Speaker 1: Welcome to How the Money. I'm Joel and I am Matt.
Speaker 1: Today we are answering your listener questions. That's right, Joel,
Speaker 1: we have a listener questions Monday episode. Here. We've got
Speaker 1: several awesome questions that we're gonna get to, including one
Speaker 1: about the hidden expenses that a company investing and this
Speaker 1: one's from a recent college graduate that's asking that one.
Speaker 1: We also have a question about how to avoid the
Speaker 1: negative impact on your income based repayment plans when you
Speaker 1: have student loans because you're earning too much money. That's
Speaker 1: an interesting predicament to find yourself in. And we're gonna
Speaker 1: get to our thoughts on buying a vacation property. Plus
Speaker 1: we've got two other great questions that we're gonna get
Speaker 1: to today on this episode. Nice sounds, other comment keep
Speaker 1: stretching it out. I look forward to it. Yeah, there's
Speaker 1: there's some good ones that we're gonna talk about today,
Speaker 1: and some some of these subjects we haven't really talked
Speaker 1: about that much. So before we get there, Matt, I
Speaker 1: wanted to just mention I don't really get on Twitter
Speaker 1: very much. I feel like Twitter is more of a
Speaker 1: time suck for me. If I do get on it,
Speaker 1: and I don't know, I don't really get a whole
Speaker 1: lot out of it, but I did stumble upon this
Speaker 1: talking about all the different ways that Twitter is the worse,
Speaker 1: But then you're gonna talk about something that you love
Speaker 1: about tonight. So there's this one worthwhile follow that is
Speaker 1: really just a sign time stuck too, because it's uh
Speaker 1: TikTok investors is the the the handle, and so it's
Speaker 1: just literally someone posting videos over and over like every
Speaker 1: day of somebody giving idiotic investment advice intment advice. Yeah.
Speaker 1: So if you're like on Twitter on the rag and
Speaker 1: you occasionally, you know, want to chuckle in your feed,
Speaker 1: that's definitely something that's worth worth checking out. There a
Speaker 1: lot of like terrible crypto advice or just investing advice
Speaker 1: in general, just like this nineteen year old who's driving
Speaker 1: like fancy cars and houses and it's like, gosh, I
Speaker 1: get it all from the bank. Yeuys, it's like cool man,
Speaker 1: that's called debt. It's what nobody is that free? Yeah. Yeah,
Speaker 1: make sure that you note that this is for entertainment
Speaker 1: purposes only. We're not endorsing any of those pieces of advice.
Speaker 1: I thought you were gonna try to get me to
Speaker 1: get on TikTok. Well you can if you want to.
Speaker 1: I think we we have our handle claim we just
Speaker 1: haven't started using. But yeah, we've got how the Money pod.
Speaker 1: But I'm not really interested in jumping on another social
Speaker 1: media platform doesn't necessarily align with my personal goals, which is, yeah,
Speaker 1: like you said, trying to avoid time disappearing at all
Speaker 1: the different random hours of the day. You know. Like
Speaker 1: I read something recently where they talked about how we
Speaker 1: have so many different things now that distract us and
Speaker 1: keep us from essentially being bored where And it's those
Speaker 1: times of being bored that we often times find the
Speaker 1: motivation to do something like meaningful or impact or really good. Uh,
Speaker 1: it's not the best ideas come from sometimes too, It's
Speaker 1: like we're missing out sometimes on the inspirational idea that
Speaker 1: pops into your brain, you know, Like now it feels
Speaker 1: like the shower is the only place where you have
Speaker 1: any of that for you for room to think, you know,
Speaker 1: and even then, I I've heard of folks listening to
Speaker 1: podcasts in the shower because you know, the newer phones
Speaker 1: are all waterproof. Is yours waterproof? I don't think so. Okay, Well,
Speaker 1: while all the newer iPhones, they all are rated to
Speaker 1: a to a certain level, and so folks are just
Speaker 1: bringing their phone into the shower, just setting it up
Speaker 1: there on the shelf. You can even do that, but man,
Speaker 1: I've started to it's a sacred place though. Yeah, it is. Seriously.
Speaker 1: I mean for me literally, the ability to not really
Speaker 1: let my mind actively think about anything, just to let
Speaker 1: it wander. Not only is it a cleansing from you know,
Speaker 1: for the outside of my body, but I feel like
Speaker 1: it's almost like this mental clearing away before I go
Speaker 1: to sleep. I'm a night shower. By the way, we
Speaker 1: talked about this before night showering for life. You and
Speaker 1: your early morning showers canna get out of here? Man,
Speaker 1: All right, well you don't have to get hustle about it,
Speaker 1: but uh no, I agree. I think, yeah, the the
Speaker 1: being board a little bit more would probably be a
Speaker 1: good thing for us in general. Um. But yeah, but
Speaker 1: if you're on Twitter TikTok investors, well I'll link to
Speaker 1: that in the show notes exactly. Yeah. Do you know
Speaker 1: if there's an Instagram equivalent, because I feel like Instagram
Speaker 1: is more of my social media. I don't love to
Speaker 1: look it up. I've got someone started that. Yeah, all right, Matt, Well,
Speaker 1: let's keep moving on. Let's mention the beer that we're
Speaker 1: having on the show today. This one is called the
Speaker 1: Bane and the Blithe. It's a wild Ale by New
Speaker 1: Grass Brewing Company. You picked this one up while you're
Speaker 1: in North Carolina, so looking forward to drinking this very
Speaker 1: interesting wild they all made with prickly pair. Yeah. We'll
Speaker 1: talk about this at the end of the episode and
Speaker 1: forward to it. But let's get to sublsit. Our questions
Speaker 1: for folks out there who you know might have a
Speaker 1: money question or maybe a tangentially related question that maybe
Speaker 1: uh more, maybe it's more lifestyle, but it has something
Speaker 1: to do with money. We'd love to talk about it
Speaker 1: on the show. You know, you can go to our
Speaker 1: website how to money dot com slash ask. It's really
Speaker 1: simple to submit your question to us and hopefully we
Speaker 1: can take it on an upcoming episode. Matt, let's get
Speaker 1: to that. The first question for this EPISO, this one
Speaker 1: is about a random finance charge that you might get
Speaker 1: if you sign up for a specific credit card. Hi, man, Joel,
Speaker 1: this is John from Beaverton, Oregon. I was planning a
Speaker 1: trip for myself and my wife with Delta. But when
Speaker 1: I got to the final page where you pay, I
Speaker 1: saw an offered to apply for the American Express Delta
Speaker 1: Sky Mouse card. It offered a nice bonus statement credit
Speaker 1: and a nice bonus miles on your first purchase. But
Speaker 1: when I looked at the rates and fees page, I
Speaker 1: noticed a plan fee or a fixed finance charge of
Speaker 1: one point three What is a plan fee and how
Speaker 1: does it affect our coincide with the a p R.
Speaker 1: I love the podcast, all right, Joel, let's talk about
Speaker 1: credit cards. First of all, you gotta love those credit
Speaker 1: card sign of bonuses, right, They can can be a
Speaker 1: really nice incentive to get us to open up a
Speaker 1: new credit card. Specifically, we've recently talked about the Chase
Speaker 1: Sapphire Preferred Man. If you have not taken advantage of
Speaker 1: a sign up bonus recently, that is definitely one to
Speaker 1: consider because fifty dollars and that is a lot of
Speaker 1: money that's available. It's pretty rich, it is. And we'll
Speaker 1: make sure to link to our credit cards article in
Speaker 1: our show notes for this episode. But John, so for
Speaker 1: you make sure that when you open a new credit
Speaker 1: card and you start spending that you have the money
Speaker 1: to pay that credit card off not only on time,
Speaker 1: but in full. Anytime we talk about credit cards, it's
Speaker 1: always the first thing that we want to make sure
Speaker 1: to cover. But it's also important to be strategic about
Speaker 1: how and when you open your new cards. The question
Speaker 1: you might want to ask yourself is you know this
Speaker 1: Delta AMEX, is this the best card for you? Well,
Speaker 1: you know, maybe, like if you really love flying Delta,
Speaker 1: for instance, if you're really brand loyal, this might be
Speaker 1: a card that might make sense for you, But you know,
Speaker 1: you might do better signing up for another card with
Speaker 1: you know, either more flexible rewards or maybe that richer
Speaker 1: sign up bonus. Like Joel mentioned, just because that card
Speaker 1: is shoved in front of your face doesn't mean that
Speaker 1: it's the best one for you. In the same way,
Speaker 1: a lot of times we'll get different credit card offers
Speaker 1: in the mail. Well, just because it shows up in
Speaker 1: our mailbox and we're looking at it, sometimes we think, well,
Speaker 1: it's right here, Mommy's well, go ahead and do it.
Speaker 1: It sounds good like two sign up monus. Maybe I
Speaker 1: should just snag this because they send it to me.
Speaker 1: I must be perfect for this card, or this card
Speaker 1: must be perfect for me. In reality, not so much. Yeah,
Speaker 1: not not always a case, and in fact, most of
Speaker 1: the time not And it's like when you're, you know,
Speaker 1: signing up for a flight, it's like, look, you can
Speaker 1: get your check bags for free if you sign up
Speaker 1: for those credit card, and you're like, dang, that will
Speaker 1: save me forty five dollars. I guess I should do that.
Speaker 1: But in reality it's you know, there's a good chance
Speaker 1: it's not the best credit card for you. But let's
Speaker 1: get to your specific question, John about fixed finance charges, right,
Speaker 1: Because the a p R or annual percentage rate is
Speaker 1: a term that everyone sees whenever they're looking to sign
Speaker 1: up for a credit card. It lets you know what
Speaker 1: you would be charged on an annual basis, uh, if
Speaker 1: you were to not take Matt's advice and you didn't
Speaker 1: pay your bill off on time and in full um
Speaker 1: and basically those those rates are normally in like the
Speaker 1: eighteen percent range. So yeah, some credit card offers will
Speaker 1: charge lower aprs. For instance, like credit unions, you might
Speaker 1: be able to find a card the charges in the
Speaker 1: low double digits. When it comes to the interest rate, UM.
Speaker 1: Other companies will offer like a zero percent a p
Speaker 1: R for a certain time period to entice you to
Speaker 1: sign up, and also they might allow you to transfer
Speaker 1: a balance UH and keep that balance at zero percent
Speaker 1: for a certain amount of time, which can be helpful
Speaker 1: for a lot of folks who are trying to pay
Speaker 1: off credit card debt quickly and they don't want to
Speaker 1: be paying interest at the same time. But yeah, to
Speaker 1: be honest, it's just not something that how the money
Speaker 1: listeners who do hopefully UM pay their credit cards on
Speaker 1: time and in full every month. It's not something they
Speaker 1: should pay a lot of attention to. We think paying
Speaker 1: attention to the rewards and the perks is more important
Speaker 1: because the only way you should be even getting or
Speaker 1: using a credit card is if you're using it wisely,
Speaker 1: and wisely means never paying interest to the credit card companies.
Speaker 1: That's rights. But John, you know, this fixed finance charge
Speaker 1: that you're talking about is actually something different. American Express
Speaker 1: started offering what they call pay it Planet options a
Speaker 1: few years ago, and specifically with the Planet option, they
Speaker 1: are allowing folks to pay off these just different larger
Speaker 1: purchases with a smaller monthly fee, which is the one
Speaker 1: point through three on a monthly basis in the case
Speaker 1: of the card that you have. But if you opt
Speaker 1: not to use the planet feature, then you won't be
Speaker 1: paying the fixed finance charge that you saw. Essentially, this
Speaker 1: is what American Express would call sort of like a
Speaker 1: new feature. But we're not fans of any feature that's
Speaker 1: going to cost you additional money on any of your purchases. Again,
Speaker 1: like this fee shouldn't matter to you because the way
Speaker 1: you're using your credit card exactly, say, actually, don't use
Speaker 1: that feature. It's it's more like a bug in the feature.
Speaker 1: Uh but yeah, yeah, Now the the pay it feature
Speaker 1: is something else, Matt, And that's like, that's totally free
Speaker 1: actually to people. It allows you to immediately pay off
Speaker 1: a charge instead of counting towards your balance at the
Speaker 1: statement closed date. So yeah, this is very similar to
Speaker 1: people wanting to pay their credit card balance like three
Speaker 1: or four times a month, like maybe paying it every
Speaker 1: week in order to make sure that the end of
Speaker 1: the month they don't have a really big bill. Um.
Speaker 1: And it allows some people to budget a little bit better, right,
Speaker 1: And so let's say you just bought something that was
Speaker 1: kind of expend too, and you didn't want to wait
Speaker 1: until the end of the building cycle to pay it off. Well,
Speaker 1: you can use the pay it Now feature and go ahead,
Speaker 1: uh and pay for that item in particular, and so
Speaker 1: that it's not going to show up at the end
Speaker 1: of the month. You're gonna get rid of that charge immediately.
Speaker 1: So yeah, if someone out there is listening and they're
Speaker 1: really diligent about keeping their credit utilization low, this is
Speaker 1: a helpful offering. But it's really no different than just
Speaker 1: choosing to make a payment towards your balance, like I said,
Speaker 1: every week or you know, more frequently than you normally would.
Speaker 1: It's really the same thing. So that's kind of how
Speaker 1: that particular offering from American Express works. But for us,
Speaker 1: it's just a little more in the gimmick department then
Speaker 1: in the it's actually gonna help you out department. Right,
Speaker 1: it's just another like you said, it's another way for
Speaker 1: you to pay down on your balance. And the thing is,
Speaker 1: I think most folks who probably keep up with their
Speaker 1: their balances that closely where they're looking to pay it
Speaker 1: off every week like that, that person probably doesn't need
Speaker 1: a little special button where they're able to pay off
Speaker 1: purchases because they're already paying close attention to what they're
Speaker 1: spending your money on, right. Uh. And so John, you know,
Speaker 1: we want you to avoid paying interest to the credit
Speaker 1: card companies all together. And so, whether this is through
Speaker 1: a monthly installment plan that they offer or just by
Speaker 1: not paying off your balance and full at the end
Speaker 1: of the month, we want you to avoid either one
Speaker 1: of those things, paying any interest or any unnecessary charges
Speaker 1: to the credit card companies. This is going to be
Speaker 1: a recipe for personal finance failure. So, yeah, do use
Speaker 1: your credit cards to your advantage. We actually talked about
Speaker 1: the different suite welcome offers and other benefits back in
Speaker 1: episode three d six a couple of weeks ago. Uh,
Speaker 1: that is how we want you to approach using your
Speaker 1: credit card, John, But even still only take advantage of
Speaker 1: those different benefits if you can avoid all the different
Speaker 1: unnecessary fees and interest payments. Yeah, it's kind of like
Speaker 1: only jumping in the pool if you know how to swim.
Speaker 1: Like That's that's what we can say about using a
Speaker 1: credit card, Like, don't you know, don't even give your
Speaker 1: toes in. It's a lot of fun. It's great. Uh,
Speaker 1: Because then maticon pushing in the back, and then you're like, oh, yeah,
Speaker 1: if you know how to tread water, if you don't
Speaker 1: know how to tread water, that it's something you want
Speaker 1: to avoid completely exactly. I like that analogy. All right,
Speaker 1: We've got a few more questions to you to including
Speaker 1: how do you handle it if you make enough money
Speaker 1: that it's actually going to increase how much you have
Speaker 1: to pay towards your student loans. Will get to that
Speaker 1: question right in for this break. All right, we're back.
Speaker 1: We're gonna talk here in a little bit about some
Speaker 1: different hidden expenses when it comes to investing your money.
Speaker 1: But first let's take that question that has to do
Speaker 1: with student loan forgiveness and reduced student loan monthly payments.
Speaker 1: My name is Heather and I am a public school
Speaker 1: teacher from Chicago. So I have over a hundred thousand
Speaker 1: dollars in student loan debt. But being a public servant,
Speaker 1: I will hopefully qualify for loan forgiveness, but I'm still
Speaker 1: about seven years off from this. My salary is fixed
Speaker 1: by my teachers union, so there's very few ways for
Speaker 1: me to increase my income. I can't really negotiate a salary,
Speaker 1: so I teach after school programs in summer school. To
Speaker 1: do this, I'm trying to pay off about twenty dollars
Speaker 1: in low interests debt under five percent. I have private
Speaker 1: student loans from undergrad and a used car loan, which
Speaker 1: is why I do extra things to make extra cash
Speaker 1: to pay these down quickly. The problem is, this small
Speaker 1: increase in income could bump me out of eligibility for
Speaker 1: income driven repayment plans barely by like hundreds of dollars.
Speaker 1: Does it make sense to increase my income to pay
Speaker 1: off these debts quickly if I risk losing income driven
Speaker 1: repayment and needing to make astronomical student loan payments. If
Speaker 1: my student loan payments increased, I would have no margin
Speaker 1: to save in my emergency fund or my wrath IRA
Speaker 1: or anything else. Really, thanks for all your help. I've
Speaker 1: learned so much by listening to you guys. All right, Heather,
Speaker 1: thank you so much for your question, and thank you
Speaker 1: for teaching kids. That's like such a big service amount
Speaker 1: and I feel like I realized already knew teachers were
Speaker 1: provided important service in our society, but I feel like
Speaker 1: I gained an even deeper appreciation. This past year, it
Speaker 1: was a tough year for teachers. Yeah, as far as
Speaker 1: being able to facilitate learning at home, yeah, saying yeah totally,
Speaker 1: And it just it was a much more difficult year
Speaker 1: for every teacher I know trying to do their job
Speaker 1: and learn some sort of new technology and keeping up
Speaker 1: with kids on a screen. It's just like, yeah, completely
Speaker 1: different ballgames. Not easy for for anybody, right, Yeah, And Heather,
Speaker 1: I gotta say to we, we love that you're hustling
Speaker 1: by teaching more to increase your pay getting rid of
Speaker 1: some of that debt. Is that perfect motivation to work
Speaker 1: harder and increase your income. I love that some of
Speaker 1: those pesky year debts that you've got, like the private
Speaker 1: student loans, in the in the youth car, are ones
Speaker 1: that you're working to get rid of quickly. So let's
Speaker 1: talk about how you can make more money without raising
Speaker 1: those student loan payments, because Matt, I think that's important,
Speaker 1: Like Heather, should be increasing your income, but at the
Speaker 1: same time, if it means a much larger student loan payment,
Speaker 1: then I agree, I'd probably sit on my hands too. Well,
Speaker 1: that's the thing, And we're not even gonna talk about
Speaker 1: all the different illegal options where she could break the
Speaker 1: law do some tax evasion. Obviously we can't and we'll
Speaker 1: not recommend you do any of those things either. But
Speaker 1: Speci Bigally, at the very end of your question, you
Speaker 1: said something. You said that you're contributing to a roth ira,
Speaker 1: which is very valuable information here for your question. There
Speaker 1: are very many situations where we would suggest that anyone
Speaker 1: who is eligible to do so not contribute to a
Speaker 1: roth ira. Yeah, yeah, that is that answer rarely comes
Speaker 1: out of our mouth, like, no, don't contribute exactly, But Heather,
Speaker 1: in your case, contributing to a traditional ira instead of
Speaker 1: that rath is going to be the best idea for
Speaker 1: the time being. This is going to go a long way.
Speaker 1: Is when it comes to lowering your adjusted gross income
Speaker 1: and allow you to earn additional money while continuing to
Speaker 1: invest for your future. Yeah, exactly. Like, since the government
Speaker 1: uses your adjusted gross income your a g I to
Speaker 1: determine whether or not you qualify for the different public
Speaker 1: service loan forgiveness programs, you want to make sure that
Speaker 1: your a g I isn't too high. And since traditional
Speaker 1: iras are funded with pre tax money, those contributions will
Speaker 1: lower your a GS, whereas like contributing money to a
Speaker 1: roth doesn't do that because it's funded with post tax dollars, right,
Speaker 1: So yeah, because of that, you don't see any auction
Speaker 1: in your income from those contributions. And for most people
Speaker 1: were like, that's okay, not a big deal. But for you,
Speaker 1: so it is exactly so that one simple change is
Speaker 1: likely going to be enough to reduce your a g I,
Speaker 1: allowing you to make more money without raising you know,
Speaker 1: what you'll pay on your student loans. Plus you can
Speaker 1: always do a wrath conversion years down the road once
Speaker 1: your student loans are paid off, like seven years from now.
Speaker 1: I guess is what you said. So yeah, for now,
Speaker 1: we would say, keep contributing to your retirement accounts, but
Speaker 1: contribute to a traditional ira instead, so do you can
Speaker 1: make more money and still keep investing for your future.
Speaker 1: But the wrath for the time being just isn't your friend,
Speaker 1: which again is one of the few times we've ever
Speaker 1: said that because we love the rath ira, it's probably
Speaker 1: I mean, it might even be the reason why you
Speaker 1: have started a roth ira, Heather, But in this case,
Speaker 1: it does make sense to switch gears and open up
Speaker 1: a traditional ira and you can start funding that one
Speaker 1: instead of your wrath. And so yeah, this is essentially
Speaker 1: how you're gonna be able to have your cake and
Speaker 1: eat it too. You know, we don't want you to
Speaker 1: be discouraged or disincentivized from working hard and earning more money,
Speaker 1: but we also don't want you to miss out on
Speaker 1: any student loan forgiveness that you might be eligible for. Uh.
Speaker 1: And here's the thing too, as you're likely going to
Speaker 1: continue to hustle and earn more, right because you listen
Speaker 1: to how the money you're getting after it, consider what
Speaker 1: other retirement plans might be available to you through the
Speaker 1: school where you work. You might even have access to
Speaker 1: either a four three B or a four fifty seven
Speaker 1: B that could further reduce your adjusted gross income your
Speaker 1: a g I if you continue to make more money
Speaker 1: down the road. Like Joel said, you've got like seven
Speaker 1: more years while you are still within this program. But
Speaker 1: you know what, if you have two years left in
Speaker 1: the program, you've you know, you've gotten to where you're
Speaker 1: earning a ton more. Will realize that this is a
Speaker 1: lever that you could pull yet again to sock away
Speaker 1: even more money, more money that you're gonna have invested. Uh,
Speaker 1: that's gonna be set aside for your retirement. I love it.
Speaker 1: But I love that there's just this one simple thing
Speaker 1: that Heather can do to basically make sure that she's not,
Speaker 1: you know, working over too many of her dollars every
Speaker 1: month towards those student loans that are ultimately going to
Speaker 1: be forgiven tax free. Yeah, you don't want to screw
Speaker 1: that up. Ye. Make sure you're crossing your eyes, dot
Speaker 1: and your teeth on that, Heather. But best of luck
Speaker 1: to you, um and yeah, get that traditional IRA started.
Speaker 1: All right. Now, let's get to uh, the next question
Speaker 1: that we're gonna take on the show. This one. This
Speaker 1: one's about where you invest and there might not be
Speaker 1: any mention of fees, but does that mean that fees
Speaker 1: don't exist? Hey, fellas, this is Josh here from North Carolina.
Speaker 1: I am twenty three years old. I'm a recent college
Speaker 1: graduate from e c U and I have been contributing
Speaker 1: to both my brokerage account and roth IRA for about
Speaker 1: two years now. I am in love with the podcast.
Speaker 1: It's uh, it's been I feel like I found my
Speaker 1: why with money, and I thank you guys for that.
Speaker 1: I have a question, though, I was wondering if there
Speaker 1: was any kind of hidden expenses that you might uh
Speaker 1: need to look out for if you were to invest
Speaker 1: in Voo or b t I, specifically through a cash
Speaker 1: app or a robin Hood account. Um, I would love
Speaker 1: the feedback. I will gladly get you all beer down
Speaker 1: the down the line. Thanks guys. First of all, e
Speaker 1: c U and that the Pirates, and that where or
Speaker 1: our buddy Pat went to college Eastern Carolina. It's a
Speaker 1: good school. I think I actually saw recently a picture
Speaker 1: of the baseball fielder. It was either their Appalachian state,
Speaker 1: and it looks like it's in a forest basically like
Speaker 1: the prettiest thing I've ever seen, the prettiest picture of
Speaker 1: a baseball field ever. So I bet it was ECU
Speaker 1: because app state that's like literally in the mountains in it. Yeah,
Speaker 1: I think so. All right, Well, I don't know, I'm
Speaker 1: gonna look up the picture. Maybe I'll post a link
Speaker 1: to it in the show notes. Uh well, Josh, thank
Speaker 1: you for that craft beer offer. But more importantly, man,
Speaker 1: finding your why is huge. This is something that doesn't
Speaker 1: get talked about enough in the world of personal finance,
Speaker 1: but having this ultimate goal for your money, or even
Speaker 1: just like a five to ten year goal has incredible
Speaker 1: power to motivate you into you know, and for you
Speaker 1: to make the right moves with your money. And so yeah,
Speaker 1: we're really punned for you, man. Uh, that you've been
Speaker 1: able to identify this so early on in your working
Speaker 1: career is huge. I think oftentimes folks start working and
Speaker 1: they don't have that ultimate goal and they're basically setting
Speaker 1: off on this path of dissatisfaction either with their work
Speaker 1: or with how much of their earning because they always
Speaker 1: feel like that there has to be something, uh else,
Speaker 1: there's gonna be just a little bit more, and maybe
Speaker 1: once that happens, then there is satisfaction or something that's realized.
Speaker 1: But for you, it sounds like you've got that goal
Speaker 1: in mind, so excellent job. Yeah. Most people, i think
Speaker 1: contribute to retirement accounts out of this like sense that
Speaker 1: they're supposed to and less out of a sense of
Speaker 1: and that's like the best funding of their future, right yeah,
Speaker 1: or they're just not at all. Yeah, so that's obviously
Speaker 1: better than not doing it at all. But having you know,
Speaker 1: a purpose behind it is going to help fuel those investments,
Speaker 1: is gonna actually encourage you to do that. If you
Speaker 1: can connect you know, what you're doing with an ultimate goal,
Speaker 1: that's crucial, that's clutch in the personal finance game. Well,
Speaker 1: uh yeah, Josh, you are doing a great job. But
Speaker 1: let's also you know, talk about the hidden expenses that
Speaker 1: you asked about when it comes to where you're actually
Speaker 1: buying those funds. And we love the funds that you're choosing,
Speaker 1: funds like VOO and v t I because those are
Speaker 1: gonna be able to provide you lots of diversification. Since
Speaker 1: you've been listening for a while, you know how important
Speaker 1: we think that it is. But for everyone else, that's
Speaker 1: Vanguard's smpt F and their Total Stock Market et F.
Speaker 1: Those are two of our favorite funds for you to
Speaker 1: consider with a ton of diversification exactly. Yeah, it's if
Speaker 1: not thousands of stocks exactly. And that is just like
Speaker 1: a one stop shop, a one stop, low cost way
Speaker 1: for you to get invested while being properly diversified. And
Speaker 1: you know, Josh mentioned the cash app. I love that app.
Speaker 1: To Matt. That's a way that I transfer money back
Speaker 1: and forth to friends or a tenant will will maybe
Speaker 1: pay rent be the cash app, and I think that's wonderful.
Speaker 1: That way, I don't have to deal with actual paper
Speaker 1: checks anymore, which is great. But yeah, cash App, robin Hood,
Speaker 1: they're not ideal when it comes to investing in our
Speaker 1: favorite index funds or e t s. That is not
Speaker 1: the direction we point you in. We think there are
Speaker 1: better places to actually be buying those funds than an
Speaker 1: app like the cash apper robin Hood. Yeah, that's right.
Speaker 1: And you know, the biggest reason to Josh isn't because
Speaker 1: these apps charge you higher fees to invest, but it's
Speaker 1: because cash app and robin hood they don't allow you
Speaker 1: to open an ira a on their platforms. It sounds
Speaker 1: like you do have a wroth and you are maxing
Speaker 1: that out. But for everyone else out there, this is
Speaker 1: why we prefer M one to those alternative investing app platforms.
Speaker 1: You can go to how the Money dot com forward
Speaker 1: slash m one to learn more about why we like
Speaker 1: M one a lot better. It's got a lot of
Speaker 1: the similarities to the other apps that people love, but
Speaker 1: because you can open a traditional or a roth ira
Speaker 1: a with M one, we feel that it is a
Speaker 1: much better choice. And that's because it's really important to
Speaker 1: be taking advantage of those tax advantaged vehicles before you
Speaker 1: even think about opening up a brokerage account. It's not
Speaker 1: that brokerage accounts are bad, but we want to make
Speaker 1: sure that you have things in the right order first. Yeah,
Speaker 1: that's true. So, yeah, that's one reason that we're not
Speaker 1: big fans of telling people to go to cash app
Speaker 1: for robin Hood's open accounts. But the the other downside
Speaker 1: of these apps we've mentioned before is because there's a
Speaker 1: potential for negative consequences based on our behavior, for because
Speaker 1: of how we interact with these apps. Right, Like Matt,
Speaker 1: I recently did open up a robin Hood account and
Speaker 1: I just invested a little money on the platform, mostly
Speaker 1: just to test it out, right, and I feel like
Speaker 1: it had an enormous impact on how much I thought
Speaker 1: about my investments and my desire to trade more frequently.
Speaker 1: And actually, when you take a look at the numbers
Speaker 1: for how many times a day, not not a week,
Speaker 1: but a day that robin Hood investors look at the app,
Speaker 1: it's the average investor, I think, looks at the app
Speaker 1: and opens it up something like seven times a day,
Speaker 1: and that is completely unhealthy. You know, we're fans of
Speaker 1: telling people to open up their statements once or twice
Speaker 1: a year, but seven times a day is just insanity, right,
Speaker 1: So there's just something about it being your fingertips and
Speaker 1: having super slick interface that makes you want to open
Speaker 1: it like you would Candy Crush, right and start gaming
Speaker 1: a little bit or words with friends. I don't know
Speaker 1: if anybody plays in anymore, going back to like just
Speaker 1: like that constant desire to avoid being bored, right, because
Speaker 1: oftentimes if you're if there's just a lull during the day,
Speaker 1: or you're sitting at as traffic light and you're looking
Speaker 1: for that quick little pick me up, you're kind of
Speaker 1: crossing your fingers hoping that maybe your about your your
Speaker 1: account balance has gone up, your portfolio has risen in value,
Speaker 1: and if not, you might be tempted to make a
Speaker 1: quick shale or like, I don't know, bail on something.
Speaker 1: It's a bad approach to investing exactly. Yeah. So, so
Speaker 1: I think even if Josh just has to go with
Speaker 1: him one which we much prefer to to some of
Speaker 1: these other apps, uh, we would say considered not actually
Speaker 1: downloading the app and only using the desktop interface because
Speaker 1: having it at your fingertips on your phone is what's
Speaker 1: going to get a lot of people in trouble. Yeah,
Speaker 1: and so Josh. The only other literal expenses associated with
Speaker 1: specific funds are their expense ratios, which are both point
Speaker 1: zero three percent for both vo as well as vt I,
Speaker 1: And that's for the year, right, And so that cost
Speaker 1: is slowly taken out of the value of the e
Speaker 1: T F over the course of the year. And so
Speaker 1: for example, let's say you bought one share of VOO
Speaker 1: at around four and so assuming it didn't go up
Speaker 1: or down in value at all over the course of
Speaker 1: the year, it would actually decrease in value by twelve cents.
Speaker 1: That over the course of one year, if you're gonna
Speaker 1: see it decreased by point zero three percent, you're looking
Speaker 1: at twelve cents, which isn't a ton of money. I mean,
Speaker 1: it is really money. There's more than that in my
Speaker 1: couch cushions. So let's be honest, that's true. So that's
Speaker 1: not a reason to go with or to avoid a
Speaker 1: certain fund if you're looking at an expense ratio that
Speaker 1: is that small. And so ultimately you know there are
Speaker 1: no hidden expenses, just those expenses that are listed out
Speaker 1: there with particularly e T s, and you can you know,
Speaker 1: whatever E t F or fund that you're thinking about investing,
Speaker 1: and you can always just google UH. It's simple plus
Speaker 1: expense ratio and it'll pull up exactly what they're charging.
Speaker 1: So it's not like some hidden fee. It's out there
Speaker 1: in the open for everyone to see. It's usually on
Speaker 1: their side or morning Star does a good job tracking
Speaker 1: fund fees and then kind of giving you a little
Speaker 1: more insight about the fund. Always like love that site
Speaker 1: if I'm tracking you know, a particular fund, which I'm
Speaker 1: not usually because I stick to the most basic of
Speaker 1: all funds, which are yeah, the VT SAX or VOO
Speaker 1: like that, That's what I'm into exactly. Yeah. And so
Speaker 1: you've got those expenses and then other than that, the
Speaker 1: only the other expenses you're gonna see are the potential
Speaker 1: tax implications when the time does come to withdraw some
Speaker 1: money from those different accounts. So for instance, with a
Speaker 1: traditional IRA or with a brokerage account, you are going
Speaker 1: to be paying taxes on the growth that you're going
Speaker 1: to see within those UH funds there. But with a RATH,
Speaker 1: just like we talked about with Heather there earlier on,
Speaker 1: you've already paid taxes on that money that goes into
Speaker 1: a wrath, so it sits there and grows tax free,
Speaker 1: you get to withdraw it tax free, and so there
Speaker 1: are zero tax implications when it comes to ross. That's
Speaker 1: one of the reasons why we love it so much.
Speaker 1: And so just be prepared from a tax standpoint. Uh,
Speaker 1: if you are putting money either in a traditional IRA
Speaker 1: or into a brokerage account as well, no doubt so
Speaker 1: hidden expenses not really maybe in the traditional sense, but
Speaker 1: hopefully we give you some other really important things to
Speaker 1: look out for that could cost you money if you
Speaker 1: were to start investing on one of these other platforms.
Speaker 1: All right, let's get to a couple more questions, including
Speaker 1: one about buying a vacation property, but not just for
Speaker 1: your own pleasure to write it out. Is that a
Speaker 1: good idea. Well, we'll get to that and more right
Speaker 1: after this break. M all right, we are back taking
Speaker 1: listener questions here on this Monday, and we're gonna get
Speaker 1: to that vacation property question here a little bit. But
Speaker 1: first let's talk about teaching high school students about personal finances. Hi, man, Joel,
Speaker 1: my name's Jacob and I'm from Texas and I'm a
Speaker 1: high school teacher and I would really like to do
Speaker 1: a personal finance unit this year with some of my
Speaker 1: high schoolers, and I was wondering if you had any
Speaker 1: recommendations for topics I could cover, or if you know
Speaker 1: of any curriculum that is specifically for the high school
Speaker 1: age students. Some of them are just starting to get
Speaker 1: their first jobs, and I want to make sure that
Speaker 1: they get some solid financial knowledge before they graduate. Big
Speaker 1: fan of the show, Thank you very much for answering
Speaker 1: my question. All right, Matt, it's the teacher episode out
Speaker 1: of Money today. I love that. So Jacob not only
Speaker 1: teaching kids but then teaching them about personal finance. That's
Speaker 1: something that we're all about, and we've talked about, Matt,
Speaker 1: the dearth of personal finance education that's happening in the
Speaker 1: school today. It's a major disappointment, UM, and it sets
Speaker 1: a lot of kids up for failure. So what Jacob
Speaker 1: is doing not only seeking to teach kids something about
Speaker 1: personal finance, but trying to make it interesting and covering
Speaker 1: the right topics is is great, like because that's it's
Speaker 1: a crucial time, UM at that age to get some
Speaker 1: practical knowledge that most kids graduate without. So and everything
Speaker 1: around them is screaming the wrong message. Like I mentioned
Speaker 1: at the top of the episode, the TikTok investors that
Speaker 1: might be those might be some of the things that
Speaker 1: they're seeing in their feet as they're checking out social media.
Speaker 1: They might be getting the wrong advice, And so it's
Speaker 1: at least helpful to have a smart teacher who cares
Speaker 1: about them counteracting some of that advice and giving them
Speaker 1: some of the right information that they mean. You could
Speaker 1: even probably develop an entire curriculum around just debunking some
Speaker 1: of the TikTok investing uh personal finance advice that they
Speaker 1: would see, right, Basically, that might actually make it kind
Speaker 1: of fun, Like, yeah, picking apart in those arguments, like
Speaker 1: somebody's argument on TikTok and saying this is why they're
Speaker 1: this is why this is mostly false, Like here's the
Speaker 1: one kernel of truth in here. But in reality, this
Speaker 1: is not what you want to be doing with your money.
Speaker 1: But I think that's I mean, you you sort of
Speaker 1: said this about just making it interesting, Joe, But I
Speaker 1: think that's what's really important here is just to make
Speaker 1: sure that you're making it engaging. Right. One of the
Speaker 1: biggest things I think we've learned doing how the money
Speaker 1: is that just how the message comes across determines how
Speaker 1: receptive people will be to it. Jacob, I'm assuming like
Speaker 1: you're probably drawn to the show because, in your opinion,
Speaker 1: you find it interesting, whereas if it was I don't know,
Speaker 1: just like two older guys even just sitting there just
Speaker 1: kind of reading from a textbook sort of thing. You're
Speaker 1: just talking like King James Version English or something like that,
Speaker 1: you'd be like, I can't deal with these and vows
Speaker 1: like that's not my jam, I don't get it. But
Speaker 1: it's it's it's about finding a way to just make
Speaker 1: it seem more approachable, so that it's a little more
Speaker 1: digestible and something that people want to engage with. There's
Speaker 1: certainly a way to bore people into a coma when
Speaker 1: talking about a subject, and there's a way to excite
Speaker 1: them towards an interest in ideas that you're going to
Speaker 1: be discussing. And so as a teacher, obviously you know
Speaker 1: you know that already, but it just bears repeating and
Speaker 1: it kind of makes me think of we've talked about
Speaker 1: how we learned about stocks back in elementary school. Even
Speaker 1: you know the stock market game where you pick a
Speaker 1: stock and you quote unquote invested it and you see
Speaker 1: how it does. Well, that was a lot of fun.
Speaker 1: It was really interesting because I mean, that's it's it's
Speaker 1: a part of the reason why it's something that you
Speaker 1: and I remember, Joel, because obviously it was fun, right,
Speaker 1: But the problem is is that it saw us the
Speaker 1: exact wrong thing. So that was an example of like, well,
Speaker 1: it was interesting, it was an engaged in vidual stock
Speaker 1: short time. It's like what are we doing? But the
Speaker 1: lessons that were gained from that hopefully didn't stick with
Speaker 1: a lot of folks and hopefully they kind of grew
Speaker 1: out of that. But obviously you need to make sure
Speaker 1: that the what you're teaching is actually accurate as well.
Speaker 1: And so yeah, how it is that you can spice
Speaker 1: up the concepts of compounding returns or diversification, you know,
Speaker 1: just the basic principle of spending less than you make.
Speaker 1: These are all the different concepts that you're gonna want
Speaker 1: to cover, uh, And those are some of the questions
Speaker 1: that I would be asking myself. How can I make
Speaker 1: those specific topics more engaging and more interesting. Yeah, I'd
Speaker 1: want to make it interactive, I'd want to make it physical.
Speaker 1: I'd wanna you know, make it feel real. Yeah, yeah,
Speaker 1: you have a visceral reaction to to what's being taught.
Speaker 1: And so yeah, that's the question I'd be asking myself.
Speaker 1: I think if I was a teacher trying to teach
Speaker 1: young kids about personal finance, like what what is the
Speaker 1: way that they're best at receiving information? And then how
Speaker 1: can I communicate to them in in that way? And
Speaker 1: and there's also there's a nonprofit called Next Gen Personal
Speaker 1: Finance which does a phenomenal job advocating for personal finance
Speaker 1: education in schools around the country. UM. And they're actually
Speaker 1: one of the reasons that I want to say something
Speaker 1: along the lines of close to like twenty five state
Speaker 1: legislatures have introduced legislation this year alone to try to
Speaker 1: mandate personal finance education in schools. UM. And so yeah,
Speaker 1: that that is a great place to turn as a teacher.
Speaker 1: They have like lessons and resources along with professional development
Speaker 1: to help make you a better teacher of this subject.
Speaker 1: And so yeah, that the website is in GPF dot
Speaker 1: org and to site you should definitely check out. We'll
Speaker 1: link to that in the show notes. But I love
Speaker 1: what they're doing and I love that not only are
Speaker 1: they just advocating, you know, on the political scene, but
Speaker 1: they're also trying to support and help teachers in the
Speaker 1: meantime because even in the states where it is mandatory,
Speaker 1: a lot of teachers don't have the support or the
Speaker 1: knowledge to you know, teach those classes well and next
Speaker 1: gen personal finances. Trying to say we got your back
Speaker 1: on that. You know, we've got your back, We've got
Speaker 1: the materials because in a lot of those states too,
Speaker 1: I mean, sometimes it's not necessarily required to be a
Speaker 1: standalone course. It can just kind of be a unit
Speaker 1: that they cover within maybe open into U S History
Speaker 1: and yeah, or just like a general kind of business class,
Speaker 1: that kind of thing. And we would also highly suggest
Speaker 1: that you listen to our episode back with Dan LaSalle.
Speaker 1: This is episode ninety eight. It's a while ago, but
Speaker 1: Dan has done incredible work with students in an inner
Speaker 1: city setting, not just by teaching them the concepts, but
Speaker 1: by putting money into their hands for work and then
Speaker 1: letting them see those actual dollars at work with how
Speaker 1: they choose to spend that money or invest that money.
Speaker 1: And so now Dan isn't with a specific school anymore.
Speaker 1: He's actually working to help other teachers in school systems
Speaker 1: implement personal finance classes that don't just completely suck, which
Speaker 1: let's be honest, probably a lot of them out there do.
Speaker 1: And often that's not the fault of the teacher, Like
Speaker 1: they were passionate about another subject and then they had
Speaker 1: you know, someone of the administration said, hey, guess what,
Speaker 1: now you're teaching a personal finance class this year. And
Speaker 1: they're like, Okay, okay, I got I used to teach history,
Speaker 1: and I'm gonna make it just as exciting as history was.
Speaker 1: It's like Professor Bins and Harry Potter or maybe they're
Speaker 1: good at teaching history, but they're not going to teach
Speaker 1: finance because they don't care about or they don't have
Speaker 1: the passion for it exactly. So there's all sorts of
Speaker 1: like hurdles that need to be overcome. But Dan is passionate,
Speaker 1: uh and he's done great work in that regard. So yeah,
Speaker 1: he's a great resource to turn to as well. We
Speaker 1: we actually put another teacher who listens to how the
Speaker 1: money in touch with Dan recently he's already helping him
Speaker 1: create a curriculum for his class in New Jersey. So yeah,
Speaker 1: we'll we'll do the same for you and make that introduction. Jacob.
Speaker 1: Dan is just this fantastic resource. He's done so much
Speaker 1: legwork developing and implementing a successful personal finance program. I
Speaker 1: don't think you have to start from scratch here, look
Speaker 1: to some of these resources that have already been built,
Speaker 1: that are doing good work, and then piggyback on top
Speaker 1: of those in order to create an effective teaching platform
Speaker 1: at your school. And so yeah, we'll actually put Dan's
Speaker 1: email in the show notes because he told us that
Speaker 1: was okay. And so any teacher out there who's maybe
Speaker 1: listening and they're saying, well, I want my kids to
Speaker 1: at least, you know, get a couple of days of
Speaker 1: personal finance education while they're under my wings. Because I
Speaker 1: care about this a whole lot um, reaching out to
Speaker 1: Dan could be really helpful. So yeah, great question, Jacob.
Speaker 1: Best of luck making that engaging in fun this year.
Speaker 1: And Matt, let's get to the next question. This one
Speaker 1: is about buying a rental property in a sunny spot. Hi,
Speaker 1: How to Money Team. My name is Katie and I
Speaker 1: live in Southbury, Connecticut. I recently started listening to the
Speaker 1: show and it's gotten me revisiting the ultimate stretch goal
Speaker 1: for my life of owning vacation rental properties in places
Speaker 1: that I enjoy visiting that could be used for short
Speaker 1: term rental while I'm not there. I love the idea
Speaker 1: of the condo hotel. I've seen these a lot near
Speaker 1: Disney World, but I believe they also exist in some
Speaker 1: other touristy areas. And as I understand this type of
Speaker 1: property arrangement, the owner essentially purchases a hotel room and
Speaker 1: pays h o A fees in addition to their mortgage
Speaker 1: so that the property management company takes care of bookings, cleanings, maintenance.
Speaker 1: But please correct me if I'm wrong in that assumption.
Speaker 1: My questions are, do you guys have any opinions or
Speaker 1: advice on this type of property and what would be
Speaker 1: red flags that you would look out for. I'm sure
Speaker 1: it varies by property, but in general, do the owners
Speaker 1: of a unit even make enough profit to cover the
Speaker 1: h o A fees? And are there any addition KNOWL
Speaker 1: fees to look out for that the property management company
Speaker 1: might be charging beyond the h o fees? Thank you
Speaker 1: so much. I love the show alright, Katie. First, I
Speaker 1: love that you're pursuing this stretch goal of yours. Uh,
Speaker 1: you know, magical money progress can happen when you have
Speaker 1: these big goals that we're trying to achieve. It's part
Speaker 1: of why we were so pumped when we're talking with
Speaker 1: that recent college grad. The ability for him to latch
Speaker 1: onto the why behind his money and for you having
Speaker 1: this goal that you're setting out after it is great.
Speaker 1: And so I think without those different, audacetionous goals that
Speaker 1: we set for ourselves, it can be so much easier
Speaker 1: to just spend that money more freely instead of saving
Speaker 1: and investing to reach the big goal that you've got
Speaker 1: set out there before you. Yeah, it's so easy to
Speaker 1: kind of fritter your money away in little dribs and
Speaker 1: drabs unless you have that big goal and then it's like,
Speaker 1: oh no, no no, now I'm ready, Like I am funneling
Speaker 1: all my extra money towards this instead. But if you
Speaker 1: don't have that, it's like, Okay, I guess I'll buy
Speaker 1: that little new higgy or do dad or whatever it
Speaker 1: may be. Those big goals really do help connect the
Speaker 1: flow of your money to the places that you actually
Speaker 1: wanted to go, not just spending it mindlessly. But let's
Speaker 1: let's talk about vacation rental properties. Mat It's it's really important,
Speaker 1: I would say, for Katie to get to the bottom
Speaker 1: of why she wants to do this. And yeah, we
Speaker 1: just talked about it's this, this long, long term goal,
Speaker 1: but I kind of want to go another layer deeper.
Speaker 1: I want to say, why is that that this is
Speaker 1: a goal of years? Is it to make money? If so, well,
Speaker 1: vacation rental properties aren't usually the best way to do that.
Speaker 1: There are better ways to invest in real estate that
Speaker 1: will almost assuredly be more profitable and far easier to manage.
Speaker 1: So I guess the next question, maybe is it for
Speaker 1: a free place to stay at the beach? Well, depending
Speaker 1: on how often you get there, you might find that free, right, Yeah,
Speaker 1: it sounds nice to have somebody else paying your mortgage
Speaker 1: and you get to go stay there a couple of
Speaker 1: weeks out of the year, But that's not always how
Speaker 1: it works out. You might find that it's easier and
Speaker 1: cheaper to just get an airbnb or a hotel when
Speaker 1: you're there twice a year. The upkeep, the maintenance, and
Speaker 1: the managing costs, all of those things might mean that
Speaker 1: it costs actually way more to have this vacation rental
Speaker 1: than it would cost to rent someone else's spot when
Speaker 1: you're visiting. So, yeah, I know this is your goal,
Speaker 1: but why is it your goal? I would ask. Answering
Speaker 1: those questions, it's going to give you some really important
Speaker 1: insight as to whether or not this is a smart
Speaker 1: move for you as well. Yeah, so let'skind of dive
Speaker 1: into the numbers here a little bit um. The first
Speaker 1: one is how long you plan on owning this vacation property.
Speaker 1: Since this is a long term goal, it does sound
Speaker 1: like this is a property that you plan on holding
Speaker 1: onto for some time, and that's great, but we want
Speaker 1: to point out that it actually needs to be this
Speaker 1: long term move in order for it to make sense
Speaker 1: from a number standpoint, right, you know, on top of that,
Speaker 1: you want to try to figure out, like what is
Speaker 1: the likely profit going to be? You're asking about some
Speaker 1: of the different costs. It truly is going to come
Speaker 1: down to the specific property that you're looking at, and
Speaker 1: so it's going to require a lot of due diligence
Speaker 1: when it comes to crunching the numbers to see from
Speaker 1: a financial standpoint, if it makes sense or what it
Speaker 1: is that you're willing to sign on the dotted line
Speaker 1: for because the different kind of hotels that you're talking about,
Speaker 1: they often come with a split um and that actually
Speaker 1: kind of sounds like a pretty rough split to me.
Speaker 1: And you mentioned the fees, you definitely want to ask
Speaker 1: about the h o A fees. There's gonna be different
Speaker 1: maintenance fees, property management fees. These are all the different
Speaker 1: things that you're going to want to ask about when
Speaker 1: it comes to performing your own due diligence. And here's
Speaker 1: the thing too, Even once you figure out where things
Speaker 1: currently are, just know that those fees, they're not guaranteed
Speaker 1: to stay the same. So, for instance, if you look
Speaker 1: into the h o A and UH, you find out
Speaker 1: that they don't have much money in the reserves, well,
Speaker 1: there's a really good chance that that fee is going
Speaker 1: to go up in the near future. That you're going
Speaker 1: to see either a special assessment or you're gonna see
Speaker 1: just an overall h o A hike that is likely
Speaker 1: going to drastically affect how much is gonna cost you
Speaker 1: every single year, which in turn could impact your decision
Speaker 1: to either make this deal happen or to not. Yeah,
Speaker 1: I would want to talk to other condo tell owners
Speaker 1: in the unit where you're looking to. I want to
Speaker 1: want to see how's it been for them, how's it
Speaker 1: been working with the property managers? Have they been profitable?
Speaker 1: And kind of like, yeah, what are those numbers look like? Um,
Speaker 1: what's the stress level of voting one of these places?
Speaker 1: What are the homeowners association meetings like? Are they contentious
Speaker 1: because you know there is a lack of funds though,
Speaker 1: I would want to talk to specific individuals who have
Speaker 1: made a similar investment. And ultimately, this is a high
Speaker 1: risk investment, right, Like condo hotels, they're kind of hot
Speaker 1: right now, they're booming and for the next year or two, well,
Speaker 1: they might be more profitable as the economy is doing
Speaker 1: well and people are looking to travel again in big numbers.
Speaker 1: But how long is it gonna stay that way? Well,
Speaker 1: that just depends right on so many bigger macroeconomic trends,
Speaker 1: and the condo hotel route is an even bigger risk,
Speaker 1: I would say than buying like a single family home
Speaker 1: or even the town home that you can rent out. Well,
Speaker 1: it's dependent on tourism, right, It's dependent on on travel
Speaker 1: and people's willingness to spend money on vacation, right, Right,
Speaker 1: and so yeah, even if you went in that direction,
Speaker 1: it's crucial to find an experienced team on the ground
Speaker 1: that can help you manage that property well. And that's
Speaker 1: not always easy to do, right. That takes a lot
Speaker 1: of legwork as well. But we would say, yeah, if
Speaker 1: you're really really interested in the vacation rental market, um,
Speaker 1: and it's kind of that conglomerate and of it's a
Speaker 1: dream of yours and a free place to stay, well,
Speaker 1: it's probably not going to be a free place to stay.
Speaker 1: That's not usually how it works. But there are maybe
Speaker 1: better ways to go about it than going to the
Speaker 1: condo tell route. Yeah, and you know, Katie, we're not
Speaker 1: trying to rain on your parade or but I mean
Speaker 1: we're had of money and so I think you know,
Speaker 1: we tend to put more of an emphasis on the
Speaker 1: numbers on the on the money, right, We just want
Speaker 1: you to go into it with your eyes wide open,
Speaker 1: and we want you to go into it with more
Speaker 1: than enough money to whether any downturns that might come
Speaker 1: along should you find the revenue to be less than
Speaker 1: you expected. So again, from a number standpoint, we feel
Speaker 1: that this is not the best move. But here's the thing.
Speaker 1: There are a lot of things that Joel and I
Speaker 1: spend money on that don't return any money, because to
Speaker 1: us it means a lot. I mean, this is a
Speaker 1: part of why we have the craft beer on every
Speaker 1: single episode. It's something that we really enjoy. It's not
Speaker 1: because there's a return on investment. When it comes to
Speaker 1: the craft beer. Once we drink it, it's gone. We
Speaker 1: have the memories, but that is it. And so you know,
Speaker 1: if you can afford it, that is great. We just
Speaker 1: don't want you to justify, uh I want with an
Speaker 1: idea that this is going to be a great investment.
Speaker 1: If you are going to spend money on this, make
Speaker 1: sure that you're just kind of being honest with yourself
Speaker 1: that you're saying, you know what, we're doing this because
Speaker 1: we've done well with our money over the past, you know,
Speaker 1: ten thirty years, whatever it might be, and this is
Speaker 1: something that we are going to really look forward to
Speaker 1: every single year, twice a year being able to you know,
Speaker 1: head down to that condo, hotel. But we just don't
Speaker 1: want you to talk yourself into thinking that this is
Speaker 1: just going to be a great move When it comes
Speaker 1: to the money, it might be, but it's just really
Speaker 1: hard to tell without knowing the specific property, and you
Speaker 1: are much more likely to see your investment increase in
Speaker 1: value when it comes to either a single family home
Speaker 1: even real estate there where you live. And then you
Speaker 1: could even use those profits to fund being able to
Speaker 1: go to a new Airbnb or even the same house,
Speaker 1: and maybe you discovered just the perfect house and it's
Speaker 1: it's a place that y'all go back to every single year.
Speaker 1: This is one instance where when you combine work with
Speaker 1: a little bit of play, it actually doesn't pan out
Speaker 1: all that great, no doubt. Matt and I can give
Speaker 1: a quick personal example here, like we're doing some work
Speaker 1: to our house, and I could think of it as
Speaker 1: an investment. It's going to make my home more valuable,
Speaker 1: and part of me is tempted to do that, but
Speaker 1: I've chosen to think about it only along the lines
Speaker 1: of the money that we're spending is truly for us
Speaker 1: to be able to enjoy our house more. And it's
Speaker 1: not that it won't increase our home's value. Probably will,
Speaker 1: And were you to sell it, which God forbid, if
Speaker 1: you were to sell it, we're gonna happen right after
Speaker 1: you you finished the renovation, you would get more for it, absolutely,
Speaker 1: but not as much as I'm putting in and all
Speaker 1: like that, right, And so yeah, I just have to
Speaker 1: think about it rationally, or even worse than rationally, like
Speaker 1: put myself in behind the eight ball even more when
Speaker 1: it comes to the money that we're spending, just to
Speaker 1: help me realize, like, this is not an investment really
Speaker 1: in the same way that I like to invest money
Speaker 1: in real estate. This is something very different than that. Um.
Speaker 1: And so Katie, for you, I think thinking about it
Speaker 1: like that too, You're gonna have to have more money
Speaker 1: than you think in order to potentially weather some difficult
Speaker 1: months in the market, um, if you choose to go
Speaker 1: this route. So yeah, we just want you to, like
Speaker 1: Matt said, go in with eyes wide open and make
Speaker 1: a wise decision for yourself. But Matt, that's it for
Speaker 1: listener questions. Let's quickly get back to the beer that
Speaker 1: we had on this episode. This one's called The Bane
Speaker 1: and the Blithe. It's a wild Ale by New Grass Brewing.
Speaker 1: What was your take on on this wildale? Yeah, so
Speaker 1: this was definitely an American wild right. It had a
Speaker 1: lot of acidity, which I absolutely love, and it didn't
Speaker 1: say here on the bottle anywhere if it was aged
Speaker 1: in oak, but it seemed to be it had to
Speaker 1: have been, though, right, Like, it definitely had those okay
Speaker 1: flavors going on, that okay profile. And here's the thing too,
Speaker 1: I like, I don't even know what prickly pear tastes.
Speaker 1: I don't need. The only reference I had in my
Speaker 1: mind was like the movie The Jungle Book. I'm pretty
Speaker 1: sure like blew the bear eats prickly pears in there.
Speaker 1: What's crazy is my third grader she is at prickly
Speaker 1: Pear and she talks about how great it is, and
Speaker 1: I'm like, where the heck was I when you got
Speaker 1: to prickly Pear? And so in this case, she's more
Speaker 1: experienced and wise than I am. Well, and let's be honest,
Speaker 1: in many other areas too. But if prickly Pear tastes
Speaker 1: anything like this beer, I say that I must love it,
Speaker 1: because I really like the way this beer goes down.
Speaker 1: Definitely has those wild American ale notes. Uh, it's good,
Speaker 1: it's a it's decently sour too, man Like, it almost
Speaker 1: has like the Sauer Kraut like flavor profile going on.
Speaker 1: Do you feel that? Yeah, totally it is really sour,
Speaker 1: which I enjoy. And I feel like the the prickly
Speaker 1: pair brought a little bit of like a citrus night
Speaker 1: note to almost like a lime kind of flavor going
Speaker 1: on with this one. And then the oak really balanced
Speaker 1: it out too. So yeah, a few different notes it
Speaker 1: was hitting on, uh, and this one was tasty. Yeah,
Speaker 1: really stinking good in prickly pair in that like the
Speaker 1: fruit that's on cactus. I think so, yeah, I think
Speaker 1: so too. Probably let's say yes, I'm not totally sure.
Speaker 1: I feel like this is something I should know. Again,
Speaker 1: if my daughter is here, she'd be like, no, dad,
Speaker 1: it's this, or she would say, good job, daddy. Maybe
Speaker 1: she could be my new podcast co host. We can
Speaker 1: have them sit in some one of these days. Actually,
Speaker 1: I mean one of these days we might do that.
Speaker 1: Kids in Money episode slated for release in two years. Yeah,
Speaker 1: all right, well that's gonna do it for this one.
Speaker 1: For folks that want the show notes for this episode
Speaker 1: with some of the links that we mentioned, just go
Speaker 1: to our website how to Money dot com. That's right,
Speaker 1: and we always appreciate any solid reviews left wherever it
Speaker 1: is that you listen to your podcast, So please do that,
Speaker 1: but at the very least, if you haven't yet subscribed
Speaker 1: to the show, we would love it if you were
Speaker 1: to mash that subscribe button on a phone near you.
Speaker 1: Doesn't even have to be your own, Joel, that's gonna
Speaker 1: be it for this episode, Buddy, mash your grandma's subscribe button.
Speaker 1: Until next time. Best Friends Out, Best Friends Out,