May 25, 2025 • 32 mins
Joel talks about his dishwasher arbitrage play. Also, does the Moody's credit downgrade matter?
Ask HTM: Cheryl inherited some money and wants to know the wisest way to proceed with extra money in hand.
Some high school juniors are getting $70k job offers. It reinforces the reality that there's a dearth skilled labor right now.
Ask HTM: Buddy wants to know if it's ok to buy a floor model mattress.
Ask HTM: Cheryl inherited some money and wants to know the wisest way to proceed with extra money in hand.
Some high school juniors are getting $70k job offers. It reinforces the reality that there's a dearth skilled labor right now.
Ask HTM: Buddy wants to know if it's ok to buy a floor model mattress.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
KF I am six forty. You're listening to how to
Money on demand on the iHeartRadio app.
Speaker 2 (00:07):
Do you want to live well without drowning in debt?
Speaker 3 (00:11):
Joel and Matt have you covered?
Speaker 2 (00:13):
This is how to Money with Joel Larsgard and Matt Altmes.
Speaker 3 (00:29):
KF I am six forty live everywhere on the iHeartRadio app.
This is how to Money. I am Matt Altmis and
I'm Joelarsgard. Don't forget to sign up for the how
to Money newsletter. You can find that up at how
tomoney dot com slash newsletter. Joel, do you want to
give a quick little update on your dishwasher? The dishwasher
saga that we shared on Monday with folks. So, I'm
(00:50):
sure folks are wondering. They've been on the edge of
their seat.
Speaker 4 (00:52):
I know.
Speaker 3 (00:53):
Well, yeah, so I ended up.
Speaker 1 (00:55):
I bought four dishwashers from Costco, as I said, and
my wife was.
Speaker 3 (00:58):
Where they all shrink wrapped? Again? Were they connected with
the big handle? Amazing? How could you carry that? Well?
Speaker 1 (01:05):
No, separately shrink wrapped, but man, so I had mine
installed and I sold my old dishwasher, and then my
dad wanted one of the dishwashers, and so caught free
installation from Costco for for mine and for his, and
then I sold.
Speaker 3 (01:21):
Serious serious de ja vous, but but keep going.
Speaker 1 (01:24):
Keepka And then so I sold the other two on
Facebook pretty quickly for five hundred bucks each.
Speaker 3 (01:29):
So my dad, I.
Speaker 1 (01:31):
Gave him the essentially the price that I paid per dishwasher, right,
but but for the ones I should get, that can discount,
that's right, right, But.
Speaker 3 (01:39):
I'm not gonna like charge him extra.
Speaker 1 (01:40):
But people on Facebook paid the full freight that I
was asking five hundred bucks. I was like, well it
started off higher than that because it I was like,
maybe I'll get more, but had takers at five hundred
and so ultimately I ended up not getting paid, which
I thought I would. I think I told you I
thought I would, and I did. I ended up getting
paid to get a new dishwasher put in at my house,
and like I told you, them was getting long in
(02:02):
the tooth.
Speaker 3 (02:02):
I was getting frustrated with it. So yeah, yeah, I'm happy.
So Okay, so the big question does it you've had
it now for for a few days, and you so
you said you wanted to get a new dishwasher because
your old one you are the man who handles the dishes,
the dish like you you are, Yeah, you're in charge
of clean up. Does it clean better? Because this is
a Bosh dishwasher, and we know that with it being
a German company. Well, I guess just because this German
(02:23):
doesn't mean it's automatically better. But Bosh specifically are incredibly
highly rated. They last, does it? Does it clean?
Speaker 1 (02:29):
Yes, It's been cleaning better, and so my mornings when
I'm putting the dishes away are far less frustrating.
Speaker 3 (02:35):
Are they dryer as well? They are dryer as well?
Speaker 4 (02:37):
Yeah?
Speaker 3 (02:37):
Yeah, see that was that was my big hold up
because of the plastics. Yeah, I was, yeah, all right.
Speaker 1 (02:42):
There's certain spots in like those kids food containers that
just didn't always to get all the way dry. I
don't think in any like if it could have, if
it could get rid of all the water in there,
that'd be impressive.
Speaker 3 (02:52):
But evidently some of them can, including plastics. Okay, So
one of our our biggest hang ups has been we
tried some like some green the detergent pods because we're like, yeah,
you know, maybe we should be a little more health
conscience health conscious, But they didn't do a great job
cleaning the freaking dishes, and I do. I am incredibly
(03:12):
hesitant to throw something away. I don't like to waste
stuff is the leftover's principle, right like you got it,
like put it to use. I was so close to
toss on those things because the dishes were not getting clean.
I was so happy to see to put the last
pod in the thing. And then we kind of swung
in the other direction and got like these incredibly highly rated,
very not natural, very not green, little gel podt some
(03:35):
things or whatever. And I hate those two not because
so they do a good job cleaning the best.
Speaker 4 (03:40):
Well.
Speaker 3 (03:41):
The fragrance specifically on these is terrible, like all the
cups and plates, everything smells like this flowers or something. Yeah,
I hate it. Again. I'm like this close to toss on
all those, but I can't bring myself to waste these
perfectly fine, they get the job done. I just proved
right there. Oh I got a great embarratt And I
can't give them to somebody you think might appreciate Maybe
we should. Yeah, So I'm looking forward to being done
(04:03):
with us and just moving back to the what is it?
The power ball? You know it's got the Little Red Classic.
I feel like those are just they're not overly fancy,
they're not super expensive, they don't seem like the absolute
worst pods for you. But I'm on sale and it's
what we have been using. I don't know why we
switched it up. Is that what y'all use? No, we
use the liquid because he's like squirted in there. Is
it multipole like that? You get this from Costco? Yeah,
(04:25):
so it's the Kirkland sig. It's not Kirklands. Okay, what
is it with the brain is in a green bottle?
But okay, they want to say it's like seven bucks
for giant tub of dishrusher liquid. Interesting, Yeah, not bad.
Let's go for it. But let's keep moving though. This
is like quite a departure from what we're talking about
now that you want to talk about. I just want
to say a macro level what's going on. It's thrilling
(04:46):
to me, to the frugal guy and me to get
paid to put a new dish rusher in when I
already bari that I am for you for me, that's
just that's like a that's a big money win. It's good.
Speaker 1 (04:55):
But yes, let's talk about a bunch of other stories,
Matt personal finance stories that going to impact people's people's
finances in America's credit worthiness, that's something that we should
probably talk about in the beginning. It's in greater question
right now after Moody's one of the credit rating agencies
joined the other two credit rating agencies and downgraded the
(05:17):
America's credit standing. So it's it's like essentially the like
Equifax telling you, yeah, you had a seven forty, now
you're down to like seven twenty five. We just don't
think here as good at handling credit as we thought four.
But this is on a national scale, so this isn't surprising,
but it does shine a light on our unwillingness to
(05:37):
face economic facts head on as a country. I think
it's some people might be overestimating the impact though it's
I think it is also not a red warning light
that should be freaking us all out. But it does
reveal the fact that our country could be on better
financial footing if we were better managing gard title entitlement
programs and our overall debt load, that would have a
(05:57):
positive impact. That's actually part of the reason I think
that this big, beautiful bill as it's being called is
becoming a political football right now, and the extra trillions
in debt that were likely to be racking up in
the coming decades if this bill goes through, which could
impact the economy, and the desirability of owning US treasuries,
which impacts all of us. Right, but it's also relative, right, met,
(06:20):
you and I have had these conversations off the mic.
America's financial strength is still unparalleled. When they're talking about
pure nations.
Speaker 3 (06:27):
We're number one. Yeah.
Speaker 1 (06:28):
Still, even if we're all like making dumb moves like
shooting ourselves in the foot to a certain extent, America
is still in a top notch position. So yeah, I think,
similar to prior downgrades from the other credit rating agencies,
I think it's likely to have a minimal impact, but
it doesn't mean it's still not tough to watch.
Speaker 3 (06:45):
I totally agree, So yeah, I wanted to highlight that
because there's been a lot of talk about this being political.
It's not political. So the first downgrade as we came
down from the triple A rating, it happened back in
twenty eleven. And guess who was president back then, a
very popular Democrat who was resided in the White House
Barack Obama for some reason twenty I think, well, maybe
it was twenty eleven, maybe twenty thirteen. But then I
(07:06):
know that the second one of the other ones, maybe
it was Fitch at that point downgraded. That happened in
twenty twenty three, and I remember we covered that then
and again, how it's likely to be overblown, But it's
definitely not political, because you've got two Democratic presidents who
are in office at that point in time. It is
not political. But I also don't think it's as big
of a deal as many folks are making it out
(07:27):
to be, because in particular, I find myself thinking more
and more like in this line of thought, thinking about
what are the alternatives when it comes to borrowing from countries,
because and so I looked it up, and there are
maybe about a dozen countries out there who still have
retained the perfect triple A status. But here's the thing.
They're tiny. They are so stink and small. So you
(07:49):
average the GDP of those around twelve countries who still
retain that perfect rating, and we are something like twenty
seven times larger than the average those of all those combined,
but just on average, like it's anywhere from like Germany
is the biggest, and I think there's something like four
trillion dollars or something like that compared to the US
(08:10):
is twenty seven. But a lot of the other countries
are closer to not four trillion, but like three two.
And most of them are in the hundreds of billions
of dollars that retained that perfect rating. So that's something
to keep in mind on a macro level, as folks
are freaking out. I don't think this is something that
folks should be overly concerned about.
Speaker 1 (08:27):
Yeah, and you say that it's not political, and I
think you're right. It's not some sort of like denigration
of a particular party or their policies. But I do
think this is in some ways the extension of the
tax cuts and Job Act, or this new big, beautiful
bill that we're starting to learn more about, which I'm
sure we'll talk more about next week. The tax cuts,
(08:47):
extension of the tax cuts, the elimination of taxes on
social Security tips, overtime pay. Those policies aren't raining spending
it in any meaningful way, and so it's not obviously
just a reflection of the current administration. It's a reflection
of what's been happening with under both Democratic, Democrat and
Republican regimes. It's a reaction to the fiscal reality of
(09:08):
what's likely to happen. But I think we're also seeing
a wait a second, like this bill. While yeah, it'll
provide tax savings for many Americans, it'll grow the deficit,
which is not great for the long term financial health
of our country.
Speaker 3 (09:20):
Yeah, and of course on an individual level, borrowing costs
are going to go up because these I mean, basically,
the US has been told, hey, you know, before your
addition on these these treasuries at four percent, like, we're
going to need to see a little more from you
because we're not totally sure if you're going to be
able to pay these off. And so we saw like
thirty year treasuries go from like they win over five
percent for the first time in quite a while. But
(09:42):
the way this is going to impact us as individuals,
specifically for borrowers. Right, so, for folks who are looking
to buy a home, the thirty year fixed mortgage rate
is closely aligned with a ten year treasury note. This
is how it's going to more directly impact folks on
a personal level. But even still I wouldn't be freaking out.
Speaker 1 (10:01):
Yeah, I couldn't agree more. All right, we've got more
to get to on today's show.
Speaker 2 (10:05):
You're listening to how to Money with Joel Larsgard on
demand from KFI AM six forty.
Speaker 3 (10:13):
By the way, you can always find more money saving
information over at howtomoney dot com.
Speaker 1 (10:17):
And if you have a money question we'd love to
hear from you, just go to how toomoney dot com
slash ask, or instead of doing that, just record your
question on the voice memo app of your phone, send
it to us at how to moneypod at gmail dot com.
Hopefully we can take it next week on the show, Matt.
This question comes from a listener who inherited some money.
She's trying to figure out what's the best way to
(10:38):
handle it.
Speaker 5 (10:41):
Hey, Matt and Joel, it's Cheryl from Nebraska. I am
going to get about one hundred and fifty thousand dollars
in inheritance. I owe about one hundred and ten on
my house. I wondered if it would be smarter to
pay off the house or just pay half on the
(11:01):
principle or I don't know what.
Speaker 3 (11:05):
Give me your thoughts.
Speaker 5 (11:07):
I listened to your show daily.
Speaker 3 (11:09):
Love It, Thanks Joel. Cheryl is listening to us daily.
I'm assuming she's catching up on the episodes. But what
if we switched it up and started doing a daily podcast,
daily financial.
Speaker 1 (11:19):
News, you wouldn't have to twist my arm. I don't
think I like talking to you. I like talking about money,
So doing that more, I wouldn't.
Speaker 3 (11:27):
Have to cut it down to like a fifteen minute show.
Perhaps just because the.
Speaker 1 (11:32):
One part of the thing that we can't control is
how much listeners like or dislike us, and if we
if we talk too much into their years, they might
fall into the ladder camp. That is true, Cheryl.
Speaker 3 (11:42):
I want to kick things off and say that I'm
sorry to hear that you've lost someone close to you,
someone who's close enough that they would leave you in inheritance.
So condolences first off. But what it is that you
choose to do with this lump sum of money, man,
We are not going to be able to give a clear,
caad answer because it is so dependent on your personal
money goals, that's so dependent on some of the specifics
(12:05):
that we actually aren't privy to. So with that in mind,
we'll try to provide a general framework. So hopefully you
can make a smart decision with this cash and fusion,
which I'm sure is.
Speaker 1 (12:15):
What this feels like for sure, most people like the
biggest cash in fusion most people get, Matt is their
their tax refund right that they got recently, and that
feels like a big thing that they can do a
lot with. But this is obviously much bigger. You can
address bigger financial concerns that you have, and so let's
address maybe the mortgage first.
Speaker 3 (12:35):
For Cheryl. Here is Cheryl if you swish, he's got
her eyes set on paying off that house. I get that.
Speaker 1 (12:39):
That's especially when you're talking about big some money. You're like,
what do I owe the most on? And that is
a mortgage typically for most people, and so it makes
sense like, well, big lump sum, big mortgage. Let's try
to eradicate as much of that as possible. And if
you just bought the house recently, Cheryl, the answer might
be yes. Right, if you've got like a seven percent
mortgage or something like that, and you're you're a debt
(13:00):
averse person, then paying off the mortgage it can be
a fine way. I would say to use those inheritance
dollars on top of paying it off, though you'd still
have forty thousand dollars left to boost your savings and
to invest, so it's not like that's the only thing
you could accomplish either, which I think is great and
lens maybe even more credence to the goal of paying
(13:22):
off your mortgage with the majority of this money. But
if you bought your house a whole bunch of years ago,
and let's say you're in the last decade of paying
it off, and you've got a really sweet locked in
low interest rate, right, you're gonna get a whole lot
less bang for your buck. So if you've got that
three percent or so interestrate, you've already paid a lot
(13:42):
of interest over the first decades of ownership, if you've
had that mortgage for a long time. While paying it
off in one fell swoop can feel good, there are
meaningfully better ways, I think to use that one hundred
and fifty thousand dollars, because really that tail end of
the mortgage matt when you don't know as much, you're
just talking about very little in interest to the banks
every single month because of the way a mortgage loan
(14:05):
is amortized. So that's when people are most likely to
start paying off their mortgage in droves to start throwing
more money at it. But it's also the time where
it matters the least.
Speaker 3 (14:16):
That is true. One thing I want to mention too, like,
and you mentioned one hundred and fifty thousand dollars, So
does Cheryl make sure Cheryl that you are accounting for
taxes on this inheritance, because yes, there is no federal
inheritance tax, but Cheryl lives in Nebraska, and Nebraska is
one of the few states that does actually have an
inheritance tax, and so we may not be talking about
(14:39):
the full one fifty So I'm assuming, Cheryl, though, that
you are keeping that in mind. But Joel, like, we're
talking about the alternatives and what we can do with
this money. We've mentioned this before, but when you can
get that higher guaranteed return in a high yield savings account,
why would you consider accelerating your debt payoff. It's hard
to give up a guaranteed return on your investment by
hanging on to a lower mortgage as opposed to paying
(15:02):
it off early, because most of the time there's risk
involved when you were trying to invest money versus paying
off that debt, and you know, you might want to
invest some of those dollars too, but when there is
that risk free route to earn more, it's really hard
to turn down. And that's what a high ueld Taming's
account is for people with a mortgage in the low
to mid threes. It's guaranteed plus. And this is another note.
(15:24):
I think a lot of folks, maybe more recently folks
have sort of felt the advantages of having more cash
on hand. But generally speaking, liquidity is incredibly underrated in
personal finance. Everyone's looking for different ways to optimize as
opposed to finding ways to be able to weather the storm.
And when there are fewer and fewer storms, maybe you
start thinking, ah, maybe all the storms they don't exist anymore.
(15:46):
It's like, no, you just just wait, there'll be something
that comes along. And I think that the.
Speaker 1 (15:50):
Cash is trash mantra caught on for a whole bunch
of years. Yeah, well, I'm just gonna invest them and
no matter what. And so, you know, paying off low
interestate didn't make sense. Putting money in sames didn't make
sense because hey, what's that cash really doing for me? Well,
cash is finally doing something for you. Now it's certainly
not trash. And you're right the liquidity piece, the liquidity
(16:11):
that having cash on hand provides.
Speaker 3 (16:13):
There's options, man, there's worth there. There's value as opposed
to paying off the mortgage early. Like, once you get
rid of that mortgage, especially if it's a lower rate mortgage,
there's no going back. Yeah, possibly ever, but maybe potentially
in your lifetime being able to secure a mortgage of
that less whereas the savings rates go down, you can
always sort of change the you know, your plan of
(16:34):
attack at that point.
Speaker 2 (16:36):
You're listening to How To Money with Joel Larsgard on
demand from KFI AM six forty.
Speaker 1 (16:42):
If you're on Facebook, by the way, you want to
join a group of like minded folks who have money questions,
who have money insights, please go join the how to
Money Facebook group.
Speaker 3 (16:51):
Jo Let's talk about the youths for a minute here.
What are the kids up to? You mat not totally sure.
I'm not on social media as much these days, but
I did see that some high school juniors are getting
seventy thousand dollars job offers, which is more than the
average pay for Americans across the country.
Speaker 1 (17:07):
You know what I would say to that skibity rizzler
or that someone. I'm assuming kids.
Speaker 3 (17:11):
Would say to that. I think that's what you would
have to say.
Speaker 1 (17:14):
Honestly, I would just assume I heard that like six
months ago from my honor, so I'm assuming it's not
gonna anymore.
Speaker 3 (17:19):
This is incredibly impressive for teenagers who are just starting
out with no college degrees, and so you might be thinking, gosh,
these are some smart kids. You know, they've gotten straight a's,
maybe they've gotten insane score on their SATs, whatever other
tests these kids are taking these days. Nope, that is
not the case. Companies are hiring these kids who have
(17:39):
shop experience something like welding, for instance, and they are
being courted almost like star athletes because of the extreme
lack of skilled labor in the country. We've talked about
this before, including with different experts here on the show. Yeah,
but blue collar work apprenticeships are thriving right now, and man,
you combine that with the ability to start making money early,
(18:01):
you're able to avoid college debt. It's certainly not for everyone,
but I really love seeing this trend. It's hard for
me to not project and picture myself in a situation
like this where I wasn't totally sure what I wanted
to do when I was sixteen or seventeen. And I
say that because that's how old you are. When you're
a junior, that's when you start making some of these
decisions as to what you might be doing for the
(18:22):
next five years of your life. We're talking to a
friend of ours recently. They've got a rising senior. They're
going to be spending the summer going to different colleges.
And that's great for a lot of folks. Who are
I mean kids who are I was not mature at
that age, that's all I'm going to say. That's all
I'm saying. And I lucked out. I was fortunate enough
to not have to take on student loans and shows
a degree that blighted me in great careers and I
(18:44):
found my way, Joel. But for a lot of students
out there, I think this can be such a fantastic
way to make some money for a couple of years,
to gain some maturity, to figure out what it is
that you want to do with your life. Yeah, before
you especially before you take on some inordinate student loan debt.
Speaker 1 (18:58):
Yeah, I mean, there's a school not too far from
where we live and one of our friends, Matt oversaw
this program of kids learning to become airplane mechanics and
so amazing.
Speaker 3 (19:08):
They are graduating.
Speaker 1 (19:10):
With the best skill set, the better skill set than
most of their peers with immediate professions. And he would
he told me this with a little smack of I
don't know, sadness on his face. He's like, they're gonna
get paid more than I am right when they graduate
high school, because he's a teacher, and like, I feel
hear the pain in your voice when you say that,
but also the pride that those kids are able to
(19:32):
instantly earn, coming from a tough background in lots of situations,
instantly earn more than he was after all.
Speaker 3 (19:38):
The education he'd received amazing.
Speaker 1 (19:39):
And it's not that I mean, when you look at
the data, still on average people earn more with a
college degree over the lifetime of their earning, some a
million dollars more over time. But it's also with the
price of college and with the dearth of blue collar workers.
If you're if you're smart in the path that you take,
you can do better, I think in many instances than
(20:01):
your college kind of parts, especially the people who go
to college for a couple of years, then drop out.
They've got college debt, they don't have the degree to
show for it. That's the worst case scenario.
Speaker 3 (20:09):
Yeah, especially when it hasn't cost you any money to
gain these skills, Like why not buy yourself a couple
of years if you want to change your mind, that's
something you can do. You can then apply for college
at that point in time when you've got maybe a
clear idea of what it is you want to pursue,
and drop tens of thousands of dollars on in higher
and how much you spend on that college education is crucial,
especially in today's job market and environment.
Speaker 1 (20:31):
If you're talking about taking on six figures in student
loan debt, it's tough to overcome. But if you're talking
about a free or incredibly cheap education, then that's also
a case of like, well, yeah, I don't know, why
not go for it? But let's hope those youngsters Smatt
making good money right out of high school are investing
in a roth ira from the get go. That's something
we would recommend they do right to build up to
start building wealth through their future. They really should be
(20:54):
with that kind of salary. Yeah, and one of the
best people in personal finance. Jonathan Clements, he used to
write for The Wall Street Journal, launched a website called
The Humble Dollar, which is which is great. Well, he's
launched a new initiative to help kids from poor families
start investing in a WROTH early on. And so Jonathan,
he was sadly diagnosed with a terminal form of lung
(21:15):
cancer about a year ago, but he's still and I've
been really interested to watch kind of how he's handled
this man. He's handled it so well in the way
he's talked about it, but also the way that he's
continued to pursue the things that he cares about, even
in the face of death coming soon. And he's so
he's pursuing that passion of personal finance education despite those
(21:36):
trials that he's facing. And proceeds from his new book,
which is an anthology of his writings from the Journal
back in the day, are it's going to fund a
getting going on savings initiative and this is being launched
in Boston specifically, and it pairs education with free matching
ROTH contributions for some lucky teens. And they're also what
(21:57):
I love about this, They're going to do some tracking.
They're going to see how this impacts those savers moving forward,
like incentivizing them to invest in a wrath so good
in their teams when they otherwise likely would not have.
Is this going to lead to lifelong savers and investors.
I think it will. I'm really curious to see the results.
But I love that Jonathan is like putting his money
where his mouth is in this, and he's really not
(22:19):
only investing in kids, but investing in some data that's
going to I think help us, help us all figure
out what it looks like to help the next generation
become better savers and investors totally.
Speaker 3 (22:30):
And I think another lesson we can gain here is
that that we have more power as individuals to make
change out in the world right, Like incentivize the type
of behavior that you want to see. I don't want
to make everything about like fitness, and I don't know,
I feel like we've kept we kept that rained in
some but like this is a part of and I've
shared this, this is one of the reasons. This is
part of the reason why I built up the home
gymnast because I wanted to empower my daughters, like I
(22:50):
wanted them to see that it is okay and in
fact great to be a strong female. And I've incentivized
them to like do pull ups and depths and stuff
like that. And as well as the kids in the neighborhood,
like when they came over, if they're able to, you know,
to do that, they get they get paid money, like
it's a party when when the kids come over. We
don't have to fully rely on the government to enact
(23:11):
ways for future generations to save. Will you pay me
for public sty No, I'm sorry, jo So. On an
opposite note, there might be a new investment account created
out of thin air and it's called this is so
terrible but the money Account for Growth and Advancement or
of course MAGA. Yeah. I will say this sort of
account has been proposed by both Republicans and Democrats in
(23:33):
the past as a way to jump start savings for
the next generation.
Speaker 1 (23:37):
They kind of like baby bonds at different time. There's
different methodologies behind this, but the whole goal is to say.
Speaker 3 (23:43):
In effect, it's the same thing. Yeah, And as part
of the new big, beautiful tax bill, it's meant to
be away for the government to put a thousand bucks
into the hands of kids across the country for their futures.
So the way it's proposed, parents could then contribute more
up to five thousand dollars a year. And it seems
like this account would be sort of like a hybrid
of a five twenty nine account and the four to
(24:03):
one K, so part education part, like this is money
you can live off off in the future, but it
would allow kids to use that money that's a crew
to start a business, or you could buy your first
home once you turn eighteen. It's all up in the
air right now. It's hard for us to take a
to give our opinion, to give a hot take. It
could help peak investing interest, making a lifelong difference. Certainly,
(24:26):
it could legitimately help some kids have a bit of
a nest egg when they graduate high school even or
certainly by maybe by college. But the way the law
is worded, this account might not be around for long.
That's one of the saddest parts to me. Like so
a lot of the proposed parts of the bill, there
is a senset of twenty twenty eight, which off the
mic chel We've talked about why we think this is,
(24:47):
but it's not a done deal. And the fact is
it's tough to get really excited about something when there's
a clear expiration date, when it's set to sunsets.
Speaker 1 (24:56):
It could literally help three years worth of children, and
then it just it's weird and I don't If this
is good policy, let's keep it around, and if it's not,
then let's not.
Speaker 3 (25:05):
Do it at all. It might be a way to
try it out and to be able to silently just Okay, yeah,
let's go ahead and let's allow that program to end
because folks aren't excited about it. It could just be
a political maneuver to be like, hey, you want this
to continue. We got to pass another big, beautiful bill
in another three four years, but we will certainly make
sure to keep folks posted as that bill comes together
(25:26):
solidifizes gets passed, like, for instance, the child tax credit.
Speaker 1 (25:29):
Some of the different changes likely to increase for the
next two years as well. Yeah, exactly, a lot lots
of cover that will impact your personal finances as it solidifies.
Speaker 3 (25:37):
I'm sure we'll be talking about it in the weeks
to come.
Speaker 2 (25:39):
You're listening to How to Money with Joel Larsgard on
demand from KFI AM six forty.
Speaker 3 (25:45):
Don't forget to sign up for the how To Money
newsletter over at how tomoney dot com slash newsletter. Let's
now hear from a listener and he has a particularly
fun friggaler. Cheap for us?
Speaker 4 (25:56):
I'm at and Joel, this is Buddy from Downers Grove,
or cheap question for you. So you walk into a
mattress store, you're looking for a new mattress. You've been
there before, you know the sales rep that's work with you,
and you go on. You say, hey, I want the
same bed that I bought two years ago because I
need to swap one bet.
Speaker 3 (26:15):
Out at my house.
Speaker 4 (26:16):
And they say, hey, listen, we got one end back.
It's going to have this fifty percent off and you
could add on an extended warranty at a pre low rate.
Is that frugal or cheap to be buying a used
mattress that was on the show floor of a mattress store.
Speaker 3 (26:35):
Thank you so much for the show.
Speaker 1 (26:36):
We'lle have a great day, all right, matt Normally, when
I hear the words used and mattress in the same sentence,
my earparks up and I'm like, tell me more.
Speaker 3 (26:45):
Cuz I get excited in a good way. Well, sometimes like, is.
Speaker 1 (26:49):
There a horror story coming here, or like, because I
don't know. I get when I was much much younger,
I was more inclined to do whatever it would take
to save a buck. And I'm still think of myself
as a pretty frugal dude. But use mattresses.
Speaker 3 (27:03):
I have outgrown that used mattress regrets regards you.
Speaker 1 (27:07):
Well, we I know, I think you guys something similar
and inherited mattress.
Speaker 3 (27:11):
Yeah, well sort of. Okay, So the problem with Buddy's
question here is that he's asking a guy who slept
on a used mattress for over a decade. Yeah. So,
and this is a I used mattress not by somebody.
It wasn't inherited, It was not from somebody. We knew.
It was listed on Facebook, and it just so happened
that it was next door to some folks that we know,
some friends of ours, and so I was able to
(27:32):
kind of quasi have them vouch for their neighbors. It
was these weird, messy, nasty people. But I mean they
did have cats, and there are you know, some cat
here that I drove extra fast on the way home
because the mattress was strapped to the top of the car.
I'm like, okay, maybe that'll get all the work. Oh
the cat hairl Okay. So here's the thing we like
I said, we slept on that thing for over a decade,
(27:53):
super comfortable mattress. And now so we upgraded to a
king a couple of years ago. And guess who sleeps
on that on the mattress now one of our kids.
So we still have that mattress and everybody in our
household knows that that is the most comfortable mattress. That's
my entire house bar nun Like no questions ask everyone
knows it. It's it was. It was a smart move
(28:14):
for us.
Speaker 1 (28:14):
I think that's a clutch part of the answer. Here
is it comfortable? Like yeah, because if you're saying, hey, listen,
I'm thinking about trying to save money on this thing,
and you know, the mattresses I at best, but actually
it's not giving me the best night's sleep. It's like
there is something in sleep important.
Speaker 3 (28:34):
Man. This is also probably.
Speaker 1 (28:35):
Middle aged me coming out, but like my sleep matter
is more than Yeah.
Speaker 3 (28:39):
Often you pay attention to your sleep score on your
watch every day.
Speaker 1 (28:42):
I look at it and and I always let that
inform how I slept.
Speaker 3 (28:46):
I'm like, how did I sleep? I don't know. Let
me check my watch. I try to.
Speaker 1 (28:48):
Actually like think about how I feel a first and
see if it matches up with a number, because it
doesn't always just.
Speaker 3 (28:55):
To not like brainwatch yourself by whatever the score happens
to say yeah on the garmen. Yeah, but I get it.
I guess.
Speaker 1 (29:00):
I just don't want Buddy to make a decision here
solely for money, because, yeah, you're sleep matters. It's going
to influence a lot of things, including potentially how much
money you make, like if you're like showing up groggy
eye to your job and stuff like that.
Speaker 3 (29:13):
Like it matters. Old buddy got the cheap mattress but
not making nearly as much a work anymore.
Speaker 1 (29:19):
Yeah, but I think it like where Buddy's coming from
and the way he phrased this question makes me think
that it is frugal and not cheap because a couple
of things. It sounds like he's purchased this model before
he's had good results, so he knows that this particular
brand of mattress is a good one at least for
you know, the way he's used it in the past.
That bodes well, I too, similar to Buddy, would be
(29:41):
willing to buy a floor model in order to score
fifty percent off. If I was a fan and I
needed another mattress, I'd rather buy a nice floor model
mattress in order to score a higher end bed that
I otherwise wouldn't be willing to purchase or able to afford,
than to buy a brand new, much cheaper model. I
just think the construction could be much worse on the
(30:01):
on some of those fly by night, you know, mattress
in a box sort of things. Although some of the
mattress in the boxes are pretty good, and it just
depends on I sleep on one now, but I think that,
you know, the comfort level could be inferior on a
lower end mattress. And so if you're like, hey, I
know this, it's nicely, it's it's well made, I'm getting
a great deal.
Speaker 3 (30:20):
I know, I like this thing. Save the money. Sure,
I always see the floor model as like a benefit
because of the fact that it's had some some folks
kind of you know, bouncing on a little bit, kind
of like walking around on their knees. So I will
say that when we purchased our new mattress, I was like, man,
this thing's kind of stiff, but like it takes a
minute to actually break in. And anytime I've talked to
(30:41):
you folks who know a thing or two about mattresses,
they literally will on their knees, like walk around on
the mattress to kind of like break it in. Yeah, essentially.
But also I think what Buddy said was that the
sales rep or the salesperson whoever, they started at fifty percent,
And so I will see this as an opportunity, Like
(31:01):
he came to him already with fifty percent in mind,
and I think that there is a chance that he
would even be able to go down a touch more
sure perhaps, So yeah, why not negotiate. I want to
see Buddy have a conversation. Hey, this is somebody he knows,
someone he's familiar with. I think there's an ability for
them to get rid of a model maybe that nobody
else wants that's been in the back of the store
for a minute. While also Buddy give getting an even
(31:24):
better deal than he thought possible.
Speaker 1 (31:26):
I'd also probably want to know the return policy, Like
is that is true? Hey, granted this is a store
model and I'm getting a sick discount, but if I
take it home and I realize that it is bent
out of shape or something like that, and the right
side of the mattresses is worn in a little more
than that, I thought that, can I bring it back
within thirty days? And so yeah, I think the return
(31:47):
policy matters here. And you really only might be able
to figure out what kind of condition it's in after
sleeping on it for a few nights. So that's that's
at least one question I would have. And then you know,
the one thing in your question that might be a
bad idea would be to get an extended warranty, though,
because the risk of a mattress having significant issues is
pretty low. And it's not that extended warranties can never
(32:10):
be a smart move, it's just that they rarely are.
Self insuring is almost always the best bet. It's almost
always what you're going to hear from us as an answer.
So if you're getting this bargat basement price, what you're
going to pay for the extended warranty would probably be
a decent portion of the overall cost that I wouldn't
want to work over.
Speaker 3 (32:29):
Yeah, that's true.
Speaker 1 (32:30):
You've been listening to how to Money with Joel Larsgard.
You can always hear us live on KFI Am six
forty twelve pm to two pm on Sunday, and anytime
on demand on the iHeartRadio app
KF I am six forty. You're listening to how to
Money on demand on the iHeartRadio app.
Speaker 2 (00:07):
Do you want to live well without drowning in debt?
Speaker 3 (00:11):
Joel and Matt have you covered?
Speaker 2 (00:13):
This is how to Money with Joel Larsgard and Matt Altmes.
Speaker 3 (00:29):
KF I am six forty live everywhere on the iHeartRadio app.
This is how to Money. I am Matt Altmis and
I'm Joelarsgard. Don't forget to sign up for the how
to Money newsletter. You can find that up at how
tomoney dot com slash newsletter. Joel, do you want to
give a quick little update on your dishwasher? The dishwasher
saga that we shared on Monday with folks. So, I'm
(00:50):
sure folks are wondering. They've been on the edge of
their seat.
Speaker 4 (00:52):
I know.
Speaker 3 (00:53):
Well, yeah, so I ended up.
Speaker 1 (00:55):
I bought four dishwashers from Costco, as I said, and
my wife was.
Speaker 3 (00:58):
Where they all shrink wrapped? Again? Were they connected with
the big handle? Amazing? How could you carry that? Well?
Speaker 1 (01:05):
No, separately shrink wrapped, but man, so I had mine
installed and I sold my old dishwasher, and then my
dad wanted one of the dishwashers, and so caught free
installation from Costco for for mine and for his, and
then I sold.
Speaker 3 (01:21):
Serious serious de ja vous, but but keep going.
Speaker 1 (01:24):
Keepka And then so I sold the other two on
Facebook pretty quickly for five hundred bucks each.
Speaker 3 (01:29):
So my dad, I.
Speaker 1 (01:31):
Gave him the essentially the price that I paid per dishwasher, right,
but but for the ones I should get, that can discount,
that's right, right, But.
Speaker 3 (01:39):
I'm not gonna like charge him extra.
Speaker 1 (01:40):
But people on Facebook paid the full freight that I
was asking five hundred bucks. I was like, well it
started off higher than that because it I was like,
maybe I'll get more, but had takers at five hundred
and so ultimately I ended up not getting paid, which
I thought I would. I think I told you I
thought I would, and I did. I ended up getting
paid to get a new dishwasher put in at my house,
and like I told you, them was getting long in
(02:02):
the tooth.
Speaker 3 (02:02):
I was getting frustrated with it. So yeah, yeah, I'm happy.
So Okay, so the big question does it you've had
it now for for a few days, and you so
you said you wanted to get a new dishwasher because
your old one you are the man who handles the dishes,
the dish like you you are, Yeah, you're in charge
of clean up. Does it clean better? Because this is
a Bosh dishwasher, and we know that with it being
a German company. Well, I guess just because this German
(02:23):
doesn't mean it's automatically better. But Bosh specifically are incredibly
highly rated. They last, does it? Does it clean?
Speaker 1 (02:29):
Yes, It's been cleaning better, and so my mornings when
I'm putting the dishes away are far less frustrating.
Speaker 3 (02:35):
Are they dryer as well? They are dryer as well?
Speaker 4 (02:37):
Yeah?
Speaker 3 (02:37):
Yeah, see that was that was my big hold up
because of the plastics. Yeah, I was, yeah, all right.
Speaker 1 (02:42):
There's certain spots in like those kids food containers that
just didn't always to get all the way dry. I
don't think in any like if it could have, if
it could get rid of all the water in there,
that'd be impressive.
Speaker 3 (02:52):
But evidently some of them can, including plastics. Okay, So
one of our our biggest hang ups has been we
tried some like some green the detergent pods because we're like, yeah,
you know, maybe we should be a little more health
conscience health conscious, But they didn't do a great job
cleaning the freaking dishes, and I do. I am incredibly
(03:12):
hesitant to throw something away. I don't like to waste
stuff is the leftover's principle, right like you got it,
like put it to use. I was so close to
toss on those things because the dishes were not getting clean.
I was so happy to see to put the last
pod in the thing. And then we kind of swung
in the other direction and got like these incredibly highly rated,
very not natural, very not green, little gel podt some
(03:35):
things or whatever. And I hate those two not because
so they do a good job cleaning the best.
Speaker 4 (03:40):
Well.
Speaker 3 (03:41):
The fragrance specifically on these is terrible, like all the
cups and plates, everything smells like this flowers or something. Yeah,
I hate it. Again. I'm like this close to toss on
all those, but I can't bring myself to waste these
perfectly fine, they get the job done. I just proved
right there. Oh I got a great embarratt And I
can't give them to somebody you think might appreciate Maybe
we should. Yeah, So I'm looking forward to being done
(04:03):
with us and just moving back to the what is it?
The power ball? You know it's got the Little Red Classic.
I feel like those are just they're not overly fancy,
they're not super expensive, they don't seem like the absolute
worst pods for you. But I'm on sale and it's
what we have been using. I don't know why we
switched it up. Is that what y'all use? No, we
use the liquid because he's like squirted in there. Is
it multipole like that? You get this from Costco? Yeah,
(04:25):
so it's the Kirkland sig. It's not Kirklands. Okay, what
is it with the brain is in a green bottle?
But okay, they want to say it's like seven bucks
for giant tub of dishrusher liquid. Interesting, Yeah, not bad.
Let's go for it. But let's keep moving though. This
is like quite a departure from what we're talking about
now that you want to talk about. I just want
to say a macro level what's going on. It's thrilling
(04:46):
to me, to the frugal guy and me to get
paid to put a new dish rusher in when I
already bari that I am for you for me, that's
just that's like a that's a big money win. It's good.
Speaker 1 (04:55):
But yes, let's talk about a bunch of other stories,
Matt personal finance stories that going to impact people's people's
finances in America's credit worthiness, that's something that we should
probably talk about in the beginning. It's in greater question
right now after Moody's one of the credit rating agencies
joined the other two credit rating agencies and downgraded the
(05:17):
America's credit standing. So it's it's like essentially the like
Equifax telling you, yeah, you had a seven forty, now
you're down to like seven twenty five. We just don't
think here as good at handling credit as we thought four.
But this is on a national scale, so this isn't surprising,
but it does shine a light on our unwillingness to
(05:37):
face economic facts head on as a country. I think
it's some people might be overestimating the impact though it's
I think it is also not a red warning light
that should be freaking us all out. But it does
reveal the fact that our country could be on better
financial footing if we were better managing gard title entitlement
programs and our overall debt load, that would have a
(05:57):
positive impact. That's actually part of the reason I think
that this big, beautiful bill as it's being called is
becoming a political football right now, and the extra trillions
in debt that were likely to be racking up in
the coming decades if this bill goes through, which could
impact the economy, and the desirability of owning US treasuries,
which impacts all of us. Right, but it's also relative, right, met,
(06:20):
you and I have had these conversations off the mic.
America's financial strength is still unparalleled. When they're talking about
pure nations.
Speaker 3 (06:27):
We're number one. Yeah.
Speaker 1 (06:28):
Still, even if we're all like making dumb moves like
shooting ourselves in the foot to a certain extent, America
is still in a top notch position. So yeah, I think,
similar to prior downgrades from the other credit rating agencies,
I think it's likely to have a minimal impact, but
it doesn't mean it's still not tough to watch.
Speaker 3 (06:45):
I totally agree, So yeah, I wanted to highlight that
because there's been a lot of talk about this being political.
It's not political. So the first downgrade as we came
down from the triple A rating, it happened back in
twenty eleven. And guess who was president back then, a
very popular Democrat who was resided in the White House
Barack Obama for some reason twenty I think, well, maybe
it was twenty eleven, maybe twenty thirteen. But then I
(07:06):
know that the second one of the other ones, maybe
it was Fitch at that point downgraded. That happened in
twenty twenty three, and I remember we covered that then
and again, how it's likely to be overblown, But it's
definitely not political, because you've got two Democratic presidents who
are in office at that point in time. It is
not political. But I also don't think it's as big
of a deal as many folks are making it out
(07:27):
to be, because in particular, I find myself thinking more
and more like in this line of thought, thinking about
what are the alternatives when it comes to borrowing from countries,
because and so I looked it up, and there are
maybe about a dozen countries out there who still have
retained the perfect triple A status. But here's the thing.
They're tiny. They are so stink and small. So you
(07:49):
average the GDP of those around twelve countries who still
retain that perfect rating, and we are something like twenty
seven times larger than the average those of all those combined,
but just on average, like it's anywhere from like Germany
is the biggest, and I think there's something like four
trillion dollars or something like that compared to the US
(08:10):
is twenty seven. But a lot of the other countries
are closer to not four trillion, but like three two.
And most of them are in the hundreds of billions
of dollars that retained that perfect rating. So that's something
to keep in mind on a macro level, as folks
are freaking out. I don't think this is something that
folks should be overly concerned about.
Speaker 1 (08:27):
Yeah, and you say that it's not political, and I
think you're right. It's not some sort of like denigration
of a particular party or their policies. But I do
think this is in some ways the extension of the
tax cuts and Job Act, or this new big, beautiful
bill that we're starting to learn more about, which I'm
sure we'll talk more about next week. The tax cuts,
(08:47):
extension of the tax cuts, the elimination of taxes on
social Security tips, overtime pay. Those policies aren't raining spending
it in any meaningful way, and so it's not obviously
just a reflection of the current administration. It's a reflection
of what's been happening with under both Democratic, Democrat and
Republican regimes. It's a reaction to the fiscal reality of
(09:08):
what's likely to happen. But I think we're also seeing
a wait a second, like this bill. While yeah, it'll
provide tax savings for many Americans, it'll grow the deficit,
which is not great for the long term financial health
of our country.
Speaker 3 (09:20):
Yeah, and of course on an individual level, borrowing costs
are going to go up because these I mean, basically,
the US has been told, hey, you know, before your
addition on these these treasuries at four percent, like, we're
going to need to see a little more from you
because we're not totally sure if you're going to be
able to pay these off. And so we saw like
thirty year treasuries go from like they win over five
percent for the first time in quite a while. But
(09:42):
the way this is going to impact us as individuals,
specifically for borrowers. Right, so, for folks who are looking
to buy a home, the thirty year fixed mortgage rate
is closely aligned with a ten year treasury note. This
is how it's going to more directly impact folks on
a personal level. But even still I wouldn't be freaking out.
Speaker 1 (10:01):
Yeah, I couldn't agree more. All right, we've got more
to get to on today's show.
Speaker 2 (10:05):
You're listening to how to Money with Joel Larsgard on
demand from KFI AM six forty.
Speaker 3 (10:13):
By the way, you can always find more money saving
information over at howtomoney dot com.
Speaker 1 (10:17):
And if you have a money question we'd love to
hear from you, just go to how toomoney dot com
slash ask, or instead of doing that, just record your
question on the voice memo app of your phone, send
it to us at how to moneypod at gmail dot com.
Hopefully we can take it next week on the show, Matt.
This question comes from a listener who inherited some money.
She's trying to figure out what's the best way to
(10:38):
handle it.
Speaker 5 (10:41):
Hey, Matt and Joel, it's Cheryl from Nebraska. I am
going to get about one hundred and fifty thousand dollars
in inheritance. I owe about one hundred and ten on
my house. I wondered if it would be smarter to
pay off the house or just pay half on the
(11:01):
principle or I don't know what.
Speaker 3 (11:05):
Give me your thoughts.
Speaker 5 (11:07):
I listened to your show daily.
Speaker 3 (11:09):
Love It, Thanks Joel. Cheryl is listening to us daily.
I'm assuming she's catching up on the episodes. But what
if we switched it up and started doing a daily podcast,
daily financial.
Speaker 1 (11:19):
News, you wouldn't have to twist my arm. I don't
think I like talking to you. I like talking about money,
So doing that more, I wouldn't.
Speaker 3 (11:27):
Have to cut it down to like a fifteen minute show.
Perhaps just because the.
Speaker 1 (11:32):
One part of the thing that we can't control is
how much listeners like or dislike us, and if we
if we talk too much into their years, they might
fall into the ladder camp. That is true, Cheryl.
Speaker 3 (11:42):
I want to kick things off and say that I'm
sorry to hear that you've lost someone close to you,
someone who's close enough that they would leave you in inheritance.
So condolences first off. But what it is that you
choose to do with this lump sum of money, man,
We are not going to be able to give a clear,
caad answer because it is so dependent on your personal
money goals, that's so dependent on some of the specifics
(12:05):
that we actually aren't privy to. So with that in mind,
we'll try to provide a general framework. So hopefully you
can make a smart decision with this cash and fusion,
which I'm sure is.
Speaker 1 (12:15):
What this feels like for sure, most people like the
biggest cash in fusion most people get, Matt is their
their tax refund right that they got recently, and that
feels like a big thing that they can do a
lot with. But this is obviously much bigger. You can
address bigger financial concerns that you have, and so let's
address maybe the mortgage first.
Speaker 3 (12:35):
For Cheryl. Here is Cheryl if you swish, he's got
her eyes set on paying off that house. I get that.
Speaker 1 (12:39):
That's especially when you're talking about big some money. You're like,
what do I owe the most on? And that is
a mortgage typically for most people, and so it makes
sense like, well, big lump sum, big mortgage. Let's try
to eradicate as much of that as possible. And if
you just bought the house recently, Cheryl, the answer might
be yes. Right, if you've got like a seven percent
mortgage or something like that, and you're you're a debt
(13:00):
averse person, then paying off the mortgage it can be
a fine way. I would say to use those inheritance
dollars on top of paying it off, though you'd still
have forty thousand dollars left to boost your savings and
to invest, so it's not like that's the only thing
you could accomplish either, which I think is great and
lens maybe even more credence to the goal of paying
(13:22):
off your mortgage with the majority of this money. But
if you bought your house a whole bunch of years ago,
and let's say you're in the last decade of paying
it off, and you've got a really sweet locked in
low interest rate, right, you're gonna get a whole lot
less bang for your buck. So if you've got that
three percent or so interestrate, you've already paid a lot
(13:42):
of interest over the first decades of ownership, if you've
had that mortgage for a long time. While paying it
off in one fell swoop can feel good, there are
meaningfully better ways, I think to use that one hundred
and fifty thousand dollars, because really that tail end of
the mortgage matt when you don't know as much, you're
just talking about very little in interest to the banks
every single month because of the way a mortgage loan
(14:05):
is amortized. So that's when people are most likely to
start paying off their mortgage in droves to start throwing
more money at it. But it's also the time where
it matters the least.
Speaker 3 (14:16):
That is true. One thing I want to mention too, like,
and you mentioned one hundred and fifty thousand dollars, So
does Cheryl make sure Cheryl that you are accounting for
taxes on this inheritance, because yes, there is no federal
inheritance tax, but Cheryl lives in Nebraska, and Nebraska is
one of the few states that does actually have an
inheritance tax, and so we may not be talking about
(14:39):
the full one fifty So I'm assuming, Cheryl, though, that
you are keeping that in mind. But Joel, like, we're
talking about the alternatives and what we can do with
this money. We've mentioned this before, but when you can
get that higher guaranteed return in a high yield savings account,
why would you consider accelerating your debt payoff. It's hard
to give up a guaranteed return on your investment by
hanging on to a lower mortgage as opposed to paying
(15:02):
it off early, because most of the time there's risk
involved when you were trying to invest money versus paying
off that debt, and you know, you might want to
invest some of those dollars too, but when there is
that risk free route to earn more, it's really hard
to turn down. And that's what a high ueld Taming's
account is for people with a mortgage in the low
to mid threes. It's guaranteed plus. And this is another note.
(15:24):
I think a lot of folks, maybe more recently folks
have sort of felt the advantages of having more cash
on hand. But generally speaking, liquidity is incredibly underrated in
personal finance. Everyone's looking for different ways to optimize as
opposed to finding ways to be able to weather the storm.
And when there are fewer and fewer storms, maybe you
start thinking, ah, maybe all the storms they don't exist anymore.
(15:46):
It's like, no, you just just wait, there'll be something
that comes along. And I think that the.
Speaker 1 (15:50):
Cash is trash mantra caught on for a whole bunch
of years. Yeah, well, I'm just gonna invest them and
no matter what. And so, you know, paying off low
interestate didn't make sense. Putting money in sames didn't make
sense because hey, what's that cash really doing for me? Well,
cash is finally doing something for you. Now it's certainly
not trash. And you're right the liquidity piece, the liquidity
(16:11):
that having cash on hand provides.
Speaker 3 (16:13):
There's options, man, there's worth there. There's value as opposed
to paying off the mortgage early. Like, once you get
rid of that mortgage, especially if it's a lower rate mortgage,
there's no going back. Yeah, possibly ever, but maybe potentially
in your lifetime being able to secure a mortgage of
that less whereas the savings rates go down, you can
always sort of change the you know, your plan of
(16:34):
attack at that point.
Speaker 2 (16:36):
You're listening to How To Money with Joel Larsgard on
demand from KFI AM six forty.
Speaker 1 (16:42):
If you're on Facebook, by the way, you want to
join a group of like minded folks who have money questions,
who have money insights, please go join the how to
Money Facebook group.
Speaker 3 (16:51):
Jo Let's talk about the youths for a minute here.
What are the kids up to? You mat not totally sure.
I'm not on social media as much these days, but
I did see that some high school juniors are getting
seventy thousand dollars job offers, which is more than the
average pay for Americans across the country.
Speaker 1 (17:07):
You know what I would say to that skibity rizzler
or that someone. I'm assuming kids.
Speaker 3 (17:11):
Would say to that. I think that's what you would
have to say.
Speaker 1 (17:14):
Honestly, I would just assume I heard that like six
months ago from my honor, so I'm assuming it's not
gonna anymore.
Speaker 3 (17:19):
This is incredibly impressive for teenagers who are just starting
out with no college degrees, and so you might be thinking, gosh,
these are some smart kids. You know, they've gotten straight a's,
maybe they've gotten insane score on their SATs, whatever other
tests these kids are taking these days. Nope, that is
not the case. Companies are hiring these kids who have
(17:39):
shop experience something like welding, for instance, and they are
being courted almost like star athletes because of the extreme
lack of skilled labor in the country. We've talked about
this before, including with different experts here on the show. Yeah,
but blue collar work apprenticeships are thriving right now, and man,
you combine that with the ability to start making money early,
(18:01):
you're able to avoid college debt. It's certainly not for everyone,
but I really love seeing this trend. It's hard for
me to not project and picture myself in a situation
like this where I wasn't totally sure what I wanted
to do when I was sixteen or seventeen. And I
say that because that's how old you are. When you're
a junior, that's when you start making some of these
decisions as to what you might be doing for the
(18:22):
next five years of your life. We're talking to a
friend of ours recently. They've got a rising senior. They're
going to be spending the summer going to different colleges.
And that's great for a lot of folks. Who are
I mean kids who are I was not mature at
that age, that's all I'm going to say. That's all
I'm saying. And I lucked out. I was fortunate enough
to not have to take on student loans and shows
a degree that blighted me in great careers and I
(18:44):
found my way, Joel. But for a lot of students
out there, I think this can be such a fantastic
way to make some money for a couple of years,
to gain some maturity, to figure out what it is
that you want to do with your life. Yeah, before
you especially before you take on some inordinate student loan debt.
Speaker 1 (18:58):
Yeah, I mean, there's a school not too far from
where we live and one of our friends, Matt oversaw
this program of kids learning to become airplane mechanics and
so amazing.
Speaker 3 (19:08):
They are graduating.
Speaker 1 (19:10):
With the best skill set, the better skill set than
most of their peers with immediate professions. And he would
he told me this with a little smack of I
don't know, sadness on his face. He's like, they're gonna
get paid more than I am right when they graduate
high school, because he's a teacher, and like, I feel
hear the pain in your voice when you say that,
but also the pride that those kids are able to
(19:32):
instantly earn, coming from a tough background in lots of situations,
instantly earn more than he was after all.
Speaker 3 (19:38):
The education he'd received amazing.
Speaker 1 (19:39):
And it's not that I mean, when you look at
the data, still on average people earn more with a
college degree over the lifetime of their earning, some a
million dollars more over time. But it's also with the
price of college and with the dearth of blue collar workers.
If you're if you're smart in the path that you take,
you can do better, I think in many instances than
(20:01):
your college kind of parts, especially the people who go
to college for a couple of years, then drop out.
They've got college debt, they don't have the degree to
show for it. That's the worst case scenario.
Speaker 3 (20:09):
Yeah, especially when it hasn't cost you any money to
gain these skills, Like why not buy yourself a couple
of years if you want to change your mind, that's
something you can do. You can then apply for college
at that point in time when you've got maybe a
clear idea of what it is you want to pursue,
and drop tens of thousands of dollars on in higher
and how much you spend on that college education is crucial,
especially in today's job market and environment.
Speaker 1 (20:31):
If you're talking about taking on six figures in student
loan debt, it's tough to overcome. But if you're talking
about a free or incredibly cheap education, then that's also
a case of like, well, yeah, I don't know, why
not go for it? But let's hope those youngsters Smatt
making good money right out of high school are investing
in a roth ira from the get go. That's something
we would recommend they do right to build up to
start building wealth through their future. They really should be
(20:54):
with that kind of salary. Yeah, and one of the
best people in personal finance. Jonathan Clements, he used to
write for The Wall Street Journal, launched a website called
The Humble Dollar, which is which is great. Well, he's
launched a new initiative to help kids from poor families
start investing in a WROTH early on. And so Jonathan,
he was sadly diagnosed with a terminal form of lung
(21:15):
cancer about a year ago, but he's still and I've
been really interested to watch kind of how he's handled
this man. He's handled it so well in the way
he's talked about it, but also the way that he's
continued to pursue the things that he cares about, even
in the face of death coming soon. And he's so
he's pursuing that passion of personal finance education despite those
(21:36):
trials that he's facing. And proceeds from his new book,
which is an anthology of his writings from the Journal
back in the day, are it's going to fund a
getting going on savings initiative and this is being launched
in Boston specifically, and it pairs education with free matching
ROTH contributions for some lucky teens. And they're also what
(21:57):
I love about this, They're going to do some tracking.
They're going to see how this impacts those savers moving forward,
like incentivizing them to invest in a wrath so good
in their teams when they otherwise likely would not have.
Is this going to lead to lifelong savers and investors.
I think it will. I'm really curious to see the results.
But I love that Jonathan is like putting his money
where his mouth is in this, and he's really not
(22:19):
only investing in kids, but investing in some data that's
going to I think help us, help us all figure
out what it looks like to help the next generation
become better savers and investors totally.
Speaker 3 (22:30):
And I think another lesson we can gain here is
that that we have more power as individuals to make
change out in the world right, Like incentivize the type
of behavior that you want to see. I don't want
to make everything about like fitness, and I don't know,
I feel like we've kept we kept that rained in
some but like this is a part of and I've
shared this, this is one of the reasons. This is
part of the reason why I built up the home
gymnast because I wanted to empower my daughters, like I
(22:50):
wanted them to see that it is okay and in
fact great to be a strong female. And I've incentivized
them to like do pull ups and depths and stuff
like that. And as well as the kids in the neighborhood,
like when they came over, if they're able to, you know,
to do that, they get they get paid money, like
it's a party when when the kids come over. We
don't have to fully rely on the government to enact
(23:11):
ways for future generations to save. Will you pay me
for public sty No, I'm sorry, jo So. On an
opposite note, there might be a new investment account created
out of thin air and it's called this is so
terrible but the money Account for Growth and Advancement or
of course MAGA. Yeah. I will say this sort of
account has been proposed by both Republicans and Democrats in
(23:33):
the past as a way to jump start savings for
the next generation.
Speaker 1 (23:37):
They kind of like baby bonds at different time. There's
different methodologies behind this, but the whole goal is to say.
Speaker 3 (23:43):
In effect, it's the same thing. Yeah, And as part
of the new big, beautiful tax bill, it's meant to
be away for the government to put a thousand bucks
into the hands of kids across the country for their futures.
So the way it's proposed, parents could then contribute more
up to five thousand dollars a year. And it seems
like this account would be sort of like a hybrid
of a five twenty nine account and the four to
(24:03):
one K, so part education part, like this is money
you can live off off in the future, but it
would allow kids to use that money that's a crew
to start a business, or you could buy your first
home once you turn eighteen. It's all up in the
air right now. It's hard for us to take a
to give our opinion, to give a hot take. It
could help peak investing interest, making a lifelong difference. Certainly,
(24:26):
it could legitimately help some kids have a bit of
a nest egg when they graduate high school even or
certainly by maybe by college. But the way the law
is worded, this account might not be around for long.
That's one of the saddest parts to me. Like so
a lot of the proposed parts of the bill, there
is a senset of twenty twenty eight, which off the
mic chel We've talked about why we think this is,
(24:47):
but it's not a done deal. And the fact is
it's tough to get really excited about something when there's
a clear expiration date, when it's set to sunsets.
Speaker 1 (24:56):
It could literally help three years worth of children, and
then it just it's weird and I don't If this
is good policy, let's keep it around, and if it's not,
then let's not.
Speaker 3 (25:05):
Do it at all. It might be a way to
try it out and to be able to silently just Okay, yeah,
let's go ahead and let's allow that program to end
because folks aren't excited about it. It could just be
a political maneuver to be like, hey, you want this
to continue. We got to pass another big, beautiful bill
in another three four years, but we will certainly make
sure to keep folks posted as that bill comes together
(25:26):
solidifizes gets passed, like, for instance, the child tax credit.
Speaker 1 (25:29):
Some of the different changes likely to increase for the
next two years as well. Yeah, exactly, a lot lots
of cover that will impact your personal finances as it solidifies.
Speaker 3 (25:37):
I'm sure we'll be talking about it in the weeks
to come.
Speaker 2 (25:39):
You're listening to How to Money with Joel Larsgard on
demand from KFI AM six forty.
Speaker 3 (25:45):
Don't forget to sign up for the how To Money
newsletter over at how tomoney dot com slash newsletter. Let's
now hear from a listener and he has a particularly
fun friggaler. Cheap for us?
Speaker 4 (25:56):
I'm at and Joel, this is Buddy from Downers Grove,
or cheap question for you. So you walk into a
mattress store, you're looking for a new mattress. You've been
there before, you know the sales rep that's work with you,
and you go on. You say, hey, I want the
same bed that I bought two years ago because I
need to swap one bet.
Speaker 3 (26:15):
Out at my house.
Speaker 4 (26:16):
And they say, hey, listen, we got one end back.
It's going to have this fifty percent off and you
could add on an extended warranty at a pre low rate.
Is that frugal or cheap to be buying a used
mattress that was on the show floor of a mattress store.
Speaker 3 (26:35):
Thank you so much for the show.
Speaker 1 (26:36):
We'lle have a great day, all right, matt Normally, when
I hear the words used and mattress in the same sentence,
my earparks up and I'm like, tell me more.
Speaker 3 (26:45):
Cuz I get excited in a good way. Well, sometimes like, is.
Speaker 1 (26:49):
There a horror story coming here, or like, because I
don't know. I get when I was much much younger,
I was more inclined to do whatever it would take
to save a buck. And I'm still think of myself
as a pretty frugal dude. But use mattresses.
Speaker 3 (27:03):
I have outgrown that used mattress regrets regards you.
Speaker 1 (27:07):
Well, we I know, I think you guys something similar
and inherited mattress.
Speaker 3 (27:11):
Yeah, well sort of. Okay, So the problem with Buddy's
question here is that he's asking a guy who slept
on a used mattress for over a decade. Yeah. So,
and this is a I used mattress not by somebody.
It wasn't inherited, It was not from somebody. We knew.
It was listed on Facebook, and it just so happened
that it was next door to some folks that we know,
some friends of ours, and so I was able to
(27:32):
kind of quasi have them vouch for their neighbors. It
was these weird, messy, nasty people. But I mean they
did have cats, and there are you know, some cat
here that I drove extra fast on the way home
because the mattress was strapped to the top of the car.
I'm like, okay, maybe that'll get all the work. Oh
the cat hairl Okay. So here's the thing we like
I said, we slept on that thing for over a decade,
(27:53):
super comfortable mattress. And now so we upgraded to a
king a couple of years ago. And guess who sleeps
on that on the mattress now one of our kids.
So we still have that mattress and everybody in our
household knows that that is the most comfortable mattress. That's
my entire house bar nun Like no questions ask everyone
knows it. It's it was. It was a smart move
(28:14):
for us.
Speaker 1 (28:14):
I think that's a clutch part of the answer. Here
is it comfortable? Like yeah, because if you're saying, hey, listen,
I'm thinking about trying to save money on this thing,
and you know, the mattresses I at best, but actually
it's not giving me the best night's sleep. It's like
there is something in sleep important.
Speaker 3 (28:34):
Man. This is also probably.
Speaker 1 (28:35):
Middle aged me coming out, but like my sleep matter
is more than Yeah.
Speaker 3 (28:39):
Often you pay attention to your sleep score on your
watch every day.
Speaker 1 (28:42):
I look at it and and I always let that
inform how I slept.
Speaker 3 (28:46):
I'm like, how did I sleep? I don't know. Let
me check my watch. I try to.
Speaker 1 (28:48):
Actually like think about how I feel a first and
see if it matches up with a number, because it
doesn't always just.
Speaker 3 (28:55):
To not like brainwatch yourself by whatever the score happens
to say yeah on the garmen. Yeah, but I get it.
I guess.
Speaker 1 (29:00):
I just don't want Buddy to make a decision here
solely for money, because, yeah, you're sleep matters. It's going
to influence a lot of things, including potentially how much
money you make, like if you're like showing up groggy
eye to your job and stuff like that.
Speaker 3 (29:13):
Like it matters. Old buddy got the cheap mattress but
not making nearly as much a work anymore.
Speaker 1 (29:19):
Yeah, but I think it like where Buddy's coming from
and the way he phrased this question makes me think
that it is frugal and not cheap because a couple
of things. It sounds like he's purchased this model before
he's had good results, so he knows that this particular
brand of mattress is a good one at least for
you know, the way he's used it in the past.
That bodes well, I too, similar to Buddy, would be
(29:41):
willing to buy a floor model in order to score
fifty percent off. If I was a fan and I
needed another mattress, I'd rather buy a nice floor model
mattress in order to score a higher end bed that
I otherwise wouldn't be willing to purchase or able to afford,
than to buy a brand new, much cheaper model. I
just think the construction could be much worse on the
(30:01):
on some of those fly by night, you know, mattress
in a box sort of things. Although some of the
mattress in the boxes are pretty good, and it just
depends on I sleep on one now, but I think that,
you know, the comfort level could be inferior on a
lower end mattress. And so if you're like, hey, I
know this, it's nicely, it's it's well made, I'm getting
a great deal.
Speaker 3 (30:20):
I know, I like this thing. Save the money. Sure,
I always see the floor model as like a benefit
because of the fact that it's had some some folks
kind of you know, bouncing on a little bit, kind
of like walking around on their knees. So I will
say that when we purchased our new mattress, I was like, man,
this thing's kind of stiff, but like it takes a
minute to actually break in. And anytime I've talked to
(30:41):
you folks who know a thing or two about mattresses,
they literally will on their knees, like walk around on
the mattress to kind of like break it in. Yeah, essentially.
But also I think what Buddy said was that the
sales rep or the salesperson whoever, they started at fifty percent,
And so I will see this as an opportunity, Like
(31:01):
he came to him already with fifty percent in mind,
and I think that there is a chance that he
would even be able to go down a touch more
sure perhaps, So yeah, why not negotiate. I want to
see Buddy have a conversation. Hey, this is somebody he knows,
someone he's familiar with. I think there's an ability for
them to get rid of a model maybe that nobody
else wants that's been in the back of the store
for a minute. While also Buddy give getting an even
(31:24):
better deal than he thought possible.
Speaker 1 (31:26):
I'd also probably want to know the return policy, Like
is that is true? Hey, granted this is a store
model and I'm getting a sick discount, but if I
take it home and I realize that it is bent
out of shape or something like that, and the right
side of the mattresses is worn in a little more
than that, I thought that, can I bring it back
within thirty days? And so yeah, I think the return
(31:47):
policy matters here. And you really only might be able
to figure out what kind of condition it's in after
sleeping on it for a few nights. So that's that's
at least one question I would have. And then you know,
the one thing in your question that might be a
bad idea would be to get an extended warranty, though,
because the risk of a mattress having significant issues is
pretty low. And it's not that extended warranties can never
(32:10):
be a smart move, it's just that they rarely are.
Self insuring is almost always the best bet. It's almost
always what you're going to hear from us as an answer.
So if you're getting this bargat basement price, what you're
going to pay for the extended warranty would probably be
a decent portion of the overall cost that I wouldn't
want to work over.
Speaker 3 (32:29):
Yeah, that's true.
Speaker 1 (32:30):
You've been listening to how to Money with Joel Larsgard.
You can always hear us live on KFI Am six
forty twelve pm to two pm on Sunday, and anytime
on demand on the iHeartRadio app
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