How to Money

Is it better to spend your energy saving money or investing in making more? I spoke with Joel and Matt, the finance guys from the How to Money Podcast. They have some excellent advice on how to make your money work for you and live rich on less money.

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Episode Transcript

Speaker 1 (00:00):
Prodigy is a production of ihow Our Radio. When I
was growing up, we lived in a nice house in
a really nice neighborhood. Some people would see where we
lived and say that we were rich, but I knew
that compared to most other families in the neighborhood, we weren't.
I remember being annoyed with my parents for not buying
any more things that I wanted. But my mom's frugal,
probably because she never had much money as a kid.

(00:23):
When I got older, I saw a rich friend's family
who was down their luck get a car repossessed, and
it made me so grateful that my parents chose to
live that way, and they tried to instill those values
in me. But of course, everything I know I had
to learn the hard way. A few years after college,
I was making pretty good money. I got a couple
of credit cards and max them out. The payment's got

(00:45):
to be so high I couldn't pay them, and instead
of dealing with it, I chose to ignore it. Hopefully
you've never experienced this, but the anxiety you get from
constant threatening letters and phone calls to settle a debt
is crushing. Even today, I hate hearing my phone ring
and get anxious when checking the mail. Rock Bottom for
me was two events. First, my power got shot off.

(01:07):
I sat there in the dark, just contemplating how worthless
I was. I vowed to never let that happen again,
so I began looking for ways I could save money.
The second was getting served by the credit card company.
They were suing me to settle my debt. At this point,
I had some money saved, so I contacted a lawyer
and settled it. When it was over, I felt a
massive relief and I was determined to never experience that

(01:28):
level of constant internal pain again. Even though I had
finally settled that debt, my credit was still shot. I mean,
twenty something misspayments will do that. I did want to
eventually buy a house and not be embarrassed when my
credit report was run, so I started doing some more research.
Knowledgit bank would give me a line of credit with
my history, but I learned you could open something called

(01:49):
a secured credit card in order to build your credit.
With a secured card, you put the initial money up front.
For me, it was five Then you use it like
a regular credit card, and if you don't pay, the
bank has your deposit to cover the debt, so there's
no risk for them. Once you use it properly for
a certain amount of time, the bank returns your deposit
and gives you a line of credit. For me, it

(02:10):
was a year after the first year I got my
deposit back and they gave me a real line of credit.
After my second year, they increased my limit. My score
went up, but it was still pretty bad. I did
some more research and learned that getting added as an
authorized user to a card with a good history and
a large limit would help even more. Luckily, my parents
agreed to add me as long as I never had

(02:30):
access to the card and with my history. I don't
blame them, but I am very grateful that they did
ad me. My score went up like a hundred points overnight.
When I was conscious about living frugally, I was able
to save money. I built an emergency fund and was
able to buy a car when my old one died.
I didn't like renting because I hated having a landlord.
It just gave me like a level of uncertainty, so

(02:51):
I wanted to buy a house. When I first moved
to Atlanta, I rented a house. It was a three
to and cost a month. Five years later, when I
moved out, I remember thinking that if I had a
roommate covering half the rent during that time, I would
have saved thirty six thousand dollars in rent alone. So
while I don't love the idea of having a roommate,
when I finally bought a house, I got one and

(03:13):
it turned out fine. I barely even see the guy
and it provides some extra breathing room. Now, while I'm
not rich, I'm not living paycheck to paycheck either, and
the future is bright instead of cloudy. So living frugally
helped me get out of debt and achieve some financial goals.
But like many people in my generation, retirement feels kind
of like a fantasy. So while I'm still careful not

(03:34):
to get into debt, my relationship to money has shifted. Now.
Instead of thinking about new ways to save money, I'm
focused on how to make more. My name is Lowell
Blante and this is Brodigy. This episode is about finances.
When planning for this, I realized we have a really
popular show called How to Money, and the host actually

(03:54):
live really close to me. It quickly became one of
my favorite podcasts. Not only is there a on a
valuable information in there on all sorts of financial topics.
The hosts are really funny. They also have a website
with a bunch of info and resources you can find
at how to money dot com. Their names are Joel
and Matt. I was living on my own, like renting
and you know, making decent money, and by power got

(04:17):
shut off one day and I was just like, I
don't want that to ever happen again. So I started, like,
you know, trying to live I guess more frugally, following
you know, different advice and tips, and I was really
interested in like the fire method that worked, you know,
I saved up money eventually bought a house, and then
afterwards I was like, you do I want to focus
on earning more and focus less on spending less. Yeah,

(04:42):
I was curious what your guys thoughts and opinions are
on that, honestly, Like, I mean, that's the lowest thinging fruit, Like,
that's how you can most immediately make a difference in
your money. Right if you start spending less, like literally today,
you cannot buy something that you're thinking about buying, and
guess what you're gonna have nets You're you know, more
of that money or you and like slash a bill,
like cut it out of your life today. Yeah, yeah,

(05:02):
it's so that. I mean, that's the biggest difference, right
between spending money and earning money. Is that earning money,
I mean it takes a little bit of time, whereas
spending money. I mean it's so gratifying because literally right
now you can immediately see a difference in the amount
of money that you have in your bank account. But
the thing is cutting back when you're spending that can
only get you so far. Uh. You can't go below
a certain threshold because you're still going to have to

(05:23):
pay your rent. Uh, and then just beyond that too.
I mean there's lifestyle desires that you might have, right
you don't want to continue to just eat ramen or
rice and beans, balancing out with you might die tomorrow.
Ver says you might live to a hundred, you know,
So it's kind of a tough trade off, it is.
I mean, I think one of the things is like
for galvyes wonderful, but it also can't fix a lack

(05:44):
of income problem. And so I think you really do
have to if you're trying to get dial in your
personal finances, get both in order, and I think for gality,
like Matt said, is probably the first stop. But then
you also have to work towards increasing your income. And
I think sometimes the people that are hyper frugal, they
it's almost like this unwillingness to It's like they're avoiding

(06:06):
maybe more difficult, sometimes vulnerable process of trying to increase
what you bring in. It's it's not easy, that takes time,
like Matt said, and so um, I think sometimes those
hyper frugal people are avoiding some of those other things,
and I think you need to find that balance of
in between. Um and I agree, like, yeah, the yelow
mentality is is something that a lot of people struggle with.

(06:28):
I will say, I think in some ways. The great
thing we talked about this on a recent show is
there's like a good yellow mindset and there's a bad one.
There's like a yellow like I'm gonna spend all my
money today because I'm not promised tomorrow, and that's a
bad way of living because you're likely going to live
a little bit longer than than just today. But then
there's the other thing of like money is not everything
and and it's not like you know, we talk trying

(06:49):
to talk about money in a balanced way, and it's
not about as massing as much as you can or
saving as much as you can for retirement and putting
off all of the good things that you want to
enjoy today. That's why Matt and I drink a crap
beer on every episode. It's like, we love craft beer.
We're gonna prioritize it. We're gonna prioritize even maybe a
twenty dollar bottle of craft heer sometimes because it matters
to us, and we're not going to put that. You know,

(07:10):
some people might be like, you could put that in
your I r A. Sure we could, but we love
craft beer and so we're going to prioritize. So there
is that balance that you have to continually strike when
it comes to money. Um, and you don't want to
go too far in one direction or the other. Yeah,
That's that's what Joel says. Every time he's thinking about
buying a nice bottle of beer, He's like, yoo, screaming
out and he just drops his wallet. But I mean,

(07:32):
you know, on the topic though, of earning, like one
of the other benefits of pushing yourself to earn a
little bit more, right, is just personal development, personal growth,
Like you can see yourself learning new skills, like entering
situations that maybe you wouldn't have otherwise stepped into. Uh,
if you're only focused on the other side of the equation. Yeah, simple,
just make more money. But um I was thinking, like,

(07:52):
you know, that's different for everyone, but for me or
like I think maybe applied to a lot of people,
is just too if you're trying to make more money,
is make it well known in the organization that you
want to be advanced. Well, I think you gotta work
for that too, Right. It's one thing to ask for raising,
it's another thing to be able to document all the
things you've done over that past year that have exceeded
the expectations of your supervisors. Right, And so I think

(08:14):
that's that's one of those things where you're supposed to
have all the evidence there right to show them make
it very easy decision, and then you know, if they're
if your boss is like, I don't think we can
do that this year, you can say, well, what's it
gonna take for in six months for me to get
that raise and have them outline it for you and
then crush all those goals, you know, like it's it's
one of those things where the company line can be

(08:36):
and it can be discouraging, like, you know what the
raisors are capped at two percent this year, there's nothing
I can do. Um. But that's not necessarily true, right right, Uh.
And sometimes you can get a promotion because you've done enough,
you take on more responsibility. Maybe in the current role
you're in it's a two percent cap, but maybe you
can expand your responsibilities. And another thing I think a
lot of people need to know to make more oftentimes

(08:58):
the way people make the most money switching The way
people make more switching jobs moving to a new employer,
especially right now, it's a great time to to look elsewhere. Um.
And if you're you know, your current employers saying we
can't pay anymore, you know it's worth at least perusing
the job boards and seeing what you can find elsewhere,
and you know, utilizing your network. Do you think it's

(09:18):
important to like you have to stay somewhere two years
before you start looking again or a year? I mean,
does that matter? M That's a good question. I mean, honestly,
I think it comes down to what you're able to
accomplish during that time, right, Because if you're going to
constantly just hot from one to the next to the next, uh,
without having done much and you're you know, you're spending
all this time there, that's one thing. But if you

(09:39):
are able to say that like, well, you know, I
was able to actually accomplish this or I was brought
in for this specific project, I think that can you know,
that's certainly a good reason. Yeah. I think if it's
your fourth year four jobs, that might start to feel
like a problem, like an epidemic of of leaving a
job after not much time. But I think if it's
you know, if it's incredibly occasional to stay somewhere a

(10:00):
short amount of time, um, it can work to your benefit. Yeah.
And um, you guys recommend having like a professional look
at your resume, Like I mean, I think that can
can be helpful. I think there are a lot of
things you can do yourself. But again, it's one of
those things too where having an impeccable resume, like if
you building a resume is something that most of us don't.

(10:22):
You know. I guess in today's economy we're doing it
more frequently than we used to do. But like I
haven't messed with my resume in forever as someone who
literally worked at the same job for fifteen years and
now is an entrepreneur um. And so I personally would
have someone looking over. I would consider paying someone, but
because you know, that is you know, getting your foot
in the door, and that's the first thing people see
about you. But I think there's also a lot of

(10:44):
free help online too that you could get and and
try it, try it yourself, a lot of free help.
And I mean I think a lot of us have
a friend who we know that does that kind of thing. Yeah, yeah,
who either has some experience there, who works in that industry,
who you know is uh yeah, hr are. But I mean, honestly,
I would even I would feel comfortable spending a little
bit of money on like five right, and so they say,

(11:05):
I kind of look through my network and there's not
someone there that really jumps out. I wouldn't be opposed
to just taking a resume that needed some updating or
just one that I had updated and then running it
by somebody that does this for a living. Like this
is all they do is they basically try to make
resumes look as good as possible. They cut all the fluff,
and then you're left with something that's going to really
stand out when it does come time to apply for

(11:26):
a new job. Yeah, you know what, you know, what
I like better than five is a slave labor the subreddit. Um.
But yeah, they'll be like hiring managers that will occasionally
post on there, but that's a good slave labor is
a reddit for him where people offer certain services for
a low price. I heard the guy who codd the
memory span test for the website out there. But one
thing I wanted to say about frugal before we switch

(11:47):
topics is I think it's related to the amount of
time it takes. It seems like some of these frugal people,
you know, it's like a game to them, and it's
fun because you know, after a certain point, it's like
you're investing all this time into like the bonds, are
is it worth your time? You know? Um? And then
but then you know, certain things like your cell phone plan,
like you could shop around a little bit and maybe

(12:08):
you know, I got mine down from like eighty dollars
a month to like thirty five dollars a month by
m mint Mobile, which you know, there's a couple of
their ones like that. So back when I was cutting expenses,
I saw some recommendations for mint Mobile. While I was
happy with my carrier service, the bill was like eight
dollars a month just for me. Mint Mobile offered a
free trial, so I tested it out and it worked.

(12:29):
Now I only paid twenty five dollars a month for
ten gigs of data, which is more than I need.
It's prepaid, and the more months you pay in advance,
the cheaper it is. For ten gigs of data, three
months is thirty five dollars a month, six months is
twenty five dollars a month. In a year in advance
is twenty dollars a month. You don't have to change
your number, and it uses T mobiles network. In my experience,

(12:50):
the coverage isn't quite as good as Verizon, but it
does everything I need. I can personally recommend their service
from experience, but I figured there are other companies that
offer a similar service. After some brief re search, it
seems that Mitmobile is a bit unique compared to other
prepaid plans because they offer discounts if you pay multiple
months in advance. Most typical phone plans you get from
going to Verizon or a T and t are what's

(13:12):
known as postpaid plans because your built at the end
of each month. I wasn't surprised to find out their
sponsors of Matt and Jewels show, and since I personally
use them, I figured i'd plug it here. If you
want to find out more, visit mitmobile dot com slash Money.
Matt and I do a recurring segment on the show
called Frugal or Cheap. And there's a difference between making
a frugal move or doing something that's cheap and wasting

(13:32):
so much time trying to save a few bucks. It's
like driving across town to save you eight cents of
gallon on gas. Um, it's your time would be cheap.
Hopefully your time is worth more than that. Don't do it,
you know. And but yeah, cutting that recurring phone bill
is we would say an example of being frugal or
shopping your your insurance carrier because you might be able

(13:53):
to save hundreds of dollars a year. Uh, doing that
every couple of years. Those kind of things we would
say are are goal. But yes, there is a tendency
in the personal finance community to be cheap and to
I mean, I'll be honest, I don't clip upons like
I don't. I know some people are, like, man, I
cut my grocery bill in half by clipping coupons. I'm

(14:14):
not gonna do it. I'm probably just gonna take the
easy route and go to Aldi. I know the groceries
are cheaper there. So I mean, to each their own.
Everyone's got their own method. Um. But yeah, I think sometimes,
like I said earlier, sometimes that hardcore frugality is leans
in the cheap direction in my book, and sometimes it's
because people don't want to do the hard work of
trying to increase their increase their income. Yeah, And obviously

(14:36):
it comes down to individuals and their their situations too,
write because there might be somebody and and it is
worth their time to clip all the coupons or drive
across town and get the cheaper gas, because maybe they're
in a position where they're unable to make more money.
I don't know, maybe maybe they're in a union or
something like that, and like they're not gonna get a
raised for another two years or something like that, and
they can't take additional time. And so for those folks,

(14:58):
it's like, all right, well, any stionhal time, I have
to save money is money money in my pocket, and
so you know, that's another consideration. Although I guess in
that situation we might say, well, like maybe there's something
you could think of that's even bigger, like think of
the larger money making uh opportunity that that that you
could pursue kind of on the side, I think, I
think too, like the the younger I was, the like

(15:20):
my frugal bursut cheap scale was different, so there were
a lot of things I would have done then that
right now I would consider cheap. When frugal adds up,
I mean, you know it really does. You know, I'm
sure of wasting so much money that if I didn't
do that for over a long period of time, I
mean that would be a lot and then you know,
invested properly, that would be even more in it could
snowball right right, and so um yeah, when when I

(15:41):
was younger, I would do so many borderline cheap things,
and looking back, like that did help me establish myself
in my finances and begin to invest more and more
of my money. And um, if it wasn't for some
of those hyper hyper frugal moves, like you know, some
of those things wouldn't have been able to happen. Um,
And so yeah, I don't know. I guess say too

(16:02):
is like as you change as things, as your life changes,
that scale might change a little bit. For you with
three kids now, um and a family, Like, it's just
highly unlikely that I'm gonna do some of the things
the cheapest condoms you could find, and that must that's
how it worked out. Man, to learn that one the
hard way. I'll probably figure it out once I have eight. Also,

(16:23):
I like how you said too that you established like
you know, by being cheap, you kind of established yourself. Uh.
I just like how I just picture you just been like,
all right, I'm finally a cheap bastard. Like it's like
it's like a title that you're able to put in
front of your name. Basically you're like, all right, that's
how it happens. I have arrived. All right, let's take
a quick break to crunch the numbers. Be right back.

(16:43):
Welcome back to Prodigy. I did want to talk about
you mentioned that you had been budgeting for years and
years and years, and I was curious, like if you
guys used certain apps um I'm familiar with, like you
need a budget, but I haven't really checked into the
space in a while. Is there certain different apps you
think would be useful for people to know about? Yeah? Yeah,
so that's I was mentioning, Yeah, how I have budgets

(17:04):
going back to oh seven, and honestly, I mean I
use Excel, and so back then I started with just
a basic budget template that came with Excel, and from there,
every year, at the end of the year, I would
look back at what I used, what I didn't use,
and I started quickly modifying, adding categories, changing things up,
realizing that like, oh, how come there, I don't have
any way of tracking this expense or or or you know,

(17:26):
like okay, money that I've gotten the bank that I'm
saving towards specific goals, like I need categories for those
I need to you know, and today we have we
see that in checking accounts, right how You've got buckets
or savings buckets. But those are things I added over time,
and so I personally have never used any other specific
budgeting app. But whine Ad, like you said, you need
to budget is fantastic. We highly recommend it, and that's

(17:46):
partly because of what wine app does behaviorally to help
you with your money right. I've used Mint for a
long time, but Mints basically like the static resource where
you can see what you've spent. You can kind of
see in one place, like your net worth. And I
like Mint for the way I use it, but I
think a lot of people are better served with win nap,
even though ments free and winnap costs money, and we

(18:07):
think that winnap you you'd actually probably it's a frugal
move to sign up for winnap because in some ways
it's gonna help teach you and it's going to help
you with some of those behavioral things that have led
you to not being able to handle a budget. Well,
they're they're trying to basically get you to um increase
the time since you got paid to when you use
those dollars. To make those dollars especially get older in

(18:30):
your account, you're gonna be able to save more. They're
gonna help you UM in some different important behavioral ways
to get that budget in line and then to stick
to that budget. Everything in my nature tells me to
automate and simplify, but I really do see the value
and having a better understanding of where your money is going,
especially when applied to a longer time frame like a year.

(18:52):
But it can be tough to juggle that with the
fact that you might die tomorrow. Life is obviously precious
and not to be wasted. But so this peace of mind.
First off, I'm amazed that you're entering everything manually and excel. Like,
I'm like, God, is there like some Python scripts you
can write or something? So there actually are. I mean,
there's there's different programs. I know that there's some that
integrate with Google Docs that allow you to uh, you

(19:15):
know where it automatically imports. But here's let me tell
you why I like to manually enter. And I literally
do that. I manually enter in all of the different transactions,
and it's it's a way for me to review my expenses.
And so by manually entering it in I feel it,
Like I don't just feel it in the moments where
I'm when I'm making that purchase, because there's folks that say,
like you feel cash more like like when you're partying

(19:37):
with your actual you know, actual bills, you feel that
a little bit differently, and then when you swipe a card, uh,
And so for me, a way that I feel it
a little bit more is just by quickly entering it
in and I've gotta you know, I've got a system down,
and we don't I mean, we've got a big family,
but kids and stuff, but we're not I don't. I
guess we're just not spending a ton. Uh. It doesn't
take that much time for me, but I think it's
time well spent. I think some folks would say dudes

(19:59):
just being cheap, like he needs to outsource that. There's somebody,
there's programs out there that can do that, you can
link your accounts. But for me, it's something that I
find that brings me a lot of value because not
only am able to keep up with what I'm spending,
it helps me to kind of direct my my future
dollars by also just being realistic with the budget that
I'm setting for myself. To me, to me, that's similar

(20:21):
to looking at an actual bill that even if you
auto pay that bill, looking at it every single month
so you can see, like in particular, with like your utilities,
what's your usage bin right like? And I think, like
that's I hope, so you're saful, But like you know,
looking at the bill every single month is so important.

(20:43):
And I hate the budget building feature. I know some
people really like that. They're like, now I know it's
gonna be the same amount every single month. They'll reset
it next year and it will be a new amount,
but it'll be the same every single month. But I
actually like the pain associated with a bill having gone up,
especially in the summer months, and be like you see,
you see power shoot up for us, like with a garden,
we see water shoot up. People water our yard more,

(21:04):
and it was like, Okay, let's let's be a little
more judicious with our water usage. It's going to make
you change your behavior. And I think sometimes you know,
just putting on autopilot auto pay and not looking at
those bills. It's a very similar thing to how Matt's
manually entering in that information into his budget. He feels
it it has an impact on how he behaves with

(21:24):
his money. It's not just to make it the most
miserable process and possible. You know, it's almost like a diary.
It's like it's like getting to the end of the
day and just like writing out thoughts and just kind
of doing like a brain dump, you know, like it
helps you to process things, help you to realize that like, okay, what,
like what's on my mind? I mean I don't I
don't journal like I used to. I used to journal

(21:45):
a good bit back in the day. And it actually
keeps his journal in Nu King James English does that
a lock on it? The locks in the Ship of
a Heart always have offended me. But it's just a
way to just kind of like decompress and see where
we spent our dollars, make sure that we're spending in
ways that align with our values, because that's what we're
all about, right, We're all we're not about pure deprivation.

(22:06):
We're about making sure that we're spending our money in
the areas of life that brings us the most joy.
And that again the craft beer is a small example,
jointed on food this pint, But yeah, that's a good point.
And I was thinking, also that's related to you know,
when you're budgeting, you know, you don't always know about
unforeseen um sort of expenses that come up, you know,

(22:28):
like medical or health. So what do you guys recommend
for like a good rule of thumb for how much
money to have in an emergency fund. So a couple
of things one I think people chalk up too many
unforeseen expenses into an emergency fund sort of expense. I
think people need to plan for some of those quote
unquote unforeseen expenses, like let's say it's tires on a

(22:50):
car or repairs on your home. Those are the kind
of things getting your leg broken by a random bandit
from the emergency as an emergency. I just wanted to
say that upfront though, that sometimes, like we we we
should be planning more for some of those things that
we consider to be unforeseen stuff that that stuff's gonna happen. Yes,
but true emergencies are are real thing, and people should

(23:12):
definitely be planning for that or a big fan of
emergency funds um in particular, there is a minimum starting
point that we think is really important for everyone to achieve,
and that is achieving two thousand, four hundred and sixty
seven dollars worth of savings. That is a very specific number,
but it is a number that economists have found we'll
get the majority of people through most emergencies, and I

(23:34):
think that's true. I think that's that that resonates to
me with you know, the biggest emergencies I've had, Usually
they can be met with that kind of amount of money,
whether it's you know, um, whether it is like a
car repair, right, or whether it's a broken leg or
a hospital bill or something like that. Um. And you know,
I would say that building that up over time is
a priority. We think people should get to know at

(23:56):
least six months of emergency emergen C expenses six months
of your normal budgetary expenses in a savings account is
really important to have. But we think that initial amount
is a first good goal to hit. It's very specific,
but I think it's helpful. It sticks in your mind too,
You're like, that's exactly how much I need. That's what
I'm going for two four six seven. Yeah. And so

(24:17):
basically Jill is talking about what we call our money gears, right,
and so that that kind of basic emergency fund of
two thousand, four and sixty seven dollars, that's the very
first thing you should be doing with with your money,
before you start investing, before you start thinking about doing
anything else, or you even pay off credit card exactly
and then and that'll that'll carry you through gears two
and three, which are getting like a company match when
it comes to investing paying down high interest credit card

(24:39):
debts like Geared number three but then the fourth money
gear like which all said, that's the three to six
months worth of living expenses, um and just having a
chunk of money sitting there to get you through some
of the more major things like you know, say, for instance,
you get laid off and you can't find work for
a few months. That's the kind of money that's gonna
really need to come in handy when it comes to
just being able to pay them, you know, pay them

(24:59):
mor or maintain rent, continuing to buy your expensive groceries
that you like to purchase and cook there. But whatever
it is, uh, you know, realizing that okay, I know
I'm gonna be okay, and that gosh, yeah, we all
need more margin in our lives, right and so to
be able to have that, in the peace of mind
that that brings people, it keeps us from making stupid Uh,

(25:20):
it just keeps us from making stupid decisions. Right, All right,
Let's take a quick break to cancel subscriptions that we
don't use anymore. Be right back, Welcome back to Prodigy.
One of the service that I use but isn't actually
sponsoring the show is privacy dot Com. The cool thing
about them is you can create credit cards with custom limits.
So if I'm signing up for a gym or something,
I can create a card with a set monthly limit.

(25:42):
That way they can't overcharge me, and I can cancel
the card with a couple of clicks. It also works
with one time payments if you're ordering somewhere that seems
unreliable or anything like that. Also, I'll use this opportunity
to suggest that you always use a credit card whenever
you can, not even just because of the rewards. It's
because of the fraud protection. Okay, back to the show. God,
my friend, Uh, she just the other day, like she

(26:04):
just sleep in the middle of the night and a
car like ran off the road and hit her car.
And I guess since her car was you know, worth
less than the amount of money that was left on
the loan, the car's paid off, but she wents one
thousand dollars and she needs a new car. It's just like,
like the holy crap. I can't even what a terrible
I think that it's a it's a crappy situation to

(26:24):
be in for sure. Yeah, so that was my next
top I want to bring up, is you know, buying
a house. I mean to me, that was a big thing,
and I think I didn't really think about it in
terms of investment. Although I mean if I just I
look back five years or six years, and I'm like,
if I had bought a house when right when I
moved to Atlanta, I'd be sitting on maybe like a
hundred grand of equity from it. So in that case,
it was a good investment. It would have been a

(26:45):
good investment. But is buying a house really like as
good an investment as people think it is? No, it
is not, I mean it recently. Yeah, And that's the problem, right,
Like you look back to the last few months, especially
given the market where where things are, and it feels like,
oh man, if I could go back in time, yes
I I should have done that. But I mean we've

(27:06):
we've talked, we've talked before. How I mean, when it
comes to it, like when if you're looking at your
primary residence, it is not a good investment verse, you know,
as like compared to taking money and sticking it in
the market. Um, and just based I mean you're talking
about like the increase in value, Like you look at
the amount that stocks have gone up since like the sixties. Uh,

(27:27):
and on average Uh, the stock market has gone up
around ten percent. You look at home values and what
they have gone up in that same period of time,
and it's closer to four percent. And so and that's
just that's just one measure, right, Like we're not even
talking the value of stocks since the sixties have gone
up ten percent ten percent annually, Okay annually. Yes, it's
this same thing, same thing with homes, and so that

(27:49):
doesn't even take into account diversification, right, you know, like
with a home. Gosh, talk about putting all your eggs
in one basket, right, Like, depending where you live, a
major employer leaves that town or something, yes, and can
devastate devastate at home prices. Yeah, I think, and I
think renting one of the problems is that we've made
renting seem like it's throwing away money, and there is

(28:10):
homeownership is a great can be a great thing. Matt
and I own our own homes and we are glad
we do. Um. But you buy a home not as
an investment. You buy a home for a sense of permanence,
a sense of community, of personal reasons, for personal reasons.
And we also believe that if you buy a home,
you need to plan on owning it for a minimum

(28:30):
of seven years. And you know, in today's market, with
how expensive homes have gotten, unfortunately, interest rates are really low,
so affordability still isn't ridiculous. Um, but yeah, we think
you need to be willing to stay put for quite
a long time if you're going to make that purchase. Yeah.
I think my parents, like their retirement is basically they

(28:50):
just own a bunch of properties and um, over time
have accrued them and so like it just adds up.
But you know, I guess maybe if they had just
taken that money and put it in the market, they
could have done even better. Well. So there's a difference
between buying a home to live in and buying investment property.
Matt and I own investment properties, and so it's it's
it's just a completely different scenario. We love the idea

(29:13):
of people buying investment properties in particular of trying to
buy like multi family investment properties, live in one unit.
Always trying to get me to They're like, why don't
you buy a duplex? I'm like, already owned this house,
Like whatever. Yeah, But I mean, yeah, if if you're
it can be an incredible financial move, as you live
in there for maybe a year or two, then rent
out both sides and move on to another property. I mean,

(29:36):
those are the kind of things that do you know,
everybody I know that's done that has been able to
uh provide a whole lot of financial security, a whole
lot of monthly income of cash flow. So investment properties,
to me, are a very different thing because you assess
them very differently than you're assessing a primary home, the
primary home to live in. You're worried about the features

(29:57):
that it has in the school district and does have
a pool or not. I just didn't want to have
a landlord anymore, you know. Um but uh I recently,
just like my mortgage went up like four in dollars
a month, and I was like, what the free? What
the hell? Like if they were like, oh, it's you,
it's like scrow account, like your escrow so and I
was like, well, why would it go up that much?

(30:18):
So then I guess I realized that like with Georgia,
there's a homestead tax exemption thing. So the previous homeowner
you know, had already signed up, but then it lapses,
so I had to sign up, and then it last
the rest of my life. But so I did that.
Now I'm trying to get them to like update my
mortgage or whatever. So if you live in Georgia, don't
forget to apply for your homestead and don't forget to

(30:40):
appeal your property taxes when you get them later this
year if they are if the county is overvaluing your home, Yeah,
how do you do that? What is there anything else
I should know about? I mean I didn't know about
this one, but yeah you should have. Yeah, you'll get
an estimate of what you know, essentially a tax bill,
and they're saying this is this is what your your
home is worked now, according into the county. And if

(31:01):
you believe that that is inaccurate, you have the ability
to go in front of a board of your peers
to appeal that tax rate. Um and if if they
you know, budget at all on the amount of tax
it's do, they will also lock that tax right in
for three years, right? Three years? Yeah? Yeah, my house
is not even that good? Come on, like yeah for real?

(31:23):
I mean yeah, essentially, like you're sitting, it's you're you're
presenting your case, right, and so you can show it
with pictures. You can essentially show them all the unflattering angles,
all the things that are broken to be Like, look, man,
I know then zillo and find comps of similar homes
that's sold in your neighborhood. Yeah, but it's like we
know that the all those comps, like those houses, uh
like that they're comparing it to you, like they're ones

(31:43):
that have recently sold that are you know, selling for
top dollar. Uh, they've got everything fixed. I don't want
to look at comps right now because but you know,
because everything's but yeah, no, I paid one seven and
they just like valued it at like to forty or something,
and I'm just like, after like a year and a
half or two years, like that's a lot. I mean,
that's that's a lot in the recent months for sure.
So I definitely wanted to dispute that. After I recorded

(32:05):
this episode with Joel Matt, I got my property tax
assessment notice and the value had gone up to three
hundred and five thousand dollars, up from one thousand two
years ago. Something was definitely wrong. So I reviewed it
with a friend and realized that they had marked my
square footage wrong by a thousand feet. So I had
to appeal, and I'm still dealing with that. An appraisers

(32:25):
to come out next week. What a mess. Also, I
know a lot of people who have been wanting to
buy during the pandemic but holding off because of the
low inventory and high prices. So I'm having a realtor
on for an episode in the next couple of weeks
to answer questions related to that. So stay tuned if
you do go the route of instead of you know,
investing in a home or diversifying and doing both, Like

(32:47):
what do you use to invest your money? Like? And
a robin Hood's a really big thing right now because
it sort of made it easier for people to invest
versus some of the more well known companies. Yeah, well
there's a hierarchy, right, Like you want to make sure
that you're starting to invest in the right areas first,
because if you start with robin Hood, which is just
a taxable brokerage account, Uh, that's that's not what we'd recommend. Yeah,

(33:08):
And I think to robin Hood, essentially it's almost coaxes
people into investing in individual stocks. There's nothing wrong with
the platform itself, but people use it improperly and I
think I think the platform does have an incentive to
get people to do that too. So yeah, we we
don't mind some of the micro investing apps. We like
in one in particular because within one you you can

(33:31):
open up an IRA and invest inside of an IRA,
and we think that's a much better way to start
investing because there's tax prefer treatment inside of an IRA.
For most people, though, there work account is going to
be you know, whether it's a four ohn K or
a four oh three B with a company match, that's
gonna be where they're gonna want to start. And then
a lot of people have this. They know that they

(33:52):
have this account, they start to put money in there,
but oftentimes they're not investing inside of that account. And
so yeah, we would say go through the perspect to
that your company sends you, or that the that your
company you work for is hired um sends you about
the funds that they use, and we would say look
for the funds with the lowest expense ratio. Typically those
are gonna be target date retirement funds, or they're gonna

(34:13):
be index funds, such as like a total stock market
index fund, and we like both of those choices. Either
of those choices is great, but those fees will eat
you alive over time, and a lack of diversification can
really hurt you. And so if you go with either
like a total stock market index fund or a target
date retirement fund, you're gonna be one eliminating those fees
to a large extent, and too, you're gonna be well diversified.

(34:34):
And we think that's really important. And inside of a
workplace retirement account, which is a great place because it's
also gonna save your money on taxes and especially to
if your employer offers a match right, because if they're
matching or a hundred percent of your contributions, like you
are not going to get a return on your money
like that anywhere else. I mean, like guaranteed money like that,
Like that's should be Yeah, I mean it's it's it's

(34:56):
it's great. Uh. And so I mean that's another reason
why you want to make sure you hit that work
sponsored retirement plan first, right your four one K, But
then beyond that, then you can start to look at
other tax avenge accounts as well, like a traditional IRA
or a roth IRA. Uh. And the benefit here is
that you know those those dollars are either taxed on
the front end, and so for instance, with a wrath.

(35:18):
The contributions you make to a roth already taxed, but
then as you invest that money and as it grows,
it grows tax free. And when it comes time to
withdraw that money, it's tax free. UH. And then the
opposite with a traditional IRA, so it's money that isn't
taxed yet, so there's no income tax. But then as
that money grows within your account, then on the back
end you don't have to pay taxes on those gains
at that point. But both of those accounts, the work

(35:39):
sponsored account uh and then individual retirement accounts UH come
before taxable brokerage accounts. And again that's yeah, that's what
Robin hood and those are the top two. Talk to
account priorities for sure when you're starting to invest cool
and then, um, how much money do you guys make
a year? I'm just kidding. How's gonna ask piece of

(36:00):
rise how much Matt makes? Yeah, So, UM, I guess
I have like just two more things to go over.
One is um, I guess you know Crypto. I'm sure
you guys talk about this a lot, you know. Uh. God,
I bought into bitcoin when it was like ten thousand,
and then when it got up to like fifteen. I
was like, I actually need the money now, and I don't, like,

(36:21):
I don't think it's going up anymore. Now, what is
it now? It's like fifty or something like to invest
in or just to think of it potentially as a
useful you know, like currency. Yeah, so, I mean it's
it's it's difficult, so right, Bitcoin cryptocurrencies are very new

(36:42):
relative to just other ways that you can invest your money. Uh,
there's a lot of thought right how cryptocurrencies Bitcoin in particular,
how it could be a store of value. It's something
it's an asset that you put your money in that's
not going to depreciate over time, uh not unlike real gold,
Like that's why people put their money in gold. And
there's also the possibility of cryptocurrencies being a literal currency,

(37:03):
just like a medium for exchange, and we're not really
seeing that either. I mean, it feels like it's getting
more because I mean that's true. Yeah, Like for instance, Tesla.
You know, it's like you can buy a Tesla now
with your bitcoin, But why would you use your your
bitcoin to purchase a vehicle when you can just leave
it invested and continue to see it go up and
so it's incredibly vaulatile right now. It doesn't make sense

(37:24):
right now for it to be an actual currency. Um
And so it's something that I mean, the technology behind
it is really interesting, and I mean I do think
that to avoid you know, fees and stuff like that,
like maybe they are overseas and they're doing some freelance
work for you and you keep it off the books,
that type of thing. Yeah, I mean, there there are

(37:44):
a lot of ways I think to pay pay people
or send money cheaply these days. Um, So, I don't know.
I think basically, when it comes down to it, it
has a lot of there's a lot of potential with
blockchain technology and potentially some crypto currency in particular, but
which one gonna be the winner and and which one
is going to Like, you know, we saw recently the
surge in the price of doage coin, which was created

(38:08):
as acause I've been saying dog Okay, I don't know,
I don't know if it's but but that was kind
of thing that that that really freaks people out in
the space there, like is this an actual, you know,
meaningful place where I should be investing? Is this a
new asset class that makes sense? For my money or not.
And I think, you know, that recent rise, all the

(38:29):
stuff happening there, it makes me think that maybe not
yet it's concerning right, but bitcoin, I mean, what was
the start out as like a point a nickel or
is it like point zero five percent of a toller
that bitcoin started out as. Yeah, I mean, it's it's
just really it's just really really hard to know. And
I think the biggest thing most people need to know
is one you should be investing, you know, most of

(38:50):
your money, not on moonshots, but into a well diversified
tax advantage retirement accounts. We think that any investing you
do in something like cryptocurrency, which you know, Matt owns
some bitcoin. I don't own any crypto as of yet,
but we would say that should be held to five
percent or less of your portfolio. And I think the
problem is there are a lot of people investing money

(39:13):
that they can't lose into cryptocurrency and they're not invested
um in almost any other meaningful way in the stock
market or in you know, real estate, and we would
say those are two asset classes that are much easier
to understand with a proven track record, and so it's
not that you can't invest some it's just that it
should be like much further down on the priority list. Yeah,

(39:36):
I always had this thought experiment. I was like, I
wonder if I was like restarted my life, but I
kept all my memories, like what's the most amount of
money I could accumulate like with the fourth knowledge that
I had. But it sucks because it's of course just
by all of bitcoin right in the very beginning, by
a bunch of bitcoin, you know, and it's like what
like fifty thousand or a hundred thousand times growth since then.

(39:58):
But yeah, that's I mean, that's the problemt too. I mean,
like I'm thinking through like you know, like as we
say it, do you coin or doggy coorn coin. But
I mean it's like it's it started as a joke,
and so like it's hard to want to invest in
something that was started as a joke. It's something that
currently is like Elon Musk's favorite thing to continue. It's

(40:20):
like this ongoing running joke and it became worth more
than like actual companies who have been around for decades
like Forward and and you know Carbon and yeah, it's
seeing that you're like there's just that that that bears
no basis in reality, and that um just makes me
want to run away from the space. Although I think
there's a lot of potential, a lot of possibility, but
there's just like way too much talking. You gotta just

(40:41):
have the right motives behind it, right, and so like,
like the other thing that makes me think of two
is like game Stop. Like there's a group of people
who decided to invest into something almost as a way
to give like a giant middle finger to Wall Street. Right,
it was it was kind of like a collective, you know,
they collectively threw their weight behind a couple of companies
like you know the A M C as well, Yes,
I mean smart right, they saw a big opportunity to

(41:03):
short it. Yeah yeah, yeah, and so and what like
there are opportunities there, and I think it will continue
to be debated as how ethical it is. Yeah, what
told hedge funds do it? Um? I mean, don't other
companies do that same thing? Like market manipulation is illegal,
but I guess there are just different definitions when it
comes to a group of non institutional investors. But either way, though,

(41:26):
to invest your money in a way to essentially kind
of like get back at the larger corporations. You know,
if you want to do it for fun and you
don't mind losing out completely, sure, you can do what
you want with your money, right, Like, we all have
the freedoms and the options to do that. But if
you're doing this because you're counting on this for your retirement,
that is not a good way that we would recommend

(41:47):
folks saying that. That's that's why we're saying that, Like,
you need to be prepared to potentially lose all of
that money because there's a change you might And again
that's why you keep that too at most of your
of your investment port elio because if you lose five percent,
that's one thing. If you lose that's another. Yeah, put
my retirement fund into buying toilet paper at the beginning

(42:08):
of the pandemic to resale. You're actually going down right Now.
What type of stuff do you talk about on your
show you know that people might be interested in or
what what would someone learn from listening to your show?
Oh man, we hope if they would if they tune in,
that they learned something every episode. That's truly our goal
is to to entertain into inform and so if you

(42:30):
tune into how the money. Hopefully you'll learn more than
just some of the most basic first personal finance information.
We try to go a level deeper, and we try
to go to UM. We try to discuss the behavioral
element of personal finance quite frequently because we truly believe that,
you know, there's a few things that you could learn
and if you abided by those, you'd be good to

(42:53):
go like but so much of the way we react
when it comes to our finances is emotional behavioral, and
so we we try to speak to that frequently as well.
H we try to interview people who have different perspectives
than we do. We we try to cover the headlines
to how do you interpret the stuff that is coming
out in the financial news, which feels more and more

(43:15):
sensational every day. Were trying to provide like a rational
framework for thinking about, you know, what's happened that week
in the world of world of finance. So, yeah, we
try to run the gamut with with all that we do,
including answering, listening questions to UM. But but hopefully, yeah,
if you'll get a better take on how to handle
your debt, where you know how to be saving more
effectively how to be cutting back on your expenses, how

(43:37):
to be investing well for the future. We try to
kind of run through all those things. Thank you so
much for listening to Prodigy. Definitely check out Joel and
that show How the Money on your favorite podcast app.
You can find even more great info at how the
Money dot com. If you're looking to save money, I
highly recommend the frugal subreddit at reddit dot com slash

(43:57):
r slash frugal. Another good sub about it is Poverty Finance.
I just like read it in general, and there's a
ton of great communities for whatever your interest is. I'm
actually a moderator in the podcasting about it. And speaking
of podcasting, I'm working on an episode about getting your
own podcast started, so stay tuned for that and a
bunch more really interesting stuff. Prodigy was creating and produced
by me Liberlante. The executive producer is Tyler Klang. For

(44:21):
more podcasts in My Heart Radio, visit the I Heart
Radio app or wherever you get your podcasts.