Ask HTM - Work Provided Life Insurance, Compounding Returns with a 401k True-Up, & Selling a Home to an iBuyer #721 - How to Money

Episode Transcript
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Speaker 1 (00:00):
Welcome to Had of Money. I'm Joel and I am Matt,
and today we are answering your listener questions. That's right, buddy,

(00:26):
This is a listener Questions Monday episode that we've got
lined up for you. We hope everybody out there had
a wonderful weekend, but we've got five awesome questions to
get to. A listener is wondering if the work provided
life insurance that her and her husband receive, if that's
going to be enough. We're going to talk about that.
Another listener is he's got a four to one K

(00:47):
true up option. That's something that is offered, but he
wants to know if this actually means that he's not
leaving money on the table, not tune up, but true
up true. We'll get into did I say true up?

Speaker 2 (00:56):
No?

Speaker 1 (00:56):
No, you said true But I know people might hear
that and they're like, I don't even know what that is.
We'll talk about that, and then another listener she is
selling her house or she wants to, and she's wondering
if she should go the take the iebuyer route. So
we've got that question plus a couple others on today's episode.
All right, before we get to that, man, I wanted
to quickly mentioned, have you heard of EU two six one.

(01:18):
It's a law in the new COVID variance that sounds
like no, although I can see why you say that. No,
but there's BA two six one. But so this is
a law in Europe that basically says that you get
paid if a flight is delayed or canceled and by
a certain by a certain amount of time. So there's
different rules about got that euro European feel to it? EU? Okay, yeah, exactly.

(01:44):
And so there were a couple people in my life
recently who mentioned flight cancelations on a trip to or
from Europe, or at least a substantial delay, and I
was like, hey, you might want to check this out
and file acclaim with the airline because you might be
entitled the compensation. And you're like, oh, yeah, what twenty
thirty bucks and it's like no, no, no, no, hundreds and

(02:05):
hundreds and hundreds of dollars. So nice. Yeah, this is
one of those things that a lot of people don't
know about. And by the way, the statute of limitations
is like years long for some of these, So if
you're like, man, two years back, I got screwed on
this flight. And it doesn't have to be in inter
European flight. It can be a flight to and from Yeah, exactly,
so look at the details. So if you fancy like that,

(02:26):
like all of Joel's friends are, make sure to jets
threading up for parents and all the likes. Right, but
the folks are just talking about bicycling from point A
to point B to to the grocery store. Right, We'll
put a link to an article that tells helps you
understand how to get compensation for EUT six to one
if you had a substantial delayer at cancelation. But it's
kind of cool, Like my sister did this a few

(02:47):
years ago, got paid more in the compensation than the
flight cost her because she got such a dirt cheap deal,
so it's yeah, it's pretty sweet. They pay actual replacement cost,
not depreciated cost of that ticket. And we've talked about
how these are. There are similar benefits that credit cards offer,
but of course you have to know about that and
have used the right credit card or even have the
credit card. So this kind of size steps all of that,

(03:09):
or it does not come down to payment. It's even
if the European law. Even if you did, you could
double dip essentially. And oh that's what the credit card
and the EU six one. Yah, they're separate. Yes, it makes
makes sense that you should be able to. That is
one of those things we're interesting. It would not be cheap.
I think it'd be frugal to take advantage of the
credit card benefit, the trip cancelation shirts, but also under
your your legal right as someone taking a trip to

(03:33):
or from Europe, like get the money. Oh and by
the way, Matt, I don't think we've mentioned this yet.
We're gonna have a listener hang here in Atlanta and
our boy home city this coming Friday. We teased it
was it last week or a couple of weeks ago,
but it's official. This is the official announcement. Yeah, so,
if you live locally and you want to see our
ugly mugs drink beer together, please come out to Inner
Voice Brewing. We'll be there from four to eight pm.

(03:55):
Let's incentivize folks as well. Let's we'll have a few
pairs of our how to Money socks on hand. Sure, yeah,
you beer, we'll see but yeah, we hope to see
you there at Inner Voice How To Money Hang meet
your fellow listener this Friday from four to eight. All right,
let's introduce the beer that you and I are going
to enjoy today. This is a brew by Common Space.
It's called Chubby Unicorn, and we will give our thoughts

(04:16):
on this guava milkshake IPA at the end of the episode.
That's right, But let's get to the subject of Handmatt.
We're answering listener questions. We've got a good slate of
them today on the show, and if you have a question,
we would love to hear from you. It takes all
of three minutes to pick up your question, to talk
it into your phone into that voice memo app, and
then to send it our way. You can find the

(04:37):
specific instructions for how to do that at howtomoney dot com.
Slash ask can't wait to hear from you, and this
listener wants to know whether or not they should sell
their home to an entity instead of a human.

Speaker 2 (04:49):
Hello. My name is Rosemary and I currently live in
Central Texas. We were moving due to my husband's job.
After much deliberation and against common wisdom, we have decided
to sell our home, which we have only owned for
two years. Where are the pros and cons of selling
your home to an eyebuyer such as open door risk
going through a traditional real estate agency. When might you
choose one option over the other? Thank you?

Speaker 1 (05:11):
All right, let's kick this thing off, Rosemary, thank you
so much for your question. And by the way, congrats
on the new job there for your husband. I hope
it's just a fantastic opportunity as well as a promotion. Right,
hopefully you are yeller earning more. But I'm also hoping
too that you get to move somewhere great, right, Yeah,
I mean Texas is great, but tex is great. I mean,
if you're wanting to move on from Texas, where would

(05:33):
you hope to be going? I don't know, I mean Atlanta,
Georgia Bay, Yeah, I mean probably right. The water's just fun.
It's pretty great here. But you're you're talking about selling
your house, and lucky for you, even after own owning
that house for just a couple of years, it's likely
that you're still going to come out ahead. Right, In
a normal time period, that could really come back and
kind of bite you. But just given the lack of supply,

(05:55):
given the soaring prices that we've seen since you made
that purchase, I'm pretty sure that you're probably still going
to be doing Okay, Yeah, obviously it comes down to
your personal situation here, but at least it's not like,
let's say it was six o seven that you made
the purchase and then if you're looking to sell two
years after that, that would put you in a pretty
painful position and be called taking a bath, right for ure.

(06:16):
And so yeah, definitely fortunate for Rosemary that even despite
despite those transaction costs that are so heavy involved in
buying and selling and taking out a mortgage and all
that stuff, it would typically mean that you would lose
money over such a short term ownership cycle. But that's
not going to happen to you, Rosemary. But let's talk
about eye buyers, and first, what is an iBuyer Maybe
let's define the terms. Well, simply put, their big companies

(06:39):
that are willing to instantly and that's what the eye
stands for. By the way, in eye buyers, they will
instantly buy your house from you in order to turn
around and sell it themselves on the open market. Open
Door and offer Pad they are two of the largest
players out there there. You mentioned you mentioned open door,
Rosemary in your question but Zillow and Redfin they had
a large percentage of the market before they ended their

(07:00):
eye buying programs, and basically they had a tough time
buying homes at scale, right, and during the pandemic when
there was a lot of money slashing around, they were
overpaying for houses. They literally bought high and sold low,
which is the exact opposite of what you want to
do really with any investment, right. And so since then,
eye buying is kind of wised up, so you're really
you're much less inclined to get an amazing offer today.

(07:21):
Two three years ago you might have seen Zelo give
you more money than you would have gotten if you
put it on the open market. But now purely because
of the novelty of it, because it was a new thing,
it hadn't necessarily been proven. They were still trying to
figure things out. They're trying to establish market share, and
so they're like, hey, cool, and they I guess they
didn't really they hadn't other due diligence, they hadn't figured
out what it took to buy and sell homes effectively

(07:43):
without losing money. And then they realized, wait a second,
it's actually gonna be really hard to pull this.

Speaker 3 (07:47):
Off a lot.

Speaker 1 (07:48):
Yeah, there's a lot of factors that go into account,
you know, like how do you account for the incessant
barking dog that's next door? If you're just looking at pictures,
which is how a lot of the eyebuyers do it,
it's oftentimes light unseen. But the future of the just
eye buying industry is uncertain. It seems like that they're
kind of building the plane while they're flying it. I
really like the idea of eye buyers, but the reality

(08:10):
just has played out a little differently. It sounds really good,
but the end result isn't necessarily awesome, and that's largely
because they are acting as another middleman who's looking to
get paid. So that means the offer that you're likely
going to receive it's going to be typically lower than
what you would get with a traditional listing. They are
looking for their piece of the pie, they're looking for
their cut. Some folks might think that selling via an

(08:33):
eyebuyer is actually going to reduce fees, which is going
to maybe make the offer more competitive. In reality, like
why not go digital? That is not the case, because
the fees can be similar, if not more than the
fees that a typical realtor would charge. And so why
would you go with an option where you're essentially going
to get hit with the same fees, but with us
with an inferior service. Right With at least with the realtor,

(08:55):
you've got somebody, like a real person. It feels like
a customized, bespoke, tailored care that you're receiving. But with Eyebuyer, man,
that seems like the path to take if you're not
looking for service, right, Like I mean, just Iyebuyer even
in the name itself, like it makes me a think
of eye Robot or whatever the movie and is robots
and stuff. Well, you said service, But most people when
they're in there to sell me an iyebuyer, they're not

(09:16):
looking for service. They're looking to sell it immediately, right.
They don't care about like whether someone's going to hold
their hand and walk them through the details and help
them get their house in order so they can get
top dollar. They want to be done, They want the
transaction over completed, they want their cash, right, And so
that is what ibuyers do. Well. They are the convenience play,
the convenience pick. But we're talking to one of the

(09:37):
other big downsides of using an eyebuyer is that you're
asking one single entity to make an offer for your house.
You're skipping the open market, right and the competition that's
generated when home is publicly listed, When it's put on
the MLS. That's when everybody and their sister sees your
listing on Zilo and says, Oh, that's a cute one
on a cute street. I think I want to go
take a look at that. When you sell directly to

(09:58):
an eyebuyer, you miss those eyeballs and you miss the
potential interest from people you know. And even though obviously
home buyers they're not lined up the sidewalk to see
a house like they were back in twenty twenty one
early twenty twenty two, still just a few competing offers, right,
is all you really need to ensure that you're getting
the absolute best price. Having at least two or three
interested parties looking at the house making offers on the

(10:20):
home is going to ensure that you're getting what it's
actually worth on the market. You don't get that with
an iBuyer. You're getting literally just the one offer and
got one buyer. That doesn't help you the iebuyer. That
doesn't help you know whether or not that is what
the house would actually go for if you were to
put it up for sale. Plus, not all homes qualify
because eye buyers aren't available in all markets. They're available

(10:41):
kind of more in the southern United States, less in
the northern regions. So yeah, they are in Texas, but
they might not be where a lot of our other
listeners who listen Matt where where they are. It depends
on the property too, because I think oftentimes they're looking
for uniformity because that's how they're able to easily from
a digital standpoint, determine the value of a home. And
if you have a piece of property that's on a

(11:01):
lot of land or that's that's a really unique home,
either A, they your house may not be eligible to
be purchased by an eyebuyer, or b you might get
severely lowballed because they're not really taking that into account
as much as some of the other things that a
lot of folks are looking for. I fear has like
a water slide from the second story down to the pool,
and you got like a grotto or something, you might
get qualified. I don't know they might not even want

(11:23):
to play with you. But like you said, folks who
are wanting basically like cash now, which is a part
of why we don't like this whole like the eyebuyer
industry or sort of that mentality is it seems like
almost like a desperate ploy to unloading your house quickly,
which isn't how you should be approaching selling your home.
But yeah, the speed which you could sell your house,
how it's streamlined, that's certainly one of the advantages to

(11:46):
going with an eyebuyer, But it's also just going to
be so much easier, right because like maybe some folks
actually like they do have the time, right, it's not
about how quickly they can do it. They actually have
the time, but they just don't want to deal with
the hassle of it. They don't want to put up
with the headaches of schedule, the appointments, of hiding all
of their personal stuff so that potential buyers can envision
their own stuff there in the house. It's the easy button.

(12:08):
But you are paying a price for this convenience, and
you know, we hope for your bottom line that you
are able to take the time to actually do some
of these things. To do the legwork. There are meaningful
dollars on the line, and we until the industry gets
maybe more competitive or more efficient to where the eyebuars
are taking less of a cut, we're not really in

(12:29):
favor of going the taking the eye buy route. Sure, yeah,
I mean a pawn shop will buy your stuff instantly too,
and they're not, but they're just not gonna pay you
as much as you can get exactly. Typically if you
list it yourself on Facebook, marketplace, or if you sell
it on eBay, there are all sorts of ways where
you can, you know, sell that an asset that you
have on a shorter truncated timetable, but typically that means
they're going to make less money for it does feel

(12:51):
like the pawn shop of realtors. Like I think maybe
that's the slight negative connotation again, not that the pawn
shops are serve purpose. They're a legit business and the
ability to go in there and man, I don't have
the time, I just need to unload some stuff and
in order to have some cash on hand. It serves
both parties well, But who stands to make a profit
The person that's there in the middle, and that's what

(13:12):
Eyebuyer is looking to do. Yeah, I mean we've all
seen pond Stars. We know what happens there. Okay, I
actually haven't seen Pundstas. Oh really, you've never seen one
episode of it? I don't think so. I mean I
understand the premise. Next, you're gonna tell me you never
saw one episode of Orange County Choppers or whatever that was. Oh,
I know, I definitely Okay, Yeah, they're always fighting and yeah,
stuff at each other. There's like two of the most
popular reality TV shows of all time, that and like
Deadliest Catch, Right, But I think Insummation Rosemary, we would

(13:35):
say that it can't it can't hurt to get a
quote from Open Door, from offer Pad to see if
they're in the ballpark. But get a quote from both right,
and you might get a solid offer, you know, with
just a few clicks. But hiring an experienced agent who
knows the ins and outs of your neighborhood could net
you thousands of dollars more, if not tens of thousands
of dollars more, and putting in some of that work
up front, whether it's you know, taking out some ugly

(13:56):
wallpaper and painting a neutral color or something like that,
all those sorts of things that an agent is going
to give you the tips on, Hey, spending a few
thousand here could mean many more thousands right when it
comes to putting your home on the market and getting
those offers. So I would talk to an agent once
you have those offers in hand from the eye buyers,
and say, hey, how much more can we get? Like
and if it's not worth the hassle to make an

(14:17):
extra couple grand, then you take the eyebuyer offer. But
if you say, actually, the agent things we can get
fifteen to twenty grand more, it's worth the extra time,
the extra effort. It doesn't hurt to at least bark
up that high buyer tree, but in nl likelihood you're
going to do better go in the traditional Totally agree. Yeah,
it can be a great data point essentially to help
you to decide what it is that you should be

(14:38):
doing moving forward. And given the criticism that we have
presented on the podcast about realtors and the fees that
they present or the fees that they charge, I think
a lot of folks might be thinking, oh, man, I'm
surprised that mandol aren't down with eyebuyers because it seems
like it kind of automates things that kind of it's
a more efficient marketplace, but it's not really like that's

(14:59):
the problem is that you're holding to a single buyer.
If it was more like a sophisticated marketplace where buyers
are being put directly in touch with sellers and you
are able to automate a lot of the stuff there
in the middle to where there's not necessarily a middleman
there and like taking a cut as opposed to just
software that's kind of running in the background, that sounds

(15:19):
more attractive to me, Like I'm more hopeful for that
as opposed to just another player that's in between you
and your money. We're just saying we're not talking about
widgets here, We're not talking about tennis shoes, we're not
talking about T shirts. Right. This is a complex market,
the market of real estate, and it varies from street
to street. And like you said, madikuild a dog barking
across the street, a troublesome house that's right next door, Well,

(15:41):
that can make all the difference in what you're getting
in what buyer see and what they're willing to offer.
And so I just don't know if I buyers are
ever going to be able to compete in a hyper
customized business like real estate. But we've got more questions
to get to, including one about tossing bonus money into
a retirement accoun Does that make sense and will it
help him avoid more tax? We'll get to that and

(16:04):
more right after this. We are back and we will
get to that four when kay question here in a minute,
But first let's hear from a listener who is actually
she heard us answer a question and now she's got

(16:24):
another question. It's a question of a question. Take you
back off of a question. We'll get to that one
right now.

Speaker 4 (16:30):
Hi, Matt and Joel. My name is Megan and I'm
a longtime listener of the podcast from Portland, Oregon. Recently,
when listening to one of the Ask how to Money episodes,
you are answering a listener question about term versus whole
life insurance, and it got me thinking about something that
I'd love to get your advice on. Currently, my husband
and I are both twenty nine and working full time

(16:50):
with no kids. We both have insurance built into our
work benefits where we would get one point five times
our income upon death of either of us. We have
a healthy savings account and no debt beside our mortgage,
and since we don't have any dependents, we have always
thought this would be sufficient in the unlikely event that
we'd need it. However, we do plan to start a
family in the next few years and are wondering should

(17:12):
we go ahead and established term life insurance now since
we're younger and healthy in case something were to happen,
so that we can ensure that we get it for
a good price, knowing that we'll eventually need it. Thanks
so much for your thoughts and love listening to the podcast.

Speaker 1 (17:26):
All right, Matt, speaking of efficient markets, life insurance is
a much more efficient market than versus in real estate.
Oh they're going to say universal whole life. Oh oh yeah, Yeah,
there's a lot more you know, all the actuary, actuary
exactly what an actuarial table, actuarial. There's more standardization. You
can shop for it with multiple providers online in a
simple sitting. And so we're big fans of term Life

(17:47):
by the way, in case you didn't know, if you're
like I think I need some life insurance, term life
is is the way to go. We'll actually put a
link to an article I wrote about that on the
website in the show notes. But before we tackle this
new term life policy, let's talk about work provided life
insurance policies for just a second, because a lot of
folks they might be thinking that, well, one and a
half times your income, that's plenty, right if something happens

(18:08):
to either of you, And the truth is it might be,
but it does depend on the specific details.

Speaker 3 (18:14):
Right.

Speaker 1 (18:14):
It sounds like you've both done a good job thinking
through the particulars, which is great. But for others who
might be in a similar boat, consider what your debt
obligation is as a couple. If one of you dies,
would the other be able to continue to pay the mortgage.
Let's say you make a substantially less you're a teacher
and the other ones software. The other person's a software engineer.
That changes the dynamics, Right, if it's split fifty to fifty,

(18:36):
it's like a kind of a simpler dynamic to think about.
But and I know, like there's obviously a lot of
emotions involved in this. This can be kind of like
a morbid exercise. Would you be able to get back
to work after a couple of weeks or do you
think you need more months to mourn your law sentens.
We don't know that right until we go through it.
So it's the kind of thing that's unlikely to happen,
but it's worth envisioning so that you're properly prepared so

(18:59):
that you you feel can feel comfortable that you have
enough insurance in the case of that worst event happening. Yeah,
and it depends on just some of the different personal
finance goals that you might have as well, because I
think when you, like earlier on in your careers, you
may not have a ton of expendable additional income where

(19:19):
you might say, well, it wouldn't hurt to go ahead
and get an additional policy, But if one is being
provided for you at work, and if that's enough, then
of course, why spend the additional money every single month
for a policy that you don't necessarily need. If you've
thought through some of these some of those questions that
joli in that workplace policy, typically it is one x
or one and a half x your income that's given
as a free perk. Buying more through your workplace plan

(19:43):
doesn't typically make more sense because, especially if you're healthy
and twenty nine years old, you're going to be able
to get a much better deal shopping the open market.
So I wouldn't necessarily add to it at work. I
would if you do end up believing or realizing that
you need more, you're going to want to shop on
the open market as opposed to going through that work
place playing more. Yeah, but with that being or a
perk that your employer might offer, totally take take advantage

(20:05):
of that thing. But I get the free style. Keep
in mind though, that it's workplace provided, employer provided perk,
So once you were to move on from that job,
that's that thing is not going to be coming with you,
which is the opposite. Of course, if you get your
own individual term life policy, that's good for you, know,
no matter who it is that you work for. But yeah,
important things to think through. And this is and this

(20:26):
is coming too from a guy that got term life
before we had kids, Like, this is something that we
did because we kind of thought through some of those
some of those different things. And Kate she was she
just has like I guess, lower risk tolerance level and
she was thinking, man, okay, I guess early on it
became clear that I was becoming more of the main breadwinner,
and we had purchased a home. We hadn't had kids yet,

(20:49):
but we did have a house. And I think it
was about two years after we had that house that
we had had this discussion and she was thinking, Man,
I would still love to be able to stay in
this house where you did. I don't know if I
would be able to be able to afford the mortgage.
And so that's literally something that we went ahead and did.
That was like a solid two years, I think before
we even had kids. And so for us, it was

(21:10):
more of a peace of mind, a way to mitigate risk,
even though it was going to be highly unlikely that
that was going to happen. But every young couple who
doesn't have kids in their twenties or whatever is going
to have different things to think through. Right, they might
not own a home, but they might live exactly, they
might live in an airstream and say, listen, our costs
are really low and so the one X is plenty, right,

(21:30):
that's more than enough. Or maybe you've got like a
a ton of family that are fairly well off and
they've got basements and additional rooms or wings of the
house that you can live in. These are all things
to consider as you are trying to trying to decide
if you should go ahead and go out on your
own and kind of get your own policy. But that
being said, like you don't need to be in a
rush to go out there and secure your own term

(21:52):
life policy, Like this is something that I would maybe
put on your medium term financial to do list, but
not something that needs to happen right away, because you're
asking about getting a policy early on, while you're young,
before it gets really expensive. Well, premiums they go up
over time as you get older, yes, but they don't
adjust a ton at all from your twenties to your thirties.

(22:13):
You might end up literally paying just a few extra
dollars every single month, but you will also be covered
for a few extra years on the tail end, which
are the most expensive years to be insured for more
important years. Yes, absolutely, So you're kind of rolling the
dice here in one sense, right, Like you're hoping that
there's not going to be like a medical catastrophe that's
going to change those dynamics. But I think it's totally

(22:34):
fine to wait two or three more years, even waiting
but until you have kids before getting out there and
getting your own additional policy. Like literally, it depends where
you look it up. But I saw one table and
it showed that between the ages twenty five and thirty five,
you are literally only paying two dollars more two dollars
twenty four dollars a year by waiting a decade a

(22:55):
decade of not paying for paying annual premiums on a
policy that you are you know, unlikely going to need,
especially in these early years when you're like, I'm just
trying to max out a rothier area, just trying to
get the match on my four oh one K. You
could maybe cut back from your investing to have more insurance.
But these are the kind of hard decisions that people
in their twenties have to make. I still remember Matt

(23:16):
people being told by really smart people, hey, you need
more term life insurance, and I was like, but I
I'm just trying to become, you know, financially independent, and
I feel like I need to sock more money into
investments and that, Yeah, I get the value in that insurance,
but I think I can wait a couple more years.
And so that might be the key here. Too. Possible
to over ensure you don't want to you don't want
to overdo it towards keeping you from achieving some of

(23:37):
those other things that you're getting after, right, So those
are the trade offs, Like everything comes with the trade off, right,
Like that's that's the reality behind everything in personal finance.
And so in a couple of years, you'll probably want
to grab a thirty year term policy, megan, but shop around,
like when you get to that point. Policy Genius is
one of our favorite spots to get quotes. Costco members
should also get quotes there are too. And the reason
you only need a policy, by the way, for three
decades instead of for life, instead of getting like a

(23:59):
whole life policy, is because we're hoping that the need
for life insurance is going to evaporate by the time
the kids that you're playing on having the theoretical kids
by the time they're grown, right, and that you've been
saving and investing for such a long stretch that at
that point in time you don't need the coverage. You
could pay a bunch more. You can get life insurance
for the rest of your years, but should be better

(24:21):
off with the term policy and the much smaller premiums
that accompany it, which would allow you to funnel even
more money towards better financial goals, like investing even more.
It's a virtuous cycle. Yeah, and like we said, as
far as like your kids being out of the house,
like that gives you a solid twelve years to have
like multiple failures to launch in order for those for
those kids to get out of there before you know,

(24:43):
obviously they're no longer dependent on you. Yeah. So really
it's it's not like an easy slam dunk decision. But
if you think through all those things and you say,
wait a second, kind of like Matt and Kate, I
feel like we need a little bit extra coverage, and
really it's not that expensive and we're meeting all of
our other our other financial goals anyway, so let's go
ahead and make the purchase. It's really only going to
be nineteen dollars a month or something like that. But

(25:03):
then again you might say, no, no, that would keep
us from being able to achieve this, this and this,
and so actually we're going to hold off for a
couple more years. I think you could really make a
pretty good argument either way. Yeah, but bottom line, know
that it does not get significantly more expensive hardly at all. Like, really,
it really starts ticking up once you hit forty. But hey,

(25:23):
let's get to our next question. This is from a
listener who, bottom line, is wanting to make sure that
he's not leaving money retirement dollars on the table at
the end of the year via his four o one K.
Let's hear it, Hi, Matt and Joel.

Speaker 3 (25:36):
My name is Gavin and I'm from late To, Utah.
I am a recent newcomer to the How To Money
family and I've been listening for about a month now
and I love the simplicity that you guys bring to
the complex world of finances. I am thirty four years
old and have four children, and I work in a
sales role for a construction company. For my role, I
qualify for an annual bonus. We are paid weekly and

(25:57):
the company offers a four to one K match in
order to maximize my weekly take home pay for day
to day expenses. I've been making no contributions to my
four oh one K weekly, but will calculate to take
enough out of my bonus to make sure that for
the year I've contributed enough of a percentage to get
the match. Also, I did confirm that my company does

(26:17):
a true up. An extra benefit that I've seen to
do this is that because I'm contributing to my four
oh one K and the funds come out pre tax,
my taxable amount, which being a bonus attacked at a
higher percent, is less. So I'm saving a good amount
on my bonus taxes by doing this. My question is,

(26:38):
by only contributing one time per year, am I losing
the long term benefits of compounding interest in my four
oh one k? Thank you guys, have a great.

Speaker 1 (26:47):
Day, Matt. I love that Gavin said that how to
money family. Honestly, it is like a family, isn't it.
I feel that in our Facebook group we've got ten
thy seven hundred member or something like that now, and
people are always addressing each other in these like terms
of affection, which is so sweet, and does everybody refer
to each other as brother? And yeah that might get
a little creepy, right, but maybe not quite to that

(27:08):
same place. Is kind of weird, right, exactly? No, But
it really is like it's this community we're trying to
build of people who are like minded, and you want
to see other people achieve success too, So I think
of it in some ways as a family, and I
don't know. Maybe you're the godfather of it, but what
does that make you? Godmother? Maybe fairy godmoma? Yeah, I

(27:29):
will say that, all right, go with that. But Gavin,
I'm glad to have your round. Man, thanks for listening
to the podcast, and congrats on getting the full match
on the four to one k even though you've got
four kiddos at home. Matt, that's like a bigger hurdle
to jump over. Yeah, it maximizing those retirement accounts per
personal experience. Welcome to the four kids club, right, You've
got that. Not easy. He's the mama bird right like

(27:50):
or daddy bird. He's got those mouths defeat. It's not easy.
And so I'm glad that you've confirmed that your company
does a true up. By the way, not every plan
offers this, and so I can come back to bite
you if, let's say you don't contribute for a few
paycheck cycles, but you're trying to invest money in bigger
chunks later in the year in order to try to
get that full match. Well, if your employer's plan goes

(28:11):
the true up path at the end of the year,
like Gavin's does, you'll be fine. Right, you receive the
full matching dollars you otherwise would have received if you
had invested like normal, like clockwork along the way. But
if your employer does not offer the ability to true up,
you will have missed out on some of those free
matching dollars. So this is just an important detail to
make sure that you're aware of with your employer if

(28:33):
you're not committing money to your four one K regularly
throughout the year. Yeah, And basically the reason that the
true up is necessary is employers basically are lazy, and
so oftentimes the way the match is calculated is they
base it on your annual salary, and so at the
beginning of the year, they say, okay, if we provide
a six percent match based on your salary, this is

(28:55):
how much we would contribute. This is how much we're
going to match every single paycheck. But if there are
some gaps, and I totally get it, Gavin, if you're
kind of like, I'm not totally sure if we're how
aggressively we're gonna invest this year, I got four miles
to feed you. There might be times when you're just like,
all right, things are looking kind of tight, so you
skip out on some of those contributions. But basically, when

(29:15):
you contribute to your four and K, it acts as
a trigger for your employer to come to match with
their matching contribution. And so what that means is that
if you invest at the end of the year with
a lump sum and you don't have that true up.
If let's say you just invest over three paychecks towards
the end of the year, well you're only you're only
going to get that match on those three paychecks, and

(29:36):
the whole rest of the year you're missing out. And
so what's actually interesting is that this works both ways too.
Let's say you are a very aggressive investor and you're like, oh,
I want to I want to get I want to
get invested as soon as possible, and so you invest
let's just say the first three months of the year. Well,
you're literally putting like ninety percent of your paycheck aside
to hit the limit. Yeah exactly. And were you to

(29:57):
do that, then each one of those page you would
get the match that was calculated there for each paycheck,
divide it out like over the entire year. But once
you stop contributing to your four win K because you've
hit your maximum contribution limit, well, your employer. Again, it's
not going to be triggered, and so they're not going
to be matching it with dollars because they aren't calculating
it on a per pay cycle basis. Some employers do that.

(30:20):
It's just it's more work, and I understand it. It's
a pain in the butt for them to basically calculate
how much you're deciding to contribute for that pay cycle
to your four oh one K. But from an employee standpoint,
that would be the easiest route because then you literally
they're matching dollar. You know, they're matching how based on
however much that you're putting aside. But unfortunately that's just
not how the majority of employers do it. Yeah, so

(30:42):
you just have to know before you kind of figure
out how what like what your contribution cycle is going
to look like. You want to know the details of
whether or not your employer's plan does. You want to
know the details contribution matching or not. And so if
your employer doesn't, let's say, offer the true feature, you'd
be well served to do whatever you in to make
sure that you regularly invest right at least up to
the match with every single paycheck not waiting let's say

(31:05):
until the end of the year, like Gavin's doing, right,
And his question is basically whether or not taking this
route and investing in a lump sum at the end
of the year is okay because his employer is still
going to contribute those matching dollars. And I would say
the simple answer is yes, Like, as long as you're
getting the full match, which you are because your employer
does the true up, then you're totally fine, no worries, right,

(31:25):
and more than anything, like more than anything, we don't
want you leaving matching contributions on the table because as
long as you're contributing enough to get the full match,
when and how you do it is really less of
a consideration. It's more minores. Right. But that being said,
if you and this is what we talk about here
on how to Money, we get a little nerdier with it.
If you really want to optimize those dollars that you're

(31:47):
waiting to invest until December towards the end of the year,
well they obviously won't be invested in the market quite
as long. And since the stock market goes up essentially
three of every four years, you're actually going to be
investing at a less than opportune time. The reality is
that the sooner that you can get your dollars invested,
the sooner you can get your dollars into your four
O one K, the better off you're going to be

(32:09):
because that gives those dollars more time to experience the
magic of compounding returns. And it may be more or
less on a given year, but year after year. Again,
we're talking about compounding here. It's not just the fact
that it happens once. We're talking about the fact that
it just snowballs, right, it builds upon itself. Twenty five
percent of the time, you're gonna come out ahead, like
in twenty twenty two. If you wait until December, you're like, whoo,

(32:30):
Like I actually I actually made out like a bandit
by waiting. But most of the time that's not going
to make it exactly. So that would mean, then, you know,
rather than waiting to invest at the end of the year,
investing regularly with every paycheck, that would be a better pick.
But if you want to get really nerdy with it,
the superior option is going to be to invest. Invest
as aggressively as possible and as early in the year

(32:52):
as possible. But again, you know, we're talking about optimization here.
We're not really talking about what's right or wrong. But
either way, if by waiting to invest either at the
squeeze it in at the beginning or if you squeeze
it in at the end of the year, either way, Gavin,
for you, you're going to be made whole and you're not
leaving any dollars on the table. Yeah, we're not trying
to put pressure on you because again, you've got four

(33:12):
miles to feed, So it's not like start mex it
out in January, right, I mean, but this is something
worth noting that by delaying, you're not optimizing to the
fullest extent that you could. By the way, you mentioned
a common misconception gap that I wanted to clear up,
which is that bonuses are taxed at higher tax rates,
which is actually not true. It kind of feels like
it because more taxes withheld from bonus dollars that are

(33:33):
paid out. Typically we're talking about a flat twenty two
percent that the employer holds back in taxes when they
pay out a bonus, not to mention social Security, State taxes, Medicare,
So it can feel like, wait, I just got a
ten thousand dollars bonus. Why is it like fifty five
hunderzo in my account? Like, I don't understand. I mean,
everything gets sorted out though, when you file your taxes,
and so, if your effective tax rate is lower than

(33:54):
twenty two percent, that's going to shake out in the
form of a tax refund for you when you file
your taxes. In this and so, bonuses are awesome, and
hopefully you're even more excited to get yours this year
knowing that it's not actually taxed at a higher rate. Man.
I hear that from people all the time. They're like, oh,
it's a misconcepts love getting a bonus, but man, the
taxes suck on it, and it feels like it. But
you're gonna probably come out ahead when you file your taxes.

(34:17):
You're gonna get some money back here. Yeah, I mean
it kind of comes back again to just some of
the most common paths that employers take, which is when
they apply the standard twenty two percent tax rate on
bonuses earned like that it's the potentially easiest path for
them to take, but it isn't the most optimized for
you for your own personal finances. Similar to the true

(34:39):
up method or the option. The fact that that's there.
It's to be able to make up for the fact
that they're not doing things perfectly optimized, which if you
live in a perfect world, of course everything would be
perfectly optimized. But employers got other things don't worry about.
But Gavin, we think that you're going to be set.
We appreciate you listening to the podcast, Joel. We've got
two additional questions that we're going to get to, and

(35:00):
speaking of podcasts, like, we're gonna get a little meta
with it. We're going to talk about the medium of
podcasting itself plus one other right after the break. All right, Matt,
in just a second, we're gonna help a listener out

(35:20):
who has been crushing it with his own podcast, creating
great content for a lot of years. But how does
he scale. We'll get to that one in just a second,
but let's first get to a question from a listener
who's wondering if you should build a new house and
then rent it out.

Speaker 5 (35:32):
Hey, guys, this is Keith from the Oregon Coast calling
in again. I'm curious what your guys' thoughts are on
the build to rent option as far as real estate investing.
I have several just bare ground properties that are paid off,
utilities are in ready to build on. And I'm also

(35:53):
a builder, so I guess I'm able to build brand
new houses and then just rent them out as opposed
to like a spec house for you sell them. So yeah,
I'm just I don't hear a lot about this option,
but it seems like it could be pretty good long term. Alternatively,

(36:17):
I could just take the money I would use to
do that. I'd probably get it from pulling a heelock
out of my house and put it down payment on
the duplex or quad or something. Yeah. I don't know,
But what's your guys thoughts on this, Matt?

Speaker 1 (36:32):
At least this time, Keith got a question that isn't
like peering into my soul right the counseling relational Yeah,
his wife is like picking them apart after coming a counseling.
At some point, you, Keith, and I need to commiserate
on the on the Organ Coast over Beers about the
you know how difficult it is to be to be
married to or to be in a relationship with a therapist.

(36:53):
And I'm going to invite myself not to sit in
on your conversation but to drink beer and to go
hiking and laugh at us. But Keith, we really like
your question because normally we would be a little more
cautious of this approach, right, building something from scratch and
you know, with this long kind of drawn out plan
in order to have an investment property. But you specifically

(37:13):
check a bunch of boxes. You own the land, so
check the utilities are already in the ground. That's another check.
That's awesome, like the opposite of like when people are
trying to sell you lakefront property. I know it's like
for ten grand, you can get this lake front spot.
Here's somebody we know that will provide septic and yeah, yeah,
all that. But Keith is also the builder, and I
think if any of those details were different, our advice

(37:34):
would likely be different as well. Like if Joe Shmoe
was asking about just buying random dirt in a far
off location, like no, like a country song that is,
that would be our advice. We'd say, yeah, probably not.
But it sounds like, you know, Keith, he's got to
know how and he's got the ability, I think to
pull this off. It makes me think that we've got

(37:56):
a friend and maybe this is like ten, twelve, thirteen
years ago something like that. He in town purchased a
plot of land in the goal for him was to
build his house on that property, but unfortunately it didn't
the American dream. It did not work out for him.
Whether I think it was a combination of maybe not
having done quite as much due diligence, but also I
think maybe some slight dishonesty on the part of the cellar.

(38:18):
But bottom line, it was basically FEMA flood maps made
it unbuilt, could not build there, and I don't I
think he ended up he might still own the piece
of property, or maybe he donated it, and I think
he had to donate it for tax that was like
the best way she's gonna lost money, much less than
bottom money, and this area think it ended up end
up being like thirty thousand dollars, maybe that he'd originally
originally paid for that. So Keith, for you, we think

(38:40):
this could be an excellent route and an excellent path to
take for everybody else out there, listen to why we
think Keith is well suited to do this, because he
truly is.

Speaker 5 (38:49):
He is.

Speaker 1 (38:49):
Yeah, you're right. A lot of other people who would
say I want to buy some land and I want
to build on it. There's this a lot you need
to consider before you go that route, and utilities are
are definitely one consideration. But this is of like Keith's
superpower here, right, He'd likely to be able to build
this house for far less than what someone else in
the area would pay for a new home, given the
connections that you have and the sweat equity that you
would likely be able to put in. Keith, it means

(39:10):
like maybe you're doing the tiling right, maybe you're even
installing some of the electrical I don't know, but those
factors are critical when you're trying to figure out if
this is a sound decision, because the cost of building
has gone up substantially, but still have rents in home
values and so as long as the numbers make sense
for you and you're not taking on crazy high interest
debt to pull this off, it seems like a sound

(39:31):
decision to us. And it also makes me think, Matt,
he mentioned buying a duplex or a triplex. Well, Keith,
what if when you build this house a hybrid approach,
you build a duplex or a trilex, but you build
a next one that's I had a neighbor across the
street back when we lived in town as well, and
he built a really nice duplex. He lived in one
half and he rented out the other. He eventually moved

(39:51):
away from that from that part of town. He lives
elsewhere now when he rents out both and this has
been like a money maker for him hand over fists
for a whole lot of years. So if you the
next duplex, I think maybe that is the best of
both worlds. That's right. Also, before we keep talking about
real estate, Keith, he didn't mention any of his specifics,
but this is also assuming that Keith, that you are

(40:11):
already maxing out your retirement accounts, which are going to
be the easy button when it comes to growing your
net worth. But just because it's easy like that doesn't
mean that investing in the overall market that that is
an inferior option. And because in many ways it's actually
going to be the superior option, right, Like you're going
to be more diversified, it can be fully automated, you
don't have to worry about managing the properties. And of course,

(40:32):
like there's the chance that you may not quite get
the juicy returns like you would with real estate. But
that doesn't mean that you should skip investing of course
in boring tax advantaged accounts. And keep in mind too,
like one of the things you said was you haven't
heard many folks talk about taking this path. And I
think the reason that is is because oftentimes you have

(40:53):
real estate developers. You've got developers, right, and they are
the ones who are like choosing the sites and figuring
out how many houses they're going to kind of c
I'm on to put on the land. And then you've
got property real estate managers. They're typically specialized in what
it is that they do. From a business standpoint, that
makes a lot of sense. But as an individual, Keith,
if you want to be scrappy and are willing to

(41:15):
learn and do both of these things, man, you've got
the ability to see this thing through from soup to nuts,
right like you are. You've got the plots of land,
you can figure out like how it is maybe even
that you want to orient the house is on the property,
Like you have an ability to create some awesome places here.
But then see it through right like get it ready,
show it, manage it. And with that in mind, again,

(41:36):
like Joel said, this is it's almost like a it's
a superpower, but it's almost like an unfair advantage that
you have compared to anybody else who's looking to get
into real estate. Yeah, so put it to use. And
especially if you're going to live in half of it,
maybe maybe you say, oh, for two years, I'm willing
to live in the property, and maybe that's going to
make this and even better, make it even make more sense, right,
make it even better investment. But assuming you're good to

(41:58):
go right and you're ready to put that superpower use,
it's really important to make sure that you're performing your
due diligence right. Gathering the data, running the numbers is
a really important step in this whole process. You got
to figure out how much is this going to is
this house or multi family resident's going to cost me
to build? And what are you likely to be able
to get in rent for it? Is there a dearth
of rental units where you currently live? Like, knowing all

(42:19):
good information to be looking up in those local dynamics
are crucial in the real estate right and local zoning
as well. Like, so the fact that you mentioned that
the utility is already in the ground, I picture a
development of a bunch of houses, and maybe zoning may
not allow for multi family, or maybe there's an hoa
that keeps you from being able to rent that out.
These are obviously all things that you want to make

(42:39):
sure that you have a good grasp on. Yeah. Yeah,
And I love that he's taking a long term by
the way. I think it's really important because you got
to know the local dynamics. But you also got to say,
all right, well, how long am I willing to hold
on to this? And it sounds like Keith is willing
to make this decision and build this house and manage
it as a rental for years and years to come.
And so if the numbers make sense from the get go,
the longer your ownership timeline, the better it's going to

(43:02):
perform for you over the years. When we had Chad
carsonon recently, what did he say that owning a house,
owning rental property over the long term? Eventually it starts
out as a part time job and it turns into
a blue chip stock, and so the pain on the
front end can pay off in the back on the
back end in a meaningful way. So Keith, if yeah,
if the numbers make sense, even in the infancy of
the project, then I think it's it's only going to

(43:23):
get better over the years. It really makes sense down
the road, assuming there's not something terrible that happens next
you know, next door or down there. But Keith, we
appreciate your question and we really like how you are
thinking about this potential real estate investment. Joel, let's get
to our last question. This is from Doug and he
has an affinity for the eighties.

Speaker 6 (43:45):
Hey, Matt, Joel Doug here from Philadelphia, and I have
a question for you that is not a money question.
I'm pretty good on that front and have been listening
to you guys and taking your advice now for.

Speaker 3 (43:59):
Almost a year.

Speaker 6 (44:00):
This is more of a podcasting question. There are a
lot of different money podcasts out there, and you guys
seem to have built quite an audience for yourself. I
have a podcast on eighties movies, sort of a comedy podcast,
and then looking to sort of breakthrough or build an audience.
I mean, it's just a hobby. I know there are
services out there that will help promote your show. Blah

(44:23):
blah blah. I certainly don't want to spend money. Is
there any advice that you have any sort of outlets
or maybe how you guys got started. It's something that
I really haven't heard you guys talk about. And I
know that this is not a money question, So if
it doesn't make the show, I totally get it. But anyway,
thank you so much, shameless plug. The podcast is good times,

(44:46):
great movies. I don't know you can cut that out.
You don't need to play that if you don't want to.
All right, thanks guys. I really enjoy the show, Doug.

Speaker 1 (44:53):
We're not cutting it out. That totally gets to stay
for everybody to hear so that they can check out
your podcast. People should go listen. I wouldn't listen to
a couple of episodes and and you know, of course
the one I look for Matt, what's my favorite eighties movie?
Alf alf? Was he in a movie that would actually
have been a good pick. That's a good guess. But
no Blood Sport with John Damn? Oh classic Forest Whitaker.

(45:14):
I mean that that's a class he was like, because
I'm trying to hunt down John clop band. Yeah really,
Oh yeah, the Underground Fighting Arena, remember that, dude. I
just remember Jean Claude vandam doing the splits and yes,
it was like a cultural phenomenon, right, Like basically, as
a kid, you knew that if you could do the
splits like like him, somehow you'd get just as ripped.
Somehow you'd be able to kick everybody's butt. And it's

(45:36):
just science. I've managed to never do any of the
above things. But yeah, actually Doug covered blood Sport in
episode ninety five, So if you're interested in hearing more
about what an epic movie that is, go back and
listen to that. Well, we'll do it in the show notes.
But yeah, he's blinded at the end, and he's like, yes,
John Lee, Oh it's so good. But Doug, we're glad
you're getting you show off the ground. And he's been

(45:56):
at it for like two hundred something episodes, but he's
that's right. There are a lot of personal finance podcasts,
and there are a lot of good ones out there too.
We're really thankful that How to Money listeners listen to
this show and that they trust us. And so I
don't know exactly, Matt, I don't know if I could
boil it down to like how or why people listen
to us these seven steps, Right, We're not going to

(46:17):
have that per se. Hopefully it's because we have a
passion for the topic. Hopefully it's because we're decently well
versed in it, and hopefully it's because we're trustworthy as well. Yeah,
we've resonated with a specific audience, but also we've been consistent,
right because one of the things, Doug, I'm sure that
you've noticed is that the podcasting space is crowded. So
you were talking about Europe Joel at the beginning of

(46:37):
the episode. It's kind of like Europe in July, which
is why you should travel during shoulder season. But it
is totally true that there are basically millions of podcasts
out there who are vying for listening time, but a
huge percentage of this podcast that exists, well they've only
released one single episode, and then another massive chunk have
only released something like ten episodes. So with you being

(46:58):
in the hundreds, consistency clearly isn't a problem. That's like
step one, right, Yeah, it goes there, but I know
for us that was sort of one of the first
things that we focused on was to be incredibly consistent,
not only with making sure that we that we did it,
but just the same time every week as well. Because
we wanted to create something regular that listeners were looking

(47:20):
forward to. They knew that, like, oh, at the time
was Wednesday. That's when our first episode. When when we
only had one episode, we would release them on Wednesdays.
But you want to start building in that regularity. And
as you are starting to build up that base of listeners,
what they used to call it in the world of
radio was appointment listening. Right, Oh, okay, it's like, oh,
at six oh eight, you know when to tune in, Yeah,

(47:41):
your favorite host is going to come on and they're
going to talk about this or whatever like, And so
that's kind of what we wanted was, Hey, every week,
you get used to listening and learning, and you kind
of keep doing it because hopefully it's helping you and
it's fun. It's a part of your routine, right exactly.
And Matt, we also learned a lesson pretty early on
when people thought they were turning into a personal finance podcast,

(48:01):
and we talked about beer for like ten minutes at
the beginning. You remember that I do. Yeah, Well, early
early on we also called it poor not poor. Yeah,
like you poor beer not poor bro, which is also
just a confusing name, also a tong twister. We had
to change over the marketing to appeal to the audience
that we're looking for as well. But obviously we're fans
of craft beer and we included in the show. It's
a part of our vibe. But over time we found

(48:22):
more subtle ways to we've been into the show, and
so for instance, asking our guests about their craft beer equivalent.
That's a great way for it to be baked into
the show, But dominating the initial most important ten minutes
of our conversation with beer talk not so great, especially
when people are like looking for money, advice and the
practical help in that department. So of course you don't
want to neuter your show and remove all personality from it,
but finding a way to garner feedback where you're listening

(48:45):
to any critiques can help you to refine your podmat
We had an email address specifically dedicated to that, right.
It was it was like how tomoney dot com slash
get better. I don't know the yeah, the rl chep
that alive or not, but that was the way people
could submit negative feedback and say like, listen, you guys
suck on this. You really need to approve on this,
or constructive criticism. I can't believe you said this always helpful,
and so we try to listen from that feedback and

(49:06):
make adjustments because yeah, we're learning on the fly too. Yeah. Yeah,
we are always trying to create a better product at
the end of the day. And that being said, like
I'm going to take this opportunity if you have some
feedback for us, totally let us know. I think we
still have that page up. If I think Ford slash
get better or do better. Maybe that was it, but
either way, just email us. Email us at howtomneypod at

(49:27):
gmail dot com. It goes to both Joel and I.
We always read those emails. But Doug mentioned some of
those different services that you can pay to promote your show. Obviously,
don't do that because a lot of those are scams.
I'm sure you're aware of that. Just today I dove
into the what are the message requests in Instagram which
I only look at like once every quarter. Basically I'm

(49:50):
missing like eighty percent of them. They're so there's like
something like thirty promotion things where it's just like for
ten dollars, you get one thousand or one hundred new
you know, one hundred new all of that kind of stuffs.
Every like friend request I got on LinkedIn is the
same thing exactly. And you know your follower count or
those downloads that you know they might go up, but
that might just be the product of bots. So I

(50:11):
wouldn't trust any of those actual you know, those requests,
those Internet scam artists who promise to raise the profile
of your show. And I also want to mention that
you're probably narrow casting with the content of your show, right.
This isn't a problem though, given what it is you
talk about, given the length of your show, it's just
likely I think that you're going to have fewer, yet

(50:32):
more rabid listeners and fans of good Times what was it, Great,
Good Times? Great Movies. Yeah, So I'm not sure if
you're looking to monetize the podcast, but if you are
taking the route of Patreon or buy my Coffee, these
can be great ways, Like those platforms can help to
just turn some of those diehard listeners into some actual

(50:52):
money where you're able to monetize the show gradually. It
doesn't have to be this all or nothing kind of thing.
I think there are ways for folks to come to
kind of dabble and kind of start offsetting some costs
and maybe maybe eventually you're, oh, man, are we actually
generating an income? That would of course be an awesome thing.
I mean, the real way to have the most successful
podcast is to pivot into a crime show, because that's

(51:14):
what people love and listen to the most. And that's
what actually Matt and I are going to do starting
next week. We're ditching the personal finance that we're gonna create.
We're going to commit the crimes. Yeah yeah, and then
we're gonna detail it along the way. We're gonna document it.
It's gonna be it's gonna be insane. We're gonna hide
in the woods in trees, and we'll be on the
run for hopefully years. But the quietly podcasting like Blair
Witch style about right, that would actually think about it,

(51:37):
that would crush because if you were creating a show
in real time and in the new run, yes you're
on the run, But then I guess you would get deplatformed,
right like they would, because they wouldn't want that going
out unless somehow you had control over your platform, you know,
like if you were you know, Elon musk Rich, you
can control the means of which you're communicating with folks, right, Well,

(51:58):
so enough of that, and if you or you'd have
other ways to promote your podcasts, for sure, But and
I of course I'm joking, But the real reality is
there's certain genres and certain types of podcasts that just
have more purchase with a broader audience, right, And so
I think a personal finance podcast it's not going to
be as listened to as one of the more popular
long form interview or crime podcasts. That's okay, But it's

(52:21):
the thing that we want to create. And so you're
creating the thing you want to create, and that's the
most important part you Yeah, I think if you're this
far into it, you have found your people. Yeah, and
that is what's important. Yeah. Yeah. And the other thing,
I mean, Seth Godin talks about the minimum viable audience,
and I think you have to figure out, Okay, what
is that for me? If I've got fifteen hundred, eighteen hundred,
two thousand people listening every single episode I create? Well,

(52:42):
would I show up to a lecture hall if two
thousand people wanted to listen to me talk about eighties movies?
Heck yeah I would, right, because I'm that passionate about
it and to see that many people in one place,
But sometimes we look at it as numbers on a
screen when these are real human people digesting our content,
which is super cool. So think about it like that
and then also realize, actually, there's a lot of people
I'm speaking to, a ton of people who really like

(53:03):
and care about the same thing I care about, and
so I love that. Doug called it a hobby, like
I think the number one rule of podcasting is that
you should do it if you feel compelled to get
a message out into the world. You've got to love it,
and it's okay to want to grow, but don't forget
the reason you started it and why you take the
time every week to continue creating. So, Matt, the way
we started was like literally we said, hey, we're going

(53:25):
to be triple A at everything. We're not going to
be pro level because that would take too much time,
too much effort. But as long as we're hitting triple
A marks, as long as we're professional, doing our best,
and we're being consistent, like you said, and then we
try to get on another podcasts to kind of raise
the profile of our show and help other people find
out and were not just podcasts that did the exact
same thing we did kind of tangential podcast right. Yeah,

(53:45):
But that being said, we didn't do a ton of that,
like like literally maybe just like a few, like a handful,
but slowly over time we did build up an audience.
And I guess I'm thinking of marketing like it makes
me like early on we made coozies, but we didn't
even send those out to listeners. I think we just
gave them up to our friends because we thought it
was cool, Like we were just nerdy and it was
something that we enjoyed. But that's kind of what Joel's

(54:06):
speaking to, like, make sure that it's fun for you.
Don't worry too much about the marketing side of things. Obviously,
with it's like so we were able to grow the
show and then you know, we're with iHeart Now and
so they do a lot of the marketing for us
as well. But at the end of the day, don't
I honestly wouldn't even worry too much about that because marketing.
I heard this quote where they said that basically marketing

(54:27):
wins the day, but quality content wins the year, Like like,
marketing is good for the short run, but unless you're
creating a quality product. It doesn't really matter what the
marketing plan is. It depends on what it is that
you're creating. And so Doug, I think focusing on the
quality of the show, don't forget that. That is what
you need to be focused on, you know, first and foremost.

(54:48):
And you're supposed to worry about the marketing and the
scaling and growing side of things. And Dugs is the
kind of show where people it's going to get word
of mouth trash right, people who are like I love
eighties movies and they know their best friend loves eighties
movies and they're like, you got to listen to this
pot cast. I'm listening to that. That's gonna be the
best way for it to grow. I think you could
get on you know, try to get on another podcasts.
You can, you can work on other ways to grow

(55:08):
and to find your audience, and you can put a
lot of effort into that, But do you have the
time and the like the biggest thing, focused the majority
of your time on creating something great that you like creating,
that's gonna be the most sustainable. It makes me think
we have a we have a listener Matt who writes
about a newsletter about fitness, and that's this thing when
it comes to fitness is like, do what's sustainable. You
might like be able to go hard seven days a

(55:29):
week for two weeks, but then you're gonna burn out,
you're gonna stop. And so whatever workouts you choose, make
sure it's something you want to replicate, you want to
keep doing. And that's kind of I found that to
be true in my own life. If I try to
do something that I hate, I'm probably gonna like, you're
gonna burn out. Yeah, exactly. All right, Doug, we wish
you the best man, and hopefully you get millions of
downloads just from this Sweet Heat of Money podcast est

(55:51):
the Sweet HTM plug. The boys gave me a HTM
bumps what we'll call it. That's right. The beer you
and I enjoyed, Joel was chubby unicorn again. This was
a guava milkshake. I pa by common Space. What were
your thoughts? You know, it's funny on the on the
can it says it came with it had guava puree
in it, so I expected it to be a little thicker.
It wasn't. Oh yeah, it was a little sweet, little

(56:13):
vanilla smoothie vanilla smoothness to it, and so I would
say with yes, some of that guava note, but not
as much as I expected. Yes, so the guava lent
it that like guala passion fruit, like tropical flavors, like
it makes me think of like not Skittles, but the
tropical skittles yea, where you know, I don't know, it's
it's hard to explain kind of that softness that you

(56:33):
get with some of the tropical flavors. But we definitely
had that going on in conjunction with the fact that
I assumed there was lactose in this considering it was
a milkshake milkshake I pa, but with it being an
ipa that also it wasn't overly sweet because you had
the bitterness from the hops that worked really well. And
actually really dug this one, and I dug the label too.
It's got the unicorn on there, and we were joking

(56:53):
before we hit record that, uh is it weld works?
They They've got like a lot of unicorn imagery with
their brand, and so it might be them. Somebody's got
the ninja versus unicorn. All Yes, yeah, I think that's
what works. I could be wrong. No, I don't think
it is. I think it's it's half acre or something
like that. Maybe. Oh, I don't know. I should We
should not. We should. We're craft beer experts, Matt, we
should know. But they've got multiple beers that are all unicorn,

(57:15):
unicorn based whatever. So I hope Common whoops almost dropped
Common Space doesn't get shut down because they got the
Unicorn on there. Hope they don't get the cease and desists.
There's plenty of There's plenty of room out there for
just like there's plenty of room for all the different
podcasts out there, there's plenty of room for unicorn and
craft beer. I love a good like fruited milkshake IPA like.
One of my favorites of all time is the strawberry

(57:37):
milkshake IPA from I Want to Wrecking Bar. Oh, yeah,
that is a delicious one. But yeah, this one was
solid and it's Yeah. If you like sours any like IPAs,
put them together, this is what you get, right, that's right.
We'll make sure to link to any of the different
resources we mentioned during this episode up on the website
and in our show notes at howtomoney dot com, and if

(57:58):
you are not yet a subscriber to the how to
Money newsletter, make sure that you are howdomoney dot com
forward slash newsletter. You can see some of the previous
issues there to get a sampling, but go ahead and
sign up to ensure that you don't miss the next
newsletter that goes out on Tuesday, right tomorrow morning. But buddy,
that's going to be it for this one until next time.
Best Friends Out, Best Friends Out,

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Ask HTM - Work Provided Life Insurance, Compounding Returns with a 401k True-Up, & Selling a Home to an iBuyer #721

Episode Transcript

Hosts And Creators

Joel Larsgaard

Matthew Altmix

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