November 23, 2025 • 33 mins
It's getting harder to take advantage of high-end credit cards. Know the hurdles to earning rewards before you sign up for a card with an exorbitant annual fee!
Ask HTM: Tim wants to know about the ethical nature of filing a claim for a new roof when it's not truly damaged.
Tariff rollbacks on popular grocery store items are quietly happening. It's a tacit admission that tariffs create higher prices for consumers.
Ask HTM: Vicki wants to know if she should turn more of her investment dollars into Roth dollars.
See omnystudio.com/listener for privacy information.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:01):
I am six forty. You're listening to how to Money
on demand on the iHeartRadio app.
Speaker 2 (00:08):
Let's spend some time talking about credit cards, Joel, because
it seems like taking full advantage and maximizing the different
credit card rewards out there, it's basically becoming like a
part time job. Not only are the annual fees increasing,
but so are the hurdles for snagging those perks.
Speaker 1 (00:24):
Well, the fancy cards. We're talking like seven, eight, nine
hundred dollars a.
Speaker 2 (00:28):
Year if you are the type of person that's gonna
visit the lounges and take advantage of all that they
have to offer more power to you. But the potential
dollar value of those perks offered with the annual fee,
of course, it has grown significantly, but accessing those perks
has certainly come with roadblocks. The rewards are functioning more
like like old school coupon books, to the chagrin of
(00:49):
many users who are just used to at least for me,
I like things to be simple and the ability to
get some cash back. You know, they're straight up it's like, oh,
you can get this reward in this quarter, but then
you got to spend more money next order to get.
Speaker 3 (01:01):
More of that reward.
Speaker 2 (01:02):
Never was a fan of that, rotating the rotating categories. Yeah,
but then there's like quarterly credits, there's monthly rebates. They
are all a part of the credit card company approach,
hoping that the deals are gonna actually sound better than
they function. Then they actually impact your bottom line, and
the data shows a fewer high end reward card users
are actually getting the benefits beyond the what they're paying
(01:22):
in the annual fee, and so they're not actually you're
not coming out ahead. The credit card companies are, and
in an attempt to maximize the rewards, some users are
opting for spreadsheets, which makes a ton of sense because
if you are going to play the game, you better
play it right, while others like me are just throwing
in the towel.
Speaker 3 (01:38):
So I think it's okay to downgrade.
Speaker 2 (01:41):
It's I think it's good to even cancel an expensive
card if it's not working for you and going with
something a bit more basic.
Speaker 1 (01:46):
Yeah, which is interesting, Like usually we're kind of against
the cancelation of credit cards for the sake of your
credit score, but chances are if you have a great
score and you've got a card with the high annual
fee that you're just not getting enough rule awards from.
You're like, I'm paying the ANLFE, but like I either
have to manufacture spending. I'm spending more than I want to.
It actually has become like a pain in my butt.
(02:07):
How much is this actually doing for me versus a
straight up just two percent cash back card that I
don't have to think about. If it's overwhelming you or
the rewards just aren't worth it, then reconsider yeah, and
downgrade or even cancel, especially if you don't need to
use your credit score for a big purchase in the
near time near future, like getting a mortgage or something
(02:28):
like that. It is kind of crazy how complicated some
of these rewards cards have gotten and met. There's a
new credit card on the scene that I just saw
from US Bank, and this one is actually not similar
to the high end rewards cards. It's an attempt to
merge a credit card and buy now, pay later. You know,
(02:49):
this is not something the hybrid model we're going to
be fans of. Yeah, I like hybrids, like a Prius
or something like that, but not not in terms of
like emerging of credit cards and buy now, pay later
instead of paying off the full balance at the end
of the month. With this card, you can pay off
your balance over the course of three months instead for
a fee. Of course, you got to pay extra for
that privilege. And I just don't like credit cards becoming
(03:11):
more like by now pay later. Credit cards are awesome,
not because they're debt products, but if you use them properly,
they offer perks, they offer protections for you as a consumer.
And so if you're just if you're just using it
as a method of payment to do the buying that
you already would have done and paying it off in
full at the end of the month, credit cards can
(03:32):
be an excellent way to facilitate purchases. But using any
payment method to extend your buying timeline because you don't
have the cash, that's a red flag. So if you're like, oh,
this credit card is great, not because of the perks,
but because it allows me to pay off the item
I bought further down the road, I don't like that.
So I'm really not a big fan of this new
(03:52):
US Bank credit card.
Speaker 2 (03:53):
Yeah, yeah, you said there's a new card that you
recently read about. It's not the card I thought you
were gonna mention the card that I came across recently
that I applied for is the new robin Hood card,
the new robin Hood.
Speaker 3 (04:03):
Gold card three percent. That's pretty good.
Speaker 2 (04:06):
It's like across the board cash back, which is first
of its kind right there. I don't think there has
been any other card, and so I quickly applied and
got it. And I haven't read all the details on
it yet, but we certainly will let folks know. I
did see that. It's when did a launch? Well, they
announced it last last year. I want to say, we
talked about it, and it's been sitting around, I think
as they're trying to figure things out. But the actual
(04:27):
at least for me maybe other folks have been it's
been trickling out. But I it showed up in my
email the other day and I hit apply now and
filled out the information and they said it's going to
be showing up and sometime next week. Is there an
annual fee for that card or is it just a
robin Hood Gold member. Technically there is, because it's to
be a robin Hood Gold member, you're paying five bucks
a month or like fifty or sixt sixty eight years
(04:48):
slightly discounted. So technically there's not a direct annual fee
for the card, but there kind of is. But that
being said, then you get the additional benefits of being
a robin Hood Gold member, right with a match of
the only or one of the very few non employer
IRA matches that's that's being provided out there. So just
rob robin Hood's making it more and more enticingly.
Speaker 3 (05:08):
They're make they are making it attracted, Like.
Speaker 1 (05:10):
Every time they announced something awesome, they also now something
that I'm like a little wary of. I know, yeah,
you just have to pick and choose the benefits that
you want to access with Robinhood three.
Speaker 3 (05:18):
Percent though across the board.
Speaker 2 (05:20):
I am really curious to see if this is going
to replace like my City Double Cash card for just
like all the standard purchases. But well, okay, so actually,
while we're talking about Robinhood, did you see that they
are offering this whole thing where they can bring cash
to your doorstep. It's like Uber eats, but ye for
dollar bills.
Speaker 3 (05:35):
I did. I saw that. It seems like there was
a whole lot of other ways.
Speaker 2 (05:39):
Well, it's like seven bucks in order to get cash
delivered to your front door.
Speaker 1 (05:45):
Unless you're a Robinhood Gold number right, or if you've
got at least one hundred thousand dollars in assets with Robin,
So for me, it's like three bucks or something. Yeah,
per cash delivery as opposed to which is lower than
a regular ATM fee.
Speaker 2 (05:56):
But you folks should be with a bank that reimburses atmfees.
We don't have a bank that does that. You should
then be if you need cash, which is a rare occasion,
you should be getting cash back with your debit card
once in a blue moon whenever it is that you
need to do that, which you can do at a
grocery store or Facebook marketplace. I just listed something and
the lady was like, can I come by and bring cash?
(06:17):
I was like, no problem, cash is accepted at the
All Mix household. You don't know, because that is honestly
how we get cash, like in our coffers at home,
to be able to pay the kids, Like I can't
literally remember the last time I went to an ATM
or got cash back. It's truly because of this kind
of rotating stash of cash that we have that the
kids earn money for jobs and then pay back to
us when they want to buy something.
Speaker 1 (06:38):
Yeah, all right, we've got actually more to get to
on today's show.
Speaker 2 (06:42):
I am six forty. You're listening to how to Money
on demand on the iHeartRadio app.
Speaker 1 (06:48):
This is how to Money. I'm your host, Joel Larsgard,
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. All right, let's
get to a question. This one is specifically about insurance
(07:12):
and I don't know, maybe pull the wool over your
insurance company's eyes.
Speaker 4 (07:16):
Hey, Matt and Joel, this is to him from Mount Prospect, Illinois.
I greatly appreciate all the financial and non financial advice
you guys have given over the years. I can honestly
say that I am living in all around healthier lifestyle
thanks to you guys bringing up books like The eighty
eighty Marriage and Born to Run.
Speaker 3 (07:29):
A question for you guys today is in regards to.
Speaker 4 (07:31):
These companies going around our neighborhood handing out flyers advertising
that can help you get a free roof through insurance
due to wind and hail damage. On the other side
of this coin, insurance companies are saying that premiums are
going up because of the increase they are seeing and
paying out these types of claims.
Speaker 3 (07:46):
This led to a friendly debate with one of my buddies.
Speaker 4 (07:48):
Would you enlist one of these companies since you are
already paying higher premiums as a result of others doing it,
or would you pay for the new roof yourself so
you are not contributing to the problem. I look forward
to hearing your guys' thoughts. Thank you, Joel. You know
exactly what Tim's talking about.
Speaker 2 (08:03):
You get these texts as well, right, oh yeah, and
so I just I just pulled up my phone.
Speaker 1 (08:07):
Sometimes it's legitally people just knocking on your door or
leaving a flyer in your mailbox too.
Speaker 2 (08:11):
I get more often than not texts, like maybe I'll
get like two a year as far as folks coming by,
but more than off, like more often than not their texts.
And literally in the past month, I just looked, I've
had four people reach out and they say, hey, we've
got a crew in the area, or we've got an inspector.
We'd love to swing by and see if there's any
damage to your roof.
Speaker 3 (08:31):
I don't like it.
Speaker 1 (08:31):
It's about to be five because I'm gonna text you later. Okay,
I'm gonna talk about the roof. Yeah, it's funny. I
had a friend growing up and his dad would do this,
but not the fly by night kind of thing. He
would literally go to areas of experienced storm damage with
his company and that was his job, like to go
to the part of the country that had just recently
experienced some sort of natural disaster, and then you work
(08:51):
to get quotes for people to get things fixed, which
makes sense. We haven't had a natural disaster in our area.
Mat this is not uh, there was no tornado that
just ripped through our neighborhoods causing dam or hailstorm causing damage.
And so this is one of those things where, yeah,
the question is partly financial, but it's also moral, right,
And this actually reminds me of a recent Econ Talk podcast,
(09:14):
one of my favorite podcasts. It's been around for like
twenty years, but the conversation was about Ross Roberts. Oh yeah,
he's awesome, And so this one was about the shampoo
bottles in hotels, and it's it's it sounds like the
most random conversation. But why is it that we think
it's fine to take small three ounce bottles of shampoo
home with us? But now that hotels have largely migrated
(09:35):
to using the bigger, wall mounted bottles, which.
Speaker 3 (09:37):
I love, which is great.
Speaker 1 (09:38):
Way probably makes sense for a money saving perspective for
them to.
Speaker 3 (09:41):
Pump you just yeah, but then you don't get to take.
Speaker 1 (09:44):
It home with you, right, which I think some people
they met, like the guy that was being interviewed, has
apparently a treasure trove of these three ounce shampoo bottles
and he loves them.
Speaker 3 (09:52):
I hate them. They're so hard to get the It's like,
why I like the pump.
Speaker 2 (09:56):
It's like the old ketchup bottles, Yeah, trying to get
the ketchup out, but even tiny and yeah, I don't
like so. But of course we wouldn't dream of putting
the full size bottle in our suitcase, right, Sure, that'd
be cheap. Yeah, exactly, And I think this is a
point I get arrested. The whole conversation is centered around
this point, where money saving maneuvers are acceptable, like putting
more money in your four O one K to reduce income,
(10:16):
and then maybe where others cross the line, like hiding
income or lying to reduce your taxable income. And some
things are literally just like could get you in legal
hot water, but others are just we find them repulsive
or we know that if our neighbor told us about
it that we would be like, oh dude, I don't know, man,
that's pretty ridiculous, Like nobody does that.
Speaker 1 (10:38):
Why would you do that? Yeah, maybe you can get
away with it, but it doesn't make it right.
Speaker 3 (10:42):
Yeah.
Speaker 2 (10:43):
I mean, I think everyone has a different line, which
is a part of what makes the frugal versus cheap
questions so interesting. But I do think that there's always
a window of acceptability, like where the vast majority of
folks can at least understand why someone would come to
that conclusion. That being said, we wouldn't be able to
use this method to file acclaim with the clear conscience.
First of all, many of the companies that do business
(11:04):
in this way are fly by night, right, and so
I think the chances are that the job has done well,
that they do a good job. It's pretty slim the
kind of companies that would try to get you to
file a claim for damage that wasn't actually done to
your roof. Are likely going to be the companies who
don't take as much care when they're repairing or replacing
(11:26):
your roof, suspect that they would be a high quality
company putting doing it properly. And I think the primary
thing is they're just looking for the paycheck from the
insurance company, right, like they're waiting on that fat check,
and then they're moving on as quickly as they can.
Speaker 1 (11:38):
And so part of that is because they're not maybe
an actual company who does business in your community, who
thrives or at least exists on good reviews from people
who live in the community, right, And if they are
more of a fly by night company, that's not what
they care about. And if they don't care about community reputation,
then it probably means they're not as beholden to how
(11:58):
you think of them, which mean inferior service.
Speaker 2 (12:01):
Sure, the incentives aren't aligned for them to do a
good job. They're literally there to get the project started,
to get the check, and then they move on.
Speaker 1 (12:08):
And typically these companies can find something to report that
justifies a new roof, right, But does it really feel
like the right thing to do to get them up
on the roof, to file a report that might or
might not pass muster with the insurance company. As my
mom would say, Matt, if everyone was going to jump
off a bridge, would you do it too? Did your
(12:29):
mom ever say anything like that to you?
Speaker 2 (12:31):
No?
Speaker 3 (12:31):
And I literally jumped off bridges.
Speaker 2 (12:32):
So the answer for Matt was yes, but she she
didn't know I was jumping off the bridges and it
was into a river and we would check out that.
Actually we didn't check out the river before we jumped
into That's that's my biggest regret looking back. We could
have really messed ourselves. You always, yeah, you always gotta
if you're going to do these kids check I always
make sure there's no Yeah, check the dept. Make sure
(12:53):
there's no trees down there.
Speaker 1 (12:54):
Hey, let's assume there's no water below, especially if people
are jumping off the bridge, like you're not going to
follow them to their DEMI because everybody's doing it. And
I think that was my mom's point, although you might
not have understood.
Speaker 3 (13:07):
It, like, yeah, it sounds like fun.
Speaker 2 (13:08):
You lived my.
Speaker 3 (13:09):
Out going up.
Speaker 1 (13:11):
But even if let's say this roof for was to
do a top notch job, giving you a fantastic roof
to enjoy for decades to come. You still pay deductible,
which is far less than the cost of the new roof,
but that will also increase your insurance premiums for years
to come and your ability to switch insurers to save
because that claim goes on your clue report, and that
clue report is kind of behind the scenes that when
(13:32):
you say, hey, I'm trying to go from State Farm
to Liberty Mutual, Liberty Mutual says, hey, well, you found
that claim with State Farm for the new roof, so
we're either going to charge you more or not accept you.
So that could prevent you from saving money in the future.
And I think, but I think, really, Matt, you agree
this too. Is my guess is that the most important
thing at the heart of this question is it feels
like cheating your insurance company. It reminds me of the
(13:53):
stories of people just massively abusing Costco's return policy. Hey,
I got these tires four years ago there bald as
a mother now, but I'm going to return them because
your return policy says that I can. Ye, and everybody
who has any sort of conscience or like moral care
or qualm decency. Decency is going to say, yeah, I
(14:16):
don't do that. We don't do that. That's ridiculous. That's
abusive of a company that is actually great and offers
offers a solid product at a reasonable price. So I
think if you truly experienced hail damage and you need
to file a claim, do it. But if it's a
bogus claim and an attempt to get a new roof
that you don't deserve, that you don't need, that isn't
truly damaged, don't do it.
Speaker 3 (14:37):
Yeah, this is why we can't have nice things.
Speaker 2 (14:39):
That's the phrase that comes to mind when I hear this, right,
because people are abusing the system, even though technically speaking
it might be allowable. But that's unfortunately, it's just the
tendency of society to be moving in this more lawfair
sort of direction where things are contested as opposed to
just having character like doing the right thing.
Speaker 3 (14:59):
And also, I don't want it to make.
Speaker 2 (15:00):
It sound like that we're like running tim through the
ringer here, like truly, if there is damage that has
been afflicted upon your roof, then like yeah, like Joel said,
that is totally something that you can do. But there's
a difference between like the heart of the law and
like the letter of the law basically, yeah, and then
the heart of the law.
Speaker 3 (15:17):
Or that you're getting at here is not like.
Speaker 2 (15:20):
Every time something happens to your roof that you are
entitled to a new roof basically yeahah, well again, Yeah,
it's this collective action problem where if everybody does it,
it's going to lead to higher insurance rates across the board.
Speaker 1 (15:30):
But it's also going to lead to higher insurance rates
for tim or for his friend. He said, this was
a conversation with his friend.
Speaker 2 (15:35):
What if you two, whoever does this is going to
see increased premiums, you know, for themselves as well.
Speaker 3 (15:39):
Totally, Yeah, it's costing all of us money.
Speaker 2 (15:42):
And I totally get the impulse to, you know, take
the smooth talking rover up the inspector, take them up
on there. Hey, let me hop up there all, take
a look around, see what's going on. But you know,
I think some folks unwillingly file a claim. They move forward.
But this is ultimately why we're seeing rates rise across
the board for all of us. But one thing to
keep in mind know that insurance companies they have gotten
(16:04):
wise to this game, and they are pushing back a
bit more forcefully now. So even still, despite the allure
of a quote unquote free roof, I think that's ethically dubious,
and on top of that, aside from the ethics, from
a financial standpoint, it could end up coming back and
biting you in the butt.
Speaker 1 (16:19):
Yeah, you're spot on, my friend. All Right, Hey, we
got more money saving information to get to.
Speaker 3 (16:24):
This is Joel Larsgard and Matt Altmis.
Speaker 1 (16:26):
And you're listening to KFI AM six forty how to
Money on demand on the iHeartRadio app. This is how
to Money. I am Matt Altmis and I'm Joelarsgard. Don't
forget to sign up for the how to Money newsletter.
You can find that up at how tomoney dot com
slash newsletter.
Speaker 2 (16:42):
Joe, how do you feel about what prices have been
How do you specifically feel about tariffs and enforcing the
hand of the market and getting other countries to pay
the high prices in order to bolster US manufacturing.
Speaker 3 (16:52):
And I've talked about this a little bit on the show.
Speaker 1 (16:54):
I think it's so fastinting that so many people who
were anti tariffs and pro free markets started to buy
into the fact that like, oh, yeah, tariffs are the solution,
it's to all the ales that we face. And I
just don't think they are. And I think are finally
starting to catch up with us.
Speaker 2 (17:07):
I had as prices are solely starting to catch up trices, right,
that's right. And I was hanging out with a friend
recently and he was talking about a big company that
he works for, a water sports company and you would
recognize the name. They make a lot of stuff, and
he said he was talking about the impact of tariffs
on the company, and he's like, we've been eating the tariffs,
(17:28):
like we've had to, you know, reduce staff, We've had
to really watch costs. It's it's been really like tough sledding.
And we're not a big enough company where we have
the ear of the president to roll back tariffs on
our specific items that we're that we're working on, and
so it's been He's like, well, pretty soon those prices
are going to have to go up, like they just are.
(17:48):
And and so I think we're starting to finally see
that that pre buying of the inventory has It takes
a while old, Yeah, it takes a while for to
trickle through the system. Before, like the information, like the
feedback loop it takes. It's not something that you can
measure within a couple months. Right in a few months,
it's going to Yeah, I would not be surprised to
see things change dramatically if we're not wanting to continue
to see prices rise well without an end insight.
Speaker 1 (18:11):
I think the place where we've seen maybe the most
impact of tariffs more quickly has been at the grocery store.
And at least like the President is starting to realize
that higher prices at the grocery store are annoying Americans,
that they're frustrated by paying more for things like bananas
and coffee and beef, and so this he just opted.
(18:33):
I think it was Friday, after our show came out,
Matt he said that he's going to roll back tariffs
at the grocery store on specific items, on dozens of items,
and so it feels like this like tacit acknowledgment. I'm
not going to say it out loud, but yeah, I
guess they are causing higher prices. So I'm going to
roll them back on some things that people notice when
they're going, you know, because we buy groceries multiple times
(18:54):
a week typically, and so yeah, in some categories in particular,
inflation has been incredibly high. Steak, coffee, bananas, and well,
guess what, we can't grow much coffee in the United States. Oh,
guess what, we can't really grow bananas in the United States.
So all the tariffs were doing with leading to higher prices.
It was attax on consumers and people are frustrated to
(19:15):
see steak costing twenty dollars a pound when it costs
twelve dollars a pound in January. And so, yeah, the
tariffs jackut prices across the board. It's good to see
at least a little recognition of that from the White House.
It'd be nice if we didn't have a willy nillie
tariff regime going on, but at least.
Speaker 3 (19:32):
We will see some relief on some of these items. Yeah.
Speaker 2 (19:35):
Basically, terriffs act as attacks to us as US consumers,
which just basically make things more expensive. But consumers, we
can't do much about higher prices that stem from bad
policy specifically, but folks are reacting intelligently by spurning beef
instead for chicken. So Tyson reported that b sales continued
to decline and chicken is through the roof. It's rising
(19:58):
quite significantly in popularity. It's up twenty eight percent year
over year, which makes sense when a whole chicken is
like a fraction of the cost of beef. I think
it's something like ninety nine cents a pound as opposed
to ground beef, which is around six dollars per pound.
But Jill, you know, one of the other ways that
you can combat the high prices of beef and specifically steak,
(20:19):
is to get in on sale. And this is something
this is I'm going to celebrate a little Costco win,
which is that they were offering whole slabs of ribbi.
Oh you did this, didn't you?
Speaker 3 (20:30):
So well you okay, I told you about it. You
told me about it, and I was like, so, Joel
said he. I did not partake because it was like
still really expensive.
Speaker 2 (20:37):
Joel said, Hey, they've got prime ribbi at Costco, the
whole side of the cow basically, and it's seventy five
bucks off per package. And You're like that's crazy. I
was like, yeah, did you crunch the numbers? And You're like, well, no,
it's just because you're still paying hundreds of dollars. Yeah,
for thos much meat, So was the price per pound?
Well what next time I went there, they were still
(20:57):
there because I think a lot of folks were still
scared off by paying hundreds of dollars. But I did
a quick calculation and it brought the price down to
fifteen dollars a pound for Prime Ribbi, which is dude,
this you can't get prices at low. It's been like
four or five years since I bought Prime Ribbi at
fifteen bucks is a little bit less because everyone knows
(21:18):
that when they do the discount per package, you go
for the smallest package package in order to maximize that discount.
So dude, massive win. I'd never done that before. I
didn't tell you because I wanted to save it for
the show.
Speaker 3 (21:29):
Home over at your house for Ribbi, I guess.
Speaker 2 (21:31):
But of course it's a whole thing, so you do
have to slice it. But that was actually kind of fun.
It was interesting to see like, oh, this is how
the Rabbi steak takes its shape, this is the meat
and cutting up cutting up your own steaks at home,
you know, with a giant knife on the cutting board.
Speaker 3 (21:44):
Or your butchering skills. Not bad.
Speaker 2 (21:46):
Okay, So the cup I will say, the steaks on
the end don't quite look like Ribbi's right like, but man,
all the cuts in the middle they look like just
like they do when they cut them there at Costco.
They're even more uniform though, because they always include one
like thinner one or one really weird thick one in
the packaging for or something like that.
Speaker 3 (22:03):
Dude, I was like laser.
Speaker 2 (22:05):
I didn't pull out a laser level or anything like that,
but I was just looking at it, making sure each
steak was was cut perfectly. Put a bunch of those
in gallon bag stuck in the freezer so they wouldn't
get bad. But you like, that's that's one of the
ways you also can combat some of these high beef prices,
not just by opting for something different, but look looking
for some of those massive sales and yeah, you got
to be okay with stomaching a few hundred dollars spent
(22:27):
that you're not going to consume for probably a month
or two.
Speaker 3 (22:29):
Yeah, you are listening to how to Money.
Speaker 2 (22:32):
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 3 (22:41):
I'm joelars Guard and I am Matt Altmix.
Speaker 2 (22:43):
If you are over 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.
Speaker 1 (22:52):
Now, let's take a question now from a listener who
wants to rothify more.
Speaker 3 (22:57):
Of her money himnd Well, this is Vicky from Ohio.
Speaker 5 (23:01):
I'm an average earner around sixty nine thousand a year.
I max out my HSA and my WROTH every year.
I wanted to know if I can put money into
my four oh one k at work and transfer it
over do a ROTH conversion to my ROTH.
Speaker 3 (23:24):
Thank you for your help.
Speaker 5 (23:25):
I really enjoy your show.
Speaker 3 (23:26):
I've learned so much. Bye.
Speaker 2 (23:30):
All right, Vicky, First off, could I just say that
you are a total boss, the fact that you are.
She's got an annual income of around seventy thousand dollars,
she's maxing out her roth IRA and her HSA, and
she didn't mention a family, so I'm assuming that she's
talking about the single version of the HSA for an
individual as opposed to a family that's over eleven thousand dollars,
(23:53):
which totally is not easy. In total Yeah, that's not
easy to do with seventy thousand dollars income and sot
so much.
Speaker 1 (24:02):
Riz as the kids would say, Matt, Yeah, I don't know.
I think does I like to use those terms twenty
twenty four inappropriately just to make myself sound even older.
Speaker 3 (24:10):
Actually, which is what it in fact does.
Speaker 1 (24:13):
That's my favorite thing to do so now that people
know I'm truly middle aged. But yeah, no, for real,
like maximum both those retirement accounts on that salary is incredible.
Speaker 2 (24:22):
It's really impressive, and it just adds. I hope it's
encouraging for a lot of folks who hear this. They
hear that and they're like, oh man, that's about what
I make. Actually, oh wow, that's possible. She's doing it.
She's been doing it. Yeah, and on top about that,
she's looking to do even more.
Speaker 1 (24:34):
It makes me think of my conversation not too long
ago with Hope from under the Median and their family
has essentially made average of forty thousand dollars for their
entire working lives, and she talks about how they were
able to buy a home in cash and pay off
home quickly, like they just all the things that they
were able to do, and that's such an inspiring episode
(24:54):
because of their attention to detail and frugality. Not everybody
wants to go out there and find a job that's
incredibly stressful that's going to pay them one hundred and
fifty grand a year, because let's be honest, sometimes the
more money you make it means the more you have
to trade off living your life. And so Vicky is,
I don't know what she's doing, whether she loves her
job or not. Put it, I will say she's from
(25:16):
a numbers standpoint, she's doing a great job, totally crushing it. Yes,
it does make me think too, she's from She says
she's from Ohio, and Ohio has the lower cost of
living rate or whatever. Sure, it has an actual lower
cost of living compared to the rest of the country.
So I don't know what city she's in. But that's
something else too that maybe there's.
Speaker 2 (25:32):
A quick takeaway here for folks to hear that and
think that's it would be impossible for me to set
aside that amount of money where I live. Well, yeah,
you could also con and I'm not saying completely uproot
your life, but there are certain things that you have
control over. Yeah, And I think it's worth considering cost
of living, and maybe Vicky actually like lives out in
the country, so maybe she's not even in a city, right,
(25:53):
and so she's maybe for her this is easy, this
is cake.
Speaker 1 (25:56):
I also think there's something about Midwestern value use, and
I don't know, maybe maybe that sounds ridiculous, but I
do think frugality is kind of like baked into the
cake of how Midwesterners function, at least on average, right
as like, looking from the outsiders, as someone who's visited
regularly places like Ohio and Wisconsin, the people I meet there,
frugality seems to be less like dorky.
Speaker 3 (26:19):
It's more just kind of this is normal.
Speaker 1 (26:20):
Where if you live in La it's like frugality, yeah,
And so I think there is something to that where
if you live in a place where all the heart Landers,
people don't care if you're wearing a Kirkland signature sweatshirt
and jeans versus.
Speaker 2 (26:32):
Better not because we're over here drinking ye Corkland sig beer.
I know, but like you're not getting into that in
the club in West Hollywood or something like that. So
I don't know, maybe it's easier to pull off in
Ohio as well. For that reason, you've made yourself sound
old yet againsh. I know, I'm really good at that.
You fit your quota for the show. Oh, there's more
to come. So the accessibility that Viggie's going to have
(26:55):
right is going to help her out too. If she's
attempting to retire early. I don't know she is, but
the HS and the Roth IRA those are very flexible accounts.
But she's looking to do even more, which of course
we love. And the first thing to note, by the way,
is that you you might not have to do a
Roth conversion. Many employers offer a Wroth four O one
K option. Picky Set's worth looking into that. I think
(27:15):
last I read something like ninety percent of employers make
a Wroth four A one K option available, So it's
getting pretty ubiquitous at this point, which means you wouldn't
have to do anything other than just contribute directly to
that account, and you probably should do that if it's
available to you. Right, if you were making like three
hundred thousand dollars a year, we'd probably say stick with
(27:35):
the traditional four oh one k, But given your income level,
I think Wroth everything is totally fine.
Speaker 3 (27:42):
Potentially an awesome approach. So if there's a ROTH four
O one.
Speaker 1 (27:45):
K available where you work, I don't know, Matt, I'd
i'd be strongly considering that.
Speaker 2 (27:48):
Yeah, yeah, So check with your with HR or looking
to do your benefits to see if that's something you
can do right directly contributing to that WROTH four one
K that would be the simplest path forward, although it
help you if you were looking to be able to
draw down on some of those those contributions if you're
looking to retire early. But let's assume though that your
employer does not offer a rough four o one K,
(28:11):
and let's just say you you know you want to
get more money into your actual ROTH IRA. To your
specific question, the answer is yes, if your company allows
in service rollovers, you're allowed to contribute money to your
four oh one K. And by the way, I hope
you're getting a match for doing so, for contributing to
that four on k. But then you would do a
direct rollover of four to one K dollars to an IRA.
(28:33):
But that is a big if though, And I'll say,
if you're with a low cost brokerage, a low cost provider,
it certainly makes sense to keep it with that company,
keep it under the same umbrella essentially. But then what
you're able to do is convert the traditional IRA dollars
into Roth dollars. It's a few steps, but you can potentially,
like Joel said, rathify those dollars. Do keep in mind
(28:57):
that you're gonna be paying tax on this, right, and
so it sounds like this is something you're looking to
do moving forward. It's not like you've got seventy five
thousand dollars worth of four and K contributions sitting there
to where you'd be stuck with a big old fat
tax bill all in a singular year.
Speaker 3 (29:13):
But that she does.
Speaker 2 (29:14):
If you do keep that in mind, you're going to
have a big old tax bill. But just yeah, no
moving forward that you are not getting a deduction for
those four and K contributions.
Speaker 3 (29:22):
Yeah, yeah, I think that's a really important thing to mention.
Speaker 2 (29:26):
And taxes are a big consideration when you are looking
to change the tax What is it the tax character
of these dollars?
Speaker 1 (29:33):
Yeah, and so and when and how much like those
are really those are really important questions. And the truth
is you if there is a big lump summon there
that would push you to think through that in a
more holistic way, about.
Speaker 3 (29:46):
More gradual way.
Speaker 1 (29:47):
Perhaps, yeah, maybe I do this over the course of
a number of years instead of doing this in one
fell swoop.
Speaker 3 (29:52):
And actually, I don't know.
Speaker 1 (29:53):
Maybe because I'm still making money and I think I'll
make less money once I retire, maybe it makes sense
to actually hold off on some of those recharacterizations from
traditional to ROTH until I look like I'm making less
money to the irs, right, because I am, because I'm
not working anymore, And that is often a great time
makes me think of that conversation with Cody Garrett that's
(30:15):
worth listening to as well, talking about when you turn
money that you've invested from traditional into ROTH. I think
it's really important to think through that so you can
pay less tax overall on those dollars over time. We
should also mention that so much depends on your current
tax bracket and your likely tax bracket in retirement, because
ROTH isn't always a slam dunk, especially on the four
(30:37):
to one case side. I think the ROTH ira if
your income allows makes sense for almost everybody pretty much
all the time. Roth iras are great, but if you
think your income is going to increase quite a bit.
I think it sways things in favor of the roth
even more so if you're like, hey, I'm making seventy
grand now, but I see this path, I'm probably going
to be increasing my income significantly. That makes like time
(30:59):
of the esa to get money into the roth right
as you know, as many dollars as you can get
into the roth Roth vehicles. Now, if your income is
going to go up, then I think it's a beautiful
thing of valiant attempt to try to get as much
as you can. And if you think your income is
going to decline, like let's say you are going to
retire soon and it's going to go down in a
(31:19):
big way, well does the opposite right. I think it
incentivizes putting money into traditional vehicles, traditional formal k traditional ira.
And don't forget that once you reach the age of fifty,
you're going to be eligible for catch up contributions. This
means you can contribute an extra one thousand dollars straight
into your roth ira at that point in time into
and you can put extra into the four one K
(31:40):
or WROTH four O one k if you find you
have that available. So take note of that.
Speaker 3 (31:44):
The viggies. You're seeing the viggies old. I don't know
how old she is. I know I'm old. I know
I'm getting closer to that. Jill's looking at it. He's like,
catch up contributions, baby.
Speaker 1 (31:52):
That's the only sexy thing about turning fifty in my opinion,
right or I don't know.
Speaker 3 (31:57):
I think actually, I think there's plenty of great things.
But I'm actually even more great gray hair in the mustache.
Speaker 1 (32:03):
Oh yeah it is coming. But yeah, being forty one
has been surprisingly pleasant, and so I actually am not
I'm not nervous about aging, and I guess the last
thing I would suggest for VICKI is to not forget
about taxble brokerage accounts because if you're like, oh man,
they don't offer the WROTH for one K, well, taxable
brokerage accounts are another great way to invest. Yes, you're
going to pay tax on the gains right and you're
(32:26):
not getting the same tax break that you are for
contributing to a traditional account right now or a ROTH
account in the future where you don't pay tax on
the earnings. But that's still a great account. If you
have more money you want to invest and you don't
have access to some of these other great accounts, or
you're kind of capped essentially by the contribution limits.
Speaker 2 (32:46):
I love it okay, you are listening to how to
Money on KFI Am six forty. You've been listening to
how to Money with Joel Larscard and Matt a mix
and you can always hear us live on k I
AM six forty twelve to two pm on Sunday at
any time on the iHeartRadio app
I am six forty. You're listening to how to Money
on demand on the iHeartRadio app.
Speaker 2 (00:08):
Let's spend some time talking about credit cards, Joel, because
it seems like taking full advantage and maximizing the different
credit card rewards out there, it's basically becoming like a
part time job. Not only are the annual fees increasing,
but so are the hurdles for snagging those perks.
Speaker 1 (00:24):
Well, the fancy cards. We're talking like seven, eight, nine
hundred dollars a.
Speaker 2 (00:28):
Year if you are the type of person that's gonna
visit the lounges and take advantage of all that they
have to offer more power to you. But the potential
dollar value of those perks offered with the annual fee,
of course, it has grown significantly, but accessing those perks
has certainly come with roadblocks. The rewards are functioning more
like like old school coupon books, to the chagrin of
(00:49):
many users who are just used to at least for me,
I like things to be simple and the ability to
get some cash back. You know, they're straight up it's like, oh,
you can get this reward in this quarter, but then
you got to spend more money next order to get.
Speaker 3 (01:01):
More of that reward.
Speaker 2 (01:02):
Never was a fan of that, rotating the rotating categories. Yeah,
but then there's like quarterly credits, there's monthly rebates. They
are all a part of the credit card company approach,
hoping that the deals are gonna actually sound better than
they function. Then they actually impact your bottom line, and
the data shows a fewer high end reward card users
are actually getting the benefits beyond the what they're paying
(01:22):
in the annual fee, and so they're not actually you're
not coming out ahead. The credit card companies are, and
in an attempt to maximize the rewards, some users are
opting for spreadsheets, which makes a ton of sense because
if you are going to play the game, you better
play it right, while others like me are just throwing
in the towel.
Speaker 3 (01:38):
So I think it's okay to downgrade.
Speaker 2 (01:41):
It's I think it's good to even cancel an expensive
card if it's not working for you and going with
something a bit more basic.
Speaker 1 (01:46):
Yeah, which is interesting, Like usually we're kind of against
the cancelation of credit cards for the sake of your
credit score, but chances are if you have a great
score and you've got a card with the high annual
fee that you're just not getting enough rule awards from.
You're like, I'm paying the ANLFE, but like I either
have to manufacture spending. I'm spending more than I want to.
It actually has become like a pain in my butt.
(02:07):
How much is this actually doing for me versus a
straight up just two percent cash back card that I
don't have to think about. If it's overwhelming you or
the rewards just aren't worth it, then reconsider yeah, and
downgrade or even cancel, especially if you don't need to
use your credit score for a big purchase in the
near time near future, like getting a mortgage or something
(02:28):
like that. It is kind of crazy how complicated some
of these rewards cards have gotten and met. There's a
new credit card on the scene that I just saw
from US Bank, and this one is actually not similar
to the high end rewards cards. It's an attempt to
merge a credit card and buy now, pay later. You know,
(02:49):
this is not something the hybrid model we're going to
be fans of. Yeah, I like hybrids, like a Prius
or something like that, but not not in terms of
like emerging of credit cards and buy now, pay later
instead of paying off the full balance at the end
of the month. With this card, you can pay off
your balance over the course of three months instead for
a fee. Of course, you got to pay extra for
that privilege. And I just don't like credit cards becoming
(03:11):
more like by now pay later. Credit cards are awesome,
not because they're debt products, but if you use them properly,
they offer perks, they offer protections for you as a consumer.
And so if you're just if you're just using it
as a method of payment to do the buying that
you already would have done and paying it off in
full at the end of the month, credit cards can
(03:32):
be an excellent way to facilitate purchases. But using any
payment method to extend your buying timeline because you don't
have the cash, that's a red flag. So if you're like, oh,
this credit card is great, not because of the perks,
but because it allows me to pay off the item
I bought further down the road, I don't like that.
So I'm really not a big fan of this new
(03:52):
US Bank credit card.
Speaker 2 (03:53):
Yeah, yeah, you said there's a new card that you
recently read about. It's not the card I thought you
were gonna mention the card that I came across recently
that I applied for is the new robin Hood card,
the new robin Hood.
Speaker 3 (04:03):
Gold card three percent. That's pretty good.
Speaker 2 (04:06):
It's like across the board cash back, which is first
of its kind right there. I don't think there has
been any other card, and so I quickly applied and
got it. And I haven't read all the details on
it yet, but we certainly will let folks know. I
did see that. It's when did a launch? Well, they
announced it last last year. I want to say, we
talked about it, and it's been sitting around, I think
as they're trying to figure things out. But the actual
(04:27):
at least for me maybe other folks have been it's
been trickling out. But I it showed up in my
email the other day and I hit apply now and
filled out the information and they said it's going to
be showing up and sometime next week. Is there an
annual fee for that card or is it just a
robin Hood Gold member. Technically there is, because it's to
be a robin Hood Gold member, you're paying five bucks
a month or like fifty or sixt sixty eight years
(04:48):
slightly discounted. So technically there's not a direct annual fee
for the card, but there kind of is. But that
being said, then you get the additional benefits of being
a robin Hood Gold member, right with a match of
the only or one of the very few non employer
IRA matches that's that's being provided out there. So just
rob robin Hood's making it more and more enticingly.
Speaker 3 (05:08):
They're make they are making it attracted, Like.
Speaker 1 (05:10):
Every time they announced something awesome, they also now something
that I'm like a little wary of. I know, yeah,
you just have to pick and choose the benefits that
you want to access with Robinhood three.
Speaker 3 (05:18):
Percent though across the board.
Speaker 2 (05:20):
I am really curious to see if this is going
to replace like my City Double Cash card for just
like all the standard purchases. But well, okay, so actually,
while we're talking about Robinhood, did you see that they
are offering this whole thing where they can bring cash
to your doorstep. It's like Uber eats, but ye for
dollar bills.
Speaker 3 (05:35):
I did. I saw that. It seems like there was
a whole lot of other ways.
Speaker 2 (05:39):
Well, it's like seven bucks in order to get cash
delivered to your front door.
Speaker 1 (05:45):
Unless you're a Robinhood Gold number right, or if you've
got at least one hundred thousand dollars in assets with Robin,
So for me, it's like three bucks or something. Yeah,
per cash delivery as opposed to which is lower than
a regular ATM fee.
Speaker 2 (05:56):
But you folks should be with a bank that reimburses atmfees.
We don't have a bank that does that. You should
then be if you need cash, which is a rare occasion,
you should be getting cash back with your debit card
once in a blue moon whenever it is that you
need to do that, which you can do at a
grocery store or Facebook marketplace. I just listed something and
the lady was like, can I come by and bring cash?
(06:17):
I was like, no problem, cash is accepted at the
All Mix household. You don't know, because that is honestly
how we get cash, like in our coffers at home,
to be able to pay the kids, Like I can't
literally remember the last time I went to an ATM
or got cash back. It's truly because of this kind
of rotating stash of cash that we have that the
kids earn money for jobs and then pay back to
us when they want to buy something.
Speaker 1 (06:38):
Yeah, all right, we've got actually more to get to
on today's show.
Speaker 2 (06:42):
I am six forty. You're listening to how to Money
on demand on the iHeartRadio app.
Speaker 1 (06:48):
This is how to Money. I'm your host, Joel Larsgard,
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. All right, let's
get to a question. This one is specifically about insurance
(07:12):
and I don't know, maybe pull the wool over your
insurance company's eyes.
Speaker 4 (07:16):
Hey, Matt and Joel, this is to him from Mount Prospect, Illinois.
I greatly appreciate all the financial and non financial advice
you guys have given over the years. I can honestly
say that I am living in all around healthier lifestyle
thanks to you guys bringing up books like The eighty
eighty Marriage and Born to Run.
Speaker 3 (07:29):
A question for you guys today is in regards to.
Speaker 4 (07:31):
These companies going around our neighborhood handing out flyers advertising
that can help you get a free roof through insurance
due to wind and hail damage. On the other side
of this coin, insurance companies are saying that premiums are
going up because of the increase they are seeing and
paying out these types of claims.
Speaker 3 (07:46):
This led to a friendly debate with one of my buddies.
Speaker 4 (07:48):
Would you enlist one of these companies since you are
already paying higher premiums as a result of others doing it,
or would you pay for the new roof yourself so
you are not contributing to the problem. I look forward
to hearing your guys' thoughts. Thank you, Joel. You know
exactly what Tim's talking about.
Speaker 2 (08:03):
You get these texts as well, right, oh yeah, and
so I just I just pulled up my phone.
Speaker 1 (08:07):
Sometimes it's legitally people just knocking on your door or
leaving a flyer in your mailbox too.
Speaker 2 (08:11):
I get more often than not texts, like maybe I'll
get like two a year as far as folks coming by,
but more than off, like more often than not their texts.
And literally in the past month, I just looked, I've
had four people reach out and they say, hey, we've
got a crew in the area, or we've got an inspector.
We'd love to swing by and see if there's any
damage to your roof.
Speaker 3 (08:31):
I don't like it.
Speaker 1 (08:31):
It's about to be five because I'm gonna text you later. Okay,
I'm gonna talk about the roof. Yeah, it's funny. I
had a friend growing up and his dad would do this,
but not the fly by night kind of thing. He
would literally go to areas of experienced storm damage with
his company and that was his job, like to go
to the part of the country that had just recently
experienced some sort of natural disaster, and then you work
(08:51):
to get quotes for people to get things fixed, which
makes sense. We haven't had a natural disaster in our area.
Mat this is not uh, there was no tornado that
just ripped through our neighborhoods causing dam or hailstorm causing damage.
And so this is one of those things where, yeah,
the question is partly financial, but it's also moral, right,
And this actually reminds me of a recent Econ Talk podcast,
(09:14):
one of my favorite podcasts. It's been around for like
twenty years, but the conversation was about Ross Roberts. Oh yeah,
he's awesome, And so this one was about the shampoo
bottles in hotels, and it's it's it sounds like the
most random conversation. But why is it that we think
it's fine to take small three ounce bottles of shampoo
home with us? But now that hotels have largely migrated
(09:35):
to using the bigger, wall mounted bottles, which.
Speaker 3 (09:37):
I love, which is great.
Speaker 1 (09:38):
Way probably makes sense for a money saving perspective for
them to.
Speaker 3 (09:41):
Pump you just yeah, but then you don't get to take.
Speaker 1 (09:44):
It home with you, right, which I think some people
they met, like the guy that was being interviewed, has
apparently a treasure trove of these three ounce shampoo bottles
and he loves them.
Speaker 3 (09:52):
I hate them. They're so hard to get the It's like,
why I like the pump.
Speaker 2 (09:56):
It's like the old ketchup bottles, Yeah, trying to get
the ketchup out, but even tiny and yeah, I don't
like so. But of course we wouldn't dream of putting
the full size bottle in our suitcase, right, Sure, that'd
be cheap. Yeah, exactly, And I think this is a
point I get arrested. The whole conversation is centered around
this point, where money saving maneuvers are acceptable, like putting
more money in your four O one K to reduce income,
(10:16):
and then maybe where others cross the line, like hiding
income or lying to reduce your taxable income. And some
things are literally just like could get you in legal
hot water, but others are just we find them repulsive
or we know that if our neighbor told us about
it that we would be like, oh dude, I don't know, man,
that's pretty ridiculous, Like nobody does that.
Speaker 1 (10:38):
Why would you do that? Yeah, maybe you can get
away with it, but it doesn't make it right.
Speaker 3 (10:42):
Yeah.
Speaker 2 (10:43):
I mean, I think everyone has a different line, which
is a part of what makes the frugal versus cheap
questions so interesting. But I do think that there's always
a window of acceptability, like where the vast majority of
folks can at least understand why someone would come to
that conclusion. That being said, we wouldn't be able to
use this method to file acclaim with the clear conscience.
First of all, many of the companies that do business
(11:04):
in this way are fly by night, right, and so
I think the chances are that the job has done well,
that they do a good job. It's pretty slim the
kind of companies that would try to get you to
file a claim for damage that wasn't actually done to
your roof. Are likely going to be the companies who
don't take as much care when they're repairing or replacing
(11:26):
your roof, suspect that they would be a high quality
company putting doing it properly. And I think the primary
thing is they're just looking for the paycheck from the
insurance company, right, like they're waiting on that fat check,
and then they're moving on as quickly as they can.
Speaker 1 (11:38):
And so part of that is because they're not maybe
an actual company who does business in your community, who
thrives or at least exists on good reviews from people
who live in the community, right, And if they are
more of a fly by night company, that's not what
they care about. And if they don't care about community reputation,
then it probably means they're not as beholden to how
(11:58):
you think of them, which mean inferior service.
Speaker 2 (12:01):
Sure, the incentives aren't aligned for them to do a
good job. They're literally there to get the project started,
to get the check, and then they move on.
Speaker 1 (12:08):
And typically these companies can find something to report that
justifies a new roof, right, But does it really feel
like the right thing to do to get them up
on the roof, to file a report that might or
might not pass muster with the insurance company. As my
mom would say, Matt, if everyone was going to jump
off a bridge, would you do it too? Did your
(12:29):
mom ever say anything like that to you?
Speaker 2 (12:31):
No?
Speaker 3 (12:31):
And I literally jumped off bridges.
Speaker 2 (12:32):
So the answer for Matt was yes, but she she
didn't know I was jumping off the bridges and it
was into a river and we would check out that.
Actually we didn't check out the river before we jumped
into That's that's my biggest regret looking back. We could
have really messed ourselves. You always, yeah, you always gotta
if you're going to do these kids check I always
make sure there's no Yeah, check the dept. Make sure
(12:53):
there's no trees down there.
Speaker 1 (12:54):
Hey, let's assume there's no water below, especially if people
are jumping off the bridge, like you're not going to
follow them to their DEMI because everybody's doing it. And
I think that was my mom's point, although you might
not have understood.
Speaker 3 (13:07):
It, like, yeah, it sounds like fun.
Speaker 2 (13:08):
You lived my.
Speaker 3 (13:09):
Out going up.
Speaker 1 (13:11):
But even if let's say this roof for was to
do a top notch job, giving you a fantastic roof
to enjoy for decades to come. You still pay deductible,
which is far less than the cost of the new roof,
but that will also increase your insurance premiums for years
to come and your ability to switch insurers to save
because that claim goes on your clue report, and that
clue report is kind of behind the scenes that when
(13:32):
you say, hey, I'm trying to go from State Farm
to Liberty Mutual, Liberty Mutual says, hey, well, you found
that claim with State Farm for the new roof, so
we're either going to charge you more or not accept you.
So that could prevent you from saving money in the future.
And I think, but I think, really, Matt, you agree
this too. Is my guess is that the most important
thing at the heart of this question is it feels
like cheating your insurance company. It reminds me of the
(13:53):
stories of people just massively abusing Costco's return policy. Hey,
I got these tires four years ago there bald as
a mother now, but I'm going to return them because
your return policy says that I can. Ye, and everybody
who has any sort of conscience or like moral care
or qualm decency. Decency is going to say, yeah, I
(14:16):
don't do that. We don't do that. That's ridiculous. That's
abusive of a company that is actually great and offers
offers a solid product at a reasonable price. So I
think if you truly experienced hail damage and you need
to file a claim, do it. But if it's a
bogus claim and an attempt to get a new roof
that you don't deserve, that you don't need, that isn't
truly damaged, don't do it.
Speaker 3 (14:37):
Yeah, this is why we can't have nice things.
Speaker 2 (14:39):
That's the phrase that comes to mind when I hear this, right,
because people are abusing the system, even though technically speaking
it might be allowable. But that's unfortunately, it's just the
tendency of society to be moving in this more lawfair
sort of direction where things are contested as opposed to
just having character like doing the right thing.
Speaker 3 (14:59):
And also, I don't want it to make.
Speaker 2 (15:00):
It sound like that we're like running tim through the
ringer here, like truly, if there is damage that has
been afflicted upon your roof, then like yeah, like Joel said,
that is totally something that you can do. But there's
a difference between like the heart of the law and
like the letter of the law basically, yeah, and then
the heart of the law.
Speaker 3 (15:17):
Or that you're getting at here is not like.
Speaker 2 (15:20):
Every time something happens to your roof that you are
entitled to a new roof basically yeahah, well again, Yeah,
it's this collective action problem where if everybody does it,
it's going to lead to higher insurance rates across the board.
Speaker 1 (15:30):
But it's also going to lead to higher insurance rates
for tim or for his friend. He said, this was
a conversation with his friend.
Speaker 2 (15:35):
What if you two, whoever does this is going to
see increased premiums, you know, for themselves as well.
Speaker 3 (15:39):
Totally, Yeah, it's costing all of us money.
Speaker 2 (15:42):
And I totally get the impulse to, you know, take
the smooth talking rover up the inspector, take them up
on there. Hey, let me hop up there all, take
a look around, see what's going on. But you know,
I think some folks unwillingly file a claim. They move forward.
But this is ultimately why we're seeing rates rise across
the board for all of us. But one thing to
keep in mind know that insurance companies they have gotten
(16:04):
wise to this game, and they are pushing back a
bit more forcefully now. So even still, despite the allure
of a quote unquote free roof, I think that's ethically dubious,
and on top of that, aside from the ethics, from
a financial standpoint, it could end up coming back and
biting you in the butt.
Speaker 1 (16:19):
Yeah, you're spot on, my friend. All Right, Hey, we
got more money saving information to get to.
Speaker 3 (16:24):
This is Joel Larsgard and Matt Altmis.
Speaker 1 (16:26):
And you're listening to KFI AM six forty how to
Money on demand on the iHeartRadio app. This is how
to Money. I am Matt Altmis and I'm Joelarsgard. Don't
forget to sign up for the how to Money newsletter.
You can find that up at how tomoney dot com
slash newsletter.
Speaker 2 (16:42):
Joe, how do you feel about what prices have been
How do you specifically feel about tariffs and enforcing the
hand of the market and getting other countries to pay
the high prices in order to bolster US manufacturing.
Speaker 3 (16:52):
And I've talked about this a little bit on the show.
Speaker 1 (16:54):
I think it's so fastinting that so many people who
were anti tariffs and pro free markets started to buy
into the fact that like, oh, yeah, tariffs are the solution,
it's to all the ales that we face. And I
just don't think they are. And I think are finally
starting to catch up with us.
Speaker 2 (17:07):
I had as prices are solely starting to catch up trices, right,
that's right. And I was hanging out with a friend
recently and he was talking about a big company that
he works for, a water sports company and you would
recognize the name. They make a lot of stuff, and
he said he was talking about the impact of tariffs
on the company, and he's like, we've been eating the tariffs,
(17:28):
like we've had to, you know, reduce staff, We've had
to really watch costs. It's it's been really like tough sledding.
And we're not a big enough company where we have
the ear of the president to roll back tariffs on
our specific items that we're that we're working on, and
so it's been He's like, well, pretty soon those prices
are going to have to go up, like they just are.
(17:48):
And and so I think we're starting to finally see
that that pre buying of the inventory has It takes
a while old, Yeah, it takes a while for to
trickle through the system. Before, like the information, like the
feedback loop it takes. It's not something that you can
measure within a couple months. Right in a few months,
it's going to Yeah, I would not be surprised to
see things change dramatically if we're not wanting to continue
to see prices rise well without an end insight.
Speaker 1 (18:11):
I think the place where we've seen maybe the most
impact of tariffs more quickly has been at the grocery store.
And at least like the President is starting to realize
that higher prices at the grocery store are annoying Americans,
that they're frustrated by paying more for things like bananas
and coffee and beef, and so this he just opted.
(18:33):
I think it was Friday, after our show came out,
Matt he said that he's going to roll back tariffs
at the grocery store on specific items, on dozens of items,
and so it feels like this like tacit acknowledgment. I'm
not going to say it out loud, but yeah, I
guess they are causing higher prices. So I'm going to
roll them back on some things that people notice when
they're going, you know, because we buy groceries multiple times
(18:54):
a week typically, and so yeah, in some categories in particular,
inflation has been incredibly high. Steak, coffee, bananas, and well,
guess what, we can't grow much coffee in the United States. Oh,
guess what, we can't really grow bananas in the United States.
So all the tariffs were doing with leading to higher prices.
It was attax on consumers and people are frustrated to
(19:15):
see steak costing twenty dollars a pound when it costs
twelve dollars a pound in January. And so, yeah, the
tariffs jackut prices across the board. It's good to see
at least a little recognition of that from the White House.
It'd be nice if we didn't have a willy nillie
tariff regime going on, but at least.
Speaker 3 (19:32):
We will see some relief on some of these items. Yeah.
Speaker 2 (19:35):
Basically, terriffs act as attacks to us as US consumers,
which just basically make things more expensive. But consumers, we
can't do much about higher prices that stem from bad
policy specifically, but folks are reacting intelligently by spurning beef
instead for chicken. So Tyson reported that b sales continued
to decline and chicken is through the roof. It's rising
(19:58):
quite significantly in popularity. It's up twenty eight percent year
over year, which makes sense when a whole chicken is
like a fraction of the cost of beef. I think
it's something like ninety nine cents a pound as opposed
to ground beef, which is around six dollars per pound.
But Jill, you know, one of the other ways that
you can combat the high prices of beef and specifically steak,
(20:19):
is to get in on sale. And this is something
this is I'm going to celebrate a little Costco win,
which is that they were offering whole slabs of ribbi.
Oh you did this, didn't you?
Speaker 3 (20:30):
So well you okay, I told you about it. You
told me about it, and I was like, so, Joel
said he. I did not partake because it was like
still really expensive.
Speaker 2 (20:37):
Joel said, Hey, they've got prime ribbi at Costco, the
whole side of the cow basically, and it's seventy five
bucks off per package. And You're like that's crazy. I
was like, yeah, did you crunch the numbers? And You're like, well, no,
it's just because you're still paying hundreds of dollars. Yeah,
for thos much meat, So was the price per pound?
Well what next time I went there, they were still
(20:57):
there because I think a lot of folks were still
scared off by paying hundreds of dollars. But I did
a quick calculation and it brought the price down to
fifteen dollars a pound for Prime Ribbi, which is dude,
this you can't get prices at low. It's been like
four or five years since I bought Prime Ribbi at
fifteen bucks is a little bit less because everyone knows
(21:18):
that when they do the discount per package, you go
for the smallest package package in order to maximize that discount.
So dude, massive win. I'd never done that before. I
didn't tell you because I wanted to save it for
the show.
Speaker 3 (21:29):
Home over at your house for Ribbi, I guess.
Speaker 2 (21:31):
But of course it's a whole thing, so you do
have to slice it. But that was actually kind of fun.
It was interesting to see like, oh, this is how
the Rabbi steak takes its shape, this is the meat
and cutting up cutting up your own steaks at home,
you know, with a giant knife on the cutting board.
Speaker 3 (21:44):
Or your butchering skills. Not bad.
Speaker 2 (21:46):
Okay, So the cup I will say, the steaks on
the end don't quite look like Ribbi's right like, but man,
all the cuts in the middle they look like just
like they do when they cut them there at Costco.
They're even more uniform though, because they always include one
like thinner one or one really weird thick one in
the packaging for or something like that.
Speaker 3 (22:03):
Dude, I was like laser.
Speaker 2 (22:05):
I didn't pull out a laser level or anything like that,
but I was just looking at it, making sure each
steak was was cut perfectly. Put a bunch of those
in gallon bag stuck in the freezer so they wouldn't
get bad. But you like, that's that's one of the
ways you also can combat some of these high beef prices,
not just by opting for something different, but look looking
for some of those massive sales and yeah, you got
to be okay with stomaching a few hundred dollars spent
(22:27):
that you're not going to consume for probably a month
or two.
Speaker 3 (22:29):
Yeah, you are listening to how to Money.
Speaker 2 (22:32):
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 3 (22:41):
I'm joelars Guard and I am Matt Altmix.
Speaker 2 (22:43):
If you are over 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.
Speaker 1 (22:52):
Now, let's take a question now from a listener who
wants to rothify more.
Speaker 3 (22:57):
Of her money himnd Well, this is Vicky from Ohio.
Speaker 5 (23:01):
I'm an average earner around sixty nine thousand a year.
I max out my HSA and my WROTH every year.
I wanted to know if I can put money into
my four oh one k at work and transfer it
over do a ROTH conversion to my ROTH.
Speaker 3 (23:24):
Thank you for your help.
Speaker 5 (23:25):
I really enjoy your show.
Speaker 3 (23:26):
I've learned so much. Bye.
Speaker 2 (23:30):
All right, Vicky, First off, could I just say that
you are a total boss, the fact that you are.
She's got an annual income of around seventy thousand dollars,
she's maxing out her roth IRA and her HSA, and
she didn't mention a family, so I'm assuming that she's
talking about the single version of the HSA for an
individual as opposed to a family that's over eleven thousand dollars,
(23:53):
which totally is not easy. In total Yeah, that's not
easy to do with seventy thousand dollars income and sot
so much.
Speaker 1 (24:02):
Riz as the kids would say, Matt, Yeah, I don't know.
I think does I like to use those terms twenty
twenty four inappropriately just to make myself sound even older.
Speaker 3 (24:10):
Actually, which is what it in fact does.
Speaker 1 (24:13):
That's my favorite thing to do so now that people
know I'm truly middle aged. But yeah, no, for real,
like maximum both those retirement accounts on that salary is incredible.
Speaker 2 (24:22):
It's really impressive, and it just adds. I hope it's
encouraging for a lot of folks who hear this. They
hear that and they're like, oh man, that's about what
I make. Actually, oh wow, that's possible. She's doing it.
She's been doing it. Yeah, and on top about that,
she's looking to do even more.
Speaker 1 (24:34):
It makes me think of my conversation not too long
ago with Hope from under the Median and their family
has essentially made average of forty thousand dollars for their
entire working lives, and she talks about how they were
able to buy a home in cash and pay off
home quickly, like they just all the things that they
were able to do, and that's such an inspiring episode
(24:54):
because of their attention to detail and frugality. Not everybody
wants to go out there and find a job that's
incredibly stressful that's going to pay them one hundred and
fifty grand a year, because let's be honest, sometimes the
more money you make it means the more you have
to trade off living your life. And so Vicky is,
I don't know what she's doing, whether she loves her
job or not. Put it, I will say she's from
(25:16):
a numbers standpoint, she's doing a great job, totally crushing it. Yes,
it does make me think too, she's from She says
she's from Ohio, and Ohio has the lower cost of
living rate or whatever. Sure, it has an actual lower
cost of living compared to the rest of the country.
So I don't know what city she's in. But that's
something else too that maybe there's.
Speaker 2 (25:32):
A quick takeaway here for folks to hear that and
think that's it would be impossible for me to set
aside that amount of money where I live. Well, yeah,
you could also con and I'm not saying completely uproot
your life, but there are certain things that you have
control over. Yeah, And I think it's worth considering cost
of living, and maybe Vicky actually like lives out in
the country, so maybe she's not even in a city, right,
(25:53):
and so she's maybe for her this is easy, this
is cake.
Speaker 1 (25:56):
I also think there's something about Midwestern value use, and
I don't know, maybe maybe that sounds ridiculous, but I
do think frugality is kind of like baked into the
cake of how Midwesterners function, at least on average, right
as like, looking from the outsiders, as someone who's visited
regularly places like Ohio and Wisconsin, the people I meet there,
frugality seems to be less like dorky.
Speaker 3 (26:19):
It's more just kind of this is normal.
Speaker 1 (26:20):
Where if you live in La it's like frugality, yeah,
And so I think there is something to that where
if you live in a place where all the heart Landers,
people don't care if you're wearing a Kirkland signature sweatshirt
and jeans versus.
Speaker 2 (26:32):
Better not because we're over here drinking ye Corkland sig beer.
I know, but like you're not getting into that in
the club in West Hollywood or something like that. So
I don't know, maybe it's easier to pull off in
Ohio as well. For that reason, you've made yourself sound
old yet againsh. I know, I'm really good at that.
You fit your quota for the show. Oh, there's more
to come. So the accessibility that Viggie's going to have
(26:55):
right is going to help her out too. If she's
attempting to retire early. I don't know she is, but
the HS and the Roth IRA those are very flexible accounts.
But she's looking to do even more, which of course
we love. And the first thing to note, by the way,
is that you you might not have to do a
Roth conversion. Many employers offer a Wroth four O one
K option. Picky Set's worth looking into that. I think
(27:15):
last I read something like ninety percent of employers make
a Wroth four A one K option available, So it's
getting pretty ubiquitous at this point, which means you wouldn't
have to do anything other than just contribute directly to
that account, and you probably should do that if it's
available to you. Right, if you were making like three
hundred thousand dollars a year, we'd probably say stick with
(27:35):
the traditional four oh one k, But given your income level,
I think Wroth everything is totally fine.
Speaker 3 (27:42):
Potentially an awesome approach. So if there's a ROTH four
O one.
Speaker 1 (27:45):
K available where you work, I don't know, Matt, I'd
i'd be strongly considering that.
Speaker 2 (27:48):
Yeah, yeah, So check with your with HR or looking
to do your benefits to see if that's something you
can do right directly contributing to that WROTH four one
K that would be the simplest path forward, although it
help you if you were looking to be able to
draw down on some of those those contributions if you're
looking to retire early. But let's assume though that your
employer does not offer a rough four o one K,
(28:11):
and let's just say you you know you want to
get more money into your actual ROTH IRA. To your
specific question, the answer is yes, if your company allows
in service rollovers, you're allowed to contribute money to your
four oh one K. And by the way, I hope
you're getting a match for doing so, for contributing to
that four on k. But then you would do a
direct rollover of four to one K dollars to an IRA.
(28:33):
But that is a big if though, And I'll say,
if you're with a low cost brokerage, a low cost provider,
it certainly makes sense to keep it with that company,
keep it under the same umbrella essentially. But then what
you're able to do is convert the traditional IRA dollars
into Roth dollars. It's a few steps, but you can potentially,
like Joel said, rathify those dollars. Do keep in mind
(28:57):
that you're gonna be paying tax on this, right, and
so it sounds like this is something you're looking to
do moving forward. It's not like you've got seventy five
thousand dollars worth of four and K contributions sitting there
to where you'd be stuck with a big old fat
tax bill all in a singular year.
Speaker 3 (29:13):
But that she does.
Speaker 2 (29:14):
If you do keep that in mind, you're going to
have a big old tax bill. But just yeah, no
moving forward that you are not getting a deduction for
those four and K contributions.
Speaker 3 (29:22):
Yeah, yeah, I think that's a really important thing to mention.
Speaker 2 (29:26):
And taxes are a big consideration when you are looking
to change the tax What is it the tax character
of these dollars?
Speaker 1 (29:33):
Yeah, and so and when and how much like those
are really those are really important questions. And the truth
is you if there is a big lump summon there
that would push you to think through that in a
more holistic way, about.
Speaker 3 (29:46):
More gradual way.
Speaker 1 (29:47):
Perhaps, yeah, maybe I do this over the course of
a number of years instead of doing this in one
fell swoop.
Speaker 3 (29:52):
And actually, I don't know.
Speaker 1 (29:53):
Maybe because I'm still making money and I think I'll
make less money once I retire, maybe it makes sense
to actually hold off on some of those recharacterizations from
traditional to ROTH until I look like I'm making less
money to the irs, right, because I am, because I'm
not working anymore, And that is often a great time
makes me think of that conversation with Cody Garrett that's
(30:15):
worth listening to as well, talking about when you turn
money that you've invested from traditional into ROTH. I think
it's really important to think through that so you can
pay less tax overall on those dollars over time. We
should also mention that so much depends on your current
tax bracket and your likely tax bracket in retirement, because
ROTH isn't always a slam dunk, especially on the four
(30:37):
to one case side. I think the ROTH ira if
your income allows makes sense for almost everybody pretty much
all the time. Roth iras are great, but if you
think your income is going to increase quite a bit.
I think it sways things in favor of the roth
even more so if you're like, hey, I'm making seventy
grand now, but I see this path, I'm probably going
to be increasing my income significantly. That makes like time
(30:59):
of the esa to get money into the roth right
as you know, as many dollars as you can get
into the roth Roth vehicles. Now, if your income is
going to go up, then I think it's a beautiful
thing of valiant attempt to try to get as much
as you can. And if you think your income is
going to decline, like let's say you are going to
retire soon and it's going to go down in a
(31:19):
big way, well does the opposite right. I think it
incentivizes putting money into traditional vehicles, traditional formal k traditional ira.
And don't forget that once you reach the age of fifty,
you're going to be eligible for catch up contributions. This
means you can contribute an extra one thousand dollars straight
into your roth ira at that point in time into
and you can put extra into the four one K
(31:40):
or WROTH four O one k if you find you
have that available. So take note of that.
Speaker 3 (31:44):
The viggies. You're seeing the viggies old. I don't know
how old she is. I know I'm old. I know
I'm getting closer to that. Jill's looking at it. He's like,
catch up contributions, baby.
Speaker 1 (31:52):
That's the only sexy thing about turning fifty in my opinion,
right or I don't know.
Speaker 3 (31:57):
I think actually, I think there's plenty of great things.
But I'm actually even more great gray hair in the mustache.
Speaker 1 (32:03):
Oh yeah it is coming. But yeah, being forty one
has been surprisingly pleasant, and so I actually am not
I'm not nervous about aging, and I guess the last
thing I would suggest for VICKI is to not forget
about taxble brokerage accounts because if you're like, oh man,
they don't offer the WROTH for one K, well, taxable
brokerage accounts are another great way to invest. Yes, you're
going to pay tax on the gains right and you're
(32:26):
not getting the same tax break that you are for
contributing to a traditional account right now or a ROTH
account in the future where you don't pay tax on
the earnings. But that's still a great account. If you
have more money you want to invest and you don't
have access to some of these other great accounts, or
you're kind of capped essentially by the contribution limits.
Speaker 2 (32:46):
I love it okay, you are listening to how to
Money on KFI Am six forty. You've been listening to
how to Money with Joel Larscard and Matt a mix
and you can always hear us live on k I
AM six forty twelve to two pm on Sunday at
any time on the iHeartRadio app
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