Ask HTM - Work Provided Life Insurance, Compounding Returns with a 401k True-Up, & Selling a Home to an iBuyer (Bestie Ep) #1081 - 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.

Speaker 2 (00:25):
That's right, buddy, 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

(00:46):
one K 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 3 (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.

Speaker 2 (01:00):
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 of others on
today's episode.

Speaker 1 (01:13):
All right, before we get to that. Man, I wanted
to quickly mentioned, have you heard of EU two six one.
It's a law in the new COVID variance that sounds
like no, although I can see why you said that. No,
but there's BA two six one. But so this is
a law in Europe that basically says that you get

(01:33):
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?

Speaker 2 (01:41):
EU?

Speaker 1 (01:42):
Okay, yeah, exactly. 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.

Speaker 2 (02:00):
You might be entitled the compensation.

Speaker 1 (02:02):
And you're like, oh, yeah, what twenty thirty bucks And
it's like no, no, no, no, hundreds and hundreds and hundreds
of dollars to 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

(02:24):
look at the details. So if you fancy like that,
like all of Joel's friends are, make sure to jets
threading 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 it helps you
understand how to get compensation for EUQ six to one
if you had a substantial delayer a cancelation. But it's

(02:45):
kind of cool, Like my sister did this a few
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.

Speaker 2 (02:53):
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, 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

(03:15):
oh that's what the credit card and the EU six one
because 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.

Speaker 1 (03:23):
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
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

(03:44):
was that last week or a couple of weeks ago, but
it's official.

Speaker 2 (03:46):
This is the official announcement.

Speaker 1 (03:48):
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.

Speaker 2 (03:55):
Let's incentivize folks as well. Let's well, we'll have a
few pairs of our how to money socks on hand.

Speaker 1 (03:59):
Sure, yeah, you beer, we'll see but yeah, we hope
to see you there at Inner Voice. How to money
hang meet you, fellow listener this Friday from four to eight.

Speaker 2 (04:07):
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 on this guava milkshake IPA at the end
of the episode.

Speaker 1 (04:20):
That's right, but let's get to the subject at hand, Matt.
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
specific instructions for how to do that at howtomoney dot com.

(04:40):
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 4 (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 for's
going through a traditional real estate agency. When might you
choose one option over the other? Thank you?

Speaker 2 (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. 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.

Speaker 1 (06:14):
Be called taking a bath, right for sure. 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,

(06:37):
simply put, their big companies 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

(06:59):
market before they ended their eyebuying 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.

Speaker 2 (07:14):
Right.

Speaker 1 (07:14):
And so since then EE buying is kind of wised up,
so you're really you're much less inclined to get an
amazing offer today. Two three years ago you might have
seen Zilo 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

(07:37):
they I guess they didn't really they had another due diligence.
They didn't figured out what it took to buy and
sell homes effectively 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 2 (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):
eye buyer 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

(08:54):
a realtor, 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 iebuyer even in the name itself, like it makes
me a think of eye Robot or whatever the movie
and is robots and stuff.

Speaker 1 (09:12):
Well, you said service, But most people when they're in
there to sell me an iBuyer, they're not 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
iebuyers do.

Speaker 2 (09:31):
Well.

Speaker 1 (09:32):
They are the convenience play, the convenience pick. But we're
talking to one of the 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,

(09:54):
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 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

(10:14):
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 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

(10:34):
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 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.

Speaker 2 (10:51):
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 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 low balled because they're not really taking that into

(11:12):
account as much as some of the other things that
a lot of folks are looking for.

Speaker 1 (11:15):
I fearce 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 to play with you.

Speaker 2 (11:23):
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
at which you could sell your house, how it's streamlined,
that's certainly one of the advantages to going with an eyebuyer,

(11:47):
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. But you are paying

(12:08):
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 favor of going the

(12:30):
taking the eye buy route.

Speaker 1 (12:31):
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 you're going to make less money for it.

Speaker 2 (12:50):
Does feel like the pawnshop 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

(13:11):
what Eyebuyer is looking to do.

Speaker 1 (13:13):
Yeah, I mean we've all seen Pond Stars. We know
what happens there. Okay, I actually haven't seen Pond Stars.
Oh really, you've never seen one episode of it?

Speaker 2 (13:19):
I don't think so. I mean I understand the premise.

Speaker 1 (13:21):
Next, you're gonna tell me you never saw one episode
of Orange County Choppers or whatever that was.

Speaker 2 (13:24):
Oh, I know, I definitely Okay, Yeah, they're always fighting
and yeah stuff at.

Speaker 1 (13:28):
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 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,

(13:49):
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 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

(14:10):
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 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

(14:30):
anli likelihood you're going to do better go in the
traditional Totally agree.

Speaker 2 (14:33):
Yeah, it can be a great data point essentially to
help you to decide what it is that you should
be 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

(14:56):
it's a more efficient marketplace, But it's not really like
that's 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 more

(15:19):
attractive to me, Like I'm more hopeful for that as
opposed to just another player that's in between you and
your money.

Speaker 1 (15:26):
But 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.

Speaker 3 (15:30):
Right.

Speaker 1 (15:30):
This is a complex market, the market of real estate,
and it varies from street to street. And like you said, Madi,
could a dog barking across the street, a troublesome house
that's right next door, Well, 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.

(15:54):
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 more right after this.

Speaker 2 (16:14):
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 another question. It's
a question of a question tak you back off of
a question. We'll get to that one right now.

Speaker 5 (16:29):
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 and 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 where 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.

Speaker 2 (17:31):
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.

Speaker 1 (17:41):
You can shop for it with multiple providers online in
a simple sitting. And so we're big fans of term
Life by the way, in case you didn't know, if
you're like, I think I need some life insurance, term
life 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

(18:01):
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
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.
And I know 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 weeks or do you think you need more months?
To mourn your low sentiens. 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

(18:58):
that you're properly prepared.

Speaker 2 (18:59):
So that you.

Speaker 1 (19:00):
Feel can feel comfortable that you have enough insurance in
the case of that worst event happening.

Speaker 2 (19:07):
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 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

(19:29):
month for a policy that you don't necessarily need. If
you've thought through some of these some of those questions that.

Speaker 1 (19:34):
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 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

(19:55):
need more, you're going to want to shop on the
open market as opposed to going through that work place
playing more.

Speaker 2 (20:00):
Yeah, but with that being or a perk that your
employer might offer, totally take take advantage of that thing.
But I get the freestyle. 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

(20:22):
that you work for. But yeah, important things to think through.
And this is and this is coming too from.

Speaker 1 (20:27):
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,
a 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, but we did

(20:49):
have a house, and I think it was about two
years after we had that house that we had this
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 more

(21:10):
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.

Speaker 2 (21:32):
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 life policy, Like this

(21:53):
is something that I would maybe put on your medium
term financial to do list, but not something that needs
to happen 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. You might end up literally paying

(22:14):
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 fine to wait two or three

(22:35):
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 decade of not paying for paying

(22:57):
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 people being told by really smart people, hey,

(23:18):
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 case 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 those other things that you're getting after.

Speaker 1 (23:39):
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 whole life policy, is because

(24:01):
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 off with the term policy and

(24:22):
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.

Speaker 2 (24:31):
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 to get for those kids
to get out of there before you know, obviously they're
no longer dependent on you. Yeah.

Speaker 1 (24:45):
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
then again you might say, no, no, that would keep
us from being able to achieve this, this and this,

(25:08):
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.

Speaker 2 (25:15):
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, 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.

Speaker 6 (25:35):
Hi Matt 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 oh 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.

Speaker 6 (26:20):
Seen to do this.

Speaker 3 (26:21):
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, by only contributing one
time per year, am I losing the long term benefits

(26:42):
of compounding interest in my four oh one k? Thank
you guys, have a great.

Speaker 2 (26:47):
Day, Matt.

Speaker 1 (26:48):
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.

Speaker 2 (27:03):
Everybody refer to each other as brother?

Speaker 1 (27:04):
And yeah that might get a little creepy, right, but
maybe not quite to that 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

(27:25):
what does that make you? I godmother? Maybe fairy godmomay
I will say that, all right, go with that. But Gavin,
I'm glad to have you around 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 it maximizing those retirement.

Speaker 2 (27:44):
Accounts for personal experience. Welcome to the four kids club. Right,
You've got that. Not easy.

Speaker 1 (27:49):
He's the mama bird right like 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,

(28:09):
if your employer's plan goes 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.

Speaker 2 (28:21):
But if your.

Speaker 1 (28:21):
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 you're not
committing money to your four to one K regularly throughout
the year.

Speaker 2 (28:37):
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 how much we would contribute.
This is how much we're going to match every single paycheck.

(28:59):
But if 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 going to 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 you contribute to
your four and K, it acts as a trigger for
your employer to come to match with their matching contribution.

(29:23):
And so what that means is that if you invest
at the end of the year with the 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 mash on those three paychecks, and 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,

(29:46):
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.

Speaker 1 (29:53):
Well, you're literally putting like ninety percent of your paycheck
aside to hit the limit.

Speaker 2 (29:56):
Yeah, exactly. And were you to 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.

(30:19):
Some employers do that. 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 O 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

(30:42):
do it.

Speaker 1 (30:42):
Yeah, so you just have to know before you kind
of figure out how 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 truer feature,
you'd be well served to do whatever and to make
sure that you regularly invest right at least up to

(31:02):
the match with every single paycheck, not waiting let's say
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.

Speaker 2 (31:36):
It's more minores.

Speaker 4 (31:37):
Right.

Speaker 2 (31:37):
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 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

(32:00):
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 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

(32:22):
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, 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

(32:43):
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 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

(33:04):
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.

Speaker 1 (33:09):
Yeah, we're not trying to put pressure on you because again,
you've got four miles to feed. So it's not like
st 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.

Speaker 3 (33:21):
Ye.

Speaker 1 (33:21):
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 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

(33:42):
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 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

(34:03):
get yours this year knowing that it's not actually taxed
at a higher rate.

Speaker 6 (34:06):
Man.

Speaker 1 (34:06):
I hear that from people all the time. They're like, Oh,
it's a misconceptions. 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.

Speaker 2 (34:17):
You're gonna get some money back. Yeah, I mean it
kind of comes back again to just some of the
most common paths that employers take, which is why 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.

Speaker 1 (35:18):
All right, Matt, In just a second, we're going to
help a listener out 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 6 (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

(35:53):
also 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

(36:13):
good long term. Alternatively, 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.

Speaker 2 (36:31):
This, Matt? 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 to counseling.

Speaker 1 (36:42):
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.

Speaker 2 (36:53):
And I'm going to invite myself not to sit in
on your conversation, but the 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 up plan
in order to have investment property. But you specifically check

(37:13):
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.

Speaker 1 (37:20):
Opposite of like when people are trying to sell you
lake front property. I known it's like for ten grand,
you can get this lake front spot.

Speaker 2 (37:25):
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
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.

(37:47):
But it sounds like, you know, Keith, he's got to
know how ain't He's got the ability I think to
pull this off. It makes me think that we've got
a friend and maybe this is like ten twelve thirteen
years ago something like that. He in town purchased a
plot of land and the goal for him was to
build his house on that property. But unfortunately it didn't

(38:08):
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.

Speaker 1 (38:18):
But bottom line, it was basically FEMA flood maps made
it unbuilding, 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 and the and this I think he.

Speaker 2 (38:33):
Ended up ended up being like thirty thousand dollars maybe
that he'd originally originally paid for that. So Keith, for you,
we think 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 he truly is he is. Yeah, You're right.

Speaker 1 (38:50):
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 like maybe you're doing

(39:11):
the tiling right, maybe you're even installing somebod 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 and 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 decision to us. And it

(39:33):
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 away from that from that part of town.
He lives elsewhere now and he rents out both and

(39:54):
this has been like a money maker for him hand
over fists for a whole lot of years. So if
you nice duplex, I think maybe that is the best
of both worlds.

Speaker 2 (40:03):
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 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 is an inferior option. And
because in many ways it's actually going to be the

(40:25):
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, 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

(40:45):
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 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 cran put on the land.
And then you've got property real estate managers. They're typically

(41:06):
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 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

(41:26):
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, 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.

Speaker 1 (41:45):
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 go right and
you're ready to put that superpower to 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

(42:06):
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 good information to
be looking up into local dynamics are crucial in the
real estate right and.

Speaker 2 (42:24):
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 sure that you have a good grasp on.

Speaker 6 (42:41):
Yeah.

Speaker 1 (42:41):
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

(43:01):
it's going to perform for you over the years. When
we had Chad Carson on 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
infasy of the project. Then I think it's it's only

(43:23):
going to get better over the years.

Speaker 2 (43:24):
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 7 (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 almost
a year. This is more of a podcasting question. There
are a lot of different money podcasts out there, and

(44:05):
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 blah blah. I certainly don't want to
spend money. Is there any advice that you have, any

(44:28):
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, great movies. I don't know you can
cut that out. You don't need to play that if

(44:49):
you don't want to. All right, thanks guys. I really
enjoy the show, Doug.

Speaker 2 (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 listen.

Speaker 1 (44:59):
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?

Speaker 2 (45:05):
Alf alf? Was he in a movie that would actually
have been a good pick. That's a good guess.

Speaker 1 (45:10):
But no Blood Sport with John clap damn. Oh classic
Forest Whitaker. I mean that that's a class. He was
like trying to hunt down John clop band. Yeah really,
Oh yeah, the Underground Fighting Arena, remember that, dude.

Speaker 2 (45:21):
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
just science.

Speaker 1 (45:37):
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 do it in the show notes. But yeah,
he's blinded at the end, and he's like, yes, John Lee, oh.

Speaker 2 (45:53):
It's so good.

Speaker 1 (45:54):
But Doug, we're glad you're gett your show off the ground.
And he's been 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 the seven steps, right, We're

(46:17):
not going to 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.

Speaker 2 (46:25):
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 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

(46:45):
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 in the hundreds, I think consistency clearly isn't a problem.
That's like step one, right, Yeah, it goes there, but

(47:06):
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 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

(47:27):
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, Okay,
it's like, oh, at six oh eight, you know when
to tune in, Yeah, 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,

(47:47):
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.

Speaker 1 (47:54):
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 and
we talked about beer for like ten minutes at the beginning.

Speaker 2 (48:03):
You remember that I do. Yeah, Well, early early on
we also called it poor not poor Yeah, like you
poor beer not.

Speaker 1 (48:09):
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 more subtle ways that 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

(48:30):
initial most important ten minutes of our conversation with beer
talk not so great, especially when people are like looking
for money, advice and 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 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

(48:52):
how tomoney dot com slash get better. I don't know
the yeah, the RL like 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 improve on.

Speaker 2 (49:01):
This, or constructive criticism.

Speaker 1 (49:02):
I can't believe you said this always helpful, and so
we try to listen from that feedback and make adjustments
because yeah, we're learning on.

Speaker 2 (49:09):
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 forward slash, get better or do better.
Maybe that was it, but either way, just email us.
Email us at howtomneypod at gmail dot com. It goes
to both Joel and I and we always read those emails.

(49:32):
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 guessing like eighty
percent of them are They're so there's like something like

(49:53):
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.

Speaker 1 (50:00):
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 wouldn't trust any of those actual
you know, those requests, those Internet scam artists who promise.

Speaker 2 (50:17):
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 more rabid listeners and fans
of good Times what was it Great, Good Times? Great movies. Yeah,

(50:38):
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 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

(50:59):
for folks to kind 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.

Speaker 1 (51:10):
I mean, the real way to have the most successful
podcast is to pivot into a crime show, because that's
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 going
to create. We're going to commit the crimes. Yeah yeah,
and then we're gonna detail it along the way.

Speaker 2 (51:25):
We're gonna document it. It's gonna be it's gonna be insane.

Speaker 1 (51:27):
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, that would crush because you were creating
a show in real.

Speaker 2 (51:40):
Time and in the new run, yeah, 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,
so enough.

Speaker 1 (51:59):
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 the thing

(52:21):
that we want to create. And so you're creating the
thing you want to create, and that's the most important part.

Speaker 2 (52:26):
Yeah. I think if you're this far into it, you
have found your people. Yeah, and that is what's important.

Speaker 6 (52:30):
Yeah.

Speaker 2 (52:30):
Yeah.

Speaker 1 (52:31):
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, 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

(52:51):
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 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

(53:12):
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 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

(53:32):
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 were not just podcasts that did the
exact same thing we did kind of tangential podcasts, right.

Speaker 2 (53:45):
Yeah, 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 koozies,
but we didn't even send those out to listeners. I
think we just gave them out 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

(54:05):
of what Joel's 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 wins the day, but quality

(54:29):
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.

Speaker 1 (54:44):
That is what you need to be focused on, you know,
first and foremost, and you're as 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 Cass, 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

(55:05):
get on another podcasts. You can, you can work on
other ways to grow 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 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,

(55:26):
do what's sustainable. You might like be able to go
hard seven days a 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.

Speaker 2 (55:43):
Yeah, exactly, all right, Doug, we wish you the best
man and hoepfull.

Speaker 1 (55:47):
You get millions of downloads just from this Sweet out
of Money podcast.

Speaker 2 (55:50):
Ess the sweet HTM plug the boys gave me HTM
bump as well. 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?

Speaker 1 (56:04):
You know, it's funny on the on the can it
says it came with had guava puree in it, so
I expected it to be a little thicker.

Speaker 2 (56:10):
It wasn't.

Speaker 1 (56:10):
Oh yeah, it was a little sweet, little vanilla smoothie
vanilla smoothness to it, and so I would say with yes,
some of that guava note.

Speaker 2 (56:19):
But not as much as I expected. Yes, So the
guava it 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 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

(56:40):
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 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.

(57:01):
Somebody's got the Ninja Verse 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 know. We should. We're craft beer experts, Matt,
we should know. But they've got multiple beers that are
all unicorn, unicorn based whatever. So I hope common whoops
Almos dropped Common Space doesn't get shut down because they

(57:22):
got the Unicorn on there. Hope they don't get the
cease and desist. 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.

Speaker 1 (57:30):
I love a good like fruited milkshake IPA like. One
of my favorites of all time is the strawberry 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.

Speaker 2 (57:50):
We'll make sure to link to any of the different
resources we mentioned during this episode up on the website
in our show notes at howtomoney dot com, and if
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

(58:12):
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 (Bestie Ep) #1081

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Hosts And Creators

Joel Larsgaard

Matthew Altmix

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