Ask HTM - Inflating the 25x Rule, Online Car Refinancing, & Affordable ADUs #727 - How to Money

Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Welcome to Head of Money. I'm Joel, I'm Matt, and
today we're answering your listener questions.

Speaker 2 (00:24):
That is right, it's Monday. We've got listener questions to
get to. Including there is one listener and she's asking
about the twenty five X rule, the twenty five times
your annual expenses rule, whether or not it's something we
still like, and in particular the impact of inflation on the.

Speaker 3 (00:41):
Twenty five X rule. We'll get to that question.

Speaker 2 (00:43):
Another listener is wondering whether or not she should refy
her car loan with an online company. She's come across
a couple of them that were offering really competitive rates.

Speaker 3 (00:52):
We'll get to that.

Speaker 2 (00:53):
Plus, another listener is wondering if he should finance an ADU,
an accessory dwelling unit. He's looking, I'm looking to do
some house hacking. By the way, have you noticed the
right down the street from us, there's like they're building
an adu. It's like a little carriage of.

Speaker 3 (01:08):
Oh yeah, in the back, I think it's huge. It's
a big one.

Speaker 2 (01:10):
Like initially it looked like it was just going to
be a small garage, but I mean two stories, certainly
one garage door opening, and then it's a house. It's
like a twenty five hundred square foot house they're building.

Speaker 1 (01:22):
Other building or usually what like five six hundred square
feet maybe seven hundred. This one might be even bigger. Ye,
I mean, yeah, I'm depending on how much that I
think looks awesome. They've dedicated to garage space. I guess, right, yeah, yeah.

Speaker 2 (01:34):
Just I guess that's something King I've been talking about
recently too, because like we're in a four bedroom house
and there's six of us, so like we know, like
at some point it's not that we need six bedrooms,
but five would be great, you know for the girls,
a couple of girls to not have to share a room.
We're trying to man, we're starting.

Speaker 3 (01:49):
To wrestle with that. We're trying to figure leaning in
that little house on the prairie lifestyle. Man, it's not
like as.

Speaker 2 (01:53):
The kids get more stuff, it's it's a discussion that
we're having that's also.

Speaker 3 (01:57):
Getting older and more independent, want more of their own space.

Speaker 2 (02:00):
With their own space, they're into different like where are
they gonna practice piano? Like the ability for them to
do some of their own things doesn't it doesn't always
take place in like the public spaces, and I don't
know when I saw that. Literally right before we sit
down right here to record, I walked past it, and
I was like, that thing is nice, just envisioning what
we could do if we decided to build something like that.
But I got to think that that thing's going to

(02:21):
cost whoever, I don't know whoever's building nothing, Like what
do you think like one hundred and fifty easily, if
not two hundred K to basically build another house. Anyway, Tangent,
that's not.

Speaker 3 (02:31):
What we're talking.

Speaker 2 (02:32):
We're gonna talk about eightyus later in the episode, but
real quick, I wanted to share man that I just dropped.
Speaking of the all mixed family spending a lot of money,
I just dropped six hundred and fifteen bucks in order
to repair the van. It made me think a couple
of things. First of all, it may be glad, first
of all, that I had the cash on hand to

(02:52):
be able to pay for that, the ability to not
have to tap into your emergency fund, but to literally
draw on the savings bucket where I'm setting like literally
we set aside eighty bucks a month to cover this expense.

Speaker 3 (03:04):
Because these things come up right, not just.

Speaker 2 (03:06):
Your oil change or tires whenever that happens, but some
of this additional work that's going to be required. I
got a valve cover gasket plus an adjustment. Sounds like
a car part. Evidently it just helps the engine to
run smoother, and I will say it's much much quieter,
which is nice. But the second thing I wanted to
mention too, is that there might be some folks who
find themselves in a similar position and they're like, man,

(03:27):
that is so much money. Is it even worth it
to go ahead and do that? Maybe instead I should
just let's go buy a new car. Like, what's a
new car payment? Well, it's a lot more than well,
I guess it's not a lot more than six hundred
and fifty.

Speaker 3 (03:41):
I looked it up.

Speaker 2 (03:41):
It's seven hundred and twenty five dollars for a new car.
That's the average monthly car payment. That's average monthly payment
every single month. And so that is a ton of money.
And so resist the urge. I'm just putting this out there,
a little psa. Resist the urge to buy a new
car when you're facing when you're looking down the barrel
of some car maintenance shoes, take care of your car, right, Like,

(04:02):
go ahead and go in for that maintenance, because that
is what is going to allow you to continue to
drive that old car, like literally not even for just years,
but even for decades down the road.

Speaker 3 (04:11):
Yeah.

Speaker 1 (04:12):
The new to US minivan that we bought this year
after we got rear ended and the old minivan got totaled, well,
we had two big expenses that happened within the first
three four months of ownership.

Speaker 3 (04:23):
Had to get that AC topped off. Yeah.

Speaker 1 (04:25):
Well the AC, I forget it was like the basically
the compressor needed to be the actual unit.

Speaker 3 (04:29):
Yeah.

Speaker 1 (04:29):
So that was like eight hundred some dollars. And the
alternator crapped out on the way down to Florida. That
was another eight hundred and something dollars fixed, or it's
like seven whatever.

Speaker 3 (04:39):
And I'm like a.

Speaker 2 (04:40):
Lot of folks are saying, WHOA a lot of money, boys, Yeah,
you're dropping on your old crappy van, And it certainly is.

Speaker 3 (04:47):
It is a lot of money.

Speaker 1 (04:48):
And some of those things, Man, do I wish the
alternator had lasted longer? Sure, of course I do. But
these are the kind of things that come with owning
an older car, and and it maybe the expenses are harder.
I remember actually having a conversation with somebody about this
on Twitter now x I guess about kind of. She
was like, well, once I bought a new car, it
became easier to budget. And I get that it's easier
to budget, but it doesn't mean that you're going to

(05:09):
save money.

Speaker 2 (05:10):
It does not mean it's more affordable, because yeah, it's
easier because at the beginning you don't have any maintenance sure,
like twenty five thousand, So.

Speaker 1 (05:16):
Really it's just like it's whatever the car payment is
that I've taken out. It's that's the monthly expense, and they're.

Speaker 2 (05:22):
Like, I can then slowly start building up. That doesn't
mean it's more affordable.

Speaker 1 (05:25):
I like predictability, but I would rather save money and
have these less predictable expenses come up and just have
saved more to be ready for them to be able
to handle them.

Speaker 3 (05:34):
So absolutely I agree.

Speaker 1 (05:35):
When you see how much car payments are, how much
new cars cost, and how much interest rates are on
cars as well, which we're actually going to talk about
that in just a second with a finance a car.
But like you, when you take all those things into consideration,
I would say, yeah, keeping that used car Live makes
a whole lot of financial sense.

Speaker 3 (05:52):
Nice.

Speaker 2 (05:52):
All right, let's go ahead and introduce the beer that
you and I are going to enjoy during this episode.

Speaker 3 (05:56):
This is I guess it's a fest beer. This is
by Bold Monk Brewery. I guess what are they? They're
like a gastro pub or yeah, what do you call them?

Speaker 1 (06:06):
Yeah, Emily and I'll go there for date night sometimes
because not because of the beer is awesome.

Speaker 3 (06:10):
The beer is solid.

Speaker 1 (06:11):
This is actually one of my favorite We'll talk about
it later, but yeah, we picked this beer up while
we were there on a recent date night. Figure we
should have it on the show, so we'll get to
our thoughts on this one. Yeah, at the end of
the episode.

Speaker 3 (06:19):
It's a good spot.

Speaker 2 (06:20):
They had a Flanders Read the last time I went,
which is I think we've said this maybe a few
weeks ago, underrated that style of beer.

Speaker 3 (06:29):
I wish more breweries were making Flanders Read hard to find.
I love them. Yeah.

Speaker 1 (06:32):
Right, let's get to the first question that we have
for this episode. By the way, if you want to
submit a question we'd love to hear from, you, just
got to how to money dot com slash ask. Basically,
you're just recording a voice memo emailing.

Speaker 3 (06:41):
It over to us.

Speaker 1 (06:42):
We will hopefully take yours on the next Ask HTM episode.
But Matt, this first question is all about saving for
a retirement and following the right rule of thumb.

Speaker 4 (06:51):
Hi, Matt and Joel, this is Sarah in New Mexico.
I've been listening to How to Money for about two
years now, and I've learned so much from the two
of you.

Speaker 5 (06:59):
Thank you.

Speaker 6 (07:01):
My question is.

Speaker 4 (07:01):
About saving for retirement. I've heard you, guys and others
talk about the twenty five times rule, which states that
in order to estimate how much money you need to retire,
assuming you retire at the normal age in your early
to mid sixties, you multiply the annual amount you'll need
to live on by twenty five. I'm wondering whether or

(07:23):
not this formula takes inflation into account. So, for example,
if I expect to need seventy five thousand dollars a
year in retirement in today's currency, do I simply multiply
seventy five thousand by twenty five or do I need
to estimate what seventy five thousand dollars in today's money
will be equivalent to by the time I retire in

(07:46):
say twenty fifty or ten years into retirement in twenty sixty,
if the latter, do you have any recommended calculators or
tools for estimating inflation? Thanks for any insight you can
offer on this, and thank you for a podcast.

Speaker 1 (08:01):
Man, it almost sounds like we need to get Albert
Einstein involved in this based on all of the things
like this could be a complex financial mathematical formula.

Speaker 2 (08:10):
Kind of do it like beautiful mind style or write
it up on the up on the windows exactly. Well,
first off, let's explain what the twenty five times or
the twenty five X rule is.

Speaker 3 (08:19):
And first of all, it's more like.

Speaker 2 (08:20):
A like a helpful guidepost as opposed to a scientific
formula that Albert Einstein would be able to come up with.
And what makes it powerful is simply put, it's simplicity
because it can help you to quickly understand just the
ballpark nest egg that you're shooting for. And it specifically
relates what you need to save to your expenses instead

(08:42):
of your income, which we feel is a more accurate gauge.
Some folks are like, okay, well you need to base
how much you have in retirement based on how much
you're making, and we don't believe that to be true.

Speaker 3 (08:52):
In our case.

Speaker 2 (08:53):
It's not really about what you're making, it's about what
it is that it actually costs you to live spending. Yeah,
what you're spending, Yeah, exactly.

Speaker 1 (09:00):
It's a much more accurate gauge of what you need
to say if the twenty five actual is zeroing in
specifically on that. And that's why we think it's so
powerful and basically where it comes from. It comes from
this something called the Trinity Study, which calculated safe withdrawal
rates over the years. It was basically trying to figure
out how much you can take out of your portfolio
every year when you're no longer working, and then you know,

(09:20):
so that you don't run out of money right on
a thirty year timeline. I think, Matt, this was done
in the eighties when you and I we were probably
waddling around in diapers. But this still remains something that
people quote, that people look to well.

Speaker 2 (09:31):
And they updated it a few years ago to take
into account just recent changes, and it still holds, still holds.

Speaker 1 (09:37):
Yeah, And so they found that a four percent withdrawal
rate was incredibly safe, right, And in order to stick
to that four percent withdrawal rate, you'll need to save
up twenty five extra annual expenses. Right, So it makes sense.
And some folks they're more conservative or want to be
able to spend more in retirement, and some of those
folks aim for something like thirty three times their expenses.
That's kind of another figure you might see thrown around

(09:57):
for people who say I want to.

Speaker 3 (09:59):
Be fat, fire or whatever.

Speaker 1 (10:00):
I want more flexibility, more choice, more options. Well, that
is something you might see them a number you might
see them aiming for. It's really just an individual choice though.
But the twenty five X rule is a great rule
of thumb TELP. You kind of quickly evaluate your investments,
see where you stack up and where you're likely to
be once you get closer to that retirement age.

Speaker 3 (10:20):
That's right.

Speaker 2 (10:22):
But given it simplicity, which we think is a good
thing for what you would want to use us for, right,
just again just getting you in the ballpark. That being said,
because of its simplicity, it also kind of comes up
short when we're talking about specific retirement planning, which obviously
comes with so many other factors. For instance, the twenty
five X rule it does not take social Security into accounts,

(10:43):
or if you are planning to retire earlier beyond that
where you're mapping out the sixty five to ninety five timeframe,
it's not taking into account other income that you might
have in retirement like rental properties. Maybe you are one
of the rare breed left that where you're actually guaranteed
a pension when you retire. And actually one of the professors,

(11:03):
one of the folks who are part of that study
who came up with the four percent withdrawal rate.

Speaker 3 (11:08):
Says that it's actually too conservative.

Speaker 2 (11:10):
That he was saying that most folks could actually take
out something more like a four point eight percent and
this is in a like a worst case scenario and
still be okay. But then more recently, like morning Star,
which is a great resource that we like to often
refer to, they say that actually three point eight percent.

Speaker 1 (11:28):
That's actually the real safe With the under four percent,
some people say, ah, no, you take more seamless, but yeah,
who should we actually trust? These are like those nerdy discussions,
right that would happen on a college campus when you're
debating these that these these discussions are really they happen
in the nerdier realms of personal plans on sites like

(11:49):
morning Star with these pointy headed professors who were talking
about the safe withdrawal rates, and it's like, okay, so
it's somewhere in between the three point eight and four
percent range that you can safely withdraw well how much exactly? Well,
I mean that depends on a variety, like on the
ways that these things get run, And it's tough to
really zero in on perfection, right.

Speaker 2 (12:08):
And honestly, like you're not going to be able to
achieve perfection either because who knows what the future holes,
who knows what expenses you're going to be in and Curry,
who knows how it does he might even want to
change your lifestyle.

Speaker 1 (12:17):
Who knows how the US economy does over the next
twenty or thirty years? Like that's true, Does it does
it reflect the last twenty or thirty years? If so,
then you know, like you could.

Speaker 2 (12:27):
Probably we probably are sitting closer to that four point
eight right with withdrawal ray, But if it's yeah, like
maybe the previous thirty yeah maybe yeah, yeah, maybe three
point it's a little bit better of a place to
be in.

Speaker 1 (12:38):
Right, Yeah, So these are all kind of questions that
get tossed in there that don't have easy answers. And
so let's say maybe you'd be paying off your mortgage
right before you retire, you, well, your expenses are going
to go down, which means your twenty five X number
is is lower than it was while you were saving
up for retirement and still have that mortgage in your life.
And then let's say you actually get a pretty solid
Social Security check, right, and maybe you have a runal property, Well,

(13:00):
you don't necessarily need to accrue twenty five extra expenses.
Those people being conservative saving up thirty three x, Well,
you could be the opposite, right, because you have other
sources of income that will provide a lot of your
financial support for a lot of years to come. And plus,
like match just said, the four percent rule according to
you know, one of the guys who helped established it
is conservative, right, And so you don't want to count

(13:22):
your chickens before they hatch. But I would say checking
out SSA dot gov, the Social Security Administration's website that
has a really good retirement benefit estimator.

Speaker 3 (13:30):
Matt. I logged into Mind today just to kind.

Speaker 1 (13:32):
Of see how much am I likely to get in retirement,
and it tells you when you start taking your Social Security.

Speaker 3 (13:38):
Check what you're likely to get you're gonna share.

Speaker 1 (13:40):
I think it was like four grand a month, is
if I retired at the age of sixty seven, And
so being.

Speaker 2 (13:45):
Like right now, if you were to start, can you
start withdrawing on it at the rifle age of thirty eight? No, No,
I can't take it that.

Speaker 1 (13:51):
It's gonna be a while. It's gonna be a few
decades before I can tap into that. But then the
longer you wait to take Social Security, the mortal be
So it shows you that too, well, if you wait
till seventy you'll actually get this big of a check.

Speaker 3 (14:00):
But I'll say too real quick.

Speaker 2 (14:03):
What's so great about that is you're actually so you
literally log into your account and it's looking at how
much you've actually paid in. This isn't just a simple calculator.
It's actually taking into your work history, your earnings yea,
and your.

Speaker 1 (14:13):
Work history as to how much and it says, hey,
here's how much you made last year, here's how much
you paid into the system, and so here's how much
you're going to get based on your working lifetime. And
so the longer you've been working, and the closer you
are to retirement, the more you can take those numbers
as gospel truth, the more accurate they're going to be. Right, So,
if you've been working for two years or twenty four, well,
there's not enough information right to really tell you how

(14:34):
much you're gonna have in retirement. Mine is somewhat accurate,
a lot more accurate than a twenty two to twenty
four year old. But someone who's in their late fifties
or sixties, it's gonna be pretty actively.

Speaker 2 (14:43):
Really dialed in. Yeah, yeah, exactly. Yeah, So that's what's
great about that resource. We'll link to that in the
show notes. But if you're looking for more general calculators,
Vanguard they've got a solid retirement calculator that we will
link to as well. Actually, Nerdwill they've got one that
includes a month distribution amount, and so what you could
do then is to subtract the amount that you're likely

(15:05):
to receive within so once you start drawing on social
Security or other income like that, like Brital home income
stuff like that.

Speaker 3 (15:12):
Exactly.

Speaker 2 (15:13):
But then Sarah, you also asked about estimating inflation, and
so that's kind of one of the I guess the
wild card here, and even the super nerds over at
the FED, they've been pretty off on that front, right,
Like they were pretty late and seeing that inflation wasn't
just transitory and that they did in fact need to
take action.

Speaker 1 (15:31):
Although that was like the word of the year, it
seemed like, and it was the word of the year
that didn't come to pass.

Speaker 2 (15:36):
But yeah, I like to play Devil's advocate. Depends on
what you mean by transitor exactly.

Speaker 3 (15:42):
What's the meaning?

Speaker 2 (15:42):
Is just a slight disagreement over the definition of that word,
because in the moment, oh my gosh, it felt like
inflation wasn't going away and we were seeing rates tick
up closer to ten percent. But you zoom out a
little bit, it's been you know, a couple of years,
and we're a far cry from ten percent.

Speaker 3 (15:57):
We're is it like something like three percent right now?
We're back in normal range.

Speaker 2 (16:01):
Yeah, and we're definitely getting getting closer. But I would
say so first of all, the Trinity study it does
take into account inflation, it takes into account increasing withdrawals
on that amount. But also I wouldn't worry too much
about actually trying to forecast inflation, because even though the
FED got it wrong when it came to determining, well,
how long is this inflation actually actually going to stick around,
they're pretty clear and they've been pretty firm with the

(16:25):
target rate of inflation at two percent, and so basically
they're taking steps to get us there. And how long
that takes I'm not totally sure, but I mean there
are still a couple of rate hikes planned for later
this year, and so from that standpoint, I personally am
not worried about inflation, runaway inflation and just all the
negative that's going to come with that.

Speaker 1 (16:44):
It's just that accurately predicting it is a difficult thing
to do. You just have to know that you're taking
care of in the scenario where you save up twenty
five x that does account for inflation, and so you
don't have to worry about like doing some extra mathematical calculations, Well,
what if inflation sticks in the five to six percent range,
do I need to save up even more? No, not
necessarily like that that that you don't need to be

(17:05):
thinking that way.

Speaker 2 (17:06):
I yeah, I personally am not worried about runaway inflation. Honestly,
like I would be shocked. If I mean basically, if
inflation doesn't come down to closer to two percent by
the I mean, we're going.

Speaker 3 (17:16):
To continue to see these these these rate.

Speaker 2 (17:17):
Hikes, and they may not nail it exactly. I think
it'll continue to oscillate because anytime you have a massive
shift to the economy like we saw three years ago,
where it's like, okay, let's completely turn off the economy.
This is literally something that has never been done before.
That all has an impact.

Speaker 3 (17:32):
Yeah, as finding equilibria, the rate of inflation.

Speaker 1 (17:34):
Finding equilibrium after kind of all the all the mess
and all the like attempts a second then yeah, of
getting us back on track, it's yeah, it takes time.
I think one last piece of advice for Sarah would
just be to say you can always pad a little
bit extra, right if that is a concern, but you
also might not need to. And I think there's the
one year syndrome one more year syndrome, and I don't
want Sarah to fall prey to that, being like, well,

(17:56):
I need I need thirty three X in addition to
social Security, in addition to this other income I have,
and I gotta wait till I pay down the mortgage.
Then you might find that you've exhausted some of those years,
those younger retirement years where you could have really enjoyed yourself,
and you kept working because you felt like you needed
to hit a number you didn't need to hit. So exactly,
Striking net balance is always hard to find, and it's

(18:16):
tough to start drawing down on your portfolio, and it's
tough to kind of you know at the same time
you're drawing down that your portfolio stop making income. But
at some point you got to be confident in knowing
what the numbers have proved over the decades that the
reality still holds. And I think you can feel comfortable
knowing that that's the case. Having twenty five X is
still a really good rule of thumb that's going to
make sense for most people.

Speaker 3 (18:37):
Totally.

Speaker 7 (18:37):
Yeah.

Speaker 2 (18:38):
And plus you can't count on your health lasting forever, right,
Like you said, like being able to take advantage of
from those earlier years of retirement, I think are it's
incredibly underrated in my opinion, but definitely something we want
you to consider, Sarah. We hope that gets you pointed
in the right direction.

Speaker 3 (18:53):
And Joel, one of the ways.

Speaker 2 (18:54):
That you can invest more for the future is by
doing a little thing.

Speaker 3 (18:58):
Called house hacking.

Speaker 2 (18:59):
We'll get to that question about the ADU, the accessory
dwelling unit right after this.

Speaker 1 (19:13):
All right, now, we got more money questions to get
to on this episode. We're going to talk about building
an ADU to bring in some extra income. And it
sounds like this listener is gonna be able to do
it on the cheap. I think he's gonna be able
to do this one really well. But we'll get to that.
But first, Matt, let's get to a question about how
to make a car loan less egregious.

Speaker 6 (19:31):
Hi, this is Deanna from Youngstown, Ohio. I'm wondering if
you've had any experience or knowledge of refinancing an auto
loan with rate Genius or auto Pay, both recommended on
credit Karma. I have a six point one percent rate
of interest at this point on my car, and I
have an eight hundred plus credit score. It says that

(19:52):
I can be approved for three point five percent. I'd
like to know what you think in your experiences with
this company.

Speaker 2 (19:58):
Thinks right, Deanna, Thank you for that question, and let's
go ahead and get to it. You are asking, well, specifically,
if if either of us have experience when it comes
to refinancing an auto loan, and specifically with those two
companies that you mentioned. And I'm proud to say that
neither of us have not trying to brag here or anything,

(20:19):
but we really don't like car loans. And the more
often that you can save up and pay cash for
your ride as opposed to financing it, the wealthier you're
going to be in the long run. And that's not
just because of the fact that you're not paying any
interest to the banks right because you paid cash for
the car, but it's also due to the fact that
there is a behavioral shift that takes place when you

(20:41):
pay with cash right when you're financing. It's it's I
think it can be easy to think, well, how much
can I afford to pay a month, But when you're
cutting a massive check or you know, or you're transferring
thousands of dollars over, it's a little more painful. And
this is this is a good pain, Joel. This is
like the feeling the burn after the workout. This is
not the oh, I tweaked my back kind of pain.

Speaker 1 (21:02):
But like the good sort like you're feeling today. Yeah, no,
you're right, and I think I did something tho more. Yeah, good,
pain is what we want people to feel. There should
be some friction which causes you to change course or
to think twice.

Speaker 3 (21:12):
Ask yourself a question exactly.

Speaker 2 (21:14):
Yeah, it should push you to ask yourself like how
much do I need to pay for a car? Like
how little could I get away with paying? Where this car?
This automobile? Whatever, We'll get the job done. So Deanna,
just some thoughts on our approach to car buying before
we talk to your question. If it wasn't made clear enough.
We're talking about car repairs at the top of the episode.

(21:35):
But I will say, great job getting out there seeing
what better rates are being offered. Just the ability to
take a few steps, yeah, fill us some paperwork and
to drastically lower what you're paying every single month on
that car loan that.

Speaker 3 (21:47):
You already have. That is that's awesome. Yeah, that's fantastic.

Speaker 1 (21:50):
I mean I think seeking better terms on debt you've
already taken on is smart. Right, And this is whether
you're refinancing a mortgage, which no one's doing now because
rates are ridiculous, they're so high, or whether it was
refinancing student loans which no one's doing, of course, because
rates are so much higher. But if you got maybe
let's say your credit score wasn't the dumps we took
out the car loan, it was in the six hundreds,
and so you ended up paying a higher rate, and

(22:11):
now you've improved the score. Well, now you can shop
the market and find a better term, a better rate
on that auto loan or the same thing, Matt with
a balanced transfer on a credit card. That can make
sense for a whole lot of people who have the
discipline at the same time to say, you know what,
I'm going to take this eighteen month window in order
to pay off this credit card debt, and the zero
percent APR is going to help me pay down the

(22:34):
principle really quickly so that I don't have credit card
debt anymore. That is a smart way to use better
terms on debt totally. And a part of the reason
that you're able to score such an awesome quote is
that you've done a killer job with your finances, Dana.
Like an eight hundred plus credit score, that's a great
place to be, so good work there. Sounds like you've
really tended to that. If you're logging into credit card clearly,

(22:55):
Like you want to know the details, the finer points
of your credit score, that's a great site to kind
of check up and see what's going on behind just
the score so you can figure out how to improve it.
But you're asking about a couple of specific companies, Rate
Genius and auto Pay, and as far as we can tell,
they both seem solid, like both have been in business
for a number of years. So yeah, neither of them
are some fly by night startup right where they're likely

(23:17):
going to be gone tomorrow. They've got solid to great
reviews on the internet.

Speaker 5 (23:21):
Right.

Speaker 1 (23:22):
In particular, Rate Genius is accredited on the Better Business
Bureau website. But something to keep in mind, just because
they dangle a sweet rate out in front of you
when you initially click over, well, it doesn't necessarily mean
it's a rate that's going to end up being officially
offered to you once you fill out the application, right,
and especially given the rising interest rate environment we're in.
You might see a headline number on an advertisement or

(23:43):
on credit karma site and then you get over there
and they're like, yeah, I mean that's for this kind
of borrower with this if it's this particular mold you
meet a couple of the requirements, but actually you know
your rate's going to look like more more like seven
percent because you don't meet these other ones. And so
just be aware you might get frustrated because that might
be the case.

Speaker 3 (24:02):
Yeah.

Speaker 2 (24:03):
Well, and just given the environment too that we have
seen when it comes to rising interest rates, in particular
with car loans, like it may not even necessarily be
like a bait in the switch, because there's a decent
chance that rates have just simply increased since you saw
that whatever thing popped up that you saw. But and
then again, like joelse, not to mention like they're always
going to advertise the absolutely lowest rate that someone might

(24:26):
qualify for, and your credit score is great, but yeah,
maybe they don't like your debt to income ratio, they
don't like how much you're making, or maybe they don't
like how much other credit card debt you might have.
So with that mind, shopping around is definitely the path
that we would recommend, and not just with some of
these online companies that make it easy, but doing it
in person as well. Hopefully you're already a member at

(24:48):
your local credit union, but if not, now is a
great time to join, and they typically are going to
offer lower interest rates than banks because they're nonprofits, and
that means that they're literally owned and control by their members.
They're not seeking to maximize every single dollar. It also
means they're not going to pay out the highest rates
when it comes to what they're rewarding on their high

(25:09):
HEELD savings accounts. But there are fantastic places to go
when it comes to some of the different financing products
that you might find yourself in need of.

Speaker 1 (25:16):
Yeah, I think helocks and refinancing a car loan. Credit
unions are great places for both of those things. So yeah,
I definitely check that. Check a couple of credit unions
and you can lot of times they post their rates
on their website, so you can find the closest three
even if you're not a member yet. You can join
by putting twenty bucks in an account usually and then
guess what you have access to even five even five

(25:36):
bucks sometimes, Yeah, and then you have access to all
of the products that they offer, and so yeah, credit
union is a great place to go for that kind
of borrowing. And so yeah, while we don't have personal
experience with the specific companies you mentioned, they seem solid,
and we love that you're looking to snag yourself at
better rates where you're gonna be able to reduce the
amount you'll end up paying over the total life of
that car loan. I guess one other thing that cautioning against,

(25:58):
Matt would be to dramatically lengthen the length of that
car loan, right, So that would caution against Yeah, yeah,
we'd say get a better rate. But man, if you
can actually get a better rate and shorten the length
of that loan too, maybe you got four years left
on it and you can pay it you get it
paid off in two and a half, That would be
ideal because yeah, the less amount of time overall you

(26:20):
have a car payment in your life, the better, that's
for sure. But good luck the in a happy refinancing
and Matt. Let's get to our next question. This one
is about whether or not to pay cash or to
take out a loan to build an accessory dwelling unit.

Speaker 7 (26:33):
Hey guys, Israel here from Arizona. I have a question
regarding construction loans. I have a property that I would
like to build a guest house on and I'm wondering
if maybe taking on a construction loan would be beneficial
in any way. I have the funds to build the

(26:56):
guest house without the construction loan, and at this point
I'm thinking I'm budgeting at about one hundred thousand dollars
to build the guest house. Right now, that money is
sitting in a high yield savings account that is earning
me four point two five percent interest rate. And yeah,
I'm just wondering if maybe holding on to the money

(27:18):
would be any better in any way, or if taking
out the construction loan would be of any benefits AnyWho
love the show and thanks for your thoughts.

Speaker 2 (27:29):
On this, Yeah, is Reel happy to provide our thoughts
in of course, love the idea of building what you're
calling a guest house, what we're going to call an ADU,
because hopefully you are looking to maximize the ROI of
that actual structure.

Speaker 1 (27:44):
And we've seen a lot of like law changes in
a bunch of places around the country to make ADUs
easier to build and to dramatically reduce kind of the
red tape around like how and where you can build them,
so they're becoming more and more popular.

Speaker 3 (27:58):
Too, that's right.

Speaker 2 (27:59):
Yeah, And plus so building costs they've certainly gone up
in recent years, but they haven't risen quite as much
as the cost of financing and purchasing a home the
limited supply of housing that's out there. So what that
means the folks who might want to get into to
the real estate game might find that their best bet
is to build an ADU, an accessory dwelling unit instead

(28:20):
of buying an existing single family or buying an existing
duplex that might be out there on the market. Granted,
this is general advice and every market, every individual circumstance
is different, but literally a disclaimer there. Yeah, but this
is a strategy that folks are doing. Like, We've got
a Friendeel Like he's a real estate investor. He's also
a realtor, but over the past two or three years,

(28:40):
this has been his approach. He's specifically looking for properties
that are on corners that allow for him to build
another an ADU on the back part of that property
and guess what, it's still accessible via the road, which
means that people who are renting there aren't disturbing the
folks who are in the primary structure. It's either the
corner or he's looking at like properties that.

Speaker 3 (29:03):
Have alley access.

Speaker 2 (29:05):
So like a lot of the older in town neighborhoods,
like you've got blocks city blocks, and you've got these
old alleys that are kind of grandfathered in to where
people could claim here in Atlanta, they're like ten twelve
feet why that that kind of thing, and so each
property owner is entitled to half of that. But a
lot of the blocks, they've just maintained those alleys and
they're there, and so you can use them if you

(29:27):
especially if again, if you are closer to the end
of a block where you run less of a risk
of that thing getting absorbed maybe by the neighbors to
where your property would be choked off.

Speaker 1 (29:39):
Actually well yeah, and I I was this close matting
to doing one of these our corner lot back in
town too. And this was when the price to build these,
thinks was a whole lot lower as well. They've come
out quite a bit Atladu, right, Yeah, So it was
like literally this company who has like three or four
designs and you pick one. It's almost like buying a
house out of a Sears Roebucks catalog that they used
to have back in the day. Love kind of their

(30:00):
business model where you're not necessarily hiring an architect to
make someone of a kind. It's like, do you like
one of the three models we have?

Speaker 2 (30:06):
If not put it here, yeah, yeah, just build out,
yes please and stick it right here.

Speaker 3 (30:10):
Yeah.

Speaker 2 (30:10):
So I mean I love that model. There's more and
more simpler times. Yes, yes, that's what it makes me
think of where you get to Yeah, pick a house
out of account. But they were adorable, they were beautiful.

Speaker 1 (30:18):
They would appeal to a whole lot of people, and
they made sense kind of in the neighborhood where we lived.

Speaker 3 (30:23):
But totally Yeah, you're right.

Speaker 1 (30:24):
I think there's a whole lot of people who would say,
I feel like it's you're almost doing God's work. If
you build an ad right now too, you're increasing the
supply exactly, which is which is going.

Speaker 2 (30:32):
To there's a there's literally a housing shortage right now
and builders and developers there for one reason or the other,
they just haven't been willing to take on that risk.

Speaker 1 (30:41):
Over the building years, builders have been building more, but
we're still we still don't have enough. And by the way,
Israel said he's had the cash on hand to do this,
which is amazing, like to say that kind of that
kind of cash is really incredible. It's quite a feat
and what a killer way to use it, right, to
put it into something that is going to increase the
value of your property, but it's also going to hopefully

(31:01):
allow you to make more and more money over time.
And Matt actually one thing he didn't really mention was
how he was going to use it. He didn't mention it.
He said, guest house, Yeah, that's yeah. I was like,
is he going to use it for friends and family
or is he actually going to use this as an investment?
And so I think if he wasn't planning on renting
it out like full time to tenants, he might want
to consider the both and approach. If he's like that, it's
kind of for friends and family when they're in town.

(31:22):
But I don't know, maybe it could also be a
short term rental that allows him to make money when
you know, people he doesn't have friends or family visiting,
and so that that could help him make his savings
back quickly and just crossed off the calendar. Don't allow
bookings when you know that some of your people are
going to be in town using it. And this of
course does have like part time job characteristics, right, It

(31:43):
makes it. It makes it. That's something you have to manage.
But you'd be you'd kind of be dipping your toes
into the hospitality industry, Israel. But depending on your specific
location and what that ADU can command per night, it
might be worth it to you to kind of jump
through those hoops because it could mean dialing up the
income dial significantly.

Speaker 2 (32:02):
Yeah, takes some of the pressure off of whether or
not you should plunk down this much change in order
to build this thing. If you know that you've got
a you know the time frame that you know in
which you'll earn back that money. But while Israel said
that he's got the cash on hand, he also mentioned
that he's considering taking out a loan instead. And so
should he keep his cash intact and instead borrow to

(32:24):
get that thing built, We'd say probably not.

Speaker 3 (32:27):
And here here's why we don't want you to exhaust
all of your cash reserves.

Speaker 2 (32:31):
But taking out a loan is going to come with
some other fees and hassles in addition to the higher
interest rates that you're going to be forced to deal with.
And let's say, if you know, maybe you'd already taken
out a loan that was in the eight percent range.
Let's say, well, we tell you to use your savings
to pay that thing off, because that's pretty dang high.
And even though you're say getting a you know, he

(32:53):
said a four and a quarter I think returned in
his high yield savings account, Well, a guaranteed eight percent
return is going to be even better.

Speaker 3 (33:00):
Right, So avoiding that loan in the first.

Speaker 2 (33:02):
Place, we think, we think makes the most financial sense
to us. And obviously it depends on your specifics, right,
Like it depends on the rate that you're able to
secure if you've got a like say you've got a
good friend who's a lender, and he's able to say, hey,
I got this construction loan. Once you complete the construction,
we roll that into their thirty year mortgage and it
locks into four percent. Oh oh that would change if
that was me, I would do that, yes, oh yeah.

Speaker 3 (33:23):
So it depends on the specific because then you remain liquid, but.

Speaker 1 (33:26):
You're taking out exactly a loan at a really reasonable rate, right,
And so there's and there's even a spread, a positive
spread for you to and an incentive to keep your
cash in a hiltav's account, right instead of putting it
towards paying down the debt. But you're right, I guess
we're assuming that this is given a typical construction loan
in the current environment, which is probably somewhere close to

(33:47):
the eight percent range, with mortgage rates also being in
the higher in that range as well. Yeah, so if
we're talking about that rates that we like to see.
If we're talking about that, then no, boy not. If
we're talking about a lower rate somewhere in that four
to five percent range, the liquidity matters, right, and having
access to that cash, keeping it on hand so you
can do other things I would take out. I would
probably take on the debt and be totally fine with it.

(34:07):
I think one way to split the baby though, if
you're you know, if you want to go old Testament
Solomon style, if you're worried you're going to have to
empty your savings to nothing at all because of this, Well,
take out a helock on your primary residence. Right, you
could borrow something like twenty or thirty K instead of
borrowing a much bigger amount. And those helocks they always
come with no closing costs, or a lot of them

(34:28):
come with no closing costs. And so we just suggest
that you have a goal to pay it off quickly,
like in twelve to eighteen months with income you know
that you're getting from potentially using that ADU as a
short term rental or or just from income from your job.
But that is maybe a better way to do it
instead of taking on this construction loan that comes with
bigger closing costs and more and more annoyance, more hassle, and.

Speaker 2 (34:48):
You're locked into for a longer period of time.

Speaker 1 (34:50):
The helock could be this like perfect little Hey, I
just need a little bit to make sure that I'm
not literally taking my savings down to zero, and then
I've got a little breathing room. And so that might
be kind of the best way forward.

Speaker 2 (35:02):
Yeah, because I do think a lot of folks they
might hear you say that and they're thinking, oh, helock man.

Speaker 3 (35:07):
Rates on helocks are crazy high too.

Speaker 2 (35:09):
Yes, But what's key is what you said, which is
like a plan to really get after it, and when
you know that the rates are higher and this is
something that you can eliminate in a year year and
a half. I like the fire that the light's under you,
as opposed to saying, all right, let's roll this into
a thirty year and this is something that you're not
paying on for for thirty years.

Speaker 3 (35:27):
Yeah, long time, thirty years.

Speaker 2 (35:29):
And so how it is that you mentally approaches really
matters in this case is real. But you we've got
another question plus a listener. When that we're gonna get to.

Speaker 3 (35:38):
We'll get some bother of those right after this. All right, man,
we got more money content.

Speaker 1 (35:51):
We got more stuff we got to cover on this
episode before we call it ques And we're kind of
starting something where we pull a question from Facebook occasionally,
because man, there's this interesting stuff in the how to
Money Facebook group. If you're not a member of the
how to Money Facebook group, there's this there's this website
called facebook dot com that you can log onto.

Speaker 3 (36:06):
Have you heard of it.

Speaker 1 (36:07):
It's been around for a minute, and you can type
hout to money in the search bar you'll find you'll
find the group there. There's just people helping each other
out and it's just a great place to be if
you're looking for helpful money advice and listener Leslie. She
posted this week she said, which would you do? She
posted this question to the Facebook community. She said, sixty
five hundred dollars into a roth an HSA or a
traditional four to fifty seven B. She's basically saying, listen,

(36:30):
if I've got a limited sum of money, which one
of these three retirement accounts should I prioritize? And Matt,
I just thought this was interesting that I was like, Wow,
we should bat this one around because we're kind of
pitting three retirement accounts against each other in this scenario.

Speaker 3 (36:43):
Three great options, right, well, three good things, which one's
going to come come out on top in this price fight?

Speaker 2 (36:48):
Right, So it's not like one of them is I'm
also thinking about dropping sixty five hundzho on. I don't
know what something dumb you could spend money on?

Speaker 3 (36:54):
Yeah, Like I.

Speaker 2 (36:55):
Rarely even like to say dumb things that people can
spend money on because that.

Speaker 3 (36:58):
Might be their craft Burea equivalent. Or you don't want
to I don't want to be a hater.

Speaker 1 (37:00):
And you also don't want to plant an idea in
their head. That's what it wasn't already there inception wise,
And they're like, wait, Matt, do you.

Speaker 2 (37:06):
Want to open a hot dog food truck?

Speaker 7 (37:08):
No?

Speaker 3 (37:09):
I was thinking corn dog.

Speaker 1 (37:10):
Oh No, I want a hot tub, that is what
I want. Maybe I'll eat a hot dog in my
hot tub.

Speaker 2 (37:14):
Other things that start with hot hot yoga studio? Is
that something that's a business you want to get into?

Speaker 4 (37:20):
It?

Speaker 1 (37:20):
Got yoga that just doesn't sound sanitary, might get from
a back, but it sounds adorable, right. But this one
certainly is not a no brainer, that's for sure. But
I think there's one mat that we can eliminate first
and foremost that stands out as not quite as good
as the others, and that's the traditional four to fifty
seven b that Leslie mentioned. So those rarely come with
the match. Plus we're talking about a small tax benefit

(37:42):
now while accruing a bigger tax build down the road.
So I think, and I don't know if you agree
with me, that the four fifty seven would probably be
the least favorite of the three options that she presented.
So now there's just two left standing. It's almost like,
you know, Connor McGregor versus kabib or something like that.
I don't know, not a big mme guy, But which
of these beautiful tax advantage offerings win the day? Matt
in your opinion, do you have.

Speaker 2 (38:03):
A preference, Well, so from a purely tax and numbers
and loopholes that are available to folks. The HSA is
certainly superior when you use it properly, right, and that's,
of course because of the triple tax advantage status. If
this is this is something that your employer is offering,
there's technically a quadruple tax advantage because you're not paying

(38:23):
payroll tax on that. But what that means, though, is
that there are also more hoops that you've got to
jump through and then sometimes do the fees that are
associated with HSA's it can be higher than what you'd
pay opening up a wrath with fidelity. But so much
of this comes down to whether you're looking to completely
optimize and maximize your tax shield and if you're happy

(38:45):
to take some of those additional steps that in HSA requires.
So that's on one hand, if so, then all right,
HSA could be a good way to go. But if
instead you are preferring simplicity, well it's hard to beat
a roth ira right, just taking that sixty five hundred
bucks and I'm assuming that was her default, because that's
why I'm guessing she started with sixty five I don't know,

(39:07):
but shoving that into a wrath investing within a total
stock market or an S and P five hundred fund
and then just calling it a day, right like that
is hitting the easy button. Plus you get the advantage
of with a roth the ability to potentially tap that.
It's like a backup to your backup emergency fund, right Like,
those contributions can be withdrawn for any reason, tax and

(39:28):
penalty free. It's not something we like to talk about
often because we don't want you to necessarily have to
draw on that, but hey, if you ever find yourself
in a tight spot, that money is there. There's forget
the hot dog corn Dog stay, and there's money in
the banana stays, and there's money in that roth ira.
But of course with the HSA, you're gonna have to
pay more attention to fees. You might even need to
move the money to another provider to cut down on

(39:50):
this fees. And then also, like on top of that,
you're gonna need to document all those medical expenses as well.
And I'm a pretty organized person, but I don't know,
I feel like I just talked myself into choosing the
Rabbi ray And because personally, I've never actually been able
to take advantage of an HSA, So in my mind,
it's almost like this unicorn. It's this far off fantastical

(40:11):
thing that I mean, I know it exists.

Speaker 1 (40:13):
Unicorns don't actually exist, though, man, I know well, and
I think it's probably a good point is that because
you've never had access to one, I never have either,
likely may feel slightly biased to me.

Speaker 3 (40:22):
I know they're great, but it feels addressing.

Speaker 1 (40:23):
It feels like a fiction book that we read about, right,
and it's it's not actually reality, but for a lot
of people it is. And actually, my brother in law
called me just yesterday to ask about his HSA and
he was telling me, actually, there's a there's a twenty
five dollars a month fee, but my employer, if I
open an HSA, they put five hundred bucks in there,
so it's definitely worth it despite the fee. But at

(40:44):
the same time, it's annoying, right, And it's annoying some
people don't get the employer match into an HSA or
any sort of employer contribution to an HSA, and so
that fee is something you have to consider because for
some for some HSA plans, it could be fifty bucks
a month and that's like hard to overcome, right, when
that's a that's a pretty big bite. That's a big fee.
So and I guess another option too is to split

(41:06):
the money equally between the top two, right, which would
be a reasonable approach.

Speaker 3 (41:09):
So Joel split in the baby again.

Speaker 1 (41:11):
I'm just like trying to be Solomon over here with
every piece of financial advice we dish out. Like you
you can always give yourself a goal of maxing out
both accounts at some point in the future, but for now,
maybe funnel thirty two to fifty into your Roth High right,
and another thirty two fifty into your HSA, and then
you know, still be conscious of the fees if they're egregious.
Note that you can transfer funds from that HSA, by
the way, to another provider once every twelve months, So

(41:34):
that's one of the things I recommend to my brother
in law, Like stick the money in there once a year,
you can, you know, move that money over to Lively
or Fidelity, who are the two best low cost HSA
providers out there, and that way you're getting money into
the HSA. It's the best tax tax structure, right, the
best way to shield yourself from tax. But at the
same time you you're avoiding some of the fees, or

(41:55):
at least you're not getting pummeled and punished by the
fees for too long exactly.

Speaker 2 (42:00):
And I like to the benefit that comes with trying
both of these out is that you get to do
just that you get to try it out. You don't
have to necessarily commit to one or it's not like
you like, once you get the ball rolling within one
of those camps, you have to continue doing that forever.
And so yeah, the ability to try them both out
and be like, oh wow, I really like the ease
of use that comes with a roth IRA or oh

(42:23):
I'm pretty organized. I like to keep lists of expenses anyway,
The hs hurt a lot. Yeah, I mean literally that
that's another check within on the side of going with
the HSA.

Speaker 1 (42:34):
So I like the ability for you to try both
of these. If you're like Samuel L. Jackson, mister Glass
from was It was It?

Speaker 6 (42:40):
In Night?

Speaker 3 (42:41):
Shyamalan movie Oh with.

Speaker 2 (42:42):
Bruce Willis, Yeah, yeah, hear that guy, the HSA unbroken,
one of the h shattered, unhattered, something like one of
but one of those four names.

Speaker 3 (42:51):
Such a good movie.

Speaker 1 (42:52):
But yeah, if you're like that guy and you get
hurt all the time, the HSA comes even more handy.

Speaker 3 (42:55):
Yeah, I like that all right. I like it's good.

Speaker 1 (42:57):
It was like a noir superheroes. Yeah, getting hurt always
better than the modern Marble ones.

Speaker 3 (43:03):
That's srure.

Speaker 2 (43:04):
They went downhill pretty quickly. Yeah, they neither find new content.
That's the problem today, right, I mean you got the
writer strikes. There's no new content, which means, honestly, oh snap,
what if that means there's gonna be a content revival?

Speaker 3 (43:16):
Right?

Speaker 2 (43:16):
Because normally, when you are on a tight truncated timeline
and you're just forced to crank out scripts and episodes
and whatever else, it means maybe the quality isn't so
good by kind of close pinching that off, and you've
got all these writers who are no longer able to write.
Maybe that means next year, dude, we're gonna be spending
so much money on streaming services.

Speaker 3 (43:36):
It's gonna be so good.

Speaker 2 (43:38):
I guess that's the downside to the writer strike.

Speaker 3 (43:40):
But all right, we've.

Speaker 2 (43:41):
Got one more voice moment to get to. And this
isn't a question. Let's hear a listener money win.

Speaker 5 (43:48):
Hey, Matt and Joe to being san Antonio. So recently
I went to a movie theater with the family. And
you know how the movie theaters have this little arcade
you know, connected to them, so of course the kids
they want to go and play some games before the movie. Okay, great,
let's do it. We go into the arcade, and some
of the games were messed up. They weren't working, you know.

(44:10):
I'd scan the card, it wouldn't go through, and then
I noticed that it is still taking money out of
my card. So I brought it to the attention of
one of the attendants and he said, oh, well, the
best thing you can do is call the number on
the side of the machine and talk to a representative.
I feel like a lot of people, you know, just
kind of blow this off and say, yeah, it's fine.
I'm not gonna do all that, so I didn't. I

(44:32):
went ahead and called the number and you know, talk
to a representative, told him about the which machines I
was having a problem with, and it wasn't giving my
money back. And they went ahead and said, okay, they're
going to send the technician check out the machines and
if they find that the machines were faulty, they would
reimburse me. So they have my address, got all my information.

(44:55):
And today I went to the mail opened up a
letter with the six bucks in it. So, I mean,
it's six bucks is six bucks. It might be frugal,
might be cheap, but uh, I mean, I think it's
a win overall.

Speaker 2 (45:08):
I'm sure when AV gave them his address, he was like, yeah,
this isn't gonna go anywhere. You're not actually gonna gonna
refund me anybody.

Speaker 3 (45:16):
But it turns out they did. Yeah. I love that.

Speaker 1 (45:18):
I love the story, and I think there's something that
we can probably all learn from, like just something a
random little thing that AB sends our way like this,
And in my mind, that is that every dollar matters, right,
and AB is treating is treating these dollars like every
dollar mouse matters. It's it's really easy to say it's
six bucks, right, like, okay, the bigger thing to handle here,

(45:38):
the more the more annoying thing is probably like my
kid's disappointment that the machine is broken. But but AB,
like you know, went through the trouble, made the phone
call and and I think, Matt, it just when you
treat your dollars like they all matter, like they all
serve a purpose, whether it's fueling your financial independence or
whether it's buying stuff that you care more about, Like
then like your mindset shit towards your money, Like you

(46:02):
start to think about your finances differently. But if you
start to say, oh, five bucks here, five bucks there,
it doesn't you know, who cares, It doesn't really matter.
You are inevitably going to be the person who wakes
up and you know, just isn't as far along when
it comes to building towards financial independence as somebody like
AB is going to be.

Speaker 2 (46:18):
So I totally know what you're saying, but I guess
I'm gonna have to Like, is at a certain point
you think, like you have to calculate like what your
time is worth. And I'll be honest, I'm not sure
if I would have actually made the call to be like, oh,
like let's see how much money I actually ended up
losing to these stupid broken machines. So in my mind,
like it's it's kind of less about the money and
maybe more about the fact that you could take the

(46:41):
lesson and this this win basically that AB has experienced
and then roll that into other areas of life, Like
there's a sense that six bucks.

Speaker 1 (46:50):
Isn't going to change his life. Yeah, but the fact
that he treats his money with care.

Speaker 2 (46:53):
Will yes, and the empowerment I think that that can
provide can lead to even bigger wins down the road,
which in my mind, like that's why sometimes I do
things that where it seems like a waste of time
or or people are just like why would you do that? Man,
Like you're only saving like literally cents on the dollar
here or in AB's case, like six bucks. And by
the way, literally he sent us a picture when he

(47:15):
sent this voicemail over as well, and it was literally
a five dollar bill in a one dollar bill they
just mailed to him. I didn't realize that companies mail
cash and the male cash, but I guess they figured
it was such a small amount that maybe it didn't
really matter as much if if it ended up in
someone else's hands. But I really like that he got

(47:35):
like a taste of the glory of like of winning
and the empowerment that you get from that to then
say I'm in control of my life, Like there is
more that I am in control of, Like I can
take life by the horns. There aren't businesses out there
that are going to treat me poorly I'm gonna make
them a tone. I don't know, I'm getting to religious
or whatever. But the ability to stand up for yourself

(47:56):
and say, hey, are you going to make this right?
This isn't something that I feel like, this isn't how
you should have handled this, or this is a product
that broke or even just dealing with, like if you're
negotiating with somebody, to the ability to I don't know,
like draw a line in the sand that could lead
to like if you're looking for a promotion, the ability
to advocate for yourself is That's what I love about this,
and I hope that not only AB is able to

(48:19):
take this to and apply it to other areas of
life too, but also just all of our listeners. But specifically,
when you experience a small win like this yourself, it
does something to you. You feel good about it, and
you think, all right, I'm optimizing. Okay, it's time to
be more efficient. I'm gonna stop wasting money, and like
you said, you start seeing other opportunities, yes for all
all of a sudden, it's a paradigm shift, and you

(48:39):
start seeing any interaction where you're in this current of
life of culture. But no, you can you have the
ability to like transcend that and you can almost set
not make your own rules, but almost do what you
want to a certain Outpeck steakhouse, just like ordering the
bloomin onion.

Speaker 1 (48:56):
Well makes me think of recently, I went to a
baseball game with one of my best friends and we
parked over a mile away and we walked. And it's
not because I don't have fifteen dollars to spare unparking,
but it's because I don't like my money going to
pay for a parking lot. Plus we had this lovely stroll,
So I don't know, there's a good thing. Yeah, there's
all of these ways in which we can test our

(49:17):
preconceived notions. We can test the assumption, oh, well, if
I'm going to go to the game, I have to
pay twenty books to park, right, No, you don't. A
lot of people just assume that that comes with the
cost of admission, but it doesn't. And you have the
choice to do something different with your life and with
your money.

Speaker 3 (49:34):
You have options.

Speaker 2 (49:35):
Yeah.

Speaker 1 (49:35):
I mean, maybe we're reading the way too much into this,
but that was kind of I was like, oh man,
there's a lot to take away from AB's win here.

Speaker 3 (49:41):
Absolutely.

Speaker 2 (49:42):
Yeah, And so hopefully folks are hearing this and they're thinking,
all right, there's this little thing that it's been in
the back.

Speaker 3 (49:47):
Of my mind.

Speaker 2 (49:48):
I'm gonna actually do something about it. And the ability
to parlay that win into bigger wins, in my mind
is sort of my big takeaway. The ability to really
set yourself up in some areas, like some of the blocks,
like some of the big things, whether it's salary or
housing or cars, right, like some of the big wins
that could really truly have a massive impact, as you're

(50:08):
talking about years of not spending that money compounding in
the within the stock market. Yeah, I ab We appreciate
you man, thank you for sharing your win with us.
And by the way, again, you don't even necessarily have
to have a question for us, but we love talking
about anything that listeners are doing with their money pretty much.
It just gives us a way to connect with folks
and to talk about money, which is what we love

(50:30):
to do while we are enjoying beers and Joel, you
and I are enjoying a fest beer. This is in
October fest by Bold Monk. What your thoughts You already
said that is one of your favorite styles by them.

Speaker 1 (50:41):
So yeah, yeah, it is actually well they had actually
when we were there last time, they had a really
good barrel Age says on that it was like nice
and funky, and I really enjoyed that.

Speaker 3 (50:50):
One of those.

Speaker 1 (50:51):
They didn't have it bottled or can sadly or I
would have brought that, but so should fill up your
water bottle and thought about it. I thought about it.
I just went back behind there, put my mouth under
anything style roll back on the handle. It was awesome. No,
so this one was like bronze and color. It was
it was multi and a little sweet. And I really
do like a good Octoberfest. And I don't know if
you know this Octoberfest starts in September, which feels like

(51:13):
false advertising, but I'm gonna let it. I'm gonna let
it slide.

Speaker 2 (51:15):
But this, yeah, it's already going. It's it's kind of
starting in a few days or you know, it started
like a couple of weeks ago. It starts like halfway through September,
and it goes through I think the beginning of October.
But one of these days we'll make it out there,
you know, Okay, it's hanging out with all of our
German HTM listeners too. Funny that you mentioned that because
we recent episode we talked with Lacey Langford and that's
when we enjoyed the KNTE, which was phenomenal and it

(51:39):
got me thinking about some of the different European beers.
That's where I want to go. I don't like, I
might want to swing through the Octoberfest thing for like
a day, sure, like it goes on for weeks and
people it's all about just large volumes and quantity, Whereas
I'm like, I would rather drink like a quarter of
the amount of beer I would drink at like over
in Munich, enjoy a fraction an know that over in

(52:01):
Belgium and going over to three Fonte and uh cant
I'm partial those beers.

Speaker 3 (52:07):
I'm partial to the Belgian styles. Yeah, like, well it'd be.

Speaker 2 (52:10):
A fun party, but man, I'm gonna yeah, it would
much rather head up Cantion. And if you're in Atlanta,
by the way, and you like Belgian style beers, that's
what Bold Monk kind of does and and their their food,
their group of the atmosphere there is, it's a good spot. Excellent, yes, yeah,
especially if you're if it's nice weather and you're eating
outside and they're a little beer garden.

Speaker 1 (52:27):
It's so lovely. It's a great spot the upper floor.
Yeah yeah, yeah, So all right, man, that's going to
do it for this episode. We'll post show notes up
on the website at how to money dot com with
links to some of the things we reference to the
including some of those retirement calculators that we discussed in
the twenty five X question.

Speaker 2 (52:42):
All right, that's gonna be it for this one, buddy.
Until next time, Best friends Out, Best Friends Out.

All Episodes

Ask HTM - Inflating the 25x Rule, Online Car Refinancing, & Affordable ADUs #727

Episode Transcript

Hosts And Creators

Joel Larsgaard

Matthew Altmix

Popular Podcasts

Dateline NBC

24/7 News: The Latest

Therapy Gecko

.css-15opob5{left:0;position:absolute;top:0.8rem;} All Episodes

.css-14f5ked{margin:0;word-break:break-word;display:-webkit-box;-webkit-box-orient:vertical;box-orient:vertical;-webkit-line-clamp:2;overflow:hidden;}Ask HTM - Inflating the 25x Rule, Online Car Refinancing, & Affordable ADUs #727