WEBVTT - Ask HTM - Hidden Expenses When Investing, Keeping Student Loan Payments Low While Earning More, & Vacation Investment Properties #394 0:00:00.120 --> 0:00:03.000 Welcome to How the Money. I'm Joel and I am Matt. 0:00:03.160 --> 0:00:25.840 Today we are answering your listener questions. That's right, Joel, 0:00:25.960 --> 0:00:30.319 we have a listener questions Monday episode. Here. We've got 0:00:30.400 --> 0:00:33.000 several awesome questions that we're gonna get to, including one 0:00:33.080 --> 0:00:36.440 about the hidden expenses that a company investing and this 0:00:36.479 --> 0:00:39.360 one's from a recent college graduate that's asking that one. 0:00:39.680 --> 0:00:42.199 We also have a question about how to avoid the 0:00:42.200 --> 0:00:45.920 negative impact on your income based repayment plans when you 0:00:45.960 --> 0:00:49.000 have student loans because you're earning too much money. That's 0:00:49.040 --> 0:00:52.480 an interesting predicament to find yourself in. And we're gonna 0:00:52.479 --> 0:00:56.800 get to our thoughts on buying a vacation property. Plus 0:00:56.840 --> 0:00:59.160 we've got two other great questions that we're gonna get 0:00:59.160 --> 0:01:03.080 to today on this episode. Nice sounds, other comment keep 0:01:03.080 --> 0:01:05.479 stretching it out. I look forward to it. Yeah, there's 0:01:05.480 --> 0:01:07.679 there's some good ones that we're gonna talk about today, 0:01:07.800 --> 0:01:09.920 and some some of these subjects we haven't really talked 0:01:09.920 --> 0:01:12.200 about that much. So before we get there, Matt, I 0:01:12.240 --> 0:01:14.400 wanted to just mention I don't really get on Twitter 0:01:14.560 --> 0:01:17.440 very much. I feel like Twitter is more of a 0:01:17.480 --> 0:01:20.119 time suck for me. If I do get on it, 0:01:20.360 --> 0:01:22.200 and I don't know, I don't really get a whole 0:01:22.240 --> 0:01:24.800 lot out of it, but I did stumble upon this 0:01:25.600 --> 0:01:28.680 talking about all the different ways that Twitter is the worse, 0:01:29.120 --> 0:01:31.039 But then you're gonna talk about something that you love 0:01:31.080 --> 0:01:34.039 about tonight. So there's this one worthwhile follow that is 0:01:34.080 --> 0:01:36.319 really just a sign time stuck too, because it's uh 0:01:36.480 --> 0:01:41.080 TikTok investors is the the the handle, and so it's 0:01:41.120 --> 0:01:44.840 just literally someone posting videos over and over like every 0:01:44.920 --> 0:01:51.440 day of somebody giving idiotic investment advice intment advice. Yeah. 0:01:51.520 --> 0:01:53.520 So if you're like on Twitter on the rag and 0:01:53.600 --> 0:01:56.800 you occasionally, you know, want to chuckle in your feed, 0:01:57.160 --> 0:02:00.120 that's definitely something that's worth worth checking out. There a 0:02:00.160 --> 0:02:04.200 lot of like terrible crypto advice or just investing advice 0:02:04.200 --> 0:02:07.080 in general, just like this nineteen year old who's driving 0:02:07.080 --> 0:02:09.120 like fancy cars and houses and it's like, gosh, I 0:02:09.160 --> 0:02:12.000 get it all from the bank. Yeuys, it's like cool man, 0:02:12.040 --> 0:02:17.560 that's called debt. It's what nobody is that free? Yeah. Yeah, 0:02:17.680 --> 0:02:19.960 make sure that you note that this is for entertainment 0:02:19.960 --> 0:02:23.720 purposes only. We're not endorsing any of those pieces of advice. 0:02:23.720 --> 0:02:25.920 I thought you were gonna try to get me to 0:02:25.960 --> 0:02:28.000 get on TikTok. Well you can if you want to. 0:02:28.080 --> 0:02:29.840 I think we we have our handle claim we just 0:02:29.880 --> 0:02:32.200 haven't started using. But yeah, we've got how the Money pod. 0:02:32.320 --> 0:02:35.240 But I'm not really interested in jumping on another social 0:02:35.280 --> 0:02:39.600 media platform doesn't necessarily align with my personal goals, which is, yeah, 0:02:39.600 --> 0:02:43.640 like you said, trying to avoid time disappearing at all 0:02:43.680 --> 0:02:45.840 the different random hours of the day. You know. Like 0:02:45.880 --> 0:02:47.880 I read something recently where they talked about how we 0:02:47.960 --> 0:02:50.400 have so many different things now that distract us and 0:02:50.520 --> 0:02:54.520 keep us from essentially being bored where And it's those 0:02:54.520 --> 0:02:56.959 times of being bored that we often times find the 0:02:57.040 --> 0:03:01.359 motivation to do something like meaningful or impact or really good. Uh, 0:03:01.400 --> 0:03:03.320 it's not the best ideas come from sometimes too, It's 0:03:03.360 --> 0:03:06.079 like we're missing out sometimes on the inspirational idea that 0:03:06.120 --> 0:03:09.040 pops into your brain, you know, Like now it feels 0:03:09.080 --> 0:03:11.040 like the shower is the only place where you have 0:03:11.240 --> 0:03:12.960 any of that for you for room to think, you know, 0:03:13.080 --> 0:03:15.360 and even then, I I've heard of folks listening to 0:03:15.440 --> 0:03:18.360 podcasts in the shower because you know, the newer phones 0:03:18.360 --> 0:03:21.520 are all waterproof. Is yours waterproof? I don't think so. Okay, Well, 0:03:21.520 --> 0:03:23.920 while all the newer iPhones, they all are rated to 0:03:23.800 --> 0:03:25.600 a to a certain level, and so folks are just 0:03:25.600 --> 0:03:27.360 bringing their phone into the shower, just setting it up 0:03:27.400 --> 0:03:31.200 there on the shelf. You can even do that, but man, 0:03:31.760 --> 0:03:35.080 I've started to it's a sacred place though. Yeah, it is. Seriously. 0:03:35.120 --> 0:03:38.120 I mean for me literally, the ability to not really 0:03:38.200 --> 0:03:40.440 let my mind actively think about anything, just to let 0:03:40.440 --> 0:03:42.960 it wander. Not only is it a cleansing from you know, 0:03:42.960 --> 0:03:44.320 for the outside of my body, but I feel like 0:03:44.680 --> 0:03:47.840 it's almost like this mental clearing away before I go 0:03:47.920 --> 0:03:50.120 to sleep. I'm a night shower. By the way, we 0:03:50.240 --> 0:03:53.200 talked about this before night showering for life. You and 0:03:53.200 --> 0:03:54.920 your early morning showers canna get out of here? Man, 0:03:55.400 --> 0:03:57.600 All right, well you don't have to get hustle about it, 0:03:57.680 --> 0:04:00.160 but uh no, I agree. I think, yeah, the the 0:04:00.400 --> 0:04:02.520 being board a little bit more would probably be a 0:04:02.520 --> 0:04:05.040 good thing for us in general. Um. But yeah, but 0:04:05.240 --> 0:04:07.920 if you're on Twitter TikTok investors, well I'll link to 0:04:08.000 --> 0:04:10.080 that in the show notes exactly. Yeah. Do you know 0:04:10.120 --> 0:04:13.080 if there's an Instagram equivalent, because I feel like Instagram 0:04:13.120 --> 0:04:15.320 is more of my social media. I don't love to 0:04:15.360 --> 0:04:18.280 look it up. I've got someone started that. Yeah, all right, Matt, Well, 0:04:18.640 --> 0:04:20.360 let's keep moving on. Let's mention the beer that we're 0:04:20.360 --> 0:04:22.080 having on the show today. This one is called the 0:04:22.120 --> 0:04:24.760 Bane and the Blithe. It's a wild Ale by New 0:04:24.760 --> 0:04:27.240 Grass Brewing Company. You picked this one up while you're 0:04:27.240 --> 0:04:30.640 in North Carolina, so looking forward to drinking this very 0:04:30.640 --> 0:04:33.520 interesting wild they all made with prickly pair. Yeah. We'll 0:04:33.560 --> 0:04:34.840 talk about this at the end of the episode and 0:04:34.839 --> 0:04:37.000 forward to it. But let's get to sublsit. Our questions 0:04:37.200 --> 0:04:39.279 for folks out there who you know might have a 0:04:39.320 --> 0:04:43.960 money question or maybe a tangentially related question that maybe 0:04:44.240 --> 0:04:46.200 uh more, maybe it's more lifestyle, but it has something 0:04:46.200 --> 0:04:47.880 to do with money. We'd love to talk about it 0:04:47.880 --> 0:04:49.560 on the show. You know, you can go to our 0:04:49.600 --> 0:04:52.359 website how to money dot com slash ask. It's really 0:04:52.520 --> 0:04:55.440 simple to submit your question to us and hopefully we 0:04:55.440 --> 0:04:58.080 can take it on an upcoming episode. Matt, let's get 0:04:58.120 --> 0:05:00.840 to that. The first question for this EPISO, this one 0:05:01.080 --> 0:05:05.080 is about a random finance charge that you might get 0:05:05.200 --> 0:05:08.560 if you sign up for a specific credit card. Hi, man, Joel, 0:05:08.680 --> 0:05:11.599 this is John from Beaverton, Oregon. I was planning a 0:05:11.600 --> 0:05:14.240 trip for myself and my wife with Delta. But when 0:05:14.240 --> 0:05:16.359 I got to the final page where you pay, I 0:05:16.400 --> 0:05:18.800 saw an offered to apply for the American Express Delta 0:05:18.839 --> 0:05:22.320 Sky Mouse card. It offered a nice bonus statement credit 0:05:22.400 --> 0:05:25.320 and a nice bonus miles on your first purchase. But 0:05:25.360 --> 0:05:27.719 when I looked at the rates and fees page, I 0:05:27.800 --> 0:05:30.640 noticed a plan fee or a fixed finance charge of 0:05:30.920 --> 0:05:34.880 one point three What is a plan fee and how 0:05:34.920 --> 0:05:36.880 does it affect our coincide with the a p R. 0:05:37.400 --> 0:05:40.240 I love the podcast, all right, Joel, let's talk about 0:05:40.279 --> 0:05:42.919 credit cards. First of all, you gotta love those credit 0:05:42.960 --> 0:05:45.479 card sign of bonuses, right, They can can be a 0:05:45.520 --> 0:05:47.560 really nice incentive to get us to open up a 0:05:47.560 --> 0:05:50.480 new credit card. Specifically, we've recently talked about the Chase 0:05:50.520 --> 0:05:53.919 Sapphire Preferred Man. If you have not taken advantage of 0:05:53.600 --> 0:05:55.840 a sign up bonus recently, that is definitely one to 0:05:55.880 --> 0:05:58.960 consider because fifty dollars and that is a lot of 0:05:58.960 --> 0:06:01.480 money that's available. It's pretty rich, it is. And we'll 0:06:01.480 --> 0:06:03.600 make sure to link to our credit cards article in 0:06:03.600 --> 0:06:06.000 our show notes for this episode. But John, so for 0:06:06.040 --> 0:06:08.040 you make sure that when you open a new credit 0:06:08.080 --> 0:06:10.200 card and you start spending that you have the money 0:06:10.200 --> 0:06:13.039 to pay that credit card off not only on time, 0:06:13.120 --> 0:06:15.920 but in full. Anytime we talk about credit cards, it's 0:06:15.960 --> 0:06:17.640 always the first thing that we want to make sure 0:06:17.640 --> 0:06:21.200 to cover. But it's also important to be strategic about 0:06:21.240 --> 0:06:23.800 how and when you open your new cards. The question 0:06:23.800 --> 0:06:25.919 you might want to ask yourself is you know this 0:06:26.080 --> 0:06:28.960 Delta AMEX, is this the best card for you? Well, 0:06:29.000 --> 0:06:31.760 you know, maybe, like if you really love flying Delta, 0:06:31.760 --> 0:06:33.840 for instance, if you're really brand loyal, this might be 0:06:33.880 --> 0:06:35.640 a card that might make sense for you, But you know, 0:06:35.720 --> 0:06:38.360 you might do better signing up for another card with 0:06:38.440 --> 0:06:41.440 you know, either more flexible rewards or maybe that richer 0:06:41.480 --> 0:06:44.200 sign up bonus. Like Joel mentioned, just because that card 0:06:44.360 --> 0:06:47.240 is shoved in front of your face doesn't mean that 0:06:47.279 --> 0:06:49.400 it's the best one for you. In the same way, 0:06:49.400 --> 0:06:51.200 a lot of times we'll get different credit card offers 0:06:51.240 --> 0:06:52.760 in the mail. Well, just because it shows up in 0:06:52.760 --> 0:06:55.560 our mailbox and we're looking at it, sometimes we think, well, 0:06:55.560 --> 0:06:57.560 it's right here, Mommy's well, go ahead and do it. 0:06:57.640 --> 0:07:00.240 It sounds good like two sign up monus. Maybe I 0:07:00.240 --> 0:07:03.280 should just snag this because they send it to me. 0:07:03.720 --> 0:07:05.640 I must be perfect for this card, or this card 0:07:05.720 --> 0:07:07.920 must be perfect for me. In reality, not so much. Yeah, 0:07:07.920 --> 0:07:09.680 not not always a case, and in fact, most of 0:07:09.680 --> 0:07:11.960 the time not And it's like when you're, you know, 0:07:12.000 --> 0:07:13.800 signing up for a flight, it's like, look, you can 0:07:13.840 --> 0:07:16.200 get your check bags for free if you sign up 0:07:16.200 --> 0:07:18.040 for those credit card, and you're like, dang, that will 0:07:18.080 --> 0:07:20.160 save me forty five dollars. I guess I should do that. 0:07:20.640 --> 0:07:22.800 But in reality it's you know, there's a good chance 0:07:22.840 --> 0:07:24.720 it's not the best credit card for you. But let's 0:07:24.720 --> 0:07:28.040 get to your specific question, John about fixed finance charges, right, 0:07:28.040 --> 0:07:31.120 Because the a p R or annual percentage rate is 0:07:31.160 --> 0:07:33.920 a term that everyone sees whenever they're looking to sign 0:07:34.000 --> 0:07:36.120 up for a credit card. It lets you know what 0:07:36.240 --> 0:07:39.320 you would be charged on an annual basis, uh, if 0:07:39.400 --> 0:07:42.400 you were to not take Matt's advice and you didn't 0:07:42.400 --> 0:07:45.200 pay your bill off on time and in full um 0:07:45.240 --> 0:07:47.320 and basically those those rates are normally in like the 0:07:47.400 --> 0:07:52.040 eighteen percent range. So yeah, some credit card offers will 0:07:52.480 --> 0:07:55.800 charge lower aprs. For instance, like credit unions, you might 0:07:55.840 --> 0:07:57.760 be able to find a card the charges in the 0:07:57.840 --> 0:08:00.560 low double digits. When it comes to the interest rate, UM. 0:08:00.640 --> 0:08:03.000 Other companies will offer like a zero percent a p 0:08:03.200 --> 0:08:05.360 R for a certain time period to entice you to 0:08:05.400 --> 0:08:07.960 sign up, and also they might allow you to transfer 0:08:07.960 --> 0:08:10.559 a balance UH and keep that balance at zero percent 0:08:10.640 --> 0:08:12.520 for a certain amount of time, which can be helpful 0:08:12.560 --> 0:08:13.960 for a lot of folks who are trying to pay 0:08:14.000 --> 0:08:16.000 off credit card debt quickly and they don't want to 0:08:16.040 --> 0:08:18.120 be paying interest at the same time. But yeah, to 0:08:18.200 --> 0:08:20.960 be honest, it's just not something that how the money 0:08:20.960 --> 0:08:24.840 listeners who do hopefully UM pay their credit cards on 0:08:24.880 --> 0:08:26.600 time and in full every month. It's not something they 0:08:26.600 --> 0:08:28.840 should pay a lot of attention to. We think paying 0:08:28.880 --> 0:08:31.200 attention to the rewards and the perks is more important 0:08:31.640 --> 0:08:34.480 because the only way you should be even getting or 0:08:34.600 --> 0:08:37.360 using a credit card is if you're using it wisely, 0:08:37.679 --> 0:08:40.600 and wisely means never paying interest to the credit card companies. 0:08:40.760 --> 0:08:43.680 That's rights. But John, you know, this fixed finance charge 0:08:43.760 --> 0:08:47.040 that you're talking about is actually something different. American Express 0:08:47.080 --> 0:08:51.520 started offering what they call pay it Planet options a 0:08:51.559 --> 0:08:56.120 few years ago, and specifically with the Planet option, they 0:08:56.160 --> 0:08:59.160 are allowing folks to pay off these just different larger 0:08:59.240 --> 0:09:02.760 purchases with a smaller monthly fee, which is the one 0:09:02.800 --> 0:09:05.320 point through three on a monthly basis in the case 0:09:05.400 --> 0:09:08.040 of the card that you have. But if you opt 0:09:08.080 --> 0:09:10.280 not to use the planet feature, then you won't be 0:09:10.280 --> 0:09:13.920 paying the fixed finance charge that you saw. Essentially, this 0:09:14.000 --> 0:09:16.200 is what American Express would call sort of like a 0:09:16.240 --> 0:09:19.640 new feature. But we're not fans of any feature that's 0:09:19.640 --> 0:09:22.960 going to cost you additional money on any of your purchases. Again, 0:09:23.160 --> 0:09:25.480 like this fee shouldn't matter to you because the way 0:09:25.520 --> 0:09:28.400 you're using your credit card exactly, say, actually, don't use 0:09:28.480 --> 0:09:31.240 that feature. It's it's more like a bug in the feature. 0:09:31.640 --> 0:09:34.360 Uh but yeah, yeah, Now the the pay it feature 0:09:34.400 --> 0:09:36.920 is something else, Matt, And that's like, that's totally free 0:09:37.000 --> 0:09:39.319 actually to people. It allows you to immediately pay off 0:09:39.320 --> 0:09:42.320 a charge instead of counting towards your balance at the 0:09:42.320 --> 0:09:45.440 statement closed date. So yeah, this is very similar to 0:09:45.480 --> 0:09:48.640 people wanting to pay their credit card balance like three 0:09:48.720 --> 0:09:50.480 or four times a month, like maybe paying it every 0:09:50.520 --> 0:09:52.120 week in order to make sure that the end of 0:09:52.160 --> 0:09:54.439 the month they don't have a really big bill. Um. 0:09:54.440 --> 0:09:57.120 And it allows some people to budget a little bit better, right, 0:09:57.160 --> 0:09:58.920 And so let's say you just bought something that was 0:09:59.360 --> 0:10:01.160 kind of expend too, and you didn't want to wait 0:10:01.240 --> 0:10:04.000 until the end of the building cycle to pay it off. Well, 0:10:04.080 --> 0:10:06.440 you can use the pay it Now feature and go ahead, 0:10:06.720 --> 0:10:09.679 uh and pay for that item in particular, and so 0:10:09.720 --> 0:10:11.120 that it's not going to show up at the end 0:10:11.120 --> 0:10:13.520 of the month. You're gonna get rid of that charge immediately. 0:10:13.920 --> 0:10:16.720 So yeah, if someone out there is listening and they're 0:10:16.720 --> 0:10:20.160 really diligent about keeping their credit utilization low, this is 0:10:20.200 --> 0:10:22.559 a helpful offering. But it's really no different than just 0:10:22.640 --> 0:10:25.000 choosing to make a payment towards your balance, like I said, 0:10:25.040 --> 0:10:27.480 every week or you know, more frequently than you normally would. 0:10:27.480 --> 0:10:29.679 It's really the same thing. So that's kind of how 0:10:29.840 --> 0:10:33.040 that particular offering from American Express works. But for us, 0:10:33.080 --> 0:10:35.200 it's just a little more in the gimmick department then 0:10:35.240 --> 0:10:37.120 in the it's actually gonna help you out department. Right, 0:10:37.160 --> 0:10:38.800 it's just another like you said, it's another way for 0:10:38.800 --> 0:10:41.400 you to pay down on your balance. And the thing is, 0:10:41.520 --> 0:10:44.319 I think most folks who probably keep up with their 0:10:44.400 --> 0:10:47.000 their balances that closely where they're looking to pay it 0:10:47.040 --> 0:10:49.320 off every week like that, that person probably doesn't need 0:10:49.600 --> 0:10:53.000 a little special button where they're able to pay off 0:10:53.000 --> 0:10:56.199 purchases because they're already paying close attention to what they're 0:10:56.240 --> 0:10:59.200 spending your money on, right. Uh. And so John, you know, 0:10:59.240 --> 0:11:01.480 we want you to avoid paying interest to the credit 0:11:01.520 --> 0:11:04.920 card companies all together. And so, whether this is through 0:11:05.160 --> 0:11:08.600 a monthly installment plan that they offer or just by 0:11:08.640 --> 0:11:10.640 not paying off your balance and full at the end 0:11:10.640 --> 0:11:12.720 of the month, we want you to avoid either one 0:11:12.720 --> 0:11:16.360 of those things, paying any interest or any unnecessary charges 0:11:16.400 --> 0:11:17.959 to the credit card companies. This is going to be 0:11:17.960 --> 0:11:22.040 a recipe for personal finance failure. So, yeah, do use 0:11:22.080 --> 0:11:25.079 your credit cards to your advantage. We actually talked about 0:11:25.080 --> 0:11:27.719 the different suite welcome offers and other benefits back in 0:11:27.840 --> 0:11:30.400 episode three d six a couple of weeks ago. Uh, 0:11:30.440 --> 0:11:32.600 that is how we want you to approach using your 0:11:32.640 --> 0:11:35.160 credit card, John, But even still only take advantage of 0:11:35.160 --> 0:11:37.360 those different benefits if you can avoid all the different 0:11:37.400 --> 0:11:40.800 unnecessary fees and interest payments. Yeah, it's kind of like 0:11:40.880 --> 0:11:42.679 only jumping in the pool if you know how to swim. 0:11:42.840 --> 0:11:44.280 Like That's that's what we can say about using a 0:11:44.280 --> 0:11:46.640 credit card, Like, don't you know, don't even give your 0:11:46.640 --> 0:11:49.679 toes in. It's a lot of fun. It's great. Uh, 0:11:49.720 --> 0:11:52.200 Because then maticon pushing in the back, and then you're like, oh, yeah, 0:11:52.320 --> 0:11:54.040 if you know how to tread water, if you don't 0:11:54.040 --> 0:11:55.719 know how to tread water, that it's something you want 0:11:55.720 --> 0:11:58.360 to avoid completely exactly. I like that analogy. All right, 0:11:58.559 --> 0:12:01.120 We've got a few more questions to you to including 0:12:01.160 --> 0:12:03.559 how do you handle it if you make enough money 0:12:03.559 --> 0:12:05.560 that it's actually going to increase how much you have 0:12:05.640 --> 0:12:07.920 to pay towards your student loans. Will get to that 0:12:08.000 --> 0:12:19.160 question right in for this break. All right, we're back. 0:12:19.160 --> 0:12:21.040 We're gonna talk here in a little bit about some 0:12:21.080 --> 0:12:24.240 different hidden expenses when it comes to investing your money. 0:12:24.400 --> 0:12:26.240 But first let's take that question that has to do 0:12:26.280 --> 0:12:29.840 with student loan forgiveness and reduced student loan monthly payments. 0:12:30.559 --> 0:12:32.840 My name is Heather and I am a public school 0:12:32.840 --> 0:12:36.920 teacher from Chicago. So I have over a hundred thousand 0:12:36.960 --> 0:12:40.319 dollars in student loan debt. But being a public servant, 0:12:40.480 --> 0:12:43.320 I will hopefully qualify for loan forgiveness, but I'm still 0:12:43.320 --> 0:12:46.839 about seven years off from this. My salary is fixed 0:12:46.840 --> 0:12:49.120 by my teachers union, so there's very few ways for 0:12:49.160 --> 0:12:52.240 me to increase my income. I can't really negotiate a salary, 0:12:52.600 --> 0:12:55.520 so I teach after school programs in summer school. To 0:12:55.600 --> 0:12:59.080 do this, I'm trying to pay off about twenty dollars 0:12:59.080 --> 0:13:02.680 in low interests debt under five percent. I have private 0:13:02.679 --> 0:13:05.319 student loans from undergrad and a used car loan, which 0:13:05.360 --> 0:13:07.720 is why I do extra things to make extra cash 0:13:07.720 --> 0:13:11.720 to pay these down quickly. The problem is, this small 0:13:11.800 --> 0:13:14.920 increase in income could bump me out of eligibility for 0:13:14.960 --> 0:13:19.720 income driven repayment plans barely by like hundreds of dollars. 0:13:20.440 --> 0:13:22.680 Does it make sense to increase my income to pay 0:13:22.679 --> 0:13:26.079 off these debts quickly if I risk losing income driven 0:13:26.120 --> 0:13:29.439 repayment and needing to make astronomical student loan payments. If 0:13:29.480 --> 0:13:31.880 my student loan payments increased, I would have no margin 0:13:32.040 --> 0:13:34.440 to save in my emergency fund or my wrath IRA 0:13:35.240 --> 0:13:37.880 or anything else. Really, thanks for all your help. I've 0:13:37.960 --> 0:13:40.760 learned so much by listening to you guys. All right, Heather, 0:13:40.920 --> 0:13:42.560 thank you so much for your question, and thank you 0:13:42.600 --> 0:13:46.080 for teaching kids. That's like such a big service amount 0:13:46.080 --> 0:13:48.920 and I feel like I realized already knew teachers were 0:13:49.400 --> 0:13:53.040 provided important service in our society, but I feel like 0:13:53.080 --> 0:13:55.640 I gained an even deeper appreciation. This past year, it 0:13:55.720 --> 0:13:57.480 was a tough year for teachers. Yeah, as far as 0:13:57.520 --> 0:14:00.880 being able to facilitate learning at home, yeah, saying yeah totally, 0:14:00.960 --> 0:14:03.360 And it just it was a much more difficult year 0:14:03.440 --> 0:14:06.760 for every teacher I know trying to do their job 0:14:07.000 --> 0:14:09.600 and learn some sort of new technology and keeping up 0:14:09.600 --> 0:14:12.160 with kids on a screen. It's just like, yeah, completely 0:14:12.160 --> 0:14:15.600 different ballgames. Not easy for for anybody, right, Yeah, And Heather, 0:14:15.640 --> 0:14:17.640 I gotta say to we, we love that you're hustling 0:14:18.000 --> 0:14:21.440 by teaching more to increase your pay getting rid of 0:14:21.600 --> 0:14:24.240 some of that debt. Is that perfect motivation to work 0:14:24.280 --> 0:14:27.080 harder and increase your income. I love that some of 0:14:27.120 --> 0:14:29.960 those pesky year debts that you've got, like the private 0:14:29.960 --> 0:14:32.240 student loans, in the in the youth car, are ones 0:14:32.280 --> 0:14:34.320 that you're working to get rid of quickly. So let's 0:14:34.320 --> 0:14:37.360 talk about how you can make more money without raising 0:14:37.400 --> 0:14:40.640 those student loan payments, because Matt, I think that's important, 0:14:40.680 --> 0:14:42.960 Like Heather, should be increasing your income, but at the 0:14:42.960 --> 0:14:45.720 same time, if it means a much larger student loan payment, 0:14:45.760 --> 0:14:48.000 then I agree, I'd probably sit on my hands too. Well, 0:14:48.040 --> 0:14:49.960 that's the thing, And we're not even gonna talk about 0:14:50.000 --> 0:14:52.280 all the different illegal options where she could break the 0:14:52.360 --> 0:14:56.680 law do some tax evasion. Obviously we can't and we'll 0:14:56.720 --> 0:14:59.400 not recommend you do any of those things either. But 0:14:59.560 --> 0:15:01.560 Speci Bigally, at the very end of your question, you 0:15:01.600 --> 0:15:04.720 said something. You said that you're contributing to a roth ira, 0:15:04.920 --> 0:15:07.960 which is very valuable information here for your question. There 0:15:07.960 --> 0:15:10.160 are very many situations where we would suggest that anyone 0:15:10.200 --> 0:15:13.440 who is eligible to do so not contribute to a 0:15:13.520 --> 0:15:15.720 roth ira. Yeah, yeah, that is that answer rarely comes 0:15:15.720 --> 0:15:18.200 out of our mouth, like, no, don't contribute exactly, But Heather, 0:15:18.320 --> 0:15:22.240 in your case, contributing to a traditional ira instead of 0:15:22.240 --> 0:15:24.400 that rath is going to be the best idea for 0:15:24.440 --> 0:15:26.680 the time being. This is going to go a long way. 0:15:26.720 --> 0:15:29.880 Is when it comes to lowering your adjusted gross income 0:15:30.120 --> 0:15:33.280 and allow you to earn additional money while continuing to 0:15:33.400 --> 0:15:36.200 invest for your future. Yeah, exactly. Like, since the government 0:15:36.320 --> 0:15:38.800 uses your adjusted gross income your a g I to 0:15:38.840 --> 0:15:42.360 determine whether or not you qualify for the different public 0:15:42.400 --> 0:15:44.960 service loan forgiveness programs, you want to make sure that 0:15:45.000 --> 0:15:47.640 your a g I isn't too high. And since traditional 0:15:47.640 --> 0:15:51.280 iras are funded with pre tax money, those contributions will 0:15:51.520 --> 0:15:54.400 lower your a GS, whereas like contributing money to a 0:15:54.480 --> 0:15:57.640 roth doesn't do that because it's funded with post tax dollars, right, 0:15:57.960 --> 0:16:00.320 So yeah, because of that, you don't see any auction 0:16:00.680 --> 0:16:03.840 in your income from those contributions. And for most people 0:16:03.880 --> 0:16:06.640 were like, that's okay, not a big deal. But for you, 0:16:07.440 --> 0:16:10.520 so it is exactly so that one simple change is 0:16:10.560 --> 0:16:12.800 likely going to be enough to reduce your a g I, 0:16:12.840 --> 0:16:15.440 allowing you to make more money without raising you know, 0:16:15.480 --> 0:16:18.000 what you'll pay on your student loans. Plus you can 0:16:18.040 --> 0:16:20.920 always do a wrath conversion years down the road once 0:16:20.920 --> 0:16:23.280 your student loans are paid off, like seven years from now. 0:16:23.320 --> 0:16:25.800 I guess is what you said. So yeah, for now, 0:16:25.840 --> 0:16:28.520 we would say, keep contributing to your retirement accounts, but 0:16:28.600 --> 0:16:31.520 contribute to a traditional ira instead, so do you can 0:16:31.640 --> 0:16:34.360 make more money and still keep investing for your future. 0:16:34.800 --> 0:16:37.920 But the wrath for the time being just isn't your friend, 0:16:38.160 --> 0:16:41.120 which again is one of the few times we've ever 0:16:41.360 --> 0:16:43.960 said that because we love the rath ira, it's probably 0:16:44.000 --> 0:16:45.720 I mean, it might even be the reason why you 0:16:45.720 --> 0:16:47.920 have started a roth ira, Heather, But in this case, 0:16:47.960 --> 0:16:50.840 it does make sense to switch gears and open up 0:16:50.840 --> 0:16:53.160 a traditional ira and you can start funding that one 0:16:53.240 --> 0:16:56.200 instead of your wrath. And so yeah, this is essentially 0:16:56.240 --> 0:16:58.320 how you're gonna be able to have your cake and 0:16:58.440 --> 0:17:00.280 eat it too. You know, we don't want you to 0:17:00.360 --> 0:17:04.960 be discouraged or disincentivized from working hard and earning more money, 0:17:05.119 --> 0:17:06.840 but we also don't want you to miss out on 0:17:06.880 --> 0:17:10.560 any student loan forgiveness that you might be eligible for. Uh. 0:17:10.560 --> 0:17:12.520 And here's the thing too, as you're likely going to 0:17:12.560 --> 0:17:15.000 continue to hustle and earn more, right because you listen 0:17:15.040 --> 0:17:17.800 to how the money you're getting after it, consider what 0:17:17.880 --> 0:17:21.399 other retirement plans might be available to you through the 0:17:21.440 --> 0:17:23.760 school where you work. You might even have access to 0:17:24.000 --> 0:17:26.400 either a four three B or a four fifty seven 0:17:26.400 --> 0:17:29.959 B that could further reduce your adjusted gross income your 0:17:30.000 --> 0:17:32.520 a g I if you continue to make more money 0:17:32.520 --> 0:17:34.680 down the road. Like Joel said, you've got like seven 0:17:34.720 --> 0:17:38.760 more years while you are still within this program. But 0:17:39.000 --> 0:17:41.359 you know what, if you have two years left in 0:17:41.400 --> 0:17:43.239 the program, you've you know, you've gotten to where you're 0:17:43.240 --> 0:17:45.600 earning a ton more. Will realize that this is a 0:17:45.720 --> 0:17:48.560 lever that you could pull yet again to sock away 0:17:48.560 --> 0:17:51.440 even more money, more money that you're gonna have invested. Uh, 0:17:51.480 --> 0:17:54.320 that's gonna be set aside for your retirement. I love it. 0:17:54.359 --> 0:17:56.560 But I love that there's just this one simple thing 0:17:56.640 --> 0:17:59.679 that Heather can do to basically make sure that she's not, 0:17:59.760 --> 0:18:02.160 you know, working over too many of her dollars every 0:18:02.160 --> 0:18:04.520 month towards those student loans that are ultimately going to 0:18:04.560 --> 0:18:08.000 be forgiven tax free. Yeah, you don't want to screw 0:18:08.080 --> 0:18:10.760 that up. Ye. Make sure you're crossing your eyes, dot 0:18:10.760 --> 0:18:12.720 and your teeth on that, Heather. But best of luck 0:18:12.760 --> 0:18:15.680 to you, um and yeah, get that traditional IRA started. 0:18:15.720 --> 0:18:18.000 All right. Now, let's get to uh, the next question 0:18:18.080 --> 0:18:19.719 that we're gonna take on the show. This one. This 0:18:19.760 --> 0:18:21.879 one's about where you invest and there might not be 0:18:21.920 --> 0:18:24.560 any mention of fees, but does that mean that fees 0:18:24.600 --> 0:18:28.879 don't exist? Hey, fellas, this is Josh here from North Carolina. 0:18:29.119 --> 0:18:32.240 I am twenty three years old. I'm a recent college 0:18:32.240 --> 0:18:35.879 graduate from e c U and I have been contributing 0:18:35.920 --> 0:18:39.320 to both my brokerage account and roth IRA for about 0:18:39.359 --> 0:18:43.399 two years now. I am in love with the podcast. 0:18:43.720 --> 0:18:46.199 It's uh, it's been I feel like I found my 0:18:46.320 --> 0:18:49.440 why with money, and I thank you guys for that. 0:18:50.280 --> 0:18:53.560 I have a question, though, I was wondering if there 0:18:53.640 --> 0:18:56.800 was any kind of hidden expenses that you might uh 0:18:57.000 --> 0:18:59.199 need to look out for if you were to invest 0:18:59.800 --> 0:19:03.480 in Voo or b t I, specifically through a cash 0:19:03.560 --> 0:19:07.000