January 26, 2025 • 33 mins
How will the Trump presidency impact your personal finances? Matt and Joel have some thoughts.
Ask HTM: A listener wants to know if he needs to get into real estate investing in order to be diversified.
Marketwatch says that many folks should consider amassing an even larger emergency fund. But that's a tall order for most folks!
Ask HTM: How to get rid of an RV without crushing your personal finances
Ask HTM: A listener wants to know if he needs to get into real estate investing in order to be diversified.
Marketwatch says that many folks should consider amassing an even larger emergency fund. But that's a tall order for most folks!
Ask HTM: How to get rid of an RV without crushing your personal finances
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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?
Joel and Matt have you covered? This is how to
Money with Joel Larsgard and Matt.
Speaker 3 (00:18):
Altmes KF I am sixty live.
Speaker 4 (00:49):
Everywhere on the iHeartRadio app. This is how to Money.
I am Matt Altmes.
Speaker 1 (00:52):
And I'm Joe Larsgard. Don't forget to sign up for
the how to Money newsletter. You can find that up
at how tomoney dot com slash newsletter.
Speaker 4 (00:59):
All Right, man, we saw I returned to the Oval
Office for President Trump, and I think a lot of
folks might be wondering how this might impact our economy
as a whole. How is this going to impact your
personal finances? That remains to be seen. There's always a
whole lot of talk and bluster when it comes to
President Trump. There's a litany of things that we can discuss.
For instance, the new twenty five percent teriffs against Canada
(01:21):
and Mexico that could be implemented as early as next week.
In terrorist they might serve a geopolitical purpose, but they
essentially act as a tax on consumers.
Speaker 1 (01:32):
And raising the price of everyday goods, right, whether it's
auto parts, food, the litany of things.
Speaker 4 (01:38):
It's counter to the free market and the ability for
companies to produce goods at the absolute lowest price. And
again I understand it from a geopolitical strategy standpoint, But
how this impacts Americans, we will see how broad those
terrorists are. That will also impact how we feel them.
But there certainly is a chance that inflation, which has
calmed it could potentially be stoked.
Speaker 5 (01:59):
By this post change.
Speaker 4 (02:00):
There were executive orders that could have an impact in
the coming months, like an attempt to curb building restrictions
in order to increase supply. How that actually will work
in reality? It's it's going to be hard to disserve.
Speaker 5 (02:13):
Sounds good on paper, but yeah, well yeah, how well
for that, yeah, because that's what we need.
Speaker 4 (02:17):
For instance, when it comes to housing, the largest line
item on everyone's monthly budget, more supply leads to lower prices.
Speaker 1 (02:23):
Building codes are often local. So how is some sort
of you know, yeah, and which is.
Speaker 4 (02:30):
Yeah, everyone who is a big fan of Trump, of course,
is praising the stroke of the pen, the phone call,
and the ability to make everyone's lives better here in
the States. But Dave Chappelle, he actually said it really
well on Saturday Night Live. He said, whether people voted
for you or not, everyone is counting on you good luck,
which I appreciate. Always count on Dave Chappelle to inject
(02:51):
a little bit of common sense into the discourse.
Speaker 5 (02:54):
Of the time.
Speaker 1 (02:54):
Yeah, I appreciate Dave, and that well said right, Well said,
we are we're hoping for the best. We always hope
for the best, part President, whether you've voted for them
or not, because we want the best for our country
and the three hundred and forty million people inside of it.
I'm sure we're gonna have a lot to talk about
in the coming months, Matt on the political front and
how the political regime change impacts are our finances, because
(03:15):
it will, it will have an impact, and hopefully we
will pay attention to the headlines that are actually going
to matter and the things that are actually going to happen,
because I'm sure so many media companies are like.
Speaker 5 (03:27):
Yeah, Stroves back in office because it gives them.
Speaker 4 (03:29):
Something to report, much like the craziness that oftentimes comes from.
Speaker 5 (03:33):
The tweets or truths or whatever it.
Speaker 1 (03:36):
Is that Trump is saying, and you and I will
attempt to our best to keep it a political and
focus on the money stuff. Indeed, one thing we have
to discuss is the meme coins that the President the
first Lady launched a head of the inauguration. It was
kind of a crazy stunt, right, and politics aside.
Speaker 5 (03:51):
It doesn't matter where you laying on the spectrum.
Speaker 1 (03:52):
This is ridiculous and we've kind of trash meme coins thoroughly,
and the cryptocurrency space we have, I think, given a
lot of caution in our assessment of cryptocurrency and what
kind of approach normal investors should have towards crypto. And
some folks did make money in this kind of mean
coin bonanza if they bought early, they bought that Trump
(04:13):
coin early, then the cash out quick. But this is
just another reminder that the mean coin space is rife
with grift. The majority of people lose money. And it's
interesting too, Matt, because the crypto space, I think they
were hoping that a Trump presidency would usher in vibes
of legitimacy, and there has been a lot of talk about,
you know, bitcoin in particular, having a National Bitcoin Strategic Reserve,
(04:37):
or something like that. Is that going to be a
boon to some of the more popular, more long standing cryptocurrencies.
Speaker 5 (04:43):
Maybe if it happens.
Speaker 1 (04:45):
Yeah, but just this little stunt, I guess hasn't really
aided in the legitimacy of crypto. It hasn't started off
in a good way. And the takeaway for individuals listening
is don't participate in the mean coin andanity no matter who.
Speaker 5 (05:02):
And I will say, be ready to lose your shirt.
Speaker 4 (05:04):
Yeah, and again this is I think this is an
a political statement, but this shouldn't be anything new for
folks who have like followed what it is that Trump
has done, Like this is like typical behavior for him, right,
Like more recently, it's like the branded it's the dumb
Lee Greenwood bibles that Trump is selling for.
Speaker 5 (05:20):
How much was he selling this for? But then like.
Speaker 4 (05:23):
The sneakers but then but even before he was president.
Speaker 5 (05:27):
Would you look great in by the way.
Speaker 4 (05:29):
Even before he was president, like the like the Trump
steaks and the vodka, like this is something that he does.
And so on one hand, it's just it's more of
the same. I will say, I was shocked to see
the pastor that gave one of the benedictions. At the
end of the inaugural address or whatever, he launched a
meme coin. Oh really, yes, that is incredibly disheartening, Like
(05:53):
like that makes me angry. This is like a pastor,
someone who's supposed to be forsaking worldly riches in a
self sacrificial way to serve other people, and man talk
about grit like that made me really upset when I
when I heard that. It just feels so counter to
what someone who is in ministry or someone who's a
pastor that they should be doing.
Speaker 1 (06:10):
Does this mean we're canceling the launch of our mean
coin that we have planned.
Speaker 5 (06:14):
No, no, no, we're not ministry. We can do it. We
can do it, Okay.
Speaker 4 (06:17):
Something else though that struck me was the mandate for
government workers to return to the office. Dude, working from home.
So twenty twenty, we're turning to the office rto. That's
the name of the game now. And I will say
there is evidence that working from home, at least at
the federal level, hasn't had great results. That is costing
the government therefore us as taxpayers billions of dollars.
Speaker 1 (06:40):
Yeah, there's a report issued kind of towards the end
of last year. I think from one of the Senator's
offices that headlined, you know just how much less productive
certain government agencies and certain individuals have been, and just
how costly that's become.
Speaker 4 (06:51):
Yeah, yeah, dude, we're talking especially like given all the
office space that is sitting empty, like real estate is
incredibly expensive. And similar to the companies to have issued
return to office orders, I think the government they may
not be crying you or river if you end up
quitting over this. It appears that increase efficiency at the
office and a trim or payroll are simultaneous goals. So
(07:12):
we think that the smartest employers out there, who are
looking to retain top notch talent, will opt.
Speaker 5 (07:18):
For more of a hybrid or more of a flex.
Speaker 4 (07:20):
Approach where they do trust their great employees to do
their job wherever they are. But I do think as
an employee you might have to make a difficult choice
if going back into the office, let's say five days
a week, if that's going to be too tough of
a pill to swallow. I think eventually it'll settle out
somewhere in the middle, because I think there had to
be this sort of hard correct right, like the pendulum
swung so far to one side, and now I think
(07:42):
it's almost having to swing hard in the other direction
in order to I don't know for employees, for employers
to communicate two employees that they're taking this a bit
more seriously, but I think it'll eventually settle somewhere in
the middle.
Speaker 1 (07:53):
Yeah, that's one hundred percent spot on. All right, We've
got actually more to get to on today's show.
Speaker 6 (07:58):
You're listening to how To Money with Joel Larsgard on
demand from KFI AM six boarding.
Speaker 4 (08:05):
By the way, you can always find more money saving
information over at howtomoney dot com.
Speaker 1 (08:10):
Matt, let's get to a question about diversification and is
stock market investing enough to get the job done.
Speaker 7 (08:17):
Hey Matt, Joel, my name is Mike and I've been
listening to your podcast for a few years now. Great content,
Love the fact that it's tailored to a wide audience.
Keep up the awesome work. The question today is about diversity.
The wife and I have focused on our careers and
our income, which is paid off in the long run.
We're also interested in financial independence and over the last
few years we've become really focused on our savings rate.
(08:40):
And I'll also add that we are currently in our
mid thirties and do not have any kids as of yet.
Right now we max out both the four oh one K,
the IRA, the HSAS, and after that we average four
thousand dollars per month to a brokerage account. And my
question is everyone keeps saying that real state it's a
way to supercharge your finances, but honestly, I see nothing
(09:04):
but hard work and high risks. We live in a
medium cost of living area, but there are no houses
around here that are actually cash flowing. I've talked to
a couple of real estate agents and the general advice
is that they're going for appreciation, which I think is
a bad bet. Is investing everything in a low cost
index fund. Enough, it's pure stocks, so if the market
(09:26):
slows down, obviously that's all we're banking on. What else
can we do to diversify this money? We save so
much and have so much in cash. I just don't
see the benefit in making life more complex with real
estate and rentals, But is ultimately a bad move to
only do low cost index funds and nothing else?
Speaker 5 (09:48):
Thanks guys, Oh, Joel, is it a bad move?
Speaker 4 (09:52):
I'm not sure if I would go that far, But
I am glad that Mike is asking this question.
Speaker 5 (09:57):
He's asking how.
Speaker 4 (09:58):
Much diversity is necessary to be a successful investor. And
this becomes even more pertinent the further along you get
in your progress towards financial independence, just because you know,
we're talking about a bigger sum of money as opposed
to someone who's like just getting started.
Speaker 2 (10:13):
Right.
Speaker 1 (10:13):
If you're all in with a hundred bucks, that's one thing.
If you're all in with a million bucks, that's another.
Speaker 5 (10:16):
Thing, exactly.
Speaker 4 (10:17):
And in Mike's case, it's not like he's all in
on Nvidia or anything like that. He's well diversified in
the stock market. But does he need to go beyond that?
That is his question.
Speaker 1 (10:30):
Yeah, And so Mike and his partner, they've been smart
to focus on their careers as like one of the
first thing he thinks he talked about. You know, some
people who are incredibly frugal can focus so hard on
saving and pinching pennies that they forget to invest in themselves.
I think it's really important to highlight that, Matt, because
you know, growing the pie is so much smarter than
just trying to eat a little bit less of that pie,
(10:51):
and that that is something that doesn't get focused on enough.
I don't think in the in the personal finance space,
what Mike and his his spouse have been able to
do with that bigger is admirable. You guys have made
a lot of progress towards financial independence at an incredibly
young age. But now the question arises, do you need
to expand your efforts to other asset classes, to investing
(11:12):
more widely? And I think Matt the at least simple
quick answer to that question is not really that those
low cost index funds really are enough for the vast
majority of people.
Speaker 5 (11:22):
Totally.
Speaker 4 (11:23):
I would give him a big old negative because if you,
let's say you are a savy real estate investor, you
are inclined in that direction. I think it can be
a way, in his words, to supercharge your finances. But
whether or not it will be for you as an
individual there, Mike, that depends on a ton of factors,
including the purchase price that depends on what you can
(11:43):
get in rent, and the fact that it takes a
whole lot of time to save up for that down
payment as well. It's I think it's hardest for a
lot of folks out there to stomach the idea of
buying a rental property when you know that you're going
to be losing money on it every single month, And.
Speaker 5 (11:55):
I raise my hand to that, Matt.
Speaker 1 (11:57):
It would be hard for me to stomach buying a
rental property right now, especially given I wouldn't do it
some of the dynamics and the fact, like, no, don't
sign me up for buying around property.
Speaker 5 (12:05):
What I'm gonna lose money.
Speaker 4 (12:06):
And so basically, like it feels like Mike is trying
to get us to talk him into getting into real
estate and I'm not going to do it, Mike, they
can't to us my arm, I still won't punch No,
I'm seriously because like he even highlighted the sort of
aspects that are going to make it more of a
negative experience for him, and instead, what I want to
do is, like one of the things Mike pointed out
(12:26):
is the fact that he is him and his wife
are interested in financial independence, is which is when your
investments are large enough that you can live off of
your investments as opposed to work. I think for a
lot of folks when they first find out about financial independence,
it can kind of become this all consuming projects.
Speaker 5 (12:43):
Yeah, you get the tractor beam on the desk star
and you can't. It's hard to escape it.
Speaker 4 (12:47):
Like you've taken the red pill in the matrix and
you know the truth, and so now you're thinking, oh,
everything else is just an illusion. It's the it's the warm,
cozy security blanket that you get with a blue pill.
Speaker 5 (12:56):
No Mike saying no to the blue pill.
Speaker 4 (12:58):
He's like, Okay, I know what I'm capable of, or
I know what is capable once you've invested enough money.
But instead, and so, Mike, if this doesn't apply to you,
then just dismiss everything that I'm saying here. But this
was me, Like I am confessing here that when I
first learned about this, I was consumed and pretty infatuated
with the idea of becoming financially independent.
Speaker 1 (13:19):
But it's kind of hard not to be because it
does alter the way you view the world to a degree.
Speaker 5 (13:23):
It's really helpful.
Speaker 4 (13:24):
But what I would challenge you to do, Mike, is
to think through some other aspects of life that make
life more robust and enriching, like and that could be
as something as small as just thinking through some hobbies
that you enjoy, like, Okay, how can I incorporate those
into my life a little bit more. But I also
noticed that Mike said that they aren't or that they
don't have any kids, at least not yet, which tells
(13:46):
me that maybe this is a goal of theirs. And
so I would say, hey, I want to hear you
talking more about making that a priority, if that's something
that you want to do, because personally, I found that
growing my family and having kids, man like that is
like one of the biggest most rewarding things my entire life.
Speaker 5 (14:00):
Man, the joys of parenthood.
Speaker 4 (14:02):
And oftentimes when you're like or, we can get that
next promotion and then we could stock away this much
more at work, which leads to being able to attain
that magic number of being financially independent even more so. Well,
I just want you to not necessarily optimize from a
financial standpoint, and to expand your scope a little bit
and to look at some of the other things in life.
(14:23):
And the way I'm hearing you talk about real estate,
you're not thinking at all about what it is that
you want to spend your time doing. It's about the
financial or the return on your investment. And you might
see we're like I was just saying, you might see
an outsize return on your investment, but certainly if it's
a not something you want to do anyway, and b
if investors in your area are only counting on appreciation, well, man, personally,
(14:45):
I don't think it would be worth it.
Speaker 1 (14:46):
Yeah, and so so much of how we answer this
question depends on the person asking it and how they're
asking it, because Matt, there are some people who are
more inclined to invest in real estate. They're more just
naturally interested, and maybe their skill set leads to them
being better real estate investors. What Mike said was all
I see is the hard work and the high risks. Yes,
And when you see that, then I think taking on
(15:07):
a part time job to hope on some appreciation at
the end of the day, that's a bad idea. And
we talk about real estate, you and I try to
talk about it with open eyes because there are a
lot of people who talk about it as this passive
investment passive income, and the truth is it is more
like a part time job than investing in the stock market,
which you can do especially blindholded, with two hands tied
behind your back. It's something that doesn't really require all
(15:30):
that much dedication and So if you have other interests
like growing your family or just I don't know, not
spending a lot of time managing real estate, then you
can do those things, whereas real estate does change your
life to a certain degree. And I just think, really,
at the end of the day, for Mike, when it
comes down to it, if your heart isn't into investing
in real estate, I wouldn't encourage you to buy a
(15:53):
house in an effort to eke out higher returns when
you just don't have that innate desire. Like if you
kind of have been fined allowing the space, You've read
a few books and you're like, man, this is super
exciting to me.
Speaker 5 (16:03):
Yes, there are.
Speaker 1 (16:04):
Ways in which you can make real estate makes sense,
But if you're trying to put the square peg in
the round hole, don't do it.
Speaker 4 (16:09):
Yeah, man, that's right, Like you are speaking to the
activity of investing in real estate. But then even beyond that,
I still want to just touch on the like did
he say that they aside from four one ks or
roth iras and even hsa is that he's also throwing
I think he said another four thousand dollars into a
brokerage at taxable brokerage account.
Speaker 5 (16:27):
They are like really really.
Speaker 4 (16:28):
Getting after it, and he's saying that they're not in
a high cost of living area.
Speaker 5 (16:32):
Either, it's not.
Speaker 4 (16:33):
It's one thing if they're living in like the Bay
Area or they live in New York or something like that,
but it makes it sound like that they are just
banking all this money in a relatively at least average
cost of living area. So that's why I guess I
want Mike to think through some of the other aspects,
some of the other facets of life.
Speaker 6 (16:50):
Perhaps you're listening to how to Money with Joel Larsgard
on demand from KFI AM six forty.
Speaker 4 (16:57):
If you have a money question, we'll send it out.
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 how toomoney dot com, forward slash ask.
Speaker 5 (17:10):
Or matt.
Speaker 1 (17:10):
Something else that everyone might want to consider is rethinking
their emergency fund, how much money they have stored up
in their high yield savings account. MarketWatch pointed this out
that changing economic realities might mean that you don't have
enough money saved up in your bank account. You might
not have enough liquidity, and instead of the traditional three
to six months that is typically recommended, some folks are
(17:33):
opting to increase the amount of money they have on
hand to.
Speaker 5 (17:37):
Nine months or even more.
Speaker 1 (17:39):
And that is I think a potentially smart move, specifically
if your industry or your particular job is less stable. Right,
So yeah, if you're in a position that feels a
little more precarious, like I would want to have more
cash on hand, that seems like a smart move. The
average duration of unemployment has actually gone up as wells
(18:00):
on average five and a half months, so if you
lose your job, you're talking almost six months to get
the next one. So yeah, if that's the case, three
months certainly doesn't seem like quite enough. I guess I
kind of blame somewhere in the middle on this though.
Mat I think that telling people to save up nine
plus months worth of expenses that can feel a little
demoralizing because it's really hard to do and how much
(18:21):
you actually need it really does depend on a variety
of factors, like are you a two income household, do
you have a bare bones budget that you could implement
immediately upon the loss of a job, and how much
would that actually save you because if you're willing to
do that, hey, what looks like three months worth of
normal expenses could be five months worth of barebones budget expenses.
And ultimately, I think having six months worth of any
(18:42):
fund it's better than having three. And some folks might
understandably need or want to save even more. And I
think if you do experience a job loss, you are
going to be thankful that you thought ahead of time,
that you were planning, and that you had a little
bit extra on hand.
Speaker 5 (18:58):
That's true.
Speaker 4 (18:58):
Yeah, And as we talked with Katie North about this
past Wednesday about sabbaticals, you might be able to parlay
some of those additional funds into a sabbatical where you're
being a little more introspective there your time off.
Speaker 1 (19:09):
Losing your job means a severance. If you've got plenty
of savings on hand and then three, five, six months
of worth of severance, it's.
Speaker 5 (19:16):
Not be set. Yeah.
Speaker 4 (19:17):
So, Okay, the unemployment rate is low, but that doesn't
mean that the job market is booming for job seekers
out there, or that hunting for a new gig is easy.
This is a part of why it takes longer for
most average job seekers to find a new gig, and
part of the difficulty is navigating a slew of job
postings online, many of which are fake. So hiring platform
(19:38):
Greenhouse they just released an analysis of online job listings
and they found that one in five are fake listings.
And it's not that the listing itself is an actual scam,
but that there was never actually any hiring activity for
that listed job. And so you might be wondering why
a company would do such a thing. Why would they
post a position that they don't actually intend to fill.
(19:58):
It does seem sailing well, it could be their speculation,
that could be in an attempt to project growth that's
not actually happening. Evidently, some companies are using it as
sort of like a fishing line that they keep out
permanently in hopes of catching a rare talent.
Speaker 1 (20:13):
But still, what would like a rare fish be mat
if you kind of a rare fish just leaving that line.
Speaker 4 (20:17):
Out, lar Wall, I don't know that's a whale though, right, Yeah,
But so it doesn't make it any easier for hard
to reel that in who are looking for work. Is
something to be aware of that you think it's going
to be easier than you think in part, I think
because there are so like, oh, everywhere I look, there's
a job listing.
Speaker 5 (20:34):
The Internet makes job hunting easy, right.
Speaker 4 (20:36):
It makes it look so simple and jobs appear to
be plentiful, But that is not the case.
Speaker 1 (20:42):
Yeah, I think just kind of approving some of those
job boards. It's not that you can't find a job
online or that those job listings aren't helpful and can't
put you in the right direction, can't get you at
least on the right trail, in the right scent. But
I think it can get your hopes up when you
see a position that looks awesome and it looks like
it pays well, and then you never hear back upon
reaching out applying. That's just kind of the reality of
(21:03):
you have to kind of like cast your net wide
on the Internet and you're just hoping for someone to
respond on the other end. Seeing that, Matt, you mentioned
that these listings are not scams, We'll see it. Just
had a piece about job scams and they're coming in
to folks via text message, like.
Speaker 5 (21:17):
Actual job scams. Yeah, yeah, gotcha.
Speaker 1 (21:19):
These are just fake the ones you talked about, But
now we're talking about actual scammy jobs. What's happening in
these text messages that the person who's sending you the
message pretends to be a recruiter who has a solid
work from home job, and hey, may meet your employer
just said you got to come back to the office
four days a week. And you're like, wait a second,
I don't know.
Speaker 5 (21:37):
Taking me back to twenty twenty, Yeah, I like this work.
Speaker 1 (21:39):
From home job that this person's texting me about. But
what they're trying to get you to do is to
pay them for like a starter kit. Hey you got
this awesome job, but we have to mail you a
computer and stuff like that. So you need to send
us like seven or eight hundred bucks. That's going to
get this ball rolling. Well, the truth is, no legitimate
employer needs money from you upfront, so be careful, especially
(21:59):
if you any text message about employment. It is almost
inevitably a scam. Most of the players are going to
reach out via email, right, It's like when the irs,
I a'thing going to text you either, so be careful
the medium that's being used. I think this is also
just a good time Matt to issue a reminder that
the majority of jobs come through a good old fashioned
networking it's not that online job hunting is a complete
(22:22):
waste of time. Again, I think it can put you
on the right sense, but we're still talking about eighty percent,
only eighty percent of those listings being legit, and we're
talking about the potential for scams as well. So don't
neglect the tried and true method that has worked for decades.
It really does. So much of the time come down
to who you know, keeping that network active, staying in
touch with people who might be consequential in your career
(22:44):
moving forward.
Speaker 4 (22:45):
That's right, man, And speaking of networking reminds me a
friend of the show, Jordan Harbinger, who always talks about
digging the well before you need it.
Speaker 5 (22:51):
Before you're thirsty, mat before you're thirsty.
Speaker 6 (22:54):
You're listening to How to Money with Joel Larsgard on
demand from KFI AM six four.
Speaker 4 (23:00):
Don't forget to sign up for the how to moneynewsletter
over at how tomoney dot com slash newsletter.
Speaker 1 (23:04):
Let's get to a question now about man. Sadly, one
of the worst purchases you can.
Speaker 8 (23:10):
Make Hello how to Money. Name is Tony in San Diego.
I have an RV. Bought it in May twenty twenty four,
but things changed on my life and I was able
to buy a home. Don't need the RV. Trying to
determine whether I should sell it in public, like on
(23:31):
the street, or return it back to the dealership, at
which point they will have me pay the remainder of
what's left over, which is about thirty K. They'd like
that money in about two weeks once it's sold, and
I guess i'd have to get a loan to cover
(23:53):
that remaining amount. Just not sure what to do.
Speaker 5 (23:56):
Thanks, Hm, Joel.
Speaker 4 (23:58):
I feel like a lot of what we're gonna say
to is like bad news, right, But so before we
get to all that, I'll shoot a messenger.
Speaker 5 (24:05):
Yeah, I want.
Speaker 4 (24:06):
To highlight the fact that what I like about what
Tony has done here is that she's taken a more
unconventional approach to solving one of the biggest expenses that
we all experience every single month, which is housing. Yeah,
because she the way she said it, it sounded like
she considered, or she maybe lived for a period of
time in the RV, because then she said, but now
I have a house, so I don't need the RV anymore.
Speaker 5 (24:27):
I like that.
Speaker 4 (24:28):
I like that kind of outside of the box thinking.
It makes me think of a friend I had in college.
Speaker 5 (24:33):
Who he's like a tiny house movie he yeah, yeah, yeah.
He lives in his truck.
Speaker 4 (24:38):
He had a pickup truck with the bed cover on it,
you know that like kind of turns your truck into
an suv. And he had all of his stuff in
the back of his truck and he created a little
sleeping area. And he literally, for at least one semester,
if not an entire year, slept in his truck. He
was on the meal plan, so that's how that's how
he ate. All his friends were living in the dorm
(24:59):
of course, and so he would get his little shower tote,
his shower kit. He would go and shower in the
dorms for frow.
Speaker 5 (25:05):
Why guy really cold or really hot?
Speaker 4 (25:07):
He had an amazing sleeping bag and he's like a
sleeping pad, so he was insulated up off of the
bed and he was out there, dude, when it was cold,
like cold cold.
Speaker 5 (25:17):
So is this frugal or cheap? Well, my buddy, James.
So when you're that age, I think you can endure
a lot more than when you're our age. Here's the thing.
Speaker 4 (25:24):
He wasn't like a total cheap skate where he was
like mooching off of everybody because if we would go out,
like to the coffee shop, he would buy coffees for everybody,
like he knew that that everyone like that is how
he was able to get clean at least, well, he's.
Speaker 5 (25:38):
Always like hanging out in everyone's living rooms.
Speaker 1 (25:40):
You just get a gym membership right for fifteen twenty
bucks a month, and that's a you could have done
that free shower, could have done that thing. But all
I had to say, I think I appreciate Tony and
just maybe how she attempted to solve this problem. But
I guess getting an RV, you're not taking the absolute
cheapest path towards finding a way to solve this problem
is maybe a little bit more of a li style play, right, Well,
(26:00):
like maybe after the pandemic when everybody was on the road,
everyone's doing the van life thing, and she thought, oh
I could maybe I could do that, and then she realizes, actually,
this isn't.
Speaker 5 (26:09):
Quite for me.
Speaker 1 (26:10):
But I think most people buy RVs too as like
an excursion vehicle of sorts right to go see the country.
Speaker 5 (26:16):
It's to have fun, which is also cool.
Speaker 1 (26:18):
I guess if it's well planned and well considered and
you know what you're doing. But RVs are typically incredibly expensive.
And it's one of those decisions, Matt, that I see
time and time again people one year, eighteen months, two
years after the fact saying, yeah, this wasn't what I
thought it was going to be. And actually one I
get I'm scared to drive this thing. It's forty feet
(26:40):
long or whatever it is, and I don't like living
on the road. And so you you find people who
you know, the depreciation period, it can the depreciation could
be severe and just a short year or two. And
so even though people have owned their RV for not
much time, just like Tony here and it sounds like
she knows this, you could be talking about losing many
(27:00):
thousands of dollars or tens of thousands of dollars, even
if you haven't put many miles on it. And so
that's the treacherous downside of rbs is that people go
into it with these high hopes, these ideals of living
on the road. Maybe they read some Jack carrowac or
something like that, Matt, and they're like, this is going
to be grand, and I'm going to go see all
the national parks, and then they realize, oh wait, man,
I missed my community, I missed my family, I missed
my friends, and the RV lifestyle, it turns out, is
(27:22):
not for me.
Speaker 4 (27:22):
It's not quite even though it kind of solves the
same problem. It's not the same as real estate, where
you have one that's pretty much guaranteed to depreciate versus
another one which is pretty much guaranteed to appreciate. But
she's asking whether or not she should sell it herself
or she should just turn it over to the dealership,
And I will say none of these two options are
particularly stellar.
Speaker 5 (27:41):
I would be curious to know how much she owes
and how much the.
Speaker 4 (27:44):
RV is worth, because like it sounds like there's a
like a roughly thirty thousand dollars gap, which again, this
is a tough dollar amount to stomach.
Speaker 5 (27:53):
But I would.
Speaker 4 (27:53):
Advise you to look up the value of your particular
make and model up on a site like RV trader,
and there are ways to get like professional appraisals as well,
but you're just looking for a ballpark value here, and
the goal, of course, would be to close that thirty
thousand dollars gap as much as possible by selling it yourself,
because I think if you let the dealership sell it
(28:14):
for you, it's going to end up costing you a
lot more money at the end of the day.
Speaker 5 (28:18):
And that's I think going to be.
Speaker 4 (28:19):
The more expedients, the more let's just get this over
with sort of approach to where you're not sort of
faced with maybe this decision that you.
Speaker 5 (28:27):
Now regret at this point.
Speaker 4 (28:28):
But I do think putting in a little bit of
sweat equity and looking to sell it yourself might be
more the path that we would recommend.
Speaker 5 (28:35):
One hundred percent.
Speaker 1 (28:36):
I mean, I think you're right, the easy path here
is going to cost you more money and so at
the end of the day, which is what you want
to avoid. So we'd suggest taking great picks, writing a
good description, or to sell your RV yourself. You might
even want to pay a little bit of money to
get a listed on some of the more popular RB
selling websites. That's going to net you the biggest sale price,
(28:57):
which is ultimately what you're looking to do to amids
the amount of money that you're losing. And just like
selling a car, there's a substantial gap in what you
make selling it yourself versus what you get trading in.
When you look at Kelly bluebook dot com, for instance,
and you're trying to figure out car value math, they
give you a car value selling it used in certain conditions,
and then trade in value, and there's a reason the
trading value is less.
Speaker 5 (29:17):
They're not even trying to hide it.
Speaker 4 (29:18):
No, it's just out there the fact that you typically
are going to sell it for much more.
Speaker 1 (29:22):
Ware you to sell it yourself, You hit the easy
button and guess what, you get a certain amount of
money back. You put in a little more legwork, and
you're going to get a good bit more back in
your hands. And so either way, you're going to have
to come up with a way to borrow money to
pay for the difference in what you owe and what
the RV is worth. If you hand the RV back
to the dealer, though your credit is likely to be
negatively impacted.
Speaker 5 (29:43):
That's going to affect.
Speaker 1 (29:44):
Every other realm of your finances for years to come.
So I guess that's what we want to avoid, is
you come out even worse on the financial side of
the equation and also having your credit smacked around in
the same time.
Speaker 4 (29:56):
That's true, Yeah, but I like what you're saying. Essentially,
you're saying to create this beautiful listing, right. And I
think another I think there's an emotional component too, of
just turning it into the dealership to where you don't
have to be done with it again. You don't want
to see it anymore because you're just sick of it.
And I think by like making yourself see it a
little bit, there's like there's a chance you would internalize
the positive lessons than the takeaways from this a little
(30:18):
bit more were you to then just say, Okay, I'm
I'm just gonna pay whatever it takes. Something else I
think that's worth considering is renting it out. You've got
this RV, I don't know, can you sort of turn
it on its head a little bit and see this
maybe as an asset as opposed to a liability. Outdoorsy,
this is a cool site where folks can rent out
their RVs, and I think it might be worth browsing around.
(30:41):
Look like, peruse a little bit, see how much you
could potentially make with an RV given where you currently live.
Speaker 5 (30:47):
Because if you're.
Speaker 4 (30:47):
Able to turn your RV from a cash drag into
a monthly net positive, well, you might be able to
avoid your fate of selling that thing out a substantial loss.
Either it becomes a side hustle that makes you a
little bit of money every single month, or it at
least allows you to hold onto it for longer as
you continue to pay off that balance, so that you
don't take a thirty thousand dollars bath that you can't
(31:09):
afford all at once. I think it's at least worth considering.
And Joel, this totally reminds me of one of the
original Town of Money episode or back in the day
it was poured out poor but was it like episode
two or three?
Speaker 5 (31:20):
Whatever?
Speaker 4 (31:21):
But like you and Emily were considering getting an airstream,
right that you're gonna put in your backyard and you're
gonna bad.
Speaker 5 (31:28):
Is gonna be super cute? Yeah, li'st that thing on Airbnb.
Speaker 1 (31:31):
We have a friend who's done exactly that, and he
has crushed with his area. Like, I think about how
much he spent on that and what he's turned it into.
He's turned it into a like essentially a literal gold
mine that it's in his backyard, super cute and the
value has not really declined much. And yet he has
continued to make money on it month after month after month.
Speaker 5 (31:48):
And yeah, I went with you, took a picture of
you sitting in it and everything. He's always very seriously
considering by that thing and this.
Speaker 4 (31:55):
You're right, she's already got it ranted. Maybe is not
as cute as like a vintage airstream or anything like that.
Speaker 5 (32:01):
She says, RV.
Speaker 4 (32:02):
So I picture it's got to be brown or it's
got to be tanned with brown highlights.
Speaker 1 (32:06):
Well, yeah, and if you might not go back in
time and make this decision to buy this RV for
this purpose, But now that you have it, can you
make lemonade out of elements? And if you do have
to take on additional debt, let's say, to cover the
gap in what you owe and what it's worth, we
would say, go to your local credit union to see
what they offer. You almost always get better terms than
you would at the bank. I'd also make a massive goal, Matt,
(32:26):
if I was tony, to try and pay off that
loan in short order, like.
Speaker 5 (32:29):
As fast as possible.
Speaker 1 (32:31):
Get a side hustle to bring in some extra income,
stick to a bare bones budget for a few months
to accelerate your cashlow. We have a whole episode on
creating a barebones budget, but it's essentially like an all
hands on deck, whatever it takes to eradicate this debt
sort of scenario. We all make financial mistakes, right, but
we want you to recover from this as quickly as possible,
and so to look at kind of straight in the face,
(32:52):
like Matt was saying, get the best terms possible for
selling this, so that you minimize your loss, and then
to attempt to improve your financial situation as quickly as
you can via increased income, reduce spending, or both at
the same time. I love it 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
(33:14):
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?
Joel and Matt have you covered? This is how to
Money with Joel Larsgard and Matt.
Speaker 3 (00:18):
Altmes KF I am sixty live.
Speaker 4 (00:49):
Everywhere on the iHeartRadio app. This is how to Money.
I am Matt Altmes.
Speaker 1 (00:52):
And I'm Joe Larsgard. Don't forget to sign up for
the how to Money newsletter. You can find that up
at how tomoney dot com slash newsletter.
Speaker 4 (00:59):
All Right, man, we saw I returned to the Oval
Office for President Trump, and I think a lot of
folks might be wondering how this might impact our economy
as a whole. How is this going to impact your
personal finances? That remains to be seen. There's always a
whole lot of talk and bluster when it comes to
President Trump. There's a litany of things that we can discuss.
For instance, the new twenty five percent teriffs against Canada
(01:21):
and Mexico that could be implemented as early as next week.
In terrorist they might serve a geopolitical purpose, but they
essentially act as a tax on consumers.
Speaker 1 (01:32):
And raising the price of everyday goods, right, whether it's
auto parts, food, the litany of things.
Speaker 4 (01:38):
It's counter to the free market and the ability for
companies to produce goods at the absolute lowest price. And
again I understand it from a geopolitical strategy standpoint, But
how this impacts Americans, we will see how broad those
terrorists are. That will also impact how we feel them.
But there certainly is a chance that inflation, which has
calmed it could potentially be stoked.
Speaker 5 (01:59):
By this post change.
Speaker 4 (02:00):
There were executive orders that could have an impact in
the coming months, like an attempt to curb building restrictions
in order to increase supply. How that actually will work
in reality? It's it's going to be hard to disserve.
Speaker 5 (02:13):
Sounds good on paper, but yeah, well yeah, how well
for that, yeah, because that's what we need.
Speaker 4 (02:17):
For instance, when it comes to housing, the largest line
item on everyone's monthly budget, more supply leads to lower prices.
Speaker 1 (02:23):
Building codes are often local. So how is some sort
of you know, yeah, and which is.
Speaker 4 (02:30):
Yeah, everyone who is a big fan of Trump, of course,
is praising the stroke of the pen, the phone call,
and the ability to make everyone's lives better here in
the States. But Dave Chappelle, he actually said it really
well on Saturday Night Live. He said, whether people voted
for you or not, everyone is counting on you good luck,
which I appreciate. Always count on Dave Chappelle to inject
(02:51):
a little bit of common sense into the discourse.
Speaker 5 (02:54):
Of the time.
Speaker 1 (02:54):
Yeah, I appreciate Dave, and that well said right, Well said,
we are we're hoping for the best. We always hope
for the best, part President, whether you've voted for them
or not, because we want the best for our country
and the three hundred and forty million people inside of it.
I'm sure we're gonna have a lot to talk about
in the coming months, Matt on the political front and
how the political regime change impacts are our finances, because
(03:15):
it will, it will have an impact, and hopefully we
will pay attention to the headlines that are actually going
to matter and the things that are actually going to happen,
because I'm sure so many media companies are like.
Speaker 5 (03:27):
Yeah, Stroves back in office because it gives them.
Speaker 4 (03:29):
Something to report, much like the craziness that oftentimes comes from.
Speaker 5 (03:33):
The tweets or truths or whatever it.
Speaker 1 (03:36):
Is that Trump is saying, and you and I will
attempt to our best to keep it a political and
focus on the money stuff. Indeed, one thing we have
to discuss is the meme coins that the President the
first Lady launched a head of the inauguration. It was
kind of a crazy stunt, right, and politics aside.
Speaker 5 (03:51):
It doesn't matter where you laying on the spectrum.
Speaker 1 (03:52):
This is ridiculous and we've kind of trash meme coins thoroughly,
and the cryptocurrency space we have, I think, given a
lot of caution in our assessment of cryptocurrency and what
kind of approach normal investors should have towards crypto. And
some folks did make money in this kind of mean
coin bonanza if they bought early, they bought that Trump
(04:13):
coin early, then the cash out quick. But this is
just another reminder that the mean coin space is rife
with grift. The majority of people lose money. And it's
interesting too, Matt, because the crypto space, I think they
were hoping that a Trump presidency would usher in vibes
of legitimacy, and there has been a lot of talk about,
you know, bitcoin in particular, having a National Bitcoin Strategic Reserve,
(04:37):
or something like that. Is that going to be a
boon to some of the more popular, more long standing cryptocurrencies.
Speaker 5 (04:43):
Maybe if it happens.
Speaker 1 (04:45):
Yeah, but just this little stunt, I guess hasn't really
aided in the legitimacy of crypto. It hasn't started off
in a good way. And the takeaway for individuals listening
is don't participate in the mean coin andanity no matter who.
Speaker 5 (05:02):
And I will say, be ready to lose your shirt.
Speaker 4 (05:04):
Yeah, and again this is I think this is an
a political statement, but this shouldn't be anything new for
folks who have like followed what it is that Trump
has done, Like this is like typical behavior for him, right,
Like more recently, it's like the branded it's the dumb
Lee Greenwood bibles that Trump is selling for.
Speaker 5 (05:20):
How much was he selling this for? But then like.
Speaker 4 (05:23):
The sneakers but then but even before he was president.
Speaker 5 (05:27):
Would you look great in by the way.
Speaker 4 (05:29):
Even before he was president, like the like the Trump
steaks and the vodka, like this is something that he does.
And so on one hand, it's just it's more of
the same. I will say, I was shocked to see
the pastor that gave one of the benedictions. At the
end of the inaugural address or whatever, he launched a
meme coin. Oh really, yes, that is incredibly disheartening, Like
(05:53):
like that makes me angry. This is like a pastor,
someone who's supposed to be forsaking worldly riches in a
self sacrificial way to serve other people, and man talk
about grit like that made me really upset when I
when I heard that. It just feels so counter to
what someone who is in ministry or someone who's a
pastor that they should be doing.
Speaker 1 (06:10):
Does this mean we're canceling the launch of our mean
coin that we have planned.
Speaker 5 (06:14):
No, no, no, we're not ministry. We can do it. We
can do it, Okay.
Speaker 4 (06:17):
Something else though that struck me was the mandate for
government workers to return to the office. Dude, working from home.
So twenty twenty, we're turning to the office rto. That's
the name of the game now. And I will say
there is evidence that working from home, at least at
the federal level, hasn't had great results. That is costing
the government therefore us as taxpayers billions of dollars.
Speaker 1 (06:40):
Yeah, there's a report issued kind of towards the end
of last year. I think from one of the Senator's
offices that headlined, you know just how much less productive
certain government agencies and certain individuals have been, and just
how costly that's become.
Speaker 4 (06:51):
Yeah, yeah, dude, we're talking especially like given all the
office space that is sitting empty, like real estate is
incredibly expensive. And similar to the companies to have issued
return to office orders, I think the government they may
not be crying you or river if you end up
quitting over this. It appears that increase efficiency at the
office and a trim or payroll are simultaneous goals. So
(07:12):
we think that the smartest employers out there, who are
looking to retain top notch talent, will opt.
Speaker 5 (07:18):
For more of a hybrid or more of a flex.
Speaker 4 (07:20):
Approach where they do trust their great employees to do
their job wherever they are. But I do think as
an employee you might have to make a difficult choice
if going back into the office, let's say five days
a week, if that's going to be too tough of
a pill to swallow. I think eventually it'll settle out
somewhere in the middle, because I think there had to
be this sort of hard correct right, like the pendulum
swung so far to one side, and now I think
(07:42):
it's almost having to swing hard in the other direction
in order to I don't know for employees, for employers
to communicate two employees that they're taking this a bit
more seriously, but I think it'll eventually settle somewhere in
the middle.
Speaker 1 (07:53):
Yeah, that's one hundred percent spot on. All right, We've
got actually more to get to on today's show.
Speaker 6 (07:58):
You're listening to how To Money with Joel Larsgard on
demand from KFI AM six boarding.
Speaker 4 (08:05):
By the way, you can always find more money saving
information over at howtomoney dot com.
Speaker 1 (08:10):
Matt, let's get to a question about diversification and is
stock market investing enough to get the job done.
Speaker 7 (08:17):
Hey Matt, Joel, my name is Mike and I've been
listening to your podcast for a few years now. Great content,
Love the fact that it's tailored to a wide audience.
Keep up the awesome work. The question today is about diversity.
The wife and I have focused on our careers and
our income, which is paid off in the long run.
We're also interested in financial independence and over the last
few years we've become really focused on our savings rate.
(08:40):
And I'll also add that we are currently in our
mid thirties and do not have any kids as of yet.
Right now we max out both the four oh one K,
the IRA, the HSAS, and after that we average four
thousand dollars per month to a brokerage account. And my
question is everyone keeps saying that real state it's a
way to supercharge your finances, but honestly, I see nothing
(09:04):
but hard work and high risks. We live in a
medium cost of living area, but there are no houses
around here that are actually cash flowing. I've talked to
a couple of real estate agents and the general advice
is that they're going for appreciation, which I think is
a bad bet. Is investing everything in a low cost
index fund. Enough, it's pure stocks, so if the market
(09:26):
slows down, obviously that's all we're banking on. What else
can we do to diversify this money? We save so
much and have so much in cash. I just don't
see the benefit in making life more complex with real
estate and rentals, But is ultimately a bad move to
only do low cost index funds and nothing else?
Speaker 5 (09:48):
Thanks guys, Oh, Joel, is it a bad move?
Speaker 4 (09:52):
I'm not sure if I would go that far, But
I am glad that Mike is asking this question.
Speaker 5 (09:57):
He's asking how.
Speaker 4 (09:58):
Much diversity is necessary to be a successful investor. And
this becomes even more pertinent the further along you get
in your progress towards financial independence, just because you know,
we're talking about a bigger sum of money as opposed
to someone who's like just getting started.
Speaker 2 (10:13):
Right.
Speaker 1 (10:13):
If you're all in with a hundred bucks, that's one thing.
If you're all in with a million bucks, that's another.
Speaker 5 (10:16):
Thing, exactly.
Speaker 4 (10:17):
And in Mike's case, it's not like he's all in
on Nvidia or anything like that. He's well diversified in
the stock market. But does he need to go beyond that?
That is his question.
Speaker 1 (10:30):
Yeah, And so Mike and his partner, they've been smart
to focus on their careers as like one of the
first thing he thinks he talked about. You know, some
people who are incredibly frugal can focus so hard on
saving and pinching pennies that they forget to invest in themselves.
I think it's really important to highlight that, Matt, because
you know, growing the pie is so much smarter than
just trying to eat a little bit less of that pie,
(10:51):
and that that is something that doesn't get focused on enough.
I don't think in the in the personal finance space,
what Mike and his his spouse have been able to
do with that bigger is admirable. You guys have made
a lot of progress towards financial independence at an incredibly
young age. But now the question arises, do you need
to expand your efforts to other asset classes, to investing
(11:12):
more widely? And I think Matt the at least simple
quick answer to that question is not really that those
low cost index funds really are enough for the vast
majority of people.
Speaker 5 (11:22):
Totally.
Speaker 4 (11:23):
I would give him a big old negative because if you,
let's say you are a savy real estate investor, you
are inclined in that direction. I think it can be
a way, in his words, to supercharge your finances. But
whether or not it will be for you as an
individual there, Mike, that depends on a ton of factors,
including the purchase price that depends on what you can
(11:43):
get in rent, and the fact that it takes a
whole lot of time to save up for that down
payment as well. It's I think it's hardest for a
lot of folks out there to stomach the idea of
buying a rental property when you know that you're going
to be losing money on it every single month, And.
Speaker 5 (11:55):
I raise my hand to that, Matt.
Speaker 1 (11:57):
It would be hard for me to stomach buying a
rental property right now, especially given I wouldn't do it
some of the dynamics and the fact, like, no, don't
sign me up for buying around property.
Speaker 5 (12:05):
What I'm gonna lose money.
Speaker 4 (12:06):
And so basically, like it feels like Mike is trying
to get us to talk him into getting into real
estate and I'm not going to do it, Mike, they
can't to us my arm, I still won't punch No,
I'm seriously because like he even highlighted the sort of
aspects that are going to make it more of a
negative experience for him, and instead, what I want to
do is, like one of the things Mike pointed out
(12:26):
is the fact that he is him and his wife
are interested in financial independence, is which is when your
investments are large enough that you can live off of
your investments as opposed to work. I think for a
lot of folks when they first find out about financial independence,
it can kind of become this all consuming projects.
Speaker 5 (12:43):
Yeah, you get the tractor beam on the desk star
and you can't. It's hard to escape it.
Speaker 4 (12:47):
Like you've taken the red pill in the matrix and
you know the truth, and so now you're thinking, oh,
everything else is just an illusion. It's the it's the warm,
cozy security blanket that you get with a blue pill.
Speaker 5 (12:56):
No Mike saying no to the blue pill.
Speaker 4 (12:58):
He's like, Okay, I know what I'm capable of, or
I know what is capable once you've invested enough money.
But instead, and so, Mike, if this doesn't apply to you,
then just dismiss everything that I'm saying here. But this
was me, Like I am confessing here that when I
first learned about this, I was consumed and pretty infatuated
with the idea of becoming financially independent.
Speaker 1 (13:19):
But it's kind of hard not to be because it
does alter the way you view the world to a degree.
Speaker 5 (13:23):
It's really helpful.
Speaker 4 (13:24):
But what I would challenge you to do, Mike, is
to think through some other aspects of life that make
life more robust and enriching, like and that could be
as something as small as just thinking through some hobbies
that you enjoy, like, Okay, how can I incorporate those
into my life a little bit more. But I also
noticed that Mike said that they aren't or that they
don't have any kids, at least not yet, which tells
(13:46):
me that maybe this is a goal of theirs. And
so I would say, hey, I want to hear you
talking more about making that a priority, if that's something
that you want to do, because personally, I found that
growing my family and having kids, man like that is
like one of the biggest most rewarding things my entire life.
Speaker 5 (14:00):
Man, the joys of parenthood.
Speaker 4 (14:02):
And oftentimes when you're like or, we can get that
next promotion and then we could stock away this much
more at work, which leads to being able to attain
that magic number of being financially independent even more so. Well,
I just want you to not necessarily optimize from a
financial standpoint, and to expand your scope a little bit
and to look at some of the other things in life.
(14:23):
And the way I'm hearing you talk about real estate,
you're not thinking at all about what it is that
you want to spend your time doing. It's about the
financial or the return on your investment. And you might
see we're like I was just saying, you might see
an outsize return on your investment, but certainly if it's
a not something you want to do anyway, and b
if investors in your area are only counting on appreciation, well, man, personally,
(14:45):
I don't think it would be worth it.
Speaker 1 (14:46):
Yeah, and so so much of how we answer this
question depends on the person asking it and how they're
asking it, because Matt, there are some people who are
more inclined to invest in real estate. They're more just
naturally interested, and maybe their skill set leads to them
being better real estate investors. What Mike said was all
I see is the hard work and the high risks. Yes,
And when you see that, then I think taking on
(15:07):
a part time job to hope on some appreciation at
the end of the day, that's a bad idea. And
we talk about real estate, you and I try to
talk about it with open eyes because there are a
lot of people who talk about it as this passive
investment passive income, and the truth is it is more
like a part time job than investing in the stock market,
which you can do especially blindholded, with two hands tied
behind your back. It's something that doesn't really require all
(15:30):
that much dedication and So if you have other interests
like growing your family or just I don't know, not
spending a lot of time managing real estate, then you
can do those things, whereas real estate does change your
life to a certain degree. And I just think, really,
at the end of the day, for Mike, when it
comes down to it, if your heart isn't into investing
in real estate, I wouldn't encourage you to buy a
(15:53):
house in an effort to eke out higher returns when
you just don't have that innate desire. Like if you
kind of have been fined allowing the space, You've read
a few books and you're like, man, this is super
exciting to me.
Speaker 5 (16:03):
Yes, there are.
Speaker 1 (16:04):
Ways in which you can make real estate makes sense,
But if you're trying to put the square peg in
the round hole, don't do it.
Speaker 4 (16:09):
Yeah, man, that's right, Like you are speaking to the
activity of investing in real estate. But then even beyond that,
I still want to just touch on the like did
he say that they aside from four one ks or
roth iras and even hsa is that he's also throwing
I think he said another four thousand dollars into a
brokerage at taxable brokerage account.
Speaker 5 (16:27):
They are like really really.
Speaker 4 (16:28):
Getting after it, and he's saying that they're not in
a high cost of living area.
Speaker 5 (16:32):
Either, it's not.
Speaker 4 (16:33):
It's one thing if they're living in like the Bay
Area or they live in New York or something like that,
but it makes it sound like that they are just
banking all this money in a relatively at least average
cost of living area. So that's why I guess I
want Mike to think through some of the other aspects,
some of the other facets of life.
Speaker 6 (16:50):
Perhaps you're listening to how to Money with Joel Larsgard
on demand from KFI AM six forty.
Speaker 4 (16:57):
If you have a money question, we'll send it out.
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 how toomoney dot com, forward slash ask.
Speaker 5 (17:10):
Or matt.
Speaker 1 (17:10):
Something else that everyone might want to consider is rethinking
their emergency fund, how much money they have stored up
in their high yield savings account. MarketWatch pointed this out
that changing economic realities might mean that you don't have
enough money saved up in your bank account. You might
not have enough liquidity, and instead of the traditional three
to six months that is typically recommended, some folks are
(17:33):
opting to increase the amount of money they have on
hand to.
Speaker 5 (17:37):
Nine months or even more.
Speaker 1 (17:39):
And that is I think a potentially smart move, specifically
if your industry or your particular job is less stable. Right,
So yeah, if you're in a position that feels a
little more precarious, like I would want to have more
cash on hand, that seems like a smart move. The
average duration of unemployment has actually gone up as wells
(18:00):
on average five and a half months, so if you
lose your job, you're talking almost six months to get
the next one. So yeah, if that's the case, three
months certainly doesn't seem like quite enough. I guess I
kind of blame somewhere in the middle on this though.
Mat I think that telling people to save up nine
plus months worth of expenses that can feel a little
demoralizing because it's really hard to do and how much
(18:21):
you actually need it really does depend on a variety
of factors, like are you a two income household, do
you have a bare bones budget that you could implement
immediately upon the loss of a job, and how much
would that actually save you because if you're willing to
do that, hey, what looks like three months worth of
normal expenses could be five months worth of barebones budget expenses.
And ultimately, I think having six months worth of any
(18:42):
fund it's better than having three. And some folks might
understandably need or want to save even more. And I
think if you do experience a job loss, you are
going to be thankful that you thought ahead of time,
that you were planning, and that you had a little
bit extra on hand.
Speaker 5 (18:58):
That's true.
Speaker 4 (18:58):
Yeah, And as we talked with Katie North about this
past Wednesday about sabbaticals, you might be able to parlay
some of those additional funds into a sabbatical where you're
being a little more introspective there your time off.
Speaker 1 (19:09):
Losing your job means a severance. If you've got plenty
of savings on hand and then three, five, six months
of worth of severance, it's.
Speaker 5 (19:16):
Not be set. Yeah.
Speaker 4 (19:17):
So, Okay, the unemployment rate is low, but that doesn't
mean that the job market is booming for job seekers
out there, or that hunting for a new gig is easy.
This is a part of why it takes longer for
most average job seekers to find a new gig, and
part of the difficulty is navigating a slew of job
postings online, many of which are fake. So hiring platform
(19:38):
Greenhouse they just released an analysis of online job listings
and they found that one in five are fake listings.
And it's not that the listing itself is an actual scam,
but that there was never actually any hiring activity for
that listed job. And so you might be wondering why
a company would do such a thing. Why would they
post a position that they don't actually intend to fill.
(19:58):
It does seem sailing well, it could be their speculation,
that could be in an attempt to project growth that's
not actually happening. Evidently, some companies are using it as
sort of like a fishing line that they keep out
permanently in hopes of catching a rare talent.
Speaker 1 (20:13):
But still, what would like a rare fish be mat
if you kind of a rare fish just leaving that line.
Speaker 4 (20:17):
Out, lar Wall, I don't know that's a whale though, right, Yeah,
But so it doesn't make it any easier for hard
to reel that in who are looking for work. Is
something to be aware of that you think it's going
to be easier than you think in part, I think
because there are so like, oh, everywhere I look, there's
a job listing.
Speaker 5 (20:34):
The Internet makes job hunting easy, right.
Speaker 4 (20:36):
It makes it look so simple and jobs appear to
be plentiful, But that is not the case.
Speaker 1 (20:42):
Yeah, I think just kind of approving some of those
job boards. It's not that you can't find a job
online or that those job listings aren't helpful and can't
put you in the right direction, can't get you at
least on the right trail, in the right scent. But
I think it can get your hopes up when you
see a position that looks awesome and it looks like
it pays well, and then you never hear back upon
reaching out applying. That's just kind of the reality of
(21:03):
you have to kind of like cast your net wide
on the Internet and you're just hoping for someone to
respond on the other end. Seeing that, Matt, you mentioned
that these listings are not scams, We'll see it. Just
had a piece about job scams and they're coming in
to folks via text message, like.
Speaker 5 (21:17):
Actual job scams. Yeah, yeah, gotcha.
Speaker 1 (21:19):
These are just fake the ones you talked about, But
now we're talking about actual scammy jobs. What's happening in
these text messages that the person who's sending you the
message pretends to be a recruiter who has a solid
work from home job, and hey, may meet your employer
just said you got to come back to the office
four days a week. And you're like, wait a second,
I don't know.
Speaker 5 (21:37):
Taking me back to twenty twenty, Yeah, I like this work.
Speaker 1 (21:39):
From home job that this person's texting me about. But
what they're trying to get you to do is to
pay them for like a starter kit. Hey you got
this awesome job, but we have to mail you a
computer and stuff like that. So you need to send
us like seven or eight hundred bucks. That's going to
get this ball rolling. Well, the truth is, no legitimate
employer needs money from you upfront, so be careful, especially
(21:59):
if you any text message about employment. It is almost
inevitably a scam. Most of the players are going to
reach out via email, right, It's like when the irs,
I a'thing going to text you either, so be careful
the medium that's being used. I think this is also
just a good time Matt to issue a reminder that
the majority of jobs come through a good old fashioned
networking it's not that online job hunting is a complete
(22:22):
waste of time. Again, I think it can put you
on the right sense, but we're still talking about eighty percent,
only eighty percent of those listings being legit, and we're
talking about the potential for scams as well. So don't
neglect the tried and true method that has worked for decades.
It really does. So much of the time come down
to who you know, keeping that network active, staying in
touch with people who might be consequential in your career
(22:44):
moving forward.
Speaker 4 (22:45):
That's right, man, And speaking of networking reminds me a
friend of the show, Jordan Harbinger, who always talks about
digging the well before you need it.
Speaker 5 (22:51):
Before you're thirsty, mat before you're thirsty.
Speaker 6 (22:54):
You're listening to How to Money with Joel Larsgard on
demand from KFI AM six four.
Speaker 4 (23:00):
Don't forget to sign up for the how to moneynewsletter
over at how tomoney dot com slash newsletter.
Speaker 1 (23:04):
Let's get to a question now about man. Sadly, one
of the worst purchases you can.
Speaker 8 (23:10):
Make Hello how to Money. Name is Tony in San Diego.
I have an RV. Bought it in May twenty twenty four,
but things changed on my life and I was able
to buy a home. Don't need the RV. Trying to
determine whether I should sell it in public, like on
(23:31):
the street, or return it back to the dealership, at
which point they will have me pay the remainder of
what's left over, which is about thirty K. They'd like
that money in about two weeks once it's sold, and
I guess i'd have to get a loan to cover
(23:53):
that remaining amount. Just not sure what to do.
Speaker 5 (23:56):
Thanks, Hm, Joel.
Speaker 4 (23:58):
I feel like a lot of what we're gonna say
to is like bad news, right, But so before we
get to all that, I'll shoot a messenger.
Speaker 5 (24:05):
Yeah, I want.
Speaker 4 (24:06):
To highlight the fact that what I like about what
Tony has done here is that she's taken a more
unconventional approach to solving one of the biggest expenses that
we all experience every single month, which is housing. Yeah,
because she the way she said it, it sounded like
she considered, or she maybe lived for a period of
time in the RV, because then she said, but now
I have a house, so I don't need the RV anymore.
Speaker 5 (24:27):
I like that.
Speaker 4 (24:28):
I like that kind of outside of the box thinking.
It makes me think of a friend I had in college.
Speaker 5 (24:33):
Who he's like a tiny house movie he yeah, yeah, yeah.
He lives in his truck.
Speaker 4 (24:38):
He had a pickup truck with the bed cover on it,
you know that like kind of turns your truck into
an suv. And he had all of his stuff in
the back of his truck and he created a little
sleeping area. And he literally, for at least one semester,
if not an entire year, slept in his truck. He
was on the meal plan, so that's how that's how
he ate. All his friends were living in the dorm
(24:59):
of course, and so he would get his little shower tote,
his shower kit. He would go and shower in the
dorms for frow.
Speaker 5 (25:05):
Why guy really cold or really hot?
Speaker 4 (25:07):
He had an amazing sleeping bag and he's like a
sleeping pad, so he was insulated up off of the
bed and he was out there, dude, when it was cold,
like cold cold.
Speaker 5 (25:17):
So is this frugal or cheap? Well, my buddy, James.
So when you're that age, I think you can endure
a lot more than when you're our age. Here's the thing.
Speaker 4 (25:24):
He wasn't like a total cheap skate where he was
like mooching off of everybody because if we would go out,
like to the coffee shop, he would buy coffees for everybody,
like he knew that that everyone like that is how
he was able to get clean at least, well, he's.
Speaker 5 (25:38):
Always like hanging out in everyone's living rooms.
Speaker 1 (25:40):
You just get a gym membership right for fifteen twenty
bucks a month, and that's a you could have done
that free shower, could have done that thing. But all
I had to say, I think I appreciate Tony and
just maybe how she attempted to solve this problem. But
I guess getting an RV, you're not taking the absolute
cheapest path towards finding a way to solve this problem
is maybe a little bit more of a li style play, right, Well,
(26:00):
like maybe after the pandemic when everybody was on the road,
everyone's doing the van life thing, and she thought, oh
I could maybe I could do that, and then she realizes, actually,
this isn't.
Speaker 5 (26:09):
Quite for me.
Speaker 1 (26:10):
But I think most people buy RVs too as like
an excursion vehicle of sorts right to go see the country.
Speaker 5 (26:16):
It's to have fun, which is also cool.
Speaker 1 (26:18):
I guess if it's well planned and well considered and
you know what you're doing. But RVs are typically incredibly expensive.
And it's one of those decisions, Matt, that I see
time and time again people one year, eighteen months, two
years after the fact saying, yeah, this wasn't what I
thought it was going to be. And actually one I
get I'm scared to drive this thing. It's forty feet
(26:40):
long or whatever it is, and I don't like living
on the road. And so you you find people who
you know, the depreciation period, it can the depreciation could
be severe and just a short year or two. And
so even though people have owned their RV for not
much time, just like Tony here and it sounds like
she knows this, you could be talking about losing many
(27:00):
thousands of dollars or tens of thousands of dollars, even
if you haven't put many miles on it. And so
that's the treacherous downside of rbs is that people go
into it with these high hopes, these ideals of living
on the road. Maybe they read some Jack carrowac or
something like that, Matt, and they're like, this is going
to be grand, and I'm going to go see all
the national parks, and then they realize, oh wait, man,
I missed my community, I missed my family, I missed
my friends, and the RV lifestyle, it turns out, is
(27:22):
not for me.
Speaker 4 (27:22):
It's not quite even though it kind of solves the
same problem. It's not the same as real estate, where
you have one that's pretty much guaranteed to depreciate versus
another one which is pretty much guaranteed to appreciate. But
she's asking whether or not she should sell it herself
or she should just turn it over to the dealership,
And I will say none of these two options are
particularly stellar.
Speaker 5 (27:41):
I would be curious to know how much she owes
and how much the.
Speaker 4 (27:44):
RV is worth, because like it sounds like there's a
like a roughly thirty thousand dollars gap, which again, this
is a tough dollar amount to stomach.
Speaker 5 (27:53):
But I would.
Speaker 4 (27:53):
Advise you to look up the value of your particular
make and model up on a site like RV trader,
and there are ways to get like professional appraisals as well,
but you're just looking for a ballpark value here, and
the goal, of course, would be to close that thirty
thousand dollars gap as much as possible by selling it yourself,
because I think if you let the dealership sell it
(28:14):
for you, it's going to end up costing you a
lot more money at the end of the day.
Speaker 5 (28:18):
And that's I think going to be.
Speaker 4 (28:19):
The more expedients, the more let's just get this over
with sort of approach to where you're not sort of
faced with maybe this decision that you.
Speaker 5 (28:27):
Now regret at this point.
Speaker 4 (28:28):
But I do think putting in a little bit of
sweat equity and looking to sell it yourself might be
more the path that we would recommend.
Speaker 5 (28:35):
One hundred percent.
Speaker 1 (28:36):
I mean, I think you're right, the easy path here
is going to cost you more money and so at
the end of the day, which is what you want
to avoid. So we'd suggest taking great picks, writing a
good description, or to sell your RV yourself. You might
even want to pay a little bit of money to
get a listed on some of the more popular RB
selling websites. That's going to net you the biggest sale price,
(28:57):
which is ultimately what you're looking to do to amids
the amount of money that you're losing. And just like
selling a car, there's a substantial gap in what you
make selling it yourself versus what you get trading in.
When you look at Kelly bluebook dot com, for instance,
and you're trying to figure out car value math, they
give you a car value selling it used in certain conditions,
and then trade in value, and there's a reason the
trading value is less.
Speaker 5 (29:17):
They're not even trying to hide it.
Speaker 4 (29:18):
No, it's just out there the fact that you typically
are going to sell it for much more.
Speaker 1 (29:22):
Ware you to sell it yourself, You hit the easy
button and guess what, you get a certain amount of
money back. You put in a little more legwork, and
you're going to get a good bit more back in
your hands. And so either way, you're going to have
to come up with a way to borrow money to
pay for the difference in what you owe and what
the RV is worth. If you hand the RV back
to the dealer, though your credit is likely to be
negatively impacted.
Speaker 5 (29:43):
That's going to affect.
Speaker 1 (29:44):
Every other realm of your finances for years to come.
So I guess that's what we want to avoid, is
you come out even worse on the financial side of
the equation and also having your credit smacked around in
the same time.
Speaker 4 (29:56):
That's true, Yeah, but I like what you're saying. Essentially,
you're saying to create this beautiful listing, right. And I
think another I think there's an emotional component too, of
just turning it into the dealership to where you don't
have to be done with it again. You don't want
to see it anymore because you're just sick of it.
And I think by like making yourself see it a
little bit, there's like there's a chance you would internalize
the positive lessons than the takeaways from this a little
(30:18):
bit more were you to then just say, Okay, I'm
I'm just gonna pay whatever it takes. Something else I
think that's worth considering is renting it out. You've got
this RV, I don't know, can you sort of turn
it on its head a little bit and see this
maybe as an asset as opposed to a liability. Outdoorsy,
this is a cool site where folks can rent out
their RVs, and I think it might be worth browsing around.
(30:41):
Look like, peruse a little bit, see how much you
could potentially make with an RV given where you currently live.
Speaker 5 (30:47):
Because if you're.
Speaker 4 (30:47):
Able to turn your RV from a cash drag into
a monthly net positive, well, you might be able to
avoid your fate of selling that thing out a substantial loss.
Either it becomes a side hustle that makes you a
little bit of money every single month, or it at
least allows you to hold onto it for longer as
you continue to pay off that balance, so that you
don't take a thirty thousand dollars bath that you can't
(31:09):
afford all at once. I think it's at least worth considering.
And Joel, this totally reminds me of one of the
original Town of Money episode or back in the day
it was poured out poor but was it like episode
two or three?
Speaker 5 (31:20):
Whatever?
Speaker 4 (31:21):
But like you and Emily were considering getting an airstream,
right that you're gonna put in your backyard and you're
gonna bad.
Speaker 5 (31:28):
Is gonna be super cute? Yeah, li'st that thing on Airbnb.
Speaker 1 (31:31):
We have a friend who's done exactly that, and he
has crushed with his area. Like, I think about how
much he spent on that and what he's turned it into.
He's turned it into a like essentially a literal gold
mine that it's in his backyard, super cute and the
value has not really declined much. And yet he has
continued to make money on it month after month after month.
Speaker 5 (31:48):
And yeah, I went with you, took a picture of
you sitting in it and everything. He's always very seriously
considering by that thing and this.
Speaker 4 (31:55):
You're right, she's already got it ranted. Maybe is not
as cute as like a vintage airstream or anything like that.
Speaker 5 (32:01):
She says, RV.
Speaker 4 (32:02):
So I picture it's got to be brown or it's
got to be tanned with brown highlights.
Speaker 1 (32:06):
Well, yeah, and if you might not go back in
time and make this decision to buy this RV for
this purpose, But now that you have it, can you
make lemonade out of elements? And if you do have
to take on additional debt, let's say, to cover the
gap in what you owe and what it's worth, we
would say, go to your local credit union to see
what they offer. You almost always get better terms than
you would at the bank. I'd also make a massive goal, Matt,
(32:26):
if I was tony, to try and pay off that
loan in short order, like.
Speaker 5 (32:29):
As fast as possible.
Speaker 1 (32:31):
Get a side hustle to bring in some extra income,
stick to a bare bones budget for a few months
to accelerate your cashlow. We have a whole episode on
creating a barebones budget, but it's essentially like an all
hands on deck, whatever it takes to eradicate this debt
sort of scenario. We all make financial mistakes, right, but
we want you to recover from this as quickly as possible,
and so to look at kind of straight in the face,
(32:52):
like Matt was saying, get the best terms possible for
selling this, so that you minimize your loss, and then
to attempt to improve your financial situation as quickly as
you can via increased income, reduce spending, or both at
the same time. I love it 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
(33:14):
two pm on Sunday and anytime on demand on the
iHeartRadio app
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