March 9, 2025 • 33 mins
Hour 2: Doom spending is en vogue as consumers increase spending based on worries about the future of the US economy.
Ask HTM: Greg wants to know if the taxable brokerage account is a worthwhile investment vehicle for his retirement goals.
We're getting an 'affordability czar'! But will it make a difference in prices for consumers? Ultimately, we all need to be our own affordability czars.
Ask HTM: A listener wants the best money-saving travel tips. Matt and Joel offer a few!
Ask HTM: Greg wants to know if the taxable brokerage account is a worthwhile investment vehicle for his retirement goals.
We're getting an 'affordability czar'! But will it make a difference in prices for consumers? Ultimately, we all need to be our own affordability czars.
Ask HTM: A listener wants the best money-saving travel tips. Matt and Joel offer a few!
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
This is Matt Altmix and joelars Guard and you are
listening to KFI AM six forty how to Money on
demand on the iHeartRadio app.
Speaker 2 (00:10):
All Joel and Matt want to do is help you save,
invest and enjoy more of what matters. This is how
to Money with Joel lars Guard and Matt Altmix.
Speaker 3 (00:31):
KFI AM six forty live everywhere on the iHeartRadio app.
Speaker 4 (00:34):
This is how to Money.
Speaker 1 (00:36):
I'm your host, joelars Guard and I am the other host,
Matt Altmix. And if you have a money question, we'll
send it our way. All you have to do is
record your question on the voice memo app there on
your phone and send it over via email. You can
find the simple instructions at howdomoney dot com, Forward slash
ask And of course, it is now time for the
ludicrous headline of the week, which is from CNBC. The
(00:58):
headline reads, one in five Americans are doom spending and
here's how that can backfire. Joel, there is a new
report and they find that twenty percent of folks out
there are partaking in what's now being called doom spending,
which is just another term. You know, how these news
organizations come up with the different terms.
Speaker 4 (01:15):
We feel like they're being coined right and left.
Speaker 1 (01:17):
It is essentially buying more stuff because of fears about
the future. You are expecting the worse. And some folks
out there are citing incoming tariffs as a reason to
buy stuff now that the otherwise would have avoided or
at least we died longer to purchase. And you know,
you listen to how the Money before you've heard our
take on this, you know, we don't love this mindset
(01:37):
to buy something.
Speaker 4 (01:38):
Before you otherwise would.
Speaker 1 (01:40):
It's like we're always either in a period of economic
uncertainty or we're just around the corner for something from
something terrible happening.
Speaker 4 (01:45):
Joel, don't let their shoes about to drive.
Speaker 1 (01:47):
Yeah, don't let this in still fearing you, don't let
it change your money, actions, your habits, especially if that
reaction would.
Speaker 4 (01:54):
Be to increase your spending. Yeah, don't freak out, folks.
Maybe doom saving.
Speaker 3 (01:57):
Doom saving is a better way of going, and that's
what the emergency fund is all about. It's like, if
you're nervous about the future, which it should, it should
lead you to stockpile more cash.
Speaker 4 (02:06):
But like, but even so, that's it doesn't.
Speaker 1 (02:08):
It shouldn't be in reaction to something that's going on,
like you should all that regardless of what's going on
in rosie times or when things aren't looking so good,
you should have that emergency fund because then, so I'm
pushing back because if someone starts freaking out and they
start thinking, well, I can't invest money if only bad
times or ahead, they're not gonna they're not gonna be
willing to dollar cost average and they're gonna pull back
a little bit. They're gonna sit on cash, potentially miss
(02:31):
out on obviously what that would have done had that
been invested in experienced that compounding.
Speaker 3 (02:35):
Yeah, yeah, I agree, And I think some people out
for doom spending when their debt is feeling out of control,
like with the logic of why not because I'm like
digging myself into a bigger.
Speaker 4 (02:44):
Holes, like throwing the talent essentially, I think that's exactly.
Speaker 3 (02:47):
What happens here, right, And but the truth is, those
additional purchases will catch up to you and it makes
the eventual payoff process even more painful. And by the way,
if you're in that position, you're like, man, my debt
is overwhelming. There are nonprofits that can help you, like
Money Management International. It's worth talking to a budget counselor there.
We've also met. We've talked about how tariffs are likely
to impact prices, and so I think that's part of
(03:08):
why people are doom spending. They're seeing kind of tariff
implementation economic uncertainty, and they're saying, man, I need to
front loads and purchases because prices are about to go up.
Speaker 4 (03:17):
That's what I'm reading about. And you know, Trump.
Speaker 3 (03:19):
Called the tariffs against Mexico and Canada off last month,
but they wouldn't to affect this Tuesday, and then got
pulled back in part.
Speaker 1 (03:25):
They're making more organizations as well, like the US Mexico
Canada agreements.
Speaker 3 (03:30):
And then its products, some agricultural products right are going
to also be taken off the chopping block.
Speaker 4 (03:36):
Oh man, it's so confusing, and you're like, dang it.
I bought a bunch of stuff on Tuesday.
Speaker 1 (03:40):
I stockpiled avocados because I thought the prices were going
to go up, right, And the truth is, prices are
going to arise on a lot of goods if tariffs
stay around for long.
Speaker 4 (03:50):
But will they stay around, We don't know. We don't
know what's gonna happen.
Speaker 3 (03:53):
With big question, so much sea sawing happening, and I
think no matter what, it still doesn't mean that you
should front load spending, especially especially if it means taking
on more debt. I think that increases anxiety and that
leads to a doom spending doom loop, and that's that's
what I foresee for a lot of people. If if
you partake in doom spending, it's it's likely to unravel
things instead of help.
Speaker 1 (04:13):
Yeah, we'll definitely be keeping up with a terrific conversation
how it impacts our money, because they could end up
sparking stagflation, which is a combination of weak economic growth
and inflation. And here we go, so one economists use
the adorable term mini stag session. It's so much more
palatable many stag session. We're not fans of making predictions, man,
(04:34):
we try not to do it. We're not changing our
investing strategy, we're not changing how what it is.
Speaker 4 (04:38):
That we're buying.
Speaker 1 (04:39):
But even if stagflation doesn't materialize, uncertainty it's one of
the worst words, I think for business owners and operators,
and I think that's a big part of why. I mean,
that's why we're seeing fluctuations like crazy in the market right.
Speaker 4 (04:52):
Now, intra day fluctuations that are they've been insane. Yeah,
they've been insane.
Speaker 1 (04:56):
And hopefully you aren't glued to the headlines and adjusting
not only how it is that you're spending on a
day to day basis, but we certainly don't want to
see you change how it is that you're investing your
dollars because, honestly, in the I mean personally, I think
everything is gonna be fine, not because anyone is brilliant
or anything. I don't know, Like we've kind of had
this conversation, but and this is where I don't know.
(05:16):
Maybe folks are gonna say I'm more of a conspiracy theorist, Joel,
but I've shared this with you. Who was sitting there
on the podium with Trump when he got inaugurated like
two months ago? Oh, the tech, all the guards, you
saw Tim Cook or Tim Apple?
Speaker 2 (05:28):
Right?
Speaker 1 (05:29):
Of course Elon was there, but like Bezos, who else
was there? Sundar from Google Zuckerberg he was there as well. Right,
these are the biggest companies in the US, are you
telling me? And so because that they were there there's
no way that that was their first conversation that they've
had with Trump or with the current administration, with the
White House. I think, man, that there has got to
be back channels open where they're having conversations with these
(05:51):
big companies and saying, hey, all right, we gotta play tough,
we gotta play hardball. We're gonna we're gonna threaten these terrorists.
Don't freak out. Everyone else is gonna be freaking out.
Just keep on doing what you've always done. Obviously, this
is a more generous interpretation of what's being going on.
Speaker 3 (06:04):
I don't even know if that's generous though, because then
there's all these other small businesses. It's like, why you
linking up with a lot of richest America, the richest
dudes who run the biggest companies, when all the other
small businesses that uncertainly impacts them a lot more than
it impacts the big companies, who often have ways of
side stepping the tariffs straining.
Speaker 1 (06:21):
You know, I'm hilding that. I think it's perceived uncertainty
as opposed to actual uncertainty. That's I mean, And this
is why we you know, big companies, why they have
earnings reports right, and small businesses pay attention to that.
It sets the tone for what's going on in the economy.
That's a generous optimistic interpretation. If Trump actually thinks that
terrorists are going to be good for our country, then
I think he's an idiot, because all economists have pointed
(06:43):
to the fact that this is not going to make
our country wealthier.
Speaker 4 (06:46):
Yeah. I couldn't agree more.
Speaker 3 (06:47):
All right, we've got more to get to On today's
show PAF I am six forty live everywhere on.
Speaker 4 (06:53):
The iHeartRadio app. This is how to Money. I'm Joe
Larscard and I am Matt Altmix.
Speaker 1 (06:59):
If you're on Facebook and you want to join a
group of like minded folks who have money questions and insight,
please go ahead and join the how to Money Facebook group.
Let's get to our next listener question. This is from
a listener who is considering a number of different options
to make sure that he is properly prepared for retirement.
Speaker 5 (07:18):
Hi, Matt and Joel, this is Greg from Los Angeles.
I really enjoy the show and all the knowledge and
insight that it provides, and I keep telling my friends
and coworkers about it to help give them a better
financial footing. I am a public servant, so I am
(07:39):
contributing towards a pension when I retire. Over the last
couple of years, I have been maxing out my roth IRA.
My question is I am in the beneficial position of
potentially earning more than one hundred and forty thousand in
the next couple of years. And I wanted to get
your thoughts about, you know, contributing to my personal wroth.
(08:03):
Should I continue to do the roth ira and once
I get to that limit just do a backdoor wroth
or what I'm finding from my employer is that we
have the ability to contribute to a savings account, which
is a four oh one K, and I'm wondering if
I should just start that post tax and roll over
(08:26):
my current roth IRA. I am in the process of
also my pension. I contribute to the four point fifty
seven offered by my employer, and this four oh one
K would then be a third bucket to fill either
pre or post tax. Appreciate all your time and consideration
(08:47):
and wishing you the best in coffee and beer.
Speaker 3 (08:51):
Oh Greg. Thank you first of all for spreading the
word for telling other people about the show.
Speaker 4 (08:55):
We really appreciate it.
Speaker 3 (08:56):
If every single one out there listening told one friend,
just told one friend, oroscolytized a little bit about HTM,
we double our listenership, Joel. That's how it works, Matt,
So thank you, Greag. Appreciate that. And by the way,
great coffee and beer, they really are inexpensive ways in moderate,
in moderation to bring some extra joy of your life,
even it.
Speaker 1 (09:15):
Can be an expensive way sometimes the like we say
it's our craft beer equivalent for a reason, we don't.
We're not spending the bare minimum on our beer jowel. No,
and you're not on your coffee either. In particular, I've
actually I've kind of changed out.
Speaker 4 (09:28):
I'm back a little bit.
Speaker 5 (09:29):
Yeah.
Speaker 3 (09:29):
Is that partly because coffee bean prices have gone up
so much that the expensive stuff. Have you personally experienced
that if you're just a look at what they call
I mean interesting, I shop mostly at costco, but yes,
I look at the price.
Speaker 4 (09:42):
What if it's impacting the cheaper beans in because the
nicer stuff.
Speaker 1 (09:45):
So okay, So first of all, personally, all right, try
not to let this be a massive tangent, but I've
personally dialed back my coffee consumption I don't know if
you've noticed, but I don't make coffee here in the
office anymore.
Speaker 4 (09:55):
Now that you pointed out, yes, no, I didn't think
about that.
Speaker 1 (09:57):
It's been a couple months and I realized, you know what,
I feel like my coffee drinking is gotten out of
hand and not from like a health standpoint. I could
totally fall asleep at night, just fine, but I realized
it was something I wasn't needing. I guess, I don't know.
It felt like it was getting just a bit out
of hand in particular when I was and I was
just buying some of the nicer stuff, like some of
the bags I was buying. Man, it's like a ten
ounce bag or like a twelve ounce bag for like
twenty five bucks and stuff.
Speaker 4 (10:18):
Of what I'm talking about.
Speaker 1 (10:19):
We're fancy coffee if you're looking at like over two
dollars an ounce. But I think Kate and I found
the sweet spot specifically, if folks want to know countercultures,
big trouble.
Speaker 4 (10:28):
They sell it at Whole.
Speaker 1 (10:29):
Foods, which is on our path to school, uh huh
for carpool, and oftentimes you can go in there and
you get it on sale, and like when it's on sale.
I'm paying less than a dollar an ounce, okay, and
this is like solid, really tasty stuff that we're drinking
on the regular. I still go out and splurriage and
will get like a bag of the nice stuff, or
someone gives me some really good stuff, which you like
(10:51):
to do. Yeah, one of our local roasters. That's phenomenal.
I'm still drinking.
Speaker 4 (10:54):
Those bags are expensive.
Speaker 3 (10:55):
I'm still drinking the Kirklan signature, but I don't know
any better, and I kind of don't want to know better.
I'm like purposely blindfolding myself. That's to fancy coffee to
make sure that I don't spend too much.
Speaker 1 (11:04):
I'm trying to do that with wine. But the more
wine I drink, I'm like, oh that's now I know.
I don't even know how to say it.
Speaker 4 (11:10):
Rio hoo. Yeah, it's like a Spanish wine. Yeah. I
had like one of those recently and I was like, oh,
this is I like this.
Speaker 3 (11:17):
Okay, so sorry, we'll stop this tangent very soon, but
I'm going to pick you up a bottle. I haven't
tried the Kirkland signature version of the Rio. I wonder
if it's any Oh, we'll give it a try. Yeah, okay,
not to get.
Speaker 4 (11:26):
It to go.
Speaker 3 (11:26):
But let's get to Greg's question, Matt, because that's what
we do on the show is answer questions.
Speaker 1 (11:31):
At some point we will get to your question. Right,
Can we talk about all the things that we want
to talk about?
Speaker 4 (11:36):
That's right?
Speaker 1 (11:36):
This is our show, after all, Greg, not yours. Hey,
he's the one that brought up coffee and arrus. I'm
assuming he's a fan as well.
Speaker 3 (11:42):
If you didn't want that tangent, you shouldn't have asked
for it. Well, congrats on having a pension available to you.
That's that's becoming more rare obviously. But what should you do, Matt,
when you're making the big bucks and you can't contribute
directly to a roth Ira. That is a question that
is actually a good question to have. It's a good
problem to have because it means you're moving up the
income spectrum. And some people they think of that as
(12:03):
a sad day, but I think of it as like
a happy day because it means you're crushing it when
it comes to the money you're making. I would rather
make more and lose access then make less and still
be wroth eligible.
Speaker 1 (12:14):
Like if I had to. You know, had to pull
the lever on that choice. It's like option A or
option B, which would you choose?
Speaker 4 (12:20):
Is okay? Well, I hate that I can contribute directly
to a wrath, but it means good things, right.
Speaker 3 (12:25):
And you know Greg must be single because the income
limit for joint fowlers is like two hundred and thirty
thousand dollars. He cates one hundred and forty six thousand
dollars for single individuals. But as you crust that threshold,
my first suggestion would be to invest more overall dollars,
which could help you remain WROTH eligible. One thinks the
solution more people should consider him totally. Yeah, So if
(12:46):
Greg were to start contributing to his traditional four one
k so not his WROTH, if that's an option that's
available to him, wroth war one K no, no, no,
go with a traditional four win k and that could
reduce your modified adjusted gross income. I'll allowing you to
keep contributing directly to a WROTH, meaning that there are
going to be no extra hoops for you to jump through. Basically,
(13:07):
if you're right on that line, every dollar you contribute
to a pre tax account, it's going to help you
to lower that modified adjusted gross income, potentially keeping you
under that income threshold, which can mean you can keep
talking money into your roth IRA light clockwork just like
you always have, and then you know if your income
does go up substantially over time or if you aren't
keen on investing more money.
Speaker 1 (13:29):
There's other ways to pull this off as well, which
you've touched on and Greg, you know, higher earners such
as yourself can take advantage of what's known as the
backdoor WROTH. So that's something else that's worth mentioning. It's
not another account some people think that it is. It's
a process that you go through that involves basically extra hoops.
And so what happens is you contribute money to your
traditional IRA and then you convert those dollars into your
(13:50):
wroth IRA instead of making that direct contribution to the WROTH.
And what you need to know is you're not claiming
any sort of tax deduction for that initial contratribution to
your traditional IRA. You'll make what's known as a non
deductible contribution. Read upon the details. We've got a piece
on this up on our website. We'll link to it
in the show notes. But the backdoor WROTH can be
(14:11):
the perfect way for you to basically keep contributing to
that account if your income continues to rise. And we
love that you're trying to continue to put in after
tax dollars into investments, because yeah, I think having more
WROTH dollars Matt is just going to mean more tax
flexibility for Greg when he gets into his retirement years,
(14:32):
he's going to have kind of the ability to dial
in his tax rate if he has two bucks to
pull from. And the last strategy that Greg mentioned contributing
to his four one K and then converting those funds
to a roth IRA. That's what's known as a mega
backdoor WROTH, which I know is kind of ridiculous, gets
a bit confusing, But if you've got even more money
(14:54):
that you want to invest on top of maxing out
your roth IRA, but contributing to that would allow you
to invest even more dollars there towards your tax advantaged
wrath IRA.
Speaker 4 (15:02):
So and with him, he's talking about all these.
Speaker 1 (15:05):
Options that he's got available to him, right, Like he's
got the pension, he's got the roth iray that he's
been maxim out every year. But then on top of
that contributing to your employer plan as well. That's I
feel like he's entering. Greg's entering beast mode sort of territory.
He's like or god mode.
Speaker 4 (15:20):
You remember doom oh yeah, back in the day.
Speaker 3 (15:24):
It's an embarrassment of riches essentially that Greg has here,
and I think it might make sense to talk to
a financial advisor. We have talked about two different places
that we suggest people go find an advisor. There's Hellonectarine
dot com and then there's Domain money. Those are both
two great places to turn. So if you're like, I
just got a few questions about this, that might be
a great place to go. Especially again, you don't want
(15:47):
to let the tax tail wag the dog be. You
do want to make sure you're making a smart decision
for your future and for your current and future taxes.
So it might make sense to pay somebody for a
couple hours of their time to kind of dice details
here totally.
Speaker 1 (16:01):
So on the note of planning for your future, one well,
I guess one caveat too. It's always great to plan
for your future. But Greg, I wouldn't spend too much
time on this as well, because he so he said
that he in the future years might be getting close to,
like earning close to one forty And like you mentioned,
one forty six is the cutoff for Rotha raight, but
that was actually for last year, for twenty twenty four,
(16:21):
for twenty twenty five, it's one hundred and fifty thousand dollars.
And so what I'm pointing out here is that by
the time you hit that, you get closer to one
forty Greg Like, there's a good chance that threshold is
moved even higher. And I'm not saying that you don't
have the ability to like catch that threshold at some point.
More power to you, man, Like, I think you can
totally do that, that's the goal. But I'm just highlighting
the fact that you're not quite there, and they're going
(16:44):
to continue to raise that with inflation.
Speaker 4 (16:46):
I mean, something else to keep in mind.
Speaker 3 (16:48):
Just depends on how quickly that income escalates. All Right,
We've got actually more to get to.
Speaker 4 (16:52):
On today's show, KFI AM six forty.
Speaker 1 (16:55):
You're listening to how to Money on demand on the
iHeartRadio app. Thof I AM sixty live everywhere on the
iHeartRadio app.
Speaker 4 (17:04):
This is how some Money I am that.
Speaker 3 (17:06):
Alt mixed and I am Joel Larsgard, and we're glad
to have you along for the show today. By the way,
if you're looking for the right credit card for your wallet,
well you want to be able to use it responsibly.
But if you do that, if you pay your credit
card on time and in full every single month, well
check out our credit card tool. You can find that
up on the website at howtomoney dot com.
Speaker 1 (17:27):
So let's keep your money and government train rolling for
a bit more here, Joel, there's a new position that
is being created, the Affordabilities Are. I've already sent in
my application, is there, it's coming soon. Do you think
I'll get the job? Matt, only if you promise to
appoint me on the board, because they we're putting together
a board. But we'll see how this shakes My minis
are It's a nice right next to me. It's an
(17:48):
interesting move given the twelve hundred dollars in average on
annual spending impact that Terris are predicted to have on
US households. But this Affordability Zar will likely to be
tasked with trying to reduce prices on everything from homes
to cars, groceries, electronics as well I'll do my best, Folks,
I am highly skeptical. You don't think I can do
(18:09):
it of this, not of you, but just of this
government intervention. It seems insane. I do think like, yeah,
maybe there could be some wiggle room right in the
healthcare space to encourage or to mandate some pricing transparency
which could help consumers shop in a more informed way.
We just were talking about the high cost of college.
The only thing that is outpaced college when it comes
(18:30):
to outpacing that the average rate of inflation is medical spending.
Speaker 4 (18:35):
So I think that could be good.
Speaker 1 (18:36):
But either way, keep listening to how to money and
be your own affordabilities are folks. No one is going
to look after your hard earned dollars like you. This
seems completely unnecessary to It's a creation of another perhaps
government organization to counter what another part of the government
is doing.
Speaker 4 (18:53):
Seems highly inefficient. I disapprove.
Speaker 3 (18:55):
Yeah well, and yeah that in intervention into markets to
try and stemy cost increases, both sides of the aisle
have kind of gone. We talked about that with attempts
to raid in what we're being called greedflation, and how
we didn't think that was a good idea, and similarly,
you're trying to go in there and force companies to
cost cut prices. I think no matter from which side
(19:18):
of the political fence you're sitting on, it's not gonna
work out well. And I was like interference to me, Yeah,
the market is going to do better at regulating that,
and we just have to pay attention and save the
best we can.
Speaker 4 (19:31):
We talked about that a lot of the show here,
don't we hashtag free the market like that?
Speaker 3 (19:35):
People still using hashtags these days. Yeah, they're gonna use
that one. Okay, Well. President Trump also seems to be
keen on starting a national cryptocurrency reserve.
Speaker 4 (19:44):
Hooray for taxpayers.
Speaker 3 (19:46):
I say that tongue in cheek because it's another policy
we're just not keen on. He's not talking about the
United States owning just bitcoin, but adding in some smaller
and some lesser known cryptocurrencies too, fortunately not his own
meme coin. Although details on what this national crypto reserve
is going to look like, those details are thin, and
(20:07):
I think the goal is at least important to try
and do what Norway has done. They have a sovereign
wealth fund that allows the country to prosper as markets
perform well. Norway has crushed it when it comes to investing.
They're almost as good as Nancy Pelosi, Matt. But Norway
doesn't have the debt problems that we have, and so
(20:27):
we have significant debt. So instead of paying down debt,
we would be investing that money instead to pay down debt.
After we've seen our national cryptocurrency wallet, So I guess
that's the plan. Yeah, that's the way. It's at least
been positive. But as front of the show, Noah Smith,
who we had on recently said, he said, this is
going to require either raising taxes on American people or
(20:49):
making the US government go deeper into debt at a
time when interest payments are already spiraling out of control.
I just I just don't see a reason for us
as taxpayers to be on the hook for a government
run crypto endeavor.
Speaker 1 (21:03):
I think it's an okay idea because if you think it,
like there's just so much ridiculous stuff that we are
spending money on it, Like, would it be the worst
thing for the US to have its own crypto wallet?
I don't know, Like I think about it, like AI,
we don't totally know what the implications of AI is
going to be and the government is doing the best
it can to encourage the private development of AI, specifically
(21:25):
to compete with China.
Speaker 4 (21:26):
Right.
Speaker 1 (21:26):
At least that creates jobs, a lot of jobs, that
is true, But bottom line, we don't know exactly how
that's going to shake out and what that's going to
look like off in the future.
Speaker 4 (21:33):
That's kind of how I feel about bitcoin.
Speaker 3 (21:35):
I like the way coin, but what about XRP and
Solana and these other I definitely.
Speaker 1 (21:40):
Can't get behind those at least. Yeah, Trump's mean coin
wasn't a part of a part of the announced reserve,
But I guess I just see the potential downsides of
the US not having a bitcoin reserve being greater than
had we dump some money into it. Okay, and who
the heck knows what's going to happen. But if like
it hits one million by twenty thirty or twenty thirty five,
(22:01):
like that's something.
Speaker 4 (22:02):
These are predictions that are being made.
Speaker 1 (22:03):
We have a friend, Joel, and he recently shared that,
and he wasn't he didn't like lay all his cards
on the table, but he basically pointed out it was
very easy to gather that from a small investment like
back in twenty seventeen in bitcoin, like anywhere between like
a twenty thousand dollars and a fifty thousand dollars investment.
That his bitcoin is now worth between two and eight
(22:24):
million dollars. That's not chump change. And so you multiply
that across something like what the US might be able
to do often in the future.
Speaker 4 (22:31):
It's just something dick And said.
Speaker 1 (22:31):
I don't think it's the dumbest idea, especially given the
vast amounts of money that the US is already spending.
I guess I'm just a bit more neutral on the
crypto reserve. Yeah, I'm less neutral specifically bitcoin, I'll say that.
Speaker 4 (22:43):
Yeah, And if it was bitcoin in particular, do you
feel differently? If it was only bitcoin, I would feel
little differently.
Speaker 3 (22:47):
I still don't think it's necessarily a smart move by
our federal government. All right, Hey, we got more money
saving information to get to.
Speaker 1 (22:53):
From a five AM, six forty live everywhere on the
iHeartRadio app.
Speaker 3 (22:58):
This is how to Money. I am Matt and I'm
Joel Larscard. Don't forget to sign up for the how
to Money newsletter. You can find that up at how
Tomoney dot Com.
Speaker 1 (23:05):
Slash newsletter, and of course now we've got the Facebook
Question of the week, and this week it's from Nathan,
and he asked, I was wondering if anyone had tips
on booking flights and hotel? Are there sites that are good?
Should I book them together or separately? Should I book
directly with the hotel or with prices I see on.
Speaker 4 (23:22):
Other sites if they are cheaper? What do you think, Joel,
all of the above.
Speaker 3 (23:27):
That's a good question. There's a lot to talk about here.
We'll do our best to offer a brief but helpful answer.
Just don't travel. Book nothing. If you want to say
the most amount of money right, stay home. If you
want to save you more, live in your mom's basement.
That is going to be the best way to have
that ninety percent savings rate that everyone's shooting FORMATT.
Speaker 1 (23:44):
But occasionally buy some groceries for the house. Come on, man,
you don't want to be a total leech, otherwise she's
gonna kick you out. Well, we are all about traveling
and saving money on travel. Maybe we should just mention
a few of our favorite sites MATT for travel and
flights specifically, it used to be this combo of Google
Flights in Southwest, but now think the good Lord above.
Southwest flights are included in the Google results, so it's
(24:06):
a one stop shop. You can set up fair alerts,
which is clutch, and I don't know if you need
any other sites for booking besides maybe a Going membership
which used to be known as Scott's Cheap Flights if
you are a flexible travel NERD. I think Going is
great because they're delivering those sweet deals to your inbox
(24:27):
and you might be like, wait a second Germany for
three hundred and eighty two dollars. I'm in I didn't
even realize I.
Speaker 3 (24:33):
Could get there that cheap, And that's what Scott's Chief
Flights does so well. If you just take one international
flight a year based on their recommendations, you easily more
than pay for the membership fee. I think Skyscanner is
another solid site.
Speaker 4 (24:46):
But I don't know.
Speaker 3 (24:47):
I think that combo of Google Flights, Southwest, Scott's Chief Flights,
if you're just using those three resources, I think you
can get mostly where you want to go.
Speaker 4 (24:56):
Yeah, and that's typically the most expensive.
Speaker 3 (24:59):
Part of But one other thing on Google Flights is
setting fair alerts. So when you're like, here's where I
want to go. Make sure you set that fair alert
and look at those. You don't have to keep checking
on it every time. And Google even tells you, hey, actually,
right now, this is like an average time to buy,
or hey, this is a really good price. You should
book now, And that's always helpful. That helps me know
when to pounce.
Speaker 1 (25:18):
Yeah, by make it happen, be done with it. As
far as hotels, though, hot Wire price Line they're great.
Don't forget about Airbnb. Of course, we're always big fans
of them, But if you really want a hotel, we
like those third party sites, especially if you're willing to
book a hotel room without knowing specifically where you're staying,
Like if you don't really care about the name of
(25:38):
the place and you just want like a star rating, right,
like a certain quality, certain caliber of hotel, that's totally the.
Speaker 4 (25:46):
Way to go.
Speaker 1 (25:47):
The hot Wire hot rates that could give you an
incredibly low price. Price Line, they've got the express deals,
and I think that that can be a great way
to score a deal. And these sites used to have
the best deal the majority of the time, but things
have changed recently. Many of the hotels that you see
listed on these actual websites. They've kind of wised up,
(26:08):
and so if you see one that you like, look
up pricing directly on their website, and what you can do.
You can actually give them a call, which very few
folks are willing to do these days. But if you
call them up, there's a good chance that they'll match
or even be a deal that you're seeing elsewhere. And
then on top of that, you typically will get a
better cancelation policy as well. By booking directly with hotel
(26:30):
versus one of these third party sites non refundable. It
can be worth it if you're getting like the absolute
sickest deal, but if not, you know, I like the
idea of keeping your options open just in case you
want to change your mind or something else comes up
and you want to pounce over there instead of over here.
Speaker 3 (26:45):
One of the things that I think that I've noticed, Matt,
we're trying to book through hot wire or price line
on occasion is man the deal the nightly rate looks
like it's way better than maybe what's offered through the
same hotel book booking directly on their site. When you
click all the way through and you look at the
taxes and fees, fees, they're much more expensive on some
of these third party travel sites that talk about helping
(27:08):
you finding the best deal, and so you're like, at
the end of the day, I'm not really saving much money,
and yeah, the cancelation policy is way crummier, and actually
maybe I'm paying more like going through one of these
third party sites, think going directly through the hotel.
Speaker 4 (27:23):
That did not used to be the case.
Speaker 3 (27:24):
It felt like you could almost always get a better
deal on a third party site. That just feels like
the era that hot Wire and price line when they
had the monopoly on the best prices. That's not really
where we're at anymore. It's not like it used to be.
Speaker 1 (27:36):
Yeah, it's worth it to have another Safari or Firefox,
not Firefox. What is it Chrome Browser open and doing
the command till day to be able to Firefox. Firefox
is what the people still use that. I'm sure there's
some Firefox users out there. But also, hey, we almost
forgot about this costco travel. Don't forget about that, because
you got to mention that depending on the type of
(27:56):
trip that you're taking, you might find better deals on
all sorts of like in particular, like the all inclusive.
Speaker 4 (28:02):
Style travel packages.
Speaker 1 (28:04):
And that's particularly true for like more exotic destinations like Cleveland,
not Cleveland, like Hawaii, like the Caribbean, And as always,
the number one way to get a great travel deal
is just to be flexible, not only on the dates
that you're looking to travel, but also the location. I
think the best way to think about going on a
trip is just to be like, at some point in
(28:26):
this season, I want.
Speaker 4 (28:28):
To take a break.
Speaker 1 (28:29):
Yeah, and then man, the world's your oyster and you're
gonna absolutely get the best deal. And then the Google
Flights Explore feature is gonna be awesome for that. You
might get crazy cheap flights too, in awesome place that
wasn't even on your radar, just because you clicked around
some you were like doing a little bit exploring, see
what's out there, Look what the deals are, And it
doesn't take long before you're like, guess I'm gonna go
to Mongolia.
Speaker 2 (28:50):
Sure?
Speaker 4 (28:50):
Why not?
Speaker 3 (28:51):
Didn't realize you get there for two to eighty round trip.
That's yeah, that's the cool thing. When you click the
Explore feature, you might just be made aware of insanely
low prices to ast nation that you hadn't even thought about,
and it might be guess what, especially if we're talking
about Europe, a train ride away from the place you
really want to go, and so your leg so.
Speaker 4 (29:08):
Sounds like fun.
Speaker 3 (29:08):
Great, let me fly into Milan and then I'll still
get to hang out in Tuscany because the flight to
Milan was way cheaper're describing my travel back in gosh
when it was two thousand and three.
Speaker 4 (29:18):
Jowel, oh, did you do that exactly? Terrary?
Speaker 1 (29:20):
We flew into Milan. Okay, we didn't. We went took
a It was like a really long train ride.
Speaker 4 (29:25):
This is one of my first Yeah, yeah, this one
was rough.
Speaker 3 (29:32):
Well, especially when you're younger, you got extra free time. Yeah,
we're willing to do it to save the money. We
totally did that.
Speaker 1 (29:38):
And here is a little piece of advice that Nathan
isn't asking, but consider driving because especially if you have
a fam can't drive them alone. You can't drive them alone.
But like I mean, consider something a little bit more
local instead of going abroad. Everyone thinks about something more exotic,
but there's a lot of amazing stuff here in the
United States. And I know, especially with kids when they
can't fully appreciate all that's out there. Plus they're also
not appreciating how much it costs to fly in a plane,
(30:00):
the ability to pile everybody in a car, and to
go see the mountains of West Virginia before we go
see the mountains in the Alps.
Speaker 3 (30:07):
Says the guy who scoffed at my Cleveland suggestion.
Speaker 1 (30:09):
Hey, I'm going to hit up Cleveland. Does that point,
but just haven't been there one of these days. Yeah,
so something to consider as well. 'm at one more
quick Facebook question. This one's from an anonymous poster. They said,
frugaler cheap unplugging my EV when peak hours hit and
plugging back in after seven pm when I'm home and
don't need to go anywhere, Noe rainer one hundred percent
proval Right. I'd be curious to know the kill at
(30:30):
per hour price difference here, but often we're talking about
getting that electricity for less than half of the price
of full peak costs. I don't see why you'd pay
extra if there's an easy way to avoid it, Matt,
I think for this poster too, I would check with
your electricity provider to see if there's an even better
plan that you can be on as an EV owner,
at least where we live, the power companies offer something
(30:51):
that's known as a super off peak rate. Oh yeah,
and so this rate is between eleven PM and seven am.
It's only two point two cents per kill AWOT hour,
which is like a fraction of what it costs typically
to get electricity. I think on peak is thirty yeah,
and so literally it's fifteen times more affordable crazy time.
Speaker 4 (31:08):
That's insane.
Speaker 3 (31:09):
So if you're an EV owner in particularly, it's worth
considering think about how much something like that could save you,
especially especially if you're the kind of person who's willing
to I don't know, maybe do your start your washer
and your dryer at night before you go to bed
to or early in the morning dishwasher. Also, if you're
using those appliances too during those hours and charging your EV,
I think it's a no brainer to get that lower
(31:30):
rate totally.
Speaker 1 (31:30):
And ultimately the biggest win is that you're not charging
while you're out and about on the road, because if
your unwillingness to pay peak prices meant that you forgot
to charge your car at home and then you had
to stop at is It charge point. Though some of
the different stations, you're gonna be paying a whole lot
more like five.
Speaker 4 (31:48):
To seven times more.
Speaker 1 (31:49):
So the more you can charge at home, even if
it's not the most optimized time, the more money that
you're going to save. This might be the last time
I share the story, but when we were traveling in Colorado,
or rented a test on Turo wanting to get a
feel for what it's like to drive at Tesla and
have an EV. What that meant, though, is that we
charged were charging at the Tesla superchargers, and I tracked
my charges religiously and the cost was pretty much exactly
(32:14):
the same as had we rented a traditional internal combustion
engine based on the average price per gallon there in Colorado,
times the number of miles that we drove, And so
I fast you and you're constantly paying top tier charging prices.
You're not doing this to save money. You're doing this
for lifestyle.
Speaker 3 (32:31):
The money saving benefits of an EV come when you
charge at home, and they can be amplified if you
get one of those off super off.
Speaker 1 (32:36):
Peak rates or if you charge at work. Oh yeah,
more folks have when I had listen, it's a benefit.
Oh yeah, you did that, So I try.
Speaker 4 (32:45):
I would.
Speaker 3 (32:46):
They had one hundred and twenty volt outlets and I
would plug in when I got to work. But eventually
they installed real charging stations and they covered up all
the one twenty volt. You know, I'm true frugal enough.
I would have kept charging at the one twenty volt
even though it was slower. I just charged it home.
Then it just changed my habits.
Speaker 1 (33:02):
The more employers are even offering that as a perk,
where it's just like, oh, yeah, we got level two
chargers here, like they are intentionally promotalling level two the
faster chargers for free.
Speaker 3 (33:10):
Yeah, totally okay. Thank you as always for listening to
the show. We appreciate your time and attention. You can
always find more money saving information up on our website
at howtomoney dot com. We'll see you back here next week.
You're listening to how to Money on KFI AM six forty.
You've been listening to how to Money with Joel Larscart
and Matt a Mix, and you can always hear us
(33:31):
live on kf I AM six forty twelve to two
pm on Sunday and anytime on the iHeartRadio app
This is Matt Altmix and joelars Guard and you are
listening to KFI AM six forty how to Money on
demand on the iHeartRadio app.
Speaker 2 (00:10):
All Joel and Matt want to do is help you save,
invest and enjoy more of what matters. This is how
to Money with Joel lars Guard and Matt Altmix.
Speaker 3 (00:31):
KFI AM six forty live everywhere on the iHeartRadio app.
Speaker 4 (00:34):
This is how to Money.
Speaker 1 (00:36):
I'm your host, joelars Guard and I am the other host,
Matt Altmix. And if you have a money question, we'll
send it our way. All you have to do is
record your question on the voice memo app there on
your phone and send it over via email. You can
find the simple instructions at howdomoney dot com, Forward slash
ask And of course, it is now time for the
ludicrous headline of the week, which is from CNBC. The
(00:58):
headline reads, one in five Americans are doom spending and
here's how that can backfire. Joel, there is a new
report and they find that twenty percent of folks out
there are partaking in what's now being called doom spending,
which is just another term. You know, how these news
organizations come up with the different terms.
Speaker 4 (01:15):
We feel like they're being coined right and left.
Speaker 1 (01:17):
It is essentially buying more stuff because of fears about
the future. You are expecting the worse. And some folks
out there are citing incoming tariffs as a reason to
buy stuff now that the otherwise would have avoided or
at least we died longer to purchase. And you know,
you listen to how the Money before you've heard our
take on this, you know, we don't love this mindset
(01:37):
to buy something.
Speaker 4 (01:38):
Before you otherwise would.
Speaker 1 (01:40):
It's like we're always either in a period of economic
uncertainty or we're just around the corner for something from
something terrible happening.
Speaker 4 (01:45):
Joel, don't let their shoes about to drive.
Speaker 1 (01:47):
Yeah, don't let this in still fearing you, don't let
it change your money, actions, your habits, especially if that
reaction would.
Speaker 4 (01:54):
Be to increase your spending. Yeah, don't freak out, folks.
Maybe doom saving.
Speaker 3 (01:57):
Doom saving is a better way of going, and that's
what the emergency fund is all about. It's like, if
you're nervous about the future, which it should, it should
lead you to stockpile more cash.
Speaker 4 (02:06):
But like, but even so, that's it doesn't.
Speaker 1 (02:08):
It shouldn't be in reaction to something that's going on,
like you should all that regardless of what's going on
in rosie times or when things aren't looking so good,
you should have that emergency fund because then, so I'm
pushing back because if someone starts freaking out and they
start thinking, well, I can't invest money if only bad
times or ahead, they're not gonna they're not gonna be
willing to dollar cost average and they're gonna pull back
a little bit. They're gonna sit on cash, potentially miss
(02:31):
out on obviously what that would have done had that
been invested in experienced that compounding.
Speaker 3 (02:35):
Yeah, yeah, I agree, And I think some people out
for doom spending when their debt is feeling out of control,
like with the logic of why not because I'm like
digging myself into a bigger.
Speaker 4 (02:44):
Holes, like throwing the talent essentially, I think that's exactly.
Speaker 3 (02:47):
What happens here, right, And but the truth is, those
additional purchases will catch up to you and it makes
the eventual payoff process even more painful. And by the way,
if you're in that position, you're like, man, my debt
is overwhelming. There are nonprofits that can help you, like
Money Management International. It's worth talking to a budget counselor there.
We've also met. We've talked about how tariffs are likely
to impact prices, and so I think that's part of
(03:08):
why people are doom spending. They're seeing kind of tariff
implementation economic uncertainty, and they're saying, man, I need to
front loads and purchases because prices are about to go up.
Speaker 4 (03:17):
That's what I'm reading about. And you know, Trump.
Speaker 3 (03:19):
Called the tariffs against Mexico and Canada off last month,
but they wouldn't to affect this Tuesday, and then got
pulled back in part.
Speaker 1 (03:25):
They're making more organizations as well, like the US Mexico
Canada agreements.
Speaker 3 (03:30):
And then its products, some agricultural products right are going
to also be taken off the chopping block.
Speaker 4 (03:36):
Oh man, it's so confusing, and you're like, dang it.
I bought a bunch of stuff on Tuesday.
Speaker 1 (03:40):
I stockpiled avocados because I thought the prices were going
to go up, right, And the truth is, prices are
going to arise on a lot of goods if tariffs
stay around for long.
Speaker 4 (03:50):
But will they stay around, We don't know. We don't
know what's gonna happen.
Speaker 3 (03:53):
With big question, so much sea sawing happening, and I
think no matter what, it still doesn't mean that you
should front load spending, especially especially if it means taking
on more debt. I think that increases anxiety and that
leads to a doom spending doom loop, and that's that's
what I foresee for a lot of people. If if
you partake in doom spending, it's it's likely to unravel
things instead of help.
Speaker 1 (04:13):
Yeah, we'll definitely be keeping up with a terrific conversation
how it impacts our money, because they could end up
sparking stagflation, which is a combination of weak economic growth
and inflation. And here we go, so one economists use
the adorable term mini stag session. It's so much more
palatable many stag session. We're not fans of making predictions, man,
(04:34):
we try not to do it. We're not changing our
investing strategy, we're not changing how what it is.
Speaker 4 (04:38):
That we're buying.
Speaker 1 (04:39):
But even if stagflation doesn't materialize, uncertainty it's one of
the worst words, I think for business owners and operators,
and I think that's a big part of why. I mean,
that's why we're seeing fluctuations like crazy in the market right.
Speaker 4 (04:52):
Now, intra day fluctuations that are they've been insane. Yeah,
they've been insane.
Speaker 1 (04:56):
And hopefully you aren't glued to the headlines and adjusting
not only how it is that you're spending on a
day to day basis, but we certainly don't want to
see you change how it is that you're investing your
dollars because, honestly, in the I mean personally, I think
everything is gonna be fine, not because anyone is brilliant
or anything. I don't know, Like we've kind of had
this conversation, but and this is where I don't know.
(05:16):
Maybe folks are gonna say I'm more of a conspiracy theorist, Joel,
but I've shared this with you. Who was sitting there
on the podium with Trump when he got inaugurated like
two months ago? Oh, the tech, all the guards, you
saw Tim Cook or Tim Apple?
Speaker 2 (05:28):
Right?
Speaker 1 (05:29):
Of course Elon was there, but like Bezos, who else
was there? Sundar from Google Zuckerberg he was there as well. Right,
these are the biggest companies in the US, are you
telling me? And so because that they were there there's
no way that that was their first conversation that they've
had with Trump or with the current administration, with the
White House. I think, man, that there has got to
be back channels open where they're having conversations with these
(05:51):
big companies and saying, hey, all right, we gotta play tough,
we gotta play hardball. We're gonna we're gonna threaten these terrorists.
Don't freak out. Everyone else is gonna be freaking out.
Just keep on doing what you've always done. Obviously, this
is a more generous interpretation of what's being going on.
Speaker 3 (06:04):
I don't even know if that's generous though, because then
there's all these other small businesses. It's like, why you
linking up with a lot of richest America, the richest
dudes who run the biggest companies, when all the other
small businesses that uncertainly impacts them a lot more than
it impacts the big companies, who often have ways of
side stepping the tariffs straining.
Speaker 1 (06:21):
You know, I'm hilding that. I think it's perceived uncertainty
as opposed to actual uncertainty. That's I mean, And this
is why we you know, big companies, why they have
earnings reports right, and small businesses pay attention to that.
It sets the tone for what's going on in the economy.
That's a generous optimistic interpretation. If Trump actually thinks that
terrorists are going to be good for our country, then
I think he's an idiot, because all economists have pointed
(06:43):
to the fact that this is not going to make
our country wealthier.
Speaker 4 (06:46):
Yeah. I couldn't agree more.
Speaker 3 (06:47):
All right, we've got more to get to On today's
show PAF I am six forty live everywhere on.
Speaker 4 (06:53):
The iHeartRadio app. This is how to Money. I'm Joe
Larscard and I am Matt Altmix.
Speaker 1 (06:59):
If you're on Facebook and you want to join a
group of like minded folks who have money questions and insight,
please go ahead and join the how to Money Facebook group.
Let's get to our next listener question. This is from
a listener who is considering a number of different options
to make sure that he is properly prepared for retirement.
Speaker 5 (07:18):
Hi, Matt and Joel, this is Greg from Los Angeles.
I really enjoy the show and all the knowledge and
insight that it provides, and I keep telling my friends
and coworkers about it to help give them a better
financial footing. I am a public servant, so I am
(07:39):
contributing towards a pension when I retire. Over the last
couple of years, I have been maxing out my roth IRA.
My question is I am in the beneficial position of
potentially earning more than one hundred and forty thousand in
the next couple of years. And I wanted to get
your thoughts about, you know, contributing to my personal wroth.
(08:03):
Should I continue to do the roth ira and once
I get to that limit just do a backdoor wroth
or what I'm finding from my employer is that we
have the ability to contribute to a savings account, which
is a four oh one K, and I'm wondering if
I should just start that post tax and roll over
(08:26):
my current roth IRA. I am in the process of
also my pension. I contribute to the four point fifty
seven offered by my employer, and this four oh one
K would then be a third bucket to fill either
pre or post tax. Appreciate all your time and consideration
(08:47):
and wishing you the best in coffee and beer.
Speaker 3 (08:51):
Oh Greg. Thank you first of all for spreading the
word for telling other people about the show.
Speaker 4 (08:55):
We really appreciate it.
Speaker 3 (08:56):
If every single one out there listening told one friend,
just told one friend, oroscolytized a little bit about HTM,
we double our listenership, Joel. That's how it works, Matt,
So thank you, Greag. Appreciate that. And by the way,
great coffee and beer, they really are inexpensive ways in moderate,
in moderation to bring some extra joy of your life,
even it.
Speaker 1 (09:15):
Can be an expensive way sometimes the like we say
it's our craft beer equivalent for a reason, we don't.
We're not spending the bare minimum on our beer jowel. No,
and you're not on your coffee either. In particular, I've
actually I've kind of changed out.
Speaker 4 (09:28):
I'm back a little bit.
Speaker 5 (09:29):
Yeah.
Speaker 3 (09:29):
Is that partly because coffee bean prices have gone up
so much that the expensive stuff. Have you personally experienced
that if you're just a look at what they call
I mean interesting, I shop mostly at costco, but yes,
I look at the price.
Speaker 4 (09:42):
What if it's impacting the cheaper beans in because the
nicer stuff.
Speaker 1 (09:45):
So okay, So first of all, personally, all right, try
not to let this be a massive tangent, but I've
personally dialed back my coffee consumption I don't know if
you've noticed, but I don't make coffee here in the
office anymore.
Speaker 4 (09:55):
Now that you pointed out, yes, no, I didn't think
about that.
Speaker 1 (09:57):
It's been a couple months and I realized, you know what,
I feel like my coffee drinking is gotten out of
hand and not from like a health standpoint. I could
totally fall asleep at night, just fine, but I realized
it was something I wasn't needing. I guess, I don't know.
It felt like it was getting just a bit out
of hand in particular when I was and I was
just buying some of the nicer stuff, like some of
the bags I was buying. Man, it's like a ten
ounce bag or like a twelve ounce bag for like
twenty five bucks and stuff.
Speaker 4 (10:18):
Of what I'm talking about.
Speaker 1 (10:19):
We're fancy coffee if you're looking at like over two
dollars an ounce. But I think Kate and I found
the sweet spot specifically, if folks want to know countercultures,
big trouble.
Speaker 4 (10:28):
They sell it at Whole.
Speaker 1 (10:29):
Foods, which is on our path to school, uh huh
for carpool, and oftentimes you can go in there and
you get it on sale, and like when it's on sale.
I'm paying less than a dollar an ounce, okay, and
this is like solid, really tasty stuff that we're drinking
on the regular. I still go out and splurriage and
will get like a bag of the nice stuff, or
someone gives me some really good stuff, which you like
(10:51):
to do. Yeah, one of our local roasters. That's phenomenal.
I'm still drinking.
Speaker 4 (10:54):
Those bags are expensive.
Speaker 3 (10:55):
I'm still drinking the Kirklan signature, but I don't know
any better, and I kind of don't want to know better.
I'm like purposely blindfolding myself. That's to fancy coffee to
make sure that I don't spend too much.
Speaker 1 (11:04):
I'm trying to do that with wine. But the more
wine I drink, I'm like, oh that's now I know.
I don't even know how to say it.
Speaker 4 (11:10):
Rio hoo. Yeah, it's like a Spanish wine. Yeah. I
had like one of those recently and I was like, oh,
this is I like this.
Speaker 3 (11:17):
Okay, so sorry, we'll stop this tangent very soon, but
I'm going to pick you up a bottle. I haven't
tried the Kirkland signature version of the Rio. I wonder
if it's any Oh, we'll give it a try. Yeah, okay,
not to get.
Speaker 4 (11:26):
It to go.
Speaker 3 (11:26):
But let's get to Greg's question, Matt, because that's what
we do on the show is answer questions.
Speaker 1 (11:31):
At some point we will get to your question. Right,
Can we talk about all the things that we want
to talk about?
Speaker 4 (11:36):
That's right?
Speaker 1 (11:36):
This is our show, after all, Greg, not yours. Hey,
he's the one that brought up coffee and arrus. I'm
assuming he's a fan as well.
Speaker 3 (11:42):
If you didn't want that tangent, you shouldn't have asked
for it. Well, congrats on having a pension available to you.
That's that's becoming more rare obviously. But what should you do, Matt,
when you're making the big bucks and you can't contribute
directly to a roth Ira. That is a question that
is actually a good question to have. It's a good
problem to have because it means you're moving up the
income spectrum. And some people they think of that as
(12:03):
a sad day, but I think of it as like
a happy day because it means you're crushing it when
it comes to the money you're making. I would rather
make more and lose access then make less and still
be wroth eligible.
Speaker 1 (12:14):
Like if I had to. You know, had to pull
the lever on that choice. It's like option A or
option B, which would you choose?
Speaker 4 (12:20):
Is okay? Well, I hate that I can contribute directly
to a wrath, but it means good things, right.
Speaker 3 (12:25):
And you know Greg must be single because the income
limit for joint fowlers is like two hundred and thirty
thousand dollars. He cates one hundred and forty six thousand
dollars for single individuals. But as you crust that threshold,
my first suggestion would be to invest more overall dollars,
which could help you remain WROTH eligible. One thinks the
solution more people should consider him totally. Yeah, So if
(12:46):
Greg were to start contributing to his traditional four one
k so not his WROTH, if that's an option that's
available to him, wroth war one K no, no, no,
go with a traditional four win k and that could
reduce your modified adjusted gross income. I'll allowing you to
keep contributing directly to a WROTH, meaning that there are
going to be no extra hoops for you to jump through. Basically,
(13:07):
if you're right on that line, every dollar you contribute
to a pre tax account, it's going to help you
to lower that modified adjusted gross income, potentially keeping you
under that income threshold, which can mean you can keep
talking money into your roth IRA light clockwork just like
you always have, and then you know if your income
does go up substantially over time or if you aren't
keen on investing more money.
Speaker 1 (13:29):
There's other ways to pull this off as well, which
you've touched on and Greg, you know, higher earners such
as yourself can take advantage of what's known as the
backdoor WROTH. So that's something else that's worth mentioning. It's
not another account some people think that it is. It's
a process that you go through that involves basically extra hoops.
And so what happens is you contribute money to your
traditional IRA and then you convert those dollars into your
(13:50):
wroth IRA instead of making that direct contribution to the WROTH.
And what you need to know is you're not claiming
any sort of tax deduction for that initial contratribution to
your traditional IRA. You'll make what's known as a non
deductible contribution. Read upon the details. We've got a piece
on this up on our website. We'll link to it
in the show notes. But the backdoor WROTH can be
(14:11):
the perfect way for you to basically keep contributing to
that account if your income continues to rise. And we
love that you're trying to continue to put in after
tax dollars into investments, because yeah, I think having more
WROTH dollars Matt is just going to mean more tax
flexibility for Greg when he gets into his retirement years,
(14:32):
he's going to have kind of the ability to dial
in his tax rate if he has two bucks to
pull from. And the last strategy that Greg mentioned contributing
to his four one K and then converting those funds
to a roth IRA. That's what's known as a mega
backdoor WROTH, which I know is kind of ridiculous, gets
a bit confusing, But if you've got even more money
(14:54):
that you want to invest on top of maxing out
your roth IRA, but contributing to that would allow you
to invest even more dollars there towards your tax advantaged
wrath IRA.
Speaker 4 (15:02):
So and with him, he's talking about all these.
Speaker 1 (15:05):
Options that he's got available to him, right, Like he's
got the pension, he's got the roth iray that he's
been maxim out every year. But then on top of
that contributing to your employer plan as well. That's I
feel like he's entering. Greg's entering beast mode sort of territory.
He's like or god mode.
Speaker 4 (15:20):
You remember doom oh yeah, back in the day.
Speaker 3 (15:24):
It's an embarrassment of riches essentially that Greg has here,
and I think it might make sense to talk to
a financial advisor. We have talked about two different places
that we suggest people go find an advisor. There's Hellonectarine
dot com and then there's Domain money. Those are both
two great places to turn. So if you're like, I
just got a few questions about this, that might be
a great place to go. Especially again, you don't want
(15:47):
to let the tax tail wag the dog be. You
do want to make sure you're making a smart decision
for your future and for your current and future taxes.
So it might make sense to pay somebody for a
couple hours of their time to kind of dice details
here totally.
Speaker 1 (16:01):
So on the note of planning for your future, one well,
I guess one caveat too. It's always great to plan
for your future. But Greg, I wouldn't spend too much
time on this as well, because he so he said
that he in the future years might be getting close to,
like earning close to one forty And like you mentioned,
one forty six is the cutoff for Rotha raight, but
that was actually for last year, for twenty twenty four,
(16:21):
for twenty twenty five, it's one hundred and fifty thousand dollars.
And so what I'm pointing out here is that by
the time you hit that, you get closer to one
forty Greg Like, there's a good chance that threshold is
moved even higher. And I'm not saying that you don't
have the ability to like catch that threshold at some point.
More power to you, man, Like, I think you can
totally do that, that's the goal. But I'm just highlighting
the fact that you're not quite there, and they're going
(16:44):
to continue to raise that with inflation.
Speaker 4 (16:46):
I mean, something else to keep in mind.
Speaker 3 (16:48):
Just depends on how quickly that income escalates. All Right,
We've got actually more to get to.
Speaker 4 (16:52):
On today's show, KFI AM six forty.
Speaker 1 (16:55):
You're listening to how to Money on demand on the
iHeartRadio app. Thof I AM sixty live everywhere on the
iHeartRadio app.
Speaker 4 (17:04):
This is how some Money I am that.
Speaker 3 (17:06):
Alt mixed and I am Joel Larsgard, and we're glad
to have you along for the show today. By the way,
if you're looking for the right credit card for your wallet,
well you want to be able to use it responsibly.
But if you do that, if you pay your credit
card on time and in full every single month, well
check out our credit card tool. You can find that
up on the website at howtomoney dot com.
Speaker 1 (17:27):
So let's keep your money and government train rolling for
a bit more here, Joel, there's a new position that
is being created, the Affordabilities Are. I've already sent in
my application, is there, it's coming soon. Do you think
I'll get the job? Matt, only if you promise to
appoint me on the board, because they we're putting together
a board. But we'll see how this shakes My minis
are It's a nice right next to me. It's an
(17:48):
interesting move given the twelve hundred dollars in average on
annual spending impact that Terris are predicted to have on
US households. But this Affordability Zar will likely to be
tasked with trying to reduce prices on everything from homes
to cars, groceries, electronics as well I'll do my best, Folks,
I am highly skeptical. You don't think I can do
(18:09):
it of this, not of you, but just of this
government intervention. It seems insane. I do think like, yeah,
maybe there could be some wiggle room right in the
healthcare space to encourage or to mandate some pricing transparency
which could help consumers shop in a more informed way.
We just were talking about the high cost of college.
The only thing that is outpaced college when it comes
(18:30):
to outpacing that the average rate of inflation is medical spending.
Speaker 4 (18:35):
So I think that could be good.
Speaker 1 (18:36):
But either way, keep listening to how to money and
be your own affordabilities are folks. No one is going
to look after your hard earned dollars like you. This
seems completely unnecessary to It's a creation of another perhaps
government organization to counter what another part of the government
is doing.
Speaker 4 (18:53):
Seems highly inefficient. I disapprove.
Speaker 3 (18:55):
Yeah well, and yeah that in intervention into markets to
try and stemy cost increases, both sides of the aisle
have kind of gone. We talked about that with attempts
to raid in what we're being called greedflation, and how
we didn't think that was a good idea, and similarly,
you're trying to go in there and force companies to
cost cut prices. I think no matter from which side
(19:18):
of the political fence you're sitting on, it's not gonna
work out well. And I was like interference to me, Yeah,
the market is going to do better at regulating that,
and we just have to pay attention and save the
best we can.
Speaker 4 (19:31):
We talked about that a lot of the show here,
don't we hashtag free the market like that?
Speaker 3 (19:35):
People still using hashtags these days. Yeah, they're gonna use
that one. Okay, Well. President Trump also seems to be
keen on starting a national cryptocurrency reserve.
Speaker 4 (19:44):
Hooray for taxpayers.
Speaker 3 (19:46):
I say that tongue in cheek because it's another policy
we're just not keen on. He's not talking about the
United States owning just bitcoin, but adding in some smaller
and some lesser known cryptocurrencies too, fortunately not his own
meme coin. Although details on what this national crypto reserve
is going to look like, those details are thin, and
(20:07):
I think the goal is at least important to try
and do what Norway has done. They have a sovereign
wealth fund that allows the country to prosper as markets
perform well. Norway has crushed it when it comes to investing.
They're almost as good as Nancy Pelosi, Matt. But Norway
doesn't have the debt problems that we have, and so
(20:27):
we have significant debt. So instead of paying down debt,
we would be investing that money instead to pay down debt.
After we've seen our national cryptocurrency wallet, So I guess
that's the plan. Yeah, that's the way. It's at least
been positive. But as front of the show, Noah Smith,
who we had on recently said, he said, this is
going to require either raising taxes on American people or
(20:49):
making the US government go deeper into debt at a
time when interest payments are already spiraling out of control.
I just I just don't see a reason for us
as taxpayers to be on the hook for a government
run crypto endeavor.
Speaker 1 (21:03):
I think it's an okay idea because if you think it,
like there's just so much ridiculous stuff that we are
spending money on it, Like, would it be the worst
thing for the US to have its own crypto wallet?
I don't know, Like I think about it, like AI,
we don't totally know what the implications of AI is
going to be and the government is doing the best
it can to encourage the private development of AI, specifically
(21:25):
to compete with China.
Speaker 4 (21:26):
Right.
Speaker 1 (21:26):
At least that creates jobs, a lot of jobs, that
is true, But bottom line, we don't know exactly how
that's going to shake out and what that's going to
look like off in the future.
Speaker 4 (21:33):
That's kind of how I feel about bitcoin.
Speaker 3 (21:35):
I like the way coin, but what about XRP and
Solana and these other I definitely.
Speaker 1 (21:40):
Can't get behind those at least. Yeah, Trump's mean coin
wasn't a part of a part of the announced reserve,
But I guess I just see the potential downsides of
the US not having a bitcoin reserve being greater than
had we dump some money into it. Okay, and who
the heck knows what's going to happen. But if like
it hits one million by twenty thirty or twenty thirty five,
(22:01):
like that's something.
Speaker 4 (22:02):
These are predictions that are being made.
Speaker 1 (22:03):
We have a friend, Joel, and he recently shared that,
and he wasn't he didn't like lay all his cards
on the table, but he basically pointed out it was
very easy to gather that from a small investment like
back in twenty seventeen in bitcoin, like anywhere between like
a twenty thousand dollars and a fifty thousand dollars investment.
That his bitcoin is now worth between two and eight
(22:24):
million dollars. That's not chump change. And so you multiply
that across something like what the US might be able
to do often in the future.
Speaker 4 (22:31):
It's just something dick And said.
Speaker 1 (22:31):
I don't think it's the dumbest idea, especially given the
vast amounts of money that the US is already spending.
I guess I'm just a bit more neutral on the
crypto reserve. Yeah, I'm less neutral specifically bitcoin, I'll say that.
Speaker 4 (22:43):
Yeah, And if it was bitcoin in particular, do you
feel differently? If it was only bitcoin, I would feel
little differently.
Speaker 3 (22:47):
I still don't think it's necessarily a smart move by
our federal government. All right, Hey, we got more money
saving information to get to.
Speaker 1 (22:53):
From a five AM, six forty live everywhere on the
iHeartRadio app.
Speaker 3 (22:58):
This is how to Money. I am Matt and I'm
Joel Larscard. Don't forget to sign up for the how
to Money newsletter. You can find that up at how
Tomoney dot Com.
Speaker 1 (23:05):
Slash newsletter, and of course now we've got the Facebook
Question of the week, and this week it's from Nathan,
and he asked, I was wondering if anyone had tips
on booking flights and hotel? Are there sites that are good?
Should I book them together or separately? Should I book
directly with the hotel or with prices I see on.
Speaker 4 (23:22):
Other sites if they are cheaper? What do you think, Joel,
all of the above.
Speaker 3 (23:27):
That's a good question. There's a lot to talk about here.
We'll do our best to offer a brief but helpful answer.
Just don't travel. Book nothing. If you want to say
the most amount of money right, stay home. If you
want to save you more, live in your mom's basement.
That is going to be the best way to have
that ninety percent savings rate that everyone's shooting FORMATT.
Speaker 1 (23:44):
But occasionally buy some groceries for the house. Come on, man,
you don't want to be a total leech, otherwise she's
gonna kick you out. Well, we are all about traveling
and saving money on travel. Maybe we should just mention
a few of our favorite sites MATT for travel and
flights specifically, it used to be this combo of Google
Flights in Southwest, but now think the good Lord above.
Southwest flights are included in the Google results, so it's
(24:06):
a one stop shop. You can set up fair alerts,
which is clutch, and I don't know if you need
any other sites for booking besides maybe a Going membership
which used to be known as Scott's Cheap Flights if
you are a flexible travel NERD. I think Going is
great because they're delivering those sweet deals to your inbox
(24:27):
and you might be like, wait a second Germany for
three hundred and eighty two dollars. I'm in I didn't
even realize I.
Speaker 3 (24:33):
Could get there that cheap, And that's what Scott's Chief
Flights does so well. If you just take one international
flight a year based on their recommendations, you easily more
than pay for the membership fee. I think Skyscanner is
another solid site.
Speaker 4 (24:46):
But I don't know.
Speaker 3 (24:47):
I think that combo of Google Flights, Southwest, Scott's Chief Flights,
if you're just using those three resources, I think you
can get mostly where you want to go.
Speaker 4 (24:56):
Yeah, and that's typically the most expensive.
Speaker 3 (24:59):
Part of But one other thing on Google Flights is
setting fair alerts. So when you're like, here's where I
want to go. Make sure you set that fair alert
and look at those. You don't have to keep checking
on it every time. And Google even tells you, hey, actually,
right now, this is like an average time to buy,
or hey, this is a really good price. You should
book now, And that's always helpful. That helps me know
when to pounce.
Speaker 1 (25:18):
Yeah, by make it happen, be done with it. As
far as hotels, though, hot Wire price Line they're great.
Don't forget about Airbnb. Of course, we're always big fans
of them, But if you really want a hotel, we
like those third party sites, especially if you're willing to
book a hotel room without knowing specifically where you're staying,
Like if you don't really care about the name of
(25:38):
the place and you just want like a star rating, right,
like a certain quality, certain caliber of hotel, that's totally the.
Speaker 4 (25:46):
Way to go.
Speaker 1 (25:47):
The hot Wire hot rates that could give you an
incredibly low price. Price Line, they've got the express deals,
and I think that that can be a great way
to score a deal. And these sites used to have
the best deal the majority of the time, but things
have changed recently. Many of the hotels that you see
listed on these actual websites. They've kind of wised up,
(26:08):
and so if you see one that you like, look
up pricing directly on their website, and what you can do.
You can actually give them a call, which very few
folks are willing to do these days. But if you
call them up, there's a good chance that they'll match
or even be a deal that you're seeing elsewhere. And
then on top of that, you typically will get a
better cancelation policy as well. By booking directly with hotel
(26:30):
versus one of these third party sites non refundable. It
can be worth it if you're getting like the absolute
sickest deal, but if not, you know, I like the
idea of keeping your options open just in case you
want to change your mind or something else comes up
and you want to pounce over there instead of over here.
Speaker 3 (26:45):
One of the things that I think that I've noticed, Matt,
we're trying to book through hot wire or price line
on occasion is man the deal the nightly rate looks
like it's way better than maybe what's offered through the
same hotel book booking directly on their site. When you
click all the way through and you look at the
taxes and fees, fees, they're much more expensive on some
of these third party travel sites that talk about helping
(27:08):
you finding the best deal, and so you're like, at
the end of the day, I'm not really saving much money,
and yeah, the cancelation policy is way crummier, and actually
maybe I'm paying more like going through one of these
third party sites, think going directly through the hotel.
Speaker 4 (27:23):
That did not used to be the case.
Speaker 3 (27:24):
It felt like you could almost always get a better
deal on a third party site. That just feels like
the era that hot Wire and price line when they
had the monopoly on the best prices. That's not really
where we're at anymore. It's not like it used to be.
Speaker 1 (27:36):
Yeah, it's worth it to have another Safari or Firefox,
not Firefox. What is it Chrome Browser open and doing
the command till day to be able to Firefox. Firefox
is what the people still use that. I'm sure there's
some Firefox users out there. But also, hey, we almost
forgot about this costco travel. Don't forget about that, because
you got to mention that depending on the type of
(27:56):
trip that you're taking, you might find better deals on
all sorts of like in particular, like the all inclusive.
Speaker 4 (28:02):
Style travel packages.
Speaker 1 (28:04):
And that's particularly true for like more exotic destinations like Cleveland,
not Cleveland, like Hawaii, like the Caribbean, And as always,
the number one way to get a great travel deal
is just to be flexible, not only on the dates
that you're looking to travel, but also the location. I
think the best way to think about going on a
trip is just to be like, at some point in
(28:26):
this season, I want.
Speaker 4 (28:28):
To take a break.
Speaker 1 (28:29):
Yeah, and then man, the world's your oyster and you're
gonna absolutely get the best deal. And then the Google
Flights Explore feature is gonna be awesome for that. You
might get crazy cheap flights too, in awesome place that
wasn't even on your radar, just because you clicked around
some you were like doing a little bit exploring, see
what's out there, Look what the deals are, And it
doesn't take long before you're like, guess I'm gonna go
to Mongolia.
Speaker 2 (28:50):
Sure?
Speaker 4 (28:50):
Why not?
Speaker 3 (28:51):
Didn't realize you get there for two to eighty round trip.
That's yeah, that's the cool thing. When you click the
Explore feature, you might just be made aware of insanely
low prices to ast nation that you hadn't even thought about,
and it might be guess what, especially if we're talking
about Europe, a train ride away from the place you
really want to go, and so your leg so.
Speaker 4 (29:08):
Sounds like fun.
Speaker 3 (29:08):
Great, let me fly into Milan and then I'll still
get to hang out in Tuscany because the flight to
Milan was way cheaper're describing my travel back in gosh
when it was two thousand and three.
Speaker 4 (29:18):
Jowel, oh, did you do that exactly? Terrary?
Speaker 1 (29:20):
We flew into Milan. Okay, we didn't. We went took
a It was like a really long train ride.
Speaker 4 (29:25):
This is one of my first Yeah, yeah, this one
was rough.
Speaker 3 (29:32):
Well, especially when you're younger, you got extra free time. Yeah,
we're willing to do it to save the money. We
totally did that.
Speaker 1 (29:38):
And here is a little piece of advice that Nathan
isn't asking, but consider driving because especially if you have
a fam can't drive them alone. You can't drive them alone.
But like I mean, consider something a little bit more
local instead of going abroad. Everyone thinks about something more exotic,
but there's a lot of amazing stuff here in the
United States. And I know, especially with kids when they
can't fully appreciate all that's out there. Plus they're also
not appreciating how much it costs to fly in a plane,
(30:00):
the ability to pile everybody in a car, and to
go see the mountains of West Virginia before we go
see the mountains in the Alps.
Speaker 3 (30:07):
Says the guy who scoffed at my Cleveland suggestion.
Speaker 1 (30:09):
Hey, I'm going to hit up Cleveland. Does that point,
but just haven't been there one of these days. Yeah,
so something to consider as well. 'm at one more
quick Facebook question. This one's from an anonymous poster. They said,
frugaler cheap unplugging my EV when peak hours hit and
plugging back in after seven pm when I'm home and
don't need to go anywhere, Noe rainer one hundred percent
proval Right. I'd be curious to know the kill at
(30:30):
per hour price difference here, but often we're talking about
getting that electricity for less than half of the price
of full peak costs. I don't see why you'd pay
extra if there's an easy way to avoid it, Matt,
I think for this poster too, I would check with
your electricity provider to see if there's an even better
plan that you can be on as an EV owner,
at least where we live, the power companies offer something
(30:51):
that's known as a super off peak rate. Oh yeah,
and so this rate is between eleven PM and seven am.
It's only two point two cents per kill AWOT hour,
which is like a fraction of what it costs typically
to get electricity. I think on peak is thirty yeah,
and so literally it's fifteen times more affordable crazy time.
Speaker 4 (31:08):
That's insane.
Speaker 3 (31:09):
So if you're an EV owner in particularly, it's worth
considering think about how much something like that could save you,
especially especially if you're the kind of person who's willing
to I don't know, maybe do your start your washer
and your dryer at night before you go to bed
to or early in the morning dishwasher. Also, if you're
using those appliances too during those hours and charging your EV,
I think it's a no brainer to get that lower
(31:30):
rate totally.
Speaker 1 (31:30):
And ultimately the biggest win is that you're not charging
while you're out and about on the road, because if
your unwillingness to pay peak prices meant that you forgot
to charge your car at home and then you had
to stop at is It charge point. Though some of
the different stations, you're gonna be paying a whole lot
more like five.
Speaker 4 (31:48):
To seven times more.
Speaker 1 (31:49):
So the more you can charge at home, even if
it's not the most optimized time, the more money that
you're going to save. This might be the last time
I share the story, but when we were traveling in Colorado,
or rented a test on Turo wanting to get a
feel for what it's like to drive at Tesla and
have an EV. What that meant, though, is that we
charged were charging at the Tesla superchargers, and I tracked
my charges religiously and the cost was pretty much exactly
(32:14):
the same as had we rented a traditional internal combustion
engine based on the average price per gallon there in Colorado,
times the number of miles that we drove, And so
I fast you and you're constantly paying top tier charging prices.
You're not doing this to save money. You're doing this
for lifestyle.
Speaker 3 (32:31):
The money saving benefits of an EV come when you
charge at home, and they can be amplified if you
get one of those off super off.
Speaker 1 (32:36):
Peak rates or if you charge at work. Oh yeah,
more folks have when I had listen, it's a benefit.
Oh yeah, you did that, So I try.
Speaker 4 (32:45):
I would.
Speaker 3 (32:46):
They had one hundred and twenty volt outlets and I
would plug in when I got to work. But eventually
they installed real charging stations and they covered up all
the one twenty volt. You know, I'm true frugal enough.
I would have kept charging at the one twenty volt
even though it was slower. I just charged it home.
Then it just changed my habits.
Speaker 1 (33:02):
The more employers are even offering that as a perk,
where it's just like, oh, yeah, we got level two
chargers here, like they are intentionally promotalling level two the
faster chargers for free.
Speaker 3 (33:10):
Yeah, totally okay. Thank you as always for listening to
the show. We appreciate your time and attention. You can
always find more money saving information up on our website
at howtomoney dot com. We'll see you back here next week.
You're listening to how to Money on KFI AM six forty.
You've been listening to how to Money with Joel Larscart
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