WEBVTT - Everything Costs More Than You Think #048 0:00:00.080 --> 0:00:03.200 Welcome to How to Money. I'm Joel and I'm Matt, 0:00:03.480 --> 0:00:26.280 and today we're discussing why everything costs more than you think. Joel, 0:00:26.520 --> 0:00:29.400 you and I are best friends, and a lot of 0:00:29.440 --> 0:00:31.800 our new listeners may have heard that, but they don't 0:00:31.840 --> 0:00:34.680 know how we got to be friends. How deep this 0:00:34.760 --> 0:00:38.480 friendship runs? Do you do you remember when we first met? Honestly, dude, 0:00:39.320 --> 0:00:41.479 I don't. It was it made that much of an 0:00:41.520 --> 0:00:45.320 impression on you. If you remember our origin story, please 0:00:45.360 --> 0:00:47.720 so honestly share. Yeah, honestly, I don't remember when we 0:00:47.760 --> 0:00:50.480 actually met. The first memory, though, that I do have 0:00:50.720 --> 0:00:54.120 is some friends of ours, mutual friends, had invited Kate 0:00:54.160 --> 0:00:56.560 and I over to play some board games, and you 0:00:56.640 --> 0:00:58.960 and Emily were also there, and I think we may 0:00:58.960 --> 0:01:02.720 have been playing some original uh Settlers of Caitan. Oh yeah, 0:01:02.800 --> 0:01:04.360 that's like that. That's not about right, It's like the 0:01:04.360 --> 0:01:06.440 gateway drug for nerdy board games. Yeah, so I think 0:01:06.440 --> 0:01:08.360 this is about eight years ago, and yeah, that's when 0:01:08.360 --> 0:01:10.039 we that's when we first started hanging out. I don't 0:01:10.080 --> 0:01:12.920 have anything specific about that night. I'm sure I whipped 0:01:12.920 --> 0:01:16.720 your tail some Settlers, but unlikely. That is funny that 0:01:16.760 --> 0:01:19.160 it started out with us playing board games because we're 0:01:19.160 --> 0:01:21.119 both super into nerdy board games. We did a whole 0:01:21.120 --> 0:01:23.040 episode on it back in the day, and we made 0:01:23.040 --> 0:01:26.520 recommendations kind of for some of our favorites. But yeah, dude, 0:01:26.520 --> 0:01:29.679 I think it's not a knock on you because obviously 0:01:29.720 --> 0:01:32.479 we're best friends. But I barely remember, like the birth 0:01:32.520 --> 0:01:34.880 of my first daughter. Now, I just feel like so 0:01:34.920 --> 0:01:37.760 many five years have passed and that part of my 0:01:37.840 --> 0:01:40.040 memory is just almost gone. I feel like the most 0:01:40.040 --> 0:01:43.360 cemented memories I have of our friendship going back were 0:01:43.440 --> 0:01:46.280 two times that we traveled together as couples. And the 0:01:46.319 --> 0:01:49.480 first one was we left on Halloween like six years 0:01:49.480 --> 0:01:51.400 ago and we went to Ireland together as a family, 0:01:51.440 --> 0:01:52.920 and I think we mentioned that on the podcast at 0:01:52.920 --> 0:01:55.640 one at one point. And then a trip that we 0:01:55.680 --> 0:01:58.320 had to the Keys, which we kind of piggybacked on 0:01:58.400 --> 0:02:00.480 you having a photo shoot a thing that you had 0:02:00.480 --> 0:02:02.440 to shoot down there, and we kind of stayed together. 0:02:02.920 --> 0:02:04.720 And that trip to the Keys, when we had our 0:02:04.800 --> 0:02:07.960 our oldest daughters were only just a few months old. 0:02:08.280 --> 0:02:10.639 I just distinctly remember that trip to Those are kind 0:02:10.639 --> 0:02:12.960 of the memories that really are cemented from our early 0:02:12.960 --> 0:02:15.760 friendship days. So basically you'll remember things where there's pictures 0:02:15.760 --> 0:02:17.840 associated with it that you can go back and see 0:02:19.520 --> 0:02:22.800 pretty much. Yeah, so it's interesting you mentioned that that 0:02:22.960 --> 0:02:26.800 sort of Keys Florida Keys work photography trip because I remember, 0:02:26.840 --> 0:02:30.359 actually before even Ireland, was one time when Kate and 0:02:30.400 --> 0:02:34.440 I did some photography work for a restaurant and one 0:02:34.520 --> 0:02:36.800 of the things that we negotiated with them was that 0:02:36.840 --> 0:02:40.440 we got a sweet Fats get certificate. H that's right, Yeah, 0:02:40.560 --> 0:02:42.320 that they paid us in food and this place is 0:02:42.360 --> 0:02:44.800 really good. This is a really great restaurant here in Atlanta. 0:02:45.160 --> 0:02:47.560 And that was super early on in our friendship, very 0:02:47.680 --> 0:02:50.440 very early on. Yeah, you invited us to this fancy dinner. 0:02:50.880 --> 0:02:52.520 I was like, oh, I don't know him like that, 0:02:52.600 --> 0:02:55.120 but well, the reason being because so, yeah, we got 0:02:55.160 --> 0:02:57.200 this huge gift certificate and Kate and I looked at 0:02:57.200 --> 0:02:59.240 each other and we thought, we can't this is a 0:02:59.240 --> 0:03:01.359 lot of money and to be more fun if we 0:03:01.400 --> 0:03:03.360 went with some friends. So we thought of you guys. 0:03:03.800 --> 0:03:06.520 And what I really remember though, is that we hadn't 0:03:06.520 --> 0:03:08.400 gone to a lot of nice restaurants at that point 0:03:08.440 --> 0:03:12.560 in our lives. We totally novices nice restaurants, and I'm 0:03:12.600 --> 0:03:16.000 pretty sure you had on a T shirt, but we 0:03:16.120 --> 0:03:18.160 walked in and probably a band T shirt or something. 0:03:18.160 --> 0:03:20.280 We were I think we were all a little under 0:03:20.440 --> 0:03:25.160 underdressed backwards hat, yes, but we yeah, enjoyed a really 0:03:25.240 --> 0:03:27.200 nice dinner. I do remember that. I remember getting some 0:03:27.240 --> 0:03:30.000 awesome steak and maybe that was really what cemented it 0:03:30.040 --> 0:03:32.640 for us, right, Yeah, bonding over meat? Yeah, why not? 0:03:32.840 --> 0:03:36.320 I started all you vegetarians out there, But yeah, so 0:03:36.480 --> 0:03:39.280 traveling together as friends and and a great meal sometimes 0:03:39.320 --> 0:03:41.000 and and then nerdy board games. Man, I feel like 0:03:41.000 --> 0:03:43.160 that kind of encompasses some of the things that we 0:03:43.360 --> 0:03:45.960 enjoy the most and uh and still enjoy kind of 0:03:45.960 --> 0:03:48.119 doing together when whenever we can, let's do it some more. 0:03:49.000 --> 0:03:51.360 So that's uh for all you new listeners, that's kind 0:03:51.360 --> 0:03:52.840 of how Matt and I became best friends. And then, 0:03:53.480 --> 0:03:55.840 like you'll find out as you continue listening to this show, 0:03:56.520 --> 0:03:58.440 we talked about the things on this show that we 0:03:58.560 --> 0:04:01.960 care about that we already enjoy way discussing and and 0:04:02.040 --> 0:04:04.760 we started this podcast because we love craft beer and 0:04:04.760 --> 0:04:08.000 we love talking about money things that matter to us. 0:04:08.200 --> 0:04:10.520 And so yeah, this podcast is really just kind of 0:04:10.560 --> 0:04:12.320 an excuse for Matt and I to do what we 0:04:12.320 --> 0:04:14.920 would be doing anyway, and we're having a blast doing it, 0:04:15.200 --> 0:04:17.880 like drinking beer and talking about it too, right, Yeah, 0:04:17.880 --> 0:04:20.760 and today we are drinking a beer called Pretty Willie's 0:04:20.800 --> 0:04:24.200 Imperial Stout by Against the Grain Brewery. This is a 0:04:24.200 --> 0:04:26.839 beer that my real estate agent gave to me over 0:04:27.040 --> 0:04:29.920 a year ago when I closed on a house. And this, 0:04:30.000 --> 0:04:32.320 in particular is a beer that you're supposed to let 0:04:32.839 --> 0:04:35.600 rest and evolve, and so we're gonna kind of see 0:04:35.640 --> 0:04:38.480 how it's drinking. We'll do. Thanks so much for sharing 0:04:38.480 --> 0:04:41.599 this one with me. Cheers, Bunny, cheers. All Right, Matt, 0:04:41.760 --> 0:04:44.960 give me one word that describes how you feel about 0:04:44.960 --> 0:04:48.080 this beer after just one zip, only one word. I 0:04:48.080 --> 0:04:49.480 feel like this is gonna be harder for you than 0:04:49.520 --> 0:04:53.160 me because I'm ver both. Yeah, Joel tends to be 0:04:53.200 --> 0:04:55.040 the one that talks a little bit more on the show, 0:04:55.240 --> 0:04:58.120 which is totally fine. If I had my own podcast 0:04:58.120 --> 0:05:01.960 by myself, it might only be five minut it. But 0:05:02.080 --> 0:05:04.040 if it was just you talking, who knows how long 0:05:04.040 --> 0:05:06.919 you'd go. That's true, Okay, but back to you, so 0:05:07.040 --> 0:05:08.960 one word. Okay, this is gonna be weird, but I'm 0:05:08.960 --> 0:05:12.880 gonna say jacket, all right, that's weird. But I think 0:05:12.920 --> 0:05:15.200 we've already mentioned, Jacket. I think we mentioned on the 0:05:15.200 --> 0:05:18.200 show before that you have some odd taste buds and 0:05:18.360 --> 0:05:22.360 some odd sensory abilities. You're like the beer somalier or 0:05:22.440 --> 0:05:24.680 this podcast. You bring that to the table. I have 0:05:25.000 --> 0:05:28.280 a much less developed palette. So my word, my one 0:05:28.279 --> 0:05:29.800 word for this beer for right now is going to 0:05:29.839 --> 0:05:34.520 be roasty. Nice. See roasty. That's I think everyone's gonna 0:05:34.560 --> 0:05:37.320 understand that, Jacket. I think what happens is I overthink 0:05:37.360 --> 0:05:40.320 stuff and now I'm just gonna have to actually explain myself. 0:05:40.640 --> 0:05:41.960 But we'll say that for the end of the show. 0:05:42.640 --> 0:05:45.400 Oh and by the way, Matt, since we're drinking a 0:05:45.440 --> 0:05:48.279 big barrel aged Imperial stout and this is one that 0:05:48.279 --> 0:05:50.680 it's meant to be kind of aged for a while 0:05:50.720 --> 0:05:53.120 in the cellar and then you're supposed to drink it. Uh. 0:05:53.160 --> 0:05:55.440 There was an article I read about barrel aged doubts 0:05:55.440 --> 0:05:57.800 and kind of the cult behind barrel aged outs. Right now, 0:05:57.960 --> 0:06:00.160 I find it fascinating that they've kind of become, um, 0:06:00.279 --> 0:06:02.800 this thing that people hunt for and spend lots of 0:06:02.839 --> 0:06:05.240 money on stouts like these. One of the things I 0:06:05.279 --> 0:06:07.800 thought that was cool about that article. They were talking 0:06:07.839 --> 0:06:10.240 about the costs associated with some of these beers where 0:06:10.240 --> 0:06:14.039 they are aged and they take special bourbon barrels, uh, 0:06:14.160 --> 0:06:17.039 and they actually take more material, like more ingredients to 0:06:17.040 --> 0:06:20.239 actually make the beer, and more warehouse space oftentimes because 0:06:20.240 --> 0:06:23.400 you're talking barrels. They mentioned in particular the Bourbon County 0:06:23.400 --> 0:06:27.280 series by Goose Island. They have multiple people working year 0:06:27.360 --> 0:06:30.680 round just to develop they can just maintaining that batch 0:06:31.120 --> 0:06:36.040 just to develop those Bourbon County beers, and it's really 0:06:36.080 --> 0:06:38.799 expensive to create, which leads to part of the reason 0:06:39.120 --> 0:06:41.400 these beers can cost so much. Yeah, and not just 0:06:41.520 --> 0:06:44.800 double the cost, but sometimes like quadruple the cost of 0:06:45.000 --> 0:06:46.840 a typical beer like this that you can pick up 0:06:46.839 --> 0:06:49.839 at your local grocery store. You get the special bourbon 0:06:49.839 --> 0:06:51.760 barrel aged version of it or any kind of barrel 0:06:51.800 --> 0:06:53.800 age typically and it's going to be a lot more 0:06:53.839 --> 0:06:55.960 because yeah, like you said, it's gonna take a lot 0:06:55.960 --> 0:06:58.320 more time, so a lot more manpower, but then also 0:06:58.400 --> 0:07:01.080 to the ingredients that go into it and be twice 0:07:01.080 --> 0:07:03.760 as much from a quantity standpoint. Yeah. So if you're 0:07:03.800 --> 0:07:05.880 at your local grocery store or bottle shop and you 0:07:05.920 --> 0:07:08.039 see a barrel aged down on the shelf and you 0:07:08.040 --> 0:07:10.440 look at the price tag and you think it's ridiculous. Well, 0:07:10.520 --> 0:07:12.480 there's a lot that goes into that, and not all 0:07:12.520 --> 0:07:14.480 of them are created equal. Some of them are better 0:07:14.480 --> 0:07:17.400 than others. And we would recommend kind of researching these 0:07:17.440 --> 0:07:19.440 beers before you spend twenty bucks on a bottle or 0:07:19.440 --> 0:07:22.240 fifteen bucks even on a bottle. And Untapped is a 0:07:22.240 --> 0:07:24.400 great resource to kind of look up what beer lovers 0:07:24.440 --> 0:07:26.520 think about the beer. But there is a reason behind 0:07:26.560 --> 0:07:28.400 the price tag, and so we want to go to 0:07:28.440 --> 0:07:30.280 kind of share that. And and Matt and I've talked 0:07:30.320 --> 0:07:32.680 about why we drink craft beer on the show every week. 0:07:32.720 --> 0:07:34.480 It's important to us. It's something that we care about. 0:07:34.920 --> 0:07:38.400 And we also want to encourage people to live a 0:07:38.440 --> 0:07:41.320 life that reflects their values, and this is something that 0:07:41.360 --> 0:07:43.440 we value. This is something that we place a high 0:07:43.480 --> 0:07:45.560 priority on good beer, and we're willing to spend the 0:07:45.600 --> 0:07:48.200 money for really good beer um and cut back in 0:07:48.280 --> 0:07:50.760 other areas right in order to make that happen. Yeah, man, 0:07:50.800 --> 0:07:53.360 that's right. Oh, before we move on, one other thing 0:07:53.360 --> 0:07:55.640 I just thought of. We recently did an episode on 0:07:55.680 --> 0:07:58.360 hedonic adaptation, right where you kind of get used to something, 0:07:58.400 --> 0:08:02.520 whether it be because it's really good and you kind 0:08:02.560 --> 0:08:04.640 of get used to that really good feeling and it 0:08:04.720 --> 0:08:06.800 kind of becomes your new normal, or how you can 0:08:06.840 --> 0:08:08.800 also get used to something that's kind of bad or 0:08:08.920 --> 0:08:10.720 negative and you kind of get used to that that 0:08:10.760 --> 0:08:12.480 becomes your new normal. Kate and I we've been out 0:08:12.520 --> 0:08:15.160 of our kitchen right because we've been renovating our house. 0:08:15.480 --> 0:08:17.880 We've been out of our kitchen for almost two months now, 0:08:18.200 --> 0:08:20.680 and honestly, I don't feel like much has changed for us, 0:08:20.720 --> 0:08:22.360 Like we've kind of gotten used to the fact that 0:08:22.440 --> 0:08:24.720 all of our stuff is crammed into our dining room. 0:08:24.840 --> 0:08:25.920 But I don't know, it just it just kind of 0:08:25.920 --> 0:08:28.960 struck me as interesting because I haven't been focusing on 0:08:29.000 --> 0:08:31.040 how terrible it's been. You just kind of roll with 0:08:31.040 --> 0:08:32.640 it and move on with life and it becomes your 0:08:32.679 --> 0:08:34.520 new normal. I'm surely the first two to three days 0:08:34.520 --> 0:08:36.880 we're kind of shocking a little more painful, But what 0:08:36.920 --> 0:08:39.000 I'm looking forward to is looking ahead and knowing that 0:08:39.040 --> 0:08:41.120 eventually we'll be able to move back into our normal, 0:08:41.240 --> 0:08:44.640 full space in our house, and certainly that's gonna be great. 0:08:44.840 --> 0:08:46.720 But I'm kind of worried too because on the other 0:08:46.800 --> 0:08:48.720 end of that, I think, well, it's gonna be really nice, 0:08:48.760 --> 0:08:50.760 But how quickly is it going to be before I 0:08:50.760 --> 0:08:52.840 get used to it? You know? Like it it took 0:08:52.840 --> 0:08:54.839 me zero time almost to get used to this sort 0:08:54.880 --> 0:08:58.000 of negative aspect of our lives, like being crammed into 0:08:58.040 --> 0:09:00.319 this less than ideal dining room. And then it's not 0:09:00.320 --> 0:09:01.840 gonna take you too much time to become used to 0:09:01.840 --> 0:09:04.560 be in a fancy pants exactly. Yeah, And man, I 0:09:04.600 --> 0:09:07.040 just don't want to become super fancy pants. That's not 0:09:07.080 --> 0:09:09.040 who I want to be. So we will get to 0:09:09.559 --> 0:09:13.360 why Matt's on one word for this beer was jacket. Uh, 0:09:13.440 --> 0:09:15.920 leg get later on, but first let's get to the 0:09:15.920 --> 0:09:18.880 topic of hand. Everything costs more than you think, and 0:09:18.920 --> 0:09:20.520 what Matt and I wanted to talk about on the 0:09:20.520 --> 0:09:25.120 show today is considering secondary costs. Anytime you make a purchase, 0:09:25.480 --> 0:09:29.840 the price tag that you're paying up front on whatever 0:09:29.880 --> 0:09:32.720 it is is not the only cost involved in making 0:09:32.720 --> 0:09:36.120 a purchase, and we wanted to talk about the other 0:09:36.120 --> 0:09:39.719 costs involved. Uh we're calling secondary costs, and those are 0:09:39.760 --> 0:09:42.640 additional costs that you will or might end up paying 0:09:42.640 --> 0:09:45.720 on a purchase that fall outside of that original purchase amount, 0:09:46.040 --> 0:09:48.120 and we think it's really really important to consider those 0:09:48.160 --> 0:09:51.480 things because it can be easy when you're budgeting or 0:09:51.520 --> 0:09:54.560 when you're considering making a purchase or adding something into 0:09:54.559 --> 0:09:57.640 your life to only consider that upfront price tag and 0:09:57.679 --> 0:09:59.719 not think about all those other dominoes that fall when 0:09:59.720 --> 0:10:01.960 it comes to the pricture of paying. And so, Matt, 0:10:02.080 --> 0:10:04.640 this podcast is going to be dedicated to those other 0:10:04.679 --> 0:10:07.200 dominoes that fall how that impacts like your wallet in 0:10:07.200 --> 0:10:10.319 your life, that's right. Yeah, Folks tend to not consider 0:10:10.400 --> 0:10:12.800 the sort of nickel and diming effect that happens after 0:10:12.840 --> 0:10:15.000 you make a purchase. Whether it's a quality purchase or 0:10:15.040 --> 0:10:18.120 a cheap purchase, it doesn't really matter. What we're talking about, 0:10:18.120 --> 0:10:20.240 like those expenses that, like you said, you may or 0:10:20.280 --> 0:10:22.320 may not pay, and let's start with the ones that 0:10:22.400 --> 0:10:24.720 you will pay. Yeah, So we kind of divided this 0:10:24.840 --> 0:10:28.160 up into two different kinds of secondary costs. One is 0:10:28.559 --> 0:10:31.160 a hard secondary cost and the other is a soft 0:10:31.600 --> 0:10:33.880 or lifestyle secondary cost. And so we'll kind of just 0:10:33.960 --> 0:10:37.240 quickly run through the definition and describe what's different about each. 0:10:37.720 --> 0:10:40.000 That's right, man. So hard secondary costs are what we're 0:10:40.000 --> 0:10:43.360 considering to be costs that you have to pay because 0:10:43.480 --> 0:10:45.920 it's either the law, right, so sales tax, like you 0:10:46.000 --> 0:10:48.360 have to pay sales tax. Or these might be costs 0:10:48.360 --> 0:10:50.280 that you have to pay because you signed an agreement 0:10:50.320 --> 0:10:52.000 where you promise that you will And these can be 0:10:52.040 --> 0:10:53.960 monthly fees or an h O a say in a 0:10:54.000 --> 0:10:57.440 condo that you live in, or these are costs because 0:10:57.480 --> 0:11:00.080 the item that you've purchased just requires it, you know, 0:11:00.120 --> 0:11:03.360 this sort of basic maintenance. And I'm not talking about fancy, 0:11:03.440 --> 0:11:06.120 high end maintenance or anything that kind of goes above 0:11:06.160 --> 0:11:09.240 and beyond maintaining that item and allowing it to you know, 0:11:09.280 --> 0:11:12.400 work and function like you wanted to. In these cases though, 0:11:12.440 --> 0:11:14.240 you don't have a choice. And these are things that 0:11:14.280 --> 0:11:17.000 you will have to pay. Yeah. So those hard costs, right, 0:11:17.040 --> 0:11:19.880 they are there for a lot of purchases, and we'll 0:11:19.920 --> 0:11:21.920 kind of go into some examples later on in the 0:11:21.920 --> 0:11:24.920 show too, but there there no matter what, and there's 0:11:24.960 --> 0:11:27.040 no getting around them. And they're also kind of easily 0:11:27.080 --> 0:11:30.839 identifiable upfront, Right, you can do the research, you can 0:11:30.880 --> 0:11:32.680 know the figures, and you can kind of know what 0:11:32.720 --> 0:11:34.199 you're getting into when it comes to some of those 0:11:34.240 --> 0:11:37.560 hard costs. But on the other hand, these soft secondary 0:11:37.559 --> 0:11:39.680 costs that we're gonna talk about, Matt their costs where 0:11:39.679 --> 0:11:43.520 you're likely going to feel pressured to pay because they 0:11:43.520 --> 0:11:46.800 fit and complement that primary purchase. So these are ones 0:11:46.880 --> 0:11:50.280 that you might not see you can't necessarily quantify upfront 0:11:50.480 --> 0:11:53.200 unless you're really really thoughtful. And an example of that 0:11:53.240 --> 0:11:55.719 would be if you get a new laptop, Oh, well, 0:11:55.760 --> 0:11:57.800 guess what, I need a new backpack to carry that 0:11:57.840 --> 0:12:00.400 laptop around in. And then you are like, well, you 0:12:00.440 --> 0:12:02.720 know what, I'm one of this cool backpack. I need 0:12:02.720 --> 0:12:04.600 a jacket to match or whatever it is, right, And 0:12:04.640 --> 0:12:06.640 it's like that if you give the mouse a cookie syndrome, 0:12:06.760 --> 0:12:09.640 where those are kind of what these soft secondary costs are. 0:12:09.920 --> 0:12:12.160 Those are we're calling them. And so if it's a 0:12:12.200 --> 0:12:14.880 purchase that you make that then forces you to feel 0:12:14.880 --> 0:12:16.960 like you need to upgrade something else in your life, 0:12:17.280 --> 0:12:19.280 and that's one of those soft secondary costs. It's a 0:12:19.320 --> 0:12:21.199 little harder to quantify up front, but we're gonna kind 0:12:21.200 --> 0:12:23.680 of go through some ways to help you figure out 0:12:23.720 --> 0:12:27.600 what those could be and how to decrease or maybe 0:12:27.640 --> 0:12:30.720 eliminate them even in your life. That's right, man, it's crazy, right, 0:12:30.720 --> 0:12:32.599 it's a little bit like lifestyle creep. It's kind of 0:12:32.600 --> 0:12:34.480 funny hearing you talk about an example with like the 0:12:34.559 --> 0:12:36.840 laptop with the bag and then the jacket, But it's 0:12:36.840 --> 0:12:39.520 almost like anytime something touches something else, it's like it 0:12:39.520 --> 0:12:42.760 getting gets infected with looking old, right, because you have 0:12:42.840 --> 0:12:46.280 something like new and shiny, and then in relation to 0:12:46.360 --> 0:12:48.760 the old stuff, you think it really would be nice 0:12:48.800 --> 0:12:50.480 if that was kind of upgraded as well, And then 0:12:50.480 --> 0:12:52.480 before you know it, where do you stop? Like, when 0:12:52.480 --> 0:12:54.400 do you stop? Where do you draw the line? And 0:12:54.400 --> 0:12:56.160 I think what's important to keep in mind, though, is 0:12:56.200 --> 0:12:59.120 that you can draw that line. You can decide that 0:12:59.280 --> 0:13:01.400 these are expense is that I'm not going to participate in, 0:13:01.720 --> 0:13:03.680 and that you have control over. And that's the biggest 0:13:03.679 --> 0:13:07.960 difference between a hard secondary cost versus the soft or 0:13:08.040 --> 0:13:11.920 lifestyle secondary cost is that the soft secondary lifestyle costs 0:13:11.920 --> 0:13:14.840 you just have control over, You have options. But either way, 0:13:14.840 --> 0:13:16.320 it's yeah, like you said, it's good to be aware 0:13:16.360 --> 0:13:18.320 of those and to know what steps you can take 0:13:18.320 --> 0:13:21.120 to keep the expenses down. Yeah, And I think all 0:13:21.160 --> 0:13:23.800 of us have experienced both ends of these, right, We've 0:13:23.840 --> 0:13:26.520 experienced buying something and we didn't realize or we didn't 0:13:26.559 --> 0:13:29.880 factor in those hard secondary costs. We made the purchase 0:13:30.320 --> 0:13:33.320 or we made the leap into something, and we didn't 0:13:33.320 --> 0:13:36.440 even take into consideration those costs that were inevitable, and 0:13:36.480 --> 0:13:38.880 we bore the bront of them after we made the decision. 0:13:39.000 --> 0:13:40.600 And maybe for some of us we had to put 0:13:40.640 --> 0:13:43.200 that on a credit card or yeah, like you with gasoline, 0:13:43.200 --> 0:13:46.720 you're like, oh man, this car takes gas. Totally forgot 0:13:47.080 --> 0:13:49.160 except I drive an electric car, So jokes on you. 0:13:50.040 --> 0:13:52.440 But yeah, there's all we've all been in that situation. 0:13:52.559 --> 0:13:55.400 And also in regards to the soft or lifestyle secondary costs, 0:13:56.040 --> 0:13:59.240 someone who is considering, let's say a bathroom renovation, well, 0:13:59.600 --> 0:14:01.200 I want to reach out the floors and put in 0:14:01.200 --> 0:14:03.439 a new toilet. Well, then you want a new tub 0:14:03.559 --> 0:14:06.880 because a tub looks old and nasty exactly, and then 0:14:07.000 --> 0:14:09.079 maybe a new vanity, and you know what, if the 0:14:09.080 --> 0:14:11.080 bathroom is gonna look this good, I think I needed 0:14:11.080 --> 0:14:12.880 to redo the kitchen at the same time. And so 0:14:12.960 --> 0:14:16.520 we've all experienced this in our lives to one extent 0:14:16.600 --> 0:14:18.560 or another, and it's just good to be aware of 0:14:18.760 --> 0:14:20.920 as we go into making purchases. It can help us 0:14:21.240 --> 0:14:24.040 to know when to say no. To things, and when 0:14:24.120 --> 0:14:26.440 things are out of our budget, out of our range, 0:14:26.800 --> 0:14:28.720 it gives us a better perspective and allows us to 0:14:28.800 --> 0:14:31.120 go into purchases with a little more like wisdom and 0:14:31.160 --> 0:14:33.880 knowledge behind us. And so we've been talking a lot 0:14:33.960 --> 0:14:37.840 lately about spending and consumption. And you know, a huge 0:14:38.080 --> 0:14:41.200 reason that Americans today are having issues with saving enough 0:14:41.240 --> 0:14:43.800 a retirement comes down to their spending. It's not that 0:14:43.800 --> 0:14:45.680 they're not making enough. More of it has to do 0:14:45.720 --> 0:14:48.320 with the fact that folks aren't investing and using that 0:14:48.360 --> 0:14:51.040 money that they've earned wisely, and that has led to 0:14:51.120 --> 0:14:54.120 a lot of people feeling insecure about their futures. And 0:14:54.160 --> 0:14:55.800 so right after the break, we're going to talk about 0:14:55.840 --> 0:14:59.080 why these secondary costs are so important, and then we'll 0:14:59.120 --> 0:15:02.200 also give some exam amples, some specific real life examples 0:15:02.560 --> 0:15:04.720 that will help you to see the difference between these 0:15:04.760 --> 0:15:07.960 two types of secondary spendings and just how being aware 0:15:08.000 --> 0:15:10.080 of these things can help you rain in your spending. 0:15:18.920 --> 0:15:20.600 All right, Matt, back from the break, and let's talk 0:15:20.640 --> 0:15:24.440 about why the secondary costs are so important, and it's 0:15:24.440 --> 0:15:28.120 because there's this major problem in America. Four out of 0:15:28.200 --> 0:15:32.480 five Americans are worried that they don't have enough in retirement, right, 0:15:32.560 --> 0:15:35.600 they are spending too much. And I gotta tell you, 0:15:36.000 --> 0:15:39.080 as we've been combing through this topic doing research for 0:15:39.080 --> 0:15:41.600 the show, Matt, I gotta believe that much of this 0:15:42.280 --> 0:15:46.160 is because of poorly thought out purchases, right, And those 0:15:46.200 --> 0:15:50.520 poorly thought out purchases lead to these outrageous secondary costs 0:15:50.880 --> 0:15:54.280 hard ones or lifestyle ones, either way, but they lead 0:15:54.320 --> 0:15:57.520 to those secondary costs for people that weren't factored in, 0:15:57.800 --> 0:16:00.000 and it leads to living a lifestyle where you're living 0:16:00.040 --> 0:16:03.000 month to month, paycheck to paycheck, and you can't get ahead. 0:16:03.040 --> 0:16:05.480 So I feel like that's the problem that we're trying 0:16:05.480 --> 0:16:08.240 to address in this episode. That's a very good sort 0:16:08.280 --> 0:16:10.240 of big picture as to why this is a problem, 0:16:10.440 --> 0:16:13.040 and then diving down to more the specifics. Right, deciding 0:16:13.200 --> 0:16:16.120 whether something is a solid purchase, right, can really only 0:16:16.160 --> 0:16:19.760 be made when you consider these costs before taking that plunge. 0:16:20.120 --> 0:16:22.280 And so if you jump into a purchase before crunching 0:16:22.280 --> 0:16:26.720 the numbers and realistically considering the complete financial picture, you 0:16:26.760 --> 0:16:30.000 could easily sink your budget. You need to do your homework, 0:16:30.000 --> 0:16:32.480 like this is just part of the due diligence period 0:16:32.480 --> 0:16:34.960 of making a purchase. You don't want to necessarily have 0:16:35.520 --> 0:16:39.000 what's it called an analysis paralysis, where you don't make 0:16:39.000 --> 0:16:40.840 a decision because you're so stuck on the numbers and 0:16:40.840 --> 0:16:43.840 you're so stuck on optimizing it and making it perfect 0:16:43.920 --> 0:16:46.200 that it keeps you from any action at all. But 0:16:46.320 --> 0:16:48.200 you have to do your homework. You have to take 0:16:48.200 --> 0:16:50.440 the steps necessary in order to make sure that you're 0:16:50.480 --> 0:16:53.200 setting yourself up for the future. Yeah, Matt, I love 0:16:53.240 --> 0:16:55.040 what you just said. They're due diligence. I feel like 0:16:55.080 --> 0:16:57.400 that is a great kind of way to think about 0:16:57.680 --> 0:17:00.560 the secondary costs of a major purchase or even a 0:17:00.560 --> 0:17:03.000 minor purchase that you're just about to make. Due diligence. 0:17:03.040 --> 0:17:05.280 When it comes to buying a house, is that seven 0:17:05.400 --> 0:17:07.520 or ten day or whatever you negotiate. Really, it's that 0:17:07.600 --> 0:17:10.159 period that you have after you're under contract on a 0:17:10.160 --> 0:17:12.679 house but you're not obligated to buy it. You know 0:17:12.760 --> 0:17:14.960 you want to, but you don't have to go exactly, 0:17:15.040 --> 0:17:17.920 and so that period of time gives you the ability 0:17:18.000 --> 0:17:22.080 to walk through their decide whether you're into it, get 0:17:22.119 --> 0:17:26.080 an inspection, all that stuff. That due diligence period is crucial, 0:17:26.320 --> 0:17:29.080 and so many people back out of that purchase during 0:17:29.160 --> 0:17:32.160 due diligence, right, And so I think due diligence is 0:17:32.160 --> 0:17:34.440 is probably the right phrase to use when we're talking 0:17:34.440 --> 0:17:38.360 about secondary costs of purchases we make doing that due diligence, 0:17:38.560 --> 0:17:40.960 taking that time period to factor in and to look 0:17:40.960 --> 0:17:44.800 at those secondary costs, and then whether your purchase is 0:17:44.920 --> 0:17:46.840 a wise one or not, whether you can afford it 0:17:46.920 --> 0:17:48.840 or you can't, or whether it's worth it to you 0:17:49.200 --> 0:17:51.640 or it isn't. Like that due diligence period is going 0:17:51.720 --> 0:17:55.119 to tell you, you you know, whether that purchase with its 0:17:55.160 --> 0:17:59.280 associated secondary costs is right for you. Let's give examples 0:17:59.320 --> 0:18:02.840 of some of the hard secondary costs when it comes 0:18:02.840 --> 0:18:04.760 to buying a house that will kind of help put 0:18:04.760 --> 0:18:08.080 it into perspective. It's not just the hundred fifty or 0:18:08.119 --> 0:18:13.199 two price tag that's associated with the home for most people. 0:18:13.520 --> 0:18:15.920 When you buy a home, there are many other hard 0:18:15.960 --> 0:18:20.000 costs associated with owning that right, So in particular, you 0:18:20.040 --> 0:18:23.600 need to figure in closing costs, getting that home inspection, 0:18:23.600 --> 0:18:27.000 which can be four or more potential repairs on the 0:18:27.040 --> 0:18:30.280 home that you'll need to make immediately and over time, insurance. 0:18:30.880 --> 0:18:33.240 The list just goes on and on and on of 0:18:33.520 --> 0:18:36.720 the hard costs that you're gonna pay when you buy 0:18:36.720 --> 0:18:40.359 a home. You're gonna have taxes annually on that home. 0:18:40.760 --> 0:18:43.359 The hard costs that are associated with the home purchase 0:18:44.000 --> 0:18:48.000 are real, they are lengthy, and they are necessary when 0:18:48.040 --> 0:18:50.800