August 31, 2025 • 33 mins
Some parents are investing lots of money on behalf of their young kids. Surprisingly, we don't love hearing that!
Ask HTM: Stephen wants to know if premiums go up on homeowners insurance when you file a claim.
Politics is driving economic beliefs and investment strategy for far too many Americans. It's ok to care about politics, but don't let it sway how much or where you decide to invest!
Ask HTM: Angelas has some feedback for us.
Ask HTM: Stephen wants to know if premiums go up on homeowners insurance when you file a claim.
Politics is driving economic beliefs and investment strategy for far too many Americans. It's ok to care about politics, but don't let it sway how much or where you decide to invest!
Ask HTM: Angelas has some feedback for us.
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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):
All Joel and Matt want to do is help you save,
invest and enjoy more of what matters. This is how
to Money with Joel Lar's Guard and Matt Altmis.
Speaker 1 (00:50):
Kf I Am six forty live everywhere on the iHeart
Radio app. This is how to Money.
Speaker 3 (00:55):
I'm your host, Joe lars Guard and I am the
other host, Matt Altmix. And if you have a money question,
will 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.
Speaker 1 (01:11):
Time for the ludacrous headline of the week. This one
comes from the Wall Street Journal.
Speaker 3 (01:16):
And we haven't talked about this, but as soon as
I independently saw this article pop up on their homepage,
I was just like, Oh, there's no way, chill, I's
not going to want to talk about it.
Speaker 1 (01:27):
This is so good. Right up?
Speaker 3 (01:29):
Our alleys like parentsing you know we're young dads, well
young ish whatever, Yeah, you're we got young families. I
think to think we are. I think I've got a
we got five year olds, you know, we got dudes
that are uh, that are in kindergarten.
Speaker 1 (01:41):
I was hanging out with the young fellows the other night,
and I was like, what music's cool? Now, fellows, the
actually young fellows. Yeah, dads yet, so they know what's cool.
But I don't know anymore. All this headline reads she's
seven years old, her parents are saving to support her
when she's thirty. And I think maybe, in in an
attempt to not be terribly judgmental, Matt, first off, I
(02:03):
should say to each their own like, we know some
folks feel strongly about building generational wealth, or they put
investing in a five to twenty nine plan ahead of
their own retirement. Needs you do you? But we don't
have to agree with you or think it's smart or
a good idea. Yeah, this is our show, Yeah exactly.
We get to say what we think, so be nice,
though nice, I think to make things worse, Matt, this
(02:24):
article that wasn't talking about saving up for college or
enable plan for a disabled child who they knew they
were going to have to be a big primary role
as a caregiver in the future. This was about parents
who think it's their job to ensure that their kids
have like a meaningful source of income once they reach
young adulthood, through no effort of their own, creating kind
(02:46):
of like a padded place for them to land when
they reach early adulthood, it's going to make their life easier.
And so their assumption was like, Hey, if I can compound,
you know, fork over one thousand or two thousand dollars
a month to investment accounts on their behalf, the compounding
is going to make a big difference over the next
twenty twenty five years, then I really am creating a
(03:06):
substantial nest egg for them to tap into. The cacker though,
is that for a lot of these parents it's causing
significant financial strain because it really is hard to meet
your own financial goals and the goals of somebody else
at the same time. And so yeah, seeing that, it
was like people were kind of freaking out because they're
trying to attempt this, and then they realize that they
haven't done a good enough job for themselves at the
(03:28):
same time.
Speaker 3 (03:29):
You know, they didn't do a great job with projecting
into the future. What is this actually going to cost me, Like,
what kind of short term sacrifices are are we going
to have to make in order to pull this off?
And here's the things that's from Pew. They show that
adult parents do often help their kids out financially. Evidently
sixty percent of parents help up their kids. But buying
there's a difference between like buying a dinner or paying
(03:50):
for their portion of a family vacation, right, Like, that's
one thing if you have the means and if you
have saved effectively for your own future, there's a big
difference between that and then aside, two thousand dollars a
month starting at the age of seven, Like that's I
think that's ridiculous. It's these the classic teach a man,
give a man to give a man a fish and
you feed him for a day. Teach a man of
(04:11):
fish and you feed him for a lifetime. Like hello,
Like this is like the exact what like that entire
lesson encapsulated in this article and life decisions that people
are are making. Unfortunately, it's why we teach our kids
to tie their shoes, and we don't tie them for
them every morning. Dude, literally like two days ago, I'm
doing laundry with my kindergartener, and I noticed all of
(04:32):
his socks are flipped inside out or they're like kind
of baled up. So A, they're got a little wet
because they don't drive very well when they're all balled up,
but b because they're inside out. There's woodships from the playground,
and I'm like, buddy, this is this is gross, man,
this is a massive mess. And we had to sit
there and flip all the socks inside out pull out
the wood chips, and I'm like, why you need to
take your socks off so that they're not inside out,
(04:53):
and he was.
Speaker 1 (04:54):
Getting flustered and frustrated.
Speaker 3 (04:55):
He's just like when I grab it at the top
of the sock and I pull it off, it flips
inside out. I'm like, okay, well, let's try it like this,
and we put his sock on him. I was like,
here's how we're going to do it. With one hand,
you start to pull from the top, and with your
other hand you grab this sock by the toe and
then voila, this sock pops off your foot. And he
it's like I just showed him a magic trick. His
(05:16):
eyes lit up and he was like so stoked. He
couldn't believe that, like, oh wow, there is a way
to do this. And I think so much of what
we try to do as parents is to it's the
passing of knowledge and experience and helping them to understand
how the world works, because like, that is a part
of what it means to live of satisfying and fulfilling life.
If you don't pass on this knowledge, if we don't
teach our kids, there's an element of like you are
(05:38):
keeping them from the good stuff. I think some folks
on the service are going to think, well, this is
I don't want them to have to worry about that.
Speaker 1 (05:43):
It's like, no, no, no.
Speaker 3 (05:44):
Them having to worry about that is where the creativity
kicks in and they start to identify what matters to them.
And so in a similar way, when it comes to investing,
we have to teach our kids how to set that
money aside. We need to model it for them and
set up frameworks for where, you know, how they can
earn money on their own through their own creativity and
sweat and effort.
Speaker 1 (06:02):
I think you're spot on, and I when I look
back at my life, I remember at the time being
frustrated that my parents didn't have the means to buy
me a car, like when a lot of my friends
were getting a car in high school. Right, But what
it taught me was better than just having my parents
buy me a car, having to go, you know, working
(06:24):
at fourteen after school was over buying my first star,
saving up the cash to buy it with cash like
that was that meant so much to me. I look
back at that as like a formative period in my life. Yeah.
Same with college. It was like we had to partner
together to figure out what it was going to be
like for me to go to to get a college
degree and how much debt was I willing to take out?
(06:44):
And I had to make decisions that about my future
because of that that weren't that were not just contingent
on my parents' deep pockets. Yeah, and that again was formational.
Speaker 3 (06:56):
Yeah, you don't just get stuffer free, right, You don't
just get whatever car you want. You can't just go
to whatever you want, you know, You've got to make
these decisions and trade offs and evaluate or make a
judgment call on the value that you are receiving from.
Speaker 1 (07:07):
A certain car or a certain school. Saving up a
twenty percent down payment for my first house was doing
that by doing that because it was money I made.
That's satisfying. Feels a lot different when you do that. Man,
if it was given to me, it wouldn't have felt
the same. So maybe you might be I think you're
doing the right thing, and I don't know. It's up
to your family situation and your desires and all that stuff.
Like I said before, but just think about what you
(07:28):
might be taking from your kids if you're actually trying
to fund their future on their palth. Totally last recommendation.
Speaker 3 (07:34):
It's been a minute since I've mentioned Fortune's children, but
if you want to see what it looks like to
you said, create a soft kind of landing padah for
your kids.
Speaker 1 (07:42):
That's exactly what the Commodore did when.
Speaker 3 (07:45):
The railroad baron and they document the author chronicles. I
don't want to call it a downfall, but essentially how
the future members of the family were a bit less productive,
let's say, than.
Speaker 1 (07:58):
The patriarch of the family. And if you want a
more recent example, just watch the show Succession on age.
You know you'll realize, yeah, it sounds like it's really good.
It's i mean, one of the best written shows of
all time.
Speaker 3 (08:09):
So I've seen the intro because wait, did trend resnor
do the music?
Speaker 1 (08:15):
Yeah? What was it?
Speaker 3 (08:16):
I was there's something else I had listened to or
watched that there was? Oh no, Teenage Mutant Ninja Turtles. Yeah,
Muton Mayhem?
Speaker 1 (08:23):
Which best kids movie in recent mave? Pretty awesome? So good.
I highly recommend.
Speaker 4 (08:29):
You're listening to How to Money with Joel Larsgard on
demand from KFI AM six forty.
Speaker 3 (08:36):
By the way, you can always find more money saving
information over at howtomoney dot com.
Speaker 1 (08:41):
Matt, it's time for the Facebook question of the week.
This one comes from Steven. He says homeowner's insurance question.
Do premiums go up on homeowners insurance for using it
the same way they do on car insurance? Our house
was struck by lightning. Oho, some appliances are fried. That
sounds terrible. It's one of those active god things you
can't do much about, right, Yeah, he says, in the
siding where it got hit is going to need to
(09:03):
be repaired to are deductible as five thousand dollars. Any
guidance or advice is appreciated.
Speaker 3 (09:09):
Five thousand bucks. All right, that's this is bring back
Are you having PTSD. This is bringing back bad memories,
jol as far as so, your house didn't get struck
by lightning, but the tree struck by lightning got struck,
which is why came through the roof.
Speaker 1 (09:22):
That's right. No, I awful, honestly, Like, it was not
a fun experience, but it could have been a lot worse.
I did not. I don't have terrible memories about it
that situation. Yeah. Fortunately, unfortunately weren't in the house when it happened,
or else I probably would have worse memories. Sure. Yeah.
Speaker 3 (09:36):
So but to answer Steve, and I mean, it varies
from state to state because every state is going to
have an insurance commissioner and it's their job to regulate
the insurance companies and enforce the rules. In most states. Finally,
a claim will cause your insurance premiums to increase, but
how much it partly depends on the insurance companies. Some
may not bump up the rates all that much, while
(09:57):
others might consider dropping you all together. Use it, and
you use it, you lose it, right, Like. That's one
of the one of the refrains that you sometimes hear.
It's not common after a single claim, but it can happen,
which means that in your case, you do need to
be careful before you file the claim. I would be
considering the long term consequences. And in your case, it
(10:17):
wasn't just like a couple of appliances that got fried, right,
having to repaint the siding where it got charred was
much more rooting substantial than that flooring framing.
Speaker 1 (10:28):
Yeah, it was water damage touched a whole whole lot
of areas, which may meant the price tag went up,
which meant the reality of claiming and filing claim made
a whole lot more sense. And so yeah, how much
your premiums can increase depends on a lot of factors, right,
including the ad fault nature, which this is not the case.
Even this wasn't so in your fault, right, this was,
like I said, an act of God. The overall claim
(10:50):
amount that can impact to the how much premiums go
up for you. And rates have already been subject to
higher increases over the past couple of years. Insurance companies
are feeling the pain of higher payouts. And we read
about the wildfires in Los Angeles, read about the hurricane
damage right in the southeast. I mean, it just feels
like we're experiencing greater levels of more natural disasters and
(11:14):
then so which means higher claim amounts. And we're also
talking about just everything costing more. Right after a significant
bout of inflation, so a premium increase of twenty to
forty percent, I don't think that would be out of
the question. And if you're paying, let's sake, let's say
three thousand bucks a year for your Homemotos insurance right now,
well they might say, hey, you actually need to pay
(11:35):
four grand or forty two hundred, forty five hundred starting
next year. I don't like it. And it's important to
mention that this claim is going to stick on your
clue report, which would likely up your rates when getting
quotes from other insurance companies in the future. SEA might say, Hey,
definitely don't like that. I'm going to file a claim.
I'm going to get paid out, and then at some point,
maybe six months down the road, after I've like gotten
(11:56):
far enough away from this incident and fixing everything back up,
I'm going to go to another insurance company. And that's
how I'm gonna be able to lower my rates. Maybe maybe,
but maybe not, because they're all going to know about
the claim you filed, and that's going to impact the
quotes they give you two. That's right.
Speaker 3 (12:09):
Yeah, so let's go back to the deductible five thousand dollars.
This is a good thing because it's actually helping to
keep your premiums lower. And on top of that, it
makes it less likely that you are going to file
a claim Stephen, which keeps your premiums reasonable. Like we
just discussed, and so I would run some numbers. How
much is it going to cost for you to get
these repairs done? Because if we're talking let's say seven
(12:32):
thousand dollars in total or six certainly five, right, like,
you don't file a claim That would not make much
financial sense in this case.
Speaker 1 (12:41):
Self insurance would be the right call.
Speaker 3 (12:43):
But let's say if oh, actually it's not just the citing,
some of the framing got charred or something. Oh, it's
all the appliances they're all on the fritz. Oh the
electricals damage now too, Oh my gosh. Yeah, now we
got to upgrade all we got to upgrade our panel.
And the service is actually I don't know, I'm just
making these are terms I've like as I renovated at homes,
the service coming from the street, there's something wrong with that. Well,
(13:05):
if that were to be the case, and the replacement
expenses and cost is coming in a good bit higher,
then I think filing a claim could be the smartest move.
Speaker 1 (13:14):
And there's always a gray area here, like it's never
like the exact formula, I don't think, but I do think.
I think of insurance homeowners insurance as mostly there for
catastrophic reasons, like if something significant happens that's incredibly beyond
your ability to pay for or doesn't make any financial
sense to file a claim. So I think you're right,
(13:35):
mat if it's like kind of close to that deductible amount, yeah,
that's something you cover. You don't involve insurance at all
because you don't want it on your clue report and
you don't want to raise your premiums. And then but
if that's not the case, and you've got a good
bit of cash sitting on which hopefully you do have
a good bit of cash, having a deductible that high,
that means you're willing to take on the responsibility of
self insurance. I think hopefully you can handle this on
(13:56):
your own. But again, there's always a gray area, and
there a sliding scale, it can be difficult to know
the exact way to proceed.
Speaker 3 (14:02):
All right, let's get to one more quick one. This
is from Grace, and she writes, we are trying to
find a way to limit our grocery and restaurant spending.
And we thought we had a winning idea of getting
Visa gift cards.
Speaker 1 (14:13):
Because the card.
Speaker 3 (14:14):
Won't let you pay when you run out of money,
we could get one for each family member and not important,
but a bonus. Then in our real budget there is
just the buying of the gift card for this purpose
instead of a million little transactions. Grace, I hear you
as the one who keeps up with the budget. All
those small expenses get on my nerves. But she writes,
then it turned out that there are fees to get
(14:35):
the cards. They were quite prohibitive. Any other ideas Cash
isn't great because you can't use it to order door
Dash or anything like that, but maybe we will have.
Speaker 1 (14:44):
To try it. Any other ideas well.
Speaker 3 (14:46):
I see the benefit of not being able to I
see not being able to get door dash as a positive. Yes,
going with Cass, let's go ahead and address that one
right out of the gate. Don't do DoorDash.
Speaker 1 (14:56):
Yeah, if you're really trying to limit your I hate
door dash man, how much you're spending out or just
on food in general, don't make it so easy. This
is the number one thing you want to eliminate. And
there are other other things you can do, of course,
which we'll talk about to reduce your grocery spend, but
you know, doing the app based takeout orders is one
of the worst things you do. So I do think
(15:17):
actually moving the cash is a reasonable choice here, dude,
because it's going to prevent the worst thing in the
world that you can do, and it's also going to
put those limits on you. Yes, that don't come with.
Speaker 3 (15:26):
Fees, I will say, if you're looking for more convenience,
because folks are thinking, well, I don't know, like roll
with hundreds of dollars in my wallet or in my
purse kick at old school, and only put the amount
of money that you want to spend on discretionary spending
in your checking and or whatever like spending account.
Speaker 1 (15:43):
Like sometimes newer banks.
Speaker 3 (15:44):
These days are calling them spending accounts, but like that's
that's kind of how these accounts were created back in
the day.
Speaker 1 (15:51):
And I think most people, including myself.
Speaker 3 (15:53):
I only kind of it's random the amounts of money
I have in my in my checking account and my
spending account versus my savings Like basically, I try to
keep as little in my checking account as possible so
I can earn the interest in the savings account, right, Like,
That's what us optimizers are out here doing. But I
think you can take a more methodical approach. And if
you so, it sounds like she is tracking her spending anyway,
(16:13):
because she's talking about all the purchases that she's inundated
with at the end of the month, and maybe she
hates them just as much as I do. But that
being said, you probably know how much you're spending every
single month on eating out and groceries and things like that,
and so simply just move that amount of money to
your checking account and.
Speaker 1 (16:28):
Then you are going to roll with your debit card.
Speaker 3 (16:31):
And I think that can be a nice Granted, there
are always going to be workarounds, right Like you could
just say, oh, well, then I could just go in
there and transfer that money over. Well, in a similar way,
you could also go to the ATM, that's right and
pull more cash.
Speaker 1 (16:42):
It's always a way to circumvent your desire to save money, you.
Speaker 3 (16:45):
Are still potentially your own worst enemy here. Nothing is
you proof, right, There's no complete.
Speaker 1 (16:51):
Cure for humanity that Matt has found yet, or that
I found it. But I think making it harder on
yourself to do the things that are in your interest
in terms of saving on your grocery bill makes a
lot of sense.
Speaker 4 (17:04):
You're listening to How to Money with Joel Larsgard on
demand from KFI AM six forty.
Speaker 3 (17:10):
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 (17:19):
All right, let's talk about politics, Matt. There was a
there was an interesting Gallup poll. Let's dive into it
about how politics is driving economic beliefs and investing strategy
in really big ways right now. And the crux of
the finding is that the majority of Americans are seeing
more aspects of their lives through a political lens. And
I think this is just readily apparent when we look around,
(17:41):
we tend to see everything as political when there man,
there's so many more elements to our lives and that
make life meaningful. But in politics are necessary part of life,
but like letting them color everything, it's just not smart. Yeah,
and you're living in a false reality if you do that.
But especially on the investing front, because that's what we
talk about. But Gallup finds that Democrats are pessimistic about
(18:04):
the market right now because there's because of who's in office,
and Democrats who expect the stock market to decline over
the six next six months exceeded Republican beliefs by fifty
nine percent. So there's this like pretty big swing, insane
gap based on the R or the D in front
of the name and who's in the White House at
the time. So Republicans right now they're super optimistic. They're like,
(18:26):
this is going to be great, my guys in the office.
So the stock market is going to crush, but also
to a fault because there was a there's a Make
America Great Again ETF fund and it has underperformed the
S and P by twenty percentage points. And to boot,
it comes with a ridiculous expense ratio. But if you
are so inclined to invest according to your politics and
(18:49):
buy the ETF with the ridiculously high expense ratio, you
can of course expect I think to underperform. Well, you
expect the opposite, but in reality you're not going to
do as well. And so it's just really interesting that
people on both sides of the aisle are saying, Hey,
I'm gonna I'm gonna let my politics inform not just
you know what I think about the future of this
economy and what the state of America is is going
(19:09):
to look like, but also specific investing choices that are
working out to their detriment.
Speaker 3 (19:14):
Yeah, you have to stay a political when it comes
to investing. Just because your guy is in the White House,
that doesn't mean that the market is destined for historic returns.
Speaker 1 (19:23):
So we choose to invest like optimists no matter the
party that's in that's in charge.
Speaker 3 (19:28):
And if you want to get involved in politics, if
you're so inclined, sure go for it. Throw your energy
behind that. If that's the kind of change that you
want to see. When it comes to especially locally, get
involved locally. But Lettings as opposed to like getting involved
like at the federal level, just online through your Blue
Sky or X account, I don't think that's going to
pan out well for you from from an actual difference
(19:51):
making point of view.
Speaker 1 (19:52):
But letting changing strangers minds online through what happens all
the time, jo my tweets, don't you know. Yeah, but
of course those aren't work. They're not effective, not effective.
Speaker 3 (20:03):
Don't let your political whims impact your investments because it
could tempt you into putting away less. It could tempt
you into selling, you know, thinking that things are going
to take right. Like let's say you're like, oh, okay,
this is the end and you move into cash. It
is going to have these long term ramifications as you
jump in and out of the market every two to
four years. Even the tariff induced gyrations that we experienced
(20:26):
back it was in March or April. Yeah, even that
was short lived, was incredibly short lived. Yes, Yeah, the
economic engine of the US, man, it's really powerful, it's
really resilient. Look to history that will prove that out.
That we can most likely expect the market to grow
at around ten percent excluding inflation. It's not a guarantee,
but that is what we have seen in the past,
(20:47):
and I'm taking my cues from history.
Speaker 1 (20:49):
Yeah, if you were to ask me at the time, man,
we talked about tariffs, and are what we think about
tariffs on the show a reasonable amount. I would have said, yeah,
I don't think this is going to be good for
the economy, and this might not be good for the
stock market, but I did not change how I invest,
even though I thought that was a potential threat. I
realized that the economic engine of the United States is
(21:14):
so incredible that I don't think one person, especially given
the checks and balance the system that we have in
place in our country, has has the ability to bring
it to its nees. And so even if I don't
agree with some of the policy, which I typically don't
no matter who's in charge, agree with all the policy
that's proposed or that's being implemented, there's.
Speaker 3 (21:36):
More and more of that policy that I find myself
disagreeing with. Yeah, in the current administration, initially because there's
a lot of folks, oh, we're getting little maybe a
little little too polic And initially a lot of folks
are like, oh, he tends to be pro business, But
there have been a well and I would have said, yeah,
maybe so historically speaking, but then lately, gosh, yeah, is
it worth talking about We're not going to talk about
Intel and the government stake in a privately held company,
(22:00):
but like that's not something I like to see the
government getting involved with private companies.
Speaker 1 (22:04):
Not great, but also at the same time, America is
resilient and we have again a country, an economic history
and an economic and I believe in economic future that's
unlike anywhere else. It's still the best. Yeah, we still
the tops.
Speaker 4 (22:18):
You're listening to How To Money with Joel Larsgard on
demand from KFI AM six forty.
Speaker 1 (22:24):
Don't forget to sign up for the how to Money newsletter.
You can find that up at how tomoney dot com
slash newsletter. Matt, let's get to another question. This one
comes from someone who's in the money advice space.
Speaker 5 (22:36):
Hi, Matt, angel This is Angela and Richmond Hill, Georgia.
I've been listening to your show for several years now.
I want to thank you for your thoughtful content. I'm
in a credit financial counselor and I really like your
ask how to Money episodes, as it makes me think
about how I would respond if they were my clients.
I did want to comment on two listener questions. The
first was from around January of this year, and I
(22:56):
just haven't gotten around to doing a voice memo. The
listener was asking about maxing out their TSP while maxing
out early might seem like a good idea. Once the
TSP is max the employee can't contribute anymore, which means
they can't be matched for the rest of the year,
so they're basically essentially leaving money on the table. The
second question had to do with lowering insurance costs for
(23:19):
a vehicle the listener called a few weeks ago. One
of the things a listener mentioned was lowering his liability
to the state minimum, and I don't know that that
was clearly addressed. While lowering or even canceling property assurance
comprehensive and collision, especially on the Honda, makes sense, lowering
the liability is exposing him to much greater risk. I
(23:40):
find that most people don't understand the difference between property
and liability on their policies and was curious about your thoughts.
Thanks so much, Have a great.
Speaker 3 (23:48):
Day, all right, Joel, what do you think about Angela's feedback?
Should we start a new segment called Joel and Matt stinks?
Speaker 1 (23:56):
I don't think so. Okay, yeah, that might be ripping
off somebody else. Okay, we could Joel, Matt suck. I
don't know that that's totally different or are totally awful,
Joel matter totally awful? Maybe that no, but if you
do have like feedb I love stuff like this and
we're like, oh yeah, this' is a good forum I
think right now.
Speaker 3 (24:12):
And it helps me to realize too that if we
haven't parsed out, I don't know, there's nuance and a
lot of these questions, and sometimes we sometimes will gloss
over certain.
Speaker 1 (24:20):
Aspects of it. So we'll miss something in a question, sure,
and it's kind of important and so maybe we like
answered it three quarters of the way and we certainly
left out a quarter or some people just disagree with
our advice sometimes and they think that maybe, yeah, we
really could stand to be informed. So we appreciate appreciate
the sort of feedback of it all. Yeah. I think
we try to say regularly too that there's a lot
(24:42):
of subjective nature, just like in our answer to the
last question to our advice, and even the way we
viewed some of these things has changed since we started
the podcast in terms of like balance and in terms
of how we think about retirement and work, and that's
informing how we answer questions do you think about life? Yeah?
Speaker 3 (25:00):
Yeah, It just depends on what aspect of life that
you are taking into account. Like you've got the financial
side of things, but then you've kind of got the
life fulfillment side of things, and you've got the work
satisfaction side of things, And there are a ton of
different factors for sure.
Speaker 1 (25:14):
By the way, one thing Angela mentioned she said that
she was a which she says she was a budget
coach or a money counselor money counselor, right, And I
think that's I think that's super cool you and I
we've had people in her position on the show in
the past for interview segments, and I think a lot
of times knee jerk people go to financial advisors. They
think that's the pro they need, and financial advisors can
(25:35):
be expensive and it might not make the most sense
for them where they're out on their wealth building journey,
but a money counselor or a budget coach can often
be a great use of your money for a specific
period of time as you're trying to learn the ropes
and you want some personal, one on one feedback. So Angela,
we're glad you're out there doing your thing, and really
do appreciate your feedback. That's right.
Speaker 3 (25:54):
Yeah, And Angela is right about maxing out your workplace
retirement accounts too early, for instance, a four to one
K or a TSP that she mentioned. And so again,
for many folks, this sounds impossible, right, Like we're again
we're talking about over twenty three thousand dollars over the
course of a year. I think a lot of folks
are thinking, how am I supposed to make that happen,
(26:15):
let alone doing.
Speaker 1 (26:16):
It faster than over the course of a year. Right,
My problem is not that I contributed too quickly. Yeah,
retirement it's like the worse tumble brag yeah of all time.
But there are some go get our financial independence minded
folks out there who really do attempt this, and so,
in an effort to just get that out of the way,
they just ratchet up their contribution amounts to the sky,
(26:36):
getting much smaller paychecks for a while until they hit
that max early on, which maybe emotionally feels really good,
but it certainly seems like you're you're doing the right
thing here, but you might be leaving money on the table.
Like Angela mentioned, if you max out your contributions, let's
say by June, well you run the risk of missing
out on any mash dollars that would have been yours
(26:59):
had you taken just the steadier taurtouis approach over the
course of the year. And similar to an earlier question,
I mean, so much depends on your employer's plan documents,
because in some cases you won't be missing out on
the match, and in others you will, right, And so
the best approach is typically to figure out what your
biweekly contribution should be in order to make twenty six
(27:20):
equal investments with each paycheck. That leaves nothing to chance, right,
you are doing equal investment amounts. And yes, Matt, you
talk about like funding the WROTH in full on day
one of the year, right as soon as soon as
you possibly can, because that way your money is invested
for a longer time. And I think like people want
to optimize all the way. That's kind of what they're
going for here, to fund their account early. But if
(27:42):
it means yeah, your money's invested longer, but you have
fewer dollars to invest because you're not getting the full match,
that's a problem and you want to avoid that. But
then some companies will have language in their plan around
something known as true ups where they'll ensure that you
get the full match, even if you stuffed all that
money into your four to one K early on, and
they'll basically cut a check at the end of the
(28:03):
year for whatever match you might have missed out on
during that year. As long as you max it out,
you're going to get the full amount of the match
that the employer offers. You just know what your plan
documents say, because some are generous in that way, others
are not. And you don't want to make a mistake
and miss out on matching dollars because you funded too early, exactly,
And this might be something you have to dig into
a little bit because there probably aren't going to be
(28:25):
a ton of folks at your company who are investing
in this way since the question the HR person does
not often get to see exactly, so you certainly reached
out to them, but it might take you doing a
little command f assertion. Some of these terms like true
ups and having to dig in deep to become a
little to become an expert there on your specific plan.
Angel also referenced insurance.
Speaker 3 (28:45):
And this is a case where you don't want to
be cheap right, I think, especially if your vehicle is older,
you might want to eliminate comprehensive coverage in order to
save on insurance costs in order to keep that money
there in savings. But it's one thing to shop around
and compare rates with other insurance companies. But if you
are cheap, you might opt for inferior coverage amounts, putting
(29:05):
you at a significant financial risk. And we're specifically talking
about liability insurance here because state minimums they are not
indicative of what your coverage should be. There is no
there's no one size fits all answer to how much
you should be insured for. Because my answer would be
very different if I was, like a previous caller, twenty
(29:27):
or twenty five years old, my net worth is like
zero or even negative. Right, if I've got ten twenty
thirty thousand student loans, there's a big difference between that
and where I've been. After let's say decades and decades
of investing regularly in the market, insurance becomes more important. Yeah,
it's more. Initially it just kind of seems like a nuisance.
It's like, oh, this is thing that you have to do.
(29:49):
But the older you get and the more wealth you build,
it's like I see it with rosier color glasses. As
I get older, it's like, oh, man, what a great
thing to have to be able to make sure that
I've mitigated that risk. We won't get into specifics here,
but when it comes to the liability insurance that we
have on our old one hundred and ninety thousand mile minivan, Joel,
(30:10):
I've got twenty times what our state limit is. Wow,
which sounds kind of crazy, but not when you consider
the fact, I don't know, some folks are just more
litigious than others, Right, it doesn't really matter if you've
got an old, ratty look in minivan, they're going to
try to.
Speaker 1 (30:22):
Come after you.
Speaker 3 (30:23):
But specifically, I mean, we live close to a fairly
you know, we live in a big city or near
a big city where there are like Lamborghinis driving down
the Interstate. And when I see that, when I'm sharing
a lane, yeah, sharing the Interstate highway lane with like
a lambou.
Speaker 1 (30:40):
Ay, you try to raise them.
Speaker 3 (30:42):
Hey, I'm getting into a different lane because I don't
want to be behind them. But be like, that's a
really expensive vehicle and you could easily blow through not
just your statement of thems, but like like something that's
even substantially. Even something that's ten or twenty x, it
would not be difficult to blow through some of those
liability minimums. And so you need to keep all this
into account. Where you live that matters, right, And so
(31:05):
I guess that's what I'm getting here. Like, for instance,
if you lived in a small little town where you
know everybody and nobody's really seeing each other, and everyone
drives ten year old till you got to pickup trucks, Okay,
you probably don't need to go with like some super
off the charts coverage amount. Yeah, but it's just another
instance where your context and specifically where you live and
where you're driving it matters.
Speaker 1 (31:25):
I think a lot of times frugal people are they're
getting the quotes, and they aren't getting quotes for state
minimum coverage, and they're not thinking about, well, how much
do what are my insurance needs? And so it's they're
just comparing prices between the lowest common denominator insurance policy
and they probably need to get quotes for insurance that's
going to cover them in case of a more substantial
(31:46):
claim or encounter with a Lamborghini or something like that. Right, So, yeah,
you do need to be careful, and it's kind of
like you must be over forty eight inches to ride
this ride or something like that. They still let people
as tall as me ride those rides, right, And so
I think you don't want the bare minimum. That's not
going to be enough for a whole lot of people.
So I do appreciate Angela mentioning that. I'm not sure
(32:09):
why we didn't address it and answer that question. I
don't even remember that question right now, I'm Matt, but
I think it also it might make sense if you're
kind of confused, You're not sure how do I decide
what sort of coverage I need? This is going to
very person, a person kind of like you're you're mentioning
you might want to hire an independent insurance agent, not
just to help you shop rates with a bunch of companies,
but to offer some advice right about what kind of
(32:29):
coverage limits you might need given your financial situation. And
my guess is an independent insurance agent should be able
to help you on that front.
Speaker 3 (32:36):
YEP, A independent broker like even with like homeowners, the
ability to talk through replacement costs, right price per square foot,
what just kind of what the trends are I think
that can be really helpful.
Speaker 1 (32:44):
For what are the trade offs between me going with
a two thousand dollars deductible versus a five thousand dollars deductible.
What are the premium changes can I self ensure for that?
Those are good questions to ask. And then there's Yeah,
there's a site called Trusted choice dot com where you
can find an independent insurance agent near you, so be
sure to check that out. That it could be an
important task for you to look into this week or
(33:06):
in the coming week.
Speaker 3 (33:06):
Totally agree, buddy, and that is going to do it
for today. Thank you for listening. We appreciate your time
and attention. We'll see you back here next week.
Speaker 1 (33:14):
You've been listening to How To Money with Joel Larsgard.
You can always hear us live on KFI AM six
forty twelve pm to two pm on Sunday and anytime
on demand on the iHeartRadio app.
Kf I Am six forty. You're listening to how to
Money on demand on the iHeartRadio app.
Speaker 2 (00:07):
All Joel and Matt want to do is help you save,
invest and enjoy more of what matters. This is how
to Money with Joel Lar's Guard and Matt Altmis.
Speaker 1 (00:50):
Kf I Am six forty live everywhere on the iHeart
Radio app. This is how to Money.
Speaker 3 (00:55):
I'm your host, Joe lars Guard and I am the
other host, Matt Altmix. And if you have a money question,
will 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.
Speaker 1 (01:11):
Time for the ludacrous headline of the week. This one
comes from the Wall Street Journal.
Speaker 3 (01:16):
And we haven't talked about this, but as soon as
I independently saw this article pop up on their homepage,
I was just like, Oh, there's no way, chill, I's
not going to want to talk about it.
Speaker 1 (01:27):
This is so good. Right up?
Speaker 3 (01:29):
Our alleys like parentsing you know we're young dads, well
young ish whatever, Yeah, you're we got young families. I
think to think we are. I think I've got a
we got five year olds, you know, we got dudes
that are uh, that are in kindergarten.
Speaker 1 (01:41):
I was hanging out with the young fellows the other night,
and I was like, what music's cool? Now, fellows, the
actually young fellows. Yeah, dads yet, so they know what's cool.
But I don't know anymore. All this headline reads she's
seven years old, her parents are saving to support her
when she's thirty. And I think maybe, in in an
attempt to not be terribly judgmental, Matt, first off, I
(02:03):
should say to each their own like, we know some
folks feel strongly about building generational wealth, or they put
investing in a five to twenty nine plan ahead of
their own retirement. Needs you do you? But we don't
have to agree with you or think it's smart or
a good idea. Yeah, this is our show, Yeah exactly.
We get to say what we think, so be nice,
though nice, I think to make things worse, Matt, this
(02:24):
article that wasn't talking about saving up for college or
enable plan for a disabled child who they knew they
were going to have to be a big primary role
as a caregiver in the future. This was about parents
who think it's their job to ensure that their kids
have like a meaningful source of income once they reach
young adulthood, through no effort of their own, creating kind
(02:46):
of like a padded place for them to land when
they reach early adulthood, it's going to make their life easier.
And so their assumption was like, Hey, if I can compound,
you know, fork over one thousand or two thousand dollars
a month to investment accounts on their behalf, the compounding
is going to make a big difference over the next
twenty twenty five years, then I really am creating a
(03:06):
substantial nest egg for them to tap into. The cacker though,
is that for a lot of these parents it's causing
significant financial strain because it really is hard to meet
your own financial goals and the goals of somebody else
at the same time. And so yeah, seeing that, it
was like people were kind of freaking out because they're
trying to attempt this, and then they realize that they
haven't done a good enough job for themselves at the
(03:28):
same time.
Speaker 3 (03:29):
You know, they didn't do a great job with projecting
into the future. What is this actually going to cost me, Like,
what kind of short term sacrifices are are we going
to have to make in order to pull this off?
And here's the things that's from Pew. They show that
adult parents do often help their kids out financially. Evidently
sixty percent of parents help up their kids. But buying
there's a difference between like buying a dinner or paying
(03:50):
for their portion of a family vacation, right, Like, that's
one thing if you have the means and if you
have saved effectively for your own future, there's a big
difference between that and then aside, two thousand dollars a
month starting at the age of seven, Like that's I
think that's ridiculous. It's these the classic teach a man,
give a man to give a man a fish and
you feed him for a day. Teach a man of
(04:11):
fish and you feed him for a lifetime. Like hello,
Like this is like the exact what like that entire
lesson encapsulated in this article and life decisions that people
are are making. Unfortunately, it's why we teach our kids
to tie their shoes, and we don't tie them for
them every morning. Dude, literally like two days ago, I'm
doing laundry with my kindergartener, and I noticed all of
(04:32):
his socks are flipped inside out or they're like kind
of baled up. So A, they're got a little wet
because they don't drive very well when they're all balled up,
but b because they're inside out. There's woodships from the playground,
and I'm like, buddy, this is this is gross, man,
this is a massive mess. And we had to sit
there and flip all the socks inside out pull out
the wood chips, and I'm like, why you need to
take your socks off so that they're not inside out,
(04:53):
and he was.
Speaker 1 (04:54):
Getting flustered and frustrated.
Speaker 3 (04:55):
He's just like when I grab it at the top
of the sock and I pull it off, it flips
inside out. I'm like, okay, well, let's try it like this,
and we put his sock on him. I was like,
here's how we're going to do it. With one hand,
you start to pull from the top, and with your
other hand you grab this sock by the toe and
then voila, this sock pops off your foot. And he
it's like I just showed him a magic trick. His
(05:16):
eyes lit up and he was like so stoked. He
couldn't believe that, like, oh wow, there is a way
to do this. And I think so much of what
we try to do as parents is to it's the
passing of knowledge and experience and helping them to understand
how the world works, because like, that is a part
of what it means to live of satisfying and fulfilling life.
If you don't pass on this knowledge, if we don't
teach our kids, there's an element of like you are
(05:38):
keeping them from the good stuff. I think some folks
on the service are going to think, well, this is
I don't want them to have to worry about that.
Speaker 1 (05:43):
It's like, no, no, no.
Speaker 3 (05:44):
Them having to worry about that is where the creativity
kicks in and they start to identify what matters to them.
And so in a similar way, when it comes to investing,
we have to teach our kids how to set that
money aside. We need to model it for them and
set up frameworks for where, you know, how they can
earn money on their own through their own creativity and
sweat and effort.
Speaker 1 (06:02):
I think you're spot on, and I when I look
back at my life, I remember at the time being
frustrated that my parents didn't have the means to buy
me a car, like when a lot of my friends
were getting a car in high school. Right, But what
it taught me was better than just having my parents
buy me a car, having to go, you know, working
(06:24):
at fourteen after school was over buying my first star,
saving up the cash to buy it with cash like
that was that meant so much to me. I look
back at that as like a formative period in my life. Yeah.
Same with college. It was like we had to partner
together to figure out what it was going to be
like for me to go to to get a college
degree and how much debt was I willing to take out?
(06:44):
And I had to make decisions that about my future
because of that that weren't that were not just contingent
on my parents' deep pockets. Yeah, and that again was formational.
Speaker 3 (06:56):
Yeah, you don't just get stuffer free, right, You don't
just get whatever car you want. You can't just go
to whatever you want, you know, You've got to make
these decisions and trade offs and evaluate or make a
judgment call on the value that you are receiving from.
Speaker 1 (07:07):
A certain car or a certain school. Saving up a
twenty percent down payment for my first house was doing
that by doing that because it was money I made.
That's satisfying. Feels a lot different when you do that. Man,
if it was given to me, it wouldn't have felt
the same. So maybe you might be I think you're
doing the right thing, and I don't know. It's up
to your family situation and your desires and all that stuff.
Like I said before, but just think about what you
(07:28):
might be taking from your kids if you're actually trying
to fund their future on their palth. Totally last recommendation.
Speaker 3 (07:34):
It's been a minute since I've mentioned Fortune's children, but
if you want to see what it looks like to
you said, create a soft kind of landing padah for
your kids.
Speaker 1 (07:42):
That's exactly what the Commodore did when.
Speaker 3 (07:45):
The railroad baron and they document the author chronicles. I
don't want to call it a downfall, but essentially how
the future members of the family were a bit less productive,
let's say, than.
Speaker 1 (07:58):
The patriarch of the family. And if you want a
more recent example, just watch the show Succession on age.
You know you'll realize, yeah, it sounds like it's really good.
It's i mean, one of the best written shows of
all time.
Speaker 3 (08:09):
So I've seen the intro because wait, did trend resnor
do the music?
Speaker 1 (08:15):
Yeah? What was it?
Speaker 3 (08:16):
I was there's something else I had listened to or
watched that there was? Oh no, Teenage Mutant Ninja Turtles. Yeah,
Muton Mayhem?
Speaker 1 (08:23):
Which best kids movie in recent mave? Pretty awesome? So good.
I highly recommend.
Speaker 4 (08:29):
You're listening to How to Money with Joel Larsgard on
demand from KFI AM six forty.
Speaker 3 (08:36):
By the way, you can always find more money saving
information over at howtomoney dot com.
Speaker 1 (08:41):
Matt, it's time for the Facebook question of the week.
This one comes from Steven. He says homeowner's insurance question.
Do premiums go up on homeowners insurance for using it
the same way they do on car insurance? Our house
was struck by lightning. Oho, some appliances are fried. That
sounds terrible. It's one of those active god things you
can't do much about, right, Yeah, he says, in the
siding where it got hit is going to need to
(09:03):
be repaired to are deductible as five thousand dollars. Any
guidance or advice is appreciated.
Speaker 3 (09:09):
Five thousand bucks. All right, that's this is bring back
Are you having PTSD. This is bringing back bad memories,
jol as far as so, your house didn't get struck
by lightning, but the tree struck by lightning got struck,
which is why came through the roof.
Speaker 1 (09:22):
That's right. No, I awful, honestly, Like, it was not
a fun experience, but it could have been a lot worse.
I did not. I don't have terrible memories about it
that situation. Yeah. Fortunately, unfortunately weren't in the house when it happened,
or else I probably would have worse memories. Sure. Yeah.
Speaker 3 (09:36):
So but to answer Steve, and I mean, it varies
from state to state because every state is going to
have an insurance commissioner and it's their job to regulate
the insurance companies and enforce the rules. In most states. Finally,
a claim will cause your insurance premiums to increase, but
how much it partly depends on the insurance companies. Some
may not bump up the rates all that much, while
(09:57):
others might consider dropping you all together. Use it, and
you use it, you lose it, right, Like. That's one
of the one of the refrains that you sometimes hear.
It's not common after a single claim, but it can happen,
which means that in your case, you do need to
be careful before you file the claim. I would be
considering the long term consequences. And in your case, it
(10:17):
wasn't just like a couple of appliances that got fried, right,
having to repaint the siding where it got charred was
much more rooting substantial than that flooring framing.
Speaker 1 (10:28):
Yeah, it was water damage touched a whole whole lot
of areas, which may meant the price tag went up,
which meant the reality of claiming and filing claim made
a whole lot more sense. And so yeah, how much
your premiums can increase depends on a lot of factors, right,
including the ad fault nature, which this is not the case.
Even this wasn't so in your fault, right, this was,
like I said, an act of God. The overall claim
(10:50):
amount that can impact to the how much premiums go
up for you. And rates have already been subject to
higher increases over the past couple of years. Insurance companies
are feeling the pain of higher payouts. And we read
about the wildfires in Los Angeles, read about the hurricane
damage right in the southeast. I mean, it just feels
like we're experiencing greater levels of more natural disasters and
(11:14):
then so which means higher claim amounts. And we're also
talking about just everything costing more. Right after a significant
bout of inflation, so a premium increase of twenty to
forty percent, I don't think that would be out of
the question. And if you're paying, let's sake, let's say
three thousand bucks a year for your Homemotos insurance right now,
well they might say, hey, you actually need to pay
(11:35):
four grand or forty two hundred, forty five hundred starting
next year. I don't like it. And it's important to
mention that this claim is going to stick on your
clue report, which would likely up your rates when getting
quotes from other insurance companies in the future. SEA might say, Hey,
definitely don't like that. I'm going to file a claim.
I'm going to get paid out, and then at some point,
maybe six months down the road, after I've like gotten
(11:56):
far enough away from this incident and fixing everything back up,
I'm going to go to another insurance company. And that's
how I'm gonna be able to lower my rates. Maybe maybe,
but maybe not, because they're all going to know about
the claim you filed, and that's going to impact the
quotes they give you two. That's right.
Speaker 3 (12:09):
Yeah, so let's go back to the deductible five thousand dollars.
This is a good thing because it's actually helping to
keep your premiums lower. And on top of that, it
makes it less likely that you are going to file
a claim Stephen, which keeps your premiums reasonable. Like we
just discussed, and so I would run some numbers. How
much is it going to cost for you to get
these repairs done? Because if we're talking let's say seven
(12:32):
thousand dollars in total or six certainly five, right, like,
you don't file a claim That would not make much
financial sense in this case.
Speaker 1 (12:41):
Self insurance would be the right call.
Speaker 3 (12:43):
But let's say if oh, actually it's not just the citing,
some of the framing got charred or something. Oh, it's
all the appliances they're all on the fritz. Oh the
electricals damage now too, Oh my gosh. Yeah, now we
got to upgrade all we got to upgrade our panel.
And the service is actually I don't know, I'm just
making these are terms I've like as I renovated at homes,
the service coming from the street, there's something wrong with that. Well,
(13:05):
if that were to be the case, and the replacement
expenses and cost is coming in a good bit higher,
then I think filing a claim could be the smartest move.
Speaker 1 (13:14):
And there's always a gray area here, like it's never
like the exact formula, I don't think, but I do think.
I think of insurance homeowners insurance as mostly there for
catastrophic reasons, like if something significant happens that's incredibly beyond
your ability to pay for or doesn't make any financial
sense to file a claim. So I think you're right,
(13:35):
mat if it's like kind of close to that deductible amount, yeah,
that's something you cover. You don't involve insurance at all
because you don't want it on your clue report and
you don't want to raise your premiums. And then but
if that's not the case, and you've got a good
bit of cash sitting on which hopefully you do have
a good bit of cash, having a deductible that high,
that means you're willing to take on the responsibility of
self insurance. I think hopefully you can handle this on
(13:56):
your own. But again, there's always a gray area, and
there a sliding scale, it can be difficult to know
the exact way to proceed.
Speaker 3 (14:02):
All right, let's get to one more quick one. This
is from Grace, and she writes, we are trying to
find a way to limit our grocery and restaurant spending.
And we thought we had a winning idea of getting
Visa gift cards.
Speaker 1 (14:13):
Because the card.
Speaker 3 (14:14):
Won't let you pay when you run out of money,
we could get one for each family member and not important,
but a bonus. Then in our real budget there is
just the buying of the gift card for this purpose
instead of a million little transactions. Grace, I hear you
as the one who keeps up with the budget. All
those small expenses get on my nerves. But she writes,
then it turned out that there are fees to get
(14:35):
the cards. They were quite prohibitive. Any other ideas Cash
isn't great because you can't use it to order door
Dash or anything like that, but maybe we will have.
Speaker 1 (14:44):
To try it. Any other ideas well.
Speaker 3 (14:46):
I see the benefit of not being able to I
see not being able to get door dash as a positive. Yes,
going with Cass, let's go ahead and address that one
right out of the gate. Don't do DoorDash.
Speaker 1 (14:56):
Yeah, if you're really trying to limit your I hate
door dash man, how much you're spending out or just
on food in general, don't make it so easy. This
is the number one thing you want to eliminate. And
there are other other things you can do, of course,
which we'll talk about to reduce your grocery spend, but
you know, doing the app based takeout orders is one
of the worst things you do. So I do think
(15:17):
actually moving the cash is a reasonable choice here, dude,
because it's going to prevent the worst thing in the
world that you can do, and it's also going to
put those limits on you. Yes, that don't come with.
Speaker 3 (15:26):
Fees, I will say, if you're looking for more convenience,
because folks are thinking, well, I don't know, like roll
with hundreds of dollars in my wallet or in my
purse kick at old school, and only put the amount
of money that you want to spend on discretionary spending
in your checking and or whatever like spending account.
Speaker 1 (15:43):
Like sometimes newer banks.
Speaker 3 (15:44):
These days are calling them spending accounts, but like that's
that's kind of how these accounts were created back in
the day.
Speaker 1 (15:51):
And I think most people, including myself.
Speaker 3 (15:53):
I only kind of it's random the amounts of money
I have in my in my checking account and my
spending account versus my savings Like basically, I try to
keep as little in my checking account as possible so
I can earn the interest in the savings account, right, Like,
That's what us optimizers are out here doing. But I
think you can take a more methodical approach. And if
you so, it sounds like she is tracking her spending anyway,
(16:13):
because she's talking about all the purchases that she's inundated
with at the end of the month, and maybe she
hates them just as much as I do. But that
being said, you probably know how much you're spending every
single month on eating out and groceries and things like that,
and so simply just move that amount of money to
your checking account and.
Speaker 1 (16:28):
Then you are going to roll with your debit card.
Speaker 3 (16:31):
And I think that can be a nice Granted, there
are always going to be workarounds, right Like you could
just say, oh, well, then I could just go in
there and transfer that money over. Well, in a similar way,
you could also go to the ATM, that's right and
pull more cash.
Speaker 1 (16:42):
It's always a way to circumvent your desire to save money, you.
Speaker 3 (16:45):
Are still potentially your own worst enemy here. Nothing is
you proof, right, There's no complete.
Speaker 1 (16:51):
Cure for humanity that Matt has found yet, or that
I found it. But I think making it harder on
yourself to do the things that are in your interest
in terms of saving on your grocery bill makes a
lot of sense.
Speaker 4 (17:04):
You're listening to How to Money with Joel Larsgard on
demand from KFI AM six forty.
Speaker 3 (17:10):
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 (17:19):
All right, let's talk about politics, Matt. There was a
there was an interesting Gallup poll. Let's dive into it
about how politics is driving economic beliefs and investing strategy
in really big ways right now. And the crux of
the finding is that the majority of Americans are seeing
more aspects of their lives through a political lens. And
I think this is just readily apparent when we look around,
(17:41):
we tend to see everything as political when there man,
there's so many more elements to our lives and that
make life meaningful. But in politics are necessary part of life,
but like letting them color everything, it's just not smart. Yeah,
and you're living in a false reality if you do that.
But especially on the investing front, because that's what we
talk about. But Gallup finds that Democrats are pessimistic about
(18:04):
the market right now because there's because of who's in office,
and Democrats who expect the stock market to decline over
the six next six months exceeded Republican beliefs by fifty
nine percent. So there's this like pretty big swing, insane
gap based on the R or the D in front
of the name and who's in the White House at
the time. So Republicans right now they're super optimistic. They're like,
(18:26):
this is going to be great, my guys in the office.
So the stock market is going to crush, but also
to a fault because there was a there's a Make
America Great Again ETF fund and it has underperformed the
S and P by twenty percentage points. And to boot,
it comes with a ridiculous expense ratio. But if you
are so inclined to invest according to your politics and
(18:49):
buy the ETF with the ridiculously high expense ratio, you
can of course expect I think to underperform. Well, you
expect the opposite, but in reality you're not going to
do as well. And so it's just really interesting that
people on both sides of the aisle are saying, Hey,
I'm gonna I'm gonna let my politics inform not just
you know what I think about the future of this
economy and what the state of America is is going
(19:09):
to look like, but also specific investing choices that are
working out to their detriment.
Speaker 3 (19:14):
Yeah, you have to stay a political when it comes
to investing. Just because your guy is in the White House,
that doesn't mean that the market is destined for historic returns.
Speaker 1 (19:23):
So we choose to invest like optimists no matter the
party that's in that's in charge.
Speaker 3 (19:28):
And if you want to get involved in politics, if
you're so inclined, sure go for it. Throw your energy
behind that. If that's the kind of change that you
want to see. When it comes to especially locally, get
involved locally. But Lettings as opposed to like getting involved
like at the federal level, just online through your Blue
Sky or X account, I don't think that's going to
pan out well for you from from an actual difference
(19:51):
making point of view.
Speaker 1 (19:52):
But letting changing strangers minds online through what happens all
the time, jo my tweets, don't you know. Yeah, but
of course those aren't work. They're not effective, not effective.
Speaker 3 (20:03):
Don't let your political whims impact your investments because it
could tempt you into putting away less. It could tempt
you into selling, you know, thinking that things are going
to take right. Like let's say you're like, oh, okay,
this is the end and you move into cash. It
is going to have these long term ramifications as you
jump in and out of the market every two to
four years. Even the tariff induced gyrations that we experienced
(20:26):
back it was in March or April. Yeah, even that
was short lived, was incredibly short lived. Yes, Yeah, the
economic engine of the US, man, it's really powerful, it's
really resilient. Look to history that will prove that out.
That we can most likely expect the market to grow
at around ten percent excluding inflation. It's not a guarantee,
but that is what we have seen in the past,
(20:47):
and I'm taking my cues from history.
Speaker 1 (20:49):
Yeah, if you were to ask me at the time, man,
we talked about tariffs, and are what we think about
tariffs on the show a reasonable amount. I would have said, yeah,
I don't think this is going to be good for
the economy, and this might not be good for the
stock market, but I did not change how I invest,
even though I thought that was a potential threat. I
realized that the economic engine of the United States is
(21:14):
so incredible that I don't think one person, especially given
the checks and balance the system that we have in
place in our country, has has the ability to bring
it to its nees. And so even if I don't
agree with some of the policy, which I typically don't
no matter who's in charge, agree with all the policy
that's proposed or that's being implemented, there's.
Speaker 3 (21:36):
More and more of that policy that I find myself
disagreeing with. Yeah, in the current administration, initially because there's
a lot of folks, oh, we're getting little maybe a
little little too polic And initially a lot of folks
are like, oh, he tends to be pro business, But
there have been a well and I would have said, yeah,
maybe so historically speaking, but then lately, gosh, yeah, is
it worth talking about We're not going to talk about
Intel and the government stake in a privately held company,
(22:00):
but like that's not something I like to see the
government getting involved with private companies.
Speaker 1 (22:04):
Not great, but also at the same time, America is
resilient and we have again a country, an economic history
and an economic and I believe in economic future that's
unlike anywhere else. It's still the best. Yeah, we still
the tops.
Speaker 4 (22:18):
You're listening to How To Money with Joel Larsgard on
demand from KFI AM six forty.
Speaker 1 (22:24):
Don't forget to sign up for the how to Money newsletter.
You can find that up at how tomoney dot com
slash newsletter. Matt, let's get to another question. This one
comes from someone who's in the money advice space.
Speaker 5 (22:36):
Hi, Matt, angel This is Angela and Richmond Hill, Georgia.
I've been listening to your show for several years now.
I want to thank you for your thoughtful content. I'm
in a credit financial counselor and I really like your
ask how to Money episodes, as it makes me think
about how I would respond if they were my clients.
I did want to comment on two listener questions. The
first was from around January of this year, and I
(22:56):
just haven't gotten around to doing a voice memo. The
listener was asking about maxing out their TSP while maxing
out early might seem like a good idea. Once the
TSP is max the employee can't contribute anymore, which means
they can't be matched for the rest of the year,
so they're basically essentially leaving money on the table. The
second question had to do with lowering insurance costs for
(23:19):
a vehicle the listener called a few weeks ago. One
of the things a listener mentioned was lowering his liability
to the state minimum, and I don't know that that
was clearly addressed. While lowering or even canceling property assurance
comprehensive and collision, especially on the Honda, makes sense, lowering
the liability is exposing him to much greater risk. I
(23:40):
find that most people don't understand the difference between property
and liability on their policies and was curious about your thoughts.
Thanks so much, Have a great.
Speaker 3 (23:48):
Day, all right, Joel, what do you think about Angela's feedback?
Should we start a new segment called Joel and Matt stinks?
Speaker 1 (23:56):
I don't think so. Okay, yeah, that might be ripping
off somebody else. Okay, we could Joel, Matt suck. I
don't know that that's totally different or are totally awful,
Joel matter totally awful? Maybe that no, but if you
do have like feedb I love stuff like this and
we're like, oh yeah, this' is a good forum I
think right now.
Speaker 3 (24:12):
And it helps me to realize too that if we
haven't parsed out, I don't know, there's nuance and a
lot of these questions, and sometimes we sometimes will gloss
over certain.
Speaker 1 (24:20):
Aspects of it. So we'll miss something in a question, sure,
and it's kind of important and so maybe we like
answered it three quarters of the way and we certainly
left out a quarter or some people just disagree with
our advice sometimes and they think that maybe, yeah, we
really could stand to be informed. So we appreciate appreciate
the sort of feedback of it all. Yeah. I think
we try to say regularly too that there's a lot
(24:42):
of subjective nature, just like in our answer to the
last question to our advice, and even the way we
viewed some of these things has changed since we started
the podcast in terms of like balance and in terms
of how we think about retirement and work, and that's
informing how we answer questions do you think about life? Yeah?
Speaker 3 (25:00):
Yeah, It just depends on what aspect of life that
you are taking into account. Like you've got the financial
side of things, but then you've kind of got the
life fulfillment side of things, and you've got the work
satisfaction side of things, And there are a ton of
different factors for sure.
Speaker 1 (25:14):
By the way, one thing Angela mentioned she said that
she was a which she says she was a budget
coach or a money counselor money counselor, right, And I
think that's I think that's super cool you and I
we've had people in her position on the show in
the past for interview segments, and I think a lot
of times knee jerk people go to financial advisors. They
think that's the pro they need, and financial advisors can
(25:35):
be expensive and it might not make the most sense
for them where they're out on their wealth building journey,
but a money counselor or a budget coach can often
be a great use of your money for a specific
period of time as you're trying to learn the ropes
and you want some personal, one on one feedback. So Angela,
we're glad you're out there doing your thing, and really
do appreciate your feedback. That's right.
Speaker 3 (25:54):
Yeah, And Angela is right about maxing out your workplace
retirement accounts too early, for instance, a four to one
K or a TSP that she mentioned. And so again,
for many folks, this sounds impossible, right, Like we're again
we're talking about over twenty three thousand dollars over the
course of a year. I think a lot of folks
are thinking, how am I supposed to make that happen,
(26:15):
let alone doing.
Speaker 1 (26:16):
It faster than over the course of a year. Right,
My problem is not that I contributed too quickly. Yeah,
retirement it's like the worse tumble brag yeah of all time.
But there are some go get our financial independence minded
folks out there who really do attempt this, and so,
in an effort to just get that out of the way,
they just ratchet up their contribution amounts to the sky,
(26:36):
getting much smaller paychecks for a while until they hit
that max early on, which maybe emotionally feels really good,
but it certainly seems like you're you're doing the right
thing here, but you might be leaving money on the table.
Like Angela mentioned, if you max out your contributions, let's
say by June, well you run the risk of missing
out on any mash dollars that would have been yours
(26:59):
had you taken just the steadier taurtouis approach over the
course of the year. And similar to an earlier question,
I mean, so much depends on your employer's plan documents,
because in some cases you won't be missing out on
the match, and in others you will, right, And so
the best approach is typically to figure out what your
biweekly contribution should be in order to make twenty six
(27:20):
equal investments with each paycheck. That leaves nothing to chance, right,
you are doing equal investment amounts. And yes, Matt, you
talk about like funding the WROTH in full on day
one of the year, right as soon as soon as
you possibly can, because that way your money is invested
for a longer time. And I think like people want
to optimize all the way. That's kind of what they're
going for here, to fund their account early. But if
(27:42):
it means yeah, your money's invested longer, but you have
fewer dollars to invest because you're not getting the full match,
that's a problem and you want to avoid that. But
then some companies will have language in their plan around
something known as true ups where they'll ensure that you
get the full match, even if you stuffed all that
money into your four to one K early on, and
they'll basically cut a check at the end of the
(28:03):
year for whatever match you might have missed out on
during that year. As long as you max it out,
you're going to get the full amount of the match
that the employer offers. You just know what your plan
documents say, because some are generous in that way, others
are not. And you don't want to make a mistake
and miss out on matching dollars because you funded too early, exactly,
And this might be something you have to dig into
a little bit because there probably aren't going to be
(28:25):
a ton of folks at your company who are investing
in this way since the question the HR person does
not often get to see exactly, so you certainly reached
out to them, but it might take you doing a
little command f assertion. Some of these terms like true
ups and having to dig in deep to become a
little to become an expert there on your specific plan.
Angel also referenced insurance.
Speaker 3 (28:45):
And this is a case where you don't want to
be cheap right, I think, especially if your vehicle is older,
you might want to eliminate comprehensive coverage in order to
save on insurance costs in order to keep that money
there in savings. But it's one thing to shop around
and compare rates with other insurance companies. But if you
are cheap, you might opt for inferior coverage amounts, putting
(29:05):
you at a significant financial risk. And we're specifically talking
about liability insurance here because state minimums they are not
indicative of what your coverage should be. There is no
there's no one size fits all answer to how much
you should be insured for. Because my answer would be
very different if I was, like a previous caller, twenty
(29:27):
or twenty five years old, my net worth is like
zero or even negative. Right, if I've got ten twenty
thirty thousand student loans, there's a big difference between that
and where I've been. After let's say decades and decades
of investing regularly in the market, insurance becomes more important. Yeah,
it's more. Initially it just kind of seems like a nuisance.
It's like, oh, this is thing that you have to do.
(29:49):
But the older you get and the more wealth you build,
it's like I see it with rosier color glasses. As
I get older, it's like, oh, man, what a great
thing to have to be able to make sure that
I've mitigated that risk. We won't get into specifics here,
but when it comes to the liability insurance that we
have on our old one hundred and ninety thousand mile minivan, Joel,
(30:10):
I've got twenty times what our state limit is. Wow,
which sounds kind of crazy, but not when you consider
the fact, I don't know, some folks are just more
litigious than others, Right, it doesn't really matter if you've
got an old, ratty look in minivan, they're going to
try to.
Speaker 1 (30:22):
Come after you.
Speaker 3 (30:23):
But specifically, I mean, we live close to a fairly
you know, we live in a big city or near
a big city where there are like Lamborghinis driving down
the Interstate. And when I see that, when I'm sharing
a lane, yeah, sharing the Interstate highway lane with like
a lambou.
Speaker 1 (30:40):
Ay, you try to raise them.
Speaker 3 (30:42):
Hey, I'm getting into a different lane because I don't
want to be behind them. But be like, that's a
really expensive vehicle and you could easily blow through not
just your statement of thems, but like like something that's
even substantially. Even something that's ten or twenty x, it
would not be difficult to blow through some of those
liability minimums. And so you need to keep all this
into account. Where you live that matters, right, And so
(31:05):
I guess that's what I'm getting here. Like, for instance,
if you lived in a small little town where you
know everybody and nobody's really seeing each other, and everyone
drives ten year old till you got to pickup trucks, Okay,
you probably don't need to go with like some super
off the charts coverage amount. Yeah, but it's just another
instance where your context and specifically where you live and
where you're driving it matters.
Speaker 1 (31:25):
I think a lot of times frugal people are they're
getting the quotes, and they aren't getting quotes for state
minimum coverage, and they're not thinking about, well, how much
do what are my insurance needs? And so it's they're
just comparing prices between the lowest common denominator insurance policy
and they probably need to get quotes for insurance that's
going to cover them in case of a more substantial
(31:46):
claim or encounter with a Lamborghini or something like that. Right, So, yeah,
you do need to be careful, and it's kind of
like you must be over forty eight inches to ride
this ride or something like that. They still let people
as tall as me ride those rides, right, And so
I think you don't want the bare minimum. That's not
going to be enough for a whole lot of people.
So I do appreciate Angela mentioning that. I'm not sure
(32:09):
why we didn't address it and answer that question. I
don't even remember that question right now, I'm Matt, but
I think it also it might make sense if you're
kind of confused, You're not sure how do I decide
what sort of coverage I need? This is going to
very person, a person kind of like you're you're mentioning
you might want to hire an independent insurance agent, not
just to help you shop rates with a bunch of companies,
but to offer some advice right about what kind of
(32:29):
coverage limits you might need given your financial situation. And
my guess is an independent insurance agent should be able
to help you on that front.
Speaker 3 (32:36):
YEP, A independent broker like even with like homeowners, the
ability to talk through replacement costs, right price per square foot,
what just kind of what the trends are I think
that can be really helpful.
Speaker 1 (32:44):
For what are the trade offs between me going with
a two thousand dollars deductible versus a five thousand dollars deductible.
What are the premium changes can I self ensure for that?
Those are good questions to ask. And then there's Yeah,
there's a site called Trusted choice dot com where you
can find an independent insurance agent near you, so be
sure to check that out. That it could be an
important task for you to look into this week or
(33:06):
in the coming week.
Speaker 3 (33:06):
Totally agree, buddy, and that is going to do it
for today. Thank you for listening. We appreciate your time
and attention. We'll see you back here next week.
Speaker 1 (33:14):
You've been listening to How To Money with Joel Larsgard.
You can always hear us live on KFI AM six
forty twelve pm to two pm on Sunday and anytime
on demand on the iHeartRadio app.
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