Speaker 1: Welcome to How to Money. I'm Joel and I'm Matt,
Speaker 1: and today we're discussing why everything costs more than you think. Joel,
Speaker 1: you and I are best friends, and a lot of
Speaker 1: our new listeners may have heard that, but they don't
Speaker 1: know how we got to be friends. How deep this
Speaker 1: friendship runs? Do you do you remember when we first met? Honestly, dude,
Speaker 1: I don't. It was it made that much of an
Speaker 1: impression on you. If you remember our origin story, please
Speaker 1: so honestly share. Yeah, honestly, I don't remember when we
Speaker 1: actually met. The first memory, though, that I do have
Speaker 1: is some friends of ours, mutual friends, had invited Kate
Speaker 1: and I over to play some board games, and you
Speaker 1: and Emily were also there, and I think we may
Speaker 1: have been playing some original uh Settlers of Caitan. Oh yeah,
Speaker 1: that's like that. That's not about right, It's like the
Speaker 1: gateway drug for nerdy board games. Yeah, so I think
Speaker 1: this is about eight years ago, and yeah, that's when
Speaker 1: we that's when we first started hanging out. I don't
Speaker 1: have anything specific about that night. I'm sure I whipped
Speaker 1: your tail some Settlers, but unlikely. That is funny that
Speaker 1: it started out with us playing board games because we're
Speaker 1: both super into nerdy board games. We did a whole
Speaker 1: episode on it back in the day, and we made
Speaker 1: recommendations kind of for some of our favorites. But yeah, dude,
Speaker 1: I think it's not a knock on you because obviously
Speaker 1: we're best friends. But I barely remember, like the birth
Speaker 1: of my first daughter. Now, I just feel like so
Speaker 1: many five years have passed and that part of my
Speaker 1: memory is just almost gone. I feel like the most
Speaker 1: cemented memories I have of our friendship going back were
Speaker 1: two times that we traveled together as couples. And the
Speaker 1: first one was we left on Halloween like six years
Speaker 1: ago and we went to Ireland together as a family,
Speaker 1: and I think we mentioned that on the podcast at
Speaker 1: one at one point. And then a trip that we
Speaker 1: had to the Keys, which we kind of piggybacked on
Speaker 1: you having a photo shoot a thing that you had
Speaker 1: to shoot down there, and we kind of stayed together.
Speaker 1: And that trip to the Keys, when we had our
Speaker 1: our oldest daughters were only just a few months old.
Speaker 1: I just distinctly remember that trip to Those are kind
Speaker 1: of the memories that really are cemented from our early
Speaker 1: friendship days. So basically you'll remember things where there's pictures
Speaker 1: associated with it that you can go back and see
Speaker 1: pretty much. Yeah, so it's interesting you mentioned that that
Speaker 1: sort of Keys Florida Keys work photography trip because I remember,
Speaker 1: actually before even Ireland, was one time when Kate and
Speaker 1: I did some photography work for a restaurant and one
Speaker 1: of the things that we negotiated with them was that
Speaker 1: we got a sweet Fats get certificate. H that's right, Yeah,
Speaker 1: that they paid us in food and this place is
Speaker 1: really good. This is a really great restaurant here in Atlanta.
Speaker 1: And that was super early on in our friendship, very
Speaker 1: very early on. Yeah, you invited us to this fancy dinner.
Speaker 1: I was like, oh, I don't know him like that,
Speaker 1: but well, the reason being because so, yeah, we got
Speaker 1: this huge gift certificate and Kate and I looked at
Speaker 1: each other and we thought, we can't this is a
Speaker 1: lot of money and to be more fun if we
Speaker 1: went with some friends. So we thought of you guys.
Speaker 1: And what I really remember though, is that we hadn't
Speaker 1: gone to a lot of nice restaurants at that point
Speaker 1: in our lives. We totally novices nice restaurants, and I'm
Speaker 1: pretty sure you had on a T shirt, but we
Speaker 1: walked in and probably a band T shirt or something.
Speaker 1: We were I think we were all a little under
Speaker 1: underdressed backwards hat, yes, but we yeah, enjoyed a really
Speaker 1: nice dinner. I do remember that. I remember getting some
Speaker 1: awesome steak and maybe that was really what cemented it
Speaker 1: for us, right, Yeah, bonding over meat? Yeah, why not?
Speaker 1: I started all you vegetarians out there, But yeah, so
Speaker 1: traveling together as friends and and a great meal sometimes
Speaker 1: and and then nerdy board games. Man, I feel like
Speaker 1: that kind of encompasses some of the things that we
Speaker 1: enjoy the most and uh and still enjoy kind of
Speaker 1: doing together when whenever we can, let's do it some more.
Speaker 1: So that's uh for all you new listeners, that's kind
Speaker 1: of how Matt and I became best friends. And then,
Speaker 1: like you'll find out as you continue listening to this show,
Speaker 1: we talked about the things on this show that we
Speaker 1: care about that we already enjoy way discussing and and
Speaker 1: we started this podcast because we love craft beer and
Speaker 1: we love talking about money things that matter to us.
Speaker 1: And so yeah, this podcast is really just kind of
Speaker 1: an excuse for Matt and I to do what we
Speaker 1: would be doing anyway, and we're having a blast doing it,
Speaker 1: like drinking beer and talking about it too, right, Yeah,
Speaker 1: and today we are drinking a beer called Pretty Willie's
Speaker 1: Imperial Stout by Against the Grain Brewery. This is a
Speaker 1: beer that my real estate agent gave to me over
Speaker 1: a year ago when I closed on a house. And this,
Speaker 1: in particular is a beer that you're supposed to let
Speaker 1: rest and evolve, and so we're gonna kind of see
Speaker 1: how it's drinking. We'll do. Thanks so much for sharing
Speaker 1: this one with me. Cheers, Bunny, cheers. All Right, Matt,
Speaker 1: give me one word that describes how you feel about
Speaker 1: this beer after just one zip, only one word. I
Speaker 1: feel like this is gonna be harder for you than
Speaker 1: me because I'm ver both. Yeah, Joel tends to be
Speaker 1: the one that talks a little bit more on the show,
Speaker 1: which is totally fine. If I had my own podcast
Speaker 1: by myself, it might only be five minut it. But
Speaker 1: if it was just you talking, who knows how long
Speaker 1: you'd go. That's true, Okay, but back to you, so
Speaker 1: one word. Okay, this is gonna be weird, but I'm
Speaker 1: gonna say jacket, all right, that's weird. But I think
Speaker 1: we've already mentioned, Jacket. I think we mentioned on the
Speaker 1: show before that you have some odd taste buds and
Speaker 1: some odd sensory abilities. You're like the beer somalier or
Speaker 1: this podcast. You bring that to the table. I have
Speaker 1: a much less developed palette. So my word, my one
Speaker 1: word for this beer for right now is going to
Speaker 1: be roasty. Nice. See roasty. That's I think everyone's gonna
Speaker 1: understand that, Jacket. I think what happens is I overthink
Speaker 1: stuff and now I'm just gonna have to actually explain myself.
Speaker 1: But we'll say that for the end of the show.
Speaker 1: Oh and by the way, Matt, since we're drinking a
Speaker 1: big barrel aged Imperial stout and this is one that
Speaker 1: it's meant to be kind of aged for a while
Speaker 1: in the cellar and then you're supposed to drink it. Uh.
Speaker 1: There was an article I read about barrel aged doubts
Speaker 1: and kind of the cult behind barrel aged outs. Right now,
Speaker 1: I find it fascinating that they've kind of become, um,
Speaker 1: this thing that people hunt for and spend lots of
Speaker 1: money on stouts like these. One of the things I
Speaker 1: thought that was cool about that article. They were talking
Speaker 1: about the costs associated with some of these beers where
Speaker 1: they are aged and they take special bourbon barrels, uh,
Speaker 1: and they actually take more material, like more ingredients to
Speaker 1: actually make the beer, and more warehouse space oftentimes because
Speaker 1: you're talking barrels. They mentioned in particular the Bourbon County
Speaker 1: series by Goose Island. They have multiple people working year
Speaker 1: round just to develop they can just maintaining that batch
Speaker 1: just to develop those Bourbon County beers, and it's really
Speaker 1: expensive to create, which leads to part of the reason
Speaker 1: these beers can cost so much. Yeah, and not just
Speaker 1: double the cost, but sometimes like quadruple the cost of
Speaker 1: a typical beer like this that you can pick up
Speaker 1: at your local grocery store. You get the special bourbon
Speaker 1: barrel aged version of it or any kind of barrel
Speaker 1: age typically and it's going to be a lot more
Speaker 1: because yeah, like you said, it's gonna take a lot
Speaker 1: more time, so a lot more manpower, but then also
Speaker 1: to the ingredients that go into it and be twice
Speaker 1: as much from a quantity standpoint. Yeah. So if you're
Speaker 1: at your local grocery store or bottle shop and you
Speaker 1: see a barrel aged down on the shelf and you
Speaker 1: look at the price tag and you think it's ridiculous. Well,
Speaker 1: there's a lot that goes into that, and not all
Speaker 1: of them are created equal. Some of them are better
Speaker 1: than others. And we would recommend kind of researching these
Speaker 1: beers before you spend twenty bucks on a bottle or
Speaker 1: fifteen bucks even on a bottle. And Untapped is a
Speaker 1: great resource to kind of look up what beer lovers
Speaker 1: think about the beer. But there is a reason behind
Speaker 1: the price tag, and so we want to go to
Speaker 1: kind of share that. And and Matt and I've talked
Speaker 1: about why we drink craft beer on the show every week.
Speaker 1: It's important to us. It's something that we care about.
Speaker 1: And we also want to encourage people to live a
Speaker 1: life that reflects their values, and this is something that
Speaker 1: we value. This is something that we place a high
Speaker 1: priority on good beer, and we're willing to spend the
Speaker 1: money for really good beer um and cut back in
Speaker 1: other areas right in order to make that happen. Yeah, man,
Speaker 1: that's right. Oh, before we move on, one other thing
Speaker 1: I just thought of. We recently did an episode on
Speaker 1: hedonic adaptation, right where you kind of get used to something,
Speaker 1: whether it be because it's really good and you kind
Speaker 1: of get used to that really good feeling and it
Speaker 1: kind of becomes your new normal, or how you can
Speaker 1: also get used to something that's kind of bad or
Speaker 1: negative and you kind of get used to that that
Speaker 1: becomes your new normal. Kate and I we've been out
Speaker 1: of our kitchen right because we've been renovating our house.
Speaker 1: We've been out of our kitchen for almost two months now,
Speaker 1: and honestly, I don't feel like much has changed for us,
Speaker 1: Like we've kind of gotten used to the fact that
Speaker 1: all of our stuff is crammed into our dining room.
Speaker 1: But I don't know, it just it just kind of
Speaker 1: struck me as interesting because I haven't been focusing on
Speaker 1: how terrible it's been. You just kind of roll with
Speaker 1: it and move on with life and it becomes your
Speaker 1: new normal. I'm surely the first two to three days
Speaker 1: we're kind of shocking a little more painful, But what
Speaker 1: I'm looking forward to is looking ahead and knowing that
Speaker 1: eventually we'll be able to move back into our normal,
Speaker 1: full space in our house, and certainly that's gonna be great.
Speaker 1: But I'm kind of worried too because on the other
Speaker 1: end of that, I think, well, it's gonna be really nice,
Speaker 1: But how quickly is it going to be before I
Speaker 1: get used to it? You know? Like it it took
Speaker 1: me zero time almost to get used to this sort
Speaker 1: of negative aspect of our lives, like being crammed into
Speaker 1: this less than ideal dining room. And then it's not
Speaker 1: gonna take you too much time to become used to
Speaker 1: be in a fancy pants exactly. Yeah, And man, I
Speaker 1: just don't want to become super fancy pants. That's not
Speaker 1: who I want to be. So we will get to
Speaker 1: why Matt's on one word for this beer was jacket. Uh,
Speaker 1: leg get later on, but first let's get to the
Speaker 1: topic of hand. Everything costs more than you think, and
Speaker 1: what Matt and I wanted to talk about on the
Speaker 1: show today is considering secondary costs. Anytime you make a purchase,
Speaker 1: the price tag that you're paying up front on whatever
Speaker 1: it is is not the only cost involved in making
Speaker 1: a purchase, and we wanted to talk about the other
Speaker 1: costs involved. Uh we're calling secondary costs, and those are
Speaker 1: additional costs that you will or might end up paying
Speaker 1: on a purchase that fall outside of that original purchase amount,
Speaker 1: and we think it's really really important to consider those
Speaker 1: things because it can be easy when you're budgeting or
Speaker 1: when you're considering making a purchase or adding something into
Speaker 1: your life to only consider that upfront price tag and
Speaker 1: not think about all those other dominoes that fall when
Speaker 1: it comes to the pricture of paying. And so, Matt,
Speaker 1: this podcast is going to be dedicated to those other
Speaker 1: dominoes that fall how that impacts like your wallet in
Speaker 1: your life, that's right. Yeah, Folks tend to not consider
Speaker 1: the sort of nickel and diming effect that happens after
Speaker 1: you make a purchase. Whether it's a quality purchase or
Speaker 1: a cheap purchase, it doesn't really matter. What we're talking about,
Speaker 1: like those expenses that, like you said, you may or
Speaker 1: may not pay, and let's start with the ones that
Speaker 1: you will pay. Yeah, So we kind of divided this
Speaker 1: up into two different kinds of secondary costs. One is
Speaker 1: a hard secondary cost and the other is a soft
Speaker 1: or lifestyle secondary cost. And so we'll kind of just
Speaker 1: quickly run through the definition and describe what's different about each.
Speaker 1: That's right, man. So hard secondary costs are what we're
Speaker 1: considering to be costs that you have to pay because
Speaker 1: it's either the law, right, so sales tax, like you
Speaker 1: have to pay sales tax. Or these might be costs
Speaker 1: that you have to pay because you signed an agreement
Speaker 1: where you promise that you will And these can be
Speaker 1: monthly fees or an h O a say in a
Speaker 1: condo that you live in, or these are costs because
Speaker 1: the item that you've purchased just requires it, you know,
Speaker 1: this sort of basic maintenance. And I'm not talking about fancy,
Speaker 1: high end maintenance or anything that kind of goes above
Speaker 1: and beyond maintaining that item and allowing it to you know,
Speaker 1: work and function like you wanted to. In these cases though,
Speaker 1: you don't have a choice. And these are things that
Speaker 1: you will have to pay. Yeah. So those hard costs, right,
Speaker 1: they are there for a lot of purchases, and we'll
Speaker 1: kind of go into some examples later on in the
Speaker 1: show too, but there there no matter what, and there's
Speaker 1: no getting around them. And they're also kind of easily
Speaker 1: identifiable upfront, Right, you can do the research, you can
Speaker 1: know the figures, and you can kind of know what
Speaker 1: you're getting into when it comes to some of those
Speaker 1: hard costs. But on the other hand, these soft secondary
Speaker 1: costs that we're gonna talk about, Matt their costs where
Speaker 1: you're likely going to feel pressured to pay because they
Speaker 1: fit and complement that primary purchase. So these are ones
Speaker 1: that you might not see you can't necessarily quantify upfront
Speaker 1: unless you're really really thoughtful. And an example of that
Speaker 1: would be if you get a new laptop, Oh, well,
Speaker 1: guess what, I need a new backpack to carry that
Speaker 1: laptop around in. And then you are like, well, you
Speaker 1: know what, I'm one of this cool backpack. I need
Speaker 1: a jacket to match or whatever it is, right, And
Speaker 1: it's like that if you give the mouse a cookie syndrome,
Speaker 1: where those are kind of what these soft secondary costs are.
Speaker 1: Those are we're calling them. And so if it's a
Speaker 1: purchase that you make that then forces you to feel
Speaker 1: like you need to upgrade something else in your life,
Speaker 1: and that's one of those soft secondary costs. It's a
Speaker 1: little harder to quantify up front, but we're gonna kind
Speaker 1: of go through some ways to help you figure out
Speaker 1: what those could be and how to decrease or maybe
Speaker 1: eliminate them even in your life. That's right, man, it's crazy, right,
Speaker 1: it's a little bit like lifestyle creep. It's kind of
Speaker 1: funny hearing you talk about an example with like the
Speaker 1: laptop with the bag and then the jacket, But it's
Speaker 1: almost like anytime something touches something else, it's like it
Speaker 1: getting gets infected with looking old, right, because you have
Speaker 1: something like new and shiny, and then in relation to
Speaker 1: the old stuff, you think it really would be nice
Speaker 1: if that was kind of upgraded as well, And then
Speaker 1: before you know it, where do you stop? Like, when
Speaker 1: do you stop? Where do you draw the line? And
Speaker 1: I think what's important to keep in mind, though, is
Speaker 1: that you can draw that line. You can decide that
Speaker 1: these are expense is that I'm not going to participate in,
Speaker 1: and that you have control over. And that's the biggest
Speaker 1: difference between a hard secondary cost versus the soft or
Speaker 1: lifestyle secondary cost is that the soft secondary lifestyle costs
Speaker 1: you just have control over, You have options. But either way,
Speaker 1: it's yeah, like you said, it's good to be aware
Speaker 1: of those and to know what steps you can take
Speaker 1: to keep the expenses down. Yeah, And I think all
Speaker 1: of us have experienced both ends of these, right, We've
Speaker 1: experienced buying something and we didn't realize or we didn't
Speaker 1: factor in those hard secondary costs. We made the purchase
Speaker 1: or we made the leap into something, and we didn't
Speaker 1: even take into consideration those costs that were inevitable, and
Speaker 1: we bore the bront of them after we made the decision.
Speaker 1: And maybe for some of us we had to put
Speaker 1: that on a credit card or yeah, like you with gasoline,
Speaker 1: you're like, oh man, this car takes gas. Totally forgot
Speaker 1: except I drive an electric car, So jokes on you.
Speaker 1: But yeah, there's all we've all been in that situation.
Speaker 1: And also in regards to the soft or lifestyle secondary costs,
Speaker 1: someone who is considering, let's say a bathroom renovation, well,
Speaker 1: I want to reach out the floors and put in
Speaker 1: a new toilet. Well, then you want a new tub
Speaker 1: because a tub looks old and nasty exactly, and then
Speaker 1: maybe a new vanity, and you know what, if the
Speaker 1: bathroom is gonna look this good, I think I needed
Speaker 1: to redo the kitchen at the same time. And so
Speaker 1: we've all experienced this in our lives to one extent
Speaker 1: or another, and it's just good to be aware of
Speaker 1: as we go into making purchases. It can help us
Speaker 1: to know when to say no. To things, and when
Speaker 1: things are out of our budget, out of our range,
Speaker 1: it gives us a better perspective and allows us to
Speaker 1: go into purchases with a little more like wisdom and
Speaker 1: knowledge behind us. And so we've been talking a lot
Speaker 1: lately about spending and consumption. And you know, a huge
Speaker 1: reason that Americans today are having issues with saving enough
Speaker 1: a retirement comes down to their spending. It's not that
Speaker 1: they're not making enough. More of it has to do
Speaker 1: with the fact that folks aren't investing and using that
Speaker 1: money that they've earned wisely, and that has led to
Speaker 1: a lot of people feeling insecure about their futures. And
Speaker 1: so right after the break, we're going to talk about
Speaker 1: why these secondary costs are so important, and then we'll
Speaker 1: also give some exam amples, some specific real life examples
Speaker 1: that will help you to see the difference between these
Speaker 1: two types of secondary spendings and just how being aware
Speaker 1: of these things can help you rain in your spending.
Speaker 1: All right, Matt, back from the break, and let's talk
Speaker 1: about why the secondary costs are so important, and it's
Speaker 1: because there's this major problem in America. Four out of
Speaker 1: five Americans are worried that they don't have enough in retirement, right,
Speaker 1: they are spending too much. And I gotta tell you,
Speaker 1: as we've been combing through this topic doing research for
Speaker 1: the show, Matt, I gotta believe that much of this
Speaker 1: is because of poorly thought out purchases, right, And those
Speaker 1: poorly thought out purchases lead to these outrageous secondary costs
Speaker 1: hard ones or lifestyle ones, either way, but they lead
Speaker 1: to those secondary costs for people that weren't factored in,
Speaker 1: and it leads to living a lifestyle where you're living
Speaker 1: month to month, paycheck to paycheck, and you can't get ahead.
Speaker 1: So I feel like that's the problem that we're trying
Speaker 1: to address in this episode. That's a very good sort
Speaker 1: of big picture as to why this is a problem,
Speaker 1: and then diving down to more the specifics. Right, deciding
Speaker 1: whether something is a solid purchase, right, can really only
Speaker 1: be made when you consider these costs before taking that plunge.
Speaker 1: And so if you jump into a purchase before crunching
Speaker 1: the numbers and realistically considering the complete financial picture, you
Speaker 1: could easily sink your budget. You need to do your homework,
Speaker 1: like this is just part of the due diligence period
Speaker 1: of making a purchase. You don't want to necessarily have
Speaker 1: what's it called an analysis paralysis, where you don't make
Speaker 1: a decision because you're so stuck on the numbers and
Speaker 1: you're so stuck on optimizing it and making it perfect
Speaker 1: that it keeps you from any action at all. But
Speaker 1: you have to do your homework. You have to take
Speaker 1: the steps necessary in order to make sure that you're
Speaker 1: setting yourself up for the future. Yeah, Matt, I love
Speaker 1: what you just said. They're due diligence. I feel like
Speaker 1: that is a great kind of way to think about
Speaker 1: the secondary costs of a major purchase or even a
Speaker 1: minor purchase that you're just about to make. Due diligence.
Speaker 1: When it comes to buying a house, is that seven
Speaker 1: or ten day or whatever you negotiate. Really, it's that
Speaker 1: period that you have after you're under contract on a
Speaker 1: house but you're not obligated to buy it. You know
Speaker 1: you want to, but you don't have to go exactly,
Speaker 1: and so that period of time gives you the ability
Speaker 1: to walk through their decide whether you're into it, get
Speaker 1: an inspection, all that stuff. That due diligence period is crucial,
Speaker 1: and so many people back out of that purchase during
Speaker 1: due diligence, right, And so I think due diligence is
Speaker 1: is probably the right phrase to use when we're talking
Speaker 1: about secondary costs of purchases we make doing that due diligence,
Speaker 1: taking that time period to factor in and to look
Speaker 1: at those secondary costs, and then whether your purchase is
Speaker 1: a wise one or not, whether you can afford it
Speaker 1: or you can't, or whether it's worth it to you
Speaker 1: or it isn't. Like that due diligence period is going
Speaker 1: to tell you, you you know, whether that purchase with its
Speaker 1: associated secondary costs is right for you. Let's give examples
Speaker 1: of some of the hard secondary costs when it comes
Speaker 1: to buying a house that will kind of help put
Speaker 1: it into perspective. It's not just the hundred fifty or
Speaker 1: two price tag that's associated with the home for most people.
Speaker 1: When you buy a home, there are many other hard
Speaker 1: costs associated with owning that right, So in particular, you
Speaker 1: need to figure in closing costs, getting that home inspection,
Speaker 1: which can be four or more potential repairs on the
Speaker 1: home that you'll need to make immediately and over time, insurance.
Speaker 1: The list just goes on and on and on of
Speaker 1: the hard costs that you're gonna pay when you buy
Speaker 1: a home. You're gonna have taxes annually on that home.
Speaker 1: The hard costs that are associated with the home purchase
Speaker 1: are real, they are lengthy, and they are necessary when
Speaker 1: you're considering whether you can afford that home purchase or not.
Speaker 1: And then in addition to this hard cost man, there's
Speaker 1: the lifestyle or soft secondary costs. And these are things
Speaker 1: like furniture. Right, you get that big empty house and
Speaker 1: you've got all these extra rooms that you're so happy
Speaker 1: to have, and the first thing that most people do
Speaker 1: is they start buying furniture exactly. And then that's honestly
Speaker 1: been one of the biggest problems Matt Is as home
Speaker 1: tizes have grown in America, they've pretty much doubled in
Speaker 1: the last thirty years. Certainly, the primary costs of more
Speaker 1: building material, of higher mortgage costs, right, that those factor in,
Speaker 1: But it's so secondary costs that really seen people so
Speaker 1: much of the time that they just didn't factor in.
Speaker 1: And a lot of it is these lifestyle secondary costs.
Speaker 1: It's the furniture to feel the ten rooms in your
Speaker 1: house versus the four rooms you would have had in
Speaker 1: something smaller yeah, man it what's so crazy about something
Speaker 1: like furniture, right, is that this isn't a hard cost
Speaker 1: where it's it's one and done, like, this is something
Speaker 1: that can change over time, and that can change with
Speaker 1: your taste. Who knows how much you could actually spend
Speaker 1: on furniture over the lifetime of a specific house because
Speaker 1: you could change your mind every I mean, you could
Speaker 1: change your mind every month. Right. That might be crazy,
Speaker 1: but you could. And so that's what's so difficult about
Speaker 1: these soft secondary costs, or these lifestyle costs, is that
Speaker 1: it's kind of up to you as a consumer. And
Speaker 1: as we know advertising in the way that's fashion and
Speaker 1: just different needs air quote needs are marketed to us,
Speaker 1: we feel convinced that we do need something different. We
Speaker 1: do need something that's fresher or a little slicker, or
Speaker 1: something that's a little more shiny. And that's what's so tricky, right, Like,
Speaker 1: that's the slippery slope of these lifestyle choices is that
Speaker 1: you have to keep yourself in check. And from most folks,
Speaker 1: it's not something that once you buy, once you're done,
Speaker 1: Like when you buy a couch. Most folks aren't thinking, cool,
Speaker 1: I'm done with buying couches for the rest of my life.
Speaker 1: They know that they'll probably be a new one or
Speaker 1: a different one maybe in ten years or five or
Speaker 1: even like two or three years, which is crazy in
Speaker 1: my book. Yeah, Matt, when you put into perspective the
Speaker 1: overall costs that you're going to bear when you buy
Speaker 1: a house, it completely changes the equation, right, And we've
Speaker 1: talked about in multiple episodes. We've talked about, you know,
Speaker 1: renting a house versus buying. We've talked about why your house,
Speaker 1: a primary house, is a bad investment, and some of
Speaker 1: these secondary costs are the exact reason why a primary
Speaker 1: home is not always a good investment, and it's because
Speaker 1: you overspend and it's a secondary cost that really turned
Speaker 1: that home purchase from something that might be okay into
Speaker 1: something that's terrible for your wallet. And honestly, like we
Speaker 1: touched on our home renovation earlier in the show, and
Speaker 1: that's something that Kate and I that we've struggled with.
Speaker 1: You start making improvements on your house, and you start,
Speaker 1: like you said, like the examples you gave those are
Speaker 1: pretty close to home because they're happening in our home
Speaker 1: right now. Bam. But yeah, you start making improvements, and
Speaker 1: you have to make the decision where are we going
Speaker 1: to draw the line because you think, okay, we've got
Speaker 1: this wall open, why not why not go ahead and
Speaker 1: make this improvement, or let's go ahead and insulate this
Speaker 1: because you can justify it. You can say, oh, well,
Speaker 1: this is for energy savings. Oh, this is something that
Speaker 1: is gonna in the long term, it's gonna save us money.
Speaker 1: But eventually you're gonna run out of money and you're
Speaker 1: gonna have to say no, or you're not going to
Speaker 1: run out of money, and you just need to say no. Right,
Speaker 1: you have to decide this is enough, We're happy with this.
Speaker 1: It doesn't matter that this isn't quite as nice. It's
Speaker 1: gonna be fine. The same thing I think applies to
Speaker 1: to our rental properties. Man, You and I both have
Speaker 1: rental properties, we have investment properties, and time to time
Speaker 1: things need to be replaced or upgraded because it's just old, nasty,
Speaker 1: and you have to make those decisions of where are
Speaker 1: you gonna draw the line because you, like you said,
Speaker 1: you you replace one item, say in the bathroom, and
Speaker 1: you think, okay, that's gonna look terrible if we leave
Speaker 1: it like that. Let's just go ahead and revamp the
Speaker 1: whole bathroom. Well then you've got like a really nice bathroom,
Speaker 1: but the kitchen looks kind of rough, like you said.
Speaker 1: And so it's not necessarily only with consumption, but it
Speaker 1: can also be with what most folks would consider an investment.
Speaker 1: Where is a smart line to draw? And honestly, like
Speaker 1: that's the toughest question, and that's why it comes down
Speaker 1: to you as an individual. So yeah, Matt, let's give
Speaker 1: a few more example. It's just kind of flesh this out,
Speaker 1: because I feel like these examples really hammer home the
Speaker 1: reality of these hard secondary costs and the soft secondary costs,
Speaker 1: which can make a purchase that looks good on the
Speaker 1: front end actually a bad one. And so let's take,
Speaker 1: for instance, going to college, the hard secondary costs that
Speaker 1: are taking out loans, and those loans have interest unless
Speaker 1: you're this super uber smart person and you've got mad
Speaker 1: mega scholarships or whatever it is, which is awesome. Most
Speaker 1: people in America, I mean, obviously we all know the
Speaker 1: student loan debt crisis in America. One point five trillion
Speaker 1: dollars in student loan debt. It's just out of this world, right,
Speaker 1: It's crazy and it's ruined the lives of many, many people.
Speaker 1: You have to factor in as you are going off
Speaker 1: to college, as your kids are going off to college,
Speaker 1: those hard costs, the loans and interest, and what that's
Speaker 1: gonna do to you over the long haul, and you
Speaker 1: have to compare it to the usefulness of that college
Speaker 1: degree for you over the long haul, especially in a
Speaker 1: changing economy where requirements of individuals in the workforce are
Speaker 1: changing almost daily, not just every decade, right, but but
Speaker 1: almost daily that the requirements for young people coming to
Speaker 1: the workforce is changing. So if you have a college
Speaker 1: degree that you think today is going to be useful
Speaker 1: for the next thirty years, I mean, there's a small
Speaker 1: chance that you're right, but there's a big chance that
Speaker 1: you're wrong, and that those costs that you incurred actually
Speaker 1: aren't going to pay off in the way that you
Speaker 1: thought they were. Yeah, man, and even room and board, like,
Speaker 1: if you're going off to college, it costs some money
Speaker 1: to survive. It costs some money to have a place
Speaker 1: to sleep and to live, and you got to feed
Speaker 1: yourself even in college. But yeah, those are some of
Speaker 1: the hard secondary costs associated with college, and so some
Speaker 1: of the lifestyle secondary cost man associated with college are
Speaker 1: what sort of revolve around the experience, what people think
Speaker 1: of when they go off to college and they want
Speaker 1: to have this sort of best four years of their life.
Speaker 1: You're talking about keggers, right, Yeah, kiggers, I mean like
Speaker 1: literally partying, but folks oftentimes will say instead traveling abroad
Speaker 1: or spring break. But all that sort of plays into
Speaker 1: the American mentality of like the college experience and even
Speaker 1: going out to you with friends, Like it doesn't have
Speaker 1: to be something that where it's this huge, big ticket item,
Speaker 1: but just the sort of daily lifestyle thing this aspect
Speaker 1: that people associate with college. Yeah, or going on a
Speaker 1: spring break trip with your friends, right, those are the
Speaker 1: kind of things that come up when you're in college.
Speaker 1: That are these lifestyle secondary costs, right, that you're going
Speaker 1: to incur if you can't keep it under control. Right
Speaker 1: and and like we said at the beginning of the
Speaker 1: of the show, some of these are controllable. Some of
Speaker 1: these are under your control. You can decide to back up,
Speaker 1: hit the brakes on that spring break trip, and with
Speaker 1: that control, you're able to save yourself some money. Right.
Speaker 1: You could say no to eating out, even though all
Speaker 1: your friends are doing it. We're just saying, think about
Speaker 1: these things, think about these costs that are likely to occur,
Speaker 1: because saying no in the moment can be really hard.
Speaker 1: Because there are ways, especially with these lifestyle secondary costs,
Speaker 1: to actually cut down on those expenses. But just be
Speaker 1: aware that they are likely to at minimum tempt you
Speaker 1: to spend money on those things that other people around
Speaker 1: you are spending money on. Just know that some of
Speaker 1: those hard secondary costs are immovable when you make that choice.
Speaker 1: And then some of those lifestyle secondary costs, they're either
Speaker 1: likely that you're going to make that choice or it's
Speaker 1: gonna take some resolve in order to make sure that
Speaker 1: you don't incur those costs. Yeah, that's right. At the
Speaker 1: very least, it's gonna be very tempting to also want
Speaker 1: to go on that trip. Yeah. And so another example,
Speaker 1: let's talk about cars or transportation, and so it's not
Speaker 1: just the cost of the car, right, there are a
Speaker 1: lot of hard secondary costs associated with vehicles, things like
Speaker 1: gas or insurance and repairs. Right. These are all things
Speaker 1: that you know in your head mentally that these are
Speaker 1: things I'm gonna have to pay, but it's not until
Speaker 1: you actually go to the mechanic and you get that bill,
Speaker 1: or you start receiving that insurance bill, the rubber hits
Speaker 1: the road, exactly, you're gonna have to get new tires.
Speaker 1: This is when you're gonna realize how much owning a vehicle,
Speaker 1: owning a car is actually going to cost you. Yeah,
Speaker 1: the full amount of that original expense. Right. And so
Speaker 1: if you buy a new car forty dollars or a
Speaker 1: used car for five thousand dollars, there are secondary costs
Speaker 1: that are immovable to a large extent, right, Uh, And
Speaker 1: knowing that before you make the plunge is huge. So,
Speaker 1: for instance, in our state, matt when you buy a
Speaker 1: used car or a new car, you pay this. You
Speaker 1: pay the sales tax upfront day one, right. Well, and dude,
Speaker 1: in specific to Georgia, you don't even have to have
Speaker 1: purchased the vehicle. Even if you bring that vehicle from
Speaker 1: out of state into our state, you have to pay
Speaker 1: that tax. I know, I feel insane. I feel so
Speaker 1: bad for anyone moving from another state, having bought a
Speaker 1: new car recently and having potentially paid sales tax in
Speaker 1: their home state, moving here and then paying it again. Honestly,
Speaker 1: it's highway robbery. It's it's not right that. Tell you
Speaker 1: about my buddy Cal that moved from New York. He's
Speaker 1: got a great job, makes makes a good amount of money.
Speaker 1: But he had recently purchased a Beamer fancy you know,
Speaker 1: fancy BMW. Yeah, and it was only a couple of
Speaker 1: years old, and he moved back to Atlanta, and dude,
Speaker 1: he got hit with like a five over five thousand
Speaker 1: dollar bill, not because he purchased it, but because he
Speaker 1: is registering and transferring that vehicle to the state of
Speaker 1: Georgia that he got nailed with that like, welcome to Georgia, dude,
Speaker 1: pay up. Yeah, it's not right, it's rough. But those
Speaker 1: are the kind of costs, right, So if I know
Speaker 1: that ahead of time, I can pack her in. Well,
Speaker 1: you know what, if I buy a thirty thousand dollar car,
Speaker 1: I'm going to be hit with a multi thousand dollar
Speaker 1: tax bill. If I buy a four thousand dollar car,
Speaker 1: I'll be hit with a multi hundred dollar tax bill.
Speaker 1: And that's a big difference. Right when we're factoring in
Speaker 1: those secondary costs, it massively influences the decision that we
Speaker 1: make on that primary purchase. Right, And so directly in
Speaker 1: a car or a home. Those secondary costs should have
Speaker 1: a major overriding influence, I would say, on whether we
Speaker 1: make the primary purchase to begin with, or whether we
Speaker 1: choose to make do with what we have or off
Speaker 1: for something maybe a little less fancy. You know, this
Speaker 1: actually makes me think of when you're purchasing a home
Speaker 1: and if you're actually well, if you're not paying cash,
Speaker 1: if you're getting a loan, which is I guess people
Speaker 1: out there and you get that. Actually, actually I think
Speaker 1: it's only seventy isn't that crazy? People pay cash for houses,
Speaker 1: let's ball, or not pay cash for houses but own
Speaker 1: their homes at least in full. Okay, so, but that
Speaker 1: would be interesting to know how what plands people pay
Speaker 1: cash for houses. It's fascinating. I'm curious. But either way,
Speaker 1: the Truth and Lending Statement, you know, I'm talking about
Speaker 1: the Truth and Lendings closure statement, Yeah, exactly. Yeah. And
Speaker 1: it's got the chart and it's broken down by say
Speaker 1: you're getting a thirty year mortgage. It's got you know,
Speaker 1: the year that you're currently living in all the way
Speaker 1: out thirty years, and it has the tally of the
Speaker 1: full amount that you're actually paying an interest. That way,
Speaker 1: you actually know how much it's costing you to finance
Speaker 1: that house and to go ahead and get a mortgage
Speaker 1: on it. It's like, we need that but on everything
Speaker 1: in our life. Dishwasher, truth and lending statement, well except
Speaker 1: that you're not getting alone on your dishwasher hopefully, And
Speaker 1: to be honest, we actually have like some of those
Speaker 1: things in some regards, right, We've got like the energy Yeah,
Speaker 1: that's what I was thinking, the energy smart stickers on
Speaker 1: like a TV or a washing machine, or let's say,
Speaker 1: on a credit card statement. There's a law that required
Speaker 1: credit card companies to put on their your statement you
Speaker 1: know how long it would take you to pay off
Speaker 1: your credit card bill if you're only to pay the
Speaker 1: minimum exactly. And that's just so helpful for a consumer
Speaker 1: to see, because it's freaky enough to see the balance
Speaker 1: and the interest rate. But when you know that if
Speaker 1: you only pay the minimums, you're gonna be paying for
Speaker 1: thirty seven more years, I mean insane. Yeah, that a
Speaker 1: lot of fire under you, right. But back to a
Speaker 1: car mat Yeah, Like the biggest costs actually that people
Speaker 1: don't factor in at all is depreciation, especially if you're
Speaker 1: buying new right. That tax bill can be hard to handle.
Speaker 1: It can be many thousands of dollars in lots of
Speaker 1: states in one lump sum. But on top of that, man,
Speaker 1: your depreciation costs are out of this world, and your
Speaker 1: car driving it off the lot is worth less than
Speaker 1: the day you bought it, and a few years in
Speaker 1: is worth less. So make sure you factor that in.
Speaker 1: Being someone the factors in secondary costs into the equation
Speaker 1: is being the opposite of a payment buyer. A payment
Speaker 1: buyer is what you don't want to be, right, You
Speaker 1: want to be the buyer. That is being a smart
Speaker 1: purchase and that includes factoring in all those secondary costs. Yeah, man,
Speaker 1: But then even on top of that, there are the
Speaker 1: lifestyle secondary costs. And I mean it kind of sounds
Speaker 1: silly to day, but just like car accessories, anything from
Speaker 1: tensing your windows to like getting a trailer hitch for
Speaker 1: those spinny rims like you got on your van. They
Speaker 1: look amazing though, so my friends Steve totally had like
Speaker 1: the fake cub cap spinners he watched he'd watched too
Speaker 1: much by ride on MTV. Oh gosh, what was his name?
Speaker 1: Exhibit exhibit that's right, Exhibit No. He really did watch
Speaker 1: that show, and he went to Auto Zone and bought
Speaker 1: the plastic rims slapped him on his red ninety seven caravan,
Speaker 1: and it was pretty awesome. That's a good look, I
Speaker 1: will say that the an even better look, though, was
Speaker 1: the fact that he had to tie his spinners down
Speaker 1: because when he got above like sixty miles per hour,
Speaker 1: they would like vibrate and make a loud racket, and
Speaker 1: he was afraid they're gonna fall off, So he take
Speaker 1: some string and he would he I mean, no joke,
Speaker 1: He tied his spinners to themselves so that they wouldn't spin.
Speaker 1: It sounds like there were some secondary cost to steve
Speaker 1: the reputation while doing this as well. And so those
Speaker 1: are silly sort of lifestyle choices. But even up to
Speaker 1: feeling like you have to now have a garage because
Speaker 1: you've got a new vehicle, dude, I'm gonna admit that
Speaker 1: this is something that I personally felt somewhat of a
Speaker 1: temptation to to do, not to necessarily get a garage,
Speaker 1: but to want to keep my new vehicle clean. So
Speaker 1: katon I bought a somewhat late model Honda recently, and
Speaker 1: we just wanted that thing to look good. You know,
Speaker 1: we dropped all this money on it, and I felt that,
Speaker 1: you know what, we're gonna have the nice, newer vehicle.
Speaker 1: I want to make sure it looks good. And because
Speaker 1: of that, I was taking it to the car wash,
Speaker 1: like the five dollar car wash where you just zip
Speaker 1: through it real quick and it's so fast and easy
Speaker 1: and I don't have to do anything. But I was
Speaker 1: spending more money because I thought, Okay, I've got a
Speaker 1: new vehicle, I've got to keep it clean. I didn't
Speaker 1: have to keep it clean. That was just for me.
Speaker 1: That was my ego. I didn't wanted to have a
Speaker 1: shiny ride. And so as silly as it is to
Speaker 1: say that that's just something I did, I was falling
Speaker 1: into that trap. And part of me did think, man,
Speaker 1: this is this is why people do have garages, because
Speaker 1: they don't want the tree sap falling on their on
Speaker 1: their nice vehicle that they just spent money on. And
Speaker 1: the fact is, though it doesn't matter, because like you said,
Speaker 1: it drops in the first five years of owning a
Speaker 1: new vehicle, and so it's not in an investment. This
Speaker 1: is pure consumption, and these lifestyle secondary costs are are
Speaker 1: nothing but consumption. Man. I feel like the perfect example
Speaker 1: of kind of like what we were just talking about,
Speaker 1: how you have actually a lot of control over these
Speaker 1: costs is the example of expensive hobbies. So, for example,
Speaker 1: golf golf can become either a ridiculously expensive hobby or
Speaker 1: it can be a relatively cheap one. You can travel
Speaker 1: all over the world to play the finest golf courses,
Speaker 1: pay enormous greens fees, pay for a caddy, pay for
Speaker 1: lodging while you're there, all those things, fancy clubs, nucleats, pants,
Speaker 1: all the works, right, or you can be the guy
Speaker 1: that goes to the Part three course three miles down
Speaker 1: the road, plays once a week. The greens fees are
Speaker 1: eleven dollars. There's such a range of options in there.
Speaker 1: When you're talking about a hobby we've talked about before
Speaker 1: in the show that I love to play disc golf.
Speaker 1: You love to play disc golf. We play together, you know, rarely,
Speaker 1: because we don't have them at a time, but when
Speaker 1: we do, it's amazing and there's almost no cost. Right,
Speaker 1: courses are free. You need one, maybe two discs to
Speaker 1: get started, and those are pretty cheap. Yeah, I've got three,
Speaker 1: but I only used to. I've got like eight and
Speaker 1: I only used to so but so many of these
Speaker 1: hobbies that you could potentially devote a lot of time
Speaker 1: and energy to, well, the actual cost that you will
Speaker 1: incur depends on you and not the hobby itself. That
Speaker 1: makes me think of like college football specifically, and you
Speaker 1: can be a college football fan and it can cost
Speaker 1: you pretty much nothing. Right. You can just read the
Speaker 1: articles online, keep up with what's going on, and then
Speaker 1: you could pick up a six pack and then take
Speaker 1: it over to your friend's house who has cable. He
Speaker 1: or she is stoked that you brought over some beer
Speaker 1: this time. They'll be the cheap guy, and and then boom,
Speaker 1: you're enjoying the game. You're hanging out with your friends.
Speaker 1: It's cost you virtually nothing, right, Like, that's one end
Speaker 1: of the spectrum. Or you can be on the other
Speaker 1: end of the spectrum, right where you are forced to
Speaker 1: make these mandatory contributions to your school because they happen
Speaker 1: to have an awesome football program, and that gives you
Speaker 1: the option to then buy football tickets, right like the
Speaker 1: season tickets, which costs thousands of dollars. Sounds like a
Speaker 1: rackett to me. Dude, it is a rackett. And then
Speaker 1: on top of that, parking and then the parking passes
Speaker 1: cost thousands of dollars, and and then on top of
Speaker 1: that we were just talking about cars, like a lot
Speaker 1: of people buy vehicles specifically for tailgating. Like how many
Speaker 1: car commercials do you hear where they talk about tailgating?
Speaker 1: Or that's the scene, right, there's some guys and they've
Speaker 1: got to pick up truck or the STUV and they're
Speaker 1: in the parking lot at a major stadium. Yeah, major
Speaker 1: stadium or or or a college football stadium. Either way.
Speaker 1: There are just so many expenses that can go towards
Speaker 1: an interest or a hobby like that, but it doesn't
Speaker 1: have to It comes down to you. There's a reason
Speaker 1: why personal finance is personal. It depends on what you
Speaker 1: see as being a priority in your life. And we
Speaker 1: are here just to say be aware of these expenses.
Speaker 1: Be aware of yourself because you know what, if you're
Speaker 1: not gonna be able to resist not getting the parking
Speaker 1: pass because you want to be able to hang out
Speaker 1: with your friends and throw that awesome tailgate, just know
Speaker 1: that it's going to cost you another three grand for
Speaker 1: that parking pass. In addition to the tickets. Right, yeah, man,
Speaker 1: it kind of makes me think. I think recently on
Speaker 1: an episode, I mentioned how if I kind of came
Speaker 1: into some money, I might consider buying another bike. And yeah,
Speaker 1: right now where I'm at, I totally would not buy
Speaker 1: another bike. But I'm viewing my bike in a super
Speaker 1: utilitarian way right now, and I actually calculate how much
Speaker 1: my bike is saving me over using the car. So
Speaker 1: I'm thinking about it actually as not just a purchase
Speaker 1: that is for fun, but as something that can save
Speaker 1: me money over the long haul. But if I was
Speaker 1: thinking about it in a different mindset, in this kind
Speaker 1: of like the I want this mindset, Yeah, the I'm
Speaker 1: a huge football fan. How much money can I spend
Speaker 1: on this mindset? Right? Then I would have four or
Speaker 1: five different bikes and I would be getting them maintained
Speaker 1: regularly by a local bike shop where it costs money,
Speaker 1: right and instead of like do it yourself little tweaks
Speaker 1: and fixes there. It's just a different mindset that goes
Speaker 1: into play when you're making a purchase like that. And
Speaker 1: so whether you're a college football fan or a fan
Speaker 1: of golf or disc golf, whatever it is that you're into,
Speaker 1: there are ways to pursue that passion, and you know,
Speaker 1: keeping those secondary costs in mind at the forefront of
Speaker 1: the decisions you make and how you pursue that passion. Yeah,
Speaker 1: that's right. You don't have to get the whole kitten
Speaker 1: caboodle to enjoy something that you have a passion for. Honestly,
Speaker 1: this makes me think of photography because for a lot
Speaker 1: of people, a lot of folks enjoy photography and they
Speaker 1: get a camera, and so a hard cost for photography
Speaker 1: might be the camera, because you've gotta have a camera
Speaker 1: if you are into taking pictures, right, But then there's
Speaker 1: all these lifestyle secondary costs associated with it that people
Speaker 1: kind of get roped into, especially with photography because a
Speaker 1: lot of times, if you're into photography, you're into the gear,
Speaker 1: and so you get the bag to protect the camera
Speaker 1: and you get the lens flashes. I know all this
Speaker 1: from experience. But if you're doing it as a hobby, right,
Speaker 1: if you're doing it just as something that you're interested in,
Speaker 1: you can enjoy photography on the cheap by just sticking
Speaker 1: with some of the basic stuff, or you can go
Speaker 1: freaking crazy and get all the stuff and before you
Speaker 1: know it, You've got like ten in glass alone, and
Speaker 1: that's photography speak for lenses, right, because but it's called
Speaker 1: glass because that's what you're paying for it. Like, it's
Speaker 1: just expensive, expensive glass, and a lot of times it's
Speaker 1: so silly. And even photographers that do professionally, man, they
Speaker 1: get caught up in this sort of gear mentality and
Speaker 1: and just collecting and they just want to have everything
Speaker 1: match and for everything to all be the same. And
Speaker 1: it's not about function, it's not about the utility that
Speaker 1: it provides. It's it's more about emotions and what they
Speaker 1: feel they need. And so being aware of that again
Speaker 1: is something that is important because it does not cost
Speaker 1: a lot of money to be in a photography It
Speaker 1: costs a lot of money to collect photography gear. Yeah,
Speaker 1: that's a big difference. So after the break, there's just
Speaker 1: a few steps, a few simple steps that people can
Speaker 1: take in order to make a wise choice when they're
Speaker 1: making a purchase so that secondary costs don't sink that
Speaker 1: purchase and make it a dumb one. We'll talk about
Speaker 1: that in just a second. Let's get to the helpful
Speaker 1: and specific tips. Is it gonna be the things to
Speaker 1: remember when you're making these different purchases or some of
Speaker 1: these financial decisions, Joel, why you kick it off? Yea, So, Matt,
Speaker 1: I think the first thing to do is to have
Speaker 1: a little brainstorm session, right. You want to try to
Speaker 1: come up with as extensive of a list as you
Speaker 1: can of what cost you might incur based on that
Speaker 1: new purchase or decision, So home car, right, Like, some
Speaker 1: of those things are straightforward. Some of those things aren't straightforward.
Speaker 1: The hard secondary costs are pretty straightforward when it comes
Speaker 1: to taxes on a tun Or house first, a Hudd
Speaker 1: fifty dollar house. Before the purchase. You have control over
Speaker 1: both the hard and the soft secondary costs once you
Speaker 1: make the purchase, right, those hard costs are baked in.
Speaker 1: You can't really change them. So brainstorming and knowing what
Speaker 1: they are ahead of time will help you make an
Speaker 1: informed decision so that you don't take on more than
Speaker 1: you can handle. That's right, man. That's like the research
Speaker 1: and information gathering step, right exactly, that's right man. And
Speaker 1: so after you've gathered that information, the next step that
Speaker 1: you want to take is to evaluate yourself. You need
Speaker 1: to ask yourself, will I be able to say no
Speaker 1: to these secondary lifestyle costs that are associated with the
Speaker 1: initial purchase, with the primary purchase. And what's helpful I
Speaker 1: think too, man, is we've recently talked about talking with
Speaker 1: your friends about money, and we talked about the impact
Speaker 1: that your friends have on you when it comes to
Speaker 1: expenses and spending, because it's natural that you want to
Speaker 1: hang out with your friends, right, You want to be
Speaker 1: in community, you want to feel like you're known, and
Speaker 1: so you're naturally going to spend the same amount that
Speaker 1: they spend. And so if you know all of your
Speaker 1: friends when they become uh SEC football fans, you know
Speaker 1: what that means to them, right, You know whether they
Speaker 1: go over boarder, whether they're super chill about Yeah, exactly.
Speaker 1: And so are you willing to say no, sorry, I'm
Speaker 1: gonna just show up for a couple of games. I
Speaker 1: keep saying football, right, I keep saying college football being football,
Speaker 1: That's what I mean, Right, I mean, you're being in
Speaker 1: football because we're Atlanta United fans and so and even
Speaker 1: with us, Man, it's a temptation. That's the question I
Speaker 1: asked myself, and so for Kate and I that was
Speaker 1: a tough discussion and we talked about this on the
Speaker 1: Couples and Money episode where we had our wives on.
Speaker 1: But again just no, no, yourself, know your friends, and
Speaker 1: just to be aware of the temptations and just be prepared. Yes,
Speaker 1: so you really do have to kind of know yourself
Speaker 1: and your tendencies and whether if you make the primary
Speaker 1: purchase you will be able to restrain yourself on those
Speaker 1: secondary costs, and then you need to do a cost
Speaker 1: benefit analysis. I think it's really important, right, Well, this
Speaker 1: purchase with all the primary costs and then all these
Speaker 1: secondary associated costs return what I'm looking for, what I want.
Speaker 1: Something as simple as additional sales tax on a purchase
Speaker 1: of a television, or as large as an interest rate
Speaker 1: on a home or student loan can help you make
Speaker 1: the decision to buy it, to go to school, right,
Speaker 1: or to not do that. College is great, But if
Speaker 1: you have to pay interest on a student loan, like
Speaker 1: purely hypothetical, right, there's a much smaller chance that you're
Speaker 1: going to go to school. And in the same way.
Speaker 1: For instance, recently on a TV mat it was Black
Speaker 1: Friday and there was this great deal. I've had the
Speaker 1: same TV for twelve years. I thought, you know what,
Speaker 1: maybe it's time for me to get a new TV.
Speaker 1: I saw the price. It was great. I factored in
Speaker 1: sales tax and just maybe it means I'm cheap. I
Speaker 1: don't know. We talked about frugal versus cheap, but in
Speaker 1: my mind it just didn't move the needle enough for
Speaker 1: me after sales tax to make the purchase. So I
Speaker 1: declined and I said, I'm gonna stick with my TV
Speaker 1: for another year. And so a cost benefit analysis can
Speaker 1: just really help hammer home whether a purchase or a
Speaker 1: decision is worth it or not, and whether the benefit
Speaker 1: you're going to receive is equivalent to the outgoing costs
Speaker 1: associated with that move. And then finally, once you have
Speaker 1: all that information, once you've gathered that information, and then
Speaker 1: once you sort of analyze what kind of benefit is
Speaker 1: this going to bring to me? Is it going to
Speaker 1: be worth the cost? Once you have all the information together,
Speaker 1: you need to act on that information. You do not
Speaker 1: need to sweep that sort of under the rug just
Speaker 1: because you want to emotionally make purchase that you know
Speaker 1: you shouldn't. Yeah, And that's the great thing about this matter,
Speaker 1: I think, is having numbers, having this process right so
Speaker 1: that you can't just emotionally sweep that something under the
Speaker 1: rug in order to make the decision that you want
Speaker 1: to in your heart. These steps kind of help quantify
Speaker 1: it so that you're not doing that. Let's right. Knowledge
Speaker 1: is power, right, and having that information will help you
Speaker 1: to make a better decision. You don't need to be
Speaker 1: sticking your head in the sand and just ignoring all
Speaker 1: that's around you just because you want to do what
Speaker 1: you want to do. Having that information helps you to
Speaker 1: make an informed decision. All right, Joel, let's go ahead
Speaker 1: and get back to the beer. This is pretty Willie's
Speaker 1: Imperial Stouts, and this is by against the Grain. Yeah,
Speaker 1: so this is part of their Staved For later series,
Speaker 1: you would explain what staves are. So staves are the
Speaker 1: wooden pieces in a barrel that's made so like the
Speaker 1: individual wooden slats that come together to form an entire barrel.
Speaker 1: And so this is a barrel aged Imperial Stout that
Speaker 1: the brewery wants people to age for a certain period
Speaker 1: of time. And so I got this beer over a
Speaker 1: year ago from my awsome I'm real estate agent, and
Speaker 1: our mutual friend Matt Helen, both of our real estate agent. Yeah.
Speaker 1: Actually I was gonna say so in my story earlier
Speaker 1: where we met. It's coming full circle. Man, this wasn't
Speaker 1: at her house, Yes, yeah, that's Helen and Lee invited
Speaker 1: both you and Emily and me and Kate over to
Speaker 1: their house and we played. We played nerdy board games,
Speaker 1: and little did you know that was gonna be the
Speaker 1: beginning of how to money of a beautiful friendship, a
Speaker 1: fun podcast, and an amazing real estate agent Helen. And
Speaker 1: so she's supersweet. She knows you know, our love for
Speaker 1: craft beer, my love for craft beer. And she gave
Speaker 1: me this fantastic bottle of beer as a closing present,
Speaker 1: and I have let it age for over a year
Speaker 1: because that's the intent behind this beer. And so we're
Speaker 1: drinking it now, excited to finally have pretty Willie's Imperial Stout.
Speaker 1: And Matt, both of us right at the beginning of
Speaker 1: the show, we each gave kind of one word to
Speaker 1: describe the beer, and this is a big beer. It's
Speaker 1: a huge stout. Yeah, I'm feeling it for sure, and
Speaker 1: I'm not even done with mine. So the word I
Speaker 1: used to describe it was roasty. Yeah, you said roasty,
Speaker 1: And honestly, now that I've had a little more, I
Speaker 1: don't think it's like the best word. I don't think
Speaker 1: it's the best word to begin with. I felt like
Speaker 1: an idiot sending it, but I said it. That's a
Speaker 1: good word, So it's But I bet you're wishing you
Speaker 1: would have said jacket. Definitely not wishing that, definitely not
Speaker 1: feeling that even at this point in time. But please
Speaker 1: tell us why you said jacket. Well, I mean I
Speaker 1: said jacket because as soon as I drank it, I
Speaker 1: felt like the texture of the beer before I tasted it,
Speaker 1: and it just felt like it was wrapping my tongue
Speaker 1: and like this nice winter coat full of like boozy warmth,
Speaker 1: you know what I'm saying. Like, when you have a
Speaker 1: bigger beer like this, you can kind of feel the
Speaker 1: booze on your tongue before you actually even taste it
Speaker 1: with your I don't know your taste beds. And so
Speaker 1: for me, it was more of a texture thing because
Speaker 1: it's an Imperial stout, so it's a little bit thicker
Speaker 1: and it's got all the roasted and multi chocolate flavors
Speaker 1: in it, Which is funny because I think right after
Speaker 1: I said roasty, like an idiot, and the next word
Speaker 1: that came to my mind was warming, Yeah, because it
Speaker 1: truly does. It's bourbon barrel aged. It has a nice
Speaker 1: bourbon flavor going on, and it almost warms you, like
Speaker 1: on a cold day when you have a sip of
Speaker 1: Scotch or bourbon. It almost kind of warms your insides
Speaker 1: just a little bit, sort of like you're wearing a jacket,
Speaker 1: sort of like a jacket touche. You win this one, sir,
Speaker 1: you win this battle, but you will not win the war.
Speaker 1: I guess jacket makes a little more sense now, um, awkwardly. So, Yeah,
Speaker 1: this was a delicious beer. And we always mentioned untapped
Speaker 1: on there though. You can kind of rank and rate
Speaker 1: the beers that you get to enjoy, and for us,
Speaker 1: it's a great way to keep up with the different
Speaker 1: beers that we've had. Yeah, and so out of five stars, role,
Speaker 1: what would you give this beer? The great thing about
Speaker 1: on Tap two is that I feel like I can
Speaker 1: research beers to see what other people rank them before
Speaker 1: I make a purchase. And so you got pulled up.
Speaker 1: Don't tell me, don't tell well, let me rank mine.
Speaker 1: Let me rank it first. Okay, for me, this is
Speaker 1: a great imperial style. I think I might dude, I
Speaker 1: would even give this a solid four and a half stars. Yeah.
Speaker 1: For me, it's a foreign a quarter, solid Foreign a quarter.
Speaker 1: It's a really good beer. It's solid, dude, I really
Speaker 1: like it. But there's nothing that stands out to make
Speaker 1: it epic, but truly refined. Very nice, Glad, I laid
Speaker 1: it down, Glad. We got to drink this together. Nice
Speaker 1: Foreign a quarter and the average untapped rating four point
Speaker 1: to eight. Oh perfect, We're right on the money. All right,
Speaker 1: Enough about the beer, Joel, It's time now for some
Speaker 1: final thoughts. Kick it off, all right, Matt. So, just
Speaker 1: a reminder to everyone there are secondary costs involved with
Speaker 1: almost any purchase or decision that you make in life,
Speaker 1: and it is important to consider both the hard secondary
Speaker 1: costs that are immovable that are there no matter what
Speaker 1: once you make that purchase or decision, and also the
Speaker 1: soft oral lifestyle secondary costs that follow a purchase or
Speaker 1: decision that you make. These costs to fall outside of
Speaker 1: the original purchase amount, right, and they can turn what
Speaker 1: seems like a good purchase on the front end into
Speaker 1: one that does not work well for you or your budget.
Speaker 1: That's right, man. And the process of the things that
Speaker 1: you want to remember when you're making these purchases or
Speaker 1: financial decisions. First of all, brainstorm, you want to come
Speaker 1: up with a lists of all the different costs, all
Speaker 1: the different secondary costs associated with that purchase. Next, you
Speaker 1: need to know yourself, how are you going to respond
Speaker 1: to the soft or lifestyle secondary costs associated with that?
Speaker 1: Will you be able to say no when you feel
Speaker 1: those cultural pressures to get the next piece that matches
Speaker 1: whatever it is that you just got. Next, you want
Speaker 1: to do an analysis. You know, will the purchased item
Speaker 1: bring the joy, bring the benefit and the utility that
Speaker 1: you're expecting it to bring in your life? And then lastly,
Speaker 1: you need to take all that information and you need
Speaker 1: to take action on what you've learned and what you've gathered.
Speaker 1: You don't want to sweep it under the rug. You
Speaker 1: don't want to stick your head in the sand. You
Speaker 1: want to take the next steps to either make that
Speaker 1: purchase or to not make that purchase based on what
Speaker 1: you've decided. So everyone, we appreciate you listening to this
Speaker 1: episode of the podcast. Be sure to check out our website,
Speaker 1: how to money dot com up there. As always, we
Speaker 1: will have some show notes with some additional links and
Speaker 1: some more information that we discussed in this episode. Yeah,
Speaker 1: if you like what you here let us know. In particular,
Speaker 1: please leave a review on Apple Podcasts or wherever you're
Speaker 1: listening to the show. We really appreciate it, and don't
Speaker 1: forget to hit the subscribe button while you're there. All right, buddy,
Speaker 1: Until next time, Best Friends Out, Best Friends Out, Man