May 24, 2024 • 31 mins
Time for a Friday Flight- our little sampling of the week’s financial news and what it means for your personal finances. There are a lot of headlines out there, but we boil them down to specific takeaways that will allow you to kick off the weekend informed and help you to get ahead with your money. In this episode we explain some relevant and helpful stories like: naming beneficiaries, forgetting football, home improvement ROI, should I stage or should I go, child care premiums, WFH indulgences, ignominious investing, 401k mistakes, persistent pensions, Roth IRA surges, and learning while you’re earning.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Welcome to How the Money. I'm Joel and I am Matt,
and today we're talking about forgetting football, home Improvement ROI
and ignominious investing, ignominious.
Speaker 2 (00:30):
Look at you using the big words, Joel, you bust
out in the old Webster's the sours on your dust sleeves.
Speaker 1 (00:35):
I just came out of this giant brain of mine.
Speaker 2 (00:37):
Matt, obviously, welcome to the Friday Flight, which is where
we discuss the different headlines and the stories that we've
come across this week, and we also try to impress
you with our big words, with our big lee words.
What's this you got to know here about wanting to
talk about your friend's retirement account?
Speaker 3 (00:52):
Yeah?
Speaker 1 (00:53):
Okay, So one of my friends sent me a screenshot
the other day. She had found like some money that
she didn't know existed in her teacher return account, and
I was like, awesome, that's always fun. But there was
this big red thing at the bottom of the of
the screenshot that she sent me, and it said you
do not have a beneficiary picked out. You need to
make this happen. And I was like, hey, whoa, No,
that's for real, Like you should look at the red
(01:13):
type down below. Congrats on finding money. You didn't realize.
Speaker 2 (01:16):
Oh she wasn't talking. She didn't share that with you.
To talk about the beneficiary.
Speaker 1 (01:22):
It's just something that you happen, like, hey, there's actually
something addressed here, just in case something happens, like you
want to make sure that your money is going to
thry person. I think we actually mentioned this in the
how to Money newsletter on Tuesday as well. This is
just such an important thing Matt that so many people,
especially like one, have you ever named a beneficiary?
Speaker 3 (01:39):
Or two?
Speaker 1 (01:40):
Do you need to change beneficiaries? Has something changed in
your life? Maybe you were The worst.
Speaker 2 (01:45):
Case scenario is you've got all your money and going
to an X right right, exactly, you no longer care
for Perhaps maybe they're a fine person in their own right,
but you don't necessarily they're a terrible person.
Speaker 3 (01:56):
Hundreds of thousands and the dollars going to them if
you die.
Speaker 1 (01:58):
If that's the case, that would be the app the
worst thing, right, but yeah, definitely going there.
Speaker 3 (02:03):
And you have to do with this.
Speaker 1 (02:04):
Let's say you have a four one K a Vanguard,
and you have an irat Fidelity or whatever. You need
to do this with each one of those accounts log in.
Make sure your beneficiary is who you want it to be,
and make sure you have one, because the beneficiary actually
supersedes what it says in your will. Matt, it's really
really important to have those named properly and to have
(02:24):
the yea. And by the way, you can name multiple
beneficiaries and different percentages or whatever.
Speaker 2 (02:27):
You can slice off the pie however it is that
you want, which means, Joel, that you could slice off
the tiniest little pie and send it my way if
you'd like ould. No, you don't want to, I'll think
about it.
Speaker 3 (02:36):
Okay, all right, let's die. Wife be like, why is
Tim saying one?
Speaker 1 (02:40):
I know they're but come on, no, you've got to
Candis to.
Speaker 3 (02:42):
Provide for all right, let's get into it.
Speaker 2 (02:45):
Let's talk about streaming in sports, and specifically, let's talk
about foosball.
Speaker 3 (02:50):
Bobby Bouchet refference there for you.
Speaker 1 (02:51):
But I heard they're making a water Boy too, or no,
they're making some Adam Sandler movie. They're doing a second
version of Oh no, It's Happy Gilmore.
Speaker 3 (02:59):
Oh. I don't know.
Speaker 2 (03:00):
There seems to be like a golf resurgence as of
like I feel like I don't know about you. Do
you feel like more folks you talk to play golf
than you realized?
Speaker 3 (03:09):
Yeah? I think so.
Speaker 2 (03:10):
I'm always shocked. I'm always surprised. I'm sticking a disc
golf myself, much more affordable. But uh, okay, football specifically, though,
if you want to watch some football, you're going to
have to wait until the fall, obviously, but you might
want to think about actually abandoning football, maybe perhaps as
a hobby before then, anyway, And that is because it's
going to cost you something around sixteen hundred dollars to
(03:33):
watch a full slate of NFL games next season. This
is according to some number crunching over at The Guardian.
Speaker 1 (03:39):
And that's not just if you go in person, by
the way, because like, yeah, going to see an NFL
game in person is crazy expensive.
Speaker 2 (03:45):
Oh yeah, yeah, this is just watching it on TV
and literally just streaming it. Yeah, And this is before if,
if let's say, you gamble, perhaps this is before any
losses from some poor decisions that you've made. But we
bring this up because streaming was the post to help
us to be able to watch our favorite content, and
to do so with less expense in our lives, but
(04:05):
with every streamer taking just a few games here and
there from every major league sport. You'll be spending more
than ever to keep up with your favorite leagues, with
your favorite.
Speaker 3 (04:14):
Teams in the coming years.
Speaker 2 (04:15):
And even having a cable subscription wouldn't help you to
avoid this. Play it to Yeah, you're gonna be spending
more than ever.
Speaker 1 (04:21):
Just a heads up, that's exactly right, because you're gonna
get Yeah, maybe some of those games on cable, but
then there's oh, you gotta have Amazon Prime to watch
Thursday night football, and then there's the new Netflix games
on Christmas Day. Peacock has a few games competing with Yeah,
that's right into all of them, right, And so think
about the even the NFL game that was the Chiefs
versus the Dolphins, that the playoff game that happened last year,
(04:42):
and it was only on Peacock and people were upset,
but a bunch of people signed up for Peacock and
guess what, they also blocked out the free trial during
ahead of that because they knew what was about to happen.
Guess what they made bank because seventy one percent of
the subscribers who signed up just to watch that football
game have remained Peacock subscribers because we're not so great
at canceling subscriptions after the fact, and so our advice
(05:05):
to you don't let inertia get the best of you.
I think our collective obsession with sports is costing us
a whole lot of money in streaming, and it's so yeah,
you have to be careful and you have to realize, like,
this is how much it's going to cost. If I
want to watch all these games. Maybe you can say
I don't care about the Thursday night games, but be
thoughtful about what you're spending, because if you do have
to watch it all, it's going to cost you money.
Speaker 2 (05:25):
It's just about being intentional with your money. It's funny,
we're just talking about golf, but it makes me think
about just expensive hobbies or activities or interests that you have. Dude,
Golf is one of the most expensive, like other than
playing polo or like being a race car driver, yeah,
or something like that. Like there is no other sport
that is as expensive as golf. Like folks paying like
(05:46):
ten thousand dollars to join a club just to have
access to be able to that earns you the privilege
to be able to pay your monthly dues in order
to go and play golf.
Speaker 1 (05:54):
As a kid who grew up in Augusta, you can
play whenever you want, right not true?
Speaker 2 (05:59):
Is yeah, this is coming from somebody who loved golf
when I was younger. Like literally, I would come home
in middle school and me and my best friend we
would jump. We'd sneak onto the course behind his house
and we'd play whole five, six, seven, and eight and
that's where I lived, and we'd hop off like that
was a good two hour activity after school for a
thirteen year old. But bottom line, what I guess this
is a PSA to encourage folks to realize that you
(06:22):
have more control over the different things that you find interesting,
and it's worth considering how much money it takes to
pursue some of these some of these interests. I think
a lot of folks they feel sort of like their
hand has been forced and they have to do these things,
when in reality, like you don't have to do these things.
And guess what when I went off to college, I
didn't have much money, and when I graduated college, I
was broke. Guess what I didn't play? I didn't play
(06:44):
golf anywhere. Instead, I went hiking because that was free.
And so if you enjoy golf and you've got the money,
that's fine. I'm not picking on expensive sports like watching
you know, like football and golf. Obviously golf is a
more extreme example. But if it's crimping your but if
it's keeping you from achieving different financial goals, realize that
you've got some control. I think if it's your craft
(07:07):
beer equivalent, okay, maybe you can splurge every now and then,
but you're gonna have to find.
Speaker 3 (07:11):
Some creative ways to reduce.
Speaker 2 (07:13):
That cost while achieving some of the other financial goals
that you have in your life.
Speaker 3 (07:16):
That's all.
Speaker 1 (07:16):
And maybe all your friends are talking about the NFL,
and that's the thing that you risk, is not being
included in those conversations, not knowing, not having watched like
a slate of six games on Sunday, not having hand
with I think it's on YouTube TV now, and yeah,
maybe it's maybe it's worth that because maybe you find
other things to talk about.
Speaker 3 (07:34):
Yep. I don't know.
Speaker 1 (07:35):
The NFL obsession and college football where we live to
I don't know. We feel like outcast because we don't
engage in those sports in the same way that other
people do.
Speaker 2 (07:44):
Just want to encourage folks to be proactive in some
of the things that you're pursuing.
Speaker 1 (07:48):
Yeah, and then you find a group of other friends
who don't similarly don't care about that stuff, or maybe
care about other things that you care about. Let's talk
about home improvement for a second, Matt, not the old
Tomalin show, although that was a good one back in
the day. Home improvement projects with the highest ROI. According
to new stats from Zonda, Americans are still spending a
lot of money on renovations, to the tune of four
hundred and fifty billion dollars this year. But the and
(08:11):
this is going to sound like a fake headline number
one is not what I suspected. Like, the thing that
Zenda pointed out in their stats was that the most
bang for your buck that you're going to get in
any sort of home renovation is replacing your garage door.
Speaker 3 (08:25):
Yeah I didn't know that. Oh yeah, it's I feel
like it's been the garage door for like for a
number of years running.
Speaker 1 (08:31):
Which is interesting. My brother in law, his full time
job is replacing garage doors. He needs to tout this
to people. It is, this is great market.
Speaker 2 (08:38):
It's like the biggest thing that you see from the street, right,
Like like this is a massive way to boost your
curb appeals like which which ones look better? Like ones
that are like stayed or they got the windows. I'm
guessing those are expensive. Yeah, I've got it cheap. No,
there's you can go really expensive with garage doors or
is this crappy? He was literally telling me about some
new new version that's like super quiet, where it's like
a direct drive motor or something. Yeah, I don't have that, No,
(09:01):
mean neither. Our sounds like a trash truck, like compacting trash.
Like when it opens and closes, it like squeaks, sounds
like animals are screaming.
Speaker 3 (09:09):
I don't know. It's awful.
Speaker 1 (09:11):
Yeah, apparently this one is like quiet as a mouse. Okay,
But similarly, putting in a new front door is also
an upgrade that will actually pay more.
Speaker 3 (09:19):
Than pay off.
Speaker 1 (09:19):
It makes sense, right, and I think it speaks to
the curve of peel thing. Yeah, a minor kitchen model
that was close, which reveals that a modest upgrade before
selling can help your bottom line potentially, but a major
remodel will not the most important takeaway though, I think
in these stats is that almost no home renovation is
going to bring you more money when it comes time
to sell. Only three out of the twenty three home
(09:41):
improvements that Zonda studied provided a positive financial return. Upgrading
your home is rarely a financial win, right. It's typically
a lifestyle decision, which is totally fine, But don't trick
yourself into thinking that you're going to be getting the
bulk of those dollars back someday. Most of the time,
it's just not the case. I think sometimes that we're like, well,
I'm going to do this update, and yeah, I'm gonna
(10:01):
get some joy out of it, but at least in
the back of my mind, I'm thinking that this is
providing future value. This is a smart money move. Typically
not a smart money move.
Speaker 2 (10:08):
Yeah, I think that is a phrase that we need
to say less often.
Speaker 3 (10:12):
This is going to boost resale.
Speaker 2 (10:15):
It might be, but all it takes is somebody who
wants Everyone has such difference in opinions, and even though
this is something that you might think is beautiful, you know,
the person who wants to buy your house is thinking, yeah,
I'm going to rip that out as soon as as
soon as we move in It honestly makes me think
of like at our old house. One of the first
things we did, and I so stand by this decision,
was we ripped.
Speaker 3 (10:35):
Out the counter That's exactly what we did.
Speaker 2 (10:37):
It had the standard black and tan brown granite countertops,
you know what I'm talking about. Yeah, perfectly fine and functional,
but we weren't a big fan, and so from day
one we said, you know what, let's just go ahead
and pull those out so that way when we're in
here cooking, it's something that we love to do. We
enjoy being in the space.
Speaker 1 (10:52):
But the person who put them in probably thought everybody's
exactly exactly and we at the time it seemed a
bit excessive, but there's no part of me that regretted
that DECI back and forth on that because it was expensive,
but you realize, but we hate them, yeah, and we
wanted to create a space for us that we're going
to enjoy from day one. So on a similar topic,
if you're looking to sell a home, should you pay
(11:13):
to have it staged? The journal had an article about
the rising demand for homestagers specifically, and they also talked
about how it's becoming more expensive to have a professional
make your house look more awesome. But the argument is,
what if your home sells more quickly, you know, or
what if it sells for more money, that could certainly.
Speaker 3 (11:33):
Make it worth it.
Speaker 2 (11:33):
It's just hard though, to find specific numbers out there
that reflect that reality. I think it's it's more of
a personal decision. But like, intuitively it makes sense because
you're thinking and you see certain properties listed right, and
it's just empty seems kind of I don't know, it's uninspiring.
Perhaps it's hard to envision how you're going to live
in that home, and especially if it's like a quirky space, yeah,
(11:55):
where you need some additional creativity of someone to come
along beside you and to oh, this is how you
would use this space. I think that can. I don't
know it intuitively makes sense. I think it depends on
if you've got the money on hand to foot a
bill like that, to handle that expense.
Speaker 3 (12:09):
Sure.
Speaker 1 (12:09):
Okay, So I recently sold a home Matt When we
moved up here a couple of years ago. We ended
up renting out our primary home that we had lived
in and we just sold it because tax reasons, right,
and we did end up staging the home, but that
was because we didn't have any of our stuff in there.
Speaker 3 (12:25):
It was empty.
Speaker 1 (12:26):
I think for a lot of people it makes sense
to maybe minimize your possessions a little bit, to stage
the home with the things you already have, do a
little cell staging, right, But if your home is empty,
I think staging it can make sense. I think it
can be worth the cost, especially when you talk about
like time being money. The longer your home sits on
the market, that's costing you.
Speaker 3 (12:46):
Days on market.
Speaker 2 (12:47):
Like, yeah, get that stigma and folks are less likely
to pounce on it.
Speaker 1 (12:51):
I don't know that you're likely to get twenty grand
more and it's worth the four thousand dollars staging fee
or anything like that. But I do think it might sell,
you know, thirty days sooner or something, and maybe you
get a few thousand dollars more, and so maybe it
cancels out. So yeah, I think it's a It can
be a hard decision, can feel frustrating to put the
bill for homestaging, and hopefully if you're still living in it,
yeah you don't have to. But yeah, if the home's empty,
(13:13):
I don't know. I think it can make sense, especially
for certain kinds of homes totally.
Speaker 2 (13:16):
And what I think this also presents is an opportunity
for home buyers because if you come across a home
and it's got terrible photos, Dude, we're still on the fence,
by the way, as to whether or not we're going
to renovate our home, and so we're still looking at
other homes that are out there on the market, and
we came across one.
Speaker 3 (13:30):
The photos were terrible.
Speaker 2 (13:31):
It was like it was so clear that whoever took
these photos, I think it was just the realtor or
somebody that works for the company that owns the home.
No furniture inside at all, and it makes it really
difficult to know how the space is.
Speaker 3 (13:43):
Going to be used.
Speaker 2 (13:44):
But what I see the is an opportunity yeah, as
a home buyer, because what I see is a property
that fewer folks are going to go visit, and I'm like, Okay,
that actually could be a hoorly marketed, a really great
home right there. We just have to wait for the
price to drop and then we'll pounce. Yeah, whereas everyone
else is thinking, oh, yeah, the house deserves to drop,
it's not worth it, but in reality it is. It's
just tough to envision yourself in that space. All right, man,
let's shift gears. Let's now talk about childcare because it
(14:07):
is now more expensive than rent for folks who have
at least two kids, accounting for roughly ten percent of
a married couple's income, that's a pretty fat slice going
to the daycare center. Man, it's crazy to think that
this is like a top line item now so many
folks and we don't necessarily have a silver bullet solution
(14:27):
for this problem. But for many families with two or
more kids in paid childcare, I think what's important to
do here is to run the numbers because I think,
I mean, especially after taxes, it might make sense for
one parent to stay home perhaps and you know, at
least until one of those kids ends up in school
full time. I do think if you have family locally
who can help out, that can certainly reduce the cost
(14:50):
something that you are doing a little bit there, Joel.
But more than anything, I want to point to sharing
or trading duties with other nearby parents and other friends
of the family, because I think that can be Andrew help.
It makes me think back to this is something that
you and I did, our families did back when we
had our first kids, our wives were still working, and
so we created a simple spreadsheet where we tracked the
hours of how many how much, how many hours y'all
(15:12):
would watch ev how many hours we would watch SEMA,
And at the end of the month had it formulated
to where it would just spit out a number as
to how much either you owed us or we owed you. Yeah,
and it was never all that much because we're trading off.
But if you if y'all did happen to have a
busier month, okay, that means we're you know, we had
more hours with the kid, and so you just venmode
(15:34):
or cashedp over a little more money. I think that's
just it's sort of like how we do date night.
It's like a continuation of that's.
Speaker 3 (15:40):
An outside of the box approach where we swap off
save a ton of money. Most people don't think about it.
Speaker 1 (15:45):
They think childcare, you got to go to the traditional route,
and yeah, I think, like you can cobble together a
little bit, and yeah, maybe it takes a little bit
more planning, a little more like texting back and forth
trying to figure out the schedule and stuff like that.
Speaker 2 (15:56):
I think, yeah, this is another argument too, for working
from home because of the flexibility that allows folks. You
may not be as productive working from home, but it
certainly gives you the ability to trim down on some
of those costs.
Speaker 3 (16:09):
Yeah, that's true.
Speaker 1 (16:09):
Speaking of work from home, I think it's changed the
lives of a lot of Americans for the better, right,
commuting less let's clutch. Many folks have found that they've
been able to claw back a whole lot of time
into their lives, and they're like never going back to
the old way of doing things. We've also highlighted some
of the downsides, Right, you might not get promoted at
the same rate. You might not you know, make as
much as some of your in office colleagues who are
(16:30):
showing up four or five days a week. Another downside, though,
is that work from home costs people to spend more
money online. New research from Stanford and Northwestern finds that
we collectively spent three hundred and seventy five million dollars
more last year.
Speaker 3 (16:45):
Yeah. I so believe this.
Speaker 2 (16:47):
Yeah, because, like, if you're not in an office environment,
you don't have it doesn't feel like someone's necessarily looking
over your shoulder.
Speaker 3 (16:52):
You're you're gonna goof off a little more.
Speaker 1 (16:53):
You're like, I'll open another tab, head over to my
favorite retailer.
Speaker 3 (16:57):
Oh, I got an email in the box. It's a
twenty percent off sale one of my facebses some perusing
on eBay. Ye see what they got out there.
Speaker 1 (17:04):
I just so I think it's true. I think people
feel a little less guilty about doing some internet shopping
while they're working, when they're doing it from home, and so,
I don't know. I think for a lot of folks,
maybe it's like a post zoom habit that they need
to crack. I think our advice is just to find
something better to replace it with, because I do think
it is kind of habitual.
Speaker 3 (17:23):
So maybe a few push ups, a post.
Speaker 1 (17:24):
Lunch walk, whatever it is, it's kind of gets you
out of that framework of I just finished a task.
Let me hop over to this other thing that's gonna
like release some stress or or at least, like, I
don't know, let me zone out for a minute. I
think there are better ways to do it that don't
cost us money.
Speaker 2 (17:38):
Absolutely, we've you and I have been personally not on
the air talking about how beneficial it is to walk
in especially you mentioned like the post zoom shopping spree
that takes place the post zoom walk.
Speaker 3 (17:49):
I think specifically it could be so huge because.
Speaker 2 (17:52):
When you're in a zoom meeting, you're obviously sitting, you're
not moving, and so you're sitting, you're glued to the
screen for I don't know, an hour or so, and
so the ability to move around, Hey, your body needs that,
So it's just healthy. Yeah, but the ability to kind
of sometimes those meetings can be stressful, and so going
on a walk I think that can also.
Speaker 3 (18:07):
Help as well, but it's a better way.
Speaker 2 (18:09):
Yeah, And if it's just if it's like a high
strategy kind of meeting, I think going for a walk
it just does something to your body and the ability
to process the information in a way that would be
more beneficial to your work than just.
Speaker 3 (18:20):
Sitting there and like kind of grinding it out.
Speaker 2 (18:23):
It's like, actually stepping away from work in this way
is going to allow you to perhaps be a more
productive worker. So like it's nothing but win win. When
in my book, we're huge proponents of going for walks.
Speaker 1 (18:31):
Yeah, yeah, So I mean, be careful if that's some
habit you found yourself kind of slinking into. Try to
develop a new habit that's better for you and less
harmful to your wallet.
Speaker 3 (18:42):
Our mallet.
Speaker 1 (18:42):
We got more to get to, including was the four
to one k a mistake?
Speaker 3 (18:46):
Oh?
Speaker 1 (18:46):
The New York Times says that the four to one
k sucks. We don't agree with them, so we'll talk
about that and more right after this.
Speaker 3 (19:00):
All right, man, we are back from the break.
Speaker 2 (19:02):
Let's get to the ludicrous headline of the week. This
one is from Bloomberg and it reads how the Harvard
of Trading ruined thousands of young people's lives. This is
a sad one. The article highlights something called I Am Academy,
and this was an organization that sold the promise of
teaching you how to invest all for the low price
(19:24):
of two hundred and seventy five dollars and only two
hundred and fifty dollars a month thereafter.
Speaker 3 (19:28):
It sounds reasonable. Yeah, yeah, like okay. I like the
pricing structure. It sounds like we're under charging for our product.
Speaker 2 (19:34):
The marketing material for these classes, they highlighted their ability
to turn you into like a Goldman Sax level trader.
They promised quote unquote spectacular returns, and unfortunately the folks
running this organization specifically targeted folks from poor backgrounds who
were looking to get rich quickly, which of course caused
them to lose money that they couldn't afford to lose.
(19:56):
They used like guru like language like guru and religious
type language in order to inspire young folks, which would
be bad enough, but then the organization devolved more into
an MLM, which made it even more predatory.
Speaker 1 (20:11):
Yeah, yeah, you said it was only got worse. You
should inspire, but it feels more like coercing, right, It's like, oh,
let me adopt some of this fancy language to make
people think that this is more than just investing. This
is like a lifestyle. This is a way of moving
through the world. You are a brilliant investor along with
this cohort, and it makes you feel like you're a
part of something. And it's it's just like a dirty
(20:32):
tactic to use and especially praying on people who can't
afford to lose money, but.
Speaker 2 (20:35):
More kin too, brainwashing than convincing, right exactly.
Speaker 1 (20:38):
Yeah, And so like you could if you were a customer,
you could avoid paying your monthly fees by bringing in
other unsuspecting victims. You'd even make real money if you
recruited enough warm bodies. So the folks running I Am Academy, Matt,
they were buying houses next to Lionel Messi of course,
so you know that's going to be a nice house.
They were driving Bugattis, which I hear really expensive car.
(21:00):
I don't really know, yeah, not even not even just
a nice tesla.
Speaker 3 (21:05):
It's on the road.
Speaker 1 (21:06):
I probably couldn't but I think they're like three to
six hundred thousand, Like, I think they're really really, really expensive.
So not only did people get bilked out of dollars
for overly complicated advice that they didn't understand, but then
a lot of those people end up ruining friendships, Matt,
because they're recruiting them into this MLM pyramid scheme, and
which is which is awful, right, It's awful enough to
lose money, but I'm sure there were some friendships ruined
(21:27):
over the course of this I Am Academy thing too.
And so we're seeing more and more online courses I
think being offered by content creators these days. A lot
of them are reasonably priced and are teaching reasonably good stuff,
but be careful because a.
Speaker 3 (21:43):
Lot of the info it's not so good.
Speaker 1 (21:45):
Even some of those good courses, well, guess what, you
can get that info for free in reputable books and podcasts.
So they make it sound like, oh, hey, this one
hundred dollars for this course and you're one hundred bucks.
That's not bad if I'm going to learn something good. Sure, well,
a lot of those dollars would still be far better
thrust into your retirement account than into the folks running
and investing school. So this one obviously particularly egregious, But
then I think there are a lot more out there
(22:07):
that aren't nearly as bad and that are helpful potentially,
but still you can get that info for free Philly.
Speaker 2 (22:12):
Back in the day, it was investing newsletters or newspapers
that folks would subscribe to, and now it's kind of
moved on to these different classes that are being offered online.
Speaker 1 (22:19):
Our newsletter, our content always free. Like there are people
who have said, you guys, just launch a course, and
we're like, why we give it away for free, And
that's our model. Go to the library. Go to the library.
There's so many good books there that you don't have
to pay a dimefold get to that Hoopla or Libya.
Speaker 2 (22:34):
That's right, all right on the investing note from New
York Times magazine was the for this. I feel like
this could have been like a secondary liudicrous, Saidler week
was the four oh one k a mistake. And the
premise of this article is that since not everyone out
there has access to a tax advantage retirement.
Speaker 3 (22:51):
Account, it's a failure.
Speaker 2 (22:53):
Basically, too many folks are retiring without enough money set aside.
And you know the times they're not complete wrong, but
the biggest issue here is that they've picked the wrong culprit.
This article laments the demise of the pension specifically, but
the truth is pensions weren't as ubiquitous.
Speaker 3 (23:10):
As we like to think. Yeah, and everyone had them
back No, No, only half.
Speaker 2 (23:14):
Of folks at best had one available to them. And
this is when pensions were at their height. So I mean,
were they nice to have, of course, for sure, But
the costs of pensions became untenable for many companies, for
many municipalities different cities that were offering them. And the
one great thing about most folks not having access to
a defined benefit plan is that they're they're more likely
(23:35):
to switch jobs, which actually increases their pay more significantly.
Over the years, as opposed to being becoming a lifer
at the plan or with the city. But that does
put the onus of funding retirement more on our shoulders
as individuals, which honestly is more The direction I want
to see is moving from moving away from employer provided everything.
Whether it's okay, If there's a way we could do
(23:56):
that with health care on a wide scale, I think
we would also see the prices of that's come down.
We would see benefit and savings coming to individuals on
a personal level as well.
Speaker 3 (24:05):
Yeah. Yeah, employers are poor facilitators of retirement plans and
of healthcare plans. It's hard.
Speaker 1 (24:10):
It would be great if we if employment were divorced
from those two things, because it just doesn't make sense
to cobble them all together and to get all those
things from your employer. Granted, there are reasons that that
switch happened in the United States. Doesn't make it a
good thing. And you're right, Matt, like the pensions, when
you think about it from like a nostalgia perspective, Oh
it sounds really nice.
Speaker 3 (24:30):
That's what it is. This nostalagia.
Speaker 2 (24:31):
More than just leave it to beaver, it's like wishing
for the days of your but like, we are so
much better off as a society now than in nineteen
sixty five.
Speaker 1 (24:39):
Yeah, trust me, And guess what it was called golden
handcuffs for a reason you felt like you had to
stay in a place. Let's say you can go make
twenty percent down more down the road, which we talk
about these stats all the time, how much more you
can make by switching jobs. If you just did the
right thing and DEI invested more because you're able to
make more, well, then you would end up with far
more money than what the pension would provide you in retirement.
(25:00):
And so yeah, I don't know if if you don't
have access to a four one K or four h
three B or TSP. By the way, I don't think
that means you're out of luck on the retirement account
front either. So that's one of their things, is.
Speaker 3 (25:09):
Like their options.
Speaker 1 (25:10):
Yeah, hey, you don't have a four to one K,
you're screwed. Well, no iras exist, right, and it's entirely
possible to retire with a million dollars plus by only
maxing that one account each and every year. Right, I
don't think you should stop there. If you're self employed,
you can toss Big Bucks into a solo four oh
one k. They're cheap, they're easy to open, they're easy
to contribute to. So not having a traditional four one
(25:31):
K available to you through your employer, it's just not
as demoralizing as The New York Times makes it sound. Right,
social security still exists, although politicians need to shore it up,
but saving for retirement is largely an individual endeavor.
Speaker 3 (25:44):
Yep.
Speaker 1 (25:44):
And by the way, jobs with pensions do still exist.
Life Hacker just published an article highlighting the sectors where
pensions are still kind of the norm, and so if
you're keen on having one, we'll look to government jobs,
look to the military, and look to utility providers. Those
are typically the sectors where where pensions still remain totally.
Speaker 2 (26:02):
By the way, there's far more money in iras than
there are in four to one k's. Folks are actually
getting the message. They're using these accounts effectively, and specifically,
folks are flocking to wroth iras in particular, according to
research from the Center for Retirement Research at Boston College,
and they give a lot of credence to different fintech
(26:23):
companies out there where they're just making it easier for
folks to open a roth ira and to contribute regularly.
And I think that's the answer. Is the answer isn't
to go back to the way things used to be.
It's about finding new and innovative and creative solutions that
make it more accessible to folks. So like it makes
me think of even just like auto enrolling folks in
four to one k's like, that's what we need to do.
Speaker 3 (26:44):
We make that the default instead of this for those
people to think through.
Speaker 2 (26:47):
It nudge theory, Richard Thaylor. It goes to creating easy
defaults and incentives for folks to get invested on an
individual love. That's something I love. I love to see.
Speaker 1 (26:57):
Now I completely agree. I think it's not the four
one ks are the problem. And then we need to
go back to pensions because yeah, again, pensions do still
exist for some employers. I had one the very beginning
of my working career, so Matt, I'll have a small
payday for the rest of my life once I turned
sixty five from those few years working there.
Speaker 2 (27:14):
In case everyone Joel is very wealthy, it's.
Speaker 1 (27:19):
Like it's a very very modest pension because I did
not work that all that long and I didn't make
a ton of money when I worked there.
Speaker 2 (27:24):
But everyone's like, why won't you make him a beneficiary?
Like everybody like, just a little bit, that's all it takes.
Speaker 1 (27:31):
If a thousand people sign a petition, Matt, I will
give you out one percent beneficiary.
Speaker 3 (27:36):
It wouldn't be too difficult to get a thousand people
a petition.
Speaker 2 (27:40):
You know that you do your thing, you might be
eating your words so inclined to actually do that, all right.
Speaker 1 (27:48):
I think you're right though, And I think it's interesting,
like the four one K isn't the mistake, And part
of that too is And this is something we've talked
about a lot. Is just financial education, better financial education,
growing helping is especially youngsters in high school make this
correlation as they're kind of getting to the point where
they're earning money. A lot of kids. I started working
when I was fourteen. If I had known some of
(28:09):
those things, if I was being taught those things as
money was coming into my life, I might have made
some shifts earlier about where that money was going. Thought
less about spending more on the car, thought more about
funding a roth Ira or something like that. Right, But
I think that's part of the solution, at least.
Speaker 3 (28:23):
Too saying yes to the right things and no to
the wrong things.
Speaker 1 (28:26):
Now, yeah, all right, so four or one k's we
would say are not a mistake, but college might be.
We talked about apprenticeships last week with Ryan Craig, and
good news is that enrollment invocational training programs is growing
as more gen z yers. They're giving like the heisman
the stiff arm to go into college to getting an
advanced degree, and after we saw these new stats debating
(28:47):
other options, I think makes even more sense.
Speaker 3 (28:49):
Right.
Speaker 1 (28:50):
The bad news is that thirty percent of college graduates
won't earn enough to offset the price of their higher education,
not just in like the first decade, but over the
course of their whole career. Thirty percent of people are
actually going to be underwater from a debt and income
perspective thanks to the years they spent getting that college degree.
Plus nearly half of master's degree programs leave students financially
(29:14):
worse off.
Speaker 3 (29:15):
Right.
Speaker 1 (29:15):
College, yes, of course, can still make sense for some folks,
even with the much higher price tag these days. But
as a listener who who is thinking about going back
to getting an advanced degree, or as a listener of
someone who has kids that are in high school who
are getting close to college, Like, these are conversations that
you have to have that you have to be honest
and upfront about. And the biggest thing, Matt, I think
(29:36):
that stuck out to me in this data was to
be careful what you major in. Right, That's the most
important factor when it comes to lifetime earnings. Engineering, computer science,
and nursing degrees, those are like slam dunks. Overwhelmingly you're
going to make more. It's going to pay off for you.
Other majors can come with a bit of a lifetime
financial advantage. And we of course know too that your
(29:57):
vocation isn't all about making bank. But count the cost
before you opt for an expensive education that might or
might not pay off.
Speaker 2 (30:04):
Yeah, do it with your eyes wide open. And we'll
actually link to and we've done this before, but we'll
link to the BLS where they have statistics as to
the expected earnings of certain degree holders. And I think
that can help folks to make a more informed decision.
Speaker 1 (30:17):
And it's not like you're you know, most of us
are not going to say, oh, engineer pays the most.
Guess what, I have zero intuition in that, Like I
would never do that. Yeah, yeah, I'm gonna do that.
Speaker 2 (30:26):
Because one of the many point data points that I
think folks need to consider it. And luckily, I think
more and more folks are doing that given the ludicrously
high cost of college. Hey man, before we wrap it up,
let's give a little newsletter referral.
Speaker 3 (30:41):
Shout out to our friend Andy out in Utah.
Speaker 2 (30:44):
So not only does he provide us beer to drink
on the show from time to time, yeah sos sending
out the how to Money newsletter Andy, Thank you so
much for that.
Speaker 3 (30:52):
Appreciate handy.
Speaker 1 (30:54):
And yeah, if you are not subscribed to the how
to Money newsletter, what are you doing with your life?
Go go check that out how tomoney dot com slash newsletter.
It's free, of course, unlike those expensive, awful investing courses
that we just talked about. But Matt, that's going to
do it for this one. Hope everyone out there has
a great weekend. Until next time, Best Friends Album, Best
Friends Out,
Welcome to How the Money. I'm Joel and I am Matt,
and today we're talking about forgetting football, home Improvement ROI
and ignominious investing, ignominious.
Speaker 2 (00:30):
Look at you using the big words, Joel, you bust
out in the old Webster's the sours on your dust sleeves.
Speaker 1 (00:35):
I just came out of this giant brain of mine.
Speaker 2 (00:37):
Matt, obviously, welcome to the Friday Flight, which is where
we discuss the different headlines and the stories that we've
come across this week, and we also try to impress
you with our big words, with our big lee words.
What's this you got to know here about wanting to
talk about your friend's retirement account?
Speaker 3 (00:52):
Yeah?
Speaker 1 (00:53):
Okay, So one of my friends sent me a screenshot
the other day. She had found like some money that
she didn't know existed in her teacher return account, and
I was like, awesome, that's always fun. But there was
this big red thing at the bottom of the of
the screenshot that she sent me, and it said you
do not have a beneficiary picked out. You need to
make this happen. And I was like, hey, whoa, No,
that's for real, Like you should look at the red
(01:13):
type down below. Congrats on finding money. You didn't realize.
Speaker 2 (01:16):
Oh she wasn't talking. She didn't share that with you.
To talk about the beneficiary.
Speaker 1 (01:22):
It's just something that you happen, like, hey, there's actually
something addressed here, just in case something happens, like you
want to make sure that your money is going to
thry person. I think we actually mentioned this in the
how to Money newsletter on Tuesday as well. This is
just such an important thing Matt that so many people,
especially like one, have you ever named a beneficiary?
Speaker 3 (01:39):
Or two?
Speaker 1 (01:40):
Do you need to change beneficiaries? Has something changed in
your life? Maybe you were The worst.
Speaker 2 (01:45):
Case scenario is you've got all your money and going
to an X right right, exactly, you no longer care
for Perhaps maybe they're a fine person in their own right,
but you don't necessarily they're a terrible person.
Speaker 3 (01:56):
Hundreds of thousands and the dollars going to them if
you die.
Speaker 1 (01:58):
If that's the case, that would be the app the
worst thing, right, but yeah, definitely going there.
Speaker 3 (02:03):
And you have to do with this.
Speaker 1 (02:04):
Let's say you have a four one K a Vanguard,
and you have an irat Fidelity or whatever. You need
to do this with each one of those accounts log in.
Make sure your beneficiary is who you want it to be,
and make sure you have one, because the beneficiary actually
supersedes what it says in your will. Matt, it's really
really important to have those named properly and to have
(02:24):
the yea. And by the way, you can name multiple
beneficiaries and different percentages or whatever.
Speaker 2 (02:27):
You can slice off the pie however it is that
you want, which means, Joel, that you could slice off
the tiniest little pie and send it my way if
you'd like ould. No, you don't want to, I'll think
about it.
Speaker 3 (02:36):
Okay, all right, let's die. Wife be like, why is
Tim saying one?
Speaker 1 (02:40):
I know they're but come on, no, you've got to
Candis to.
Speaker 3 (02:42):
Provide for all right, let's get into it.
Speaker 2 (02:45):
Let's talk about streaming in sports, and specifically, let's talk
about foosball.
Speaker 3 (02:50):
Bobby Bouchet refference there for you.
Speaker 1 (02:51):
But I heard they're making a water Boy too, or no,
they're making some Adam Sandler movie. They're doing a second
version of Oh no, It's Happy Gilmore.
Speaker 3 (02:59):
Oh. I don't know.
Speaker 2 (03:00):
There seems to be like a golf resurgence as of
like I feel like I don't know about you. Do
you feel like more folks you talk to play golf
than you realized?
Speaker 3 (03:09):
Yeah? I think so.
Speaker 2 (03:10):
I'm always shocked. I'm always surprised. I'm sticking a disc
golf myself, much more affordable. But uh, okay, football specifically, though,
if you want to watch some football, you're going to
have to wait until the fall, obviously, but you might
want to think about actually abandoning football, maybe perhaps as
a hobby before then, anyway, And that is because it's
going to cost you something around sixteen hundred dollars to
(03:33):
watch a full slate of NFL games next season. This
is according to some number crunching over at The Guardian.
Speaker 1 (03:39):
And that's not just if you go in person, by
the way, because like, yeah, going to see an NFL
game in person is crazy expensive.
Speaker 2 (03:45):
Oh yeah, yeah, this is just watching it on TV
and literally just streaming it. Yeah, And this is before if,
if let's say, you gamble, perhaps this is before any
losses from some poor decisions that you've made. But we
bring this up because streaming was the post to help
us to be able to watch our favorite content, and
to do so with less expense in our lives, but
(04:05):
with every streamer taking just a few games here and
there from every major league sport. You'll be spending more
than ever to keep up with your favorite leagues, with
your favorite.
Speaker 3 (04:14):
Teams in the coming years.
Speaker 2 (04:15):
And even having a cable subscription wouldn't help you to
avoid this. Play it to Yeah, you're gonna be spending
more than ever.
Speaker 1 (04:21):
Just a heads up, that's exactly right, because you're gonna
get Yeah, maybe some of those games on cable, but
then there's oh, you gotta have Amazon Prime to watch
Thursday night football, and then there's the new Netflix games
on Christmas Day. Peacock has a few games competing with Yeah,
that's right into all of them, right, And so think
about the even the NFL game that was the Chiefs
versus the Dolphins, that the playoff game that happened last year,
(04:42):
and it was only on Peacock and people were upset,
but a bunch of people signed up for Peacock and
guess what, they also blocked out the free trial during
ahead of that because they knew what was about to happen.
Guess what they made bank because seventy one percent of
the subscribers who signed up just to watch that football
game have remained Peacock subscribers because we're not so great
at canceling subscriptions after the fact, and so our advice
(05:05):
to you don't let inertia get the best of you.
I think our collective obsession with sports is costing us
a whole lot of money in streaming, and it's so yeah,
you have to be careful and you have to realize, like,
this is how much it's going to cost. If I
want to watch all these games. Maybe you can say
I don't care about the Thursday night games, but be
thoughtful about what you're spending, because if you do have
to watch it all, it's going to cost you money.
Speaker 2 (05:25):
It's just about being intentional with your money. It's funny,
we're just talking about golf, but it makes me think
about just expensive hobbies or activities or interests that you have. Dude,
Golf is one of the most expensive, like other than
playing polo or like being a race car driver, yeah,
or something like that. Like there is no other sport
that is as expensive as golf. Like folks paying like
(05:46):
ten thousand dollars to join a club just to have
access to be able to that earns you the privilege
to be able to pay your monthly dues in order
to go and play golf.
Speaker 1 (05:54):
As a kid who grew up in Augusta, you can
play whenever you want, right not true?
Speaker 2 (05:59):
Is yeah, this is coming from somebody who loved golf
when I was younger. Like literally, I would come home
in middle school and me and my best friend we
would jump. We'd sneak onto the course behind his house
and we'd play whole five, six, seven, and eight and
that's where I lived, and we'd hop off like that
was a good two hour activity after school for a
thirteen year old. But bottom line, what I guess this
is a PSA to encourage folks to realize that you
(06:22):
have more control over the different things that you find interesting,
and it's worth considering how much money it takes to
pursue some of these some of these interests. I think
a lot of folks they feel sort of like their
hand has been forced and they have to do these things,
when in reality, like you don't have to do these things.
And guess what when I went off to college, I
didn't have much money, and when I graduated college, I
was broke. Guess what I didn't play? I didn't play
(06:44):
golf anywhere. Instead, I went hiking because that was free.
And so if you enjoy golf and you've got the money,
that's fine. I'm not picking on expensive sports like watching
you know, like football and golf. Obviously golf is a
more extreme example. But if it's crimping your but if
it's keeping you from achieving different financial goals, realize that
you've got some control. I think if it's your craft
(07:07):
beer equivalent, okay, maybe you can splurge every now and then,
but you're gonna have to find.
Speaker 3 (07:11):
Some creative ways to reduce.
Speaker 2 (07:13):
That cost while achieving some of the other financial goals
that you have in your life.
Speaker 3 (07:16):
That's all.
Speaker 1 (07:16):
And maybe all your friends are talking about the NFL,
and that's the thing that you risk, is not being
included in those conversations, not knowing, not having watched like
a slate of six games on Sunday, not having hand
with I think it's on YouTube TV now, and yeah,
maybe it's maybe it's worth that because maybe you find
other things to talk about.
Speaker 3 (07:34):
Yep. I don't know.
Speaker 1 (07:35):
The NFL obsession and college football where we live to
I don't know. We feel like outcast because we don't
engage in those sports in the same way that other
people do.
Speaker 2 (07:44):
Just want to encourage folks to be proactive in some
of the things that you're pursuing.
Speaker 1 (07:48):
Yeah, and then you find a group of other friends
who don't similarly don't care about that stuff, or maybe
care about other things that you care about. Let's talk
about home improvement for a second, Matt, not the old
Tomalin show, although that was a good one back in
the day. Home improvement projects with the highest ROI. According
to new stats from Zonda, Americans are still spending a
lot of money on renovations, to the tune of four
hundred and fifty billion dollars this year. But the and
(08:11):
this is going to sound like a fake headline number
one is not what I suspected. Like, the thing that
Zenda pointed out in their stats was that the most
bang for your buck that you're going to get in
any sort of home renovation is replacing your garage door.
Speaker 3 (08:25):
Yeah I didn't know that. Oh yeah, it's I feel
like it's been the garage door for like for a
number of years running.
Speaker 1 (08:31):
Which is interesting. My brother in law, his full time
job is replacing garage doors. He needs to tout this
to people. It is, this is great market.
Speaker 2 (08:38):
It's like the biggest thing that you see from the street, right,
Like like this is a massive way to boost your
curb appeals like which which ones look better? Like ones
that are like stayed or they got the windows. I'm
guessing those are expensive. Yeah, I've got it cheap. No,
there's you can go really expensive with garage doors or
is this crappy? He was literally telling me about some
new new version that's like super quiet, where it's like
a direct drive motor or something. Yeah, I don't have that, No,
(09:01):
mean neither. Our sounds like a trash truck, like compacting trash.
Like when it opens and closes, it like squeaks, sounds
like animals are screaming.
Speaker 3 (09:09):
I don't know. It's awful.
Speaker 1 (09:11):
Yeah, apparently this one is like quiet as a mouse. Okay,
But similarly, putting in a new front door is also
an upgrade that will actually pay more.
Speaker 3 (09:19):
Than pay off.
Speaker 1 (09:19):
It makes sense, right, and I think it speaks to
the curve of peel thing. Yeah, a minor kitchen model
that was close, which reveals that a modest upgrade before
selling can help your bottom line potentially, but a major
remodel will not the most important takeaway though, I think
in these stats is that almost no home renovation is
going to bring you more money when it comes time
to sell. Only three out of the twenty three home
(09:41):
improvements that Zonda studied provided a positive financial return. Upgrading
your home is rarely a financial win, right. It's typically
a lifestyle decision, which is totally fine, But don't trick
yourself into thinking that you're going to be getting the
bulk of those dollars back someday. Most of the time,
it's just not the case. I think sometimes that we're like, well,
I'm going to do this update, and yeah, I'm gonna
(10:01):
get some joy out of it, but at least in
the back of my mind, I'm thinking that this is
providing future value. This is a smart money move. Typically
not a smart money move.
Speaker 2 (10:08):
Yeah, I think that is a phrase that we need
to say less often.
Speaker 3 (10:12):
This is going to boost resale.
Speaker 2 (10:15):
It might be, but all it takes is somebody who
wants Everyone has such difference in opinions, and even though
this is something that you might think is beautiful, you know,
the person who wants to buy your house is thinking, yeah,
I'm going to rip that out as soon as as
soon as we move in It honestly makes me think
of like at our old house. One of the first
things we did, and I so stand by this decision,
was we ripped.
Speaker 3 (10:35):
Out the counter That's exactly what we did.
Speaker 2 (10:37):
It had the standard black and tan brown granite countertops,
you know what I'm talking about. Yeah, perfectly fine and functional,
but we weren't a big fan, and so from day
one we said, you know what, let's just go ahead
and pull those out so that way when we're in
here cooking, it's something that we love to do. We
enjoy being in the space.
Speaker 1 (10:52):
But the person who put them in probably thought everybody's
exactly exactly and we at the time it seemed a
bit excessive, but there's no part of me that regretted
that DECI back and forth on that because it was expensive,
but you realize, but we hate them, yeah, and we
wanted to create a space for us that we're going
to enjoy from day one. So on a similar topic,
if you're looking to sell a home, should you pay
(11:13):
to have it staged? The journal had an article about
the rising demand for homestagers specifically, and they also talked
about how it's becoming more expensive to have a professional
make your house look more awesome. But the argument is,
what if your home sells more quickly, you know, or
what if it sells for more money, that could certainly.
Speaker 3 (11:33):
Make it worth it.
Speaker 2 (11:33):
It's just hard though, to find specific numbers out there
that reflect that reality. I think it's it's more of
a personal decision. But like, intuitively it makes sense because
you're thinking and you see certain properties listed right, and
it's just empty seems kind of I don't know, it's uninspiring.
Perhaps it's hard to envision how you're going to live
in that home, and especially if it's like a quirky space, yeah,
(11:55):
where you need some additional creativity of someone to come
along beside you and to oh, this is how you
would use this space. I think that can. I don't
know it intuitively makes sense. I think it depends on
if you've got the money on hand to foot a
bill like that, to handle that expense.
Speaker 3 (12:09):
Sure.
Speaker 1 (12:09):
Okay, So I recently sold a home Matt When we
moved up here a couple of years ago. We ended
up renting out our primary home that we had lived
in and we just sold it because tax reasons, right,
and we did end up staging the home, but that
was because we didn't have any of our stuff in there.
Speaker 3 (12:25):
It was empty.
Speaker 1 (12:26):
I think for a lot of people it makes sense
to maybe minimize your possessions a little bit, to stage
the home with the things you already have, do a
little cell staging, right, But if your home is empty,
I think staging it can make sense. I think it
can be worth the cost, especially when you talk about
like time being money. The longer your home sits on
the market, that's costing you.
Speaker 3 (12:46):
Days on market.
Speaker 2 (12:47):
Like, yeah, get that stigma and folks are less likely
to pounce on it.
Speaker 1 (12:51):
I don't know that you're likely to get twenty grand
more and it's worth the four thousand dollars staging fee
or anything like that. But I do think it might sell,
you know, thirty days sooner or something, and maybe you
get a few thousand dollars more, and so maybe it
cancels out. So yeah, I think it's a It can
be a hard decision, can feel frustrating to put the
bill for homestaging, and hopefully if you're still living in it,
yeah you don't have to. But yeah, if the home's empty,
(13:13):
I don't know. I think it can make sense, especially
for certain kinds of homes totally.
Speaker 2 (13:16):
And what I think this also presents is an opportunity
for home buyers because if you come across a home
and it's got terrible photos, Dude, we're still on the fence,
by the way, as to whether or not we're going
to renovate our home, and so we're still looking at
other homes that are out there on the market, and
we came across one.
Speaker 3 (13:30):
The photos were terrible.
Speaker 2 (13:31):
It was like it was so clear that whoever took
these photos, I think it was just the realtor or
somebody that works for the company that owns the home.
No furniture inside at all, and it makes it really
difficult to know how the space is.
Speaker 3 (13:43):
Going to be used.
Speaker 2 (13:44):
But what I see the is an opportunity yeah, as
a home buyer, because what I see is a property
that fewer folks are going to go visit, and I'm like, Okay,
that actually could be a hoorly marketed, a really great
home right there. We just have to wait for the
price to drop and then we'll pounce. Yeah, whereas everyone
else is thinking, oh, yeah, the house deserves to drop,
it's not worth it, but in reality it is. It's
just tough to envision yourself in that space. All right, man,
let's shift gears. Let's now talk about childcare because it
(14:07):
is now more expensive than rent for folks who have
at least two kids, accounting for roughly ten percent of
a married couple's income, that's a pretty fat slice going
to the daycare center. Man, it's crazy to think that
this is like a top line item now so many
folks and we don't necessarily have a silver bullet solution
(14:27):
for this problem. But for many families with two or
more kids in paid childcare, I think what's important to
do here is to run the numbers because I think,
I mean, especially after taxes, it might make sense for
one parent to stay home perhaps and you know, at
least until one of those kids ends up in school
full time. I do think if you have family locally
who can help out, that can certainly reduce the cost
(14:50):
something that you are doing a little bit there, Joel.
But more than anything, I want to point to sharing
or trading duties with other nearby parents and other friends
of the family, because I think that can be Andrew help.
It makes me think back to this is something that
you and I did, our families did back when we
had our first kids, our wives were still working, and
so we created a simple spreadsheet where we tracked the
hours of how many how much, how many hours y'all
(15:12):
would watch ev how many hours we would watch SEMA,
And at the end of the month had it formulated
to where it would just spit out a number as
to how much either you owed us or we owed you. Yeah,
and it was never all that much because we're trading off.
But if you if y'all did happen to have a
busier month, okay, that means we're you know, we had
more hours with the kid, and so you just venmode
(15:34):
or cashedp over a little more money. I think that's
just it's sort of like how we do date night.
It's like a continuation of that's.
Speaker 3 (15:40):
An outside of the box approach where we swap off
save a ton of money. Most people don't think about it.
Speaker 1 (15:45):
They think childcare, you got to go to the traditional route,
and yeah, I think, like you can cobble together a
little bit, and yeah, maybe it takes a little bit
more planning, a little more like texting back and forth
trying to figure out the schedule and stuff like that.
Speaker 2 (15:56):
I think, yeah, this is another argument too, for working
from home because of the flexibility that allows folks. You
may not be as productive working from home, but it
certainly gives you the ability to trim down on some
of those costs.
Speaker 3 (16:09):
Yeah, that's true.
Speaker 1 (16:09):
Speaking of work from home, I think it's changed the
lives of a lot of Americans for the better, right,
commuting less let's clutch. Many folks have found that they've
been able to claw back a whole lot of time
into their lives, and they're like never going back to
the old way of doing things. We've also highlighted some
of the downsides, Right, you might not get promoted at
the same rate. You might not you know, make as
much as some of your in office colleagues who are
(16:30):
showing up four or five days a week. Another downside, though,
is that work from home costs people to spend more
money online. New research from Stanford and Northwestern finds that
we collectively spent three hundred and seventy five million dollars
more last year.
Speaker 3 (16:45):
Yeah. I so believe this.
Speaker 2 (16:47):
Yeah, because, like, if you're not in an office environment,
you don't have it doesn't feel like someone's necessarily looking
over your shoulder.
Speaker 3 (16:52):
You're you're gonna goof off a little more.
Speaker 1 (16:53):
You're like, I'll open another tab, head over to my
favorite retailer.
Speaker 3 (16:57):
Oh, I got an email in the box. It's a
twenty percent off sale one of my facebses some perusing
on eBay. Ye see what they got out there.
Speaker 1 (17:04):
I just so I think it's true. I think people
feel a little less guilty about doing some internet shopping
while they're working, when they're doing it from home, and so,
I don't know. I think for a lot of folks,
maybe it's like a post zoom habit that they need
to crack. I think our advice is just to find
something better to replace it with, because I do think
it is kind of habitual.
Speaker 3 (17:23):
So maybe a few push ups, a post.
Speaker 1 (17:24):
Lunch walk, whatever it is, it's kind of gets you
out of that framework of I just finished a task.
Let me hop over to this other thing that's gonna
like release some stress or or at least, like, I
don't know, let me zone out for a minute. I
think there are better ways to do it that don't
cost us money.
Speaker 2 (17:38):
Absolutely, we've you and I have been personally not on
the air talking about how beneficial it is to walk
in especially you mentioned like the post zoom shopping spree
that takes place the post zoom walk.
Speaker 3 (17:49):
I think specifically it could be so huge because.
Speaker 2 (17:52):
When you're in a zoom meeting, you're obviously sitting, you're
not moving, and so you're sitting, you're glued to the
screen for I don't know, an hour or so, and
so the ability to move around, Hey, your body needs that,
So it's just healthy. Yeah, but the ability to kind
of sometimes those meetings can be stressful, and so going
on a walk I think that can also.
Speaker 3 (18:07):
Help as well, but it's a better way.
Speaker 2 (18:09):
Yeah, And if it's just if it's like a high
strategy kind of meeting, I think going for a walk
it just does something to your body and the ability
to process the information in a way that would be
more beneficial to your work than just.
Speaker 3 (18:20):
Sitting there and like kind of grinding it out.
Speaker 2 (18:23):
It's like, actually stepping away from work in this way
is going to allow you to perhaps be a more
productive worker. So like it's nothing but win win. When
in my book, we're huge proponents of going for walks.
Speaker 1 (18:31):
Yeah, yeah, So I mean, be careful if that's some
habit you found yourself kind of slinking into. Try to
develop a new habit that's better for you and less
harmful to your wallet.
Speaker 3 (18:42):
Our mallet.
Speaker 1 (18:42):
We got more to get to, including was the four
to one k a mistake?
Speaker 3 (18:46):
Oh?
Speaker 1 (18:46):
The New York Times says that the four to one
k sucks. We don't agree with them, so we'll talk
about that and more right after this.
Speaker 3 (19:00):
All right, man, we are back from the break.
Speaker 2 (19:02):
Let's get to the ludicrous headline of the week. This
one is from Bloomberg and it reads how the Harvard
of Trading ruined thousands of young people's lives. This is
a sad one. The article highlights something called I Am Academy,
and this was an organization that sold the promise of
teaching you how to invest all for the low price
(19:24):
of two hundred and seventy five dollars and only two
hundred and fifty dollars a month thereafter.
Speaker 3 (19:28):
It sounds reasonable. Yeah, yeah, like okay. I like the
pricing structure. It sounds like we're under charging for our product.
Speaker 2 (19:34):
The marketing material for these classes, they highlighted their ability
to turn you into like a Goldman Sax level trader.
They promised quote unquote spectacular returns, and unfortunately the folks
running this organization specifically targeted folks from poor backgrounds who
were looking to get rich quickly, which of course caused
them to lose money that they couldn't afford to lose.
(19:56):
They used like guru like language like guru and religious
type language in order to inspire young folks, which would
be bad enough, but then the organization devolved more into
an MLM, which made it even more predatory.
Speaker 1 (20:11):
Yeah, yeah, you said it was only got worse. You
should inspire, but it feels more like coercing, right, It's like, oh,
let me adopt some of this fancy language to make
people think that this is more than just investing. This
is like a lifestyle. This is a way of moving
through the world. You are a brilliant investor along with
this cohort, and it makes you feel like you're a
part of something. And it's it's just like a dirty
(20:32):
tactic to use and especially praying on people who can't
afford to lose money, but.
Speaker 2 (20:35):
More kin too, brainwashing than convincing, right exactly.
Speaker 1 (20:38):
Yeah, And so like you could if you were a customer,
you could avoid paying your monthly fees by bringing in
other unsuspecting victims. You'd even make real money if you
recruited enough warm bodies. So the folks running I Am Academy, Matt,
they were buying houses next to Lionel Messi of course,
so you know that's going to be a nice house.
They were driving Bugattis, which I hear really expensive car.
(21:00):
I don't really know, yeah, not even not even just
a nice tesla.
Speaker 3 (21:05):
It's on the road.
Speaker 1 (21:06):
I probably couldn't but I think they're like three to
six hundred thousand, Like, I think they're really really, really expensive.
So not only did people get bilked out of dollars
for overly complicated advice that they didn't understand, but then
a lot of those people end up ruining friendships, Matt,
because they're recruiting them into this MLM pyramid scheme, and
which is which is awful, right, It's awful enough to
lose money, but I'm sure there were some friendships ruined
(21:27):
over the course of this I Am Academy thing too.
And so we're seeing more and more online courses I
think being offered by content creators these days. A lot
of them are reasonably priced and are teaching reasonably good stuff,
but be careful because a.
Speaker 3 (21:43):
Lot of the info it's not so good.
Speaker 1 (21:45):
Even some of those good courses, well, guess what, you
can get that info for free in reputable books and podcasts.
So they make it sound like, oh, hey, this one
hundred dollars for this course and you're one hundred bucks.
That's not bad if I'm going to learn something good. Sure, well,
a lot of those dollars would still be far better
thrust into your retirement account than into the folks running
and investing school. So this one obviously particularly egregious, But
then I think there are a lot more out there
(22:07):
that aren't nearly as bad and that are helpful potentially,
but still you can get that info for free Philly.
Speaker 2 (22:12):
Back in the day, it was investing newsletters or newspapers
that folks would subscribe to, and now it's kind of
moved on to these different classes that are being offered online.
Speaker 1 (22:19):
Our newsletter, our content always free. Like there are people
who have said, you guys, just launch a course, and
we're like, why we give it away for free, And
that's our model. Go to the library. Go to the library.
There's so many good books there that you don't have
to pay a dimefold get to that Hoopla or Libya.
Speaker 2 (22:34):
That's right, all right on the investing note from New
York Times magazine was the for this. I feel like
this could have been like a secondary liudicrous, Saidler week
was the four oh one k a mistake. And the
premise of this article is that since not everyone out
there has access to a tax advantage retirement.
Speaker 3 (22:51):
Account, it's a failure.
Speaker 2 (22:53):
Basically, too many folks are retiring without enough money set aside.
And you know the times they're not complete wrong, but
the biggest issue here is that they've picked the wrong culprit.
This article laments the demise of the pension specifically, but
the truth is pensions weren't as ubiquitous.
Speaker 3 (23:10):
As we like to think. Yeah, and everyone had them
back No, No, only half.
Speaker 2 (23:14):
Of folks at best had one available to them. And
this is when pensions were at their height. So I mean,
were they nice to have, of course, for sure, But
the costs of pensions became untenable for many companies, for
many municipalities different cities that were offering them. And the
one great thing about most folks not having access to
a defined benefit plan is that they're they're more likely
(23:35):
to switch jobs, which actually increases their pay more significantly.
Over the years, as opposed to being becoming a lifer
at the plan or with the city. But that does
put the onus of funding retirement more on our shoulders
as individuals, which honestly is more The direction I want
to see is moving from moving away from employer provided everything.
Whether it's okay, If there's a way we could do
(23:56):
that with health care on a wide scale, I think
we would also see the prices of that's come down.
We would see benefit and savings coming to individuals on
a personal level as well.
Speaker 3 (24:05):
Yeah. Yeah, employers are poor facilitators of retirement plans and
of healthcare plans. It's hard.
Speaker 1 (24:10):
It would be great if we if employment were divorced
from those two things, because it just doesn't make sense
to cobble them all together and to get all those
things from your employer. Granted, there are reasons that that
switch happened in the United States. Doesn't make it a
good thing. And you're right, Matt, like the pensions, when
you think about it from like a nostalgia perspective, Oh
it sounds really nice.
Speaker 3 (24:30):
That's what it is. This nostalagia.
Speaker 2 (24:31):
More than just leave it to beaver, it's like wishing
for the days of your but like, we are so
much better off as a society now than in nineteen
sixty five.
Speaker 1 (24:39):
Yeah, trust me, And guess what it was called golden
handcuffs for a reason you felt like you had to
stay in a place. Let's say you can go make
twenty percent down more down the road, which we talk
about these stats all the time, how much more you
can make by switching jobs. If you just did the
right thing and DEI invested more because you're able to
make more, well, then you would end up with far
more money than what the pension would provide you in retirement.
(25:00):
And so yeah, I don't know if if you don't
have access to a four one K or four h
three B or TSP. By the way, I don't think
that means you're out of luck on the retirement account
front either. So that's one of their things, is.
Speaker 3 (25:09):
Like their options.
Speaker 1 (25:10):
Yeah, hey, you don't have a four to one K,
you're screwed. Well, no iras exist, right, and it's entirely
possible to retire with a million dollars plus by only
maxing that one account each and every year. Right, I
don't think you should stop there. If you're self employed,
you can toss Big Bucks into a solo four oh
one k. They're cheap, they're easy to open, they're easy
to contribute to. So not having a traditional four one
(25:31):
K available to you through your employer, it's just not
as demoralizing as The New York Times makes it sound. Right,
social security still exists, although politicians need to shore it up,
but saving for retirement is largely an individual endeavor.
Speaker 3 (25:44):
Yep.
Speaker 1 (25:44):
And by the way, jobs with pensions do still exist.
Life Hacker just published an article highlighting the sectors where
pensions are still kind of the norm, and so if
you're keen on having one, we'll look to government jobs,
look to the military, and look to utility providers. Those
are typically the sectors where where pensions still remain totally.
Speaker 2 (26:02):
By the way, there's far more money in iras than
there are in four to one k's. Folks are actually
getting the message. They're using these accounts effectively, and specifically,
folks are flocking to wroth iras in particular, according to
research from the Center for Retirement Research at Boston College,
and they give a lot of credence to different fintech
(26:23):
companies out there where they're just making it easier for
folks to open a roth ira and to contribute regularly.
And I think that's the answer. Is the answer isn't
to go back to the way things used to be.
It's about finding new and innovative and creative solutions that
make it more accessible to folks. So like it makes
me think of even just like auto enrolling folks in
four to one k's like, that's what we need to do.
Speaker 3 (26:44):
We make that the default instead of this for those
people to think through.
Speaker 2 (26:47):
It nudge theory, Richard Thaylor. It goes to creating easy
defaults and incentives for folks to get invested on an
individual love. That's something I love. I love to see.
Speaker 1 (26:57):
Now I completely agree. I think it's not the four
one ks are the problem. And then we need to
go back to pensions because yeah, again, pensions do still
exist for some employers. I had one the very beginning
of my working career, so Matt, I'll have a small
payday for the rest of my life once I turned
sixty five from those few years working there.
Speaker 2 (27:14):
In case everyone Joel is very wealthy, it's.
Speaker 1 (27:19):
Like it's a very very modest pension because I did
not work that all that long and I didn't make
a ton of money when I worked there.
Speaker 2 (27:24):
But everyone's like, why won't you make him a beneficiary?
Like everybody like, just a little bit, that's all it takes.
Speaker 1 (27:31):
If a thousand people sign a petition, Matt, I will
give you out one percent beneficiary.
Speaker 3 (27:36):
It wouldn't be too difficult to get a thousand people
a petition.
Speaker 2 (27:40):
You know that you do your thing, you might be
eating your words so inclined to actually do that, all right.
Speaker 1 (27:48):
I think you're right though, And I think it's interesting,
like the four one K isn't the mistake, And part
of that too is And this is something we've talked
about a lot. Is just financial education, better financial education,
growing helping is especially youngsters in high school make this
correlation as they're kind of getting to the point where
they're earning money. A lot of kids. I started working
when I was fourteen. If I had known some of
(28:09):
those things, if I was being taught those things as
money was coming into my life, I might have made
some shifts earlier about where that money was going. Thought
less about spending more on the car, thought more about
funding a roth Ira or something like that. Right, But
I think that's part of the solution, at least.
Speaker 3 (28:23):
Too saying yes to the right things and no to
the wrong things.
Speaker 1 (28:26):
Now, yeah, all right, so four or one k's we
would say are not a mistake, but college might be.
We talked about apprenticeships last week with Ryan Craig, and
good news is that enrollment invocational training programs is growing
as more gen z yers. They're giving like the heisman
the stiff arm to go into college to getting an
advanced degree, and after we saw these new stats debating
(28:47):
other options, I think makes even more sense.
Speaker 3 (28:49):
Right.
Speaker 1 (28:50):
The bad news is that thirty percent of college graduates
won't earn enough to offset the price of their higher education,
not just in like the first decade, but over the
course of their whole career. Thirty percent of people are
actually going to be underwater from a debt and income
perspective thanks to the years they spent getting that college degree.
Plus nearly half of master's degree programs leave students financially
(29:14):
worse off.
Speaker 3 (29:15):
Right.
Speaker 1 (29:15):
College, yes, of course, can still make sense for some folks,
even with the much higher price tag these days. But
as a listener who who is thinking about going back
to getting an advanced degree, or as a listener of
someone who has kids that are in high school who
are getting close to college, Like, these are conversations that
you have to have that you have to be honest
and upfront about. And the biggest thing, Matt, I think
(29:36):
that stuck out to me in this data was to
be careful what you major in. Right, That's the most
important factor when it comes to lifetime earnings. Engineering, computer science,
and nursing degrees, those are like slam dunks. Overwhelmingly you're
going to make more. It's going to pay off for you.
Other majors can come with a bit of a lifetime
financial advantage. And we of course know too that your
(29:57):
vocation isn't all about making bank. But count the cost
before you opt for an expensive education that might or
might not pay off.
Speaker 2 (30:04):
Yeah, do it with your eyes wide open. And we'll
actually link to and we've done this before, but we'll
link to the BLS where they have statistics as to
the expected earnings of certain degree holders. And I think
that can help folks to make a more informed decision.
Speaker 1 (30:17):
And it's not like you're you know, most of us
are not going to say, oh, engineer pays the most.
Guess what, I have zero intuition in that, Like I
would never do that. Yeah, yeah, I'm gonna do that.
Speaker 2 (30:26):
Because one of the many point data points that I
think folks need to consider it. And luckily, I think
more and more folks are doing that given the ludicrously
high cost of college. Hey man, before we wrap it up,
let's give a little newsletter referral.
Speaker 3 (30:41):
Shout out to our friend Andy out in Utah.
Speaker 2 (30:44):
So not only does he provide us beer to drink
on the show from time to time, yeah sos sending
out the how to Money newsletter Andy, Thank you so
much for that.
Speaker 3 (30:52):
Appreciate handy.
Speaker 1 (30:54):
And yeah, if you are not subscribed to the how
to Money newsletter, what are you doing with your life?
Go go check that out how tomoney dot com slash newsletter.
It's free, of course, unlike those expensive, awful investing courses
that we just talked about. But Matt, that's going to
do it for this one. Hope everyone out there has
a great weekend. Until next time, Best Friends Album, Best
Friends Out,
Hosts And Creators
Joel Larsgaard
Matthew Altmix
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