I will say none of these two options are

503
00:22:39,040 --> 00:22:40,040
Speaker 2: particularly stellar.

504
00:22:40,520 --> 00:22:40,919
Speaker 1: I would be.

505
00:22:40,920 --> 00:22:43,239
Speaker 2: Curious to know how much she owes and how much

506
00:22:43,320 --> 00:22:45,840
Speaker 2: the RV is worth because like it sounds like there's

507
00:22:45,880 --> 00:22:48,920
Speaker 2: a like a roughly thirty thousand dollars gap, which again,

508
00:22:49,119 --> 00:22:52,280
Speaker 2: this is a tough dollar amount to stomach. But I

509
00:22:52,320 --> 00:22:55,240
Speaker 2: would advise you to look up the value of your

510
00:22:55,320 --> 00:22:58,719
Speaker 2: particular make and model up on a site like rvtrader

511
00:22:58,760 --> 00:23:02,120
Speaker 2: dot com. There are ways to get like professional appraisals

512
00:23:02,160 --> 00:23:05,000
Speaker 2: as well, but you're just looking for a ballpark value here,

513
00:23:05,480 --> 00:23:07,520
Speaker 2: And the goal, of course, would be to close that

514
00:23:07,560 --> 00:23:10,600
Speaker 2: thirty thousand dollars gap as much as possible by selling

515
00:23:10,640 --> 00:23:12,920
Speaker 2: it yourself, because I think if you let the dealership

516
00:23:12,960 --> 00:23:15,159
Speaker 2: sell it for you, it's going to end up costing

517
00:23:15,160 --> 00:23:17,240
Speaker 2: you a lot more money at the end of the day.

518
00:23:17,320 --> 00:23:19,200
Speaker 2: And that's I think going to be the more expedients,

519
00:23:20,440 --> 00:23:22,679
Speaker 2: the more let's just get this over with sort of

520
00:23:22,720 --> 00:23:25,000
Speaker 2: approach to where you're not sort of faced with maybe

521
00:23:25,000 --> 00:23:25,960
Speaker 2: this decision that you.

522
00:23:25,960 --> 00:23:27,359
Speaker 1: Now regret at this point.

523
00:23:27,359 --> 00:23:30,040
Speaker 2: But I do think putting in a little bit of

524
00:23:30,359 --> 00:23:33,160
Speaker 2: sweat equity and looking to sell it yourself might be

525
00:23:33,240 --> 00:23:34,960
Speaker 2: more the path that we would recommend.

526
00:23:34,600 --> 00:23:36,800
Speaker 1: One hundred percent. I mean, I think you're right, the

527
00:23:37,560 --> 00:23:39,800
Speaker 1: easy path here is going to cost you more money,

528
00:23:40,000 --> 00:23:41,879
Speaker 1: and so at the end of the day, which is

529
00:23:41,920 --> 00:23:45,040
Speaker 1: what you want to avoid. So we'd suggest taking great picks,

530
00:23:45,200 --> 00:23:48,360
Speaker 1: writing a good description, or to sell your RV yourself.

531
00:23:48,720 --> 00:23:49,960
Speaker 1: You might even want to pay a little bit of

532
00:23:50,000 --> 00:23:51,880
Speaker 1: money to get it listed on some of the more

533
00:23:51,880 --> 00:23:55,439
Speaker 1: popular RB selling websites. That's going to net you the

534
00:23:55,440 --> 00:23:57,919
Speaker 1: biggest sale price, which is ultimately what you're looking to

535
00:23:57,920 --> 00:24:00,359
Speaker 1: do to minimize the amount of money that you're losing.

536
00:24:00,359 --> 00:24:03,200
Speaker 1: And just like selling a car, there's a substantial gap

537
00:24:03,280 --> 00:24:05,439
Speaker 1: in what you make selling it yourself versus what you

538
00:24:05,480 --> 00:24:07,600
Speaker 1: get trading in. When you look at Kelly Bluebook dot

539
00:24:07,600 --> 00:24:09,479
Speaker 1: com for instance, and you're trying to figure out car

540
00:24:09,520 --> 00:24:11,760
Speaker 1: value math, they give you a car value selling it

541
00:24:11,880 --> 00:24:14,199
Speaker 1: used in certain conditions, and then trade in value, and

542
00:24:14,280 --> 00:24:16,080
Speaker 1: there's a reason the trading value is less.

543
00:24:16,160 --> 00:24:18,119
Speaker 2: They're not even trying to hide it, no, it's just

544
00:24:18,240 --> 00:24:20,520
Speaker 2: out there the fact that you typically are going to

545
00:24:20,600 --> 00:24:21,600
Speaker 2: sell it for much more.

546
00:24:21,680 --> 00:24:23,160
Speaker 1: Where you to sell it yourself, you hit the easy

547
00:24:23,200 --> 00:24:25,440
Speaker 1: button and guess what, you get a certain amount of

548
00:24:25,480 --> 00:24:28,439
Speaker 1: money back. You put in a little more legwork and

549
00:24:28,480 --> 00:24:30,159
Speaker 1: you're going to get a good bit more back in

550
00:24:30,200 --> 00:24:32,679
Speaker 1: your hands. And so either way you're going to have

551
00:24:32,680 --> 00:24:34,520
Speaker 1: to come up with a way to borrow money to

552
00:24:34,560 --> 00:24:36,320
Speaker 1: pay for the difference in what you owe and what

553
00:24:36,359 --> 00:24:39,120
Speaker 1: the RV is worth. If you hand the RV back

554
00:24:39,119 --> 00:24:41,159
Speaker 1: to the dealer, though your credit is likely to be

555
00:24:41,200 --> 00:24:44,720
Speaker 1: negatively impacted. That's going to affect every other realm of

556
00:24:44,760 --> 00:24:47,520
Speaker 1: your finances for years to come. So I guess that's

557
00:24:47,520 --> 00:24:49,720
Speaker 1: what we want to avoid, is you come out even

558
00:24:49,840 --> 00:24:52,440
Speaker 1: worse on the financial side of the equation and also

559
00:24:52,560 --> 00:24:55,800
Speaker 1: having your credit smacked around in the same time. That's true, Yeah,

560
00:24:55,840 --> 00:24:56,600
Speaker 1: but I like what you're saying.

561
00:24:56,760 --> 00:25:00,160
Speaker 2: Essentially, you're saying to create this beautiful listing, right, And

562
00:25:00,200 --> 00:25:03,160
Speaker 2: I think another I think there's an emotional component too,

563
00:25:03,200 --> 00:25:04,960
Speaker 2: of just turning it into the dealership to where you

564
00:25:05,000 --> 00:25:07,440
Speaker 2: don't have to be done with it again. You don't

565
00:25:07,480 --> 00:25:09,400
Speaker 2: want to see it anymore because you're just sick of it.

566
00:25:09,440 --> 00:25:11,639
Speaker 2: And I think by like making yourself see it a

567
00:25:11,640 --> 00:25:14,760
Speaker 2: little bit, there's like there's a change you would internalize

568
00:25:14,800 --> 00:25:17,480
Speaker 2: the positive lessons than the takeaways from this a little

569
00:25:17,520 --> 00:25:19,560
Speaker 2: bit more. Were you to then just say, Okay, I'm

570
00:25:20,200 --> 00:25:22,960
Speaker 2: I'm just gonna pay whatever it takes. Something else I

571
00:25:22,960 --> 00:25:24,680
Speaker 2: think that's worth considering is renting it out.

572
00:25:25,160 --> 00:25:25,960
Speaker 1: You've got this RV.

573
00:25:26,200 --> 00:25:28,359
Speaker 2: I don't know. Can you sort of turn it on

574
00:25:28,400 --> 00:25:30,080
Speaker 2: its head a little bit and see this maybe as

575
00:25:30,119 --> 00:25:33,919
Speaker 2: an asset as opposed to a liability outdoorsy, this is

576
00:25:33,920 --> 00:25:36,400
Speaker 2: a cool site where folks can rent out their RVs,

577
00:25:37,320 --> 00:25:40,399
Speaker 2: and I think it might be worth browsing around. Look like,

578
00:25:40,440 --> 00:25:42,280
Speaker 2: peruse a little bit, see how much you could potentially

579
00:25:42,320 --> 00:25:45,440
Speaker 2: make with an RV given where you currently live.

580
00:25:45,800 --> 00:25:46,560
Speaker 1: Because if you're.

581
00:25:46,400 --> 00:25:49,600
Speaker 2: Able to turn your RV from a cash drag into

582
00:25:49,720 --> 00:25:52,480
Speaker 2: a monthly net positive, well you might be able to

583
00:25:52,480 --> 00:25:55,560
Speaker 2: avoid your fate of selling that thing out a substantial loss.

584
00:25:55,800 --> 00:25:58,280
Speaker 2: Either it becomes a side hustle that makes you a

585
00:25:58,320 --> 00:26:00,840
Speaker 2: little bit of money every single month, or it at

586
00:26:00,920 --> 00:26:03,320
Speaker 2: least allows you to hold onto it for longer as

587
00:26:03,359 --> 00:26:05,919
Speaker 2: you continue to pay off that balance, so that you

588
00:26:05,920 --> 00:26:08,440
Speaker 2: don't take a thirty thousand dollars bath that you can't

589
00:26:08,440 --> 00:26:11,640
Speaker 2: afford all at once. I think it's at least worth considering.

590
00:26:11,640 --> 00:26:13,240
Speaker 2: And Joel, this totally reminds me of one of the

591
00:26:13,280 --> 00:26:16,080
Speaker 2: original Town of Money episode or back in the day

592
00:26:16,080 --> 00:26:18,880
Speaker 2: it was poor out poor but was it like episode

593
00:26:18,920 --> 00:26:21,159
Speaker 2: two or three or whatever? But like you and Emily

594
00:26:21,160 --> 00:26:24,200
Speaker 2: were considering getting an airstream, right, that you're gonna put

595
00:26:24,200 --> 00:26:28,960
Speaker 2: in your backyard and you're gonna is gonna be super cute. Yeah,

596
00:26:29,080 --> 00:26:30,120
Speaker 2: li's that thing on Airbnb.

597
00:26:30,320 --> 00:26:32,359
Speaker 1: We have a friend who's done exactly that, and he

598
00:26:32,440 --> 00:26:35,080
Speaker 1: has crushed with his area. Like I think about how

599
00:26:35,119 --> 00:26:37,240
Speaker 1: much he spent on that and what he's turned it into.

600
00:26:37,280 --> 00:26:39,680
Speaker 1: He's turned it into a like essentially literal gold mine

601
00:26:39,720 --> 00:26:42,040
Speaker 1: that it's in his backyard, super cute, and the value

602
00:26:42,040 --> 00:26:44,840
Speaker 1: has not really declined much, and yet he has continued

603
00:26:44,840 --> 00:26:47,480
Speaker 1: to make money on it month after month after month.

604
00:26:47,520 --> 00:26:49,200
Speaker 2: And yeah, I went with you, took a picture of

605
00:26:49,240 --> 00:26:53,160
Speaker 2: you sitting in it and everything, like very seriously considering

606
00:26:53,160 --> 00:26:54,960
Speaker 2: by that thing and this you're right, And she's already

607
00:26:54,960 --> 00:26:57,520
Speaker 2: got it ranted. Maybe it's not as cute as like

608
00:26:57,560 --> 00:27:00,840
Speaker 2: a vintage airstream or anything like that. She says, RV,

609
00:27:00,920 --> 00:27:02,960
Speaker 2: so I picture there's got to be brown or it's

610
00:27:02,960 --> 00:27:04,240
Speaker 2: got to be tanned with brown highlights.

611
00:27:05,400 --> 00:27:07,119
Speaker 1: Well, yeah, and if you might not go back in

612
00:27:07,160 --> 00:27:09,000
Speaker 1: time and make this decision to buy this RV for

613
00:27:09,040 --> 00:27:11,000
Speaker 1: this purpose, but now that you have it, can you

614
00:27:11,040 --> 00:27:13,119
Speaker 1: make lemonade out of elements? And if you do have

615
00:27:13,160 --> 00:27:15,000
Speaker 1: to take on additional debt. Let's say to cover the

616
00:27:15,040 --> 00:27:17,840
Speaker 1: gap in what you owe and what it's worth, we

617
00:27:17,880 --> 00:27:19,760
Speaker 1: would say, go to your local credit union to see

618
00:27:19,760 --> 00:27:22,600
Speaker 1: what they offer. You almost always get better terms than

619
00:27:22,640 --> 00:27:25,480
Speaker 1: you would at the bank. I'd also make a massive goal, Matt,

620
00:27:25,520 --> 00:27:27,240
Speaker 1: if I was tony, to try and pay off that

621
00:27:27,320 --> 00:27:30,040
Speaker 1: loan in short order, like as fast as possible. Get

622
00:27:30,080 --> 00:27:32,359
Speaker 1: a side hustle to bring in some extra income. Stick

623
00:27:32,400 --> 00:27:34,119
Speaker 1: to a bare bones budget for a few months to

624
00:27:34,119 --> 00:27:36,159
Speaker 1: accelerate your cash flow. We have a whole episode on

625
00:27:36,240 --> 00:27:39,480
Speaker 1: creating a barebones budget, but it's essentially like an all

626
00:27:39,480 --> 00:27:41,920
Speaker 1: hands on deck whatever it takes to eradicate this debt

627
00:27:42,240 --> 00:27:46,199
Speaker 1: sort of scenario. We all make financial mistakes, right, but

628
00:27:46,240 --> 00:27:48,720
Speaker 1: we want you to recover from this as quickly as possible,

629
00:27:48,760 --> 00:27:51,160
Speaker 1: and so to look at kind of straight in the face,

630
00:27:51,200 --> 00:27:54,399
Speaker 1: like Matt was saying, get the best terms possible for

631
00:27:54,480 --> 00:27:57,120
Speaker 1: selling this so that you minimize your loss, and then

632
00:27:57,240 --> 00:28:01,360
Speaker 1: to attempt to improve your financial situation as quickly as

633
00:28:01,400 --> 00:28:05,600
Speaker 1: you can via increased income, reduce spending or both at

634
00:28:05,600 --> 00:28:06,160
Speaker 1: the same time.

635
00:28:06,400 --> 00:28:07,880
Speaker 2: Yeah, but then on top of that, if you think

636
00:28:07,880 --> 00:28:09,000
Speaker 2: that this is something you want to do from a

637
00:28:09,000 --> 00:28:12,760
Speaker 2: lifestyle samepoint, consider just renting the dang RV before going

638
00:28:12,800 --> 00:28:16,080
Speaker 2: all in, and certainly before financing it, but even before

639
00:28:16,359 --> 00:28:19,119
Speaker 2: paying for one in cash, even before buying a used

640
00:28:19,440 --> 00:28:21,719
Speaker 2: RV in cash. Just go out there and rent it

641
00:28:21,720 --> 00:28:23,360
Speaker 2: for a couple of weeks. Be on the other side

642
00:28:23,400 --> 00:28:24,000
Speaker 2: of outdoors y.

643
00:28:24,080 --> 00:28:25,520
Speaker 1: Yes, yes, exactly. There's a lot.

644
00:28:25,560 --> 00:28:27,480
Speaker 2: It's like time It's almost like time shares, where there's

645
00:28:27,520 --> 00:28:30,399
Speaker 2: like so many people are interested in unloading theirs. But

646
00:28:30,440 --> 00:28:33,440
Speaker 2: I think trying it outs, trying out the RV lifestyle,

647
00:28:33,560 --> 00:28:36,920
Speaker 2: makes a ton of sense before going all in and

648
00:28:37,000 --> 00:28:38,960
Speaker 2: dropping a whole lot of your money on one of

649
00:28:38,960 --> 00:28:39,360
Speaker 2: these things.

650
00:28:39,400 --> 00:28:41,360
Speaker 1: All right, man, let's get to another question. This one

651
00:28:41,800 --> 00:28:45,600
Speaker 1: is specifically about buying a home and kind of what

652
00:28:45,680 --> 00:28:47,239
Speaker 1: to do in advance of that.

653
00:28:47,680 --> 00:28:48,480
Speaker 2: Hi, Joel and Matt.

654
00:28:48,640 --> 00:28:51,440
Speaker 5: My name is Ophelia and I'm from Los Angeles. I

655
00:28:51,480 --> 00:28:53,640
Speaker 5: love your podcast and I listen to it every day

656
00:28:53,680 --> 00:28:56,720
Speaker 5: on my commute. I'm planning to sell my condo in

657
00:28:56,760 --> 00:28:59,320
Speaker 5: two years, rent for a while, and stave up to

658
00:28:59,320 --> 00:29:02,200
Speaker 5: buy a new home. Right now, I'm holding all of

659
00:29:02,200 --> 00:29:04,560
Speaker 5: my savings in a high guilt savings account. But I'm

660
00:29:04,560 --> 00:29:06,680
Speaker 5: wondering if there's a better place to park my cash

661
00:29:06,720 --> 00:29:09,640
Speaker 5: in the short term to maximize growth. What would you

662
00:29:09,680 --> 00:29:12,800
Speaker 5: say is the best strategy for the situation and is

663
00:29:12,840 --> 00:29:14,880
Speaker 5: there anything else you think I should keep in mind?

664
00:29:15,320 --> 00:29:18,720
Speaker 2: Thank you, Oh, Ophelia said La. I hope she and

665
00:29:18,840 --> 00:29:22,640
Speaker 2: her family and friends in her neighborhood are safe have

666
00:29:22,680 --> 00:29:24,240
Speaker 2: been safe from all the fires on the rail I

667
00:29:24,280 --> 00:29:26,600
Speaker 2: can't imagine living out there on the West coast.

668
00:29:26,640 --> 00:29:26,760
Speaker 3: Oh.

669
00:29:26,760 --> 00:29:29,040
Speaker 1: We've been keeping in touch with our friends who live

670
00:29:29,080 --> 00:29:32,200
Speaker 1: out there, and it's just precarious. And then also just man,

671
00:29:32,360 --> 00:29:36,280
Speaker 1: the images are harrowing. Yeah, real toughest stomach. I hope

672
00:29:36,280 --> 00:29:39,600
Speaker 1: you're doing doing well, Ophelia. It's also fascinating, Matt that

673
00:29:39,960 --> 00:29:42,600
Speaker 1: Ophelia is going to sell her condo and then rent

674
00:29:42,920 --> 00:29:44,840
Speaker 1: and then buy a home. I'm cool with that. I

675
00:29:45,200 --> 00:29:47,680
Speaker 1: like it. Yeah, it's not a bad strategy. It's actually

676
00:29:47,680 --> 00:29:49,560
Speaker 1: not something many people are willing to do to kind

677
00:29:49,560 --> 00:29:52,120
Speaker 1: of go back to renting for a time to kind

678
00:29:52,120 --> 00:29:55,160
Speaker 1: of get their stuff together, to be able to have

679
00:29:55,240 --> 00:29:57,240
Speaker 1: that cash on hand to make a really strong offer

680
00:29:57,280 --> 00:29:59,040
Speaker 1: when the time does come and they're ready to buy.

681
00:29:59,280 --> 00:30:01,920
Speaker 1: But I think of that as a solid strategy that

682
00:30:01,920 --> 00:30:03,400
Speaker 1: maybe more people should consider.

683
00:30:03,520 --> 00:30:03,880
Speaker 2: Sure.

684
00:30:04,040 --> 00:30:05,800
Speaker 1: Okay, so before we get to the heart of a question.

685
00:30:05,880 --> 00:30:08,880
Speaker 2: Let's just touch on renting versus buying, because like the

686
00:30:08,960 --> 00:30:12,080
Speaker 2: economic trade offs of one versus the other are in

687
00:30:12,200 --> 00:30:15,880
Speaker 2: constant trade off mode, because in sometimes and places, in

688
00:30:15,920 --> 00:30:18,560
Speaker 2: markets like buying is going to be a slam dunk decision,

689
00:30:19,200 --> 00:30:22,600
Speaker 2: like despite the fear of buying twenty ten to twenty thirteen,

690
00:30:22,680 --> 00:30:28,200
Speaker 2: that provided enormous buying opportunities across essentially all of America.

691
00:30:27,680 --> 00:30:29,480
Speaker 1: And everybody who wants to own a home now says,

692
00:30:29,640 --> 00:30:31,280
Speaker 1: can I please just take a time portal back to

693
00:30:31,360 --> 00:30:33,400
Speaker 1: twenty eleven prices? Yeah, if only we could.

694
00:30:33,440 --> 00:30:36,160
Speaker 2: But then at other times, at other locations, it's almost

695
00:30:36,160 --> 00:30:38,760
Speaker 2: impossible to come out ahead as a buyer. And that's

696
00:30:38,760 --> 00:30:41,520
Speaker 2: obviously not the only thing that you're taking into consideration

697
00:30:41,560 --> 00:30:44,880
Speaker 2: when buying a home. It's not a purely economic decision,

698
00:30:44,880 --> 00:30:47,600
Speaker 2: but it is important to weigh your desires of home

699
00:30:47,640 --> 00:30:50,840
Speaker 2: ownership with the economic reality of what is going.

700
00:30:50,760 --> 00:30:53,600
Speaker 1: To cost you. And that is especially true.

701
00:30:53,800 --> 00:30:57,360
Speaker 2: Living out there in southern California, where the rent versus

702
00:30:57,400 --> 00:31:00,800
Speaker 2: buy gap is massive. But yeah, I like what you

703
00:31:00,840 --> 00:31:04,600
Speaker 2: said too about her, just her willingness to rent a

704
00:31:04,640 --> 00:31:06,840
Speaker 2: place as she's saving up. It tells me that.

705
00:31:06,800 --> 00:31:09,280
Speaker 1: This is a serious goal of hers, which.

706
00:31:09,200 --> 00:31:12,040
Speaker 2: I am one hundred percent behind. But one of the

707
00:31:12,120 --> 00:31:15,160
Speaker 2: things that she didn't mention were other investments that she

708
00:31:15,240 --> 00:31:19,160
Speaker 2: might have or that she might not have. And I

709
00:31:19,320 --> 00:31:20,760
Speaker 2: even though I want this to be a goal that

710
00:31:20,800 --> 00:31:22,800
Speaker 2: you achieve, like I love the fact that you are

711
00:31:22,880 --> 00:31:25,520
Speaker 2: scaling back, let's hope you're scimming back at least like

712
00:31:25,600 --> 00:31:28,840
Speaker 2: rent a place that's kind of run down. Certainly that

713
00:31:28,840 --> 00:31:30,480
Speaker 2: you feel safe in.

714
00:31:30,360 --> 00:31:31,680
Speaker 1: Ophelia, is what Matt said.

715
00:31:31,760 --> 00:31:33,640
Speaker 2: But like, get after that goal of home ownership. I

716
00:31:33,640 --> 00:31:36,920
Speaker 2: am one hundred percent for that. That being said, don't

717
00:31:37,040 --> 00:31:39,840
Speaker 2: let that keep you from investing at least a bare minimum.

718
00:31:39,880 --> 00:31:41,360
Speaker 2: So if that means if you have a four to

719
00:31:41,400 --> 00:31:43,920
Speaker 2: one k, which you commute and that's when you listen

720
00:31:43,920 --> 00:31:46,840
Speaker 2: to the show, so you're employed, that's great. Hopefully you

721
00:31:46,880 --> 00:31:49,440
Speaker 2: have a match that your employer offers with your four

722
00:31:49,440 --> 00:31:52,120
Speaker 2: to one k if so at least get that employer match.

723
00:31:52,440 --> 00:31:53,800
Speaker 2: If you don't have a four to one k, at

724
00:31:53,880 --> 00:31:58,240
Speaker 2: least invest within a roth Ira Because I don't want future.

725
00:31:58,240 --> 00:32:01,320
Speaker 2: I don't want tomorrow Ophelia to be curse seeing yesterday Ophelia.

726
00:32:01,400 --> 00:32:04,360
Speaker 2: Because all that you were focused on in this portion

727
00:32:04,440 --> 00:32:08,960
Speaker 2: of your life was getting this property, and unfortunately it's limited.

728
00:32:08,960 --> 00:32:11,200
Speaker 2: Some of the options that you now have there far

729
00:32:11,240 --> 00:32:12,000
Speaker 2: off into the future.

730
00:32:12,120 --> 00:32:16,160
Speaker 1: Yeah, it feels nice to buy the property of your dreams,

731
00:32:16,800 --> 00:32:19,479
Speaker 1: or at least, you know, get into a single family home.

732
00:32:19,600 --> 00:32:23,640
Speaker 1: Especially in south southern California, that is a really expensive prospect.

733
00:32:23,800 --> 00:32:26,160
Speaker 1: And I remember visiting there me hanging out with a friend.

734
00:32:26,160 --> 00:32:29,640
Speaker 1: Though the priceest crepency between renting and buying on his

735
00:32:29,720 --> 00:32:32,960
Speaker 1: block was astounding to me. I mean, what you would

736
00:32:33,000 --> 00:32:37,000
Speaker 1: pay in every month for rent was it paled in

737
00:32:37,040 --> 00:32:39,880
Speaker 1: comparison to buying the same property. And so you just

738
00:32:39,960 --> 00:32:43,040
Speaker 1: have to take that into consideration. And maybe Ophelia starts

739
00:32:43,040 --> 00:32:44,800
Speaker 1: renting again and she says, wait a second, this is cheap,

740
00:32:44,840 --> 00:32:46,800
Speaker 1: and I have so much money on hand that I

741
00:32:46,800 --> 00:32:49,400
Speaker 1: can invest a ton and you know, ramp up my

742
00:32:49,880 --> 00:32:52,120
Speaker 1: trip to financial independence. I can be there in a

743
00:32:52,200 --> 00:32:54,880
Speaker 1: decade versus thirty years. I miss out on that dream

744
00:32:54,880 --> 00:32:57,480
Speaker 1: of home ownership, but I think it, particularly in high

745
00:32:57,480 --> 00:32:59,680
Speaker 1: cost of living areas, you have to count the cost

746
00:33:00,040 --> 00:33:02,880
Speaker 1: before you jump in and say home ownership is for me.

747
00:33:03,280 --> 00:33:06,200
Speaker 1: Maybe it is, maybe it isn't, But I guess it's

748
00:33:06,280 --> 00:33:08,200
Speaker 1: just you have to take a lot of things into

749
00:33:08,240 --> 00:33:11,280
Speaker 1: account before you jump all in on that. And that's

750
00:33:11,320 --> 00:33:13,320
Speaker 1: coming from guys that own their own homes. So it's

751
00:33:13,320 --> 00:33:15,160
Speaker 1: not like you and I were not against home ownership.

752
00:33:15,200 --> 00:33:18,040
Speaker 1: But we're not actively trying to dissuade people from buying

753
00:33:18,040 --> 00:33:19,680
Speaker 1: a home. We just want people to go in with

754
00:33:19,720 --> 00:33:22,200
Speaker 1: eyes wide open, and there's a lot of personal joy

755
00:33:22,200 --> 00:33:26,000
Speaker 1: that we've derived from home ownership. I am thankful to

756
00:33:26,080 --> 00:33:27,960
Speaker 1: have to own my own home. I guess I have

757
00:33:28,000 --> 00:33:29,960
Speaker 1: a mortgage on it, so maybe the bank and I

758
00:33:30,120 --> 00:33:31,720
Speaker 1: co owned the home at this point in time. But

759
00:33:31,880 --> 00:33:33,800
Speaker 1: just know that it might not be the most financially

760
00:33:33,840 --> 00:33:37,280
Speaker 1: optimized choice, especially right now. But where to put all

761
00:33:37,320 --> 00:33:39,960
Speaker 1: that money in the meantime, that's your main question. It's

762
00:33:40,000 --> 00:33:42,479
Speaker 1: all about timeline and risk tolerance. I think those are

763
00:33:42,520 --> 00:33:44,520
Speaker 1: the two main things you have to kind of keep

764
00:33:44,560 --> 00:33:47,160
Speaker 1: in mind. The truth is eking out a slightly higher

765
00:33:47,240 --> 00:33:50,280
Speaker 1: rate of return is more worthwhile given the likely amount

766
00:33:50,320 --> 00:33:53,360
Speaker 1: of cash that you have on hand. Sometimes we get

767
00:33:53,360 --> 00:33:54,920
Speaker 1: a question or I see people in the how to

768
00:33:54,920 --> 00:33:57,080
Speaker 1: Money Facebook group and they're saying, I've got five thousand

769
00:33:57,080 --> 00:33:59,240
Speaker 1: bucks in savings, should I open this new account to

770
00:33:59,280 --> 00:34:02,960
Speaker 1: earn an extra half percent on my savings interest rate happen, right,

771
00:34:03,360 --> 00:34:06,560
Speaker 1: And that's just a kind of a small potatoes question.

772
00:34:06,840 --> 00:34:09,640
Speaker 1: It's often just not worth the time to jump down

773
00:34:09,719 --> 00:34:11,520
Speaker 1: the road in order to get paid a little bit

774
00:34:11,520 --> 00:34:13,799
Speaker 1: more on such a small sum of money. I mean,

775
00:34:13,800 --> 00:34:15,319
Speaker 1: five thousand bucks is a lot. I'm not trying to

776
00:34:15,360 --> 00:34:17,680
Speaker 1: like say it's not worth anything. But the truth is,

777
00:34:17,680 --> 00:34:19,319
Speaker 1: when you're talking about a half a percent on five

778
00:34:19,360 --> 00:34:19,959
Speaker 1: grande a year.

779
00:34:19,920 --> 00:34:22,480
Speaker 2: Most people can out earn that difference in interest rate.

780
00:34:22,400 --> 00:34:25,120
Speaker 1: And no time. So some personal finance nerds Matt, they

781
00:34:25,120 --> 00:34:26,960
Speaker 1: geek out they spend too much time majoring on these

782
00:34:27,000 --> 00:34:30,000
Speaker 1: minor issues. But if we're talking about one hundred thousand

783
00:34:30,040 --> 00:34:33,680
Speaker 1: bucks or more, which this just might be given kind

784
00:34:33,680 --> 00:34:36,360
Speaker 1: of where Ophelia is at with, you know, the proceeds

785
00:34:36,360 --> 00:34:39,720
Speaker 1: from the condo, the harvesting those gains tax free, essentially,

786
00:34:40,640 --> 00:34:43,720
Speaker 1: I think we are talking about bigger potatoes at least

787
00:34:43,880 --> 00:34:45,360
Speaker 1: about where she puts that money.

788
00:34:45,400 --> 00:34:46,960
Speaker 2: And I'm glad that she's already got her money in

789
00:34:46,960 --> 00:34:49,160
Speaker 2: a high yielded savings account and she's not with one

790
00:34:49,160 --> 00:34:52,960
Speaker 2: of the bigs. But can you do even better? Maybe

791
00:34:53,080 --> 00:34:55,439
Speaker 2: it's really hard to predict the future of interest rates,

792
00:34:55,480 --> 00:34:58,960
Speaker 2: because all signs were pointing to lower rates for savers

793
00:34:59,000 --> 00:35:02,719
Speaker 2: coming soon, but those haven't materialized the way that many

794
00:35:02,800 --> 00:35:05,920
Speaker 2: predicted given the hot jobs market over the past couple weeks.

795
00:35:06,120 --> 00:35:08,120
Speaker 1: Man, you remember all the headlines about how many times

796
00:35:08,120 --> 00:35:09,920
Speaker 1: the Fed's going to cut rates, and it just seems

797
00:35:09,960 --> 00:35:12,360
Speaker 1: to be a lot slower than a lot of people predicting.

798
00:35:12,400 --> 00:35:15,320
Speaker 2: Yeah, it's been a little bit stickier folk than the economists.

799
00:35:15,360 --> 00:35:15,960
Speaker 1: We're expecting.

800
00:35:16,520 --> 00:35:18,920
Speaker 2: Rates have gone down a little bit, but savers are

801
00:35:18,960 --> 00:35:22,360
Speaker 2: still outpacing inflation if they pick the right accounts. Doctor

802
00:35:22,400 --> 00:35:25,280
Speaker 2: of Credit is one of our favorite sites because they

803
00:35:25,360 --> 00:35:28,440
Speaker 2: keep tabs on the top paying accounts to date and

804
00:35:28,760 --> 00:35:31,879
Speaker 2: specifically though for you, I think a CD might even

805
00:35:31,920 --> 00:35:34,279
Speaker 2: be the best option. But that being said, those rates

806
00:35:34,320 --> 00:35:35,400
Speaker 2: are a bit lower than.

807
00:35:35,360 --> 00:35:37,279
Speaker 1: A high old savings account these days, and it's hard

808
00:35:37,280 --> 00:35:40,400
Speaker 1: to know how much lower savings rates are likely going

809
00:35:40,480 --> 00:35:44,560
Speaker 1: to go given how yeah, most recently, how hot the

810
00:35:44,600 --> 00:35:46,400
Speaker 1: jobs market is. It's it's almost like a CD is

811
00:35:46,440 --> 00:35:49,000
Speaker 1: like a hedge, right, a downward hedge, Like, oh, if

812
00:35:49,120 --> 00:35:52,320
Speaker 1: rates go down significantly, I'm still able.

813
00:35:52,120 --> 00:35:54,200
Speaker 2: To get that higher rate. Maybe you split your money,

814
00:35:54,239 --> 00:35:56,200
Speaker 2: maybe you put half your of what you currently have

815
00:35:56,239 --> 00:35:58,120
Speaker 2: in a CD the rest keep it in a high

816
00:35:58,160 --> 00:36:00,680
Speaker 2: old savings account. It feels me personally, I think I

817
00:36:00,680 --> 00:36:02,799
Speaker 2: would just keep all my money earning that high rate

818
00:36:02,840 --> 00:36:05,399
Speaker 2: currently that I'm currently receiving at a high yield savings

819
00:36:05,520 --> 00:36:07,840
Speaker 2: can just know that the rate will likely go like

820
00:36:08,160 --> 00:36:09,880
Speaker 2: cme somewhat right, but at least my money is not

821
00:36:09,920 --> 00:36:11,200
Speaker 2: tied up, and it gives me the options.

822
00:36:11,280 --> 00:36:13,759
Speaker 1: That's right. And I think you know I mentioned the

823
00:36:13,800 --> 00:36:17,279
Speaker 1: importance of timeline in this decision as well. How flexible

824
00:36:17,560 --> 00:36:21,560
Speaker 1: is your home buying timeline, Ophelia If you're keen on

825
00:36:21,600 --> 00:36:23,600
Speaker 1: this home purchase but also willing to push it further

826
00:36:23,640 --> 00:36:25,239
Speaker 1: down the road in an attempt to grow your nest

827
00:36:25,239 --> 00:36:27,359
Speaker 1: eg if you're saying, listen, this is a goal of mine,

828
00:36:27,719 --> 00:36:29,600
Speaker 1: but like if it happens three years from now, if

829
00:36:29,600 --> 00:36:31,879
Speaker 1: it happens seven years from now, I don't really care.

830
00:36:32,239 --> 00:36:34,759
Speaker 1: I just I know I want to do this, but

831
00:36:34,800 --> 00:36:38,240
Speaker 1: it doesn't it I'm not necessarily married to the idea

832
00:36:38,280 --> 00:36:41,160
Speaker 1: of it happening in a specified period of time. If

833
00:36:41,160 --> 00:36:43,319
Speaker 1: you're willing to push it further down the road, then

834
00:36:43,440 --> 00:36:45,600
Speaker 1: you could take on some risk by investing a portion

835
00:36:45,719 --> 00:36:49,000
Speaker 1: of your down payment fund. But here's the other thing

836
00:36:49,000 --> 00:36:50,520
Speaker 1: you have to keep in mind, because if you can't

837
00:36:50,600 --> 00:36:53,439
Speaker 1: stomach seeing like a I don't know, twenty percent plus

838
00:36:53,520 --> 00:36:55,399
Speaker 1: drop in the value of your nest egg in this

839
00:36:55,600 --> 00:36:58,200
Speaker 1: fund that you've worked years and years and years and

840
00:36:58,280 --> 00:37:01,040
Speaker 1: years to accrue, at some point in the next couple

841
00:37:01,080 --> 00:37:03,560
Speaker 1: of years, you're likely to experience some sort of a

842
00:37:03,560 --> 00:37:06,520
Speaker 1: bear market or a stock market downturn, and you will

843
00:37:06,560 --> 00:37:09,759
Speaker 1: see the value of that capital declined precipitously. If it's

844
00:37:09,800 --> 00:37:11,759
Speaker 1: going to be too emotionally difficult for you to bear that,

845
00:37:12,160 --> 00:37:14,320
Speaker 1: don't do it. So I give the stock market acted

846
00:37:14,320 --> 00:37:16,600
Speaker 1: more like twenty twenty two than twenty twenty three and

847
00:37:16,640 --> 00:37:20,040
Speaker 1: twenty twenty four, and the perfect house came along, you're

848
00:37:20,080 --> 00:37:21,800
Speaker 1: going to be between a rock and a hard place because

849
00:37:21,840 --> 00:37:23,759
Speaker 1: the down payment fund that you had accrued, well, it's

850
00:37:23,800 --> 00:37:25,960
Speaker 1: worth a whole lot less than it was, just because

851
00:37:26,000 --> 00:37:28,200
Speaker 1: of the fact that you were hoping for more upside.

852
00:37:28,400 --> 00:37:30,359
Speaker 1: So I do agree with Matt. I think Saving one

853
00:37:30,360 --> 00:37:33,919
Speaker 1: of the better high savings accounts CI typically has top

854
00:37:33,960 --> 00:37:35,719
Speaker 1: notch rates that are better than almost all the rest

855
00:37:35,719 --> 00:37:36,560
Speaker 1: of the market.

856
00:37:36,360 --> 00:37:38,359
Speaker 2: Upwards of four percent last time I checked.

857
00:37:38,440 --> 00:37:41,839
Speaker 1: Yeah, and savers are out pacing inflation. Thankfully. I think

858
00:37:41,880 --> 00:37:44,480
Speaker 1: that's the most straightforward option. It's probably the right thing

859
00:37:44,600 --> 00:37:48,359
Speaker 1: for anybody with a short to medium term need for

860
00:37:48,400 --> 00:37:51,520
Speaker 1: that money. That's probably the right move for Ophelia here too.

861
00:37:51,640 --> 00:37:53,760
Speaker 2: Especially given the fact that it sounds like she wants

862
00:37:53,880 --> 00:37:56,120
Speaker 2: that house so badly. Right, Like, if she was much

863
00:37:56,120 --> 00:37:58,280
Speaker 2: more open ended to it, I would say, sure, go ahead,

864
00:37:58,360 --> 00:38:00,680
Speaker 2: invest that money, but give it the fact that she's

865
00:38:00,719 --> 00:38:04,319
Speaker 2: going she's jumped through some pretty small hoops. Is that

866
00:38:04,400 --> 00:38:06,040
Speaker 2: the right term, Like the hopes that you gotta jump through.

867
00:38:06,040 --> 00:38:07,520
Speaker 2: If they're small, they're hard to jump through. That sure.

868
00:38:08,400 --> 00:38:11,359
Speaker 2: But by selling her place, man, that tells me that

869
00:38:11,400 --> 00:38:14,239
Speaker 2: she really that she really really wants to own her

870
00:38:14,280 --> 00:38:14,759
Speaker 2: own Yeah.

871
00:38:14,800 --> 00:38:17,920
Speaker 1: Yeah, she's setting herself up for that ability reducing expenses

872
00:38:17,960 --> 00:38:20,640
Speaker 1: so she can. I think it sounds like increase savings.

873
00:38:20,640 --> 00:38:22,920
Speaker 1: So she's got that bigger down payment, so she's ready

874
00:38:22,920 --> 00:38:23,239
Speaker 1: to go.

875
00:38:23,360 --> 00:38:25,120
Speaker 2: Yeah, and we'll make sure to link to because you

876
00:38:25,320 --> 00:38:28,680
Speaker 2: have opened your own c account, Jolins, We'll link to

877
00:38:28,719 --> 00:38:30,960
Speaker 2: the article up on the site that points out how

878
00:38:31,040 --> 00:38:33,120
Speaker 2: easy that actually is. But Joe, we've got more to

879
00:38:33,120 --> 00:38:36,359
Speaker 2: get to. We're gonna talk about a listener who may

880
00:38:36,400 --> 00:38:38,920
Speaker 2: have been handling her credit cards all wrong.

881
00:38:39,000 --> 00:38:48,919
Speaker 1: We'll get to that more right after this. All right, Matt,

882
00:38:48,960 --> 00:38:51,840
Speaker 1: we're back, Yeah more listener question action to get to

883
00:38:52,600 --> 00:38:54,600
Speaker 1: This is the Facebook question of the week. It comes

884
00:38:54,600 --> 00:38:58,600
Speaker 1: from listener Bonnie. She says, for credit score calculations, is

885
00:38:58,640 --> 00:39:02,719
Speaker 1: the credit utilization based on each card or an aggregate?

886
00:39:02,800 --> 00:39:05,960
Speaker 1: I always thought it was aggregate. We recently put several

887
00:39:06,040 --> 00:39:09,080
Speaker 1: large expenses on a card, which put our utilization for

888
00:39:09,239 --> 00:39:12,680
Speaker 1: that card to forty five percent. All cards combined, our

889
00:39:12,800 --> 00:39:16,480
Speaker 1: utilization is less than ten percent. However, our credit score

890
00:39:16,520 --> 00:39:19,160
Speaker 1: plummeted by over thirty points. Ye, the card is going

891
00:39:19,200 --> 00:39:21,400
Speaker 1: to be paid in full before interest to cruise. I

892
00:39:21,480 --> 00:39:24,160
Speaker 1: know my score will rebound once that payment is reported,

893
00:39:24,400 --> 00:39:26,120
Speaker 1: but I had a bit of sticker shock when I

894
00:39:26,160 --> 00:39:29,959
Speaker 1: saw that our score was impacted so significantly. Yep, yep.

895
00:39:30,000 --> 00:39:31,600
Speaker 1: I think Bonnie's learning the hard way.

896
00:39:32,080 --> 00:39:36,360
Speaker 2: Let's discuss credit utilization, which is basically how much of

897
00:39:36,400 --> 00:39:40,080
Speaker 2: your available credit that you use. And the credit scoring

898
00:39:40,120 --> 00:39:43,120
Speaker 2: models out there they rate this statistic pretty highly. It

899
00:39:43,120 --> 00:39:46,080
Speaker 2: makes up thirty percent of your score after your payment history.

900
00:39:46,320 --> 00:39:48,680
Speaker 1: Yeah, basically on time payments. Hey, that's the most crucial,

901
00:39:48,760 --> 00:39:50,240
Speaker 1: But this is the second most important.

902
00:39:50,280 --> 00:39:52,279
Speaker 2: But then how much of it you're actually using. They

903
00:39:52,400 --> 00:39:54,440
Speaker 2: pay close attention to that, Like they want you to

904
00:39:54,480 --> 00:39:57,200
Speaker 2: have tons of credit at your disposal, but to use

905
00:39:57,600 --> 00:40:01,240
Speaker 2: very little of it. That to them at least reveals

906
00:40:01,280 --> 00:40:04,319
Speaker 2: the ability to control yourself, and they're gonna reward you.

907
00:40:04,400 --> 00:40:07,160
Speaker 2: It's almost like by showing substantial love to your credit score.

908
00:40:07,200 --> 00:40:08,759
Speaker 1: Almost like if you went to and all you can

909
00:40:08,760 --> 00:40:11,840
Speaker 1: eat buffet, but they saw that you were so disciplined,

910
00:40:11,920 --> 00:40:14,399
Speaker 1: you only got one well apportioned plate. You didn't keep

911
00:40:14,400 --> 00:40:15,960
Speaker 1: going back like you did, Matt. I know when you

912
00:40:16,000 --> 00:40:18,120
Speaker 1: were growing up to the soft serve machine for all

913
00:40:18,120 --> 00:40:20,000
Speaker 1: that ice cream. Come on, I know here here there's old.

914
00:40:19,880 --> 00:40:21,799
Speaker 2: Handle that there's only one way that I learned how

915
00:40:21,920 --> 00:40:25,000
Speaker 2: to be an expert cone fillerrepia. You know, like I

916
00:40:25,000 --> 00:40:26,080
Speaker 2: do it like they do at Chick fil a.

917
00:40:26,160 --> 00:40:27,160
Speaker 1: You know how they got right.

918
00:40:27,440 --> 00:40:29,200
Speaker 2: You don't do it so that it like flops around

919
00:40:29,239 --> 00:40:31,040
Speaker 2: and you know, no, you hold it up in there

920
00:40:31,080 --> 00:40:32,440
Speaker 2: and then it fills it and then you drop it

921
00:40:32,480 --> 00:40:34,560
Speaker 2: a little bit and it has those beautiful little rips.

922
00:40:34,600 --> 00:40:36,520
Speaker 1: You probably got a soft serve least seven or eight

923
00:40:36,600 --> 00:40:37,520
Speaker 1: of those every time you went.

924
00:40:37,800 --> 00:40:39,799
Speaker 2: I would say there's a slew of other factors that

925
00:40:39,880 --> 00:40:42,719
Speaker 2: do impact your credit score, Bonnie, including paying your bills

926
00:40:42,719 --> 00:40:45,400
Speaker 2: on time. Of course, that's thirty five percent of your

927
00:40:45,400 --> 00:40:49,160
Speaker 2: overall credit score. But your credit utilization rate is often

928
00:40:49,320 --> 00:40:53,520
Speaker 2: underrated and misunderstood. But it sounds like you are you're

929
00:40:53,600 --> 00:40:55,560
Speaker 2: kind of wisen up to how it's actually calculated.

930
00:40:55,640 --> 00:40:58,759
Speaker 1: Most people don't even know what their credit score is, like,

931
00:40:58,800 --> 00:41:00,839
Speaker 1: they know that it exists, and they might not even

932
00:41:00,880 --> 00:41:03,479
Speaker 1: know what their score is. They have a vague notion

933
00:41:03,560 --> 00:41:06,840
Speaker 1: that it impacts their finances in some way, form or fashion.

934
00:41:07,160 --> 00:41:09,160
Speaker 1: If you're one of those people and you're not quite

935
00:41:09,239 --> 00:41:12,719
Speaker 1: sure how the credit score that you have impacts your life, well,

936
00:41:12,719 --> 00:41:14,279
Speaker 1: we've got a lot of content up on how to

937
00:41:14,360 --> 00:41:16,400
Speaker 1: money dot com. We have some previous episodes that you

938
00:41:16,440 --> 00:41:17,960
Speaker 1: should go back and listen to when it comes to

939
00:41:18,200 --> 00:41:22,640
Speaker 1: repairing a broken credit score or how to understand the

940
00:41:22,680 --> 00:41:24,840
Speaker 1: credit scoring systems that you can take advantage of it

941
00:41:24,960 --> 00:41:28,960
Speaker 1: maximize your score because it does impact almost every aspect

942
00:41:28,960 --> 00:41:32,200
Speaker 1: of your financial life. And whether or not your utilization

943
00:41:32,320 --> 00:41:35,719
Speaker 1: rate is per card or overall, that's always been I'll say,

944
00:41:35,760 --> 00:41:40,200
Speaker 1: at least a little murky like the credit bureaus, don't

945
00:41:40,239 --> 00:41:43,680
Speaker 1: always share every single way in which the credit score.

946
00:41:44,800 --> 00:41:48,440
Speaker 1: Some of these credit bureaus might have potentially several scores,

947
00:41:48,480 --> 00:41:50,840
Speaker 1: maybe a dozen or more scores for every individual, so

948
00:41:50,840 --> 00:41:53,680
Speaker 1: it's not even like there's one score for everybody, which

949
00:41:53,719 --> 00:41:55,960
Speaker 1: is part of what makes this confusing as well. And

950
00:41:56,200 --> 00:41:59,719
Speaker 1: they don't necessarily tell us exactly how the sausage is made,

951
00:42:00,000 --> 00:42:02,120
Speaker 1: and though we have like a high end understanding all

952
00:42:02,120 --> 00:42:05,279
Speaker 1: the details, they don't come out and spell it out

953
00:42:05,320 --> 00:42:08,200
Speaker 1: for us. But if one card experiences a higher than

954
00:42:08,200 --> 00:42:12,120
Speaker 1: normal balance, even though your overall utilization rate remains low,

955
00:42:12,600 --> 00:42:15,320
Speaker 1: you will see a credit score hit because of it. Typically,

956
00:42:15,640 --> 00:42:17,600
Speaker 1: so if you have let's say one hundred thousand dollars

957
00:42:17,680 --> 00:42:20,240
Speaker 1: in total credit available and you're using ten thousand dollars

958
00:42:20,239 --> 00:42:23,879
Speaker 1: of it, that's great you have a low credit utilization rate.

959
00:42:24,320 --> 00:42:27,240
Speaker 1: But if all ten thousand dollars is on a single

960
00:42:27,280 --> 00:42:30,000
Speaker 1: credit card that has a twelve thousand dollars limit, your

961
00:42:30,000 --> 00:42:32,440
Speaker 1: credit score is going to take a hit because of

962
00:42:32,480 --> 00:42:35,040
Speaker 1: the fact that, yes, it seems like all credit scoring models,

963
00:42:35,120 --> 00:42:39,160
Speaker 1: or at least most, are taking into accounts how you're

964
00:42:39,160 --> 00:42:43,319
Speaker 1: handling specific credit cards into In addition, to your overall

965
00:42:43,600 --> 00:42:47,640
Speaker 1: credit right, so they're looking at both your individual credit

966
00:42:47,640 --> 00:42:52,440
Speaker 1: card utilization ratio and the overall ratio factor. Both are

967
00:42:52,520 --> 00:42:54,840
Speaker 1: kind of making it their way into your credit score.

968
00:42:55,200 --> 00:42:58,680
Speaker 1: Best practices are to keep your utilization rate under thirty

969
00:42:58,680 --> 00:43:01,720
Speaker 1: percent of your overall credit limit and under ten percent

970
00:43:01,800 --> 00:43:03,880
Speaker 1: if you're keen on raising your score, if you want

971
00:43:03,920 --> 00:43:06,800
Speaker 1: to kind of be in that upper echelon closer towards

972
00:43:07,239 --> 00:43:10,120
Speaker 1: credit score perfection, credit score, nirvana, whatever you might call it.

973
00:43:10,640 --> 00:43:14,720
Speaker 1: But under thirty percent is going to on your specific

974
00:43:14,760 --> 00:43:16,960
Speaker 1: credit cards, on each individual one, and then on your

975
00:43:17,120 --> 00:43:20,879
Speaker 1: overall amount of credit utilization as well. Keeping an under

976
00:43:20,920 --> 00:43:23,160
Speaker 1: thirty percent is pretty much going to get you directly

977
00:43:23,160 --> 00:43:23,759
Speaker 1: where you want to.

978
00:43:23,760 --> 00:43:25,880
Speaker 2: Go totally, and it can be a bit confusing. I

979
00:43:25,880 --> 00:43:28,480
Speaker 2: would just say focus on the individual cards because by

980
00:43:28,600 --> 00:43:31,920
Speaker 2: keeping each individual card under the thirty percent limit, it

981
00:43:32,000 --> 00:43:35,480
Speaker 2: is impossible to go over your thirty percent overall aggregate

982
00:43:35,800 --> 00:43:37,799
Speaker 2: credit limit like you do the one and it'll take

983
00:43:37,840 --> 00:43:40,400
Speaker 2: care of the other. But there are ways to mitigate

984
00:43:40,600 --> 00:43:43,120
Speaker 2: the impact of a large expense on your credit. Makes

985
00:43:43,160 --> 00:43:45,880
Speaker 2: me think about most recently Joe paying for a pretty

986
00:43:45,960 --> 00:43:48,560
Speaker 2: large plumbing bill and how I should probably take care

987
00:43:48,560 --> 00:43:51,319
Speaker 2: of that before it hits the statement. Bonnie mentioned that

988
00:43:51,360 --> 00:43:52,920
Speaker 2: she's going to be paying the balance on time and

989
00:43:52,960 --> 00:43:55,440
Speaker 2: in full. That's crucial. But you could pay the balance

990
00:43:55,480 --> 00:43:58,760
Speaker 2: before the statement actually closes, so that that large balance

991
00:43:58,840 --> 00:44:01,440
Speaker 2: it never even gets rep which wills like what the

992
00:44:01,440 --> 00:44:04,160
Speaker 2: credit bureaus don't know, won't hurt them kind of yeah, exactly.

993
00:44:04,320 --> 00:44:07,560
Speaker 2: And there's a reason because like, there's a benefit I

994
00:44:07,640 --> 00:44:09,960
Speaker 2: receive by not by waiting until the end of that

995
00:44:10,000 --> 00:44:12,080
Speaker 2: statement to pay that, because that's you know, forty five

996
00:44:12,160 --> 00:44:14,200
Speaker 2: hundred dollars that I don't have to pay out of pocket.

997
00:44:14,200 --> 00:44:16,200
Speaker 2: That that money can then be earning interest in the bank.

998
00:44:16,480 --> 00:44:18,799
Speaker 2: And by waiting, I'm sticking that to the credit card

999
00:44:18,840 --> 00:44:21,279
Speaker 2: companies there for a little bit. But by eliminating that

1000
00:44:21,640 --> 00:44:24,400
Speaker 2: to where it doesn't even show up, well, get to

1001
00:44:24,480 --> 00:44:27,200
Speaker 2: use your card, you get to utilize earn those points,

1002
00:44:27,480 --> 00:44:30,120
Speaker 2: and then you still avoid any sort of negligent credit

1003
00:44:30,200 --> 00:44:33,680
Speaker 2: scoring side effects. Something else that you could do too

1004
00:44:33,760 --> 00:44:36,200
Speaker 2: is call the credit card issuer ask them to raise

1005
00:44:36,239 --> 00:44:40,040
Speaker 2: your credit limits. And that's generally speaking a good thing

1006
00:44:40,120 --> 00:44:42,239
Speaker 2: to do if you think that your limits might be

1007
00:44:42,280 --> 00:44:44,040
Speaker 2: a little bit low for how it is that you

1008
00:44:44,080 --> 00:44:47,480
Speaker 2: spend on them. But that being said, I wouldn't overthink

1009
00:44:47,480 --> 00:44:49,239
Speaker 2: it because it, like, right now, it sucks to see

1010
00:44:49,239 --> 00:44:51,480
Speaker 2: your score take a hit like that, But it sounds

1011
00:44:51,560 --> 00:44:54,840
Speaker 2: like that you're pretty thoughtful about your credit usage. And

1012
00:44:54,920 --> 00:44:57,880
Speaker 2: my guess is that keeping your utilization low on this

1013
00:44:58,000 --> 00:44:59,759
Speaker 2: card for a few months will bring your score, you know,

1014
00:45:00,120 --> 00:45:02,120
Speaker 2: close to where it was, and I personally wouldn't be

1015
00:45:02,160 --> 00:45:04,880
Speaker 2: too concerned about it, unless perhaps maybe you're looking to

1016
00:45:04,920 --> 00:45:06,920
Speaker 2: buy a home in the next year or so.

1017
00:45:07,080 --> 00:45:08,840
Speaker 1: Yeah, that's when you want to be hyper vigilant. But

1018
00:45:08,840 --> 00:45:10,759
Speaker 1: if it's one of those things where you're like, oh, man,

1019
00:45:10,800 --> 00:45:14,560
Speaker 1: I went from eight ten to seven ninety two, it

1020
00:45:14,600 --> 00:45:16,759
Speaker 1: doesn't matter, not a big deal. Yeah, we've talked about

1021
00:45:16,760 --> 00:45:19,680
Speaker 1: that too, where if you're above seven sixty, then you're

1022
00:45:19,680 --> 00:45:22,400
Speaker 1: going to qualify for the best rates, the best terms.

1023
00:45:22,640 --> 00:45:26,560
Speaker 1: There's essentially no downside if you if your credit score

1024
00:45:26,600 --> 00:45:29,200
Speaker 1: is seven to sixty or above. But there's also no

1025
00:45:29,280 --> 00:45:31,600
Speaker 1: difference between seven ninety and eight twenty in the eyes

1026
00:45:31,640 --> 00:45:35,520
Speaker 1: of lenders. So improving your score once you've gotten to

1027
00:45:35,560 --> 00:45:39,040
Speaker 1: that point really does, you know, extra good. So I

1028
00:45:39,080 --> 00:45:40,600
Speaker 1: get how it can be a little deflating, but I

1029
00:45:40,600 --> 00:45:43,920
Speaker 1: also wouldn't ascribe more meaning to it than it actually deserves.

1030
00:45:44,200 --> 00:45:46,120
Speaker 2: Cool. All right, man, let's get back to the beer

1031
00:45:46,200 --> 00:45:48,799
Speaker 2: that you and I drank during this well or in

1032
00:45:48,800 --> 00:45:51,520
Speaker 2: the process of drinking, because I think we both tried

1033
00:45:51,560 --> 00:45:54,000
Speaker 2: to slow our role a little bit because this was

1034
00:45:54,040 --> 00:45:57,719
Speaker 2: one big beer, buddy, Yes, I was. I've literally never

1035
00:45:57,719 --> 00:46:00,120
Speaker 2: poured a beer that was so black. I mean I

1036
00:46:00,640 --> 00:46:02,600
Speaker 2: wish we were already rolling when I was pouring these beers,

1037
00:46:02,600 --> 00:46:06,880
Speaker 2: because I exclaimed it was like pouring motoroid. I have

1038
00:46:07,000 --> 00:46:10,920
Speaker 2: literally never poured a beer that was so black and viscous.

1039
00:46:11,160 --> 00:46:14,840
Speaker 1: But let's share your thoughts. Sure, yeah, this was huge

1040
00:46:15,080 --> 00:46:18,360
Speaker 1: in every essence of the word huge, like yeah, w

1041
00:46:18,520 --> 00:46:22,000
Speaker 1: forty and on the can it says that it spent

1042
00:46:22,040 --> 00:46:24,440
Speaker 1: over two and a half years in a barrel, or

1043
00:46:24,440 --> 00:46:26,840
Speaker 1: basically two and a half years in a barrel. Was suppressive, insane.

1044
00:46:27,840 --> 00:46:30,440
Speaker 1: There were three three different kinds of cinnamon. I don't

1045
00:46:30,440 --> 00:46:32,640
Speaker 1: know if you noticed that, Matt in this beer from

1046
00:46:32,640 --> 00:46:34,920
Speaker 1: different continents, which is kind of incredible from tasting. So

1047
00:46:34,960 --> 00:46:37,640
Speaker 1: this is this is one of those beers that maybe

1048
00:46:37,640 --> 00:46:40,520
Speaker 1: overdid it almost in my opinion, It was a sweet,

1049
00:46:40,560 --> 00:46:43,040
Speaker 1: burly beast. There was maple syrup, infused, and so this

1050
00:46:43,040 --> 00:46:46,440
Speaker 1: one is well but Humble Forager makes incredible beers, and

1051
00:46:46,480 --> 00:46:50,040
Speaker 1: so yeah, well maybe this one was top notch in

1052
00:46:50,080 --> 00:46:53,360
Speaker 1: every essence, and I thoroughly enjoyed it. It was also

1053
00:46:53,840 --> 00:46:56,600
Speaker 1: a little too much for Joel's dainty palate. It was

1054
00:46:56,640 --> 00:47:00,080
Speaker 1: a big one to imbib on, and so I appreciate it.

1055
00:47:00,160 --> 00:47:03,200
Speaker 1: But I also, man, I don't think I could drink

1056
00:47:03,200 --> 00:47:06,279
Speaker 1: a whole beer like this, because it's just that it's

1057
00:47:06,440 --> 00:47:06,879
Speaker 1: too much.

1058
00:47:06,960 --> 00:47:08,759
Speaker 2: I had already cracked my own and poured it in

1059
00:47:08,760 --> 00:47:12,080
Speaker 2: my glass before we realized the magnitude of this beer.

1060
00:47:12,080 --> 00:47:14,279
Speaker 2: But like, it was so big, so boozy, it almost

1061
00:47:14,280 --> 00:47:16,439
Speaker 2: felt like I was drinking straight molasses, which I thought

1062
00:47:16,480 --> 00:47:18,400
Speaker 2: was gonna be the biggest problem for you. That just

1063
00:47:18,440 --> 00:47:20,239
Speaker 2: the sweetness. Yeah, and I think maybe a lot of

1064
00:47:20,280 --> 00:47:22,160
Speaker 2: it does have to do with the maple syrup that

1065
00:47:22,280 --> 00:47:24,760
Speaker 2: was infused in this, But there is so much flavor,

1066
00:47:25,239 --> 00:47:29,040
Speaker 2: like the initial barrel like woody notes. It reminds me

1067
00:47:29,120 --> 00:47:31,759
Speaker 2: of licking the postage stamp. That's just one of the

1068
00:47:31,760 --> 00:47:33,600
Speaker 2: ways I describe some of those. Okay notes, But then

1069
00:47:33,600 --> 00:47:35,920
Speaker 2: you got the vanilla as well. Of course, the cinnamon,

1070
00:47:35,960 --> 00:47:38,200
Speaker 2: like you mentioned, kind of the that being said, kind

1071
00:47:38,239 --> 00:47:40,160
Speaker 2: of the perfect beer to enjoy here in the middle

1072
00:47:40,280 --> 00:47:42,560
Speaker 2: of winter when it's nice and you know, nice and

1073
00:47:42,560 --> 00:47:44,560
Speaker 2: cold outsides. But I'm still glad we got to enjoy this.

1074
00:47:44,640 --> 00:47:46,200
Speaker 2: During the episodes of day Study, could you.

1075
00:47:46,120 --> 00:47:48,719
Speaker 1: Pick out the differences between the Mexican, the Chinese, and

1076
00:47:48,760 --> 00:47:49,920
Speaker 1: the Sri Lankan cinnamon.

1077
00:47:49,960 --> 00:47:51,280
Speaker 2: I've never I've heard of Mexican.

1078
00:47:51,400 --> 00:47:56,240
Speaker 1: It almost sounds like a craft beer joke, what nerd

1079
00:47:56,480 --> 00:47:58,160
Speaker 1: cares about in the fact there's three different kinds of

1080
00:47:58,200 --> 00:48:00,880
Speaker 1: cinnamons from all these random exotic locations. It's kind of silly.

1081
00:48:00,960 --> 00:48:03,239
Speaker 2: Yeah, like the craft beer nerds kind of went maybe

1082
00:48:03,239 --> 00:48:05,200
Speaker 2: a little bit too far with this one. Actually, this

1083
00:48:05,239 --> 00:48:07,560
Speaker 2: makes me did you read the article about how bourbon

1084
00:48:08,120 --> 00:48:12,080
Speaker 2: Oh yeah, the bourbon market has imploded essentially because of

1085
00:48:12,400 --> 00:48:14,680
Speaker 2: the demand for it years ago was there and.

1086
00:48:14,640 --> 00:48:17,160
Speaker 1: So lurbon takes years and years to plan and make.

1087
00:48:17,280 --> 00:48:19,359
Speaker 2: So of course the stillers were doubling down, and we

1088
00:48:19,480 --> 00:48:22,399
Speaker 2: saw some of these massive warehouses because they're like, there's

1089
00:48:22,400 --> 00:48:24,359
Speaker 2: only one place that you can make bourbon. Literally, we've

1090
00:48:24,360 --> 00:48:27,279
Speaker 2: got all these buyers. Dude, that was two years ago.

1091
00:48:27,440 --> 00:48:30,600
Speaker 2: Two years ago, old man yet again, But I do

1092
00:48:30,680 --> 00:48:33,560
Speaker 2: wonder when it comes to distilleries and even breweries, just

1093
00:48:33,600 --> 00:48:35,640
Speaker 2: given there's more. I mean, we've talked about it on

1094
00:48:35,680 --> 00:48:37,640
Speaker 2: the show how You and I drink less, but especially

1095
00:48:37,640 --> 00:48:40,960
Speaker 2: given to with the FDA and how they're talking about slapping,

1096
00:48:41,120 --> 00:48:43,759
Speaker 2: I feel like alcohol is going through what cigarettes went

1097
00:48:43,760 --> 00:48:46,400
Speaker 2: through back in the eighties and nine essentially.

1098
00:48:46,560 --> 00:48:48,560
Speaker 1: But then I tell you our our new local craft

1099
00:48:48,640 --> 00:48:51,600
Speaker 1: brewery sent me a cubon and in the email they

1100
00:48:51,600 --> 00:48:54,680
Speaker 1: basically said, hey, thank you for coming in. We've seen

1101
00:48:54,680 --> 00:48:56,920
Speaker 1: all these craft breweries closing no way, we want to

1102
00:48:56,920 --> 00:48:58,920
Speaker 1: stand the test of time. Thank you for your patronage.

1103
00:48:59,000 --> 00:49:00,640
Speaker 1: And so they're trying to say, of myice people to

1104
00:49:00,640 --> 00:49:03,120
Speaker 1: come in because craft brewers are not doing so well

1105
00:49:03,200 --> 00:49:03,520
Speaker 1: right now.

1106
00:49:03,560 --> 00:49:06,480
Speaker 2: It is a tough time tout for us, the spirit's industry.

1107
00:49:06,960 --> 00:49:09,520
Speaker 2: That's the free market. Maybe that's capitalism, yeah, which is

1108
00:49:09,560 --> 00:49:12,120
Speaker 2: what leads like that creative destruction. But still sad of course,

1109
00:49:12,160 --> 00:49:15,080
Speaker 2: if there's a beloved local brewer that ends up closing night,

1110
00:49:15,080 --> 00:49:15,480
Speaker 2: I hate to.

1111
00:49:15,480 --> 00:49:17,440
Speaker 1: See that, and just as guys who love craft beer

1112
00:49:17,440 --> 00:49:18,200
Speaker 1: in general.

1113
00:49:18,000 --> 00:49:19,800
Speaker 2: Indeed, but that's going to be it for this episode.

1114
00:49:19,840 --> 00:49:21,480
Speaker 2: You can find our show notes up on the website.

1115
00:49:21,480 --> 00:49:25,280
Speaker 2: At howdomoney dot com, including the article to where Joel

1116
00:49:25,280 --> 00:49:27,600
Speaker 2: explained how easy it was to open an account with

1117
00:49:27,640 --> 00:49:30,760
Speaker 2: c T, one of the best online high yield savings

1118
00:49:30,760 --> 00:49:32,640
Speaker 2: accounts out there. We'll link to that there in the

1119
00:49:32,640 --> 00:49:34,680
Speaker 2: show notes, but Buddy, that's going to be it for

1120
00:49:34,760 --> 00:49:36,040
Speaker 2: this episode until next time.

1121
00:49:36,200 --> 00:49:38,399
Speaker 1: Best Friends Out, Best Friends Out,