We’re kicking off the week by answering listener questions! And if you have a question that you’d like for us to answer on the show, we’d love for you to submit your own via HowToMoney.com/ask/ , send us your voice memo. Regardless of how random or bizarre you might think it is, we want to hear from you!
1 - How can I use money allocation and automation to reduce my level of financial stress?
2 - Does it make more sense for us to rent or sell our house in the current hot real estate market?
3 - How do I have a better conversation about investing with my partner who doesn’t want to be a part of the “system”?
4 - I’ve made and lost a lot of money from crypto and meme stocks so what do I do now?
5 - Will a $50k advanced degree make sense?
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Welcome to How the Money. I'm Joel and I am Matt.
Today we are answering your listener questions. That's right, Joel,
(00:25):
this is a listener question Monday episode. We've got four
questions plus one bonus one for for listeners. Today. We
have a listener who wants to make the most of
a mean stock investing mistake that you made. Listener wants
to know if if an advanced degree is actually going
to be worth it for them, and should a listener
rent or sell his home? Plus one other question and
(00:48):
then plus that one bonus one, like I says, so
we've got five total questions like we always do. Actually, okay,
So I'm wondering if that graduate degrees like advanced underwater
basket weaving, Because if that's the case, I'm gonna say, yes,
it's worth it. Underwater basket weaving probably doably not, but
underwater welding they pay big bucks. If that's what you do,
that's good business to get it. But man, I wanted
to share a story about an issue I had with
(01:10):
our van. First of all, let me point out that
I am not a car guy, right obviously, like neither
one of us are really car guys were more into
walking places and biking anyway to do it for for
cheaper than trying to be on occasion, whatever it takes man,
and so like, because I'm not a car guy, I'm
not like a detail like I don't when I washed
my car, which is obviously incredibly rare. I'm not like
they're with the toothbrush. I'm not like detailing it, making it,
(01:32):
you know, making it shine. Mine is not great looking
so recently, so I kind of put that out there
because then recently I was driving around in the van
and I noticed that it was like smelling really bad.
You you've ridden the van and you're like, oh, yeah,
what's that smelling? Like? You must you smell it? Like
what's going on? Um? And I thought maybe one of
the kids had left some food in the car. Did
a full like top to bottom search, couldn't find anything.
(01:54):
But during the search process, I realized that the floors
were kind of wet, and I was like, what is
going on? Uh? And then underneath the floormat, you know,
like you've got floor mats over like your entire vehicle.
It was acting as a vapor barrier essentially, and it
was there's water trapped between our mats uh, and it
was basically in the carpet, right, And so I did
some searching on lines, some searched on some YouTube videos,
and turns out it is because of my sunroof. Sunroosts
(02:16):
often will leak, and specifically if the drains uh in
the little tray that the sunroof sits in basically when
it's closed. If that tray, there are normally at least
two drains in there, and if they get clogged, uh,
it'll flood your car and it'll lead to water getting
your floorboards. This is a problem because obviously I don't
want to drive around in a stinky vehicle. But if
(02:37):
it were to affect any of my electrical systems, this
is gonna end up costing me even more money down
the road. Right, Like, I could ignore it, but that's
not the smart thing to do, right, Like, Hey, I
got a little heart pain. I'm just gonna ignore it
for right now because it'll probably clear off. Right, It's
like the shooting sensation up and down my arm, Like
just kind of shake it off. Not the best move. No,
don't do that. Go see a doctor, or in my case,
look on YouTube and figure out how to clean out
(02:59):
these drains. I've figured out how to take a little
a little bottle brush that we used to clean out
the West Seas, you know, his little baby bottle, his
old baby bottles or whatever. But I use that I
was able to clean it out. But here's the thing, man,
I did not know that the first of all, that
those drains can get clogged. And if you're like me,
in your in your park, your vehicle underneath a tree,
all the pollen junk that falls from the tree, it
turns into this like tree sludge, and it'll get in there,
(03:22):
it'll harden. And that's what specifically was causing the drains
and our sunroof to clock. And so I used to
be this guy who never paid much attention to any
detailing when it came to washing my car. But now
every time I washed the car, man, I'm gonna make
sure I pop up in the sunroof and wipe down
the sort of inside of the sunroofs surround to make
sure that no debris is getting down there in those drains,
(03:43):
because you don't want those to overflow. So, yeah, if
you have a sunroof, this may not be something you've
ever done before. But yeah, open that sunroof. Take a
look on the inside of that little area there between
like the headliner and the metal part of your car.
You'll see, you know, we're where all that dust and
all that debris can can get in there. Wipe that down.
Don't wipe the grease. You want to leave the grease
there that that's that's good for the sunroof to like
(04:05):
move on, you know, leave that there. But if you
see all like pollen or or dirt and debris, make
sure you clean that out there you go. This is
an argument for maintenance. It's not sexy, but it's something
that everyone needs to do. It's also an argument for
just researching when there's a problem, because that's what's again
what's so great about the internet, what's so great about
YouTube is that other people have had problems like yours, right,
(04:26):
Like my Honda Odyssey is, which his name Homer is.
Like when I started, did I say the name of mine?
Just Hall and Homer? Yeah, these are names that are
given to our vans by our listeners, right, and so
when I start mind it takes like three or four
seconds sometimes to to get going. And you've got an
older van, yeah, so yeah, I I by doing some research,
it looks like it's a faulty ignition relay, and it
(04:48):
looks like it's not a terribly difficult fix, and I've
got to do that in you know, the coming weeks.
But yeah, it's one of those things where I can
take that into a mechanic and just the diagnosis itself
could potentially cost me, you know, over a hundred dollars.
And I'm not saying there's not a place for mechanics.
I drive an older vehicle and I'm more than willing
to take it to a mechanic for lots of things.
But some of those things, like what you experience, like
when I'm experiencing, you know, they are easy enough, uh
(05:11):
to at least pinpoint the problem and then figure out
whether or not you're gonna be able to tackle it
on your own. And uh and in your case, yeah,
a little bottlebrush, Yeah, that was some like And once
I cleared it out, I got some hot water in
there and kind of poured it through and you can
literally see like or from my problem here, you can
see where it it drains out into the wheel wells.
And so at first it was totally like impacted, like
water wasn't flowing, but after I got to go him
(05:32):
and it felt so good just to see the water
like trickle through because it's design to kind of like
flow through the vehicle basically. But but yeah, hearing you
talk about your starter problem, it just made me think too,
like what if you could get a mechanic on the
phone and just be like, all right, listen, I'm gonna
do it now, like teledoct style. Yeah, but like a telemechanic,
like a telemech I don't know that because when you
actually physically take it in, the problem is never never
(05:53):
reveals itself the way you've been experienced. It's like, I
don't know, looks fine to me, No, I swear this
happens in my driveway, Like sure, sure it does. Yeah,
but yeah, if there's any mechanics out there who haven't
done that, that that might be a good way, because like
if they were able to diagnose it and they're like, yeah,
we can order that part, It's like, man, that just
saved me an entire trip. That inconvenience is oftentimes what
I'm trying to avoid at least, no doubt. All right,
(06:15):
let's move on, Matt. Let's get to the questions are
listening questions for this episode, but before that, we'll just
mention the beer. We're having a beer by World Work Sprewing.
It's a double dry Hopps I p a called Juicy Bits,
and so yeah, we'll give our thoughts on this beer
at the end of the episode, but for now, on
too listening questions. And if you are listening and you've
got a money question for Matt and I, we'd love
to take it on an upcoming episode. You can submit
(06:36):
that at how to money dot com slash ask their
simple instructions, You record a voice memo, then email it
over to us, and then we hopefully feature it here
like we're gonna do with this first question about how
we can make money less stressful in our lives. Hi, Mangel,
my name is Victoria and I'm currently living in Columbus, Ohio.
I've been through almost all of your episodes and I
would like to thank you so much for empowering me
(06:58):
on my financial journey. So my question to you is
how to make allocating my money less stressful. I'm good
at living within my budget and paying off all my bills, loans,
and debts on time, but it takes a lot of
planning each paycheck to make sure I don't accidentally overdrop
my checking account. I keep a low balance in there
after taking care of all my expenses, including sometimes paying
(07:19):
off my credit cards more than once a month. I
get paid by weekly every other Friday, and I think
one of the main problems is that my expenses lean
heavier in the beginning of the month with my rent payment.
It is also hard to decide when to transfer chunks
of money into my emergency funds, rough IRA or other
savings accounts. I do all of my payments manually right now,
(07:41):
I'm nervous that if I switch over to automatic payments
on everything, I'll accidentally overdrop my checking because I don't
have enough money at the time of the month depending
on what each payment is. In addition, I'm nervous that
if I have everything automated and not checking on my finances,
my spending may go arry and I'll slowly lose money
by not having to physically pay everything each month. I'd
(08:01):
really appreciate your feedback in tips on how to manage
my stress about my money allocations, keep up with providing
quality content, and stay safe. Alright, Victoria, this is a
great question Uh. And we actually we we talked about
money stress recently on back on episode three seventy one.
We kind of a positive spin on stress. We try
to at least yeah, because some stress can be useful, right.
(08:22):
It can lead to you getting organized with your money. Uh.
And folks are likely going to see higher levels of
performance because the goals that they may have set. But
of course, being stressed out over money consistently isn't good.
Of course, Um, it can potentially lead to pour money
habits in addition to just health and relational hardships that
(08:43):
you might experience because of a lack of money or
or poor money management. But the good news in your case,
Victoria is that it sounds like that you are being
very organized, right. It seems like you know exactly where
your money is going. You've got to handle on your expenses.
It's just that it is stressing you out. Uh. And
I think we might have a solution for you. Let's
talk about how we can help Victoria be less stressed
about our money. And it seems like the biggest source
(09:05):
of Victoria's anxiety here is that at least from where
we're sitting based on your question, based on listening to
a minute of you talking Victoria, you might be living
paycheck to paycheck right like, and if that's the case,
if your company didn't make payroll for some reason on Friday,
it sounds like you'd be in a really, really tough spot.
And so we would say it's really crucial to increase
(09:26):
the gap between what's incoming and what's outgoing. Right. So, yeah,
if you're worried about overdrafting your account, that means you
don't have quite enough money in there. So there are
really two ways that you can create more financial margin
in your life, right. You either make more money or
you spend less money. Yeh, those are the two levels
that you can pull. Yeah, it's not really all that
complex when it comes down to it. But one of
(09:47):
the things we wanted to mention is, and this doesn't
necessarily actually technically fall into either, but it's the first
obvious thing that stood out is that you mentioned that
you're contributing to your roth Ira. Normally, this is a
good thing, and Matt and I encourage people contributing to
roth iras it's very rare that you'll hear us say
don't do that or it's a bad idea. But we
would actually rather see you put less money right now
(10:07):
towards your investing for the time being, and more towards
savings until you can comfortably start contributing to that wrath again.
For you, increasing margin is the most important thing, and
investing can come just a little bit further down the road. Yeah,
over over a longer time horizon. We'd encourage you to
try and pull both of those levers right, either making
more or spending less in order to increase your financial margin.
(10:27):
But for now, simply putting your investments on hold like
that should allow you to immediately gain some traction, and
that's what we're looking for, uh in your case, and
we think that that should help reduce your stress levels
by being able to put some of those payments on
auto payment, because you'll know that you'll have enough to
cover them right um. And you know, even if you're
not set up on auto payments, just having enough money
(10:48):
in the bank will allow you to implement your own
personal systems for what bills you pay on what dates.
We don't want you to have to actively decide when
you're going to pay bills or when it is that
you're going to invest junk your money, And we want
that to be a little more passive, a little more automatic. Uh,
And even just a repeating monthly calendar reminders, say on
the third Friday of that month, can be a good
(11:10):
prompt for you to invest. That's a good way to
automate and just get it off your mind. But of course,
make sure that you don't do that until you have
that financial margins set up. But essentially, when you have
more margin in your life, that's gonna lead you to
be able to take advantage of more automation, which should
decrease the levels of stress that you're experiencing. And also,
you know, one other side thing, switch to a bank
that doesn't charge overdraft fees. Ally Bank is a bank
(11:33):
that recently did away with those completely. That way, if
it happens to be a crazy month and you maybe
have a few more expenses than normal and that bi
weekly check just hasn't been deposited yet, you're not gonna
incur those overdraft charges every single time. That's something that
we're glad to see Ally leading the way on. Yeah,
you know, those overdraft fees can be like the sort
of damocles hanging over your head and you're like, oh no,
(11:55):
like that if it. You know, if I make this
one spend, it could potentially result in a thirty charge,
and that's that's a lot of money, especially Yeah, if
you're living paycheck to paycheck. But yeah, Matt, I agree.
The more margin you have, the more you can automate.
Because you know that the money is in there, you
don't have to be worried about that. And so, yeah, Victoria,
it's not that we don't want you investing towards your retirement,
but we want to make sure that you're doing things
(12:16):
in the right order. And this is exactly actually what
we talked about when we introduced our money Gears episode
that was three or two beginning of this year. You
can either go listen to that one or you can
quickly read the high points on the start here page
of our website at how the Money dot com. But
the very first thing you should do is to make
sure that you have an emergency fund of at least
two thousand, four hundred and sixty seven dollars. It's a
(12:36):
very specific number. If you want to know more about that,
you know, if back and check that episode out. But
you did mention that you're putting money towards an emergency fund.
So that's awesome that you're prioritizing it at least in
some to some degree. But yeah, maybe a simple way
that you can use that to lessen stress is simply
by moving it over to your checking account instead of
having it in a separate savings account. Right that way
your emergency fund can act. Is this like cushion between
(12:58):
getting paid and some big expenses like a rent or
mortgage payment, you know, at least until you have enough
saved that you can transfer that over to savings and
you've got enough in both accounts. But really the big
goal right here is more financial margin, more liquid cash
sitting in your accounts so that you don't have to
be worried about any individual bill coming in. You want
to get to the point where you're using last month's
(13:19):
money to pay this month's bills. And once you get
to that point, that's when you have margin, and that's
when you can say, all right, you know what, I
think maybe I'm ready to get my toes back into
investing a little more regularly because I'm not stressed about
money every day or every week. And yeah, I mean,
I feel like Victoria can get there, and we'll get there.
It's just gonna take some intentionality right now and kind
of yeah, shifting some things around. Yeah, that's right, Victoria,
(13:41):
essentially willing to get you off of that knife's edge
where one misstep would would wreck your finances, and kind
of going back to what Joel was saying to about
making sure that you're doing these uh, these money moves
in the right order. This is something we've talked on
the show about before, but maybe it's worth mentioning again.
I have made this exact same mistake back when I
was first learning about personal finances. I had heard the
power of investing, and a friend of mine was like,
(14:02):
you've you've got to get that compounding interest working in
your favor, and I said, yeah, you're right. So I
dumped a ton of money into my roth Ira a
before my personal finances were in good order, and it
turns out that I needed that money a few months later. Uh.
In taking money out of a volatile market just after
a few months is not ideal, and so that's not
the situation that we want you in, Victoria, were you
(14:24):
to need that money, obviously we don't want you to
go in debt, but we also don't want you to
take money out of your wrath. I A, yeah, a
good money move isn't necessarily a good move. It's done
in the wrong order, and it's a bad money man,
and it's a bad money move even though it's a
lotable things that you're attempting to You'll get there soon.
You'll get there soon. So all right, we got more
questions to get to, including one about selling or renting
(14:47):
a home. Which one should this listener choose. We'll get
to that and more right up for this break. All right,
we are back and we're gonna take a question here
about some money relational advice. But before we get to
that one, let's take this question about whether this listener
(15:09):
should sell or rent his home. Let's speed from San Diego.
I'm currently in the Navy, and my wife and I
have owned a home here since two twelve. We're scheduled
transfer to Washington State in a few months and are
trying to decide whether to rent or sell before moving.
There's a chance we could come back to San Diego.
It would be nice to have a house, but also
(15:30):
a chance we would never come back. So we're concerned
about renting a place that we live so far away
from for possibly many years. Furthermore, the market in San
Diego is really hot right now, and if we listed,
we could get top dollar for our place, roughly two
hundred and fifty thousand dollars profit after selling or with
renting about a one thousand dollar profit per month. We
(15:53):
have considered a property manager if we rent, because we
were unexperienced, but have a lot of family in the
area that would be willing to look after the place
at no costs. If we did rented ourselves. We would
love some advice from you find folks about if we
should rent or sell to help make our decision a
little bit easier. Thanks for all you do, and I
(16:13):
can't wait to hear from you. PS. What is your
favorite double I p A? All right, Matt Pete stuff
is question there? What's your favorite double I PA. That's
a difficult one. That, yeah, that is tough. I mean
anything that's double dry hopped. And so I'm actually quite
fond of the beer that we're currently drinking, but I'm
thinking of Burial. They've got a lot of double dry
hop double I p A s Topath they make some
(16:35):
really solid ones as well, But I mean, I know
it's it's tough to narrow it down to a particular
beer because a lot of them are similar. There's different
breweries that make just really high caliber uh double I
PA s. But I will narrow that down to double
dry hops I P A s specifically, those are my
jam Here we go, all right, I'm with you on that. Yeah,
they've said the most like visceral flavor profile. Uh, let's
(16:59):
get to pezze actual question. All right, let's talk about housing.
And normally, Pete, we would tell you to sell when
you're in the military and you're moving, because becoming a
default long distance landlord is not really ideal. That there's
a lot of potential pitfalls, there's a lot of downsides
to that. But the fact that you might move back,
I would say it's one check mark at least in
favor of potentially holding onto that home. You know, having
(17:22):
family in the area is another positive in favor of
keeping at home. One it means you're more likely to
move back there, and too, it means you might have
some help looking after it. But ultimately, Matt and I
would say there's just too many X factors to make
keeping this house a really great decision for you. Yeah,
too many unknown variables and So Pete, since it sounds
like this would be your first rental property and you're
(17:42):
gonna be living hundreds of miles away, it sounds like
getting a property manager would actually make the most sense
for you in order for this to be successful. Yeah,
you did mention having family in town, and while that's
you know, that's good that they'd be able to keep
an eye on the place. Like I wouldn't actually want
any family members managing a property unless that was their job,
or unless they had experience maybe with their own rentals.
(18:03):
I think having a family member that has zero experience
with tenants like that kind of sounds like a recipe
for disaster. Yeah, they get the call or the email
and they're like, I don't know, like we'll do it,
we'll fix it. And it's just like, oh, actually, no,
you know, we're not supposed to fix that, like that's
their fault or whatever the situation might be. You want
to have somebody who knows what they're doing on the
other end of those calls from your tenants. That's when
(18:24):
having a property manager makes sense. But hiring a property manager,
of course, is going to eat into that monthly cash
flow from the property. Typically that is all or half
of the first month's rent and then ten of the
monthly rent moving forward. And so if you really want
to maintain that property, if you want to keep it
because there's a good chance you'll be moving back, that
(18:44):
would be the route to go. But otherwise that's a
really steep cost to maintain something that maybe you don't
even really care about all that much. Yeah, I agree.
I think that Pete needs to be actually pretty certain
that he's going to move back, and then he loves
his house enough that he wants to move back into
that particular home. In order to rent this property out,
the desire has to be not necessarily to make money
as a landlord, but to keep the house that you
(19:06):
want to live in again a few years down the road. Yeah,
if you know the neighborhood, you have neighbors who are
good friends there, and you're like, okay, I would want
to move right back to this exact spot, you know,
in a couple of years, and it's likely right Yeah, yeah,
and so so yeah, what you just mentioned though, Matt,
that's one strike. He can running it out right, having
to hire a property manager and money, it's gonna cost money.
Another reason is that Pete's home has increased in value
(19:28):
a lot, right, and so the fact that this home
is probably an expensive home makes it unlikely that it's
gonna be an awesome rental property. To write that, the
numbers often work better for landlords who own and lease
hound homes that are on the less expensive side. Right, Like,
typically numbers work out better on a rental home they
cost two hundred thousand dollars, then a rental home they
(19:49):
cost five thousand dollars, right, and even better if it
costs even less than two. Yeah, if if somehow you
can buy a house that costs twenty and you can
run it out, you know, for twelve hundred buck, that's
when the numbers are great. That's the rule of thumb.
We're trying to hit the one percent rule of them,
although much harder to come by these days. So, yeah,
if you're if your home has gained that much value,
it could be worth like over half a million dollars,
(20:11):
or maybe even close to three quarters of a million dollars,
And in that case, it's probably not going to make
for a great rental property. Expensive homes just aren't usually
ideal for renting because of that weaker profit margin. That's right,
And Pete, you know, let's talk about the other probably
biggest downside to keeping this home as a rental. You
mentioned that your home has already skyrocketed in value, right like,
you're looking at two hundred fifty thousand dollars in profit.
(20:33):
That's pretty incredible. Congrats. And if you rent it out
for several years after that and then you decide to
sell it, you're gonna be subject to paying capital gains
tax on the entire value increase of the home. And
so were you to sell now, that will allow you
to pocket the gains tax free, since you've occupied it
as your primary residents at least two of the past
five years, and so you don't want to let taxes
(20:55):
completely drive your decision. But in this case, you know,
that's a pretty good reason to sell if you're not
gung ho on becoming a landlord as well. I guess alternatively,
if you are pretty interested in kind of running the
property out, give it a shot, maybe give it a
couple of years. But you need to make that decision
before you get to that third year, because if you're
kind of on defense about being a landlord, you want
(21:16):
to make sure that you sell it within that third year.
That way, you're still able to not pay any capital
gains tax. Uh And in the meantime too, I guess
in those two or three years, hopefully you will have
seen the value of the home continue to rise, although
that's not necessarily guaranteed. Yeah, man, I agree. I think
maybe giving it a two year trial is kind of
the perfect route to go if Pete thinks he's going
to move back into the home, uh and and really
(21:38):
desires to move back there too, because yeah, you can
see how's it going, like, is this long distance landlording
thing working out well for me? Is it profitable? And
do we actually think that we're gonna move back into
the area at some point in two years? Is that
perfect timeline? Because if you're like, you know, it looks
like we're not moving back and it's not really ideal,
then you can pull the trigger and sell and you
can still avoid the massive tax us. You know. That's
(22:00):
that's the big thing you want to make sure you avoid. Yeah,
that that timeline, that that clock's ticken once you move
out of the house. So I just got to be
cognizant of that. But Pete, best of luck to you,
I guess I don't know if we have gave you
like a firm decision one way or the other, but yeah,
the trial period might make the most sense. But I
guess one other little con to that would be when
you're living in it, you can present it in the
perfect way to buyers. And then there's a lot of
(22:21):
work that to staging, getting the home ready after you've
had other tenants in there. So there's a lot of
variables here. But Pete, we trust you to make the
best decision with kind of all the information we've laid out,
and and best of luck to you and your fam.
All right, Matt, let's get to the next question. This
one is about having difficult money conversations with your partner. Hi, guys,
this is Leslie calling from Leavenworth, Kansas with a relational
(22:45):
money question. I appreciate how you guys understand that that's
an important part of personal finance, so I'd love to
hear what you have to say. Recently, I told my
husband that I thought it was time for us to
open a taxable brokerage account. Were in money gear seven.
He really wasn't very enthusiastic about the idea, and when
I asked him why, he made some vague comments about
(23:09):
disliking the economic system. We're not wanting to be part
of this system. We agreed to sit down at a
later point when neither one of us is stressed or
holding a baby and talk about things more. But I'm
really not sure what to ask him during that conversation.
I know this is a big picture conversation, UM, more
about the why behind your money? Um. But if I
(23:32):
just sit down and say what's the why behind your money,
I'm not going to get anywhere. My husband is really
responsible with his money, but he hates talking about it
or even really thinking about it, and I just want
to see if we can get on the same page
better or at least understand where he's coming from. So
I'd love to get your tips on what questions to
ask so that we can really get to understanding each
(23:56):
other better. Thanks guys. All right, Leslie, congrats on being
in money Gear number seven. That is a huge accomplishment,
So congrats there, and and yes, uh definitely how this
convo when you're not in a stressful situation, you know
the gosh that the setting matters a whole lot, and
being able to have just a reasonable conversation with all
your emotions flaring. I'll be honest. You know, I love
(24:17):
my kids, but it's pretty much impossible for Kate and
I to have a conversation, a healthy conversation about anything
important when all the kiddos are awake, running around, pulling
on us, interrupting. That's something that we're working on. It's
like a mommy and daddy talking and then you cannot
interrupt unless like something's on fire, Dada, where's my water?
And so yeah, post bedtime or date night is definitely
(24:39):
when we prioritize having those conversations, you know, look to
find ways to make those conversations fun. It sounds like
he does not like talking about money, and so if
he likes craft beer, maybe crack open a bottle of
something that really taste you. Or if he likes being outdoors,
try to incorporate that with his money conversations. But two
different ways, you can make it as enjoyable as possible.
You give him in his comfort zone, and that that's
(25:00):
definitely a good way to approach it. I'd also Leslie,
come at this conversation with some curiosity because, honestly, like,
based on what you said, I'm pretty curious now like,
I kind of want to talk to him and you know,
get his ideas, Like what is it about the system
that he dislikes, or is it like the idea of
capitalism in general, or is it just like more like
the consumerism that's running up in our country. Because yeah,
(25:22):
and Matt and I were fans of the free market
economy that we live in, But that doesn't mean that
there aren't issues and concerns. And so yeah, those pop
up and they can maybe change how we feel about
the moves that we're making with our money. But yeah,
there there are healthy ways to invest without feeling like
you're forced to support companies that you have a real
issue with as well. So that's kind of where maybe
those curious questions can kind of bring forth maybe some
(25:43):
of those bigger things that he's feeling. Um, and yeah,
when when it comes down to it, that's a big
reason why something like E s G investing has become
so big over the last five years. Those are the
funds that prioritize investing in a socially responsible way environmental, social,
and governance concerns. And yeah, now there are reasonably inexpensive
funds that allow you to invest in that way. So
it's like if that is the reason, And again, it's
(26:04):
hard to know, right until you dig in a little
bit more and ask him some of those curious questions.
But yeah, it could be something as simple as that,
what like, well, some of my money that I'm investing
is going to these companies that are doing things that
I don't like. And it's like, well, actually there's ways
around that, now, So yeah, there there might be easy
solutions to some of the things that he's feeling. It
could just be a nuts and bolts kind of conversation, right.
But then Leslie, you know, since both of you have
(26:26):
done so well with your money, you know, maybe he's
hoping to invest a little less because he wants to
enjoy some of the fruits of your mutual labor now, right,
And so focusing that conversation on the future that the
money that you invest today, that that will be funding,
is going to be a really important aspect of that conversation.
I don't think most folks naturally gravitate towards investing huge
loads of money for the future. Uh, And it often
(26:48):
doesn't help even when we're told to do so, because
it's just like the quote unquote smart thing to do.
It's like that that busy work when you were in
school and you're like, you should just do this because
you should do this because there's just twenty is left
in the period, okay, and we're not going to play. Yeah, yeah,
we need more than that. We need a larger goal.
And so making sure that it's included in this conversation.
These larger goals could really help you, guys to dream
(27:10):
together about the future in a positive way. It can
make that decision to invest feel like something that you're
doing on purpose instead of that you're just doing the
responsible thing because you're supposed to. You want to find
ways to link that money that you're sacking away to
whatever future goals that you both are striving after. Yeah,
I feel like on purpose is just the biggest two
words there for every investor, for everybody handling their personal finances, right,
(27:34):
having that why behind you really helps fuel you in
the right direction. And so what that looks like is
is to make those goals as tangible as possible. Right,
Like you mentioned asking him what this big why behind
his money? Uh, it might be too grand of a
question to ask initially, pretty like it's pretty nebulous. Why
behind your money, it's like, what do you mean? And
unless you've listened to that episode, unless you've heard us
(27:55):
talk about it, I think a lot of folks are
probably like, huh like that. They just kinda like stare
at you with blank eis. So you gotta ask like
smaller questions to kind of pinpoint that why right you
kind of kind of drive the conversation towards that. And
so instead of asking him that, maybe ask him what
he like his ideal calendar to look like, get practical
about it. What do you want? What do you want
your weeks look like? What do you want your weekends
to look like? Or like even just your mornings. Do
(28:17):
you do you want do you want less work in
your life? Do you want more uh time to go
for hikes or bike rides or what like? What is
it that's kind of motivating you? And then find the
way that the money intersects that, right, because like investing
so that we can have financial freedom, it sounds kind
of boring and it sounds kind of lifeless. And so
you have to bring life up to that in your
(28:37):
own marriage, in your own personal life, because investing so
that in the future you can achieve those goals. You
can travel abroad with your greate kids for you know,
weeks at a time, take a sabbatical or so that
you can even do something like transitioning to a lower
paying but more fulfilling career that is less demanding. Like
those are the kinds of discussions that are going to
add some color to that conversation. It's less about like, well,
(28:58):
when do we want to achieve financially dependence, because that's
a boring conversation that I don't ever want to have
with my wife. Um, but yeah, talking about those goals
that we have the more exciting things to where we're
investing for something specific that's going to make our lives
better and achieve some of those bigger goals that we
have for ourselves, Like those are the exciting things to
talk about. Absolutely, and maybe Leslie too, Like for him,
maybe it's about like maybe he feels slightly guilty for
(29:21):
the success that you have had, and so maybe what
that means is giving more of your money away, Like
maybe there's a place for that charitable giving, And so
through your conversations that you're gonna have with them, hopefully
you can kind of get to the root of what
it is that he wants his life and he wants
y'all's life to look like as a couple, as a
family in the future. And so best of luck with
this conversation, and we hope you enjoy it, you know,
like have fun as you talk about your future together.
(29:43):
Like this is that should be inspirational. It shouldn't feel
like homework. It should more feel like like you want
a prize. And now you're going to decide which prize
you're gonna pick, because that's what it is that you're
gonna be seeking after. But but also obviously you've got
your own views and your own goals, but you know,
be curious about his point of view as well. And
you know, either route you take your family is gonna
be fine because it sounds like you've been making really
(30:03):
smart money decisions with your money for a long time.
Now you're on Money Geared number seven. We're really proud
of y'all, And uh, yeah, I hope this is something
that you and your husband are able to figure out soon.
And yeah, sometimes just acknowledging that realizing that your options
are pretty wide open because you've handled money well for
so long can really help like ease the stress of
that conversation too. It's like, hey, we actually have a
(30:25):
lot of options here. Just acknowledging those options even at
the beginning of the conversation and the success you've had
I think can really help kick start that conversation in
a good way to Absolutely so, we are going to
take a quick break. But after that we've got our
last two questions. We're gonna get to that question about
making the most of that big investing mistake, specifically when
it comes to cryptocurrencies and meme stocks. We're gonna get
(30:46):
to that one plus one other right after this break.
All right, we're back in Matt. It's now im time
to talk about what do you do after you've made
an investing screw up. We've got a listener who did
that very thing, and he's got some questions about how
(31:07):
to rebound. Well, let's get to that now. Hey, Joelan Matt,
I take it from Nebraska here, but you can help
me make the best of a terrible financial mistake. For
some background, I decided to quit my job and sell
my house in early to start my own project. In
March of invested about seven came bitcoin when it was
in a slump, and I didn't really think about it much.
(31:28):
By the end of January one, though, I had a
ground about thirty K. This is when I done goofed
I moved all my big on fun money into game
Stop and well you know how that ended. Ask about
twenty K of my investment. Well, I'm not destitute. I
still have a nice savings account, twenty kan stock options
and up for one K in touch, and I decided
(31:50):
to work with my parents to make some exture money
to can be going for a while longer. Is there
anything I can do to make the best out of
my loss, whether through actors or something else. I wish
I could have been listening to you guys earlier this
year and maybe avoid at all of this. Thank you,
all right, Matt. First things first, when it comes to
editor's question, I have to I have to say to
(32:11):
Edgar stop beating yourself up, man, because I feel like
that's probably the worst thing you can do after you've
made a mistake, is just to replay it over and
over in your head, right, like just giving yourself crap
for for having made a mistake. Because we have all
made mistakes, and the key is learning from that mistake
and not letting it defind you. It actually makes me
think of a recent low Key episode where he had
(32:32):
to relive this bad decision that he made over and over.
Not unlike what you were just saying, Uh, Edgar, don't
be like low Key in this case. But the other
thing here to make sure that you're doing is to
just make sure that you learn from this experience, right,
like it sounds like you have. But investing in the
hyped up cryptocurrencies that are the latest and greatest out
there are the different meme stocks of the moment can
(32:54):
have real consequences. The different headlines that you read will
make it seem like a bunch of folks are getting
rich and that you're the only one sitting out on
the sidelines. But that's just not true. Uh. And so
we want you to do whatever it takes to turn
off the different noisy inputs, you know, like the different
subredits that might be encouraging you to invest in something
just because a small group of folks have deemed it
(33:15):
to be the stock of the moment. This is all
what we're gonna throw our collective weight behind, diamond hands
to the moon, whatever terminology they use, I don't know,
because we don't Joel and I. We're not into that,
but that's what folks are doing, and that type of
investing is pure speculation. Yeah, and all the headlines we
see often there's a profile of somebody that has made
out like a bandit, But there's just so many more
people like you, Egger in your position who end up
(33:38):
being hurt in the aftermath of something like investing in
a meme stock. So yeah, but but how can you
potentially turn this mistake into your advantage besides you just
learning from it? Well, yeah, I think one it's it's
important to transition from the idea the way you're kind
of training stocks now, which we would say is more speculative,
and get more comfortable with the idea of getting rich slow. Right,
(34:00):
that's the ulcer free way to invent, which you know
that I don't personally want to have like health problems
due to the way I'm investing. I don't want to
be super stressed out about I don't have to pay
for it with your body. I was I was moving
on stumps around the other day and I kind of
stumbled and I jammed my finger. It's still like, look
how fat and swollen it is. It's been like weeks,
that's not the kind of thing I want to deal
with anymore. In your twenties, that would have been the case. Yeah,
(34:23):
ways that would have bounced back. But now that I'm
in the thirties, I'm like, ouchy fothered me. Well. But yeah,
one other way for for for Edgar to make lemonade
that lemons here is to do some tax loss harvesting, Right, Edgar,
if you have other investments that have made a solid return, right,
you can sell both your winners and your losers in
the same calendar year, and that allows you to at
(34:43):
least offset some of the tax that you would have
paid from the winners if you were to sell them
in let's say, separate calendar years. So that's one thing
that you can do, one you know, tax move that
you can do that maybe at least lessons to blow
a little bit, that's right. Yeah, So Edgar, in your case,
it sounds like you head onto your bitcoin for less
than the year. If you purchased in March of sold
in January one, that's not twelve months, and so you're
(35:06):
realizing a short term capital gain. But then you bought
a m C and since you said that, you lost
twenty K. I'm guessing that you sold, which means that
you've realized a short term loss. And so though it
never feels good to lose money ever, right, you can
take maybe some solace in knowing that your gains and
your losses might effectively cancel each other out and you'll
likely have to pay the I R S very little
(35:27):
in taxes. But that being said, since we don't know
what your income is, do make sure that you can
sold short and long term capital gains rate charts, so
that way you know you're reporting the right numbers to
the I R S. Yeah, and moving forward to right,
we would suggest to everyone and to you also to
invest no more than five percent of your total investment
(35:47):
dollars in speculative assets like meme stocks and crypto. And actually, Matt,
I mean, I know you own a little crypto, but
for most folks zero percent is often better because that
means you're not obsessing over the movements of one or
two companies or one or two cryptocurrencies that you're invested in.
I personally don't want that stuff taking up any space
in my brain, and I know myself, I know if
(36:07):
I go down that rabbit hole of speculating even with
just this tiny portion of my money, even if really comparatively,
if I lost at all, it doesn't have much of
an impact on my life. I'll still be checking in
every day. And I think that's true for most people
who dabble in these things. They're really in it for
the day to day moments. They're less in it for
the decades, and so it does take up an inordinate
amount of brain space. Yeah, that's just that's just not
(36:29):
really for me, because I'd rather have mental bandwidth to
go towards the other most important things in life. And so, yeah,
investing in that way is just something that we would
suggest not doing much of, if any of it at all,
in the future. Stick more to Yeah, index funds, total
stock market index funds, or the SMP five index fund,
or a target date retirement fund. They're super boring, but
(36:51):
you're also not going to see the crazy ups and
downs and severe losses of money that that you've seen either. Yeah,
I will say, in defense of Edgar a little bit,
he did actually call or he called it his play
money basically, and so that like I find some encouragement
there knowing that. And he also did mention too he's
got that four O one K that he's not planning
on touching. So it makes it sound like he does
(37:11):
have a solid, massive portfolio and that this wasn't too
much money for him. But yeah, it was money maybe
that he was willing to risk. But even still, it's like,
I can't believe I lost it all right. You need
to be willing to invest money or to play around
with money that if you lost it all that it
wouldn't really bother you that much. It can't be money
that you're counting on. And it also helps too if
you're kind of like a robot like me, where you
(37:32):
can just like turn off your emotions and refused to
check where bitcoin and where ethereum is because I'm I mean,
I've got money in both of those and I literally
don't know where they are until sometimes you'll mention it. Joel,
You're like, oh, man, have you seen it dropped like
ten percent today? I'm like, oh, well, I didn't know that,
but thanks for telling me. I personally, I think I'm
more interested in your playing money portfolio than you are.
(37:54):
You care more about than I do. Whereas my approach,
I mean, I've got five percent of my overall portfolio
in UH in cryptocurrencies. But I'm not going to even
really sit down and look at the numbers UH for
a full year. And so if that sounds like something
that you're capable of doing, maybe that's an option for you.
But for everyone else, it definitely pays to know yourself
and it may not be something you want to dable
(38:15):
in at all if you know it's going to stress
you out. All right, let's get to our last question,
and this one is coming from a listener and they're
they're trying to decide if this extra degree, if it's
gonna be worth it. So let's hear that one. Now
they have the money. This is Matt and Rochester, New York.
I'm a big fan of the show. My wife is
looking to go back to school get her masters in
(38:35):
child development. It's going to be about fifty dollars, which
we're able to fund with the sale price of our house,
so no loans. That's good. My question is, how do
we know how long it's going to take to recoup
this fifty dollars with an increase in her salary. I
feel like maybe about two years ago, you had a
(38:56):
guest on a show and there's a score that was calculated.
I looked at the cost of education compared to the
increased cost and salary after that education is completed, and
it came up with a nice little score. Maybe you
can point me back in that direction, or do you
have any other resources I can take a look at. Thanks, Oh, Matt,
that's a good question. Hey, getting an advanced degree, when
(39:19):
does it payoff? Or when is it just too much
money you shouldn't be paying. That's a good question and
question that's not cheap. But also at the same time,
we're so glad, Matt that you're able to pay for
that education without taking on any additional debt. Right, this
is just such such a big accomplishment, So kudos to
both of you. Were big fans of got debt free education.
(39:41):
It's certainly not doable for everyone, but yeah, the fact
that you guys are going to be able to fully
funded with cash on hand is just a huge step
in the right direction because you're not paying additional interest
on that fifty and that's big exactly. Yeah, And before
we get even more serious with it, did it sound
like Matt like he he totally sounded like David Harbor
to me. Uh, from Trade of Things. Yeah, Jim Hopper's
(40:01):
his character and stener things. Didn't you kind of sound
like that he's got that uh that vibe going on? There?
Another Stranger Things season coming out this season four. It's
been on hold. I have no idea where it is,
but I need it in my life. But Matt, you know,
you're right. You know, we did talk about how to
assess the value of a college degree quite a while
back with Christie Sen. That was back in the episode
(40:22):
one eighteen. She totally rocks, and she's got this really
incredible story about growing up in poverty and China before
she immigrated to Canada. But she calls this her POT
score or her POT score, which stands for pay over tuition,
And Christie says that you take the median starting salary
that you can expect to earn above minimum wage, and
then divide it by the total tuition cost of the degree.
(40:44):
This gives you a single number that you can use
to rank whether a degree is worth the amount of
money that you'd be paying to get it. And so yeah,
if it takes you more than ten years to pay
back that advanced degree, we feel that it's it's likely
not worth it. Yeah, if you're gonna be able to
pay it back in two to three years, and that's
a that's a pretty good pot score. But yeah, if
the earnings, Yeah, if the earnings aren't going to justify
(41:06):
themselves and it's gonna take a decade or longer than
you're like, maybe I should rethink this, uh, this future course.
And you're also having to estimate what your future earnings
are going to be, Like what do most people in
this profession after they get this this degree, what are
they earning? And so, yeah, I think it is a
great formula. It's it's really crucial to know what your
wife's likely salary is going to be in the years
(41:27):
following getting that degree, because it gives you that information
that you need. Right, So if you're going into a
blind you're like, you have no idea, So you have
to do some research on on that front. But yeah,
advanced degrees can make a big difference in the income
that you're gonna be able to make, and it can
mean more income for decades and so especially Yeah, the
younger you are, the more use and all like that
you're going to get out of that advanced degree. So, uh,
(41:49):
we're actually having to do something similar because my wife
is planning to go back to school to get a
counseling degree. Yeah, and this is something that we've been
talking about like since before we even got married, and
now it's kind of like, all right, why why have
we been waiting this long? Let's do it. And so
it's actually going to happen. And it's a bit harder
for us to figure out because she doesn't have a
job currently where she's earning an income. Um, so we're
(42:11):
kind of saying, like, well, what would you be making
right now, and what you know, will you be making
after this, you know, after you've learned this degree. But yeah,
we're kind of comparing it to like the job that
she had before we had kids. And yeah, it looks
like comparatively that this degree will pay off in four
or so years. But it's also crucial to note that
the different careers provide different fulfillment for all of us
to write, like for our family, even if it took
(42:33):
longer to make money back on that degree, it would
be worth it because my wife, she's basically born to
be a counselor, Like, she's really good at it, she
loves it. And this line of work is going to
be just incredibly fulfilling, And so sometimes it goes beyond
the dollars in the sense like, yeah, you want the
dollars and the sense to work out, but if you
have the money and you don't have to take on
debt to fund this, you do have at least a
little more freedom to say, well, how fulfilling is this
(42:55):
career path going to be? And even if the pot
score isn't the best, right, you can still just a
based on some of that other rationale. Yeah, yeah, so
that that pot score, the pot score, like it's really
great too when you're starting from scratch and you're considering
like multiple different degrees that have wildly different costs and
starting salaries as well. But you know, when you already
have a path forward that you really want to pursue,
(43:15):
we feel it's crucial to know how long that payback
of the degree is likely to take. And then as
a family, like you're just gonna have to decide yourselves,
you know, whether or not this makes sense as you
take into account all the different goals and the things
that you'll have in mind, you know, because yeah, like
like in Joel's example here with his wife that counseling
degree is going to mean a lot to Emily. But
if there's someone out there considering that same degree and
(43:36):
they don't really care what it is they're pursuing, well,
then in that case, it would come down more to
the numbers than anything else, because it's not something that
they're going to be gaining personal fulfillment from if they're
not really interested in the self development that they're going
to be gaining with that as well. So there are
a lot of different factors at play here. You've got
to keep all of those things in mind. We wish
you the best of luck in making this decision. Matts.
(43:57):
The numbers are important, but it's not always about the numbers,
no doubt, and having the cash on hand to pay
for it definitely de stresses the choice a little bit.
Right the decision. It makes it a little easier to
kind of pursue what you want when you can do
it without taking on debt. Right it gives you the
freedom to say, I'm making a choice for myself, and
hopefully it also that that choice that's fulfilling also ends
(44:19):
up becoming more lucrative at the same time. Absolutely, yeah,
what if Emily was like Hey, let's I really want
to take out a parent plus loan for that counseling theory, Well,
that would be for a child, And like, yeah, I
guess you know. Maybe, Well no, because even when our
kids are older, if they want that, we'll find another
way to pay for a parent plus are the worst?
You don't want to do that? No, all right, let's
get back to the beer that we had on this episode, Matt.
(44:40):
This was El Dorado Double Dry Hawks Juicy Bits from
World Works Brewing Company. This is a brewery out of
Colorado that just started distributing here in Atlanta. So I
picked these up at our favorite local bottle shop. What
was your take on this? I p A man, so
stinking good. We've actually had sort of had one of
their beers before because they've done a collaboration with one
of our favorite local brewers here, Money Night Brewing. But
(45:03):
is there a way to describe a beer both as
juicy but also dry, because I feel like that's what's
going on here because they've got the double dry hopped
action going on, and so like, I don't people are
gonna just be bored of us talking about double dry hops.
I p a s. But they're so stinking good. They've
got that bitter, kind of blue cheesy note from the hops,
but at the same time, just the kind of citrus, juicy,
(45:26):
lushness that you get from this beer at the same
time is just so good. I'm a huge fan of
this beer and if you can get your hands on it,
I would totally recommend it. Yeah, I feel like the
aftertaste is incredible. This this beer is like a little pungent,
but in a good way, and I feel like like
a wash cloth that's soaking up some water. That's why
my tongue feels this beer. It feels like it's like
infusing my tongue and coming with the beer. Yeah, I
(45:50):
guess one with the juicy bits turning into that beer.
Tongue is just a juicy bit, But that's it begins
to feel like after a while drinking this beer. Absolutely,
it's just kind of like that concentrated So yeah, I
liked it a lot and look forward to hopefully getting
more World Works beers on the shelves here in Atlanta,
And I'm sure our listeners are ready to hear us
get different types of beers in our beer cooler down
(46:13):
here in the podcast studio. Maybe we'll try to include
some of the different varieties of beers that are out there. Um,
I feel like we tried to mix it up, but
it's also hard not to pick up a good looking
double dry hop I p a right, Yeah, it's like
my hand automatically reaches for it's the default. Yeah, alright,
Well that's gonna do it for this episode, Matt. For
listeners who want show notes to some of the resources
that we mentioned in this episode, you can find those
(46:34):
up on our website at how to money dot com.
And maybe, like Leslie, you want to talk more about
money with your spouse, Well, here is an easy, surefire,
fun way to get them talking about money. Just grab
their phone of course, you know their you know their code,
Hop on there and go to their podcast wherever they
listen to podcast search how to Money and subscribe them
to the show. That's just a nice way to introduce
(46:57):
the conversation of personal finance and a fun, relatable way.
How did this podcast get into my rotation? Like, oh,
I don't know, must have been just some sort of
software Updade that that happened serendipity, Yeah, exactly now, But
if if you are listening to this podcast for the
first time. We would love it if you didn't subscribe
to that you didn't miss any future episodes, and yeah,
maybe it is worth considering getting someone you love to
(47:18):
subscribe to our show as well. We want everyone out
there to do smarter things with their money, and that's
what we strive for here on the show. That's why
we talk about personal finance every single episode. So thanks
in advance for that. The Joel. That's going to be
it for this episode. Until next time, Best Friends Out,
Best Friends Out,
Welcome to How the Money. I'm Joel and I am Matt.
Today we are answering your listener questions. That's right, Joel,
(00:25):
this is a listener question Monday episode. We've got four
questions plus one bonus one for for listeners. Today. We
have a listener who wants to make the most of
a mean stock investing mistake that you made. Listener wants
to know if if an advanced degree is actually going
to be worth it for them, and should a listener
rent or sell his home? Plus one other question and
(00:48):
then plus that one bonus one, like I says, so
we've got five total questions like we always do. Actually, okay,
So I'm wondering if that graduate degrees like advanced underwater
basket weaving, Because if that's the case, I'm gonna say, yes,
it's worth it. Underwater basket weaving probably doably not, but
underwater welding they pay big bucks. If that's what you do,
that's good business to get it. But man, I wanted
to share a story about an issue I had with
(01:10):
our van. First of all, let me point out that
I am not a car guy, right obviously, like neither
one of us are really car guys were more into
walking places and biking anyway to do it for for
cheaper than trying to be on occasion, whatever it takes man,
and so like, because I'm not a car guy, I'm
not like a detail like I don't when I washed
my car, which is obviously incredibly rare. I'm not like
they're with the toothbrush. I'm not like detailing it, making it,
(01:32):
you know, making it shine. Mine is not great looking
so recently, so I kind of put that out there
because then recently I was driving around in the van
and I noticed that it was like smelling really bad.
You you've ridden the van and you're like, oh, yeah,
what's that smelling? Like? You must you smell it? Like
what's going on? Um? And I thought maybe one of
the kids had left some food in the car. Did
a full like top to bottom search, couldn't find anything.
(01:54):
But during the search process, I realized that the floors
were kind of wet, and I was like, what is
going on? Uh? And then underneath the floormat, you know,
like you've got floor mats over like your entire vehicle.
It was acting as a vapor barrier essentially, and it
was there's water trapped between our mats uh, and it
was basically in the carpet, right, And so I did
some searching on lines, some searched on some YouTube videos,
and turns out it is because of my sunroof. Sunroosts
(02:16):
often will leak, and specifically if the drains uh in
the little tray that the sunroof sits in basically when
it's closed. If that tray, there are normally at least
two drains in there, and if they get clogged, uh,
it'll flood your car and it'll lead to water getting
your floorboards. This is a problem because obviously I don't
want to drive around in a stinky vehicle. But if
(02:37):
it were to affect any of my electrical systems, this
is gonna end up costing me even more money down
the road. Right, Like, I could ignore it, but that's
not the smart thing to do, right, Like, Hey, I
got a little heart pain. I'm just gonna ignore it
for right now because it'll probably clear off. Right, It's
like the shooting sensation up and down my arm, Like
just kind of shake it off. Not the best move. No,
don't do that. Go see a doctor, or in my case,
look on YouTube and figure out how to clean out
(02:59):
these drains. I've figured out how to take a little
a little bottle brush that we used to clean out
the West Seas, you know, his little baby bottle, his
old baby bottles or whatever. But I use that I
was able to clean it out. But here's the thing, man,
I did not know that the first of all, that
those drains can get clogged. And if you're like me,
in your in your park, your vehicle underneath a tree,
all the pollen junk that falls from the tree, it
turns into this like tree sludge, and it'll get in there,
(03:22):
it'll harden. And that's what specifically was causing the drains
and our sunroof to clock. And so I used to
be this guy who never paid much attention to any
detailing when it came to washing my car. But now
every time I washed the car, man, I'm gonna make
sure I pop up in the sunroof and wipe down
the sort of inside of the sunroofs surround to make
sure that no debris is getting down there in those drains,
(03:43):
because you don't want those to overflow. So, yeah, if
you have a sunroof, this may not be something you've
ever done before. But yeah, open that sunroof. Take a
look on the inside of that little area there between
like the headliner and the metal part of your car.
You'll see, you know, we're where all that dust and
all that debris can can get in there. Wipe that down.
Don't wipe the grease. You want to leave the grease
there that that's that's good for the sunroof to like
(04:05):
move on, you know, leave that there. But if you
see all like pollen or or dirt and debris, make
sure you clean that out there you go. This is
an argument for maintenance. It's not sexy, but it's something
that everyone needs to do. It's also an argument for
just researching when there's a problem, because that's what's again
what's so great about the internet, what's so great about
YouTube is that other people have had problems like yours, right,
(04:26):
Like my Honda Odyssey is, which his name Homer is.
Like when I started, did I say the name of mine?
Just Hall and Homer? Yeah, these are names that are
given to our vans by our listeners, right, and so
when I start mind it takes like three or four
seconds sometimes to to get going. And you've got an
older van, yeah, so yeah, I I by doing some research,
it looks like it's a faulty ignition relay, and it
(04:48):
looks like it's not a terribly difficult fix, and I've
got to do that in you know, the coming weeks.
But yeah, it's one of those things where I can
take that into a mechanic and just the diagnosis itself
could potentially cost me, you know, over a hundred dollars.
And I'm not saying there's not a place for mechanics.
I drive an older vehicle and I'm more than willing
to take it to a mechanic for lots of things.
But some of those things, like what you experience, like
when I'm experiencing, you know, they are easy enough, uh
(05:11):
to at least pinpoint the problem and then figure out
whether or not you're gonna be able to tackle it
on your own. And uh and in your case, yeah,
a little bottlebrush, Yeah, that was some like And once
I cleared it out, I got some hot water in
there and kind of poured it through and you can
literally see like or from my problem here, you can
see where it it drains out into the wheel wells.
And so at first it was totally like impacted, like
water wasn't flowing, but after I got to go him
(05:32):
and it felt so good just to see the water
like trickle through because it's design to kind of like
flow through the vehicle basically. But but yeah, hearing you
talk about your starter problem, it just made me think too,
like what if you could get a mechanic on the
phone and just be like, all right, listen, I'm gonna
do it now, like teledoct style. Yeah, but like a telemechanic,
like a telemech I don't know that because when you
actually physically take it in, the problem is never never
(05:53):
reveals itself the way you've been experienced. It's like, I
don't know, looks fine to me, No, I swear this
happens in my driveway, Like sure, sure it does. Yeah,
but yeah, if there's any mechanics out there who haven't
done that, that that might be a good way, because like
if they were able to diagnose it and they're like, yeah,
we can order that part, It's like, man, that just
saved me an entire trip. That inconvenience is oftentimes what
I'm trying to avoid at least, no doubt. All right,
(06:15):
let's move on, Matt. Let's get to the questions are
listening questions for this episode, but before that, we'll just
mention the beer. We're having a beer by World Work Sprewing.
It's a double dry Hopps I p a called Juicy Bits,
and so yeah, we'll give our thoughts on this beer
at the end of the episode, but for now, on
too listening questions. And if you are listening and you've
got a money question for Matt and I, we'd love
to take it on an upcoming episode. You can submit
(06:36):
that at how to money dot com slash ask their
simple instructions, You record a voice memo, then email it
over to us, and then we hopefully feature it here
like we're gonna do with this first question about how
we can make money less stressful in our lives. Hi, Mangel,
my name is Victoria and I'm currently living in Columbus, Ohio.
I've been through almost all of your episodes and I
would like to thank you so much for empowering me
(06:58):
on my financial journey. So my question to you is
how to make allocating my money less stressful. I'm good
at living within my budget and paying off all my bills, loans,
and debts on time, but it takes a lot of
planning each paycheck to make sure I don't accidentally overdrop
my checking account. I keep a low balance in there
after taking care of all my expenses, including sometimes paying
(07:19):
off my credit cards more than once a month. I
get paid by weekly every other Friday, and I think
one of the main problems is that my expenses lean
heavier in the beginning of the month with my rent payment.
It is also hard to decide when to transfer chunks
of money into my emergency funds, rough IRA or other
savings accounts. I do all of my payments manually right now,
(07:41):
I'm nervous that if I switch over to automatic payments
on everything, I'll accidentally overdrop my checking because I don't
have enough money at the time of the month depending
on what each payment is. In addition, I'm nervous that
if I have everything automated and not checking on my finances,
my spending may go arry and I'll slowly lose money
by not having to physically pay everything each month. I'd
(08:01):
really appreciate your feedback in tips on how to manage
my stress about my money allocations, keep up with providing
quality content, and stay safe. Alright, Victoria, this is a
great question Uh. And we actually we we talked about
money stress recently on back on episode three seventy one.
We kind of a positive spin on stress. We try
to at least yeah, because some stress can be useful, right.
(08:22):
It can lead to you getting organized with your money. Uh.
And folks are likely going to see higher levels of
performance because the goals that they may have set. But
of course, being stressed out over money consistently isn't good.
Of course, Um, it can potentially lead to pour money
habits in addition to just health and relational hardships that
(08:43):
you might experience because of a lack of money or
or poor money management. But the good news in your case,
Victoria is that it sounds like that you are being
very organized, right. It seems like you know exactly where
your money is going. You've got to handle on your expenses.
It's just that it is stressing you out. Uh. And
I think we might have a solution for you. Let's
talk about how we can help Victoria be less stressed
about our money. And it seems like the biggest source
(09:05):
of Victoria's anxiety here is that at least from where
we're sitting based on your question, based on listening to
a minute of you talking Victoria, you might be living
paycheck to paycheck right like, and if that's the case,
if your company didn't make payroll for some reason on Friday,
it sounds like you'd be in a really, really tough spot.
And so we would say it's really crucial to increase
(09:26):
the gap between what's incoming and what's outgoing. Right. So, yeah,
if you're worried about overdrafting your account, that means you
don't have quite enough money in there. So there are
really two ways that you can create more financial margin
in your life, right. You either make more money or
you spend less money. Yeh, those are the two levels
that you can pull. Yeah, it's not really all that
complex when it comes down to it. But one of
(09:47):
the things we wanted to mention is, and this doesn't
necessarily actually technically fall into either, but it's the first
obvious thing that stood out is that you mentioned that
you're contributing to your roth Ira. Normally, this is a
good thing, and Matt and I encourage people contributing to
roth iras it's very rare that you'll hear us say
don't do that or it's a bad idea. But we
would actually rather see you put less money right now
(10:07):
towards your investing for the time being, and more towards
savings until you can comfortably start contributing to that wrath again.
For you, increasing margin is the most important thing, and
investing can come just a little bit further down the road. Yeah,
over over a longer time horizon. We'd encourage you to
try and pull both of those levers right, either making
more or spending less in order to increase your financial margin.
(10:27):
But for now, simply putting your investments on hold like
that should allow you to immediately gain some traction, and
that's what we're looking for, uh in your case, and
we think that that should help reduce your stress levels
by being able to put some of those payments on
auto payment, because you'll know that you'll have enough to
cover them right um. And you know, even if you're
not set up on auto payments, just having enough money
(10:48):
in the bank will allow you to implement your own
personal systems for what bills you pay on what dates.
We don't want you to have to actively decide when
you're going to pay bills or when it is that
you're going to invest junk your money, And we want
that to be a little more passive, a little more automatic. Uh,
And even just a repeating monthly calendar reminders, say on
the third Friday of that month, can be a good
(11:10):
prompt for you to invest. That's a good way to
automate and just get it off your mind. But of course,
make sure that you don't do that until you have
that financial margins set up. But essentially, when you have
more margin in your life, that's gonna lead you to
be able to take advantage of more automation, which should
decrease the levels of stress that you're experiencing. And also,
you know, one other side thing, switch to a bank
that doesn't charge overdraft fees. Ally Bank is a bank
(11:33):
that recently did away with those completely. That way, if
it happens to be a crazy month and you maybe
have a few more expenses than normal and that bi
weekly check just hasn't been deposited yet, you're not gonna
incur those overdraft charges every single time. That's something that
we're glad to see Ally leading the way on. Yeah,
you know, those overdraft fees can be like the sort
of damocles hanging over your head and you're like, oh no,
(11:55):
like that if it. You know, if I make this
one spend, it could potentially result in a thirty charge,
and that's that's a lot of money, especially Yeah, if
you're living paycheck to paycheck. But yeah, Matt, I agree.
The more margin you have, the more you can automate.
Because you know that the money is in there, you
don't have to be worried about that. And so, yeah, Victoria,
it's not that we don't want you investing towards your retirement,
but we want to make sure that you're doing things
(12:16):
in the right order. And this is exactly actually what
we talked about when we introduced our money Gears episode
that was three or two beginning of this year. You
can either go listen to that one or you can
quickly read the high points on the start here page
of our website at how the Money dot com. But
the very first thing you should do is to make
sure that you have an emergency fund of at least
two thousand, four hundred and sixty seven dollars. It's a
(12:36):
very specific number. If you want to know more about that,
you know, if back and check that episode out. But
you did mention that you're putting money towards an emergency fund.
So that's awesome that you're prioritizing it at least in
some to some degree. But yeah, maybe a simple way
that you can use that to lessen stress is simply
by moving it over to your checking account instead of
having it in a separate savings account. Right that way
your emergency fund can act. Is this like cushion between
(12:58):
getting paid and some big expenses like a rent or
mortgage payment, you know, at least until you have enough
saved that you can transfer that over to savings and
you've got enough in both accounts. But really the big
goal right here is more financial margin, more liquid cash
sitting in your accounts so that you don't have to
be worried about any individual bill coming in. You want
to get to the point where you're using last month's
(13:19):
money to pay this month's bills. And once you get
to that point, that's when you have margin, and that's
when you can say, all right, you know what, I
think maybe I'm ready to get my toes back into
investing a little more regularly because I'm not stressed about
money every day or every week. And yeah, I mean,
I feel like Victoria can get there, and we'll get there.
It's just gonna take some intentionality right now and kind
of yeah, shifting some things around. Yeah, that's right, Victoria,
(13:41):
essentially willing to get you off of that knife's edge
where one misstep would would wreck your finances, and kind
of going back to what Joel was saying to about
making sure that you're doing these uh, these money moves
in the right order. This is something we've talked on
the show about before, but maybe it's worth mentioning again.
I have made this exact same mistake back when I
was first learning about personal finances. I had heard the
power of investing, and a friend of mine was like,
(14:02):
you've you've got to get that compounding interest working in
your favor, and I said, yeah, you're right. So I
dumped a ton of money into my roth Ira a
before my personal finances were in good order, and it
turns out that I needed that money a few months later. Uh.
In taking money out of a volatile market just after
a few months is not ideal, and so that's not
the situation that we want you in, Victoria, were you
(14:24):
to need that money, obviously we don't want you to
go in debt, but we also don't want you to
take money out of your wrath. I A, yeah, a
good money move isn't necessarily a good move. It's done
in the wrong order, and it's a bad money man,
and it's a bad money move even though it's a
lotable things that you're attempting to You'll get there soon.
You'll get there soon. So all right, we got more
questions to get to, including one about selling or renting
(14:47):
a home. Which one should this listener choose. We'll get
to that and more right up for this break. All right,
we are back and we're gonna take a question here
about some money relational advice. But before we get to
that one, let's take this question about whether this listener
(15:09):
should sell or rent his home. Let's speed from San Diego.
I'm currently in the Navy, and my wife and I
have owned a home here since two twelve. We're scheduled
transfer to Washington State in a few months and are
trying to decide whether to rent or sell before moving.
There's a chance we could come back to San Diego.
It would be nice to have a house, but also
(15:30):
a chance we would never come back. So we're concerned
about renting a place that we live so far away
from for possibly many years. Furthermore, the market in San
Diego is really hot right now, and if we listed,
we could get top dollar for our place, roughly two
hundred and fifty thousand dollars profit after selling or with
renting about a one thousand dollar profit per month. We
(15:53):
have considered a property manager if we rent, because we
were unexperienced, but have a lot of family in the
area that would be willing to look after the place
at no costs. If we did rented ourselves. We would
love some advice from you find folks about if we
should rent or sell to help make our decision a
little bit easier. Thanks for all you do, and I
(16:13):
can't wait to hear from you. PS. What is your
favorite double I p A? All right, Matt Pete stuff
is question there? What's your favorite double I PA. That's
a difficult one. That, yeah, that is tough. I mean
anything that's double dry hopped. And so I'm actually quite
fond of the beer that we're currently drinking, but I'm
thinking of Burial. They've got a lot of double dry
hop double I p A s Topath they make some
(16:35):
really solid ones as well, But I mean, I know
it's it's tough to narrow it down to a particular
beer because a lot of them are similar. There's different
breweries that make just really high caliber uh double I
PA s. But I will narrow that down to double
dry hops I P A s specifically, those are my
jam Here we go, all right, I'm with you on that. Yeah,
they've said the most like visceral flavor profile. Uh, let's
(16:59):
get to pezze actual question. All right, let's talk about housing.
And normally, Pete, we would tell you to sell when
you're in the military and you're moving, because becoming a
default long distance landlord is not really ideal. That there's
a lot of potential pitfalls, there's a lot of downsides
to that. But the fact that you might move back,
I would say it's one check mark at least in
favor of potentially holding onto that home. You know, having
(17:22):
family in the area is another positive in favor of
keeping at home. One it means you're more likely to
move back there, and too, it means you might have
some help looking after it. But ultimately, Matt and I
would say there's just too many X factors to make
keeping this house a really great decision for you. Yeah,
too many unknown variables and So Pete, since it sounds
like this would be your first rental property and you're
(17:42):
gonna be living hundreds of miles away, it sounds like
getting a property manager would actually make the most sense
for you in order for this to be successful. Yeah,
you did mention having family in town, and while that's
you know, that's good that they'd be able to keep
an eye on the place. Like I wouldn't actually want
any family members managing a property unless that was their job,
or unless they had experience maybe with their own rentals.
(18:03):
I think having a family member that has zero experience
with tenants like that kind of sounds like a recipe
for disaster. Yeah, they get the call or the email
and they're like, I don't know, like we'll do it,
we'll fix it. And it's just like, oh, actually, no,
you know, we're not supposed to fix that, like that's
their fault or whatever the situation might be. You want
to have somebody who knows what they're doing on the
other end of those calls from your tenants. That's when
(18:24):
having a property manager makes sense. But hiring a property manager,
of course, is going to eat into that monthly cash
flow from the property. Typically that is all or half
of the first month's rent and then ten of the
monthly rent moving forward. And so if you really want
to maintain that property, if you want to keep it
because there's a good chance you'll be moving back, that
(18:44):
would be the route to go. But otherwise that's a
really steep cost to maintain something that maybe you don't
even really care about all that much. Yeah, I agree.
I think that Pete needs to be actually pretty certain
that he's going to move back, and then he loves
his house enough that he wants to move back into
that particular home. In order to rent this property out,
the desire has to be not necessarily to make money
as a landlord, but to keep the house that you
(19:06):
want to live in again a few years down the road. Yeah,
if you know the neighborhood, you have neighbors who are
good friends there, and you're like, okay, I would want
to move right back to this exact spot, you know,
in a couple of years, and it's likely right Yeah, yeah,
and so so yeah, what you just mentioned though, Matt,
that's one strike. He can running it out right, having
to hire a property manager and money, it's gonna cost money.
Another reason is that Pete's home has increased in value
(19:28):
a lot, right, and so the fact that this home
is probably an expensive home makes it unlikely that it's
gonna be an awesome rental property. To write that, the
numbers often work better for landlords who own and lease
hound homes that are on the less expensive side. Right, Like,
typically numbers work out better on a rental home they
cost two hundred thousand dollars, then a rental home they
(19:49):
cost five thousand dollars, right, and even better if it
costs even less than two. Yeah, if if somehow you
can buy a house that costs twenty and you can
run it out, you know, for twelve hundred buck, that's
when the numbers are great. That's the rule of thumb.
We're trying to hit the one percent rule of them,
although much harder to come by these days. So, yeah,
if you're if your home has gained that much value,
it could be worth like over half a million dollars,
(20:11):
or maybe even close to three quarters of a million dollars,
And in that case, it's probably not going to make
for a great rental property. Expensive homes just aren't usually
ideal for renting because of that weaker profit margin. That's right,
And Pete, you know, let's talk about the other probably
biggest downside to keeping this home as a rental. You
mentioned that your home has already skyrocketed in value, right like,
you're looking at two hundred fifty thousand dollars in profit.
(20:33):
That's pretty incredible. Congrats. And if you rent it out
for several years after that and then you decide to
sell it, you're gonna be subject to paying capital gains
tax on the entire value increase of the home. And
so were you to sell now, that will allow you
to pocket the gains tax free, since you've occupied it
as your primary residents at least two of the past
five years, and so you don't want to let taxes
(20:55):
completely drive your decision. But in this case, you know,
that's a pretty good reason to sell if you're not
gung ho on becoming a landlord as well. I guess alternatively,
if you are pretty interested in kind of running the
property out, give it a shot, maybe give it a
couple of years. But you need to make that decision
before you get to that third year, because if you're
kind of on defense about being a landlord, you want
(21:16):
to make sure that you sell it within that third year.
That way, you're still able to not pay any capital
gains tax. Uh And in the meantime too, I guess
in those two or three years, hopefully you will have
seen the value of the home continue to rise, although
that's not necessarily guaranteed. Yeah, man, I agree. I think
maybe giving it a two year trial is kind of
the perfect route to go if Pete thinks he's going
to move back into the home, uh and and really
(21:38):
desires to move back there too, because yeah, you can
see how's it going, like, is this long distance landlording
thing working out well for me? Is it profitable? And
do we actually think that we're gonna move back into
the area at some point in two years? Is that
perfect timeline? Because if you're like, you know, it looks
like we're not moving back and it's not really ideal,
then you can pull the trigger and sell and you
can still avoid the massive tax us. You know. That's
(22:00):
that's the big thing you want to make sure you avoid. Yeah,
that that timeline, that that clock's ticken once you move
out of the house. So I just got to be
cognizant of that. But Pete, best of luck to you,
I guess I don't know if we have gave you
like a firm decision one way or the other, but yeah,
the trial period might make the most sense. But I
guess one other little con to that would be when
you're living in it, you can present it in the
perfect way to buyers. And then there's a lot of
(22:21):
work that to staging, getting the home ready after you've
had other tenants in there. So there's a lot of
variables here. But Pete, we trust you to make the
best decision with kind of all the information we've laid out,
and and best of luck to you and your fam.
All right, Matt, let's get to the next question. This
one is about having difficult money conversations with your partner. Hi, guys,
this is Leslie calling from Leavenworth, Kansas with a relational
(22:45):
money question. I appreciate how you guys understand that that's
an important part of personal finance, so I'd love to
hear what you have to say. Recently, I told my
husband that I thought it was time for us to
open a taxable brokerage account. Were in money gear seven.
He really wasn't very enthusiastic about the idea, and when
I asked him why, he made some vague comments about
(23:09):
disliking the economic system. We're not wanting to be part
of this system. We agreed to sit down at a
later point when neither one of us is stressed or
holding a baby and talk about things more. But I'm
really not sure what to ask him during that conversation.
I know this is a big picture conversation, UM, more
about the why behind your money? Um. But if I
(23:32):
just sit down and say what's the why behind your money,
I'm not going to get anywhere. My husband is really
responsible with his money, but he hates talking about it
or even really thinking about it, and I just want
to see if we can get on the same page
better or at least understand where he's coming from. So
I'd love to get your tips on what questions to
ask so that we can really get to understanding each
(23:56):
other better. Thanks guys. All right, Leslie, congrats on being
in money Gear number seven. That is a huge accomplishment,
So congrats there, and and yes, uh definitely how this
convo when you're not in a stressful situation, you know
the gosh that the setting matters a whole lot, and
being able to have just a reasonable conversation with all
your emotions flaring. I'll be honest. You know, I love
(24:17):
my kids, but it's pretty much impossible for Kate and
I to have a conversation, a healthy conversation about anything
important when all the kiddos are awake, running around, pulling
on us, interrupting. That's something that we're working on. It's
like a mommy and daddy talking and then you cannot
interrupt unless like something's on fire, Dada, where's my water?
And so yeah, post bedtime or date night is definitely
(24:39):
when we prioritize having those conversations, you know, look to
find ways to make those conversations fun. It sounds like
he does not like talking about money, and so if
he likes craft beer, maybe crack open a bottle of
something that really taste you. Or if he likes being outdoors,
try to incorporate that with his money conversations. But two
different ways, you can make it as enjoyable as possible.
You give him in his comfort zone, and that that's
(25:00):
definitely a good way to approach it. I'd also Leslie,
come at this conversation with some curiosity because, honestly, like,
based on what you said, I'm pretty curious now like,
I kind of want to talk to him and you know,
get his ideas, Like what is it about the system
that he dislikes, or is it like the idea of
capitalism in general, or is it just like more like
the consumerism that's running up in our country. Because yeah,
(25:22):
and Matt and I were fans of the free market
economy that we live in, But that doesn't mean that
there aren't issues and concerns. And so yeah, those pop
up and they can maybe change how we feel about
the moves that we're making with our money. But yeah,
there there are healthy ways to invest without feeling like
you're forced to support companies that you have a real
issue with as well. So that's kind of where maybe
those curious questions can kind of bring forth maybe some
(25:43):
of those bigger things that he's feeling. Um, and yeah,
when when it comes down to it, that's a big
reason why something like E s G investing has become
so big over the last five years. Those are the
funds that prioritize investing in a socially responsible way environmental, social,
and governance concerns. And yeah, now there are reasonably inexpensive
funds that allow you to invest in that way. So
it's like if that is the reason, And again, it's
(26:04):
hard to know, right until you dig in a little
bit more and ask him some of those curious questions.
But yeah, it could be something as simple as that,
what like, well, some of my money that I'm investing
is going to these companies that are doing things that
I don't like. And it's like, well, actually there's ways
around that, now, So yeah, there there might be easy
solutions to some of the things that he's feeling. It
could just be a nuts and bolts kind of conversation, right.
But then Leslie, you know, since both of you have
(26:26):
done so well with your money, you know, maybe he's
hoping to invest a little less because he wants to
enjoy some of the fruits of your mutual labor now, right,
And so focusing that conversation on the future that the
money that you invest today, that that will be funding,
is going to be a really important aspect of that conversation.
I don't think most folks naturally gravitate towards investing huge
loads of money for the future. Uh, And it often
(26:48):
doesn't help even when we're told to do so, because
it's just like the quote unquote smart thing to do.
It's like that that busy work when you were in
school and you're like, you should just do this because
you should do this because there's just twenty is left
in the period, okay, and we're not going to play. Yeah, yeah,
we need more than that. We need a larger goal.
And so making sure that it's included in this conversation.
These larger goals could really help you, guys to dream
(27:10):
together about the future in a positive way. It can
make that decision to invest feel like something that you're
doing on purpose instead of that you're just doing the
responsible thing because you're supposed to. You want to find
ways to link that money that you're sacking away to
whatever future goals that you both are striving after. Yeah,
I feel like on purpose is just the biggest two
words there for every investor, for everybody handling their personal finances, right,
(27:34):
having that why behind you really helps fuel you in
the right direction. And so what that looks like is
is to make those goals as tangible as possible. Right,
Like you mentioned asking him what this big why behind
his money? Uh, it might be too grand of a
question to ask initially, pretty like it's pretty nebulous. Why
behind your money, it's like, what do you mean? And
unless you've listened to that episode, unless you've heard us
(27:55):
talk about it, I think a lot of folks are
probably like, huh like that. They just kinda like stare
at you with blank eis. So you gotta ask like
smaller questions to kind of pinpoint that why right you
kind of kind of drive the conversation towards that. And
so instead of asking him that, maybe ask him what
he like his ideal calendar to look like, get practical
about it. What do you want? What do you want
your weeks look like? What do you want your weekends
to look like? Or like even just your mornings. Do
(28:17):
you do you want do you want less work in
your life? Do you want more uh time to go
for hikes or bike rides or what like? What is
it that's kind of motivating you? And then find the
way that the money intersects that, right, because like investing
so that we can have financial freedom, it sounds kind
of boring and it sounds kind of lifeless. And so
you have to bring life up to that in your
(28:37):
own marriage, in your own personal life, because investing so
that in the future you can achieve those goals. You
can travel abroad with your greate kids for you know,
weeks at a time, take a sabbatical or so that
you can even do something like transitioning to a lower
paying but more fulfilling career that is less demanding. Like
those are the kinds of discussions that are going to
add some color to that conversation. It's less about like, well,
(28:58):
when do we want to achieve financially dependence, because that's
a boring conversation that I don't ever want to have
with my wife. Um, but yeah, talking about those goals
that we have the more exciting things to where we're
investing for something specific that's going to make our lives
better and achieve some of those bigger goals that we
have for ourselves, Like those are the exciting things to
talk about. Absolutely, and maybe Leslie too, Like for him,
maybe it's about like maybe he feels slightly guilty for
(29:21):
the success that you have had, and so maybe what
that means is giving more of your money away, Like
maybe there's a place for that charitable giving, And so
through your conversations that you're gonna have with them, hopefully
you can kind of get to the root of what
it is that he wants his life and he wants
y'all's life to look like as a couple, as a
family in the future. And so best of luck with
this conversation, and we hope you enjoy it, you know,
like have fun as you talk about your future together.
(29:43):
Like this is that should be inspirational. It shouldn't feel
like homework. It should more feel like like you want
a prize. And now you're going to decide which prize
you're gonna pick, because that's what it is that you're
gonna be seeking after. But but also obviously you've got
your own views and your own goals, but you know,
be curious about his point of view as well. And
you know, either route you take your family is gonna
be fine because it sounds like you've been making really
(30:03):
smart money decisions with your money for a long time.
Now you're on Money Geared number seven. We're really proud
of y'all, And uh, yeah, I hope this is something
that you and your husband are able to figure out soon.
And yeah, sometimes just acknowledging that realizing that your options
are pretty wide open because you've handled money well for
so long can really help like ease the stress of
that conversation too. It's like, hey, we actually have a
(30:25):
lot of options here. Just acknowledging those options even at
the beginning of the conversation and the success you've had
I think can really help kick start that conversation in
a good way to Absolutely so, we are going to
take a quick break. But after that we've got our
last two questions. We're gonna get to that question about
making the most of that big investing mistake, specifically when
it comes to cryptocurrencies and meme stocks. We're gonna get
(30:46):
to that one plus one other right after this break.
All right, we're back in Matt. It's now im time
to talk about what do you do after you've made
an investing screw up. We've got a listener who did
that very thing, and he's got some questions about how
(31:07):
to rebound. Well, let's get to that now. Hey, Joelan Matt,
I take it from Nebraska here, but you can help
me make the best of a terrible financial mistake. For
some background, I decided to quit my job and sell
my house in early to start my own project. In
March of invested about seven came bitcoin when it was
in a slump, and I didn't really think about it much.
(31:28):
By the end of January one, though, I had a
ground about thirty K. This is when I done goofed
I moved all my big on fun money into game
Stop and well you know how that ended. Ask about
twenty K of my investment. Well, I'm not destitute. I
still have a nice savings account, twenty kan stock options
and up for one K in touch, and I decided
(31:50):
to work with my parents to make some exture money
to can be going for a while longer. Is there
anything I can do to make the best out of
my loss, whether through actors or something else. I wish
I could have been listening to you guys earlier this
year and maybe avoid at all of this. Thank you,
all right, Matt. First things first, when it comes to
editor's question, I have to I have to say to
(32:11):
Edgar stop beating yourself up, man, because I feel like
that's probably the worst thing you can do after you've
made a mistake, is just to replay it over and
over in your head, right, like just giving yourself crap
for for having made a mistake. Because we have all
made mistakes, and the key is learning from that mistake
and not letting it defind you. It actually makes me
think of a recent low Key episode where he had
(32:32):
to relive this bad decision that he made over and over.
Not unlike what you were just saying, Uh, Edgar, don't
be like low Key in this case. But the other
thing here to make sure that you're doing is to
just make sure that you learn from this experience, right,
like it sounds like you have. But investing in the
hyped up cryptocurrencies that are the latest and greatest out
there are the different meme stocks of the moment can
(32:54):
have real consequences. The different headlines that you read will
make it seem like a bunch of folks are getting
rich and that you're the only one sitting out on
the sidelines. But that's just not true. Uh. And so
we want you to do whatever it takes to turn
off the different noisy inputs, you know, like the different
subredits that might be encouraging you to invest in something
just because a small group of folks have deemed it
(33:15):
to be the stock of the moment. This is all
what we're gonna throw our collective weight behind, diamond hands
to the moon, whatever terminology they use, I don't know,
because we don't Joel and I. We're not into that,
but that's what folks are doing, and that type of
investing is pure speculation. Yeah, and all the headlines we
see often there's a profile of somebody that has made
out like a bandit, But there's just so many more
people like you, Egger in your position who end up
(33:38):
being hurt in the aftermath of something like investing in
a meme stock. So yeah, but but how can you
potentially turn this mistake into your advantage besides you just
learning from it? Well, yeah, I think one it's it's
important to transition from the idea the way you're kind
of training stocks now, which we would say is more speculative,
and get more comfortable with the idea of getting rich slow. Right,
(34:00):
that's the ulcer free way to invent, which you know
that I don't personally want to have like health problems
due to the way I'm investing. I don't want to
be super stressed out about I don't have to pay
for it with your body. I was I was moving
on stumps around the other day and I kind of
stumbled and I jammed my finger. It's still like, look
how fat and swollen it is. It's been like weeks,
that's not the kind of thing I want to deal
with anymore. In your twenties, that would have been the case. Yeah,
(34:23):
ways that would have bounced back. But now that I'm
in the thirties, I'm like, ouchy fothered me. Well. But yeah,
one other way for for for Edgar to make lemonade
that lemons here is to do some tax loss harvesting, Right, Edgar,
if you have other investments that have made a solid return, right,
you can sell both your winners and your losers in
the same calendar year, and that allows you to at
(34:43):
least offset some of the tax that you would have
paid from the winners if you were to sell them
in let's say, separate calendar years. So that's one thing
that you can do, one you know, tax move that
you can do that maybe at least lessons to blow
a little bit, that's right. Yeah, So Edgar, in your case,
it sounds like you head onto your bitcoin for less
than the year. If you purchased in March of sold
in January one, that's not twelve months, and so you're
(35:06):
realizing a short term capital gain. But then you bought
a m C and since you said that, you lost
twenty K. I'm guessing that you sold, which means that
you've realized a short term loss. And so though it
never feels good to lose money ever, right, you can
take maybe some solace in knowing that your gains and
your losses might effectively cancel each other out and you'll
likely have to pay the I R S very little
(35:27):
in taxes. But that being said, since we don't know
what your income is, do make sure that you can
sold short and long term capital gains rate charts, so
that way you know you're reporting the right numbers to
the I R S. Yeah, and moving forward to right,
we would suggest to everyone and to you also to
invest no more than five percent of your total investment
(35:47):
dollars in speculative assets like meme stocks and crypto. And actually, Matt,
I mean, I know you own a little crypto, but
for most folks zero percent is often better because that
means you're not obsessing over the movements of one or
two companies or one or two cryptocurrencies that you're invested in.
I personally don't want that stuff taking up any space
in my brain, and I know myself, I know if
(36:07):
I go down that rabbit hole of speculating even with
just this tiny portion of my money, even if really comparatively,
if I lost at all, it doesn't have much of
an impact on my life. I'll still be checking in
every day. And I think that's true for most people
who dabble in these things. They're really in it for
the day to day moments. They're less in it for
the decades, and so it does take up an inordinate
amount of brain space. Yeah, that's just that's just not
(36:29):
really for me, because I'd rather have mental bandwidth to
go towards the other most important things in life. And so, yeah,
investing in that way is just something that we would
suggest not doing much of, if any of it at all,
in the future. Stick more to Yeah, index funds, total
stock market index funds, or the SMP five index fund,
or a target date retirement fund. They're super boring, but
(36:51):
you're also not going to see the crazy ups and
downs and severe losses of money that that you've seen either. Yeah,
I will say, in defense of Edgar a little bit,
he did actually call or he called it his play
money basically, and so that like I find some encouragement
there knowing that. And he also did mention too he's
got that four O one K that he's not planning
on touching. So it makes it sound like he does
(37:11):
have a solid, massive portfolio and that this wasn't too
much money for him. But yeah, it was money maybe
that he was willing to risk. But even still, it's like,
I can't believe I lost it all right. You need
to be willing to invest money or to play around
with money that if you lost it all that it
wouldn't really bother you that much. It can't be money
that you're counting on. And it also helps too if
you're kind of like a robot like me, where you
(37:32):
can just like turn off your emotions and refused to
check where bitcoin and where ethereum is because I'm I mean,
I've got money in both of those and I literally
don't know where they are until sometimes you'll mention it. Joel,
You're like, oh, man, have you seen it dropped like
ten percent today? I'm like, oh, well, I didn't know that,
but thanks for telling me. I personally, I think I'm
more interested in your playing money portfolio than you are.
(37:54):
You care more about than I do. Whereas my approach,
I mean, I've got five percent of my overall portfolio
in UH in cryptocurrencies. But I'm not going to even
really sit down and look at the numbers UH for
a full year. And so if that sounds like something
that you're capable of doing, maybe that's an option for you.
But for everyone else, it definitely pays to know yourself
and it may not be something you want to dable
(38:15):
in at all if you know it's going to stress
you out. All right, let's get to our last question,
and this one is coming from a listener and they're
they're trying to decide if this extra degree, if it's
gonna be worth it. So let's hear that one. Now
they have the money. This is Matt and Rochester, New York.
I'm a big fan of the show. My wife is
looking to go back to school get her masters in
(38:35):
child development. It's going to be about fifty dollars, which
we're able to fund with the sale price of our house,
so no loans. That's good. My question is, how do
we know how long it's going to take to recoup
this fifty dollars with an increase in her salary. I
feel like maybe about two years ago, you had a
(38:56):
guest on a show and there's a score that was calculated.
I looked at the cost of education compared to the
increased cost and salary after that education is completed, and
it came up with a nice little score. Maybe you
can point me back in that direction, or do you
have any other resources I can take a look at. Thanks, Oh, Matt,
that's a good question. Hey, getting an advanced degree, when
(39:19):
does it payoff? Or when is it just too much
money you shouldn't be paying. That's a good question and
question that's not cheap. But also at the same time,
we're so glad, Matt that you're able to pay for
that education without taking on any additional debt. Right, this
is just such such a big accomplishment, So kudos to
both of you. Were big fans of got debt free education.
(39:41):
It's certainly not doable for everyone, but yeah, the fact
that you guys are going to be able to fully
funded with cash on hand is just a huge step
in the right direction because you're not paying additional interest
on that fifty and that's big exactly. Yeah, And before
we get even more serious with it, did it sound
like Matt like he he totally sounded like David Harbor
to me. Uh, from Trade of Things. Yeah, Jim Hopper's
(40:01):
his character and stener things. Didn't you kind of sound
like that he's got that uh that vibe going on? There?
Another Stranger Things season coming out this season four. It's
been on hold. I have no idea where it is,
but I need it in my life. But Matt, you know,
you're right. You know, we did talk about how to
assess the value of a college degree quite a while
back with Christie Sen. That was back in the episode
(40:22):
one eighteen. She totally rocks, and she's got this really
incredible story about growing up in poverty and China before
she immigrated to Canada. But she calls this her POT
score or her POT score, which stands for pay over tuition,
And Christie says that you take the median starting salary
that you can expect to earn above minimum wage, and
then divide it by the total tuition cost of the degree.
(40:44):
This gives you a single number that you can use
to rank whether a degree is worth the amount of
money that you'd be paying to get it. And so yeah,
if it takes you more than ten years to pay
back that advanced degree, we feel that it's it's likely
not worth it. Yeah, if you're gonna be able to
pay it back in two to three years, and that's
a that's a pretty good pot score. But yeah, if
the earnings, Yeah, if the earnings aren't going to justify
(41:06):
themselves and it's gonna take a decade or longer than
you're like, maybe I should rethink this, uh, this future course.
And you're also having to estimate what your future earnings
are going to be, Like what do most people in
this profession after they get this this degree, what are
they earning? And so, yeah, I think it is a
great formula. It's it's really crucial to know what your
wife's likely salary is going to be in the years
(41:27):
following getting that degree, because it gives you that information
that you need. Right, So if you're going into a
blind you're like, you have no idea, So you have
to do some research on on that front. But yeah,
advanced degrees can make a big difference in the income
that you're gonna be able to make, and it can
mean more income for decades and so especially Yeah, the
younger you are, the more use and all like that
you're going to get out of that advanced degree. So, uh,
(41:49):
we're actually having to do something similar because my wife
is planning to go back to school to get a
counseling degree. Yeah, and this is something that we've been
talking about like since before we even got married, and
now it's kind of like, all right, why why have
we been waiting this long? Let's do it. And so
it's actually going to happen. And it's a bit harder
for us to figure out because she doesn't have a
job currently where she's earning an income. Um, so we're
(42:11):
kind of saying, like, well, what would you be making
right now, and what you know, will you be making
after this, you know, after you've learned this degree. But yeah,
we're kind of comparing it to like the job that
she had before we had kids. And yeah, it looks
like comparatively that this degree will pay off in four
or so years. But it's also crucial to note that
the different careers provide different fulfillment for all of us
to write, like for our family, even if it took
(42:33):
longer to make money back on that degree, it would
be worth it because my wife, she's basically born to
be a counselor, Like, she's really good at it, she
loves it. And this line of work is going to
be just incredibly fulfilling, And so sometimes it goes beyond
the dollars in the sense like, yeah, you want the
dollars and the sense to work out, but if you
have the money and you don't have to take on
debt to fund this, you do have at least a
little more freedom to say, well, how fulfilling is this
(42:55):
career path going to be? And even if the pot
score isn't the best, right, you can still just a
based on some of that other rationale. Yeah, yeah, so
that that pot score, the pot score, like it's really
great too when you're starting from scratch and you're considering
like multiple different degrees that have wildly different costs and
starting salaries as well. But you know, when you already
have a path forward that you really want to pursue,
(43:15):
we feel it's crucial to know how long that payback
of the degree is likely to take. And then as
a family, like you're just gonna have to decide yourselves,
you know, whether or not this makes sense as you
take into account all the different goals and the things
that you'll have in mind, you know, because yeah, like
like in Joel's example here with his wife that counseling
degree is going to mean a lot to Emily. But
if there's someone out there considering that same degree and
(43:36):
they don't really care what it is they're pursuing, well,
then in that case, it would come down more to
the numbers than anything else, because it's not something that
they're going to be gaining personal fulfillment from if they're
not really interested in the self development that they're going
to be gaining with that as well. So there are
a lot of different factors at play here. You've got
to keep all of those things in mind. We wish
you the best of luck in making this decision. Matts.
(43:57):
The numbers are important, but it's not always about the numbers,
no doubt, and having the cash on hand to pay
for it definitely de stresses the choice a little bit.
Right the decision. It makes it a little easier to
kind of pursue what you want when you can do
it without taking on debt. Right it gives you the
freedom to say, I'm making a choice for myself, and
hopefully it also that that choice that's fulfilling also ends
(44:19):
up becoming more lucrative at the same time. Absolutely, yeah,
what if Emily was like Hey, let's I really want
to take out a parent plus loan for that counseling theory, Well,
that would be for a child, And like, yeah, I
guess you know. Maybe, Well no, because even when our
kids are older, if they want that, we'll find another
way to pay for a parent plus are the worst?
You don't want to do that? No, all right, let's
get back to the beer that we had on this episode, Matt.
(44:40):
This was El Dorado Double Dry Hawks Juicy Bits from
World Works Brewing Company. This is a brewery out of
Colorado that just started distributing here in Atlanta. So I
picked these up at our favorite local bottle shop. What
was your take on this? I p A man, so
stinking good. We've actually had sort of had one of
their beers before because they've done a collaboration with one
of our favorite local brewers here, Money Night Brewing. But
(45:03):
is there a way to describe a beer both as
juicy but also dry, because I feel like that's what's
going on here because they've got the double dry hopped
action going on, and so like, I don't people are
gonna just be bored of us talking about double dry hops.
I p a s. But they're so stinking good. They've
got that bitter, kind of blue cheesy note from the hops,
but at the same time, just the kind of citrus, juicy,
(45:26):
lushness that you get from this beer at the same
time is just so good. I'm a huge fan of
this beer and if you can get your hands on it,
I would totally recommend it. Yeah, I feel like the
aftertaste is incredible. This this beer is like a little pungent,
but in a good way, and I feel like like
a wash cloth that's soaking up some water. That's why
my tongue feels this beer. It feels like it's like
infusing my tongue and coming with the beer. Yeah, I
(45:50):
guess one with the juicy bits turning into that beer.
Tongue is just a juicy bit, But that's it begins
to feel like after a while drinking this beer. Absolutely,
it's just kind of like that concentrated So yeah, I
liked it a lot and look forward to hopefully getting
more World Works beers on the shelves here in Atlanta,
And I'm sure our listeners are ready to hear us
get different types of beers in our beer cooler down
(46:13):
here in the podcast studio. Maybe we'll try to include
some of the different varieties of beers that are out there. Um,
I feel like we tried to mix it up, but
it's also hard not to pick up a good looking
double dry hop I p a right, Yeah, it's like
my hand automatically reaches for it's the default. Yeah, alright,
Well that's gonna do it for this episode, Matt. For
listeners who want show notes to some of the resources
that we mentioned in this episode, you can find those
(46:34):
up on our website at how to money dot com.
And maybe, like Leslie, you want to talk more about
money with your spouse, Well, here is an easy, surefire,
fun way to get them talking about money. Just grab
their phone of course, you know their you know their code,
Hop on there and go to their podcast wherever they
listen to podcast search how to Money and subscribe them
to the show. That's just a nice way to introduce
(46:57):
the conversation of personal finance and a fun, relatable way.
How did this podcast get into my rotation? Like, oh,
I don't know, must have been just some sort of
software Updade that that happened serendipity, Yeah, exactly now, But
if if you are listening to this podcast for the
first time. We would love it if you didn't subscribe
to that you didn't miss any future episodes, and yeah,
maybe it is worth considering getting someone you love to
(47:18):
subscribe to our show as well. We want everyone out
there to do smarter things with their money, and that's
what we strive for here on the show. That's why
we talk about personal finance every single episode. So thanks
in advance for that. The Joel. That's going to be
it for this episode. Until next time, Best Friends Out,
Best Friends Out,
Hosts And Creators
Joel Larsgaard
Matthew Altmix
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Ding dong! Join your culture consultants, Matt Rogers and Bowen Yang, on an unforgettable journey into the beating heart of CULTURE. Alongside sizzling special guests, they GET INTO the hottest pop-culture moments of the day and the formative cultural experiences that turned them into Culturistas. Produced by the Big Money Players Network and iHeartRadio.
Crime Junkie
Does hearing about a true crime case always leave you scouring the internet for the truth behind the story? Dive into your next mystery with Crime Junkie. Every Monday, join your host Ashley Flowers as she unravels all the details of infamous and underreported true crime cases with her best friend Brit Prawat. From cold cases to missing persons and heroes in our community who seek justice, Crime Junkie is your destination for theories and stories you won’t hear anywhere else. Whether you're a seasoned true crime enthusiast or new to the genre, you'll find yourself on the edge of your seat awaiting a new episode every Monday. If you can never get enough true crime... Congratulations, you’ve found your people. Follow to join a community of Crime Junkies! Crime Junkie is presented by Audiochuck Media Company.
The Brothers Ortiz
The Brothers Ortiz is the story of two brothers–both successful, but in very different ways. Gabe Ortiz becomes a third-highest ranking officer in all of Texas while his younger brother Larry climbs the ranks in Puro Tango Blast, a notorious Texas Prison gang. Gabe doesn’t know all the details of his brother’s nefarious dealings, and he’s made a point not to ask, to protect their relationship. But when Larry is murdered during a home invasion in a rented beach house, Gabe has no choice but to look into what happened that night. To solve Larry’s murder, Gabe, and the whole Ortiz family, must ask each other tough questions.