May 19, 2025 • 51 mins
Let’s kick off the week with some fresh listener questions we have lined up for you! And don't just stand on the sidelines- if you have a question you’d like us to answer, toss your voice memo our way. It only takes about 90 seconds to record and you can find a step by step guide over at HowToMoney.com/ask . Regardless of how random or bizarre you might think it is, we want to hear it!
1 - Where should I open a Roth IRA for my kiddo now that she’s earning some money?
2 - What is it about reverse mortgages that makes them inferior financial products?
3 - Given the uncertain economic outlook this year, how should I invest?
4 - How can my wife contribute to a retirement account when she doesn’t have any earned income?
5 - Is it a problem that I’m keeping my emergency fund in a local brick and mortar in order to have fast access to cash?
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During this episode we enjoyed a DDH Refreshing by Tired Hands Brewing! And please help us to spread the word by letting friends and family know about How to Money! Hit the share button, subscribe if you’re not already a regular listener, and give us a quick review in Apple Podcasts or wherever you get your podcasts. Help us to change the conversation around personal finance and get more people doing smart things with their money!
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Welcome to How to Money. I'm Joel, I'm Matt.
Speaker 2 (00:03):
Today we're going to answer some of your listener questions.
Speaker 1 (00:24):
And that's because if we answered all of your listener questions,
we'd be sitting here for at least another hour before
we run out of all.
Speaker 2 (00:31):
The question the meaning of life, Matt, that question came in,
we were like, we'll pump that to a future episode.
Speaker 1 (00:35):
Maybe we'll say that one for the Ask Me Anything,
which is an upcoming special episode. You can look forward
to that one. Where should we That's going to be
episode one thousand. I think now is a good time
start thinking.
Speaker 2 (00:45):
If you're listening to this episode and you're like, I
have a random question for Matt and Joel, email it
over to us and it can just just type it
out even if you want, because I have a feeling
a lot of people are reticent to send voice my
most so if you just want to, like type that
question out anything perfectly not finance related.
Speaker 1 (01:01):
Yeah, I want to. I want all the random questions,
but that of the episode one thousand. But today we
in fact are going to answer your financial questions. We're
going to talk about some special the special Wrath account
Joel that we rarely get to talk about looking forward
to that's we're going to talk about your personal fight.
Not you personally, but an individual's personal finances and specifically
investing whether or not she should change that during a sabbatical,
(01:24):
how that impacts her money. We're gonna talk about reverse
mortgages and more plenty to get to during today's episode. Joel,
you want to share your story about your dishwasher. I
think I should your dishwasher saga.
Speaker 2 (01:36):
I so I saw a really incredible deal on this
website called costco dot com for heard of it, bosh dishwashers,
and I say dishwashers with an s mat because I
did not just buy one. I asked my wife ahead
of time if I should partake in this stunt. She
flat out said I don't think so, and yet I
(01:56):
did it anyway.
Speaker 1 (01:57):
Well, the reason why is because she she pointed to
the fact that you've been partaking in this type of
behavior a lot in recent She's like, You've kind of
been stalking up on a lot of stuff recently. She
was like, Joel's he's got tariffs on the mine.
Speaker 2 (02:10):
I'm going off to deepen. Okay, so here's why I
bought not one, not two, not three, but four dishwashers.
I didn't know it was four of the same variety.
Of those three, well, the fourth made every dishwasher a
little bit cheaper.
Speaker 1 (02:22):
So was it? Was it a punch card and the
fourth ones on us something like that?
Speaker 2 (02:26):
Okay, so I was I've not liked our dishwasher, Matt
since I moved in, and it doesn't clean the dishes
terribly well. And even though it's like a nice brand
or something, it's kitchenad. All the rest of our appliances
are kitchen aid. I don't care about matching appliances. I
just wanted a dishwasher that cleans my freaking dishes.
Speaker 1 (02:40):
Just needs to work. Yes, So I'm with you, Bosh.
Speaker 2 (02:43):
If you look at consumer reports, if you look anywhere,
the best, everybody says they're the greatest, easily the best.
Costco had Bosh dishwashers on clearance. The price centered in
ninety seven. You know it's you know, yeah, you know
that it's the cheapest price you're gonna get. On top
of that, Costco said, hey, if you buy multiple appliances,
we'll give you a hundred books off per appliance. Basically,
and on top of that, they said, Bosh is also
(03:04):
offering a deal basically something like two fifty off an
appliance once you get past too, so the deal like
stacked on top, and so the more dishwashers you bought,
the more you saved. Triple word score baby, right. It
was very very much like that. So and free installation,
so that's also pretty nice. I sold my old dishwasher,
(03:26):
get four dishwashers and installed at your house. You're said,
so clearly, I don't need that many dishwashers. So what
I did was I asked friends and family, Hey, do
you want an inexpensive dishwasher? Do you want to go
in with me on this?
Speaker 1 (03:38):
You I thought you might be backed out. I was
just fine. I will say, I didn't know how serious
you work, but like, oh, I let's set the stage,
which was serious. I think I had made some cocktails
where I was were sitting around on the back patio.
The breeze is blowing. It's a Friday, and you had
mentioned that, and I was just like, oh, yeah, dude,
we could. I can totally see us stick in one
of those in I got a like, if not at
(03:59):
our own, at the very least at a rental perhaps,
but I'll.
Speaker 2 (04:03):
Just hold on to it for the future.
Speaker 1 (04:04):
Well that's the problem. I feel bad because I feel
like I kind of left you in the lurch a
little bit. But you're like, hey, this is still available
to you, and I was just like, well, if I
don't take it, what are you gonna do with it?
Because I would only take it. I would only take
it to flip it because I don't currently have any
rentals that need a dishwasher, so a, so I'm not
taking advantage of the free install And I also did
(04:26):
some more digging and this was a three hundred series,
you said, and by all means a great dishwasher, but
evidently it's the five eight hundred series of Bosh dishwashers
that have the ability to dry the dishes really well.
And that is the number one thing that we hate
about our dishwasher really well, specifically plastics, because the dishes
(04:48):
are fine, but the kids we always packed their lunch,
and the plastic containers it's like those little subdivided little
tupperware sort of there are a pain in the butt
to get to a to clean, but then them to
dry the dishwashers, so that that's been the whole impetus
behind us thinking about getting another.
Speaker 2 (05:04):
So you abandoned me, Yeah, yeah, I left you. My
dad he was looking for a new dish washer anyway,
so this was perfect. So he got like a bargain
basement price to us a four also free cost come
installation for him too, which is awesome. And so then
now I've just got to sell two dish washers, two
of them. And honestly, considering the price per dishwasher I paid,
so what was I should be able to profit?
Speaker 1 (05:25):
Yeah?
Speaker 2 (05:25):
What was the final price? Was like fourteen thirty four dishwashers.
Speaker 1 (05:29):
Per okay, so what is that? Come on? Like, it's
like three sixty something? Three sixty per dishwasher, right, and
this is like a nine hundred dollars dishwasher.
Speaker 2 (05:36):
It's like a it's like a seven hundred dollars okaylasher,
but tax also right, so that's literally after tax installation everything, right.
So yeah, I'm going to be able to sell these
on Facebook marketplace for more than what I paid for them.
Speaker 1 (05:49):
I was doing you a favor because economies of scale, Joel,
I was thinking, well, that's why I had mentioned that
I would just flip it. And I was like, well,
if he's going to go through the hassle of creating
the listening take in the picture making it sound like
a legit posting, that's half the battle. That's true. So
I may as well be able to roll in some
additional profit off that second dishwasher dog true story. So
(06:09):
let me help you, help me help you.
Speaker 2 (06:12):
So it's uh, this is the kind of thing. I
think most people see that and they balk at it,
and I'm the kind of guy who says, I don't know,
this sounds like a fun challenge and also of a deal.
It's like a win win where I essentially get this
this free dishwasher put in, and my dishwasher troubles were
over over because I've just had this really fraud relationship, had.
Speaker 1 (06:32):
Enough of it. It was tough.
Speaker 2 (06:33):
My wife was like, it's not that bad, and I
was like, I'm the one who does the dishes.
Speaker 1 (06:37):
It sucks. I yeah, I hate it.
Speaker 2 (06:38):
So I'm happy and hopefully my wallet will be happy
at the end of the day too, because like, fourteen
hundred dollars for four dishwashers, Yeah, that's incredible. Well, in
today's America, mat well, a the fact that you sold
your old one. B. The fact that you're going to
be able to Yeah, I mean you're gonna make Yeah,
I think you. I don't think you're gonna come out
ahead necessarily.
Speaker 1 (06:56):
I think I am. Let's wait and see, but you
might get close. I think I think you're going to
come out ahead.
Speaker 3 (07:00):
Yah.
Speaker 1 (07:00):
Fourteen, Well, how much did you get for your your
use dishwasher? Like hundred bucks?
Speaker 2 (07:03):
One hundred and twenty five dollars?
Speaker 1 (07:04):
Okay, so fourteen down to thirteen? So can you get
six fifty or more? Well?
Speaker 2 (07:08):
No, because my dad's gonna pay for one, but he's
gonna pay the actual price I paid.
Speaker 1 (07:13):
But I think I can, so I gets it down
to thousand. Yeah.
Speaker 2 (07:17):
So I think if I make five hundred bucks each
on Facebook, say, if you make more than five hundred,
you're coming out ahead.
Speaker 1 (07:23):
I'll report back. But I hate to be the boozie
want here, but I'm the one that's holding out for
the super fancy dishwasher that's got crystal dry technology, which
I didn't realize I needed until I did some research.
Speaker 2 (07:31):
It does sound fancy. Yeah, I don't care as much
about that, but yeah, I just the finer things, those
Ideo secrecies. This is something I used to do a
lot more of back in the day, this kind of
weird stuff, find a deal, buy in bulk, sell off
the rest, that kind of thing. Remember, we used the
advantage of the deal to an Urban Outfitters auction and
we would buy stuff that was severely discounted Urban Outfitters
(07:53):
slash anthrow yeah, and we would we would sell that
stuff on Facebook and make a decent buck after even
after transportation costs on it.
Speaker 1 (08:01):
Slash outfit our new house we have any furniture at
the time. So for us, it was just a great
way to again to be able to afford the nicer
things the life.
Speaker 2 (08:08):
Right, So this was my modern version of that ice,
although I realize it makes me sound crazy.
Speaker 1 (08:14):
All right, let's move on.
Speaker 2 (08:15):
Matt. Let's mention the beer we're having on this episode.
This is a ddH refreshing by Tired Hands out of Pennsylvania.
We'll give our thoughts on this IPA at the end
of the episode, and if you have a money question,
whether it's about a weirdo purchase here thinking about making,
we'd love to help you out. Just send your voice
memo over to us if you want the full instructions.
You go to how tomoney dot com, slash ask, or
(08:36):
literally just record your question on the voicement map of
your phone and email it over to us. Matt, let's
get to a real money question a conundrum here, specifically
from a listener who wants to know how or the
details about opening a wrath for a kid.
Speaker 4 (08:50):
Hey, guys, this is Mary from South Carolina. Joel recently said,
you guys need some great listener questions, and I think
I'm pretty great, So here we go. One of the
reasons that we like listening to y'all is because you're
kind of in the same ages and stages. Our oldest
is twelve, and she's starting to earn some money from
babysitting and pet sitting and stuff like that, and we
(09:12):
went over some compound interest calculators with her. She is
pretty excited about those. So wondering how detailed I need
to get with documentation. So far, I've just been putting
memos in the money I transfer into her youth account
with USAA. I don't know if I need to go
(09:34):
all in like Matt and do a spreadsheet. That sounds
pretty exhausting. Also, would you guys recommend Fidelity for a youth,
roth Ira. We already have our brokerage account for them.
Speaker 1 (09:46):
Thank you, Joel. I feel called out sometimes, like you've
recently documented, you need to do the exhausting thing in
order to take get ahead with your money. That's true, no,
but not always, not always.
Speaker 2 (09:58):
Sometimes there's a lot of low hang for when it
comes to personal fire.
Speaker 1 (10:01):
Sure, Mary, we appreciate you as a listener. I can
certainly see why it would be fun to to having
a kid who's also in the same ages and stages
as us as well. We're you know, our oldest daughters
are going to be turning twelve this year as well.
Speaker 2 (10:13):
That's right, yeah, this summer, and obviously Matt Mary's getting
her twelve year old started off on the right foot, right,
And it's really it's really fun to watch your kid
become kind of a micro entrepreneur. And twelve eleven, twelve
is kind of the perfect age, especially if you feel
like your kid's got some maturity. Like babysitting dollars, especially
(10:33):
in today's economy, they can add up, they can add
really quickly. Like my daughter has been babysitting the kids
across the street a little bit here and there, and
it's so exciting to her to see like money roll in,
to come back home and be like, I was over
there for like four hours. I made twenty bucks, you know,
and the parents are thrilled because babysitting costs a heck
of a lot more than that most of the time.
And so yeah, I think that.
Speaker 1 (10:55):
If you're just the mother's helper though, right exactly is
more like that.
Speaker 2 (10:58):
That's exactly what it is. Yeah, Like she hasn't been
left alone with him yet, but they can get a
lot of stuff done.
Speaker 1 (11:03):
Cooking dinner for them, their laundry as well.
Speaker 2 (11:06):
It's a Cinderella story really when it comes down to it.
But I think doing that getting them excited about like
making some money, then you know that enticing that excitement
about compounding, maybe even including a parent match if you're
up for it, Mary, and if you can, those are
ways to spur your child towards becoming a lifelong investor.
Just getting them excited about like what money can do
(11:26):
for them, and you want her to be able to
enjoy some of that money now, of course, But you know,
I think also getting excited about how those unspent dollars
ten and will grow. That's pretty neat too, you kind
of want to both end.
Speaker 1 (11:38):
Yeah, that's the personal finance education that's taking place. But
at the same so you are instilling those values, which
is amazing Mary. But on top of that, I mean,
let's imagine a three thousand dollars contribution towards a roth
IRA for over fifty years. Let's say from age twelve
to sixty two. So for fifty years there, that's going
to result in over one point two million dollars just
(12:01):
in a roth IRA. Wow, tax free dollars. Incredible. And yeah,
by you helping her to get the experience by investing
some of the money that she's earning, it does both
she gets that financial head start, but also she's learning.
But to your question, how detailed do you need to
be on that record keeping front? I think having you
got to have something right, no matter what, you need
(12:22):
to have something. You don't necessarily need a super fancy
spreadsheet or anything like that. And I think the standard
is lower than it would be for an HSA, a
health savings account, for instance. But because your daughter can
only contribute earned money, you want to make sure that
you are not over contributing to that account. And so
because of that I still think it's really you know,
(12:43):
she Mary is mentioning the spreadsheet specifically. I still think
that is the easiest way, because you could create a
document where you're like, Okay, let me just write a
quick summary, like she's talking about in the memo of it.
Sounds like what she's doing are transfers with her online
savings account. Perhaps she's list the details within that. But
I think what's easier than that is just going into
your Google sheet, which is what I've got going on,
(13:06):
and literally just copy and pasting the previous line, changing
the date, and updating the hours so it doesn't have
to be the super complex It's been so long since
I've updated my spreadsheet formula. I'm into it, but I'm
not creating these complex functions. If then also, you know,
like all that sort of thing.
Speaker 2 (13:22):
It's really two inputs. It's like the date that work
was accomplished. I've got four like literally i got four.
I've got four columns.
Speaker 1 (13:27):
It's the dates, the number of hours, the rate that
she's being paid, and then the total okay, number of dollars.
Speaker 2 (13:33):
Even that you could probably get by with a little
bit less information. But it's super easy though.
Speaker 1 (13:36):
But especially that's the thing, like literally the ability to
just to copy and paste and then updating that. And
it's not like I do that. I'll be honest, I
forget sometimes like I always pay her pay my daughter.
But you're not perfect. I'm not perfect. But sometimes it'll
be a few weeks before I'm like, ohoot, I haven't
sat down an updated that, and I'll sit down and
essentially I just kind of batch update that sheet, and
(13:58):
what this actually looks like will be a work in progress. Again,
the whole point is to get them investing. I haven't
sat down yet, but I'm envisioning that will also down
with her at the end of the year and we'll say,
all right, this is how much you officially earned over
the course of the year. You can invest every single
one of those dollars in the account and tall you know,
run some compound interest calculators calculations Mary like you are,
(14:18):
and hopefully she will want to invest a lot. But
then making it clear that hey, I'm willing to provide
a parent match. It doesn't have to be this extraordinarily onerous,
heavy exhausting task that you need to do every single
time she earned my buck.
Speaker 2 (14:30):
I think what you're trying to do by creating the spreadsheet.
And what Mary's probably trying to do too, or should
be trying to do, is to avoid putting money into
a ROTH I rate that wasn't earned income. So for instance,
your daughter's probably getting money from birthdays or holidays or
stuff like that. And like over Easter, my kids got
five bucks in their last Easter egg they found Matt,
but that money can't be contributed to a ROTH because
(14:53):
it wasn't earned and so you want to separate those
things out. And that's where the spreadsheet comes in handy.
It's not like, oh, every money or every dollar that's
in her account can be contributed to this ROTH. That
can't because if some of those were gift dollars, they're
excluded from that contribution ability. So true, that is why
I think you want at least some documentation. And I
do think Mary, you're right, like I'm not a spreadsheet.
Speaker 1 (15:11):
Guy, just to make sure you're on the right side
of the law, right exactly.
Speaker 2 (15:14):
Yeah, you don't want to be Jesse James in this thing.
And then when it comes to where you open it,
Fidelity is for sure a great place to open a
kid's ROTH. I mean, it's one of the few places
we would wholeheartedly recommend you can avoid fees and account minimums.
She'll have access to cheap, incredibly diversified funds. And then
wherever she starts investing, and this is I think one
(15:35):
of the lynch pins here, it's likely where she'll remain
as she enters adulthood. Like my first four one K
was with Vanguard, and so I ended up opening multiple
accounts with Vanguard over the years. Eventually I opened up
an account with Fidelity too, But it was one of
those things where like, hey, this is where I started,
It's probably where I'm gonna stick around, and that will
likely be true for your daughter. And I just can't
(15:57):
think of many better options than being with Fidelity over
the long haul, based on kind of all the things
that Fidelity prioritizes as a company exactly.
Speaker 1 (16:05):
Yep.
Speaker 2 (16:06):
And she's you know, she's not going to get a
match like she would with maybe some of the newer
brokerage firms, the betterments and the robin Hoods, those might
be worth considering. But I think the more boring nature
of Fidelity's website, it's actually like a pro in a
weird way actually.
Speaker 1 (16:22):
To her long term and financial advantage.
Speaker 2 (16:24):
Yeah, I mean, I think it might help her avoid
some of the perils of investing too, because if let's
say it is in a super flashy account and she's
checking her balanced a little more, and she's like, there's
all these pop ups about investing in crypto or individual
stocks or leverage ETFs or something like that margin investing, right, Yeah,
(16:46):
maybe as a seventeen, eighteen, nineteen year old investor, she
might be like, Oh, that looks like fun and get
kind of dissuaded from doing the normal boring thing that's
really going to build wealth over time. And our kids
are just a little bit younger than yours. They've just
their toes. I think into this world really of making money.
But I think kiddo rods. I don't know about you, Matt.
I'll be curious to see how that conversation goes with
(17:07):
your oldest. But yeah, I'm hoping that for my daughter
that I can do kind of a parental match and
incentivize her to get started investing really soon.
Speaker 1 (17:16):
Heck, yeah, I think it's let's mention an app we
actually talked about on a recent episode that's called half
More like like mackelmore but half more. But their goal
is to help parents to find ways to pay their
kids for chores around the house so that they can
contribute even more to that roth Ira. But the problem
here is that there's this annual one hundred and forty
(17:39):
four dollars fee that's attached. It's not super unreasonable, I guess,
and it will help you to jump through the some
of the compliance hoops. I like what they're trying to do,
but the real winning part of the app is being
able to assign certain chores at home and paying your
kid in a very irs compliant way if she's making
money outside the house. Though, DI, why bookkeeping and just contributing,
(18:03):
you know, in that sort of manner. I think that
should suit y'all just fine.
Speaker 2 (18:06):
It's almost like bringing a bazooka to a knife fight, like, yeah,
you probably just seems unnecessary. Yeah, and it doesn't answer
like well, I remember during that conversation when a listener
brought that to our attention, one of my concerns was
the fact that is the data yours and this is
an app, and like a lot of businesses today, they
are reliant on subscribers, which means folks who are willing
(18:27):
to kind of continue to pay that fee even if
they're not fully utilizing that service. And I would certainly
want to make sure that you could at least export
that data to where you had some sort of record
of that, not feeling like you had to monthly fork
over the change in order to maintain the data that
you've accrued and built up over the previous years. It's
(18:47):
really unnecessary for most parents unless you're really trying to
jump through some hoops and pay your kids for chores,
and that app can help you do that. By the way,
you're the custodian of this account, Mary, and she'll be
given full control when she reaches what's known as the
age of majority, which is typically age eighteen some states
it's twenty one, just depends where you live. And hopefully
(19:08):
you're gonna be able to get her excited to contribute
a not insignificant amount over the coming years while she's
still under your roof, because gosh, you've got like what
probably five six more years with her, and then she'll
hopefully have this ingrained as a habit. She'll keep contributing
more when she's out on her own, maybe even when
she's got like a part time job in college or
something like that. That early start is so clutch, and
(19:31):
the kind of doing it together over a number of
years while you still have this significant influence over her
life is to me, it's invaluable, and it just means
she's not gonna have to contribute nearly as much of
her future income because of her diligence as a preteen
as a team.
Speaker 1 (19:48):
But she probably will because not only do you have
this financial momentum going for you, she's got this identity,
this behavioral momentum going as well, because she all of
a sudden sees herself as that investment.
Speaker 2 (19:58):
You mentioned the one point two million dollar number, Matt.
That was if she saved one hundred and fifty thousand
dollars essentially over fifty years. That's amazing how much that
amount of savings will grow into. But if she just
thinks about it, if she doubles that because she gets
so into investing, I mean, this guy is the limit.
Speaker 1 (20:14):
When you start that young, that is a lot of money.
We've got more to get to. We're going to talk
about investing in a shaky economy. We've got uncertain times
a foot Joel, So we'll get to that plus more.
Right after this, we'll back.
Speaker 2 (20:33):
We've got more money questions to get to. Let's get
to a question now, Matt, about someone who listens to
the show and they're worried about their parents potentially choosing
a bad financial product.
Speaker 5 (20:45):
Hey, Matt and Joel, this is Hayden from Marlboro, New York.
You guys made a pass in comment in a recent
episode about the sky high fees associated with reverse mortgages,
and I was wondering if you could talk a little
bit about that. My parents have recently discussed that as
a big part of their future plans, recommended by their
financial advisor, and they gave me some articles to look
(21:06):
at and read, but I didn't see anything in there about,
you know, particularly high fees. So I was hoping you
guys could just touch upon that and maybe I could
send this episode along to them so they're informed enough
to make the decisions that they need to make, you know,
in their retirement. Thanks very much, Cheers, Joral.
Speaker 1 (21:22):
Did Hayden say cheers because like us, he is a
fan of craft beer, or from a cultural standpoint, he
just likes to party. He's like cheers. Does he like
the old school television show Cheers with Norm oh Man.
I watched those. Yeah, my dad was a huge Cheers fan.
I was probably one of the few six year olds
that had seen like all this season.
Speaker 2 (21:43):
I don't know if that's good parents, You're bad. But
there was more of a Gilligan's Island fan myself, So.
Speaker 1 (21:48):
See, I watched a lot of Cheers as a kid.
Obviously a lot of jokes went over my head. But
also Dallas, did you? I never watched that. That was
the I can still hear the theme song in my head.
Think about how bum bum bump bump bump bum bum
bum bum bum bum bum bum there you go. Thank
you for serenading. I'm gonna keep going.
Speaker 2 (22:08):
Think about how tedious it must have been to write
some of those shows, like taking place all in one
bar or all on a deserted island like it did?
Did it not just like wear thin after a while?
Speaker 1 (22:18):
I'm sure did. Having limits and boundaries around what it
is that you're trying to do it can be even freeing. Perhaps. Yeah,
maybe I don't know. I've more creative writer to a
show I gotta imagine.
Speaker 3 (22:28):
Maybe I don't know.
Speaker 2 (22:29):
All right, let's talk about reverse mortgages. So, so, Hayden,
I love that you're wanting to help your folks out,
and let's just like maybe talk about what are reverse
mortgages real click because some of them might be saying,
I've never heard of this. What is this financial product? Well, basically,
instead of paying a monthly mortgage to own your home,
which is what most people are doing for fifteen or
thirty years, most people thirty, let's be honest, you're being
(22:50):
paid to access the equity that you built up. And
the upside is that for cash strapped seniors and I
say seniors because you have to be sixty two years
or older or you're not allowed to take out a
reverse mortgage, they are able to stay in their homes
while getting a steady stream of monthly income to cover
their bills. So it feels like for a lot of
(23:12):
senior citizens, this win win. If there's no other place
to grab cash, it's like, well, I get to stay
in my home and I have money to spend every
month that otherwise where would I have found that money?
And so in addition though to the fees that we're
going to discuss, a reverse mortgage comes with downsides. So
in particular, if your parents care about you and your
siblings inheriting the home at some point in the future,
(23:34):
a reverse mortgage limits that possibility. But Matt, we've got
to talk about the fees, and yeah, I feel like
I just made a reverse mortgage sound pretty great, stay
in the home, money coming in every month.
Speaker 1 (23:44):
Yeah. No, let's set the context. Let's set the table
here a little bit, because it's interesting that Haydn's folks
are leaning towards a reverse mortgage and that their advisor
has suggested it as a smart approach, because it might be,
but if their advisor has helped them ahead of time
to build up anest egg over the years, it might
not be necessary. The advisor's goal should be that they
(24:05):
do not have to actually get a reverse mortgage, because
a combination of well timed tapping of social security, typically
by waiting longer, it's gonna lead to a better outcome,
at least for one of the parents. They're one of
the partners that plus tax advantage accounts, and in addition
(24:25):
to that, maybe some frugal living there on the side
that should hopefully be enough for them to live off
of for many decades. A reverse mortgage is almost always
considered an option of last resort in order to make
ends meet in the event that the combination that I
just mentioned of investments of social security if it falls
short of the type of spending that they're looking to
(24:46):
be able to perform and do in their retired years.
There So, again, decent planning should allow folks to avoid
this product altogether. But assuming based on the fact that
they're talking about it, sounds like maybe that's not quite
the case, and so they're looking at what they have
on hand to be able to satisfy the type of
retirement that they're looking to live.
Speaker 2 (25:03):
You might also see by the way a reverse mortgage
referred to as a home equity conversion mortgage, that's just
a fancy way of saying the same thing. It's just
a different name for the same beast. But basically, yeah,
you're grabbing money from that property instead of paying it
off and then gaining liquidity from in the liquid asset.
As we all know, that's not easy. So the fees
are high as they are with the traditional mortgage. We're
(25:26):
talking origination fees, closing costs, appraisals, tidle search, all the above.
It's very has similar characteristics to taking out a mortgage
on a primary home, and you can typically have those
fees taken out of the loan amount, so maybe it
doesn't feel as bad, but they're still getting paid. And
when your parents are still the ones paying the fees,
(25:47):
they beginning charged interest in servicing fees as well as
a mortgage insurance premium, so.
Speaker 1 (25:52):
It all gets rolled into the Essentially it gets papered over,
so it feels nice and tidy. Yeah, like, where are
those fees at that the boys we're talking about, And
it turns out they're in there. It's minimizing the amount
of money they can take out of the house. And
so one of the tough things about a reverse mortgage
is that when there's this litany of fees being assessed
in different ways, it's just hard to get an accurate
(26:14):
account of exactly exactly what it's going to cost you.
But when you read the fine print, you might be
shocked to realize just how many thousands and thousands of
dollars are coming out of this asset. As it's like
you're trying to get blood from a stone or something
like that, Matt, and that's hard to do. And the
same thing is true with a home. Yeah, it's always
(26:35):
expensive to tap that home for money. Yeah, it's just
hard to gauge because of the fact that it's all
getting rolled into one. But it is still happening. By
the way, let's look at some stats here. Close to
one in five reverse mortgages, they actually end in foreclosure,
often because the senior citizen there was unable to pay
property taxes. So this often works out poorly, which should
(26:56):
throw up an immediate red flag. So Hayden, for your
folks man, prior to getting a reverse mortgage, I would
carefully assess the costs, specifically the fees there, Joel, you
mentioned so home equity conversion mortgage. That's the term specifically
given to the FHA backed reverse mortgages. But there's also
(27:16):
private reverse mortgages out there as well, which might be
even more appealing to some folks because they're saying, Oh,
I can go through this private lender and I can
get a reverse mortgage at the age of fifty five.
I don't have to wait another seven years live like
a popper in the meantime. But guess what that comes
with even higher fees, even worse rates, even worse aprs.
Especially that's where it starts really getting ugly.
Speaker 2 (27:37):
Yeah, agreed. So I would say suggest considering other alternatives
if I was your folks and they were like, we
just can't afford to live in this house anymore. We
want to, but we can't afford to live in it
anymore with what we've saved and with the social security
that's coming in and live the lifestyle that we want.
So consider selling or downsizing, or even a cash out refinance.
(27:59):
Could be better. Could be better, I say, because that
isn't a great option either, but it could be better
than a reverse mortgage. They can invest cash, that cash infusion.
They could draw it down over the coming decades potentially,
or turn it into like a monthly stream of income
with what's known as a single premium annuity, which does
it's like also known as an immediate income annuity, which
(28:20):
is one of the cheaper annuities out there. There aren't
many good annuities out there. A reverse mortgage just isn't
the only viable option. It's just the one that gets
the most press because it's the easiest. But the easiest
thing isn't always what's best. And then you know, if
they do decide to go in this direction, they're going
to have to meet with a HUD counselor if they're
going with one of those HUD initiated reverse mortgages. Matt right,
(28:43):
the Consumer Financial Protection Bureau still around the heartbeat, barely beating,
but they have a list of questions that your parents
should be asking that will link to in the show
notes at how tomoney dot com. Make sure they take
a look at that. They to be armed with the
right questions is really important before they do this. And
just know too that inheriting a property with reverse mortgage
(29:05):
that can be a nightmare as well. So again, not
sure if that's in the car or if that's a
hope for you or your siblings, but no, that's a
pain of the butt if they are in the middle
of a reverse mortgage. These complex products, Matt, they remind
they remind me of like some of the commercials for
fancy new pharmaceutical drugs. I like the idea if I
had restless leg syndrome of getting rid of it, right,
but the cure often rests we're talking about, right exactly, Yeah,
(29:28):
I mean, fortunately, my legs not restless at all. But
when you hear the side effects for some of those things,
like it's it's like, man, the cure is worse than
the disease. The side effects can be truly awful on
some of those drugs, and I don't know what percentage
of the population develops like a face rash or something
like that after taking that drug, or or something even worse.
But it's important to know that a reverse mortgage. I
(29:49):
think of it like some of those pharmaceuticals where it's like, yeah,
it'd be nice to get rid of that problem, but
is it creating other problems that are are even more nefarious?
Speaker 1 (29:56):
Potentially That's true. Joel's new X handle Maha Jole just kidding.
Jill doesn't have anything again. It's big pharma. No.
Speaker 2 (30:05):
Yeah, we're all excited about our new fruit loops with
blueberry dyes.
Speaker 4 (30:09):
Right.
Speaker 1 (30:09):
Oh yeah, Oh, I need to tell you about this.
I had some algae the other day in this like
this smoothie bowl that was it was like crazy blue.
I'm just like, what is in this to make it
that blue? And evidently it's this blue blue something and
they pulverize it, grind it up into this powder and
they sprinkle it on or they mix it into smoothie
blue something. It gives it this crazy bright blue. It
(30:31):
does not look natural, but evidently it is. Is it?
We can expect more of that because it blue number sixteen.
I want to say blue spirillina or something like that,
but it's like a blue green. It's yeah, okay, naturally
carrying an algae. I guess it comes out of the ocean.
Speaker 3 (30:45):
Here.
Speaker 1 (30:45):
We can look forward to more stuff like that.
Speaker 2 (30:47):
What a spectacular world we live in.
Speaker 1 (30:48):
All right, Let's get to another listener question. Joel is
here from a return collar. That's what they call it
in the business, a return collar. This is so old
school a listener, which is funny because I never listened
to it. But this is a listener who has prepared
for a sabbatical. She's got this plan break coming up
and wants to know how she should be investing.
Speaker 3 (31:07):
I met and Joel, this is Yessel from New York City.
I'm calling in with another question. Thanks again for everything
you've been doing for the how to Money community. So
we all know that the stock market indexes are falling
and the financial future is pretty shaky for a lot
of us. I've considered myself someone who can pretty much
keep my emotions out of my investing and saving strategies,
(31:28):
and I've been continuously investing a set amount twice a
month to my brokerage account, and last year I maxed
out my traditional IRA and my set IRA. I have
a fully funded emergency savings account and a fund for
the sabbatical which I've just started. So obviously, pausing on
making money while thinking of investing is kind of making
me nervous. Now, I'd like to hear your thoughts about
(31:50):
how I should go about contributing to my investment accounts
for the time being. What are your thoughts about how
to invest wisely? So should I pause for a period
of time while not touching the accounts? Should I continue
to invest just as I have been, or should I
continue to invest but maybe with less money. Just for context,
I have a Fidelity brokerage account that's invested in the
(32:13):
total US stock market at sixty percent, total international market
at twenty percent, and small cap index twenty percent, and
I have the same allocation breakdown for my step IRA
and traditional IRA. Thanks for your help, guys.
Speaker 2 (32:28):
Yes, we always good to hear from you, and I
love that you've been able to mostly keep your emotions
out of your investing and that is something. I don't
know how often we talk about that map, but that's
like so important, right, And sometimes that looks like checking
your investments a whole lot less if you're keen to
like opening that for one case statement every month. I
(32:49):
don't know, if you follow the news and you're like, Eh,
doesn't seem like it was a great month. Maybe I
shouldn't look at the potentially substantial lower big number at
the very bottom of that statement minute, right, because recoveries
are always a reality. How long it takes to get there,
that's anybody's guess. But yeah, I think it is easier
(33:09):
said than done, but it's a really important thing to do,
basically trust the process, right.
Speaker 1 (33:14):
It's not easy. But like I think that that's I
feel like there's two there's a couple questions going on here,
and that's one of them. Because she's like citing the
unsteady economy and market fluctuations as causing her to second
guess it. And while you might rationally know that you
should be continuing to invest like you normally would, what
are you actually doing in reality? Right? Like, Like A,
(33:37):
that doesn't mean it's easy, you know, you rashally know
what it is that you should be doing. But then
the emotions kind of kick in a little bit. You
start getting a little bit nervous, especially as she's I guess,
experiencing some other life change that she has planned for.
But still it's I guess it's sort of the confluence
of these multiple things that are taking place that I
think is causing her to second guess her investing. And
I think it's I think.
Speaker 2 (33:57):
It's helpful to look at history because I get kind
of someone might say, well, what if someone was coming
up to your face with a and then we're gonna
swing it at you, swing a baseball bat at you,
you would duck pretty quickly, like you would react. And
so I think a lot of times when something fearful
appears to be happening, action seems like the best thing
to do, right, It's like, I'm gonna avoid the bad thing.
Speaker 1 (34:17):
But when you look at the.
Speaker 2 (34:18):
History of the stock market, the bad thing, how long
does it impact the stock market? Sometimes it's for years, right,
but even just look at the COVID bounce back, or like,
it didn't take that long for markets to correct after
a substantial drop. So and the thing is that the
worst possible reality is that you're missing out because you
try to avoid the pain. You're missing out on the comeback,
(34:41):
right that stocks will eventually get around to.
Speaker 1 (34:44):
And aside from even because somebody might hear you say
that and be like, well, yeah, that's because the government
pumped tons of money into the economy to facilitate that
bounce back. But even like looking further back into history,
even looking back to like this is a world that
has endured the dropping of an atomic bomb, multiple atomic bombs, yeah,
and then decades beyond that the threat of like nuclear annihilation,
(35:06):
like on a global level, But what did the stock
market continue to do? Like these are things that we
continue to move past. It has a lot to do
with I guess who you're reading, like the headlines that
you're looking at, Because there's some folks who say that like, no, man,
it's different this time, But I think that's always the case,
like just the classic first it's the classic line, it's
different this time, But I don't think it's actually different
this time. That's that's I guess the more positive, optimistic spin.
Speaker 2 (35:27):
Yeah, well okay, so you know, we want most people
to continue to invest when markets aren't doing so great,
And I say most people, maybe not everyone, and maybe
not yesl and I'll tell you why.
Speaker 1 (35:36):
Yes, Well, the average.
Speaker 2 (35:38):
Person is buying shares at a lower price. They're buying
stocks on sale when the market is down, which is great.
And we think that most people shouldn't change a thing,
like most people listening out there right now, if nothing
has changed in your life, you should probably be investing
in the same way that you always have been, you know,
keep on dollar cost averaging into those low cost index
funds or the target date retirement fund of your choice.
(35:59):
But Matt, I think Yessel is in a little bit
of a different scenario. She's about to take a sabbatical,
which means no income, right, That's typically what a sabbatical
means is like, Hey, I'm not gonna get paid for
potentially an extended period of time, and so I get
the desire to keep investing, especially if you yes, I'll
identify yourself as an investor, I'm gonna keep doing the
(36:19):
thing like that's that's what I'm doing. I'm building wealth
for my future. But with no income coming your way
for a little while, investing out of your excess savings,
it might not be the best choice. It could truncate
your sabbatical timeline or cause undue worry and unstress. Right
that it could even prompt you to feel like you
had to find a new job quickly when you're you
are ready to re enter the workforce, and you might
(36:40):
have to settle for something that's not ideal, maybe even
that pays less than you could have got if you'd
been able to hold out. I think investing on savings
that you might need to live off, I just don't
know that's a great idea.
Speaker 1 (36:53):
Yeah, But I think that's the difference then, too, between
because what she was saying though, is that she not
only has maxed out her retirement accounts, which is great,
not only does she have a fully funded emergency fund,
but then she also has a separate fund for the
actual sabbatical. And that's where I feel like that this
feels to me more like an emotional response as opposed
to the actual dollars, because it looks like it sounds
(37:15):
like she's investing for her future, way off, way off
into the future, in which case you see the market
like you said, on sale, and it's just like this
is a great opportunity as opposed to somebody who might
be nearing actual retirement right, not in many retirement, but
like the full blown, real, fully fledged retirement. That's the
kind of scenario where I think someone getting nervous about
(37:35):
the market and finding ways to diversify even more makes
a little bit more sense as opposed to I think
the situation that Yessel finds herself in, which so I
guess at the end of the day, for me, like,
I don't see you needing to make any sort of
change to how it is that you're investing, assuming that
you've planned to invest because of the fact that you
have had those funds set aside. Yeah, if you truly
have enough money to do d all the above, then
(37:57):
keep on truck. I mean, don't let the current state
of things freak you out to not do exactly That's
I think that's I don't know, at least that's what
I'm picking up from Yesla's question.
Speaker 2 (38:07):
We throw out another option, though, Matt, and this might
be something. It didn't sound like Yesselhead considered this, but
I think this might be an even better use of
some of those dollars right now. What if instead of
investing new dollars, Yessel consider doing strategic groth conversions instead.
So when you're taking a sabbatical, that means again that
you're not making money. Your income is dropped off a cliff,
(38:29):
which means that any money you do make is going
to be taxed at a much lower rate in all
likelihood than it was the year prior. So you know,
if your single income up to forty eight thousand dollars
is going to be taxed at the twelve percent rate,
that's on top of the standard deduction. If you're married
filing jointly, any income up to ninety six thousand dollars
is going to receive that more favorable tax treatment. We'll
(38:53):
link to an article that we have on our website
about this. But this is one of those situations where
investing more is one way to go, but investing less,
doing strategic Wroth conversions and recategorizing that money and never
having to pay tax on it in the future could
be could be a better move than just continuing to
(39:13):
throw more dollars into those accounts.
Speaker 1 (39:15):
Yeah, and especially in a year where you're going to
pay less to Uncle Sam, that is a brilliant strategy.
Speaker 2 (39:19):
And so the money that would have gone into that
account is now going to go to pay taxes, which
feels really unsatisfying. But when you think about holistic tax
planning strategy, the whole goal is to pay tax at
the lowest rate possible. And that's what you're doing right
when when you're doing a Roth conversion in a year
where your income is paltry, you're taking advantage of that
(39:40):
that long view tax planning, and you're saying, no, no, I'm
going to prioritize ROTH in this year because it means
less taxes for Yessel in the future.
Speaker 1 (39:48):
Yeah. Future, Yeslo, I think is going to be very thankful. Yeah,
And I think future Yessl's gonna be thankful that you
took a sabbatical as well. We're big fans of taking
these many retirements along the way instead of just the
tip nose to the grind stone approach, where someday, way
off in the future, you will retire highly underrated. Let
us know how it goes, and we wish you the best.
(40:09):
But Joel, we've got more to get to. We're gonna
hear from a listener who is having a tough time
letting go of the idea of having a brick and
mortar banking institution at his or hers fingertips. We'll get
to that and more right after this. All right, we're back.
Speaker 2 (40:31):
We've got more money questions to get to. For now,
let's get to the Facebook question of the week. This
one comes from Matthew, who said, my wife was about
to make a contribution to her roth ira, but she
didn't make any money herself, as she stays at home
with our son. Does my income count as her income?
And can she invest in a roth ira? Or am
I the only one able to invest in a roth
(40:52):
ira as I have income and.
Speaker 1 (40:54):
Not her classic I think Matthews isn't the only listener
Joel who's been confused by this, because you're told that
to invest into roth ira, we may have even said
this today, you have to have earned income, and so
your wife isn't currently working, she does not have earned income.
It seems like she would be ineligible, but of course
that is not the case, because these things are never
(41:17):
quite as straightforward as they seem. The IRS recognizes the
shortcomings of that rule. Your wife is eligible to contribute
to a roth ira in the form of what's called
a spousal wrath. So that's the wrath account that we
really rarely talk about. Joel, even if she didn't actually
personally earn a dime in that given year. True.
Speaker 2 (41:35):
Yeah, that is specifically the perk when you are married
filing jointly. So just remember that your total agi your
justin gross income would have to be above what you
contribute to both accounts, which I'm assuming it is, assuming
that you're making more than fourteen thousand dollars a year,
seems reasonable, you know, making contributions to one for you
(41:56):
and one for her. That's obviously a really smart move.
We want couples across the country to continue striving towards
that goal of maxing out too wroth iras every single year.
And the fact is that even if one person in
the house stays home, they are they're doing a valuable
service to the family, and they also deserve to and
are allowed to legally contribute to that WROTH. So what
(42:19):
if it's a threatle Joel, Then that's a good question.
Speaker 1 (42:22):
Is twenty one thousand dollars can you marry? I don't
think you can married filing multiples like no, No, I
don't think that rescounts that. Don't forget in the back
end of your brokerage account or in your brokerage where
you do your investing, not your brokerage acount. You're not
going to actually see something that's that's labeled or titled,
or there's not going to be a link that says
open spousal wrath. You just contribute to a regular old
(42:44):
wroth IRA for her like you would for yourself. There's
no actual special designation. This isn't some sort of special account.
It's that's how it's more of a process as opposed
to like an actual account. It's a colloquial way of
talking about it.
Speaker 2 (42:56):
Even though when you go in the back end of
the account to open it or to contribute to it,
that's not how it's going to.
Speaker 1 (43:01):
Be label now. You're not going to find that there.
So I agree that maxing out two roths year in,
year out, if possible, that's going to garnery you some
incredible financial freedom over the decades. Get at Matthew Joel.
Let's hear from another poster from anonymous who writes, one
of my financial fails is having my E fund in
a credit union savings account earning less than one percent.
(43:21):
I just threw up a little. I know I need
to move to a high yield savings account. But something
about an online bank versus a brick and mortar local
credit union seems scary for any emergency fund, even though
I know we could transfer as needed. Has anyone else
had this hesitancy? What do you think, Joel? Have you
ever felt this?
Speaker 2 (43:41):
Honestly, now, I hae a roadblock. I have zero need
for brick and mortar institutions or some institutions, but not
banks in my life. And I guess I get why
some people might feel, especially like if you own a
small business, you're regularly making deposits of that physical bank
or something like that, you might be reticent to kind
(44:01):
of do away from that sort of Oh I go
to my bank to do things a relationship, But I
think most people don't have any need for it, And
so first off, I do want to stress that we
love credit unions right, but also they're better for borrowing
than they are for saving most of the time.
Speaker 1 (44:20):
Need not alone.
Speaker 2 (44:20):
Credit union is a great place to go mortgage or
a helock. I would look to a credit union first,
high old savings account that, though I would say is
best done at an online bank. They're different tools for
different purposes, and I want to use the right tool
for the right problem. Our favorite online banks are typically
although maybe not always, but typically better for savings purposes.
(44:43):
I would love to see folks you utilizing both of
these institutions for what they do best. I have a
relationship with a credit union, I have had one for
a decade and a half and I will continue to
have that relationship. I've had a relationship with an online
a high old savings account at an online bank for
a I didn't have to probably at this point, and
I maybe longer, and I will just continue to have
(45:04):
both those relationships and they will just serve me for
different needs that I have.
Speaker 1 (45:08):
Totally. Yeah, it's also important that even in an emergency,
you don't typically need to pull cash out like right away,
like right now. Instead, you can use a credit card,
which buys you time right like you still have the
cash on hand in your account to back it up.
But I can't think of too many money financial emergencies
that I've encountered that required me to get a load
of cash from a bank as soon as humanly possible.
(45:31):
And then on top of that, our favorite online banks
they tend to have good fee free atm networks as well,
So if you actually are in a situation where you
do need the cash on the spot. You should be
able to access at the very least hundreds of dollars
in a day. The branch doesn't even need to be open,
like you just go to the ATM. That's a part
of the network. That being said, if you do, I
(45:53):
think another way to alleviate this problem would be just
to have some cash at home, because if you do
feel that there's some comfort in having that, I don't know,
like literally one thousand bucks, a couple thousand dollars hidden
away somewhere in a secure spot. If that allows you
to then move the thousands of dollars of your actual
emergency fund over to a highield savings account where you
are experiencing or earning interest. I think that could be
(46:16):
a way to hide your cake and eat it too.
That's why you have all those gold bars buried in
the backyard exactly just in case. Right, Yes, no, you
never know what's going to happen. It's it's so unlikely
for that. Actually, the crazy emergers, if the Last of
Us becomes real life event to take place, it's far
more dramatic, but very unlikely to happen. Whereas inflation and
your savings getting eaten away by that inflation, it is
(46:39):
much much less dramatic, but very likely. That is very
likely to happen. So we want you to be prepared
for both, I guess in a way, but for you
to not pay the financial price for having all of
your cash in a local credit union branch.
Speaker 2 (46:53):
It's an underconsidered fear, right is inflation, because it is
that persistent reality that most people just don't pay any
attention to. We have, of course paid more attention in
recent years, and hopefully that's caused more people to think
twice about where they bank and the rate of interests
they are getting paid. But I do think you're right, Matt,
Like for this poster, I don't want them to fret
about instant access to all their money. What's I mean?
(47:15):
In what case is that really necessary? The biggest thing
is to make sure you've got enough saved and that
you're getting paid close to market rate on your savings.
That's three and a half to four percent these days.
That's what I'd be looking for. CI is still paying
top tier rates betterments. Cash account is fantastic too. Depending
on how much you have saved, you know, we might
only be talking about a couple hundred bucks this year
(47:36):
in extra earnings, but up in your savings rate by
going with a bank that pays those super high rates
and consistently pays those high rates for years to come.
That's not insignificant in the grand scheme of things. And
the truth is, wow, brick and mortar might seem like, oh,
I can like a relief of some sort. Oh I
can go get my money in an instant when I
need it. Well, money, there's so many other ways to
(47:57):
tap money instantaneously, and even just having a little bit
more in cash at home that if that can provide
that relief. So you can do business with a better
bank that pays you what you deserve on your savings.
Speaker 1 (48:06):
Do that, Yeah, And honestly, the kind of event that
would cause you to rush to the bank and withdraw
a bunch of cash, I don't think that necessarily means
that you would be able to do that with a
local branch. Yeah, because I think whatever unlikely but yes,
terrible event that would take place would hinder something like
that as well. I don't know. I just like focusing
on the things that I think are more likely to
take place. Like, because then your mind starts going to like, well, man,
(48:28):
maybe we should have some bottled waters and the first
aid kit and throw that in the bug out bag.
And there's folks. I'm not a prepper, but I know
certainly some folks do that. But for me, a few guns,
you know. But you know what I have done in
recent years, more often than not, is pull the old
generator out of the garage. Fire that thing up so
that I don't end up losing all my groceries in
the fridge like that kind of I mean, that seems
(48:48):
like a much more I guess, practical and likely outcome
of the grid going down or even just getting hit
by a big storm. Right Like you're saying zombie apocalypse
is not likely to happen, Say, it's less likely as
a a big storm hitting your town and then it
takes several days before the power gets turned on. What's
happened to a whole lot of folks. It's less interesting,
but you're probably right makes for less entertaining TV, that's
(49:10):
for sure. True story. Well hope that's helpful, Matt. Let's
get back to the beer we had on the show.
Speaker 2 (49:15):
This was I picked this up when I was in Texas,
and this is from a brewery that's actually in Pennsylvania
that doesn't distribute to where we live, and it's called
Tired Hands. This one is called double dry hopped Refreshing.
Speaker 1 (49:29):
Can't get these in Georgia.
Speaker 2 (49:30):
No, we've only had one of their beers before on
the show, was the Sayson. I still remember that beer
as being fantastic. What was your take on this IPA.
Speaker 1 (49:39):
Earthy had a nice bitter bite to it, but the
hoppy flavors. It reminds me a lot of burial beers
as well, which we've had a lot of those on
the show recently, where it's more vegetable and less tropical,
Like it's kind of got like this earthy. Oh, it's
so funny. I feel are the brazil nuts. We've had
some of those at our house recently. The kids are
alway like, it tastes like dirt. I'm like, how do
(50:03):
you know what dirt tastes like? It tastes like what
you've seen your kids, what wet dirt smells like or
wet earth smells like. And this kind of has that
a similar vibe going on. It just it feels like
it's a beer of the earth less floury for sure,
but uh yeah, really really tasting really good.
Speaker 2 (50:18):
So this is gonna sound negative, but I mean it,
it's a positive. Like if I was to rub some
light sandpaper across my tongue, like this beer sticks to
my tongue in that way. It's it's got this like
sappy goodness, this dense, juicy vibe like you're licking a
piece of felt. Yeah, but also this like chalky consistency.
And I mean this in the best way where this
this beer just has like these texture notes that are
(50:39):
rare in an IPA just doesn't slide down your throat.
It's like it's trying to wrap around every single one
of my taste buds, and I get that.
Speaker 1 (50:46):
I'm down with that.
Speaker 2 (50:47):
Like I really enjoyed this beer. I would love love
to try more beers by Tired Hands because the two
I've had have been thoroughly enjoyable.
Speaker 1 (50:56):
So they've been top notch.
Speaker 2 (50:57):
Yeah, most def.
Speaker 1 (50:58):
Glad you and I got to enjoy this one today.
That's gonna be it for this episode. Find our show
notes over at howtomoney dot com. That's also where you
will find lots of different resources over there. But Buddy,
that's gonna be it for this episode until next time.
Best Friends Out, best Friends Out,
Welcome to How to Money. I'm Joel, I'm Matt.
Speaker 2 (00:03):
Today we're going to answer some of your listener questions.
Speaker 1 (00:24):
And that's because if we answered all of your listener questions,
we'd be sitting here for at least another hour before
we run out of all.
Speaker 2 (00:31):
The question the meaning of life, Matt, that question came in,
we were like, we'll pump that to a future episode.
Speaker 1 (00:35):
Maybe we'll say that one for the Ask Me Anything,
which is an upcoming special episode. You can look forward
to that one. Where should we That's going to be
episode one thousand. I think now is a good time
start thinking.
Speaker 2 (00:45):
If you're listening to this episode and you're like, I
have a random question for Matt and Joel, email it
over to us and it can just just type it
out even if you want, because I have a feeling
a lot of people are reticent to send voice my
most so if you just want to, like type that
question out anything perfectly not finance related.
Speaker 1 (01:01):
Yeah, I want to. I want all the random questions,
but that of the episode one thousand. But today we
in fact are going to answer your financial questions. We're
going to talk about some special the special Wrath account
Joel that we rarely get to talk about looking forward
to that's we're going to talk about your personal fight.
Not you personally, but an individual's personal finances and specifically
investing whether or not she should change that during a sabbatical,
(01:24):
how that impacts her money. We're gonna talk about reverse
mortgages and more plenty to get to during today's episode. Joel,
you want to share your story about your dishwasher. I
think I should your dishwasher saga.
Speaker 2 (01:36):
I so I saw a really incredible deal on this
website called costco dot com for heard of it, bosh dishwashers,
and I say dishwashers with an s mat because I
did not just buy one. I asked my wife ahead
of time if I should partake in this stunt. She
flat out said I don't think so, and yet I
(01:56):
did it anyway.
Speaker 1 (01:57):
Well, the reason why is because she she pointed to
the fact that you've been partaking in this type of
behavior a lot in recent She's like, You've kind of
been stalking up on a lot of stuff recently. She
was like, Joel's he's got tariffs on the mine.
Speaker 2 (02:10):
I'm going off to deepen. Okay, so here's why I
bought not one, not two, not three, but four dishwashers.
I didn't know it was four of the same variety.
Of those three, well, the fourth made every dishwasher a
little bit cheaper.
Speaker 1 (02:22):
So was it? Was it a punch card and the
fourth ones on us something like that?
Speaker 2 (02:26):
Okay, so I was I've not liked our dishwasher, Matt
since I moved in, and it doesn't clean the dishes
terribly well. And even though it's like a nice brand
or something, it's kitchenad. All the rest of our appliances
are kitchen aid. I don't care about matching appliances. I
just wanted a dishwasher that cleans my freaking dishes.
Speaker 1 (02:40):
Just needs to work. Yes, So I'm with you, Bosh.
Speaker 2 (02:43):
If you look at consumer reports, if you look anywhere,
the best, everybody says they're the greatest, easily the best.
Costco had Bosh dishwashers on clearance. The price centered in
ninety seven. You know it's you know, yeah, you know
that it's the cheapest price you're gonna get. On top
of that, Costco said, hey, if you buy multiple appliances,
we'll give you a hundred books off per appliance. Basically,
and on top of that, they said, Bosh is also
(03:04):
offering a deal basically something like two fifty off an
appliance once you get past too, so the deal like
stacked on top, and so the more dishwashers you bought,
the more you saved. Triple word score baby, right. It
was very very much like that. So and free installation,
so that's also pretty nice. I sold my old dishwasher,
(03:26):
get four dishwashers and installed at your house. You're said,
so clearly, I don't need that many dishwashers. So what
I did was I asked friends and family, Hey, do
you want an inexpensive dishwasher? Do you want to go
in with me on this?
Speaker 1 (03:38):
You I thought you might be backed out. I was
just fine. I will say, I didn't know how serious
you work, but like, oh, I let's set the stage,
which was serious. I think I had made some cocktails
where I was were sitting around on the back patio.
The breeze is blowing. It's a Friday, and you had
mentioned that, and I was just like, oh, yeah, dude,
we could. I can totally see us stick in one
of those in I got a like, if not at
(03:59):
our own, at the very least at a rental perhaps,
but I'll.
Speaker 2 (04:03):
Just hold on to it for the future.
Speaker 1 (04:04):
Well that's the problem. I feel bad because I feel
like I kind of left you in the lurch a
little bit. But you're like, hey, this is still available
to you, and I was just like, well, if I
don't take it, what are you gonna do with it?
Because I would only take it. I would only take
it to flip it because I don't currently have any
rentals that need a dishwasher, so a, so I'm not
taking advantage of the free install And I also did
(04:26):
some more digging and this was a three hundred series,
you said, and by all means a great dishwasher, but
evidently it's the five eight hundred series of Bosh dishwashers
that have the ability to dry the dishes really well.
And that is the number one thing that we hate
about our dishwasher really well, specifically plastics, because the dishes
(04:48):
are fine, but the kids we always packed their lunch,
and the plastic containers it's like those little subdivided little
tupperware sort of there are a pain in the butt
to get to a to clean, but then them to
dry the dishwashers, so that that's been the whole impetus
behind us thinking about getting another.
Speaker 2 (05:04):
So you abandoned me, Yeah, yeah, I left you. My
dad he was looking for a new dish washer anyway,
so this was perfect. So he got like a bargain
basement price to us a four also free cost come
installation for him too, which is awesome. And so then
now I've just got to sell two dish washers, two
of them. And honestly, considering the price per dishwasher I paid,
so what was I should be able to profit?
Speaker 1 (05:25):
Yeah?
Speaker 2 (05:25):
What was the final price? Was like fourteen thirty four dishwashers.
Speaker 1 (05:29):
Per okay, so what is that? Come on? Like, it's
like three sixty something? Three sixty per dishwasher, right, and
this is like a nine hundred dollars dishwasher.
Speaker 2 (05:36):
It's like a it's like a seven hundred dollars okaylasher,
but tax also right, so that's literally after tax installation everything, right.
So yeah, I'm going to be able to sell these
on Facebook marketplace for more than what I paid for them.
Speaker 1 (05:49):
I was doing you a favor because economies of scale, Joel,
I was thinking, well, that's why I had mentioned that
I would just flip it. And I was like, well,
if he's going to go through the hassle of creating
the listening take in the picture making it sound like
a legit posting, that's half the battle. That's true. So
I may as well be able to roll in some
additional profit off that second dishwasher dog true story. So
(06:09):
let me help you, help me help you.
Speaker 2 (06:12):
So it's uh, this is the kind of thing. I
think most people see that and they balk at it,
and I'm the kind of guy who says, I don't know,
this sounds like a fun challenge and also of a deal.
It's like a win win where I essentially get this
this free dishwasher put in, and my dishwasher troubles were
over over because I've just had this really fraud relationship, had.
Speaker 1 (06:32):
Enough of it. It was tough.
Speaker 2 (06:33):
My wife was like, it's not that bad, and I
was like, I'm the one who does the dishes.
Speaker 1 (06:37):
It sucks. I yeah, I hate it.
Speaker 2 (06:38):
So I'm happy and hopefully my wallet will be happy
at the end of the day too, because like, fourteen
hundred dollars for four dishwashers, Yeah, that's incredible. Well, in
today's America, mat well, a the fact that you sold
your old one. B. The fact that you're going to
be able to Yeah, I mean you're gonna make Yeah,
I think you. I don't think you're gonna come out
ahead necessarily.
Speaker 1 (06:56):
I think I am. Let's wait and see, but you
might get close. I think I think you're going to
come out ahead.
Speaker 3 (07:00):
Yah.
Speaker 1 (07:00):
Fourteen, Well, how much did you get for your your
use dishwasher? Like hundred bucks?
Speaker 2 (07:03):
One hundred and twenty five dollars?
Speaker 1 (07:04):
Okay, so fourteen down to thirteen? So can you get
six fifty or more? Well?
Speaker 2 (07:08):
No, because my dad's gonna pay for one, but he's
gonna pay the actual price I paid.
Speaker 1 (07:13):
But I think I can, so I gets it down
to thousand. Yeah.
Speaker 2 (07:17):
So I think if I make five hundred bucks each
on Facebook, say, if you make more than five hundred,
you're coming out ahead.
Speaker 1 (07:23):
I'll report back. But I hate to be the boozie
want here, but I'm the one that's holding out for
the super fancy dishwasher that's got crystal dry technology, which
I didn't realize I needed until I did some research.
Speaker 2 (07:31):
It does sound fancy. Yeah, I don't care as much
about that, but yeah, I just the finer things, those
Ideo secrecies. This is something I used to do a
lot more of back in the day, this kind of
weird stuff, find a deal, buy in bulk, sell off
the rest, that kind of thing. Remember, we used the
advantage of the deal to an Urban Outfitters auction and
we would buy stuff that was severely discounted Urban Outfitters
(07:53):
slash anthrow yeah, and we would we would sell that
stuff on Facebook and make a decent buck after even
after transportation costs on it.
Speaker 1 (08:01):
Slash outfit our new house we have any furniture at
the time. So for us, it was just a great
way to again to be able to afford the nicer
things the life.
Speaker 2 (08:08):
Right, So this was my modern version of that ice,
although I realize it makes me sound crazy.
Speaker 1 (08:14):
All right, let's move on.
Speaker 2 (08:15):
Matt. Let's mention the beer we're having on this episode.
This is a ddH refreshing by Tired Hands out of Pennsylvania.
We'll give our thoughts on this IPA at the end
of the episode, and if you have a money question,
whether it's about a weirdo purchase here thinking about making,
we'd love to help you out. Just send your voice
memo over to us if you want the full instructions.
You go to how tomoney dot com, slash ask, or
(08:36):
literally just record your question on the voicement map of
your phone and email it over to us. Matt, let's
get to a real money question a conundrum here, specifically
from a listener who wants to know how or the
details about opening a wrath for a kid.
Speaker 4 (08:50):
Hey, guys, this is Mary from South Carolina. Joel recently said,
you guys need some great listener questions, and I think
I'm pretty great, So here we go. One of the
reasons that we like listening to y'all is because you're
kind of in the same ages and stages. Our oldest
is twelve, and she's starting to earn some money from
babysitting and pet sitting and stuff like that, and we
(09:12):
went over some compound interest calculators with her. She is
pretty excited about those. So wondering how detailed I need
to get with documentation. So far, I've just been putting
memos in the money I transfer into her youth account
with USAA. I don't know if I need to go
(09:34):
all in like Matt and do a spreadsheet. That sounds
pretty exhausting. Also, would you guys recommend Fidelity for a youth,
roth Ira. We already have our brokerage account for them.
Speaker 1 (09:46):
Thank you, Joel. I feel called out sometimes, like you've
recently documented, you need to do the exhausting thing in
order to take get ahead with your money. That's true, no,
but not always, not always.
Speaker 2 (09:58):
Sometimes there's a lot of low hang for when it
comes to personal fire.
Speaker 1 (10:01):
Sure, Mary, we appreciate you as a listener. I can
certainly see why it would be fun to to having
a kid who's also in the same ages and stages
as us as well. We're you know, our oldest daughters
are going to be turning twelve this year as well.
Speaker 2 (10:13):
That's right, yeah, this summer, and obviously Matt Mary's getting
her twelve year old started off on the right foot, right,
And it's really it's really fun to watch your kid
become kind of a micro entrepreneur. And twelve eleven, twelve
is kind of the perfect age, especially if you feel
like your kid's got some maturity. Like babysitting dollars, especially
(10:33):
in today's economy, they can add up, they can add
really quickly. Like my daughter has been babysitting the kids
across the street a little bit here and there, and
it's so exciting to her to see like money roll in,
to come back home and be like, I was over
there for like four hours. I made twenty bucks, you know,
and the parents are thrilled because babysitting costs a heck
of a lot more than that most of the time.
And so yeah, I think that.
Speaker 1 (10:55):
If you're just the mother's helper though, right exactly is
more like that.
Speaker 2 (10:58):
That's exactly what it is. Yeah, Like she hasn't been
left alone with him yet, but they can get a
lot of stuff done.
Speaker 1 (11:03):
Cooking dinner for them, their laundry as well.
Speaker 2 (11:06):
It's a Cinderella story really when it comes down to it.
But I think doing that getting them excited about like
making some money, then you know that enticing that excitement
about compounding, maybe even including a parent match if you're
up for it, Mary, and if you can, those are
ways to spur your child towards becoming a lifelong investor.
Just getting them excited about like what money can do
(11:26):
for them, and you want her to be able to
enjoy some of that money now, of course, But you know,
I think also getting excited about how those unspent dollars
ten and will grow. That's pretty neat too, you kind
of want to both end.
Speaker 1 (11:38):
Yeah, that's the personal finance education that's taking place. But
at the same so you are instilling those values, which
is amazing Mary. But on top of that, I mean,
let's imagine a three thousand dollars contribution towards a roth
IRA for over fifty years. Let's say from age twelve
to sixty two. So for fifty years there, that's going
to result in over one point two million dollars just
(12:01):
in a roth IRA. Wow, tax free dollars. Incredible. And yeah,
by you helping her to get the experience by investing
some of the money that she's earning, it does both
she gets that financial head start, but also she's learning.
But to your question, how detailed do you need to
be on that record keeping front? I think having you
got to have something right, no matter what, you need
(12:22):
to have something. You don't necessarily need a super fancy
spreadsheet or anything like that. And I think the standard
is lower than it would be for an HSA, a
health savings account, for instance. But because your daughter can
only contribute earned money, you want to make sure that
you are not over contributing to that account. And so
because of that I still think it's really you know,
(12:43):
she Mary is mentioning the spreadsheet specifically. I still think
that is the easiest way, because you could create a
document where you're like, Okay, let me just write a
quick summary, like she's talking about in the memo of it.
Sounds like what she's doing are transfers with her online
savings account. Perhaps she's list the details within that. But
I think what's easier than that is just going into
your Google sheet, which is what I've got going on,
(13:06):
and literally just copy and pasting the previous line, changing
the date, and updating the hours so it doesn't have
to be the super complex It's been so long since
I've updated my spreadsheet formula. I'm into it, but I'm
not creating these complex functions. If then also, you know,
like all that sort of thing.
Speaker 2 (13:22):
It's really two inputs. It's like the date that work
was accomplished. I've got four like literally i got four.
I've got four columns.
Speaker 1 (13:27):
It's the dates, the number of hours, the rate that
she's being paid, and then the total okay, number of dollars.
Speaker 2 (13:33):
Even that you could probably get by with a little
bit less information. But it's super easy though.
Speaker 1 (13:36):
But especially that's the thing, like literally the ability to
just to copy and paste and then updating that. And
it's not like I do that. I'll be honest, I
forget sometimes like I always pay her pay my daughter.
But you're not perfect. I'm not perfect. But sometimes it'll
be a few weeks before I'm like, ohoot, I haven't
sat down an updated that, and I'll sit down and
essentially I just kind of batch update that sheet, and
(13:58):
what this actually looks like will be a work in progress. Again,
the whole point is to get them investing. I haven't
sat down yet, but I'm envisioning that will also down
with her at the end of the year and we'll say,
all right, this is how much you officially earned over
the course of the year. You can invest every single
one of those dollars in the account and tall you know,
run some compound interest calculators calculations Mary like you are,
(14:18):
and hopefully she will want to invest a lot. But
then making it clear that hey, I'm willing to provide
a parent match. It doesn't have to be this extraordinarily onerous,
heavy exhausting task that you need to do every single
time she earned my buck.
Speaker 2 (14:30):
I think what you're trying to do by creating the spreadsheet.
And what Mary's probably trying to do too, or should
be trying to do, is to avoid putting money into
a ROTH I rate that wasn't earned income. So for instance,
your daughter's probably getting money from birthdays or holidays or
stuff like that. And like over Easter, my kids got
five bucks in their last Easter egg they found Matt,
but that money can't be contributed to a ROTH because
(14:53):
it wasn't earned and so you want to separate those
things out. And that's where the spreadsheet comes in handy.
It's not like, oh, every money or every dollar that's
in her account can be contributed to this ROTH. That
can't because if some of those were gift dollars, they're
excluded from that contribution ability. So true, that is why
I think you want at least some documentation. And I
do think Mary, you're right, like I'm not a spreadsheet.
Speaker 1 (15:11):
Guy, just to make sure you're on the right side
of the law, right exactly.
Speaker 2 (15:14):
Yeah, you don't want to be Jesse James in this thing.
And then when it comes to where you open it,
Fidelity is for sure a great place to open a
kid's ROTH. I mean, it's one of the few places
we would wholeheartedly recommend you can avoid fees and account minimums.
She'll have access to cheap, incredibly diversified funds. And then
wherever she starts investing, and this is I think one
(15:35):
of the lynch pins here, it's likely where she'll remain
as she enters adulthood. Like my first four one K
was with Vanguard, and so I ended up opening multiple
accounts with Vanguard over the years. Eventually I opened up
an account with Fidelity too, But it was one of
those things where like, hey, this is where I started,
It's probably where I'm gonna stick around, and that will
likely be true for your daughter. And I just can't
(15:57):
think of many better options than being with Fidelity over
the long haul, based on kind of all the things
that Fidelity prioritizes as a company exactly.
Speaker 1 (16:05):
Yep.
Speaker 2 (16:06):
And she's you know, she's not going to get a
match like she would with maybe some of the newer
brokerage firms, the betterments and the robin Hoods, those might
be worth considering. But I think the more boring nature
of Fidelity's website, it's actually like a pro in a
weird way actually.
Speaker 1 (16:22):
To her long term and financial advantage.
Speaker 2 (16:24):
Yeah, I mean, I think it might help her avoid
some of the perils of investing too, because if let's
say it is in a super flashy account and she's
checking her balanced a little more, and she's like, there's
all these pop ups about investing in crypto or individual
stocks or leverage ETFs or something like that margin investing, right, Yeah,
(16:46):
maybe as a seventeen, eighteen, nineteen year old investor, she
might be like, Oh, that looks like fun and get
kind of dissuaded from doing the normal boring thing that's
really going to build wealth over time. And our kids
are just a little bit younger than yours. They've just
their toes. I think into this world really of making money.
But I think kiddo rods. I don't know about you, Matt.
I'll be curious to see how that conversation goes with
(17:07):
your oldest. But yeah, I'm hoping that for my daughter
that I can do kind of a parental match and
incentivize her to get started investing really soon.
Speaker 1 (17:16):
Heck, yeah, I think it's let's mention an app we
actually talked about on a recent episode that's called half
More like like mackelmore but half more. But their goal
is to help parents to find ways to pay their
kids for chores around the house so that they can
contribute even more to that roth Ira. But the problem
here is that there's this annual one hundred and forty
(17:39):
four dollars fee that's attached. It's not super unreasonable, I guess,
and it will help you to jump through the some
of the compliance hoops. I like what they're trying to do,
but the real winning part of the app is being
able to assign certain chores at home and paying your
kid in a very irs compliant way if she's making
money outside the house. Though, DI, why bookkeeping and just contributing,
(18:03):
you know, in that sort of manner. I think that
should suit y'all just fine.
Speaker 2 (18:06):
It's almost like bringing a bazooka to a knife fight, like, yeah,
you probably just seems unnecessary. Yeah, and it doesn't answer
like well, I remember during that conversation when a listener
brought that to our attention, one of my concerns was
the fact that is the data yours and this is
an app, and like a lot of businesses today, they
are reliant on subscribers, which means folks who are willing
(18:27):
to kind of continue to pay that fee even if
they're not fully utilizing that service. And I would certainly
want to make sure that you could at least export
that data to where you had some sort of record
of that, not feeling like you had to monthly fork
over the change in order to maintain the data that
you've accrued and built up over the previous years. It's
(18:47):
really unnecessary for most parents unless you're really trying to
jump through some hoops and pay your kids for chores,
and that app can help you do that. By the way,
you're the custodian of this account, Mary, and she'll be
given full control when she reaches what's known as the
age of majority, which is typically age eighteen some states
it's twenty one, just depends where you live. And hopefully
(19:08):
you're gonna be able to get her excited to contribute
a not insignificant amount over the coming years while she's
still under your roof, because gosh, you've got like what
probably five six more years with her, and then she'll
hopefully have this ingrained as a habit. She'll keep contributing
more when she's out on her own, maybe even when
she's got like a part time job in college or
something like that. That early start is so clutch, and
(19:31):
the kind of doing it together over a number of
years while you still have this significant influence over her
life is to me, it's invaluable, and it just means
she's not gonna have to contribute nearly as much of
her future income because of her diligence as a preteen
as a team.
Speaker 1 (19:48):
But she probably will because not only do you have
this financial momentum going for you, she's got this identity,
this behavioral momentum going as well, because she all of
a sudden sees herself as that investment.
Speaker 2 (19:58):
You mentioned the one point two million dollar number, Matt.
That was if she saved one hundred and fifty thousand
dollars essentially over fifty years. That's amazing how much that
amount of savings will grow into. But if she just
thinks about it, if she doubles that because she gets
so into investing, I mean, this guy is the limit.
Speaker 1 (20:14):
When you start that young, that is a lot of money.
We've got more to get to. We're going to talk
about investing in a shaky economy. We've got uncertain times
a foot Joel, So we'll get to that plus more.
Right after this, we'll back.
Speaker 2 (20:33):
We've got more money questions to get to. Let's get
to a question now, Matt, about someone who listens to
the show and they're worried about their parents potentially choosing
a bad financial product.
Speaker 5 (20:45):
Hey, Matt and Joel, this is Hayden from Marlboro, New York.
You guys made a pass in comment in a recent
episode about the sky high fees associated with reverse mortgages,
and I was wondering if you could talk a little
bit about that. My parents have recently discussed that as
a big part of their future plans, recommended by their
financial advisor, and they gave me some articles to look
(21:06):
at and read, but I didn't see anything in there about,
you know, particularly high fees. So I was hoping you
guys could just touch upon that and maybe I could
send this episode along to them so they're informed enough
to make the decisions that they need to make, you know,
in their retirement. Thanks very much, Cheers, Joral.
Speaker 1 (21:22):
Did Hayden say cheers because like us, he is a
fan of craft beer, or from a cultural standpoint, he
just likes to party. He's like cheers. Does he like
the old school television show Cheers with Norm oh Man.
I watched those. Yeah, my dad was a huge Cheers fan.
I was probably one of the few six year olds
that had seen like all this season.
Speaker 2 (21:43):
I don't know if that's good parents, You're bad. But
there was more of a Gilligan's Island fan myself, So.
Speaker 1 (21:48):
See, I watched a lot of Cheers as a kid.
Obviously a lot of jokes went over my head. But
also Dallas, did you? I never watched that. That was
the I can still hear the theme song in my head.
Think about how bum bum bump bump bump bum bum
bum bum bum bum bum bum there you go. Thank
you for serenading. I'm gonna keep going.
Speaker 2 (22:08):
Think about how tedious it must have been to write
some of those shows, like taking place all in one
bar or all on a deserted island like it did?
Did it not just like wear thin after a while?
Speaker 1 (22:18):
I'm sure did. Having limits and boundaries around what it
is that you're trying to do it can be even freeing. Perhaps. Yeah,
maybe I don't know. I've more creative writer to a
show I gotta imagine.
Speaker 3 (22:28):
Maybe I don't know.
Speaker 2 (22:29):
All right, let's talk about reverse mortgages. So, so, Hayden,
I love that you're wanting to help your folks out,
and let's just like maybe talk about what are reverse
mortgages real click because some of them might be saying,
I've never heard of this. What is this financial product? Well, basically,
instead of paying a monthly mortgage to own your home,
which is what most people are doing for fifteen or
thirty years, most people thirty, let's be honest, you're being
(22:50):
paid to access the equity that you built up. And
the upside is that for cash strapped seniors and I
say seniors because you have to be sixty two years
or older or you're not allowed to take out a
reverse mortgage, they are able to stay in their homes
while getting a steady stream of monthly income to cover
their bills. So it feels like for a lot of
(23:12):
senior citizens, this win win. If there's no other place
to grab cash, it's like, well, I get to stay
in my home and I have money to spend every
month that otherwise where would I have found that money?
And so in addition though to the fees that we're
going to discuss, a reverse mortgage comes with downsides. So
in particular, if your parents care about you and your
siblings inheriting the home at some point in the future,
(23:34):
a reverse mortgage limits that possibility. But Matt, we've got
to talk about the fees, and yeah, I feel like
I just made a reverse mortgage sound pretty great, stay
in the home, money coming in every month.
Speaker 1 (23:44):
Yeah. No, let's set the context. Let's set the table
here a little bit, because it's interesting that Haydn's folks
are leaning towards a reverse mortgage and that their advisor
has suggested it as a smart approach, because it might be,
but if their advisor has helped them ahead of time
to build up anest egg over the years, it might
not be necessary. The advisor's goal should be that they
(24:05):
do not have to actually get a reverse mortgage, because
a combination of well timed tapping of social security, typically
by waiting longer, it's gonna lead to a better outcome,
at least for one of the parents. They're one of
the partners that plus tax advantage accounts, and in addition
(24:25):
to that, maybe some frugal living there on the side
that should hopefully be enough for them to live off
of for many decades. A reverse mortgage is almost always
considered an option of last resort in order to make
ends meet in the event that the combination that I
just mentioned of investments of social security if it falls
short of the type of spending that they're looking to
(24:46):
be able to perform and do in their retired years.
There So, again, decent planning should allow folks to avoid
this product altogether. But assuming based on the fact that
they're talking about it, sounds like maybe that's not quite
the case, and so they're looking at what they have
on hand to be able to satisfy the type of
retirement that they're looking to live.
Speaker 2 (25:03):
You might also see by the way a reverse mortgage
referred to as a home equity conversion mortgage, that's just
a fancy way of saying the same thing. It's just
a different name for the same beast. But basically, yeah,
you're grabbing money from that property instead of paying it
off and then gaining liquidity from in the liquid asset.
As we all know, that's not easy. So the fees
are high as they are with the traditional mortgage. We're
(25:26):
talking origination fees, closing costs, appraisals, tidle search, all the above.
It's very has similar characteristics to taking out a mortgage
on a primary home, and you can typically have those
fees taken out of the loan amount, so maybe it
doesn't feel as bad, but they're still getting paid. And
when your parents are still the ones paying the fees,
(25:47):
they beginning charged interest in servicing fees as well as
a mortgage insurance premium, so.
Speaker 1 (25:52):
It all gets rolled into the Essentially it gets papered over,
so it feels nice and tidy. Yeah, like, where are
those fees at that the boys we're talking about, And
it turns out they're in there. It's minimizing the amount
of money they can take out of the house. And
so one of the tough things about a reverse mortgage
is that when there's this litany of fees being assessed
in different ways, it's just hard to get an accurate
(26:14):
account of exactly exactly what it's going to cost you.
But when you read the fine print, you might be
shocked to realize just how many thousands and thousands of
dollars are coming out of this asset. As it's like
you're trying to get blood from a stone or something
like that, Matt, and that's hard to do. And the
same thing is true with a home. Yeah, it's always
(26:35):
expensive to tap that home for money. Yeah, it's just
hard to gauge because of the fact that it's all
getting rolled into one. But it is still happening. By
the way, let's look at some stats here. Close to
one in five reverse mortgages, they actually end in foreclosure,
often because the senior citizen there was unable to pay
property taxes. So this often works out poorly, which should
(26:56):
throw up an immediate red flag. So Hayden, for your
folks man, prior to getting a reverse mortgage, I would
carefully assess the costs, specifically the fees there, Joel, you
mentioned so home equity conversion mortgage. That's the term specifically
given to the FHA backed reverse mortgages. But there's also
(27:16):
private reverse mortgages out there as well, which might be
even more appealing to some folks because they're saying, Oh,
I can go through this private lender and I can
get a reverse mortgage at the age of fifty five.
I don't have to wait another seven years live like
a popper in the meantime. But guess what that comes
with even higher fees, even worse rates, even worse aprs.
Especially that's where it starts really getting ugly.
Speaker 2 (27:37):
Yeah, agreed. So I would say suggest considering other alternatives
if I was your folks and they were like, we
just can't afford to live in this house anymore. We
want to, but we can't afford to live in it
anymore with what we've saved and with the social security
that's coming in and live the lifestyle that we want.
So consider selling or downsizing, or even a cash out refinance.
(27:59):
Could be better. Could be better, I say, because that
isn't a great option either, but it could be better
than a reverse mortgage. They can invest cash, that cash infusion.
They could draw it down over the coming decades potentially,
or turn it into like a monthly stream of income
with what's known as a single premium annuity, which does
it's like also known as an immediate income annuity, which
(28:20):
is one of the cheaper annuities out there. There aren't
many good annuities out there. A reverse mortgage just isn't
the only viable option. It's just the one that gets
the most press because it's the easiest. But the easiest
thing isn't always what's best. And then you know, if
they do decide to go in this direction, they're going
to have to meet with a HUD counselor if they're
going with one of those HUD initiated reverse mortgages. Matt right,
(28:43):
the Consumer Financial Protection Bureau still around the heartbeat, barely beating,
but they have a list of questions that your parents
should be asking that will link to in the show
notes at how tomoney dot com. Make sure they take
a look at that. They to be armed with the
right questions is really important before they do this. And
just know too that inheriting a property with reverse mortgage
(29:05):
that can be a nightmare as well. So again, not
sure if that's in the car or if that's a
hope for you or your siblings, but no, that's a
pain of the butt if they are in the middle
of a reverse mortgage. These complex products, Matt, they remind
they remind me of like some of the commercials for
fancy new pharmaceutical drugs. I like the idea if I
had restless leg syndrome of getting rid of it, right,
but the cure often rests we're talking about, right exactly, Yeah,
(29:28):
I mean, fortunately, my legs not restless at all. But
when you hear the side effects for some of those things,
like it's it's like, man, the cure is worse than
the disease. The side effects can be truly awful on
some of those drugs, and I don't know what percentage
of the population develops like a face rash or something
like that after taking that drug, or or something even worse.
But it's important to know that a reverse mortgage. I
(29:49):
think of it like some of those pharmaceuticals where it's like, yeah,
it'd be nice to get rid of that problem, but
is it creating other problems that are are even more nefarious?
Speaker 1 (29:56):
Potentially That's true. Joel's new X handle Maha Jole just kidding.
Jill doesn't have anything again. It's big pharma. No.
Speaker 2 (30:05):
Yeah, we're all excited about our new fruit loops with
blueberry dyes.
Speaker 4 (30:09):
Right.
Speaker 1 (30:09):
Oh yeah, Oh, I need to tell you about this.
I had some algae the other day in this like
this smoothie bowl that was it was like crazy blue.
I'm just like, what is in this to make it
that blue? And evidently it's this blue blue something and
they pulverize it, grind it up into this powder and
they sprinkle it on or they mix it into smoothie
blue something. It gives it this crazy bright blue. It
(30:31):
does not look natural, but evidently it is. Is it?
We can expect more of that because it blue number sixteen.
I want to say blue spirillina or something like that,
but it's like a blue green. It's yeah, okay, naturally
carrying an algae. I guess it comes out of the ocean.
Speaker 3 (30:45):
Here.
Speaker 1 (30:45):
We can look forward to more stuff like that.
Speaker 2 (30:47):
What a spectacular world we live in.
Speaker 1 (30:48):
All right, Let's get to another listener question. Joel is
here from a return collar. That's what they call it
in the business, a return collar. This is so old
school a listener, which is funny because I never listened
to it. But this is a listener who has prepared
for a sabbatical. She's got this plan break coming up
and wants to know how she should be investing.
Speaker 3 (31:07):
I met and Joel, this is Yessel from New York City.
I'm calling in with another question. Thanks again for everything
you've been doing for the how to Money community. So
we all know that the stock market indexes are falling
and the financial future is pretty shaky for a lot
of us. I've considered myself someone who can pretty much
keep my emotions out of my investing and saving strategies,
(31:28):
and I've been continuously investing a set amount twice a
month to my brokerage account, and last year I maxed
out my traditional IRA and my set IRA. I have
a fully funded emergency savings account and a fund for
the sabbatical which I've just started. So obviously, pausing on
making money while thinking of investing is kind of making
me nervous. Now, I'd like to hear your thoughts about
(31:50):
how I should go about contributing to my investment accounts
for the time being. What are your thoughts about how
to invest wisely? So should I pause for a period
of time while not touching the accounts? Should I continue
to invest just as I have been, or should I
continue to invest but maybe with less money. Just for context,
I have a Fidelity brokerage account that's invested in the
(32:13):
total US stock market at sixty percent, total international market
at twenty percent, and small cap index twenty percent, and
I have the same allocation breakdown for my step IRA
and traditional IRA. Thanks for your help, guys.
Speaker 2 (32:28):
Yes, we always good to hear from you, and I
love that you've been able to mostly keep your emotions
out of your investing and that is something. I don't
know how often we talk about that map, but that's
like so important, right, And sometimes that looks like checking
your investments a whole lot less if you're keen to
like opening that for one case statement every month. I
(32:49):
don't know, if you follow the news and you're like, Eh,
doesn't seem like it was a great month. Maybe I
shouldn't look at the potentially substantial lower big number at
the very bottom of that statement minute, right, because recoveries
are always a reality. How long it takes to get there,
that's anybody's guess. But yeah, I think it is easier
(33:09):
said than done, but it's a really important thing to do,
basically trust the process, right.
Speaker 1 (33:14):
It's not easy. But like I think that that's I
feel like there's two there's a couple questions going on here,
and that's one of them. Because she's like citing the
unsteady economy and market fluctuations as causing her to second
guess it. And while you might rationally know that you
should be continuing to invest like you normally would, what
are you actually doing in reality? Right? Like, Like A,
(33:37):
that doesn't mean it's easy, you know, you rashally know
what it is that you should be doing. But then
the emotions kind of kick in a little bit. You
start getting a little bit nervous, especially as she's I guess,
experiencing some other life change that she has planned for.
But still it's I guess it's sort of the confluence
of these multiple things that are taking place that I
think is causing her to second guess her investing. And
I think it's I think.
Speaker 2 (33:57):
It's helpful to look at history because I get kind
of someone might say, well, what if someone was coming
up to your face with a and then we're gonna
swing it at you, swing a baseball bat at you,
you would duck pretty quickly, like you would react. And
so I think a lot of times when something fearful
appears to be happening, action seems like the best thing
to do, right, It's like, I'm gonna avoid the bad thing.
Speaker 1 (34:17):
But when you look at the.
Speaker 2 (34:18):
History of the stock market, the bad thing, how long
does it impact the stock market? Sometimes it's for years, right,
but even just look at the COVID bounce back, or like,
it didn't take that long for markets to correct after
a substantial drop. So and the thing is that the
worst possible reality is that you're missing out because you
try to avoid the pain. You're missing out on the comeback,
(34:41):
right that stocks will eventually get around to.
Speaker 1 (34:44):
And aside from even because somebody might hear you say
that and be like, well, yeah, that's because the government
pumped tons of money into the economy to facilitate that
bounce back. But even like looking further back into history,
even looking back to like this is a world that
has endured the dropping of an atomic bomb, multiple atomic bombs, yeah,
and then decades beyond that the threat of like nuclear annihilation,
(35:06):
like on a global level, But what did the stock
market continue to do? Like these are things that we
continue to move past. It has a lot to do
with I guess who you're reading, like the headlines that
you're looking at, Because there's some folks who say that like, no, man,
it's different this time, But I think that's always the case,
like just the classic first it's the classic line, it's
different this time, But I don't think it's actually different
this time. That's that's I guess the more positive, optimistic spin.
Speaker 2 (35:27):
Yeah, well okay, so you know, we want most people
to continue to invest when markets aren't doing so great,
And I say most people, maybe not everyone, and maybe
not yesl and I'll tell you why.
Speaker 1 (35:36):
Yes, Well, the average.
Speaker 2 (35:38):
Person is buying shares at a lower price. They're buying
stocks on sale when the market is down, which is great.
And we think that most people shouldn't change a thing,
like most people listening out there right now, if nothing
has changed in your life, you should probably be investing
in the same way that you always have been, you know,
keep on dollar cost averaging into those low cost index
funds or the target date retirement fund of your choice.
(35:59):
But Matt, I think Yessel is in a little bit
of a different scenario. She's about to take a sabbatical,
which means no income, right, That's typically what a sabbatical
means is like, Hey, I'm not gonna get paid for
potentially an extended period of time, and so I get
the desire to keep investing, especially if you yes, I'll
identify yourself as an investor, I'm gonna keep doing the
(36:19):
thing like that's that's what I'm doing. I'm building wealth
for my future. But with no income coming your way
for a little while, investing out of your excess savings,
it might not be the best choice. It could truncate
your sabbatical timeline or cause undue worry and unstress. Right
that it could even prompt you to feel like you
had to find a new job quickly when you're you
are ready to re enter the workforce, and you might
(36:40):
have to settle for something that's not ideal, maybe even
that pays less than you could have got if you'd
been able to hold out. I think investing on savings
that you might need to live off, I just don't
know that's a great idea.
Speaker 1 (36:53):
Yeah, But I think that's the difference then, too, between
because what she was saying though, is that she not
only has maxed out her retirement accounts, which is great,
not only does she have a fully funded emergency fund,
but then she also has a separate fund for the
actual sabbatical. And that's where I feel like that this
feels to me more like an emotional response as opposed
to the actual dollars, because it looks like it sounds
(37:15):
like she's investing for her future, way off, way off
into the future, in which case you see the market
like you said, on sale, and it's just like this
is a great opportunity as opposed to somebody who might
be nearing actual retirement right, not in many retirement, but
like the full blown, real, fully fledged retirement. That's the
kind of scenario where I think someone getting nervous about
(37:35):
the market and finding ways to diversify even more makes
a little bit more sense as opposed to I think
the situation that Yessel finds herself in, which so I
guess at the end of the day, for me, like,
I don't see you needing to make any sort of
change to how it is that you're investing, assuming that
you've planned to invest because of the fact that you
have had those funds set aside. Yeah, if you truly
have enough money to do d all the above, then
(37:57):
keep on truck. I mean, don't let the current state
of things freak you out to not do exactly That's
I think that's I don't know, at least that's what
I'm picking up from Yesla's question.
Speaker 2 (38:07):
We throw out another option, though, Matt, and this might
be something. It didn't sound like Yesselhead considered this, but
I think this might be an even better use of
some of those dollars right now. What if instead of
investing new dollars, Yessel consider doing strategic groth conversions instead.
So when you're taking a sabbatical, that means again that
you're not making money. Your income is dropped off a cliff,
(38:29):
which means that any money you do make is going
to be taxed at a much lower rate in all
likelihood than it was the year prior. So you know,
if your single income up to forty eight thousand dollars
is going to be taxed at the twelve percent rate,
that's on top of the standard deduction. If you're married
filing jointly, any income up to ninety six thousand dollars
is going to receive that more favorable tax treatment. We'll
(38:53):
link to an article that we have on our website
about this. But this is one of those situations where
investing more is one way to go, but investing less,
doing strategic Wroth conversions and recategorizing that money and never
having to pay tax on it in the future could
be could be a better move than just continuing to
(39:13):
throw more dollars into those accounts.
Speaker 1 (39:15):
Yeah, and especially in a year where you're going to
pay less to Uncle Sam, that is a brilliant strategy.
Speaker 2 (39:19):
And so the money that would have gone into that
account is now going to go to pay taxes, which
feels really unsatisfying. But when you think about holistic tax
planning strategy, the whole goal is to pay tax at
the lowest rate possible. And that's what you're doing right
when when you're doing a Roth conversion in a year
where your income is paltry, you're taking advantage of that
(39:40):
that long view tax planning, and you're saying, no, no, I'm
going to prioritize ROTH in this year because it means
less taxes for Yessel in the future.
Speaker 1 (39:48):
Yeah. Future, Yeslo, I think is going to be very thankful. Yeah,
And I think future Yessl's gonna be thankful that you
took a sabbatical as well. We're big fans of taking
these many retirements along the way instead of just the
tip nose to the grind stone approach, where someday, way
off in the future, you will retire highly underrated. Let
us know how it goes, and we wish you the best.
(40:09):
But Joel, we've got more to get to. We're gonna
hear from a listener who is having a tough time
letting go of the idea of having a brick and
mortar banking institution at his or hers fingertips. We'll get
to that and more right after this. All right, we're back.
Speaker 2 (40:31):
We've got more money questions to get to. For now,
let's get to the Facebook question of the week. This
one comes from Matthew, who said, my wife was about
to make a contribution to her roth ira, but she
didn't make any money herself, as she stays at home
with our son. Does my income count as her income?
And can she invest in a roth ira? Or am
I the only one able to invest in a roth
(40:52):
ira as I have income and.
Speaker 1 (40:54):
Not her classic I think Matthews isn't the only listener
Joel who's been confused by this, because you're told that
to invest into roth ira, we may have even said
this today, you have to have earned income, and so
your wife isn't currently working, she does not have earned income.
It seems like she would be ineligible, but of course
that is not the case, because these things are never
(41:17):
quite as straightforward as they seem. The IRS recognizes the
shortcomings of that rule. Your wife is eligible to contribute
to a roth ira in the form of what's called
a spousal wrath. So that's the wrath account that we
really rarely talk about. Joel, even if she didn't actually
personally earn a dime in that given year. True.
Speaker 2 (41:35):
Yeah, that is specifically the perk when you are married
filing jointly. So just remember that your total agi your
justin gross income would have to be above what you
contribute to both accounts, which I'm assuming it is, assuming
that you're making more than fourteen thousand dollars a year,
seems reasonable, you know, making contributions to one for you
(41:56):
and one for her. That's obviously a really smart move.
We want couples across the country to continue striving towards
that goal of maxing out too wroth iras every single year.
And the fact is that even if one person in
the house stays home, they are they're doing a valuable
service to the family, and they also deserve to and
are allowed to legally contribute to that WROTH. So what
(42:19):
if it's a threatle Joel, Then that's a good question.
Speaker 1 (42:22):
Is twenty one thousand dollars can you marry? I don't
think you can married filing multiples like no, No, I
don't think that rescounts that. Don't forget in the back
end of your brokerage account or in your brokerage where
you do your investing, not your brokerage acount. You're not
going to actually see something that's that's labeled or titled,
or there's not going to be a link that says
open spousal wrath. You just contribute to a regular old
(42:44):
wroth IRA for her like you would for yourself. There's
no actual special designation. This isn't some sort of special account.
It's that's how it's more of a process as opposed
to like an actual account. It's a colloquial way of
talking about it.
Speaker 2 (42:56):
Even though when you go in the back end of
the account to open it or to contribute to it,
that's not how it's going to.
Speaker 1 (43:01):
Be label now. You're not going to find that there.
So I agree that maxing out two roths year in,
year out, if possible, that's going to garnery you some
incredible financial freedom over the decades. Get at Matthew Joel.
Let's hear from another poster from anonymous who writes, one
of my financial fails is having my E fund in
a credit union savings account earning less than one percent.
(43:21):
I just threw up a little. I know I need
to move to a high yield savings account. But something
about an online bank versus a brick and mortar local
credit union seems scary for any emergency fund, even though
I know we could transfer as needed. Has anyone else
had this hesitancy? What do you think, Joel? Have you
ever felt this?
Speaker 2 (43:41):
Honestly, now, I hae a roadblock. I have zero need
for brick and mortar institutions or some institutions, but not
banks in my life. And I guess I get why
some people might feel, especially like if you own a
small business, you're regularly making deposits of that physical bank
or something like that, you might be reticent to kind
(44:01):
of do away from that sort of Oh I go
to my bank to do things a relationship, But I
think most people don't have any need for it, And
so first off, I do want to stress that we
love credit unions right, but also they're better for borrowing
than they are for saving most of the time.
Speaker 1 (44:20):
Need not alone.
Speaker 2 (44:20):
Credit union is a great place to go mortgage or
a helock. I would look to a credit union first,
high old savings account that, though I would say is
best done at an online bank. They're different tools for
different purposes, and I want to use the right tool
for the right problem. Our favorite online banks are typically
although maybe not always, but typically better for savings purposes.
(44:43):
I would love to see folks you utilizing both of
these institutions for what they do best. I have a
relationship with a credit union, I have had one for
a decade and a half and I will continue to
have that relationship. I've had a relationship with an online
a high old savings account at an online bank for
a I didn't have to probably at this point, and
I maybe longer, and I will just continue to have
(45:04):
both those relationships and they will just serve me for
different needs that I have.
Speaker 1 (45:08):
Totally. Yeah, it's also important that even in an emergency,
you don't typically need to pull cash out like right away,
like right now. Instead, you can use a credit card,
which buys you time right like you still have the
cash on hand in your account to back it up.
But I can't think of too many money financial emergencies
that I've encountered that required me to get a load
of cash from a bank as soon as humanly possible.
(45:31):
And then on top of that, our favorite online banks
they tend to have good fee free atm networks as well,
So if you actually are in a situation where you
do need the cash on the spot. You should be
able to access at the very least hundreds of dollars
in a day. The branch doesn't even need to be open,
like you just go to the ATM. That's a part
of the network. That being said, if you do, I
(45:53):
think another way to alleviate this problem would be just
to have some cash at home, because if you do
feel that there's some comfort in having that, I don't know,
like literally one thousand bucks, a couple thousand dollars hidden
away somewhere in a secure spot. If that allows you
to then move the thousands of dollars of your actual
emergency fund over to a highield savings account where you
are experiencing or earning interest. I think that could be
(46:16):
a way to hide your cake and eat it too.
That's why you have all those gold bars buried in
the backyard exactly just in case. Right, Yes, no, you
never know what's going to happen. It's it's so unlikely
for that. Actually, the crazy emergers, if the Last of
Us becomes real life event to take place, it's far
more dramatic, but very unlikely to happen. Whereas inflation and
your savings getting eaten away by that inflation, it is
(46:39):
much much less dramatic, but very likely. That is very
likely to happen. So we want you to be prepared
for both, I guess in a way, but for you
to not pay the financial price for having all of
your cash in a local credit union branch.
Speaker 2 (46:53):
It's an underconsidered fear, right is inflation, because it is
that persistent reality that most people just don't pay any
attention to. We have, of course paid more attention in
recent years, and hopefully that's caused more people to think
twice about where they bank and the rate of interests
they are getting paid. But I do think you're right, Matt,
Like for this poster, I don't want them to fret
about instant access to all their money. What's I mean?
(47:15):
In what case is that really necessary? The biggest thing
is to make sure you've got enough saved and that
you're getting paid close to market rate on your savings.
That's three and a half to four percent these days.
That's what I'd be looking for. CI is still paying
top tier rates betterments. Cash account is fantastic too. Depending
on how much you have saved, you know, we might
only be talking about a couple hundred bucks this year
(47:36):
in extra earnings, but up in your savings rate by
going with a bank that pays those super high rates
and consistently pays those high rates for years to come.
That's not insignificant in the grand scheme of things. And
the truth is, wow, brick and mortar might seem like, oh,
I can like a relief of some sort. Oh I
can go get my money in an instant when I
need it. Well, money, there's so many other ways to
(47:57):
tap money instantaneously, and even just having a little bit
more in cash at home that if that can provide
that relief. So you can do business with a better
bank that pays you what you deserve on your savings.
Speaker 1 (48:06):
Do that, Yeah, And honestly, the kind of event that
would cause you to rush to the bank and withdraw
a bunch of cash, I don't think that necessarily means
that you would be able to do that with a
local branch. Yeah, because I think whatever unlikely but yes,
terrible event that would take place would hinder something like
that as well. I don't know. I just like focusing
on the things that I think are more likely to
take place. Like, because then your mind starts going to like, well, man,
(48:28):
maybe we should have some bottled waters and the first
aid kit and throw that in the bug out bag.
And there's folks. I'm not a prepper, but I know
certainly some folks do that. But for me, a few guns,
you know. But you know what I have done in
recent years, more often than not, is pull the old
generator out of the garage. Fire that thing up so
that I don't end up losing all my groceries in
the fridge like that kind of I mean, that seems
(48:48):
like a much more I guess, practical and likely outcome
of the grid going down or even just getting hit
by a big storm. Right Like you're saying zombie apocalypse
is not likely to happen, Say, it's less likely as
a a big storm hitting your town and then it
takes several days before the power gets turned on. What's
happened to a whole lot of folks. It's less interesting,
but you're probably right makes for less entertaining TV, that's
(49:10):
for sure. True story. Well hope that's helpful, Matt. Let's
get back to the beer we had on the show.
Speaker 2 (49:15):
This was I picked this up when I was in Texas,
and this is from a brewery that's actually in Pennsylvania
that doesn't distribute to where we live, and it's called
Tired Hands. This one is called double dry hopped Refreshing.
Speaker 1 (49:29):
Can't get these in Georgia.
Speaker 2 (49:30):
No, we've only had one of their beers before on
the show, was the Sayson. I still remember that beer
as being fantastic. What was your take on this IPA.
Speaker 1 (49:39):
Earthy had a nice bitter bite to it, but the
hoppy flavors. It reminds me a lot of burial beers
as well, which we've had a lot of those on
the show recently, where it's more vegetable and less tropical,
Like it's kind of got like this earthy. Oh, it's
so funny. I feel are the brazil nuts. We've had
some of those at our house recently. The kids are
alway like, it tastes like dirt. I'm like, how do
(50:03):
you know what dirt tastes like? It tastes like what
you've seen your kids, what wet dirt smells like or
wet earth smells like. And this kind of has that
a similar vibe going on. It just it feels like
it's a beer of the earth less floury for sure,
but uh yeah, really really tasting really good.
Speaker 2 (50:18):
So this is gonna sound negative, but I mean it,
it's a positive. Like if I was to rub some
light sandpaper across my tongue, like this beer sticks to
my tongue in that way. It's it's got this like
sappy goodness, this dense, juicy vibe like you're licking a
piece of felt. Yeah, but also this like chalky consistency.
And I mean this in the best way where this
this beer just has like these texture notes that are
(50:39):
rare in an IPA just doesn't slide down your throat.
It's like it's trying to wrap around every single one
of my taste buds, and I get that.
Speaker 1 (50:46):
I'm down with that.
Speaker 2 (50:47):
Like I really enjoyed this beer. I would love love
to try more beers by Tired Hands because the two
I've had have been thoroughly enjoyable.
Speaker 1 (50:56):
So they've been top notch.
Speaker 2 (50:57):
Yeah, most def.
Speaker 1 (50:58):
Glad you and I got to enjoy this one today.
That's gonna be it for this episode. Find our show
notes over at howtomoney dot com. That's also where you
will find lots of different resources over there. But Buddy,
that's gonna 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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