1 00:00:00,080 --> 00:00:02,639 Speaker 1: Welcome to How the Money. I'm Joel and I'm Matt, 2 00:00:02,800 --> 00:00:25,120 Speaker 1: and today we are answering your listener questions. Listener questions, 3 00:00:25,200 --> 00:00:27,480 Speaker 1: Joel Man, We've got five great ones, like we do 4 00:00:27,560 --> 00:00:30,080 Speaker 1: every week. We have a listener asking if he can 5 00:00:30,120 --> 00:00:34,000 Speaker 1: say for vacation while he still has student loans. We 6 00:00:34,040 --> 00:00:36,600 Speaker 1: have another listener asking if she should drain her emergency 7 00:00:36,600 --> 00:00:38,560 Speaker 1: fund in order to add onto her house. And we 8 00:00:38,600 --> 00:00:41,160 Speaker 1: have a question to regarding the insurance that your credit 9 00:00:41,200 --> 00:00:43,440 Speaker 1: card provides and how that works when it comes to 10 00:00:43,560 --> 00:00:46,199 Speaker 1: renting a car. Oh Man, that's hard to understand for 11 00:00:46,280 --> 00:00:47,720 Speaker 1: lots of folks. I feel like that's a big pain, 12 00:00:47,720 --> 00:00:50,120 Speaker 1: Like can they use their credit card to get insurance 13 00:00:50,120 --> 00:00:52,519 Speaker 1: coverage for a rental car because it's so expensive and 14 00:00:52,560 --> 00:00:54,760 Speaker 1: so pesky to get out of the candy. You're always 15 00:00:54,760 --> 00:00:56,840 Speaker 1: being up sold and you're always worried about it. Yeah, 16 00:00:56,840 --> 00:00:58,600 Speaker 1: it's kind of one of those things that you always 17 00:00:58,680 --> 00:01:00,480 Speaker 1: know about, but you don't really get far enough down 18 00:01:00,520 --> 00:01:02,840 Speaker 1: that path to have actually made maybe an informed decision. 19 00:01:02,920 --> 00:01:04,880 Speaker 1: So we're hoping by the end of this episode we 20 00:01:04,920 --> 00:01:07,520 Speaker 1: can allow you to make some informed decisions when you 21 00:01:07,560 --> 00:01:09,480 Speaker 1: have some of these questions in your life. All right, Matt, 22 00:01:09,520 --> 00:01:11,640 Speaker 1: Before we get into the listener questions, I wanted to 23 00:01:11,640 --> 00:01:13,760 Speaker 1: tell you I saw one of my buddies recently told 24 00:01:13,760 --> 00:01:16,200 Speaker 1: me that he was listening to Spotify and he heard 25 00:01:16,240 --> 00:01:19,920 Speaker 1: an ad for Vinyl for people to buy vinyl, And 26 00:01:19,959 --> 00:01:21,759 Speaker 1: I just thought that was so odd and such an 27 00:01:21,800 --> 00:01:24,959 Speaker 1: interesting sign of the times that you're listening to streaming 28 00:01:25,040 --> 00:01:28,039 Speaker 1: music and you're hearing an ad for the most old school, 29 00:01:28,080 --> 00:01:30,720 Speaker 1: analog potential way to listen to music, which is which 30 00:01:30,760 --> 00:01:33,760 Speaker 1: is vinyl. And I like Vinyl. I mean I feel like, actually, 31 00:01:33,800 --> 00:01:36,120 Speaker 1: next year, I think vinyl is going to surpass c 32 00:01:36,319 --> 00:01:39,880 Speaker 1: ds in overall sales, like CDs are going completely away. 33 00:01:39,959 --> 00:01:42,480 Speaker 1: That kind of makes sense, Yeah, I kind of get that, right, like, 34 00:01:42,480 --> 00:01:45,640 Speaker 1: because there's something different about vinyl than than discs. Yeah, 35 00:01:45,640 --> 00:01:48,000 Speaker 1: the actual way the vinyl looks and the packaging and everything, 36 00:01:48,040 --> 00:01:50,680 Speaker 1: it's beautiful. It's big whole experience of it. Yeah. And 37 00:01:50,720 --> 00:01:53,360 Speaker 1: then also the sound it's just it's completely different. It's 38 00:01:53,400 --> 00:01:55,840 Speaker 1: it's a much richer, fuller kind of sound that you 39 00:01:55,880 --> 00:01:58,000 Speaker 1: get listening to vinyl than you do just popping a 40 00:01:58,000 --> 00:02:00,120 Speaker 1: CD in. But I just thought that was really interesting. 41 00:02:00,120 --> 00:02:02,680 Speaker 1: And then when you think too about these companies that 42 00:02:02,720 --> 00:02:05,520 Speaker 1: are are starting digital and they're going back into the 43 00:02:05,520 --> 00:02:09,680 Speaker 1: old mediums like Amazon, Like Amazon Amazon opening up book stores, 44 00:02:09,760 --> 00:02:13,080 Speaker 1: opening up stores around the country. And then Netflix, right 45 00:02:13,360 --> 00:02:16,119 Speaker 1: they are there the streaming service, and now they're making 46 00:02:16,160 --> 00:02:18,080 Speaker 1: great movies and they're putting them in the movie theater 47 00:02:18,120 --> 00:02:21,399 Speaker 1: and they're winning like Best Pictures. It's just super interesting 48 00:02:21,480 --> 00:02:24,120 Speaker 1: that that these companies are are starting in the digital 49 00:02:24,200 --> 00:02:26,320 Speaker 1: space and then they're they're actually transitioning kind of back 50 00:02:26,320 --> 00:02:28,720 Speaker 1: into the physical space. Yeah, dude, there's a lot of 51 00:02:28,760 --> 00:02:32,120 Speaker 1: crossover right that's happening with these different companies. And you know, 52 00:02:32,120 --> 00:02:35,040 Speaker 1: when I think a lot of companies like Spotify and Amazon, 53 00:02:35,040 --> 00:02:37,400 Speaker 1: what they've realized is that there are people who value 54 00:02:37,600 --> 00:02:40,840 Speaker 1: something physical, something tangible that you can either experience or 55 00:02:40,919 --> 00:02:43,639 Speaker 1: something that you can touch and hold. There's a lot 56 00:02:43,720 --> 00:02:45,400 Speaker 1: of value there and people are willing to pay for 57 00:02:45,440 --> 00:02:47,520 Speaker 1: that because in the end, these are businesses, right, and 58 00:02:47,560 --> 00:02:49,919 Speaker 1: what they're after is making a profit, So they're gonna 59 00:02:49,919 --> 00:02:51,639 Speaker 1: put something out there that they think is going to 60 00:02:51,680 --> 00:02:54,160 Speaker 1: be successful. And there are a lot of digital aspects 61 00:02:54,200 --> 00:02:56,959 Speaker 1: of our lives. I personally love lots of digital things 62 00:02:57,320 --> 00:03:01,760 Speaker 1: as a lot of convenience. It's really efficient and it's easy. 63 00:03:01,800 --> 00:03:04,679 Speaker 1: But I think I would be like fooling myself if 64 00:03:04,760 --> 00:03:07,359 Speaker 1: I said that I wouldn't be affected by actually being 65 00:03:07,360 --> 00:03:09,240 Speaker 1: able to hold something or the way that I can 66 00:03:09,280 --> 00:03:12,000 Speaker 1: interact with something physically right. And I think what's interesting 67 00:03:12,040 --> 00:03:14,919 Speaker 1: too is to think how that affects how we view 68 00:03:14,919 --> 00:03:18,079 Speaker 1: our money. So, for instance, with photography, I often get 69 00:03:18,080 --> 00:03:20,800 Speaker 1: paid digitally, either with Venmo or a cash app. I 70 00:03:20,800 --> 00:03:22,880 Speaker 1: love those two apps because the money just shows up 71 00:03:22,880 --> 00:03:24,760 Speaker 1: and I transferred over. It's like I just swipe it 72 00:03:24,760 --> 00:03:27,440 Speaker 1: over to my bank account. Basically, I love it. It's 73 00:03:27,440 --> 00:03:31,000 Speaker 1: so great, it's so easy, so convenient. However, that being said, 74 00:03:31,440 --> 00:03:34,679 Speaker 1: occasionally I'll receive a cash tip and I'll get a 75 00:03:34,680 --> 00:03:37,000 Speaker 1: little envelope with some twenties in it, maybe even like 76 00:03:37,000 --> 00:03:39,880 Speaker 1: a hundred dollar bill something like that, And it is 77 00:03:39,920 --> 00:03:42,760 Speaker 1: so weird how that has such a big impact on 78 00:03:42,920 --> 00:03:45,000 Speaker 1: me and how I view the work that I'm doing. 79 00:03:45,440 --> 00:03:48,080 Speaker 1: Like it's a very very small amount, right of like 80 00:03:48,160 --> 00:03:50,040 Speaker 1: the total amount that I've been paid for that job, 81 00:03:50,280 --> 00:03:53,880 Speaker 1: but it has this inordinate impact on how I view 82 00:03:54,120 --> 00:03:56,000 Speaker 1: like the work that I've just done. And it's not 83 00:03:56,000 --> 00:03:59,120 Speaker 1: because I'm not claiming that as wages. Right, like I'm 84 00:03:59,120 --> 00:04:02,360 Speaker 1: paying taxes on that. Something about that actual cash dollar 85 00:04:02,480 --> 00:04:04,600 Speaker 1: amount there, like that you get to hold, it just 86 00:04:04,600 --> 00:04:07,720 Speaker 1: feels more real and it has this different impact than 87 00:04:08,160 --> 00:04:10,400 Speaker 1: digital dollars just kind of transferring and showing up in 88 00:04:10,400 --> 00:04:12,880 Speaker 1: your account. Yeah, I completely agree, well, and I think 89 00:04:12,880 --> 00:04:15,320 Speaker 1: there are all these ways that that something analog, something 90 00:04:15,360 --> 00:04:17,760 Speaker 1: tangible can make a big difference in our lives. And 91 00:04:17,800 --> 00:04:19,960 Speaker 1: when we're talking about money, spending in cash, like that's 92 00:04:20,000 --> 00:04:21,880 Speaker 1: something we're gonna talk about coming up, I don't know, 93 00:04:21,920 --> 00:04:24,120 Speaker 1: maybe the next month or two, but it's actually spending 94 00:04:24,120 --> 00:04:26,000 Speaker 1: in cash can make a big difference in how you 95 00:04:26,040 --> 00:04:29,039 Speaker 1: spend and your ability to curb your impulses. And you 96 00:04:29,040 --> 00:04:30,839 Speaker 1: know what, we just have received like a bunch of 97 00:04:30,839 --> 00:04:34,159 Speaker 1: awesome stuff from people being super generous giving us stuff 98 00:04:34,160 --> 00:04:36,440 Speaker 1: forward the birth of our our new son, and so 99 00:04:36,480 --> 00:04:39,000 Speaker 1: we're writing a bunch of thank you notes out by hand, 100 00:04:39,200 --> 00:04:41,920 Speaker 1: basically thanking them for their generosity and for thinking about 101 00:04:42,000 --> 00:04:44,480 Speaker 1: us in that time. And there's something I know when 102 00:04:44,520 --> 00:04:46,880 Speaker 1: I get an actual thank you note, not just an email, 103 00:04:47,040 --> 00:04:50,040 Speaker 1: but an actual handwritten thank you note, there's something just 104 00:04:50,520 --> 00:04:53,400 Speaker 1: so meaningful about that that someone took the time they 105 00:04:53,440 --> 00:04:56,039 Speaker 1: wrote down how they felt, and then they were moved 106 00:04:56,160 --> 00:04:58,080 Speaker 1: enough to to spend that time and then probably to 107 00:04:58,480 --> 00:05:00,839 Speaker 1: put a stamp on it and mail out my way too. 108 00:05:01,040 --> 00:05:02,800 Speaker 1: That's just such a big deal. It means so much, 109 00:05:02,839 --> 00:05:05,120 Speaker 1: and I do think that these analog things like we 110 00:05:05,160 --> 00:05:07,719 Speaker 1: want to keep them around. We talked to about online 111 00:05:07,760 --> 00:05:10,920 Speaker 1: buying versus shopping in your local store and and how 112 00:05:10,920 --> 00:05:13,880 Speaker 1: there are such great benefits even if it costs you 113 00:05:13,920 --> 00:05:17,880 Speaker 1: more sometimes right to shop locally, not just supporting your community, 114 00:05:17,920 --> 00:05:23,040 Speaker 1: but that visceral experience of shopping, touching, looking and smelling, 115 00:05:23,440 --> 00:05:25,479 Speaker 1: just being all immersed. It's my favorite part of the 116 00:05:25,480 --> 00:05:29,760 Speaker 1: shopping experience. Sniffing everything. It gets weird sometimes it's like, 117 00:05:29,760 --> 00:05:31,880 Speaker 1: there's how the money Matt again is just walking through 118 00:05:31,880 --> 00:05:35,520 Speaker 1: the store, sniff and everything. Yeah. No, I think that's awesome, man, 119 00:05:35,560 --> 00:05:36,960 Speaker 1: And I think that's awesome. You guys are doing some 120 00:05:37,000 --> 00:05:39,960 Speaker 1: thinking notes. Is that you are Emily writing? Yeah, because 121 00:05:40,000 --> 00:05:43,680 Speaker 1: I'm gonna I've seen your your chicken scratch. Folks are like, 122 00:05:44,120 --> 00:05:45,880 Speaker 1: I can't even tell what this guy's writing. You like, 123 00:05:45,960 --> 00:05:47,159 Speaker 1: do you want to try to read it? I don't know. 124 00:05:47,400 --> 00:05:48,919 Speaker 1: They're like, I think he liked the gift, but I 125 00:05:48,920 --> 00:05:50,680 Speaker 1: have no idea because I can't read what he writes. 126 00:05:50,720 --> 00:05:52,560 Speaker 1: There's a lot of exclamation points, so I'm gonna give 127 00:05:52,560 --> 00:05:54,800 Speaker 1: it a thumbs up. That's why I'm thankful for Emily's penmanship, 128 00:05:54,880 --> 00:05:56,719 Speaker 1: that's for sure. All Right, Matt, let's get onto the 129 00:05:56,760 --> 00:05:58,680 Speaker 1: beer that we're having on the show today. Today we're 130 00:05:58,720 --> 00:06:02,080 Speaker 1: drinking Liquid star Dust by Surly Brewing. Tiffany over at 131 00:06:02,120 --> 00:06:04,440 Speaker 1: Surly was super kind kind of enough to send us 132 00:06:04,440 --> 00:06:06,640 Speaker 1: this beer. It's actually funny when when we were emailing, 133 00:06:06,720 --> 00:06:09,159 Speaker 1: she said she just had a conversation with one of 134 00:06:09,160 --> 00:06:11,960 Speaker 1: her friends about four oh one case over beers. So 135 00:06:12,080 --> 00:06:14,160 Speaker 1: Tiffany is our kind of person. Tiffany, thanks for sending 136 00:06:14,200 --> 00:06:15,919 Speaker 1: this beer away. We really appreciate it. And we'll have 137 00:06:15,920 --> 00:06:17,520 Speaker 1: our thoughts on this beer at the end of the show. Yeah, 138 00:06:17,520 --> 00:06:20,000 Speaker 1: thanks Tiffany. All right, Matt, onto the subject at hand. Today, 139 00:06:20,000 --> 00:06:23,040 Speaker 1: we're answering listener questions. And by the way, if anybody 140 00:06:23,160 --> 00:06:25,080 Speaker 1: out there listening has a question that they want us 141 00:06:25,080 --> 00:06:27,360 Speaker 1: to tackle on the show, well there's a really easy 142 00:06:27,360 --> 00:06:29,159 Speaker 1: way to submit your question. Just go to how to 143 00:06:29,240 --> 00:06:31,480 Speaker 1: money dot com slash ask and you can see the 144 00:06:31,520 --> 00:06:33,839 Speaker 1: simple directions there. But let's get on to the first 145 00:06:33,920 --> 00:06:36,880 Speaker 1: question for the show. Hey guys, my name is Jeremy 146 00:06:36,960 --> 00:06:39,760 Speaker 1: cullin in from Dallas, Texas. Thank you guys so much 147 00:06:39,800 --> 00:06:42,279 Speaker 1: for everything you do on the podcast. It's really helpful 148 00:06:42,360 --> 00:06:46,240 Speaker 1: for someone like me who does not really enjoy budgeting 149 00:06:46,360 --> 00:06:48,720 Speaker 1: and looking at spreadsheets and looking at the bank account, 150 00:06:48,800 --> 00:06:52,080 Speaker 1: but you guys make it fun and easily accessible, So 151 00:06:52,279 --> 00:06:55,560 Speaker 1: thanks for everything you do. My question today is related 152 00:06:55,600 --> 00:06:59,520 Speaker 1: to saving for vacation, So really, what I want to 153 00:06:59,520 --> 00:07:01,960 Speaker 1: ask is how do you give yourself the grace or 154 00:07:02,040 --> 00:07:05,679 Speaker 1: freedom to save for vacation while you still have student 155 00:07:05,720 --> 00:07:08,640 Speaker 1: loans to pay off. I have a lot of student 156 00:07:08,680 --> 00:07:10,920 Speaker 1: debt but also want to be able to travel with 157 00:07:11,040 --> 00:07:13,720 Speaker 1: my wife, so I was wondering if you have any 158 00:07:13,760 --> 00:07:18,040 Speaker 1: suggestions on how to find the balance between aggressively paying 159 00:07:18,040 --> 00:07:21,160 Speaker 1: off loans and still taking vacations. I know you guys 160 00:07:21,200 --> 00:07:23,600 Speaker 1: talk a lot about spending money on the things you 161 00:07:23,640 --> 00:07:26,240 Speaker 1: care about, so I would love to hear you address 162 00:07:26,360 --> 00:07:30,200 Speaker 1: this topic specifically. Thanks Jeremy, Thanks so much for your question. 163 00:07:30,280 --> 00:07:33,080 Speaker 1: First thing I gotta say is I hate spreadsheets. To man. 164 00:07:33,160 --> 00:07:36,400 Speaker 1: Matt's the weirdo in this duo. He loves spreadsheets as 165 00:07:36,400 --> 00:07:39,600 Speaker 1: are just haters. I hate spreadsheets, dude, I really do. 166 00:07:39,840 --> 00:07:41,720 Speaker 1: I don't know if it's a personality type any of 167 00:07:41,760 --> 00:07:43,400 Speaker 1: Graham number. I don't know what it is, but man, 168 00:07:43,480 --> 00:07:45,720 Speaker 1: like me and spreadsheets, we don't mix very well. Well, 169 00:07:45,840 --> 00:07:47,560 Speaker 1: just be true to yourself, man, I like the cold, 170 00:07:47,640 --> 00:07:51,600 Speaker 1: hard facts. So Jeremy, what we would recommend obviously, you know, 171 00:07:51,600 --> 00:07:53,680 Speaker 1: it's for you to be able to prioritize your current 172 00:07:53,720 --> 00:07:57,200 Speaker 1: lifestyle goals even while you're getting your debts and your 173 00:07:57,240 --> 00:07:59,960 Speaker 1: savings in order, taking you know, more of that balance 174 00:08:00,040 --> 00:08:02,120 Speaker 1: to approach to our money. Like, that's a huge part 175 00:08:02,160 --> 00:08:05,320 Speaker 1: of the show, and that's what makes personal finance so personal. 176 00:08:05,480 --> 00:08:07,440 Speaker 1: And I think, like I don't know, at least for us, 177 00:08:07,440 --> 00:08:09,000 Speaker 1: when we set out to make this show, Matt, that 178 00:08:09,080 --> 00:08:11,960 Speaker 1: was like the biggest reason behind creative Yeah. Well, first off, 179 00:08:12,000 --> 00:08:14,560 Speaker 1: it was just enjoying the conversation and having a beer. 180 00:08:14,840 --> 00:08:16,920 Speaker 1: But so much of the goal of what we wanted 181 00:08:16,920 --> 00:08:20,960 Speaker 1: to communicate is achieving balance in life and in personal finance. 182 00:08:21,000 --> 00:08:23,080 Speaker 1: And I feel like it in personal finance that part 183 00:08:23,120 --> 00:08:26,040 Speaker 1: of the discussion is missing so often, right exactly. Yeah, 184 00:08:26,040 --> 00:08:27,760 Speaker 1: I mean we try to make personal finance fun because 185 00:08:27,760 --> 00:08:29,720 Speaker 1: it really can be. It can be about the goals 186 00:08:29,760 --> 00:08:32,000 Speaker 1: and focusing on the things that you're striving after. It 187 00:08:32,040 --> 00:08:34,319 Speaker 1: doesn't have to be about the budgets and the spreadsheets 188 00:08:34,559 --> 00:08:36,920 Speaker 1: unless that's your thing and that makes you happy, like 189 00:08:36,960 --> 00:08:40,280 Speaker 1: it does me. But those different goals, right, like that 190 00:08:40,520 --> 00:08:42,280 Speaker 1: is what's at the core of the question here. Your 191 00:08:42,320 --> 00:08:44,760 Speaker 1: goals and the different priorities that you have, Like your 192 00:08:44,800 --> 00:08:47,160 Speaker 1: goals are going to be different than mine. Although I'll 193 00:08:47,200 --> 00:08:48,840 Speaker 1: you know, I'll say that a vacation with my wife, 194 00:08:48,880 --> 00:08:50,839 Speaker 1: like that sounds pretty great. I could get on board 195 00:08:50,920 --> 00:08:53,320 Speaker 1: with that for sure. So because we do take a 196 00:08:53,360 --> 00:08:56,359 Speaker 1: more balanced approach to our finances, we think it's okay 197 00:08:56,400 --> 00:08:59,760 Speaker 1: to spend money on some of the things that are important. 198 00:09:00,040 --> 00:09:01,800 Speaker 1: I think it might be hard to do if you 199 00:09:01,840 --> 00:09:04,120 Speaker 1: see things like really black and white. You know, Jeremy, 200 00:09:04,120 --> 00:09:06,640 Speaker 1: you talked about really paying down your debt aggressively, and 201 00:09:06,640 --> 00:09:08,320 Speaker 1: so in your mind, if you're thinking, man, I can't 202 00:09:08,360 --> 00:09:11,040 Speaker 1: really have any fun, I can't enjoy life until I 203 00:09:11,080 --> 00:09:14,840 Speaker 1: completely knock out that debt. Man, I also oftentimes struggle 204 00:09:14,880 --> 00:09:17,360 Speaker 1: with actually loosening the purse strings and spending money on 205 00:09:17,440 --> 00:09:20,120 Speaker 1: the things that I say that I value. But I 206 00:09:20,120 --> 00:09:22,800 Speaker 1: think that's important to actually give ourselves that permission to 207 00:09:23,080 --> 00:09:25,360 Speaker 1: spend that money. Yeah, And I think it's important to 208 00:09:25,600 --> 00:09:28,320 Speaker 1: have it in black and white, right to actually make 209 00:09:28,360 --> 00:09:31,600 Speaker 1: your budget accordingly and have the numbers reflect your priorities. 210 00:09:31,600 --> 00:09:34,280 Speaker 1: And we we talked about this some back in episode twelve, 211 00:09:34,360 --> 00:09:36,640 Speaker 1: the Why behind Money. But I know for me that 212 00:09:36,880 --> 00:09:38,920 Speaker 1: even when it's in black and white, and I say, 213 00:09:39,040 --> 00:09:40,880 Speaker 1: you know what, I've got this beer budget every month, 214 00:09:41,080 --> 00:09:43,840 Speaker 1: that's really important to me. Even still, I can have 215 00:09:43,880 --> 00:09:46,640 Speaker 1: a hard time actually pulling the credit card out or 216 00:09:46,679 --> 00:09:48,920 Speaker 1: the dollar usually credit cards, pulling it out of my 217 00:09:48,960 --> 00:09:51,880 Speaker 1: wallet to actually buy the beer because I want to 218 00:09:51,920 --> 00:09:54,640 Speaker 1: make sure I go under in my budget for certain things. 219 00:09:54,960 --> 00:09:57,400 Speaker 1: And I've had to fight that urgin myself because I 220 00:09:57,480 --> 00:10:00,400 Speaker 1: realized that I'm actually happier when I do spend my 221 00:10:00,440 --> 00:10:02,920 Speaker 1: money in the way that I have called out as 222 00:10:02,960 --> 00:10:04,480 Speaker 1: being important in my life. And so I think it's 223 00:10:04,480 --> 00:10:06,800 Speaker 1: really important if you have decided that vacations with your 224 00:10:06,840 --> 00:10:09,040 Speaker 1: wife are one of those few things that you want 225 00:10:09,080 --> 00:10:11,560 Speaker 1: to prioritize. And we talked about that in episode twelve, 226 00:10:11,600 --> 00:10:14,760 Speaker 1: like finding those few things that really are meaningful. If 227 00:10:14,840 --> 00:10:17,520 Speaker 1: this is one of those most meaningful things for you, 228 00:10:17,800 --> 00:10:20,000 Speaker 1: well you're probably gonna have to make other choices and 229 00:10:20,000 --> 00:10:22,920 Speaker 1: cut back in other areas in order to make taking 230 00:10:23,000 --> 00:10:25,480 Speaker 1: a nice vacation with your wife every year a reality. 231 00:10:25,720 --> 00:10:27,640 Speaker 1: But I think doing a little bit of that soul 232 00:10:27,640 --> 00:10:30,520 Speaker 1: searching as to what is truly important to you on 233 00:10:30,559 --> 00:10:32,880 Speaker 1: the front end is so helpful, and it actually makes 234 00:10:32,920 --> 00:10:35,320 Speaker 1: it so much easier to then cut back in other 235 00:10:35,360 --> 00:10:37,800 Speaker 1: areas that that aren't very important to you. It makes 236 00:10:37,800 --> 00:10:40,600 Speaker 1: it easier to drive that car a little bit longer, 237 00:10:40,920 --> 00:10:43,600 Speaker 1: or live in a smaller house or in a less 238 00:10:43,640 --> 00:10:45,839 Speaker 1: cool part of town, because you know what, You've got 239 00:10:45,880 --> 00:10:49,080 Speaker 1: this anticipation of this of this awesome European vacation that 240 00:10:49,080 --> 00:10:51,720 Speaker 1: you're gonna take with your wife, because that is something 241 00:10:51,760 --> 00:10:54,400 Speaker 1: that you prioritize more. Which you're talking about things being 242 00:10:54,440 --> 00:10:56,400 Speaker 1: black and white. You know what that sounds like. You're 243 00:10:56,400 --> 00:11:01,240 Speaker 1: talking about Michael Jackson's on a spreadsheet, Like you're talking 244 00:11:01,240 --> 00:11:03,720 Speaker 1: about how much you hate spreadsheets and budgets and whatnot. 245 00:11:03,800 --> 00:11:06,040 Speaker 1: But like, so I'm glad I married Emily because she 246 00:11:06,080 --> 00:11:07,840 Speaker 1: helps me out with that part. I'm really helpful with 247 00:11:08,040 --> 00:11:10,720 Speaker 1: the big picture stuff and thinking through and then talking 248 00:11:10,760 --> 00:11:12,360 Speaker 1: through you know what it's gonna look like spending in 249 00:11:12,360 --> 00:11:15,040 Speaker 1: our lives. But but but then the actual like putting 250 00:11:15,280 --> 00:11:18,400 Speaker 1: pen to paper or keyboard to Excel spreadsheet, like she 251 00:11:18,679 --> 00:11:20,400 Speaker 1: does that part really well for us. H. Well, I mean, 252 00:11:20,440 --> 00:11:22,120 Speaker 1: I think and that's why that that might be part 253 00:11:22,120 --> 00:11:24,160 Speaker 1: of the answer here, is that you know, actually putting 254 00:11:24,160 --> 00:11:26,160 Speaker 1: the numbers down on paper, like that's a budget when 255 00:11:26,200 --> 00:11:27,920 Speaker 1: you've identified what you want to spend your money on 256 00:11:28,000 --> 00:11:30,200 Speaker 1: and then you stick to it. Like that is intentionally 257 00:11:30,200 --> 00:11:32,079 Speaker 1: spending your money, and that's what a budget is all about. 258 00:11:32,360 --> 00:11:34,920 Speaker 1: And Jeremy, we would also maybe challenge you to lower 259 00:11:35,160 --> 00:11:37,800 Speaker 1: the cost of the actual vacations that you're taking while 260 00:11:37,840 --> 00:11:40,120 Speaker 1: you're still in debt, while you still have those student loans. 261 00:11:40,520 --> 00:11:42,520 Speaker 1: You know, for now, I would pick lower cost trips 262 00:11:42,840 --> 00:11:44,880 Speaker 1: if you're still mired in a bunch of school debt. 263 00:11:45,000 --> 00:11:47,640 Speaker 1: This way, you're able to still travel and still spend 264 00:11:47,679 --> 00:11:50,160 Speaker 1: some awesome time together with your wife, but you're both 265 00:11:50,160 --> 00:11:53,080 Speaker 1: still dedicated to getting after those student loans, right, Like 266 00:11:53,120 --> 00:11:55,079 Speaker 1: this is a way to sort of like had your 267 00:11:55,080 --> 00:11:57,280 Speaker 1: cake and eat it too. You know, really this is 268 00:11:57,280 --> 00:11:59,520 Speaker 1: all about the time, because isn't that kind of like 269 00:11:59,520 --> 00:12:01,480 Speaker 1: what's most of portant here. It's not that you necessarily 270 00:12:01,480 --> 00:12:03,840 Speaker 1: want to take some amazing trip, although that's really nice, 271 00:12:03,880 --> 00:12:05,800 Speaker 1: but I gotta think at least half the equation here 272 00:12:05,920 --> 00:12:07,559 Speaker 1: is the quality time that you're gonna be able to 273 00:12:07,559 --> 00:12:10,520 Speaker 1: spend together. And especially these earlier years, it's almost kind 274 00:12:10,559 --> 00:12:12,440 Speaker 1: of fun to see kind of how cheap a vacation 275 00:12:12,520 --> 00:12:14,560 Speaker 1: we can take together and make the most fun of it, 276 00:12:14,600 --> 00:12:16,960 Speaker 1: you know, Oh yeah, completely. The great thing is there 277 00:12:17,000 --> 00:12:19,600 Speaker 1: are so many resources to help you take a cheap vacation. 278 00:12:19,880 --> 00:12:23,079 Speaker 1: It doesn't have to be some all inclusive resort or 279 00:12:23,240 --> 00:12:25,360 Speaker 1: a fancy trip to Europe, although you can. You can 280 00:12:25,400 --> 00:12:27,559 Speaker 1: do Europe pretty cheap these days. But there are all 281 00:12:27,600 --> 00:12:30,480 Speaker 1: these ways to lessen the cost of your vacation, and 282 00:12:30,520 --> 00:12:33,280 Speaker 1: I love I I nerd out on that stuff, and 283 00:12:33,320 --> 00:12:35,680 Speaker 1: I agree Matt. I think for most people it doesn't 284 00:12:35,679 --> 00:12:37,360 Speaker 1: have to be one or the other. And if you're 285 00:12:37,559 --> 00:12:40,640 Speaker 1: intentional and thoughtful, you can take a vacation for a 286 00:12:40,679 --> 00:12:43,520 Speaker 1: super reasonable amount and still get those student loans paid 287 00:12:43,520 --> 00:12:45,520 Speaker 1: down at the same time. And then I think too 288 00:12:45,600 --> 00:12:48,760 Speaker 1: that planning a reward trip as you're kicking butt at 289 00:12:48,800 --> 00:12:50,840 Speaker 1: getting rid of your student loans and reaching debt paid 290 00:12:50,840 --> 00:12:52,920 Speaker 1: down goals, well that's a great way to kind of 291 00:12:53,080 --> 00:12:55,880 Speaker 1: accelerate the process too. If you know that after paying 292 00:12:56,160 --> 00:12:58,480 Speaker 1: down ten thousand dollars in student loan debt, that you're 293 00:12:58,480 --> 00:13:00,920 Speaker 1: gonna be able to buy four our round trip plane 294 00:13:00,920 --> 00:13:03,880 Speaker 1: tickets to Paris, well, then I think that's gonna be 295 00:13:03,920 --> 00:13:07,280 Speaker 1: helpful in in motivating you to resetcle more quickly, so 296 00:13:07,400 --> 00:13:10,240 Speaker 1: while you're traveling on a shoestring budget now, during these 297 00:13:10,240 --> 00:13:12,600 Speaker 1: early years, while you have a lot of student loans, well, 298 00:13:12,679 --> 00:13:15,480 Speaker 1: b big and reward yourself as a final reward for 299 00:13:15,520 --> 00:13:18,600 Speaker 1: completing the debt payoff. Dangle that carrot in front of 300 00:13:18,640 --> 00:13:20,880 Speaker 1: you so that you can take like a fancy trip 301 00:13:20,920 --> 00:13:22,720 Speaker 1: to New Zealand when you're done. I feel like that 302 00:13:22,800 --> 00:13:25,520 Speaker 1: actually can be this really helpful way of compelling you 303 00:13:25,600 --> 00:13:28,040 Speaker 1: to do the smart thing with your money right now 304 00:13:28,280 --> 00:13:30,720 Speaker 1: if you know that there's this bigger reward looming if 305 00:13:30,960 --> 00:13:33,440 Speaker 1: you are able to do that. Yeah, And another consideration 306 00:13:33,480 --> 00:13:35,640 Speaker 1: too is the fact that we're talking about student loans here, 307 00:13:35,640 --> 00:13:39,640 Speaker 1: which traditionally have fairly low interest rates. Right. I think 308 00:13:39,640 --> 00:13:42,079 Speaker 1: this would be a different conversation if we were talking 309 00:13:42,120 --> 00:13:44,600 Speaker 1: about high interest credit card debt. Right, If we're talking 310 00:13:44,600 --> 00:13:46,880 Speaker 1: about an interest rate on a bunch of loans that 311 00:13:47,080 --> 00:13:50,240 Speaker 1: was over. That's more of the kind of all hands 312 00:13:50,280 --> 00:13:52,000 Speaker 1: on deck right, like your hair's on fire. This is 313 00:13:52,040 --> 00:13:54,520 Speaker 1: something that we need to address now. That's like, don't 314 00:13:54,559 --> 00:13:56,959 Speaker 1: take vacations for the next three years. Yeah, exactly, but 315 00:13:57,080 --> 00:13:58,719 Speaker 1: was until you get rid of that. Yeah. But with 316 00:13:58,760 --> 00:14:01,480 Speaker 1: student loans being actually like a lower a p R. 317 00:14:01,559 --> 00:14:03,400 Speaker 1: I mean a lot of student loans are two three four. 318 00:14:04,520 --> 00:14:07,480 Speaker 1: That's not a super high percentage rate. And not to 319 00:14:07,559 --> 00:14:08,959 Speaker 1: say that you don't need to get after that and 320 00:14:09,000 --> 00:14:11,199 Speaker 1: pay that down, but an interest rate in that range 321 00:14:11,240 --> 00:14:13,760 Speaker 1: can afford you to live life a little bit now. 322 00:14:14,280 --> 00:14:17,520 Speaker 1: Kind of finding that balance if it's truly a priority 323 00:14:17,559 --> 00:14:19,160 Speaker 1: for you, that's something that you need to be living 324 00:14:19,200 --> 00:14:22,200 Speaker 1: out now while you're still being smart with your money, 325 00:14:22,400 --> 00:14:24,920 Speaker 1: saving and investing your money. Man, I feel like I've 326 00:14:24,920 --> 00:14:27,800 Speaker 1: heard so many people over the years say I love travel, 327 00:14:27,840 --> 00:14:29,840 Speaker 1: I prioritize travel, but you know what, I never have 328 00:14:29,960 --> 00:14:32,400 Speaker 1: enough money to do it. I just never actually get 329 00:14:32,440 --> 00:14:34,760 Speaker 1: around a traveling even though it's something I care about 330 00:14:34,800 --> 00:14:37,160 Speaker 1: a lot. You know what, I see those people driving 331 00:14:37,680 --> 00:14:41,560 Speaker 1: pretty nice cars or prioritizing fancy meals out and the 332 00:14:41,600 --> 00:14:43,680 Speaker 1: thing is, you can't do it all. You can't afford 333 00:14:43,680 --> 00:14:45,760 Speaker 1: it all. But when you say you prioritize something when 334 00:14:45,760 --> 00:14:48,320 Speaker 1: it is one of those highly valued things in your life, 335 00:14:48,320 --> 00:14:50,320 Speaker 1: one of those very few things that you set apart 336 00:14:50,400 --> 00:14:52,760 Speaker 1: and you set savings goals for, well, I think it's 337 00:14:52,760 --> 00:14:54,640 Speaker 1: important to put your money where your mouth is and 338 00:14:54,720 --> 00:14:58,600 Speaker 1: actually make it happen, even while you are saving for 339 00:14:58,640 --> 00:15:01,400 Speaker 1: the future and paying down a student loan debt. All right, Matt, 340 00:15:01,440 --> 00:15:03,600 Speaker 1: Speaking of travel, we are going to take a question 341 00:15:03,640 --> 00:15:06,320 Speaker 1: about getting rental car insurance with a credit card, and 342 00:15:06,320 --> 00:15:17,560 Speaker 1: we're going to get to that after the break. All right, Joel, 343 00:15:17,600 --> 00:15:19,800 Speaker 1: we are back for the break taking listener questions, and 344 00:15:19,840 --> 00:15:22,960 Speaker 1: before we get to that credit card car rental insurance question, 345 00:15:23,000 --> 00:15:26,840 Speaker 1: we've got one about adding onto your house. Hi, this 346 00:15:26,920 --> 00:15:29,600 Speaker 1: is Amy from sam Matown. My husband and I are 347 00:15:29,680 --> 00:15:32,800 Speaker 1: interested in doing an addition. We would like to get 348 00:15:32,840 --> 00:15:35,800 Speaker 1: your opinion about how to pay for it. Should we 349 00:15:35,960 --> 00:15:40,080 Speaker 1: a take out a home equity own or be use 350 00:15:40,200 --> 00:15:43,680 Speaker 1: up all of our emergency money to pay for it 351 00:15:43,720 --> 00:15:47,600 Speaker 1: in cash So you can understand the drawbacks either we 352 00:15:47,640 --> 00:15:51,920 Speaker 1: lose some money towards interest, or if something happens we 353 00:15:52,000 --> 00:15:54,640 Speaker 1: won't have money to pay for it. Let me know 354 00:15:54,720 --> 00:15:56,840 Speaker 1: what you think is the best way to go. Thank 355 00:15:56,880 --> 00:15:59,520 Speaker 1: you Amy. This is a great question. All right, Let's 356 00:15:59,520 --> 00:16:02,040 Speaker 1: dig into paying for an edition with a home equity 357 00:16:02,080 --> 00:16:05,160 Speaker 1: loan or draining that emergency fund. Which is the best 358 00:16:05,160 --> 00:16:07,760 Speaker 1: way to go? And I think this depends on a 359 00:16:07,800 --> 00:16:11,040 Speaker 1: bunch of different factors. One of the biggest questions is 360 00:16:11,280 --> 00:16:15,320 Speaker 1: how quickly could you replenish that emergency savings fund if 361 00:16:15,320 --> 00:16:18,200 Speaker 1: you were to spend that to to fund the addition, 362 00:16:18,480 --> 00:16:20,000 Speaker 1: I think if you can save a good chunk of 363 00:16:20,040 --> 00:16:22,240 Speaker 1: money every month, let's say like fift bucks a month, 364 00:16:22,440 --> 00:16:24,400 Speaker 1: well then paying for it in cash isn't that bad 365 00:16:24,440 --> 00:16:26,760 Speaker 1: of an idea because it won't take you that long 366 00:16:26,840 --> 00:16:29,400 Speaker 1: to replenish that emergency fund. But if it's gonna take 367 00:16:29,440 --> 00:16:32,400 Speaker 1: you ten years to bounce back and into a massive 368 00:16:32,440 --> 00:16:34,640 Speaker 1: amount of money that you currently have, well, then you 369 00:16:34,800 --> 00:16:36,760 Speaker 1: probably don't want to sit that long with a bare 370 00:16:36,800 --> 00:16:39,680 Speaker 1: bones emergency fund. And ultimately, if you do decide that 371 00:16:39,720 --> 00:16:42,440 Speaker 1: it's best to tap that emergency fund, well, well you're 372 00:16:42,440 --> 00:16:44,280 Speaker 1: gonna want to make sure that you have at least 373 00:16:44,320 --> 00:16:46,880 Speaker 1: a couple of thousand dollars sitting there in your bank 374 00:16:46,920 --> 00:16:50,000 Speaker 1: account just in case of an emergency. If you're literally 375 00:16:50,280 --> 00:16:53,720 Speaker 1: draining it all the way down to zero zero balance. 376 00:16:53,960 --> 00:16:56,160 Speaker 1: That's when things get really scary, and I would definitely 377 00:16:56,160 --> 00:16:58,240 Speaker 1: be unwilling to go that far. Yeah, and Amy, we're 378 00:16:58,240 --> 00:17:00,560 Speaker 1: talking about getting your emergency fund down pretty low. But 379 00:17:00,680 --> 00:17:04,720 Speaker 1: another consideration is insurance policies. You know, while a couple 380 00:17:04,760 --> 00:17:07,320 Speaker 1: of thousand and even one thousand dollars is often touted 381 00:17:07,520 --> 00:17:10,280 Speaker 1: as sort of the bare minimum for emergency fund, check 382 00:17:10,320 --> 00:17:13,720 Speaker 1: out your deductibles on those different insurance plans, because in 383 00:17:13,760 --> 00:17:15,880 Speaker 1: case something you know, say where to happen to your car, 384 00:17:16,160 --> 00:17:18,600 Speaker 1: or your home and even your health, right like, you 385 00:17:18,640 --> 00:17:20,560 Speaker 1: want to make sure that you won't have a problem 386 00:17:20,640 --> 00:17:24,160 Speaker 1: paying those deductibles or covering those out of pocket maximums. 387 00:17:24,200 --> 00:17:26,000 Speaker 1: You said yourself that that's sort of the downside, right, 388 00:17:26,040 --> 00:17:28,359 Speaker 1: You're afraid that, you know, by draining your accounts that 389 00:17:28,400 --> 00:17:29,640 Speaker 1: you are not going to be able to have enough 390 00:17:29,680 --> 00:17:31,800 Speaker 1: money to handle those emergencies. Well, a lot of the 391 00:17:31,840 --> 00:17:34,480 Speaker 1: biggest emergencies that happen in our lives, we have insurance 392 00:17:34,480 --> 00:17:37,440 Speaker 1: policies set aside for so at the very least, make 393 00:17:37,480 --> 00:17:40,080 Speaker 1: sure you have enough money in that emergency fund to 394 00:17:40,240 --> 00:17:43,280 Speaker 1: cover those deductibles. Yeah, and one thing you mentioned Amy, 395 00:17:43,280 --> 00:17:46,320 Speaker 1: and your question was potentially using a home equity loan, 396 00:17:46,760 --> 00:17:48,960 Speaker 1: and I would suggest instead of a home equity loan 397 00:17:49,280 --> 00:17:52,000 Speaker 1: that you specifically look at a home equity line of credit, 398 00:17:52,359 --> 00:17:54,760 Speaker 1: because if you do have the cash on hand to 399 00:17:54,840 --> 00:17:57,919 Speaker 1: cover the whole renovation, well, home equity line of credit 400 00:17:58,080 --> 00:18:01,600 Speaker 1: is almost always better when you're talking about only needing 401 00:18:01,640 --> 00:18:03,880 Speaker 1: it for a couple of years, two or three years, 402 00:18:04,000 --> 00:18:06,760 Speaker 1: especially in an environment where interest rates are pretty low 403 00:18:06,840 --> 00:18:09,560 Speaker 1: and and actually looking like they might get lower. So 404 00:18:09,680 --> 00:18:11,280 Speaker 1: if you have the money but you don't want to 405 00:18:11,320 --> 00:18:13,240 Speaker 1: use up all your cash on hand, go for a 406 00:18:13,320 --> 00:18:16,040 Speaker 1: home equity line, and specifically in your case, you can 407 00:18:16,080 --> 00:18:18,280 Speaker 1: potentially split it down the middle, use a good bit 408 00:18:18,280 --> 00:18:20,520 Speaker 1: of your cash on hand, but still keep plenty around 409 00:18:20,560 --> 00:18:23,040 Speaker 1: for emergencies to make you feel good, and then pay 410 00:18:23,080 --> 00:18:25,679 Speaker 1: for the rest of the renovation with your home equity 411 00:18:25,680 --> 00:18:28,280 Speaker 1: line of credit. Typically, when you open up a helock, 412 00:18:28,359 --> 00:18:31,000 Speaker 1: there is no pre payment penalty if you keep it 413 00:18:31,040 --> 00:18:33,600 Speaker 1: three years or longer. Just chop around in order to 414 00:18:33,600 --> 00:18:35,960 Speaker 1: find the best rate. I've seen awesome promotional rates like 415 00:18:36,240 --> 00:18:38,800 Speaker 1: first year of a helock for less than four percent, 416 00:18:39,240 --> 00:18:40,919 Speaker 1: which is which is pretty sweet. So make sure you 417 00:18:40,920 --> 00:18:43,840 Speaker 1: shop around, check local credit unions and local banks. The 418 00:18:43,840 --> 00:18:46,440 Speaker 1: one downside of a helock is that the rate is variable, 419 00:18:46,720 --> 00:18:49,560 Speaker 1: but in your position where you have such a heavy 420 00:18:49,600 --> 00:18:51,800 Speaker 1: stash of cash, it's not really that big of a 421 00:18:51,880 --> 00:18:54,240 Speaker 1: deal because you can always pay it down more quickly 422 00:18:54,240 --> 00:18:56,639 Speaker 1: with the cash that you do have. And amy a 423 00:18:56,720 --> 00:18:59,240 Speaker 1: quick little warning to you, right this is a homeowner 424 00:18:59,280 --> 00:19:03,320 Speaker 1: to homeowner. Renovations are a big undertaking. There's a lot 425 00:19:03,320 --> 00:19:06,359 Speaker 1: of dust, a lot of decisions, and with those decisions 426 00:19:06,359 --> 00:19:09,040 Speaker 1: come a lot of stress oftentimes a lot of times too. 427 00:19:09,160 --> 00:19:11,600 Speaker 1: They cost more than you think they're gonna cost, and 428 00:19:11,600 --> 00:19:14,439 Speaker 1: they take longer to complete. There's just a lot to 429 00:19:14,440 --> 00:19:16,720 Speaker 1: to consider, and so you know, I would recommend that 430 00:19:16,760 --> 00:19:19,600 Speaker 1: you listen and check out episodes fifty seven and fifty nine. 431 00:19:19,680 --> 00:19:22,760 Speaker 1: That's when we talked about renovating your home or moving 432 00:19:23,119 --> 00:19:25,520 Speaker 1: and fifty nine was renovating on a budget. And both 433 00:19:25,560 --> 00:19:27,520 Speaker 1: of those episodes we kind of dove in deep and 434 00:19:27,560 --> 00:19:29,760 Speaker 1: we covered all the different sort of factors that you 435 00:19:29,760 --> 00:19:31,639 Speaker 1: want to consider when you're in the kind of position 436 00:19:31,680 --> 00:19:34,200 Speaker 1: that you are in. And one last thing to keep 437 00:19:34,240 --> 00:19:35,880 Speaker 1: in mind that you might have some more money down 438 00:19:35,880 --> 00:19:38,080 Speaker 1: the road. You're talking about go ahead and setting up 439 00:19:38,119 --> 00:19:40,439 Speaker 1: the financing, but it might take a little bit of 440 00:19:40,440 --> 00:19:42,480 Speaker 1: time for you to actually get the ball rolling where 441 00:19:42,520 --> 00:19:44,560 Speaker 1: you would need that money. There are quotes that you 442 00:19:44,560 --> 00:19:46,119 Speaker 1: need to get, different plans that you need to have 443 00:19:46,200 --> 00:19:48,639 Speaker 1: drawn up. Permitting can take forever, and a lot of 444 00:19:48,640 --> 00:19:50,600 Speaker 1: times after permitting, it has to go back to drawing. 445 00:19:50,800 --> 00:19:52,720 Speaker 1: I'm just saying that it does take a lot of time. 446 00:19:53,040 --> 00:19:54,919 Speaker 1: And during that time you may have been able to 447 00:19:54,960 --> 00:19:57,400 Speaker 1: add to your emergency fund to where you could pay 448 00:19:57,480 --> 00:19:59,720 Speaker 1: for that renovation with cash and still have a decent 449 00:19:59,720 --> 00:20:02,400 Speaker 1: amount out set aside to cover any of those emergencies, 450 00:20:02,440 --> 00:20:05,200 Speaker 1: any of those deductibles in case an emergency or to arise. Well, 451 00:20:05,200 --> 00:20:07,760 Speaker 1: and that's actually one more check mark in the box 452 00:20:07,800 --> 00:20:11,080 Speaker 1: of a helock over a home equity loan, because if 453 00:20:11,119 --> 00:20:13,440 Speaker 1: you get a helock, you can have it sitting there 454 00:20:13,960 --> 00:20:16,240 Speaker 1: and not be paying interest on it and only tap 455 00:20:16,280 --> 00:20:17,879 Speaker 1: it when you need it. Yes, so it's kind of 456 00:20:17,880 --> 00:20:19,560 Speaker 1: sitting there as a backup in case you don't get 457 00:20:19,560 --> 00:20:21,680 Speaker 1: that cash together. Yeah, you get a loan, you're paying 458 00:20:21,960 --> 00:20:24,919 Speaker 1: interest on the whole lump sum. The very day that 459 00:20:24,920 --> 00:20:27,840 Speaker 1: that closes, you get a line of credit. Well, you 460 00:20:27,880 --> 00:20:29,639 Speaker 1: know what, you're only paying interest on the amount that 461 00:20:29,640 --> 00:20:31,600 Speaker 1: you draw down on that line of credit. That's why 462 00:20:31,640 --> 00:20:34,120 Speaker 1: they can be so much better, especially in a scenario 463 00:20:34,200 --> 00:20:35,920 Speaker 1: like yours. Amy. All right, Matt, let's get to the 464 00:20:35,960 --> 00:20:39,520 Speaker 1: next question about credit card rental car insurance. Hey guys, 465 00:20:39,560 --> 00:20:42,840 Speaker 1: this is Eric calling from Utah. Had a quick question 466 00:20:42,960 --> 00:20:48,399 Speaker 1: about coverage options that rental cars and airlines offer to 467 00:20:48,440 --> 00:20:50,960 Speaker 1: you and wanted to get your thoughts and if those 468 00:20:50,960 --> 00:20:54,240 Speaker 1: are a cost effective idea or if those should be avoided. 469 00:20:54,520 --> 00:20:56,560 Speaker 1: I have an option with my credit card that it 470 00:20:56,560 --> 00:20:59,359 Speaker 1: will kind of provide coverage for rental vehicles if I 471 00:20:59,480 --> 00:21:02,600 Speaker 1: use that hard, but it made me wonder if that 472 00:21:02,680 --> 00:21:04,840 Speaker 1: was really the best way to go about it. So 473 00:21:05,080 --> 00:21:08,400 Speaker 1: I would love to hear max stream. Eric, that is 474 00:21:08,440 --> 00:21:11,080 Speaker 1: a great question, and sort of like we said earlier, 475 00:21:11,119 --> 00:21:13,720 Speaker 1: this is a great thing to think through before you're 476 00:21:13,760 --> 00:21:15,840 Speaker 1: standing there at the counter with your pen in hand 477 00:21:15,880 --> 00:21:18,240 Speaker 1: and they're asking you would you like the collision damage 478 00:21:18,280 --> 00:21:21,159 Speaker 1: waiver right, like that's what it's called the CDW or 479 00:21:21,240 --> 00:21:23,119 Speaker 1: telling you you need it exactly. They're like, oh, no, no no, 480 00:21:23,280 --> 00:21:25,000 Speaker 1: you really should be doing this, and you're like, oh 481 00:21:25,040 --> 00:21:26,439 Speaker 1: do I I don't. I don't know, like do you 482 00:21:26,440 --> 00:21:28,000 Speaker 1: have my best interests in mind or are you just 483 00:21:28,000 --> 00:21:30,119 Speaker 1: trying to charge me? That's the real question for the 484 00:21:30,160 --> 00:21:34,200 Speaker 1: low low price of fifty two today. Yeah, it's who 485 00:21:34,240 --> 00:21:37,360 Speaker 1: can have this collision damage waiver on your Toyota to sell? 486 00:21:37,520 --> 00:21:39,080 Speaker 1: All right, Eric, it might be helpful for you to 487 00:21:39,160 --> 00:21:41,840 Speaker 1: think about the coverage on a rental car. Maybe has 488 00:21:41,880 --> 00:21:44,720 Speaker 1: three different layers of coverage. Right. The first layer that 489 00:21:44,720 --> 00:21:47,800 Speaker 1: most folks already have in place is their own personal 490 00:21:47,840 --> 00:21:49,960 Speaker 1: car insurance, you know, and this is for the car 491 00:21:50,000 --> 00:21:53,000 Speaker 1: that you have at home. Most policies will extend to 492 00:21:53,080 --> 00:21:56,119 Speaker 1: the rentals were you to be involved in an accidents 493 00:21:56,240 --> 00:21:58,160 Speaker 1: or were that car to get stolen. So the first 494 00:21:58,160 --> 00:22:00,840 Speaker 1: thing to do is to check the covered there first. 495 00:22:01,080 --> 00:22:03,280 Speaker 1: If you don't have your own auto insurance, then the 496 00:22:03,320 --> 00:22:05,800 Speaker 1: next two layers that we're going to discuss, those are 497 00:22:05,840 --> 00:22:08,400 Speaker 1: going to be even more important to you. Yeah, and 498 00:22:08,520 --> 00:22:11,320 Speaker 1: the credit card is, like you mentioned, an awesome place 499 00:22:11,400 --> 00:22:14,680 Speaker 1: to go for rental car insurance. Most cards only offer 500 00:22:14,800 --> 00:22:17,480 Speaker 1: secondary coverage, though, which means you would first need to 501 00:22:17,520 --> 00:22:20,919 Speaker 1: file a claim with your car insurance provider. Then the 502 00:22:20,920 --> 00:22:23,600 Speaker 1: credit card will typically pay for additional costs like your 503 00:22:23,600 --> 00:22:26,800 Speaker 1: deductible but However, if you don't have personal auto insurance, 504 00:22:26,800 --> 00:22:29,320 Speaker 1: then the credit card coverage becomes even more important as 505 00:22:29,320 --> 00:22:32,159 Speaker 1: it becomes the primary coverage for you if you're in 506 00:22:32,240 --> 00:22:34,440 Speaker 1: some sort of an accident if you travel a lot. 507 00:22:34,720 --> 00:22:36,919 Speaker 1: We would recommend actually going with a card like the 508 00:22:37,000 --> 00:22:40,720 Speaker 1: Chase Sapphire Preferred or the Chase Inc Business Preferred because 509 00:22:40,720 --> 00:22:43,840 Speaker 1: those give you access to primary coverage. You don't even 510 00:22:43,880 --> 00:22:47,639 Speaker 1: have to reach out to your own individual auto insurance 511 00:22:47,800 --> 00:22:50,840 Speaker 1: because the coverage you get from that credit card is 512 00:22:50,840 --> 00:22:53,120 Speaker 1: actually the main coverage and the only coverage that you'll need. 513 00:22:53,320 --> 00:22:55,160 Speaker 1: Will put links to those cards in the show notes. 514 00:22:55,359 --> 00:22:57,760 Speaker 1: By the way, you'll also need to pay in full 515 00:22:58,240 --> 00:23:01,280 Speaker 1: with that credit card for your rental car or you 516 00:23:01,359 --> 00:23:03,440 Speaker 1: don't get the coverage. That's something that some people fail 517 00:23:03,480 --> 00:23:05,760 Speaker 1: to remember. They think just because they have the card 518 00:23:05,800 --> 00:23:08,400 Speaker 1: in their wallet that it offers that sort of production. 519 00:23:08,400 --> 00:23:11,080 Speaker 1: But you actually need to pay for the reservation and 520 00:23:11,119 --> 00:23:13,880 Speaker 1: then the full amount of the car rental. You need 521 00:23:13,880 --> 00:23:16,240 Speaker 1: to pay for that with that credit card in order 522 00:23:16,240 --> 00:23:18,680 Speaker 1: to be covered by the insurance that that card offers. Yeah, 523 00:23:18,720 --> 00:23:21,560 Speaker 1: maybe another way to think about primary verse secondary coverage, 524 00:23:21,600 --> 00:23:23,680 Speaker 1: like the primary coverage like they step up the bat 525 00:23:23,720 --> 00:23:26,480 Speaker 1: for you right like that, they kind of volunteer as tribute. 526 00:23:26,600 --> 00:23:28,439 Speaker 1: So whenever you think of like Chase Sapphire, just think 527 00:23:28,480 --> 00:23:31,560 Speaker 1: of a Catinis Everdeen girl on fire. I volunteer as tribute. 528 00:23:33,080 --> 00:23:34,720 Speaker 1: And then let's talk about the coverage that you can 529 00:23:34,760 --> 00:23:37,320 Speaker 1: get that's provided by the rental company. You're sitting there 530 00:23:37,320 --> 00:23:40,080 Speaker 1: at the counter and they're offering you that CDW, and 531 00:23:40,080 --> 00:23:42,400 Speaker 1: that's exactly what it is. It's a waiver. It's technically 532 00:23:42,480 --> 00:23:45,760 Speaker 1: not insurance, but a collision damage waiver, which says that 533 00:23:46,000 --> 00:23:48,280 Speaker 1: if your car is stolen or damaged, then you're just 534 00:23:48,320 --> 00:23:51,000 Speaker 1: off the hook. But again, most folks will probably be 535 00:23:51,040 --> 00:23:54,240 Speaker 1: fine with their own personal auto insurance and then you 536 00:23:54,240 --> 00:23:56,800 Speaker 1: know the added second layer that your credit card would 537 00:23:56,840 --> 00:23:59,520 Speaker 1: provide for you. But it might be a good idea 538 00:23:59,640 --> 00:24:02,119 Speaker 1: to go with rental car insurance a k a. That 539 00:24:02,240 --> 00:24:05,520 Speaker 1: CDW if you don't have your own car insurance, or 540 00:24:05,560 --> 00:24:07,720 Speaker 1: maybe if you didn't put that rental car on a 541 00:24:07,720 --> 00:24:10,520 Speaker 1: credit card, or if the rental isn't a country that's 542 00:24:10,560 --> 00:24:13,480 Speaker 1: excluded from the credit cards coverage. I'm thinking of countries 543 00:24:13,480 --> 00:24:15,919 Speaker 1: like Italy or Ireland. I think Jamaica is on that 544 00:24:15,960 --> 00:24:17,640 Speaker 1: list too. For a lot of cards. I don't know why, 545 00:24:17,720 --> 00:24:20,560 Speaker 1: but but it is. So just make sure that you 546 00:24:20,560 --> 00:24:23,120 Speaker 1: look up those benefits and you can confirm and double 547 00:24:23,200 --> 00:24:25,719 Speaker 1: check those benefits by calling the credit card company or 548 00:24:25,800 --> 00:24:29,760 Speaker 1: your insurance companies to just make sure that you're completely covered. Yeah, 549 00:24:29,880 --> 00:24:33,000 Speaker 1: either way, it's really really helpful to pay for a 550 00:24:33,080 --> 00:24:36,480 Speaker 1: rental car with a credit card that has either primary 551 00:24:36,560 --> 00:24:40,000 Speaker 1: or secondary coverage of a rental car, and in particular, 552 00:24:40,040 --> 00:24:42,720 Speaker 1: if you travel a fair amount, I think it's more 553 00:24:42,760 --> 00:24:45,199 Speaker 1: than worth it to to get a credit card that 554 00:24:45,320 --> 00:24:47,920 Speaker 1: has primary coverage so that you know without a doubt 555 00:24:47,960 --> 00:24:50,360 Speaker 1: every time you book a car, the insurance that you'll 556 00:24:50,359 --> 00:24:52,360 Speaker 1: have through the credit card company is the only place 557 00:24:52,400 --> 00:24:53,960 Speaker 1: that you'll have to turn in case of an accident. 558 00:24:54,200 --> 00:24:57,280 Speaker 1: So it's worth that ninety annual fee that the Chase 559 00:24:57,280 --> 00:25:00,560 Speaker 1: half Fired Preferred card comes with. If you travel two 560 00:25:00,640 --> 00:25:02,040 Speaker 1: or three times a year and you run a car 561 00:25:02,320 --> 00:25:04,600 Speaker 1: when you do travel, that is like some awesome peace 562 00:25:04,640 --> 00:25:06,359 Speaker 1: of mind to have. So Eric, in the end, we 563 00:25:06,359 --> 00:25:08,360 Speaker 1: would recommend for you to just make sure that you've 564 00:25:08,359 --> 00:25:10,960 Speaker 1: done your research right, know what your card offers, you 565 00:25:11,080 --> 00:25:13,440 Speaker 1: know what the insurance that you already have what they cover, 566 00:25:13,680 --> 00:25:16,000 Speaker 1: and chances are you have a credit card already in 567 00:25:16,000 --> 00:25:19,280 Speaker 1: your wallet that offers some type of coverage. Oftentimes, the 568 00:25:19,320 --> 00:25:21,840 Speaker 1: CDW that's offered there at the counter, it's more of 569 00:25:21,840 --> 00:25:24,600 Speaker 1: a fear based sale, and it's it's sort of like 570 00:25:24,640 --> 00:25:26,560 Speaker 1: a panic move on most travelers. They think, oh, man, 571 00:25:26,600 --> 00:25:28,840 Speaker 1: this is something I've got to get, and that's why 572 00:25:28,880 --> 00:25:31,239 Speaker 1: it's something that's still offered. But if you've done your 573 00:25:31,240 --> 00:25:33,200 Speaker 1: research ahead of time, you can go into those situations 574 00:25:33,240 --> 00:25:35,480 Speaker 1: with the confidence and the knowledge to know that you're 575 00:25:35,480 --> 00:25:37,960 Speaker 1: making the right decision for you and you'll avoid the 576 00:25:38,080 --> 00:25:41,560 Speaker 1: crazy expensive coverage that the rental car companies are going 577 00:25:41,600 --> 00:25:43,720 Speaker 1: to try and offer you. All right, now, we get 578 00:25:43,720 --> 00:25:46,879 Speaker 1: a couple more awesome questions coming up, including leaving a 579 00:25:46,920 --> 00:25:49,199 Speaker 1: full service investment house. Is that the best course of 580 00:25:49,200 --> 00:25:51,879 Speaker 1: action to take? And we'll get to those questions right 581 00:25:51,920 --> 00:26:02,200 Speaker 1: up for the break. All right, Joe, we are back 582 00:26:02,200 --> 00:26:03,800 Speaker 1: from the parade, and before we get to that question 583 00:26:03,840 --> 00:26:06,600 Speaker 1: about some expensive mutual funds, we're gonna take one on 584 00:26:06,640 --> 00:26:10,240 Speaker 1: how to get rid of p M I early. Hi, guys, 585 00:26:10,240 --> 00:26:13,959 Speaker 1: this is Klaus Larson in Denver, Colorado. UM I had 586 00:26:13,960 --> 00:26:16,919 Speaker 1: a quick question about mortgages. You may have talked about 587 00:26:16,960 --> 00:26:19,240 Speaker 1: this before and I missed it. But if you haven't, 588 00:26:19,800 --> 00:26:24,480 Speaker 1: are there any ways to get rid of mortgage insurance 589 00:26:24,520 --> 00:26:29,159 Speaker 1: early meaning little known methods or ways to negotiate and 590 00:26:29,280 --> 00:26:32,760 Speaker 1: refinancing or something to get rid of that sooner than later, 591 00:26:33,160 --> 00:26:36,000 Speaker 1: Because that couple hundred bucks a month adds up real fast. 592 00:26:36,840 --> 00:26:39,560 Speaker 1: Listen in thank you, oh Man, a couple hundred bucks 593 00:26:39,600 --> 00:26:42,600 Speaker 1: a month that totally adds up. That's a huge out 594 00:26:42,640 --> 00:26:44,399 Speaker 1: of pocket. And I think getting rid of p m 595 00:26:44,440 --> 00:26:46,280 Speaker 1: I early is the way to go, and there are 596 00:26:46,320 --> 00:26:49,040 Speaker 1: a few different ways you can go about it. But 597 00:26:49,080 --> 00:26:52,040 Speaker 1: basically the reason that p m I exists is that 598 00:26:52,080 --> 00:26:54,600 Speaker 1: it's insurance for the lender if you're unable to come 599 00:26:54,680 --> 00:26:57,240 Speaker 1: up with a down payment when you're buying a house. 600 00:26:57,520 --> 00:26:59,000 Speaker 1: And that's why Matt and I we try to encourage 601 00:26:59,000 --> 00:27:02,840 Speaker 1: people to to save up. A large down payment is ideal. 602 00:27:02,960 --> 00:27:05,520 Speaker 1: It's awesome if you can say about that much, because 603 00:27:05,560 --> 00:27:09,000 Speaker 1: it helps you avoid that extra pretty expensive fee every 604 00:27:09,000 --> 00:27:11,800 Speaker 1: single month when you're paying your note. All right, Claus, 605 00:27:11,840 --> 00:27:14,480 Speaker 1: here's something that's important to know, uh, and that is 606 00:27:14,560 --> 00:27:16,400 Speaker 1: that you have the right to put in a request 607 00:27:16,560 --> 00:27:20,360 Speaker 1: to whatever bank services your mortgage to drop private mortgage 608 00:27:20,359 --> 00:27:24,200 Speaker 1: insurance right p M I once you've reached eight of 609 00:27:24,280 --> 00:27:27,000 Speaker 1: your original loaned value. And the thing is, even if 610 00:27:27,040 --> 00:27:30,160 Speaker 1: you don't request it, they will automatically cancel it once 611 00:27:30,200 --> 00:27:33,040 Speaker 1: you hit seventy eight percent. But the problem is that 612 00:27:33,040 --> 00:27:35,080 Speaker 1: that could take a while if you stick with the 613 00:27:35,119 --> 00:27:39,679 Speaker 1: amortization schedule. Right, So paying more towards principle is going 614 00:27:39,760 --> 00:27:42,560 Speaker 1: to be the easiest way to gain more equity. When 615 00:27:42,560 --> 00:27:44,520 Speaker 1: you pay extra, you know you'll have the option to 616 00:27:44,600 --> 00:27:47,679 Speaker 1: designate that money as additional principle. That might be an 617 00:27:47,680 --> 00:27:50,400 Speaker 1: option that you're not used to seeing because oftentimes are 618 00:27:50,560 --> 00:27:52,680 Speaker 1: mortgages are just set up on auto draft, right, there's 619 00:27:52,680 --> 00:27:54,800 Speaker 1: just a certain amount that goes every single month. You 620 00:27:54,800 --> 00:27:56,280 Speaker 1: feel like you're kind of locked into that that you 621 00:27:56,320 --> 00:27:58,760 Speaker 1: don't have a choice. But if you actually log into 622 00:27:58,760 --> 00:28:01,160 Speaker 1: your online banking, you'll see that you can pay more 623 00:28:01,200 --> 00:28:03,720 Speaker 1: than the actual payment amount every month and you can 624 00:28:03,760 --> 00:28:06,919 Speaker 1: apply that to the actual principle. That's going to be 625 00:28:06,920 --> 00:28:09,439 Speaker 1: the cheapest, right and the easiest way for you to 626 00:28:09,680 --> 00:28:13,240 Speaker 1: gain more equity quickly. But if your house has gone 627 00:28:13,320 --> 00:28:16,159 Speaker 1: up in value considerably, it might be worth it to 628 00:28:16,160 --> 00:28:18,320 Speaker 1: get an appraisal to get rid of p M I, 629 00:28:18,720 --> 00:28:20,680 Speaker 1: even if you've only owned the home for a year 630 00:28:20,760 --> 00:28:23,720 Speaker 1: or two, depending on local marketing conditions, Well, an appraisal 631 00:28:23,760 --> 00:28:25,520 Speaker 1: could do the trick to help you ditch p m I. 632 00:28:25,800 --> 00:28:28,160 Speaker 1: The goal, of course, is that the appraisal would show 633 00:28:28,160 --> 00:28:30,639 Speaker 1: that there's much more value in your home than when 634 00:28:30,720 --> 00:28:34,080 Speaker 1: you originally bought it, effectively lowering your loan to value 635 00:28:34,080 --> 00:28:36,080 Speaker 1: and because you've gained a lot of equity in your home. 636 00:28:36,119 --> 00:28:39,600 Speaker 1: So keep in mind, though, that an appraisal costs roughly 637 00:28:39,800 --> 00:28:43,880 Speaker 1: three bucks, so they're not cheap. But when you consider 638 00:28:43,960 --> 00:28:46,120 Speaker 1: the alternative that you're shelling out a couple of hundred 639 00:28:46,120 --> 00:28:48,720 Speaker 1: bucks every month on p m I, it's really just 640 00:28:48,800 --> 00:28:51,920 Speaker 1: two months worth of that pesky fee as you pay 641 00:28:51,960 --> 00:28:54,960 Speaker 1: for the appraisal, get it done, and hopefully that appraisal 642 00:28:55,160 --> 00:28:57,800 Speaker 1: shows what you know to be true, that your house 643 00:28:57,880 --> 00:29:00,560 Speaker 1: is worth enough for p m I to follow away completely. 644 00:29:00,720 --> 00:29:03,360 Speaker 1: I'd just be confident that that's the case before spending 645 00:29:03,360 --> 00:29:05,600 Speaker 1: the four hunter bucks, because what's worse than PAM p 646 00:29:05,720 --> 00:29:08,680 Speaker 1: m I paying for an appraisal when your house doesn't 647 00:29:08,680 --> 00:29:10,440 Speaker 1: appraise out for you to drop that p m I. 648 00:29:10,600 --> 00:29:12,600 Speaker 1: That's very true, but you know the fact is is 649 00:29:12,640 --> 00:29:14,800 Speaker 1: that you know this appraisal option, Like, I think that's 650 00:29:14,800 --> 00:29:16,640 Speaker 1: gonna be true for most of the country. Like for 651 00:29:16,680 --> 00:29:19,720 Speaker 1: the past probably close to ten years, housing prices for 652 00:29:19,760 --> 00:29:22,400 Speaker 1: a lot of the country have only climbed, and you know, 653 00:29:22,480 --> 00:29:25,240 Speaker 1: unless you may be drastically overpaid for your house, that 654 00:29:25,320 --> 00:29:27,520 Speaker 1: there's a chance that it has really gone up in value. 655 00:29:27,760 --> 00:29:31,000 Speaker 1: And so that's really a great option for you. Another 656 00:29:31,480 --> 00:29:34,520 Speaker 1: third option that could work for you is refinancing. You 657 00:29:34,560 --> 00:29:37,160 Speaker 1: can refinance and bring cash to the table if you've 658 00:29:37,160 --> 00:29:39,320 Speaker 1: got the money saved and set aside, and even if 659 00:29:39,360 --> 00:29:40,760 Speaker 1: you don't, it might even be worth it for you 660 00:29:40,800 --> 00:29:43,040 Speaker 1: to tap your emergency fund in order to be done 661 00:29:43,120 --> 00:29:45,880 Speaker 1: with that p m I while at the same time 662 00:29:45,920 --> 00:29:49,080 Speaker 1: scoring a better interest rate. Interest rates are pretty close 663 00:29:49,120 --> 00:29:51,080 Speaker 1: to being all time lows these days, and you can 664 00:29:51,160 --> 00:29:54,120 Speaker 1: totally score a fantastic rate in addition to your p 665 00:29:54,280 --> 00:29:56,640 Speaker 1: m I completely dropping off. Just make sure that you 666 00:29:56,760 --> 00:29:59,600 Speaker 1: use that money that you save with that lower monthly 667 00:29:59,640 --> 00:30:03,280 Speaker 1: payment to build your emergency fund back up really quickly. Yeah, 668 00:30:03,360 --> 00:30:06,200 Speaker 1: for anybody out there who has a mortgage and they 669 00:30:06,200 --> 00:30:08,640 Speaker 1: are paying p m I on it, these are really 670 00:30:08,840 --> 00:30:11,680 Speaker 1: the options that exist for you to get rid of 671 00:30:11,680 --> 00:30:13,840 Speaker 1: it and It's something I would say is a huge 672 00:30:13,840 --> 00:30:17,760 Speaker 1: priority because because it is this major expense every single month, 673 00:30:18,080 --> 00:30:20,160 Speaker 1: and for most folks, that are ways to to get 674 00:30:20,160 --> 00:30:22,840 Speaker 1: out of it much sooner than you might have thought possible. 675 00:30:22,880 --> 00:30:24,880 Speaker 1: And in the mortgage company, they're not going to notify 676 00:30:24,920 --> 00:30:27,160 Speaker 1: you of these ways to get rid of p M 677 00:30:27,240 --> 00:30:29,120 Speaker 1: I early. You've got to take matters in your own 678 00:30:29,160 --> 00:30:31,080 Speaker 1: hands and go one of these routes. And if you 679 00:30:31,080 --> 00:30:32,840 Speaker 1: do that, you're going to save a huge amount of 680 00:30:32,840 --> 00:30:34,880 Speaker 1: money every month. So Claus, best of luck. Let us 681 00:30:34,880 --> 00:30:36,720 Speaker 1: know what route you end up choosing. All right, Matt, 682 00:30:36,760 --> 00:30:40,440 Speaker 1: let's get to our next question about pesky investing fees. Hi, 683 00:30:40,560 --> 00:30:43,600 Speaker 1: Matt and Jel. My name is Casey and I am 684 00:30:43,640 --> 00:30:48,280 Speaker 1: from Clearwater, Florida. Financial independence is a new concept to me, 685 00:30:48,400 --> 00:30:51,479 Speaker 1: and your podcast has been super helpful and inspirational as 686 00:30:51,520 --> 00:30:54,280 Speaker 1: I start this journey. UM. Recently, I've come to the 687 00:30:54,320 --> 00:30:57,160 Speaker 1: realization that I have sadly spent a lot of years 688 00:30:57,160 --> 00:31:01,080 Speaker 1: not investing m or not investing else. I'm looking for 689 00:31:01,120 --> 00:31:05,480 Speaker 1: some advice in I changed jobs and I rolled over 690 00:31:05,600 --> 00:31:09,560 Speaker 1: my retirement account into a roth IRA with American funds 691 00:31:09,840 --> 00:31:12,720 Speaker 1: and haven't really looked at the account too much. Since then, 692 00:31:13,560 --> 00:31:17,200 Speaker 1: I recently opened up an investment account with a robo advisor, 693 00:31:17,480 --> 00:31:20,840 Speaker 1: and I also started contributing for the past few months 694 00:31:20,880 --> 00:31:24,320 Speaker 1: to the American Funds account. Again, I just realized that 695 00:31:24,360 --> 00:31:28,280 Speaker 1: there is a five point seven five percent sales charged 696 00:31:28,320 --> 00:31:31,240 Speaker 1: with that account um and that seems really steep to me. 697 00:31:31,960 --> 00:31:35,000 Speaker 1: My question is should I stop contributing, contributing to that 698 00:31:35,040 --> 00:31:38,800 Speaker 1: account and transfer everything into my new account with the 699 00:31:38,880 --> 00:31:43,440 Speaker 1: robo advisor, transfer it to somewhere else like Vanguard, or 700 00:31:43,480 --> 00:31:47,440 Speaker 1: continue to just let it hang out. Thank you, Casey, 701 00:31:47,480 --> 00:31:49,440 Speaker 1: thanks for your question. I'm so glad you asked it, 702 00:31:49,480 --> 00:31:53,160 Speaker 1: because yes, that is a huge fee. And really you 703 00:31:53,160 --> 00:31:55,640 Speaker 1: said you're just now getting into financial independence. Well, if 704 00:31:55,680 --> 00:31:58,520 Speaker 1: you really want to reach the point of financial independence, 705 00:31:58,800 --> 00:32:02,800 Speaker 1: you definitely need to prioritize avoiding investing fees. They can 706 00:32:02,840 --> 00:32:05,560 Speaker 1: do major damage to your overall returns over the years, 707 00:32:05,560 --> 00:32:08,160 Speaker 1: and that's going to drastically affect how quickly you're going 708 00:32:08,240 --> 00:32:11,080 Speaker 1: to to reach financial independence. And we actually discussed that 709 00:32:11,120 --> 00:32:13,800 Speaker 1: in great detail back in episode so I would definitely 710 00:32:13,800 --> 00:32:16,760 Speaker 1: suggest you go back and check that episode out. I 711 00:32:16,760 --> 00:32:19,240 Speaker 1: think it would be really helpful. Joel Man, Not only 712 00:32:19,360 --> 00:32:23,080 Speaker 1: are the fees associated with buying and selling those funds 713 00:32:23,520 --> 00:32:26,880 Speaker 1: really high. But the actual funds themselves have really high 714 00:32:26,920 --> 00:32:30,200 Speaker 1: expense ratios. The funds themselves are really expensive. So casey, 715 00:32:30,200 --> 00:32:32,320 Speaker 1: you're asking if you should let those funds continue to 716 00:32:32,440 --> 00:32:35,200 Speaker 1: sort of hang out, Well, no, right, you don't want 717 00:32:35,240 --> 00:32:37,320 Speaker 1: to let those ones hanging out because the funds themselves 718 00:32:37,320 --> 00:32:40,800 Speaker 1: are really expensive. In addition to these sales fees, American 719 00:32:40,840 --> 00:32:44,880 Speaker 1: Funds has mutual funds with expense ratios even over one percent, 720 00:32:45,240 --> 00:32:47,000 Speaker 1: but most of them are in the sort of point 721 00:32:47,080 --> 00:32:50,200 Speaker 1: six two point seven percent range, which is still about 722 00:32:50,240 --> 00:32:52,920 Speaker 1: twenty times more than what you should be paying if 723 00:32:52,920 --> 00:32:57,120 Speaker 1: that money was invested in Vanguard or Fidelity funds. American 724 00:32:57,160 --> 00:33:00,960 Speaker 1: funds have higher expense ratios because the funds are actively 725 00:33:01,040 --> 00:33:04,520 Speaker 1: managed and those guys doing you know, all that unnecessary 726 00:33:04,520 --> 00:33:06,520 Speaker 1: buying and selling, like those guys want to get paid. 727 00:33:06,720 --> 00:33:09,920 Speaker 1: So that's why there are higher expense ratios associated with 728 00:33:10,000 --> 00:33:12,720 Speaker 1: those funds. Yeah, and for most investors out there, of 729 00:33:12,840 --> 00:33:17,640 Speaker 1: avoiding actively managed funds is definitely your best bet because 730 00:33:17,680 --> 00:33:21,240 Speaker 1: those fees they can seem a little insignificant or less 731 00:33:21,240 --> 00:33:23,280 Speaker 1: than one percent, Well, well how big can that actually be? 732 00:33:23,560 --> 00:33:25,360 Speaker 1: When you look at the numbers. It has just a 733 00:33:25,400 --> 00:33:28,080 Speaker 1: massive effect on on how much you're able to actually 734 00:33:28,120 --> 00:33:30,720 Speaker 1: have when you hit retirement age. And Matt, you just 735 00:33:30,760 --> 00:33:33,760 Speaker 1: mentioned Vanguard, they're one of our favorites. Fidelity is also great. 736 00:33:34,000 --> 00:33:36,760 Speaker 1: Fidelity actually offers a fund that has a zero expense 737 00:33:36,840 --> 00:33:39,240 Speaker 1: ratio and it doesn't really get better than that. If 738 00:33:39,280 --> 00:33:42,920 Speaker 1: you search f z r o X f c Rocks 739 00:33:43,040 --> 00:33:45,760 Speaker 1: FC Rocks. I love saying that, I know you do. 740 00:33:46,080 --> 00:33:48,960 Speaker 1: I know you do. That's their total stock market fund 741 00:33:49,160 --> 00:33:51,160 Speaker 1: and that's the one with the zero expense ratio. That's 742 00:33:51,160 --> 00:33:53,200 Speaker 1: what you should look out for if you do decide 743 00:33:53,240 --> 00:33:55,880 Speaker 1: to go with the company like Fidelity. But regardless of 744 00:33:55,920 --> 00:33:58,080 Speaker 1: which of these low cost companies you go with, there 745 00:33:58,120 --> 00:33:59,880 Speaker 1: are a lot of good ones out there to choose from. 746 00:34:00,080 --> 00:34:02,479 Speaker 1: With companies like Fidelity and being Are, there are no 747 00:34:02,560 --> 00:34:05,720 Speaker 1: sales charges, so that five point seven five percent front 748 00:34:05,760 --> 00:34:07,120 Speaker 1: load is going to be a thing of the past. 749 00:34:07,160 --> 00:34:09,480 Speaker 1: And and honestly, it's just really nice to get rid 750 00:34:09,480 --> 00:34:11,920 Speaker 1: of that. It's nice to know that your money is 751 00:34:11,960 --> 00:34:16,680 Speaker 1: being invested incredibly efficiently with these companies. Almost all the 752 00:34:16,680 --> 00:34:19,520 Speaker 1: money that you're investing is actually working for you. Yeah, 753 00:34:19,560 --> 00:34:21,200 Speaker 1: I just want to point out how much five point 754 00:34:21,280 --> 00:34:24,400 Speaker 1: seven five percent is man Like, that's a lot of money, right, Like, 755 00:34:24,440 --> 00:34:27,320 Speaker 1: everyone can do math, but that means over fifty bucks 756 00:34:27,600 --> 00:34:31,640 Speaker 1: evaporates basically every time you invest a thousand dollars. Casey, 757 00:34:31,680 --> 00:34:33,759 Speaker 1: I'm I'm bummed that you already lost that money, but 758 00:34:33,800 --> 00:34:35,440 Speaker 1: hopefully that's going to be a thing of the past. 759 00:34:35,920 --> 00:34:38,080 Speaker 1: And then you mentioned robo advisors as well, that could 760 00:34:38,080 --> 00:34:40,920 Speaker 1: be a great option. We like Betterments, we like wealth Front. 761 00:34:41,360 --> 00:34:43,839 Speaker 1: M one is also really good. Really it depends on 762 00:34:43,880 --> 00:34:46,640 Speaker 1: how much handholding you like. But Betterment and wealth Front 763 00:34:46,680 --> 00:34:49,840 Speaker 1: they both offer digital portfolio management for a fee of 764 00:34:50,040 --> 00:34:53,399 Speaker 1: point to five percent, and M one they offer their 765 00:34:53,400 --> 00:34:57,200 Speaker 1: services completely free charge, which we really love. We'll put 766 00:34:57,200 --> 00:34:59,239 Speaker 1: a link to an article about M one in our 767 00:34:59,280 --> 00:35:02,280 Speaker 1: show notes. So, assuming you're with one of those robo advisors, 768 00:35:02,280 --> 00:35:05,200 Speaker 1: transferring your roth IRA from American Funds to the robot 769 00:35:05,520 --> 00:35:09,000 Speaker 1: should be pretty easy without any tax consequences. If you 770 00:35:09,080 --> 00:35:12,480 Speaker 1: do a direct transfer where it's trustee to trustee, and 771 00:35:12,520 --> 00:35:15,680 Speaker 1: that's basically where you never receive a check from American Funds, 772 00:35:15,719 --> 00:35:19,560 Speaker 1: they transfer that money directly to the new trustee, whether 773 00:35:19,640 --> 00:35:22,120 Speaker 1: that be Betterment, Wealth Front or M one. Yeah, because 774 00:35:22,120 --> 00:35:24,160 Speaker 1: there's a ticking time bomb. If you get a check 775 00:35:24,200 --> 00:35:26,520 Speaker 1: in your hand and don't have it to the new 776 00:35:26,560 --> 00:35:29,960 Speaker 1: investment company within like sixty days, right, Yeah, you're gonna 777 00:35:29,960 --> 00:35:31,920 Speaker 1: be in big trouble and you're gonna be paying taxes 778 00:35:31,920 --> 00:35:33,799 Speaker 1: and penalties on that money. You don't want to do that, 779 00:35:33,960 --> 00:35:36,120 Speaker 1: so so definitely make sure to do that. Trust you 780 00:35:36,200 --> 00:35:40,600 Speaker 1: to trustee transferred. It's it's crucial. Yeah, man. One let's 781 00:35:40,600 --> 00:35:43,280 Speaker 1: take it now back to our beer, which is Liquid 782 00:35:43,400 --> 00:35:45,920 Speaker 1: star Dust and this is a sparkling I p A 783 00:35:46,040 --> 00:35:49,160 Speaker 1: by Surly Brewing Company. This is out of a good 784 00:35:49,160 --> 00:35:51,759 Speaker 1: state of Minnesota. I think Suraly is like it's got 785 00:35:51,840 --> 00:35:54,120 Speaker 1: to be their biggest well known brewery there, right, Yeah, 786 00:35:54,200 --> 00:35:56,000 Speaker 1: certainly has been around a long time at this point, 787 00:35:56,040 --> 00:35:57,799 Speaker 1: like one of the o g s and craft beer 788 00:35:57,880 --> 00:36:00,080 Speaker 1: for sure. Yeah, they're like one of the godfathers of 789 00:36:00,160 --> 00:36:03,440 Speaker 1: the craft beer movement. They've been around for a long time. Joel, 790 00:36:03,520 --> 00:36:05,120 Speaker 1: this was an I p A. What did you think 791 00:36:05,120 --> 00:36:07,239 Speaker 1: about it? Was this like any other I PA you've 792 00:36:07,239 --> 00:36:09,879 Speaker 1: had before? It honestly wasn't. Man, it was really really 793 00:36:09,920 --> 00:36:13,200 Speaker 1: interesting you up. Yeah, this beer is kind of like 794 00:36:13,200 --> 00:36:15,080 Speaker 1: a brute I p A, which is in that kind 795 00:36:15,120 --> 00:36:18,840 Speaker 1: of champagne beer hybrid concept that that's kind of becoming 796 00:36:18,880 --> 00:36:21,000 Speaker 1: really popular right now, And I gotta be honest, I 797 00:36:21,040 --> 00:36:23,319 Speaker 1: haven't really taken to it very much. It's it's not 798 00:36:23,360 --> 00:36:26,320 Speaker 1: a style I would normally gravitate towards. I really enjoyed 799 00:36:26,360 --> 00:36:28,719 Speaker 1: this one though. This one was just a better representation 800 00:36:28,760 --> 00:36:31,480 Speaker 1: than the other ones I've had. It was a bit bubbly, 801 00:36:31,680 --> 00:36:34,359 Speaker 1: it finished nice and clean. It really was just an 802 00:36:34,360 --> 00:36:37,280 Speaker 1: interesting beer. I love the idea of a beer wine hybrid. 803 00:36:37,719 --> 00:36:40,240 Speaker 1: I'm definitely more of a beer guy than a wine guy. 804 00:36:40,320 --> 00:36:42,760 Speaker 1: But with some of those sours kind of already gravitate 805 00:36:42,760 --> 00:36:44,879 Speaker 1: towards that, right that you can get like some red 806 00:36:44,880 --> 00:36:47,040 Speaker 1: wine vibes or some white wine vibes when you're drinking 807 00:36:47,040 --> 00:36:49,759 Speaker 1: a sour, But a beer with champagne influences, I can 808 00:36:49,800 --> 00:36:51,719 Speaker 1: dig it. And I definitely dug this one. Yeah. Well, 809 00:36:51,719 --> 00:36:53,920 Speaker 1: it's got that dryness going on, right Like that's I 810 00:36:53,960 --> 00:36:56,680 Speaker 1: feel like to me, that's what really characterizes these brute 811 00:36:56,680 --> 00:36:58,800 Speaker 1: I p A s. It's less of the juicy aspect 812 00:36:58,800 --> 00:37:00,279 Speaker 1: of it, which is one of the things we love 813 00:37:00,320 --> 00:37:02,680 Speaker 1: about the kind of New England style, and really a 814 00:37:02,680 --> 00:37:04,120 Speaker 1: lot of types of the different I p a S 815 00:37:04,239 --> 00:37:07,120 Speaker 1: is the juicy, nous brute, I p a S super 816 00:37:07,200 --> 00:37:10,120 Speaker 1: dry um and this one specifically. Man. So, you know, 817 00:37:10,200 --> 00:37:12,040 Speaker 1: when you're you've got like a piece of paper and 818 00:37:12,080 --> 00:37:13,920 Speaker 1: you're you've got your ball point pin and you do 819 00:37:13,960 --> 00:37:15,799 Speaker 1: it a little bunch on it, there's like a lot 820 00:37:15,840 --> 00:37:18,759 Speaker 1: of ink on the paper. You know that smell that 821 00:37:18,840 --> 00:37:20,840 Speaker 1: you get when you smell that ink. That's what this 822 00:37:20,920 --> 00:37:22,440 Speaker 1: kind of tastes like to me, Like it kind of 823 00:37:22,480 --> 00:37:25,080 Speaker 1: smells like ball point pin ink. And I mean that 824 00:37:25,160 --> 00:37:27,160 Speaker 1: in the best way, Like if you're tasting notes are 825 00:37:27,200 --> 00:37:29,480 Speaker 1: always all over the place. I'm telling you, that's that's 826 00:37:29,520 --> 00:37:32,319 Speaker 1: what I tasted. It tasted like the way that ink 827 00:37:32,600 --> 00:37:35,359 Speaker 1: smells on paper, which I know it's kind of weird, 828 00:37:35,440 --> 00:37:37,960 Speaker 1: but it's kind of got like this hoppy Pilsner sort 829 00:37:38,000 --> 00:37:40,640 Speaker 1: of flavor going on with it. To me, it smelled 830 00:37:40,760 --> 00:37:42,920 Speaker 1: more like hops than it actually tasted. You know, you 831 00:37:42,960 --> 00:37:44,799 Speaker 1: said clean, Like that's I feel like the best way 832 00:37:44,800 --> 00:37:47,680 Speaker 1: to describe this. Just real clean, real sparkly, real refreshing, 833 00:37:48,000 --> 00:37:49,920 Speaker 1: and it's got like these kind of old school like 834 00:37:50,000 --> 00:37:52,640 Speaker 1: sparkles all over the can. We'll put the canard up 835 00:37:52,719 --> 00:37:54,520 Speaker 1: on our show notes like we always do as well, 836 00:37:54,880 --> 00:37:56,960 Speaker 1: but I really enjoyed this beer. This is a nice 837 00:37:57,040 --> 00:37:59,160 Speaker 1: change of pace compared to a lot of the styles 838 00:37:59,160 --> 00:38:01,160 Speaker 1: of I p a s that we typically have, And 839 00:38:01,160 --> 00:38:03,000 Speaker 1: I'm really thankful for our friends over at Surly for 840 00:38:03,080 --> 00:38:05,080 Speaker 1: sending this one our way. Yeah. I agree, This one 841 00:38:05,160 --> 00:38:07,319 Speaker 1: was a fun one and the folks at Surly are 842 00:38:07,360 --> 00:38:09,840 Speaker 1: awesome people. All right, Matt, that's gonna do it for 843 00:38:09,920 --> 00:38:12,839 Speaker 1: this episode. We'll have links to the show notes along 844 00:38:12,840 --> 00:38:15,719 Speaker 1: with other articles that we've written up on our website, 845 00:38:15,840 --> 00:38:18,240 Speaker 1: how to money dot Com. Also up on our website 846 00:38:18,320 --> 00:38:20,279 Speaker 1: is a way to let us know. If you feel 847 00:38:20,320 --> 00:38:21,960 Speaker 1: that we could do a better job. Just go do 848 00:38:22,000 --> 00:38:24,960 Speaker 1: how to money dot com slash do better and you 849 00:38:25,000 --> 00:38:26,840 Speaker 1: can leave us some feedback there. We're always looking for 850 00:38:26,880 --> 00:38:29,680 Speaker 1: ways to improve. However, if you think this show totally 851 00:38:29,760 --> 00:38:32,160 Speaker 1: rocks and you haven't left us a review, we would 852 00:38:32,200 --> 00:38:33,840 Speaker 1: love for you to to do that, head over to 853 00:38:33,840 --> 00:38:36,000 Speaker 1: Apple Podcasts and you can rate and review us over 854 00:38:36,040 --> 00:38:38,799 Speaker 1: there and subscribe wherever it is that you listen to 855 00:38:38,840 --> 00:38:41,560 Speaker 1: your podcasts. Joel, that's gonna be it for this episode. Man. 856 00:38:41,640 --> 00:38:44,919 Speaker 1: Until next time, Best friends are Out, Best Friends Out,